UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-08104
CONSTELLATION FUNDS
(Exact name of registrant as specified in charter)
--------
1205 Westlakes Drive Suite 280
Berwyn, PA 19312
(Address of principal executive offices) (Zip code)
Constellation Funds
P.O. Box 219520
Kansas City, MO 64105-9520
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-866-242-5742
DATE OF FISCAL YEAR END: SEPTEMBER 30, 2005
DATE OF REPORTING PERIOD: MARCH 31, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO OF CONSTELLATION FUNDS GROUP]
SEMIANNUAL REPORT
March 31, 2005
Constellation Clover Core Value Fund
Constellation Clover Small Cap Value Fund
Constellation Clover Large Cap Value Fund
Constellation Clover Core Fixed Income Fund
Constellation Clover Income Plus Fund
Constellation Chartwell Ultra Short Duration Fixed Income Fund
Constellation Chartwell Short Duration Fixed Income Fund
Constellation Chartwell High Yield Fund
Constellation HLAM Large Cap Quality Growth Fund
Constellation HLAM Large Cap Value Fund
Constellation Pitcairn Diversified Value Fund
Constellation Pitcairn Select Value Fund
Constellation Pitcairn Diversified Growth Fund
Constellation Pitcairn Small Cap Fund
Constellation Pitcairn Family Heritage(R) Fund
Constellation Pitcairn Taxable Bond Fund
Constellation Pitcairn Tax-Exempt Bond Fund
Constellation Sands Capital Select Growth Fund
Constellation TIP Small Cap Value Opportunities Fund
Constellation TIP Financial Services Fund
Constellation TIP Healthcare & Biotechnology Fund
Constellation International Equity Fund
Constellation Strategic Value and High Income Fund
CONTENTS
1 Letter to Shareholders Shareholder Services
2 Performance
4 Disclosure of Fund Expenses Constellation Fund shareholders receive annual
6 Financial Statements and semiannual reports, and quarterly account
84 Notes to Financial Statements statements. Shareholders who have questions
96 Approval of Investment Advisory Agreements about their accounts may call a toll-free number,
1 (866) 242 5742, visit our website,
www.constellationfundsgroup.com, or write to
Constellation Funds Group, P.O. Box 219520,
Kansas City, Missouri 64105-9520
LETTER TO SHAREHOLDERS
TO OUR SHAREHOLDERS
May 27, 2005
Dear Shareholder:
We are pleased to provide you with the semi-annual report of the Constellation
Funds. The important financial information contained in this report is only
through March 31, 2005, so I invite you to get updated performance numbers and
other important information regarding your investments by visiting us on the web
at www.constellationfundsgroup.com, or calling (866) 242-5742.
Because all of the funds in the Constellation Funds family line-up are managed
on a day-to-day basis by unaffiliated money management firms, we do not have a
view of the markets that we want to impart to you in this letter. Our goal is to
bring you well-managed funds that follow investment strategies that are
consistent with their investment policies, and to make them available for
purchase both directly and through a wide variety of financial institutions and
intermediaries, including broker-dealers, banks, financial advisers and
retirement plans. It is our hope that investors will utilize our Funds in
pursuit of their financial goals, whatever they are, and thus we strive to offer
a wide variety of high quality choices, both by asset class and by style.
Thank you for investing with us.
Sincerely,
/s/ John H. Grady
John H. Grady
President, Constellation Funds
Constellation Funds 2005 Semiannual Report 1
PERFORMANCE (unaudited)
TOTAL RETURNS OF CONSTELLATION FUNDS
Through March 31, 2005
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
PLEASE CALL (866) 242-5742 FOR THE MOST RECENT MONTH END PERFORMANCE
INFORMATION.
Calendar
Six Year to One Three Five Ten
Months Date Year Years Years Years
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CLOVER CORE VALUE FUND(1) 14.01% 1.53% 14.70% 9.20% 9.61% 11.42%
Russell 3000 Value Index 10.32% -0.26% 12.88% 7.48% 5.89% 12.85%
Inception date: 12/6/91
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CLOVER SMALL CAP VALUE FUND(1) 9.01% -3.93% 7.92% 7.55% 9.56% N/A
Russell 2000 Value Index 8.70% -3.98% 9.79% 11.48% 15.42% n/a
Inception date: 2/28/96
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CLOVER LARGE CAP VALUE FUND 8.55% 0.74% 6.89% 4.40% 1.35% N/A
Russell 1000 Value Index 10.48% 0.09% 13.17% 7.16% 5.19% n/a
Inception date: 10/31/97
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CLOVER CORE FIXED
INCOME FUND 0.23% -0.25% 0.76% 5.13% 6.29% 6.60%
Lehman Aggregate Bond Index 0.48% -0.47% 1.16% 6.00% 7.14% 7.14%
Inception date: 12/6/91
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CLOVER INCOME PLUS FUND N/A N/A N/A N/A N/A N/A
S&P 500 Index n/a n/a n/a n/a n/a n/a
Lehman Aggregate Bond Index n/a n/a n/a n/a n/a n/a
Inception date: 2/28/05
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CHARTWELL ULTRA SHORT
DURATION FIXED INCOME FUND 1.20% 0.75% 1.86% 1.96% 3.53% 4.86%
Merrill Lynch 3-Month U.S. Treasury Bill Index 1.06% 0.57% 1.67% 1.47% 2.78% 4.05%
Inception date: 3/1/94
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CHARTWELL SHORT
DURATION FIXED INCOME FUND 0.70% 0.16% 1.23% 2.84% 4.51% 5.35%
Lehman 1-3 Year U.S. Government
Bond Index -0.20% -0.26% -0.29% 2.91% 4.80% 5.42%
Inception date: 3/1/94
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CHARTWELL HIGH YIELD FUND 1.31% -2.06% 5.37% 7.04% -3.39% N/A
Merrill Lynch High Yield, Cash Pay Index 2.96% -1.44% 6.79% 10.43% 7.40% n/a
Inception date: 2/27/98
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION HLAM LARGE CAP
QUALITY GROWTH FUND 2.36% -5.19% -2.48% -2.68% -2.84% 7.30%
Russell 1000 Growth Index 4.71% -4.09% 1.16% -0.69% -11.28% 8.15%
Inception date: 4/30/92
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION HLAM LARGE CAP VALUE FUND 5.55% -3.04% N/A N/A N/A N/A
Russell 1000 Value Index 10.48% 0.09% n/a n/a n/a n/a
Inception date: 4/30/04
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION PITCAIRN DIVERSIFIED
VALUE FUND 8.42% -0.62% 10.40% 6.71% N/A N/A
Russell 1000 Value Index 10.48% 0.09% 13.17% 7.16% n/a n/a
Inception date: 8/4/00
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION PITCAIRN SELECT VALUE FUND(1) 5.24% -2.56% 4.79% 2.52% N/A N/A
Russell 1000 Value Index 10.48% 0.09% 13.17% 7.16% n/a n/a
Inception date: 8/11/00
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION PITCAIRN DIVERSIFIED
GROWTH FUND 5.14% -4.10% 2.83% -1.83% N/A N/A
Russell 1000 Growth Index 4.71% -4.09% 1.16% -0.69% n/a n/a
Inception date: 8/4/00
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION PITCAIRN SMALL CAP FUND(1) 4.61% -5.30% 2.46% 8.53% N/A N/A
Russell 2000 Index 8.00% -5.34% 5.41% 8.05% n/a n/a
Inception date: 8/25/00
- -------------------------------------------------------------------------------------------------------------------------------
Since Total
Inception Assets
(annualized) ($mil)
- -------------------------------------------------------------------------
CONSTELLATION CLOVER CORE VALUE FUND(1) 12.27% $ 65.82
Russell 3000 Value Index 13.21%
Inception date: 12/6/91
- -------------------------------------------------------------------------
CONSTELLATION CLOVER SMALL CAP VALUE FUND(1) 14.83% $ 520.93
Russell 2000 Value Index 13.11%
Inception date: 2/28/96
- -------------------------------------------------------------------------
CONSTELLATION CLOVER LARGE CAP VALUE FUND 5.22% $ 6.36
Russell 1000 Value Index 7.63%
Inception date: 10/31/97
- -------------------------------------------------------------------------
CONSTELLATION CLOVER CORE FIXED
INCOME FUND 6.70% $ 27.34
Lehman Aggregate Bond Index 6.96%
Inception date: 12/6/91
- -------------------------------------------------------------------------
CONSTELLATION CLOVER INCOME PLUS FUND -1.85% $ 3.64
S&P 500 Index -1.77%
Lehman Aggregate Bond Index -0.51%
Inception date: 2/28/05
- -------------------------------------------------------------------------
CONSTELLATION CHARTWELL ULTRA SHORT
DURATION FIXED INCOME FUND 4.91% $ 340.98
Merrill Lynch 3-Month U.S. Treasury Bill Index 4.12%
Inception date: 3/1/94
- -------------------------------------------------------------------------
CONSTELLATION CHARTWELL SHORT
DURATION FIXED INCOME FUND 5.24% $ 127.36
Lehman 1-3 Year U.S. Government
Bond Index 5.28%
Inception date: 3/1/94
- -------------------------------------------------------------------------
CONSTELLATION CHARTWELL HIGH YIELD FUND -0.60% $ 7.14
Merrill Lynch High Yield, Cash Pay Index 5.44%
Inception date: 2/27/98
- -------------------------------------------------------------------------
CONSTELLATION HLAM LARGE CAP
QUALITY GROWTH FUND 7.28% $ 17.75
Russell 1000 Growth Index 8.22%
Inception date: 4/30/92
- -------------------------------------------------------------------------
CONSTELLATION HLAM LARGE CAP VALUE FUND 3.89% $ 1.76
Russell 1000 Value Index 16.00%
Inception date: 4/30/04
- -------------------------------------------------------------------------
CONSTELLATION PITCAIRN DIVERSIFIED
VALUE FUND 5.32% $ 162.73
Russell 1000 Value Index 5.58%
Inception date: 8/4/00
- -------------------------------------------------------------------------
CONSTELLATION PITCAIRN SELECT VALUE FUND(1) 4.09% $ 64.73
Russell 1000 Value Index 5.36%
Inception date: 8/11/00
- -------------------------------------------------------------------------
CONSTELLATION PITCAIRN DIVERSIFIED
GROWTH FUND -11.58% $ 110.01
Russell 1000 Growth Index -10.94%
Inception date: 8/4/00
- -------------------------------------------------------------------------
CONSTELLATION PITCAIRN SMALL CAP FUND(1) 11.18% $ 95.78
Russell 2000 Index 4.87%
Inception date: 8/25/00
- -------------------------------------------------------------------------
2 Constellation Funds 2005 Semiannual Report
PERFORMANCE (unaudited)
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
PLEASE CALL (866) 242-5742 FOR THE MOST RECENT MONTH END PERFORMANCE
INFORMATION.
Calendar
Six Year to One Three Five Ten
Months Date Year Years Years Years
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION PITCAIRN FAMILY
HERITAGE(R) FUND 3.39% -3.79% 3.84% 3.39% -1.60% 10.47%
Wilshire 5000 Index 7.53% -2.54% 6.98% 4.24% -2.66% 10.67%
Inception date: 8/4/00(3)
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION PITCAIRN TAXABLE BOND FUND -0.51% -1.05% -0.39% 5.66% 6.46% 6.54%
Lehman U.S. Government/Credit Index 0.13% -0.67% 0.41% 6.52% 7.29% 7.21%
Inception date: 8/4/00(3)
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION PITCAIRN TAX-EXEMPT
BOND FUND 0.56% -0.36% 1.66% 5.49% 5.92% 5.42%
Lehman Municipal Bond Index 1.23% -0.03% 2.66% 6.10% 6.58% 6.33%
Inception date: 8/11/00(3)
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION SANDS CAPITAL SELECT
GROWTH FUND - CLASS I SHARES 1.32% -9.22% 1.92% 3.08% N/A N/A
Russell 1000 Growth Index 4.71% -4.09% 1.16% -0.69% n/a n/a
Inception date: 8/27/04(4)
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION SANDS CAPITAL SELECT
GROWTH FUND - CLASS II SHARES 1.32% -9.10% 1.92% 3.08% N/A N/A
Russell 1000 Growth Index 4.71% -4.09% 1.16% -0.69% n/a n/a
Inception date: 8/11/00
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION TIP SMALL CAP VALUE
OPPORTUNITIES FUND(1) 9.96% -2.99% 11.68% 19.49% N/A N/A
Russell 2000 Value Index 8.70% -3.98% 9.79% 11.48% n/a n/a
Inception date: 3/4/02
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION TIP FINANCIAL SERVICES FUND(2) 9.64% -4.88% 4.09% 8.29% 6.34% N/A
S&P 500 Financials Index 1.07% -6.35% -0.99% 3.93% 5.36% n/a
Inception date: 5/22/96
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION TIP HEALTHCARE &
BIOTECHNOLOGY FUND(1)(2) 8.27% -0.76% 4.84% 7.58% N/A N/A
S&P 500 Healthcare Index 4.58% -0.60% 1.62% -1.79% n/a n/a
Inception date: 2/28/01
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION INTERNATIONAL EQUITY FUND 14.39% 0.37% 11.82% 8.25% -5.85% 3.04%
MSCI All Country World Free ex-US Index 15.65% 0.25% 15.77% 12.64% -0.41% 5.65%
Inception date: 8/4/00(3)
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION STRATEGIC VALUE AND
HIGH INCOME FUND 5.48% -2.72% 5.45% N/A N/A N/A
S&P 500 Index 6.88% -2.15% 6.69% n/a n/a n/a
Inception date: 10/31/02
- -------------------------------------------------------------------------------------------------------------------------------
Since Total
Inception Assets
(annualized) ($mil)
- -------------------------------------------------------------------------
CONSTELLATION PITCAIRN FAMILY
HERITAGE(R) FUND 9.99% $ 82.12
Wilshire 5000 Index 10.63%
Inception date: 8/4/00(3)
- -------------------------------------------------------------------------
CONSTELLATION PITCAIRN TAXABLE BOND FUND 7.08% $ 48.05
Lehman U.S. Government/Credit Index 7.98%
Inception date: 8/4/00(3)
- -------------------------------------------------------------------------
CONSTELLATION PITCAIRN TAX-EXEMPT
BOND FUND 5.87% $ 116.21
Lehman Municipal Bond Index 7.20%
Inception date: 8/11/00(3)
- -------------------------------------------------------------------------
CONSTELLATION SANDS CAPITAL SELECT
GROWTH FUND - CLASS I SHARES -7.71% $ 59.32
Russell 1000 Growth Index -11.05%
Inception date: 8/27/04(4)
- -------------------------------------------------------------------------
CONSTELLATION SANDS CAPITAL SELECT
GROWTH FUND - CLASS II SHARES -7.71% $ 83.77
Russell 1000 Growth Index -11.05%
Inception date: 8/11/00
- -------------------------------------------------------------------------
CONSTELLATION TIP SMALL CAP VALUE
OPPORTUNITIES FUND(1) 21.31% $ 29.39
Russell 2000 Value Index 12.68%
Inception date: 3/4/02
- -------------------------------------------------------------------------
CONSTELLATION TIP FINANCIAL SERVICES FUND(2) 12.70% $ 15.91
S&P500 Financials Index 12.57%
Inception date: 5/22/96
- -------------------------------------------------------------------------
CONSTELLATION TIP HEALTHCARE &
BIOTECHNOLOGY FUND(1)(2) 10.39% $ 41.72
S&P 500 Healthcare Index -2.47%
Inception date: 2/28/01
- -------------------------------------------------------------------------
CONSTELLATION INTERNATIONAL EQUITY FUND 4.47% $ 119.42
MSCI All Country World Free ex-US Index 6.41%
Inception date: 8/4/00(3)
- -------------------------------------------------------------------------
CONSTELLATION STRATEGIC VALUE AND
HIGH INCOME FUND 20.64% $ 1.05
S&P 500 Index 14.65%
Inception date: 10/31/02
- -------------------------------------------------------------------------
The Constellation Funds are distributed by Constellation Investment Distribution
Company Inc., Berwyn, PA 19312. THE INVESTOR SHOULD CONSIDER THE INVESTMENT
OBJECTIVES, RISKS, CHARGES AND EXPENSES BEFORE INVESTING. THIS INFORMATION CAN
BE FOUND IN THE PROSPECTUS. A FREE PROSPECTUS, WHICH CONTAINS DETAILED
INFORMATION, INCLUDING FEES AND EXPENSES, AND THE RISKS ASSOCIATED WITH
INVESTING IN THE FUNDS, CAN BE OBTAINED BY CALLING (866) 242 5742. READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING. The performance data quoted represents
past performance and the principal value and investment return will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
Returns less than one year are cumulative. The performance in the above table
does not reflect the deduction of taxes the shareholder will pay on fund
distributions or the redemption of fund shares. Returns shown, unless otherwise
indicated, are total returns, with dividends and income reinvested. Returns
spanning more than one year are annualized. Fee waivers are in effect; if they
had not been in effect performance would have been lower. The indexes mentioned
are unmanaged statistical composites of stock market or bond market performance.
Investing in an index is not possible.
(1) Investing in small and medium capitalization companies and science and
technology companies may subject the funds to specific inherent risks,
including above-average price fluctuations.
(2) Funds that take a focus or sector specific approach are subject to greater
risk from downturns affecting a specific issuer or industry.
(3) For periods prior to August 2000, when the Fund began operating, the
performance data quoted represents past performance of the Pitcairn
Investment Management's similarly managed common trust fund, adjusted to
reflect fees and expenses expected to be borne by the Fund. The common
trust fund was not a registered mutual fund, and therefore, was not subject
to certain investment and tax restrictions which may have adversely
affected performance.
(4) Class I Shares for the periods prior to the inception date shown reflect
the performance of the Fund's Class II Shares.
Constellation Funds 2005 Semiannual Report 3
DISCLOSURE OF FUND EXPENSES (unaudited)
All mutual funds have operating expenses. As a shareholder of a Fund, your
investment is affected by these ongoing costs, which include (among others)
costs for portfolio management, administrative services, and shareholder reports
like this one. It is important for you to understand the impact of these costs
on your investment returns.
Operating expenses such as these are deducted from the Fund's gross income and
directly reduce your final investment return. These expenses are expressed as a
percentage of the Fund's average net assets; this percentage is known as the
Fund's expense ratio.
The following examples use the expense ratio and are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The table below illustrates your Fund's costs in two ways:
* ACTUAL FUND RETURN. This section helps you to estimate the actual expenses
after fee waivers that your Fund incurred over the period. The "Expenses Paid
During Period" column shows the actual dollar expense cost incurred by a $1,000
investment in the Fund, and the "Ending Account Value" number is derived from
deducting that expense cost from the Fund's gross investment return.
You can use this information, together with the actual amount you invested in
the Fund, to estimate the expenses you paid over that period. Simply divide your
actual account value by $1,000 to arrive at a ratio (for example, an $8,600
account value divided by $1,000 = $8.6), then multiply that ratio by the number
shown for your Fund under "Expenses Paid During Period".
* HYPOTHETICAL 5% RETURN. This section helps you compare your Fund's costs with
those of other mutual funds. It assumes that the Fund had an annual 5% return
before expenses during the year, but that the expense ratio (in the "Annualized
Expense Ratios" column) for the period is unchanged. This example is useful in
making comparisons because the Securities and Exchange Commission requires all
mutual funds to make this 5% calculation. You can assess your Fund's comparative
cost by comparing the hypothetical result for your Fund in the "Expenses Paid
During Period" column with those that appear in the same charts in the
shareholder reports for other Funds.
Note: Because the return is set at 5% for comparison purposes - NOT your Fund's
actual return - the account values shown may not apply to your specific
investment.
BEGINNING ENDING ANNUALIZED EXPENSES
ACCOUNT ACCOUNT EXPENSE PAID DURING
VALUE 10/1/04 VALUE 3/31/05 RATIOS PERIOD*
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CLOVER CORE VALUE FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return $ 1,000.00 $ 1,140.10 1.09% $ 5.82
Hypothetical Fund Return 1,000.00 1,019.50 1.09 5.49
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CLOVER SMALL CAP VALUE FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,090.10 1.23 6.41
Hypothetical Fund Return 1,000.00 1,018.80 1.23 6.19
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CLOVER LARGE CAP VALUE FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,085.50 1.22 6.34
Hypothetical Fund Return 1,000.00 1,018.85 1.22 6.14
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CLOVER CORE FIXED INCOME FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,002.30 0.80 3.99
Hypothetical Fund Return 1,000.00 1,020.94 0.80 4.03
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CLOVER INCOME PLUS FUND (1)
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 981.50 1.26 1.03
Hypothetical Fund Return 1,000.00 1,003.07 1.26 1.04
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CHARTWELL ULTRA SHORT DURATION FIXED INCOME FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,012.00 0.53 2.66
Hypothetical Fund Return 1,000.00 1,022.29 0.53 2.67
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CHARTWELL SHORT DURATION FIXED INCOME FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,007.00 0.59 2.95
Hypothetical Fund Return 1,000.00 1,021.99 0.59 2.97
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION CHARTWELL HIGH YIELD FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,013.10 0.81 4.07
Hypothetical Fund Return 1,000.00 1,020.89 0.81 4.08
- -------------------------------------------------------------------------------------------------------------------------------
4 Constellation Funds 2005 Semiannual Report
DISCLOSURE OF FUND EXPENSES (unaudited)
BEGINNING ENDING ANNUALIZED EXPENSES
ACCOUNT ACCOUNT EXPENSE PAID DURING
VALUE 10/1/04 VALUE 3/31/05 RATIOS PERIOD*
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION HLAM LARGE CAP QUALITY GROWTH FUND (2)
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return $ 1,000.00 $ 948.10 1.25% $ 3.00
Hypothetical Fund Return 1,000.00 1,009.25 1.25 3.10
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION HLAM LARGE CAP VALUE FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,055.50 1.20 6.15
Hypothetical Fund Return 1,000.00 1,018.95 1.20 6.04
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION PITCAIRN DIVERSIFIED VALUE FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,084.20 1.10 5.72
Hypothetical Fund Return 1,000.00 1,019.45 1.10 5.54
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION PITCAIRN SELECT VALUE FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,052.40 1.15 5.88
Hypothetical Fund Return 1,000.00 1,019.20 1.15 5.79
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION PITCAIRN DIVERSIFIED GROWTH FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,051.40 1.10 5.63
Hypothetical Fund Return 1,000.00 1,019.45 1.10 5.54
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION PITCAIRN SMALL CAP FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,046.10 1.11 5.66
Hypothetical Fund Return 1,000.00 1,019.40 1.11 5.59
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION PITCAIRN FAMILY HERITAGE(R) FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,033.90 1.30 6.59
Hypothetical Fund Return 1,000.00 1,018.45 1.30 6.54
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION PITCAIRN TAXABLE BOND FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 994.90 0.90 4.48
Hypothetical Fund Return 1,000.00 1,020.44 0.90 4.53
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION PITCAIRN TAX-EXEMPT BOND FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,005.60 0.70 3.50
Hypothetical Fund Return 1,000.00 1,021.44 0.70 3.53
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION SANDS CAPITAL SELECT GROWTH FUND -- CLASS I
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,013.20 1.10 5.52
Hypothetical Fund Return 1,000.00 1,019.45 1.10 5.54
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION SANDS CAPITAL SELECT GROWTH FUND -- CLASS II
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,013.20 1.35 6.78
Hypothetical Fund Return 1,000.00 1,018.20 1.35 6.79
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION TIP SMALL CAP VALUE OPPORTUNITIES FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,099.60 1.45 7.59
Hypothetical Fund Return 1,000.00 1,017.70 1.45 7.29
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION TIP FINANCIAL SERVICES FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,096.40 1.48 7.74
Hypothetical Fund Return 1,000.00 1,017.55 1.48 7.44
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION TIP HEALTHCARE & BIOTECHNOLOGY FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,082.70 1.85 9.61
Hypothetical Fund Return 1,000.00 1,015.71 1.85 9.30
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION INTERNATIONAL EQUITY FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,143.90 1.45 7.75
Hypothetical Fund Return 1,000.00 1,017.70 1.45 7.29
- -------------------------------------------------------------------------------------------------------------------------------
CONSTELLATION STRATEGIC VALUE AND HIGH INCOME FUND
- -------------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,054.80 0.25 1.28
Hypothetical Fund Return 1,000.00 1,023.68 0.25 1.26
- -------------------------------------------------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 182/365 (to reflect
the one-half year period).
(1) Fund commenced operations on February 28, 2005. Expenses are equal to the
Fund's annualized expense ratio multiplied by the average account value
over the period, multiplied by 30/365.
(2) The Fund's fiscal year end has changed to September 30th from
December 31st. Expenses are equal to the Fund's annualized expense ratio
multiplied by the average account value over the period, multiplied by
90/365.
Constellation Funds 2005 Semiannual Report 5
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Clover Core Value Fund
March 31, 2005
SECTOR WEIGHTINGS+
- ------------------------------------------------------------------------------
[CHART APPEARS HERE]
25.1% Financials
12.1% Health Care
10.0% Energy
9.9% Cash Equivalents++
9.5% Utilities
9.4% Industrials
7.2% Consumer Staples
6.7% Information Technology
6.2% Consumer Discretionary
3.9% Materials
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK+ (98.4%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (6.8%)
- ------------------------------------------------------------------------------
Clear Channel Communications 29,300 $ 1,010
Eastman Kodak 19,200 625
Furniture Brands International (A) 30,500 665
Interpublic Group* 39,400 484
Reebok International 14,000 620
Ryland Group 7,200 447
Walt Disney 22,000 632
----------
4,483
----------
CONSUMER STAPLES (7.9%)
- ------------------------------------------------------------------------------
Campbell Soup 33,000 958
ConAgra Foods (A) 44,000 1,189
Constellation Brands, Cl A* 19,500 1,031
CVS 38,000 1,999
----------
5,177
----------
ENERGY (10.9%)
- ------------------------------------------------------------------------------
ConocoPhillips 11,700 1,262
Denbury Resources* 41,800 1,473
National Oilwell Varco* 27,500 1,284
Noble Energy (A) 10,700 728
Reliant Energy (A)* 41,400 471
Valero Energy 26,600 1,949
----------
7,167
----------
FINANCIALS (27.4%)
- ------------------------------------------------------------------------------
ACE 17,000 702
Capital One Financial (A) 12,700 950
Citigroup 27,600 1,240
Freddie Mac 15,500 980
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
Goldman Sachs Group (A) 12,000 $ 1,320
Hartford Financial Services Group 18,400 1,261
Hibernia, Cl A 46,000 1,472
iStar Financial 15,700 647
Lehman Brothers Holdings 10,700 1,007
Loews 9,000 662
Marshall & Ilsley 15,000 626
Merrill Lynch 25,300 1,432
North Fork Bancorporation 22,050 612
Platinum Underwriters Holdings 20,500 609
Prudential Financial 26,000 1,492
Radian Group 22,500 1,074
Safeco 17,200 838
St Paul Travelers 11,400 419
Willis Group Holdings 18,500 682
----------
18,025
----------
HEALTH CARE (13.2%)
- ------------------------------------------------------------------------------
Aetna 14,000 1,049
Cigna 10,800 964
Community Health Systems* 35,000 1,222
Sanofi-Aventis ADR (A) 29,000 1,228
Triad Hospitals* 35,100 1,758
WellChoice* 18,900 1,008
WellPoint* 11,500 1,442
----------
8,671
----------
INDUSTRIALS (10.2%)
- ------------------------------------------------------------------------------
Alliant Techsystems* 9,800 700
CSX 22,000 916
Dun & Bradstreet* 14,500 891
General Electric 35,000 1,262
Lafarge ADR 21,500 522
Republic Services 37,500 1,256
SPX 11,000 476
Yellow Roadway* 12,000 703
----------
6,726
----------
INFORMATION TECHNOLOGY (7.3%)
- ------------------------------------------------------------------------------
BISYS Group* 42,400 665
Digital Insight* 39,825 653
eFunds* 60,000 1,339
Fairchild Semiconductor International* 54,800 840
Ingram Micro, Cl A* 37,200 620
LSI Logic (A)* 130,400 729
----------
4,846
----------
MATERIALS (4.3%)
- ------------------------------------------------------------------------------
Lubrizol 23,700 963
Pactiv* 45,000 1,051
Syngenta ADR 38,300 804
----------
2,818
----------
6 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Clover Core Value Fund
March 31, 2005
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
UTILITIES (10.4%)
- ------------------------------------------------------------------------------
AES* 65,000 $ 1,065
Ameren 16,000 784
CMS Energy* 65,000 848
Constellation Energy Group 18,900 977
NiSource 54,500 1,242
Public Service Enterprise Group 24,200 1,316
SCANA 17,100 654
----------
6,886
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $52,387) 64,799
==============================================================================
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR LOANED
SECURITIES (9.6%)
- ------------------------------------------------------------------------------
BlackRock Institutional Money
Market Trust 6,302,324 6,302
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR LOANED
SECURITIES (COST $6,302) 6,302
==============================================================================
CASH EQUIVALENTS (1.3%)
- ------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares 827,423 827
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $827) 827
==============================================================================
TOTAL INVESTMENTS (109.3%)
(COST $59,516) 71,928
==============================================================================
OTHER ASSETS AND LIABILITIES (-9.3%)
- ------------------------------------------------------------------------------
Obligation to return securities lending collateral (6,302)
Payable due to Investment Adviser (41)
Payable for income distribution (10)
Payable due to Administrator (8)
Payable for Capital Shares redeemed (1)
Other assets and liabilities, net 251
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (6,111)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 65,817
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 47,998
Distributions in excess of net investment income (1)
Accumulated net realized gain on investments 5,408
Net unrealized appreciation on investments 12,412
- ------------------------------------------------------------------------------
NET ASSETS $ 65,817
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES
($65,816,898/3,788,764 SHARES) $ 17.37
==============================================================================
* Non-income producing security.
+ Narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting.
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $6,076,893.
ADR - American Depositary Receipt
Cl - Class
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 7
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Clover Small Cap Value Fund
March 31, 2005
SECTOR WEIGHTINGS+
- ------------------------------------------------------------------------------
[CHART APPEARS HERE]
26.5% Financials
15.2% Consumer Discretionary
13.3% Industrials
9.3% Information Technology
8.7% Cash Equivalents++
6.4% Energy
5.9% Materials
5.8% Utilities
4.3% Health Care
3.2% Consumer Staples
1.4% Telecommunication Services
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK+ (97.7%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (16.2%)
- ------------------------------------------------------------------------------
Blue Nile* 109,300 $ 3,022
Brightpoint* 177,000 3,315
Callaway Golf 549,000 7,027
Charlotte Russe Holding* 139,300 1,800
Cumulus Media, Cl A* 367,500 5,237
Dollar Thrifty Automotive Group* 158,200 5,186
Electronics Boutique Holdings* 130,900 5,625
Entravision Communications, Cl A* 530,700 4,707
Hearst-Argyle Television 75,400 1,923
HOT Topic (A)* 253,200 5,532
La-Z-Boy (A) 175,400 2,443
Linens 'N Things* 68,800 1,708
Men's Wearhouse (A)* 125,450 5,295
O'Charleys* 156,800 3,409
Payless Shoesource* 206,900 3,267
Playtex Products* 506,400 4,558
Reebok International 110,900 4,913
Scholastic* 150,100 5,537
Sports Authority* 101,600 2,794
Steiner Leisure* 121,900 3,985
Too* 137,000 3,380
----------
84,663
----------
CONSUMER STAPLES (3.5%)
- ------------------------------------------------------------------------------
Chiquita Brands International (A) 139,100 3,725
Energizer Holdings* 45,000 2,691
Natures Sunshine Prods 139,600 2,397
NBTY* 176,300 4,423
Rayovac* 114,000 4,743
----------
17,979
----------
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
ENERGY (6.8%)
- ------------------------------------------------------------------------------
Cabot Oil & Gas 108,750 $ 5,998
Denbury Resources* 97,200 3,424
Encore Acquisition* 138,500 5,720
Giant Industries* 15,675 403
Grey Wolf* 490,500 3,228
Helmerich & Payne 81,000 3,215
Reliant Energy* 709,000 8,068
SEACOR Holdings* 34,000 2,168
Whiting Petroleum* 80,000 3,262
----------
35,486
----------
FINANCIALS (28.4%)
- ------------------------------------------------------------------------------
Advanta, Cl B 112,000 2,576
AG Edwards 38,400 1,720
American Financial Realty Trust (A) 355,000 5,194
AmeriCredit* 140,300 3,289
AmerUs Group 75,000 3,544
BankAtlantic Bancorp, Cl A 114,500 1,992
Bankunited Financial, Cl A* 203,700 5,471
Colonial BancGroup 322,600 6,620
FelCor Lodging Trust* 780,900 9,707
FPIC Insurance Group* 82,500 2,652
HCC Insurance Holdings 82,450 2,981
Home Properties 108,100 4,194
HRPT Properties Trust 334,950 3,989
Instinet Group* 850,600 5,001
Intersections* 152,800 2,223
Jefferies Group 83,700 3,154
Knight Trading Group, Cl A* 415,200 4,002
LTC Properties 227,050 3,939
MeriStar Hospitality* 335,100 2,346
Mills 37,700 1,994
Northwest Bancorp 71,700 1,535
Ohio Casualty* 202,700 4,658
PFF Bancorp 208,100 5,744
Phoenix (A) 111,900 1,430
Piper Jaffray* 55,900 2,045
Platinum Underwriters Holdings 211,100 6,270
Providian Financial* 339,100 5,819
Quanta Capital Holdings* 229,500 1,836
Raymond James Financial 192,675 5,838
Scottish Re Group 278,400 6,270
South Financial Group 210,500 6,429
Sterling Financial* 116,770 4,169
Strategic Hotel Capital* 267,300 3,929
Susquehanna Bancshares 35,975 877
SWS Group 129,800 2,081
Triad Guaranty* 52,100 2,741
Trustreet Properties 229,150 3,527
United America Indemnity, Cl A* 150,000 2,826
W.P. Stewart (A) 145,700 3,302
----------
147,914
----------
8 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Clover Small Cap Value Fund
March 31, 2005
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
HEALTH CARE (4.6%)
- ------------------------------------------------------------------------------
Community Health Systems* 108,100 $ 3,774
Dendrite International* 155,300 2,180
Hooper Holmes 231,800 886
Kindred Healthcare* 96,500 3,387
NuVasive* 43,425 561
Orthofix International* 26,650 1,043
Triad Hospitals* 134,000 6,713
United Therapeutics* 54,900 2,509
Viasys Healthcare* 160,200 3,057
----------
24,110
----------
INDUSTRIALS (14.3%)
- ------------------------------------------------------------------------------
Alderwoods Group* 255,600 3,180
Career Education* 85,800 2,939
Celadon Group* 179,325 3,326
CNF 61,500 2,878
First Consulting Group* 338,600 1,761
Flowserve* 113,500 2,936
Lennox International 193,100 4,233
Magnetek* 401,700 2,141
MAIR Holdings* 312,600 2,788
Mesa Air Group* 563,400 3,944
Milacron* 984,569 3,003
Molecular Devices* 54,650 1,038
NS Group* 115,600 3,631
On Assignment* 427,000 2,178
Overnite (A) 79,050 2,529
Pacer International* 157,000 3,751
Reliance Steel & Aluminum (A) 42,100 1,684
Stewart & Stevenson Services 385,400 8,822
Terex* 95,400 4,131
Tredegar 114,200 1,925
United Rentals* 234,900 4,747
Wolverine Tube* 200,750 1,797
Yellow Roadway* 84,100 4,923
----------
74,285
----------
INFORMATION TECHNOLOGY (9.9%)
- ------------------------------------------------------------------------------
Activision* 201,533 2,983
Ask Jeeves (A)* 73,400 2,061
Autobytel* 433,400 2,184
BISYS Group* 142,100 2,228
Carreker* 271,100 1,521
Checkpoint Systems* 133,000 2,245
Ciber* 422,300 3,070
Coherent* 81,200 2,741
Cymer (A)* 85,000 2,276
eFunds* 101,100 2,257
ESS Technology* 203,100 1,070
Exar* 230,600 3,090
Fairchild Semiconductor International (A)* 231,100 3,543
Integrated Silicon Solutions* 273,500 1,832
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
IXYS* 264,400 $ 3,025
LSI Logic (A)* 471,100 2,633
Packeteer* 278,100 4,280
Pegasus Solutions* 262,800 3,106
THQ (A)* 132,800 3,737
Zoran* 172,800 1,789
----------
51,671
----------
MATERIALS (6.3%)
- ------------------------------------------------------------------------------
AK Steel Holding (A)* 192,600 2,130
Arch Chemicals 71,600 2,039
Buckeye Technologies* 118,975 1,285
Caraustar Industries* 110,050 1,420
Chesapeake 104,600 2,199
Crown Holdings* 201,100 3,129
Georgia Gulf 105,825 4,866
Owens-Illinois* 304,700 7,660
Packaging Corporation of America 174,200 4,231
RPM International 173,800 3,177
Wausau-Mosinee Paper 54,40 769
----------
32,905
----------
TELECOMMUNICATION SERVICES (1.5%)
- ------------------------------------------------------------------------------
Nice Systems ADR* 172,700 5,564
Remec* 201,250 1,063
Yak Communications* 206,275 1,106
----------
7,733
----------
UTILITIES (6.2%)
- ------------------------------------------------------------------------------
Alliant Energy 74,100 1,984
Avista 202,700 3,547
CMS Energy* 862,100 11,242
El Paso Electric* 173,000 3,287
Northeast Utilities 235,300 4,534
SEMCO Energy 337,050 1,938
Southern Union* 226,500 5,688
----------
32,220
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $426,026) 508,966
==============================================================================
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR LOANED
SECURITIES (6.0%)
- ------------------------------------------------------------------------------
BlackRock Institutional Money
Market Trust 31,273,242 31,273
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD AS
COLLATERAL FOR LOANED SECURITIES
(COST $31,273) 31,273
==============================================================================
CASH EQUIVALENTS (3.4%)
- ------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares 17,479,259 17,479
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $17,479) 17,479
==============================================================================
TOTAL INVESTMENTS (107.1%)
(COST $474,778) 557,718
==============================================================================
Constellation Funds 2005 Semiannual Report 9
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Clover Small Cap Value Fund
March 31, 2005
VALUE
(000)
- ------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-7.1)%
- ------------------------------------------------------------------------------
Obligation to return securities lending collateral $ (31,273)
Payable for investment securities purchased (10,352)
Payable for Capital Shares redeemed (4,843)
Payable due to Investment Adviser (394)
Payable due to Administrator (68)
Other assets and liabilities, net 10,140
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (36,790)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 520,928
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 419,467
Accumulated net investment loss (1,075)
Accumulated net realized gain on investments 19,596
Net unrealized appreciation on investments 82,940
- ------------------------------------------------------------------------------
NET ASSETS $ 520,928
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES
($520,928,250/20,114,682 SHARES) $ 25.90
==============================================================================
* Non-income producing security.
+ Narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting.
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $29,560,049.
ADR - American Depositary Receipt
Cl - Class
The accompanying notes are an integral part of the financial statements.
10 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Clover Large Cap Value Fund
March 31, 2005
SECTOR WEIGHTINGS+
- ------------------------------------------------------------------------------
[CHART APPEARS HERE]
25.7% Financials
12.4% Energy
11.5% Industrials
9.5% Cash Equivalents++
8.0% Consumer Discretionary
6.8% Utilities
6.6% Health Care
5.4% Consumer Staples
4.8% Information Technology
4.8% Materials
3.7% Telecommunication Services
0.8% Exchange Traded Funds
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK+ (98.6%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (8.9%)
- ------------------------------------------------------------------------------
Black & Decker 725 $ 57
Eastman Kodak 1,700 55
Federated Department Stores 800 51
Harrah's Entertainment (A) 700 45
Lennar, Cl A 525 30
Liberty Media International, Cl A* 700 31
NVR* 40 31
Office Depot* 1,700 38
Sears Holdings (A)* 475 63
Sherwin-Williams 1,350 59
Toys "R" Us* 1,425 37
VF 1,125 67
----------
564
----------
CONSUMER STAPLES (5.9%)
- ------------------------------------------------------------------------------
Altria Group 2,100 137
Archer-Daniels-Midland 1,300 32
Coca-Cola Enterprises (A) 2,100 43
CVS 980 51
Kellogg (A) 975 42
Kimberly-Clark 300 20
McCormick 1,150 40
Procter & Gamble (A) 210 11
----------
376
----------
ENERGY (13.7%)
- ------------------------------------------------------------------------------
Burlington Resources 625 31
ChevronTexaco 2,150 125
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
Devon Energy 1,500 $ 72
El Paso 4,000 42
Exxon Mobil 6,570 392
Occidental Petroleum 750 53
Sunoco 550 57
Valero Energy 1,325 97
----------
869
----------
FINANCIALS (28.3%)
- ------------------------------------------------------------------------------
ACE 675 28
Allstate 745 40
AMBAC Financial Group (A) 550 41
American International Group 1,470 82
Bank of America 5,220 230
CIT Group 1,050 40
Citigroup 6,345 285
E*Trade Financial* 2,400 29
Fidelity National Financial 1,100 36
Golden West Financial 750 45
Goldman Sachs Group (A) 265 29
Host Marriott 3,850 64
Lehman Brothers Holdings 350 33
M&T Bank 425 44
Merrill Lynch 850 48
Metlife 2,130 83
Morgan Stanley (A) 900 52
Old Republic International 1,650 39
Plum Creek Timber 675 24
PNC Financial Services Group 625 32
Principal Financial Group 1,150 44
Providian Financial* 2,700 46
Safeco 875 43
Simon Property Group 425 26
Transatlantic Holdings 500 33
US Bancorp 2,855 82
Wachovia 1,830 93
Wells Fargo 1,085 65
Zions Bancorporation 900 62
----------
1,798
----------
HEALTH CARE (7.2%)
- ------------------------------------------------------------------------------
Aetna 750 56
Becton Dickinson 800 47
Cigna 600 54
Coventry Health Care* 550 37
Humana* 925 29
Laboratory Corp of America Holdings* 1,325 64
McKesson 875 33
Quest Diagnostics 475 50
United Health Group 950 91
----------
461
----------
INDUSTRIALS (12.6%)
- ------------------------------------------------------------------------------
Boeing 1,100 64
Burlington Northern Santa Fe 625 34
FedEx 650 61
Constellation Funds 2005 Semiannual Report 11
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Clover Large Cap Value Fund
March 31, 2005
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
General Dynamics 275 $ 29
General Electric 9,300 335
Lockheed Martin 750 46
Masco 1,200 42
Raytheon 675 26
Republic Services 975 33
Textron 875 65
W.W. Grainger 1,085 68
----------
803
----------
INFORMATION TECHNOLOGY (5.3%)
- ------------------------------------------------------------------------------
Computer Sciences (A)* 1,310 60
Fiserv (A)* 1,150 46
Hewlett-Packard 3,200 70
International Business Machines 575 52
Microsoft 1,850 45
NCR* 850 29
Sun Microsystems (A)* 8,100 33
----------
335
----------
MATERIALS (5.3%)
- ------------------------------------------------------------------------------
Ball 1,450 60
E.I. du Pont de Nemours 1,390 71
Georgia-Pacific 1,650 59
Monsanto 550 36
Nucor 800 46
Phelps Dodge 650 66
----------
338
----------
TELECOMMUNICATION SERVICES (4.0%)
- ------------------------------------------------------------------------------
AT&T 1,600 30
Century Tel 1,200 39
SBC Communications (A) 3,490 83
Verizon Communications 2,930 104
----------
256
----------
UTILITIES (7.4%)
- ------------------------------------------------------------------------------
AES (A)* 4,950 81
Constellation Energy Group 625 32
Edison International 1,950 68
Entergy 525 37
Exelon 825 38
PG&E* 1,800 61
PPL(A) 850 46
Sempra Energy 1,450 58
TXU 650 52
----------
473
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $5,760) 6,273
==============================================================================
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
EXCHANGE TRADED FUND (0.9%)
- ------------------------------------------------------------------------------
iShares Russell 1000 Value Index Fund 900 $ 59
- ------------------------------------------------------------------------------
TOTAL EXCHANGE TRADED FUND
(COST $58) 59
==============================================================================
WARRANTS (0.0%)
- ------------------------------------------------------------------------------
Lucent Technologies, Expires 12/10/07* 75 --
- ------------------------------------------------------------------------------
TOTAL WARRANTS
(COST $0) --
==============================================================================
RIGHTS (0.0%)
- ------------------------------------------------------------------------------
Seagate (B)* 425 --
- ------------------------------------------------------------------------------
TOTAL RIGHTS
(COST $0) --
==============================================================================
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR LOANED
SECURITIES (10.0%)
- ------------------------------------------------------------------------------
BlackRock Institutional Money
Market Trust 634,335 634
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD
AS COLLATERAL FOR LOANED SECURITIES
(COST $634) 634
==============================================================================
CASH EQUIVALENTS (0.5%)
- ------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares 31,041 31
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $31) 31
==============================================================================
TOTAL INVESTMENTS (110.0%)
(COST $6,483) 6,997
==============================================================================
OTHER ASSETS AND LIABILITIES (-10.0%)
- ------------------------------------------------------------------------------
Obligation to return securities lending collateral (634)
Payable for income distribution (25)
Payable for Capital Shares redeemed (3)
Payable due to Investment Adviser (2)
Payable due to Administrator (1)
Other assets and liabilities, net 29
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (636)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 6,361
==============================================================================
12 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Clover Large Cap Value Fund
March 31, 2005
VALUE
(000)
- ------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 6,121
Accumulated net realized loss on investments (274)
Net unrealized appreciation on investments 514
- ------------------------------------------------------------------------------
NET ASSETS $ 6,361
- ------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES
($6,361,251/546,053 SHARES) $ 11.65
==============================================================================
* Non-income producing security.
+ Narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting.
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $674,865.
(B) This security was issued for possible settlement of pending litigation and
does not have an expiration date.
Cl - Class
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 13
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Clover Core Fixed Income Fund
March 31, 2005
SECTOR WEIGHTINGS+
- ------------------------------------------------------------------------------
[CHART APPEARS HERE]
41.6% U.S. Government Mortgage- Backed Obligations
38.3% Corporate Obligations
7.4% U.S. Treasury Obligations
5.8% U.S. Government Agency Obligations
2.9% Convertible Bonds
2.5% Cash Equivalents
1.5% Municipal Bonds
+ Percentages based on total investments
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
CORPORATE BONDS (37.7%)
- ------------------------------------------------------------------------------
CONSUMER STAPLES (6.7%)
- ------------------------------------------------------------------------------
Conagra Foods
7.875%, 09/15/10 $ 700 $ 800
Sysco
7.250%, 04/15/07 405 428
7.160%, 04/15/27 500 612
------------
1,840
------------
ENERGY (2.0%)
- ------------------------------------------------------------------------------
XTO Energy
7.500%, 04/15/12 475 544
------------
FINANCIALS (6.6%)
- ------------------------------------------------------------------------------
First Data
4.700%, 11/01/06 500 504
Marsh & McClennan
7.125%, 06/15/09 600 647
Prudential Financial, MTN, Ser B
5.100%, 09/20/14 650 644
------------
1,795
------------
INDUSTRIALS (6.4%)
- ------------------------------------------------------------------------------
Roadway
8.250%, 12/01/08 925 1,017
Thermo Electron
7.625%, 10/30/08 665 724
------------
1,741
------------
UTILITIES (16.0%)
- ------------------------------------------------------------------------------
Air Products & Chemicals, MTN, Ser E
7.340%, 06/15/26 250 293
Carolina Power & Light
5.125%, 09/15/13 685 685
Emerson Electric
7.125%, 08/15/10 750 835
Kinder Morgan Energy
5.125%, 11/15/14 500 487
Natural Fuel Gas, MTN, Ser D
6.303%, 05/27/08 1,000 1,047
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Scana
5.810%, 10/23/08 $ 1,000 $ 1,032
------------
4,379
- ------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(COST $10,025) 10,299
==============================================================================
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (40.9%)
- ------------------------------------------------------------------------------
FHLMC CMO/REMIC
Ser 2882, Cl OI IO
5.000%, 02/15/30 1,147 184
Ser 2882, Cl YI IO
5.000%, 03/15/24 4,847 546
FHLMC
Pool #C01844
4.500%, 04/01/34 675 641
Pool #G11570
5.000%, 04/01/19 496 497
FNMA CMO/REMIC
Ser 1994-17, Cl H
6.000%, 02/25/09 277 284
FNMA
Pool #254759
4.500%, 06/01/18 1,541 1,510
Pool #255111
5.500%, 03/01/34 1,002 1,004
Pool #369214
5.000%, 04/01/09 47 47
Pool #535301
6.500%, 04/01/15 104 108
Pool #689022
5.000%, 05/01/33 1,042 1,022
Pool #694431
5.000%, 03/01/18 652 652
Pool #738783
7.000%, 02/01/25 839 890
GNMA CMO/REMIC
Ser 2004-59, Cl DA
5.000%, 06/16/34 257 258
GNMA
Pool #13125
8.000%, 10/15/06 2 2
Pool #187899
8.000%, 05/15/17 6 6
Pool #196477
10.000%, 04/15/10 22 25
Pool #202886
8.000%, 03/15/17 26 28
Pool #221235
8.500%, 07/15/17 17 19
Pool #331786
8.000%, 08/15/22 24 26
Pool #376400
6.500%, 02/15/24 130 136
Pool #439478
7.000%, 01/15/27 109 115
14 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Clover Core Fixed Income Fund
March 31, 2005
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Pool #457921
5.500%, 12/15/28 $ 192 $ 194
Pool #462622
6.500%, 03/15/28 192 200
Pool #533974
6.500%, 05/15/32 98 103
Pool #553328
4.500%, 07/15/18 692 683
Pool #570400
6.500%, 09/15/31 234 245
Pool #604616
4.500%, 09/15/18 783 773
Pool #781029
6.500%, 05/15/29 67 70
Pool #781096
6.500%, 12/15/28 315 330
Pool #781231
7.000%, 12/15/30 153 162
Pool #781276
6.500%, 04/15/31 248 260
Pool #781328
7.000%, 09/15/31 157 166
- ------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT
MORTGAGE-BACKED OBLIGATIONS
(COST $11,257) 11,186
==============================================================================
U.S. TREASURY OBLIGATIONS (7.3%)
- ------------------------------------------------------------------------------
U.S. Treasury Bonds
7.500%, 11/15/16 500 627
6.375%, 08/15/27 325 390
6.250%, 08/15/23 400 466
6.000%, 02/15/26 450 515
- ------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $1,915) 1,998
==============================================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS (5.7%)
- ------------------------------------------------------------------------------
FHLB
3.500%, 05/15/07 500 495
FHLMC
3.250%, 07/31/06 250 248
TVA
5.880%, 04/01/36 750 831
- ------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $1,626) 1,574
==============================================================================
CONVERTIBLE BONDS (2.8%)
- ------------------------------------------------------------------------------
BISYS Group, CV to 29.9458 Shares
4.000%, 03/15/06 650 643
Quebecor World, CV to 30.5880 Shares
6.000%, 10/01/07 128 131
- ------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS
(COST $773) 774
==============================================================================
FACE AMOUNT VALUE
(000)/SHARES (000)
- ------------------------------------------------------------------------------
MUNICIPAL BOND (1.5%)
- ------------------------------------------------------------------------------
VIRGINIA (1.5%)
- ------------------------------------------------------------------------------
State Housing Authority RB, Taxable
Rental, Ser C
5.000%, 05/01/13 $ 400 $ 401
- ------------------------------------------------------------------------------
TOTAL MUNICIPAL BOND
(COST $406) 401
==============================================================================
CASH EQUIVALENTS (2.5%)
- ------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares 672,065 672
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $672) 672
==============================================================================
TOTAL INVESTMENTS (98.4%)
(COST $26,674) 26,904
==============================================================================
OTHER ASSETS AND LIABILITIES (1.6%)
- ------------------------------------------------------------------------------
Payable for income distribution (98)
Payable for Capital Shares redeemed (24)
Payable due to Investment Adviser (9)
Payable due to Administrator (3)
Other assets and liabilities, net 570
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES 436
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 27,340
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 26,847
Distributions in excess of net investment income (1)
Accumulated net realized gain on investments 264
Net unrealized appreciation on investments 230
- ------------------------------------------------------------------------------
NET ASSETS $ 27,340
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE--CLASS I SHARES
($27,340,177/2,750,518 SHARES) $ 9.94
==============================================================================
Cl - Class
CMO - Collateralized Mortgage Obligation
CV - Convertible Security
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
IO - Interest Only Security
MTN - Medium Term Note
RB - Revenue Bond
REMIC - Real Estate Mortgage Investment Conduit
Ser - Series
TVA - Tennessee Valley Authority
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 15
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Clover Income Plus Fund
March 31, 2005
SECTOR WEIGHTINGS+
- ------------------------------------------------------------------------------
[CHART APPEARS HERE]
22.3% Cash Equivalents
20.1% Financials
17.8% Utilities
8.4% Industrials
7.3% Energy
6.9% Materials
6.4% Consumer Discretionary
3.8% Consumer Staples
3.8% Exchange Traded Funds
1.7% Health Care
0.8% Information Technology
0.7% Telecommunication Services
+ Percentages based on total investments
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK (79.8%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (6.9%)
- ------------------------------------------------------------------------------
Cherokee 550 $ 18
Duquesne Light Holdings 1,725 31
Kimball International 1,300 19
Knape & Vogt Manufacturing 1,075 13
La-Z-Boy 1,425 20
OfficeMax 1,000 34
Russ Berrie 1,500 29
Stanley Works 925 42
Tupperware 2,300 47
------------
253
------------
CONSUMER STAPLES (4.1%)
- ------------------------------------------------------------------------------
ConAgra Foods 950 26
DIMON* 4,875 30
HJ Heinz 700 26
Kimberly-Clark 575 38
Reynolds American 375 30
------------
150
------------
ENERGY (7.8%)
- ------------------------------------------------------------------------------
BP ADR* 1,200 75
ChevronTexaco 1,450 85
ConocoPhillips 300 32
Lufkin Industries 500 24
Reliant Energy* 1,800 20
Wisconsin Energy 1,375 49
------------
285
------------
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
FINANCIALS (21.7%)
- ------------------------------------------------------------------------------
American Financial Realty Trust 2,025 $ 30
AmSouth Bancorp 1,725 45
Bank of America 1,200 53
Citigroup 625 28
Comerica 300 17
Equity Residential 2,450 79
First Industrial Realty Trust 300 11
FirstMerit 1,200 32
Friedman Billings Ramsey Group, Cl A 2,500 40
Home Properties 700 27
Hospitality Properties Trust 650 26
Huntington Bancshares 1,200 29
La Quinta Properties* 1,000 26
LTC Properties 3,075 53
Public Storage 425 24
Reckson Associates Realty 800 25
Simon Property Group 650 39
Trustreet Properties 1,450 22
Vornado Realty Trust 650 45
W.P. Stewart 1,275 29
Waddell & Reed Financial, Cl A 1,200 24
Weingarten Realty Investors 650 22
Wilmington Trust 775 27
Winston Hotels 3,200 37
------------
790
------------
HEALTH CARE (1.9%)
- ------------------------------------------------------------------------------
Bristol-Myers Squibb 1,200 31
Merck 1,150 37
------------
68
------------
INDUSTRIALS (9.0%)
- ------------------------------------------------------------------------------
Emerson Electric 700 46
General Electric 725 26
Honeywell International 1,150 43
Hubbell, Cl B 450 23
International Aluminum 875 29
RR Donnelley & Sons 950 30
ServiceMaster 3,550 48
Standard Register 2,575 32
Stewart & Stevenson Services 2,275 52
------------
329
------------
INFORMATION TECHNOLOGY (0.9%)
- ------------------------------------------------------------------------------
Hewlett-Packard 1,425 31
------------
MATERIALS (7.5%)
- ------------------------------------------------------------------------------
Chesapeake 925 19
Dow Chemical 300 15
E.I. du Pont de Nemours 300 15
Kronos Worldwide* 8 --
Lyondell Chemical 850 24
MeadWestvaco 875 28
NL Industries 2,075 48
16 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Clover Income Plus Fund
March 31, 2005
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
Olin 1,075 $ 24
Packaging Corporation of America 1,375 33
RPM International 1,800 33
Sonoco Products 1,125 33
------------
272
------------
TELECOMMUNICATION SERVICES (0.8%)
- ------------------------------------------------------------------------------
Verizon Communications 800 29
------------
UTILITIES (19.2%)
- ------------------------------------------------------------------------------
Ameren 1,075 53
Atmos Energy 1,100 30
Cinergy 725 29
CMS Energy* 2,725 36
Constellation Energy Group 625 32
DPL 1,225 31
Duke Energy 575 16
Energy East 1,300 34
FPL Group 1,375 55
KeySpan 775 30
NiSource 2,350 54
Northeast Utilities 1,925 37
NSTAR 625 34
Piedmont Natural Gas 1,000 23
Public Service Enterprise Group 1,000 54
SCANA 875 33
SEMCO Energy 2,050 12
Southern 925 30
Southern Union* 500 13
Southwest Gas 925 22
Vectren 775 21
WGL Holdings 625 19
------------
698
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $2,960) 2,905
==============================================================================
EXCHANGE TRADED FUND (4.1%)
- ------------------------------------------------------------------------------
iShares Dow Jones Select
Dividend Index Fund 2,475 148
- ------------------------------------------------------------------------------
TOTAL EXCHANGE TRADED FUND
(COST $152) 148
==============================================================================
CASH EQUIVALENTS (24.0%)
- ------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares 874,163 874
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $874) 874
==============================================================================
TOTAL INVESTMENTS (107.9%)
(COST $3,986) 3,927
==============================================================================
VALUE
(000)
- ------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-7.9%)
- ------------------------------------------------------------------------------
Receivable due from Investment Adviser $ 2
Payable for income distribution (10)
Payable for Capital Shares redeemed (294)
Payable due to Shareholder Servicing Agent (1)
Other assets and liabilities, net 15
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (288)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 3,639
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 3,702
Accumulated net realized loss on investments (4)
Net unrealized depreciation on investments (59)
- ------------------------------------------------------------------------------
NET ASSETS $ 3,639
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES
($3,639,331/371,792 SHARES) $ 9.79
==============================================================================
* Non-income producing security.
ADR - American Depositary Receipt
Cl - Class
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 17
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Chartwell Ultra Short Duration Fixed Income Fund
March 31, 2005
SECTOR WEIGHTINGS+
- ------------------------------------------------------------------------------
[CHART APPEARS HERE]
87.5% U.S. Government Mortgage Backed Obligations
8.8% Cash Equivalents
3.7% U.S. Government Agency Obligations
+ Percentages based on total investments
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (87.4%)
- ------------------------------------------------------------------------------
FHLMC CMO/REMIC
Ser 1106, Cl E
7.500%, 07/15/06 $ 2 $ 2
Ser 1377, Cl F (A)
3.313%, 09/15/07 237 237
Ser 1544, Cl L(A)
3.550%, 07/15/08 153 153
Ser 161, Cl F
9.500%, 06/15/06 -- --
Ser 1832, Cl E
6.500%, 07/15/10 823 825
Ser 2118, Cl QD
6.500%, 10/15/27 194 194
Ser 2303, Cl TD
6.500%, 05/15/30 326 326
Ser 2416, Cl PN
6.000%, 11/15/28 2,718 2,732
Ser 2440, Cl OG
6.500%, 12/15/30 3,178 3,228
Ser 2463, Cl PE
6.000%, 03/15/28 5,559 5,615
Ser 2483, Cl DC
5.500%, 07/15/14 1,390 1,397
Ser 2520, Cl BD
5.250%, 10/15/31 1,902 1,921
Ser 2527, Cl LT
3.870%, 12/15/28 2,549 2,546
Ser 2527, Cl LU
3.790%, 12/15/28 3,869 3,865
Ser 2537, Cl LA
4.250%, 05/15/30 2,893 2,882
Ser 2571, Cl FN (A)
3.460%, 08/15/32 11,223 11,399
Ser 2575, Cl LM
4.500%, 05/15/32 2,578 2,569
Ser 2586, Cl WA
4.000%, 12/15/32 4,289 4,278
Ser 2586, Cl XG
4.000%, 12/15/32 7,651 7,357
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Ser 2590, Cl UL
3.750%, 03/15/32 $ 2,813 $ 2,774
Ser 2594, Cl YA
4.000%, 04/15/23 3,210 3,163
Ser 2628, Cl F (A)
3.210%, 06/15/32 4,392 4,402
Ser 2649, Cl PJ
3.500%, 06/15/33 3,116 3,049
Ser 2650, Cl FX (A)
3.210%, 12/15/32 8,880 8,927
Ser 2720, Cl FA(A)
3.210%, 01/15/29 3,147 3,158
Ser 2750, Cl FG (A)
3.210%, 02/15/34 5,629 5,658
Ser 2752, Cl FM (A)
3.160%, 12/15/30 4,182 4,197
Ser 2752, Cl FP(A)
4.210%, 02/15/34 3,319 3,324
Ser 2764, Cl FB (A)
3.160%, 03/15/31 4,451 4,464
Ser 2770, Cl FH (A)
3.210%, 03/15/34 4,764 4,799
Ser 2778, Cl FV (A)
3.410%, 03/15/34 2,339 2,367
Ser 2799, Cl F (A)
3.410%, 05/15/34 6,110 6,157
Ser 2822, Cl FD (A)
3.410%, 03/15/33 2,031 2,040
Ser 2822, Cl FP(A)
3.410%, 11/15/32 4,984 5,039
Ser 2827, Cl FW (A)
3.610%, 07/15/34 11,822 11,876
Ser 2858, Cl HF (A)
3.360%, 09/15/34 4,762 4,805
Ser 2876, Cl FH (A)
3.360%, 10/15/34 4,806 4,830
Ser 2878, Cl FD (A)
3.410%, 10/15/34 8,899 8,947
Ser 2886, Cl BF (A)
3.310%, 11/15/34 2,846 2,853
Ser 2892, Cl KF (A)
3.460%, 11/15/34 7,774 7,808
Ser 2894, Cl FB (A)
3.410%, 11/15/34 9,842 9,897
Ser 2921, Cl JF (A)
3.310%, 01/15/35 4,990 4,985
FHLMC
Pool #184967
7.750%, 08/01/08 29 29
Pool #B15413
8.000%, 03/01/11 888 939
Pool #E00746
7.000%, 09/01/14 2,282 2,398
Pool #E64944
7.000%, 07/01/11 314 331
18 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Chartwell Ultra Short Duration Fixed Income Fund
March 31, 2005
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Pool #G10665
7.000%, 03/01/12 $ 2,572 $ 2,705
Pool #G10822
7.000%, 07/01/13 4,928 5,181
Pool #G11656
7.000%, 06/01/17 4,879 5,128
Pool #M90686
5.500%, 12/01/06 323 327
FNMA CMO/REMIC
Ser 2001-4, Cl PB
7.000%, 04/25/20 2,004 2,015
Ser 2001-50, Cl LD
6.500%, 05/25/30 334 334
Ser 2002-67, Cl AM
5.000%, 11/25/15 3,453 3,483
Ser 2002-81, Cl F (A)
3.350%, 04/25/32 15,000 15,206
Ser 2002-82, Cl FP(A)
3.350%, 02/25/32 5,000 5,063
Ser 2002-83, Cl MA
4.500%, 03/25/09 252 252
Ser 2002-87, Cl FB (A)
3.360%, 10/25/31 2,000 2,029
Ser 2002-9, Cl PB
6.000%, 11/25/14 100 100
Ser 2003-119, Cl PU
4.000%, 11/25/33 3,711 3,653
Ser 2003-33, Cl AM
4.250%, 05/25/33 1,662 1,649
Ser 2003-33, Cl AU
4.000%, 03/25/33 2,625 2,495
Ser 2003-34, Cl AD
4.000%, 01/25/32 2,190 2,161
Ser 2003-34, Cl FX (A)
3.990%, 05/25/33 2,470 2,489
Ser 2003-46, Cl PA
4.000%, 06/25/10 1,177 1,174
Ser 2003-61, Cl FK (A)
4.350%, 08/25/33 11,663 11,967
Ser 2003-69, Cl NF (A)
4.190%, 07/25/33 3,844 3,891
Ser 2003-76, Cl FB (A)
3.300%, 08/25/33 3,975 3,989
Ser 2003-81, Cl FE (A)
3.350%, 09/25/33 6,816 6,884
Ser 2004-29, Cl HF (A)
4.300%, 07/25/33 2,242 2,247
Ser 2004-96, Cl LF (A)
3.850%, 12/25/34 4,836 4,855
Ser 2005-16, Cl FW
3.490%, 01/25/35 7,807 7,819
FNMA
Pool #190054
7.000%, 10/01/13 531 558
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Pool #253472
7.500%, 09/01/10 $ 368 $ 390
Pool #519992
7.000%, 10/01/14 343 360
Pool #535635
8.500%, 06/01/12 886 920
Pool #545304
7.500%, 11/01/31 4,354 4,659
Pool #555646
7.500%, 09/01/16 2,373 2,504
Pool #704214
7.500%, 12/01/27 1,934 2,078
GNMA ARM
Pool #8103 (A)
4.000%, 02/20/16 72 73
Pool #8287 (A)
4.125%, 11/20/17 77 77
Pool #8297 (A)
4.125%, 12/20/17 126 128
Pool #8321 (A)
4.000%, 02/20/18 281 281
Pool #8333 (A)
4.000%, 03/20/18 197 200
Pool #8345 (A)
4.000%, 04/20/18 111 111
Pool #8366 (A)
3.375%, 06/20/18 122 123
Pool #8404 (A)
3.750%, 09/20/18 7 7
Pool #8405 (A)
4.000%, 09/20/18 64 65
Pool #8462 (A)
3.375%, 02/20/19 13 14
Pool #8489 (A)
4.000%, 04/20/19 115 115
GNMA CMO/REMIC
Ser 2003-34, Cl PM
4.000%, 04/20/33 8,319 8,174
GNMA
Pool #781140
7.000%, 10/15/14 4,827 5,105
- ------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(COST $296,339) 297,780
==============================================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS (3.7%)
- ------------------------------------------------------------------------------
FHLB (A)
4.750%, 09/29/14 3,000 2,941
3.120%, 06/08/06 1,750 1,750
2.980%, 02/22/07 5,000 4,995
FNMA(A)
2.610%, 02/24/06 2,950 2,930
- ------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $12,697) 12,616
==============================================================================
Constellation Funds 2005 Semiannual Report 19
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Chartwell Ultra Short Duration Fixed Income Fund
March 31, 2005
FACE AMOUNT VALUE
(000)/SHARES (000)
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENT (8.8%)
- ------------------------------------------------------------------------------
PNC Capital Markets, 2.56%,
dated 03/31/05, to be repurchased on
04/01/05, repurchase price $30,120,142
(collateralized by a U.S. Government
obligation, par value $30,118,000, 4.00%,
09/29/09, total market value $30,694,000)(B) $ 30,118 $ 30,118
- ------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $30,118) 30,118
==============================================================================
CASH EQUIVALENTS (0.0%)
- ------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares 382 --
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $0) --
==============================================================================
TOTAL INVESTMENTS (99.9%)
(COST $339,154) 340,514
==============================================================================
OTHER ASSETS AND LIABILITIES (0.1%)
- ------------------------------------------------------------------------------
Payable for income distribution (918)
Payable due to Capital Shares redeemed (627)
Payable due to Investment Adviser (69)
Payable due to Administrator (43)
Other assets and liabilities, net 2,120
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES 463
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 340,977
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 346,386
Distributions in excess of net investment income (9)
Accumulated net realized loss on investments (6,760)
Net unrealized appreciation on investments 1,360
- ------------------------------------------------------------------------------
NET ASSETS $ 340,977
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES
($340,977,074/33,763,561 SHARES) $ 10.10
==============================================================================
(A) Variable rate security - the rate reflected on the Statement of Net Assets
is the rate in effect on March 31, 2005.
(B) Tri-Party Repurchase Agreement
ARM - Adjustable Rate Mortgage
Cl - Class
CMO - Collateralized Mortgage Obligation
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
REMIC - Real Estate Mortgage Investment Conduit
Ser - Series
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
20 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Chartwell Short Duration Fixed Income Fund
March 31, 2005
SECTOR WEIGHTINGS+
- ------------------------------------------------------------------------------
[CHART APPEARS HERE]
77.3% U.S. Government Mortgage Backed Obligations
10.7% Cash Equivalents++
7.1% U.S. Treasury Obligations
4.7% U.S. Government Agency Obligations
0.2% Asset-Backed Securities
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (83.2%)
- ------------------------------------------------------------------------------
FHLMC CMO/REMIC
Ser 1093, Cl F
7.500%, 06/15/06 $ 17 $ 16
Ser 1538, Cl J
6.500%, 06/15/08 160 165
Ser 161, Cl F
9.500%, 06/15/06 15 15
Ser 2416, Cl PN
6.000%, 11/15/28 2,718 2,732
Ser 2509, Cl EA
4.000%, 12/15/12 1,223 1,221
Ser 2510, Cl TA
4.000%, 06/15/32 1,459 1,421
Ser 2515, Cl ED
5.000%, 03/15/17 3,529 3,562
Ser 2537, Cl LA
4.250%, 05/15/30 2,864 2,853
Ser 2541, Cl MC
6.000%, 01/15/29 3,461 3,510
Ser 2543, Cl YJ
4.500%, 03/15/32 2,669 2,632
Ser 2552, Cl NH
4.500%, 04/15/21 505 506
Ser 2566, Cl LM
4.500%, 04/15/32 1,857 1,833
Ser 2575, Cl QP
4.500%, 11/15/31 2,379 2,361
Ser 2581, Cl PW
3.000%, 04/15/16 1,438 1,435
Ser 2583, Cl ND
4.250%, 12/15/10 1,347 1,348
Ser 2586, Cl XG
4.000%, 12/15/32 1,913 1,839
Ser 2590, Cl QY
3.750%, 04/15/28 1,655 1,621
Ser 2590, Cl UL
3.750%, 03/15/32 3,535 3,486
Ser 2596, Cl QE
4.000%, 03/15/33 2,308 2,228
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Ser 2649, Cl PJ
3.500%, 06/15/33 $ 1,871 $ 1,831
Ser 2744, Cl TA
5.500%, 03/15/26 3,843 3,903
FHLMC
Pool #C46122
7.000%, 01/01/26 1,207 1,278
Pool #C66916
7.000%, 05/01/32 300 316
Pool #D94598
6.500%, 04/01/21 334 348
Pool #E97227
7.000%, 09/01/14 611 640
Pool #G10288
6.000%, 09/01/09 64 65
Pool #G10446
6.500%, 02/01/11 96 100
Pool #G30085
7.500%, 10/01/17 384 413
Pool #M90771
5.000%, 12/01/07 1,069 1,085
FNMA CMO/REMIC
Ser 1991-133, Cl Z
8.000%, 09/25/06 92 94
Ser 1991-72, Cl G
8.000%, 07/25/06 15 15
Ser 1994-27, Cl PJ
6.500%, 06/25/23 484 492
Ser 1997-81, Cl PC
5.000%, 04/18/27 240 240
Ser 1999-15, Cl PC
6.000%, 09/25/18 69 71
Ser 2002-71, Cl AP
5.000%, 11/25/32 2,109 2,114
Ser 2002-72, Cl A
5.000%, 10/25/15 790 793
Ser 2003-119, Cl PU
4.000%, 11/25/33 1,591 1,566
Ser 2003-30, Cl MB
4.000%, 06/25/27 3,000 2,956
Ser 2003-34, Cl GJ
4.000%, 02/25/33 5,802 5,642
Ser 2003-42, Cl CA
4.000%, 05/25/33 1,812 1,769
Ser 2003-7, Cl PA
4.500%, 03/25/20 1,199 1,200
FNMA
Pool #190054
7.000%, 10/01/13 1,021 1,071
Pool #250477
6.000%, 01/01/11 50 51
Pool #303096
7.500%, 12/01/09 137 143
Pool #313429
7.000%, 03/01/12 386 404
Constellation Funds 2005 Semiannual Report 21
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Chartwell Short Duration Fixed Income Fund
March 31, 2005
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Pool #323441
7.000%, 12/01/13 $ 701 $ 736
Pool #323493
7.500%, 12/01/28 2,770 2,974
Pool #323832
7.500%, 07/01/29 405 434
Pool #334593
7.000%, 05/01/24 25 26
Pool #404993
7.500%, 11/01/27 1,621 1,740
Pool #535560
7.000%, 08/01/14 6,088 6,379
Pool #545304
7.500%, 11/01/31 4,643 4,969
Pool #546474
7.000%, 01/01/15 966 1,015
Pool #555973
7.500%, 12/01/14 2,076 2,190
Pool #6222
9.000%, 04/01/16 52 55
Pool #647567
6.000%, 06/01/17 817 844
Pool #665773
7.500%, 06/01/31 865 928
Pool #704214
7.500%, 12/01/27 1,095 1,177
Pool #725284
7.000%, 11/01/18 2,922 3,068
Pool #794717
7.500%, 06/01/31 4,606 4,943
Pool #8245
8.000%, 12/01/08 78 82
GNMA ARM
Pool #8426 (A)
4.125%, 11/20/18 41 41
GNMA CMO/REMIC
Pool #2707
5.500%, 01/20/14 18 18
Pool #2802
5.500%, 07/20/14 19 20
Pool #2843
5.500%, 11/20/14 232 239
Pool #2999
7.500%, 11/20/30 2,471 2,641
Pool #344233
8.000%, 02/15/23 160 173
Pool #345123
8.000%, 12/15/23 326 352
Pool #351122
6.500%, 07/15/08 55 56
Pool #357343
6.500%, 10/15/08 26 27
Pool #462486
6.500%, 01/15/13 74 78
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Pool #569337
6.500%, 04/15/22 $ 109 $ 115
Pool #578189
6.000%, 02/15/32 80 83
Pool #68224
8.000%, 06/15/12 106 112
Pool #780322
8.000%, 11/15/22 194 210
Pool #780327
8.000%, 11/15/17 99 107
Pool #780604
7.000%, 07/15/12 1,245 1,309
Pool #781140
7.000%, 10/15/14 2,477 2,619
Pool #814
8.000%, 08/20/17 242 260
Ser 2002-13, Cl A
6.000%, 10/16/30 421 422
Ser 2002-72, Cl AB
4.500%, 10/20/32 2,206 2,149
- ------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(COST $106,305) 105,975
==============================================================================
U.S. TREASURY OBLIGATION (7.6%)
- ------------------------------------------------------------------------------
U.S. Treasury Note (C)
3.500%, 02/15/10 10,000 9,706
- ------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATION
(COST $9,788) 9,706
==============================================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS (5.0%)
- ------------------------------------------------------------------------------
FHLB (A)
6.000%, 04/26/19 500 489
4.750%, 09/29/14 4,000 3,922
FNMA(A)
2.610%, 02/24/06 2,000 1,986
- ------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $6,490) 6,397
==============================================================================
ASSET-BACKED SECURITIES (0.2%)
- ------------------------------------------------------------------------------
Discover Card Master Trust I,
Ser 2000-9, Cl A
6.350%, 07/15/08 150 153
PECO Energy Transition Trust,
Ser 1999-A, Cl A6
6.050%, 03/01/09 125 128
- ------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(COST $284) 281
==============================================================================
22 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Chartwell Short Duration Fixed Income Fund
March 31, 2005
FACE AMOUNT VALUE
(000)/SHARES (000)
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENT (3.7%)
- ------------------------------------------------------------------------------
PNC Capital Markets 2.56%,
dated 03/31/05, to be repurchased on
04/01/2005, repurchase price $4,725,336
(collateralized by a U.S. Government
obligation, 4.00%, 09/22/09, par value
$4,725,000, total market value $4,816,000)(B) $ 4,725 $ 4,725
- ------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $4,725) 4,725
==============================================================================
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR LOANED
SECURITIES (7.8%)
- ------------------------------------------------------------------------------
BlackRock Institutional Money
Market Trust 9,887,500 9,888
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR LOANED SECURITIES
(COST $9,888) 9,888
==============================================================================
TOTAL INVESTMENTS (107.5%)
(COST $137,480) 136,972
==============================================================================
OTHER ASSETS AND LIABILITIES (-7.5%)
- --------------------------------------------------------------------------------
Obligation to return securities lending collateral (9,888)
Payable for income distribution (438)
Payable due to Investment Adviser (24)
Payable due to Administrator (16)
Payable for Capital Shares redeemed (254)
Other assets and liabilities, net 1,012
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (9,608)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 127,364
==============================================================================
VALUE
(000)
- ------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 130,603
Distributions in excess of net investment income (8)
Accumulated net realized loss on investments (2,723)
Net unrealized depreciation on investments (508)
- ------------------------------------------------------------------------------
NET ASSETS $ 127,364
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES
($127,364,330/12,822,902 SHARES) $ 9.93
==============================================================================
(A) Variable rate security - the rate reflected on the Statement of Net Assets
is the rate in effect on March 31, 2005.
(B) Tri-Party Repurchase Agreement
(C) Security fully or partially on loan at March 31, 2005 (See Note 9 in Notes
to Financial Statements). The total value of securities on loan at
March 31, 2005 was $9,749,408.
ARM - Adjustable Rate Mortgage
Cl - Class
CMO - Collateralized Mortgage Obligation
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
REMIC - Real Estate Mortgage Investment Conduit
Ser - Series
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 23
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Chartwell High Yield Fund
March 31, 2005
SECTOR WEIGHTINGS+
- ------------------------------------------------------------------------------
[CHART APPEARS HERE]
27.4% Consumer Discretionary
25.2% Industrials
12.3% Cash Equivalents++
8.7% Materials
6.8% Telecommunication Services
5.7% Consumer Staples
5.4% Financials
4.0% Health Care
2.3% Utilities
1.2% Energy
1.0% Information Technology
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
CORPORATE BONDS (91.1%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (29.1%)
- ------------------------------------------------------------------------------
Albritton Communications
7.750%, 12/15/12 $ 80 $ 79
Allied Security Escrow
11.375%, 07/15/11 80 82
Amscan Holdings
8.750%, 05/01/14 95 92
Cablevision Systems (A)
8.000%, 04/15/12 75 77
Charter Communications (A)
8.000%, 04/30/12 75 75
Chattem
7.000%, 03/01/14 75 75
Echostar DBS (A)
6.625%, 10/01/14 75 72
H&E Equipment
11.125%, 06/15/12 85 96
HLI Operating (D)
10.500%, 06/15/10 25 23
Intrawest
7.500%, 10/15/13 75 75
Invista (A)
9.250%, 05/01/12 75 83
Jean Countu Group (A)(D)
8.500%, 08/01/14 95 92
K&F Acquisition (A)
7.750%, 11/15/14 80 78
LCE Aquisition (A)
9.000%, 08/01/14 90 90
MTR Gaming Group, Ser B
9.750%, 04/01/10 70 76
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Mediacom Broadband
11.000%, 07/15/13 $ 75 $ 80
Mother's Work
11.250%, 08/01/10 75 75
Norcraft
9.000%, 11/01/11 45 47
Propex Fabrics (A)
10.000%, 12/01/12 95 94
RH Donnelley (A)
6.875%, 01/15/13 95 94
Sonic Automotive, Ser B
8.625%, 08/15/13 80 80
Tenneco Automotive (A)(D)
8.625%, 11/15/14 100 97
Time Warner (D)
9.750%, 07/15/08 8 8
Town Sports International
9.625%, 04/15/11 10 11
United Rentals (D)
7.750%, 11/15/13 95 92
Universal City Florida (A)
8.375%, 05/01/10 80 82
Vertis, Ser B (D)
10.875%, 06/15/09 75 72
W.H. Holdings
9.500%, 04/01/11 6 6
Wynn Las Vegas (A)
6.625%, 12/01/14 75 71
------------
2,074
------------
CONSUMER STAPLES (6.0%)
- ------------------------------------------------------------------------------
American Achievement
8.250%, 04/01/12 75 78
American Seafood Group
10.125%, 04/15/10 85 92
Chiquita Brands International
7.500%, 11/01/14 75 75
General Nutrition Center (A)
8.625%, 01/15/11 25 23
Stater Brothers Holdings
8.125%, 06/15/12 85 82
United Agri Products (A)
8.250%, 12/15/11 77 80
------------
430
------------
ENERGY (1.3%)
- ------------------------------------------------------------------------------
Belden & Blake
8.750%, 07/15/12 95 94
------------
FINANCIALS (5.7%)
- ------------------------------------------------------------------------------
Bluewater Finance
10.250%, 02/15/12 75 81
Crystal US Holdings (A)
9.625%, 06/15/14 85 97
E*Trade Financial
8.000%, 06/15/11 80 83
24 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Chartwell High Yield Fund
March 31, 2005
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
LaBranche
11.000%, 05/15/12 $ 140 $ 148
------------
409
------------
HEALTH CARE (4.3%)
- ------------------------------------------------------------------------------
DaVita (A)
7.250%, 03/15/15 50 49
Iasis Healthcare
8.750%, 06/15/14 90 94
Norcross Safety Products, Ser B
9.875%, 08/15/11 80 85
VWR International
8.000%, 04/15/14 75 76
------------
304
------------
INDUSTRIALS (24.8%)
- ------------------------------------------------------------------------------
Aearo
8.250%, 04/15/12 20 21
Ainsworth Lumber (A)
7.250%, 10/01/12 85 83
Allied Waste North America, Ser B
8.500%, 12/01/08 80 82
Buhrmann US
8.250%, 07/01/14 90 93
CE Generation
7.416%, 12/15/18 97 103
Cenveo
9.625%, 03/15/12 75 80
Coinmach
9.000%, 02/01/10 112 114
Continental Airlines (D)
8.000%, 12/15/05 100 98
Danka Business Systems
11.000%, 06/15/10 25 24
Douglas Dynamics (A)
7.750%, 01/15/12 75 73
Gencorp
9.500%, 08/15/13 13 14
Geo Group
8.250%, 07/15/13 125 127
Goodman Global Holdings (A)
7.875%, 12/15/12 75 69
IMCO Recycling
10.375%, 10/15/10 100 111
Koppers Industries
9.875%, 10/15/13 75 84
Noble Group (A)
6.625%, 03/17/15 90 84
Ply Gem Industries
9.000%, 02/15/12 85 80
Rayovac
8.500%, 10/01/13 85 88
Sensus Metering Systems
8.625%, 12/15/13 80 82
Ship Finance International
8.500%, 12/15/13 100 99
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Tech Olympic USA
9.000%, 07/01/10 $ 75 $ 78
Williams Scotsman
9.875%, 06/01/07 85 85
------------
1,772
------------
INFORMATION TECHNOLOGY (1.1%)
- ------------------------------------------------------------------------------
FTD
7.750%, 02/15/14 75 77
------------
MATERIALS (9.2%)
- ------------------------------------------------------------------------------
Autocam
10.875%, 06/15/14 70 61
California Steel Industries
6.125%, 03/15/14 80 76
Euromax International
8.500%, 08/15/11 100 103
Kraton Polymers (A)
8.125%, 01/15/14 40 38
Nalco
8.875%, 11/15/13 95 101
Russel Metals
6.375%, 03/01/14 75 73
Ryerson Tull
8.250%, 12/15/11 20 19
Solo Cup
8.500%, 02/15/14 105 105
Wolverine Tube (D)
10.500%, 04/01/09 75 79
------------
655
------------
TELECOMMUNICATION SERVICES (7.2%)
- ------------------------------------------------------------------------------
Centennial Cellular
10.125%, 06/15/13 80 88
Cincinnati Bell (A)
8.375%, 01/15/14 80 79
Intelsat Bermuda(B)
7.805%, 01/15/12 95 96
Rogers Wireless
7.250%, 12/15/12 75 77
Superior Essex Communications
9.000%, 04/15/12 75 76
Ubiquitel Operating
9.875%, 03/01/11 50 55
Ubiquitel Operating (A)
9.875%, 03/01/11 40 44
------------
515
------------
UTILITIES (2.4%)
- ------------------------------------------------------------------------------
AES
9.500%, 06/01/09 95 104
Reliant Energy
6.750%, 12/15/14 75 70
------------
174
- ------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(COST $6,724) 6,504
==============================================================================
Constellation Funds 2005 Semiannual Report 25
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Chartwell High Yield Fund
March 31, 2005
FACE AMOUNT VALUE
(000)/SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK (1.9%)
==============================================================================
INDUSTRIALS (1.9%)
- ------------------------------------------------------------------------------
Coinmach Service 5,000 $ 66
Synagro Technologies 15,000 71
------------
137
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $141) 137
==============================================================================
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR
LOANED SECURITIES (8.3%)
- ------------------------------------------------------------------------------
BlackRock Institutional Money
Market Trust 591,310 591
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD AS
COLLATERAL FOR LOANED SECURITIES
(COST $591) 591
==============================================================================
REPURCHASE AGREEMENT (4.8%)
- ------------------------------------------------------------------------------
PNC Capital Markets 2.56%, dated
03/31/2005, to be repurchased
on 04/01/05, repurchase price
$341,024 (collateralized by a U.S.
Government obligation, 4.00%,
09/22/09, par value $341,000,
total market value $348,000)(C) $ 341 341
- ------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $341) 341
==============================================================================
CASH EQUIVALENTS (0.0%)
- ------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares 4 --
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $0) --
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS (106.1%)
(COST $7,797) 7,573
- ------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-6.1%)
- ------------------------------------------------------------------------------
Receivable due from Investment Adviser 3
Obligation to return securities lending collateral (591)
Payable due to income distribution (43)
Payable due to Capital Shares redeemed (1)
Payable due to Administrator (1)
Other assets and liabilities, net 195
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (438)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 7,135
==============================================================================
VALUE
(000)
- ------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 22,304
Accumulated net realized loss on investments (14,945)
Net unrealized depreciation on investments (224)
- ------------------------------------------------------------------------------
NET ASSETS $ 7,135
==============================================================================
- ------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE--CLASS I SHARES
($7,134,819/1,420,810 SHARES) $ 5.02
==============================================================================
(A) Security sold within the terms of a private placement memorandum, exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in the program or other
"accredited investors". Security is considered liquid. On March 31, 2005,
the value of these securities amounted to approximately $1,724,000,
representing 24.2% of the net assets of the Fund.
(B) Variable rate security - the rate reflected on the Statement of Net Assets
is the rate in effect on March 31, 2005.
(C) Tri-Party Repurchase Agreement
(D) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $575,703.
Ser - Series
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
26 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation HLAM Large Cap Quality Growth Fund
March 31, 2005
SECTOR WEIGHTINGS+
- -------------------------------------------------------------------------------
[CHART APPEARS HERE]
19.8% Health Care
19.7% Consumer Discretionary
17.0% Information Technology
16.1% Financials
14.2% Cash Equivalents++
8.1% Consumer Staples
2.6% Industrials
2.5% Telecommunication Services
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK (99.0%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (22.8%)
- ------------------------------------------------------------------------------
Comcast, Cl A* 18,485 $ 624
Harley-Davidson (A) 15,520 896
Home Depot 19,365 741
International Game Technology 15,420 411
Omnicom Group (A) 10,660 944
Viacom, Cl B 12,265 427
------------
4,043
------------
CONSUMER STAPLES (9.3%)
- ------------------------------------------------------------------------------
PepsiCo 13,755 729
Walgreen 21,025 934
------------
1,663
------------
FINANCIALS (18.6%)
- ------------------------------------------------------------------------------
American International Group 19,396 1,075
Freddie Mac 8,460 534
Morgan Stanley 15,230 872
Synovus Financial 29,650 826
------------
3,307
------------
HEALTH CARE (22.8%)
- ------------------------------------------------------------------------------
Allergan (A) 12,360 859
Amgen* 10,745 625
Cardinal Health 10,210 570
Johnson & Johnson 12,005 806
Pfizer 20,180 530
Waters* 18,545 664
------------
4,054
------------
INDUSTRIALS (3.0%)
- ------------------------------------------------------------------------------
Dover 13,950 527
------------
INFORMATION TECHNOLOGY (19.6%)
- ------------------------------------------------------------------------------
Applied Materials* 47,600 774
Automatic Data Processing 17,055 767
First Data 12,945 509
International Business Machines 4,290 392
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
Microsoft 26,320 $ 636
Texas Instruments 15,860 404
------------
3,482
------------
TELECOMMUNICATION SERVICES (2.9%)
- ------------------------------------------------------------------------------
Nokia ADR (A)* 33,360 515
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $11,528) 17,591
==============================================================================
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR
LOANED SECURITIES (15.2%)
- ------------------------------------------------------------------------------
BlackRock Institutional Money
Market Trust 2,693,060 2,693
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR LOANED
SECURITIES (COST $2,693) 2,693
==============================================================================
CASH EQUIVALENTS (1.3%)
- ------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares 224,562 225
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $225) 225
==============================================================================
TOTAL INVESTMENTS (115.5%)
(COST $14,446) 20,509
==============================================================================
OTHER ASSETS AND LIABILITIES (-15.5%)
- ------------------------------------------------------------------------------
Obligation to return securities lending collateral (2,693)
Payable for Capital Shares redeemed (33)
Payable due to Investment Adviser (7)
Payable due to Shareholder Servicing Agent (4)
Payable due to Administrator (2)
Other assets and liabilities, net (16)
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (2,755)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 17,754
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 9,855
Accumulated net investment loss (12)
Accumulated net realized gain on investments 1,848
Net unrealized appreciation on investments 6,063
- ------------------------------------------------------------------------------
NET ASSETS $ 17,754
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES
($17,753,986/867,587 SHARES) $ 20.46
==============================================================================
* Non-income producing security.
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $2,625,273.
ADR - American Depositary Receipt
Cl - Class
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 27
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation HLAM Large Cap Value Fund
March 31, 2005
SECTOR WEIGHTINGS+
- -------------------------------------------------------------------------------
[CHART APPEARS HERE]
26.2% Financials
24.5% Consumer Discretionary
14.3% Health Care
10.9% Cash Equivalents++
10.4% Information Technology
10.0% Consumer Staples
3.7% Industrials
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK+ (99.8%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (27.5%)
- ------------------------------------------------------------------------------
Comcast, Cl A* 2,265 $ 76
Gannett 465 37
Home Depot 2,360 90
Mattel 2,865 61
Nike, Cl B 435 36
Omnicom Group (A) 735 65
TJX 2,095 52
Walt Disney 2,255 65
------------
482
------------
CONSUMER STAPLES (11.2%)
- ------------------------------------------------------------------------------
CVS 1,335 70
Gillette 985 50
PepsiCo 1,425 76
------------
196
------------
FINANCIALS (29.3%)
- ------------------------------------------------------------------------------
American International Group 1,065 59
Berkshire Hathaway, Cl B* 43 123
Cincinnati Financial 2,000 87
Freddie Mac 900 57
Synovus Financial 2,200 61
US Bancorp 2,345 67
Washington Mutual 1,535 61
------------
515
------------
HEALTH CARE (16.0%)
- ------------------------------------------------------------------------------
Allergan (A) 400 28
Cardinal Health (A) 775 43
Johnson & Johnson 785 53
Pfizer 1,960 51
Waters* 1,695 61
Wyeth 1,080 46
------------
282
------------
INDUSTRIALS (4.2%)
- ------------------------------------------------------------------------------
Tyco International 2,165 73
------------
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
INFORMATION TECHNOLOGY (11.6%)
- ------------------------------------------------------------------------------
Automatic Data Processing 1,910 $ 86
Cisco Systems* 3,000 54
First Data (A) 1,640 64
------------
204
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $1,706) 1,752
==============================================================================
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR
LOANED SECURITIES (11.9%)
- ------------------------------------------------------------------------------
BlackRock Institutional Money
Market Trust 207,630 208
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR LOANED
SECURITIES (COST $208) 208
==============================================================================
CASH EQUIVALENTS (0.4%)
- ------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares 6,619 7
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $7) 7
==============================================================================
TOTAL INVESTMENTS (112.1%)
(COST $1,921) 1,967
==============================================================================
OTHER ASSETS AND LIABILITIES (-12.1%)
- ------------------------------------------------------------------------------
Receivable due from Investment Adviser 2
Obligation to return securities lending collateral (208)
Payable for income distribution (1)
Other assets and liabilities, net (5)
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (212)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 1,755
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 1,683
Accumulated net realized gain on investments 26
Net unrealized appreciation on investments 46
- ------------------------------------------------------------------------------
NET ASSETS $ 1,755
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES
($1,754,526/169,281 SHARES) $ 10.36
==============================================================================
* Non-income producing security.
+ Narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting.
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $200,564.
Cl - Class
The accompanying notes are an integral part of the financial statements.
28 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Diversified Value Fund
March 31, 2005
SECTOR WEIGHTINGS+
- -------------------------------------------------------------------------------
[CHART APPEARS HERE]
31.3% Financials
13.1% Energy
10.9% Consumer Discretionary
9.9% Industrials
6.5% Consumer Staples
6.1% Utilities
5.9% Information Technology
5.8% Cash Equivalents++
4.1% Telecommunication Services
2.8% Health Care
2.6% Materials
1.0% Exchange Traded Funds
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK+ (99.0%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (11.6%)
- ------------------------------------------------------------------------------
Best Buy 43,935 $ 2,373
Harrah's Entertainment (A) 43,000 2,777
Home Depot 85,880 3,284
Kohl's* 49,400 2,551
Viacom, Cl B 75,106 2,616
Walt Disney 184,800 5,309
------------
18,910
------------
CONSUMER STAPLES (7.0%)
- ------------------------------------------------------------------------------
Altria Group 102,320 6,691
Anheuser-Busch 48,355 2,291
Procter & Gamble (A) 43,960 2,330
------------
11,312
------------
ENERGY (13.9%)
- ------------------------------------------------------------------------------
Devon Energy 139,860 6,678
Exxon Mobil 193,200 11,515
National Oilwell Varco* 93,535 4,368
------------
22,561
------------
FINANCIALS (33.2%)
- ------------------------------------------------------------------------------
American International Group 45,960 2,547
Bear Stearns 47,881 4,783
Capital Automotive REIT 89,540 2,966
Capital One Financial 44,590 3,334
Citigroup 171,710 7,717
Everest Re Group 27,415 2,333
Fifth Third Bancorp 70,510 3,031
MBNA 190,555 4,678
North Fork Bancorporation 174,250 4,834
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
Radian Group 36,540 $ 1,744
State Street 68,300 2,986
TCF Financial (A) 84,600 2,297
Torchmark 46,591 2,432
iWashington Mutual 39,250 1,550
Wells Fargo 114,580 6,852
------------
54,084
------------
HEALTH CARE (2.9%)
- ------------------------------------------------------------------------------
Pfizer 88,430 2,323
UnitedHealth Group 25,640 2,446
------------
4,769
------------
INDUSTRIALS (10.5%)
- ------------------------------------------------------------------------------
3M 24,965 2,139
Avery Dennison 33,770 2,092
FedEx 24,940 2,343
General Dynamics 22,140 2,370
Rockwell Automation 100,315 5,682
United Technologies 24,670 2,508
------------
17,134
------------
INFORMATION TECHNOLOGY (6.3%)
- ------------------------------------------------------------------------------
Alliance Data Systems* 40,195 1,624
Dell* 74,415 2,859
Flextronics International* 131,255 1,580
Microsoft 103,925 2,512
Texas Instruments 66,020 1,683
------------
10,258
------------
MATERIALS (2.8%)
- ------------------------------------------------------------------------------
E.I. du Pont de Nemours 61,785 3,166
Weyerhaeuser 19,965 1,367
------------
4,533
------------
TELECOMMUNICATION SERVICES (4.3%)
- ------------------------------------------------------------------------------
Alltel (A) 51,376 2,818
Sprint 184,460 4,196
------------
7,014
------------
UTILITIES (6.5%)
- ------------------------------------------------------------------------------
Dominion Resources 36,460 2,714
Entergy 59,527 4,206
FPL Group 91,560 3,676
------------
10,596
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $137,404) 161,171
==============================================================================
EXCHANGE TRADED FUND (1.1%)
- ------------------------------------------------------------------------------
iShares Russell 1000 Value
Index Fund 25,815 1,699
- ------------------------------------------------------------------------------
TOTAL EXCHANGE TRADED FUND
(COST $1,579) 1,699
==============================================================================
Constellation Funds 2005 Semiannual Report 29
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Diversified Value Fund
March 31, 2005
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR LOANED
SECURITIES (6.1%)
- ------------------------------------------------------------------------------
BlackRock Institutional Money
Market Trust 9,846,832 $ 9,847
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR LOANED SECURITIES
(COST $9,847) 9,847
==============================================================================
CASH EQUIVALENTS (0.1%)
- ------------------------------------------------------------------------------
PNC Bank Money Market Fund 197,263 197
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $197) 197
==============================================================================
TOTAL INVESTMENTS (106.3%)
(COST $149,027) 172,914
==============================================================================
OTHER ASSETS AND LIABILITIES (-6.3%)
- ------------------------------------------------------------------------------
Obligation to return securities lending collateral (9,847)
Payable for income distribution (324)
Payable due to Capital Shares redeemed (84)
Payable due to Investment Adviser (83)
Payable due to Shareholder Servicing Agent (35)
Payable due to Administrator (21)
Other assets and liabilities, net 209
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (10,185)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 162,729
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value $ 133,660
Distributions in excess of net investment income (1)
Accumulated net realized gain on investments 5,183
Net unrealized appreciation on investments 23,887
- ------------------------------------------------------------------------------
NET ASSETS $ 162,729
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES
($162,728,753/13,464,424 SHARES) $ 12.09
==============================================================================
* Non-income producing security.
+ Narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting.
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $9,530,678.
Cl - Class
REIT - Real Estate Investment Trust
The accompanying notes are an integral part of the financial statements.
30 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Select Value Fund
March 31, 2005
SECTOR WEIGHTINGS+
- -------------------------------------------------------------------------------
[CHART APPEAR HERE]
32.3% Financials
13.1% Energy
11.8% Consumer Discretionary
9.5% Information Technology
8.3% Industrials
6.3% Consumer Staples
6.0% Utilities
4.9% Telecommunication Services
3.0% Health Care
2.8% Cash Equivalents++
1.7% Materials
0.3% Exchange Traded Funds
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK+ (99.7%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (12.2%)
- ------------------------------------------------------------------------------
Kohl's* 33,675 $ 1,739
Lowe's (A) 32,150 1,835
Walt Disney 150,180 4,315
------------
7,889
------------
CONSUMER STAPLES (6.5%)
- ------------------------------------------------------------------------------
Altria Group 47,745 3,122
Anheuser-Busch 22,850 1,083
------------
4,205
------------
ENERGY (13.5%)
- ------------------------------------------------------------------------------
Devon Energy 64,180 3,065
Exxon Mobil 58,560 3,490
National Oilwell Varco* 46,325 2,163
------------
8,718
------------
FINANCIALS (33.2%)
- ------------------------------------------------------------------------------
Capital One Financial 39,675 2,966
Citigroup 69,240 3,112
Everest Re Group 20,360 1,733
Fifth Third Bancorp 61,675 2,651
MBNA 138,240 3,394
North Fork Bancorporation 122,145 3,388
Radian Group 49,830 2,379
Wells Fargo 31,305 1,872
------------
21,495
------------
HEALTH CARE (3.1%)
- ------------------------------------------------------------------------------
Pfizer 76,815 2,018
------------
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
INDUSTRIALS (8.5%)
- ------------------------------------------------------------------------------
Avery Dennison 31,620 $ 1,958
FedEx 13,770 1,294
Rockwell Automation 39,600 2,243
------------
5,495
------------
INFORMATION TECHNOLOGY (9.8%)
- ------------------------------------------------------------------------------
Alliance Data Systems* 38,545 1,557
Applied Materials* 97,035 1,577
Dell* 46,550 1,788
Flextronics International* 117,650 1,417
------------
6,339
------------
MATERIALS (1.7%)
- ------------------------------------------------------------------------------
Weyerhaeuser 16,170 1,107
------------
TELECOMMUNICATION SERVICES (5.0%)
- ------------------------------------------------------------------------------
Sprint 143,085 3,255
------------
UTILITIES (6.2%)
- ------------------------------------------------------------------------------
FPLGroup 55,410 2,225
PG&E* 51,775 1,765
------------
3,990
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $58,012) 64,511
==============================================================================
EXCHANGE TRADED FUND (0.3%)
- ------------------------------------------------------------------------------
iShares Russell 1000 Value
Index Fund 3,020 199
- ------------------------------------------------------------------------------
TOTAL EXCHANGE TRADED FUND
(COST $181) 199
==============================================================================
SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR LOANED SECURITIES (2.9%)
- ------------------------------------------------------------------------------
BlackRock Institutional Money
Market Trust 1,896,850 1,897
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR LOANED SECURITIES
(COST $1,897) 1,897
==============================================================================
TOTAL INVESTMENTS (102.9%)
(COST $60,090) 66,607
==============================================================================
OTHER ASSETS AND LIABILITIES (-2.9%)
- ------------------------------------------------------------------------------
Obligation to return securities lending collateral (1,897)
Payable due to Custodian (85)
Payablefor income distribution (81)
Payable due to Investment Adviser (34)
Payable due to Capital Shares redeemed (15)
Payable due to Shareholder Servicing Agent (14)
Payable due to Administrator (8)
Other assets and liabilities, net 257
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (1,877)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 64,730
==============================================================================
Constellation Funds 2005 Semiannual Report 31
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Select Value Fund
March 31, 2005
VALUE
(000)
- ------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 54,223
Accumulated net realized gain on investments 3,990
Net unrealized appreciation on investments 6,517
- ------------------------------------------------------------------------------
NET ASSETS $ 64,730
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES
($64,729,512/5,756,118 SHARES) $ 11.25
==============================================================================
* Non-income producing security.
+ Narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting.
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $1,835,444.
The accompanying notes are an integral part of the financial statements.
32 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Diversified Growth Fund
March 31, 2005
SECTOR WEIGHTINGS+
- -------------------------------------------------------------------------------
[CHART APPEARS HERE]
22.6% Information Technology
20.8% Health Care
14.5% Cash Equivalents++
14.4% Consumer Discretionary
9.5% Consumer Staples
7.8% Financials
6.7% Industrials
1.5% Energy
1.0% Telecommunication Services
0.9% Materials
0.3% Exchange Traded Funds
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK+ (99.4%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (16.9%)
- ------------------------------------------------------------------------------
Aeropostale* 56,380 $ 1,847
Best Buy (A) 28,520 1,540
Callaway Golf 63,105 808
Dollar Tree Stores (A)* 43,952 1,263
eBay (A)* 45,644 1,701
Fortune Brands 28,970 2,336
Harrah's Entertainment (A) 24,545 1,585
Home Depot 71,705 2,742
Kohl's* 29,770 1,537
Starbucks* 20,411 1,054
Walt Disney 74,635 2,144
------------
18,557
------------
CONSUMER STAPLES (11.1%)
- ------------------------------------------------------------------------------
Altria Group 26,410 1,727
Anheuser-Busch 19,447 921
PepsiCo 64,845 3,439
Procter & Gamble (A) 58,235 3,086
Wal-Mart Stores 60,482 3,031
------------
12,204
------------
ENERGY (1.7%)
- ------------------------------------------------------------------------------
National Oilwell Varco* 40,580 1,895
------------
FINANCIALS (9.1%)
- ------------------------------------------------------------------------------
American International Group 37,600 2,084
Bear Stearns 11,850 1,184
Capital One Financial (A) 26,320 1,968
Everest Re Group 10,285 875
Fifth Third Bancorp 25,695 1,104
MBNA 114,201 2,804
------------
10,019
------------
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
HEALTH CARE (24.3%)
- ------------------------------------------------------------------------------
Amgen(A)* 39,492 $ 2,299
Cephalon (A)* 27,090 1,269
Eli Lilly 47,360 2,467
Health Management Associates,
Cl A(A) 51,648 1,352
Hospira* 43,605 1,407
Johnson & Johnson 95,056 6,384
Medtronic 74,677 3,805
Pfizer 197,131 5,179
WellPoint* 20,115 2,521
------------
26,683
------------
INDUSTRIALS (7.8%)
- ------------------------------------------------------------------------------
Avery Dennison 21,945 1,359
Cintas 23,045 952
FedEx 17,735 1,666
General Electric 1 --
L-3 Communications Holdings 21,610 1,535
Rockwell Automation 55,230 3,128
------------
8,640
------------
INFORMATION TECHNOLOGY (26.4%)
- ------------------------------------------------------------------------------
Alliance Data Systems* 39,505 1,596
Andrew* 78,950 925
Applied Materials* 113,415 1,843
Cisco Systems* 170,632 3,053
Citrix Systems (A)* 83,580 1,991
Dell* 70,629 2,714
Flextronics International* 88,735 1,068
Intel 119,293 2,771
Lexmark International, Cl A* 14,020 1,121
Microsoft 198,649 4,801
Paychex 67,065 2,201
Qualcomm 30,354 1,113
Texas Instruments 68,980 1,758
Veritas Software* 35,500 824
Xilinx 43,861 1,282
------------
29,061
------------
MATERIALS (1.0%)
- ------------------------------------------------------------------------------
Sealed Air* 21,270 1,105
------------
TELECOMMUNICATION SERVICES (1.1%)
- ------------------------------------------------------------------------------
Sprint (A) 54,160 1,232
------------
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $114,893) 109,396
==============================================================================
EXCHANGE TRADED FUND (0.3%)
- ------------------------------------------------------------------------------
iShares S&P MidCap 400/BARRA
Growth Index Fund 2,395 322
- ------------------------------------------------------------------------------
TOTAL EXCHANGE TRADED FUND
(COST $309) 322
==============================================================================
Constellation Funds 2005 Semiannual Report 33
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Diversified Growth Fund
March 31, 2005
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR
LOANED SECURITIES (16.9%)
- ------------------------------------------------------------------------------
BlackRock Institutional Money
Market Trust 18,541,479 $ 18,541
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR
LOANED SECURITIES
(COST $18,541) 18,541
==============================================================================
CASH EQUIVALENTS (0.1%)
- ------------------------------------------------------------------------------
PNC Bank Money Market Fund 75,453 75
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS (COST $75) 75
==============================================================================
TOTAL INVESTMENTS (116.7%)
(COST $133,818) 128,334
==============================================================================
OTHER ASSETS AND LIABILITIES (-16.7%)
- ------------------------------------------------------------------------------
Obligation to return securities lending collateral (18,541)
Payable for investment securities purchased (267)
Payable due to Investment Adviser (55)
Payable due to Shareholder Servicing Agent (24)
Payable due to Administrator (14)
Payable for Capital Shares redeemed (14)
Other assets and liabilities, net 594
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (18,321)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 110,013
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 186,134
Undistributed net investment income 42
Accumulated net realized loss on investments (70,679)
Net unrealized depreciation on investments (5,484)
- ------------------------------------------------------------------------------
NET ASSETS $ 110,013
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES
($110,013,011/19,613,903 SHARES) $ 5.61
==============================================================================
* Non-income producing security.
+ Narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting.
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $17,923,119.
Cl - Class
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
34 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Small Cap Fund
March 31, 2005
SECTOR WEIGHTINGS+
- -------------------------------------------------------------------------------
[CHART APPEARS HERE]
21.6% Financials
15.5% Information Technology
14.7% Health Care
13.0% Consumer Discretionary
10.4% Industrials
6.3% Cash Equivalents++
5.7% Materials
5.6% Energy
3.4% Consumer Staples
2.1% Utilities
1.5% Telecommunication Services
0.2% Exchange Traded Funds
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK (99.2%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (13.8%)
- ------------------------------------------------------------------------------
Advance Auto Parts* 30,834 $ 1,556
Aeropostale* 71,925 2,356
California Pizza Kitchen* 83,391 1,955
Callaway Golf (A) 144,490 1,849
Furniture Brands International (A) 27,964 610
Linens 'N Things* 49,793 1,236
Modine Manufacturing 30,190 885
Rent-Way* 196,811 1,614
Wolverine World Wide 55,300 1,185
------------
13,246
------------
CONSUMER STAPLES (3.6%)
- ------------------------------------------------------------------------------
Cott 55,132 1,336
Pantry* 61,179 1,895
Peet's Coffee & Tea* 9,601 236
------------
3,467
------------
ENERGY (5.9%)
- ------------------------------------------------------------------------------
Forest Oil* 83,849 3,396
W-H Energy Services* 94,151 2,253
------------
5,649
------------
FINANCIALS (22.9%)
- ------------------------------------------------------------------------------
American Equity Investment
Life Holding* 97,172 1,243
Capital Automotive REIT 97,621 3,233
Central Pacific Financial 64,172 2,159
Commercial Capital Bancorp 87,630 1,783
Euronet Worldwide* 50,462 1,441
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
Flagstar Bancorp 38,760 $ 758
Flushing Financial 105,128 1,913
IPC Holdings 32,636 1,282
Metris* 356,938 4,137
R&G Financial, Cl B (A) 46,205 1,440
SL Green Realty (A) 31,842 1,790
Trico Bancshares 37,396 784
------------
21,963
------------
HEALTH CARE (15.6%)
- ------------------------------------------------------------------------------
Connetics* 102,342 2,588
Diagnostic Products 27,602 1,333
LabOne* 77,687 2,679
Matria Healthcare* 139,095 4,272
Serologicals* 84,899 2,075
Wilson Greatbatch Technologies* 107,312 1,957
------------
14,904
------------
INDUSTRIALS (11.0%)
- ------------------------------------------------------------------------------
AMR (A)* 61,791 661
Applied Films* 59,727 1,381
Genesee & Wyoming, Cl A* 32,349 838
Layne Christensen* 45,661 789
Pacer International* 52,204 1,247
PLATO Learning* 262,756 2,049
Trex* 34,610 1,537
Unifirst Corp 25,140 1,003
URS* 36,448 1,048
------------
10,553
------------
INFORMATION TECHNOLOGY (16.5%)
- ------------------------------------------------------------------------------
Aeroflex* 250,813 2,340
Anteon International* 31,318 1,219
Belden CDT(A)* 109,680 2,436
Credence Systems* 98,437 779
Hyperion Solutions* 94,805 4,182
j2 Global Communications* 45,992 1,578
Kronos* 27,944 1,428
Micrel* 72,605 669
SBS Technologies* 47,958 535
Vishay Intertechnology* 51,252 637
------------
15,803
------------
MATERIALS (6.0%)
- ------------------------------------------------------------------------------
Crown Holdings* 168,156 2,616
Ferro 53,711 1,011
RPM International 116,226 2,125
------------
5,752
------------
TELECOMMUNICATION SERVICES (1.6%)
- ------------------------------------------------------------------------------
Airspan Networks* 150,392 769
US LEC, Cl A* 316,904 805
------------
1,574
------------
Constellation Funds 2005 Semiannual Report 35
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Small Cap Fund
March 31, 2005
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
UTILITIES (2.3%)
- ------------------------------------------------------------------------------
Idacorp 41,446 $ 1,176
New Jersey Resources 22,623 985
------------
2,161
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $76,814) 95,072
- ------------------------------------------------------------------------------
EXCHANGE TRADED FUND (0.2%)
- ------------------------------------------------------------------------------
iShares Russell 2000 Growth
Index Fund 3,463 217
- ------------------------------------------------------------------------------
TOTAL EXCHANGE TRADED FUND
(COST $215) 217
==============================================================================
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR LOANED
SECURITIES (5.9%)
- ------------------------------------------------------------------------------
BlackRock Institutional Money
Market Trust 5,631,332 5,631
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR
LOANED SECURITIES
(COST $5,631) 5,631
==============================================================================
CASH EQUIVALENTS (0.8%)
- ------------------------------------------------------------------------------
PNC Bank Money Market Fund 730,856 731
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $731) 731
==============================================================================
TOTAL INVESTMENTS (106.1%)
(COST $83,391) 101,651
==============================================================================
OTHER ASSETS AND LIABILITIES (-6.1%)
- ------------------------------------------------------------------------------
Obligation to return securities lending collateral (5,631)
Payable for Capital Shares redeemed (214)
Payable due to Investment Adviser (47)
Payable due to Shareholder Servicing Agent (21)
Payable due to Administrator (12)
Other assets and liabilities, net 58
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (5,867)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 95,784
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 76,050
Accumulated net investment loss (95)
Accumulated net realized gain on investments 1,569
Net unrealized appreciation on investments 18,260
- ------------------------------------------------------------------------------
NET ASSETS $ 95,784
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES
($95,784,483/6,029,214 SHARES) $ 15.89
==============================================================================
* Non-income producing security.
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $5,269,294.
Cl - Class
REIT - Real Estate Investment Trust
The accompanying notes are an integral part of the financial statements.
36 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Family Heritage(R) Fund
March 31, 2005
SECTOR WEIGHTINGS+
- -------------------------------------------------------------------------------
[CHART APPEARS HERE]
20.4% Financials
16.0% Information Technology
10.7% Health Care
10.3% Cash Equivalents++
9.7% Consumer Discretionary
8.6% Consumer Staples
8.2% Industrials
7.2% Energy
4.4% Materials
2.3% Utilities
2.2% Telecommunication Services
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK (99.1%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (10.7%)
- ------------------------------------------------------------------------------
Best Buy 14,714 $ 795
Carnival (A) 33,489 1,735
Comcast, Cl A* 48,333 1,633
International Speedway, Cl A 16,767 909
Marriott International, Cl A 10,328 690
Nike, Cl B 22,058 1,838
Viacom, Cl B 33,266 1,159
------------
8,759
------------
CONSUMER STAPLES (9.5%)
- ------------------------------------------------------------------------------
Estee Lauder, Cl A 19,415 873
JM Smucker 29,197 1,469
Lancaster Colony 20,814 886
Wal-Mart Stores 51,335 2,572
Wm. Wrigley Jr. 30,078 1,972
------------
7,772
------------
ENERGY (7.9%)
- ------------------------------------------------------------------------------
Apache 30,948 1,895
Chesapeake Energy 102,725 2,254
Devon Energy 49,274 2,353
------------
6,502
------------
FINANCIALS (22.5%)
- ------------------------------------------------------------------------------
Berkshire Hathaway, Cl B* 725 2,070
Capital One Financial 24,130 1,804
Commerce Bancshares (A) 34,998 1,687
Commercial Capital Bancorp 67,470 1,373
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
Federated Investors, Cl B 60,820 $ 1,722
Flagstar Bancorp 92,614 1,811
MBNA 99,715 2,448
Philadelphia Consolidated Holding* 9,614 745
Progressive 10,163 932
SL Green Realty 29,719 1,671
TCF Financial (A) 82,750 2,247
------------
18,510
------------
HEALTH CARE (11.8%)
- ------------------------------------------------------------------------------
Cephalon* 25,545 1,196
Eli Lilly 51,536 2,685
Hillenbrand Industries 11,095 616
Medicis Pharmaceutical, Cl A 47,698 1,430
Stryker 54,055 2,411
Universal Health Services, Cl B 25,918 1,358
------------
9,696
------------
INDUSTRIALS (9.1%)
- ------------------------------------------------------------------------------
Danaher 20,270 1,082
Fastenal 21,239 1,175
General Dynamics 13,795 1,477
Illinois Tool Works 16,740 1,499
Molex, Cl A 57,245 1,351
Werner Enterprises 46,018 894
------------
7,478
------------
INFORMATION TECHNOLOGY (17.7%)
- ------------------------------------------------------------------------------
Dell* 65,170 2,504
Fiserv (A)* 33,300 1,325
Marvell Technology Group (A)* 47,233 1,811
Microsoft 162,906 3,937
Paychex 49,788 1,634
Qualcomm 41,359 1,516
Vishay Intertechnology* 58,143 723
Yahoo!* 32,501 1,102
------------
14,552
------------
MATERIALS (4.9%)
- ------------------------------------------------------------------------------
E.I. du Pont de Nemours 50,861 2,606
Worthington Industries 74,088 1,428
------------
4,034
------------
TELECOMMUNICATION SERVICES (2.4%)
- ------------------------------------------------------------------------------
Telephone & Data Systems 12,963 1,058
Wireless Facilities* 143,575 897
------------
1,955
------------
UTILITIES (2.6%)
- ------------------------------------------------------------------------------
AES* 128,010 2,097
------------
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $68,726) 81,355
==============================================================================
Constellation Funds 2005 Semiannual Report 37
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Family Heritage(R) Fund
March 31, 2005
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR LOANED
SECURITIES (10.4%)
- ------------------------------------------------------------------------------
BlackRock Institutional Money
Market Trust 8,559,195 $ 8,559
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR LOANED
SECURITIES (COST $8,559) 8,559
==============================================================================
CASH EQUIVALENTS (1.0%)
- ------------------------------------------------------------------------------
PNC Bank Money Market Fund 791,874 792
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $792) 792
==============================================================================
TOTAL INVESTMENTS (110.5%)
(COST $78,077) 90,706
==============================================================================
OTHER ASSETS AND LIABILITIES (-10.5%)
- ------------------------------------------------------------------------------
Obligation to return securities lending collateral (8,559)
Payable due to Investment Adviser (53)
Payable for Capital Shares redeemed (24)
Payable due to Shareholder Servicing Agent (18)
Payable due to Administrator (10)
Other assets and liabilities, net 74
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (8,590)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 82,116
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 85,072
Undistributed net investment income 37
Accumulated net realized loss on investments (15,622)
Net unrealized appreciation on investments 12,629
- ------------------------------------------------------------------------------
NET ASSETS $ 82,116
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES
($82,115,889/8,509,177 SHARES) $ 9.65
==============================================================================
* Non-income producing security.
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $8,362,051.
Cl - Class
The accompanying notes are an integral part of the financial statements.
38 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Taxable Bond Fund
March 31, 2005
SECTOR WEIGHTINGS+
- -------------------------------------------------------------------------------
[CHART APPEARS HERE]
47.5% Corporate Bonds
23.9% U.S. Government Agency Obligations
14.7% U.S. Treasury Obligations
9.4% Cash Equivalents++
2.4% Asset-Backed Securities
1.2% U.S. Government Mortgage-Backed Obligations
0.9% Municipal Bonds
+Percentages based on total investments
++Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
CORPORATE BONDS (51.7%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (4.5%)
- ------------------------------------------------------------------------------
Harman International
7.320%, 07/01/07 $ 1,143 $ 1,205
May Department Stores
7.450%, 09/15/11 847 943
------------
2,148
------------
CONSUMER STAPLES (2.3%)
- ------------------------------------------------------------------------------
H.J. Heinz
6.000%, 03/15/08 1,045 1,088
------------
ENERGY (4.1%)
- ------------------------------------------------------------------------------
BP Capital Markets
2.625%, 03/15/07 1,000 976
Burlington Resources Finance
5.600%, 12/01/06 1,000 1,020
------------
1,996
------------
FINANCIALS (23.1%)
- ------------------------------------------------------------------------------
Bank of America
5.375%, 06/15/14 1,000 1,016
Block Financial
8.500%, 04/15/07 235 253
CIT Group
7.750%, 04/02/12 1,000 1,157
Colonial Realty
8.050%, 07/15/06 400 416
Ford Motor Credit
7.375%, 10/28/09 904 907
6.875%, 02/01/06 1,250 1,267
General Motors Acceptance (A)
6.750%, 12/01/14 1,000 864
HSBC Finance
4.750%, 05/15/09 1,000 1,001
Heller Financial
7.375%, 11/01/09 500 556
Kimco Realty, MTN, Ser B
7.900%, 12/07/07 450 491
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Lehman Brothers Holdings
7.000%, 02/01/08 $ 1,316 $ 1,404
Merrill Lynch
4.000%, 09/15/08 750 732
St Paul
8.125%, 04/15/10 904 1,029
------------
11,093
------------
HEALTH CARE (2.0%)
- ------------------------------------------------------------------------------
GlaxoSmithKline
4.375%, 04/15/14 1,000 953
------------
INDUSTRIALS (10.2%)
- ------------------------------------------------------------------------------
First Data
3.900%, 10/01/09 1,500 1,456
Honeywell International
7.500%, 03/01/10 1,052 1,181
Tyco International Group
7.000%, 06/15/28 2,000 2,270
------------
4,907
------------
SOVEREIGN BOND (1.1%)
- ------------------------------------------------------------------------------
Aid-Israel
5.500%, 04/26/24 500 528
------------
TELECOMMUNICATION SERVICES (2.3%)
- ------------------------------------------------------------------------------
Verizon Communications
7.510%, 04/01/09 1,000 1,097
------------
UTILITIES (2.1%)
- ------------------------------------------------------------------------------
Florida Power & Light
6.875%, 12/01/05 1,000 1,022
- ------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(COST $24,662) 24,832
==============================================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS (26.1%)
- ------------------------------------------------------------------------------
FHLB
3.785%, 12/28/06 1,000 997
FHLB, Ser TV06
4.875%, 11/15/06 1,500 1,523
FHLMC
6.250%, 03/05/12 1,500 1,543
5.200%, 03/05/19 1,000 987
5.125%, 11/07/13 1,000 999
4.250%, 05/04/09 1,000 990
FHLMC (A)
4.375%, 07/30/09 1,500 1,476
FNMA
8.200%, 03/10/16 1,000 1,273
5.000%, 01/15/07 500 509
4.010%, 10/21/09 1,000 981
TVA, Ser B
6.235%, 07/15/45 1,175 1,241
- ------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $12,245) 12,519
==============================================================================
Constellation Funds 2005 Semiannual Report 39
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Taxable Bond Fund
March 31, 2005
FACE AMOUNT VALUE
(000)/SHARES (000)
- ------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS (16.0%)
- ------------------------------------------------------------------------------
U.S. Treasury Bonds
8.750%, 05/15/17 $ 1,500 $ 2,061
7.875%, 02/15/21 615 821
7.625%, 11/15/22 913 1,209
7.500%, 11/15/16 830 1,041
U.S. Treasury Bonds (A)
8.125%, 08/15/19 1,500 2,018
5.375%, 02/15/31 500 545
- ------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $6,950) 7,695
==============================================================================
ASSET-BACKED SECURITY (2.6%)
- ------------------------------------------------------------------------------
Standard Credit Card Master Trust,
Ser 1994-2, Cl A
7.250%, 04/07/06 1,199 1,239
- ------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITY
(COST $1,217) 1,239
==============================================================================
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATION(1.3%)
- ------------------------------------------------------------------------------
FHLMC CMO/REMIC
Ser 2430, Cl QB
5.500%, 02/15/15 613 623
- ------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT
MORTGAGE-BACKED OBLIGATION
(COST $607) 623
==============================================================================
MUNICIPAL BOND (1.0%)
- ------------------------------------------------------------------------------
NEW YORK (1.0%)
- ------------------------------------------------------------------------------
Sales Tax Asset Receivable RB,
Ser B, FGIC
4.760%, 10/15/15 500 488
- ------------------------------------------------------------------------------
TOTAL MUNICIPAL BOND
(COST $500) 488
==============================================================================
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR
LOANED SECURITIES (10.0%)
==============================================================================
BlackRock Institutional Money
Market Trust 4,823,365 4,823
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR LOANED
SECURITIES (COST $4,823) 4,823
==============================================================================
CASH EQUIVALENTS (0.2%)
- ------------------------------------------------------------------------------
PNC Bank Money Market Fund 109,095 109
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $109) 109
==============================================================================
TOTAL INVESTMENTS (108.9%)
(COST $51,113) 52,328
==============================================================================
VALUE
(000)
- ------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-8.9%)
- ------------------------------------------------------------------------------
Obligation to return securities lending collateral $ (4,823)
Payable for income distribution (171)
Payable for Capital Shares redeemed (64)
Payable due to Investment Adviser (14)
Payable due to Shareholder Servicing Agent (10)
Payable due to Administrator (6)
Other assets and liabilities, net 805
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (4,283)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 48,045
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 47,363
Accumulated net realized loss on investments (533)
Net unrealized appreciation on investments 1,215
- ------------------------------------------------------------------------------
NET ASSETS $ 48,045
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES
($48,045,029/4,575,755 SHARES) $ 10.50
==============================================================================
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $4,746,275.
Cl - Class
CMO - Collateralized Mortgage Obligation
FGIC - Financial Guaranty Insurance Corporation
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
MTN - Medium Term Note
RB - Revenue Bond
REMIC - Real Estate Mortgage Investment Conduit
Ser - Series
TVA - Tennessee Valley Authority
The accompanying notes are an integral part of the financial statements.
40 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Tax-Exempt Bond Fund
March 31, 2005
SECTOR WEIGHTINGS+
- -------------------------------------------------------------------------------
[CHART APPEARS HERE]
13.7% General Obligations
12.8% Utilities
11.6% Medical
9.6% Higher Education
8.7% School District
8.0% Facilities
7.4% Transportation
6.8% Development
5.9% Power
4.9% General Revenue
3.0% Education
2.3% Water
1.8% Airport
1.5% Single-Family Housing
0.9% Pollution
0.9% Multi-Family Housing
0.2% Cash Equivalents
+ Percentages based on total investments
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
MUNICIPAL BONDS (98.9%)
- ------------------------------------------------------------------------------
ALABAMA (0.9%)
- ------------------------------------------------------------------------------
Bessemer RB, AMBAC,
Callable 02/01/10 @ 102
5.600%, 02/01/30 $ 1,000 $ 1,088
------------
ARIZONA (0.9%)
- ------------------------------------------------------------------------------
Arizona School Facilities Board COP,
MBIA, Pre-Refunded 03/01/13 @ 100
5.250%, 09/01/17 1,000 1,105
------------
CALIFORNIA (10.6%)
- ------------------------------------------------------------------------------
California State GO, AMBAC,
Callable 04/01/14 @ 100
5.000%, 04/01/31 3,000 3,090
California State GO, Callable
02/01/13 @ 100
5.250%, 02/01/33 1,840 1,911
Community College Finance Authority
RB, Mission Community College,
MBIA Callable 05/01/07 @ 102
5.500%, 05/01/17 1,000 1,071
Health Facilities Finance Authority RB,
St. Francis Memorial Hospital,
Ser C, ETM
5.875%, 11/01/23 2,000 2,400
San Jose, Liberty Parks and
Public Safety Projects GO,
Callable 09/01/12 @ 100
5.000%, 09/01/17 1,000 1,057
State Economic Recovery GO,
Ser A, Callable 07/01/11 @ 100
5.000%, 07/01/17 2,000 2,097
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Stockton Housing Facility RB,
O'Connor Woods Project, Ser A, ETM,
GNMA, Callable 05/06/05 @ 100
5.200%, 09/20/09 $ 675 $ 683
------------
12,309
------------
COLORADO (0.9%)
- ------------------------------------------------------------------------------
South Suburban Park & Recreation District
GO, AMBAC, Callable 09/15/10 @ 100
5.375%, 09/15/18 1,000 1,080
------------
CONNECTICUT (2.3%)
- ------------------------------------------------------------------------------
Connecticut State GO, Ser B, MBIA
5.000%, 12/01/10 2,500 2,700
------------
DELAWARE (0.9%)
- ------------------------------------------------------------------------------
Delaware State, Economic Development
Authority, Pollution Control RB,
Delmarva Power, AMBAC,
Callable 05/01/11 @ 100 (A)
4.900%, 05/01/26 1,000 1,059
------------
DISTRICT OF COLUMBIA (1.2%)
- ------------------------------------------------------------------------------
District of Columbia RB, Howard
University Project, MBIA
5.500%, 10/01/16 1,000 1,126
Washington D.C., Convention
Center Authority RB, Dedicated
Tax Revenue, Senior Lien,
AMBAC, Callable 10/01/08 @ 101
5.250%, 10/01/09 200 218
------------
1,344
------------
FLORIDA (1.2%)
- ------------------------------------------------------------------------------
Tampa Water & Sewer Revenue RB,
Pre-Refunded 10/01/09 @ 101
5.500%, 10/01/29 1,300 1,432
------------
GEORGIA (2.1%)
- ------------------------------------------------------------------------------
Henry County, Water & Sewer
Authority RB, AMBAC
6.150%, 02/01/20 2,000 2,429
------------
HAWAII (4.0%)
- ------------------------------------------------------------------------------
Honolulu, City & County GO, Ser B, ETM
8.000%, 10/01/10 1,680 2,065
University of Hawaii RB, Ser A,
FGIC, Callable 07/15/12 @ 100
5.500%, 07/15/21 2,385 2,606
------------
4,671
------------
ILLINOIS (10.1%)
- ------------------------------------------------------------------------------
Chicago GO, FGIC,
Callable 01/01/08 @ 102
5.500%, 01/01/21 1,500 1,616
Constellation Funds 2005 Semiannual Report 41
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Tax-Exempt Bond Fund
March 31, 2005
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Chicago, Park District GO, Aquarium
& Museum Project, FGIC,
Callable 01/01/08 @ 100
5.500%, 01/01/10 $ 1,000 $ 1,058
Development Finance Authority RB,
Elgin School District Project, FSA(B)
4.300%, 01/01/18 2,350 1,281
Health Facilities Authority RB,
Hospital Sisters Services Project, Ser A,
MBIA, Callable 06/01/08 @ 101
5.250%, 06/01/12 1,000 1,064
Metropolitan Pier & Exposition
Authority RB, Illinois Dedicated
State Tax Revenue, AMBAC,
Callable 06/01/07 @ 101
5.125%, 06/01/13 1,200 1,261
Metropolitan Pier & Exposition
Authority RB, Illinois Dedicated
State Tax Revenue, Ser A, FGIC
5.500%, 12/15/23 500 570
Metropolitan Pier & Exposition
Authority RB, Illinois Dedicated
State Tax Revenue, Ser A, FGIC, ETM
5.500%, 12/15/23 500 576
Regional Transportation Authority
GO, FSA
5.750%, 06/01/23 1,500 1,751
Southern Illinois University RB,
Medical Facilities System Project,
MBIA, Callable 04/01/07 @ 102
5.875%, 04/01/23 1,000 1,072
Will County, Community School
District GO, FSA(B)
5.230%, 11/01/12 2,000 1,452
------------
11,701
------------
INDIANA (2.0%)
- ------------------------------------------------------------------------------
Indianapolis, Public Improvement
Authority RB, Ser A,
Callable 01/01/10 @ 101
6.000%, 01/01/25 1,000 1,107
Transportation Finance Authority
RB, Ser A, MBIA
6.800%, 12/01/16 1,000 1,200
------------
2,307
------------
KENTUCKY (1.0%)
- ------------------------------------------------------------------------------
State Property & Buildings
Commission RB, Project Number 67,
Pre-Refunded 09/01/10 @ 100
5.625%, 09/01/13 1,050 1,168
------------
LOUISIANA (2.0%)
- ------------------------------------------------------------------------------
Public Facilities Authority RB,
Franciscan Missionaries Project,
Ser A, FSA
5.500%, 07/01/11 2,115 2,328
------------
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
MASSACHUSETTS (2.9%)
- ------------------------------------------------------------------------------
State Housing Finance Agency RB,
Ser B, MBIA,
Callable 06/01/08 @ 101
5.300%, 12/01/17 $ 1,000 $ 1,029
State Special Obligation RB,
Consolidated Loan, Ser A,
Callable 06/01/08 @ 101
5.000%, 06/01/15 70 73
State Special Obligation RB,
Consolidated Loan, Ser A,
Pre-Refunded 06/01/08 @ 101
5.000%, 06/01/15 930 994
State Water Resources Authority RB,
Ser D, MBIA, GOA
6.000%, 08/01/14 1,060 1,234
------------
3,330
------------
MICHIGAN (0.9%)
- ------------------------------------------------------------------------------
State Building Authority RB,
Facilities Program, Ser II, MBIA,
Callable 10/15/13 @ 100
5.000%, 10/15/23 1,000 1,048
------------
MISSISSIPPI (0.9%)
- ------------------------------------------------------------------------------
Developing Bank RB,
Capital Project & Equipment
Acquisition, Ser A2, AMBAC
5.000%, 07/01/24 1,000 1,080
------------
NEVADA (4.1%)
- ------------------------------------------------------------------------------
Clark County, Industrial Development,
Nevada Power Authority RB,
AMBAC, Callable 05/06/05 @ 100
7.200%, 10/01/22 2,000 2,017
Las Vegas, New Convention &
Visitors Center RB, AMBAC,
Callable 07/01/09 @ 101
6.000%, 07/01/13 2,500 2,798
------------
4,815
------------
NEW JERSEY (2.2%)
- ------------------------------------------------------------------------------
State GO, Ser D
6.000%, 02/15/11 150 169
State, Educational Facilities
Authority RB, Princeton University,
Callable 07/01/13 @ 100
5.000%, 07/01/15 2,000 2,157
State, Transportation System RB, Ser A
5.625%, 06/15/14 250 280
------------
2,606
------------
NEW MEXICO (1.6%)
- ------------------------------------------------------------------------------
Santa Fe County RB, Correctional
Facilities Project, FSA
6.000%, 02/01/27 1,500 1,803
------------
42 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Tax-Exempt Bond Fund
March 31, 2005
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
NEW YORK (4.8%)
- ------------------------------------------------------------------------------
New York City, Municipal Water &
Sewer Authority RB, Ser A,
Pre-Refunded 06/15/05 @ 101
6.000%, 06/15/25 $ 190 $ 193
New York City, Transitional Finance
Authority RB, Ser A, Callable
11/01/11 @ 100 (A)
5.500%, 11/01/26 2,000 2,186
New York State Thruway Authority RB,
Highway and Bridge Project,
Callable 04/01/12 @ 100
5.500%, 04/01/15 2,000 2,180
New York State, Mortgage Agency RB,
Homeowner Mortgage, Ser 80,
Callable 03/01/09 @ 101
5.100%, 10/01/17 1,000 1,015
------------
5,574
------------
NORTH CAROLINA (4.0%)
- ------------------------------------------------------------------------------
North Carolina State, Eastern
Municipal Power Authority RB,
Ser B, AMBAC,
Callable 01/01/06 @ 102
5.125%, 01/01/12 2,000 2,074
North Carolina State, Eastern Municipal
Power Authority RB, Ser B, MBIA,
Callable 01/01/07 @ 102
5.800%, 01/01/16 1,000 1,066
University of North Carolina
Wilmington, RB, AMBAC,
Callable 01/01/13 @ 100
5.250%, 01/01/21 1,380 1,489
------------
4,629
------------
OKLAHOMA (3.6%)
- ------------------------------------------------------------------------------
Oklahoma City, Water Utilities
Authority RB, Ser A,
Callable 07/01/09 @ 100
5.000%, 07/01/24 2,000 2,070
Oklahoma State, Health Systems
Industries Authority RB, Integris
Baptist Project, Ser D, AMBAC,
Callable 08/15/06 @ 102
5.000%, 08/15/14 2,000 2,079
------------
4,149
------------
PENNSYLVANIA (16.3%)
- ------------------------------------------------------------------------------
Allegheny County, Pittsburgh
International Airport RB, Ser B,
MBIA, Callable 01/01/08 @ 101
5.000%, 01/01/17 2,000 2,067
Derry Township, Industrial & Commercial
Development RB, Arena Project, Ser A
(LOC: PNC Bank) (A)
5.375%, 11/01/30 1,700 1,719
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Downingtown Area School District
GO, FSA, Callable 04/01/11 @ 100
5.250%, 04/01/14 $ 1,500 $ 1,630
Montgomery County Higher Education
& Health Authority RB, Pottstown
Healthcare, Callable 01/1/09 @ 101
5.000%, 01/01/27 2,000 2,150
Norwin Penn School District GO, FGIC,
Pre-Refunded 04/01/10 @ 100
6.000%, 04/01/24 2,000 2,235
Pennsbury Penn School District GO,
FSA, Callable 08/01/14 @ 100
5.000%, 08/01/25 2,000 2,088
Pennsylvania State, Higher
Educational Facilities Authority
RB, Saint Joseph's University,
Callable 05/01/06 @ 100
(LOC: Allied Irish Bank PLC) (A)
5.000%, 05/01/11 1,500 1,534
Philadelphia, Authority for Industrial
Development Lease Revenue RB,
Ser B, FSA, Callable 10/01/11 @ 101
5.500%, 10/01/12 1,500 1,669
Philadelphia, Hospital & Higher
Education Authority RB, Presbyterian
Medical Center Project, ETM
6.500%, 12/01/11 1,300 1,448
Philadelphia, Water & Waste
Water RB, FGIC
10.000%, 06/15/05 700 710
Philadelphia, Water & Waste
Water RB, MBIA
6.250%, 08/01/09 525 587
State Public School Building
Authority RB, Harrisburg Area
Community College Project, AMBAC,
Callable 04/01/14 @ 100
5.250%, 04/01/24 1,000 1,071
------------
18,908
------------
PUERTO RICO (0.4%)
- ------------------------------------------------------------------------------
Puerto Rico Electric Power Authority
RB, Ser RR, CIFG,
Callable 07/01/15 @ 100
5.000%, 07/01/29 500 520
------------
RHODE ISLAND (1.1%)
- ------------------------------------------------------------------------------
Rhode Island State, Depositors
Economic Protection Authority RB,
Special Obligation, Ser A, ETM
6.375%, 08/01/22 1,000 1,257
------------
SOUTH CAROLINA (3.4%)
- ------------------------------------------------------------------------------
Darlington County, Water & Sewer
Authority RB, AMBAC,
Callable 12/01/12 @ 101
5.625%, 12/01/23 2,530 2,793
Constellation Funds 2005 Semiannual Report 43
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Pitcairn Tax-Exempt Bond Fund
March 31, 2005
FACE AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------------
Piedmont, Municipal Power Agency
Authority RB, South Carolina Electric
Project, MBIA, ETM
6.250%, 01/01/09 $ 1,000 $ 1,110
------------
3,903
------------
TEXAS (9.8%)
- ------------------------------------------------------------------------------
Duncanville Independent School
District, GO, PSF-GTD,
Callable 02/15/13 @ 100
5.650%, 02/15/28 1,350 1,466
Fort Worth Water & Sewer RB,
Callable 02/15/12 @ 100
5.625%, 02/15/15 1,000 1,123
Fort Worth Water & Sewer RB,
Callable 08/15/10 @ 100
5.750%, 02/15/14 2,000 2,208
Harris County, Healthcare Facilities
Development Authority RB,
Christus Health Project, Ser A,
MBIA, Callable 07/01/09 @ 101
5.375%, 07/01/24 1,850 1,937
Houston, Water & Sewer Systems
Authority RB, Junior Lien, Ser C,
FGIC, Pre-Refunded 12/01/07 @ 101
5.375%, 12/01/27 1,140 1,222
North Texas Thruway RB, Ser A,
FSA, Callable 1/1/15 @ 100
5.000%, 01/01/40 2,000 2,035
San Antonio GO, ETM
5.000%, 08/01/07 15 16
Texas Water Development Board RB,
Revolving Fund, Senior Lien, Ser B,
Callable 01/15/10 @ 100
5.500%, 07/15/15 1,250 1,350
------------
11,357
------------
WASHINGTON (2.8%)
- ------------------------------------------------------------------------------
Central Puget Sound, Regional
Transportation Authority RB,
Sales Tax & Motor Project, FGIC
5.250%, 02/01/21 1,000 1,109
Clark County, School District
No. 177 GO, AMBAC
5.250%, 12/01/14 1,000 1,104
Washington State GO, Ser A, FSA
5.000%, 07/01/20 1,000 1,053
------------
3,266
- ------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(COST $109,029) 114,966
==============================================================================
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
CASH EQUIVALENTS (0.2%)
- ------------------------------------------------------------------------------
ABN Amro Tax Exempt Money
Market Fund 228,503 $ 229
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $229) 229
==============================================================================
TOTAL INVESTMENTS (99.1%)
(COST $109,258) 115,195
==============================================================================
OTHER ASSETS AND LIABILITIES (0.9%)
- ------------------------------------------------------------------------------
Receivable due from Shareholder Servicing Agent 25
Payable for investment securities purchased (2,747)
Payable for income distribution (382)
Payable due to Investment Adviser (18)
Payable due to Administrator (15)
Other assets and liabilities, net 4,150
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES 1,013
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 116,208
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 109,535
Undistributed net investment income 105
Accumulated net realized gain on investments 631
Net unrealized appreciation on investments 5,937
- ------------------------------------------------------------------------------
NET ASSETS $ 116,208
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES
($116,208,358/10,998,595 SHARES) $ 10.57
==============================================================================
(A) Variable rate security - the rate reflected on the Statement of Net Assets
is the rate in effect on March 31, 2005.
(B) Zero coupon security - the rate reflected on the Statement of Net Assets is
the effective yield at time of purchase.
AMBAC - American Municipal Bond Assurance Corporation
CIFG - CDC IXIS Financial Guaranty
COP - Certificate of Participation
ETM - Escrowed to Maturity
FGIC - Financial Guaranty Insurance Corporation
FSA - Financial Security Assurance
GNMA - Government National Mortgage Association
GO - General Obligation
GOA - General Obligation of Authority
LOC - Letter of Credit
MBIA - Municipal Bond Insurance Association
PLC - Public Liability Company
PSF-GTD - Permanent School Fund - Guaranteed
RB - Revenue Bond
Ser - Series
The accompanying notes are an integral part of the financial statements.
44 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Sands Capital Select Growth Fund
March 31, 2005
SECTOR WEIGHTINGS+
- -------------------------------------------------------------------------------
[CHART APPEARS HERE]
24.9% Health Care
22.3% Cash Equivalents++
19.6% Consumer Discretionary
17.4% Information Technology
6.6% Financials
5.5% Industrials
3.7% Consumer Staples
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK+ (97.1%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (24.5%)
- ------------------------------------------------------------------------------
Bed Bath & Beyond* 92,815 $ 3,392
eBay* 300,759 11,206
Kohl's* 75,716 3,909
Lowe's (A) 119,883 6,844
Starbucks* 187,551 9,689
------------
35,040
------------
CONSUMER STAPLES (4.7%)
- ------------------------------------------------------------------------------
Wal-Mart Stores 53,037 2,658
Walgreen 90,803 4,033
------------
6,691
------------
FINANCIALS (8.3%)
- ------------------------------------------------------------------------------
Capital One Financial (A) 106,441 7,959
Moody's 48,100 3,889
------------
11,848
------------
HEALTH CARE (31.1%)
- ------------------------------------------------------------------------------
Allergan (A) 61,176 4,250
Amgen (A)* 73,338 4,269
Genentech (A)* 163,684 9,266
Genzyme* 82,848 4,742
Medtronic 107,355 5,470
Patterson* 60,170 3,006
Stryker (A) 86,780 3,871
Teva Pharmaceutical Industries ADR* 205,109 6,358
Zimmer Holdings (A)* 42,339 3,294
------------
44,526
------------
INDUSTRIALS (6.8%)
- ------------------------------------------------------------------------------
Apollo Group, Cl A* 132,136 9,786
------------
INFORMATION TECHNOLOGY (21.7%)
- ------------------------------------------------------------------------------
Cisco Systems* 300,210 5,371
Dell* 213,704 8,210
Google, Cl A* 35,664 6,438
Microsoft 149,968 3,625
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
Qualcomm 155,088 $ 5,684
Red Hat* 161,124 1,758
------------
31,086
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $129,570) 138,977
==============================================================================
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR LOANED
SECURITIES (25.4%)
==============================================================================
BlackRock Institutional Money
Market Trust 36,388,223 36,388
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR
LOANED SECURITIES
(COST $36,388) 36,388
==============================================================================
CASH EQUIVALENTS (2.4%)
- ------------------------------------------------------------------------------
PNC Bank Money Market Fund 3,382,612 3,383
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $3,383) 3,383
==============================================================================
TOTAL INVESTMENTS (124.9%)
(COST $169,341) 178,748
==============================================================================
OTHER ASSETS AND LIABILITIES (-24.9%)
- ------------------------------------------------------------------------------
Obligation to return securities lending collateral (36,388)
Payable due to Investment Adviser (101)
Payable due to Administrator (19)
Payable due to Shareholder Servicing Agent (19)
Other assets and liabilities, net 875
- ------------------------------------------------------------------------------
Total Other assets and liabilities (35,652)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 143,096
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 160,986
Accumulated net investment loss (274)
Accumulated net realized loss on investments (27,023)
Net unrealized appreciation on investments 9,407
- ------------------------------------------------------------------------------
NET ASSETS $ 143,096
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES
($59,323,476/8,603,955 SHARES) $ 6.89
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES
($83,772,217/12,162,847 SHARES) $ 6.89
==============================================================================
* Non-income producing security.
+ Narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting.
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $34,852,601.
ADR - American Depositary Receipt
Cl - Class
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 45
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation TIP Small Cap Value Opportunities Fund
March 31, 2005
SECTOR WEIGHTINGS+
- -------------------------------------------------------------------------------
[CHARTS APPEAR HERE]
26.1% Financials
20.5% Industrials
11.9% Consumer Discretionary
7.9% Health Care
7.0% Telecommunication Services
6.9% Information Technology
5.9% Energy
5.8% Cash Equivalents++
4.4% Materials
2.5% Utilities
1.1% Consumer Staples
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK+ (99.8%)
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (12.6%)
- ------------------------------------------------------------------------------
4Kids Entertainment* 10,870 $ 240
Carmike Cinemas 8,970 334
Children's Place* 6,610 316
CSK Auto* 14,320 253
Domino's Pizza* 8,020 150
Gaylord Entertainment* 6,610 267
Genesco* 12,640 359
Keystone Automotive Industries* 14,570 338
Men's Wearhouse (A)* 7,750 327
Playboy Enterprises, Cl B* 13,890 179
Rush Enterprises, Cl B* 25,740 434
Steinway Musical Instruments* 16,910 507
------------
3,704
------------
CONSUMER STAPLES (1.1%)
- ------------------------------------------------------------------------------
Ralcorp Holdings 7,020 332
------------
ENERGY (6.2%)
- ------------------------------------------------------------------------------
Atwood Oceanics* 4,520 301
Cal Dive International* 7,000 317
Cimarex Energy (A)* 7,580 296
Comstock Resources* 6,380 183
Lone Star Technologies* 10,550 416
Willbros Group* 15,460 312
------------
1,825
------------
FINANCIALS (27.7%)
- ------------------------------------------------------------------------------
Alexandria Real Estate Equities 4,720 304
Allmerica Financial* 9,400 338
American Equity Investment
Life Holding* 12,190 156
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
Apollo Investment 19,980 $ 335
Archipelago Holdings* 16,570 293
BankAtlantic Bancorp, Cl A 21,990 383
BioMed Realty Trust* 14,980 309
Capital Automotive REIT 12,730 422
Commercial Capital Bancorp 14,870 303
First Republic Bank 12,405 401
Gold Banc 25,940 364
Hanmi Financial 16,980 281
Heritage Commerce* 20,040 369
Instinet Group* 52,170 307
Kilroy Realty 8,790 360
Knight Trading Group, Cl A* 24,530 236
Maguire Properties 7,840 187
Ohio Casualty* 16,390 377
Platinum Underwriters Holdings 11,030 328
Provident Bancorp 23,840 292
Provident Bankshares 9,710 320
Reckson Associates Realty 10,550 324
SL Green Realty 5,310 298
Sterling Financial* 6,596 235
United America Indemnity, Cl A* 17,700 333
Virginia Commerce Bancorp* 10,480 283
------------
8,138
------------
HEALTH CARE (8.4%)
- ------------------------------------------------------------------------------
Analogic 7,510 325
Apria Healthcare Group* 9,740 313
Genesis HealthCare (A)* 4,960 213
Gentiva Health Services* 20,350 329
Kindred Healthcare* 9,940 349
Option Care 8,585 177
Par Pharmaceutical* 6,730 225
Prestige Brands Holdings* 13,500 238
West Pharmaceutical Services 11,980 286
------------
2,455
------------
INDUSTRIALS (21.7%)
- ------------------------------------------------------------------------------
Adesa* 18,020 421
Amerco* 3,350 155
Brink's 8,825 305
Curtiss-Wright 4,090 233
ElkCorp 8,160 314
General Maritime* 4,900 237
GenTek* 6,550 108
Jarden* 6,480 297
Kennametal 6,120 291
Laidlaw International* 26,890 559
McDermott International* 23,610 447
Measurement Specialties* 12,150 280
OMI 12,450 238
Standard Parking* 9,650 152
Team* 8,850 177
TeleTech Holdings* 29,170 377
Timken 12,150 332
46 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation TIP Small Cap Value Opportunities Fund
March 31, 2005
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
Titan* 24,940 $ 453
Washington Group International* 11,060 498
Watts Water Technologies, Cl A 6,950 227
WCI Communities* 9,330 281
------------
6,382
------------
INFORMATION TECHNOLOGY (7.3%)
- ------------------------------------------------------------------------------
eFunds* 15,400 344
Inforte* 25,880 140
Intergraph (A)* 8,875 256
Lipman Electronic Engineering 15,150 435
NAM TAI Electronics 21,840 581
Sonic Solutions* 10,870 163
SonicWALL* 43,460 221
------------
2,140
------------
MATERIALS (4.7%)
- ------------------------------------------------------------------------------
Cleveland-Cliffs 5,510 402
FMC* 5,910 316
Foundation Coal Holdings* 13,520 318
Metals USA* 16,760 328
------------
1,364
------------
TELECOMMUNICATION SERVICES (7.5%)
- ------------------------------------------------------------------------------
Alamosa Holdings* 30,220 353
Leap Wireless International* 15,420 402
SBA Communications, Cl A* 54,110 496
Spectrasite* 5,910 342
US Unwired* 144,600 607
------------
2,200
------------
UTILITIES (2.6%)
- ------------------------------------------------------------------------------
AGL Resources 9,450 330
Southern Union* 17,573 441
------------
771
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $26,915) 29,311
==============================================================================
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR
LOANED SECURITIES (3.8%)
- ------------------------------------------------------------------------------
BlackRock Institutional Money
Market Trust 1,120,940 1,121
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR LOANED
SECURITIES (COST $1,121) 1,121
==============================================================================
CASH EQUIVALENTS (2.3%)
- ------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares 682,888 683
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $683) 683
==============================================================================
TOTAL INVESTMENTS (105.9%)
(COST $28,719) 31,115
==============================================================================
VALUE
(000)
- ------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-5.9%)
- ------------------------------------------------------------------------------
Obligation to return securities lending collateral $ (1,121)
Payable for investment securities purchased (829)
Payable for Capital Shares redeemed (87)
Payable due to Investment Adviser (11)
Payable due to Shareholder Servicing Agent (6)
Payable due to Administrator (4)
Other assets and liabilities, net 337
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (1,721)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 29,394
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 26,239
Undistributed net investment income 150
Accumulated net realized gain on investments 609
Net unrealized appreciation on investments 2,396
- ------------------------------------------------------------------------------
NET ASSETS $ 29,394
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES
($29,394,084/1,810,674 SHARES) $ 16.23
==============================================================================
* Non-income producing security.
+ Narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting.
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $1,091,171.
Cl - Class
REIT - Real Estate Investment Trust
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 47
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation TIP Financial Services Fund
March 31, 2005
SECTOR WEIGHTINGS+
- -------------------------------------------------------------------------------
[CHART APPEARS HERE]
80.0% Financials
14.9% Information Technology
5.1% Cash Equivalents++
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK+ (98.5%)
- ------------------------------------------------------------------------------
FINANCIALS (83.1%)
- ------------------------------------------------------------------------------
Affiliated Managers Group* 2,550 $ 158
Allstate 4,770 258
American Express 13,200 678
Aspen Insurance Holdings 6,640 167
Bank of America 16,100 710
CapitalSource* 14,370 331
Charles Schwab 34,020 358
Citigroup 16,940 761
City National 4,770 333
CoBiz 11,860 230
Community Bancorp* 12,170 307
East-West Bancorp 9,160 338
Fidelity Bankshares 9,030 208
Fidelity National Financial 8,600 283
Fifth Third Bancorp 6,860 295
GB&T Bancshares 9,650 209
Golden West Financial 6,730 407
Goldman Sachs Group (A) 3,900 429
International Securities Exchange* 13,000 338
Investment Technology Group* 18,180 318
Jackson Hewitt Tax Service* 13,790 288
MBNA 8,680 213
Merrill Lynch 9,290 526
Morgan Stanley 13,530 775
Northern Trust 14,570 633
Preferred Bank* 8,000 319
Principal Financial Group 6,190 238
Prudential Financial 6,650 382
Silicon Valley Bancshares* 14,720 649
Sovereign Bancorp 23,410 519
Sunstone Hotel Investors 17,480 375
Texas Regional Bancshares, Cl A 5,430 163
UCBH Holdings 8,850 353
Wells Fargo 5,105 305
Zions Bancorporation 5,130 354
------------
13,208
------------
INFORMATION TECHNOLOGY (15.4%)
- ------------------------------------------------------------------------------
Alliance Data Systems* 8,210 332
Automatic Data Processing 5,640 254
Certegy 7,260 251
Checkfree* 6,580 268
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
First Data 8,890 $ 349
Global Payments 5,840 377
Open Solutions* 12,370 245
Paychex 11,480 377
------------
2,453
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $13,523) 15,661
==============================================================================
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR
LOANED SECURITIES (2.7%)
- ------------------------------------------------------------------------------
Black Rock Institutional Money
Market Trust 436,800 437
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR LOANED
SECURITIES (COST $437) 437
==============================================================================
CASH EQUIVALENTS (2.6%)
- ------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares 414,204 414
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $414) 414
==============================================================================
TOTAL INVESTMENTS (103.8%)
(COST $14,374) 16,512
==============================================================================
OTHER ASSETS AND LIABILITIES (-3.8%)
- ------------------------------------------------------------------------------
Obligation to return securities lending collateral (437)
Payable for investment securities purchased (163)
Payable due to Investment Adviser (12)
Payable due to Administrator (2)
Other assets and liabilities, net 11
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (603)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 15,909
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 12,624
Undistributed net investment income 85
Accumulated net realized gain on investments 1,062
Net unrealized appreciation on investments 2,138
- ------------------------------------------------------------------------------
NET ASSETS $ 15,909
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES
($15,909,000/1,118,465 SHARES) $ 14.22
==============================================================================
* Non-income producing security.
+ Narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting.
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $428,961.
Cl - Class
The accompanying notes are an integral part of the financial statements.
48 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation TIP Healthcare & Biotechnology Fund
March 31, 2005
SECTOR WEIGHTINGS+
- -------------------------------------------------------------------------------
[CHART APPEARS HERE]
78.3% Health Care
20.5% Cash Equivalents++
1.2% Financials
+ Percentages based on total investments
++ Cash equivalents include a short-term investment held as collateral for
loaned securities (see Note 9 in the Notes to Financial Statements).
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
COMMON STOCK+ (92.1%)
- ------------------------------------------------------------------------------
FINANCIALS (1.4%)
- ------------------------------------------------------------------------------
Ventas 23,220 $ 579
------------
HEALTH CARE (90.7%)
- ------------------------------------------------------------------------------
Advanced Medical Optics (A)* 22,740 823
Amedisys* 14,720 445
AMERIGROUP* 19,420 710
Amgen (A)* 22,320 1,299
Bausch & Lomb 11,230 823
Biomet 32,050 1,163
Biosite (A)* 11,020 573
C.R. Bard 18,250 1,242
Caremark Rx* 43,380 1,726
Community Health Systems* 25,170 879
Cooper 16,130 1,176
CV Therapeutics* 33,480 682
Cypress Bioscience* 16,050 147
Dade Behring Holdings* 10,120 596
DaVita (A)* 25,060 1,049
Encysive Pharmaceuticals* 41,270 422
Fisher Scientific International* 18,030 1,026
Genesis HealthCare (A)* 29,763 1,277
Gilead Sciences* 56,590 2,026
Horizon Health* 7,490 318
Inamed* 5,940 415
Intuitive Surgical* 21,700 987
Johnson & Johnson 42,690 2,867
Kindred Healthcare (A)* 17,620 619
MGI Pharma* 18,240 461
NitroMed* 46,670 808
Pacificare Health Systems* 15,670 892
Pfizer 120,990 3,178
Renal Care Group* 37,390 1,419
Roche Holdings ADR 14,570 784
Sepracor* 12,930 742
Sierra Health Services* 5,450 348
St. Jude Medical* 17,520 631
SuperGen* 57,800 281
Syneron Medical* 11,910 379
Triad Hospitals* 18,540 929
United Therapeutics* 26,620 1,216
Varian* 10,220 387
WellCare Health Plans* 14,900 454
WellPoint* 7,740 970
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
Zimmer Holdings (A)* 8,630 $ 672
------------
37,841
- ------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $34,379) 38,420
==============================================================================
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR
LOANED SECURITIES (12.8%)
- ------------------------------------------------------------------------------
BlackRock Institutional Money
Market Trust 5,337,770 5,338
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT
HELD AS COLLATERAL FOR LOANED
SECURITIES (COST $5,338) 5,338
==============================================================================
CASH EQUIVALENTS (10.9%)
- ------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares 4,557,220 4,557
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(COST $4,557) 4,557
==============================================================================
TOTAL INVESTMENTS (115.8%)
(COST $44,274) 48,315
==============================================================================
OTHER ASSETS AND LIABILITIES (-15.8%)
- ------------------------------------------------------------------------------
Obligation to return securities lending (5,338)
collateral
Payable for investment securities purchased (1,713)
Payable for Capital Shares redeemed (103)
Payable due to Investment Adviser (34)
Payable due to Shareholder Servicing Agent (8)
Payable due to Administrator (5)
Other assets and liabilities, net 603
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (6,598)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 41,717
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 38,094
Accumulated net investment loss (270)
Accumulated net realized loss on investments (148)
Net unrealized appreciation on investments 4,041
- ------------------------------------------------------------------------------
NET ASSETS $ 41,717
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES
($41,716,919/2,893,717 SHARES) $ 14.42
==============================================================================
* Non-income producing security.
+ Narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting.
(A) The security or a portion of this security is on loan at March 31, 2005
(See Note 9 in the Notes to Financial Statements). The total value of
securities on loan at March 31, 2005 was $5,135,067.
ADR - American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 49
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation International Equity Fund
March 31, 2005
SECTOR WEIGHTINGS+
- -------------------------------------------------------------------------------
[CHART APPEARS HERE]
24.0% Financials
16.2% Consumer Discretionary
11.5% Industrials
9.0% Consumer Staples
8.7% Health Care
8.2% Materials
8.0% Energy
7.8% Telecommunication Services
4.6% Information Technology
2.0% Utilities
+ Percentages based on total investments
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
FOREIGN COMMON STOCK (94.6%)
- ------------------------------------------------------------------------------
AUSTRALIA (0.9%)
- ------------------------------------------------------------------------------
Amcor 39,792 $ 220
National Australia Bank 16,450 360
Rio Tinto 13,200 460
------------
1,040
------------
BELGIUM (0.3%)
- ------------------------------------------------------------------------------
Fortis* 13,800 394
------------
BERMUDA (0.3%)
- ------------------------------------------------------------------------------
Axis Capital Holdings 13,100 354
------------
BRAZIL (1.4%)
- ------------------------------------------------------------------------------
Brasil Telecom Participacoes ADR* 12,100 395
Cia Paranaense de Energia ADR* 54,900 257
Petroleo Brasileiro ADR* 17,541 775
Telecomunicacoes Brasileiras ADR* 7,040 204
------------
1,631
------------
CANADA (1.6%)
- ------------------------------------------------------------------------------
Barrick Gold 15,700 376
Canadian Imperial Bank
of Commerce 1,600 97
Canadian Pacific Railway 5,510 199
Quebecor World 22,200 520
Royal Bank of Canada 3,958 241
Sobeys 12,550 400
Torstar, Cl B 5,080 104
------------
1,937
------------
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
CHINA (0.4%)
- ------------------------------------------------------------------------------
China Telecom, Cl G 314,900 $ 110
Huadian Power International, Cl H 549,400 150
PetroChina ADR* 3,400 215
------------
475
------------
DENMARK (0.5%)
- ------------------------------------------------------------------------------
Carlsberg, Cl B* 3,569 177
Danske Bank 15,738 457
------------
634
------------
FINLAND (1.2%)
- ------------------------------------------------------------------------------
M-real, Cl B 39,100 231
Metso* 23,300 418
Nokia 600 9
Nokia ADR* 10,900 168
UPM-Kymmene 27,211 603
------------
1,429
------------
FRANCE (8.9%)
- ------------------------------------------------------------------------------
Accor* 7,733 379
AXA 23,200 618
BNP Paribas 5,230 371
Carrefour* 15,723 834
Credit Agricole 9,220 251
Eiffage* 2,361 272
France Telecom* 22,839 684
Lafarge* 2,100 203
Pernod-Ricard 1,792 250
Pinault-Printemps-Redoute* 2,865 306
Sanofi-Aventis* 22,530 1,899
Schneider Electric 1,824 143
Societe Generale* 5,900 613
Technip* 3,600 602
Total 10,051 2,351
Valeo 7,960 354
Veolia Environnement 15,563 552
------------
10,682
------------
GERMANY (8.4%)
- ------------------------------------------------------------------------------
Adidas-Salomon 3,019 479
Allianz* 1,040 132
Altana* 11,000 699
Bayer 27,252 900
Bayerische Hypo-und Vereinsbank* 51,626 1,262
Bayerische Motoren Werke* 9,400 427
Deutsche Bank* 3,108 268
Deutsche Boerse* 6,600 496
Deutsche Lufthansa* 14,270 206
Deutsche Post* 16,840 411
Deutsche Postbank* 4,150 191
Deutsche Telekom* 9,300 186
E.ON* 3,310 284
Fresenius Medical Care* 5,500 445
Heidelberger Druckmaschinen* 4,300 137
50 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation International Equity Fund
March 31, 2005
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
Infineon Technologies* 19,420 $ 186
KarstadtQuelle* 21,934 220
Medion* 3,710 60
Rhoen Klinikum* 4,000 253
Schering* 12,301 816
Siemens* 9,362 741
Volkswagen* 25,524 1,215
------------
10,014
------------
GUERNSEY (0.8%)
- ------------------------------------------------------------------------------
Amdocs* 34,300 974
------------
HONG KONG (1.8%)
- ------------------------------------------------------------------------------
Bank of East Asia 79,079 228
Cafe de Coral Holdings 182,000 208
China Mobile Hong Kong 75,092 245
Citic Pacific 25,100 74
Denway Motors 944,000 333
Glorious Sun Enterprises 240,000 102
Hung Hing Printing Group 206,000 149
Sun Hung Kai Properties 38,000 345
Swire Pacific, Cl A 68,000 538
------------
2,222
------------
HUNGARY (0.2%)
- ------------------------------------------------------------------------------
Matav* 26,400 124
Matav ADR* 3,200 75
------------
199
------------
INDIA (0.4%)
- ------------------------------------------------------------------------------
Hindalco Industries GDR* 5,400 162
Mahanagar Telephone Nigam ADR* 19,700 125
Reliance Industries GDR* 9,200 236
------------
523
------------
INDONESIA (0.2%)
- ------------------------------------------------------------------------------
Gudang Garam* 137,900 235
------------
IRELAND (1.1%)
- ------------------------------------------------------------------------------
Bank of Ireland 33,750 533
Ryanair Holdings ADR* 16,700 731
------------
1,264
------------
ITALY (3.2%)
- ------------------------------------------------------------------------------
Banca Intesa* 163,025 828
Banche Popolari Unite 6,560 138
Benetton Group* 14,486 140
Enel 38,833 371
ENI 30,031 780
Finmeccanica* 274,480 278
Mediaset 55,991 805
UniCredito Italiano* 80,450 472
------------
3,812
------------
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
JAPAN (20.1%)
- ------------------------------------------------------------------------------
77 Bank 40,100 $ 291
Aeon 7,000 118
Alps Electric (A) 12,000 191
Aruze 4,600 125
Astellas Pharma 10,600 359
Bridgestone (A) 30,000 552
Canon (A) 11,500 617
Credit Saison 7,000 252
Denso 22,900 570
Dentsu (A) 69 189
Fanuc 7,600 476
Fuji Heavy Industries (A) 51,700 253
Fuji Photo Film (A) 22,200 812
Fujirebio (A) 50,000 786
Funai Electric (A) 1,850 228
JS Group 7,200 132
JSR (A) 17,000 335
Kao (A) 13,500 310
KDDI (A) 52 258
Keyence 800 185
Kuraray (A) 19,000 170
Lawson (A) 5,800 213
Mabuchi Motor 3,900 234
Matsumotokiyoshi 5,200 154
Matsushita Electric Industrial 24,000 354
Millea Holdings 90 1,310
Minebea 49,000 210
Mitsubishi Estate 69,000 802
Mitsubishi Tokyo Financial Group (A) 65 564
Murata Manufacturing 4,000 214
Nippon Express 90,000 473
Nippon Shinpan* 155,000 708
Nippon Telegraph & Telephone 51 223
Nipponkoa Insurance 165,000 1,131
Nissan Motor 34,500 354
Nomura Holdings 23,900 334
ORIX 4,448 567
Rinnai 10,900 277
Rohm 3,300 319
Secom 12,000 499
Sekisui House 22,000 235
Sharp 29,000 439
Shin-Etsu Chemical 8,878 336
Shiseido 1,400 18
Skylark 14,700 248
Sohgo Security Services 8,200 118
Sony 21,400 852
Sumitomo Bakelite 36,600 228
Sumitomo Chemical 39,300 194
Sumitomo Mitsui Financial Group 64 433
T&D Holdings* 9,850 501
Takeda Pharmaceutical 7,000 334
Takefuji 4,430 298
TDK 13,100 897
Constellation Funds 2005 Semiannual Report 51
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation International Equity Fund
March 31, 2005
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
Tokyo Electron 6,000 $ 342
Tokyu 81,000 422
Toyoda Gosei 10,400 188
Toyota Motor 6,900 257
Yamada Denki 16,400 860
Yamaguchi Bank 34,000 419
Yamaha Motor 15,400 264
------------
24,032
------------
MALAYSIA (0.3%)
- ------------------------------------------------------------------------------
Malayan Banking 27,000 80
Sime Darby 118,700 186
Tenaga Nasional 30,800 83
------------
349
------------
MEXICO (1.6%)
- ------------------------------------------------------------------------------
Cemex ADR* 17,534 636
Coca-Cola Femsa ADR* 11,390 275
Grupo Televisa ADR* 3,493 205
Telefonos de Mexico ADR* 17,900 618
Wal-Mart de Mexico, Cl V* 42,686 150
------------
1,884
------------
NETHERLANDS (6.0%)
- ------------------------------------------------------------------------------
ABN AMRO Holding* 10,144 252
Aegon* 21,779 294
Akzo Nobel* 21,700 990
DSM* 9,400 662
Fortis Bank Nederland Holdings* 3,125 --
Heineken* 10,365 359
Heineken Holding, Cl A* 2,015 62
ING Groep 20,582 621
Koninklijke Ahold* 68,900 577
Koninklijke Philips Electronics* 34,740 957
Koninklijke Philips Electronics,
NY Shares* 6,560 181
Royal Dutch Petroleum* 22,580 1,350
VNU* 19,564 570
Wolters Kluwer* 17,633 322
------------
7,197
------------
NEW ZEALAND (0.1%)
- ------------------------------------------------------------------------------
Carter Holt Harvey 48,200 68
------------
NORWAY (0.1%)
- ------------------------------------------------------------------------------
Telenor ASA* 19,387 174
------------
PORTUGAL (0.7%)
- ------------------------------------------------------------------------------
Banco Comercial Portugues* 105,579 287
Energias de Portugal* 62,100 173
Portugal Telecom SGPS* 29,155 342
------------
802
------------
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
SINGAPORE (1.0%)
- ------------------------------------------------------------------------------
DBS Group Holdings* 69,200 $ 625
Flextronics International* 21,200 255
United Overseas Bank 31,400 274
------------
1,154
------------
SOUTH AFRICA (0.5%)
- ------------------------------------------------------------------------------
Nampak 89,300 226
Nedcor 17,272 208
Sappi 15,100 185
------------
619
------------
SOUTH KOREA (4.0%)
- ------------------------------------------------------------------------------
Hyundai Motor 3,710 201
Kookmin Bank* 47,014 2,099
Korea Electric Power 6,600 169
Korea Electric Power ADR* 3,100 42
KT ADR* 18,400 392
NCSoft* 1,220 94
Samsung Electronics 1,636 808
Shinsegae 780 240
SK Telecom ADR* 36,770 725
------------
4,770
------------
SPAIN (3.9%)
- ------------------------------------------------------------------------------
Acerinox 11,142 183
Banco Popular Espanol 5,346 346
Banco Sabadell* 11,400 285
Endesa* 18,900 425
Iberdrola* 22,926 599
Repsol YPF* 60,773 1,608
Telefonica* 70,440 1,227
------------
4,673
------------
SWEDEN (0.9%)
- ------------------------------------------------------------------------------
Electrolux, Cl B 28,580 665
Svenska Cellulosa, Cl B 4,580 173
Trelleborg, Cl B 12,400 215
------------
1,053
------------
SWITZERLAND (6.2%)
- ------------------------------------------------------------------------------
Ciba Specialty Chemicals* 5,533 358
Compagnie Financiere Richemont, Cl A* 12,003 377
Converium Holding* 43,600 410
Credit Suisse Group* 9,900 425
Forbo Holding* 700 147
Julius Baer Holding, Cl B* 80 28
Lonza Group* 13,313 815
Nestle 8,654 2,367
Novartis* 25,196 1,175
Roche Holding* 4,700 504
Swiss Reinsurance* 5,400 387
UBS* 4,340 366
------------
7,359
------------
52 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation International Equity Fund
March 31, 2005
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
TAIWAN (1.6%)
- ------------------------------------------------------------------------------
AU Optronics ADR* 27,650 $ 405
Chunghwa Telecom ADR* 20,800 441
Compal Electronics GDR* 51,900 244
Taiwan Semiconductor Manufacturing ADR* 66,905 567
United Microelectronics ADR* 81,447 275
------------
1,932
------------
THAILAND (0.5%)
- ------------------------------------------------------------------------------
Bangkok Bank* 80,800 209
Kasikornbank 142,800 213
PTT 42,800 211
------------
633
------------
UNITED KINGDOM (15.1%)
- ------------------------------------------------------------------------------
Aegis Group 196,800 379
Anglo American 36,126 857
AstraZeneca 16,797 662
BAA 15,540 171
BAE Systems 43,200 212
Barclays 23,304 238
BOC Group 10,600 204
Boots Group 28,579 337
BP 60,954 632
BT Group 103,264 401
Bunzl 26,902 263
Capita Group 38,148 271
Centrica 48,830 213
Compass Group 80,912 369
Diageo 127,454 1,796
GKN 79,780 383
GlaxoSmithKline 51,717 1,185
HBOS 32,300 503
Imperial Tobacco Group 27,056 710
International Power* 196,739 666
Invensys* 1,083,700 317
J Sainsbury* 42,823 234
Kingfisher 102,570 560
Lloyds TSB Group 92,903 839
Marks & Spencer Group 24,200 158
Michael Page International 96,200 353
Old Mutual 48,300 123
Pearson 71,066 866
Reed Elsevier 21,600 224
Rexam 16,682 150
Rio Tinto 10,204 330
Rolls-Royce Group, Cl B* 3,663,950 7
Royal & Sun Alliance Insurance Group 201,400 299
Royal Bank of Scotland Group 13,961 444
SABMiller 21,822 342
Shell Transport & Trading 61,685 554
Smith & Nephew 52,683 495
Unilever 43,400 429
Vodafone Group 145,531 386
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
WPP Group 39,100 $ 445
------------
18,007
------------
UNITED STATES (0.4%)
- ------------------------------------------------------------------------------
NTL* 5,200 331
Royal Caribbean Cruises* 3,000 132
------------
463
- ------------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCK
(COST $92,727) 112,988
==============================================================================
FOREIGN PREFERRED STOCK (0.2%)
- ------------------------------------------------------------------------------
GERMANY (0.2%)
- ------------------------------------------------------------------------------
Rhoen Klinikum* 4,400 274
- ------------------------------------------------------------------------------
TOTAL FOREIGN PREFERRED STOCK
(COST $210) 274
==============================================================================
FOREIGN RIGHTS (0.0%)
- ------------------------------------------------------------------------------
BRAZIL (0.0%)
- ------------------------------------------------------------------------------
Embratel Participacoes*, Expires 04/07/05 7,040 --
- ------------------------------------------------------------------------------
TOTAL FOREIGN RIGHTS
(COST $0) --
==============================================================================
CASH EQUIVALENTS (3.9%)
- ------------------------------------------------------------------------------
BlackRock TempCash Fund, Institutional Shares 1,734,418 1,734
PNC Bank Money Market Fund 2,885,778 2,886
- ------------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS (COST $4,620) 4,620
==============================================================================
TOTAL INVESTMENTS (98.7%)
(COST $97,557) 117,882
==============================================================================
OTHER ASSETS AND LIABILTIES (1.3%)
- ------------------------------------------------------------------------------
Payable for investment securities purchased (526)
Payable for Capital Shares redeemed (29)
Payable due to Investment Advisor (76)
Payable due to Shareholder Servicing Agent (26)
Payable due to Administrator (15)
Other assets and liabilities, net 2,207
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES 1,535
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 119,417
==============================================================================
Constellation Funds 2005 Semiannual Report 53
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation International Equity Fund
March 31, 2005
VALUE
(000)
- ------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 129,852
Distributions in excess of net investment income (719)
Accumulated net realized loss on investments (30,045)
Net unrealized appreciation on investments 20,325
Net unrealized appreciation on foreign currency
and translation of other assets and liabilities
in foreign currency investments 4
- ------------------------------------------------------------------------------
NET ASSETS $ 119,417
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS II SHARES
($119,416,591 /14,807,798 SHARES) $ 8.06
==============================================================================
* Non-income producing security.
(A) Security valued at fair value using methods determined in good faith by
the Valuation Committee of the Board of Trustees.
ADR - American Depositary Receipt
Cl - Class
GDR - Global Depositary Receipt
Amounts designated as "-" are either $0 or have been rounded to $0.
As of March 31, 2005, the Constellation International Equity Fund had the
following foreign currency contracts outstanding:
IN UNREALIZED
SETTLEMENT CONTRACTS TO EXCHANGE APPRECIATION
DATE RECEIVE (DELIVER) FOR (DEPRECIATION)
- ----------------------------------------------------------------------
FOREIGN CURRENCY PURCHASES:
4/1/05 JP 10,208,640 $ (95,168) $ 53
4/4/05 CH 14,042 (11,806) (67)
4/4/05 EU 50,459 (38,585) 312
4/4/05 HK 89,942 (11,532) -
4/4/05 JP 2,771,144 (25,986) (138)
-------------
160
-------------
FOREIGN CURRENCY SALES:
4/1/05 EU (100,00) 130,030 429
4/1/05 GB (47,325) 88,681 (738)
4/4/05 CA (14,263) 11,786 (10)
4/4/05 GB (95,614) 179,773 (851)
4/4/05 HK (26,350) 3,350 (29)
4/5/05 GB (34,487) 65,111 (34)
4/5/05 MX (26,892) 2,326 (79)
4/5/05 MY (8,829) 2,320 (4)
4/6/05 EU (3,006) 4,019 112
4/6/05 GB (7,773) 14,847 158
4/6/05 HK (4,600) 589 -
4/6/05 ID (62,992,105) 6,744 93
4/6/05 MY (48,452) 12,734 (17)
4/7/05 GB (11,217) 20,750 (444)
-------------
(1,414)
-------------
Net unrealized depreciation $ (1,254)
-------------
CURRENCY LEGEND
CA - Canadian Dollar ID - Indonesian
CH - Swiss Franc JP - Japanese Yen
EU - Euro MX - Mexican Peso
GB - British Pounds MY - Malaysian Ringgit
HK - Hong Kong Dollar
The accompanying notes are an integral part of the financial statements.
54 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
STATEMENT OF NET ASSETS
Constellation Strategic Value and High Income Fund
March 31, 2005
SECTOR WEIGHTINGS+
- ------------------------------------------------------------------------------
[CHART APPEARS HERE]
61.1% Equity Funds
38.9% Fixed Income Fund
+ Percentages based on total investments
VALUE
SHARES (000)
- ------------------------------------------------------------------------------
AFFILIATED EQUITY FUNDS (61.4%)
- ------------------------------------------------------------------------------
Constellation HLAM Large Cap
Value Fund, Class II Shares* 20,038 $ 207
Constellation TIP Small Cap Value
Opportunities Fund,
Class II Shares* 26,668 433
- ------------------------------------------------------------------------------
TOTAL AFFILIATED EQUITY FUNDS
(COST $559) 640
==============================================================================
AFFILIATED FIXED INCOME FUND (39.0%)
- ------------------------------------------------------------------------------
Constellation Chartwell High Yield
Fund, Class I Shares* 81,087 407
- ------------------------------------------------------------------------------
TOTAL AFFILIATED FIXED INCOME FUND
(COST $403) 407
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS (100.4%)
(COST $962) 1,047
- ------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-0.4%)
- ------------------------------------------------------------------------------
Receivable due from Investment Adviser 5
Payable for income distribution (6)
Payable for investment securities purchased (2)
Other assets and liabilities, net 1
- ------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (2)
- ------------------------------------------------------------------------------
NET ASSETS (100%) $ 1,045
==============================================================================
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Portfolio capital
(unlimited authorization -- no par value) $ 798
Undistributed net investment income 1
Accumulated net realized gain on investments 161
Net unrealized appreciation on investments 85
- ------------------------------------------------------------------------------
NET ASSETS $ 1,045
==============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES
($1,044,719/78,914 SHARES) $ 13.24
==============================================================================
* Non-income producing security.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 55
FINANCIAL STATEMENTS (unaudited)
STATEMENTS OF OPERATIONS (000)
Constellation
Constellation Constellation Constellation Clover Core
Clover Core Clover Small Clover Large Fixed Income
Value Fund Cap Value Fund Cap Value Fund Fund
---------------------------------------------------------------------
6 months ended 6 months ended 6 months ended 6 months ended
3/31/05 3/31/05 3/31/05 3/31/05
- --------------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividends $ 441 $ 2,087 $ 94 $ 6
Interest - - - 702
Securities lending 3 212 - -
Foreign taxes withheld (2) - - -
- --------------------------------------------------------------------------------------------------------------------------
Total Investment Income 442 2,299 94 708
- --------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 237 2,355 23 67
Administrator fees 47 407 5 22
Shareholder servicing fees(3) - - - -
Distribution fees Investor A Shares(4) - - - -
Distribution fees Investor B Shares(4) - - - -
Trustees' fees 2 16 - 1
Transfer agent fees 39 427 14 22
Professional fees 9 55 4 5
Custodian fees 5 66 1 3
Printing fees 5 44 - 2
Registration fees 2 19 - 1
Insurance and other fees 4 31 - 2
- --------------------------------------------------------------------------------------------------------------------------
Total expenses 350 3,420 47 125
Less:
Investment advisory fees waived - - (10) (6)
- --------------------------------------------------------------------------------------------------------------------------
Net expenses 350 3,420 37 119
- --------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 92 (1,121) 57 589
- --------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from securities sold 6,499 31,237 214 296
Net change in unrealized appreciation
(depreciation) of investment securities 1,707 17,919 238 (794)
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 8,206 49,156 452 (498)
- --------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $ 8,298 $ 48,035 $ 509 $ 91
==========================================================================================================================
56 Constellation Funds 2005 Semiannual Report
Constellation
Chartwell Ultra Constellation
Constellation Short Duration Chartwell Short Constellation
Clover Income Fixed Income Duration Fixed Chartwell High Constellation HLAM Large
Plus Fund Fund Income Fund Yield Fund Cap Quality Growth Fund(2)
- ------------------------------------------------------------------------------------------------------
2/28/05(1) thru 6 months ended 6 months ended 6 months ended 1/1/05 thru year ended
3/31/05 3/31/05 3/31/05 3/31/05 3/31/05 12/31/04
- ------------------------------------------------------------------------------------------------------
$ 13 $ 2 $ - $ 1 $ 48 $ 432
- 6,082 2,820 271 - 3
- 2 1 2 - -
- - - - - (5)
- ------------------------------------------------------------------------------------------------------
13 6,086 2,821 274 48 430
- ------------------------------------------------------------------------------------------------------
2 468 199 21 36 267
- 275 117 6 7 5
1 6 14 - 12 8
- - - - - 65
- - - - - 40
- 11 5 - - 24
2 227 106 14 18 80
1 39 19 4 6 123
1 25 14 4 3 47
- 26 10 1 2 43
- 16 8 - - 19
- 13 10 - - 1
- ------------------------------------------------------------------------------------------------------
7 1,106 502 50 84 722
(4) (129) (68) (19) (24) (257)
- ------------------------------------------------------------------------------------------------------
3 977 434 31 60 465
- ------------------------------------------------------------------------------------------------------
10 5,109 2,387 243 (12) (35)
- ------------------------------------------------------------------------------------------------------
(4) 241 (179) 213 892 6,721
(59) (747) (1,013) (312) (1,881) (5,981)
- ------------------------------------------------------------------------------------------------------
(63) (506) (1,192) (99) (989) 740
- ------------------------------------------------------------------------------------------------------
$ (53) $ 4,603 $ 1,195 $ 144 $ (1,001) $ 705
======================================================================================================
- ----------
(1) Commencement of operations.
(2) On November 8, 2004 the Constellation Funds acquired the assets and
liabilities of the Hilliard Lyons Growth Fund, Inc. in a tax-free
reorganization. See Note 10 in Notes to Financial Statements for additional
information. The Fund changed its fiscal year end from December 31 to
September 30.
(3) Attributable to Class II Shares only.
(4) On November 8, 2004, Investor A shares were converted into Class II Shares.
Subsequently, Investor B Shares were fully liquidated and exchanged for
Class II Shares. See Note 10 in Notes to Financial Statements for
additional information.
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 57
FINANCIAL STATEMENTS (unaudited)
STATEMENTS OF OPERATIONS (000)
Constellation Constellation
Constellation Pitcairn Constellation Pitcairn
HLAM Large Diversified Pitcairn Select Diversified
Cap Value Fund Value Fund Value Fund Growth Fund
---------------------------------------------------------------------
6 months ended 6 months ended 6 months ended 6 months ended
3/31/05 3/31/05 3/31/05 3/31/05
- --------------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividends $ 13 $ 1,890 $ 594 $ 1,176
Interest - 2 2 2
Securities lending - 3 1 2
Foreign taxes withheld - - - -
- --------------------------------------------------------------------------------------------------------------------------
Total Investment Income 13 1,895 597 1,180
- --------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 6 562 226 389
Administrator fees 1 118 48 82
Shareholder servicing fees(1) 2 201 81 139
Trustees' fees - 4 1 3
Transfer agent fees 12 20 15 17
Professional fees 3 21 10 15
Custodian fees 1 10 5 8
Printing fees - 15 6 10
Registration fees - 4 2 3
Insurance and other fees - 9 4 6
- --------------------------------------------------------------------------------------------------------------------------
Total expenses 25 964 398 672
Less:
Investment advisory fees waived (6) (80) (26) (60)
Reimbursement from adviser (9) - - -
- --------------------------------------------------------------------------------------------------------------------------
Net expenses 10 884 372 612
- --------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 3 1,011 225 568
- --------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from securities sold 26 5,360 4,568 1,961
Net change in unrealized appreciation
(depreciation) of investment securities 49 6,425 (1,541) 2,875
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 75 11,785 3,027 4,836
- --------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $ 78 $ 12,796 $ 3,252 $ 5,404
==========================================================================================================================
58 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
Constellation Constellation Constellation TIP
Constellation Constellation Constellation Pitcairn Sands Capital Small Cap Value
Pitcairn Small Pitcairn Family Pitcairn Taxable Tax-Exempt Select Growth Opportunities
Cap Fund Heritage(R) Fund Bond Fund Bond Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------
6 months ended 6 months ended 6 months ended 6 months ended 6 months ended 6 months ended
3/31/05 3/31/05 3/31/05 3/31/05 3/31/05 3/31/05
- --------------------------------------------------------------------------------------------------------------
$ 392 $ 979 $ - $ - $ 487 $ 311
6 4 1,203 2,621 41 -
45 1 - - 3 1
(1) - - - (4) -
- --------------------------------------------------------------------------------------------------------------
442 984 1,203 2,621 527 312
- --------------------------------------------------------------------------------------------------------------
339 367 97 175 540 107
71 60 36 86 93 17
121 102 61 146 101 28
2 2 1 3 3 1
17 18 14 19 47 88
13 12 8 16 17 5
7 5 3 7 8 11
9 7 4 10 12 2
3 2 2 2 2 1
6 5 3 7 2 1
- --------------------------------------------------------------------------------------------------------------
588 580 229 471 825 261
(51) (51) (12) (64) (24) (97)
- - - - - -
- --------------------------------------------------------------------------------------------------------------
537 529 217 407 801 164
- --------------------------------------------------------------------------------------------------------------
(95) 455 986 2,214 (274) 148
- --------------------------------------------------------------------------------------------------------------
1,570 3,435 (12) 631 (86) 739
2,809 (1,294) (1,226) (2,284) 98 548
- --------------------------------------------------------------------------------------------------------------
4,379 2,141 (1,238) (1,653) 12 1,287
- --------------------------------------------------------------------------------------------------------------
$ 4,284 $ 2,596 $ (252) $ 561 $ (262) $ 1,435
==============================================================================================================
- ----------
(1) Attributable to Class II Shares only.
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 59
FINANCIAL STATEMENTS (unaudited)
STATEMENTS OF OPERATIONS (000)
Constellation Constellation
Constellation TIP Healthcare Constellation Strategic Value
TIP Financial & Biotechnology International and High
Services Fund Fund Equity Fund Income Fund
----------------------------------------------------------------------
6 months ended 6 months ended 6 months ended 6 months ended
3/31/05 3/31/05 3/31/05 3/31/05
- ---------------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividends $ 203 $ 66 $ 955 $ 43*
Interest - - 11 -
Securities lending - 1 - -
Foreign taxes withheld - - (94) -
- ---------------------------------------------------------------------------------------------------------------------------
Total Investment Income 203 67 872 43*
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 88 207 550 -
Administrator fees 12 27 85 1
Shareholder servicing fees(1) - 46 145 -
Trustees' fees - 1 3 -
Transfer agent fees 17 42 19 16
Professional fees 5 7 15 4
Custodian fees 2 5 83 -
Printing fees 1 3 4 -
Registration fees 1 1 - -
Insurance and other fees 1 2 11 -
- ---------------------------------------------------------------------------------------------------------------------------
Total expenses 127 341 915 21
Less:
Investment advisory fees waived (9) (4) (76) -
Reimbursement from adviser - - - (21)
- ---------------------------------------------------------------------------------------------------------------------------
Net expenses 118 337 839 -
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 85 (270) 33 43
- ---------------------------------------------------------------------------------------------------------------------------
Net realized gain from securities sold 1,174 47 8,365 5*
Net realized loss from foreign currency
transactions - - (23) -
Net change in unrealized appreciation
(depreciation) of investment securities 190 2,857 6,923 (1)*
Net change in unrealized depreciation on
translation of foreign currency and other assets
and liabilites denominated in foreign currency - - (23) -
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
on investments 1,364 2,904 15,242 4
- ---------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations $ 1,449 $ 2,634 $ 15,275 $ 47
===========================================================================================================================
- ----------
* Dividend income, net realized gain from securities sold and net change in
unrealized appreciation of investment securities are attributable to the
underlying investments in affiliated investment companies.
(1) Attributable to Class II Shares only.
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
60 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS (unaudited)
PAGE INTENTIONALLY LEFT BLANK
Constellation Funds 2005 Semiannual Report 61
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS (000)
Constellation Clover Constellation Clover
Core Value Fund Small Cap Value Fund
----------------------------------------------------------------------
6 months ended year ended 6 months ended year ended
3/31/05* 9/30/04(1) 3/31/05* 9/30/04(1)
- ---------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ 92 $ 220 $ (1,121) $ (423)
Net realized gain (loss) from securities sold 6,499 4,878 31,237 54,685
Net change in unrealized appreciation
(depreciation) of investments 1,707 4,420 17,919 40,856
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations 8,298 9,518 48,035 95,118
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Class I Shares (99) (213) - (652)
Realized capital gains
Class I Shares (5,133) (1,697) - -
- ---------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (5,232) (1,910) - (652)
- ---------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Class I Shares
Proceeds from shares issued 6,880 23,355 59,510 230,219
Proceeds from shares issued in lieu of cash
distributions 5,133 1,838 - 593
Cost of shares redeemed (8,976) (19,760) (126,895) (179,946)
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
Class I Shares transactions 3,037 5,433 (67,385) 50,866
- ---------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 6,103 13,041 (19,350) 145,332
- ---------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 59,714 46,673 540,278 394,946
- ---------------------------------------------------------------------------------------------------------------------------
End of period $ 65,817 $ 59,714 $ 520,928 $ 540,278
===========================================================================================================================
Undistributed net investment income
(distributions in excess of net investment
income/accumulated net investment loss) $ (1) $ 6 $ (1,075) $ 46
===========================================================================================================================
Shares issued and redeemed:
Class I Shares
Issued 399 1,446 2,334 10,042
Issued in lieu of cash distributions 300 120 - 26
Redeemed (527) (1,240) (4,956) (7,868)
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class I Shares 172 326 (2,622) 2,200
===========================================================================================================================
62 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS
Constellation Clover Constellation Clover Constellation Clover
Large Cap Value Fund Core Fixed Income Fund Income Plus Fund
- --------------------------------------------------------------------------------------------------
6 months ended year ended 6 months ended year ended 2/28/05(2) thru
3/31/05* 9/30/04(1) 3/31/05* 9/30/04(1) 3/31/05*
- --------------------------------------------------------------------------------------------------
$ 57 $ 42 $ 589 $ 1,441 $ 10
214 422 296 859 (4)
238 212 (794) (1,401) (59)
- --------------------------------------------------------------------------------------------------
509 676 91 899 (53)
- --------------------------------------------------------------------------------------------------
(57) (42) (624) (1,530) (10)
- - (394) - -
- --------------------------------------------------------------------------------------------------
(57) (42) (1,018) (1,530) (10)
- --------------------------------------------------------------------------------------------------
373 2,944 2,821 12,793 3,986
56 41 968 1,389 10
(771) (2,160) (7,856) (24,608) (294)
- --------------------------------------------------------------------------------------------------
(342) 825 (4,067) (10,426) 3,702
- --------------------------------------------------------------------------------------------------
110 1,459 (4,994) (11,057) 3,639
- --------------------------------------------------------------------------------------------------
6,251 4,792 32,334 43,391 -
- --------------------------------------------------------------------------------------------------
$ 6,361 $ 6,251 $ 27,340 $ 32,334 $ 3,639
==================================================================================================
$ - $ - $ (1) $ - $ -
==================================================================================================
33 272 279 1,247 401
5 4 96 136 1
(69) (200) (773) (2,407) (30)
- --------------------------------------------------------------------------------------------------
(31) 76 (398) (1,024) 372
==================================================================================================
- ----------
* Unaudited
(1) On May 10, 2004 and August 2, 2004 the Constellation Funds acquired the
assets of certain Turner Funds and the Pitcairn Funds, respectively, in a
tax-free reorganization. See Note 10 in Notes to Financial Statements for
additional information.
(2) Commencement of operations.
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 63
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS (000)
Constellation Chartwell
Ultra Short Duration
Fixed Income Fund
--------------------------------
6 months ended year ended
3/31/05* 9/30/04(1)
- -----------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income $ 5,109 $ 8,655
Net realized gain (loss) from securities sold 241 (90)
Net change in unrealized depreciation of investments (747) (1,750)
- -----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 4,603 6,815
- -----------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Class I Shares (5,105) (8,654)
Class II Shares (63) (125)
- -----------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (5,168) (8,779)
- -----------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Class I Shares:
Proceeds from shares issued 57,875 169,703
Proceeds from shares issued in lieu of cash distributions 4,959 8,365
Proceeds from shares issued in connection with conversion into Class I Shares(2) 7,625 -
Cost of shares redeemed (120,859) (246,769)
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Class I Shares transactions (50,400) (68,701)
- -----------------------------------------------------------------------------------------------------------------------
Class II Shares:
Proceeds from shares issued 1,265 6,182
Proceeds from shares issued in lieu of cash distributions 39 101
Proceeds from shares issued in connection with conversion into Class I Shares(2) (7,625) -
Cost of shares redeemed (2,566) (3,320)
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Class II Shares transactions (8,887) 2,963
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital share transactions (59,287) (65,738)
- -----------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (59,852) (67,702)
- -----------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 400,829 468,531
- -----------------------------------------------------------------------------------------------------------------------
End of period $ 340,977 $ 400,829
=======================================================================================================================
Undistributed net investment income (distributions in excess of
net investment income) $ (9) $ (2)
=======================================================================================================================
Shares issued and redeemed:
Class I Shares:
Issued 5,722 16,728
Issued in lieu of cash distributions 490 825
Issued in connection with conversion into Class I Shares(2) 755 -
Redeemed (11,948) (24,310)
- -----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class I Shares (4,981) (6,757)
- -----------------------------------------------------------------------------------------------------------------------
Class II Shares/Investor A Shares:
Issued 124 607
Issued in lieu of cash distributions 4 10
Issued in connection with conversion into Class I Shares(2) (752) -
Redeemed (252) (325)
- -----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class II Shares/Investor A Shares (876) 292
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions (5,857) (6,465)
=======================================================================================================================
64 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS
Constellation Chartwell
Short Duration Constellation Chartwell
Fixed Income Fund High Yield Fund
- ---------------------------------------------------------------------------
6 months ended year ended 6 months ended year ended
3/31/05* 9/30/04(1) 3/31/05* 9/30/04(1)
- ---------------------------------------------------------------------------
$ 2,387 $ 5,188 $ 243 $ 754
(179) 489 213 650
(1,013) (2,013) (312) (479)
- ---------------------------------------------------------------------------
1,195 3,664 144 925
- ---------------------------------------------------------------------------
(2,637) (5,741) (245) (753)
(195) (69) - -
- ---------------------------------------------------------------------------
(2,832) (5,810) (245) (753)
- ---------------------------------------------------------------------------
5,232 30,025 6,254 10,285
2,499 5,666 58 171
25,880 - - -
(77,080) (114,133) (9,247) (9,865)
- ---------------------------------------------------------------------------
(43,469) (78,442) (2,935) 591
- ---------------------------------------------------------------------------
24,452 5,502 - -
119 66 - -
(25,880) - - -
(1,337) (4,882) - -
- ---------------------------------------------------------------------------
(2,646) 686 - -
- ---------------------------------------------------------------------------
(46,115) (77,756) (2,935) 591
- ---------------------------------------------------------------------------
(47,752) (79,902) (3,036) 763
- ---------------------------------------------------------------------------
175,116 255,018 10,171 9,408
- ---------------------------------------------------------------------------
$ 127,364 $ 175,116 $ 7,135 $ 10,171
===========================================================================
$ (8) $ (1) $ - $ 2
===========================================================================
523 2,975 1,203 2,010
250 562 11 33
2,606 - - -
(7,707) (11,321) (1,779) (1,930)
- ---------------------------------------------------------------------------
(4,328) (7,784) (565) 113
- ---------------------------------------------------------------------------
2,445 547 - -
12 6 - -
(2,613) - - -
(134) (485) - -
- ---------------------------------------------------------------------------
(290) 68 - -
- ---------------------------------------------------------------------------
(4,618) (7,716) (565) 113
===========================================================================
- ----------
* Unaudited
(1) On May 10, 2004 and August 2, 2004 the Constellation Funds acquired the
assets of certain Turner Funds and the Pitcairn Funds, respectively, in a
tax-free reorganization. See Note 10 in Notes to Financial Statements for
additional information.
(2) On January 28, 2005, Class II Shares merged into Class I Shares. See Note
10 in Notes to Financial Statements for additional information.
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 65
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS (000)
Constellation HLAM Large Cap Quality Growth Fund
------------------------------------------------
1/1/05 thru year ended year ended
3/31/05* 12/31/04(3) 12/31/03
- -------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (12) $ (35) $ (155)
Net realized gain (loss) from securities sold 892 6,721 4,623
Net change in unrealized appreciation
(depreciation) of investments (1,881) (5,981) 2,747
- -------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (1,001) 705 7,215
- -------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Class II Shares - - -
Realized capital gains
Class II Shares/Investor A Shares - (3,543) (4,992)
Investor B Shares - - (873)
- -------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions - (3,543) (5,865)
- -------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Class II Shares/Investor A Shares
Proceeds from shares issued 24 1,180 1,345
Proceeds from shares issued in lieu of cash distributions - 3,377 4,897
Proceeds from shares issued in connection with conversion into
Class II Shares(4) - 3,415 -
Cost of shares redeemed (2,228) (20,003) (6,591)
- -------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
Class II Shares/Investor A Shares transactions (2,204) (12,031) (349)
- -------------------------------------------------------------------------------------------------------------------------
Investor B Shares
Proceeds from shares issued - 60 150
Proceeds from shares issued in lieu of cash distributions - - 857
Proceeds from shares issued in connection with conversion into
Class II Shares(4) - (3,415) -
Cost of shares redeemed - (2,463) (2,152)
- -------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from
Investor B Shares transactions - (5,818) (1,145)
- -------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital share transactions (2,204) (17,849) (1,494)
- -------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (3,205) (20,687) (144)
- -------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 20,959 41,646 41,790
- -------------------------------------------------------------------------------------------------------------------------
End of period $ 17,754 $ 20,959 $ 41,646
=========================================================================================================================
Undistributed net investment income(distributions in excess of
net investment income/accumulated investment loss) $ (12) $ (35) $ -
=========================================================================================================================
Shares issued and redeemed:
Class II Shares/Investor A Shares
Issued 1 46 55
Issued in lieu of cash distributions - 156 202
Issued in connection with conversion into Class II Shares(4) - 137 -
Redeemed (104) (816) (265)
- -------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class II Shares/Investor A Shares (103) (477) (8)
- -------------------------------------------------------------------------------------------------------------------------
Investor B Shares
Issued - 3 6
Issued in lieu of cash distributions - - 37
Issued in connection with conversion into Class II Shares(4) - (144) -
Redeemed - (106) (89)
- -------------------------------------------------------------------------------------------------------------------------
Decrease in Investor B Shares - (247) (46)
- -------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions (103) (724) (54)
=========================================================================================================================
66 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS
Constellation HLAM
Large Cap Value Fund Constellation Pitcairn Diversified Value Fund
- --------------------------------------------------------------------------------------
6 months ended 4/30/04(1) thru 6 months ended 11/1/03 thru 11/1/02 thru
3/31/05* 9/30/04(2) 3/31/05* 9/30/04(2) 10/31/03
- --------------------------------------------------------------------------------------
$ 3 $ 2 $ 1,011 $ 1,436 $ 1,659
26 - 5,360 7,037 (4,189)
49 (3) 6,425 6,166 29,045
- --------------------------------------------------------------------------------------
78 (1) 12,796 14,639 26,515
- --------------------------------------------------------------------------------------
(3) (2) (1,012) (1,559) (1,782)
- - - - -
- - - - -
- --------------------------------------------------------------------------------------
(3) (2) (1,012) (1,559) (1,782)
- --------------------------------------------------------------------------------------
338 1,517 2,262 7,361 6,443
2 1 71 134 168
- - - - -
(97) (78) (3,590) (12,014) (10,094)
- --------------------------------------------------------------------------------------
243 1,440 (1,257) (4,519) (3,483)
- --------------------------------------------------------------------------------------
- - - - -
- - - - -
- - - - -
- - - - -
- --------------------------------------------------------------------------------------
- - - - -
- --------------------------------------------------------------------------------------
243 1,440 (1,257) (4,519) (3,483)
- --------------------------------------------------------------------------------------
318 1,437 10,527 8,561 21,250
- --------------------------------------------------------------------------------------
1,437 - 152,202 143,641 122,391
- --------------------------------------------------------------------------------------
$ 1,755 $ 1,437 $ 162,729 $ 152,202 $ 143,641
======================================================================================
$ - $ - $ (1) $ - $ 154
======================================================================================
32 154 189 679 720
- - 6 12 19
- - - - -
(9) (8) (300) (1,117) (1,148)
- --------------------------------------------------------------------------------------
23 146 (105) (426) (409)
- --------------------------------------------------------------------------------------
- - - - -
- - - - -
- - - - -
- - - - -
- --------------------------------------------------------------------------------------
- - - - -
- --------------------------------------------------------------------------------------
23 146 (105) (426) (409)
======================================================================================
- ----------
* Unaudited
(1) Commencement of operations
(2) On May 10, 2004 and August 2, 2004 the Constellation Funds acquired the
assets of certain Turner Funds and the Pitcairn Funds, respectively, in a
tax-free reorganization. See Note 10 in Notes to Financial Statements for
additional information.
(3) On November 8, 2004 the Constellation Funds acquired the assets and
liabilities of the Hilliard Lyons Growth Fund, Inc. in a tax-free
reorganization. See Note 10 in Notes to Financial Statements for additional
information. The fund changed its fiscal year end from December 31 to
September 30.
(4) On November 8, 2004, Investor A shares were converted into Class II Shares.
Subsequently, Investor B Shares were fully liquidated and exchanged for
Class II Shares. See Note 10 in Notes to Financial Statements for
additional information.
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 67
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS (000)
Constellation Pitcairn Select Value Fund
-----------------------------------------------
6 months ended 11/1/03 thru 11/1/02 thru
3/31/05* 9/30/04(1) 10/31/03
- ------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ 225 $ 463 $ 422
Net realized gain (loss) from securities sold and securities
sold short 4,568 5,939 (1,877)
Net change in unrealized appreciation
(depreciation) of investments (1,541) (2,360) 13,361
- ------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 3,252 4,042 11,906
- ------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Class II Shares (225) (492) (509)
Realized capital gains
Class II Shares (884) (902) -
- ------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (1,109) (1,394) (509)
- ------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Class II Shares
Proceeds from shares issued 2,396 5,616 6,080
Proceeds from shares issued in lieu of cash distributions 459 529 90
Proceeds from shares issued in connection with Fund
Reorganization(2) - - -
Cost of shares redeemed (2,085) (5,109) (7,889)
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Class II Shares
transactions 770 1,036 (1,719)
- ------------------------------------------------------------------------------------------------------------------------
Total increase in net assets 2,913 3,684 9,678
- ------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 61,817 58,133 48,455
- ------------------------------------------------------------------------------------------------------------------------
End of period $ 64,730 $ 61,817 $ 58,133
========================================================================================================================
Undistributed net investment income
(accumulated net investment loss) $ - $ - $ 29
========================================================================================================================
Shares issued and redeemed:
Class II Shares
Issued 211 519 685
Issued in lieu of cash distributions 40 50 10
Issued in connection with Fund Reorganization(2) - - -
Redeemed (184) (478) (895)
- ------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class II Shares 67 91 (200)
========================================================================================================================
68 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS
Constellation Pitcairn Diversified Growth Fund Constellation Pitcairn Small Cap Fund
- --------------------------------------------------------------------------------------------------------
6 months ended 11/1/03 thru 11/1/02 thru 6 months ended 11/1/03 thru 11/1/02 thru
3/31/05* 9/30/04(1) 10/31/03 3/31/05* 9/30/04(1) 10/31/03
- --------------------------------------------------------------------------------------------------------
$ 568 $ - $ 44 $ (95) $ (216) $ (94)
1,961 644 (11,325) 1,570 13,756 11,111
2,875 1,228 26,682 2,809 (4,005) 14,082
- --------------------------------------------------------------------------------------------------------
5,404 1,872 15,401 4,284 9,535 25,099
- --------------------------------------------------------------------------------------------------------
(526) (46) - - (3) (17)
- - - (732) - -
- --------------------------------------------------------------------------------------------------------
(526) (46) - (732) (3) (17)
- --------------------------------------------------------------------------------------------------------
7,493 13,230 17,450 1,480 3,348 3,024
58 5 - 358 - 2
- - - - - 25,687
(6,944) (6,257) (19,495) (2,454) (7,552) (16,371)
- --------------------------------------------------------------------------------------------------------
607 6,978 (2,045) (616) (4,204) 12,342
- --------------------------------------------------------------------------------------------------------
5,485 8,804 13,356 2,936 5,328 37,424
- --------------------------------------------------------------------------------------------------------
104,528 95,724 82,368 92,848 87,520 50,096
- --------------------------------------------------------------------------------------------------------
$ 110,013 $ 104,528 $ 95,724 $ 95,784 $ 92,848 $ 87,520
========================================================================================================
$ 42 $ - $ 44 $ (95) $ - $ -
========================================================================================================
1,307 2,434 3,773 93 226 280
10 1 - 21 - -
- - - - - 2,603
(1,213) (1,168) (4,232) (153) (509) (1,610)
- --------------------------------------------------------------------------------------------------------
104 1,267 (459) (39) (283) 1,273
========================================================================================================
- ----------
* Unaudited
(1) On May 10, 2004 and August 2, 2004 the Constellation Funds acquired the
assets of certain Turner Funds and the Pitcairn Funds, respectively, in a
tax-free reorganization. See Note 10 in Notes to Financial Statements for
additional information.
(2) See Note 10 in Notes to Financial Statements for additional information.
Amounts designated as "-"are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 69
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS (000)
Constellation Pitcairn Family Heritage(R) Fund
-----------------------------------------------
6 months ended 11/1/03 thru 11/1/02 thru
3/31/05* 9/30/04(1) 10/31/03
- ------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income $ 455 $ 4 $ 39
Net realized gain (loss) from securities sold 3,435 (6,033) (4,941)
Net change in unrealized appreciation
(depreciation) of investments (1,294) 13,076 18,782
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 2,596 7,047 13,880
- ------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Class II Shares (418) (38) -
Realized capital gains
Class II Shares - - -
Return of capital
Class II Shares - (2) -
- ------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (418) (40) -
- ------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Class II Shares
Proceeds from shares issued 3,582 4,564 3,668
Proceeds from shares issued in lieu of cash distributions 52 5 -
Cost of shares redeemed (1,799) (6,963) (10,184)
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Class II Shares
transactions 1,835 (2,394) (6,516)
- ------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 4,013 4,613 7,364
- ------------------------------------------------------------------------------------------------------------------------
Net assets:
- ------------------------------------------------------------------------------------------------------------------------
Beginning of period 78,103 73,490 66,126
- ------------------------------------------------------------------------------------------------------------------------
End of period $ 82,116 $ 78,103 $ 73,490
========================================================================================================================
Undistributed net investment income $ 37 $ - $ 39
========================================================================================================================
Shares issued and redeemed:
Class II Shares
Issued 363 501 490
Issued in lieu of cash distributions 5 1 -
Redeemed (183) (769) (1,388)
- ------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class II Shares 185 (267) (898)
========================================================================================================================
70 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS
Constellation Pitcairn Taxable Bond Fund Constellation Pitcairn Tax-Exempt Bond Fund
- --------------------------------------------------------------------------------------------------------
6 months ended 11/1/03 thru 11/1/02 thru 6 months ended 11/1/03 thru 11/1/02 thru
3/31/05* 9/30/04(1) 10/31/03 3/31/05* 9/30/04(1) 10/31/03
- --------------------------------------------------------------------------------------------------------
$ 986 $ 1,739 $ 1,859 $ 2,214 $ 4,063 $ 4,655
(12) 658 234 631 716 432
(1,226) (473) 852 (2,284) (314) 273
- --------------------------------------------------------------------------------------------------------
(252) 1,924 2,945 561 4,465 5,360
- --------------------------------------------------------------------------------------------------------
(984) (1,725) (1,858) (2,238) (4,075) (4,623)
- - - (716) (432) (294)
- - - - - -
- --------------------------------------------------------------------------------------------------------
(984) (1,725) (1,858) (2,954) (4,507) (4,917)
- --------------------------------------------------------------------------------------------------------
7,863 4,881 10,661 6,410 14,164 11,201
251 301 384 300 222 174
(2,072) (5,574) (8,758) (1,989) (11,934) (16,253)
- --------------------------------------------------------------------------------------------------------
6,042 (392) 2,287 4,721 2,452 (4,878)
- --------------------------------------------------------------------------------------------------------
4,806 (193) 3,374 2,328 2,410 (4,435)
- --------------------------------------------------------------------------------------------------------
43,239 43,432 40,058 113,880 111,470 115,905
- --------------------------------------------------------------------------------------------------------
$ 48,045 $ 43,239 $ 43,432 $ 116,208 $ 113,880 $ 111,470
========================================================================================================
$ - $ - $ - $ 105 $ 129 $ 141
========================================================================================================
732 458 1,003 595 1,309 1,034
24 28 36 28 21 15
(194) (520) (818) (185) (1,121) (1,516)
- --------------------------------------------------------------------------------------------------------
562 (34) 221 438 209 (467)
========================================================================================================
- ----------
* Unaudited
(1) On May 10, 2004 and August 2, 2004 the Constellation Funds acquired the
assets of certain Turner Funds and the Pitcairn Funds, respectively, in a
tax-free reorganization. See Note 10 in Notes to Financial Statements for
additional information.
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 71
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS (000)
Constellation Sands Capital Select Growth Fund
-----------------------------------------------
6 months ended 11/1/03 thru 11/1/02 thru
3/31/05* 9/30/04(1) 10/31/03
- ------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (274) $ (638) $ (294)
Net realized gain (loss) from securities sold (86) 730 (6,078)
Net change in unrealized appreciation
(depreciation) of investments 98 4,953 15,475
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (262) 5,045 9,103
- ------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Realized capital gains
Class I Shares - - -
Class II Shares - - -
- ------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions - - -
- ------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Class I Shares(2)
Proceeds from shares issued 29,163 32,632 -
Proceeds from shares issued in lieu of cash distributions - - -
Cost of shares redeemed (1,998) - -
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
Class I Shares transactions 27,165 32,632 -
- ------------------------------------------------------------------------------------------------------------------------
Class II Shares
Proceeds from shares issued 36,276 54,888 6,476
Proceeds from shares issued in lieu of cash distributions - - -
Cost of shares redeemed (22,701) (33,825) (4,519)
- ------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from
Class II Shares transactions 13,575 21,063 1,957
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
capital share transactions 40,740 53,695 1,957
- ------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 40,478 58,740 11,060
- ------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 102,618 43,878 32,818
- ------------------------------------------------------------------------------------------------------------------------
End of period $ 143,096 $ 102,618 $ 43,878
========================================================================================================================
Undistributed net investment income
(accumulated net investment loss) $ (274) $ - $ -
========================================================================================================================
Shares issued and redeemed:
Class I Shares(2)
Issued 4,093 4,792 -
Issued in lieu of cash distributions - - -
Redeemed (281) - -
- ------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class I Shares 3,812 4,792 -
- ------------------------------------------------------------------------------------------------------------------------
Class II Shares
Issued 5,101 8,136 1,225
Issued in lieu of cash distributions - - -
Redeemed (3,231) (5,007) (882)
- ------------------------------------------------------------------------------------------------------------------------
Increase in Class II Shares 1,870 3,129 343
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions 5,682 7,921 343
========================================================================================================================
72 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS
Constellation TIP Small Cap Constellation TIP Financial Constellation TIP Healthcare
Value Opportunities Fund Services Fund & Biotechnology Fund
- --------------------------------------------------------------------------------------------------------
6 months ended year ended 6 months ended year ended 6 months ended year ended
3/31/05* 9/30/04(1) 3/31/05* 9/30/04(1) 3/31/05* 9/31/04(1)
- --------------------------------------------------------------------------------------------------------
$ 148 $ (39) $ 85 $ (40) $ (270) $ (256)
739 2,070 1,174 1,782 47 1,403
548 1,494 190 256 2,857 (540)
- --------------------------------------------------------------------------------------------------------
1,435 3,525 1,449 1,998 2,634 607
- --------------------------------------------------------------------------------------------------------
- - (1,101) (1,753) - -
(1,990) (223) - - (1,234) (14)
- --------------------------------------------------------------------------------------------------------
(1,990) (223) (1,101) (1,753) (1,234) (14)
- --------------------------------------------------------------------------------------------------------
- - 278 1,131 - -
- - 1,039 1,671 - -
- - (1,025) (5,087) - -
- --------------------------------------------------------------------------------------------------------
- - 292 (2,285) - -
- --------------------------------------------------------------------------------------------------------
23,387 29,439 - - 17,602 32,296
1,947 221 - - 1,219 13
(9,918) (24,169) - - (13,875) (12,384)
- --------------------------------------------------------------------------------------------------------
15,416 5,491 - - 4,946 19,925
- --------------------------------------------------------------------------------------------------------
15,416 5,491 292 (2,285) 4,946 19,925
- --------------------------------------------------------------------------------------------------------
14,861 8,793 640 (2,040) 6,346 20,518
- --------------------------------------------------------------------------------------------------------
14,533 5,740 15,269 17,309 35,371 14,853
- --------------------------------------------------------------------------------------------------------
$ 29,394 $ 14,533 $ 15,909 $ 15,269 $ 41,717 $ 35,371
========================================================================================================
$ 150 $ 2 $ 85 $ - $ (270) $ -
========================================================================================================
- - 18 78 - -
- - 70 122 - -
- - (70) (373) - -
- --------------------------------------------------------------------------------------------------------
- - 18 (173) - -
- --------------------------------------------------------------------------------------------------------
1,398 1,999 - - 1,217 2,265
117 15 - - 84 1
(600) (1,569) - - (972) (907)
- --------------------------------------------------------------------------------------------------------
915 445 - - 329 1,359
- --------------------------------------------------------------------------------------------------------
915 445 18 (173) 329 1,359
========================================================================================================
- ----------
* Unaudited
(1) On May 10, 2004 and August 2, 2004 the Constellation Funds acquired the
assets of certain Turner Funds and the Pitcairn Funds, respectively, in a
tax-free reorganization. See Note 10 in Notes to Financial Statements for
additional information.
(2) Class I Shares were offered beginning on August 27, 2004 for the
Constellation Sands Capital Select Growth Fund.
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 73
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS (000)
Constellation International Equity Fund
-----------------------------------------------
6 months ended 11/1/03 thru 11/1/02 thru
3/31/05** 9/30/04(1) 10/31/03
- ------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income $ 33 $ 861 $ 956
Net realized gain (loss) from securities sold 8,365 12,637 (9,048)
Net realized loss from foreign currency transactions (23) (62) (116)
Net change in unrealized appreciation
(depreciation) of investments 6,923 (2,756) 27,564
Net change in unrealized appreciation (depreciation) on
translation of foreign currency and other assets and
liabilities denominated in foreign currency (23) (15) 29
- ------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 15,275 10,665 19,385
- ------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Class I Shares - - -
Class II Shares (238) (2,621) (459)
Realized capital gains
Class I Shares - - -
- ------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (238) (2,621) (459)
- ------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Class I Shares
Proceeds from shares issued - - -
Proceeds from shares issued in lieu of cash distributions - - -
Cost of shares redeemed - - -
- ------------------------------------------------------------------------------------------------------------------------
Net increase(decrease) in net assets from Class I Shares transactions - - -
- ------------------------------------------------------------------------------------------------------------------------
Class II Shares
Proceeds from shares issued 10,084 29,752 10,740
Proceeds from shares issued in lieu of cash distributions 27 340 62
Cost of shares redeemed (12,732) (28,952) (15,424)
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
Class II Shares transactions (2,621) 1,140 (4,622)
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
capital share transactions (2,621) 1,140 (4,622)
- ------------------------------------------------------------------------------------------------------------------------
Total increase in net assets 12,416 9,184 14,304
- ------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 107,001 97,817 83,513
- ------------------------------------------------------------------------------------------------------------------------
End of period $ 119,417 $ 107,001 $ 97,817
========================================================================================================================
Undistributed net investment income (distributions in
excess of net investment income) $ (719) $ (491) $ 898
========================================================================================================================
Shares issued and redeemed:
Class I Shares
Issued - - -
Issued in lieu of cash distributions - - -
Redeemed - - -
- ------------------------------------------------------------------------------------------------------------------------
Increase in Class I Shares - - -
- ------------------------------------------------------------------------------------------------------------------------
Class II Shares
Issued 1,257 4,201 2,016
Issued in lieu of cash distributions 3 51 12
Redeemed (1,601) (4,219) (2,869)
- ------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class II Shares (341) 33 (841)
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions (341) 33 (841)
========================================================================================================================
74 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS
Constellation Strategic
Value and High Income Fund
- ---------------------------------
6 months ended year ended
3/31/05** 9/30/04(1)
- ---------------------------------
$ 43* $ 116*
5* 524*
- -
(1)* 64*
- -
- ---------------------------------
47 704
- ---------------------------------
(42) (116)
- -
(64) (9)
- ---------------------------------
(106) (125)
- ---------------------------------
734 13,524
105 123
(441) (13,963)
- ---------------------------------
398 (316)
- ---------------------------------
- -
- -
- -
- ---------------------------------
- -
- ---------------------------------
398 (316)
- ---------------------------------
339 263
- ---------------------------------
706 443
- ---------------------------------
$ 1,045 $ 706
=================================
$ 1 $ -
=================================
53 985
8 9
(32) (979)
- ---------------------------------
29 15
- ---------------------------------
- -
- -
- -
- ---------------------------------
- -
- ---------------------------------
29 15
=================================
- ----------
* Dividend income, net realized gain from securities sold and net change in
unrealized appreciation of investment securities are attributable to the
underlying investments in affiliated investment companies.
** Unaudited
(1) On May 10, 2004 and August 2, 2004 the Constellation Funds acquired the
assets of certain Turner Funds and the Pitcairn Funds, respectively, in a
tax-free reorganization. See Note 10 in Notes to Financial Statements for
additional information.
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 75
FINANCIAL STATEMENTS
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
Realized and
Net asset unrealized Dividends Total
value, Net gains Total from from net Distributions dividends
beginning investment (losses) on investment investment from capital and
of period income (loss) investments activities income gains distributions
- ---------------------------------------------------------------------------------------------------------------------------
Constellation Clover Core Value Fund - Class I Shares
- ---------------------------------------------------------------
2005* $ 16.51 0.03 2.27 2.30 (0.03) (1.41) (1.44)
2004(1) $ 14.18 0.06 2.84 2.90 (0.06) (0.51) (0.57)
2003(2) $ 11.71 0.05 2.47 2.52 (0.05) - (0.05)
2002 $ 14.85 0.08 (0.61) (0.53) (0.08) (2.53) (2.61)
2001(3) $ 14.23 0.05 0.59 0.64 (0.02) - (0.02)
2000 $ 15.92 0.05 1.79 1.84 (0.07) (3.46) (3.53)
- ---------------------------------------------------------------
Constellation Clover Small Cap Value Fund - Class I Shares
- ---------------------------------------------------------------
2005* $ 23.76 (0.06) 2.20 2.14 - - -
2004(1) $ 19.23 (0.01) 4.57 4.56 (0.03) - (0.03)
2003 $ 15.20 0.01 4.04 4.05 (0.02)(4) - (0.02)
2002 $ 16.69 0.06 (1.50) (1.44) (0.05) - (0.05)
2001(5) $ 16.36 0.10 1.67 1.77 (0.05) (1.39) (1.44)
2000 $ 13.71 (0.02) 3.91 3.89 - (1.24) (1.24)
- ---------------------------------------------------------------
Constellation Clover Large Cap Value Fund - Class I Shares
- ---------------------------------------------------------------
2005* $ 10.83 0.11 0.82 0.93 (0.11) - (0.11)
2004(1) $ 9.56 0.08 1.27 1.35 (0.08) - (0.08)
2003 $ 7.86 0.08 1.70 1.78 (0.08) - (0.08)
2002 $ 9.89 0.10 (2.03) (1.93) (0.10) - (0.10)
2001(6) $ 12.44 0.11 (1.93) (1.82) (0.11) (0.62) (0.73)
2000 $ 11.43 0.08 2.06 2.14 (0.09) (1.04) (1.13)
- ---------------------------------------------------------------
Constellation Clover Core Fixed Income Fund - Class I Shares
- ---------------------------------------------------------------
2005* $ 10.27 0.21 (0.19) 0.02 (0.21) (0.14) (0.35)
2004(1) $ 10.40 0.43 (0.13) 0.30 (0.43) - (0.43)
2003 $ 10.55 0.45 (0.10) 0.35 (0.47) (0.03) (0.50)
2002 $ 10.20 0.52 0.35 0.87 (0.52) - (0.52)
2001(7) $ 9.62 0.54 0.58 1.12 (0.54) - (0.54)
2000 $ 9.50 0.54 0.12 0.66 (0.54) - (0.54)
- ---------------------------------------------------------------
Constellation Clover Income Plus Fund - Class I Shares
- ---------------------------------------------------------------
2005(8)* $ 10.00 0.02 (0.20) (0.18) (0.03) - (0.03)
- ----------------------------------------------------------------------------------
Constellation Chartwell Ultra Short Duration Fixed Income Fund - Class I Shares
- ----------------------------------------------------------------------------------
2005(9)* $ 10.12 0.14 (0.02) 0.12 (0.14) - (0.14)
2004(1) $ 10.17 0.21 (0.05) 0.16 (0.21) - (0.21)
2003 $ 10.23 0.08(10) 0.06 0.14 (0.19) (0.01) (0.20)
2002 $ 10.22 0.25 0.05 0.30 (0.29) - (0.29)
2001 $ 10.05 0.54 0.15 0.69 (0.52) - (0.52)
2000 $ 10.05 0.61 0.01 0.62 (0.62) - (0.62)
76 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS
Ratio of net
Net assets Ratio of Ratio of total investment
Net asset end net expenses expenses income (loss) Portfolio
value, end Total of period to average to average to average turnover
of period return (000) net assets++ net assets net assets++ rate+++
- ----------------------------------------------------------------------------------------------------------------
$ 17.37 14.01%+ $ 65,817 1.09% 1.09% 0.29% 46%
$ 16.51 20.75% $ 59,714 1.08% 1.08% 0.39% 55%
$ 14.18 21.61% $ 46,673 1.13% 1.13% 0.43% 67%
$ 11.71 (6.37)% $ 43,571 1.10% 1.13% 0.56% 103%
$ 14.85 4.50% $ 41,715 1.10% 1.16% 0.30% 128%
$ 14.23 13.67% $ 45,657 1.10% 1.11% 0.34% 90%
$ 25.90 9.01%+ $ 520,928 1.23% 1.23% (0.40)% 32%
$ 23.76 23.72% $ 540,278 1.22% 1.22% (0.09)% 61%
$ 19.23 26.66% $ 394,946 1.27% 1.27% 0.08% 52%
$ 15.20 (8.69)% $ 464,576 1.26% 1.26% 0.31% 38%
$ 16.69 12.15% $ 178,164 1.28% 1.28% 0.37% 120%
$ 16.36 29.59% $ 36,254 1.40% 1.47% (0.11)% 86%
$ 11.65 8.55%+ $ 6,361 1.22% 1.53% 1.83% 77%
$ 10.83 14.07% $ 6,251 1.25% 1.52% 0.72% 78%
$ 9.56 22.72% $ 4,792 1.15% 1.70% 0.89% 59%
$ 7.86 (19.66)% $ 4,255 0.95% 1.54% 1.06% 70%
$ 9.89 (15.47)% $ 5,152 0.95% 3.56% 1.00% 121%
$ 12.44 19.84% $ 5,163 0.95% 3.98% 0.75% 154%
$ 9.94 0.23%+ $ 27,340 0.80% 0.84% 3.96% 20%
$ 10.27 2.97% $ 32,334 0.80% 0.85% 3.94% 45%
$ 10.40 3.37% $ 43,391 0.78% 0.87% 4.25% 46%
$ 10.55 8.85% $ 42,924 0.75% 0.87% 5.03% 49%
$ 10.20 11.99% $ 34,074 0.75% 1.01% 5.50% 34%
$ 9.62 7.21% $ 31,486 0.75% 1.02% 5.72% 42%
$ 9.79 (1.85)%+ $ 3,639 1.26% 2.89% 3.97% 6%
$ 10.10 1.20%+ $ 340,977 0.53% 0.60% 2.77% 42%
$ 10.12 1.63% $ 391,934 0.46% 0.58% 2.08% 44%
$ 10.17 1.40% $ 462,567 0.41% 0.62% 0.78% 222%
$ 10.23 2.95% $ 470,021 0.36% 0.60% 2.27% 71%
$ 10.22 7.09% $ 93,531 0.36% 0.87% 5.09% 119%
$ 10.05 6.34% $ 30,365 0.36% 1.25% 6.15% 141%
- ----------
* For the six month period ended March 31, 2005 (unaudited). All ratios for
the period have been annualized.
+ Returns are for the period indicated and have not been annualized.
++ Inclusive of directed brokerage arrangements, waivers and reimbursements.
+++ Excludes effect of in-kind transfers and mergers.
(1) Effective May 10, 2004 and August 2, 2004, the Constellation Funds acquired
the assets of certain Turner Funds and the Pitcairn Funds, respectively, in
a tax-free reorganization. In connection with the reorganization, CIMCO
became the investment adviser to the Funds. See Note 10 in Notes to
Financial Statements for additional information.
(2) Effective April 15, 2003, the Board of Trustees of Turner Funds approved a
resolution to change the name of the Turner Midcap Value Fund to the Turner
Core Value Fund and to change its principal investment strategy to a "core"
approach.
(3) On April 30, 2001, shareholders of the Clover Equity Value Fund approved a
change in the adviser from Clover Capital Management, Inc. to Turner
Investment Partners, Inc., with Clover Capital becoming the Fund's
sub-adviser. In connection with the change in adviser, the Fund changed its
name to the Turner Midcap Value Fund effective May 1, 2001.
(4) Includes return of capital of $0.004.
(5) On April 30, 2001, shareholders of the Clover Small Cap Value Fund approved
a change in the adviser from Clover Capital Management, Inc. to Turner
Investment Partners, Inc., with Clover Capital becoming the Fund's
sub-adviser. In connection with the change in adviser, the Fund changed its
name to the Turner Small Cap Value Fund effective May 1, 2001.
(6) On April 30, 2001, shareholders of the Clover Max Cap Value Fund approved a
change in the adviser from Clover Capital Management, Inc. to Turner
Investment Partners, Inc., with Clover Capital becoming the Fund's
sub-adviser. In connection with the change in adviser, the Fund changed its
name to the Turner Large Cap Value Fund effective May 1, 2001.
(7) On April 30, 2001, shareholders of the Clover Fixed Income Fund approved a
change in the adviser from Clover Capital Management, Inc. to Turner
Investment Partners, Inc., with Clover Capital becoming the Fund's
sub-adviser. In connection with the change in adviser, the Fund changed its
name to the Turner Core Fixed Income Fund effective May 1, 2001.
(8) Commenced operations on February 28, 2005. All ratios for the period have
been annualized.
(9) On January 28, 2005, Class II Shares merged into Class I Shares. See Note
10 in Notes to Financial Statements for additional information.
(10) Based on average shares outstanding.
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 77
FINANCIAL STATEMENTS
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
Realized and
Net asset unrealized Dividends Total
value, Net gains Total from from net Distributions dividends
beginning investment (losses) on investment investment from capital and
of period income (loss) investments activities income gains distributions
- ---------------------------------------------------------------------------------------------------------------------------
Constellation Chartwell Short Duration Fixed Income Fund - Class I Shares
- ----------------------------------------------------------------------------
2005(1)* $ 10.04 0.18 (0.11) 0.07 (0.18) - (0.18)
2004(2) $ 10.14 0.28 (0.10) 0.18 (0.28) - (0.28)
2003 $ 10.24 0.17(3) 0.05 0.22 (0.25) (0.07) (0.32)
2002 $ 10.16 0.35 0.12 0.47 (0.39) - (0.39)
2001 $ 9.82 0.57 0.32 0.89 (0.55) - (0.55)
2000 $ 9.84 0.58 (0.01) 0.57 (0.59) - (0.59)
- ----------------------------------------------------------------------------
Constellation Chartwell High Yield Fund - Class I Shares
- ----------------------------------------------------------------------------
2005* $ 5.12 0.17 (0.10) 0.07 (0.17) - (0.17)
2004(2) $ 5.02 0.35 0.10 0.45 (0.35) - (0.35)
2003 $ 4.45 0.37 0.56 0.93 (0.36) - (0.36)
2002(4) $ 5.49 0.64 (1.04) (0.40) (0.64) - (0.64)
2001 $ 8.10 0.78 (2.61) (1.83) (0.78) - (0.78)
2000 $ 8.82 0.79 (0.72) 0.07 (0.79) - (0.79)
- ---------------------------------------------------------------------------------------
Constellation HLAM Large Cap Quality Growth Fund(5) - Investor A Shares/Class II Shares
- ---------------------------------------------------------------------------------------
2005** $ 21.58 (0.01) (1.11) (1.12) - - -
2004 $ 24.73 0.01 1.16 1.17 - (4.32) (4.32)
2003 $ 24.02 (0.07) 4.58 4.51 - (3.80) (3.80)
2002 $ 30.89 (0.08) (6.79) (6.87) - - -
2001 $ 33.89 (0.12) (2.88) (3.00) - - -
2000 $ 33.71 (0.06) 0.24 0.18 - - _
- ----------------------------------------------------------------------------
Constellation HLAM Large Cap Value Fund - Class II Shares
- ----------------------------------------------------------------------------
2005* $ 9.83 0.02 0.53 0.55 (0.02) - (0.02)
2004(6) $ 10.00 0.01 (0.17) (0.16) (0.01) - (0.01)
- ----------------------------------------------------------------------------
Constellation Pitcairn Diversified Value Fund - Class II Shares
- ----------------------------------------------------------------------------
2005* $ 11.22 0.08 0.87 0.95 (0.08) - (0.08)
2004(2)(7) $ 10.26 0.10 0.97 1.07 (0.11) - (0.11)
2003 $ 8.50 0.12 1.77 1.89 (0.13) - (0.13)
2002 $ 9.19 0.10 (0.69) (0.59) (0.10) - (0.10)
2001 $ 10.52 0.09 (1.33) (1.24) (0.09) - (0.09)
2000(8) $ 10.00 0.01(3) 0.51 0.52 - - -
- ----------------------------------------------------------------------------
Constellation Pitcairn Select Value Fund - Class II Shares
- ----------------------------------------------------------------------------
2005* $ 10.87 0.04 0.54 0.58 (0.04) (0.16) (0.20)
2004(2)(7) $ 10.38 0.08 0.66 0.74 (0.09) (0.16) (0.25)
2003 $ 8.36 0.08 2.03 2.11 (0.09) - (0.09)
2002 $ 10.01 0.09 (1.65) (1.56) (0.09) - (0.09)
2001 $ 10.96 0.09 (0.95) (0.86) (0.09) - (0.09)
2000(9) $ 10.00 0.02 0.95 0.97 (0.01) - (0.01)
78 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS
Ratio of net
Net assets Ratio of Ratio of total investment
Net asset end net expenses expenses income (loss) Portfolio
value, end Total of period to average to average to average turnover
of period return (000) net assets++ net assets net assets++ rate+++
- ---------------------------------------------------------------------------------------------------------------
$ 9.93 0.70%+ $ 127,364 0.59% 0.68% 3.23% 26%
$ 10.04 1.84% $ 172,213 0.46% 0.60% 2.49% 84%
$ 10.14 2.15% $ 252,772 0.41% 0.62% 1.65% 200%
$ 10.24 4.69% $ 264,010 0.36% 0.60% 3.27% 178%
$ 10.16 9.35% $ 68,405 0.36% 0.72% 5.65% 104%
$ 9.82 6.00% $ 42,092 0.36% 0.74% 5.94% 136%
$ 5.02 1.31%+ $ 7,135 0.81% 1.33% 6.44% 130%
$ 5.12 9.34% $ 10,171 0.86% 1.14% 6.98% 199%
$ 5.02 21.61% $ 9,408 0.76% 1.16% 7.71% 241%
$ 4.45 (8.05)% $ 9,432 0.68% 1.47% 12.78% 171%
$ 5.49 (23.66)% $ 13,977 0.68% 1.38% 11.18% 86%
$ 8.10 0.56% $ 32,560 0.68% 1.04% 8.94% 76%
$ 20.46 (5.19)%+ $ 17,754 1.25% 1.75% (0.24)% 2%
$ 21.58 4.73% $ 20,959 1.30% 1.97% 0.04% 7%
$ 24.73 19.07% $ 35,806 1.30% 1.82% (0.27)% 28%
$ 24.02 (22.20)% $ 34,963 1.29% 1.46% (0.32)% 19%
$ 30.89 (8.85)% $ 51,402 1.25% 1.44% (0.36)% 19%
$ 33.89 0.53% $ 62,884 1.29% 1.37% (0.17)% 34%
$ 10.36 5.55%+ $ 1,755 1.20% 3.05% 0.32% 11%
$ 9.83 (1.58)%+ $ 1,437 1.20% 3.91% 0.33% 4%
$ 12.09 8.42%+ $ 162,729 1.10% 1.20% 1.26% 25%
$ 11.22 10.50%+ $ 152,202 1.02% 1.14% 1.06% 75%
$ 10.26 22.43% $ 143,641 1.01% 1.14% 1.32% 59%
$ 8.50 (6.43)% $ 122,391 1.02% 1.13% 1.17% 26%
$ 9.19 (11.87)% $ 139,767 1.00% 1.16% 0.92% 48%
$ 10.52 5.24%+ $ 165,823 1.00% 1.22% 0.73% 12%
$ 11.25 5.24%+ $ 64,730 1.15% 1.23% 0.69% 54%
$ 10.87 7.16%+ $ 61,817 1.03% 1.19% 0.84% 111%
$ 10.38 25.48% $ 58,133 1.02% 1.23% 0.86% 104%
$ 8.36 (15.77)% $ 48,455 1.02% 1.19% 0.92% 110%
$ 10.01 (7.90)% $ 60,986 1.00% 1.19% 0.85% 104%
$ 10.96 9.70%+ $ 62,392 1.00% 1.33% 0.95% 27%
- ----------
* For the six month period ended March 31, 2005 (unaudited). All ratios for
the period have been annualized.
** For the three month period ended March 31, 2005 (unaudited). All ratios for
the period have been annualized. The Fund changed its fiscal year end from
December 31 to September 30.
+ Returns are for the period indicated and have not been annualized.
++ Inclusive of directed brokerage arrangements, waivers and reimbursements.
+++ Excludes effect of in-kind transfers and mergers.
(1) On January 28, 2005, Class II Shares merged into Class I Shares. See Note
10 in Notes to Financial Statements for additional information.
(2) Effective May 10, 2004 and August 2, 2004, the Constellation Funds acquired
the assets of certain Turner Funds and the Pitcairn Funds, respectively, in
a tax-free reorganization. In connection with the reorganization, CIMCO
became the investment adviser to the Funds. See Note 10 in Notes to
Financial Statements for additional information.
(3) Based on average shares outstanding.
(4) The information set forth in this table for the periods prior to May 1,
2002, is the financial data of the Penn Capital Strategic High Yield Bond
Fund. Effective May 1, 2002, Turner Investment Partners, Inc. became the
Fund's adviser.
(5) On November 8, 2004, the Constellation Funds acquired the assets and
liabilities of the Hilliard Lyons Growth Fund, Inc., in a tax-free
reorganization. Investor A Shares were converted into Class II Shares.
Subsequently, Investor B Shares were liquidated and exchanged for Class II
Shares. Investor A Shares were the accounting survivor in this transaction,
and as a result, its operating results for the periods prior to November 8,
2004 have been carried forward in these financial highlights. See Note 10
in Notes to Financial Statements for additional information.
(6) Commenced operations on April 30, 2004. All ratios for the period have been
annualized.
(7) For the eleven-month period ended September 30, 2004. All ratios for the
period have been annualized. The Fund changed its fiscal year end from
October 31 to September 30.
(8) Commenced operations on August 4, 2000. All ratios for the period have been
annualized.
(9) Commenced operations on August 11, 2000. All ratios for the period have
been annualized.
Amounts designated as "-"are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 79
FINANCIAL STATEMENTS
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
Realized and
Net asset unrealized Dividends Total
value, Net gains Total from from net Distributions dividends
beginning investment (losses) on investment investment from capital and
of period income (loss) investments activities income gains distributions
- ---------------------------------------------------------------------------------------------------------------------------
Constellation Pitcairn Diversified Growth Fund - Class II Shares
- ---------------------------------------------------------------------
2005* $ 5.36 0.03 0.25 0.28 (0.03) - (0.03)
2004(1)(2) $ 5.25 - 0.11 0.11 -(3) - -
2003 $ 4.40 - 0.85 0.85 - - -
2002 $ 5.66 (0.01) (1.25) (1.26) - - -
2001 $ 9.18 (0.03) (3.49) (3.52) - - -
2000(4) $ 10.00 (0.01) (0.81) (0.82) - - -
- ---------------------------------------------------------------------
Constellation Pitcairn Small Cap Fund - Class II Shares
- ---------------------------------------------------------------------
2005* $ 15.30 (0.02) 0.73 0.71 - (0.12) (0.12)
2004(1)(2) $ 13.78 (0.04) 1.56 1.52 -(3) - -
2003 $ 9.87 -(5) 3.91 3.91 -(3) - -
2002 $ 10.67 0.07 (0.78) (0.71) (0.09) - (0.09)
2001 $ 10.18 0.10 0.49 0.59 (0.10) - (0.10)
2000(7) $ 10.00 0.02 0.16 0.18 - - -
- ---------------------------------------------------------------------
Constellation Pitcairn Family Heritage(R) Fund - Class II Shares
- ---------------------------------------------------------------------
2005* $ 9.38 0.05 0.27 0.32 (0.05) - (0.05)
2004(1)(2) $ 8.55 - 0.83 0.83 -(3)** - -
2003 $ 6.97 - 1.58 1.58 - - -
2002 $ 7.82 (0.01) (0.84) (0.85) - - -
2001 $ 9.87 (0.02) (2.03) (2.05) - - -
2000(4) $ 10.00 (0.01) (0.12) (0.13) - - -
- ---------------------------------------------------------------------
Constellation Pitcairn Taxable Bond Fund - Class II Shares
- ---------------------------------------------------------------------
2005* $ 10.77 0.22 (0.27) (0.05) (0.22) - (0.22)
2004(1)(2) $ 10.73 0.43 0.04 0.47 (0.43) - (0.43)
2003 $ 10.47 0.51 0.26 0.77 (0.51) - (0.51)
2002 $ 10.98 0.56 (0.42) 0.14 (0.56) (0.09) (0.65)
2001 $ 10.09 0.59 0.90 1.49 (0.60) - (0.60)
2000(4) $ 10.00 0.15 0.09 0.24 (0.15) - (0.15)
- ---------------------------------------------------------------------
Constellation Pitcairn Tax-Exempt Bond Fund - Class II Shares
- ---------------------------------------------------------------------
2005* $ 10.78 0.21 (0.14) 0.07 (0.21) (0.07) (0.28)
2004(1)(2) $ 10.77 0.39 0.05 0.44 (0.39) (0.04) (0.43)
2003 $ 10.71 0.44 0.09 0.53 (0.44) (0.03) (0.47)
2002 $ 10.60 0.44 0.12 0.56 (0.44) (0.01) (0.45)
2001 $ 10.04 0.45 0.57 1.02 (0.46) - (0.46)
2000(8) $ 10.00 0.10 0.04 0.14 (0.10) - (0.10)
- ---------------------------------------------------------------------
Constellation Sands Capital Select Growth Fund - Class I Shares
- ---------------------------------------------------------------------
2005* $ 6.80 (0.03) 0.12 0.09 - - -
2004(1)(9) $ 6.74 - 0.06 0.06 - - -
- ---------------------------------------------------------------------
Constellation Sands Capital Select Growth Fund - Class II Shares
- ---------------------------------------------------------------------
2005* $ 6.80 (0.01) 0.10 0.09 - - -
2004(1)(2) $ 6.13 (0.06) 0.73 0.67 - - -
2003 $ 4.81 (0.04)(5) 1.36 1.32 - - -
2002 $ 5.55 (0.04) (0.70) (0.74) - - -
2001 $ 9.02 (0.04) (3.43) (3.47) - - -
2000(8) $ 10.00 (0.01) (0.97) (0.98) - - -
80 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS
Ratio of net
Net assets Ratio of Ratio of total investment
Net asset end net expenses expenses income (loss) Portfolio
value, end Total of period to average to average to average turnover
of period return (000) net assets++ net assets net assets++ rate+++
- ----------------------------------------------------------------------------------------------------------------
$ 5.61 5.14%+ $ 110,013 1.10% 1.21% 1.02% 20%
$ 5.36 2.14%+ $ 104,528 1.02% 1.15% -% 53%
$ 5.25 19.32% $ 95,724 1.01% 1.16% 0.05% 70%
$ 4.40 (22.26)% $ 82,368 1.01% 1.14% (0.15)% 35%
$ 5.66 (38.34)% $ 107,141 1.00% 1.17% (0.44)% 37%
$ 9.18 (8.20)%+ $ 174,960 1.00% 1.22% (0.68)% 6%
$ 15.89 4.61%+ $ 95,784 1.11% 1.21% (0.20)% 37%
$ 15.30 11.03%+ $ 92,848 1.08% 1.15% (0.26)% 72%
$ 13.78 39.65% $ 87,520 1.20%(6) 1.17% (0.04)% 149%
$ 9.87 (6.78)% $ 50,096 1.28%(6) 1.38% 0.58% 93%
$ 10.67 5.80% $ 62,227 1.16%(6) 1.19% 0.93% 96%
$ 10.18 1.80%+ $ 67,651 1.22%(6) 1.33% 1.11% 10%
$ 9.65 3.39%+ $ 82,116 1.30% 1.42% 1.12% 14%
$ 9.38 9.77%+ $ 78,103 1.23% 1.37% 0.01% 19%
$ 8.55 22.67% $ 73,490 1.23% 1.38% 0.06% 12%
$ 6.97 (10.87)% $ 66,126 1.27% 1.36% (0.18)% 24%
$ 7.82 (20.77)% $ 77,295 1.20% 1.37% (0.19)% 37%
$ 9.87 (1.30)%+ $ 98,420 1.20% 1.44% (0.29)% 1%
$ 10.50 (0.51)%+ $ 48,045 0.90% 0.95% 4.08% 13%
$ 10.77 4.42%+ $ 43,239 0.75% 0.94% 4.36% 26%
$ 10.73 7.44% $ 43,432 0.73% 0.97% 4.74% 24%
$ 10.47 1.46% $ 40,058 0.78% 0.98% 5.35% 58%
$ 10.98 15.19% $ 35,562 0.70% 0.99% 5.63% 54%
$ 10.09 2.36%+ $ 37,212 0.70% 1.10% 6.51% 7%
$ 10.57 0.56%+ $ 116,208 0.70% 0.81% 3.81% 19%
$ 10.78 4.20%+ $ 113,880 0.62% 0.75% 3.97% 25%
$ 10.77 4.96% $ 111,470 0.60% 0.74% 4.06% 14%
$ 10.71 5.41% $ 115,905 0.60% 0.74% 4.19% 14%
$ 10.60 10.30% $ 113,071 0.60% 0.77% 4.35% 23%
$ 10.04 1.43%+ $ 99,187 0.60% 0.86% 4.88% 10%
$ 6.89 1.32%+ $ 59,324 1.10% 1.14% (0.33)% 19%
$ 6.80 0.89%+ $ 32,591 1.10% 1.10% (0.79)% 11%
$ 6.89 1.32%+ $ 83,772 1.35% 1.39% (0.49)% 19%
$ 6.80 10.93%+ $ 70,027 1.20% 1.35% (0.95)% 11%
$ 6.13 27.44% $ 43,878 1.17% 1.45% (0.81)% 28%
$ 4.81 (13.33)% $ 32,818 1.16% 1.43% (0.69)% 24%
$ 5.55 (38.44)% $ 39,326 1.15% 1.43% (0.63)% 37%
$ 9.02 (9.80)%+ $ 54,794 1.15% 1.50% (0.61)% 13%
- ----------
* For the six month period ended March 31, 2005 (unaudited). All ratios for
the period have been annualized.
** Includes return capital of $0.0003.
+ Returns are for the period indicated and have not been annualized.
++ Inclusive of directed brokerage arrangements, waivers and reimbursements.
+++ Excludes effect of in-kind transfers and mergers.
(1) Effective May 10, 2004 and August 2, 2004, the Constellation Funds acquired
the assets of certain Turner Funds and the Pitcairn Funds, respectively, in
a tax-free reorganization. In connection with the reorganization, CIMCO
became the investment adviser to the Funds. See Note 10 in Notes to
Financial Statements for additional information.
(2) For the eleven-month period ended September 30, 2004. All ratios have been
annualized. The Fund changed its fiscal year end from October 31 to
September 30.
(3) Amounts represents less than $0.01 per share.
(4) Commenced operations on August 4, 2000. All ratios for the period have been
annualized.
(5) Based on average shares outstanding.
(6) The ratio of expenses to average net assets excluding interest expense for
the periods ended October 31, 2003, October 31, 2002, October 31, 2001 and
October 31, 2000 were 1.10%, 1.19%, 1.00% and 1.00% respectively.
(7) Commenced operations on August 25, 2000. All ratios for the period have
been annualized.
(8) Commenced operations on August 11, 2000. All ratios for the period have
been annualized.
(9) Commenced operations on August 27, 2004. All ratios for the period have
been annualized.
Amounts designated as "-"are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 81
FINANCIAL STATEMENTS
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
Realized and
Net asset unrealized Dividends Total
value, Net gains Total from from net Distributions dividends
beginning investment (losses) on investment investment from capital and
of period income (loss) investments activities income gains distributions
- ---------------------------------------------------------------------------------------------------------------------------
Constellation TIP Small Cap Value Opportunities Fund - Class II Shares
- --------------------------------------------------------------------------
2005* $ 16.21 0.08 1.58 1.66 - (1.64) (1.64)
2004(1) $ 12.72 (0.04) 3.75 3.71 - (0.22) (0.22)
2003 $ 9.27 (0.01) 3.47 3.46 (0.01) - (0.01)
2002(2) $ 10.00 - (0.73) (0.73) - - -
- --------------------------------------------------------------------------
Constellation TIP Financial Services Fund - Class I Shares
- --------------------------------------------------------------------------
2005* $ 13.88 0.08 1.31 1.39 - (1.05) (1.05)
2004(1) $ 13.60 (0.04) 1.69 1.65 - (1.37) (1.37)
2003 $ 10.11 (0.02) 3.62 3.60 - (0.11) (0.11)
2002 $ 16.67 (0.02) (1.12) (1.14) - (5.42) (5.42)
2001(3)(4) $ 19.76 (0.13) (2.96) (3.09) - - -
2001 $ 17.19 (0.14) 3.30 3.16 - (0.59) (0.59)
2000 $ 18.01 (0.17) (0.65) (0.82) - - -
- --------------------------------------------------------------------------
Constellation TIP Healthcare & Biotechnology Fund - Class II Shares
- --------------------------------------------------------------------------
2005* $ 13.79 (0.09) 1.24 1.15 - (0.52) (0.52)
2004(1) $ 12.31 (0.06) 1.55 1.49 - (0.01) (0.01)
2003 $ 9.83 (0.11) 2.59 2.48 - - -
2002 $ 11.15 (0.10) (1.20) (1.30) - (0.02) (0.02)
2001(5) $ 10.00 (0.03) 1.18 1.15 - - -
- --------------------------------------------------------------------------
Constellation International Equity Fund - Class II Shares
- --------------------------------------------------------------------------
2005* $ 7.06 - 1.02 1.02 (0.02) - (0.02)
2004(1)(6) $ 6.47 0.05 0.71 0.76 (0.17) - (0.17)
2003 $ 5.23 0.06 1.21 1.27 (0.03) - (0.03)
2002 $ 6.19 0.04 (0.94) (0.90) (0.06) - (0.06)
2001 $ 9.28 0.01 (3.05) (3.04) (0.02) (0.03) (0.05)
2000(7) $ 10.00 (0.01) (0.71) (0.72) - - -
- --------------------------------------------------------------------------
Constellation Strategic Value and High Income Fund(8) - Class I Shares
- --------------------------------------------------------------------------
2005* $ 14.01 0.60 0.21 0.81 (0.60) (0.98) (1.58)
2004(1) $ 12.58 0.47 1.53 2.00 (0.47) (0.10) (0.57)
2003(9) $ 10.00 0.25 2.58 2.83 (0.25) - (0.25)
82 Constellation Funds 2005 Semiannual Report
FINANCIAL STATEMENTS
Ratio of net
Net assets Ratio of Ratio of total investment
Net asset end net expenses expenses income (loss) Portfolio
value, end Total of period to average to average to average turnover
of period return (000) net assets++ net assets net assets++ rate+++
- ----------------------------------------------------------------------------------------------------------------
$ 16.23 9.96%+ $ 29,394 1.45% 2.31% 1.31% 94%
$ 16.21 29.36% $ 14,533 1.45% 1.82% (0.23)% 272%
$ 12.72 37.29% $ 5,740 1.40% 3.64% (0.26)% 245%
$ 9.27 (7.30)%+ $ 913 1.45% 6.18% 0.08% 142%
$ 14.22 9.64%+ $ 15,909 1.48% 1.59% 1.07% 38%
$ 13.88 12.31% $ 15,269 1.45% 1.52% (0.24)% 103%
$ 13.60 35.95% $ 17,309 1.50% 1.82% (0.22)% 139%
$ 10.11 (12.48)% $ 12,149 1.40% 2.16% (0.40)% 171%
$ 16.67 (15.64)%+ $ 15,554 2.29% 2.33% (1.19)% 52%
$ 19.76 18.20% $ 23,341 2.11% 2.11% (0.59)% 110%
$ 17.19 (4.55)% $ 25,892 2.14% 2.14% (0.91)% 180%
$ 14.42 8.27%+ $ 41,717 1.85% 1.87% (1.48)% 104%
$ 13.79 12.12% $ 35,371 1.61% 1.84% (1.10)% 163%
$ 12.31 25.23% $ 14,853 1.47% 1.63% (1.16)% 274%
$ 9.83 (11.66)% $ 9,288 1.87% 2.33% (1.44)% 202%
$ 11.15 11.50%+ $ 1,192 1.50% 13.70% (0.79)% 95%
$ 8.06 14.39%+ $ 119,417 1.45% 1.58% 0.06% 30%
$ 7.06 11.97%+ $ 107,001 1.35% 1.60% 0.90% 62%
$ 6.47 24.40% $ 97,817 1.30% 1.60% 1.15% 128%
$ 5.23 (14.68)% $ 83,513 1.32% 1.48% 0.63% 69%
$ 6.19 (32.91)% $ 108,777 1.25% 1.45% 0.16% 44%
$ 9.28 (7.20)%+ $ 175,029 1.25% 1.53% (0.37)% 10%
$ 13.24 5.48%+ $ 1,045 0.25% 4.64% 8.93% 48%
$ 14.01 16.04% $ 706 0.25% 1.36% 3.23% 411%
$ 12.58 28.57%+ $ 443 0.25% 21.93% 3.27% 397%
- ----------
* For the six month period ended March 31, 2005 (unaudited). All ratios for
the period have been annualized.
+ Returns are for the period indicated and have not been annualized.
++ Inclusive of directed brokerage arrangements, waivers and reimbursements.
+++ Excludes effect of in-kind transfers and mergers.
(1) Effective May 10, 2004 and August 2, 2004, the Constellation Funds acquired
the assets of certain Turner Funds and the Pitcairn Funds, respectively, in
a tax-free reorganization. In connection with the reorganization, CIMCO
became the investment adviser to the Funds. See Note 10 in Notes to
Financial Statements for additional information.
(2) Commenced operations on March 4, 2002. All ratios for the period have been
annualized.
(3) On November 12, 2001, the Titan Financial Services Fund (the "Titan Fund")
exchanged all of its assets and liabilities for shares of the Turner
Financial Services Fund. The Titan Fund is the accounting survivor in this
transaction, and as a result, the accounting history and operating results
for the periods prior to November 12, 2001 have been carried forward in
these financial highlights.
(4) For the six month period ended October 31, 2001. All ratios for the period
have been annualized. The Titan Fund changed its fiscal year end from
April 30 to October 31.
(5) Commenced operations on February 28, 2001. All ratios for the period have
been annualized.
(6) For the eleven-month period ended September 30, 2004. All ratios have been
annualized. The Fund changed its fiscal year end from October 31 to
September 30.
(7) Commenced operations on August 4, 2000. All ratios for the period have been
annualized.
(8) The Constellation Strategic Value and High Income Fund and its shareholders
indirectly bear a pro rata share of the expenses of the underlying
Constellation Funds. The expense ratios do not include such expenses.
Recognition of net investment income is affected by the timing of the
declaration of dividends by the Constellation Funds in which the
Constellation Strategic Value and High Income Fund invests.
(9) Commenced operations on October 31, 2002. All ratios for the period have
been annualized.
Amounts designated as "-"are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Constellation Funds 2005 Semiannual Report 83
NOTES TO FINANCIAL STATEMENTS (unaudited)
NOTES TO FINANCIAL STATEMENTS
March 31, 2005
1. ORGANIZATION:
The Constellation Funds (the "Trust"), a Delaware statutory trust, is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company with 24 active portfolios. The financial statements included
herein are those of the Constellation Clover Core Value Fund, the Constellation
Clover Small Cap Value Fund, the Constellation Clover Large Cap Value Fund, the
Constellation Clover Core Fixed Income Fund, the Constellation Clover Income
Plus Fund, the Constellation Chartwell Ultra Short Duration Fixed Income Fund,
the Constellation Chartwell Short Duration Fixed Income Fund, the Constellation
Chartwell High Yield Fund, the Constellation HLAM Large Cap Quality Growth Fund,
the Constellation HLAM Large Cap Value Fund, the Constellation Pitcairn
Diversified Value Fund, the Constellation Pitcairn Select Value Fund, the
Constellation Pitcairn Diversified Growth Fund, the Constellation Pitcairn Small
Cap Fund, the Constellation Pitcairn Family Heritage(R) Fund, the Constellation
Pitcairn Taxable Bond Fund, the Constellation Pitcairn Tax-Exempt Bond Fund, the
Constellation Sands Capital Select Growth Fund, the Constellation TIP Small Cap
Value Opportunities Fund, the Constellation TIP Financial Services Fund, the
Constellation TIP Healthcare & Biotechnology Fund, the Constellation
International Equity Fund and the Constellation Strategic Value and High Income
Fund, each a "Fund" and collectively the "Funds".
Each Fund is registered as a diversified portfolio of the Trust with the
exception of the Constellation HLAM Large Cap Quality Growth Fund, the
Constellation Pitcairn Select Value Fund, the Constellation Pitcairn Family
Heritage(R) Fund, the Constellation Pitcairn Taxable Bond Fund, the
Constellation Sands Capital Select Growth Fund, the Constellation TIP Financial
Services Fund and the Constellation TIP Healthcare & Biotechnology Fund, each of
which is non-diversified.
The Funds are registered to offer different classes of shares: Class I Shares,
Class II Shares, or both. The assets of each Fund are segregated, and a
shareholder's interest is limited to the Fund in which shares are held. The
Funds' prospectus provides a description of each Fund's investment objectives,
policies, and strategies along with information on the classes of shares
currently being offered.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the significant accounting policies followed by
the Funds.
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements, and the reported amounts of income and expenses during the
reported period. Actual results could differ from those estimates.
Security Valuation - Securities listed on a securities exchange, market or
automated quotation system for which quotations are readily available (except
for securities traded on NASDAQ ) are valued at the last quoted sale price on
the primary exchange or market (foreign or domestic) on which they are
traded, or, if there is no such reported sale, at the most recent quoted bid
price. For securities traded on NASDAQ, the NASDAQ Official Closing Price
will be used. If available, debt securities are priced based upon valuations
provided by independent, third-party pricing agents. Such values generally
reflect the last reported sales price if the security is actively traded. The
third-party pricing agents may also value debt securities at an evaluated bid
price by employing methodologies that utilize actual market transactions,
broker-supplied valuations, or other methodologies designed to identify the
market value for such securities. Debt obligations with remaining maturities
of sixty days or less may be valued at their amortized cost, which
approximates market value. The prices for foreign securities are reported in
local currency and converted to U.S. dollars using currency exchange rates.
Prices for most securities held in the Funds are provided daily by recognized
independent pricing agents. If a security price cannot be obtained from an
independent, third-party pricing agent, the Funds seek to obtain and use the
average of the bid and ask price from at least two independent brokers.
Securities for which market prices are not "readily available" are valued in
accordance with Fair Value Procedures established by the Funds' Board of
Trustees. The Funds' Fair Value Procedures are implemented through a Fair
Value Committee (the "Committee") designated by the Funds' Board of Trustees.
Some of the more common reasons that may necessitate that a security be
valued using Fair Value
84 Constellation Funds 2005 Semiannual Report
NOTES TO FINANCIAL STATEMENTS (unaudited)
Procedures include: the security's trading has been halted or suspended; the
security has been de-listed from a national exchange; the security's primary
trading market is temporarily closed at a time when under normal conditions
it would be open; the security's primary pricing source is not able or
willing to provide a price or a significant event with respect to a security
has occurred. When a security is valued in accordance with the Fair Value
Procedures, the Committee will determine the value after taking into
consideration relevant information reasonably available to the Committee.
For securities that principally trade on a foreign market or exchange, a
significant gap in time can exist between the time of a particular security's
last trade and the time at which a Fund calculates its net asset value. The
closing prices of such securities may no longer reflect their market value at
the time the Fund calculates its net asset value if an event that could
materially affect the value of those securities (a "Significant Event") has
occurred between the time of the security's last close and the time that the
Fund calculates its net asset value. A Significant Event may relate to a
single issuer or to an entire market sector. If the Adviser or Sub-Adviser of
a Fund becomes aware of a Significant Event that has occurred with respect to
a security or group of securities after the closing of the exchange or market
on which the security or securities principally trade, but before the time at
which the Fund calculates its net asset value, it may request that a
Committee meeting be called. In addition, the Funds' Administrator or
Sub-Administrator monitors price movements among certain selected indices,
securities and/or baskets of securities that may be an indicator that the
closing prices received earlier from foreign exchanges or markets may not
reflect market value at the time the Fund calculates its net asset value. If
price movements in a monitored index or security exceed levels established by
the Adviser, the Administrator or Sub-Administrator notifies the Adviser or
Sub-Adviser for any Fund holding the relevant securities that such limits
have been exceeded. In such event, the Adviser makes the determination
whether a Committee meeting should be called based on the information
provided.
The assets of the Constellation Strategic Value and High Income Fund consist
of investments in underlying affiliated investment companies, which are
valued at their respective net asset value per share.
Security transactions and related income - Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Dividend income is recognized on the ex-dividend date, and interest income is
recognized on the accrual basis subject to the recognition of certain gains
and losses on mortgage-and asset-backed securities. Costs used in determining
realized gains and losses on the sales of investment securities are those of
the specific securities sold during the respective holding period. Purchase
discounts and premiums on securities held by the Funds are accreted and
amortized to maturity using the effective interest method.
Repurchase agreements - Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of the repurchase agreements ensure that the market value
of the collateral, including accrued interest thereon, is not less than 100%.
In the event of default of the counter party and the value of the collateral
declines or if the counter party enters an insolvency proceeding, realization
of the collateral by the Funds may be delayed or limited.
Securities sold short - A Fund may sell a security short by borrowing and
selling the identical security in the secondary market. While a security is
sold short, the Fund recognizes rebate income, incurs interest expense on
certain amounts related to the securities sold short and reflects changes in
the value of the securities sold short as unrealized gains or losses in the
Statement of Operations of the Fund.
Foreign currency translation - The books and records of the Constellation
International Equity Fund are maintained in U.S. dollars and translated into
U.S. dollars on the following basis:
(1) market value of investment securities, assets and liabilities at the
current rate of exchange on the valuation date; and
(2) purchases and sales of investment securities, income and expenses at the
relevant rates of exchange prevailing on the respective dates of such
transactions.
The Constellation International Equity Fund does not isolate that portion of
gains and losses on investments in equity securities that is due to changes
in the foreign exchange rates from that which is due to changes in market
prices of equity securities.
Forward foreign currency contracts - The Constellation
Constellation Funds 2005 Semiannual Report 85
NOTES TO FINANCIAL STATEMENTS (unaudited)
International Equity Fund may enter into forward foreign currency contracts
as hedges against specific transactions. All commitments are
"marked-to-market" daily at the applicable foreign exchange rate, and any
resulting unrealized gains or losses are recorded currently. The
Constellation International Equity Fund realizes gains or losses at the time
forward contracts are extinguished. Unrealized gains or losses on outstanding
positions in forward foreign currency contracts held at the close of the year
are recognized as ordinary income or loss for deferral tax purposes.
Foreign withholding taxes - A Fund may be subject to taxes imposed by
countries in which it invests with respect to its investment in issuers
existing or operating in such countries. Such taxes are generally based on
income earned. A Fund accrues such taxes when the related income is earned.
Expenses - Expenses that are specifically attributed to one of the Funds are
charged to that Fund. Certain other expenses of the Funds are prorated among
the Trust on the basis of relative daily net assets. Other common expenses of
the Trust are allocated among the Funds on the basis of relative daily net
assets. In addition to the Funds' direct expenses, shareholders of the
Constellation Strategic Value and High Income Fund also bear a proportionate
share of the underlying funds' expenses.
Classes - Class specific expenses are borne by that class. Income, non-class
specific expenses and realized/ unrealized gains and losses are allocated to
the respective classes on the basis of the relative daily net assets.
Dividends and distributions - The Constellation TIP Small Cap Value
Opportunities, Constellation TIP Financial Services, Constellation TIP
Healthcare & Biotechnology and Constellation International Equity Funds
declare and distribute net investment income, if any, annually, as a dividend
to shareholders. The Constellation Clover Core Value, Constellation Clover
Small Cap Value, Constellation Clover Large Cap Value, Constellation HLAM
Large Cap Quality Growth, Constellation HLAM Large Cap Value, Constellation
Pitcairn Diversified Value, Constellation Pitcairn Select Value,
Constellation Pitcairn Diversified Growth, Constellation Pitcairn Small Cap,
Constellation Pitcairn Family Heritage(R), Constellation Sands Capital Select
Growth and Constellation Strategic Value and High Income Funds declare and
distribute net investment income, if any, quarterly, as a dividend to
shareholders. The Constellation Clover Core Fixed Income, Constellation
Chartwell Ultra Short Duration Fixed Income, Constellation Chartwell Short
Duration Fixed Income, Constellation Chartwell High Yield, Constellation
Pitcairn Taxable Bond and Constellation Pitcairn Tax-Exempt Bond Funds
declare net investment income daily and distribute it monthly, as a dividend
to shareholders. Any net realized capital gains on sales of securities for
all Funds are distributed to shareholders at least annually.
Redemption fees - Each Fund, except for the Constellation Chartwell Ultra
Short Duration Fixed Income Fund and Constellation Chartwell Short Duration
Fixed Income Fund, may charge a redemption fee up to 2% of redemption
proceeds, which will automatically be paid to the Fund. There were no
redemption fees collected during the period ended March 31, 2005.
3. TRANSACTIONS WITH AFFILIATES:
Certain trustees and officers of the Trust are also officers of Constellation
Investment Management Company, LP ("CIMCO" or the "Adviser"), Constellation
Investment Distribution Company, Inc. ("CIDCO" or the "Distributor") and SEI
Investments Global Funds Services ("SEI"). Such officers are paid no fees by the
Trust for serving as officers and trustees of the Trust. Pursuant to an
exemptive order issued by the Securities and Exchange Commission, the Funds and
the Adviser are permitted to operate in a "Manager-of-Managers" structure.
4. ADMINISTRATION, SHAREHOLDER SERVICING, AND DISTRIBUTION AGREEMENTS:
Effective March 1, 2004, CIMCO began providing administrative services for the
Funds. For its services, CIMCO receives an annual fee of 0.15% of the aggregate
average daily net assets of the Trust up to $2 billion and 0.12% of the
aggregate average daily net assets of the Trust over $2 billion. The fee is then
allocated among the Funds on the basis of relative daily net assets.
Under a separate Sub-Administration Agreement between CIMCO and SEI, SEI
provides sub-administrative services to the Trust. For the period ended March
31, 2005, SEI was paid $533,026 for its services.
86 Constellation Funds 2005 Semiannual Report
NOTES TO FINANCIAL STATEMENTS (unaudited)
CIDCO provides distribution services to the Funds under a Distribution
Agreement.
The Constellation Clover Income Plus, Constellation HLAM Large Cap Quality
Growth, Constellation HLAM Large Cap Value, Constellation Pitcairn Diversified
Value, Constellation Pitcairn Select Value, Constellation Pitcairn Diversified
Growth, Constellation Pitcairn Small Cap, Constellation Pitcairn Family
Heritage(R), Constellation Pitcairn Taxable Bond, Constellation Pitcairn
Tax-Exempt Bond, Constellation Sands Capital Select Growth, Constellation TIP
Small Cap Value Opportunities, Constellation TIP Healthcare & Biotechnology,
Constellation International Equity and Constellation Strategic Value and High
Income Funds have adopted a Distribution and Shareholder Service Plan for their
Class II Shares (the "Class II Plan"). Under the Class II Plan, a Plan adopted
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended, the
Distributor is eligible to receive aggregate fees not exceeding 0.75% of each
Fund's Class II Shares' average daily net assets in return for providing a broad
range of distribution services. Under the Plan, CIMCO currently receives fees
equal to 0.25% of each Fund's Class II Shares' average daily net assets to
provide or procure shareholder services. No fees are currently being paid for
distribution services.
DST Systems, Inc. serves as the transfer agent and dividend disbursing agent for
the Funds under a transfer agency agreement with the Trust. Certain Funds
reimburse CIMCO for amounts paid to third parties that provide sub-transfer
agency and other administrative services to the Funds.
5. INVESTMENT ADVISORY AGREEMENT:
The Trust and CIMCO are parties to an Investment Advisory Agreement dated March
4, 2004 under which CIMCO receives a fee, that is calculated daily and paid
monthly. For its services, CIMCO is entitled to receive base investment advisory
fees at an annualized rate, based on the average daily net assets of each Fund.
CIMCO has agreed to waive all or a portion of its fee and to reimburse expenses
in order to keep certain Fund's "Other Expenses" from exceeding a specified
percentage of the average daily net assets of the Fund on an annualized basis.
"OTHER
ADVISORY EXPENSE" TOTAL
FEES CAP EXPENSES
-------- -------- --------
Constellation Clover Core Value Fund 0.74% 0.50%(1) 1.24%
Constellation Clover Small Cap Value Fund 0.85 0.50(1) 1.35
Constellation Clover Large Cap Value Fund 0.74 0.50(1) 1.24
Constellation Clover Core Fixed Income Fund 0.45 0.35(1) 0.80
Constellation Clover Income Plus Fund 0.80 0.50(2) 1.30
Constellation Chartwell Ultra Short
Duration Fixed Income Fund 0.25 0.43(3)(4) 0.68
Constellation Chartwell Short Duration
Fixed Income Fund 0.25 0.43(3)(4) 0.68
Constellation Chartwell High Yield Fund 0.55 0.05(3)(5) 0.60
Constellation HLAM Large Cap
Quality Growth Fund 0.75 0.50(6) 1.25
Constellation HLAM Large Cap Value Fund 0.70 0.50(3) 1.20
Constellation Pitcairn Diversified Value Fund 0.70 0.40(7) 1.10
Constellation Pitcairn Select Value Fund 0.70 0.45(7) 1.15
Constellation Pitcairn Diversified Growth Fund 0.70 0.40(7) 1.10
Constellation Pitcairn Small Cap Fund 0.70 0.40(7)(8) 1.10
Constellation Pitcairn Family Heritage(R) Fund 0.90 0.40(7) 1.30
Constellation Pitcairn Taxable Bond Fund 0.40 0.50(7) 0.90
Constellation Pitcairn Tax-Exempt Bond Fund 0.30 0.40(7) 0.70
Constellation Sands Capital Select Growth
Fund - Class I Shares 0.85 0.25(7) 1.10
Constellation Sands Capital Select Growth
Fund - Class II Shares 0.85 0.50(7) 1.35
Constellation TIP Small Cap Value
Opportunities Fund 0.95 0.50(3) 1.45
Constellation International Equity Fund 0.95 0.50(7)(8) 1.45
Constellation Strategic Value and High
Income Fund 0.10 0.15(3) 0.25
(1) Represents a voluntary cap.
(2) Represents a contractual cap effective through October 1, 2005.
(3) Represents a contractual cap effective through January 31, 2006.
(4) Effective February 1, 2005, the Board agreed to increase the other expense
cap from 0.24% to 0.43%.
(5) Effective February 1, 2005, the Board agreed to decrease the other expense
cap from 0.35% to 0.05%.
(6) Represents a contractual cap effective through October 1, 2007.
(7) Represents a contractual cap effective through July 31, 2007.
(8) This fee waiver obligation will be reduced by up to 0.01% to the extent
that the Fund earns revenues from securities lending activities. See the
Funds' Prospectus for additional information.
For the Constellation TIP Financial Services and Constellation TIP Healthcare &
Biotechnology Funds, the advisory fees are comprised of a base fee and a
performance adjustment that increases or decreases the total fee depending upon
the performance of the Fund relative to the Fund's performance benchmark. The
Fund's base fee is accrued daily and paid monthly, based on the Fund's average
net assets during the current
Constellation Funds 2005 Semiannual Report 87
NOTES TO FINANCIAL STATEMENTS (unaudited)
month. The performance period consists of the previous 12 months.
The performance adjustment is calculated and paid monthly by comparing the
Fund's performance to that of the Fund's performance benchmark over the
performance period. The annual performance adjustment is multiplied by the
average net assets of the Fund over the entire performance period, which is then
multiplied by a fraction, the numerator of which is the number of days in the
month and the denominator of which is 365 (366 in leap years). The resulting
amount is then added to (in the case of over performance) or subtracted from (in
the case of underperformance) the base fee.
The base advisory fee, annual adjustment rate, benchmark, and over/under
performance relative to the benchmark threshold are as follows:
BASE ANNUAL
ADVISORY ADJUSTMENT BENCHMARK
FEE RATE BENCHMARK THRESHOLD(1)
------------ ------------ ------------ ------------
Constellation
TIP
Financial S&P
Services Financials
Fund 1.00% +/-0.25% Index +/-3.01%
Constellation
TIP
Healthcare & S&P
Biotechnology Healthcare
Fund 1.00 +/-0.25 Index +/-3.01
(1) See the Funds' Prospectus and Statement of Additional Information for more
information regarding the Funds' benchmark performance.
During the period ended March 31, 2005, the Funds' advisory fees were adjusted
in accordance with the policy described above:
BASE NET ADVISER
ADVISER PERFORMANCE FEE BEFORE
FEE ADJUSTMENT WAIVERS
------------ ------------ ------------
Constellation TIP Financial
Services Fund $ 79,920 $ 8,253 $ 88,173
Constellation TIP Healthcare &
Biotechnology Fund 182,398 24,747 207,145
Beginning May 1, 2005 for the remaining Former Turner Funds and the
Constellation HLAM Large Cap Value Fund, August 1, 2005 for the Former Pitcairn
Funds, December 1, 2005 for the Constellation HLAM Large Cap Quality Growth Fund
and January 31, 2006 for the Constellation Clover Income Plus Fund, the Funds'
advisory fees will be subject to adjustment, up or down, based on each Fund's
performance relative to the performance of the Fund's benchmark. See the Funds'
Prospectus and Statement of Additional Information for more information
regarding the Funds' benchmark performance.
CIMCO has entered into investment sub-advisory agreements with the following
parties:
Clover Capital Management, Inc.
Constellation Clover Core Value Fund
Constellation Clover Small Cap Value Fund
Constellation Clover Large Cap Value Fund
Constellation Clover Core Fixed Income Fund
Constellation Clover Income Plus Fund
Chartwell Investment Partners
Constellation Chartwell Ultra Short Duration Fixed Income Fund
Constellation Chartwell Short Duration Fixed Income Fund
Constellation Chartwell High Yield Fund
Hilliard Lyons Asset Management
Constellation HLAM Large Cap Quality Growth Fund
Constellation HLAM Large Cap Value Fund
Pitcairn Investment Management
Constellation Pitcairn Diversified Value Fund
Constellation Pitcairn Select Value Fund
Constellation Pitcairn Diversified Growth Fund
Constellation Pitcairn Small Cap Fund
Constellation Pitcairn Family Heritage(R) Fund
Constellation Pitcairn Taxable Bond Fund
Constellation Pitcairn Tax-Exempt Bond Fund
Sands Capital Management, Inc.
Constellation Sands Capital Select Growth Fund
Turner Investment Partners, Inc.
Constellation TIP Small Cap Value Opportunities Fund
Constellation TIP Financial Services Fund
Constellation TIP Healthcare & Biotechnology Fund
Oechsle International Advisors, LLC
Constellation International Equity Fund
The Boston Company Asset Management, LLC
Constellation International Equity Fund
Brandywine Asset Management, LLC
Constellation International Equity Fund
CIMCO pays sub-advisory fees to each Sub-Adviser from its advisory fee, if any.
Similar to the advisory fee paid to CIMCO, the sub-advisory fee paid to Clover
Capital Management, Inc., Chartwell Investment Partners, Pitcairn Investment
Management, Sands Capital Management, Inc., Brandywine Asset Management, LLC and
Turner Investment Partners, Inc. can increase or decrease depending on a Fund's
performance relative to its benchmark. The sub-advisory fees paid to Oechsle
International Advisors, LLC and The Boston Company Asset Management, LLC are not
subject to a performance adjustment.
88 Constellation Funds 2005 Semiannual Report
NOTES TO FINANCIAL STATEMENTS (unaudited)
6. INVESTMENT TRANSACTIONS:
The cost of security purchases and the proceeds from security sales and
maturities, other than short-term investments, for the period ended March 31,
2005, were as follows:
SALES AND
PURCHASES MATURITIES
(000) (000)
----------- -----------
Constellation Clover Core Value Fund $ 28,923 $ 29,962
Constellation Clover Small Cap Value Fund 175,006 238,521
Constellation Clover Large Cap Value Fund 4,742 4,840
Constellation Clover Income Plus Fund 3,303 187
Constellation Chartwell High Yield Fund 8,230 11,038
Constellation HLAM Large Cap Quality Growth Fund 387 2,734
Constellation HLAM Large Cap Value Fund 413 169
Constellation Pitcairn Diversified Value Fund 40,550 41,597
Constellation Pitcairn Select Value Fund 34,518 34,528
Constellation Pitcairn Diversified Growth Fund 22,758 22,306
Constellation Pitcairn Small Cap Fund 35,502 35,504
Constellation Pitcairn Family Heritage(R)Fund 13,025 11,705
Constellation Pitcairn Taxable Bond Fund 12,953 6,178
Constellation Pitcairn Tax-Exempt Bond Fund 26,461 20,889
Constellation Sands Capital Select Growth Fund 64,110 22,631
Constellation TIP Small Cap Value Opportunities Fund 34,737 20,657
Constellation TIP Financial Services Fund 5,856 6,709
Constellation TIP Healthcare & Biotechnology Fund 37,101 36,266
Constellation International Equity Fund 33,596 38,897
Constellation Strategic Value and High Income Fund 786 445
SALES AND
MATURITIES
PURCHASES (000) (000)
------------------- -------------------
GOV'T OTHER GOV'T OTHER
-------- -------- -------- --------
Constellation Clover Core
Fixed Income Fund $ 3,276 $ 2,431 $ 5,060 $ 4,647
Constellation Chartwell Ultra Short
Duration Fixed Income Fund 122,477 - 91,019 -
Constellation Chartwell Short Duration
Fixed Income Fund 33,348 - 39,358 11,185
7. FEDERAL TAX POLICIES AND INFORMATION:
Each of the Funds is classified as a separate taxable entity for Federal income
tax purposes. Each of the Funds intends to continue to qualify as a separate
"regulated investment company" under the Internal Revenue Code and make the
requisite distributions to shareholders that will be sufficient to relieve it
from Federal income tax and Federal excise tax. Therefore, no Federal tax
provision is required. To the extent that distributions from net investment
income and net realized capital gains exceed amounts reported in the financial
statements, such amounts are reported separately.
The amounts of distributions from net investment income and net realized capital
gains are determined in accordance with Federal income tax regulations, which
may differ from those amounts determined under accounting principles generally
accepted in the United States of America. These book/tax differences are either
temporary or permanent in nature. The character of distributions made during the
year from net investment income or net realized gains, and the timing of
distributions where the fiscal year in which the amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund. To the extent these differences are permanent, adjustments are made to
the appropriate equity accounts in the period that the differences arise.
Constellation Funds 2005 Semiannual Report 89
NOTES TO FINANCIAL STATEMENTS (unaudited)
The tax character of dividends and distibutions declared during the periods
ended September 30, 2004 and September 30, 2003 (unless otherwise noted) were as
follows (000):
ORDINARY LONG-TERM TAX EXEMPT RETURN OF
INCOME CAPITAL GAIN INCOME CAPITAL TOTAL
----------- ------------ ---------- ----------- -----------
Constellation Clover Core Value Fund
2004 $ 468 $ 1,442 $ - $ - $ 1,910
2003 189 - - - 189
Constellation Clover Small Cap Value Fund
2004 652 - - - 652
2003 315 - - 109 424
Constellation Clover Large Cap Value Fund
2004 42 - - - 42
2003 39 - - - 39
Constellation Clover Core Fixed Income Fund
2004 1,530 - - - 1,530
2003 1,934 108 - - 2,042
Constellation Chartwell Ultra Short Duration Fixed Income
Fund
2004 8,779 - - - 8,779
2003 10,584 483 - - 11,067
Constellation Chartwell Short Duration Fixed Income Fund
2004 5,810 - - - 5,810
2003 8,475 563 - - 9,038
Constellation Chartwell High Yield Fund
2004 753 - - - 753
2003 709 - - - 709
Constellation HLAM Large Cap Quality Growth Fund(1)
2004 - 3,543 - - 3,543
2003 4 5,861 - - 5,865
Constellation HLAM Large Cap Value Fund
2004(2) 2 - - - 2
Constellation Pitcairn Diversified Value Fund
2004(3) 1,559 - - - 1,559
2003(4) 1,782 - - - 1,782
2002(4) 1,613 - - - 1,613
Constellation Pitcairn Select Value Fund
2004(3) 492 902 - - 1,394
2003(4) 509 - - - 509
2002(4) 516 - - - 516
Constellation Pitcairn Diversified Growth Fund
2004(3) 46 - - - 46
2003(4) - - - - -
2002(4) - - - - -
Constellation Pitcairn Small Cap Fund
2004(3) - 3 - - 3
2003(4) 17 - - - 17
2002(4) 494 - - - 494
Constellation Pitcairn Family Heritage(R) Fund
2004(3) 38 - - 2 40
2003(4) - - - - -
2002(4) - - - - -
Constellation Pitcairn Taxable Bond Fund
2004(3) 1,725 - - - 1,725
2003(4) 1,858 - - - 1,858
2002(4) 2,275 - - - 2,275
Constellation Pitcairn Tax-Exempt Bond Fund
2004(3) 41 432 4,034 - 4,507
2003(4) 12 294 4,611 - 4,917
2002(4) 50 11 4,690 - 4,751
Constellation TIP Small Cap Value Opportunities Fund
2004 223 - - - 223
2003 1 - - - 1
Constellation TIP Financial Services Fund
2004 1,642 111 - - 1,753
2003 - 136 - - 136
Constellation TIP Healthcare & Biotechnology Fund
2004 5 9 - - 14
2003 - - - - -
Constellation International Equity Fund
2004(3) 2,621 - - - 2,621
2003(4) 459 - - - 459
2002(4) 1,095 - - - 1,095
Constellation Strategic Value and High Income Fund
2004 125 - - - 125
2003(5) 4 - - - 4
(1) For the year ended December 31, 2003 and 2004.
(2) Commenced operations April 30, 2004.
(3) From the period November 1, 2003 through September 30, 2004. The Fund
changed its fiscal year end from October 31 to September 30.
(4) For the year ended October 31, 2002 and 2003.
(5) Commenced operations October 31, 2002.
90 Constellation Funds 2005 Semiannual Report
NOTES TO FINANCIAL STATEMENTS (unaudited)
As of September 30, 2004, the components of distributable earnings (accumulated
losses)on a tax basis were are follows (000):
CAPITAL
ORDINARY LONG-TERM TAX-EXEMPT LOSS
INCOME CAPITAL GAIN INCOME CARRYFORWARD
-------------- -------------- -------------- --------------
Constellation Clover Core
Value Fund $ 51 $ 4,076 $ - $ -
Constellation Clover Small
Cap Value Fund - - - (11,559)
Constellation Clover Large
Cap Value Fund 13 - - (484)
Constellation Clover Core
Fixed Income Fund 110 394 - -
Constellation Chartwell Ultra Short
Duration Fixed Income Fund 754 - - (6,719)
Constellation Chartwell Short
Duration Fixed Income Fund 453 - - (1,994)
Constellation Chartwell High
Yield Fund 54 - - (15,154)
Constellation HLAM Large
Cap Quality Growth Fund(1) - 956 - -
Constellation HLAM Large
Cap Value Fund 1 - - -
Constellation Pitcairn
Diversified Value Fund 330 - - (172)
Constellation Pitcairn Select
Value Fund 103 306 - -
Constellation Pitcairn
Diversified Growth Fund - - - (70,034)
Constellation Pitcairn Small
Cap Fund - 731 - -
Constellation Pitcairn Family
Heritage(R) Fund - - - (13,032)
Constellation Pitcairn
Taxable Bond Fund 145 - - (491)
Constellation Pitcairn
Tax-Exempt Bond Fund - 716 367 -
Constellation Sands Capital
Select Growth Fund - - - (26,265)
Constellation TIP Small Cap
Value Opportunities Fund 1,597 279 - -
Constellation TIP Financial
Services Fund 726 330 - -
Constellation TIP Healthcare
& Biotechnology Fund 163 932 - -
Constellation International
Equity Fund 211 - - (37,045)
Constellation Strategic Value and
High Income Fund 223 2 - -
TOTAL
DISTRIBUTABLE
POST- UNREALIZED OTHER EARNINGS
OCTOBER APPRECIATION TEMPORARY (ACCUMULATED)
LOSSES (DEPRECIATION) DIFFERENCES (LOSSES)
-------------- -------------- -------------- --------------
Constellation Clover Core
Value Fund $ - $ 10,671 $ (45) $ 14,753
Constellation Clover Small
Cap Value Fund - 64,985 - 53,426
Constellation Clover Large
Cap Value Fund - 272 (13) (212)
Constellation Clover Core
Fixed Income Fund - 1,024 (108) 1,420
Constellation Chartwell Ultra Short
Duration Fixed Income Fund (229) 2,107 (757) (4,844)
Constellation Chartwell Short
Duration Fixed Income Fund (112) 505 (454) (1,602)
Constellation Chartwell High
Yield Fund - 85 (53) (15,068)
Constellation HLAM Large
Cap Quality Growth Fund(1) - 7,944 - 8,900
Constellation HLAM Large
Cap Value Fund - (3) (1) (3)
Constellation Pitcairn
Diversified Value Fund - 17,457 (330) 17,285
Constellation Pitcairn Select
Value Fund - 8,058 (103) 8,364
Constellation Pitcairn
Diversified Growth Fund (2,107) (8,858) - (80,999)
Constellation Pitcairn Small
Cap Fund - 15,451 - 16,182
Constellation Pitcairn Family
Heritage(R) Fund (6,010) 13,908 - (5,134)
Constellation Pitcairn
Taxable Bond Fund - 2,409 (145) 1,918
Constellation Pitcairn
Tax-Exempt Bond Fund - 8,333 (350) 9,066
Constellation Sands Capital
Select Growth Fund - 8,637 - (17,628)
Constellation TIP Small Cap
Value Opportunities Fund - 1,834 - 3,710
Constellation TIP Financial
Services Fund - 1,881 - 2,937
Constellation TIP Healthcare
& Biotechnology Fund - 1,128 - 2,223
Constellation International
Equity Fund (61) 11,424 (1) (25,472)
Constellation Strategic Value and
High Income Fund - 86 (5) 306
(1) For the year ended December 31, 2004
Post-October losses represent losses realized on investment transactions from
November 1, 2003 through September 30, 2004 that, in accordance with Federal
income tax regulations, a Fund may elect to defer and treat as having arisen in
the following year. For Federal income tax purposes, capital loss carryforwards
may be carried forward and applied against future capital gains.
Constellation Funds 2005 Semiannual Report 91
NOTES TO FINANCIAL STATEMENTS (unaudited)
As of September 30, 2004, the Funds had capital loss carryforwards available to
offset future realized capital gains through the indicated expiration dates
(000):
EXPIRING SEPTEMBER 30,
---------------------------------------------------------------------------------
2007 2008 2009 2010 2011 2012 Total
--------- --------- --------- --------- --------- --------- ---------
Constellation Clover Small Cap Value Fund $ - $ - $ - $ - $ 11,559 $ - $ 11,559
Constellation Clover Large Cap Value Fund - - - 196 288 - 484
Constellation Chartwell Ultra Short Duration
Fixed Income Fund - - - - - 6,719 6,719
Constellation Chartwell Short Duration
Fixed Income Fund - - - - - 1,994 1,994
Constellation Chartwell High Yield Fund 565 2,916 2,590 4,590 4,493 - 15,154
Constellation Pitcairn Diversified Value Fund - - - - 172 - 172
Constellation Pitcairn Diversified Growth Fund - - 23,304 35,399 11,331 - 70,034
Constellation Pitcairn Family Heritage(R) Fund - 1,614 3,678 2,799 4,941 - 13,032
Constellation Pitcairn Taxable Bond Fund - - - 491 - - 491
Constellation Sands Capital Select Growth Fund - - 8,179 12,366 5,720 - 26,265
Constellation International Equity Fund - - 4,428 24,091 8,526 - 37,045
During the year ended September 30, 2004, the following Funds utilized capital
loss carryforwards to offset capital gains:
FUND AMOUNT
- ------------------------------------------------- --------------
Constellation Clover Small Cap Value Fund $ 42,082,156
Constellation Clover Large Cap Value Fund 188,939
Constellation Clover Core Fixed Income Fund 5,536
Constellation Chartwell High Yield Fund 576,132
Constellation Pitcairn Diversified Value Fund 7,072,106
Constellation Pitcairn Select Value Fund 4,731,191
Constellation Pitcairn Diversified Growth Fund 2,785,056
Constellation Pitcairn Small Cap Fund 12,891,786
Constellation Pitcairn Taxable Bond Fund 672,266
Constellation Sands Capital Select Growth Fund 1,024,064
Constellation TIP Healthcare & Biotechnology Fund 94,064
Constellation International Equity Fund 11,912,492
At March 31, 2005, the total cost of securities for Federal income tax purposes
and the aggregate gross unrealized appreciation and depreciation for the
securities held by the Funds were as follows (000):
NET UNREALIZED
FEDERAL UNREALIZED UNREALIZED APPRECIATION
TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ------------ ------------ --------------
Constellation Clover Core Value Fund $ 59,516 $ 12,849 $ (437) $ 12,412
Constellation Clover Small Cap Value Fund 474,872 95,866 (13,020) 82,846
Constellation Clover Large Cap Value Fund 6,485 691 (179) 512
Constellation Clover Core Fixed Income Fund 26,674 496 (266) 230
Constellation Clover Income Plus Fund 3,986 20 (79) (59)
Constellation Chartwell Ultra Short Duration Fixed Income Fund 339,154 2,056 (696) 1,360
Constellation Chartwell Short Duration Fixed Income Fund 137,480 523 (1,031) (508)
Constellation Chartwell High Yield Fund 7,797 17 (241) (224)
Constellation HLAM Large Cap Quality Growth Fund 14,446 6,579 (516) 6,063
Constellation HLAM Large Cap Value Fund 1,921 108 (62) 46
Constellation Pitcairn Diversified Value Fund 149,027 25,868 (1,981) 23,887
Constellation Pitcairn Select Value Fund 60,090 7,701 (1,184) 6,517
Constellation Pitcairn Diversified Growth Fund 134,249 11,764 (17,679) (5,915)
Constellation Pitcairn Small Cap Fund 83,391 19,968 (1,708) 18,260
Constellation Pitcairn Family Heritage(R) Fund 78,091 20,505 (7,890) 12,615
Constellation Pitcairn Taxable Bond Fund 51,113 1,659 (444) 1,215
Constellation Pitcairn Tax-Exempt Bond Fund 109,151 6,428 (384) 6,044
Constellation Sands Capital Select Growth Fund 171,820 13,568 (6,640) 6,928
Constellation TIP Small Cap Value Opportunities Fund 28,831 2,827 (543) 2,284
Constellation TIP Financial Services Fund 14,374 2,443 (305) 2,138
Constellation TIP Healthcare & Biotechnology Fund 44,308 4,714 (707) 4,007
Constellation International Equity Fund 97,557 21,721 (1,396) 20,325
Constellation Strategic Value and High Income Fund 965 82 - 82
92 Constellation Funds 2005 Semiannual Report
NOTES TO FINANCIAL STATEMENTS (unaudited)
8. CONCENTRATIONS/RISKS:
Certain Funds invest a high percentage of their assets in specific sectors of
the market in order to achieve a potentially greater investment return. As a
result, the Funds may be more susceptible to economic, political, and regulatory
developments in a particular sector of the market, positive or negative, and may
experience increased volatility on the Fund's net asset value and magnified
effect on the total return.
The Constellation International Equity Fund invests in securities of foreign
issuers in various countries. These investments may involve certain
considerations and risks not typically associated with investments in the United
States of America, as a result of, among other factors, the possibility of
future political and economic developments and the level of governmental
supervision and regulation of securities markets in the respective countries.
The Funds enter into contracts that contain a variety of indemnifications. The
Funds' maximum exposure under these arrangements is unknown. However, the Funds
have not had prior claims or losses pursuant to these contracts and expect the
risk of loss to be remote.
9. LOANS OF PORTFOLIO SECURITIES:
Effective February 1, 2005, the Funds may lend securities in their portfolio
pursuant to a securities lending agreement ("Lending Agreement") with PFPC, Inc.
Unless otherwise agreed, security loans made pursuant to the Lending Agreement
are required at all times to be secured by collateral equal to at least 100% of
the market value of the securities loaned. Cash collateral received is invested
pursuant to the terms approved by the Board. All such investments are made at
the risk of the Funds and, as such, the Funds are liable for investment losses.
The Funds are receiving an annual fee for their participation in the Lending
Agreement which is allocated among participating Funds based on estimated
lending activity.
In the event of bankruptcy of the borrower, realization/retention of the
collateral may be subject to legal proceedings. Cash collateral received in
connection with securities lending is invested in BlackRock Institutional Money
Market Trust. The Funds bear the risk of incurring a loss from the investment of
cash collateral due to either credit or market factors.
Prior to February 1, 2005, the Funds were parties to a separate securities
lending agreement. The borrower paid the lending Fund income accrued thereon,
and the Fund invested cash collateral in permissible securities, thereby earning
additional income.
10. FUND REORGANIZATION:
The Trustees of the Pitcairn Small Cap Fund unanimously approved a Plan of
Reorganization which resulted in the transfer of all the assets and liabilities
of the Pitcairn Small Cap Fund to the Pitcairn Small Cap Core Fund in exchange
for shares of the Pitcairn Small Cap Core Fund after the close of business of
October 31, 2002. The shareholders of the Pitcairn Small Cap Fund exchanged
5,536,781 shares and received 2,602,903 shares of the Pitcairn Small Cap Core
Fund with an aggregate value of $25,687,425.
The value of the Pitcairn Small Cap Fund on October 31, 2002 was $25,687,425
which included $4,381,612 in unrealized depreciation and $23,046,960 in
accumulated net realized losses. Upon the business combination of the Funds
after the close of business on October 31, 2002, the value of the Pitcairn Small
Cap Core Fund was $75,783,828. The Pitcairn Small Cap Core Fund changed its name
to the Pitcairn Small Cap Fund.
The shareholders of the Turner Large Cap Value Fund, Turner Core Value Fund,
Turner Small Cap Value Fund, Turner Core Fixed Income Fund, Turner Ultra Short
Duration Fixed Income Fund, Turner Short Duration Fixed Income Fund, Turner High
Yield Fund, Turner Small Cap Value Opportunities Fund, Turner Financial Services
Fund, Turner Healthcare & Biotechnology Fund, Turner Tax Managed U.S. Equity
Fund and Turner Strategic Value and High Income Fund, (each a "Turner Fund" and
collectively the "Turner Funds") voted to reorganize each Turner Fund into a
substantially similar series (each a "Constellation Fund" and collectively the
"Constellation Funds") of Constellation Funds (the "Constellation Trust") in a
tax-free reorganization effective May 10, 2004. Each shareholder received a
number of shares of a Constellation Fund equal in dollar value and in the number
of shares of each Turner Fund as of May 7, 2004. Each Constellation Fund has the
same investment objectives and policies, and substantially the same risks,
policies, restrictions and limitations, as a Turner Fund.
The shareholders of the Pitcairn Diversified Value Fund, Pitcairn Select Value
Fund, Pitcairn Diversified Growth Fund, Pitcairn Small Cap Fund, Pitcairn Family
Heritage(R) Fund, Pitcairn Taxable Bond Fund, Pitcairn Tax-Exempt Bond Fund,
Pitcairn Select Growth Fund
Constellation Funds 2005 Semiannual Report 93
NOTES TO FINANCIAL STATEMENTS (unaudited)
and Pitcairn International Equity Fund, (each a "Pitcairn Fund" and collectively
the "Pitcairn Funds") voted to reorganize each Pitcairn Fund into a
substantially similar series of Constellation Funds in a tax-free reorganization
effective August 2, 2004. Each shareholder received a number of shares of a
Constellation Fund equal in dollar value and in the number of shares of each
Pitcairn Fund as of July 30, 2004. Each Constellation Fund has the same
investment objectives and policies, and substantially the same risks, policies,
restrictions and limitations, as a Pitcairn Fund.
Accordingly, following completion of the reorganizations, shareholders of each
Turner Fund and each Pitcairn Fund owned shares of the Corresponding Acquiring
Fund as set forth in the chart below:
TURNER/PITCAIRN FUND CORRESPONDING AQUIRING FUND
- --------------------------------------------- --------------------------------------------------------------
Turner Large Cap Value Fund Constellation Clover Large Cap Value Fund
Turner Core Value Fund Constellation Clover Core Value Fund
Turner Small Cap Value Fund Constellation Clover Small Cap Value Fund
Turner Core Fixed Income Fund Constellation Clover Core Fixed Income Fund
Turner Ultra Short Duration Fixed Income Fund Constellation Chartwell Ultra Short Duration Fixed Income Fund
Turner Short Duration Fixed Income Fund Constellation Chartwell Short Duration Fixed Income Fund
Turner High Yield Fund Constellation Chartwell High Yield Fund
Pitcairn Diversified Value Fund Constellation Pitcairn Diversified Value Fund
Pitcairn Select Value Fund Constellation Pitcairn Select Value Fund
Pitcairn Diversified Growth Fund Constellation Pitcairn Diversified Growth Fund
Pitcairn Small Cap Fund Constellation Pitcairn Small Cap Fund
Pitcairn Family Heritage Fund Constellation Pitcairn Family Heritage(R) Fund
Pitcairn Taxable Bond Fund Constellation Pitcairn Taxable Bond Fund
Pitcairn Tax-Exempt Bond Fund Constellation Pitcairn Tax-Exempt Bond Fund
Pitcairn Select Growth Fund Constellation Sands Capital Select Growth Fund
Turner Small Cap Value Opportunities Fund Constellation TIP Small Cap Value Opportunities Fund
Turner Financial Services Fund Constellation TIP Financial Services Fund
Turner Healthcare & Biotechnology Fund Constellation TIP Healthcare & Biotechnology Fund
Pitcairn International Equity Fund Constellation International Equity Fund
Turner Strategic Value and High Income Fund Constellation Strategic Value and High Income Fund
The shareholders of the Hilliard Lyons Growth Fund, Inc. approved the
reorganization of the Hilliard Lyons Growth Fund, Inc. with and into the
Constellation HLAM Large Cap Quality Growth Fund, a newly-formed series of the
Constellation Funds in a tax-free reorganization effective November 8, 2004.
Each shareholder of the Hilliard Lyons Growth Fund, Inc. Investor A Shares
received a number of shares of the Constellation HLAM Large Cap Quality Growth
Fund equal in dollar value and in number of shares of the Hilliard Lyons Growth
Fund, Inc. as of November 5, 2004. Each shareholder of the Hilliard Lyons Growth
Fund, Inc. Investor B Shares received a number of shares of the Constellation
HLAM Large Cap Quality Growth Fund equal in dollar value to Hilliard Lyons
Growth Fund, Inc. The Constellation HLAM Large Cap Quality Growth Fund has the
same investment objective and policies, and substantially the same risks,
policies, restrictions and limitations, as the Hilliard Lyons Growth Fund, Inc.
Prior to November 8, 2004, the Fund offered Investor A and Investor B Shares. On
November 8, 2004, the Fund converted the Investor A Shares into Class II Shares.
Subsequently, the Investor B Shares were fully liquidated and exchanged for
Class II Shares. Investor A Shares were the accounting survivor in this
transaction.
Prior to January 28, 2005, the Constellation Chartwell Ultra Short Duration
Fixed Income and Constellation Chartwell Short Duration Fixed Income Funds
offered Class I and Class II Shares. On January 28, 2005, the Funds merged Class
II Shares into Class I Shares.
94 Constellation Funds 2005 Semiannual Report
NOTES TO FINANCIAL STATEMENTS (unaudited)
11. SUBSEQUENT EVENT
Effective April 15, 2005, the Constellation TIP Midcap Core Portfolio, a series
of Constellation Institutional Portfolios, was reorganized as a seperate, newly
organized series of the Trust, the Constellation TIP Mid Cap Fund.
Constellation Funds 2005 Semiannual Report 95
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (unaudited)
On February 25, 2005, the Board of Trustees held a meeting to decide, among
other things, whether to hire CIMCO to serve as the investment adviser to the
Constellation TIP Mid Cap Fund and whether to approve a proposed sub-advisory
agreement between CIMCO and Turner Investment Partners (the "Sub-Adviser"),
relating to the Fund. These approvals were proposed in connection with the
reorganization of the CIP Midcap Core Portfolio, a series of Constellation
Institutional Portfolios (the "CIP Portfolio") into the TIP Mid Cap Fund.
The Board requested and reviewed a wide variety of information from CIMCO and
the Sub-Adviser in advance of the meeting and the Trustees used this information
to help decide whether to approve the proposed advisory and sub-advisory
agreements. Specifically, prior to the meeting, the Board received written
materials from CIMCO and the Sub-Adviser about their (a) nature, quality and
extent of investment management and other services; (b) investment management
personnel; (c) operations and financial condition; (d) brokerage practices
(including any soft dollar arrangements) and other investment strategies; (e)
the level of the advisory and sub-advisory fees the Fund is charged; (f) the
Fund's overall fees and operating expenses compared with similar mutual funds;
(g) CIMCO's and the Sub-Adviser's compliance systems; (h) CIMCO's and the
Sub-Adviser's policies on and compliance procedures for personal securities
transactions; and (i) CIMCO's and the Sub-Adviser's reputation, expertise and
resources. The Board reviewed the comparative fund data from Morningstar
provided by CIMCO, and the Trustees discussed in depth the comparative expense
information for the peer group in which the Fund is classified. The Trustees did
not consider information related to the level of CIMCO's and the Sub-Adviser's
profitability from their investment management-related operations and the CIP
Portfolio's performance compared with similar funds because the Fund is
continuing the operations of an existing fund post-reorganization.
With regard to factors (a), (b), (c), (d), (h) and (i), the Board determined
that there would be no material changes in the services provided by CIMCO and
the Sub-Adviser to the Fund after its reorganization from Constellation
Institutional Portfolios. Moreover, with respect to factors (e) and (f), in
light of the information provided to the Board, the Trustees considered the
different fee structure of the Fund as compared to the CIP Portfolio, including
CIMCO's contractual fee waiver/expense reimbursement agreement, the introduction
of a performance-based adjustment to the advisory and sub-advisory fees after
one year and comparisons of the fees paid to CIMCO and the Sub-Adviser by other
similar mutual funds. The Trustees concluded that the Fund's advisory and
sub-advisory fees and expense ratios are reasonable as compared to those of
other funds. With regard to factor (g), CIMCO's and the Sub-Adviser's compliance
systems, the Board determined that each has the requisite staffing to address
compliance and new fund regulations.
At the meeting, representatives from CIMCO presented additional information to
the Trustees to help the Trustees evaluate CIMCO's and the Sub-Adviser's
advisory and sub-advisory fees and other aspects of the respective agreements.
The Trustees discussed the materials that they received before the meeting and
all other information received at the meeting, and deliberated on the proposed
advisory and sub-advisory agreements in light of this information. In its
deliberations, the Trustees did not identify any single piece of information
that was all-important or controlling.
Based on the Board's deliberations and its evaluation of the information
described above, the Trustees, including all of the non-interested Trustees,
unanimously concluded: (a) that terms of the proposed advisory and sub-advisory
agreements are fair and reasonable; and (b) that CIMCO's and the Sub-Adviser's
fees are reasonable in light of the services that they provide to the Fund.
96 Constellation Funds 2005 Semiannual Report
INVESTMENT ADVISER
Constellation Investment Management Company, LP
Berwyn, Pennsylvania
DISTRIBUTOR
Constellation Investment Distribution Company, Inc.
Berwyn, Pennsylvania
ADMINISTRATOR
Constellation Investment Management Company, LP
Berwyn, Pennsylvania
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
Philadelphia, Pennsylvania
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP
Philadelphia, Pennsylvania
This report was prepared for shareholders of the Constellation Funds. It may be
distributed to others only if preceded or accompanied by a Constellation Funds'
prospectus, which contains detailed information. All Constellation Funds are
offered by prospectus only.
THE TRUST FILES EACH FUND'S COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR THE FIRST AND THIRD QUARTERS OF EACH
FISCAL YEAR ON FORM N-Q WITHIN SIXTY DAYS AFTER THE END OF THE PERIOD. THE
FUNDS' FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEBSITE AT
http://www.sec.gov, AND MAY BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC
REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE PUBLIC
REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
A DESCRIPTION OF THE POLICIES AND PROCEDURES THAT EACH FUND USES TO DETERMINE
HOW TO VOTE PROXIES RELATING TO PORTFOLIO SECURITIES, AS WELL AS INFORMATION
RELATING TO HOW A FUND VOTED PROXIES RELATING TO PORTFOLIO SECURITIES DURING THE
MOST RECENT 12-MONTH PERIOD ENDED JUNE 30, IS AVAILABLE WITHOUT CHARGE, UPON
REQUEST, (I) VIA THE FUNDS' WEBSITE, www.constellationfundsgroup.com; AND (II)
ON THE COMMISSION'S WEBSITE AT http://www.sec.gov.
CONSTELLATION FUNDS GROUP
P.O. Box 219520
Kansas City, Missouri 64105-9520
1 (866) 242 5742
www.constellationfundsgroup.com
ITEM 2. CODE OF ETHICS.
Not applicable for semi-annual report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semi-annual report.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semi-annual report.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end management investment companies.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end management investment companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable. Effective for closed-end management investment companies for
fiscal years ending on or after December 31, 2005.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND
AFFILIATED PURCHASERS.
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The certifying officers, whose certifications are included herewith, have
evaluated the registrant's disclosure controls and procedures within 90 days of
the filing date of this report. In their opinion, based on their evaluation, the
registrant's disclosure controls and procedures are adequately designed, and are
operating effectively to ensure, that information required to be disclosed by
the registrant in the reports it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no significant changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrants internal control over financial reporting.
ITEMS 12. EXHIBITS.
(a)(1) Not applicable for semi-annual report.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed
herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing
as an Exhibit.
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Constellation Funds
By (Signature and Title)* /s/ John H. Grady, Jr.
-----------------------------------
John H. Grady, Jr., President & CEO
Date May 27, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John H. Grady, Jr.
-----------------------------------
John H. Grady, Jr., President & CEO
Date May 27, 2005
By (Signature and Title)* /s/ Eric Kleinschmidt
-----------------------------------
Eric Kleinschmidt,
Controller & Chief Financial Officer
Date May 27, 2005
* Print the name and title of each signing officer under his or her signature.