As filed with the Securities and Exchange Commission
on November 17, 1998
Registration No. 333-09703; 811-07745
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Post-Effective Amendment No. 6 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 7 [X]
(Check appropriate box or boxes)
-----------------------
NATIONS LIFEGOAL FUNDS, INC.
(Exact Name of Registrant as specified in Charter)
One NationsBank Plaza
33rd Floor
Charlotte, North Carolina 28255
(Address of Principal Executive Offices, including Zip Code)
--------------------------
Registrant's Telephone Number, including Area Code: (800) 626-2275
c/o The Corporation Trust Company
32 South Street
Baltimore, Maryland 21202
(Name and Address of Agent for Service)
With copies to:
Robert M. Kurucza, Esq. Carl Frischling, Esq.
Marco E. Adelfio, Esq. Kramer, Levin, Naftalis &
Morrison & Foerster LLP Frankel
2000 Pennsylvania Ave., N.W. 919 3rd Avenue
Suite 5500 New York, New York 10022
Washington, D.C. 20006
It is proposed that this filing will become effective (check appropriate box):
[ ] Immediately upon filing pursuant [ ] on (date) pursuant
to Rule 485(b), or to Rule 485(b), or
[X] 60 days after filing pursuant [ ] on (date) pursuant
to Rule 485(a), or to Rule 485(a).
[ ] 75 days after filing pursuant to [ ] on (date) pursuant to rule 485
paragraph (a)(2) paragraph (a)(2) of
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
<PAGE>
EXPLANATORY NOTE
This Post-Effective Amendment No. 6 to the Registration Statement of Nations
LifeGoal Funds, Inc. (the "Company") is being filed in order to restructure the
pricing of Investor C Shares.
Part B included in Post-Effective Amendment No. 5 filed on December 4, 1998.
<PAGE>
NATIONS LIFEGOAL FUNDS, INC.
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
PART A PART A
<S> <C> <C>
Item 1. Cover Page Cover Page
Item 2. Synopsis Prospectus Summary
Item 3. Condensed Financial Information Not Applicable
Item 4. General Description of Registrant Objectives; How Objectives Are
Pursued; Description of Underlying
Nations Funds
Item 5. Management of the Fund How the LifeGoal Funds Are Managed;
Shareholder Servicing and Distribution
Plans (for Investor A, Investor B and
Investor C Shares); Shareholder
Administration Arrangements (for
Primary B Shares)
Item 6. Capital Stock and Other Securities How Dividends and Distributions Are
Made; Tax Information; Organization
and History
Item 7. Purchase of Securities Being Expenses Summary; How Performance
Offered Is Shown; How to Buy Shares; How The
LifeGoal Funds Value Their Shares
Item 8. Redemption or Repurchase How to Redeem Shares;
How to Exchange Shares
Item 9. Pending Legal Proceedings Not Applicable
PART B PART B
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History Introduction
<PAGE>
Item 13. Investment Objectives and Policies Additional Information on the LifeGoal
Fund Investments; Additional
Information on Underlying Nations
Funds Investments
Item 14. Management of the Fund Directors and Officers of the LifeGoal
Funds; Investment Advisory,
Administration, Custody, Transfer
Agency, Shareholder Servicing and
Distribution Agreements
Item 15. Control Persons and Principal Miscellaneous
Holders of Securities
Item 16. Investment Advisory and Other Investment Advisory, Administration,
Services Custody, Transfer Agency, Shareholder
Servicing, Shareholder Administration
and Distribution Agreements; Counsel
Item 17. Brokerage Allocation and Other Not Applicable
Practices
Item 18. Capital Stock and Other Securities Description of Shares
Item 19. Purchase, Redemption and Pricing Purchases and Redemptions, Net Asset
of Securities Being Offered Value Determination
Item 20. Tax Status Additional Information Concerning
Taxes
Item 21. Underwriters Distributor, Distribution Plans and
Shareholder Servicing Plans for Investor
Shares, Expenses
Item 22. Calculation of Performance Data Additional Information on Performance
Item 23. Financial Statements Independent Accountant and Reports
PART C PART C
Part C Information required to be included in
Part C is set forth under the appropriate
Item, so numbered, in Part C of this
Document
</TABLE>
<PAGE>
Prospectus
Investor C Shares
August 1, 1998
as supplemented on
, 1998
This Prospectus describes three diversified investment portfolios, LifeGoal
Growth Portfolio, LifeGoal Balanced Growth Portfolio and LIFEGOAL INCOME AND
GROWTH PORTFOLIO (each a "LifeGoal Portfolio" and, collectively, the "LifeGoal
Portfolios"), of Nations LifeGoal Funds, Inc. (the "Company"), an open-end
management investment company in the Nations Funds Family. The LifeGoal
Portfolios invest substantially all of their assets in certain other funds
within the Nations Funds Family. These underlying funds are referred to in this
Prospectus as "Nations Funds". This Prospectus describes one class of shares of
each LifeGoal Portfolio -- Investor C Shares.
This Prospectus sets forth concisely the information about each LifeGoal
Portfolio that a prospective purchaser of Investor C Shares should consider
before investing. Investors should read this Prospectus and retain it for
future reference. Additional information about the LifeGoal Portfolios is
contained in a separate Statement of Additional Information (the "SAI") that
has been filed with the Securities and Exchange Commission (the "SEC") and is
available upon request without charge by writing or calling the Nations Funds
Family at its address or telephone number shown below. The SAI for the LifeGoal
Portfolios, dated August 1, 1998, is incorporated by reference in its entirety
into this Prospectus. The SEC maintains a Web site (http://www.sec.gov) that
contains the SAI, material incorporated by reference in this Prospectus and
other information regarding registrants that file electronically with the SEC.
NationsBanc Advisors, Inc. ("NBAI") is the investment adviser to each of the
LifeGoal Portfolios. TradeStreet Investment Associates, Inc. ("TradeStreet") is
the investment sub-adviser to the LifeGoal Portfolios. As used in this
Prospectus, the term "Adviser" refers to NBAI, TradeStreet, Gartmore Global
Partners, Brandes Investment Partners, L.P. and/or Marsico Capital Management,
LLC as the context may require, see "How The LifeGoal Portfolios Are Managed."
SHARES OF THE NATIONS FUNDS FAMILY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR
ISSUED, ENDORSED OR GUARANTEED BY, NATIONSBANK, N.A. (NATIONSBANK) OR ANY OF
ITS AFFILIATES. SUCH SHARES ARE NOT INSURED BY THE U.S. GOVERNMENT, THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENT AGENCY. AN INVESTMENT IN THE LIFEGOAL PORTFOLIOS INVOLVES CERTAIN
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
NATIONSBANK AND CERTAIN OF ITS AFFILIATES PROVIDE SERVICES TO THE NATIONS FUNDS
FAMILY, FOR WHICH THEY ARE COMPENSATED. STEPHENS INC., WHICH IS NOT AFFILIATED
WITH NATIONSBANK, IS THE SPONSOR AND ADMINISTRATOR AND SERVES AS THE
DISTRIBUTOR FOR THE LIFEGOAL PORTFOLIOS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
LIFEGOAL PORTFOLIOS:
LifeGoal Growth Portfolio
LifeGoal Balanced Growth Portfolio
LifeGoal Income and Growth Portfolio
For Portfolio
information call:
1-800-321-7854
Nations Funds
c/o Stephens Inc.
One NationsBank Plaza
33rd Floor
Charlotte, NC 28255
[NATIONS FUNDS LOGO APPEARS HERE]
NF-96703-8/98
<PAGE>
Table Of Contents
About The Prospectus Summary 3
LifeGoal -----------------------------------------------------
Portfolios Expenses Summary 4
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Objectives 6
-----------------------------------------------------
How Objectives Are Pursued 8
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Description Of Underlying Nations Funds --
Investment Objectives, Policies And Practices 10
-----------------------------------------------------
How Performance Is Shown 18
-----------------------------------------------------
How The LifeGoal Portfolios Are Managed 19
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Organization And History 23
-----------------------------------------------------
About Your How To Buy Shares 24
Investment -----------------------------------------------------
Investor C Shares -- Charges and Features 25
-----------------------------------------------------
How To Redeem Shares 27
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How To Exchange Shares 27
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Shareholder Servicing and Distribution Plans 28
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How The LifeGoal Portfolios Value Their Shares 30
-----------------------------------------------------
How Dividends And Distributions Are Made;
Tax Information 30
-----------------------------------------------------
Financial Highlights 32
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS, OR IN THE LIFEGOAL PORTFOLIOS' SAI
INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH
THE OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE LIFEGOAL
PORTFOLIOS OR THE DISTRIBUTOR. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFERING BY LIFEGOAL PORTFOLIOS OR
BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT LAWFULLY BE MADE.
2
<PAGE>
About The LifeGoal Portfolios
Prospectus Summary
o TYPE OF COMPANY: Open-end management investment company.
o INVESTMENT OBJECTIVES AND POLICIES:
o LifeGoal Growth Portfolio's investment objective is to seek capital
appreciation through exposure to a variety of equity market segments.
o LifeGoal Balanced Growth Portfolio's investment objective is to seek total
return through a balanced portfolio of equity and fixed income securities.
o LifeGoal Income and Growth Portfolio's investment objective is to seek
current income and modest growth to protect against inflation and to
preserve purchasing power.
The LifeGoal Portfolios are designed for long-term investors seeking the
benefits of asset allocation and diversification. Unlike traditional mutual
funds, which invest directly in individual securities, the LifeGoal Portfolios
pursue their investment objectives by allocating their assets among various
Nations Funds.
o INVESTMENT ADVISER: NationsBanc Advisors, Inc. serves as the investment
adviser to the LifeGoal Portfolios. NBAI provides investment management
services to more than 60 other funds in the Nations Funds Family. TradeStreet
Investment Associates, Inc., an affiliate of NBAI, provides investment
sub-advisory services to the LifeGoal Portfolios. For more information about
the investment adviser and investment sub-adviser to the LifeGoal Portfolios,
see "How the LifeGoal Portfolios Are Managed."
o DIVIDENDS AND DISTRIBUTIONS: Each LifeGoal Portfolio declares and pays
dividends from net investment income quarterly. Each LifeGoal Portfolio's net
realized capital gains, including net short-term capital gains, are
distributed at least annually.
o RISK FACTORS: Although NBAI, together with Tradestreet, seek to achieve the
investment objective of each LifeGoal Portfolio, there is no assurance that
they will be able to do so. Investments in a LifeGoal Portfolio are not
insured against loss of principal. Investments by a LifeGoal Portfolio in
shares of a Nations Fund that holds stocks are subject to stock market risk,
which is the risk that the value of the stocks held by Nations Funds may
decline over short or even extended periods. In addition, certain of the
Nations Funds may invest in securities of smaller and newer issuers.
Investments in such companies may present greater opportunities for capital
appreciation because of high potential earnings growth, but also present
greater risks than investments in more established companies with longer
operating histories and greater financial capacity. Investments by a LifeGoal
Portfolio in shares of a Nations Fund that holds debt securities are subject
to interest rate risk, which is the risk that the value of the debt
securities, including U.S. Government Obligations (as defined below), held by
Nations Funds may be adversely affected by changes in market interest rates.
The value of Nations Funds' investments in debt securities will tend to
decrease when interest rates rise and increase when interest rates fall. In
addition, debt securities which are not issued or guaranteed by the U.S.
Government are subject to credit risk, which is the risk that the issuer may
not be able to pay principal and/or interest when due. Certain of the Nations
Funds may invest portions, and in some cases substantially all, of their
assets in foreign securities. Foreign securities present unique investment
risks, including risks associated with currency fluctuations, markets that
tend to be less developed and more volatile
3
<PAGE>
than U.S. markets and markets that are characterized by less governmental
supervision and lower disclosure standards. Certain of Nations Funds'
investments may constitute derivative securities. Certain types of
derivative securities can, under particular circumstances, significantly
increase an investor's exposure to market and other risks. For a discussion
of these and other factors, see "How Objectives Are Pursued -- General
Characteristics and Risk Factors of the Major Asset Classes" and
"Description of Underlying Nations Funds -- Principal Risk Considerations."
o MINIMUM PURCHASE: $1,000 minimum initial investment per record holder except
that the minimum initial investment is: $500 for Individual Retirement Account
("IRA") investors; $250 for non-working spousal IRAs; and $50 for investors
participating on a monthly basis in the Systematic Investment Plan. There is
no minimum investment amount for investments by certain 401(k) and employee
pension plans or salary reduction. The minimum subsequent investment is $100,
except for investments pursuant to the Systematic Investment Plan. See "How To
Buy Shares."
Expenses Summary
Expenses are one of several factors to consider when investing in a LifeGoal
Portfolio. The following tables summarize estimated shareholder transaction and
operating expenses as a percentage of net assets for Investor C Shares of each
LifeGoal Portfolio. The Examples show the cumulative expenses attributable to a
hypothetical $1,000 investment in each LifeGoal Portfolio over specified
periods.
LIFEGOAL PORTFOLIOS INVESTOR C SHARES
<TABLE>
<CAPTION>
LifeGoal LifeGoal
LifeGoal Balanced Income and
Growth Growth Growth
Shareholder Transaction Expenses Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Sales Load Imposed on Purchases None None None
Maximum Deferred Sales Load (as a percentage of the lower of the original
purchase price or redemption proceeds) 1.00% 1.00% 1.00%
Annual Portfolio Operating Expenses
(as a percentage of average net assets)
Management Fees .25% .25% .25%
Rule 12b-1 Fees .75% .75% .75%
Shareholder Servicing Fees .25% .25% .25%
Other Expenses .00% .00% .00%
Total Operating Expenses 1.25% 1.25% 1.25%
</TABLE>
(1) Investor C Shares that are purchased at net asset value are subject to a
Deferred Sales Charge if redeemed within one year of purchase.
4
<PAGE>
Examples: You would pay the following expenses on a $1,000 investment in
Investor C Shares of the indicated LifeGoal Portfolio, assuming indirect
expenses (the LifeGoal Portfolios' share of the expenses incurred by the
underlying Nations Funds) at the midpoint of the after waiver ranges shown
below, and further assuming: (1) a 5% annual return and (2) redemption at the
end of each time period.
<TABLE>
<CAPTION>
LifeGoal LifeGoal
LifeGoal Balanced Income and
Growth Growth Growth
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
1 Year $ 32 $ 31 $ 30
3 Years $ 67 $ 65 $ 61
5 Years $115 $111 $105
10 Years $248 $240 $227
</TABLE>
You would pay the following expenses on a $1,000 investment in Investor C
Shares of the indicated LifeGoal Portfolio, assuming indirect expenses (the
LifeGoal Portfolios' share of the expenses incurred by the underlying Nations
Funds) at the midpoint of the after waiver ranges shown below, and further
assuming: (1) a 5% annual return and (2) no redemption.
<TABLE>
<CAPTION>
LifeGoal LifeGoal
LifeGoal Balanced Income and
Growth Growth Growth
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
1 Year $ 22 $ 21 $ 20
3 Years $ 67 $ 65 $ 61
5 Years $115 $111 $105
10 Years $248 $240 $227
</TABLE>
The purpose of the foregoing tables is to assist an investor in understanding
the various shareholder transaction and operating expenses that an investor in
Investor C Shares of a LifeGoal Portfolio can expect. The figures in the above
tables show the basis on which payments will be made, except that Other
Expenses are estimated for the LifeGoal Portfolios' current fiscal year and the
Examples include indirect expenses for the underlying Nations Funds' most
recent fiscal year (or estimates thereof for new funds). Long-term shareholders
of the Funds could pay more in sales charges than the economic equivalent of
the maximum front-end sales charges applicable to mutual funds sold by members
of the National Association of Securities Dealers, Inc. For more complete
descriptions of the LifeGoal Portfolios' operating expenses, see "How The
LifeGoal Portfolios Are Managed." For a more complete description of the Rule
12b-1 and shareholder servicing fees payable by the LifeGoal Portfolios, see
"Shareholder Servicing And Distribution Plans."
THE FOREGOING SHOULD NOT BE CONSIDERED TO BE AN ACTUAL REPRESENTATION OF PAST
OR FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES AND RATES OF RETURN MAY BE
GREATER OR LESS THAN THOSE SHOWN.
5
<PAGE>
LifeGoal Portfolios' Indirect Expenses
Based on the annualized expense ratios for the Primary A Shares of each of the
selected underlying Nations Fund's investments for its fiscal period ended
March 31, 1998 and the expected percentage investment ranges in the underlying
Nations Funds, the range of the weighted average indirect expense ratio for
each LifeGoal Portfolio is as follows:
<TABLE>
<CAPTION>
(before fee
(after fee waivers waivers and/or
and/or expense expense
reimbursements) reimbursements)
<S> <C> <C>
LifeGoal Growth Portfolio .56% to 1.22% .88% to 1.37%
LifeGoal Balanced Growth Portfolio .61% to 1.00% .87% to 1.15%
LifeGoal Income and Growth Portfolio .49% to .89% .74% to 1.10%
</TABLE>
The indirect expense ratios fluctuate within these ranges depending upon how
assets are allocated among the Nations Funds. The LifeGoal Portfolios will be
invested in the Primary A Shares of the underlying Nations Funds and, under
normal market conditions, will be allocated among the various fund categories
in the percentages shown below. Under extraordinary circumstances, a LifeGoal
Portfolio's investment in one or more Nations Funds might exceed these ranges.
For temporary defensive purposes, any LifeGoal Portfolio may invest up to 100%
of its assets in Nations Prime Fund, a money market mutual fund.
Objectives
o LIFEGOAL GROWTH PORTFOLIO -- LifeGoal Growth Portfolio's investment objective
is to seek capital appreciation through exposure to a variety of equity
market segments.
<TABLE>
<CAPTION>
FUND CATEGORY RANGE FUNDS
<S> <C> <C>
Large-Capitalization Domestic Equity Funds 40-75% Nations Capital Growth Fund
Nations Disciplined Equity Fund
Nations Equity Income Fund
Nations Managed Index Fund
Nations Marsico Focused Equities Fund
Nations Marsico Growth & Income Fund
Nations Value Fund
Small/Mid-Capitalization Domestic Equity Funds 15-35% Nations Emerging Growth Fund Nations
Managed SmallCap Index Fund
Nations Small Company Growth Fund
Core International Equity Funds 10-20% Nations International Equity Fund
Nations International Value Fund
Non-Core International Equity Funds 0-10% Nations Emerging Markets Fund Nations
Pacific Growth Fund
</TABLE>
6
<PAGE>
o LIFEGOAL BALANCED GROWTH PORTFOLIO -- LifeGoal Balanced Growth Portfolio's
investment objective is to seek total return through a balanced portfolio of
equity and fixed income securities.
<TABLE>
<CAPTION>
FUND CATEGORY RANGE FUNDS
<S> <C> <C>
Large-Capitalization Domestic Equity Funds 20-40% Nations Capital Growth Fund
Nations Disciplined Equity Fund
Nations Equity Income Fund
Nations Managed Index Fund
Nations Marsico Focused Equities Fund
Nations Marsico Growth & Income Fund
Nations Value Fund
Small/Mid-Capitalization Domestic Equity Funds 10-20% Nations Emerging Growth Fund
Nations Managed SmallCap Index Fund
Nations Small Company Growth Fund
Core International Equity Funds 5-15% Nations International Equity Fund
Nations International Value Fund
Core Bond Funds 40-60% Nations Diversified Income Fund
Nations Strategic Fixed Income Fund
</TABLE>
o LIFEGOAL INCOME AND GROWTH PORTFOLIO -- LifeGoal Income and Growth Portfolio's
investment objective is to seek current income and modest growth to protect
against inflation and to preserve purchasing power.
<TABLE>
<CAPTION>
FUND CATEGORY RANGE FUNDS
<S> <C> <C>
Large-Capitalization Domestic Equity Funds 10-30% Nations Capital Growth Fund
Nations Disciplined Equity Fund
Nations Equity Income Fund
Nations Managed Index Fund
Nations Marsico Focused Equities Fund
Nations Marsico Growth & Income Fund
Nations Value Fund
Small/Mid-Capitalization Domestic Equity Funds 0-10% Nations Small Company Growth Fund
Core International Equity Funds 0-10% Nations International Equity Fund
Nations International Value Fund
Short Duration Bond Funds 50-90% Nations Short-Term Income Fund
Nations Short-Intermediate Government
Fund
Money Market Funds 0-20% Nations Prime Fund
</TABLE>
The LifeGoal Portfolios are intended primarily for long-term investors. The
LifeGoal Portfolios are structured as "funds of funds" that allocate
substantially all of their assets to investments in Primary A Shares of various
Nations Funds. The performance of the LifeGoal Portfolios will, therefore,
correspond to the performance of the various underlying Nations Funds.
Additional information about the underlying Nations Funds, including their
investment objectives, investment policies and practices, is set forth below
under "Descriptions of Underlying Nations Funds -- Investment Objectives,
Policies and Practices." The Adviser allocates and reallocates each LifeGoal
Portfolio's assets among the underlying Nations Funds identified above, and
potentially other Nations Funds, based on the percentage ranges shown above for
the various fund categories. As discussed below under "The Asset Allocation
Process," a LifeGoal Portfolio's actual investment allocation may deviate from
the percentage ranges shown above, over the short or long term.
7
<PAGE>
How Objectives Are Pursued
Benefits of Asset Allocation
For most investors, choosing the mix of asset classes is the most important
investment decision they can make. Asset allocation is the single greatest
determinant of an investor's return and risk. It is the process of developing a
diversified portfolio by mixing different asset classes (i.e. -- international
stocks, domestic stocks and bonds) in varying portions to gain exposure to the
different return/risk characteristics of each asset class. Asset classes and
market segments (large, mid and small capitalization stocks) tend to react in
different ways to changes in economic conditions. Therefore, an investment
approach that combines various market segments and asset classes may reduce
overall portfolio volatility.
The assets of each LifeGoal Portfolio are allocated among various asset classes
through their investment in different fund categories. Each LifeGoal Portfolio
has its own asset allocation strategy which gives it a distinctive risk profile
and offers different return potential. Investors should select the LifeGoal
Portfolio (or Portfolios) which best matches their investment goals, risk
tolerance and investment horizon.
In general, the greater the LifeGoal Portfolio's percentage allocation to
equity funds, the greater the potential return and risk of share price decline.
Because of equity funds' greater risks, investors in the LifeGoal Portfolios
that have a higher allocation to equity funds should have a longer investment
horizon. In general, the greater the LifeGoal Portfolio's percentage allocation
to bond funds, the greater the potential price stability; however, returns may
be lower.
Investment performance will vary based on many factors, including market
conditions and the composition of a LifeGoal Portfolio's portfolio. Investment
performance also often reflects the risks associated with a LifeGoal
Portfolio's investment objective and policies. These factors should be
considered when comparing a LifeGoal Portfolio's investment results to those of
other mutual funds and to market indexes.
Although the Adviser will seek to achieve the investment objective of each
LifeGoal Portfolio, there is no assurance that it will be able to do so. No
single LifeGoal Portfolio should be considered, by itself, to provide a
complete investment program for any investor. The net asset value of the shares
of a LifeGoal Portfolio fluctuates based on fluctuations in the values of the
underlying Nations Funds' shares, which, in turn, fluctuate based on market
conditions and other factors. Therefore, investors should not rely upon
LifeGoal Portfolios for short-term financial needs. The LifeGoal Portfolios are
not intended to provide a vehicle for participating in short-term swings in the
stock market and their shares are not insured against loss of principal.
The Asset Allocation Process
Subject to the general supervision of the Company's Board of Directors, the
Adviser is responsible for allocating and reallocating each LifeGoal
Portfolio's assets among the Nations Funds in which it invests, and for
rebalancing such portfolio allocations. In this context, allocation is the
process of setting or changing the weightings of the different fund categories
and Nations Funds within a particular LifeGoal Portfolio's portfolio. The
"weightings" of the different fund categories and Nations Funds within a
particular LifeGoal Fund's portfolio are the percentage targets that the
Adviser sets for investment in a particular fund category or Nations Fund. All
fund category weightings will be within the overall percentage ranges shown
above. Rebalancing is the process of bringing portfolio allocations back into
alignment with the applicable weightings. A LifeGoal Portfolio's investments
are continuously monitored and are reallocated as often as the Adviser deems
appropriate. In addition, portfolio allocations and performance are reviewed at
least monthly for rebalancing at the discretion of the Adviser.
Although the Adviser may rebalance each LifeGoal Portfolio's holdings
quarterly, it expects to rebalance less often. Thus, at any given time, it is
possible that the percentage of a particular LifeGoal Portfolio's assets
actually invested in a particular
8
<PAGE>
Nations Fund or fund category will not correspond precisely with the applicable
weightings. Also, depending on the frequency of rebalancings, the extent of any
such deviation could continue for some time.
The Adviser has adopted certain policies designed to reduce the extent and
duration of such deviations. For example, if any fund category percentage
ranges are exceeded, the Adviser will allocate new investment dollars to the
other fund categories. Likewise, the Adviser will allocate new investment
dollars to fund categories whose minimum percentages have not been met.
Redemption requests, however, will generally be met by redeeming shares of
underlying Nations Funds according to the applicable weightings.
Determining the asset allocation applicable to each LifeGoal Portfolio is a two
step process. The first step is determining the broad asset classes for each
LifeGoal Portfolio -- large and small capitalization domestic stocks, foreign
stocks, bonds and money market securities. In making this determination, the
Adviser will consult the relevant historical data for the returns of each asset
class in various economic scenarios. Those returns will be reviewed in the
context of the Adviser's outlook for the economy and markets and adjusted for
reasonableness. The second step in the process is to determine the particular
Nations Funds in which each LifeGoal Portfolio will invest. The Adviser looks
at historic returns and valuations to determine which Nations Funds are most
appropriate. Determining how the individual Nations Funds may interact with one
another within a portfolio is a critical part of this second step.
Although it is expected that the LifeGoal Portfolios will invest in the Nations
Funds identified in "Description of Underlying Nations Funds," the Adviser has
the discretion to change the particular Nations Funds used as underlying
investments for the LifeGoal Portfolios. Among other things, the Adviser may
substitute or include other funds from the Nations Funds Family, including any
funds introduced subsequent to the date of this Prospectus, as permissible
investments for the LifeGoal Portfolios.
General Characteristics and Risk Factors of the Major Asset Classes
The underlying Nations Funds invest primarily in various stocks, bonds and
money market securities. This section provides a brief summary of the general
characteristics and overall risk factors associated with these asset classes.
Additional information is provided under "Description of Underlying Nations
Funds" below and in the prospectuses of the underlying Nations Funds.
Common stocks represent ownership in a company. Stock prices move with changes
in a company's current earnings and its prospects for the future, and with
overall stock market conditions. Stocks offer the potential for price
appreciation and rising dividends. While smaller companies usually reinvest
their earnings back into the company and therefore pay minimal, if any,
dividends, they offer the possibility of greater appreciation.
Historically, stocks have provided higher returns than bonds or money market
securities. Therefore, they have also provided the greatest protection against
inflation and the resulting erosion of purchasing power. However, the
additional return has been accompanied by additional volatility. Equity
investors should have a long-term investment horizon and be willing to accept
the inevitable periods of market declines.
Bonds are a contract. The issuer has an obligation to pay a specified rate of
interest (which may be fixed or variable) at specified times and to repay the
bond's principal value upon maturity. Bonds are subject to credit risk and to
interest rate risk. Credit risk refers to the possibility that a bond's price
may fall due to a credit downgrade or a principal or interest payment default.
Interest rate risk refers to a bond's price movement in response to changes in
market interest rates. As a general rule, when market interest rates rise, bond
prices fall. Typically, the longer the maturity of a bond, the greater the
potential price fluctuation.
Money market securities are short term debt obligations issued primarily by the
U.S. Government, government agencies or corporations. High quality money market
securities are very low risk invest-
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ments; their low risk, however, is accompanied by lower potential returns
relative to other investments.
Investment Company Securities: Each of the LifeGoal Portfolios intends, as a
fundamental policy, to concentrate investments by investing 25% or more of its
total assets in the mutual fund industry.
Although some of the Nations Funds in which the LifeGoal Portfolios invest do
not necessarily share the same investment objective as the investing LifeGoal
Portfolio, those Nations Funds will be selected by the Adviser based on the
asset allocation process described above.
Although each LifeGoal Portfolio intends to invest substantially all of its
assets in some or all of the underlying Nations Funds, each LifeGoal Portfolio
reserves the right to invest in obligations issued or guaranteed by the U.S.
Government, its agencies and instrumentalities, repurchase agreements, and
money market instruments with respect to any assets not so invested in Nations
Funds. It is not expected that any LifeGoal Portfolio will invest more than 5%
of its assets in any of these direct investments.
Investment Limitations: Each LifeGoal Portfolio is subject to a number of
investment limitations, which are described in the SAI. Among other things, the
LifeGoal Portfolios' fundamental policies permit them to borrow money from
banks for temporary or emergency purposes, subject to percentage and other
limitations, and to enter into forward purchase commitments and issue multiple
classes of shares. The investment objective, policies and limitations of each
LifeGoal Portfolio, unless otherwise specified, may be changed without a vote
of the LifeGoal Portfolio's shareholders. If the investment objective, policies
or limitations of a LifeGoal Portfolio change, shareholders should consider
whether the LifeGoal Portfolio remains an appropriate investment in light of
their current position and needs.
The Nations Funds also have adopted certain investment restrictions which may
be more or less restrictive than those applicable to the LifeGoal Portfolios,
thereby allowing a LifeGoal Portfolio to participate in certain investment
strategies indirectly that are prohibited under the investment restrictions
described in the LifeGoal Portfolios' SAI. The investment restrictions of the
underlying Nations Funds are set forth in their respective prospectuses and
statements of additional information.
Portfolio Turnover: Generally, LifeGoal Portfolios will purchase portfolio
securities for capital appreciation or investment income, or both, and not for
short-term trading profits. The LifeGoal Portfolios' portfolio turnover rates
are not expected to exceed 50% annually.
Description of Underlying Nations Funds -- Investment Objectives,
Policies and Practices
The LifeGoal Portfolios seek to achieve their investment objectives by
investing in certain Nations Funds (each, a "Fund"). The following section
provides summaries of the Nations Funds' investment objectives, policies and
practices. These summaries are intended to help investors understand some of
the more significant aspects of the underlying Nations Funds, but are not
intended to be comprehensive disclosures of all policies, practices and risks
associated with investments by the LifeGoal Portfolios in the Nations Funds. To
receive a prospectus for any underlying Nations Fund, which contains more
complete information, please call Nations Funds at 1-800-321-7854.
Equity Funds
Nations Capital Growth Fund: The Fund's investment objective is to seek growth
of capital by investing in companies that are believed to have superior
earnings growth potential. The Fund invests in larger capitalization,
high-quality companies which possess above-average earnings growth potential.
While the Fund's investments will generally be made
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in companies which share some of the following characteristics:
o above-average earnings growth relative to Standard & Poor's 500 Composite
Stock Price Index ("S&P 500 Index")1;
o established operating histories, strong balance sheets and favorable financial
characteristics; and
o above-average return on equity relative to the S&P 500 Index,
the Fund has a flexible charter which allows it to take advantage of other
opportunities. Under normal market conditions, the Fund invests at least 65% of
its total assets in common stocks. In addition to common stocks, the Fund may
also invest in preferred stocks, securities convertible into common stocks and
other types of securities having common stock characteristics such as rights
and warrants. The Fund may invest a portion of its assets in foreign
securities.
Nations Disciplined Equity Fund: The Fund's investment objective is to seek
growth of capital by investing in companies that are expected to produce
significant increases in earnings per share. In selecting stocks for the Fund,
the Adviser utilizes quantitative analysis and optimization tools. This
approach seeks to identify companies with improving profit potential through
analysis of earnings forecasts issued by investment banks, broker/ dealers and
other investment professionals. The Adviser believes that companies
experiencing such earnings trends have the potential to generate significant
increases in per share earnings. The Adviser also believes that companies with
increasing earnings should experience positive trends in their stock price.
Under normal market conditions, the Fund invests at least 65% of its total
assets in common stocks of domestic issuers. The Fund also may invest in
preferred stocks, securities convertible into common stock, warrants and rights
to purchase common stock, options, and U.S. Government and corporate debt
securities, and foreign securities.
Nations Emerging Growth Fund: The Fund's investment objective is to seek capital
appreciation by investing in emerging growth companies that are believed to have
superior long-term earnings growth prospects. The Fund invests primarily in
emerging growth companies with revenues between $50 million and $1.5 billion and
a debt ratio of less than 50% of capitalization. The Fund focuses on companies
with above-average earnings growth rates and profit margins, yet the portfolio
may also include positions in special situation companies whose growth is
expected to accelerate. In managing the Fund, the Adviser applies a disciplined
process with rigorous fundamental analysis providing the basis for stock
selection. Its methodology combines fundamental, valuation and momentum-based
disciplines in portfolio construction. Under normal market conditions, the Fund
invests at least 65% of its total assets in common stocks. The Fund also may
invest in securities convertible into common stocks and may invest a portion of
its assets in foreign securities. The volatility of emerging growth stocks is
greater than that of larger companies. Accordingly, while they may have greater
potential for gains, they also carry greater downside risk.
Nations Equity Income Fund: The Fund's investment objective is to seek current
income and growth of capital by investing primarily in companies with
above-average dividend yields. The investment program of the Fund is based on
several premises. First, that dividends are normally a more stable and
predictable source of return than capital appreciation. While the price of a
company's stock generally increases and decreases in response to short-term
earnings and market fluctuations, its dividends are generally less volatile.
Second, diversifying equity holdings in a manner that includes every major
economic sector contributes to reduced volatility, without a commensurate
reduction in investment return. Collectively, these traits may be combined in
such a fashion as to produce a Fund with less volatility and which provides
higher income than that of the stocks in the S&P 500 Index.
Under normal circumstances, the Fund will invest at least 65% of its assets in
income-producing common stocks, including securities convertible into or
ultimately exchangeable for common stock (i.e., convertible bonds or
convertible preferred stock), whose prospects for dividend growth and capital
appreciation are considered favorable by the Adviser. The Fund also may invest
its assets in fixed
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1 "Standard & Poor's" and "Standard & Poor's 500" are trademarks of The
McGraw-Hill Companies, Inc.
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income securities (corporate and government bonds of various maturities),
preferred stocks and warrants and other debt securities, including up to 5% of
its assets in debt securities that are rated below investment grade (e.g. rated
"BB" by S&P) or if not rated, are of equivalent investment quality as
determined by the Adviser. The Fund may invest a portion of its assets in
foreign securities.
Nations Managed Index Fund: The Fund's investment objective is to seek, over
the long-term, to provide a total return that (gross of fees and expenses)
exceeds the total return of the S&P 500 Index. The Fund will invest in selected
equity securities that are included in the S&P 500 Index. The S&P 500 Index is
a market capitalization weighted index consisting of 500 common stocks chosen
for market size, liquidity and industry group representation.
Unlike traditional index funds, the Fund has a "managed" overlay. The Adviser
believes that a managed equity index portfolio can provide investors with
positive incremental performance relative to the S&P 500 Index while minimizing
the downside risk of underperforming the index over time. The Adviser ranks the
attractiveness of each security in the S&P 500 Index according to a multifactor
valuation model. The Adviser then screens out the lower ranked stocks resulting
in a portfolio of 300 to 400 holdings that capture the investment
characteristics of the S&P 500 Index. Under normal conditions, the Adviser will
attempt to invest as much of the Fund's assets as is practical, and, in any
event, at least 80% of its total assets in common stocks which are included in
the S&P 500 Index. The Fund is expected, however, to maintain a position in
high-quality short-term debt securities and money market instruments to meet
redemption requests.
Nations Managed SmallCap Index Fund: The Fund's investment objective is to seek,
over the long-term, to provide a total return that (gross of fees and expenses)
exceeds that of Standard & Poor's SmallCap 600 Index (the "S&P 600 Index").2 The
Fund will invest in selected equity securities that are included in the S&P 600
Index. The S&P 600 Index is a market capitalization weighted index consisting of
600 domestic stocks which captures the economic and industry characteristics of
small stock performance.
Unlike traditional index funds, the Fund has a "managed" overlay. The Adviser
believes that a managed equity index portfolio can provide investors with
positive incremental performance relative to the S&P 600 Index while minimizing
the downside risk of underperforming the index over time. From the initial S&P
600 Index stock universe, the Adviser ranks the attractiveness of each security
according to a multifactor valuation model. The Adviser then screens out the
lower ranked stocks resulting in a portfolio of approximately 400 to 500
holdings that capture the investment characteristics of the S&P 600 Index.
Under normal conditions, substantially all of the Fund's assets, and, in any
event at least 80% of its total assets, will be invested in common stocks which
are included in the S&P 600 Index. The Fund is expected, however, to maintain a
position in high-quality short-term debt securities and money market
instruments to meet redemption requests.
Nations Marsico Focused Equities Fund: The Fund's investment objective is to
seek long-term growth of capital. The Fund is a non-diversified fund that
pursues its objective by normally investing in a core position of 20-30 common
stocks. In choosing stocks, the Adviser attempts to identify individual
companies with earnings growth potential that may not be recognized by the
market at large. In seeking such opportunities, the Adviser looks for a
combination of four factors: change (products, markets and technologies that
are in flux), franchise (brand franchises that can be leveraged), global reach
(companies that consider world markets rather than local markets) and themes
(companies that are moving with, not against, major social, economic and
cultural shifts). Once an opportunity is identified, it is subject to a
disciplined analytical process that takes into consideration such macroeconomic
factors as interest rates, inflation, the regulatory environment, the global
competitive landscape, and such microeconomic factors as company fundamentals,
market franchise and company management.
Under normal circumstances the Fund invests at least 65% of its assets in large
capitalization common stocks selected for their growth potential. The
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2 "Standard & Poor's" and "Standard & Poor's SmallCap 600" are trademarks of
The McGraw-Hill Companies, Inc.
12
<PAGE>
Fund also may invest to a lesser degree, in other types of securities such as
preferred stocks, warrants, convertible securities and debt securities.
Nations Marsico Growth & Income Fund:
The Fund's investment objective is to seek long-term growth of capital with a
limited emphasis on income. The Fund will typically invest in large
capitalization stocks. The Fund may invest in any combination of common stocks,
preferred stocks, warrants, convertible securities and debt securities. In
building the portfolio, the Adviser seeks to identify individual companies with
earnings growth potential not recognized by the market at large. In seeking
such opportunities, the Adviser looks for a combination of four factors: change
(products, markets and technologies that are in flux), franchise (brand
franchise that can be leveraged), global reach (companies that consider world
markets rather than local markets) and themes (companies that are moving with,
not against, major social, economic and cultural shifts). Once an opportunity
is identified, it is subject to a disciplined analytical process that takes
into consideration macroeconomic factors such as interest rates, inflation, the
regulatory environment, the global competitive landscape, and company
fundamentals, such as market franchise and company management.
Under normal circumstances, the Fund invests up to 75% of its assets in equity
securities selected primarily for their growth potential and at least 25% of
its assets in securities with income potential. However, in adverse market
conditions, the Fund may reduce the growth component of its portfolio to 25% of
its total assets. Additionally, the Adviser may shift the Fund's assets between
the growth and income components based on relevant market, financial and
economic conditions.
Nations Small Company Growth Fund: The Fund's investment objective is to seek
long-term capital growth by investing capital primarily in equity securities.
In pursuing its investment objective, under normal circumstances, the Fund will
invest at least 65% of its total assets in equity securities of companies with
a market capitalization of $1 billion or less. The investment philosophy of
Nations Small Company Growth Fund is based on the premise that stock prices are
driven by earnings growth and that superior stock market returns occur when a
company experiences rapid and accelerating earnings growth due to improving
fundamentals.
In managing the Fund, the Adviser applies a disciplined process with rigorous
fundamental analysis providing the basis for stock selection. Its methodology
combines fundamental, valuation and momentum-based disciplines in portfolio
construction. Overall, the Fund's strategy is to own those investments offering
both attractive fundamental valuation and relatively good prospects for
earnings improvement. Typically, two types of companies are candidates for
purchase: (i) mature companies which may have fallen from a larger market value
due to business difficulties, but which now exhibit improving prospects; and
(ii) smaller or younger companies which are experiencing strong trends in
earnings growth, but remain reasonably valued and therefore offer premium
growth at a discount in comparison to other companies.
Nations Value Fund: The Fund's investment objective is to seek growth of
capital by investing in companies believed to be undervalued. The Fund invests
in high quality, large capitalization stocks which are believed to be
undervalued relative to the overall stock market or other stocks within the
same industry. The principal factor considered by the Adviser in making this
determination is the ratio of a stock's price to earnings. The Adviser believes
that companies with lower price to earnings ratios are more likely to provide
better opportunities for capital appreciation. This "value" approach generally
produces a dividend yield greater than the market average. Through a
combination of the "value" approach and broad diversification among economic
sectors and industries, the Fund pursues above-average returns while seeking to
avoid above-average risk.
Under normal market conditions, at least 65% of the Fund's total assets are
invested in domestic stocks. The Fund may invest a portion of its assets in
foreign securities as well as U.S. Government Obligations and investment grade
debt securities of domestic companies.
International Funds
Nations Emerging Markets Fund: The Fund's investment objective is to seek
long-term capital growth by investing primarily in equity securities
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<PAGE>
of companies in emerging market countries such as those in Latin America,
Eastern Europe, the Pacific Basin, the Far East, Africa and India. Under normal
market conditions, the Fund will invest at least 65% of its total assets in
equity securities of companies in emerging markets. The Fund also may invest in
other types of instruments, including debt securities. The Fund intends to
invest in at least three different countries, although it may, from time to
time, invest all of its assets in a single country. In such cases, events
occurring in such country are more likely to affect the Fund's investments.
Nations International Equity Fund: The Fund's investment objective is to seek
long-term capital growth by investing primarily in equity securities of
non-United States companies in Europe, Australia, the Far East and other areas,
including developing countries. The Fund invests in both established and
developing markets around the world. While emphasizing established markets, the
Fund typically has some exposure to the more rapidly growing markets of the
Pacific Basin, Latin America and Eastern Europe.
Under normal market conditions, the Fund will invest at least 65% of its assets
in common stocks of non-United States companies and may invest up to 35% of its
assets in any other type of security, including convertible securities,
preferred stocks, and various debt securities. Under normal circumstances, the
Fund invests in at least three different countries. Under unusual
circumstances, however, the Fund may invest all of its assets in one or two
countries. In such cases, events occuring in those countries are more likely to
affect the Fund's investments.
Nations International Value Fund: The Fund's investment objective is to seek
long-term capital appreciation by investing primarily in equity securities of
foreign issuers including emerging markets countries. The Fund pursues its
investment objective, under normal circumstances, by investing its assets in
the securities of issuers in at least three different foreign countries.
Although the Fund may invest in companies of various sizes it typically invests
in established companies. The Adviser is committed to the use of the Graham &
Dodd-style value investing approach as introduced in the classic book SECURITY
ANALYSIS. The Adviser's approach to selecting stocks for the Fund is value
driven and it seeks to purchase a diversified group of businesses at prices
that research indicates are below true long-term, or intrinsic, value. In so
doing the Adviser seeks to secure not only a possible margin of safety against
price declines, but also an attractive opportunity for profit over the business
cycle. In analyzing a company's long-term value, the Adviser uses sources of
information such as company reports, filings with the SEC, computer databases,
industry publications, brokerage firm research reports and interviews with
company management.
Under normal circumstances, the Fund intends to invest at least 65% of its
total assets in equity securities of non-U.S. issuers whose market
capitalizations exceed $1 billion at the time of purchase. Although the Fund
intends to invest primarily in equity securities listed on stock exchanges it
also may invest in equity securities traded over the counter and in private
placements. Typically, no more than 5% of total Fund assets will be invested in
any one equity security at the time of purchase. Countries in which the Fund
may invest include, but are not limited to, the nations of Western Europe,
North and South America, Australia, Africa and Asia. During temporary defensive
periods in response to unusual and adverse conditions, the Fund's assets may be
invested without limitation in short-term debt instruments and in securities of
U.S. issuers.
Nations Pacific Growth Fund: The Fund's investment objective is to seek
long-term capital growth by investing primarily in equity securities of
companies in the Pacific Basin and the Far East (excluding Japan). Under normal
market conditions, the Fund will invest at least 65% of its total assets in
securities of issuers that conduct their principal business activities in
countries of the Pacific Basin and Far East, except for Japan. The Fund intends
to invest in at least three different countries, although it may, from time to
time, invest all or a significant portion of its assets in a single country. In
such cases, events occurring in that country are more likely to affect the
Fund's investments. The Fund will focus on equity securities, but may also
invest in investment grade debt obligations.
Bond Funds
Nations Diversified Income Fund: The Fund's investment objective is to seek
total return with
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an emphasis on current income by investing in a diversified portfolio of fixed
income securities. The Fund actively seeks opportunities within various bond
market sectors, balancing credit and interest rate risk. Under normal market
conditions, the Fund will invest at least 65% of the total value of its assets
in investment grade debt obligations, including fixed income securities such as
government, government agency and corporate bonds. Up to 35% of the Fund's
total assets may be invested in securities rated lower than investment grade.
Non-investment-grade debt securities are sometimes referred to as "high yield
bonds" or "junk bonds," and tend to have speculative characteristics, generally
involve more risk of principal and income loss than higher rated securities,
and have yields and market values that tend to fluctuate more than higher
quality securities. Under normal market conditions, it is expected that the
average weighted maturity of the Fund's portfolio will be greater than five
years. Although the Fund invests primarily in securities of U.S. issuers, the
Fund may invest a portion of its assets in foreign securities.
Nations Short-Intermediate Government Fund: The Fund's investment objective is
to seek high current income consistent with modest fluctuation of principal.
The Fund invests primarily in U.S. Government Obligations. The Fund invests
substantially all of its assets in U.S. Government Obligations and repurchase
agreements relating to such obligations. Under normal market conditions, it is
expected that the average weighted maturity of the Fund's portfolio will be
three to five years and the duration will not exceed five years.
Nations Short-Term Income Fund: The Fund's investment objective is to seek high
current income consistent with minimal fluctuation of principal. The Fund
invests in a broad range of investment grade debt obligations. Under normal
market conditions, it is expected that the average weighted maturity of the
Fund will not exceed five years and the duration of the Fund's portfolio will
not exceed three years. The Fund may invest a portion of its assets in foreign
securities.
Nations Strategic Fixed Income Fund: The Fund's investment objective is to seek
total return by investing in investment grade fixed income securities. The Fund
invests in a broad range of investment grade debt securities. Under normal
market conditions, it is expected that the average weighted maturity of the
Fund's portfolio will be 10 years or less and under no circumstances will it
exceed 15 years. Under normal market conditions, the Fund will invest at least
65% of the total value of its assets in government, corporate and
mortgage-related securities. Most obligations acquired by the Fund will be
issued by companies or governmental entities located within the United States.
The Fund may invest a portion of its assets in foreign securities.
Money Market Fund
Nations Prime Fund: The Fund's investment objective is to seek the maximization
of current income to the extent consistent with the preservation of capital and
the maintenance of liquidity. The Fund invests in a diversified portfolio of
high quality money market instruments with maturities of 397 days or less from
the date of purchase. Securities subject to repurchase agreements may have
longer maturities. The Fund may invest in U.S. Treasury bills, notes and bonds
and other instruments issued directly by the U.S. Government. The Fund may also
invest in bank and commercial instruments that may be available in the money
markets, high quality short-term taxable obligations issued by state and local
governments, and repurchase agreements relating to U.S. Government Obligations.
Although the Fund is permitted to invest a portion of its assets in second tier
securities (as defined below) in accordance with Rule 2a-7 under the Investment
Company Act of 1940, as amended (the "1940 Act"), the Fund invests only in
first tier securities (as defined below). An investment in the Fund is neither
insured nor guaranteed by the U.S. Government. There can be no assurance that
the Fund can maintain a stable net asset value of $1.00 per share.
General
Other Investment Practices: Each of the Nations Funds may invest in certain
specified derivative securities, including some or all of the following:
interest rate swaps, caps and floors for hedging purposes; exchange-traded
options; over-the-counter options executed with primary dealers, including long
calls and puts and covered calls to
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<PAGE>
enhance return; and Commodity Futures Trading Commission-approved U.S. and
foreign exchange-traded financial futures and options thereon for market
exposure and/or risk-management. Each of the Funds may lend their portfolio
securities to qualified institutional investors, engage in repurchase agreement
transactions and invest in restricted, private placement and other illiquid
securities. Certain Nations Funds may engage in reverse repurchase agreements
and dollar roll transactions. Certain securities that have variable or floating
interest rates or demand or put features may be deemed to have remaining
maturities shorter than their nominal maturities for purposes of determining
the average weighted maturity and duration of the Nations Funds. Certain
Nations Funds also may invest in instruments issued by trusts, partnerships or
other issuers, including pass-through certificates representing participations
in, or debt instruments backed by, the securities owned by such issuers.
In addition to the foregoing investment practices, some of the underlying
Nations Funds may invest in securities issued by other investment companies,
preferred stock, securities convertible into common stock and other types of
securities having common stock characteristics (such as rights and warrants),
guaranteed investment contracts, money market instruments, below-investment
grade debt ("junk bonds"), debt obligations of foreign issuers and stocks of
foreign corporations, obligations of domestic or foreign governments and their
political subdivisions, American Depository Receipts ("ADRs", also called
American Depository Shares), European Depository Receipts ("EDRs"), Global
Depository Receipts ("GDRs"), securities of foreign investment funds or trusts,
real estate investment trust securities, convertible debentures,
mortgage-backed securities, mortgage pass-through certificates, collateralized
mortgage obligations ("CMOs"), mortgage-backed bonds, other asset-backed
securities and obligations of foreign banks and foreign branches of U.S. banks.
Under Rule 2a-7 of the 1940 Act, a Money Market Fund is limited to acquiring
obligations with a remaining maturity of 397 days or less, or obligations with
greater maturities, provided such obligations are subject to demand features or
resets which are less than 397 days, and to maintaining a dollar-weighted
average portfolio maturity of 90 days or less. Quality requirements generally
limit investments to U.S. dollar denominated instruments determined to present
minimal credit risks which, at the time of acquisition, are rated in the first
or second rating categories (known as "first tier" and "second tier"
securities, respectively) by the required number of nationally recognized
statistical rating organizations (each an "NRSRO") or, if unrated by any NRSRO,
are (i) comparable in priority and security to a class of short-term securities
of the same issuer that has the required rating, or (ii) determined to be
comparable in quality to securities having the required rating. The
diversification requirements provide generally that a Money Market Fund may not
at the time of acquisition invest more than 5% of its assets in securities of
any one issuer except that up to 25% of total assets may be invested in the
first tier securities of a single issuer for three business days. Additionally,
no more than 5% of total assets may be invested, at the time of acquisition, in
second tier securities in the aggregate, and any investment in second tier
securities of one issuer is limited to the greater of 1% of total assets or one
million dollars. Securities issued by the U.S. Government, its agencies,
authorities or instrumentalities are exempt from the quality requirements,
other than minimal credit risk. In the event that a Fund's investment
restrictions or permissible investments are more restrictive than the
requirements of Rule 2a-7, the Fund's own restrictions will govern.
Principal Risk Considerations: Investments by a Nations Fund in common stocks
and other equity securities are subject to stock market risk. The value of the
stocks that a Nations Fund holds, like the broader stock market, may decline
over short or even extended periods. The value of a Nations Fund's investments
in debt securities, including U.S. Government Obligations, will tend to
decrease when interest rates rise and increase when interest rates fall. In
general, longer-term debt instruments tend to fluctuate in value more than
shorter-term debt instruments in response to interest rate movements. In
addition, debt securities that are not backed by the U.S. Government are
subject to credit risk, which is the risk that the issuer may not be able to
pay principal and/or interest when due.
Investments by a Nations Fund in foreign securities present additional risks.
These risks include
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restrictions on foreign investment and repatriation of capital; fluctuations in
currency exchange rates; costs of converting foreign currency into U.S. dollars
and U.S. dollars into foreign currencies; greater price volatility and less
liquidity; settlement practices, including delays, which may differ from those
customary in United States markets; exposure to political and economic risks,
including the risk of nationalization, expropriation of assets and war;
possible imposition of foreign taxes and exchange control and currency
restrictions; lack of uniform accounting, auditing and financial reporting
standards; less governmental supervision of securities markets, brokers and
issuers of securities; less financial information available to investors; and
difficulty in enforcing legal rights outside the United States. These risks
often are heightened for investments in emerging or developing countries.
Certain of the Funds may invest in securities of smaller and newer issuers.
Investments in such companies may present greater opportunities for capital
appreciation because of high potential earnings growth, but also present
greater risks than investments in more established companies with longer
operating histories and greater financial capacity.
Nations Marsico Focused Equities Fund, as a non-diversified fund, may invest in
fewer issuers than a diversified fund. Therefore, appreciation or depreciation
of an investment in a single issuer could have a greater impact on the Fund's
net asset value. The Fund reserves the right to become a diversified fund by
limiting the investments in which more than 5% of its total assets are
invested.
In addition, the Euro will become the single currency in at least 11 European
nations used in many financial transactions. Accordingly, the German mark,
French franc and other national currencies will no longer be used. Although the
impact of implementing the Euro is not possible to predict, the transition
could have an effect on the financial markets and economic environment in
Europe and other parts of the world. For example, investors may begin to view
those countries participating in the Economic Monetary Union as a single
combined entity and may alter their investment behavior accordingly. In
response to any such effect of the Euro implementation, the Adviser may need to
adapt its investment policies and strategy.
Certain of the U.S. Government Obligations that may be purchased by a Nations
Fund (or, under certain circumstances, directly by a LifeGoal Portfolio) are
not backed by the U.S. Treasury. For example, some U.S. Government Obligations
are supported only by the credit of the issuer/guarantor or by the right of the
issuer/guarantor to borrow from the U.S. Government. In addition, the market
value of U.S. Government Obligations may fluctuate due to fluctuations in
market interest rates. Certain types of U.S. Government Obligations are subject
to fluctuations in maturity, yield or value due to their structure or contract
terms.
Certain of the underlying Nations Funds may invest in derivative securities
("derivatives"). A derivative is a financial instrument whose value is based,
at least partly, on the value of an underlying stock, stock index, future or
other security. Examples of such derivatives include futures contracts,
options, interest rate and currency swap transactions. Certain types of
derivatives can, under certain circumstances, significantly increase an
investor's exposure to market or other risks.
Year 2000 Issue: Many computer programs employed throughout the world use two
digits to identify the year. Unless modified, these programs may not correctly
handle the change from "99" to "00" on January 1, 2000, and may not be able to
perform necessary functions. Any failure to adapt these programs in time could
hamper the LifeGoal Portfolios' operations. The LifeGoal Portfolios' principal
service providers have advised the LifeGoal Portfolios that they have been
actively working on implementing necessary changes to their systems, and that
they expect that their systems will be adapted in time, although there can be
no assurance of success. Because the Year 2000 issue affects virtually all
organizations, the companies or governmental entities in which the LifeGoal
Portfolios invest could be adversely impacted by the Year 2000 issue, although
the extent of such impact cannot be predicted. To the extent the impact on a
portfolio holding is negative, a LifeGoal Portfolio's return could be adversely
affected.
Please consult the SAI and the prospectus of the particular Nations Fund for
more information about investment practices and risks.
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How Performance Is Shown
From time to time, the LifeGoal Portfolios may advertise the total return and
yield of a class of shares. In addition, the LifeGoal Portfolios may advertise
the total return and yield of the Primary A Shares of certain underlying
Nations Funds. TOTAL RETURN AND YIELD FIGURES ARE BASED ON HISTORICAL DATA AND
ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. The "total return" of a class
of shares of a LifeGoal Portfolio or Nations Fund may be calculated on an
average annual total return basis or an aggregate total return basis. Average
annual total return refers to the average annual compounded rates of return
over one-, five-, and ten-year periods or the life of a LifeGoal Portfolio or
Nations Fund (as stated in a LifeGoal Portfolio's advertisement) that would
equate an initial amount invested at the beginning of a stated period to the
ending redeemable value of the investment (reflecting the deduction of any
applicable contingent deferred sales charge ("CDSC")), assuming the
reinvestment of all dividends and capital gain distributions. Aggregate total
return reflects the total percentage change in the value of the investment over
the measuring period again assuming the reinvestment of all dividends and
capital gain distributions. Total return may also be presented for other
periods or may not reflect a deduction of any applicable CDSC.
"Yield" of a class of shares of a non-money market fund is calculated by
dividing the annualized net investment income per share during a recent 30-day
(or one month) period of the class by the maximum public offering price per
share on the last day of that period. The yield on a class of shares does not
reflect deduction of any applicable CDSC. "Yield" of a class of shares of a
money market fund, such as the Nations Prime Fund, is calculated by annualizing
the income generated by an investment in such class over a seven-day period,
and showing it as a percentage of that investment. "Effective yield" assumes
reinvestment of income.
Investment performance, which will vary, is based on many factors, including
market conditions, the composition of a LifeGoal Portfolio's or Nations Fund's
portfolio and operating expenses. Investment performance also often reflects
the risks associated with a LifeGoal Portfolio's or Nations Fund's investment
objective and policies. These factors should be considered when comparing a
LifeGoal Portfolio's or Nations Fund's investment results to those of other
mutual funds and other investment vehicles. Since net asset value and yields
fluctuate, yield data cannot necessarily be used to compare an investment in
the LifeGoal Portfolios or Nations Fund with bank deposits, savings accounts,
and similar investment alternatives which often provide an agreed-upon or
guaranteed fixed yield for a stated period of time.
In addition to Investor C Shares, the LifeGoal Portfolios offer Primary A,
Primary B, Investor A and Investor B Shares. Each class of shares may bear
different sales charges, shareholder servicing fees and other expenses, which
may cause the performance of a class to differ from the performance of the
other classes. Performance quotations will be computed separately for each
class of a LifeGoal Portfolio's shares. Any fees charged by an institution
directly to its customers' accounts in connection with investments in the
LifeGoal Portfolios will not be included in calculations of total return or
yield. Any quotation of total return or yield not reflecting CDSCs would be
reduced if such sales charges were reflected. The Company's annual report will
contain additional performance information and will be available upon request
without charge from the LifeGoal Portfolios' distributor or an investor's
Institution, as defined below or by calling Nations Funds at the toll-free
number indicated on the cover of this Prospectus.
The following information shows the average annual returns of the underlying
Nations Funds in which the LifeGoal Portfolios may invest. The performance of
the underlying Nations Funds is shown for illustrative purposes only and is not
intended to show LifeGoal Portfolio performance.
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NATIONS FUNDS
AVERAGE ANNUAL RETURNS -- PRIMARY A SHARES (UNAUDITED)
<TABLE>
<CAPTION>
1-Year Period
FUND NAME (DATE OF COMMENCEMENT OF OPERATIONS) Ended 3/31/98
<S> <C>
Nations Capital Growth Fund (9/30/92) 53.89%
Nations Disciplined Equity Fund (10/1/92) 48.65%
Nations Diversified Income Fund (10/30/92) 11.07%
Nations Emerging Growth Fund (12/4/92) 45.09%
Nations Emerging Markets Fund (6/30/95) ( 6.39)%
Nations Equity Income Fund (4/11/91) 37.21%
Nations International Equity Fund (12/2/91) 16.06%
Nations International Value Fund (12/27/95) 39.92%
Nations Managed Index Fund (8/1/96) 47.54%
Nations Managed SmallCap Index Fund (10/15/96) 47.71%
Nations Marsico Focused Equities Fund (12/31/97) N/A
Nations Marsico Growth & Income Fund (12/31/97) N/A
Nations Pacific Growth Fund (6/30/95) (28.35)%
Nations Short-Intermediate Government Fund (8/1/91) 9.11%
Nations Short-Term Income Fund (9/30/92) 6.89%
Nations Small Company Growth Fund (12/12/95) 49.41%
Nations Strategic Fixed Income Fund (10/30/92) 10.53%
Nations Value Fund (9/19/89) 38.53%
Nations Prime Fund (12/15/86) 5.61%
<CAPTION>
Inception
3-Year Period 5-Year Period through
FUND NAME (DATE OF COMMENCEMENT OF OPERATIONS) Ended 3/31/98 Ended 3/31/98 3/31/98
<S> <C> <C> <C>
Nations Capital Growth Fund (9/30/92) 29.63% 19.35% 19.47%
Nations Disciplined Equity Fund (10/1/92) 31.57% 21.56% 27.15%
Nations Diversified Income Fund (10/30/92) 9.05% 7.63% 8.73%
Nations Emerging Growth Fund (12/4/92) 25.18% 19.30% 17.92%
Nations Emerging Markets Fund (6/30/95) N/A N/A 2.97%
Nations Equity Income Fund (4/11/91) 25.40% 17.82% 17.18%
Nations International Equity Fund (12/2/91) 12.09% 10.68% 8.47%
Nations International Value Fund (12/27/95) N/A N/A 22.91%
Nations Managed Index Fund (8/1/96) N/A N/A 41.04%
Nations Managed SmallCap Index Fund (10/15/96) N/A N/A 29.41%
Nations Marsico Focused Equities Fund (12/31/97) N/A N/A 21.30%
Nations Marsico Growth & Income Fund (12/31/97) N/A N/A 20.30%
Nations Pacific Growth Fund (6/30/95) N/A N/A (9.86)%
Nations Short-Intermediate Government Fund (8/1/91) 6.71% 5.08% 6.66%
Nations Short-Term Income Fund (9/30/92) 6.74% 5.45% 5.45%
Nations Small Company Growth Fund (12/12/95) N/A N/A 25.39%
Nations Strategic Fixed Income Fund (10/30/92) 7.90% 6.07% 6.80%
Nations Value Fund (9/19/89) 28.85% 20.29% 16.64%
Nations Prime Fund (12/15/86) 5.59% 4.96% 6.00%
</TABLE>
How The LifeGoal Portfolios Are Managed
The business and affairs of the Company are managed under the supervision and
direction of its Board of Directors. The LifeGoal Portfolios' SAI contains the
names of and general background information concerning each Director of the
Company.
As described below, each LifeGoal Portfolio is advised by NBAI which is
responsible for the overall management and supervision of the investment
management of each LifeGoal Portfolio. Each LifeGoal Portfolio also is
sub-advised by TradeStreet which as a general matter is responsible for the
day-to-day investment decisions for the respective LifeGoal Portfolio.
The Company and the Adviser have adopted codes of ethics which contain policies
on personal securities transactions by "access persons," including portfolio
managers and investment analysts. These policies substantially comply in all
material respects with the recommendations set forth in the May 9, 1994 Report
of the Advisory Group on Personal Investing of the Investment Company
Institute.
NationsBank Corporation, the parent company of NationsBank, has signed an
agreement to merge with BankAmerica Corporation. The proposed merger is subject
to certain regulatory approvals and must be approved by shareholders of both
holding companies. The merger is expected to close in the second half of 1998.
NationsBank and NBAI have advised the LifeGoal Portfolios that the merger will
not reduce the level or quality of advisory and other services provided to the
LifeGoal Portfolios.
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Investment Adviser: NationsBanc Advisors, Inc. serves as investment adviser to
the LifeGoal Portfolios and the Nations Funds. NBAI is a wholly owned
subsidiary of NationsBank, which in turn is a wholly owned banking subsidiary
of NationsBank Corporation, a bank holding company organized as a North
Carolina corporation. NBAI has its principal offices at One NationsBank Plaza,
Charlotte, North Carolina 28255.
TradeStreet Investment Associates, Inc., with principal offices at One
NationsBank Plaza, Charlotte, North Carolina 28255, serves as investment
sub-adviser to the LifeGoal Portfolios and the Nations Funds. TradeStreet is a
wholly owned subsidiary of NationsBank. TradeStreet provides investment
management services to individuals, corporations and institutions.
Gartmore Global Partners ("Gartmore"), with principal offices at One
NationsBank Plaza, Charlotte, North Carolina, 28255, serves as the investment
sub-adviser to three of the underlying Nations Funds. Gartmore is a joint
venture structured as a general partnership between NB Partner Corp., a wholly
owned subsidiary of NationsBank, and Gartmore U.S. Limited, an indirect, wholly
owned subsidiary of Gartmore Investment Management plc, a UK company which is
the holding company for a leading UK based international fund management group
of companies. National Westminster Bank plc and affiliated entities own 100% of
the equity of Gartmore Investment Management plc.
Brandes Investment Partners, L.P. ("Brandes"), with principal offices at 12750
High Bluff Drive, San Diego, California 92130, serves as investment sub-adviser
to one of the underlying Nations Funds -- Nations International Value Fund.
Marsico Capital Management, LLC ("Marsico Capital"), located at 1200 17th
Street, Suite 1300, Denver, Colorado 80202, serves as the investment sub-adviser
to two of the underlying Nations Funds -- Nations Marsico Focused Equities Fund
and Nations Marsico Growth & Income Fund. NationsBank has an option to purchase
up to 50% of Marsico Capital.
Subject to the general supervision of the Company's Board of Directors, and in
accordance with each LifeGoal Portfolio's investment policies, the Adviser is
responsible for allocating and reallocating each LifeGoal Portfolio's assets
among the Nations Funds in which it invests, and for rebalancing such portfolio
allocations. A LifeGoal Portfolio's investments are continuously monitored and
are reallocated as often as the Adviser deems appropriate. In addition,
portfolio allocations and performance are reviewed quarterly for rebalancing at
the discretion of the Adviser.
The Adviser has the ability to change the particular Nations Funds used as
underlying investments for the LifeGoal Portfolios. Among other things, the
Adviser may substitute or include other funds from the Nations Funds Family,
including any introduced subsequent to this Prospectus, as permissible
investments for the LifeGoal Portfolios. In the event the Adviser seeks to
invest the assets of a LifeGoal Portfolio in a Nations Fund not identified in
this Prospectus, the Company will amend or supplement the Prospectus to include
all pertinent information.
Both the LifeGoal Portfolios and Nations Funds have investment advisory
arrangements with NBAI. NBAI is entitled to receive advisory fees at an annual
rate of .25% of the average daily net assets of each LifeGoal Portfolio. NBAI
also has agreed to absorb all other expenses of the LifeGoal Portfolios (except
taxes, brokerage fees and commissions, extraordinary expenses, and any
applicable Rule 12b-1 fees, shareholder servicing fees and/or shareholder
administration fees). NBAI, in turn, compensates TradeStreet for sub-advisory
services at an annual rate of .05% of the average daily net assets of each
LifeGoal Portfolio. NBAI also receives advisory fees at varying rates from the
underlying Nations Funds, and pays TradeStreet, Gartmore, Brandes and Marsico
Capital sub-advisory fees for their services to the underlying Nations Funds.
From time to time, the Adviser may waive or reimburse (either voluntarily or
pursuant to applicable state expense limitations) advisory fees and/or expenses
payable by a LifeGoal Portfolio. Once commenced, waiver and reimbursement
arrangements may be discontinued at any time. In addition, the Adviser may from
time to time compensate Agents, as defined below, for providing certain
services to Customers. LifeGoal Portfolio's shareholders will indirectly pay
their proportionate share of the advisory fees and other expenses of any
Nations Fund in which the LifeGoal Portfolios are invested.
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<PAGE>
For the fiscal year ended March 31, 1998, the LifeGoal Portfolios paid NBAI
advisory fees at the indicated rates of the following LifeGoal Portfolios'
average daily net assets: Nations LifeGoal Growth Portfolio -- .25%; Nations
LifeGoal Balanced Growth Portfolio -- .25%; and Nations LifeGoal Income and
Growth Portfolio -- .25%.
For the fiscal year ended March 31, 1998, NBAI paid TradeStreet sub-advisory
fees at the indicated rates of the following LifeGoal Portfolios' average daily
net assets: Nations LifeGoal Growth Portfolio -- .05%; Nations LifeGoal
Balanced Growth Portfolio -- .05%; and Nations LifeGoal Income and Growth
Portfolio -- .05%.
NBAI, TradeStreet and certain of their affiliates provide advisory and other
services to Nations Funds for which they receive compensation. The level of
compensation received and services provided by them differs among the various
Nations Funds. These differences subject the Adviser to conflicts of interest,
in that the Adviser could increase its fee income or that of its affiliates, or
attain other direct or indirect benefits, by allocating LifeGoal Portfolio
assets to underlying Nations Funds that pay higher fees or provide other
benefits.
The Co-Portfolio Managers for the LifeGoal Portfolios are E. Keith Wirtz and C.
Thomas Clapp.
Mr. Wirtz is Managing Director and Chief Investment Officer of TradeStreet and
has been responsible for the Firm's investment staff, strategy and policy since
December 1996. Prior to assuming his position with TradeStreet, from April 1992
through December 1996, he was Senior Vice President and Chief Investment
Officer of Bank of America's Investment Management Division. Mr. Wirtz has
worked in the investment community since 1981. His past experience includes
domestic and international portfolio management for both private and
institutional clients. Mr. Wirtz received his B.S. in Finance from Arizona
State University. He holds the Chartered Financial Analyst designation and is a
member of the Association for Investment Management and Research, as well as
the Los Angeles Analyst Society.
Mr. Clapp is Director of the Equity Management Group for TradeStreet. Prior to
assuming his position with TradeStreet in 1995, he was Senior Vice President
and Director of Research for the Investment Management Group at NationsBank.
Prior to joining NationsBank in 1992, Mr. Clapp was a Senior Portfolio Manager
with Royal Insurance Group. Mr. Clapp has worked in the investment community
since 1984. He received his B.A. in Economics from the University of North
Carolina at Chapel Hill and an M.B.A. from the University of South Carolina. He
holds the Chartered Financial Analyst designation and is a member of the
Association for Investment Management and Research as well as the North
Carolina Society of Financial Analysts, Inc.
Morrison & Foerster LLP, counsel to the Company and Nations Funds, and special
counsel to NationsBank and certain of its affiliates, has advised the Company
and Nations Funds that NationsBank and its affiliates may perform the services
contemplated by the various investment advisory agreements and this Prospectus
without violation of the Glass-Steagall Act. Such counsel has pointed out,
however, that there are no controlling judicial or administrative
interpretations or decisions and that future judicial or administrative
interpretations of, or decisions relating to, present federal or state
statutes, including the Glass-Steagall Act, and regulations relating to the
permissible activities of banks and their subsidiaries or affiliates, as well
as future changes in such federal or state statutes, regulations and judicial
or administrative decisions or interpretations, could prevent such entities
from continuing to perform, in whole or in part, such services. If any such
entity were prohibited from performing any of such services, it is expected
that new agreements would be proposed or entered into with another entity or
entities qualified to perform such services.
Other Service Providers: Stephens Inc. ("Stephens"), a registered broker-dealer
with principal offices at 111 Center Street, Little Rock, Arkansas 72201,
serves as the administrator of the LifeGoal Portfolios pursuant to an
Administration Agreement. Pursuant to the terms of the Administration
Agreement, Stephens provides various administrative and corporate secretarial
services to the LifeGoal Portfolios, including providing general oversight of
other service providers, office space, utilities and various legal and
administrative services in connection with the satisfaction of various regu-
21
<PAGE>
latory requirements applicable to the LifeGoal Portfolios. Stephens will not
receive any fees from the LifeGoal Portfolios for these services.
First Data Investor Services Group, Inc. ("First Data"), a wholly owned
subsidiary of First Data Corporation, with principal offices at One Exchange
Place, Boston, Massachusetts 02109, serves as the co-administrator of the
LifeGoal Portfolios. Under the Co-Administration Agreement, First Data provides
various administrative and accounting services to the LifeGoal Portfolios
including performing the calculations necessary to determine net asset value
per share and dividends, preparing tax returns and financial statements and
maintaining the portfolio records and certain of the general accounting records
for the LifeGoal Portfolios. For the services rendered pursuant to the
Co-Administration Agreement, First Data is entitled to receive a fee of $10,000
per year per LifeGoal Portfolio, which will be absorbed by NBAI.
For the fiscal period ended March 31, 1998, the LifeGoal Portfolios paid First
Data the following amounts for administration services: Nations LifeGoal Growth
Portfolio -- $4,959; Nations LifeGoal Balanced Growth Portfolio -- $4,959;
and Nations LifeGoal Income and Growth Portfolio -- $4,959.
Shares of the LifeGoal Portfolios are sold on a continuous basis by Stephens,
as the LifeGoal Portfolios' sponsor and distributor. The LifeGoal Portfolios
have entered into distribution agreements with Stephens which provide that
Stephens has the exclusive right to distribute shares of the LifeGoal
Portfolios. Stephens may pay service fees or commissions to Institutions that
assist customers in purchasing Investor C Shares of LifeGoal Portfolios.
First Data serves as the transfer agent (the "Transfer Agent") for each of
LifeGoal Portfolio's Investor C Shares. NationsBank serves as custodian for the
assets of each LifeGoal Portfolio.
Stephens, First Data, and NationsBank all provide services at the underlying
Nations Funds level and are compensated directly by such Nations Funds for
those services.
PriceWaterhouseCoopers LLP serves as independent accountant to the Company.
Their address is 160 Federal Street, Boston, Massachusetts 02110.
Expenses: Certain administrative and other fees and expenses will be charged at
the LifeGoal Portfolios and Nations Funds levels. However, redundancies of fees
and expenses between the LifeGoal Portfolios and Nations Funds will be minimal,
because distinct services are being provided at each fund level. For example,
the LifeGoal Portfolios pay advisory fees to the Adviser for its services in
allocating LifeGoal Portfolio assets among the underlying Nations Funds. These
services are distinct from the services provided by the Adviser to the Nations
Funds in managing the Nations Funds' individual portfolio securities.
NBAI, under its investment advisory agreement with the LifeGoal Portfolios, has
agreed to absorb all expenses of the LifeGoal Portfolios, except taxes,
brokerage fees and commissions, extraordinary expenses and any applicable Rule
12b-1 fees, shareholder servicing fees and/or shareholder administration fees.
The LifeGoal Portfolios' expenses that will be absorbed by NBAI include, but
are not limited to: fees paid to service providers other than the Adviser;
interest; directors' fees; federal and state securities registration and
qualification fees; costs of preparing and printing prospectuses for regulatory
purposes and for distribution to existing shareholders; certain insurance
premiums; outside auditing and legal expenses; and costs of shareholder reports
and shareholder meetings. Investor C Shares also bear certain class specific
expenses, which are described under "Shareholder Servicing and Distribution
Plans," below.
The LifeGoal Portfolios do not pay any front-end sales loads or contingent
deferred sales charges in connection with the purchase or redemption of shares
of the Nations Funds. By investing in Primary A Shares of the Nations Funds,
the LifeGoal Portfolios also will not be subject to any asset-based sales
charges or service fees. The sales charges or service fees associated with
purchase of shares of the LifeGoal Portfolios will not exceed the limits set
forth in Rule 2830 of the Conduct Rules of the NASD when aggregated with sales
charges or service fees, if any, that the LifeGoal Portfolios pay relating to
Nations Funds shares.
The LifeGoal Portfolios' share of the Nations Funds' expenses may include
expenses that the LifeGoal Portfolios would not have incurred if it had not
been structured as a "fund of funds." For example,
22
<PAGE>
if a portfolio manager of one Nations Fund purchases the same securities that
the portfolio manager of another Nations Fund is selling, there may be
transaction charges and commissions that achieve little or no benefit for the
LifeGoal Portfolios. Such transactions will be rare because the Nations Funds
pursue a broad range of investment strategies, and therefore invest in
different types of securities.
Organization And History
The LifeGoal Portfolios are members of the Nations Funds Family, which consists
of the Company, Nations Funds Trust, Nations Fund, Inc., Nations Fund
Portfolios, Inc., Nations Annuity Trust and Nations Institutional Reserves. The
Nations Funds Family currently has more than 60 distinct investment portfolios
and total assets in excess of
$40 billion.
Nations LifeGoal Funds, Inc.: The Company was incorporated in Maryland on July
3, 1996 and commenced operations on October 2, 1996, and shares were offered to
the public on October 15, 1996. The Company's fiscal year end is March 31. As
of the date of this Prospectus, the authorized capital stock of Nations
LifeGoal Funds, Inc. consists of 1,200,000,000 shares of common stock, par
value of $.001 per share, which are divided into series or portfolios, each of
which includes several classes of shares. This Prospectus relates to the
Investor C Shares of the following three portfolios of the Company: LifeGoal
Growth Portfolio, LifeGoal Balanced Growth Portfolio and LifeGoal Income and
Growth Portfolio. To obtain additional information regarding the LifeGoal
Portfolios' other classes of shares which may be available to you, contact your
Agent, (as defined below) or Nations Funds at 1-800-321-7854.
Shares of each Portfolio and class have equal rights with respect to voting,
except that the holders of shares of a particular Portfolio or class will have
the exclusive right to vote on matters affecting only the rights of the holders
of such Portfolio or class. In the event of dissolution or liquidation, holders
of each class will receive pro rata, subject to the rights of creditors, (a)
the proceeds of the sale of that portion of the assets allocated to that class
held in the respective Portfolio of the Company, less (b) the liabilities of
the Company attributable to the respective Portfolio or class or allocated
among the Portfolios or classes based on the respective liquidation value of
each Portfolio or class.
Shareholders of the Company do not have cumulative voting rights, and therefore
the holders of more than 50% of the outstanding shares of all Portfolios voting
together for election of directors may elect all of the members of the Board of
Directors of the Company. Meetings of shareholders may be called upon the
request of 10% or more of the outstanding shares of the Company. There are no
preemptive rights applicable to any of the Company's shares. The Company's
shares, when issued, will be fully paid and non-assessable.
As of August 1, 1998, NationsBank and its affiliates possessed or shared power
to dispose of or vote with respect to more than 25% of the outstanding shares
of the Company and therefore could be considered to be a controlling person of
the Company and each of the LifeGoal Portfolios for purposes of the 1940 Act.
For more detailed information concerning the percentage of each class or series
over which NationsBank and its affiliates possessed or shared power to dispose
or vote as of a certain date, see the SAI. It is anticipated that the Company
will not hold annual shareholder meetings on a regular basis unless required by
the 1940 Act or Maryland law.
23
<PAGE>
About Your Investment
How To Buy Shares
This Prospectus offers one class of shares to the general public. Investor C
Shares are sold without an initial sales charge and are subject to a CDSC upon
certain redemptions. Contact your Agent or Nations Funds at 1-800-321-7854 for
more information.
The LifeGoal Portfolios have established various procedures for purchasing
Investor C Shares in order to accommodate different investors. Purchase orders
for Investor C Shares may be placed through banks, broker/dealers or other
financial institutions (including certain affiliates of NationsBank) that have
entered into a shareholder servicing agreement ("Servicing Agreement") with
Nations Funds ("Servicing Agents") and/or a sales support agreement ("Sales
Support Agreement") with Stephens ("Selling Agents").
The LifeGoal Portfolios reserve the right, in their discretion, to make
Investor C Shares available to other categories of investors, including those
who become eligible in connection with a merger or reorganization.
There is a minimum initial investment of $1,000, except that the minimum
initial investment is:
o $500 for "IRA" investors;
o $250 for non-working spousal IRAs; and
o $100 for investors participating on a monthly basis in the Systematic
Investment Plan described below.
There is no minimum investment amount for investments by 401(k) plans,
simplified employee pension plans ("SEPs"), salary reduction-simplified
employee pension plans ("SAR-SEPs"), Savings Incentives Method Plans for
Employees ("SIMPLE IRAs"), salary reduction-Individual Retirement Accounts
("SAR-IRAs") or similar types of accounts. However, the assets of such plans
must reach an asset value of $1,000 ($500 for SEPs, SAR-SEPs, SIMPLE IRAs, and
SAR-IRAs) within one year of the account open date. If the assets of such plans
do not reach the minimum asset size within one year, the Company reserves the
right to redeem the shares held by such plans on 60 days' written notice. The
minimum subsequent investment is $100, except for investments pursuant to the
Systematic Investment Plan described below.
Investor C Shares may be purchased at net asset value per share without the
imposition of a sales charge, but are subject to a CDSC if redeemed within one
year after purchase. Purchases may be effected on days on which the New York
Stock Exchange (the "Exchange") is open for business (a "Business Day").
The Servicing Agents will provide various shareholder services for, and the
Selling Agents will provide sales support assistance to, their respective
customers ("Customers") who own Investor C Shares. Servicing Agents and Selling
Agents are sometimes referred to hereafter as "Agents." From time to time the
Agents, Stephens and Nations Funds may agree to voluntarily reduce the maximum
fees payable for sales support or shareholder services.
The Company and Stephens reserves the right to reject any purchase order. The
issuance of Investor C Shares is recorded on the books of the LifeGoal
Portfolios, and share certificates are not issued unless expressly requested in
writing. Certificates are not issued for fractional shares.
Effective Time of Purchases: Purchase orders for Investor C Shares in the
LifeGoal Portfolios which are received by Stephens, the Transfer Agent or their
respective agents before the close of regular trading on the Exchange
(currently 4:00 p.m., Eastern time) on any Business Day are priced according to
the net asset value determined on that day. In the event that the Exchange
closes early, purchase orders received prior to closing will be priced as of
the time the Exchange closes and purchase orders received after the Exchange
closes will be
24
<PAGE>
deemed received on the next Business Day and priced according to the net asset
value determined on the next Business Day. Purchase orders are not executed
until 4:00 p.m., Eastern time, on the Business Day on which immediately
available funds in payment of the purchase price are received by the
Portfolios' Custodian. Such payment must be received no later than 4:00 p.m.,
Eastern time, by the third Business Day following receipt of the order, as
determined above. If funds are not received by such date, the order will not be
accepted and notice thereof will be given to the Agent placing the order.
Payment for orders which are not received or accepted will be returned after
prompt inquiry to the sending Agent.
The Agents are responsible for transmitting orders for purchases of Investor C
Shares by their Customers, and delivering required funds, on a timely basis.
Stephens is responsible for transmitting orders it receives to the Company.
Systematic Investment Plan: Under the LifeGoal Portfolios' Systematic
Investment Plan ("SIP"), a shareholder may automatically purchase Investor C
Shares. On a bi-monthly, monthly or quarterly basis, a shareholder may direct
cash to be transferred automatically from his/her checking or savings account
at any bank which is a member of the Automated Clearing House to his/her
LifeGoal Portfolio account. Transfers will occur on or about the 15th and/or
the last day of the applicable month. Subject to certain exceptions for
employees of NationsBank and its affiliates and pre-existing SIP accounts, the
systematic investment amount may be in any amount from $50 to $100,000. For
more information concerning the SIP, contact your Agent.
Telephone Transactions: Investors may effect purchases, redemptions (up to
$50,000) and exchanges by telephone. See "How To Redeem Shares" and "How To
Exchange Shares" below. If a shareholder desires to elect the telephone
transaction feature after opening an account, a signature guarantee will be
required. Shareholders should be aware that by using the telephone transaction
feature, such shareholders may be giving up a measure of security that they may
have if they were to authorize written requests only. A shareholder may bear
the risk of any resulting losses from a telephone transaction. The Company will
employ reasonable procedures to confirm that instructions communicated by
telephone are genuine, and if the Company and its service providers fail to
employ such measures, they may be liable for any losses due to unauthorized or
fraudulent instructions. The Company requires a form of personal identification
prior to acting upon instructions received by telephone and provides written
confirmation to shareholders of each telephone share transaction. In addition,
the Company reserves the right to record all telephone conversations.
Shareholders should be aware that during periods of significant economic or
market change, telephone transactions may be difficult to complete.
Investor C Shares -- Charges and Features
Investor C Contingent Deferred Sales Charge: Subject to certain waivers,
Investor C Shares of LifeGoal Portfolios that are redeemed within one year of
the date of purchase will be subject to a CDSC equal to 1.00% of the lesser of
the net asset value or the purchase price of the shares being redeemed. No CDSC
is imposed on increases in net asset value above the initial purchase price,
including shares acquired by reinvestment of distributions.
Solely for purposes of determining the period of time that has elapsed from the
purchase of any Investor C Shares, all purchases during a month will be
aggregated and deemed to have been made on the last day of the month. In
determining whether a CDSC is applicable to a redemption, the calculation will
be made in the manner that results in the lowest possible charge being
assessed. In this regard, it will be assumed that the redemption is first of
shares held for the longest period of time or shares acquired pursuant to
reinvestment of dividends or distributions. The charge will not be applied
25
<PAGE>
to dollar amounts representing an increase in the net asset value since the
time of purchase.
The CDSC will be waived on redemptions of Investor C Shares (i) following the
death or disability (as defined in the Internal Revenue Code of 1986, as
amended (the "Code")) of a shareholder (including a registered joint owner),
(ii) in connection with the following retirement plan distributions: (a) lump-
sum or other distributions from a qualified corporate or self-employed
retirement plan following retirement (or in the case of a "key employee" of a
"top heavy" plan, following attainment of age 59 1/2); (b) distributions from
an IRA, or Custodial Account under Section 403(b)(7) of the Code, following
attainment of age 59 1/2; (c) a tax-free return of an excess contribution to an
IRA; and (d) distributions from a qualified retirement plan that are not
subject to the 10% additional Federal withdrawal tax pursuant to Section
72(t)(2) of the Code, (iii) payments made to pay medical expenses which exceed
7.5% of income and distributions to pay for insurance by an individual who has
separated from employment and who has received unemployment compensation under
a federal or state program for at least 12 weeks, (iv) effected pursuant to
Nations Funds' right to liquidate a shareholder's account, including instances
where the aggregate net asset value of the Investor C shares held in the
account is less than the minimum account size, (v) effected pursuant to the
Automatic Withdrawal Plan discussed below, provided that such redemptions do
not exceed, on an annual basis, 12% of the net asset value of the Investor C
Shares in the account, and (vi) in connection with the combination of Nations
Funds with any other registered investment company by a merger, acquisition of
assets or by any other transaction. In addition, the CDSC will be waived on
Investor C Shares purchased before September 30, 1994 by current or retired
employees of NationsBank and its affiliates or by current or former Trustees or
Directors of Nations Funds or other management companies managed by
NationsBank. Shareholders are responsible for providing evidence sufficient to
establish that they are eligible for any waiver of the CDSC.
Reinstatement Privilege: Within 120 days after a redemption of Investor C
Shares of the Fund, a shareholder may reinvest any portion of the proceeds of
such redemption in Investor C Shares of the Fund. The amount which may be
so reinvested is limited to an amount up to, but not exceeding, the redemption
proceeds (or to the nearest full share if fractional shares are not purchased).
A shareholder exercising this privilege would receive a pro rata credit for any
CDSC paid in connection with the prior redemption. A shareholder may not
exercise this privilege with the proceeds of a redemption of shares previously
purchased through the reinvestment privilege. In order to exercise this
privilege, a written order for the purchase of Investor C Shares must be
received by the Transfer Agent or by Stephens within 120 days after the
redemption.
Automatic Withdrawal Plan: An Automatic Withdrawal Plan ("AWP") may be
established by a new or existing shareholder of the Fund if the value of the
Investor C Shares in his/her accounts within the Nations Funds Family (valued at
the net asset value at the time of the establishment of the AWP) equals $10,000
or more. Investor C Shares redeemed under the AWP will not be subject to a CDSC,
provided that the shares so redeemed do not exceed, on an annual basis 12% of
the net value of the Investor C Shares in the account. Otherwise, any applicable
CDSC will be imposed on shares redeemed under the AWP. Shareholders who elect to
establish an AWP may receive a monthly, quarterly or annual check or automatic
transfer to a checking or savings account in a stated amount of not less than
$25 on or about the 10th or 25th day of the applicable month of withdrawal.
Investor C Shares will be redeemed (net of any applicable CDSC) as necessary to
meet withdrawal payments. Withdrawals will reduce principal and may eventually
deplete the shareholder's account. If a shareholder desires to establish an AWP
after opening an account, a signature guarantee will be required. An AWP may be
terminated by a shareholder on 30 days' written notice to his/her Agent or by
Nations Funds at any time.
26
<PAGE>
How To Redeem Shares
Redemption orders should be transmitted by telephone or in writing through the
same Agent that transmitted the original purchase order. Redemption orders for
Investor C Shares of the LifeGoal Portfolios which are received by Stephens,
the Transfer Agent or their respective agents before the close of regular
trading on the Exchange (currently 4:00 p.m., Eastern time) on any Business Day
are priced according to the net asset value next determined after acceptance of
the order. In the event that the Exchange closes early, redemption orders
received prior to closing will be priced as of the time the Exchange closes and
redemption orders received after the Exchange closes will be deemed received on
the next Business Day and priced according to the net asset value determined on
the next Business Day. Redemption orders are effected at the net asset value
per share next determined after receipt of the order by Stephens or by the
Transfer Agent or their respective agents, less any applicable CDSC. The Agents
are responsible for transmitting redemption orders to Stephens or to the
Transfer Agent or their respective agents and for crediting their Customers'
accounts with the redemption proceeds on a timely basis. No charge for wiring
redemption payments is imposed by the Company. There is no redemption charge.
Redemption proceeds are normally wired to the redeeming Agent within three
Business Days after receipt of the order by Stephens or by the Transfer Agent
or their respective agents. However, redemption proceeds for shares purchased
by check may not be remitted until at least 15 days after the date of purchase
to ensure that the check has cleared; a certified check, however, is deemed to
be cleared immediately.
The Company may redeem a shareholder's Investor C Shares upon 60 days' written
notice if the balance in the shareholder's account drops below $500 as a result
of redemptions. Share balances also may be redeemed at the direction of an
Agent pursuant to arrangements between the Agent and its Customers. The Company
also may redeem shares of the LifeGoal Portfolios involuntarily or make payment
for redemption in readily marketable securities or other property under certain
circumstances in accordance with the 1940 Act.
Prior to effecting a redemption of Investor C Shares represented by
certificates, the Transfer Agent must have received such certificates at its
principal office. All such certificates must be endorsed by the redeeming
shareholder or accompanied by a signed stock power, in each instance with the
signature guaranteed by a commercial bank or a member of a major stock
exchange, unless other arrangements satisfactory to the Company have previously
been made. The Company may require any additional information reasonably
necessary to evidence that a redemption has been duly authorized.
How To Exchange Shares
The exchange feature enables a shareholder of Investor C Shares of a LifeGoal
Portfolio to acquire Investor C Shares of any other non-money market fund in
the Nations Funds Family (other than an index fund) (which includes both
LifeGoal Portfolios and Nations Funds) or Daily Shares of any Nations Funds
Money Market Fund when that shareholder believes that a shift between funds is
an appropriate investment decision. However, Investor C Shares of a non-money
market fund may not be exchanged for Investor C Shares of Nations Short-Term
Income Fund or Nations Short-Term Municipal Income Fund until one year after
purchase. A qualifying exchange is based on the next calculated net asset value
per share of each fund after the exchange order is received.
The LifeGoal Portfolios and each of the other funds of the Nations Funds Family
may limit the number of times this exchange feature may be exercised by a
shareholder within a specified period of time. Also, the exchange feature may
be terminated or revised at any time by the Company upon such notice as may be
required by applicable regu-
27
<PAGE>
latory agencies (presently 60 days for termination or material revision),
provided that the exchange feature may be terminated or materially revised
without notice under certain unusual circumstances.
The current prospectus for each Fund describes its investment objective and
policies, and shareholders should obtain a copy and examine it carefully before
investing. Exchanges are subject to the minimum investment requirement and any
other conditions imposed by each fund. In the case of any shareholder holding a
share certificate or certificates, no exchanges may be made until all
applicable share certificates have been received by the Transfer Agent and
deposited in the shareholder's account. An exchange will be treated for federal
income tax purposes the same as a redemption of shares, on which the
shareholder may realize a capital gain or loss. However, the ability to deduct
capital losses on an exchange may be limited in situations where there is an
exchange of shares within 90 days after the shares are purchased.
The Investor C Shares exchanged must have a current value of at least $1,000
(except for exchanges through the Automatic Exchange Feature, which is
described below). Nations Funds and Stephens reserve the right to reject any
exchange request. Only shares that may legally be sold in the state of the
investor's residence may be acquired in an exchange. Only shares of a class
that is accepting investments generally may be acquired in an exchange. An
investormay telephone an exchange request by calling his/her Agent which is
responsible for transmitting such request to Stephens or to the Transfer Agent.
During periods of significant economic or market change, telephone exchanges
may be difficult to complete. In such event, shares may be exchanged by mailing
the request directly to the Agent through which the original shares were
purchased. An investor should consult his/her Agent or Stephens for further
information regarding exchanges.
Automatic Exchange Feature: Under the LifeGoal Portfolios' Automatic Exchange
Feature ("AEF") a shareholder may automatically exchange at least $25 on a
monthly or quarterly basis. A shareholder may direct proceeds to be exchanged
from one Nations Fund to another as allowed by the applicable exchange rules
within the prospectus. Exchanges will occur on or about the 15th or the last
day of the applicable month. The shareholder must have an existing position in
both funds in order to establish the AEF. This feature may be established by
directing a request to the Transfer Agent by telephone or in writing. For
additional information, an investor should contact his/her Selling Agent or
Nations Funds.
Shareholder Servicing And Distribution Plans
Pursuant to Rule 12b-1 under the 1940 Act, the Directors have approved a
Distribution Plan with respect to Investor C Shares of the LifeGoal Portfolios.
Pursuant to the Distribution Plan, the LifeGoal Portfolios may compensate or
reimburse Stephens for any activities or expenses primarily intended to result
in the sale of the LifeGoal Portfolios' Investor C Shares. Payments under the
Investor C Distribution Plan will be calculated daily and paid monthly at a
rate or rates set from time to time by the Directors, provided that the annual
rate may not exceed .75% of the average daily net asset value of the
Portfolios' Investor C Shares.
The fees payable under the Distribution Plan are used (i) to compensate Selling
Agents for providing sales support assistance relating to Investor C Shares,
(ii) to pay for promotional activities intended to result in the sale of
Investor C Shares such as the preparation, printing and distribution of
prospectuses to other than current shareholders, and (iii) to compensate
Selling Agents for providing sales support services with respect to their
Customers who are, from time to time, beneficial and record holders of Investor
C Shares. Currently, substantially all fees paid pursuant to the Distribution
Plan are paid to compensate Selling Agents for providing the services described
in (i) and (iii) above, with
28
<PAGE>
any remaining amounts being used by Stephens to partially defray other expenses
incurred by Stephens in distributing Investor C Shares. Fees received by
Stephens pursuant to the Distribution Plan will not be used to pay any interest
expenses, carrying charges or other financing costs (except to the extent
permitted by the SEC) and will not be used to pay any general and
administrative expenses of Stephens.
The Company and Stephens may suspend or reduce payments under the Distribution
Plan at any time, and payments are subject to the continuation of the
Distribution Plan described above and the terms of the Sales Support Agreement
between Selling Agents and Stephens. See the SAI for more details on the
Distribution Plan.
The Directors also have approved a shareholder servicing plan ("Servicing
Plan") for the Portfolios which permits the LifeGoal Portfolios to compensate
Servicing Agents for services provided to their Customers that own Investor C
Shares. Payments under the Servicing Plan are calculated daily and paid monthly
at a rate or rates set from time to time by the LifeGoal Portfolios, provided
that the annual rate may not exceed .25% of the average daily net asset value
of the LifeGoal Portfolios' Investor C Shares.
The fees payable under the Servicing Plan are used primarily to compensate or
reimburse Servicing Agents for shareholder services provided, and related
expenses incurred, by such Servicing Agents. The shareholder services provided
by Servicing Agents may include: (i) aggregating and processing purchase and
redemption requests for Investor C Shares from Customers and transmitting net
purchase and redemption orders to Stephens or the Transfer Agent; (ii)
providing Customers with a service that invests the assets of their accounts in
Investor C Shares pursuant to specific or preauthorized instructions; (iii)
processing dividend and distribution payments from the LifeGoal Portfolios on
behalf of Customers; (iv) providing information periodically to Customers
showing their positions in Investor C Shares; (v) arranging for bank wires; and
(vi) providing general shareholder liaison services.
The Company may suspend or reduce payments under the Servicing Plan at any
time, and payments are subject to the continuation of the Servicing Plan
described above and the terms of the Servicing Agreements. See the SAI for more
details on the Servicing Plan.
The Company understands that Agents may charge fees to their Customers who are
the owners of Investor C Shares for various services provided in connection
with a Customer's account. These fees would be in addition to any amounts
received by a Selling Agent under its Sales Support Agreement with Stephens or
by a Servicing Agent under its Servicing Agreement with the Company. The Sales
Support Agreements and Servicing Agreements require Agents to disclose to their
Customers any compensation payable to the Agent by Stephens or the Company and
any other compensation payable by the Customers for various services provided
in connection with their accounts. Customers should read this Prospectus in
light of the terms governing their accounts with their Agents.
The Adviser may also pay out of its own assets amounts to Stephens or other
broker/dealers in connection with the provision of administrative and/or
distribution related services to shareholders.
In addition, Stephens may, from time to time, at its expense or as an expense
for which it may be reimbursed under the Distribution Plan, pay a bonus or
other consideration or incentive to Agents who sell a minimum dollar amount of
shares of the LifeGoal Portfolios during a specified period of time. Stephens
may also, from time to time, pay additional consideration to Agents not to
exceed .75% of the offering price per share on all sales of Investor C Shares
as an expense of Stephens or for which Stephens may be reimbursed under the
plan adopted pursuant to Rule 12b-1 or upon receipt of a CDSC. Any such
additional consideration or incentive program may be terminated at any time by
Stephens.
Stephens has also established a non-cash compensation program, pursuant to
which broker/dealers or financial institutions that sell shares of the LifeGoal
Portfolios may earn additional compensation in the form of trips to sales
seminars or vacation destinations, tickets to sporting events, theater or other
entertainment, opportunities to participate in golf or other outings and gift
certificates for meals or merchandise. This non-cash compensation program may
be amended or terminated at any time by Stephens.
29
<PAGE>
How The LifeGoal Portfolios Value Their Shares
The net asset value of a share of each class is calculated by dividing the
total value of its assets, less liabilities, by the number of shares in the
class outstanding. Shares of the LifeGoal Portfolios are valued as of the close
of regular trading, on the Exchange (currently 4:00 p.m., Eastern time) on each
Business Day. In the event that the Exchange closes early, shares of the
LifeGoal Portfolios will be priced as of the time the Exchange closes.
Currently, the days on which the Exchange is closed (other than weekends) are:
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day (observed), Independence Day, Labor Day, Thanksgiving and
Christmas.
The Nations Funds determine their net asset value per share on a daily basis.
The net asset value of the LifeGoal Portfolio shares will be determined by
reference to the net asset value of the underlying Nations Fund.
How Dividends And Distributions Are Made; Tax Information
Dividends and Distributions
Each LifeGoal Portfolio declares and pays dividends from net investment income
quarterly. Each LifeGoal Portfolio's net realized capital gains (including net
short-term capital gains) are distributed at least annually. Distributions from
capital gains are made after applying any available capital loss carryovers.
Distributions paid by the LifeGoal Portfolios with respect to one class of
shares may be greater or less than those paid with respect to another class of
shares due to the different expenses of the different classes.
Investor C Shares of LifeGoal Portfolios are eligible to receive dividends when
declared, provided, however, that the purchase order for such shares is
received at least one day prior to the dividend declaration and such shares
continue to be eligible for dividends through and including the day before the
redemption order is executed.
The net asset value of Investor C Shares in LifeGoal Portfolios will be reduced
by the amount of any dividend or distribution. Accordingly, dividends and
distributions on newly purchased shares represent, in substance, a return of
capital. However, such dividends and distributions would nevertheless be
taxable. Certain Agents may provide for the reinvestment of dividends in the
form of additional Investor C Shares of the same class in the same LifeGoal
Portfolio. Dividends and distributions are paid in cash within five Business
Days of the end of the quarter to which the payment relates. Dividends and
distributions payable to a shareholder are paid in cash within five Business
Days after a shareholder's complete redemption of his/her Investor C Shares.
Tax Information
Each of the LifeGoal Portfolios intends to continue to qualify as a "regulated
investment company" under the Code. In general, such qualification relieves a
LifeGoal Portfolio of liability for federal income tax to the extent all of its
annual earnings are distributed in accordance with the Code. Each LifeGoal
Portfolio intends to distribute substantially all of its earnings each taxable
year.
Any distributions by a LifeGoal Portfolio of its net investment income
(including net foreign currency gains) and the excess, if any, of its net
short-term capital gain over its net long-term capital loss generally will be
taxable as ordinary income to share-
30
<PAGE>
holders whether such income is received in cash or reinvested in additional
shares.
Corporate shareholders in the LifeGoal Portfolios may be entitled to the
dividends-received deduction for distributions attributable to those underlying
funds investing in the stock of domestic corporations to the extent of the
total qualifying dividends received by the distributing fund.
Substantially all of the net realized long-term capital gains of the LifeGoal
Portfolios, if any, will be distributed at least annually to the LifeGoal
Portfolios' shareholders. The LifeGoal Portfolios will generally have no tax
liability with respect to such gains, and the distributions generally will be
taxable to shareholders as net capital gain, regardless of how long the
shareholders have held such LifeGoal Portfolios' shares and whether such gains
are received in cash or reinvested in additional shares. Noncorporate
shareholders may be taxed on such distributions at preferential rates.
Each year, shareholders will be notified as to the amount and federal tax
status of all dividends and capital gain distributions paid during the prior
year. Such dividends and distributions may also be subject to state and local
taxes.
Dividends and capital gain distributions declared in October, November or
December of any year payable to shareholders of record on a specified date in
such months will be deemed to have been received by shareholders and paid by a
LifeGoal Portfolio on December 31 of such year in the event such dividends and
distributions are actually paid during January of the following year.
Federal law requires the Company to withhold 31% from any capital gain
distributions paid by the Company and/or redemptions (including exchanges and
redemptions in-kind) to individual shareholders unless the shareholder properly
furnishes a certified, correct Taxpayer Identification Number and certifies
that withholding does not apply. Such withholding is also required if the
Internal Revenue Service notifies the Company that the Taxpayer Identification
Number provided by the shareholder is incorrect or that the shareholder is
otherwise subject to such withholding. Amounts withheld are applied to the
shareholder's federal tax liability, and a refund may be obtained from the
Internal Revenue Service if withholding results in overpayment of tax. Federal
law also requires the LifeGoal Portfolios to withhold tax on dividends paid to
certain foreign shareholders.
The foregoing discussion is based on tax laws and regulations that were in
effect as of the date of this Prospectus and summarizes only some of the
important tax considerations generally affecting the LifeGoal Portfolios and
their shareholders. It is not intended as a substitute for careful tax
planning. Accordingly, potential investors should consult their tax advisors
with specific reference to their own tax situations and with respect to
foreign, state and local taxes. Further tax information is contained in the
SAI.
31
<PAGE>
Financial Highlights
The following financial information has been derived from the audited financial
statements of the LifeGoal Portfolios. PricewaterhouseCoopers LLP is the
independent accountant to the LifeGoal Portfolios. The reports of
PricewaterhouseCoopers LLP for the most recent fiscal period of the LifeGoal
Portfolios accompany the financial statements for such period and are
incorporated by reference in the SAI, which is available upon request. For more
information see "Organization And History." Shareholders of the Portfolios will
receive unaudited semi-annual reports describing the Portfolios' investment
operations and annual financial statements audited by the Portfolios'
independent accountant.
FOR AN INVESTOR C SHARE OUTSTANDING THROUGHOUT EACH PERIOD
LifeGoal Growth Portfolio
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
Investor C Shares 03/31/98 03/31/97*
<S> <C> <C>
Operating performance:
Net asset value, beginning of period $ 10.15 $ 10.06
Net investment income/(loss) ( 0.02)(a) 0.11
Net realized and unrealized gain on investments 2.89 0.09
Net increase in net assets resulting from investment operations 2.87 0.20
Distributions:
Distributions from net investment income ( 0.01) ( 0.11)
Distributions in excess of net investment income ( 0.34) --
Distributions from net realized capital gains ( 0.21) --
Total distributions ( 0.56) ( 0.11)
Net asset value, end of period $ 12.46 $ 10.15
Total return++ 28.89% 2.01%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $ 342 $ 82
Ratio of operating expenses to average net assets+++ 1.09% 0.75%+
Ratio of net investment income/(loss) to average net assets ( 0.19)% 0.61%+
Portfolio turnover rate 69% 25%
</TABLE>
* LifeGoal Growth Portfolio Investor C Shares commenced investment operations
on October 2, 1996. Shares were offered to the public on October 15, 1996.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ The Portfolio's expenses do not include the expenses of the underlying
Funds.
(a) Per share amounts have been calculated using the monthly average share
method, which more appropriately represents the per share data for the
period.
32
<PAGE>
FOR AN INVESTOR C SHARE OUTSTANDING THROUGHOUT EACH PERIOD
LifeGoal Balanced Growth Portfolio
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
Investor C Shares 03/31/98 03/31/97*
<S> <C> <C>
Operating performance:
Net asset value, beginning of period $ 9.95 $ 10.05
Net investment income 0.23 (a) 0.19
Net realized and unrealized gain/(loss) on investments 1.78 ( 0.10)
Net increase/(decrease) in net assets resulting from investment operations 2.01 0.09
Distributions:
Distributions from net investment income ( 0.25) ( 0.19)
Distributions in excess of net investment income ( 0.29) --
Distributions from net realized capital gains ( 0.50) --
Total distributions ( 1.04) ( 0.19)
Net asset value, end of period $ 10.92 $ 9.95
Total return++ 21.10% 0.85%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $ 737 $ 18
Ratio of operating expenses to average net assets+++ 1.09% 0.75%+
Ratio of net investment income to average net assets 2.03% 3.44%+
Portfolio turnover rate 94% 1%
</TABLE>
* LifeGoal Balanced Growth Portfolio Investor C Shares commenced investment
operations on October 2, 1996. Shares were offered to the public on October
15, 1996.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ The Portfolio's expenses do not include the expenses of the underlying
Funds.
(a) Per share amounts have been calculated using the monthly average share
method, which more appropriately represents the per share data for the
period.
33
<PAGE>
FOR AN INVESTOR C SHARE OUTSTANDING THROUGHOUT EACH PERIOD
LifeGoal Income And Growth Portfolio
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
Investor C Shares 03/31/98 03/31/97*
<S> <C> <C>
Operating performance:
Net asset value, beginning of period $ 9.97 $ 10.03
Net investment income 0.36 (a) 0.31
Net realized and unrealized gain/(loss) on investments 0.89 ( 0.06)
Net increase in net assets resulting from investment operations 1.25 0.25
Distributions:
Distributions from net investment income ( 0.35) ( 0.31)
Distributions in excess of net investment income ( 0.10) --
Distributions from net realized capital gains ( 0.07) --
Total distributions ( 0.52) ( 0.31)
Net asset value, end of period $ 10.70 $ 9.97
Total return++ 12.83% 2.54%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $ 87 $ 1
Ratio of operating expenses to average net assets+++ 1.09% 0.75%+
Ratio of net investment income to average net assets 3.33% 5.84%+
Portfolio turnover rate 64% 2%
</TABLE>
* LifeGoal Income and Growth Portfolio Investor C Shares commenced investment
operations on October 2, 1996. Shares were offered to the public on October
15, 1996.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ The Portfolio's expenses do not include the expenses of the underlying
Funds.
(a) Per share amounts have been calculated using the monthly average share
method, which more appropriately represents the per share data for the
period.
34
<PAGE>
NATIONS LIFEGOAL FUNDS, INC.
NATIONS LIFEGOAL GROWTH PORTFOLIO
NATIONS LIFEGOAL BALANCED GROWTH PORTFOLIO
NATIONS LIFEGOAL INCOME AND GROWTH PORTFOLIO
SUPPLEMENT DATED JANUARY __, 1999
TO PROSPECTUSES DATED AUGUST 1, 1998
The prospectuses for the Primary A, Primary B, Investor A and Investor B
Shares of Nations LifeGoal Growth Portfolio, Nations LifeGoal Balanced Growth
Portfolio and Nations LifeGoal Income and Growth Portfolio are hereby
supplemented by deleting the first paragraph under the heading "DESCRIPTION OF
UNDERLYING NATIONS FUNDS--INVESTMENT OBJECTIVES, POLICIES AND PRACTICES--NATIONS
EQUITY INCOME FUND" and inserting in its place the following:
The Fund's investment objective is to seek current income and growth
of capital by investing primarily in companies with above-average dividend
yields. The investment program of the Fund is based on several premises.
First, that dividends are normally a more stable and predictable source of
return than capital appreciation. While the price of a company's stock
generally increases and decreases in response to short-term earnings and
market fluctuations, its dividends are generally less volatile. Second,
diversifying equity holdings in a manner that includes every major
economic sector contributes to reduced volatility, without a commensurate
reduction in investment return. Collectively, these traits may be combined
in such a fashion as to produce a Fund with less volatility and which
provides higher income than that of the stocks in the S&P 500 Index.
<PAGE>
NATIONS LIFEGOAL FUNDS, INC.
FILE NOS. 333-09703; 811-07745
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
Included in Part B:
Audited Financial Statements for LifeGoal Growth Portfolio, LifeGoal
Balanced Growth Portfolio and LifeGoal Income and Growth Portfolio:
Schedule of Investments for March 31, 1998 Statements of Assets and
Liabilities for March 31, 1998 Statements of Operations for the
fiscal period ended March 31, 1998 Statements of Changes in Net
Assets for period ended March 31, 1998 Notes to Financial Statements
Report of Public Accountants dated May 15, 1998
Included in Part C:
Consent of Independent Accountants
(b) Exhibits
Exhibit
Number Description
- ------ -----------
(1) Articles of Incorporation, dated July 3, 1996 is incorporated by
reference to the Registration Statement on Form N1-A, filed on August
7, 1996
(1)(b) Form of Articles of Amendment is incorporated by reference to
Pre-Effective Amendment No. 1, filed October 9, 1996
(2) By-Laws, dated July 10, 1996 is incorporated by reference to the
Registration Statement on Form N1-A, filed on August 7, 1996
(3) Not Applicable
(4) None
1
<PAGE>
(5)(a) Form of Investment Advisory Agreement between Nations LifeGoal Funds,
Inc. and NationsBanc Advisors, Inc. is incorporated by reference to
Pre-Effective Amendment No. 1, filed October 9, 1996
(5)(b) Form of Sub-Advisory Agreement with NationsBanc Advisors, Inc.,
TradeStreet Investment Associates, Inc. and Nations LifeGoal Funds,
Inc. on behalf of LifeGoal Growth Fund, LifeGoal Balanced Growth Fund
and LifeGoal Income and Growth Fund is incorporated by reference to
Pre-Effective Amendment No. 1, filed October 9, 1996
(6)(a) Form of Distribution Agreement between Stephens Inc. and Nations
LifeGoal Funds, Inc. is incorporated by reference to the Registration
Statement on Form N1-A, filed on August 7, 1996
(6)(b) Form of Sales Support Agreement is incorporated by reference to the
Registration Statement on Form N1-A, filed on August 7, 1996
(6)(c) Form of Shareholder Servicing Agreement is incorporated by reference to
the Registration Statement on Form N1-A, filed on August 7, 1996
(7) Deferred Compensation Plan, to be filed by Amendment.
(8) Form of Custody Agreement between Nations LifeGoal Funds, Inc. and
NationsBank of Texas, N.A. is incorporated by reference to the
Registration Statement on Form N1-A, filed on August 7, 1996
(9)(a) Transfer Agency Agreement, to be filed by Amendment
(9)(b) Form of Amendment to Transfer Agency and Services Agreement is
incorporated by reference to the Registration Statement on Form N1-A
filed on August 7, 1996
(9)(c) Supplement to Transfer Agency and Services Agreement, to be filed by
Amendment
(9)(d) Sub-Transfer Agency and Services Agreement, to be filed by Amendment
(9)(e) Form of Amendment to Sub-Transfer Agency and Services Agreement is
incorporated by reference to the Registration Statement on Form N1-A
filed on August 7, 1996
(9)(f) Form of Administration Agreement between Stephens Inc. and Nations
LifeGoal Funds, Inc. is incorporated by reference to the Registration
Statement on Form N1-A filed on August 7, 1996
2
<PAGE>
(9)(g) Form of Co-Administration Agreement between First Data Investor
Services Group, Inc. and Nations LifeGoal Funds, Inc. is incorporated
by reference to the Registration Statement on Form N1-A filed on August
7, 1996
(10) Opinion and Consent of Counsel, filed herewith
(11) Consent of Independent Accountants -- PricewaterhouseCoopers LLP, filed
herewith.
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15)(a) Form of Shareholder Servicing and Distribution Plan, Investor A Shares,
is incorporated by reference to the Registration Statement on Form
N1-A, filed on August 7, 1996
(15)(b) Form of Shareholder Servicing Plan, Investor C Shares is incorporated
by reference to the Registration Statement on Form N1-A, filed on
August 7, 1996
(15)(c) Form of Distribution Plan, Investor C Shares is incorporated by
reference to the Registration Statement on Form N1-A, filed on August
7, 1996
(15)(d) Form of Shareholder Administration Plan, Primary B Shares is
incorporated by reference to the Registration Statement on Form N1-A,
filed on August 7, 1996
(16) Schedule for Computation of Performance Data, to be filed by Amendment
(17) Not Applicable
(18) Revised Plan entered into by Registrant pursuant to Rule 18f-3 under
the Investment Company Act 0f 1940, filed herewith.
Item 25. Persons Controlled or Under Common Control with Registrant.
No person is controlled by or under common control with Registrant.
Item 26. N/A
Item 27. Indemnification.
The following paragraphs of Article VIII of the Registrant's Articles
of Incorporation provide:
3
<PAGE>
(h) The Corporation shall indemnify (1) its Directors and officers,
whether serving the Corporation or at its request any other entity, to the full
extent required or permitted by the General Laws of the State of Maryland now or
hereafter in force, including the advance of expenses under the procedures and
to the full extent permitted by law, and (2) its other employees and agents to
such extent as shall be authorized by the Board of Directors or the
Corporation's Bylaws and be permitted by law. The foregoing rights of
indemnification shall not be exclusive of any other rights to which those
seeking indemnification may be entitled. The Board of Directors may take such
action as is necessary to carry out these indemnification provisions and is
expressly empowered to adopt, approve and amend from time to time such Bylaws,
resolutions or contracts implementing such provisions or such further
indemnification arrangements as may be permitted by law. No amendment of these
Articles of Incorporation of the Corporation shall limit or eliminate the right
to indemnification provided hereunder with respect to acts or omissions
occurring prior to such amendment or repeal. Nothing contained herein shall be
construed to authorize the Corporation to indemnify any Director or officer of
the Corporation against any liability to the Corporation or to any holders of
securities of the Corporation to which he is subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office. Any indemnification by the Corporation
shall be consistent with the requirements of law, including the 1940 Act.
(i) To the fullest extent permitted by Maryland statutory and
decisional law and the 1940 Act, as amended or interpreted, no Director or
officer of the Corporation shall be personally liable to the Corporation or its
stockholders for money damages; provided, however, that nothing herein shall be
construed to protect any Director or officer of the Corporation against any
liability to which such Director or officer would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of his office. No amendment, modification or
repeal of this Article VIII shall adversely affect any right or protection of a
Director or officer that exists at the time of such amendment, modification or
repeal.
Under the terms of Maryland Corporation Law and the Registrant's
Charter and ByLaws, incorporated by reference as Exhibits (1) and (2) hereto,
provides for the indemnification of Registrant's directors and employees.
Indemnification of Registrant's principal underwriter, custodian, and transfer
agent is provided for respectively, in the Registrant's: Administration
Agreement with Stephens Inc.; Co-Administration Agreement with First Data
Investor Services Group, Inc.; Distribution Agreement with Stephens Inc.;
Custody Agreement with NationsBank of Texas, N.A.; and Transfer Agency Agreement
with First Data Investor Services Group, Inc.
Item 28. Business and Other Connections of Investment Adviser.
(a) To the knowledge of Registrant, none of the directors or officers of
NBAI, the adviser to the Registrant's portfolios, or TradeStreet, the
sub-investment adviser,
4
<PAGE>
except as set forth in the Forms ADV referenced below, is or has been, at any
time during the past two calendar years, engaged in any other business,
profession, vocation or employment of a substantial nature. Certain directors
and officers also hold various positions with, and engage in business for, the
company that owns all the outstanding stock (other than directors' qualifying
shares) of NBAI or TradeStreet, respectively, or other subsidiaries of
NationsBank Corporation.
(b) NBAI performs investment advisory services for the Registrant and
certain other customers. NBAI is a wholly owned subsidiary of NationsBank, N.A.
("NationsBank"), which in turn is a wholly owned banking subsidiary of
NationsBank Corporation. Information with respect to each director and officer
of the investment adviser is incorporated by reference to Form ADV filed by NBAI
with the Securities and Exchange Commission pursuant to the Investment Advisers
Act of 1940 (file no. 801-49874).
(c) TradeStreet performs sub-investment advisory services for the
Registrant and certain other customers. TradeStreet is a wholly owned subsidiary
of NationsBank, which in turn is a wholly owned banking subsidiary of
NationsBank Corporation. Information with respect to each director and officer
of the sub-investment adviser is incorporated by reference to Form ADV filed by
TradeStreet with the Securities and Exchange Commission pursuant to the
Investment Advisers Act of 1940 (file no. 801-50372).
Item 29. Principal Underwriters.
(a) Stephens Inc. is the distributor and principal underwriter for Nations
LifeGoal Funds, Inc. Stephens Inc. does not presently act as investment adviser
for any other registered investment companies, but does act as principal
underwriter for Nations Fund, Inc., Nations Fund Trust, Nations Annuity Trust,
Nations Fund Portfolios Inc., Nations Institutional Reserves, the Overland
Express Funds, Inc., MasterWorks Funds Inc., Stagecoach Funds, Inc. and
Stagecoach Trust and is the exclusive placement agent for Master Investment
Trust, Managed Series Investment Trust, Life & Annuity Trust and Master
Investment Portfolio, all of which are registered open-end management investment
companies, and has acted as principal underwriter for the Liberty Term Trust,
Inc., Nations Government Income Term Trust 2003, Inc., Nations Government Income
Term Trust 2004, Inc. and the Nations Balanced Target Maturity Fund, Inc.,
closed-end management investment companies.
(b) Information with respect to each director and officer of the principal
underwriter is incorporated by reference to Form ADV filed by Stephens Inc. with
the Securities and Exchange Commission pursuant to the Investment Advisers Act
of 1940 (file no. 501-15510).
(c) Not applicable.
5
<PAGE>
Item 30. Location of Accounts and Records.
(1) NBAI, One NationsBank Plaza, Charlotte, North Carolina 28255 (records
relating to its function as Investment Adviser).
(2) TradeStreet, One NationsBank Plaza, Charlotte, North Carolina 28255
(records relating to its function as Sub-Adviser).
(3) Stephens Inc., 111 Center Street, Little Rock, Arkansas 72201 (records
relating to its function as Distributor and as Administrator).
(4) First Data Investors Services Group, Inc., One Exchange Place, Boston,
Massachusetts 02109 (records relating to its function as
Co-Administrator and Transfer Agent).
(5) NationsBank, N.A. 1401 Elm Street, Dallas, Texas 75202 (records
relating to its function as Sub-Transfer Agent and Custodian).
Item 31. Management Services
Not Applicable.
Item 32. Undertakings.
(a) Registrant undertakes to call a meeting for the purpose of voting upon
the question or removal of a trustee or trustees when requested in
writing to do so by the holders of at least 10% of a Fund's outstanding
shares of beneficial interest and in connection with such meeting to
comply with the provisions of Section 16(c) of the 1940 Act, as
amended, relating to shareholder communications.
(b) Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of its most current annual report to
shareholders, upon request and without charge.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Little Rock, State of Arkansas on the
13th day of November, 1998.
NATIONS LIFEGOAL FUNDS, INC.
By: *
----------------------------------
A. Max Walker
President and Chairman
of the Board of Directors
By: /s/ Richard H. Blank, Jr.
----------------------------------
Richard H. Blank, Jr.
*Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the date indicated:
SIGNATURES TITLE DATE
---------- ----- ----
* President and Chairman November 13, 1998
- ------------------------ of the Board of Directors
(A. Max Walker) (Principal Executive Officer)
* Treasurer November 13, 1998
- ------------------------ Vice President
(Richard H. Rose) (Principal Financial and
Accounting Officer)
* Director November 13, 1998
- ------------------------
(Edmund L. Benson, III)
* Director November 13, 1998
- ------------------------
(James Ermer)
* Director November 13, 1998
- ------------------------
(William H. Grigg)
* Director November 13, 1998
- ------------------------
(Thomas F. Keller)
* Director November 13, 1998
- ------------------------
(Carl E. Mundy, Jr.)
* Director November 13, 1998
- ------------------------
(Charles B. Walker)
* Director November 13, 1998
- ------------------------
(Thomas S. Word)
/s/ Richard H. Blank, Jr.
- ---------------------------
Richard H. Blank, Jr.
*Attorney-in-Fact
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF EXHIBITS
EX-99.B10 Opinion and Consent of Counsel
EX-99.B11 Opinion of Independent Accountants
EX-99.B18 Rule 18f-3 Plan
EX-99.B10
[MORRISON & FOERSTER LETTERHEAD]
November 13, 1998
Nations LifeGoal Funds, Inc.
111 Center Street
Little Rock, AR 72201
Re: Shares of Common Stock of
Nations LifeGoal Funds, Inc.
Ladies and Gentlemen:
We refer to Post-Effective Amendment No. 6 and Amendment No. 7 to the
Registration Statement on Form N-1A (SEC File Nos. 333-09703; 811-07745) (the
"Registration Statement") of Nations LifeGoal Funds, Inc., a Maryland
corporation (the "Company"), relating to the registration of an indefinite
number of Shares of Common Stock of the Company's three portfolios; namely,
LifeGoal Growth Portfolio, LifeGoal Balanced Growth Portfolio and LifeGoal
Income and Growth Portfolio (collectively, the "Shares").
We have been requested by the Company to furnish this opinion as Exhibit
10 to the Registration Statement.
We have examined such records, documents, instruments, and certificates of
public officials and of the Company, made such inquiries of the Company, and
examined such questions of law as we have deemed necessary for the purpose of
rendering the opinion set forth herein. We have also verified with the Company's
transfer agent the maximum number of Shares issued by the Company during the
fiscal period ended March 31, 1998. We have assumed the genuineness of all
signatures and the authenticity of all items submitted to us as originals and
the conformity with originals of all items submitted to us as copies.
Based upon and subject to the foregoing, we are of the opinion that:
The issuance and sale of the Shares by the Company have been duly and
validly authorized by all appropriate action, and assuming delivery of the
Shares by sale or in accord with the Company's dividend reinvestment plan in
accordance with the
<PAGE>
Nations LifeGoal Funds, Inc.
November 13, 1998
Page Two
description set forth in the Registration Statement, as amended, the Shares will
be validly issued, fully paid and nonassessable.
We consent to the inclusion of this opinion as an exhibit to the
Registration Statement.
In addition, we hereby consent to the use of our name and to the reference
to our Firm under the heading "Counsel" in the Statement of Additional
Information and the description of advice rendered by our Firm under the heading
"How The LifeGoal Portfolios Are Managed Other Service Providers" in the
Prospectuses, which are included as part of the Registration Statement.
Very truly yours,
/s/ Morrison & Foerster LLP
MORRISON & FOERSTER LLP
EX-99.B11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 6 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated May 28, 1998, relating to the financial
statements and financial highlights appearing in the March 31, 1998 Annual
Report to Shareholders of Nations LifeGoal Funds, Inc., which is also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the headings "Financial Highlights" and "How The
LifeGoal Portfolios Are Managed - Other Service Providers" in the Prospectuses
and under the heading "Independent Accountant and Reports" in the Statement of
Additional Information.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 13, 1998
NATIONS LIFEGOAL FUNDS, INC.
RULE 18f-3 MULTI-CLASS PLAN
I. Introduction.
-------------------
Pursuant to Rule 18f-3 under the Investment Company Act of 1940, as
amended (the "1940 Act"), the following sets forth the method for allocating
fees and expenses among each class of shares in the investment portfolios of
Nations LifeGoal Funds, Inc. (the "Company"). In addition, this Rule 18f-3
Multi-Class Plan (the "Plan") sets forth the maximum initial sales loads,
contingent deferred sales charges, Rule 12b-1 distribution fees, shareholder
servicing fees, conversion features, exchange privileges and other shareholder
services applicable to a particular class of shares of the portfolios. The Plan
also identifies expenses that may be allocated to a particular class of shares
to the extent that they are actually incurred in a different amount by class or
relate to a different kind or degree of services provided to the class.
The Company is an open-end series investment company registered under
the 1940 Act, the shares of which are registered on Form N-1A under the
Securities Act of 1933 (Registration Nos. 333-09703 and 811-07745). The Company
elects to offer multiple classes of shares in its investment portfolios pursuant
to the provisions of Rule 18f-3 and this Plan.
The Company currently consists of the following three separate investment
portfolios: LifeGoal Growth Portfolio, LifeGoal Balanced Growth Portfolio and
LifeGoal Income and Growth Portfolio.
The above-listed investment portfolios of the Company (the "Funds") are
authorized to issue the following classes of shares representing interests in
the Funds: Primary A Shares, Primary B Shares, Investor A Shares, Investor B
Shares and Investor C Shares;
II. Allocation of Expenses.
--------------------------
A. Pursuant to Rule 18f-3 under the 1940 Act, the Company shall
allocate to each class of shares in a Fund (i) any fees and expenses incurred by
the Company in connection with the distribution of such class of shares under a
distribution plan adopted for such class of shares pursuant to Rule 12b-1, and
(ii) any fees and expenses incurred by the Company under a shareholder servicing
plan in connection with the provision of shareholder services to the holders of
such class of shares.
B. In addition, pursuant to Rule 18f-3, the Company may allocate the
following fees and expenses, if any, to a particular class of shares in a single
Fund:
(i) transfer agent fees identified by the transfer agent as being
attributable to such class of shares;
1
<PAGE>
(ii) printing and postage expenses related to preparing and
distributing materials such as shareholder reports, prospectuses,
reports, and proxies to current shareholders of such class of
shares or to regulatory agencies with respect to such class of
shares;
(iii) blue sky registration or qualification fees incurred by such
class of shares;
(iv) Securities and Exchange Commission registration fees incurred by
such class of shares;
(v) the expense of administrative personnel and services (including,
but not limited to, those of a portfolio accountant, custodian or
dividend paying agent charged with calculating net asset values
or determining or paying dividends) as required to support the
shareholders of such class of shares;
(vi) litigation or other legal expenses relating solely to such class
of shares;
(vii) fees of the Company's Directors incurred as result of issues
relating to such class of shares;
(viii) independent accountants' fees relating solely to such class of
shares; and
(ix) any other fees and expenses, not including advisory or custodial
fees or other expenses related to the management of the Fund's
assets, relating to (as defined below) such class of shares.
C. For all purposes under this Plan, fees and expenses "relating to" a
class of shares are those fees and expenses that are actually incurred in a
different amount by the class or that relate to a different kind or degree of
services provided to the class. The proper officers of the Company shall have
the authority to determine whether any or all of the fees and expenses described
in Section B of this Part II should be allocated to a particular class of
shares. The Board of Directors will monitor any such allocations to ensure that
they comply with the requirements of the Plan.
D. Income, realized and unrealized capital gains and losses, and any
expenses of a Fund not allocated to a particular class of any such Fund pursuant
to this Plan shall be allocated to each class of the Fund on the basis of the
relative net assets, as defined in Rule 18f-3, of that class in relation to the
net assets of the Fund.
E. In certain cases, NationsBanc Advisors, Inc., TradeStreet Investment
Associates, Inc., NationsBank, N.A., Stephens Inc., First Data Investor Services
Group, Inc., or another service provider for a Fund may waive or reimburse all
or a portion of the expenses of a specific class of shares of the Fund. The
Board of Directors will monitor any such waivers or
2
<PAGE>
reimbursements to ensure that they do not provide a means for
cross-subsidization between classes.
III. Class Arrangements.
-----------------------
The following summarizes the maximum front-end sales charges,
contingent deferred sales charges, Rule 12b-1 distribution fees, shareholder
servicing fees, conversion features, exchange privileges and other shareholder
services applicable to each class of shares of the Company. Additional details
regarding such fees and services are set forth in the Funds' current
Prospectus(es) and Statement of Additional Information.
A. Primary A Shares.
---------------------
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: None
3. Maximum Rule 12b-1 Distribution Fees: None
4. Maximum Shareholder Servicing Fees: None
5. Conversion Features: None
6. Exchange Privileges:
(a) Primary A Shares of a Fund may be exchanged for Primary
A Shares of any other fund of the Nations Fund Family.
(b) From time to time, the Board of Directors of the Company
may modify, or ratify modifications to, the exchange
privileges of Primary A Shares of a Fund without
amending this Plan, provided that such exchange
privileges, as modified, are described in the
then-current prospectus for such shares of such Fund.
7. Other Shareholder Services: None
B. Primary B Shares.
---------------------
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: None
3. Maximum Rule 12b-1 Distribution Fees: None
3
<PAGE>
4. Maximum Shareholder Administration Fees: Pursuant to a
Shareholder Administration Plan, the Primary B Shares of the
Funds may pay shareholder administration fees of up to 0.60%
of the average daily net assets of such shares, provided
that in no event may the portion of such fee that
constitutes a "service fee," as that term is defined in Rule
2830 of the Conduct Rules of the National Association of
Securities Dealers, Inc., exceed 0.25% of the average daily
net asset value of such Primary B Shares of a Fund.
5. Conversion Features: Primary B Shares of a Fund shall have
such conversion features, if any, as are determined by or
ratified by the Board of Directors of the Company and
described in the then-current prospectus for such shares of
such Fund.
6. Exchange Privileges:
(a) Primary B Shares of a Fund may be exchanged for Primary
B Shares of any other fund of Nations Fund Family.
(b) From time to time, the Board of Directors of the Company
may modify, or ratify modifications to, the exchange
privileges of Primary B Shares of a Fund without
amending this Plan, provided that such exchange
privileges, as modified, are described in the
then-current prospectus for such shares of such Fund.
7. Other Shareholder Services: None
C. Investor A Shares.
----------------------
1. Maximum Initial Sales Load: maximum of 5.75%.
2. Contingent Deferred Sales Charge (as a percentage of the
lower of the original purchase price or redemption proceeds):
1.00% of purchases over $1 million if redeemed within one
year of purchase, declining to 0.50% in the second year after
purchase and eliminated thereafter.
3. Redemption Fee: 1.00% of the current net asset value of share
purchased by a Substantial Investor (as such term is defined
in then-current prospectuses) between July 31, 1997 and
November 15, 1998, and redeemed within 18 months of purchase.
4. Maximum Rule 12b-1 Distribution/Shareholder Servicing Fees:
Pursuant to a Shareholder Servicing and Distribution Plan
adopted under Rule 12b-1, Investor A Shares of each Fund may
pay a combined distribution and
4
<PAGE>
shareholder servicing fee of up to 0.25% of the average daily
net assets of such shares.
5. Conversion Features: Investor A Shares of a Fund shall have
such conversion features, if any, as are determined by or
ratified by the Board of Directors of the Company and
described in the then-current prospectus for such shares of
such Fund.
6. Exchange Privileges:
(a) Investor A Shares of each Fund may be exchanged for
Investor A Shares of any other Nations Fund Non-Money
Market Fund (other than an index fund) or any Nations
Fund Money Market Fund.
(b) From time to time, the Board of Directors of the Company
may modify, or ratify modifications to, the exchange
privileges of Investor A Shares of a Fund without
amending this Plan, provided that such exchange
privileges, as modified, are described in the
then-current prospectus for such shares of such Fund.
7. Other Shareholder Services. The Company offers a Systematic
Investment Plan and Automatic Withdrawal Plan to holders of
Investor A Shares of the Funds.
D. Investor B Shares.
----------------------
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge (as a percentage of the
lower of the purchase price or redemption proceeds): 5.00% if
redeemed within one year of purchase declining to 1.00% in
the sixth year after purchase and eliminated thereafter.
3. Maximum Rule 12b-1 Distribution Fees: Pursuant to a
Distribution Plan adopted under Rule 12b-1, Investor B Shares
of each Fund may pay distribution fees of up to 0.75% of the
average daily net assets of such shares.
4. Maximum Shareholder Servicing Fees: Pursuant to a Shareholder
Servicing Plan, the Investor B Shares of each Fund may pay
shareholder servicing fees of up to 0.25% of the average
daily net assets of such shares.
5. Conversion Features: Investor B Shares of a Fund shall have
such conversion features, if any, as are determined by or
ratified by the Board
5
<PAGE>
of Directors of the Company and described in the then-current
prospectus for such shares of such Fund.
6. Exchange Privileges:
(a) Investor B Shares of a Fund may be exchanged for
Investor B Shares of any other Nations Fund Non-Money
Market Fund (except Nations Short-Term Income Fund and
Nations Short-Term Municipal Income Fund) or Investor C
Shares of any Nations Money Market Fund.
(b) From time to time, the Board of Directors of the Company
may modify, or ratify modifications to, the exchange
privileges of Investor B Shares of a Fund without
amending this Plan, provided that such exchange
privileges, as modified, are described in the
then-current prospectus for such shares of such Fund.
7. Other Shareholder Services. The Company offers a Systematic
Investment Plan and Automatic Withdrawal Plan to holders of
Investor B Shares of the Funds.
E. Investor C Shares.
----------------------
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge (as a percentage of the
lower of the purchase price or redemption proceeds): 1.00% if
redeemed within one year of purchase and eliminated
thereafter.
3. Maximum Rule 12b-1 Distribution Fees: Pursuant to a
Distribution Plan adopted under Rule 12b-1, Investor C Shares
of the Funds may pay distribution fees of up to 0.75% of the
average daily net assets of such shares.
4. Maximum Shareholder Servicing Fees: Pursuant to a Shareholder
Servicing Plan, the Investor C Shares of each Fund may pay
shareholder servicing fees of up to 0.25% of the average
daily net assets of such shares.
5. Conversion Features: Investor C Shares of a Fund shall have
such conversion features, if any, as are determined by or
ratified by the Board of Directors of the Company and
described in the then-current prospectus for such shares of
such Fund.
6
<PAGE>
6. Exchange Privileges:
(a) Investor C Shares of a Fund may be exchanged for
Investor C Shares of any other Nations Fund Non-Money
Market Fund, other than any index fund. However,
Investor C Shares of a Non-Money Market Fund may not be
exchanged for Investor C Shares of Nations Short-Term
Income Fund or Nations Short-Term Municipal Income Fund
until one year after purchase.
(b) In addition, Investor C Shares of a Fund may be
exchanged for Daily Shares of any Nations Fund Money
Market Fund.
(c) From time to time, the Board of Directors of the Company
may modify, or ratify modifications to, the exchange
privileges of Investor C Shares of a Fund without
amending this Plan, provided that such exchange
privileges, as modified, are described in the
then-current prospectus for such shares of such Fund.
7. Other Shareholder Services. The Company offers a Systematic
Investment Plan and Automatic Withdrawal Plan to holders of
Investor C Shares of the Funds.
IV. Board Review.
-----------------
The Board of Directors of the Company shall review this Plan as
frequently as it deems necessary. Prior to any material amendment(s) to this
Plan, the Company's Board of Directors, including a majority of the Directors
who are not interested persons of the Company, shall find that the Plan, as
proposed to be amended (including any proposed amendments to the method of
allocating class and/or fund expenses), is in the best interests of each class
of shares of the Fund individually and the Fund as a whole. In considering
whether to approve any proposed amendment(s) to the Plan, the Directors of the
Company shall request and evaluate such information as they consider reasonably
necessary to evaluate the proposed amendment(s) to the Plan.
Adopted: July 11, 1996
Last Amended: November 5, 1998
