Prospectus
Investor A Shares and
Investor B Shares
August 1, 1998
as supplemented on
November 16, 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 two classes of shares
of each LifeGoal Portfolio -- Investor A Shares and Investor B Shares.
This Prospectus sets forth concisely the information about each LifeGoal
Portfolio that a prospective purchaser of Investor A Shares and Investor B
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
Marisco 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 BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION OR ANY OF THEIR 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-98664-11/98
<PAGE>
Table Of Contents
About The Prospectus Summary 3
LifeGoal -----------------------------------------------------
Portfolios Expenses Summary 4
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Objectives 7
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How Objectives Are Pursued 8
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Description Of Underlying Nations Funds
-- Investment Objectives, Policies And Practices 11
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How Performance Is Shown 18
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How The LifeGoal Portfolios Are Managed 20
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Organization And History 24
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About Your How To Buy Shares 25
Investment -----------------------------------------------------
Investor A Shares -- Charges and Features 27
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Investor B Shares -- Charges and Features 31
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How To Redeem Shares 33
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How To Exchange Shares 34
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Shareholder Servicing and Distribution Plans 36
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How The LifeGoal Portfolios Value Their Shares 38
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How Dividends And Distributions Are Made;
Tax Information 38
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Financial Highlights 40
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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
2 OFFERING MAY NOT LAWFULLY BE MADE.
<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
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more volatile 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 or accounts established
with certain fee-based investment advisers or financial planners, including
wrap fee accounts and other managed agency/asset allocation accounts; and $100
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 A Shares and
Investor B 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 A SHARES
<TABLE>
<CAPTION>
LifeGoal LifeGoal
LifeGoal Balanced Income and
Growth Growth Growth
Shareholder Transaction Expenses Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price) 5.75% 5.75% 5.75%
Maximum Deferred Sales Load (as a percentage of the lower of the original
purchase price or redemption proceeds)(1) 1.00% 1.00% 1.00%
Redemption Fees Payable to the LifeGoal Porolios None(2) None(2) None(2)
Annual Portfolio Operating Expenses
(as a percentage of average net assets)
Management Fees .25% .25% .25%
Rule 12b-1 fees (including shareholder servicing fees) .25% .25% .25%
Other Expenses (After Expense Reimbursements) .00% .00% .00%
Total Operating Expenses (After Expense Reimbursements) .50% .50% .50%
</TABLE>
(1) Certain Investor A Shares that are purchased at net asset value are subject
to a Deferred Sales Charge if redeemed within two years of purchase. See
"Sales Charges."
(2) There is a 1% redemption fee retained by the LifeGoal Portfolio or
Portfolios which is imposed only on certain redemptions by investors
investing $1 million or more ("Substantial Investors") in Investor A Shares
held less than 18 months and purchased between July 31, 1997 and November
15, 1998. See "How To Redeem Shares -- Redemption Fee."
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<PAGE>
LIFEGOAL PORTFOLIOS INVESTOR B 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) 5.00% 5.00% 5.00%
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 B Shares purchased after July 31, 1997 are subject to the Deferred
Sales Charge as set forth in the applicable schedule. The Maximum Deferred
Sales Charge is 5.00% in the first year after purchase, declining to 1.00%
in the sixth year after purchase and eliminated thereafter. For the
applicable Deferred Sales Charge schedule see "How To Redeem Shares --
Contingent Deferred Sales Charge."
Examples: You would pay the following expenses on a $1,000 investment in
Investor A 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 $ 71 $ 70 $ 69
3 Years $ 99 $ 97 $ 93
5 Years $129 $125 $119
10 Years $215 $206 $194
</TABLE>
You would pay the following expenses on a $1,000 investment in Investor B
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 $ 72 $ 71 $ 70
3 Years $ 97 $ 95 $ 91
5 Years $135 $131 $125
10 Years $228 $219 $207
</TABLE>
5
<PAGE>
You would pay the following expenses on a $1,000 investment in Investor B
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: a 5% annual return but 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 $228 $219 $207
</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 A and Investor B 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.
LifeGoal Portfolios' Indirect Expenses
Based on the annualized expense ratios for 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 fund.
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<PAGE>
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>
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>
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<PAGE>
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 Under-lying 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.
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 and 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
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<PAGE>
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 time, it is
possible that the percentage of a particular LifeGoal Portfolio's assets
actually invested in a particular 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.
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<PAGE>
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 investments; 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
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<PAGE>
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 Portfolio 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 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 total 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
- ---------------------
(1) "Standard & Poor's" and "Standard & Poor's 500" are trademarks of The
McGraw-Hill Companies, Inc.
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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, 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, dividends are normally a more stable and predictable
source of return than capital appreciation. Second, diversifying equity
holdings in a manner that includes every major economic sector contributes to
reduced volatility, without a commensurate reduction in expected investment
return. Finally, investing in dividend paying stocks in all the economic
sectors can provide greater income than provided by the stocks in the S&P 500
Index with less volatility. Collectively, these traits may be combined in such
a fashion as to produce returns in excess of the market, as measured by the S&P
500 Index, on a comparable risk basis.
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-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 total 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
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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 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 stock,
preferred stocks, warrants, convertible securities and debt securities. In
building the portfolio, the Adviser seeks to identify individual companies with
earnings growth potential net 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 invest-
- ---------------------
2 "Standard & Poor's" and "Standard & Poor's SmallCap 600" are trademarks of
The McGraw-Hill Companies, Inc.
13
<PAGE>
ment 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 securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities ("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 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 occurring 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 secu-
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<PAGE>
rities 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 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 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 con-
15
<PAGE>
ditions, 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 remaining 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 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--
16
<PAGE>
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. 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 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
17
<PAGE>
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 Funds 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, the 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.
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, 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.
"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. "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
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<PAGE>
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 Funds 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 A Shares and Investor B Shares, the LifeGoal Portfolios
offer Primary A, Primary B and Investor C 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. 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.
19
<PAGE>
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.
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 BankAmerica Corporation, a bank holding com-
20
<PAGE>
pany organized as a Delaware 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 most of 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 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 investment
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.
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 Bal-
21
<PAGE>
anced 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 of 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
regulatory 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
22
<PAGE>
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 selling agents that
assist customers in purchasing Investor A Shares of the LifeGoal Portfolios.
See "Shareholder Servicing and Distribution Plans."
First Data serves as the Transfer Agent (the "Transfer Agent") for each of
LifeGoal Portfolio's Investor A 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, redun-dancies 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 A and Investor B 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, if a portfolio manager of
one Nations Fund pur-
23
<PAGE>
chases 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 Fund 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, 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 A and Investor B 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 Institution (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.
24
<PAGE>
About Your Investment
How To Buy Shares
This Prospectus offers two classes of shares to the general public. Investor A
Shares are sold with an initial sales charge and are subject to a contingent
deferred sales charge ("CDSC") upon certain redemptions; Investor B Shares are
sold without an initial sales charge and are subject to a CDSC upon certain
redemptions. Investments greater than $250,000 are not eligible to purchase
Investor B Shares but may be directed to Investor A Shares. See "Factors to
Consider When Selecting Investor A Shares or Investor B Shares" for a
discussion of issues to consider in selecting which class of shares to
purchase. Contact your Agent or Nations Funds at 1-800-321-7854 for further
information.
The LifeGoal Portfolios have established various procedures for purchasing
Investor A Shares and Investor B Shares in order to accommodate different
investors. Purchase orders 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 the
LifeGoal Portfolios ("Servicing Agents") and/or a sales support agreement
("Sales Support Agreement") with Stephens ("Selling Agents"). In addition,
under certain circumstances, Investor A Shares may be purchased directly from
the LifeGoal Portfolios. If you invest through a third party (rather than
directly with the LifeGoal Portfolios), the policies and fees that apply to you
may differ from those set forth below. Banks, broker/ dealers or other
institutions may charge other fees and may set limitations on buying or selling
shares or the privileges that apply to them.
There is a minimum initial investment of $1,000 in the LifeGoal Portfolios,
except that the minimum initial investment is:
o $500 for IRA investors;
o $250 for non-working spousal IRAs;
o $250 for accounts established with certain fee-based investment advisers or
financial planners, including wrap fee accounts and other managed agency/asset
allocation accounts; 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, Nations Funds 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 A Shares are purchased at net asset value plus any applicable sales
charge. Investor B Shares are purchased at net asset value per share without
the imposition of a sales charge, but are subject to a CDSC if redeemed within
a specified period 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 A and Investor B 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
25
<PAGE>
the maximum fees payable for sales support or shareholder services.
Nations Funds and Stephens reserve the right to reject any purchase order. The
issuance of Investor A and Investor B Shares is recorded on the books of the
Funds, 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 A Shares and Investor
B 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 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 Funds' Custodian. Such payment must be received no later than 4:00 p.m.,
Eastern time, by the third Business Day following the 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 A
and Investor B Shares by their customers ("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 A or
Investor B 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 or Nations Funds.
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.
Conversion Feature: Investor B Shares purchased after November 15, 1998, will
automatically convert to Investor A Shares at the end of the month in which the
eighth anniversary of such share purchase occurs.
Investor B Shares purchased between August 1, 1997 and November 15, 1998, that
have been outstanding for the number of years set forth in the schedule below
will, at the end of the month in which the anniversary of such share purchase
occurs, automatically convert to Investor A Shares.
26
<PAGE>
CONVERSION SCHEDULE
For Shares Purchased Between August 1, 1997 and November 15, 1998
<TABLE>
<CAPTION>
Year of
Amount of Purchase Conversion
<S> <C>
$ 0-$249,999 9th
$250,000-$499,999 6th
$500,000-$999,999 5th
</TABLE>
Investor B Shares purchased prior to August 1, 1997, will automatically convert
to Investor A Shares at the end of the month in which the ninth anniversary of
such share purchase occurs.
Upon conversion, shareholders will receive Investor A Shares having total
dollar value equal to the total dollar value of their Investor B Shares,
without the imposition of any sales charge or any other charge. The operating
expenses applicable to Investor A Shares, which are lower than those applicable
to Investor B Shares, shall thereafter be applied to such newly converted
shares. Shareholders holding converted shares will benefit from the lower
annual operating expenses of Investor A Shares, which will have a positive
effect on total returns. In each case, shareholders have the right to decline
an automatic conversion by notifying their Agent or the Transfer Agent within
90 days before a conversion that they do not desire such conversion.
Investor B Shares acquired in connection with the reinvestment of dividends or
distributions will convert to Investor A Shares at the same time as the
original shares purchased. If a share-holder effects one or more exchanges
among Investor B Shares of the non-money market funds of Nations Funds during
such period, the holding period for shares so exchanged will be counted toward
such period.
Factors to Consider When Selecting Investor A Shares or Investor B Shares:
Before purchasing Investor A Shares or Investor B Shares, investors should
consider whether, during the anticipated life of their investment in the Funds,
the initial sales charge, accumulated distribution and shareholder servicing
fee and potential CDSC (if applicable) on Investor A Shares would be less than
the accumulated shareholder servicing and distribution fees and potential CDSC
on Investor B Shares. Over time, the cumulative expense of the annual
shareholder servicing and distribution fees on the Investor B Shares may equal
or exceed the initial sales charge and combined distribution and servicing fee
applicable to Investor A Shares.
Because holders of Investor A Shares are subject to a lower fee for
distribution and shareholder services, they can be expected to earn
correspondingly higher dividends per share. However, because initial sales
charges are deducted at the time of purchase, purchasers of Investor A Shares
that do not qualify for waivers of or reductions in the initial sales charge
would have less of their purchase price initially invested in the Funds than
purchasers of Investor B Shares. Any positive investment return on the
additional invested amount for Investor B Shares, however, would be partially
or wholly offset by the expected higher annual expenses borne by Investor B
Shares.
Investor A Shares -- Charges and Features
The public offering price of Investor A Shares in the LifeGoal Portfolios is
the sum of the net asset value per share of the shares being purchased plus
any applicable sales charge. No sales charge will be assessed on the
reinvestment of dividends or other distributions.
27
<PAGE>
The following schedule of sales charges will be assessed on Investor A Shares
of the LifeGoal Portfolios.
<TABLE>
<CAPTION>
Dealers'
Total Sales Charge Reallowance
As a % of As a % of As a % of
Offering Net Asset Offering
Amount of Price Value Price
Transaction Per Share Per Share Per Share
<S> <C> <C> <C>
$ 0-$49,999 5.75 6.10 5.00
$ 50,000-$99,999 4.50 4.71 3.75
$100,000-$249,999 3.50 3.63 2.75
$250,000-$499,999 2.50 2.56 2.00
$500,000-$999,999 2.00 2.04 1.75
$1,000,000 and over 0.00* 0.00* 0.00**
</TABLE>
* Subject to certain waivers specified below, Investor A Shares that are
purchased in amounts of $1 million or more at net asset value will be
subject to a Contingent Deferred Sales Charge ("CDSC") of 1.00% if redeemed
within one year of purchase, declining to 0.50% in the second year after
purchase and eliminated thereafter.
** 1.00% on first $3,000,000, plus 0.50% on the next $47,000,000, plus 0.25% on
amounts over $50,000,000. Stephens will pay the Dealers' Reallowance in
connection with the purchase of shares in amounts of $1 million or more, for
which it may be reimbursed out of the CDSC if such shares are redeemed
within two years of purchase.
The Dealers' Reallowance, which may be changed from time to time, is paid to
Agents.
Investor A Shares Contingent Deferred Sales Charge: Subject to certain waivers
specified below, Investor A Shares of the LifeGoal Portfolios that are
purchased at net asset value in amounts of $1 million or more will be subject
to a CDSC equal to 1.00% of the lesser of the market value or the purchase
price of the shares being redeemed if such shares are redeemed within one year
of purchase, declining to 0.50% in the second year after purchase and
eliminated thereafter. No CDSC is imposed on increases in net asset value above
the initial purchase price, including shares acquired by reinvestment of
distributions.
In determining whether a CDSC is payable on any redemption, the LifeGoal
Portfolio will first redeem shares not subject to any charge, and then shares
resulting in the lowest possible CDSC. Solely for purposes of determining the
number of years from the date of purchase of shares, all purchases are deemed
to have been made on the trade date of the transaction.
The CDSC will be waived on redemptions of Investor A 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 A Shares held in the
account is less than the minimum account size, (v) 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, and (vi) 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 A Shares in the account. In addition, the CDSC will be waived on
Investor A 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. Nations Fund may
terminate any waiver of the CDSC by providing notice in the Funds' Prospectus,
but any such termination would only affect shares purchased after such
termination.
Redemption Fee: A redemption fee of 1% of the current net asset value will be
assesed on certain Investor A Shares purchased between July 31, 1997
28
<PAGE>
and November 15, 1998 and redeemed within 18 months of the date of purchase by
a Substantial Investor (as defined in the footnotes to the "Expenses Summary").
In addition, a 1% redemption fee will be assesed on Investor A Shares purchased
between July 31, 1997 and November 15, 1998 by an employee benefit plan that
(i) made its initial investment between July 31, 1997 and November 15, 1998 and
(ii) redeemed such shares within 18 months of purchase in connection with a
complete liquidation of such plan's holdings in the Nations Funds Family. This
fee is retained by the LifeGoal Portfolio or LifeGoal Portfolios for the
benefit of the remaining shareholders and is intended to encourage long-term
investment in the LifeGoal Portfolios and to avoid transaction and other
expenses associated with short-term investments. The LifeGoal Portfolios
reserve the right to modify the terms of or terminate this fee at any time.
Automatic Withdrawal Plan: An Automatic Withdrawal Plan ("AWP") may be
established by a new or existing shareholder of the LifeGoal Portfolios if the
value of the Investor A 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 A 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 asset value of the Investor A 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 A Shares will be
redeemed (net of any applicable CDSC) as necessary to meet withdrawal payments.
Withdrawals may reduce principal and will eventually deplete the shareholder's
account. If a shareholder desires to establish an AWP after opening an account,
a signature guarantee will be required. AWPs may be terminated by shareholders
on 30 days' written notice to their Selling Agent or by Nations Funds at any
time.
Reduced Sales Charge: An investor may be entitled to reduced sales charges on
Investor A Shares through Rights of Accumula-tion, a Letter of Intent, or
Quantity Discounts.
To qualify for a reduced sales charge, an investor must notify the Agent
through which the Investor A Shares are purchased, which in turn must notify
Stephens, the Transfer Agent or their respective agents at the time of
purchase. Reduced sales charges may be modified or terminated at any time.
Investors are responsible for providing evidence sufficient to establish that
they are eligible for any reduction in sales charges.
Rights of Accumulation: An investor who has previously purchased Investor A,
Investor B, or Investor C Shares in the Nations Funds (excluding Nations Funds
money market and index funds) may aggregate investments in such shares with
current purchases to determine the applicable sales charge for current
purchases of Investor A Shares. An investor's aggregate investment in Investor
A, Investor B and Investor C Shares in such Funds is the total value (based on
the higher of current net asset value or the public offering price originally
paid) of: (a) current purchases, and (b) Investor A, Investor B and Investor C
Shares that are already beneficially owned by the investor.
Letter of Intent: A Letter of Intent provides an opportunity for an investor to
obtain a reduced sales charge by aggregating the investments over a 13-month
period to determine the sales charge as outlined in the preceding table. The
size of investment shown in the preceding table also includes purchases of
shares of the participating Funds over a 13-month period based on the total
amount of intended purchases plus the value of all shares of the participating
Funds previously purchased and still owned. An investor may elect to compute
the 13-month period starting up to 90 days before the date of execution of a
Letter of Intent. Each investment made during the period receives the reduced
sales charge applicable to the total amount of the investment goal. If the goal
is not achieved within the period, the investor must pay the difference between
the charges applicable to the purchases
29
<PAGE>
made and the charges previously paid. The initial purchase must be for an
amount equal to at least five percent of the minimum total purchase amount of
the level selected. If trades not initially made under a Letter of Intent
subsequently qualify for a lower sales charge through the 90-day back-dating
provisions, an adjustment will be made at the expiration of the Letter of
Intent to give effect to the lower charge. Such adjustments in sales charge
will be used to purchase additional shares for the shareholder at the
applicable discount category.
Quantity Discounts: As shown in the table under "Sales Charges," larger
purchases may reduce the sales charge paid on Investor A Shares. Purchases of
Investor A Shares in the non-money market funds of the Nations Funds Family
that are made on the same day by the investor, his/her spouse, and his/her
children under age 21 will be combined when calculating the sales charge. For
the purpose of calculating the amount of the transaction, certain distributions
or payments from dissolution of certain qualified plans are permitted to
aggregate plan participant's investments.
Purchases of Shares at Net Asset Value:
o Full-time employees and retired employees of BankAmerica Corporation (and
its predecessors), its affiliates and subsidiaries and the immediate
families of such persons may purchase Investor A Shares in the LifeGoal
Portfolios at net asset value.
o Individuals receiving a distribution from a NationsBank trust or other
fiduciary account may use the proceeds of such distribution to purchase
Investor A Shares of the LifeGoal Portfolios at net asset value, provided
that the proceeds are invested through a trust account established with
another trustee and invested in the LifeGoal Portfolios within 90 days.
Those investors who transfer their proceeds to a fiduciary account with
selected trustees may continue to purchase shares in the LifeGoal Portfolios
at net asset value.
o Nations Fund's Trustees and Directors also may purchase Investor A Shares at
net asset value.
o Registered broker/dealers that have entered into a Nations Fund dealer
agreement with Stephens may purchase Investor A Shares at net asset value
for their investment account only.
o Registered personnel and employees of such broker/dealers also may purchase
Investor A Shares at net asset value in accordance with the internal
policies and procedures of the employing broker/dealer provided such
purchases are made for their own investment purposes.
o Employees of the Transfer Agent may purchase Investor A Shares of the
LifeGoal Portfolios at net asset value.
o Former shareholders of Class B Shares of the Special Equity Portfolio of The
Capitol Mutual Funds who held such shares as of January 31, 1994 or received
Investor A Shares of Nations Disciplined Equity Fund in connection with the
reorganization of the Special Equity Portfolio into Nations Disciplined
Equity Fund may purchase Investor A Shares of Nations Disciplined Equity
Fund at net asset value.
o Investors who purchase through accounts established with certain fee-based
investment advisers or financial planners, including Nations Funds Personal
Investment Planner accounts, wrap fee accounts and other managed
agency/asset allocation accounts may purchase Investor A Shares at net asset
value.
Investor A Shares also may be purchased at net asset value by (i) pension,
profit sharing or other employee benefit plans established under Section 401 or
Section 457 of the Internal Revenue Code of 1986, as amended (the "Code"), or
(ii) employee benefit plans created pursuant to Section 403(b) of the Code and
sponsored by a non-profit organization qualified under Section 501(c)(3) of the
Code, provided that, in either case, the plan (a) has at least $500,000
invested in Investor A Shares of the Nations Fund non-money market funds, (b)
has signed a letter of intent indicating that the plan intends to purchase at
least $500,000 of Investor A Shares of the Nations Fund non-money market funds,
(c) is an employer-sponsored plan with at least 100 eligible participants (a
"Qualified Plan") or (d) is a participant in an alliance program that has
entered into an agreement with the Fund or an Agent. Stephens may pay Agents or
other financial service firms up to 1.00% of the net asset value of Investor A
Shares purchased without a sales charge, for which it may be reimbursed out of
any applicable CDSC.
30
<PAGE>
Reinstatement Privilege: Investor A Shares in a LifeGoal Portfolio may be
purchased at net asset value, without any sales charge, by persons who have
redeemed Investor A Shares of the same LifeGoal Portfolio within the previous
120 days. 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 reinstatement
privilege. In order to exercise this privilege, a written order for the
purchase of Investor A Shares must be received by the Transfer Agent, Stephens
or their respective agents within 120 days after the redemption.
Investor A Shares may be purchased at net asset value, without a sales charge,
to the extent such a purchase, which must be at least $1,000, is paid for with
the proceeds from the redemption of shares of a nonaffiliated mutual fund. A
qualifying purchase of Investor A Shares must occur within 45 days of the prior
redemption and Nations Funds must receive a copy of the confirmation of the
redemption transaction. Stephens may compensate dealers in connection with such
purchases. This privilege may be revoked at any time.
Nations Funds may terminate any waiver of or reduction in the sales charge by
providing notice in the LifeGoal Portfolio's Prospectus, but any such
termination would only affect future purchases of shares. For more information
about reduced sales charge, contact an Agent or Stephens.
Investor B Shares -- Charges and Features
Investor B Shares Contingent Deferred Sales Charge: Subject to certain waivers
specified below, Investor B Shares purchased prior to January 1, 1996 and after
July 31, 1997, may be subject to a CDSC if such shares are redeemed within the
years designated in the applicable CDSC schedule set forth below. No CDSC is
imposed on increases in net asset value above the initial purchase price, or
shares acquired by reinvestment of distributions. Subject to the waivers
described below, the amount of the CDSC is determined as a percentage of the
lesser of the market value or the purchase price of the shares being redeemed.
The amount of the CDSC will depend on the number of years since you invested,
according to the following table:
CDSC SCHEDULES
Shares Purchased After November 15, 1998*
<TABLE>
<CAPTION>
CDSC as a
Percentage of Dollar
Year Since Purchase Made Amount Subject to Charge
<S> <C>
First 5.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter None
</TABLE>
* Investor B Shares are not available to purchasers desiring to invest
$250,000 or more, however, investors desiring to invest $250,000 or more may
be eligible to purchase Investor A Shares.
31
<PAGE>
Shares Purchased Between August 1, 1997 and November 15, 1998
in amount of $0-$249,999
<TABLE>
<CAPTION>
CDSC as a
Percentage of
Dollar
Amount Subject
Year Since Purchase Made to Charge
<S> <C>
First 5.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter None
</TABLE>
Shares Purchased Between August 1, 1997 and November 15, 1998
in amount of $250,000-$499,999
<TABLE>
<CAPTION>
CDSC as a
Percentage of
Dollar
Amount Subject
Year Since Purchase Made to Charge
<S> <C>
First 3.0%
Second 2.0%
Third 1.0%
Fourth and thereafter None
</TABLE>
Shares Purchased Between August 1, 1997 and November 15, 1998
in amount of $500,000-$999,999
<TABLE>
<CAPTION>
CDSC as a
Percentage of
Dollar
Amount Subject
Year Since Purchase Made to Charge
<S> <C>
First 2.0%
Second 1.0%
Third and thereafter None
</TABLE>
In determining whether a CDSC is payable on any redemption, the LifeGoal
Portfolios will first redeem shares not subject to any charge, and then shares
resulting in the lowest possible CDSC. Solely for purposes of determining the
number of years from the date of purchase of shares, all purchases are deemed
to have been made on the trade date of the transaction.
The CDSC will be waived on redemptions of Investor B 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 B shares held in the
account is less than the minimum account size, (v) 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, and (vi) 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 B Shares in the account. In addition, the CDSC will be waived on
Investor B 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 B
Shares of a LifeGoal Portfolio, a shareholder may reinvest any portion
32
<PAGE>
of the proceeds of such redemption in Investor B Shares of the same LifeGoal
Portfolio. 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 B Shares, together with the proceeds, 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 LifeGoal Portfolios if the
value of the Investor B Shares in his/ her accounts within the Nations Fund
Family (valued at the net asset value at the time of the establishment of the
AWP) equals $10,000 or more. Investor B 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 B 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 B 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 the Company at
any time.
How To Redeem Shares
For shareholders who open and maintain an account directly with a LifeGoal
Portfolio, redemption orders should be communicated to such LifeGoal Portfolio
by calling Nations Funds at 1-800-321-7854 or in writing. (Shareholders must
have established telephone features on their account in order to effect
telephone transactions.)
Redemption orders for Investor A or Investor B 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, less any
applicable CDSC. 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 proceeds are normally sent by mail or wired within three Business
Days after receipt of the order by the LifeGoal Portfolio. For shareholders who
purchased their shares through an Agent, redemption orders should be
transmitted by telephone or in writing through the same Agent. Redemption
proceeds are normally remitted in federal funds wired to the redeeming Agent or
investor within three Business Days after receipt of the order by Stephens, by
the Transfer Agent or their respective agents.
Redemption orders are effected at the net asset value per share next determined
after receipt of the order by the LifeGoal Portfolio, Stephens, the Transfer
Agent, or their respective agents as the case may be, less any applicable CDSC.
The Agents are responsible for transmitting redemption orders to Stephens, the
Transfer Agent or their respective agents and for crediting their Customer's
account with the redemption proceeds on a timely basis. Redemption proceeds for
shares purchased by check may not be remitted until at least 15 days after
33
<PAGE>
the date of purchase to ensure that the check has cleared; a certified check,
however, is deemed to be cleared immediately. No charge for wiring redemption
payments is imposed by the Company.
The Company may redeem a shareholder's Investor A or Investor B 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 A or Investor B 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
Investor A Shares: The exchange feature enables a shareholder of Investor A
Shares of a LifeGoal Portfolio to acquire Investor A Shares of another fund in
the Nations Funds Family (which includes both LifeGoal Portfolios and Nations
Funds) (other than an index fund) when that shareholder believes that a shift
between funds is an appropriate investment decision. A qualifying exchange of
Investor A Shares of a LifeGoal Portfolio for Investor A Shares of another
Nations Fund is made on the basis of the next calculated net asset value per
share of each fund after the exchange order is received.
No CDSC will be imposed in connection with an exchange of Investor A Shares
that meets the requirements discussed in this section. If Investor A Shares of
a LifeGoal Portfolio are exchanged for shares of the same class of another fund
(other than an index fund), any CDSC applicable to the shares exchanged will be
applied upon the redemption of the acquired shares. The holding period of such
Investor A Shares (for purposes of determining whether a CDSC is applicable
upon redemption) will be computed from the time of the initial purchase of the
Investor A Shares of the LifeGoal Portfolio.
Shareholders who have paid a front-end sales charge on purchases of Investor A
Shares of one of Nations Fund's non-money market funds (including Investor A
Shares acquired through the reinvestment of dividends and distributions on such
shares) may exchange those Investor A Shares at net asset value without any
sales charge for Investor A Shares available under the exchange privilege
described herein, provided that the maximum sales charge applicable to the
acquired Investor A Shares is equal to or less than the "maximum sales charge
applicable" to the Investor A Shares being exchanged. For purposes of
determining the "maximum sales charge applicable" to the Investor A Shares
being exchanged, a shareholder may include any sales charge paid on shares of
the same class offered by one of Nations Fund's other funds that were
previously exchanged to acquire the subject Investor A Shares then being
exchanged, provided that notification of such prior exchange is made to the
Transfer Agent, Stephens or their respective agents.
If Investor A Shares are exchanged for shares of the same class of another fund
(other than an index fund), any redemption fee applicable to the original
shares purchased will be assessed upon the redemption of the acquired shares.
The holding period of such shares (for purposes of determining whether a
redemption fee is applicable) will be computed from the time of the initial
purchase of the Investor A Shares of a Fund, except that the holding period
will not accrue while the shares
34
<PAGE>
owned are Investor A shares of a Nations Funds money market fund. If a
redemption fee ultimately is charged, it will be retained by the initial Fund
purchased.
Automatic Exchange Feature: Under the LifeGoal Portfolios' Automatic Exchange
Feature ("AEF") a shareholder of Investor A Shares may automatically exchange
at least $25 on a monthly or quarterly basis. A shareholder may direct proceeds
to be exchanged from one fund of 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, a shareholder should
contact his/her Selling Agent or Nations Funds.
Investor B Shares: The exchange feature enables a shareholder to exchange funds
as specified below when the shareholder believes that a shift between funds is
an appropriate investment decision. The exchange feature enables a shareholder
of Investor B Shares of a fund offered by Nations Funds to acquire shares of
the same class that are offered by another fund of Nations Funds (with the
exception of Nations Short-Term Income Fund and Nations Short-Term Municipal
Income Fund which are not available in this share class) or Investor C Shares
of a Nations Funds money market fund. A qualifying exchange is based on the
next calculated net asset value per share of each fund after the exchange order
is received.
No CDSC will be imposed in connection with an exchange of Investor B Shares
that meets the requirements discussed in this section. If a shareholder
acquires Investor B Shares of another fund through an exchange, any CDSC
schedule applicable (CDSCs may apply to shares purchased prior to January 1,
1996 or after July 31, 1997) to the original shares purchased will be applied
to any redemption of the acquired shares. If a shareholder exchanges Investor B
Shares of a fund for Investor C Shares of a money market fund, the acquired
shares will remain subject to the CDSC schedule applicable to the Investor B
Shares exchanged. The holding period (for purposes of determining the
applicable rate of the CDSC) does not accrue while the shares owned are
Investor C Shares of a Nations Funds money market fund. As a result, the CDSC
that is ultimately charged upon a redemption is based upon the total holding
period of Investor B Shares of a fund that charges a CDSC.
General: For shareholders who maintain an account directly with a LifeGoal
Portfolio, exchange requests should be communicated to the LifeGoal Portfolio
by calling Nations Funds at 1-800-321-7854 or in writing. For shareholders who
purchased their shares through an Agent, exchange requests should be
communicated to the Agent, who is responsible for transmitting the request to
Stephens or to the Transfer Agent.
The Funds and each of the other funds of Nations Funds 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 Nations Funds upon such notice as may be required by
applicable regulatory 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.
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
35
<PAGE>
of a class that is accepting investments generally may be acquired in an
exchange.
The Investor A Shares and Investor B Shares exchanged must have a current value
of at least $1,000. 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
investor may telephone an exchange request by calling the investor's Selling
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 Selling Agent through which the original shares
were purchased. An investor should consult his/her Selling Agent or Stephens
for further information regarding exchanges.
Shareholder Servicing And Distribution Plans
Investor A Shares:
The LifeGoal Portfolios' Shareholder Servicing and Distribution Plan (the
"Investor A Plan"), adopted pursuant to Rule 12b-1 under the 1940 Act, permits
the LifeGoal Portfolios to compensate (i) Servicing Agents and Selling Agents
for services provided to their Customers that own Investor A Shares and (ii)
Stephens for distribution-related expenses incurred in connection with Investor
A Shares. Aggregate payments under the Investor A 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 Investor A Shares of the LifeGoal Portfolios.
The fees payable to Servicing Agents under the Investor A 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 A 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 A 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 A Shares; (v)
arranging for bank wires; and (vi) providing general shareholder liaison
services. The fees payable to Selling Agents are used primarily to compensate
or reimburse Selling Agents for providing sales support assistance in
connection with the sale of Investor A Shares to Customers, which may include
forwarding sales literature and advertising provided by the Company to
Customers.
The fees under the Investor A Plan also may be used to reimburse Stephens for
distribution-related expenses actually incurred by Stephens, including, but not
limited to, expenses of organizing and conducting sales seminars, printing
prospectuses and statements of additional information (and supplements thereto)
and reports for other than existing shareholders, preparation and distribution
of advertising and sales literature and the costs of administering the Investor
A Plan.
The Company and Stephens may suspend or reduce payments under the Investor A
Plan at any time, and payments are subject to the continuation of the Investor
A Plan described above and the terms of the Servicing Agreements and Sales
Support Agreements. See the SAI for more details on the Investor A Plan.
Investor B Shares:
Shareholder Servicing Plan: The LifeGoal Portfolios' servicing plan ("Servicing
Plan") permits the LifeGoal Portfolios to compensate Servicing
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<PAGE>
Agents for services provided to their Customers that own Investor B Shares.
Payments under the LifeGoal Portfolios' Servicing Plan are 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 .25% of the average daily net
asset value of the Investor B 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 B 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 B 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 B 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 LifeGoal Portfolios'
Servicing Plan described above and the terms of the Servicing Agreements. See
the SAI for more details on the Servicing Plan.
Distribution Plan: Pursuant to Rule 12b-1 under the 1940 Act, the Directors of
the Company have approved a Distribution Plan with respect to Investor B 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 B
Shares. Payments under the LifeGoal Portfolios' 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 0.75% of the average
daily net asset value of the LifeGoal Portfolios' Investor B Shares.
The fees payable under the Distribution Plan are used primarily to compensate
or reimburse Stephens for distribution services provided by it, and related
expenses incurred, including payments by Stephens to compensate or reimburse
Selling Agents for sales support services provided, and related expenses
incurred, by such Selling Agents. Payments under the Distribution Plan may be
made with respect to the following expenses: the cost of preparing, printing
and distributing prospectuses, sales literature and advertising materials,
commissions, incentive compensation or other compensation to, and expenses of,
account executives or other employees of Stephens or the Selling Agents;
overhead and other office expenses; opportunity costs relating to the
foregoing; and any other costs and expenses relating to distribution or sales
support activities. The overhead and other office expenses referenced above may
include, without limitation, (i) the expenses of operating Stephens' or the
Selling Agents' offices in connection with the sale of LifeGoal Portfolios'
shares, including rent, the salaries and employee benefit costs of
administrative, operations and support personnel, utility costs, communications
costs and the costs of stationery and supplies, (ii) the costs of client sales
seminars and travel related to distribution and sales support activities, and
(iii) other expenses relating to distribution and sales support activities.
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 LifeGoal
Portfolios' 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.
General: The Company understands that Agents may charge fees to their Customers
who are the owners of Investor A or Investor B 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.
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<PAGE>
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 1.00% of the offering price per share on all sales of Investor A Shares
and 4.00% of the offering price per share on all sales of Investor B Shares as
an expense of Stephens or for which Stephens may be reimbursed under the
Distribution Plan. 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.
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 A and Investor B 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.
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<PAGE>
The net asset value of Investor A and Investor B Shares in LifeGoal Portfolios
will be reduced by the amount of any dividend or distribution. Accordingly,
dividends and distributions on newly purchased Investor A or Investor B Shares
will 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 A or Investor B
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 A Shares.
Tax Information
Each of the LifeGoal Portfolios intends to continue to qualify as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (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 shareholders 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 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.
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<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 LifeGoal Portfolios'
independent accountant.
FOR AN INVESTOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
LifeGoal Growth Portfolio
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
Investor A Shares 03/31/98 03/31/97*
<S> <C> <C>
Operating performance:
Net asset value, beginning of year $ 10.15 $ 10.06
Net investment income/(loss) 0.05 (a) 0.12
Net realized and unrealized gain on investments 2.89 0.09
Net increase in net assets resulting from investment operations 2.94 0.21
Distributions:
Distributions from net investment income ( 0.01) ( 0.12)
Distributions in excess of net investment income ( 0.37) --
Distributions from net realized capital gains ( 0.21) --
Total distributions ( 0.59) ( 0.12)
Net asset value, end of year $ 12.50 $ 10.15
Total return++ 29.68% $ 2.05%
Ratios to average net assets/supplemental data:
Net assets, end of year (in 000's) $1,526 $ 681
Ratio of operating expenses to average net assets+++ 0.50% 0.50%+
Ratio of net investment income/(loss) to average net assets 0.40% 0.86%+
Portfolio turnover rate 69% 25%
</TABLE>
* LifeGoal Growth Portfolio Investor A 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.
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<PAGE>
FOR AN INVESTOR B SHARE OUTSTANDING THROUGHOUT THE PERIOD
LifeGoal Growth Portfolio
<TABLE>
<CAPTION>
PERIOD
ENDED
Investor B Shares 03/31/98*
<S> <C>
Operating performance:
Net asset value, beginning of year $ 11.98
Net investment income/(loss) ( 0.02)(a)
Net realized and unrealized gain on investments 0.99
Net increase in net assets resulting from investment operations 0.97
Distributions:
Distributions from net investment income ( 0.01)
Distributions in excess of net investment income ( 0.24)
Distributions from net realized capital gains ( 0.21)
Total distributions ( 0.46)
Net asset value, end of year $ 12.49
Total return++ 8.55%
Ratios to average net assets/supplemental data:
Net assets, end of year (in 000's) $5,829
Ratio of operating expenses to average net assets+++ 1.25%+
Ratio of net investment income/(loss) to average net assets ( 0.35)%+
Portfolio turnover rate 69%
</TABLE>
* LifeGoal Growth Portfolio Investor B Shares commenced investment operations
on August 12, 1997.
+ 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 shares
method, which more appropriately represents the per share for the period.
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<PAGE>
FOR AN INVESTOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
LifeGoal Balanced Growth Portfolio
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
Investor A Shares 03/31/98 03/31/97*
<S> <C> <C>
Operating performance:
Net asset value, beginning of year $ 9.95 $ 10.05
Net investment income 0.28 (a) 0.19
Net realized and unrealized loss/gain on investments 1.79 ( 0.10)
Net increase/(decrease) in net assets resulting from investment operations 2.07 0.09
Distributions:
Distributions from net investment income ( 0.27) ( 0.19)
Distributions in excess of net investment income ( 0.31) --
Distributions from net realized capital gains ( 0.50) --
Total distributions ( 1.08) ( 0.19)
Net asset value, end of period $ 10.94 $ 9.95
Total return++ 21.76% 0.86%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $ 489 $ 94
Ratio of operating expenses to average net assets+++ 0.50% 0.50%+
Ratio of net investment income to average net assets 2.62% 3.69%+
Portfolio turnover rate 94% 1%
</TABLE>
* LifeGoal Balanced Growth Portfolio Investor A 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.
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<PAGE>
FOR AN INVESTOR B SHARE OUTSTANDING THROUGHOUT THE PERIOD
LifeGoal Balanced Growth Portfolio
<TABLE>
<CAPTION>
PERIOD
ENDED
Investor B Shares 03/31/98*
<S> <C>
Operating performance:
Net asset value, beginning of year $ 10.88
Net investment income 0.11 (a)
Net realized and unrealized gain/(loss) on investments 0.87
Net increase/(decrease) in net assets resulting from investment operations 0.98
Distributions:
Distributions from net investment income ( 0.20)
Distributions in excess of net investment income ( 0.24)
Distributions from net realized capital gains ( 0.50)
Total distributions ( 0.94)
Net asset value, end of year $ 10.92
Total return++ 9.70%
Ratios to average net assets/supplemental data:
Net assets, end of year (in 000's) $4,917
Ratio of operating expenses to average net assets+++ 1.25%+
Ratio of net investment income to average net assets 1.87%+
Portfolio turnover rate 94%
</TABLE>
* LifeGoal Balanced Growth Portfolio Investor B Shares commenced investment
operations on August 13, 1997.
+ 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.
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<PAGE>
FOR AN INVESTOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
LifeGoal Income and Growth Portfolio
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
Investor A Shares 03/31/98 03/31/97*
<S> <C> <C>
Operating performance:
Net asset value, beginning of year $ 9.97 $ 10.03
Net investment income 0.41 (a) 0.31
Net realized and unrealized gain/loss on investments 0.89 ( 0.06)
Net increase in net assets resulting from investment operations 1.30 0.25
Distributions:
Distributions from net investment income ( 0.38) ( 0.31)
Distributions in excess of net investment income ( 0.11) --
Distributions from net realized capital gains ( 0.07) --
Total distributions ( 0.56) ( 0.31)
Net asset value, end of period $ 10.71 $ 9.97
Total return++ 13.38% 2.54%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $ 126 $ 131
Ratio of operating expenses to average net assets+++ 0.50% 0.50%+
Ratio of net investment income to average net assets 3.92% 6.09%+
Portfolio turnover rate 64% 2%
</TABLE>
* LifeGoal Income and Growth Portfolio Investor A 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.
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<PAGE>
FOR AN INVESTOR B SHARE OUTSTANDING THROUGHOUT THE PERIOD
LifeGoal Income and Growth Portfolio
<TABLE>
<CAPTION>
PERIOD
ENDED
Investor B Shares 03/31/98
<S> <C>
Operating performance:
Net asset value, beginning of year $ 10.51
Net investment income 0.19 (a)
Net realized and unrealized gain/(loss) on investments 0.36
Net increase in net assets resulting from investment operations 0.55
Distributions:
Distributions from net investment income ( 0.22)
Distributions in excess of net investment income ( 0.07)
Distributions from net realized capital gains ( 0.07)
Total distributions ( 0.36)
Net asset value, end of period $ 10.70
Total return++ 5.33%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $1,212
Ratio of operating expenses to average net assets+++ 1.25%+
Ratio of net investment income to average net assets 3.17%+
Portfolio turnover rate 64%
</TABLE>
* LifeGoal Income and Growth Portfolio Investor B Shares commenced investment
operations on August 7, 1997.
+ 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.
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