GE INSTITUTIONAL FUNDS
SEMI-ANNUAL REPORT
March 31, 2000
[GE LOGO OMITTED]
WE BRING GOOD THINGS TO LIFE.
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GE INSTITUTIONAL FUNDS
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UNDERSTANDING YOUR REPORT
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A LETTER FROM THE PRESIDENT .......................................... 1
REVIEW OF PERFORMANCE AND SCHEDULES OF INVESTMENTS
GE Institutional Funds' Portfolio Managers' Q&A and Schedules
of Investments
EQUITY FUNDS
U.S. EQUITY FUND ............................................ 2
S&P 500 INDEX FUND .......................................... 7
PREMIER GROWTH EQUITY FUND .................................. 14
VALUE EQUITY FUND ........................................... 17
MID-CAP GROWTH FUND ......................................... 21
MID-CAP VALUE EQUITY FUND ................................... 25
SMALL-CAP VALUE EQUITY FUND ................................. 28
INTERNATIONAL EQUITY FUND ................................... 31
EUROPE EQUITY FUND .......................................... 36
EMERGING MARKETS FUND ....................................... 40
STRATEGIC INVESTMENT FUND ................................... 46
INCOME FUNDS .................................................... 50
INCOME FUND
MONEY MARKET FUND
NOTES TO PERFORMANCE AND NOTES TO SCHEDULES OF
INVESTMENTS .................................................. 59
FINANCIAL STATEMENTS
Financial Highlights ............................................ 60
Notes to Financial Highlights ................................... 63
Statements of Assets and Liabilities,
Operations, and Changes in Net Assets ........................... 64
NOTES
Notes to Financial Statements ................................... 72
GE INSTITUTIONAL FUNDS' INVESTMENT TEAM ..................INSIDE BACK COVER
This report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
<PAGE>
A LETTER FROM THE PRESIDENT
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DEAR SHAREHOLDER:
We are pleased to provide you with the semi-annual report for the six-month
period ended March 31, 2000 for the GE Institutional Funds. During the period
three Funds commenced operations: GE INSTITUTIONAL PREMIER GROWTH EQUITY FUND,
GE INSTITUTIONAL STRATEGIC INVESTMENT FUND and GE INSTITUTIONAL VALUE EQUITY
FUND.
On April 28, 2000, two new Fund options were added, GE INSTITUTIONAL PREMIER
INTERNATIONAL EQUITY FUND and GE INSTITUTIONAL PREMIER RESEARCH EQUITY FUND.
Each of these Funds invest in a more limited number of securities -- typically
30 to 40 quality stocks -- instead of investing in the 100 plus stocks like the
average mutual fund portfolio. For more complete information about the new GE
Institutional Funds, obtain the current Prospectus (dated April 28, 2000), which
contains details on objectives, investment restrictions, fees and expenses. Read
it carefully before you invest.
MARKET OVERVIEW
Over the past six months the U.S. equity markets have been particularly volatile
and narrowly focused on the technology sector. The S&P 500 had gains of 15% for
the quarter ended December 31, 1999 and 2.5% for the quarter ended March 31,
2000. Despite an environment in the U.S. of robust economic growth, low
inflation, solid corporate earnings, modestly higher interest rates, and
declining oil prices, the markets behaved much like a roller coaster during the
quarter. Even after Y2K fears subsided and despite strong fourth quarter
earnings results, the S&P 500 initially had declined by 16% through mid-February
as investors remained on the sidelines before the late quarter rally.
International equity markets have behaved in much the same way with areas like
technology, telecom, and media garnering investor attention.
The Federal Reserve increased interest rates three times during the six months
ended March 31, 2000 as the pace of economic activity rekindled fears of
inflation. These rate increases continue to have a significant impact on bond
values and bond returns as well as on the U.S. equity markets.
MARKET OUTLOOK
In general, the earnings for S&P 500 companies were very good for 1999, coming
in at $51 per share, which represented 14% growth over 1998. The 2000 consensus
earnings estimate for the S&P 500 is now approaching 11%, and 2001 consensus
earnings are estimated to be up approximately 8%. First quarter earnings are
anticipated to be strong given very few announcements regarding earnings
disappointments. Offsetting this positive outlook, the Federal Reserve's
commitment to a "gradual adjustment to a more balanced noninflationary growth"
scenario is likely to continue to challenge the U.S. equity markets over the
near term. Our investment philosophy, therefore, continues to be one of
diversification with a neutral bias to stocks, as demonstrated in the GE
Institutional Strategic Investment Fund.
YEAR 2000
Lastly, a comment on the Year 2000 issue. To date, we have not experienced any
significant disruptions to our financial or operating activities caused by
failure of the computerized systems from Year 2000 issues but we continue to be
diligent in our review of systems.
Thank you for your continued investment in the GE Institutional Funds. We look
forward to helping you serve your financial needs in the future.
Sincerely,
/S/SIGNATURE
Michael J. Cosgrove
MIKE COSGROVE IS THE PRESIDENT OF THE ASSET MANAGEMENT SERVICES GROUP OF GE
FINANCIAL ASSURANCE HOLDINGS, INC., AND OF GE INVESTMENT DISTRIBUTORS, INC., THE
FUNDS' DISTRIBUTOR, AND SERVES AS A TRUSTEE OF THE GE PENSION TRUST AND GE'S
EMPLOYEE SAVINGS PROGRAM. PREVIOUSLY CHIEF FINANCIAL OFFICER OF GE INVESTMENTS
AND ASSISTANT TREASURER - GE COMPANY, MIKE JOINED GE IN 1970 AND HELD A NUMBER
OF MANAGERIAL POSITIONS IN FINANCE AND SALES IN THE INTERNATIONAL OPERATION AND
IN GE TRADING COMPANY. HE HAS A B.S. IN ECONOMICS FROM FORDHAM UNIVERSITY AND AN
M.B.A. FROM ST. JOHN'S UNIVERSITY.
1
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U.S. EQUITY FUND
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Q&A
GENE BOLTON IS RESPONSIBLE FOR THE OVERALL MANAGEMENT OF THE U.S. EQUITY
INVESTMENT PROCESS AT GE ASSET MANAGEMENT WITH TOTAL U.S. EQUITY ASSETS OF
APPROXIMATELY $40 BILLION. HE LEADS A TEAM OF PORTFOLIO MANAGERS FOR THE U.S.
EQUITY FUND. GENE JOINED GE IN 1964. AFTER COMPLETING GE'S FINANCIAL MANAGEMENT
PROGRAM, HE HELD A NUMBER OF FINANCIAL AND STRATEGIC PLANNING POSITIONS IN THE
U.S. AND EUROPE. JOINING GE ASSET MANAGEMENT IN 1984 AS CHIEF FINANCIAL OFFICER,
HE MOVED TO EQUITIES AS A PORTFOLIO MANAGER IN 1986 AND WAS NAMED TO HIS PRESENT
POSITION IN 1991. GENE IS A TRUSTEE OF THE GE PENSION TRUST AND GE'S EMPLOYEE
SAVINGS PROGRAM, AS WELL AS CHAIRMAN OF THE ASSET ALLOCATION COMMITTEE OF GE
ASSET MANAGEMENT. HE ALSO SERVES AS A TRUSTEE OF THE INVESTMENT MANAGEMENT
WORKSHOP, SPONSORED BY THE ASSOCIATION FOR INVESTMENT MANAGEMENT AND RESEARCH.
GENE IS A GRADUATE OF MUNDELEIN COLLEGE WITH A B.A. IN BUSINESS MANAGEMENT.
Q. HOW DID THE U.S. EQUITY FUND PERFORM COMPARED TO ITS BENCHMARK FOR THE SIX
MONTHS ENDED MARCH 31, 2000?
A. The U.S. Equity Fund posted a return of 14.32% for the six-month period ended
March 31, 2000 while the Standard & Poor's 500 Composite Price Index returned
17.78% for the same period.
Q. WHY DID THE FUND UNDERPERFORM ITS BENCHMARK FOR THE SIX MONTHS ENDED MARCH
31, 2000?
A. The Fund underperformed the benchmark because of an underweighting in
technology and one segment of the utilities sector. Another area that detracted
from performance was the consumer stable sector which pulled back during this
period. The Fund was overweight and had solid stock selection in several sectors
including capital goods, consumer cyclical, and financial.
Q. WHICH STOCKS/SECTORS HAVE PERFORMED WELL? WHICH HAVE NOT PERFORMED WELL?
A. Our investments in the financial sector did well over the six month period
ended March 31, 2000. We were overweight this sector and had positive stock
selection. Among financial stocks, consumer spending and strong financial
markets continued to drive earnings for these companies. Our holdings in
Citigroup, Morgan Stanley Dean Witter, and Goldman Sachs were all beneficiaries
of these trends.
Our technology holdings did well despite an underweighting of the sector due
to valuation concerns. In particular, Analog Devices, Applied Materials, Intel
and EMC all contributed positively. In addition, avoiding stocks such as Yahoo,
AOL, Qualcomm, and 3COM also helped performance during this period. Although our
holdings did well, the market was very narrow and we just could not own enough
technology issues to get to a market weight because of our valuation discipline.
We believe valuations are very important in technology and will continue to look
for those companies with sustainable business models and attractive valuations
for the long term.
Consumer cyclical companies also did well as entertainment, broadcast media,
commercial services, and retailers all posted higher returns for the period.
Holdings such as Liberty Media, NTL Inc, and Interpublic Group showed very good
performance. In addition, holdings such as Wal-Mart and Target did particularly
well given healthy consumer spending. The capital goods area also provided a
boost to performance due to strong stock selection with companies like Molex,
Dover, and Martin Marietta Materials all delivering good performance. In
addition, our energy sector overweight and stock selections within the sector
contributed positively to performance. In particular, Schlumberger, Exxon Mobil,
and Nabors all benefited from rising oil prices over the period.
The consumer stable and utilities sectors contributed negatively to
performance. Within consumer stables, health care stocks, household products,
and some beverage stocks were all down during this period. The utility sector
was positive for the six months ended March 31, 2000, however, it was the
natural gas industry that boosted performance the most and we were underweight
in this area. Our holdings in the long distance telecom sector, however, helped
to mitigate the losses with Vodafone, Global Crossing, and U.S. West as notable
contributors.
2
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U.S. EQUITY FUND
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Q. HOW HAS THE VOLATILITY IN THE MARKET IMPACTED THE FUND?
A. Over the past six months the markets have been particularly volatile and
narrowly focused on technology. The S&P 500 had gains of 15% for the quarter
ended December 31, 1999 following a decline of 6.2% in the quarter ended
September 30, 1999. For the quarter ended March 31, 2000, the S&P 500 gained
2.5%. Despite an environment in the U.S. of robust economic growth, low
inflation, solid corporate earnings, modestly higher interest rates, and
declining oil prices, the markets behaved much like a roller coaster in the
quarter ended March 31, 2000. This is evident in the disparate returns of the
major averages for the quarter as the DJIA was down 4.8%, the S&P 500 up 2.5%,
and the NASDAQ up 12.4%.
In terms of the Fund, we continue to own those companies that have solid
earnings growth. We look at the swings in the market as opportunities to buy or
sell those stocks that become respectively undervalued or overvalued relative to
the market and to their peers.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. The U.S. economy's strong underpinnings are encouraging for the long term.
Despite the Federal Reserve's commitment to containing any inflationary
pressures through rate increases, we believe companies should produce healthy
earnings over the next few quarters. The market will continue to be volatile
although this should be beneficial as the speculative excesses are eliminated.
With the Fund broadly diversified in high-quality, reasonably valued stocks, we
believe it is well positioned for the volatility that we expect for the
remainder of the year.
3
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U.S. EQUITY FUND
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COMPARISON OF CHANGE IN VALUE
OF A $10,000 INVESTMENT
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[LINE GRAPH OMITTED]
U.S. EQUITY FUND S&P 500
11/25/97 10000.00 10000.00
12/97 10298.16 10168.40
3/98 11529.14 11588.04
6/98 11819.37 11972.16
9/98 10628.43 10787.78
12/98 12743.71 13086.53
3/99 13467.20 13735.95
6/99 14562.76 14691.87
9/99 13632.57 13787.60
12/99 15264.48 15843.46
3/00 15585.02 16238.69
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AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIODS ENDED MARCH 31, 2000
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SIX ONE SINCE
MONTHS YEAR INCEPTION COMMENCEMENT
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U.S. Equity Fund 14.32% 15.73% 20.78% 11/25/97
--------------------------------------------------------------------------------
S&P 500 17.78% 18.17% 22.93%
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INVESTMENT PROFILE
A mutual fund
designed for
investors who seek
long-term growth
of capital by
investing
primarily in
equity securities
of U.S. companies.
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SECTOR ALLOCATION
AS OF MARCH 31, 2000
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[PIE GRAPH OMITTED]
TECHNOLOGY 27.5%
FINANCIAL SERVICES 15.8%
CONSUMER 12.6%
HEALTHCARE 10.8%
CAPITAL GOODS 8.3%
UTILITIES 8.3%
ENERGY 7.0%
RETAIL TRADE 5.4%
BASIC MATERIALS 2.0%
TRANSPORTATION 1.5%
CASH & OTHER 0.8%*
*INCLUDES CASH EQUALIZED BY FUTURES OF 0.28%.
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TOP TEN LARGEST HOLDINGS AT MARCH 31, 2000
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Intel Corp. 4.11%
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Cisco Systems Inc. 3.81%
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Citigroup Inc. 3.71%
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Microsoft Corp. 2.79%
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Exxon Mobil Corp. 2.26%
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Merck & Co. Inc. 2.10%
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First Data Corp. 2.04%
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Applied Materials Inc. 1.95%
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Bristol-Myers Squibb Co. 1.54%
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Target Corp. 1.51%
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SEE NOTES TO PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
4
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GE U.S. EQUITY FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
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U.S. EQUITY FUND
NUMBER
OF SHARES VALUE
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COMMON STOCK -- 99.2%
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BASIC MATERIALS -- 2.0%
Airgas Inc. ........................ 10,992 $ 91,371(a)
Barrick Gold Corp. ................. 39,970 627,029
Champion International Corp. ....... 15,538 827,399
Du Pont de Nemours (E.I.) & Co. .... 8,793 464,930
Mead Corp. ......................... 11,192 391,021
Newmont Mining Corp. ............... 59,955 1,345,240
PPG Industries Inc. ................ 9,993 522,759
Rayonier Inc. ...................... 13,391 652,811
Weyerhaeuser Co. ................... 7,594 432,858
5,355,418
CAPITAL GOODS -- 8.3%
Boeing Co. ......................... 8,793 333,584
Deere & Co. ........................ 9,592 364,496
Dover Corp. ........................ 80,539 3,855,805
Eaton Corp. ........................ 6,795 530,010
Emerson Electric Co. ............... 45,691 2,415,912
General Dynamics Corp. ............. 13,190 656,202
Honeywell International Inc. ....... 55,676 2,933,429(e)
Hubbell Inc. (Class B) ............. 34,381 941,180
Ingersoll-Rand Co. ................. 9,744 431,172
Martin Marietta Materials Inc. ..... 24,240 1,151,400
Masco Corp. ........................ 18,386 376,913
Molex Inc. (Class A) ............... 55,858 2,478,699
Parker Hannifin Corp. .............. 11,592 478,894
Textron Inc. ....................... 40,474 2,463,855
United Technologies Corp. .......... 36,773 2,323,594
Waste Management Inc. .............. 45,306 620,126
22,355,271
CONSUMER - CYCLICAL -- 8.5%
AT&T Corp. - Liberty Media
Group (Class A) ................. 57,957 3,433,952(a)
Carnival Corp. (Class A) ........... 16,588 411,590
Catalina Marketing Corp. ........... 14,589 1,477,136(a)
Comcast Corp. (Class A) ............ 59,356 2,574,567
Ford Motor Co. ..................... 15,988 734,449
Gannett Co. Inc. ................... 33,174 2,334,620
Harman International
Industries Inc. ................. 2,190 131,400
Interpublic Group Cos. Inc. ........ 59,164 2,795,499
Knight-Ridder Inc. ................. 17,587 895,838
McDonald's Corp. ................... 65,750 2,469,734
NTL Inc. ........................... 33,875 3,144,023(a)
The Walt Disney Co. ................ 56,038 2,318,572
Time Warner Inc. ................... 1,981 198,100
22,919,480
CONSUMER - STABLE -- 4.1%
Anheuser Busch Cos. Inc. ........... 13,588 845,853
Avon Products Inc. ................. 16,188 470,464
Bestfoods .......................... 10,792 505,200
Colgate-Palmolive Co. .............. 5,116 288,415
Energizer Holdings Inc. ............ 2,198 50,966(a)
NUMBER
OF SHARES VALUE
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General Mills Inc. ................. 18,386 $ 665,343
Gillette Co. ....................... 19,386 730,610
Heinz (H.J.) Co. ................... 11,991 418,186
Pepsico Inc. ....................... 81,138 2,804,332
Philip Morris Cos. Inc. ............ 16,068 339,436
Procter & Gamble Co. ............... 22,383 1,259,044
Ralston Purina Co. ................. 74,343 2,035,140
Sara Lee Corp. ..................... 37,970 683,460
11,096,449
ENERGY -- 7.0%
Anadarko Petroleum Corp. ........... 11,791 456,164
Baker Hughes Inc. .................. 20,385 616,646
BP Amoco PLC ADR ................... 8,794 466,632
Burlington Resources Inc. .......... 22,519 833,203
Calpine Corp. ...................... 3,010 282,940(a)
Chevron Corp. ...................... 9,193 849,778
Conoco Inc. (Class B) .............. 31,976 819,385
Exxon Mobil Corp. .................. 78,170 6,082,603
Halliburton Co. .................... 23,982 983,262
Nabors Industries Inc. ............. 9,993 387,853(a)
Royal Dutch Petroleum Co. ADR ...... 35,973 2,070,696
Schlumberger Ltd. .................. 36,009 2,754,689
Texaco Inc. ........................ 7,195 385,832
Transocean Sedco Forex Inc. ........ 3,397 174,309
Unocal Corp. ....................... 38,171 1,135,587
USX-Marathon Group ................. 17,987 468,786
18,768,365
FINANCIAL -- 12.4%
American Express Co. ............... 14,389 2,143,062
Associates First Capital
Corp. (Class A) ................. 54,958 1,178,162
AXA Financial Inc. ................. 14,389 516,205
Bank of America Corp. .............. 52,160 2,735,140
Bank One Corp. ..................... 1,798 61,806
Chase Manhattan Corp. .............. 23,862 2,080,468
Citigroup Inc. ..................... 168,533 9,996,114(e)
Countrywide Credit Industries Inc. . 6,995 190,614
Federal National Mortgage Assoc. ... 58,876 3,322,814
Fidelity National Financial Inc. ... 11,981 165,492
FleetBoston Financial Corp. ........ 45,519 1,661,443
Goldman Sachs Group Inc. ........... 7,994 840,369
Lehman Brothers Holdings Inc. ...... 12,630 1,225,110
Morgan Stanley, Dean
Witter & Co. .................... 47,964 3,912,064
PNC Bank Corp. ..................... 22,025 992,502
State Street Corp. ................. 11,080 1,073,375(f)
United States Bancorp. ............. 23,982 524,606
Wells Fargo & Co. .................. 19,986 818,177
33,437,523
HEALTHCARE -- 10.8%
Abbott Laboratories ................ 48,963 1,722,886
Allergan Inc. ...................... 3,164 158,200
American Home Products Corp. ....... 12,191 653,742
Amgen Inc. ......................... 23,982 1,471,895(a)
Bristol-Myers Squibb Co. ........... 71,946 4,154,881
Cardinal Health Inc. ............... 87,335 4,006,493
Dentsply International Inc. ........ 11,192 317,573
Eli Lilly & Co. .................... 15,189 956,907
Henry Schein Inc. .................. 19,186 310,573(a)
Johnson & Johnson .................. 35,213 2,467,111
Lincare Holdings Inc. .............. 24,399 692,322(a)
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See Notes to Schedule of Investments and Notes to Financial statements.
5
<PAGE>
GE U.S. EQUITY FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
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Merck & Co. Inc. ................... 91,132 $ 5,661,575
Omnicare Inc. ...................... 7,195 86,790
Pfizer Inc. ........................ 24,182 884,154
Pharmacia & Upjohn Inc. ............ 11,192 663,126
Schering Plough Corp. .............. 29,977 1,101,655
Shire Pharmaceuticals Group
PLC ADR ......................... 1,797 92,096(a)
Sybron International Corp. ......... 32,400 939,600(a)
Warner-Lambert Co. ................. 16,667 1,625,033
Watson Pharmaceuticals Inc. ........ 31,656 1,256,348(a)
29,222,960
INSURANCE -- 3.4%
AFLAC Inc. ......................... 3,598 163,934
American International
Group Inc. ...................... 25,081 2,746,369(e)
Berkshire Hathaway Inc. (Class B) .. 304 553,280(a)
Chubb Corp. ........................ 18,466 1,247,609
Hartford Financial Services
Group Inc. ...................... 28,812 1,519,833
Lincoln National Corp. ............. 10,792 361,532
Loews Corp. ........................ 6,195 309,750
Marsh & McLennan Cos. Inc. ......... 10,712 1,181,668
Reliastar Financial Corp. .......... 13,990 473,911
St. Paul Cos. Inc. ................. 17,587 600,156
9,158,042
RETAIL TRADE -- 5.4%
Costco Wholesale Corp. ............. 9,194 483,260(a)
CVS Corp. .......................... 41,370 1,553,961
Federated Department Stores Inc. ... 28,379 1,184,823(a)
Home Depot Inc. .................... 39,371 2,539,430
Lowe's Cos. Inc. ................... 34,374 2,006,582
Target Corp. ....................... 54,439 4,069,315
Wal-Mart Stores Inc. ............... 51,961 2,883,835
14,721,206
TECHNOLOGY - ELECTRONICS & EQUIPMENT -- 18.7%
Analog Devices Inc. ................ 40,802 3,287,111(a)
Applied Materials Inc. ............. 55,880 5,266,690(a)
Cisco Systems Inc. ................. 133,019 10,284,031(a)
Dell Computer Corp. ................ 72,547 3,913,004(a)
Hewlett Packard Co. ................ 6,395 847,737
Intel Corp. ........................ 83,937 11,074,438
International Business
Machines Corp. .................. 17,987 2,122,466
Lucent Technologies Inc. ........... 38,211 2,321,318
Motorola Inc. ...................... 14,708 2,094,052
Nortel Networks Corp. .............. 27,499 3,464,874
PerkinElmer Inc. ................... 6,795 451,868
Pitney Bowes Inc. .................. 36,972 1,652,186
Sun Microsystems Inc. .............. 22,263 2,086,113(a)
Tellabs Inc. ....................... 5,996 377,654(a)
Texas Instruments Inc. ............. 7,994 1,279,040
50,522,582
TECHNOLOGY - SOFTWARE & SERVICES -- 8.8%
Automatic Data Processing Inc. ..... 46,845 2,260,271
EMC Corp. .......................... 29,733 3,716,625(a)
Equifax Inc. ....................... 109,343 2,760,911
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
First Data Corp. ................... 124,142 $ 5,493,283
Microsoft Corp. .................... 70,948 7,538,225(a)
Unisys Corp. ....................... 73,145 1,865,198(a)
23,634,513
TRANSPORTATION -- 1.5%
Burlington Northern
Santa Fe Corp. .................. 47,964 1,061,204
Canadian Pacific Ltd. .............. 36,006 805,634
Continental Airlines Inc. (Class B) 20,585 841,412(a)
Delta Air Lines Inc. ............... 17,588 936,561
United Parcel Service
Inc. (Class B) .................. 7,195 453,285
4,098,096
UTILITIES -- 8.3%
Alltel Corp. ....................... 12,007 757,191
AT&T Corp. ......................... 42,624 2,397,600
Bell Atlantic Corp. ................ 19,186 1,172,744
Duke Energy Corp. .................. 20,984 1,101,660
Edison International ............... 31,975 529,586
El Paso Energy Corp. ............... 24,382 984,423
Enron Corp. ........................ 7,338 549,433
FPL Group Inc. ..................... 8,794 405,074
Global Crossing Ltd. ............... 21,983 899,929(a)
GTE Corp. .......................... 39,351 2,793,921
MCI WorldCom Inc. .................. 18,386 833,116(a)
New Century Energies Inc. .......... 32,775 985,298
SBC Communications Inc. ............ 88,574 3,720,108
Sprint Corp. ....................... 23,383 1,473,129
U.S. WEST Inc. ..................... 28,414 2,063,567
Vodafone AirTouch PLC ADR .......... 29,379 1,632,371
22,299,150
TOTAL INVESTMENTS IN SECURITIES
(COST $230,783,125) ............. 267,589,055
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SHORT-TERM INVESTMENTS -- 0.5%
--------------------------------------------------------------------------------
GEI Short-Term Investment Fund
(COST $1,386,982) ..............1,386,982 1,386,982
OTHER ASSETS AND LIABILITIES,
NET 0.3% ....................... 749,733
------------
NET ASSETS-- 100% ................. $269,725,770
============
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OTHER INFORMATION
--------------------------------------------------------------------------------
The U.S. Equity Fund had the following short Futures Contracts open at March 31,
2000:
NUMBER
EXPIRATION OF UNDERLYING UNREALIZED
DESCRIPTION DATE CONTRACTS FACE VALUE LOSS
--------------------------------------------------------------------------------
S&P 500 June 2000 2 $(757,650) $(775)
--------------
See Notes to Schedule of Investments and Notes to Financial statements.
6
<PAGE>
S&P 500 INDEX FUND
--------------------------------------------------------------------------------
Q&A
JAMES B. MAY LEADS A TEAM OF PORTFOLIO MANAGERS AT STATE STREET GLOBAL ADVISORS,
THE SUB-ADVISER FOR THE S&P 500 INDEX FUND. SINCE 1994, JAMES HAS BEEN AN
INVESTMENT OFFICER AND PORTFOLIO MANAGER IN THE U.S. STRUCTURED PRODUCTS GROUP
AT STATE STREET BANK AND TRUST COMPANY WITH TOTAL ASSETS UNDER MANAGEMENT
EXCEEDING $723 BILLION. FROM 1991 TO 1993, JAMES SERVED AS AN INVESTMENT SUPPORT
ANALYST IN THE U.S. PASSIVE SERVICES GROUP AT STATE STREET. JAMES HOLDS A B.S.
IN FINANCE FROM BENTLEY COLLEGE AND AN M.B.A. FROM BOSTON COLLEGE.
Q. HOW DID THE S&P 500 INDEX FUND PERFORM COMPARED TO ITS BENCHMARK FOR THE SIX
MONTHS ENDED MARCH 31, 2000?
A. The S&P 500 Index Fund had a return of 18.11% for the six-month period ended
March 31, 2000 while the S&P 500 Index returned 17.78% for the same period.
Q. WHY DID THE FUND OUTPERFORM ITS BENCHMARK FOR THE SIX MONTHS ENDED MARCH 31,
2000?
A. Due to the relatively small size of the Fund's portfolio during a portion of
the time period referenced, the Fund utilized an optimization technique and
therefore did not hold all of the securities in the S&P 500 Index. The Fund's
outperformance is primarily a result of this optimization technique. As a result
of this technique, slight misweights of securities to the benchmark occurred and
most of the bottom portion of the Index was not held. The performance of these
stocks comprising the bottom portion of the Index generally lagged relative to
the S&P 500 Index. Omitting those stocks and the other misweights contributed to
the outperformance of the Fund relative to the S&P 500 Index. The Fund also
received considerable contributions during the later part of the first quarter
2000. The investment of those new assets also contributed to performance.
Q. WHAT HAS YOUR INVESTMENT STRATEGY BEEN?
A. As described above, we have been utilizing an optimization technique. During
the month of March 2000, however, the Fund experienced significant cash flow
resulting in net assets of approximately $150 million. That growth in assets has
permitted us to use full replication. With full replication, all 500
constituents of the S&P 500 Index are owned by the Fund in the approximate
capitalization weight of the Index. It is anticipated that this methodology will
provide tighter and more consistent tracking with the performance of the Index.
Q. WHICH INVESTMENTS STAND OUT?
A. Over the past six months technology stocks have dominated the headlines as
well as the S&P 500 Index. The best performing stock in the Index over that time
frame was Network Appliance which returned an incredible 362.12%. The software
company Oracle also continued to dazzle Wall Street by posting a return of
243.13%. Raytheon and Rite Aid had a difficult six months as they posted returns
of -63.42% and -58.44%, respectively. Proctor & Gamble made headline news in the
first quarter 2000 when it announced that it missed earning estimates. Investors
responding by selling the stock as P&G posted a return of -48.14% in the first
quarter.
Technology continued to dominate the Index. However, despite the spectacular
returns of high flying stocks in the first quarter of 2000 such as
Scientific-Atlanta, +126.45%, and LSI Logic, +115.18%, larger capitalization
names had a greater influence on the overall return of the S&P 500 Index. Intel
and Cisco Systems both had strong first quarters, recording returns of 60.33%
and 44.34% respectively. By virtue of their size in the Index and despite the
lower returns, those two stocks provided most of the performance of the index
for the first quarter of 2000. At the end of the quarter, Intel comprised 3.46%
of the Index and Cisco was 4.15%. At one point Cisco actually eclipsed Microsoft
as the largest company in the S&P 500. In a capitalization weighted portfolio,
the larger securities will exert greater influence on the overall return of the
Index than smaller companies. In this quarter, despite performing much better
than Intel and Cisco, Scientific-Atlanta and LSI Logic, at weights of 0.08% and
0.17% respectively, had less of an impact.
Q. WHAT IS THE OUTLOOK FOR THE FUND AND HOW HAVE YOU POSITIONED THE FUND GOING
FORWARD?
A. Assuming the Fund remains at or above its current asset size, we expect the
Fund to remain fully invested to the S&P 500 Index and to closely track the
performance of the S&P 500 Index.
7
<PAGE>
S&P 500 INDEX FUND
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
--------------------------------------------------------------------------------
[LINE GRAPH OMITTED]
S&P 500 INDEX FUND S&P 500
11/25/97 10000.00 10000.00
12/97 10212.03 10168.40
3/98 11643.72 11588.04
6/98 12044.19 11972.16
9/98 10862.80 10787.78
12/98 13198.03 13086.53
3/99 13888.39 13735.95
6/99 14873.17 14691.87
9/99 13949.31 13787.60
12/99 15993.98 15843.46
3/00 16475.47 16238.69
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
SIX ONE SINCE
MONTHS YEAR INCEPTION COMMENCEMENT
--------------------------------------------------------------------------------
S&P 500 Index Fund 18.11% 18.63% 23.68% 11/25/97
--------------------------------------------------------------------------------
S&P 500 17.78% 18.17% 22.93%
--------------------------------------------------------------------------------
INVESTMENT PROFILE
A mutual fund designed for investors who seek growth of
capital and accumulation of income that corresponds to the
investment return of the Standard & Poor's 500 Composite Stock
Price Index by investing primarily in equity securities of
companies contained in that Index.
--------------------------------------------------------------------------------
SECTOR ALLOCATION AS OF MARCH 31, 2000
--------------------------------------------------------------------------------
[PIE GRAPH OMITTED]
TECHNOLOGY 33.1%
FINANCIAL SERVICES 12.6%
CONSUMER 12.1%
UTILITIES 9.7%
HEALTHCARE 8.8%
CAPITAL GOODS 7.6%
RETAIL TRADE 5.7%
ENERGY 5.3%
BASIC MATERIALS 2.6%
CASH & OTHER 1.9%*
TRANSPORTATION 0.6%
*INCLUDES CASH EQUALIZED BY FUTURES OF 2.1%.
--------------------------------------------------------------------------------
TOP TEN LARGEST HOLDINGS AT MARCH 31, 2000
--------------------------------------------------------------------------------
Microsoft Corp. 4.26%
--------------------------------------------------------------------------------
Cisco Systems Inc. 4.07%
--------------------------------------------------------------------------------
General Electric Co. 3.92%
--------------------------------------------------------------------------------
Intel Corp. 3.39%
--------------------------------------------------------------------------------
Exxon Mobil Corp. 2.07%
--------------------------------------------------------------------------------
Wal-Mart Stores Inc. 1.90%
--------------------------------------------------------------------------------
Oracle Systems Corp. 1.69%
--------------------------------------------------------------------------------
International Business Machines Corp. 1.64%
--------------------------------------------------------------------------------
Citigroup Inc. 1.54%
--------------------------------------------------------------------------------
Lucent Technologies Inc. 1.49%
--------------------------------------------------------------------------------
SEE NOTES TO PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
8
<PAGE>
GE S&P 500 INDEX FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
S&P 500 INDEX FUND
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- 98.1%
--------------------------------------------------------------------------------
BASIC MATERIALS -- 2.6%
Air Products & Chemicals Inc. .... 2,600 $ 73,937
Alcan Aluminum Ltd................ 2,500 84,687
Alcoa Inc......................... 4,200 295,050
Allegheny Technologies Inc........ 1,200 24,075
Arch Coal Inc..................... 221 1,550
Avery Dennison Corp............... 1,300 79,381
Barrick Gold Corp................. 4,400 69,025
Bethlehem Steel Corp.............. 1,700 10,200(a)
Boise Cascade Corp................ 700 24,325
Champion International Corp....... 1,100 58,575
Crown Cork & Seal Inc............. 1,700 27,200
Dow Chemical Co................... 2,500 285,000
Du Pont de Nemours (E.I.) & Co.... 11,803 624,084
Eastman Chemical Co............... 900 40,950
Ecolab Inc........................ 1,500 55,031
Engelhard Corp.................... 1,600 24,200
FMC Corp.......................... 400 22,600(a)
Fort James Corp................... 2,500 55,000
Freeport McMoran Copper
& Gold Inc. (Class B) ......... 2,100 25,331
Georgia Pacific Corp.............. 1,900 75,169
Great Lakes Chemical Corp......... 700 23,800
Hercules Inc...................... 1,400 22,575
Homestake Mining Co............... 3,400 20,400
Inco Ltd.......................... 2,200 40,288
International Paper Co............ 4,697 200,797
Louisiana-Pacific Corp............ 1,400 19,425
Mead Corp......................... 1,100 38,431
Millipore Corp.................... 500 28,219
Monsanto Co....................... 7,200 370,800
Newmont Mining Corp............... 1,900 42,631
Nucor Corp........................ 1,000 50,000
Owens-Illinois Inc................ 1,700 28,688(a)
Pall Corp......................... 1,300 29,169
Phelps Dodge Corp................. 900 42,750
Placer Dome Inc................... 3,500 28,438
Potlatch Corp..................... 400 17,200
PPG Industries Inc................ 2,000 104,625
Praxair Inc....................... 1,800 74,925
Reynolds Metals Co................ 700 46,812
Rohm & Haas Co.................... 2,500 111,562
Sealed Air Corp................... 900 48,881(a)
Sherwin-Williams Co............... 1,900 41,681
Sigma-Aldrich Corp................ 1,300 34,938
The B.F. Goodrich Co.............. 1,400 40,163
Union Carbide Corp................ 1,500 87,469
USX-U.S. Steel Group Inc.......... 1,000 25,000
W.R. Grace & Co................... 900 11,419(a)
Westvaco Corp..................... 1,200 40,050
Weyerhaeuser Co................... 2,700 153,900
Willamette Industries Inc......... 1,200 48,150
Worthington Industries Inc........ 1,200 14,850
3,843,406
CAPITAL GOODS -- 7.6%
Allied Waste Industries Inc....... 2,500 16,406(a)
Armstrong World Industries Inc.... 500 8,938
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Boeing Co......................... 9,800 $ 371,787
Briggs & Stratton Corp............ 300 12,338
Caterpillar Inc................... 4,000 157,750
Centex Corp....................... 800 19,050
Cooper Industries Inc............. 1,000 35,000
Corning Inc....................... 3,100 601,400
Crane Co.......................... 900 21,206
Cummins Engine Co. Inc............ 500 18,781
Danaher Corp...................... 1,600 81,600
Deere & Co........................ 2,600 98,800
Dover Corp........................ 2,300 110,112
Eaton Corp........................ 800 62,400
Emerson Electric Co............... 4,900 259,087
Fluor Corp........................ 800 24,800
General Dynamics Corp............. 2,300 114,425
General Electric Co............... 37,300 5,788,494(e)
Grainger (W.W.) Inc............... 1,100 59,675
Honeywell International Inc....... 9,050 476,822
Illinois Tool Works Inc........... 3,400 187,850
Ingersoll-Rand Co................. 1,800 79,650
Johnson Controls Inc.............. 1,000 54,063
Kaufman & Broad Home Corp......... 600 12,863
Lockheed Martin Corp.............. 4,500 91,969
McDermott International Inc....... 800 7,350
Milacron Inc...................... 500 7,219
Minnesota Mining & Manufacturing Co. 4,500 398,531
Molex Inc......................... 2,250 132,187
NACCO Industries Inc. (Class A)... 100 4,794
National Service Industries Inc... 500 10,531
Navistar International Corp. Inc.. 800 32,100(a)
Northrop Grumman Corp............. 800 42,350
Owens Corning..................... 700 13,563
PACCAR Inc........................ 900 45,000
Parker Hannifin Corp.............. 1,200 49,575
Pulte Corp........................ 600 12,525
Raytheon Co. (Class B)............ 3,800 67,450
Rockwell International Corp....... 2,200 91,988
Textron Inc....................... 1,700 103,487
The Timken Co..................... 800 13,000
Thermo Electron Corp.............. 1,800 36,675(a)
Thomas & Betts Corp............... 800 22,600
Tyco International Ltd............ 19,198 957,500
United Technologies Corp.......... 5,400 341,212
Vulcan Materials Co............... 1,200 54,975
Waste Management Inc.............. 6,970 95,402
11,305,280
CONSUMER - CYCLICAL -- 6.2%
American Greetings Corp. (Class A) 800 14,600
Bed Bath & Beyond Inc............. 1,600 63,000(a)
Black & Decker Corp............... 1,100 41,319
Block H & R Inc................... 1,100 49,225
Brunswick Corp.................... 1,200 22,725
Carnival Corp. (Class A).......... 7,000 173,687
CBS Corp.......................... 8,600 486,975(a)
Cendant Corp...................... 8,138 150,553(a)
Clear Channel Communications Inc. 3,900 269,344(a)
Comcast Corp. (Class A)........... 10,500 455,437
Cooper Tire & Rubber Co........... 1,000 12,563
Dana Corp......................... 1,900 53,556
Delphi Automotive Systems Corp.... 6,418 102,688
Deluxe Corp....................... 800 21,200
Donnelley (R.R.) & Sons Co........ 1,600 33,500
Dow Jones & Co. Inc............... 1,000 71,812
-------------
See Notes to Schedule of Investments and Notes to Financial statements.
9
<PAGE>
GE S&P 500 INDEX FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Dun & Bradstreet Corp............. 1,800 $ 51,525
Eastman Kodak Co.................. 3,600 195,525
Ford Motor Co..................... 13,700 629,344
Gannett Co. Inc................... 3,200 225,200
General Motors Corp............... 7,300 604,531
Genuine Parts Co.................. 2,000 47,750
Goodyear Tire & Rubber Co......... 1,800 41,963
Harcourt General Inc.............. 900 33,525
Harley-Davidson Inc............... 1,700 134,937
Harrahs Entertainment Inc......... 1,400 25,988(a)
Hasbro Inc........................ 2,250 37,125
Hilton Hotels Corp................ 4,200 32,550
Interpublic Group Cos. Inc........ 3,200 151,200
ITT Industries Inc................ 1,100 34,169
Jostens Inc....................... 400 9,750
Knight-Ridder Inc................. 1,000 50,938
Leggett & Platt Inc............... 2,300 49,450
Liz Claiborne Inc................. 700 32,069
Longs Drug Stores Corp............ 500 11,375
Marriott International Inc. (Class A) 2,800 88,200
Masco Corp........................ 5,000 102,500
Mattel Inc........................ 4,800 50,100
Maytag Corp....................... 900 29,813
McGraw Hill Cos. Inc.............. 2,200 100,100
MediaOne Group Inc................ 7,000 567,000(a)
Meredith Corp..................... 700 19,381
Mirage Resorts Inc................ 2,200 42,625(a)
New York Times Co. (Class A)...... 1,900 81,581
Nike Inc. (Class B)............... 3,200 126,800
Omnicom Group Inc................. 2,000 186,875
Polaroid Corp..................... 600 14,250
Reebok International Ltd.......... 700 6,475(a)
Russell Corp...................... 400 5,725
Sabre Holdings Corp............... 1,528 56,440
Snap-on Inc....................... 800 20,950
Springs Industries Inc............ 200 7,600
The Great Atlantic &
Pacific Tea Co. Inc. .......... 500 9,750
The Stanley Works................. 1,000 26,375
Time Warner Inc................... 14,600 1,460,000
Times Mirror Co................... 700 65,056
Tribune Co........................ 2,700 98,719
TRW Inc........................... 1,400 81,900
VF Corp........................... 1,500 36,094
Viacom Inc. (Class B)............. 7,900 416,725
Walt Disney Co.................... 23,500 972,312
Whirlpool Corp.................... 800 46,900
Young & Rubicam Inc............... 800 37,600
9,178,944
CONSUMER - STABLE -- 5.9%
Adolph Coors Co. (Class B)........ 500 23,906
Alberto-Culver Co. (Class B)...... 700 16,669
Anheuser Busch Cos. Inc........... 5,300 329,925
Archer-Daniels Midland Co......... 6,858 71,152
Avon Products Inc................. 2,700 78,469
Ball Corp......................... 400 13,825
Bemis Co. Inc..................... 700 25,813
Bestfoods......................... 3,200 149,800
Brown-Forman Corp. (Class B)...... 800 43,550
Campbell Soup Co.................. 4,900 150,675
Clorox Co......................... 2,700 87,750
Coca-Cola Co...................... 28,000 1,314,250(e)
Coca-Cola Enterprises Inc......... 4,800 103,500
Colgate-Palmolive Co.............. 6,600 372,075
Conagra Inc....................... 5,600 101,500
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Darden Restaurants Inc............ 1,700 $ 30,281
Fortune Brands Inc................ 1,900 47,500
General Mills Inc................. 3,400 123,037
Gillette Co....................... 12,300 463,556
Heinz (H.J.) Co................... 4,100 142,987
Hershey Foods Corp................ 1,600 78,000
International Flavours............ 1,200 42,075
Kellogg Co........................ 4,600 117,875
Kimberly Clark Corp............... 6,200 347,200
Manor Care Inc.................... 1,300 17,550(a)
McDonald's Corp................... 15,300 574,706
Nabisco Group Holdings Corp....... 3,700 44,400
Newell Rubbermaid Inc............. 3,215 79,772
Pactiv Corp....................... 2,200 19,250(a)
Pepsico Inc....................... 16,500 570,281
Philip Morris Cos. Inc............ 26,800 566,150(e)
Procter & Gamble Co............... 14,900 838,125
Quaker Oats Co.................... 1,500 90,938
Quintiles Transnational Corp...... 1,500 25,594(a)
Ralston Purina Co................. 3,400 93,075
Safeway Inc....................... 5,800 262,450(a)
Sara Lee Corp..................... 10,400 187,200
Seagram Ltd....................... 4,900 291,550
Supervalu Inc..................... 1,800 34,088
Sysco Corp........................ 3,700 132,044
Temple-Inland Inc................. 700 34,869
Tricon Global Restaurants Inc..... 1,700 52,806(a)
Tupperware Corp................... 800 12,650
Unilever N.V...................... 6,539 314,689
UST Inc........................... 2,000 31,250
Wendy's International Inc......... 1,600 32,300
Wrigley (W.M.) Junior Co.......... 1,300 99,856
8,680,963
ENERGY -- 5.3%
Amerada Hess Corp................. 1,000 64,625
Anadarko Petroleum Corp........... 1,400 54,163
Apache Corp....................... 1,300 64,675
Ashland Oil Inc................... 900 30,094
Atlantic Richfield Co............. 3,700 314,500
Baker Hughes Inc.................. 3,770 114,042
Burlington Resources Inc.......... 2,400 88,800
Chevron Corp...................... 7,500 693,281
Conoco Inc. (Class B)............. 7,142 183,014
Exxon Mobil Corp.................. 39,208 3,050,872(e)
Halliburton Co.................... 5,000 205,000
Kerr-McGee Corp................... 1,100 63,525
Occidental Petroleum Corp......... 4,100 85,075
Phillips Petroleum Co............. 2,900 134,125
Rowan Cos. Inc.................... 1,200 35,325(a)
Royal Dutch Petroleum Co. ADR..... 24,300 1,398,769
Schlumberger Ltd.................. 6,300 481,950
Sunoco Inc........................ 1,000 27,375
Texaco Inc........................ 6,300 337,837
Tosco Corp........................ 1,600 48,700
Transocean Sedco Forex Inc........ 2,351 120,636
Union Pacific Resources Group Inc. 2,900 42,050
Unocal Corp....................... 2,700 80,325
USX-Marathon Group................ 3,500 91,219
7,809,977
FINANCIAL -- 10.1%
American Express Co............... 5,100 759,581
American General Corp............. 2,800 157,150
AmSouth Bancorp................... 4,400 65,725
----------------
See Notes to Schedule of Investments and Notes to Financial statements.
10
<PAGE>
GE S&P 500 INDEX FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Associates First Capital Corp.
(Class A)...................... 8,314 $ 178,231
Bank of America Corp.............. 19,403 1,017,445
Bank of New York Inc.............. 8,400 349,125
Bank One Corp..................... 13,164 452,512
BB&T Corp......................... 3,900 109,444
Bear Stearns Cos. Inc............. 1,320 60,225
Capital One Financial Corp........ 2,200 105,463
Charles Schwab Corp............... 9,300 528,356
Chase Manhattan Corp.............. 9,400 819,562
Citigroup Inc..................... 38,262 2,269,415
Comerica Inc...................... 1,750 73,281
Countrywide Credit Industries..... 1,300 35,425
Federal Home Loan Mortgage Corp.. 7,900 349,081
Federal National Mortgage Assoc... 11,600 654,675
Fifth Third Bancorp............... 3,500 220,500
First Union Corp.................. 11,310 421,298
Firstar Corp...................... 11,245 257,932
FleetBoston Financial Corp........ 10,447 381,316
Franklin Resources Inc............ 2,800 93,625
Golden West Financial Corp........ 1,800 56,138
Household International Inc....... 5,406 201,711
Huntington Bancshares Inc......... 2,526 56,519
KeyCorp........................... 5,000 95,000
Lehman Brothers Holdings Inc...... 1,400 135,800
MBIA Inc.......................... 1,100 57,269
MBNA Corp......................... 9,150 233,325
Mellon Financial Corp............. 5,800 171,100
Merrill Lynch & Co. Inc........... 4,900 514,500
MGIC Investment Corp.............. 1,200 52,350
Morgan (J.P.) & Co. Inc........... 2,000 263,500
Morgan Stanley, Dean Witter & Co. 12,900 1,052,156
National City Corp................ 7,000 144,375
Northern Trust Corp............... 2,500 168,906
Old Kent Financial Corp........... 1,500 48,469
PNC Bank Corp..................... 3,300 148,706
Providian Financial Corp.......... 1,600 138,600
Regions Financial Corp............ 2,500 57,031
SLM Holding Corp.................. 1,800 59,963
SouthTrust Corp................... 1,900 48,331
State Street Corp................. 1,800 174,375(f)
Summit Bancorp.................... 1,900 49,875
Suntrust Banks Inc................ 3,700 213,675
Synovus Financial Corp............ 3,200 60,400
T. Rowe Price Associates Inc...... 1,300 51,350
Union Planters Corp............... 1,600 49,300
United States Bancorp............. 8,300 181,563
Wachovia Corp..................... 2,300 155,394
Washington Mutual Inc............. 6,622 175,483
Wells Fargo & Co.................. 18,700 765,531
14,940,062
HEALTHCARE -- 8.8%
Abbott Laboratories............... 17,400 612,262
Aetna Inc......................... 1,700 94,669
Allergan Inc...................... 1,500 75,000
Alza Corp......................... 1,200 45,075(a)
American Home Products Corp....... 14,800 793,650
Amgen Inc......................... 11,600 711,950(a)
Bard (C.R.) Inc................... 600 23,213
Bausch & Lomb Inc................. 600 31,313
Baxter International Inc.......... 3,300 206,869
Becton Dickinson & Co............. 2,800 73,675
Biogen Inc........................ 1,700 118,787(a)
Biomet Inc........................ 1,300 47,288
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Boston Scientific Corp............ 4,700 $ 100,169(a)
Bristol-Myers Squibb Co........... 22,500 1,299,375
Cardinal Health Inc............... 3,150 144,506
Columbia/HCA Healthcare Corp...... 6,400 162,000
Eli Lilly & Co.................... 12,400 781,200(e)
Guidant Corp...................... 3,500 205,844
Healthsouth Corp.................. 5,000 27,813(a)
Humana Inc........................ 2,200 16,088(a)
Johnson & Johnson................. 15,800 1,106,987(e)
Mallinckrodt Inc.................. 900 25,875
McKesson HBOC Inc................. 3,144 66,024
Medtronic Inc..................... 13,500 694,406
Merck & Co. Inc................... 26,500 1,646,312
Pfizer Inc........................ 43,900 1,605,094
Pharmacia & Upjohn Inc............ 5,900 349,575
Schering Plough Corp.............. 16,700 613,725
St. Jude Medical Inc.............. 1,100 28,394(a)
Tenet Healthcare Corp............. 3,500 80,500
United Healthcare Corp............ 1,900 113,287
Warner-Lambert Co................. 9,700 945,750
Watson Pharmaceuticals Inc........ 1,200 47,625(a)
Wellpoint Health Networks
Inc. (Class A) 700 48,912(a)
12,943,212
INSURANCE -- 2.5%
AFLAC Inc......................... 3,000 136,687
Allstate Corp..................... 9,200 219,075
American International Group Inc. 17,566 1,923,477
Aon Corp.......................... 2,900 93,525
Chubb Corp........................ 2,000 135,125
CIGNA Corp........................ 1,900 143,925
Cincinnati Financial Corp......... 1,900 71,488
Conseco Inc....................... 3,674 42,021
Hartford Financial Services Group Inc. 2,500 131,875
Jefferson-Pilot Corp.............. 1,200 79,875
Lincoln National Corp............. 2,200 73,700
Loews Corp........................ 1,200 60,000
Marsh & McLennan Cos. Inc......... 3,000 330,937
Progressive Corp.................. 800 60,850
Safeco Corp....................... 1,400 37,188
St. Paul Cos. Inc................. 2,500 85,313
Torchmark Corp.................... 1,400 32,375
UNUMProvident Corp................ 2,746 46,682
3,704,118
RETAIL TRADE -- 5.7%
Albertsons Inc.................... 4,841 150,071
Autozone Inc...................... 1,600 44,400(a)
Best Buy Co. Inc.................. 2,300 197,800(a)
Circuit City Stores Inc........... 2,300 140,012
Consolidated Stores Corp.......... 1,400 15,925(a)
Costco Cos. Inc................... 5,100 268,069(a)
CVS Corp.......................... 4,500 169,031
Dillards Inc. (Class A)........... 1,400 23,013
Dollar General Corp............... 2,993 80,437
Federated Department Stores Inc... 2,400 100,200(a)
Gap Inc........................... 9,662 481,288
Home Depot Inc.................... 26,100 1,683,450
J.C. Penney Co. Inc............... 3,000 44,625
K Mart Corp....................... 5,600 54,250(a)
Kohl's Corp....................... 1,800 184,500(a)
Kroger Co......................... 9,500 166,844(a)
------------
See Notes to Schedule of Investments and Notes to Financial statements.
11
<PAGE>
GE S&P 500 INDEX FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Limited Inc....................... 2,458 $ 103,543
Lowes Cos. Inc.................... 4,400 256,850
May Department Stores Co.......... 3,800 108,300
Nordstrom Inc..................... 1,500 44,250
Office Depot Inc.................. 3,800 43,938(a)
Rite Aid Corp..................... 3,400 18,700
Sears Roebuck & Co................ 4,300 132,763
Staples Inc....................... 5,300 106,000(a)
Tandy Corp........................ 2,200 111,650
Target Corp....................... 5,000 373,750
TJX Cos. Inc...................... 3,500 77,656
Toys `R Us Inc.................... 2,800 41,475(a)
Wal-Mart Stores Inc............... 50,600 2,808,300
Walgreen Co....................... 11,500 296,125
Winn Dixie Stores Inc............. 1,900 36,931
8,364,146
TECHNOLOGY - ELECTRONICS & EQUIPMENT -- 22.0%
3Com Corp......................... 3,900 216,938(a)
Adaptec Inc....................... 1,200 46,350(a)
ADC Telecommunications Inc........ 3,400 183,175(a)
Advanced Micro Devices Inc........ 1,600 91,300(a)
Analog Devices Inc................ 4,000 322,250(a)
Andrew Corp....................... 900 20,588(a)
Apple Computer.................... 1,800 244,462(a)
Applied Materials Inc............. 8,700 819,975(a)
Cabletron Systems Inc............. 2,000 58,625(a)
Cisco Systems Inc................. 77,700 6,007,181(a)
Compaq Computer Corp.............. 19,172 510,454
Comverse Technology Inc........... 900 170,100(a)
Conexant Systems Inc.............. 2,400 170,400(a)
Dell Computer Corp................ 29,100 1,569,581(a)
Gateway 2000 Inc.................. 3,600 190,800(a)
Hewlett Packard Co................ 11,400 1,511,212
Ikon Office Solutions Inc......... 1,900 11,756
Intel Corp........................ 37,900 5,000,431(e)
International Business
Machines Corp. ................. 20,500 2,419,000
KLA-Tencor Corp................... 2,000 168,500(a)
Lexmark International
Group Inc. (Class A) ........... 1,400 148,050(a)
LSI Logic Corp.................... 3,400 246,925(a)
Lucent Technologies Inc........... 36,190 2,198,542(e)
Micron Technology Inc............. 3,100 390,600(a)
Motorola Inc...................... 8,087 1,151,387
National Semiconductor Corp....... 2,000 121,250(a)
NCR Corp.......................... 1,100 44,138(a)
Network Appliance Inc............. 3,400 281,350(a)
Nortel Networks Corp.............. 16,440 2,071,440
PerkinElmer Inc................... 600 39,900
Pitney Bowes Inc.................. 3,000 134,063
Qualcomm Inc...................... 8,400 1,254,225(a)
Scientific-Atlanta Inc............ 1,800 114,188
Seagate Technology................ 2,400 144,600(a)
Silicon Graphics Inc.............. 2,400 25,350(a)
Solectron Corp.................... 6,800 272,425(a)
Sun Microsystems Inc.............. 17,900 1,677,286(a)
Tektronix Inc..................... 500 28,000
Tellabs Inc....................... 4,600 289,728(a)
Teradyne Inc...................... 1,900 156,275(a)
Texas Instruments Inc............. 9,200 1,472,000
Xerox Corp........................ 7,600 197,600
Xilinx Inc........................ 3,700 306,406(a)
32,498,806
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
TECHNOLOGY - SOFTWARE & SERVICES -- 11.1%
Adobe Systems Inc................. 1,300 $ 144,706
America Online Inc................ 25,900 1,741,775(a)
Autodesk Inc...................... 700 31,850
Automatic Data Processing Inc..... 7,200 347,400(h)
BMC Software Inc.................. 2,800 138,250(a)
Ceridian Corp..................... 1,600 30,700(a)
Citrix Systems Inc................ 2,000 132,500(a)
Computer Associates
International Inc. ............. 6,150 364,003
Computer Sciences Corp............ 1,900 150,338(a)
Compuware Corp.................... 4,000 84,250(a)
Electronic Data Systems Corp...... 5,400 346,612
EMC Corp.......................... 11,531 1,441,375(a)
Equifax Inc....................... 1,500 37,875
First Data Corp................... 4,800 212,400
IMS Health Inc.................... 3,500 59,281
Microsoft Corp.................... 59,100 6,279,375(a,e)
Novell Inc........................ 3,800 108,775(a)
Oracle Systems Corp............... 32,000 2,498,000(a)
Parametric Technology Corp........ 3,000 63,188(a)
Paychex Inc....................... 2,800 146,650
PE Corp........................... 2,300 221,950
PeopleSoft Inc.................... 3,000 60,000(a)
Shared Medical System Corp........ 300 15,563
Unisys Corp....................... 3,500 89,250(a)
VERITAS Software Corp............. 4,500 589,500(a)
Yahoo! Inc........................ 6,000 1,028,250(a)
16,363,816
TRANSPORTATION -- 0.6%
AMR Corp.......................... 1,700 54,188(a)
Burlington Northern Santa Fe Corp. 5,200 115,050
CSX Corp.......................... 2,500 58,750
Delta Air Lines Inc............... 1,500 79,875
FedEx Corp........................ 3,400 132,600(a)
Kansas City Southern Industries Inc. 1,300 111,719
Norfolk Southern Corp............. 4,200 60,375
Ryder System Inc.................. 800 18,150
Southwest Airlines Co............. 5,700 118,631
U.S. Airways Group Inc............ 900 25,031(a)
Union Pacific Corp. N.V........... 2,800 109,550
883,919
UTILITIES -- 9.7%
AES Corp.......................... 2,400 189,000(a)
Alltel Corp....................... 3,600 227,025
Ameren Corp....................... 1,600 49,500
American Electric Power Inc....... 2,200 65,587
AT&T Corp......................... 36,262 2,039,737
Bell Atlantic Corp................ 17,600 1,075,800
Bellsouth Corp.................... 21,400 1,005,800
Carolina Power & Light Co......... 1,800 58,387
Central & South West Corp......... 2,400 40,950
CenturyTel Inc.................... 1,600 59,400
CINergy Corp...................... 1,800 38,700
CMS Energy Corp................... 1,500 27,188
Coastal Corp...................... 2,400 110,400
Columbia Energy Corp.............. 900 53,325
Consolidated Edison Inc........... 2,500 72,500
Constellation Energy Group........ 1,700 54,188
-----------
See Notes to Schedule of Investments and Notes to Financial statements.
12
<PAGE>
GE S&P 500 INDEX FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Dominion Resources Inc............ 2,783 $ 106,986
DTE Energy Co..................... 1,600 46,400
Duke Energy Corp.................. 4,200 220,500
Eastern Enterprises............... 300 17,963
Edison International.............. 3,900 64,594
El Paso Energy Corp............... 2,600 104,975
Enron Corp........................ 8,100 606,487
Entergy Corp...................... 2,800 56,525
FirstEnergy Corp.................. 2,700 55,688
Florida Progress Corp............. 1,100 50,463
FPL Group Inc..................... 2,000 92,125
Global Crossing Ltd............... 8,925 365,367(a)
GPU Inc........................... 1,400 38,325
GTE Corp.......................... 11,000 781,000
MCI WorldCom Inc.................. 32,221 1,460,014(a)
New Century Energies Inc.......... 1,300 39,081
Nextel Communications Inc. (Class A) 4,100 607,825(a)
Niagara Mohawk Power Corp......... 2,400 32,400(a)
NICOR Inc......................... 600 19,763
Northern States Power Co.......... 1,700 33,788
ONEOK Inc......................... 400 10,000
Peco Energy Co.................... 2,100 77,437
Peoples Energy Corp............... 500 13,719
PG&E Corp......................... 4,300 90,300
Pinnacle West Capital Corp........ 1,100 31,006
PPL Corp.......................... 1,700 35,594
Public Service Enterprise Group... 2,500 74,062
Reliant Energy Inc................ 3,300 77,344
SBC Communications Inc............ 38,753 1,627,626
Sempra Energy..................... 2,350 39,363
Southern Co....................... 7,700 167,475
Sprint Corp....................... 9,900 623,700
Sprint Corp. (PCS Group).......... 9,800 640,062(a)
Texas Utilities Co................ 3,100 92,031
U.S. WEST Inc..................... 5,746 417,303
Unicom Corp....................... 2,500 91,250
Williams Cos. Inc................. 5,000 219,687
14,295,715
TOTAL INVESTMENTS IN SECURITIES
(COST $131,274,885) .................. 144,812,364
SHORT-TERM INVESTMENTS -- 2.2%
GEI Short-Term Investment Fund 446,399 446,399
Money Market Obligations Trust 2,629,463 2,629,463
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------
U.S. GOVERNMENT -- 0.1%
United States Treasury Bill
5.74% 06/15/00 .............. $155,000 153,176
TOTAL SHORT-TERM INVESTMENTS
(COST $3,229,038) ............... 3,229,038
OTHER ASSETS AND LIABILITIES,
NET (0.3)% ..................... (475,490)
------------
NET ASSETS-- 100% ................ $147,565,912
============
--------------------------------------------------------------------------------
OTHER INFORMATION
--------------------------------------------------------------------------------
The S&P 500 Index Fund had the following long Futures Contracts open at March
31, 2000:
NUMBER
EXPIRATION OF UNDERLYING UNREALIZED
DESCRIPTION DATE CONTRACTS FACE VALUE GAIN
--------------------------------------------------------------------------------
S&P 500 June 2000 8 $3,030,600 $261,400
-------------------------
See Notes to Schedule of Investments and Notes to Financial Statements.
13
<PAGE>
PREMIER GROWTH EQUITY FUND
Q&A
DAVID CARLSON MANAGES PENSION AND MUTUAL FUND PORTFOLIOS WITH TOTAL ASSETS OF
APPROXIMATELY $7 BILLION. DAVE JOINED GE IN 1980 WITH THE GE FINANCIAL
MANAGEMENT PROGRAM. IN 1982, HE JOINED GE ASSET MANAGEMENT AS A SECURITY ANALYST
RESPONSIBLE FOR SEVERAL CONSUMER INDUSTRIES. IN 1988, DAVE ASSUMED
RESPONSIBILITY FOR MANAGING ELFUN TRUSTS. HE IS A TRUSTEE FOR THE GE CANADA
PENSION TRUST, A CHARTERED FINANCIAL ANALYST AND A MEMBER OF THE NEW YORK
SOCIETY OF SECURITY ANALYSTS. DAVE IS A GRADUATE OF INDIANA UNIVERSITY WITH A
B.S. IN BUSINESS.
Q. HOW DID THE PREMIER GROWTH EQUITY FUND PERFORM COMPARED TO ITS BENCHMARK FOR
THE PERIOD ENDED MARCH 31, 2000?
A. The Premier Growth Equity Fund posted a return of 21.03% for the period ended
March 31, 2000. The inception date for the Fund was October 31, 1999. The
benchmark for the Fund, the Standard & Poor's 500 Composite Price Index,
returned 10.73% for the same period.
The Fund outperformed the benchmark by more than 10% for this period.
Q. WHY DID THE FUND OUTPERFORM ITS BENCHMARK FOR THE PERIOD ENDED MARCH 31,
2000?
A. In looking at a breakdown of returns for the S&P 500 for the period,
technology was the strongest performing sector. The Fund has approximately the
same weight in technology as the S&P 500, roughly 30%, so it benefited from the
strength in this sector. In addition, very strong stock selection in technology
and other areas such as capital goods, consumer cyclical, and energy contributed
to the outperformance of the Fund versus the S&P 500 Index for the period.
Q DO ANY PARTICULAR STOCKS STAND OUT IN TERMS OF PERFORMANCE FOR THE PERIOD?
A. Among our technology holdings, Applied Materials, EMC, Intel and Cisco were
very strong stocks during this period. Stocks that had strong performance in
other areas such as capital goods, retail trade, and energy included Molex, Home
Depot, and Schlumberger respectively. On the downside, our holdings in the
pharmaceutical industry detracted from performance with Merck, Cardinal Health,
and Johnson & Johnson all posting declines for the period.
Q HOW HAS THE VOLATILITY IN THE MARKET IMPACTED THE FUND?
A. Over the past several months the markets have been particularly volatile and
narrowly focused on technology. The S&P 500 had gains of 15% for the quarter
ended December 31, 1999, following a decline of 6.2% in the quarter ended
September 30, 1999. For the quarter ended March 31, 2000, the S&P 500 gained
2.5%. What is notable is that these market swings have been focused primarily on
the technology sector. Volatility is certainly the theme for the U.S equity
markets in this new millennium. Despite an environment in the U.S. of robust
economic growth, low inflation, solid corporate earnings, modestly higher
interest rates, and declining oil prices, the markets behaved much like a roller
coaster in the quarter ended March 2000. Even after Y2K fears subsided and
despite strong fourth quarter earnings results, the S&P 500 initially declined
by 16% through mid-February as investors remained on the sidelines. As soon as
interest rate worries dissipated in March, the S&P 500 rebounded off its lows to
end the quarter up 2.5%. Similarly, the NASDAQ slumped in the early part of the
quarter and then progressively rallied through the first part of March, when it
gained as much as 26%. Profit-taking in the technology sector halved NASDAQ's
gains to end the quarter up 12.4%. Official results for the first quarter had
the Dow Jones Industrial Average down 4.8%, the S&P 500 posting a gain of 2.5%,
the Russell 2000 finishing up 6.8%, and the NASDAQ concluding the quarter up
12.4%.
In terms of the Fund, we continue to own those companies that have solid
earnings growth. While these swings do make us reflective of the fundamentals of
the market, we do not try to time the market and invest in those companies with
solid fundamentals.
Q WHAT IS YOUR OUTLOOK FOR THE FUND?
A. The Fund remains concentrated in 34 holdings. We have reduced the
overweighting in technology stocks to match the level of the S&P 500. The
rationale was based on valuations. The fundamentals of the technology sector
remain excellent, but the valuation levels are extremely stretched in our
opinion. We are finding more compelling investment opportunities in other
sectors where growth rates are high and valuation levels more reasonable. We
continue to focus on industry leaders with strong fundamentals. We estimate the
earnings growth of our holdings to be in the 15-20% range, and we expect that
the above-average growth will drive above average stock price performance over
the long term.
14
<PAGE>
PREMIER GROWTH EQUITY FUND
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
--------------------------------------------------------------------------------
[LINE GRAPH OMITTED]
PREMIER GROWTH EQUITY FUND S&P 500
10/31/99 10000.00 10000.00
11/99 10470.00 10203.00
12/99 11672.59 10803.96
1/00 11202.08 10259.55
2/00 11031.90 10073.85
3/00 12103.05 11073.48
--------------------------------------------------------------------------------
AVERAGE TOTAL RETURN FOR THE PERIOD ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
SINCE
INCEPTION COMMENCEMENT
--------------------------------------------------------------------------------
Premier Growth Equity Fund 21.03% 10/31/99
--------------------------------------------------------------------------------
S&P 500 10.73%
--------------------------------------------------------------------------------
INVESTMENT PROFILE
A mutual fund designed for
investors who seek long-term
growth of capital and future
income by investing primarily
in growth-oriented equity
securities.
--------------------------------------------------------------------------------
SECTOR ALLOCATION
AS OF MARCH 31, 2000
--------------------------------------------------------------------------------
[PIE CHART OMITTED]
TECHNOLOGY 31.2%
CONSUMER 20.0%
HEALTHCARE 15.0%
CAPITAL GOODS 8.3%
RETAIL TRADE 5.9%
UTILITIES 5.3%
FINANCIAL SERVICES 4.9%
CASH & OTHER 4.8%*
ENERGY 4.6%
*INCLUDES CASH EQUALIZED BY FUTURES OF 1.7%.
--------------------------------------------------------------------------------
TOP TEN LARGEST HOLDINGS AT MARCH 31, 2000
--------------------------------------------------------------------------------
Cisco Systems Inc. 4.88%
--------------------------------------------------------------------------------
Molex Inc. (Class A) 4.70%
--------------------------------------------------------------------------------
AT&T Corp. - Liberty Media Group (Class A) 4.55%
--------------------------------------------------------------------------------
Intel Corp. 4.42%
--------------------------------------------------------------------------------
Applied Materials Inc. 4.24%
--------------------------------------------------------------------------------
EMC Corp. 4.19%
--------------------------------------------------------------------------------
Home Depot Inc. 3.81%
--------------------------------------------------------------------------------
Sybron International Corp. 3.72%
--------------------------------------------------------------------------------
NTL Inc. 3.66%
--------------------------------------------------------------------------------
First Data Corp. 3.58%
--------------------------------------------------------------------------------
SEE NOTES TO PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
15
<PAGE>
GE PREMIER GROWTH EQUITY FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- 95.2%
CAPITAL GOODS -- 8.3%
Dover Corp........................ 13,412 $ 642,099
Molex Inc. (Class A).............. 23,254 1,031,896
Waste Management Inc.............. 11,681 159,884
1,833,879
CONSUMER - CYCLICAL -- 19.1%
AT&T Corp. - Liberty Media
Group (Class A) 16,873 999,725(a)
Carnival Corp. (Class A).......... 13,844 343,504
Catalina Marketing Corp........... 7,138 722,723(a)
Comcast Corp. (Class A)........... 14,277 619,265
Interpublic Group Cos. Inc........ 14,709 695,000
NTL Inc........................... 8,653 803,107(a)
4,183,324
CONSUMER - STABLE -- 0.9%
Gillette Co....................... 5,192 195,673
ENERGY -- 4.6%
Baker Hughes Inc.................. 17,738 536,574
Schlumberger Ltd.................. 6,057 463,361
999,935
FINANCIAL -- 3.5%
Citigroup Inc..................... 12,979 769,817
HEALTHCARE -- 15.0%
Cardinal Health Inc............... 14,277 654,957(e)
Dentsply International Inc........ 6,490 184,154
Henry Schein Inc.................. 8,653 140,070(a)
Johnson & Johnson................. 5,408 378,898
Lincare Holdings Inc.............. 21,631 613,780(a)
Merck & Co. Inc................... 8,220 510,668
Sybron International Corp......... 28,121 815,509(a)
3,298,036
INSURANCE -- 1.4%
AFLAC Inc......................... 6,923 315,429
RETAIL TRADE -- 5.9%
CVS Corp.......................... 12,114 455,032
Home Depot Inc.................... 12,979 837,146
1,292,178
TECHNOLOGY - ELECTRONICS & EQUIPMENT -- 15.2%
Applied Materials Inc............. 9,864 929,682(a)
Cisco Systems Inc................. 13,844 1,070,314(a)
Dell Computer Corp................ 6,922 373,356(a)
Intel Corp........................ 7,354 970,268
3,343,620
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
TECHNOLOGY - SOFTWARE & SERVICES -- 16.0%
Automatic Data Processing Inc..... 11,681 $ 563,608
EMC Corp.......................... 7,355 919,375(a)
Equifax Inc....................... 18,170 458,793
First Data Corp................... 17,738 784,906
Microsoft Corp.................... 7,355 781,469(a)
3,508,151
UTILITIES -- 5.3%
MCI WorldCom Inc.................. 11,681 529,295(a)
Vodafone AirTouch PLC ADR......... 11,357 631,024
1,160,319
TOTAL INVESTMENTS IN SECURITIES
(COST $18,300,058) ............. 20,900,361
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 4.8%
--------------------------------------------------------------------------------
INVESTMENTS -- 4.8%
GEI Short-Term Investment Fund
(COST $1,048,124) ............. 1,048,124 1,048,124
OTHER ASSETS AND LIABILITIES,
NET 0.0% ...................... 959
-----------
NET ASSETS-- 100% ................ $21,949,444
===========
--------------------------------------------------------------------------------
OTHER INFORMATION
--------------------------------------------------------------------------------
The Premier Growth Equity Fund had the following long Futures Contracts open at
March 31, 2000:
NUMBER
EXPIRATION OF UNDERLYING UNREALIZED
DESCRIPTION DATE CONTRACTS FACE VALUE GAIN
--------------------------------------------------------------------------------
S&P 500 June 2000 1 $378,825 $7,700
----------------------------------
See Notes to Schedule of Investments and Notes to Financial Statements.
16
<PAGE>
VALUE EQUITY FUND
--------------------------------------------------------------------------------
Q&A
PETER J. HATHAWAY IS THE PORTFOLIO MANAGER FOR THE VALUE EQUITY FUND. HE IS
CURRENTLY A SENIOR VICE PRESIDENT OF GE ASSET MANAGEMENT AND MANAGES EQUITY
ASSETS OF APPROXIMATELY $9 BILLION. PETE HAS MORE THAN 36 YEARS OF INVESTMENT
EXPERIENCE AND HAS HELD POSITIONS WITH GE ASSET MANAGEMENT SINCE 1985. PETE WAS
SENIOR VICE PRESIDENT AND PORTFOLIO MANAGER AT AMERITRUST FROM 1975 TO 1985, AND
PREVIOUSLY HELD INVESTMENT POSITIONS AT MERRILL LYNCH, EQUITABLE LIFE AND US
TRUST. HE HOLDS AN M.B.A. FROM THE WHARTON SCHOOL AT THE UNIVERSITY OF
PENNSYLVANIA AND A BS IN FINANCE FROM ARIZONA STATE UNIVERSITY.
Q. HOW DID THE VALUE EQUITY FUND PERFORM COMPARED TO ITS BENCHMARK FOR THE
PERIOD ENDED MARCH 31, 2000?
A. The Value Equity Fund posted a return of 5.50% for the period ended March 31,
2000 while the Standard & Poor's 500/BARRA Value Composite Price Index returned
3.53% for the same period. The Fund's inception date was February 2, 2000. The
Fund outperformed its benchmark by 1.97% for the period.
Q. WHY DID THE FUND OUTPERFORM ITS BENCHMARK FOR THE PERIOD ENDED MARCH 31,
2000?
A. The stock market remained narrow by historical standards with technology
garnering most of the focus. Our positive performance was broadly based with
most sectors contributing positively to performance. Sectors that specifically
helped performance over this period included capital goods, consumer cyclical,
energy, technology, and financials. Areas such as transportation and consumer
staples did not perform well over this time period, however, our stock selection
was positive for these areas and mitigated much of the declines in these areas.
Q. WHICH STOCKS HAVE PERFORMED WELL? WHICH HAVE NOT PERFORMED WELL?
A. We did well in the capital goods sector because of our holdings in Dover,
United Technologies, and Molex, and because our valuation discipline kept us out
of Illinois Toolworks, 3M, and Caterpillar. We had solid performance in the
retail trade area due to stocks such as Lowe's and Target. Technology holdings
such as Analog Devices and Applied Materials continued to do well during this
period. In the financial area, Citigroup and Bank of America were the standouts
as the capital markets helped drive positive performance for these stocks.
Areas that detracted from performance included the consumer stable sector
where concerns over spending caused the area to pullback after strong
performance through the December time period. Health care companies such as
Merck and Johnson & Johnson continued to pullback along with consumer packaging
companies such as Procter & Gamble.
Q. HOW HAS THE VOLATILITY IN THE MARKET IMPACTED THE FUND?
A. Over the past several months the markets have been particularly volatile and
narrowly focused on technology. The overall S&P 500 Index had gains of 15% for
the quarter ended December 31, 1999, following a decline of 6.2% in the quarter
ended September 30, 1999. For the quarter ended March 31, 2000, the S&P 500
gained 2.5%. What is notable is that these market swings have been focused
primarily on the technology sector. Despite an environment in the U.S. of robust
economic growth, low inflation, solid corporate earnings, modestly higher
interest rates, and declining oil prices, the markets behaved much like a roller
coaster in the quarter ended March 31, 2000. This is evident in the disparate
returns of the major averages for the quarter as the DJIA was down 4.8%, the S&P
500 up 2.5%, and the NASDAQ up 12.4%.
In terms of the Fund, we continue to own those companies that have solid
earnings growth. We look at the swings in the market as opportunities to buy or
sell those stocks that become respectively undervalued or overvalued relative to
the market and to their peers.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. The U.S. economy's strong underpinnings are encouraging for the long term.
Despite the Federal Reserve's commitment to containing any inflationary
pressures through rate increases, we believe companies should produce good
earnings over the next few quarters. The market will continue to be volatile
although this should be beneficial as the speculative excesses are worked out of
the system. We also believe that the performance and valuation discrepancy
between technology and almost everything else cannot continue. Thus we will
maintain our focus on fundamental research and stock selection and plan to
maintain the valuation discipline that has rewarded us over the years. We
believe the portfolio is broadly diversified in high-quality stocks and
therefore the portfolio is well positioned for good relative performance in this
environment.
17
<PAGE>
VALUE EQUITY FUND
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
--------------------------------------------------------------------------------
[LINE GRAPH OMITTED]
VALUE EQUITY FUND S&P 500/BARRA VALUE
1/31/2000 10000.00 10000.00
2/00 9570.00 9375.00
3/00 10550.00 10352.75
--------------------------------------------------------------------------------
AVERAGE TOTAL RETURN FOR THE PERIOD ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
SINCE
INCEPTION COMMENCEMENT
--------------------------------------------------------------------------------
Value Equity Fund 5.50% 2/2/00
--------------------------------------------------------------------------------
S&P 500/BARRA Value 3.53%
--------------------------------------------------------------------------------
INVESTMENT PROFILE
Amutual fund designed for investors who seek long-term growth of capital
and future income by investing primarily in equity securities of large
U.S. companies that the portfolio manager believes are undervalued by the
market but have solid growth prospects.
--------------------------------------------------------------------------------
SECTOR ALLOCATION AS OF MARCH 31, 2000
--------------------------------------------------------------------------------
[PIE CHART OMITTED]
TECHNOLOGY 26.5%
FINANCIAL SERVICES 16.5%
CONSUMER 10.2%
UTILITIES 9.1%
HEALTHCARE 8.1%
CAPITAL GOODS 7.9%
ENERGY 6.8%
RETAIL TRADE 5.8%
CASH & OTHER 4.0%*
BASIC MATERIALS 2.9%
TRANSPORTATION 2.2%
*INCLUDES CASH EQUALIZED BY FUTURES OF 3.5%.
--------------------------------------------------------------------------------
TOP TEN LARGEST HOLDINGS AT MARCH 31, 2000
--------------------------------------------------------------------------------
Intel Corp. 3.77%
--------------------------------------------------------------------------------
Cisco Systems Inc. 3.57%
--------------------------------------------------------------------------------
Citigroup Inc. 2.73%
--------------------------------------------------------------------------------
Exxon Mobil Corp. 2.48%
--------------------------------------------------------------------------------
Microsoft Corp. 2.37%
--------------------------------------------------------------------------------
Morgan Stanley, Dean Witter & Co. 2.15%
--------------------------------------------------------------------------------
Merck & Co. Inc. 1.93%
--------------------------------------------------------------------------------
Target Corp. 1.87%
--------------------------------------------------------------------------------
Applied Materials Inc. 1.78%
--------------------------------------------------------------------------------
Wal-Mart Stores Inc. 1.59%
--------------------------------------------------------------------------------
SEE NOTES TO PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
18
<PAGE>
GE VALUE EQUITY FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- 96.0%
--------------------------------------------------------------------------------
BASIC MATERIALS -- 2.9%
Avery Dennison Corp............... 706 $ 43,110
Barrick Gold Corp................. 7,060 110,754
Champion International Corp....... 2,683 142,870
Du Pont de Nemours (E.I.) & Co.... 1,553 82,115
Freeport McMoran Copper
& Gold Inc. (Class B) .......... 1,059 12,774
Mead Corp......................... 1,977 69,071
Newmont Mining Corp............... 7,060 158,409
PPG Industries Inc................ 1,765 92,331
Rayonier Inc...................... 2,365 115,294
Westvaco Corp..................... 706 23,563
Weyerhaeuser Co................... 1,483 84,531
934,822
CAPITAL GOODS -- 7.9%
Boeing Co......................... 1,553 58,917
Cooper Industries Inc............. 847 29,645
Deere & Co........................ 1,694 64,372
Dover Corp........................ 5,527 264,605
Eaton Corp........................ 1,200 93,600
Emerson Electric Co............... 5,450 288,169
General Dynamics Corp............. 2,330 115,917
Honeywell International Inc....... 6,154 324,239
Hubbell Inc. (Class B)............ 3,531 96,661
Ingersoll-Rand Co................. 1,271 56,242
Martin Marietta Materials Inc..... 4,024 191,140
Masco Corp........................ 3,248 66,584
Molex Inc. (Class A).............. 2,206 97,891
Parker Hannifin Corp.............. 2,048 84,608
Sherwin-Williams Co............... 1,271 27,883
Textron Inc....................... 5,044 307,053
Timken Co......................... 706 11,472
United Technologies Corp.......... 5,487 346,710
Waste Management Inc.............. 942 12,894
2,538,602
CONSUMER - CYCLICAL -- 5.4%
AT&T Corp. - Liberty Media
Group (Class A) ............... 1,059 62,746(a,e)
Carnival Corp. (Class A).......... 565 14,019
Catalina Marketing Corp........... 353 35,741(a)
CBS Corp.......................... 706 39,977(a)
Comcast Corp. (Class A)........... 3,954 171,505
Delphi Automotive Systems Corp.... 2,330 37,280
Eastman Kodak Co.................. 424 23,028
Ford Motor Co..................... 2,824 129,727
Gannett Co. Inc................... 3,389 238,501
General Motors Corp............... 353 29,233
Interpublic Group Cos. Inc........ 4,271 201,805
Knight-Ridder Inc................. 3,106 158,212
McDonald's Corp................... 7,766 291,710
McGraw Hill Cos. Inc.............. 706 32,123
Sabre Holdings Corp............... 343 12,670
The Walt Disney Co................ 6,261 259,049
1,737,326
CONSUMER - STABLE -- 4.8%
Anheuser Busch Cos. Inc........... 2,118 131,845
Archer-Daniels Midland Co......... 3,883 40,286
Avon Products Inc................. 1,130 32,841
Bestfoods......................... 1,906 89,225
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Colgate-Palmolive Co.............. 988 $ 55,699
General Mills Inc................. 3,248 117,537
Gillette Co....................... 1,130 42,587
Heinz (H.J.) Co................... 2,118 73,865
Kimberly Clark Corp............... 706 39,536
Pepsico Inc....................... 7,837 270,866
Procter & Gamble Co............... 2,612 146,925
Quaker Oats Co.................... 706 42,801
Ralston Purina Co................. 10,237 280,238
Sara Lee Corp..................... 6,707 120,726
Sysco Corp........................ 1,971 70,340
1,555,317
ENERGY -- 6.8%
BP Amoco PLC ADR.................. 1,553 82,406
Burlington Resources Inc.......... 2,471 91,427
Chevron Corp...................... 1,624 150,118
Conoco Inc. (Class B)............. 5,648 144,730
Exxon Mobil Corp.................. 10,237 796,567
Halliburton Co.................... 4,236 173,676
Nabors Industries Inc............. 706 27,402(a)
Royal Dutch Petroleum Co. ADR..... 3,530 203,196
Schlumberger Ltd.................. 1,836 140,454
Texaco Inc........................ 1,271 68,157
Tosco Corp........................ 1,130 34,394
Transocean Sedco Forex Inc........ 615 31,557
Unocal Corp....................... 5,507 163,833
USX-Marathon Group................ 3,177 82,801
2,190,718
FINANCIAL -- 13.0%
American Express Co............... 1,906 283,875
Associates First Capital
Corp. (Class A) ............... 6,707 143,781
AXA Financial Inc................. 670 24,036
Bank of America Corp.............. 6,707 351,698(e)
Bank of New York Inc.............. 1,412 58,686
BlackRock Inc..................... 3,177 64,334(a)
Chase Manhattan Corp.............. 2,824 246,218
Citigroup Inc..................... 14,783 876,817(e)
Comerica Inc...................... 989 41,414
Edwards A.G. Inc.................. 1,271 50,840
Federal National Mortgage Assoc... 5,539 312,607
Fidelity National Financial Inc... 2,887 39,881
FleetBoston Financial Corp........ 5,295 193,268
Franklin Resources Inc............ 1,553 51,928
Goldman Sachs Group Inc........... 1,412 148,437
Lehman Brothers Holdings Inc...... 1,600 155,200
Morgan Stanley, Dean Witter & Co. 8,472 690,997
PNC Bank Corp..................... 3,883 174,978
United States Bancorp............. 4,236 92,663
Wachovia Corp..................... 706 47,699
Waddell & Reed Financial
Inc. (Class A) ................ 1,553 65,711
Wells Fargo & Co.................. 1,271 52,032
4,167,100
HEALTHCARE -- 8.1%
Abbott Laboratories............... 2,824 99,370
Allergan Inc...................... 565 28,250
Amgen Inc......................... 2,839 174,244(a)
Baxter International Inc.......... 706 44,257
Bristol-Myers Squibb Co........... 7,484 432,201
Cardinal Health Inc............... 5,648 259,102(e)
Eli Lilly & Co.................... 2,683 169,029
-----------------
See Notes to Schedule of Investments and Notes to Financial Statements.
19
<PAGE>
GE VALUE EQUITY FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Johnson & Johnson................. 3,318 $ 232,467
Merck & Co. Inc................... 9,955 618,454
Pharmacia & Upjohn Inc............ 1,977 117,137
Schering Plough Corp.............. 5,295 194,591
Warner-Lambert Co................. 1,624 158,340
Watson Pharmaceuticals Inc........ 1,553 61,635(a)
2,589,077
INSURANCE -- 3.5%
AFLAC Inc......................... 635 28,932
Allstate Corp..................... 988 23,527
American International Group Inc. 2,177 238,381
AXA-UAP........................... 349 49,493
Chubb Corp........................ 2,330 157,421
Hartford Financial Services
Group Inc. ..................... 5,083 268,128
Jefferson-Pilot Corp.............. 212 14,111
Lincoln National Corp............. 1,906 63,851
Progressive Corp.................. 988 75,150
Reliastar Financial Corp.......... 2,471 83,705
St. Paul Cos. Inc................. 3,106 105,992
Travelers Property Casualty Corp.. 36 1,485
1,110,176
RETAIL TRADE -- 5.8%
Costco Wholesale Corp............. 1,624 85,362(a)
CVS Corp.......................... 2,401 90,188
Federated Department Stores Inc... 3,530 147,377(a)
Home Depot Inc.................... 3,248 209,496
Lowe's Cos. Inc................... 4,024 234,901
Target Corp....................... 8,048 601,588
Wal-Mart Stores Inc............... 9,178 509,379(e)
1,878,291
TECHNOLOGY - ELECTRONICS & EQUIPMENT -- 19.8%
Analog Devices Inc................ 5,295 426,578(a)
Applied Materials Inc............. 6,072 572,286(a)
Cisco Systems Inc................. 14,826 1,146,235(a,e)
Dell Computer Corp................ 8,190 441,748(a)
Hewlett Packard Co................ 1,130 149,796
Intel Corp........................ 9,178 1,210,922
International Business Machines Corp. 3,177 374,886
Lucent Technologies Inc........... 4,942 300,227
Motorola Inc...................... 2,189 311,659
Nortel Networks Corp.............. 3,883 489,258
PerkinElmer Inc................... 1,200 79,800
Pitney Bowes Inc.................. 5,436 242,921
Sun Microsystems Inc.............. 3,106 291,042(a)
Synopsys Inc...................... 635 30,956(a)
Tellabs Inc....................... 1,059 66,701(a)
Texas Instruments Inc............. 1,412 225,920
6,360,935
TECHNOLOGY - SOFTWARE & SERVICES -- 6.7%
Automatic Data Processing Inc..... 3,399 164,002
Computer Associates
International Inc. ............ 848 50,191
Computer Sciences Corp............ 66 5,222(a)
EMC Corp.......................... 2,753 344,125(a)
Equifax Inc....................... 7,060 178,265
First Data Corp................... 9,319 412,366(e)
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Microsoft Corp.................... 7,166 $ 761,387(a)
PE Corp. - PE Biosystems Group.... 177 17,081
Unisys Corp....................... 9,178 234,039(a)
2,166,678
TRANSPORTATION -- 2.2%
Burlington Northern Santa Fe Corp. 7,413 164,012
Canadian Pacific Ltd.............. 6,354 142,171
Continental Airlines Inc. (Class B) 3,106 126,958(a)
Delta Air Lines Inc............... 3,107 165,448
Southwest Airlines Co............. 988 20,563
United Parcel Service Inc. (Class B) 1,271 80,073
699,225
UTILITIES -- 9.1%
Alltel Corp....................... 2,118 133,566
AT&T Corp......................... 5,154 289,912
Bell Atlantic Corp................ 3,389 207,153
Constellation Energy Group........ 1,412 45,008
Dominion Resources Inc............ 847 32,557
Duke Energy Corp.................. 3,707 194,617
Edison International.............. 5,648 93,545
El Paso Energy Corp............... 4,307 173,895
FPL Group Inc..................... 1,553 71,535
Global Crossing Ltd............... 3,883 158,960(a)
GTE Corp.......................... 4,660 330,860
New Century Energies Inc.......... 5,789 174,032
SBC Communications Inc............ 12,002 504,084
Sprint Corp....................... 3,283 206,829
U.S. WEST Inc..................... 3,742 271,763
Williams Cos. Inc................. 565 24,825
2,913,141
TOTAL INVESTMENTS IN SECURITIES
(COST $28,950,459) ............ 30,841,408
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 3.8%
--------------------------------------------------------------------------------
GEI Short-Term Investment Fund
(COST $1,211,145) .............. 1,211,145 1,211,145
OTHER ASSETS AND LIABILITIES,
NET 0.2% ...................... 71,265
-----------
NET ASSETS-- 100% ................ $32,123,818
===========
--------------------------------------------------------------------------------
OTHER INFORMATION
--------------------------------------------------------------------------------
The Value Equity Fund had the following long Futures Contracts open at March 31,
2000:
NUMBER
EXPIRATION OF UNDERLYING UNREALIZED
DESCRIPTION DATE CONTRACTS FACE VALUE GAIN
--------------------------------------------------------------------------------
S&P 500 June 2000 3 $1,136,475 $10,725
------------------------------------
See Notes to Schedule of Investments and Notes to Financial Statements.
20
<PAGE>
MID-CAP GROWTH FUND
--------------------------------------------------------------------------------
Q&A
RALPH (CHIP) E. WHITMAN HAS BEEN THE PORTFOLIO MANAGER OF THE MID-CAP GROWTH
FUND SINCE DECEMBER 1998. HE IS CURRENTLY A SENIOR VICE PRESIDENT OF GE ASSET
MANAGEMENT. CHIP HAS MORE THAN 11 YEARS OF INVESTMENT EXPERIENCE AND HAS HELD
POSITIONS WITH GE ASSET MANAGEMENT SINCE 1987. CHIP IS A CHARTERED FINANCIAL
ANALYST. HE HOLDS A B.A. IN MATHEMATICS FROM HAMILTON COLLEGE AND A M.S. IN
MANAGEMENT FROM THE SLOAN SCHOOL AT MIT.
BETWEEN NOVEMBER 1997 AND NOVEMBER 1998, ELAINE G. HARRIS WAS THE PORTFOLIO
MANAGER OF THE FUND.
Q. HOW DID THE MID-CAP GROWTH FUND PERFORM COMPARED TO ITS BENCHMARK FOR THE SIX
MONTHS ENDED MARCH 31, 2000?
A. The Fund returned 33.87% for the six-month period ended March 31, 2000 while
the Standard & Poor's MidCap 400 Index returned 32.08% for the same period.
Q. WHY DID THE FUND OUTPERFORM ITS BENCHMARK FOR THE SIX MONTHS ENDED MARCH 31,
2000?
A. The Fund outperformed its benchmark due to solid stock selection in the
technology, financial, and utilities sectors, despite an underweighting in both
technology and utilities. The market remained very narrow over this time period
as investors put most of their funds to work in the technology sector. The Fund
remained underweight in the technology sector due to valuation concerns;
however, the Fund was able to invest in solid companies that did quite well over
this period. Holdings such as Finisar, Agilent, and Analog Devices performed
very well for the Fund. The financial sector provided the portfolio with
positive performance due to an overweight of the sector and due to strong
performance from holdings such as Waddell & Reed, Hartford Financial Services,
and AXA Financial to name a few. The capital goods, consumer cyclical, and
consumer stable sectors as well as an underweight in energy all detracted from
the Fund's performance. The portfolio manager continues to seek out those
companies with above average growth and reasonable valuations.
Q. WHAT HAS YOUR INVESTMENT STRATEGY BEEN FOR THE FUND?
A. The focus of the Fund continues to be on investing in companies with solid
earnings growth prospects, strong visibility, and superior fundamentals for the
long term. New companies being invested in by the Fund must be priced reasonably
based on earnings growth in comparison to the market as well as in comparison to
its respective peer group. We believe companies with high quality management
teams and a focus on shareholder value will produce sustainable gains over the
long term. We do not invest in companies with operating losses and no material
track record in managing their business.
Q. WHICH INVESTMENTS STAND OUT?
A. High-flying technology stocks were no doubt the main focus with investors
over the past six months. The Fund's performance certainly benefited from this
trend. Holdings such as Finisar (communications equipment), up 688%, Agilent
Technologies (test & measurement devices and instruments), up 244%, and Analog
Devices (semiconductors), up 214% certainly stand out. Other technology issues
in the Fund such as ADC Telecommunications, Nokia and Nortel Networks were up
157%, 142%, and 147% respectively, as strength in the telecommunications
equipment sector continues to accelerate. Comdisco was up 129% due to potential
spin-offs of its DSL business (Prism Communications) and venture capital
investments in 2000. The Fund continues to embrace the information revolution,
however we are focused on business models with sustainable advantages and remain
disciplined about valuation levels.
Q WHAT CHANGES HAVE YOU MADE IN THE FUND?
A. Over the course of the past six months, we have rebalanced the Fund in
several areas including the technology, financial, capital goods, consumer
cyclical, and consumer stable sectors. Technology has been an underweighted
sector in the Fund and this is an area where we continue to add stocks with
strong long term fundamentals. The financial, capital goods, and consumer
cyclical sectors are overweighted and we have been taking profits where
appropriate. The consumer stable sector has been underweighted and the Fund has
been adding stocks in this area. These shifts have benefited the portfolio over
the past six months. The cash position is higher than our historical average and
we are looking to deploy this cash as good opportunities materialize. We
continue to emphasize those companies with higher than average earnings growth
rates and reasonable valuations.
Q WHAT IS YOUR OUTLOOK FOR THE FUND?
A. We believe the Fund is well positioned to take advantage of an anticipated
rotation into stocks other than technology, telecommunications, and the
internet. Stocks in these areas have produced mind-boggling returns over the
past few years and are now trading at stretched valuation levels given
historical patterns. However, we must emphasize that the Fund is well positioned
for intermittent technology rallies which has been the norm over the past couple
of years. As we stay focused on quality companies, we believe the Fund can
generate solid results.
21
<PAGE>
MID-CAP GROWTH FUND
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
--------------------------------------------------------------------------------
[LINE GRAPH OMITTED]
MID-CAP GROWTH FUND S&P MIDCAP 400
11/25/97 10000.00 10000.00
12/97 10136.02 10389.50
3/98 11276.71 11536.79
6/98 10856.45 11289.11
9/98 8875.28 9662.50
12/98 10605.93 12349.35
3/99 10595.87 11567.04
6/99 11531.69 13201.97
9/99 10223.56 12093.80
12/99 12553.42 14173.20
3/00 13686.36 15973.13
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
SIX ONE SINCE
MONTHS YEAR INCEPTION COMMENCEMENT
--------------------------------------------------------------------------------
Mid-Cap Growth Fund 33.87% 29.17% 14.29% 11/25/97
--------------------------------------------------------------------------------
S&P MidCap 400 32.08% 38.09% 22.07%
--------------------------------------------------------------------------------
INVESTMENT PROFILE
A mutual fund designed for investors who seek long-term growth of
capital by investing primarily in equity securities of companies with
medium-sized market capitalization that the portfolio manager
believes have above-average growth potential.
--------------------------------------------------------------------------------
SECTOR ALLOCATION AS OF MARCH 31, 2000
--------------------------------------------------------------------------------
[PIE CHART OMITTED]
TECHNOLOGY 31.3%
FINANCIAL SERVICES 15.1%
CAPITAL GOODS 12.0%
CASH & OTHER 10.1%*
CONSUMER 9.8%
HEALTHCARE 6.6%
RETAIL TRADE 6.6%
ENERGY 3.4%
UTILITIES 3.4%
BASIC MATERIALS 1.7%
--------------------------------------------------------------------------------
TOP TEN LARGEST HOLDINGS AT MARCH 31, 2000
--------------------------------------------------------------------------------
Analog Devices Inc. 8.87%
--------------------------------------------------------------------------------
Nokia Corp. ADR 5.72%
--------------------------------------------------------------------------------
Nortel Networks Corp. 3.93%
--------------------------------------------------------------------------------
Comdisco Inc. 3.31%
--------------------------------------------------------------------------------
Agilent Technologies Inc. 3.12%
--------------------------------------------------------------------------------
ADC Telecommunications Inc. 2.78%
--------------------------------------------------------------------------------
Viad Corp. 2.06%
--------------------------------------------------------------------------------
Waddell & Reed Financial Inc. (Class A) 2.04%
--------------------------------------------------------------------------------
Bank of New York Inc. 2.01%
--------------------------------------------------------------------------------
Tyco International Ltd. 2.00%
--------------------------------------------------------------------------------
SEE NOTES TO PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
22
<PAGE>
GE MID-CAP GROWTH FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
MID-CAP GROWTH FUND
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- 89.9%
BASIC MATERIALS -- 1.7%
CK Witco Corp..................... 6,415 $ 65,353
Rohm & Hass Co.................... 1,821 81,262
Sealed Air Corp................... 3,849 209,049(a)
355,664
CAPITAL GOODS -- 12.0%
Dover Corp........................ 5,260 251,822
Honeywell International Inc....... 4,170 219,707
Hubbell Inc. (Class B)............ 3,656 100,083
Martin Marietta Materials Inc..... 6,928 329,080
Masco Corp........................ 12,060 247,230
Mettler-Toledo International Inc.. 8,596 351,899(a)
Molex Inc. (Class A).............. 6,816 302,460
Textron Inc....................... 3,464 210,871
Thermo Electron Corp.............. 6,415 130,706(a)
Tyco International Ltd............ 8,596 428,725
2,572,583
CONSUMER - CYCLICAL -- 9.1%
Clear Channel Communications Inc. 4,157 287,093(a)
Dial Corp......................... 16,037 220,509
Interpublic Group Cos. Inc........ 7,056 333,396
ITT Industries Inc................ 9,622 298,883
Jones Apparel Group Inc........... 6,607 210,598(a)
U.S. Industries Inc............... 13,792 152,574
Viad Corp......................... 19,245 440,229
1,943,282
CONSUMER - STABLE -- 0.7%
Manor Care Inc.................... 11,226 151,551(a)
ENERGY -- 3.4%
Nabors Industries Inc............. 4,426 171,784(a)
Schlumberger Ltd.................. 2,117 161,950
Tosco Corp........................ 6,928 210,871
Transocean Sedco Forex Inc........ 409 20,987
USX-Marathon Group................ 6,543 170,527
736,119
FINANCIAL -- 12.1%
AXA Financial Inc................. 8,339 299,162
Bank of New York Inc.............. 10,328 429,258
CIT Group Inc. (Class A).......... 6,928 135,096
Comdisco Inc...................... 16,037 707,633
FINOVA Group Inc.................. 7,185 120,798
Firstar Corp...................... 10,777 247,197
GATX Corp......................... 5,389 204,782
Waddell & Reed Financial
Inc. (Class A) ................. 10,328 437,003
2,580,929
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
HEALTHCARE -- 6.6%
Allergan Inc...................... 1,283 $ 64,150
Cardinal Health Inc............... 3,721 170,701
Covance Inc....................... 8,211 88,268(a)
Genentech Inc..................... 1,384 210,368(a)
Henry Schein Inc.................. 9,622 155,756(a,e)
Sybron International Corp......... 9,622 279,038(a,e)
Tenet Healthcare Corp............. 8,596 197,708(a,e)
Watson Pharmaceuticals Inc........ 6,415 254,596(a)
1,420,585
INSURANCE -- 3.0%
American International Group Inc. 3,207 351,166(e)
Hartford Financial Services Group Inc. 3,977 209,787
UNUMProvident Corp................ 4,683 79,611
640,564
RETAIL TRADE -- 6.6%
Costco Wholesale Corp............. 6,415 337,188(a)
Federated Department Stores Inc... 9,622 401,718(a)
Kroger Co......................... 10,392 182,510(a)
Office Depot Inc.................. 16,037 185,428(a)
Zale Corp......................... 6,287 296,668(a)
1,403,512
TECHNOLOGY - ELECTRONICS & EQUIPMENT -- 27.4%
ADC Telecommunications Inc........ 11,034 594,457(a)
Agilent Technologies Inc.......... 6,415 667,160(a)
Altera Corp....................... 1,604 143,157(a)
Analog Devices Inc................ 23,556 1,897,730(a,e)
Atmel Corp........................ 2,140 110,478(a)
Finisar Corp...................... 1,291 189,152(a)
Nokia Corp. ADR................... 5,638 1,224,855
Nortel Networks Corp.............. 6,671 840,546
SCI Systems Inc................... 3,849 207,124(a)
5,874,659
TECHNOLOGY - SOFTWARE & SERVICES -- 3.9%
Cadence Design Systems Inc........ 6,479 134,439(a)
Compuware Corp.................... 8,339 175,640(a)
Intuit Inc........................ 1,068 58,073(a)
KPNQwest N.V...................... 3,849 208,808(a)
SunGard Data Systems Inc.......... 6,800 256,700(a)
833,660
UTILITIES -- 3.4%
El Paso Energy Corp............... 8,019 323,767
Qwest Communications
International Inc. ............ 8,339 404,442(a)
728,209
TOTAL INVESTMENTS IN SECURITIES
(COST $13,729,682) ........... 19,241,317
------------------
See Notes to Schedule of Investments and Notes to Financial statements.
23
<PAGE>
GE MID-CAP GROWTH FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 9.1%
--------------------------------------------------------------------------------
GEI Short-Term Investment Fund
(COST $1,938,675)............... 1,938,675 $ 1,938,675
OTHER ASSETS AND LIABILITIES,
NET 1.0% ....................... 223,971
-----------
NET ASSETS-- 100% ................ $21,403,963
===========
----------------------
See Notes to Schedule of Investments and Notes Financial Statements.
24
<PAGE>
MID-CAP VALUE EQUITY FUND
--------------------------------------------------------------------------------
Q&A
JON D. BOSSE OF NWQ INVESTMENT MANAGEMENT COMPANY (NWQ) IS THE PORTFOLIO MANAGER
OF THE MID-CAP VALUE EQUITY FUND. NWQ IS THE FUND'S SUB-ADVISER, WHICH HAS TOTAL
ASSETS UNDER MANAGEMENT EXCEEDING $5 BILLION. PRIOR TO JOINING NWQ IN 1996, JON
SPENT TEN YEARS WITH ARCO INVESTMENT MANAGEMENT COMPANY WHERE HE WAS DIRECTOR OF
EQUITY RESEARCH AND MANAGED A VALUE-ORIENTED FUND. PREVIOUS TO THIS, HE SPENT
FOUR YEARS IN THE CORPORATE FINANCE DEPARTMENT OF ARCO. JON RECEIVED HIS B.A.
(SUMMA CUM LAUDE) IN ECONOMICS FROM WASHINGTON UNIVERSITY IN ST. LOUIS WHERE HE
RECEIVED THE JOHN M. OLIN AWARD FOR EXCELLENCE IN ECONOMICS AND HIS M.B.A. FROM
WHARTON BUSINESS SCHOOL, UNIVERSITY OF PENNSYLVANIA. JON IS ALSO A CHARTERED
FINANCIAL ANALYST AND A MEMBER OF THE ASSOCIATION FOR INVESTMENT MANAGEMENT AND
RESEARCH AND THE LOS ANGELES SOCIETY OF FINANCIAL ANALYSTS.
Q. HOW DID THE MID-CAP VALUE EQUITY FUND PERFORM COMPARED TO ITS BENCHMARK FOR
THE SIX MONTHS ENDED MARCH 31, 2000? A. The Fund posted a return of 10.05% for
the six-month period ending March 31, 2000. This compares with a 32.08% return
for the S&P Midcap 400 Index.
Q. WHY DID THE FUND UNDER PERFORM ITS BENCHMARK?
A. The Fund's underperformance relative to its benchmark can be attributed to a
very speculative stock market environment that was dominated by biotechnology
and Internet-startups - areas of the market we have generally avoided due to
their lofty valuations. These lofty valuations have come to symbolize investing
in certain sectors of the market akin to high-stakes gambling rather than wealth
accumulation supported by fundamental analysis. Despite our limited exposure in
these areas, however, our performance was strong, particularly relative to the
value indices. The Fund's performance was bolstered due to the strong returns of
several holdings, across many sectors of the portfolio. While it is
disheartening to underperform your benchmark over any measured time-period, we
believe that the Fund is positioned to generate above-average returns,
long-term, without taking on the high levels of risk necessary to outperform in
a short-term, speculative environment.
Q. WHICH INVESTMENTS STAND OUT?
A. Portfolio holdings that positively contributed to performance the past six
months include AT&T Liberty Media, Hartford Financial Services Group, Pharmacia
& Upjohn, and Quantum Corp.-DLT & Storage Systems. Our best performing stock was
CoreComm Ltd., an alternative telephone company providing telephone and Internet
services in the U.S. The best performing sector was our energy holdings,
including BJ Services, Noble Affiliates, and Tosco Corp. On the downside, our
tobacco-related holdings Philip Morris, Loews Corp., and Nabisco Group Holdings
were weak on tobacco litigation concerns.
Q. HOW DO YOU PICK STOCKS?
A. Our investment philosophy is to identify undervalued companies with catalysts
present to improve profitability and unlock value. Catalysts may include new
management, industry consolidation, restructuring, and a positive turn in the
fundamentals. We are value-oriented and invest in attractive risk/reward
opportunities. We do not chase the market mania for Internet, technology, and
other speculative growth stocks where we find risk/reward and valuation
parameters extremely unattractive.
Q. WHAT IS THE OUTLOOK FOR THE FUND AND HOW HAVE YOU POSITIONED THE FUND GOING
FORWARD?
A. After being ignored for some time, the "non-tech" part of the market staged a
strong recovery in March, halting an unprecedented valuation gap that had
developed between growth and value investment styles. While stable core
inflation rates and declining bond yields were a factor in this change in
investor sentiment, a more significant catalyst was the increasing confidence
exhibited by old economy companyies in their own ability to deliver sustainable
long-term earnings growth. This is reflected in many of these company's
willingness to repurchase record amounts of their shares back in the open
market. Additionally, with many of these companies selling near book value, the
quantity of announced leverage buyouts and merger and acquisition activity has
also increased significantly. We view these events as a positive development for
the overall market and value stocks in general. Accordingly, we have positioned
the Fund in a number of attractive investment opportunities, including our
holdings in the finance, energy services, healthcare, media, and
telecommunications sectors.
Q. WHAT ARE THE FIVE BEST AND WORST PERFORMING STOCKS HELD DURING THE SIX-MONTH
PERIOD?
BEST
CoreComm Ltd. +20.5%
BJ Services +20.4%
Pharmacia & Upjohn +19.9%
Quantum Corp.-DLT & Storage +11.7%
Hartford Financial Group +7.8%
WORST
Delta Airlines -3.6%
Tenet Healthcare -5.6%
Philip Morris -5.6%
Ford Motor Co. -6.8%
Nabisco Group Holdings -17.5%
25
<PAGE>
MID-CAP VALUE EQUITY FUND
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
--------------------------------------------------------------------------------
[LINE GRAPH OMITTED]
MID-CAP VALUE EQUITY FUND S&P MIDCAP 400
12/98 10000.00 10000.00
3/99 10120.00 9366.52
6/99 11550.00 10690.42
9/99 9910.00 9793.06
12/99 10956.87 11476.89
3/00 10906.33 12934.39
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
SIX ONE SINCE
MONTHS YEAR INCEPTION COMMENCEMENT
--------------------------------------------------------------------------------
Mid-Cap Value Equity Fund 10.05% 7.77% 7.18% 12/31/98
--------------------------------------------------------------------------------
S&P MidCap 400 32.08% 38.09% 22.87%
--------------------------------------------------------------------------------
INVESTMENT PROFILE
Amutual fund designed for investors who seek long-term growth of capital by
investing primarily in equity securities of companies with medium-sized
market capitalization that the Fund's management believes are undervalued by
the market and have above-average growth potential.
--------------------------------------------------------------------------------
SECTOR ALLOCATION AS OF MARCH 31, 2000
--------------------------------------------------------------------------------
[PIE CHART OMITTED]
CONSUMER 24.4%
FINANCIAL SERVICES 23.4%
TELECOMMUNICATIONS 16.3%
ENERGY 7.6%
MATERIALS & PROCESSING 7.5%
HEALTHCARE 6.8%
CAPITAL GOODS 4.5%
TECHNOLOGY 3.3%
MISCELLANEOUS 3.1%
TRANSPORTATION 1.9%
CASH & OTHER 1.2%
--------------------------------------------------------------------------------
TOP TEN LARGEST HOLDINGS AT MARCH 31, 2000
--------------------------------------------------------------------------------
CoreComm Ltd. 4.97%
--------------------------------------------------------------------------------
Telephone & Data Systems Inc. 4.65%
--------------------------------------------------------------------------------
AT&T Corp. - Liberty Media Group (Class A) 4.65%
--------------------------------------------------------------------------------
NTL Inc. 4.40%
--------------------------------------------------------------------------------
MediaOne Group Inc. 3.54%
--------------------------------------------------------------------------------
Tenet Healthcare Corp. 2.79%
--------------------------------------------------------------------------------
Heller Financial Inc. 2.66%
--------------------------------------------------------------------------------
Waddell & Reed Financial Inc. (Class A) 2.64%
--------------------------------------------------------------------------------
Chase Manhattan Corp. 2.57%
--------------------------------------------------------------------------------
Praxair Inc. 2.56%
--------------------------------------------------------------------------------
SEE NOTES TO PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
26
<PAGE>
GE MID-CAP VALUE EQUITY FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
MID-CAP VALUE EQUITY FUND
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- 98.8%
--------------------------------------------------------------------------------
CAPITAL GOODS -- 4.5%
CNH Global N.V.................... 7,000 $ 69,125
Ingersoll-Rand Co................. 2,800 123,900
Parker-Hannifin Corp.............. 4,000 165,250
York International Corp........... 6,300 147,263
505,538
CONSUMER - DISCRETIONARY -- 20.4%
AT&T Corp. - Liberty Media
Group (Class A) ................ 8,800 521,400(a)
Cox Communications Inc. (Class A) 3,200 155,200(a)
Delphi Automotive Systems Corp.... 6,800 108,800
Dillards Inc. (Class A)........... 8,700 143,006
Ford Motor Co..................... 5,000 229,687
Hasbro Inc........................ 12,500 206,250
Lear Corp......................... 4,500 126,563(a)
Mandalay Resort Group............. 7,100 119,813(a)
MediaOne Group Inc................ 4,900 396,900(a)
The E.W. Scripps Co. Inc. (Class A) 5,800 281,300
2,288,919
CONSUMER - STABLE -- 4.0%
Alberto-Culver Co. (Class A)...... 7,200 157,500
Nabisco Group Holdings Corp....... 9,700 116,400
Philip Morris Cos. Inc............ 8,000 169,000
442,900
ENERGY -- 7.6%
BJ Services Co.................... 1,400 103,425(a)
Conoco Inc. (Class B)............. 9,200 235,750
Noble Affiliates Inc.............. 8,200 269,062
Tosco Corp........................ 8,000 243,500
851,737
FINANCIAL -- 17.4%
Bank of America Corp.............. 4,100 214,994
Bear Stearns Cos. Inc............. 5,843 266,587
Chase Manhattan Corp.............. 3,300 287,719
Countrywide Credit Industries Inc. 6,500 177,125
First Union Corp.................. 5,300 197,425
Heller Financial Inc.............. 12,900 298,312
IndyMac Mortgage Holdings Inc..... 14,200 212,113
Waddell & Reed Financial Inc.
(Class A) ...................... 7,000 296,187
1,950,462
HEALTHCARE -- 6.8%
Aetna Inc......................... 3,800 211,612
Pharmacia & Upjohn Inc............ 4,100 242,925
Tenet Healthcare Corp............. 13,600 312,800(a)
767,337
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
VALUE INSURANCE -- 6.0%
Hartford Financial Services
Group Inc. ..................... 5,400 $ 284,850
MGIC Investment Corp.............. 5,000 218,125
Torchmark Corp.................... 7,300 168,813
671,788
MATERIALS & PROCESSING -- 7.5%
Applied Power Inc. (Class A)...... 5,000 142,500
Bowater Inc....................... 3,000 160,125
Packaging Corp. of America........ 14,500 152,250(a)
Praxair Inc....................... 6,900 287,212
Smurfit-Stone Container Corp...... 6,000 101,625(a)
843,712
MISCELLANEOUS -- 3.1%
Loews Corp........................ 4,100 205,000
Pactiv Corp....................... 16,200 141,750(a)
346,750
TECHNOLOGY - ELECTRONICS & EQUIPMENT -- 3.3%
Quantum Corp. - DLT &
Storage Systems ................ 12,500 149,219(a)
Quantum Corp. - Hard Disk Drive... 19,400 218,250(a)
367,469
TELECOMMUNICATIONS -- 16.3%
Alltel Corp....................... 4,000 252,250
CoreComm Ltd...................... 12,650 556,600(a)
NTL Inc........................... 5,312 493,020(a)
Telephone & Data Systems Inc...... 4,700 521,700
1,823,570
TRANSPORTATION -- 1.9%
Delta Air Lines Inc............... 4,000 213,000
TOTAL INVESTMENTS IN SECURITIES
(COST $10,120,302) .............. 11,073,182
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 2.6%
--------------------------------------------------------------------------------
GEI Short-Term Investment Fund
(COST $290,343) ................ 290,343 290,343
OTHER ASSETS AND LIABILITIES,
NET (1.4)% ..................... (156,213)
-----------
NET ASSETS-- 100% ................ $11,207,312
===========
--------------------------------
See Notes to Schedule of Investments and Notes to Financial statements.
27
<PAGE>
SMALL-CAP VALUE EQUITY FUND
--------------------------------------------------------------------------------
Q&A
PALISADE CAPITAL MANAGEMENT, L.L.C. ("PALISADE"), WITH TOTAL ASSETS UNDER
MANAGEMENT EXCEEDING $2 BILLION, IS THE FUND'S SUB-ADVISER. THE FUND IS MANAGED
BY PALISADE'S SENIOR INVESTMENT COMMITTEE WHICH IS COMPOSED OF THE FOLLOWING
MEMBERS: JACK FEILER, MARTIN L. BERMAN, STEVEN E. BERMAN AND RICHARD MEISENBERG.
JACK FEILER, CHIEF INVESTMENT OFFICER OF PALISADE, HAS DAY-TO-DAY RESPONSIBILITY
FOR MANAGING THE FUND AND WORKS WITH THE SENIOR INVESTMENT COMMITTEE IN
DEVELOPING AND EXECUTING THE FUND'S INVESTMENT PROGRAM. JACK HAS MORE THAN 30
YEARS OF INVESTMENT EXPERIENCE AND HAS SERVED AS THE PRINCIPAL SMALL-CAP
PORTFOLIO MANAGER AT PALISADE SINCE THE COMMENCEMENT OF PALISADE'S OPERATIONS IN
APRIL 1995. PRIOR TO JOINING PALISADE, JACK WORKED FOR BURNHAM & CO. AS AN
ACCOUNT EXECUTIVE AND WAS PROMOTED TO SENIOR EXECUTIVE VICE PRESIDENT OF BROAD
STREET INVESTMENT MANAGEMENT IN 1981. IN 1990, HE JOINED SMITH BARNEY AS SENIOR
VICE PRESIDENT OF INVESTMENTS. JACK RECEIVED HIS BACHELOR'S DEGREE IN 1964 FROM
CITY COLLEGE OF NEW YORK AND HIS JURIS DOCTOR DEGREE FROM BROOKLYN LAW SCHOOL IN
1967.
Q. HOW DID THE SMALL-CAP VALUE EQUITY FUND PERFORM COMPARED TO ITS BENCHMARK FOR
THE SIX MONTHS ENDED MARCH 31, 2000?
A. The Fund had a return of 31.15% for the six months ended March 31, 2000 while
the Russell 2000 Index returned 26.65% for the same period.
Q. WHY DID THE FUND OUTPERFORM ITS BENCHMARK?
A. Core holdings in the financial services and consumer discretionary sectors
aided returns while strong additions in the technology and health care sectors
helped the Fund garner additional strength against the Russell 2000 Index. Among
our top performers were companies with strong management and product lines
positioned well for the future, such as: Titan Corp., Emmis Communications,
Comdisco, Veeco Instruments and Glenayre Technologies.
Q. WHAT HAS YOUR INVESTMENT STRATEGY BEEN?
A. We believe that, over the long term, the stocks of small to medium
capitalization companies will outperform those of large capitalization
companies. These companies are often more efficient in bringing recently
developed products to the market in a timely manner and in reacting to changes
in the marketplace. Our primary focus is on quality of management. We attempt to
maintain a balance between an investment candidate's projected growth and its
valuation.
Q. WHY DID THE WEIGHTING OF THE FUND CHANGE?
A. There is no limit as to the amount we will be under or over-weighted in a
sector or industry group compared to the Russell 2000. First and foremost, we
consider ourselves stock pickers. We view sector allocation as a tool to help
manage risk but rely upon our stock selection as the primary component of
portfolio construction. Our allocation to technology and health care has
increased over the last six months as we have found more opportunities for
future return within these sectors.
Q. WHAT IS THE OUTLOOK FOR THE FUND AND HOW HAVE YOU POSITIONED THE FUND GOING
FORWARD?
A. We remain committed to finding companies with strong product lines, robust
projected growth, reasonable valuations and forward thinking management.
28
<PAGE>
SMALL-CAP VALUE EQUITY FUND
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
--------------------------------------------------------------------------------
[LINE GRAPH OMITTED]
SMALL-CAP VALUE EQUITY FUND RUSSELL 2000
8/3/98 10000.00 10000.00
9/98 8910.00 8688.62
3/99 8680.73 9557.63
9/99 10155.95 10345.68
3/00 13319.91 13103.13
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
SIX ONE SINCE
MONTHS YEAR INCEPTION COMMENCEMENT
--------------------------------------------------------------------------------
Small-Cap Value Equity Fund 31.15% 53.44% 18.84% 8/3/98
--------------------------------------------------------------------------------
Russell 2000 26.65% 37.29% 17.68%
--------------------------------------------------------------------------------
INVESTMENT PROFILE
A mutual fund designed for investors who seek long-term growth of capital by
investing primarily in equity securities of companies with small-sized market
capitalizations that the Fund's Management considers to be undervalued by the
market but have solid growth prospects.
--------------------------------------------------------------------------------
SECTOR ALLOCATION AS OF MARCH 31, 2000
--------------------------------------------------------------------------------
[PIE CHART OMITTED]
TECHNOLOGY 34.7%
CONSUMER 16.2%
HEALTHCARE 11.0%
FINANCIAL SERVICES 8.7%
TELECOMMUNICATIONS 7.2%
UTILITIES 6.1%
CASH & OTHER 4.9%
PRODUCER DURABLES 3.8%
MATERIALS & PROCESSING 2.6%
REIT 1.7%
ENERGY1.1%
BROADCAST/CABLE 1.0%
AUTO & TRANSPORTATION 1.0%
--------------------------------------------------------------------------------
TOP TEN LARGEST HOLDINGS AT MARCH 31, 2000
--------------------------------------------------------------------------------
Eastern Enterprises 3.58%
--------------------------------------------------------------------------------
The Titan Corp. 3.46%
--------------------------------------------------------------------------------
NOVA Corp. 3.16%
--------------------------------------------------------------------------------
Zebra Technologies Corp. (Class A) 3.07%
--------------------------------------------------------------------------------
Quantum Corp. - Hard Disk Drive 2.94%
--------------------------------------------------------------------------------
CommScope Inc. 2.75%
--------------------------------------------------------------------------------
ITC DeltaCom Inc. 2.68%
--------------------------------------------------------------------------------
S3 Inc. 2.54%
--------------------------------------------------------------------------------
Glenayre Technologies Inc. 2.51%
--------------------------------------------------------------------------------
Aeroflex Inc. 2.44%
--------------------------------------------------------------------------------
SEE NOTES TO PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
29
<PAGE>
GE SMALL-CAP VALUE EQUITY FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
SMALL-CAP VALUE EQUITY FUND
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- 95.1%
--------------------------------------------------------------------------------
AUTO & TRANSPORTATION -- 1.0%
Kirby Corp........................ 8,700 $ 171,825(a)
BROADCAST/CABLE -- 1.0%
Pegasus Communications Corp....... 1,300 182,975(a)
CONSUMER - DISCRETIONARY -- 16.2%
Dollar Tree Stores Inc............ 4,200 218,925(a)
Fastenal Co....................... 6,600 315,975
Handleman Co...................... 27,800 246,725(a)
InterTAN Inc...................... 21,950 301,813(a)
Iron Mountain Inc................. 8,000 272,500(a)
Polaroid Corp..................... 11,300 268,375
Reader's Digest Assoc. Inc. (Class A) 7,800 275,925
School Specialty Inc.............. 11,300 242,950(a)
TeleTech Holdings Inc............. 10,700 369,150(a)
United Stationers Inc............. 5,500 196,281(a)
Ziff-Davis Inc. - ZDNet........... 5,200 110,500(a)
2,819,119
ENERGY -- 1.1%
Noble Affiliates Inc.............. 6,000 196,875
FINANCIAL SERVICES -- 8.7%
AmeriCredit Corp.................. 6,700 109,294(a)
Commerce Bancorp Inc.............. 2,700 99,900
Imperial Bancorp.................. 2,268 70,308
IndyMac Mortgage Holdings Inc..... 12,900 192,694
Investment Technology Group Inc... 5,300 186,825(a)
NOVA Corp......................... 18,900 550,462(a)
The BISYS Group Inc............... 4,700 312,550(a)
1,522,033
HEALTHCARE -- 11.0%
Barr Laboratories Inc............. 4,600 193,200(a)
Beckman Coulter Inc............... 4,300 276,006
Chattem Inc....................... 6,500 91,813(a)
Hooper Holmes Inc................. 5,600 192,150
Oxford Health Plans Inc........... 16,300 248,575(a)
The Cooper Cos. Inc............... 2,000 64,375
Triad Hospitals Inc............... 13,900 232,825(a)
Universal Health Services
Inc. (Class B) ................. 5,300 259,700(a)
Varian Medical Systems Inc........ 7,800 355,875
1,914,519
MATERIALS & PROCESSING -- 2.6%
Airgas Inc........................ 20,400 169,575(a)
Ball Corp......................... 3,700 127,881
Kaydon Corp....................... 4,400 120,175
New England Business Service Inc.. 2,400 41,400
459,031
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
PRODUCER DURABLES -- 3.8%
Cable Design Technologies Corp. ..... 5,700 $ 193,444(a)
HEICO Corp. (Class A) ............... 4,500 63,000
L-3 Communications
Holdings Inc. .................... 5,300 275,600(a)
The Manitowoc Co. Inc. .............. 4,500 121,781
653,825
REAL ESTATE INVESTMENT TRUST -- 1.7%
First Industrial Realty Trust Inc. .. 4,500 122,625
Mid-Atlantic Realty Trust ........... 18,200 168,350
290,975
TECHNOLOGY -- 34.7%
About.com Inc. ...................... 2,800 246,750(a)
Aeroflex Inc. ....................... 8,600 425,700(a)
Affiliated Computer Services Inc. ... 6,200 235,600(a)
Comdisco Inc. ....................... 3,700 163,263
CommScope Inc. ...................... 10,500 479,062(a)
Danka Business Systems PLC ADR ...... 29,400 180,075(a)
Digene Corp. ........................ 3,600 165,600(a)
Frequency Electronics Inc. .......... 15,200 277,400
General Semiconductor Inc. .......... 18,100 312,225(a)
Glenayre Technologies Inc. .......... 24,900 437,306(a)
Hadco Corp. ......................... 2,600 168,025(a)
iGATE Capital Corp. ................. 3,200 144,400(a)
Lattice Semiconductor Corp. ......... 3,800 257,212(a)
Printronix Inc. ..................... 7,300 145,088(a)
Quantum Corp. - Hard Disk Drive ..... 45,500 511,875(a)
S3 Inc. ............................. 21,100 443,100(a)
The Titan Corp. ..................... 11,800 601,800(a)
VIA NET.WORKS Inc. .................. 5,800 154,063(a)
Visual Networks Inc. ................ 2,800 158,900(a)
Zebra Technologies
Corp. (Class A) .................. 10,700 535,000(a)
6,042,444
TELECOMMUNICATIONS -- 7.2%
Global TeleSystems Group Inc. ....... 8,100 166,050(a)
InterVoice-Brite Inc. ............... 8,200 236,775(a)
ITC DeltaCom Inc. ................... 13,100 466,687(a)
Microcell Telecommunications
Inc. (Class B) ................... 8,800 390,500(a)
1,260,012
UTILITIES -- 6.1%
Eastern Enterprises ................. 10,400 622,700
ICG Communications Inc. ............. 7,100 256,487(a)
NSTAR ............................... 4,300 180,600
1,059,787
TOTAL INVESTMENTS IN SECURITIES
(COST $15,316,845) ............... 16,573,420
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 5.3%
--------------------------------------------------------------------------------
GEI Short-Term Investment Fund
(COST $915,968) ..................915,968 915,968
OTHER ASSETS AND LIABILITIES,
NET (0.4)% ....................... (71,460)
-----------
NET ASSETS-- 100% ................... $17,417,928
===========
------------------------
See Notes to Schedule of Investments and Notes to Financial statements.
30
<PAGE>
INTERNATIONAL EQUITY FUND
--------------------------------------------------------------------------------
Q&A
RALPH LAYMAN MANAGES THE INTERNATIONAL EQUITY INVESTMENT PROCESS AT GE ASSET
MANAGEMENT. TOTAL ASSETS UNDER HIS MANAGEMENT EXCEED $15 BILLION. HE LEADS A
TEAM OF PORTFOLIO MANAGERS FOR THE INTERNATIONAL EQUITY FUND. PRIOR TO JOINING
GE ASSET MANAGEMENT IN 1991, RALPH WAS EXECUTIVE VICE PRESIDENT, PARTNER AND
PORTFOLIO MANAGER OF INTERNATIONAL EQUITY OPERATIONS AT NORTHERN CAPITAL
MANAGEMENT. PREVIOUSLY, HE WAS A VICE PRESIDENT AND PORTFOLIO MANAGER AT
TEMPLETON INVESTMENT COUNSEL, INC. HE WAS INSTRUMENTAL IN FORMING TEMPLETON'S
EMERGING MARKETS FUND, THE FIRST LISTED EMERGING MARKETS EQUITY FUND IN THE U.S.
RALPH IS A TRUSTEE OF THE GE PENSION TRUST, AND GE'S EMPLOYEE SAVINGS PROGRAM,
AND SERVES ON THE GE ASSET MANAGEMENT'S ASSET ALLOCATION COMMITTEE. HE IS A
CHARTERED FINANCIAL ANALYST, A CHARTER MEMBER OF THE INTERNATIONAL SOCIETY OF
SECURITY ANALYSTS AND A MEMBER OF THE NEW YORK SOCIETY OF SECURITY ANALYSTS.
RALPH IS A GRADUATE OF THE UNIVERSITY OF WISCONSIN WITH A B.S. IN ECONOMICS AND
A M.S. IN FINANCE.
Q. HOW DID THE INTERNATIONAL EQUITY FUND PERFORM COMPARED TO ITS BENCHMARK FOR
THE SIX MONTHS ENDED MARCH 31, 2000?
A. The International Equity Fund rose 26.55% in the six month period ending
March 31, 2000, well ahead of the MSCI EAFE benchmark which rose 16.87%.
Q. WHAT EVENTS HAD AN IMPACT ON THE FINANCIAL MARKETS DURING THE SIX MONTH
PERIOD ENDED MARCH 31, 2000 AND HOW DID THEY IMPACT THE FUND?
A. The 4th quarter of 1999 witnessed the birth of "TMT" -- the euphemism
describing the three sectors that outperformed at the expense of all others,
namely Technology, Media and Telecoms. The trend continued into the 1st
quarter of 2000, although investors became more discriminatory as the quarter
progressed -- concentrating on companies whose future earnings and business
plans looked more realistic. By the end of the quarter, the valuations of
many TMT stocks reached unjustifiably high levels and share prices across the
sectors fell sharply, with the fall continuing into early April.
Over the last six months, many non-TMT stocks have been weak, although the
underlying fundamentals often looked good. These stocks became known as "old
economy" stocks and included such sectors as steels, chemicals and papers as
well as financials and general engineering, all of which benefit
fundamentally from the strong economic growth which most of the world is
currently experiencing. During the quarter, we reduced our holdings in the
TMT stocks because we could not justify their high valuations given their
expected growth rates, and increased our weights in the old economy sectors
where the valuations were more reasonable. By the end of the quarter, this
strategy was paying off.
Q. WHY DID THE FUND OUTPERFORM ITS BENCHMARK FOR THE SEMI-ANNUAL PERIOD ENDED
MARCH 31, 2000?
A. The Fund outperformed the EAFE index during the six month period. Market
attribution was positive across all regions. However, most of the
outperformance came from stock selection that was positive across the
portfolio. The greatest contribution came from the Continental European
portfolio whose stocks significantly outperformed the underlying index. The
emerging markets stocks also performed very well. Holdings that provided the
greatest contribution to performance were Lagardere (France), Vodafone
Airtouch (UK), which acquired Mannesmann, Ericsson (Sweden), Taiwan
Semiconductor Manufacturing (Taiwan) and Toshiba (Japan).
Q. WHAT CHANGES HAVE YOU MADE IN THE FUND RECENTLY BASED ON CURRENT MARKET
EVENTS?
A. During the period, many TMT share prices rose to levels that could not be
justified by their underlying growth. Our discipline of owning companies
which have forecasted 3 to 5 year cash earnings growth greater than the
underlying price/cash earnings ratio led us to sell such stocks once they
became expensive. As a result, we sold our holding in Nokia, the Finnish
telecoms equipment manufacturer, and began the sell program in many others
including Cap Gemini (French software), Nortel (Canadian telecoms equipment),
Sonera (Finnish telecoms operator) and STMicroelectronics (French computer
chip manufacturer). In addition, we sold Airtours (UK Travel agent) because
of weakening earnings expectations amid an overly competitive environment,
and FKI (UK engineering company) because of valuations. New positions added
during the 1st quarter included BMW (German car manufacturer) where earnings
expectations improved on the sale of the loss making Rover Car operation,
Samsung Electronics (Korean electronics), and KPN (Netherlands telecoms
operator).
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. There is no doubt that the last six months have been an unusual period in
global stock markets. Every few decades, a new technology is developed which
can transform the way in which companies operate. In the 1970's, the
introduction of the computer into corporate life was seen as revolutionary,
but the main beneficiaries were companies that swiftly and successfully used
computers in their operations, rather than the computer manufacturers
themselves. Similarly, the main long term beneficiaries of e-commerce will
probably not be the e-commerce vendors but those companies that successfully
use e-commerce to improve their operations. The recent rise in so-called
e-commerce stocks is unlikely to be long lived and investors should
concentrate on companies that use e-commerce effectively. Many of the recent
high performance stocks, especially those that have had a short life span,
will either disappear or be acquired. In our search for companies with share
price valuations that are cheap relative to their long-term growth, we will
take their use of e-commerce into account when estimating their future
earnings.
31
<PAGE>
INTERNATIONAL EQUITY FUND
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
--------------------------------------------------------------------------------
[LINE GRAPH OMITTED]
INTERNATIONAL EQUITY FUND MSCI EAFE
11/25/97 10000.00 10000.00
12/97 10266.29 10087.20
3/98 12027.37 11571.01
6/98 12237.50 11693.95
9/98 10066.17 10031.88
12/98 12044.22 12104.51
3/99 12472.13 12272.95
6/99 12847.86 12584.86
9/99 13035.72 13137.15
12/99 15880.83 15368.47
3/00 16497.04 15352.99
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
SIX ONE SINCE
MONTHS YEAR INCEPTION COMMENCEMENT
--------------------------------------------------------------------------------
International Equity Fund 26.55% 32.27% 23.74% 11/25/97
--------------------------------------------------------------------------------
MSCI EAFE 16.87% 25.10% 20.03%
--------------------------------------------------------------------------------
INVESTMENT PROFILE
A mutual fund designed for investors who seek long-term growth of capital by
investing primarily in foreign equity securities.
--------------------------------------------------------------------------------
REGIONAL ALLOCATION AS OF MARCH 31, 2000
--------------------------------------------------------------------------------
[PIE CHART OMITTED]
EUROPE 63.5%
JAPAN 16.0%
PACIFIC RIM 10.8%
OTHER REGIONS 7.5%
CASH & OTHER 2.2%
--------------------------------------------------------------------------------
TOP TEN LARGEST HOLDINGS AT MARCH 31, 2000
--------------------------------------------------------------------------------
Taiwan Semiconductor Manufacturing Co. 2.72%
--------------------------------------------------------------------------------
Vodafone AirTouch PLC 2.60%
--------------------------------------------------------------------------------
Canon Inc. 2.39%
--------------------------------------------------------------------------------
Philips Electronics N.V. 2.18%
--------------------------------------------------------------------------------
Toshiba Corp. 2.15%
--------------------------------------------------------------------------------
BAE Systems PLC 2.15%
--------------------------------------------------------------------------------
Telefonica S.A. 2.14%
--------------------------------------------------------------------------------
AXA-UAP 2.12%
--------------------------------------------------------------------------------
Lagardere S.C.A. 2.10%
--------------------------------------------------------------------------------
Total S.A. (Class B) 2.02%
--------------------------------------------------------------------------------
SEE NOTES TO PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
32
<PAGE>
GE INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- 96.9%
--------------------------------------------------------------------------------
AUSTRALIA -- 2.1%
Brambles Industries Ltd........... 213,407 $ 5,423,619
Cable & Wireless Optus Ltd........ 686,784 2,749,354(a)
8,172,973
BRAZIL -- 0.5%
Uniao de Bancos Brasilieros
S.A. GDR ..................... 62,559 1,986,248
CANADA -- 2.3%
ATI Technologies Inc.............. 95,311 1,689,097(a)
Celestica Inc..................... 70,488 3,740,270(a)
CGI Group Inc. (Class A).......... 196,488 2,758,675(a)
Nortel Networks Corp.............. 6,096 768,096
8,956,138
DENMARK -- 0.3%
Novo-Nordisk AS (Series B)........ 7,586 1,024,094
FINLAND -- 1.6%
Pohjola Group Insurance Corp.
(Series B) ..................... 12,138 900,762
Sampo Insurance Co. Ltd. (Series A) 87,058 3,334,495
Sonera Oyj........................ 3,159 215,675
Stora Enso Oyj.................... 112,193 1,203,221
Tietoenator Oyj................... 6,455 387,548
6,041,701
FRANCE -- 15.9%
Aerospatiale Matra (Regd.)........ 113,557 2,172,555(a)
Alstom............................ 200,724 5,573,894
Aventis S.A....................... 73,154 4,006,780
AXA-UAP........................... 57,923 8,214,242
Banque Nationale de Paris......... 35,415 2,797,709
Cap Gemini S.A.................... 2,871 778,003
Carrefour S.A..................... 18,865 2,418,794
Coflexip S.A. ADR................. 42,314 2,316,692
Lagardere S.C.A................... 99,957 8,121,317
Lyonnaise Des Eaux S.A............ 16,350 2,811,807
Michelin CGDE (Regd.) (Class B).. 89,091 2,861,266
Rhodia S.A........................ 104,393 1,869,280
Schneider S.A..................... 49,738 3,176,695
STMicroelectronics N.V............ 13,051 2,399,421
Total S.A. (Class B).............. 52,164 7,817,118
Vivendi........................... 36,289 4,187,198
61,522,771
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
GERMANY -- 8.7%
Bayer AG.......................... 36,365 $ 1,628,940
Bayerische Motoren Werke
(BMW) AG ....................... 90,300 2,866,373
DaimlerChrysler AG................ 26,498 1,725,882
Deutsche Bank AG.................. 47,645 3,157,074
Fresenius Medical Care AG......... 49,698 3,707,130
HypoVereinsbank AG................ 28,638 1,775,595
Infineon Technologies AG.......... 5,654 308,868(a)
Metallgesellschaft AG............. 259,401 4,781,496
Muenchener Rueckversicherungs-
Gesellschaft AG (Regd.) ........ 17,857 5,557,165
Preussag AG....................... 104,924 4,821,554
Veba AG........................... 68,710 3,503,491
33,833,568
GREECE -- 0.7%
Hellenic Telecommunication
Organization S.A. ADR ......... 71,360 1,034,720
Hellenic Telecommunication
Organization S.A. GDR ......... 56,980 1,620,806
2,655,526
HONG KONG -- 2.5%
Cheung Kong (Holdings) Ltd........ 214,495 3,209,209
Giordano International Ltd........ 1,394,000 1,691,802
Hutchison Whampoa Ltd............. 35,000 631,538
Johnson Electric Holdings Ltd..... 580,900 3,972,610
9,505,159
IRELAND -- 2.3%
Bank of Ireland................... 542,341 3,894,889
CRH PLC........................... 194,039 3,530,238
Jefferson Smurfit Group PLC....... 568,220 1,320,809
8,745,936
ISRAEL -- 2.0%
Comverse Technology Inc........... 849 160,461(a)
ECI Telecommunications Ltd........ 161,143 5,055,862
Teva Pharmaceutical
Industries Ltd. ADR ............ 69,988 2,611,427
7,827,750
ITALY -- 1.6%
Banca Intesa S.p.A................ 534,689 1,848,289
Saipem............................ 586,462 2,863,990
Telecom Italia S.p.A.............. 96,032 1,434,504
6,146,783
JAPAN -- 16.0%
Asahi Bank Ltd.................... 116,882 654,626
Asahi Chemical Industry Co. Ltd... 9,000 57,420
Canon Inc......................... 213,000 9,232,455
-------------------------
See Notes to Schedule of Investments and Notes to Financial statements.
33
<PAGE>
GE INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Fujitsu Ltd....................... 215,000 $ 6,596,698
ITOCHU Corp....................... 386,262 2,058,007 (a)
Kao Corp.......................... 133,621 4,086,786
Mazda Motor Corp.................. 750,000 2,556,860
Minebea Co. Ltd................... 331,000 4,400,867
Mitsukoshi Ltd.................... 73,586 318,241 (a)
NAMCO Ltd......................... 16,700 684,819
Nippon Telegraph and
Telephone Corp. (NTT) 285 4,524,911
Shin-Etsu Chemical Co............. 90,000 5,461,452
Sony Corp......................... 25,900 3,683,241(a)
Sony Corp......................... 25,900 3,658,014
Sumitomo Electric Industries...... 129,000 1,818,176
The Fuji Bank Ltd................. 199,000 1,870,501
The Tokyo Electric Power Co. Inc.. 83,000 1,819,023
Toshiba Corp...................... 817,000 8,323,986
61,806,083
MEXICO -- 2.2%
Desc S.A. de C.V. (Series B)...... 555,954 405,941
Desc S.A. de C.V. ADR............. 70,473 1,057,095
Grupo Carso S.A. de C.V. ADR...... 93,481 718,869
Grupo Financiero Banamex
Accival S.A. de C.V. (Class B) 824,684 3,774,603(a)
Grupo Televisa S.A. GDR........... 39,339 2,675,052(a)
8,631,560
NETHERLANDS -- 7.9%
Getronics N.V..................... 37,872 2,897,520
IHC Caland N.V.................... 63,795 2,730,584
ING Groep N.V..................... 132,270 7,168,680
Ispat International N.V. (Regd.)
(Class A) 91,799 1,365,510
Koninklijke Ahold N.V............. 66,724 1,737,211
Koninklijke KPN N.V............... 46,884 5,371,540
Philips Electronics N.V........... 50,077 8,420,235
Vendex KBB N.V.................... 53,628 883,246
30,574,526
PANAMA -- 0.1%
Panamerican Beverages Inc.
(Class A) ...................... 17,364 306,042
POLAND -- 0.5%
Telekomunikacja Polska
S.A. GDR (Series A) ............ 218,397 2,042,012(a,b)
PORTUGAL -- 0.2%
Banco Comercial Portugues
(Regd.) ........................ 168,891 910,492
SINGAPORE -- 0.3%
Chartered Semiconductor
Manufacturing Ltd. ADR ......... 14,050 1,324,213(a)
SOUTH KOREA -- 3.0%
Kookmin Bank...................... 27,540 279,075
Korea Electric Power Corp......... 26,960 768,369
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Korea Telecom Corp. ADR........... 34,886 $ 1,526,263
Korea Telecom Corp................ 14,824 1,314,410
Pohang Iron & Steel Co. Ltd....... 17,182 1,688,741
Pohang Iron & Steel Co. Ltd. ADR.. 40,811 1,122,302
Samsung Electronics............... 15,910 4,822,303
11,521,463
SPAIN -- 2.5%
Repsol S.A........................ 61,580 1,350,909
Telefonica S.A.................... 327,289 8,273,643(a)
9,624,552
SWEDEN -- 4.0%
Autoliv Inc. SDR.................. 112,165 3,107,028
Ericsson LM Telephone (Series B).. 79,899 7,028,667
Investor AB (Series B)............ 35,325 552,721
Invik & Co. AB.................... 7,152 1,036,161
Kinnevik AB (Series B)............ 15,368 587,789
NetCom Systems AB (Series B)...... 9,062 782,474(a)
Nordic Baltic Holding AB FDR...... 321,259 1,691,918
Pharmacia & Upjohn Inc............ 9,102 539,294
15,326,052
SWITZERLAND -- 1.8%
ABB Ltd........................... 27,186 3,123,606
Credit Suisse AG.................. 15,113 3,009,235
Novartis AG (Regd.)............... 652 891,899
7,024,740
TAIWAN -- 2.9%
Synnex Technology International
Corp. GDR ...................... 26,156 817,375(b)
Taiwan Semiconductor
Manufacturing Co. .............. 1,559,413 10,505,411
11,322,786
UNITED KINGDOM -- 15.0%
Bank of Scotland.................. 127,194 1,457,028
BAE Systems PLC................... 1,491,258 8,309,815
Cable & Wireless PLC.............. 348,549 6,542,567
Commercial Union PLC.............. 436,651 6,055,125
Corus Group PLC................... 2,415,598 3,874,719
Granada Group PLC................. 657,849 7,048,745
Invensys PLC...................... 1,109,712 4,942,548
Nycomed Amersham PLC.............. 462,891 3,758,542
Railtrack Group PLC............... 68,135 791,888
Reed International PLC............ 250,491 1,826,536
Royal & Sun Alliance Insurance
Group PLC ...................... 326,993 2,030,363
Saatchi & Saatchi PLC............. 96,996 568,293
Somerfield PLC.................... 746,705 659,800
Vodafone AirTouch PLC............. 1,803,764 10,051,206
57,917,175
TOTAL COMMON STOCK
(COST $337,184,514) ............ 374,750,343
--------------------
See Notes to Schedule of Investments and Notes to Financial statements.
34
<PAGE>
GE INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
PREFERRED STOCK -- 0.9%
--------------------------------------------------------------------------------
Henkel KGaA....................... 35,041 $ 2,013,210
Telecomunicacoes Brasileiras
S.A. ADR 9,195 1,376,377(a)
TOTAL PREFERRED STOCK
(COST $3,240,266) .............. 3,389,587
--------------------------------------------------------------------------------
WARRANTS -- 0.0%
--------------------------------------------------------------------------------
Muenchener Rueckversicherungs-
Gesellschaft AG (Regd.), 06/03/02
(COST $0)....................... 181 15,598(a)
TOTAL INVESTMENTS IN SECURITIES
(COST $340,424,780) ............ 378,155,528
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 5.0%
--------------------------------------------------------------------------------
GEI Short-Term Investment Fund
(COST $19,340,907) ............19,340,907 19,340,907
OTHER ASSETS AND LIABILITIES,
NET (2.8)% (10,930,548)
................................. ------------
NET ASSETS-- 100% ................ $386,565,887
============
--------------------------------------------------------------------------------
OTHER INFORMATION
--------------------------------------------------------------------------------
The International Equity Fund invested in the following sectors at March 31,
2000:
PERCENTAGE (BASED ON
SECTOR TOTAL NET ASSETS)
-----------------------------------------------------------
Information Technology 17.78%
Finance 17.54%
Consumer Goods 16.23%
Industrial 15.27%
Telecommunication Services 12.64%
Materials 6.98%
Health Care 4.28%
Energy 3.71%
Utilities 3.39%
Cash and Other 2.18%
--------
100.00%
---------
---------
-----------------------------
See Notes to Schedule of Investments and Notes to Financial statements.
35
<PAGE>
EUROPE EQUITY FUND
--------------------------------------------------------------------------------
Q&A
MICHAEL J. SOLECKI IS THE PORTFOLIO MANAGER OF THE EUROPE EQUITY FUND AND HAS
SERVED THE FUND IN THAT CAPACITY SINCE ITS INCEPTION. MIKE ALSO SERVES AS
PORTFOLIO MANAGER OF THE GEEUROPE EQUITY FUND AND AS CO-PORTFOLIO MANAGER OF THE
GE GLOBAL EQUITY FUND. MIKE HAS MORE THAN 10 YEARS OF INVESTMENT EXPERIENCE AND
JOINED GEASSET MANAGEMENT IN 1990. HE IS CURRENTLY A VICE PRESIDENT OF GE ASSET
MANAGEMENT. MIKE IS A CHARTERED FINANCIAL ANALYST AND A MEMBER OF THE NEW YORK
SOCIETY OF SECURITY ANALYSTS. HE HOLDS A B.S. IN FINANCE FROM WESTERN NEW
ENGLAND COLLEGE AND AN M.B.A. FROM FORDHAM UNIVERSITY.
Q. HOW DID THE EUROPE EQUITY FUND PERFORM COMPARED TO ITS BENCHMARK FOR THE SIX
MONTHS ENDING MARCH 31, 2000?
A. The Europe Equity Fund had an outstanding six months ending March 31, 2000.
The Fund rose 47.16%, outperforming the MSCI Europe benchmark by 29.67%.
Q. WHAT WORLD EVENTS HAD A MAJOR IMPACT ON THE FINANCIAL MARKETS IN THE PAST SIX
MONTHS AND HOW DID THIS IMPACT THE FUND?
A. The recent six months have witnessed a strong performance within the European
technology, media and telecommunications sectors and our portfolio has
participated in the re-rating of many of Europe's technology leaders.
Q. WHY DID THE FUND OUTPERFORM ITS BENCHMARK FOR THE SIX MONTHS ENDED MARCH 31,
2000?
A. Excellent stock selection in France and Germany was the main driver of first
quarter performance, adding more than 700 basis points to the total return.
French holdings Lagardere and Thomson Multimedia along with German holdings
ProSieben Media and Epcos were among the top contributors to performance.
Q. WHICH STOCKS/SECTORS HAVE PERFORMED WELL? WHICH STOCKS/SECTORS HAVE YOU
LIKED?
A. Our positions in Thomson Multimedia, Epcos and Ericsson were some of our
strongest performance drivers. These three positions are focused on the
convergence of media and data technologies - a concept which is rapidly becoming
reality in Europe.
As we progressed through the 1st quarter of 2000, many TMT valuations began
to fully reflect their future growth potential and we selectively reduced our
positions. As a result, we increased our exposure in the "old economy" where we
believe there are substantial bottom-up opportunities in companies with low
valuations and strong growth catalysts. One such company is the UK based BAE
Systems -- formerly known as British Aerospace. BAE Systems is the world's 2nd
largest aerospace/defense company. The group has strong proprietary technologies
in the civil and military aerospace markets and a strong balance sheet that will
enable them to continue to participate in the global consolidation of the
sector.
Q. WHAT IS THE OUTLOOK FOR THE FUND GOING FORWARD?
A. We believe European markets continue to be well positioned from an economic
standpoint. The current environment of accelerating economic growth coupled with
low inflation creates a healthy backdrop for equities in Europe. With
unemployment beginning to decline and productivity on the rise we believe the
current environment may well continue.
36
<PAGE>
EUROPE EQUITY FUND
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
--------------------------------------------------------------------------------
[LINE GRAPH OMTITED]
EUROPE EQUITY FUND MSCI EUROPE
1/29/99 10000.00 10000.00
9460.00 9746.20
3/99 9620.00 9852.43
9910.00 10146.04
9390.00 9658.72
6/99 9700.00 9821.76
10150.00 9913.01
10280.00 10013.72
9/99 9970.00 9936.52
10220.00 10302.18
11210.00 10580.03
12/99 12907.30 11664.48
12927.47 10833.97
14964.40 11398.96
3/00 14671.97 11674.24
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
SIX ONE SINCE
MONTHS YEAR INCEPTION COMMENCEMENT
--------------------------------------------------------------------------------
Europe Equity Fund 47.16% 52.52% 38.69% 1/29/99
--------------------------------------------------------------------------------
MSCI Europe 17.49% 18.49% 14.15%
--------------------------------------------------------------------------------
INVESTMENT PROFILE
A mutual fund designed for
investors who seek long-term
growth of capital by investing
primarily in equity securities of
issuers located in developed
European countries.
--------------------------------------------------------------------------------
REGIONAL ALLOCATION AS OF MARCH 31, 2000
--------------------------------------------------------------------------------
[PIE CHART OMITTED]
DEVELOPED 92.3%
EMERGING 3.5%
CASH & OTHER 2.8%
OTHER (U.S.) 1.4%
--------------------------------------------------------------------------------
TOP TEN LARGEST HOLDINGS AT MARCH 31, 2000
--------------------------------------------------------------------------------
Epcos AG 3.71%
--------------------------------------------------------------------------------
Thomson Multimedia 3.34%
--------------------------------------------------------------------------------
Philips Electronics N.V. 3.32%
--------------------------------------------------------------------------------
Vodafone AirTouch PLC 3.02%
--------------------------------------------------------------------------------
Lagardere S.C.A. 2.97%
--------------------------------------------------------------------------------
Ericsson LM Telephone (Series B) 2.74%
--------------------------------------------------------------------------------
AXA-UAP 2.68%
--------------------------------------------------------------------------------
Cable & Wireless PLC 2.57%
--------------------------------------------------------------------------------
BAE Systems PLC 2.44%
--------------------------------------------------------------------------------
Total S.A. (Class B) 2.37%
--------------------------------------------------------------------------------
SEE NOTES TO PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
37
<PAGE>
GE EUROPE EQUITY FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
EUROPE EQUITY FUND
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- 95.8%
--------------------------------------------------------------------------------
DENMARK -- 0.4%
Tele Danmark AS (Series B)........ 740 $ 66,599
FINLAND -- 1.4%
Sampo Insurance Co. Ltd. (Series A) 3,688 141,258
Sonera Oyj........................ 657 44,855
Stora Enso Oyj.................... 2,258 24,216
210,329
FRANCE -- 25.2%
Aerospatiale Matra (Regd.)........ 4,779 91,431(a)
Alstom............................ 9,610 266,860
Aventis S.A....................... 5,520 302,341
AXA-UAP........................... 2,852 404,451
Banque Nationale de Paris......... 1,715 135,481
Cap Gemini S.A.................... 445 120,589
Carrefour S.A..................... 474 60,774
Coflexip S.A. ADR................. 522 28,579
Credit Lyonnais................... 2,337 87,610(a)
Imerys............................ 1,113 135,670
Lagardere S.C.A................... 5,521 448,571
Michelin CGDE (Regd.) (Class B)... 2,736 87,870
Rhodia S.A........................ 973 17,423
Schneider S.A..................... 1,949 124,480
STMicroelectronics N.V............ 578 106,265
Thomson Multimedia................ 5,331 505,365(a)
Total S.A. (Class B).............. 2,387 357,708
Transiciel S.A.................... 1,470 269,696
Vivendi........................... 2,185 252,116
3,803,280
GERMANY -- 13.1%
Bayerische Motoren Werke (BMW) AG 2,800 88,880
Dialog Semiconductor PLC.......... 497 39,024(a)
Epcos AG.......................... 4,258 560,622(a)
Fresenius Medical Care AG......... 2,439 181,933
HypoVereinsbank AG................ 326 20,212
Infineon Technologies AG.......... 491 26,822(a)
Metallgesellschaft AG............. 15,341 282,778
Muenchener Rueckversicherungs-
Gesellschaft AG (Regd.) ........ 674 209,751
Preussag AG....................... 2,305 105,921
Suess MicroTec AG................. 3,029 110,216(a)
Techem AG......................... 7,828 224,871(a)
Veba AG........................... 2,693 137,315
1,988,345
GREECE -- 2.8%
Antenna TV S.A. ADR............... 10,172 237,771(a)
Hellenic Telecommunication
Organization S.A. ADR .......... 6,782 98,339
Hellenic Telecommunication
Organization S.A. GDR .......... 3,340 95,007
431,117
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
IRELAND -- 3.7%
Bank of Ireland................... 42,180 $ 302,921
CRH PLC........................... 8,987 163,504
Irish Life & Permanent PLC........ 2,117 19,258
Jefferson SmurFit Group PLC....... 33,378 77,586
563,269
ITALY -- 3.2%
Banca Popolare di Lodi............ 9,803 121,278
Saipem............................ 31,132 152,034
Telecom Italia S.p.A.............. 14,317 213,864
487,176
NETHERLANDS -- 12.2%
Fox Kids Europe N.V............... 9,529 200,739(a)
Getronics N.V..................... 1,298 99,308
IFCO Systems N.V.................. 2,650 62,803(a)
IHC Caland N.V.................... 4,185 179,128
ING Groep N.V..................... 5,147 278,954
Ispat International N.V.
(Regd.) (Class A) 2,689 39,999
Koninklijke Ahold N.V............. 9,979 259,811
Koninklijke KPN N.V............... 1,680 192,479
Philips Electronics N.V........... 2,984 501,747
Vendex KBB N.V.................... 2,123 34,965
1,849,933
POLAND -- 0.7%
Telekomunikacja Polska
S.A. GDR (Series A) ........... 10,735 100,372(a,b)
PORTUGAL -- 3.0%
PT MULTIMEDIA - Servicos
de Telecomunicacoes e
Multimedia SGPS S.A. ........... 2,484 221,205(a)
Telecel-Comunicacoes Pessoais S.A. 12,018 234,760(a)
455,965
SPAIN -- 2.1%
Sol Melia S.A..................... 9,408 118,013(a)
Telefonica S.A.................... 7,668 193,842(a)
311,855
SWEDEN -- 3.7%
Autoliv Inc. SDR.................. 5,098 141,217
Ericsson LM Telephone (Series B).. 4,704 413,808
555,025
SWITZERLAND -- 1.9%
ABB Ltd........................... 1,712 196,705
Credit Suisse AG.................. 416 82,832
Novartis AG (Regd.)............... 1 1,368
280,905
-----------------------
See Notes to Schedule of Investments and Notes to Financial statements.
38
<PAGE>
GE EUROPE EQUITY FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
UNITED KINGDOM -- 21.0%
Bank of Scotland.................. 12,728 $ 145,801
BAE Systems PLC................... 66,116 368,422
British Energy PLC................ 3,689 11,365(a)
Cable & Wireless PLC.............. 20,677 388,125
Cobham PLC........................ 1,923 28,473
Commercial Union PLC.............. 13,706 190,064
Corus Group PLC................... 123,093 197,446
Granada Group PLC................. 30,330 324,981
Invensys PLC...................... 50,700 225,813
Jazztel PLC ADR................... 1,701 137,675(a)
Mayflower Corp. PLC............... 15,597 45,442
Nycomed Amersham PLC.............. 12,614 102,422
Prudential PLC.................... 2,116 32,105
Railtrack Group PLC............... 896 10,414
Reed International PLC............ 21,848 159,312
Royal & Sun Alliance
Insurance Group PLC 40,373 250,684
Somerfield PLC.................... 43,705 38,618
Standard Chartered PLC............ 1,803 24,113
Tesco PLC......................... 4,989 16,680
Thus PLC.......................... 3,127 23,897(a)
Vodafone AirTouch PLC............. 81,818 455,918
3,177,770
UNITED STATES -- 1.4%
Global TeleSystems Group Inc...... 6,522 133,701(a)
Infonet Services Corp. (Class B).. 2,704 61,178(a)
UnitedGlobalCom Inc............... 149 11,184(a)
206,063
TOTAL COMMON STOCK
(COST $11,898,920) ............. 14,488,003
--------------------------------------------------------------------------------
PREFERRED STOCK -- 1.4%
--------------------------------------------------------------------------------
ProSieben Media AG
(COST $83,197) ................. 1,757 211,984
TOTAL INVESTMENTS IN SECURITIES
(COST $11,982,117) .............. 14,699,987
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 2.7%
--------------------------------------------------------------------------------
GEI Short-Term Investment Fund
(COST $403,950) ................ 403,950 403,950
OTHER ASSETS AND LIABILITIES,
NET 0.1% ....................... 10,631
-----------
NET ASSETS-- 100% ................ $15,114,568
===========
--------------------------------------------------------------------------------
OTHER INFORMATION
--------------------------------------------------------------------------------
The Europe Equity Fund invested in the following sectors at March 31, 2000:
PERCENTAGE (BASED ON
SECTOR TOTAL NET ASSETS)
--------------------------------------------------------------------------------
Consumer Goods 22.79%
--------------------------------------------------------------------------------
Industrials 16.75%
--------------------------------------------------------------------------------
Finance 16.06%
--------------------------------------------------------------------------------
Telecommunication Services 15.47%
--------------------------------------------------------------------------------
Information Technology 9.75%
--------------------------------------------------------------------------------
Materials 5.50%
--------------------------------------------------------------------------------
Health Care 3.92%
--------------------------------------------------------------------------------
Cash and Other 3.55%
--------------------------------------------------------------------------------
Energy 3.53%
--------------------------------------------------------------------------------
Utilities 2.68%
--------
100.00%
--------
--------
----------------------------
See Notes to Schedule of Investments and Notes to Financial statements.
39
<PAGE>
EMERGING MARKETS FUND
--------------------------------------------------------------------------------
Q&A
RALPH LAYMAN LEADS A TEAM OF PORTFOLIO MANAGERS FOR THE EMERGING MARKETS FUND.
REFER TO PAGE 31 FOR HIS BIOGRAPHICAL DETAILS.
Q. WHY DID THE FUND OUTPERFORM ITS BENCHMARK? WHICH INVESTMENTS STAND OUT?
A. Stock selection explains our outperformance. As a group, the Indian software
names continue to outpace the Index. Companies such as Wipro and Satyam are
becoming the favored IT service vendors for multinationals, such as General
Electric. Their fundamentals remain extremely solid, although valuation
concerns led us to pare back our exposure somewhat in the first quarter.
Q. WHICH STOCKS/SECTORS HAVE PERFORMED WELL?
A. Elsewhere, technology, media, and telecom ("TMT") names advanced, a trend we
witnessed globally in the first quarter. Stocks that performed well include
Dogan Yayin Holdings, Turkey's leading media group, and Brazil's Telesp
Cellular, a leading mobile phone provider.
Q. WHAT WERE THE MAJOR BUYS AND SELLS FOR THE QUARTER AND WHY?
A. During the quarter, we trimmed our holdings in the popular TMT sectors. We
sold our positions in Tele Sudeste Cellular, a Brazilian mobile phone
operator, and in Hitron Technologies, a Taiwanese telecom equipment firm. We
have moved money into some of the neglected sectors of the market.
Specifically, two companies in the paper industry, Sappi of South Africa and
Aracruz of Brazil, appear interesting. Both should have good earnings this
year, and we expect higher paper prices going forward.
Q. WHAT IS THE OUTLOOK FOR THE EMERGING MARKETS FUND AND HOW IS THE FUND
POSITIONED GOING FORWARD?
A. The emerging markets remain attractive. We are impressed by the quality of
the companies we have found in India, Taiwan and Israel. These firms are
growing rapidly. We expect this trend to continue as multinationals
outsource more of their production to the developing world. This movement
should provide stockpickers like ourselves with many attractive investment
opportunities in the future.
Among the regions, we have upped our weighting in Taiwan, having purchased
some shares during the pre-election nervousness. We expect the Taiwanese
electronics firms to report strong earnings this quarter, and we are
encouraged by the market's surprisingly low correlation to Nasdaq. These
changes bring our Asian weighting closer to a neutral position.
In Emerging Europe, we have maintained our overweight stance. The region
continues to converge with Western Europe, a trend that could provide for
falling interest rates, more stable currencies, and higher equity
valuations.
The Fund remains underweight in Latin America, although it is roughly
neutral Brazil and Mexico. We remain concerned about the impact of higher
U.S. interest rates on the region. We would also prefer to see higher growth
companies list their shares on the local exchanges.
40
<PAGE>
EMERGING MARKETS FUND
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
--------------------------------------------------------------------------------
[LINE GRAPH OMITTED]
EMERGING MARKETS FUND MSCI EMF
11/25/97 10000.00 10000.00
12/97 10215.36 10241.00
3/98 11068.31 10875.27
6/98 9392.51 8308.96
9/98 6803.55 6480.34
12/98 8159.95 7646.02
3/99 9467.96 8596.95
6/99 11258.92 10694.33
9/99 11540.64 10143.17
12/99 16996.08 12723.52
3/00 18546.67 13032.24
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
SIX ONE SINCE
MONTHS YEAR INCEPTION COMMENCEMENT
--------------------------------------------------------------------------------
Emerging Markets Fund 60.71% 95.89% 30.07% 11/25/97
--------------------------------------------------------------------------------
MSCI EMF 28.48% 51.59% 11.94%
--------------------------------------------------------------------------------
INVESTMENT PROFILE
A mutual fund designed for investors
who seek long-term growth of capital
by investing primarily in equity
securities of issuers that are
located in emerging markets countries.
--------------------------------------------------------------------------------
REGIONAL ALLOCATION AS OF MARCH 31, 2000
--------------------------------------------------------------------------------
[PIE CHART OMITTED]
ASIA 43.5%
LATIN AMERICA 22.8%
MIDDLE EAST AND AFRICA 17.2%
EUROPE 15.8%
CASH & OTHER 0.7%
--------------------------------------------------------------------------------
TOP TEN LARGEST HOLDINGS AT MARCH 31, 2000
--------------------------------------------------------------------------------
Satyam Computer Services Ltd. 4.95%
--------------------------------------------------------------------------------
Mastek Ltd. 3.25%
--------------------------------------------------------------------------------
Taiwan Semiconductor Manufacturing Co. 3.04%
--------------------------------------------------------------------------------
Datacraft Asia Ltd. 2.53%
--------------------------------------------------------------------------------
Telecomunicacoes Brasileiras S.A. ADR 2.21%
--------------------------------------------------------------------------------
Pentamedia Graphics Ltd. 1.99%
--------------------------------------------------------------------------------
Telefonos de Mexico S.A. ADR 1.61%
--------------------------------------------------------------------------------
Compal Electronics Inc. 1.52%
--------------------------------------------------------------------------------
Grupo Televisa S.A. GDR 1.44%
--------------------------------------------------------------------------------
Wipro Ltd. 1.43%
--------------------------------------------------------------------------------
SEE NOTES TO PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
41
<PAGE>
GE EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
EMERGING MARKETS FUND
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- 93.1%
--------------------------------------------------------------------------------
ARGENTINA -- 0.7%
El Sitio Inc...................... 1,593 $ 34,150(a)
Impsat Fiber Networks Inc......... 1,173 32,844(a)
Telecom Argentina S.A. ADR........ 955 33,186
100,180
BRAZIL -- 2.1%
Aracruz Celulose S.A. ADR......... 3,220 68,224
Companhia Cervejaria Brahma ADR.. 4,143 67,324
Companhia de Saneamento
Basico de Estado de Sao Paulo .. 483,209 48,973
Companhia Siderurgica Nacional ADR 1 35
Petroleo Brasiliero S.A. ADR...... 343 9,132
Ultrapar Participacoes S.A. ADR... 2,574 28,314(a)
Uniao de Bancos Brasilieros
S.A. GDR ...................... 3,115 98,901
320,903
CANADA -- 1.0%
Global Light Telecommunications Inc. 7,079 145,120(a)
CHILE -- 0.2%
Companhia de Telecomunicaciones
de Chile S.A. ADR .............. 826 18,791
Enersis S.A. ADR.................. 739 15,011
33,802
CHINA -- 1.4%
Brilliance China Automotive
Holdings Ltd. .................. 9,852 26,477
China Telecom (Hong Kong)
Ltd. ADR ....................... 586 103,869(a)
Guangdong Kelon Electrical
Holdings Co. Ltd. .............. 2,000 1,079
Huaneng Power International
Inc. ADR ....................... 4,799 38,392
Huaneng Power International
Inc. (Class H) ................. 172,000 33,134
202,951
CROATIA -- 1.2%
Pliva D D GDR (Regd.)............. 6,401 97,615
Zagrebacka Banka GDR.............. 4,668 80,523(b)
178,138
CZECH REPUBLIC -- 0.4%
Ceske Radiokomunikace GDR......... 1,097 55,947(a,b)
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
DOMINICAN REPUBLIC -- 0.7%
TRICOM S.A. ADR................... 4,133 $ 99,192(a)
EGYPT -- 1.9%
Al-Ahram Beverage Co. S.A.E. GDR. 3,324 59,499(a)
EFG-Hermes Holding S.A.E. GDR.... 4,651 17,907(b)
Egyptian Company for
Mobile Services ................ 4,060 196,418(a)
Olympic Group Financial
Investment Co. ................. 8,753 14,898
288,722
ESTONIA -- 0.8%
AS Eesti Telekom GDR.............. 4,486 122,244
GHANA -- 0.0%
Home Finance Co................... 18,516 3,481
GREECE -- 4.5%
A.G. Petzetakis S.A............... 6,348 56,286(a)
Alfa Beta Vassilopoulos S.A. (Regd.) 3,635 84,736
Alpha Credit Bank (Regd.)......... 940 63,183
Attica Enterprises S.A............ 2,021 25,695
Delta Informatics S.A. (Regd.).... 6,370 140,839
Hellenic Telecommunication
Organization S.A. ADR .......... 3,297 47,807
Intrasoft S.A..................... 1,815 49,577
Spyrou Agricultural Products...... 7,280 73,920(a)
STET Hellas Telecommunication
S.A. ADR ....................... 4,847 139,351(a)
681,394
HONG KONG -- 0.4%
Founder Holdings Ltd.............. 8,000 7,911(a)
TCL International Holdings Ltd.... 79,011 59,361(a)
67,272
HUNGARY -- 1.0%
BorsodChem RT..................... 796 30,955
Magyar Tavkozlesi RT ADR.......... 1,027 45,830
OTP Bank RT....................... 651 35,139
Synergon Information Systems GDR. 2,627 30,867(a,b)
142,791
INDIA -- 18.6%
Aptech Ltd........................ 2,866 122,134
Aptech Ltd........................ 2,194 93,496(a)
Bharat Heavy Electricals Ltd...... 761 2,182(a)
BSES Ltd. GDR..................... 1,450 7,908(a)
Cipla Ltd......................... 650 16,711(a)
Cipla Ltd......................... 1,300 33,423
Dr. Reddy's Laboratories Ltd...... 1,200 44,356
Global Tele-Systems Ltd. ADR...... 1,490 75,612
----------------------------
See Notes to Schedule of Investments and Notes to Financial statements.
42
<PAGE>
GE EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
HDFC Bank Ltd..................... 1,310 $ 11,460
Himachal Futuristic
Communications Ltd. ............ 2,000 77,654(a)
Leading Edge Systems Ltd.......... 400 18,314
Mastek Ltd........................ 2,600 254,192
Mastek Ltd........................ 2,400 234,638(a)
NIIT Ltd.......................... 3,870 182,050(h)
Pentamedia Graphics Ltd........... 11,300 299,644
Satyam Computer Services Ltd...... 3,864 392,489(a)
Satyam Computer Services Ltd...... 3,464 351,858
Sriven Multi-Tech Ltd............. 8,000 56,450(a)
Sun Pharmaceutical Industries Ltd. 2,089 30,664
Sun Pharmaceutical Industries Ltd. 4,178 61,329(a)
Tata Infotech Ltd................. 225 2,078
Wipro Ltd......................... 1,702 214,434
Zee Telefilms Ltd................. 9,061 212,393(a)
2,795,469
INDONESIA -- 0.4%
PT Astra International Inc........ 32,500 15,563(a)
PT Gudang Garam................... 3,500 6,681
PT Hanjaya Mandala Sampoerna...... 15,500 25,799(a)
PT International Nickel........... 13,000 12,451(a)
60,494
ISRAEL -- 10.3%
Advanced Vision Technology Ltd.... 789 15,639(a)
AudioCodes Ltd.................... 670 67,251(a)
BreezeCom Ltd..................... 200 7,475(a)
Comverse Technology Inc........... 1,074 202,986(a,e)
DSP Group Inc..................... 1,230 81,180(a)
e-SIM Ltd......................... 2,200 49,500(a)
ECI Telecommunications Ltd........ 3,277 102,816(e)
Elbit Ltd......................... 4,376 56,888(a)
Fundtech Ltd...................... 6,363 165,438(a)
Galileo Technology Ltd............ 3,823 69,770(a)
Magic Software Enterprises Ltd.... 3,505 66,595(a)
NICE Systems Ltd. ADR............. 537 38,261(a)
Orbotech Ltd...................... 2,087 177,395(a)
Orckit Communications Ltd......... 1,389 93,063(a)
Partner Communications Co. Ltd. ADR 2,800 46,550(a)
RT-SET Real Time Synthesized
Entertainment Technology Ltd. . 1,218 34,056(a)
Sapiens International
Corp. N.V.. ................... 12,246 150,014(a)
Teva Pharmaceutical
Industries Ltd. ADR ........... 1,946 72,610
TTI Team Telecom
International Ltd. ............ 1,474 48,642(a)
1,546,129
KAZAKHSTAN -- 0.6%
Efes Sinai Yatirim Holding A.S.... 3,800,000 54,846(a)
Kazkommertsbank GDR............... 3,994 42,049(a)
96,895
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
MEXICO -- 11.3%
Alfa S.A. (Series A).............. 10,250 $ 39,187
Cemex S.A. de C.V. ADR............ 1,756 39,730(a)
Cemex S.A. de C.V................. 4 18
Coca-Cola Femsa S.A. de C.V. ADR. 2,297 42,638
Consorcio Ara S.A. de C.V......... 16,067 23,533(a)
Controladora Comercial
Mexicana S.A. de C.V. ......... 34,451 46,823
Desc S.A. de C.V. (Series B)...... 34,657 25,306
Desc S.A. de C.V. ADR............. 1,362 20,430
Fomento Economico
Mexicano S.A. de C.V. ADR 1,111 49,995
Geo S.A. de C.V................... 40,032 104,763(a)
Grupo Carso S.A. de C.V. ADR...... 3,305 25,415(a)
Grupo Continental S.A............. 50,843 62,969
Grupo Elektra S.A. de C.V. GDR.... 3,983 50,783
Grupo Financiero Banamex
Accival S.A. de C.V. (Class B) 32,015 146,534(a)
Grupo Financiero Bancomer
S.A. ADR (Series C) ........... 13,716 155,402(b)
Grupo Financiero Banorte
S.A. de C.V. .................. 69,007 104,490(a)
Grupo Industrial Bimbo S.A. de C.V. 10,524 17,567
Grupo Iusacell S.A. ADR........... 2,725 55,181(a)
Grupo Televisa S.A. GDR........... 3,178 216,104(a)
Industrias Penoles S.A............ 6,200 14,990
Pepsi-Gemex S.A. GDR.............. 2,389 12,990(a)
Telefonos de Mexico S.A. ADR...... 3,619 242,473
Tubos de Acero de Mexico S.A. ADR 2,956 48,404
TV Azteca S.A. de C.V. ADR........ 4,571 67,422
Wal-Mart de Mexico S.A. de C.V.... 37,007 87,680(a)
1,700,827
NETHERLANDS -- 0.5%
Indigo N.V........................ 12,021 81,142(a)
PANAMA -- 0.2%
Banco Latinoamericano de
Exportaciones, S.A. (Class E) .... 694 18,391
Panamerican Beverages Inc. (Class A) 659 11,615
30,006
PHILIPPINES -- 0.9%
Benpres Holdings Corp............. 118,300 19,837(a)
Metropolitan Bank & Trust Co...... 7,480 40,354
Philippine Long Distance
Telephone Co. .................. 1,954 42,736
San Miguel Corp. S.A.............. 16,170 19,058
SPI Technologies Inc.............. 21,780 6,219
128,204
POLAND -- 2.5%
Bank Slaski S.A................... 282 18,711
BRE Bank S.A...................... 445 16,057
----------------------------
See Notes to Schedule of Investments and Notes to Financial statements.
43
<PAGE>
GE EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Elektrim Spolka Akcyjna S.A....... 5,792 $ 84,156(a)
Europejki Fundusz Leasingowy GDR. 1,125 20,531(a,b)
Netia Holdings S.A. ADR........... 634 22,190(a)
Powszechny Bank Kredytowy S.A..... 939 22,739
Prokom Software S.A. GDR.......... 3,553 100,372(b)
Telekomunikacja Polska
S.A. GDR (Series A) ............ 9,992 93,425(a,b)
378,181
RUSSIA -- 0.7%
LUKoil Holding ADR................ 893 52,687
Premier Telesports Ltd............ 1,156 7,195(a)
Sun Interbrew Ltd. GDR (Class B).. 3,894 26,474(a)
Sun Interbrew Ltd. GDR (Class A).. 3,894 11,682(a)
98,038
SINGAPORE -- 2.5%
Datacraft Asia Ltd................ 40,689 380,442
SOUTH AFRICA -- 5.0%
Dimension Data Holdings Ltd....... 14,926 133,148(a)
Johnnies Industrial Corp. Ltd..... 11,088 169,658
M-Cell Ltd........................ 15,514 85,457
Nedcor Investment Bank Holdings... 2,442 1,214(a)
Nedcor Ltd........................ 4,828 98,400
Network Healthcare Holdings Ltd.. 234,808 37,365
Sappi Ltd......................... 13,529 104,746
Softline Ltd...................... 67,037 86,162(a)
The Education Investment
Corp. Ltd. .................... 57,145 33,226
749,376
SOUTH KOREA -- 5.7%
Dae Duck Electronics Co........... 9,496 107,397
Kookmin Bank...................... 5,020 50,870
Korea Electric Power Corp......... 1,270 36,195
Korea Telecom Corp. ADR........... 390 17,062
Korea Telecom Corp................ 1,250 110,835
Medison Co. Ltd................... 7,420 96,337
Mirae Co. ADR..................... 1,500 16,242(a)
Mirae Co.......................... 15,630 87,678
Pohang Iron & Steel Co. Ltd....... 1,330 130,720
S1 Corp........................... 2,613 39,954
Samsung Electronics............... 489 148,215
Sindo Ricoh Co.................... 292 7,992
Youngone Corp..................... 11,450 13,986
863,483
TAIWAN -- 12.7%
Asustek Computer Inc.............. 7,605 95,219
Chroma Ate Inc.................... 14,800 54,472(a)
Compal Electronics Inc............ 54,901 228,228
Compeq Manufacturing Co. Ltd...... 14,700 96,615(a)
D-Link Corp....................... 22,000 95,432
Far Eastern Textile Ltd........... 103,130 213,513
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Hitron Technology Inc............. 14,000 $ 128,360(a)
Hon Hai Precision Industry........ 12,800 148,485(a)
Nien Hsing Textile Corp. Ltd...... 21,000 48,998
Premier Camera Taiwan Ltd......... 4,000 16,563(a)
Procomp Informatics Co. Ltd....... 5,000 48,308(a)
Ritek Inc......................... 14,008 128,894
Ritek Inc. GDR.................... 1,766 31,346(a,b)
Synnex Technology International
Corp. GDR 1,221 38,156(b)
Taiwan Semiconductor
Manufacturing Co. 67,922 457,575(a)
Yageo Corp........................ 55,300 81,414
1,911,578
THAILAND -- 0.3%
Banpu Public Co. Ltd. (foreign)... 8,800 5,642
Hana Microelectronics
Public Co. Ltd. (foreign) 1,700 15,193(a)
Siam Cement Public
Co. Ltd. (foreign) 1,000 24,326(a)
45,161
TURKEY -- 4.2%
Aksigorta A.S..................... 2,550,000 51,959
Dogan Yayin Holding............... 7,390,000 178,813(a)
Enka Holding Yatirim A.S.......... 144,950 36,304
Migros Turk T.A.S................. 108,647 59,957
Tansas A.S........................ 664,560 143,875
Turk Ekonomi Bankasi A.S GDR...... 3,473 42,544(a,b)
Turkiye Garanti Bankasi A.S....... 5,958,296 75,879
Yapi ve Kredi Bankasi A.S......... 1,790,328 47,880
637,211
UNITED STATES -- 0.3%
Prodigy Communications Corp....... 2,240 33,740(a)
StarMedia Network Inc............. 234 7,035(a)
40,775
VENEZUELA -- 0.1%
Compania Anonima Nacional
Telefonos de Venezuela ADR ..... 752 21,808
TOTAL COMMON STOCK
(COST $8,054,336) ............... 14,007,356
--------------------------------------------------------------------------------
PREFERRED STOCK -- 7.5%
--------------------------------------------------------------------------------
Celular CRT Participaceos S.A..... 133,600 61,372(a)
Companhia Brasileira de
Distribuicao Grupo Pao
de Acucar GDR .................. 507,312 18,061
Companhia Paranaense
de Energia-Copel ADR ...........10,442,786 88,447(a)
Companhia Riograndense
de Telecomunicacoes ............ 127 58
Companhia Siderurgica
de Tubarao. .................... 3,600,000 56,434(a)
----------------------------
See Notes to Schedule of Investments and Notes to Financial statements.
44
<PAGE>
GE EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Companhia Vale Do Rio Doce........ 1,800 $ 49,096(a)
Eletropaulo Metropolitana......... 400,000 29,997
Embraer - Empresa Brasileira
de Aeronautica S.A. ........... 8,202 37,913
Embratel Participacoes
S.A. ADR.. .................... 1,280 32,800
Globo Cabo S.A. ADR............... 651 12,206(a)
Petroleo Brasiliero S.A........... 530,000 143,646
Tele Centro Sul Participacoes
S.A. ADR ...................... 737 59,697
Tele Norte Leste Participacoes
S.A. ADR ...................... 3,044 81,047
Telecomunicacoes Brasileiras
S.A. ADR ...................... 2,219 332,157(a)
Telecomunicacoes
do Parana S.A... .............. 43,366 18,676
Telecomunicacoes
do Rio de Janeiro S.A. ........ 564,019 17,570(a)
Telesp - Telecomunicacoes
de Sao Paulo S.A. ............. 1,178,399 34,645
Telesp Celular Participacoes S.A.. 2,309,971 52,394
Telesp Celular Participacoes
S.A. ADR ...................... 110 6,235
TOTAL PREFERRED STOCK
(COST $687,602) ............... 1,132,451
--------------------------------------------------------------------------------
WARRANTS -- 0.0%
--------------------------------------------------------------------------------
Banpu Public Co. Ltd.
(Regd.), 01/14/03 ............. 4,400 675(a)
Cemex S.A. de C.V. ADR, 12/13/02. 109 381(a)
TOTAL WARRANTS
(COST $191) ....... ............ 1,056
TOTAL INVESTMENTS IN SECURITIES
(COST $8,742,129) .............. 15,140,863
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 0.8%
--------------------------------------------------------------------------------
GEI Short-Term Investment Fund
(COST $112,194) ................ 112,194 112,194
OTHER ASSETS AND LIABILITIES,
NET (1.4)% .................... (205,877)
-----------
NET ASSETS-- 100% ................ $15,047,180
===========
--------------------------------------------------------------------------------
OTHER INFORMATION
--------------------------------------------------------------------------------
The Emerging Markets Fund invested in the following sectors at March 31, 2000:
PERCENTAGE (BASED ON
SECTOR TOTAL NET ASSETS)
------------------------------------------------------------
Information Technology 45.46%
Telecommunication Services 16.08%
Consumer Goods 14.48%
Finance 10.48%
Materials 4.27%
Health Care 3.26%
Industrials 3.05%
Utilities 2.17%
Energy 1.37%
Cash and Other (0.62)%
--------
100.00%
--------
--------
----------------------------
See Notes to Schedule of Investments and Notes to Financial Statements.
45
<PAGE>
STRATEGIC INVESTMENT FUND
--------------------------------------------------------------------------------
Q&A
THE STRATEGIC INVESTMENT FUND IS MANAGED JOINTLY BY DAVID CARLSON, RALPH LAYMAN
AND BOB MACDOUGALL. THE FUND FOLLOWS AN ASSET ALLOCATION STRATEGY AND EACH
PORTFOLIO MANAGER IS RESPONSIBLE FOR INVESTMENTS WITHIN HIS AREA OF EXPERTISE:
DAVE MANAGES THE DOMESTIC EQUITY INVESTMENTS IN THE PORTFOLIO (PLEASE REFER TO
PAGE 14 FOR DAVE'S BIOGRAPHICAL DETAILS), RALPH MANAGES THE INTERNATIONAL EQUITY
HOLDINGS WITHIN THE PORTFOLIO (PLEASE REFER TO PAGE 31 FOR RALPH'S BIOGRAPHICAL
DETAILS) AND BOB MANAGES THE FIXED INCOME RELATED INVESTMENTS IN THE PORTFOLIO
(PLEASE REFER TO PAGE 50 FOR BOB'S BIOGRAPHICAL DETAILS).
Q. HOW DID THE STRATEGIC INVESTMENT FUND PERFORM COMPARED TO ITS BENCHMARK FOR
THE PERIOD ENDED MARCH 31, 2000?
A. The Strategic Investment Fund posted a return of 10.14% for the period ended
March 31, 2000. The Fund's inception date was October 31, 1999. The Fund
invests primarily in a combination of equity and debt securities. The results
of the Fund, therefore, should be compared to both the S&P 500 Index which
returned 10.73% and the Lehman Brothers Aggregate Bond Index which returned
1.71%.
Q. WHY DID THE FUND OUTPERFORM ITS BENCHMARK FOR THE SEMI-ANNUAL PERIOD ENDED
MARCH 31, 2000?
A. The Fund's outperformance was driven by asset allocation and strong
performance within each of the asset classes. The international equity
markets were strong during this period and the Fund's performance in this
asset class was very strong relative to the respective benchmark. The
international portion had a return in excess of 23%, exceeding the MSCI EAFE
Index by 20%. Similarly, the U.S. equity portion of the Fund returned in
excess of 12%, exceeding the S&P 500 Index. The fixed income markets were
challenging during this time period due to interest rate increases however
bonds managed to return a positive 1.71%. Our allocation in international
stocks sets us apart from many other balanced funds, which only concentrate
on the U.S. financial markets. Please read the commentary on the U.S. Equity
Fund, the International Equity Fund and the Income Fund for a more detailed
description of the individual asset classes.
Q. HOW HAS THE VOLATILITY IN THE U.S. EQUITY MARKETS IMPACTED THE FUND?
A. Over the past six months the U.S. equity markets have been particularly
volatile and narrowly focused on technology. The S&P 500 had gains of 15% for
the quarter ended December 31, 1999 following a decline of 6.2% in the
quarter ended September, 1999. For the quarter ended March 31, 2000, the S&P
500 gained 2.5%. Despite an environment in the U.S. of robust economic
growth, low inflation, solid corporate earnings, modestly higher interest
rates, and declining oil prices, the markets behaved much like a roller
coaster. This is evident in the disparate returns of the major averages for
the quarter ended March 31, 2000 as the DJIA was down 4.8%, the S&P 500 up
2.5%, and the NASDAQ up 12.4%. The international markets have behaved much
the same way with areas like technology, telecom, and media garnering
investor's attention.
In terms of the Fund, we continue to own those companies that have solid
earnings growth. We view price swings in the market as opportunities to scale
buy or sell those stocks that become respectively undervalued or overvalued
relative to the market and to their peer group. Our focus on security
selection across asset classes will continue to provide the Fund with
high-quality companies that are reasonably valued. With the Fund broadly
diversified, we believe it is well positioned for the volatility we expect
going forward.
Q. WHAT ARE THE CURRENT WEIGHTINGS OF THE VARIOUS ASSET CLASSES AND HOW HAVE
THEY CHANGED OVER THE PAST SIX MONTHS?
A. Currently, the Fund's asset allocation mix reflects approximately 44% of the
asset in U.S. equities, 16% in international equities, 38% in fixed income,
and 2% in cash. The weightings are set by GE Asset Management's Asset
Allocation Committee which meets regularly to discuss any changes to the
policy. The target weightings have shifted marginally toward international
equities as our Committee believes there are compelling values in the
international markets relative to the U.S. equity markets. Overall, the total
equity allocation is 60% and the fixed income allocation is 38%.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. The returns for the Fund will continue to reflect the strong demand for
equities in both the U.S. and international markets. The U.S. economy's
strong underpinnings are encouraging for the long term. Despite the Federal
Reserve's commitment to containing any inflationary pressures through rate
increases, we believe companies are executing their business plans and should
produce healthy earnings over the next few quarters. The U.S. market and
consequently the international markets will continue to be volatile although
this should be beneficial as speculative excesses are eliminated from the
system. The fixed income market may experience some relief as the market
anticipates only two more rate increases over the next quarter. In total, the
Federal Reserve has increased rates five times since June of 1999. If the Fed
accomplishes its goal of a "gradual adjustment to a more balanced
non-inflationary growth" scenario over the near term then the fixed income
markets may benefit as worries over rate increases subside. We continue to
believe that a well balanced investment approach will benefit investors over
the long term.
46
<PAGE>
STRATEGIC INVESTMENT FUND
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
--------------------------------------------------------------------------------
[LINE GRAPH OMITTED]
STRATEGIC INVESTMENT FUND S&P 500 LB AGGREGATE COMPOSITE
10/31/99 10000.00 10000.00 10000.00 10000.00
11/99 10150.00 10203.00 9999.00 10121.40
12/99 10651.90 10803.96 9951.01 10459.66
1/00 10450.92 10259.55 9918.17 10129.61
2/00 10420.77 10073.85 10038.18 10068.63
3/00 11013.66 11073.48 10170.68 10405.18
--------------------------------------------------------------------------------
AVERAGE TOTAL RETURN FOR THE PERIOD ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
SINCE
INCEPTION COMMENCEMENT
--------------------------------------------------------------------------------
Strategic Investment Fund 10.14% 10/31/99
--------------------------------------------------------------------------------
S&P 500 10.73%
--------------------------------------------------------------------------------
LB Aggregate 1.71%
--------------------------------------------------------------------------------
Composite 4.05%
--------------------------------------------------------------------------------
INVESTMENT PROFILE
A mutual fund designed for investors
who seek to maximize total return by
investing primarily in a combination
of equity securities and investment
grade debt securities.
--------------------------------------------------------------------------------
REGIONAL ALLOCATION AS OF MARCH 31, 2000
--------------------------------------------------------------------------------
[PIE CHART OMITTED]
DOMESTIC EQUITY 44.3%
BONDS AND NOTES 37.5%
FOREIGN EQUITY 16.0%
CASH & OTHER 2.2%
--------------------------------------------------------------------------------
TOP TEN LARGEST HOLDINGS AT MARCH 31, 2000
--------------------------------------------------------------------------------
U.S. Treasury Notes 5.875%, 11/15/04 22.90%
--------------------------------------------------------------------------------
U.S. Treasury Notes 6.00%, 08/15/09 14.61%
--------------------------------------------------------------------------------
Citigroup Inc. 2.61%
--------------------------------------------------------------------------------
AT&T Corp. - Liberty Media Group (Class A) 2.06%
--------------------------------------------------------------------------------
NTL Inc. 1.80%
--------------------------------------------------------------------------------
Intel Corp. 1.76%
--------------------------------------------------------------------------------
First Data Corp. 1.75%
--------------------------------------------------------------------------------
Dover Corp. 1.51%
--------------------------------------------------------------------------------
Cisco Systems Inc. 1.49%
--------------------------------------------------------------------------------
Vodafone AirTouch PLC 1.44%
--------------------------------------------------------------------------------
SEE NOTES TO PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
47
<PAGE>
GE STRATEGIC INVESTMENT FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
DOMESTIC EQUITY -- 44.3%
BASIC MATERIALS -- 0.1%
Airgas Inc........................ 621 $ 5,162(a)
CAPITAL GOODS -- 4.6%
Dover Corp........................ 2,667 127,682
Emerson Electric Co............... 235 12,426
Honeywell International Inc....... 1,065 56,112
Hubbell Inc. (Class B)............ 812 22,228
Molex Inc. (Class A).............. 2,450 108,719
Textron Inc....................... 194 11,810
United Technologies Corp.......... 239 15,102
Waste Management Inc.............. 2,257 30,893
384,972
CONSUMER - CYCLICAL -- 7.8%
AT&T Corp. - Liberty Media
Group (Class A) 2,935 173,899(a)
Carnival Corp. (Class A).......... 937 23,249
Catalina Marketing Corp........... 824 83,430(a)
Comcast Corp. (Class A)........... 2,090 90,654
Gannett Co. Inc................... 281 19,775
Harman International
Industries Inc. ................ 124 7,440
Interpublic Group Cos. Inc........ 1,174 55,471
NTL Inc........................... 1,637 151,934(a)
The Walt Disney Co................ 1,090 45,099
Time Warner Inc................... 113 11,300
662,251
CONSUMER - STABLE -- 1.5%
Anheuser Busch Cos. Inc........... 90 5,603
Avon Products Inc................. 553 16,072
Colgate-Palmolive Co.............. 289 16,292
Energizer Holdings Inc............ 124 2,875(a)
Gillette Co....................... 576 21,708
Pepsico Inc....................... 1,219 42,132
Philip Morris Cos. Inc............ 907 19,160
123,842
ENERGY -- 3.2%
Anadarko Petroleum Corp........... 666 25,766
Baker Hughes Inc.................. 1,151 34,818
Exxon Mobil Corp.................. 377 29,335
Nabors Industries Inc............. 564 21,890(a)
Royal Dutch Petroleum Co. ADR..... 903 51,979
Schlumberger Ltd.................. 1,070 81,855
Transocean Sedco Forex Inc........ 192 9,852
Unocal Corp....................... 395 11,751
267,246
FINANCIAL -- 5.2%
American Express Co............... 203 30,234
Bank One Corp..................... 101 3,472
Citigroup Inc..................... 3,713 220,227
Countrywide Credit Industries Inc. 395 10,764
Federal National Mortgage Assoc... 1,472 83,076
Fidelity National Financial Inc... 216 2,983
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
State Street Corp................. 626 $ 60,644(f)
Wells Fargo & Co.................. 722 29,557
440,957
HEALTHCARE -- 7.5%
Abbott Laboratories............... 1,862 65,519
American Home Products Corp....... 689 36,948
Bristol-Myers Squibb Co........... 1,152 66,528
Cardinal Health Inc............... 2,427 111,339
Dentsply International Inc........ 632 17,933
Henry Schein Inc.................. 1,084 17,547(a)
Johnson & Johnson................. 928 65,018
Lincare Holdings Inc.............. 1,377 39,072(a)
Merck & Co. Inc................... 1,264 78,526
Omnicare Inc...................... 429 5,175
Pfizer Inc........................ 1,366 49,944
Sybron International Corp......... 1,829 53,041(a)
Watson Pharmaceuticals Inc........ 779 30,917(a)
637,507
INSURANCE -- 2.4%
AFLAC Inc......................... 203 9,249
American International Group Inc. 673 73,694
Berkshire Hathaway Inc. (Class B) 183 2,760(a)
Loews Corp........................ 350 17,500
Marsh & McLennan Cos. Inc......... 605 66,739
199,942
RETAIL TRADE -- 1.1%
CVS Corp.......................... 520 19,533
Home Depot Inc.................... 1,185 76,432
95,965
TECHNOLOGY - ELECTRONICS & EQUIPMENT -- 4.7%
Analog Devices Inc................ 181 14,582(a)
Applied Materials Inc............. 768 72,384(a)
Cisco Systems Inc................. 1,625 125,633(a)
Dell Computer Corp................ 350 18,878(a)
Intel Corp........................ 1,129 148,957
Pitney Bowes Inc.................. 350 15,641
396,075
TECHNOLOGY - SOFTWARE & SERVICES -- 5.2%
Automatic Data Processing Inc..... 1,562 75,367
EMC Corp.......................... 474 59,250(a)
Equifax Inc....................... 3,194 80,649
First Data Corp................... 3,342 147,883
Microsoft Corp.................... 745 79,156(a)
442,305
UTILITIES -- 1.0%
MCI WorldCom Inc.................. 1,038 47,034(a)
SBC Communications Inc............ 488 20,496
Sprint Corp....................... 271 17,073
84,603
TOTAL DOMESTIC EQUITY
(COST $3,411,559) ............. 3,740,827
----------------------------------
See Notes to Schedule of Investments and Notes to Financial Statements.
48
<PAGE>
GE STRATEGIC INVESTMENT FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
FOREIGN EQUITY -- 16.0%
BASIC MATERIALS -- 1.1%
Corus Group PLC................... 9,050 $ 14,516
Metallgesellschaft AG............. 977 18,009
Shin-Etsu Chemical Co............. 1,000 60,683
93,208
CAPITAL GOODS -- 1.3%
Alstom............................ 851 23,631
Invensys PLC...................... 6,199 27,610
Minebea Co. Ltd................... 2,000 26,591
Preussag AG....................... 733 33,684
111,516
CONSUMER - CYCLICAL -- 2.2%
Canon Inc......................... 1,000 43,345
Granada Group PLC................. 3,056 32,745
Philips Electronics N.V........... 336 56,497
Sony Corp......................... 200 28,442(a)
Sony Corp......................... 200 28,247
189,276
DIVERSIFIED -- 0.8%
Lagardere S.C.A................... 823 66,867
ENERGY -- 0.6%
Total S.A. (Class B).............. 339 50,801
FINANCIAL -- 1.0%
Deutsche Bank AG.................. 335 22,198
Grupo Financiero Banamex
Accival S.A. de C.V. (Class B) 4,648 21,274(a)
ING Groep N.V..................... 735 39,835
83,307
HEALTHCARE -- 0.3%
Aventis S.A....................... 344 18,842
Shire Pharmaceuticals Group
PLC ADR ........................ 101 5,176(a)
24,018
INSURANCE -- 1.0%
AXA-UAP........................... 373 52,896
Muenchener Rueckversicherungs-
Gesellschaft AG (Regd.) 952 9,565
82,461
RETAIL TRADE -- 0.3%
Carrefour S.A..................... 164 21,027
TECHNOLOGY - ELECTRONICS & EQUIPMENT -- 3.9%
Brambles Industries Ltd........... 1,051 26,711
ECI Telecommunications Ltd........ 861 27,014
Ericsson LM Telephone (Series B).. 813 71,519
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
Fujitsu Ltd. ..................... 1,000 $ 30,682
Nortel Networks Corp. ............ 288 36,288
STMicroelectronics N.V. .......... 204 37,505
Taiwan Semiconductor
Manufacturing Co. ............. 1,248 71,136
Toshiba Corp. .................... 3,000 30,566
331,421
TECHNOLOGY - SOFTWARE & SERVICES -- 0.4%
Cap Gemini S.A. .................. 135 36,583
UTILITIES -- 3.1%
Telefonica S.A. .................. 1,780 44,997(a)
Vodafone AirTouch PLC ............ 21,876 121,900
Vodafone AirTouch PLC ADR ........ 1,660 92,234
259,131
TOTAL FOREIGN EQUITY
(COST $1,088,890) ............. 1,349,616
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------
BONDS AND NOTES -- 37.5%
--------------------------------------------------------------------------------
U.S. TREASURIES -- 37.5%
U.S. Treasury Notes
5.875% 11/15/04 ........... $1,970,000 1,934,284
6.00% 08/15/09 ........... 1,250,000 1,234,175
TOTAL BONDS AND NOTES
(COST $3,182,377) .......... 3,168,459
----------
TOTAL INVESTMENTS IN SECURITIES
(COST $7,682,826) .......... 8,258,902
----------
NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 1.3%
--------------------------------------------------------------------------------
GEI Short-Term Investment Fund
(COST $112,122) ............ 112,122 112,122
OTHER ASSETS AND LIABILITIES,
NET 0.9% ................... 74,288
----------
NET ASSETS-- 100% ............. $8,445,312
==========
----------------------------------
See Notes to Schedule of Investments and Notes to Financial Statements.
49
<PAGE>
INCOME FUNDS
--------------------------------------------------------------------------------
Q&A
ROBERT MACDOUGALL LEADS THE FIXED INCOME TEAM AT GE INVESTMENTS. ASSETS UNDER
HIS MANAGEMENT EXCEED $29 BILLION. HIS RESPONSIBILITIES INCLUDE MANAGING THE
INCOME AND MONEY MARKET FUNDS. BOB JOINED GE INVESTMENTS IN 1986 AS A MUTUAL
FUND PORTFOLIO MANAGER AND WAS APPOINTED TO HEAD THE TAXABLE FIXED INCOME TEAM
IN 1992, AND THE TAX-EXEMPT FIXED INCOME TEAM IN 1997. PREVIOUSLY HE WAS WITH
GE'S CORPORATE TREASURY OPERATION MANAGING THE COMPANY'S $2 BILLION PORTFOLIO OF
MARKETABLE SECURITIES AND SUPPORTING THE TREASURER IN THE AREAS OF DEBT
MANAGEMENT AND CAPITAL STRUCTURE PLANNING. PRIOR TO THAT, BOB HAS HELD VARIOUS
FINANCIAL MANAGEMENT POSITIONS SINCE JOINING GE IN 1973. HE HOLDS BACHELOR'S AND
MASTER'S DEGREES IN BUSINESS ADMINISTRATION FROM THE UNIVERSITY OF
MASSACHUSETTS.
Q. DESCRIBE WHAT OCCURRED IN THE FIXED INCOME MARKETS DURING THE SIX-MONTH
PERIOD ENDING MARCH 31, 2000?
A. During the six months ending March 31, 2000, the Federal Reserve Board
remained vigilant against heightened inflation risks from an overheated economy.
Led by consumer spending, Gross Domestic Product grew in the final quarter of
1999 at its fastest pace in nearly 16 years and remained strong through the
first quarter of 2000. Subsequently, the Federal Reserve raised the federal
funds rate on three occasions, in increments of 25 basis points, to 6.00% during
the period.
The yield curve experienced a significant flattening over the six months. On
September 30, 1999, yields on two- year notes and 30-year bonds were 5.60% and
6.05%, respectively. As the Fed tightened, interest rates climbed. Market
expectations of further rate hikes put more upward pressure on yields of short
maturity issues relative to long maturities. By December 31, 1999, the two- year
note yield had risen to 6.24%, up 64 basis points, while the 30- year bond yield
stood at 6.48%, up 43 basis points. The yield curve inversion continued in the
first quarter of 2000. Short maturity yields increased further as more Fed
tightening was priced into the market. Reduced supply and a Treasury
announcement of long maturity buy-backs drove yields on long treasuries
significantly lower. By March 31, 2000 yields on two-year securities were higher
by 24 basis points at 6.48% and yields on 30- year issues declined 64 basis
points to 5.84%.
The market, represented by the Lehman Brothers Aggregate Bond Index returned
2.08% for the period. The government sector outperformed other sectors with a
total return of 2.70%. Corporate and mortgage backed securities posted returns
of 1.46% and 1.77%, respectively. The underperformance of these sectors resulted
from severe spread widening in the last three months as reduced treasury supply
and equity market volatility pushed investors to the safe haven of Treasury
securities.
Q. HOW DID THE INCOME FUND PERFORM COMPARED TO IT'S BENCHMARK FOR THE SIX MONTH
PERIOD ENDED MARCH 31, 2000?
A. The Income Fund posted a positive 1.90% return while the Lehman Brothers
Aggregate Bond Index posted a positive total return of 2.08%.
Q. WHAT WERE THE KEY DRIVERS OF FUND PERFORMANCE?
A. Overall, the Fund performed in line with the market and peers. Good security
selection, particularly in the corporate sector and commercial mortgage backed
sectors, helped offset an unfavorable sector allocation as federal agencies and
mortgage backed securities underperformed U.S. Treasuries.
Q. WHAT IS YOUR OUTLOOK FOR THE BOND MARKET?
A. The Federal Reserve Board will continue raising short-term interest rates
gradually through the second quarter until consumer demand shows signs of
slowing. Despite lower treasury yields, sticky borrowing costs in the private
sector should become a drag on our fast paced economy alleviating the need for
further rate hikes. The current disconnect between declining treasury yields,
particularly in longer maturity issues, and yields of non- treasury securities
presents a challenging environment for bond investors to assess relative value.
While we believe spread volatility may continue in the short run, strategic
allocation to spread sectors combined with keen security selection should
benefit longer-term performance.
50
<PAGE>
INCOME FUND
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
--------------------------------------------------------------------------------
[LINE GRAPH OMITTED]
INCOME FUND LB AGGREGATE
11/21/97 10000.00 10000.00
12/97 10112.09 10101.00
3/98 10290.76 10256.86
6/98 10544.23 10496.62
9/98 10921.11 10940.26
12/98 10967.82 10977.14
3/99 10904.74 10921.35
6/99 10783.19 10825.13
9/99 10842.60 10899.26
12/99 10826.21 10885.99
3/00 11048.27 11126.30
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
SIX ONE SINCE
MONTHS YEAR INCEPTION COMMENCEMENT
--------------------------------------------------------------------------------
Income Fund 1.90% 1.32% 4.31% 11/21/97
--------------------------------------------------------------------------------
LB Aggregate 2.08% 1.88% 4.63%
--------------------------------------------------------------------------------
INVESTMENT PROFILE
A mutual fund designed for investors who seek maximum
income consistent with prudent investment management
and the preservation of capital by investing
primarily in a variety of investment grade debt
securities.
--------------------------------------------------------------------------------
SECTOR ALLOCATION AS OF MARCH 31, 2000
--------------------------------------------------------------------------------
[PIE CHART OMITTED]
U.S. TREASURIES 22.6%
MORTGAGE BACKED 40.7%
CORPORATE NOTES 22.2%
CASH AND OTHER 8.7%
FEDERAL AGENCIES 5.8%
--------------------------------------------------------------------------------
QUALITY RATINGS AT MARCH 31, 2000
--------------------------------------------------------------------------------
Moody's/ Percentage of
S&P Rating+ Net Assets
--------------------------------------------------------------------------------
Aaa/AAA 72.9%
--------------------------------------------------------------------------------
A to AA 16.0%
--------------------------------------------------------------------------------
Below A 5.2%
--------------------------------------------------------------------------------
Other 5.9%
--------------------------------------------------------------------------------
+ MOODY'S INVESTORS SERVICES, INC. AND STANDARD & POOR'S ARE NATIONALLY
RECOGNIZED STATISTICAL RATING ORGANIZATIONS.
SEE NOTES TO PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
51
<PAGE>
GE INCOME FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
INCOME FUND
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------
BONDS AND NOTES -- 96.3%
U.S. TREASURIES -- 22.6%
U.S. Treasury Bonds
8.125% 08/15/19 ...........$ 4,880,000 $ 5,933,006(e)
6.125% 08/15/29 ............. 2,055,000 2,094,497(e)
6.25% 05/15/30 ............. 8,325,000 8,801,107(e,k)
16,828,610
U.S. Treasury Notes
5.875% 11/30/01 ............. 3,607,000 3,570,353(e)
6.50% 02/28/02 .............14,165,000 14,158,343(k)
6.50% 02/15/10 ............. 7,898,000 8,174,430(e,k)
25,903,126
TOTAL U.S. TREASURIES
(COST $42,044,168) ............ 42,731,736
FEDERAL AGENCIES -- 5.8%
Federal Home Loan Bank
5.25% 04/25/02.............. 475,000 459,563
Federal Home Loan Mortgage Corp.
6.22% 03/18/08 ............. 490,000 450,878
5.75% 04/15/08 ............. 360,000 328,781
5.125% 10/15/08 ............. 280,000 243,555
1,023,214
Federal National Mortgage Assoc.
6.625% 01/15/02 ............. 6,145,000 6,111,387(k)
5.75% 04/15/03 ............. 185,000 178,582
5.125% 02/13/04 ............. 890,000 832,007
5.78% 05/05/04 ............. 515,000 488,689
6.99% 07/09/07 ............. 300,000 288,234
5.64% 12/10/08 ............. 290,000 267,612
6.04% 02/25/09 ............. 1,105,000 1,007,970
6.99% 06/01/17 ............. 1,365,000 413,759(d)
9,588,240
TOTAL FEDERAL AGENCIES
(COST $11,385,461) .............. 11,071,017
AGENCY MORTGAGE BACKED -- 34.3%
Federal Home Loan Mortgage Corp.
7.50% 09/01/12 ............. 182,886 182,999
8.00% 05/01/27 ............. 1,176,564 1,182,447
7.00% 07/01/28 ............. 84,902 81,745
6.00% 02/01/29 - 06/01/29 .. 5,195,880 4,731,858
6.50% 02/01/29 - 08/01/29 .. 7,772,249 7,294,694
6.50% 03/01/29 ............. 573,901 538,394(g)
7.50% 10/01/29 ............. 249,840 245,700
7.00% 01/01/30 - 03/01/30 .. 9,790,170 9,416,205
7.50% 01/01/30 - 03/01/30 .. 7,180,680 7,061,695
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------
7.50% TBA ..................$1,760,000 $ 1,731,118(c)
8.00% TBA .................. 7,362,000 7,390,786(c)
8.50% TBA .................. 910,000 927,345(c)
40,784,986
Federal National Mortgage Assoc.
9.00% 06/01/09 ............. 187,521 194,026
7.50% 12/01/09 ............. 1,837,702 1,837,701
8.00% 01/01/13 ............. 878,088 888,098
7.00% 08/01/13 ............. 78,757 77,428
7.50% 02/01/14 ............. 450,976 450,976
9.00% 04/01/16 ............. 106,869 112,010
8.00% 12/01/17 ............. 195,853 198,011
9.00% 12/01/17 ............. 138,708 143,127
9.00% 12/01/22 ............. 157,444 162,609
7.50% 12/01/23 ............. 404,096 399,675
6.023% 10/01/24 ............. 559,816 545,821(g)
7.50% 10/01/27 ............. 434,236 427,583
6.50% 01/01/29 - 07/01/29 .. 2,931,698 2,749,132
6.00% 10/01/29 ............. 497,222 452,626
7.50% 01/01/30 - 02/01/30 .. 4,128,148 4,057,185
7.00% 01/01/30 - 02/01/30 .. 2,819,582 2,710,322
6.50% TBA .................. 844,000 812,612(c)
8.00% TBA .................. 1,750,000 1,754,917(c)
17,973,859
Government National Mortgage Assoc.
7.00% 03/15/12 ............. 558,394 551,587
9.00% 11/15/16 ............. 667,319 694,012
8.50% 10/15/17 ............. 230,592 237,722
9.00% 01/15/17 - 11/15/17 .. 200,931 208,960
9.00% 12/15/21 ............. 29,021 30,113
7.50% 10/15/22 ............. 1,639,548 1,634,515
6.50% 03/15/24 ............. 436,109 414,574
7.00% 10/15/27 ............. 149,143 144,715
6.50% 04/15/28 ............. 553,438 522,307
7.00% 04/15/28 ............. 397,208 384,919
8.00% TBA .................. 1,351,000 1,366,415(c)
6,189,839
TOTAL AGENCY MORTGAGE BACKED
(COST $65,533,131) .............. 64,948,684
AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS -- 1.1%
Federal Home Loan Mortgage Corp.
5.75% 06/15/23 ............. 155,000 146,092
6.50% 12/15/28 ............. 265,000 244,545
390,637
Federal Home Loan Mortgage Corp. STRIP
6.71% 06/15/29.............. 686,879 416,846(d,j)
Federal National Mortgage Assoc.
7.50% 01/19/39.............. 853,249 845,250
Federal National Mortgage Assoc. REMIC
6.176% 05/25/14.............. 394,459 379,729(g)
TOTAL AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS
(COST $2,097,384) ............... 2,032,462
----------------------------------
See Notes to Schedule of Investments and Notes to Financial statements.
52
<PAGE>
GE INCOME FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------
ASSET BACKED -- 5.0%
American Express Credit Account Master Trust
6.085% 03/15/05 .............$ 91,000 $ 91,198
American Express Master Trust
6.154% 08/15/04 ............. 1,059,000 1,059,657(g)
Arran One Ltd.
6.352% 03/15/05 ............. 1,250,000 1,250,781(g)
Citibank Credit Card Master Trust I
5.75% 01/15/03 ............. 72,000 71,370
5.30% 01/09/06 ............. 550,000 514,761
Discover Card Master Trust I Series 1999-3
6.114% 09/15/04 ............. 1,550,000 1,550,000(g)
FedEx Corp.
7.50% 01/15/18 ............. 213,806 211,007
Ford Credit Auto Loan Master Trust
5.50% 02/15/03 ............. 109,000 107,580
Green Tree Financial Corp.
6.90% 04/15/18 ............. 64,991 64,341
6.97% 04/01/31 ............. 116,000 114,332
MBNA Master Credit Card Trust
6.264% 10/15/03 ............. 891,000 893,228(g)
6.224% 04/15/05 ............. 305,000 305,857(g)
MBNA Master Credit Card Trust II
6.29% 07/15/07 ............. 3,000,000 3,000,000(g)
West Penn Funding LLC
6.81% 09/25/08 ............. 95,000 92,655
Yorkshire Power Pass-Through Asset Trust
8.25% 02/15/05 ............. 140,000 140,364(b)
TOTAL ASSET BACKED (COST $9,470,365) 9,467,131
CORPORATE NOTES -- 22.2%
Abbey National Capital Trust I
8.963% 12/29/49 ............. 225,000 229,082(g)
Abbey National PLC
7.95% 10/26/29 ............. 340,000 338,858
6.70% 06/29/49 ............. 150,000 138,610(g)
7.35% 10/29/49 ............. 200,000 194,362(g)
Aetna Services Inc.
6.97% 08/15/36 ............. 95,000 92,317
Aflac Inc.
6.50% 04/15/09 ............. 375,000 347,745
Allstate Corp.
7.20% 12/01/09 ............. 1,425,000 1,378,958
Amerada Hess Corp.
7.875% 10/01/29 ............. 425,000 412,059
American Airlines Inc.
6.855% 04/15/09 ............. 300,000 294,486
Arizona Public Service Co.
6.25% 01/15/05 ............. 80,000 75,296
Armstrong World Industries Inc.
7.45% 05/15/29 ............. 80,000 75,746
Arvin Industries Inc.
7.125% 03/15/09 ............. 160,000 139,355
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------
Associates Corp. of North America
6.375% 10/15/02 ............$ 400,000 $ 392,300
5.75% 11/01/03 ............. 1,270,000 1,212,113
AT&T Capital Corp.
6.60% 05/15/05 ............. 105,000 101,063
AT&T Corp.
6.50% 03/15/29 ............. 1,460,000 1,265,572
AT&T Corp. - Liberty Media Group
8.25% 02/01/30 ............. 25,000 24,090
Atlantic City Electric Co.
6.19% 01/17/06 ............. 205,000 194,188
Bank One Corp.
6.40% 08/01/02 ............. 1,705,000 1,669,843
BCI US Funding Trust I
8.01% 12/29/49 ............. 150,000 136,543(b,g)
Bear Stearns Cos. Inc.
7.625% 12/07/09 ............. 410,000 402,263
Beckman Instruments Inc.
7.10% 03/04/03 ............. 65,000 62,335
Bell Telephone Co. - Pennsylvania
8.35% 12/15/30 ............. 368,000 398,040
Bellsouth Capital Funding
7.875% 02/15/30 ............. 500,000 508,400
Bellsouth Telecomm Inc.
6.375% 06/01/28 ............. 595,000 502,900
Boston University
7.625% 07/15/97 ............. 250,000 232,997
Brascan Ltd.
7.375% 10/01/02 ............. 40,000 39,112
Bristol-Myers Squibb Co.
6.875% 08/01/97 ............. 150,000 136,055
CIT Group Inc.
7.375% 03/15/03 ............. 325,000 322,234
7.125% 10/15/04 ............. 1,035,000 1,022,818
Coastal Corp.
6.375% 02/01/09 ............. 100,000 90,884
Conseco Inc.
6.40% 06/15/01 ............. 191,000 185,650(g)
8.70% 11/15/26 ............. 59,000 49,633
Corporacion Andina De Fomento
6.75% 03/15/05 ............. 130,000 122,477
CSC Holdings Inc.
8.125% 07/15/09 ............. 120,000 118,800
DaimlerChrysler AG
7.40% 01/20/05 ............. 410,000 409,036
7.20% 09/01/09 ............. 430,000 419,164
Delphi Auto Systems Corp.
6.125% 05/01/04 ............. 305,000 287,371
Dresdner Funding Trust I
8.151% 06/30/31 ............. 480,000 445,464(b)
Du Pont de Nemours (E.I.) & Co.
6.75% 10/15/04 ............. 85,000 83,975
6.875% 10/15/09 ............. 85,000 82,503
Duke Capital Corp.
7.25% 10/01/04 ............. 1,165,000 1,161,249
Duke Energy Corp.
5.375% 01/01/09 ............. 100,000 86,681
Electronic Data Systems Corp.
6.85% 10/15/04 ............. 150,000 148,082
----------------------------------
See Notes to Schedule of Investments and Notes to Financial statements.
53
<PAGE>
GE INCOME FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------
Federated Department Stores Inc.
6.125% 09/01/01 .............$ 110,000 $ 108,298(g)
Ford Motor Co.
7.50% 03/15/05 ............. 390,000 390,238
5.80% 01/12/09 ............. 100,000 88,590
7.375% 10/28/09 ............. 945,000 925,779
7.45% 07/16/31 ............. 300,000 290,130
Fortune Brands Inc.
7.125% 11/01/04 ............. 130,000 128,575(b)
FPL Group Capital Inc.
7.375% 06/01/09 ............. 700,000 679,441
General Motors Acceptance Corp.
5.75% 11/10/03 ............. 70,000 66,194
6.125% 01/22/08 ............. 470,000 428,245
Georgia-Pacific Group
9.95% 06/15/02 ............. 60,000 62,708
Goldman Sachs Group L.P.
6.65% 05/15/09 ............. 455,000 426,107
Heritage Media Corp.
8.75% 02/15/06 ............. 130,000 128,050
Household Finance Corp.
6.125% 07/15/12 ............. 50,000 48,604(g)
Hydro-Quebec
8.25% 04/15/26 ............. 105,000 113,217
Israel Electric Corp. Ltd.
7.125% 07/15/05 ............. 60,000 57,394(b)
J.P. Morgan & Co.
6.00% 01/15/09 ............. 875,000 777,332
Kroger Co.
6.34% 06/01/01 ............. 185,000 182,217
7.375% 03/01/05 ............. 175,000 171,671
LCI International Inc.
7.25% 06/15/07 ............. 210,000 204,559
Lehman Brothers Holdings Inc.
7.75% 01/15/05 ............. 470,000 474,470
8.50% 08/01/15 ............. 220,000 228,846
7.50% 08/01/26 ............. 145,000 140,650
Lenfest Communications Inc.
8.375% 11/01/05 ............. 140,000 145,533
LG&E Capital Corp.
5.75% 11/01/01 ............. 120,000 117,234(b)
Liberty Property Ltd. Partnership
7.50% 01/15/18 ............. 90,000 79,904
Lockheed Martin Corp.
7.95% 12/01/05 ............. 250,000 248,442
8.20% 12/01/09 ............. 705,000 705,832
Lumbermens Mutual Casualty
8.30% 12/01/37 ............. 20,000 18,185(b)
MCI WorldCom Inc.
6.40% 08/15/05 ............. 105,000 100,795
8.875% 01/15/06 ............. 150,000 156,354
6.125% 04/15/12 ............. 300,000 293,322(g)
Merita Bank Ltd.
7.15% 12/29/49 ............. 250,000 243,605(b,g)
Merrill Lynch & Co.
5.71% 01/15/02 ............. 170,000 165,656
Morgan Stanley, Dean Witter & Co.
7.125% 01/15/03 ............. 1,165,000 1,157,346
5.625% 01/20/04 ............. 65,000 61,301
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------
Nabisco Inc.
6.125% 02/01/33 .............$ 95,000 $ 90,533
Natexis AMBS Co. LLC
8.44% 12/29/49 ............. 85,000 80,511(b,g)
National Rural Utilities Cooperative
6.046% 04/15/03 ............. 100,000 96,692
National Westminster Bank PLC
7.75% 04/29/49 ............. 271,000 270,699(g)
NB Capital Trust IV
8.25% 04/15/27 ............. 250,000 243,952
Newell Co.
6.35% 07/15/08 ............. 70,000 66,667(g)
News America Holdings Inc.
7.625% 11/30/28 ............. 110,000 100,670
Noram Energy Corp.
6.375% 11/01/03 ............. 80,000 76,957(g)
Northrop-Grumman Corp.
8.625% 10/15/04 ............. 75,000 77,029
Occidental Petroleum Corp.
7.375% 11/15/08 ............. 115,000 110,380
Ontario Province of Canada
7.375% 01/27/03 ............. 2,460,000 2,473,235
Pactiv Corp.
8.375% 04/15/27 ............. 190,000 176,597
Pepsi Bottling Holdings Inc.
5.375% 02/17/04 ............. 200,000 187,262(b)
5.625% 02/17/09 ............. 70,000 62,366(b)
Pharmacia Corp.
5.75% 12/01/05 ............. 80,000 75,416
Philip Morris Cos. Inc.
7.25% 09/15/01 ............. 80,000 79,175
Phillips Petroleum Co.
9.375% 02/15/11 ............. 200,000 221,286
Pitney Bowes Credit Corp.
9.25% 06/15/08 ............. 100,000 113,720
PP&L Capital Funding Inc.
7.75% 04/15/05 ............. 140,000 138,583
Principal Financial Group
8.20% 08/15/09 ............. 140,000 141,946(b)
Procter & Gamble Co.
9.36% 01/01/21 ............. 165,000 193,184
Quebec Province of Canada
7.50% 09/15/29 ............. 285,000 286,365
Raytheon Co.
7.90% 03/01/03 ............. 215,000 215,555(b)
6.75% 08/15/07 ............. 100,000 92,986
Rohm & Haas Co.
6.95% 07/15/04 ............. 475,000 469,167
Royal & Sun Alliance Insurance Group PLC
8.95% 10/15/29 ............. 170,000 174,051(b)
Royal Bank of Scotland Group PLC
8.817% 03/31/49 ............. 595,000 606,566
Safeway Inc.
7.50% 09/15/09 ............. 300,000 299,418
Sprint Capital Corp.
5.70% 11/15/03 ............. 520,000 492,118
6.875% 11/15/28 ............. 555,000 497,707
Stop & Shop Cos. Inc.
9.75% 02/01/02 ............. 50,000 51,000
----------------------------------
See Notes to Schedule of Investments and Notes to Financial statements.
54
<PAGE>
GE INCOME FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------
SunAmerica Inc.
5.60% 07/31/97 .............$ 390,000 $ 273,725
Suntrust Bank Inc.
6.00% 01/15/28 ............. 80,000 72,926
Tele-Communications Inc.
9.80% 02/01/12 ............. 80,000 94,744
7.875% 08/01/13 ............. 60,000 61,708
Texas Utilities Co.
5.94% 10/15/01 ............. 340,000 333,435(g)
Textron Inc.
6.375% 07/15/04 ............. 85,000 82,306
Time Warner Inc.
10.15% 05/01/12 ............. 263,000 305,606
7.57% 02/01/24 ............. 410,000 394,281
Time Warner Pass-Through Asset Trust
6.10% 12/30/01 ............. 90,000 88,079(b)
Tosco Corp.
7.625% 05/15/06 ............. 55,000 54,464
TRW Inc.
6.625% 06/01/04 ............. 165,000 158,855
Turner Broadcasting Systems Inc.
8.375% 07/01/13 ............. 115,000 119,623
TXU Eastern Funding Co.
6.45% 05/15/05 ............. 170,000 158,503
6.75% 05/15/09 ............. 65,000 58,890
Tyco International Group S.A.
6.875% 09/05/02 ............. 200,000 196,424(b)
6.25% 06/15/03 ............. 55,000 52,461(g)
7.00% 06/15/28 ............. 95,000 82,865
Union Carbide Corp.
6.79% 06/01/25 ............. 145,000 140,112
Union Oil Co.
7.35% 06/15/09 ............. 310,000 299,773
United Illuminating Co.
6.25% 12/15/02 ............. 30,000 28,950
US Airways Pass-Through Trust
8.36% 07/20/20 ............. 150,000 146,549
US West Capital Funding Inc.
6.875% 08/15/01 ............. 950,000 944,167
US West Communications Inc.
5.625% 11/15/08 ............. 125,000 109,035
USA Networks Inc.
6.75% 11/15/05 ............. 480,000 459,859
USX Marathon Group
9.80% 07/01/01 ............. 80,000 81,966
Viacom Inc.
7.75% 06/01/05 ............. 307,000 309,327
Vodafone AirTouch PLC
7.625% 02/15/05 ............. 565,000 571,853(b)
Wal-Mart Stores Inc.
6.875% 08/10/09 ............. 1,740,000 1,692,811
Walt Disney Co.
5.62% 12/01/08 ............. 265,000 235,081
Williams Cos. Inc.
6.125% 02/15/12 ............. 155,000 151,134
Yale University
7.375% 04/15/96 ............. 321,000 308,250
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------
TOTAL CORPORATE NOTES
(COST $42,622,295) ............. $41,975,088
NON-AGENCY MORTGAGE BACKED SECURITIES -- 3.0%
Chase Commercial Mortgage Securities Corp.
6.39% 11/18/08 ............$ 104,000 96,774
Commercial Mortgage Acceptance Corp.
6.49% 05/15/08 ............. 138,000 129,116
DLJ Commercial Mortgage Corp.
6.24% 11/12/31 ............. 1,095,000 1,003,714
First Union Lehman Brothers- Bank of America
6.56% 11/18/08 ............. 2,100,000 1,981,508
GS Mortgage Securities Corp.
6.86% 07/13/30 ............. 250,000 243,602
Merrill Lynch Mortgage Investors Inc.
6.39% 02/15/30 ............. 114,000 108,318
Nationslink Funding Corp.
6.001% 11/20/07 ............. 86,198 81,593
6.476% 07/20/08 ............. 2,100,000 1,966,173
TOTAL NON-AGENCY MORTGAGE BACKED SECURITIES
(COST $5,667,061) 5,610,798
NON-AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS -- 2.3%
Credit Suisse First Boston Mortgage Securities Corp.
6.30% 11/15/08 ............. 300,000 283,453
GMAC Commercial Mortgage Security Inc.
6.42% 08/15/08 ............. 1,862,000 1,734,062
9.55% 08/15/23 ............. 3,991,342 154,365(d,i)
J P Morgan Commercial Mortgage Finance Corp.
7.77% 10/15/32 ............. 434,000 440,509
7.886% 10/15/32 ............. 173,000 176,602
Lehman Large Loan
6.79% 06/12/04 ............. 282,813 279,088
Morgan Stanley Capital I
6.86% 05/15/06 ............. 243,360 239,416(b)
6.52% 01/15/08 ............. 21,000 19,759
6.21% 09/15/08 ............. 44,000 40,587
7.11% 07/15/09 ............. 114,000 109,903
10.25% 04/15/23 ............. 1,095,693 42,458(d,i)
6.01% 11/15/30 ............. 150,143 142,220
10.41% 11/15/31 ............. 1,708,978 78,239(b,d,i)
Salomon Brothers Mortgage Securities Inc.
7.00% 07/25/24 ............. 735,490 616,378(g)
TOTAL NON-AGENCY COLLATERALIZED
MORTGAGE OBLIGATIONS (COST $4,476,306) .. 4,357,039
TOTAL BONDS AND NOTES (COST $183,296,171) . 182,193,955
----------------------------------
See Notes to Schedule of Investments and Notes to Financial statements.
55
<PAGE>
GE INCOME FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------------------------------------------------------------------------------
PREFERRED STOCK -- 0.3%
--------------------------------------------------------------------------------
CORPORATE PREFERRED -- 0.3%
Centaur Funding Corp.
(Series B), 9.08% ................ 475 $ 490,522(b)
TCI Communications Inc., 10.00% .... 3,200 81,600
TOTAL PREFERRED STOCK (COST $589,300) 572,122
TOTAL INVESTMENTS IN SECURITIES
(COST $183,885,471) .............. 182,766,077
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 24.7%
--------------------------------------------------------------------------------
GEI Short-Term Investment Fund .22,632,217 22,632,217
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------
COMMERCIAL PAPER -- 2.6%
Ford Motor Credit Co.
6.03% 04/05/00..............$5,000,000 4,996,650
YANKEE CERTIFICATES OF DEPOSIT -- 7.4%
Canadian Imperial Bank of Commerce
5.97% 04/18/00 - 04/19/00...14,000,000 14,000,000
FEDERAL AGENCIES -- 2.7%
Federal Home Loan Mortgage Corp. .
5.50% 04/03/00.............. 5,080,000 5,078,292(d)
TOTAL SHORT-TERM INVESTMENTS
(COST $46,707,159) ................ 46,707,159
OTHER ASSETS AND LIABILITIES,
NET (21.3)% ...................... (40,339,974)
------------
NET ASSETS-- 100% ................ $189,133,262
============
----------------------------------
See Notes to Schedule of Investments and Notes to Financial Statements.
56
<PAGE>
MONEY MARKET FUND
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
--------------------------------------------------------------------------------
[LINE GRAPH OMITTED]
MONEY MARKET FUND 90 DAY T-BILL
12/2/97 10000.00 10000.00
12/97 10045.17 10043.00
3/98 10178.79 10170.85
6/98 10313.99 10297.38
9/98 10453.23 10419.19
12/98 10585.27 10533.60
3/99 10709.49 10651.26
6/99 10833.83 10773.32
9/99 10967.85 10902.15
12/99 11116.86 11042.51
3/00 11273.22 11200.06
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
SIX ONE SINCE
MONTHS YEAR INCEPTION COMMENCEMENT
--------------------------------------------------------------------------------
Money Market Fund 2.78% 5.26% 5.28% 12/2/97
--------------------------------------------------------------------------------
90 Day T-Bill 2.73% 5.15% 4.99%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECTOR ALLOCATION AS OF MARCH 31, 2000
--------------------------------------------------------------------------------
[PIE CHART OMITTED]
CERTIFICATES OF DEPOSITS & OTHER 36.3%
COMMERICAL PAPER 36.1%
U.S. GOVERNMENTS 27.6%
--------------------------------------------------------------------------------
FUND YIELD AT MARCH 31, 2000
--------------------------------------------------------------------------------
FUND IBC MONEY FUND
--------------------------------------------------------------------------------
7 day current 5.70%+ 5.38%
--------------------------------------------------------------------------------
7 day effective 5.87% 5.53%
--------------------------------------------------------------------------------
CURRENT YIELD REPRESENTS INCOME EARNED ON AN INVESTMENT IN THE MONEY MARKET FUND
FOR A SEVEN DAY PERIOD AND THEN ANNUALIZED.
EFFECTIVE YIELD IS CALCULATED SIMILARLY BUT IS SLIGHTLY HIGHER BECAUSE IT
REFLECTS THE COMPOUNDING EFFECT OF EARNINGS ON REINVESTED DIVIDENDS.
+ The seven day current yield, rather than the total return, more closely
reflects the current earnings of the Money Market Fund at March 31, 2000.
AN INVESTMENT IN THE MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH
THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT
IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
INVESTMENT PROFILE
A mutual fund designed for investors who seek a high level of current
income consistent with the preservation of capital and maintenance of
liquidity by investing primarily in short-term U.S. dollar
denominated, money market instruments.
Q. HOW DID THE MONEY MARKET FUND PERFORM COMPARED TO ITS BENCHMARK FOR THE SIX
MONTHS ENDING MARCH 31, 2000?
A. The Money Market Fund returned 2.78% while its benchmark, the 90-day U.S.
Treasury Bill, returned 2.73%.
Q. WHAT WERE THE KEY DRIVERS OF FUND PERFORMANCE?
A. As the Federal Reserve continued raising short term interest rates during the
period, performance was enhanced by keeping the average maturity relatively
short. This allowed reinvestment at higher levels as interest rates rose.
SEE NOTES TO PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
57
<PAGE>
GE MONEY MARKET FUND
SCHEDULE OF INVESTMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
MONEY MARKET FUND
PRINCIPAL AMORTIZED
AMOUNT COST
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 99.9%
U.S. GOVERNMENTS -- 27.6%
U.S. AGENCIES (D)
Federal Home Loan Bank
5.843% 04/12/00.............. $140,000 $ 139,761
5.822% 04/24/00.............. 160,000 159,410
299,171
Federal Home Loan Mortgage Corp.
5.919% 05/18/00.............. 500,000 496,188
Federal National Mortgage Assoc.
5.848% 04/10/00.............. 110,000 109,846
5.757% 04/20/00.............. 130,000 129,624
239,470
TOTAL U.S. GOVERNMENTS
(COST $1,034,829) ............. 1,034,829
COMMERCIAL PAPER -- 36.1%
Abbey National PLC
6.085% 07/06/00 ............. 150,000 147,566
Bank of America
5.91% 04/11/00 ............. 100,000 100,000
Credit Suisse
5.85% 04/24/00 ............. 150,000 149,439
Halifax Building Society
5.87% 05/02/00 ............. 180,000 179,090
Merrill Lynch & Co. Inc.
5.91% 05/01/00 ............. 150,000 149,261
Morgan (J.P.) & Co. Inc.
5.88% 04/28/00 ............. 150,000 149,339
Morgan Stanley Group Inc.
5.90% 05/01/00 ............. 150,000 149,263
UBS Finance Delaware Inc.
6.25% 04/03/00 ............. 180,000 179,937
Wells Fargo & Co.
5.85% 04/06/00 ............. 150,000 149,878
TOTAL COMMERCIAL PAPER
(COST $1,353,773) .............. 1,353,773
PRINCIPAL AMORTIZED
AMOUNT COST
--------------------------------------------------------------------------------
YANKEE CERTIFICATES OF DEPOSIT -- 28.2%
Bank of Montreal
5.90% 04/28/00 ............. $180,000 $ 180,000
Bayerische Landesbank
6.04% 05/08/00 ............. 150,000 150,000
Canadian Imperial Bank of Commerce
6.03% 04/20/00 ............. 140,000 140,000
Deutsche Bank AG
5.80% 04/06/00 ............. 180,000 180,000
Dresdner Bank AG
6.02% 04/20/00 ............. 110,000 109,651
Societe Generale
6.00% 06/01/00 ............. 150,000 150,000
Toronto-Dominion Bank
5.90% 04/18/00 ............. 150,000 150,000
TOTAL YANKEE CERTIFICATES OF DEPOSIT
(COST $1,059,651) ............. 1,059,651
TIME DEPOSIT -- 8.0%
Algemene Bank Nederland N.V.
6.25% 04/03/00 ............. 120,000 120,000
Royal Bank of Canada
6.281% 04/03/00 ............. 180,000 180,000
TOTAL TIME DEPOSIT (COST $300,000) 300,000
TOTAL SHORT-TERM INVESTMENTS (COST $3,748,253) 3,748,253
OTHER ASSETS AND LIABILITIES,
NET 0.1% ....................... 5,498
----------
NET ASSETS-- 100% ................ $3,753,751
==========
--------------------------------
See Notes to Schedule of Investments and Notes to Financial statements.
58
<PAGE>
NOTES TO PERFORMANCE MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
Total returns take into account changes in share price and assume reinvestment
of dividends and capital gains, if any. Investment returns and net asset value
on an investment will fluctuate and you may have a gain or loss when you sell
your shares. For periods less than one year, the returns are not annualized.
The Standard & Poor's ("S&P") 500 Composite Price Index of stocks (S&P 500), the
S&P/BARRA Composite Index of 500 value stocks (S&P 500/BARRA Value), the S&P 400
MidCap Composite Price Index of stocks (S&P MidCap 400), the Russell 2000 Index
(Russell 2000), the Morgan Stanley Capital International Europe, Australasia,
Far East Index (MSCI EAFE), the Morgan Stanley Capital International Europe
Index, (MSCI Europe), the Morgan Stanley Capital International Emerging Markets
Free Index (MSCI EMF), and the Lehman Brothers Aggregate Bond Index (LB
Aggregate) are unmanaged indices and do not reflect the actual cost of investing
in the instruments that comprise each index.
The S&P 500 is a capitalization-weighted index of 500 widely held stocks
recognized by investors to be representative of the stock market in general. The
S&P 500/BARRA Value is a capitalization-weighted index of all stocks in the S&P
500 that have low price-to-book ratios. The S&P MidCap 400 is a
capitalization-weighted index of 400 U.S. stocks with a median market
capitalization. The Russell 2000 measures the performance of the smallest
companies in the Russell 3000 Index, which represents approximately 10% of the
total market capitalization of the Russell 3000 Index. The Russell 3000 Index
measures the performance of the 3000 largest U.S. companies based on total
market capitalization, representing approximately 98% of the investable U.S.
equity market. MSCI EAFE is a composite of foreign securities traded in 20
developed markets representing Europe, Australasia and Far East. MSCI Europe is
a composite of securities traded in 15 developed markets in Europe. MSCI EMF is
a composite of securities available to non-domestic investors traded in 25
emerging markets. LB Aggregate is a composite of short-, medium-, and long-term
bond performance and is widely recognized as a barometer of the bond market in
general.
The results shown for the foregoing indices assume the reinvestment of net
dividends or interest.
The 90-Day T-Bill is the average return on three month U.S. Treasury Bills. The
IBC Money Fund Report yields represent the average yields of 946 taxable money
market funds.
A number of the broad market returns are not available from the Funds'
commencement of investment operations through March 31, 2000 and therefore are
calculated from the month end nearest to the funds' commencement of operations
date.
The views expressed in this document reflect our judgment as of the publication
date and are subject to change at any time without notice. The securities cited
may not represent current or future holdings and should not be considered as a
recommendation to purchase or sell a particular security. They were cited solely
for illustrative purposes. See the Prospectus for complete descriptions of
investment objectives, policies, risks and permissible investments.
Standard & Poor's, S&P, S&P 500 and S&P 400 are trademarks of The McGraw-Hill
Companies, Inc. and have been licensed for use. The S&P 500 Index Fund is not
sponsored, endorsed, sold or promoted by Standard & Poor's, and Standard &
Poor's makes no representation or warranty, express or implied, to the investors
of the Fund or any member of the public regarding the advisability of investing
in the securities generally or in this Fund particularly or the ability of the
S&P 500 Index Fund to track general stock market performance.
NOTES TO SCHEDULES OF INVESTMENTS
--------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Pursuant to Rule 144A of Securities Act of 1933, these securities may be
resold in transactions exempt from registration, normally to qualified
institutional buyers. At March 31, 2000, these securities amounted to
$2,859,387; $100,372; $667,020; and $3,813,588 or 0.7%, 0.7%, 4.4%, and 2.0% of
net assets for the International Equity, Europe Equity, Emerging Markets and
Income Funds, respectively. These securities have been determined to be liquid
using guidelines established by the Board of Trustees.
(c) Settlement is on a delayed delivery or when-issued basis with final maturity
to be announced (TBA) in the future.
(d) Coupon amount represents effective yield.
(e) At March 31, 2000, all or a portion of this security was pledged to cover
collateral requirements for futures, options and/or TBA's.
(f) State Street Corp. is the parent company of State Street Bank & Trust Co.,
the fund's custodian.
(g) Variable or floating rate security. The stated rate represents the rate at
March 31, 2000.
(h) March 31, 2000, GEAM has determined that the security is illiquid as it may
be difficult to resell within seven days in the ordinary course of business at
approximately the price it is valued.
(i) Interest only securities represent the right to receive the monthly interest
payments on an underlying pool of mortgages. Payments of principal on the pool
reduces the value of the interest only holding.
(j) Principal only securities represent the right to receive the monthly
principal payments on an underlying pool of mortgages. No payments of interest
on the pool are passed through to the "principal only" holder.
(k) All or a portion of security out on loan.
ABBREVIATIONS:
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
Regd. -- Registered
REMIC -- Real Estate Mortgage Investment Conduit
SDR -- Special Drawing Rights
STRIPS -- Separate Trading of Registered Interest and Principal of Security
59
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED
(MARCH 31, 2000 DATA IS UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. S&P 500 PREMIER
EQUITY INDEX GROWTH EQUITY
FUND FUND FUND
3/31/00 9/30/99 9/30/98 3/31/00 9/30/99 9/30/98 3/31/00
------------------------------------------------------------------------------------------------------------------------------------
INCEPTION DATE -- -- 11/25/97 -- -- 11/25/97 10/31/99
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $ 13.19 $ 10.62 $ 10.00 $ 13.74 $ 10.85 $ 10.00 $ 10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income...................... 0.04 0.11 0.11 0.06 0.18 0.14 0.02
Net realized and unrealized gains (losses)
on investments ......................... 1.79 2.84 0.52 2.39 2.88 0.72 2.08
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 1.83 2.95 0.63 2.45 3.06 0.86 2.10
------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income...................... 0.09 0.13 0.01 0.18 0.17 0.01 0.01
Net realized gains......................... 0.83 0.25 -- 0.27 -- -- --
Return of capital.......................... -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS........................... 0.92 0.38 0.01 0.45 0.17 0.01 0.01
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period................ $ 14.10 $ 13.19 $ 10.62 $ 15.74 $ 13.74 $ 10.85 $ 12.09
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (A).............................. 14.32% 28.27% 6.28% 18.11% 28.41% 8.63% 21.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)... $269,726 $160,980 $114,553 $147,566 $26,359 $20,186 $21,949
Ratios to average net assets:
Net investment income*.................. 0.96% 0.92% 1.21% 1.34% 1.35% 1.57% 0.38%
Expenses*............................... 0.38% 0.41% 0.42% 0.15% 0.15% 0.15% 0.55%
Portfolio turnover rate................. 27% 45% 29% 44% 7% 1% 45%
</TABLE>
<TABLE>
<CAPTION>
MID-CAP
VALUE MID-CAP VALUE
EQUITY GROWTH EQUITY
FUND FUND FUND
3/31/00 3/31/00 9/30/99 9/30/98 3/31/00 9/30/99
---------------------------------------------------------------------------------------------------------------------------------
INCEPTION DATE 2/2/00 -- -- 11/25/97 -- 12/31/98
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $ 10.00 $ 10.16 $ 8.87 $ 10.00 $ 9.91 $ 10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income...................... 0.02 0.04 0.05 0.04 0.05 0.08
Net realized and unrealized gains (losses)
on investments ......................... 0.53 3.39 1.29 (1.16) 0.94 (0.17)
---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 0.55 3.43 1.34 (1.12) 0.99 (0.09)
---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income...................... -- 0.06 0.05 0.01 0.11 --
Net realized gains......................... -- -- -- -- -- --
Return of capital.......................... -- -- -- -- -- --
---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS........................... -- 0.06 0.05 0.01 0.11 --
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period................ $ 10.55 $ 13.53 $ 10.16 $ 8.87 $ 10.79 $ 9.91
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (A).............................. 5.50% 33.87% 15.19% (11.25%) 10.05% (0.90%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)... $32,124 $21,404 $15,313 $13,208 $11,207 $10,182
Ratios to average net assets:
Net investment income*.................. 1.45% 0.78% 0.53% 0.53% 1.03% 1.00%
Expenses*............................... 0.54% 0.55% 0.55% 0.55% 0.65% 0.65%
Portfolio turnover rate................. 45% 12% 52% 14% 23% 18%
</TABLE>
<TABLE>
<CAPTION>
SMALL-CAP
VALUE EQUITY
FUND
3/31/00 9/30/99 9/30/98
---------------------------------------------------------------------------------
INCEPTION DATE -- -- 8/3/98
<S> <C> <C> <C>
Net asset value, beginning of period.......... $ 10.12 $ 8.91 $10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income...................... 0.01 0.01 0.02
Net realized and unrealized gains (losses)
on investments ......................... 3.08 1.23 (1.11)
---------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 3.09 1.24 (1.09)
---------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income...................... 0.02 0.03 --
Net realized gains......................... 0.30 -- --
Return of capital.......................... -- -- --
---------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS........................... 0.32 0.03 --
---------------------------------------------------------------------------------
Net asset value, end of period................ $ 12.89 $ 10.12 $ 8.91
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
TOTAL RETURN (A).............................. 31.15% 13.98% (10.90%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)... $17,418 $10,287 $9,056
Ratios to average net assets:
Net investment income*.................. 0.19% 0.13% 1.68%
Expenses*............................... 0.70% 0.70% 0.70%
Portfolio turnover rate................. 130% 216% 19%
</TABLE>
60 & 61
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED
(MARCH 31, 2000 DATA IS UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EUROPE
EQUITY EQUITY
FUND FUND
3/31/00 9/30/99 9/30/98 3/31/00 9/30/99
------------------------------------------------------------------------------------------------------------------------------------
INCEPTION DATE -- -- 11/25/97 -- 1/29/99
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $ 12.49 $ 10.06 $ 10.00 $ 9.97 $ 10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income......................... 0.01 0.09 0.14(b) 0.01 0.11
Net realized and unrealized gains (losses) on investments 3.25 2.81 (0.07)(b) 4.67 (0.14)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 3.26 2.90 0.07 4.68 (0.03)
------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income......................... 0.08 0.12 0.01 0.10 --
Net realized gains............................ 0.41 0.35 -- -- --
Return of capital............................. -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS........................... 0.49 0.47 0.01 0.10 --
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period................ $ 15.26 $ 12.49 $ 10.06 $ 14.55 $ 9.97
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (A).............................. 26.55% 29.50% 0.66% 47.16% (0.30%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)...... $386,566 $197,974 $114,414 $15,115 $10,080
Ratios to average net assets:
Net investment income (loss)*................. 0.33% 0.99% 1.72% 0.13% 1.78%
Expenses*..................................... 0.59% 0.62% 0.64% 0.75% 0.75%
Portfolio turnover rate....................... 39% 50% 53% 47% 49%
</TABLE>
<TABLE>
<CAPTION>
EMERGING STRATEGIC
MARKETS INVESTMENT
FUND FUND
3/31/00 9/30/99 9/30/98 3/31/00 3/31/00
---------------------------------------------------------------------------------------------------------------------------------
INCEPTION DATE -- -- 11/25/97 10/31/99 --
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $ 11.47 $ 6.78 $10.00 $10.00 $ 9.57
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income......................... (0.03) 0.01 0.07 0.10 0.30
Net realized and unrealized gains (losses) on investments 6.99 4.70 (3.26) 0.91 (0.12)
---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 6.96 4.71 (3.19) 1.01 0.18
---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income......................... 0.01 0.01 0.03 0.05 0.30
Net realized gains............................ -- -- -- -- --
Return of capital............................. -- 0.01 -- -- --
---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS........................... 0.01 0.02 0.03 0.05 0.30
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period................ $ 18.42 $11.47 $ 6.78 $10.96 $ 9.45
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (A).............................. 60.71% 69.62% (31.96%) 10.14% 1.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)...... $15,047 $8,592 $5,063 $8,445 $189,133
Ratios to average net assets:
Net investment income (loss)*................. (0.34)% 0.12% 0.82% 2.48% 6.38%
Expenses*..................................... 1.05% 1.05% 1.05% 0.45% 0.28%
Portfolio turnover rate....................... 22% 79% 77% 38% 131%
</TABLE>
<TABLE>
<CAPTION>
MONEY
INCOME MARKET
FUND FUND
9/30/99 9/30/98 3/31/00 9/30/99 9/30/98
-----------------------------------------------------------------------------------------------------------------------
INCEPTION DATE -- 11/21/97 -- -- 12/2/97
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $ 10.39 $ 10.00 $ 1.00 $ 1.00 $ 1.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income......................... 0.55 0.51 0.03 0.05 0.04
Net realized and unrealized gains (losses) on investments (0.62) 0.39 (0.00) -- --
-----------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS (0.07) 0.90 0.03 0.05 0.04
-----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income......................... 0.57 0.51 0.03 0.05 0.04
Net realized gains............................ 0.18 -- -- -- --
Return of capital............................. -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS........................... 0.75 0.51 0.03 0.05 0.04
-----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period................ $ 9.57 $ 10.39 $ 1.00 $ 1.00 $ 1.00
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (A).............................. (0.72%) 9.21% 2.78% 4.92% 4.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)...... $95,381 $71,444 $3,754 $5,736 $7,012
Ratios to average net assets:
Net investment income (loss)*................. 5.80% 5.81% 5.46% 4.81% 5.33%
Expenses*..................................... 0.30% 0.31% 0.25% 0.25% 0.25%
Portfolio turnover rate....................... 227% 323% N/A N/A N/A
<FN>
----------------
NOTES TO FINANCIAL HIGHLIGHTS
(a) Total returns are historical and assume changes in share price and
reinvestment of dividends and capital gains. Periods less than one year are not
annualized.
(b) As a result of the timing of purchases and sales of fund shares, per share
amounts do not accord with aggregate amounts appearing in Statement of Changes.
* Annualized for periods less than one year.
</FN>
</TABLE>
62 & 63
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PREMIER
U.S. S&P 500 GROWTH VALUE MID-CAP
EQUITY INDEX EQUITY EQUITY GROWTH
FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities, at market (cost
$230,783,125; $131,274,885; $18,300,058;
$28,950,459; $13,729,682; $10,120,302;
$15,316,845; $340,424,780; $11,982,117;
$8,742,129; $7,682,826; $183,885,471; and
$0, respectively) ........................ $267,589,055 $144,812,364 $20,900,361 $30,841,408 $19,241,317
Short-term investments (at amortized cost) .. 1,386,982 3,229,038 1,048,124 1,211,145 1,938,675
Cash ........................................ 10,738 2,495 -- 973 --
Foreign currency (cost $0; $0; $0; $0; $0 $0;
$0; $1,571,384; $101,442; $53,518; $523;
$0 and $0, respectively) ................. -- -- -- -- --
Receivable for investments sold ............. 4,606,151 14,684 83,949 235,573 248,368
Income receivables .......................... 213,070 115,164 11,633 30,241 30,332
Receivable for fund shares sold ............. 284,700 -- 37,325 10,114 --
Variation margin receivable ................. -- 22,000 2,750 8,250 --
---------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS ............................. 274,090,696 148,195,745 22,084,142 32,337,704 21,458,692
---------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Distributions payable to shareholders ....... -- -- -- -- --
Payable upon return of securities loaned .... -- -- -- -- --
Payable for investments purchased ........... 4,251,499 614,661 125,175 201,196 46,141
Payable for fund shares redeemed ............ 35,289 -- -- -- --
Payable to GEAM ............................. 72,688 15,172 9,523 12,690 8,588
Variation margin payable .................... 5,450 -- -- -- --
Deferred country taxes payable .............. -- -- -- -- --
---------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES ........................ 4,364,926 629,833 134,698 213,886 54,729
---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ..................................... $269,725,770 $147,565,912 $21,949,444 $32,123,818 $21,403,963
---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Capital paid in ............................. 223,157,524 127,648,446 19,100,734 30,164,902 16,159,484
Undistributed (overdistributed)
net investment income .................... 648,567 217,429 9,091 55,201 37,431
Accumulated net realized gain (loss) ........ 9,114,556 5,901,158 231,616 2,034 (304,587)
Net unrealized appreciation/ (depreciation) on:
Investments .............................. 36,805,930 13,537,479 2,600,303 1,890,949 5,511,635
Futures .................................. (775) 261,400 7,700 10,725 --
Foreign currency related transactions .... (32) -- -- 7 --
---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ..................................... $269,725,770 $147,565,912 $21,949,444 $32,123,818 $21,403,963
---------------------------------------------------------------------------------------------------------------------------------
Shares outstanding ($.001 par value) ........... 19,131,784 9,375,157 1,815,298 3,044,794 1,582,346
Net asset value, offering and redemption
price per share ............................. $14.10 $15.74 $12.09 $10.55 $13.53
</TABLE>
<TABLE>
<CAPTION>
MID-CAP SMALL-CAP INTERNATIONAL EUROPE EMERGING
VALUE EQUITY VALUE EQUITY EQUITY EQUITY MARKETS
FUND FUND FUND FUND FUND
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities, at market (cost
$230,783,125; $131,274,885; $18,300,058;
$28,950,459; $13,729,682; $10,120,302;
$15,316,845; $340,424,780; $11,982,117;
$8,742,129; $7,682,826; $183,885,471; and
$0, respectively) ........................ $11,073,182 $16,573,420 $378,155,528 $14,699,987 $15,140,863
Short-term investments (at amortized cost) .. 290,343 915,968 19,340,907 403,950 112,194
Cash ........................................ -- 1,770 -- -- --
Foreign currency (cost $0; $0; $0; $0; $0 $0;
$0; $1,571,384; $101,442; $53,518; $523;
$0 and $0, respectively) ................. -- -- 1,571,769 101,442 53,649
Receivable for investments sold ............. -- 131,328 3,182,735 144,973 110,403
Income receivables .......................... 13,963 10,542 942,201 42,541 25,646
Receivable for fund shares sold ............. -- -- 44,244 -- --
Variation margin receivable ................. -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS ............................. 11,377,488 17,633,028 403,237,384 15,392,893 15,442,755
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Distributions payable to shareholders ....... -- -- -- -- --
Payable upon return of securities loaned .... -- -- -- -- --
Payable for investments purchased ........... 164,433 204,721 15,490,256 268,453 165,391
Payable for fund shares redeemed ............ -- -- 998,156 -- --
Payable to GEAM ............................. 5,743 10,379 183,085 9,872 14,149
Variation margin payable .................... -- -- -- -- --
Deferred country taxes payable .............. -- -- -- -- 216,035
------------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES ........................ 170,176 215,100 16,671,497 278,325 395,575
------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ..................................... $11,207,312 $17,417,928 $386,565,887 $15,114,568 $15,047,180
------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Capital paid in ............................. 10,427,203 13,735,071 313,317,496 10,486,267 8,412,840
Undistributed (overdistributed)
net investment income .................... 18,558 2,511 169,637 (19,684) (44,638)
Accumulated net realized gain (loss) ........ (191,329) 2,423,771 35,379,063 1,930,510 495,992
Net unrealized appreciation/ (depreciation) on:
Investments .............................. 952,880 1,256,575 37,730,748 2,717,870 6,182,699
Futures .................................. -- -- -- -- --
Foreign currency related transactions .... -- -- (31,057) (395) 287
------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ..................................... $11,207,312 $17,417,928 $386,565,887 $15,114,568 $15,047,180
------------------------------------------------------------------------------------------------------------------------------------
Shares outstanding ($.001 par value) ........... 1,038,730 1,351,317 25,329,866 1,038,666 817,039
Net asset value, offering and redemption
price per share ............................. $10.79 $12.89 $15.26 $14.55 $18.42
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC MONEY
INVESTMENT INCOME MARKET
FUND FUND FUND
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities, at market (cost
$230,783,125; $131,274,885; $18,300,058;
$28,950,459; $13,729,682; $10,120,302;
$15,316,845; $340,424,780; $11,982,117;
$8,742,129; $7,682,826; $183,885,471; and
$0, respectively) ........................ $8,258,902 $182,766,077 $ --
Short-term investments (at amortized cost) .. 112,122 46,707,159 3,748,253
Cash ........................................ 133 -- 6,966
Foreign currency (cost $0; $0; $0; $0; $0 $0;
$0; $1,571,384; $101,442; $53,518; $523;
$0 and $0, respectively) ................. 528 -- --
Receivable for investments sold ............. 53,869 5,030,941 --
Income receivables .......................... 56,932 2,170,648 5,735
Receivable for fund shares sold ............. -- -- --
Variation margin receivable ................. -- -- --
---------------------------------------------------------------------------------------------------
TOTAL ASSETS ............................. 8,482,486 236,674,825 3,760,954
---------------------------------------------------------------------------------------------------
LIABILITIES
Distributions payable to shareholders ....... -- 173,767 2,771
Payable upon return of securities loaned .... -- 28,982,399 --
Payable for investments purchased ........... 9,386 18,171,343 --
Payable for fund shares redeemed ............ 24,576 125,000 3,509
Payable to GEAM ............................. 3,212 89,054 923
Variation margin payable .................... -- -- --
Deferred country taxes payable .............. -- -- --
---------------------------------------------------------------------------------------------------
TOTAL LIABILITIES ........................ 37,174 47,541,563 7,203
---------------------------------------------------------------------------------------------------
NET ASSETS ..................................... $8,445,312 $189,133,262 $3,753,751
---------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Capital paid in ............................. 7,731,495 193,222,665 3,753,783
Undistributed (overdistributed)
net investment income .................... 38,007 (3,536) 39
Accumulated net realized gain (loss) ........ 99,727 (2,966,473) (71)
Net unrealized appreciation/ (depreciation) on:
Investments .............................. 576,076 (1,119,394) --
Futures .................................. -- -- --
Foreign currency related transactions .... 7 -- --
---------------------------------------------------------------------------------------------------
NET ASSETS ..................................... $8,445,312 $189,133,262 $3,753,751
---------------------------------------------------------------------------------------------------
Shares outstanding ($.001 par value) ........... 770,890 20,009,027 3,753,783
Net asset value, offering and redemption
price per share ............................. $10.96 $9.45 $1.00
</TABLE>
------------
See Notes to Financial Statements.
64 & 65
<PAGE>
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PREMIER
U.S. S&P 500 GROWTH VALUE MID-CAP
EQUITY INDEX EQUITY EQUITY GROWTH
FUND FUND FUND(A) FUND(B) FUND
-----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME:
<S> <C> <C> <C> <C> <C>
Dividends................................... $ 1,342,893 $ 256,971 $ 23,369 $ 51,456 $ 57,942
Interest.................................... 259,855 82,102 26,155 24,630 64,567
Less: Foreign taxes withheld...................... (2,667) (333) (70) (143) (738)
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME...................................... 1,600,081 338,740 49,454 75,943 121,771
-----------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Advisory and administration fees............ 453,430 34,063 29,222 20,716 50,169
Trustees' fees.................................... 3,135 453 141 26 264
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES.................................... 456,565 34,516 29,363 20,742 50,433
-----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME............................. 1,143,516 304,224 20,091 55,201 71,338
-----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
REALIZED GAIN (LOSS) ON:.................
Investments........................... 11,361,788 5,944,749 259,960 41,979 73,654
Futures............................... 405,350 (31,974) (28,344) (40,535) 83,210
Written options....................... -- -- -- -- --
Foreign currency related
transactions ...................... 300 -- -- 590 --
INCREASE (DECREASE) IN UNREALIZED
APPRECIATION/DEPRECIATION ON:
Investments........................... 15,765,259 7,568,632 2,600,303 1,890,949 5,122,610
Futures............................... 37,788 288,900 7,700 10,725 14,151
Foreign currency related
transactions ...................... (27) -- -- 7 --
-----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments .............................. 27,570,458 13,770,307 2,839,619 1,903,715 5,293,625
-----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ..................... $28,713,974 $14,074,531 $2,859,710 $1,958,916 $5,364,963
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MID-CAP SMALL-CAP INTERNATIONAL EUROPE EMERGING
VALUE EQUITY VALUE EQUITY EQUITY EQUITY MARKETS
FUND FUND FUND FUND FUND
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME:
<S> <C> <C> <C> <C> <C>
Dividends................................... $ 77,434 $ 41,445 $ 1,179,513 $ 57,157 $ 40,215
Interest.................................... 11,339 19,941 324,010 8,979 9,986
Less: Foreign taxes withheld...................... -- -- (181,400) (9,737) (4,442)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME...................................... 88,773 61,386 1,322,123 56,399 45,759
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Advisory and administration fees............ 34,190 47,955 845,342 47,812 67,508
Trustees' fees.................................... 174 175 3,481 173 153
------------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES.................................... 34,364 48,130 848,823 47,985 67,661
------------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME............................. 54,409 13,256 473,300 8,414 (21,902)
------------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
REALIZED GAIN (LOSS) ON:.................
Investments........................... (86,365) 2,732,478 37,519,301 2,006,981 1,204,647
Futures............................... -- -- -- -- --
Written options....................... -- 15,028 -- -- --
Foreign currency related
transactions ...................... -- -- (479,895) (13,078) (7,094)
INCREASE (DECREASE) IN UNREALIZED
APPRECIATION/DEPRECIATION ON:
Investments........................... 1,057,350 965,079 26,237,893 2,757,770 4,391,750
Futures............................... -- -- -- -- --
Foreign currency related
transactions ...................... -- -- (37,298) (1,264) 2,590
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments .............................. 970,985 3,712,585 63,240,001 4,750,409 5,591,893
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ..................... $1,025,394 $3,725,841 $63,713,301 $4,758,823 $5,569,991
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC MONEY
INVESTMENT INCOME MARKET
FUND(A) FUND FUND
--------------------------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME:
<S> <C> <C> <C>
Dividends................................... $ 13,970 $ 25,565 $ --
Interest.................................... 84,485 3,920,572 100,079
Less: Foreign taxes withheld...................... (260) -- --
--------------------------------------------------------------------------------------------------
TOTAL INCOME...................................... 98,195 3,946,137 100,079
--------------------------------------------------------------------------------------------------
EXPENSES:
Advisory and administration fees............ 15,088 162,222 4,377
Trustees' fees.................................... 100 1,671 98
--------------------------------------------------------------------------------------------------
TOTAL EXPENSES.................................... 15,188 163,893 4,475
--------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME............................. 83,007 3,782,244 95,604
--------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
REALIZED GAIN (LOSS) ON:.................
Investments........................... 98,412 (2,023,906) (44)
Futures............................... -- -- --
Written options....................... -- 1,770 --
Foreign currency related
transactions ...................... 1,315 -- --
INCREASE (DECREASE) IN UNREALIZED
APPRECIATION/DEPRECIATION ON:
Investments........................... 576,076 1,377,785 --
Futures............................... -- -- --
Foreign currency related
transactions ...................... 7 -- --
--------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments .............................. 675,810 (644,351) (44)
--------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ..................... $758,817 $3,137,893 $ 95,560
--------------------------------------------------------------------------------------------------
<FN>
(a) For the period October 31, 1999 (inception) through March 31, 2000.
(b) For the period February 2, 2000 (inception) through March 31, 2000.
</FN>
</TABLE>
See Notes to Financial Statements.
66 & 67
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. S&P 500 PREMIER
EQUITY INDEX GROWTH EQUITY
FUND FUND FUND
------------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR SIX MONTHS ENDED YEAR PERIOD ENDED
3/31/00 ENDED 3/31/00 ENDED 3/31/00
(UNAUDITED) 9/30/99 (UNAUDITED) 9/30/99 (UNAUDITED)(A)
------------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C> <C> <C> <C> <C>
Net investment income................. $ 1,143,516 $ 1,339,135 $ 304,224 $ 344,103 $ 20,091
Net realized gain (loss) on investments,
futures, written options, and foreign
currency related transactions ..... 11,767,438 11,323,757 5,912,775 603,902 231,616
Net increase (decrease) in unrealized
appreciation/depreciation .......... 15,803,020 19,711,100 7,857,532 4,751,833 2,608,003
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from operations 28,713,974 32,373,992 14,074,531 5,699,838 2,859,710
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................. (1,547,800) (1,388,813) (357,000) (320,568) (11,000)
Return of capital..................... -- -- -- -- --
Net realized gains.................... (13,714,925) (2,679,706) (534,955) -- --
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS..................... (15,262,725) (4,068,519) (891,955) (320,568) (11,000)
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
operations and distributions ......... 13,451,249 28,305,473 13,182,576 5,379,270 2,848,710
------------------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Proceeds from sale of shares.......... 102,759,989 22,447,898 108,991,068 500,000 20,304,190
Value of distributions reinvested..... 15,262,919 4,068,514 891,957 320,568 11,119
Cost of shares redeemed............... (22,728,207) (8,394,578) (1,859,103) (26,849) (1,214,575)
------------------------------------------------------------------------------------------------------------------------------------
Net increase(decrease)from share transactions 95,294,701 18,121,834 108,023,922 793,719 19,100,734
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS. 108,745,950 46,427,307 121,206,498 6,172,989 21,949,444
NET ASSETS
Beginning of period..................... 160,979,820 114,552,513 26,359,414 20,186,425 --
------------------------------------------------------------------------------------------------------------------------------------
End of period........................... $269,725,770 $160,979,820 $147,565,912 $26,359,414 $21,949,444
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
UNDISTRIBUTED (OVERDISTRIBUTED) NET
INVESTMENT INCOME, END OF PERIOD ....... $ 648,567 $ 1,052,851 $ 217,429 $ 270,205 $ 9,091
------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN FUND SHARES:
Shares sold by subscription........... 7,508,953 1,718,638 7,512,422 34,868 1,924,095
Issued for distributions reinvested... 1,143,290 349,529 60,884 26,105 1,028
Shares redeemed....................... (1,725,188) (650,568) (116,910) (1,902) (109,825)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in fund shares..... 6,927,055 1,417,599 7,456,396 59,071 1,815,298
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MID-CAP
VALUE MID-CAP VALUE
EQUITY GROWTH EQUITY
FUND FUND FUND
------------------------------------------------------------------------------------------------------------------------------------
PERIOD ENDED SIX MONTHS ENDED YEAR SIX MONTHS ENDED PERIOD
3/31/00 3/31/00 ENDED 3/31/00 ENDED
(UNAUDITED)(B) (UNAUDITED) 9/30/99 (UNAUDITED) 9/30/99(C)
------------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C> <C> <C> <C> <C>
Net investment income................. $ 55,201 $ 71,338 $ 82,290 $ 54,409 $ 79,149
Net realized gain (loss) on investments,
futures, written options, and foreign
currency related transactions ..... 2,034 156,864 157,720 (86,365) (104,964)
Net increase (decrease) in unrealized
appreciation/depreciation .......... 1,901,681 5,136,761 1,764,331 1,057,350 (104,470)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from operations 1,958,916 5,364,963 2,004,341 1,025,394 (130,285)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................. -- (93,000) (80,475) (115,000) --
Return of capital..................... -- -- -- -- --
Net realized gains.................... -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS..................... -- (93,000) (80,475) (115,000) --
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
operations and distributions ......... 1,958,916 5,271,963 1,923,866 910,394 (130,285)
------------------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Proceeds from sale of shares.......... 30,164,902 726,159 100,002 -- 33,107,697
Value of distributions reinvested..... -- 93,000 80,475 115,004 --
Cost of shares redeemed............... -- -- -- -- (22,795,498)
------------------------------------------------------------------------------------------------------------------------------------
Net increase(decrease)from share transactions 30,164,902 819,159 180,477 115,004 10,312,199
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS. 32,123,818 6,091,122 2,104,343 1,025,398 10,181,914
NET ASSETS
Beginning of period..................... -- 15,312,841 13,208,498 10,181,914 --
------------------------------------------------------------------------------------------------------------------------------------
End of period........................... $32,123,818 $21,403,963 $15,312,841 $11,207,312 $10,181,914
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
UNDISTRIBUTED (OVERDISTRIBUTED) NET
INVESTMENT INCOME, END OF PERIOD ....... $ 55,201 $ 37,431 $ 59,093 $ 18,558 $ 79,149
------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN FUND SHARES:
Shares sold by subscription........... 3,044,794 67,439 8,795 -- 3,042,924
Issued for distributions reinvested... -- 8,201 8,427 11,080 --
Shares redeemed....................... -- -- -- -- (2,015,274)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in fund shares..... 3,044,794 75,640 17,222 11,080 1,027,650
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SMALL-CAP
VALUE EQUITY
FUND
--------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR
3/31/00 ENDED
(UNAUDITED) 9/30/99
--------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C> <C>
Net investment income................. $ 13,256 $ 12,735
Net realized gain (loss) on investments,
futures, written options, and foreign
currency related transactions ..... 2,747,506 196,098
Net increase (decrease) in unrealized
appreciation/depreciation .......... 965,079 1,051,365
--------------------------------------------------------------------------------------
Net increase (decrease) from operations 3,725,841 1,260,198
--------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................. (22,210) (33,674)
Return of capital..................... -- --
Net realized gains.................... (303,654) --
--------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS..................... (325,864) (33,674)
--------------------------------------------------------------------------------------
Increase (decrease) in net assets from
operations and distributions ......... 3,399,977 1,226,524
--------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Proceeds from sale of shares.......... 52,823,883 20,948,085
Value of distributions reinvested..... 325,869 33,670
Cost of shares redeemed............... (49,418,725) (20,977,821)
--------------------------------------------------------------------------------------
Net increase(decrease)from share transactions 3,731,027 3,934
--------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS. 7,131,004 1,230,458
NET ASSETS
Beginning of period..................... 10,286,924 9,056,466
--------------------------------------------------------------------------------------
End of period........................... $17,417,928 $10,286,924
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
UNDISTRIBUTED (OVERDISTRIBUTED) NET
INVESTMENT INCOME, END OF PERIOD ....... $ 2,511 $ 11,465
--------------------------------------------------------------------------------------
CHANGES IN FUND SHARES:
Shares sold by subscription........... 4,459,141 2,029,729
Issued for distributions reinvested... 30,173 3,609
Shares redeemed....................... (4,154,697) (2,032,645)
--------------------------------------------------------------------------------------
Net increase (decrease) in fund shares..... 334,617 693
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
68 & 69
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EUROPE
EQUITY EQUITY
FUND FUND
--------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR SIX MONTHS ENDED PERIOD
3/31/00 ENDED 3/31/00 ENDED
(UNAUDITED) 9/30/99 (UNAUDITED) 9/30/99(D)
--------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income...................... $ 473,300 $ 1,468,999 $ 8,414 $ 116,193
Net realized gain (loss) on investments, futures,
written options, and foreign currency related
transactions .......................... 37,039,406 5,581,781 1,993,903 (107,528)
Net increase (decrease) in unrealized
appreciation/depreciation ............. 26,200,595 26,399,950 2,756,506 (39,031)
--------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from operations.... 63,713,301 33,450,730 4,758,823 (30,366)
--------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income...................... (1,398,016) (1,386,768) (100,156) --
Return of capital.......................... -- -- -- --
Net realized gains......................... (7,534,112) (4,011,536) -- --
--------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS........................ (8,932,128) (5,398,304) (100,156) --
--------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
operations and distributions ........... 54,781,173 28,052,426 4,658,667 (30,366)
--------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Proceeds from sale of shares............... 154,479,498 63,250,137 81,861,633 20,540,050
Value of distributions reinvested.......... 8,932,087 5,398,304 100,156 --
Cost of shares redeemed.................... (29,601,050) (13,140,485) (81,585,572) (10,430,000)
--------------------------------------------------------------------------------------------------------------------------
Net increase(decrease) from share transactions 133,810,535 55,507,956 376,217 10,110,050
--------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.... 188,591,708 83,560,382 5,034,884 10,079,684
NET ASSETS.................................
Beginning of period........................ 197,974,179 114,413,797 10,079,684 --
End of period.............................. $386,565,887 $197,974,179 $15,114,568 $10,079,684
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
UNDISTRIBUTED (OVERDISTRIBUTED) NET
INVESTMENT INCOME, END OF PERIOD ........ $ 169,637 $ 1,094,353 $ (19,684) $ 72,058
--------------------------------------------------------------------------------------------------------------------------
CHANGES IN FUND SHARES:
Shares sold by subscription................ 10,891,736 5,068,474 6,140,703 2,010,552
Issued for distributions reinvested........ 655,807 489,869 8,466 --
Shares redeemed............................ (2,072,450) (1,081,713) (6,121,055) (1,000,000)
--------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in fund shares..... 9,475,093 4,476,630 28,114 1,010,552
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
EMERGING STRATEGIC
MARKETS INVESTMENT INCOME
FUND FUND FUND
------------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR PERIOD ENDED SIX MONTHS ENDED YEAR
3/31/00 ENDED 3/31/00 3/31/00 ENDED
(UNAUDITED) 9/30/99 (UNAUDITED)(A) (UNAUDITED) 9/30/99
------------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C> <C> <C> <C> <C>
Net investment income...................... $ (21,902) $ 8,272 $ 83,007 $ 3,782,244 $ 4,402,558
Net realized gain (loss) on investments, futures,
written options, and foreign currency related
transactions .......................... 1,197,553 (570,834) 99,727 (2,022,136) (632,492)
Net increase (decrease) in unrealized
appreciation/depreciation ............. 4,394,340 4,091,375 576,083 1,377,785 (4,143,419)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from operations.... 5,569,991 3,528,813 758,817 3,137,893 (373,353)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income...................... (8,580) (8,870) (45,000) (3,774,722) (4,410,028)
Return of capital.......................... -- (6,199) -- -- --
Net realized gains......................... -- -- -- -- (1,229,810)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS........................ (8,580) (15,069) (45,000) (3,774,722) (5,639,838)
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
operations and distributions ........... 5,561,411 3,513,744 713,817 (636,829) (6,013,191)
------------------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Proceeds from sale of shares............... 1,025,000 -- 9,317,576 92,142,769 24,422,296
Value of distributions reinvested.......... 8,578 15,068 44,996 3,665,898 5,608,108
Cost of shares redeemed.................... (139,957) -- (1,631,077) (1,419,925) (80,000)
------------------------------------------------------------------------------------------------------------------------------------
Net increase(decrease) from share transactions 893,621 15,068 7,731,495 94,388,742 29,950,404
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.... 6,455,032 3,528,812 8,445,312 93,751,913 23,937,213
NET ASSETS.................................
Beginning of period........................ 8,592,148 5,063,336 -- 95,381,349 71,444,136
End of period.............................. $15,047,180 $8,592,148 $8,445,312 $189,133,262 $95,381,349
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
UNDISTRIBUTED (OVERDISTRIBUTED) NET
INVESTMENT INCOME, END OF PERIOD ........ $ (44,638) $ (14,156) $ 38,007 $ (3,536) $ (11,058)
------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN FUND SHARES:
Shares sold by subscription................ 75,174 -- 922,715 9,799,799 2,536,572
Issued for distributions reinvested........ 583 1,957 4,373 388,976 565,769
Shares redeemed............................ (7,722) -- (156,198) (150,946) (8,359)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in fund shares..... 68,035 1,957 770,890 10,037,829 3,093,982
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
MONEY
MARKET
FUND
------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR
3/31/00 ENDED
(UNAUDITED) 9/30/99
------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C> <C>
Net investment income...................... $ 95,604 $ 332,821
Net realized gain (loss) on investments, futures,
written options, and foreign currency related
transactions .......................... (44) (27)
Net increase (decrease) in unrealized
appreciation/depreciation ............. -- --
------------------------------------------------------------------------------
Net increase (decrease) from operations.... 95,560 332,794
------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income...................... (95,563) (332,862)
Return of capital.......................... -- --
Net realized gains......................... -- --
------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS........................ (95,563) (332,862)
------------------------------------------------------------------------------
Increase (decrease) in net assets from
operations and distributions ........... (3) (68)
------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Proceeds from sale of shares............... 4,171,888 --
Value of distributions reinvested.......... 92,010 332,504
Cost of shares redeemed.................... (6,246,221) (1,698,585)
------------------------------------------------------------------------------
Net increase(decrease) from share transactions (1,982,323) (1,366,081)
------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.... (1,982,326) (1,366,149)
NET ASSETS.................................
Beginning of period........................ 5,736,077 7,102,226
End of period.............................. $3,753,751 $5,736,077
------------------------------------------------------------------------------
------------------------------------------------------------------------------
UNDISTRIBUTED (OVERDISTRIBUTED) NET
INVESTMENT INCOME, END OF PERIOD ........ $ 39 $ (2)
------------------------------------------------------------------------------
CHANGES IN FUND SHARES:
Shares sold by subscription................ 4,171,888 --
Issued for distributions reinvested........ 92,010 332,504
Shares redeemed............................ (6,246,221) (1,698,585)
------------------------------------------------------------------------------
Net increase (decrease) in fund shares..... (1,982,323) (1,366,081)
------------------------------------------------------------------------------
<FN>
(a) For the period October 31, 1999 (inception) through March 31, 2000.
(b) For the period February 2, 2000 (inception) through March 31, 2000.
(c) For the period December 31, 1998 (inception) through September 30, 1999.
(d) For the period January 29, 1999 (inception) through September 30, 1999.
</FN>
</TABLE>
See Notes to Financial Statements.
70 & 71
<PAGE>
NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
1. ORGANIZATION OF THE FUNDS
GE Institutional Funds (the "Trust") is registered under the Investment Company
Act of 1940 as amended (the "1940 Act") as an open-end management investment
company. The Trust was organized as a Delaware business trust on May 23, 1997,
and is authorized to issue an unlimited number of shares. It is currently
comprised of fifteen investment funds (each a "Fund" and collectively the
"Funds") although only the following thirteen are currently being offered: U.S.
Equity Fund, S&P 500 Index Fund, Premier Growth Equity Fund, Value Equity Fund,
Mid-Cap Growth Fund, Mid-Cap Value Equity Fund, Small-Cap Value Equity Fund,
International Equity Fund, Europe Equity Fund, Emerging Markets Fund, Strategic
Investment Fund, Income Fund and Money Market Fund. The Funds (except Money
Market Fund) are presently authorized to issue two classes of shares --- the
Investment Class and the Service Class. However, as of March 31, 2000, only the
Investment Class has investors. The Trust expects that most of the time each
Fund will have relatively few shareholders (as compared with most mutual funds),
but that these shareholders will invest substantial amounts in a Fund (minimum
initial investment requirements are described in the current prospectus of the
Funds).
These financial statements only represent the activities of the Investment
Class.
GE Investment Management Incorporated, the Funds' investment advisor and a
wholly owned subsidiary of General Electric Company, changed its name to GE
Asset Management Incorporated ("GEAM") effective January 28, 2000.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions at
the date of the financial statements. Actual results may differ from those
estimates.
The following summarizes the significant accounting policies of the Trust:
SECURITY VALUATION AND TRANSACTIONS
Securities for which exchange (or NASDAQ) quotations are readily available are
valued at the last sale price, or if no sales occurred on that day, at the last
quoted bid price. Certain fixed income securities are valued by a dealer or by a
pricing service based upon a matrix system, which considers market transactions
as well as dealer supplied valuations. Short-term investments maturing within 60
days are valued at amortized cost or original cost plus accrued interest, both
of which approximate current value. Fund positions that cannot be valued as set
forth above are valued at fair value determined in good faith under procedures
approved by the Board of Trustees of the Funds.
In accordance with Rule 2a-7 of the 1940 Act, the Money Market Fund values
securities initially at cost and, thereafter, securities are assumed to have a
constant amortization to maturity of any discount or premium. Amortized cost
approximates fair value.
Security transactions are accounted for as of the trade date. Realized gains and
losses on investments sold are recorded on the basis of identified cost for both
financial statement and federal tax purposes.
REPURCHASE AGREEMENTS
Each of the Funds may enter into repurchase agreements. The Funds' custodian
takes possession of the collateral pledged for investments in repurchase
agreements on behalf of the Funds. The Funds value the underlying collateral
daily on a mark-to-market basis to determine that the value, including accrued
interest, is at least equal to 102% of the repurchase price. In the event the
seller defaults and the value of the security declines, or if the seller enters
an insolvency proceeding, realization of the collateral by the Funds may be
delayed or limited.
SECURITY LENDING
The Funds may loan securities to brokers, dealers, and financial institutions
determined by GEAM to be creditworthy, subject to certain limitations. The Funds
receive compensation in the form of fees in addition to the interest and
dividends on the loaned securities during the term of the loan. The loans of
securities are secured by collateral in the form of cash or other liquid assets,
which are segregated and maintained with the custodian in an amount at least
equal to 102% of the current market value of the loaned securities. During the
term of the loan, the Funds will receive any gain or loss in the market value of
its loaned securities and of securities in which cash collateral is invested net
of any rebate. In the event the counterparty (borrower) does not meet its
contracted obligation to return the securities, the Fund may be exposed to the
risk of loss
72
<PAGE>
NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
of reacquiring the loaned securities at prevailing market prices using the
proceeds of the sale of the collateral.
FOREIGN CURRENCY
Accounting records of the Funds are maintained in U.S. dollars. Investment
securities and other assets and liabilities denominated in foreign currency are
translated into U.S. dollars at the prevailing rates of exchange at period end.
Purchases and sales of securities, income receipts and expense payments
denominated in foreign currencies are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
The Funds do not isolate the portion of the results of operations resulting from
changes in foreign exchange rates from the fluctuations arising from changes in
market prices of securities during the period. Such fluctuations are included in
net realized or unrealized gain or loss from investments.
Net realized gains or losses on foreign currency transactions represent net
gains or losses on sales and maturities of foreign currency contracts,
disposition of foreign currencies, the difference between the amount of net
investment income and withholding taxes accrued and the U.S. dollar amount
actually received and paid, and gains or losses between the trade and settlement
date on purchases and sales of securities. Net unrealized foreign exchange gains
and losses arising from changes in the value of other assets and liabilities as
a result of changes in foreign exchange rates are included as increases or
decreases in unrealized appreciation/depreciation on foreign currency related
transactions.
FINANCIAL FUTURES CONTRACTS AND OPTIONS
Each of the Funds, other than the Small-Cap Value Equity Fund and the Money
Market Fund, may invest in financial futures contracts and each of the Funds,
other than the Money Market Fund, may purchase and write options, subject to
certain limitations. The Funds may invest in futures and options contracts to
manage their exposure to the stock and bond markets and fluctuations in currency
values. Buying futures, writing puts and buying calls tend to increase a Fund's
exposure to the underlying instrument. Selling futures, buying puts and writing
calls tend to decrease a Fund's exposure to the underlying instrument, or hedge
other Fund investments. A Fund will not enter into a transaction involving
futures and options on futures for speculative purposes. The Fund's risks in
using these contracts include changes in the value of the underlying
instruments, non-performance of the counterparties under the contracts' terms
and changes in the liquidity of secondary market for the contracts. Futures
contracts are valued at the settlement price established each day by the board
of trade or exchange on which they principally trade. Options are valued at the
last sale price, or if no sales occurred on that day, at the last quoted bid
price.
Upon entering into a financial futures contract, the Funds are required to
pledge to the broker an amount of cash and/or other assets equal to a certain
percentage of the contract amount, known as initial margin deposit. Subsequent
payments, known as variation margins, are made or received by the Funds each
day, depending on the daily fluctuation in the fair value of the underlying
security. The Funds record an unrealized gain or loss equal to the daily
variation margin. Should market conditions move unexpectedly, the Fund may not
achieve the anticipated benefits of the financial futures contracts and may
incur a loss. The Funds recognize a realized gain or loss on the expiration or
closing of a futures contract.
When a Fund writes an option, the amount of the premium received is recorded as
a liability and is subsequently adjusted to the current fair value of the option
written. Premiums received from writing options that expire unexercised are
treated by the Funds on the expiration date as realized gains from investments.
The difference between the premium and the amount paid on effecting a closing
purchase transaction, including brokerage commissions, is also treated as a
realized gain, or if the premium is less than the amount paid for the closing
purchase, as a realized loss. When an option is exercised, the proceeds from the
sale of the underlying security or the cost basis of the securities purchased is
adjusted by the original premium received or paid.
SWAP CONTRACTS
The Funds may engage in swap transactions, specifically interest rate, currency,
equity, index and total return swaps as part of their investment strategies.
Swaps involve the exchange by the Funds with another party of their respective
commitments to pay or receive interest, effective return or total return
throughout the lives of the agreements. The interest, effective return or total
return to be paid or received on swaps is recognized as net interest expense or
net interest income on the Statement of Operations over the life of the
agreement, while related payables and receivables are recorded gross on the
Statement of Assets and Liabilities. Unrealized gains are reported as assets and
unrealized losses are reported as liabilities on the Statement of Assets and
Liabilities. A real-
73
<PAGE>
NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
ized gain or loss is recorded upon termination of the swap agreement. Swap
agreements are stated at fair value. Notional principal amounts are used to
express the extent of involvement in these transactions, but the amounts
potentially subject to credit risk are much smaller.
WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS
The Funds may purchase or sell securities on a when-issued or forward commitment
basis. These transactions are arrangements in which the Funds purchase and sell
securities with payment and delivery scheduled a month or more after entering
into the transaction. The price of the underlying securities and the date when
these securities will be delivered and paid for are fixed at the time the
transaction is negotiated. Losses may arise due to changes in the market value
of the underlying securities or if the counterparty does not perform under the
contract. In connection with such purchases, the Funds maintain cash or liquid
assets in an amount equal to purchase commitments for such underlying securities
until settlement date and for sales commitments the Funds maintain equivalent
deliverable securities as "cover" for the transaction. Unsettled commitments are
valued at current market value of the underlying security. Daily fluctuations in
the value of such contracts are recorded as unrealized gains or losses. The
Funds will not enter into such agreements for the purpose of investment
leverage.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Certain Funds may enter into forward foreign currency exchange contracts to
facilitate transactions in foreign denominated securities and to manage the
Fund's currency exposure. Forward foreign currency exchange contracts are valued
at the mean between the bid and the offered forward rates as last quoted by a
recognized dealer. The aggregate principal amounts of the contracts are not
recorded in the Fund's financial statements. Such amounts appear under the
caption forward foreign currency exchange contracts in the Schedule of
Investments. Fluctuations in the value of the contracts are recorded in the
Statement of Assets and Liabilities as an asset (or liability) and in the
Statement of Operations as unrealized appreciation (depreciation) until the
contracts are closed, when they are recorded as realized foreign currency
related transactions gains or losses. The Fund's risks in using these contracts
include changes in the value of foreign currency or the possibility that the
counterparties do not perform under the contracts' terms. When a Fund enters
into a forward foreign currency exchange contract, it is required to segregate
cash or liquid securities with its custodian in an amount equal to the value of
the Fund's total assets committed to the consummation of the forward contract.
If the value of the segregated securities declines, additional cash or
securities is segregated so that the value of the account will equal the amount
of the Fund's commitment with respect to the contract.
INVESTMENT IN FOREIGN MARKETS
Investing in foreign markets may involve special risks and considerations not
typically associated with investing in the United States. These risks include
revaluation of currencies, high rates of inflation, repatriation on income and
capital, and adverse political and economic developments. Moreover, securities
issued in these markets may be less liquid, subject to government ownership
controls, tariffs and taxes, subject to delays in settlements, and their prices
may be more volatile.
The Funds may be subject to capital gains and repatriation taxes imposed by
certain countries in which they invest. Such taxes are generally based on income
and/or capital gains earned or repatriated. Taxes are accrued based on net
investment income, net realized gains and net unrealized appreciation as income
and/or capital gains are earned. At March 31, 2000, the Emerging Markets Fund
has recorded an accrual in the amount of $22,706 for capital gains taxes
incurred, and a deferred tax accrual of $216,035 in respect of unrealized
appreciation on applicable investments in securities. These accruals are
included in net realized and unrealized gain (loss) on investments in the
Statements of Operations.
INCOME TAXES
The Funds intend to comply with all sections of the Internal Revenue Code
applicable to regulated investment companies including the distribution of
substantially all of their taxable net investment income, and net realized
capital gains to their shareholders. Therefore, no provision for federal income
tax has been made. Each Fund is treated as a separate taxpayer for federal
income tax purposes.
As of March 31, 2000 the following Funds have capital loss carryovers as
indicated below. The capital loss carryover is available to offset future
realized capital gains to the extent provided in the Internal Revenue Code and
regulations thereunder. To the extent that these carryover losses are used to
offset future capital gains, it is probable that the gains so offset will not be
distributed to shareholders because they would be taxable as ordinary income.
74
<PAGE>
NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
FUND AMOUNT EXPIRES
-------------------------------------------------------------
Emerging Markets Fund $375,590 2007
Mid-Cap Growth Fund 475,601 2007
Any net capital and currency losses incurred after October 31, within each
Fund's tax year, are deemed to arise on the first day of the Fund's next tax
year if the Fund so elects to defer such losses.
The Funds incurred and elected to defer losses after October 31, 1998 as
follows:
FUND CURRENCY CAPITAL
-------------------------------------------------------------
U.S. Equity Fund $ 1,581 $ --
Mid-Cap Growth Fund 5 --
Mid-Cap Value Equity Fund -- 104,964
Small Cap Value Equity Fund -- 41,030
International Equity Fund 423,145 --
Europe Equity Fund 44,135 56,174
Emerging Markets Fund 29,031 237,049
Income Fund -- 878,518
Money Market Fund -- 27
DISTRIBUTIONS TO SHAREHOLDERS
The Income Fund and Money Market Fund declare investment income dividends daily
and pay them monthly. All other Funds declare and pay dividends from net
investment income annually. All Funds declare and pay net realized capital gains
in excess of capital loss carryforwards distributions annually. The character of
income and gains to be distributed is determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include treatment of realized and unrealized gains and losses
on forward foreign currency exchange contracts, paydown gains and losses on
mortgage-backed securities, and losses deferred due to wash sale transactions.
Reclassifications are made to the Funds' capital accounts to reflect income and
gains available for distribution (or available capital loss carryovers) under
income tax regulations. These reclassifications have no impact on net investment
income, realized gains or losses, or net asset value of the Funds. The
calculation of net investment income per share in the Financial Highlights table
excludes these adjustments.
INVESTMENT INCOME
Corporate actions (including cash dividends) are recorded, net of
non-reclaimable tax withholdings, on the ex-dividend date, except for certain
foreign corporate actions which are recorded as soon after ex-dividend date as
such information becomes available. Interest income is recorded on the accrual
basis. All discounts and premiums on taxable bonds amortized to call or maturity
date, whichever is shorter, using the effective yield method.
EXPENSES
The Funds pay a "unitary fee" equivalent to the Funds' advisory and
administration fee. This fee includes any normal operating expenses payable by
the Funds, except for fees paid to the Trust's independent Trustees.
3. SECURITY LENDING
At March 31, 2000, the GE Institutional Income Fund, which is the only fund that
participated in securities lending, had loaned securities having a value,
including accrued interest, of approximately $28,696,678 and received
$28,982,399 in cash as collateral for loans.
4. FEES AND COMPENSATION PAID TO AFFILIATES
ADVISORY AND ADMINISTRATION FEES
Compensation of GEAM for investment advisory and administrative services, is
paid monthly based on the average daily net assets of each Fund. The advisory
and administrative fee is stated in the following schedule:
BASED ON AVERAGE DAILY NET ASSETS
AVERAGE DAILY ADVISORY AND
NET ASSETS OF FUND ADMINISTRATION FEES*
------------------------------------------------------------------
U.S. Equity Fund First $25 million .55%
Premier Growth Next $25 million .45%
Equity Fund Over $50 million .35%
Value Equity Fund
Mid-Cap Growth Fund
S&P 500 Index Fund All assets .15%
Mid-Cap Value First $25 million .65%
Equity Fund Next $25 million .60%
Over $50 million .55%
Small-Cap Value First $25 million .70%
Equity Fund Next $25 million .65%
Over $50 million .60%
International Equity First $25 million .75%
Fund Next $50 million .65%
75
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NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
BASED ON AVERAGE DAILY NET ASSETS
AVERAGE DAILY ADVISORY AND
NET ASSETS OF FUND ADMINISTRATION FEES*
------------------------------------------------------------------
Europe Equity Fund Over $75 million .55%
Emerging Markets First $50 million 1.05%
Fund Over $50 million .95%
Strategic Investment First $25 million .45%
Fund Next $25 million .40%
Over $50 million .35%
Income Fund First $25 million .35%
Next $25 million .30%
Next $50 million .25%
Over $100 million .20%
Money Market First $25 million .25%
Fund Next $25 million .20%
Next $50 million .15%
Over $100 million .10%
* FROM TIME TO TIME, GEAM MAY WAIVE OR REIMBURSE ADVISORY OR
ADMINISTRATIVE FEES PAID BY A FUND.
TRUSTEE COMPENSATION
The Funds pay no compensation to their Trustees who are officers or employees of
GEAM or its affiliates. Trustees who are not such officers or employees receive
an annual fee of $5,000 and an additional fee of $500 per Trustees' meeting
attended in person.
5. SUB-ADVISORY FEES
Pursuant to investment sub-advisory agreements with GEAM, State Street Global
Advisers, ("SSgA"), a division of State Street Bank and Trust Company, is the
sub-adviser to the S&P 500 Index Fund; Palisade Capital Management, LLC
("Palisade") is the sub-adviser to the Small-Cap Value Equity Fund; NWQ
Investment Management Company ("NWQ") is the sub-adviser to the Mid-Cap Value
Equity Fund.
SSgA, Palisade and NWQ are responsible for the day-to-day portfolio management
of the assets of the S&P 500 Index Fund, the Small-Cap Value Equity Fund and the
Mid-Cap Value Equity Fund, respectively, including the responsibility for making
decisions to buy, sell or hold a particular security, under the general
supervision of GEAM and the Board.
For their services, GEAM pays SSgA, Palisade and NWQ monthly sub-advisory fees
which are calculated as a percentage of the average daily net assets of the
respective Funds.
6. AGGREGATE UNREALIZED APPRECIATION AND DEPRECIATION
Aggregate gross unrealized appreciation/(depreciation) of investments for each
Fund at March 31, 2000, were as follows:
NET
GROSS GROSS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
APPRECIATION DEPRECIATION (DEPRECIATION)
----------------------------------------------------------------
U.S. Equity Fund $49,887,720 $13,081,790 $36,805,930
S&P 500
Index Fund 15,895,606 2,358,127 13,537,479
Premier Growth
Equity Fund 3,067,944 467,641 2,600,303
Value Equity Fund 2,508,095 617,146 1,890,949
Mid-Cap
Growth Fund 7,495,127 1,983,492 5,511,635
Mid-Cap Value
Equity Fund 2,323,885 1,371,005 952,880
Small-Cap Value
Equity Fund 2,187,667 931,092 1,256,575
International
Equity Fund 54,018,652 16,287,904 37,730,748
Europe Equity Fund 3,534,785 816,915 2,717,870
Emerging Markets
Fund 6,610,199 427,500 6,182,699
Strategic Investment
Fund 817,030 240,954 576,076
Income Fund 940,846 2,060,240 (1,119,394)
The aggregate cost of each Fund's investments was substantially the same for
book and federal income tax purposes at March 31, 2000.
7. OPTIONS
During the period ended March 31, 2000, the following option contracts were
written:
INCOME FUND
-----------------------------
NUMBER
OF CONTRACTS PREMIUM
----------------------------------------------------------------
Balance as of September 30, 1999 -- $ --
Written 2,120 4,638
Closed and Expired (2,120) (4,638)
Exercised -- --
----------------------------------------------------------------
Balance as of March 31, 2000 -- $ --
----------------------------------------------------------------
76
<PAGE>
NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
SMALL-CAP VALUE FUND
-----------------------------
NUMBER
OF CONTRACTS PREMIUM
----------------------------------------------------------------
Balance as of September 30, 1999 -- $ --
Written 146 64,013
Closed and Expired (41) (14,686)
Exercised (105) (49,327)
----------------------------------------------------------------
Balance as of March 31, 2000 -- $ --
----------------------------------------------------------------
8. INVESTMENT TRANSACTIONS
The cost of purchases and the proceeds from sales of investments, other than
short-term securities and options, for the period ended March 31, 2000, were as
follows:
PURCHASES SALES
----------------------------------------------------------------
U.S. Equity Fund $143,923,151 $ 60,446,940
S&P 500 Index Fund 125,024,107 19,472,422
Premier Growth Equity Fund 19,149,340 1,109,242
Value Equity Fund 30,771,634 1,863,154
Mid-Cap Growth Fund 2,373,375 1,917,951
Mid-Cap Value Equity Fund 2,540,499 2,406,026
Small-Cap Value Equity Fund 20,420,549 17,291,444
International Equity Fund 236,685,745 117,570,031
Europe Equity Fund 6,051,245 5,949,222
Emerging Markets Fund 3,682,595 2,710,728
Strategic Investment Fund 10,826,628 3,243,199
Income Fund 242,772,674 149,460,819
Open swap transactions held by the Funds consisted of the following as of March
31, 2000:
INCOME FUND
NOTIONAL AMOUNT
---------------
Total Return Swap with Morgan
Stanley Capital Services Inc. on the
Lehman Brothers Asset Backed
Securities Index. Fund receives/
pays the positive/negative return
on the Index and pays one-month
LIBOR minus 35 basis points, expires
January 31, 2001. $1,550,000
NOTIONAL AMOUNT
---------------
Total Return Swap with Morgan
Stanley Capital Services Inc. on the
investment grade portion of the
Lehman Brothers CMBS Index.
Fund receives/pays the positive/
negative return on the Index and
pays one-month LIBOR minus 35
basis points, expires June 30, 2000. $2,346,000
9. BENEFICIAL INTEREST
The number of shareholders each owning 5% or more of a Fund are listed below.
The total percentage of a Fund held by such shareholders as well as the
percentage of a Fund held by certain directly and indirectly owned subsidiaries
of General Electric Company and their respective investment plans ("GE
Affiliates") at March 31, 2000 are:
5% OR GREATER
SHAREHOLDERS
-------------
% OF % OF FUND HELD
NUMBER FUND HELD BY GE AFFILIATES*
-----------------------------------------------------------------
U.S. Equity Fund 4 85% 63%
S&P 500 Index Fund 2 97% 97%
Premier Growth Equity Fund 3 100% 100%
Value Equity Fund 4 96% 85%
Mid-Cap Growth Fund 3 97% 83%
Mid-Cap Value Equity Fund 1 100% 100%
Small-Cap Value Equity Fund 2 100% 100%
International Equity Fund 4 88% 56%
Europe Equity Fund 1 100% 100%
Emerging Markets Fund 3 98% 80%
Strategic Investment Fund 1 100% 100%
Income Fund 4 89% 28%
Money Market Fund 4 100% 100%
Investment activities of these shareholders could have a material impact on
these Funds.
* INCLUDED IN THE 5% OR GREATER SHAREHOLDERS PERCENTAGE.
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80
<PAGE>
GE INSTITUTIONAL FUNDS' INVESTMENT TEAM
--------------------------------------------------------------------------------
PORTFOLIO MANAGERS
U.S. EQUITY FUND
Team led by Eugene K. Bolton
S&P 500 INDEX FUND
James B. May
State Street Global Advisors
PREMIER GROWTH EQUITY FUND
David B. Carlson
VALUE EQUITY FUND
Peter J. Hathaway
MID-CAP GROWTH FUND
Ralph E. Whitman, Jr.
MID-CAP VALUE EQUITY FUND
Jon D. Bosse
NWQ Investment Management Company
SMALL-CAP VALUE EQUITY FUND
Senior Investment Committee:
Jack Feiler
Martin L. Berman
Steven E. Berman
Richard Meisenberg
Palisade Capital Management, L.L.C.
INTERNATIONAL EQUITY FUND
EMERGING MARKETS FUND
Team led by Ralph R. Layman
EUROPE EQUITY FUND
Michael J. Solecki
STRATEGIC INVESTMENT FUND
David B. Carlson
Ralph R. Layman
Robert A. MacDougall
INCOME FUND
MONEY MARKET FUND
Team led by
Robert A. MacDougall
INVESTMENT ADVISER
AND ADMINISTRATOR
GE Asset Management Incorporated
TRUSTEES
Michael J. Cosgrove
John R. Costantino
Alan M. Lewis
William J. Lucas
Robert P. Quinn
SECRETARY
Matthew J. Simpson
TREASURER
Michael J. Tansley
ASSISTANT TREASURER
Michael M. D'Ambrosio
DISTRIBUTOR
GE Investment Distributors, Inc.
Member NASD and SIPC
COUNSEL
Sutherland, Asbill & Brennan, L.L.P
CUSTODIAN
State Street Bank & Trust Company
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
OFFICERS OF THE INVESTMENT ADVISER
John H. Myers, CHAIRMAN OF THE BOARD AND PRESIDENT
Eugene K. Bolton, EVP, DOMESTIC EQUITIES
Michael J. Cosgrove, EVP, MUTUAL FUNDS
John J. Walker, EVP, CHIEF FINANCIAL OFFICER
Ralph R. Layman, EVP, INTERNATIONAL EQUITIES
Alan M. Lewis, EVP, GENERAL COUNSEL AND SECRETARY
Robert A. MacDougall, EVP, FIXED INCOME
Geoffrey R. Norman, EVP, MARKETING
Don W. Torey, EVP, ALTERNATIVE INVESTMENTS AND REAL ESTATE
<PAGE>
INVESTMENT ADVISER
GE ASSET MANAGEMENT INCORPORATED
3003 SUMMER STREET
STAMFORD, CT 06905
DISTRIBUTOR
GE INVESTMENT DISTRIBUTORS, INC.
MEMBER NASD AND SIPC
777 LONG RIDGE ROAD
STAMFORD, CT 06927
[GE LOGO OMITTED]
WE BRING GOOD THINGS TO LIFE.
