EVERGREEN SELECT EQUITY TRUST, N-30D, 1999-09-03

EVERGREEN SELECT EQUITY TRUST
N-30D, 1999-09-03

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June 30, 1999

Evergreen Select

Equity Growth Funds

Annual Report

[LOGO OF EVERGREEN FUNDS APPEARS HERE]
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Table of Contents
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Letter to Shareholders ................................1

Evergreen Select Balanced Fund
Fund at a Glance ...................................2
Portfolio Manager Commentary........................3

Evergreen Select Core Equity Fund
Fund at a Glance ...................................5
Portfolio Manager Commentary........................6

Evergreen Select Diversified Value Fund
Fund at a Glance ...................................8
Portfolio Manager Commentary........................9

Evergreen Select Large Cap Blend Fund
Fund at a Glance ..................................11
Portfolio Manager Commentary.......................12

Evergreen Select Small Cap Growth Fund
Fund at a Glance ..................................14
Portfolio Manager Commentary.......................15

Evergreen Select Small Company Value Fund
Fund at a Glance ..................................18
Portfolio Manager Commentary.......................19

Evergreen Select Social Principles Fund
Fund at a Glance ..................................23
Portfolio Manager Commentary.......................24

Evergreen Select Special Equity Fund
Fund at a Glance ..................................26
Portfolio Manager Commentary.......................27

Evergreen Select Strategic Growth Fund
Fund at a Glance ..................................30
Portfolio Manager Commentary.......................31

Evergreen Select Strategic Value Fund
Fund at a Glance ..................................33
Portfolio Manager Commentary.......................34

Financial Highlights
Evergreen Select Balanced Fund.....................37
Evergreen Select Core Equity Fund..................38
Evergreen Select Diversified Value Fund............39
Evergreen Select Large Cap Blend Fund..............40
Evergreen Select Small Cap Growth Fund.............41
Evergreen Select Small Company Value Fund..........42
Evergreen Select Social Principles Fund............43
Evergreen Select Special Equity Fund...............44
Evergreen Select Strategic Growth Fund.............46
Evergreen Select Strategic Value Fund..............47

Schedule of Investments
Evergreen Select Balanced Fund.....................48
Evergreen Select Core Equity Fund..................51
Evergreen Select Diversified Value Fund............54
Evergreen Select Large Cap Blend Fund..............56
Evergreen Select Small Cap Growth Fund.............58
Evergreen Select Small Company Value Fund..........60
Evergreen Select Social Principles Fund............62
Evergreen Select Special Equity Fund...............64
Evergreen Select Strategic Growth Fund.............66
Evergreen Select Strategic Value Fund..............68

Statements of Assets and Liabilities..................70

Statements of Operations .............................72

Statements of Changes in Net Assets...................74

Combined Notes to Financial Statements ...............79

Independent Auditors' Report..........................92

Other Information.....................................93

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Evergreen Funds
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Evergreen Funds is one of the nation's fastest growing investment companies with
over $70 billion in assets under management.

With over 80 mutual funds to choose among and acclaimed service and operations
capabilities, investors enjoy a broad range of quality investment products and
services designed to meet their needs.

The Evergreen Funds employ intensive, research-driven investment strategies
executed by over 90 research analysts and portfolio managers. The fund company
remains dedicated to meeting the needs of investors and their advisors in a
global economy. Look to the Evergreen Funds to provide a distinctive level of
service and excellence in investment management.

This semiannual report must be preceded or accompanied by a prospectus of an
Evergreen fund contained herein. The prospectus contains more complete
information, including fees and expenses, and should be read carefully before
investing or sending money.

Mutual Funds: ARE NOT FDIC INSURED May lose value . Are not bank guaranteed

Evergreen Distributor, Inc.
Evergreen(SM) is a Service Mark of Evergreen Investment Services, Inc.
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Letter to Shareholders
----------------------
August 1999

[PHOTO OF WILLIAM M. ENNIS APPEARS HERE]

[PHOTO OF DAVID C. FRANCIS, CFA APPEARS HERE]

Dear Evergreen Shareholders,

We are pleased to provide the Evergreen Select Equity Funds annual report, which
covers the twelve-month period ended June 30, 1999.

Continued Strength in the Domestic Economy

After stock markets around the world, including the United States, declined
dramatically last summer and into the early fall, the Federal Reserve's actions
to lower interest rates in late 1998 helped restore investor confidence. The
U.S. stock market rallied strongly during the final quarter of 1998 and into the
first half of 1999.

Throughout the period, the strong performance of large capitalization growth
stocks continued. Investors who focused on this small group of stocks,
particularly technology stocks, fared well. After long periods of lagging
performance in many areas of the market, participation broadened during the
second quarter of 1999 to include both value stocks and small company stocks.
Currently, the stock market is responding positively to the combination of low
inflation, low interest rates and low unemployment. The economy appears strong
and investor confidence seems high. We remain cautiously optimistic about the
stock market.

Year 2000 Preparation/1/

At Evergreen, we continue to prepare ourselves to provide uninterrupted service
and communication with all our shareholders throughout the end of 1999 and right
through the date change into the year 2000 and beyond. As of the end of August,
when this report was finalized, we have completed the testing of internal
systems. In March, we successfully participated in industry-wide testing with
the Securities Industry Association. We are confident that our efforts will
enable our shareholders to receive the same Evergreen products and services we
deliver today.

As always, we encourage all shareholders to diversify their mutual fund
portfolios and we suggest you consult with your financial advisor for an
allocation strategy that helps you meet your investment goals and objectives.
Evergreen Funds offers a wide range of funds that includes multiple investment
styles to help you find one that is appropriate in your portfolio.

Thank you for your continued investment in Evergreen Funds.

Sincerely,

/s/ William M. Ennis

William M. Ennis
President and CEO
Evergreen Investment Company, Inc.

/s/ David C. Francis

David C. Francis, CFA
Managing Director
Chief Investment Officer
First Capital Group - FUNB

/1/ The information above constitutes Year 2000 readiness disclosure.

1
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EVERGREEN
Select Balanced Fund

Fund at a Glance as of June 30, 1999

PORTFOLIO PROFILE

Philosophy

Evergreen Select Balanced Fund uses a systematic and disciplined investment
approach which provides exposure to both the equity and fixed income markets.
The basis of this approach is founded in the belief that stocks offer the
greatest long-term growth opportunities while bonds provide income and less risk
to principal.

Process

The Fund employs a blended approach to equity investing, utilizing companies
with both value and growth-oriented characteristics. Within the fixed income
component, portfolio performance is enhanced while seeking to control risk by
managing duration, sector allocation and security selection.

Benchmarks

Standard & Poors 500 Index (S&P 500) Lehman Brothers Government/Corporate Bond
Index (LBGBI).

PERFORMANCE AND RETURNS/1/

Portfolio Inception Date: 4/01/91 Class I Class IS
Class Inception Date 01/22/98 04/09/98
Average Annual Returns
1 year 5.70% 5.43%
3 years 14.23% 14.19%
5 years 14.57% 14.55%
Since Inception 12.35% 12.33%
12-month income dividends per share $0.42 $0.39
12-month capital gain distributions per share $0.14 $0.14

LONG TERM GROWTH

[LINE GRAPH APPEARS HERE]

Select Balanced,
Date Class I CPI S&P 500 LBGBI
- ----- --------------- -------- -------- ---------
3/31/91 1,000,000 1,000,000 1,000,000 1,000,000
6/30/91 1,007,024 1,007,407 997,713 1,015,100
6/30/92 1,149,999 1,038,519 1,131,538 1,158,900
6/30/93 1,298,090 1,069,622 1,285,744 1,311,300
6/30/94 1,322,763 1,096,296 1,303,834 1,292,100
6/30/95 1,530,289 1,129,630 1,643,758 1,457,000
6/30/96 1,752,429 1,160,319 2,071,132 1,524,900
6/30/97 2,078,503 1,187,407 2,789,795 1,643,000
6/30/98 2,470,904 1,207,407 3,631,237 1,827,400
6/30/99 2,611,572 1,231,111 4,458,061 1,878,100

Comparison of change in value of a $1,000,000 investment in Evergreen select
Balanced Fund, Class I, the S&P 500, the Consumer Price Index (CPI) and the
LBGBI.

The S&P 500 and LBGBI are unmanaged indices, which do not include transaction
costs associated with buying and selling securities nor any management fees.

The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in the index.

/1/Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than original cost.

Historical performance shown for Class I prior to its inception is based on the
performance of the Class Y Shares of Evergreen Balanced Fund II. Historical
performance shown for Class IS reflects that of Class Y Shares of Evergreen
Balanced Fund II, through 1/22/1998, the inception of Class I Shares.
Performance from 1/23/1998 through the inception of Class IS Shares reflects
that of Class I Shares. Performance prior to inception of Class IS Shares does
not include this class' 0.25% 12b-1 fees. Class I Shares do not pay a 12b-1 fee.
If these fees were reflected, returns would have been lower.

2
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EVERGREEN
Select Balanced Fund

Portfolio Manager Commentary

Portfolio Management Team

Mr. Rich has been an equity portfolio manager with Meridian Investment Company,
and has maintained sector analytical responsibilities since he joined Meridian
in 1990. Prior to joining Meridian in 1990, Mr. Rich served as a portfolio
manager with First Fidelity Bank. Lester Rich has over 17 years of investment
experience.

Mr. Williams joined FUNB as a Vice-President and senior portfolio manager in
1993 and became a Senior Vice President in September 1997. Mr. Williams has been
a professional in banking and investment management since 1969.

[PHOTO OF LESTER RICH APPEARS HERE] [PHOTO OF ROLLIN C. WILLIAMS APPEARS HERE]

Performance and Portfolio Structure

For the twelve months ended June 30, 1999 Evergreen Select Balanced Fund, Class
I posted a 5.7% total return. This performance compared to the 2.7% total return
for the Lehman Brothers Government/Corporate Index and the S&P 500 Index's
22.8% return, for the same period.

During the fiscal year, the composition of the Fund remained relatively stable.
The portfolio's equity exposure increased from 54% to just over 55%, while the
weighting of fixed income securities fell from 46% to roughly 44%. Our cash
position fluctuated around 1% during the period.

Portfolio
Characteristics
---------------

Total Net Assets $659,137,807
Number of Issues 93
P/E Ratio 36.1x
Beta 1.08

Market Environment

The U.S. economy provided a favorable backdrop for both equity and fixed income
investors during much of the fiscal year. Strong economic growth was tempered by
benign inflation, propelling the stock market to new highs and pushing the bond
market into positive territory during the first six months.

The fiscal year was broken into two markedly different periods regarding
interest rate activity: the first three months, during which rates declined
sharply, and the final nine months in which rates increased steadily. The yield
on the bellwether 30-year Treasury Bond started the period at 5.63% and fell as
low as 4.70% before soaring to 5.96% by June 30. Although the stock market
shrugged off higher interest rates, the U.S. bond market suffered negative
returns during the final six months in light of rising rates.

Top 5 Industries--Equity
------------------------
(as a percentage of net assets)

Information Services & Technology 8.4%
Healthcare Products & Services 5.5%
Communication Systems & Services 5.5%
Finance & Insurance 5.0%
Banks 4.7%

3
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EVERGREEN
Select Balanced Fund

Portfolio Manager Commentary

Portfolio Activity

Within the fixed income portion of the Fund, we generally maintained duration in
excess of the benchmark during the first half of the fiscal period, a strategy
that was beneficial in the opening months as interest rates fell. In early May,
we reversed course and shortened duration in response to increasing inflationary
pressure and a potential rate hike by the Federal Reserve Board. The portfolio's
shortened duration proved beneficial when interest rates soared during the final
six weeks of the quarter.

Technology currently represents the portfolio's largest sector weighting.
Although some of our technology holdings, America Online and Compaq Computer
Corp., specifically, struggled during the past few months, other stocks
purchased in this sector during the fiscal year added to the fund's performance.
Industry stalwarts Cisco Systems, Microsoft and Intel posted total twelve-month
returns of 110%, 66% and 61%, respectively.

Financial companies represent another strong sector weighting. Within this area,
we are emphasizing fundamentally strong banks such as BankAmerica, Fleet
Financial, BankBoston and Bank One. In fact, the Fund benefited from a merger
between two of these holdings, Fleet Financial and BankBoston. The market's
realization of the potential of this combined banking franchise coupled with the
lower valuation levels helped boost both of these issues to higher levels.

Top 10 Equity Holdings*
-----------------------
(as a percentage of net assets)

Dayton Hudson Corp. 2.5%
Microsoft Corp. 2.3%
Cisco Systems, Inc. 2.3%
MCI WorldCom, Inc. 2.2%
Tyco International Ltd. 2.0%
General Electric Co. 2.0%
GTE Corp. 1.7%
Waste Management, Inc. 1.6%
BankAmerica Corp. 1.5%
Citigroup, Inc. 1.5%

*Portfolio composition subject to change

Top 5 Bond Holdings
-------------------
(as a percentage of net assets)

Coupon Maturity
------- --------
U.S. Treasury Notes 7.75% 2/15/2001 7.4%
U.S. Treasury Bonds 9.13% 5/15/2018 3.5%
U.S. Treasury Bonds 8.88% 8/15/2017 3.1%
U.S. Treasury Bonds 7.88% 2/15/2021 3.0%
U.S. Treasury Notes 5.88% 7/31/1999 2.7%

Outlook

The significant broadening of the stock market in the last three months has
given many investors reason to cheer. Long overlooked cyclical stocks have
become favorites as worldwide economies strengthen and the risk of a slowdown,
induced by struggling Asian and Latin American economies, passes. Accelerating
corporate profit growth is good news for both equity and bond markets that have
been fretting over unimpressive earnings growth. Looking ahead, the specter of
higher inflation brought on by the surprisingly high April CPI (up 0.7%), as
well as rising interest rates, present the greatest challenges to the market
outlook.

4
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EVERGREEN
Select Core Equity Fund

Fund at a Glance as of June 30, 1999

PORTFOLIO PROFILE

Philosophy

Evergreen Select Core Equity Fund utilizes a diversified style of equity
management which capitalizes on opportunities in both value- and growth-oriented
stocks. In serving the investment needs of individual investors, the Fund
remains sensitive to tax implications.

Process

The Fund uses a bottom-up stock selection process, focusing on security
fundamentals rather than broad economic forecasts. The Fund is managed using a
team approach; investment managers locate attractive holdings using a unique
blend of quantitative and traditional fundamental analysis skills.

Benchmark

Standard & Poors 500 Index (S&P 500)

Historical performance shown for Class IS from 11/24/97 to its inception is
based on the performance of Class I and has not been adjusted to reflect the
effect of the 0.25% 12b-1 fee applicable to Class IS. Class I pays no 12b-1 fee.
If these fees had been reflected, returns would have been lower. Prior to
11/24/97, the returns for Classes I and IS are based on the Fund's predecessor
common trust fund's (CTFs) performance, adjusted for estimated mutual fund
expenses. The CTFs were not registered under the 1940 Act and were not subject
to certain investment restrictions. If the CTFs had been registered, their
performance might have been adversely affected. Performance for the CTF has been
adjusted to include the effect of estimated mutual fund class gross expense
ratios at the time the CTF was converted to a mutual fund. If fee waivers and
expense reimbursements had been calculated into the mutual fund class expense
ratio the total returns would be as follows: Class I--3 year = 21.34%, 5 year
= 22.32%, 10 year = 14.98% and since 12/31/81 = 15.78%; Class IS--3 year
= 21.07%, 5 year = 22.05%, 10 year = 14.70% and since 12/31/81 = 15.50%.

PERFORMANCE AND RETURNS/1/

Portfolio Inception Date 12/31/81 Class I Class IS
Class Inception Date 11/24/97 02/04/98
Average Annual Returns -------- --------

1 year 9.82% 9.53%
3 years 21.28% 21.02%
5 years 22.24% 21.97%
10 years 14.88% 14.61%
Since Inception 15.68% 15.40%
12-month income dividends per share $ 0.69 $ 0.46
12-month capital gain distributions per share $ 7.83 $ 7.83

LONG TERM GROWTH

[LINE GRAPH APPEARS HERE]

Consumer Price S&P 500 Select Core
Date Index - US Composite Equity Class I
---- -------------- --------- --------------
6/30/89 1,000,000 1,000,000 1,000,000
6/30/90 1,046,728 1,164,872 1,188,555
6/30/91 1,095,890 1,251,018 1,239,834
6/30/92 1,129,734 1,418,818 1,381,085
6/30/93 1,163,570 1,612,176 1,535,730
6/30/94 1,192,587 1,634,859 1,466,474
6/30/95 1,228,848 2,061,084 1,793,707
6/30/96 1,262,232 2,596,963 2,243,661
6/30/97 1,291,700 3,498,084 2,931,866
6/30/98 1,313,457 4,553,155 3,644,544
6/30/99 1,339,243 5,589,898 4,002,550

Comparison of change in value of a $1,000,000 investment in Evergreen Select
Core Equity, Class I, the S&P 500 and the Consumer Price Index (CPI).

The S&P 500 is an unmanaged index, which does not include transaction costs
associated with buying and selling securities nor any management fees.

The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in the index.

5
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EVERGREEN
Select Core Equity Fund

Portfolio Manager Commentary

Portfolio Management Team

The Fund is managed by Mark C. Sipe, CFA and Hanspeter Giger, CFA who have over
33 years of combined investment experience. Their disciplined approach assures
consistency of results and superior service.

[PHOTO OF MARK C. SIPE APPEARS HERE] [PHOTO OF HANSPETER GIGER APPEARS HERE]
Mark C. Sipe Hanspeter Giger

Performance

Within this turbulent market environment, for the fiscal year, the Evergreen
Select Core Equity Fund, Class I total return of 9.8% lagged the S&P 500's
performance of 22.8%. Late in 1998, the Fund began a significant repositioning
designed to address and correct the major factor contributing to its performance
lag relative to the S&P 500 in prior periods, the relative weighting among
stocks held in the Fund.

Like many other diversified funds, the average performance of stocks held in the
Evergreen Select Core Equity Fund has often matched or exceeded the performance
of the average stock in the S&P 500. However, the Fund's holdings among the
largest capitalization stocks had not been in proportion to their size in the
S&P 500, i.e., weighted according to their market capitalization. This weighting
factor alone--not stock selection, per se--accounted for over half of the Fund's
performance deficit relative to the index during the first three months of the
period, with the bulk of that occurring prior to the completion of the
repositioning at the end of February. In fact, the Fund began tracking the S&P
500 more closely in March, and outperformed the benchmark during the three
months ending June 30, with a total return of 7.4% versus 7.0% for the S&P. This
was the period in the market, as noted above, in which the breadth of
performance across market capitalizations improved as well.

Portfolio
Characteristics
---------------

Total Net Assets $1,943,722,912
Number of Issues 131
P/E Ratio 26.3x
Beta 1.00

Market Environment

Two distinctly different market environments characterized the second half of
the Evergreen Select Core Equity Fund's June fiscal year. The initial three
months of the period saw an exaggerated extension of the narrow market that
dominated in prior quarters. As an example, the S&P 500 was up roughly 5% during
that time frame, while the median stock return among the 500 stocks in the index
was down roughly 2%. In fact, the total increase in the S&P 500's market
capitalization was accounted for by just 15 stocks; an index of the remaining
485 stocks would have been flat during the period.

Throughout much of the latter half of the period, however, the stock market
vacillated amidst speculation surrounding the Federal Reserve Board's likely
response to signs of potentially higher inflation. Investors related the
continuation of domestic economic strength, combined with indications of at
least a bottoming in Asia's fortunes, as increasing the likelihood of a more
aggressive stance by the Fed. The anticipation of the eventual interest rate
increase at quarter end produced a

6
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EVERGREEN
Select Core Equity Fund

Portfolio Manager Commentary

notable rotation among market leadership. The narrowly concentrated market of
January through March was challenged by the recovery among smaller stocks as
well as value-oriented industries, such as metals, chemicals, energy, and
utilities. Further illustrating this shift, the average stock price performance
of the bottom 150 stocks in the S&P 500 in terms of market capitalization (up
19.6%) more than doubled the average performance of the largest 150 stocks (up
8.8%) from the beginning of April until the end of June.

Top 5 Industries
----------------
(as a percentage of net assets)

Information Services & Technology 18.6%
Healthcare Products & Services 13.9%
Finance & Insurance 8.8%
Retailing & Wholesale 7.2%
Food and Beverage Products 7.0%

Portfolio Activity

Beyond the structural changes in the portfolio, the most notable shifts in the
Fund's investments related to selected sector weightings. In this vein, sector
over-weights were reaffirmed in technology and health care, due to the long-term
secular growth opportunities that those areas continue to offer. On the other
hand, reductions were made in energy and basic materials sector exposures.

Sector performance during the fiscal year was far and away led by technology and
telecommunications. Technology stocks in the Fund such as Applied Materials,
Altera, and Adaptec joined strong performances by Nokia Corp. and market
stalwarts such as Oracle Corp., International Business Machines, Cisco Systems,
Microsoft, Dell, and Intel. In the telecom sector, the standout performer was
MCI Worldcom. Lagging sectors during the period included consumer staples, basic
materials, and electric utilities. Of the poor-performing market segments, basic
materials began to see signs of life late in the period as earnings expectations
bottomed coincidentally with the perceived stabilization of Asian economies. As
a result, basic materials stocks, following a dismal performance in 1998, are
among the top performers so far in 1999.

Top 10 Holdings*
----------------
(as a percentage of net assets)

General Electric Co. 5.8%
Microsoft Corp. 5.1%
International Business Machines Corp. 3.7%
Coca Cola Co. 2.6%
Cisco Systems, Inc. 2.2%
Intel Corp. 2.2%
Bristol-Myers Squibb Co. 2.2%
BankAmerica Corp. 2.0%
MCI WorldCom, Inc. 1.9%
Philip Morris Companies, Inc. 1.6%

*Portfolio composition subject to change
- ----------------------------------------

Outlook

In all, the period closed with the S&P 500 as well as the NASDAQ Index, standing
at record highs. From an outlook standpoint, although the complexion of the
market has changed in the last several months, the generally positive backdrop
of domestic economic growth, low inflation, and low interest rates remains in
place. Going forward, the Fund will continue to invest in what we believe are
quality companies that meet the requirements of our investment research process.
More specifically, we will continue to pursue investments in stocks offering the
most attractive combination of good long-term earnings growth prospects and
price, focusing on predominantly large cap as well as selective mid cap
securities.
7
<PAGE>

EVERGREEN
Select Diversified Value Fund

Fund at a Glance as of June 30, 1999

Portfolio Profile

Philosophy

Evergreen Select Diversified Value Fund is a fund with an emphasis on
traditional value, utilizing fundamental analysis to determine if a stock is
selling at a reasonable valuation level. The Fund seeks to capture the best
opportunities in a value universe by emphasizing securities with perceived
intrinsic value above current market levels due to temporary or anticipated
problems.

Process

Primarily, the Fund invests in undervalued companies using a "bottom-up"
approach that concentrates on analyzing security fundamentals rather than broad
economic forecasts. The Diversified Value team strives to produce a portfolio
that best controls risk and balances a risk/reward relationship.

Benchmark

Standard & Poors 500 Index (S&P 500)

Performance and Returns/1/

Portfolio Inception Date 01/03/91 Class I Class IS
Class Inception Date 01/22/98 03/31/98
Average Annual Returns
1 year 9.08% 8.77%
3 years 19.12% 18.50%
5 years 19.51% 19.14%
Since Inception 16.55% 16.33%
12-month income dividends per share $0.20 $0.14
12-month capital gain distributions per share $0.65 $0.65

Long Term Growth

[LINE GRAPH APPEARS HERE]

Select Diversified
Date Value,Class I CPI S&P 500
- ---- ------------------ ---- ---------
12/31/90 1,000,000 1,000,000 1,000,000
6/30/91 1,164,762 1,016,500 1,142,600
6/30/92 1,292,453 1,047,800 1,295,900
6/30/93 1,448,141 1,079,200 1,472,500
6/30/94 1,504,393 1,106,100 1,493,200
6/30/95 1,832,207 1,139,800 1,882,500
6/30/96 2,170,015 1,170,700 2,372,000
6/30/97 2,769,937 1,198,100 3,195,100
6/30/98 3,363,904 1,218,200 4,158,700
6/30/99 3,667,912 1,242,200 5,105,700

Comparison of change in value of a $1,000,000 investment in Evergreen Select
Diversified Value Fund, Class I, the S&P 500 and the Consumer Price Index (CPI).

The S&P 500 is an unmanaged index, which does not include transaction costs
associated with buying and selling securities nor any management fees.

The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in the index.

Historical performance shown for Class I prior to its inception is based on the
performance of the Class Y Shares of Evergreen Value Fund. Historical
performance shown for Class IS reflects that of Class Y Shares of Evergreen
Value Fund, through 1/22/1998, the inception of Class I Shares. Performance from
1/23/1998 through the inception of Class IS Shares reflects that of Class I
Shares. Performance prior to inception of Class IS Shares does not include this
class' 0.25% 12b-1 fees. Class I Shares do not pay a 12b-1 fee. If these fees
were reflected, returns would have been lower.

8
<PAGE>

EVERGREEN
Select Diversified Value Fund

Portfolio Manager Commentary

Portfolio Management Team

John E. Gray, CFA, and Eric M. Teal, who have a combined 52 years of investment
experience, manage the Evergreen Select Diversified Value Fund. The team employs
rigorous fundamental analysis combined with a disciplined quantitative approach
to seek superior results and adherence to risk/reward objectives.

[PHOTO OF JACK GRAY APPEARS HERE] [PHOTO OF ERIC TEAL APPEARS HERE]
Jack Gray Eric Teal

Performance

For the twelve-month period ended June 30, 1999 Evergreen Select Diversified
Value Fund, Class I posted a net return of 9.0% versus 22.8% for the S&P 500.
The majority of the Fund's underperformance occurred during the third quarter
market correction, when the Fund declined 16.3% versus the 10.3% decline for the
S&P 500.

Portfolio
Characteristics
---------------

Total Net Assets $607,738,783
Number of Issues 98
P/E Ratio 25.1x
Beta 1.07

Market Environment

It was nearly impossible for large-cap active investment strategies to
outperform the S&P 500 during the past twelve months. In 1998, only 28% of the
stocks in the S&P 500 outperformed the average, and the first quarter of 1999
was more of the same. This reflects the narrow leadership in the equity markets.
High-P/E growth stocks have led the market, and if managers underweighted the
"nifty-fifty"--the very largest, mega-cap stocks--then performance suffered.

Portfolio Activity

Among our best performers during the year were several in the technology sector:
Sun Microsystems up over 150%, IBM up 127%, Cisco Systems up 109%, and Tellabs
up 88%. Tyco International, a conglomerate and one of the Fund's largest
holdings, gained over 51%. Poor performance came in the oil service and
healthcare sectors. Oil drillers, R&B Falcon and Diamond Offshore declined 60%
and 30%, respectively, in line with plummeting crude oil prices in 1998. Medical
providers and HMO stocks also continued to be out of favor with investors.
Consequently, Lincare, Healthsouth, and Tenet Healthcare all declined
approximately 40%.

9
<PAGE>

EVERGREEN
Select Diversified Value Fund

Portfolio Manager Commentary

Top 10 Holdings*
----------------
(as a percentage of net assets)

Tyco International Ltd. 3.7%
Microsoft Corp. 3.3%
Motorola, Inc. 3.1%
Nokia Corp. 2.4%
PNC Bank Corp. 2.4%
Reliant Energy, Inc. 2.3%
General Electric Co. 2.2%
Time Warner, Inc. 2.1%
Wal-Mart Stores, Inc. 1.9%
American International Group, Inc. 1.9%

*Portfolio composition subject to change
- ----------------------------------------

Although the Fund's absolute performance was below the overall market, relative
results have significantly improved in 1999. During the first six months of 1999
the Fund has returned 9.2% versus 12.4% for the S&P 500, and during the past
three months the Fund is up 6.0% versus 7.0% for the S&P 500.

This improvement has kept the Fund within striking distance of the benchmark for
1999. We believe several market indicators should work to our advantage in the
near future. Most importantly, there has been an overall broadening out of the
market, suggesting that market leadership may not be confined to a select group
of high multiple growth stocks. This should favor active management strategies
and portfolios that are properly diversified with winning stocks.

Top 5 Industries
----------------
(as a percentage of net assets)

Finance & Insurance 11.8%
Information Services & Technology 11.0%
Healthcare Products & Services 9.3%
Oil/Energy 6.9%
Retailing & Wholesale 6.8%

Outlook

During the fiscal year the majority of stocks underperformed the broad market
averages and, as a result, the majority of active managers underperformed their
benchmarks. The recent overall broadening out of the market may work in favor of
active management and the Evergreen Select Diversified Value Fund. The emphasis
remains on stock selection and risk monitoring rather than on sector or style
decisions. Our outlook remains positive.

10
<PAGE>

EVERGREEN
Select Large Cap Blend Fund

Fund at a Glance as of June 30, 1999

PORTFOLIO PROFILE

Philosophy

Evergreen Select Large Cap Blend Fund invests in large and mid-sized U.S.
companies, blending those that display both value- and growth-oriented
characteristics. This philosophy holds that value and growth stocks tend to be
counter-cyclical, outperforming the broad market at different times.
Diversification between the two approaches tends to provide less volatile
investment results over time.

Process

Research and stock selection focus on companies of sound financial quality which
have strong management teams and maintain competitive leadership positions
within their respective industries. These companies are identified using a
fundamental, bottom-up stock selection process which is research-intensive.

Benchmark

Standard & Poors 500 Index (S&P 500)

Historical performance shown for Class IS from 11/24/97 to its inception is
based on the performance of Class I and has not been adjusted to reflect the
effect of the 0.25% 12b-1 fee applicable to Class IS. Class I pays no 12b-1 fee.
If these fees had been reflected, returns would have been lower. Prior to
11/24/97, the returns for Classes I and IS are based on the Fund's predecessor
common trust fund's (CTFs) performance, adjusted for estimated mutual fund
expenses. The CTFs were not registered under the 1940 Act and were not subject
to certain investment restrictions. If the CTFs had been registered, their
performance might have been adversely affected. Performance for the CTF has been
adjusted to include the effect of estimated mutual fund class gross expense
ratios at the time the CTF was converted to a mutual fund. If fee waivers and
expense reimbursements had been calculated into the mutual fund class expense
ratio the total returns would be as follows:
Class I--3 year = 22.50%, 5 year = 23.68% and since 12/31/93 = 19.87%; Class
IS--3 year = 22.21%, 5 year = 23.38% and since 12/31/93 = 19.58%.

PERFORMANCE AND RETURNS/1/

Portfolio Inception Date 12/31/93 Class I Class IS
Class Inception Date 11/24/97 03/12/98
Average Annual Returns
1 year 7.12% 6.83%
3 years 22.44% 22.15%
5 years 23.60% 23.30%
Since Inception 19.78% 19.49%
12-month income dividends per share $0.40 $0.30
12-month capital gain distribution per share $5.20 $5.20

LONG TERM GROWTH

[LINE GRAPH APPEARS HERE]

Select Large
Cap Blend,
Date CPI S&P 500 Class I
---- ---------- --------- -------------
12/31/93 1,000,000 1,000,000 1,000,000
6/30/94 1,015,096 966,128 934,984
6/30/95 1,045,961 1,218,008 1,228,085
6/30/96 1,074,376 1,534,688 1,469,331
6/30/97 1,099,459 2,067,210 1,976,896
6/30/98 1,117,977 2,690,709 2,517,631
6/30/99 1,139,926 3,303,378 2,697,141

Comparison of change in value of a $1,000,000 investment in Evergreen Select
Large Cap Blend Fund, Class I, the S&P 500 and the Consumer Price Index (CPI).

The S&P 500 is an unmanaged index, which does not include transaction costs
associated with buying and selling securities nor any management fees.

The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in the index.

<PAGE>

EVERGREEN
Select Large Cap Blend Fund

Portfolio Manager Commentary

Portfolio Management

[PHOTO OF LESTER RICH APPEARS HERE]
Lester Rich

Performance

Evergreen Select Large Cap Blend Fund, Class I posted a 7.1% total return for
the fiscal year ended June 30, 1999. This performance trailed the exceptional
performance by the broad stock market, as measured by the S&P 500, which
returned 22.8% for the same period.

Portfolio
Characteristics
---------------

Total Net Assets $438,756,964
Number of Issues 56
P/E Ratios 35.7x
Beta 1.06

Market Environment

The U.S. economy provided a strong backdrop for the stock market's persistent
climb during the past year. Equity investors shrugged off rising interest rates,
as strong economic growth and benign inflation paved the way for another
excellent period for stocks.

Though headlines proclaimed new record highs throughout the year, not all
investors participated in the extraordinary returns. The very largest
growth-oriented companies (technology companies, in particular) led the way,
while smaller companies and value-oriented stocks lagged. Within this market
environment, active equity managers struggled to beat the returns of the S&P
500.

Top 5 Industries
----------------
(as a percentage of net assets)

Information Services & Technology 14.8%
Healthcare Products & Services 10.0%
Communication Systems & Services 10.0%
Finance & Insurance 9.5%
Banks 8.3%

12
<PAGE>

EVERGREEN
Select Large Cap Blend Fund

Portfolio Manager Commentary

Portfolio Activity

Technology currently represents the portfolio's largest sector weighting.
Although our technology holdings--America Online and Compaq,
specifically--struggled during the past few months, other stocks purchased in
this sector during the fiscal period added to the fund's performance. Industry
stalwarts (and current Fund holdings) Cisco Systems, Microsoft and Intel posted
total twelve-month returns of 110%, 66% and 61%, respectively.

A modestly underweighted utility position benefited performance, as companies
within this sector continue to battle higher interest rates, increasing
competition and uncertainty regarding deregulation. Unfortunately, the Fund's
only two holdings posted negative returns. Similarly, several of our consumer
staples companies lagged the market's strong returns. Share prices of current
holdings Coca-Cola, Gillette and Proctor & Gamble all declined during the
period.

Top 10 Holdings*
---------------
(as a percentage of net assets)

Dayton Hudson Corp. 4.6%
Microsoft Corp. 4.2%
Cisco Systems, Inc. 4.2%
MCI WorldCom, Inc. 4.1%
General Electric Co. 3.8%
Tyco International Ltd. 3.5%
Citigroup, Inc. 3.1%
GTE Corp. 3.1%
Waste Management, Inc. 2.8%
BankAmerica Corp. 2.7%

*Portfolio composition subject to change

Outlook

The significant broadening of the market in the last three months has given many
investors reason to cheer. Long overlooked cyclical stocks have become favorites
as worldwide economies strengthen and the risk of a slowdown, induced by
struggling Asian and Latin American economies, passes. Accelerating corporate
profit growth is good news for a market that has fretted over unimpressive
earnings growth. Looking ahead, the specter of higher inflation brought on by
the surprisingly high April CPI (up 0.7%), as well as rising interest rates,
present the greatest challenges to the market outlook.

13
<PAGE>

EVERGREEN
Select Small Cap Growth Fund

Fund at a Glance as of June 30, 1999

PORTFOLIO PROFILE

Philosophy

The Fund seeks to provide shareholders with long-term growth of capital by
investing in small company stocks. We believe that the risk associated with
smaller company stocks can be managed effectively by diversification and careful
attention to valuation.

Process

The Fund manager uses a fundamental, bottom-up stock selection process, which is
research-intensive. The Fund generally invests in stocks of companies which have
market capitalization of $1 billion or less and above average long-term growth
rates. Our research process identifies buying opportunities in small company
stocks of high-quality companies with a competitive advantage, stocks of which
are growth-oriented, and reasonably valued.

Benchmark

Russell 2000 Growth Index

Russell 2000 Index

PERFORMANCE AND RETURNS/1/

Performance Inception Date Class I
Class Inception Date 12/28/95
Average Annual Returns
1 year 4.22%
3 years 7.83%
Since Inception 10.96%
12-month income dividends per share 0
12-month capital gain distributions per share $ 0.02

LONG TERM GROWTH

[LINE GRAPH APPEARS HERE]

Select Small Cap
Date Class I Russell 2000 CPI Russell 2000 Growth
---- ---------------- ------------ --- -------------------
12/31/95 1,000,000 1,000,000 1,000,000 1,000,000
6/30/96 1,148,000 1,103,600 1,021,174 1,119,200
6/30/97 1,231,868 1,283,800 1,045,015 1,170,800
6/30/98 1,381,010 1,495,700 1,062,616 1,325,300
6/30/99 1,439,293 1,518,000 1,083,477 1,435,300

Comparison of change in value of a $1,000,000 investment in Evergreen Select
Small Cap Growth Fund, Class I, the Russell 2000 Growth, the Russell 2000 and
the Consumer Price Index (CPI).

The Russell 2000 Growth and Russell 2000 are unmanaged indices, which do not
include transaction costs associated with buying and selling securities nor any
management fees.

The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in the index.

14
<PAGE>

EVERGREEN
Select Small Cap Growth Fund

Portfolio Manager Commentary

Portfolio Management

Evergreen Select Small Cap Growth Fund is managed by Thomas L. Holman. Mr.
Holman is a member of the Small Cap Growth Team at Evergreen Investment
Management Company, where he manages the Fund and separately managed other,
small cap growth accounts. His research responsibilities are focused on
telecommunication service companies. Prior to joining Evergreen in 1997, Mr.
Holman was a portfolio manager and securities analyst at Invista Capital
Management. He developed quantitative models and had co-management
responsibility for several small cap and mid cap portfolios. As an analyst, he
was a generalist, covering a wide variety of industries, including technology,
telecommunications equipment, media services, basic industry, consumer staples
and retail. Mr. Holman received both his B.S. and M.B.A degrees from Iowa State
University.

[PHOTO OF TOM HOLMAN APPEARS HERE]
Tom Holman

Performance

Evergreen Select Small Company Growth Fund had relatively strong performance,
especially during the final three months of the fiscal year as market leadership
changed and investors sought out the attractive values in small company growth
stocks. For the 12 months ended June 30, 1999, Evergreen Select Small Cap Growth
Fund, Class I had a total return of 4.22%, including a 15.68% return during the
final three months of the period. The benchmark, the Russell 2000 Growth Index,
had a return of 8.30% over the 12 months, and 14.75% over the final three
months.

Portfolio
Characteristics
---------------

Total Net Assets $70,113,537
Number of Issues 62
P/E Ratios 24.0x
Beta 1.24

Market Environment

The full 12-month period consisted of three periods of sharply different
conditions. The "Downdraft", from July 20 through October 8, 1998, was a time of
global economic concern and political uncertainty. This created a very difficult
environment for small company investing as the average small cap stock lost 38%
of its value. The "Rebound" began as small caps bottomed on October 8, and
lasted through January 20, 1999. During this time, the average small cap stock
gained more than 50%. This dramatic rise was driven by the U.S. Federal Reserve
Board lowering short-term interest rates three successive times. It is difficult
to sustain that type of momentum, however, and the market let off a little steam
in early 1999.

The final period, the "Broadening", began toward the end of February 1999, and
brought a significant change as the overall market finally broadened beyond the
few large cap growth stocks that had led performance over the previous two
years. Cyclical stocks and small company stocks began to perform well. For the
first time in more than two years, small company growth stocks outperformed
large company stocks. The primary factor was the clear sign of the improving
economy in Asia. That affected domestic small companies in two ways. First, as
the Asian economies picked up, they began to increase their imports of goods
from the United States, particularly benefiting the technology sector. Second,
Asian companies enjoyed better demand in their own

15
<PAGE>

EVERGREEN
Select Small Cap Growth Fund

Portfolio Manager Commentary

domestic economies, and so cut back on their exports to the United States, where
they had been dumping goods at very low prices and creating a difficult
competitive environment for U.S. companies. As a result, a number of sectors in
which the Fund had invested did remarkably well, including technology and
industrial manufacturing.

Any discussion of the 12-month period must take note of the enormous gains
generated by internet stocks. Seven of the top 10 contributors to the Russell
2000 Growth Index over the period were internet-related stocks. The average gain
of these seven stocks was 320%. Even more startling is the fact that those seven
stocks combined generated a 5.92% return for the entire index. To phrase this
another way, those seven stocks account for more than 70% of the index's return.
This massive concentration of stellar performance in a small group of stocks is
the primary reason for the Fund's underperformance over 12 months. We chose to
remain style-consistent, keeping the market cap of the fund below $1 billion by
selling securities as their market cap exceeded $2 billion. While this decision
seemed prudent at the time, it caused us to sell securities too early and had a
negative impact on the Fund's performance. We are considering changes so this
type of scenario will not inhibit performance in the future.

Top 5 Industries
----------------
(as a percentage of net assets)

Information Services & Technology 27.1%
Electrical Equipment & Services 9.8%
Telecommunication Services & Equipment 9.7%
Education 8.2%
Consumer Products & Services 6.8%

Portfolio Activity

During the first six months of the period, we had moved away from companies that
had significant exposure to Asia. That worked very well; however, with the
strength in the Asian markets in 1999, we migrated back to those areas where we
found exceptional value. As prospects brightened, we invested in companies such
as Lattice, a semi-conductor manufacturer, and Kemet, which makes capacitors for
circuit boards. In general, we increased our technology weighting substantially.
As of June 30, 1999, 24.8% of net assets were invested in hardware and 10.7% in
software and technology services. Those areas together had comprised about 24%
of net assets back on December 31, 1998.

We found some outstanding opportunities in technology; Fibre Channel is a new
data-storage standard that allows greater quantities of data to be stored faster
and further away, enhancing network speed and reliability. Qlogic makes fibre
channel adapter cards that hook various devices to the network. During the
second quarter of 1999 alone, Qlogic's stock prices rose from $30 to $135.
PMC-Sierra, which makes semi-conductor sets that manage telecommunications
traffic, was a stock that rose from $32 when we purchased it in September 1998
to $77 by March, when we sold it as it surpassed the $2 billion market
capitalization line. Applied Microcircuits, which is in a very similar industry
to PMC-Sierra, also did very well, rising from $40 per share in December, when
we purchased it, to $80 by the end of the fiscal year.

We also increased our weighting in cyclical and industrial manufacturing
companies, which at the end of the fiscal year accounted for about 10% of Fund
net assets, compared to a 5.5% weighting in the Russell 2000 Growth Index. Roper
Industries, a manufacturer of industrial controls and fluid handling products,
was a very strong performer, with its stock price rising 31.9% during the final
three months of the period.

16
<PAGE>

EVERGREEN
Select Small Cap Growth Fund

Portfolio Manager Commentary

One of the key events in which we have tried to take advantage is the federal
TEA 21 highway construction and repair program, which is expected to increase
federal spending substantially over the next six years. This already has had a
dramatic impact on construction-related companies as contractors upgrade their
existing equipment. Portfolio companies that have helped performance included
Astec Industries, an asphalt paving equipment company ; Manitowac, a crane
manufacturer; and CMI Corp, which makes concrete paving equipment.

The Fund also has been overweighted in telecommunications, with a 10% weighting
versus 4.3% for the index. Viatel, a company deploying a fiber optic network
across Europe, posted a 97% return during the final quarter, helped by both
deregulation and industry consolidation. ITC Deltacom, which provides local and
long-distance services in the Southeastern United States, and Transaction
Network Services, which operates a nationwide credit card processing network,
were two other strong contributors.

Finance and healthcare were two areas in which the Fund has been underweighted
substantially. We have de-emphasized finance, at 2.3% of net assets versus 12%
for the index, principally because we found more attractive opportunities
elsewhere. Healthcare, which was just 1.8% of net assets at the end of the
fiscal year versus 14% for the index, is beset by uncertainties over funding and
payment issues.

Top 10 Holdings*
---------------
(as a percentage of net assets)

Strayer Education, Inc. 2.9%
Kronos, Inc. 2.9%
Scotts Co., Cl. A 2.9%
Applied Micro Circuits Corp. 2.7%
Galileo Technology Ltd. 2.5%
Transaction Network Services, Inc. 2.4%
Citadel Communications Corp. 2.3%
Investors Financial Services Corp. 2.3%
Maximus, Inc. 2.2%
Electronics for Imaging, Inc. 2.2%

*Portfolio composition subject to change

Outlook

We are somewhat cautious about the immediate outlook because the rapid, dramatic
increases in a few select industries within technology have taken away some of
the valuation advantages enjoyed by small cap growth companies, especially as
interest rates have climbed. However, over the longer term we still think that
smaller companies in general offer very attractive valuations relative to larger
companies and good investment opportunities in an environment of global economic
expansion. Our focus remains to invest in market leaders and to carefully manage
the risk profile of the Fund, taking profits where significant gains have been
obtained and looking for companies which we believe have above-average growth
prospects, reasonable valuations and strong managements.

Small capitalization investing typically carries additional risks since small
companies generally have a higher risk failure. Although it may offer the
potential for greater long term results, it may also result in greater price
volatility.

17
<PAGE>

EVERGREEN
Select Small Company Value Fund

Fund at a Glance as of June 30, 1999

PORTFOLIO PROFILE

Philosophy

Evergreen Select Small Company Value Fund seeks capital appreciation by
investing in little-known and relatively small companies. This requires a
significant commitment to independent research by Evergreen's team of 18
analysts, who have an average 16 years' professional experience. The management
team seeks to identify small companies that they believe are favorably priced
and have both entrepreneurial managements and catalysts for growth. The
investment discipline pays special attention to valuations and diversification
by industry and company to reduce the volatility associated with small cap
stocks.

Process

The Fund's management team uses an intensive research process to assemble a
diversified stock portfolio of small companies that:

. Are potential merger and acquisition candidates;

. Have promising new products that can cause a dramatic change in earnings;

. Are "value-timing" candidates because, while their stock may be temporarily
out of favor, they offer the potential of good, long-term appreciation;

. Can benefit from re-structuring programs of management

Benchmark

Russell 2000 Value Index

PERFORMANCE AND RETURNS/1/

Portfolio Inception Date 12/23/97 Class I Class IS
Class Inception Date 12/23/97 12/31/98
Average Annual Returns
1 year -10.73% -11.68%
3 years N/A N/A
5 years N/A N/A
Since Inception -6.41% -7.06%
12-month income dividends per share $0.03 0
12-month capital gain distributions per share $0.03 0

LONG TERM GROWTH

[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>

Date Consumer Price Index - US Russell 2000 Value Evergreen Select Sm Comp Value Class I
- ---- ------------------------- ------------------ --------------------------------------
<S> <C> <C> <C>
31-Dec-97 $1,000,000 $1,000,000 $1,000,000
31-Mar-98 1,005,580 1,083,500 1,062,315
30-Jun-98 1,010,539 1,044,373 989,018
30-Sep-98 1,014,259 857,663 779,165
31-Dec-98 1,016,119 935,505 867,937
31-Mar-99 1,022,939 844,839 771,960
30-Jun-99 1,030,378 984,678 882,942
</TABLE>

Comparison of change in value of a $1,000,000 investment in Evergreen Select
Small Company Value Fund, Class I, the Russell 2000 Value and the Consumer Price
Index (CPI).

The Russell 2000 Value Index is an unmanaged index and does not include
transaction costs associated with buying and selling securities, nor any
management fees.

The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in the index.

Historical performance shown for Class IS prior to its inception is based on the
performance of Class I and has not been adjusted to reflect the effect of the
0.25% 12b-1 fee applicable to Class IS. Class I pays no 12b-1 fee. If these fees
had been reflected, returns would have been lower.

18
<PAGE>

EVERGREEN
Select Small Company Value Fund

Portfolio Manager Commentary

Portfolio Management Team

During the fiscal year ended June 30, 1999, Evergreen Select Small Company Value
Fund was managed by a team headed by Nola Maddox Falcone. The team also included
Constance Unger and Peter J. Kovalski, CFA. Nola M. Falcone retired as President
and Co-Chief Executive Officer of Lieber & Co. and Evergreen Asset Management
Corp. in July 1999, following a successful 30-year career in investment
management. The Fund's management team now comprises Ms. Unger, as team leader,
and Mr. Kovalski. Ms. Unger, who joined Evergreen Asset Management Corp. as an
analyst in 1998, is an investment veteran with more than 12 years' experience in
value investing. She also has served at Segall Bryant & Hamill Investment
Counselors, Society Asset Management and Bankers Trust Co. Mr. Kovalski, CFA,
joined Evergreen Asset Management Corp. as an analyst in 1992. Previously, he
was an analyst with International Assets Advisory Corp., Williams Securities
Group, Inc., Ryan Beck & Co., and Ayco/American Express.

[PHOTO OF NOLA MADDOX FALCONE APPEARS HERE]
Nola Maddox Falcone, CFA

[PHOTO OF PETER J. KOVALSKI APPEARS HERE]
Peter J. Kovalski, CFA

[PHOTO OF CONSTANCE UNGER APPEARS HERE]
Constance Unger, CFA

Performance

During a fiscal year in which small company value investing was not in favor
until very late in the period, Evergreen Select Small Company Value Fund
performed consistently with its style of investing. For the 12 months ended June
30, 1999, the Class I had a total return of -10.73%, including a 14.38% gain
during the final three months of the period. During the 12 months, the Russell
2000 Value Index had a return of -5.72%, and gained 15.55% during the final
quarter.

Portfolio Structure

The Fund's management team has assembled a diversified stock portfolio of 128
different companies. During the period since the Fund's inception, the team has
found a number of attractive opportunities among small cap companies. This has
resulted in a portfolio of stocks of companies that, in the aggregate, have
lower valuations, as measured by traditional price measures such as
price-to-earnings and price-to-book ratios, than the overall stock market, yet
higher earnings growth rates. Opportunities were particularly evident among
consumer-sensitive companies whose businesses rely principally on the U.S. Many
of the best-performing companies have found ways to take advantage of the
growing needs of the large, baby-boomer generation that is approaching late
middle age. Those companies that have products or services appealing to this
market have benefited from an environment of low unemployment and strong
consumer demand.

19
<PAGE>

EVERGREEN
Select Small Company Value Fund

Portfolio Manager Commentary

Portfolio
Characteristics
---------------

Total Net Assets $108,181,122
Number of Holdings 128
P/E Ratio 13.1x
Beta N/A

Market Environment

During most of the 12-month period, small company investing and value investing
continued to be out of favor as investors persisted in their preference for the
large-company growth companies that had been the market's performance leaders
for more than two years. It was only during the final three months that the
market broadened and other types of stocks began to outperform the large-company
growth stocks. Throughout the 12 months, strong domestic companies, including
small cap companies, continued to report healthy earnings in an economy of
consistently strong consumer demand, despite shifting investor sentiment and
market volatility.

The fiscal year began in the summer of 1998 in an environment of investor
anxiety. With a backdrop of international currency and financial crises
reverberating around the globe, investors avoided small cap stocks and shifted
assets to sectors with perceived liquidity. In response to market turmoil, the
U.S. Federal Reserve Board intervened in the fall of 1998 with three successive
reductions in short-term interest rates. These actions resulted in a rebound in
equity markets, including in the small cap sector, during the final quarter of
1998.

Top 5 Industries
----------------
(as a percentage of net assets)

Banks 12.8%
Building, Construction & Furnishings 9.3%
Heathcare Products & Services 9.2%
Finance & Insurance 8.5%
Consumer Products & Services 8.4%

The shift of investment assets out of the popular large-company growth stocks
and into the undervalued, low-P/E small cap sector began in April 1999,
resulting in very strong outperformance by small company stocks in the final
quarter of the fiscal year. The Russell 2000 Value Index, for example, returned
15.55% during the quarter, while the S&P 500 Index returned 7.06%.

Takeover activity was one of the primary catalysts for the small cap sector's
outperformance, especially by senior management teams and private investors who
recognized the depressed small company values. Many larger companies also found
it easy to purchase small companies at attractive values, which resulted in an
automatic accretion of earnings. This trend was aided by the continuation of
pooling of interest accounting rules, which allow two companies to merge their
books without taking a hit to earnings from goodwill charges. These rules are
expected to continue unchanged until January 1, 2001.

Within the Russell 2000 Value Index, internet companies, which value investors
tend to avoid because of their unprecedented high stock valuations, were the
performance leaders. However, outside of the internet and selected other
technology stocks, the fiscal year ended with the small capitalization sector
continuing to be undervalued by virtually all historical standards for
evaluating the investment potential of company stocks.

20
<PAGE>

EVERGREEN
Select Small Company Value Fund

Portfolio Manager Commentary

Portfolio Activity

Throughout the extended period in which the small company value sector
underperformed the broader market, our research analysts and portfolio managers
continued to search for value-timing opportunities among small company stocks
that were out-of-favor despite their strong fundamental characteristics. We
found many small cap companies with healthy earnings and continued growth
prospects, but with stock prices that had dropped precipitously we believed it
was important to stay the course in our investment discipline. In addition, we
believed merger-and-acquisition activity was likely to pick up, especially
because of the depressed stock price levels in the small cap sector. We also
believed that institutional investors eventually would shift their attention and
part of their portfolios to the small sector.

During the summer-autumn 1998 crisis, we found many value-timing opportunities
that we added to the portfolio. These included several financial services
companies: Waddell and Reed Financial Inc., a mutual fund company, that was
purchased on August 31, 1998 and had a return to the Fund of 63.3% by the end of
the fiscal year; Pacific Century Financial Corp., a Hawaii-based bank that was
purchased on August 26, 1998 and had a 38.1% return to the Fund for the fiscal
year; Radian Group, a mortgage insurer purchased on September 4, 1998 and which
had a 25.4% return to the Fund. Other value-timing purchases included Jabil
Circuits, a contract manufacturer for the technology industry, purchased on
September 14, 1998 and sold one month later for a 43.9% gain; VISX, a
manufacturer of laser systems for corrective eye surgery, which was purchased in
October 1998 and sold in April 1999 at a 456.1% gain; and Prime Hospitality, a
company which operates extended stay hotels. It was purchased on November 30,
1998 and posted a 38.0% gain to the Fund by June 30, 1999.

One of the underlying strategies for the Fund is to target merger or takeover
candidates in consolidating industries. During the fiscal year, nineteen
portfolio companies were involved in either announced or completed acquisitions.
Eight of those companies were in the financial services sector.

Fund managers and analysts also seek out small companies with new product niches
that can benefit from emerging lifestyle or demographic trends. Among these
holdings was Koala Corporation, which manufactures baby changing stations and
high chairs. Purchased on December 30, 1998, the stock had a 54.7% return to the
Fund by June 30.

In the final quarter of the fiscal year, the Fund also increased its exposure to
the technology and telecommunications industries. Acquisitions that contributed
to performance included: Kent Electronics, which manufactures electronic
components for computing and networks; CapRock Communications, which owns and
operates a long-distance fiber optics network based in the Southwest United
States; Lightbridge Inc., which provides fraud prevention software for the
telecommunications industry; and Benchmark Electronics, a contract manufacturer
to the technology industry.

The Fund was overweighted in the energy sector during three of the fiscal year's
quarters. While this overweighting hurt performance for the full fiscal year, it
helped significantly in the final quarter as energy stocks finally began to
perform well. Among the energy-related performance leaders in the final quarter
were Barrett Resources, Southwestern Energy, Providence Energy, Cabot Oil and
Gas and Berry Petroleum.

21
<PAGE>

EVERGREEN
Select Small Company Value Fund

Portfolio Manager Commentary

Top 10 Holdings*
---------------
(as a percentage of net assets)

Alpharma, Inc. 2.3%
Sonic Automotive, Inc. 1.9%
Fair Issac & Co., Inc. 1.8%
Republic Bancshares, Inc. 1.8%
MDU Resources Group, Inc. 1.7%
Stewart Enterprises, Inc. 1.6%
Mid-State Bancshares 1.6%
Genlyte Group, Inc. 1.6%
Raymond James Financial, Inc. 1.5%
American Bankers Insurance Group, Inc. 1.5%

*Portfolio composition subject to change

Outlook

As investors turn to sectors that have been overlooked, we believe several
factors bode well for small cap value investing. The small cap stock sector
remains significantly undervalued when compared to large-caps, while investors,
including institutions, have broadened their interest to small cap stocks. In
addition, value investing shows clear signs that it is returning to favor after
being overlooked for more than two years. In addition, we have discovered during
our visits to small cap technology and industrial companies that those firms
with exposure to Asia are experiencing a clear pick-up in demand. Meanwhile,
consumer-oriented companies, which were performance leaders during the past
year, continue to experience strong domestic demand.

We believe many high quality, small cap companies with good products have the
potential to enjoy excellent earnings growth. At the same time, current stock
valuations encourage continued merger-and-acquisition activity and stock buyback
programs.

We continue to see attractive companies selling at reasonable prices in the
small cap market, and we intend to continue to pursue a discipline that we
believe, over the long term, will lead to significant investment opportunities.

22
<PAGE>

EVERGREEN
Select Social Principles Fund

Fund at a Glance as of June 30, 1999

PORTFOLIO PROFILE

Philosophy

Evergreen Select Social Principles Fund invests in the stocks of mid-sized U.S.
companies, with average market capitalization of $3 billion. The Fund emphasizes
companies that generally respect human rights, play a role in local communities,
and produce useful products in an environmentally sound way. This philosophy
holds that socially conscious investing promotes responsible values without
impairing long-term performance.

Process

The Fund utilizes a fundamental, bottom-up stock selection process which is
research intensive. In addition, the Fund utilizes an external Advisory Board
whose role is to develop and continually review guiding policies and principles
of social investing. All holdings are periodically reviewed to assure adherence
to the Advisory Board Standards.

Benchmark

Standard & Poors 400 MidCap Index
(S&P 400 MidCap)

PERFORMANCE AND RETURNS/1/

Portfolio Inception Date: 5/31/88 Class I Class IS
Class Inception Date 11/24/97 3/12/98
Average Annual Returns
1 year 0.90% 0.64%
3 years 12.66% 12.40%
5 years 19.15% 18.87%
10 years 13.81% 13.54%
Since Inception 13.89% 13.62%
12-month income dividends per share $ 0.14 $ 0.08
12-month capital gain distributions per share $ 2.10 $ 2.10

LONG TERM GROWTH

[LINE GRAPH APPEARS HERE]

Select Social
Principles
Date Consumer Price Index - US S & P 400 Midcap Class I
- ---- ------------------------- ---------------- -------------------------
6/30/89 1,000,000 1,000,000 1,000,000
6/30/90 1,046,728 1,154,349 1,063,517
6/30/91 1,095,890 1,302,588 1,137,717
6/30/92 1,129,734 1,544,277 1,279,616
6/30/93 1,163,570 1,894,673 1,600,619
6/30/94 1,192,587 1,893,285 1,517,265
6/30/95 1,228,848 2,314,536 2,117,849
6/30/96 1,262,232 2,813,314 2,548,218
6/30/97 1,291,700 3,469,526 2,996,303
6/30/98 1,313,457 4,402,847 3,610,445
6/30/99 1,339,243 5,150,640 3,643,810

Comparison of change in value of a $1,000,000 investment in Evergreen Select
Social Principles Fund, Class I, the S&P 400 MidCap and the Consumer Price Index
(CPI).

The S&P 400 MidCap is an unmanaged index, which does not include transaction
costs associated with buying and selling securities nor any management fees. The
CPI is a commonly used measure of inflation and does not represent an investment
return. It is not possible to invest directly in the index.

Historical performance shown for Class IS from 11/24/97 to its inception is
based on the performance of Class I and has not been adjusted to reflect the
effect of the 0.25% 12b-1 fee applicable to Class IS. Class I pays no 12b-1 fee.
If these fees had been reflected, returns would have been lower. Prior to
11/24/97, the returns for Classes I and IS are based on the Fund's predecessor
common trust fund's (CTFs) performance, adjusted for estimated mutual fund
expenses. The CTFs were not registered under the 1940 Act and were not subject
to certain investment restrictions. If the CTFs had been registered, their
performance might have been adversely affected. Performance for the CTF has been
adjusted to include the effect of estimated mutual fund class gross expense
ratios at the time the CTF was converted to a mutual fund. If fee waivers and
expense reimbursements had been calculated into the mutual fund class expense
ratio the total returns would be as follows: Class I--3 year = 12.72%, 5 year =
19.24%, 10 year = 13.90% and since 05/31/88 = 13.99%; Class IS--3 year = 12.46%,
5 year = 18.95%, 10 year =13.64 % and since 5/31/88 = 13.72%.

23
<PAGE>

EVERGREEN
Select Social Principles Fund

Portfolio Manager Commentary

Portfolio Management

Evergreen Select Social Principles Fund is managed by A. Jay Zelko who has over
22 years of investment experience.

[PHOTO OF A. JAY ZELKO APPEARS HERE]
A. Jay Zelko

Performance

For the twelve months ended June 30, 1999, Evergreen Select Social Principles
Fund, Class I posted a 0.90% total return. This performance trailed the 17.2%
total return of the Fund's benchmark, the S&P 400 Midcap Index. Underperformance
can be partially attributed to the Fund's healthcare and finance exposure.

Portfolio
Characteristics
---------------

Total Net Assets $134,536,025
Number of Issues 58
P/E Ratio 30.9x
Beta 1.03

Market Environment

The U.S. economy provided a positive backdrop for the U.S. stock market during
the past year. Economic growth remained strong and inflation stayed low. Even
rising interest rates during the past nine months weren't enough to derail the
market's upward ascent.

Although the headlines proclaimed new highs throughout the fiscal year, not all
investors participated in these extraordinary returns. The largest stocks
enjoyed the greatest returns, while small cap stocks (as measured by the Russell
2000 Index) lagged significantly, up a mere 1.5%.

Top 5 Industries
----------------
(as a percentage of net assets)

Information Services & Technology 14.1%
Retailing & Wholesale 13.1%
Healthcare Products & Services 9.0%
Finance & Insurance 8.8%
Utilities-Electric 5.7%

24
<PAGE>

EVERGREEN
Select Social Principles Fund

Portfolio Manager Commentary

Portfolio Activity

Strong stock selection within the technology sector positively impacted
performance. For instance, current holdings Adaptec, PMC-Sierra, Veritas
Software and Teradyne all returned over 125% for the twelve months. In addition,
we bolstered our technology exposure and took advantage of corporate America's
increasing reliance on the internet by purchasing PSINet, a global internet
access provider to the business market.

We have also emphasized retailing companies within the portfolio. Retailers are
enjoying solid earnings growth, as they continue to reap the benefits of the
healthy U.S. economy and strong consumer spending. Family Dollar Stores,
Abercrombie & Fitch, and Best Buy are three such holdings capitalizing upon this
strong backdrop, evidenced by their total annual returns of 31%, 118% and 274%,
respectively.

Top 10 Holdings*
---------------
(as a percentage of net assets)

Best Buy Co., Inc. 4.8%
Abercrombie & Fitch 4.2%
Veritas Software Corp. 3.1%
Allied Waste Industries, Inc. 2.9%
Sanmina Corp. 2.8%
Qwest Communications Intl., Inc. 2.6%
Adaptec, Inc. 2.6%
Compuware Corp. 2.6%
Healthsouth Corp. 2.6%
PMC-Sierra, Inc. 2.5%

*Portfolio composition subject to change

While many of the portfolio's technology and retail companies posted outstanding
gains, the Fund's performance lagged the benchmark, in part, due to the
portfolio's healthcare and finance holdings. In healthcare, concerns over
medicare reform caused investors to move away from service providers such as
HEALTHSOUTH, Lincare and Pediatrix. Many finance companies were penalized by
rising interest rates. Consequently, holdings Reliastar Financial and Conseco
both posted negative returns during the fiscal period.

Outlook

Looking ahead, we continue to hold an optimistic outlook for mid cap equities.
Although mid cap stocks have underperformed their large cap brethren for the
past few years, there are signs that a market rotation may be taking place.
During the past three months, for instance, indices of mid cap stocks (the S&P
400 Midcap Index, +14.2%) and small cap stocks (the Russell 2000 Index, +15.6%)
doubled the performance of the large cap S&P 500 which was up 7.0%.

We believe this valuation disparity between large and smaller stocks, as well as
mid caps' own strong fundamentals, will attract investors to mid cap equities.
We enthusiastically look forward to the next few years.

25
<PAGE>

EVERGREEN
Select Special Equity Fund

Fund at a Glance as of June 30, 1999

PORTFOLIO PROFILE

Philosophy

Evergreen Select Special Equity Fund aggressively seeks the highest possible
return by investing in companies with small market capitalizations.

Process

The Fund employs a "bottom-up" approach to investing, selecting stocks that have
passed a rigorous screening process which employs both qualitative and
quantitative analysis. To qualify for investment, a stock must meet high
expectations for return potential based on growth, value and momentum factors.

Benchmark

Russell 2000 Index

PERFORMANCE AND RETURNS/1/

Portfolio Inception Date 3/15/94 Class I Class IS
Class Inception Date 3/15/94 3/15/94
Average Annual Returns
1 year 42.02% 41.55%
3 years 24.15% 23.77%
5 years 26.12% 25.86%
Since Inception 21.02% 20.78%
12-month income dividends per share 0 0
12-month capital gain distributions per share $ 1.18 $ 1.18

LONG TERM GROWTH

[LINE GRAPH APPEARS HERE]

Evergreen Select
Date Consumer Price Index - US Russell 2000 Special Equity IS
---- ------------------------- ------------ -----------------
3/31/94 1,000,000 1,000,000 1,000,000
6/30/94 1,005,435 961,055 928,000
6/30/95 1,036,005 1,153,907 1,136,121
6/30/96 1,064,151 1,429,538 1,545,689
6/30/97 1,088,995 1,662,932 1,819,441
6/30/98 1,107,337 1,937,388 2,070,250
6/30/99 1,129,076 1,966,347 2,930,786

Comparison of change in value of a $1,000,000 investment in Evergreen Select
Special Equity Fund Class IS, the Russell 2000 and the Consumer Price Index
(CPI).

The Russell 2000 is an unmanaged index, which does not include transaction costs
associated with buying and selling securities nor any management fees.

The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in the index.

Historical performance shown for the Class I prior to 7/27/98 is based on the
performance of (1) the Class Y shares of the Fund's predecessor fund, CoreFund
Special Equity Fund from 2/21/95 to 7/26/98 and (2) the Class A Shares of the
Fund's predecessor fund, CoreFund Special Equity Fund from 3/15/94 to 2/20/95.

Historical performance shown for Class IS prior to 7/27/98 is based on the
performance of the Class A shares of the Fund's predecessor fund, Corefund
Special Equity Fund, CoreFund Special Equity Fund, and reflects the same 0.25%
12b-I applicable to Class IS.

26
<PAGE>

EVERGREEN
Select Special Equity Fund

Portfolio Manager Commentary

Portfolio Management

The Evergreen Select Special Equity Fund is managed by Joseph E. Stocke, CFA.
Mr. Stocke joined Meridian Investment Company in 1983 as an assistant investment
officer and since 1990 has been a senior investment manager of equities.

[PHOTO OF JOSEPH E. STOCKE APPEARS HERE]
Joseph E. Stocke CFA

Performance

Evergreen Select Special Equity Fund Class IS produced a total return of 41.55%
for the twelve months ended June 30, 1999, outpacing its benchmark, the Russell
2000 Index, which generated a total return of 1.50%. The Fund achieved
particularly notable performance in the fourth quarter of 1998 and the first
quarter of 1999. In the fourth quarter of 1998, the Fund returned 28.15% versus
16.50% for the Russell 2000 Index. The Fund went on to return 22.20% in the
first quarter of 1999, a period in which the Russell 2000 Index fell by 5.50%.

Portfolio
Characteristics
---------------

Total Net Assets $121,008,952
Number of Holdings 114
P/E Ratio 25.2x
Beta 1.23

Market Environment

After being buffeted by challenging market conditions for much of the past
twelve months, small-to-mid capitalization stock investors closed the first half
of 1999 enjoying broad-based market leadership. The Fund's fiscal year began
with historically high stock valuations and increasing global financial
instability, which, among other factors, drove the stock market to its worst
quarterly decline in nearly a decade. August 1998, in particular, represented
the largest single monthly decline since the October 1987 crash. Small-to-mid
capitalization stock prices slid the hardest, as investors perceived greater
safety in larger companies.

The market began to rebound in the fourth quarter of 1998. Worldwide interest
rate cuts restored investors' confidence that global economies and financial
markets would regain stability. Many investors anticipated weak international
recoveries, however, that would slow U.S. economic growth in the coming year.

27
<PAGE>

EVERGREEN
Select Special Equity Fund

Portfolio Manager Commentary

In the first quarter of 1999, global economies proved heartier than expected,
and the U.S. economy showed ongoing strength. Investors pushed stock prices
higher as greater optimism for corporate earnings, as well as seasonal cash
inflows, offset concerns about high valuations and disappointment in some high
profile earnings reports. Large cap stocks claimed undisputed leadership in the
market's ascent during that time. The NASDAQ Composite climbed 12.3% and the Dow
Jones Industrial Average rose 7.0% in the first three months of 1999. In
contrast, the Russell 2000 Index and the Standard & Poor's Midcap 400 fell by
5.50% and 6.40%, respectively.

Leadership shifted in this year's second quarter to include stocks of all market
valuations. Ongoing improvement in global economies boosted prices of
long-overlooked cyclical stocks, as the risk of an international slowdown began
to pass. Domestically, investors focused on a resilient housing market, strong
consumer confidence, low unemployment and a resurgence in the Initial Public
Offering (IPO) market; and welcomed accelerating corporate profit growth. Signs
of recovery in the Japanese economy also supported a broadening in the market's
leadership. On the flipside of the economy's strength, however, investors were
mindful that robust growth could rekindle inflation and prompt the Federal
Reserve Board to raise interest rates. In June 1999, the Federal Reserve Board
raised interest rates by 0.25% and investors have kept a watchful eye for
indications of further moves.

Top 5 Industries
----------------
(as a percentage of net assets)

Information Services & Technology 23.5%
Retailing & Wholesale 13.6%
Telecommunication Services & Equipment 9.8%
Healthcare Products & Services 9.8%
Food & Beverage Products 4.4%

Portfolio Activity

The Fund's "bottom-up" strategy, building the Portfolio "one stock at a time",
has been the key to its success. The Fund significantly outperformed its
benchmark, the Russell 2000 Index in several industries, over the past twelve
months. Technology, communications, consumer cyclicals, basic materials and
consumer staples holdings all contributed substantially to the Fund's strong
relative performance.

Individual stocks were the story behind the Fund's strong total return this
fiscal year. These included Ticketmaster Online Citysearch, a consumer cyclicals
company, whose price rose 300% by the end of December 1998. The Fund's
technology stocks led performance in the first quarter of 1999. Comprising 18.9%
of net assets on March 31, 1999, these holdings outperformed the Russell 2000 by
135%. Abovenet Communications, F5 Networks, Miningco.Com and America Online all
contributed to the Fund's competitive performance over the past twelve months.

28
<PAGE>

EVERGREEN
Select Special Equity Fund

Portfolio Manager Commentary

Top 10 Holdings*
---------------
(as a percentage of net assets)

MIPS Technologies, Inc. 5.2%
Pacific Sunwear of California 4.1%
Gildan Activewear, Inc. 2.8%
Abovenet Communications, Inc. 2.8%
Williams Sonoma, Inc. 2.6%
Abercrombie & Fitch Co. 2.4%
NEXTLINK Communications, Inc., Cl. A 2.2%
Earthlink Network, Inc. 2.2%
Real Networks, Inc. 2.1%
Chirex, Inc. 1.9%

*Portfolio composition subject to change

Outlook

We believe equity investors could face some challenges over the next six months,
but we remain optimistic about growth opportunities. The possibility of higher
inflation and rising interest rates present the greatest concerns to investors.
Further, investors are mindful of historically high valuations, lackluster
European economies and the impending Year 2000 issue.

In our opinion, however, pockets of opportunity exist in every market
environment. By employing both quantitative and qualitative analysis, we believe
the Fund's investment team can seek out companies demonstrating strong growth
potential. We look for the Fund's careful investment process to continue to
reveal companies able to thrive under a wide variety of market conditions.

29
<PAGE>

EVERGREEN
Select Strategic Growth Fund

Fund at a Glance as of June 30, 1999

PORTFOLIO PROFILE

Philosophy

Evergreen Select Strategic Growth Fund is a growth-style equity product that
emphasizes large and mid-sized U.S. companies. We believe that superior
long-term returns can be achieved through a disciplined approach of investing in
stocks with excellent historical and future earnings growth.

Process

The Fund is managed by two investment professionals who utilize a unique blend
of quantitative and qualitative fundamental analysis. This bottom-up stock
selection process is research-intensive and identifies companies which exhibit
strong current fundamentals, histories of superior earnings/dividend growth and
rising earnings expectations.

Benchmark

Russell 1000 Growth Index

PERFORMANCE AND RETURNS/1/

Portfolio Inception Date 12/31/94 Class I Class IS
Class Inception Date 11/24/97 02/27/98
Average Annual Returns
1 year 19.22% 18.88%
3 years 27.21% 26.86%
Since Inception 28.77% 28.42%
12-month income dividends per share $ 0.09 $ 0.04
12-month capital gain distributions per share $ 3.26 $ 3.26

LONG TERM GROWTH

[LINE GRAPH APPEARS HERE]

Select Strategic
Date Consumer Price Index - US Russell 1000 Growth Growth Class I
- ---- ------------------------- ------------------- -----------------------
12/31/94 1,000,000 1,000,000 1,000,000
6/30/95 1,018,704 1,202,924 1,209,022
6/30/96 1,046,379 1,537,472 1,513,807
6/30/97 1,070,808 2,019,276 1,999,367
6/30/98 1,088,844 2,653,042 2,614,802
6/30/99 1,110,220 3,376,522 3,116,891

Comparison of change in value of a $1,000,000 investment in Evergreen Select
Strategic Growth Fund, Class I, the Russell 1000 Growth and the Consumer Price
Index (CPI).

The Russell 1000 Growth is an unmanaged index, which does not include
transaction costs associated with buying and selling securities nor any
management fees.

The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in the index.

Historical performance shown for Class IS from 11/24/97 to its inception is
based on the performance of Class I and has not been adjusted to reflect the
effect of the 0.25% 12b-1 fee applicable to Class IS. Class I pays no 12b-1 fee.
If these fees had been reflected, returns would have been lower. Prior to
11/24/97, the returns for Classes I and IS are based on the Fund's predecessor
common trust fund's (CTFs) performance, adjusted for estimated mutual fund
expenses. The CTFs were not registered under the 1940 Act and were not subject
to certain investment restrictions. If the CTFs had been registered, their
performance might have been adversely affected. Performance for the CTF has been
adjusted to include the effect of estimated mutual fund class gross expense
ratios at the time the CTF was converted to a mutual fund. If fee waivers and
expense reimbursements had been calculated into the mutual fund class expense
ratio the total returns would be as follows: Class I--3 year = 27.27% and since
12/31/94 = 28.85%; Class IS--3 year = 26.92% and since 12/31/94 = 28.51%.

30
<PAGE>

EVERGREEN
Select Strategic Growth Fund

Portfolio Manager Commentary

Portfolio Management Team

David Chow and W. Shannon Reid manage the Evergreen Select Strategic Growth
Fund. They have over 29 years combined investment experience and boast a unique
blend of quantitative and traditional fundamental analysis skills. Their
disciplined approach promotes consistency of results and superior service.

[PHOTO OF DAVID M. CHOW APPEARS HERE] [PHOTO OF W. SHANNON REID APPEARS HERE]
David M. Chow W. Shannon Reid

Performance

Evergreen Select Strategic Growth Fund, Class I posted a 19.2% total return for
the fiscal year ended June 30, 1999 versus a 27.3% return for its benchmark, the
Russell 1000 Growth Index. Performance significantly trailed the benchmark after
the first half of the fiscal year, as the stock market exhibited a very narrow
advance in which the top 20 largest stocks within the Russell 1000 Growth Index
accounted for 73% of the index's gain.

Portfolio
Characteristics
---------------

Total Net Assets $493,769,324
Number of Issues 64
P/E Ratio 42.5x
Beta 1.12

Market Environment

The list of financial and economic crises were multiple during the first fiscal
quarter ending September 30, 1998. Much of Asia was sliding into recession,
Russia was experiencing debt default and financial meltdown, and Brazil was
witnessing interest rates rise above 40% in an effort to protect its currency.
Amid these disasters, the Federal Reserve Board apparently felt that risks to
the monetary system were so great that they coordinated a takeover of the hedge
fund Long Term Capital by its creditors.

The U.S. equity market buckled under this pressure, as most major indices
produced negative double-digit returns during the period. During the December
quarter, however, the market rebounded. Resilient domestic economic growth,
global markets' stability, and support by the Federal Reserve Board (in the form
of 3 interest rate cuts) renewed investor confidence and fueled the S&P 500
Index's impressive 21.3% quarterly return, the strongest quarterly advance in
twenty years.

The upward trend has continued over the past six months. Investors have shrugged
off rising interest rates, choosing instead to focus on the strong economy and
benign inflation.

31
<PAGE>

EVERGREEN
Select Strategic Growth Fund

Portfolio Manager Commentary

Top 5 Industries
----------------
(as a percentage of net assets)

Information Services & Technology 19.9%
Healthcare Products & Services 17.0%
Retailing & Wholesale 13.5%
Communication Systems & Services 9.3%
Electrical Equipment & Services 7.9%

Portfolio Activity

Technology represents the Fund's largest sector representation at 20%. Prominent
holdings include well-known names such as Microsoft and Cisco, as well as
lesser-known companies such as Siebel Systems and Broadvision. Despite recent
significant price appreciation, our stance regarding this sector remains
positive and we continue to look for attractive entry points. Our focus revolves
around companies which provide solutions for the following three themes:

. continued growth in demand for communications network bandwidth

. increasing demand for data management and storage capacity

. enablers of business to business e-commerce.

Healthcare is the Fund's second largest sector weighting at 17%. Pharmaceutical
stocks have fallen out of favor over the past several months due to a rotation
into more economically sensitive names, slowing earnings growth rates and
political risk (a Medicare drug benefit is likely to be a campaign issue in the
year 2000). We believe the worst is over for this group. Two of our favorites
are Warner Lambert and Bristol-Meyers. Medical device stocks will trade upon
their specific product cycles. Our largest holdings here include VISX Corp. and
Guidant. Hospital management companies face a difficult operating environment
due to rising costs and falling reimbursement rates; thus we continue to avoid
this area.

Retailers account for 13% of the fund. We continue to like the prospects for
companies who exhibit an ability to gain market share against the backdrop of an
increasingly competitive retail environment. Major holdings include Wal-Mart,
Home Depot and Best Buy.

Top 10 Holdings*
---------------
(as a percentage of net assets)

General Electric Co. 5.8%
Microsoft Corp. 5.4%
Cisco Systems, Inc. 3.8%
Lucent Technologies, Inc. 3.6%
Bristol-Myers Squibb Co. 3.2%
EMC Corp. 3.1%
Wal-Mart Stores, Inc. 3.1%
Warner-Lambert Co. 2.7%
Home Depot, Inc. 2.3%
Johnson & Johnson 2.1%

*Portfolio composition subject to change

Outlook

The Fund outperformed its benchmark in each year from 1995 through 1997.
Relative performance slipped in 1998 when our bottom-up, diversified approach
did not keep up with the market's narrow advance. Going forward, we will
continue to adhere to our investment discipline of owning a diversified
portfolio of companies, which we believe will produce superior and sustainable
earnings growth. We are confident that as the stock market broadens and rewards
strong fundamentals and earnings growth, our style will once again outperform.

32
<PAGE>

EVERGREEN
Select Strategic Value Fund

Fund at a Glance as of June 30, 1999

PORTFOLIO PROFILE

Philosophy

Evergreen Select Strategic Value Fund is a value-style equity product which
emphasizes large and mid-capitalization U.S. companies. This philosophy holds
that stocks, over time, can become mispriced relative to their true value and
that attractive opportunities can be identified through a combination of
quantitative analysis and rigorous fundamental research.

Process

Following the initial screen by our proprietary model which determines that a
stock is selling at a reasonable valuation level, the Strategic Value team
employs a labor intensive research effort in order to dig deep for clues to
uncover value. Qualitative factors which are analyzed include industry
leadership, quality of management, the company's current competitive position
and future earnings prospects.

Benchmark

Russell 1000 Value Index

PERFORMANCE AND RETURNS/1/

Portfolio Inception Date 12/31/81 Class I Class IS
Class Inception Date 11/24/97 03/11/98
Average Annual Returns
1 year 8.85% 8.60%
3 years 22.28% 22.01%
5 years 22.14% 21.86%
10 years 14.87% 14.59%
Since Inception 17.41% 17.12%
12-month income dividends per share $ 2.93 $ 2.41
12-month capital gain distributions per share $ 4.89 $ 4.89

LONG TERM GROWTH

[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Date Consumer Price Index - US Russell 1000 Value Select Strategic Value Class I
- ---- ------------------------- ------------------ ------------------------------
<S> <C> <C> <C>
6/30/89 1,000,000 1,000,000 1,000,000
6/30/90 1,046,728 1,067,015 1,060,827
6/30/91 1,095,890 1,123,988 1,039,276
6/30/92 1,129,734 1,303,207 1,156,546
6/30/93 1,163,570 1,589,238 1,417,841
6/30/94 1,192,587 1,615,032 1,471,162
6/30/95 1,228,848 1,944,912 1,883,533
6/30/96 1,262,232 2,423,915 2,187,321
6/30/97 1,291,700 3,228,269 2,959,338
6/30/98 1,313,457 4,159,571 3,674,144
6/30/99 1,339,243 4,840,350 3,999,293
</TABLE>
Comparison of change in value of a $1,000,000 investment in Evergreen Select
Strategic Value Fund, Class I, the Russell 1000 Value Index and the Consumer
Price Index (CPI).

The Russell 1000 Value is an unmanaged index, which does not include transaction
costs associated with buying and selling securities nor any management fees.

The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in the index.

Historical performance shown for Class IS from 11/24/97 to its inception is
based on the performance of Class I and has not been adjusted to reflect the
effect of the 0.25% 12b-1 fee applicable to Class IS. Class I pays no 12b-1 fee.
If these fees had been reflected, returns would have been lower. Prior to
11/24/97, the returns for Classes I and IS are based on the Fund's predecessor
common trust fund's (CTFs) performance, adjusted for estimated mutual fund
expenses. The CTFs were not registered under the 1940 Act and were not subject
to certain investment restrictions. If the CTFs had been registered, their
performance might have been adversely affected. Performance for the CTF has been
adjusted to include the effect of estimated mutual fund class gross expense
ratios at the time the CTF was converted to a mutual fund. If fee waivers and
expense reimbursements had been calculated into the mutual fund class expense
ratio the total returns would be as follows: Class I--3 year =22.34%, 5 year
=22.23%, 10 year = 14.96 % and since 12/31/81 = 17.51%; Class IS--3 year =
22.07%, 5 year = 21.94%, 10 year = 14.69% and since 12/31/81 = 17.23%.

33
<PAGE>

EVERGREEN
Select Strategic Value Fund

Portfolio Manager Commentary

Portfolio Management Team

Evergreen Select Strategic Value Fund is managed by a team of 3 portfolio
managers with over 61 years of combined investment experience and expertise in
value equity analysis and management. The team-oriented approach incorporates
multiple perspectives to identify the most attractive opportunities in the
market and ensures adherence to the style-specific objectives.

[PHOTO OF ELIZABETH SMITH APPEARS HERE] [PHOTO OF JACK GRAY APPEARS HERE]
Elizabeth Smith Jack Gray

[PHOTO OF TIM O'GRADY APPEARS HERE]
Tim O'Grady

Performance

Evergreen Select Strategic Value Fund, Class I posted an 8.9% total return for
the fiscal year ended June 30, 1999. This performance lagged the 16.4% return
for the Russell 1000 Value Index. The fund underperformed the benchmark during a
period in which growth stocks outpaced their value counterparts considerably.
Lagging performance can also be contributed to a poor showing by the portfolio's
utility holdings.

Portfolio
Characteristics
---------------

Total Net Assets $532,805,514
Number of Issues 49
P/E Ratio 19.1x
Beta 1.00

Market Environment

Although the U.S. economy provided a positive backdrop for the stock market with
solid growth and low inflation, value stocks nevertheless experienced a
turbulent fiscal year. During the first three months of the fiscal period, for
example, value stocks, as measured by the Russell 1000 Value Index, declined
nearly 12%, and for the entire year lagged the S&P 500 Index by 6.4%.

For the first nine months of the period, large cap growth stocks were investors'
overwhelming asset class of choice. Technology stocks thrived in this
environment, while more value-oriented sectors such as financials and utilities
trailed far behind. As value managers, it was difficult to witness growth stocks
continue to soar to new highs despite the prospect for a slower earnings growth
and soaring valuation levels.

34
<PAGE>

EVERGREEN
Select Strategic Value Fund

Portfolio Manager Commentary

Portfolio Activity

Technology represented one of the portfolio's greatest areas of strength, and
stocks purchased in this sector during the fiscal period added to the fund's
performance. Underlying this exposure is an emphasis on industry leaders such as
Intel and IBM, while stock-picking remains sensitive to valuation levels. During
the fiscal year, these two technology stalwarts, and current holdings, posted
total returns of 61% and 126%, respectively. The portfolio's overweighting in
technology versus the benchmark reflects our view that technology is the single
most significant trend driving the U.S. economy.

Strong stock selection among our telecommunications holdings also had a positive
impact on total return. Nokia, a telecom company that supplies mobile phones as
well as multi-media network terminals, was one of the top performers, up over
150% during the twelve months. Motorola and Century Telephone also posted strong
returns of 81% and 31%, respectively.

Top 5 Industries
----------------
(as a percentage of net assets)

Banks 13.5%
Finance & Insurance 11.7%
Oil/Energy 9.3%
Utilities-Telephone 9.0%
Information Services & Technology 5.2%

We began a major restructuring of our utility holdings during the second half of
the fiscal year. Pinnacle West was eliminated from the portfolio due to
regulatory uncertainty and initial positions were taken in ALLTEL and GTE. In
the case of ALLTEL, its rural cellular and telephone assets enjoy a strong
competitive position. The company's forecasted earnings per share growth rate is
superior to that of its peers, while its current valuation, we feel, does not
reflect this growth. GTE is the largest United States based local telephone
company and second largest provider of cellular service.

Within basic industry we added Mead and Hercules, the effect of which moved our
sector policy to a slight overweight from a neutral stance from earlier in the
period. Mead Corporation, a leading company in the paper and forest products
industry, trades at a significant discount (15-20%) to its peers, where
historically the shares have traded at parity or at a slight premium to the
group.

35
<PAGE>

EVERGREEN
Select Strategic Value Fund

Portfolio Manager Commentary

Top 10 Holdings*
---------------
(as a percentage of net assets)

Mobil Corp. 4.0%
Chase Manhattan Corp. 3.7%
Citigroup, Inc. 3.7%
GTE Corp. 3.6%
International Business Machines Corp. 3.4%
Mellon Bank Corp. 3.2%
AT&T Corp. 3.1%
Williams Companies, Inc. 3.1%
Alcoa, Inc. 3.0%
Koninklijke (Royal) Philips Electronics NV 2.9%

*Portfolio composition subject to change

Outlook

As we enter the final six months of 1999, from a valuation perspective, value
stocks remain inexpensive relative to growth. The relative price earnings
multiple (defined as the Russell 1000 Growth Index divided by the Russell 1000
Value Index price earnings multiple) for growth stocks still commands a 60%
premium over value stocks, compared to an eighteen year average of 40%. Our
sense is "old generals", i.e., growth stock leadership never dies it just fades
away. In other words, we do not expect a pendulum swing to value from the growth
leadership to develop overnight. It is reasonable to presume the movement
towards value, i.e., the foot soldiers, will be a slow process, aided and
abetted by further evidence of stronger than anticipated economic growth and the
wide relative valuation gap between styles.

36
<PAGE>

EVERGREEN
Select Balanced Fund

Financial Highlights
(For a share outstanding throughout each period)

Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
CLASS I
Net asset value
beginning of period $ 13.39 $ 12.58
-------- --------
Income from investment
operations
Net investment income 0.46 0.16
Net realized and
unrealized gain on
securities 0.27 0.81
-------- --------
Total from investment
operations 0.73 0.97
-------- --------
Distributions to
shareholders from
Net realized gains on
securities (0.14) 0
-------- --------
Net investment income (0.42) (0.16)
Total distributions (0.56) (0.16)
-------- --------
Net asset value end of
period $ 13.56 $ 13.39
-------- --------
Total return 5.70% 7.76%
Ratios/supplemental data
Net assets end of period
(thousands) $658,733 $723,850
Ratios to average net
assets
Expenses++ 0.69% 0.70%+
Net investment income 3.47% 2.80%+
Portfolio turnover rate 60% 37%

Year Ended Period Ended
June 30, 1999 June 30, 1998 (b)
CLASS IS
Net asset value
beginning of period $ 13.42 $ 13.34
-------- --------
Net realized and
unrealized gain on
securities 0.35 0.09
-------- --------
Total from investment
operations 0.70 0.16
-------- --------
Income from investment
operations
Net investment income 0.35 0.07
Net realized gains on
securities (0.14) 0
-------- --------
Total distributions (0.53) (0.08)
-------- --------
Net asset value end of
period $ 13.59 $ 13.42
-------- --------
Distributions to
shareholders from
Net investment income (0.39) (0.08)
Total return 5.43% 1.23%
Ratios/supplemental data
Net assets end of period
(thousands) $ 405 $ 215
Ratios to average net
assets
Expenses++ 0.93% 0.95%+
Net investment income 3.35% 2.58%+
Portfolio turnover rate 60% 37%

(a) For the period from January 22, 1998 (commencement of Class operations) to
June 30, 1998.
(b) For the period from April 9, 1998 (commencement of Class operations) to
June 30, 1998.
+ Annualized
++ The ratio of expenses to average net assets includes fee waivers and
excludes fee credits.

See Combined Notes to Financial Statements.

37
<PAGE>

EVERGREEN
Select Core Equity Fund

Financial Highlights
(For a share outstanding throughout each period)

Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
CLASS I
Net asset value beginning of period $ 92.59 $ 82.97
---------- ----------
Income from investment operations
Net investment income 0.72 0.51
Net realized and unrealized gains or losses
on securities 7.51 9.62
---------- ----------
Total from investment operations 8.23 10.13
---------- ----------
Distributions to shareholders from
Net investment income (0.69) (0.51)
Net realized gains (7.83) 0
---------- ----------
Total distributions to shareholders (8.52) (0.51)
---------- ----------
Net asset value, end of period $ 92.30 $ 92.59
---------- ----------
Total return 9.82% 12.23%
Ratios/supplemental data
Net assets, end of period (thousands) $1,913,483 $1,952,436
Ratios to average net assets
Expenses++ 0.67% 0.70%+
Net investment income 0.83% 0.96%+
Portfolio turnover rate 55% 22%

Year Ended Period Ended
June 30, 1999 June 30, 1998 (b)
CLASS IS
Net asset value beginning of period $ 87.33 $ 80.21
---------- ----------
Income from investment operations
Net investment income 0.48 0.27
Net realized and unrealized gains or losses
on securities 7.02 7.16
---------- ----------
Total from investment operations 7.50 7.43
---------- ----------
Distributions to shareholders from
Net investment income (0.46) (0.31)
Net realized gains (7.83) 0
---------- ----------
Total distributions to shareholders (8.29) (0.31)
---------- ----------
Net asset value, end of period $ 86.54 $ 87.33
---------- ----------
Total return 9.53% 9.27%
Ratios/supplemental data
Net assets, end of period (thousands) $ 30,240 $ 18,244
Ratios to average net assets
Expenses++ 0.92% 0.95%+
Net investment income 0.56% 0.60%+
Portfolio turnover rate 55% 22%

(a) For the period from November 24, 1997 (commencement of Class operations) to
June 30, 1998.
(b) For the period from February 4, 1998 (commencement of Class operations) to
June 30, 1998.
+ Annualized
++ The ratio of expenses to average net assets includes fee waivers and
excludes fee credits.

See Combined Notes to Financial Statements.

38
<PAGE>

EVERGREEN
Select Diversified Value Fund

Financial Highlights
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
<S> <C> <C>
CLASS I
Net asset value beginning of period $ 26.22 $ 23.81
-------- --------
Income from investment operations
Net investment income 0.22 0.14
Net realized and unrealized gains or losses
on securities and futures contracts 2.06 2.41
-------- --------
Total from investment operations 2.28 2.55
-------- --------
Distributions to shareholders from
Net investment income (0.20) (0.14)
Net realized gains (0.65) 0
-------- --------
Total distributions to shareholders (0.85) (0.14)
-------- --------
Net asset value, end of period $ 27.65 $ 26.22
-------- --------
Total return 9.08% 10.72%
Ratios/supplemental data
Net assets, end of period (thousands) $606,355 $797,352
Ratios to average net assets
Expenses++ 0.62% 0.68%+
Net investment income 0.88% 1.24%+
Portfolio turnover rate 76% 56%

<CAPTION>
Year Ended Period Ended
June 30, 1999 June 30, 1998 (b)
<S> <C> <C>
CLASS IS
Net asset value beginning of period $ 25.93 $ 26.56
-------- --------
Income from investment operations
Net investment income 0.12 0.06
Net realized and unrealized gains or losses
on securities and futures contracts 2.07 (0.64)
-------- --------
Total from investment operations 2.19 (0.58)
-------- --------
Distributions to shareholders from
Net investment income (0.14) (0.05)
Net realized gains (0.65) 0
-------- --------
Total distributions to shareholders (0.79) (0.05)
-------- --------
Net asset value, end of period $ 27.33 $ 25.93
-------- --------
Total return 8.77% (2.19%)
Ratios/supplemental data
Net assets, end of period (thousands) $ 1,384 $ 210
Ratios to average net assets
Expenses++ 0.88% 0.93%+
Net investment income 0.62% 0.80%+
Portfolio turnover rate 76% 56%
</TABLE>

(a) For the period from January 22, 1998 (commencement of Class operations) to
June 30, 1998.
(b) For the period from March 31, 1998 (commencement of Class operations) to
June 30, 1998.
+ Annualized
++ The ratio of expenses to average net assets includes fee waivers and ex-
cludes fee credits.

See Combined Notes to Financial Statements.

39
<PAGE>

EVERGREEN
Select Large Cap Blend Fund

Financial Highlights
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
Year Ended Period Ended
June 30, 1999 (d) June 30, 1998 (a)
<S> <C> <C>
CLASS I (c)
Net asset value, beginning of period $ 50.74 $ 45.05
-------- --------
Income from investment operations
Net investment income 0.40 0.23
Net realized and unrealized gains or
losses on securities 2.81 5.70
-------- --------
Total from investment operations 3.21 5.93
-------- --------
Distributions to shareholders from
Net investment income (0.40) (0.24)
Net realized gains (5.20) 0
-------- --------
Total distributions (5.60) (0.24)
-------- --------
Net asset value, end of period $ 48.35 $ 50.74
-------- --------
Total return 7.12% 13.18%
Ratios/supplemental data
Net assets end of period (thousands) $438,375 $497,534
Ratios to average net assets
Expenses++ 0.68% 0.71%+
Net investment income 0.79% 0.80%+
Portfolio turnover rate 46% 42%

<CAPTION>
Year Ended Period Ended
June 30, 1999 June 30, 1998 (b)
<S> <C> <C>
CLASS IS
Net asset value, beginning of period $ 50.74 $ 49.75
-------- --------
Income from investment operations
Net investment income 0.28 0.08
Net realized and unrealized gains or
losses on securities 2.81 1.00
-------- --------
Total from investment operations 3.09 1.08
-------- --------
Distributions to shareholders from
Net investment income (0.30) (0.09)
Net realized gains (5.20) 0
-------- --------
Total distributions (5.50) (0.09)
-------- --------
Net asset value, end of period $ 48.33 $ 50.74
-------- --------
Total return 6.83% 2.17%
Ratios/supplemental data
Net assets end of period (thousands) $ 382 $ 301
Ratios to average net assets
Expenses++ 0.93% 0.96%+
Net investment income 0.53% 0.57%+
Portfolio turnover rate 46% 42%
</TABLE>

(a) For the period from November 24, 1997 (commencement of Class operations) to
June 30, 1998.
(b) For the period from March 12, 1998 (commencement of Class operations) to
June 30, 1998.
(c) On April 30, 1999, Class IC shares of the Fund were converted to Class I
shares. Shareholders of Class IC shares became owners of that number of
Class I shares having a net asset value equal to the net asset value of
their shares immediately prior to the close of business on April 30, 1999.
Class IC is the accounting survivor, its basis of accounting for assets and
liabilities and its operating results for the periods prior to April 30,
1999 have been carried forward in these financial statements.
(d) The Fund redesignated $0.02 per share for Class I and IS of distributions
from net investment income declared after January 1, 1999, as capital gains
distributions after January 1, 1999.
+ Annualized
++ The ratio of expenses to average net assets includes fee waivers and ex-
cludes fee credits.

See Combined Notes to Financial Statements.

40
<PAGE>

EVERGREEN
Select Small Cap Growth Fund

Financial Highlights
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
Year Ended Period Ended
Year Ended Period Ended February 28, February 28, Period Ended
June 30, 1999 June 30, 1998 (c) 1998 # 1997 (b) # June 30, 1996 (a)
<S> <C> <C> <C> <C> <C>
CLASS I
Net asset value
beginning of period $ 13.12 $ 13.23 $ 11.28 $11.65 $10.00
------- ------- ------- ------ ------
Income from investment
operations
Net investment loss (0.08) (0.03) (0.06) (0.04) (0.03)
Net realized and
unrealized gain or loss
on securities 0.63 (0.08) 2.48 (0.16) 1.68
------- ------- ------- ------ ------
Total from investment
operations 0.55 (0.11) 2.42 (0.20) 1.65
------- ------- ------- ------ ------
Distributions to
shareholders from
Net realized gains (0.02) 0 (0.47) (0.17) 0
------- ------- ------- ------ ------
Total distributions (0.02) 0 (0.47) (0.17) 0
------- ------- ------- ------ ------
Net asset value end of
period $ 13.65 $ 13.12 $ 13.23 $11.28 $11.65
------- ------- ------- ------ ------
Total return 4.22% (0.83%) 21.67% (1.75%) 16.50%
Ratios/supplemental data
Net assets end of period
(thousands) $70,114 $69,283 $47,524 $2,888 $2,446
Ratios to average net
assets
Expenses++ 1.02% 1.01%+ 0.92% 1.00%+ 1.00%+
Net investment loss (0.68%) (0.62%)+ (0.48%) (0.57%)+ (0.45%)+
Portfolio turnover rate 165% 54% 166% 123% 57%
</TABLE>

(a) For the period from December 28, 1995 (commencement of Class operations) to
June 30, 1996
(b) For the period form July 1, 1996 to February 28, 1997. The Fund changed its
fiscal year end from June 30 to February 28, effective February 28, 1997.
(c) For the period from March 1, 1998 to June 30, 1998. The Fund changed its
fiscal year end from February 28 to June 30, effective June 30, 1998.
+ Annualized
++ The ratio of expenses to average net assets includes fee waivers and ex-
cludes fee credits.
# Net investment loss based on average shares outstanding during the period.

See Combined Notes to Financial Statements.

41
<PAGE>

EVERGREEN
Select Small Company Value Fund

Financial Highlights
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
<S> <C> <C>
CLASS I
Net asset value beginning of period $ 10.09 $ 10.00
-------- -------
Income from investment operations
Net investment income 0.03 0.04
Net realized and unrealized gains or losses
on securities (1.12) 0.09
-------- -------
Total from investment operations (1.09) 0.13
-------- -------
Distributions to shareholders from
Net investment income (0.03) (0.04)
Net realized gains (0.03) 0
-------- -------
Total distributions to shareholders (0.06) (0.04)
-------- -------
Net asset value, end of period $ 8.94 $ 10.09
-------- -------
Total return (10.73%) 1.28%
Ratios/supplemental data
Net assets, end of period (thousands) $108,180 $77,647
Ratios to average net assets
Expenses++ 0.97% 1.01%+
Net investment income 0.29% 0.68%+
Portfolio turnover rate 48% 23%
</TABLE>

<TABLE>
<CAPTION>
Period Ended
June 30, 1999 # (b)
<S> <C>
CLASS IS
Net asset value beginning of period $8.56
-----
Income from investment operations
Net investment income 0
Net realized and unrealized gains or losses on securities 0.08
-----
Total from investment operations 0.08
-----
Net asset value, end of period $8.64
-----
Total return 0.99%
Ratios/supplemental data
Net assets, end of period (thousands) $ 1
Ratios to average net assets
Expenses++ 1.24%+
Net investment income 0.00%+
Portfolio turnover rate 48%
</TABLE>

(a) For the period from December 23,1997 (commencement of Class operations) to
June 30, 1998.
(b) For the period from December 31,1998 (commencement of Class operations) to
June 30, 1999.
+ Annualized
++ The ratio of expenses to average net assets includes fee waivers and ex-
cludes fee credits.
# Net investment income or loss based on average shares outstanding during the
period.

See Combined Notes to Financial Statements.

42
<PAGE>

EVERGREEN
Select Social Principles Fund

Financial Highlights
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
<S> <C> <C>
CLASS I (c)
Net asset value beginning of period $ 38.95 $ 36.65
-------- --------
Income from investment operations
Net investment income 0.11 0.03
Net realized and unrealized gain on securities 0.09 2.31
-------- --------
Total from investment operations 0.20 2.34
-------- --------
Distributions to shareholders from
Net investment income (0.14) (0.04)
Net realized gains on securities (2.10) 0
-------- --------
Total distributions (2.24) (0.04)
-------- --------
Net asset value end of period $ 36.91 $ 38.95
-------- --------
Total return 0.90% 6.38%
Ratios/supplemental data
Net assets end of period (thousands) $134,476 $177,187
Ratios to average net assets
Expenses++ 0.84% 0.86%+
Net investment income 0.33% 0.12%+
Portfolio turnover rate 36% 24%

<CAPTION>
Year Ended Period Ended
June 30, 1999 June 30, 1998 (b)
<S> <C> <C>
CLASS IS
Net asset value beginning of period $ 38.94 $ 38.44
-------- --------
Income from investment operations
Net investment loss (0.04) (0.01)
Net realized and unrealized gain on securities 0.14 0.52
-------- --------
Total from investment operations 0.10 0.51
-------- --------
Distributions to shareholders from
Net investment income (0.08) (0.01)
Net realized gains on securities (2.10) 0
-------- --------
Total distributions (2.18) (0.01)
-------- --------
Net asset value end of period $ 36.86 $ 38.94
-------- --------
Total return 0.64% 1.32%
Ratios/supplemental data
Net assets end of period (thousands) $ 60 $ 205
Ratios to average net assets:
Expenses++ 1.09% 1.11%+
Net investment income or loss 0.06% (0.12%)+
Portfolio turnover rate 36% 24%
</TABLE>

(a) For the period from November 24, 1997 (commencement of Class operations) to
June 30, 1998.
(b) For the period from March 12, 1998 (commencement of Class operations) to
June 30, 1998.
(c) On April 30, 1999, Class IC shares of the Fund were converted to Class I
shares. Shareholders of Class IC shares became owners of that number of
Class I shares having a net asset value equal to the net asset value of
their shares immediately prior to the close of business on April 30, 1999.
Class IC is the accounting survivor, its basis of accounting for assets and
liabilities and its operating results for the periods prior to April 30,
1999 have been carried forward in these financial statements.
+ Annualized
++ The ratio of expenses to average net assets includes fee waivers and ex-
cludes fee credits.

See Combined Notes to Financial Statements.

43
<PAGE>

EVERGREEN
Select Special Equity Fund

Financial Highlights
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
Year Ended Period Ended
Year Ended June 30, Period Ended October 31, 1995 (b) October 31, 1994 (a)
---------------------------- June 30, -------------------- --------------------
1999 (f) 1998 1997 1996 (c) (d) (e) Retail Class Original Class
<S> <C> <C> <C> <C> <C> <C>
CLASS I
Net asset value
beginning of period $ 11.25 $ 11.27 $ 11.86 $ 11.42 $ 9.37 $ 10.00
-------- ------- ------- ------- ------- -------
Income from investment
operations
Net investment income or
loss (0.02) (0.05) 0.02 0.07 0.12 0.06
Net realized and
unrealized gains or
losses on
securities 4.15 1.52 1.81 2.13 2.12 (0.63)
-------- ------- ------- ------- ------- -------
Total from investment
operations 4.13 1.47 1.83 2.20 2.24 (0.57)
-------- ------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income 0 0 (0.03) (0.07) (0.12) (0.06)

Net realized gains (1.18) (1.49) (2.39) (1.69) (0.07) 0
-------- ------- ------- ------- ------- -------
Total distributions to
shareholders (1.18) (1.49) (2.42) (1.76) (0.19) (0.06)
-------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 14.20 $ 11.25 $ 11.27 $ 11.86 $ 11.42 $ 9.37
-------- ------- ------- ------- ------- -------
Total return 42.02% 14.23% 17.94% 22.27% 24.44% (5.72%)
Ratios/supplemental data
Net assets, end of
period (thousands) $116,966 $73,981 $71,980 $63,680 $57,396 $10,069
Ratios to average net
assets
Expenses++ 1.06% 1.10% 0.84% 0.34%+ 0.32% 0.15%+
Net investment income or
loss (0.36%) (0.48%) 0.19% 0.94%+ 1.14% 1.06%+
Portfolio turnover rate 99% 62% 74% 72% 129% 39%
</TABLE>
(a) For the period from March 15, 1994 (commencement of Class operations) to
October 31, 1994.
(b) On February 21, 1995, the shares of the Fund were redesignated as either
Retail or Institutional shares. On that date, the Fund's net investment in-
come, expenses and distributions for the period November 1, 1994 through
February 20, 1995 were allocated to each Class of shares. The basis for the
allocation was the relative net assets of each Class of shares as of Febru-
ary 21, 1995. The results were combined with the results of operations and
distributions for each applicable Class for the period February 21, 1995
through October 31, 1995. For the year ended October 31, 1995, the Finan-
cial Highlights' ratio of expenses, net investment income, total return,
and the per share investment activities and distributions reflect this al-
location.
(c) For the period from November 1, 1995 to June 30, 1996. The Fund changed its
fiscal year end from October 31 to June 30, effective June 30, 1996.
(d) On April 15, 1996, the Conestoga Special Equity Fund was acquired by the
CoreFund Special Equity Fund ("CoreFund").
(e) On April 15, 1996, the Institutional Class shares of the CoreFund were ex-
changed for Class Y shares and the Retail Class shares of the Core Fund
were exchanged for Class A shares of the CoreFund.
(f) On July 24, 1998, the assets and certain liabilities of CoreFund were ac-
quired by Evergreen Select Special Equity Fund ("Special Equity Fund").
Shareholders of CoreFund, Class Y became owners of that number of shares of
Special Equity Fund, Class I having an aggregate net asset value equal to
the aggregate net asset value of their shares of CoreFund immediately prior
to the close of business on July 24, 1998. CoreFund is the accounting sur-
vivor, its basis of accounting for assets and liabilities and its operating
results for the periods prior to July 24, 1998 have been carried forward in
these financial statements.
+ Annualized
++ The ratio of expenses to average net assets includes fee waivers and ex-
cludes fee credits.

See Combined Notes to Financial Statements.

44
<PAGE>

EVERGREEN
Select Special Equity Fund

Financial Highlights
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
Year Ended Period Ended
Year Ended June 30, Period Ended October 31, 1995 (b) October 31, 1994 (a)
------------------------- June 30, -------------------- --------------------
1999 (f) 1998 1997 1996 (c) (d) (e) Retail Class Original Class
<S> <C> <C> <C> <C> <C> <C>
CLASS IS
Net asset value
beginning of period $11.18 $11.25 $11.85 $11.42 $ 9.37 $ 10.00
------ ------ ------ ------ ------ -------
Income from investment
operations
Net investment income or
loss (0.06) (0.10) 0 0.08 0.12 0.06
Net realized and
unrealized gains or
losses on securities 4.11 1.52 1.81 2.11 2.12 (0.63)
------ ------ ------ ------ ------ -------
Total from investment
operations 4.05 1.42 1.81 2.19 2.24 (0.57)
------ ------ ------ ------ ------ -------
Distributions to
shareholders from
Net investment income 0 0 (0.02) (0.07) (0.12) (0.06)
Net realized gains (1.18) (1.49) (2.39) (1.69) (0.07) 0
------ ------ ------ ------ ------ -------

Total distributions to
shareholders (1.18) (1.49) (2.41) (1.76) (0.19) (0.06)
------ ------ ------ ------ ------ -------
Net asset value, end of
period $14.05 $11.18 $11.25 $11.85 $11.42 $ 9.37
------ ------ ------ ------ ------ -------
Total return 41.55% 13.78% 17.73% 22.14% 24.44% (5.72%)
Ratios/supplemental data
Net assets, end of
period (thousands) $4,043 $2,981 $2,347 $1,144 $ 734 $10,069
Ratios to average net
assets
Expenses++ 1.31% 1.35% 1.14% 0.37%+ 0.27% 0.15%+
Net investment income or
loss (0.61%) (0.73%) (0.12%) 0.91%+ 1.29% 1.06%+
Portfolio turnover rate 99% 62% 74% 72% 129% 39%
</TABLE>
(a) For the period from March 15, 1994 (commencement of Class operations) to
October 31, 1994.
(b) On February 21, 1995, the shares of the Fund were redesignated as either
Retail or Institutional shares. On that date, the Fund's net investment
income, expenses and distributions for the period November 1, 1994 through
February 20, 1995 were allocated to each Class of shares. The basis for the
allocation was the relative net assets of each Class of shares as of
February 21, 1995. The results were combined with the results of operations
and distributions for each applicable Class for the period February 21, 1995
through October 31, 1995. For the year ended October 31, 1995, the Financial
cial Highlights' ratio of expenses, net investment income, total return, and
the per share investment activities and distributions reflect this location.
(c) For the period from November 1, 1995 to June 30, 1996. The Fund changed its
fiscal year end from October 31 to June 30, effective June 30, 1996.
(d) On April 15, 1996, the Conestoga Special Equity Fund was acquired by the
CoreFund Special Equity Fund ("CoreFund").
(e) On April 15, 1996, the Institutional Class shares of the CoreFund were
exchanged for Class Y shares and the Retail Class shares of the Core Fund
were exchanged for Class A shares of the CoreFund.
(f) On July 24, 1998, the assets and certain liabilities of CoreFund were
acquired by Evergreen Select Special Equity Fund ("Special Equity Fund").
Shareholders of CoreFund, Class A and Class B became owners of that number
of shares of Special Equity Fund, Class IS having an aggregate net asset
value equal to the aggregate net asset value of their shares of CoreFund
immediately prior to the close of business on July 24, 1998. CoreFund is
the accounting survivor, its basis of accounting for assets and liabilities
and its operating results for the periods prior to July 24, 1998 have been
carried forward in these financial statements.
+ Annualized
++ The ratio of expenses to average net assets includes fee waivers and
excludes fee credits.

See Combined Notes to Financial Statements.

45
<PAGE>

EVERGREEN
Select Strategic Growth Fund

Financial Highlights
(For a share outstanding throughout each period)

Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
CLASS I
Net asset value, beginning of period $ 38.41 $ 32.45
-------- --------
Income from investment operations
Net investment income 0.08 0.04
Net realized and unrealized gains or losses
on securities 6.80 5.96
-------- --------
Total from investment operations 6.88 6.00
-------- --------
Distributions to shareholders from
Net investment income (0.09) (0.04)
Net realized gains (3.26) 0
-------- --------
Total distributions (3.35) (0.04)
-------- --------
Net asset value, end of period $ 41.94 $ 38.41
-------- --------
Total return 19.22% 18.53%
Ratios/supplemental data
Net assets end of period (thousands) $481,119 $321,532
Ratios to average net assets
Expenses++ 0.72% 0.72%+
Net investment income 0.24% 0.19%+
Portfolio turnover rate 155% 80%

Year Ended Period Ended
June 30, 1999 June 30, 1998 (b)
CLASS IS
Net asset value, beginning of period $ 38.36 $ 36.10
-------- --------
Income from investment operations
Net investment income or loss 0.04 (0.08)
Net realized and unrealized gains or losses
on securities 6.73 2.34
-------- --------
Total from investment operations 6.77 2.26
-------- --------
Distributions to shareholders from
Net investment income (0.04) 0
Net realized gains (3.26) 0
-------- --------
Total distributions (3.30) 0
-------- --------
Net asset value, end of period $ 41.83 $ 38.36
-------- --------
Total return 18.88% 6.29%
Ratios/supplemental data
Net assets end of period (thousands) $ 12,650 $ 2,373
Ratios to average net assets
Expenses++ 0.97% 0.97%+
Net investment loss (0.03%) (0.27%)+
Portfolio turnover rate 155% 80%

(a) For the period from November 24, 1997 (commencement of Class operations) to
June 30, 1998.
(b) For the period from February 27, 1998 (commencement of Class operations) to
June 30, 1998.
+ Annualized
++ The ratio of expenses to average net assets includes fee waivers and
excludes fee credits.

See Combined Notes to Financial Statements.

46
<PAGE>

EVERGREEN
Select Strategic Value Fund

Financial Highlights
(For a share outstanding throughout each period)

Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
CLASS I
Net asset value, beginning of period $ 226.02 $ 203.35
-------- --------
Income from investment operations
Net investment income 3.31 1.60
Net realized and unrealized gains or losses
on securities 15.66 22.67
-------- --------
Total from investment operations 18.97 24.27
-------- --------
Distributions to shareholders from
Net investment income (2.93) (1.60)
Net realized gains (4.89) 0
-------- --------
Total distributions to shareholders (7.82) (1.60)
-------- --------
Net asset value, end of period $ 237.17 $ 226.02
-------- --------
Total return 8.85% 11.95%
Ratios/supplemental data
Net assets, end of period (thousands) $530,995 $287,194
Ratios to average net assets
Expenses++ 0.71% 0.75%+
Net investment income 1.61% 1.26%+
Portfolio turnover rate 41% 12%

Year Ended Period Ended
June 30, 1999 June 30, 1998 (b)
CLASS IS
Net asset value, beginning of period $ 226.04 $ 223.08
-------- --------
Income from investment operations
Net investment income 2.87 0.61
Net realized and unrealized gains or losses
on securities 15.62 3.13
-------- --------
Total from investment operations 18.49 3.74
-------- --------
Distributions to shareholders from
Net investment income (2.41) (0.78)
Net realized gains (4.89) 0
-------- --------
Total distributions to shareholders (7.30) (0.78)
-------- --------
Net asset value, end of period $ 237.23 $ 226.04
-------- --------
Total return 8.60% 1.68%
Ratios/supplemental data
Net assets, end of period (thousands) $ 1,810 $ 1,327
Ratios to average net assets
Expenses++ 0.96% 1.00%+
Net investment income 1.34% 0.93%+
Portfolio turnover rate 41% 12%

(a) For the period from November 24, 1997 (commencement of Class operations) to
June 30, 1998.
(b) For the period from March 11, 1998 (commencement of Class operations) to
June 30, 1998.
+ Annualized
++ The ratio of expenses to average net assets includes fee waivers and
excludes fee credits.

See Combined Notes to Financial Statements.

47
<PAGE>

EVERGREEN
Select Balanced Fund

Schedule of Investments
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - 55.3%
Automotive Equipment & Manufacturing - 1.4%
78,900 Ford Motor Co....................................... $ 4,452,919
81,000 Goodyear Tire & Rubber Co........................... 4,763,812
------------
9,216,731
------------
Banks - 4.7%
136,900 Bank One Corp....................................... 8,154,106
136,000 BankAmerica Corp.................................... 9,970,500
83,200 BankBoston Corp..................................... 4,253,600
108,800 Fleet Financial Group, Inc.......................... 4,828,000
95,600 Mellon Bank Corp.................................... 3,477,450
------------
30,683,656
------------
Chemical & Agricultural
Products - 0.6%
105,200 Monsanto Co......................................... 4,148,825
------------
Communication Systems & Services - 5.5%
234,000 *Cisco Systems, Inc................................. 15,049,125
95,100 Lucent Technologies, Inc............................ 6,413,306
172,000 *MCI WorldCom, Inc.................................. 14,802,750
------------
36,265,181
------------
Consumer Products &
Services - 1.6%
31,800 Gillette Co......................................... 1,303,800
106,700 Procter & Gamble Co................................. 9,522,975
------------
10,826,775
------------
Diversified Companies - 2.5%
41,700 Textron, Inc........................................ 3,432,431
136,800 Tyco International Ltd.............................. 12,961,800
------------
16,394,231
------------
Electrical Equipment &
Services - 2.0%
114,500 General Electric Co................................. 12,938,500
------------
Environmental Services - 1.6%
197,900 Waste Management, Inc............................... 10,637,125
------------
Finance & Insurance - 5.0%
204,700 Allstate Corp....................................... 7,343,612
32,000 American International Group, Inc................... 3,746,000
208,050 Citigroup, Inc...................................... 9,882,375
128,200 Federal National Mortgage Assoc..................... 8,765,675
39,700 Merrill Lynch & Co., Inc............................ 3,173,519
------------
32,911,181
------------
Food & Beverage Products - 3.8%
68,100 Anheuser Busch Companies, Inc....................... 4,830,844
83,900 Coca Cola Co........................................ 5,243,750
65,800 *Kroger Co.......................................... 1,838,288
90,000 Nabisco Holdings Corp. Cl. A........................ 3,892,500
95,100 Philip Morris Companies, Inc........................ 3,821,831
104,800 *Safeway, Inc....................................... 5,187,600
------------
24,814,813
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Healthcare Products & Services - 5.5%
106,300 Bristol-Myers Squibb Co.......................... $ 7,487,506
46,487 Johnson & Johnson................................ 4,555,726
24,700 McKesson HBOC, Inc............................... 793,488
35,300 Merck & Co., Inc................................. 2,612,200
83,900 Pfizer, Inc...................................... 9,208,025
45,000 Pharmacia & Upjohn, Inc.......................... 2,556,562
134,000 Warner-Lambert Co................................ 9,296,250
------------
36,509,757
------------
Information Services & Technology - 8.4%
59,500 *America Online, Inc............................. 6,574,750
321,900 Compaq Computer Corp............................. 7,625,006
174,600 *Compuware Corp.................................. 5,554,463
109,800 *EMC Corp........................................ 6,039,000
97,000 Intel Corp....................................... 5,771,500
67,900 International Business Machines Corp............. 8,776,075
167,400 *Microsoft Corp.................................. 15,097,387
------------
55,438,181
------------
Metal Products & Services - 0.8%
85,500 Alcoa, Inc....................................... 5,290,313
------------
Oil/Energy - 2.7%
90,800 Mobil Corp....................................... 8,989,200
140,400 Texaco, Inc...................................... 8,775,000
------------
17,764,200
------------
Paper & Packaging - 0.2%
23,100 International Paper Co........................... 1,166,550
------------
Printing, Publishing, Broadcasting &
Entertainment - 2.4%
143,500 News Corp, Ltd................................... 5,067,344
43,700 Omnicom Group, Inc............................... 3,496,000
96,900 Time Warner, Inc................................. 7,122,150
------------
15,685,494
------------
Retailing & Wholesale - 2.6%
250,700 Dayton Hudson Corp............................... 16,295,500
19,500 Lowe's Companies, Inc............................ 1,105,406
------------
17,400,906
------------
Telecommunication Services & Equipment - 0.2%
42,200 Centurytel, Inc.................................. 1,677,450
------------
Transportation - 0.7%
142,200 Burlington Northern Santa Fe Corp................ 4,408,200
------------
Utilities - Electric - 1.4%
186,600 Cinergy Corp..................................... 5,971,200
60,205 Duke Power Co.................................... 3,273,647
------------
9,244,847
------------
Utilities - Telephone - 1.7%
147,600 GTE Corp......................................... 11,180,700
------------
Total Common Stocks
(cost $300,580,380)............................. 364,603,616
------------
</TABLE>
See Combined Notes to Financial Statements.

48
<PAGE>

EVERGREEN
Select Balanced Fund

Schedule of Investments(continued)
June 30, 1999

<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>

CORPORATE BONDS - 13.5%
Aerospace & Defense - 0.9%
$ 5,371,000 Jet Equipment Trust 144A
9.41%, 6/15/2010................................ 5,961,633
------------
Banks - 2.2%
$ 2,302,000 Boatmen's Bancshares, Inc.
6.75%, 3/15/2003................................ $ 2,312,762
3,836,000 First Chicago Corp.
9.875%, 8/15/2000............................... 3,989,681
7,673,000 NationsBank Corp.
7.625%, 4/15/2005............................... 8,015,024
------------
14,317,467
------------
Chemical & Agricultural
Products - 0.6%
3,836,000 Dow Chemical Co. 8.625%, 4/1/2006................ 4,177,178
------------
Communication Systems & Services - 1.3%
9,000,000 Comcast Cable Communications I 6.20%,
11/15/2008...................................... 8,395,497
------------
Consumer Products &
Services - 0.5%
3,299,000 Stanley Works
7.375%, 12/15/2002.............................. 3,356,963
------------
Finance & Insurance - 4.1%
4,220,000 Dean Witter, Discover & Co.
6.75%, 10/15/2013............................... 4,128,257
4,200,000 General Electric Capital Corp.
8.75%, 3/14/2003................................ 4,528,885
2,110,000 International Bank For Reconstruction &
Development Co. COLTS
7.95%, 5/15/2016................................ 2,364,086
5,000,000 Liberty Financial Cos. Incorporated 7.625%,
11/15/2028...................................... 4,923,970
7,673,000 Loews Corp.
6.75%, 12/15/2006............................... 7,503,043
3,836,000 Merrill Lynch & Co., Inc. 7.00%, 4/27/2008....... 3,810,311
------------
27,258,552
------------
Food & Beverage Products - 0.6%
3,836,000 General Mills, Inc.
9.00%, 12/20/2002............................... 4,122,960
------------
Healthcare Products & Services - 0.6%
3,836,000 Baxter International
7.25%, 2/15/2008................................ 3,895,143
------------
Industrial Specialty Products & Services - 0.2%
1,074,000 Waste Management, Inc.
8.75%, 5/1/2018................................. 1,181,225
------------
Oil/Energy - 1.3%
3,069,000 Atlantic Richfield Co.
9.00%, 4/1/2021................................. 3,682,668
5,000,000 Calenergy Incorporated
7.52%, 9/15/2008................................ 5,004,365
------------
8,687,033
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>

CORPORATE BONDS - continued
Paper & Packaging - 0.8%
$ 5,000,000 Donohue Forest Products Inc
7.625%, 5/15/2007................................. $ 5,060,685
------------
Utilities - Electric - 0.4%
2,762,000 Union Electric Co.
8.00%, 12/15/2022................................. 2,761,829
------------
Total Corporate Bonds
(cost $94,170,987)................................ 89,176,165
------------
YANKEE OBLIGATIONS - 0.6%
3,836,000 Province of Ontario, Canada
7.75%, 6/4/2002
(cost, $4,112,729)................................ 3,973,636
------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 30.1%
Mortgage Pass-Through Certificates - 0.8%
Government National Mortgage Association
1,027,828 8.50%, 5/15/2021.................................. 1,077,568
479,165 8.50%, 7/15/2021.................................. 502,353
1,350,940 8.50%, 6/15/2022.................................. 1,416,316
753,200 9.00%, 9/15/2021.................................. 800,342
837,656 9.00%, 10/15/2021................................. 890,085
563,028 9.50%, 2/15/2021.................................. 607,257
------------
5,293,921
------------
Treasury Notes & Bonds - 29.3%
U.S. Treasury Bonds
15,346,000 7.625%, 2/15/2007................................. 15,916,687
16,800,000 7.875%, 2/15/2021................................. 19,902,758
4,000,000 8.75%, 5/15/2017.................................. 5,035,000
16,113,000 8.875%, 8/15/2017................................. 20,528,977
17,428,000 9.125%, 5/15/2018................................. 22,781,673
U.S. Treasury Notes
17,800,000 5.875%, 7/31/1999................................. 17,816,696
14,650,000 6.00%, 8/15/1999.................................. 14,677,469
14,500,000 6.625%, 4/30/2002................................. 14,867,038
12,579,000 7.75%, 11/30/1999................................. 12,720,514
47,173,000 7.75%, 2/15/2001.................................. 48,809,337
------------
193,056,149
------------
Total U.S. Government & Agency Obligations (cost
$204,274,857)..................................... 198,350,070
------------
SHORT-TERM INVESTMENTS - 0.9%
Repurchase Agreement - 0.9%
5,783,790 Dresdner Bank AG Repo 4.75%, purchased 6/30/1999,
maturing 7/1/1999, maturity value $5,784,553
(cost $5,783,790) (a)............................. 5,783,790
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $608,922,743)........................ 100.4% 661,887,277
Other Assets and Liabilities - net.......... (0.4) (2,749,470)
----- ------------
Net Assets.................................. 100.0% $659,137,807
===== ============
</TABLE>
See Combined Notes to Financial Statements.

49
<PAGE>

EVERGREEN
Select Balanced Fund

Schedule of Investments(continued)
June 30, 1999

(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at
June 30, 1999.
* Non-income producing security
144A Securities that may be resold to "qualified institutional buyers" under
rule 144A of the securities act of 1933. These securities have been
determined to be liquid under guidelines established by the Fund's Board of
Trustees.

Summary of Abbreviations:
COLTS Continuously Offered Longer-term Securities

See Combined Notes to Financial Statements.

50
<PAGE>

EVERGREEN
Select Core Equity Fund

Schedule of Investments
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - 97.2%
Automotive Equipment & Manufacturing - 1.3%
235,000 Arvin Industries, Inc. ............................. $ 8,900,625
280,000 Ford Motor Co. ..................................... 15,802,500
------------
24,703,125
------------
Banks - 5.5%
300,000 Bank One Corp. ..................................... 17,868,750
525,000 BankAmerica Corp. .................................. 38,489,063
225,000 BankBoston Corp. ................................... 11,503,125
240,000 Chase Manhattan Corp. .............................. 20,790,000
205,000 Fleet Financial Group, Inc. ........................ 9,096,875
250,000 US Bancorp.......................................... 8,500,000
------------
106,247,813
------------
Building, Construction & Furnishings - 0.1%
80,000 Masco Corp. ........................................ 2,310,000
------------
Business Equipment &
Services - 0.5%
850,000 *Office Max, Inc. .................................. 10,200,000
------------
Capital Goods - 0.3%
135,000 Deere & Co. ........................................ 5,349,375
------------
Chemical & Agricultural Products - 1.4%
300,000 *Cytec Industries, Inc. ............................ 9,562,500
260,000 Du Pont (E. I.) De Nemours & Co. ................... 17,761,250
------------
27,323,750
------------
Communication Systems & Services - 5.2%
680,000 *Cisco Systems, Inc. ............................... 43,732,500
425,000 *MCI WorldCom, Inc. ................................ 36,576,563
300,000 *Tellabs, Inc. ..................................... 20,268,750
------------
100,577,813
------------
Consumer Products &
Services - 2.6%
175,000 *Cendant Corp. ..................................... 3,587,500
60,000 Colgate-Palmolive Co. .............................. 5,925,000
210,000 Gillette Co. ....................................... 8,610,000
250,000 Liz Claiborne, Inc. ................................ 9,125,000
175,000 Procter & Gamble Co. ............................... 15,618,750
100,000 *R.J. Reynolds Tobacco Holdings, Inc. .............. 3,150,000
50,000 Whirlpool Corp. .................................... 3,700,000
------------
49,716,250
------------
Diversified Companies - 1.4%
245,000 Allied Signal, Inc. ................................ 15,435,000
120,000 Tyco International Ltd. ............................ 11,370,000
------------
26,805,000
------------
Electrical Equipment &
Services - 5.8%
1,000,000 General Electric Co. ............................... 113,000,000
------------
Environmental Services - 1.1%
360,000 *Allied Waste Industries, Inc. ..................... 7,110,000
250,000 Waste Management, Inc. ............................. 13,437,500
------------
20,547,500
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Finance & Insurance - 8.8%
30,000 Aetna, Inc. ........................................ $ 2,683,125
150,000 Allmerica Financial Corp. .......................... 9,121,875
425,000 Allstate Corp. ..................................... 15,246,875
150,000 American International Group, Inc. ................. 17,559,375
450,000 Citigroup, Inc. .................................... 21,375,000
150,000 Federal Home Loan Mortgage Corp. ................... 8,700,000
260,000 Franklin Resources, Inc. ........................... 10,562,500
175,000 Hartford Financial Services Group, Inc. ............ 10,204,687
125,000 Loews Corp. ........................................ 9,890,625
80,000 Merrill Lynch & Co., Inc. .......................... 6,395,000
230,000 MGIC Investment Corp. .............................. 11,183,750
200,000 Morgan Stanley, Dean Witter & Co. .................. 20,500,000
200,000 PMI Group, Inc. .................................... 12,562,500
60,000 Providian Financial Corp. .......................... 5,610,000
179,990 Radian Group, Inc. ................................. 8,785,762
------------
170,381,074
------------
Food & Beverage Products - 7.0%
220,000 Bestfoods........................................... 10,890,000
800,000 Coca Cola Co. ...................................... 50,000,000
125,000 Fortune Brands, Inc. ............................... 5,171,875
100,000 *Kroger Co. ........................................ 2,793,750
300,000 Nabisco Group Holding Corp. ........................ 5,868,750
750,000 Philip Morris Companies, Inc. ...................... 30,140,625
70,000 Ralston Purina Co. ................................. 2,130,625
235,000 *Safeway, Inc. ..................................... 11,632,500
435,000 Sara Lee Corp. ..................................... 9,869,063
200,000 *United States Foodservice.......................... 8,525,000
------------
137,022,188
------------
Healthcare Products &
Services - 13.9%
450,000 Abbott Laboratories................................. 20,475,000
250,000 *Amgen, Inc. ....................................... 15,218,750
260,000 *Boston Scientific Corp. ........................... 11,423,750
600,000 Bristol-Myers Squibb Co. ........................... 42,262,500
270,000 *Covance, Inc. ..................................... 6,463,125
100,000 *Guidant Corp. ..................................... 5,143,750
305,000 *Health Management Associates, Inc. Cl. A .......... 3,431,250
200,000 *HEALTHSOUTH Corp. ................................. 2,987,500
200,000 Johnson & Johnson................................... 19,600,000
205,000 *Lincare Holdings, Inc. ............................ 5,125,000
125,000 Medtronic, Inc. .................................... 9,734,375
300,000 Merck & Co., Inc. .................................. 22,200,000
250,000 Mylan Laboratories, Inc. ........................... 6,625,000
175,000 Pfizer, Inc. ....................................... 19,206,250
215,000 *Quintiles Transnational Corp. ..................... 9,030,000
400,000 Schering-Plough Corp. .............................. 21,200,000
70,000 SmithKline Beecham Plc, ADR......................... 4,624,375
475,000 *Tenet Healthcare Corp. ............................ 8,817,187
200,000 Teva Pharmaceutical Industries Ltd., ADR............ 9,800,000
375,000 Warner-Lambert Co. ................................. 26,015,625
------------
269,383,437
------------
Industrial Specialty Products
& Services - 0.3%
200,000 Trinity Industries, Inc. ........................... 6,700,000
------------
</TABLE>

See Combined Notes to Financial Statements.

51
<PAGE>

EVERGREEN
Select Core Equity Fund

Schedule of Investments(continued)
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Information Services & Technology - 18.6%
350,000 *Adaptec, Inc. ..................................... $ 12,359,375
140,000 *Altera Corp. ...................................... 5,153,750
200,000 *Applied Materials, Inc. ........................... 14,775,000
675,000 Compaq Computer Corp. .............................. 15,989,062
300,000 Computer Associates
International, Inc. ............................... 16,500,000
230,000 *Compuware Corp. ................................... 7,316,875
150,000 *Comverse Technology, Inc. ......................... 11,325,000
380,000 *Dell Computer Corp. ............................... 14,060,000
190,000 *EMC Corp. ......................................... 10,450,000
720,000 Intel Corp. ........................................ 42,840,000
560,000 International Business Machines Corp. .............. 72,380,000
1,100,000 *Microsoft Corp. ................................... 99,206,250
200,000 *Network Associates, Inc. .......................... 2,937,500
525,000 *Oracle Systems Corp. .............................. 19,490,625
500,000 *Quantum Corp. ..................................... 12,062,500
100,000 *Synopsys, Inc. .................................... 5,518,750
------------
362,364,687
------------
Metal Products & Services - 0.4%
130,000 Alcoa, Inc. ........................................ 8,043,750
------------
Oil/Energy - 5.0%
65,000 Elf Aquitaine, ADR.................................. 4,781,563
110,000 Enron Corp. ........................................ 8,992,500
330,000 Exxon Corp. ........................................ 25,451,250
450,000 MCN Energy Group, Inc. ............................. 9,337,500
130,000 Mobil Corp. ........................................ 12,870,000
725,000 *Newpark Resources, Inc. ........................... 6,434,375
185,000 Texaco, Inc. ....................................... 11,562,500
365,000 Tosco Corp. ........................................ 9,467,187
390,000 Ultramar Diamond Shamrock Corp. .................... 8,506,875
------------
97,403,750
------------
Oil Field Services - 0.8%
160,000 Diamond Offshore Drilling, Inc. .................... 4,540,000
160,000 Schlumberger Ltd. .................................. 10,190,000
------------
14,730,000
------------
Paper & Packaging - 1.7%
200,000 Bowater, Inc. ...................................... 9,450,000
260,000 Kimberly-Clark Corp. ............................... 14,820,000
150,000 *Sealed Air Corp. .................................. 9,731,250
------------
34,001,250
------------
Printing, Publishing,
Broadcasting &
Entertainment - 0.6%
165,000 Time Warner, Inc. .................................. 12,127,500
------------
Real Estate - 0.8%
350,000 FelCor Lodging Trust, Inc. REIT..................... 7,262,500
340,000 Simon Property Group Inc. REIT...................... 8,627,500
------------
15,890,000
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Retailing & Wholesale - 7.2%
150,000 *Best Buy Co., Inc. ............................. $ 10,125,000
250,000 Dayton Hudson Corp. ............................. 16,250,000
370,000 Family Dollar Stores, Inc. ...................... 8,880,000
235,000 *Federated Department Stores, Inc. .............. 12,440,312
440,000 Home Depot, Inc. ................................ 28,352,500
200,000 Lowe's Companies, Inc. .......................... 11,337,500
500,000 *Reebok International Ltd........................ 9,312,500
140,000 Sears, Roebuck & Co. ............................ 6,238,750
385,000 *Toys R Us, Inc. ................................ 7,964,688
600,000 Wal-Mart Stores, Inc. ........................... 28,950,000
--------------
139,851,250
--------------
Telecommunication Services
& Equipment - 0.6%
187,500 Centurytel, Inc. ................................ 7,453,125
40,000 Nokia Corp., ADR................................. 3,662,500
--------------
11,115,625
--------------
Textile & Apparel - 0.1%
138,200 *Fruit Of The Loom Ltd. Cl. A.................... 1,347,450
--------------
Transportation - 0.9%
300,000 Burlington Northern Santa Fe Corp. .............. 9,300,000
140,000 Kansas City Southern Industries, Inc. ........... 8,933,750
--------------
18,233,750
--------------
Utilities - Electric - 1.5%
300,000 Cinergy Corp. ................................... 9,600,000
200,000 CMS Energy Corp. ................................ 8,375,000
40,000 FPL Group, Inc. ................................. 2,185,000
200,000 GPU, Inc. ....................................... 8,437,500
--------------
28,597,500
--------------
Utilities - Telephone - 3.8%
190,000 Ameritech Corp. ................................. 13,965,000
360,000 AT&T Corp. ...................................... 20,092,500
390,000 GTE Corp. ....................................... 29,542,500
200,000 Sprint Corp. .................................... 10,562,500
--------------
74,162,500
--------------
Total Common Stocks
(cost $1,308,724,910)........................... $1,888,136,337
--------------
<CAPTION>
Principal
Amounrt
<C> <S> <C>

SHORT-TERM INVESTMENTS - 2.7%
Repurchase Agreement - 1.8%
$34,586,097 Dresdner Bank AG 4.75%, purchased 6/30/1999,
maturing 7/1/1999, maturity value $34,590,660
(cost $34,586,097) (a).......................... $ 34,586,097
--------------
</TABLE>

See Combined Notes to Financial Statements.

52
<PAGE>

EVERGREEN
Select Core Equity Fund

Schedule of Investments(continued)
June 30, 1999

Shares Value

SHORT-TERM INVESTMENTS - continued
Money Market Shares - 0.9%
18,292,686 Valiant General Fund................................ $ 18,292,686
------------
Total Short-Term Investments
(cost $52,878,783)................................. 52,878,783
------------
Total Investments -
(cost $1,361,603,693)..................... 99.9% 1,941,015,120
Other Assets and
Liabilities - net......................... 0.1 2,707,792
----- --------------
Net Assets................................. 100.0% $1,943,722,912
===== ==============

(a) The repurchase agreement is fully collateralized by U.S. government
and/or agency obligations based on market prices plus accrued interest at
June 30, 1999.
* Non-income producing security

Summary of Abbreviations:
ADR American Depository Receipts
REIT Real Estate Investment Trust

See Combined Notes to Financial Statements.

53
<PAGE>

EVERGREEN
Select Diversified Value Fund

Schedule of Investments
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - 99.4%
Aerospace & Defense - 1.1%
100,000 Raytheon Co. Cl. A.................................. $ 6,887,500
------------
Automotive Equipment & Manufacturing - 2.3%
185,000 Ford Motor Co....................................... 10,440,938
65,000 * Lear Corp. ....................................... 3,233,750
------------
13,674,688
------------
Banks - 6.8%
185,000 Bank One Corp. ..................................... 11,019,062
90,000 BankAmerica Corp. .................................. 6,598,125
35,000 Chase Manhattan Corp. .............................. 3,031,875
250,000 PNC Bank Corp....................................... 14,406,250
160,000 SouthTrust Corp. ................................... 6,140,000
------------
41,195,312
------------
Building, Construction & Furnishings - 0.8%
170,000 Masco Corp.......................................... 4,908,750
------------
Business Equipment &
Services - 0.3%
160,000 * Office Max, Inc................................... 1,920,000
------------
Capital Goods - 0.3%
50,000 Deere & Co. ........................................ 1,981,250
------------
Chemical & Agricultural
Products - 1.9%
100,000 * Cytec Industries, Inc............................. 3,187,500
30,000 Hercules, Inc. ..................................... 1,179,375
200,000 IMC Global, Inc..................................... 3,525,000
75,000 Praxair, Inc. ...................................... 3,670,313
------------
11,562,188
------------
Communication Systems &
Services - 4.5%
90,000 * Cisco Systems, Inc................................ 5,788,125
148,000 Lucent Technologies, Inc............................ 9,980,750
75,000 * MCI WorldCom, Inc................................. 6,454,687
80,000 * Tellabs, Inc...................................... 5,405,000
------------
27,628,562
------------
Consumer Products &
Services - 3.2%
100,000 Gillette Co. ....................................... 4,100,000
70,000 Procter & Gamble Co................................. 6,247,500
31,666 * R.J. Reynolds Tobacco Holdings, Inc. ............. 997,479
110,000 Whirlpool Corp. .................................... 8,140,000
------------
19,484,979
------------
Diversified Companies - 4.1%
25,000 Textron, Inc. ...................................... 2,057,812
240,000 Tyco International Ltd. ............................ 22,740,000
------------
24,797,812
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Electrical Equipment &
Services - 5.4%
120,000 General Electric Co. ............................... $13,560,000
200,000 Motorola, Inc....................................... 18,950,000
------------
32,510,000
------------
Finance & Insurance - 11.8%
145,000 Allstate Corp....................................... 5,201,875
55,000 American Express Co. ............................... 7,156,875
96,600 American International
Group, Inc......................................... 11,308,237
150,000 Citigroup, Inc...................................... 7,125,000
125,000 Conseco, Inc........................................ 3,804,688
70,000 Federal National Mortgage Assoc. ................... 4,786,250
90,000 Lehman Brothers Holdings, Inc. ..................... 5,602,500
90,000 Merrill Lynch & Co., Inc. .......................... 7,194,375
65,000 MGIC Investment Corp. .............................. 3,160,625
100,000 Morgan Stanley, Dean Witter & Co. .................. 10,250,000
80,000 Nationwide Financial Services, Inc.
Cl. A.............................................. 3,620,000
70,000 Price (T.) Rowe & Associates, Inc. ................. 2,686,250
------------
71,896,675
------------
Food & Beverage Products - 5.1%
130,000 Bestfoods........................................... 6,435,000
60,000 Coca Cola Co. ...................................... 3,750,000
190,000 Fortune Brands, Inc................................. 7,861,250
95,000 Nabisco Group Holding Corp.......................... 1,858,437
200,000 Philip Morris Companies, Inc........................ 8,037,500
57,000 * Tricon Global Restaurants, Inc. .................. 3,085,125
------------
31,027,312
------------
Healthcare Products &
Services - 9.3%
100,000 * Amgen, Inc. ...................................... 6,087,500
144,000 * Boston Scientific Corp. .......................... 6,327,000
85,000 Bristol-Myers Squibb Co............................. 5,987,187
150,000 * Health Management Associates, Inc. Cl. A ......... 1,687,500
30,000 Johnson & Johnson................................... 2,940,000
170,000 * Lincare Holdings, Inc............................. 4,250,000
80,000 Pfizer, Inc......................................... 8,780,000
150,000 Pharmacia & Upjohn, Inc. ........................... 8,521,875
65,000 SmithKline Beecham Plc, ADR......................... 4,294,063
100,000 Teva Pharmaceutical Industries
Ltd., ADR.......................................... 4,900,000
100,000 Varian Med Systems, Inc............................. 2,525,000
------------
56,300,125
------------
Information Services & Technology - 11.0%
113,000 * Adaptec, Inc. .................................... 3,990,312
30,000 * America Online, Inc............................... 3,315,000
100,000 * Apple Computer.................................... 4,631,250
85,000 * Applied Materials, Inc. .......................... 6,279,375
85,000 Compaq Computer Corp. .............................. 2,013,438
60,000 * Comverse Technology, Inc. ........................ 4,530,000
70,000 * EMC Corp. ........................................ 3,850,000
80,000 Intel Corp. ........................................ 4,760,000
</TABLE>

See Combined Notes to Financial Statements.

54
<PAGE>

EVERGREEN
Select Diversified Value Fund

Schedule of Investments(continued)
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Information Services & Technology - continued
70,000 International Business Machines Corp............... $ 9,047,500
220,000 * Microsoft Corp................................... 19,841,250
178,000 * Quantum Corp..................................... 4,294,250
------------
66,552,375
------------
Metal Products & Services - 1.8%
81,910 Alcoa, Inc. ....................................... 5,068,181
225,000 USX United States Steel Group...................... 6,075,000
------------
11,143,181
------------
Natural Gas - 0.9%
160,000 El Paso Energy Corp................................ 5,630,000
------------
Oil / Energy - 6.9%
60,000 Anadarko Petroleum Corp............................ 2,208,750
90,000 Apache Corp. ...................................... 3,510,000
60,000 Atlantic Richfield Co.............................. 5,013,750
100,000 Elf Aquitaine, ADR................................. 7,356,250
100,000 Mobil Corp......................................... 9,900,000
513,000 Reliant Energy, Inc. .............................. 14,171,625
------------
42,160,375
------------
Oil Field Services - 1.0%
71,500 Diamond Offshore Drilling, Inc..................... 2,028,813
135,000 Tidewater, Inc. ................................... 4,117,500
------------
6,146,313
------------
Paper & Packaging - 1.7%
150,000 Bowater, Inc. ..................................... 7,087,500
55,000 Kimberly-Clark Corp. .............................. 3,135,000
------------
10,222,500
------------
Printing, Publishing, Broadcasting &
Entertainment - 3.2%
85,000 Omnicom Group, Inc................................. 6,800,000
175,000 Time Warner, Inc. ................................. 12,862,500
------------
19,662,500
------------
Real Estate - 0.6%
150,000 Simon Property Group Inc. REIT..................... 3,806,250
------------
Retailing & Wholesale - 6.8%
100,000 * Abercrombie & Fitch Co. ......................... 4,800,000
80,000 Circuit City Stores, Inc........................... 7,440,000
69,000 Dayton Hudson Corp. ............................... 4,485,000
150,000 Lowe's Companies, Inc.............................. 8,503,125
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Retailing & Wholesale - continued
45,000 Sears, Roebuck & Co................................. $ 2,005,313
115,000 * Toys R Us, Inc.................................... 2,379,062
242,000 Wal-Mart Stores, Inc. .............................. 11,676,500
------------
41,289,000
------------
Telecommunication Services & Equipment - 3.2%
120,000 Centurytel, Inc..................................... 4,770,000
160,000 Nokia Corp., ADR.................................... 14,650,000
------------
19,420,000
------------
Textile & Apparel - 0.3%
45,000 V. F. Corp.......................................... 1,923,750
------------
Transportation - 1.3%
125,000 * Continental Airlines, Inc......................... 4,703,125
50,000 Delta Air Lines, Inc................................ 2,881,250
------------
7,584,375
------------
Utilities - Telephone - 3.8%
100,000 Ameritech Corp...................................... 7,350,000
145,000 AT&T Corp........................................... 8,092,813
100,000 GTE Corp. .......................................... 7,575,000
------------
23,017,813
------------
Total Common Stocks
(cost $517,317,544)................................ 604,333,585
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
<C> <S> <C>

SHORT-TERM INVESTMENTS - 1.6%
Repurchase Agreement - 1.5%
9,001,068 Dresdner Bank AG 4.75%, purchased 6/30/1999,
maturing 7/1/1999, maturity value $9,002,256 (cost
$9,001,068) (a)................................... 9,001,068
------------
U.S. Government Agency Obligations - 0.1%
United States Treasury Bills
85,000 4.23%, 7/22/1999 (b)............................... 84,790
466,000 4.485%, 8/19/1999 (b).............................. 463,156
------------
547,946
------------
Total Short-Term Investments
(cost $9,549,014)................................. 9,549,014
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $526,866,558)................................ 101.0% 613,882,599
Other Assets and Liabilities - net.................. (1.0) (6,143,816)
----- ------------
Net Assets.......................................... 100.0% $607,738,783
----- ------------
</TABLE>

(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at June 30,
1999.
(b) At June 30, 1999, all or a portion of the principal amount of this security
was pledged to cover initial margin requirements for open future contracts.
* Non-income producing security

Summary of Abbreviations:
ADR American Depository Receipts
REIT Real Estate Investment Trust

Futures Contracts - Long Positions

<TABLE>
<CAPTION>
Number of Initial Contract Value at Unrealized
Expiration Contracts Amount June 30, 1999 Gain
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
September 1999 25 S&P 500 Index $8,249,862 $8,635,625 $385,763
</TABLE>

See Combined Notes to Financial Statements.

55
<PAGE>

EVERGREEN
Select Large Cap Blend Fund

Schedule of Investments
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - 99.8%
Automotive Equipment & Manufacturing - 2.5%
94,000 Ford Motor Co....................................... $ 5,305,125
94,000 Goodyear Tire & Rubber Co........................... 5,528,375
------------
10,833,500
------------
Banks - 8.3%
163,000 Bank One Corp....................................... 9,708,687
164,000 BankAmerica Corp.................................... 12,023,250
97,000 BankBoston Corp..................................... 4,959,125
125,000 Fleet Financial Group, Inc.......................... 5,546,875
117,300 Mellon Bank Corp.................................... 4,266,788
------------
36,504,725
------------
Chemical & Agricultural
Products - 1.1%
127,000 Monsanto Co......................................... 5,008,563
------------
Communication Systems & Services - 10.0%
284,000 *Cisco Systems, Inc................................. 18,264,750
110,000 Lucent Technologies, Inc............................ 7,418,125
209,000 *MCI WorldCom, Inc.................................. 17,987,062
------------
43,669,937
------------
Consumer Products &
Services - 2.9%
38,000 Gillette Co......................................... 1,558,000
126,000 Procter & Gamble Co................................. 11,245,500
------------
12,803,500
------------
Diversified Companies - 4.4%
49,000 Textron, Inc........................................ 4,033,313
161,000 Tyco International Ltd.............................. 15,254,750
------------
19,288,063
------------
Electrical Equipment &
Services - 3.8%
149,000 General Electric Co................................. 16,837,000
------------
Environmental Services - 2.8%
226,000 Waste Management, Inc............................... 12,147,500
------------
Finance & Insurance - 9.5%
241,000 Allstate Corp....................................... 8,645,875
39,000 American International Group, Inc................... 4,565,437
290,000 Citigroup, Inc...................................... 13,775,000
156,000 Federal National Mortgage Assoc..................... 10,666,500
47,800 Merrill Lynch & Co., Inc............................ 3,821,013
------------
41,473,825
------------
Food & Beverage Products - 6.7%
81,000 Anheuser Busch Companies, Inc....................... 5,745,937
100,200 Coca Cola Co........................................ 6,262,500
82,200 *Kroger Co.......................................... 2,296,463
108,900 Nabisco Holdings Corp. Cl. A........................ 4,709,925
109,000 Philip Morris Companies, Inc........................ 4,380,437
120,000 *Safeway, Inc....................................... 5,940,000
------------
29,335,262
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Healthcare Products &
Services - 10.0%
129,400 Bristol-Myers Squibb Co............................. $ 9,114,612
58,055 Johnson & Johnson................................... 5,689,390
30,500 McKesson HBOC, Inc.................................. $979,813
41,800 Merck & Co., Inc.................................... 3,093,200
96,000 Pfizer, Inc......................................... 10,536,000
53,500 Pharmacia & Upjohn, Inc............................. 3,039,469
162,000 Warner-Lambert Co................................... 11,238,750
------------
43,691,234
------------
Information Services &
Technology - 14.8%
70,000 * America Online, Inc............................... 7,735,000
379,000 Compaq Computer Corp................................ 8,977,562
195,000 * Compuware Corp.................................... 6,203,438
128,000 *EMC Corp........................................... 7,040,000
111,000 Intel Corp.......................................... 6,604,500
78,500 International Business Machines Corp................ 10,146,125
203,000 *Microsoft Corp..................................... 18,308,062
------------
65,014,687
------------
Metal Products & Services - 1.4%
103,000 Alcoa, Inc.......................................... 6,373,125
------------
Oil/Energy - 4.9%
110,022 Mobil Corp.......................................... 10,892,178
170,000 Texaco, Inc......................................... 10,625,000
------------
21,517,178
------------
Paper & Packaging - 0.3%
28,300 International Paper Co.............................. 1,429,150
------------
Printing, Publishing, Broadcasting &
Entertainment - 4.6%
172,000 News Corp Ltd....................................... 6,073,750
47,800 Omnicom Group, Inc.................................. 3,824,000
137,800 Time Warner, Inc.................................... 10,128,300
------------
20,026,050
------------
Retailing & Wholesale - 4.8%
308,000 Dayton Hudson Corp.................................. 20,020,000
22,300 Lowe's Companies, Inc............................... 1,264,131
------------
21,284,131
------------
Telecommunication Services
& Equipment - 0.3%
34,400 Centurytel, Inc..................................... 1,367,400
------------
Transportation - 1.1%
163,000 Burlington Northern Santa Fe Corp................... 5,053,000
------------
Utilities - Electric - 2.5%
212,941 Cinergy Corp........................................ 6,814,112
73,413 Duke Power Co....................................... 3,991,832
------------
10,805,944
------------
Utilities - Telephone - 3.1%
179,000 GTE Corp............................................ 13,559,250
------------
Total Common Stocks
(cost $324,538,256)................................ 438,023,024
------------
</TABLE>

See Combined Notes to Financial Statements.

56
<PAGE>

EVERGREEN
Select Large Cap Blend Fund

Schedule of Investments(continued)
June 30, 1999

<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>

SHORT-TERM INVESTMENTS - 2.3%
Repurchase Agreement - 2.3%
$10,138,645 Dresdner Bank AG 4.75%, purchased 6/30/1999,
maturing 7/1/1999, maturity value $10,139,983
(cost $10,138,645)(a)............................ $ 10,138,645
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $334,676,901)........................ 102.1% 448,161,669
Other Assets and
Liabilities - net.......................... (2.1) (9,404,705)
----- ------------
Net Assets.................................. 100.0% $438,756,964
===== ============
</TABLE>

(a) The repurchase agreement is fully collateralized by U.S. government
and/or agency obligations based on market prices plus accrued inter-
est at June 30, 1999.
* Non-income producing security

See Combined Notes to Financial Statements.

57
<PAGE>

EVERGREEN
Select Small Cap Growth Fund

Schedule of Investments
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - 99.1%
Banks - 2.3%
40,200 Investors Financial Services Corp. (b).............. $ 1,608,000
------------
Building, Construction & Furnishings - 4.3%
90,800 Dal Tile International Inc. ........................ 1,032,850
25,000 Elcor Chemical Corp. ............................... 1,092,187
46,400 *Wackenhut Corrections Corp......................... 919,300
------------
3,044,337
------------
Business Equipment &
Services - 2.1%
7,900 *Abacus Direct Corp. (b)............................ 722,850
28,000 *Metzler Group, Inc. (b)............................ 773,500
------------
1,496,350
------------
Capital Goods - 1.5%
25,500 Manitowoc Co., Inc.................................. 1,061,438
------------
Chemical & Agricultural
Products - 1.5%
42,600 Arch Chemicals, Inc................................. 1,035,713
------------
Communication Systems & Services - 1.3%
38,500 Kemet Corp. ........................................ 883,094
------------
Consumer Products & Services - 6.8%
39,600 *Action Performance Companies, Inc. (b)............. 1,306,800
46,100 *Chattem, Inc....................................... 1,466,556
42,500 *Scotts Co. Cl. A................................... 2,024,063
------------
4,797,419
------------
Education - 8.2%
56,246 *Bright Horizons Family Solutions, Inc.............. 1,061,643
66,400 *CBT Group Public Ltd. (b).......................... 1,095,600
57,600 *ITT Educational Services, Inc...................... 1,501,200
67,100 Strayer Education, Inc. (b)......................... 2,059,131
------------
5,717,574
------------
Electrical Equipment &
Services - 9.8%
40,700 Cmp Group, Inc...................................... 1,065,831
37,400 *Cognex Corp........................................ 1,180,438
16,000 *Lattice Semiconductor Corp. (b).................... 996,000
40,700 Littelfuse, Inc. (b)................................ 783,475
40,200 *Pri Automation, Inc. (b)........................... 1,457,250
10,400 *QLogic Corp........................................ 1,372,800
------------
6,855,794
------------
Healthcare Products &
Services - 1.8%
15,300 *Pediatrix Medical Group, Inc. (b).................. 325,125
36,250 *Renal Care Group, Inc.............................. 937,969
------------
1,263,094
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Industrial Specialty Products & Services - 1.6%
35,800 Roper Industries, Inc.............................. $ 1,145,600
------------
Information Services & Technology - 27.1%
23,100 *Applied Micro Circuits Corp....................... 1,899,975
60,700 Computer Network Technology (b).................... 1,312,637
82,700 Deltek Systems, Inc. .............................. 816,663
30,200 *Electronics for Imaging, Inc...................... 1,551,525
14,000 *Forrester Research, Inc. (b)...................... 350,000
38,500 *Galileo Technology Ltd. .......................... 1,744,531
38,100 Genesis Microchip, Inc. (b) ....................... 900,112
28,600 Henry Jack & Associates, Inc. ..................... 1,122,550
27,400 *IDX Systems Corp. (b)............................. 618,213
45,000 *Kronos, Inc. ..................................... 2,047,500
54,300 *Maximus, Inc...................................... 1,561,125
22,000 *Progress Software Corp. .......................... 621,500
17,100 *Qrs Corp. ........................................ 1,333,800
33,300 *Sandisk Corp. (b)................................. 1,498,500
9,400 *Verio, Inc. (b)................................... 653,300
60,850 *Wind River Systems, Inc. (b)...................... 977,403
------------
19,009,334
------------
Leisure & Tourism - 1.8%
41,600 *Steiner Leisure Ltd............................... 1,261,000
------------
Machinery - Diversified - 3.8%
31,400 *Astec Industries, Inc............................. 1,279,550
55,400 Cmi Corp. ......................................... 505,525
29,700 *Terex Corp........................................ 903,994
------------
2,689,069
------------
Manufacturing - Distributing - 1.7%
50,000 *National RV Holdings, Inc. (b).................... 1,212,500
------------
Oil Field Services - 3.0%
66,300 *Core Laboratories NV (b).......................... 924,056
89,100 *Global Industries Ltd............................. 1,141,594
------------
2,065,650
------------
Printing, Publishing, Broadcasting &
Entertainment - 5.2%
41,200 *Big Flower Holdings, Inc. (b)..................... 1,313,250
45,400 Citadel Communications Corp........................ 1,642,912
16,700 *Entercom Communications Corp...................... 713,925
------------
3,670,087
------------
Retailing & Wholesale - 2.3%
22,200 *Ann Taylor Stores Corp. (b)....................... 999,000
33,000 Regis Corporation.................................. 633,187
------------
1,632,187
------------
Telecommunication Services & Equipment - 9.7%
4,900 Copper Mountain Networks, Inc...................... 378,525
40,200 E.Spire Communications, Inc. (b)................... 424,612
38,500 *Intermedia Communications, Inc. (b)............... 1,155,000
</TABLE>
See Combined Notes to Financial Statements.

58
<PAGE>

EVERGREEN
Select Small Cap Growth Fund

Schedule of Investments(continued)
June 30, 1999

<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Telecommunication Services & Equipment - continued
42,900 *ITC DeltaCom, Inc. (b)............................. $ 1,201,200
32,000 Pacific Gateway Exchange, Inc. (b).................. 932,000
56,700 *Transaction Network Services, Inc.................. 1,658,475
18,200 *Viatel, Inc........................................ 1,021,475
------------
6,771,287
------------
Textile & Apparel - 1.6%
48,400 *Tarrant Apparel Group (b).......................... 1,101,100
------------
Transportation - 1.7%
27,300 *Eagle USA Airfreight, Inc.......................... 1,158,544
------------
Total Common Stocks
(cost $59,694,557)................................. 69,479,171
------------
</TABLE>

<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>

SHORT-TERM INVESTMENTS - 26.7%
Repurchase Agreement - 0.9%
$607,000 Evergreen Joint Repurchase Agreement 5.00%,
purchased 6/30/1999, maturing 7/1/1999, maturity
value $607,084
(cost $607,000) (a).............................. $ 607,000
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
<C> <S> <C>

Mutual Fund Shares - 25.8%
18,071,447 Navigator Prime Portfolio (c)....................... $ 18,071,447
------------
Total Short-Term Investments
(cost $18,678,447)................................. 18,678,447
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $78,373,004) ........................ 100.0% 88,157,618
Other Assets and
Liabilities - net ......................... 0.0 (18,044,081)
----- ------------
Net Assets ................................. 100.0% $ 70,113,537
===== ============
</TABLE>

(a) The repurchase agreements are fully collateralized by the U.S. government
and/or agency obligations based on market prices plus accrued interest at
June 30, 1999.
(b) All or a portion of this security is on loan.
(c) Represents investment of cash collateral received for securities on loan.
* Non-income producing security

Summary of Abbreviations:
NV Naamloze (Dutch for "corporation")

See Combined Notes to Financial Statements.

59
<PAGE>

EVERGREEN
Select Small Company Value Fund

Schedule of Investments
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - 98.3%
Automotive Equipment & Manufacturing - 2.5%
40,000 Arvin Industries, Inc. ............................. $ 1,515,000
60,000 Wabash National Corp. .............................. 1,162,500
------------
2,677,500
------------
Banks - 12.8%
10,000 ABC Bancorp......................................... 132,500
9,500 Bank of Commerce.................................... 193,563
25,000 Britton & Koontz Capital Corp. ..................... 523,437
27,500 BSB Bancorp, Inc. .................................. 742,500
105,000 * Civic Bancorp..................................... 1,483,125
56,910 Commercial Bankshares, Inc. ........................ 1,230,679
75,000 Cowlitz Bancorp..................................... 496,875
20,000 First State Bancorp................................. 387,500
38,500 Grand Premier Financial, Inc. ...................... 476,438
30,000 Granite State Bankshares, Inc. ..................... 693,750
14,000 Hancock Holding Co. ................................ 628,250
50,000 Independent Bankshares, Inc. ....................... 550,000
50,000 Mid-State Bancshares................................ 1,687,500
10,000 Pacific Century Financial Corp. .................... 215,625
75,000 Pointe Financial Corp. ............................. 801,562
92,500 * Republic Bancshares, Inc. ........................ 1,896,250
30,100 Seacoast Banking Corp. of Florida
Cl. A.............................................. 918,050
35,365 * United Security Bancorp........................... 459,745
7,000 Western Bancorp..................................... 304,500
------------
13,821,849
------------
Building, Construction & Furnishings - 9.3%
6,700 * Beazer Homes USA, Inc. ........................... 155,356
47,000 * CompX International, Inc. Cl. A................... 840,125
20,000 Crossmann Communities, Inc. ........................ 581,250
20,000 D.R. Horton, Inc. .................................. 332,500
60,000 * Gehl Co. ......................................... 1,215,000
75,000 * Genlyte Group, Inc. .............................. 1,682,813
17,000 * Knoll, Inc. ...................................... 452,625
25,000 * Koala Corp. ...................................... 668,750
40,000 La-Z-Boy Chair Co. ................................. 920,000
22,500 * Monaco Coach Corp. ............................... 952,031
27,800 * SLI, Inc. ........................................ 750,600
40,100 * Stanley Furniture Co., Inc. ...................... 902,250
30,000 * Toll Brothers, Inc................................ 643,125
------------
10,096,425
------------
Business Equipment & Services - 2.6%
25,000 * Consolidated Graphics, Inc........................ 1,250,000
35,000 International Telecomm Systems, Inc. ............... 560,000
50,000 * RCM Technologies, Inc............................. 662,500
9,000 * Zebra Technologies Corp. Cl. A.................... 345,937
------------
2,818,437
------------
Communication Systems & Services - 0.9%
40,000 * Orbital Sciences Corp. ........................... 945,000
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Consumer Products & Services - 8.4%
40,000 CPI Corp. ........................................ $1,320,000
45,000 Lancaster Colony Corp............................. 1,552,500
35,000 Matthews International Corp. Cl. A................ 1,036,875
55,000 * Maxwell Shoe, Inc. Cl. A........................ 498,438
20,000 Polaris Industries, Inc........................... 870,000
66,000 * Rock Of Ages Corp. Cl. A........................ 676,500
30,000 St. John Knits, Inc............................... 877,500
116,900 Stewart Enterprises, Inc. Cl. A................... 1,702,356
70,000 York Group, Inc. ................................. 525,000
------------
9,059,169
------------
Electrical Equipment & Services - 1.9%
30,000 * Benchmark Electronics, Inc. .................... 1,078,125
50,000 * Kent Electronics Corp. ......................... 990,625
------------
2,068,750
------------
Electronic Equipment & Services -2.1%
22,000 Boston Acoustics, Inc. ........................... 393,250
5,000 * Electro Scientific Industries, Inc. ............ 208,906
22,800 * Hadco Corp. .................................... 906,300
85,000 * Vicon Industries, Inc. ......................... 765,000
------------
2,273,456
------------
Finance & Insurance - 8.5%
30,000 American Bankers Insurance Group, Inc. ........... 1,633,125
17,000 * Farm Family Holdings, Inc. ..................... 581,187
32,000 Frontier Insurance Group, Inc. ................... 492,000
10,000 LandAmerica Financial Group, Inc.................. 287,500
29,500 Meadowbrook Insurance Group, Inc. ................ 401,938
85,500 Morgan Keegan, Inc................................ 1,619,156
20,000 Radian Group, Inc................................. 976,250
70,000 Raymond James Financial, Inc...................... 1,675,625
60,000 State Auto Financial Corp. ....................... 810,000
27,700 Waddell & Reed Financial, Inc.
Cl. A............................................ 760,019
------------
9,236,800
------------
Food & Beverage Products - 3.7%
25,000 International Multifoods Corp. ................... 564,062
48,800 Michael Foods, Inc. .............................. 1,146,800
30,000 * Performance Food Group Co. ..................... 815,625
80,000 Smucker (J. M.) Co. .............................. 1,520,000
------------
4,046,487
------------
Healthcare Products & Services - 9.2%
70,000 * Acuson Corp. ................................... 1,203,125
40,000 * ADAC Laboratories............................... 290,000
70,000 Alpharma, Inc. ................................... 2,489,375
25,000 * ArthroCare Corp. ............................... 512,500
121,000 * Carematrix Corp. ............................... 1,504,937
125,000 * Encore Medical Corp. ........................... 367,188
80,000 * Exactech, Inc. ................................. 920,000
30,000 Jones Pharma, Inc. ............................... 1,181,250
63,500 * Maxxim Medical, Inc. ........................... 1,480,344
------------
9,948,719
------------
</TABLE>

See Combined Notes to Financial Statements.

60
<PAGE>

EVERGREEN
Select Small Company Value Fund

Schedule of Investments(continued)
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Industrial Specialty Products & Services - 0.9%
25,000 Graco, Inc. ....................................... $ 734,375
4,500 Hach Co. Cl. A..................................... 79,313
60,000 * Mathsoft, Inc. .................................. 172,500
------------
986,188
------------
Information Services & Technology - 4.4%
70,000 * Axent Technologies, Inc.......................... 778,750
10,000 * Engineering Animation, Inc....................... 211,875
20,000 * Etec Systems, Inc................................ 665,000
55,300 Fair Issac & Co., Inc.............................. 1,938,956
33,200 * Micros Systems, Inc.............................. 1,128,800
------------
4,723,381
------------
Machinery - Diversified - 1.5%
41,250 Hardinge, Inc. .................................... 724,453
30,600 * Terex Corp. ..................................... 931,388
------------
1,655,841
------------
Manufacturing - Distributing - 0.4%
20,000 CLARCOR, Inc. ..................................... 383,750
------------
Oil/Energy - 2.0%
20,000 * Barrett Resources Corp. ......................... 767,500
30,000 Berry Petroleum Co. Cl. A.......................... 418,125
32,000 Cabot Oil & Gas Corp. Cl. A........................ 596,000
10,000 Pennzoil-Quaker State Co. ......................... 150,000
20,000 Southwestern Energy Co. ........................... 211,250
------------
2,142,875
------------
Printing, Publishing, Broadcasting &
Entertainment - 0.8%
43,900 Banta Corp. ....................................... 921,900
------------
Real Estate - 1.8%
15,000 Eastgroup Properties, Inc. REIT.................... 300,938
125,000 Mission West Properties, Inc. REIT................. 1,031,250
50,000 * Prime Hospitality Corp. ......................... 600,000
------------
1,932,188
------------
Retailing & Wholesale - 7.9%
65,000 * Duckwall-ALCO Stores, Inc. ...................... 682,500
34,200 Ethan Allen Interiors, Inc. ....................... 1,291,050
50,000 * Finish Line, Inc. Cl. A.......................... 562,500
17,300 * Footstar, Inc. .................................. 643,344
90,000 Freds, Inc. ....................................... 1,406,250
63,500 * Lithia Motors, Inc. ............................. 1,301,750
30,000 Seaway Food Town, Inc. ............................ 588,750
152,700 * Sonic Automotive, Inc. .......................... 2,099,625
------------
8,575,769
------------
Telecommunication Services & Equipment - 3.5%
30,000 * CapRock Communications Corp. .................... 1,215,000
4,000 Hickory Tech Corp. ................................ 44,500
55,000 * ITC DeltaCom, Inc. .............................. 1,540,000
75,000 * Lightbridge, Inc. ............................... 942,187
------------
3,741,687
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Thrift Institutions - 5.4%
15,000 First Liberty Financial Corp. ..................... $ 470,625
36,000 Highland Bancorp, Inc. ............................ 679,500
75,400 Horizon Financial Corp. ........................... 1,032,038
14,200 Mech Financial, Inc. .............................. 532,500
45,000 MetroWest Bank..................................... 315,000
25,000 Monterey Bay Bancorp, Inc. ........................ 368,750
42,500 Quaker City Bancorp, Inc. ......................... 701,250
48,371 St. Paul Bancorp, Inc. ............................ 1,233,460
29,000 Teche Holding Co. ................................. 496,625
------------
5,829,748
------------
Transportation - 1.9%
25,700 * Heartland Express, Inc........................... 420,837
90,000 * Motivepower Industries, Inc...................... 1,620,000
------------
2,040,837
------------
Utilities - Electric - 2.1%
10,000 Central Hudson Gas & Electric Corp. ............... 420,000
80,000 MDU Resources Group, Inc. ......................... 1,825,000
------------
2,245,000
------------
Utilities - Gas - 3.8%
10,000 Eastern Enterprises................................ 397,500
25,000 Indiana Energy, Inc................................ 532,813
20,000 NUI Corp........................................... 500,000
10,000 Providence Energy Corp. ........................... 266,875
40,000 South Jersey Industries, Inc....................... 1,132,500
65,000 UGI Corp........................................... 1,312,187
------------
4,141,875
------------
Total Common Stocks
(cost $106,312,714)............................... 106,313,631
------------

<CAPTION>
Principal
Amount
<C> <S> <C>

SHORT-TERM INVESTMENTS - 0.7%
Repurchase Agreement - 0.7%
$ 829,000 State Street Bank & Trust Co. 4.80%, purchased
6/30/1999,
maturing 7/1/1999, maturity value $829,111 (cost
$829,000) (a)..................................... 829,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $107,141,714)................................ 99.0% 107,142,631
Other Assets and
Liabilities - net................................... 1.0 1,038,491
----- ------------
Net Assets........................................... 100.0% $108,181,122
===== ============
</TABLE>

(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at June 30,
1999.
* Non-income producing security

Summary of Abbreviations:
REITReal Estate Investment Trust

See Combined Notes to Financial Statements.

61
<PAGE>

EVERGREEN
Select Social Principles Fund

Schedule of Investments
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - 98.0%
Advertising & Related Services - 2.2%
135,500 *Ha Lo Industries, Inc............................ $ 1,338,063
35,400 Young & Rubicam, Inc.............................. 1,608,487
------------
2,946,550
------------
Aerospace & Defense - 1.1%
81,900 *BE Aerospace, Inc................................ 1,530,506
------------
Banks - 4.7%
35,600 BankBoston Corp................................... 1,820,050
37,950 Mellon Bank Corp.................................. 1,380,431
64,600 SouthTrust Corp................................... 2,479,025
15,700 Summit Bancorp.................................... 656,456
------------
6,335,962
------------
Building, Construction & Furnishings - 3.2%
87,150 *NCI Building Systems, Inc........................ 1,862,831
37,300 Southdown, Inc.................................... 2,396,525
------------
4,259,356
------------
Business Equipment & Services - 1.3%
35,600 *Consolidated Graphics, Inc....................... 1,780,000
------------
Communication Systems & Services - 3.7%
39,000 *Metromedia Fiber Network, Inc.................... 1,401,563
19,100 *NorthPoint Communications Group, Inc............. 697,150
42,550 *Tellabs, Inc..................................... 2,874,784
------------
4,973,497
------------
Diversified Companies - 1.0%
34,600 ITT Industries, Inc............................... 1,319,125
------------
Education - 1.1%
57,300 *Apollo Group, Inc................................ 1,522,031
------------
Electronic Equipment & Services - 2.8%
48,900 *Sanmina Corp..................................... 3,710,288
------------
Environmental Services - 2.9%
196,475 *Allied Waste Industries, Inc..................... 3,880,381
------------
Finance & Insurance - 8.8%
34,500 AFLAC, Inc........................................ 1,651,688
45,700 Annuity & Life Re Ltd............................. 1,025,394
100,000 Conseco, Inc...................................... 3,043,750
34,200 Countrywide Credit Industries, Inc................ 1,462,050
71,100 Partnerre Ltd..................................... 2,657,362
46,100 ReliaStar Financial Corp.......................... 2,016,875
------------
11,857,119
------------
Food & Beverage Products - 5.5%
50,700 Dean Foods Co..................................... 2,107,219
48,100 *Keebler Foods Co................................. 1,461,037
27,000 McCormick & Co., Inc.............................. 852,188
25,700 *Tricon Global Restaurants, Inc................... 1,391,013
37,500 *United States Foodservice........................ 1,598,437
------------
7,409,894
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Healthcare Products & Services - 9.0%
86,100 *Elan Corp Plc, ADR................................ $ 2,389,275
231,100 *HEALTHSOUTH Corp.................................. 3,452,056
89,400 Mylan Laboratories, Inc............................ 2,369,100
64,000 *Pediatrix Medical Group, Inc...................... 1,360,000
59,900 *Quintiles Transnational Corp...................... 2,515,800
------------
12,086,231
------------
Industrial Specialty Products & Services - 2.9%
33,720 Magna International, Inc. Cl. A.................... 1,913,610
63,350 Roper Industries, Inc.............................. 2,027,200
------------
3,940,810
------------
Information Services & Technology - 14.1%
99,500 *Adaptec, Inc...................................... 3,513,594
110,250 *Compuware Corp.................................... 3,507,328
56,850 *PMC-Sierra, Inc................................... 3,350,597
29,100 Psinet, Inc........................................ 1,273,125
18,650 *Uniphase Corp..................................... 3,095,900
44,000 *Veritas Software Corp............................. 4,177,250
------------
18,917,794
------------
Manufacturing - Distributing - 1.8%
34,100 *Teradyne, Inc..................................... 2,446,675
------------
Oil/Energy - 4.6%
275,600 *Newpark Resources, Inc............................ 2,445,950
56,900 Sonat, Inc......................................... 1,884,813
84,500 Ultramar Diamond Shamrock Corp..................... 1,843,156
------------
6,173,919
------------
Paper & Packaging - 1.2%
94,150 Rock Tennessee Co. Cl. A........................... 1,571,128
------------
Printing, Publishing, Broadcasting &
Entertainment - 0.9%
14,500 Omnicom Group, Inc................................. 1,160,000
------------
Real Estate - 1.0%
62,300 FelCor Lodging Trust, Inc. REIT.................... 1,292,725
------------
Retailing & Wholesale - 13.1%
117,000 *Abercrombie & Fitch Co............................ 5,616,000
94,700 *Best Buy Co., Inc................................. 6,392,250
124,500 Family Dollar Stores, Inc.......................... 2,988,000
72,000 *Starbucks Corp.................................... 2,704,500
------------
17,700,750
------------
Telecommunication Services & Equipment - 3.6%
33,894 Centurytel, Inc.................................... 1,347,286
106,650 *Qwest Communications International, Inc........... 3,526,116
------------
4,873,402
------------
Transportation - 1.8%
116,000 Comair Holdings, Inc............................... 2,414,250
------------
</TABLE>
See Combined Notes to Financial Statements.

62
<PAGE>

EVERGREEN
Select Social Principles Fund

Schedule of Investments(continued)
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Utilities - Electric - 5.7%
84,550 Cinergy Corp....................................... $ 2,705,600
60,500 Sierra Pacific Resources........................... 2,200,688
113,400 UtiliCorp United, Inc.............................. 2,757,037
------------
7,663,325
------------
Total Common Stocks (cost $100,352,517)............ 131,765,718
------------

<CAPTION>
Principal
Amount
<C> <S> <C>

SHORT-TERM INVESTMENTS - 0.5%
Repurchase Agreement - 0.5%
$ 716,516 Dresdner Bank AG 4.75%, purchased 06/30/1999,
maturing 07/01/1999, maturity value $716,611
(cost $716,516) (a)............................... 716,516
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

SHORT-TERM INVESTMENTS - continued
Money Market Shares - 0.0%
110 Valiant General Fund ............................... $ 110
------------
Total Short-Term Investments
(cost $716,626).................................... 716,626
------------
Total Investments -
(cost $101,069,143)......................... 98.5% 132,482,344
Other Assets and Liabilities - net........... 1.5 2,053,681
----- ------------
Net Assets................................... 100.0% $134,536,025
===== ============
</TABLE>

(a) The repurchase agreement is fully collateralized by U.S. government
and/or agency obligations based on market prices plus accrued interest at
June 30, 1999.
* Non-income producing security

Summary of Abbreviations:
REIT Real Estate Investment Trust
ADR American Depository Receipt

See Combined Notes to Financial Statements.

63
<PAGE>

EVERGREEN
Select Special Equity Fund

Schedule of Investments
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - 95.3%
Advertising & Related
Services - 0.6%
4,800 * Flycast Communications Corp. ..................... $ 91,800
13,700 Young & Rubicam, Inc................................ 622,494
------------
714,294
------------
Building, Construction & Furnishings - 3.8%
50,800 * Comfort Systems USA, Inc. ........................ 914,400
56,100 * Group Maintenance America Corp. .................. 725,794
39,200 * Shaw Group, Inc................................... 622,300
57,200 Standard Pacific Corp............................... 740,025
47,280 * Winsloew Furniture, Inc........................... 1,589,790
------------
4,592,309
------------
Business Equipment &
Services - 1.1%
36,300 * Metamor Worldwide, Inc. .......................... 873,469
52,100 * Vision Twenty One, Inc............................ 433,081
------------
1,306,550
------------
Communication Systems & Services - 3.0%
29,900 * Mac Gray Corp. ................................... 261,625
50,300 * Metromedia Fiber Network, Inc..................... 1,807,656
31,600 * Pinnacle Holdings, Inc. .......................... 774,200
123,000 * VDI Media......................................... 799,500
------------
3,642,981
------------
Consumer Products &
Services - 0.2%
121,500 * Acme United Corp.................................. 258,188
------------
Diversified Companies - 1.4%
23,900 GATX Corp........................................... 909,694
22,300 National Service Industries, Inc.................... 802,800
------------
1,712,494
------------
Electrical Equipment &
Services - 0.6%
72,900 * Magnetek, Inc..................................... 770,006
------------
Electronic Equipment &
Services - 0.2%
32,100 * Vicon Industries, Inc............................. 288,900
------------
Environmental Services - 1.7%
78,600 * Casella Waste Systems, Inc........................ 2,043,600
------------
Finance & Insurance - 4.0%
12,460 * Affiliated Managers Group, Inc.................... 376,136
28,800 Bay View Capital Corp............................... 590,400
149,400 * Delta Financial Corp. ............................ 952,425
41,300 Everest Reinsurance Holdings, Inc. ................. 1,347,412
9,700 * NextCard, Inc..................................... 329,194
89,800 * WFS Financial, Inc................................ 1,245,975
------------
4,841,542
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Food & Beverage Products - 4.4%
111,700 Chiquita Brands International, Inc. ................ $ 1,005,300
26,200 Dean Foods Co....................................... 1,088,938
40,400 Earthgrains Co...................................... 1,042,825
115,300 * Fresh Del Monte Produce........................... 1,628,612
10,400 * Omega Protein Corp. .............................. 54,600
96,200 Scheid Vineyards, Inc. Cl. A........................ 481,000
------------
5,301,275
------------
Healthcare Products &
Services - 9.8%
104,000 * Brookdale Living Communities, Inc................. 1,540,500
52,100 * Cellegy Pharmaceuticals, Inc. .................... 240,963
71,300 * Chirex, Inc....................................... 2,290,512
51,900 * Collagenex Pharmaceuticals, Inc................... 519,000
80,500 * Computer Motion, Inc. ............................ 820,094
65,500 * Dura Pharmaceuticals, Inc......................... 781,906
45,400 * Guilford Pharmaceuticals, Inc..................... 578,850
30,600 * Isis Pharmaceuticals, Inc......................... 311,738
50,400 * MedPartners, Inc.................................. 381,150
117,700 * Pharmaceutical Resources, Inc. ................... 1,022,519
84,100 * Progenics Pharmaceuticals, Inc.................... 1,166,887
52,400 * Roberts Pharmaceutical Corp....................... 1,270,700
58,400 * Scios, Inc........................................ 189,800
90,800 * Titan Pharmaceuticals, Inc........................ 448,325
28,300 * Urologix, Inc..................................... 69,866
44,750 * Valentis, Inc. ................................... 170,609
------------
11,803,419
------------
Industrial Specialty Products & Services - 0.3%
25,398 * Building One Services Corp........................ 352,397
------------
Information Services & Technology - 23.5%
83,700 * Abovenet Communications, Inc...................... 3,379,387
800 * Ask Jeeves, Inc................................... 11,200
33,500 * Beyond Common Corp. .............................. 961,031
107,400 * Ciber, Inc........................................ 2,054,025
52,400 * Concentric Network Corp. ......................... 2,082,900
43,400 * Earthlink Network, Inc. .......................... 2,666,388
36,900 * F5 Networks, Inc.................................. 1,512,900
27,700 * GoTo.com, Inc. ................................... 775,600
39,300 * Juno Online Services, Inc. ....................... 903,900
283,000 * Maxtor Corp....................................... 1,423,844
69,500 * Mecon, Inc........................................ 521,250
94,700 * Mikohn Gaming Corp................................ 349,206
131,000 * MIPS Technologies, Inc............................ 6,279,812
73,300 * nFront, Inc. ..................................... 1,113,244
36,100 * Real Networks, Inc................................ 2,486,388
36,900 * THQ, Inc.......................................... 1,060,875
27,500 * Ticketmaster Online Citysearch.................... 831,875
800 * US SEARCH.com, Inc. .............................. 6,400
------------
28,420,225
------------
Manufacturing - Distributing - 0.8%
21,000 Pentair, Inc........................................ 960,750
------------
</TABLE>

See Combined Notes to Financial Statements.

64
<PAGE>

EVERGREEN
Select Special Equity Fund

Schedule of Investments(continued)
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Metal Products & Services - 1.9%
95,100 Ispat International N V............................ $ 1,052,044
95,400 * Metals USA, Inc. ................................ 1,216,350
------------
2,268,394
------------
Oil / Energy - 2.1%
62,900 * Midamerica Energy Holdings Co. .................. 2,177,912
47,700 * Newpark Resources, Inc. ......................... 423,338
------------
2,601,250
------------
Oil Field Services - 2.2%
10,200 * Callon Petroleum Co. ............................ 105,188
56,000 * Horizon Offshore, Inc. .......................... 434,000
72,800 * IRI International Corp. ......................... 336,700
41,500 * Lone Star Technologies, Inc. .................... 736,625
64,156 * Meridian Resource Corp. ......................... 248,604
21,722 * Nabors Industries, Inc. ......................... 530,831
10,700 Tidewater, Inc. ................................... 326,350
------------
2,718,298
------------
Printing, Publishing, Broadcasting &
Entertainment - 0.8%
80,200 * Big City Radio, Inc. ............................ 290,725
23,000 * SBS Broadcasting SA.............................. 741,750
------------
1,032,475
------------
Real Estate - 2.5%
60,100 * AMB Property Corp. REIT.......................... 1,412,350
29,400 Franchise Finance Corp. America REIT............... 646,800
46,900 Imperial Credit Commercial Mortgage Investment
Corp. REIT........................................ 507,106
35,200 * Prime Hospitality Corp. ......................... 422,400
------------
2,988,656
------------
Retailing & Wholesale - 13.6%
61,400 * Abercrombie & Fitch Co. ......................... 2,947,200
51,900 * Bon Ton Stores, Inc. ............................ 334,106
10,400 * CDnow, Inc. ..................................... 183,300
149,400 * Electronics Boutique Holdings Corp. ............. 2,128,950
37,000 * General Nutrition Companies, Inc. ............... 862,563
204,400 * Pacific Sunwear Of California.................... 4,982,250
67,200 * Paul Harris Stores, Inc. ........................ 457,800
57,700 * Select Comfort Corp. ............................ 515,694
24,600 * Tweeter Home Entertainment Group, Inc. .......... 965,550
88,500 * Williams Sonoma, Inc. ........................... 3,080,906
------------
16,458,319
------------
Telecommunication Services & Equipment - 9.8%
96,200 * Amnex, Inc. ..................................... 4,810
31,400 * AT & T Canada, Inc .............................. 2,011,562
78,400 * Clearnet Communications, Inc. ................... 1,092,700
55,800 * Globalstar LP Ltd. .............................. 1,293,863
44,600 * Hybrid Networks, Inc. ........................... 111,500
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Telecommunication Services & Equipment - continued
56,000 * Hyperion Telecommunications, Inc. Cl. A .......... $ 1,053,500
16,600 * Intermedia Communications, Inc. .................. 498,000
50,400 * MGC Communications, Inc. ......................... 1,310,400
36,400 * NEXTLINK Communications, Inc. Cl. A............... 2,707,250
18,600 * Time Warner Telecom, Inc. ........................ 539,400
56,100 * US LEC Corp. Cl. A................................ 1,262,250
------------
11,885,235
------------
Textile & Apparel - 3.5%
204,300 * Gildan Activewear, Inc. .......................... 3,447,562
41,000 * Novel Denim Holdings Ltd. ........................ 331,844
41,500 * Skechers U.S.A., Inc. ............................ 435,750
------------
4,215,156
------------
Transportation - 2.7%
33,200 * Amtran, Inc....................................... 817,550
118,700 * Arkansas Best Corp. .............................. 1,179,581
57,900 * Genesee & Wyoming, Inc............................ 597,094
60,500 * Midway Airlines Corp.............................. 620,125
------------
3,214,350
------------
Utilities - Telephone - 0.8%
9,900 * McLeod USA, Inc. Cl. A............................ 544,500
57,500 * Star Telecommunications, Inc. .................... 449,219
------------
993,719
------------
Total Common Stocks
(cost $94,918,298)................................. $115,384,782
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>

SHORT-TERM INVESTMENTS - 5.3%
Repurchase Agreement - 5.3%
$6,393,856 Dresdner Bank AG 4.75%, purchased 6/30/1999,
maturing 7/1/1999, maturity value $6,394,700 (cost
$6,393,856) (a)................................... 6,393,856
------------
Total Investments -
(cost $101,312,154)....................... 100.6% 121,778,638
Other Assets and
Liabilities - net......................... (0.6) (769,686)
----- ------------
Net Assets................................. 100.0% $121,008,952
===== ============
</TABLE>

(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at June 30,
1999.
* Non-income producing security

Summary of Abbreviations:
REIT Real Estate Investment Trust
NV Naamloze (Dutch for "corporation")

See Combined Notes to Financial Statements.

65
<PAGE>

EVERGREEN
Select Strategic Growth Fund

Schedule of Investments
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - 95.8%
Aerospace & Defense - 1.0%
72,300 United Technologies Corp............................ $ 5,183,006
------------
Banks - 2.3%
62,375 Chase Manhattan Corp................................ 5,403,234
65,475 U.S. Trust Corp..................................... 6,056,438
------------
11,459,672
------------
Building, Construction &
Furnishings - 0.6%
48,500 Dycom Industries, Inc............................... 2,716,000
------------
Communication Systems &
Services - 9.3%
290,550 *Cisco Systems, Inc................................. 18,685,997
266,500 Lucent Technologies, Inc............................ 17,972,093
107,950 *MCI WorldCom, Inc.................................. 9,290,447
------------
45,948,537
------------
Consumer Products &
Services - 5.6%
91,350 Avon Products, Inc.................................. 5,069,925
51,950 Clorox Co........................................... 5,548,909
18,670 Colgate-Palmolive Co................................ 1,843,663
70,000 Maytag Corp......................................... 4,878,125
114,600 Procter & Gamble Co................................. 10,228,050
------------
27,568,672
------------
Diversified Companies - 1.0%
51,400 Tyco International Ltd.............................. 4,870,150
------------
Electrical Equipment &
Services - 7.9%
252,575 General Electric Co................................. 28,540,975
25,375 *QLogic Corp........................................ 3,349,500
107,950 *Vitesse Semiconductor Corp......................... 7,279,878
------------
39,170,353
------------
Electronic Equipment &
Services - 0.9%
88,475 *SDL, Inc........................................... 4,517,755
------------
Finance & Insurance - 5.5%
45,780 American Express Co................................. 5,957,122
93,850 Federal Home Loan Mortgage
Corp............................................... 5,443,300
54,125 Federal National Mortgage Assoc..................... 3,700,797
78,475 Marsh & McLennan Co., Inc........................... 5,924,863
56,500 Schwab (Charles) & Co., Inc......................... 6,207,937
------------
27,234,019
------------
Food & Beverage Products - 2.4%
80,100 Quaker Oats Co...................................... 5,316,638
130,875 *Safeway, Inc....................................... 6,478,312
------------
11,794,950
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Healthcare Products &
Services - 17.0%
111,710 Abbott Laboratories................................ $ 5,082,805
225,475 Bristol-Myers Squibb Co............................ 15,881,895
89,425 *Guidant Corp...................................... 4,599,798
108,200 Johnson & Johnson.................................. 10,603,600
133,350 *MedQuist, Inc..................................... 5,834,063
121,550 Merck & Co., Inc................................... 8,994,700
128,800 Schering-Plough Corp............................... 6,826,400
59,150 *VISX, Inc......................................... 4,683,941
192,825 Warner-Lambert Co.................................. 13,377,234
94,300 *Wellpoint Health Networks, Inc.
Cl. A............................................. 8,003,713
------------
83,888,149
------------
Information Services
& Technology - 19.9%
85,650 *America Online, Inc............................... 9,464,325
48,800 *Broadvision, Inc.................................. 3,599,000
97,675 CDW Computer Centers, Inc.......................... 4,297,700
75,200 *Citrix Systems, Inc............................... 4,248,800
279,250 *EMC Corp.......................................... 15,358,750
115,400 Intel Corp......................................... 6,866,300
81,650 *Lexmark International Group, Inc.................. 5,394,003
297,970 *Microsoft Corp.................................... 26,873,169
63,325 Siebel Systems, Inc................................ 4,203,197
134,650 *Sun Microsystems, Inc............................. 9,274,019
25,000 *Uniphase Corp..................................... 4,150,000
25,750 *Veritas Software Corp............................. 2,444,640
11,875 Yahoo, Inc......................................... 2,045,469
------------
98,219,372
------------
Oil/Energy - 1.2%
70,500 Enron Corp......................................... 5,763,375
------------
Paper & Packaging - 2.5%
80,175 Avery Dennison Corp................................ 4,840,566
133,485 Kimberly-Clark Corp................................ 7,608,645
------------
12,449,211
------------
Printing, Publishing, Broadcasting
& Entertainment - 1.5%
23,335 Gannett Co., Inc................................... 1,665,536
74,200 Omnicom Group, Inc................................. 5,936,000
------------
7,601,536
------------
Retailing & Wholesale - 13.5%
118,475 *Best Buy Co., Inc................................. 7,997,062
65,800 *Costco Companies, Inc............................. 5,268,113
220,200 Family Dollar Stores, Inc.......................... 5,284,800
135,113 Gap, Inc........................................... 6,806,292
178,025 Home Depot, Inc.................................... 11,471,486
99,800 Lowe's Companies, Inc.............................. 5,657,413
151,700 TJX Co., Inc....................................... 5,053,506
315,450 Wal-Mart Stores, Inc............................... 15,220,462
128,540 Walgreen Co........................................ 3,775,863
------------
66,534,997
------------
</TABLE>
See Combined Notes to Financial Statements.

66
<PAGE>

EVERGREEN
Select Strategic Growth Fund

Schedule of Investments(continued)
June 30, 1999

Shares Value
<C> <S> <C>

COMMON STOCKS - continued
Telecommunication Services & Equipment - 1.6%
53,575 *Qualcomm, Inc...................................... 7,688,013
------------
Utilities - Telephone - 2.1%
95,175 SBC Communications, Inc............................. 5,520,150
93,850 Sprint Corp......................................... 4,956,453
------------
10,476,603
------------
Total Common Stocks
(cost $351,447,363)................................ 473,084,370
------------
</TABLE>
<TABLE>
<CAPTION>
Principle
Amount
<C> <S> <C>

SHORT-TERM INVESTMENTS - 5.7%
Repurchase Agreement - 5.6%
27,671,784 Dresdner Bank AG 4.75%, purchased 6/30/1999,
maturing 7/1/1999, maturity value $27,675,435
(cost $27,671,784)(a)............................ $ 27,671,784
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

<CAPTION>
Money Market Shares - 0.1%
<C> <S> <C>
188,020 Valiant General Fund................................ $ 188,020
------------
Total Short-Term Investments
(cost $27,859,804)................................. 27,859,804
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $379,307,168)........................ 101.5% 500,944,174
Other Assets and Liabilities - net.......... (1.5) (7,174,850)
----- ------------
Net Assets.................................. 100.0% $493,769,324
===== ============
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government
and/or agency obligations based on market prices plus accrued inter-
est at June 30, 1999.
* Non-Income Producing Security.

See Combined Notes to Financial Statements.

67
<PAGE>

EVERGREEN
Select Strategic Value Fund

Schedule of Investments
June 30, 1999

Shares Value

<C> <S> <C>
COMMON STOCKS - 93.6%
Aerospace & Defense - 2.2%
167,700 Raytheon Co. Cl. A................................ $ 11,550,338
------------
Automotive Equipment & Manufacturing - 1.6%
169,000 *Lear Corp........................................ 8,407,750
------------
Banks - 13.5%
228,100 Chase Manhattan Corp. ............................ 19,759,162
200,000 First American Corp............................... 8,312,500
163,600 Fleet Financial Group, Inc. ...................... 7,259,750
475,000 Mellon Bank Corp.................................. 17,278,125
207,000 SouthTrust Corp. ................................. 7,943,625
266,800 Summit Bancorp.................................... 11,155,575
------------
71,708,737
------------
Capital Goods - 1.2%
132,800 Case Corp......................................... 6,391,000
------------
Chemical & Agricultural
Products - 2.1%
280,000 Hercules, Inc. ................................... 11,007,500
------------
Consumer Products &
Services - 3.6%
177,000 Black & Decker Corp. ............................. 11,173,125
113,000 Maytag Corp. ..................................... 7,874,688
------------
19,047,813
------------
Electrical Equipment &
Services - 2.7%
152,000 Motorola, Inc. ................................... 14,402,000
------------
Electronic Equipment &
Services - 2.9%
155,204 Koninklijke (Royal) Philips Electronics NV ADR.... 15,656,204
------------
Finance & Insurance - 11.7%
118,400 Allstate Corp. ................................... 4,247,600
413,000 Citigroup, Inc. .................................. 19,617,500
275,000 Countrywide Credit Industries, Inc. .............. 11,756,250
103,600 Loews Corp........................................ 8,197,350
175,000 Merrill Lynch & Co., Inc.......................... 13,989,062
103,600 Nationwide Financial Services, Inc. Cl. A......... 4,687,900
------------
62,495,662
------------
Food & Beverage Products - 3.0%
83,000 Fortune Brands, Inc. ............................. 3,434,125
315,100 Philip Morris Companies, Inc. .................... 12,663,081
------------
16,097,206
------------
Healthcare Products & Services - 3.8%
165,200 Bristol-Myers Squibb Co. ......................... 11,636,275
459,700 * Tenet Healthcare Corp........................... 8,533,181
------------
20,169,456
------------
Information Services & Technology - 5.2%
163,400 Intel Corp. ...................................... 9,722,300
141,200 International Business Machines Corp. ............ 18,250,100
------------
27,972,400
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value

<C> <S> <C>
COMMON STOCKS - continued
Metal Products & Services - 4.2%
260,000 Alcoa, Inc. ........................................ $ 16,087,500
241,900 USX United States Steel Group....................... 6,531,300
------------
22,618,800
------------
Natural Gas - 0.9%
142,100 El Paso Energy Corp. ............................... 5,000,144
------------
Oil/Energy - 9.3%
100,500 Cabot Corp.......................................... 2,430,844
214,000 Mobil Corp.......................................... 21,186,000
213,600 Texaco, Inc......................................... 13,350,000
315,000 Tosco Corp.......................................... 8,170,312
197,700 Ultramar Diamond Shamrock Corp. .................... 4,312,331
------------
49,449,487
------------
Paper & Packaging - 1.3%
171,314 Mead Corp........................................... 7,152,360
------------
Real Estate - 0.6%
142,100 FelCor Lodging Trust, Inc. REIT..................... 2,948,575
------------
Retailing & Wholesale - 1.3%
154,900 Sears, Roebuck & Co................................. 6,902,731
------------
Telecommunication Services
& Equipment - 4.2%
367,500 Centurytel, Inc..................................... 14,608,125
87,800 Nokia Corp. ADR..................................... 8,039,188
------------
22,647,313
------------
Textile & Apparel - 1.2%
148,000 V. F. Corp.......................................... 6,327,000
------------
Transportation - 0.9%
157,200 Burlington Northern Santa Fe Corp................... 4,873,200
------------
Utilities - Electric - 2.2%
253,400 Scana Corp. ........................................ 5,923,225
231,850 UtiliCorp United, Inc............................... 5,636,853
------------
11,560,078
------------
Utilities - Gas - 5.0%
263,000 NICOR, Inc.......................................... 10,010,438
385,000 Williams Companies, Inc............................. 16,386,562
------------
26,397,000
------------
Utilities - Telephone - 9.0%
170,000 ALLTEL Corp......................................... 12,155,000
300,000 AT&T Corp........................................... 16,743,750
252,000 GTE Corp. .......................................... 19,089,000
------------
47,987,750
------------
Total Common Stocks
(cost $415,517,982)................................ 498,770,504
------------
PREFERRED STOCKS - 1.4%
Printing, Publishing, Broadcasting &
Entertainment - 1.4%
235,800 News Corp. Ltd...................................... 7,442,437
------------
Total Preferred Stocks
(cost $5,734,588).................................. 7,442,437
------------
</TABLE>

See Combined Notes to Financial Statements.

68
<PAGE>

EVERGREEN
Select Strategic Value Fund

Schedule of Investments(continued)
June 30, 1999

<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>

SHORT-TERM INVESTMENTS - 4.6%
Repurchase Agreement - 4.0%
$20,965,166 Dresdner Bank AG 4.75%, purchased 6/30/1999,
maturing 7/1/1999, maturity value $20,967,932
(cost $20,965,166)(a)............................ $ 20,965,166
------------
</TABLE>
<TABLE>
<CAPTION>

Shares Value
<C> <S> <C>

<CAPTION>
Money Market Shares - 0.6%
<C> <S> <C>
3,238,537 Valiant General Fund................................ $ 3,238,537
------------
Total Short-Term Investments
(cost $24,203,703)................................. 24,203,703
Total Investments - (cost $445,456,273)..... 99.6% 530,416,644
Other Assets and Liabilities - net........... 0.4 2,388,870
----- ------------
Net Assets................................... 100.0% $532,805,514
===== ============
</TABLE>

(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at June 30,
1999.
* Non-Income Producing Security

Summary of Abbreviations:
ADR American Depository Receipt
NV Naamloze (Dutch for "corporation")
REIT Real Estate Investment Trust

See Combined Notes to Financial Statements.

69
<PAGE>

EVERGREEN
Select Equity Growth Funds

Statements of Assets and Liabilities
June 30, 1999

<TABLE>
<CAPTION>
Diversified Large Cap Small Cap
Balanced Core Equity Value Blend Growth
Fund Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Identified cost of
securities............. $608,922,743 $1,361,603,693 $526,866,558 $334,676,901 $78,373,004
Net unrealized gains on
securities............. 52,964,534 579,411,427 87,016,041 113,484,768 9,784,614
- ----------------------------------------------------------------------------------------------
Market value of
securities............. 661,887,277 1,941,015,120 613,882,599 448,161,669 88,157,618
Cash.................... 0 0 0 0 14,416
Receivable for
securities sold........ 4,857,863 3,505,724 3,067,451 4,580,756 0
Receivable for Fund
shares sold............ 419,135 372,289 195,290 0 45,019
Dividends and interest
receivable............. 5,789,563 1,884,530 767,996 406,477 84
Receivable for daily
variation margin on
open futures
contracts.............. 0 0 156,250 0 0
Deferred organization
expenses............... 0 0 0 0 5,932
Prepaid expenses and
other assets........... 9,807 4,233 22,617 22,148 21,849
- ----------------------------------------------------------------------------------------------
Total assets.......... 672,963,645 1,946,781,896 618,092,203 453,171,050 88,244,918
- ----------------------------------------------------------------------------------------------
Liabilities
Payable for securities
purchased.............. 8,428,422 0 4,344,450 10,874,003 0
Payable for Fund shares
redeemed............... 5,057,054 1,876,530 5,667,525 3,267,818 3,698
Payable for securities
on loan................ 0 0 0 0 18,071,447
Advisory fee payable.... 269,003 925,761 244,810 219,233 46,107
Distribution Plan
expenses payable....... 42 6,028 826 59 0
Due to other related
parties................ 13,437 40,739 3,408 9,966 516
Accrued expenses and
other liabilities...... 57,880 209,926 92,401 43,007 9,613
- ----------------------------------------------------------------------------------------------
Total liabilities..... 13,825,838 3,058,984 10,353,420 14,414,086 18,131,381
- ----------------------------------------------------------------------------------------------
Net assets.............. $659,137,807 $1,943,722,912 $607,738,783 $438,756,964 $70,113,537
- ----------------------------------------------------------------------------------------------
Net assets represented
by
Paid-in capital......... $604,276,094 $1,174,619,818 $502,485,819 $291,584,904 $64,747,945
Undistributed
(overdistributed) net
investment income or
loss................... 1,619,270 56,683 414,562 (8,169) 0
Accumulated net
realized gains or
losses on securities
and futures
contracts.............. 277,909 189,634,984 17,436,598 33,695,461 $(4,419,022)
Net unrealized gains on
securities and futures
contracts.............. 52,964,534 579,411,427 87,401,804 113,484,768 $ 9,784,614
- ----------------------------------------------------------------------------------------------
Total net assets........ $659,137,807 $1,943,722,912 $607,738,783 $438,756,964 $70,113,537
- ----------------------------------------------------------------------------------------------
Net assets consists of
Class I................. $658,732,768 $1,913,483,237 $606,354,638 $438,375,045 $70,113,537
Class IS................ 405,039 30,239,675 1,384,145 381,919 0
- ----------------------------------------------------------------------------------------------
Total net assets........ $659,137,807 $1,943,722,912 $607,738,783 $438,756,964 $70,113,537
- ----------------------------------------------------------------------------------------------
Shares outstanding
Class I................. 48,588,180 20,730,802 21,927,085 9,066,653 5,135,726
Class IS................ 29,809 349,426 50,643 7,902 0
- ----------------------------------------------------------------------------------------------
Net asset value per
share
Class I................. $ 13.56 $ 92.30 $ 27.65 $ 48.35 $ 13.65
- ----------------------------------------------------------------------------------------------
Class IS................ $ 13.59 $ 86.54 $ 27.33 $ 48.33 $ 0
- ----------------------------------------------------------------------------------------------
</TABLE>

See Combined Notes to Financial Statements.

70
<PAGE>

EVERGREEN
Select Equity Growth Funds

Statements of Assets and Liabilities
June 30, 1999

<TABLE>
<CAPTION>
Small Company Social Special Strategic Strategic
Value Principles Equity Growth Value
Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Identified cost of
securities............. $107,141,714 $101,069,143 $101,312,154 $379,307,168 $445,456,273
Net unrealized gains on
securities............. 917 31,413,201 20,466,484 121,637,006 84,960,371
- ------------------------------------------------------------------------------------------------
Market value of
securities............. 107,142,631 132,482,344 121,778,638 500,944,174 530,416,644
Cash.................... 435 0 0 0 0
Receivable for
securities sold........ 2,219,938 2,476,006 870,502 10,688,751 0
Receivable for Fund
shares sold............ 0 200 280,877 650,916 4,973,900
Dividends and interest
receivable............. 87,308 50,454 14,914 200,187 832,276
Receivable for daily
variation margin on
open futures
contracts.............. 0 0 0 0 0
Deferred organization
expenses............... 0 0 0 0 0
Prepaid expenses and
other assets........... 3,279 6,322 30,898 12,017 23,024
- ------------------------------------------------------------------------------------------------
Total assets.......... 109,453,591 135,015,326 122,975,829 512,496,045 536,245,844
- ------------------------------------------------------------------------------------------------
Liabilities
Payable for securities
purchased.............. 1,031,250 0 1,597,588 14,937,132 2,896,795
Payable for Fund shares
redeemed............... 152,000 371,586 255,923 3,461,329 170,643
Payable for securities
on loan................ 0 0 0 0 0
Advisory fee payable.... 69,282 78,527 52,069 228,777 238,759
Distribution Plan
expenses payable....... 0 6 516 1,500 413
Due to other related
parties................ 3,166 3,188 0 12,472 16,587
Accrued expenses and
other liabilities...... 16,771 25,994 60,781 85,511 117,133
- ------------------------------------------------------------------------------------------------
Total liabilities..... 1,272,469 479,301 1,966,877 18,726,721 3,440,330
- ------------------------------------------------------------------------------------------------
Net assets.............. $108,181,122 $134,536,025 $121,008,952 $493,769,324 $532,805,514
- ------------------------------------------------------------------------------------------------
Net assets represented
by
Paid-in capital......... $116,705,297 $ 85,750,061 $ 86,594,949 $302,022,022 $437,988,176
Undistributed
(overdistributed) net
investment income or
loss................... (460) (1,986) (322) (7,208) 938,131
Accumulated net
realized gains or
losses on securities
and futures
contracts.............. (8,524,632) 17,374,749 13,947,841 70,117,504 8,918,836
Net unrealized gains on
securities and futures
contracts.............. 917 31,413,201 20,466,484 121,637,006 84,960,371
- ------------------------------------------------------------------------------------------------
Total net assets........ $108,181,122 $134,536,025 $121,008,952 $493,769,324 $532,805,514
- ------------------------------------------------------------------------------------------------
Net assets consists of
Class I................. $108,180,076 $134,476,499 $116,965,568 $481,118,988 $530,995,228
Class IS................ 1,046 59,526 4,043,384 12,650,336 1,810,286
- ------------------------------------------------------------------------------------------------
Total net assets........ $108,181,122 $134,536,025 $121,008,952 $493,769,324 $532,805,514
- ------------------------------------------------------------------------------------------------
Shares outstanding
Class I................. 12,098,501 3,643,469 8,237,347 11,471,839 2,238,855
Class IS................ 121 1,615 287,691 302,454 7,631
- ------------------------------------------------------------------------------------------------
Net asset value per
share
Class I................. $ 8.94 $ 36.91 $ 14.20 $ 41.94 $ 237.17
- ------------------------------------------------------------------------------------------------
Class IS................ $ 8.64 $ 36.86 $ 14.05 $ 41.83 $ 237.23
- ------------------------------------------------------------------------------------------------
</TABLE>

See Combined Notes to Financial Statements.

71
<PAGE>

EVERGREEN
Select Equity Growth Funds

Statements of Operations
Year Ended June 30, 1999

<TABLE>
<CAPTION>
Diversified Large Cap Small Cap
Balanced Core Equity Value Blend Growth
Fund Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income
Dividends (net of
foreign withholding
taxes of $3,693,
$81,445, $40,950,
$4,238, $0,
respectively).......... $ 5,095,377 $ 24,008,076 $ 9,357,060 $ 6,263,285 $ 100,589
Securities lending
income................. 0 0 0 0 23,242
Interest................ 23,575,630 3,610,651 542,734 745,135 87,967
- --------------------------------------------------------------------------------------------
Total investment
income................. 28,671,007 27,618,727 9,899,794 7,008,420 211,798
- --------------------------------------------------------------------------------------------
Expenses
Advisory fee............ 4,136,760 12,923,968 3,983,024 3,318,923 500,432
Distribution Plan
expenses............... 5,257 60,519 2,914 881 --
Administrative services
fees................... 178,848 480,743 173,365 123,530 8,400
Transfer agent fee...... 737,548 12,936 295,122 556 648
Trustees' fees and
expenses............... 13,700 38,000 11,879 7,262 980
Printing and postage
expenses............... 36,855 70,158 12,091 12,870 2,315
Custodian fee........... 200,683 540,553 185,701 132,201 21,344
Registration and filing
fees................... 74,996 100,777 69,733 96,499 74,110
Professional fees....... 39,452 23,743 29,615 29,242 12,936
Organization expenses... 0 0 0 0 3,989
Other................... 18,025 36,142 16,061 12,387 14,012
- --------------------------------------------------------------------------------------------
Total expenses......... 5,442,124 14,287,539 4,779,505 3,734,351 639,166
Less: Fee credits....... (27,674) (76,453) (30,047) (18,838) (3,866)
Fee waivers .......... (689,460) (1,848,228) (663,837) (474,132) 0
- --------------------------------------------------------------------------------------------
Net expenses........... 4,724,990 12,362,858 4,085,621 3,241,381 635,300
- --------------------------------------------------------------------------------------------
Net investment income or
loss................... 23,946,017 15,255,869 5,814,173 3,767,039 (423,502)
- --------------------------------------------------------------------------------------------
Net realized and change
in unrealized gains or
losses on securities
and futures contracts
Net realized gains or
losses on:
Securities............. 928,390 178,262,279 17,043,520 35,527,151 (2,938,420)
Futures contracts...... 0 12,624,975 328,675 0 0
- --------------------------------------------------------------------------------------------
Net realized gains or
losses on securities
and futures contracts.. 928,390 190,887,254 17,372,195 35,527,151 (2,938,420)
- --------------------------------------------------------------------------------------------
Net change in unrealized
gains or losses on
securities and futures
contracts.............. 12,500,436 (31,676,691) 23,916,181 (7,056,882) 6,375,643
- --------------------------------------------------------------------------------------------
Net realized and change
in unrealized gains or
losses on securities
and futures contracts.. 13,428,826 159,210,563 41,288,376 28,470,269 3,437,223
- --------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............. $37,374,843 $174,466,432 $47,102,549 $32,237,308 $3,013,721
- --------------------------------------------------------------------------------------------
</TABLE>

See Combined Notes to Financial Statements.

72
<PAGE>

EVERGREEN
Select Equity Growth Funds

Statements of Operations
Year Ended June 30, 1999

<TABLE>
<CAPTION>
Small Company Social Special Strategic Strategic
Value Principles Equity Growth Value
Fund Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income
Dividends (net of
foreign withholding
taxes of $0, $4,425,
$4,102, $0, $32,939,
respectively).......... $ 944,862 $ 1,521,760 $ 294,364 $ 3,246,479 $ 7,216,969
Securities lending
income................. 0 0 0 0 0
Interest................ 158,565 237,570 249,570 1,125,933 684,942
- ----------------------------------------------------------------------------------------------
Total investment
income................. 1,103,427 1,759,330 543,934 4,372,412 7,901,911
- ----------------------------------------------------------------------------------------------
Expenses
Advisory fee............ 789,167 1,203,962 1,181,647 3,224,101 2,384,266
Distribution Plan
expenses............... 126 279 7,423 25,109 3,890
Administrative services
fees................... 22,722 39,281 20,362 118,218 88,316
Transfer agent fee...... 331 1,379 59,803 138,356 596
Trustees' fees and
expenses............... 2,539 2,791 1,426 10,000 6,013
Printing and postage
expenses............... 3,167 5,523 3,528 24,147 11,127
Custodian fee........... 31,304 42,625 28,893 143,014 98,842
Registration and filing
fees................... 60,230 86,717 71,535 102,018 145,869
Professional fees....... 15,148 16,980 14,427 24,736 17,780
Organization expenses... 0 0 0 0 0
Other................... 14,252 13,430 4,253 7,799 20,929
- ----------------------------------------------------------------------------------------------
Total expenses......... 938,986 1,412,967 1,393,297 3,817,498 2,777,628
Less: Fee credits....... (5,396) (6,031) (4,516) (27,923) (13,690)
Fee waivers........... (84,029) (150,495) (551,194) (478,980) (340,610)
- ----------------------------------------------------------------------------------------------
Net expenses........... 849,561 1,256,441 837,587 3,310,595 2,423,328
- ----------------------------------------------------------------------------------------------
Net investment income or
loss................... 253,866 502,889 (293,653) 1,061,817 5,478,583
- ----------------------------------------------------------------------------------------------
Net realized and change
in unrealized gains or
losses on securities
and futures contracts
Net realized gains or
losses on:
Securities............. (8,481,510) 20,463,898 17,426,693 100,654,235 9,159,666
Futures contracts...... 0 0 0 0 0
- ----------------------------------------------------------------------------------------------
Net realized gains or
losses on securities
and futures contracts.. (8,481,510) 20,463,898 17,426,693 100,654,235 9,159,666
- ----------------------------------------------------------------------------------------------
Net change in unrealized
gains or losses on
securities and futures
contracts.............. 2,615,130 (22,240,460) 14,600,653 51,252,431 24,194,498
- ----------------------------------------------------------------------------------------------
Net realized and change
in unrealized gains or
losses on securities
and futures contracts.. (5,866,380) (1,776,562) 32,027,346 151,906,666 33,354,164
- ----------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting
from operations........ $(5,612,514) $(1,273,673) $31,733,693 $152,968,483 $38,832,747
- ----------------------------------------------------------------------------------------------
</TABLE>

See Combined Notes to Financial Statements.

73
<PAGE>

EVERGREEN
Select Equity Growth Funds

Statements of Changes in Net Assets
Year Ended June 30, 1999

<TABLE>
<CAPTION>
Diversified Large Cap Small Cap
Balanced Core Equity Value Blend Growth
Fund Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations
Net investment income or
loss................... $ 23,946,017 $ 15,255,869 $ 5,814,173 $ 3,767,039 $ (423,502)
Net realized gains or
losses on securities
and futures contracts.. 928,390 190,887,254 17,372,195 35,527,151 (2,938,420)
Net change in unrealized
gains or losses on
securities and futures
contracts.............. 12,500,436 (31,676,691) 23,916,181 (7,056,882) 6,375,643
- --------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 37,374,843 174,466,432 47,102,549 32,237,308 3,013,721
- --------------------------------------------------------------------------------------------------
Distributions to
shareholders from:
Net investment income
(b)
Class I................ (22,214,234) (14,533,736) (5,432,863) (415,801) 0
Class IS............... (71,558) (136,355) (6,977) (2,046) 0
Class IC (a)........... 0 0 0 (3,330,655) 0
- --------------------------------------------------------------------------------------------------
Total distributions
from net investment
income................ (22,285,792) (14,670,091) (5,439,840) (3,748,502) 0
- --------------------------------------------------------------------------------------------------
Net realized gains (b)
Class I................ (7,372,020) (160,679,308) (17,317,740) (1,886,318) (100,814)
Class IS............... (32,664) (2,314,062) (34,597) (32,097) 0
Class IC (a)........... 0 0 0 (50,651,105) 0
- --------------------------------------------------------------------------------------------------
Total distributions
from net realized
gains................. (7,404,684) (162,993,370) (17,352,337) (52,569,520) (100,814)
- --------------------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (29,690,476) (177,663,461) (22,792,177) (56,318,022) (100,814)
- --------------------------------------------------------------------------------------------------
Capital shares
transactions
Proceeds from shares
sold................... 107,820,701 194,557,250 67,508,083 46,937,384 3,242,108
Payment for shares
redeemed............... (200,572,408) (345,341,133) (303,364,284) (147,493,668) (5,425,723)
Net asset value of
shares issued in
reinvestment of
distributions.......... 20,140,059 127,043,887 21,722,516 51,527,385 100,757
Net asset value of
shares issued in
acquisition of
CoreStates Equity
Growth Fund............ 0 0 0 0 0
- --------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
shares transactions... (72,611,648) (23,739,996) (214,133,685) (49,028,899) (2,082,858)
- --------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... (64,927,281) (26,937,025) (189,823,313) (73,109,613) 830,049
Net assets
Beginning of year....... 724,065,088 1,970,659,937 797,562,096 511,866,577 69,283,488
- --------------------------------------------------------------------------------------------------
End of year............. $659,137,807 $1,943,722,912 $607,738,783 $438,756,964 $70,113,537
- --------------------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income or
loss................... $ 1,619,270 $ 56,683 $ 414,562 $ (8,169) $ 0
- --------------------------------------------------------------------------------------------------
</TABLE>
(a) On April 30, 1999, the Class IC shares of the Large Cap Blend Fund and So-
cial Principles Fund were converted to Class I shares. Shareholders of
Class IC shares became owners of that number of Class I shares having a net
asset value equal to the net asset value of their shares immediately prior
to the close of business on April 30, 1999. Class IC is the accounting sur-
vivor, its operating results for the periods prior to April 30, 1999 have
been carried forward in these financial statements.
(b) The Large Cap Blend Fund redesignated $240,950 ($0.02 per share for Classes
I, IS and IC) distributions from net investment income declared after Janu-
ary 1, 1999, as capital gains distributions after January 1, 1999.

See Combined Notes to Financial Statements.

74
<PAGE>

EVERGREEN
Select Equity Growth Funds

Statements of Changes in Net Assets
Year Ended June 30, 1999

<TABLE>
<CAPTION>
Small Company Social Special Strategic Strategic
Value Principles Equity Growth Value
Fund Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations
Net investment income or
loss................... $ 253,866 $ 502,889 $ (293,653) $ 1,061,817 $ 5,478,583
Net realized gains or
losses on securities... (8,481,510) 20,463,898 17,426,693 100,654,235 9,159,666
Net change in unrealized
gains or losses on
securities............. 2,615,130 (22,240,460) 14,600,653 51,252,431 24,194,498
- --------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ (5,612,514) (1,273,673) 31,733,693 152,968,483 38,832,747
- --------------------------------------------------------------------------------------------------
Distributions to
shareholders from:
Net investment income
Class I................ (313,271) (78,008) 0 (1,186,581) (4,545,875)
Class IS............... (102) (238) 0 (10,641) (17,533)
Class IC (a)........... 0 (537,557) 0 0 0
- --------------------------------------------------------------------------------------------------
Total distributions
from net investment
income................ (313,373) (615,803) 0 (1,197,222) (4,563,408)
- --------------------------------------------------------------------------------------------------
Net realized gains
Class I................ (363,011) (157,473) (7,643,649) (42,795,680) (7,731,471)
Class IS............... 0 (6,403) (298,735) (947,111) (36,621)
Class IC (a)........... 0 (8,960,041) 0 0 0
- --------------------------------------------------------------------------------------------------
Total distributions
from net realized
gains................. (363,011) (9,123,917) (7,942,384) (43,742,791) (7,768,092)
- --------------------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (676,384) (9,739,720) (7,942,384) (44,940,013) (12,331,500)
- --------------------------------------------------------------------------------------------------
Capital shares
transactions
Proceeds from shares
sold................... 49,048,796 14,856,248 44,330,181 98,098,328 281,162,284
Payment for shares
redeemed............... (12,850,016) (58,178,607) (32,256,122) (282,527,098) (72,083,435)
Net asset value of
shares issued in
reinvestment of
distributions.......... 624,439 9,074,037 7,935,176 40,521,982 8,705,025
Net asset value of
shares issued in
acquisition of
CoreStates Equity
Growth Fund............ 0 0 0 205,742,310 0
- --------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
shares transactions... 36,823,219 (34,248,322) 20,009,235 61,835,522 217,783,874
- --------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... 30,534,321 (45,261,715) 43,800,544 169,863,992 244,285,121
Net assets
Beginning of year....... 77,646,801 179,797,740 77,208,408 323,905,332 288,520,393
- --------------------------------------------------------------------------------------------------
End of year............. $108,181,122 $134,536,025 $121,008,952 $493,769,324 $532,805,514
- --------------------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income or
loss................... $ (460) $ (1,986) $ (322) $ (7,208) $ 938,131
- --------------------------------------------------------------------------------------------------
</TABLE>
(a) On April 30, 1999, the Class IC shares of the Large Cap Blend Fund and So-
cial Principles Fund were converted to Class I shares. Shareholders of
Class IC shares became owners of that number of Class I shares having a net
asset value equal to the net asset value of their shares immediately prior
to the close of business on April 30, 1999. Class IC is the accounting sur-
vivor, its operating results for the periods prior to April 30, 1999 have
been carried forward in these financial statements.

See Combined Notes to Financial Statements.

75
<PAGE>

EVERGREEN
Select Equity Growth Funds

Statements of Changes in Net Assets
Period Ended June 30, 1998
<TABLE>
<CAPTION>
Diversified Large Cap Small Cap
Balanced Core Equity Value Blend Growth
Fund** Fund* Fund** Fund* Fund***
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations
Net investment income... $ 9,106,347 $ 11,215,922 $ 4,518,633 $ 2,329,360 $ (130,149)
Net realized gain on
securities and future
contracts.............. 6,632,946 161,218,815 17,369,461 51,925,395 407,197
Net change in
unrealized gains or
losses on securities
and future contracts... 40,464,098 53,230,680 63,485,623 5,211,744 (1,425,687)
- ---------------------------------------------------------------------------------------------------
Net increase
(decrease) in net
assets resulting from
operations............ 56,203,391 225,665,417 85,373,717 59,466,499 (1,148,639)
- ---------------------------------------------------------------------------------------------------
Distributions to
shareholders from:
Net investment income
Class I................ (9,096,812) (11,166,520) (4,502,185) (29,968) 0
Class IS............... (1,320) (29,555) (1,220) (475) 0
Class IC............... 0 0 0 (2,357,277) 0
- ---------------------------------------------------------------------------------------------------
Total distributions
from net investment
income................ (9,098,132) (11,196,075) (4,503,405) (2,387,720) 0
- ---------------------------------------------------------------------------------------------------
Net realized gains
Class I................ 0 0 0 0 0
Class IS............... 0 0 0 0 0
Class IC............... 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------
Total distributions
from net realized
gains................. 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (9,098,132) (11,196,075) (4,503,405) (2,387,720) 0
- ---------------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold................... 794,145,003 1,978,861,338 844,178,135 502,787,135 24,034,367
Payment of shares
redeemed............... (121,943,214) (222,735,836) (130,961,973) (48,017,312) (1,126,600)
Net asset value of
shares issued in
reinvestment of
distributions.......... 4,758,040 65,093 3,475,622 17,975 0
- ---------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
capital share
transactions.......... 676,959,829 1,756,190,595 716,691,784 454,787,798 22,907,767
- ---------------------------------------------------------------------------------------------------
Total increase in net
assets............... 724,065,088 1,970,659,937 797,562,096 511,866,577 21,759,128
Net assets
Beginning of period..... 0 0 0 0 47,524,360
- ---------------------------------------------------------------------------------------------------
End of period........... $ 724,065,088 $1,970,659,937 $ 797,562,096 $511,866,577 $69,283,488
- ---------------------------------------------------------------------------------------------------
Undistributed net
investment income or
loss................... $ 76,045 $ 15,911 $ 84,835 $ 48,469 $ (334)
- ---------------------------------------------------------------------------------------------------
</TABLE>
* For the period from November 24, 1997 (commencement of operations) to June
30, 1998.
** For the period from January 22, 1998 (commencement of operations) to June
30, 1998.
*** For the period from March 1, 1998 to June 30, 1998. The Fund changed its
fiscal year end from February 28 to June 30, effective June 30, 1998.

See Combined Notes to Financial Statements.

76
<PAGE>

EVERGREEN
Select Equity Growth Funds

Statements of Changes in Net Assets
Period Ended June 30, 1998
<TABLE>
<CAPTION>
Small Social Special Strategic Strategic
Company Value Principles Equity Growth Value
Fund** Fund* Fund Fund* Fund*
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations
Net investment income
(loss)................. $ 158,103 $ 119,251 $ (396,076) $ 334,100 $ 1,678,953
Net realized gain on
securities and written
options................ 302,967 6,082,094 11,241,857 32,617,708 7,762,171
Net change in
unrealized gains or
losses on securities
and written options.... (2,614,213) 4,046,653 (654,231) 17,033,702 12,371,066
- -----------------------------------------------------------------------------------------------
Net increase
(decrease) in net
assets resulting from
operations............ (2,153,143) 10,247,998 10,191,550 49,985,510 21,812,190
- -----------------------------------------------------------------------------------------------
Distributions to
shareholders from:
From net investment
income
Class I................ (152,163) (1,626) 0 (325,046) (1,676,451)
Class IS............... 0 (42) 0 0 (2,273)
Class IC............... 0 (160,897) 0 0 0
- -----------------------------------------------------------------------------------------------
Total distributions
from net investment
income................ (152,163) (162,565) 0 (325,046) (1,678,724)
- -----------------------------------------------------------------------------------------------
Net realized gains
Class I................ 0 0 (9,099,479) 0 0
Class IS............... 0 0 (364,614) 0 0
Class IC............... 0 0 0 0 0
- -----------------------------------------------------------------------------------------------
Total distributions
from net realized
gains................. 0 0 (9,464,093) 0 0
- -----------------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (152,163) (162,565) (9,464,093) (325,046) (1,678,724)
- -----------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold................... 86,504,946 181,779,780 14,069,175 341,558,248 284,680,865
Payment of shares
redeemed............... (6,702,683) (12,070,972) (20,704,096) (67,348,327) (16,580,621)
Net assets value of
shares issued in
reinvestment of
distributions.......... 149,844 3,499 8,789,058 34,947 286,683
- -----------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
capital share
transactions.......... 79,952,107 169,712,307 2,154,137 274,244,868 268,386,927
- -----------------------------------------------------------------------------------------------
Total increase in net
assets............... 77,646,801 179,797,740 2,881,594 323,905,332 288,520,393
Net assets
Beginning of period..... 0 0 74,326,814 0 0
- -----------------------------------------------------------------------------------------------
End of period........... $77,646,801 $179,797,740 $77,208,408 $323,905,332 $288,520,393
- -----------------------------------------------------------------------------------------------
Undistributed net
investment income or
loss................... $ 69,313 $ 60,566 $ (4,076) $ 85,171 $ 75,764
- -----------------------------------------------------------------------------------------------
</TABLE>
* For the period from November 24, 1997 (commencement of operations) to June
30, 1998.
** For the period from December 23, 1997 (commencement of operations) to June
30, 1998.

See Combined Notes to Financial Statements.

77
<PAGE>

EVERGREEN
Select Equity Growth Funds

Statements of Changes in Net Assets
Year Ended February 28, 1998
<TABLE>
<CAPTION>
Small Cap
Growth Fund
-----------
1998
- --------------------------------------------------------------------------------
<S> <C>
Operations
Net investment loss.............................................. $ (134,192)
Net realized loss on securities.................................. (415,947)
Net change in unrealized gains or losses on securities........... 4,981,029
- --------------------------------------------------------------------------------
Net increase in net assets resulting from operations............ 4,430,890
- --------------------------------------------------------------------------------
Distributions to shareholders from:
Net realized gain on investments................................. (1,657,057)
- --------------------------------------------------------------------------------
Total distributions to shareholders............................. (1,657,057)
- --------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold........................................ 42,857,020
Payment for shares redeemed...................................... 1,640,345
Net assets value of shares issued in reinvestment of
distributions................................................... (2,634,970)
- --------------------------------------------------------------------------------
Net increase in net assets resulting from capital share
transactions.................................................. 41,862,395
- --------------------------------------------------------------------------------
Total increase in net assets.................................. 44,636,228
Net assets
Beginning of year................................................. 2,888,132
- --------------------------------------------------------------------------------
End of year, including accumulated net investment income of $320
................................................................. $47,524,360
- --------------------------------------------------------------------------------
</TABLE>

See Combined Notes to Financial Statements.

78
<PAGE>

Combined Notes to Financial Statements

1. ORGANIZATION

The Evergreen Select Equity Growth Funds consist of Evergreen Select Balanced
Fund ("Balanced Fund"), Evergreen Select Core Equity Fund ("Core Equity Fund")
(formerly Evergreen Select Common Stock Fund), Evergreen Select Diversified
Value Fund ("Diversified Value Fund"), Evergreen Select Large Cap Blend Fund
("Large Cap Blend Fund"), Evergreen Select Small Cap Growth Fund ("Small Cap
Growth Fund"), Evergreen Select Small Company Value Fund ("Small Company Value
Fund"), Evergreen Select Social Principles Fund ("Social Principles Fund"), Ev-
ergreen Select Special Equity Fund ("Special Equity Fund") (formerly CoreFunds
Special Equity Fund), Evergreen Select Strategic Growth Fund ("Strategic Growth
Fund") and Evergreen Select Strategic Value Fund ("Strategic Value Fund"), each
of which is registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as diversified, open-end management investment company. Each
of the Funds is a separate series of Evergreen Select Equity Trust, a Delaware
business trust organized on September 18, 1997, and are collectively referred
to herein as "the Funds".

The Funds offer an Institutional Class of shares ("Class I") and an Institu-
tional Service Class of shares ("Class IS"). Each Class of shares is sold with-
out a front-end sales charge or contingent deferred sales charge. Class IS
shares pay an ongoing service fee. Until April 30, 1999 Large Cap Blend Fund
and Social Principles Fund offered an Institutional Charitable Class of shares
("Class IC"), which were available only to those investors that qualified as a
non-profit organization under the Internal Revenue Code.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently fol-
lowed by the Funds in the preparation of their financial statements. The poli-
cies are in conformity with generally accepted accounting principles, which re-
quire management to make estimates and assumptions that affect amounts reported
herein. Actual results could differ from these estimates.

A. Valuation of Securities
Securities traded on a national securities exchange or included on the NASDAQ
National Market System ("NMS") are valued at the last reported sales price on
the exchange where primarily traded. Securities traded on an exchange or NMS
for which there has been no sale and other securities traded in the over-the-
counter market are valued at the mean between the last reported bid and asked
price.

Corporate bonds, U.S. government obligations, mortgage and other asset-backed
securities and other fixed-income securities are valued at prices provided by
an independent pricing service. In determining a price for normal institution-
al-size transactions, the pricing service uses methods based on market transac-
tions for comparable securities and analysis of various relationships between
similar securities, which are generally recognized by institutional traders.

Short-term investments with remaining maturities of 60 days or less at the time
of purchase are carried at amortized cost, which approximates market value.

Securities for which valuations are not readily available from an independent
pricing service (including restricted securities) are valued at fair value as
determined in good faith according to procedures established by the Board of
Trustees.

B. Repurchase Agreements
Each Fund may invest in repurchase agreements. Securities pledged as collateral
for repurchase agreements are held by the custodian on the Fund's behalf. Each
Fund monitors the adequacy of the collateral daily and will require the seller
to provide additional collateral in the event the market value of the securi-
ties pledged falls below the carrying value of the repurchase agreement, in-
cluding accrued interest. Each Fund will only enter into repurchase agreements
with banks and other financial institutions which are deemed by the investment
adviser to be creditworthy pursuant to guidelines established by the Board of
Trustees.

79
<PAGE>

Combined Notes to Financial Statements(continued)

Pursuant to an exemptive order issued by the Securities and Exchange Commission
certain Funds managed by Evergreen Investment Management Company ("EIMC") may
transfer uninvested cash balances into a joint trading account. These balances
are invested in one or more repurchase agreements that are fully collateralized
by U.S. Treasury and/or federal agency obligations.

C. Futures Contracts
In order to gain exposure to or protect against changes in security values, the
Funds may buy and sell futures contracts.

The initial margin deposited with a broker when entering into a futures trans-
action is subsequently adjusted by daily payments or receipts as the value of
the contract changes. Such changes are recorded as unrealized gains or losses.
Realized gains or losses are recognized on closing the contract.

Risks of entering into futures contracts include (i) the possibility of an il-
liquid market for the contract, (ii) the possibility that a change in the value
of the contract may not correlate with changes in the value of the underlying
instrument or index, and (iii) the credit risk that the other party will not
fulfill their obligations under the contract. Futures contracts also involve
elements of market risk in excess of the amount reflected in the statement of
assets and liabilities.

D. Foreign Currency
The books and records of the Funds are maintained in United States (U.S.) dol-
lars. Foreign currency amounts are translated into United States dollars as
follows: market value of investments, other assets and liabilities at the daily
rate of exchange; purchases and sales of investments, income and expenses at
the rate of exchange prevailing on the respective dates of such transactions.
Net unrealized foreign exchange gain or loss resulting from changes in foreign
currency exchange rates is a component of net unrealized gain or loss on secu-
rities and foreign currency related transactions. Net realized foreign currency
gains or losses resulting from changes in exchange rates include foreign cur-
rency gains and losses between trade date and settlement date on securities
transactions, foreign currency related transactions and the difference between
the amounts of interest and dividends recorded on the books of the Fund and the
amounts that are actually received and are included in realized gain or loss on
foreign currency related transactions. The portion of foreign currency gains or
losses related to fluctuations in exchange rates between the initial purchase
trade date and subsequent sale trade date is included in realized gains or
losses on securities.

E. Securities Lending
In order to generate income and to offset expenses, the Funds may lend portfo-
lio securities to brokers, dealers, and other financial organizations. The
Funds' investment advisor will monitor the creditworthiness of such borrowers.
Loans of securities may not exceed 33 1/3% of a Fund's total assets and will be
collateralized by cash, letters of credit or U.S. Government securities that
are maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities, including accrued interest. The Fund
monitors the adequacy of the collateral daily and will require the borrower to
provide additional collateral in the event the value of the collateral falls
below 100% of the market value of the securities on loan. While such securities
are on loan, the borrower will pay a Fund any income accruing thereon, and the
Fund may invest any cash collateral received in portfolio securities, thereby
increasing its return. A Fund will have the right to call any such loan and ob-
tain the securities loaned at any time on five days' notice. Any gain or loss
in the market price of the loaned securities, which occurs during the term of
the loan, would affect a Fund and its investors. A Fund may pay fees in connec-
tion with such loans.

F. Security Transactions and Investment Income
Securities transactions are accounted for no later than one business day after
the trade date. Realized gains and losses are computed on the identified cost
basis. Interest income is recorded on the accrual basis and includes accretion
of discounts and amortization of premiums. Dividend income is recorded on the
ex-

80
<PAGE>

Combined Notes to Financial Statements(continued)

dividend date or in the case of some foreign securities, on the date thereafter
when the Fund is made aware of the dividend. Income and capital gains realized
from some foreign securities may be subject to foreign withholding taxes, which
are accrued as applicable.

G. Federal Taxes
The Funds qualify as regulated investment companies under the Internal Revenue
Code of 1986, as amended (the "Code"). As such, the Funds will not incur any
federal income tax liability since they are expected to distribute all of their
net investment company taxable income and net capital gains, if any, to their
shareholders. The Funds also intend to avoid any excise tax liability by making
the required distributions under the Code. Accordingly, no provision for fed-
eral taxes is required. To the extent that realized capital gains can be offset
by capital loss carryforwards, it is each Fund's policy not to distribute such
gains.

H. Distributions
Distributions from net investment income for the Funds, except Small Cap Growth
Fund, are declared and paid monthly. Small Cap Growth Fund declares and pays
distributions from net investment income, if any, annually. Distributions from
net realized capital gains, if any, are paid at least annually. Distributions
to shareholders are recorded at the close of business on the ex-dividend date.

Income and capital gains distributions to shareholders are determined in accor-
dance with income tax regulations, which may differ from generally accepted ac-
counting principles. The difference between financial statements amounts avail-
able for distribution and distributions made in accordance with income tax reg-
ulations are primarily due to differing treatment for certain distributions re-
ceived from real estate investment trusts, certain repurchases of securities
sold at a loss and the in-kind transaction described in Note 5.

The Large Cap Blend Fund redesignated $240,950 ($0.02 per share for Class I, IS
and IC) of distributions from net investment income declared after January 1,
1999, as capital gains distributions after January 1, 1999.

Certain distributions paid during previous years have been reclassified to
conform with current year presentation.

I. Class Allocations
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses are prorated among the classes based on the rela-
tive net assets of each class. Currently, class specific expenses are limited
to expenses incurred under the Distribution Plans.

J. Organization Expenses
Organization expenses for Small Cap Growth Fund are amortized to operations
over a five-year period on a straight-line basis. In the event any of the ini-
tial shares of the Fund are redeemed by any holder during the five-year amorti-
zation period, redemption proceeds will be reduced by any unamortized organiza-
tion expenses in the same proportion as the number of initial shares being re-
deemed bears to the number of initial shares outstanding at the time of the re-
demption.

81
<PAGE>

Combined Notes to Financial Statements(continued)

3. CONVERSION INFORMATION

On November 24, 1997, the Core Equity Fund, Strategic Growth Fund, and Strate-
gic Value Fund commenced operations of their respective Class I shares as a re-
sult of a conversion of common trust funds managed by First Union National Bank
("FUNB"), a subsidiary of First Union Corporation ("First Union"). Also, the
Large Cap Blend Fund and Social Principles Fund commenced operations of their
respective Class IC shares as a result of similar common trust fund conver-
sions. The following chart summarizes pertinent data related to each Fund on
the date of conversion:

<TABLE>
<CAPTION>
Core Large Cap Social Strategic Strategic
Equity Fund Blend Fund Principles Fund Growth Fund Value Fund
-------------- ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Shares issued........... 22,828,425 10,264,770 4,293,581 5,750,026 831,617
Net assets.............. $1,894,078,143 $462,393,873 $157,379,236 $186,600,811 $169,109,520
Net asset value per
share.................. $ 82.97 $ 45.05 $ 36.65 $ 32.45 $ 203.35
Unrealized appreciation
of securities.......... $ 557,857,438 $115,329,906 $ 49,607,008 $ 53,350,873 $ 48,394,807
</TABLE>

The above amounts are reflected in proceeds from shares sold in the statements
of changes in net assets for the period ended June 30, 1998.

4. CLASS IC CONVERSION

On April 30, 1999, the Large Cap Blend Fund and Social Principles Fund con-
verted their respective Class IC shares to Class I shares. Shareholders of
Class IC shares became owners of that number of Class I shares having a net as-
set value equal to the net asset value of their shares immediately prior to the
close of business April 30, 1999. Since Class IC shares contributed the major-
ity of the net assets and the shareholders to the newly combined Class I, the
Class IC and its operating results for prior periods are carried forward as the
accounting survivor. The following chart summarizes pertinent data related to
each Fund's Class IC shares on the date of conversion:

<TABLE>
<CAPTION>
Large Cap Social
Blend Fund Principles Fund
------------ ---------------
<S> <C> <C>
Class I shares issued.............. 9,604,208 3,712,810
Net assets of Class IC............. $452,516,632 $126,994,084
Net asset value of Class I per
share............................. $ 47.12 $ 34.20
</TABLE>

5. IN-KIND TRANSACTION

On January 21, 1998, the Evergreen Balanced Fund II and Evergreen Value Fund,
Class Y, executed a redemption in-kind transaction of $737,248,788 and
$793,367,277, respectively. This transaction resulted in the liquidation of
substantially all of the net assets of the Evergreen Balanced Fund II and Ever-
green Value Fund Class Y shares, which were transferred to Class I shares of
Balanced Fund and Diversified Value Fund, respectively. On January 22, 1998,
Balanced Fund and Diversified Value Fund commenced operations of their Class I
shares through in-kind purchases of 58,643,231 and 33,532,392 shares, respec-
tively, amounting to $737,248,788 and $793,367,277, respectively. These amounts
are reflected in proceeds from shares sold in the statements of changes in net
assets for the period ended June 30, 1998. In exchange for these shares, in-
vestment securities, excluding cash and cash equivalents, with a cost and mar-
ket value of $708,705,595 and $774,879,156 were contributed to the Balanced
Fund and Diversified Value Fund, respectively. Additionally, Balanced Fund and
Diversified Value Fund received cash and cash equivalents of $28,543,193 and
$23,488,121, respectively, to complete the transaction.

82
<PAGE>

Combined Notes to Financial Statements(continued)

6. ACQUISITIONS

Effective on the close of business July 24, 1998, Special Equity Fund acquired
all of the net assets and certain liabilities of the CoreFund Special Equity
Fund ("CoreFund") an open-end, management investment company, registered under
the 1940 Act, through a tax-free exchange of shares. Shareholders of Class A,
Class B and Class Y shares of the CoreFund became owners of that number of full
and fractional shares of Class IS, Class IS and Class I shares, respectively,
of Special Equity Fund having an aggregate net asset value equal to the aggre-
gate net asset value of their shares of the CoreFund immediately prior to the
close of business on July 24, 1998. Shareholders of CoreFund Class B shares re-
ceived 22,353 shares of Class IS as a result of the merger. The Special Equity
Fund had no operations prior to the acquisition. Since both the Special Equity
Fund and the CoreFund were similar funds, and the CoreFund contributed the ma-
jority of the net assets and shareholders, its basis of accounting for assets
and liabilities and its operating results for prior periods are carried forward
as the accounting survivor. The above amounts are reflected in proceeds from
shares issued in both the Statements of Changes in Net Assets and Capital
Shares Transactions.

Effective the close of business on July 24, 1998, Strategic Growth Fund ac-
quired the net assets of CoreFund Equity Growth Fund, an open-end management
investment company registered under the 1940 Act in an exchange of shares. The
net assets were exchanged through a tax-free exchange for 186,381 Class IS
shares and 5,297,535 Class I shares of Strategic Growth Fund. The acquired net
assets consisted primarily of portfolio securities with unrealized appreciation
of $66,587,357. The aggregate net assets of CoreFund Equity Growth Fund and
Strategic Growth Fund immediately before the acquisition were $205,742,310 and
$326,300,095, respectively. The aggregate net assets of Strategic Growth Fund
after the acquisition were $532,042,405. The above amounts are reflected in
proceeds from shares issued in both the Statements of Changes in Net Assets and
Capital Shares Transactions.

Immediately following the common trust fund conversion on November 24, 1997,
the Strategic Growth Fund acquired substantially all of the net assets of Eq-
uity Growth Fund, a common trust fund managed by FUNB. The net assets were ac-
quired through a taxable exchange for 2,517,542 Class I shares of Strategic
Growth Fund, valued at $32.45 per share. The acquired net assets consisted pri-
marily of portfolio securities with unrealized appreciation of $25,897,713. The
aggregate net assets of Equity Growth Fund and Strategic Growth Fund immedi-
ately prior to the acquisition were $81,699,736 and $186,600,811, respectively.
The aggregate net assets and shares outstanding of Strategic Growth Fund imme-
diately after the acquisition were $268,300,547 and 8,267,568, respectively.
The foregoing amounts are reflected in proceeds from shares sold in the State-
ments of Changes in Net Assets for the period ended June 30, 1998.

7. CAPITAL SHARE TRANSACTIONS

The Funds have an unlimited number of shares of beneficial interest with $0.001
par value authorized. Shares of beneficial interest of the Funds are currently
divided into Class I and/or Class IS. Transactions in shares of the Funds were
as follows:

Select Balanced Fund

<TABLE>
<CAPTION>
Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
-------------------------- -------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............. 7,848,229 $ 102,258,212 62,963,666 $ 793,932,091
Shares redeemed......... (14,836,155) (195,030,850) (9,271,066) (121,943,214)
Shares issued in
reinvestment of
distributions.......... 1,521,793 20,036,612 361,713 4,756,721
- -------------------------------------------------------------------------------
Net increase
(decrease)............. (5,466,133) (72,736,026) 54,054,313 676,745,598
- -------------------------------------------------------------------------------
Class IS
Shares sold............. 422,203 5,562,489 15,938 212,912
Shares redeemed......... (416,181) (5,541,558) 0 0
Shares issued in
reinvestment of
distributions.......... 7,749 103,447 100 1,319
- -------------------------------------------------------------------------------
Net increase............ 13,771 124,378 16,038 214,231
- -------------------------------------------------------------------------------
Net increase
(decrease)............. (5,452,362) $ (72,611,648) 54,070,351 $ 676,959,829
</TABLE>
- --------------------------------------------------------------------------------
(a) For Class I and Class IS the capital share activity is for the period from
January 22, 1998 and April 9, 1998, respectively, (commencement of each
Classes operations) to June 30, 1998.

83
<PAGE>

Combined Notes to Financial Statements(continued)

Select Core Equity Fund

<TABLE>
<CAPTION>
Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
------------------------- --------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............. 1,894,587 $ 162,933,860 23,538,750 $1,957,108,914
Shares redeemed......... (3,733,442) (323,280,104) (2,451,922) (219,096,830)
Shares issued in
reinvestment of
distributions.......... 1,482,376 125,141,384 453 40,719
- -------------------------------------------------------------------------------
Net increase
(decrease)............. (356,479) (35,204,860) 21,087,281 1,738,052,803
- -------------------------------------------------------------------------------
Class IS
Shares sold............. 388,096 31,623,390 250,305 21,752,424
Shares redeemed......... (271,386) (22,061,029) (41,914) (3,639,006)
Shares issued in
reinvestment of
distributions.......... 24,042 1,902,503 283 24,374
- -------------------------------------------------------------------------------
Net increase............ 140,752 11,464,864 208,674 18,137,792
- -------------------------------------------------------------------------------
Net increase
(decrease)............. (215,727) $ (23,739,996) 21,295,955 $1,756,190,595
</TABLE>
- --------------------------------------------------------------------------------
(a) For Class I and Class IS, for the period from November 24, 1997 and Febru-
ary 4, 1998, respectively (commencement of Class operations) to June 30,
1998.

Select Diversified Value Fund

<TABLE>
<CAPTION>
Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
-------------------------- -------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............. 2,710,532 $ 66,392,052 35,285,849 $ 843,364,554
Shares redeemed......... (12,054,441) (303,229,194) (5,013,312) (130,385,842)
Shares issued in
reinvestment of
distributions.......... 864,540 21,680,943 133,917 3,474,402
- -------------------------------------------------------------------------------
Net increase
(decrease)............. (8,479,369) (215,156,199) 30,406,454 716,453,114
- -------------------------------------------------------------------------------
Class IS
Shares sold............. 46,088 1,116,031 30,796 813,581
Shares redeemed......... (5,221) (135,090) (22,745) (576,131)
Shares issued in
reinvestment of
distributions.......... 1,677 41,573 48 1,220
- -------------------------------------------------------------------------------
Net increase............ 42,544 1,022,514 8,099 238,670
- -------------------------------------------------------------------------------
Net increase
(decrease)............. (8,436,825) $(214,133,685) 30,414,553 $ 716,691,784
</TABLE>
- --------------------------------------------------------------------------------
(a) For Class I and Class IS, for the period from January 22, 1998 and March
31, 1998, respectively (commencement of Class operations) to June 30, 1998.

Select Large Cap Blend Fund

<TABLE>
<CAPTION>
Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
------------------------- ------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold.............. 281,613 $ 13,021,813 281,458 $ 13,881,808
Shares redeemed.......... (1,136,453) (53,049,940) (5,242) (257,909)
Shares issued in
reinvestment of
distributions........... 40,730 1,853,814 339 16,702
Shares issued from
conversion of Class IC
(b)..................... 9,604,208 452,516,632 0 0
- -------------------------------------------------------------------------------
Net increase............. 8,790,098 414,342,319 276,555 13,640,601
- -------------------------------------------------------------------------------
Class IS
Shares sold.............. 7,147 328,082 5,918 297,642
Shares redeemed.......... (5,917) (269,541) (1) (44)
Shares issued in
reinvestment of
distributions........... 745 33,874 10 475
- -------------------------------------------------------------------------------
Net increase............. 1,975 92,415 5,927 298,073
- -------------------------------------------------------------------------------
Class IC
Shares sold.............. 745,024 33,587,489 10,802,599 488,607,729
Shares redeemed.......... (2,036,907) (94,174,187) (997,016) (47,759,403)
Shares issued in
reinvestment of
distributions........... 1,090,492 49,639,697 16 798
Shares redeemed in
conversion to Class I
(b)..................... (9,604,208) (452,516,632) 0 0
- -------------------------------------------------------------------------------
Net increase (decrease).. (9,805,599) (463,463,633) 9,805,599 440,849,124
- -------------------------------------------------------------------------------
Net increase (decrease).. (1,013,526) $ (49,028,899) 10,088,081 $454,787,798
</TABLE>
- --------------------------------------------------------------------------------
(a) For Class I, Class IS and IC, for the period from December 19, 1997, March
12, 1998 and November 24, 1997, respectively (commencement of Class opera-
tions) to June 30, 1998.
(b) On April 30, 1999, Class IC shares of the Fund were converted to Class I
shares.

84
<PAGE>

Combined Notes to Financial Statements(continued)

Select Small Cap Growth Fund

<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended
June 30, 1999 June 30, 1998 (a) February 28, 1998
--------------------- ---------------------- ----------------------
Shares Amount Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I
Shares sold............. 284,105 $ 3,242,108 1,770,376 $22,034,367 3,414,877 $42,857,020
Shares redeemed......... (437,071) (5,425,723) (82,127) (1,126,600) (209,509) (2,634,970)
Shares issued in
reinvestment of
distributions.......... 8,734 100,757 0 0 130,289 1,640,345
- -----------------------------------------------------------------------------------------------
Net increase
(decrease)............. (144,232) $(2,082,858) 1,688,249 $20,907,767 3,335,657 $41,862,395
</TABLE>
- --------------------------------------------------------------------------------
(a) For the four month period ended June 30, 1998. The fund changed its fiscal
year end from the last business day in February to June 30, effective June
30, 1998.

Select Small Company Value Fund

<TABLE>
<CAPTION>
Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
------------------------ ----------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold................. 5,762,869 $ 48,213,008 8,353,679 $86,504,946
Shares redeemed............. (1,437,069) (12,034,887) (669,991) (6,702,683)
Shares issued in
reinvestment of
distributions.............. 74,799 624,337 14,214 149,844
- ------------------------------------------------------------------------------
Net increase................ 4,400,599 36,802,458 7,697,902 $79,952,107
- ------------------------------------------------------------------------------
Class IS (b)
Shares sold................. 101,479 835,788
Shares redeemed............. (101,371) (815,129)
Shares issued in
reinvestment of
distributions.............. 13 102
- ------------------------------------------------------------------------------
Net increase................ 121 20,761
- ------------------------------------------------------------------------------
Net increase................ 4,400,720 $ 36,823,219
</TABLE>
- --------------------------------------------------------------------------------
(a) For the period from December 23, 1997 (commencement of Class operations) to
June 30, 1998.
(b) For the period from December 31, 1998 (commencement of Class operations) to
June 30, 1999.

Select Social Principles Fund

<TABLE>
<CAPTION>
Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
------------------------- -----------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............... 90,138 $ 3,145,258 61,760 $ 2,208,624
Shares redeemed........... (225,918) (8,155,311) (59) (2,272)
Shares issued in
reinvestment of
distributions............ 4,705 162,875 33 1,243
Shares issued from
conversion of Class IC
(b)...................... 3,712,810 126,994,084 0 0
- ------------------------------------------------------------------------------
Net increase.............. 3,581,735 122,146,906 61,734 2,207,595
- ------------------------------------------------------------------------------
Class IS
Shares sold............... 4,670 159,277 5,274 207,403
Shares redeemed........... (8,520) (297,123) (1) (36)
Shares issued in
reinvestment of
distributions............ 191 6,618 1 42
- ------------------------------------------------------------------------------
Net increase (decrease)... (3,659) (131,228) 5,274 207,409
- ------------------------------------------------------------------------------
Class IC
Shares sold............... 337,062 11,551,713 4,876,095 179,363,747
Shares redeemed........... (1,429,917) (49,726,173) (327,340) (12,068,700)
Shares issued in
reinvestment of
distributions............ 256,850 8,904,544 60 2,256
Shares redeemed in
conversion to Class I
(b)...................... (3,712,810) (126,994,084) 0 0
- ------------------------------------------------------------------------------
Net increase (decrease)... (4,548,815) (156,264,000) 4,548,815 167,297,303
- ------------------------------------------------------------------------------
Net increase (decrease)... (970,739) $ (34,248,322) 4,615,823 $169,712,307
</TABLE>
- --------------------------------------------------------------------------------
(a) For Class I, Class IS, Class IC, for the period from November 24, 1997,
March 12, 1998, and November 24, 1997, respectively, (commencement of Class
operations) to June 30, 1998.
(b) On April 30, 1999, Class IC shares of the Fund were converted to Class I
shares.

85
<PAGE>

Combined Notes to Financial Statements(continued)

Select Special Equity Fund

<TABLE>
<CAPTION>
Year Ended Year Ended
June 30, 1999 June 30, 1998 (a)
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............... 3,681,321 $ 43,045,845 1,100,970 $ 12,968,366
Shares redeemed........... (2,831,875) (30,671,560) (1,727,770) (20,152,176)
Shares issued in
reinvestment of
distributions............ 812,275 7,643,511 816,325 8,424,468
- ------------------------------------------------------------------------------
Net increase.............. 1,661,721 20,017,796 189,525 1,240,658
- ------------------------------------------------------------------------------
Class IS
Shares sold............... 114,558 1,284,336 92,537 1,100,809
Shares redeemed........... (146,994) (1,584,562) (47,881) (551,920)
Shares issued in
reinvestment of
distributions............ 31,295 291,665 35,511 364,590
- ------------------------------------------------------------------------------
Net increase (decrease)... (1,141) (8,561) 80,167 913,479
- ------------------------------------------------------------------------------
Net increase.............. 1,660,580 $ 20,009,235 269,692 $ 2,154,137
</TABLE>
- --------------------------------------------------------------------------------
(a) Capital share activity for the year ended June 30, 1998 is that of the
CoreFund. Amounts shown for Class I have been reclassified from Class Y of
the CoreFund. Amounts shown for Class IS reflect the combination and re-
classification of Class A and Class B of the CoreFund.

Select Strategic Growth Fund

<TABLE>
<CAPTION>
Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............... 4,260,240 $ 93,242,573 9,834,675 $324,746,855
Shares redeemed........... (7,535,767) (278,683,495) (1,464,385) (53,203,209)
Shares issued in
reinvestment of
distributions............ 1,078,559 39,578,816 982 34,947
Shares issued in
acquisition of CoreFund
Equity Growth Fund....... 5,297,535 198,759,540 -- --
- ------------------------------------------------------------------------------
Net increase (decrease)... 3,100,567 52,897,434 8,371,272 271,578,593
- ------------------------------------------------------------------------------
Class IS
Shares sold............... 130,363 4,855,755 447,254 16,811,393
Shares redeemed........... (101,906) (3,843,603) (385,382) (14,145,118)
Shares issued in
reinvestment of
distributions............ 25,744 943,166 -- --
Shares issued in
acquisition of CoreFund
Equity Growth Fund....... 186,381 6,982,770 -- --
- ------------------------------------------------------------------------------
Net increase.............. 240,582 8,938,088 61,872 2,666,275
- ------------------------------------------------------------------------------
Net increase.............. 3,341,149 $ 61,835,522 8,433,144 $274,244,868
</TABLE>
- --------------------------------------------------------------------------------
(a) For Class I and Class IS, for the period from November 24, 1997 and Febru-
ary 27,1998, respectively, (commencement of Class operations) to June 30,
1998.

Select Strategic Value Fund

<TABLE>
<CAPTION>
Year Ended Period Ended
June 30, 1999 June 30, 1998 (a)
----------------------- -----------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold................. 1,250,078 $278,450,304 1,344,196 $283,217,426
Shares redeemed............. (322,534) (69,617,033) (74,798) (16,435,232)
Shares issued in
reinvestment of
distributions.............. 40,648 8,661,803 1,265 284,542
- ------------------------------------------------------------------------------
Net increase................ 968,192 217,495,074 1,270,663 267,066,736
- ------------------------------------------------------------------------------
Class IS
Shares sold................. 12,671 2,711,091 6,502 1,463,439
Shares redeemed............. (11,118) (2,466,402) (641) (145,389)
Shares issued in
reinvestment of
distributions.............. 208 44,111 9 2,141
- ------------------------------------------------------------------------------
Net increase................ 1,761 288,800 5,870 1,320,191
- ------------------------------------------------------------------------------
Net increase................ 969,953 $217,783,874 1,276,533 $268,386,927
</TABLE>
- --------------------------------------------------------------------------------
(a) For Class I and Class IS, for the period from November 24, 1997 and March
11, 1998, respectively, (commencement of Class operations) to June 30,
1998.

86
<PAGE>

Combined Notes to Financial Statements(continued)

8. SECURITIES TRANSACTIONS

Cost of purchases and proceeds from sales of investment securities (excluding
short-term investments and securities acquired as a result of conversions, in-
kind transactions and acquisitions) were as follows for the year ended June 30,
1999:

<TABLE>
<CAPTION>
Cost of Purchases Proceeds from Sales
--------------------------------
<S> <C> <C>
Core Equity Fund................... $967,825,286 $1,146,988,165
Diversified Value Fund............. 494,893,123 720,249,809
Large Cap Blend Fund............... 209,577,370 304,210,789
Small Cap Growth Fund.............. 102,714,420 104,869,540
Small Company Value Fund........... 88,807,726 41,235,068
Social Principles Fund............. 52,951,629 88,939,584
Special Equity Fund................ 82,262,402 74,842,128
Strategic Growth Fund.............. 688,217,425 682,569,471
Strategic Value Fund............... 340,664,736 133,944,607
</TABLE>

Balanced Fund's cost of purchases of US government and non-US government secu-
rities was $212,982,807 and $193,337,453, respectively, and the Fund's proceeds
from sale of US government and non-US government securities was $241,974,953
and $244,318,838, respectively, for the year ended June 30, 1999.

The Small Cap Growth Fund loaned securities during the year ended June 30, 1999
to certain brokers who paid the Fund a negotiated lenders' fee. During the year
ended June 30, 1999, the Fund earned $23,242 in income from securities lending.
These fees are included in interest income. As of June 30, 1999 the value of
the Fund's securities on loan and the value of collateral amounted to
$18,066,600 and $18,071,447, respectively.

On June 30, 1999, the composition of unrealized appreciation and depreciation
of investment securities based on the aggregate cost of investments for federal
income tax purposes was as follows:

<TABLE>
<CAPTION>
Gross Gross Net
Unrealized Unrealized Unrealized
Tax Cost Appreciation Depreciation Appreciation
-----------------------------------------------------
<S> <C> <C> <C> <C>
Balanced Fund........... $ 609,174,309 $ 75,997,154 $(23,284,186) $ 52,712,968
Core Equity Fund........ 1,362,601,518 605,378,972 (26,965,370) 578,413,602
Diversified Value Fund.. 527,183,807 104,294,007 (17,595,215) 86,698,792
Large Cap Blend Fund.... 334,948,580 121,221,117 (8,008,028) 113,213,089
Small Cap Growth Fund... 78,552,312 13,588,795 (3,983,489) 9,605,306
Small Company Value
Fund................... 107,141,835 11,582,296 (11,581,500) 796
Social Principles Fund.. 101,278,096 39,184,577 (7,980,329) 31,204,248
Special Equity Fund..... 102,164,580 31,909,652 (12,295,594) 19,614,058
Strategic Growth Fund... 379,596,925 122,887,277 (1,540,028) 121,347,249
Strategic Value Fund.... 445,888,166 95,130,970 (10,602,492) 84,528,478
</TABLE>

On July 24, 1998, Strategic Growth Fund acquired securities, excluding cash
equivalents, with an aggregate cost $139,199,312 from the Fund's acquisition of
CoreFund Equity Growth Fund.

As of June 30, 1999, Small Cap Growth Fund had a capital loss carryover for
federal income tax purposes of $1,348,498 expiring in 2006 and $2,891,216 ex-
piring in 2007 and Small Company Value Fund had a capital loss carryover for
federal income tax purposes of $3,027,415 expiring in 2007. In addition to the
capital loss carryovers, capital losses incurred by the Funds after October 31,
1998, within the Funds' fiscal year, are deemed to arise on the first business
day of the Funds' following fiscal year. For the year ended June 30, 1999 the
Small Company Value Fund incurred and elected to defer $5,497,097 of such post-
October losses.

9. DISTRIBUTION PLANS

Evergreen Distributor, Inc. ("EDI"), a wholly owned subsidiary of The BISYS
Group Inc. ("BISYS") serves as principal underwriter to the Funds. Each Fund
has adopted a Distribution Plan for Class IS shares, as allowed by Rule 12b-1
of the 1940 Act. Distribution plans permit a fund to reimburse its principal
underwriter for costs related to selling shares of the fund and for various
other services. These costs, which consist primarily of commissions and service
fees to broker-dealers who sell shares of the fund, are paid by the fund
through expenses called "Distribution Plan expenses". Class IS, currently pays
a service fee equal to 0.25% of the average daily net asset of the class. Dis-
tribution Plan expenses are calculated daily and paid monthly.

Each of the Distribution Plans may be terminated at any time by vote of the In-
dependent Trustees or by vote of a majority of the outstanding voting shares of
the respective class.

87
<PAGE>

Combined Notes to Financial Statements(continued)

10. INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT AND OTHER AFFILIATED
TRANSACTIONS

The investment adviser to each Fund, other than Small Cap Growth Fund, Small
Company Value Fund and Special Equity Fund, is FUNB. Each Fund, other than
Small Cap Growth Fund, Small Company Value Fund and Special Equity Fund, pays
FUNB a fee for its services as set forth below. The annual advisory fees are
calculated daily and paid monthly and are based on a percentage of average
daily net assets.

<TABLE>
<CAPTION>
Annual
Advisory Fee
------------
<S> <C>
Balanced Fund.............................................. 0.60%
Core Equity Fund........................................... 0.70%
Diversified Value Fund..................................... 0.60%
Large Cap Blend Fund....................................... 0.70%
Social Principles Fund..................................... 0.80%
Strategic Growth Fund...................................... 0.70%
Strategic Value Fund....................................... 0.70%
</TABLE>

Evergreen Investment Management Company ("EIMC"), a wholly owned subsidiary of
FUNB, is the investment adviser to Small Cap Growth Fund. In return for its
services, EIMC is paid an annual advisory fee equal to 0.80% of the Funds first
$100 million of average daily net assets and at reduced rates thereafter.

Evergreen Asset Management Corp. ("EAMC"), a wholly owned subsidiary of FUNB,
is the investment adviser to Small Company Value Fund. Small Company Value Fund
pays EAMC an annual fee of 0.90% of average daily net assets. Leiber & Company,
an affiliate of First Union, is the investment sub-adviser to Small Company
Value Fund. Leiber & Company provides these services at no additional cost to
the Fund.

Leiber & Company also provides brokerage services to Small Company Value Fund
with respect to substantially all security transactions effected on either the
New York or American Stock Exchanges. For the year ended June 30, 1998, Small
Company Fund incurred $152,290, in brokerage commissions with Leiber & Company.

Meridian Investment Company ("Meridian"), an indirect subsidiary of FUNB,
serves as the investment advisor to Special Equity Fund. In return for its
services, Meridian is paid an annual fee equal to 1.50% of average daily net
assets of Special Equity Fund. Currently, Meridian agreed to limit its advisory
fee to 0.74% of average daily net assets.

Each investment adviser, other than EIMC, has voluntarily agreed to waive a
portion of the investment advisory fee on each Fund and/or to reimburse a por-
tion of each Fund's annual operating expenses (excluding interest, taxes, bro-
kerage commissions and extraordinary expenses). For the year ended June 30,
1999, the investment advisers voluntarily reduced their fees as follows:

<TABLE>
<CAPTION>
% of Average
Total Fee Waivers Daily Net Assets
---------------------------
<S> <C> <C>
Balanced Fund......................... $ 689,460 .10%
Core Equity Fund...................... 1,848,228 .10
Diversified Value Fund................ 663,837 .10
Large Cap Blend Fund.................. 474,132 .10
Small Company Value Fund.............. 84,029 .10
Social Principles Fund................ 150,495 .10
Special Equity Fund................... 551,194 .70
Strategic Growth Fund................. 478,980 .10
Strategic Value Fund.................. 340,610 .10
</TABLE>

Evergreen Investment Services ("EIS"), a subsidiary of First Union, is the ad-
ministrator and BISYS serves as sub-administrator to the Funds. As administra-
tor, EIS provides the Funds with facilities, equipment and personnel. As sub-
administrator to the Funds, BISYS provides the officers of the Funds. The ad-
ministrator and sub-administrator for each Fund are entitled to an annual fee
based on the average daily net assets of the

88
<PAGE>

Combined Notes to Financial Statements(continued)

funds administered by EIS for which First Union or its investment advisory sub-
sidiaries are also the investment advisors. The administration fee is calcu-
lated by applying percentage rates, which start at 0.05% and decline to 0.01%
per annum as net assets increase, to the average daily net asset value of the
Fund. The sub-administration fee is calculated by applying percentage rates,
which start at 0.01% and decline to .004% per annum as net assets increase, to
the average daily net asset value of the Fund. For the year ended June 30,
1999, the following amounts were paid for administration and sub-administration
services:

<TABLE>
<CAPTION>
Administration Sub-administration
-------------- ------------------
<S> <C> <C>
Balanced Fund.......................... $170,206 $ 8,642
Core Equity Fund....................... 381,935 98,808
Diversified Value Fund................. 165,277 8,088
Large Cap Blend Fund................... 98,170 25,360
Small Company Value Fund............... 18,083 4,639
Social Principles Fund................. 31,213 8,068
Special Equity Fund.................... 16,536 3,826
Strategic Growth Fund.................. 93,810 24,408
Strategic Value Fund................... 70,246 18,070
</TABLE>

For the year ended June 30, 1999, Small Cap Growth Fund reimbursed EIMC for
certain administrative and accounting expenses amounting to $8,400.

For the Small Cap Growth Fund, the sub-administration fee is paid by the in-
vestment advisor and is not a Fund expense.

Evergreen Service Company ("ESC"), an indirectly, wholly owned subsidiary of
FUNB, serves as the transfer and dividend disbursing agent for the Funds.

Officers of the Funds and affiliated Trustees receive no compensation directly
from the Funds.

11. EXPENSE OFFSET ARRANGEMENT

The Funds have entered into an expense offset arrangement with ESC and their
custodian whereby credits realized as a result of uninvested cash balances were
used to reduce a portion of each Fund's related expenses. The assets deposited
with ESC and the custodian under this expense offset arrangement could have
been invested in income-producing assets. The amount of fee credits received by
each Fund and the impact on each Fund's expense ratio represented as a percent-
age of its average daily net assets were as follows:

<TABLE>
<CAPTION>
Total Fee % of Average
Credits Received Daily Net Assets
---------------- ----------------
<S> <C> <C>
Balanced Fund.......................... $27,674 .00%
Core Equity Fund....................... 76,453 .00
Diversified Value Fund................. 30,047 .01
Large Cap Blend Fund................... 18,838 .00
Small Cap Growth Fund.................. 3,866 .01
Small Company Value Fund............... 5,396 .01
Social Principles Fund................. 6,031 .00
Special Equity Fund.................... 4,516 .01
Strategic Growth Fund.................. 27,923 .01
Strategic Value Fund................... 13,690 .00
</TABLE>

12. DEFERRED TRUSTEES' FEES

Each Independent Trustee of the Funds may defer any or all compensation related
to performance of their duties as Trustees. The Trustees' deferred balances are
allocated to deferral accounts, which are included in the accrued expenses for
the Fund. The investment performance of the deferral accounts are based on the
investment performance of certain Evergreen Funds. Any gains earned or losses
incurred in the deferral accounts are reported in the Fund's Trustees' fees and
expenses. Trustees will be paid either in one lump sum or in quarterly install-
ments for up to ten years at their election, not earlier than either the year
in which the Trustee ceases to be a member of the Board of Trustees or January
1, 2000.

89
<PAGE>

Combined Notes to Financial Statements(continued)

13. FINANCING AGREEMENTS

Certain Evergreen Funds, State Street Bank and Trust ("SSB") and a group of
banks (collectively "the Banks") entered into a financing agreement dated De-
cember 22, 1997, as amended November 20, 1998. Under this agreement, the Banks
provide an unsecured credit facility in the aggregate amount of $400 million
($275 million committed and $125 million uncommitted). The credit facility is
allocated, under the terms of the financing agreement, among the Banks. The
credit facility is to be accessed by the Funds for temporary or emergency pur-
poses only and is subject to each Fund's borrowing restrictions. Borrowings un-
der this facility bore interest at 0.50% per annum above the Federal Funds
rate. A commitment fee of 0.065% per annum was incurred on the unused portion
of the committed facility, which will be allocated to all funds. For its assis-
tance in arranging this financing agreement, the Capital Market Group of First
Union was paid a one-time arrangement fee of $27,500. SSB served as agent for
the Banks, and as administrative agent is entitled to a fee of $20,000 per an-
num which is allocated to all of the participating Funds.

On December 22, 1998, the financing agreement referenced above was amended and
renewed among all Evergreen Funds, SSB and Bank of New York ("BONY"). Under
this agreement, SSB and BONY provide an unsecured credit facility in the aggre-
gate amount of $150 million ($125 million committed and $25 million uncommit-
ted). The remaining terms and conditions of the agreement were unaffected. Dur-
ing the year ended June 30, 1999, the Fund had no borrowings under these agree-
ments.

14. DISTRIBUTIONS TO SHAREHOLDERS

On July 1, 1999 the following Funds declared net investment income dividends,
payable on July 2, 1999 to shareholders of record on June 30, 1999:

Class I Class IS
----------------
Balanced Fund.......................................... $0.035 $0.032
Core Equity Fund....................................... 0.028 0.009
Diversified Value Fund................................. 0.020 0.014
Strategic Value Fund................................... 0.445 0.395

On July 8, 1999 the following Funds declared capital gains dividends, payable
on July 9, 1999 to shareholders of record on July 7, 1999:

Class I Class IS
----------------
Core Equity Fund....................................... $9.063 $9.063
Strategic Growth Fund ................................. 5.951 5.951
Strategic Value Fund................................... 4.190 4.190

These distributions are not reflected in the accompanying financial statements.

90
<PAGE>

Combined Notes to Financial Statements(continued)

15. SUBSEQUENT EVENTS

Effective on the close of business on July 9, 1999, Balanced Fund, Core Equity
Fund, Strategic Growth Fund and Strategic Value Fund ("Acquiring Evergreen
Funds") acquired substantially all of the net assets and identified liabilities
of certain common trust funds managed by FUNB. The net assets, consisting pri-
marily of portfolio securities, were acquired either through a taxable or tax-
free exchange for Class I shares of the Acquiring Evergreen Funds.

The following summarizes pertinent data related to the Funds on the date of the
acquisition:

<TABLE>
<CAPTION>
Evergreen Unrealized
Acquiring Total Total Net Fund Appreciation
Evergreen Shares Assets NAV/share of
Fund Common Trust Fund Issued Acquired Class I Securities
-----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
Balanced Fund CoreStates Balanced Fund 422,321 $ 5,780,695 $13.68 $ 0
CoreStates Balanced Trust 6,059,738 82,945,060 20,569,515
--------- ------------ ------------
Total 6,482,059 88,725,755 20,569,515
========= ============ ============
Core Equity Fund CoreStates Growth and
Income Equity Trust 6,974,611 595,233,256 85.34 134,355,837
Signet Investors Equity A 592,625 50,576,342 36,302,394
Signet Investors Equity B 123,773 10,563,173 7,475,528
Signet Capital Growth 67,230 5,737,565 3,701,178
--------- ------------ ------------
Total 7,758,239 662,110,336 181,834,937
========= ============ ============
Strategic Growth Fund CoreStates Union County
Equity Trust 70,063 2,592,329 37.00 1,356,557
--------- ------------ ------------
Strategic Value Fund CoreStates Value Equity Fund 341,237 80,405,690 235.63 0
CoreStates Value Equity Trust 309,990 73,043,358 11,453,813
--------- ------------ ------------
Total 651,227 $153,449,048 $ 11,453,813
========= ============ ============
</TABLE>

Effective the close of business on July 30, 1999, Core Equity Fund acquired the
net assets and liabilities of Evergreen Select Equity Income Fund, an open-end
management investment company registered under the 1940 Act, in an exchange of
shares. The net assets were exchanged through a tax-free exchange for 14,454
Class IS shares and 1,629,831 Class I shares of Core Equity Fund. The acquired
net assets consisted primarily of portfolio securities with unrealized appreci-
ation of $15,463,739. Aggregate net assets of Core Equity Fund and Evergreen
Select Equity Income Fund immediately before the acquisition were
$2,449,655,426 and $132,358,403, respectively. The aggregate net assets of Core
Equity Fund after the acquisition were $2,582,013,829.

91
<PAGE>

Independent Auditors' Report

The Board of Trustees and Shareholders
Evergreen Select Equity Trust

We have audited the accompanying statements of assets and liabilities, includ-
ing the schedules of investments of the Evergreen Select Balanced Fund, Ever-
green Select Core Equity Fund (formerly Evergreen Select Common Stock Fund),
Evergreen Select Diversified Value Fund, Evergreen Select Large Cap Blend Fund,
Evergreen Select Small Cap Growth Fund, Evergreen Select Small Company Value
Fund, Evergreen Select Social Principles Fund, Evergreen Select Special Equity
Fund (formerly CoreFund Special Equity Fund), Evergreen Select Strategic Growth
Fund and Evergreen Select Strategic Value Fund, portfolios of the Evergreen Se-
lect Equity Trust, as of June 30, 1999, and the related statements of opera-
tions for the year then ended, the statements of changes in net assets for each
of the years or periods in the two year period then ended, and for the year
ended February 28, 1998 for Evergreen Select Small Cap Growth Fund, and finan-
cial highlights for each of the years or periods as described on pages 37 to
47. These financial statements and financial highlights are the responsibility
of the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. For Ever-
green Select Special Equity Fund, the statement of changes in net assets for
the year ended June 30, 1998 and financial highlights for each of the years or
periods ended prior to the year ended June 30, 1999 were audited by other audi-
tors whose reports dated August 25, 1998 and December 8, 1995, expressed un-
qualified opinions on those financial statements and financial highlights.

We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform our audits to obtain
reasonable assurance about whether the financial statements and financial high-
lights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1999 by correspondence with the custodian and brokers. An audit also in-
cludes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presenta-
tion. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
portfolios of the Evergreen Select Equity Trust as of June 30, 1999, the re-
sults of their operations, changes in their net assets and financial highlights
for each of the years or periods described above in conformity with generally
accepted accounting principles.

/s/ KPMG LLP

Boston, Massachusetts
August 6, 1999

92
<PAGE>

Other Information

Year 2000 - Unaudited

Like other investment companies, the Funds could be adversely af-fected if the
computer systems used by the Funds' investment advisors and the Funds' other
service providers are not able to perform their intended functions effectively
after 1999 because of the inability of computer software to distinguish the
year 2000 from the year 1900. The Funds' investment advisers are taking steps
to address this po-tential year 2000 problem with respect to the computer
systems that they use and to obtain satisfactory assurances that comparable
steps are being taken by the Funds' other major service providers. At this
time, however, there can be no assurance that these steps will be sufficient to
avoid any adverse impact on the Funds from this problem.

FEDERAL TAX STATUS OF DIVIDENDS (Unaudited)

Pursuant to section 852 of the Internal Revenue Code, the Funds have
designated the following amounts as long-term capital gain distribu-
tions for the fiscal year ended June 30, 1999:

<TABLE>
<CAPTION>
Distributions Per share
-----------------------
<S> <C> <C>
Core Equity Fund................................. $162,933,370 $7.825
Large Cap Blend Fund............................. 45,364,119 4.487
Small Company Value Fund......................... 300 --
Social Principles Fund........................... 9,215,913 2.121
Special Equity Fund.............................. 1,747,325 0.256
Strategic Growth Fund............................ 36,903,232 2.750
Strategic Value Fund............................. 6,286,864 3.953
</TABLE>

For corporate shareholders, the following percentages of ordinary in-
come dividends paid during the fiscal year ended June 30, 1999 quali-
fied for the dividends received deduction:

<TABLE>
<S> <C>
Balanced Fund.................................................... 17.24%
Core Equity Fund................................................. 100.00
Diversified Value Fund........................................... 41.19
Large Cap Blend Fund............................................. 54.65
Small Company Value Fund......................................... 57.57
Social Principles Fund........................................... 100.00
Special Equity Fund.............................................. 0.74
Strategic Growth Fund............................................ 23.79
Strategic Value Fund............................................. 90.38
</TABLE>

93
<PAGE>

Evergreen Select Funds

Money Market
Money Market Fund
Treasury Money Market Fund
100% Treasury Money Market Fund
Municipal Money Market Fund

Municipal Fixed Income
Intermediate Tax Exempt Bond Fund

Taxable Fixed Income
International Bond Fund
Total Return Bond Fund
Income Plus Fund
Core Bond Fund
Fixed Income Fund
Adjustable Rate Fund
Limited Duration Fund

Growth and Income/Balanced
Equity Income Fund
Balanced Fund

Growth
Special Equity Fund
Small Cap Growth Fund
Small CompanyValue Fund
Strategic Growth Fund
Core Equity Fund
Equity Index Fund
Large Cap Blend Fund
Strategic Value Fund
Diversified Value Fund
Social Principles
Secular Growth Fund

53736 542780 08/99

BULK RATE
U.S. POSTAGE
PAID
PERMIT NO. 19
HUDSON, MA

[LOGO OF EVERGREEN FUNDS APPEARS HERE]

200 Berkeley Street
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