<PAGE>
June 30, 1999
Evergreen Select
Equity Index Fund
Annual Report
[LOGO OF EVERGREEN FUNDS(SM) APPEARS HERE]
<PAGE>
Table of Contents
Letter to Shareholders..................................................... 1
Fund at a Glance........................................................... 2
Portfolio Manager Commentary............................................... 3
Financial Highlights....................................................... 5
Schedule of Investments.................................................... 8
Statement of Assets and Liabilities........................................ 15
Statement of Operations.................................................... 16
Statements of Changes in Net Assets........................................ 17
Combined Notes to Financial Statements..................................... 18
Independent Auditors' Report............................................... 23
Additional Information..................................................... 24
Evergreen Funds
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 annual 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.
<PAGE>
Letter to Shareholders
----------------------
August 1999
Dear Evergreen Shareholders,
We are pleased to provide the Evergreen Select Equity Index Fund annual report,
which covers the twelve-month period ended June 30, 1999.
[PHOTO OF WILLIAM M. ENNIS APPEARS HERE]
[PHOTO OF DAVID C. FRANCIS APPEARS HERE]
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, C.F.A.
Managing Director
Chief Investment Officer
First Capital Group - FUNB
/1/ The information above constitutes Year 2000 readiness disclosure.
1
<PAGE>
EVERGREEN
Select Equity Index Fund
Fund at a Glance as of June 30, 1999
PORTFOLIO PROFILE
Philosophy
The Evergreen Select Equity Index Fund seeks investment results that achieve
price and yield performance similar to the S&P 500 Index.
Process
The Fund invests only in stocks represented in the Standard and Poor's 500
Index. The Fund's cash position is invested in index futures to attempt to
minimize tracking error. Portfolio turnover is minimal and is the result of
index compositional changes.
Benchmark
S&P 500 Index
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. Index returns do not reflect expenses,
which have been deducted from the Fund's return. It is not possible to invest
directly in an index. Historical performance shown for Classes A, B, and C prior
to their inception is based on the performance of (1) the Fund's Class I Shares
from 7/27/1998 to the inception of Classes A, B, and C (2) the Class Y Shares of
the Fund's predecessor, CoreFund Equity Index Fund from 6/1/1991 through
7/27/1998 and (3) the Class Y Shares of the Fund's predecessor, Viking Index
Fund from 2/14/1985 through 5/31/1991. These historical returns for Classes A,
B, and C have not been adjusted to reflect the effect of each Class' 12b-1 fees.
These fees for Class A are 0.25%, for Class B are 1.00%, and for Class C are
1.00%. Neither Class Y nor Class I pays a 12b-1 fee. If these fees had been
reflected, returns would have been lower.
Historical performance shown for Class IS prior to its inception is based on the
performance of (1) the Class A Shares of the Fund's predecessor CoreFund Equity
Index Fund from 10/9/1996 to 7/27/1998(2) the Class Y Shares of the Fund's
predecessor CoreFund Equity Index Fund from 6/1/1991 to 10/8/1996 and (3) the
Class Y Shares of the Fund's predecessor Viking Index Fund from 2/14/1985
through 5/31/1991. Performance of Class Y for CoreFund Equity Index and Class Y
for Viking Index Fund has not been adjusted to reflect the effect of the 0.25%
12b-1 fee applicable to Class IS. Class Y pays no 12b-1 fee. If these fees had
been reflected, returns would have been lower.
Historical performance shown for Class I prior to its inception is based on the
performance of the Class Y Shares of the Fund's predecessors, CoreFund Equity
Index Fund from 6/1/1991 through 7/27/1998 and Viking Index Fund from 2/14/1985
through 5/31/1991.
<TABLE>
<CAPTION>
PERFORMANCE AND RETURNS
<S> <C> <C> <C> <C> <C>
Portfolio Inception
Date: 02/14/85 Class I Class IS Class A Class B Class C
Class Inception Date 02/14/85 10/09/96 11/04/98 11/03/98 04/30/99
Average Annual Returns*
1 year with sales charge n/a n/a 16.00% 16.35% 20.82%
1 year w/o sales change 22.03% 21.70% 21.79% 21.24% 21.82%
3 years 28.45% 28.29% 26.30% 27.56% 28.37%
5 years 27.08% 26.99% 25.81% 26.76% 27.04%
10 years 17.81% 17.77% 17.22% 17.74% 17.79%
Since Inception 17.37% 17.34% 16.95% 17.31% 17.35%
12-month income
dividends per share $ 0.51 $ 0.40 $ 0.27 $ 0.08 $ 0.02
12-month capital gain
distributions per share $ 3.09 $ 3.09 $ 3.09 $ 3.09 --
</TABLE>
*Adjusted for maximum sales charge, unless noted.
LONG TERM GROWTH
[LINE GRAPH APPEAR HERE]
Consumer Price Index - US S&P 500 Select Equity Index
6/30/89 1,000,000 1,000,000 1,000,000
6/30/90 1,046,728 1,164,872 1,138,696
6/30/91 1,095,890 1,251,018 1,221,475
6/30/92 1,129,734 1,418,818 1,375,315
6/30/93 1,163,570 1,612,176 1,545,742
6/30/94 1,192,587 1,634,859 1,554,175
6/30/95 1,228,848 2,061,084 1,934,016
6/30/96 1,262,232 2,596,963 2,430,943
6/30/97 1,291,700 3,498,084 3,268,126
6/30/98 1,313,457 4,553,155 4,221,307
6/30/99 1,339,243 5,589,898 5,150,282
Comparison of change in value of a $1,000,000 investment in Evergreen Select
Equity Index Fund Class I, The Consumer Price Index (CPI) and the Standard &
Poors 500 Index (S&P500).
2
<PAGE>
EVERGREEN
Select Equity Index Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO OF ERIC M. TEAL APPEARS HERE]
Eric M. Teal has managed Evergreen Select Equity Index Fund since December 1998.
Mr. Teal, vice president and quantitative equity analyst, joined FUNB in
September 1993 and currently heads the Quantitative Analysis/Portfolio
Management Unit within FUNB. He also manages Evergreen Select Diversified Value
Fund and is responsible for risk analysis and quantitative management for other
Evergreen Select Equity Funds.
Performance
We are pleased to present the first annual report for the Evergreen Select
Equity Index Fund. For the fiscal year ended June 30, 1999, the Fund's Class I
shares returned 22.03% versus 22.76% for the Standard & Poor's 500 Index (S&P
500). During the year relative results improved significantly by applying
tighter quantitative controls and reducing overall tracking error.
Portfolio
Characteristics
---------------
Total Net Assets $757,942,140
Number of Issues 497
P/E Ratio 30.4x
Beta 1.00
Investment Process
The Evergreen Select Equity Index Fund is managed to replicate the S&P 500. The
objective of the Fund is to capture the return of the benchmark with minimal
tracking error and turnover. Currently, the portfolio holds 99% of the stocks
within the S&P 500 to minimize dispersion between the Fund and the benchmark.
Our management style utilizes quantitative tools to minimize tracking error,
while free cash is invested in index futures to further minimize potential
shortfalls.
During the first six months of the fiscal year, the Fund's relative performance
fell slightly behind the benchmark due to lack of representation in certain S&P
500 stocks; however, increasing the number of holdings by approximately 10% has
reduced tracking error. The increased quantitative focus and lower tracking
error have significantly improved performance results. Year-to-date, according
to Lipper Analytical Services, the Fund ranks in the top third of the S&P 500
index funds.
Top 5 Industries
----------------
(as a percentage of net assets)
Information Services & Technology 13.8%
Healthcare Products & Services 10.6%
Finance & Insurance 9.1%
Utilities-Telephone 6.7%
Banks 6.3%
<PAGE>
EVERGREEN
Select Equity Index Fund
Portfolio Manager Commentary
Investment Highlights
Fund composition is directly affected by changes within the S&P 500. During the
past year, we have seen a significant increase in mergers and acquisition deals
among companies within the index. Consolidation in the energy sector, e.g.,
Exxon/Mobil and BP Amoco/Atlantic Richfield; the banking industry, e.g.,
Deutsche Bank/Bankers Trust and BankAmerica/Nationsbank; the communication
sector, e.g., Vodafone/Airtouch Communications; and the automotive industry,
e.g., Daimler/Chrysler, are a few areas that have created vacancies in the
index.
Some of the additions have included the internet company, America Online;
electronic retailer, Best Buy; and the brokerage firm, Paine Webber. The trend
in consolidation among large cap stocks should continue with many mergers
pending. This will allow other exciting companies that best reflect the economy
to be added to the S&P 500 and the Fund.
Top 10 Holdings
---------------
(as a percentage of net assets)
Microsoft Corp. 3.9%
General Electric Co. 3.2%
International Business Machines Corp. 2.0%
Wal-Mart Stores, Inc. 1.8%
Cisco Systems, Inc. 1.7%
Lucent Technologies, Inc. 1.7%
Intel Corp. 1.7%
Exxon Corp. 1.6%
AT&T Corp. 1.5%
Merck & Co., Inc. 1.5%
<PAGE>
EVERGREEN
Select Equity Index Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended June 30,
-----------------------------------------------------
1999 (a) 1998 (a) 1997 (a) 1996 (a)(b) 1995 (a)(b)
- --------------------------------------------------------------------------------
CLASS I
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 46.27 $ 37.39 $ 28.47 $ 23.79 $ 20.54
======== ======== ======== ======== ========
Income from investment
operations
Net investment income 0.54 0.50 0.51 0.51 0.52
Net realized and
unrealized gains on
securities and futures
contracts 8.85 10.12 9.16 5.47 4.24
-------- -------- -------- -------- --------
Total from investment
operations 9.39 10.62 9.67 5.98 4.76
-------- -------- -------- -------- --------
Distributions to
shareholders from
Net investment income (0.51) (0.50) (0.51) (0.51) (0.52)
Net realized gains (3.09) (1.24) (0.24) (0.79) (0.99)
-------- -------- -------- -------- --------
Total distributions (3.60) (1.74) (0.75) (1.30) (1.51)
-------- -------- -------- -------- --------
Net asset value, end of
period $ 52.06 $ 46.27 $ 37.39 $ 28.47 $ 23.79
======== ======== ======== ======== ========
Total return 22.03% 29.17% 34.44% 25.69% 24.45%
Ratios and supplemental
data
Net assets end of period
(thousands) $570,864 $315,920 $241,413 $166,350 $112,533
Ratios to average net
assets
Expenses* 0.30% 0.38% 0.37% 0.35% 0.37%
Net investment income 1.19% 1.19% 1.63% 1.94% 2.48%
Portfolio turnover rate 21% 12% 11% 13% 27%
</TABLE>
<TABLE>
<CAPTION>
Year Ended June 30,
-------------------------------
1999 (a) 1998 (a) 1997 (a)(c)
- ----------------------------------------------------------------------
CLASS IS
- ----------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 46.27 $ 37.37 $29.62
======= ======= ======
Income from investment operations
Net investment income 0.45 0.49 0.32
Net realized and unrealized gains on
securities and futures contracts 8.81 10.12 8.05
------- ------- ------
Total from investment operations 9.26 10.61 8.37
------- ------- ------
Distributions to shareholders from
Net investment income (0.40) (0.47) (0.38)
Net realized gains (3.09) (1.24) (0.24)
------- ------- ------
Total distributions (3.49) (1.71) (0.62)
------- ------- ------
Net asset value, end of period $ 52.04 $ 46.27 $37.37
======= ======= ======
Total return 21.70% 29.17% 28.58%
Ratios and supplemental data
Net assets end of period (thousands) $38,051 $11,944 $4,507
Ratios to average net assets
Expenses* 0.55% 0.38% 0.37%+
Net investment income 0.95% 1.19% 1.51%+
Portfolio turnover rate 21% 12% 11%
</TABLE>
(a) On July 24, 1998, the assets and liabilities of CoreFund Equity Index Fund
("CoreFund") were acquired by Evergreen Select Equity Index Fund ("Equity
Index Fund"). Shareholders of CoreFund, Class A, Class B and Class Y became
owners of that number of shares of Equity Index Fund, Class IS, Class IS
and Class I, respectively, had 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 survi-
vor, 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.
(b) On April 22, 1996, the Class A shares of CoreFund were redesignated as
Class Y shares of CoreFund.
(c) For the period from October 9, 1996 (commencement of class operations) to
June 30, 1997.
+ Annualized.
* The ratio of expenses to average net assets includes fee waivers and
excludes fee credits.
See Notes to Financial Statements.
5
<PAGE>
EVERGREEN
Select Equity Index Fund
Financial Highlights
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Period Ended
June 30, 1999 (a)
- ------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $ 45.23
=======
Income from investment operations
Net investment income 0.29
Net realized and unrealized gains on securities and futures
contracts 9.87
-------
Total from investment operations 10.16
-------
Distributions to shareholders from
Net investment income (0.27)
Net realized gains (3.09)
-------
Total distributions (3.36)
-------
Net asset value, end of period $ 52.03
=======
Total return* 24.08%
Ratios and supplemental data
Net assets end of period (thousands) $38,203
Ratios to average net assets
Expenses** 0.55%+
Net investment income 0.96%+
Portfolio turnover rate 21%
</TABLE>
<TABLE>
<CAPTION>
Period Ended
June 30, 1999 (b)
- ------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $ 45.26
========
Income from investment operations
Net investment income 0.08
Net realized and unrealized gains on securities and futures
contracts 9.83
--------
Total from investment operations 9.91
--------
Distributions to shareholders from
Net investment income (0.08)
Net realized gains (3.09)
--------
Total distributions (3.17)
--------
Net asset value, end of period $ 52.00
========
Total return* 23.44%
Ratios and supplemental data
Net assets end of period (thousands) $107,334
Ratios to average net assets
Expenses** 1.31%+
Net investment income 0.21%+
Portfolio turnover rate 21%
</TABLE>
(a) For the period from November 4, 1998 (commencement of class operations) to
June 30, 1999.
(b) For the period from November 3, 1998 (commencement of class operations) to
June 30, 1999.
+ Annualized.
* Excluding applicable sales charges.
** The ratio of expenses to average net assets includes fee waivers and ex-
cludes fee credits.
See Notes to Financial Statements.
6
<PAGE>
EVERGREEN
Select Equity Index Fund
Financial Highlights
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Period Ended
June 30, 1999 (a)
- ------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------
<S> <C>
Net asset value beginning of period $50.95
======
Income from investment operations
Net investment income 0.02
Net realized and unrealized gains on securities and futures
contracts 1.11
------
Total from investment operations 1.13
------
Distributions to shareholders from
Net investment income (0.02)
------
Total distributions (0.02)
------
Net asset value, end of period $52.06
======
Total return* 2.22%
Ratios and supplemental data
Net assets end of period (thousands) $3,489
Ratios to average net assets
Expenses** 1.31%+
Net investment income 0.27%+
Portfolio turnover rate 21%
</TABLE>
(a) For the period from April 30, 1999 (commencement of class operations) to
June 30, 1999.
+ Annualized.
* Excluding applicable sales charges.
** The ratio of expenses to average net assets includes fee waivers and ex-
cludes fee credits.
See Notes to Financial Statements.
7
<PAGE>
EVERGREEN
Select Equity Index Fund
Schedule of Investments
June 30, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS - 96.3%
Advertising & Related Services - 0.1%
8,500 Interpublic Group of Co., Inc. ......................... $ 736,313
------------
Aerospace & Defense - 1.2%
65,070 Boeing Co. ............................................. 2,875,281
7,400 General Dynamics Corp. ................................. 506,900
5,900 Goodrich (B.F.) Co. .................................... 250,750
25,800 Lockheed Martin Corp. .................................. 961,050
5,300 Northrop Grumman Corp. ................................. 351,456
20,600 Raytheon Co. Cl. B...................................... 1,449,725
11,600 Rockwell International Corp. ........................... 704,700
30,400 United Technologies Corp. .............................. 2,179,300
------------
9,279,162
------------
Automotive Equipment & Manufacturing - 1.4%
6,200 Cooper Tire & Rubber Co. ............................... 146,475
9,913 Dana Corp. ............................................. 456,617
35,515 Delphi Automotive Systems Corp. ........................ 659,247
78,100 Ford Motor Co. ......................................... 4,407,769
41,800 General Motors Corp. ................................... 2,758,800
9,100 Genuine Parts Co. ...................................... 318,500
11,280 Goodyear Tire & Rubber Co. ............................. 663,405
4,300 Johnson Controls, Inc. ................................. 298,044
5,000 *Navistar International Corp., Inc. .................... 250,000
4,000 Paccar, Inc. ........................................... 213,500
9,000 Pep Boys-Manny Moe & Jack............................... 194,625
8,000 TRW, Inc. .............................................. 439,000
------------
10,805,982
------------
Banks - 6.3%
11,250 AmSouth Bancorp......................................... 260,859
47,200 Bank of New York Co., Inc. ............................. 1,731,650
75,399 Bank One Corp. ......................................... 4,490,953
113,143 BankAmerica Corp. ...................................... 8,294,796
17,800 BankBoston Corp. ....................................... 910,025
21,800 BB&T Corp. ............................................. 799,787
54,532 Chase Manhattan Corp. .................................. 4,723,834
8,850 Comerica, Inc. ......................................... 526,022
17,250 Fifth Third Bancorp..................................... 1,148,203
64,560 **First Union Corp. .................................... 3,034,320
47,000 Firstar Corp. .......................................... 1,316,000
35,602 Fleet Financial Group, Inc. ............................ 1,579,839
11,600 Huntington Bancshares, Inc. ............................ 406,000
27,200 KeyCorp................................................. 873,800
38,600 Mellon Bank Corp. ...................................... 1,404,075
8,900 Mercantile Bancorp, Inc. ............................... 508,413
20,800 National City Corp. .................................... 1,362,400
6,600 Northern Trust Corp. ................................... 640,200
21,200 PNC Bank Corp. ......................................... 1,221,650
13,400 Regions Financial Corp. ................................ 515,063
8,500 Republic New York Corp. ................................ 579,594
10,500 SouthTrust Corp. ....................................... 402,938
9,600 State Street Corp. ..................................... 819,600
12,600 Summit Bancorp.......................................... 526,838
21,600 Suntrust Banks, Inc. ................................... 1,499,850
22,300 Synovus Financial Corp. ................................ 443,213
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS - continued
Banks - continued
11,100 Union Planters Corp. ................................... $ 496,031
46,238 US Bancorp.............................................. 1,572,092
13,800 Wachovia Corp. ......................................... 1,180,762
106,530 Wells Fargo Co. ........................................ 4,554,157
------------
47,822,964
------------
Building, Construction &
Furnishings - 0.2%
2,400 Armstrong World Industries, Inc. ....................... 138,750
2,100 Centex Corp. ........................................... 78,881
6,500 Fleetwood Enterprises, Inc. ............................ 171,844
10,000 Foster Wheeler Corp. ................................... 141,250
4,400 Kaufman & Broad Home Corp. ............................. 109,450
21,500 Masco Corp. ............................................ 620,813
2,800 Owens Corning .......................................... 96,250
4,400 Pulte Corp. ............................................ 101,475
10,700 Sherwin Williams Co. ................................... 296,925
------------
1,755,638
------------
Business Equipment & Services - 1.1%
40,845 Automatic Data Processing, Inc. ........................ 1,797,180
11,600 *Computer Sciences Corp. ............................... 802,575
5,600 De Luxe Corp. .......................................... 218,050
10,000 Dun & Bradstreet Corp. ................................. 354,375
7,400 Equifax, Inc. .......................................... 264,087
27,600 First Data Corp. ....................................... 1,350,675
11,500 Ikon Office Solutions, Inc. ............................ 172,500
16,950 Paychex, Inc. .......................................... 540,281
18,000 *Seagate Technology..................................... 461,250
7,000 *Thermo Electron Corp. ................................. 140,438
43,900 Xerox Corp. ............................................ 2,592,844
------------
8,694,255
------------
Capital Goods - 0.4%
3,800 Case Corp. ............................................. 182,875
23,100 Caterpillar, Inc. ...................................... 1,386,000
14,500 Deere & Co. ............................................ 574,563
9,800 Ingersoll Rand Co. ..................................... 633,325
------------
2,776,763
------------
Chemical & Agricultural
Products - 1.8%
14,700 Air Products & Chemicals, Inc. ......................... 591,675
14,350 Dow Chemical Co. ....................................... 1,820,656
72,700 Du Pont (E. I.) De Nemours & Co. ....................... 4,966,319
4,000 Eastman Chemical Co. ................................... 207,000
8,300 Engelhard Corp. ........................................ 187,787
2,400 *FMC Corp. ............................................. 163,950
9,900 *Grace (W.R.) & Co. .................................... 181,912
5,500 Great Lakes Chemical Corp. ............................. 253,344
6,700 Hercules, Inc. ......................................... 263,394
40,400 Monsanto Co. ........................................... 1,593,275
6,400 Nalco Chemical Co. ..................................... 332,000
14,200 Pioneer Hi-Bred International, Inc. .................... 552,912
11,400 PPG Industries, Inc. ................................... 673,312
12,100 Praxair, Inc. .......................................... 592,144
12,075 Rohm & Haas Co. ........................................ 517,716
</TABLE>
8
<PAGE>
EVERGREEN
Select Equity Index Fund
Schedule of Investments(continued)
June 30, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS - continued
Chemical & Agricultural
Products - continued
5,000 Sigma-Aldrich Corp. .................................... $ 172,188
7,700 Union Carbide Corp. .................................... 375,375
------------
13,444,959
------------
Communication Systems &
Services - 5.1%
13,100 *Andrew Corp. .......................................... 248,081
205,600 *Cisco Systems, Inc. ................................... 13,222,650
195,990 Lucent Technologies, Inc. .............................. 13,217,076
120,600 *MCI WorldCom, Inc. .................................... 10,379,138
25,700 *Tellabs, Inc. ......................................... 1,736,356
------------
38,803,301
------------
Consumer Products & Services - 3.5%
6,300 Alberto Culver Co. Cl. B................................ 167,738
5,000 American Greetings Corp. Cl. A.......................... 150,625
16,200 Avon Products, Inc. .................................... 899,100
5,900 Black & Decker Corp. ................................... 372,437
47,802 *Cendant Corp. ......................................... 979,941
7,900 Clorox Co. ............................................. 843,819
18,792 Colgate-Palmolive Co. .................................. 1,855,710
20,700 Eastman Kodak Co. ...................................... 1,402,425
15,400 Fort James Corp. ....................................... 583,275
70,000 Gillette Co. ........................................... 2,870,000
6,200 H & R Block, Inc. ...................................... 310,000
9,900 Hasbro, Inc. ........................................... 276,581
9,800 International Flavors & Fragrances, Inc. ............... 434,875
10,200 Jostens, Inc. .......................................... 214,838
3,300 Liz Claiborne, Inc. .................................... 120,450
23,850 Mattel, Inc. ........................................... 630,534
6,000 Maytag Corp. ........................................... 418,125
18,191 Newell Rubbermaid, Inc. ................................ 845,881
17,600 Nike, Inc. Cl. B........................................ 1,114,300
7,500 Polaroid Corp. ......................................... 207,188
87,100 Procter & Gamble Co. ................................... 7,773,675
15,000 Service Corp. International............................. 288,750
6,600 Stanley Works........................................... 212,438
8,000 Tupperware Corp. ....................................... 204,000
32,675 Unilever NV............................................. 2,279,081
10,400 UST, Inc. .............................................. 304,200
5,600 Whirlpool Corp. ........................................ 414,400
------------
26,174,386
------------
Diversified Companies - 1.6%
34,700 Allied Signal, Inc. .................................... 2,186,100
5,200 Cooper Industries, Inc. ................................ 270,400
3,400 Fluor Corp. ............................................ 137,700
7,900 Harris Corp. ........................................... 309,581
5,200 ITT Industries, Inc. ................................... 198,250
26,100 Minnesota Mining & Manufacturing Co. ................... 2,269,069
5,500 National Service Industries, Inc. ...................... 198,000
7,800 *Owens Illinois, Inc. .................................. 254,963
9,100 Raychem Corp. .......................................... 336,700
8,600 Tenneco, Inc. .......................................... 205,325
10,000 Textron, Inc. .......................................... 823,125
53,159 Tyco International Ltd. ................................ 5,036,815
------------
12,226,028
------------
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COMMON STOCKS - continued
Electrical Equipment & Services - 4.1%
13,400 *Data General Corp. .................................... $ 195,137
29,100 Emerson Electric Co. ................................... 1,829,662
212,200 General Electric Co. ................................... 23,978,600
39,400 Motorola, Inc. ......................................... 3,733,150
15,300 *Solectron Corp. ....................................... 1,020,319
4,100 Tektronix, Inc. ........................................ 123,769
4,400 Thomas & Betts Corp. ................................... 207,900
------------
31,088,537
------------
Electronic Equipment & Services - 0.6%
6,400 *KLA-Tencor Corp. ...................................... 415,200
14,500 *Micron Technology, Inc. ............................... 584,531
25,300 Texas Instruments, Inc. ................................ 3,668,500
------------
4,668,231
------------
Energy - 0.1%
19,400 Occidental Petroleum Corp. ............................. 409,825
------------
Environmental Services - 0.3%
4,200 Millipore Corp. ........................................ 170,363
40,120 Waste Management, Inc. ................................. 2,156,450
------------
2,326,813
------------
Finance & Insurance - 9.1%
10,208 Aetna, Inc. ............................................ 912,978
16,700 AFLAC, Inc. ............................................ 799,512
53,400 Allstate Corp. ......................................... 1,915,725
29,300 American Express Co. ................................... 3,812,662
15,916 American General Corp. ................................. 1,199,668
80,521 American International Group, Inc. ..................... 9,425,990
16,125 Aon Corp. .............................................. 665,156
45,448 Associates First Capital Corp. Cl. A.................... 2,013,914
6,510 Bear Stearns Cos, Inc. ................................. 304,343
14,800 Capital One Financial Corp. ............................ 824,175
10,500 Chubb Corp. ............................................ 729,750
13,000 CIGNA Corp. ............................................ 1,157,000
10,400 Cincinnati Financial Corp. ............................. 390,650
219,093 Citigroup, Inc. ........................................ 10,406,917
19,607 Conseco, Inc. .......................................... 596,788
7,500 Countrywide Credit Industries, Inc. .................... 320,625
44,800 Federal Home Loan Mortgage Corp. ....................... 2,598,400
65,200 Federal National Mortgage Assoc. ....................... 4,458,050
15,100 Franklin Resources, Inc. ............................... 613,438
13,800 Hartford Financial Services Group, Inc. ................ 804,712
31,359 Household International, Inc. .......................... 1,485,633
11,000 J.P. Morgan & Co., Inc. ................................ 1,545,500
7,800 Jefferson Pilot Corp. .................................. 516,263
8,800 Lehman Brothers Holdings, Inc. ......................... 547,800
12,000 Lincoln National Corp. ................................. 627,750
7,000 Loews Corp. ............................................ 553,875
16,000 Marsh & McLennan Co., Inc. ............................. 1,208,000
7,800 MBIA, Inc. ............................................. 505,050
52,630 MBNA Corp. ............................................. 1,611,794
25,800 Merrill Lynch & Co., Inc. .............................. 2,062,387
7,500 MGIC Investment Corp. .................................. 364,688
36,300 Morgan Stanley, Dean Witter & Co. ...................... 3,720,750
8,200 Paine Webber Group, Inc. ............................... 383,350
10,500 Potlatch Corp. ......................................... 461,344
</TABLE>
9
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June 30, 1999
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COMMON STOCKS - continued
Finance & Insurance - continued
4,700 Progressive Corp. Ohio.................................. $ 681,500
10,900 Provident Co., Inc. .................................... 436,000
9,100 Providian Financial Corp. .............................. 850,850
11,900 SAFECO Corp. ........................................... 525,088
27,400 Schwab (Charles) & Co., Inc. ........................... 3,010,575
10,100 SLM Holding Corp. ...................................... 462,706
15,916 St. Paul Companies, Inc. ............................... 506,328
7,100 Torchmark Corp. ........................................ 242,288
7,200 Transamerica Corp. ..................................... 540,000
7,800 UNUM Corp. ............................................. 427,050
41,310 Washington Mutual, Inc. ................................ 1,461,341
------------
68,688,363
------------
Food & Beverage Products - 6.1%
25,795 Albertsons, Inc. ....................................... 1,330,055
32,300 Anheuser Busch Companies, Inc. ......................... 2,291,281
42,640 Archer Daniels Midland Co. ............................. 658,255
19,000 Bestfoods............................................... 940,500
3,700 Brown Forman Corp. Cl. B................................ 241,194
31,300 Campbell Soup Co. ...................................... 1,451,537
159,110 Coca Cola Co. .......................................... 9,944,375
28,800 Coca Cola Enterprises, Inc. ............................ 856,800
35,400 Conagra, Inc. .......................................... 942,525
3,500 Coors Adolph Co. Cl. B.................................. 173,250
10,500 Darden Restaurants, Inc. ............................... 229,031
12,000 Fortune Brands, Inc. ................................... 496,500
9,400 General Mills, Inc. .................................... 755,525
9,100 Great Atlantic & Pacific Tea, Inc. ..................... 307,694
23,450 H.J. Heinz Co. ......................................... 1,175,431
8,200 Hershey Foods Corp. .................................... 486,875
27,900 Kellogg Co. ............................................ 920,700
52,800 *Kroger Co. ............................................ 1,475,100
87,500 McDonald's Corp. ....................................... 3,614,844
24,000 Nabisco Group Holding Corp. ............................ 469,500
95,200 Pepsico, Inc. .......................................... 3,683,050
154,800 Philip Morris Companies, Inc. .......................... 6,221,025
7,900 Quaker Oats Co. ........................................ 524,362
22,700 Ralston Purina Co. ..................................... 690,931
32,600 *Safeway, Inc. ......................................... 1,613,700
57,700 Sara Lee Corp. ......................................... 1,309,069
26,400 Seagram Co. Ltd. ....................................... 1,329,900
19,100 Sysco Corp. ............................................ 569,419
10,000 *Tricon Global Restaurants, Inc. ....................... 541,250
5,800 Wendy's International, Inc. ............................ 164,213
8,500 Winn Dixie Stores, Inc. ................................ 313,969
6,900 Wrigley (WM.) Junior Co. ............................... 621,000
------------
46,342,860
------------
Forest Products - 0.0%
5,800 Willamette Industries, Inc. ............................ 267,163
------------
Gold Mining - 0.0%
49,400 *Battle Mountain Gold Co. .............................. 120,412
13,300 Homestake Mining Co. ................................... 108,894
------------
229,306
------------
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COMMON STOCKS - continued
Healthcare Products &
Services - 10.6%
99,100 Abbott Laboratories..................................... $ 4,509,050
4,300 Allergan, Inc. ......................................... 477,300
6,400 *Alza Corp. ............................................ 325,600
84,400 American Home Products Corp. ........................... 4,853,000
33,500 *Amgen, Inc. ........................................... 2,039,312
4,400 Bard C R, Inc. ......................................... 210,375
3,800 Bausch & Lomb, Inc. .................................... 290,700
18,100 Baxter International, Inc. ............................. 1,097,312
5,700 Biomet, Inc. ........................................... 226,575
27,100 *Boston Scientific Corp. ............................... 1,190,706
128,800 Bristol-Myers Squibb Co. ............................... 9,072,350
18,700 Cardinal Health, Inc. .................................. 1,199,137
37,950 Columbia/HCA Healthcare Corp. .......................... 865,734
18,100 *Guidant Corp. ......................................... 931,019
7,600 *HCR Manor Care, Inc. .................................. 183,825
25,300 *HEALTHSOUTH Corp. ..................................... 377,919
22,200 *Humana, Inc. .......................................... 287,213
18,200 IMS Health, Inc. ....................................... 568,750
87,200 Johnson & Johnson....................................... 8,545,600
1,997 *LifePoint Hospitals, Inc. ............................. 26,835
72,400 Lilly (Eli) & Co. ...................................... 5,185,650
6,500 Mallinckrodt, Inc. ..................................... 236,438
17,829 McKesson HBOC, Inc. .................................... 572,757
36,800 Medtronic, Inc. ........................................ 2,865,800
153,100 Merck & Co., Inc. ...................................... 11,329,400
4,000 PE Corp-PE Biosystems Group............................. 459,000
84,100 Pfizer, Inc. ........................................... 9,229,975
33,755 Pharmacia & Upjohn, Inc. ............................... 1,917,706
94,900 Schering-Plough Corp. .................................. 5,029,700
4,300 Shared Medical System Corp. ............................ 280,575
5,200 *St. Jude Medical, Inc. ................................ 185,250
20,000 *Tenet Healthcare Corp. ................................ 371,250
11,400 United Healthcare Corp. ................................ 713,925
54,300 Warner-Lambert Co. ..................................... 3,767,062
7,800 *Watson Pharmaceuticals, Inc. .......................... 273,488
3,500 *Wellpoint Health Networks, Inc. Cl. A.................. 297,062
------------
79,993,350
------------
Industrial Specialty Products & Services - 1.0%
7,300 *Advanced Micro Devices, Inc. .......................... 131,856
4,000 Bemis Co., Inc. ........................................ 159,000
8,800 Browning Ferris Industries, Inc. ....................... 378,400
15,400 Corning, Inc. .......................................... 1,079,925
4,675 Crane Co. .............................................. 146,970
5,600 Cummins Engine, Inc. ................................... 319,900
7,700 Danaher Corp. .......................................... 447,563
13,300 Dover Corp. ............................................ 465,500
4,400 Eaton Corp. ............................................ 404,800
10,500 Ecolab, Inc. ........................................... 458,062
4,500 EG&G, Inc. ............................................. 160,313
7,800 Honeywell, Inc. ........................................ 903,825
15,700 Illinois Tool Works, Inc. .............................. 1,287,400
10,400 McDermott International, Inc. .......................... 293,800
</TABLE>
10
<PAGE>
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Schedule of Investments(continued)
June 30, 1999
<TABLE>
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COMMON STOCKS - continued
Industrial Specialty Products & Services - continued
1,400 Nacco Industries, Inc. Cl. A............................ $ 102,900
5,700 Pall Corp. ............................................. 126,469
5,275 Parker Hannifin Corp. .................................. 241,331
3,700 Snap-on, Inc. .......................................... 133,894
6,300 Timken Co. ............................................. 122,850
------------
7,364,758
------------
Information Services &
Technology - 13.8%
25,100 *3Com Corp. ............................................ 669,856
4,700 Adobe Systems, Inc. .................................... 386,134
70,000 *America Online, Inc. .................................. 7,735,000
11,100 *Apple Computer......................................... 514,069
23,500 *Applied Materials, Inc. ............................... 1,736,062
5,000 Autodesk, Inc. ......................................... 147,813
14,900 *BMC Software, Inc. .................................... 804,600
20,500 *Cabletron Systems, Inc. ............................... 266,500
7,200 *Ceridian Corp. ........................................ 235,350
107,285 Compaq Computer Corp. .................................. 2,541,313
34,875 Computer Associates International, Inc. ................ 1,918,125
23,500 *Compuware Corp. ....................................... 747,594
164,500 *Dell Computer Corp. ................................... 6,086,500
32,500 Electronic Data Systems Corp. .......................... 1,838,281
64,610 *EMC Corp. ............................................. 3,553,550
8,800 *Gateway, Inc. ......................................... 519,200
66,800 Hewlett-Packard Co. .................................... 6,713,400
214,400 Intel Corp. ............................................ 12,756,800
118,700 International Business Machines Corp. .................. 15,341,975
8,800 *LSI Logic.............................................. 405,900
331,100 *Microsoft Corp. ....................................... 29,861,081
17,500 *National Semiconductor Corp. .......................... 442,969
4,600 *Network Appliance, Inc. ............................... 257,025
20,200 *Novell, Inc. .......................................... 535,300
91,093 *Oracle Systems Corp. .................................. 3,381,828
13,700 *Parametric Technology Corp. ........................... 190,088
11,700 *Peoplesoft, Inc. ...................................... 201,825
20,300 *Silicon Graphics, Inc. ................................ 332,413
49,900 *Sun Microsystems, Inc. ................................ 3,436,862
17,100 *Unisys Corp. .......................................... 665,831
------------
104,223,244
------------
Leisure & Tourism - 0.3%
5,600 Brunswick Corp. ........................................ 156,100
40,600 Carnival, Corp. Cl. A................................... 1,969,100
13,100 Hilton Hotels Corp. .................................... 185,856
13,400 *Mirage Resorts, Inc. .................................. 224,450
------------
2,535,506
------------
Metals & Mining - 0.1%
30,700 Barrick Gold Corp. ..................................... 594,813
8,470 Newmont Mining Corp. ................................... 168,341
------------
763,154
------------
Machinery - Diversified - 0.0%
6,700 Milacron, Inc. ......................................... 123,950
------------
</TABLE>
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COMMON STOCKS - continued
Manufacturing - Distributing - 0.0%
1,500 Briggs & Stratton Corp. ................................ $ 86,625
------------
Metal Products & Services - 0.6%
12,500 Alcan Aluminum Ltd. .................................... 399,219
22,600 Alcoa, Inc. ............................................ 1,398,375
12,300 Allegheny Teldyne, Inc. ................................ 278,287
6,500 Asarco, Inc. ........................................... 122,281
15,000 Becton Dickinson & Co. ................................. 450,000
8,200 Crown Cork & Seal Co., Inc. ............................ 233,700
11,600 Cyprus Amax Minerals Co. ............................... 176,175
16,000 Freeport McMoran Copper & Gold, Inc. Cl. B.............. 287,000
7,600 Inco Ltd. .............................................. 136,800
4,400 Nucor Corp. ............................................ 208,725
2,900 Phelps Dodge Corp. ..................................... 179,619
17,400 Placer Dome, Inc. ...................................... 205,538
3,500 Reynolds Metals Co. .................................... 206,500
8,000 USX United States Steel Group........................... 216,000
4,800 Worthington Industries, Inc. ........................... 78,900
------------
4,577,119
------------
Office Equipment & Supplies - 0.1%
16,900 Pitney Bowes, Inc. ..................................... 1,085,825
------------
Oil/Energy - 5.5%
4,600 Amerada Hess Corp. ..................................... 273,700
8,100 Anadarko Petroleum Corp. ............................... 298,181
6,800 Apache Corp. ........................................... 265,200
3,900 Ashland, Inc. .......................................... 156,488
21,400 Atlantic Richfield Co. ................................. 1,788,237
9,900 Burlington Resources, Inc. ............................. 428,175
42,500 Chevron Corp. .......................................... 4,045,469
16,000 Coastal Corp. .......................................... 640,000
6,000 Consolidated Natural Gas Co. ........................... 364,500
7,500 Constellation Energy Group, Inc. ....................... 222,188
22,300 Enron Corp. ............................................ 1,823,025
157,500 Exxon Corp. ............................................ 12,147,187
7,292 Kerr-McGee Corp. ....................................... 365,967
50,300 Mobil Corp. ............................................ 4,979,700
14,800 Phillips Petroleum Co. ................................. 744,625
20,000 Reliant Energy, Inc. ................................... 552,500
139,000 Royal Dutch Petroleum Co. .............................. 8,374,750
5,000 Sonat, Inc. ............................................ 165,625
4,700 Sunoco, Inc. ........................................... 141,881
35,400 Texaco, Inc. ........................................... 2,212,500
14,629 Union Pacific Resource Group, Inc. ..................... 238,636
14,000 Unocal Corp. ........................................... 554,750
22,300 USX Marathon Group...................................... 726,144
------------
41,509,428
------------
Oil Field Services - 0.6%
20,000 Baker Hughes, Inc. ..................................... 670,000
28,400 Halliburton Co. ........................................ 1,285,100
2,500 Helmerich & Payne, Inc. ................................ 59,531
14,900 *Rowan Cos, Inc. ....................................... 274,719
35,600 Schlumberger Ltd. ...................................... 2,267,275
------------
4,556,625
------------
</TABLE>
11
<PAGE>
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Schedule of Investments(continued)
June 30, 1999
<TABLE>
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COMMON STOCKS - continued
Paper & Packaging - 0.9%
7,400 Avery Dennison Corp. .................................. $ 446,775
2,800 Ball Corp. ............................................ 118,300
4,200 Boise Cascade Corp. ................................... 180,075
4,800 Champion International Corp. .......................... 229,800
10,800 Georgia-Pacific Corp. ................................. 511,650
26,444 International Paper Co. ............................... 1,335,422
34,104 Kimberly-Clark Corp. .................................. 1,943,928
10,100 Louisiana Pacific Corp. ............................... 239,875
7,400 Mead Corp. ............................................ 308,950
5,361 *Sealed Air Corp. ..................................... 347,795
2,800 Temple Inland, Inc. ................................... 191,100
5,000 Westvaco Corp. ........................................ 145,000
13,006 Weyerhaeuser Co. ...................................... 894,162
------------
6,892,832
------------
Printing, Publishing, Broadcasting & Entertainment -
3.0%
44,400 *CBS Corp. ............................................ 1,928,625
20,800 *Clear Channel Communications, Inc. ................... 1,433,900
48,900 Comcast Corp. Cl. A.................................... 1,879,594
132,778 Disney (Walt) Co. ..................................... 4,091,222
6,800 Donnelley (R.R.) & Sons Co. ........................... 252,025
7,900 Dow Jones & Co., Inc. ................................. 419,194
18,300 Gannett Co., Inc. ..................................... 1,306,162
9,300 *Harrahs Entertainment, Inc. .......................... 204,600
7,200 *King World Productions, Inc. ......................... 250,650
4,000 Knight-Ridder, Inc. ................................... 219,750
12,000 McGraw-Hill Companies, Inc. ........................... 647,250
4,500 Meredith Corp. ........................................ 155,813
12,200 New York Times Co. Cl. A............................... 449,112
11,500 Omnicom Group, Inc. ................................... 920,000
78,800 Time Warner, Inc. ..................................... 5,791,800
4,000 Times Mirror Co. Ser. A................................ 237,000
7,000 Tribune Co. ........................................... 609,875
44,552 *Viacom, Inc. Cl. B.................................... 1,960,288
------------
22,756,860
------------
Real Estate - 0.1%
14,600 Marriott International, Inc. Cl. A..................... 545,675
------------
Retailing & Wholesale - 5.7%
7,700 *Autozone, Inc. ....................................... 231,963
11,000 *Best Buy Co., Inc. ................................... 720,665
6,100 Circuit City Stores, Inc. ............................. 567,300
5,000 *Consolidated Stores Corp. ............................ 135,000
15,400 *Costco Companies, Inc. ............................... 1,232,962
27,100 CVS Corp. ............................................. 1,375,325
28,700 Dayton Hudson Corp. ................................... 1,865,500
8,400 Dillards, Inc. Cl. A................................... 295,050
11,625 Dollar General Corp. .................................. 337,125
13,400 *Federated Department Stores, Inc. .................... 709,363
57,200 Gap, Inc. ............................................. 2,881,450
3,600 Harcourt General, Inc. ................................ 185,625
95,498 Home Depot, Inc. ...................................... 6,153,652
18,300 J. C. Penney Co., Inc. ................................ 888,694
34,750 *K Mart Corp. ......................................... 571,203
</TABLE>
<TABLE>
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COMMON STOCKS - continued
Retailing & Wholesale - continued
10,000 *Kohl's Corp. .......................................... $ 771,875
14,094 Limited, Inc. .......................................... 639,515
4,000 Longs Drug Stores Corp. ................................ 138,250
23,800 Lowe's Companies, Inc. ................................. 1,349,162
20,700 May Department Stores Co. .............................. 846,112
9,500 Nordstrom, Inc. ........................................ 318,250
24,100 *Office Depot, Inc. .................................... 531,706
8,000 Reebok International Ltd. .............................. 149,000
14,700 Rite Aid Corp. ......................................... 361,988
3,100 Russell Corp. .......................................... 60,450
25,900 Sears, Roebuck & Co. ................................... 1,154,169
27,950 *Staples, Inc. ......................................... 864,703
9,000 Supervalu, Inc. ........................................ 231,188
12,000 Tandy Corp. ............................................ 586,500
19,700 TJX Co., Inc. .......................................... 656,256
15,800 *Toys R Us, Inc. ....................................... 326,863
6,000 W.W. Grainger, Inc. .................................... 322,875
289,390 Wal-Mart Stores, Inc. .................................. 13,963,067
62,800 Walgreen Co. ........................................... 1,844,750
------------
43,267,556
------------
Telecommunication Services & Equipment - 1.0%
9,300 Centurytel, Inc. ....................................... 369,675
9,400 *General Instrument Corp. .............................. 399,500
38,100 *MediaOne Group, Inc. .................................. 2,833,687
42,800 Nortel Networks Corp ................................... 3,715,575
7,200 Scientific Atlanta, Inc. ............................... 259,200
------------
7,577,637
------------
Textile & Apparel - 0.1%
7,400 *Fruit Of The Loom Ltd. Cl. A........................... 72,150
7,900 V. F. Corp. ............................................ 337,725
------------
409,875
------------
Thrift Institutions - 0.1%
4,700 Golden West Financial Corp. ............................ 460,600
------------
Transportation - 0.9%
11,200 *AMR Corp. ............................................. 764,400
28,092 Burlington Northern Santa Fe Corp. ..................... 870,852
12,900 CSX Corp. .............................................. 584,531
9,000 Delta Air Lines, Inc. .................................. 518,625
18,000 *FDX Corp. ............................................. 976,500
6,500 Kansas City Southern Industries, Inc. .................. 414,781
24,000 Laidlaw, Inc. .......................................... 177,000
25,600 Norfolk Southern Corp. ................................. 771,200
6,200 Ryder Systems, Inc. .................................... 161,200
23,000 Southwest Airlines Co. ................................. 715,875
17,600 Union Pacific Corp. .................................... 1,026,300
4,400 *US Airways Group, Inc. ................................ 191,675
------------
7,172,939
------------
Utilities - Electric - 1.8%
13,900 *AES Corp. ............................................. 807,937
6,900 Ameren Corp. ........................................... 264,788
14,100 American Electric Power Co., Inc. ...................... 529,631
</TABLE>
12
<PAGE>
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Schedule of Investments(continued)
June 30, 1999
<TABLE>
<CAPTION>
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COMMON STOCKS - continued
Utilities - Electric - continued
9,100 Carolina Power & Light Co. ............................. $ 389,594
8,500 Cinergy Corp. .......................................... 272,000
6,300 CMS Energy Corp. ....................................... 263,813
16,700 Consolidated Edison, Inc. .............................. 755,675
14,900 Dominion Resources, Inc. ............................... 645,356
10,300 DTE Energy Co. ......................................... 412,000
24,286 Duke Power Co. ......................................... 1,320,551
21,800 Edison International.................................... 583,150
14,400 Entergy Corp. .......................................... 450,000
17,200 Firstenergy Corp. ...................................... 533,200
6,300 Florida Progress Corp. ................................. 260,269
13,000 FPL Group, Inc. ........................................ 710,125
6,400 GPU, Inc. .............................................. 270,000
5,800 New Century Energies, Inc. ............................. 225,113
12,600 *Niagara Mohawk Holdings, Inc. ......................... 202,388
7,700 Northern State Power Corp. ............................. 186,244
16,500 PacifiCorp.............................................. 303,187
13,300 PECO Energy Co. ........................................ 556,937
23,700 PG & E Corp. .......................................... 770,250
7,600 PP&L Resources, Inc. ................................... 233,700
12,500 Public Service Enterprise Group, Inc. .................. 510,937
12,114 Sempra Energy........................................... 274,079
45,100 Southern Co. ........................................... 1,195,150
18,185 Texas Utilities Co. .................................... 750,131
------------
13,676,205
------------
Utilities - Gas - 0.3%
4,250 Columbia Energy Group................................... 266,422
4,600 NICOR, Inc. ............................................ 175,087
6,300 Oneok, Inc. ............................................ 200,025
5,200 Peoples Energy Corp. ................................... 195,975
27,900 Williams Companies, Inc. ............................... 1,187,494
------------
2,025,003
------------
Utilities - Telephone - 6.7%
17,500 ALLTEL Corp. ........................................... 1,251,250
70,900 Ameritech Corp. ........................................ 5,211,150
205,127 AT&T Corp. ............................................. 11,448,650
99,624 Bell Atlantic Corp. .................................... 6,512,919
124,900 BellSouth Corp. ........................................ 5,854,687
10,200 Frontier Corp. ......................................... 601,800
64,500 GTE Corp. .............................................. 4,885,875
18,500 *Nextel Communications, Inc. Cl. A...................... 928,469
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS - continued
Utilities - Telephone - continued
128,372 SBC Communications, Inc. .......................... $ 7,445,576
56,800 Sprint Corp. ...................................... 2,999,750
28,900 *Sprint Corp. (PCS Group).......................... 1,650,913
34,295 U.S. West, Inc. ................................... 2,014,831
------------
50,805,870
------------
Utilities - 0.1%
10,700 Central & South West Corp. ........................ 250,113
16,000 Unicom Corp. ...................................... 617,000
------------
867,113
------------
Total Common Stocks (cost $502,156,920)............ 729,818,598
------------
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount
- --------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS - 4.2%
Repurchase Agreement - 4.0%
$30,608,940 Dresdner Bank AG 4.75%, purchased 6/30/1999,
maturing 7/1/1999,
maturity value $30,612,979
(cost $30,608,940)(a)............................. $ 30,608,940
------------
U.S. Government Agency Obligations - 0.2%
United States Treasury Bills+
167,000 4.27%, 7/8/1999.................................... 166,861
10,000 4.43%, 7/22/1999................................... 9,974
480,000 4.48%, 8/19/1999................................... 477,070
130,000 4.48%, 9/2/1999.................................... 128,981
230,000 4.51%, 8/26/1999................................... 228,386
290,000 4.52%, 9/16/1999................................... 287,196
70,000 4.535%, 8/26/1999.................................. 69,506
25,000 4.59%, 9/16/1999................................... 24,755
110,000 4.61%, 9/23/1999................................... 108,817
------------
1,501,546
------------
Total Short-Term Investments
(cost $32,110,486)................................ 32,110,486
------------
Total Investments -
(cost $534,267,406)........................ 100.5% 761,929,084
Other Assets and
Liabilities - net.......................... (0.5) (3,986,944)
----- ------------
Net Assets.................................. 100.0% $757,942,140
===== ============
</TABLE>
13
<PAGE>
EVERGREEN
Select Equity Index Fund
Schedule of Investments(continued)
June 30, 1999
(a) At June 30, 1999, the repurchase agreement was collateralized by:
$8,350,000 U.S. Treasury Notes, 6.625%, 4/30/2002; value including accrued
interest - $8,619,135. $154,000 U.S. Treasury Notes, 6.50%, 5/31/2002;
value including accrued interest - $157,708. $875,000 U.S. Treasury Notes,
6.375%, 8/15/2002; value including accrued interest - $908,927. $30,000
U.S. Treasury Notes, 5.50%, 1/31/2003; value including accrued interest -
$30,337. $10,000,000 U.S. Treasury Notes, 5.50%, 2/28/2003; value includ-
ing accrued interest - $10,060,437. $792,000 U.S. Treasury Notes, 5.75%,
4/30/2003; value including accrued interest - $795,834. $65,000 U.S. Trea-
sury Notes, 5.50%, 5/31/2003; value including accrued interest - $64,419.
$1,100,000 U.S. Treasury Notes, 5.375%, 6/30/2003; value including accrued
interest - $1,080,409. $900,000 U.S. Treasury Notes, 5.75%, 8/15/2003;
value including accrued interest - $914,241. $50,000 U.S. Treasury Notes,
4.25%, 11/15/2003; value including accrued interest - $47,156. $4,610,000
U.S. Treasury Notes, 4.75%, 2/15/2004; value including accrued interest -
$4,483,607. $3,277,000 U.S. Treasury Notes, 5.25%, 5/15/2004; value in-
cluding accrued interest - $3,219,741. $509,000 U.S. Treasury Notes, 7.25%,
8/15/2004; value including accrued interest - $551,551. $265,000 U.S. Trea-
sury Notes, 7.875%, 11/15/2004; value including accrued interest -
$290,547.
* Non-income producing security.
** At June 30, 1999, the Fund owned 64,560 shares of First Union Corp. common
stock, an affiliated issuer, with cost of $2,995,456. During the year ended
June 30, 1999, the Fund earned $74,261 in dividend income from this invest-
ment. This investment in First Union Corp. enables the Fund to maintain a
similar weighting as that of the S&P 500 Index.
+ Securities are being held in a segregated account at the Fund's custodian
for initial margin deposits on open future contracts.
Futures Contracts:
<TABLE>
<CAPTION>
Number of Unrealized
Contracts Description Position Cost Market Value Gain
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
71 S&P September 1999 Long $23,436,447 $24,525,175 $1,088,728
=========== =========== ==========
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
EVERGREEN
Select Equity Index Fund
Statement of Assets and Liabilities
June 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets
Identified cost of securities.................................... $534,267,406
Net unrealized gains on securities............................... 227,661,678
- --------------------------------------------------------------------------------
Market value of securities....................................... 761,929,084
Receivable for securities sold................................... 3,624,929
Receivable for Fund shares sold.................................. 2,449,471
Dividends and interest receivable................................ 623,761
Receivable for daily variation margin on open futures contracts.. 443,750
Prepaid expenses and other assets................................ 59,157
- --------------------------------------------------------------------------------
Total assets.................................................... 769,130,152
- --------------------------------------------------------------------------------
Liabilities
Payable for securities purchased................................. 10,707,556
Payable for Fund shares redeemed................................. 223,234
Advisory fee payable............................................. 62,653
Distribution Plan expenses payable............................... 34,299
Due to other related parties..................................... 14,656
Accrued expenses and other liabilities........................... 145,614
- --------------------------------------------------------------------------------
Total liabilities............................................... 11,188,012
- --------------------------------------------------------------------------------
Net assets........................................................ $757,942,140
- --------------------------------------------------------------------------------
Net assets represented by
Paid-in capital.................................................. $525,808,429
Undistributed net investment income.............................. 506,359
Accumulated net realized gains on securities and futures
contracts....................................................... 2,876,946
Net unrealized gains on securities and futures contracts......... 228,750,406
- --------------------------------------------------------------------------------
Total net assets................................................ $757,942,140
- --------------------------------------------------------------------------------
Net assets consists of
Class I.......................................................... $570,864,134
Class IS......................................................... 38,051,115
Class A.......................................................... 38,203,130
Class B.......................................................... 107,334,415
Class C.......................................................... 3,489,346
- --------------------------------------------------------------------------------
Total net assets................................................ $757,942,140
- --------------------------------------------------------------------------------
Shares outstanding
Class I.......................................................... 10,966,013
Class IS......................................................... 731,160
Class A.......................................................... 734,257
Class B.......................................................... 2,064,166
Class C.......................................................... 67,023
- --------------------------------------------------------------------------------
Net asset value per share
Class I.......................................................... $ 52.06
- --------------------------------------------------------------------------------
Class IS......................................................... $ 52.04
- --------------------------------------------------------------------------------
Class A.......................................................... $ 52.03
- --------------------------------------------------------------------------------
Class A -- Offering price (based on sales charge of 4.75%)....... $ 54.62
- --------------------------------------------------------------------------------
Class B.......................................................... $ 52.00
- --------------------------------------------------------------------------------
Class C.......................................................... $ 52.06
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
EVERGREEN
Select Equity Index Fund
Statement of Operations
Year Ended June 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income
Dividends (net of foreign withholding taxes of $78,048).......... $ 6,146,395
Interest......................................................... 587,710
- -------------------------------------------------------------------------------
Total investment income.......................................... 6,734,105
- -------------------------------------------------------------------------------
Expenses
Advisory fee..................................................... 1,802,977
Distribution Plan expenses....................................... 352,797
Administrative services fees..................................... 108,317
Transfer agent fee............................................... 190,933
Custodian fee.................................................... 193,442
Registration and filing fees..................................... 149,170
Other............................................................ 100,227
- -------------------------------------------------------------------------------
Total expenses................................................... 2,897,863
- -------------------------------------------------------------------------------
Less: Fee credits................................................. (20,140)
Fee waivers and expense reimbursements.......................... (1,159,599)
- -------------------------------------------------------------------------------
Net expenses..................................................... 1,718,124
- -------------------------------------------------------------------------------
Net investment income............................................ 5,015,981
- -------------------------------------------------------------------------------
Net realized and unrealized gains on securities and futures
contracts
Net realized gains:
Securities....................................................... 17,694,111
Futures contracts................................................ 1,424,744
- -------------------------------------------------------------------------------
Net realized gains on securities and futures contracts........... 19,118,855
- -------------------------------------------------------------------------------
Net change in unrealized gains on securities and futures
contracts....................................................... 69,198,431
- -------------------------------------------------------------------------------
Net realized and unrealized gains on securities and futures
contracts....................................................... 88,317,286
- -------------------------------------------------------------------------------
Net increase in net assets resulting from operations.............. $93,333,267
- -------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
EVERGREEN
Select Equity Index Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended June 30,
--------------------------
1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income............................ $ 5,015,981 $ 3,413,675
Net realized gains on securities and futures
contracts....................................... 19,118,855 8,187,482
Net change in unrealized gains on securities and
futures contracts............................... 69,198,431 61,048,757
- -------------------------------------------------------------------------------
Net increase in net assets resulting from
operations...................................... 93,333,267 72,649,914
- -------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income
Class I.......................................... (4,162,159) (3,273,106)
Class IS......................................... (242,056) (112,369)
Class A.......................................... (80,573) 0
Class B.......................................... (52,475) 0
Class C.......................................... (692) 0
- -------------------------------------------------------------------------------
Total distributions from net investment income.... (4,537,955) (3,385,475)
- -------------------------------------------------------------------------------
Net realized gains
Class I.......................................... (17,615,538) (8,013,181)
Class IS......................................... (2,041,449) (280,914)
Class A.......................................... (10,507) 0
Class B.......................................... (32,427) 0
- -------------------------------------------------------------------------------
Total distributions from net realized gains....... (19,699,921) (8,294,095)
- -------------------------------------------------------------------------------
Total distributions to shareholders............... (24,237,876) (11,679,570)
- -------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold........................ 473,037,440 58,049,305
Payment for shares redeemed...................... (136,826,407) (45,817,872)
Net asset value of shares issued in reinvestment
of distributions................................ 22,881,422 10,632,287
- -------------------------------------------------------------------------------
Net increase in net assets resulting from capital
share transactions.............................. 359,092,455 22,863,720
- -------------------------------------------------------------------------------
Total increase in net assets.................... 428,187,846 83,834,064
Net assets
Beginning of period.............................. 329,754,294 245,920,230
- -------------------------------------------------------------------------------
End of period.................................... $757,942,140 $329,754,294
- -------------------------------------------------------------------------------
Undistributed net investment income............... $ 506,359 $ 28,200
- -------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
Notes to Financial Statements
1. ORGANIZATION
The Evergreen Select Equity Index Fund (the "Fund") is registered under the In-
vestment Company Act of 1940, as amended (the "1940 Act"), as a diversified,
open-end management investment company. The Fund is a separate series of Ever-
green Select Equity Trust, a Delaware business trust organized on September 18,
1997.
The Fund offers Class A, Class B, Class C, Class I ("Institutional Class"), and
Class IS ("Institutional Service Class") shares. Class A shares are sold with a
maximum front-end sales charge of 4.75%. Class B shares and Class C shares are
sold without a front end sales charge, but pay a higher ongoing distribution
fee than Class A. Class B shares are sold subject to a contingent deferred
sales charge that is payable upon redemption and decreases depending on how
long the shares have been held. Class B shares will automatically convert to
Class A shares after seven years. Class C shares are sold subject to contingent
deferred sales charge payable on the shares redeemed within one year after the
month of purchase. Class I and Class IS shares are sold without a front-end
sales charge or contingent deferred sales charge. Class IS shares pay an ongo-
ing distribution fee.
2. ACQUISITION
Effective at the close of business July 24, 1998, the Fund acquired all of the
net assets of CoreFund Equity Index Fund ("CoreFund"), an open-end management
investment company registered under the 1940 Act in a non-taxable exchange of
shares. Shareholders of Class A and Class Y shares of the CoreFund became own-
ers of that number of full and fractional shares of Class IS and Class I, re-
spectively, of the 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 July 24, 1998. Shareholders of Class B shares from the
CoreFund received Class IS shares with an aggregate net asset value equal to
the aggregate net asset value of their shares of the CoreFund immediately prior
to the close of business July 24, 1998. The Fund had no operations prior to the
merger. Since both the Fund and the CoreFund were similar funds, and the
CoreFund contributed the majority 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. In the merger of
CoreFund Class A and Class B to the Funds Class IS Shares, CoreFund Class A is
the accounting survivor and as such its operating results as presented in the
financial highlights are carried forward. Shareholders of CoreFund Class B
Shares received 43,220 Shares of Class IS as a result of the merger.
3. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently fol-
lowed by the Fund in the preparation of its financial statements. The policies
are in conformity with generally accepted accounting principles, which require
management to make estimates and assumptions that affect amounts reported here-
in. Actual results could differ from these estimates.
A. Valuation of Securities
The Fund values securities traded on an established securities exchange or in-
cluded in the Nasdaq National Market System ("NMS") at the last reported sales
price on the exchange where primarily traded. The Fund values securities traded
on an exchange or NMS for which there has been no sale and other securities
traded in the over-the-counter market at the mean between the last reported bid
and asked price. Securities for which valuations are not available from an in-
dependent pricing service, including restricted securities, are valued at fair
value as determined in good faith according to procedures established by the
Board of Trustees. Short-term investments with remaining maturities of 60 days
or less are carried at amortized cost, which approximates market value.
18
<PAGE>
Notes to Financial Statements(continued)
B. Repurchase Agreements
The Fund may invest in repurchase agreements. Securities pledged as collateral
for repurchase agreements are held in a segregated account by the custodian on
the Fund's behalf. Collateral for certain tri-party repurchase agreements is
held at the counterparty's custodian in a segregated account for the benefit of
the Fund and the counterparty. The 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 securities pledged falls below the carrying value of
the repurchase agreement, including accrued interest. The Fund will only enter
into repurchase agreements with banks and other financial institutions, which
are deemed by the investment advisor to be creditworthy pursuant to guidelines
established by the Board of Trustees.
C. 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-dividend date.
D. Futures Contracts
In order to gain exposure to or protect against changes in security values, the
Fund 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 ("variation mar-
gin") 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.
E. Federal Taxes
The Fund has qualified and intends to continue to qualify as a regulated in-
vestment company under the Internal Revenue Code of 1986, as amended (the
"Code"). Thus, the Fund will not incur any federal income tax liability since
it is expected to distribute all of its net investment company taxable income
and net capital gains, if any, to its shareholders. The Fund also intends to
avoid any excise tax liability by making the required distributions under the
Code. Accordingly, no provision for federal taxes is required. To the extent
that realized capital gains can be offset by capital loss carryforwards, it is
the Fund's policy not to distribute such gains.
F. Distributions
Distributions from net investment income for the Fund are declared and paid
monthly. 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. Certain distributions paid during previous years have been
reclassified to conform with current year presentation.
G. 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 for Class A, Class B, Class C
and Class IS.
19
<PAGE>
Notes to Financial Statements(continued)
4. CAPITAL SHARE TRANSACTIONS
The Fund has an unlimited number of shares of beneficial interest with a $0.001
par value authorized. Shares of beneficial interest of the Fund are currently
divided into Class A, Class B, Class C, Class I, and Class IS. Transactions in
shares of the Fund were as follows:
<TABLE>
<CAPTION>
Year Ended June 30,
---------------------------------------------------
1999 1998
------------------------- ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold.............. 6,042,846 $ 285,769,694 1,200,500 $ 49,812,731
Shares redeemed.......... (2,377,803) (106,433,062) (1,084,461) (44,321,135)
Shares issued in
reinvestment of
distributions........... 473,952 20,448,200 254,748 10,201,985
- ------------------------------------------------------------------------------
Net increase............. 4,138,995 199,784,832 370,787 15,693,581
- ------------------------------------------------------------------------------
Class IS
Shares sold.............. 442,280 20,862,310 203,866 8,236,574
Shares issued in
acquisition of CoreFund
Class B Shares.......... 43,220 2,010,366 -- --
Shares redeemed.......... (65,194) (6,348,972) (35,496) (1,496,737)
Shares issued in
reinvestment of
distributions........... 52,714 2,258,939 10,703 430,302
- ------------------------------------------------------------------------------
Net increase............. 473,020 18,782,643 179,073 7,170,139
- ------------------------------------------------------------------------------
Class A*
Shares sold.............. 1,148,902 56,545,137 -- --
Shares redeemed.......... (416,523) (20,942,814) -- --
Shares issued in
reinvestment of
distributions........... 1,878 90,280 -- --
- ------------------------------------------------------------------------------
Net increase............. 734,257 35,692,603 -- --
- ------------------------------------------------------------------------------
Class B**
Shares sold.............. 2,124,978 104,464,062 -- --
Shares redeemed.......... (62,624) (3,100,383) -- --
Shares issued in
reinvestment of
distributions........... 1,812 83,415 -- --
- ------------------------------------------------------------------------------
Net increase............. 2,064,166 101,447,094 -- --
- ------------------------------------------------------------------------------
Class C***
Shares sold.............. 67,034 3,385,871 -- --
Shares redeemed.......... (23) (1,176) -- --
Shares issued in
reinvestment of
distributions........... 12 588 -- --
- ------------------------------------------------------------------------------
Net Increase............. 67,023 3,385,283 -- --
- ------------------------------------------------------------------------------
Net increase............. $ 359,092,455 $ 22,863,720
- ------------------------------------------------------------------------------
</TABLE>
* For the period from November 4, 1998 (commencement of class operations) to
June 30, 1999.
** For the period from November 3, 1998 (commencement of class operations) to
June 30, 1999.
*** For the period from April 30, 1999 (commencement of class operations) to
June 30, 1999.
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (excluding
short-term securities) were $408,936,500 and $94,545,096, respectively for the
year ended June 30, 1999.
On June 30, 1999, the composition of unrealized appreciation and depreciation
on securities based on the aggregate cost of securities for federal income tax
purposes were as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Unrealized Unrealized Unrealized
Tax Cost Appreciation Depreciation Appreciation
--------------------------------------------------------------------
<S> <C> <C> <C>
$535,991,116 $230,964,626 ($5,026,658) $225,937,968
</TABLE>
6. DISTRIBUTION PLANS
Evergreen Distributor, Inc. ("EDI"), a wholly owned subsidiary of The BISYS
Group Inc. ("BISYS"), serves as principal underwriter to the Fund.
The Fund has adopted Distribution Plans for each class of shares, except Class
I, 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
20
<PAGE>
Notes to Financial Statements(continued)
service fees to broker-dealers who sell shares of the fund, are paid by the
fund through "Distribution Plan expenses". Each class, except Class I, cur-
rently pays a service fee equal to 0.25% of the average daily net assets of the
class. Class B and Class C also pay distribution fees equal to 0.75% of the av-
erage daily net assets of the class. Distribution Plan expenses are calculated
daily and paid at least quarterly.
With respect to Class B and Class C shares, the principal underwriter may pay
12b-1 fees greater than the allowable annual amounts the Fund is permitted to
pay. During the year ended June 30, 1999, amounts paid to EDI pursuant to the
Fund's Class A, Class B, Class C and Class IS Distribution Plans were $24,578,
$256,241, $3,111 and $68,867, respectively.
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.
7. INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT AND OTHER AFFILIATED
TRANSACTIONS
First Union National Bank ("FUNB"), serves as the investment advisor to the
Fund and is paid an advisory fee that is computed daily and paid monthly at an
annual rate of 0.40% of the Fund's average daily net assets.
FUNB has voluntarily agreed to waive a portion of the investment advisory fee
on the Fund. For the year ended June 30, 1999, FUNB voluntarily waived their
fees by $1,159,599.
Evergreen Investment Services ("EIS"), a subsidiary of First Union Corporation
("First Union"), serves as the administrator and BISYS serves as the sub-admin-
istrator to the Fund. As administrator, EIS provides the Fund with facilities,
equipment and personnel. As sub-administrator to the Fund, BISYS provides the
officers of the Fund. Officers of the Fund and affiliated Trustees receive no
compensation directly from the Fund.
The administrator and sub-administrator for the Fund are entitled to an annual
fee based on the average daily net assets of the funds administered by EIS for
which First Union or its investment advisory subsidiaries are also the invest-
ment advisers. The administration fee is calculated by applying percentage
rates, which start at 0.05% and decline to 0.01% per annum as net assets in-
crease, to the average daily net assets of the Fund. The sub-administration fee
is calculated by applying percentage rates, which start at 0.01% and decline to
0.004% per annum as net assets increase, to the average daily net assets of the
Fund. For the year ended June 30, 1999, EIS and BISYS were paid $86,062 and
$22,255, respectively, for providing their services.
Evergreen Service Company ("ESC"), an indirect, wholly owned subsidiary of
First Union, serves as the transfer and dividend disbursing agent for the Fund.
The Fund has entered into an expense offset arrangement with ESC relating to
certain cash balances held at First Union for the benefit of the Evergreen
Funds.
8. EXPENSE OFFSET ARRANGEMENTS
The Fund has entered into expense offset arrangements with ESC and their custo-
dian whereby credits realized as a result of uninvested cash balances were used
to reduce a portion of the Fund's related expenses. The assets deposited with
ESC and the custodian under these expense offset arrangements could have been
invested in income-producing assets. The amount of fee credits received by the
Fund was $20,140 and the impact on the Fund's expense ratio represented as a
percentage of its average daily net assets was less than 0.01%.
9. DEFERRED TRUSTEES' FEES
Each Independent Trustee of the Fund 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 is 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.
21
<PAGE>
Notes to Financial Statements(continued)
10. FINANCING AGREEMENTS
Certain Evergreen Funds, State Street Bank and Trust Company ("State Street")
and a group of banks (collectively, the "Banks") entered into a financing
agreement dated December 22, 1997, as amended on 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 was allocated, under the terms of the financing agreement,
among the Banks. The credit facility was accessed by the Funds for temporary or
emergency purposes only and is subject to the Fund's borrowing restrictions.
Borrowings under this facility bore interest at 0.50% per annum above the Fed-
eral Funds rate. A commitment fee of 0.065% per annum was incurred on the un-
used portion of the committed facility, which will be allocated to all funds.
For its assistance in arranging this financing agreement, the Capital Markets
Group of First Union was paid a one-time arrangement fee of $27,500. State
Street serves as administrative agent for the Banks, and as administrative
agent is entitled to a fee of $20,000 per annum which is allocated to all of
the participating Funds.
This agreement was amended and renewed on December 22, 1998. The amended fi-
nancing agreement became effective in December 22, 1998 among all of the Ever-
green Funds, State Street and the Bank of New York ("BONY"). Under this agree-
ment, State Street 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.
During the year ended June 30, 1999, the Fund had no borrowings under these
agreements.
22
<PAGE>
Independent Auditors' Report
The Board of Trustees and Shareholders of
Evergreen Select Equity Index Fund:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments of the Evergreen Select Equity Index Fund as of
June 30, 1999, and the related statements of operations and changes in net as-
sets for the year then ended and the financial highlights for the year or pe-
riod ended June 30, 1999. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to ex-
press an opinion on these financial statements and financial highlights based
on our audit. The statement of changes in net assets for the year ended June
30, 1998 and the financial highlights for each of the years or periods ended
June 30, 1998 or prior were audited by other auditors whose report, dated Au-
gust 25, 1998, expressed an unqualified opinion.
We conducted our audit in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit 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 audit provides 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 Ever-
green Select Equity Index Fund as of June 30, 1999, the results of its opera-
tions, changes in its net assets and financial highlights for the year or pe-
riod ended June 30, 1999 in conformity with generally accepted accounting prin-
ciples.
KPMG LLP
Boston, Massachusetts
August 6, 1999
23
<PAGE>
ADDITIONAL INFORMATION (Unaudited)
YEAR 2000
Like other investment companies, the Fund could be adversely affected if the
computer systems used by the Fund's investment advisors and the Fund's 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 Fund's investment advisor is taking steps to
address this potential 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 Fund's other major service providers. At this time, however,
there can be no assurance that these steps will be sufficient to avoid any ad-
verse impact on the Fund from this problem.
DISTRIBUTIONS TO SHAREHOLDERS
On July 1, 1999, the Fund declared distributions from net investment income of
$0.031, $0.042 and $0.031 per share for Class A, Class I and Class IS, respec-
tively. The distribution is payable on July 2, 1999 to shareholders of record
on June 30, 1999. These distributions are not reflected in the accompanying fi-
nancial statements.
FEDERAL TAX STATUS OF DISTRIBUTIONS
Pursuant to section 852 of the Internal Revenue Code, the Fund has designated
$19,444,492 as long-term capital gain distributions for the fiscal year ended
June 30, 1999. The per share capital distribution was $3.05 each for Class I,
Class IS, Class A and Class B.
For corporate shareholders, 78.96% of ordinary income dividends paid during the
fiscal year ended June 30, 1999 qualified for the dividends received deduction.
Shareholders are advised to use information received on Form 1099 to determine
their taxable long-term capital gain distribution rather than the per share
amounts presented above.
24
<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 Term Municipal 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 Company Value 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
94098 547173 08/99
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