1933 Act No. 333-37453
1940 Act No. 811-08413
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 8 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 7 [X]
EVERGREEN EQUITY TRUST
(Exact Name of Registrant as Specified in Charter)
200 Berkeley Street, Boston, Massachusetts 02116-5034
(Address of Principal Executive Offices)
(617) 210-3200
(Registrant's Telephone Number)
The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[X] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
<PAGE>
EVERGREEN EQUITY TRUST
CONTENTS OF
POST-EFFECTIVE AMENDMENT NO. 8
to
REGISTRATION STATEMENT
This Post-Effective Amendment No. 8 to Registrant's Registration Statement
Nos. 333-37453/811-08413 consists of the following pages, items of information
and documents:
The Facing Sheet
The Contents Page
The Cross-Reference Sheet
PART A
------
Prospectuses for Evergreen Fund for Total Return, Evergreen Growth and Income
Fund, Evergreen Income and Growth Fund, Evergreen Small Cap Equity Income Fund,
Evergreen Value Fund, Evergreen Utility Fund and Evergreen Blue Chip Fund are
contained herein.
Prospectuses for the following funds are contained in Registration Statement
No. 333-37453/811-08413 filed on August 1, 1998: Evergreen Aggressive
Growth Fund, Evergreen Fund, Evergreen Micro Cap Fund, Evergreen Omega Fund,
Evergreen Small Company Growth Fund, Evergreen Strategic Growth Fund
and Evergreen Stock Selector Fund.
Prospectuses for the following funds are contained in Registration Statement
No. 333-37453/811-08413 filed on July 31, 1998: Evergreen American Retirement
Fund, Evergreen Foundation Fund, Evergreen Tax Strategic Foundation Fund
and Evergreen Balanced Fund.
Prospectuses for the following fund are contained in Registration
Statement No. 333-37453/811-08413 filed on June 12, 1998:
Evergreen Tax Strategic Equity Fund.
PART B
------
Statement of Additional Information for Evergreen Fund for Total Return,
Evergreen Growth and Income Fund, Evergreen Income and Growth Fund, Evergreen
Small Cap Equity Income Fund, Evergreen Value Fund, Evergreen Utility Fund
and Evergreen Blue Chip Fund is contained herein.
Statement of Additional Information for the following funds
is contained in Registration Statement No. 333-37453/811-08413
filed on August 1, 1998: Evergreen Aggressive
Growth Fund, Evergreen Fund, Evergreen Micro Cap Fund,
Evergreen Omega Fund, Evergreen Small Company Growth Fund, Evergreen
Strategic Growth Fund and Evergreen Stock Selector Fund is contained herein.
Statement of Additional Information for the following funds
is contained in Registration Statement No. 333-37453/811-08413
filed on July 31, 1998: Evergreen American Retirement Fund,
Evergreen Foundation Fund, Evergreen Tax Strategic Foundation Fund
and Evergreen Balanced Fund.
Statement of Additional Information for the following fund is
contained in Registration Statement No. 333-37453/811-08413
filed on June 12, 1998: Evergreen Tax Strategic Equity Fund.
PART C
------
Exhibits
Indemnification
Business and Other Connections of Investment Adviser
Principal Underwriter
Location of Accounts and Records
Undertakings
Signatures
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EVERGREEN EQUITY TRUST
PART A
PROSPECTUSES
<PAGE>
E V E R G R E E N
Growth
and
Income
Funds
Evergreen Utility Fund
Evergreen Fund for Total Return
Evergreen Income and Growth Fund
Evergreen Blue Chip Fund
Evergreen Value Fund
Evergreen Growth and Income Fund
Evergreen Small Cap Equity Income Fund
Class A
Class B
Class C
Prospectus, December 1, 1998
[LOGO OF EVERGREEN FUNDS APPEARS HERE]
The Securities and Exchange Commission has not guaranteed that the information
in this prospectus is accurate or complete, nor has it evaluated the investment
merit of these mutual fund shares. Anyone who tells you otherwise is committing
a federal crime.
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TABLE OF CONTENTS
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FUND SUMMARIES:
Evergreen Utility Fund ................................................ 2
Evergreen Fund for Total Return ....................................... 4
Evergreen Income and Growth Fund ...................................... 6
Evergreen Blue Chip Fund .............................................. 8
Evergreen Value Fund .................................................. 10
Evergreen Growth and Income Fund ...................................... 12
Evergreen Small Cap Equity Income Fund ................................ 14
GENERAL INFORMATION:
The Funds' Investment Advisor ......................................... 16
Calculating The Share Price ........................................... 16
How To Choose A Fund .................................................. 16
How To Choose The Share Class That Best Suits You ..................... 17
How To Buy Shares ..................................................... 18
How To Sell Shares .................................................... 19
Other Services ........................................................ 20
The Tax Consequences of Investing in the Fund ......................... 20
Sales Compensation and Expenses ....................................... 21
Financial Highlights .................................................. 22
Fund Investments ...................................................... 30
Risk Factors For All Mutual Funds
Please remember that mutual fund shares are:
. not guaranteed to achieve their goal
. not insured, endorsed or guaranteed by the FDIC, a bank or any government
agency
. subject to investment risks, including possible loss of your original
investment
In general, funds included in this prospectus seek to provide investors with a
combination of capital growth and current income. The proportion of growth
versus income varies by fund. These funds tend to have less risk and volatility
than more aggressive stock funds.
Fund Summaries Key
Each fund's summary is organized around the following basic topics and
questions:
[GRAPHIC APPEARS HERE] INVESTMENT GOAL
What is the fund's financial objective? You can find clarification on how the
fund seeks to achieve these goals by looking at the fund's strategy and
investment policies. The fund's Board of Trustees can change the investment
objective without a shareholder vote.
[GRAPHIC APPEARS HERE] INVESTMENT STRATEGY
How does the fund go about trying to meet its goals? What types of investments
does it contain? What style of investing and investment philosophy does it
follow? Does it have limits on the amount invested in any particular type of
security?
[GRAPHIC APPEARS HERE] RISK FACTORS
What are the specific risks for an investor in the fund?
[GRAPHIC APPEARS HERE] PORTFOLIO MANAGEMENT
Who selects investments for the fund? What is his or her background and
experience?
[GRAPHIC APPEARS HERE] PERFORMANCE
How well has the fund performed in the past year? The past five years? The past
ten years?
[GRAPHIC APPEARS HERE] EXPENSES
How much does it cost to invest in the fund? What is the difference between
sales charges and expenses?
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O V E R V I E W
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Growth
and
Income
Funds
typically rely on one or a combination of the following strategies:
. buying companies that have a history of paying regular dividends in order to
cushion stock market fluctuations with a steady stream of income;
. investing a portion of the fund in bonds and convertible stocks to lower the
overall risk and provide regular income; and/or
. buying companies whose stock price is lower than the fund's managers believe
the true, "fundamental" price should be.
may be appropriate for investors who:
. can tolerate a moderate decline in the value of their investment and/or
. want a combination of growth potential and regular dividend income
potential.
Like most investments, your investment in an Evergreen Growth and Income Fund
could fluctuate significantly in value over time and could result in a loss of
money.
................................................................................
Each of the Evergreen Growth and Income Funds reserves the right to invest in
high quality money market instruments in order to protect the value of the fund
in response to adverse economic, political or market conditions. This strategy
is inconsistent with these funds' principal investment strategies, and if
employed could result in a low return and potential loss of market opportunity.
Here are the most important factors that may affect the value of your
investment:
Stock Market Risk
Your investment will be affected by general economic conditions such as
prevailing economic growth, inflation and interest rates. When economic growth
slows, or interest or inflation rates increase, stocks tend to decline in value.
Even if general economic conditions do not change, your investment may decline
in value if the particular industries or companies your fund invests in do not
perform well.
Interest Rate Risk
When interest rates go up, the value of debt securities tends to
fall. If your fund invests a significant portion of its portfolio in debt
securities and interest rates rise, then the value of your investment may
decline. The opposite is also true.
Credit Risk
The value of debt securities is directly affected by an issuer's ability to pay
principal and interest on time. If your fund invests in bonds, then the value of
your investment may be adversely affected when an issuer fails to pay an
obligation on a timely basis.
Foreign Investment Risk
A fund's investment in non-U.S. securities could expose it to certain unique
risks of overseas investing. For example, political turmoil and economic
instability in the countries in which the fund invests could adversely affect
the value of your investment. In addition, if the value of any foreign currency
in which the fund's investments are denominated declines relative to the U.S.
dollar, the value of your investment in the fund may decline as well. Certain
foreign countries have less developed and less regulated securities markets and
accounting systems than the U.S. This may make it harder to get accurate
information about a security or company, and increase the possibility that an
investment will not perform as expected.
GROWTH AND INCOME FUNDS 1
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E V E R G R E E N
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Utility Fund
FUND FACTS:
- ----------
Goal:
. High Current Income
. Moderate Capital Growth
Principal Investments:
. Stocks and Bonds of Utility Companies
Classes of Shares:
. Class A
. Class B
. Class C
Investment Advisor:
. Capital Management Group
Portfolio Managers:
. Paul A. DiLella
. Doris Kelley-Watkins
NASDAQ Symbols
EVUAX (Class A)
EVUBX (Class B)
[GRAPHIC APPEARS HERE] INVESTMENT GOAL
The Fund seeks a return consisting of high current income and moderate capital
growth.
[GRAPHIC APPEARS HERE] INVESTMENT STRATEGY
The Fund invests at least 65% of its assets in stocks and investment grade bonds
of utility companies (gas, electric, telecommunications). The Fund may also
invest up to 35% of its assets in common stocks of non-utility companies and up
to 25% in foreign securities. The Fund's manager considers a number of
factors when selecting utility company stocks: a history of high dividends and
profits, the size of the company's market and market share, competitive or
technological advantages that may help it in the future, potential merger
activity, and the projected volatility of the company or industry.
Dividend Payment Schedule: Monthly
[GRAPHIC APPEARS HERE] RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:
Stock Market Risk
. Interest Rate Risk
. Credit Risk
. Foreign Investment Risk
In addition, the value of your investment in the Fund could be negatively
affected by adverse developments in the utility industry. These could include
decreases in the demand for utility company products and services, increased
competition resulting from deregulation, and rising energy costs, among others.
Such developments also could cause utility companies to reduce the dividends
they pay on their stock, potentially decreasing the dividends you receive from
the Fund. Finally, utility companies typically borrow heavily to support
continuing operations. Increases in interest rates could increase utility
companies' borrowing costs, which could impact their financial results and stock
price, and ultimately, the value of your Fund shares.
[GRAPHIC APPEARS HERE] PORTFOLIO MANAGEMENT
The Fund's investment advisor is the Capital Management Group of First Union
National Bank ("CMG").
The day-to-day management of the Fund is handled by Paul A. DiLella and Doris
Kelley-Watkins. Each manager has over 18 years of investment management
experience. Mr. DiLella joined First Fidelity Bank (which First Union National
Bank acquired in 1995) in 1982 and has managed the fund since 1996. Ms.
Kelley-Watkins was a utility industry analyst at Merrill Lynch for 20 years
before joining CMG as co-manager of the fund in 1997.
2 GROWTH AND INCOME FUNDS
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E V E R G R E E N
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[GRAPHIC APPEARS HERE] PERFORMANCE
The following charts show how the Fund has performed in the past.
This chart below shows the percentage gain or loss for Class A shares of the
Fund in each calendar years since the Class A shares' inception on 1/4/94. It
should give you a general idea of how the Fund's return has varied from year-to-
year. This graph includes the effects of Fund expenses, but not sales charges.
Returns would be lower if sales charges were included.
Year-by-Year Total Return for Class A Shares (%)
[BAR GRAPH APPEARS HERE]
Best Quarter: 4th Quarter 1997 +13.00%
Worst Quarter: 3rd Quarter 1996 -4.37%
(*)From inception on 1/4/94 to 12/31/94.
Year to date total return through 9/30/98 is __.
- ---------------------------------------
This next table lists the Fund's average year-by-year return over the past year
and since its inception (through 12/31/97), excluding sales charges. At the
bottom of the table you can compare this performance with the S&P 500 Index and
the S&P Utilities Index. The S&P 500 Index is an unmanaged index of 500 publicly
- -traded U.S.stocks and is often used to indicate the performance of the overall
stock market. The S&P Utilities Index tracks the performance of utility stocks
within the larger S&P 500 Index, which are investments similar to the Fund's.
Neither index is an actual investment. Past performance is not an indication of
future results.
Average Annual Total Return
(for the period ended 12/31/97)
Inception Since
Date 1 year 5 year 10 year Inception
Class A 1/4/94 29.35% N/A N/A 13.64%
Class B 1/4/94 16.31% N/A N/A 11.09%
Class C 9/2/94 16.31% N/A N/A 14.25%
S&P 500 19.29% 22.91% 18.48% -----%
S&P Utilities Index 20.99% 10.82% 13.75% -----%
[GRAPHIC APPEARS HERE] EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Fees You Pay Directly
Shareholder Transaction Expenses Class A Class B Class C
Maximum sales charge imposed on 4.75% None None
purchases (as a % of offering price)
Maximum deferred sales charge None 5.00% 1.00%
Fees the Fund Pays Directly (and You Pay Indirectly)
Annual Fund Operating Expenses (as a % of net asset value):
<TABLE>
<CAPTION>
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
<S> <C> <C> <C> <C>
Class A 0.50% 0.25% 0.38% 1.13%
Class B 0.50% 1.00% 0.38% 1.88%
Class C 0.50% 1.00% 0.38% 1.88%
</TABLE>
The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual funds and is
for illustration only. The example assumes a 5% average annual return and that
you reinvest all of your dividends. Your actual costs may be higher or lower.
Example of Fund Expenses
<TABLE>
<CAPTION>
Assuming Redemption at Assuming
End of Period No Redemption
Class A Class B Class C Class B Class C
<S> <C> <C> <C> <C> <C>
After 1 year $ 585 $ 691 $ 291 $ 191 $ 191
After 3 years $ 817 $ 621 $ 388 $ 591 $ 591
After 5 years $1,068 $1,036 $ 591 $1,016 $1,016
After 10 years $1,784 $1,914 $1,061 $1,914 $2,201
</TABLE>
GROWTH AND INCOME FUNDS 3
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E V E R G R E E N
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Fund for Total Return
FUND FACTS:
- ----------
Goal:
. Total Return
Principal Investments:
. Large-Cap Stocks
. Other Common Stocks
. Other Preferred and Convertible Stocks
. Bonds
. Foreign Securities
Classes of Shares:
. Class A
. Class B
. Class C
Investment Advisor:
. Evergreen Investment Management Company
Portfolio Manager:
. Harlan Sonderling
NASDAQ Symbols:
EKTAX (Class A)
EKTBX (Class B)
EKTCX (Class C)
[GRAPHIC APPEARS HERE] INVESTMENT GOAL
The Fund seeks total return from a combination of capital growth and income.
[GRAPHIC APPEARS HERE] INVESTMENT STRATEGY
The Fund invests primarily in common stocks of large, established companies
(above $5 billion in market capitalization) with a history of paying
dividends. Tthe Fund may also invest in low- or non-dividend paying common
stocks, preferred and convertible stocks, up to 35% of its assets in bonds
(including lower credit quality bonds - junk bonds), and up to 50% of its assets
in foreign securities. Investment decisions are made using a combination of
investment analysis and techniques designed to construct a portfolio that offers
a high income stream and low price fluctuation.
Dividend Payment Schedule: Quarterly
[GRAPHIC APPEARS HERE] RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:
. Stock Market Risk
. Interest Rate Risk
. Credit Risk
. Foreign Investment Risk
Since the Fund may invest in lower credit quality bonds (junk bonds), it may be
more susceptible to credit risk than a fund that invests in higher quality
bonds. Lower-rated bonds are less secure financially and more sensitive to
downturns in the economy.
[GRAPHIC APPEARS HERE] PORTFOLIO MANAGEMENT
The Fund's investment advisor is Evergreen Investment Management Company
("EIMC").
The day-to-day management of the Fund is handled by Harlan Sonderling. Mr.
Sonderling has over 12 years of investment management experience. He joined EIMC
as Senior Research Analyst in 1996 after four years as an analyst at Putnam. He
has managed the Fund since June, 1998.
4 GROWTH AND INCOME FUNDS
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E V E R G R E E N
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[GRAPHIC APPEARS HERE] PERFORMANCE
The following charts show how the Fund has performed in the past.
This chart below shows the percentage gain or loss of the Fund's Class A shares
in each of the last ten calendar years. It should give you a general idea of how
the Fund's return has varied from year-to-year. This graph includes the effects
of Fund expenses, but not sales charges. Returns would be lower if sales charges
were included.
Year-by-Year Total Return for Class A Shares (%)
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
24.07 26.99 29.51 -3.98 12.82 4.72 25.19 -2.31 26.74 12.10
Best Quarter: 2nd Quarter 1997 +12.37%
Worst Quarter: 3rd Quarter 1990 -7.78%
Year to date total return through 9/30/98 is ___.
This next table lists the Fund's average year-by-year return over the past one,
five and ten years (through 12/31/97), excluding sales charges. At the bottom of
the table you can compare this performance with an index that tracks investments
similar to the Fund's, the S&P 500 Index. The S&P 500 Index is an unmanaged
index of 500 publicly-traded U.S. stocks and is often used to indicate the
performance of the overall stock market. The S&P 500 Index is not an actual
investment. Past performance is not an indication of future results.
Average Annual Total Return
(for the period ended 12/31/97)
Inception Since
Date 1 year 5 year 10 year Inception
Class A 4/14/87 24.07% 17.19% 14.93% 13.02%
Class B 2/1/93 13.01% 16.67% N/A 15.93%
Class C 2/1/93 12.99% 16.65% N/A 15.95%
S&P 500 19.29% 16.75% 18.48% -----%
[GRAPHIC APPEARS HERE] EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Fees You Pay Directly
Shareholder Transaction Expenses Class A Class B Class C
Maximum sales charge imposed on 4.75% None None
purchases (as a % of offering price)
Maximum deferred sales charge None 5.00% 1.00%
Fees the Fund Pays Directly (and You Pay Indirectly)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class A 0.61% 0.25% 0.35% 1.21%
Class B 0.61% 1.00% 0.35% 1.96%
Class C 0.61% 1.00% 0.35% 1.96%
The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual funds and is
for illustration only. The example assumes a 5% average annual return and that
you reinvest all of your dividends. Your actual costs may be higher or
lower.
Example of Fund Expenses
Assuming Redemption at Assuming
End of Period No Redemption
Class A Class B Class C Class B Class C
After 1 year $ 592 $ 699 $ 299 $ 199 $ 199
After 3 years $ 841 $ 645 $ 615 $ 615 $ 615
After 5 years $1,108 $1,077 $1,057 $1,057 $1,057
After 10 years $1,874 $2,000 $2,285 $2,000 $2,285
GROWTH AND INCOME FUNDS 5
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E V E R G R E E N
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Income and Growth Fund
FUND FACTS:
- ----------
Goal:
. Current Income
Capital Growth
Principal Investments:
. Common Stocks
. Convertible Stocks
. Foreign Securities
Classes of Shares:
. Class A
. Class B
. Class C
Investment Advisor:
. Evergreen Asset
Management Corp.
Portfolio Managers:
. Nola Maddox Falcone
. Irene O'Neill
NASDAQ Symbols:
ETRAX (Class A)
ETRBX(Class B)
[GRAPHIC APPEARS HERE] INVESTMENT GOAL
The Fund seeks current income and capital growth in the value of its shares.
[GRAPHIC APPEARS HERE] INVESTMENT STRATEGY
The Fund invests primarily in common stock and securities convertible into
common stocks that on purchase date pay a yield higher than the average yield of
companies included in the S&P 500. Up to 50% of the Fund's assets may be
invested in foreign securities and up to 25% in bonds. The Fund focuses on
companies the Fund's manager believes are undervalued as a result of a temporary
adverse situation and companies where there is a trend of increasing profits and
prospects for future growth. In addition, the Fund looks for merger and
acquisition candidates.
Dividend Payment Schedule: Quarterly
[GRAPHIC APPEARS HERE] RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:
. Stock Market Risk
. Interest Rate Risk
. Credit Risk
. Foreign Investment Risk
In addition, your investment may be subject to special risks associated with
investing in securities issued by small companies.Smaller, less well-established
companies tend to be more dependent on individual managers and limited product
and product lines. Additionally, securities issued by small companies also tend
to fluctuate in value more dramatically than those of larger companies.
[GRAPHIC APPEARS HERE] PORTFOLIO MANAGEMENT
The Fund's investment advisor is Evergreen Asset Management Corp. ("EAMC").
The day-to-day management of the Fund is handled by Nola Maddox Falcone, who is
also President and Co-Chief Executive Officer of EAMC. Ms. Falcone has been the
Fund's portfolio manager since its inception in 1978.
Co-manager of the Fund is Irene O'Neill. Ms. O'Neill has over 19 years of
investment management experience and has been co-portfolio manager since
December, 1997. She has been with EAMC since 1981.
6 GROWTH AND INCOME FUNDS
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E V E R G R E E N
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[GRAPHIC APPEARS HERE] PERFORMANCE
The following charts show how the Fund has performed in the past.
This chart below shows the percentage gain or loss for Class A shares of the
Fund in each calendar year since the Class A shares' inception on 1/3/95. It
should give you a general idea of how the Fund's return has varied from year-to-
year. This graph includes the effects of Fund expenses, but not sales charges.
Returns would be lower if sales charges were included.
Year-by-Year Total Return for Class A Shares (%)
[BAR GRAPH APPEARS HERE]
1997 1996 1995(*) 1994 1993 1992 1991 1990 1989 1988
25.27 12.62 23.71
Best Quarter: 2nd Quarter 1997 +10.57%
Worst Quarter: 1st Quarter 1997 -0.09%
(*)From inception on 1/3/95 to 12/31/95.
Year to date total return through 9/30/98 is ___.
This next table lists the Fund's average year-by-year return over the past year
and since each class's inception, excluding sales charges. At the bottom of the
table you can compare this performance with the Wilshire 5000 Index and the
Lipper Income Fund Average. The Wilshire 5000 Index is an unmanaged index of the
largest 5000 publicly-traded U.S. stocks and is considered a broad stock market
average, so it includes a broader range of market capitalizations than the S&P
500 Index. The Lipper Income Fund Average measures both fixed-income and equity
funds and tracks investments similar to the Fund's. Neither index is an actual
investment. Past performance is not an indication of future results.
Average Annual Total Return (for the period ended 12/31/97)
Inception Since
Date 1 year 5 year 10 year Inception
Class A 1/3/95 7.93% N/A N/A 15.57%
Class B 1/3/95 7.13% N/A N/A 15.57%
Class C 1/3/95 7.13% N/A N/A 15.56%
Wilshire 5000 17.05% 21.03% 17.44% -----%
Lipper Income Fund 8.37% 11.94% 12.45% -----%
[GRAPHIC APPEARS HERE] EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Fees You Pay Directly
Shareholder Transaction Expenses Class A Class B Class C
Maximum sales charge imposed on 4.75% None None
purchases (as a % of offering price)
Maximum deferred sales charge None 5.00% 1.00%
Fees the Fund Pays Directly (and You Pay Indirectly)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class A 0.98% 0.25% 0.28% 1.51%
Class B 0.98% 1.00% 0.28% 2.26%
Class C 0.98% 1.00% 0.28% 2.26%
The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual funds and is
for illustration only. The example assumes a 5% average annual return and that
you reinvest all of your dividends. Your actual costs may be higher or
lower.
Example of Fund Expenses
Assuming Redemption at Assuming
End of Period No Redemption
Class A Class B Class C Class B Class C
After 1 year $ 621 $ 729 $ 329 $ 229 $ 229
After 3 years $ 930 $1,006 $ 706 $ 706 $ 706
After 5 years $1,260 $1,410 $1,210 $1,210 $1,210
After 10 years $2,191 $2,318 $2,595 $2,318 $2,595
GROWTH AND INCOME FUNDS 7
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E V E R G R E E N
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Blue Chip Fund
FUND FACTS:
- ----------
Goal:
. Growth of Capital
. Long-term Growth of Income
Principal Investments:
. Large-Cap U.S. Stocks
Classes of Shares:
. Class A
. Class B
. Class C
Investment Advisor:
. Evergreen Investment Management Company
Portfolio Manager:
. Judith A. Warners
NASDAQ Symbols:
EKNAX (Class A)
EKNBX(Class B)
[GRAPHIC APPEARS HERE] INVESTMENT GOAL
The Fund seeks the best possible growth of capital and long-term growth of
income.
[GRAPHIC APPEARS HERE] INVESTMENT STRATEGY
The Fund invests primarily in common stocks of well-established, large U.S.
companies with a long history of performance, typically recognizable names
representing a broad range of industries. To provide balance, the Fund also
invests in quality medium-sized companies and may invest up to 25% of its assets
in foreign securities. Buy and sell decisions are based primarily on fundamental
analysis to identify companies with leading positions within their industry,
established records of dividend payments and a trend of accelerating profits.
Dividend Payment Schedule: Quarterly
[GRAPHIC APPEARS HERE] RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:
. Stock Market Risk
. Foreign Investment Risk
[GRAPHIC APPEARS HERE] PORTFOLIO MANAGEMENT
The Fund's investment advisor is Evergreen Investment Management Company
("EIMC").
The day-to-day management of the Fund is handled by Judith A. Warners. Ms.
Warners has managed the Fund since January, 1995. She joined EIMC as an analyst
in 1981.
8 GROWTH AND INCOME FUNDS
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E V E R G R E E N
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[GRAPHIC APPEARS HERE] PERFORMANCE
The following charts show how the Fund has performed in the past.
This chart below shows the percentage gain or loss of the Fund's Class B shares
in each of the last ten calendar years. It should give you a general idea of how
the Fund's total return has varied from year-to-year. This graph includes the
effects of Fund expenses, but not sales charges. Returns would be lower if sales
charges were included.
Year-by-Year Total Return for Class B Shares (%)
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
30.52 21.05 31.93 -5.90 9.81 0.05 28.84 -5.21 29.26 8.46
Best Quarter: 2nd Quarter 1997 +16.31%
Worst Quarter: 3rd Quarter 1990 -12.15%
Year to date total return through 9/30/98 is ___.
This next table lists the Fund's average year-by-year return over the past one,
five and ten years (through 12/31/97), excluding sales charges. At the bottom of
the table you can compare this performance with an index that tracks investments
similar to the Fund's, the S&P 500 Index. The S&P 500 Index is an unmanaged
index of 500 publicly-traded U.S. stocks and is often used to indicate the
performance of the overall stock market. The S&P 500 Index is not an actual
investment. Past performance is not an indication of future results.
Average Annual Total Return
(for the period ended 12/31/97)
Inception Since
Date 1 year 5 year 10 year Inception
Class A 1/20/98 N/A N/A N/A 11.29%
Class B 9/11/35 30.52% 16.58% 14.35% 9.04%
Class C 1/22/98 N/A N/A N/A 9.80%
S&P 500 19.29% 22.91% 18.48% -----%
[GRAPHIC APPEARS HERE] EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Fees You Pay Directly
Shareholder Transaction Expenses Class A Class B Class C
Maximum sales charge imposed on 4.75% None None
purchases (as a % of offering price)
Maximum deferred sales charge None 5.00% 1.00%
Fees the Fund Pays Directly (and You Pay Indirectly)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class A 0.64% 0.25% 0.33% 1.22%
Class B 0.64% 1.00% 0.33% 1.97%
Class C 0.64% 1.00% 0.33% 1.97%
The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual funds and is
for illustration only. The example assumes a 5% average annual return and that
you reinvest all of your dividends. Your actual costs may be higher or
lower.
Example of Fund Expenses
Assuming Redemption at Assuming
End of Period No Redemption
Class A Class B Class C Class B Class C
After 1 year $ 593 $ 700 $ 300 $ 200 $ 200
After 3 years $ 844 $ 648 $ 618 $ 618 $ 618
After 5 years $1,113 $1,082 $1,062 $1,062 $1,062
After 10 years $1,882 $2,011 $2,296 $2,011 $2,296
GROWTH AND INCOME FUNDS 9
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E V E R G R E E N
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Value Fund
FUND FACTS:
- ----------
Goal:
. Long-term Capital Growth
. Current Income
Principal Investments:
. Stocks
. Bonds
. Foreign Securities
Classes of Shares:
. Class A
. Class B
. Class C
Investment Advisor:
. Capital Management Group
Portfolio Manager:
. Matthew D. Finn
NASDAQ Symbols:
EGVAX(Class A)
EGVBX(Class B)
[GRAPHIC APPEARS HERE] INVESTMENT GOAL
The Fund seeks long-term capital growth with current income as a secondary
objective.
[GRAPHIC APPEARS HERE] INVESTMENT STRATEGY
The Fund invests at least 75% of its assets in stocks of companies that are, in
the opinion of the Fund's manager, undervalued according to various financial
measurements. Such stocks are theoretically bought at a discount to their true
value, thus providing growth opportunity with potentially less downside risk.
Value stocks are chosen primarily for their price compared to their growth
potential, with income as a secondary consideration. There is no specific
limitation on the type or size of company in which the Fund invests. The Fund
may also invest in bonds (up to 25% of its assets) and foreign securities (up to
25% of its assets).
Dividend Payment Schedule: Quarterly
[GRAPHIC APPEARS HERE] RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:
. Stock Market Risk
. Interest Rate Risk
. Credit Risk
. Foreign Investment Risk
In addition, your investment may be subject to special risks associated with
investing in securities issued by small companies. Smaller, less
well-established companies tend to be more dependent on individual managers and
limited products and product lines. Additionally, securities issued by small
companies also tend to fluctuate in value more dramatically than those of larger
companies.
[GRAPHIC APPEARS HERE] PORTFOLIO MANAGEMENT
The Fund's investment advisor is the Capital Management Group of First Union
National Bank ("CMG").
The day-to-day management of the Fund has been handled by Matthew D. Finn since
March, 1998. Mr. Finn is Chief Investment Officer of Evergreen Investment
Management Company's Growth and Income Group and has been associated with CMG
since March, 1998. Previously, he was a portfolio manager with Advantus Capital
Management, Inc. from 1994 to 1998 and with Unified Capital Management from 1993
to 1994.
10 GROWTH AND INCOME FUNDS
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E V E R G R E E N
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[GRAPHIC APPEARS HERE] PERFORMANCE
The following charts show how the Fund has performed in the past.
This chart below shows the percentage gain or loss for Class A shares of the
Fund in each of the last ten calendar years. It should give you a general idea
of how the Fund's returns have varied from year-to-year. This graph includes the
effects of Fund expenses, but not sales charges. Returns would be lower if sales
charges were included.
Year-by-Year Total Return for Class A Shares (%)
[BAR GRAPH APPEARS HERE]
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
25.73 18.92 31.61 1.86 9.31 7.96 26.11 -3.43 26.87 20.21
Best Quarter: 1st Quarter 1991 +12.26%
Worst Quarter: 3rd Quarter 1990 -12.20%
Year to date total return through 9/30/98 is ___.
This next table lists the Fund's average year-by-year return over the past one,
five and ten years through 12/31/97), excluding sales charges. At the bottom of
the table you can compare this performance with an index that tracks investments
similar to the Fund's, the S&P 500 Index. The S&P 500 Index is an unmanaged
index of 500 publicly-traded U.S. stocks and is often used to indicate
the performance of the overall stock market. The S&P 500 Index is not an actual
investment. Past performance is not an indication of future results.
Average Annual Total Return
(for the period ended 12/31/97)
Inception Since
Date 1 year 5 year 10 year Inception
Class A 4/12/85 25.73% 17.02% 15.88% 14.75%
Class B 2/26/93 8.69% 16.52% N/A 15.51%
Class C 9/2/94 8.74% N/A N/A 18.64%
S&P 500 19.29% 22.19% 18.48% -----%
[GRAPHIC APPEARS HERE] EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Fees You Pay Directly
Shareholder Transaction Expenses Class A Class B Class C
Maximum sales charge imposed on 4.75% None None
purchases (as a % of offering price)
Maximum deferred sales charge None 5.00% 1.00%
Fees the Fund Pays Directly (and You Indirectly)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class A 0.50% 0.25% 0.25% 1.00%
Class B 0.50% 1.00% 0.25% 1.75%
Class C 0.50% 1.00% 0.25% 1.75%
The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual funds and is
for illustration only. The example assumes a 5% average annual return and that
you reinvest all of your dividends. Your actual costs may be higher or lower.
Example of Fund Expenses
Assuming Redemption at Assuming
End of Period No Redemption
Class A Class B Class C Class B Class C
After 1 year $ 572 $ 678 $ 278 $ 172 $ 178
After 3 years $ 778 $ 581 $ 551 $ 551 $ 551
After 5 years $1,001 $ 969 $ 994 $ 949 $ 949
After 10 years $1,641 $1,771 $2,062 $1,771 $2,062
GROWTH AND INCOME FUNDS 11
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E V E R G R E E N
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Growth and Income Fund
FUND FACTS:
Goal:
* Capital Growth
* Current Income
Principal Investments:
* Stocks
* Bonds
* Convertible Stocks
Classes of Shares:
* Class A
* Class B
* Class C
Investment Advisor:
* Evergreen Asset
Management Corp.
Portfolio Managers:
* Stephen A. Lieber
* Gary R. Buesser
NASDAQ Symbols:
EGIAX (Class A)
EGIBX (Class B)
EGICX (Class C)
[LOGO] INVESTMENT GOAL
The Fund seeks capital growth in the value of its shares and current income.
[LOGO] INVESTMENT STRATEGY
The Fund invests primarily in stocks of established companies that the Fund's
advisor believes are undervalued in the marketplace and have a trigger, or
catalyst, that will bring the stock's price into line with its actual or
potential value. The catalysts may include new products, new management, changes
in regulation and/or restructuring potential. For balance, the Fund may also
invest in bonds and convertible stocks. The Fund may invest up to 5% of its
assets in lower credit quality bonds (junk bonds).
Dividend Payment Schedule: Quarterly
[LOGO] RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:
* Stock Market Risk
* Interest Rate Risk
* Credit Risk
Because the Fund may invest in lower credit quality bonds (junk bonds), it may
be more susceptible to credit risk than a fund that invests in higher quality
bonds. Lower-rated bonds are less secure financially and more sensitive to
downturns in the economy.
[LOGO] PORTFOLIO MANAGEMENT
The Fund's investment advisor is Evergreen Asset Management Corp.("EAMC").
The day-to-day management of the Fund has been handled by Stephen A. Lieber and
Gary R. Buesser since July, 1997. Mr. Lieber is Chairman and Co-Chief Executive
Officer of EAMC. He was the founding partner of Lieber & Companyin 1969, the
original sponsor of the Evergreen Funds. He has been in the investment
management business since 1952. Mr. Buesser joined EAMC in 1996 after 15 years
of investment experience with Cowen Asset Management and Shearson Lehman
Brothers.
12 GROWTH AND INCOME FUNDS
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E V E R G R E E N
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[LOGO] PERFORMANCE
The following charts show how the Fund has performed in the past.
This chart below shows the percentage gain or loss for the Class A shares of the
Fund in each calendar year since the Class A shares' inception on 1/3/95. It
should give you a general idea of how the Fund's return has varied from year-to-
year. This graph includes the effects of Fund expenses, but not sales charges.
Returns would be lower if sales charges were included.
Year-by-Year Total Return for Class A Shares (%)
1997 1996 1995(*) 1994 1993 1992 1991 1990 1989 1988
30.92 23.51 32.68
Best Quarter: 2nd Quarter 1997 +15.49%
Worst Quarter: 1st Quarter 1997 -0.57%
(*)Since inception on 1/3/95 to 12/31/95.
Year to date total return through 9/30/98 is __.
This next table lists the Fund's average year-by-year return over the past year
and since each class's inception, excluding sales charges. At the bottom of the
table you can compare this performance with the S&P 400 Index and the Lipper
Growth and Income Funds Average. The S&P 400 index is an unmanaged index of 400
publicly-traded U.S. stocks. The Lipper Growth and Income Funds Average
represents the performance of growth and income funds tracked by Lipper
Analytical Services, an independent fund monitor, and includes investments
similar to the Fund's. Neither index is an actual investment. Past performance
is not an indication of future results.
Average Annual Total Return
(for the period ended 12/31/97)
Inception Since
Date 1 year 5 year 10 year Inception
Class A 1/3/95 30.92% N/A N/A 29.12%
Class B 1/3/95 10.44% N/A N/A 24.05%
Class C 1/3/95 10.47% N/A N/A 24.08%
S&P 400 11.21% 17.56% 18.21% -----%
Lipper Growth and Inc.11.36% 18.33% 15.34% -----%
[LOGO] EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Fees You Pay Directly
Shareholder Transaction Expenses Class A Class B Class C
Maximum sales charge imposed on 4.75% None None
purchases (as a % of offering price)
Maximum deferred sales charge None 5.00% 1.00%
Fees the Fund Pays Directly (and You Pay Indirectly)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class A 0.90% 0.25% 0.31% 1.46%
Class B 0.90% 1.00% 0.31% 2.21%
Class C 0.90% 1.00% 0.31% 2.21%
The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual fundsand is
for illustration only. The example assumes a 5% average annual returnand that
you reinvest all of your dividends. Your actual costs may be higher or lower.
Example of Fund Expenses
Assuming Redemption at Assuming
End of Period No Redemption
Class A Class B Class C Class B Class C
After 1 year $149 $724 $324 $224 $224
After 3 years $462 $721 $691 $691 $691
After 5 years $797 $1,205 $1,185 $1,185 $1,185
After 10 years $1,746 $2,261 $2,544 $2,266 $2,544
GROWTH AND INCOME FUNDS 13
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E V E R G R E E N
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Small Cap
Equity Income Fund
FUND FACTS:
Goal:
* Current Income
* Capital Growth
Principal Investments:
* Small-Cap Common
Stocks
* Small-Cap Convertible
Preferred Stocks
Classes of Shares:
* Class A
* Class B
* Class C
Investment Advisor:
* Evergreen Asset
Management Corp.
Portfolio Manager:
* Nola Maddox Falcone
NASDAQ Symbols:
ESQAX (Class A)
ESCIX(Class B)
[LOGO] INVESTMENT GOAL
The Fund seeks current income and capital growth in the value of its shares.
[LOGO] INVESTMENT STRATEGY
The Fund invests primarily in common stocks and convertible preferred stocks of
small companies (less than $1 billion in market capitalization). The Fund's
manager seeks to limit the investment risk of small company investing by seeking
stocks that produce regular income and trade below what the manager considers
their intrinsic value. The Fund's manager looks specifically for various growth
triggers, or catalysts, that will bring the stock's price into line with its
actual or potential value such as new products, new management, changes in
regulation and/or restructuring potential.
Dividend Payment Schedule: Quarterly
[LOGO] RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:
* Stock Market Risk
* Interest Rate Risk
* Credit Risk
In addition, your investment will be subject to special risks associated with
investing in securities issued by small companies. Smaller, less
well-established companies tend to be more dependent on individual managers and
limited products and product lines. Additionally, securities issued by small
companies also tend to fluctuate in value more dramatically than those of larger
companies.
[LOGO] PORTFOLIO MANAGEMENT
The Fund's investment advisor is Evergreen Asset Management Corp. ("EAMC").
The day-to-day management of the Fund is handled by Nola Maddox Falcone,
President and Co-Chief Executive Officer of EAMC. Ms. Falcone has been the
Fund's portfolio manager since its inception in 1993.
14 GROWTH AND INCOME FUNDS
<PAGE>
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E V E R G R E E N
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[LOGO] PERFORMANCE
The following charts show how the Fund has performed in the past.
This chart below shows the percentage gain or loss for Class A shares of the
Fund in each calendar year since the Class A shares' inception on 1/3/95. It
should give you a general idea of how the Fund's return has varied from year-to-
year. This graph includes the effects of Fund expenses, but not sales charges.
Returns would be lower if sales charges were included.
Year-by-Year Total Return for Class A Shares (%)
1997 1996 1995(*) 1994 1993 1992 1991 1990 1989 1988
33.34 22.01 28.93
Best Quarter: 3rd Quarter 1997 +13.21%
Worst Quarter: 3rd Quarter 1996 +1.83%
(*)From inception on 1/3/95 to 12/31/95.
Year to date total return through 9/30/98 is __.
This next table lists the Fund's average year-by-year return over the past year
and since each classes' inception, excluding sales charges. At the bottom of the
table you can compare this performance with the Russell 2000 Index and the
Wilshire Small Cap Value Index. The Russell 2000 Index is an unmanaged index of
2000 publicly-traded U.S. stocks and is often used to indicate the performance
of the broad stock market, including smaller companies. The Wilshire Small Cap
Value Index is an unmanaged index of representative small company value stocks
including investments similar to the Fund's. Neither index is an actual
investment. Past performance is not an indication of future results.
Average Annual Total Return
(for the period ended 12/31/97)
Inception Since
Date 1 year 5 year 10 year Inception
Class A 1/3/95 33.34% N/A N/A 28.24%
Class B 1/3/95 2.49% N/A N/A 20.04%
Class C 1/24/95 2.49% N/A N/A 20.01%
Russell 2000 - - - -----%
Wilshire Small Cap - - - -----%
[LOGO] EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Fees You Pay Directly
Shareholder Transaction Expenses Class A Class B Class C
Maximum sales charge imposed on 4.75% None None
purchases (as a % of offering price)
Maximum deferred sales charge None 5.00% 1.00%
Fees the Fund Pays Directly (and You Pay Indirectly)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class A 1.00% 0.25% 0.43% 1.68%
Class B 1.00% 1.00% 0.43% 2.43%
Class C 1.00% 1.00% 0.43% 2.43%
The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual fundsand is
for illustration only. The example assumes a 5% average annual returnand that
you reinvest all of your dividends. Your actual costs may be higher or lower.
Example of Fund Expenses
Assuming Redemption at Assuming
End of Period No Redemption
Class A Class B Class C Class B Class C
After 1 year $638 $746 $348 $246 $246
After 3 years $979 $788 $758 $758 $758
After 5 years $1,344 $1,316 $1,296 $1,296 $1,296
After 10 years $2,368 $2,494 $2,766 $2,494 $2,766
GROWTH AND INCOME FUNDS 15
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E V E R G R E E N
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THE FUNDS INVESTMENT ADVISORS
The investment advisor manages a Fund's investments and supervises its daily
business affairs. There are three different investment advisors for the
Evergreen Growth and Income Funds. The advisor for each Fund is listed in the
section entitled portfolio management. All investment advisors for the Evergreen
Funds are subsidiaries of First Union Corporation, the sixth largest bank
holding company in the United States, with over $220 billion in consolidated
assets as of {date}. First Union Corporation is located at 310 South College
Street, Charlotte, North Carolina 28288-0630.
Evergreen Asset Management Corp. (EAMC), with its predecessors, has served
as investment advisor to the Evergreen Funds since 1971, and currently manages
over $xx billion in assets for xx of the Evergreen Funds. EAMC is located at
2500 Westchester Avenue, Purchase, New York10577.
Evergreen Investment Management Company (EIMC) has been managing mutual funds
and private accounts since 1932 and currently manages over $xx billion in assets
for xx of the Evergreen Funds. EIMC is located at 200 Berkeley Street, Boston,
Massachusetts
02116-5034.
Capital Management Group of First Union National Bank (CMG) has been managing
money for over 50 years and currently manages over $xx billion in investment
assets, including xx of the Evergreen Funds. CMG is located at 201 South College
Street, Charlotte, North Carolina 28288-0630.
Year 2000 Compliance
The investment advisors and other service providers for the Evergreen Funds are
taking steps to address any potential Year 2000-related computer problems.
However, there is some risk that these problems could disrupt the funds'
operations or financial markets generally.
CALCULATING THE SHARE PRICE
The value of one share, also known as the net asset value, or NAV, is calculated
on each day the New York Stock Exchange is open as of the close of the Exchange
(normally 4:00 p.m. Eastern time). We calculate the share price for each share
by adding up the total assets of the portfolio, subtracting all liabilities,
then dividing by the total number of shares outstanding. Each security held by a
fund is valued using the most recent market quote for that security. If no
market quotation is available for a given security, we will price that security
at fair value according to policies established by the Funds' Board of Trustees.
The amount you are charged for a fund purchase or redemption is the next price
calculated after the order is received and all required information is provided.
The value of your account at any given time is the latest share price multiplied
by the number of shares you own. Your account balance may change daily because
the share price may change daily.
HOW TO CHOOSE A FUND
There are two important steps to choosing an Evergreen Fund:
1. Most importantly, read the prospectus to see if the
fund is suitable for you.
2. Talk to an investment professional. He or she is qualified to give you
investment advice based on your investment goals and financial situation and
will be able to answer questions you may have after reading the fund's
prospectus. He or she can also assist you through all phases of opening your
account.
HOW TO CHOOSE THE SHARE
CLASS THAT BEST SUITS YOU
After choosing a fund, you select a share class. Evergreen Funds offers three
different retail share classes, each with its own sales charge. Pay particularly
close attention to this fee structure so you know how much you will be paying
before you invest.
16 GROWTH AND INCOME FUNDS
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E V E R G R E E N
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Class A
If you select Class A shares, you may pay a front-end sales charge of up to
4.75%. This charge is deducted from your deposit before it is invested. The
actual charge depends on the amount invested, as shown below:
As a % of As a % Dealer
Your NAV excluding of your commission
Investment sales charge investment as a % of NAV
Up to $49,999 4.75% 4.99% 4.25%
$50,000-$99,999 4.50% 4.71% 4.25%
$100,000-$249,999 3.75% 3.90% 3.25%
$250,000-$499,999 2.50% 2.56% 2.00%
$500,000-$999,999 2.00% 2.04% 1.75%
$1,000,000 and over 0% 0% 1.00% to .25%
Although no front-end sales charge applies to purchases of $1,000,000 and over,
you will pay a 1% deferred sales charge if you redeem any such shares within
thirteen months of purchase.
Two ways you can reduce your Class A sales charges:
1.Rights of Accumulation (ROA) allow you to combine your
investment with all existing investments in all your Evergreen fund accounts
when determining whether you meet the threshold for a reduced Class A sales
charge.
2.Letter of Intent (LOI). If you agree to purchase at least $50,000 over a
13-month period, you pay the same sales charge as if you had invested the
full amount all at once. The fund will hold a certain portion of your
investment in escrow until your LOI commitment is met.
Contact your investment dealer or the Evergreen Service Company at
1-800-343-2898 if you think you may qualify for either of these services.
The Funds may also sell Class A shares at net asset value without any initial
or contingent sales charge to certain Directors, Trustees, officers and
employees of the Fund, EAMC, EIMC, CMG and certain of their affiliates, and to
members of their immediate families, to registered representatives of firms
with dealer agreements with EDI, and to a bank or trust company acting as
trustee for a single account.
Class B
If you select Class B shares, you do not pay a front-end sales charge, so the
entire amount of your purchaseis invested in the fund. However, your shares are
subject to an additional expense, known as the 12(b)-1 fee.In addition, you may
pay a deferred charge if you redeem your shares within six years. The amount of
the deferred sales charge depends on the length of time the shares were held, as
shown below:
Time Held Contingent Deferred Sales Charge
Less than 13 months 5.00%
1 to 2 years 4.00%
2 to 3 years 3.00%
3 to 4 years 3.00%
4 to 5 years 2.00%
5 to 6 years 1.00%
6 to 7 years 0%
After 7 years Converts to Class A
Dealer Allowance 4.00%
The deferred sales charge percentage is applied to the value of the shares when
purchased or when redeemed, whichever is less. No deferred sales charge is paid
on shares purchased through dividendor capital gains reinvestmentsor on any
gains in the value of your shares.
Class C
Class C Shares are similar to B Shares, except the deferred sales charge is less
and only applies if shares are redeemed within the first year after the month of
purchase. Also, these shares do not convert to Class A shares and so the higher
12(b)-1 fee continues for the life of the account.
Time Held Deferred Sales Charge
Less than 1 year 1.00%
1 year or more 0.00%
Waiver of Class B or C Sales Charges
You will not be assessed a redemption charge for Class B or Class C shares if
you sell in the following situations:
* When the shares were purchased through
reinvestment of
dividends/capital gains
* Death or disability
* Lump-sum distribution from a 401(k) plan or other benefit
plan qualified under ERISA
* Automatic IRA withdrawals if you are at least 59 1/2
* Automatic withdrawals of up to 1.5% of the account balance
a month
* Loan proceeds and financial hardship distributions from a
retirement plan
* Returns of excess contributions or excess deferral amounts
made to a retirement plan participant
GROWTH AND INCOME FUNDS 17
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E V E R G R E E N
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HOW TO BUY SHARES
Evergreen Funds' low investment minimums make investing easy. Once you decide on
an amount and a share class, simply fill out an application and send in your
payment, or talk to your investment professional.
Minimum Investments
Initial Additional
Regular Accounts $1,000 $0
IRAs $250 $0
Systematic Investment Plan $50 $25
<TABLE>
<CAPTION>
<S> <C> <C>
Method Opening an Account Adding to an Account
By Mail or * Complete and sign the account application. * Make your check payable to Evergreen Funds
Through * Make the check payable to Evergreen Funds. * Write a note specifying:
an Investment * Mail the application and your check to the address below: - the fund name
Professional Evergreen Service Company Overnight Address: - share class
P.O. Box 2121 Evergreen Service Company - your account number
Boston, MA 02106-2121 200 Berkeley St. - the name(s) in which the account is
Boston, MA 02116 registered
* Mail to the address to the left or deliver
to your investment representative
By Phone * Or deliver them to your investment representative (provided he * Call the Evergreen Express Line at
or she has a broker/dealer arrangement with Evergreen) 1-800-346-3858 anytime 24 hours a day or
* Call 1-800-343-2898 to set up an account number and get wiring 1-800-343-2898 between 8 a.m. and 6 p.m.
instructions (call before 12 noon if you want wired funds to be Eastern time, Monday through Friday.
credited that day). * If your bank account is set up on file,
you can request either:
* Instruct your bank to wire or transfer your purchase (they may
charge a wiring fee). - Federal Funds Wire (offers immediate
* Complete the account application and mail to: access to funds) or
Evergreen Service Company Overnight Address: - Electronic transfer through Automated
P.O. Box 2121 Evergreen Service Company Clearing House (ACH) which avoids wiring
Boston, MA 02106-2121 200 Berkeley St. fees.
Boston, MA 02116
* Wires received after 4:00 p.m. Eastern time on market trading
days will receive the next market day's closing price.
By Exchange * You can make an additional investment by exchange from an
existing Evergreen Funds account by contacting your investment
representative or calling the Evergreen Express Line at
1-800-346-3858(*).
* There is no sales charge or redemption fee when exchanging
funds within the Evergreen fund family.
* Orders placed before 4 p.m. Eastern time on market trading days
will receive that day's closing share price (if not, you will
receive the next market day's closing price).
* Exchanges are limited to three per calendar quarter, and five
per calendar year.
* Exchanges between accounts which do not have identical ownership
must be in writing with a signature guarantee (see below).
Systematic * You can transfer money automatically from your bank account * To establish automatic investing for an
Investment into your fund on a monthly basis. existing account, call 1-800-343-2898 for
Plan (SIP) * Initial investment minimum is $50 if you invest at least $25 per an application.
month with this service. * The minimum is $25 per month or $75 per
quarter.
* To enroll, check off the box on the account application and * You can also establish an investing
provide: program through direct deposit from your
- your bank account information paycheck. Call 1-.800-343-2898 for details.
- the amount and date of your monthly investment
</TABLE>
(*) Once you have authorized either the telephone exchange or redemption
service, anyone with a Personal Identification Number (PIN) and the required
account information (including your broker) can request a telephone transaction
in your account. All calls are recorded or monitored for verification,
recordkeeping and quality-assurance purposes. The Evergreen Funds reserve the
right to terminate the exchange privilege of any shareholder who exceeds the
listed maximum number of exchanges, as well as to reject any large dollar
exchange if placing it would, in the judgment of the portfolio managers,
adversely affect the price of the fund.
18 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
- --------------------------------------------------------------------------------
HOW TO SELL SHARES
We offer you several convenient ways to redeem your shares in any of the
Evergreen Funds:
<TABLE>
<CAPTION>
<S> <C>
Methods Requirements
Call Us * Call the Evergreen Express Line at 1-800-346-3858 anytime 24
hours a day or 1-800-343-2898 between 8 a.m. and 6 p.m.
Eastern time, Monday through Friday.
* This service must be authorized ahead of time, and is only
available for regular accounts.(*)
* All authorized requests before 4 p.m. Eastern time on market
trading days will be processed at that day's closing price.
Requests after 4 p.m. will be processed the following
business day.
* We can either:
- wire the proceeds into your bank account (service
chargesmay apply)
- electronically transmit your redemption to your bank
account via the Automated Clearing House (ACH) service -
mail you a check.
* All telephone calls are recorded for your protection. We are
not responsible for properly acting on telephone orders we
reasonably believe are genuine.
* See exceptions list below for requests that must be made in
writing.
* You can mail a redemption request to: Evergreen Service Company Overnight Address:
Write Us P.O. Box 2121 Evergreen Service Company
Boston, MA 02106-2121 200 Berkeley St.
Boston, MA 02116
* Your letter of instructions must:
- list the fund name and the account number
- indicate the number of shares or dollar value you wish to
redeem
- be signed by the registered owner(s)
* See list below for requests that must be signature guaranteed.
* To redeem from an IRA or other retirement account, call
1-800-346-3858for a special application.
Sell Your * You may also redeem your shares through participating
Shares in broker-dealers by delivering a letter as described above to
Person your broker dealer.
* A fee may be charged for this service.
Systematic * You can transfer money automatically from your fund on a monthly
Withdrawal or quarterly basis -- without redemption fees.
Plan (SWP) * The withdrawal can be mailed to you, or deposited directly
to your bank account.
* A minimum of $75 per month
* A maximum of 1% of your account per month or 3% per quarter
* To enroll, call 1-800-343-2898 for an application.
Timing of Proceeds
Normally, we will send your redemption proceeds on the next business day after
we receive your request; however, we reserve the right to wait up to seven
business days to redeem any investments made by check and five business days for
investments made by ACH transfer. We also reserve the right to redeem in kind,
and to redeem the account if your redemption brings the account balance below
the initial minimum of $1,000.
Exceptions: Redemption Requests That Require A Signature Guarantee
To protect you and Evergreen Funds against fraud, certain redemption requests
must be in writing with your signature guaranteed. A signature guarantee can be
obtained at most banks and securities dealers. A notary public is not authorized
to provide a signature guarantee. The following circumstances require signature
guarantees:
* You are redeeming more than $50,000
* You want the funds transmitted to a bank account not listed on the account
* You want the proceeds payable to anyone other than the registered owner(s) of
the account
* Either your address or the address of your bank account has been changed
within 30 days
* The account is registered in the name of a corporation, fiduciary and/or
institution.
In these cases, additional documentation is required:
corporate accounts: certified copy of corporate resolution
fiduciary accounts: copy of the power of attorney or other governing document
Who Can Provide A Signature Guarantee:
* Commercial Bank
* Trust Company
* Savings Association
* Credit Union
* Member of a U.S.stock exchange
</TABLE>
GROWTH AND INCOME FUNDS 19
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
- --------------------------------------------------------------------------------
OTHER SERVICES
Evergreen Express Line
Use our automated, 24-hour service to check your balance, purchase, redeemor
exchange shares, find a fund's price, yield or total return, order a statement
or duplicate tax form, or hear market commentary from Evergreen portfolio
managers.
Automatic Reinvestment of Dividends
For the convenience of investors, all dividends and capital gains distributions
are automatically reinvested, unless you request otherwise. Distributions can be
made by check or electronic transfer through the Automated Clearing House (ACH)
to your bank account. The details of your dividends and other distributions will
be included on your statement.
Payroll Deduction
If you want to invest automatically through your paycheck, call us to find out
how you can set up direct payroll deposit. Funds will be deposited into your
account using the Electronic Funds Transfer System. We will provide the account
number. Your payroll department will let you know the date of the pay period
when your investment begins.
Telephone Investment Plan
You may make additional investments electronically in an existing account at
amounts of not less than $100 or more than $10,000 per investment. Telephone
requests received by 4:00 p.m. Eastern time will be credited to your account the
day the request is received.
Dividend Exchange
You may elect on the application to reinvest capital gains and/or dividends
earned in one Evergreen fund into an existingaccount in anotherEvergreen fundin
the same share class -- automatically. Please indicate on the application the
Evergreen fund(s) into which you want to invest the distributions.
Reinvestment Privileges
Under certain circumstances, shareholders may, within one year of redemption,
reinstate their accounts at the current price (net asset value).
THE TAX CONSEQUENCES OF
INVESTING IN THE FUND
You may be taxed in two ways:
* On fund distributions (capital gains and dividends)
* On the profit you make when you sell any or all of
your shares.
Fund Distributions
A mutual fund passes along to all of its shareholders any income or profits it
receives from its investments. The shareholders of the fund then pay any taxes
due, whether they receive these distributions in cash or elect to have them
reinvested. The fund distributes two types of taxable income to you:
* Dividends. The fund pays either a monthly, quarterly or yearly dividend from
the dividends, interest and other income on the securities in which it
invests. The frequency of dividends for each particular Evergreen growth and
income fund is listed under the fund's investment strategy.
* Capital Gains. When a mutual fund sells a security it owns for a profit, the
result is a capital gain. Evergreen Growth and Income Funds generally
distribute capital gainsat least once a year, near the end of the calendar
year. Short-term capital gains reflect securities held by the fund for a year
or less and are considered ordinary income just like dividends. Profits on
securities held longer than 12 months are considered long-term capital gains
and are taxed at a special tax rate (20% for most taxpayers, on sales made
after January 1, 1998.)
All distributions with the exception of monthly dividends will cause a fund's
share price to drop by the amount of a distribution.
Dividend and Capital Gain Reinvestment
Unless you choose otherwise on the account application, all dividend and capital
gain payments will be reinvested to buy additional shares. Distribution checks
that are returned and distribution checks that are uncashed when the shareholder
has failed to respond to mailings from the shareholder servicing agent will
automatically be reinvested to buy additional shares.
20 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
- --------------------------------------------------------------------------------
No interest will accrue on amounts represented by uncashed distribution or
redemption checks.
We will send you a complete statement each January with the federal tax status
of dividends and distributions paid by each portfolio during the previous
calendar year.
Profits You Realize When You Redeem Shares
When you sell shares in a mutual fund, whether by redeemingorexchanging,you have
created a taxable event. You must report any gain or loss on your taxes unless
the transaction occurred in a tax-deferred retirement plan or a money market
fund.It is your responsibility to keep accurate records of your mutual fund
transactions. You will need this information when you file your income taxes,
since you must report any capital gains or losses you incur when you sell
shares. Remember, an exchange is a purchase and a sale for tax purposes.
Tax Reporting
Evergreen Service Company provides you with a tax statement of your dividend and
capital gains distributions for the year on Form 1099 DIV. Proceeds from a sale
are reported on Form 1099B. You must report these on your taxes. Since the IRS
receives a copy as well, you could pay a penalty if you neglect to report them.
Evergreen Service Company will send you a tax information guide each year during
tax season, which may include a cost basis statement detailing the gain or loss
on taxable transactions you made during the year. Please consult your own tax
advisor for further information regarding the federal, state and local tax
consequences of an investment in the funds.
Retirement Plans
You may invest in each fund through various retirement plans, including IRAs,
401(k) plans, Simplified Employee Plan (SEP) IRAs, 403(b) plans, 457 plans and
others. For special rules concerning these plans, including applications,
restrictions, tax advantages, and potential sales charge waivers, contact your
broker/dealer. To determine if a retirement plan is appropriate for you, consult
your tax advisor.
SALES COMPENSATION
AND EXPENSES
Every mutual fund has fees and expenses that are assessed either directly or
indirectly. This section describes each of those fees.
Management Fee
The management fee pays for the normal expenses of managing the fund, including
portfolio manager salaries, research costs, investment advisory fees and related
expenses.
12(b)-1 Fee
The Trustees of the Evergreen Funds have approved a policy to assess 12(b)-1
fees for Class A, B and C shares. These fees will increase the cost of your
investment. The purpose of the 12(b)-1 fee is to promote the sale of more shares
of funds to the public. The fund might use this fee for advertising and
marketing and as a "service fee" to the broker/dealer to compensate for
additional shareholder services.
Other Expenses
This figure covers miscellaneous fees from outside service providers. These may
include legal, audit, custodial and safekeeping fees, the printing and mailing
of reports and statements, automatic reinvestment of distributions and other
conveniences for which the shareholder pays no transaction fees.
Total Fund Operating Expenses
The total cost of running the fund is called the expense ratio. As a
shareholder, you are not charged these fees directly; instead they are taken out
before the fund's price is calculated, and are expressed as a percentage of the
fund's net assets. The effect of these fees is eflected in any performance
numbers for that share class. Because these fees are "invisible," investors
should examine them closely in the prospectus, especially when comparing one
fund with another fund in the same investment category. There are two things to
remember about expense ratios: 1) your total return in the fund is reduced in
direct proportion to the fees; and 2) expense ratios can vary greatly between
funds and fund families, from under 0.25 percent to over 3 percent.
GROWTH AND INCOME FUNDS 21
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
This section looks in detail at the results for one share in each share class of
the fund -- how much income it earned, how much of this income was passed along
as a distribution and how much the return was reduced by expenses. These tables,
except for Income and
<TABLE>
<CAPTION>
UTILITY FUND CLASS A
Year Ended July 31, Year Ended December 31,
------------------- -----------------------
1998 1997** 1996 1995 1994*
<S> <C> <C> <C> <C> <C>
Net asset value beginning of period $11.45 $10.57 $10.80 $9.00 $10.00
Income from investment operations
Net investment income 0.43 0.25 0.41 0.44 0.45
Net gains or losses on securities (both realized and unrealized) 1.44 0.87 0.05 2.25 (1.01)
Total from investment operations 1.87 1.12 0.46 2.69 (0.56)
Less distributions
Dividends (from net investment income) (0.44) (0.24) (0.41) (0.44) (0.44)
Distributions (from capital gains) (1.12) 0 (0.28) (0.45) 0
Total distributions (1.56) (0.24) (0.69) (0.89) (0.44)
Net asset value end of period $11.76 $11.45 $10.57 $10.80 $9.00
Total Return+ 17.30% 10.72% 4.40% 30.70% (5.60%)
Ratios/Supplemental Data
Net assets end of period (thousands) $95,300 $91,638 $96,243 $107,872 $4,190
Ratios to average net assets:
Total expenses 0.99% 1.00%++ 0.87% 0.79% 0.53%++
Total expenses, excluding indirectly paid expenses 0.99% 0.99%++ N/A N/A N/A
Total expenses, excluding fee waivers and expense reimbursements 1.14% 1.19%++ 1.15% 1.18% 1.43%++
Net investment income 3.58% 3.85%++ 3.87% 4.51% 5.07%++
Portfolio turnover rate 62% 50% 59% 88% 23%
</TABLE>
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
<TABLE>
<CAPTION>
FUND FOR TOTAL RETURN CLASS A
Year Ended July 31, Year Ended November 30,
------------------- -------------------------------------
1998 1997** 1996 1995 1994 1993*
<S> <C> <C> <C> <C> <C> <C>
Net asset value beginning of period $20.69 $17.33 $13.83 $11.75 $12.31 $12.06
Income from investment operations
Net investment income 0.21 0.18 0.26 0.25 0.24 0.21
Net gains or losses on securities (both realized and unrealized) 2.46 3.34 3.83 2.80 (0.56) 1.31
Total from investment operations 2.67 3.52 4.09 3.05 (0.32) 1.52
Less distributions
Dividends (from net investment income) (0.19) (0.16) (0.26) (0.32) (0.24) (0.24)
Distributions (from capital gains) (1.52) 0 (0.33) (0.65) 0 (1.03)
Total distributions (1.71) (0.16) (0.59) (0.97) (0.24) (1.27)
Net asset value end of period $21.65 $20.69 $17.33 $13.83 $11.75 $12.31
Total Return+ 13.85% 20.40% 29.83% 26.57% (2.65%) 12.67%
Ratios/Supplemental Data
Net assets end of period (thousands) $52,667 $47,812 $40,487 $27,037 $23,162 $26,367
Ratios to average net assets:
Total expenses 1.21% 1.24%++ 1.41% 1.69% 1.59% 1.85%
Total expenses, excluding indirectly paid expenses 1.21% 1.22%++ 1.39% N/A N/A N/A
Net investment income 1.01% 1.46%++ 1.66% 1.94% 1.93% 1.63%
Portfolio turnover rate 66% 41% 41% 77% 57% 92%
</TABLE>
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
22 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
- --------------------------------------------------------------------------------
Growth Fund, have been audited by KPMG Peat Marwick LLP, the Funds' independent
accountants. Income and Growth Fund's tables have been audited by
PricewaterhouseCoopers LLP, that Fund's independent accountants. For a more
complete picture of the Fund's financials, please see the Fund's Annual Report
as well as the Statement of Additional Information (SAI).
<TABLE>
<CAPTION>
CLASS B CLASS C
Year Ended July 31, Year Ended December 31, Year Ended July 31, Year Ended December 31,
------------------- --------------------------------- ------------------- ------------------------------
1998 1997** 1996 1995 1994* 1998 1997** 1996 1995 1994***
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$11.46 $10.58 $10.81 $9.00 $10.00 $11.46 $10.58 $10.82 $9.01 $9.33
0.34 0.20 0.33 0.37 0.39 0.34 0.20 0.33 0.37 0.12
1.44 0.87 0.05 2.26 (1.01) 1.44 0.87 0.04 2.26 (0.33)
1.78 1.07 0.38 2.63 (0.62) 1.78 1.07 0.37 2.63 (0.21)
(0.36) (0.19) (0.33) (0.37) (0.38) (0.36) (0.19) (0.33) (0.37) (0.11)
(1.12) 0 (0.28) (0.45) 0 (1.12) 0 (0.28) (0.45) 0
(1.48) (0.19) (0.61) (0.82) (0.38) (1.48) (0.19) (0.61) (0.82) (0.11)
$11.76 $11.46 $10.58 $10.81 $9.00 $11.76 $11.46 $10.58 $10.82 $9.01
16.31% 10.21% 3.60% 29.90% (6.20%) 16.31% 10.21% 3.50% 29.80% (2.20%)
$43,776 $36,738 $38,511 $35,662 $28,792 $486 $379 $396 $246 $128
1.74% 1.75%++ 1.62% 1.53% 1.27%++ 1.74% 1.75%++ 1.63% 1.54% 1.94%++
1.74% 1.74%++ N/A N/A N/A 1.74% 1.74%++ N/A N/A N/A
1.88% 1.94%++ 1.89% 1.93% 2.11%++ 1.88% 1.94%++ 1.90% 1.93% 2.78%++
2.82% 3.10%++ 3.12% 3.78% 4.19%++ 2.82% 3.10%++ 3.13% 3.76% 3.96%++
62% 50% 59% 88% 23% 62% 50% 59% 88% 23%
</TABLE>
(*) For the period from January 4, 1994 (commencement of class operations) to
December 31, 1994.
(**) For the seven-month period ended July 31, 1997. The Fund changed its
fiscal year end from December 31 to July 31, effective July 31, 1997.
(***) For the period from September 2, 1994 (commencement of class operations)
to December 31,1994.
<TABLE>
<CAPTION>
CLASS B
Year Ended July 31, Year Ended November 30,
------------------- ---------------------------------------------------
1998 1997** 1996 1995 1994 1993*
<S> <C> <C> <C> <C> <C>
$20.63 $17.31 $13.84 $11.77 $12.32 $12.65
0.06 0.09 0.15 0.15 0.15 0.10
2.45 3.31 3.80 2.82 (0.56) 0.74
2.51 3.40 3.95 2.97 (0.41) 0.84
(0.06) (0.08) (0.15) (0.25) (0.14) (0.14)
(1.52) 0 (0.33) (0.65) 0 (1.03)
(1.58) (0.08) (0.48) (0.90) (0.14) (1.17)
$21.56 $20.63 $17.31 $13.84 $11.77 $12.32
13.01% 19.68% 28.73% 25.59% (3.36%) 6.68%
$105,748 $94,309 $43,526 $20,605 $7,314 $4,283
1.97% 2.02%++ 2.18% 2.47% 2.31% 2.64%++
1.97% 2.00%++ 2.16% 2.46% N/A N/A
0.25% 0.58%++ 0.88% 1.06% 1.27% 0.84%++
66% 41% 41% 77% 57% 92%
</TABLE>
<TABLE>
<CAPTION>
CLASS C
Year Ended July 31, Year Ended November 30,
------------------- -------------------------------------------------
1998 1997** 1996 1995 1994 1993*
<S> <C> <C> <C> <C> <C>
$20.65 $17.32 $13.85 $11.78 $12.33 $12.65
0.05 0.09 0.14 0.16 0.15 0.10
2.46 3.32 3.81 2.81 (0.56) 0.75
2.51 3.41 3.95 2.97 (0.41) 0.85
(0.06) (0.08) (0.15) (0.25) (0.14) (0.14)
(1.52) 0 (0.33) (0.65) 0 (1.03)
(1.58) (0.08) (0.48) (0.90) (0.14) (1.17)
$21.58 $20.65 $17.32 $13.85 $11.78 $12.33
12.99% 19.73% 28.71% 25.57% (3.36%) 6.76%
$20,851 $21,125 $14,562 $9,503 $5,968 $5,030
1.97% 2.01%++ 2.17% 2.47% 2.34% 2.64%++
1.97% 1.99%++ 2.15% 2.44% N/A N/A
0.25% 0.66%++ 0.89% 1.16% 1.21% 0.83%++
66% 41% 41% 77% 57% 92%
</TABLE>
(*) For the period from February 1, 1993 (commencement of class operations) to
November 30, 1993.
(**) For the eight-month period ended July 31, 1997. The Fund changed its fiscal
year end from November30to July 31, effective July 31, 1997.
GROWTH AND INCOME FUNDS 23
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME AND GROWTH FUND CLASS A
Year Ended July 31, Year Ended January 31,
------------------- ------------------------------
1998 1997** 1997 1996 1995*
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value beginning of period $23.94 $21.79 $20.15 $17.28 $17.09
------ ------ ------ ------ ------
...............................................................................................................................
Income from investment operations
Net investment income 1.05 0.52# 1.02 1.01 0.02
..............................................................................................................................
Net gains or losses on securities (both realized and unrealized) 0.81 2.15 1.67 2.94 0.17
------ ------ ------ ------ ------
..............................................................................................................................
Total from investment operations 1.86 2.67 2.69 3.95 0.19
------ ------ ------ ------ ------
...............................................................................................................................
Less distributions
Dividends (from net investment income) (1.02) (0.52) (1.05) (1.08) 0
...............................................................................................................................
Distributions (from capital gains) (1.59) 0 0 0 0
------ ------ ------ ------ ------
...............................................................................................................................
Total distributions (2.61) (0.52) (1.05) (1.08) 0
------ ------ ------ ------ ------
..............................................................................................................................
Net asset value end of period $23.19 $23.94 $21.79 $20.15 $17.28
------ ------ ------ ------ ------
...............................................................................................................................
Total Return+ 7.93% 12.45% 13.80% 23.40% 1.10%
...............................................................................................................................
Ratios/Supplemental Data
Net assets end of period (thousands) $15,005 $11,955 $9,678 $4,412 $119
...............................................................................................................................
Ratios to average net assets:
Total expenses 1.50% 1.45%++ 1.44% 1.36% 1.45%++
...............................................................................................................................
Total expenses, excluding indirectly paid expenses 1.50% 1.45%++ N/A N/A N/A
..............................................................................................................................
Total expenses, excluding fee waivers and expense reimbursements N/A N/A N/A 2.50% N/A
...............................................................................................................................
Interest expense N/A N/A 0.03% N/A N/A
...............................................................................................................................
Net investment income 4.20% 4.69%++ 4.93% 5.39% 4.09%++
...............................................................................................................................
Portfolio turnover rate 133% 72% 168% 138% 151%
</TABLE>
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
# Net investment income is based on average shares outstanding during the
period.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BLUE CHIP FUND CLASS A
Period Ended
------------
July 31, 1998*
- --------------------------------------------------------------------------------
<S> <C>
Net asset value beginning of period $27.39
------
................................................................................
Income from investment operations
Net investment income 0.08
................................................................................
Net gains or losses on securities (both realized and unrealized) 3.01
------
................................................................................
Total from investment operations 3.09
------
................................................................................
Less distributions
Dividends (from net investment income) (0.06)
................................................................................
Distributions (from capital gains) 0
................................................................................
Total distributions (0.06)
------
................................................................................
Net asset value end of period $30.42
------
................................................................................
Total Return+ 11.29%
................................................................................
Ratios/Supplemental Data
Net assets end of period (thousands) $284,735
................................................................................
Ratios to average net assets:
Total expenses 1.20%++
................................................................................
Total expenses, excluding indirectly paid expenses 1.20%++
................................................................................
Net investment income 0.49%++
................................................................................
Portfolio turnover rate 112%
</TABLE>
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
* For the period from January 20, 1998 (commencement of class operations) to
July 31, 1998.
24 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
- --------------------------------------------------------------------------------
INCOME AND GROWTH FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
CLASS B
Year Ended July 31, Year Ended January 31,
------------------- -------------------------------
1998 1997** 1997 1996 1995*
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value beginning of period $23.81 $21.69 $20.08 $17.28 $17.09
------ ------ ------ ------ ------
.................................................................................................................................
Income from investment operations
Net investment income 0.86 0.43# 0.89 0.91 0.02
.................................................................................................................................
Net gains or losses on securities (both realized and unrealized) 0.81 2.15 1.64 2.87 0.17
---- ---- ---- ---- ----
.................................................................................................................................
Total from investment operations 1.67 2.58 2.53 3.78 0.19
---- ---- ---- ---- ----
.................................................................................................................................
Less distributions
Dividends (from net investment income) (0.85) (0.46) (0.92) (0.98) 0
.................................................................................................................................
Distributions (from capital gains) (1.59) 0 0 0 0
------ - - - -
.................................................................................................................................
Total distributions (2.44) (0.46) (0.92) (0.98) 0
------ ------ ------ ------ -
.................................................................................................................................
Net asset value end of period $23.04 $23.81 $21.69 $20.08 $17.28
------ ------ ------ ------ ------
.................................................................................................................................
Total Return+ 7.13% 12.06% 13.00% 22.40% 1.10%
.................................................................................................................................
Ratios/Supplemental Data
Net assets end of period (thousands) $54,544 $43,977 $35,323 $14,750 $599
.................................................................................................................................
Ratios to average net assets:
Total expenses 2.25% 2.20%++ 2.19% 2.11% 2.23%++
................................................................................................................................
Total expenses, excluding indirectly paid expenses 2.25% 2.20%++ N/A N/A N/A
.................................................................................................................................
Total expenses, excluding fee waivers and expense reimbursements N/A N/A N/A 2.25% N/A
.................................................................................................................................
Interest expense N/A N/A 0.03% N/A N/A
.................................................................................................................................
Net investment income 3.46% 3.94%++ 4.17% 4.69% 3.23%++
................................................................................................................................
Portfolio turnover rate 133% 72% 168% 138% 151%
<CAPTION>
CLASS C
Year Ended July 31, Year Ended January 31,
------------------- ----------------------------
1998 1997** 1997 1996 1995*
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value beginning of period $23.81 $21.69 $20.08 $17.27 $17.09
------ ------ ------ ------ ------
................................................................................................................................
Income from investment operations
Net investment income 0.87 0.44# 0.87 0.90 0.01
................................................................................................................................
Net gains or losses on securities (both realized and unrealized) 0.80 2.14 1.66 2.89 0.17
---- ---- ---- ---- ----
................................................................................................................................
Total from investment operations 1.67 2.58 2.53 3.79 0.18
---- ---- ---- ---- ----
................................................................................................................................
Less distributions
Dividends (from net investment income) (0.85) (0.46) (0.92) (0.98) 0
................................................................................................................................
Distributions (from capital gains) (1.59) 0 0 0 0
------ - - - -
................................................................................................................................
Total distributions (2.44) (0.46) (0.92) (0.98) 0
------ ------ ------ ------ -
................................................................................................................................
Net asset value end of period $23.04 $23.81 $21.69 $20.08 $17.27
------ ------ ------ ------ ------
...............................................................................................................................
Total Return+ 7.13% 12.06% 12.90% 22.40% 1.10%
................................................................................................................................
Ratios/Supplemental Data
Net assets end of period (thousands) $1,259 $950 $982 $523 $24
................................................................................................................................
Ratios to average net assets:
Total expenses 2.25% 2.20%++ 2.19% 2.11% 2.22%++
................................................................................................................................
Total expenses, excluding indirectly paid expenses 2.25% 2.20%++ N/A N/A N/A
................................................................................................................................
Total expenses, excluding fee waivers and expense reimbursements N/A N/A N/A 13.30% N/A
................................................................................................................................
Interest expense N/A N/A 0.03% N/A N/A
................................................................................................................................
Net investment income 3.48% 4.06%++ 4.15% 4.67% 2.68%++
...............................................................................................................................
Portfolio turnover rate 133% 72% 168% 138% 151%
</TABLE>
* For the period from January 3, 1995 (commencement of class operations) to
January 31, 1995.
** For the six-month period ended July 31, 1997. The Fund changed its fiscal
year end from January 31 to July 31, effective July 31, 1997.
BLUE CHIP FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B
Year Ended Year Ended August 31,
---------- ---------------------------------------------------
July 31, 1998** 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value beginning of period $29.79 $25.05 $22.98 $23.21 $25.42 $23.17
------ ------ ------ ------ ------ ------
...................................................................................................................................
Income from investment operations
Net investment income (0.12) 0.15 0.12 0.25 0.16 0.11
...................................................................................................................................
Net gains or losses on securities (both realized and unrealized) 5.72 7.97 3.69 2.66 (0.35) 3.11
---- ---- ---- ---- ------ ----
...................................................................................................................................
Total from investment operations 5.60 8.12 3.81 2.91 (0.19) 3.22
---- ---- ---- ---- ------ ----
...................................................................................................................................
Less distributions
Dividends (from net investment income) (0.08) (0.20) (0.76) (0.36) (0.28) (0.28)
...................................................................................................................................
Distributions (from capital gains) (4.96) (3.18) (0.98) (2.78) (1.74) (0.69)
------ ------ ------ ------ ------ ------
..................................................................................................................................
Total distributions (5.04) (3.38) (1.74) (3.14) (2.02) (0.97)
------ ------ ------ ------ ------ ------
...................................................................................................................................
Net asset value end of period $30.35 $29.79 $25.05 $22.98 $23.21 $25.42
------ ------ ------ ------ ------ ------
...................................................................................................................................
Total Return+ 20.89% 34.76% 17.31% 13.87% (0.72%) 14.31%
..................................................................................................................................
Ratios/Supplemental Data
Net assets end of period (thousands) $117,893 $312,935 $224,819 $199,456 $208,532 $234,688
...................................................................................................................................
Ratios to average net assets:
Total expenses 1.68%++ 1.57% 1.85% 1.75% 2.07% 2.28%
...................................................................................................................................
Total expenses, excluding indirectly paid expenses 1.68%++ 1.56% 1.84% N/A N/A N/A
...................................................................................................................................
Net investment income (0.02%)++ 0.55% 0.52% 1.09% 0.67% 0.47%
...................................................................................................................................
Portfolio turnover rate 112% 109% 139% 115% 73% 96%
<CAPTION>
CLASS C
Year Ended
----------
July 31, 1998***
----------------
<S> <C>
Net asset value beginning of period $27.70
------
................................................................................
Income from investment operations
Net investment income 0(a)
................................................................................
Net gains or losses on securities (both realized and unrealized) 2.72
----
...............................................................................
Total from investment operations 2.72
----
................................................................................
Less distributions
Dividends (from net investment income) (0.02)
...............................................................................
Distributions (from capital gains) 0
-
................................................................................
Total distributions (0.02)
------
................................................................................
Net asset value end of period $30.40
------
................................................................................
Total Return+ 9.80%
................................................................................
Ratios/Supplemental Data
Net assets end of period (thousands) $780
................................................................................
Ratios to average net assets:
Total expenses 2.20%++
................................................................................
Total expenses, excluding indirectly paid expenses 2.02%++
................................................................................
Net investment income (0.27%)++
................................................................................
Portfolio turnover rate 112%
</TABLE>
** For the eleven-month period ended July 31, 1998. The Fund changed its
fiscal year end from August 31 to July 31, effective July 31, 1998.
*** For the period from January 22, 1998 (commencement of class operations) to
July 31, 1998.
(a) Less than one cent per share.
GROWTH AND INCOME FUNDS 25
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE FUND CLASS A
Year Ended July 31, Year Ended December 31,
------------------- ---------------------------------------
1998 1997* 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value beginning of period $24.64 $20.57 $20.45 $16.62 $17.63 $17.11
------ ------ ------ ------ ------ ------
....................................................................................................................................
Income from investment operations
Net investment income 0.26 0.21 0.38 0.55 0.52 0.47
....................................................................................................................................
Net gains or losses on securities (both realized and unrealized) 2.00 4.05 3.49 4.69 (0.20) 1.10
---- ---- ---- ---- ------ ----
....................................................................................................................................
Total from investment operations 2.26 4.26 3.87 5.24 0.32 1.57
---- ---- ---- ---- ---- ----
....................................................................................................................................
Less distributions
Dividends (from net investment income) (0.29) (0.19) (0.41) (0.51) (0.51) (0.47)
...................................................................................................................................
Distributions (from capital gains) (4.38) 0 (3.34) (0.90) (0.82) (0.58)
------ --- ------ ------ ------ ------
...................................................................................................................................
Total distributions (4.67) (0.19) (3.75) (1.41) (1.33) (1.05)
------ ------ ------ ------ ------ ------
....................................................................................................................................
Net asset value end of period $22.23 $24.64 $20.57 $20.45 $16.62 $17.63
------ ------ ------ ------ ------ ------
....................................................................................................................................
Total Return+ 9.55% 20.78% 18.90% 31.80% 1.90% 9.30%
....................................................................................................................................
Ratios/Supplemental Data
Net assets end of period (thousands) $476 $392 $328 $292 $189 $190
...................................................................................................................................
Ratios to average net assets:
Total expenses 1.01% 0.92%++ 0.91% 0.90% 0.93% 0.99%
....................................................................................................................................
Total expenses, excluding indirectly paid expenses 1.01% 0.92%++ N/A N/A N/A N/A
....................................................................................................................................
Net investment income 1.04% 1.66%++ 1.77% 2.78% 2.96% 2.63%
....................................................................................................................................
Portfolio turnover rate 69% 6% 91% 53% 70% 46%
</TABLE>
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND CLASS A
Year Ended July 31, Year Ended December 31,
--------------------- -----------------------
1998 1997** 1996 1995*
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value beginning of period $27.26 $22.53 $18.63 $14.48
------ ------ ------ ------
...............................................................................................................................
Income from investment operations
Net investment income 0.16 0.08 0.12 0.13
...............................................................................................................................
Net gains or losses on securities (both realized and unrealized) 2.86 4.72 4.26 4.64
---- ---- ---- ----
...............................................................................................................................
Total from investment operations 3.02 4.80 4.38 4.77
---- ---- ---- ----
...............................................................................................................................
Less distributions
Dividends (from net investment income) (0.13) (0.07) (0.13) (0.14)
...............................................................................................................................
Distributions (from capital gains) (1.01) 0 (0.35) (0.48)
------ --- ------ ------
...............................................................................................................................
Total distributions (1.14) (0.07) (0.48) (0.62)
------ ------ ------ ------
...............................................................................................................................
Net asset value end of period $29.14 $27.26 $22.53 $18.63
------ ------ ------ ------
...............................................................................................................................
Total Return+ 11.26% 21.33% 23.50% 33.00%
...............................................................................................................................
Ratios/Supplemental Data
Net assets end of period (millions) $296 $166 $85 $19
...............................................................................................................................
Ratios to average net assets:
Total expenses 1.46% 1.47%++ 1.41% 1.55%++
...............................................................................................................................
Total expenses, excluding indirectly paid expenses 1.46% 1.47%++ N/A N/A
...............................................................................................................................
Total expenses, excluding fee waivers and expense reimbursements N/A N/A N/A 1.64%++
..............................................................................................................................
Net investment income 0.62% 0.57%++ 0.70% 0.99%++
...............................................................................................................................
Portfolio turnover rate 20% 6% 14% 17%
</TABLE>
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
* For the period from January 3, 1995 (commencement of class operations) to
December 31, 1995.
26 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS B
Year Ended July 31, Year Ended December 31,
------------------- ----------------------------------------
1998 1997** 1996 1995 1994 1993*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value beginning of period $24.63 $20.58 $20.45 $16.62 $17.63 $17.24
------ ------ ------ ------ ------ ------
....................................................................................................................................
Income from investment operations
Net investment income 0.08 0.12 0.22 0.39 0.42 0.35
....................................................................................................................................
Net gains or losses on securities (both realized and unrealized) 1.99 4.03 3.50 4.70 (0.20) 1.01
---- ---- ---- ---- ------ ----
....................................................................................................................................
Total from investment operations (2.07) 4.15 3.72 5.09 0.22 1.36
------ ---- ---- ---- ---- ----
....................................................................................................................................
Less distributions
Dividends (from net investment income) (0.12) (0.10) (0.25) (0.36) (0.41) (0.39)
....................................................................................................................................
Distributions (from capital gains) (4.38) 0 (3.34) (0.90) (0.82) (0.58)
------ --- ------ ------ ------ ------
....................................................................................................................................
Total distributions (4.50) (0.10) (3.59) (1.26) (1.23) (0.97)
------ ------ ------ ------ ------ ------
...................................................................................................................................
Net asset value end of period $22.20 $24.63 $20.58 $20.45 $16.62 $17.63
------ ------ ------ ------ ------ ------
...................................................................................................................................
Total Return+ 8.73% 20.23% 18.10% 30.90% 1.30% 8.00%
....................................................................................................................................
Ratios/Supplemental Data
Net assets end of period (thousands) $326,459 $276,256 $197,411 $141,072 $104,297 $59,953
....................................................................................................................................
Ratios to average net assets:
Total expenses 1.76% 1.67%++ 1.66% 1.65% 1.53% 1.48%++
....................................................................................................................................
Total expenses, excluding indirectly paid expenses 1.76% 1.67%++ N/A N/A N/A N/A
....................................................................................................................................
Net investment income 0.30% 0.92%++ 1.01% 2.04% 2.36% 2.09%++
...................................................................................................................................
Portfolio turnover rate 69% 6% 91% 53% 70% 46%
<CAPTION>
CLASS C
Year Ended July 31, Year Ended December 31,
------------------- -----------------------------
1998 1997** 1996 1995 1994***
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value beginning of period $24.61 $20.56 $20.44 $16.61 $18.28
------ ------ ------ ------ ------
.............................................................................................................................
Income from investment operations
Net investment income 0.10 0.12 0.22 0.39 0.19
.............................................................................................................................
Net gains or losses on securities (both realized and unrealized) 1.97 4.03 3.50 4.70 (0.81)
---- ---- ---- ---- ------
.............................................................................................................................
Total from investment operations 2.07 4.15 3.72 5.09 (0.62)
---- ---- ---- ---- ------
.............................................................................................................................
Less distributions
Dividends (from net investment income) (0.12) (0.10) (0.26) (0.36) (0.23)
.............................................................................................................................
Distributions (from capital gains) (4.38) 0 (3.34) (0.90) (0.82)
------ --- ------ ------ ------
.............................................................................................................................
Total distributions (4.50) (0.10) (3.60) (1.26) (1.05)
------ ------ ------ ------ ------
............................................................................................................................
Net asset value end of period $22.18 $24.61 $20.56 $20.44 $16.61
------ ------ ------ ------ ------
.............................................................................................................................
Total Return+ 8.74% 20.25% 18.10% 30.90% (3.40%)
.............................................................................................................................
Ratios/Supplemental Data
Net assets end of period (thousands) $5,125 $2,507 $1,458 $811 $485
.............................................................................................................................
Ratios to average net assets:
Total expenses 1.76% 1.66%++ 1.67% 1.65% 1.68%++
.............................................................................................................................
Total expenses, excluding indirectly paid expenses 1.76% 1.66%++ N/A N/A N/A
............................................................................................................................
Net investment income 0.29% 0.94%++ 1.00% 2.03% 2.16%++
.............................................................................................................................
Portfolio turnover rate 69% 6% 91% 53% 70%
</TABLE>
* For the period from February 2, 1993 (commencement of class operations)
to December 31, 1993.
** For the seven-month period ended July 31, 1997. The Fund changed its
fiscal year end from December 31 to July 31, effective July 31, 1997.
*** For the period from, September 2, 1994 (commencement of class operations)
to December 31, 1994.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS B
Year Ended July 31, Year Ended December 31,
------------------- ------------------------
Per Share Data: 1998 1997** 1996 1995*
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value beginning of period $27.10 $22.43 $18.59 $14.48
------ ------ ------ ------
.......................................................................................................................
Income from investment operations
Net investment income (0.02) (0.02) 0 (a) 0.05
........................................................................................................................
Net gains or losses on securities (both realized and unrealized) 2.81 4.69 4.20 4.61
---- ---- ---- ----
........................................................................................................................
Total from investment operations 2.79 4.67 4.20 4.66
---- ---- ---- ----
........................................................................................................................
Less distributions
Dividends (from net investment income) 0 0 (0.01) (0.07)
.......................................................................................................................
Distributions (from capital gains) (1.01) 0 (0.35) (0.48)
------ --- ------ ------
........................................................................................................................
Total distributions (1.01) 0 (0.36) (0.55)
------ --- ------ ------
........................................................................................................................
Net asset value end of period $28.88 $27.10 $22.43 $18.59
------ ------ ------ ------
.......................................................................................................................
Total Return+ 10.44% 20.82% 22.60% 32.20%
........................................................................................................................
Ratios/Supplemental Data
Net assets end of period (millions) $1,000 $542 $245 $46
........................................................................................................................
Ratios to average net assets:
Total expenses 2.21% 2.25%++ 2.17% 2.24%++
........................................................................................................................
Total expenses, excluding indirectly paid expenses 2.21% 2.25%++ N/A N/A
........................................................................................................................
Total expenses, excluding fee waivers and expense reimbursements N/A N/A N/A 2.26%++
........................................................................................................................
Net investment income (0.14%) (0.19%)++ (0.06%) 0.30%++
........................................................................................................................
Portfolio turnover rate 20% 6% 14% 17%
<CAPTION>
CLASS C
Year Ended July 31, Year Ended December 31,
------------------- -----------------------
Per Share Data: 1998 1997** 1996 1995*
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value beginning of period $27.10 $22.43 $18.58 $14.48
------ ------ ------ ------
.......................................................................................................................
Income from investment operations
Net investment income (0.02) (0.02) 0(a) 0.06
........................................................................................................................
Net gains or losses on securities (both realized and unrealized) 2.82 4.69 4.21 4.60
---- ---- ---- ----
........................................................................................................................
Total from investment operations 2.80 4.67 4.21 4.66
---- ---- ---- ----
.......................................................................................................................
Less distributions
Dividends (from net investment income) 0 0 (0.01) (0.08)
........................................................................................................................
Distributions (from capital gains) (1.01) 0 (0.35) (0.48)
------ --- ------ ------
........................................................................................................................
Total distributions (1.01) 0 (0.36) (0.56)
------ --- ------ ------
........................................................................................................................
Net asset value end of period $28.89 $27.10 $22.43 $18.58
------ ------ ------ ------
.......................................................................................................................
Total Return+ 10.47% 20.82% 22.60% 32.20%
........................................................................................................................
Ratios/Supplemental Data
Net assets end of period (millions) $50 $24 $10 $20
........................................................................................................................
Ratios to average net assets:
Total expenses 2.21% 2.25%++ 2.17% 2.15%++
........................................................................................................................
Total expenses, excluding indirectly paid expenses 2.21% 2.25%++ N/A N/A
........................................................................................................................
Total expenses, excluding fee waivers and expense reimbursements N/A N/A N/A 4.94%++
........................................................................................................................
Net investment income (0.13%) (0.19%)++ (0.06%) 0.35%++
........................................................................................................................
Portfolio turnover rate 20% 6% 14% 17%
</TABLE>
** For the seven-month period ended July 31, 1997. The Fund changed its
fiscal year end from December 31 to July 31, effective July 31, 1997.
a Less than one cent per share.
GROWTH AND INCOME FUNDS 27
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SMALL CAP CLASS A
EQUITY INCOME FUND
<TABLE>
<CAPTION>
Year Ended July 31, Year Ended December 31,
------------------- -----------------------
1998 1997 ** 1996 1995 *
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value beginning of period $15.69 $13.10 $11.57 $9.64
------ ------ ------ -----
................................................................................................................
Income from investment operations
Net investment income 0.29 0.14# 0.34 0.34
................................................................................................................
Net gains or losses on securities (both realized and unrealized) 0.24 2.59 2.13 2.45
---- ---- ---- ----
................................................................................................................
Total from investment operations 0.53 2.73 2.47 2.79
---- ---- ---- ----
................................................................................................................
Less distributions
Dividends (from net investment income) (0.28) (0.13) (0.34) (0.37)
................................................................................................................
Distributions (from capital gains) (0.19) (0.01) (0.60) (0.49)
------ ------ ------ ------
................................................................................................................
Total distributions (0.47) (0.14) (0.94) (0.86)
------ ------ ------ ------
................................................................................................................
Net asset value end of period $15.75 $15.69 $13.10 $11.57
------ ------ ------ ------
................................................................................................................
Total Return+ 3.24% 20.99% 22.00% 29.50%
................................................................................................................
Ratios/Supplemental Data
Net assets end of period (thousands) $54,142 $4,239 $336 $216
................................................................................................................
Ratios to average net assets:
Total expenses 1.68% 1.71%++ 1.75% 1.75%++
................................................................................................................
Total expenses, excluding indirectly paid expenses 1.68% 1.70%++ N/A N/A
................................................................................................................
Total expenses, excluding fee waivers and expense reimbursements N/A 1.84%++ 5.03% 24.45%++
................................................................................................................
Net investment income 1.95% 1.88%++ 3.08% 3.39%++
................................................................................................................
Portfolio turnover rate 18% 13% 50% 48%
</TABLE>
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
# Net investment income is based on average shares outstanding during the
period.
28 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CLASS B
<TABLE>
<CAPTION>
Year Ended July 31, Year Ended December 31,
------------------- -----------------------
1998 1997** 1996 1995*
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value beginning of period $15.64 $13.09 $11.57 $9.64
------ ------ ------ -----
................................................................................................................
Income from investment operations
Net investment income 0.19 0.08# 0.27 0.28
...............................................................................................................
Net gains or losses on securities (both realized and unrealized) 0.22 2.57 2.11 2.43
---- ---- ---- ----
................................................................................................................
Total from investment operations 0.41 2.65 2.38 2.71
---- ---- ---- ----
................................................................................................................
Less distributions
Dividends (from net investment income) (0.19) (0.09) (0.26) (0.29)
................................................................................................................
Distributions (from capital gains) (0.19) (0.01) (0.60) (0.49)
----- ----- ----- -----
...............................................................................................................
Total distributions (0.38) (0.10) (0.86) (0.78)
----- ----- ----- -----
................................................................................................................
Net asset value end of period $15.67 $15.64 $13.09 $11.57
------ ------ ------ ------
................................................................................................................
Total Return+ 2.49% 20.37% 21.10% 28.70%
................................................................................................................
Ratios/Supplemental Data
Net assets end of period (thousands) $130,191 $9,462 $692 $266
...............................................................................................................
Ratios to average net assets:
Total expenses 2.43% 2.46%++ 2.50% 2.50%++
................................................................................................................
Total expenses, excluding indirectly paid expenses 2.42% 2.45%++ N/A N/A
................................................................................................................
Total expenses, excluding fee waivers and expense reimbursements N/A 2.59% 5.72% 20.90%++
................................................................................................................
Net investment income 1.20% 1.12%++ 2.39% 2.67%++
...............................................................................................................
Portfolio turnover rate 18% 13% 50% 48%
</TABLE>
- --------------------------------------------------------------------------------
CLASS C
<TABLE>
<CAPTION>
Year Ended July 31, Year Ended December 31,
------------------- -----------------------
1998 1997** 1996 1995*
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value beginning of period $15.63 $13.09 $11.56 $9.74
------ ------ ------ -----
................................................................................................................
Income from investment operations
Net investment income 0.19 0.10# 0.28 0.28
................................................................................................................
Net gains or losses on securities (both realized and unrealized) 0.22 2.54 2.10 2.33
---- ---- ---- ----
...............................................................................................................
Total from investment operations 0.41 2.64 2.38 2.61
---- ---- ---- ----
................................................................................................................
Less distributions
Dividends (from net investment income) (0.19) (0.09) (0.25) (0.30)
................................................................................................................
Distributions (from capital gains) (0.19) (0.01) (0.60) (0.49)
----- ----- ----- -----
...............................................................................................................
Total distributions (0.38) (0.10) (0.85) (0.79)
----- ----- ----- -----
................................................................................................................
Net asset value end of period $15.66 $15.63 $13.09 $11.56
------ ------ ------ ------
................................................................................................................
Total Return+ 2.49% 20.30% 21.10% 27.30%
................................................................................................................
Ratios/Supplemental Data
Net assets end of period (thousands) $26,197 $2,770 $56 $24
................................................................................................................
Ratios to average net assets:
Total expenses 2.43% 2.45%++ 2.50% 2.50%++
................................................................................................................
Total expenses, excluding indirectly paid expenses 2.42% 2.44%++ N/A N/A
...............................................................................................................
Total expenses, excluding fee waivers and expense reimbursements N/A 2.58%++ 5.77% 187.29%++
................................................................................................................
Net investment income 1.20% 1.20%++ 2.33% 2.63%++
................................................................................................................
Portfolio turnover rate 18% 13% 50% 48%
</TABLE>
* For the period from January 3, 1995 (commencement of class operations) to
December 31, 1995.
** For the seven-month period ended July 31, 1997. The Fund changed its fiscal
year end from December 31 to July 31, effective July 31, 1997.
*** For the period from January 24, 1995 (commencement of class operations)
to December 31, 1995.
GROWTH AND INCOME FUNDS 29
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
- --------------------------------------------------------------------------------
OTHER FUND PRACTICES
The Funds may invest in futures, options and foreign currencies. The Funds may
also engage in short sales. Such practices are used to hedge a Fund's portfolio.
Although this may increase returns, these practices may actually reduce returns
or increase volatility.
The Funds may also invest in other investment companies. This practice may
expose a fund to duplicate expenses and lower its value.
In addition, the Funds may borrow money and lend their securities. Borrowing is
a form of leverage which may magnify a fund's gain or loss. Lending securities
may cause the fund to lose the opportunity to sell these securities at the most
desirable price and, therefore, lose money.
Please consult the Statement of Additional Information for more information
regarding these and other investment practices used by the Funds, including
risks.
30 GROWTH AND INCOME FUNDS
<PAGE>
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EVERGREEN
- --------------------------------------------------------------------------------
Notes
-----
GROWTH AND INCOME FUNDS 31
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
- --------------------------------------------------------------------------------
Evergreen Funds
---------------
Money Market
- ------------
Treasury Money Market Fund
- --------------------------
Money Market Fund
- -----------------
Municipal Money Market Fund
- ---------------------------
Pennsylvania Municipal Money Market Fund
- ----------------------------------------
Tax Exempt
- ----------
Short Intermediate Municipal Fund
- ---------------------------------
High Grade Tax Free Fund
- ------------------------
Tax Free Fund
- -------------
California Tax Free Fund
- ------------------------
Connecticut Municipal Bond Fund
- -------------------------------
Florida Municipal Bond Fund
- ---------------------------
Florida High Income Municipal Bond Fund
- ---------------------------------------
Georgia Municipal Bond Fund
- ---------------------------
Maryland Municipal Bond Fund
- ----------------------------
Massachusetts Tax Free Fund
- ---------------------------
Missouri Tax Free Fund
- ----------------------
New Jersey Tax Free Income Fund
- -------------------------------
New York Tax Free Fund
- ----------------------
North Carolina Municipal Bond Fund
- ----------------------------------
Pennsylvania Tax Free Fund
- --------------------------
South Carolina Municipal Bond Fund
- ----------------------------------
Virginia Municipal Bond Fund
- ----------------------------
Income
- ------
Capital Preservation and Income Fund
- ------------------------------------
Short Intermediate Bond Fund
- ----------------------------
Intermediate Term Government Securities Fund
- --------------------------------------------
Intermediate Term Bond Fund
- ---------------------------
U.S. Government Fund
- --------------------
Diversified Bond Fund
- ---------------------
Strategic Income Fund
- ---------------------
High Yield Bond Fund
- --------------------
Balanced
- --------
American Retirement Fund
- ------------------------
Balanced Fund
- -------------
Tax Strategic Foundation Fund
- -----------------------------
Foundation Fund
- ---------------
Growth & Income
- ---------------
Utility Fund
- ------------
Income and Growth Fund
- ----------------------
Fund for Total Return
- ---------------------
Value Fund
- ----------
Blue Chip Fund
- --------------
Growth and Income Fund
- ----------------------
Small Cap Equity Income Fund
- ----------------------------
Domestic Growth
- ---------------
Strategic Growth Fund
- ---------------------
Stock Selector Fund
- -------------------
Evergreen Fund
- --------------
Omega Fund
- ----------
Small Company Growth Fund
- -------------------------
Aggressive Growth Fund
- ----------------------
Micro Cap Fund
- --------------
Global International
- --------------------
Global Leaders Fund
- -------------------
International Growth Fund
- -------------------------
Global Opportunities Fund
- -------------------------
Precious Metals Fund
- --------------------
Emerging Markets Growth Fund
- ----------------------------
Latin America Fund
- ------------------
Express Line
- ------------
800.346.3858
Investor Services
- -----------------
800.343.2898
Retirement Plan Services
- ------------------------
800.247.4075
www.evergreenfunds.com
- ----------------------
32 GROWTH AND INCOME FUNDS
<PAGE>
QUICK REFERENCE GUIDE
1 Evergreen Express Line
Call 1-800-346-3858
24 hours a day to
. check your account
. order a statement
. get a fund's current price, yield and total return
. buy, sell or exchange fund shares
2 Non-retirement account holders
Call 1-800-343-2898
Monday through Friday, 8 a.m. to 6 p.m. Eastern time to
. buy, sellor exchange shares
. order applications
. get assistance with your account
3 Retirement plan account holders
Call 1-800-247-4075
Monday through Friday, 8 a.m. to 6 p.m. Eastern time
4 Information Line for Hearing and Speech
Impaired (TTY/TDD)
Call 1-800-343-2888
Monday through Friday, 8 a.m. to 6 p.m. Eastern time
5 Write us a letter
Evergreen Service Company
P.O. Box 2121
Boston, MA 02106-2121
. to buy, sell or exchange shares
. to change the registration on your account
. for general correspondence
6 For express, registered, certified mail:
Evergreen Service Company
200 Berkeley Street
Boston, MA 02116-5039
7 Contact us on-line:
www.evergreenfunds.com
8 Regular communications you'll receive:
Account Statements -- You'll receive quarterly statements for each
fund you own.
Confirmation Notices -- We send a confirmation of any transaction
you make within five days of the transaction.
Annual and Semiannual reports -- You'll receive a detailed financial
report on your fund(s) twice a year.
Tax Forms -- Each January you'll receive any tax forms you need to
file your taxes as well as the Evergreen Tax Information Guide.
Evergreen Events -- You'll receive a periodic newsletter published
exclusively for Evergreen shareholders.
<PAGE>
For More Information About the
Evergreen Growth and Income Funds, Ask for:
The funds' most recent Annual or Semi-Annual Report, which contains a complete
financial accounting for each fund and a complete list of portfolio holdings as
of a specific date, as well as commentary from the portfolio manager. This
commentary discusses the market conditions and investment strategies that
significantly affected the fund's performance during the most recent fiscal year
or period.
The Statement of Additional Information (SAI), which contains more detailed
information about the policies and procedures of the funds. The SAI has been
filed with the Securities and Exchange Commission("SEC")and its contents are
legally considered to be part of this prospectus.
For questions, other information, or to request a copy of either document, call
1-800-343-2898 or ask your investment representative. We will mail material
within three business days.
Information about these funds (including the SAI) is also available on the SEC's
Internet web site at http://www.sec.gov, or, for a duplication fee, by writing
the SEC Public Reference Section, Washington DC 20549-6009. This material can be
reviewed and copied at the SEC's Public Reference Room in Washington, DC.
For more information, call the SEC at 1-800-SEC-0330.
[LOGO OF EVERGREEN FUNDS APPEARS HERE]
Evergreen Distributor, Inc.
125 W. 55th Street
New York, New York 10019
<PAGE>
EVERGREEN
Growth
and
Income
Funds
Evergreen Utility Fund
Evergreen Fund for Total Return
Evergreen Income and Growth Fund
Evergreen Value Fund
Evergreen Growth and Income Fund
Evergreen Small Cap Equity Income Fund
[LOGO OF EVERGREEN FUNDS/SM/ APPEARS HERE]
Class Y
Prospectus, December 1, 1998
The Securities and Exchange Commission has not guaranteed that the information
in this prospectus is accurate or complete, nor has it evaluated the investment
merit of these mutual fund shares. Anyone who tells you otherwise is committing
a federal crime.
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
FUND SUMMARIES:
Evergreen Utility Fund ................................................... 2
Evergreen Fund for Total Return .......................................... 4
Evergreen Income and Growth Fund ......................................... 6
Evergreen Value Fund ..................................................... 8
Evergreen Growth and Income Fund ......................................... 10
Evergreen Small Cap
Equity Income Fund ....................................................... 12
GENERAL INFORMATION:
The Funds' Investment Advisor ............................................ 14
Calculating The Share Price .............................................. 14
How To Choose A Fund ..................................................... 14
Who Can Buy Class Y Shares ............................................... 14
How To Buy Shares ........................................................ 15
How To Sell Shares ....................................................... 16
Other Services ........................................................... 17
The Tax Consequences of
Investing in the Fund .................................................... 17
Sales Compensation and Expenses .......................................... 18
Financial Highlights ..................................................... 19
Risk Factors For All Mutual Funds
Please remember that mutual fund shares are:
. not guaranteed to achieve their goal
. not insured, endorsed or guaranteed by the FDIC, a bank or any government
agency
. subject to investment risks, including possible loss of your original
investment
In general, funds included in this prospectus seek to provide investors with a
combination of capital growth and current income. The proportion of growth
versus income varies by fund. These funds tend to have less risk and volatility
than more aggressive stock funds.
Fund Summaries Key
Each fund's summary is organized around the following basic topics and
questions:
[GRAPHIC APPEARS HERE] Investment Goal
What is the fund's financial objective? You can find clarification on how the
fund seeks to achieve these goals by looking at the fund's strategy and
investment policies. The fund's Board of Trustees can change the investment
objective without a shareholder vote.
[GRAPHIC APPEARS HERE] Investment Strategy
How does the fund go about trying to meet its goals? What types of investments
does it contain? What style of investing and investment philosophy does it
follow? Does it have limits on the amount invested in any particular type of
security?
[GRAPHIC APPEARS HERE] Risk Factors
What are the specific risks for an investor in the fund?
[GRAPHIC APPEARS HERE] Portfolio Management
Who selects investments for the fund? What is his or her background and
experience?
[GRAPHIC APPEARS HERE] Performance
How well has the fund performed in the past year? The past five years? The past
ten years?
[GRAPHIC APPEARS HERE] Expenses
How much does it cost to invest in the fund.
<PAGE>
- --------------------------------------------------------------------------------
OVERVIEW
- --------------------------------------------------------------------------------
Growth and Income Funds
typically rely on one or a combination of the
following strategies:
. buying companies that have a history of paying regular dividends in order
to cushion stock market fluctuations with a steady stream of income;
. investing a portion of the fund in bonds and convertible stocks to lower
the overall risk and provide regular income; and/or
. buying companies whose stock price is lower than the fund's managers
believe the true, "fundamental" price should be.
may be appropriate for investors who:
. can tolerate a moderate decline in the value of their investment and/or
. want a combination of growth potential and regular dividend income
potential.
Like most investments, your investment in an Evergreen Growth and Income Fund
could fluctuate significantly in value over time and could result in a loss of
money.
Here are the most important factors that may affect the value of your
investment:
Stock Market Risk
Your investment will be affected by general economic conditions such as
prevailing economic growth, inflation and interest rates. When economic growth
slows, or interest or inflation rates increase, stocks tend to decline in value.
Even if general economic conditions do not change, your investment may decline
in value if the particular industries or companies your fund invests in do not
perform well.
Interest Rate Risk
When interest rates go up, the value of debt securities tends to
fall. If your fund invests a significant portion of its portfolio in debt
securities and interest rates rise, then the value of your investment may
decline. The opposite is also true.
Credit Risk
The value of debt securities is directly affected by an issuer's ability to pay
principal and interest on time. If your fund invests in bonds, then the value of
your investment may be adversely affected when an issuer fails to pay an
obligation on a timely basis.
Foreign Investment Risk
A fund's investment in non-U.S. securities could expose it to certain unique
risks of overseas investing. For example, political turmoil and economic
instability in the countries in which the fund invests could adversely affect
the value of your investment. In addition, if the value of any foreign currency
in which the fund's investments are denominated declines relative to the U.S.
dollar, the value of your investment in the fund may decline as well. Certain
foreign countries have less developed and less regulated securities markets and
accounting systems than the U.S. This may make it harder to get accurate
information about a security or company, and increase the possibility that an
investment will not perform as expected.
................................................................................
Each of the Evergreen Growth and Income Funds reserves the right to invest in
high quality money market instruments in order to protect the value of the fund
in response to adverse economic, political or market conditions. This strategy
is inconsistent with these funds' principal investment strategies, and if
employed could result in a low return and potential loss of market opportunity.
GROWTH AND INCOME FUNDS 1
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
Utility Fund
FUND FACTS:
Goal:
. High Current Income
. Moderate Capital Growth
Principal Investments:
. Stocks and Bonds of Utility Companies
Classes of Shares:
. Class Y
Investment Advisor:
. Capital Management Group
Portfolio Managers:
. Paul A. DiLella
. Doris Kelley-Watkins
NASDAQ Symbol
None
[GRAPHIC APPEARS HERE] INVESTMENT GOAL
The Fund seeks a return consisting of high current income and moderate capital
growth.
[GRAPHIC APPEARS HERE] INVESTMENT STRATEGY
The Fund invests at least 65% of its assets in stocks and investment grade bonds
of utility companies (gas, electric, telecommunications). The Fund may also
invest up to 35% of its assets in common stocks of non-utility companies, and up
to 25% in foreign securities. The Fund's manager considers a number of factors
when selecting utility company stocks: a history of high dividends
and profits, the size of the company's market and market share, competitive or
technological advantages that may help it in the future, potential merger
activity, and the projected volatility of the company or industry.
Dividend Payment Schedule: Monthly
[GRAPHIC APPEARS HERE] RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:
Stock Market Risk
. Interest Rate Risk
. Credit Risk
. Foreign Investment Risk
In addition, the value of your investment in the Fund could be negatively
affected by adverse developments in the utility industry. These could include
decreases in the demand for utility company products and services, increased
competition resulting from deregulation, and rising energy costs, among others.
Such developments also could cause utility companies to reduce the dividends
they pay on their stock, potentially decreasing the dividends you receive from
the Fund. Finally, utility companies typically borrow heavily to support
continuing operations. Increases in interest rates could increase utility
companies' borrowing costs, which could impact their financial results and stock
prices, and ultimately the value of your Fund shares.
[GRAPHIC APPEARS HERE] PORTFOLIO MANAGEMENT
The Fund's investment advisor is the Capital Management Group of First Union
National Bank ("CMG").
The day-to-day management of the Fund is handled by Paul A. DiLella and Doris
Kelley-Watkins. Each manager has over 18 years of investment management
experience. Mr. DiLella joined First Fidelity Bank (which First Union National
Bank acquired in 1995) in 1982 and has managed the fund since 1996. Ms.
Kelley-Watkins was a utility industry analyst at Merrill Lynch for 20 years
before joining CMG as co-manager of the fund in 1997.
2 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
[GRAPHIC APPEARS HERE] PERFORMANCE
The following charts show how the Fund has performed in the past.
This chart below shows the percentage gain or loss for the Class Y shares of the
Fund in each calendar year since the Class Y shares' inception on 2/28/94. It
should give you a general idea of how the Fund's return has varied from year-to-
year. This graph includes the effects of Fund expenses.
Year-by-Year Total Return for Class Y Shares (%)
1997 1996 1995 1994* 1993 1992 1991 1990 1989 1988
29.35% 4.40% 30.73% -5.60%
Best Quarter: 4th Quarter 1997 +13.00%
Worst Quarter: 3rd Quarter 1996 -4.37%
*From inception on 2/28/94 to 12/31/94.
Year to date total return through 9/30/98 is __.
This next table lists the Fund's average year-by-year return over the past year
and since its inception (through 12/31/97). At the bottom of the table you can
compare this performance with the S&P 500 Index and the S&P Utilities Index. The
S&P 500 Index is an unmanaged index of 500 publicly-traded U.S. stocks and is
often used to indicate the performance of the overall stock market. The S&P
Utilities Index tracks the performance of utility stocks within the larger S&P
500 Index, which are investments similar to the Fund's. Neither index is
an actual investment. Past performance is not an indication of future
results.
Average Annual Total Return
(for the period ended 12/31/97)
Inception Since
Date 1 year 5 year 10 year Inception
Class Y 1/4/94 29.35% N/A N/A 13.64%
S&P 500 19.29% 22.91% 18.48% -----%
S&P Utilities Index 20.99% 10.82% 13.75% -----%
[GRAPHIC APPEARS HERE] EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Fees You Pay Directly
Shareholder Transaction Expenses Class Y
Maximum sales charge imposed on None
purchases (as a % of offering price)
Maximum deferred sales charge None
Fees the Fund Pays Directly (and You Pay Indirectly)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class Y 0.50% None 0.38% 0.88%
The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual funds and is
for illustration only. The example assumes that you reinvest all your dividends
and a 5% average annual return and that you reinvest all of your dividends. Your
actual costs may be higher or lower.
Example of Fund Expenses
After 1 year $90
After 3 years $281
After 5 years $488
After 10 years $1,084
GROWTH AND INCOME FUNDS 3
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
Fund for Total Return
FUND FACTS:
Goal:
. Total Return
Principal Investments:
. Large-Cap Stocks
. Other Common Stocks
. Other Preferred and Convertible Stocks
. Bonds
. Foreign Securities
Classes of Shares:
. Class Y
Investment Advisor:
. Evergreen Investment Management Company
Portfolio Manager:
. Harlan Sonderling
NASDAQ Symbols:
None
[GRAPHIC APPEARS HERE] INVESTMENT GOAL
The Fund seeks total return from a combination of capital growth and income.
[GRAPHIC APPEARS HERE] INVESTMENT STRATEGY
The Fund invests primarily in common stocks of large, established companies
(above $5 billion in market capitalization) with a history of paying. The Fund
may also invest in low- or non-dividend paying common stocks, preferred and
convertible stocks, up to 35% of its assets in bonds (including lower credit
quality bonds - junk bonds), and up to 50% of its assets in foreign securities.
Investment decisions are made using a combination of investment analysis and
techniques designed to construct a portfolio that offers a high income stream
and low price fluctuation.
Dividend Payment Schedule: Quarterly
[GRAPHIC APPEARS HERE] RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:
. Stock Market Risk
. Interest Rate Risk
. Credit Risk
. Foreign Investment Risk
Since the Fund may invest in lower credit quality bonds (junk bonds), it may be
more susceptible to credit risk than a fund that invests in higher quality
bonds. Lower-rated bonds are less secure financially and more sensitive to
downturns in the economy.
[GRAPHIC APPEARS HERE] PORTFOLIO MANAGEMENT
The Fund's investment advisor is Evergreen Investment Management Company
("EIMC").
The day-to-day management of the Fund is handled by Harlan Sonderling. Mr.
Sonderling has over 12 years of investment management experience. He joined EIMC
as Senior Research Analyst in 1996 after four years as an analyst at Putnam. He
has managed the Fund since June, 1998.
4 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
[GRAPHIC APPEARS HERE] PERFORMANCE
The following charts show how the Fund has performed in the past.
This chart below shows the percentage gain or loss for the Class Y shares of the
Fund in each calendar year since the Class Y shares' inception on 1/3/97. It
should give you a general idea of how the Fund's return has varied from year-to-
year. This graph includes the effects of Fund expenses.
Year-by-Year Total Return for Class Y Shares (%)
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
24.07%
Best Quarter: 2nd Quarter 1997 +12.37%
Worst Quarter: 3rd Quarter 1990 -7.78%
Year to date total return through 9/30/98 is __.
This next table lists the Fund's average year-by-year return over the past year
and since the Class Y shares' inception. At the bottom of the table you can
compare this performance with an index that tracks investments similar to the
Fund's, the S&P 500 Index. The S&P 500 Index is an unmanaged index of 500
publicly-traded U.S. stocks and is often used to indicate the performance of the
overall stock market. The S&P 500 Index is not an actual investment. Past
performance is not an indication of future results.
Average Annual Total Return
(for the period ended 12/31/97)
Inception Since
Date 1 year 5 year 10 year Inception
Class A 4/14/87 24.07% 17.19% 14.93% 13.02%
Class B 2/1/93 13.01% 16.67% N/A 15.93%
Class C 2/1/93 12.99% 16.65% N/A 15.95%
S&P 500 19.29% 16.75% 18.48% N/A
[GRAPHIC APPEARS HERE] EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Fees You Pay Directly
Shareholder Transaction Expenses Class Y
Maximum sales charge imposed on None
purchases (as a % of offering price)
Maximum deferred sales charge None
Fees the Fund Pays Directly (and You Pay Indirectly)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class Y 0.61% None 0.35% 0.96%
The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual funds and is
for illustration only. The example assumes a 5% average annual return and that
you reinvest all of your dividends. Your actual costs may be higher or lower.
Example of Fund Expenses
Class Y
After 1 year $10
After 3 years $31
After 5 years $53
After 10 years $118
GROWTH AND INCOME FUNDS 5
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
Income and Growth Fund
FUND FACTS:
Goal:
. Current Income
. Capital Growth
Principal Investments:
. Common Stocks
. Convertible Stocks
. Foreign Securities
Classes of Shares:
. Class Y
Investment Advisor:
. Evergreen Asset Management Corp.
Portfolio Managers:
. Nola Maddox Falcone
. Irene O'Neill
NASDAQ Symbols:
EVTRX (Class Y)
[GRAPHIC APPEARS HERE] INVESTMENT GOAL
The Fund seeks current income and capital growth in the value of its shares.
[GRAPHIC APPEARS HERE] INVESTMENT STRATEGY
The Fund invests primarily in common stocks and securities convertible into
common stocks that on purchase date pay a yield higher than the average yield of
companies included in the S&P 500. Up to 50% of the Fund's assets may be
invested in foreign securities and up to 25% in bonds. The Fund focuses on
companies the Fund's manager believes are undervalued as a result of a temporary
adverse situation and companies where there is a trend of increasing profits and
prospects for future growth. In addition, the Fund looks for merger and
acquisition candidates.
Dividend Payment Schedule: Quarterly
[GRAPHIC APPEARS HERE] RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:
. Stock Market Risk
. Interest Rate Risk
. Credit Risk
. Foreign Investment Risk
In additionl, your investment may be subject to special risks associated with
investing in securities issued by small companies. Smaller, less well-
established companies tend to be more dependent on individual managers and
limited products and product lines. Additionally, securities issued by small
companies tend to fluctuate in value more dramatically than those of larger
companies.
[GRAPHIC APPEARS HERE] PORTFOLIO MANAGEMENT
The Fund's investment advisor is Evergreen Asset Management Corp. ("EAMC").
The day-to-day management of the Fund is handled by Nola Maddox Falcone, who is
also President and Co-Chief Executive Officer of EAMC. Ms. Falcone has been the
Fund's portfolio manager since its inception in 1978.
Co-manager of the Fund is Irene O'Neill. Ms. O'Neill has over 19 years of
investment management experience and has been co-portfolio manager since
December, 1997. She has been with EAMC since 1981.
6 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
[GRAPHIC APPEARS HERE] PERFORMANCE
The following charts show how the Fund has performed in the past.
This chart below shows the percentage gain or loss for the Class Y shares of the
Fund in each of the last calendar years. It should give you a general idea of
how the Fund's return has varied from year-to-year. This graph includes the
effects of Fund expenses.
Year-by-Year Total Return for Class Y Shares (%)
[BAR CHART APPEARS HERE]
1997 1996 1995* 1994 1993 1992 1991 1990 1989 1988
25.27% 12.62% 23.71%
Best Quarter: 2nd Quarter 1997 +10.57%
Worst Quarter: 1st Quarter 1997 -0.09%
*From inception on 1/3/95 to 12/31/95.
Year to date return through 9/30;/98 is ___.
This next table lists the Fund's average year-by-year return over the past one,
five and ten years (through 12/31/97). At the bottom of the table you can
compare this performance with the Wilshire 5000 Index and the Lipper Income Fund
Average. The Wilshire 5000 Index is an unmanaged index of the largest 5000
publicly-traded U.S. stocks and is considered a broad stock market average, so
it includes a broader range of market capitalizations than the S&P 500 Index.
The Lipper Income Fund Average measures both fixed-income and equity funds and
tracks investments similar to the Fund's. Neither index is an actual investment.
Past performance is not an indication of future results.
Average Annual Total Return
(for the period ended 12/31/97)
Inception Since
Date 1 year 5 year 10 year Inception
Class Y 1/3/95 7.93% N/A N/A 15.57%
Wilshire 5000 17.05% 21.03% 17.44% -----%
Lipper Income Fund 8.37% 11.94% 12.45% -----%
[GRAPHIC APPEARS HERE] EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Fees You Pay Directly
Shareholder Transaction Expenses Class A Class B Class C
Maximum sales charge imposed on
purchases (as a % of offering price) 4.75% None None
Maximum deferred sales charge None 5.00% 1.00%
Fees the Fund Pays Directly (and You pay Indirectly)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12B-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class Y 0.98% None 0.28% 1.26%
The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual funds and is
for illustration only. The example assumes a 5% average annual return and that
you reinvest all of your dividends. Your actual costs may be higher or lower.
Example of Fund Expenses
Class Y
After 1 year $128
After 3 years $400
After 5 years $692
After 10 years $1,523
GROWTH AND INCOME FUNDS 7
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
Value Fund
FUND FACTS:
Goal:
. Long-term Capital Growth
. Current Income
Principal Investments:
. Stocks
. Bonds
. Foreign Securities
Classes of Shares:
. Class Y
Investment Advisor:
. Capital Management Group
Portfolio Manager:
. Matthew D. Finn
NASDAQ Symbols:
EGVYX (Class Y)
[GRAPHIC APPEARS HERE] INVESTMENT GOAL
The Fund seeks long-term capital growth with current income as a secondary
objective.
[GRAPHIC APPEARS HERE] INVESTMENT STRATEGY
The Fund invests at least 75% of its assets in stocks of companies that are, in
the opinion of the Fund's manager, undervalued according to various financial
measurements. Such stocks are theoretically bought at a discount to their true
value, thus providing growth opportunity with potentially less downside risk.
Value stocks are chosen primarily for their price compared to their growth
potential, with income as a secondary consideration. There is no specific
limitation on the type or size of company in which the Fund invests. The Fund
may also invest in bonds (up to 25% of its assets) and foreign securities
(up to 25% of its assets).
Dividend Payment Schedule: Quarterly
[GRAPHIC APPEARS HERE] RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:
. Stock Market Risk
. Interest Rate Risk
. Credit Risk
. Foreign Investment Risk
In addition, your investment may be subject to special risks associated with
investing in securities issued by small companies. Smaller, less
well-established companies tend to be more dependent on individual managers and
limited products and product lines. Additionally, securities issued by small
companies also tend to fluctuate in value more dramatically than those of larger
companies.
[GRAPHIC APPEARS HERE] PORTFOLIO MANAGEMENT
The Fund's investment advisor is the Capital Management Group of First Union
National Bank ("CMG").
The day-to-day management of the Fund has been handled by Matthew D. Finn since
March, 1998. Mr. Finn is Chief Investment Officer of Evergreen Investment
Management Company's Growth and Income Group and has been associated with CMG
since March, 1998. Previously, he was a portfolio manager with Advantus Capital
Management, Inc. from 1994 to 1998 and with Unified Capital Management from 1993
to 1994.
8 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
[GRAPHIC APPEARS HERE] PERFORMANCE
The following charts show how the Fund has performed in the past.
This chart below shows the percentage gain or loss for Class Y shares of the
Fund in each calendar year since the Class Y shares' inception on 1/3/91. It
should give you a general idea of how the Fund's returns have varied year-to-
year. This graph includes the effects of Fund expenses.
Year-by-Year Total Return for Class Y Shares (%)
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
25.73% 18.92% 31.81% 1.86% 9.31% 7.96% 25.11%
Best Quarter: 1st Quarter 1991 +12.26%
Worst Quarter: 3rd Quarter 1990 -12.20%
Year to date total return since 9/30/98 is __.
This next table lists the Fund's average year-by-year return over the past year
and since the Class Y shares' inception. At the bottom of the table you can
compare this performance with an index that tracks investments similar to the
Fund's, the S&P 500 Index. The S&P 500 Index is an unmanaged index of 500
publicly-traded U.S. stocks and is often used to indicate the performance of the
overall stock market. The S&P 500 Index is not an actual investment. Past
performance is not an indication of future results.
Average Annual Total Return
(for the period ended 12/31/97)
Inception Since
Date 1 year 5 year 10 year Inception
Class Y 1/3/91 25.73% 17.02% N/A 14.75%
S&P 500 19.29% 22.19% 18.48% -----%
[GRAPHIC APPEARS HERE] EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Fees You Pay Directly
Shareholder Transaction Expenses Class Y
Maximum sales charge imposed on None
purchases (as a % of offering price)
Maximum deferred sales charge None
Fees the Fund Pays Directly (and You Pay Indirectly)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class Y 0.50% None 0.25% 0.75%
The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual funds and is
for illustration only. The example assumes a 5% average annual return and that
you reinvest all of your dividends. Your actual costs may be higher or lower.
Example of Fund Expenses
Class Y
After 1 year $77
After 3 years $290
After 5 years $417
After 10 years $930
GROWTH AND INCOME FUNDS 9
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
Growth and Income Fund
FUND FACTS:
Goal:
. Capital Growth
. Current Income
Principal Investments:
. Stocks
. Bonds
. Convertible Stocks
Classes of Shares:
. Class Y
Investment Advisor:
. Evergreen Asset
Management Corp.
Portfolio Managers:
. Stephen A. Lieber
. Gary R. Buesser
NASDAQ Symbols:
EVVTX (Class Y)
[GRAPHIC APPEARS HERE] INVESTMENT GOAL
The Fund seeks capital growth in the value of its shares and current income.
[GRAPHIC APPEARS HERE] INVESTMENT STRATEGY
The Fund invests primarily in stocks of established companies that the Fund's
advisor believes are undervalued in the marketplace and have a trigger, or
catalyst, that will bring the stock's price into line with its actual or
potential value. The catalysts may include new products, new management, changes
in regulation and/or restructuring potential. For balance, the Fund may also
invest in bonds and convertible stocks. The Fund may invest up to 5% of its
assets in lower credit quality bonds (junk bonds).
Dividend Payment Schedule: Quarterly
[GRAPHIC APPEARS HERE] RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:
. Stock Market Risk
Interest Rate Risk
. Credit Risk
Because the Fund may invest in lower credit quality bonds (junk bonds), it may
be more susceptible to credit risk than a fund that invests in higher quality
bonds. Lower-rated bonds are less secure financially and more sensitive to
downturns in the economy.
[GRAPHIC APPEARS HERE] PORTFOLIO MANAGEMENT
The Fund's investment advisor is Evergreen Asset Management Corp. ("EAMC").
The day-to-day management of the Fund has been handled by Stephen A. Lieber and
Gary R. Buesser since July, 1997. Mr. Lieber is Chairman and Co-Chief Executive
Officer of EAMC. He was the founding partner of Lieber & Company in 1969, the
original sponsor of the Evergreen Funds. He has been in the investment
management business since 1952. Mr. Buesser joined EAMC in 1996 after 15 years
of investment experience with Cowen Asset Management and Shearson Lehman
Brothers.
10 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
[GRAPHIC APPEARS HERE] PERFORMANCE
The following charts show how the Fund has performed in the past.
This chart below shows the percentage gain or loss for Class Y shares of the
Fund in each of the last ten calendar years. It should give you a general
idea of how the Fund's return has varied from year-to-year. This graph includes
the effects of Fund expenses.
Year-by-Year Total Return for Class Y Shares (%)
[BAR CHART APPEARS HERE]
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
30.92% 23.51% 32.68%
Best Quarter: 2nd Quarter 1997 +15.49%
Worst Quarter: 1st Quarter 1997 -0.57%
Year to date total return through 9/30/98 is __.
This next table lists the Fund's average year-by-year return over the past one,
five and ten years through 12/31/97. At the bottom of the table you can compare
this performance with the S&P 400 Index and the Lipper Growth and Income Funds
Average. The S&P 400 index is an unmanaged index of 400 publicly-traded U.S.
stocks. The Lipper Growth and Income Funds Average represents the performance of
growth and income funds tracked by Lipper Analytical Services, an independent
fund monitor and includes investments similar to the Funds. Neither index is an
actual investment. Past performance is not an indication of future results.
Average Annual Total Return
(for the period ended 12/31/97)
Inception Since
Date 1 year 5 year 10 year Inception
Class Y 1/3/95 30.92% N/A N/A 29.12%
S&P 400 11.21% 17.56% 18.21% -----%
Lipper Growth and Inc. 11.36% 18.33% 15.34% -----%
[GRAPHIC APPEARS HERE] EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Fees You Pay Directly
Shareholder Transaction Expenses Class Y
Maximum sales charge imposed on None
purchases (as a % of offering price)
Maximum deferred sales charge None
Fees the Fund Pays Directly (and You Pay Indirectly)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class Y 0.90% None 0.31% 1.21%
The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual funds and is
for illustration only. The example assumes a 5% average annual return and that
you reinvest all of your dividends. Your actual costs may be higher or lower.
Example of Fund Expenses
Class Y
After 1 year $123
After 3 years $384
After 5 years $665
fter 10 years $1,466
GROWTH AND INCOME FUNDS 11
<PAGE>
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EVERGREEN
- --------------------------------------------------------------------------------
Small Cap
Equity Income Fund
FUND FACTS:
Goal:
. Current Income
. Capital Growth
Principal Investments:
. Small-Cap Common
Stocks
. Small-Cap Preferred
Convertible Stocks
Classes of Shares:
. Class Y
Investment Advisor:
. Evergreen Asset
Management Corp.
Portfolio Manager:
. Nola Maddox Falcone
NASDAQ Symbols:
ESCEX (Class Y)
[GRAPHIC APPEARS HERE] INVESTMENT GOAL
The Fund seeks current income and capital growth in the value of its shares.
[GRAPHIC APPEARS HERE] INVESTMENT STRATEGY
The Fund invests primarily in common stocks and convertible preferred stocks of
small companies (less than $1 billion in market capitalization). The Fund's
manager seeks to limit the investment risk of small company investing by seeking
stocks that produce regular income and trade below what the manager considers
their intrinsic value. The Fund's manager looks specifically for various growth
triggers, or catalysts, that will bring the stock's price into line with its
actual or potential value such as new products, new management, changes in
regulation and/or restructuring potential.
Dividend Payment Schedule: Quarterly
[GRAPHIC APPEARS HERE] RISK FACTORS
Your investment in the Fund is subject to the risks discussed in the "Overview"
on page 1 under the headings:
. Stock Market Risk
. Interest Rate Risk
. Credit Risk
In addition, your investment will be subject to special risks associated with
investing in securities issued by small companies. Smaller, less
well-established companies tend to be more dependent on individual managers and
limited products and product lines. Additionally, securities issued by small
companies also tend to fluctuate in value more dramatically than those of larger
companies.
[GRAPHIC APPEARS HERE] PORTFOLIO MANAGEMENT
The Fund's investment advisor is Evergreen Asset Management Corporation
("EAMC").
The day-to-day management of the Fund is handled by Nola Maddox Falcone,
President and Co-Chief Executive Officer of EAMC. Ms. Falcone has been the
Fund's portfolio manager since its inception in 1993.
12 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
[GRAPHIC APPEARS HERE] PERFORMANCE
The following charts show how the Fund has performed in the past.
This chart below shows the percentage gain or loss for the Class y shares of the
Fund in each calendar year since the Class Y shares' inception on 10/1/93. It
should give you a general idea of how the Fund's return has varied from year-to-
year. This graph includes the effects of Fund expenses.
Year-by-Year Total Return for Class Y Shares (%)
[BAR CHART APPEARS HERE]
1997 1996 1995* 1994 1993 1992 1991 1990 1989 1988
33.34% 22.01% 28.93%
Best Quarter: 3rd Quarter 1997 +13.21%
Worst Quarter: 3rd Quarter 1996 +1.83%
*From inception on 1/3/95 to 12/31/95.
Year to date total return through 9/30/98 is __.
This next table lists the Fund's average year-by-year return over the past year
and since Class Y shares' inception. At the bottom of the table you can compare
this performance with the Russell 2000 Index and the Wilshire Small Cap Value
Index. The Russell 2000 Index is an unmanaged index of 2000 publicly-traded U.S.
stocks and is often used to indicate the performance of the broad stock market,
including smaller companies. The Wilshire Small Cap Value Index is an unmanaged
index of representative small company value stocks including investments similar
to the Fund's. Neither index is an actual investment. Past performance is not an
indication of future results.
Average Annual Total Return
(for the period ended 12/31/97)
Inception Since
Date 1 year 5 year 10 year Inception
Class Y 1/3/95 33.34% N/A N/A 28.24%
Russell 2000 - - - -----%
Wilshire Small Cap - - - -----%
[GRAPHIC APPEARS HERE] EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Fees You Pay Directly
Shareholder Transaction Expenses Class Y
Maximum sales charge imposed on None
purchases (as a % of offering price)
Maximum deferred sales charge None
Fees the Fund Pays Directly (and You Pay Indirectly)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class Y 1.00% None 0.43% 1.43%
The table below shows the total expenses you would pay on a $10,000 investment
over one-, three-, five- and ten-year periods. The example is intended to help
you compare the cost of investing in this Fund versus other mutual funds and is
for illustration only. The example assumes a 5% average annual return and that
you reinvest all of your dividends. Your actual costs may be higher or lower.
Example of Fund Expenses
Class Y
After 1 year $146
After 3 years $452
After 5 years $782
After 10 years $1,703
GROWTH AND INCOME FUNDS 13
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
THE FUNDS' INVESTMENT ADVISORS
The investment advisor manages a Fund's investments and supervises its daily
business affairs. There are three different investment advisors for the
Evergreen Growth and Income Funds. The advisor for each Fund is listed in the
section entitled portfolio management. All investment advisors for the Evergreen
Funds are subsidiaries of First Union Corporation, the sixth largest bank
holding company in the United States, with over $220 billion in consolidated
assets as of {date}. First Union Corporation is located at 301 South College
Street, Charlotte, North Carolina 28288-0630.
Evergreen Asset Management Corp. (EAMC), with its predecessors, has served
as investment advisor to the Evergreen Funds since 1971, and currently manages
over $xx billion in assets for xx of the Evergreen Funds. EAMC is located at
2500 Westchester Avenue, Purchase, New York 10577.
Evergreen Investment Management Company (EIMC) has been managing mutual funds
and private accounts since 1932 and currently manages over $xx billion in assets
for xx of the Evergreen Funds. EIMC is located at 200 Berkeley Street, Boston,
Massachusetts 02116-5034.
Capital Management Group of First Union National Bank (CMG) has been managing
money for over 50 years and currently manages over $xx billion in investment
assets, including xx of the Evergreen Funds. CMG is located at 201 South College
Street, Charlotte, North Carolina 28288-0630.
Year 2000 Compliance
The investment advisors and other service providers for the Evergreen Funds are
taking steps to address any potential Year 2000-related computer problems.
However, there is some risk that these problems could disrupt the funds'
operations or financial markets generally.
CALCULATING THE SHARE PRICE
The value of one share, also known as the net asset value, or NAV, is calculated
on each day the New York Stock Exchange is open as of the close of the Exchange
(normally 4:00 p.m. Eastern time). We calculate the share price for each share
by adding up the total assets of the portfolio, subtracting all liabilities,
then dividing by the total number of shares outstanding. Each security held by a
fund is valued using the most recent market quote for that security. If no
market quotation is available for a given security, we will price that security
at fair value according to policies established by the Funds' Board of Trustees.
The amount you are charged for a fund purchase or redemption is the next price
calculated after the order is received and all required information is provided.
The value of your account at any given time is the latest share price multiplied
by the number of shares you own. Your account balance may change daily because
the share price may change daily.
HOW TO CHOOSE A FUND
There are two important steps to choosing an Evergreen Fund:
1. Most importantly, read the prospectus to see if the fund is suitable for you.
2. Talk to an investment professional. He or she is qualified to give you
investment advice based on your investment goals and financial situation and
will be able to answer questions you may have after reading the fund's
prospectus. He or she can also assist you through all phases of opening your
account.
WHO CAN BUY CLASS Y SHARES
Class Y shares are only offered to:
. Persons who owned shares in a fund advised by Evergreen Asset Management
Corp. on or before December 31,1994.
Certain institutional investors
. Investment advisory client of an advisor of an Evergreen Fund (or the
advisor's affiliate)
14 GROWTH AND INCOME FUNDS
<PAGE>
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EVERGREEN
- --------------------------------------------------------------------------------
HOW TO BUY SHARES
Evergreen Funds' low investment minimums make investing easy. Simply fill out an
application and send in your payment, or talk to your investment professional.
Minimum Investments
Initial Additional
- --------------------------------------------------------------------------------
Regular Accounts $1,000 None
IRAs $250 None
Systematic Investment Plan $50 $25
<TABLE>
<CAPTION>
Method Opening an Account Adding to an Account
<S> <C> <C>
By Mail or . Complete and sign the account application. . Make your check payable to Evergreen Funds
through an . Make the check payable to Evergreen Funds. . Write a note specifying:
Investment . Mail the application and your check to the address below: - the fund name
Professional - share class
Evergreen Service Company Overnight Address: - your account number
P.O. Box 2121 Evergreen Service Company - the name(s) in which the account is registered
Boston, MA 02106-2121 200 Berkeley St.
Boston, MA 02116
. Or deliver them to your investment representative (provided . Mail to the address to the left or deliver
he or she has a broker/dealer arrangement with Evergreen) to your investment representative
By Phone . Call 1-800-343-2898 to set up an account number and get wiring . Call the Evergreen Express Line at 1-800-346-3858
instructions (call before 12 noon if you want wired funds to anytime 24 hours a day or 1-800-343-2898 between
be credited that day). 8 a.m. and 6 p.m. Eastern time, Monday through
. Instruct your bank to wire or transfer your purchase (they Friday.
may charge a wiring fee). . If your bank account is set up on file, you can
. Complete the account application and mail to: request either:
- Federal Funds Wire (offers immediate access
Evergreen Service Company Overnight Address: to funds) or
P.O. Box 2121 Evergreen Service Company - Electronic transfer through Automated Clearing
Boston, MA 02106-2121 200 Berkeley St. House (ACH) which avoids wiring fees.
Boston, MA 02116
. Wires received after 4:00 p.m. Eastern time on market trading
days will receive the next market day's closing price.
By Exchange . You can make an additional investment by exchange from an existing Evergreen Funds account by contacting your
investment representative or calling the Evergreen Express Line at 1-800-346-3858*.
. There is no sales charge or redemption fee when exchanging funds within the Evergreen fund family.
. Orders placed before 4 p.m. Eastern time on market trading days will receive that day's closing share price (if
not, you will receive the next market day's closing price).
. Exchanges are limited to three per calendar quarter, and five per calendar year.
. Exchanges between accounts which do not have identical ownership must be in writing with a signature guarantee
(see below).
Systematic . You can transfer money automatically from your bank account into . To establish automatic investing for an existing
Investment your fund on a monthly basis. account, call 1-800-343-2898 for an application.
Plan (SIP) . Initial investment minimum is $50 if you invest at least $25 per . The minimum is $25 per month or $75 per quarter.
month with this service. . You can also establish an investing program
. To enroll, check off the box on the account application and through direct deposit from your paycheck.
provide: Call 1-800-343-2898 for details.
- your bank account information
- the amount and date of your monthly investment
</TABLE>
* Once you have authorized either the telephone exchange or redemption service,
anyone with a Personal Identification Number (PIN) and the required account
information (including your broker) can request a telephone transaction in your
account. All calls are recorded or monitored for verification, recordkeeping and
quality-assurance purposes. The Evergreen Funds reserve the right to terminate
the exchange privilege of any shareholder who exceeds the listed maximum number
of exchanges, as well as to reject any large dollar exchange if placing it
would, in the judgment of the portfolio managers, adversely affect the price of
the fund.
GROWTH AND INCOME FUNDS 15
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
HOW TO SELL SHARES
We offer you several convenient ways to redeem your shares in any of the
Evergreen Funds:
Methods Requirements
Call Us . Call the Evergreen Express Line at 1-800-346-3858 anytime 24
hours a day or 1-800-343-2898 between 8 a.m. and 6 p.m. Eastern
time, Monday through Friday.
. This service must be authorized ahead of time, and is only
available for regular accounts.*
. All authorized requests before 4 p.m. Eastern time on market
trading days will be processed at that day's closing price.
Requests after 4 p.m. will be processed the following business
day.
. We can either:
- wire the proceeds into your bank account (service charges may
apply)
- electronically transmit your redemption to your bank account
via the Automated Clearing House (ACH) service
- mail you a check.
. All telephone calls are recorded for your protection. We are not
responsible for properly acting on telephone orders we
reasonably believe are genuine.
. See exceptions list below for requests that must be made in
writing.
Write Us . You can mail a redemption request to:
Evergreen Service Company Overnight Address:
P.O. Box 2121 Evergreen Service Company
Boston, MA 02106-2121 200 Berkeley St.
Boston, MA 02116
. Your letter of instructions must:
- list the fund name and the account number
- indicate the number of shares or dollar value you wish to
redeem
- be signed by the registered owner(s)
. See list below for requests that must be signature guaranteed.
. To redeem from an IRA or other retirement account, call
1-800-346-3858 for a special application.
Sell Your . You may also redeem your shares through participating broker-
Shares in dealers by delivering a letter as described above to your broker
Person dealer.
. A fee may be charged for this service.
Systematic . You can transfer money automatically from your fund on a monthly
Withdrawal or quarterly basis -- without redemption fees.
Plan (SWP) . The withdrawal can be mailed to you, or deposited directly to
your bank account.
. A minimum of $75 per month
. A maximum of 1% of your account per month or 3% per quarter
. To enroll, call 1-800-343-2898 for an application.
Timing of Proceeds
Normally, we will send your redemption proceeds on the next business day after
we receive your request; however, we reserve the right to wait up to seven
business days to redeem any investments made by check and five business days
for investments made by ACH transfer. We also reserve the right to redeem in
kind, and to redeem the account if your redemption brings the account balance
below the initial minimum of $1,000.
Exceptions: Redemption Requests That Require A Signature Guarantee
To protect you and Evergreen Funds against fraud, certain redemption requests
must be in writing with your signature guaranteed. A signature guarantee can
be obtained at most banks and securities dealers. A notary public is not
authorized to provide a signature guarantee. The following circumstances
require signature guarantees:
. You are redeeming more than $50,000
. You want the funds transmitted to a bank account not listed on the account
. You want the proceeds payable to anyone other than the registered owner(s) of
the account
. Either your address or the address of your bank account has been
changed within 30 days
. The account is registered in the name of a corporation, fiduciary and/or
institution.
In these cases, additional documentation is required:
corporate accounts: certified copy of corporate resolution
fiduciary accounts: copy of the power of attorney or other governing document
Who Can Provide A Signature Guarantee:
. Commercial Bank
. Trust Company
. Savings Association
. Credit Union
. Member of a U.S. stock exchange
16 GROWTH AND INCOME FUNDS
<PAGE>
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EVERGREEN
- --------------------------------------------------------------------------------
OTHER SERVICES
Evergreen Express Line
Use our automated, 24-hour service to check your balance, purchase, redeem or
exchange shares, find a fund's price, yield or total return, order a statement
or duplicate tax form, or hear market commentary from Evergreen portfolio
managers.
Automatic Reinvestment of Dividends
For the convenience of investors, all dividends and capital gains distributions
are automatically reinvested, unless you request otherwise. Distributions can be
made by check or electronic transfer through the Automated Clearing House (ACH)
to your bank account. The details of your dividends and other distributions will
be included on your statement.
Payroll Deduction
If you want to invest automatically through your paycheck, call us to find out
how you can set up direct payroll deposit. Funds will be deposited into your
account using the Electronic Funds Transfer System. We will provide the account
number. Your payroll department will let you know the date of the pay period
when your investment begins.
Telephone Investment Plan
You may make additional investments electronically in an existing account at
amounts of not less than $100 or more than $10,000 per investment. Telephone
requests received by 4:00 p.m. Eastern time will be credited to your account the
day the request is received.
Dividend Exchange
You may elect on the application to reinvest capital gains and/or dividends
earned in one Evergreen fund into an existing account in another Evergreen fund
in the same share class -- automatically. Please indicate on the application the
Evergreen fund(s) into which you want to invest the distributions.
Reinvestment Privileges
Under certain circumstances, shareholders may, within one year of redemption,
reinstate their accounts at the current price (net asset value).
THE TAX CONSEQUENCES OF INVESTING IN THE FUND
You may be taxed in two ways:
. On fund distributions (capital gains and dividends)
. On the profit you make when you sell any or all of your shares.
Fund Distributions
A mutual fund passes along to all of its shareholders any income or profits it
receives from its investments. The shareholders of the fund then pay any taxes
due, whether they receive these distributions in cash or elect to have them
reinvested. The fund distributes two types of taxable income to you:
. Dividends. The fund pays either a monthly, quarterly or yearly dividend from
the dividends, interest and other income on the securities in which it
invests. The frequency of dividends for each particular Evergreen growth and
income fund is listed under the fund's investment strategy.
. Capital Gains. When a mutual fund sells a security it owns for a profit, the
result is a capital gain. Evergreen Growth and Income Funds generally
distribute capital gains at least once a year, near the end of the calendar
year. Short-term capital gains reflect securities held by the fund for a year
or less and are considered ordinary income just like dividends. Profits on
securities held longer than 12 months are considered long-term capital gains
and are taxed at a special tax rate (20% for most taxpayers, on sales made
after January 1, 1998.)
All distributions with the exception of monthly dividends will cause a fund's
share price to drop by the amount of a distribution.
Dividend and Capital Gain Reinvestment
Unless you choose otherwise on the account application, all dividend and capital
gain payments will be reinvested to buy additional shares. Distribution checks
that are returned and distribution checks that are uncashed when the shareholder
has failed to respond to mailings from the shareholder servicing agent will
automatically be reinvested to buy additional shares.
GROWTH AND INCOME FUNDS 17
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
No interest will accrue on amounts represented by uncashed distribution or
redemption checks.
We will send you a complete statement each January with the federal tax status
of dividends and distributions paid by each portfolio during the previous
calendar year.
Profits You Realize When You Redeem Shares
When you sell shares in a mutual fund, whether by redeeming or exchanging, you
have created a taxable event. You must report any gain or loss on your taxes
unless the transaction occurred in a tax-deferred retirement plan or a money
market fund. It is your responsibility to keep accurate records of your mutual
fund transactions. You will need this information when you file your income
taxes, since you must report any capital gains or losses you incur when you sell
shares. Remember, an exchange is a purchase and a sale for tax purposes.
Tax Reporting
Evergreen Service Company provides you with a tax statement of your dividend and
capital gains distributions for the year on Form 1099 DIV. Proceeds from a sale
are reported on Form 1099B. You must report these on your taxes. Since the IRS
receives a copy as well, you could pay a penalty if you neglect to report them.
Evergreen Service Company will send you a tax information guide each year during
tax season, which may include a cost basis statement detailing the gain or loss
on taxable transactions you made during the year. Please consult your own tax
advisor for further information regarding the federal, state and local tax
consequences of an investment in the funds.
Retirement Plans
You may invest in each fund through various retirement plans, including IRAs,
401(k) plans, Simplified Employee Plan (SEP) IRAs, 403(b) plans, 457 plans and
others. For special rules concerning these plans, including applications,
restrictions, tax advantages, and potential sales charge waivers, contact your
broker/dealer. To determine if a retirement plan is appropriate for you, consult
your tax advisor.
SALES COMPENSATION AND EXPENSES
Every mutual fund has fees and expenses that are assessed either directly or
indirectly. This section describes each of those fees.
Management Fee
The management fee pays for the normal expenses of managing the fund, including
portfolio manager salaries, research costs, investment advisory fees and related
expenses.
12(b)-1 Fee
The Trustees of Evergreen Funds have approved a policy to assess 12(b)-1 fees
for Class A, B and C shares. These fees will increase the cost of your
investment. The purpose of the 12(b)-1 fee is to promote the sale of more shares
of funds to the public. The Fund might use this fee for advertising and
marketing and as a "service fee" to the broker/dealer to compensate for
additional shareholder services.
Other Expenses
This figure covers miscellaneous fees from outside service providers. These may
include legal, audit, custodial and safekeeping fees, the printing and mailing
of reports and statements, 24-hour telephone service, automatic reinvestment of
distributions and other conveniences for which the shareholder pays no
transaction fees.
Total Fund Operating Expenses
The total cost of running the fund is called the expense ratio. As a
shareholder, you are not charged these fees directly; instead they are taken out
before the fund's price is calculated, and are expressed as a percentage of the
fund's net assets. The effect of these fees is reflected in any performance
numbers for that share class. Because these fees are "invisible," investors
should examine them closely in the prospectus, especially when comparing one
fund with another fund in the same investment category. There are two things to
remember about expense ratios: 1) your total return in the fund is reduced in
direct proportion to the fees; and 2) expense ratios can vary greatly between
funds and fund families, from under 0.25 percent to over 3 percent.
18 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
This section looks in detail at the results for one share in each share class of
the fund -- how much income it earned, how much of this income was passed along
as a distribution and how much the return was reduced by expenses. These tables,
except for Income and
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
UTILITY FUND CLASS Y
Year Ended July 31, Year Ended December 31,
------------------- -------------------------
1998 1997** 1996 1995 1994***
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value beginning of year $11.46 $10.58 $10.82 $9.00 $9.51
------ ------ ------ ----- -----
..........................................................................................................................
Income from investment operations
Net investment income 0.46 0.25 0.44 0.47 0.37
..........................................................................................................................
Net realized and unrealized gains or losses on securities
and foreign currency related transactions 1.45 0.88 0.03 2.27 (0.50)
------ ------ ------ ----- -----
..........................................................................................................................
Total from investment operations 1.91 1.13 0.47 2.74 (0.13)
------ ------ ------ ----- -----
..........................................................................................................................
Less distributions
From net investment income (0.48) (0.25) (0.43) (0.47) (0.38)
.........................................................................................................................
From net realized gain on securities and foreign
currency related transactions (1.12) 0 (0.28) (0.45) 0
------ ------ ------ ----- -----
..........................................................................................................................
Total distributions (1.60) (0.25) (0.71) (0.92) (0.38)
------ ------ ------ ----- -----
..........................................................................................................................
Net asset value end of year $11.77 $11.46 $10.58 $10.82 $ 9.00
------ ------ ------ ----- -----
..........................................................................................................................
Total return 17.60% 10.85% 4.50% 31.30% (1.60%)
..........................................................................................................................
Ratios/supplemental data
Net assets end of year (thousands) $1,695 $1,627 $2,000 $7,791 $5,201
..........................................................................................................................
Ratios to average net assets:
Total expenses 0.74% 0.74%++ 0.61% 0.54% 0.40%++
..........................................................................................................................
Total expenses, excluding indirectly paid expenses 0.74% 0.73%++ N/A N/A N/A
..........................................................................................................................
Total expenses, excluding fee waivers and expense reimbursements 0.89% 0.94%++ 0.89% 0.93% 1.24%++
.........................................................................................................................
Net investment income 3.82% 4.06%++ 4.01% 4.76% 4.93%++
..........................................................................................................................
Portfolio turnover data 62% 50% 59% 88% 23%
</TABLE>
++ Annualized.
** For the seven-month period ended July 31, 1997. The Fund changed its fiscal
year end from December 31 to July 31, effective July 31, 1997.
*** For the period from February 24, 1994 (commencement of class operations) to
December 31, 1994.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FUND FOR TOTAL RETURN
CLASS Y
Year Ended July 31,
-------------------------
1998 1997***
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value beginning of year $20.62 $17.74
------ ------
.......................................................................................
Income from investment operations
Net investment income 0.24 0.18
.......................................................................................
Net realized and unrealized gains or losses on
securities and foreign currency related transactions 2.51 2.86
------ ------
.......................................................................................
Total from investment operations 2.75 3.04
------ ------
.......................................................................................
Less distributions
From net investment income (0.24) (0.16)
.......................................................................................
From net realized gain on securities and foreign
currency related transactions (1.52) 0
------ ------
......................................................................................
Total distributions (1.76) (0.16)
------ ------
.......................................................................................
Net asset value end of year $21.61 $20.62
------ ------
.......................................................................................
Total return 14.29% 17.22%
.......................................................................................
Ratios/supplemental data
Net assets end of year (thousands) $111 $93
.......................................................................................
Ratios to average net assets:
Total expenses 0.93% 1.34%++
.......................................................................................
Total expenses, excluding indirectly paid expenses 0.93% 1.34%++
.......................................................................................
Net investment income 1.31% 0.79%++
......................................................................................
Portfolio turnover data 66% 41%
</TABLE>
++ Annualized.
*** For the period from January 13, 1997 (commencement of class operations) to
July 31, 1997.
GROWTH AND INCOME FUNDS 19
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
Growth Fund, have been audited by KPMG Peat Marwick LLP, the Funds' independent
accountants. Income and Growth Fund's tables have been audited by
PricewaterhouseCoopers LLP, that Fund's independent accountants. For a more
complete picture of the Funds' financials, please see the Funds' Annual Report
as well as the Statement of Additional Information (SAI).
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
INCOME AND GROWTH FUND CLASS Y
Year Ended July 31, Year Ended January 31, Year Ended
------------------- ------------------------------
Per Share Data 1998 1997** 1997 1996 1995*** March 31, 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value beginning of year $23.98 $21.81 $20.16 $17.28 $18.29 $20.90
------ ------ ------ ------ ------ ------
....................................................................................................................................
Income from investment operations
Net investment income 1.02 0.55 1.08 1.10 0.87 1.08
...................................................................................................................................
Net realized and unrealized gains or losses on
securities and foreign currency related transactions 0.89 2.16 1.66 2.87 (0.55) (1.41)
------ ------ ------ ------ ------ ------
...................................................................................................................................
Total from investment operations 1.91 2.71 2.74 3.97 0.32 (0.33)
------ ------ ------ ------ ------ ------
....................................................................................................................................
Less distributions
From net investment income (1.08) (0.54) (1.09) (1.09) (1.08) (1.08)
....................................................................................................................................
From net realized gain on securities and foreign
currency related transactions (1.59) 0 0 0 (0.25) (1.20)
------ ------ ------ ------ ------ ------
....................................................................................................................................
Total distributions (2.67) (0.54) (1.09) (1.09) (1.33) (2.28)
------ ------ ------ ------ ------ ------
....................................................................................................................................
Net asset value end of year $23.22 $23.98 $21.81 $20.16 $17.28 18.29
------ ------ ------ ------ ------ ------
....................................................................................................................................
Total return 8.16% 12.65% 14.10% 23.50% 1.90% (2.10)%
...................................................................................................................................
Ratios/supplemental data
Net assets end of year (millions) $ 880 $ 900 $ 858 $ 914 $ 942 $1,065
....................................................................................................................................
Ratios to average net assets:
Total expenses 1.25% 1.20%++ 1.18% 1.19% 1.24%++ 1.18%
....................................................................................................................................
Total expenses, excluding indirectly paid expenses 1.25% 1.20%++ N/A N/A N/A N/A
...................................................................................................................................
Total expenses, excluding fee waivers and expense
reimbursements N/A N/A N/A N/A N/A N/A
...................................................................................................................................
Interest expense N/A N/A 0.03% N/A N/A N/A
....................................................................................................................................
Net investment income 4.46% 4.97%++ 5.14% 5.70% 5.70%++ 5.29%
....................................................................................................................................
Portfolio turnover rate 133% 72% 168% 138% 151% 106%
</TABLE>
++ Annualized.
** For the six-month period ended July 31, 1997. The Fund changed its fiscal
year end from January 31 to July 31, effective July 31, 1997.
*** For the ten-month period ended January 31, 1995. The Fund changed its
fiscal year end from March 31 to January 31, effective January 31, 1995.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE FUND CLASS Y
Year Ended July 31, Year Ended December 31,
------------------- ----------------------------------------
1998 1997** 1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value beginning of period $24.64 $20.57 $20.45 $16.61 $17.63 $17.11
------ ------ ------ ------ ------ ------
..................................................................................................................................
Income from investment operations
Net investment income 0.35 0.25 0.44 0.57 0.56 0.52
..................................................................................................................................
From net realized gain on securities and
foreign currency related transactions 1.97 4.03 3.49 4.72 (0.20) 1.12
------ ------ ------ ------ ------ ------
..................................................................................................................................
Total from investment operations 2.32 4.28 3.93 5.29 0.36 1.64
------ ------ ------ ------ ------ ------
..................................................................................................................................
Less distributions
From net investment income (0.35) (0.21) (0.47) (0.55) (0.56) (0.54)
..................................................................................................................................
From net realized gain on securities and
foreign currency related transactions (4.38) 0 (3.34) (0.90) (0.82) (0.58)
------ ------ ------ ------ ------ ------
..................................................................................................................................
Total distributions (4.73) (0.21) (3.81) (1.45) (1.38) (1.12)
------ ------ ------ ------ ------ ------
..................................................................................................................................
Net asset value end of year $22.23 $24.64 $20.57 $20.45 $16.61 $17.63
------ ------ ------ ------ ------ ------
..................................................................................................................................
Total Return 9.79% 20.93% 19.20% 32.20% 2.10% 9.70%
..................................................................................................................................
Ratios/Supplemental data
Net assets end of year (millions) $183 $1,149 $996 $761 $507 $463
..................................................................................................................................
Ratios to average net assets:
Total expenses 0.70% 0.67%++ 0.66% 0.65% 0.68% 0.65%
..................................................................................................................................
Total expenses, excluding indirectly paid expenses 0.70% 0.67%++ N/A N/A N/A N/A
..................................................................................................................................
Net investment income 1.47% 1.91%++ 2.02% 3.02% 3.21% 2.98%
..................................................................................................................................
Portfolio turnover rate 69% 6% 91% 53% 70% 46%
</TABLE>
++ Annualized.
** For the seven-month period ended July 31, 1997. The Fund changed its fiscal
year end from December 31 to July 31, effective July 31, 1997.
20 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GROWTH AND INCOME FUND CLASS Y
<TABLE>
<CAPTION>
Year Ended July 31, Year Ended December 31,
------------------- ---------------------------------------
Per Share Data: 1998 1997** 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value beginning of year $ 27.29 $ 22.55 $ 18.64 $ 14.52 $ 15.41 $ 14.18
------- ------- ------- ------- ------- -------
...............................................................................................................................
Income from investment operations
Net investment income 0.24 0.11 0.18 0.18 0.14 0.14
................................................................................................................................
Net realized and unrealized gains or losses on
securities and foreign currency related transactions 2.87 4.73 4.25 4.59 0.12 1.91
---- ---- ---- ---- ---- ----
................................................................................................................................
Total from investment operations 3.11 4.84 4.43 4.77 .26 2.05
---- ---- ---- ---- ---- ----
................................................................................................................................
Less distributions
From net investment income (0.20) (0.10) (0.17) (0.17) (0.14) (0.14)
...............................................................................................................................
From net realized gain on securities and
foreign currency related transactions (1.01) 0 (0.35) (0.48) (1.01) (0.68)
------ -- ------ ------ ------ ------
...............................................................................................................................
Total distributions (1.21) (0.10) (0.52) (0.65) (1.15) (0.82)
------ ------ ------ ------ ------ ------
................................................................................................................................
Net asset value end of year $ 29.19 $ 27.29 $ 22.55 $ 18.64 $ 14.52 $ 15.41
------- ------- ------- ------- ------- -------
................................................................................................................................
Total return 11.56% 21.52% 23.80% 32.90% 1.70% 14.40%
...............................................................................................................................
Ratios/supplemental data
Net assets end of year (millions) $ 801 $ 616 $ 442 $ 141 $ 73 $ 77
................................................................................................................................
Ratios to average net assets:
Total expenses 1.20% 1.21%++ 1.16% 1.27% 1.33% 1.26%
................................................................................................................................
Total expenses, excluding indirectly paid expenses 1.20% 1.21%++ 1.16% N/A N/A N/A
................................................................................................................................
Total expenses, excluding fee waivers and expense
reimbursements N/A N/A N/A N/A N/A N/A
................................................................................................................................
Net investment income 0.86% 0.82%++ 0.93% 1.11% 0.96% 0.99%
................................................................................................................................
Portfolio turnover rate 20% 6% 14% 17% 29% 28%
<CAPTION>
++ Annualized.
** For the seven-month period ended July 31, 1997. The Fund changed its fiscal
year end from December 31 to July 31, effective July 31, 1997.
- ------------------------------------------------------------------------------------------------------------------------------------
SMALL CAP
EQUITY INCOME FUND CLASS Y
Year Ended July 31, Year Ended December 31,
--------------------- ---------------------------------------------
1998 1997** 1996 1995 1994 1993***
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value beginning of year $ 15.71 $ 13.12 $ 11.58 $ 9.70 $ 10.15 $ 10.00
-------- -------- -------- --------- -------- --------
....................................................................................................................................
Income from investment operations
Net investment income 0.34 0.19# 0.38 0.38 0.34 0.10
...................................................................................................................................
Net realized and unrealized gains or losses on
securities and foreign currency related transactions 0.24 2.56 2.13 2.38 (0.41) 0.15
---- ---- ---- ---- ------ ----
....................................................................................................................................
Total from investment operations 0.58 2.75 2.51 2.76 (0.07) 0.25
---- ---- ---- ---- ------ ----
....................................................................................................................................
Less distributions
From net investment income (0.33) (0.15) (0.37) (0.38) (0.33) (0.10)
....................................................................................................................................
From net realized gain on securities and
foreign currency related transactions (0.19) 0.01 (0.60) (0.50) (0.05) 0
------ ---- ------ ----- ------ --
....................................................................................................................................
Total distributions (0.52) (0.16) (0.97) (0.88) (0.38) (0.10)
------ ---- ------ ----- ------ -----
...................................................................................................................................
Net asset value end of year $ 15.77 $ 15.71 $ 13.12 $ 11.58 $ 9.70 $ 10.15
-------- -------- -------- --------- -------- --------
...................................................................................................................................
Total return 3.57% 21.09% 22.40% 29.10% (0.70%) 2.50%
....................................................................................................................................
Ratios/supplemental data
Net assets end of year (thousands) $ 96,556 $ 42,374 $ 8,592 $ 4,806 $ 3,613 $ 2,236
....................................................................................................................................
Ratios to average net assets:
Total expenses 1.39% 1.39%++ 1.50% 1.50%++ 1.48% 0.00%
....................................................................................................................................
Total expenses, excluding indirectly paid expenses 1.39% 1.38%++ N/A N/A N/A N/A
....................................................................................................................................
Total expenses, excluding fee waivers and expense
reimbursements N/A 1.59% 4.75% 4.34%++ 4.68% 4.39%
...................................................................................................................................
Net investment income 2.23% 2.39%++ 3.36% 3.56%++ 3.72% 4.07%
....................................................................................................................................
Portfolio turnover rate 18% 13% 50% 48% 9% 15%
</TABLE>
++ Annualized.
# Net investment income is based on average shares outstanding during the
period.
** For the seven-month period ended July 31, 1997. The Fund changed its fiscal
year end from December 31 to July 31, effective July 31, 1997.
*** For the period from October 1, 1993 (commencement of class operations)
to December 31, 1993.
GROWTH AND INCOME FUNDS 21
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
Notes
22 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
Notes
GROWTH AND INCOME FUNDS 23
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
- --------------------------------------------------------------------------------
Evergreen Funds
Money Market
Treasury Money Market Fund
Money Market Fund
Municipal Money Market Fund
Pennsylvania Municipal Money Market Fund
Tax Exempt
Short Intermediate Municipal Fund
High Grade Tax Free Fund
Tax Free Fund
California Tax Free Fund
Connecticut Municipal Bond Fund
Florida Municipal Bond Fund
Florida High Income Municipal Bond Fund
Georgia Municipal Bond Fund
Maryland Municipal Bond Fund
Massachusetts Tax Free Fund
Missouri Tax Free Fund
New Jersey Tax Free Income Fund
New York Tax Free Fund
North Carolina Municipal Bond Fund
Pennsylvania Tax Free Fund
South Carolina Municipal Bond Fund
Virginia Municipal Bond Fund
Income
Capital Preservation and Income Fund
Short Intermediate Bond Fund
Intermediate Term Government Securities Fund
Intermediate Term Bond Fund
U.S. Government Fund
Diversified Bond Fund
Strategic Income Fund
High Yield Bond Fund
Balanced
American Retirement Fund
Balanced Fund
Tax Strategic Foundation Fund
Foundation Fund
Growth & Income
Utility Fund
Income and Growth Fund
Fund for Total Return
Value Fund
Blue Chip Fund
Growth and Income Fund
Small Cap Equity Income Fund
Domestic Growth
Strategic Growth Fund
Stock Selector Fund
Evergreen Fund
Omega Fund
Small Company Growth Fund
Aggressive Growth Fund
Micro Cap Fund
Global International
Global Leaders Fund
International Growth Fund
Global Opportunities Fund
Precious Metals Fund
Emerging Markets Growth Fund
Latin America Fund
Express Line
800.346.3858
Investor Services
800.343.2898
Retirement Plan Services
800.247.4075
www.evergreenfunds.com
24 GROWTH AND INCOME FUNDS
<PAGE>
- --------------------------------------------------------------------------------
QUICK REFERENCE GUIDE
- --------------------------------------------------------------------------------
1. Evergreen Express Line
Call 1-800-346-3858
24 hours a day to
. check your account
. order a statement
. get a fund's current price, yield and
total return
. buy, sell or exchange fund shares
2. Non-retirement account holders
Call 1-800-343-2898
Monday through Friday, 8 a.m. to 6 p.m. Eastern time to
. buy, sell or exchange shares
. order applications
. get assistance with your account
3. Retirement plan account holders
Call 1-800-247-4075
Monday through Friday, 8 a.m. to 6 p.m. Eastern time
4. Information Line for Hearing and Speech Impaired (TTY/TDD)
Call 1-800-343-2888
Monday through Friday, 8 a.m. to 6 p.m. Eastern time
5. Write us a letter
Evergreen Service Company
P.O. Box 2121
Boston, MA 02106-2121
. to buy, sell or exchange shares
. to change the registration on your account
. for general correspondence
6. For express, registered, certified mail:
Evergreen Service Company
200 Berkeley Street
Boston, MA 02116-5039
7. Contact us on-line:
www.evergreenfunds.com
8. Regular communications you'll receive:
Account Statements -- You'll receive quarterly statements for each fund you
own.
Confirmation Notices -- We send a confirmation of any transaction you make
within five days of the transaction.
Annual and Semiannual reports -- You'll receive a detailed financial report
on your fund(s) twice a year.
Tax Forms -- Each January you'll receive any tax forms you need to file
your taxes as well as the Evergreen Tax Information Guide.
Evergreen Events -- You'll receive a periodic newsletter published
exclusively for Evergreen shareholders.
<PAGE>
For More Information About the
Evergreen Growth and Income Funds, Ask for:
The funds' most recent Annual or Semi-Annual Report, which contains a complete
financial accounting for each fund and a complete list of portfolio holdings as
of a specific date, as well as commentary from the portfolio manager. This
commentary discusses the market conditions and investment strategies that
significantly affected the fund's performance during the most recent fiscal year
or period.
The Statement of Additional Information (SAI), which contains more detailed
information about the policies and procedures of the funds. The SAI has been
filed with the Securities and Exchange Commission ("SEC") and its contents are
legally considered to be part of this prospectus.
For questions, other information, or to request a copy of either document, call
1-800-343-2898 or ask your investment representative. We will mail material
within three business days.
Information about these funds (including the SAI) is also available on the SEC's
Internet web site at http://www.sec.gov, or, for a duplication fee, by writing
the SEC Public Reference Section, Washington DC 20549-6009. This material can be
reviewed and copied at the SEC's Public Reference Room in Washington, DC. For
more information, call the SEC at 1-800-SEC-0330.
[LOGO OF EVERGREEN FUNDS/SM/ APPEARS HERE]
Evergreen Distributor, Inc.
125 W. 55th Street
New York, New York 10019
Investment Company Account File #0000000
Oscar#000000
<PAGE>
EVERGREEN EQUITY TRUST
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
EVERGREEN EQUITY TRUST
200 BERKELEY STREET
BOSTON, MASSACHUSETTS 02116
(800) 633-2700
GROWTH AND INCOME FUNDS
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 1, 1998
EVERGREEN BLUE CHIP FUND ("BLUE CHIP")
EVERGREEN GROWTH AND INCOME FUND ("GROWTH/INCOME")
EVERGREEN INCOME AND GROWTH FUND ("INCOME/GROWTH")
EVERGREEN SMALL CAP EQUITY FUND ("SMALL CAP")
EVERGREEN FUND FOR TOTAL RETURN ("TOTAL RETURN")
EVERGREEN UTILITY FUND ("UTILITY")
EVERGREEN VALUE FUND ("VALUE")
(EACH A "FUND"; TOGETHER, THE "FUNDS" )
EACH FUND IS A SERIES OF EVERGREEN EQUITY TRUST (THE
"TRUST").
This Statement of Additional Information ("SAI") pertains to all
classes of shares of the Funds listed above. It is not a prospectus but should
be read in conjunction with the prospectuses dated December 1, 1998 for the Fund
in which you are interested. The Funds are offered through two separate
prospectuses: one offering Class A, Class B and Class C shares of each Fund, and
one offering Class Y shares of each Fund except Blue Chip. You may obtain either
of these prospectuses from Evergreen Distributor, Inc.
Certain information may be incorporated by reference to the Funds'
Annual Report dated July 31, 1998. You may obtain a copy of the Annual Report at
no cost by calling (800) 343- 2898.
24683
1
<PAGE>
TABLE OF CONTENTS
PART 1
FUND HISTORY.............................................................1-3
INVESTMENT POLICIES......................................................1-3
PRINCIPAL HOLDERS OF FUND SHARES.........................................1-5
EXPENSES................................................................1-11
PERFORMANCE.............................................................1-18
SERVICE PROVIDERS.......................................................1-19
FINANCIAL STATEMENTS....................................................1-20
PART 2
ADDITIONAL INFORMATION ON SECURITIES AND INVESTMENT PRACTICES............2-1
PURCHASE, REDEMPTION AND PRICING OF SHARES...............................2-7
PERFORMANCE CALCULATIONS................................................2-12
PRINCIPAL UNDERWRITER...................................................2-12
TAX INFORMATION.........................................................2-13
BROKERAGE...............................................................2-15
ORGANIZATION............................................................2-17
INVESTMENT ADVISORY AGREEMENT...........................................2-18
DISTRIBUTION PLANS AND AGREEMENTS...................................... 2-19
MANAGEMENT OF THE TRUST.................................................2-20
CORPORATE BOND RATINGS..................................................2-23
ADDITIONAL INFORMATION..................................................2-28
1- 2
<PAGE>
PART 1
FUND HISTORY
The Evergreen Equity Trust is an open-end management investment
company, which was organized as a Delaware business trust on September 18, 1998.
A copy of the Declaration of Trust is on file as an exhibit to the Trust's
Registration Statement, of which this SAI is a part. This summary is qualified
in its entirety by reference to the Declaration of Trust.
INVESTMENT POLICIES
FUNDAMENTAL INVESTMENT RESTRICTIONS
Each Fund has adopted the fundamental investment restrictions set forth
below which may not be changed without the vote of a majority of the Fund's
outstanding shares, as defined in the Investment Company Act of 1940 (the"1940
Act"). Where necessary, an explanation beneath a fundamental policy describes
the Fund's practices with respect to that policy, as allowed by current law. If
the law governing a policy changes, the Fund's practices may change accordingly
without a shareholder vote. Unless otherwise stated, all references to the
assets of the Fund are in terms of current market value.
1. DIVERSIFICATION
Each Fund may not make any investment that is inconsistent with its
classification as a diversified investment company under the 1940 Act.
FURTHER EXPLANATION OF DIVERSIFICATION POLICY:
To remain classified as a diversified investment company under the 1940
Act, each Fund must conform with the following: With respect to 75% of its total
assets, a diversified investment company may not invest more than 5% of its
total assets, determined at market or other fair value at the time of purchase,
in the securities of any one issuer, or invest in more than 10% of the
outstanding voting securities of any one issuer, determined at the time of
purchase. These limitations do not apply to investments in securities issued or
guaranteed by the United States ("U.S.") government or its agencies or
instrumentalities.
2. CONCENTRATION
Each Fund may not concentrate its investments in the securities of
issuers primarily engaged in any particular industry (other than securities that
are issued or guaranteed by the U.S. government or its agencies or
instrumentalities), except that Utility will concentrate its investments in
utility industries.
FURTHER EXPLANATION OF CONCENTRATION POLICY:
Each Fund except Utility may not invest more than 25% of its total
assets, taken at market value, in the securities of issuers primarily engaged in
any particular industry (other than securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities).
1- 3
<PAGE>
3. ISSUING SENIOR SECURITIES
Except as permitted under the 1940 Act, each Fund may not issue senior
securities.
4. BORROWING
Each Fund may not borrow money, except to the extent permitted by
applicable law.
FURTHER EXPLANATION OF BORROWING POLICY:
Each Fund may borrow from banks in an amount up to 33 1/3% of its total
assets, taken at market value. Each Fund may also borrow up to an additional 5%
of its total assets from banks or others. A Fund may borrow only as a temporary
measure for extraordinary or emergency purposes such as the redemption of Fund
shares. A Fund may not purchase securities while outstanding borrowings exceed
5% of its total assets except to exercise prior commitments and to exercise
subscription rights (as defined in the 1940 Act) or enter into reverse
repurchase agreements, in amounts up to 33 1/3 % of its total assets (including
the amount borrowed). Each Fund may obtain such short-term credit as may be
necessary for the clearance of purchases and sales of portfolio securities. Each
Fund may purchase securities on margin and engage in short sales to the extent
permitted by applicable law
5. UNDERWRITING
Each Fund may not underwrite securities of other issuers, except
insofar as a Fund may be deemed to be an underwriter in connection with the
disposition of its portfolio securities.
6. REAL ESTATE
Each Fund may not purchase or sell real estate, except that, to the
extent permitted by applicable law, a Fund may invest in (a) securities that are
directly or indirectly secured by real estate, or (b) securities issued by
issuers that invest in real estate.
7. COMMODITIES
Each Fund may not purchase or sell commodities or contracts on
commodities, except to the extent that a Fund may engage in financial futures
contracts and related options and currency contracts and related options and may
otherwise do so in accordance with applicable law and without registering as a
commodity pool operator under the Commodity Exchange Act.
8. LENDING
Each Fund may not make loans to other persons, except that a Fund may
lend its portfolio securities in accordance with applicable law. The acquisition
of investment securities or other investment instruments shall not be deemed to
be the making of a loan.
1- 4
<PAGE>
FURTHER EXPLANATION OF LENDING POLICY:
To generate income and offset expenses, a Fund may lend portfolio
securities to broker-dealers and other financial institutions in an amount up to
33 1/3% of its total assets, taken at market value. While securities are on
loan, the borrower will pay the Fund any income accruing on the security. The
Fund may invest any collateral it receives in additional portfolio securities,
such as U.S. Treasury notes, certificates of deposit, other high-grade,
short-term obligations or interest bearing cash equivalents. Gains or losses in
the market value of a security lent will affect the Fund and its shareholders.
When a Fund lends its securities, it will require the borrower to give
the Fund collateral in cash or government securities. The Fund will require
collateral in an amount equal to at least 100% of the current market value of
the securities lent, including accrued interest. The Fund has the right to call
a loan and obtain the securities lent any time on notice of not more than five
business days. The Fund may pay reasonable fees in connection with such loans.
OTHER SECURITIES AND PRACTICES
For information regarding certain securities the Funds may purchase and
certain investment practices the Funds may use, see "Additional Information and
Investment Practices" in Part 2 of this SAI.
PRINCIPAL HOLDERS OF FUND SHARES
As of August 31, 1998, the officers and Trustees of the Trust owned as
a group less than 1% of the outstanding shares of any class of each Fund.
Set forth below is information with respect to each person who, to each
Fund's knowledge, owned beneficially or of record more than 5% of the
outstanding shares of any class of each Fund as of August 31, 1998.
BLUE CHIP CLASS A
None
BLUE CHIP CLASS B
MLPF&S For the Sole Benefit of Its 7.688%
Customers
Attn: Fund Administration
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
BLUE CHIP CLASS C
FIRST UNION BROKERAGE SERVICES 29.714%
FIRST AFRICAN BAPTIST CHURCH
CLIFTON AND LAURELS AVS
SHARON HILL, PA 19079
1- 5
<PAGE>
Steve M Wilson Trustee 6.787%
Bone & Joint Clinic PSP
FBO Employees
Attn: Security Services
P.O. Box 61837
New Orleans, LA 70161-1837
MLPF&S For the Sole Benefit of Its 6.578%
Customers
Attn: Fund Administration
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
GROWTH/INCOME CLASS A
NONE
GROWTH/INCOME CLASS B
NONE
GROWTH/INCOME CLASS C
MLPF&S FOR THE SOLE BENEFIT OF ITS 25.191%
CUSTOMERS
ATTN: FUND ADMINISTRATION
4800 DEER LAKE DRIVE E. 2ND FLOOR
JACKSONVILLE, FL 32246-6484
GROWTH/INCOME CLASS Y
FIRST UNION NATIONAL BANK/EB/INT 47.893%
REINVEST ACCOUNT
ATTN: TRUST OPERATIONS FUND GROUP
401 S. TRYON ST. 3RD FL. CMG 1151
CHARLOTTE, NC 28202-1911
FIRST UNION NATIONAL BK/EB/INT 26.664%
CASH ACCOUNT
ATTN: TRUST OPERATIONS FUND GROUP
401 S. TRYON ST., 3RD FLOOR
CMG 1151
CHARLOTTE, NC 28202-1911
INCOME/GROWTH CLASS A
NONE
INCOME/GROWTH CLASS B
NONE
INCOME/GROWTH CLASS C
1- 6
<PAGE>
MLPF&S FOR THE SOLE BENEFIT OF ITS 17.308%
CUSTOMERS
ATTN: FUND ADMINISTRATION
4800 DEER LAKE DRIVE E. 2ND FLOOR
JACKSONVILLE, FL 32246-6484
FUBS & CO. FEBO 5.630%
LAST STOP INC.
8661 COLESVILLE ROAD
SILVER SPRING, MD 20910-3933
INCOME/GROWTH CLASS Y
NONE
SMALL CAP CLASS A
MLPF&S FOR THE SOLE BENEFIT OF ITS 5.691%
CUSTOMERS
ATTN: FUND ADMINISTRATION
4800 DEER LAKE DRIVE E. 2ND FLOOR
JACKSONVILLE, FL 32246-6484
SMALL CAP CLASS B
MLPF&S FOR THE SOLE BENEFIT OF ITS 9.978%
CUSTOMERS
ATTN: FUND ADMINISTRATION
4800 DEER LAKE DRIVE E. 2ND FLOOR
JACKSONVILLE, FL 32246-6484
SMALL CAP CLASS C
MLPF&S FOR THE SOLE BENEFIT OF ITS 27.568%
CUSTOMERS
ATTN: FUND ADMINISTRATION
4800 DEER LAKE DRIVE E. 2ND FLOOR
JACKSONVILLE, FL 32246-6484
SMALL CAP CLASS Y
FIRST UNION NATIONAL BK/EB/INT 56.737%
CASH ACCOUNT
ATTN: TRUST OPERATIONS FUND GROUP
401 S. TRYON ST. 3RD FL. CMG 1151
CHARLOTTE, NC 28202-1911
FIRST UNION NATIONAL BANK/EB/INT 24.825%
REINVEST ACCOUNT
ATTN: TRUST OPERATIONS FUND GROUP
401 S. TRYON ST. 3RD FL. CMG 1151
CHARLOTTE, NC 28202-1911
1- 7
<PAGE>
CITIBANK NA 6.453%
DELTA AIRLINES MASTER TRUST
JOE VILLELLA CITICORP SERVICES
MTCA B3-06, WORLD WIDE SEC. SERV.
CITIBANK CENTER TAMPA
TAMPA, FL 33610
TOTAL RETURN CLASS A
MLPF&S FOR THE SOLE BENEFIT OF ITS 5.664%
CUSTOMERS
ATTN: FUND ADMINISTRATION
4800 DEER LAKE DRIVE E. 2ND FLOOR
JACKSONVILLE, FL 32246-6484
TOTAL RETURN CLASS B
MLPF&S FOR THE SOLE BENEFIT OF ITS 10.492%
CUSTOMERS
ATTN: FUND ADMINISTRATION
4800 DEER LAKE DRIVE E. 2ND FLOOR
JACKSONVILLE, FL 32246-6484
TOTAL RETURN CLASS C
LAVEDNA ELLINGSON 15.648%
DOUGLAS ELLINGSON TRUSTEES
LAVEDNA ELLINGSON MARITAL TRUST
U/A DTD 5-1-86
8510 MCCLINTOCK
TEMPE, AZ 85284-2527
MLPF&S FOR THE SOLE BENEFIT OF ITS 11.422%
CUSTOMERS
ATTN: FUND ADMINISTRATION
4800 DEER LAKE DRIVE E. 2ND FLOOR
JACKSONVILLE, FL 32246-6484
TOTAL RETURN CLASS Y
STATE STREET BK AND TRUST CO. TRUST 26.777%
IRA FBO
KATHERINE ANN MEWHINNEY
2323 FAIRWAY DRIVE
WINSTON SALEM, NC 27103-3653
STATE STREET BANK AND TRUST CO CUSTOMER 16.711%
IRA FBO
KATHY E. CORELLA
3481 KATHRYN STREET
VICKSBURG, MI 49097-1058
1- 8
<PAGE>
STATE STREET BK AND TRUST CO. CUST. 15.806%
IRA FBO
GLENN WESSEL
15000 SE 13TH COURT
SUNRISE, FL 33326-1923
STATE STREET BANK AND TRST CO CUST 8.094%
IRA FBO
MIRIAM ERSHKOWITZ
1500 LOCUST ST. APT 2911
PHILADELPHIA, PA 1910-4322
SSB C/F IRA REGULAR 6.057%
THOMAS P. CONWAY
129 PILGIM PL.
VALLEY STREAM, NY 11580-5338
STATE STREET BK AND TRUST CO. CUST. 5.563%
IRA FBO
FRANK TRANES
51 BROOKWOOD DRIVE
WESTPORT, MA 02790-4304
STATE STREET BANK AND TRUST CO. 5.501%
IRA FBO
RICHARD L. HOPP
53230 SULA DRIVE
SHELBY TOWNSHIP, MI 48315
UTILITY CLASS A
NONE
UTILITY CLASS B
NONE
UTILITY CLASS C
MLPF&S FOR THE SOLE BENEFIT OF ITS 10.778%
CUSTOMERS
ATTN: FUND ADMINISTRATION
4800 DEER LAKE DRIVE E. 2ND FLOOR
JACKSONVILLE, FL 32246-6484
FUBS & CO FEBO 7.945%
EVELYN L. SMITH
CREG SMITH
3294 MYRTLE STREET
HAPEVILLE, GA 30354-1418
1- 9
<PAGE>
FUBS & CO FEBO 6.842%
THOMAS MCKINNEY AND
LOTTIE MCKINNEY
170 SCOTT BLVD.
TYRONE, GA 30290-9767
FIRST UNION BROKERAGE SERVICES 6.525%
MAX RAY AND JERALYNE RAY
ROUTE 2 BOX 498
GREENMOUNTAIN, NC 28740-9209
UTILITY CLASS Y
FIRST UNION NATIONAL BANK 70.058%
TRUST ACCOUNTS
ATTN: GINNY BATTEN
11TH FLOOR CMG-1151
301 S. TRYON STREET
CHARLOTTE, NC 28202-1910
FIRST UNION NATIONAL BANK 16.538%
TRUST ACCOUNTS
ATTN: GINNY BATTEN
11TH FLOOR CMG-1151
301 S.TRYON STREET
CHARLOTTE, NC 28202-1910
KHALID IQBAL C/F 5.798%
FATIMA KHALID IQBAL
UNIF GIFT MIN ACT KY
401 BOGLE STREET
SOMERSET, KY 42503-2870
VALUE CLASS A
NONE
VALUE CLASS B
NONE
VALUE CLASS C
DONALDSON LUFKIN JENRETTE 12.256%
SECURITIES CORPORATION INC.
P.O. BOX 2052
JERSEY CITY, NJ 07303-9998
VALUE CLASS Y
1- 10
<PAGE>
FIRST UNION NATIONAL BANK 65.570%
TRUST ACCOUNTS
ATTN: GINNY BATTEN
CMG-1151 11TH FLOOR
301 S. TRYON STREET
CHARLOTTE, NC 28202-1910
FIRST UNION NATIONAL BANK 27.959%
TRUST ACCOUNTS
ATTN: GINNY BATTEN
11TH FLOOR CMG-1151
301 S. TRYON STREET
CHARLOTTE, NC 28202-1910
EXPENSES
Advisory Fees
Evergreen Asset Management Corp.("EAMC") is the advisor to
Growth/Income, Income/Growth and Small Cap. Lieber & Company acts as sub-advisor
to these Funds, and is reimbursed by EAMC for the costs of providing
sub-advisory services. EAMC is entitled to receive from each of these Funds an
annual fee based on the Fund's average daily net assets, as follows:
AVERAGE DAILY NET ASSETS FEE
first $750 million 1.00%
next $250 million 0.90%
over $1 billion 0.80%
The Capital Management Group of First Union National Bank ("CMG") is
the advisor to Utility and Value. CMG is entitled to receive from each of these
Funds an annual fee equal to 0.50% of the average daily net assets of the Fund.
Evergreen Investment Management Company ("EIMC") is the advisor to Blue
Chip. EIMC is entitled to receive from Blue Chip an annual fee based on the
Fund's average daily net assets, as follows:
AVERAGE DAILY NET ASSETS FEE
first $100 million 0.70%
next $100 million 0.65%
next $100 million 0.60%
next $100 million 0.55%
next $100 million 0.50%
next $500 million 0.45%
1- 11
<PAGE>
AVERAGE DAILY NET ASSETS FEE
next $500 million 0.40%
over $1.5 billion 0.35%
EIMC is also the advisor to Total Return. EIMC is entitled to receive
from Total Return an annual fee based on 1.5% of the Fund's gross dividend and
interest income plus a percentage of the Fund's average daily net assets, as
follows:
AVERAGE DAILY NET ASSETS FEE
first $100 million 0.60%
next $100 million 0.55%
next $100 million 0.50%
next $100 million 0.45%
next $100 million 0.40%
next $500 million 0.35%
over $1 billion 0.30%
Below are the advisory fees paid by each fund for the last three fiscal
periods. For more information, see "Plans and Agreements-Advisory Agreements" in
Part 2 of this SAI.
FISCAL PERIOD/FUND ADVISORY FEE WAIVER
PERIODS ENDED 1998
Blue Chip (1) $2, 052,676 -0-
Growth/Income (2) $16,275,918 -0-
Income/Growth (2) $9,685,921 -0-
Small Cap (2) $2,055,006 -0-
Total Return (2) $1,062,354 -0-
Utility (2) $704,533 $204,617
Value (2) $7,023,408 -0-
PERIODS ENDED 1997
Blue Chip (3) $1,794,364 -0-
Growth/Income (4) $5,736,248 -0-
Income/Growth (5) $4,371,784 -0-
Income/Growth (6) $8,823,541 -0-
Small Cap (4) $180,153 $35,183
1- 12
<PAGE>
FISCAL PERIOD/FUND ADVISORY FEE WAIVER
Total Return (7) $546,092 -0-
Utility (4) $382,537 $146,640
Value (4) $4,753,235 -0-
PERIODS ENDED 1996
Blue Chip (8) $1,492,757 -0-
Growth/Income (9) $5,287,338 -0-
Income/Growth (10) $9,343,195 -0-
Small Cap (9) $63,333 $63,333
Total Return (11) $448,266 -0-
Utility (9) $725,733 $396,483
Value (9) $6,950,730 -0-
(1) Eleven months ended 7/31/98
(2) Year ended 7/31/98
(3) Year ended 8/31/97
(4) Seven months ended 7/31/97
(5) Six months ended 7/31/97
(6) Year ended 1/31/97
(7) Eight months ended 7/31/97
(8) Year ended 8/31/96
(9) Year ended 12/31/96
(10) Year ended 1/31/96
(11) Year ended 11/30/96
Brokerage Commissions
Below are the brokerage commissions paid by each fund and brokerage
commissions paid by the applicable Funds to Lieber & Company for the last three
fiscal periods. For information regarding brokerage commissions, see "Brokerage"
in Part 2 of this SAI.
Fiscal Period/Fund Total Paid to All Total Paid to
Brokers Lieber
PERIODS ENDED 1998
Blue Chip (1) $722,562 -0-
Growth/Income (2) $1,527,103 $1,460,628
Income/Growth (2) $2,839,407 $1,762,628
1- 13
<PAGE>
Fiscal Period/Fund Total Paid to All Total Paid to
Brokers Lieber
Small Cap (2) $382,504 $305,340
Total Return (2) $247,967 -0-
Utility (2) $255,495 -0-
Value (2) $2,277,475 -0-
PERIODS ENDED 1997
Blue Chip (3) $656,022 -0-
Growth/Income (4) $412,968 $348,590
Income/Growth (5) $1,575,483 $1,066,378
Income/Growth (6) $3,529,313 $2,835,293
Small Cap (4) $74,018 $61,390
Total Return (7) $153,935 -0-
Utility (4) $220,091 -0-
Value (4) $273,045 -0-
PERIODS ENDED 1996
Blue Chip (8) $684,496 -0-
Growth/Income (9) $519,064 -0-
Income/Growth (10) $3,255,068 -0-
Small Cap (9) $227,013 -0-
Total Return (11) $323,978 -0-
Utility (9) $3,164,292 -0-
Value (9) $3,164,292 -0-
(1) Eleven months ended 7/31/98
(2) Year ended 7/31/98
(3) Year ended 8/31/97
(4) Seven months ended 7/31/97
(5) Six months ended 7/31/97
(6) Year ended 1/31/97
(7) Eight months ended 7/31/97
(8) Year ended 8/31/96
(9) Year ended 12/31/96
(10) Year ended 1/31/96
(11) Year ended 11/30/96
1- 14
<PAGE>
Percentage of Brokerage Commissions Paid to Lieber & Company
The table below shows, for the fiscal year ended July 31, 1998, (1) the
percentage of aggregate brokerage commissions paid by each applicable fund to
Lieber & Company and (2) the percentage of each applicable fund's aggregate
dollar amount of commissionable transactions effected through Lieber & Company.
PERCENTAGE OF
PERCENTAGE OF COMMISSIONABLE
COMMISSIONS TO TRANSACTIONS THROUGH
FUND LIEBER & COMPANY LIEBER & COMPANY
Growth/Income 95.66% 91.92%
Income/Growth 62.07% 43.68%
Small Cap 79.83% 68.15%
Underwriting Commissions
Below are the underwriting commissions paid by each Fund and the
amounts retained by the principal underwriter for the last three fiscal periods.
For more information regarding underwriting, see "Principal Underwriter" in Part
2 of this SAI.
TOTAL UNDERWRITING UNDERWRITING
FUND COMMISSIONS COMMISSIONS RETAINED
PERIODS ENDED 1998
Blue Chip (1) $1,989,997 $23,620
Growth/Income (2) $20,963,554 $603,197
Income/Growth (2) $649,901 $26,252
Small Cap (2) $6,344,098 $182,887
Total Return (2) $849,763 $30,676
Utility (2) $327,363 $13,944
Value (2) $2,716,315 $109,283
PERIODS ENDED 1997
Blue Chip (3) $1,017,961 $363,862
Growth/Income (4) $1,796,199 $169,177
Income/Growth (5) $41,996 $4,196
Income/Growth (6) $187,403 $20,208
1- 15
<PAGE>
TOTAL UNDERWRITING UNDERWRITING
FUND COMMISSIONS COMMISSIONS RETAINED
Small Cap (4) $72,045 $8,281
Total Return (7) $128,762 $7,709
Utility (4) $15,633 $1,789
Value (4) $479,927 $51,343
PERIODS ENDED 1996
Blue Chip (8) $1,415,505 $334,606
Growth/Income (9) $1,473,258 $158,858
Income/Growth (10) $98,890 $10,733
Small Cap (9) $3,568 $340
Total Return (11) $355,043 ($595,877)
Utility (9) $74,988 $7,857
Value (9) $522,573 $56,609
(1) Eleven months ended 7/31/98
(2) Year ended 7/31/98
(3) Year ended 8/31/97
(4) Seven months ended 7/31/97
(5) Six months ended 7/31/97
(6) Year ended 1/31/97
(7) Eight months ended 7/31/97
(8) Year ended 8/31/96
(9) Year ended 12/31/96
(10) Year ended 1/31/96
(11) Year ended 11/30/96
12b-1 Fees
Below are the 12b-1 fees paid by each fund for the fiscal year ended
July 31, 1998. For more information regarding distribution fees and service
fees, see "Plans and Agreements-Distribution Plans" in Part 2 of this SAI.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
---------------------------------- ----------------------------------- ------------------------------------
DISTRIBUTION SERVICE DISTRIBUTION SERVICE DISTRIBUTION SERVICE
FUND FEES FEES FEES FEES FEES FEES
=================== ================ ================= ================= ================= ================= =================
<S> <C> <C> <C> <C> <C> <C>
Blue Chip* -0- $367,809 $902,415 $357,527 $795 $265
Growth/Income -0- $597,754 $5,917,672 $1,972,557 $283,053 $94,351
Income/Growth -0- $34,738 $390,031 $130,010 $8,479 $2,826
1-16
<PAGE>
Small Cap -0- $80,327 $85,658 $28,553 $114,856 $38,286
Total Return -0- $124,244 $758,911 $253,028 $161,094 $53,698
Utility -0- $243,362 $310,023 $103,341 $3,149 $1,050
Value -0- $1,088,998 $2,316,294 $772,098 $25,812 $8,604
</TABLE>
*Eleven months ended 7/31/98
Trustee Compensation
Listed below is the Trustee compensation for the twelve months ended
July 31, 1998. The Trustees do not receive pension or retirement benefits from
the Funds. For more information regarding the Trustees, see "Management of the
Trust" in Part 2 of this SAI.
AGGREGATE TOTAL COMPENSATION
TRUSTEE COMPENSATION FROM FROM TRUST AND FUND
TRUST COMPLEX PAID TO
TRUSTEES*
Laurence B. Ashkin $28,558 $71,260
Charles A. Austin, III $23,408 $58,883
K. Dun Gifford $22,100 $56,104
James S. Howell $37,630 $98,463
Leroy Keith Jr. $22,862 $57,584
Gerald M. McDonnell $30,905 $76,283
Thomas L. McVerry $32,869 $82,742
William Walt Pettit $28,025 $68,625
David M. Richardson $22,954 $57,551
Russell A. Salton, III $30,960 $77,675
Michael S. Scofield $33,464 $86,639
Richard J. Shima $26,977 $68,684
*Certain trustees have elected to defer all or part of their
total compensation for the twelve months ended July 31, 1998.
The amounts listed below will be payable in later years to the
respective Trustees:
Austin $6,387
McVerry $82,742
Howell $72,753
Salton $77,675
Petit $68,625
McDonnell $76,283
Scofield $18,953
1- 17
<PAGE>
PERFORMANCE
Total Return
Below are the annual total returns for each class of shares of the
Funds (including applicable sales charges) as of July 31, 1998. For information
on how total return is calculated, see "Performance Calculations-Total Return"
in Part 2 of this SAI.
FUND/CLASS ONE YEAR FIVE YEARS TEN YEARS OR INCEPTION DATE
SINCE INCEPTION
BLUE CHIP
Class A N/A N/A 11.29% 1/20/98
Class B 14.99% 17.50% 14.35% 9/11/35
Class C N/A N/A 9.80% 1/22/98
GROWTH/INCOME
Class A 11.26% N/A 24.94% 1/3/95
Class B 10.44% N/A 24.05% 1/3/95
Class C 10.47% N/A 24.08% 1/3/95
Class Y 11.56% 19.25% 16.75% 10/15/86
INCOME/GROWTH
Class A 7.93% N/A 16.42% 1/3/95
Class B 7.13% N/A 15.57% 1/3/95
Class C 7.13% N/A 15.56% 1/3/95
Class Y 8.16% 10.90% 10.78% 8/31/78
SMALL CAP
Class A 3.24% N/A 20.94% 1/3/95
Class B 2.49% N/A 20.04% 1/3/95
Class C 2.49% N/A 20.01% 1/3/95
Class Y 3.57% N/A 15.62% 10/1/93
TOTAL RETURN
Class A 13.85% 17.59% 15.21% 4/14/87
Class B 13.01% 16.67% 15.93% 2/1/93
Class C 12.99% 16.65% 15.95% 2/1/93
1- 18
<PAGE>
FUND/CLASS ONE YEAR FIVE YEARS TEN YEARS OR INCEPTION DATE
SINCE INCEPTION
Class Y 14.29% N/A 20.80% 1/13/97
UTILITY
Class A 17.30% N/A 11.91% 1/4/94
Class B 16.31% N/A 11.09% 1/4/94
Class C 16.31% N/A 14.25% 9/2/94
Class Y 17.60% N/A 13.70% 2/28/94
VALUE
Class A 9.55% 17.32% 15.27% 4/12/85
Class B 8.69% 16.52% 15.51% 2/2/93
Class C 8.74% N/A 18.64% 9/2/94
Class Y 9.79% 17.62% 16.85% 1/3/91
SERVICE PROVIDERS
Administrator
Evergreen Investment Services, Inc. ("EIS") serves as administrator to
Utility and Value, subject to the supervision and control of the Trust's Board
of Trustees. EIS provides the Funds with facilities, equipment and personnel and
is entitled to receive a fee from the Fund based on the total assets of all
mutual funds advised by First Union Corporation subsidiaries. The fee paid to
EIS is calculated in accordance with the following schedule:
ASSETS FEE
first $7 billion 0.050%
next $3 billion 0.035%
next $5 billion 0.030%
next $10 billion 0.020%
next $5 billion 0.015%
over $30 billion 0.010%
Transfer Agent
Evergreen Service Company ("ESC"), a subsidiary of First Union
Corporation, is the Funds' transfer agent. The transfer agent issues and redeems
shares, pays dividends and performs other duties in connection with the
maintenance of shareholder accounts. The
1- 19
<PAGE>
transfer agent's address is P.O. Box 2121, Boston, Massachusetts 02106-2121.
Distributor
Evergreen Distributor, Inc. (the "Distributor") markets the Funds
through broker-dealers and other financial representatives. Its address is 125
W. 55th Street, New York, NY 10019.
Independent Auditors
KPMG Peat Marwick LLP, 99 High Street, Boston, Massachusetts 02110,
audits the financial statements of each Fund except Income/Growth.
PricewaterhouseCoopers, 1177 Avenue of the Americas, New York, New York
10036 audits the financial statements of Income/Growth.
Custodian
State Street Bank and Trust Company is the Funds' custodian. The bank
keeps custody of each Fund's securities and cash and performs other related
duties. The custodian's address is 225 Franklin Street, Boston, Massachusetts
02110.
Legal Counsel
Sullivan & Worcester LLP provides legal advice to the Funds. Its
address is 1025 Connecticut Avenue, N.W., Washington, D.C. 20036.
FINANCIAL STATEMENTS
The audited financial statements and the reports thereon are hereby
incorporated by reference to the Funds' Annual Report, a copy of which may be
obtained without charge from ESC, P.O. Box 2121, Boston, Massachusetts
02106-2121.
1- 20
<PAGE>
EVERGREEN FUNDS
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
PART 2
ADDITIONAL INFORMATION ON SECURITIES
AND INVESTMENT PRACTICES
The prospectus describes the Fund's investment objective and the
securities in which it primarily invests. The following describes other
securities the Fund may purchase and investment strategies it may use.
U.S. Government Securities
The Fund may invest in securities issued or guaranteed by U.S.
Government agencies or instrumentalities.
These securities are backed by (1) the discretionary authority of the
U.S. Government to purchase certain obligations of agencies or instrumentalities
or (2) the credit of the agency or instrumentality issuing the obligations.
Some government agencies and instrumentalities may not receive
financial support from the U.S. Government. Examples of such agencies are:
(i) Farm Credit System, including the National Bank for
Cooperatives, Farm Credit Banks and Banks for Cooperatives;
(ii) Farmers Home Administration;
(iii) Federal Home Loan Banks;
(iv) Federal Home Loan Mortgage Corporation;
(v) Federal National Mortgage Association; and
(vi) Student Loan Marketing Association.
Securities Issued by the Government National Mortgage Association ("GNMA")
The Fund may invest in securities issued by the GNMA, a corporation
wholly-owned by the U.S. Government. GNMA securities or "certificates" represent
ownership in a pool of underlying mortgages. The timely payment of principal and
interest due on these securities is guaranteed.
Unlike conventional bonds, the principal on GNMA certificates is not
paid at maturity but over the life of the security in scheduled monthly
payments. While mortgages pooled in a GNMA certificate may have maturities of up
to 30 years, the certificate itself will have a shorter average maturity and
less principal volatility than a comparable 30-year bond.
The market value and interest yield of GNMA certificates can vary due
not only to market fluctuations, but also to early prepayments of mortgages
within the pool. Since prepayment rates vary widely, it is impossible to
accurately predict the average maturity of a GNMA pool. In addition to the
guaranteed principal payments, GNMA certificates may also make
2- 1
<PAGE>
unscheduled principal payments resulting from prepayments on the underlying
mortgages.
Although GNMA certificates may offer yields higher than those available
from other types of U.S. Government securities, they may be less effective as a
means of locking in attractive long-term rates because of the prepayment
feature. For instance, when interest rates decline, prepayments are likely to
increase as the holders of the underlying mortgages seek refinancing. As a
result, the value of a GNMA certificate is not likely to rise as much as the
value of a comparable debt security would in response to same decline. In
addition, these prepayments can cause the price of a GNMA certificate originally
purchased at a premium to decline in price compared to its par value, which may
result in a loss.
When-Issued, Delayed-Delivery and Forward Commitment Transactions
The Fund may purchase securities on a when-issued or delayed delivery
basis and may purchase or sell securities on a forward commitment basis.
Settlement of such transactions normally occurs within a month or more after the
purchase or sale commitment is made.
The Fund may purchase securities under such conditions only with the
intention of actually acquiring them, but may enter into a separate agreement to
sell the securities before the settlement date. Since the value of securities
purchased may fluctuate prior to settlement, the Fund may be required to pay
more at settlement than the security is worth. In addition, the purchaser is not
entitled to any of the interest earned prior to settlement.
Upon making a commitment to purchase a security on a when-issued,
delayed delivery or forward commitment basis the Fund will hold liquid assets
worth at least the equivalent of the amount due. The liquid assets will be
monitored on a daily basis and adjusted as necessary to maintain the necessary
value.
Purchases made under such conditions may involve the risk that yields
secured at the time of commitment may be lower than otherwise available by the
time settlement takes place, causing an unrealized loss to the Fund. In
addition, when the Fund engages in such purchases, it relies on the other party
to consummate the sale. If the other party fails to perform its obligations, the
Fund may miss the opportunity to obtain a security at a favorable price or
yield.
Repurchase Agreements
The Fund may enter into repurchase agreements with entities that are
registered as U.S. Government securities dealers, including member banks of the
Federal Reserve System having at least $1 billion in assets, primary dealers in
U.S. Government securities or other financial institutions believed by the
Adviser (as defined later) to be creditworthy. In a repurchase agreement the
Fund obtains a security and simultaneously commits to return the security to the
seller at a set price (including principal and interest) within period of time
usually not exceeding seven days. The resale price reflects the purchase price
plus an agreed upon market rate of interest which is unrelated to the coupon
rate or maturity of the underlying security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is in
effect secured by the value of the underlying security.
The Fund's custodian or a third party will take possession of the
securities subject to repurchase agreements, and these securities will be marked
to market daily. To the extent that the original seller does not repurchase the
securities from the Fund, the Fund could receive less than the repurchase price
on any sale of such securities. In the event that such a defaulting seller filed
for bankruptcy or became insolvent, disposition of such securities by the Fund
might be delayed pending court action. The Fund's advisor believes that under
the regular procedures normally in effect for custody of the Fund's portfolio
securities subject to repurchase agreements,
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a court of competent jurisdiction would rule in favor of the Fund and allow
retention or disposition of such securities. The Fund will only enter into
repurchase agreements with banks and other recognized financial institutions,
such as broker-dealers, which are deemed by the investment advisor to be
creditworthy pursuant to guidelines established by the Board of Trustees.
Reverse Repurchase Agreements
As described herein, the Fund may also enter into reverse repurchase
agreements. These transactions are similar to borrowing cash. In a reverse
repurchase agreement, the Fund transfers possession of a portfolio instrument to
another person, such as a financial institution, broker, or dealer, in return
for a percentage of the instrument's market value in cash, and agrees that on a
stipulated date in the future the Fund will repurchase the portfolio instrument
by remitting the original consideration plus interest at an agreed upon rate.
The use of reverse repurchase agreements may enable the Fund to avoid
selling portfolio instruments at a time when a sale may be deemed to be
disadvantageous, but the ability to enter into reverse repurchase agreements
does not ensure that the Fund will be able to avoid selling portfolio
instruments at a disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of the
Fund, in a dollar amount sufficient to make payment for the obligations to be
purchased, are segregated at the trade date. These securities are marked to
market daily and maintained until the transaction is settled.
Options
The Fund may buy or sell (i.e., write) put and call options on
securities it holds or intends to acquire. The Fund may also buy and sell
options on financial futures contracts. The Fund will use options as a hedge
against decreases or increases in the value of securities it holds or intends to
acquire. The Fund may purchase put and call options for the purpose of
offsetting previously written put and call options of the same series.
The Fund may write only covered options. With regard to a call option,
this means that the Fund will own, for the life of the option, the securities
subject to the call option. The Fund will cover put options by holding, in a
segregated account, liquid assets having a value equal to or greater than the
price of securities subject to the put option. If the Fund is unable to effect a
closing purchase transaction with respect to the covered options it has sold, it
will not be able to sell the underlying securities or dispose of assets held in
a segregated account until the options expire or are exercised.
Futures Transactions
The Fund may enter into financial futures contracts and write options
on such contracts. The Fund intends to enter into such contracts and related
options for hedging purposes. The Fund will enter into futures on securities or
index-based futures contracts in order to hedge against changes in interest or
exchange rates or securities prices. A futures contract on securities is an
agreement to buy or sell securities at a specified price during a designated
month. A futures contract on a securities index does not involve the actual
delivery of securities, but merely requires the payment of a cash settlement
based on changes in the securities index. The Fund does not make payment or
deliver securities upon entering into a futures contract. Instead, it puts down
a margin deposit, which is adjusted to reflect changes in the value of the
contract and which continues until the contract is terminated.
The Fund may sell or purchase futures contracts. When a futures
contract is sold by the
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Fund, the value of the contract will tend to rise when the value of the
underlying securities declines and to fall when the value of such securities
increases. Thus, the Fund sells futures contracts in order to offset a possible
decline in the value of its securities. If a futures contract is purchased by
the Fund, the value of the contract will tend to rise when the value of the
underlying securities increases and to fall when the value of such securities
declines. The Fund intends to purchase futures contracts in order to establish
what is believed by the advisor to be a favorable price or rate of return for
securities the Fund intends to purchase.
The Fund also intends to purchase put and call options on futures
contracts for hedging purposes. A put option purchased by the Fund would give it
the right to assume a position as the seller of a futures contract. A call
option purchased by the Fund would give it the right to assume a position as the
purchaser of a futures contract. The purchase of an option on a futures contract
requires the Fund to pay a premium. In exchange for the premium, the Fund
becomes entitled to exercise the benefits, if any, provided by the futures
contract, but is not required to take any action under the contract. If the
option cannot be exercised profitably before it expires, the Fund's loss will be
limited to the amount of the premium and any transaction costs.
The Fund may enter into closing purchase and sale transactions in order
to terminate a futures contract and may sell put and call options for the
purpose of closing out its options positions. The Fund's ability to enter into
closing transactions depends on the development and maintenance of a liquid
secondary market. There is no assurance that a liquid secondary market will
exist for any particular contract or at any particular time. As a result, there
can be no assurance that the Fund will be able to enter into an offsetting
transaction with respect to a particular contract at a particular time. If the
Fund is not able to enter into an offsetting transaction, the Fund will continue
to be required to maintain the margin deposits on the contract and to complete
the contract according to its terms, in which case it would continue to bear
market risk on the transaction.
Although futures and options transactions are intended to enable the
Fund to manage market, interest rate or exchange rate risk, unanticipated
changes in interest rates or market prices could result in poorer performance
than if it had not entered into these transactions. Even if the advisor
correctly predicts interest rate movements, a hedge could be unsuccessful if
changes in the value of the Fund's futures position did not correspond to
changes in the value of its investments. This lack of correlation between the
Fund's futures and securities positions may be caused by differences between the
futures and securities markets or by differences between the securities
underlying the Fund's futures position and the securities held by or to be
purchased for the Fund. The Fund's advisor will attempt to minimize these risks
through careful selection and monitoring of the Fund's futures and options
positions.
The Fund does not intend to use futures transactions for speculation or
leverage. The Fund has the ability to write options on futures, but currently
intends to write such options only to close out options purchased by the Fund.
The Fund will not change these policies without supplementing the information in
the prospectus and SAI.
The Fund will not maintain open positions in futures contracts it has
sold or call options it has written on futures contracts if, in the aggregate,
the value of the open positions (marked to market) exceeds the current market
value of its securities portfolio plus or minus the unrealized gain or loss on
those open positions, adjusted for the correlation of volatility between the
hedged securities and the futures contracts. If this limitation is exceeded at
any time, the Fund will take prompt action to close out a sufficient number of
open contracts to bring its open futures and options positions within this
limitation.
Foreign Securities
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The Fund may invest in foreign securities or U.S. securities traded in
foreign markets. Permissible investments may consist of obligations of foreign
branches of U.S. banks and of foreign banks, including European certificates of
deposit, European time deposits, Canadian time deposits and Yankee certificates
of deposit, and investments in Canadian commercial paper, foreign securities and
Europaper. These instruments may subject the Fund to investment risks that
differ in some respects from those related to investments in obligations of U.S.
issuers. Such risks include future adverse political and economic developments;
the possible imposition of withholding taxes on interest or other income; the
possible seizure, nationalization, or expropriation of foreign deposits; the
possible establishment of exchange controls or taxation at the source; greater
fluctuations in value due to changes in exchange rates, or the adoption of other
foreign governmental restrictions which might adversely affect the payment of
principal and interest on such obligations. Such investments may also entail
higher custodial fees and sales commissions than domestic investments. Foreign
issuers of securities or obligations are often subject to accounting treatment
and engage in business practices different from those respecting domestic
issuers of similar securities or obligations. Foreign branches of U.S. banks and
foreign banks may be subject to less stringent reserve requirements than those
applicable to domestic branches of U.S. banks.
Foreign Currency Transactions
As one way of managing exchange rate risk, the Fund may enter into
forward currency exchange contracts (agreements to purchase or sell currencies
at a specified price and date). The exchange rate for the transaction (the
amount of currency the Fund will deliver and receive when the contract is
completed) is fixed when the Fund enters into the contract. The Fund usually
will enter into these contracts to stabilize the U.S. dollar value of a security
it has agreed to buy or sell. The Fund intends to use these contracts to hedge
the U.S. dollar value of a security it already owns, particularly if the Fund
expects a decrease in the value of the currency in which the foreign security is
denominated. Although the Fund will attempt to benefit from using forward
contracts, the success of its hedging strategy will depend on the advisor's
ability to predict accurately the future exchange rates between foreign
currencies and the U.S. dollar. The value of the Fund's investments denominated
in foreign currencies will depend on the relative strengths of those currencies
and the U.S. dollar, and the Fund may be affected favorably or unfavorably by
changes in the exchange rates or exchange control regulations between foreign
currencies and the U.S. dollar. Changes in foreign currency exchange rates also
may affect the value of dividends and interest earned, gains and losses realized
on the sale of securities and net investment income and gains, if any, to be
distributed to shareholders by the Fund. The Fund may also purchase and sell
options related to foreign currencies in connection with hedging strategies.
"Margin" in Futures Transactions
Unlike the purchase or sale of a security, the Fund does not pay or
receive money upon the purchase or sale of a futures contract. Rather the Fund
is required to deposit an amount of "initial margin" in cash or U.S. Treasury
bills with its custodian (or the broker, if legally permitted). The nature of
initial margin in futures transactions is different from that of margin in
securities transactions in that futures contract initial margin does not involve
the borrowing of funds by the Fund to finance the transactions. Initial margin
is in the nature of a performance bond or good faith deposit on the contract
which is returned to the Fund upon termination of the futures contract, assuming
all contractual obligations have been satisfied.
A futures contract held by the Fund is valued daily at the official
settlement price of the exchange on which it is traded. Each day the Fund pays
or receives cash, called "variation margin," equal to the daily change in value
of the futures contract. This process is known as "marking to market." Variation
margin does not represent a borrowing or loan by the Fund but is instead
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settlement between the Fund and the broker of the amount one would owe the other
if the futures contract expired. In computing its daily net asset value the Fund
will mark-to-market its open futures positions. The Fund is also required to
deposit and maintain margin when it writes call options on futures contracts.
High Yield, High Risk Bonds
The Fund may invest a portion of its assets in lower rated bonds. Bonds
rated below BBB by Standard & Poor's Ratings Services ("S&P") or Fitch IBCA,
Inc. ("Fitch") or below Baa by Moody's Investors Service, Inc. ("Moody's"),
commonly known as "junk bonds," offer high yields, but also high risk. While
investment in junk bonds provides opportunities to maximize return over time,
they are considered predominantly speculative with respect to the ability of the
issuer to meet principal and interest payments. Investors should be aware of the
following risks:
(1) The lower ratings of junk bonds reflect a greater possibility that
adverse changes in the financial condition of the issuer or in general economic
conditions, or both, or an unanticipated rise in interest rates may impair the
ability of the issuer to make payments of interest and principal, especially if
the issuer is highly leveraged. Such issuer's ability to meet its debt
obligations may also be adversely affected by the issuer's inability to meet
specific forecasts or the unavailability of additional financing. Also, an
economic downturn or an increase in interest rates may increase the potential
for default by the issuers of these securities.
(2) The value of junk bonds may be more susceptible to real or
perceived adverse economic or political events than is the case for higher
quality municipal bonds.
(3) The value of junk bonds, like those of other fixed income
securities, fluctuates in response to changes in interest rates, generally
rising when interest rates decline and falling when interest rates rise. For
example, if interest rates increase after a fixed income security is purchased,
the security, if sold prior to maturity, may return less than its cost. The
prices of junk bonds, however, are generally less sensitive to interest rate
changes than the prices of higher-rated bonds, but are more sensitive to news
about an issuer or the economy which is, or investors perceive as, negative.
(4) The secondary market for junk bonds may be less liquid at certain
times than the secondary market for higher quality bonds, which may adversely
effect (a) the bond's market price, (b) the Fund's ability to sell the bond and
the Fund's ability to obtain accurate market quotations for purposes of valuing
its assets.
For bond ratings descriptions, see "Bond Ratings" below.
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Illiquid and Restricted Securities
The Fund may not invest more than 15% of its net assets in securities
that are illiquid. A security is illiquid when the Fund cannot dispose of it in
the ordinary course of business within seven days at approximately the value at
which the Fund has the investment on its books.
The Fund may invest in "restricted" securities, i.e., securities
subject to restrictions on resale under federal securities laws. Rule 144A under
the Securities Act of 1933 ("Rule 144A") allows certain restricted securities to
trade freely among qualified institutional investors. Since Rule 144A securities
may have limited markets, the Board of Trustees will determine whether such
securities should be considered illiquid for the purpose of determining the
Fund's compliance with the limit on illiquid securities indicated above. In
determine the liquidity of Rule 144A securities, the Trustees will consider: (1)
the frequency of trades and quotes for the security; (2) the number of dealers
willing to purchase or sell the security and the number of other potential
buyers; (3) dealer undertakings to make a market in the security; and (4) the
nature of the security and the nature of the marketplace trades.
Investment in Other Investment Companies
The Fund may purchase the shares of other investment companies to the
extent permitted under the 1940 Act. Currently, the Fund may not (1) own more
than 3% of the outstanding voting stocks of another investment company, (2)
invest more than 5% of its assets in any single investment company, and (3)
invest more than 10% of its assets in investment companies. However, the Fund
may invest all of its investable assets in securities of a single open-end
management investment company with substantially the same fundamental
investment objectives, policies and limitations as the Fund.
Short Sales
The Fund may not make short sales of securities or maintain a short
position unless, at all times when a short position is open, it owns an equal
amount of such securities or of securities which, without payment of any further
consideration, are convertible into or exchangeable for securities of the same
issue as, and equal in amount to, the securities sold short. The Fund may effect
a short sale in connection with an underwriting in which the Fund is a
participant.
PURCHASE, REDEMPTION AND PRICING OF SHARES
HOW THE FUND OFFERS SHARES TO THE PUBLIC
You may buy shares of the Fund through the Distributor, broker-dealers
that have entered into special agreements with the Distributor or certain other
financial institutions.
The Fund offers three or four classes of shares that differ primarily with
respect to sales charges and distribution fees. Depending upon the class of
shares, you will pay an initial sales charge when you buy the Fund's shares, a
contingent deferred sales charge (a "CDSC") when you redeem the Fund's shares or
no sales charges at all.
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Class A Shares
With certain exceptions, when you purchase Class A shares you will pay
a maximum sales charge of 4.75%. (The prospectus contains a complete table of
applicable sales charges and a discussion of sales charge reductions or waivers
that may apply to purchases. If you purchase Class A shares in the amount of $1
million or more, without an initial sales charge, the Fund will charge a CDSC of
1.00% if you redeem during the month of your purchase and the 12-month period
following the month of your purchase (see "Contingent Deferred Sales Charge"
below).
Class B Shares
The Fund offers Class B shares at net asset value without an initial
sales charge. With certain exceptions, however, the Fund will charge a CDSC on
shares you redeem within 72 months after the month of your purchase, in
accordance with the following schedule:
REDEMPTION TIMING CDSC RATE
Month of purchase and the first twelve-month
period following the month of purchase...................................5.00%
Second twelve-month period following the month of purchase...............4.00%
Third twelve-month period following the month of purchase................3.00%
Fourth twelve-month period following the month of purchase...............3.00%
Fifth twelve-month period following the month of purchase................2.00%
Sixth twelve-month period following the month of purchase................1.00%
Thereafter...............................................................0.00%
Class B shares that have been outstanding for seven years after the
month of purchase will automatically convert to Class A shares without
imposition of a front-end sales charge or exchange fee. Conversion of Class B
shares represented by stock certificates will require the return of the stock
certificate to ESC.
Class C Shares
Class C shares are available only through broker-dealers who have
entered into special distribution agreements with the Distributor. The Fund
offers Class C shares at net asset value without an initial sales charge. With
certain exceptions, however, the Fund will charge a CDSC of 1.00% on shares you
redeem within 12-months after the month of your purchase. See "Contingent
Deferred Sales Charge" below.
Class Y Shares
No CDSC is imposed on the redemption of Class Y shares. Class Y shares
are not offered to the general public and are available only to (1) persons who
at or prior to December 31, 1994 owned shares in a mutual fund advised by (2)
certain institutional investors and (3) investment advisory clients of CMG,
EAMC, EIMC, Meridian Investment Company, First Investment Advisors, Inc., or
their affiliates. Class Y shares are offered at net asset value without a
front-end or back-end sales charge and do not bear any Rule 12b-1 distribution
expenses.
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Contingent Deferred Sales Charges
The Fund charges a CDSC as reimbursement for certain expenses, such as
commissions or shareholder servicing fees, that it has incurred in connection
with the sale of its shares (see "Distribution Plans and Agreements," above). If
imposed, the Fund deducts the CDSC from the redemption proceeds you would
otherwise receive. The CDSC is a percentage of the lesser of (1) the net asset
value of the shares at the time of redemption or (2) the shareholder's original
net cost for such shares. Upon request for redemption, to keep the CDSC a
shareholder must pay as low as possible, the Fund will first seek to redeem
shares not subject to the CDSC and/or shares held the longest, in that order.
The CDSC on any redemption is, to the extent permitted by the National
Association of Securities Dealers, Inc. ("NASD"), paid to the Distributor or its
predecessor.
SALES CHARGE WAIVERS OF REDUCTIONS
Reducing Class A Front-end Loads
With a larger purchase, there are several ways that you can combine
multiple purchases of Class A shares in Evergreen funds and take advantage of
lower sales charges.
Combined Purchases
You can reduce your sales charge by combining purchases of Class A
shares of multiple Evergreen funds. For example, if you invested $75,000 in each
of two different Evergreen funds, you would pay a sales charge based on a
$150,000 purchase (i.e., 3.75% of the offering price, rather than 4.75%).
Rights of Accumulation
You can reduce your sales charge by adding the value of Class A shares
of Evergreen funds you already own to the amount of your next Class A
investment. For example, if you hold Class A shares valued at $99,999 and
purchase an additional $5,000, the sales charge for the $5,000 purchase would be
at the next lower sales charge of 3.75%, rather than 4.75%.
Letter of Intent
You can, by completing the "Letter of Intent" section of the
application, purchase Class A shares over a 13-month period and receive the same
sales charge as if you had invested all the money at once. All purchases of
Class A shares of an Evergreen fund during the period will qualify as Letter of
Intent purchases.
Waiver of Initial Sales Charges
The Fund may sell its shares at net asset value without an initial
sales charge to:
1. purchasers of shares in the amount of $1 million or more;
2. a corporate or certain other qualified retirement plan or a
non-qualified deferred compensation plan or a Title 1
tax-sheltered annuity or TSA plan sponsored by an organization
having 100 or more eligible employees (a "Qualifying Plan") or
a TSA plan sponsored by a public educational entity having
5,000 or more eligible employees (an "Educational TSA Plan");
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3. institutional investors, which may include bank trust
departments and registered investment advisors;
4. investment advisors, consultants or financial planners who
place trades for their own accounts or the accounts of their
clients and who charge such clients a management, consulting,
advisory or other fee;
5. clients of investment advisors or financial planners who place
trades for their own accounts if the accounts are linked to a
master account of such investment advisors or financial
planners on the books of the broker-dealer through whom shares
are purchased;
6. institutional clients of broker-dealers, including retirement
and deferred compensation plans and the trusts used to fund
these plans, which place trades through an omnibus account
maintained with the Fund by the broker-dealer;
7. employees of First Union National Bank ("FUNB"), its
affiliates, the Distributor, any broker-dealer with whom
Evergreen Distributor, Inc., has entered into an agreement to
sell shares of the Fund, and members of the immediate families
of such employees;
8. certain Directors, Trustees, officers and employees of the
Evergreen funds, the Distributor or their affiliates and to
the immediate families of such persons; or
9. a bank or trust company in a single account in the name of
such bank or trust company as trustee if the initial
investment in or any Evergreen fund made pursuant to this
waiver is at least $500,000 and any commission paid at the
time of such purchase is not more than 1% of the amount
invested.
With respect to items 8 and 9 above, the Fund will only sell shares to
these parties upon the purchasers written assurance that the purchase is for
their personal investment purposes only. Such purchasers may not resell the
securities except through redemption by the Fund. The Fund will not charge any
CDSC on redemptions by such purchasers.
Waiver of CDSCS
The Fund does not impose a CDSC when the shares you are redeeming
represent:
1. an increase in the share value above the net cost of such
shares;
2. certain shares for which the Fund did not pay a commission on
issuance, including shares acquired through reinvestment of
dividend income and capital gains distributions;
3. shares that are in the accounts of a shareholder who has died
or become disabled;
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4. a lump-sum distribution from a 401(k) plan or other benefit
plan qualified under the Employee Retirement Income Security
Act of 1974 ("ERISA");
5. an automatic withdrawal from the ERISA plan of a shareholder
who is a least 59 1/2 years old;
6. shares in an account that we have closed because the account
has an aggregate net asset value of less than $1,000;
7. an automatic withdrawal under an Systematic Income Plan of up
to 1.0% per month of your initial account balance;
8. a withdrawal consisting of loan proceeds to a retirement plan
participant;
9. a financial hardship withdrawal made by a retirement plan
participant;
10. a withdrawal consisting of returns of excess contributions or
excess deferral amounts made to a retirement plan; or
11. a redemption by an individual participant in a Qualifying Plan
that purchased Class C shares (this waiver is not available in
the event a Qualifying Plan, as a whole, redeems substantially
all of its assets).
Exchanges
Investors may exchange shares of the Fund for shares of the same class
of any other Evergreen fund. See "How to Buy Shares-By Exchange" in the
prospectus. Before you make an exchange, you should read the prospectus of the
Evergreen fund into which you want to exchange. The Trust's Board of Trustees
reserves the right to discontinue, alter or limit the exchange privilege at any
time.
Shareholder Services
As described in the prospectus, a shareholder may elect to receive
their dividends and capital grains distributions in cash instead of shares.
However, ESC will automatically convert a shareholder's distribution option so
that the shareholder reinvests all dividends and distributions in additional
shares when it learns that the postal or other delivery service is unable to
deliver checks or transaction confirmations to the shareholder's address of
record. The Fund will hold the returned distribution or redemption proceeds in a
non interest-bearing account in the shareholder's name until the shareholder
updates his or her address. No interest will accrue on amounts represented by
uncashed distribution or redemption checks.
Calculation of Net Asset Value ("NAV")
The Fund computes its NAV once daily on Monday through Friday, as
described in the Prospectus. the Fund will not compute its NAV on the day the
following legal holidays are observed: New Year's Day, Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
The NAV of the Fund is calculated by dividing the value of the Fund's
net assets attributable to that class by all of the shares issued for that
class.
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Valuation of Portfolio Securities
Current values for the Fund's portfolio securities are determined as
follows:
(1) Securities that are traded on an established securities exchange or
the over-the-counter National Market System ("NMS") are valued on the
basis of the last sales price on the exchange where primarily traded or
on the NMS prior to the time of the valuation, provided that a sale has
occurred.
(2) Securities traded on an established securities exchange or in the
over-the-counter market for which there has been no sale and other
securities traded in the over-the-counter market are valued at the mean
of the bid and asked prices at the time of valuation.
(3) Short-term investments maturing in more than sixty days, for which
market quotations are readily available, are valued at current market
value.
(4) Short-term investments maturing in sixty days or less are valued at
amortized cost, which approximates market.
(5) Securities, including restricted securities, for which market
quotations are not readily available; listed securities or those on NMS
if, in the Fund's opinion, the last sales price does not reflect a
current market value; and other assets are valued at prices deemed in
good faith to be fair under procedures established by the Board of
Trustees.
PERFORMANCE CALCULATIONS
Total Return
Total return quotations for a class of shares of the Fund as they may
appear from time to time in advertisements are calculated by finding the average
annual compounded rates of return over one, five and ten year periods, or the
time periods for which such class of shares has been effective, whichever is
relevant, on a hypothetical $1,000 investment that would equate the initial
amount invested in the class to the ending redeemable value. To the initial
investment all dividends and distributions are added, and all recurring fees
charged to all shareholder accounts are deducted. The ending redeemable value
assumes a complete redemption at the end of the relevant periods. The following
is the formula used to calculate average annual total return:
n
P(1+T) =ERV
P= initial payment of $1,000
T= average total return
n= number of years
ERV=ending redeemable value of the initial $1,000
PRINCIPAL UNDERWRITER
The Distributor is the principal underwriter for the Trust and with
respect to each class of
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the Fund. The Trust has entered into a Principal Underwriting Agreement
("Underwriting Agreement") with the Distributor with respect to each class
of the Fund. The Distributor is a subsidiary of The BISYS Group, Inc.
The Distributor, as agent, has agreed to use its best efforts to find
purchasers for the shares. The Distributor may retain and employ representatives
to promote distribution of the shares and may obtain orders from broker-dealers,
and others, acting as principals, for sales of shares to them. The Underwriting
Agreement provides that the Distributor will bear the expense of preparing,
printing, and distributing advertising and sales literature and prospectuses
used by it.
All subscriptions and sales of shares by the Distributor are at the
public offering price of the shares, which is determined in accordance with the
provisions of the Trust's Declaration of Trust, By-Laws, current prospectuses
and SAI. All orders are subject to acceptance by the Fund and the Trust reserves
the right, in its sole discretion, to reject any order received. Under the
Underwriting Agreement, the Trust is not liable to anyone for failure to accept
any order.
The Distributor has agreed that it will, in all respects, duly conform
with all state and federal laws applicable to the sale of the shares. The
Distributor has also agreed that it will indemnify and hold harmless the Trust
and each person who has been, is, or may be a Trustee or officer of the Trust
against expenses reasonably incurred by any of them in connection with any
claim, action, suit, or proceeding to which any of them may be a party that
arises out of or is alleged to arise out of any misrepresentation or omission to
state a material fact on the part of the Distributor or any other person for
whose acts the Distributor is responsible or is alleged to be responsible,
unless such misrepresentation or omission was made in reliance upon written
information furnished by the Trust.
The Underwriting Agreement provides that it will remain in effect as
long as its terms and continuance are approved annually (i) by a vote of a
majority of the Trust's Trustees who are not interested persons of the Fund, as
defined in the 1940 Act (the "Independent Trustees"), and (ii) by vote of a
majority of the Trust's Trustees, in each case, cast in person at a meeting
called for that purpose.
The Underwriting Agreement may be terminated, without penalty, on 60
days' written notice by the Board of Trustees or by a vote of a majority of
outstanding shares subject to such agreement. The Underwriting Agreement will
terminate automatically upon its "assignment," as that term is defined in the
1940 Act.
From time to time, if, in the Distributor's judgment, it could benefit
the sales of shares, the Distributor may provide to selected broker-dealers
promotional materials and selling aids, including, but not limited to, personal
computers, related software, and data files.
TAX INFORMATION
Requirements for Qualifications as a Regulated Investment Company
The Fund intends to qualify for and elect the tax treatment applicable to
regulated investment companies ("RIC") under Subchapter M of the Code. If the
(Such qualification does not involve supervision of management or investment
practices or policies by the Internal Revenue Service.) In order to qualify as a
RIC, the Fund must, among other things, (i) derive at least 90% of its gross
income from dividends, interest, payments with respect to proceeds from
securities loans, gains from the sale or other disposition of securities or
foreign currencies and other income (including gains from options, futures or
forward contracts) derived with respect to its business of investing in such
securities; and (ii) diversify its holdings so that, at the end of each quarter
of its taxable year, (a) at least 50% of the market
2-13
<PAGE>
value of the Fund's total assets is represented by cash, U.S. Government
securities and other securities limited in respect of any one issuer, to an
amount not greater than 5% of the Fund's total assets and 10% of the outstanding
voting securities of such issuer, and (b) not more than 25% of the value of its
total assets is invested in the securities of any one issuer (other than U.S.
Government securities and securities of other regulated investment companies).
By so qualifying, the Fund is not subject to federal income tax if it timely
distributes its investment company taxable income and any net realized capital
gains. A 4% nondeductible excise tax will be imposed on the Fund to the extent
it does not meet certain distribution requirements by the end of each calendar
year. The Fund anticipates meeting such distribution requirements.
Taxes on Distributions
Distributions will be taxable to shareholders whether made in shares or
in cash. Shareholders electing to receive distributions in the form of
additional shares will have a cost basis for federal income tax purposes in each
share so received equal to the net asset value of a share of the Fund on the
reinvestment date.
To calculate ordinary income for federal income tax purposes,
shareholders must generally include dividends paid by the Fund from its
investment company taxable income (net taxable investment income plus net
realized short-term capital gains, if any). The Fund will include dividends it
receives from domestic corporations when the Fund calculates its gross
investment income. The Fund anticipates that all or a portion of the ordinary
dividends which it pays will qualify for the 70% dividends-received deduction
for corporations. The Fund will inform shareholders of the amounts that so
qualify.
From time to time, the Fund will distribute the excess of its net
long-term capital gains over its short-term capital loss to shareholders (i.e.,
capital gain dividends). For federal tax purposes, shareholders must include
such capital gain dividends when calculating their net long-term capital gains.
Capital gain dividends are taxable as net long-term capital gains to a
shareholder, no matter how long the shareholder has held the shares.
Distributions by the Fund reduce its NAV. A distribution that reduces
the Fund's NAV below a shareholder's cost basis is taxable as described above,
although from an investment standpoint, it is a return of capital. In
particular, if a shareholder buys Fund shares just before the Fund makes a
distribution, when the Fund makes the distribution the shareholder will receive
what is in effect a return of capital. Nevertheless, the shareholder may incur
taxes on the distribution. Therefore, shareholders should carefully consider the
tax consequences of buying Fund shares just before a distribution.
All distributions, whether received in shares or cash, must be reported
by each shareholder on his or her federal income tax return. Each shareholder
should consult a tax advisor to determine the state and local tax implications
of Fund distributions.
If more than 50% of the value of the Fund's total assets at the end of
a fiscal year is represented by securities of foreign corporations and the Fund
elects to make foreign tax credits available to its shareholders, a shareholder
will be required to include in his gross income both cash dividends and the
amount the Fund advises him is his pro rata portion of income taxes withheld by
foreign governments from interest and dividends paid on a Fund's investments.
The shareholder may be entitled, however, to take the amount of such foreign
taxes withheld as a credit against his U.S. income tax, or to treat the foreign
tax withheld as an itemized deduction from his gross
2-14
<PAGE>
income, if that should be to his advantage. In substance, this policy enables
the shareholder to benefit from the same foreign tax credit or deduction that he
would have received if he had been the individual owner of foreign securities
and had paid foreign income tax on the income therefrom. As in the case of
individuals receiving income directly from foreign sources, the credit or
deduction is subject to a number of limitations.
Taxes on The Sale or Exchange of Fund Shares
Upon a sale or exchange of Fund shares, a shareholder will realize a
taxable gain or loss depending on his or her basis in the shares. A shareholder
must treat such gains or losses as a capital gain or loss if the shareholder
held the shares as capital assets. Capital gain on assets held for more than12
months is generally subject to a maximum federal income tax rate of 20% for an
individual. Generally, the Code will not allow a shareholder to realize a loss
on shares he or she has sold or exchanged and replaced within a sixty-one-day
period beginning thirty days before and ending thirty days after he or she sold
or exchanged the shares. The Code will not allow a shareholder to realize a loss
on the sale of Fund shares held by the shareholder for six months or less to the
extent the shareholder received exempt interest dividends on such shares.
Moreover, the Code will treat a shareholder's loss on shares held for six months
or less as a long-term capital loss to the extent the shareholder received
distributions of net capital gains on such shares.
Shareholders who fail to furnish their taxpayer identification numbers
to the Fund and to certify as to its correctness and certain other shareholders
may be subject to a 31% federal income tax backup withholding requirement on
dividends, distributions of capital gains and redemption proceeds paid to them
by the Fund. If the withholding provisions are applicable, any such dividends or
capital gain distributions to these shareholders, whether taken in cash or
reinvested in additional shares, and any redemption proceeds will be reduced by
the amounts required to be withheld. Investors may wish to consult their own tax
advisors about the applicability of the backup withholding provisions.
Other Tax Considerations
The foregoing discussion relates solely to U.S. federal income tax law
as applicable to U.S. persons (i.e., U.S. citizens and residents and U.S.
domestic corporations, partnerships, trusts and estates). It does not reflect
the special tax consequences to certain taxpayers (e.g., banks, insurance
companies, tax exempt organizations and foreign persons). Shareholders are
encouraged to consult their own tax advisors regarding specific questions
relating to federal, state and local tax consequences of investing in shares of
the Fund. Each shareholder who is not a U.S. person should consult his or her
tax advisor regarding the U.S. and foreign tax consequences of ownership of
shares of the Fund, including the possibility that such a shareholder may be
subject to a U.S. withholding tax at a rate of 30% (or at a lower rate under a
tax treaty) on amounts treated as income from U.S. sources under the Code.
BROKERAGE
2-2
<PAGE>
Brokerage Commissions
Generally,the Fund expects to purchase and sell its equity securities
through brokerage transactions for which commissions are payable. Purchases from
underwriters will include the underwriting commission or concession, and
purchases from dealers serving as market makers will include a dealer's mark-up
or reflect a dealer's mark-down. Where transactions are made in the
over-the-counter market, the Fund will deal with primary market makers unless
more favorable prices are otherwise obtainable.
The Fund expects to buy and sell its fixed income securities directly
from the issuer or an underwriter or market maker for the securities. Generally,
the Fund will not pay brokerage commissions for such purchases. When the Fund
buys a security from an underwriter, the purchase price will usually include an
underwriting commission or concession. The purchase price for securities bought
from dealers serving as market makers will similarly include the dealer's mark
up or reflect a dealer's mark down. When the Fund executes transactions in the
over-the-counter market, it will deal with primary market makers unless more
favorable prices are otherwise obtainable.
Selection of Brokers
When buying and selling portfolio securities, the advisor seeks brokers
who can provide the most benefit to the Fund. When selecting a broker, an
advisor will primarily look for the best price at the lowest commission, but in
the context of the broker's:
1. ability to provide the best net financial result to the Fund;
2. efficiency in handling trades;
3. ability to trade large blocks of securities;
4. readiness to handle difficult trades;
5. financial strength and stability; and
6. provision of "research services," defined as (a) reports and
analyses concerning issuers, industries, securities and
economic factors and (b) other information useful in making
investment decisions.
The Fund may pay higher brokerage commissions to a broker providing it
with research services, as defined in item 6, above. Pursuant to Section 28(e)
of the Securities Exchange Act of 1934, this practice is permitted if the
commission is reasonable in relation to the brokerage and research services
provided. Research services provided by a broker to an advisor do not replace,
but supplement, the services an advisor is required to deliver to the Fund. It
is impracticable for an advisor to allocate the cost, value and specific
application of such research services among its clients because research
services intended for one client may indirectly benefit another.
When selecting a broker for portfolio trades, an advisor may also
consider the amount of Fund shares a broker has sold, subject to the other
requirements described above.
If the Fund is advised by EIMC, Lieber & Company, an affiliate of EIMC
and a member of the New York and American Stock Exchanges, will to the extent
practicable effect substantially all of the portfolio transactions effected on
those exchanges for the Fund.
Simultaneous Transactions
The advisor makes investment decisions for the Fund independently of
decisions made for its other clients. When a security is suitable for the
investment objective of more than one client, it may be prudent for an advisor
to engage in a simultaneous transaction, that is, buy or sell the same
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<PAGE>
security for more than one client. The advisor strives for an equitable result
in such transactions by using an allocation formula. The high volume involved in
some simultaneous transactions can result in greater value to the Fund, but the
ideal price or trading volume may not always be achieved for an individual Fund.
ORGANIZATION
Description of Shares
The Declaration of Trust authorizes the issuance of an unlimited number
of shares of beneficial interest of series and classes of shares. Each share of
the Fund represents an equal proportionate interest with each other share of
that series and/or class. Upon liquidation, shares are entitled to a pro rata
share of the Trust based on the relative net assets of each series and/or class.
Shareholders have no preemptive or conversion rights. Shares are redeemable and
transferable.
Voting Rights
Under the terms of the Declaration of Trust, the Trust is not required
to hold annual meetings. At meetings called for the initial election of Trustees
or to consider other matters, each share is entitled to one vote for each dollar
of net asset value applicable to such share. Shares generally vote together as
one class on all matters. Classes of shares of the Fund have equal voting
rights. No amendment may be made to the Declaration of Trust that adversely
affects any class of shares without the approval of a majority of the votes
applicable to the shares of that class. Shares have non-cumulative voting
rights, which means that the holders of more than 50% of the votes applicable to
shares voting for the election of Trustees can elect 100% of the Trustees to be
elected at a meeting and, in such event, the holders of the remaining shares
voting will not be able to elect any Trustees.
After the initial meeting as described above, no further meetings of
shareholders for the purpose of electing Trustees will be held, unless required
by law (for such reasons as electing or removing Trustees, changing fundamental
policies, and approving advisory agreements or 12b-1 plans), unless and until
such time as less than a majority of the Trustees holding office have been
elected by shareholders, at which time, the Trustees then in office will call a
shareholders' meeting for the election of Trustees.
Limitation of Trustees' Liability
The Declaration of Trust provides that a Trustee will not be liable for
errors of judgment or mistakes of fact or law, but nothing in the Declaration of
Trust protects a Trustee against any liability to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of his duties involved in the conduct of his office.
2-16
<PAGE>
Banking Laws
The Glass-Steagall Act and other banking laws and regulations presently
prohibit member banks of the Federal Reserve System ("Member Banks") or their
non-bank affiliates from sponsoring, organizing, controlling, or distributing
the shares of registered, open-end investment companies such as the Trust. Such
laws and regulations also prohibit banks from issuing, underwriting or
distributing securities in general. However, under the Glass-Steagall Act and
such other laws and regulations, a Member Bank or an affiliate thereof may act
as investment advisor, transfer agent or custodian to a registered open-end
investment company and may also act as agent in connection with the purchase of
shares of such an investment company upon the order of its customer, FUNB and
its affiliates are subject to, and in compliance with, the aforementioned laws
and regulations.
Changes to applicable laws and regulations or future judicial or
administrative decisions could result in FUNB and its affiliates being prevented
from continuing to perform the services required under the investment advisory
contract or from acting as agent in connection with the purchase of shares of
the Fund by its customers. If FUNB and its affiliates were prevented from
continuing to provide for services called for under the investment advisory
agreement, it is expected that the Trustees would identify, and call upon the
Fund's shareholders to approve a new investment advisor. If this were to occur,
it is not anticipated that the shareholders of the Fund would suffer any adverse
financial consequences.
INVESTMENT ADVISORY AGREEMENT
Investment Advisory Agreement
On behalf of the Fund, the Trust has entered into an investment
advisory agreement with the Fund's advisor (the "Advisory Agreement") . Under
the Advisory Agreement, and subject to the supervision of the Trust's Board of
Trustees, the advisor furnishes to the Fund investment advisory, management and
administrative services, office facilities, and equipment in connection with its
services for managing the investment and reinvestment of the Fund's assets. The
advisor pays for all of the expenses incurred in connection with the provision
of its services. The Fund pays for all charges and expenses, other than those
specifically referred to as being borne by the advisor, including, but not
limited to, (1) custodian charges and expenses; (2) bookkeeping and auditors'
charges and expenses; (3) transfer agent charges and expenses; (4) fees and
expenses of Independent Trustees; (5) brokerage commissions, brokers' fees and
expenses; (6) issue and transfer taxes; (7) applicable costs and expenses under
the Distribution Plan (as described below) (8) taxes and trust fees payable to
governmental agencies; (9) the cost of share certificates; (10) fees and
expenses of the registration and qualification of the Fund and its shares with
the Securities and Exchange Commission ("SEC") or under state or other
securities laws; (11) expenses of preparing, printing and mailing prospectuses,
SAIs, notices, reports and proxy materials to shareholders of the Fund; (12)
expenses of shareholders' and Trustees' meetings; (13) charges and expenses of
legal counsel for the Fund and for the Independent Trustees on matters relating
to the Fund; (14) charges and expenses of filing annual and other reports with
the SEC and other authorities; and (15) all extraordinary charges and expenses
of the Fund. For information on advisory fees paid by the Fund, see "Expenses"
in Part 1 of this SAI.
The Advisory Agreement continues in effect for two years from its
effective date and, thereafter, from year to year only if approved at least
annually by the Board of Trustees of the Trust or by a vote of a majority of the
Fund's outstanding shares. In either case, the terms of the Advisory Agreement
and continuance thereof must be approved by the vote of a majority of the
Independent Trustees cast in person at a meeting called for the purpose of
voting on such approval. The Advisory Agreements may be terminated, without
penalty, on 60 days' written
2-17
<PAGE>
notice by the Trust's Board of Trustees or by a vote of a majority of
outstanding shares. The Advisory Agreement will terminate automatically upon its
"assignment" as that term is defined in the 1940 Act.
Transactions Among Advisory Affiliates
The Trust has adopted procedures pursuant to Rule 17a-7 of the 1940 Act
("Rule 17a-7 Procedures"). The Rule 17a-7 Procedures permit the Fund to buy or
sell securities from another investment company for which a subsidiary of First
Union Corporation is an investment advisor. The Rule 17a-7 Procedures also allow
the Fund to buy or sell securities from other advisory clients for whom a
subsidiary of First Union Corporation is an investment advisor. the Fund may
engage in such transaction if it is equitable to each participant and consistent
with each participant's investment objective.
DISTRIBUTION PLANS AND AGREEMENTS
Distribution fees are accrued daily and paid at least monthly on Class
A, Class B and Class C shares and are charged as class expenses, as accrued. The
distribution fees attributable to the Class B and Class C shares are designed to
permit an investor to purchase such shares through broker-dealers without the
assessment of a front-end sales charge, while at the same time permitting the
Distributor to compensate broker-dealers in connection with the sale of such
shares. In this regard, the purpose and function of the combined contingent
deferred sales charge and distribution services fee on the Class B shares are
the same as those of the front-end sales charge and distribution fee with
respect to the Class A shares in that in each case the sales charge and/or
distribution fee provide for the financing of the distribution of the Fund's
shares. The 12b-1 fees for Class A shares is 0.75%, but is currently limited to
0.25%. The 12b-1 fees for Class B shares and Class C shares is 1.00%.
Under the Rule 12b-1 Distribution Plan that has been adopted by the
Fund with respect to each of its Class A, Class B or, if applicable, Class C
shares (each a "Plan" and collectively, the "Plans"), the Treasurer of the Fund
reports the amounts expended under the Plans and the purposes for which such
expenditures were made to the Trustees of the Trust for their review on a
quarterly basis. Also, each Plan provides that the selection and nomination of
the Independent Trustees are committed to the discretion of such Independent
Trustees then in office.
The advisor may from time to time from its own funds or such other
resources as may be permitted by rules of the SEC make payments for distribution
services to the Distributor; the latter may in turn pay part or all of such
compensation to brokers or other persons for their distribution assistance.
Each Plan and and the Distribution Agreement will continue in effect
for successive twelve-month periods provided, however, that such continuance is
specifically approved at least annually by the Trustees of the Trust or by vote
of the holders of a majority of the outstanding voting securities of that class
and, in either case, by a majority of the Independent Trustees of the Trust.
The Plans permit the payment of fees to brokers and others for
distribution and shareholder-related administrative services and to
broker-dealers, depository institutions, financial intermediaries and
administrators for administrative services as to Class A, Class B and Class C
shares. The Plans are designed to (i) stimulate brokers to provide distribution
and administrative support services to the Fund and holders of Class A, Class B
and Class C shares and (ii) stimulate administrators to render administrative
support services to the Fund and holders of
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<PAGE>
Class A, Class B and Class C shares. The administrative services are provided by
a representative who has knowledge of the shareholder's particular circumstances
and goals, and include, but are not limited to providing office space,
equipment, telephone facilities, and various personnel including clerical,
supervisory, and computer, as necessary or beneficial to establish and maintain
shareholder accounts and records; processing purchase and redemption
transactions and automatic investments of client account cash balances;
answering routine client inquiries regarding Class A, Class B and Class C
shares; assisting clients in changing dividend options, account designations,
and addresses; and providing such other services as the Fund reasonably requests
for its Class A, Class B and Class C shares.
FUNB or its affiliates may finance the payments made by the Distributor
to compensate broker/dealers or other persons for distributing shares of the
Fund. In the event that the Plan or Distribution Agreement is terminated or not
continued with respect to one or more Classes of the Fund, (i) no distribution
fees (other than current amounts accrued but not yet paid) would be owed by the
Fund to the Distributor with respect to that class or classes, and (ii) the Fund
would not be obligated to pay the Distributor for any amounts expended under the
Distribution Agreement not previously recovered by the Distributor from
distribution services fees in respect of shares of such Class or Classes through
deferred sales charges.
All material amendments to any Plan or Distribution Agreement must be
approved by a vote of the Trustees of the Trust or the holders of the Fund's
outstanding voting securities, voting separately by class, and in either case,
by a majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval; and any Plan or Distribution
Agreement may not be amended in order to increase materially the costs that a
particular Class of shares of the Fund may bear pursuant to the Plan or
Distribution Agreement without the approval of a majority of the holders of the
outstanding voting shares of the Class affected. Any Plan or Distribution
Agreement may be terminated (i) by the Fund without penalty at any time by a
majority vote of the holders of the outstanding voting securities of the Fund,
voting separately by class or by a majority vote of the Independent Trustees, or
(ii) by the Distributor. To terminate any Distribution Agreement, any party must
give the other parties 60 days' written notice; to terminate a Plan only, the
Fund need give no notice to the Distributor. Any Distribution Agreement will
terminate automatically in the event of its assignment. For information on 12b-1
fees, see "Expenses" in the prospectus and "Expenses-12b-1 Fees" in Part 1 of
this SAI.
MANAGEMENT OF THE TRUST
The Trust is supervised by a Board of Trustees that is responsible for
representing the interest of the shareholders. The Trustees meet periodically
throughout the year to oversee the Fund's activities, reviewing, among other
things, the Fund's performance and their contractual arrangements with various
service providers. Each Trustee is paid a fee for his or her services. See
"Expenses-Trustee Compensation" in Part 1 of this SAI.
Set forth below are the Trustees and officers of the Trust and their
principal occupations and affiliations over the last five years. Unless
otherwise indicated, the address for each Trustee and officer is 200 Berkeley
Street, Boston, Massachusetts 02116. Each Trustee is also a Trustee of each of
the other Trusts in the Evergreen Fund complex, other than Evergreen Variable
Trust of which Messrs. Howell, Salton and Scofield are the only Trustees.
2-19
<PAGE>
<TABLE>
<CAPTION>
NAME POSITION WITH TRUST PRINCIPAL OCCUPATIONS FOR LAST FIVE YEARS
- ------------------------------- -------------------------- -------------------------------------------------------------
<S> <C> <C>
Laurence B. Ashkin Trustee Real estate developer and construction consultant;
(DOB: 2/2/28) and President of Centrum Equities and Centrum
Properties, Inc.
Charles A. Austin III Trustee Investment Counselor to Appleton Partners, Inc.;
(DOB: 10/23/34) former Director, Executive Vice President and
Treasurer, State Street Research & Management
Company (investment advice); Director, The
Andover Companies (Insurance); and Trustee,
Arthritis Foundation of New England.
K. Dun Gifford Trustee Trustee, Treasurer and Chairman of the Finance
(DOB: 10/12/38) Committee, Cambridge College; Chairman Emeritus and
Director, American Institute of Food and Wine;
Chairman and President, Oldways Preservation and
Exchange Trust (education); former Chairman of the
Board, Director, and Executive Vice President, The
London Harness Company; former Managing Partner,
Roscommon Capital Corp.; former Chief Executive
Officer, Gifford Gifts of Fine Foods; former
Chairman, Gifford, Drescher & Associates
(environmental consulting); and former Director,
Keystone Investments, Inc.
James S. Howell Chairman of the Former Chairman of the Distribution Foundation for
(DOB: 8/13/24) Board of Trustees the Carolinas; and former Vice President of Lance
Inc. (food manufacturing).
Leroy Keith, Jr. Trustee Chairman of the Board and Chief Executive Officer,
(DOB: 2/14/39) Carson Products Company; Director of Phoenix Total
Return Fund and Equifax, Inc.; Trustee of Phoenix
Series Fund, Phoenix Multi-Portfolio Fund, and The
Phoenix Big Edge Series Fund; and former President,
Morehouse College.
Gerald M. McDonnell Trustee Sales Representative with Nucor-Yamoto, Inc.
(DOB: 7/14/39) (steel producer).
Thomas L. McVerry Trustee Former Vice President and Director of Rexham
(DOB: 8/2/39) Corporation; and former Director of Carolina
Cooperative Federal Credit Union.
William Walt Pettit Trustee Partner in the law firm of William Walt Pettit, P.A.
(DOB: 8/26/55)
David M. Richardson Trustee Vice Chair and former Executive Vice President,
(DOB: 9/14/41) DHR International, Inc. (executive recruitment);
former Senior Vice President, Boyden International
Inc. (executive recruitment); and Director,
Commerce and Industry Association of New
Jersey, 411 International, Inc., and J&M Cumming
Paper Co.
2-20
<PAGE>
NAME POSITION WITH TRUST PRINCIPAL OCCUPATIONS FOR LAST FIVE YEARS
- ------------------------------- -------------------------- -------------------------------------------------------------
Russell A. Salton, III MD Trustee Medical Director, U.S. Health Care/Aetna Health
(DOB: 6/2/47) Services; former Managed Health Care Consultant;
and former President, Primary Physician Care.
Michael S. Scofield Trustee Attorney, Law Offices of Michael S. Scofield.
(DOB: 2/20/43)
Richard J. Shima Trustee Former Chairman, Environmental Warranty, Inc.
(DOB: 8/11/39) (insurance agency); Executive Consultant, Drake
Beam Morin, Inc. (executive outplacement); Director
of Connecticut Natural Gas Corporation, Hartford
Hospital, Old State House Association, Middlesex
Mutual Assurance Company, and Enhance Financial
Services, Inc.; Chairman, Board of Trustees,
Hartford Graduate Center; Trustee, Greater Hartford
YMCA; former Director, Vice Chairman and Chief
Investment Officer, The Travelers Corporation;
former Trustee, Kingswood-Oxford School; and former
Managing Director and Consultant, Russell Miller,
Inc. William J. Tomko* President and Senior Vice
President and Operations Executive, (DOB:8/30/58)
Treasurer BYSIS Fund Services. Nimish S. Bhatt*
Vice President and Vice President, Tax, BISYS Fund
Services; former (DOB: 6/6/63) Assistant Treasurer
Assistant Vice President, EAMC/First Union Bank;
former Senior Tax Consulting/Acting Manager,
Investment Companies Group, Pricewaterhousecoopers,
New York. Bryan Haft* Vice President Team Leader,
Fund Administration, BISYS Fund (DOB: 1/23/65)
Services.
Michael Koonce Secretary Vice President, Client Services, BISYS Fund
(DOB: 4/20/60) Services.
</TABLE>
*Address: BISYS, 3435 Stelzer Road, Columbus, Ohio 43219-8001
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<PAGE>
CORPORATE BOND RATINGS
Each Fund relies on ratings provided by independent rating services to
help determine the credit quality of bonds and other obligations a Fund intends
to purchase or already owns. A rating is an opinion of an issuer's ability to
pay interest and/or principal when due. Ratings reflect an issuer's overall
financial strength and whether it can meet its financial commitments under
various economic conditions.
The principal rating services, commonly used by the Funds and investors
generally, are S&P and Moody's. A Fund may also rely on ratings provided by
Fitch. Rating systems are similar among the different services. As an example,
the chart below compares basic ratings for long-term bonds. The "Credit Quality"
terms in the chart are for quick reference only. Following the chart are the
specific definitions each service provides for its ratings.
COMPARISON OF LONG-TERM BOND RATINGS
<TABLE>
<CAPTION>
MOODY'S S&P FITCH CREDIT QUALITY
================= ================= ================ ==================================================
<S> <C> <C> <C>
Aaa AAA AAA Excellent Quality (lowest risk)
Aa AA AA Almost Excellent Quality (very low risk)
A A A Good Quality (low risk)
Baa BBB BBB Satisfactory Quality (some risk)
Ba BB BB Questionable Quality (definite risk)
B B B Low Quality (high risk)
Caa/Ca/C CCC/CC/C CCC/CC/C In or Near Default
D DDD/DD/D In Default
================= ================= ================ ==================================================
</TABLE>
Moody's Long-Term Bond Ratings
AAA Bonds which are rated AAA are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
AA Bonds which are rated AA are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in AAA securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than the AAA securities.
A Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
2-22
<PAGE>
BAA Bonds which are rated BAA are considered as medium-grade obligations, (i.e.
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
BA Bonds which are rated BA are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA Bonds which are rated CAA are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
CA Bonds which are rated CA represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
NOTE: MOODY'S APPLIES NUMERICAL MODIFIERS, 1, 2 AND 3 IN EACH GENERIC RATING
CLASSIFICATION FROM Aa TO Caa. THE MODIFIER 1 INDICATES THAT THE COMPANY RANKS
IN THE HIGHER END OF ITS GENERIC RATING CATEGORY; THE MODIFIER 2 INDICATES A
MID-RANGE RAKING AND THE MODIFIER 3 INDICATES THAT THE COMPANY RANKS IN THE
LOWER END OF ITS GENERIC RATING CATEGORY.
S&P Long-Term Bond Ratings
AAA An obligation rated AAA has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong.
AA An obligation rated AA differs from the highest-rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.
BB, B, CCC, CC AND C: AS DESCRIBED BELOW, OBLIGATIONS RATED BB, B, CCC,
CC, AND C ARE REGARDED AS HAVING SIGNIFICANT SPECULATIVE CHARACTERISTICS. BB
INDICATES THE LEAST DEGREE OF SPECULATION AND C THE HIGHEST. WHILE SUCH
OBLIGATIONS WILL LIKELY HAVE SOME QUALITY AND PROTECTIVE CHARACTERISTICS, THESE
MAY BE OUTWEIGHED BY LARGE UNCERTAINTIES OR MAJOR EXPOSURES TO ADVERSE
CONDITIONS.
BB An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or
2-23
<PAGE>
economic conditions, which could lead to the obligor's inadequate capacity to
meet its financial commitment on the obligation.
B An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet it financial
commitment on the obligation.
CCC An obligation rated CCC is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC An obligation rated CC is currently highly vulnerable to nonpayment.
C The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.
D The D rating, unlike other ratings, is not prospective; rather, it is used
only where a default has actually occurred--and not where a default is only
expected. S&P changes ratings to D either:
o On the day an interest and/or principal payment is due and is not paid.
An exception is made if there is a grace period and S&P believes that a
payment will be made, in which case the rating can be maintained; or
o Upon voluntary bankruptcy filing or similar action. An exception is
made if S&P expects that debt service payments will continue to be made
on a specific issue. In the absence of a payment default or bankruptcy
filing, a technical default (i.e., covenant violation) is not
sufficient for assigning a D rating.
PLUS (+) OR MINUS (-) The ratings from AA to CCC may be modified by the addition
of a plus or minus sign to show relative standing within the major rating
categories.
Fitch Long-Term Bond Ratings
INVESTMENT GRADE
AAA Highest credit quality. AAA ratings denote the lowest expectation of credit
risk. They are assigned only in case of exceptionally strong capacity for timely
payment of financial commitments. This capacity is highly unlikely to be
adversely affected by foreseeable events.
AA Very high credit quality. AA ratings denote a very low expectation of credit
risk. They indicate very strong capacity for timely payment of financial
commitments. This capacity is not significantly vulnerable to foreseeable
events.
A High credit quality. A ratings denote a lower expectation of credit risk. The
capacity for timely payment of financial commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.
BBB Good credit quality. BBB ratings indicate that there is currently a low
expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse
2-24
<PAGE>
changes in circumstances and in economic conditions are more likely to impair
this capacity. This is the lowest investment-grade category.
SPECULATIVE GRADE
BB Speculative. BB ratings indicate that there is a possibility of credit risk
developing, particularly as the result of adverse economic change over time;
however, business or financial alternatives may be available to allow financial
commitments to be met. Securities rated in this category are not investment
grade.
B Highly speculative. B ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met; however, capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.
CCC, CC, C High default risk. Default is a real possibility. Capacity for
meeting financial commitment is solely reliant upon sustained, favorable
business or economic developments. A CC rating indicates that default of some
kind appears probable. C ratings signal imminent default.
DDD, DD, D Default. Securities are not meeting current obligations and are
extremely speculative. DDD designates the highest potential for recovery of
amounts outstanding on any securities involved. For U.S. corporates, for
example, DD indicates expected recovery of 50%-90% of such outstandings, and D
the lowest recovery potential, i.e. below 50%.
+ OR - may be appended to a rating to denote relative status within major rating
categories. Such suffixes are not added to the AAA rating category or to
categories below CCC.
CORPORATE SHORT-TERM RATINGS
Moody's Short-Term Issuer Ratings
PRIME-1 Issuers rated PRIME-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. PRIME-1 repayment
ability will often be evidenced by many of the following characteristics.
- -- Leading market positions in well-established industries.
- -- High rates of return on funds employed.
- -- Conservative capitalization structure with moderate reliance on debt and
ample asset protection.
- -- Broad margins in earnings coverage of fixed financial changes and high
internal cash generation.
- -- Well-established access to a range of financial markets and assured sources
of alternate liquidity.
PRIME-2 Issuers rated PRIME-2 (or supporting institutions) have a strong ability
for repayment of senior short-term debt obligations. This will normally be
evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
PRIME-3 Issuers rated PRIME-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level
2-25
<PAGE>
of debt protection measurements and may require relatively high financial
leverage. Adequate alternate liquidity is maintained.
NOT PRIME Issuers rated NOT PRIME do not fall within any of the Prime rating
categories.
S&P Short-Term Obligation Ratings
A-1 A short-term obligation rated A-1 is rated in the highest category by S&P.
The obligor's capacity to meet its financial commitment on the obligation is
strong. Within this category certain obligations are designated with a plus sign
(+). This indicates that the obligor's capacity to meet its financial commitment
on these obligations is extremely strong.
A-2 A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.
A-3 A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.
B A short-term obligation rated B is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.
C A short-term obligation rated C is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.
D The D rating, unlike other ratings, is not prospective; rather, it is used
only where a default has actually occurred--and not where a default is only
expected. S&P changes ratings to D either:
o On the day an interest and/or principal payment is due and is not paid.
An exception is made if there is a grace period and S&P believes that a
payment will be made, in which case the rating can be maintained; or
o Upon voluntary bankruptcy filing or similar action, An exception is
made if S&P expects that debt service payments will continue to be made
on a specific issue. In the absence of a payment default or bankruptcy
filing, a technical default (i.e., covenant violation) is not
sufficient for assigning a D rating.
Fitch Short-Term Obligation Ratings
F1 Highest credit quality. Indicates the strongest capacity for timely payment
of financial commitments; may have an added "+" to denote any exceptionally
strong credit feature.
F2 Good credit quality. A satisfactory capacity for timely payment of financial
commitments, but the margin of safety is not as great as in the case of the
higher ratings.
F3 Fair credit quality. The capacity for timely payment of financial commitments
is adequate; however, near-term adverse changes could result in a reduction to
non-investment grade.
B Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to
2-26
<PAGE>
near-term adverse changes in financial and economic conditions.
C High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.
D Default. Denotes actual or imminent payment default.
ADDITIONAL INFORMATION
Except as otherwise stated in its prospectus or required by law, the
Fund reserves the right to change the terms of the offer stated in its
prospectus without shareholder approval, including the right to impose or change
fees for services provided.
No dealer, salesman or other person is authorized to give any
information or to make any representation not contained in the Fund's
prospectus, SAI or in supplemental sales literature issued by the Fund or the
Distributor, and no person is entitled to rely on any information or
representation not contained therein.
The Fund's prospectus and SAI omit certain information contained in the
Trust's registration statement, which you may obtain for a fee from the SEC in
Washington, D.C.
2-27
<PAGE>
EVERGREEN EQUITY TRUST
PART C
Item 23 Exhibits
Unless otherwise indicated, each of the Exhibits listed below is filed
herewith.
<TABLE>
<CAPTION>
Exhibit
Number Description Location
- ------- ----------- -----------
<S> <C> <C>
(a) Declaration of Trust Incorporated by reference to
Registrant's Registration Statement
Filed on October 8, 1997
(b) By-laws Incorporated by reference to
Registrant's Registration Statement
Filed on October 8, 1997
(c) Provisions of instruments defining the rights
of holders of the securities being registered
are contained in the Declaration of Trust
Articles II, III.(6)(c), VI.(3), IV.(8), V, VI,
VII, VIII and By-laws Articles II, III and VIII
included as part of Exhibits 1 and 2 of this
Registration Statement
(d)(1) Investment Advisory and Management Incorporated by reference to
Agreement between the Registrant and First Post-Effective Amendment No. 4 to
Union National Bank Registrant's Registration Statement
Filed on March 12, 1998
(d)(2) Investment Advisory and Management Incorporated by reference to
Agreement between the Registrant and Evergreen Post-Effective Amendment No. 4 to
Asset Management Corp. Registrant's Registration Statement
Filed on March 12, 1998
(d)(3) Investment Advisory and Management Incorporated by reference to
Agreement between the Registrant and Keystone Post-Effective Amendment No. 4 to
Investment Management Company Registrant's Registration Statement
Filed on March 12, 1998
(d)(4) Form of Investment Advisory and Management Incorporated by reference to
Agreement between the Registrant and Post-Effective Amendment No. 4 to
Meridian Investment Company Registrant's Registration Statement
Filed on March 12, 1998
(e)(1) Class A and Class C Principal Underwriting Incorporated by reference to
Agreement between the Registrant and Evergreen Post-Effective Amendment No. 4 to
Distributor, Inc. Registrant's Registration Statement
Filed on March 12, 1998
(e)(2) Class B Principal Underwriting Agreement Incorporated by reference to
between the Registrant and Evergreen Investment Post-Effective Amendment No. 4 to
Services, Inc. (B-1) Registrant's Registration Statement
Filed on March 12, 1998
(e)(3) Class B Principal Underwriting Agreement Incorporated by reference to
between the Registrant and Evergreen Distributor, Post-Effective Amendment No. 4 to
Inc. (B-2) Registrant's Registration Statement
Filed on March 12, 1998
(e)(4) Class B Principal Underwriting Agreement Incorporated by reference to
between the Registrant and Evergreen Distributor, Post-Effective Amendment No. 4 to
Inc. (Evergreen/KCF) Registrant's Registration Statement
Filed on March 12, 1998
(e)(5) Class Y Principal Underwriting Agreement Incorporated by reference to
between the Registrant and Evergreen Distributor, Post-Effective Amendment No. 4 to
Inc. Registrant's Registration Statement
Filed on March 12, 1998
(e)(6) Principal Underwriting Agreement between Incorporated by reference to
the Registrant and Kokusai Securities Company Post-Effective Amendment No. 6 to
Limited Registrant's Registration Statement
Filed on July 31, 1998
(e)(7) Specimen Copy of Dealer Agreement used by Incorporated by reference to
Evergreen Distributor, Inc. Registrant's Pre-Effective Amendment No. 1
Filed on November 10, 1997
(e)(8) Principal Underwriting Agreement between Incorporated by reference to
the Registrant and Nomura Securities Company Post-Effective Amendment No. 6 to
Registrant's Registration Statement
Filed on July 31, 1998
(f) Form of Deferred Compensation Plan Incorporated by reference to
Registrant's Pre-Effective Amendment No. 1
Filed on November 10, 1997
(g) Custodian Agreement between the Registrant Incorporated by reference to
and State Street Bank and Trust Company Post-Effective Amendment No. 4 to
Registrant's Registration Statement
Filed on March 12, 1998
(h)(1) Administration Agreement between Evergreen Incorporated by reference to
Investment Services, Inc. and the Registrant Post-Effective Amendment No. 4 to
Registrant's Registration Statement
Filed on March 12, 1998
(h)(2) Transfer Agent Agreement between the Incorporated by reference to
Registrant and Evergreen Service Company Post-Effective Amendment No. 4 to
Registrant's Registration Statement
Filed on March 12, 1998
(i) Opinion and Consent of Sullivan & Worcester LLP Incorporated by reference to
Registrant's Post-Effective Amendment No. 2
Filed on December 12, 1997
(j)(1) Consent of PricewaterhouseCoopers LLP
(j)(2) Consent of KPMG Peat Marwick LLP
(k) Not applicable
(l) Not applicable
(m)(1) 12b-1 Distribution Plan for Class A Incorporated by reference to
Post-Effective Amendment No. 4 to
Registrant's Registration Statement
Filed on March 12, 1998
(m)(2) 12b-1 Distribution Plan for Class B Incorporated by reference to
(KAF B-1) Post-Effective Amendment No. 4 to
Registrant's Registration Statement
Filed on March 12, 1998
(m)(3) 12b-1 Distribution Plan for Class B Incorporated by reference to
(KAF B-2) Post-Effective Amendment No. 4 to
Registrant's Registration Statement
Filed on March 12, 1998
(m)(4) 12b-1 Distribution Plan for Class B Incorporated by reference to
(KCF/Evergreen) Post-Effective Amendment No. 4 to
Registrant's Registration Statement
Filed on March 12, 1998
(m)(5) 12b-1 Distribution Plan for Class C Incorporated by reference to
Post-Effective Amendment No. 4 to
Registrant's Registration Statement
Filed on March 12, 1998
(n) Financial Data Schedules
(o) Not applicable
(p) Multiple Class Plan Incorporated by reference to
Registrant's Pre-Effective Amendment No. 1
Filed on November 10, 1997
</TABLE>
Item 24. Persons Controlled by or Under Common Control with Registrant.
None
Item 25. Indemnification.
Provisions for the indemnification of the Registrant's Trustees and
officers are contained the Registrant's Declaration of Trust.
Provisions for the indemnification of the Registrant's Investment Advisors
are contained in their respective Investment Advisory and Management Agreements.
Provisions for the indemnification of Evergreen Distributor, Inc., the
Registrant's principal underwriter, are contained in each Principal Underwriting
Agreement between Evergreen Distributor, Inc. and the Registrant.
Item 26. Business or Other Connections of Investment Adviser.
The Directors and principal executive officers of First Union National Bank
are:
Edward E. Crutchfield, Jr. Chairman and Chief Executive Officer,
First Union Corporation; Chief Executive
Officer and Chairman, First Union National
Bank
Anthony P. Terracciano President, First Union Corporation; President
First Union National Bank
John R. Georgius Vice Chairman, First Union Corporation;
Vice Chairman, First Union National Bank
Marion A. Cowell, Jr. Executive Vice President, Secretary &
General Counsel, First Union Corporation;
Secretary and Executive Vice President,
First Union National Bank
Robert T. Atwood Executive Vice President and Chief Financial
Officer, First Union Corporation; Chief
Financial Officer and Executive Vice
President
All of the above persons are located at the following address: First Union
National Bank, One First Union Center, Charlotte, NC 28288.
The information required by this item with respect to Evergreen Asset
Management Corp. is incorporated by reference to the Form ADV (File No.
801-46522) of Evergreen Asset Management Corp.
The information required by this item with respect to Keystone Investment
Management Company is incorporated by reference to the Form ADV (File No.
801-8327) of Keystone Investment Management Company.
The information required by this item with respect to Meridian Investment
Company is incorporated by reference to the Form ADV (File No. 801-8327) of
Meridian Investment Company.
Item 27. Principal Underwriters.
The Directors and principal executive officers of Evergreen Distributor,
Inc. are:
Lynn C. Mangum Director, Chairman and Chief Executive
Officer
J. David Huber President
Kevin J. Dell Vice President, General Counsel and Secretary
All of the above persons are located at the following address: Evergreen
Distributor, Inc., 125 West 55th Street, New York, New York 10019.
Evergreen Distributor, Inc. acts as principal underwriter for each
registered investment company or series thereof that is a part of the Evergreen
"fund complex" as such term is defined in Item 22(a) of Schedule 14A under the
Securities Exchange Act of 1934.
Item 28. Location of Accounts and Records.
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:
Evergreen Investment Services, Inc., Evergreen Service Company and Keystone
Investment Management Company, all located at 200 Berkeley Street, Boston,
Massachusetts 02110
First Union National Bank, One First Union Center, 301 S. College Street,
Charlotte, North Carolina 28288
Evergreen Asset Management Corp., 2500 Westchester Avenue, Purchase,
New York 10577
Iron Mountain, 3431 Sharp Slot Road, Swansea, Massachusetts 02777
State Street Bank and Trust Company, 2 Heritage Drive, North Quincy,
Massachusetts 02171
Meridian Investment Co., 55 Valley Stream Parkway, Malvern, Pennsylvania
19355
Item 29. Management Services.
Not Applicable
Item 30. Undertakings.
The Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual
report to shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment
Company Act the Trust has duly caused this Registration Statement to be signed
on its behalf by the undersigned, duly authorized, in the City of Columbus,
and State of Ohio, on the 30th day of September, 1998.
EVERGREEN EQUITY TRUST
By: /s/ William J. Tomko
-----------------------------
Name: William J. Tomko
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 30th day of September, 1998.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/William J. Tomko /s/ Laurence B. Ashkin /s/ Charles A. Austin, III
- ------------------------- ----------------------------- --------------------------------
William J. Tomko Laurence B. Ashkin* Charles A. Austin III*
President amd Treasurer (Principal Trustee Trustee
Financial and Accounting Officer)
/s/ K. Dun Gifford /s/ James S. Howell /s/ William Walt Pettit
- ---------------------------- ---------------------------- --------------------------------
K. Dun Gifford* James S. Howell* William Walt Pettit*
Trustee Trustee Trustee
/s/Gerald M. McDonnell /s/ Thomas L. McVerry /s/ Michael S. Scofield
- ------------------------------- ----------------------------- --------------------------------
Gerald M. McDonell* Thomas L. McVerry* Michael S. Scofield*
Trustee Trustee Trustee
/s/ David M. Richardson /s/ Russell A. Salton, III MD
- ------------------------------ -------------------------------
David M. Richardson* Russell A. Salton, III MD*
Trustee Trustee
/s/ Richard J. Shima
- ------------------------------
Richard J. Shima*
Trustee
</TABLE>
*By: /s/ Catherine Foley
- -------------------------------
Catherine Foley
Attorney-in-Fact
*Catherine Foley, by signing her name hereto, does hereby sign this
document on behalf of each of the above-named individuals pursuant to powers of
attorney duly executed by such persons.
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------- -------
(j)(1) Consent of PricewaterhouseCoopers LLP
(j)(2) Consent of KPMG Peat Marwick LLP
(n) Financial Data Schedules
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 8 to the registration statement on Form N-1A (the "Registration
Statement") of Evergreen Equity Trust of our report dated September 15, 1998,
relating to the financial statements and financial highlights of Evergreen
Income and Growth Fund appearing in the July 31, 1998 Annual Report to
Shareholders, which is also incorporated by reference into the Registration
Statement. We also consent to the references to us under the heading "Financial
Highlights" in the Prospectuses and under the heading "Independent Auditors" in
the Statement of Additional Information.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
September 28, 1998
CONSENT OF INDEPENDENT AUDITORS
The Trustees and Shareholders
Evergreen Municipal Trust:
We consent to the use of our report dated September 4, 1998 for Evergreen Blue
Chip Fund, Evergreen Fund for Total Return, Evergreen Growth and Income Fund,
Evergreen Small Cap Equity Fund, Evergreen Utility Fund and Evergreen Value Fund
incorporated herein by reference and to the references to our firm under the
captions "FINANCIAL HIGHLIGHTS" in the prospectus and "Independent Auditors" in
the Statement of Additional Information.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Boston, Massachusetts
September 28, 1998
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN FUND FOR TOTAL RETURN CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 136,223,993
<INVESTMENTS-AT-VALUE> 178,626,862
<RECEIVABLES> 1,894,860
<ASSETS-OTHER> 70,448
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 180,592,170
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,215,138
<TOTAL-LIABILITIES> 1,215,138
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 26,229,506
<SHARES-COMMON-STOCK> 2,432,921
<SHARES-COMMON-PRIOR> 2,311,356
<ACCUMULATED-NII-CURRENT> 214,871
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6,151,377
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 20,071,481
<NET-ASSETS> 52,667,235
<DIVIDEND-INCOME> 947,840
<INTEREST-INCOME> 180,181
<OTHER-INCOME> 0
<EXPENSES-NET> (615,283)
<NET-INVESTMENT-INCOME> 512,739
<REALIZED-GAINS-CURRENT> 6,408,278
<APPREC-INCREASE-CURRENT> (312,165)
<NET-CHANGE-FROM-OPS> 6,608,852
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (457,652)
<DISTRIBUTIONS-OF-GAINS> (3,551,251)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 405,327
<NUMBER-OF-SHARES-REDEEMED> (476,275)
<SHARES-REINVESTED> 192,513
<NET-CHANGE-IN-ASSETS> 4,858,837
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3,397,787
<OVERDISTRIB-NII-PRIOR> (195)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (311,245)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (615,655)
<AVERAGE-NET-ASSETS> 50,857,843
<PER-SHARE-NAV-BEGIN> 20.69
<PER-SHARE-NII> 0.21
<PER-SHARE-GAIN-APPREC> 2.46
<PER-SHARE-DIVIDEND> (0.19)
<PER-SHARE-DISTRIBUTIONS> (1.52)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.65
<EXPENSE-RATIO> 1.21
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN FUND FOR TOTAL RETURN CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 136,223,993
<INVESTMENTS-AT-VALUE> 178,626,862
<RECEIVABLES> 1,894,860
<ASSETS-OTHER> 70,448
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 180,592,170
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,215,138
<TOTAL-LIABILITIES> 1,215,138
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 79,284,402
<SHARES-COMMON-STOCK> 4,904,830
<SHARES-COMMON-PRIOR> 4,571,389
<ACCUMULATED-NII-CURRENT> 182,570
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9,719,212
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 16,561,498
<NET-ASSETS> 105,747,682
<DIVIDEND-INCOME> 1,886,936
<INTEREST-INCOME> 358,942
<OTHER-INCOME> 0
<EXPENSES-NET> (1,989,174)
<NET-INVESTMENT-INCOME> 256,705
<REALIZED-GAINS-CURRENT> 12,782,400
<APPREC-INCREASE-CURRENT> (621,363)
<NET-CHANGE-FROM-OPS> 12,417,742
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (258,225)
<DISTRIBUTIONS-OF-GAINS> (7,082,118)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,312,799
<NUMBER-OF-SHARES-REDEEMED> (1,328,176)
<SHARES-REINVESTED> 348,818
<NET-CHANGE-IN-ASSETS> 11,508,161
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4,226,123
<OVERDISTRIB-NII-PRIOR> (134,349)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (619,299)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (1,989,911)
<AVERAGE-NET-ASSETS> 101,232,452
<PER-SHARE-NAV-BEGIN> 20.63
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> 2.45
<PER-SHARE-DIVIDEND> (0.06)
<PER-SHARE-DISTRIBUTIONS> (1.52)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.56
<EXPENSE-RATIO> 1.97
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN FUND FOR TOTAL RETURN CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 136,223,993
<INVESTMENTS-AT-VALUE> 178,626,862
<RECEIVABLES> 1,894,860
<ASSETS-OTHER> 70,448
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 180,592,170
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,215,138
<TOTAL-LIABILITIES> 1,215,138
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,046,939
<SHARES-COMMON-STOCK> 966,154
<SHARES-COMMON-PRIOR> 1,023,037
<ACCUMULATED-NII-CURRENT> 33,173
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,005,125
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,765,847
<NET-ASSETS> 20,851,084
<DIVIDEND-INCOME> 399,424
<INTEREST-INCOME> 75,643
<OTHER-INCOME> 0
<EXPENSES-NET> (422,529)
<NET-INVESTMENT-INCOME> 52,538
<REALIZED-GAINS-CURRENT> 2,644,086
<APPREC-INCREASE-CURRENT> (131,839)
<NET-CHANGE-FROM-OPS> 2,564,784
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (55,586)
<DISTRIBUTIONS-OF-GAINS> (1,542,452)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 212,115
<NUMBER-OF-SHARES-REDEEMED> (349,166)
<SHARES-REINVESTED> 80,168
<NET-CHANGE-IN-ASSETS> (348,331)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 944,147
<OVERDISTRIB-NII-PRIOR> (31,345)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (131,381)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (422,687)
<AVERAGE-NET-ASSETS> 21,479,246
<PER-SHARE-NAV-BEGIN> 20.65
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 2.46
<PER-SHARE-DIVIDEND> (0.06)
<PER-SHARE-DISTRIBUTIONS> (1.52)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.58
<EXPENSE-RATIO> 1.97
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN FUND FOR TOTAL RETURN CLASS Y
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 136,223,993
<INVESTMENTS-AT-VALUE> 178,626,862
<RECEIVABLES> 1,894,860
<ASSETS-OTHER> 70,448
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 180,592,170
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,215,138
<TOTAL-LIABILITIES> 1,215,138
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 99,963
<SHARES-COMMON-STOCK> 5,137
<SHARES-COMMON-PRIOR> 4,487
<ACCUMULATED-NII-CURRENT> 355
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6,670
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,043
<NET-ASSETS> 111,031
<DIVIDEND-INCOME> 1,312
<INTEREST-INCOME> 255
<OTHER-INCOME> 0
<EXPENSES-NET> (651)
<NET-INVESTMENT-INCOME> 917
<REALIZED-GAINS-CURRENT> 9,481
<APPREC-INCREASE-CURRENT> (430)
<NET-CHANGE-FROM-OPS> 9,968
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (895)
<DISTRIBUTIONS-OF-GAINS> (3,495)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,560
<NUMBER-OF-SHARES-REDEEMED> (5,138)
<SHARES-REINVESTED> 228
<NET-CHANGE-IN-ASSETS> 20,600
<ACCUMULATED-NII-PRIOR> 115
<ACCUMULATED-GAINS-PRIOR> 827
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (429)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (652)
<AVERAGE-NET-ASSETS> 70,021
<PER-SHARE-NAV-BEGIN> 20.62
<PER-SHARE-NII> 0.24
<PER-SHARE-GAIN-APPREC> 2.51
<PER-SHARE-DIVIDEND> (0.24)
<PER-SHARE-DISTRIBUTIONS> (1.52)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.61
<EXPENSE-RATIO> 0.93
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN GROWTH & INCOME FUND CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 1,747,884,736
<INVESTMENTS-AT-VALUE> 2,177,972,651
<RECEIVABLES> 12,536,667
<ASSETS-OTHER> 125,165
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,190,634,483
<PAYABLE-FOR-SECURITIES> 35,092,472
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8,221,133
<TOTAL-LIABILITIES> 43,313,605
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 249,534,665
<SHARES-COMMON-STOCK> 10,168,501
<SHARES-COMMON-PRIOR> 6,101,395
<ACCUMULATED-NII-CURRENT> 352,534
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6,791,874
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 39,633,407
<NET-ASSETS> 296,312,480
<DIVIDEND-INCOME> 2,067,930
<INTEREST-INCOME> 2,882,746
<OTHER-INCOME> 0
<EXPENSES-NET> 3,481,725
<NET-INVESTMENT-INCOME> 1,468,951
<REALIZED-GAINS-CURRENT> 11,671,265
<APPREC-INCREASE-CURRENT> 7,153,410
<NET-CHANGE-FROM-OPS> 20,293,626
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,133,476)
<DISTRIBUTIONS-OF-GAINS> (7,164,362)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,300,804
<NUMBER-OF-SHARES-REDEEMED> (7,135,642)
<SHARES-REINVESTED> 287,119
<NET-CHANGE-IN-ASSETS> 11,995,788
<ACCUMULATED-NII-PRIOR> 38,879
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,143,657
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,484,605
<AVERAGE-NET-ASSETS> 239,123,963
<PER-SHARE-NAV-BEGIN> 27.26
<PER-SHARE-NII> 0.16
<PER-SHARE-GAIN-APPREC> 2.86
<PER-SHARE-DIVIDEND> (0.13)
<PER-SHARE-DISTRIBUTIONS> (1.01)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 29.14
<EXPENSE-RATIO> 1.46
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN GROWTH & INCOME FUND CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 1,747,884,736
<INVESTMENTS-AT-VALUE> 2,177,972,651
<RECEIVABLES> 12,536,667
<ASSETS-OTHER> 125,165
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,190,634,483
<PAYABLE-FOR-SECURITIES> 35,092,472
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8,221,133
<TOTAL-LIABILITIES> 43,313,605
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 860,762,736
<SHARES-COMMON-STOCK> 34,605,795
<SHARES-COMMON-PRIOR> 20,017,483
<ACCUMULATED-NII-CURRENT> (1,638,777)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 21,557,306
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 118,821,814
<NET-ASSETS> 999,503,079
<DIVIDEND-INCOME> 6,838,173
<INTEREST-INCOME> 9,509,535
<OTHER-INCOME> 0
<EXPENSES-NET> 17,411,060
<NET-INVESTMENT-INCOME> (1,063,352)
<REALIZED-GAINS-CURRENT> 38,292,487
<APPREC-INCREASE-CURRENT> 23,598,052
<NET-CHANGE-FROM-OPS> 60,827,187
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (23,729,561)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 16,476,196
<NUMBER-OF-SHARES-REDEEMED> (317,773)
<SHARES-REINVESTED> 837,176
<NET-CHANGE-IN-ASSETS> 37,097,626
<ACCUMULATED-NII-PRIOR> (503,448)
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,071,611
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 17,420,561
<AVERAGE-NET-ASSETS> 788,834,881
<PER-SHARE-NAV-BEGIN> 27.10
<PER-SHARE-NII> (0.02)
<PER-SHARE-GAIN-APPREC> 2.81
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (1.01)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 28.88
<EXPENSE-RATIO> 2.21
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN GROWTH & INCOME FUND CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 1,747,884,736
<INVESTMENTS-AT-VALUE> 2,177,972,651
<RECEIVABLES> 12,536,667
<ASSETS-OTHER> 125,165
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,190,634,483
<PAYABLE-FOR-SECURITIES> 35,092,472
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8,221,133
<TOTAL-LIABILITIES> 43,313,605
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 44,321,928
<SHARES-COMMON-STOCK> 1,736,422
<SHARES-COMMON-PRIOR> 884,622
<ACCUMULATED-NII-CURRENT> (74,900)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,024,140
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,889,070
<NET-ASSETS> 50,160,238
<DIVIDEND-INCOME> 328,135
<INTEREST-INCOME> 454,526
<OTHER-INCOME> 0
<EXPENSES-NET> 833,020
<NET-INVESTMENT-INCOME> (50,358)
<REALIZED-GAINS-CURRENT> 1,806,242
<APPREC-INCREASE-CURRENT> 1,129,155
<NET-CHANGE-FROM-OPS> 2,885,039
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1,087,731)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,131,564
<NUMBER-OF-SHARES-REDEEMED> (2,725,060)
<SHARES-REINVESTED> 38,010
<NET-CHANGE-IN-ASSETS> 1,797,308
<ACCUMULATED-NII-PRIOR> (21,098)
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 338,373
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 833,474
<AVERAGE-NET-ASSETS> 37,745,361
<PER-SHARE-NAV-BEGIN> 27.10
<PER-SHARE-NII> (0.02)
<PER-SHARE-GAIN-APPREC> 2.82
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (1.01)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 28.89
<EXPENSE-RATIO> 2.21
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN GROWTH & INCOME FUND CLASS Y
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 1,747,884,736
<INVESTMENTS-AT-VALUE> 2,177,972,651
<RECEIVABLES> 12,536,667
<ASSETS-OTHER> 125,165
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,190,634,483
<PAYABLE-FOR-SECURITIES> 35,092,472
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8,221,133
<TOTAL-LIABILITIES> 43,313,605
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 505,008,221
<SHARES-COMMON-STOCK> 27,448,762
<SHARES-COMMON-PRIOR> 22,572,148
<ACCUMULATED-NII-CURRENT> 1,722,031
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 27,871,538
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 266,743,291
<NET-ASSETS> 801,345,081
<DIVIDEND-INCOME> 6,434,571
<INTEREST-INCOME> 9,050,120
<OTHER-INCOME> 0
<EXPENSES-NET> 9,022,548
<NET-INVESTMENT-INCOME> 6,462,142
<REALIZED-GAINS-CURRENT> 37,999,576
<APPREC-INCREASE-CURRENT> 22,432,321
<NET-CHANGE-FROM-OPS> 66,894,039
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,146,565)
<DISTRIBUTIONS-OF-GAINS> (23,937,007)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,214,674
<NUMBER-OF-SHARES-REDEEMED> (3,520,816)
<SHARES-REINVESTED> 797,581
<NET-CHANGE-IN-ASSETS> 37,810,467
<ACCUMULATED-NII-PRIOR> 474,876
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6,722,277
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9,031,580
<AVERAGE-NET-ASSETS> 749,866,879
<PER-SHARE-NAV-BEGIN> 27.29
<PER-SHARE-NII> 0.24
<PER-SHARE-GAIN-APPREC> 2.87
<PER-SHARE-DIVIDEND> (0.20)
<PER-SHARE-DISTRIBUTIONS> (1.01)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 29.19
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN INCOME & GROWTH FUND (2L12) CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 893,995,749
<INVESTMENTS-AT-VALUE> 941,812,530
<RECEIVABLES> 28,473,523
<ASSETS-OTHER> 209,026
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 970,495,079
<PAYABLE-FOR-SECURITIES> 5,271,218
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,570,034
<TOTAL-LIABILITIES> 19,841,252
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,519,616
<SHARES-COMMON-STOCK> 647,121
<SHARES-COMMON-PRIOR> 499,294
<ACCUMULATED-NII-CURRENT> 130,442
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,061,146
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 294,220
<NET-ASSETS> 15,005,424
<DIVIDEND-INCOME> 736,281
<INTEREST-INCOME> 56,130
<OTHER-INCOME> 0
<EXPENSES-NET> (208,195)
<NET-INVESTMENT-INCOME> 584,216
<REALIZED-GAINS-CURRENT> 1,251,826
<APPREC-INCREASE-CURRENT> (750,625)
<NET-CHANGE-FROM-OPS> 1,085,417
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (582,857)
<DISTRIBUTIONS-OF-GAINS> (827,257)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 204,121
<NUMBER-OF-SHARES-REDEEMED> (112,612)
<SHARES-REINVESTED> 56,318
<NET-CHANGE-IN-ASSETS> 3,220,436
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (135,494)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (208,600)
<AVERAGE-NET-ASSETS> 13,895,042
<PER-SHARE-NAV-BEGIN> 23.94
<PER-SHARE-NII> 1.05
<PER-SHARE-GAIN-APPREC> 0.81
<PER-SHARE-DIVIDEND> (1.02)
<PER-SHARE-DISTRIBUTIONS> (1.59)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 23.19
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN INCOME & GROWTH FUND (2L12) CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 893,995,749
<INVESTMENTS-AT-VALUE> 941,812,530
<RECEIVABLES> 28,473,523
<ASSETS-OTHER> 209,026
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 970,495,079
<PAYABLE-FOR-SECURITIES> 5,271,218
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,570,034
<TOTAL-LIABILITIES> 19,841,252
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 49,468,601
<SHARES-COMMON-STOCK> 2,367,514
<SHARES-COMMON-PRIOR> 1,846,743
<ACCUMULATED-NII-CURRENT> 395,645
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,741,048
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 939,133
<NET-ASSETS> 54,544,427
<DIVIDEND-INCOME> 2,760,638
<INTEREST-INCOME> 210,202
<OTHER-INCOME> 0
<EXPENSES-NET> (1,169,295)
<NET-INVESTMENT-INCOME> 1,801,545
<REALIZED-GAINS-CURRENT> 4,676,618
<APPREC-INCREASE-CURRENT> (2,415,838)
<NET-CHANGE-FROM-OPS> 4,062,325
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,826,984)
<DISTRIBUTIONS-OF-GAINS> (3,160,159)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 633,299
<NUMBER-OF-SHARES-REDEEMED> (310,711)
<SHARES-REINVESTED> 198,183
<NET-CHANGE-IN-ASSETS> 11,541,617
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (507,149)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (1,170,810)
<AVERAGE-NET-ASSETS> 52,004,126
<PER-SHARE-NAV-BEGIN> 23.81
<PER-SHARE-NII> 0.86
<PER-SHARE-GAIN-APPREC> 0.81
<PER-SHARE-DIVIDEND> (0.85)
<PER-SHARE-DISTRIBUTIONS> (1.59)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 23.04
<EXPENSE-RATIO> 2.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN INCOME & GROWTH FUND (2L12) CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 893,995,749
<INVESTMENTS-AT-VALUE> 941,812,530
<RECEIVABLES> 28,473,523
<ASSETS-OTHER> 209,026
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 970,495,079
<PAYABLE-FOR-SECURITIES> 5,271,218
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,570,034
<TOTAL-LIABILITIES> 19,841,252
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,133,304
<SHARES-COMMON-STOCK> 54,643
<SHARES-COMMON-PRIOR> 39,893
<ACCUMULATED-NII-CURRENT> 6,231
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 105,268
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,167
<NET-ASSETS> 1,258,970
<DIVIDEND-INCOME> 60,216
<INTEREST-INCOME> 4,559
<OTHER-INCOME> 0
<EXPENSES-NET> (25,407)
<NET-INVESTMENT-INCOME> 39,368
<REALIZED-GAINS-CURRENT> 102,993
<APPREC-INCREASE-CURRENT> (54,054)
<NET-CHANGE-FROM-OPS> 88,307
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (40,251)
<DISTRIBUTIONS-OF-GAINS> (63,045)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 27,805
<NUMBER-OF-SHARES-REDEEMED> (16,763)
<SHARES-REINVESTED> 3,708
<NET-CHANGE-IN-ASSETS> 342,906
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (11,020)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (25,440)
<AVERAGE-NET-ASSETS> 1,130,474
<PER-SHARE-NAV-BEGIN> 23.81
<PER-SHARE-NII> 0.87
<PER-SHARE-GAIN-APPREC> 0.80
<PER-SHARE-DIVIDEND> (0.85)
<PER-SHARE-DISTRIBUTIONS> (1.59)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 23.04
<EXPENSE-RATIO> 2.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN INCOME & GROWTH FUND (2L12) CLASS Y
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 893,995,749
<INVESTMENTS-AT-VALUE> 941,812,530
<RECEIVABLES> 28,473,523
<ASSETS-OTHER> 209,026
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 970,495,079
<PAYABLE-FOR-SECURITIES> 5,271,218
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,570,034
<TOTAL-LIABILITIES> 19,841,252
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 768,981,052
<SHARES-COMMON-STOCK> 37,891,181
<SHARES-COMMON-PRIOR> 37,520,690
<ACCUMULATED-NII-CURRENT> 12,927,439
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 51,523,813
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 46,412,702
<NET-ASSETS> 879,845,006
<DIVIDEND-INCOME> 49,177,741
<INTEREST-INCOME> 3,745,376
<OTHER-INCOME> 0
<EXPENSES-NET> (11,566,715)
<NET-INVESTMENT-INCOME> 41,356,402
<REALIZED-GAINS-CURRENT> 82,044,017
<APPREC-INCREASE-CURRENT> (50,993,772)
<NET-CHANGE-FROM-OPS> 72,406,647
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (41,136,147)
<DISTRIBUTIONS-OF-GAINS> (58,431,404)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 641,797
<NUMBER-OF-SHARES-REDEEMED> (4,066,667)
<SHARES-REINVESTED> 3,795,361
<NET-CHANGE-IN-ASSETS> (20,920,084)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (9,032,259)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (11,593,719)
<AVERAGE-NET-ASSETS> 926,918,629
<PER-SHARE-NAV-BEGIN> 23.98
<PER-SHARE-NII> 1.02
<PER-SHARE-GAIN-APPREC> 0.89
<PER-SHARE-DIVIDEND> (1.08)
<PER-SHARE-DISTRIBUTIONS> (1.59)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 23.22
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN SMALL CAP EQUITY FUND (2L22) CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 319,731,553
<INVESTMENTS-AT-VALUE> 309,389,622
<RECEIVABLES> 5,261,277
<ASSETS-OTHER> 59,674
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 314,710,573
<PAYABLE-FOR-SECURITIES> 1,267,324
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,357,166
<TOTAL-LIABILITIES> 7,624,490
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 56,895,259
<SHARES-COMMON-STOCK> 3,436,877
<SHARES-COMMON-PRIOR> 270,261
<ACCUMULATED-NII-CURRENT> 29,029
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 482,650
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (3,264,757)
<NET-ASSETS> 54,142,181
<DIVIDEND-INCOME> 778,228
<INTEREST-INCOME> 387,639
<OTHER-INCOME> 0
<EXPENSES-NET> (538,048)
<NET-INVESTMENT-INCOME> 627,819
<REALIZED-GAINS-CURRENT> 633,499
<APPREC-INCREASE-CURRENT> (2,856,363)
<NET-CHANGE-FROM-OPS> (1,595,045)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (585,054)
<DISTRIBUTIONS-OF-GAINS> (213,842)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,328,382
<NUMBER-OF-SHARES-REDEEMED> (1,207,491)
<SHARES-REINVESTED> 45,725
<NET-CHANGE-IN-ASSETS> 50,654,406
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (321,313)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (539,280)
<AVERAGE-NET-ASSETS> 32,130,869
<PER-SHARE-NAV-BEGIN> 15.69
<PER-SHARE-NII> 0.29
<PER-SHARE-GAIN-APPREC> 0.24
<PER-SHARE-DIVIDEND> (0.28)
<PER-SHARE-DISTRIBUTIONS> (0.19)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 15.75
<EXPENSE-RATIO> 1.68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN SMALL CAP EQUITY FUND (2L22) CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 319,731,553
<INVESTMENTS-AT-VALUE> 309,389,622
<RECEIVABLES> 5,261,277
<ASSETS-OTHER> 59,674
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 314,710,573
<PAYABLE-FOR-SECURITIES> 1,267,324
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,357,166
<TOTAL-LIABILITIES> 7,624,490
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 136,906,301
<SHARES-COMMON-STOCK> 8,307,846
<SHARES-COMMON-PRIOR> 604,997
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (7,985)
<ACCUMULATED-NET-GAINS> 1,140,254
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (7,847,130)
<NET-ASSETS> 130,191,440
<DIVIDEND-INCOME> 1,824,141
<INTEREST-INCOME> 910,156
<OTHER-INCOME> 0
<EXPENSES-NET> (1,830,706)
<NET-INVESTMENT-INCOME> 903,591
<REALIZED-GAINS-CURRENT> 1,517,273
<APPREC-INCREASE-CURRENT> (6,169,735)
<NET-CHANGE-FROM-OPS> (3,748,871)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (875,495)
<DISTRIBUTIONS-OF-GAINS> (507,582)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,426,642
<NUMBER-OF-SHARES-REDEEMED> (803,676)
<SHARES-REINVESTED> 79,883
<NET-CHANGE-IN-ASSETS> 123,130,106
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (755,190)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (1,833,601)
<AVERAGE-NET-ASSETS> 75,517,907
<PER-SHARE-NAV-BEGIN> 15.64
<PER-SHARE-NII> 0.19
<PER-SHARE-GAIN-APPREC> 0.22
<PER-SHARE-DIVIDEND> (0.19)
<PER-SHARE-DISTRIBUTIONS> (0.19)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 15.67
<EXPENSE-RATIO> 2.43
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN SMALL CAP EQUITY FUND (2L22) CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 319,731,553
<INVESTMENTS-AT-VALUE> 309,389,622
<RECEIVABLES> 5,261,277
<ASSETS-OTHER> 59,674
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 314,710,573
<PAYABLE-FOR-SECURITIES> 1,267,324
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,357,166
<TOTAL-LIABILITIES> 7,624,490
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 27,422,139
<SHARES-COMMON-STOCK> 1,673,076
<SHARES-COMMON-PRIOR> 177,252
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (2,730)
<ACCUMULATED-NET-GAINS> 249,343
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,471,851)
<NET-ASSETS> 26,196,901
<DIVIDEND-INCOME> 369,939
<INTEREST-INCOME> 184,152
<OTHER-INCOME> 0
<EXPENSES-NET> (371,142)
<NET-INVESTMENT-INCOME> 182,949
<REALIZED-GAINS-CURRENT> 304,928
<APPREC-INCREASE-CURRENT> (1,248,118)
<NET-CHANGE-FROM-OPS> (760,241)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (178,326)
<DISTRIBUTIONS-OF-GAINS> (100,773)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,760,785
<NUMBER-OF-SHARES-REDEEMED> (281,072)
<SHARES-REINVESTED> 16,111
<NET-CHANGE-IN-ASSETS> 23,889,245
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (153,146)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (371,728)
<AVERAGE-NET-ASSETS> 15,314,427
<PER-SHARE-NAV-BEGIN> 15.63
<PER-SHARE-NII> 0.19
<PER-SHARE-GAIN-APPREC> 0.22
<PER-SHARE-DIVIDEND> (0.19)
<PER-SHARE-DISTRIBUTIONS> (0.19)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 15.66
<EXPENSE-RATIO> 2.43
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN SMALL CAP EQUITY FUND (2L22) CLASS Y
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 319,731,553
<INVESTMENTS-AT-VALUE> 309,389,622
<RECEIVABLES> 5,261,277
<ASSETS-OTHER> 59,674
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 314,710,573
<PAYABLE-FOR-SECURITIES> 1,267,324
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,357,166
<TOTAL-LIABILITIES> 7,624,490
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 92,281,524
<SHARES-COMMON-STOCK> 6,124,137
<SHARES-COMMON-PRIOR> 2,697,579
<ACCUMULATED-NII-CURRENT> 155,049
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,877,182
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,241,806
<NET-ASSETS> 96,555,561
<DIVIDEND-INCOME> 2,011,297
<INTEREST-INCOME> 977,841
<OTHER-INCOME> 0
<EXPENSES-NET> (1,147,684)
<NET-INVESTMENT-INCOME> 1,841,454
<REALIZED-GAINS-CURRENT> 1,669,556
<APPREC-INCREASE-CURRENT> (7,608,192)
<NET-CHANGE-FROM-OPS> (4,097,182)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,701,966)
<DISTRIBUTIONS-OF-GAINS> (758,969)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,923,790
<NUMBER-OF-SHARES-REDEEMED> (1,558,339)
<SHARES-REINVESTED> 61,107
<NET-CHANGE-IN-ASSETS> 50,567,140
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (825,357)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (1,150,848)
<AVERAGE-NET-ASSETS> 82,534,364
<PER-SHARE-NAV-BEGIN> 15.71
<PER-SHARE-NII> 0.34
<PER-SHARE-GAIN-APPREC> 0.24
<PER-SHARE-DIVIDEND> (0.33)
<PER-SHARE-DISTRIBUTIONS> (0.19)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 15.77
<EXPENSE-RATIO> 1.39
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN VALUE FUND CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 785,462,855
<INVESTMENTS-AT-VALUE> 1,001,117,419
<RECEIVABLES> 7,202,755
<ASSETS-OTHER> 85,602
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,008,405,776
<PAYABLE-FOR-SECURITIES> 11,805,124
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,778,286
<TOTAL-LIABILITIES> 17,583,410
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 434,223,875
<SHARES-COMMON-STOCK> 21,422,851
<SHARES-COMMON-PRIOR> 15,920,815
<ACCUMULATED-NII-CURRENT> 251,458
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (24,861,140)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 66,555,319
<NET-ASSETS> 476,169,512
<DIVIDEND-INCOME> 7,764,418
<INTEREST-INCOME> 1,140,646
<OTHER-INCOME> 0
<EXPENSES-NET> (4,378,123)
<NET-INVESTMENT-INCOME> 4,526,941
<REALIZED-GAINS-CURRENT> 105,247,445
<APPREC-INCREASE-CURRENT> (74,272,586)
<NET-CHANGE-FROM-OPS> 35,501,800
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (4,928,756)
<DISTRIBUTIONS-OF-GAINS> (79,220,878)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,697,130
<NUMBER-OF-SHARES-REDEEMED> (2,758,581)
<SHARES-REINVESTED> 3,563,487
<NET-CHANGE-IN-ASSETS> 83,938,336
<ACCUMULATED-NII-PRIOR> 251,458
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (24,861,140)
<GROSS-ADVISORY-FEES> (2,178,681)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (4,381,283)
<AVERAGE-NET-ASSETS> 435,602,614
<PER-SHARE-NAV-BEGIN> 24.64
<PER-SHARE-NII> 0.26
<PER-SHARE-GAIN-APPREC> 2
<PER-SHARE-DIVIDEND> (0.29)
<PER-SHARE-DISTRIBUTIONS> (4.38)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.23
<EXPENSE-RATIO> 1.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN VALUE FUND CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 785,462,855
<INVESTMENTS-AT-VALUE> 1,001,117,419
<RECEIVABLES> 7,202,755
<ASSETS-OTHER> 85,602
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,008,405,776
<PAYABLE-FOR-SECURITIES> 11,805,124
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,778,286
<TOTAL-LIABILITIES> 17,583,410
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 346,094,082
<SHARES-COMMON-STOCK> 14,707,068
<SHARES-COMMON-PRIOR> 11,217,935
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (471,290)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (22,427,861)
<ACCUM-APPREC-OR-DEPREC> 3,264,483
<NET-ASSETS> 326,459,414
<DIVIDEND-INCOME> 5,547,241
<INTEREST-INCOME> 806,424
<OTHER-INCOME> 0
<EXPENSES-NET> (5,419,473)
<NET-INVESTMENT-INCOME> 934,192
<REALIZED-GAINS-CURRENT> 76,398,606
<APPREC-INCREASE-CURRENT> (52,236,253)
<NET-CHANGE-FROM-OPS> 25,096,545
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,461,990)
<DISTRIBUTIONS-OF-GAINS> (55,199,824)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,346,146
<NUMBER-OF-SHARES-REDEEMED> (1,290,986)
<SHARES-REINVESTED> 2,433,973
<NET-CHANGE-IN-ASSETS> 50,203,635
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (471,290)
<OVERDIST-NET-GAINS-PRIOR> (22,427,861)
<GROSS-ADVISORY-FEES> (1,547,259)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (5,421,713)
<AVERAGE-NET-ASSETS> 308,839,258
<PER-SHARE-NAV-BEGIN> 24.63
<PER-SHARE-NII> 0.08
<PER-SHARE-GAIN-APPREC> 1.99
<PER-SHARE-DIVIDEND> (0.12)
<PER-SHARE-DISTRIBUTIONS> (4.38)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.2
<EXPENSE-RATIO> 1.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN VALUE FUND CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 785,462,855
<INVESTMENTS-AT-VALUE> 1,001,117,419
<RECEIVABLES> 7,202,755
<ASSETS-OTHER> 85,602
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,008,405,776
<PAYABLE-FOR-SECURITIES> 11,805,124
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,778,286
<TOTAL-LIABILITIES> 17,583,410
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,736,558
<SHARES-COMMON-STOCK> 231,038
<SHARES-COMMON-PRIOR> 101,865
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (6,920)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (475,618)
<ACCUM-APPREC-OR-DEPREC> (128,934)
<NET-ASSETS> 5,125,086
<DIVIDEND-INCOME> 61,272
<INTEREST-INCOME> 9,137
<OTHER-INCOME> 0
<EXPENSES-NET> (60,595)
<NET-INVESTMENT-INCOME> 9,814
<REALIZED-GAINS-CURRENT> 768,222
<APPREC-INCREASE-CURRENT> (562,691)
<NET-CHANGE-FROM-OPS> 215,345
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (15,608)
<DISTRIBUTIONS-OF-GAINS> (713,832)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 170,261
<NUMBER-OF-SHARES-REDEEMED> (72,103)
<SHARES-REINVESTED> 31,015
<NET-CHANGE-IN-ASSETS> 2,618,421
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (6,920)
<OVERDIST-NET-GAINS-PRIOR> (475,618)
<GROSS-ADVISORY-FEES> (17,273)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (60,620)
<AVERAGE-NET-ASSETS> 3,441,637
<PER-SHARE-NAV-BEGIN> 24.61
<PER-SHARE-NII> 0.1
<PER-SHARE-GAIN-APPREC> 1.97
<PER-SHARE-DIVIDEND> (0.12)
<PER-SHARE-DISTRIBUTIONS> (4.38)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.18
<EXPENSE-RATIO> 1.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN VALUE FUND CLASS Y
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 785,462,855
<INVESTMENTS-AT-VALUE> 1,001,117,419
<RECEIVABLES> 7,202,755
<ASSETS-OTHER> 85,602
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,008,405,776
<PAYABLE-FOR-SECURITIES> 11,805,124
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,778,286
<TOTAL-LIABILITIES> 17,583,410
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> (11,199,630)
<SHARES-COMMON-STOCK> 8,234,209
<SHARES-COMMON-PRIOR> 46,643,861
<ACCUMULATED-NII-CURRENT> 143,960
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 48,160,328
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 145,963,696
<NET-ASSETS> 183,068,354
<DIVIDEND-INCOME> 12,304,703
<INTEREST-INCOME> 1,944,432
<OTHER-INCOME> 0
<EXPENSES-NET> (4,580,668)
<NET-INVESTMENT-INCOME> 9,668,467
<REALIZED-GAINS-CURRENT> 199,811,125
<APPREC-INCREASE-CURRENT> (163,824,979)
<NET-CHANGE-FROM-OPS> 45,654,613
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (11,332,854)
<DISTRIBUTIONS-OF-GAINS> (82,980,185)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,310,350
<NUMBER-OF-SHARES-REDEEMED> (46,491,232)
<SHARES-REINVESTED> 2,771,230
<NET-CHANGE-IN-ASSETS> (966,159,946)
<ACCUMULATED-NII-PRIOR> 143,960
<ACCUMULATED-GAINS-PRIOR> 48,160,328
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (3,280,195)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (4,585,433)
<AVERAGE-NET-ASSETS> 656,798,166
<PER-SHARE-NAV-BEGIN> 24.64
<PER-SHARE-NII> 0.35
<PER-SHARE-GAIN-APPREC> 1.97
<PER-SHARE-DIVIDEND> (0.35)
<PER-SHARE-DISTRIBUTIONS> (4.38)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.23
<EXPENSE-RATIO> 0.7
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN UTILITY FUND CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 121,871,517
<INVESTMENTS-AT-VALUE> 139,044,426
<RECEIVABLES> 3,463,658
<ASSETS-OTHER> 24,461
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 142,532,545
<PAYABLE-FOR-SECURITIES> 1,062,250
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 213,982
<TOTAL-LIABILITIES> 1,276,232
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 70,630,619
<SHARES-COMMON-STOCK> 8,104,711
<SHARES-COMMON-PRIOR> 8,001,425
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (10,652)
<ACCUMULATED-NET-GAINS> 10,883,812
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 13,796,298
<NET-ASSETS> 95,300,077
<DIVIDEND-INCOME> 4,292,181
<INTEREST-INCOME> 155,439
<OTHER-INCOME> 0
<EXPENSES-NET> (961,477)
<NET-INVESTMENT-INCOME> 3,486,143
<REALIZED-GAINS-CURRENT> 11,324,644
<APPREC-INCREASE-CURRENT> (39,929)
<NET-CHANGE-FROM-OPS> 14,770,858
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,623,474)
<DISTRIBUTIONS-OF-GAINS> (8,654,842)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,266,778
<NUMBER-OF-SHARES-REDEEMED> (1,407,032)
<SHARES-REINVESTED> 243,720
<NET-CHANGE-IN-ASSETS> 3,217,483
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (486,739)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (1,105,547)
<AVERAGE-NET-ASSETS> 97,344,934
<PER-SHARE-NAV-BEGIN> 11.45
<PER-SHARE-NII> 0.43
<PER-SHARE-GAIN-APPREC> 1.44
<PER-SHARE-DIVIDEND> (0.44)
<PER-SHARE-DISTRIBUTIONS> (1.12)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.76
<EXPENSE-RATIO> 0.99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN UTILITY FUND CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 121,871,517
<INVESTMENTS-AT-VALUE> 139,044,426
<RECEIVABLES> 3,463,658
<ASSETS-OTHER> 24,461
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 142,532,545
<PAYABLE-FOR-SECURITIES> 1,062,250
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 213,982
<TOTAL-LIABILITIES> 1,276,232
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 36,654,320
<SHARES-COMMON-STOCK> 3,721,068
<SHARES-COMMON-PRIOR> 3,205,111
<ACCUMULATED-NII-CURRENT> 4,129
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,206,484
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,910,786
<NET-ASSETS> 43,775,719
<DIVIDEND-INCOME> 1,818,518
<INTEREST-INCOME> 66,940
<OTHER-INCOME> 0
<EXPENSES-NET> (718,696)
<NET-INVESTMENT-INCOME> 1,166,762
<REALIZED-GAINS-CURRENT> 4,863,941
<APPREC-INCREASE-CURRENT> 241,563
<NET-CHANGE-FROM-OPS> 6,272,266
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,224,827)
<DISTRIBUTIONS-OF-GAINS> (3,545,873)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 974,483
<NUMBER-OF-SHARES-REDEEMED> (551,773)
<SHARES-REINVESTED> 93,247
<NET-CHANGE-IN-ASSETS> 7,499,319
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (206,669)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (778,736)
<AVERAGE-NET-ASSETS> 41,336,359
<PER-SHARE-NAV-BEGIN> 11.46
<PER-SHARE-NII> 0.34
<PER-SHARE-GAIN-APPREC> 1.44
<PER-SHARE-DIVIDEND> (0.36)
<PER-SHARE-DISTRIBUTIONS> (1.12)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.76
<EXPENSE-RATIO> 1.74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN UTILITY FUND CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 121,871,517
<INVESTMENTS-AT-VALUE> 139,044,426
<RECEIVABLES> 3,463,658
<ASSETS-OTHER> 24,461
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 142,532,545
<PAYABLE-FOR-SECURITIES> 1,062,250
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 213,982
<TOTAL-LIABILITIES> 1,276,232
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 428,107
<SHARES-COMMON-STOCK> 41,291
<SHARES-COMMON-PRIOR> 33,095
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (169)
<ACCUMULATED-NET-GAINS> 43,328
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,512
<NET-ASSETS> 485,778
<DIVIDEND-INCOME> 18,439
<INTEREST-INCOME> 693
<OTHER-INCOME> 0
<EXPENSES-NET> (7,306)
<NET-INVESTMENT-INCOME> 11,826
<REALIZED-GAINS-CURRENT> 50,329
<APPREC-INCREASE-CURRENT> 1,559
<NET-CHANGE-FROM-OPS> 63,714
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (12,408)
<DISTRIBUTIONS-OF-GAINS> (34,234)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13,355
<NUMBER-OF-SHARES-REDEEMED> (6,139)
<SHARES-REINVESTED> 980
<NET-CHANGE-IN-ASSETS> 113,966
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (2,100)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (7,902)
<AVERAGE-NET-ASSETS> 419,899
<PER-SHARE-NAV-BEGIN> 11.46
<PER-SHARE-NII> 0.34
<PER-SHARE-GAIN-APPREC> 1.44
<PER-SHARE-DIVIDEND> (0.36)
<PER-SHARE-DISTRIBUTIONS> (1.12)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.76
<EXPENSE-RATIO> 1.74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN UTILITY FUND CLASS Y
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 121,871,517
<INVESTMENTS-AT-VALUE> 139,044,426
<RECEIVABLES> 3,463,658
<ASSETS-OTHER> 24,461
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 142,532,545
<PAYABLE-FOR-SECURITIES> 1,062,250
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 213,982
<TOTAL-LIABILITIES> 1,276,232
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 996,489
<SHARES-COMMON-STOCK> 144,020
<SHARES-COMMON-PRIOR> 142,005
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (1,175)
<ACCUMULATED-NET-GAINS> 248,112
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 451,313
<NET-ASSETS> 1,694,739
<DIVIDEND-INCOME> 79,440
<INTEREST-INCOME> 2,890
<OTHER-INCOME> 0
<EXPENSES-NET> (13,307)
<NET-INVESTMENT-INCOME> 69,023
<REALIZED-GAINS-CURRENT> 210,445
<APPREC-INCREASE-CURRENT> (5,520)
<NET-CHANGE-FROM-OPS> 273,948
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (71,410)
<DISTRIBUTIONS-OF-GAINS> (166,884)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 100,754
<NUMBER-OF-SHARES-REDEEMED> (100,753)
<SHARES-REINVESTED> 2,014
<NET-CHANGE-IN-ASSETS> 42,871
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (9,025)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (15,982)
<AVERAGE-NET-ASSETS> 1,805,413
<PER-SHARE-NAV-BEGIN> 11.46
<PER-SHARE-NII> 0.46
<PER-SHARE-GAIN-APPREC> 1.45
<PER-SHARE-DIVIDEND> (0.48)
<PER-SHARE-DISTRIBUTIONS> (1.12)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.77
<EXPENSE-RATIO> 0.74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN BLUE CHIP FUND CLASS A
<S> <C>
<PERIOD-TYPE> 11-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 297,945,142
<INVESTMENTS-AT-VALUE> 383,073,812
<RECEIVABLES> 38,819,125
<ASSETS-OTHER> 72,944
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 421,965,881
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 18,557,816
<TOTAL-LIABILITIES> 18,557,816
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 251,232,850
<SHARES-COMMON-STOCK> 9,360,366
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 567,998
<ACCUMULATED-NET-GAINS> 13,339,771
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 19,594,167
<NET-ASSETS> 284,734,786
<DIVIDEND-INCOME> 2,028,839
<INTEREST-INCOME> 452,937
<OTHER-INCOME> 0
<EXPENSES-NET> (1,729,087)
<NET-INVESTMENT-INCOME> 758,824
<REALIZED-GAINS-CURRENT> 13,697,485
<APPREC-INCREASE-CURRENT> 13,950,531
<NET-CHANGE-FROM-OPS> 28,406,840
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (572,879)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 812,276
<NUMBER-OF-SHARES-REDEEMED> (1,203,287)
<SHARES-REINVESTED> 610,928
<NET-CHANGE-IN-ASSETS> 34,360,719
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (926,772)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (1,763,448)
<AVERAGE-NET-ASSETS> 278,399,719
<PER-SHARE-NAV-BEGIN> 27.39
<PER-SHARE-NII> 0.08
<PER-SHARE-GAIN-APPREC> 3.01
<PER-SHARE-DIVIDEND> (0.06)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 30.42
<EXPENSE-RATIO> 0.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN BLUE CHIP FUND CLASS B
<S> <C>
<PERIOD-TYPE> 11-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 297,945,142
<INVESTMENTS-AT-VALUE> 383,073,812
<RECEIVABLES> 38,819,125
<ASSETS-OTHER> 72,944
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 421,965,881
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 18,557,816
<TOTAL-LIABILITIES> 18,557,816
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 34,960,944
<SHARES-COMMON-STOCK> 3,884,909
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (582,950)
<ACCUMULATED-NET-GAINS> 17,967,599
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 65,547,746
<NET-ASSETS> 117,893,339
<DIVIDEND-INCOME> 2,283,527
<INTEREST-INCOME> 646,336
<OTHER-INCOME> 0
<EXPENSES-NET> (3,002,393)
<NET-INVESTMENT-INCOME> (78,666)
<REALIZED-GAINS-CURRENT> 31,481,536
<APPREC-INCREASE-CURRENT> 4,600,232
<NET-CHANGE-FROM-OPS> 36,003,102
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (753,205)
<DISTRIBUTIONS-OF-GAINS> (51,043,219)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,020,854
<NUMBER-OF-SHARES-REDEEMED> (2,178,914)
<SHARES-REINVESTED> 1,678,649
<NET-CHANGE-IN-ASSETS> 55,331,925
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (1,125,224)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2,968,032)
<AVERAGE-NET-ASSETS> 193,182,907
<PER-SHARE-NAV-BEGIN> 29.79
<PER-SHARE-NII> (0.12)
<PER-SHARE-GAIN-APPREC> 5.72
<PER-SHARE-DIVIDEND> (0.08)
<PER-SHARE-DISTRIBUTIONS> (4.96)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 30.35
<EXPENSE-RATIO> 0.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN BLUE CHIP FUND CLASS Y
<S> <C>
<PERIOD-TYPE> 11-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 297,945,142
<INVESTMENTS-AT-VALUE> 383,073,812
<RECEIVABLES> 38,819,125
<ASSETS-OTHER> 72,944
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 421,965,881
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 18,557,816
<TOTAL-LIABILITIES> 18,557,816
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 790,314
<SHARES-COMMON-STOCK> 25,659
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (14)
<ACCUMULATED-NET-GAINS> 2,883
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (13,243)
<NET-ASSETS> 779,940
<DIVIDEND-INCOME> 1,401
<INTEREST-INCOME> 462
<OTHER-INCOME> 0
<EXPENSES-NET> (2,148)
<NET-INVESTMENT-INCOME> (284)
<REALIZED-GAINS-CURRENT> 3,145
<APPREC-INCREASE-CURRENT> (13,243)
<NET-CHANGE-FROM-OPS> (10,382)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 26,608
<NUMBER-OF-SHARES-REDEEMED> (949)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 779,940
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (681)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2,147)
<AVERAGE-NET-ASSETS> 204,017
<PER-SHARE-NAV-BEGIN> 27.70
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 2.72
<PER-SHARE-DIVIDEND> (0.02)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 30.40
<EXPENSE-RATIO> 0.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN BLUE CHIP FUND CLASS C
<S> <C>
<PERIOD-TYPE> 11-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 297,945,142
<INVESTMENTS-AT-VALUE> 383,073,812
<RECEIVABLES> 38,819,125
<ASSETS-OTHER> 72,944
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 421,965,881
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 18,557,816
<TOTAL-LIABILITIES> 18,557,816
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 0.00
<EXPENSE-RATIO> 0.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
