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. 10 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 9 [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. 10
to
REGISTRATION STATEMENT
This Post-Effective Amendment No. 10 to Registrant's Registration Statement
No. 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, Evergreen Micro Cap Fund,
Evergreen Aggressive Growth Fund, Evergreen Omega Fund,
Evergreen Small Company Growth Fund, Evergreen Strategic Growth Fund,
Evergreen Stock Selector Fund and Evergreen Tax Strategic Equity Fund
are contained herein.
Prospectus for the following fund is contained in Registration Statement
No.333-37453/811-08413 filed on October 1, 1998:
Evergreen Masters Fund.
Prospectuses for the following funds are contained in Registration
Statement No. 333-37453/811-08413 filed on September 30, 1998: 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.
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.
PART B
------
Statement of Additional Information for Evergreen Fund, Evergreen Micro Cap
Fund, Evergreen Aggressive Growth Fund, Evergreen Omega Fund, Evergreen Small
Company Growth Fund, Evergreen Strategic Growth Fund, Evergreen Stock Selector
Fund and Evergreen Tax Strategic Equity Fund is contained herein.
Statement of Additional Information for the following fund is contained in
Registration Statement No. 333-37453/811-08413 filed on October 1, 1998:
Evergreen Masters Fund.
Statement of Additional Information for the following funds are contained
in Registration Statement No. 333-37453/811-08413 filed on September 30, 1998:
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.
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.
PART C
------
Exhibits
Indemnification
Business and Other Connections of Investment Adviser
Principal Underwriter
Location of Accounts and Records
Undertakings
Signatures
<PAGE>
EVERGREEN EQUITY TRUST
PART A
PROSPECTUSES
<PAGE>
EVERGREEN
Domestic
Growth
Funds
Evergreen Fund
Evergreen Micro Cap Fund
Evergreen Aggressive Growth Fund
Evergreen Omega Fund
Evergreen Small Company Growth Fund
Evergreen Strategic Growth Fund
Evergreen Tax Strategic Equity Fund
Class A
Class B
Class C
Evergreen Stock Selector Fund
Class A
Class B
Prospectus, February 1, 1999
The Securities and Exchange Commission has not determined that the information
in this prospectus is accurate or complete, nor has it approved or disapproved
these mutual fund shares. Anyone who tells you otherwise is committing a federal
crime.
TABLE OF CONTENTS
FUND SUMMARIES:
Evergreen Fund 4
Evergreen Micro Cap Fund 6
Evergreen Aggressive Growth Fund 8
Evergreen Omega Fund 10
Evergreen Small Company Growth Fund 12
Evergreen Strategic Growth Fund 14
Evergreen Stock Selector Fund 16
Evergreen Tax Strategic Equity Fund 18
GENERAL INFORMATION:
The Funds Investment Advisors 20
The Funds Portfolio Managers 20
Calculating the Share Price 21
How to Choose a Fund 21
How to Choose the Share Class
That Best Suits You 21
How to Buy Shares 22
How to Redeem Shares 23
Other Services 24
The Tax Consequences of
Investing in the Funds 25
Sales Compensation and Expenses 26
Financial Highlights 26
Other Fund Practices 26
In general, Funds included in this prospectus seek to provide investors with a
combination of capital growth and diversification. These aggressive stock Funds
tend to have more growth potential, risk and volatility than less aggressive
funds.
Fund Summaries Key
Each Funds summary is organized around the following basic topics and questions:
Investment Goal
What is the Funds financial objective? You can find clarification on how the
Fund seeks to achieve its objective by looking at the Funds strategy and
investment policies. The Funds Board of Trustees can change the investment
objective without a shareholder vote.
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?
Risk Factors
What are the specific risks for an investor in the Fund?
Performance
How well has the Fund performed in the past year? The past five years? The past
ten years?
Expenses
How much does it cost to invest in the Fund? What is the difference between
sales charges and expenses?
Domestic
Growth
Funds
typically rely on one or a combination of the following strategies:
- - investing primarily in common stocks expected to provide capital appreciation
- - investing in new or small companies with growth potential
- - investing in companies whose value is not yet widely recognized
- - investing in companies about to profit from unique situations in their
industries
- - investing in established companies with fresh growth potential
may be appropriate for investors who:
- - seek an investment expected to grow over time;
- - can tolerate sudden declines in the value of their investment
Risk Factors for All Mutual Funds
Please remember that mutual fund investment shares are:
- not guaranteed to achieve their investment 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
Like most investments, your investment in an Evergreen Domestic Growth 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, securities tend to decline in
value. Even if general economic conditions do not change, your investment may
decline in value if the particular industries, issuers or sectors your Fund
invests in do not perform well.
Interest Rate Risk
When interest rates go up, the value of debt securities and dividend-paying
stocks tends to fall If your Fund invests a significant portion of its portfolio
in debt securities or dividend-paying stocks and interest rates rise, then the
value of your investment may decline. The opposite is also true.
Credit Risk
The value of a debt security is directly affected by the issuers ability to
repay principal and pay interest on time. If your Fund invests in debt
securities or dividend paying stocks then the value of your investment may
decline if an issuer fails to pay an obligation on a timely basis.
Foreign Investment Risk
A Funds 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 Funds 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 likelihood that an
investment will not perform as well as expected.
Small Company Risk
Your investment may be subject to special risks associated with investing in
securities issued by small companies. Smaller, less 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.
<PAGE>
EVERGREEN FUND
FUND FACTS:
Goal:
Capital Appreciation
Principal Investments:
Common Stocks
Convertible Securities
Classes of Shares Offered in This Prospectus
Class A
Class B
Class C
Investment Advisor:
Evergreen Asset Management Corp.
Portfolio Managers:
Stephen A. Lieber
Nola Maddox Falcone
NASDAQ Symbols:
EVRAX (Class A)
EVRBX (Class B)
EVRCX (Class C)
Dividend Payment Schedule:
Annually
INVESTMENT GOAL
The Fund seeks capital appreciation.
INVESTMENT STRATEGY
The Fund invests primarily in common stocks and securities convertible into or
exchangeable for common stocks of companies that (1) are limited to a regional
market or whose securities are held mostly by a few shareholders that do not
frequently trade them, (2) have small shares of their intended markets compared
to other companies in their fields, or that serve limited markets, or (3) in the
opinion of the Funds managers, have growth potential due to a recent or
anticipated change in structure, management, products or services.
Each of the Evergreen Domestic Growth Funds may invest in high quality money
market instruments in response to adverse economic, political or market
conditions. This strategy is inconsistent with the Funds principal investment
strategy and its investment objective, and if employed could result in a lower
return and loss of market opportunity.
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
Small Company Risk
PERFORMANCE
The following charts show how the Fund has performed in the past.
The 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 Funds 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 (%)
1988 1989 1990 1991 1992 1993 1994 1995* 1996 1997
37.30 17.25 30.09
Best Quarter: 2nd Quarter 1997 +13.95%
Worst Quarter: 1st Quarter 1997 -0.17%
*Since inception on 1/3/95 through 12/31/95.
Year to date total return through 9/30/98 is 7.53%.
The next table lists the Funds average year-by-year return by class over the
past year and since inception (through 12/31/97), including sales charges. This
table is intended to provide you with some indication of the risks of investing
in the Fund. At the bottom of the table you can compare this performance with
the Russell 2000 Index. The Russell 2000 Index is an unmanaged index tracking
the performance of 2000 publicly-traded U.S. stocks and is often used to
indicate the performance of the broad stock market, including smaller companies.
The Russell 2000 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 1/3/95 23.92% N/A N/A 25.91%
Class B 1/3/95 24.01% N/A N/A 26.45%
Class C 1/3/95 28.00% N/A N/A 27.05%
Russell 2000 22.36% N/A N/A _____%
EXPENSES This section describes the fees and expenses you would pay if you
bought and held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
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%
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class A 0.89% 0.25% 0.30% 1.44%
Class B 0.89% 1.00% 0.30% 2.19%
Class C 0.89% 1.00% 0.30% 2.19%
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 $615 $722 $322 $222 $222
After 3 years $909 $985 $685 $685 $685
After 5 years $1,225 $1,375 $1,175 $1,175 $1,175
After 10 years $2,117 $2,245 $2,524 $2,245 $2,524
<PAGE>
MICRO CAP FUND
FUND FACTS:
Goal:
Capital Appreciation
Principal Investments:
Small-Cap Common Stocks
Classes of Shares Offered in This Prospectus:
Class A
Class B
Class C
Investment Advisor:
Evergreen Asset Management Corp.
Portfolio Managers:
A committee including Stephen A. Lieber and Edwin A. Miska
NASDAQ Symbols:
None
Dividend Payment Schedule:
Annually
INVESTMENT GOAL
The Fund seeks capital appreciation.
INVESTMENT STRATEGY
The Fund invests primarily in common stocks of very small companies (generally
between $1 and $150 million in market capitalization) which have a relatively
limited trading market (traded over-the-counter or on a regional securities
exchange). The Funds managers look for investment opportunities not widely
recognized by industry analysts due to the small size of the companies and the
resulting limited amounts of information on the companies. The Fund focuses on
investing in companies with high returns on equity and consistent earnings
growth.
Each of the Evergreen Domestic Growth Funds may invest in high quality money
market instruments in response to adverse economic, political or market
conditions. This strategy is inconsistent with the Funds principal investment
strategy and its investment objective, and if employed could result in a lower
return and loss of market opportunity.
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
Small Company Risk
PERFORMANCE
The following charts show how the Fund has performed in the past.
The 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 Funds 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 (%)
1988 1989 1990 1991 1992 1993 1994 1995* 1996 1997
9.89 12.16 47.10
Best Quarter: 3rd Quarter 1997 +24.37%
Worst Quarter: 4th Quarter 1995 -5.93%
*Since inception on 1/3/95 to 12/31/95
Year to date total return through 9/30/98 is 24.27%.
The next table lists the Funds average year-by-year return by class over the
past year and since inception (through 12/31/97), including sales charges. This
table is intended to provide you with some indication of the risks of investing
in the Fund. At the bottom of the table you can compare this performance with
the Russell 2000 Index. The Russell 2000 Index is an unmanaged index tracking
the performance of 2000 publicly-traded U.S. stocks and is often used to
indicate the performance of the broad stock market, including smaller companies.
The Russell 2000 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 1/3/95 40.11% N/A N/A 20.00%
Class B 1/3/95 41.02% N/A N/A 20.38%
Class C 1/3/95 45.05% N/A N/A 21.10%
Russell 2000 23.36% N/A N/A _____%
EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
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%
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
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% .25% 0.40% 1.65%
Class B 1.00% 1.00% 0.40% 2.40%
Class C 1.00% 1.00% 0.40% 2.40%
* Estimated for the fiscal year ending 9/30/99
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 $635 $743 $343 $243 $243
After 3 years $971 $1,048 $748 $748 $748
After 5 years $1,329 $1,480 $1,280 $1,280 $1,280
After 10 years $2,337 $2,463 $2,736 $2,463 $2,736
<PAGE>
AGGRESSIVE
GROWTH FUND
FUND FACTS:
Goal:
Long-term Capital Growth
Principal Investments:
Common Stocks
Convertible Securities
Classes of Shares Offered in This Prospectus:
Class A
Class B
Class C
Investment Advisor:
Evergreen Investment Management
Portfolio Manager:
Harold J. Ireland, Jr.
NASDAQ Symbols:
EAGAX (Class A)
EAGBX (Class B)
Dividend Payment Schedule:
Annually
INVESTMENT GOAL
The Fund seeks long-term capital appreciation.
INVESTMENT STRATEGY
The Fund invests at least 65% of its assets in common stocks, or securities
convertible into common stocks, of (1) companies that are in the developmental
stage but expected to grow over the long term, and/or (2) established companies
that, in the opinion of the Funds manager, have growth potential similar to that
of companies in the developmental stage. The Fund may also invest up to 35% of
its assets in investment grade corporate bonds, U.S. Government Securities,
commercial paper, certificates of deposit and repurchase agreements.
Each of the Evergreen Domestic Growth Funds may invest in high quality money
market instruments in response to adverse economic, political or market
conditions. This strategy is inconsistent with the Funds principal investment
strategy and its investment objective, and if employed could result in a lower
return and loss of market opportunity.
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
Small Company Risk
In addition, your investment may be subject to special
risks associated with investing in securities issued by
emerging growth companies. These companies are
typically in a developmental stage. This could lead to
wide fluctuations in the price/value of the securities due
to limited financing alternatives, limited management
depth or intense competition from larger companies.
PERFORMANCE
The following charts show how the Fund has performed
in the past.
The chart below shows the percentage gain or loss for Class A shares in each of
the last ten calendar years. It should give you a general idea of how the Funds
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 (%)
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
13.01 33.87 (4.51) 77.23 13.90 17.88 (9.31) 34.34 17.23 7.66
Best Quarter: 1st Quarter 1991 +21.55%
Worst Quarter: 3rd Quarter 1990 -19.85%
Year to date total return through 9/30/98 is 5.93%.
The next table lists the Funds average year-by-year return by class over the
past one, five and ten years and since inception (through 12/31/97), including
sales charges. This table is intended to provide you with some indication of the
risks of investing in the Fund. At the bottom of the table you can compare this
performance with the Russell 2000 Index. The Russell 2000 Index is an unmanaged
index tracking the performance of 2000 publicly-traded U.S. stocks and is often
used to indicate the performance of the broad stock market, including smaller
companies. The Russell 2000 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 4/15/83 2.54% 11.54% 17.54% 13.28%
Class B 7/7/95 1.98% N/A N/A 14.08%
Class C 8/3/95 5.99% N/A N/A 13.75%
Russell 2000 22.36% 16.40% 15.77% _____%
EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
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%
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class A 0.60% 0.25% 0.47% 1.32%
Class B 0.60% 1.00% 0.47% 2.07%
Class C 0.60% 1.00% 0.47% 2.07%
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 $603 $710 $310 $210 $210
After 3 years $873 $949 $649 $649 $649
After 5 years $1,164 $1,314 $1,114 $1,114 $1,114
After 10 years$1,990 $2,118 $2,400 $2,118 $2,400
<PAGE>
OMEGA FUND
FUND FACTS:
Goal:
Capital Growth
Principal Investments:
Common Stocks
Convertible Securities
Classes of Shares Offered in This Prospectus:
Class A
Class B
Class C
Investment Advisor:
Evergreen Investment
Management Company
Portfolio Manager:
Maureen E. Cullinane
NASDAQ Symbols:
EKOAX (Class A)
EKOBX (Class B)
EKOCX (Class C)
Dividend Payment Schedule:
Annually
INVESTMENT GOAL
The Fund seeks maximum capital growth.
INVESTMENT STRATEGY
The Fund invests primarily in common stocks and securities convertible into
common stocks. The Funds manager will continuously review the Funds holdings in
light of market conditions, business developments and economic trends. The Fund
will sell its portfolio securities when they have reached their anticipated
potential or when their positive characteristics have changed. The Fund will
also sell securities in order to buy other securities which may provide greater
capital growth. This may lead to high portfolio turnover, but that will not
limit investment decisions. The Fund may also invest up to 25% of its assets in
foreign securities.
Each of the Evergreen Domestic Growth Funds may invest in high quality money
market instruments in response to adverse economic, political or market
conditions. This strategy is inconsistent with the Funds principal investment
strategy and its investment objective, and if employed could result in a lower
return and loss of market opportunity.
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
Foreign Investment Risk
PERFORMANCE
The following charts show how the Fund has performed in the past.
The chart below shows the percentage gain or loss of the Funds Class A shares in
each of the last ten calendar years. It should give you a general idea of how
the Funds 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 (%)
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
14.05 33.05 (2.38) 54.49 4.00 19.33 (5.66) 36.94 11.31 24.53
Best Quarter: 1st Quarter 1991 +26.03%
Worst Quarter: 3rd Quarter 1990 -14.82%
Year to date total return through 9/30/98 is 4.43%.
The next table lists the Funds average year-by-year return by class over the
past one, five and ten years and since inception (through 12/31/97), including
sales charges. This table is intended to provide you with some indication of the
risks of investing in the Fund. At the bottom of the table you can compare this
performance with an index that tracks investments similar to the Funds, the S&P
500 Index. The S&P 500 Index is an unmanaged index tracking the performance 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 4/29/68 18.61% 15.27% 17.09% 13.22%
Class B 8/2/93 18.47% N/A N/A 15.11%
Class C 8/2/93 22.49% N/A N/A 15.42%
S&P 500 33.36% 20.27% 18.05% _____%
EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
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%
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses*
Class A 0.74% 0.25% 0.36% 1.35%
Class B 0.74% 1.00% 0.36% 2.10%
Class C 0.74% 1.00% 0.36% 2.10%
*Estimated for the fiscal year ending 9/30/99
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 $606 $713 $313 $213 $213
After 3 years $882 $958 $658 $658 $658
After 5 years $1,179 $1,329 $1,129 $1,129 $1,129
After 10 years$2,022 $2,150 $2,431 $2,150 $2,431
<PAGE>
SMALL COMPANY
GROWTH FUND
FUND FACTS:
GOAL:
Long-term Capital Growth
Principal Investments:
Small-Cap Common Stocks
Classes of Shares Offered in This Prospectus:
Class A
Class B
Class C
Investment Advisor:
Evergreen Investment Management Company
Portfolio Manager:
J. Gary Craven
NASDAQ Symbols:
EKAAX (Class A)
EKABX (Class B)
Dividend Payment Schedule:
Annually
INVESTMENT GOAL
The Fund seeks long-term growth of capital.
INVESTMENT STRATEGY
The Fund invests at least 65% of its assets in common stocks of companies with
small market capitalizations (less than $1 billion) at the time of the Funds
investment. The Fund may also invest up to 35% of its assets in corporate
securities without regard to the market capitalization of the issuer, including
(1) common stocks of companies with large and medium market capitalizations (at
least $1 billion), (2) securities convertible into common stocks, and (3) rights
or warrants to purchase common stocks. While income is not a goal of the Fund,
securities with strong income potential may be included in the portfolio as long
as they do not conflict with the Funds goal of capital growth. The Fund may also
invest up to 25% of its assets in limited partnerships and foreign securities.
Each of the Evergreen Domestic Growth Funds may invest in high quality money
market instruments in response to adverse economic, political or market
conditions. This strategy is inconsistent with the Funds principal investment
strategy and its investment objective, and if employed could result in a lower
return and loss of market opportunity.
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
Small Company Risk
PERFORMANCE
The following charts show how the Fund has performed in the past.
The chart below shows the percentage gain or loss for Class B shares of the Fund
in each of the last ten calendar years. It should give you a general idea of how
the Funds 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 B Shares (%)
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
11.76 23.61 (6.01) 72.90 9.86 25.34 0.18 36.27 0.82 13.39
Best Quarter: 1st Quarter 1991 +33.82%
Worst Quarter: 3rd Quarter 1990 -26.42%
Year to date total return through 9/30/98 is -33.53%.
The next table lists the Funds average year-by-year return by class over the
past one, five and ten years and since inception (through 12/31/97), including
sales charges. This table is intended to provide you with some indication of the
risks of investing in the Fund. At the bottom of the table you can compare this
performance with the Russell 2000 Index. The Russell 2000 Index is an unmanaged
index tracking the performance of 2000 publicly-traded U.S. stocks and is often
used to indicate the performance of the broad stock market, including smaller
companies. The Russell 2000 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 N/A
Class B 9/11/35 8.63% 14.13% 17.04% 10.25%
Class C 1/26/98 N/A N/A N/A N/A
Russell 2000 22.36% 16.40% 15.77% _____%
EXPENSES
This section describes the fees and expenses you would
pay if you bought and held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
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%
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses*
Class A 0.49% 0.25% 0.33% 1.07%
Class B 0.49% 1.00% 0.33% 1.82%
Class C 0.49% 1.00% 0.33% 1.82%
*Estimated for the fiscal year ending 9/30/99
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 $579 $685 $285 $185 $185
After 3 years $799 $873 $573 $573 $573
After 5 years $1,037 $1,185 $985 $985 $985
After 10 years$1,719 $1,848 $2,137 $1,848 $2,137
<PAGE>
STRATEGIC GROWTH
FUND
FUND FACTS:
Goal:
Capital Growth
Principal Investments:
Common Stocks
Bonds
Convertible Securities
Classes of Shares Offered in This Prospectus:
Class A
Class B
Class C
Investment Advisor:
Evergreen Investment Management Company
Portfolio Managers:
Maureen E. Cullinane
NASDAQ Symbols:
EKJAX (Class A)
EKJBX (Class B)
Dividend Payment Schedule:
Annually
INVESTMENT GOAL
The Fund seeks growth of capital.
INVESTMENT STRATEGY
The Fund invests primarily in common stocks, bonds (including bonds convertible
into or exchangeable for common stocks) and rights or warrants to purchase
common stocks. The Fund increases the quality of its investments to cushion its
portfolio against market declines. The Fund may also invest in limited
partnerships and foreign securities. Each of the Evergreen Domestic Growth Funds
may invest in high quality money market instruments in response to adverse
economic, political or market conditions. This strategy is inconsistent with the
Funds principal investment strategy and its investment objective, and if
employed could result in a lower return and loss of market opportunity.
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
PERFORMANCE
The following charts show how the Fund has performed in the past.
The chart below shows the percentage gain or loss for Class B shares of the Fund
in each of the last ten calendar years. It should give you a general idea of how
the Funds 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 (%)
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
10.70 24.09 (6.99) 41.58 8.36 13.12 (2.95) 28.51 11.96 31.71
Best Quarter: 1st Quarter 1991 +17.35%
Worst Quarter: 3rd Quarter 1990 -15.05%
Year to date total return through 9/30/98 is 4.43%.
The next table lists the Funds average year-by-year return by class over the
past one, five and ten years and since inception (through 12/31/97), including
sales charges. This table is intended to provide you with some indication of the
risks of investing in the Fund. At the bottom of the table you can compare this
performance with an index that tracks investments similar to the Funds, the S&P
500 Index. The S&P 500 Index is an unmanaged index tracking the performance 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 N/A
Class B 9/11/35 26.71% 15.56% 15.09% 11.53%
Class C 1/22/98 N/A N/A N/A N/A
S&P 500 33.36% 20.27% 18.05% _____%
EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
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%
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses*
Class A 0.53% 0.25% 0.31% 1.09%
Class B 0.53% 1.00% 0.31% 1.84%
Class C 0.53% 1.00% 0.31% 1.84%
*Estimated for the fiscal year ending 9/30/99
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 $581 $687 $287 $187 $187
After 3 years $805 $879 $579 $579 $579
After 5 years $1,047 $1,196 $996 $996 $996
After 10 years$1,741 $1,870 $2,159 $1,870 $2,159
<PAGE>
STOCK SELECTOR
FUND
FUND FACTS:
Goal:
Total Return
Principal Investments:
Stocks
Bonds
Convertible Securities
Classes of Shares Offered in This Prospectus:
Class A
Class B
Class C
Investment Advisor:
Meridian Investment Company
Portfolio Manager:
Joseph E. Stocke
NASDAQ Symbols:
EVSAX (Class A)
Dividend Payment Schedule:
Annually
INVESTMENT GOAL
The Fund seeks maximum total return.
INVESTMENT STRATEGY
The Fund invests primarily in common stocks of companies expected to experience
growth in earnings and price. Companies of all sizes will be considered for the
Funds portfolio. The Fund strives to provide a total return greater than broad
stock market indices such as the S&P 500 Index. The Fund may also invest up to
20% of its assets in preferred stocks, securities convertible into common stock,
corporate bonds and notes, warrants (up to 5% of assets), short term
obligations, common stocks of foreign companies and foreign securities
represented by American Depositary Receipts.
Each of the Evergreen Domestic Growth Funds may invest in high quality money
market instruments in response to adverse economic, political or market
conditions. This strategy is inconsistent with the Funds principal investment
strategy and its investment objective, and if employed could result in a lower
return and loss of market opportunity.
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
Small Company Risk
PERFORMANCE
The following charts show how the Fund has performed
in the past.
The 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 2/28/90. It should
give you a general idea of how the Funds 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 (%)
1988 1989 1990* 1991 1992 1993 1994 1995 1996 1997
1.52 43.19 9.18 8.01 (2.59) 35.43 27.19 30.43
Best Quarter: 1st Quarter 1991 +19.31%
Worst Quarter: 3rd Quarter 1990 -15.90%
*Since inception on 2/28/90 to 12/31/90.
Year to date total return through 9/30/98 is 5.40%
The next table lists the Funds average year-by-year return by class over the
past one and five years and since inception (through 12/31/97), including sales
charges. This table is intended to provide you with some indication of the risks
of investing in the Fund. At the bottom of the table you can compare this
performance with an index that tracks investments similar to the Funds, the S&P
500 Index. The S&P 500 Index is an unmanaged index tracking the performance 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 2/28/90 30.43% 18.77% N/A 18.37%
Class B 11/7/97 N/A N/A N/A -7.39%
Class C N/A N/A N/A N/A N/A
S&P 500 33.36% 20.27% N/A _____%
EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
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%
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class A 0.74% 0.25% 0.26% 1.25%
Class B 0.74% 1.00% 0.26% 2.00%
Class C N/A N/A N/A N/A
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 $596 $703 N/A $203 N/A
After 3 years $853 $927 N/A $627 N/A
After 5 years $1,129 $1,278 N/A $1,078 N/A
After 10 years$1,915 $2,043 N/A $2,043 N/A
<PAGE>
TAX STRATEGIC
EQUITY FUND
FUND FACTS:
GOAL:
Tax-efficient Long-term Capital Growth
Principal Investments:
Common Stocks
Classes of Shares:
Class A
Class B
Class C
Investment Advisor:
Evergreen Asset Management Corp.
Portfolio Manager:
Stephen A. Lieber
NASDAQ Symbols:
None
Dividend Payment Schedule:
Annually
INVESTMENT GOAL
The Fund seeks long-term capital growth within a tax-efficient strategy.
INVESTMENT STRATEGY
The Fund invests at least 65% of assets in common stocks of companies with large
and medium market capitalizations (at least $1 billion). The Fund may also
invest up to 35% of its assets in (1) foreign securities, including foreign
securities represented by American Depositary Receipts, (2) common stocks of
companies with small market capitalizations (less than $1 billion), and (3)
interests in limited partnerships. The Fund uses investment techniques that
reduce the impact of taxes on shareholder returns. One of these techniques is to
buy stocks paying low or no dividends which reduces the taxable dividends the
Fund pays to shareholders. Another technique is to purchase securities the Fund
expects to hold for growth over the long-term. This practice decreases the Funds
portfolio turnover rate, which in turn lessens the taxable capital gain the Fund
pays to shareholders. A third technique, used when selling securities in the
portfolio, involves selling the securities with the highest cost basis in order
to minimize realized capital gain. This also lessens taxable distributions to
shareholders.
Each of the Evergreen Domestic Growth Funds may invest in high quality money
market instruments in response to adverse economic, political or market
conditions. This strategy is inconsistent with the Funds principal investment
strategy and its investment objective, and if employed could result in a lower
return and loss of market opportunity.
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
Foreign Investment Risk
Small Company Risk
PERFORMANCE
The return for Class A shares since inception on 9/4/98 through 9/30/98 is
5.34%. This figure includes the effects of Fund expenses, but not sales charges.
The return would be lower if sales charges were included. Past performance is
not an indication of future results.
EXPENSES
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
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%
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses*
Class A 0.95% 0.25% 0.97% 2.17%
Class B 0.95% 1.00% 0.97% 2.92%
Class C 0.95% 1.00% 0.97% 2.92%
*Estimated for the fiscal year ending 9/30/99
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 $685 $795 $395 $295 $295
After 3 years $9,122 $1,204 $904 $904 $904
After 5 years $1,584 $1,738 $1,538 $1,538 $1,538
After 10 years$2,859 $2,983 $3,242 $2,983 $3,242
<PAGE>
THE FUNDS INVESTMENT ADVISORS
Each investment advisor manages a Funds investments and supervises its daily
business affairs. There are three different investment advisors for the
Evergreen Domestic Growth Funds. 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 $234 billion in consolidated assets as
of September 30, 1998. First Union Corporation is located at 301 South College
Street, Charlotte, North Carolina 28288-0013.
Evergreen Asset Management Corporation
(EAMC) is the investment advisor to Evergreen Fund,
Micro Cap Fund and Tax Strategic Equity Fund.
EAMC, with its predecessors, has served as investment advisor to the Evergreen
Funds since 1971, and currently manages over $10.7 billion in assets for 19 of
the Evergreen Funds. EAMC is located at 2500 Westchester Avenue, Purchase, New
York 10577.
Evergreen Investment Management Company (EIMC) is the investment advisor to
Omega Fund, Small Company Growth Fund and Strategic Growth Fund.
EIMC has been managing money for over 50 years and currently manages over $8.5
billion in assets for 26 of the Evergreen Funds. EIMC is located at 200 Berkeley
Street, Boston, Massachusetts 02116-5034.
Evergreen Investment Management (EIM) is the investment advisor to Aggressive
Growth Fund.
EIM has been managing mutual funds and private accounts since 1932 and currently
manages over $32.9 billion in assets for 43 of the Evergreen Funds. EIM is
located at 201 South College Street, Charlotte, North Carolina 28288-0630.
Meridian Investment Company (MIC) is the
investment advisor to Stock Selector Fund.
MIC has been managing money for over 15 years and currently manages over $2.5
billion in assets, including $512 million in assets for two of the Evergreen
Funds. MIC is located at 55 Valley Stream Parkway, Malvern, Pennsylvania 19355.
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.
THE FUNDS PORTFOLIO MANAGERS
Evergreen Fund
The day-to-day management of the Fund is handled by Stephen A. Lieber, and Nola
Maddox Falcone, C.F.A. Mr. Lieber is Chairman and Co-Chief Executive Officer of
EAMC. He was a founding partner of Lieber & Company, the original sponsor of the
Evergreen Funds, when it was established in 1969. He has been with EAMC and its
predecessor since 1971 and has been in the investment management business since
1952. Ms. Falcone is President and Co-Chief Executive Officer of EAMC. She
joined Lieber and Company as Senior Portfolio Manager in 1974, and was a General
Partner from January 1981 to June 1994.
Micro Cap Fund
The day-to-day management of the Fund is handled by a committee of portfolio
managers and stock analysts including Stephen A. Lieber and Edwin A. Miska. Mr.
Lieber is Chairman and Co-Chief Executive Officer of EAMC. He was a founding
partner of Lieber & Company, the original sponsor of the Evergreen Funds, when
it was established in 1969. He has been with EAMC and its predecessor since 1971
and has been in the investment management business since 1952. Mr. Miska has
been an analyst with EAMC and its predecessor since 1989.
Aggressive Growth Fund
The day-to-day management of the Fund is handled by Harold J. Ireland, Jr. He is
a Vice President of First Union National Bank and has been associated with the
bank since 1995. Prior to 1995, Mr. Ireland worked for Palm Beach Capital
Management, Inc. and managed the Funds predecessor, ABT Emerging Growth Fund.
Omega Fund
The day-to-day management of the Fund has been handled by Maureen E. Cullinane
since 1989. Ms. Cullinane is a Senior Vice President and Senior Portfolio
Manager of EIM and has over 20 years of investment experience.
Small Company Growth Fund
The day-to-day management of the Fund has been handled by J. Gary Craven, who
joined EIMC in November 1996. Mr. Craven is a Senior Vice President and Chief
Investment Officer of EIMC, as well as Group Leader for the small-cap equity
group. Prior to joining EIMC, Mr. Craven was a portfolio manager for 9 years at
Invista Capital Management, Inc.
Strategic Growth Fund
The day-to-day management of the Fund has been handled by Maureen E. Cullinane
since 1985. Ms. Cullinane is a Senior Vice President and Senior Portfolio
Manager of EIMC and has over 20 years of investment experience.
Stock Selector Fund
The day-to-day management of the Fund is handled by Joseph E. Stocke, CFA. Mr.
Stocke joined MIC in 1983 as an Assistant Investment Officer and since 1990 has
been a Senior Investment Manager/Equities. Mr. Stocke managed the Special Equity
Fund and Core Equity Fund (the predecessor of Evergreen Stock Selector Fund) of
CoreFunds, Inc. from 1990 to July 1998.
Tax Strategic Equity Fund
The day-to-day management of the Fund is handled by Stephen A. Lieber. Mr.
Lieber is Chairman and Co-Chief Executive Officer of EAMC. He was a founding
partner of Lieber & Company, the original sponsor of the Evergreen Funds, when
it was established in 1969. He has been with EAMC and its predecessor since 1971
and has been in the investment management business since 1952.
CALCULATING THE SHARE PRICE
The value of one share of a Fund, also known as the net asset value, or NAV, is
calculated on each day the New York Stock Exchange is open as of the time the
Exchange closes (normally 4:00 p.m. Eastern time). We calculate the share price
for each share by adding up the total assets of the Fund, subtracting all
liabilities, then dividing the result 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 the amount you receive for a
Fund redemption is based on 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
When choosing an Evergreen Fund, you should:
- - Most importantly, read the prospectus to see if the Fund is suitable for you.
- - Consider talking 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 Funds
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. The Evergreen Domestic Growth
Funds offer three different retail share classes. Each retail class of shares
has its own sales charge. Pay particularly close attention to this fee structure
so you know how much you will be paying before you invest.
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 investment 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 broker or the Evergreen Service Company at 1-800- 343-2898 if you
think you may qualify for either of these services.
Each Fund may also sell Class A shares at net asset value without any initial or
contingent sales charge to the Directors, Trustees, officers and employees of
the Fund, EAMC, EIM, EIMC, MIC and certain of their affiliates, and to members
of their immediate families, to registered representatives of firms with dealer
agreements with Evergreen Distributors, Inc., 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 purchase is invested in the Fund. However, your shares are
subject to an additional expense, known as the 12b-1 fee. In addition, you may
pay a deferred sales charge if you redeem your shares within six years after the
month of purchase. The amount of the deferred sales charge depends on the length
of time the shares are 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 dividend or capital gain reinvestments or on any
gain 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
12b-1 fee continues for the life of the account.
Time Held Deferred Sales Charge
Less than 13 months 1.00%
13 months or more 0.00%
Waiver of Class B or Class C Sales Charges
You will not be assessed a deferred sales charge for Class B or
Class C shares if you redeem shares 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 your age is at least 59-1/2
Automatic withdrawals of up to 1.5% of the account balance per
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
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
Method
By Mail or through
an Investment Professional
Complete and sign the account application.
Make the check payable to Evergreen Funds.
Mail the application and your check to the address below:
Evergreen Service Company Overnight Address:
P.O. Box 2121 Evergreen Service Company
Boston, MA 02106-2121200 200 Berkeley St.
Boston, MA 02116
Or deliver them to your investment representative (provided he
or she has a broker/dealer arrangement with Evergreen
Distributors, Inc.
Adding to an Account
Make your check payable to Evergreen Funds
Write a note specifying:
the Fund name
share class
your account number
the name(s) in which the account is registered
Mail to the address to the left or deliver to your investment
representative
By Phone
Call 1-800-343-2898 to set up an account number and get wiring
instructions (call before 12 noon if you want wired funds to be
credited that day).
Instruct your bank to wire or transfer your purchase (they may
charge a wiring fee).
Complete the account application and mail to:
Evergreen Service Company Overnight Address:
P.O. Box 2121 Evergreen Service Company
Boston, MA 02106-2121 200 Berkeley St.
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.
Call the Evergreen Express Line at
1-800-346-3858 24 hours a day or
1-800-343-2898 between 8 a.m. and 6 p.m. Eastern time, on
any business day.
If your bank account is set up on file, you can request either:
Federal Funds Wire (offers immediate access to funds) or
Electronic transfers through Automated Clearing House,
which avoids wiring fees.
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*.
You can only exchange shares within the same class.
There is no sales charge or redemption fee when exchanging
Funds within the Evergreen Funds 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 Investment Plan (SIP)
You can transfer money automatically from your bank account
into your Fund on a monthly basis.
Initial investment minimum is $50 if you invest at least $25 per
month with this service.
To enroll, check off the box on the account application and
provide:
your bank account information
the amount and date of your monthly investment
To establish automatic investing for an existing account, call 1-
800-343-2898 for an application.
The minimum is $25 per month or $75 per quarter.
You can also establish an investing program through direct
deposit from your paycheck. Call 1-800-343-2898 for details.
- - 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 manager, adversely affect the price of the
Fund.
HOW TO REDEEM SHARES
We offer you several convenient ways to sell your shares in any of the Evergreen
Funds:
Methods
Call Us
Requirements
Call the Evergreen Express Line at 1-800-346-3858 24 hours a
day or 1-800-343-2898 between 8 a.m. and 6 p.m. Eastern
time, on any business day.
This service must be authorized ahead of time, and is only
available for regular accounts.*
All authorized requests made 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 the proceeds 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 acting on telephone orders we 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
P.O. Box 2121
Boston, MA 02106-2121
Overnight Address:
Evergreen Service Company
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 exceptions 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 Shares in Person
You may also redeem your shares through participating broker-
dealers by delivering a letter as described above to your broker-
dealer.
A fee may be charged for this service.
Systematic
Withdrawal
Plan (SWP)
You can transfer money automatically from your Fund account
on a monthly or quarterly basis without redemption fees.
The withdrawal can be mailed to you, or deposited directly to
your bank account.
The minimum is $75 per month
The maximum is 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 remaining amount in 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 fiduciary corporation
or any other organization.
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
OTHER SERVICES
Evergreen Express Line Use our automated, 24-hour service to
check the value of your investment in a Fund; purchase, redeem or exchange Fund
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 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 deductions. The amounts deducted will be
invested in your Fund account using the Electronic Funds Transfer System. We
will provide the Fund 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 Fund 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 invested 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 FUNDS
You may be taxed in two ways:
On Fund distributions (capital gains and dividends)
On any profit you make when you sell any or all of
your shares.
Fund Distributions
A mutual fund passes along to all of its shareholders the net 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
Domestic Growth Fund is listed under the Funds
Investment Strategy section in the summary of each Fund
previously presented.
Capital Gains. When a mutual fund sells a security it
owns for a profit, the result is a capital gain. Evergreen
Domestic Growth 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 Funds
share price to drop by the amount of the 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.
No interest will accrue on amounts represented by uncashed distribution or
redemption checks.
We will send you a statement each January with the federal tax status of
dividends and distributions paid by each Fund 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 tax
return unless the transaction entered into by a tax-deferred retirement plan
occurred in 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 tax return, 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 each calendar year on Form 1099 DIV. Proceeds
from a sale are reported on Form 1099B. You must report these on your tax
return. 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 had 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 may be 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.
12b-1 Fee
The Trustees of the Evergreen Funds have approved a policy to assess 12b-1 fees
for Class A, Class B and Class C shares. These fees increase the cost of your
investment. The purpose of the 12b-1 fee is to promote the sale of more shares
of the Funds to the public. The Fund might use this fee for advertising and
marketing and as a service fee to the broker/dealer for additional shareholder
services.
Other Expenses
Other expenses include 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 Funds price is calculated, and are expressed as a percentage of the
Funds net assets. The effect of these fees is reflected in the performance
results 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. FINANCIAL HIGHLIGHTS
This section looks in detail at the results for one share in each share class of
the Funds 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. Tables for
Evergreen Fund, Micro Cap Fund, Aggressive Growth Fund and Stock Selector Fund
have been audited by PricewaterhouseCoopers LLP, the Funds independent
accountants. Tables for Omega Fund, Small Company Growth Fund, Strategic Growth
Fund and Tax Strategic Equity Fund have been audited by KPMG Peat Marwick LLP,
those Funds 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.
FINANCIAL HIGHLIGHTS INSERTED HERE
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 Funds portfolio.
Although this is intended to 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 Funds 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.
Notes
Evergreen Funds
Money Market
Treasury Money Market Fund
Money Market Fund
Municipal Money Market Fund
Pennsylvania Municipal Money Market Fund
Florida Municipal Money Market Fund
New Jersey 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
Tax Strategic Equity Fund
Tax
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.evergreen-funds.com
Evergreen Express Line
Call 1-800-346-3858
24 hours a day to
check your account
order a statement
get a Funds current price, yield and
total return
buy, redeem or exchange Fund shares
Non-retirement account holders
Call 1-800-343-2898
Each business day, 8 a.m. to 6 p.m. Eastern time to
buy, redeem or exchange shares
order applications
get assistance with your account
Retirement plan account holders
Call 1-800-247-4075
Each business day, 8 a.m. to 6 p.m. Eastern time
Information Line for Hearing and Speech Impaired
(TTY/TDD)
Call 1-800-343-2888
Each business day, 8 a.m. to 6 p.m. Eastern time
Write us a letter
Evergreen Service Company
P.O. Box 2121
Boston, MA 02106-2121
to buy, redeem or exchange shares
to change the registration on your account
for general correspondence
For express, registered or certified mail:
Evergreen Service Company
200 Berkeley Street
Boston, MA 02116-5039
Contact us on-line:
www.evergreen-funds.com
Regular communications you will receive:
Account Statements Youll receive quarterly
statements for each fund you invest in.
Confirmation Notices We send a confirmation of
any transaction you make within five days of the
transaction.
Annual and Semiannual reports Youll receive a
detailed financial report on each Fund you invest in
twice a year.
Tax Forms Each January youll receive any Fund
tax information you need to include in your tax
returns as well as the Evergreen Tax Information
Guide.
Evergreen Events Youll receive a periodic
newsletter published exclusively for Evergreen
Funds shareholders.
For More Information About the Evergreen Domestic Growth 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 holdings as of a
specific date, as well as commentary from the Funds 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 any of the documents,
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
also 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
31
<PAGE>
Evergreen Domestic Growth Funds
Evergreen Fund
Evergreen Micro Cap Fund
Evergreen Aggressive Growth Fund
Evergreen Omega Fund
Evergreen Small Company Growth Fund
Evergreen Stock Selector Fund
Evergreen Tax Strategic Equity Fund
Class Y
Prospectus, February 1, 1999
The Securities and Exchange Commission has not determined that the
information in this prospectus is accurate or complete, nor has it approved or
disapproved these mutual fund shares. Anyone who tells you otherwise is
committing a federal crime. table of contents
<PAGE>
FUND SUMMARIES:
Evergreen Fund 4
Evergreen Micro Cap Fund 6
Evergreen Aggressive Growth Fund 8
Evergreen Omega Fund 10
Evergreen Small Company Growth Fund 12
Evergreen Stock Selector Fund 14
Evergreen Tax Strategic Equity Fund 16
GENERAL INFORMATION:
The Funds Investment Advisors 18
The Funds Portfolio Managers 18
Calculating the Share Price 19
How to Choose a Fund 19
Who Can Buy Class Y Shares 19
How to Buy Shares 19
How to Redeem Shares 20
Other Services 21
The Tax Consequences of
Investing in the Funds 22
Expenses 23
Financial Highlights 23
Other Fund Practices 23
In general, Funds included in this prospectus seek to provide investors
with a combination of capital growth and diversification. These aggressive stock
Funds tend to have more growth potential, risk and volatility than less
aggressive funds.
Fund Summaries Key
Each Funds summary is organized around the following basic topics and questions:
Investment Goal
What is the Funds financial objective? You can find clarification on how
the Fund seeks to achieve its objective by looking at the Funds strategy and
investment policies. The Funds Board of Trustees can change the investment
objective without a shareholder vote.
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? Risk Factors What are the specific risks for an investor in
the Fund?
Performance
How well has the Fund performed in the past year? The past five years? The
past ten years?
Expenses
How much does it cost to invest in the Fund?
<PAGE>
Domestic
Growth
Funds
typically rely on one or a combination of the
following strategies:
investing primarily in common stocks expected to provide capital appreciation
investing in new or small companies with growth potential investing in companies
whose value is not yet widely recognized investing in companies about to profit
from unique situations in their industries
investing in established companies with fresh growth potential may be
appropriate for investors who: seek an investment expected to grow over time;
can tolerate sudden declines in the value of their investment
Risk Factors for All Mutual Funds
Please remember that mutual fund investment shares are:
not guaranteed to achieve their investment 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
Like most investments, your investment in an Evergreen Domestic Growth 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, securities tend to decline in
value. Even if general economic conditions do not change, your investment may
decline in value if the particular industries, issuers or sectors your Fund
invests in do not perform well.
Interest Rate Risk
When interest rates go up, the value of debt securities and dividend-paying
stocks tends to fall If your Fund invests a significant portion of its portfolio
in debt securities or dividend-paying stocks and interest rates rise, then the
value of your investment may decline. The opposite is also true.
Credit Risk
The value of a debt security is directly affected by the issuers ability to
repay principal and pay interest on time. If your Fund invests in debt
securities or dividend paying stocks then the value of your investment may
decline if an issuer fails to pay an obligation on a timely basis. Foreign
Investment Risk A Funds 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 Funds 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 likelihood
that an investment will not perform as well as expected.
Small Company Risk
Your investment may be subject to special risks associated with investing in
securities issued by small companies. Smaller, less 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.
<PAGE>
Evergreen Fund
FUND FACTS:
Goal:
Capital Appreciation
Principal Investments:
Common Stocks
Convertible Securities
Class of Shares Offered in This Prospectus
Class Y
Investment Advisor:
Evergreen Asset Management Corp.
Portfolio Managers:
Stephen A. Lieber
Nola Maddox Falcone
NASDAQ Symbol:
EVRAX (Class Y)
Dividend Payment Schedule:
Annually
Investment Goal
The Fund seeks capital appreciation.
Investment Strategy
The Fund invests primarily in common stocks and securities convertible into or
exchangeable for common stocks of companies that (1) are limited to a regional
market or whose securities are held mostly by a few shareholders that do not
frequently trade them, (2) have small shares of their intended markets compared
to other companies in their fields, or that serve limited markets, or (3) in the
opinion of the Funds managers, have growth potential due to a recent or
anticipated change in structure, management, products or services.
Each of the Evergreen Domestic Growth Funds may invest in high quality money
market instruments in response to adverse economic, political or market
conditions. This strategy is inconsistent with the Funds principal investment
strategy and its investment objective, and if employed could result in a lower
return and loss of market opportunity.
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
Small Company Risk
<PAGE>
Performance
The following charts show how the Fund has performed in the past.
The 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 Funds return has varied from year-to-year. This graph includes the effects
of Fund expenses.
Year-by-Year Total Return for Class Y Shares (%)
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
22.96 15.01 -11.72 40.05 8.73 6.27 0.73 37.19 17.55 30.34
Best Quarter: 1st Quarter 1991 +19.63%
Worst Quarter: 3rd Quarter 1990
- -21.34%Year to date total return through 9/30/98 is 7.25%.
The next table lists the Funds average year-by-year return for class Y
shares over the past one, five and ten years and since inception (through
12/31/97). This table is intended to provide you with some indication of the
risks of investing in the Fund. At the bottom of the table you can compare this
performance with the Russell 2000 Index. The Russell 2000 Index is an unmanaged
index tracking the performance of 2000 publicly-traded U.S. stocks and is often
used to indicate the performance of the broad stock market, including smaller
companies. The Russell 2000 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 1/3/95 30.34% 17.61% 15.64% 16.86%
Russell 2000 22.36% 16.40% 15.77% _____%
Expenses
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
Shareholder Transaction Expenses Class Y
Maximum sales charge imposed on None
purchases (as a % of offering price)
Maximum deferred sales charge None
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class Y 0.89% None 0.38% 1.19%
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
After 1 year $121
After 3 years $378
After 5 years $654
After 10 years $1,443
<PAGE>
Micro Cap Fund
FUND FACTS:
Goal:
Capital Appreciation
Principal Investments:
Small-Cap Common Stocks
Class of Shares Offered in This Prospectus:
Class Y
Investment Advisor:
Evergreen Asset Management Corp.
Portfolio Managers:
A committee including Stephen A. Lieber and Edwin A. Miska
NASDAQ Symbol:
EMCYX (Class Y)
Dividend Payment Schedule:
Annually
Investment Goal
The Fund seeks capital appreciation.
Investment Strategy
The Fund invests primarily in common stocks of very small companies (generally
between $1 and $150 million in market capitalization) which have a relatively
limited trading market (traded over-the-counter or on a regional securities
exchange). The Funds managers look for investment opportunities not widely
recognized by industry analysts due to the small size of the companies and the
resulting limited amounts of information on the companies. The Fund focuses on
investing in companies with high returns on equity and consistent earnings
growth.
Each of the Evergreen Domestic Growth Funds may invest in high quality money
market instruments in response to adverse economic, political or market
conditions. This strategy is inconsistent with the Funds principal investment
strategy and its investment objective, and if employed could result in a lower
return and loss of market opportunity.
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
Small Company Risk
<PAGE>
Performance
The following charts show how the Fund has performed in the past.
The 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 Funds return has varied from year-to-year. This graph includes the effects
of Fund expenses.
Year-by-Year Total Return for Class Y Shares (%)
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
26.07 20.89 -10.42 51.07 10.13 9.55 -10.55 10.38 12.46 47.59
Best Quarter: 1st Quarter 1991 +25.86%
Worst Quarter: 3rd Quarter 1990 -15.83%
Year to date total return through 9/30/98 is 24.14%.
The next table lists the Funds average year-by-year return for Class Y shares
over the past one, five and ten years and since inception (through 12/31/97).
This table is intended to provide you with some indication of the risks of
investing in the Fund. At the bottom of the table you can compare this
performance with the Russell 2000 Index. The Russell 2000 Index is an unmanaged
index tracking the performance of 2000 publicly-traded U.S. stocks and is often
used to indicate the performance of the broad stock market, including smaller
companies. The Russell 2000 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 6/1/83 47.59% 12.42% 15.09% 15.23%
Russell 2000 23.36% 16.40% 15.77% _____%
Expenses
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
Shareholder Transaction Expenses
Class Y
Maximum sales charge imposed on None
purchases (as a % of offering
price)
Maximum deferred sales charge None
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
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 0.40% 1.40%
* Estimated for the fiscal year ending 9/30/99
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
After 1 year $143
After 3 years $443
After 5 years $766
After 10 years $1,680
<PAGE>
Aggressive Growth Fund
FUND FACTS:
Goal:
Long-term Capital Growth
Principal Investments:
Common Stocks
Convertible Securities
Class of Shares Offered in This Prospectus:
Class Y
Investment Advisor:
Evergreen Investment Management
Portfolio Manager:
Harold J. Ireland, Jr.
NASDAQ Symbol:
EAGYX (Class Y)
Dividend Payment Schedule:
Annually
Investment Goal
The Fund seeks long-term capital appreciation.
Investment Strategy
The Fund invests at least 65% of its assets in common stocks, or securities
convertible into common stocks, of (1) companies that are in the developmental
stage but expected to grow over the long term, and/or (2) established companies
that, in the opinion of the Funds manager, have growth potential similar to that
of companies in the developmental stage. The Fund may also invest up to 35% of
its assets in investment grade corporate bonds, U.S. Government Securities,
commercial paper, certificates of deposit and repurchase agreements.
Each of the Evergreen Domestic Growth Funds may invest in high quality money
market instruments in response to adverse economic, political or market
conditions. This strategy is inconsistent with the Funds principal investment
strategy and its investment objective, and if employed could result in a lower
return and loss of market opportunity.
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
Small Company Risk
In addition, your investment may be subject to special risks associated with
investing in securities issued by emerging growth companies. These companies are
typically in a developmental stage. This could lead to wide fluctuations in the
price/value of the securities due to limited financing alternatives, limited
management depth or intense competition from larger companies.
<PAGE>
Performance
The following charts show how the Fund has performed in the past.
The chart below shows the percentage gain or loss for Class Y shares in each
calendar year since the Class Y shares inception. It should give you a general
idea of how the Funds return has varied from year-to-year. This graph includes
the effects of Fund expenses.
Year-by-Year Total Return for Class Y Shares (%)
1988 1989 1990 1991 1992 1993 1994 1995* 1996 1997
14.47 17.33 7.93
Best Quarter: 3rd Quarter 1997 +14.81%
Worst Quarter: 1st Quarter 1997 -9.63%
*Since inception on 7/11/95 to 12/31/95
Year to date total return through 9/30/98 is 5.43%.
The next table lists the Funds average year-by-year return for class Y shares
over the past year and since inception (through 12/31/97). This table is
intended to provide you with some indication of the risks of investing in the
Fund. At the bottom of the table you can compare this performance with the
Russell 2000 Index. The Russell 2000 Index is an unmanaged index tracking the
performance of 2000 publicly-traded U.S. stocks and is often used to indicate
the performance of the broad stock market, including smaller companies. The
Russell 2000 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 7/11/95 7.93% N/A N/A 16.15%
Russell 2000 22.36% N/A N/A _____%
Expenses
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
Shareholder Transaction Expenses Class Y
Maximum sales charge imposed on 4.75%
purchases (as a % of offering price)
Maximum deferred sales charge None
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses
Class Y 0.60% None 0.47% 1.07%
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
After 1 year $109 After 3 years $340 After 5 years $590 After 10 years $1,306
<PAGE>
Omega Fund
FUND FACTS:
Goal:
Capital Growth
Principal Investments:
Common Stocks
Convertible Securities
Class of Shares Offered in This Prospectus:
Class Y
Investment Advisor:
Evergreen Investment
Management Company
Portfolio Manager:
Maureen E. Cullinane
NASDAQ Symbol:
None
Dividend Payment Schedule:
Annually
Investment Goal
The Fund seeks maximum capital growth.
Investment Strategy
The Fund invests primarily in common stocks and securities convertible into
common stocks. The Funds manager will continuously review the Funds holdings in
light of market conditions, business developments and economic trends. The Fund
will sell its portfolio securities when they have reached their anticipated
potential or when their positive characteristics have changed. The Fund will
also sell securities in order to buy other securities which may provide greater
capital growth. This may lead to high portfolio turnover, but that will not
limit investment decisions. The Fund may also invest up to 25% of its assets in
foreign securities.
Each of the Evergreen Domestic Growth Funds may invest in high quality money
market instruments in response to adverse economic, political or market
conditions. This strategy is inconsistent with the Funds principal investment
strategy and its investment objective, and if employed could result in a lower
return and loss of market opportunity.
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
Foreign Investment Risk
<PAGE>
Performance
The return for Class Y shares since inception on 1/13/97 to 12/31/97 is 21.66%.
This figure includes the effects of fund expenses. Past performance is not an
indication of future results. Year to date total return through 9/30/98 is
4.67%.
Expenses
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
Shareholder Transaction Expenses Class Y
Maximum sales charge imposed on None
purchases (as a % of offering price)
Maximum deferred sales charge None
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses*
Class Y 0.74% 0.25% 0.36% 1.35%
*Estimated for the fiscal year ending 9/30/99
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
After 1 year $112
After 3 years $350
After 5 years $606
After 10 years $1,340
<PAGE>
Small Company Growth Fund
FUND FACTS:
Goal:
Long-term Capital Growth
Principal Investments:
Small-Cap Common Stocks
Class of Shares Offered in This Prospectus:
Class Y
Investment Advisor:
Evergreen Investment Management Company
Portfolio Manager:
J. Gary Craven
NASDAQ Symbol:
None
Dividend Payment Schedule:
Annually
Investment Goal
The Fund seeks long-term growth of capital.
Investment Strategy
The Fund invests at least 65% of its assets in common stocks of companies with
small market capitalizations (less than $1 billion) at the time of the Funds
investment. The Fund may also invest up to 35% of its assets in corporate
securities without regard to the market capitalization of the issuer, including
(1) common stocks of companies with large and medium market capitalizations (at
least $1 billion), (2) securities convertible into common stocks, and (3) rights
or warrants to purchase common stocks. While income is not a goal of the Fund,
securities with strong income potential may be included in the portfolio as long
as they do not conflict with the Funds goal of capital growth. The Fund may also
invest up to 25% of its assets in limited partnerships and foreign securities.
Each of the Evergreen Domestic Growth Funds may invest in high quality money
market instruments in response to adverse economic, political or market
conditions. This strategy is inconsistent with the Funds principal investment
strategy and its investment objective, and if employed could result in a lower
return and loss of market opportunity.
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
Small Company Risk
<PAGE>
Performance
The return for Class Y shares since inception on 1/26/98 to 9/30/98 is 33.25%.
This figure includes the effects of fund expenses. Past performance is not an
indication of future results.
Expenses
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
Shareholder Transaction Expenses Class Y
Maximum sales charge imposed on None
purchases (as a % of offering
price)
Maximum deferred sales charge None
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses*
Class Y 0.49% None 0.33% 0.82%
*Estimated for the fiscal year ending 9/30/99
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
After 1 year $84
After 3 years $262
After 5 years $455
After 10 years $1,014
<PAGE>
Stock Selector Fund
FUND FACTS:
Goal:
Total Return
Principal Investments:
Stocks
Bonds
Convertible Securities
Class of Shares Offered in This Prospectus:
Class Y
Investment Advisor:
Meridian Investment Company
Portfolio Manager:
Joseph E. Stocke
NASDAQ Symbol:
EVSYX (Class Y)
Dividend Payment Schedule:
Annually
Investment Goal
The Fund seeks maximum total return.
Investment Strategy
The Fund invests primarily in common stocks of companies expected to experience
growth in earnings and price. Companies of all sizes will be considered for the
Funds portfolio. The Fund strives to provide a total return greater than broad
stock market indices such as the S&P 500 Index. The Fund may also invest up to
20% of its assets in preferred stocks, securities convertible into common stock,
corporate bonds and notes, warrants (up to 5% of assets), short term
obligations, common stocks of foreign companies and foreign securities
represented by American Depositary Receipts.
Each of the Evergreen Domestic Growth Funds may invest in high quality money
market instruments in response to adverse economic, political or market
conditions. This strategy is inconsistent with the Funds principal investment
strategy and its investment objective, and if employed could result in a lower
return and loss of market opportunity.
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
Small Company Risk
<PAGE>
Performance
The following charts show how the Fund has performed in the past.
The 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 2/21/95. It should
give you a general idea of how the Funds return has varied from year-to-year.
This graph includes the effects of Fund expenses.
Year-by-Year Total Return for Class A Shares (%)
1988 1989 1990 1991 1992 1993 1994 1995* 1996 1997
30.04 27.28 30.81
Best Quarter: 2nd Quarter 1997 +17.24%
Worst Quarter: 4th Quarter 1997 -0.74%
*Since inception on 2/21/95 to 12/31/95.
Year to date total return through 9/30/98 is 5.52%
The next table lists the Funds average year-by-year return by class over the
past year and since inception (through 12/31/97). This table is intended to
provide you with some indication of the risks of investing in the Fund. At the
bottom of the table you can compare this performance with an index that tracks
investments similar to the Funds, the S&P 500 Index. The S&P 500 Index is an
unmanaged index tracking the performance 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 2/28/90 30.81 % N/A N/A 31.04%
S&P 500 33.36% N/A N/A _____%
Expenses
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
Shareholder Transaction Expenses Class Y
Maximum sales charge imposed on None
purchases (as a % of offering
price)
Maximum deferred sales charge None
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses*
Class Y 0.74% None 0.26% 1.00%
* From time to time, the Funds investment advisor may, at its discretion,
reduce or waive its fees or reimburse a Fund for certain of its expenses in
order to reduce expense ratios. The Funds investment advisor may cease these
reimbursements at any time. The annual operating expenses do not reflect fee
waivers and expense reimbursements. Including current fee waivers and expense
reimbursements, total operating fees for Class Y would be 0.93%.
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
After 1 year $102
After 3 years $318
After 5 years $552
After 10 years $1,225
<PAGE>
Tax Strategic Equity Fund
FUND FACTS:
GOAL:
Tax-efficient Long-term Capital Growth
Principal Investments:
Common Stocks
Class of Shares:
Class Y
Investment Advisor:
Evergreen Asset Management Corp.
Portfolio Manager:
Stephen A. Lieber
NASDAQ Symbol:
None
Dividend Payment Schedule:
Annually
Investment Goal
The Fund seeks long-term capital growth within a tax-efficient strategy.
Investment Strategy
The Fund invests at least 65% of assets in common stocks of companies with large
and medium market capitalizations (at least $1 billion). The Fund may also
invest up to 35% of its assets in (1) foreign securities, including foreign
securities represented by American Depositary Receipts, (2) common stocks of
companies with small market capitalizations (less than $1 billion), and (3)
interests in limited partnerships. The Fund uses investment techniques that
reduce the impact of taxes on shareholder returns. One of these techniques is to
buy stocks paying low or no dividends which reduces the taxable dividends the
Fund pays to shareholders. Another technique is to purchase securities the Fund
expects to hold for growth over the long-term. This practice decreases the Funds
portfolio turnover rate, which in turn lessens the taxable capital gain the Fund
pays to shareholders. A third technique, used when selling securities in the
portfolio, involves selling the securities with the highest cost basis in order
to minimize realized capital gain. This also lessens taxable distributions to
shareholders.
Each of the Evergreen Domestic Growth Funds may invest in high quality money
market instruments in response to adverse economic, political or market
conditions. This strategy is inconsistent with the Funds principal investment
strategy and its investment objective, and if employed could result in a lower
return and loss of market opportunity.
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
Foreign Investment Risk
Small Company Risk
<PAGE>
Performance
The return for Class Y shares since inception on 9/1/98 to 9/30/98 is 6.50%.
This figure includes the effects of fund expenses. Past performance is not an
indication of future results.
Expenses
This section describes the fees and expenses you would pay if you bought and
held shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
Shareholder Transaction Expenses Class Y
Maximum sales charge imposed on None
purchases (as a % of offering
price)
Maximum deferred sales charge None
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Annual Fund Operating Expenses (as a % of net asset value):
Management 12b-1 Other Total Fund
Fees Fees Expenses Operating Expenses*
Class Y 0.95% None 0.97% 1.92%
*Estimated for the fiscal year ending 9/30/99
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
After 1 year $195
After 3 years $603
After 5 years $1,037
After 10 years $2,243
<PAGE>
THE FUNDS INVESTMENT ADVISORS
Each investment advisor manages a Funds investments and supervises its daily
business affairs. There are three different investment advisors for the
Evergreen Domestic Growth Funds. 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 $234 billion in consolidated assets as
of September 30, 1998. First Union Corporation is located at 301 South College
Street, Charlotte, North Carolina 28288-0013.
Evergreen Asset Management Corporation (EAMC) is the investment advisor to
Evergreen Fund, Micro Cap Fund and Tax Strategic Equity Fund.
EAMC, with its predecessors, has served as investment advisor to the
Evergreen Funds since 1971, and currently manages over $10.7 billion in assets
for 19 of the Evergreen Funds. EAMC is located at 2500 Westchester Avenue,
Purchase, New York 10577.
Evergreen Investment Management Company (EIMC) is the investment advisor to
Omega Fund and Small Company Growth Fund.
EIMC has been managing money for over 50 years and currently manages over
$8.5 billion in assets for 26 of the Evergreen Funds. EIMC is located at 200
Berkeley Street, Boston, Massachusetts 02116-5034.
Evergreen Investment Management (EIM) is the investment advisor to
Aggressive Growth Fund.
EIM has been managing mutual funds and private accounts since 1932 and
currently manages over $32.9 billion in assets for 43 of the Evergreen Funds.
EIM is located at 201 South College Street, Charlotte, North Carolina
28288-0630.
Meridian Investment Company (MIC) is the investment advisor to Stock
Selector Fund.
MIC has been managing money for over 15 years and currently manages over
$2.5 billion in assets, including $512 million in assets for two of the
Evergreen Funds. MIC is located at 55 Valley Stream Parkway, Malvern,
Pennsylvania 19355.
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.
THE FUNDS PORTFOLIO MANAGERS
Evergreen Fund The day-to-day management of the Fund is handled by Stephen
A. Lieber, and Nola Maddox Falcone, C.F.A. Mr. Lieber is Chairman and Co-Chief
Executive Officer of EAMC. He was a founding partner of Lieber & Company, the
original sponsor of the Evergreen Funds, when it was established in 1969. He has
been with EAMC and its predecessor since 1971 and has been in the investment
management business since 1952. Ms. Falcone is President and Co-Chief Executive
Officer of EAMC. She joined Lieber and Company as Senior Portfolio Manager in
1974, and was a General Partner from January 1981 to June 1994.
Micro Cap Fund The day-to-day management of the Fund is handled by a
committee of portfolio managers and stock analysts including Stephen A. Lieber
and Edwin A. Miska. Mr. Lieber is Chairman and Co-Chief Executive Officer of
EAMC. He was a founding partner of Lieber & Company, the original sponsor of the
Evergreen Funds, when it was established in 1969. He has been with EAMC and its
predecessor since 1971 and has been in the investment management business since
1952. Mr. Miska has been an analyst with EAMC and its predecessor since 1989.
Aggressive Growth Fund The day-to-day management of the Fund is handled by
Harold J. Ireland, Jr. He is a Vice President of First Union National Bank and
has been associated with the bank since 1995. Prior to 1995, Mr. Ireland worked
for Palm Beach Capital Management, Inc. and managed the Funds predecessor, ABT
Emerging Growth Fund.
Omega Fund The day-to-day management of the Fund has been handled by
Maureen E. Cullinane since 1989. Ms. Cullinane is a Senior Vice President and
Senior Portfolio Manager of EIM and has over 20 years of investment experience.
Small Company Growth Fund The day-to-day management of the Fund has been
handled by J. Gary Craven, who joined EIMC in November 1996. Mr. Craven is a
Senior Vice President and Chief Investment Officer of EIMC, as well as Group
Leader for the small-cap equity group. Prior to joining EIMC, Mr. Craven was a
portfolio manager for 9 years at Invista Capital Management, Inc.
Stock Selector Fund The day-to-day management of the Fund is handled by
Joseph E. Stocke, CFA. Mr. Stocke joined MIC in 1983 as an Assistant Investment
Officer and since 1990 has been a Senior Investment Manager/Equities. Mr. Stocke
managed the Special Equity Fund and Core Equity Fund (the predecessor of
Evergreen Stock Selector Fund) of CoreFunds, Inc. from 1990 to July 1998.
Tax Strategic Equity Fund The day-to-day management of the Fund is handled
by Stephen A. Lieber. Mr. Lieber is Chairman and Co-Chief Executive Officer of
EAMC. He was a founding partner of Lieber & Company, the original sponsor of the
Evergreen Funds, when it was established in 1969. He has been with EAMC and its
predecessor since 1971 and has been in the investment management business since
1952.
Calculating The Share Price The value of one share of a Fund, also known as
the net asset value, or NAV, is calculated on each day the New York Stock
Exchange is open as of the time the Exchange closes (normally 4:00 p.m. Eastern
time). We calculate the share price for each share by adding up the total assets
of the Fund, subtracting all liabilities, then dividing the result 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 the amount you receive
for a Fund redemption is based on 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
When choosing an Evergreen Fund, you should:
Most importantly, read the prospectus to see if the Fund is suitable for you.
Consider talking 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
Funds 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 clients of an investment
advisor of an Evergreen Fund (or the advisors affiliate).
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
Method
By Mail or through an Investment Professional
Complete and sign the account application. Make the check payable to Evergreen
Funds.
Mail the application and your check to the address below:
Evergreen Service Company Overnight Address:
P.O. Box 2121 Evergreen Service Company
Boston, MA 02106-2121200 200 Berkeley St.
Boston, MA 02116
Or deliver them to your investment representative (provided he or she has a
broker/dealer arrangement with Evergreen Distributors, Inc.
Adding to an Account
Make your check payable to Evergreen Funds Write a note specifying: the Fund
name share class your account number the name(s) in which the account is
registered
Mail to the address to the left or deliver to your investment representative
By Phone
Call 1-800-343-2898 to set up an account number and get wiring instructions
(call before 12 noon if you want wired funds to be credited that day). Instruct
your bank to wire or transfer your purchase (they may charge a wiring fee).
Complete the account application and mail to:
Evergreen Service Company Overnight Address:
P.O. Box 2121 Evergreen Service Company
Boston, MA 02106-2121 200 Berkeley St.
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.
Call the Evergreen Express Line at 1-800-346-3858 24 hours a day or
1-800-343-2898 between 8 a.m. and 6 p.m. Eastern time, on any business day. If
your bank account is set up on file, you can request either: Federal Funds Wire
(offers immediate access to funds) or Electronic transfers through Automated
Clearing House, which avoids wiring fees. 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*. You can only exchange shares within the same class. There is no
sales charge or redemption fee when exchanging Funds within the Evergreen Funds
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 Investment Plan (SIP) You can transfer money automatically from
your bank account into your Fund on a monthly basis. Initial investment minimum
is $50 if you invest at least $25 per month with this service. To enroll, check
off the box on the account application and provide: your bank account
information the amount and date of your monthly investment To establish
automatic investing for an existing account, call 1-800-343-2898 for an
application. The minimum is $25 per month or $75 per quarter. You can also
establish an investing program through direct deposit from your paycheck. Call
1-800-343-2898 for details. 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 manager,
adversely affect the price of the Fund.
How To redeem Shares We offer you several convenient ways to sell your
shares in any of the Evergreen Funds: Methods
Call Us
Requirements
Call the Evergreen Express Line at 1-800-346-3858 24 hours a day or
1-800-343-2898 between 8 a.m. and 6 p.m. Eastern time, on any business day. This
service must be authorized ahead of time, and is only available for regular
accounts.* All authorized requests made 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 the proceeds 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 acting on telephone orders we 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
P.O. Box 2121
Boston, MA 02106-2121
Overnight Address:
Evergreen Service Company
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 exceptions 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 Shares in Person
You may also redeem your shares through participating broker-dealers by
delivering a letter as described above to your broker-dealer.
A fee may be charged for this service.
Systematic
Withdrawal
Plan (SWP)
You can transfer money automatically from your Fund account on a monthly or
quarterly basis without redemption fees.
The withdrawal can be mailed to you, or deposited directly to your bank
account. The minimum is $75 per month The maximum is 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 remaining amount in 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 fiduciary corporation or any other organization. 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
Other Services Evergreen Express Line Use our automated, 24-hour service to
check the value of your investment in a Fund; purchase, redeem or exchange Fund
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 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 deductions. The amounts deducted will be
invested in your Fund account using the Electronic Funds Transfer System. We
will provide the Fund 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 Fund 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 invested 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 funds You may be
taxed in two ways: On Fund distributions (capital gains and dividends) On any
profit you make when you sell any or all of your shares.
Fund Distributions
A mutual fund passes along to all of its shareholders the net 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 Domestic
Growth Fund is listed under the Funds Investment Strategy section in the summary
of each Fund previously presented.
Capital Gains. When a mutual fund sells a security it owns for a profit,
the result is a capital gain. Evergreen Domestic Growth 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
Funds share price to drop by the amount of the 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.
No interest will accrue on amounts represented by uncashed distribution or
redemption checks.
We will send you a statement each January with the federal tax status of
dividends and distributions paid by each Fund 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 tax
return unless the transaction entered into by a tax-deferred retirement plan
occurred in 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 tax return, 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 each calendar year on Form 1099
DIV. Proceeds from a sale are reported on Form 1099B. You must report these on
your tax return. 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 had 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 may be appropriate for you,
consult your tax advisor. 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.
Other Expenses Other expenses include 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 Funds price is calculated, and are expressed as a percentage of the
Funds net assets. The effect of these fees is reflected in the performance
results 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. Financial Highlights
This section looks in detail at the results for one Class Y share in each share
class of the Funds 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. Tables
for Evergreen Fund, Micro Cap Fund, Aggressive Growth Fund and Stock Selector
Fund have been audited by PricewaterhouseCoopers LLP, the Funds independent
accountants. Tables for Omega Fund, Small Company Growth Fund and Tax Strategic
Equity Fund have been audited by KPMG Peat Marwick LLP, those Funds 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.
[FINANCIAL HIGHLIGHTS TO BE INSERTED HERE]
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 Funds portfolio.
Although this is intended to 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 Funds 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.
<PAGE>
Notes
Evergreen Funds
Money Market
Treasury Money Market Fund
Money Market Fund
Municipal Money Market Fund
Pennsylvania Municipal Money Market Fund
Florida Municipal Money Market Fund
New Jersey 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
Tax Strategic Equity 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
HYPERLINK http://www.evergreenfunds.com www.evergreen-funds.com
Evergreen Express Line
Call 1-800-346-3858
24 hours a day to
check your account
order a statement
get a Funds current price, yield and total return
buy, redeem or exchange Fund shares
Non-retirement account holders
Call 1-800-343-2898
Each business day, 8 a.m. to 6 p.m. Eastern time to
buy, redeem or exchange shares
order applications
get assistance with your account
<PAGE>
Retirement plan account holders
Call 1-800-247-4075
Each business day, 8 a.m. to 6 p.m. Eastern time
Information Line for Hearing and Speech Impaired (TTY/TDD)
Call 1-800-343-2888
Each business day, 8 a.m. to 6 p.m. Eastern time
Write us a letter
Evergreen Service Company
P.O. Box 2121
Boston, MA 02106-2121
to buy, redeem or exchange shares
to change the registration on your account
for general correspondence
For express, registered or certified mail:
Evergreen Service Company
200 Berkeley Street
Boston, MA 02116-5039
Contact us on-line:
www.evergreen-funds.com
Regular communications you will receive:
Account Statements Youll receive quarterly statements for each fund you invest
in.
Confirmation Notices We send a confirmation of any transaction you make within
five days of the transaction. Annual and Semiannual reports Youll receive a
detailed financial report on each Fund you invest in twice a year.
Tax Forms Each January youll receive any Fund tax information you need to
include in your tax returns as well as the Evergreen Tax Information Guide.
Evergreen Events Youll receive a periodic newsletter published exclusively for
Evergreen Funds shareholders.
<PAGE>
For More Information About the Evergreen Domestic Growth 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 holdings as of a
specific date, as well as commentary from the Funds 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 any of the documents,
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
also 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 30
PAGE 27
<PAGE>
EVERGREEN EQUITY TRUST
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
EVERGREEN EQUITY TRUST
200 Berkeley Street
Boston, Massachusetts 02116
(800) 633-2700
DOMESTIC GROWTH FUNDS
STATEMENT OF ADDITIONAL INFORMATION
February 1, 1999
Evergreen Fund ("Evergreen")
Evergreen Micro Cap Fund ("Micro Cap")
Evergreen Aggressive Growth Fund ("Aggressive Growth")
Evergreen Omega Fund ("Omega")
Evergreen Small Company Growth Fund ("Small Company")
Evergreen Strategic Growth Fund ("Strategic Growth")
Evergreen Stock Selector Fund ("Stock Selector")
Evergreen Tax Strategic Equity Fund ("Tax Strategic")
(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 February 1, 1999 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 (other than
Stock Selector, which offers only Class A and Class B shares) and one offering
only Class Y shares of each Fund. You may obtain either of these prospectuses
without charge by calling (800)-343-2898.
Certain information may be incorporated by reference to the Funds Annual
Report dated September 30, 1998. You may obtain a copy of the Annual Report
without charge by calling (800)-343-2898.
TABLE OF CONTENTS
PART 1
TRUST HISTORY
INVESTMENT POLICIES
OTHER SECURITIES AND PRACTICES
PRINCIPAL HOLDERS OF FUND SHARES
EXPENSES
PERFORMANCE
COMPUTATION OF CLASS A OFFERING PRICE
SERVICE PROVIDERS
FINANCIAL STATEMENTS
PART 2
ADDITIONAL INFORMATION ON SECURITIES AND INVESTMENT PRACTICES
PURCHASE, REDEMPTION AND PRICING OF SHARES
SALES CHARGE WAIVERS AND REDUCTIONS
PERFORMANCE CALCULATIONS
PRINCIPAL UNDERWRITER
DISTRIBUTION EXPENSES UNDER RULE 12b-1
TAX INFORMATION
BROKERAGE
ORGANIZATION
INVESTMENT ADVISORY AGREEMENT
MANAGEMENT OF THE TRUST
CORPORATE AND MUNICIPAL BOND RATINGS
ADDITIONAL INFORMATION
PART 1
TRUST HISTORY
The Evergreen Equity Trust is an open-end management investment company, which
was organized as a Delaware business trust on September 18, 1997. 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
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 Funds' 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.
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.
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).
Further Explanation of Concentration Policy:.
Each Fund 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).
Issuing Senior Securities
Except as permitted under the 1940 Act, each Fund may not issue senior
securities.
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 and enter into reverse repurchase agreements 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 purchase additional
securities so long as borrowings do not exceed 5% of its total assets. 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.
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.
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.
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.
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.
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 the following sections under
"Additional Information on Securities and Investment Practices" in Part 2 of
this SAI:
Defensive Investments
U.S. Government Securities
When-Issued, Delayed-Delivery and Forward Commitment Transactions Repurchase
Agreements Reverse Repurchase Agreements Options Futures Transactions "Margin"
in Futures Transactions Foreign Securities (not applicable to Evergreen, Micro
Cap or Aggressive Growth) Foreign Currency Transactions (not applicable to Micro
Cap or Aggressive Growth) Illiquid and Restricted Securities Investment in Other
Investment Companies Short Sales
PRINCIPAL HOLDERS OF FUND SHARES
As of October 30, 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 October 30, 1998.
Evergreen Class A
None
Evergreen Class B
None
Evergreen Class C
Turtle & Co 7.907%
P.O. Box 9427
Boston, Ma 02209-9427
MLPF&S For The Sole Benefit 5.997%
Of its Customers
Attn: Fund Administration
#97JB1
4800 Deer Lake DR E 2ND Fl Jacksonville, FL 32246- 6484 Evergreen Class
Y
First Union National 25.854%
Bank/EB /INT
Reinvest Account
Attn: Trust Operations
Fund Group 401 S. Tryon
St.
3rd FL CMG 1151
Charlotte, NC
First Union National 10.078%
Bank/EB/INT
Cash Account
Attn: Trust Operations
Fund Group
401 S. Tryon St. 3rd Fl
CMG 1151
Charlotte, NC 28202-1911
Micro Class A
Charles Schwab & Co Inc. 5.662%
Special Custody Account
FBO Exclusive Benefit Of
Customers
101 Montgomery St
San Francisco, CA 94104-
4122
First Union Brokerage 5.190
Services
Vince Vitti And A/C 8592-
6379
Susan Vitti JTWROS LN Acct
Attn: Bob Lemaire
266 Harristown Rd 3rd FL
NJ 07452
Micro Class B
MLPF&S For The Sole Benefit 5.433%
Of Its Customers Attn:
Fund Administration #97H76
4800 Deer Lake Dr. E 2nd
FL
Jacksonville, FL 32246-
Micro Class C
MLPF&S For The Sole Benefit 5.098
of Its Customers Attn:
Fund Administration #97JA4
4800 Deer Lake Dr E 2nd FL
32246-6484
Charles Schwab & Co, Inc 8.906%
Special Custody Account
FBO Exclusive Benefit Of
Customers
101 Montgomery St
San Francisco, CA 94104-
4122
Constance E. Lieber 8.733%
1210 Greacen Point Rd
Mamaroneck, NY 10543-4613
Citibank NA 7.754%
Delta Airlines Master Trust
308235
Joe Villella Citicorp
Services
Citibank Center Tampa
Tampa, FL 33610
AETNA Life Insurance & 5.612
Annuity
Central Valuation Unit
Attn: Jackie Johnson-
Conveyor TS 31
Hartford, CT 06156-0001
Aggressive Growth Class A
MLPF&S For The Sole Benefit 10.368%
Of Its Customers Attn:
Fund Administration #97212
4800 Deer Lake Dr E 2nd FL
Jacksonville, FL 32246-
6484
Aggressive Growth Class B
None
Aggressive Growth Class C
MLPF&S For The Sole Benefit 20.966%
Of Its Customers
Attn: Fund Administration
#97JA1
4800 Deer Lake Dr. E 2nd FL
Jacksonville, FL 32246-
6484
Lavedna Ellingson Douglas 9.678% Ellingson JT WROS 8510 McClintock
Tempe, AZ 85284-2527
Salomon Smith Barney Inc 5.846%
00180063322
333 West 34th St. 3rd FL
New York, NY 10001
Aggressive Growth Class Y
First Union National Bank 52.894%
Trust Accounts
Attn: Ginny Batten
11th FL CMG 1151
301 S. Tryon St
Charlotte, NC 28202-1910
First Union National Bank 27.200%
Trust Accounts
Attn: Ginny Batten
11th FL CMG-1151
301 S. Tryon St
Charlotte, NC 28202-1910
Omega Class A
None
Omega Class B
MLPF&S For The Sole Benefit 6.985%
Of Its Customers
Attn: Fund Administration
#97BP1
4800 Deer Lake DR E 2nd FL
Jacksonville, FL 32246-
6484
Omega Class C
MLPF&S For The Sole Benefit 25.777%
Of its Customers Attn:
Fund Administration #97BP5
4800 Deer Lake DR E 2nd FL
Jacksonville, FL 32246-
6484
Omega Class Y
First Union National Bank 61.314%
Re-invest Account Attn:
Trust Operations Fund
Group, 401 S. tryon St 3rd
FL
Charlotte, NC 28202-1911
First Union National Bank 16.586
Cash Account
Attn: Trust Operations
Fund Group
1525 West Harris BLVD
Charlotte, NC 28262
Small Company Growth Class A
ROFE & Co c/o State Street 6.346%
Bank & Trust Co. For Sub
Account Kokusai Securities
Co LTD P.O Box 5061
Boston, Ma 02216-5061
Small Company Growth Class B
MLPF&S For The Sole Benefit 20.539
Of Its Customers Attn:
Fund Administration #98302
4800 Deer Lake Dr. E 2nd FL
Small Company Growth Class C
MLPF&S For The Sole Benefit 50.302%
Of Its Customers Attn:
Fund Administration #97TUO
4800 Deer Lake DR E 2nd FL
Jacksonville, FL 32246-
6484
JC Bradford & Co. Cust FBO 9.249%
Consolidated Investors 330
Commerce St
Nashville, TN 37201-1809
State Street Bank & Trust 6.678%
Co Cust Rollover IRA FBO
Mark Loveland 2701
Westheimer RD #12H Houston
TX 77098-1238
Small Company Growth Class Y
First Union National Bank 70.182%
Cash Account Attn: Trust
Operation Fund Group 401 S,
Tryon St 3rd FL
Charlotte, NC 28202-1911
Sheldon Tischenkel 10.215%
269-26G Grand Central Pkwy
Floral Park, NY 11005-1010
First Union National Bank 8.679%
Corestates Transfer Account
Attn: Mike Hodan/Trust
Operations 1525 West WT
Harris Blvd Charlotte, NC
28288-1076
State Street Bank And Trust 5.746%
Co Cust IRA FBO Sheldon
Tischenkel 269-26G
Grand Central Pkwy Floral
Park, NY 11005-1010
Strategic Growth Class A
None
Strategic Growth Class B
None
Strategic Growth Class C
State Street Bank And Trust 14.513%
Co. Cust Edward W. Sparrow
Hosp TSA FBO Dennis Allen
Swan 3741 Chippendale
Okemos, MI 48864-3861
Robert L. Coney Joyce M 6.269% Coney TTEES Coney LIV Trust U/A DTD
12/5/95 831 Hidden Lakes Drive Martinez, CA 94553-5458
Douglas M. Ellingson 6.067%
1833 East Carver St
Tempe, AZ 85284-2509
Raymond James & Assoc Inc, 5.892%
CSDN. ZSOLT H B Koppanyi
IRA
6560 Mallard DR
Midland, GA 31820
5.609%
Bear Stearns Securities
Corp
FBO 650-24848-16
1 Metrotech Center North
Brooklyn, NY 11201-3859
NFSC FEBO #A7D-127337 5.050%
NFSC/FMTC IRA Rollover FBO
Lawrence P. Webster 2864
St. Ann Drive Green Bay, WI
54311
Stock Selector Class A
None
Stock Selector Class B
State Street Bank And Trust 10.490%
Co
ABC Unified School Dist TSA
FBO Barbara J. Guarnieri
16561 Rhone Lane
Huntington Beach, CA 92647-
4622
First Union Brokerage 10.302%
Services
James M. Connor Jr. UTMA
A/C 2086-3860 70 Brandywine
Street
Chadds Ford, PA 19317
Peter Grumblatt 9.810%
Lisa M. Young JTTEN
1302 Village Green Dr.
Gilbertsville, PA 19525-
9593
First Union Brokerage 7.440%
Services
Diane Digisi Viser
A/C 8591-4601
305 Inverness Road
Clinton, NC 28328
Stock Selector Class C
None
Stock Selector Class Y
Patterson & Co PNB Personal 36.068%
Trust Acct G P.O. Box 7829
Philadelphia, PA 19101-
7829
First Union National Bank 35.244%
Corestates Transfer Account
Attn: Mike Hodan/Trust
Operations
1525 West WT Harris Blvd
Charlotte, NC 28288-1076
First Union National Bank 19.108%
Reinvest Acct Attn: Trust
Operation FD GRP
401 S. Tryon St. 3rd FL CMG
1151
Charlotte, NC 28202-1911
Tax Strategic Equity Class A
Kent C MC Gowan 50.148%
18424 12th Ave W
Lynnwood, WA 98037-4900
First Union Brokerage 25.038%
Services
Elizabeth M. Burleson and
A/C 1902-9201
348 Hackberry Dr.
New Castle, DE 19720
State Street Bank And Trust 24.356%
Co Cust SEP IRA FBO Steve
Fredrickson
497 N Capital Ave #200
Idaho Falls, ID 83402-3630
Tax Strategic Equity Class Y
Stephen Lieber 29.206
1210 Greacen Point RD
Mamaroneck, NY 10543-4613
L. Charles Hilton Jr 26.993%
Lela G. Hilton JTWROS
4116 North Highway 231
Panama City, FL 32404
Samuel A. Lieber TTEE 14.603%
Janice Ruth Lieber Trust
U/A/D 2-22 1995
1210 Greacen Point RD
Mamaroneck, NY 10543-4613
Nola Maddox Falcone 14.444%
70 Drake Road
70 Drake Road
Scarsdale, NY 10583-6447
EXPENSES
Advisory Fees
Each Fund has its own investment advisor. For more information, see "Investment
Advisory Agreements" in Part 2 of this SAI.
Evergreen Asset Management Corp. ("EAMC") is the investment advisor to Evergreen
and Micro Cap. Lieber & Company acts as subadvisor 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 Fee
Assets
first $750 million 1.00%
next $250 million 0.90%
over $1 billion 0.80%
EAMC is also the investment advisor to Tax Strategic Equity. EAMC is entitled to
receive from Tax Strategic an annual fee equal to 0.95% of the average daily net
assets of the Fund. Lieber & Company acts as sub-advisor to the Fund, and is
reimbursed by EAMC for the costs of providing sub-advisory services. Evergreen
Investment Management ("EIM"), formerly the Capital Management Group of First
Union National Bank, is the investment advisor to Aggressive Growth. EIM is
entitled to receive from Aggressive Growth an annual fee equal to 0.60% of the
average daily net assets of the Fund.
Evergreen Investment Management Company ("EIMC"), formerly Keystone Investment
Management Company, is the investment advisor to Omega. EIMC is entitled to
receive from Omega an annual fee based on the Fund's average daily net assets,
as follows:
Average Daily Net Fee
Assets
first $250 million 0.75%
next $250 million 0.675%
next $500 million 0.60%
over $1 billion 0.50%
EIMC is also the investment advisor to Small Company and Strategic Growth. EIMC
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 Fee
Assets
first $100 0.70%
million
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%
next $500 million 0.40%
over $1.5 billion 0.35%
Meridian Investment Company ("MIC") is the investment advisor to Stock Selector.
MIC is entitled to receive from Stock Selector an annual fee equal to 0.74% of
the average daily net assets of the Fund.
Advisory Fees Paid
Below are the advisory fees paid by each Fund for the last three fiscal periods.
Fund/Fiscal Year or Period Advisory Fee Waiver
Year or Period Ended 1998
Evergreen (Year ended 9/30/98) $17,536,054 -0-
Micro Cap (Year ended 9/30/98) $615, 473 -0-
Aggressive Growth (Year ended $1,390,081 -0-
9/30/98)
Omega (Year ended 9/30/98) $2,214,127 -0-
Small Company (Year ended 9/30/98) $6,367,129 -0-
Strategic Growth (Year ended $4,870,007 -0-
9/30/98)
Stock Selector (Three months ended $968,973 $85,492
9/30/98)
Stock Selector (Year ended $3,459,000 -0-
6/30/98)
Tax Strategic (One month ended $2,079 $2,079
9/30/98)
Year or Period Ended 1997
Evergreen (Year ended 9/30/97) $13,089,112 -0-
Micro Cap (Year ended 9/30/97) $428,047 -0-
Aggressive Growth (Year ended $1,013,344 -0-
9/30/97)
Omega (Nine months ended 9/30/97) $1,480,178 -0-
Small Company (Four months ended $2, 387, 425 -0-
9/30/97)
Small Company (Year ended 5/31/97) $7,788,033 -0-
Strategic Growth (Eleven months $3,205,753 -0-
ended 9/30/97)
Stock Selector (Year Ended $3,459,108 -0-
6/30/97)
Tax Strategic (N/A) N/A N/A
Year or Period Ended 1996
Evergreen (Year ended 9/30/96) $9,145,287 $9,740
Micro Cap (Year ended 9/30/96) $510,421 -0-
Aggressive Growth (Year ended $612,492 -0-
(9/30/96)
Omega (Year ended 12/31/96) $1,831,142 -0-
Small Company (Year ended 5/31/96) $8,473,139 -0-
Strategic Growth (Year ended $2,994,500 -0-
10/31/96)
Stock Selector (Year Ended $1,973, 776 -0-
6/30/96)
Tax Strategic (N/A) N/A N/A
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 years
or periods. For more information regarding brokerage commissions, see
"Brokerage" in Part 2 of this SAI.
Fund/Fiscal Year or Period
Total Total Paid to
Paid to Lieber
All
Brokers
Year or Period Ended 1998
Evergreen (Year ended 9/30/98) $507,457 $405,182
Micro Cap (Year ended 9/30/98) $96,323 $56,631
Aggressive Growth (Year ended $127,761 N/A
9/30/98)
Omega (Year ended 9/30/98) $512,446 N/A
Small Company (Year ended $2,527,6 N/A
9/30/98) 07
Strategic Growth (Year ended $162,350 N/A
9/30/98)
Stock Selector (Three months $840,644 N/A
ended 9/30/98)
Stock Selector (Year ended $81,289 N/A
6/30/98)
Tax Strategic (One month ended $5,853 $5,653
9/30/98)
Year or Period Ended 1997
Evergreen (Year ended 9/30/97) $503,276 $416,953
Micro Cap (Year ended 9/30/97) $91,568 $61,717
Aggressive Growth (Year ended $677,860 N/A
9/30/97)
Omega (Nine months ended $403,294 N/A
9/30/97)
Small Company (Year ended $1,891,3 N/A
5/31/97) 97
Strategic Growth (Eleven months $1,144,0 N/A
ended 9/30/97) 65
Stock Selector (Year ended $1,026,4 N/A
6/30/97) 35
Tax Strategic (N/A) N/A N/A
Year or Period Ended 1996
Evergreen (Year ended 9/30/96) $590,105 $515,522
Micro Cap (Year ended 9/30/96) $317,058 $153,596
Aggressive Growth (Year ended $119,584 N/A
9/30/96)
Omega (Year ended 12/31/96) $829,479 N/A
Small Company (Year ended $2,853,9 N/A
5/31/96) 50
Strategic Growth (Year ended $1,990,2 N/A
10/31/96) 08
Stock Selector (Year ended $1,422,9 N/A
6/30/96) 84
Tax Strategic (N/A) N/A N/A
Percentage of Brokerage Commissions Paid to Lieber & Company
The table below shows, for the fiscal year or period ended September 30, 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. For more information, see "Selection of Brokers" under "Brokerage" in
Part 2 of this SAI.
Fund Percentage of Percentage of
Commissions to Commissionable
Lieber & Transactions
Company through Lieber
& Company
Evergreen 79.85% 72.97%
Micro Cap 58.80% 51.98%
Tax Strategic 96.58% 94.74%
Underwriting Commissions
Below are the underwriting commissions paid by each Fund and the amounts
retained by the principal underwriter for the last three fiscal years or
periods. For more information, see "Principal Underwriter" in Part 2 of this
SAI.
Fund/Fiscal Year or Period Total Underwriting
Underwriting Commissions
Commissions Retained
Year or Period Ended 1998
Evergreen (Year ended 9/30/98) $10, $233, 260
689,087
Micro Cap (Year ended 9/30/98) $331, 040 $10,258
ggressive Growth (Year ended $414,138 $19,289
9/30/98)
Omega (Year ended 9/30/98) $790,103 $25,765
Small Company (Year ended $958,402 $2,569
9/30/98)
Strategic Growth (Year ended $833,936 $12,462
9/30/98)
Stock Selector (Three months $5,836 $324
ended 9/30/98)
Tax Strategic (One month ended $477 $52
9/30/98)
Year or Period Ended 1997
Evergreen (Year ended 9/30/97) $1,464,361 $129,417
Micro Cap (Year ended 9/30/97) $2,223 $300
Aggressive Growth (Year ended $278,145 $21,472
9/30/97)
Omega (Nine months ended $254,113 $19,806
9/30/97)
Small Company (Four months $878,274 $22,796
ended 9/30/97)
Small Company (Year ended $17,885,60 $13,187,8
5/31/97) 4 54
$646,769 $14,708
Strategic Growth (Eleven months
ended 9/30/97)
Stock Selector (Year ended $96,837 $4,819
6/30/97)
Tax Strategic (N/A) N/A N/A
Year or Period Ended 1996
Evergreen (Year ended 9/30/96) $1,462,012 $157,233
Micro Cap (Year ended 9/30/96) $2,963 $188
Aggressive Growth (Year ended $185,835 $22,742
9/30/96)
Omega (Year ended 12/31/96) $983,621 $759,394
Small Company (Year ended $15,690,81 ($5,933,719)
5/31/96) 2
Strategic Growth (Year ended $4,093,912 $2,049,519
10/31/96)
Stock Selector (Year ended
6/30/96) $12,612 $1,710
Tax Strategic (N/A) N/A N/A
12b-1 Fees
Below are the 12b-1 fees paid by each Fund for the fiscal year or period ended
September 30, 1998. For more information, see "Distribution Expenses Under Rule
12b-1" in Part 2 of this SAI.
Class A Class B Class C
Fund
Distrib Service Distribu Service Distrib Service
ution Fees tion Fees ution Fees
Fees Fees Fees
Evergreen -0- $487,965 $4,642,4 $1,547,4 $89,549 $29,850
18 73
Micro Cap -0- $11,483 $29,627 $9,876 $21,463 $7,154
Aggressive -0- $386,073 $294,671 $98,224 $25,519 $8,506
Growth
Omega -0- $369,456 $878,159 292, 789 $117,48 $39,162
5
Small
Company -0- $1,539,5 $2,776,3 $1,267,9 $26,071 $8,690
02 45 15
Strategic -0- $1,356,2 $1,239,5 $720,005 $1,151 $384
Growth 93 80
Stock -0- $11,597 $671 $224 -0- -0-
Selector
Tax -0- $1 -0- -0- -0- -0-
Strategic
Trustee Compensation
Listed below is the Trustee compensation paid by the Trust individually and by
the Trust and the eight other trusts in the Evergreen Fund Complex for the
twelve months ended September 30, 1998. The Trustees do not receive pension or
retirement benefits from the Funds. For more information, see "Management of the
Trust" in Part 2 of this SAI.
Trustee Aggregate Total
Compensation Compensation
from Trust from Trust and
Fund Complex
Paid to
Trustees**
$27,177 $73,450
Laurence B.
Ashkin
$23,723 $65,450
Charles A.
Austin, III
$23,091 $63,575
K. Dun Gifford
$35,759 $99,425
James S. Howell
$23,091 $63,575
Leroy Keith Jr.
$28,937 $79,200
Gerald M.
McDonnell
$31,955 $88,275
Thomas L.
McVerry
$26,529 $72,325
William Walt
Pettit
$22,878 $62,950
David M.
Richardson
$29,569 $81,625
Russell A.
Salton, III
$29,771 $81,924
Michael S.
Scofield
$25,585 $70,150
Richard J.
Shima
Robert J. $9,702 $28,437
Jeffries*
Foster Bam* $16,951 $42,950
*Former Trustee; retired as of December 31, 1997. **Certain Trustees have
elected to defer all or part of their total compensation for the twelve months
ended September 30, 1998. The amounts listed below will be payable in later
years to the respective Trustees:
Austin $8,512
McVerry $88,275
Howell $76,119
Salton $81,625
Petit $72,325
McDonnell $79,200
Scofield $11,740
PERFORMANCE
Total Return
Below are the annual total returns for each class of shares of the Funds
(including applicable sales charges) as of September 30, 1998. For more
information, see "Total Return" under "Performance Calculations" in Part 2 of
this SAI.
Fund/Class
One Year Five Years Ten Years Inception
or Since Date
Inception
Evergreen
Class A -10.07% N/A 17.76% 1/3/95
Class B -10.77 N/A 17.99% 1/3/95
Class C -7.11% N/A 18.49% 1/3/95
Class Y -5.25% 15.15% 12.25% 10/15/71
Micro Cap
Class A -25.22% N/A 7.43% 1/3/95
Class B -25.76% N/A 7.38% 1/3/95
Class C -22.79% N/A 8.06% 1/3/95
Class Y -21.28% 4.85% 12.39% 6/1/83
Aggressive Growth
Class A -10.40% 9.04% 15.75% 4/15/83
Class B -11.30% N/A 10.61% 7/7/95
Class C -7.76% N/A 10.27% 8/3/95
Class Y -5.43% N/A 12.54% 7/11/95
Omega
Class A -0.53% 11.24% 16.08% 4/29/68
Class B -1.04% 11.07% 13.19% 8/2/93
Class C 2.80% 11.37% 13.34% 8/2/93
Class Y 4.67% N/A 13.44% 1/13/97
Small Company
Class A N/A N/A -29.70% 1/20/98
Class B -36.92% 1.50% 11.96% 9/11/35
Class C N/A N/A -27.00% 1/26/98
Class Y N/A N/A -25.74% 1/26/98
Strategic Growth
Class A N/A N/A 0.99% 1/20/98
Class B -0.67 13.50% 14.84% 9/11/35
Class C N/A N/A 3.11% 1/22/98
Stock Selector
Class A -15.23% 13.78% 14.42% 2/28/90
Class B N/A N/A -20.97% 11/7/97
Class Y -11.52% N/A 20.01% 2/21/95
Tax Strategic
Class A N/A N/A 0.38 9/4/98
Class B N/A N/A N/A N/A
Class C N/A N/A N/A N/A
Class Y N/A N/A 6.50% 9/1/98
COMPUTATION OF CLASS A OFFERING PRICE
Class A shares are sold at the NAV plus a sales charge. Below is an example of
the method of computing the offering price of Class A shares of each Fund. The
example assumes a purchase of Class A shares of each Fund aggregating less than
$100,000 based upon the NAV of each Fund's Class A shares at the end of each
Fund's latest fiscal period. For more information, see "Purchase, Redemption and
Pricing of Shares."
Fund Date Net Per Offering
Asset Share Price
Value Sales Per
Charge Share
Evergreen 9/30/96 $21.11 4.75% $22.16
Micro Cap 9/30/96 $19.88 4.75% $20.87
Aggressive 9/30/96 $21.26 4.75% $22.32
Growth
Omega 9/30/96 $21.50 4.75% $22.57
Small 9/30/96 $5.72 4.75% $6.01
Company
Strategic 9/30/96 $9.67 4.75% $10.15
Growth
Stock 9/30/96 $18.34 4.75% $19.25
Selector
Tax 9/30/96 $10.65 4.75% $11.18
Strategic
.
SERVICE PROVIDERS
Administrator
Evergreen Investment Services, Inc. ("EIS") serves as administrator for
Aggressive Growth and Tax Strategic, 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 for which EIS serves as administrator and a First
Union Corporation subsidiary serves as investment advisor. The fee paid to EIS
is calculated in accordance with the following schedule:
Assets Fee
first $7 0.050%
billion
next $3 0.035%
billion
next $5 0.030%
billion
next $10 0.020%
billion
next $5 0.015%
billion
over $30 0.010%
billion
EIS also provides facilities, equipment and personnel to Evergreen, Micro Cap,
Omega, Small Company and Strategic Growth on behalf of the investment advisor.
Omega, Small Company and Strategic Growth reimburse EIS for providing such
services.
Transfer Agent
Evergreen Service Company ("ESC"), a subsidiary of First Union Corporation, is
the Fund's transfer agent. ESC issues and redeems shares, pays dividends and
performs other duties in connection with the maintenance of shareholder
accounts. The transfer agent's address is P.O. Box 2121, Boston, Massachusetts
02106- 2121. The Fund pays ESC a fee of $10.00 when a new account is
established, plus annual fees as follows:
Fund Type Annual Annual
Fee Per Fee Per
Open Closed
Account Account
Monthly $26.50 $9.00
Dividend Funds
Quarterly $25.50 $9.00
Dividend Funds
Semiannual $24.50 $9.00
Dividend Funds
Annual $26.50 $9.00
Dividend Funds
Money Market $24.50 $9.00
Funds
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 Omega, Small Company, Strategic Growth and Tax
Strategic.
PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, New York
10036, audits the financial statements of Evergreen, Micro Cap, Aggressive
Growth and Stock Selector.
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.
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. Some of the information below
will not apply to the Fund in which you are interested. See the list under
"Other Securities and Practices" in Part 1 of this SAI to determine which of the
sections below are applicable.
Defensive Investments
The Fund may invest up to 100% of its assets in high quality money market
instruments, such as notes, certificates of deposit, commercial paper, banker's
acceptances, bank deposits or U.S. government securities if, in the opinion of
the investment advisor, market conditions warrant a temporary defensive
investment strategy. Evergreen Fund for Total Return may also invest in debt
securities and high grade preferred stocks for defensive purposes when its
investment advisor determines a temporary defensive strategy is warranted.
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:
Farm Credit System, including the National Bank for Cooperatives, Farm Credit
Banks and Banks for Cooperatives;
Farmers Home Administration;
Federal Home Loan Banks;
Federal Home Loan Mortgage Corporation;
Federal National Mortgage Association; and
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 certificate may also make 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 investment
advisor 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 investment advisor believes that
under the regular procedures normally in effect for custody of the Fund's
portfolio securities subject to repurchase agreements, 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
An option is a right to buy or sell a security for a specified price within a
limited time period. The option buyer pays the option seller (known as the
"writer") for the right to buy, which is a "call" option, or the right to sell,
which is a "put" option. Unless the option is terminated, the option seller must
then buy or sell the security at the agreed-upon price when asked to do so by
the option buyer.
The Fund may buy or sell put and call options on securities it holds or intends
to acquire, and may purchase put and call options for the purpose of offsetting
previously written put and call options of the same series. 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 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 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 investment 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 investment 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 investment 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.
"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 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.
Foreign Securities
The Fund may invest in foreign securities or U.S. securities traded in foreign
markets. In addition to securities issued by foreign companies, permissible
investments may also 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. The Fund
may also invest in Canadian commercial paper 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 the
possibility of adverse political and economic developments; imposition of
withholding taxes on interest or other income; seizure, nationalization, or
expropriation of foreign deposits; 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 investment 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.
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:
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.
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 bonds. 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.
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 "Corporate and Municipal Bond Ratings" below.
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
determining 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
A short sale is the sale of a security the Fund has borrowed. The Fund expects
to profit from a short sale by selling the borrowed security for more than the
cost of buying it to repay the lender. After a short sale is completed, the
value of the security sold short may rise. If that happens, the cost of buying
it to repay the lender may exceed the amount originally received for the sale by
the Fund.
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.
Municipal Bonds
The Fund may invest in municipal bonds of any state, territory or possession of
the United States ("U.S."), including the District of Columbia. The Fund may
also invest in municipal bonds of any political subdivision, agency or
instrumentality (e.g., counties, cities, towns, villages, districts,
authorities) of the U.S. or its possessions. Municipal bonds are debt
instruments issued by or for a state or local government to support its general
financial needs or to pay for special projects such as airports, bridges,
highways, public transit, schools, hospitals, housing and water and sewer works.
Municipal bonds may also may be issued to refinance public debt.
Municipal bonds are mainly divided between "general obligation" and "revenue"
bonds. General obligation bonds are backed by the full faith and credit of
governmental issuers with the power to tax. They are repaid from the issuer's
general revenues. Payment, however, may be dependent upon legislative approval
and may be subject bonds varies according to the law applicable to the issuer.
In contrast, revenue bonds are supported only by the revenues generated by the
project or facility.
The Fund may also invest in industrial development bonds. Such bonds are usually
revenue bonds issued to pay for facilities with a public purpose operated by
private corporations. The credit quality of industrial development bonds is
usually directly related to the credit standing of the owner or user of the
facilities. To qualify as a municipal bond, the interest paid on an industrial
development bond must qualify as fully exempt from federal income tax. However,
the interest paid on an industrial development bond may be subject to the
federal alternative minimum tax.
The yields on municipal bonds depend on such factors as market conditions, the
financial condition of the issuer and the issue's size, maturity date and
rating. Municipal bonds are rated by S&P, Moody's and Fitch. Such ratings,
however, are opinions, not absolute standards of quality. Municipal bonds with
the same maturity, interest rates and rating may have different yields, while
municipal bonds with the same maturity and interest rate, but different ratings,
may have the same yield. Once purchased by the Fund, a municipal bond may cease
to be rated or receive a new rating below the minimum required for purchase by
the Fund. Neither event would require the Fund to sell the bond, but the Fund's
investment advisor would consider such events in determining whether the Fund
should continue to hold it.
The ability of the Fund to achieve its investment objective depends upon the
continuing ability of issuers of municipal bonds to pay interest and principal
when due. Municipal bonds are subject to the provisions of bankruptcy,
insolvency and other laws affecting the rights and remedies of creditors. Such
laws extend the time for payment of principal and/or interest, and may otherwise
restrict the Fund's ability to enforce its rights in the event of default. Since
there is generally less information available on the financial condition of
municipal bond issuers compared to other domestic issuers of securities, the
Fund's investment advisor may lack sufficient knowledge of an issue's
weaknesses. Other influences, such as litigation, may also materially affect the
ability of an issuer to pay principal and interest when due. In addition, the
market for municipal bonds is often thin and can be temporarily affected by
large purchases and sales, including those by the Fund.
From time to time, Congress has considered restricting or eliminating the
federal income tax exemption for interest on municipal bonds. Such actions could
materially affect the availability of municipal bonds and the value of those
already owned by the Fund. If such legislation were passed, the Trust's Board of
Trustees may recommend changes in the Fund's investment objectives and policies
or dissolution of the Fund.
Virgin Islands, Guam and Puerto Rico
The Fund may invest in obligations of the governments of the Virgin Islands,
Guam and Puerto Rico to the extent such obligations are exempt from the income
or intangibles taxes, as applicable, of the state for which the Fund is named.
The Fund does not presently intend to invest more than (a) 5% of its net assets
in the obligations of each of the Virgin Islands and Guam or (b) 25% of its net
assets in the obligations of Puerto Rico. Accordingly, the Fund may be adversely
affected by local political and economic conditions and developments within the
Virgin Islands, Guam and Puerto Rico affecting the issuers of such obligations.
PURCHASE, REDEMPTION AND PRICING OF SHARES
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 up to 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.
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 or 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 EIM, EAMC, EIMC,
Meridian Investment Company, First International Advisors, Ltd., 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.
Contingent Deferred Sales Charge
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 Expenses Under Rule 12b-1,?
below). 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 AND REDUCTIONS
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%.
Your account, and therefore your rights of accumulation, can be linked to
immediate family members which includes father and mother, brothers and sisters,
and sons and daughters. The same rule applies with respect to individual
retirement plans. Please note, however, that retirement plans involving
employees stand alone and do not pass on rights of accumulation.
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");
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 the Distributor, 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;
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 ? 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 "By Exchange" under "How to Buy Shares" 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.
Automatic Reinvestment
As described in the prospectus, a shareholder may elect to receive dividends and
capital gains distributions in cash instead of shares. However, ESC will
automatically reinvest 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. When a
check is returned, the Fund will hold the check amount in a no-interest account
in the shareholder's name until the shareholder updates his or her address or
automatic reinvestment begins. Uncashed or returned redemption checks will also
be handled in the manner described above.
Calculation of Net Asset Value
The Fund calculates its Net Asset Value ("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 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.
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 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 Fund reserves
the right, in its sole discretion, to reject any order received. Under the
Underwriting Agreement, the Fund 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.
DISTRIBUTION EXPENSES UNDER RULE 12b-1
The Fund bears some of the costs of selling its Class A, Class B and, if
applicable, Class C shares, including certain advertising, marketing and
shareholder service expenses, pursuant to Rule 12b-1 of the 1940 Act.
These "12b-1 fees" or "distribution fees" are indirectly paid by the
shareholder, as shown by the Fund's expense table in the prospectus.
Under the Distribution Plans (each a "Plan," together, the "Plans") that the
Fund has adopted for its Class A, Class B and, if applicable, Class C Shares,
the Fund may incur expenses for distribution costs up to a maximum annual
percentage of the average daily net assets attributable to a class, as follows:
Class 0.75%
A *
Class 1.00%
B
Class 1.00%
C
*Currently limited to 0.25% or less. See the expense table in the prospectus of
the Fund in which you are interested.
Of the amounts above, each class may pay under its Plan a maximum service fee of
0.25% to compensate organizations, which may include the Fund's investment
advisor or its affiliates, for personal services provided to shareholders and
the maintenance of shareholder accounts. The Fund may not, during any fiscal
period, pay distribution or service fees greater than the amounts above.
Amounts paid under the Plans are used to compensate the Distributor pursuant to
Distribution Agreements (each an "Agreement;" together, the "Agreements") that
the Fund has entered into with respect to its Class A, Class B and, if
applicable, Class C shares. The compensation is based on a maximum annual
percentage of the average daily net assets attributable to a class, as follows:
Class 0.25%*
A
Class 1.00%
B
Class 1.00%
C
*May be lower. See the expense table in the prospectus of the Fund in which you
are interested.
The Agreements provide that the Distributor will use the distribution fees
received from the Fund for the following purposes:
(1) to compensate broker-dealers or other persons for distributing Fund shares;
(2) to compensate broker-dealers, depository institutions and other financial
intermediaries for providing administrative, accounting and other services with
respect to the Fund's shareholders; and
(3) to otherwise promote the sale of Fund shares.
The Agreements also provide that the Distributor may use distribution fees to
make interest and principal payments in respect of amounts that have been
financed to pay broker-dealers or other persons for distributing Fund shares.
The Distributor may assign its rights to receive compensation under the Plans to
secure such financings. FUNB or its affiliates may finance payments made by the
Distributor to compensate broker-dealers or other persons for distributing
shares of the Fund.
In the event the Fund acquires the assets of another mutual fund, compensation
paid to the Distributor under the Agreements may be paid by the Fund's
Distributor to the acquired fund's distributor or its predecessor.
Since the Distributor's compensation under the Agreements is not directly tied
to the expenses incurred by the Distributor, the compensation received by it
under the Agreements during any fiscal year may be more or less than its actual
expenses and may result in a profit to the Distributor. Distribution expenses
incurred by the Distributor in one fiscal year that exceed the compensation paid
to the Distributor for that year may be paid from distribution fees received
from the Fund in subsequent fiscal years.
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.
Under the Plans, the Treasurer of the Trust 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 investment advisor may from time to time from its own funds or such other
resources as may be permitted by rules of the Securities and Exchange Commission
("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 the 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 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.
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 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 more information about 12b-1
fees, see "Expenses" in the prospectus and "12b-1 Fees" under "Expenses" in Part
1 of this SAI.
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 Internal
Revenue Code of 1986, as amended (the "Code"). (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 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
Unless the Fund is a municipal bond fund, 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. Unless the
Fund is a municipal bond fund or U.S. Treasury money market fund, it 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. If the Fund is a municipal bond
fund or U.S. Treasury money market fund, none of its income will consist of
corporate dividends; therefore, none of its distributions will qualify for the
70% dividends-received deduction for corporations.
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 the 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 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.
Special Tax Information for Municipal Bond Fund Shareholders
The Fund expects that substantially all of its dividends will be "exempt
interest dividends," which should be treated as excludable from federal gross
income. In order to pay exempt interest dividends, at least 50% of the value of
the Fund's assets must consist of federally tax-exempt obligations at the close
of each quarter. An exempt interest dividend is any dividend or part thereof
(other than a capital gain dividend) paid by the Fund with respect to its net
federally excludable municipal obligation interest and designated as an exempt
interest dividend in a written notice mailed to each shareholder not later than
60 days after the close of its taxable year. The percentage of the total
dividends paid by the Fund with respect to any taxable year that qualifies as
exempt interest dividends will be the same for all shareholders of the Fund
receiving dividends with respect to such year. If a shareholder receives an
exempt interest dividend with respect to any share and such share has been held
for six months or less, any loss on the sale or exchange of such share will be
disallowed to the extent of the exempt interest dividend amount.
Any shareholder of the Fund who may be a "substantial user" of a facility
financed with an issue of tax-exempt obligations or a "related person" to such a
user should consult his tax advisor concerning his qualification to receive
exempt interest dividends should the Fund hold obligations financing such
facility.
Under regulations to be promulgated, to the extent attributable to interest paid
on certain private activity bonds, the Fund's exempt interest dividends, while
otherwise tax-exempt, will be treated as a tax preference item for alternative
minimum tax purposes. Corporate shareholders should also be aware that the
receipt of exempt interest dividends could subject them to alternative minimum
tax under the provisions of Section 56(g) of the Code (relating to "adjusted
current earnings").
Interest on indebtedness incurred or continued by shareholders to purchase or
carry shares of the Fund will not be deductible for federal income tax purposes
to the extent of the portion of the interest expense relating to exempt interest
dividends. Such portion is determined by multiplying the total amount of
interest paid or accrued on the indebtedness by a fraction, the numerator of
which is the exempt interest dividends received by a shareholder in his taxable
year and the denominator of which is the sum of the exempt interest dividends
and the taxable distributions out of the Fund's investment income and long-term
capital gains received by the shareholder.
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 than 12 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
Brokerage Commissions
If the Fund invests in equity securities, it expects to buy and sell them
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.
If the Fund invests in fixed income securities, it expects to buy and sell them
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 investment advisor seeks
brokers who can provide the most benefit to the Fund. When selecting a broker,
the investment advisor will primarily look for the best price at the lowest
commission, but in the context of the broker's:
ability to provide the best net financial result to the Fund; efficiency in
handling trades; ability to trade large blocks of securities; readiness to
handle difficult trades; financial strength and stability; and 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 the investment advisor do not replace, but
supplement, the services the investment advisor is required to deliver to the
Fund. It is impracticable for the investment 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, the investment 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 investment 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 the
investment advisor to engage in a simultaneous transaction, that is, buy or sell
the same security for more than one client. The investment 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.
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
On behalf of the Fund, the Trust has entered into an investment advisory
agreement with the Fund's investment advisor (the "Advisory Agreement"). Under
the Advisory Agreement, and subject to the supervision of the Trust's Board of
Trustees, the investment 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 investment 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
investment 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
above) (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 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 Agreement may be terminated, without
penalty, on 60 days' written 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.
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 Funds performance and its contractual arrangements with various
service providers. Each Trustee is paid a fee for his or her services. See
"Trustee Compensation" under "Expenses" in Part 1 of this SAI.
The Trust has an Executive Committee which consists of the Chairman of the
Board, James Howell, and Messrs. Scofield and Salton, each of whom is an
Independent Trustee. The Executive Committee recommends Trustees to fill
vacancies, prepares the agenda for Board meetings and acts on routine matters
between scheduled Board meetings.
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.
<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; and
(DOB: 2/2/28) President of Centrum Equities and Centrum Properties, Inc.
Charles A. Austin III Trustee Investment Counselor to Appleton Partners, Inc.; former
(DOB: 10/23/34) 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 Committee,
(DOB: 10/12/38) 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; and former
Chairman, Gifford, Drescher & Associates (environmental
consulting).
James S. Howell Chairman of the Board Former Chairman of the Distribution Foundation for the
(DOB: 8/13/24) of Trustees Carolinas; and former Vice President of Lance Inc. (food
manufacturing).
Leroy Keith, Jr. Trustee Chairman of the Board and Chief Executive Officer, Carson
(DOB: 2/14/39) 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. (steel
(DOB: 7/14/39) producer).
Thomas L. McVerry Trustee Former Vice President and Director of Rexham Corporation;
(DOB: 8/2/39) 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, DHR
(DOB: 9/14/41) 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.
Russell A. Salton, III MD Trustee Medical Director, U.S. Health Care/Aetna Health Services;
(DOB: 6/2/47) 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. (insurance
(DOB: 8/11/39) agency); Executive Consultant, Drake Beam Morin, Inc.
(executive out placement); 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 Treasurer Senior Vice President and Operations Executive, BISYS Fund
(DOB:8/30/58) Services.
Vice President and
Nimish S. Bhatt* Assistant Treasurer Vice President, Tax, BISYS Fund Services; former Assistant
(DOB: 6/6/63) Vice President, Evergreen Asset Management Corp./First
Union Bank; former Senior Tax Consulting/Acting
Manager, Investment Companies Group, Price Waterhouse
LLP, New York.
Bryan Haft* Vice President Team Leader, Fund Administration, BISYS Fund Services
(DOB: 1/23/65)
Senior Vice President and Assistant General Counsel, First
Michael H. Koonce Secretary Union Corporation; former Senior Vice President and General
(DOB: 4/20/60) Counsel, Colonial Management Associates, Inc.
</TABLE>
*Address: BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio 43219-8001
CORPORATE AND MUNICIPAL BOND RATINGS
The Fund relies on ratings provided by independent rating services to help
determine the credit quality of bonds and other obligations the 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.
If a security held by the Fund loses its rating or has its rating reduced after
the Fund has purchased it, the Fund is not required to sell or otherwise dispose
of the security, but may consider doing so.
Thee principal rating services, commonly used by the Fund and investors
generally, are S&P and Moody's. The 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
MOODY?S S&P FITCH Credit Quality
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/ CCC/CC/ CCC/CC/ In or Near Default
C C C
D DDD/DD/ In Default
D
CORPORATE BONDS
LONG-TERM RATINGS
Moody's Corporate 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.
Baa Bonds which are rated Baa are considered as mediumgrade 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 Corporate 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 highestrated 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 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. 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:
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
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 Corporate 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 credits 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 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 Corporate 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
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 Corporate 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:
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
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 Corporate 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 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.
MUNICIPAL BONDS
LONG-TERM RATINGS
Moody's Municipal Long-Term Bond Ratings
Aaa Bonds 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
edge." 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 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 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.
Baa Bonds 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 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 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 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 rated Ca represent obligations, which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C Bonds 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 B. 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 Municipal 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 highestrated 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 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 An obligation rated D is in payment default. The D rating category
is used when payments on an obligation are not made on the date due even if
the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period. The D rating also will be used
upon the filing of a bankruptcy petition or the taking of a similar action if
payments on an obligation are jeopardized.
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 Municipal 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 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 commitments 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. DD designates
lower recovery potential and D the lowest.
+ 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.
SHORT-TERM MUNICIPAL RATINGS
Moody's Municipal 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
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.
Moody's Municipal Short-Term Loan Ratings
MIG 1 This designation denotes best quality. There is strong
protection by established cash flows, superior liquidity support, or
demonstrated broad-based access to the market for refinancing.
MIG 2 This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.
MIG 3 This designation denotes favorable quality. Liquidity and cash
flow protection may be narrow and market access for refinancing is likely to
be less well established.
SG This designation denotes speculative quality. Debt instruments in
this category may lack margins of protection.
S&P Commercial Paper Ratings
A-1 This designation indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus sign (+) designation.
A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
A-3 Issues carrying this designation have an adequate capacity for
timely payment. They are, however, more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher designations.
B Issues rated B are regarded as having only speculative capacity
for timely payment.
C This rating is assigned to short-term debt obligations with a
doubtful capacity for payment.
D Debt rated D is in payment default. The D rating category is used
when interest payments of principal payments are not made on the date due,
even if the applicable grace period has not expired, unless S&P believes such
payments will be made during such grace period.
S&P Municipal Short-Term Obligation Ratings
SP-1 Strong capacity to pay principal and interest. An issue
determined to possess a very strong capacity to pay debt service is given a
plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.
SP-3 Speculative capacity to pay principal and interest.
Fitch Municipal 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 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.
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
(d)(5) Sub-advisory Agreement between Evergreen Asset Incorporated by reference to
Management Corp. and Lieber & Company Post-Effective Amendment No.9 to
Registrant's Registrant Statement
Filed on October 1, 1998
(d)(6) Form of Portfolio Management Agreement between Incorporated by reference to
sub-advisors to Evergreen Masters Fund and First Post-Effective Amendment No.9 to
Union National Bank Registrant's Registrant Statement
Filed on October 1, 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) Not applicable
(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 25th day of November, 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 25th day of November, 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
- ------- -------
(n) Financial Data Schedules
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 AGGRESSIVE GROWTH FUND CLASS A
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPT-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 134,332,397
<INVESTMENTS-AT-VALUE> 204,595,125
<RECEIVABLES> 844,274
<ASSETS-OTHER> 35,506
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 205,474,905
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 512,160
<TOTAL-LIABILITIES> 512,160
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 56,857,458
<SHARES-COMMON-STOCK> 6,480,639
<SHARES-COMMON-PRIOR> 7,031,081
<ACCUMULATED-NII-CURRENT> 230,381
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 12,002,095
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 68,686,543
<NET-ASSETS> 137,776,477
<DIVIDEND-INCOME> 237,423
<INTEREST-INCOME> 54,136
<OTHER-INCOME> 0
<EXPENSES-NET> (2,044,756)
<NET-INVESTMENT-INCOME> (1,753,197)
<REALIZED-GAINS-CURRENT> 14,010,430
<APPREC-INCREASE-CURRENT> (21,917,489)
<NET-CHANGE-FROM-OPS> (9,660,256)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (6,090,321)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,458,678
<NUMBER-OF-SHARES-REDEEMED> (2,644,186)
<SHARES-REINVESTED> 256,170
<NET-CHANGE-IN-ASSETS> (36,406,797)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (926,551)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2,046,430)
<AVERAGE-NET-ASSETS> 154,406,586
<PER-SHARE-NAV-BEGIN> 23.48
<PER-SHARE-NII> (0.25)
<PER-SHARE-GAIN-APPREC> (1.12)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (0.85)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 21.26
<EXPENSE-RATIO> 1.33
<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 AGGRESSIVE GROWTH FUND CLASS B
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPT-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 134,332,397
<INVESTMENTS-AT-VALUE> 204,595,125
<RECEIVABLES> 844,274
<ASSETS-OTHER> 35,506
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 205,474,905
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 512,160
<TOTAL-LIABILITIES> 512,160
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 32,655,158
<SHARES-COMMON-STOCK> 1,746,951
<SHARES-COMMON-PRIOR> 1,776,073
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (457,874)
<ACCUMULATED-NET-GAINS> 3,707,914
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 396,187
<NET-ASSETS> 36,301,385
<DIVIDEND-INCOME> 61,848
<INTEREST-INCOME> 14,193
<OTHER-INCOME> 0
<EXPENSES-NET> (814,762)
<NET-INVESTMENT-INCOME> (738,721)
<REALIZED-GAINS-CURRENT> 3,587,746
<APPREC-INCREASE-CURRENT> (5,576,071)
<NET-CHANGE-FROM-OPS> (2,727,046)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1,515,887)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 438,746
<NUMBER-OF-SHARES-REDEEMED> (537,072)
<SHARES-REINVESTED> 69,204
<NET-CHANGE-IN-ASSETS> (4,615,770)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (235,726)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (815,188)
<AVERAGE-NET-ASSETS> 39,282,878
<PER-SHARE-NAV-BEGIN> 23.18
<PER-SHARE-NII> (0.41)
<PER-SHARE-GAIN-APPREC> (1.14)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (0.85)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 20.78
<EXPENSE-RATIO> 2.08
<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 AGGRESSIVE GROWTH FUND CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEPT-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 134,332,397
<INVESTMENTS-AT-VALUE> 204,595,125
<RECEIVABLES> 844,274
<ASSETS-OTHER> 35,506
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 205,474,905
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 512,160
<TOTAL-LIABILITIES> 512,160
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,288,148
<SHARES-COMMON-STOCK> 123,875
<SHARES-COMMON-PRIOR> 172,372
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (35,415)
<ACCUMULATED-NET-GAINS> 321,436
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (3,694)
<NET-ASSETS> 2,570,475
<DIVIDEND-INCOME> 5,362
<INTEREST-INCOME> 1,191
<OTHER-INCOME> 0
<EXPENSES-NET> (70,540)
<NET-INVESTMENT-INCOME> (63,987)
<REALIZED-GAINS-CURRENT> 329,067
<APPREC-INCREASE-CURRENT> (482,735)
<NET-CHANGE-FROM-OPS> (217,655)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (134,112)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 257,084
<NUMBER-OF-SHARES-REDEEMED> (311,675)
<SHARES-REINVESTED> 6,094
<NET-CHANGE-IN-ASSETS> (1,461,549)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (20,407)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (70,577)
<AVERAGE-NET-ASSETS> 3,400,820
<PER-SHARE-NAV-BEGIN> 23.16
<PER-SHARE-NII> (0.41)
<PER-SHARE-GAIN-APPREC> (1.15)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (0.85)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 20.75
<EXPENSE-RATIO> 2.08
<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 AGGRESSIVE GROWTH FUND CLASS Y
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPT-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 134,332,397
<INVESTMENTS-AT-VALUE> 204,595,125
<RECEIVABLES> 844,274
<ASSETS-OTHER> 35,506
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 205,474,905
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 512,160
<TOTAL-LIABILITIES> 512,160
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22,998,719
<SHARES-COMMON-STOCK> 1,319,267
<SHARES-COMMON-PRIOR> 1,882,994
<ACCUMULATED-NII-CURRENT> 249,257
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,882,740
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,183,692
<NET-ASSETS> 28,314,408
<DIVIDEND-INCOME> 52,144
<INTEREST-INCOME> 11,697
<OTHER-INCOME> 0
<EXPENSES-NET> (371,317)
<NET-INVESTMENT-INCOME> (307,476)
<REALIZED-GAINS-CURRENT> 3,201,758
<APPREC-INCREASE-CURRENT> (4,905,963)
<NET-CHANGE-FROM-OPS> (2,011,681)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1,606,606)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 948,746
<NUMBER-OF-SHARES-REDEEMED> (1,556,481)
<SHARES-REINVESTED> 44,007
<NET-CHANGE-IN-ASSETS> (16,078,856)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (207,397)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (371,692)
<AVERAGE-NET-ASSETS> 34,562,032
<PER-SHARE-NAV-BEGIN> 23.57
<PER-SHARE-NII> (0.20)
<PER-SHARE-GAIN-APPREC> (1.06)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (0.85)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 21.46
<EXPENSE-RATIO> 1.08
<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 FUND CLASS A
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPT-30-1998
<PERIOD-START> SEPT-30-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 1,220,157,650
<INVESTMENTS-AT-VALUE> 1,890,946,248
<RECEIVABLES> 9,682,183
<ASSETS-OTHER> 82,049
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,900,710,480
<PAYABLE-FOR-SECURITIES> 1,058,303
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 52,322,159
<TOTAL-LIABILITIES> 53,380,462
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 153,307,202
<SHARES-COMMON-STOCK> 8,648,992
<SHARES-COMMON-PRIOR> 7,031,081
<ACCUMULATED-NII-CURRENT> 187,029
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (1,227,790)
<ACCUM-APPREC-OR-DEPREC> 30,323,619
<NET-ASSETS> 182,590,060
<DIVIDEND-INCOME> 1,415,726
<INTEREST-INCOME> 1,858,169
<OTHER-INCOME> 0
<EXPENSES-NET> (2,801,888)
<NET-INVESTMENT-INCOME> 472,007
<REALIZED-GAINS-CURRENT> 1,096,062
<APPREC-INCREASE-CURRENT> (12,983,321)
<NET-CHANGE-FROM-OPS> (11,415,252)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (756,350)
<DISTRIBUTIONS-OF-GAINS> (3,670,523)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 26,892,204
<NUMBER-OF-SHARES-REDEEMED> (25,471,595)
<SHARES-REINVESTED> 197,302
<NET-CHANGE-IN-ASSETS> 21,345,399
<ACCUMULATED-NII-PRIOR> 478,527
<ACCUMULATED-GAINS-PRIOR> 3,379,810
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (1,733,553)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2,801,888)
<AVERAGE-NET-ASSETS> 195,186,057
<PER-SHARE-NAV-BEGIN> 22.96
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> (1.31)
<PER-SHARE-DIVIDEND> (0.10)
<PER-SHARE-DISTRIBUTIONS> (0.50)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 21.11
<EXPENSE-RATIO> 1.44
<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 CLASS B
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPT-30-1998
<PERIOD-START> SEPT-30-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 1,220,157,650
<INVESTMENTS-AT-VALUE> 1,890,946,248
<RECEIVABLES> 9,682,183
<ASSETS-OTHER> 82,049
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,900,710,480
<PAYABLE-FOR-SECURITIES> 1,058,303
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 52,322,159
<TOTAL-LIABILITIES> 53,380,462
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 555,213,849
<SHARES-COMMON-STOCK> 29,947,478
<SHARES-COMMON-PRIOR> 22,182,031
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (4,087,798)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (4,601,259)
<ACCUM-APPREC-OR-DEPREC> 77,119,495
<NET-ASSETS> 623,644,287
<DIVIDEND-INCOME> 4,538,443
<INTEREST-INCOME> 5,897,039
<OTHER-INCOME> 0
<EXPENSES-NET> (13,542,946)
<NET-INVESTMENT-INCOME> (3,107,464)
<REALIZED-GAINS-CURRENT> 3,475,905
<APPREC-INCREASE-CURRENT> (41,173,571)
<NET-CHANGE-FROM-OPS> (40,805,130)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (11,529,535)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,537,318
<NUMBER-OF-SHARES-REDEEMED> (4,288,369)
<SHARES-REINVESTED> 516,498
<NET-CHANGE-IN-ASSETS> 130,879,989
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4,143,061
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (957,650)
<GROSS-ADVISORY-FEES> (5,509,554)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (13,542,946)
<AVERAGE-NET-ASSETS> 618,989,078
<PER-SHARE-NAV-BEGIN> 22.69
<PER-SHARE-NII> (0.12)
<PER-SHARE-GAIN-APPREC> (1.25)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (0.50)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 20.82
<EXPENSE-RATIO> 2.19
<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 CLASS C
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPT-30-1998
<PERIOD-START> SEPT-30-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 1,220,157,650
<INVESTMENTS-AT-VALUE> 1,890,946,248
<RECEIVABLES> 9,682,183
<ASSETS-OTHER> 82,049
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,900,710,480
<PAYABLE-FOR-SECURITIES> 1,058,303
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 52,322,159
<TOTAL-LIABILITIES> 53,380,462
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11,261,848
<SHARES-COMMON-STOCK> 607,099
<SHARES-COMMON-PRIOR> 392,275
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (81,503)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (83,258)
<ACCUM-APPREC-OR-DEPREC> 1,522,930
<NET-ASSETS> 12,620,017
<DIVIDEND-INCOME> 88,016
<INTEREST-INCOME> 113,869
<OTHER-INCOME> 0
<EXPENSES-NET> (261,404)
<NET-INVESTMENT-INCOME> (59,519)
<REALIZED-GAINS-CURRENT> 67,050
<APPREC-INCREASE-CURRENT> (794,230)
<NET-CHANGE-FROM-OPS> (786,700)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (199,185)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 311,900
<NUMBER-OF-SHARES-REDEEMED> (105,425)
<SHARES-REINVESTED> 8,349
<NET-CHANGE-IN-ASSETS> 4,071,101
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 76,081
<OVERDISTRIB-NII-PRIOR> (21,546)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (106,275)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (261,404)
<AVERAGE-NET-ASSETS> 11,939,929
<PER-SHARE-NAV-BEGIN> 22.66
<PER-SHARE-NII> (0.11)
<PER-SHARE-GAIN-APPREC> (1.26)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (0.50)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 20.79
<EXPENSE-RATIO> 2.19
<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 CLASS Y
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPT-30-1998
<PERIOD-START> SEPT-30-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 1,220,157,650
<INVESTMENTS-AT-VALUE> 1,890,946,248
<RECEIVABLES> 9,682,183
<ASSETS-OTHER> 82,049
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,900,710,480
<PAYABLE-FOR-SECURITIES> 1,058,303
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 52,322,159
<TOTAL-LIABILITIES> 53,380,462
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 448,555,313
<SHARES-COMMON-STOCK> 48,390,516
<SHARES-COMMON-PRIOR> 47,870,520
<ACCUMULATED-NII-CURRENT> 5,973,801
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 12,123,983
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 561,822,556
<NET-ASSETS> 1,028,475,653
<DIVIDEND-INCOME> 8,325,963
<INTEREST-INCOME> 10,899,628
<OTHER-INCOME> 0
<EXPENSES-NET> (13,581,251)
<NET-INVESTMENT-INCOME> 5,644,340
<REALIZED-GAINS-CURRENT> 6,441,720
<APPREC-INCREASE-CURRENT> (76,304,902)
<NET-CHANGE-FROM-OPS> (64,218,842)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (6,894,401)
<DISTRIBUTIONS-OF-GAINS> (23,699,502)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 77,736,786
<NUMBER-OF-SHARES-REDEEMED> (78,332,089)
<SHARES-REINVESTED> 1,115,299
<NET-CHANGE-IN-ASSETS> (87,062,866)
<ACCUMULATED-NII-PRIOR> 7,265,900
<ACCUMULATED-GAINS-PRIOR> 28,469,162
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (10,186,672)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (13,581,251)
<AVERAGE-NET-ASSETS> 1,147,141,639
<PER-SHARE-NAV-BEGIN> 23.07
<PER-SHARE-NII> 0.12
<PER-SHARE-GAIN-APPREC> (1.30)
<PER-SHARE-DIVIDEND> (0.14)
<PER-SHARE-DISTRIBUTIONS> (0.50)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 21.25
<EXPENSE-RATIO> 1.18
<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 MICRO CAP FUND CLASS A
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPT-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 48,577,126
<INVESTMENTS-AT-VALUE> 50,947,609
<RECEIVABLES> 574,093
<ASSETS-OTHER> 18,693
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 51,540,395
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 357,749
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,515,438
<SHARES-COMMON-STOCK> 238,535
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (8,937)
<ACCUMULATED-NET-GAINS> (111,687)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (653,377)
<NET-ASSETS> 4,741,437
<DIVIDEND-INCOME> 29,726
<INTEREST-INCOME> 1,788
<OTHER-INCOME> 0
<EXPENSES-NET> (75,390)
<NET-INVESTMENT-INCOME> (43,636)
<REALIZED-GAINS-CURRENT> (70,855)
<APPREC-INCREASE-CURRENT> (1,117,625)
<NET-CHANGE-FROM-OPS> (1,232,116)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (142,183)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 359,192
<NUMBER-OF-SHARES-REDEEMED> (217,436)
<SHARES-REINVESTED> 5,408
<NET-CHANGE-IN-ASSETS> 147,164
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (46,056)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (75,390)
<AVERAGE-NET-ASSETS> 4,593,605
<PER-SHARE-NAV-BEGIN> 26.68
<PER-SHARE-NII> (0.24)
<PER-SHARE-GAIN-APPREC> (5.17)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (1.39)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 19.88
<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> 102
<NAME> EVERGREEN MICRO CAP FUND CLASS B
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPT-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 48,577,126
<INVESTMENTS-AT-VALUE> 50,947,609
<RECEIVABLES> 574,093
<ASSETS-OTHER> 18,693
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 51,540,395
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 357,749
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,999,216
<SHARES-COMMON-STOCK> 219,404
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (47,791)
<ACCUMULATED-NET-GAINS> (116,480)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (599,296)
<NET-ASSETS> 4,235,649
<DIVIDEND-INCOME> 25,212
<INTEREST-INCOME> 1,543
<OTHER-INCOME> 0
<EXPENSES-NET> (93,995)
<NET-INVESTMENT-INCOME> (67,033)
<REALIZED-GAINS-CURRENT> (78,985)
<APPREC-INCREASE-CURRENT> (961,108)
<NET-CHANGE-FROM-OPS> (1,107,126)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (114,702)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 195,624
<NUMBER-OF-SHARES-REDEEMED> (46,210)
<SHARES-REINVESTED> 4,452
<NET-CHANGE-IN-ASSETS> 153,866
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (39,635)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (93,995)
<AVERAGE-NET-ASSETS> 3,950,297
<PER-SHARE-NAV-BEGIN> 26.14
<PER-SHARE-NII> (0.42)
<PER-SHARE-GAIN-APPREC> (5.02)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (1.39)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 19.31
<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 MICRO CAP FUND CLASS C
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPT-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 48,577,126
<INVESTMENTS-AT-VALUE> 50,947,609
<RECEIVABLES> 574,093
<ASSETS-OTHER> 18,693
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 51,540,395
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 357,749
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,090,069
<SHARES-COMMON-STOCK> 160,013
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (25,539)
<ACCUMULATED-NET-GAINS> (108,868)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (862,540)
<NET-ASSETS> 3,093,122
<DIVIDEND-INCOME> 18,214
<INTEREST-INCOME> 1,174
<OTHER-INCOME> 0
<EXPENSES-NET> (68,446)
<NET-INVESTMENT-INCOME> (48,908)
<REALIZED-GAINS-CURRENT> (52,082)
<APPREC-INCREASE-CURRENT> (696,269)
<NET-CHANGE-FROM-OPS> (797,259)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (57,650)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 219,122
<NUMBER-OF-SHARES-REDEEMED> (71,292)
<SHARES-REINVESTED> 2,222
<NET-CHANGE-IN-ASSETS> 150,052
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (28,735)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (68,446)
<AVERAGE-NET-ASSETS> 2,861,771
<PER-SHARE-NAV-BEGIN> 26.16
<PER-SHARE-NII> (0.43)
<PER-SHARE-GAIN-APPREC> (5.01)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (1.39)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 19.33
<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 MICRO CAP FUND CLASS Y
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPT-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 48,577,126
<INVESTMENTS-AT-VALUE> 50,947,609
<RECEIVABLES> 574,093
<ASSETS-OTHER> 18,693
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 51,540,395
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 357,749
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 33,069,621
<SHARES-COMMON-STOCK> 1,951,003
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 69,983
<ACCUMULATED-NET-GAINS> 1,487,138
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,485,696
<NET-ASSETS> 39,112,438
<DIVIDEND-INCOME> 328,584
<INTEREST-INCOME> 17,688
<OTHER-INCOME> 0
<EXPENSES-NET> (701,465)
<NET-INVESTMENT-INCOME> (352,561)
<REALIZED-GAINS-CURRENT> 1,479,251
<APPREC-INCREASE-CURRENT> (12,199,622)
<NET-CHANGE-FROM-OPS> (11,072,932)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (2,593,995)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 325,348
<NUMBER-OF-SHARES-REDEEMED> (335,562)
<SHARES-REINVESTED> 70,343
<NET-CHANGE-IN-ASSETS> 60,129
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (501,046)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (701,465)
<AVERAGE-NET-ASSETS> 50,142,269
<PER-SHARE-NAV-BEGIN> 26.83
<PER-SHARE-NII> (0.18)
<PER-SHARE-GAIN-APPREC> (5.21)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (1.39)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 20.05
<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> 101
<NAME> EVERGREEN OMEGA FUND CLASS A
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPTEMBER-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 244,554,856
<INVESTMENTS-AT-VALUE> 284,124,313
<RECEIVABLES> 4,086,797
<ASSETS-OTHER> 54,209
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 288,265,319
<PAYABLE-FOR-SECURITIES> 2,864,344
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 789,772
<TOTAL-LIABILITIES> 3,654,116
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 98,737,471
<SHARES-COMMON-STOCK> 7,266,503
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 2,044,564
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 23,439,173
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 31,998,643
<NET-ASSETS> 156,219,851
<DIVIDEND-INCOME> 1,118,454
<INTEREST-INCOME> 460,635
<OTHER-INCOME> 0
<EXPENSES-NET> (2,210,413)
<NET-INVESTMENT-INCOME> (631,322)
<REALIZED-GAINS-CURRENT> 26,541,491
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 25,910,169
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (14,940,773)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,365,259
<NUMBER-OF-SHARES-REDEEMED> (1,928,567)
<SHARES-REINVESTED> 652,599
<NET-CHANGE-IN-ASSETS> 12,069,227
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (1,233,981)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2,212,035)
<AVERAGE-NET-ASSETS> 167,185,229
<PER-SHARE-NAV-BEGIN> 22.69
<PER-SHARE-NII> (0.09)
<PER-SHARE-GAIN-APPREC> 1.03
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (2.13)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 21.50
<EXPENSE-RATIO> 1.32
<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 OMEGA FUND CLASS B
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPTEMBER-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 244,554,856
<INVESTMENTS-AT-VALUE> 284,124,313
<RECEIVABLES> 4,086,797
<ASSETS-OTHER> 54,209
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 288,265,319
<PAYABLE-FOR-SECURITIES> 2,864,344
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 789,772
<TOTAL-LIABILITIES> 3,654,116
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 99,508,797
<SHARES-COMMON-STOCK> 5,612,889
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (1,718,285)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,004,091
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,273,831
<NET-ASSETS> 114,068,434
<DIVIDEND-INCOME> 781,122
<INTEREST-INCOME> 324,809
<OTHER-INCOME> 0
<EXPENSES-NET> (2,459,272)
<NET-INVESTMENT-INCOME> (1,353,342)
<REALIZED-GAINS-CURRENT> 18,238,493
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 16,885,151
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (10,805,705)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,005,764
<NUMBER-OF-SHARES-REDEEMED> (992,163)
<SHARES-REINVESTED> 515,276
<NET-CHANGE-IN-ASSETS> 16,891,854
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (863,887)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2,460,371)
<AVERAGE-NET-ASSETS> 117,034,250
<PER-SHARE-NAV-BEGIN> 21.71
<PER-SHARE-NII> (0.25)
<PER-SHARE-GAIN-APPREC> 0.99
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (2.13)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 20.32
<EXPENSE-RATIO> 2.10
<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 OMEGA FUND CLASS C
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPTEMBER-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 244,554,856
<INVESTMENTS-AT-VALUE> 284,124,313
<RECEIVABLES> 4,086,797
<ASSETS-OTHER> 54,209
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 288,265,319
<PAYABLE-FOR-SECURITIES> 2,864,344
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 789,772
<TOTAL-LIABILITIES> 3,654,116
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11,324,173
<SHARES-COMMON-STOCK> 675,119
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (331,888)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,430,838
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,329,127
<NET-ASSETS> 13,752,250
<DIVIDEND-INCOME> 105,167
<INTEREST-INCOME> 42,623
<OTHER-INCOME> 0
<EXPENSES-NET> (329,241)
<NET-INVESTMENT-INCOME> (181,452)
<REALIZED-GAINS-CURRENT> 2,578,523
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 2,397,071
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1,549,758)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 105,783
<NUMBER-OF-SHARES-REDEEMED> (244,821)
<SHARES-REINVESTED> 75,246
<NET-CHANGE-IN-ASSETS> (554,455)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (115,480)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (329,349)
<AVERAGE-NET-ASSETS> 15,642,811
<PER-SHARE-NAV-BEGIN> 21.74
<PER-SHARE-NII> (0.25)
<PER-SHARE-GAIN-APPREC> 1.01
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (2.13)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 20.37
<EXPENSE-RATIO> 2.11
<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 OMEGA FUND CLASS Y
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPTEMBER-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEPT-30-1998
<INVESTMENTS-AT-COST> 244,554,856
<INVESTMENTS-AT-VALUE> 284,124,313
<RECEIVABLES> 4,086,797
<ASSETS-OTHER> 54,209
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 288,265,319
<PAYABLE-FOR-SECURITIES> 2,864,344
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 789,772
<TOTAL-LIABILITIES> 3,654,116
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 613,146
<SHARES-COMMON-STOCK> 26,492
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 669
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (11,003)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (32,144)
<NET-ASSETS> 570,668
<DIVIDEND-INCOME> 568
<INTEREST-INCOME> 501
<OTHER-INCOME> 0
<EXPENSES-NET> (1,182)
<NET-INVESTMENT-INCOME> (113)
<REALIZED-GAINS-CURRENT> (9,947)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> (10,060)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (493)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 38,657
<NUMBER-OF-SHARES-REDEEMED> (12,421)
<SHARES-REINVESTED> 24
<NET-CHANGE-IN-ASSETS> 597,593
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (779)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (1,166)
<AVERAGE-NET-ASSETS> 105,547
<PER-SHARE-NAV-BEGIN> 22.68
<PER-SHARE-NII> (0.02)
<PER-SHARE-GAIN-APPREC> 1.01
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (2.13)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 21.54
<EXPENSE-RATIO> 1.11
<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 SMALL COMPANY GROWTH FUND CLASS A
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> SEP-30-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 801,807,653
<INVESTMENTS-AT-VALUE> 790,731,270
<RECEIVABLES> 18,692,980
<ASSETS-OTHER> 148,122
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 809,572,372
<PAYABLE-FOR-SECURITIES> 13,780,148
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,896,406
<TOTAL-LIABILITIES> 15,676,554
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 786,016,248
<SHARES-COMMON-STOCK> 102,955,378
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 2,048,730
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,048,502)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (196,783,146)
<NET-ASSETS> 589,233,330
<DIVIDEND-INCOME> 1,605,232
<INTEREST-INCOME> 1,675,697
<OTHER-INCOME> 662,206
<EXPENSES-NET> 7,038,292
<NET-INVESTMENT-INCOME> (3,095,157)
<REALIZED-GAINS-CURRENT> 1,642,112
<APPREC-INCREASE-CURRENT> (196,783,146)
<NET-CHANGE-FROM-OPS> (198,236,191)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 152,946,050
<NUMBER-OF-SHARES-REDEEMED> (49,990,672)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 589,221,260
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,087
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7,068
<AVERAGE-NET-ASSETS> 884,397
<PER-SHARE-NAV-BEGIN> 7.75
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> (1.99)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 5.72
<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 SMALL COMPANY GROWTH FUND CLASS B
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> SEP-30-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 801,807,653
<INVESTMENTS-AT-VALUE> 790,731,270
<RECEIVABLES> 18,692,980
<ASSETS-OTHER> 148,122
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 809,572,372
<PAYABLE-FOR-SECURITIES> 13,780,148
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,896,406
<TOTAL-LIABILITIES> 15,676,554
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> (55,141,326)
<SHARES-COMMON-STOCK> 35,096,950
<SHARES-COMMON-PRIOR> 163,756,330
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (2,067,310)
<ACCUMULATED-NET-GAINS> 70,266,827
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 186,818,624
<NET-ASSETS> 199,876,815
<DIVIDEND-INCOME> 1,660,910
<INTEREST-INCOME> 1,225,367
<OTHER-INCOME> 246,378
<EXPENSES-NET> 9,043,209
<NET-INVESTMENT-INCOME> (5,910,554)
<REALIZED-GAINS-CURRENT> 94,190,892
<APPREC-INCREASE-CURRENT> (309,210,187)
<NET-CHANGE-FROM-OPS> (220,929,849)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (124,537,167)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 34,914,270
<NUMBER-OF-SHARES-REDEEMED> (176,576,817)
<SHARES-REINVESTED> 13,003,167
<NET-CHANGE-IN-ASSETS> (1,346,032,162)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,260
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9,065
<AVERAGE-NET-ASSETS> 663,638
<PER-SHARE-NAV-BEGIN> 9.44
<PER-SHARE-NII> (0.07)
<PER-SHARE-GAIN-APPREC> (2.90)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (0.78)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 5.69
<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 SMALL COMPANY GROWTH FUND CLASS C
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> SEP-30-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 801,807,653
<INVESTMENTS-AT-VALUE> 790,731,270
<RECEIVABLES> 18,692,980
<ASSETS-OTHER> 148,122
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 809,572,372
<PAYABLE-FOR-SECURITIES> 13,780,148
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,896,406
<TOTAL-LIABILITIES> 15,676,554
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,164,579
<SHARES-COMMON-STOCK> 717,391
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (16,035)
<ACCUMULATED-NET-GAINS> (232,947)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (828,716)
<NET-ASSETS> 4,086,881
<DIVIDEND-INCOME> 9,020
<INTEREST-INCOME> 7,348
<OTHER-INCOME> 4,040
<EXPENSES-NET> 66,213
<NET-INVESTMENT-INCOME> (45,805)
<REALIZED-GAINS-CURRENT> (211,588)
<APPREC-INCREASE-CURRENT> (828,716)
<NET-CHANGE-FROM-OPS> (1,086,109)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,743,241
<NUMBER-OF-SHARES-REDEEMED> (1,025,850)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4,327,878
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 17
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 66
<AVERAGE-NET-ASSETS> 5,118
<PER-SHARE-NAV-BEGIN> 7.73
<PER-SHARE-NII> (0.10)
<PER-SHARE-GAIN-APPREC> (1.93)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 5.70
<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 SMALL COMPANY GROWTH FUND CLASS Y
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> SEP-30-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 801,807,653
<INVESTMENTS-AT-VALUE> 790,731,270
<RECEIVABLES> 18,692,980
<ASSETS-OTHER> 148,122
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 809,572,372
<PAYABLE-FOR-SECURITIES> 13,780,148
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,896,406
<TOTAL-LIABILITIES> 15,676,554
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,020,402
<SHARES-COMMON-STOCK> 121,812
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 2,808
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (41,274)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (283,144)
<NET-ASSETS> 698,792
<DIVIDEND-INCOME> 1,380
<INTEREST-INCOME> 1,105
<OTHER-INCOME> 625
<EXPENSES-NET> 4,903
<NET-INVESTMENT-INCOME> (1,793)
<REALIZED-GAINS-CURRENT> (37,972)
<APPREC-INCREASE-CURRENT> (283,145)
<NET-CHANGE-FROM-OPS> (322,910)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 261,851
<NUMBER-OF-SHARES-REDEEMED> (140,039)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 633,324
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5
<AVERAGE-NET-ASSETS> 791
<PER-SHARE-NAV-BEGIN> 7.73
<PER-SHARE-NII> (0.02)
<PER-SHARE-GAIN-APPREC> (1.97)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 5.74
<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> 101
<NAME> EVERGREEN STOCK SELECTOR FUND CLASS A
<PERIOD-TYPE> 3-MOS
<S> <C>
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUN-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 431,748,348
<INVESTMENTS-AT-VALUE> 433,609,934
<RECEIVABLES> 14,759,466
<ASSETS-OTHER> 722,167
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 449,091,567
<PAYABLE-FOR-SECURITIES> 2,189,707
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,586,366
<TOTAL-LIABILITIES> 7,776,073
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,325,667
<SHARES-COMMON-STOCK> 867,445
<SHARES-COMMON-PRIOR> 914,469
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (2,782)
<ACCUMULATED-NET-GAINS> 3,325,649
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 261,565
<NET-ASSETS> 15,910,099
<DIVIDEND-INCOME> 50,332
<INTEREST-INCOME> 1,684
<OTHER-INCOME> 0
<EXPENSES-NET> 54,792
<NET-INVESTMENT-INCOME> (2,776)
<REALIZED-GAINS-CURRENT> 634,639
<APPREC-INCREASE-CURRENT> (4,251,640)
<NET-CHANGE-FROM-OPS> (3,619,777)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,092
<NUMBER-OF-SHARES-REDEEMED> (56,116)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (4,617,947)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 34
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 58
<AVERAGE-NET-ASSETS> 18,404
<PER-SHARE-NAV-BEGIN> 22.43
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> (4.09)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 18.34
<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 STOCK SELECTOR FUND CLASS B
<PERIOD-TYPE> 3-MOS
<S> <C>
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUN-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 431,748,348
<INVESTMENTS-AT-VALUE> 433,609,934
<RECEIVABLES> 14,759,466
<ASSETS-OTHER> 722,167
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 449,091,567
<PAYABLE-FOR-SECURITIES> 2,189,707
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,586,366
<TOTAL-LIABILITIES> 7,776,073
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 474,796
<SHARES-COMMON-STOCK> 22,664
<SHARES-COMMON-PRIOR> 15,639
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (682)
<ACCUMULATED-NET-GAINS> 24,850
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (85,908)
<NET-ASSETS> 413,056
<DIVIDEND-INCOME> 1,016
<INTEREST-INCOME> 35
<OTHER-INCOME> 0
<EXPENSES-NET> 1,732
<NET-INVESTMENT-INCOME> (681)
<REALIZED-GAINS-CURRENT> 11,816
<APPREC-INCREASE-CURRENT> (81,945)
<NET-CHANGE-FROM-OPS> (70,810)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,269
<NUMBER-OF-SHARES-REDEEMED> (1,244)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 65,814
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2
<AVERAGE-NET-ASSETS> 355
<PER-SHARE-NAV-BEGIN> 22.33
<PER-SHARE-NII> (0.03)
<PER-SHARE-GAIN-APPREC> (4.07)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 18.23
<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 STOCK SELECTOR FUND CLASS C
<PERIOD-TYPE> 3-MOS
<S> <C>
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUN-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 431,748,348
<INVESTMENTS-AT-VALUE> 433,609,934
<RECEIVABLES> 14,759,466
<ASSETS-OTHER> 722,167
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 449,091,567
<PAYABLE-FOR-SECURITIES> 2,189,707
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,586,366
<TOTAL-LIABILITIES> 7,776,073
<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>
<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 STOCK SELECTOR FUND CLASS Y
<PERIOD-TYPE> 3-MOS
<S> <C>
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUN-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 431,748,348
<INVESTMENTS-AT-VALUE> 433,609,934
<RECEIVABLES> 14,759,466
<ASSETS-OTHER> 722,167
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 449,091,567
<PAYABLE-FOR-SECURITIES> 2,189,707
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,586,366
<TOTAL-LIABILITIES> 7,776,073
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 334,870,832
<SHARES-COMMON-STOCK> 23,166,413
<SHARES-COMMON-PRIOR> 25,145,364
<ACCUMULATED-NII-CURRENT> 235,040
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 88,200,644
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,685,823
<NET-ASSETS> 424,992,339
<DIVIDEND-INCOME> 1,363,316
<INTEREST-INCOME> 45,652
<OTHER-INCOME> 0
<EXPENSES-NET> 1,173,730
<NET-INVESTMENT-INCOME> 235,238
<REALIZED-GAINS-CURRENT> 17,294,774
<APPREC-INCREASE-CURRENT> (115,681,612)
<NET-CHANGE-FROM-OPS> (98,151,600)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,552,973
<NUMBER-OF-SHARES-REDEEMED> (3,531,924)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (138,977,007)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 934
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,256
<AVERAGE-NET-ASSETS> 500,740
<PER-SHARE-NAV-BEGIN> 22.43
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> (4.09)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 18.35
<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> 101
<NAME> EVERGREEN TAX STRATEGIC EQUITY FUND CLASS A
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPTEMBER-30-1998
<PERIOD-START> SEPTEMBER-01-1998
<PERIOD-END> SEPTEMBER-30-1998
<INVESTMENTS-AT-COST> 3,376,618
<INVESTMENTS-AT-VALUE> 3,511,244
<RECEIVABLES> 17,208
<ASSETS-OTHER> 112,806
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,641,258
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,591
<TOTAL-LIABILITIES> 1,591
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,563
<SHARES-COMMON-STOCK> 964
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 63
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 637
<NET-ASSETS> 10,263
<DIVIDEND-INCOME> 9
<INTEREST-INCOME> 2
<OTHER-INCOME> 0
<EXPENSES-NET> (8)
<NET-INVESTMENT-INCOME> 9
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 637
<NET-CHANGE-FROM-OPS> 646
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 964
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 10,269
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (5)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (11)
<AVERAGE-NET-ASSETS> 10,476
<PER-SHARE-NAV-BEGIN> 10.11
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.54
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.65
<EXPENSE-RATIO> 1.54
<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 TAX STRATEGIC EQUITY FUND CLASS B
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPTEMBER-30-1998
<PERIOD-START> SEPTEMBER-01-1998
<PERIOD-END> SEPTEMBER-30-1998
<INVESTMENTS-AT-COST> 3,376,618
<INVESTMENTS-AT-VALUE> 3,511,244
<RECEIVABLES> 17,208
<ASSETS-OTHER> 112,806
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,641,258
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,591
<TOTAL-LIABILITIES> 1,591
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,478,375
<SHARES-COMMON-STOCK> 340,703
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 17,018
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 22
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 133,989
<NET-ASSETS> 3,629,404
<DIVIDEND-INCOME> 3,292
<INTEREST-INCOME> 879
<OTHER-INCOME> 0
<EXPENSES-NET> (2,838)
<NET-INVESTMENT-INCOME> 1,327
<REALIZED-GAINS-CURRENT> 22
<APPREC-INCREASE-CURRENT> 133,989
<NET-CHANGE-FROM-OPS> 135,338
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 340,703
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,629,398
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (2,074)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (19,404)
<AVERAGE-NET-ASSETS> 2,747,888
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.65
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.65
<EXPENSE-RATIO> 1.30
<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 TAX STRATEGIC EQUITY FUND CLASS C
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPTEMBER-30-1998
<PERIOD-START> SEPTEMBER-01-1998
<PERIOD-END> SEPTEMBER-30-1998
<INVESTMENTS-AT-COST> 3,376,618
<INVESTMENTS-AT-VALUE> 3,511,244
<RECEIVABLES> 17,208
<ASSETS-OTHER> 112,806
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,641,258
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,591
<TOTAL-LIABILITIES> 1,591
<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>
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 TAX STRATEGIC EQUITY FUND CLASS Y
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> SEPTEMBER-30-1998
<PERIOD-START> SEPTEMBER-01-1998
<PERIOD-END> SEPTEMBER-30-1998
<INVESTMENTS-AT-COST> 3,376,618
<INVESTMENTS-AT-VALUE> 3,511,244
<RECEIVABLES> 17,208
<ASSETS-OTHER> 112,806
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,641,258
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,591
<TOTAL-LIABILITIES> 1,591
<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>
<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 STRATEGIC GROWTH FUND CLASS A
<PERIOD-TYPE> 12-MOS
<S> <C>
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 74,173,434
<INVESTMENTS-AT-VALUE> 73,721,473
<RECEIVABLES> 1,103,345
<ASSETS-OTHER> 74,069
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 74,898,887
<PAYABLE-FOR-SECURITIES> 5,425,941
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 252,022
<TOTAL-LIABILITIES> 5,677,963
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,660,818
<SHARES-COMMON-STOCK> 277,892
<SHARES-COMMON-PRIOR> 194,446
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (20,892)
<ACCUMULATED-NET-GAINS> 158,862
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (21,992)
<NET-ASSETS> 2,776,796
<DIVIDEND-INCOME> 26,900
<INTEREST-INCOME> 11,961
<OTHER-INCOME> 0
<EXPENSES-NET> (39,445)
<NET-INVESTMENT-INCOME> (584)
<REALIZED-GAINS-CURRENT> 147,823
<APPREC-INCREASE-CURRENT> (20,215)
<NET-CHANGE-FROM-OPS> 127,024
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 383,278
<NUMBER-OF-SHARES-REDEEMED> (289,832)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,032,860
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (33,884)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (51,028)
<AVERAGE-NET-ASSETS> 2,262,265
<PER-SHARE-NAV-BEGIN> 8.46
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 1.53
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.99
<EXPENSE-RATIO> 1.75
<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 STRATEGIC GROWTH FUND CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 74,173,434
<INVESTMENTS-AT-VALUE> 73,721,473
<RECEIVABLES> 1,103,345
<ASSETS-OTHER> 74,069
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 74,898,887
<PAYABLE-FOR-SECURITIES> 5,425,941
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 252,022
<TOTAL-LIABILITIES> 5,677,963
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,862,960
<SHARES-COMMON-STOCK> 407,935
<SHARES-COMMON-PRIOR> 343,322
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (48,150)
<ACCUMULATED-NET-GAINS> 240,959
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (35,613)
<NET-ASSETS> 4,020,156
<DIVIDEND-INCOME> 44,010
<INTEREST-INCOME> 18,953
<OTHER-INCOME> 0
<EXPENSES-NET> (91,350)
<NET-INVESTMENT-INCOME> (28,387)
<REALIZED-GAINS-CURRENT> 266,612
<APPREC-INCREASE-CURRENT> (32,735)
<NET-CHANGE-FROM-OPS> 205,490
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 164,864
<NUMBER-OF-SHARES-REDEEMED> (100,251)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 922,482
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (55,448)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (110,107)
<AVERAGE-NET-ASSETS> 3,663,453
<PER-SHARE-NAV-BEGIN> 8.39
<PER-SHARE-NII> (0.08)
<PER-SHARE-GAIN-APPREC> 1.54
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.85
<EXPENSE-RATIO> 2.50
<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 STRATEGIC GROWTH FUND CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 74,173,434
<INVESTMENTS-AT-VALUE> 73,721,473
<RECEIVABLES> 1,103,345
<ASSETS-OTHER> 74,069
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 74,898,887
<PAYABLE-FOR-SECURITIES> 5,425,941
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 252,022
<TOTAL-LIABILITIES> 5,677,963
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,319,829
<SHARES-COMMON-STOCK> 130,192
<SHARES-COMMON-PRIOR> 10,089
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (10,144)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (20,149)
<ACCUM-APPREC-OR-DEPREC> (7,404)
<NET-ASSETS> 1,282,132
<DIVIDEND-INCOME> 9,849
<INTEREST-INCOME> 4,701
<OTHER-INCOME> 0
<EXPENSES-NET> (18,992)
<NET-INVESTMENT-INCOME> (4,442)
<REALIZED-GAINS-CURRENT> 97,223
<APPREC-INCREASE-CURRENT> (6,806)
<NET-CHANGE-FROM-OPS> 85,975
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 128,876
<NUMBER-OF-SHARES-REDEEMED> (8,773)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,294,159
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (11,598)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (22,892)
<AVERAGE-NET-ASSETS> 761,678
<PER-SHARE-NAV-BEGIN> 8.38
<PER-SHARE-NII> (0.06)
<PER-SHARE-GAIN-APPREC> 1.53
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.85
<EXPENSE-RATIO> 2.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
