<PAGE>
Semiannual Report
as of January 31, 2000
EVERGREEN GROWTH AND INCOME FUNDS
[LOGO OF MUTUAL
[LOGO OF EVERGREEN FUNDS] FUND SERVICE AWARD]
<PAGE>
Table of Contents
Letter to Shareholders .................................................... 1
Evergreen Blue Chip Fund
Fund at a Glance ........................................................ 2
Portfolio Manager Interview ............................................. 3
Evergreen Equity Income Fund
Fund at a Glance ........................................................ 6
Portfolio Manager Interview ............................................. 7
Evergreen Growth and Income Fund
Fund at a Glance ........................................................ 10
Portfolio Manager Interview ............................................. 11
Evergreen Income and Growth Fund
Fund at a Glance ........................................................ 14
Portfolio Manager Interview ............................................. 15
Evergreen Small Cap Value Fund
Fund at a Glance ........................................................ 18
Portfolio Manager Interview ............................................. 19
Evergreen Utility Fund
Fund at a Glance ........................................................ 21
Portfolio Manager Interview ............................................. 22
Evergreen Value Fund
Fund at a Glance ........................................................ 24
Portfolio Manager Interview ............................................. 25
Financial Highlights
Evergreen Blue Chip Fund ................................................ 27
Evergreen Equity Income Fund ............................................ 29
Evergreen Growth and Income Fund ........................................ 31
Evergreen Income and Growth Fund ........................................ 33
Evergreen Small Cap Value Fund .......................................... 35
Evergreen Utility Fund .................................................. 37
Evergreen Value Fund .................................................... 39
Schedule of Investments
Evergreen Blue Chip Fund ................................................ 41
Evergreen Equity Income Fund ............................................ 43
Evergreen Growth and Income Fund ........................................ 45
Evergreen Income and Growth Fund ........................................ 49
Evergreen Small Cap Value Fund .......................................... 53
Evergreen Utility Fund .................................................. 55
Evergreen Value Fund .................................................... 57
Statements of Assets and Liabilities ...................................... 59
Statements of Operations .................................................. 60
Statements of Changes in Net Assets ....................................... 61
Combined Notes to Financial Statements .................................... 63
Evergreen Funds
Evergreen Funds is one of the nation's fastest growing investment companies with
approximately $80 billion in assets under management.
With over 80 mutual funds to choose among and acclaimed service and operations
capabilities, investors enjoy a broad range of quality investment products and
services designed to meet their needs.
The Evergreen Funds employ intensive, research-driven investment strategies
executed by over 90 research analysts and portfolio managers. The fund company
remains dedicated to meeting the needs of investors and their advisors in a
global economy. Look to Evergreen Funds to provide a distinctive level of
service and excellence in investment management.
This semiannual report must be preceded or accompanied by a prospectus of an
Evergreen fund contained herein. The prospectus contains more complete
information, including fees and expenses, and should be read carefully before
investing or sending money.
Mutual Funds: ARE NOT FDIC INSURED May lose value . Not bank guaranteed
Evergreen Distributor,Inc.
Evergreen Funds(SM) is a service mark of Evergreen Investment Services, Inc.
<PAGE>
Letter to Shareholders
----------------------
March 2000
[PHOTO]
William M. Ennis
President and CEO
Dear Evergreen Shareholders,
We are pleased to provide the Evergreen Growth and Income Funds semiannual
report, which covers the six-month period ended January 31, 2000.
Uncertainty Over Interest Rates Influences the Markets
The stock market's dramatic movement during the past year has occurred despite
continuing concerns about rising interest rates and a Federal Reserve Bank
policy that appears focused on containing the high rate of economic expansion.
It is this combination of stretched valuations and rising interest rates that
has us entering the new year with a tone of caution and greater focus on risk
management in portfolio structuring.
By the third quarter of 1999, rising interest rates dampened performance of
stocks across the board. Investors' inflation fears and continued doubts about
the ability of U.S. companies to sustain significant growth in earnings prompted
a late year sell-off. The Federal Reserve Bank's "tightening bias" leads many to
anticipate further interest rate increases in order to stem even the slightest
inflationary pressure.
Despite the anxiety over interest rates, many experts agree that the economy is
still fundamentally strong, and we remain cautiously optimistic about the
prospects for continued growth in the markets.
Website Enhancements
Please visit our enhanced website, evergreen-funds.com, for more information
about Evergreen Funds. The site offers an array of helpful information including
1999 tax information, an investment education center, interactive calculators to
assist your investment planning and general information about Evergreen Funds.
We believe that sound investing is about taking steps to meet your long-term
financial needs and goals. We remind you to take advantage of your financial
advisor's expertise to develop and refine a financial plan that will enable you
to meet your objectives. Evergreen Funds offers a broad mix of stock, bond and
money market funds that should assist you in choosing the most appropriate for
your portfolio.
We would like to thank you for your continued investment in Evergreen Funds.
Sincerely,
/s/ Bill Ennis
William M. Ennis
President and CEO
Evergreen Investment Company, Inc.
1
<PAGE>
EVERGREEN
Blue Chip Fund
Fund at a Glance as of January 31, 2000
"In an environment where performance leadership can shift or rotate rapidly from
one industry to another, you can't afford to rest with a static portfolio."
Portfolio Management
------------------------
[PHOTO]
Judith A. Warners
Tenure: January 1995
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE 1
- --------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 1/31/2000.
The Equity Style Box placement is based on a fund's price-to-earnings and
price-to-book ratio relative to the S&P 500, as well as the size of the
companies in which it invests, or median market capitalization.
1 Source: 2000 Morningstar, Inc.
2 Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads, fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost.
Historical performance shown for Classes A, C, and Y prior to their inception is
based on the performance of Class B, the original class offered. These
historical returns for Classes A and Y have been adjusted to eliminate the
effect of the higher 12b-1 fees applicable to Class B. These fees are 0.25% for
Class A and 1.00% for Classes B and C. Class Y does not pay a 12b-1 fee. If
these fees had not been eliminated, returns would have been lower.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS 2
- --------------------------------------------------------------------------------
Portfolio Inception Date: 9/11/1935 Class A Class B Class C Class Y
Class Inception Date 1/20/1998 9/11/1935 1/22/1998 4/30/1999
Average Annual Returns*
6 months with sales charge 7.10% 7.01% 10.01% n/a
6 months w/o sales charge 12.44% 12.01% 12.01% 12.58%
1 year with sales charge 11.59% 11.26% 14.28% n/a
1 year w/o sales charge 17.14% 16.26% 16.28% 17.42%
3 years 19.76% 20.27% 20.89% 21.99%
5 years 23.70% 23.97% 24.02% 25.20%
10 years 15.23% 14.96% 14.86% 16.07%
Since Portfolio Inception 9.41% 9.28% 9.24% 9.55%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
6-month capital gain distributions
per share $2.40 $2.40 $2.40 $2.40
* Adjusted for maximum applicable sales charges unless noted.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
Class B S & P 500 CPI
1/31/90 10,000 10,000 10,000
1/91 10,595 10,839 10,565
1/92 12,770 13,299 10,840
1/93 13,190 14,706 11,193
1/94 14,829 16,600 11,476
1/95 13,672 16,688 11,797
1/96 18,439 23,140 12,119
1/97 22,777 29,236 12,488
1/98 28,244 37,103 12,684
1/99 34,668 49,169 12,896
1/00 40,305 54,246 13,237
Comparison of a $10,000 investment in Evergreen Blue Chip Fund, Class B
shares 2, versus a similar investment in the Standard & Poor's 500 Index (S&P
500) and the Consumer Price Index (CPI).
The S&P 500 is an unmanaged market index which does not include transaction
costs associated with buying and selling securities nor any mutual fund
expenses. The CPI is a commonly used measure of inflation and does not represent
an investment return. It is not possible to invest directly in an index.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
2
<PAGE>
EVERGREEN
Blue Chip Fund
Portfolio Manager Interview
How did the Fund perform?
For the six-month period ended January 31, 2000, the Fund's Class B shares
returned 12.01%. This compared favorably to the Fund's benchmark, the Standard &
Poor's 500 Index, which returned 5.59%. For the same six-month period, the
average return of large-cap core stock funds was 8.28%, according to Lipper
Inc., an independent monitor of mutual fund performance. Fund returns are before
the deduction of any applicable sales charges.
Fund performance was helped by good stock selection, especially among
technology, retail and media companies.
Portfolio
Characteristics
---------------
(as of 1/31/2000 unless noted)
Total Net Assets $855,685,933
Number of Holdings 106
Beta* 0.95
P/E Ratio* 33.6x
*As of 12/31/1999
What factors affected performance during the six months?
After a severe market slump during September and October 1999, the stock market
came roaring back during November and December. This rally was led by technology
companies, which began with large-cap companies, then spread to smaller-cap
companies, especially those involved in the internet, telecommunications, and
biotechnology. A major announcement in December about breakthroughs in
biotechnology research involving genomics, which may have potential in cancer
therapies, was a catalyst for biotechnology stocks. This continued rally in
technology stocks came despite a backdrop of generally rising interest rates.
The Federal Reserve Board, seeking to discourage inflationary pressures and slow
economic growth, raised short-term interest rates three times in 1999, twice in
the second half of the year. Stock selection was extremely important in this
environment, as investors focused on a relatively narrow band of stocks that
offered the potential of above-average growth in revenues and earnings. Stocks
in some sectors, particularly in financial services and cyclical industries,
slumped as interest rates rose. But the extremely strong performance of
technology stocks drove the overall market indices higher and higher, especially
the NASDAQ Index, which is most heavily influenced by technology and
telecommunications.
Top 10 Holdings
---------------
(as a percentage of 1/31/2000 net assets)
Microsoft Corp. 4.3%
General Electric Co. 3.7%
Intel Corp. 2.9%
Exxon Mobil Corp. 2.2%
Cisco Systems, Inc. 2.1%
Wal-Mart Stores, Inc. 2.0%
International Business Machines Corp. 1.9%
Citigroup, Inc. 1.7%
American International Group, Inc. 1.5%
AT&T Corp. 1.5%
What strategies did you employ during the period?
In an environment where performance leadership can shift or rotate rapidly from
one industry to another, you can't afford to rest with a static portfolio. We
tried to be on top of emerging trends and open to new performance leadership by
companies which we believe to have the potential for earnings acceleration. At
the same time, we also had to be alert for signs of any earnings
disappointments, as the market tends to punish companies that don't live up to
expectations.
3
<PAGE>
EVERGREEN
Blue Chip Fund
Portfolio Manager Interview
We kept a healthy representation in technology, which accounted for about 25% of
net assets on January 31, 2000. At the same time, we were careful not to
overweight technology after the big stock price run-ups in the fall and early
winter. We felt too heavy a weighting in technology could increase the risk
unduly. The key in technology was in stock selection--picking companies with
earnings acceleration rather than over-weighting.
At the same time, we under-weighted financial services companies and traditional
healthcare companies. We de-emphasized financial services companies because they
tend to do poorly in a rising interest rate environment. Moreover, there were
signs that merger and acquisition activity was slowing.
We de-emphasized traditional healthcare companies, such as pharmaceuticals,
because of their relatively high stock prices. Additionally, we were concerned
about the quantity of new products entering the marketplace, the number of
patents of existing products due to expire, and the uncertainty about government
regulation and reimbursement policies. The de-emphasis on pharmaceuticals did
not extend to the biotechnology area, where we made a number of investments in
December, following the announcement about genomics developments. We also added
medical equipment and service companies which were positive performers.
Top 5 Industries
----------------
(as a percentage of 1/31/2000 net assets)
Information Services & Technology 24.7%
Healthcare Products & Services 7.2%
Printing, Publishing, Broadcasting & Entertainment 6.8%
Utilities--Telephone 6.3%
Oil/Energy 5.6%
What were some of the investments that contributed to performance?
Technology investments were major contributors to performance, including: CMGI,
which invests in internet companies; Veritas Software, which provides data
storage software for companies engaged in business on the internet; Teradyne,
which provides equipment used in the manufacture of semiconductors; Nokia, a
telecommunications equipment leader; and Cisco Systems and Sun Microsystems, two
leaders in providing infrastructure for the internet.
Immunex, a biotechnology company that we added to the portfolio late in the
period, helped performance. Medtronics was another healthcare-related investment
that supported performance.
While we de-emphasized financial services, three market leaders that we
held--Citigroup, Chase Manhattan and American Express--all performed well. Two
other major holdings that performed very well were General Electric and
Wal-Mart.
There were disappointments, however. One was Tyco International, whose stock
price slumped after questions arose about its accounting practices, and
Honeywell, which fell after its acquisition of Allied-Signal disappointed
investors.
4
<PAGE>
EVERGREEN
Blue Chip Fund
Portfolio Manager Interview
What is your outlook?
We expect continued change in the groups of stocks leading the market, and we
expect continued volatility in the overall market. The risks of this volatility
are heightened by the fact that market leadership has narrowed to relatively few
stocks. At the same time, traditional issues such as rising interest rates and
high stock valuations are causes for concern.
Having expressed those concerns, we are very impressed with the investment
potential of companies involved in building the infrastructure for the internet
and developing a global telecommunications system. We also think that the
America Online-Time Warner proposed merger might reflect an emerging trend for
combining those companies involved in the news media with those involved in
content production.
Healthcare, particularly in biotechnology, also offers some attractive
opportunities.
In this environment, we will maintain our focus on market leadership, but we
will look for opportunities among emerging companies--the new blue chips--as
well as traditional industry leaders. Our focus is on companies that can
dominate their niches, that have quality management, and that have demonstrated
an ability to accelerate their revenues.
5
<PAGE>
EVERGREEN
Equity Income Fund
Fund at a Glance as of January 31, 2000
"Despite short-term trends, we continue to believe the stock market ultimately
will reward investments in companies with financial strength, favorable market
positions, sound management, and high or rising dividend yields."
Portfolio Management
------------------------
[PHOTO]
Harlan R. Sonderling,
CPA, CFA
Tenure:June 1998
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE 1
- --------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 1/31/2000.
The Equity Style Box placement is based on a fund's price-to-earnings and
price-to-book ratio relative to the S&P 500, as well as the size of the
companies in which it invests, or median market capitalization.
1 Source: 2000 Morningstar, Inc.
2 Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads, fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost.
Historical performance shown for Classes B, C, and Y prior to their inception is
based on the performance of Class A, the original class offered. These
historical returns for Classes B, C, and Y have not been adjusted to reflect the
effect of each Class' 12b-1 fees. These fees are 0.25% for Class A and 1.00% for
Classes B and C. Class Y does not pay a 12b-1 fee. If these fees had been
reflected, returns for Classes B and C would have been lower while returns for
Class Y would have been higher.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS 2
- --------------------------------------------------------------------------------
Portfolio Inception Date: 4/14/1987 Class A Class B Class C Class Y
Class Inception Date 4/14/1987 2/1/1993 2/1/1993 1/13/1997
Average Annual Returns*
6 months with sales charge -11.54% -11.37% -9.04% n/a
6 months w/o sales charge -7.11% -7.49% -7.49% -7.00%
1 year with sales charge -6.57% -6.75% -4.31% n/a
1 year w/o sales charge -1.92% -2.67% -2.68% -1.67%
3 years 8.01% 8.20% 8.93% 9.93%
5 years 16.66% 16.63% 16.86% 17.89%
10 years 12.22% 12.14% 12.14% 12.80%
Since Portfolio Inception 11.28% 11.23% 11.23% 11.74%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
6-month income dividends
per share $0.19 $0.12 $0.12 $0.21
6-month capital gain distributions
per share $2.99 $2.99 $2.99 $2.99
* Adjusted for maximum applicable sales charge unless noted.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
Lehman Brothers
Class A Aggregate S & P 500 CPI
1/31/90 9,528 10,000 10,000 10,000
1/91 10,180 11,163 10,839 10,565
1/92 12,061 12,617 13,299 10,840
1/93 13,291 14,002 14,706 11,193
1/94 15,242 15,281 16,600 11,476
1/95 13,962 14,928 16,688 11,797
1/96 18,507 17,457 23,140 12,119
1/97 23,937 18,027 29,236 12,488
1/98 28,659 19,960 37,103 12,684
1/99 32,281 21,570 49,169 12,896
1/00 31,662 21,170 52,246 13,237
Comparison of a $10,000 investment in Evergreen Equity Income Fund, Class A
shares 2, versus a similar investment in the Standard & Poor's 500 Index (S&P
500) the Lehman Brothers Aggregate Index (LBAI) and the Consumer Price Index
(CPI).
The S&P 500 and the LBAI are unmanaged market indices which do not include
transaction costs associated with buying and selling securities nor any mutual
fund expenses. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
Returns reflect expense limits previously in effect, without which returns would
have been lower.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
Funds that invest in high yield, lower-rated bonds may contain more risks due to
the increased possibility of default.
6
<PAGE>
EVERGREEN
Equity Income Fund
Portfolio Manager Interview
How did the Fund perform?
For the six-month period ended January 31, 2000, the Fund's Class A shares had a
total return of -7.11%. During the same period, the median total return of
equity income funds was -6.90%, according to Lipper Inc., an independent monitor
of mutual fund performance, while the Standard & Poor's 500 Index returned
5.59%. Fund returns are before the deduction of any applicable sales charges.
The returns were realized during an extremely difficult period for investment
strategies, such as the Fund's, that emphasize stocks with lower than average
price/earnings ratios and with higher dividend yields. Investors favored stocks
of companies highly priced by traditional measures, particularly in the
technology industry, many of which had little or no earnings and no dividends.
Portfolio
Characteristics
---------------
(as of 1/31/2000 unless noted)
Total Net Assets $106,678,817
Number of Holdings 69
Beta* 0.75
P/E Ratio* 14.3x
*As of 12/31/1999
What was the investment environment like during the six-month period?
Concerns about rising interest rates and whether the fast-growing domestic
economy might be overheating dominated the backdrop for value- and
income-oriented stock investors during the six months.
Higher interest rates negatively affected performance of stocks in financial
services, capital goods and utilities. The rate increases also affected regional
phone companies, whose earnings growth rates also were slowed by the emergence
of new competition in the fast-growing telecommunications area.
Healthcare industry stocks, which had enjoyed strong performance for several
years, slumped as investors worried about the regulatory environment and
potential changes in federal reimbursement policies. Energy industry stocks also
lagged as oil price increases moderated and earnings of energy-related companies
failed to meet expectations. Anti-trust concerns about some proposed oil
industry mergers also hurt the performance of energy stocks.
What were your principal strategies in this challenging environment?
We reduced our emphasis on financial services stocks, and within the sector,
focused on higher quality companies with histories of low credit losses and on
companies that are more heavily reliant on fee-based sources of income. Within
the financial services sector, we maintained a position of about 5% of net
assets in real estate investment trusts (REITs) because of their strong
fundamentals, reasonable valuations and rising dividends.
7
<PAGE>
EVERGREEN
EQUITY INCOME FUND
Portfolio Manager Interview
In the energy sector, we sought out values among domestic refining companies,
which we believe are likely to benefit from moderating oil prices. Among
electric utility stocks, we looked for higher quality utilities with
conservative financial structures operating in relatively favorable regulatory
environments. We reduced the Fund's exposure to basic materials stocks, and
continued to de-emphasize capital goods stocks.
One of the significant changes we made during the six-month period was to invest
about 5% of net assets in long-term U.S. Treasury securities, to take advantage
of pricing disparities in the government bond market that made the prices of
these securities very attractive. We found Treasuries attractive because of
their high yields and our confidence that the U.S. Federal Reserve Board
eventually would contain inflationary pressures.
Top 5 Industries
----------------
(as a percentage of 1/31/2000 net assets)
Banks 11.1%
Utilities--Telephone 11.0%
Finance & Insurance 10.3%
Oil/Energy 9.6%
Healthcare Products & Services 8.7%
What were some of the areas that helped performance?
While capital goods stocks in general lagged during the period, General
Electric, a major fund position, turned in excellent performance, based on
acceleration of its earnings growth, a sharply higher stock dividend yield, and
continued market leadership in its diversified business units. As a group, REITs
did very well during the six months, following a period when they had
underperformed because of investor concerns about possible overbuilding in the
commercial real estate market.
The Fund had a very successful investment in a convertible security issued by
McLeod USA, a local telephone company in the Mountain States. As the company's
operating results improved, the convertible stock rose in line with the
underlying common stock. U.S. West, a regional telephone carrier that has
received an acquisition offer from Qwest Communications, also performed very
well.
The Fund's investment in General Motors also was successful, helped by investor
enthusiasm for Hughes Electronics, a GM subsidiary. Other investments that
helped performance included Citigroup, a leading financial services company, and
Merck, the Fund's largest healthcare industry holding.
8
<PAGE>
EVERGREEN
Equity Income Fund
Portfolio Manager Interview
Disappointments included investments in Bank of America, which lagged because of
investor concerns about the sustainability of its earnings following its merger
with NationsBank, and Greenpoint Financial, whose stock value was hurt because
of concerns about the credit quality of its portfolio of manufactured housing
loans.
Top 10 Holdings
---------------
(as a percentage of 1/31/2000 net assets)
U.S. Treasury Bonds, 7.25%, 8/15/2022 6.0%
Bell Atlantic Corp. 3.2%
Merck & Co., Inc. 3.1%
Exxon Mobil Corp. 3.1%
General Electric Co. 2.8%
Atlantic Richfield Co. 2.6%
Firstar Corp. 2.3%
International Business Machines Corp. 2.3%
General Motors Corp. 2.3%
Ford Motor Co. 2.2%
What is your outlook?
We believe that rising interest rate pressures may peak in the second quarter of
2000 and that economic growth should start to slow. Once this occurs, the
favorable stock valuations of companies in industries such as financial services
and communications should propel stronger performance. The energy and healthcare
industries also offer potential investment opportunities because of their
reasonable valuations and attractive dividend yields.
Despite short-term trends, we continue to believe the stock market ultimately
will reward investments in companies with financial strength, favorable market
positions, sound management, and high or rising dividend yields. We intend to
maintain our investment discipline and focus on these types of companies for
their long-term attractiveness and potential.
9
<PAGE>
EVERGREEN
Growth and Income Fund
Fund at a Glance as of January 31, 2000
"We believe media and broadcasting companies will continue to prosper because of
heavy advertising, especially in an election year."
Portfolio
Management
--------------
[PHOTO] [PHOTO]
Irene D. O'Neill, Phillip M. Foreman,
CFA CFP, CFA
Tenure: September 1999 Tenure: September 1999
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE 1
- --------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 1/31/2000.
The Equity Style Box placement is based on a fund's price-to-earnings and
price-to-book ratio relative to the S&P 500, as well as the size of the
companies in which it invests, or median market capitalization.
1 Source: 2000 Morningstar, Inc.
2 Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads, fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost.
Historical performance shown for Classes A, B, and C prior to their inception is
based on the performance of Class Y, the original class offered. These
historical returns for Classes A, B, and C have not been adjusted to reflect the
effect of each Class' 12b-1 fees. These fees are 0.25% for Class A and 1.00% for
Classes B and C. Class Y does not pay a 12b-1 fee. If these fees had been
reflected, returns would have been lower.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS 2
- --------------------------------------------------------------------------------
Portfolio Inception Date: 10/15/1986 Class A Class B Class C Class Y
Class Inception Date 1/3/1995 1/3/1995 1/3/1995 10/15/1986
Average Annual Returns*
6 month with sales charge -0.19% -0.61% 2.39% n/a
6 month w/o sales charge 4.77% 4.39% 4.39% 4.92%
1 year with sales charge 3.72% 3.10% 6.06% n/a
1 year w/o sales charge 8.90% 8.10% 8.06% 9.18%
3 years 10.79% 10.96% 11.77% 12.90%
5 years 17.86% 17.94% 18.17% 19.30%
10 years 14.56% 14.71% 14.71% 15.27%
Since Portfolio Inception 13.70% 13.81% 13.81% 14.23%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
6-month capital gain distributions
per share $0.60 $0.60 $0.60 $0.60
* Adjusted for maximum applicable sales charge unless noted.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
Class A CPI S & P 400
1/31/90 9,521 10,000 10,000
1/91 10,099 10,565 11,183
1/92 12,309 10,840 15,832
1/93 14,026 11,193 17,628
1/94 16,257 11,476 20,296
1/95 16,317 11,797 19,301
1/96 21,901 12,119 25,385
1/97 27,281 12,488 30,944
1/98 34,104 12,684 38,625
1/99 35,766 12,896 45,071
1/00 38,948 13,237 52,263
Comparison of a $10,000 investment in Evergreen Growth and Income Fund, Class A
shares 2, versus a similar investment in the Standard and Poor's 400 Mid-Cap
Index (S&P 400) and the Consumer Price Index (CPI).
The S&P 400 is an unmanaged market index which does not include transaction
costs associated with buying and selling securities nor any mutual fund
expenses. The CPI is a commonly used measure of inflation and does not represent
an investment return. It is not possible to invest directly in an index.
Returns reflect expense limits previously in effect, without which returns would
have have been lower.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
Funds that invest in high yield, lower rated bonds may contain more risks due to
the increased possibility of default.
10
<PAGE>
EVERGREEN
Growth and Income Fund
Portfolio Manager Interview
How did the Fund perform?
For the six-month period ended January 31, 2000, the Fund's Class A shares had a
total return of 4.77%. During the same six-month period, the average return of
multi-cap value funds was -5.04%, according to Lipper Inc., an independent
monitor of mutual fund performance, while the Standard & Poor's Midcap 400 Index
returned 6.59%. Fund returns are before the deduction of any applicable sales
charges.
Portfolio
Characteristics
---------------
(as of 1/31/2000 unless noted)
Total Net Assets $1,616,687,589
Number of Holdings 210
Beta* 0.82
P/E Ratio* 46.2x
*As of 12/31/1999
What factors affected performance?
The Fund's performance was helped by our overweighted position in the stocks of
media and broadcasting companies and our increased emphasis on technology.
However, we lost ground in January, the final month of the period, primarily
because biotechnology companies had a spectacular rally, rising more than 20%.
Not many biotechnology companies met our investment criteria, therefore we
didn't enjoy the benefits of that surge in biotechnology.
Our strategy is to buy what we believe are good, profitable businesses that are
on sale. We look for companies with competitive advantages, that have barriers
to entry, and that are selling at a 40% or more discount to their private market
value--the price another corporation is likely to pay to acquire the business.
We believe our strategy will result in a portfolio of companies that are better
than the average company and we believe we will likely outperform the benchmarks
over time.
It was a difficult environment for investing in most stocks. In fact, 55% of all
stocks actually declined in value during 1999. However, the technology sector
was so strong that a major share of investment results was determined by the
extent to which you were invested in technology and biotechnology. Those two
segments drove the markets and the performance of the indices.
Media and broadcasting stocks did relatively well, and we were over-weighted in
media, which helped performance. During the year, we progressively raised our
emphasis on technology. We started 1999 with less than 3% of net assets invested
in technology stocks and raised the portfolio exposure to this industry to about
12% of net assets by the half-year mark. Then, we were able to find a number of
attractive technology companies that were on sale, and we were able to lift our
weighting in the industry, allowing us to participate in the strong fourth
quarter rally in technology stocks. By the end of 1999, we had about 14% of net
assets in technology, although that was still an under-weight position relative
to the S&P Midcap 400 Index.
The Fund's heavy investments in financial services companies held back
performance. Even though we reduced the emphasis by more than half from the 33%
weighting at the beginning of 1999, we still were overweighted versus the
indices and we were hurt during a very difficult period for financial services
stocks.
11
<PAGE>
EVERGREEN
Growth and Income Fund
Portfolio Manager Interview
Top 5 Industries
----------------
(as a percentage of 1/31/2000 net assets)
Information Services & Technology 13.5%
Printing, Publishing, Broadcasting & Entertainment 12.2%
Healthcare Products & Services 8.4%
Finance & Insurance 6.8%
Banks 6.6%
What were some of the investments that contributed to performance?
The larger positions in the Fund tended to do very well. Sony, for example, had
extremely good performance, aided by the recovery in the Japanese market and the
worldwide recognition of Sony's leadership in digital media. In addition, Sony's
stock price received a boost from a corporate re-structuring program and the
performance of internet subsidiaries.
The New York Times Company was another large position that did very well. The
stock benefited from political and electronic commerce advertising as well as by
the decision to spin out its internet-related businesses.
The strong advertising market in general helped media and broadcasting
companies, which comprised about 9% of net assets at the end of the period.
Among the performance leaders were Emmis Radio and Clear Channel Communications.
The investment in Univision, the leading source of Spanish-language programming
for cable television, also supported performance. Univision was helped by the
growing interest of mainstream advertisers to target the nation's
Spanish-speaking population.
Investments in the business equipment and services industry helped the Fund's
returns significantly. Leading performers included Seagate Technology and
Computer Sciences. While we were under-weighted in biotechnology, PE Biosystems,
which manufactures equipment for the biotechnology industry, was an excellent
performer.
Although financial services investments held back performance, Kansas City
Southern, a diversified corporation owning mutual fund companies as well as a
railroad, was a good contributor.
Among the disappointments was the toy and game company Hasbro. While it met its
earnings expectations, its stock price fell during a general slump in the toy
industry.
Top 10 Holdings
---------------
(as a percentage of 1/31/2000 net assets)
Motorola, Inc. 2.3%
Kansas City Southern Industries, Inc. 2.2%
Sony Corp., ADR 2.0%
Clear Channel Communications, Inc. 1.9%
New York Times Co., Cl. A 1.8%
Microsoft Corp. 1.8%
American Tower Systems Corp., Cl. A 1.8%
Seagate Technology 1.8%
Disney (Walt) Co. 1.8%
PE Corp--PE Biosystems Group 1.8%
12
<PAGE>
EVERGREEN
Growth and Income Fund
Portfolio Manager Interview
What is your outlook?
We are extremely positive about the investment opportunities we see. We believe
media and broadcasting companies will continue to prosper because of heavy
advertising, especially in an election year. While the financial services sector
has not performed well in 1999, we intend to emphasize those companies relying
on fee-based businesses rather than on lending, which is vulnerable to rising
interest rates. We expect to continue to add to our position in the technology
industry, although we intend to do so opportunistically, investing after
corrections to take advantage of temporarily low prices. We also expect to
de-emphasize retail and consumer durables companies, as we believe the Federal
Reserve's hikes in short-term interest rates eventually will slow consumer
spending.
We will continue to take a long-term view of investment opportunities, as we
consider ourselves investors not traders. The mid-cap stock market still offers
substantial value, especially when compared to the large-cap market, and we are
finding many good companies whose stocks are trading at discounts of 40% or more
to their private market value.
13
<PAGE>
EVERGREEN
Income and Growth Fund
Fund at a Glance as of January 31, 2000
"With the expectation of additional increases in interest rates, we expect we
will continue to de-emphasize stocks in those sectors vulnerable to interest
rate changes and seek to identify areas which we believe are offering superior
growth prospects."
Portfolio
Management
--------------
[PHOTO] [PHOTO]
Irene D. O'Neill, Phillip M. Foreman,
CFA CFP, CFA
Tenure: December 1997 Tenure: September 1999
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE 1
- --------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 1/31/2000.
The Equity Style Box placement is based on a fund's price-to-earnings and
price-to-book ratio relative to the S&P 500, as well as the size of the
companies in which it invests, or median market capitalization.
1 Source: 2000 Morningstar, Inc.
2 Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads, fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost.
Historical performance shown for Classes A, B, and C prior to their inception is
based on the performance of Class Y, the original class offered. These
historical returns for Classes A, B, and C have not been adjusted to reflect the
effect of each Class' 12b-1 fees. These fees are 0.25% for Class A and 1.00% for
Classes B and C. Class Y does not pay a 12b-1 fee. If these fees had been
reflected, returns would have been lower.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS 2
- --------------------------------------------------------------------------------
Portfolio Inception Date: 8/31/1978 Class A Class B Class C Class Y
Class Inception Date 1/3/1995 1/3/1995 1/3/1995 8/31/1978
Average Annual Returns*
6 month with sales charge -3.78% -4.20% -1.29% n/a
6 month w/o sales charge 1.03% 0.64% 0.64% 1.16%
1 year with sales charge 8.03% 7.60% 10.60% n/a
1 year w/o sales charge 13.43% 12.60% 12.60% 13.71%
3 years 9.41% 9.57% 10.39% 11.50%
5 years 12.96% 12.97% 13.22% 14.33%
10 years 10.12% 10.26% 10.25% 10.80%
Since Portfolio Inception 13.56% 13.62% 13.62% 13.88%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
6-month income dividends
per share $0.51 $0.43 $0.43 $0.54
6-month capital gain distributions
per share $0.40 $0.40 $0.40 $0.40
* Adjusted for maximum applicable sales charge unless noted.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
Class A CPI Wilshire 5000
1/31/90 9,526 10,000 10,000
1/91 9,489 10,565 10,617
1/92 11,536 10,840 13,561
1/93 12,856 11,193 14,989
1/94 14,355 11,476 16,997
1/95 13,596 11,797 16,823
1/96 16,776 12,119 23,071
1/97 19,088 12,488 28,694
1/98 23,149 12,684 35,952
1/99 23,140 12,896 45,758
1/00 26,247 13,237 52,382
Comparison of a $10,000 investment in Evergreen Income and Growth Fund, Class A
shares 2, versus a similar investment in the Wilshire 5000 Index (Wilshire 5000)
and the Consumer Price Index (CPI).
The Wilshire 5000 is an unmanaged market index which does not include
transaction costs associated with buying and selling securities nor any mutual
fund expenses. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
Returns reflect expense limits previously in effect, without which returns would
have been lower.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
14
<PAGE>
EVERGREEN
Income and Growth Fund
Portfolio Manager Interview
How did the Fund perform?
For the six-month period ended January 31, 2000, the Fund's Class A shares had a
total return of 1.03%. During the same six-month period, the Lipper Income Fund
Average had a return of 0.55%, according to Lipper Inc., an independent monitor
of mutual fund performance, while the Wilshire 5000 Index returned 8.54%. Fund
returns are before the deduction of any applicable sales charges.
Portfolio
Characteristics
---------------
(as of 1/31/2000 unless noted)
Total Net Assets $999,372,837
Number of Holdings 161
Beta* 0.67
P/E Ratio* 33.7x
*As of 12/31/1999
What factors affected the Fund's performance?
The stock market reflected investors' perceptions that there are now two
different universes of common stocks. The first universe is made up of companies
that are growing quickly because their fortunes are tied to the "new" economy,
with businesses based on the internet, technology and telecommunications. The
second universe is made up of companies that are growing more slowly because
they are tied to the "old" economy. Old economy stocks include just about
anything not heavily involved in technology, telecom or the internet. However,
this is the universe of companies that generate earnings and cash flow to
support dividend payments on their common stocks.
Not surprisingly, it was a difficult period for investing in stocks that
generate a high level of current income, as the performance leaders tended to be
growth stocks with little or no income.
The current environment of rising interest rates also had an effect on the
Fund's performance and the strategies we employed. Higher rates negatively
affected investment results in industry groups that were most vulnerable to the
possibility of an economic slowdown. These included auto parts suppliers,
consumer goods producers and electrical equipment manufacturers. Financial
services and utilities that are interest-rate sensitive were also affected.
Offsetting the difficult performance of the value stocks in the Fund were strong
gains from investments in the convertible securities of telecommunications,
technology and independent power companies, where the greatest growth was
occurring. For example, the best performing security in the Fund was the
convertible preferred of Qualcomm, the digital wireless communications company.
15
<PAGE>
EVERGREEN
Income and Growth Fund
Portfolio Manager Interview
What were your principal strategies in this difficult environment for
income-oriented equity investing?
During the period we sought to reposition the Fund to take advantage of
opportunities in companies with strong growth prospects. We reduced our emphasis
on traditional value stocks in industries that were out of favor and redeployed
the proceeds into convertible securities, both preferred stocks and debentures,
of companies in the fastest growing segments of the economy. As a result, we cut
our weightings in the banking and automotive sectors, as well as in industrial
and insurance companies. During the six months, for example, the Fund's
investments in common stocks of regional banking companies declined from 12.8%
of net assets to 7.7%.
At the same time, we increased our investments in convertible securities, which
rose from 19.3% of net assets to 35% during the six months. We focused
principally on convertible preferred and debentures issued by telecommunications
and technology companies and independent power producers. Companies in these
fast-growing industries typically do not pay dividends to holders of common
stock, but they do issue convertible securities as a way to get capital to
finance their growth. Investing in the convertible securities allowed the Fund
to gain both current income and to participate in the dynamic growth prospects
of these sectors.
Top 5 Industries
----------------
(as a percentage of 1/31/2000 net assets)
Utilities--Electric 18.9%
Banks 8.7%
Telecommunication Services & Equipment 8.4%
Healthcare Products & Services 6.7%
Communication Systems & Services 5.6%
How did this strategy work in the telecommunications industry?
We wanted to tap into the exploding growth rate in telecommunications services
by investing in companies involved in the build-out of the infrastructure that
supports rapidly expanding data transmission and internet usage and providers of
wireless communications services.
Infrastructure-related investments included convertible securities in Qwest
Trends, which is building a long-distance fiber optic network in the U.S., Level
3 Communications, which is building a global fiber optic communications network,
and American Tower, which owns and operates towers that are a necessity for
wireless communications providers. We also invested in the convertible preferred
of Metromedia Fiber Network, which is installing fiber optic communications
systems in major cities to serve primarily business customers. All of these
companies are growing quickly as demand for their services accelerates.
We also maintained investments in AT&T, the diversified company involved in
long-distance, wireless and cable television service, and The Williams
Companies, an energy company that is developing a major telecom network.
What investments did you make in technology?
In expanding our emphasis on technology, we tried to find the convertible
securities of companies with leadership positions in markets that were growing
faster than the overall economy. We purchased convertible securities of a number
of companies that are involved in the internet. They included Exodus
Communications, a leader in operating websites for businesses. Exodus currently
operates half of the 50 most popular sites on the internet. We also invested in
USinternetworking, a leader in providing software over
16
<PAGE>
EVERGREEN
Income and Growth Fund
Portfolio Manager Interview
the internet for small- and medium-sized businesses, and 12 Technologies, which
provides software for business-to-business applications over the internet. Other
internet-related investments included Mail common, which operates e-mail
services, and Excite At Home Corporation, which provides internet access over
cable lines and has investments in other media operations.
Why have you also focused on independent power producers?
This is the fastest-growing area within the electric utility industry. These
independent companies are able to build efficient, low-cost power plants in
areas where power is needed. Because they are not regulated by the states or the
federal government, the independent power producers don't face constraints, such
as limits on the rates of return they can earn, that regulated electric
utilities traditionally faced. As a result, they can grow more quickly than
utilities.
Two companies in which we invested, through convertible securities, were Calpine
and AES Corporation. Calpine is primarily focused in the U.S. and has been
successful building low-cost generating units. That cost advantage has resulted
in superior profit margins for the company. AES has a global strategy, building
plants around the world, including many developing nations, where the need for
new power sources is greatest. As a result, both companies are rapidly growing
their revenues and earnings.
Top 10 Holdings
---------------
(as a percentage of 1/31/2000 net assets)
Qualcomm Financial Trust I, 5.75%,
3/01/2012, convertible preferred 3.9%
Qwest Trends Trust 5.75%, convertible preferred 2.5%
Duke Power Co. 2.3%
The Williams Companies, Inc. 2.3%
CNH Global NV 2.1%
Southern Co. 2.0%
Decs Trust VI,-Metromedia Fiber
6.25%, 11/15/2002, convertible preferred 2.0%
American Tower Corp, 6.25%,
10/15/2009, convertible debenture 2.0%
Level 3 Communications, Inc., 6.00%,
09/15/2009, convertible debenture 1.9%
Utilicorp United, Inc. 1.9%
What is your outlook?
We are cautious. We think the Federal Reserve Board may raise short-term rates
even further in its effort to reduce the pace of economic growth. With the
expectation of additional increases in interest rates, we expect we will
continue to de-emphasize stocks in those sectors vulnerable to interest rate
changes and seek to identify areas which we believe are offering superior growth
prospects. Until the environment changes substantially, we expect to continue
holding a healthy portion of the portfolio in convertible securities of
companies in high growth industries. As in the past, the Fund will continue to
focus on investments that provide income and the potential for capital growth.
17
<PAGE>
EVERGREEN
Small Cap Value Fund
Fund at a Glance as of January 31, 2000
"The acceleration of stock buybacks and merger and acquisition activity in the
small-cap sector could provide a catalyst for the small-cap sector this year."
Portfolio
Management
--------------
[PHOTO] [PHOTO]
Jordan Alexander, Edwin D.Miska
CFA
Tenure:January 1999 Tenure:September 1996
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE 1
- --------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 1/31/2000.
The Equity Style Box placement is based on a fund's price-to-earnings and
price-to-book ratio relative to the S&P 500, as well as the size of the
companies in which it invests, or median market capitalization.
1 Source: 2000 Morningstar, Inc.
2 Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads, fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost.
Historical performance shown for Classes A, B, and C prior to their inception is
based on the performance of Class Y, the original class offered. These
historical returns for Classes A, B, and C have not been adjusted to reflect the
effect of each Class' 12b-1 fees. These fees are 0.25% for Class A and 1.00% for
Classes B and C. Class Y does not pay a 12b-1 fee. If these fees had been
reflected, returns would have been lower.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS 2
- --------------------------------------------------------------------------------
Portfolio Inception Date: 10/1/1993 Class A Class B Class C Class Y
Class Inception Date 1/3/1995 1/3/1995 1/24/1991 0/1/1993
Average Annual Returns*
6 month with sales charge -12.75% -13.22% -10.50% n/a
6 month w/o sales charge -8.38% -8.66% -8.67% -8.19%
1 year with sales charge -6.19% -7.06% -4.22% n/a
1 year w/o sales charge -1.51% -2.20% -2.27% -1.24%
3 years 2.92% 2.91% 3.80% 4.87%
5 years 11.73% 11.73% 11.95% 13.09%
Since Portfolio Inception 9.54% 9.73% 9.70% 10.62%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
6-month income dividends
per share $0.04 $0.01 $0.01 $0.05
* Adjusted for maximum applicable sales charge unless noted.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
Class A CPI Russell 2000 Value Russell 2000
10/31/93 9,526 10,000 10,000 10,000
1/94 9,932 10,034 10,390 10,318
1/95 9,688 10,316 9,829 9,699
1/96 12,452 10,597 12,503 12,593
1/97 15,478 10,920 15,306 14,979
1/98 19,551 11,091 19,491 17,686
1/99 17,991 11,277 18,149 17,745
1/00 17,720 11,574 17,816 20,893
Comparison of a $10,000 investment in Evergreen Small Cap Value Fund, Class A
shares 2, versus a similar investment in the Russell 2000 Index (Russell 2000)
the Russell 2000 Value (Russell 2000 Value) and the Consumer Price Index (CPI).
The Russell 2000 and the Russell 2000 Value are unmanaged market indices which
do not include transaction costs associated with buying and selling securities
nor any mutual fund expenses. The CPI is a commonly used measure of inflation
and does not represent an investment return. It is not possible to invest
directly in an index.
Returns reflect expense limits previously in effect, without which returns would
have been lower.
Smaller capitalization stock investing may offer the potential for greater long
term results, however it is also generally associated with greater price
volatility due to the higher risk of failure.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuation.
18
<PAGE>
EVERGREEN
Small Cap Value Fund
Portfolio Manager Interview
How did the Fund perform?
For the six-month period ended January 31, 2000, the Fund's Class A shares had a
total return of -8.38%. During the same six-month period, the Russell 2000 Value
Index, the Fund's benchmark, returned -6.64%. Fund returns are before the
deduction of any applicable sales charges.
Portfolio
Characteristics
---------------
(as of 1/31/2000 unless noted)
Total Net Assets $178,367,671
Number of Holdings 81
Beta* 0.48
P/E Ratio* 27.4x
*As of 12/31/1999
What factors affected the performance during the six-month period?
The performance of the Fund during the period was held back by an over-weighted
position in the consumer sector, which has been under pressure due to interest
rate concerns and expectations of a slowdown in consumer spending. In addition,
the Fund maintained its long-term emphasis on value style investing. During the
period, the performance of the small-cap market was narrowly focused on the
technology and healthcare sectors, which favored growth and momentum style
investing. The best performing issues in the Russell 2000 were primarily of
companies in the biotechnology and technology sectors that have not reached
profitability and/or have limited operating history. To address the Fund's
performance, we have been restructuring the portfolio to include additional
issues in the technology and healthcare sectors while maintaining our value
discipline and have been reducing the Fund's exposure to consumer cyclical
stocks.
Top 5 Industries
----------------
(as a percentage of 1/31/2000 net assets)
Consumer Products & Services 14.6%
Banks 12.5%
Building, Construction & Furnishings 9.7%
Retailing & Wholesale 9.0%
Healthcare Products & Services 8.7%
What were some of the investments that supported performance during the period?
The portfolio restructuring resulted in some significant successes. Two of the
Fund's best-performing issues during the period were SBS Technologies and CSG
Systems, which were new names added to the portfolio in recent months. The two
issues were each up more than 50% during the period. SBS Technologies designs
custom-embedded computer products for the aerospace, computer, and
telecommunications industries. The company's strong performance was propelled by
several new design developments for the fast-growing telecommunications
industry. CSG Systems provides customer care and billing systems for the
communications market. The company, which maintains its proprietary software
system, has benefited from the trend within the cable television industry to
outsource billing and customer service operations.
Some of the best performance was realized in existing positions in the
technology and healthcare sectors. In technology, investments that helped the
Fund's performance included Scientific Atlanta, rising 118.5% during the period,
and Helix Technology, up 83.6%. Helix Technology manufactures vacuum pumps and
instrumentation components for semiconductor equipment manufacturers, such as
Applied Materials. The company has benefited from the introduction of new
products and a strong recovery in the semiconductor
19
<PAGE>
EVERGREEN
Small Cap Value Fund
Portfolio Manager Interview
capital equipment market. Scientific Atlanta, which manufactures cable TV
set-top boxes and transmission equipment, is benefiting from the upgrading of
the cable TV industry for the introduction of broadband services. We believe the
company has the potential to realize solid earnings growth over the next twelve
months as the cable industry introduces two-way digital services, such as
internet and video-on-demand services using Scientific Atlanta's set-top boxes.
In healthcare, leading performers included ArthroCare Corp., which rose 228.8%
during the period, and Jones Pharma, up 99.6%. ArthroCare has developed several
new products for the arthroscopy market and has excellent potential to expand
its business as it applies its proprietary technology to areas such as spinal
and cosmetic surgery. Jones Pharma is a specialty pharmaceutical company that
focuses on critical care and thyroid disorders. The company is seeing
accelerated earnings growth fueled by solid prescription growth in several areas
as well as an improved competitive position for a key product.
While investments in the technology and healthcare sectors helped performance,
the heavy weighting in the consumer cyclical and financial sectors contributed
to the Fund's under-performance during the period. We have significantly reduced
our emphasis in both sectors, although we expect strong consumer spending to
generate solid earnings growth and improved performance for many of the consumer
names remaining in the portfolio.
Top 10 Holdings
---------------
(as a percentage of 1/31/2000 net assets)
Scientific Atlanta, Inc. 2.6%
Alpharma, Inc., 5.75%, 04/01/2005 2.5%
Granite State Bankshares, Inc. 2.5%
Michael Foods, Inc. 2.4%
ArthroCare Corp. 2.4%
Whole Foods Market, Inc. 2.3%
AmeriSource Health Corp., Cl. A 2.2%
SBS Technologies, Inc. 2.2%
Guess?, Inc. 2.1%
Lancaster Colony Corp. 2.0%
What is your outlook?
We are very positive about the potential for strong small-cap stock performance.
The valuation of the Russell 2000 Index, a measure of small-cap stock
performance, relative to the S&P 500, a measure of large-cap performance,
remains at a very attractive level. In the past, the small-cap sector posted
dramatic gains following similar periods of underperformance. For example,
small-caps more than doubled in 1975-76 and were up over 65% in 1990-91 after
declining about 20% in the preceding year. The acceleration of stock buybacks
and merger and acquisition activity in the small-cap sector could provide a
catalyst for the small-cap sector this year. Favorable small-cap performance has
generally coincided with periods of strong cyclical growth, lower relative cost
of capital, and a more profitable business environment. Despite concerns about
the cost of capital for small-cap companies relative to larger companies, we
believe the overall economic outlook for earnings growth and profitability
supports a favorable trend.
20
<PAGE>
EVERGREEN
Utility Fund
Fund at a Glance as of January 31, 2000
"Technological advances in communications and rising demand for communications
services by both businesses and consumers created enormous growth
opportunities."
Portfolio
Management
[PHOTO] [PHOTO]
Matthew D. Finn, CFA Doris Kelley-Watkins
Tenure: May 1999 Tenure: February 1997
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE 1
- --------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 1/31/2000.
The Equity Style Box placement is based on a fund's price-to-earnings and
price-to-book ratio relative to the S&P 500, as well as the size of the
companies in which it invests, or median market capitalization.
1Source: 2000 Morningstar, Inc.
2Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads, fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost.
Historical performance shown for Classes C and Y prior to their inception is
based on the performance of Class A, one of the original classes offered along
with Class B. These historical returns for Classes C and Y have not been
adjusted to reflect the effect of each Class' 12b-1 fees. These fees are 0.25%
for Class A and 1.00% for Classes B and C. Class Y does not pay a 12b-1 fee. If
these fees had been reflected, returns for Class C would have been lower while
returns for Class Y would have been higher.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS 2
- --------------------------------------------------------------------------------
Portfolio Inception Date: 1/4/1994 Class A Class B Class C Class Y
Class Inception Date 1/4/1994 1/4/1994 9/2/1994 2/28/1994
Average Annual Returns*
6 month with sales charge 15.64% 15.85% 18.94% n/a
6 month w/o sales charge 21.40% 20.85% 20.94% 21.53%
1 year with sales charge 38.53% 39.35% 42.45% n/a
1 year w/o sales charge 45.40% 44.35% 44.45% 45.87%
3 years 22.69% 23.08% 23.76% 25.00%
5 years 19.88% 19.94% 20.14% 21.34%
Since Portfolio Inception 15.81% 15.89% 15.97% 17.02%
Maximum Sales Charge 4.75% 5.00% 1.00% n/a
Front End CDSC CDSC
6-month income dividends
per share $0.17 $0.12 $0.12 $0.19
6-month capital gain distributions
per share $1.18 $1.18 $1.18 $1.18
*Adjusted for maximum applicable sales charge unless noted.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
Period End Class A CPI S&P 500 S&P Utilities
1-31-94 9,523 10,000 10,000 10,000
1-95 9,344 10,280 10,053 9,333
1-96 11,936 10,561 13,940 11,845
1-97 12,530 10,882 17,612 11,551
1-98 15,490 11,053 22,351 12,671
1-99 16,682 11,238 29,620 13,876
1-00 24,299 11,535 32,679 14,099
Comparison of change in value of a $10,000 investment in Evergreen Utility Fund
Class A shares2, the Standard and Poor's Utility Index (S&P Utilities), the
Standard and Poor's 500 Index (S&P 500) and the Consumer Price Index (CPI).
The S&P Utilities and the S&P 500 are unmanaged market indices which do not
include transaction costs associated with buying and selling securities nor any
mutual fund expenses. The CPI is a commonly used measure of inflation and does
not represent an investment return. It is not possible to invest directly in an
index.
Returns reflect expense limits previously in effect, without which returns would
have been lower.
Funds that concentrate their investments in a single industry may face increased
risk of price fluctuation over more diversified funds due to adverse
developments within that industry.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
21
<PAGE>
EVERGREEN
Utility Fund
Portfolio Manager Interview
How did the Fund perform?
For the six-month period ended January 31, 2000, the Fund's Class A shares had a
total return of 21.40%. During the same period, the average return of utility
mutual funds was 9.50%, according to Lipper Inc., an independent monitor of
mutual fund performance, while the Standard & Poor's Utilities Index returned
0.90%. Fund returns are before the deduction of any applicable sales charges.
Portfolio
Characteristics
---------------
(as of 1/31/2000 unless noted)
Total Net Assets $203,108,344
Number of Holdings 49
Beta* 0.54
P/E Ratio* 20.8x
* As of 12/31/1999
What was the investment environment like during the six-month period?
Throughout the six-month period, we witnessed a continuation of the dominant
trends that had been in place for more than a year: telecommunications stocks
offered significant growth opportunities while traditional utility stocks tended
to lose value.
Traditional electric and gas utility stocks are highly influenced by three
factors, all of which had a negative impact during the period: interest rates;
earnings growth; and weather. Interest rates rose significantly, adversely
affecting interest-sensitive stocks such as utilities. At the same time,
electric and gas utilities, most of which remained highly regulated, had very
little earnings growth. Finally, a pattern of relatively mild weather in both
the summer and winter held back demand for energy for either air conditioning or
heating, and limited the revenue growth of these types of utilities.
Telecommunications presented a very different story. Technological advances in
communications and rising demand for communications services by both businesses
and consumers created enormous growth opportunities. While the best investment
results were realized from wireless service providers, the beneficiaries of
these trends ranged throughout the industry and also included regional Bell
operating companies and telecommunications equipment companies.
Top 5 Industries
----------------
(as a percentage of 1/31/2000 net assets)
Utilities--Electric 31.9%
Utilities--Telephone 22.2%
Communication Systems & Services 11.8%
Telecommunication Services & Equipment 7.8%
Utilities--Gas 7.2%
What strategies did you pursue in this environment?
We manage for total return--a combination of price appreciation and current
income. During the six-month period, we continued to emphasize the
telecommunications sector, which we had built up earlier in 1999. On January 31,
2000 approximately 47% of the Fund's net assets were invested in
telecommunications-related common stocks or convertible securities.
Within telecommunications, we invested throughout the industry, including
wireless service providers, long-distance companies, regional Bell operating
companies, competitive local exchange companies, long-haul fiber optic
companies, wireless infrastructure and telecommunications equipment companies.
We invested in convertible securities as well as in common stock because of the
superior income the
22
<PAGE>
EVERGREEN
Utility Fund
Portfolio Manager Interview
convertibles offer. This tactic allows us to invest in a high-growth area where
many of the stocks do not pay dividends, and yet still receive current income.
One of the largest positions in the Fund, for example, was the 5.75% convertible
preferred stock of Qualcomm, a leading wireless equipment company. We also
invested in the 6.25% convertible bond of American Tower, a wireless
infrastructure company that builds and operates towers for wireless antennas,
and the 6% convertible security of Level Three, a telecommunications networking
company.
Among other telecommunications companies in the top 10 holdings were: Nextel
Communications, a national wireless service provider; Sprint, the national
long-distance and wireless communications company; AT&T, which is expanding from
its traditional long-distance base toward greater emphasis on all
telecommunications products and services; BellSouth, a regional Bell operating
company; and GTE, a diversified telecommunications company.
Two of the Fund's ten largest holdings were outside telecommunications. The Fund
had major investments in Enron, a diversified energy company that was the Fund's
largest position, and Scottish Power, which the Fund held after Scottish Power
acquired Pacific Corp., a domestic electric utility. Scottish Power was the
Fund's tenth largest position.
When we looked at independent power producers, we searched for companies with
catalysts to propel future earnings growth. AES and Calpine, both independent
power companies, were among the better performing investments.
Top 10 Holdings
---------------
(as a percentage of 1/31/2000 net assets)
Enron Corp. 4.6%
Nextel Communications, Inc., Cl A 4.6%
Level 3 Communications, Inc.
6.00%, 9/15/2009, convertible debenture 3.3%
Qualcomm Financial Trust I, 5.75%,
3/01/2012, convertible preferred 3.2%
Sprint Corp. 3.2%
Decs Trust VI--Metromedia Fiber
6.25%,11/15/2002, convertible preferred 3.1%
AT&T Corp. 2.7%
BellSouth Corp. 2.6%
GTE Corp. 2.5%
Scottish Power Plc, ADR 2.5%
What is the outlook for investing in utilities?
Generally, we believe the outlook is much more favorable for telecommunications
stocks than it is for electric utility stocks. We suspect that interest rates
either will continue to move upward or to be flat. This would negatively affect
electric and gas utility stocks. Our investments in these companies will be
selective, and directed toward securities that either can provide above-average
current income for the portfolio or that have a catalyst that can spark earnings
growth and/or price appreciation.
We expect to continue to look toward telecommunications industry stocks for
their price appreciation potential. We plan to take advantage of the global
telecommunications revolution that offers growth potential very few other
industries can match.
23
<PAGE>
EVERGREEN
Value Fund
Fund at a Glance as of January 31, 2000
"We believe that if and when investors start paying more attention to stock
valuations, there are some very strong underpinnings for a sustained rally in
value-oriented stocks."
Portfolio
Management
----------
[PHOTO]
Matthew D. Finn, CFA
Tenure: March 1998
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE 1
- --------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 1/31/2000.
The Equity Style Box placement is based on a fund's price-to-earnings and
price-to-book ratio relative to the S&P 500, as well as the size of the
companies in which it invests, or median market capitalization.
1 Source: 2000 Morningstar, Inc.
2 Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads, fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost.
Historical performance shown for Classes B, C, and Y prior to their inception is
based on the performance of Class A, the original class offered. These
historical returns for Classes B, C, and Y have not been adjusted to reflect the
effect of each Class' 12b-1 fees. These fees are 0.25% for Class A and 1.00% for
Classes B and C. Class Y does not pay a 12b-1 fee. If these fees had been
reflected, returns for Classes B and C would have been lower while returns for
Class Y would have been higher.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS 2
- --------------------------------------------------------------------------------
Portfolio Inception Date: 4/12/1985 Class A Class B Class C Class Y
Class Inception Date 4/12/1985 2/2/1993 9/2/1994 1/3/1991
Average Annual Returns*
6 month with sales charge -11.76% -11.72% -9.31% n/a
6 month w/o sales charge -7.36% -7.70% -7.71% -7.24%
1 year with sales charge -7.50% -7.78% -5.26% n/a
1 year w/o sales charge -2.87% -3.58% -3.58% -2.62%
3 years 7.93% 8.10% 8.89% 9.97%
5 years 15.21% 15.27% 15.51% 16.63%
10 years 12.27% 12.29% 12.38% 13.10%
Since Portfolio Inception 12.96% 12.96% 13.03% 13.52%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
6-month income distribution
per share $0.09 $0.01 $0.01 $0.12
6-month capital gain distributions
per share $3.11 $3.11 $3.11 $3.11
* Adjusted for maximum applicable sales charge unless noted.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
Russell
Period End Class A CPI S & P 500 1000 Value
1/31/90 9,525 10,000 10,000 10,000
1/91 10,052 10,565 10,839 10,244
1/92 11,907 10,840 13,299 12,233
1/93 13,092 11,193 14,706 14,305
1/94 14,691 11,476 16,600 17,042
1/95 14,901 11,797 16,688 16,589
1/96 19,660 12,119 23,140 22,960
1/97 24,065 12,488 29,236 28,397
1/98 28,304 12,684 37,103 36,098
1/99 32,700 12,896 49,169 42,678
1/00 31,760 13,237 54,246 43,972
Comparison of a $10,000 investment in Evergreen Value Fund, Class A shares 2,
versus a similar investment in the Standard & Poor's 500 Index (S&P 500), the
Russell 1000 Value Index (Russell 1000 Value ) and the Consumer Price Index
(CPI).
The S&P 500 and the Russell 1000 Value are unmanaged market indices which do not
include transaction costs associated with buying and selling securities nor any
mutual fund expenses. The CPI is a commonly used measure of inflation and does
not represent an investment return. It is not possible to invest directly in an
index.
Returns reflect expense limits previously in effect, without which returns would
have been lower.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
24
<PAGE>
EVERGREEN
Value Fund
Portfolio Manager Interview
How did the Fund perform?
For the six-month period ended January 31, 2000, the Fund's Class A shares had a
total return of -7.36%. During the same period, the Fund's benchmarks, Standard
& Poor's 500 and the Russell 1000 Value had returns of 5.59% and -5.22%,
respectively. The median return of multi-cap value funds was -6.04%, according
to Lipper Inc., an independent monitor of mutual fund performance. Fund returns
are before the deduction of any applicable sales charges.
Portfolio
Characteristics
---------------
(as of 1/31/2000 unless noted)
Total Net Assets $754,145,013
Number of Holdings 86
Beta* 0.86
P/E Ratio* 15.8x
*As of 12/31/1999
What was the investment environment like during the six-month period?
Value strategies lagged growth strategies during the six-month period, as the
sectors that value investors typically emphasize--such as financial services and
cyclical industries--lagged the performance gained from growth areas such as
technology.
Interest rates were an important factor. Shortly before the period began, the
U.S. Federal Reserve Board began raising short-term interest rates. The Federal
Reserve Board subsequently raised rates twice more during the period to slow
economic growth and avert inflation. Bond market investors, however, did not
appear to be as concerned about potential inflation as did the Federal Reserve
Board. As a result, longer-term rates did not rise as sharply as short-term
rates, and at times the yield curve inverted, that is, some longer term rates
were lower than some rates of shorter-term securities. This inversion of the
yield curve sometimes happens when the Federal Reserve Board acts very
aggressively to head off inflation. Financial services stocks--many of which
depend on the "spread" between short-term and long-term rates-were particularly
hard hit in this environment of rising short-term rates. Other cyclical
industries that are sensitive to movements in the business cycle such as basic
materials and retailing were also adversely affected.
Particularly during November and December 1999, investors appeared to favor
stable companies and technology companies, particularly the so-called "dot-com"
stocks of companies involved in commerce on the internet. The Fund, which
emphasizes stocks of reasonable valuations, did not own very many "dot-com"
stocks, which were very highly priced.
Top 5 Industries
----------------
(as a percentage of 1/31/2000 net assets)
Finance & Insurance 14.5%
Oil / Energy 9.9%
Healthcare Products & Services 9.3%
Utilities--Telephone 8.3%
Information Services & Technology 8.0%
What strategies did you pursue in this environment?
We reduced our holdings in the interest-rate-sensitive financial services and
cyclical industries. At the end of the period, financial services stocks
comprised about 22% of net assets, compared to a 29% representation in the
Russell 1000 Value Index. Within financial services, we looked for companies
that had some type of earnings growth, either from their distinct businesses or
from cost-cutting programs. With some exceptions,
25
<PAGE>
EVERGREEN
Value Fund
Portfolio Manager Interview
we downplayed bank stocks. When we did invest in banks, we focused on companies
such as Fleet Bank or Union Bank of California that were undergoing
restructuring programs. We also favored large, money-center institutions such as
Citigroup and Chase Manhattan that had global franchises and businesses that
participated in capital markets activity. We also sought out growth in stocks
such as Fannie Mae, involved in mortgages, and AMBAC, involved in municipal bond
insurance.
Among cyclical stocks, we reduced our investments in basic materials, such as
aluminum and paper companies.
We increased our emphasis on healthcare industry stocks, where we saw attractive
stock valuations and fundamentally strong, growing businesses. We added
pharmaceutical companies, hospital companies and healthcare services. Although
healthcare stocks did not enjoy strong performance in 1999, we saw attractive
value and the potential for strong, long-term performance. Among the companies
in which we invested were Merck and American Home Products, two leading
pharmaceutical companies; Health Management Associates, a hospital management
company; and Quest Diagnostics, which is involved in medical testing. One major
holding, Pharmacia & Upjohn, had somewhat disappointing performance during the
period because of controversy over its acquisition of Monsanto. We believe,
however, that Pharmacia & Upjohn has very strong long-term potential.
Our technology holdings tended to be long-term industry leaders such as Intel,
Motorola, Hewlett-Packard and IBM, all of which performed well. We also added
some mid-cap names such as Symantec, a software company that rebounded well,
Varian, a semi-conductor company, and Keane Inc., another software company.
Top 10 Holdings
---------------
(as a percentage of 1/31/2000 net assets)
Exxon Mobile Corp. 5.3%
UnionBancal Corp. 2.8%
AMBAC Financial Group, Inc. 2.3%
GTE Corp. 2.3%
Federal National Mortgage Assoc. 2.1%
General Electric Co. 2.0%
American Power Conversion Corp. 1.9%
FleetBoston Financial Corp. 1.9%
BellSouth Corp. 1.7%
Citigroup, Inc. 1.7%
What is your outlook?
Long-term, we are very bullish, although we may have to wait for an end of the
market's infatuation with high-priced technology stocks. We think recent market
activity has created some very attractive values in selected sectors, such as
financial services, where we believe there are many very good companies whose
stocks are trading at excellent values. Healthcare and utility industry stocks
also offer some interesting values.
We believe that if and when investors start paying more attention to stock
valuations, there are some very strong underpinnings for a sustained rally in
value-oriented stocks. One of the important factors that will affect the market,
however, is the Federal Reserve Board and whether it can successfully engineer a
"soft landing" in the economy.
26
<PAGE>
EVERGREEN
Blue Chip Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31,
January 31, 2000 # ----------------------
(Unaudited) 1999 1998 (a)
<S> <C> <C> <C>
CLASS A SHARES
Net asset value, beginning of
period $32.88 $ 30.42 $ 27.39
------ --------- ---------
Income from investment operations
Net investment income (loss) (0.02) 0.05 0.08
Net realized and unrealized gains
on securities 4.09 4.82 3.01
------ --------- ---------
Total from investment operations 4.07 4.87 3.09
------ --------- ---------
Distributions to shareholders from
Net investment income 0 (0.03) (0.06)
Net realized gains (2.40) (2.38) 0
------ --------- ---------
Total distributions (2.40) (2.41) (0.06)
------ --------- ---------
Net asset value, end of period $34.55 $ 32.88 $ 30.42
------ --------- ---------
Total return* 12.44% 17.29% 11.29%
Ratios and supplemental data
Net assets, end of period
(millions) $ 466 $ 382 $ 285
Ratios to average net assets
Expenses** 1.17%+ 1.20% 1.20%+
Net investment income (loss) (0.09%)+ 0.19% 0.49%+
Portfolio turnover rate 66% 111% 112%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended August 31,
January 31, 2000 # ----------------------- -------------------------
(Unaudited) 1999 1998 (b) 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $32.54 $ 30.35 $ 29.79 $ 25.05 $ 22.98 $ 23.21
------ --------- --------- ------- ------- -------
Income from investment
operations
Net investment income
(loss) (0.14) (0.05) (0.12) 0.15 0.12 0.25
Net realized and
unrealized gains on
securities 4.03 4.62 5.72 7.97 3.69 2.66
------ --------- --------- ------- ------- -------
Total from investment
operations 3.89 4.57 5.60 8.12 3.81 2.91
------ --------- --------- ------- ------- -------
Distributions to
shareholders from
Net investment income 0 0 (0.08) (0.20) (0.76) (0.36)
Net realized gains (2.40) (2.38) (4.96) (3.18) (0.98) (2.78)
------ --------- --------- ------- ------- -------
Total distributions (2.40) (2.38) (5.04) (3.38) (1.74) (3.14)
------ --------- --------- ------- ------- -------
Net asset value, end of
period $34.03 $ 32.54 $ 30.35 $ 29.79 $ 25.05 $ 22.98
------ --------- --------- ------- ------- -------
Total return* 12.01% 16.26% 20.89% 34.76% 17.31% 13.87%
Ratios and supplemental
data
Net assets, end of
period (millions) $ 376 $ 255 $ 118 $ 313 $ 225 $ 199
Ratios to average net
assets
Expenses** 1.92%+ 1.95% 1.68%+ 1.57% 1.85% 1.75%
Net investment income
(loss) (0.85%)+ (0.60%) (0.02%)+ 0.55% 0.52% 1.09%
Portfolio turnover rate 66% 111% 112% 109% 139% 115%
</TABLE>
(a) For the period from January 20, 1998 (commencement of class operations) to
July 31, 1998.
(b) For the eleven months ended July 31, 1998. The Fund changed its fiscal
year end from August 31 to July 31, effective July 31, 1998.
* Excluding applicable sales charges.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the
period.
See Combined Notes to Financial Statements.
27
<PAGE>
EVERGREEN
Blue Chip Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended July
Six Months Ended 31,
January 31, 2000 # -----------------
(Unaudited) 1999 1998 (a)
<S> <C> <C> <C>
CLASS C SHARES
Net asset value, beginning of period $32.63 $30.40 $27.70
------ ------ ------
Income from investment operations
Net investment income (loss) (0.14) (0.11) 0
Net realized and unrealized gains on
securities 4.04 4.72 2.72
------ ------ ------
Total from investment operations 3.90 4.61 2.72
------ ------ ------
Distributions to shareholders from
Net investment income 0 0 (0.02)
Net realized gains (2.40) (2.38) 0
------ ------ ------
Total distributions (2.40) (2.38) (0.02)
------ ------ ------
Net asset value, end of period $34.13 $32.63 $30.40
------ ------ ------
Total return* 12.01% 16.37% 9.80%
Ratios and supplemental data
Net assets, end of period (thousands) $7,035 $2,969 $ 780
Ratios to average net assets
Expenses** 1.93%+ 1.95% 2.02%+
Net investment loss (0.87%)+ (0.67%) (0.27%)+
Portfolio turnover rate 66% 111% 112%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
January 31, 2000 # Period Ended
(Unaudited) July 31, 1999 (b)
<S> <C> <C>
CLASS Y SHARES
Net asset value, beginning of period $32.62 $32.30
------ ------
Income from investment operations
Net investment income 0.01 0
Net realized and unrealized gains on
securities 4.07 0.32
------ ------
Total from investment operations 4.08 0.32
------ ------
Distributions to shareholders from
Net realized gains (2.40) 0
------ ------
Total distributions (2.40) 0
------ ------
Net asset value, end of period $34.30 $32.62
------ ------
Total return 12.58% 0.99%
Ratios and supplemental data
Net assets, end of period (thousands) $6,646 $ 789
Ratios to average net assets
Expenses** 0.94%+ 0.95%+
Net investment income 0.08%+ 0.08%+
Portfolio turnover rate 66% 111%
</TABLE>
(a) For the period from January 22, 1998 (commencement of class operations) to
July 31, 1998.
(b) For the period from April 30, 1999 (commencement of class operations) to
July 31, 1999.
* Excluding applicable sales charges.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
28
<PAGE>
EVERGREEN
Equity Income Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended November 30,
January 31, 2000 --------------------------- ------------------------
(Unaudited) 1999 # 1998 1997 (a) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 20.17 $ 21.65 $ 20.69 $ 17.33 $ 13.83 $ 11.75
------- ------- -------- ------- ----------- -----------
Income from investment
operations
Net investment income 0.15 0.33 0.21 0.18 0.26 0.25
Net realized and
unrealized gains or
losses on securities (1.43) 1.22 2.46 3.34 3.83 2.80
------- ------- -------- ------- ----------- -----------
Total from investment
operations (1.28) 1.55 2.67 3.52 4.09 3.05
------- ------- -------- ------- ----------- -----------
Distributions to
shareholders from
Net investment income (0.19) (0.29) (0.19) (0.16) (0.26) (0.32)
Net realized gains (2.99) (2.74) (1.52) 0 (0.33) (0.65)
------- ------- -------- ------- ----------- -----------
Total distributions (3.18) (3.03) (1.71) (0.16) (0.59) (0.97)
------- ------- -------- ------- ----------- -----------
Net asset value, end of
period $ 15.71 $ 20.17 $ 21.65 $ 20.69 $ 17.33 $ 13.83
------- ------- -------- ------- ----------- -----------
Total return* (7.11%) 8.20% 13.85% 20.40% 29.83% 26.57%
Ratios and supplemental
data
Net assets, end of
period (thousands) $38,680 $50,213 $ 52,667 $47,812 $ 40,487 $ 27,037
Ratios to average net
assets
Expenses** 1.20%+ 1.17% 1.21% 1.24%+ 1.41% 1.69%
Net investment income 1.66%+ 1.68% 1.01% 1.46%+ 1.66% 1.94%
Portfolio turnover rate 34% 106% 66% 41% 41% 77%
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended November 30,
January 31, 2000 --------------------------- ------------------------
(Unaudited) 1999 # 1998 1997 (a) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 20.06 $ 21.56 $ 20.63 $ 17.31 $ 13.84 $ 11.77
------- ------- -------- ------- ----------- -----------
Income from investment
operations
Net investment income 0.08 0.18 0.06 0.09 0.15 0.15
Net realized and
unrealized gains or
losses on securities (1.43) 1.21 2.45 3.31 3.80 2.82
------- ------- -------- ------- ----------- -----------
Total from investment
operations (1.35) 1.39 2.51 3.40 3.95 2.97
------- ------- -------- ------- ----------- -----------
Distributions to
shareholders from
Net investment income (0.12) (0.15) (0.06) (0.08) (0.15) (0.25)
Net realized gains (2.99) (2.74) (1.52) 0 (0.33) (0.65)
------- ------- -------- ------- ----------- -----------
Total distributions (3.11) (2.89) (1.58) (0.08) (0.48) (0.90)
------- ------- -------- ------- ----------- -----------
Net asset value, end of
period $ 15.60 $ 20.06 $ 21.56 $ 20.63 $ 17.31 $ 13.84
------- ------- -------- ------- ----------- -----------
Total return* (7.49%) 7.39% 13.01% 19.68% 28.73% 25.59%
Ratios and supplemental
data
Net assets, end of
period (thousands) $55,956 $78,049 $105,748 $94,309 $ 43,526 $ 20,605
Ratios to average net
assets
Expenses** 1.95%+ 1.93% 1.97% 2.02%+ 2.18% 2.47%
Net investment income 0.91%+ 0.91% 0.25% 0.58%+ 0.88% 1.06%
Portfolio turnover rate 34% 106% 66% 41% 41% 77%
</TABLE>
(a) For the eight months ended July 31, 1997. The Fund changed its fiscal year
end from November 30 to July 31, effective July 31, 1997.
* Excluding applicable sales charges.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
29
<PAGE>
EVERGREEN
Equity Income Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended November 30,
January 31, 2000 -------------------------- -----------------------
(Unaudited) 1999 # 1998 1997 (a) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value,
beginning of period $ 20.08 $ 21.58 $ 20.65 $ 17.32 $ 13.85 $ 11.78
------- ------- ------- ------- ------------ -----------
Income from investment
operations
Net investment income 0.08 0.18 0.05 0.09 0.14 0.16
Net realized and
unrealized gains or
losses on securities (1.43) 1.21 2.46 3.32 3.81 2.81
------- ------- ------- ------- ------------ -----------
Total from investment
operations (1.35) 1.39 2.51 3.41 3.95 2.97
------- ------- ------- ------- ------------ -----------
Distributions to
shareholders from
Net investment income (0.12) (0.15) (0.06) (0.08) (0.15) (0.25)
Net realized gains (2.99) (2.74) (1.52) 0 (0.33) (0.65)
------- ------- ------- ------- ------------ -----------
Total distributions (3.11) (2.89) (1.58) (0.08) (0.48) (0.90)
------- ------- ------- ------- ------------ -----------
Net asset value, end of
period $ 15.62 $ 20.08 $ 21.58 $ 20.65 $ 17.32 $ 13.85
------- ------- ------- ------- ------------ -----------
Total return* (7.49%) 7.38% 12.99% 19.73% 28.71% 25.57%
Ratios and supplemental
data
Net assets, end of
period (thousands) $11,938 $16,952 $20,851 $21,125 $ 14,562 $ 9,503
Ratios to average net
assets
Expenses** 1.95%+ 1.93% 1.97% 2.01%+ 2.17% 2.47%
Net investment income 0.91%+ 0.91% 0.25% 0.66%+ 0.89% 1.16%
Portfolio turnover rate 34% 106% 66% 41% 41% 77%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31,
January 31, 2000 ------------------------
(Unaudited) 1999 # 1998 1997 (b)
<S> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value, beginning of
period $20.12 $21.61 $20.62 $17.74
------ ------ ------ ------
Income from investment operations
Net investment income 0.24 0.37 0.24 0.18
Net realized and unrealized gains
or losses on securities (1.50) 1.22 2.51 2.86
------ ------ ------ ------
Total from investment operations (1.26) 1.59 2.75 3.04
------ ------ ------ ------
Distributions to shareholders
Net investment income (0.21) (0.34) (0.24) (0.16)
Net realized gains (2.99) (2.74) (1.52) 0
------ ------ ------ ------
Total distributions (3.20) (3.08) (1.76) (0.16)
------ ------ ------ ------
Net asset value, end of period $15.66 $20.12 $21.61 $20.62
------ ------ ------ ------
Total return (7.00%) 8.44% 14.29% 17.22%
Ratios and supplemental data
Net assets, end of period
(thousands) $ 105 $ 651 $ 111 $ 93
Ratios to average net assets
Expenses** 0.93%+ 0.87% 0.93% 1.34%+
Net investment income 1.88%+ 1.98% 1.31% 0.79%+
Portfolio turnover rate 34% 106% 66% 41%
</TABLE>
(a) For the eight months ended July 31, 1997. The Fund changed its fiscal year
end from November 30 to July 31, effective July 31, 1997.
(b) For the period from January 13, 1997 (commencement of class operations) to
July 31, 1997.
* Excluding applicable sales charges.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
30
<PAGE>
EVERGREEN
Growth and Income Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended December 31,
January 31, 2000 -------------------------- -----------------------
(Unaudited) 1999 1998 1997 (b) 1996 1995 (a)
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $29.56 $29.14 $27.26 $22.53 $ 18.63 $ 14.48
------ ------ ------ ------ ----------- -----------
Income from investment
operations
Net investment income
(loss) (0.03) 0.10 0.16 0.08 0.12 0.13
Net realized and
unrealized gains on
securities 1.43 1.16 2.86 4.72 4.26 4.64
------ ------ ------ ------ ----------- -----------
Total from investment
operations 1.40 1.26 3.02 4.80 4.38 4.77
------ ------ ------ ------ ----------- -----------
Distributions to
shareholders from
Net investment income 0 (0.06) (0.13) (0.07) (0.13) (0.14)
Net realized gains (0.60) (0.78) (1.01) 0 (0.35) (0.48)
------ ------ ------ ------ ----------- -----------
Total distributions (0.60) (0.84) (1.14) (0.07) (0.48) (0.62)
------ ------ ------ ------ ----------- -----------
Net asset value, end of
period $30.36 $29.56 $29.14 $27.26 $ 22.53 $ 18.63
------ ------ ------ ------ ----------- -----------
Total return* 4.77% 4.48% 11.26% 21.33% 23.50% 33.00%
Ratios and supplemental
data
Net assets, end of
period (millions) $ 234 $ 250 $ 296 $ 166 $ 85 $ 19
Ratios to average net
assets
Expenses** 1.46%+ 1.43% 1.46% 1.47%+ 1.41% 1.55%+
Net investment income
(loss) (0.25%)+ 0.33% 0.61% 0.57%+ 0.70% 0.99%+
Portfolio turnover rate 33% 39% 20% 6% 14% 17%
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended December 31,
January 31, 2000 -------------------------- -----------------------
(Unaudited) 1999 1998 1997 (b) 1996 1995 (a)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $29.14 $28.88 $27.10 $22.43 $ 18.59 $ 14.48
------ ------ ------ ------ ----------- -----------
Income from investment
operations
Net investment income
(loss) (0.18) (0.14) (0.02) (0.02) 0 0.05
Net realized and
unrealized gains on
securities 1.45 1.18 2.81 4.69 4.20 4.61
------ ------ ------ ------ ----------- -----------
Total from investment
operations 1.27 1.04 2.79 4.67 4.20 4.66
------ ------ ------ ------ ----------- -----------
Distributions to
shareholders from
Net investment income 0 0 0 0 (0.01) (0.07)
Net realized gains (0.60) (0.78) (1.01) 0 (0.35) (0.48)
------ ------ ------ ------ ----------- -----------
Total distributions (0.60) (0.78) (1.01) 0 (0.36) (0.55)
------ ------ ------ ------ ----------- -----------
Net asset value, end of
period $29.81 $29.14 $28.88 $27.10 $ 22.43 $ 18.59
------ ------ ------ ------ ----------- -----------
Total return* 4.39% 3.73% 10.44% 20.82% 22.60% 32.20%
Ratios and supplemental
data
Net assets, end of
period (millions) $ 799 $ 891 $1,000 $ 542 $ 245 $ 46
Ratios to average net
assets
Expenses** 2.21%+ 2.18% 2.21% 2.25%+ 2.17% 2.24%+
Net investment income
(loss) (1.01%)+ (0.43%) (0.14%) (0.19%)+ (0.06%) 0.30%+
Portfolio turnover rate 33% 39% 20% 6% 14% 17%
</TABLE>
(a) For the period from January 3, 1995 (commencement of class operations) to
December 31, 1995.
(b) For the seven months ended July 31, 1997. The Fund changed its fiscal year
end from December 31 to July 31, effective July 31, 1997.
* Excluding applicable sales charges.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
See Combined Notes to Financial Statements.
31
<PAGE>
EVERGREEN
Growth and Income Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended December 31,
January 31, 2000 -------------------------- -----------------------
(Unaudited) 1999 1998 1997 (b) 1996 1995 (a)
<S> <C> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value,
beginning of period $29.14 $28.89 $27.10 $22.43 $ 18.58 $ 14.48
------ ------ ------ ------ ----------- -----------
Income from investment
operations
Net investment income
(loss) (0.20) (0.16) (0.02) (0.02) 0 0.06
Net realized and
unrealized gains on
securities 1.47 1.19 2.82 4.69 4.21 4.60
------ ------ ------ ------ ----------- -----------
Total from investment
operations 1.27 1.03 2.80 4.67 4.21 4.66
------ ------ ------ ------ ----------- -----------
Distributions to
shareholders from
Net investment income 0 0 0 0 (0.01) (0.08)
Net realized gains (0.60) (0.78) (1.01) 0 (0.35) (0.48)
------ ------ ------ ------ ----------- -----------
Total distributions (0.60) (0.78) (1.01) 0 (0.36) (0.56)
------ ------ ------ ------ ----------- -----------
Net asset value, end of
period $29.81 $29.14 $28.89 $27.10 $ 22.43 $ 18.58
------ ------ ------ ------ ----------- -----------
Total return* 4.39% 3.69% 10.47% 20.82% 22.60% 32.20%
Ratios and supplemental
data
Net assets, end of
period (millions) $ 30 $ 37 $ 50 $ 24 $ 10 $ 20
Ratios to average net
assets
Expenses** 2.21%+ 2.18% 2.21% 2.25%+ 2.17% 2.15%+
Net investment income
(loss) (1.00%)+ (0.42%) (0.13%) (0.19%)+ (0.06%) 0.35%+
Portfolio turnover rate 33% 39% 20% 6% 14% 17%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended December 31,
January 31, 2000 ------------------------ -----------------------
(Unaudited) 1999 1998 1997 (b) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $29.65 $29.19 $27.29 $22.55 $ 18.64 $ 14.52
------ ------ ------ ------ ----------- -----------
Income from investment
operations
Net investment income 0.03 0.19 0.24 0.11 0.18 0.18
Net realized and
unrealized gains on
securities 1.42 1.15 2.87 4.73 4.25 4.59
------ ------ ------ ------ ----------- -----------
Total from investment
operations 1.45 1.34 3.11 4.84 4.43 4.77
------ ------ ------ ------ ----------- -----------
Distributions to
shareholders from
Net investment income 0 (0.10) (0.20) (0.10) (0.17) (0.17)
Net realized gains (0.60) (0.78) (1.01) 0 (0.35) (0.48)
------ ------ ------ ------ ----------- -----------
Total distributions (0.60) (0.88) (1.21) (0.10) (0.52) (0.65)
------ ------ ------ ------ ----------- -----------
Net asset value, end of
period $30.50 $29.65 $29.19 $27.29 $ 22.55 $ 18.64
------ ------ ------ ------ ----------- -----------
Total return 4.92% 4.75% 11.56% 21.52% 23.80% 32.90%
Ratios and supplemental
data
Net assets, end of
period (millions) $ 553 $ 634 $ 801 $ 616 $ 442 $ 141
Ratios to average net
assets
Expenses** 1.21%+ 1.18% 1.20% 1.21%+ 1.16% 1.27%
Net investment income 0.00%+ 0.57% 0.86% 0.82%+ 0.93% 1.11%
Portfolio turnover rate 33% 39% 20% 6% 14% 17%
</TABLE>
(a) For the period from January 3, 1995 (commencement of class operations) to
December 31, 1995.
(b) For the seven months ended July 31, 1997. The Fund changed its fiscal year
end from December 31 to July 31, effective July 31, 1997.
* Excluding applicable sales charges.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
See Combined Notes to Financial Statements.
32
<PAGE>
EVERGREEN
Income and Growth Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended
Six Months Ended Year Ended July 31, January 31,
January 31, 2000 ----------------------------- ----------------
(Unaudited) 1999 # 1998 1997 (a) # 1997 1996
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 22.57 $ 23.19 $ 23.94 $ 21.79 $ 20.15 $ 17.28
-------- -------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.37 0.94 1.05 0.52 1.02 1.01
Net realized and
unrealized gains or
losses on securities (0.16) 1.50 0.81 2.15 1.67 2.94
-------- -------- ------- ------- ------- -------
Total from investment
operations 0.21 2.44 1.86 2.67 2.69 3.95
-------- -------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.51) (0.93) (1.02) (0.52) (1.05) (1.08)
Net realized gains (0.40) (2.13) (1.59) 0 0 0
-------- -------- ------- ------- ------- -------
Total distributions (0.91) (3.06) (2.61) (0.52) (1.05) (1.08)
-------- -------- ------- ------- ------- -------
Net asset value, end of
period $ 21.87 $ 22.57 $ 23.19 $ 23.94 $ 21.79 $ 20.15
-------- -------- ------- ------- ------- -------
Total return* 1.03% 12.14% 7.93% 12.45% 13.80% 23.40%
Ratios and supplemental
data
Net assets, end of
period (thousands) $ 36,138 $ 35,714 $15,005 $11,955 $ 9,678 $ 4,412
Ratios to average net
assets
Expenses** 1.49%+ 1.46% 1.50% 1.45%+ 1.44% 1.36%
Net investment income 3.14%+ 4.39% 4.20% 4.69%+ 4.93% 5.39%
Portfolio turnover rate 44% 124% 133% 72% 168% 138%
<CAPTION>
Year Ended
Six Months Ended Year Ended July 31, January 31,
January 31, 2000 ----------------------------- ----------------
(Unaudited) 1999 # 1998 1997 (a) # 1997 1996
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 22.38 $ 23.04 $ 23.81 $ 21.69 $ 20.08 $ 17.28
Income from investment
operations
Net investment income 0.24 0.76 0.86 0.43 0.89 0.91
-------- -------- ------- ------- ------- -------
Net realized and
unrealized gains or
losses on securities (0.11) 1.51 0.81 2.15 1.64 2.87
-------- -------- ------- ------- ------- -------
Total from investment
operations 0.13 2.27 1.67 2.58 2.53 3.78
-------- -------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.43) (0.80) (0.85) (0.46) (0.92) (0.98)
Net realized gains (0.40) (2.13) (1.59) 0 0 0
-------- -------- ------- ------- ------- -------
Total distributions (0.83) (2.93) (2.44) (0.46) (0.92) (0.98)
-------- -------- ------- ------- ------- -------
Net asset value, end of
period $ 21.68 $ 22.38 $ 23.04 $ 23.81 $ 21.69 $ 20.08
-------- -------- ------- ------- ------- -------
Total return* 0.64% 11.34% 7.13% 12.06% 13.00% 22.40%
Ratios and supplemental
data
Net assets, end of
period (thousands) $157,782 $185,177 $54,544 $43,977 $35,323 $14,750
Ratios to average net
assets
Expenses** 2.23%+ 2.21% 2.25% 2.20%+ 2.19% 2.11%
Net investment income 2.38%+ 3.61% 3.46% 3.94%+ 4.17% 4.69%
Portfolio turnover rate 44% 124% 133% 72% 168% 138%
</TABLE>
(a) For the six months ended July 31, 1997. The Fund changed its fiscal year
end from January 31 to July 31, effective July 31, 1997.
* Excluding applicable sales charges.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
33
<PAGE>
EVERGREEN
Income and Growth Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended January 31,
January 31, 2000 -------------------------- ----------------------
(Unaudited) 1999 # 1998 1997 (a) # 1997 1996
<S> <C> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value,
beginning of period $22.38 $23.04 $23.81 $21.69 $ 20.08 $ 17.27
------ ------ ------ ------ ----------- -----------
Income from investment
operations
Net investment income 0.25 0.76 0.87 0.44 0.87 0.90
Net realized and
unrealized gains or
losses on securities (0.12) 1.51 0.80 2.14 1.66 2.89
------ ------ ------ ------ ----------- -----------
Total from investment
operations 0.13 2.27 1.67 2.58 2.53 3.79
------ ------ ------ ------ ----------- -----------
Distributions to
shareholders from
Net investment income (0.43) (0.80) (0.85) (0.46) (0.92) (0.98)
Net realized gains (0.40) (2.13) (1.59) 0 0 0
------ ------ ------ ------ ----------- -----------
Total distributions (0.83) (2.93) (2.44) (0.46) (0.92) (0.98)
------ ------ ------ ------ ----------- -----------
Net asset value, end of
period $21.68 $22.38 $23.04 $23.81 $ 21.69 $ 20.08
------ ------ ------ ------ ----------- -----------
Total return* 0.64% 11.34% 7.13% 12.06% 12.90% 22.40%
Ratios and supplemental
data
Net assets, end of
period (thousands) $2,326 $2,502 $1,259 $ 950 $ 982 $ 523
Ratios to average net
assets
Expenses** 2.24%+ 2.21% 2.25% 2.20%+ 2.19% 2.11%
Net investment income 2.37%+ 3.60% 3.48% 4.06%+ 4.15% 4.67%
Portfolio turnover rate 44% 124% 133% 72% 168% 138%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended January 31,
January 31, 2000 -------------------------- ----------------------
(Unaudited) 1999 # 1998 1997 (a) # 1997 1996
<S> <C> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $22.58 $23.22 $23.98 $21.81 $ 20.16 $ 17.28
------ ------ ------ ------ ----------- -----------
Income from investment
operations
Net investment income 0.37 0.99 1.02 0.55 1.08 1.10
Net realized and
unrealized gains or
losses on securities (0.14) 1.52 0.89 2.16 1.66 2.87
------ ------ ------ ------ ----------- -----------
Total from investment
operations 0.23 2.51 1.91 2.71 2.74 3.97
------ ------ ------ ------ ----------- -----------
Distributions to
shareholders from
Net investment income (0.54) (1.02) (1.08) (0.54) (1.09) (1.09)
Net realized gains (0.40) (2.13) (1.59) 0 0 0
------ ------ ------ ------ ----------- -----------
Total distributions (0.94) (3.15) (2.67) (0.54) (1.09) (1.09)
------ ------ ------ ------ ----------- -----------
Net asset value, end of
period $21.88 $22.58 $23.22 $23.98 $ 21.81 $ 20.16
------ ------ ------ ------ ----------- -----------
Total return 1.16% 12.46% 8.16% 12.65% 14.10% 23.50%
Ratios and supplemental
data
Net assets, end of
period (millions) $ 803 $ 847 $ 880 $ 900 $ 858 $ 914
Ratios to average net
assets
Expenses** 1.23%+ 1.21% 1.25% 1.20%+ 1.18% 1.19%
Net investment income 3.36%+ 4.61% 4.46% 4.97%+ 5.14% 5.70%
Portfolio turnover rate 44% 124% 133% 72% 168% 138%
</TABLE>
(a) For the six months ended July 31, 1997. The Fund changed its fiscal year
end from January 31 to July 31, effective July 31, 1997.
* Excluding applicable sales charges.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
34
<PAGE>
EVERGREEN
Small Cap Value Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended December 31,
January 31, 2000 ------------------------------ --------------------------
(Unaudited) 1999 1998 1997 (b) # 1996 1995 (a)
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 15.57 $ 15.75 $ 15.69 $13.10 $ 11.57 $ 9.64
------- -------- -------- ------ ----------- -----------
Income from investment
operations
Net investment income 0.05 0.26 0.29 0.14 0.34 0.34
Net realized and
unrealized gains or
losses on securities (1.35) 0.04 0.24 2.59 2.13 2.45
------- -------- -------- ------ ----------- -----------
Total from investment
operations (1.30) 0.30 0.53 2.73 2.47 2.79
------- -------- -------- ------ ----------- -----------
Distributions to
shareholders from
Net investment income (0.04) (0.30) (0.28) (0.13) (0.34) (0.37)
Net realized gains 0 (0.18) (0.19) (0.01) (0.60) (0.49)
------- -------- -------- ------ ----------- -----------
Total distributions (0.04) (0.48) (0.47) (0.14) (0.94) (0.86)
------- -------- -------- ------ ----------- -----------
Net asset value, end of
period $ 14.23 $ 15.57 $ 15.75 $15.69 $ 13.10 $ 11.57
------- -------- -------- ------ ----------- -----------
Total return* (8.38%) 2.17% 3.24% 20.99% 22.00% 29.50%
Ratios and supplemental
data
Net assets, end of
period (thousands) $46,790 $ 59,451 $ 54,142 $4,239 $ 336 $ 216
Ratios to average net
assets
Expenses** 1.69%+ 1.67% 1.68% 1.71%+ 1.75% 1.75%+
Net investment income 0.65%+ 1.85% 1.95% 1.88%+ 3.08% 3.39%+
Portfolio turnover rate 39% 54% 18% 13% 50% 48%
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended December 31,
January 31, 2000 ------------------------------ --------------------------
(Unaudited) 1999 1998 1997 (b) # 1996 1995 (a)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 15.48 $ 15.67 $ 15.64 $13.09 $ 11.57 $ 9.64
------- -------- -------- ------ ----------- -----------
Income from investment
operations
Net investment income
(loss) (0.01) 0.16 0.19 0.08 0.27 0.28
Net realized and
unrealized gains or
losses on securities (1.33) 0.02 0.22 2.57 2.11 2.43
------- -------- -------- ------ ----------- -----------
Total from investment
operations (1.34) 0.18 0.41 2.65 2.38 2.71
------- -------- -------- ------ ----------- -----------
Distributions to
shareholders from
Net investment income (0.01) (0.19) (0.19) (0.09) (0.26) (0.29)
Net realized gains 0 (0.18) (0.19) (0.01) (0.60) (0.49)
------- -------- -------- ------ ----------- -----------
Total distributions (0.01) (0.37) (0.38) (0.10) (0.86) (0.78)
------- -------- -------- ------ ----------- -----------
Net asset value, end of
period $ 14.13 $ 15.48 $ 15.67 $15.64 $ 13.09 $ 11.57
------- -------- -------- ------ ----------- -----------
Total return* (8.66%) 1.35% 2.49% 20.37% 21.10% 28.70%
Ratios and supplemental
data
Net assets, end of
period (thousands) $80,534 $110,809 $130,191 $9,462 $ 692 $ 266
Ratios to average net
assets
Expenses** 2.44%+ 2.42% 2.43% 2.46%+ 2.50% 2.50%+
Net investment income
(loss) (0.09%)+ 1.15% 1.20% 1.12%+ 2.39% 2.67%+
Portfolio turnover rate 39% 54% 18% 13% 50% 48%
</TABLE>
(a) For the period from January 3, 1995 (commencement of class operations) to
December 31, 1995.
(b) For the seven months ended July 31, 1997. The Fund changed its fiscal year
end from December 31 to July 31, effective July 31, 1997.
* Excluding applicable sales charges.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the
period.
See Combined Notes to Financial Statements.
35
<PAGE>
EVERGREEN
Small Cap Value Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended December 31,
January 31, 2000 ---------------------------- -----------------------
(Unaudited) 1999 1998 1997 (b) # 1996 1995 (a)
<S> <C> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value,
beginning of period $ 15.46 $ 15.66 $ 15.63 $ 13.09 $ 11.56 $ 9.74
------- ------- ------- ------- ----------- -----------
Income from investment
operations
Net investment income
(loss) (0.01) 0.16 0.19 0.10 0.28 0.28
Net realized and
unrealized gains or
losses on securities (1.33) 0.01 0.22 2.54 2.10 2.33
------- ------- ------- ------- ----------- -----------
Total from investment
operations (1.34) 0.17 0.41 2.64 2.38 2.61
------- ------- ------- ------- ----------- -----------
Distributions to
shareholders from
Net investment income (0.01) (0.19) (0.19) (0.09) (0.25) (0.30)
Net realized gains 0 (0.18) (0.19) (0.01) (0.60) (0.49)
------- ------- ------- ------- ----------- -----------
Total distributions (0.01) (0.37) (0.38) (0.10) (0.85) (0.79)
------- ------- ------- ------- ----------- -----------
Net asset value, end of
period $ 14.11 $ 15.46 $ 15.66 $ 15.63 $ 13.09 $ 11.56
------- ------- ------- ------- ----------- -----------
Total return* (8.67%) 1.28% 2.49% 20.30% 21.10% 27.30%
Ratios and supplemental
data
Net assets, end of
period (thousands) $15,309 $22,842 $26,197 $ 2,770 $ 56 $ 24
Ratios to average net
assets
Expenses** 2.44%+ 2.42% 2.43% 2.45%+ 2.50% 2.50%+
Net investment income
(loss) (0.07%)+ 1.15% 1.20% 1.20%+ 2.33% 2.63%+
Portfolio turnover rate 39% 54% 18% 13% 50% 48%
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended December 31,
January 31, 2000 ---------------------------- -----------------------
(Unaudited) 1999 1998 1997 (b) # 1996 1995
CLASS Y SHARES
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 15.57 $ 15.77 $ 15.71 $ 13.12 $ 11.58 $ 9.70
------- ------- ------- ------- ----------- -----------
Income from investment
operations
Net investment income 0.09 0.33 0.34 0.19 0.38 0.38
Net realized and
unrealized gains or
losses on securities (1.36) (0.02) 0.24 2.56 2.13 2.38
------- ------- ------- ------- ----------- -----------
Total from investment
operations (1.27) 0.31 0.58 2.75 2.51 2.76
------- ------- ------- ------- ----------- -----------
Distributions to
shareholders from
Net investment income (0.05) (0.33) (0.33) (0.15) (0.37) (0.38)
Net realized gains 0 (0.18) (0.19) (0.01) (0.60) (0.50)
------- ------- ------- ------- ----------- -----------
Total distributions (0.05) (0.51) (0.52) (0.16) (0.97) (0.88)
------- ------- ------- ------- ----------- -----------
Net asset value, end of
period $ 14.25 $ 15.57 $ 15.77 $ 15.71 $ 13.12 $ 11.58
------- ------- ------- ------- ----------- -----------
Total return (8.19%) 2.31% 3.57% 21.09% 22.40% 29.10%
Ratios and supplemental
data
Net assets, end of
period (thousands) $35,735 $56,903 $96,556 $42,374 $ 8,592 $ 4,806
Ratios to average net
assets
Expenses** 1.44%+ 1.42% 1.39% 1.39%+ 1.50% 1.50%
Net investment income 0.93%+ 2.19% 2.23% 2.39%+ 3.36% 3.56%
Portfolio turnover rate 39% 54% 18% 13% 50% 48%
</TABLE>
(a) For the period from January 24, 1995 (commencement of class operations) to
December 31, 1995.
(b) For the seven months ended July 31, 1997. The Fund changed its fiscal year
end from December 31 to July 31, effective July 31, 1997.
* Excluding applicable sales charges.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
36
<PAGE>
EVERGREEN
Utility Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended
Six Months Ended Year Ended July 31, December 31,
January 31, 2000 --------------------------- -----------------
(Unaudited) 1999 1998 1997 (a) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 12.85 $ 11.76 $ 11.45 $ 10.57 $ 10.80 $ 9.00
-------- -------- ------- ------- ------- --------
Income from investment
operations
Net investment income 0.16 0.42 0.43 0.25 0.41 0.44
Net realized and
unrealized gains on
securities 2.43 2.37 1.44 0.87 0.05 2.25
-------- -------- ------- ------- ------- --------
Total from investment
operations 2.59 2.79 1.87 1.12 0.46 2.69
-------- -------- ------- ------- ------- --------
Distributions to
shareholders from
Net investment income (0.17) (0.42) (0.44) (0.24) (0.41) (0.44)
Net realized gains (1.18) (1.28) (1.12) 0 (0.28) (0.45)
-------- -------- ------- ------- ------- --------
Total distributions (1.35) (1.70) (1.56) (0.24) (0.69) (0.89)
-------- -------- ------- ------- ------- --------
Net asset value, end of
period $ 14.09 $ 12.85 $ 11.76 $ 11.45 $ 10.57 $ 10.80
-------- -------- ------- ------- ------- --------
Total return* 21.40% 26.05% 17.30% 10.72% 4.40% 30.70%
Ratios and supplemental
data
Net assets, end of
period (thousands) $135,061 $108,411 $95,300 $91,638 $96,243 $107,872
Ratios to average net
assets
Expenses** 1.01%+ 1.03% 0.99% 1.00%+ 0.87% 0.79%
Net investment income 2.44%+ 3.60% 3.58% 3.85%+ 3.87% 4.51%
Portfolio turnover rate 25% 46% 62% 50% 59% 88%
<CAPTION>
Year Ended
Six Months Ended Year Ended July 31, December 31,
January 31, 2000 --------------------------- -----------------
(Unaudited) 1999 1998 1997 (a) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 12.86 $ 11.76 $ 11.46 $ 10.58 $ 10.81 $ 9.00
-------- -------- ------- ------- ------- --------
Income from investment
operations
Net investment income 0.11 0.34 0.34 0.20 0.33 0.37
Net realized and
unrealized gains on
securities 2.42 2.37 1.44 0.87 0.05 2.26
-------- -------- ------- ------- ------- --------
Total from investment
operations 2.53 2.71 1.78 1.07 0.38 2.63
-------- -------- ------- ------- ------- --------
Distributions to
shareholders from
Net investment income (0.12) (0.33) (0.36) (0.19) (0.33) (0.37)
Net realized gains (1.18) (1.28) (1.12) 0 (0.28) (0.45)
-------- -------- ------- ------- ------- --------
Total distributions (1.30) (1.61) (1.48) (0.19) (0.61) (0.82)
-------- -------- ------- ------- ------- --------
Net asset value, end of
period $ 14.09 $ 12.86 $ 11.76 $ 11.46 $ 10.58 $ 10.81
-------- -------- ------- ------- ------- --------
Total return* 20.85% 25.23% 16.31% 10.21% 3.60% 29.90%
Ratios and supplemental
data
Net assets, end of
period (thousands) $ 62,996 $ 54,839 $43,776 $36,738 $38,511 $ 35,662
Ratios to average net
assets
Expenses** 1.76%+ 1.77% 1.74% 1.75%+ 1.62% 1.53%
Net investment income 1.69%+ 2.85% 2.82% 3.10%+ 3.12% 3.78%
Portfolio turnover rate 25% 46% 62% 50% 59% 88%
</TABLE>
(a) For the seven months ended July 31, 1997. The Fund changed its fiscal year
end from December 31 to July 31, effective July 31, 1997.
* Excluding applicable sales charges.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
See Combined Notes to Financial Statements.
37
<PAGE>
EVERGREEN
Utility Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended December 31,
January 31, 2000 ------------------------ -----------------------
(Unaudited) 1999 1998 1997 (a) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value,
beginning of period $12.86 $11.76 $11.46 $10.58 $ 10.82 $ 9.01
------ ------ ------ ------ ----------- -----------
Income from investment
operations
Net investment income 0.12 0.34 0.34 0.20 0.33 0.37
Net realized and
unrealized gains on
securities 2.42 2.37 1.44 0.87 0.04 2.26
------ ------ ------ ------ ----------- -----------
Total from investment
operations 2.54 2.71 1.78 1.07 0.37 2.63
------ ------ ------ ------ ----------- -----------
Distributions to
shareholders from
Net investment income (0.12) (0.33) (0.36) (0.19) (0.33) (0.37)
Net realized gains (1.18) (1.28) (1.12) 0 (0.28) (0.45)
------ ------ ------ ------ ----------- -----------
Total distributions (1.30) (1.61) (1.48) (0.19) (0.61) (0.82)
------ ------ ------ ------ ----------- -----------
Net asset value, end of
period $14.10 $12.86 $11.76 $11.46 $ 10.58 $ 10.82
------ ------ ------ ------ ----------- -----------
Total return* 20.94% 25.23% 16.31% 10.21% 3.50% 29.80%
Ratios and supplemental
data
Net assets, end of
period (thousands) $2,828 $ 879 $ 486 $ 379 $ 396 $ 246
Ratios to average net
assets
Expenses** 1.76%+ 1.77% 1.74% 1.75%+ 1.63% 1.54%
Net investment income 1.71%+ 2.74% 2.82% 3.10%+ 3.13% 3.76%
Portfolio turnover rate 25% 46% 62% 50% 59% 88%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended December 31,
January 31, 2000 ------------------------ -----------------------
(Unaudited) 1999 1998 1997 (a) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $12.86 $11.77 $11.46 $10.58 $ 10.82 $ 9.00
------ ------ ------ ------ ----------- -----------
Income from investment
operations
Net investment income 0.18 0.49 0.46 0.25 0.44 0.47
Net realized and
unrealized gains on
securities 2.43 2.33 1.45 0.88 0.03 2.27
------ ------ ------ ------ ----------- -----------
Total from investment
operations 2.61 2.82 1.91 1.13 0.47 2.74
------ ------ ------ ------ ----------- -----------
Distributions to
shareholders from
Net investment income (0.19) (0.45) (0.48) (0.25) (0.43) (0.47)
Net realized gains (1.18) (1.28) (1.12) 0 (0.28) (0.45)
------ ------ ------ ------ ----------- -----------
Total distributions (1.37) (1.73) (1.60) (0.25) (0.71) (0.92)
------ ------ ------ ------ ----------- -----------
Net asset value, end of
period $14.10 $12.86 $11.77 $11.46 $ 10.58 $ 10.82
------ ------ ------ ------ ----------- -----------
Total return 21.53% 26.35% 17.60% 10.85% 4.50% 31.30%
Ratios and supplemental
data
Net assets, end of
period (thousands) $2,223 $2,123 $1,695 $1,627 $ 2,000 $ 7,791
Ratios to average net
assets
Expenses** 0.76%+ 0.77% 0.74% 0.74%+ 0.61% 0.54%
Net investment income 2.70%+ 3.92% 3.82% 4.06%+ 4.01% 4.76%
Portfolio turnover rate 25% 46% 62% 50% 59% 88%
</TABLE>
(a) For the seven months ended July 31, 1997. The Fund changed its fiscal year
end from December 31 to July 31, effective July 31, 1997.
* Excluding applicable sales charges.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
See Combined Notes to Financial Statements.
38
<PAGE>
EVERGREEN
Value Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended December 31,
January 31, 2000 ------------------------ -----------------------
(Unaudited) 1999 1998 1997 (a) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $24.86 $22.23 $24.64 $20.57 $ 20.45 $ 16.62
------ ------ ------ ------ ----------- -----------
Income from investment
operations
Net investment income 0.09 0.21 0.26 0.21 0.38 0.55
Net realized and
unrealized gains or
losses on securities (1.74) 2.76 2.00 4.05 3.49 4.69
------ ------ ------ ------ ----------- -----------
Total from investment
operations (1.65) 2.97 2.26 4.26 3.87 5.24
------ ------ ------ ------ ----------- -----------
Distributions to
shareholders from
Net investment income (0.09) (0.21) (0.29) (0.19) (0.41) (0.51)
Net realized gains (3.11) (0.13) (4.38) 0 (3.34) (0.90)
------ ------ ------ ------ ----------- -----------
Total distributions (3.20) (0.34) (4.67) (0.19) (3.75) (1.41)
------ ------ ------ ------ ----------- -----------
Net asset value, end of
period $20.01 $24.86 $22.23 $24.64 $ 20.57 $ 20.45
------ ------ ------ ------ ----------- -----------
Total return* (7.36%) 13.48% 9.55% 20.78% 18.90% 31.80%
Ratios and supplemental
data
Net assets, end of
period (millions) $ 425 $ 464 $ 476 $ 392 $ 328 $ 292
Ratios to average net
assets
Expenses** 1.03%+ 1.00% 1.01% 0.92%+ 0.91% 0.90%
Net investment income 0.80%+ 0.93% 1.04% 1.66%+ 1.77% 2.78%
Portfolio turnover rate 46% 110% 69% 6% 91% 53%
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended December 31,
January 31, 2000 ------------------------ -----------------------
(Unaudited) 1999 1998 1997 (a) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $24.81 $22.20 $24.63 $20.58 $ 20.45 $ 16.62
------ ------ ------ ------ ----------- -----------
Income from investment
operations
Net investment income 0.01 0.04 0.08 0.12 0.22 0.39
Net realized and
unrealized gains or
losses on securities (1.74) 2.75 1.99 4.03 3.50 4.70
------ ------ ------ ------ ----------- -----------
Total from investment
operations (1.73) 2.79 2.07 4.15 3.72 5.09
------ ------ ------ ------ ----------- -----------
Distributions to
shareholders from
Net investment income (0.01) (0.05) (0.12) (0.10) (0.25) (0.36)
Net realized gains (3.11) (0.13) (4.38) 0 (3.34) (0.90)
------ ------ ------ ------ ----------- -----------
Total distributions (3.12) (0.18) (4.50) (0.10) (3.59) (1.26)
------ ------ ------ ------ ----------- -----------
Net asset value, end of
period $19.96 $24.81 $22.20 $24.63 $ 20.58 $ 20.45
------ ------ ------ ------ ----------- -----------
Total return* (7.70%) 12.65% 8.73% 20.23% 18.10% 30.90%
Ratios and supplemental
data
Net assets, end of
period (millions) $ 237 $ 332 $ 326 $ 276 $ 197 $ 141
Ratios to average net
assets
Expenses** 1.78%+ 1.75% 1.76% 1.67%+ 1.66% 1.65%
Net investment income 0.06%+ 0.18% 0.30% 0.92%+ 1.01% 2.04%
Portfolio turnover rate 46% 110% 69% 6% 91% 53%
</TABLE>
(a) For the seven months ended July 31, 1997. The Fund changed its fiscal year
end from December 31 to July 31, effective July 31, 1997.
* Excluding applicable sales charges.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
See Combined Notes to Financial Statements.
39
<PAGE>
EVERGREEN
Value Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended December 31,
January 31, 2000 ------------------------ -----------------------
(Unaudited) 1999 1998 1997 (a) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value,
beginning of period $24.79 $22.18 $24.61 $20.56 $ 20.44 $ 16.61
------ ------ ------ ------ ----------- -----------
Income from investment
operations
Net investment income 0.01 0.04 0.10 0.12 0.22 0.39
Net realized and
unrealized gains or
losses on securities (1.74) 2.75 1.97 4.03 3.50 4.70
------ ------ ------ ------ ----------- -----------
Total from investment
operations (1.73) 2.79 2.07 4.15 3.72 5.09
------ ------ ------ ------ ----------- -----------
Distributions to
shareholders from
Net investment income (0.01) (0.05) (0.12) (0.10) (0.26) (0.36)
From net realized gains (3.11) (0.13) (4.38) 0 (3.34) (0.90)
------ ------ ------ ------ ----------- -----------
Total distributions (3.12) (0.18) (4.50) (0.10) (3.60) (1.26)
------ ------ ------ ------ ----------- -----------
Net asset value, end of
period $19.94 $24.79 $22.18 $24.61 $ 20.56 $ 20.44
------ ------ ------ ------ ----------- -----------
Total return* (7.71%) 12.66% 8.74% 20.25% 18.10% 30.90%
Ratios and supplemental
data
Net assets, end of
period (millions) $ 4 $ 5 $ 5 $ 3 $ 1 $ 1
Ratios to average net
assets
Expenses** 1.78%+ 1.75% 1.76% 1.66%+ 1.67% 1.65%
Net investment income 0.06%+ 0.18% 0.29% 0.94%+ 1.00% 2.03%
Portfolio turnover rate 46% 110% 69% 6% 91% 53%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended July 31, Year Ended December 31,
January 31, 2000 ------------------------ -----------------------
(Unaudited) 1999 1998 1997 (a) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $24.87 $22.23 $24.64 $20.57 $ 20.45 $ 16.61
------ ------ ------ ------ ----------- -----------
Income from investment
operations
Net investment income 0.13 0.29 0.35 0.25 0.44 0.57
Net realized and
unrealized gains or
losses on securities (1.75) 2.74 1.97 4.03 3.49 4.72
------ ------ ------ ------ ----------- -----------
Total from investment
operations (1.62) 3.03 2.32 4.28 3.93 5.29
------ ------ ------ ------ ----------- -----------
Distributions to
shareholders from
Net investment income (0.12) (0.26) (0.35) (0.21) (0.47) (0.55)
Net realized gains (3.11) (0.13) (4.38) 0.00 (3.34) (0.90)
------ ------ ------ ------ ----------- -----------
Total distributions (3.23) (0.39) (4.73) (0.21) (3.81) (1.45)
------ ------ ------ ------ ----------- -----------
Net asset value, end of
period $20.02 $24.87 $22.23 $24.64 $ 20.57 $ 20.45
------ ------ ------ ------ ----------- -----------
Total return (7.24%) 13.81% 9.79% 20.93% 19.20% 32.20%
Ratios and supplemental
data
Net assets, end of
period (millions) $ 88 $ 132 $ 183 $1,149 $ 996 $ 761
Ratios to average net
assets
Expenses** 0.77%+ 0.75% 0.70% 0.67%+ 0.66% 0.65%
Net investment income 1.07%+ 1.20% 1.47% 1.91%+ 2.02% 3.02%
Portfolio turnover rate 46% 110% 69% 6% 91% 53%
</TABLE>
(a) For the seven months ended July 31, 1997. The Fund changed its fiscal year
end from December 31 to July 31, effective July 31, 1997.
* Excluding applicable sales charges.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
See Combined Notes to Financial Statements.
40
<PAGE>
EVERGREEN
Blue Chip Fund
Schedule of Investments
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 93.6%
Automotive Equipment & Manufacturing - 1.2%
66,300 Ford Motor Co....................................... $ 3,298,425
88,400 General Motors Corp................................. 7,110,675
------------
10,409,100
------------
Banks - 2.0%
80,801 Chase Manhattan Corp................................ 6,499,430
207,600 Mellon Financial Corp............................... 7,123,275
79,100 Wells Fargo Co...................................... 3,164,000
------------
16,786,705
------------
Capital Goods - 0.9%
167,700 Deere & Co.......................................... 7,326,394
------------
Chemical & Agricultural
Products - 0.7%
149,700 Rohm & Haas Co...................................... 6,324,825
------------
Communication Systems & Services - 3.9%
160,600 *Cisco Systems, Inc................................. 17,585,700
75,900 Lucent Technologies, Inc............................ 4,193,475
149,200 *MCI WorldCom, Inc.................................. 6,853,875
92,500 *Tellabs, Inc....................................... 4,995,000
------------
33,628,050
------------
Consumer Products &
Services - 2.2%
123,600 Procter & Gamble Co................................. 12,468,150
115,000 Whirlpool Corp...................................... 6,698,750
------------
19,166,900
------------
Electrical Equipment &
Services - 5.5%
118,300 *Cypress Semiconductor Corp......................... 3,963,050
74,900 Emerson Electric Co................................. 4,124,181
238,100 General Electric Co................................. 31,756,588
104,600 *Solectron Corp..................................... 7,596,575
------------
47,440,394
------------
Electronic Equipment &
Services - 1.1%
143,800 *Teradyne, Inc...................................... 9,311,050
------------
Finance & Insurance - 5.3%
43,900 American Express Co................................. 7,235,269
126,275 American International Group, Inc................... 13,148,384
260,700 Citigroup, Inc. .................................... 14,973,956
56,300 Lehman Brothers Holdings, Inc....................... 4,025,450
97,200 Morgan Stanley, Dean Witter & Co. .................. 6,439,500
------------
45,822,559
------------
Food & Beverage Products - 3.7%
104,100 Anheuser Busch Companies, Inc....................... 7,026,750
101,600 Coca Cola Co........................................ 5,835,650
157,000 McDonald's Corp..................................... 5,838,438
178,200 Pepsico, Inc........................................ 6,081,075
116,100 Seagram Co., Ltd.................................... 6,741,056
------------
31,522,969
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Healthcare Products &
Services - 7.2%
61,300 *Amgen, Inc......................................... $ 3,904,044
57,100 *Biogen, Inc........................................ 4,924,875
456,100 *Health Management Associates, Inc., Cl. A ......... 6,356,893
36,700 Immunex Corp. (b)................................... 4,798,525
84,800 Johnson & Johnson................................... 7,298,100
46,000 MedImmune, Inc...................................... 6,716,000
260,100 Medtronic, Inc...................................... 11,899,575
18,100 PE Corp-PE Biosystems Group......................... 2,710,475
96,800 United Healthcare Corp.............................. 5,130,400
118,000 *Wellpoint Health Networks, Inc., Cl. A............. 8,024,000
------------
61,762,887
------------
Information Services & Technology - 24.7%
158,400 *America Online, Inc................................ 9,018,900
200,500 *American Power Conversion Corp..................... 5,532,547
90,800 *Applied Materials, Inc............................. 12,462,300
29,000 *CMGI, Inc. (b)..................................... 3,264,313
47,300 Computer Associates International, Inc.............. 3,248,919
87,800 *Dell Computer Corp................................. 3,374,812
162,000 Electronic Data Systems Corp........................ 10,955,250
70,900 *EMC Corp........................................... 7,550,850
75,000 *Gateway, Inc....................................... 4,589,062
75,400 Hewlett-Packard Co. ................................ 8,162,050
254,400 Intel Corp.......................................... 25,169,700
148,800 International Business Machines Corp................ 16,693,500
53,400 *Lexmark International Group, Inc., Cl. A........... 5,032,950
68,100 *LSI Logic.......................................... 5,567,175
69,300 *Microchip Technology, Inc.......................... 4,357,237
62,300 *Micron Technology, Inc............................. 3,874,281
374,200 *Microsoft Corp..................................... 36,624,825
112,000 *Oracle Systems Corp................................ 5,594,750
52,400 *Sanmina Corp. (b).................................. 5,567,500
102,876 SAP AG, ADR (b)..................................... 6,706,229
39,600 *Sapient Corp....................................... 3,499,650
133,900 *Sun Microsystems, Inc.............................. 10,519,519
95,600 *Synopsys, Inc...................................... 4,415,525
43,000 *Veritas Software Corp. ............................ 6,272,625
9,800 *Yahoo!, Inc. (b)................................... 3,156,213
------------
211,210,682
------------
Metal Products & Services - 0.5%
57,400 Alcoa, Inc.......................................... 4,000,063
------------
</TABLE>
41
<PAGE>
EVERGREEN
Blue Chip Fund
Schedule of Investments(continued)
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Oil/Energy - 5.6%
124,100 Atlantic Richfield Co.............................. $ 9,555,700
68,000 BP Amoco Plc, ADR (b).............................. 3,655,000
110,600 Conoco, Inc., Cl. A (b)............................ 2,578,363
21 Conoco, Inc., Cl. B................................ 495
225,084 Exxon Mobil Corp................................... 18,794,514
50,000 Royal Dutch Petroleum Co........................... 2,753,125
277,800 Sunoco, Inc........................................ 6,406,762
85,400 Texaco, Inc........................................ 4,515,525
------------
48,259,484
------------
Paper & Packaging - 0.8%
125,300 Bowater, Inc....................................... 6,476,444
------------
Pharmaceuticals - 5.6%
149,400 American Home Products Corp........................ 7,031,137
71,100 Bristol-Myers Squibb Co............................ 4,692,600
155,400 Merck & Co., Inc................................... 12,247,462
21,400 *Millennium Pharmaceuticals, Inc................... 4,011,163
78,400 Monsanto Co........................................ 2,768,500
64,900 Pharmacia & Upjohn, Inc............................ 3,050,300
77,000 Schering-Plough Corp............................... 3,388,000
109,300 Warner-Lambert Co.................................. 10,376,669
------------
47,565,831
------------
Printing, Publishing, Broadcasting &
Entertainment - 6.8%
152,500 *CBS Corp.......................................... 8,892,656
115,400 *Clear Channel Communications, Inc................. 9,967,675
201,900 Disney (Walt) Co................................... 7,331,494
192,600 Martha Stewart Living Omnimedia, Inc. (b).......... 4,333,500
151,000 Time Warner, Inc................................... 12,070,562
66,100 *Univision Communications, Inc., Cl. A (b)......... 7,080,963
153,200 *Viacom, Inc., Cl. B............................... 8,483,450
------------
58,160,300
------------
Retailing & Wholesale - 4.1%
65,000 *Best Buy Co., Inc. ............................... 3,103,750
106,450 Home Depot, Inc.................................... 6,027,731
170,300 *Staples, Inc...................................... 4,055,269
76,800 Target Corp........................................ 5,073,600
305,700 Wal-Mart Stores, Inc............................... 16,737,075
------------
34,997,425
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Telecommunication Services & Equipment - 5.0%
35,500 *Allegiance Telecom, Inc........................... $ 3,740,812
129,300 *Global Crossing, Ltd.............................. 6,561,975
81,100 Motorola, Inc...................................... 11,090,425
49,500 Nokia Corp., ADR................................... 9,058,500
71,900 Omnipoint Corp..................................... 7,374,244
65,500 *Winstar Communications, Inc. (b).................. 4,638,219
------------
42,464,175
------------
Transportation - 0.5%
73,600 United Parcel Service, Inc., Cl. B................. 4,379,200
------------
Utilities - Telephone - 6.3%
248,104 AT&T Corp.......................................... 13,087,486
143,400 AT&T Corp.--Liberty Media Group, Cl. A............. 7,331,325
174,200 Bell Atlantic Corp................................. 10,789,512
140,600 BellSouth Corp..................................... 6,616,987
151,500 SBC Communications, Inc............................ 6,533,438
145,700 Sprint Corp........................................ 9,424,969
------------
53,783,717
------------
Total Common Stocks (cost $642,724,033)............ 800,799,154
------------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
SHORT-TERM INVESTMENTS - 11.9%
Money Market Portfolio - 4.6%
$39,697,528 Navigator Prime Portfolio (cost $39,697,528) (c)... 39,697,528
------------
Repurchase Agreement - 7.2%
61,786,000 Evergreen Joint Repurchase Agreement 5.72%,
purchased 1/31/2000, maturing 2/1/2000, maturity
value $61,795,817 (cost $61,786,000) (a).......... 61,786,000
------------
Total Short-Term Investments (cost $101,483,528)... 101,483,528
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -(cost $744,207,561)...... 105.5% 902,282,682
Other Assets and Liabilities - net.......... (5.5) (46,596,749)
----- ------------
Net Assets.................................. 100.0% $855,685,933
===== ============
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at January
31, 2000.
(b) All or a portion of this security is on loan.
(c) Represents investment of cash collateral received for securities on loan.
* Non-income producing security.
Summary of Abbreviations
ADR American Depository Receipt
See Combined Notes to Financial Statements.
42
<PAGE>
EVERGREEN
Equity Income Fund
Schedule of Investments
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 87.8%
Automotive Equipment & Manufacturing - 4.5%
48,000 Ford Motor Co........................................ $ 2,388,000
30,000 General Motors Corp. ................................ 2,413,125
------------
4,801,125
------------
Banks - 11.1%
40,000 BankAmerica Corp. ................................... 1,937,500
10,000 Chase Manhattan Corp. ............................... 804,375
30,000 Compass Bancshares, Inc.............................. 594,375
104,550 Firstar Corp......................................... 2,496,131
63,000 FleetBoston Financial Corp........................... 1,980,563
20,000 Mercantile Bankshares Corp........................... 582,500
120,000 North Fork Bancorp, Inc.............................. 2,040,000
30,000 PNC Bank Corp........................................ 1,440,000
------------
11,875,444
------------
Business Equipment &
Services - 0.8%
35,000 Dun & Bradstreet Corp. .............................. 881,563
------------
Chemical & Agricultural
Products - 0.2%
5,000 Rohm & Haas Co. ..................................... 211,250
------------
Consumer Products &
Services - 0.9%
15,000 Eastman Kodak Co..................................... 928,125
------------
Electrical Equipment &
Services - 4.1%
26,000 Emerson Electric Co.................................. 1,431,625
22,000 General Electric Co.................................. 2,934,250
------------
4,365,875
------------
Finance & Insurance - 10.3%
21,000 AMBAC Financial Group, Inc........................... 1,027,688
28,000 Citigroup, Inc. ..................................... 1,608,250
23,000 Federal National Mortgage Assoc. .................... 1,378,562
115,000 Greenpoint Financial Corp............................ 2,278,437
32,300 *John Hancock Financial Services, Inc................ 557,175
10,000 Lehman Brothers Holdings, Inc. ...................... 715,000
40,000 Nationwide Financial Services, Inc., Cl. A........... 995,000
36,000 Travelers Property Casualty Corp., Cl. A............. 1,305,000
25,000 XL Capital Ltd., Cl. A............................... 1,128,125
------------
10,993,237
------------
Food & Beverage Products - 3.1%
14,000 Anheuser Busch Companies, Inc........................ 945,000
55,000 Conagra, Inc......................................... 1,175,625
43,000 Ralston Purina Co.................................... 1,206,688
------------
3,327,313
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Healthcare Products &
Services - 8.7%
15,000 * Alza Corp. ....................................... $ 535,313
30,000 American Home Products Corp......................... 1,411,875
20,000 Johnson & Johnson................................... 1,721,250
42,400 Merck & Co., Inc.................................... 3,341,650
49,000 Pharmacia & Upjohn, Inc............................. 2,303,000
------------
9,313,088
------------
Information Services & Technology - 2.3%
22,000 International Business Machines Corp................ 2,468,125
------------
Oil/Energy - 9.6%
36,000 Atlantic Richfield Co............................... 2,772,000
25,797 Conoco, Inc., Cl. B................................. 607,842
39,604 Exxon Mobil Corp.................................... 3,306,934
25,000 Sunoco, Inc......................................... 576,562
45,000 Texaco, Inc......................................... 2,379,375
25,000 Ultramar Diamond Shamrock Corp. .................... 546,875
------------
10,189,588
------------
Paper & Packaging - 3.3%
43,000 Consolidated Papers, Inc............................ 1,187,875
20,000 Kimberly-Clark Corp. ............................... 1,238,750
40,000 Westvaco Corp. ..................................... 1,097,500
------------
3,524,125
------------
Printing, Publishing, Broadcasting & Entertainment -
1.7%
30,000 * CBS Corp. ........................................ 1,749,375
------------
Real Estate - 5.1%
35,000 Boston Properties, Inc., REIT....................... 1,050,000
50,000 Equity Office Properties Trust REIT................. 1,278,125
26,000 Equity Residential Properties Trust REIT............ 1,079,000
41,000 First Industrial Realty Trust, Inc. REIT............ 1,101,875
25,000 Spieker Properties, Inc. REIT....................... 971,875
------------
5,480,875
------------
Retailing & Wholesale - 1.3%
11,000 * Costco Wholesale Corp............................. 538,313
33,000 * Staples, Inc...................................... 785,812
------------
1,324,125
------------
Transportation - 2.2%
40,000 Burlington Northern Santa Fe Corp................... 962,500
35,000 Union Pacific Corp. ................................ 1,400,000
------------
2,362,500
------------
</TABLE>
43
<PAGE>
EVERGREEN
Equity Income Fund
Schedule of Investments(continued)
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Utilities - Electric - 7.6%
45,000 Constellation Energy Group, Inc..................... $ 1,355,625
50,000 DPL, Inc............................................ 959,375
23,000 Duke Power Co....................................... 1,328,250
50,000 LG&E Energy Corp.................................... 850,000
40,000 Northeast Utilities................................. 820,000
44,000 Southern Co. (b).................................... 1,127,500
40,000 Teco Energy, Inc. (b)............................... 785,000
25,000 Texas Utilities Co. ................................ 884,375
------------
8,110,125
------------
Utilities - Telephone - 11.0%
25,000 AT&T Corp. ......................................... 1,318,750
55,000 Bell Atlantic Corp.................................. 3,406,562
35,000 BellSouth Corp...................................... 1,647,187
15,000 GTE Corp. .......................................... 1,099,688
44,744 SBC Communications, Inc............................. 1,929,585
35,000 U.S. West, Inc...................................... 2,327,500
------------
11,729,272
------------
Total Common Stocks
(cost $81,281,401)................................. 93,635,130
------------
CONVERTIBLE PREFERRED - 2.4%
Communication Systems &
Services - 1.6%
3,000 McLeod USA, Inc., Cl. A............................. 1,725,609
------------
Printing, Publishing, Broadcasting & Entertainment -
0.8%
8,000 Pegasus Communications Corp......................... 820,000
------------
Total Convertible Preferred
(cost $1,550,000).................................. 2,545,609
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 6.0%
U.S. Treasury Bonds - 6.0%
$6,000,000 U.S. Treasury Bonds 7.25%, 8/15/2022 (cost
$6,389,192)........................................ $ 6,407,820
------------
SHORT-TERM INVESTMENTS - 3.8%
Money Market Portfolio - 1.1%
1,176,336 Navigator Prime Portfolio (cost $1,176,336) (c)..... 1,176,336
------------
Repurchase Agreement - 2.7%
2,866,000 Evergreen Joint Repurchase Agreement 5.72%,
purchased 1/31/2000, maturing 2/1/2000, maturity
value $2,866,456 (cost $2,866,000) (a)............. 2,866,000
------------
Total Short-Term Investments
(cost $4,042,336).................................. 4,042,336
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $93,262,929)........................... 100.0% 106,630,895
Other Assets and Liabilities - net............ 0.0 47,922
----- ------------
Net Assets.................................... 100.0% $106,678,817
===== ============
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at Janu-
ary 31, 2000.
(b) All or a portion of this security is on loan.
(c) Represents investment of cash collateral received for securities on loan.
* Non-income producing security.
Summary of Abbreviations
REIT Real Estate Investment Trust
See Combined Notes to Financial Statements.
44
<PAGE>
EVERGREEN
Growth and Income Fund
Schedule of Investments
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 97.6%
Aerospace & Defense - 3.4%
131,900 Boeing Co. .......................................... $ 5,844,819
580,000 Bombardier, Inc., Cl. B.............................. 11,707,888
131,300 Cordant Technologies, Inc. .......................... 4,341,106
245,650 Honeywell International, Inc. ....................... 11,791,200
951,500 Lockheed Martin Corp. ............................... 17,840,625
158,100 * Loral Space & Communications....................... 3,102,713
------------
54,628,351
------------
Automotive Equipment & Manufacturing - 0.7%
135,600 Toyota Motor Co. .................................... 11,831,100
------------
Banks - 6.6%
270,567 AmSouth Bancorp...................................... 4,718,012
119,000 Bank of New York Co., Inc. .......................... 4,834,375
250,000 BSB Bancorp, Inc. ................................... 4,796,875
88,758 Charter One Financial, Inc. ......................... 1,725,234
249,550 First Security Corp. ................................ 6,457,106
326,000 Hibernia Corp., Cl. A................................ 3,423,000
112,500 KeyCorp.............................................. 2,362,500
22,650 Keystone Financial, Inc. ............................ 414,778
43,000 Marshall & Ilsley Corp. ............................. 2,203,750
434,700 Mellon Financial Corp. .............................. 14,915,644
264,400 North Fork Bancorp, Inc. ............................ 4,494,800
700,000 Pacific Century Financial Corp. ..................... 12,031,250
152,000 Peoples Heritage Financial Group, Inc. .............. 2,232,500
228,600 SouthTrust Corp. .................................... 6,958,013
84,800 State Street Corp. .................................. 6,799,900
51,920 Suntrust Banks, Inc. ................................ 3,092,485
180,000 Susquehanna Bancshares, Inc. ........................ 2,621,250
247,900 U.S. Bancorp......................................... 5,500,281
620,200 Webster Financial Corp. ............................. 14,419,650
62,000 Wilmington Trust Corp. .............................. 3,096,125
------------
107,097,528
------------
Building, Construction & Furnishings - 1.0%
44,300 Deere & Co. ......................................... 1,935,356
15,100 * Furniture Brands International, Inc. .............. 256,700
23,500 Hon Industries, Inc. ................................ 452,375
168,200 * Jacobs Engineering Group, Inc. .................... 4,961,900
95,300 Southdown, Inc. ..................................... 4,770,956
181,100 * Toll Brothers, Inc. ............................... 3,078,700
------------
15,455,987
------------
Business Equipment &
Services - 5.3%
544,300 ACNielsen Corp. ..................................... 11,158,150
277,300 * Atlas Air, Inc. ................................... 7,348,450
18,500 Comdisco, Inc. ...................................... 617,438
172,500 * Computer Sciences Corp. ........................... 15,848,437
901,100 * Convergys Corp. ................................... 26,469,812
285,200 Equifax, Inc. ....................................... 6,131,800
38,436 First Data Corp. .................................... 1,885,766
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Business Equipment &
Services - continued
144,000 Petroleum Helicopters, Inc. ......................... $ 1,656,000
643,500 Pittston Brink's Group............................... 12,548,250
153,000 * Policy Management Systems Corp. ................... 2,419,313
------------
86,083,416
------------
Cable/Other Video
Distribution - 2.6%
559,800 Charter Communications, Inc. ........................ 9,936,450
143,410 Comcast Corp., Cl. A................................. 6,596,860
277,000 * Cox Communications, Inc., Cl. A.................... 13,521,062
153,000 * MediaOne Group, Inc. .............................. 12,163,500
------------
42,217,872
------------
Capital Goods - 0.1%
133,700 CNH Global NV........................................ 1,855,088
------------
Chemical & Agricultural
Products - 2.3%
125,000 Air Products & Chemicals, Inc. ...................... 3,703,125
82,400 Albemarle Corp. ..................................... 1,488,350
832,600 Engelhard Corp. ..................................... 13,269,562
435,300 IMC Global, Inc. .................................... 7,128,038
82,800 Praxair, Inc. ....................................... 3,358,575
259,400 Sigma-Aldrich Corp. ................................. 8,689,900
------------
37,637,550
------------
Communication Systems & Services - 4.5%
825,720 * American Tower Systems Corp., Cl. A................ 29,622,705
233,400 * Cisco Systems, Inc. ............................... 25,557,300
33,700 Lucent Technologies, Inc. ........................... 1,861,925
219,588 * MCI WorldCom, Inc. ................................ 10,087,324
230,800 Teleglobe, Inc. ..................................... 6,029,650
------------
73,158,904
------------
Consumer Products &
Services - 4.1%
166,900 Colgate-Palmolive Co. ............................... 9,888,825
54,700 Harley-Davidson, Inc. ............................... 3,839,256
671,700 Hasbro, Inc. ........................................ 10,075,500
172,000 Lancaster Colony Corp. .............................. 5,461,000
403,600 Mattel, Inc. ........................................ 4,212,575
9,700 Newell Rubbermaid, Inc. ............................. 291,000
124,700 Sony Corp., ADR...................................... 31,666,006
------------
65,434,162
------------
Diversified Companies - 0.4%
178,800 ITT Industries, Inc. ................................ 5,654,550
------------
Electrical Equipment &
Services - 1.5%
105,700 Applied Power, Inc., Cl. A........................... 2,946,388
161,600 Baldor Electric Co. ................................. 2,757,300
138,700 General Electric Co. ................................ 18,499,112
18,648 Zilog, Inc. ......................................... 9,324
------------
24,212,124
------------
</TABLE>
45
<PAGE>
EVERGREEN
Growth and Income Fund
Schedule of Investments(continued)
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Energy - 0.6%
464,300 Occidental Petroleum Corp. .......................... $ 9,227,962
------------
Finance & Insurance - 6.8%
22,000 American International Group, Inc. .................. 2,290,750
250,925 Citigroup, Inc. ..................................... 14,412,505
17,100 Edwards (A.G.), Inc. ................................ 566,438
290,300 Federal Home Loan
Mortgage Corp. ..................................... 14,569,431
80,800 Goldman Sachs Group, Inc. ........................... 7,403,300
160,500 Hartford Financial Services Group, Inc. ............. 6,119,062
173,432 Legg Mason, Inc. .................................... 6,395,305
167,200 Lehman Brothers Holdings, Inc. ...................... 11,954,800
87,900 MBIA, Inc. .......................................... 4,400,494
557,200 Neuberger Berman, Inc. .............................. 13,825,525
339,600 Price (T.) Rowe & Associates, Inc. .................. 13,201,950
100,800 Progressive Corp. Ohio............................... 6,274,800
288,900 UnumProvident Corp. ................................. 7,728,075
------------
109,142,435
------------
Food & Beverage Products - 0.0%
39,900 Darden Restaurants, Inc. ............................ 633,413
------------
Forest Products - 0.2%
113,000 Deltic Timber Corp. ................................. 2,542,500
------------
Healthcare Products &
Services - 8.4%
202,900 Abbott Laboratories.................................. 6,619,612
167,000 * Acuson Corp. ...................................... 2,254,500
38,000 * Alza Corp. ........................................ 1,356,125
122,800 American Home Products Corp. ........................ 5,779,275
5,100 Beckman Coulter, Inc. ............................... 266,794
14,000 * Biogen, Inc. ...................................... 1,207,500
45,000 * Dendrite International, Inc. ...................... 1,327,500
156,700 * Elan Corp. Plc, ADR................................ 4,710,794
276,525 * Health Management Associates, Inc., Cl. A ......... 3,854,067
675,200 IMS Health, Inc. .................................... 15,149,800
112,400 Johnson & Johnson.................................... 9,673,425
57,300 Lilly (Eli) & Co. ................................... 3,831,938
33,300 Medpartners, Inc. ................................... 239,344
147,700 Monsanto Co. ........................................ 5,215,656
189,100 PE Corp-PE Biosystems Group.......................... 28,317,725
172,800 Pfizer, Inc. ........................................ 6,285,600
221,500 Schering-Plough Corp. ............................... 9,746,000
93,500 Shared Medical System Corp. ......................... 4,137,375
276,000 * Sybron International Corp. ........................ 6,365,250
209,500 Warner-Lambert Co. .................................. 19,889,406
------------
136,227,686
------------
Industrial Specialty Products & Services - 3.4%
365,200 AptarGroup, Inc. .................................... 8,034,400
232,500 Bemis Co., Inc. ..................................... 7,338,281
7,400 Corning, Inc. ....................................... 1,141,450
59,000 Danaher Corp. ....................................... 2,544,375
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Industrial Specialty Products & Services - continued
539,300 Donaldson, Inc. ..................................... $ 11,123,063
227,200 Dover Corp. ......................................... 9,159,000
141,280 Illinois Tool Works, Inc. ........................... 8,264,880
33,200 Teleflex, Inc. ...................................... 1,054,100
592,800 * Unova, Inc. ....................................... 6,372,600
------------
55,032,149
------------
Information Services & Technology - 13.4%
18,000 * 3Com Corp. ........................................ 913,500
162,700 * Adaptec, Inc. ..................................... 8,521,412
92,000 Adobe Systems, Inc. ................................. 5,065,750
62,200 * Applied Materials, Inc. ........................... 8,536,950
28,000 * BMC Software, Inc. ................................ 1,060,500
580,300 * Cadence Design Systems, Inc. ...................... 11,968,687
34,000 * CMGI, Inc. ........................................ 3,827,125
353,300 * Compuware Corp. ................................... 7,485,544
160,500 * Dell Computer Corp. ............................... 6,169,219
17,100 Electronic Data Systems Corp. ....................... 1,156,388
127,200 * EMC Corp. ......................................... 13,546,800
45,300 Go2Net............................................... 3,646,650
250,700 Intel Corp. ......................................... 24,803,631
111,300 International Business
Machines Corp. ..................................... 12,486,469
32,700 * Jabil Circuit, Inc. ............................... 2,068,275
216,200 * KLA-Tencor Corp. .................................. 12,674,725
27,500 * Legato Systems, Inc. .............................. 692,656
110,000 Macromedia, Inc. .................................... 7,528,125
303,825 * Microsoft Corp. ................................... 29,736,872
58,800 * Netratings, Inc. .................................. 2,175,600
441,300 * Network Associates, Inc. .......................... 11,446,219
94,600 * Parametric Technology Corp. ....................... 2,027,987
724,100 * Seagate Technology................................. 29,009,256
7,000 SOFTBANK CORP. ...................................... 6,848,039
16,400 * Veritas Software Corp. ............................ 2,392,350
------------
215,788,729
------------
Leisure & Tourism - 1.3%
41,000 Carnival Corp., Cl. A................................ 1,847,562
697,280 Gaylord Entertainment Co. ........................... 19,436,680
------------
21,284,242
------------
Oil/Energy - 3.9%
115,900 Atlantic Richfield Co. .............................. 8,924,300
24,200 Berry Petroleum Co., Cl. A........................... 352,413
81,100 BP Amoco Plc, ADR.................................... 4,359,125
82,505 Conoco, Inc., Cl. B.................................. 1,944,024
55,000 Exxon Mobil Corp. ................................... 4,592,500
145,500 * Houston Exploration Co. ........................... 2,600,813
205,755 Kerr-McGee Corp. .................................... 11,393,683
130,200 Murphy Oil Corp. .................................... 7,470,225
551,000 Southwestern Energy Co. ............................. 3,133,812
60,000 Texaco, Inc. ........................................ 3,172,500
</TABLE>
46
<PAGE>
EVERGREEN
Growth and Income Fund
Schedule of Investments(continued)
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Oil/Energy - continued
230,800 The Williams Companies, Inc. ..................... $ 8,943,500
265,000 Tosco Corp. ...................................... 6,807,187
--------------
63,694,082
--------------
Oil Field Services - 0.2%
16,500 * Nabors Industries, Inc.......................... 488,812
30,014 Schlumberger, Ltd................................. 1,832,730
21,378 Transocean Sedco Forex, Inc. ..................... 680,088
--------------
3,001,630
--------------
Paper & Packaging - 0.9%
449,200 Asia Pulp & Paper Ltd., ADR....................... 3,312,850
115,500 Kimberly-Clark Corp............................... 7,153,781
59,140 * Sealed Air Corp. ............................... 3,319,233
--------------
13,785,864
--------------
Printing, Publishing, Broadcasting &
Entertainment - 12.2%
96,000 * AMFM, Inc. ..................................... 7,488,000
352,349 * Clear Channel Communications, Inc............... 30,434,145
798,500 Disney (Walt) Co. ................................ 28,995,531
259,300 * Emmis Broadcasting Corp., Cl. A................. 22,931,844
336,300 * Fox Entertainment Group, Inc.................... 7,903,050
45,000 Knight-Ridder, Inc................................ 2,399,063
607,800 Martha Stewart Living Omnimedia, Inc.............. 13,675,500
169,500 McGraw-Hill Companies, Inc........................ 9,502,594
651,000 New York Times Co., Cl. A......................... 29,742,562
39,300 Time Warner, Inc.................................. 3,141,544
87,800 * Univision Communications, Inc., Cl. A........... 9,405,575
240,600 * Viacom, Inc., Cl. A............................. 13,428,487
5,000 Washington Post Co., Cl. B........................ 2,750,000
342,000 * Young Broadcasting, Inc., Cl. A................. 15,197,625
--------------
196,995,520
--------------
Real Estate - 0.9%
351,514 Duke Weeks Realty Corp............................ 6,964,371
26,300 Kilroy Realty Corp. REIT.......................... 511,206
70,000 Kimco Realty Corp. REIT........................... 2,467,500
26,000 Liberty Property Trust REIT....................... 606,125
87,200 Post Property, Inc. REIT.......................... 3,346,300
--------------
13,895,502
--------------
Retailing & Wholesale - 0.3%
78,300 Intimate Brands, Inc. ............................ 2,368,575
208,885 * Saks, Inc. ..................................... 2,898,279
--------------
5,266,854
--------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Telecommunication Services & Equipment - 4.0%
62,500 Aironet Wireless Communication.................... $ 4,285,156
323,385 * Global Crossing, Ltd. .......................... 16,411,789
277,125 Motorola, Inc..................................... 37,896,844
33,100 Omnipoint Corp. .................................. 3,394,819
71,700 * Qwest Communications International, Inc......... 2,823,187
--------------
64,811,795
--------------
Transportation - 3.4%
161,900 Burlington Northern Santa Fe Corp. ............... 3,895,719
105,500 Expeditores International Washington, Inc......... 4,447,484
513,700 Kansas City Southern Industries, Inc.............. 35,541,619
311,525 Southwest Airlines Co............................. 4,964,930
159,900 Union Pacific Corp................................ 6,396,000
--------------
55,245,752
--------------
Utilities - Electric - 1.7%
141,100 Energy East Corp.................................. 3,183,569
666,900 * Niagara Mohawk Holdings, Inc.................... 8,377,931
400,000 TNP Enterprises, Inc.............................. 16,500,000
--------------
28,061,500
--------------
Utilities - Gas - 0.5%
280,900 Piedmont Natural Gas Co., Inc. ................... 8,005,650
--------------
Utilities - Telephone - 3.0%
327,400 AT&T Corp......................................... 17,270,350
14,000 AT&T Corp.-Liberty Media Group, Cl. A............. 715,750
206,100 Broadwing, Inc.................................... 7,831,800
225,000 Centurytel, Inc................................... 8,606,250
40,000 * Nextel Communications, Inc., Cl. A.............. 4,255,000
60,000 Sprint Corp. ..................................... 3,881,250
100,500 U.S. West, Inc. .................................. 6,683,250
--------------
49,243,650
--------------
Total Common Stocks
(cost $1,195,229,491)............................ 1,577,153,547
--------------
PREFERRED STOCKS - 0.0%
Healthcare Products &
Services - 0.0%
130,000 * Fresenius National Med Care, Inc., Ser. D (cost
$22,740)......................................... 1,430
--------------
CONVERTIBLE PREFERRED - 1.6%
Aerospace & Defense - 0.5%
150,000 Loral Space & Communications 6.00%, 11/01/2006.... 7,828,200
--------------
</TABLE>
47
<PAGE>
EVERGREEN
Growth and Income Fund
Schedule of Investments(continued)
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
CONVERTIBLE PREFERRED - continued
Consumer Products &
Services - 0.5%
647,600 Tribune Co. (exchangeable for Mattel, Inc. common
stock) 6.25%, 08/15/2001......................... $ 8,702,125
--------------
Paper & Packaging - 0.3%
78,375 * Sealed Air Corp. $2.00, 04/01/2018, Ser. A...... 4,173,469
--------------
Telecommunication Services & Equipment - 0.3%
18,800 Global Crossings Cv 7.00%, 12/31/2009, 144A....... 5,080,700
--------------
Total Convertible Preferred
(cost $24,858,249)............................... 25,784,494
--------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CONVERTIBLE DEBENTURES - 0.3%
Information Services & Technology - 0.1%
$7,000,000 Network Associates, Inc. 0.01%, 2/13/2018......... $ 2,502,500
--------------
Telecommunication Services & Equipment - 0.2%
1,900,000 American Tower Corp. 6.25%, 10/15/2009............ 3,139,750
--------------
Total Convertible Debentures
(cost $4,089,871) 5,642,250
--------------
SHORT-TERM INVESTMENTS - 0.4%
Repurchase Agreement - 0.4%
6,226,000 State Street Bank & Trust Co., 5.63%, purchased
1/31/2000, maturing 2/1/2000, maturity
value $6,226,974
(cost $6,226,000) (a)............................ 6,226,000
--------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $1,230,426,351)...................... 99.9% 1,614,807,721
Other Assets and Liabilities - net.......... 0.1 1,879,868
----- --------------
Net Assets.................................. 100.0% $1,616,687,589
===== ==============
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government
and/or agency obligations based on market prices plus accrued interest at
January 31, 2000.
144A Securities that may be resold to "qualified institutional buyers" under
Rule 144A of the Securities Act of 1933. These securities have been de-
termined to be liquid under guidelines established by the Board of Trust-
ees.
* Non-income producing security.
Summary of Abbreviations
ADR American Depository Receipt
REIT Real Estate Investment Trust
See Combined Notes to Financial Statements.
48
<PAGE>
EVERGREEN
Income and Growth Fund
Schedule of Investments
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 56.2%
Aerospace & Defense - 0.6%
50,000 Cordant Technologies, Inc............................ $ 1,653,125
81,900 General Dynamics Corp................................ 3,859,538
------------
5,512,663
------------
Automotive Equipment & Manufacturing - 1.4%
555,900 Dana Corp............................................ 13,063,650
19,300 Goodyear Tire & Rubber Co............................ 458,375
------------
13,522,025
------------
Banks - 7.7%
221,500 Amcore Financial, Inc................................ 4,513,062
219,917 AmSouth Bancorp...................................... 3,834,803
135,000 Astoria Financial Corp............................... 3,931,875
250,600 Bancwest Corp........................................ 4,040,925
100,000 ++CB Bancshares, Inc................................. 2,825,000
98,700 CCB Financial Corp................................... 4,293,450
58,000 Charter One Financial, Inc........................... 1,127,375
86,500 Comerica, Inc........................................ 3,822,219
131,250 Commerce Bancshares, Inc............................. 4,040,039
125,000 First Charter Corp................................... 1,726,562
200,000 First Security Corp.................................. 5,175,000
141,000 First Tennessee National Corp........................ 3,683,625
8,000 First Union Corp. **................................. 268,500
173,000 Hibernia Corp., Cl. A................................ 1,816,500
287,353 Interchange Financial Services Corp.................. 4,885,001
148,000 KeyCorp.............................................. 3,108,000
84,000 Keystone Financial, Inc.............................. 1,538,250
260,000 North Fork Bancorp, Inc.............................. 4,420,000
121,168 Pacific Century Financial Corp....................... 2,082,575
310,430 Peoples Heritage Financial Group, Inc................ 4,559,441
335,730 Republic Security Financial Corp..................... 2,517,975
138,375 Susquehanna Bancshares, Inc. ........................ 2,015,086
150,000 U.S. Bancorp......................................... 3,328,125
321,960 USBANCORP, Inc....................................... 3,420,825
------------
76,974,213
------------
Business Equipment &
Services - 0.1%
25,000 Dun & Bradstreet Corp................................ 629,688
------------
Capital Goods - 2.2%
1,539,900 CNH Global NV........................................ 21,366,112
------------
Consumer Products &
Services - 1.5%
220,000 Industrie Natuzzi SpA, ADR........................... 2,447,500
100,000 Lancaster Colony Corp................................ 3,175,000
180,000 Mattel, Inc.......................................... 1,878,750
224,415 Newell Rubbermaid, Inc............................... 6,732,450
60,000 Service Corp. International.......................... 273,750
52,200 Tupperware Corp...................................... 851,512
------------
15,358,962
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Electrical Equipment &
Services - 2.5%
100,000 Emerson Electric Co.................................. $ 5,506,250
5,000 Hubbell, Inc., Cl. A................................. 121,875
286,656 Hubbell, Inc., Cl. B................................. 7,435,140
400,000 Thomas & Betts Corp.................................. 12,175,000
------------
25,238,265
------------
Finance & Insurance - 1.1%
20,000 Hartford Financial Services Group, Inc............... 762,500
30,000 Lincoln National Corp................................ 1,108,125
104,500 Partnerre Ltd........................................ 3,030,500
104,536 UnumProvident Corp................................... 2,796,338
79,000 XL Capital Ltd., Cl. A............................... 3,564,875
------------
11,262,338
------------
Healthcare Products &
Services - 6.6%
285,000 American Home Products Corp.......................... 13,412,812
210,000 Baxter International, Inc............................ 13,413,750
200,200 Beckman Coulter, Inc................................. 10,472,963
146,800 Bristol-Myers Squibb Co.............................. 9,688,800
50,000 Lilly (Eli) & Co..................................... 3,343,750
262,700 Shared Medical System Corp........................... 11,624,475
40,000 Warner-Lambert Co.................................... 3,797,500
------------
65,754,050
------------
Industrial Specialty Products & Services - 0.1%
80,000 Federal Signal Corp.................................. 1,255,000
------------
Information Services & Technology - 0.7%
193,500 * Network Associates, Inc............................ 5,018,906
50,000 * Seagate Technology................................. 2,003,125
1,000 * Sycamore Networks, Inc............................. 319,000
------------
7,341,031
------------
Leisure & Tourism - 0.3%
108,700 Gaylord Entertainment Co............................. 3,030,013
------------
Oil/Energy - 5.0%
23,000 Atlantic Richfield Co................................ 1,771,000
21,172 BP Amoco Plc, ADR.................................... 1,137,995
122,840 Conoco, Inc., Cl. B.................................. 2,894,417
314,400 Murphy Oil Corp...................................... 18,038,700
72,000 Texaco, Inc.......................................... 3,807,000
582,000 The Williams Companies, Inc.......................... 22,552,500
------------
50,201,612
------------
Oil Field Services - 0.3%
110,344 * Nabors Industries, Inc............................. 3,268,941
------------
Paper & Packaging - 0.2%
100,000 * Smurfit Container Corp............................. 1,981,250
------------
</TABLE>
49
<PAGE>
EVERGREEN
Income and Growth Fund
Schedule of Investments(continued)
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Printing, Publishing, Broadcasting &
Entertainment - 0.5%
10,000 Disney (Walt) Co................................... $ 363,125
40,000 Emmis Communications Corp.......................... 2,622,500
50,000 New York Times Co., Cl. A.......................... 2,284,375
------------
5,270,000
------------
Real Estate - 2.5%
124,900 Equity Residential Properties Trust REIT........... 5,183,350
495,900 Gables Residential Trust REIT...................... 10,754,831
235,700 Post Property, Inc. REIT........................... 9,044,988
------------
24,983,169
------------
Retailing & Wholesale - 0.1%
30,000 Longs Drug Stores Corp............................. 645,000
------------
Telecommunication Services & Equipment - 0.5%
100,000 * Global Crossing, Ltd............................. 5,075,000
------------
Textile & Apparel - 0.0%
10,000 V.F. Corp.......................................... 259,375
------------
Thrift Institutions - 0.4%
282,000 First Essex Bancorp, Inc........................... 3,965,625
------------
Transportation - 0.6%
137,000 Union Pacific Corp................................. 5,480,000
------------
Utilities - Electric - 15.9%
500,000 Central & South West Corp.......................... 10,093,750
400,000 Cinergy Corp....................................... 9,950,000
399,500 Duke Power Co...................................... 23,071,125
400,000 FirstEnergy Corp................................... 9,100,000
239,000 FPL Group, Inc..................................... 10,082,812
171,900 GPU, Inc........................................... 4,985,100
215,524 LG&E Energy Corp................................... 3,663,908
230,000 MDU Resources Group, Inc........................... 4,556,875
200,000 New Century Energies, Inc.......................... 5,787,500
181,700 PP&L Resources, Inc................................ 4,213,169
40,000 Public Service Co. of New Mexico................... 635,000
630,000 Scana Corp......................................... 17,128,125
543,000 Sempra Energy...................................... 10,079,438
800,000 Southern Co........................................ 20,500,000
280,000 Texas Utilities Co................................. 9,905,000
150,200 TNP Enterprises, Inc............................... 6,195,750
448,400 Wisconsin Energy Corp.............................. 8,855,900
------------
158,803,452
------------
Utilities - Gas - 2.6%
401,900 Keyspan Corp....................................... 9,419,531
391,300 Peoples Energy Corp................................ 12,228,125
163,100 Piedmont Natural Gas Co., Inc...................... 4,648,350
------------
26,296,006
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Utilities - Telephone - 2.8%
149,655 AT&T Corp.......................................... $ 7,894,301
50,000 Broadwing, Inc..................................... 1,900,000
250,000 GTE Corp........................................... 18,328,125
------------
28,122,426
------------
Total Common Stocks
(cost $569,720,800)............................... 561,596,216
------------
CONVERTIBLE PREFERRED - 28.0%
Advertising & Related
Services - 1.0%
395,000 Snyder Strypes Trust............................... 9,529,375
------------
Aerospace & Defense - 1.5%
286,000 Loral Space & Communications 6.00%, 11/01/2006..... 14,925,768
------------
Banks - 0.9%
210,000 National Australia Bank, Ltd. 7.875%, Series UNIT.. 5,368,125
116,200 WBK Trust 10.00%, STRYPES (exchangeable for Westpac
Banking Corp. Common Stock)....................... 3,609,463
------------
8,977,588
------------
Chemical & Agricultural
Products - 0.9%
15,000 Hercules Trust II 6.50%, 6/30/2029................. 9,008,445
------------
Communication Systems & Services - 5.6%
218,700 MediaOne Group, Inc. PIES 7.0% 11/2/2000........... 11,263,050
330,000 Decs Trust VI--Metromedia Fiber.................... 19,965,000
380,000 Qwest Trends Trust
5.75%, 144A ...................................... 24,890,000
------------
56,118,050
------------
Consumer Products &
Services - 1.0%
100,000 Newell Financial Trust I 5.25% 12/01/2027.......... 3,937,500
460,000 Tribune Co. (exchangeable for Mattel, Inc. common
stock) 6.25%, 08/15/2001.......................... 6,181,250
------------
10,118,750
------------
Diversified Companies - 0.9%
400,000 Ingersoll Rand Co.
6.75%, PRIDES..................................... 9,275,000
------------
Electronic Equipment &
Services - 1.1%
205,000 Pioneer Standard Electronics, Inc. 6.75%,
3/31/2028......................................... 10,557,500
------------
Finance & Insurance - 0.7%
20,000 American General Corp. $3.00, Series A, MIPS....... 1,483,750
100,000 St. Paul Capital
6.00%, MIPS....................................... 5,500,000
------------
6,983,750
------------
</TABLE>
50
<PAGE>
EVERGREEN
Income and Growth Fund
Schedule of Investments(continued)
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
CONVERTIBLE PREFERRED - continued
Food & Beverage Products - 0.9%
200,000 Wendys Financing I
5.00%, Series A, TECONS........................... $ 9,000,000
------------
Healthcare Products &
Services - 0.1%
30,000 McKesson Financing Trust 5.00% 6/01/2027........... 1,091,250
------------
Independent Power
Producers - 2.2%
250,000 AES Trust III...................................... 16,265,625
75,960 Calpine Capital Trust.............................. 5,469,120
------------
21,734,745
------------
Oil/Energy - 0.3%
95,000 Callon Petroleum Co.
8.50%, Series A................................... 2,778,750
------------
Paper & Packaging - 0.1%
30,000 International Paper Capital Trust.................. 1,462,500
------------
Printing, Publishing, Broadcasting &
Entertainment - 1.2%
92,000 Houston Industries, Inc.
7.00%, ACES (exchangeable for Time Warner, Inc.
common stock)..................................... 12,259,000
------------
Retailing & Wholesale - 1.4%
114,800 CVS Automatic Common Exchange Security............. 7,390,250
195,000 Merrill Lynch & Co., Inc. (exchangeable for Dollar
General Corp. common stock) 8.50% 5/15/2001....... 6,690,937
------------
14,081,187
------------
Telecommunication Services & Equipment - 3.9%
55,000 Qualcomm Financial Trust I 5.75%, 3/01/2012........ 38,953,750
------------
Transportation - 1.3%
88,700 CNF Trust I
5.00%, Ser. A, TECONS (exchangeable for CNF
Transportation, Inc. common stock)................ 4,102,375
216,800 Union Pacific Capital Trust 4/1/28................. 8,617,800
------------
12,720,175
------------
Utilities - Electric - 3.0%
45,000 BNDES Participacoes S.A. 7.25%, 2/15/2001.......... 855,000
238,600 Texas Utilities Co.
9.25%, PRIDES..................................... 10,438,750
800,000 Utilicorp United, Inc. 9.75% 11/16/2002............ 18,550,000
------------
29,843,750
------------
Total Convertible Preferred
(cost $246,479,399)............................... 279,419,333
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CONVERTIBLE DEBENTURES - 7.0%
Advertising & Related
Services - 0.3%
$ 3,000,000 Young And Rubicam Inc. 3.00%, 1/15/2005............ $ 2,988,750
------------
Electronic Equipment &
Services - 0.2%
1,500,000 Lattice Semiconductor Corp. 4.75%, 11/1/2006....... 2,148,750
------------
Information Services & Technology - 1.4%
2,500,000 12 Technologies, Inc. 5.25%, 12/15/2006............ 3,550,000
4,000,000 Excite At Home
4.75%, 12/15/2006................................. 3,435,000
2,000,000 Rational Software Corp. 5.00%, 2/1/2007............ 2,000,000
3,000,000 Usinternetworking, Inc. 7.00%, 11/1/2004........... 5,598,750
------------
14,583,750
------------
Printing, Publishing, Broadcasting &
Entertainment - 1.1%
4,000,000 Exodus Communications, Inc. 4.75%, 7/15/2008....... 6,950,000
4,000,000 Mail Common, Inc. 7.00%, 2/15/2005................. 3,865,000
------------
10,815,000
------------
Telecommunication Services & Equipment - 4.0%
12,000,000 American Tower Corp. 6.25%, 10/15/2009............. 19,830,000
10,000,000 Level 3 Communications, Inc. 6.00%, 9/15/2009...... 19,100,000
1,175,000 Orbital Sciences Corp. 5.00%, 10/1/2002............ 998,750
------------
39,928,750
------------
Total Convertible Debentures (cost $46,869,750).... 70,465,000
------------
CORPORATE BONDS - 0.1%
Banks - 0.1%
1,000,000 NationsBank Corp.
6.50%, 8/15/2003
(cost $1,012,370)................................. 968,993
------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 5.0%
Government Agency Notes & Bonds - 4.8%
2,000,000 Federal Farm Credit Bank 5.75%, 12/7/2028.......... 1,627,446
Federal Home Loan Bank:
2,000,000 5.375%, 10/6/2003.................................. 1,882,600
2,000,000 6.532%, 12/28/2007................................. 1,868,188
Federal Home Loan Mortgage Corp.:
2,000,000 6.54%, 12/10/2007.................................. 1,873,756
2,000,000 6.542%, 3/19/2008.................................. 1,865,026
2,000,000 7.585%, 9/19/2006.................................. 1,969,188
2,000,000 7.865%, 8/8/2011................................... 1,940,208
</TABLE>
51
<PAGE>
EVERGREEN
Income and Growth Fund
Schedule of Investments(continued)
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS - continued
Government Agency Notes & Bonds - continued
Federal National Mortgage Association:
$ 5,000,000 5.65%, 2/22/2028.................................... $ 4,021,990
1,850,000 6.00%, 1/14/2005.................................... 1,751,282
4,000,000 6.08%, 9/1/2028..................................... 3,416,108
2,215,000 6.10%, 1/26/2005.................................... 2,103,413
3,000,000 6.16%, 1/23/2008.................................... 2,766,099
2,000,000 6.24%, 1/14/2008.................................... 1,848,920
3,000,000 6.32%, 3/3/2008..................................... 2,788,698
1,000,000 6.41%, 3/8/2006..................................... 957,613
5,000,000 6.42%, 2/12/2008.................................... 4,664,925
2,000,000 6.46%, 1/1/2008..................................... 1,869,434
4,000,000 6.52%, 3/5/2008..................................... 3,741,280
2,355,000 6.875%, 9/24/2012................................... 2,201,998
3,000,000 7.28%, 5/23/2007.................................... 2,904,489
------------
48,062,661
------------
U.S. Treasury Bonds - 0.2%
1,500,000 U.S. Treasury Bonds 7.125%, 2/15/2023............... 1,581,563
------------
Total U.S. Government & Agency Obligations
(cost $53,888,061)................................. 49,644,224
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
SHORT-TERM INVESTMENTS - 2.6%
Repurchase Agreement - 2.6%
$26,025,000 State Street Bank & Trust Co., 5.63%, purchased
1/31/2000, maturing 2/1/2000, maturity
value $26,029,070
(cost $26,025,000) (a)........................... $ 26,025,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $943,995,380)......................... 98.9% 988,118,766
Other Assets and Liabilities - net........... 1.1 11,254,071
----- ------------
Net Assets................................... 100.0% $999,372,837
===== ============
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government
and/or agency obligations based on market prices plus accrued in-
terest at January 31, 2000.
144A Securities that may be resold to "qualified institutional buyers"
under Rule 144A of the Securities Act of 1933. These securities
have been determined to be liquid under guidelines established by
the Board of Trustees.
++ Investment in a non-controlled affiliate. The Fund owns over 5% of
the outstanding voting shares of CB Bancshares, Inc. The Fund has a
cost basis of $2,954,312 in the issue at January 31, 2000. The Fund
earned $25,725 of income from this investment during the six months
ended January 31, 2000.
** At January 31, 2000 the Fund owned 8,000 shares of common stock of
First Union Corp at a cost of $106,108. During the six months ended
January 31, 2000 the Fund earned $7,520 in dividend income from
this investment. These shares were acquired by the Fund through a
merger with another investment company sub-advised by Lieber & Com-
pany. The previous holder acquired these shares prior to the acqui-
sition of the advisor and Lieber & Company by First Union.
* Non-income producing security.
Summary of Abbreviations
ACES Automatically Convertible Equity Securities
ADR American Depository Receipts
MIPS Monthly Income Preferred Shares
PRIDES Preferred Redeemable Increased Dividend Equity Securities
REIT Real Estate Investment Trust
STRYPES Structured Yield Product Exchangeable for Stock
TECONS Term Convertible Shares
52
<PAGE>
EVERGREEN
Small Cap Value Fund
Schedule of Investments
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 92.5%
Automotive Equipment & Manufacturing - 1.1%
84,000 Arvin Industries, Inc. ............................... $ 1,947,750
------------
Banks - 12.5%
61,600 Britton & Koontz Capital Corp. ....................... 1,155,000
31,280 Centura Banks, Inc. .................................. 1,268,795
99,225 Charter One Financial, Inc. .......................... 1,928,686
35,885 Commercial Bankshares, Inc. .......................... 735,642
157,186 First Oak Brook Bancshares, Inc., Cl. A............... 2,573,921
143,328 First State Bancorp................................... 1,899,096
221,900 Granite State Bankshares, Inc. ....................... 4,382,525
69,500 Independent Bankshares, Inc. ......................... 899,156
65,500 Mid-State Bancshares.................................. 1,801,250
40,000 Pacific Bank, N.A..................................... 1,117,500
128,400 Peoples Heritage Financial Group, Inc. ............... 1,885,875
89,500 Prosperity Bancshares, Inc. .......................... 1,426,406
5,000 Southside Bancshares Corp. ........................... 43,125
83,000 West Coast Bancorp, Inc............................... 1,091,969
------------
22,208,946
------------
Building, Construction &
Furnishings - 9.7%
129,700 American Woodmark Corp. .............................. 2,310,281
254,900 Craftmade International, Inc.......................... 2,182,581
125,000 * Crossmann Communities, Inc.......................... 2,031,250
150,000 D.R. Horton, Inc...................................... 1,734,375
174,000 * Furniture Brands International, Inc. ............... 2,958,000
151,500 Industrie Natuzzi SpA, ADR............................ 1,685,438
190,200 Standard Pacific Corp. ............................... 1,771,237
121,200 * Stanley Furniture Co., Inc. ........................ 2,181,600
30,000 * Toll Brothers, Inc. ................................ 510,000
------------
17,364,762
------------
Business Equipment & Services - 2.8%
123,000 * Interim Services, Inc. ............................. 3,082,687
32,500 * Zebra Technologies Corp., Cl. A..................... 1,923,594
------------
5,006,281
------------
Consumer Products & Services - 14.6%
141,000 * Chattem, Inc. ...................................... 2,749,500
115,000 CPI Corp. ............................................ 2,565,938
90,000 * CSG Systems International, Inc. .................... 3,403,125
113,068 First Years, Inc. .................................... 961,078
120,000 * Fossil, Inc. ....................................... 2,332,500
163,400 * Guess?, Inc. ....................................... 3,829,687
110,000 Lancaster Colony Corp. ............................... 3,492,500
225,000 * Maxwell Shoe, Inc. Cl. A............................ 1,856,250
80,500 Polaris Industries, Inc. ............................. 2,606,187
78,000 Stewart Enterprises, Inc., Cl. A...................... 448,500
328,600 York Group, Inc. ..................................... 1,827,838
------------
26,073,103
------------
Electrical Equipment & Services - 3.2%
100,000 Applied Power, Inc., Cl. A............................ 2,787,500
60,700 Helix Technology Corp. ............................... 2,951,538
------------
5,739,038
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Electronic Equipment & Services - 1.5%
67,100 * Hadco Corp....................................... $ 2,667,225
------------
Finance & Insurance - 1.1%
134,900 Morgan Keegan, Inc................................. 1,972,913
------------
Food & Beverage Products - 4.4%
230,400 International Multifoods Corp. .................... 2,923,200
203,000 Michael Foods, Inc. ............................... 4,250,313
25,000 * The Hain Food Group, Inc......................... 618,750
------------
7,792,263
------------
Healthcare Products & Services - 8.7%
34,500 Alpharma, Inc., Cl. A.............................. 1,173,000
216,300 * AmeriSource Health Corp., Cl. A.................. 3,920,437
62,200 * ArthroCare Corp.................................. 4,237,375
40,000 Beckman Coulter, Inc............................... 2,092,500
45,000 Jones Pharma, Inc.................................. 2,612,813
66,500 * Sybron International Corp........................ 1,533,656
------------
15,569,781
------------
Industrial Specialty Products & Services - 2.5%
50,000 Badger Meter, Inc.................................. 1,537,500
81,600 Donaldson, Inc..................................... 1,683,000
42,000 * Meade Instruments Corp........................... 1,225,875
------------
4,446,375
------------
Information Services &
Technology - 2.2%
109,200 * SBS Technologies, Inc............................ 3,903,900
------------
Manufacturing - Distributing - 1.2%
113,000 LSI Industries, Inc................................ 2,147,000
------------
Oil/Energy - 3.5%
151,100 Berry Petroleum Co., Cl. A......................... 2,200,394
129,200 Cabot Oil & Gas Corp., Cl. A....................... 1,905,700
192,709 Pennzoil-Quaker State Co. ......................... 2,204,109
------------
6,310,203
------------
Printing, Publishing, Broadcasting &
Entertainment - 2.4%
248,400 Bowne & Co., Inc. ................................. 2,716,875
147,584 * Obie Media Corp.................................. 1,577,304
------------
4,294,179
------------
Retailing & Wholesale - 9.0%
93,200 * Ames Department Stores, Inc. .................... 1,945,550
90,000 * Papa John's International, Inc................... 2,238,750
350,000 Pier 1 Imports, Inc................................ 2,887,500
260,000 Ross Stores, Inc................................... 3,315,000
188,100 * Sonic Automotive, Inc............................ 1,446,019
90,000 * Whole Foods Market, Inc. ........................ 4,140,000
------------
15,972,819
------------
</TABLE>
53
<PAGE>
EVERGREEN
Small Cap Value Fund
Schedule of Investments(continued)
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Telecommunication Services & Equipment - 5.5%
142,000 Communications Systems, Inc. ......................... $ 1,783,875
244,695 Hickory Tech Corp. ................................... 3,364,556
60,000 Scientific Atlanta, Inc. ............................. 4,623,750
------------
9,772,181
------------
Thrift Institutions - 2.2%
21,000 Bancorp Connecticut, Inc.............................. 301,875
312,900 Horizon Financial Corp. .............................. 3,168,113
79,200 MetroWest Bank........................................ 455,400
------------
3,925,388
------------
Utilities - Electric - 1.3%
116,100 MDU Resources Group, Inc. ............................ 2,300,231
------------
Utilities - Gas - 3.1%
37,300 Chesapeake Utilities Corp. ........................... 678,394
15,000 Connecticut Energy Corp............................... 621,562
20,000 CTG Resources, Inc. .................................. 735,000
16,000 Delta Natural Gas Co., Inc............................ 246,000
36,600 Public Service Co. of North Carolina, Inc. ........... 1,194,075
45,800 Yankee Energy System, Inc. ........................... 2,020,925
------------
5,495,956
------------
Total Common Stocks
(cost $170,118,543).................................. 164,910,294
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CONVERTIBLE DEBENTURES - 0.6%
Business Equipment & Services - 0.6%
$1,250,000 Interim Services, Inc.
4.50%, 6/1/2005
(cost $1,250,000)............................... $ 1,112,500
------------
CORPORATE BONDS - 2.5%
Healthcare Products & Services - 2.5%
3,500,000 Alpharma, Inc.
5.75%, 4/1/2005
(cost $3,500,000)............................... 4,510,625
------------
SHORT-TERM INVESTMENTS - 1.8%
Repurchase Agreement - 1.8%
3,145,000 State Street Bank & Trust Co., 5.63%, purchased
1/31/2000, maturing 2/1/2000, maturity value
$3,145,492 (cost $3,145,000) (a)................ 3,145,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -(cost $178,013,543)......... 97.4% 173,678,419
Other Assets and Liabilities - net............. 2.6 4,689,252
----- ------------
Net Assets..................................... 100.0% $178,367,671
===== ============
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at
January 31, 2000.
* Non-income producing security.
Summary of Abbreviations
ADR American Depository Receipt
See Combined Notes to Financial Statements.
54
<PAGE>
EVERGREEN
Utility Fund
Schedule of Investments
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 62.2%
Communication Systems & Services - 2.9%
20,000 * American Tower Systems Corp., Cl. A................. $ 717,500
19,681 * MCI WorldCom, Inc................................... 904,096
160,000 Teleglobe, Inc........................................ 4,180,000
------------
5,801,596
------------
Energy - 4.6%
140,000 Enron Corp............................................ 9,441,250
------------
Independent Power Producers - 2.2%
62,200 * Calpine Corp........................................ 4,548,375
------------
Telecommunication Services & Equipment - 1.4%
46,600 * Time Warner Telecom, Inc............................ 2,830,950
------------
Utilities - Electric - 26.5%
125,000 Alliant Corp.......................................... 3,726,562
86,000 CH Energy Group, Inc.................................. 2,666,000
510,000 Companhia Paranaense de Energia-Copel, Plc., ADR...... 4,111,875
54,000 Consolidated Edison, Inc.............................. 1,765,125
88,000 Duke Power Co......................................... 5,082,000
160,000 Energy East Corp...................................... 3,610,000
331,400 * Niagara Mohawk Holdings, Inc........................ 4,163,212
150,000 PP&L Resources, Inc................................... 3,478,125
200,000 Public Service Co. of New Mexico...................... 3,175,000
100,000 Public Service Enterprise Group, Inc.................. 3,437,500
164,100 Reliant Energy, Inc................................... 3,743,531
184,730 * Scottish Power Plc, ADR............................. 5,114,712
199,200 Southern Co........................................... 5,104,500
29,000 Texas Utilities Co.................................... 1,025,875
180,050 Wisconsin Energy Corp................................. 3,555,988
------------
53,760,005
------------
Utilities - Gas - 7.2%
187,000 MDU Resources Group, Inc.............................. 3,704,938
120,000 Peoples Energy Corp................................... 3,750,000
51,100 Piedmont Natural Gas Co., Inc......................... 1,456,350
95,300 Semco Energy, Inc..................................... 1,167,425
245,000 Sempra Energy......................................... 4,547,812
------------
14,626,525
------------
Utilities - Telephone - 17.4%
104,000 AT&T Corp............................................. 5,486,000
110,000 BellSouth Corp........................................ 5,176,875
70,000 GTE Corp.............................................. 5,131,875
87,250 * Nextel Communications, Inc., Cl. A.................. 9,281,219
100,000 Sprint Corp........................................... 6,468,750
15,000 U.S. West, Inc........................................ 997,500
50,750 Vodafone AirTouch Plc, ADR............................ 2,842,000
------------
35,384,219
------------
Total Common Stocks (cost $97,610,602)................ 126,392,920
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
CONVERTIBLE PREFERRED - 25.4%
Communication Systems & Services - 8.9%
60,000 Decs Trust V - Crown Castle 7.25%, 8/15/2002....... $ 1,657,500
103,000 Decs Trust VI - Metromedia Fiber 6.25%,
11/15/2002........................................ 6,231,500
70,000 Loral Space & Communications 6.00%, 11/01/2006..... 3,653,160
9,300 Qualcomm Financial Trust I, 5.75%, 3/1/2012........ 6,586,725
------------
18,128,885
------------
Independent Power Producers - 4.2%
42,700 AES Trust I, Ser. A, TECONS 5.375%, 3/31/2007...... 4,729,025
52,020 Calpine Capital Trust 5.75%, 11/01/2004............ 3,745,440
------------
8,474,465
------------
Printing, Publishing, Broadcasting & Entertainment - 2.1%
31,700 Houston Industries, Inc., ACES (exchangeable for
Time Warner, Inc. common stock) 7.00%, 7/1/2000 .. 4,224,025
------------
Utilities - Electric - 5.4%
235,000 BNDES Participacoes S.A. 7.25%, 2/15/2001.......... 4,465,000
70,000 Texas Utilities Co., PRIDES 9.25%, 8/16/2002....... 3,062,500
151,200 Utilicorp United, Inc. 9.75%, 11/16/2002........... 3,505,950
------------
11,033,450
------------
Utilities - Telephone - 4.8%
50,700 MediaOne Group, Inc., PIES 7.00%, 11/15/2002....... 2,611,050
48,000 Qwest Trends Trust 5.75%, 11/17/2003, 144A......... 3,150,000
60,000 Sprint Corp., DECS (exchangeable for Southern N.E.
Telephone common stock)
8.25%, 3/31/2000.................................. 3,960,000
------------
9,721,050
------------
Total Convertible Preferred (cost $37,224,608)..... 51,581,875
------------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CONVERTIBLE DEBENTURES - 6.4%
Telecommunication Services & Equipment - 6.4%
$ 3,800,000 American Tower Corp. 6.25%, 10/15/2009, 144A....... 6,279,500
3,520,000 Level 3 Communications, Inc. 6.00%, 9/15/2009...... 6,723,200
------------
Total Convertible Debentures (cost $8,320,600)..... 13,002,700
------------
</TABLE>
55
<PAGE>
EVERGREEN
Utility Fund
Schedule of Investments(continued)
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
SHORT-TERM INVESTMENTS - 6.0%
Repurchase Agreement - 6.0%
$12,207,000 State Street Bank & Trust Co., 5.63%, purchased
1/31/2000, maturing 2/1/2000, maturity value
$12,208,909 (cost $12,207,000) (a)............... $ 12,207,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments - (cost $155,362,810)..... 100.0% 203,184,495
Other Assets and Liabilities - net.......... 0 (76,151)
----- ------------
Net Assets.................................. 100.0% $203,108,344
===== ============
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government
and/or agency obligations based on market prices plus accrued interest
at January 31, 2000.
144A Securities that may be resold to "qualified institutional buyers" under
Rule 144A of the Securities Act of 1933. These securities have been de-
termined to be liquid under guidelines established by the Board of
Trustees.
* Non-income producing security.
Summary of Abbreviations
ACES Adjustable Convertible Extendable Securities
ADR American Depository Receipt
DECS Dividend Enhanced Convertible Stock
PIES Premium Income Exchangeable Securities
PRIDES Preferred Redeemable Increased Dividend Equity Securities
TECONS Term Convertible Shares
See Combined Notes to Financial Statements.
56
<PAGE>
EVERGREEN
Value Fund
Schedule of Investments
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 91.5%
Aerospace & Defense - 0.9%
137,475 Honeywell International, Inc. ........................ $ 6,598,800
------------
Automotive Equipment & Manufacturing - 3.1%
405,873 Delphi Automotive Systems Corp. ...................... 7,026,676
116,200 Ford Motor Co. ....................................... 5,780,950
131,950 General Motors Corp. ................................. 10,613,728
------------
23,421,354
------------
Banks - 7.5%
112,650 Chase Manhattan Corp. ................................ 9,061,284
448,934 FleetBoston Financial Corp. .......................... 14,113,363
266,100 Golden West Financial Corp. .......................... 7,833,319
604,600 UnionBancal Corp. .................................... 21,501,087
94,350 Wells Fargo Co. ...................................... 3,774,000
------------
56,283,053
------------
Chemical & Agricultural Products - 1.1%
61,627 DuPont (E.I.) De Nemours & Co. ....................... 3,635,993
364,450 Solutia, Inc. ........................................ 5,011,188
------------
8,647,181
------------
Communication Systems & Services - 1.0%
163,950 * MCI WorldCom, Inc. ................................. 7,531,453
------------
Consumer Products & Services - 1.3%
16,800 Procter & Gamble Co. ................................. 1,694,700
133,800 Whirlpool Corp. ...................................... 7,793,850
------------
9,488,550
------------
Diversified Companies - 0.9%
69,700 Minnesota Mining & Manufacturing Co. ................. 6,525,663
------------
Electrical Equipment & Services - 3.1%
149,400 Emerson Electric Co. ................................. 8,226,338
115,800 General Electric Co. ................................. 15,444,825
------------
23,671,163
------------
Electronic Equipment & Services - 1.5%
237,600 Varian Semiconductor Equipment, Inc. ................. 11,493,900
------------
Finance & Insurance - 14.5%
363,750 AMBAC Financial Group, Inc. .......................... 17,801,016
82,325 American International Group, Inc. ................... 8,572,091
221,109 Citigroup, Inc. ...................................... 12,699,948
32,600 Federal Home Loan Mortgage Corp. ..................... 1,636,113
262,250 Federal National Mortgage Assoc. ..................... 15,718,609
191,800 Hartford Life, Inc., Cl. A............................ 7,803,862
206,850 Household International, Inc. ........................ 7,291,462
62,650 J.P. Morgan & Co., Inc. .............................. 7,694,203
228,700 * John Hancock Financial Services, Inc. .............. 3,945,075
73,600 Morgan Stanley, Dean Witter & Co. .................... 4,876,000
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Finance & Insurance - continued
249,900 Nationwide Financial Services, Inc., Cl. A............ $ 6,216,263
163,400 Price (T.) Rowe & Associates, Inc. ................... 6,352,175
247,000 Travelers Property Casualty Corp., Cl. A.............. 8,953,750
------------
109,560,567
------------
Food & Beverage Products - 1.3%
181,000 Conagra, Inc. ........................................ 3,868,875
243,000 Corn Products International, Inc. .................... 5,589,000
------------
9,457,875
------------
Healthcare Products & Services - 9.3%
213,450 American Home Products Corp. ......................... 10,045,491
127,800 Bristol-Myers Squibb Co. ............................. 8,434,800
754,350 * Health Management Associates, Inc., Cl. A........... 10,513,753
88,000 Johnson & Johnson..................................... 7,573,500
122,100 Merck & Co., Inc. .................................... 9,623,006
2,650 Monsanto Co. ......................................... 93,578
250,400 Pharmacia & Upjohn, Inc. ............................. 11,768,800
348,700 * Quest Diagnostics, Inc. ............................ 11,855,800
------------
69,908,728
------------
Information Services & Technology - 8.0%
513,000 * American Power Conversion Corp. .................... 14,155,594
78,650 Electronic Data Systems Corp. ........................ 5,318,706
95,550 Hewlett-Packard Co. .................................. 10,343,287
82,800 Intel Corp. .......................................... 8,192,025
54,300 International Business
Machines Corp. ...................................... 6,091,781
253,100 * Keane, Inc. ........................................ 6,833,700
35,800 * LSI Logic........................................... 2,926,650
32,500 * Micron Technology, Inc. ............................ 2,021,094
96,350 Symantec Corp. ....................................... 4,823,522
------------
60,706,359
------------
Oil/Energy - 9.9%
123,450 Atlantic Richfield Co. ............................... 9,505,650
9,900 Chevron Corp. ........................................ 827,269
151,670 Conoco, Inc., Cl. B................................... 3,573,724
476,672 Exxon Mobil Corp. .................................... 39,802,112
49,300 Royal Dutch Petroleum Co. ............................ 2,714,581
349,550 Sunoco, Inc. ......................................... 8,061,497
193,550 Texaco, Inc. ......................................... 10,233,956
------------
74,718,789
------------
Paper & Packaging - 2.5%
643,250 Abitibi Consolidated, Inc ............................ 7,960,219
39,300 Avery Dennison Corp. ................................. 2,662,575
131,500 Kimberly-Clark Corp. ................................. 8,144,781
------------
18,767,575
------------
</TABLE>
57
<PAGE>
EVERGREEN
Value Fund
Schedule of Investments(continued)
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Printing, Publishing, Broadcasting & Entertainment -
3.8%
130,900 AT&T Corp. - Liberty Media Group, Cl. A.............. $ 6,692,262
163,100 * CBS Corp. ......................................... 9,510,769
33,000 Disney (Walt) Co. ................................... 1,198,313
83,200 * Univision Communications, Inc., Cl. A.............. 8,912,800
37,000 * Viacom, Inc., Cl. B................................ 2,048,875
------------
28,363,019
------------
Retailing & Wholesale - 3.5%
209,600 * Federated Department Stores, Inc. ................. 8,724,600
221,800 Harcourt General, Inc. .............................. 8,872,000
705,100 * Tommy Hilfiger Corp. .............................. 8,505,269
------------
26,101,869
------------
Telecommunication Services & Equipment - 2.6%
116,250 * MediaOne Group, Inc. .............................. 9,241,875
53,000 Motorola, Inc. ...................................... 7,247,750
33,900 Omnipoint Corp. ..................................... 3,476,869
------------
19,966,494
------------
Transportation - 1.9%
134,200 Burlington Northern Santa Fe Corp. .................. 3,229,188
227,900 Union Pacific Corp. ................................. 9,116,000
34,900 United Parcel Service, Inc., Cl. B................... 2,076,550
------------
14,421,738
------------
Utilities - Electric - 4.6%
483,250 DPL, Inc. ........................................... 9,272,359
87,900 Duke Power Co. ...................................... 5,076,225
86,000 FPL Group, Inc. ..................................... 3,628,125
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - continued
Utilities - Electric - continued
62,900 GPU, Inc. ......................................... $ 1,824,100
444,800 Reliant Energy, Inc. .............................. 10,147,000
182,000 Southern Co. ...................................... 4,663,750
------------
34,611,559
------------
Utilities - Gas - 0.9%
194,700 NICOR, Inc. ....................................... 6,668,475
------------
Utilities - Telephone - 8.3%
188,911 AT&T Corp. ........................................ 9,965,055
164,500 Bell Atlantic Corp. ............................... 10,188,719
280,950 BellSouth Corp. ................................... 13,222,209
237,200 GTE Corp. ......................................... 17,389,725
281,105 SBC Communications, Inc. .......................... 12,122,653
------------
62,888,361
------------
Total Common Stocks
(cost $624,050,443)............................... 689,802,525
------------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
SHORT-TERM INVESTMENTS - 9.3%
Repurchase Agreement - 9.3%
$70,274,000 State Street Bank & Trust Co., 5.45%, purchased
1/31/2000, maturing 2/1/2000, maturity
value $70,284,639
(cost $70,274,000) (a)............................ 70,274,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $694,324,443)........................ 100.8% 760,076,525
Other Assets and
Liabilities - net.......................... (0.8) (5,931,512)
----- ------------
Net Assets.................................. 100.0% $754,145,013
===== ============
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices plus accrued interest at January
31, 2000.
* Non-income producing security.
See Combined Notes to Financial Statements.
58
<PAGE>
EVERGREEN
Growth and Income Funds
Statements of Assets and Liabilities
January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Growth Income
Equity and and Small Cap
Blue Chip Income Income Growth Value Utility Value
Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Identified cost of
securities........... $744,207,561 $ 93,262,929 $1,230,426,351 $ 943,995,380 $178,013,543 $155,362,810 $694,324,443
Net unrealized gains
or losses on
securities........... 158,075,121 13,367,966 384,381,370 44,123,386 (4,335,124) 47,821,685 65,752,082
- -----------------------------------------------------------------------------------------------------------------------------
Market value of
securities........... 902,282,682 106,630,895 1,614,807,721 988,118,766 173,678,419 203,184,495 760,076,525
Cash.................. 73 108 97,777 0 558 555 203
Receivable for
securities sold...... 0 1,787,464 14,417,732 24,887,708 5,199,190 0 1,022,310
Receivable for Fund
shares sold.......... 4,955,112 17,720 783,085 113,680 399,457 882,515 222,771
Dividends and interest
receivable........... 438,225 377,945 1,070,793 4,102,313 160,173 476,455 557,106
Prepaid expenses and
other assets......... 213,554 99,587 29,126 41,891 42,515 24,665 42,120
- -----------------------------------------------------------------------------------------------------------------------------
Total assets.......... 907,889,646 108,913,719 1,631,206,234 1,017,264,358 179,480,312 204,568,685 761,921,035
- -----------------------------------------------------------------------------------------------------------------------------
Liabilities
Payable for securities
purchased............ 10,738,385 549,100 7,711,003 15,011,608 0 0 3,887,900
Payable for Fund
shares redeemed...... 1,049,037 386,597 4,545,695 1,760,226 858,594 1,236,850 3,136,517
Payable for securities
on loan.............. 39,697,528 1,176,336 0 0 0 0 0
Advisory fee payable.. 303,514 47,592 1,072,460 703,581 134,911 65,659 258,544
Distribution Plan
expenses payable..... 233,070 57,395 353,053 64,148 58,090 49,498 173,466
Due to other related
parties.............. 67,995 13,085 133,400 80,710 14,990 15,684 61,228
Accrued expenses and
other liabilities.... 114,184 4,797 703,034 271,248 46,056 92,650 258,367
- -----------------------------------------------------------------------------------------------------------------------------
Total liabilities..... 52,203,713 2,234,902 14,518,645 17,891,521 1,112,641 1,460,341 7,776,022
- -----------------------------------------------------------------------------------------------------------------------------
Net assets............. $855,685,933 $106,678,817 $1,616,687,589 $ 999,372,837 $178,367,671 $203,108,344 $754,145,013
- -----------------------------------------------------------------------------------------------------------------------------
Net assets represented
by
Paid-in capital....... $668,990,259 $ 89,415,809 $1,073,093,165 $ 922,043,629 $213,853,720 $138,500,856 $626,337,403
Undistributed
(overdistributed) net
investment income
(loss)............... (1,569,821) 119,977 (4,782,122) (5,895,327) (49,978) (231,696) (15,622)
Accumulated net
realized gains or
losses on securities
and foreign currency
related
transactions......... 30,190,374 3,775,065 163,995,131 39,135,705 (31,100,947) 17,017,499 62,071,150
Net unrealized gains
or losses on
securities and
foreign currency
related
transactions......... 158,075,121 13,367,966 384,381,415 44,088,830 (4,335,124) 47,821,685 65,752,082
- -----------------------------------------------------------------------------------------------------------------------------
Total net assets....... $855,685,933 $106,678,817 $1,616,687,589 $ 999,372,837 $178,367,671 $203,108,344 $754,145,013
- -----------------------------------------------------------------------------------------------------------------------------
Net assets consists of
Class A............... $466,351,088 $ 38,680,469 $ 234,443,436 $ 36,138,486 $ 46,790,059 $135,061,002 $424,656,161
Class B............... 375,654,147 55,955,938 798,754,010 157,782,029 80,533,539 62,995,691 237,398,598
Class C............... 7,035,052 11,937,502 30,270,122 2,325,530 15,308,912 2,828,321 3,853,383
Class Y............... 6,645,646 104,908 553,220,021 803,126,792 35,735,161 2,223,330 88,236,871
- -----------------------------------------------------------------------------------------------------------------------------
Total net assets....... $855,685,933 $106,678,817 $1,616,687,589 $ 999,372,837 $178,367,671 $203,108,344 $754,145,013
- -----------------------------------------------------------------------------------------------------------------------------
Shares outstanding
Class A............... 13,499,693 2,462,451 7,722,593 1,652,578 3,287,094 9,584,043 21,219,920
Class B............... 11,038,135 3,586,914 26,799,080 7,277,199 5,700,568 4,469,596 11,896,672
Class C............... 206,136 764,049 1,015,514 107,265 1,085,155 200,568 193,270
Class Y............... 193,766 6,699 18,138,366 36,708,037 2,507,726 157,732 4,407,928
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value per
share
Class A............... $ 34.55 $ 15.71 $ 30.36 $ 21.87 $ 14.23 $ 14.09 $ 20.01
- -----------------------------------------------------------------------------------------------------------------------------
Class A--Offering
price (based on sales
charge of 4.75%)..... $ 36.27 $ 16.49 $ 31.87 $ 22.96 $ 14.94 $ 14.79 $ 21.01
- -----------------------------------------------------------------------------------------------------------------------------
Class B............... $ 34.03 $ 15.60 $ 29.81 $ 21.68 $ 14.13 $ 14.09 $ 19.96
- -----------------------------------------------------------------------------------------------------------------------------
Class C............... $ 34.13 $ 15.62 $ 29.81 $ 21.68 $ 14.11 $ 14.10 $ 19.94
- -----------------------------------------------------------------------------------------------------------------------------
Class Y............... $ 34.30 $ 15.66 $ 30.50 $ 21.88 $ 14.25 $ 14.10 $ 20.02
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
59
<PAGE>
EVERGREEN
Growth and Income Funds
Statements of Operations
Six Months Ended January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Growth Income
Equity and and Small Cap
Blue Chip Income Income Growth Value Utility Value
Fund Fund Fund Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
Dividends (net of
foreign withholding
taxes of $17,445,
$2,768, $25,277,
$68,854, $0, $3,595
and $30,157,
respectively)......... $ 2,705,808 $ 1,594,636 $ 9,884,911 $ 19,502,656 $ 1,877,182 $ 2,652,971 $ 6,513,380
Interest............... 1,231,130 251,251 377,752 3,987,131 701,337 369,457 1,305,046
- ----------------------------------------------------------------------------------------------------------------------------
Total investment
income................ 3,936,938 1,845,887 10,262,663 23,489,787 2,578,519 3,022,428 7,818,426
- ----------------------------------------------------------------------------------------------------------------------------
Expenses
Advisory fee........... 1,968,897 402,635 7,576,607 4,895,683 1,082,160 426,778 2,096,811
Distribution Plan
expenses.............. 2,124,917 477,039 4,688,783 902,391 657,404 441,977 2,097,129
Administrative services
fees.................. 49,128 17,253 133,400 80,710 14,990 31,976 144,791
Transfer agent fee..... 985,006 138,318 2,058,760 975,039 383,022 132,397 810,798
Trustees' fees and
expenses.............. 7,375 1,552 17,258 10,157 1,940 1,722 8,249
Printing and postage
expenses.............. 52,128 10,640 129,319 90,381 20,319 15,540 77,387
Custodian fee.......... 89,600 19,201 208,952 126,186 31,359 21,566 110,443
Registration and filing
fees.................. 152,913 11,408 44,557 17,722 31,042 20,850 27,160
Professional fees...... 9,343 8,801 16,790 13,573 8,231 6,775 10,474
Other.................. 77,384 4,151 151,705 94,444 9,947 12,050 54,296
- ----------------------------------------------------------------------------------------------------------------------------
Total expenses......... 5,516,691 1,090,998 15,026,131 7,206,286 2,240,414 1,111,631 5,437,538
Less: Expense
reductions............ (24,477) (7,689) (36,672) (32,805) (9,930) (12,751) (43,140)
- ----------------------------------------------------------------------------------------------------------------------------
Net expenses.......... 5,492,214 1,083,309 14,989,459 7,173,481 2,230,484 1,098,880 5,394,398
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income
(loss)................ (1,555,276) 762,578 (4,726,796) 16,316,306 348,035 1,923,548 2,424,028
- ----------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities
and foreign currency
related transactions
Net realized gains or
losses on:
Securities............ 45,820,322 3,754,448 190,341,628 41,884,185 (7,303,425) 25,502,930 71,543,851
Foreign currency
related
transactions......... 0 0 4,088 (1,011,373) 0 0 787
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gains or
losses on securities
and foreign currency
related transactions.. 45,820,322 3,754,448 190,345,716 40,872,812 (7,303,425) 25,502,930 71,544,638
- ----------------------------------------------------------------------------------------------------------------------------
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. 39,117,289 (14,456,133) (110,740,344) (47,689,114) (13,051,028) 7,429,069 (139,637,857)
- ----------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities
and foreign currency
related transactions.. 84,937,611 (10,701,685) 79,605,372 (6,816,302) (20,354,453) 32,931,999 (68,093,219)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ $83,382,335 $ (9,939,107) $ 74,878,576 $ 9,500,004 $(20,006,418) $34,855,547 $ (65,669,191)
</TABLE>
- --------------------------------------------------------------------------------
See Combined Notes to Financial Statements.
60
<PAGE>
EVERGREEN
Growth and Income Fund
Statements of Changes in Net Assets
Six Months Ended January 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Equity Growth and Income and Small Cap
Blue Chip Income Income Growth Value Utility Value
Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Operations
Net investment
income (loss)..... $ (1,555,276) $ 762,578 $ (4,726,796) $ 16,316,306 $ 348,035 $ 1,923,548 $ 2,424,028
Net realized gains
or losses on
securities and
foreign currency
related
transactions...... 45,820,322 3,754,448 190,345,716 40,872,812 (7,303,425) 25,502,930 71,544,638
Net change in
unrealized gains
or losses on
securities and
foreign currency
related
transactions...... 39,117,289 (14,456,133) (110,740,344) (47,689,114) (13,051,028) 7,429,069 (139,637,857)
- -----------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in net
assets resulting
from operations.. 83,382,335 (9,939,107) 74,878,576 9,500,004 (20,006,418) 34,855,547 (65,669,191)
- -----------------------------------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment
income
Class A........... 0 (476,529) 0 (779,493) (139,162) (1,507,008) (1,741,658)
Class B........... 0 (473,320) 0 (3,339,416) (69,660) (552,410) (173,433)
Class C........... 0 (105,147) 0 (47,265) (14,239) (13,163) (2,358)
Class Y........... 0 (4,061) 0 (20,025,412) (163,339) (30,327) (592,501)
Net realized gains
Class A........... (28,109,711) (6,926,900) (4,598,084) (590,501) 0 (9,808,608) (55,282,863)
Class B........... (23,321,638) (10,526,881) (16,932,536) (3,030,140) 0 (5,178,058) (39,983,154)
Class C........... (288,874) (2,390,332) (628,619) (44,582) 0 (119,850) (563,611)
Class Y........... (176,566) (86,941) (11,517,842) (14,561,478) 0 (187,129) (14,849,499)
- -----------------------------------------------------------------------------------------------------------------------------
Total
distributions to
shareholders..... (51,896,789) (20,990,111) (33,677,081) (42,418,287) (386,400) (17,396,553) (113,189,077)
- -----------------------------------------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from
shares sold....... 215,805,765 2,547,186 210,036,060 17,090,336 21,991,511 18,750,477 16,987,653
Payment for shares
redeemed.......... (80,374,128) (30,306,192) (478,726,518) (93,398,283) (73,499,366) (14,273,453) (124,748,533)
Net asset value of
shares issued in
reinvestment of
distributions..... 47,328,659 19,503,011 31,956,088 37,939,545 262,310 14,920,839 108,720,861
- -----------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in net
assets resulting
from capital
share
transactions..... 182,760,296 (8,255,995) (236,734,370) (38,368,402) (51,245,545) 19,397,863 959,981
- -----------------------------------------------------------------------------------------------------------------------------
Total increase
(decrease) in
net assets...... 214,245,842 (39,185,213) (195,532,875) (71,286,685) (71,638,363) 36,856,857 (177,898,287)
Net assets
Beginning of
period............ 641,440,091 145,864,030 1,812,220,464 1,070,659,522 250,006,034 166,251,487 932,043,300
- -----------------------------------------------------------------------------------------------------------------------------
End of period...... $855,685,933 $106,678,817 $1,616,687,589 $ 999,372,837 $178,367,671 $203,108,344 $ 754,145,013
- -----------------------------------------------------------------------------------------------------------------------------
Undistributed
(overdistributed)
net investment
income (loss)..... $ (1,569,821) $ 119,977 $ (4,782,122) $ (5,895,327) $ (49,978) $ (231,696) $ (15,622)
</TABLE>
- --------------------------------------------------------------------------------
See Combined Notes to Financial Statements.
61
<PAGE>
EVERGREEN
Growth and Income Funds
Statements of Changes in Net Assets
Year Ended July 31, 1999
<TABLE>
<CAPTION>
Equity Growth and Income and Small Cap
Blue Chip Income Income Growth Value Utility Value
Fund Fund Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Operations
Net investment
income (loss).... $ (405,617) $ 1,822,429 $ 739,955 $ 39,827,948 $ 4,374,984 $ 5,016,016 $ 6,696,229
Net realized gains
or losses on
securities and
foreign currency
related
transactions..... 37,712,909 23,440,204 9,259,355 35,191,732 (23,967,030) 6,752,256 118,989,239
Net change in
unrealized gains
or losses on
securities and
foreign currency
related
transactions..... 33,829,162 (14,578,770) 65,034,177 23,905,207 19,057,835 23,219,707 (10,264,625)
- ------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in
net assets
resulting from
operations...... 71,136,454 10,683,863 75,033,487 98,924,887 (534,211) 34,987,979 115,420,843
- ------------------------------------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment
income
Class A.......... (302,117) (740,343) (618,275) (590,960) (1,241,862) (3,518,061) (4,093,423)
Class B.......... 0 (652,879) 0 (1,904,614) (1,599,604) (1,359,833) (679,263)
Class C.......... 0 (138,191) 0 (40,664) (319,899) (16,980) (9,129)
Class Y.......... 0 (5,052) (2,594,824) (38,238,097) (1,709,875) (101,181) (1,708,800)
Net realized gains
Class A.......... (22,171,083) (6,542,911) (8,009,500) (1,297,466) (792,880) (10,191,078) (2,706,113)
Class B.......... (10,585,999) (12,308,775) (27,000,584) (4,982,320) (1,601,327) (4,842,643) (1,893,542)
Class C.......... (50,576) (2,556,957) (1,332,807) (108,434) (315,684) (52,067) (26,406)
Class Y.......... 0 (19,678) (20,777,901) (79,113,403) (998,252) (304,419) (926,882)
- ------------------------------------------------------------------------------------------------------------------------------
Total
distributions to
shareholders.... (33,109,775) (22,964,786) (60,333,891) (126,275,958) (8,579,383) (20,386,262) (12,043,558)
- ------------------------------------------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from
shares sold...... 414,184,932 30,188,056 386,163,830 30,217,265 205,428,609 17,451,359 66,555,976
Payment for shares
redeemed......... (243,648,933) (72,875,118) (792,989,619) (182,203,597) (260,520,742) (24,384,302) (239,124,718)
Net asset value of
shares issued in
reinvestment of
distributions.... 29,469,348 21,454,983 57,025,779 114,061,954 7,125,678 17,326,400 10,412,391
Net asset value of
shares issued in
acquisition...... 0 0 0 185,281,144 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in
net assets
resulting from
capital share
transactions.... 200,005,347 (21,232,079) (349,800,010) 147,356,766 (47,966,455) 10,393,457 (162,156,351)
- ------------------------------------------------------------------------------------------------------------------------------
Total increase
(decrease) in
net assets..... 238,032,026 (33,513,002) (335,100,414) 120,005,695 (57,080,049) 24,995,174 (58,779,066)
Net assets
Beginning of
period........... 403,408,065 179,377,032 2,147,320,878 950,653,827 307,086,083 141,256,313 990,822,366
- ------------------------------------------------------------------------------------------------------------------------------
End of period..... $ 641,440,091 $145,864,030 $1,812,220,464 $1,070,659,522 $ 250,006,034 $166,251,487 $ 932,043,300
- ------------------------------------------------------------------------------------------------------------------------------
Undistributed
(overdistributed)
net investment
income........... $ (14,545) $ 416,456 $ (55,326) $ 1,979,953 $ (11,613) $ (52,336) $ 70,300
</TABLE>
- --------------------------------------------------------------------------------
See Combined Notes to Financial Statements.
62
<PAGE>
Combined Notes to Financial Statements (Unaudited)
1. ORGANIZATION
The Evergreen Growth and Income Funds consist of Evergreen Blue Chip Fund
("Blue Chip Fund"), Evergreen Equity Income Fund ("Equity Income Fund"), Ever-
green Growth and Income Fund ("Growth and Income Fund"), Evergreen Income and
Growth Fund ("Income and Growth Fund"), Evergreen Small Cap Value Fund ("Small
Cap Value Fund"), Evergreen Utility Fund ("Utility Fund") and Evergreen Value
Fund ("Value Fund"), (collectively, the "Funds"). Each Fund is a diversified
series of Evergreen Equity Trust (the "Trust"), a Delaware business trust orga-
nized on September 18, 1997. The Trust is an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act").
The Funds offer Class A, Class B, Class C and Class Y shares. Class A shares
are sold with a maximum front-end sales charge of 4.75%. Class B and Class C
shares are sold without a front-end sales charge, but pay a higher ongoing dis-
tribution fee than Class A. Class B shares are sold subject to a contingent de-
ferred sales charge that is payable upon redemption and decreases depending on
how long the shares have been held. Class B shares purchased after January 1,
1997 will automatically convert to Class A shares after seven years. Class B
shares purchased prior to January 1, 1997, follow the conversion rights at the
time the shares were purchased. Class C shares are sold subject to a contingent
deferred sales charge payable on shares redeemed within one year after the
month of purchase. Class Y shares are sold at net asset value and are not sub-
ject to contingent deferred sales charges or distribution fees. Class Y shares
are sold only to investment advisory clients of First Union Corporation ("First
Union") and its affiliates, certain institutional investors or Class Y share-
holders of record of certain other funds managed by First Union and its affili-
ates as of December 30, 1994.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently fol-
lowed by the Funds in the preparation of their financial statements. The poli-
cies are in conformity with generally accepted accounting principles, which re-
quire management to make estimates and assumptions that affect amounts reported
herein. Actual results could differ from these estimates.
A. Valuation of Securities
Securities traded on a national securities exchange or included on the Nasdaq
National Market System ("NMS") and other securities traded in the over-the-
counter market are valued at the last reported sales price on the exchange
where primarily traded. Securities traded on an exchange or NMS for which there
has been no sale and other securities traded in the over-the-counter market are
valued at the mean between the last reported bid and asked price. Corporate
bonds, U.S. government obligations, mortgage and other asset-backed securities
and other fixed-income securities are valued at prices provided by an indepen-
dent pricing service. In determining a price for normal institutional-size
transactions, the pricing service uses methods based on market transactions for
comparable securities and analysis of various relationships between similar se-
curities which are generally recognized by institutional traders. Securities
for which valuations are not available from an independent pricing service may
be valued by brokers which use prices provided by market makers or estimates of
market value obtained from yield data relating to investments or securities
with similar characteristics. Otherwise, securities for which valuations are
not readily available from an independent pricing service (including restricted
securities) are valued at fair value as determined in good faith according to
procedures established by the Board of Trustees. Mutual fund shares held as
Short-term investments are valued at net asset value. Short-term investments
with remaining maturities of 60 days or less are carried at amortized cost,
which approximates market value.
B. Repurchase Agreements
Each Fund may invest in repurchase agreements. Securities pledged as collateral
for repurchase agreements are held in a segregated account by the custodian on
the Fund's behalf. Collateral for certain tri-party repurchase agreements is
held at the counterparty's custodian in a segregated account for the benefit of
the Fund and the counterparty. Each Fund monitors the adequacy of the collat-
eral daily and will require the seller to
63
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
provide additional collateral in the event the market value of the securities
pledged falls below the carrying value of the repurchase agreement, including
accrued interest. Each Fund will only enter into repurchase agreements with
banks and other financial institutions, which are deemed by the investment ad-
visor to be creditworthy pursuant to guidelines established by the Board of
Trustees.
Pursuant to an exemptive order issued by the Securities and Exchange Commis-
sion, the Blue Chip Fund and Equity Income Fund, along with certain other funds
managed by Evergreen Investment Management Company ("EIMC"), an indirect whol-
ly-owned subsidiary of First Union National Bank ("FUNB"), may transfer
uninvested cash balances into a joint trading account. These balances are in-
vested in one or more repurchase agreements that are fully collateralized by
U.S. Treasury and/or federal agency obligations.
C. Foreign Currency
The books and records of the Funds are maintained in United States (U.S.) dol-
lars. Foreign currency amounts are translated into U.S. dollars as follows:
market value of investments, other assets and liabilities at the daily rate of
exchange; purchases and sales of investments and income and expenses at the
rate of exchange prevailing on the respective dates of such transactions. Net
unrealized foreign exchange gains or losses resulting from changes in foreign
currency exchange rates is a component of net unrealized gains or losses on se-
curities and foreign currency related transactions. Net realized foreign cur-
rency gains or losses on foreign currency related transactions include foreign
currency gains and losses between trade date and settlement date on investment
securities transactions, foreign currency related transactions and the differ-
ence between the amounts of interest and dividends recorded on the books of the
Funds and the amount actually received. The portion of foreign currency gains
or losses related to fluctuations in exchange rates between the initial pur-
chase trade date and subsequent sale trade date is included in realized gains
or losses on securities.
D. Forward Foreign Currency Exchange Contracts
The Funds may enter into forward foreign currency exchange contracts ("forward
contracts") to settle portfolio purchases and sales of securities denominated
in a foreign currency and to hedge certain foreign currency assets or liabili-
ties. Forward contracts are recorded at the forward rate and marked-to-market
daily. Realized gains and losses arising from such transactions are included in
net realized gains or losses on foreign currency related transactions. The
Funds bear the risk of an unfavorable change in the foreign currency exchange
rate underlying the forward contract and is subject to the credit risk that the
other party will not fulfill their obligations under the contract. Forward con-
tracts involve elements of market risk in excess of the amount reflected in the
Statements of Assets and Liabilities.
E. Securities Lending
In order to generate income and to offset expenses, the Funds may lend portfo-
lio securities to brokers, dealers and other financial organizations. The
Fund's investment advisor will monitor the creditworthiness of such borrowers.
Loans of securities may not exceed 33 1/3% of a Fund's total assets and will be
collateralized by cash, letters of credit or U.S. Government securities that
are maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities, including accrued interest. The Fund
monitors the adequacy of the collateral daily and will require the borrower to
provide additional collateral in the event the value of the collateral falls
below 100% of the market value of the securities on loan. While such securities
are on loan, the borrower will pay a Fund any income accruing thereon, and the
Fund may invest any cash collateral received in portfolio securities, thereby
increasing its return. A Fund will have the right to call any such loan and ob-
tain the securities loaned at any time on five days' notice. Any gain or loss
in the market price of the loaned securities, which occurs during the term of
the loan, would affect a Fund and its investors. A Fund may pay fees in connec-
tion with such loans.
F. Security Transactions and Investment Income
Securities transactions are accounted for no later than one business day after
the trade date. Realized gains and losses are computed on the identified cost
basis. Interest income is recorded on the accrual basis and includes accretion
of discounts and amortization of premiums. Dividend income is recorded on the
ex-dividend date or in the case of some foreign securities, on the date there-
after when the Fund is made aware of
64
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
the dividend. Foreign income and capital gains realized on some foreign securi-
ties may be subject to foreign withholding taxes, which are accrued as applica-
ble.
G. Federal Taxes
The Funds have qualified and intend to continue to qualify as regulated invest-
ment companies under the Internal Revenue Code of 1986, as amended (the
"Code"). Thus, the Funds will not incur any federal income tax liability since
they are expected to distribute all of their net investment company taxable in-
come and net capital gains, if any, to their shareholders. The Funds also in-
tend to avoid any excise tax liability by making the required distributions un-
der the Code. Accordingly, no provision for federal taxes is required. To the
extent that realized capital gains can be offset by capital loss carryforwards,
it is each Fund's policy not to distribute such gains.
H. Distributions
Distributions from net investment income for the Funds, except for the Utility
Fund, are declared and paid quarterly. Distributions from net investment income
for Utility Fund are declared and paid monthly. Distributions from net realized
capital gains, if any, are paid at least annually. Distributions to sharehold-
ers are recorded at the close of business on the ex-dividend date. Income and
capital gains distributions to shareholders are determined in accordance with
income tax regulations, which may differ from generally accepted accounting
principles.
I. Class Allocations
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses are pro-rated among the classes based on the rela-
tive net assets of each class. Currently, class specific expenses are limited
to expenses incurred under the Distribution Plans for each class.
3. INVESTMENT ADVISORY AGREEMENT AND OTHER AFFILIATED TRANSACTIONS
EIMC is the investment advisor for Blue Chip Fund and Equity Income Fund. In
return for providing investment management services to Blue Chip Fund and Eq-
uity Income Fund, each Fund pays EIMC a management fee that is calculated daily
and paid monthly. The management fee for Blue Chip Fund is computed daily ap-
plying percentage rates starting at 0.61% and declining to 0.26% per annum as
net assets increase, to the average daily net assets of the Fund. The advisory
fee for Equity Income Fund is calculated at an annual rate of 1.50% of Equity
Income Fund's gross investment income plus an amount determined by applying
percentage rates, starting at 0.51% and declining to 0.21% per annum as net as-
sets increase, to the average daily net assets of the Fund.
Prior to January 3, 2000, the management fee for the Blue Chip Fund was com-
puted daily by applying percentage rates starting at 0.70% and declining to
0.35% per annum as net assets increase, to the average daily net assets of the
Fund. Prior to January 3, 2000, the management fee for the Equity Income Fund
was computed daily at an annual rate of 1.50% of the Fund's gross investment
income plus an amount determined by applying percentage rates starting at 0.60%
and declining to 0.30% per annum as net assets increase, to the average daily
net assets of the Fund.
Evergreen Asset Management Corp. ("EAMC"), an indirect wholly-owned subsidiary
of FUNB, is the investment advisor to Growth and Income Fund, Income and Growth
Fund and Small Cap Value Fund and is paid an advisory fee that is calculated
daily and paid monthly based on the Fund's average daily net assets, in accor-
dance with the following schedule:
<TABLE>
<S> <C>
First $750 million......................................... 0.90%
Next $250 million.......................................... 0.80%
Over $1 billion............................................ 0.70%
</TABLE>
Prior to January 3, 2000, the management fee paid to EAMC for these funds was
calculated daily based on the Fund's average daily net assets, in accordance
with the following schedule:
<TABLE>
<S> <C>
First $750 million......................................... 1.00%
Next $250 million.......................................... 0.90%
Over $1 billion............................................ 0.80%
</TABLE>
65
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
Lieber & Company, an affiliate of First Union, is the investment sub-advisor to
Growth and Income Fund, Income and Growth Fund and Small Cap Value Fund and
also provides brokerage services with respect to substantially all security
transactions of the Funds effected on the New York or American Stock Exchanges.
For the six months ended January 31, 2000, Growth and Income Fund, Income and
Growth Fund and Small Cap Value Fund incurred broker commissions of $1,114,171,
$334,402, and $146,531, respectively, with Lieber & Company. Lieber & Company
is reimbursed by EAMC for providing investment sub-advisory services at no ad-
ditional expense to the Funds.
Evergreen Investment Management ("EIM"), formerly Capital Management Group, a
division of FUNB, is the investment advisor to Utility Fund and Value Fund and
is paid an advisory fee that is calculated daily and paid monthly at an annual
rate of 0.42% of each Fund's average daily net assets. Prior to January 3,
2000, the advisory fee was calculated daily at an annual rate of 0.50% of each
Fund's average daily net assets.
Evergreen Investment Services ("EIS"), an indirect, wholly-owned subsidiary of
FUNB, is the administrator and The BISYS Group, Inc. ("BISYS") is the sub-ad-
ministrator to the Funds. As administrator, EIS provides the Funds with facili-
ties, equipment and personnel. As sub-administrator to the Funds, BISYS pro-
vides the officers of the Funds. Officers of the Funds and affiliated Trustees
receive no compensation directly from the Funds.
For its services, the Utility Fund and Value Fund pays the administrator and
sub-administrator a combined fee at the annual rate of 0.10% of each Fund's av-
erage daily net assets. Prior to January 3, 2000, the administrator and sub-ad-
ministrator for the Funds were entitled to an annual fee based on the average
daily net assets of the funds administered by EIS for which First Union or its
investment advisory subsidiaries are also the investment advisors. The adminis-
tration fee was calculated by applying percentage rates, which started at 0.05%
and declined to 0.01% per annum as net assets increased, to the average daily
net assets of each Fund. The sub-administration fee was calculated by applying
percentage rates, which started at 0.01% and declined to 0.004% per annum as
net assets increased, to the average daily net assets of each Fund.
For Blue Chip Fund, Equity Income Fund, Growth and Income Fund, Income and
Growth Fund and Small Cap Value Fund, the Funds pay the administrator a fee at
the annual rate of 0.10% of each Fund's average daily net assets. Prior to Jan-
uary 3, 2000, the administration and sub-administration fee for each Fund was
paid by the investment advisor and was not a Fund expense. However, prior to
January 3, 2000, the Blue Chip Fund and Equity Income Fund reimbursed EIMC for
providing certain administration and accounting expenses. The sub-administra-
tion fee continues to be paid by the investment advisor.
For the six months ended January 31, 2000, Utility Fund and Value Fund paid or
accrued to EIS and BISYS the following amounts for administrative and sub-ad-
ministrative services:
<TABLE>
<CAPTION>
Administration Sub-Administration
Fee Fee
---------------------------------
<S> <C> <C>
Utility Fund.................. $ 28,432 $ 3,544
Value Fund.................... $123,559 $21,232
</TABLE>
Evergreen Service Company ("ESC"), an indirect, wholly-owned subsidiary of
First Union, is the transfer and dividend disbursing agent for the Funds.
4. DISTRIBUTION PLANS
Evergreen Distributor, Inc. ("EDI"), a wholly-owned subsidiary of BISYS, serves
as principal underwriter to the Funds.
Each Fund has adopted Distribution Plans, as allowed by Rule 12b-1 of the 1940
Act, for each class of shares, except Class Y. Distribution Plans permit a Fund
to compensate its principal underwriter for costs related to selling shares of
the Fund and for various other services. These costs, which consist primarily
of commissions and service fees to broker-dealers who sell shares of the Fund,
are paid by the Fund through "Distribution
66
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
Plan expenses". Under the Distribution Plans, Class A incurs distribution fees
equal to 0.25% of the average daily net asset of the class, all of which is
used to pay for shareholder service fees. Class B and Class C incur distribu-
tion fees equal to 1.00% of the average daily net assets of each class. Of this
amount, 0.25% of the distribution fees incurred is used to pay for shareholder
service fees and 0.75% is used to pay for distribution-related costs. Distribu-
tion Plan expenses are calculated daily and paid at least quarterly.
During the six months ended January 31, 2000, amounts paid or accrued to EDI
pursuant to each Fund's Class A, Class B and Class C Distribution Plans were as
follows:
<TABLE>
<CAPTION>
Class A Class B Class C
----------------------------
<S> <C> <C> <C>
Blue Chip Fund.................... $511,669 $1,592,261 $ 20,987
Equity Income Fund................ 56,806 344,507 75,726
Growth and Income Fund............ 295,939 4,229,761 163,083
Income and Growth Fund............ 42,522 847,672 12,197
Small Cap Value Fund.............. 67,227 492,000 98,177
Utility Fund...................... 142,034 293,388 6,555
Value Fund........................ 539,963 1,535,724 21,442
</TABLE>
With respect to Class B and Class C shares, the principal underwriter may pay
distribution fees greater than the allowable annual amounts each Fund is per-
mitted to pay under the Distribution Plans.
Each of the Distribution Plans may be terminated at any time by vote of the In-
dependent Trustees or by vote of a majority of the outstanding voting shares of
the respective class.
5. ACQUISITION
Effective the close of business on July 30, 1999, Income and Growth Fund ac-
quired substantially all of the net assets and assumed certain liabilities of
Evergreen American Retirement Fund, an open-end management investment company
registered under the 1940 Act in an exchange of Class A, Class B, Class C and
Class Y shares of Income and Growth Fund.
The acquisition was accomplished by a tax-free exchange of the respective
shares of the Income and Growth Fund. The value of net assets acquired, number
of shares issued, unrealized appreciation acquired and the aggregate net assets
of the Income and Growth Fund immediately after the acquisition were as fol-
lows:
<TABLE>
<CAPTION>
Value of Net Number of Unrealized Net Assets
Acquiring Fund Acquired Fund Assets Acquired Shares Issued Appreciation After Acquisition
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Income and Growth Fund Evergreen American Retirement Fund $185,281,144 8,258,910 $20,212,515 $1,070,659,522
</TABLE>
67
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
6. CAPITAL SHARE TRANSACTIONS
The Funds have an unlimited number of shares of beneficial interest with $0.001
par value authorized. Shares of beneficial interest of the Funds are currently
divided into Class A, Class B, Class C and Class Y. Transactions in shares of
the Funds were as follows:
Blue Chip Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
January 31, 2000 July 31, 1999
------------------------ -------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares
Shares sold.............. 1,760,588 $ 60,569,869 7,069,269 $ 215,936,462
Automatic conversion of
Class B shares to Class
A shares................ 824,791 29,782,827 0 0
Shares redeemed.......... (1,438,897) (48,981,812) (5,479,684) (162,273,843)
Shares issued in
reinvestment of
distributions........... 721,139 24,742,289 682,121 19,382,250
- ------------------------------------------------------------------------------
Net increase............. 1,867,621 66,113,173 2,271,706 73,044,869
- ------------------------------------------------------------------------------
Class B Shares
Shares sold.............. 4,292,024 144,905,117 6,218,762 192,571,481
Automatic conversion of
Class B shares to Class
A shares................ (836,985) (29,782,827) 0 0
Shares redeemed.......... (912,541) (30,402,682) (2,617,336) (78,544,225)
Shares issued in
reinvestment of
distributions........... 654,155 22,136,614 355,147 10,036,524
- ------------------------------------------------------------------------------
Net increase............. 3,196,653 106,856,222 3,956,573 124,063,780
- ------------------------------------------------------------------------------
Class C Shares
Shares sold.............. 124,860 4,293,375 157,200 4,882,919
Shares redeemed.......... (17,781) (607,978) (93,639) (2,830,715)
Shares issued in
reinvestment of
distributions........... 8,052 273,190 1,785 50,574
- ------------------------------------------------------------------------------
Net increase............. 115,131 3,958,587 65,346 2,102,778
- ------------------------------------------------------------------------------
Class Y Shares
Shares sold.............. 175,556 6,037,404 24,198 794,070
Shares redeemed.......... (11,170) (381,656) (5) (150)
Shares issued in
reinvestment of
distributions........... 5,187 176,566 0 0
- ------------------------------------------------------------------------------
Net increase............. 169,573 5,832,314 24,193 793,920
- ------------------------------------------------------------------------------
Net increase............. $182,760,296 $ 200,005,347
- ------------------------------------------------------------------------------
</TABLE>
Equity Income Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
January 31, 2000 July 31, 1999
---------------------- ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares
Shares sold................. 35,137 $ 635,761 377,792 $ 7,479,412
Automatic conversion of
Class B shares to Class A
shares..................... 46,560 750,880 66,574 1,275,463
Shares redeemed............. (522,642) (9,033,687) (751,644) (14,848,362)
Shares issued in
reinvestment of
distributions.............. 414,431 6,902,690 363,322 6,893,908
- ------------------------------------------------------------------------------
Net increase (decrease)..... (26,514) (744,356) 56,044 800,421
- ------------------------------------------------------------------------------
Class B Shares
Shares sold................. 90,745 1,640,675 906,121 18,055,614
Automatic conversion of
Class B shares to Class A
shares..................... (46,870) (750,880) (66,948) (1,275,463)
Shares redeemed............. (965,490) (16,831,733) (2,490,795) (48,904,031)
Shares issued in
reinvestment of
distributions.............. 617,714 10,199,356 637,607 12,007,710
- ------------------------------------------------------------------------------
Net decrease................ (303,901) (5,742,582) (1,014,015) (20,116,170)
- ------------------------------------------------------------------------------
Class C Shares
Shares sold................. 13,286 246,466 191,619 3,838,714
Shares redeemed............. (233,040) (3,904,828) (447,839) (8,832,781)
Shares issued in
reinvestment of
distributions.............. 139,722 2,310,975 134,147 2,529,177
- ------------------------------------------------------------------------------
Net decrease................ (80,032) (1,347,387) (122,073) (2,464,890)
- ------------------------------------------------------------------------------
Class Y Shares
Shares sold................. 1,246 24,284 40,395 814,316
Shares redeemed............. (32,310) (535,944) (14,451) (289,944)
Shares issued in
reinvestment of
distributions.............. 5,411 89,990 1,271 24,188
- ------------------------------------------------------------------------------
Net increase (decrease)..... (25,653) (421,670) 27,215 548,560
- ------------------------------------------------------------------------------
Net decrease................ $ (8,255,995) $(21,232,079)
- ------------------------------------------------------------------------------
</TABLE>
68
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
Growth and Income Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
January 31, 2000 July 31, 1999
------------------------- -------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares
Shares sold............. 5,479,766 $ 160,751,759 6,356,759 $ 181,231,854
Automatic conversion of
Class B shares to Class
A shares............... 433,825 13,890,270 71,639 2,052,789
Shares redeemed......... (6,804,026) (200,688,935) (8,431,174) (239,858,978)
Shares issued in
reinvestment of
distributions.......... 146,810 4,392,505 300,493 8,412,371
- -------------------------------------------------------------------------------
Net decrease............ (743,625) (21,654,401) (1,702,283) (48,161,964)
- -------------------------------------------------------------------------------
Class B Shares
Shares sold............. 492,860 14,377,772 4,273,030 116,938,483
Automatic conversion of
Class B shares to Class
A shares............... (441,724) (13,890,270) (72,390) (2,052,789)
Shares redeemed......... (4,384,642) (127,925,028) (9,163,377) (254,977,395)
Shares issued in
reinvestment of
distributions.......... 544,438 16,017,371 945,090 26,226,276
- -------------------------------------------------------------------------------
Net decrease............ (3,789,068) (111,420,155) (4,017,647) (113,865,425)
- -------------------------------------------------------------------------------
Class C Shares
Shares sold............. 120,231 3,542,868 414,303 11,348,877
Shares redeemed......... (374,897) (10,912,000) (942,556) (26,271,690)
Shares issued in
reinvestment of
distributions.......... 16,568 487,415 45,443 1,261,465
- -------------------------------------------------------------------------------
Net decrease............ (238,098) (6,881,717) (482,810) (13,661,348)
- -------------------------------------------------------------------------------
Class Y Shares
Shares sold............. 1,057,340 31,363,661 2,753,486 76,644,616
Shares redeemed......... (4,677,071) (139,200,555) (9,565,395) (271,881,556)
Shares issued in
reinvestment of
distributions.......... 368,014 11,058,797 753,230 21,125,667
- -------------------------------------------------------------------------------
Net decrease............ (3,251,717) (96,778,097) (6,058,679) (174,111,273)
- -------------------------------------------------------------------------------
Net decrease............ $(236,734,370) $(349,800,010)
- -------------------------------------------------------------------------------
Income and Growth Fund
<CAPTION>
Six Months Ended Year Ended
January 31, 2000 July 31, 1999
------------------------- -------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares
Shares sold............. 330,147 $ 7,175,991 546,531 $ 12,209,031
Automatic conversion of
Class B shares to Class
A shares............... 197,359 4,406,859 0 0
Shares redeemed......... (516,448) (11,305,899) (692,292) (15,388,197)
Shares issued in
reinvestment of
distributions.......... 59,358 1,280,617 84,216 1,766,406
Shares issued in
acquisition of
Evergreen American
Retirement Fund........ 0 0 996,586 22,495,315
- -------------------------------------------------------------------------------
Net increase............ 70,416 1,557,568 935,041 21,082,555
- -------------------------------------------------------------------------------
Class B Shares
Shares sold............. 131,591 2,842,094 267,996 5,756,610
Automatic conversion of
Class B shares to Class
A shares............... (199,004) (4,406,859) 0 0
Shares redeemed......... (1,209,468) (26,147,504) (684,457) (14,490,566)
Shares issued in
reinvestment of
distributions.......... 280,893 6,010,270 307,396 6,393,524
Shares issued in
acquisition of
Evergreen American
Retirement Fund........ 0 0 6,014,738 134,624,702
- -------------------------------------------------------------------------------
Net increase
(decrease)............. (995,988) (21,701,999) 5,905,673 132,284,270
- -------------------------------------------------------------------------------
Class C Shares
Shares sold............. 13,626 292,284 8,976 194,095
Shares redeemed......... (21,939) (470,793) (24,103) (510,097)
Shares issued in
reinvestment of
distributions.......... 3,783 80,960 6,072 126,280
Shares issued in
acquisition of
Evergreen American
Retirement Fund........ 0 0 66,207 1,481,914
- -------------------------------------------------------------------------------
Net increase
(decrease)............. (4,530) (97,549) 57,152 1,292,192
- -------------------------------------------------------------------------------
Class Y Shares
Shares sold............. 308,498 6,779,967 568,224 12,057,529
Shares redeemed......... (2,534,262) (55,474,087) (7,163,498) (151,814,737)
Shares issued in
reinvestment of
distributions.......... 1,417,127 30,567,698 5,039,388 105,775,744
Shares issued in
acquisition of
Evergreen American
Retirement Fund........ 0 0 1,181,379 26,679,213
- -------------------------------------------------------------------------------
Net decrease............ (808,637) (18,126,422) (374,507) (7,302,251)
- -------------------------------------------------------------------------------
Net increase
(decrease)............. $ (38,368,402) $ 147,356,766
- -------------------------------------------------------------------------------
</TABLE>
69
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
Small Cap Value Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
January 31, 2000 July 31, 1999
------------------------ -------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares
Shares sold.............. 895,793 $ 13,241,326 10,088,863 $ 146,506,778
Automatic conversion of
Class B shares to Class
A shares................ 91,547 1,344,291 122,150 1,811,086
Shares redeemed.......... (1,528,359) (22,464,796) (9,965,619) (143,998,401)
Shares issued in
reinvestment of
distributions........... 8,995 134,298 136,847 1,949,647
- -------------------------------------------------------------------------------
Net increase (decrease).. (532,024) (7,744,881) 382,241 6,269,110
- -------------------------------------------------------------------------------
Class B Shares
Shares sold.............. 333,862 4,855,803 2,288,743 33,166,258
Automatic conversion of
Class B shares to Class
A shares................ (92,207) (1,344,291) (122,803) (1,811,086)
Shares redeemed.......... (1,703,717) (24,752,293) (3,528,826) (50,084,066)
Shares issued in
reinvestment of
distributions........... 4,388 65,209 213,282 3,057,499
- -------------------------------------------------------------------------------
Net decrease............. (1,457,674) (21,175,572) (1,149,604) (15,671,395)
- -------------------------------------------------------------------------------
Class C Shares
Shares sold.............. 101,914 1,473,968 709,408 10,225,143
Shares redeemed.......... (494,627) (7,139,999) (947,075) (13,384,026)
Shares issued in
reinvestment of
distributions........... 718 10,680 41,741 597,766
- -------------------------------------------------------------------------------
Net decrease............. (391,995) (5,655,351) (195,926) (2,561,117)
- -------------------------------------------------------------------------------
Class Y Shares
Shares sold.............. 163,477 2,420,414 1,069,945 15,530,430
Shares redeemed.......... (1,312,831) (19,142,278) (3,645,558) (53,054,249)
Shares issued in
reinvestment of
distributions........... 3,491 52,123 105,065 1,520,766
- -------------------------------------------------------------------------------
Net decrease............. (1,145,863) (16,669,741) (2,470,548) (36,003,053)
- -------------------------------------------------------------------------------
Net decrease............. $(51,245,545) $ (47,966,455)
- -------------------------------------------------------------------------------
</TABLE>
Utility Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
January 31, 2000 July 31, 1999
---------------------- ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares
Shares sold................. 513,533 $ 7,021,131 429,844 $ 5,133,429
Automatic Conversion of
Class B Shares to Class A
Shares..................... 562,337 7,870,081 11,373 126,409
Shares redeemed............. (658,724) (8,745,435) (1,117,587) (13,062,066)
Shares issued in
reinvestment of
distributions.............. 731,878 9,366,057 1,006,678 11,457,282
- ------------------------------------------------------------------------------
Net increase................ 1,149,024 15,511,834 330,308 3,655,054
- ------------------------------------------------------------------------------
Class B Shares
Shares sold................. 690,155 9,191,137 704,486 8,209,032
Automatic Conversion of
Class B Shares to Class A
Shares..................... (562,470) (7,870,081) (11,366) (126,409)
Shares redeemed............. (336,183) (4,395,576) (650,786) (7,545,094)
Shares issued in
reinvestment of
distributions.............. 412,146 5,267,354 502,546 5,718,575
- ------------------------------------------------------------------------------
Net increase................ 203,648 2,192,834 544,880 6,256,104
- ------------------------------------------------------------------------------
Class C Shares
Shares sold................. 173,293 2,352,284 162,138 1,808,980
Shares redeemed............. (48,265) (651,835) (140,732) (1,555,150)
Shares issued in
reinvestment of
distributions.............. 7,216 92,368 5,627 64,145
- ------------------------------------------------------------------------------
Net increase................ 132,244 1,792,817 27,033 317,975
- ------------------------------------------------------------------------------
Class Y Shares
Shares sold................. 14,304 185,925 182,271 2,173,509
Shares redeemed............. (37,002) (480,607) (168,716) (2,095,583)
Shares issued in
reinvestment of
distributions.............. 15,269 195,060 7,586 86,398
- ------------------------------------------------------------------------------
Net increase (decrease)..... (7,429) (99,622) 21,141 164,324
- ------------------------------------------------------------------------------
Net increase................ $19,397,863 $ 10,393,457
- ------------------------------------------------------------------------------
</TABLE>
70
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
Value Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
January 31, 2000 July 31, 1999
------------------------ -------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares
Shares sold.............. 325,444 $ 7,376,306 1,304,364 $ 30,874,288
Automatic conversion of
Class B shares to Class
A shares................ 2,053,408 42,509,846 0 0
Shares redeemed.......... (2,368,513) (52,503,649) (4,351,247) (100,747,544)
Shares issued in
reinvestment of
distributions........... 2,548,338 54,267,906 285,275 6,540,493
- -------------------------------------------------------------------------------
Net increase (decrease).. 2,558,677 51,650,409 (2,761,608) (63,332,763)
- -------------------------------------------------------------------------------
Class B Shares
Shares sold.............. 310,668 7,161,991 1,041,242 24,036,781
Automatic conversion of
Class B shares to Class
A shares................ (2,058,648) (42,509,846) 0 0
Shares redeemed.......... (1,563,523) (34,610,920) (2,488,104) (57,458,861)
Shares issued in
reinvestment of
distributions........... 1,836,041 38,937,956 111,928 2,520,116
- -------------------------------------------------------------------------------
Net decrease............. (1,475,462) (31,020,819) (1,334,934) (30,901,964)
- -------------------------------------------------------------------------------
Class C Shares
Shares sold.............. 14,245 315,656 70,058 1,628,040
Shares redeemed.......... (33,686) (742,636) (115,631) (2,643,004)
Shares issued in
reinvestment of
distributions........... 25,717 544,882 1,529 34,419
- -------------------------------------------------------------------------------
Net increase (decrease).. 6,276 117,902 (44,044) (980,545)
- -------------------------------------------------------------------------------
Class Y Shares
Shares sold.............. 95,850 2,133,700 444,392 10,016,867
Shares redeemed.......... (1,688,436) (36,891,328) (3,438,601) (78,275,309)
Shares issued in
reinvestment of
distributions........... 702,889 14,970,117 57,625 1,317,363
- -------------------------------------------------------------------------------
Net decrease............. (889,697) (19,787,511) (2,936,584) (66,941,079)
- -------------------------------------------------------------------------------
Net increase (decrease).. $ 959,981 $(162,156,351)
- -------------------------------------------------------------------------------
</TABLE>
7. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (excluding
short-term securities) were as follows for the six months ended January 31,
2000:
<TABLE>
<CAPTION>
Cost of Purchases Proceeds from Sales
-------------------------------------
<S> <C> <C>
Blue Chip Fund............ $563,669,965 $462,846,122
Equity Income Fund
Non-U.S. Government...... 36,064,548 71,004,155
U.S. Government.......... 6,389,063 0
Growth and Income Fund.... 556,338,934 813,767,946
Income and Growth Fund.... 426,207,224 422,703,990
Small Cap Value Fund...... 81,374,386 137,534,879
Utility Fund.............. 42,191,660 48,911,556
Value Fund................ 366,947,014 517,462,440
</TABLE>
During the six months ended January 31, 2000 Blue Chip Fund and Equity Income
Fund loaned securities to certain brokers who paid the Funds a negotiated lend-
ers' fee. These fees are included in interest income. At January 31, 2000, the
value of the securities on loan from Blue Chip Fund and Equity Income Fund were
$38,830,390 and $1,116,485, respectively, and the value of collateral was
$39,697,528 and $1,176,336, respectively. During the six months ended January
31, 2000, the Blue Chip Fund and Equity Income Fund earned $4,991 and $108,348,
respectively, in income from securities lending.
71
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
As of July 31, 1999, Income and Growth Fund and Small Cap Value Fund had capi-
tal loss carryovers for federal income tax purposes of $102,000 expiring July
31, 2005 and $1,083,259 expiring July 31, 2007, respectively.
8. EXPENSE REDUCTIONS
The Funds have entered into expense offset arrangements with ESC and their cus-
todian whereby credits realized as a result of uninvested cash balances were
used to reduce a portion of each Fund's related expenses. The assets deposited
with ESC and the custodian under these expense offset arrangements could have
been invested in income-producing assets. The Funds have also entered into
brokerage/service arrangements with specific brokers who paid a portion of the
Fund's expenses. The amount of expense reductions received by each Fund and the
impact of the total expense reductions on each Fund's expense ratio represented
as a percentage of its average daily net assets were as follows:
<TABLE>
<CAPTION>
Expense Total
Offset Brokerage Expense % of Average
Arrangements Transactions Reductions Daily Net Assets
-----------------------------------------------------
<S> <C> <C> <C> <C>
Blue Chip Fund.. $22,308 $2,169 $24,477 0.00%
Equity Income
Fund........... 6,049 1,640 7,689 0.01%
Growth and
Income Fund.... 36,672 0 36,672 0.00%
Income and
Growth Fund.... 32,805 0 32,805 0.00%
Small Cap Value
Fund........... 9,207 723 9,930 0.01%
Utility Fund.... 12,751 0 12,751 0.01%
Value Fund...... 43,140 0 43,140 0.01%
</TABLE>
9. DEFERRED TRUSTEES' FEES
Each Independent Trustee of each Fund may defer any or all compensation related
to performance of their duties as Trustees. The Trustees' deferred balances are
allocated to deferral accounts, which are included in the accrued expenses for
the Funds. The investment performance of the deferral accounts are based on the
investment performance of certain Evergreen Funds. Any gains earned or losses
incurred in the deferral accounts are reported in the Fund's Trustees' fees and
expenses. At the election of the Trustees, the deferral account will be paid in
one lump sum or in quarterly installments for up to ten years.
10. FINANCING AGREEMENTS
On July 27, 1999, certain Evergreen Funds and a group of banks (the "Lenders")
entered into a credit agreement. Under this agreement, the Lenders provide an
unsecured revolving credit commitment in the aggregate amount of $1.050 bil-
lion. The credit facility is allocated, under the terms of the financing agree-
ment, among the Lenders. The credit facility is accessed by the Funds for tem-
porary or emergency purposes to fund the redemption of their shares or as gen-
eral working capital as permitted by each Fund's borrowing restrictions.
Borrowings under this facility bear interest at 0.75% per annum above the Fed-
eral Funds rate (1.50% per annum above the Federal Funds rate during the period
from and including December 1, 1999 through and including January 31, 2000). A
commitment fee of 0.10% per annum is incurred on the average daily unused por-
tion of the revolving credit commitment. The commitment fee is allocated to all
Funds. For its assistance in arranging this financing agreement, First Union
Capital Markets Corp. was paid a one-time arrangement fee of $250,000. State
Street serves as paying agent for the funds, and as paying agent is entitled to
a fee of $20,000 per annum which is allocated to all of the Funds.
During the six months ended January 31, 2000, the Funds had no significant
borrowings under the agreements.
11. CONCENTRATION OF CREDIT RISK
Utility Fund invests a substantial portion of its assets in issuers in the
utilities industry. Therefore, it may be more affected by economic and politi-
cal developments in that industry than would be a comparable general equity
fund.
72
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
SUBSEQUENT EVENT
Effective February 1, 2000, the maximum deferred sales charge for Class C
shares is changed to 2.00%. Class C shareholders purchased on or after February
1, 2000 are subject to a 2.00% contingent deferred sales charge if such shares
are redeemed within one year after the month of purchase and a 1.00% contingent
deferred sales charge if such shares are redeemed within two years after the
month of purchase. Class C shares purchased prior to February 1, 2000 follow
the contingent deferred sales charge schedule at the time the shares were ini-
tially purchased.
DISTRIBUTIONS TO SHAREHOLDERS
The Utility Fund declared the following distribution from net investment in-
come:
<TABLE>
<CAPTION>
Record Date Payable Date Class A Class B Class C Class Y
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3/8/2000 3/10/2000 $0.028 $0.020 $0.020 $0.031
</TABLE>
These distributions are not reflected in the accompanying financial statements.
ADDITIONAL INFORMATION
Effective the close of business on March 10, 2000, Utility Fund acquired the
net assets and liabilities of Evergreen America's Utility Fund, an open-end
management investment company registered under the 1940 Act in exchange of
shares. The net assets were exchanged through a tax-free exchange for Class A
shares of Utility Fund. The acquired net assets consisted primarily of portfo-
lio securities with unrealized appreciation of $33,482,175. Aggregate net as-
sets of Utility Fund and Evergreen America's Utility Fund immediately before
the acquisition were $222,937,755 and $165,782,310, respectively. The aggregate
net assets of Utility Fund after the acquisition were $388,720,065.
73
<PAGE>
Evergreen Funds
Money Market
Treasury Money Market Fund
Money Market Fund
Municipal Money Market Fund
Florida Municipal Money Market Fund
New Jersey Municipal Money Market Fund
Pennsylvania Municipal Money Market Fund
Tax Advantaged
Short Intermediate Municipal Fund
High Grade Municipal Bond Fund
Municipal Bond Fund
Connecticut Municipal Bond Fund
Florida Municipal Bond Fund
Florida High Income Municipal Bond Fund
Georgia Municipal Bond Fund
Maryland Municipal Bond Fund
New Jersey Municipal Bond Fund
North Carolina Municipal Bond Fund
Pennsylvania Municipal Bond Fund
South Carolina Municipal Bond Fund
Virginia Municipal Bond Fund
Tax-Free High Income Fund
Income
Capital Preservation and Income Fund
Short Intermediate Bond Fund
Intermediate Term Bond Fund
U.S. Government Fund
Quality Income Fund
Diversified Bond Fund
Strategic Income Fund
High Income Fund
High Yield Bond Fund
Balanced
Tax Strategic Foundation Fund
Foundation Fund
Capital Balanced Fund
Balanced Fund
Growth & Income
Utility Fund
Income and Growth Fund
Equity Income Fund
Value Fund
Blue Chip Fund
Growth and Income Fund
Small Cap Value Fund
Select Equity Index Fund
Domestic Growth
Tax Strategic Equity Fund
Capital Growth Fund
Stock Selector Fund
Evergreen Fund
Strategic Growth Fund
Masters Fund
Omega Fund
Small Company Growth Fund
Growth Fund
Aggressive Growth Fund
Select Special Equity Fund
Global International
Global Leaders Fund
Perpetual Global Fund
International Growth Fund
Perpetual International Fund
Global Opportunities Fund
Precious Metals Fund
Emerging Markets Growth Fund
Latin America Fund
Express Line
800.346.3858
Investor Services
800.343.2898
www.evergreen-funds.com
69761 540390 3/2000
---------------
PRSRT STD
[LOGO OF EVERGREEN FUNDS] U.S. POSTAGE
PAID
200 Berkeley Street HUDSON, MA
Boston, MA 02116 PERMIT NO. 19
---------------
