<PAGE>
Annual Report
as of September 30, 2000
Evergreen
Domestic Growth Funds
[LOGO OF EVERGREEN FUNDS(SM)]
[SEAL]
<PAGE>
Table of Contents
Letter to Shareholders .......................................... 1
Evergreen Aggressive Growth Fund
Fund at a Glance ............................................. 2
Portfolio Manager Interview .................................. 3
Evergreen Capital Growth Fund
Fund at a Glance ............................................. 6
Portfolio Manager Interview .................................. 7
Evergreen Fund
Fund at a Glance ............................................. 10
Portfolio Manager Interview .................................. 11
Evergreen Growth Fund
Fund at a Glance ............................................. 13
Portfolio Manager Interview .................................. 14
Large Company Growth Fund
(Formerly Evergreen Strategic Growth Fund)
Fund at a Glance ............................................. 16
Portfolio Manager Interview .................................. 17
Evergreen Masters Fund
Fund at a Glance ............................................. 20
Portfolio Manager Interview .................................. 21
Evergreen Omega Fund
Fund at a Glance ............................................. 29
Portfolio Manager Interview .................................. 30
Evergreen Small Company Growth Fund
Fund at a Glance ............................................. 33
Portfolio Manager Interview .................................. 34
Evergreen Stock Selector Fund
Fund at a Glance ............................................. 37
Portfolio Manager Interview .................................. 38
Evergreen Tax Strategic Equity Fund
Fund at a Glance ............................................. 40
Portfolio Manager Interview .................................. 41
Financial Highlights
Evergreen Aggressive Growth Fund ............................. 43
Evergreen Capital Growth Fund ................................ 45
Evergreen Fund ............................................... 47
Evergreen Growth Fund ........................................ 49
Evergreen Large Company Growth Fund .......................... 51
Evergreen Masters Fund ....................................... 53
Evergreen Omega Fund ......................................... 55
Evergreen Small Company Growth Fund .......................... 57
Evergreen Stock Selector Fund ................................ 59
Evergreen Tax Strategic Equity Fund .......................... 62
Schedule of Investments
Evergreen Aggressive Growth Fund ............................. 64
Evergreen Capital Growth Fund ................................ 68
Evergreen Fund ............................................... 71
Evergreen Growth Fund ........................................ 76
Evergreen Large Company Growth Fund .......................... 82
Evergreen Masters Fund ....................................... 86
Evergreen Omega Fund ......................................... 103
Evergreen Small Company Growth Fund .......................... 107
Evergreen Stock Selector Fund ................................ 113
Evergreen Tax Strategic Equity Fund .......................... 119
Combined Notes to Schedules of Investments ...................... 125
Statements of Assets and Liabilities ............................ 126
Statements of Operations ........................................ 128
Statements of Changes in Net Assets ............................. 130
Combined Notes to Financial Statements .......................... 134
Independent Auditors' Report .................................... 149
Additional Information .......................................... 150
Evergreen Funds
Evergreen Funds is one of the nation's fastest growing investment companies
with more than $80 billion in assets under management.
We offer over 80 mutual funds to choose among and acclaimed service and
operations capabilities, giving investors 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 annual report must be preceded or accompanied by a prospectus of an
Evergreen fund contained herein. The prospectus contains more complete
information, including fees, charges and other ongoing 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
----------------------
November 2000
[PHOTO]
William M. Ennis
President and CEO
Dear Evergreen Shareholders,
We are pleased to provide the Evergreen Domestic Growth Funds annual report,
which covers the twelve-month period ended September 30, 2000.
A Challenging Environment for Investors
During 2000, U.S. equity markets challenged investors with a series of turbulent
ups and downs and a constant rotation from one particular sector for a brief
period of time to another. The market favored the new economy then the old
economy, big caps then mid-caps, value then growth, dot coms then technology
equipment, creating significant uncertainties for investors.
Concerns about wage-driven inflation, higher interest rates and increasing oil
prices also affected market valuations and volatility. Although these factors
have the potential to meaningfully slow the economy, many leading indicators
continue to demonstrate strength. We believe that the U.S. economy will slow
moderately, aided by the Federal Reserve's focus on interest rates, and will
ultimately create a soft landing, which should create the launch pad for a
continued expansion.
New Products and Services
Evergreen Funds is constantly striving to develop products and services to meet
the sophisticated demands of our investors. This year we launched two new Sector
Funds: Evergreen Health Care Fund and Evergreen Technology Fund. We are very
excited about the launch of these funds. Please consult with your financial
advisor to see if these funds would be appropriate in your portfolio or visit
evergreen-funds.com for more information.
The Value of Diversification
An environment like this year's offers many reasons for building a diversified
portfolio rather than trying to predict the market's movements. Diversification
provides exposure to many different opportunities while reducing the risk of any
single investment or strategy. We encourage you to talk to your financial
advisor to confirm that your investment portfolio is appropriately diversified
and structured to support your long-term investment objectives.
Thank you for your continued investment in Evergreen Funds.
Sincerely,
/s/ William M. Ennis
William M. Ennis
President and CEO
Evergreen Investment Company, Inc.
1
<PAGE>
EVERGREEN
Aggressive Growth Fund
Fund at a Glance as of September 30, 2000
"In the near term, we believe stock valuations are becoming more attractive than
they have been recently, although successful investors must be more selective
than they needed to be in late 1999 and early 2000."
Portfolio
Management
-----------------------
Maureen Cullinane
Tenure: April 1999
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CURRENT INVESTMENT STYLE/1/
--------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 9/30/2000.
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 investment return and
principal value of an investment will fluctuate so that investors' shares, when
redeemed, may be worth more or less than their original cost. The performance of
each class may vary based on differences in load, fees and expenses paid by the
shareholders investing in each class. Performance includes the reinvestment of
income dividends and capital gain distributions.
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.
Class Y shares are only offered to persons who owned Class Y shares of an
Evergreen Fund on or before 12/31/1994; certain institutional investors; and
investment advisory clients of an investment advisor of an Evergreen Fund (or
the investment advisor's affiliates).
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/2/
--------------------------------------------------------------------------------
Portfolio Inception Date: 4/15/1983 Class A Class B Class C Class Y
Class Inception Date 4/15/1983 7/7/1995 8/3/1995 7/11/1995
Average Annual Returns*
1 year with sales charge 56.93% 58.56% 61.64% n/a
1 year w/o sales charge 64.76% 63.56% 63.64% 65.30%
5 years 23.15% 23.32% 23.51% 24.74%
10 years 24.44% 24.60% 24.58% 25.25%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
12-month capital gain
distributions per share $3.27 $3.27 $3.27 $3.27
*Adjusted for maximum applicable sales charge unless noted.
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LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION> Aggressive Growth
Class A Consumer Price Index - US Russell 1000 Growth S & P 400 Midcap Total Return
------------------- ------------------------- ------------------- -----------------------------
<S> <C> <C> <C> <C>
9/30/90 9,525 10,000 10,000 10,000
9/30/91 15,992 10,339 13,866 15,030
9/30/92 18,417 10,648 15,374 16,902
9/30/93 24,403 10,934 16,293 20,964
9/30/94 23,362 11,258 17,244 21,300
9/30/95 29,946 11,545 22,795 26,790
9/30/96 37,616 11,891 27,672 30,540
9/30/97 41,972 12,148 37,716 42,483
9/30/98 39,475 12,329 41,903 39,804
9/30/99 54,058 12,653 56,507 49,953
9/30/00 89,072 13,095 69,735 71,540
</TABLE>
Comparison of a $10,000 investment in Evergreen Aggressive Growth Fund, Class A
shares/2/, versus a similar investment in the Russell 1000 Growth Index (Russell
1000 Growth), the Standard & Poor's Midcap 400 Index (S&P 400) and the Consumer
Price Index (CPI).
The Russell 1000 Growth and the S&P 400 are unmanaged market indices which do
not include transaction costs associated with buying and selling securities or
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.
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
The health care and technology sectors in which the Fund invests are in a period
of unusually strong performance. These sectors' performance may not be expected
to continue.
U.S. government guarantees apply only to the underlying securities of the Fund's
portfolio and not to the Fund's shares.
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.
All data is as of September 30, 2000 and is subject to change.
2
<PAGE>
EVERGREEN
Aggressive Growth Fund
Portfolio Manager Interview
How did the Fund perform?
For the twelve-month period ended September 30, 2000, Evergreen Aggressive
Growth Fund's Class A shares returned 64.76% before deduction of any applicable
sales charges. During the same twelve-month period, the Russell 1000 Growth
Index and the S&P 400 returned 23.43% and 43.22%, respectively. The median
return of multi-cap growth funds was 49.28%, according to Lipper Inc., an
independent monitor of mutual fund performance.
Portfolio
Characteristics
---------------
(as of 9/30/2000)
Total Net Assets $483,494,688
Number of Holdings 79
Beta 1.14
P/E Ratio 37.6x
What was the investment environment like during the twelve-month period?
The environment changed dramatically from the first half of the year to the
second half. During the first six months, we had an excellent environment for
the growth style of investing, with an expanding economy and very little
evidence of inflation. Technology stocks, including internet infrastructure,
semi-conductor manufacturers and software companies, did extraordinarily well.
Behind the scenes, however, the Federal Reserve Board was growing increasingly
uneasy about the rapid pace of economic growth and the possibility that
inflationary pressures could rise. As a result, the Federal Reserve Board raised
short-term rates several times in an effort to slow the rate of economic growth.
Concerns about whether the Federal Reserve Board would be successful created
uncertainty in the market, contributing to considerable volatility during the
second half of the year. By the end of the period, however, it had become
increasingly evident that the higher interest rates were effective and that
economic growth was beginning to slow. At the same time, energy prices increased
much faster than anyone expected, acting almost as a tax on the consumer.
Meanwhile, the dramatic decline of the European currency, the euro, on
international currency exchanges and the coming federal elections created more
uncertainty in the market. With all these worries, investors questioned the
valuations of stocks, and the markets showed increased volatility. Many of the
stocks that suffered the most were in the technology industries that had
performed so well early in the twelve-month period.
What were your principal investment strategies?
We have maintained a long-term strategy of investing in companies with
consistent records of earnings growth over extended periods of time. We also
tried to take advantage of two long-term trends in the economy: productivity
improvements in American industry and the aging of the American population.
Early in the fiscal year, we emphasized technology companies in pursuing the
productivity theme. We had about 60% of net assets invested in
technology-related companies. In the second half of the year, we reduced our
emphasis on technology. Many technology stocks had reached very high valuations,
and investors began realizing that as economic growth started to slow, many
technology stocks were vulnerable to changes in the business cycle. We reduced
our commitment to commodity-type technology companies such as hardware and
semiconductor companies. However, we
3
<PAGE>
EVERGREEN
Aggressive Growth Fund
Portfolio Manager Interview
continued to favor software service companies and companies involved in fiber
optics networks for telecommunications.
As the fiscal year progressed, we added to our positions in health care stocks,
which are tied to the "graying of America" theme. Despite political
controversies over Medicare funding and the costs of drugs, health care stocks
improved in performance in 2000. We have invested in major pharmaceutical
companies, specialty and generic manufacturers, and healthcare products
distributors.
We also increased our emphasis on energy companies during the second half of the
fiscal year. Helped by rising oil and natural gas prices, energy stocks also
acted as a hedge against the more volatile technology sector. With a backdrop of
low inventories and political uncertainties in the Middle East, we believe oil
and natural gas prices will remain high, which should be favorable for industry
earnings and exploration and production activities.
Top 5 Sectors
-------------
(as a percentage of 9/30/2000 net assets)
Information Technology 45.6%
Health Care 21.7%
Energy 10.9%
Consumer Discretionary 6.8%
Industrials 6.1%
What were some of the companies that contributed to the Fund's performance?
In technology, Veritas Software, a data management company, and Check Point
Software, a provider of network security software, each had excellent
performance. Other strong performers included Broadcom, a manufacturer of data
communication chips, and Finisar, a manufacturer of components for fiber optic
systems.
In health care, Alza, a specialty drug manufacturer, and Alpharma, a generic
pharmaceutical company, were two strong performers. We think generic drug
companies may have particularly good prospects if the federal government were to
adopt a prescription drug benefit program. Bindley Western, a drug distributor,
also helped the Fund's returns.
In energy, Devon Energy, an exploration and production company, performed well
for the Fund.
Top 10 Holdings
---------------
(as a percentage of 9/30/2000 net assets)
NVIDIA Corp. 3.0%
Minimed, Inc. 2.8%
EMC Corp. 2.8%
Mylan Laboratories, Inc. 2.7%
Alza Corp. 2.6%
Tyco Intl., Ltd. 2.5%
Biovail Corp. 2.4%
Cisco Sys., Inc. 2.2%
Veritas Software Corp. 2.2%
Pharmacia Corp. 2.1%
What is your investment outlook?
In the near term, we believe stock valuations are becoming more attractive than
they have been recently, although successful investors must be more selective
than they needed to be in late 1999 and early 2000. As the economy shows more
signs of slowing, we believe consumers may begin to feel less secure, so we have
reduced our investments in consumer-related stocks, including those of retail
and media companies.
4
<PAGE>
EVERGREEN
Aggressive Growth Fund
Portfolio Manager Interview
We anticipate that technology and health care will continue to be important
themes in the economy. Despite our reduction in technology holdings, we remain
confident in the long-term potential in the sector and we expect there may be
attractive opportunities for investment in the final quarter of 2000. We believe
corporations will continue to invest in technology tools that can help them
improve their productivity and become more competitive. We also believe there
will be opportunities in the companies that provide products and services for
the baby boomer generation as it grows older.
The performance of equities has been outstanding for more than a decade. Due to
a period of annual returns greater than 20%, we believe it may be time to adjust
our expectations closer to the long-term market averages of 7%-to-10% returns a
year.
5
<PAGE>
EVERGREEN
Capital Growth Fund
Fund at a Glance as of September 30, 2000
"We stuck to our long-term philosophy and investment process -- focusing on
companies with solid, established businesses, consistently successful operating
histories, strong financial conditions and credible corporate managements."
Portfolio
Management
-------------------------
John Davenport
Tenure: December 1992
Richard Skeppstrom, II
Tenure: December 1992
Steve Certo
Tenure: June 1997
E. Craig Dauer
Tenure: June 1999
John Jordan III
Tenure: June 1999
--------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
--------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 9/30/2000.
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 investment return and
principal value of an investment will fluctuate so that investors' shares, when
redeemed, may be worth more or less than their original cost. The performance
of each class may vary based on differences in load, fees and expenses paid by
the shareholders investing in each class. Performance includes the reinvestment
of income dividends and capital gain distributions.
Historical performance shown for Classes B and Y prior to their inception is
based on the performance of Class A, the original class offered along with Class
C. These historical returns for Classes B 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 B would have been lower, while returns for
Class Y would have been higher. Returns reflect expense limits previously in
effect, without which returns would have been lower.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/2/
--------------------------------------------------------------------------------
Portfolio Inception Date: 4/29/1992 Class A Class B Class C Class Y
Class Inception Date 4/29/1992 10/25/1999 4/29/1992 11/19/1997
Average Annual Returns*
1 year with sales charge 8.77% 8.51% 11.37% n/a
1 year w/o sales charge 14.21% 13.74% 13.37% 14.48%
5 years 19.45% 20.28% 19.68% 20.79%
Since Portfolio Inception 14.57% 15.15% 14.40% 15.33%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
12-month capital gain
distributions per share $0.51 $0.51 $0.51 $0.51
*Adjusted for maximum applicable sales charge unless noted.
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION> Capital Growth
Class A Consumer Price Index - US Russell 1000 Value S & P 500 Composite Total Return
---------------- ------------------------- ------------------ --------------------------------
<S> <C> <C> <C> <C>
4/29/92 9,525 10,000 10,000 10,000
9/30/92 9,599 10,129 10,195 10,212
9/30/93 10,388 10,401 12,780 11,539
9/30/94 10,247 10,710 12,693 11,965
9/30/95 12,314 10,982 16,207 15,523
9/30/96 15,347 11,312 19,116 18,680
9/30/97 20,683 11,556 27,203 26,235
9/30/98 22,900 11,728 28,184 28,608
9/30/99 27,529 12,036 33,462 36,565
9/30/00 31,434 12,456 36,452 41,422
</TABLE>
Comparison of a $10,000 investment in Evergreen Capital Growth Fund, Class A
shares/2/, versus a similar investment in the Russell 1000 Value Index (Russell
1000 Value), the Standard & Poor's 500 Index (S&P 500) and the Consumer Price
Index (CPI).
The Russell 1000 Value and the S&P 500 are unmanaged market indices which do not
include transaction costs associated with buying and selling securities or 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.
Class Y shares are only offered to persons who owned Class Y shares of an
Evergreen Fund on or before 12/31/1994; certain institutional investors; and
investment advisory clients of an investment advisor of an Evergreen Fund (or
the investment advisor's affiliates).
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
All data is as of September 30, 2000 and is subject to change.
6
<PAGE>
EVERGREEN
Capital Growth Fund
Portfolio Manager Interview
How did the Fund perform?
For the twelve-month period ended September 30, 2000, the Fund's Class A Shares
returned 14.21%. Returns for the Fund are before the deduction of any applicable
sales charges. The Fund's performance outpaced that of its benchmarks, the S&P
500 and the Russell 1000 Value Indices, which returned 13.28% and 8.91%,
respectively, for the same period. We attribute the Fund's relative performance
to the Fund's investment philosophy and security selection process. The Fund
invests only in companies that demonstrate consistently sound financial
fundamentals and reasonable stock valuations. The Fund's philosophy paralleled
that of the investment environment during the second half of the period.
Portfolio
Characteristics
---------------
(as of 9/30/2000)
Total Net Assets $464,317,039
Number of Holdings 36
Beta 0.91
P/E Ratio 24.7x
What was the investment environment like during the fiscal period?
The Fund's fiscal year consisted of two distinct periods. In the first half of
the fiscal year, the environment was driven by a continuation of trends that had
existed for the past 18 months. Investor emotion and speculation sent stock
prices soaring and valuations to unprecedented levels. The situation became
extreme and potentially volatile. Market leadership was narrow, with only a
limited number of New Economy technology favorites leading indices higher.
Regard for enduring tools-of-the-trade, such as cash flow, the sustainability of
a business and stock valuations were replaced by investor euphoria; and the
market became polarized between the high-flying internet and technology stocks,
and their "less interesting" counterparts--strong companies with sustainable
businesses and reasonable valuations. Investors often ignored these companies
and as this occurred, the valuation of many high quality stocks became
increasingly attractive on a relative basis.
In the spring of 2000, the market experienced a sea of change in psychology.
While it is impossible to identify all the factors that contributed to this
shift, in our opinion, much of the change can be attributed to the Federal
Reserve Board's interest rate hikes. The rate increases successfully slowed the
economy's potentially excessive growth and cooled inflationary pressures.
However, slower economic growth also increased the possibility of lower
corporate earnings giving investors a dose of reality that jarred the market's
euphoric tone and broke the speculative bubble. Stocks that had risen
dramatically encountered sudden volatility in the spring of 2000. The change in
environment prompted a return to fundamentals. Investors adopted a more rational
view of equity valuations and reinstated the importance of factors historically
associated with prudent stock analysis. Cash flowed out of many former
high-flyers during the rest of the period and was re-directed into high quality
companies that previously had been overlooked.
Top 5 Sectors
-------------
(as a percentage of 9/30/2000 net assets)
Industrials 26.1%
Financials 18.0%
Consumer Staples 11.7%
Information Technology 9.9%
Health Care 8.6%
7
<PAGE>
EVERGREEN
Capital Growth Fund
Portfolio Manager Interview
What strategies did you use in managing the Fund?
We stuck to our long-term philosophy and investment process--focusing on
companies with solid, established businesses, consistently successful operating
histories, strong financial conditions and credible corporate managements. While
that philosophy was out of favor with investors in the first part of the fiscal
period, it coincided with general market sentiment over the last six months.
Some of the companies that contributed to the Fund's returns over the past year
were as follows: Federal National Mortgage Association (FNMA)--regarded as
"uninteresting" by many investors during the market's speculative phase, FNMA's
stock traded at $48 in the first quarter of 2000 before reaching $78 later in
the Fund's fiscal period. Tyco International--Tyco is comprised of three main
businesses, all of which are currently healthy: electronic components
manufacturing, health care products and security systems. Tyco's stock traded at
$40 in the first half of the fiscal year and recently reached $55. Sysco
Corp--in the stable, but fragmented food service industry, consistently has
gained market share. The company has shown remarkably steady results over the
past 20 years. In the first quarter of 2000, Sysco's stock was trading at $28;
in the third quarter of 2000, the stock traded at $48.
Top 10 Holdings
---------------
(as a percentage of 9/30/2000 net assets)
Verizon Communications 5.0%
SYSCO Corp. 4.7%
Tyco Intl., Ltd. 4.7%
Philip Morris Cos., Inc. 4.0%
Computer Sciences Corp. 3.9%
Automatic Data Processing, Inc. 3.8%
Tenet Healthcare Corp. 3.6%
American Express Co. 3.3%
Illinois Tool Works, Inc. 3.2%
First Data Corp. 3.2%
What do you think will happen in the stock market over the next six months?
We think the stock market could remain in a period of adjustment over the next
few quarters, with earnings reports falling short of investor expectations. The
remarkable returns of the past few years are deeply ingrained in the
expectations of many investors. We think the market may have a hard time moving
ahead, escaping the volatility and pressure associated with bringing down
earnings expectations. We believe this anticipated environment should underscore
the importance of investing in financially solid and reasonably valued
companies.
The realignment of investor's expectations with the level of earnings actually
reported could be particularly difficult because the reporting period will be
compared to last year's especially robust economy. At that time, corporations
were stockpiling supplies and improving various systems in preparation of Y2K.
The economy's unprecedented 10-year expansion has enabled stock investors to
enjoy phenomenal earnings growth--earnings growth for companies comprising the
S&P 500 have averaged over 20% in the last six quarters alone. However, we
expect both U.S. and global economies to continue to slow, putting pressure on
corporate earnings. We do not expect the Federal Reserve Board to ease monetary
policy until it sees considerably more weakness in the economy because of the
low 3.9% unemployment rate and certain measures of inflation rising. This
atmosphere could reduce corporate earnings in two ways: Slower growth could
reduce demand for products and services and higher wage and compensation costs,
as well as higher energy costs should increase expenses. Further, the strength
of the U.S. dollar has dampened the profits of companies doing business in
Europe. In our opinion, technology companies are not immune to these factors
8
<PAGE>
EVERGREEN
Capital Growth Fund
Portfolio Manager Interview
which could make some technology stocks still trading at valuations dramatically
higher than the rest of the market, particularly vulnerable.
Within this environment, we remain optimistic about the opportunity available in
financially sound, reasonably priced stocks. The last 20-years has provided the
greatest period of above average stock returns on record. Unfortunately, periods
of spectacular growth do come to an end--but we believe other windows of
opportunity continue to exist. Many stocks were overlooked while relatively few
stocks reached record-breaking levels. We believe long-term investors can still
earn attractive returns by applying time-tested fundamentals to stock analysis.
We think the new environment should be healthier for investors over the long-run
and look forward to uncovering new opportunities as the stock market makes its
transition from euphoria to reality.
9
<PAGE>
EVERGREEN
Evergreen Fund
Fund at a Glance as of September 30, 2000
"Our investments ranged from large, integrated energy companies, to exploration
and production companies to oil services companies."
Portfolio
Management
-------------------------
Jean C. Ledford
Tenure: August 1999
Richard S. Welsh
Tenure: August 1999
--------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
--------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 9/30/2000.
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 investment return and
principal value of an investment will fluctuate so that investors' shares, when
redeemed, may be worth more or less than their original cost. The performance
of each class may vary based on differences in load, fees and expenses paid by
the shareholders investing in each class. Performance includes the reinvestment
of income dividends and capital gain distributions.
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. Returns reflect expense limits
previously in effect, without which returns would have been lower.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/2/
--------------------------------------------------------------------------------
Portfolio Inception Date: 10/15/1971 Class A Class B Class C Class Y
Class Inception Date 1/3/1995 1/3/1995 1/3/1995 10/15/1971
Average Annual Returns*
1 year with sales charge 5.79% 6.82% 8.87% n/a
1 year w/o sales charge 11.07% 10.22% 10.23% 11.32%
5 years 12.71% 12.79% 13.03% 14.16%
10 years 15.64% 15.75% 15.75% 16.41%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
12-month capital gain
distributions per share $10.03 $10.03 $10.03 $10.03
* Adjusted for maximum applicable sales charge unless noted.
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
Evergreen Fund Class A Consumer Price Index - US S & P 500 Composite Total Return Russell 2000
---------------------- ------------------------- -------------------------------- ------------
<S> <C> <C> <C> <C>
9/30/90 9,525 10,000 10,000 10,000
9/30/91 13,693 10,339 13,117 14,509
9/30/92 14,401 10,648 14,566 15,831
9/30/93 16,682 10,934 16,460 21,080
9/30/94 17,711 11,258 17,067 21,644
9/30/95 22,399 11,545 22,143 26,680
9/30/96 26,444 11,891 26,645 30,184
9/30/97 35,361 12,148 37,423 40,201
9/30/98 33,384 12,329 40,807 32,556
9/30/99 38,506 12,653 52,157 38,765
9/30/00 42,775 13,095 59,086 47,768
</TABLE>
Comparison of a $10,000 investment in Evergreen Fund, Class A shares/2/, versus
a similar investment in the Standard & Poor's 500 Index (S&P 500), the Russell
2000 Index (Russell 2000) and the Consumer Price Index (CPI).
The S&P 500 and the Russell 2000 are unmanaged market indices which do not
include transaction costs associated with buying and selling securities or 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.
Class Y shares are only offered to persons who owned Class Y shares of an
Evergreen Fund on or before 12/31/1994; certain institutional investors; and
investment advisory clients of an investment advisor of an Evergreen Fund (or
the investment advisor's affiliates).
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
All data is as of September 30, 2000 and is subject to change.
10
<PAGE>
EVERGREEN
Evergreen Fund
Portfolio Manager Interview
How did the Fund perform?
The Fund's Class A shares returned 11.07% for the twelve-month period ended
September 30, 2000. Fund performance is before deduction of any applicable sales
charges. During the same period, the Standard & Poor's 500 Index returned 13.28%
and the Russell 2000 Index returned 23.39%. The average return of large cap core
funds was 17.80%, according to Lipper Inc., an independent monitor of mutual
fund performance.
Portfolio
Characteristics
---------------
(as of 9/30/2000)
Total Net Assets $1,612,593,910
Number of Holdings 113
Beta 0.96
P/E Ratio 36.5x
What was the investment environment like during the period?
Our emphasis on energy stocks and our de-emphasis of consumer cyclical stocks
both helped the Fund's returns. We had about twice the weighting in energy-
related companies as the S&P 500 Index, and this was a good decision as these
stocks surged with the prices of oil and natural gas. Our investments ranged
from large, integrated energy companies, to exploration and production companies
to oil services companies. Some of the better performers included Exxon Mobil,
Apache and Anadarko.
In contrast to energy, consumer cyclical stocks were one of the worst performing
areas of the market during the period. Within our cyclical stock selections, we
also avoided most retail stocks, which performed poorly.
Our decisions on technology stocks also supported the Fund's performance. We
over-weighted technology in the fourth quarter of 1999 and first quarter of
2000, when the sector staged a strong rally. We then went to an under-weighting
in technology for the final six months of the fiscal year, and this also worked
well as many tech stocks fell in value. Major contributors within the technology
portion of the Fund included Sun Microsystems, the leading provider of database
and communications servers for the internet, and Nortel, a major
telecommunications company. Performance was also helped by the fact that we did
not own many of the poorer performers in technology, including Lucent, Yahoo and
Xerox. We also were under-weighted in Microsoft, which had disappointing
performance during the period.
On the negative side, performance was held back by our weighting in basic
materials, which was the worst performing sector in the S&P 500. Two of our
larger positions, DuPont and Dow, did poorly, despite a record of accelerating
earnings. Cyclical stocks in general were hurt as investors anticipated an
economic slowdown arising from the Federal Reserve Board's decisions to raise
short-term interest rates several times.
The Fund was under-weighted in the second-worst performing sector,
communications, but performance nevertheless was hurt by the poor performance of
holdings such as Sprint, Nextel and Qwest.
Our over-weighted position in consumer staples also held back performance.
Investments in companies such as Procter and Gamble, Clear Channel
Communications, Albertson's and McDonald's all detracted from the Fund's
returns.
Financial services stocks turned around during the second half of the fiscal
year, but the Fund did not participate fully because of its under-weighted
position. However, our holding in international insurer American International
Group helped.
11
<PAGE>
EVERGREEN
Evergreen Fund
Portfolio Manager Interview
Top 5 Sectors
-------------
(as a percentage of 9/30/2000 net assets)
Information Technology 22.6%
Financials 16.2%
Health Care 16.2%
Industrials 11.2%
Energy 8.6%
Top 10 Holdings
---------------
(as a percentage of 9/30/2000 net assets)
General Electric 6.5%
American International Group, Inc. 3.3%
Cisco Systems, Inc. 2.9%
Exxon Mobil Corp. 2.8%
Sun Microsystems, Inc. 2.6%
Citigroup, Inc. 2.6%
Intel Corp. 2.5%
EMC Corp. 2.4%
Pfizer, Inc. 2.1%
Time Warner, Inc. 2.0%
What is your outlook for the future?
We see both uncertainties and opportunities.
A series of unanswered questions hover over the economy, including the effect of
the elections, high energy prices, the tensions in the Middle East and the
continued poor performance of the euro, which affects many U.S. companies with
international operations.
While we have reduced our technology position, we still like some traditional
growth industry leaders including Cisco Systems, EMC and Sun Microsystems, as
well as some newer companies such as Juniper and Veritas Software. We also see
opportunities in health care, where many companies had earnings acceleration
during the third quarter of 2000.
Despite these questions, the economy continues to grow at a healthy pace, even
if not as fast as it did six months ago, and we believe there will continue to
be good opportunities in the stock market.
12
<PAGE>
EVERGREEN
Growth Fund
Fund at a Glance as of September 30, 2000
"We think small-cap stocks continue to offer exceptional opportunity, however,
we think it will become increasingly difficult to capture the returns we have
witnessed over the past few years."
Portfolio
Management
-----------------------------
Theodore W. Price, CFA
Tenure: April 1985
Jeffrey Drummond, CFA
Tenure: May 1993
Linda Ziglar, CFA
Tenure: September 1991
--------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
--------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 9/30/2000.
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 investment return and
principal value of an investment will fluctuate so that investors' shares, when
redeemed, may be worth more or less than their original cost. The performance
of each class may vary based on differences in load, fees and expenses paid by
the shareholders investing in each class. Performance includes the reinvestment
of income dividends and capital gain distributions.
Historical performance shown for Classes A, B and Y prior to their inception is
based on the performance of Class C, the original class offered. These
historical returns for Classes A 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 A and Y would have been higher.
Class Y shares are only offered to persons who owned Class Y shares of an
Evergreen Fund on or before 12/31/1994; certain institutional investors; and
investment advisory clients of an investment advisor of an Evergreen Fund (or
the investment advisor's affiliates).
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/2/
--------------------------------------------------------------------------------
Portfolio Inception Date: 4/15/1985 Class A Class B Class C Class Y
Class Inception Date 6/5/1995 10/18/1999 4/15/1985 11/19/1997
Average Annual Returns*
1 year with sales charge 57.15% 58.99% 61.79% n/a
1 year w/o sales charge 65.01% 63.99% 63.79% 65.47%
5 years 17.78% 17.83% 18.01% 18.48%
10 years 20.40% 20.50% 20.49% 20.65%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
12-month capital gain
distributions per share $0.87 $0.87 $0.87 $0.87
* Adjusted for maximum applicable sales charge unless noted.
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
Growth Fund
Class C Consumer Price Index - US Russell 2000
------------- ------------------------- ------------
9/30/90 10,000 10,000 10,000
9/30/91 15,608 10,339 14,509
9/30/92 17,084 10,648 15,831
9/30/93 21,623 10,934 21,080
9/30/94 21,947 11,258 21,644
9/30/95 28,182 11,545 26,680
9/30/96 36,125 11,891 30,184
9/30/97 45,031 12,148 40,201
9/30/98 34,844 12,329 32,556
9/30/99 39,378 12,653 38,765
9/30/00 64,484 13,095 47,768
Comparison of a $10,000 investment in Evergreen Growth Fund, Class C shares/2/,
versus a similar investment in the Russell 2000 Index (Russell 2000) and the
Consumer Price Index (CPI).
The Russell 2000 is an unmanaged market index which does not include transaction
costs associated with buying and selling securities or 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.
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
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.
All data is as of September 30, 2000 and is subject to change.
13
<PAGE>
EVERGREEN
Growth Fund
Portfolio Manager Interview
How did the Fund perform?
The Fund's Class C Shares returned 63.79% for the twelve-month period ended
September 30, 2000, more than doubling the return of its benchmark, the Russell
2000 Index, which returned 23.39% during the same period. Fund returns are
before the deduction of applicable sales charges. We attribute the Fund's strong
performance to careful stock selection. The Fund invests in small capitalization
companies, employing a rigorous, highly disciplined "bottom-up" method of
security selection.
Portfolio
Characteristics
---------------
(as of 9/30/2000)
Total Net Assets $696,986,615
Number of Holdings 136
Beta 1.05
What was the Fund's investment environment like?
The environment was extremely challenging. Prices were volatile, often sharp,
making sudden changes based on rumors and innuendoes. Trends that had prevailed
in 1999 and the beginning of 2000--particularly the meteoric rise of dotcom
companies--reversed course through much of the rest of the Fund's fiscal
period. The dotcoms fell out of favor with investors after having traded at
prices as high as 100 times sales. Many of those companies had little or no
earnings. In contrast, a lot of cash flowed into Energy and Health Care. Energy,
of course, benefited from rising oil prices; and Health Care, as a sector,
rebounded after dramatically underperforming in 1999 and early 2000.
What strategies did you use in managing the Fund?
We selected stocks based on both quantitative and qualitative factors. The
Fund's team of five investment professionals is assigned different sectors and
each person is responsible for the performance of his or her sector. Among other
factors, we look for companies that consistently have above average earnings,
ample cash flow and only limited debt. We also actively manage the Fund--we will
continue to hold a stock only as long as it meets our criteria. If there is a
negative earnings surprise, or if a company changes businesses, indicating to us
that the original business may be experiencing some problems, we will sell the
Fund's position in that stock. Also, we will pare back a position if it becomes
more than two percent of net assets.
What sectors had the greatest impact on the Fund's performance?
The sectors contributing the most to performance were Technology, Energy and
Health Care. While Broadcasting, in general, detracted from returns, we were out
of the sector by the beginning of 2000. We adjusted the Fund's total position in
technology stocks throughout the period. Technology stocks comprised between 30%
and 50% of net assets at any given time. In addition to those holdings being
extremely strong performers, we stayed away from internet stocks because of
their general lack of earnings, thus the Fund avoided the price volatility
experienced by that sector.
14
<PAGE>
EVERGREEN
Growth Fund
Portfolio Manager Interview
Top 5 Sectors
-------------
(as a percentage of 9/30/2000 net assets)
Information Technology 28.7%
Industrials 18.5%
Health Care 17.0%
Energy 7.5%
Consumer Discretionary 6.6%
Top 10 Holdings
---------------
(as a percentage of 9/30/2000 net assets)
Polycom, Inc. 1.9%
Benchmark Electronics, Inc. 1.7%
Shaw Group, Inc. 1.6%
Sipex Corp. 1.6%
Oak Technology, Inc. 1.6%
Core Laboratories 1.4%
Elantec Semiconductor, Inc. 1.4%
C&D Technologies 1.4%
Pride Intl., Inc. 1.3%
Advanced Fibre Communications, Inc. 1.2%
What is your outlook for small-cap stocks?
We think small-cap stocks continue to offer exceptional opportunity, however,
we think it will become increasingly difficult to capture the returns we have
witnessed over the past few years. We anticipate slower economic growth, which
will cause us to focus even harder on earnings. We are particularly cautious
about technology stocks, although we think there is still opportunity in that
sector. We also are optimistic about health care and biotechnology and with
higher oil prices, we think the energy sector will continue to do well.
A significant development for investors was the passage of Regulation F.D. (Full
Disclosure), which became effective at the end of October 2000. The Regulation
seeks to make information available to everybody, rather than a limited number
of investors. Basically, the Regulation states that if a company does not make
information available to everyone, it can make information available to no one.
While investors eventually will adjust to the new flow of information, we would
not be surprised to see a bit more volatility in the market over the near-term,
as the challenge of following corporate developments increases.
15
<PAGE>
EVERGREEN
Large Company Growth Fund
(Formerly Strategic Growth Fund)
Fund at a Glance as of September 30, 2000
"As the economy shows more signs of slowing, we believe consumers may begin to
feel less secure, so we have reduced our investments in consumer-related stocks,
including those of retail and media companies."
Portfolio
Management
-----------------------
Maureen E. Cullinane, CFA
Tenure: April 1995
--------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
--------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 9/30/2000.
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 investment return and
principal value of an investment will fluctuate so that investors' shares, when
redeemed, may be worth more or less than their original cost. The performance
of each class may vary based on differences in load, fees and expenses paid by
the shareholders investing in each class. Performance includes the reinvestment
of income dividends and capital gain distributions.
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. The 12b-1 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 for Classes A and Y would have been
lower.
Class Y shares are only offered to persons who owned Class Y shares of an
Evergreen Fund on or before 12/31/1994; certain institutional investors; and
investment advisory clients of an investment advisor of an Evergreen Fund (or
the investment advisor's affiliates).
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
--------------------------------------------------------------------------------
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 6/30/1999
Average Annual Returns*
1 year with sales charge 26.84% 26.99% 30.08% n/a
1 year w/o sales charge 33.16% 31.99% 32.08% 33.34%
5 years 21.69% 21.98% 21.98% 23.18%
10 years 19.73% 19.69% 19.36% 20.61%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
12-month capital gain
distributions per share $1.80 $1.80 $1.80 $1.80
* Adjusted for maximum applicable sales charge unless noted.
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
Large Company Growth Class B Consumer Price Index - US Russell 1000 Growth S & P 500 Composite Total Return
---------------------------- ------------------------- ------------------- --------------------------------
<S> <C> <C> <C> <C>
9/30/90 10,000 10,000 10,000 10,000
9/30/91 13,644 10,339 13,866 13,117
9/30/92 14,424 10,648 15,374 14,566
9/30/93 18,592 10,934 16,293 16,460
9/30/94 18,665 11,258 17,244 17,067
9/30/95 22,179 11,545 22,795 22,143
9/30/96 24,256 11,891 27,672 26,645
9/30/97 34,041 12,148 37,716 37,423
9/30/98 35,387 12,329 41,903 40,807
9/30/99 45,707 12,653 56,507 52,157
9/30/00 60,325 13,095 69,735 59,086
</TABLE>
Comparison of a $10,000 investment in Evergreen Large Company Growth Fund, Class
B shares/2/, versus a similar investment in the Russell 1000 Growth Index
(Russell 1000 Growth), the Standard & Poor's 500 Index (S&P 500) and the
Consumer Price Index (CPI).
The Russell 1000 Growth and the S&P 500 are unmanaged market indices which do
not include transaction costs associated with buying and selling securities or
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.
All data is as of September 30, 2000 and is subject to change.
16
<PAGE>
EVERGREEN
Large Company Growth Fund
(Formerly Strategic Growth Fund)
Portfolio Manager Interview
How did the Fund perform?
For the twelve-month period ended September 30, 2000, Evergreen Large Company
Growth Fund (formerly Strategic Growth Fund) Class B shares returned 31.99%.
Returns are before deduction of any applicable sales charges. During the same
twelve- month period, the Russell 1000 Growth Index returned 23.43% and the
Standard & Poor's 500 Index returned 13.28%. The median return of large company
growth funds was 27.07%, according to Lipper Inc., an independent monitor of
mutual fund performance.
Portfolio
Characteristics
---------------
(as of 9/30/2000)
Total Net Assets $1,185,822,233
Number of Holdings 62
Beta 1.04
P/E Ratio 37.9x
What was the investment environment like during the twelve-month period?
The environment changed dramatically from the first half of the year to the
second half. During the first six months, we had an excellent environment for
the growth style of investing, with an expanding economy and very little
evidence of inflation. Technology stocks, including internet infrastructure,
semi-conductor manufacturers and software companies, did extraordinarily well.
Behind the scenes, however, the Federal Reserve Board was growing increasingly
uneasy about the rapid pace of economic growth and the possibility that
inflationary pressures could rise. As a result, the Federal Reserve Board raised
short-term rates several times in an effort to slow the rate of economic growth.
Concerns about whether the Federal Reserve Board would be successful created
uncertainty in the market, contributing to considerable volatility during the
second half of the year. By the end of the period, however, it had become
increasingly evident that the higher interest rates were effective and that
economic growth was beginning to slow. At the same time, energy prices increased
much faster than anyone expected, acting almost as a tax on the consumer.
Meanwhile, the dramatic decline of the European currency, the euro, on
international currency exchanges and the coming federal elections created more
uncertainty in the market. With all these worries, investors questioned the
valuations of stocks, and the markets showed increased volatility. Many of the
stocks that suffered the most were in the technology industries that had
performed so well early in the twelve-month period.
What were your principal investment strategies?
We have maintained a long-term strategy of investing in companies with
consistent records of earnings growth over extended periods of time. We also
tried to take advantage of two long-term trends in the economy: productivity
improvements in American industry and the aging of the American population.
Early in the fiscal year, we emphasized technology companies in pursuing the
productivity theme. We had about 50% of net assets invested in
technology-related companies. In the second half of the year, we reduced our
emphasis on technology. Many technology stocks had reached very high valuations,
and investors began realizing that as economic growth started to slow, many
technology stocks were vulnerable to changes in the business cycle. We reduced
our commitment to commodity-type technology companies such as
17
<PAGE>
EVERGREEN
Large Company Growth Fund
(Formerly Strategic Growth Fund)
Portfolio Manager Interview
hardware and semiconductor companies. However, we continued to favor software
service companies and companies involved in fiber optics networks for
telecommunications.
As the fiscal year progressed, we added to our positions in health care stocks,
which are tied to the "graying of America" theme. Despite political
controversies over Medicare funding and the costs of drugs, health care stocks
improved in performance in 2000. We have invested in major pharmaceutical
companies, specialty and generic manufacturers, and health care products
distributors.
We also increased our emphasis on energy companies during the second half of the
fiscal year. Helped by rising oil and natural gas prices, energy stocks also
acted as a hedge against the more volatile technology sector. With a backdrop of
low inventories and political uncertainties in the Middle East, we believe oil
and natural gas prices will remain high, which should be favorable for industry
earnings and exploration and production activities.
Top 5 Sectors
-------------
(as a percentage of 9/30/2000 net assets)
Information Technology 36.1%
Health Care 19.1%
Industrials 10.6%
Financials 10.4%
Energy 10.0%
What were some of the companies that contributed to the Fund's performance?
In technology, the Fund benefited from the performance of SanDisk, which
produces memory chips for mobile phones, digital cameras and other small
devices. Microchip Technology, which produces programmable semiconductor chips
used in a variety of products and appliances, also supported Fund returns.
In health care, two of the better performers were major pharmaceutical
companies. One was Pharmacia, whose growth prospects improved with the
acquisition of Searle from Monsanto. The other was Shire Pharmaceuticals, an
international company based in the United Kingdom which has been developing
drugs for Attention Deficit Syndrome and Alzheimer's Disease.
In energy, Anadarko Petroleum, an exploration and production company, did very
well for the Fund.
Top 10 Holdings
---------------
(as a percentage of 9/30/2000 net assets)
Gen. Elec. Co. 4.0%
Cisco Sys., Inc. 3.7%
American Home Products, Corp. 3.6%
EMC Corp. 3.1%
Intl. Business Machines Corp. 2.8%
Paychex, Inc. 2.6%
Exxon Mobil Corp. 2.6%
Tyco Intl., Ltd. 2.5%
Veritas Software Corp. 2.5%
American International Group, Inc. 2.4%
What is your investment outlook?
In the near term, we believe stock valuations are becoming more attractive than
they have been recently, although successful investors must be more selective
than they needed to be in late 1999 and early 2000. As the economy shows more
signs of slowing, we believe consumers may begin to feel less secure, so we have
reduced our investments in consumer-related stocks, including those of retail
and media companies.
18
<PAGE>
EVERGREEN
Large Company Growth Fund
(Formerly Strategic Growth Fund)
Portfolio Manager Interview
We anticipate that technology and health care will continue to be important
themes in the economy. Despite our reduction in technology holdings, we remain
confident about the long-term potential in the sector and we expect there may be
attractive opportunities for investment in the final quarter of 2000. We believe
corporations will continue to invest in technology tools that can help them
improve their productivity and become more competitive. We also believe there
will be opportunities in the companies that provide products and services for
the baby boomer generation as it grows older.
The performance of equities has been outstanding for more than a decade. It may
be time to adjust our expectations closer to the long-term market averages of
7%-to-10% returns a year, rather than the more than 20% returns to which we may
be accustomed.
19
<PAGE>
EVERGREEN
Masters Fund
Fund at a Glance as of September 30, 2000
"During the twelve months, we maintained our investment approach of seeking
great companies with outstanding business prospects that were selling at
attractive valuations."
--------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
--------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 9/30/2000.
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 investment return and
principal value of an investment will fluctuate so that investors' shares, when
redeemed, may be worth more or less than their original cost. The performance
of each class may vary based on differences in load, fees and expenses paid by
the shareholders investing in each class. Performance includes the reinvestment
of income dividends and capital gain distributions.
Class Y shares are only offered to persons who owned Class Y shares of an
Evergreen Fund on or before 12/31/1994; certain institutional investors; and
investment advisory clients of an investment advisor of an Evergreen Fund (or
the investment advisor's affiliates). The returns reflect expense limits
previously in effect, without which returns would have been lower. The Fund's
investment objective is non-fundamental and may be changed without the vote of
the Fund's shareholders. Foreign investments may contain more risk due to the
inherent risks associated with changing political climates, foreign market
instability and foreign currency fluctuations. Risks of international investing
are magnified in emerging or developing markets.
U.S. Government guarantees apply only to the underlying securities of the Fund's
portfolio and not the Fund's shares. 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 risks of failure.
All data is as of September 30, 2000 and is subject to change.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/1/
--------------------------------------------------------------------------------
Portfolio Inception Date: 12/31/1998 Class A Class B Class C Class Y
Class Inception Date 12/31/1998 12/31/1998 12/31/1998 12/31/1998
Average Annual Returns*
1 year with sales charge 25.31% 25.57% 28.50% n/a
1 year w/o sales charge 31.54% 30.57% 30.50% 31.78%
Since Portfolio Inception 14.09% 14.50% 15.94% 17.57%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
* Adjusted for maximum applicable sales charge unless noted.
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION> Masters Fund
Class A Consumer Price Index - US S & P 500 Composite Total Return S & P 400 Midcap Total Return
-------------- ------------------------- -------------------------------- -----------------------------
<S> <C> <C> <C> <C>
12/31/98 9,525 10,000 10,000 10,000
3/31/99 9,306 10,067 10,500 9,362
6/30/99 10,134 10,140 11,240 10,687
9/30/99 9,572 10,244 10,537 9,790
12/31/99 11,829 10,268 12,105 11,472
3/31/00 12,630 10,445 12,383 12,928
6/30/00 12,496 10,519 12,054 12,502
9/30/00 12,590 10,602 11,937 14,020
</TABLE>
Comparison of a $10,000 investment in Evergreen Masters Fund, Class A shares/2/,
versus a similar investment in the Standard & Poor's 500 Index (S&P 500), the
Standard & Poor's 400 Mid-Cap Index (S&P 400), and the Consumer Price Index
(CPI).
The S&P 500 and the S&P 400 are unmanaged market indices which do not include
transaction costs associated with buying and selling securities or 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.
20
<PAGE>
EVERGREEN
Masters Fund
Portfolio Manager Interview
How did the Fund perform?
For the twelve-month period ended September 30, 2000, the Fund's Class A
returned 31.54%, unadjusted for any applicable sales charge. In comparison, the
S&P 500 Index generated a 13.28% return and the S&P Mid-Cap 400 Index produced a
43.22%. The Fund's twelve-month performance reflects the varied performance of
the four portfolios that compose the Fund.
Portfolio
Characteristics
---------------
(as of 9/30/2000)
Total Net Assets $341,974,787
Number of Holdings 559
Beta n/a
P/E Ratio 16.0x
What was the investment environment like during the period?
The fiscal year started on a strong note. The economic environment for stocks
could not have been better. Economic growth was strong, inflation was contained,
unemployment was low and consumer spending was up. Even the Federal Reserve
Board's tight monetary policy of raising short-term interest rates could not
dampen investor enthusiasm for stocks. As a result, stock prices rose
significantly. The upward trend in stock prices was driven largely by what has
come to be known as "new economy" stocks in the technology, telecommunications
and media sectors. Such stocks had dominated the market for more than a year.
Top 5 Sectors
-------------
(as a percentage of 9/30/2000 net assets)
Information Technology 30.2%
Energy 12.9%
Health Care 12.2%
Industrials 12.1%
Consumer Discretionary 9.2%
Top 10 Holdings
---------------
(as a percentage of 9/30/2000 net assets)
VeriSign, Inc. 2.0%
VISX, Inc. 1.9%
Gen. Elec. Co. 1.9%
Checkfree Corp. 1.7%
American Tower Sys. Corp., Class A 1.6%
Newfield Exploration Co. 1.5%
United Therapeutics Corp. 1.5%
EOG Res., Inc. 1.5%
Cisco Sys., Inc. 1.4%
Internet Security Sys., Inc. 1.4%
In the first quarter of 2000, market sentiment began to change. Investors became
concerned that the high valuations of some stocks were unsustainable. In
addition, economic data began to indicate that the Federal Reserve Board's
rising interest-rate policy was having the desired effect of slowing the pace of
economic growth. Investors reasoned that slower growth would lead to weaker
corporate profits and, ultimately, to declining stock prices. Added to this mix
of concerns were higher oil prices. The investment environment had changed
dramatically, and investors began taking profits, particularly in the technology
area of the market. A downturn in technology stocks led to a broad-based decline
in other market sectors. As investors rotated out of technology stocks, they
sought opportunities in more traditional areas of the
21
<PAGE>
EVERGREEN
Masters Fund
Portfolio Manager Interview
market where valuations were more attractive. For weeks, there was a tug-of-war
between new economy and more traditional "old-economy" stocks. Technology issues
would rally for a short time and prices on more traditional stocks would tumble.
Then investors would reverse course, and old economy stocks would take the lead
at the expense of new economy issues.
Toward the end of the fiscal year, it appeared that economic growth had slowed
sufficiently to keep the Federal Reserve Board from raising rates again. Because
the Federal Reserve Board took no action on interest rates in August 2000, many
investors believed that the Federal Reserve Board's interest rate-raising cycle
was finished. Even though interest rates stabilized, stubbornly high oil prices,
weak earnings reports and the steep decline of the euro in relation to the U.S.
dollar had the market on edge. Volatility persisted. Nevertheless, most major
market indices ended the fiscal year with positive returns.
22
<PAGE>
EVERGREEN
Masters Fund
Portfolio Manager Interview*
Portfolio
Management
----------------------------
Evergreen Team
During the fiscal year ended September 30, 2000, the market environment for
mid-cap value stocks changed dramatically. For approximately the first six
months of the period, value stocks were out of favor with investors, as
high-flying growth stocks--particularly those in the technology area--took the
lead. When it appeared that growth stocks became overvalued, investors began
selling their growth shares and turned their attention to bargain priced value
stocks. As a result, returns on value stocks rose significantly.
During the twelve months, we maintained our investment approach of seeking great
companies with outstanding business prospects that were selling at attractive
valuations. Early in the period, we built up the technology portion of the
Portfolio. At first we favored semiconductor stocks because we expected them to
benefit from the build-out of the cellular and wireless telephone industry. When
we felt that semiconductor stocks had become fully valued, we reduced the
Portfolio's position in that area of the market and invested in select software
companies that we believe have the potential to perform well over the long-term
and that are more defensive than semiconductor companies. At 25% of portfolio
assets, technology stocks accounted for the portfolio's largest sector weighting
on September 30, 2000.
As economic data began to signal a slowdown in the pace of economic growth, it
became apparent that the Federal Reserve Board was at or near the end of its
interest rate-raising cycle. Therefore, we took a defensive approach in managing
the Portfolio. We sought opportunities in sectors that tend to perform well in
virtually any economic environment and in areas that had not participated in the
stock market's upward momentum during 1999. We maintained the Portfolio's
commitment to financial stocks because these stocks tend to do well during
periods of stable or declining interest rates. The financial stocks in the
Portfolio were strong contributors to performance. At the end of the fiscal
year, financial stocks accounted for 18% of the Portfolio's net assets, which is
higher than the 11% financial weighting in the S&P MidCap 400 Index, the
Portfolio's benchmark.
Over the course of the fiscal year, we invested in a number of defense and
utility companies. We added General Dynamics, Lockheed Martin and L-3
Communications Holdings in the defense sector. These stocks significantly
boosted performance.
In the Utilities area, we purchased shares of Dynergy, the Portfolio's largest
holding, and Calpine, an electric power producer. While these individual utility
companies helped the Portfolio generate strong gains, we believe performance was
held back by the relatively few utility positions in the Portfolio. At a time
when the utility sector rose approximately 28%, the Portfolio's 6% utility
weighting was significantly less than the 11% weighting in the S&P MidCap 400
Index.
As oil prices rose during the period, the Portfolio's energy holdings greatly
enhanced performance. We emphasized oil field services companies that would
benefit from increased drilling for petroleum reserves. In the energy sector, we
added oil exploration and production companies, such as Transocean Sedco Forex,
Gran Prideco, BJ Services and Diamond Offshore Drilling.
We reduced the number of consumer cyclical companies in the Portfolio. In this
area, we cut back on retail companies whose profits may decline in an economic
slowdown. Consumer spending accounts for two-thirds of the economy's growth, and
as economic growth slows, we expect consumers to cut back on their discretionary
spending. Therefore, we sold companies in the furniture and housing areas of the
------------
*This discussion represents the Evergreen Team's portion of the
Masters Fund portfolio.
23
<PAGE>
EVERGREEN
Masters Fund
Portfolio Manager Interview*
market. We added stocks, such as CVS and Family Dollar, retail chains that sell
consumer staples--or goods that consumers tend to purchase in any economic
environment.
As we move into the final months of 2000, we expect economic growth to continue
to slow. Slower economic growth tends to lead to lower corporate profits and,
ultimately, to lower stock prices. While we realize that mid-cap stocks may be
more sensitive to a weaker economy than larger companies, we believe that the
defensive nature of the Portfolio should offer a measure of downside protection
in a volatile market. While we think that the recent turbulence in the market
may continue in the short-term, we view such turbulence as an opportunity to
purchase shares of outstanding companies at reduced prices. We see good values
in the mid-cap sector of the market and many opportunities for positive
performance in the months ahead. We expect the economy will weaken enough so
that the Federal Reserve Board will ease monetary policy. This development would
make consumer cyclical stocks more attractive to us.
------------
*This discussion represents the Evergreen Team's portion of the
Masters Fund portfolio.
24
<PAGE>
EVERGREEN
Masters Fund
Portfolio Manager Interview*
Portfolio
Management
----------------------------
MFS Team
During the period, the portfolio's strategic position in rapidly growing,
reasonably valued companies helped bolster performance as "Value" stocks
outperformed "Growth" stocks across all market capitalizations. However, the
portfolios strategic position in smaller mid-cap companies detracted from
performance as smaller cap indices underperformed larger cap indices.
Stock selection within the Technology sector provided the greatest contribution
to the portfolio's return during the quarter. Positions in Emulex, MMC Networks,
Sipex, and VeriSign performed very well. Shares of Emulex rose after the maker
of computer cards that speed data transmission reported second quarter sales and
profit that exceeded forecasts. MMC Networks, a developer of network processors,
surged after reporting strong revenues and signing a definitive agreement to
merge with Applied Micro Circuits, a semiconductor company. The position was
subsequently sold from the portfolio. Sipex, an integrated-circuit maker, rose
after beating profit estimates. And VeriSign, the internet security company that
recently bought Network Solutions, quadrupled sales and performed well despite
the fact that their second-quarter loss widened on acquisition costs.
The portfolio's under-weighting in Technology also contributed to performance as
internet, PC, and electronic companies dragged the sector down. Another
contributor to performance was a substantial over-weighting in Energy, as the
entire sector continued to benefit from positive trends including record prices
for oil and gas and a pronounced supply and demand imbalance.
Stock selection in health care was the single greatest detractor from
performance as our holdings suffered in an otherwise healthy sector. Positions
in Cytyc Corp and United Therapeutics detracted the most. Cytyc Corp, the maker
of tests that screen women for cervical cancer, slid during the quarter after
reporting lower than expected profit growth due to its increased marketing
expenditures. United Therapeutics, a pharmaceutical company developing drugs for
cardiovascular problems, dropped during the quarter even though losses were
consistent with management's expectations. We believe that both companies have
promising products in the pipeline and solid fundamentals that will allow them
to rebound strongly and become industry leaders.
Our under-weighting in Financial Services detracted from performance as several
bank and credit companies within the index rallied. Finally, positions in CSG
Systems and Nova Corp within the Business Services sector hurt performance. CSG
fell dramatically in the final days of the quarter after AT&T brought a
contractual dispute regarding CSG's capabilities to arbitration. Nova Corp.
tumbled after the merchant processing company warned second quarter revenue
likely fell below analysts' estimates as it handled fewer credit card bills and
transactions.
In general, high oil prices, a slumping euro, and high-profile tech sector
earnings disappointments were the big stories driving the market's recent
movements. To be sure, if these trends continue in their current path, it could
spell more trouble for financial markets. That said, in our judgement, there are
positive forces that could ultimately lead to a recovery of the euro, to stable
to slightly lower oil prices, and to a generally strong outlook for corporate
earnings.
While rising oil prices put pressure on the ability of many companies to keep
prices low, we believe the pace of U.S. economic growth is moderating, reducing
the threat of higher inflation and further rate hikes by the Federal Reserve
Board. A raft of economic data released in September continued to portray an
economy gliding toward a soft landing of slower growth and stable prices. The
U.S. Department of
------------
*This discussion represents the MFS Team's portion of the Masters
Fund portfolio.
25
<PAGE>
EVERGREEN
Masters Fund
Portfolio Manager Interview*
Labor reported that the Consumer Price Index (CPI) fell 0.1% in August, after
gaining 0.2% the previous month, the first decline in more than 14 years.
Excluding volatile food and energy prices, the core CPI gained a modest 0.2% for
the fifth consecutive month.
In addition, unless the Organization of Petroleum Exporting Countries (OPEC)
disrupts production, we don't believe oil prices are sustainable at much above
$30 per barrel. According to our research, oil production is up over 4% from a
year ago and is beginning to catch up to demand. So we feel that oil prices are
close to peaking.
Turning to the euro, we believe European economic conditions should remain good.
The moderation in U.S. economic activity suggests that the investment
environment in Europe is improving relative to that of the United States. In our
view, the European Central Bank is at or near the end of its interest-rate
tightening cycle, which could support the euro and reduce fears that European
economic growth will stall.
------------
*This discussion represents the MFS Team's portion of the Masters
Fund portfolio.
26
<PAGE>
EVERGREEN
Masters Fund
Portfolio Manager Interview*
Portfolio
Management
----------------------------
Oppenheimer Team
During September 2000, evidence continued to mount that the rate of economic
growth is slowing: several prominent economists have now trimmed their estimates
for 2001. Also, estimates of aggregate corporate earnings growth have been cut
for the second half of 2000 and 2001; many of the cuts for specific companies
have been quite severe.
There are several reasons behind the slowdown which include, the cumulative
effect of the Federal Reserve Board's tightenings, higher energy costs and the
now-decelerating pace of capital spending on technology. Reflecting these
developments, in September 2000 the stock market fared poorly. Value-type stocks
held up much better than growth-type stocks.
The Fund's relatively good performance this year can be attributed primarily to
the success of our bottom-up stock selection models. Our quantitative stock
scoring system has been very effective this year, especially in the Technology
sector, which carries the biggest weight in the Fund, and in the Energy sector,
in which we are most over-weighted relative to the benchmark. It is important to
note that our quantitative stock selection models have been developed, tested
and successfully employed for many years but that they are constantly evolving
and being improved. During the past twelve months, we have completed several
important research projects and incorporated new factors into our models.
Sector weightings are important in analyzing performance attribution, but they
are secondary to stock selection in our investment process. So far this year,
our sector weighing decisions have had mixed success. On the positive side, we
have been significantly over-weighted in Energy, which has performed very well
and under-weighted in Communications Services, which has lagged. On the other
hand, our over-weighting in Consumer Cyclicals and our under-weighted position
in Financials and Health Care have hurt our performance. In the very important
and volatile Technology sector we have navigated through a difficult period
relatively well. We started the year under-weighted in Technology relative to
the Russell 1000. This hurt our performance in the first quarter but was very
helpful during the sharp technology correction during April and May.
In the current environment, attractiveness of mega-cap stocks (roughly the 40
largest companies) appears less favorable than typical large-cap or mid-cap
stocks. Also, the developing environment, with a risk of disappointing corporate
earnings, would appear to be more favorable for higher-quality stocks than
lower-quality ones. These are both themes which we are working to incorporate
into the Evergreen Masters Fund currently.
------------
*This discussion represents the Oppenheimer Team's portion of the
Masters Fund portfolio.
27
<PAGE>
EVERGREEN
Masters Fund
Portfolio Manager Interview*
Portfolio
Management
----------------------------
Putnam Team
Following the euphoria that propelled the U.S. equity market in the final
quarter of 1999, the market's tone turned more somber in 2000. Though, still
trending positive, market volatility reached extreme levels in the first quarter
as dramatic shifts occurred within single weeks and even days. April opened with
a hair-raising decline of the technology-laden Nasdaq Composite--the index lost
nearly 30% before bouncing back to end the second quarter with a loss of
13%--which coincided with the government's ruling against Microsoft in its
antitrust case. Technology remained lackluster and out of favor through the end
of the fund's fiscal year.
Hoping to induce a soft landing in response to robust economic strength, the
Federal Reserve Board raised interest rates three times in the Fund's fiscal
year; the final 50 basis-point increase in May equaled the two first-quarter
rate hikes combined. This capped a spate of six tightenings over a twelve-month
period. By June, a slowdown in retail sales, coupled with other early
indications of a cooling economy, left the Federal Reserve Board on the
sidelines.
After a long period of growth stock dominance, value stocks have assumed a
position of market leadership. Market preference shifted from small-cap stocks
in the first quarter of 2000 to the relative stability of large-cap stocks in
the second, but small-caps regained the roost by September's end. The safe haven
of utilities has recently garnered investor favor, ending the third quarter 2000
as the leading sector of the S&P 500.
Rising oil prices and the weakening euro have arisen as two negative factors for
the U.S. equity market. Oil prices have risen 20% in 2000 and more than 60% in
the past twelve months. Higher energy costs have begun to exert a negative
impact on corporate profits and consumer spending. Since its introduction in
January 1999, the euro has lost 25% of its value; roughly half of that loss has
occurred in 2000. While intervention efforts in late September brought a measure
of stability to the beleaguered currency, a number of companies pre-announced
negative earnings surprises during the third quarter due to unfavorable currency
translation effects and focused investor attention on the profitability of large
multinationals that derive significant earnings from the eurozone.
Historically, the impact of Federal Reserve interest-rate tightenings occurs
twelve months after they are enacted. Given the six rate hikes over the past 18
months, an economic slowdown could be a negative factor for equity markets. We
anticipate a continuation of the moderating-growth, low-inflation environment in
the U.S. for the remainder of 2000. Absent any new strong inflationary signs, we
believe it is unlikely that the Federal Reserve Board will raise rates again
this year, due to the upcoming presidential election and signs that productivity
remains strong while inflation, with the exception of oil prices, remains
steady.
Over the near-term, we are focusing on communications equipment,
semiconductors, software and electronic components within technology;
entertainment, cable programming, broadcasting, and media within consumer
staples; and the conglomerates Tyco and General Electric. We intend to
underweight cellular and long-distance carriers within communications services
and general merchandise, retail, and specialty retail within consumer cyclicals.
Our philosophy for managing our portion of the portfolio remains constant: We
believe that a strategy of systematic selection of high-quality growth stocks,
combined with rigorous risk management and a disciplined sell process, will
generate attractive risk-adjusted returns over the course of a market cycle.
------------
*This discussion represents the Putnam Team's portion of the 28 Masters
Fund portfolio.
28
<PAGE>
EVERGREEN
Omega Fund
Fund at a Glance as of September 30, 2000
"Despite our reduction in technology holdings, we remain confident about the
long-term potential in the sector and we expect there may be attractive
opportunities for investment in the final quarter of 2000."
Portfolio
Management
----------------------------
Maureen E. Cullinane, CFA
Tenure: April 1989
--------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
--------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 9/30/2000.
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 investment return and
principal value of an investment will fluctuate so that investors' shares, when
redeemed, may be worth more or less than their original cost. The performance
of each class may vary based on differences in load, fees and expenses paid by
the shareholders investing in each class. Performance includes the reinvestment
of income dividends and capital gain distributions.
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.
Class Y shares are only offered to persons who owned Class Y shares of an
Evergreen Fund on or before 12/31/1994; certain institutional investors; and
investment advisory clients of an investment advisor of an Evergreen Fund (or
the investment advisor's affiliates).
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
The health care and technology sectors in which the Fund invests are in a period
of unusually strong performance. These sectors' performance may not be expected
to continue.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/2/
--------------------------------------------------------------------------------
Portfolio Inception Date: 4/29/1968 Class A Class B Class C Class Y
Class Inception Date 4/29/1968 8/2/1993 8/2/1993 1/13/1997
Average Annual Returns*
1 year with sales charge 42.70% 43.72% 46.73% n/a
1 year w/o sales charge 49.83% 48.72% 48.73% 50.17%
5 years 24.36% 24.41% 24.56% 25.76%
10 years 22.08% 21.95% 21.97% 22.76%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
12-month capital gain
distributions per share $0.99 $0.99 $0.99 $0.99
* Adjusted for maximum applicable sales charge unless noted.
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION> Omega Fund
Class A Consumer Price Index - US S & P 500 Composite Total Return Russell 1000 Growth
------------ ------------------------- -------------------------------- -------------------
<S> <C> <C> <C> <C>
9/30/90 9,525 10,000 10,000 10,000
9/30/91 13,906 10,339 13,117 13,866
9/30/92 14,714 10,648 14,566 15,374
9/30/93 19,658 10,934 16,460 16,293
9/30/94 18,429 11,258 17,067 17,244
9/30/95 23,541 11,545 22,143 22,795
9/30/96 26,588 11,891 26,645 27,672
9/30/97 33,659 12,148 37,423 37,716
9/30/98 35,150 12,329 40,807 41,903
9/30/99 49,063 12,653 52,157 56,507
9/30/00 73,509 13,095 59,086 69,735
</TABLE>
Comparison of a $10,000 investment in Evergreen Omega Fund, Class A shares/2/,
versus a similar investment in the Russell 1000 Growth Index (Russell 1000
Growth), and the Standard & Poor's 500 Index (S&P 500) and the Consumer Price
Index (CPI).
The Russell 1000 Growth and the S&P 500 are unmanaged market indices which do
not include transaction costs associated with buying and selling securities or
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.
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 fluctuations.
All data is as of September 30, 2000 and is subject to change.
29
<PAGE>
EVERGREEN
Omega Fund
Portfolio Manager Interview
How did the Fund perform?
For the twelve-month period ended September 30, 2000, Evergreen Omega Fund's
Class A shares returned 49.83% before deduction of any applicable sales charges.
During the same twelve-month period, the Russell 1000 Growth Index returned
23.43% and the Standard & Poor's 500 Index returned 13.28%. The median return of
multi-cap growth funds was 49.28%, according to Lipper Inc., an independent
monitor of mutual fund performance.
Portfolio
Characteristics
---------------
(as of 9/30/2000)
Total Net Assets $2,524,146,785
Number of Holdings 82
Beta 0.98
P/E Ratio 38.3x
What was the investment environment like during the twelve-month period?
The environment changed dramatically from the first half of the year to the
second half. During the first six months, we had an excellent environment for
the growth style of investing, with an expanding economy and very little
evidence of inflation. Technology stocks, including internet infrastructure,
semi-conductor manufacturers and software companies, did extraordinarily well.
Behind the scenes, however, the Federal Reserve Board was growing increasingly
uneasy about the rapid pace of economic growth and the possibility that
inflationary pressures could rise. As a result, the Federal Reserve Board raised
short-term rates several times in an effort to slow the rate of economic growth.
Concerns about whether the Federal Reserve Board would be successful created
uncertainty in the market, contributing to considerable volatility during the
second half of the year. By the end of the period, however, it had become
increasingly evident that the higher interest rates were effective and that
economic growth was beginning to slow. At the same time, energy prices increased
much faster than anyone expected, acting almost as a tax on the consumer.
Meanwhile, the dramatic decline of the European currency, the euro, on
international currency exchanges and the coming federal elections created more
uncertainty in the market. With all these worries, investors questioned the
valuations of stocks, and the markets showed increased volatility. Many of the
stocks that suffered the most were in the technology industries that had
performed so well early in the twelve-month period.
What were your principal investment strategies?
We have maintained a long-term strategy of investing in companies with
consistent records of earnings growth over extended periods of time. We also
tried to take advantage of two long-term trends in the economy: productivity
improvements in American industry and the aging of the American population.
Early in the fiscal year, we emphasized technology companies in pursuing the
productivity theme. Our technology weighting was about 50% of net assets. In the
second half of the year we reduced our emphasis on technology. Many technology
stocks had reached very high valuations, and investors began realizing that as
economic growth started to slow, many technology stocks were vulnerable to
changes in the business cycle. We reduced our commitment to commodity-type
technology companies such as hardware and semiconductor companies. However, we
continued to favor software service companies and companies involved in fiber
optics networks for telecommunications.
30
<PAGE>
EVERGREEN
Omega Fund
Portfolio Manager Interview
As the fiscal year progressed, we added to our positions in health care stocks,
which are tied to the "graying of America" theme. Despite political
controversies over Medicare funding and the costs of drugs, health care stocks
improved in performance in 2000. We have invested in major pharmaceutical
companies, specialty and generic manufacturers, and health care products
distributors.
We also increased our emphasis on energy companies during the second half of the
fiscal year. Helped by rising oil and natural gas prices, energy stocks also
acted as a hedge against the more volatile technology sector. With a backdrop of
low inventories and political uncertainties in the Middle East, we believe oil
and natural gas prices will remain high, which should be favorable for industry
earnings and exploration and production activities.
Top 5 Sectors
-------------
(as a percentage of 9/30/2000 net assets)
Information Technology 44.1%
Health Care 20.5%
Industrials 9.8%
Energy 8.0%
Financials 7.3%
What were some of the companies that contributed to the Fund's performance?
In technology, Nvidia, which makes semiconductor chips employed to generate 3-D
graphic images, was a particularly strong performer. Nvidia is the designated
supplier of chips for Microsoft's new game console, which will be introduced in
the fall of 2001. Two other companies that contributed to performance were
Veritas Software, which produces data-management tools for corporations, and
Verisign, which has developed security systems for companies doing business on
the internet.
In health care, ALZA, a manufacturer of specialty pharmaceuticals, and Mylan
Laboratories, a generic drug manufacturer, helped performance. We think generic
drug companies could perform well if the federal government were to adopt a
prescription drug benefit program.
In energy, Apache Corp., an exploration and production company, had strong
performance.
Top 10 Holdings
---------------
(as a percentage of 9/30/2000 net assets)
Mylan Laboratories, Inc. 2.6%
American Home Products Corp. 2.6%
EMC Corp. 2.5%
Tyco Intl., Ltd. 2.5%
NVIDIA Corp. 2.4%
Cardinal Health, Inc. 2.3%
Gen. Elec. Co. 2.3%
Cisco Sys., Inc. 2.2%
American Express Co. 2.0%
America Online, Inc. 2.0%
What is your investment outlook?
In the near term, we believe stock valuations are becoming more attractive than
they have been recently, although successful investors must be more selective
than they needed to be in late 1999 and early 2000. As the economy shows more
signs of slowing, we believe consumers may begin to feel less secure, so we have
reduced our investments in consumer-related stocks, including those of retail
and media companies.
We anticipate that technology and health care will continue to be important
themes in the economy. Despite our reduction in technology holdings, we remain
confident about the long-term potential in the sector and we expect there may be
attractive opportunities for investment in the final quarter of
31
<PAGE>
EVERGREEN
Omega Fund
Portfolio Manager Interview
2000. We believe corporations will continue to invest in technology tools that
can help them improve their productivity and become more competitive. We also
believe there will be opportunities in the companies that provide products and
services for the baby boomer generation as it grows older.
The performance of equities has been outstanding for more than a decade. It may
be time to adjust our expectations closer to the long-term market averages of
7%-to-10% returns a year, rather than the more than 20% returns to which we may
be accustomed.
32
<PAGE>
EVERGREEN
Small Company Growth Fund
Fund at a Glance as of September 30, 2000
"We expect investors in small-and mid-sized companies will be more selective,
favoring companies that have demonstrated their ability to achieve earnings
growth."
Portfolio
Management
J. Gary Craven
Tenure: November 1996
--------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
--------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 9/30/2000. 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 investment return
and principal value of an investment will fluctuate so that investors' shares,
when redeemed, may be worth more or less than their original cost. The
performance of each class may vary based on differences in load, fees and
expenses paid by the shareholders investing in each class. Performance includes
the reinvestment of income dividends and capital gain distributions.
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. The 12b-1 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 for Classes A and Y would have been
lower.
Class Y shares are only offered to persons who owned Class Y shares of an
Evergreen Fund on or before 12/31/1994; certain institutional investors; and
investment advisory clients of an investment advisor of an Evergreen Fund (or
the investment advisor's affiliates).
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders. The exceptional performance of the Fund is
due to participation in IPO's. There is no assurance that this method will
continue to have the same impact on the Fund's performance returns.
--------------------------------------------------------------------------------
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 1/26/1998 1/26/1998
Average Annual Returns*
1 year with sales charge 55.67% 56.97% 60.13% n/a
1 year w/o sales charge 63.37% 61.97% 62.13% 63.44%
5 years 12.12% 12.17% 12.40% 13.47%
10 years 21.34% 21.11% 20.97% 22.22%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
* Adjusted for maximum applicable sales charge unless noted.
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
Small Company Growth
Class B Consumer Price Index - US Russell 2000
---------------------- ------------------------- ------------
9/30/90 10,000 10,000 10,000
9/30/91 16,890 10,339 14,509
9/30/92 17,919 10,648 15,831
9/30/93 27,654 10,934 21,080
9/30/94 27,276 11,258 21,644
9/30/95 37,792 11,545 26,680
9/30/96 38,503 11,891 30,184
9/30/97 45,618 12,148 40,201
9/30/98 30,157 12,329 32,556
9/30/99 41,904 12,653 38,765
9/30/00 67,871 13,095 47,768
Comparison of a $10,000 investment in Evergreen Small Company Growth Fund, Class
B shares/2/, versus a similar investment in the Russell 2000 Index (Russell
2000) and the Consumer Price Index (CPI).
The Russell 2000 is an unmanaged market index which does not include transaction
costs associated with buying and selling securities or 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.
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 fluctuations.
All data is as of September 30, 2000 and is subject to change.
33
<PAGE>
EVERGREEN
Small Company Growth Fund
Portfolio Manager Interview
How did the Fund perform?
For the twelve-month period ended September 30, 2000, Evergreen Small Company
Growth Fund's Class B shares returned 61.97% before deduction of any applicable
sales charges. During the same twelve-month period, the Russell 2000 Index, a
common benchmark for smaller company stocks, returned 23.39%. The median return
of mid-cap growth funds was 63.06%, according to Lipper Inc., an independent
monitor of mutual fund performance. The Fund, which participated in the strong
rally in technology and biotechnology stocks early in the year, was able to
retain most of its gains during the volatile second half of the year when many
technology stocks suffered steep price losses.
Portfolio
Characteristics
---------------
(as of 9/30/2000)
Total Net Assets $1,204,301,654
Number of Holdings 142
Beta 1.05
P/E Ratio 21.5x
What was the investment environment like during the twelve months?
The environment changed greatly during the year. For the first half of the
fiscal year, optimism reigned, and investors bid up the prices of technology and
biotechnology companies in their enthusiasm for the long-term growth prospects
of the internet, telecommunications and health care. Prices of many technology
stocks hit levels rarely seen for any stocks. As so often happens after periods
of extreme optimism, enthusiasm cooled as the realization grew that young
technology companies needed to show they would be able to achieve profitability.
With this realization came a severe correction in technology and biotechnology
stocks in March, April and May of this year.
The first companies to suffer in this correction were those firms without a
clear plan for achieving profitability in the short run. However, other negative
factors soon surfaced. Fast-growing companies are highly dependent on outside
financing sources for their capital needs, including initial public stock
offerings (IPOs), venture capital financing and high yield debts. These sources
of capital became less accessible, and young technology companies had more
difficulty getting the funding they needed for their growth. This problem first
affected consumer-oriented internet companies, then spread to business-to-
business internet companies and then to telecommunications services providers.
At the same time, the Federal Reserve's efforts to slow down economic growth by
raising short-term interest rates had an effect on the corporate customers of
many technology companies, who felt less urgency to build up their internet
operations.
While technology stocks suffered losses, many health care and energy stocks
rallied. The stocks of health care companies had been floundering because of
inadequate pricing and political controversies over funding formulas. During the
period, however, funding appeared to stabilize for the health care industry,
while drug manufacturers benefited from the development of new proprietary drugs
as well as from the expiration of existing patents that opened up new
opportunities for generic manufacturers.
The stocks of energy-related companies surged as global economic growth
expanded, fueling the greater demand for oil and gas than sources could supply.
The resulting higher energy prices increased business opportunities for many
fast-growing companies.
34
<PAGE>
EVERGREEN
Small Company Growth Fund
Portfolio Manager Interview
What were your principal strategies?
During the first half of the year, we invested heavily in technology and
biotechnology, and this helped performance notably as those sectors surged. Late
in the first six-month period, however, we reduced our exposure to technology
because of our concerns about the exceptionally high valuations of many
technology stocks. However, after the technology corrections, we gradually
started investing selectively again in technology companies, particularly those
involved in information transmission. We believe corporations will continue to
need to invest in services and equipment to allow faster transmission of data.
We have invested in companies such as Art Technology, which provides customer
relationship management and e-commerce software, and Emulex, which manufactures
components for storage area networks.
While we have reduced our overall technology holdings, we have increased the
Fund's exposure to health care and energy stocks. Our health care investments
including health care services, pharmacy benefit managers, rehabilitation
service companies, long-term care centers, HMOS, and contract testing
laboratories. During the year, we varied our emphasis on biotechnology
companies, investing when we saw opportunities in companies with prospects to
achieve profitability in the short term. Our energy investments including
companies providing services and equipment for oil and gas exploration and
production activities.
The Fund maintained a relatively low weighting in financial services, although
we have invested in property-and-casualty insurers and insurance brokers. We
believe both should benefit from improved pricing in the insurance industry.
Top 5 Sectors
-------------
(as a percentage of 9/30/2000 net assets)
Information Technology 41.1%
Health Care 21.5%
Industrials 13.6%
Financials 7.6%
Energy 6.3%
What were some of the companies that supported performance?
Rational Software, a long-time holding and a large position in the Fund, had
excellent performance, benefiting from the continued demand for information
technology products. The company develops tools to help software engineers.
Citrix Systems, which makes software for remote hosting of e-commerce business
applications, performed well for the Fund before we sold our position. In health
care, Laboratory Corporation of America, which provides contract-testing
services for health institutions, had excellent performance.
Many of the top-performing investments during the year were sold as the
companies grew and became too large for the Fund's mandate of investing in
small- and mid-cap companies. They included I2 Technologies, JDS Uniphase,
Network Appliance and Millenium Pharmaceuticals.
35
<PAGE>
EVERGREEN
Small Company Growth Fund
Portfolio Manager Interview
Top 10 Holdings
---------------
(as a percentage of 9/30/2000 net assets)
Emulex Corp. 2.7%
Rational Software Corp. 2.5%
Extreme Networks, Inc. 2.3%
Roper Inds., Inc. 2.2%
Devry, Inc. 2.1%
QLogic Corp. 1.9%
Art Technology Group, Inc. 1.7%
Lycos, Inc. 1.6%
Watson Pharmaceuticals, Inc. 1.6%
Triton Energy, Ltd. 1.6%
What is your outlook?
We think the speculative enthusiasm that marked much of the past 18 months is
over. The interest rate increases of the Federal Reserve probably will result in
a slowing of economic growth. Consumer spending may be cut back, affecting
economically sensitive stocks, including those of manufacturers and retailers.
We expect investors in small- and mid-sized companies will be more selective,
favoring companies that have demonstrated their ability to achieve earnings
growth. We anticipate some of the best opportunities may be in companies
producing enterprise-level software for corporate customers, generic and
proprietary drug manufacturers, and biotechnology companies that have developed
products likely to have market success within the succeeding 12 months.
We believe that as a result of corrections in the broad technology sector, we
will be able to find opportunities among many companies whose stock prices offer
value in relation to their underlying fundamentals.
36
<PAGE>
EVERGREEN
Stock Selector Fund
Fund at a Glance as of September 30, 2000
"The Fund is designed to be appropriate as an investor's core stock portfolio."
Portfolio
Management
----------------------
William Zieff
Tenure: October 2000
--------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
--------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 9/30/2000.
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 investment return and
principal value of an investment will fluctuate so that investors' shares, when
redeemed, may be worth more or less than their original cost. The performance of
each class may vary based on differences in load, fees and expenses paid by the
shareholders investing in each class. Performance includes the reinvestment of
income dividends and capital gain distributions.
Historical performance shown for Classes B, C, Y and IS 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 IS, 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. The advisor is waiving a portion of its
advisory fee. Had the fee not been waived, returns would have been lower.
Class Y shares are only offered to persons who owned Class Y shares of an
Evergreen Fund on or before 12/31/1994; certain institutional investors; and
investment advisory clients of an investment advisor of an Evergreen Fund (or
the investment advisor's affiliates).
Class IS shares are institutional shares and require a minimum initial
investment of $1,000,000.
Class I and IS shares do not incur sales charges. Had sales charges been
incurred, 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.
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/2/
--------------------------------------------------------------------------------
Portfolio Inception
Date: 2/28/1990 Class A Class B Class C Class Y Class IS
Class Inception Date 2/28/1990 11/7/1997 6/30/1999 2/21/1995 6/30/2000
Average Annual Returns*
1 year with sales charge 6.98% 7.07% 9.74% n/a n/a
1 year w/o sales charge 12.31% 11.42% 11.49% 12.62% 1.56%
5 years 17.47% 15.87% 18.40% 18.90% 18.62%
10 years 18.00% 17.30% 18.47% 18.72% 18.58%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a n/a
Front End CDSC CDSC
12-month income
dividends per share $0.00 $0.00 $0.00 $0.01 $0.00
12-month capital gain
distributions per share $4.83 $4.83 $4.83 $4.83 $2.49
*Adjusted for maximum applicable sales charge unless noted.
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION> Stock Selector
Class A Consumer Price Index - US S & P 500 Composite Total Return
---------------- ------------------------- --------------------------------
<S> <C> <C> <C>
9/30/90 9,525 10,000 10,000
9/30/91 13,636 10,339 13,117
9/30/92 15,227 10,648 14,566
9/30/93 17,239 10,934 16,460
9/30/94 17,845 11,258 17,067
9/30/95 22,297 11,545 22,143
9/30/96 27,172 11,891 26,645
9/30/97 39,080 12,148 37,423
9/30/98 34,471 12,329 40,807
9/30/99 46,599 12,653 52,157
9/30/00 52,334 13,095 59,086
</TABLE>
Comparison of a $10,000 investment in Evergreen Stock Selector Fund, Class A
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 or 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.
All data is as of September 30, 2000 and is subject to change.
37
<PAGE>
EVERGREEN
Stock Selector Fund
Portfolio Manager Interview
How did the Fund perform?
Evergreen Stock Selector Fund Class A shares returned 12.31% for the
twelve-month period ended September 30, 2000 before deduction of any applicable
sales charges. During the same period, the Standard & Poor's 500 Index returned
13.28%, while the median return of multi-cap core funds was 18.11%, according to
Lipper Inc., an independent monitor of mutual fund performance.
Portfolio
Characteristics
---------------
(as of 9/30/2000)
Total Net Assets $1,090,063,856
Number of Holdings 147
Beta 1.14
P/E Ratio 26.0x
What was the general investment environment like during the twelve-month
period?
The general environment for stocks changed significantly during the fiscal year
after an extended period in which investors enjoyed strong returns with
relatively little volatility. The overall market, as reflected by the Standard &
Poor's 500 Index had healthy, double-digit returns, these returns overshadowed
considerable volatility, as investor sentiment swung from one sector to another.
The technology sector experienced the greatest volatility, but all segments of
the market were affected by rotation among sectors and industries in performance
leadership.
For the first six months of the period, technology stocks, particularly stocks
linked to the internet, surged ahead before peaking in the Spring of 2000, after
which they fell considerably. By the end of the period, investors were worried
about slowing economic growth and concerned about the impact that a slower
economy might have on corporate earnings. While many stocks fell in value, the
stocks of companies that reported lower-than-expected earnings tended to be
punished the most severely.
By the time the fiscal year ended on September 30, many well-known technology
stocks had fallen far from the heights they had reached earlier in the period.
Not every sector suffered. For example, many energy-related companies showed
strong improvement, propelled by rising oil and natural gas prices. Financial
services stocks, helped in part by increased merger-and-acquisition activity
and healthy earnings results, also showed strength, as did many utility stocks,
which rose after being out of favor for some time.
Top 5 Sectors
-------------
(as a percentage of 9/30/2000 net assets)
Information Technology 28.0%
Financials 16.4%
Health Care 13.8%
Industrials 9.3%
Consumer Discretionary 9.0%
How are the investment decisions made for the Fund?
We use a team approach, with a group of senior investment professionals involved
in a rigorously disciplined investment process. Our strategy is to have a
diversified portfolio, with both value and growth characteristics. This
portfolio may encompass stocks from the full range of industries and sectors. We
tend to invest in stocks of a variety of sizes, or market capitalizations,
although we do not invest in very small-capitalization stocks. The Fund is
designed to be appropriate as an investor's core stock portfolio.
38
<PAGE>
EVERGREEN
Stock Selector Fund
Portfolio Manager Interview
We actively manage the portfolio. We will over-weight industries and sectors
modestly, making sure that we balance many of the risks to which the portfolio
is exposed. We employ a quantitative process in evaluating stocks on a daily
basis, looking at a variety of factors including valuation from company balance
sheets and income statements, earnings outlook and momentum. Our portfolio
construction process involves integrated risk management to consider an array of
factors and risks that can influence performance.
While we use quantitative tools, we make qualitative judgments to review stock
rankings and the buy and sell decisions. Experienced professionals, not
computers, make the final judgments.
How have you positioned the Fund?
We have maintained a diversified portfolio, broadly reflecting the overall
market. Since taking over management of the portfolio in July, we have
maintained modest over-weight positions in the financial services, energy and
utilities industries, all of which have contributed positively to the Fund's
recent returns.
In financial services, companies that performed particularly well for the Fund
included J.P. Morgan and Lehman Brothers.
Energy companies with strong fundamentals that helped support the Fund's returns
included Kerr-McGee and Anadarko Petroleum Corp.
Utilities that helped the Fund's performance included El Paso Energy and Peco
Energy.
Top 10 Holdings
---------------
(as a percentage of 9/30/2000 net assets)
Gen. Elec. Co. 4.4%
Pfizer, Inc. 3.2%
Citigroup, Inc. 3.0%
Cisco Sys., Inc. 3.0%
Microsoft Corp. 2.9%
EMC Corp. 2.5%
American Intl. Group, Inc. 2.3%
Exxon Mobil Corp. 1.9%
Merck & Co., Inc. 1.9%
Intel Corp. 1.8%
What is your outlook?
We believe many of the changes we have witnessed during the past year will
persist, with investor sentiment continuing to rotate among different sectors
and industries. While momentum undoubtedly will continue to play a role, the
market appears to have returned to a recognition of the importance of factors
such as earnings, cash flow and stock valuations as important ingredients in
successful stock investing.
Economic growth in the U.S. appears to be slowing, although the inflation
picture is less clear. While profits still are healthy, corporate earnings
growth has begun to slow and adjustments to more normal rates of earnings growth
could prove to be painful. Merger-and-acquisition activity, corporate
restructuring and the influence of foreign markets are likely to affect market
dynamics.
As these different trends progress, we believe fundamental valuation as well as
analysis of factors such as earnings visibility, earnings quality and balance
sheet strength will become increasingly important.
In the future, we believe average stock investment returns will be attractive.
However, volatility may very well continue as investors adjust to more normal,
but lower returns from stocks.
39
<PAGE>
EVERGREEN
Tax Strategic Equity Fund
Fund at a Glance as of September 30, 2000
"While we use quantitative tools, we make qualitative judgments to review stock
rankings and the buy and sell decisions. Experienced professionals, not
computers, make the final judgments."
Portfolio
Management
----------------------
William Zieff
Tenure: July 2000
--------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
--------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 9/30/2000.
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 investment return and
principal value of an investment will fluctuate so that investors' shares, when
redeemed, may be worth more or less than their original cost. The performance of
each class may vary based on differences in load, fees and expenses paid by the
shareholders investing in each class. Performance includes the reinvestment of
income dividends and capital gain distributions.
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. Returns reflect expense limits
previously in effect, without which returns would have been lower.
Class Y shares are only offered to persons who owned Class Y shares of an
Evergreen Fund on or before 12/31/1994; certain institutional investors; and
investment advisory clients of an investment advisor of an Evergreen Fund (or
the investment advisor's affiliates).
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/2/
--------------------------------------------------------------------------------
Portfolio Inception Date: 9/1/1998 Class A Class B Class C Class Y
Class Inception Date 9/4/1998 10/14/1998 11/4/1998 9/1/1998
Average Annual Returns*
1 year with sales charge 7.27% 6.69% 9.68% n/a
1 year w/o sales charge 12.63% 11.69% 11.68% 12.86%
Since Portfolio Inception 21.70% 22.64% 23.82% 25.01%
Maximum Sales Charge 4.75% 5.00% 2.00% n/a
Front End CDSC CDSC
*Adjusted for maximum applicable sales charge unless noted.
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION> Tax Strategic Equity
Class A Consumer Price Index - US S & P 500 Composite Total Return
---------------------- ------------------------- --------------------------------
<S> <C> <C> <C>
9/4/98 9,525 10,000 10,000
9/30/98 10,144 10,012 10,641
12/31/98 12,983 10,031 12,906
3/31/99 12,973 10,098 13,551
6/30/99 14,436 10,171 14,506
9/30/99 13,358 10,275 13,600
12/31/99 15,533 10,300 15,624
3/31/00 16,304 10,477 15,982
6/30/00 15,177 10,551 15,557
9/30/00 15,044 10,634 15,407
</TABLE>
Comparison of a $ 10,000 investment in Evergreen Tax Strategic Equity Fund,
Class A 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 or 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.
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.
All data is as of September 30, 2000 and is subject to change.
40
<PAGE>
EVERGREEN
Tax Strategic Equity Fund
Portfolio Manager Interview
How did the Fund perform?
Evergreen Tax Strategic Equity Fund Class A shares had a total return of 12.63%
for the twelve-month period ended September 30, 2000 before deduction of any
applicable sales charges. During the same period, the Standard & Poor's 500
Index returned 13.28%, while the median return of multi-cap core funds was
18.11%, according to Lipper Inc., an independent monitor of mutual fund
performance.
Portfolio
Characteristics
---------------
(as of 9/30/2000)
Total Net Assets $27,662,769
Number of Holdings 134
Beta n/a
P/E Ratio 31.5x
What was the general investment environment like during the twelve-month
period?
The general environment for stocks changed significantly during the fiscal year
after an extended period in which investors enjoyed strong returns with
relatively little volatility. Although both the overall market, as reflected by
the Standard & Poor's 500 Index, and the Tax Strategic Equity Fund had healthy,
double-digit returns, these returns overshadowed considerable volatility, as
investor sentiment swung from one sector to another. The technology sector
experienced the greatest volatility, but all segments of the market were
affected by rotation among sectors and industries in performance leadership.
For the first six months of the period, technology stocks, particularly stocks
linked to the internet, surged ahead before peaking in the Spring of 2000, after
which they fell considerably. By the end of the period, investors were worried
about slowing economic growth and concerned about the impact that a slower
economy might have on corporate earnings. While many stocks fell in value, the
stocks of companies that reported lower-than-expected earnings tended to be
punished the most severely.
By the time the fiscal year ended on September 30, many well-known technology
stocks had fallen far from the heights they had reached earlier in the period.
Not every sector suffered. For example, many energy-related companies showed
strong improvement, propelled by rising oil and natural gas prices. Financial
services stocks, helped in part by increased merger-and-acquisition activity
and healthy earnings results, also showed strength, as did many utility stocks,
which rose after being out of favor for some time.
Top 5 Sectors
-------------
(as a percentage of 9/30/2000 net assets)
Information Technology 29.4%
Financials 15.9%
Health Care 12.8%
Industrials 10.8%
Consumer Discretionary 10.0%
How are the investment decisions made for the Fund?
We use a team approach, with a group of senior investment professionals involved
in a rigorously disciplined investment process. Our strategy is to have a
diversified portfolio, with both value and growth characteristics. This
portfolio may encompass stocks from the full range of industries and sectors. We
tend to invest in stocks of a variety of sizes, or market capitalizations,
although we do not invest in very small-cap stocks. The Fund is designed to be
41
<PAGE>
EVERGREEN
Tax Strategic Equity Fund
Portfolio Manager Interview
appropriate as the core portfolio for investors who want to participate in the
stock market, but who are sensitive to tax considerations.
We actively manage the portfolio. We will over-weight industries and sectors
modestly, making sure that we balance many of the risks to which the portfolio
is exposed. We employ a quantitative process in evaluating stocks on a daily
basis, looking at a variety of factors including valuation from company balance
sheets and income statements, earnings outlook and momentum. Our portfolio
construction process involves integrated risk management to consider an array of
factors and risks that can influence performance.
While we use quantitative tools, we make qualitative judgments to review stock
rankings and the buy and sell decisions. Experienced professionals, not
computers, make the final judgments.
In making buy and sell decisions, we pay particularly close attention to the tax
consequences to shareholders. When appropriate, we may try to harvest losses
from some investments to offset realized gains from other stocks.
Top 10 Holdings
---------------
(as a percentage of 9/30/2000 net assets)
Gen. Elec. Co. 5.7%
Exxon Mobil Corp. 3.3%
Cisco Sys., Inc. 3.1%
Pfizer, Inc. 3.1%
Intel Corp. 2.9%
Time Warner, Inc. 2.5%
Intl. Business Corp. 2.4%
Oracle Sys. Corp. 2.1%
Nortel Networks Corp. 2.1%
EMC Corp. 2.1%
How have you positioned the Tax Strategic Equity Fund?
We have sought to maintain a diversified portfolio, broadly reflecting the
overall market. Since taking over management of the portfolio in July 2000, we
have maintained modest over-weight positions in energy and diversified financial
services, both of which have contributed positively to the Fund's recent
returns. Investments that helped support performance included Exxon in energy
and Merrill Lynch in financial services.
What is your outlook?
We believe many of the changes we have witnessed during the past year will
persist, with investor sentiment continuing to rotate among different sectors
and industries. While momentum undoubtedly will continue to play a role, the
market appears to have returned to a recognition of the importance of factors
such as earnings, cash flow and stock valuations as important ingredients in
successful stock investing.
Economic growth in the U.S. appears to be slowing, although the inflation
picture is less clear. While profits are still healthy, corporate earnings
growth has begun to slow and adjustments to more normal rates of earnings growth
could prove to be painful. Merger-and-acquisition activity, corporate
restructuring and the influence of foreign markets are likely to affect market
dynamics.
As these different trends progress, we believe fundamental valuation as well as
analysis of factors such as earnings visibility, earnings quality and balance
sheet strength will become increasingly important.
In the future, we believe average stock investment returns are likely to be
attractive. However, volatility may very well continue as investors adjust to
more normal, but lower returns from stocks.
42
<PAGE>
EVERGREEN
Aggressive Growth Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
---------------------------------------------------
2000 # 1999 # 1998 # 1997 # 1996
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 25.87 $ 21.26 $ 23.48 $ 21.04 $ 17.37
-------- -------- -------- -------- -------
Income from investment
operations
Net investment loss (0.24) (0.22) (0.25) (0.21) (0.15)
Net realized and
unrealized gains or
losses on securities 15.78 7.46 (1.12) 2.65 4.46
-------- -------- -------- -------- -------
Total from investment
operations 15.54 7.24 (1.37) 2.44 4.31
-------- -------- -------- -------- -------
Distributions to
shareholders from
Net realized gains (3.27) (2.63) (0.85) 0 (0.64)
-------- -------- -------- -------- -------
Total distributions to
shareholders (3.27) (2.63) (0.85) 0 (0.64)
-------- -------- -------- -------- -------
Net asset value, end of
period $ 38.14 $ 25.87 $ 21.26 $ 23.48 $ 21.04
-------- -------- -------- -------- -------
Total return* 64.76% 36.92% (5.93%) 11.60% 25.62%
Ratios and supplemental
data
Net assets, end of
period (thousands) $284,984 $166,524 $137,776 $173,982 $96,608
Ratios to average net
assets
Expenses++ 1.12% 1.18% 1.33% 1.26% 1.22%
Net investment loss (0.70%) (0.92%) (1.14%) (1.05%) (0.86%)
Portfolio turnover rate 203% 86% 22% 56% 33%
<CAPTION>
Year Ended September 30,
---------------------------------------------------
2000 # 1999 # 1998 # 1997 # 1996
CLASS B SHARES
Net asset value,
beginning of period $ 25.04 $ 20.78 $ 23.18 $ 20.89 $ 17.35
-------- -------- -------- -------- -------
Income from investment
operations
Net investment loss (0.54) (0.40) (0.41) (0.37) (0.16)
Net realized and
unrealized gains or
losses on securities 15.27 7.29 (1.14) 2.66 4.34
-------- -------- -------- -------- -------
Total from investment
operations 14.73 6.89 (1.55) 2.29 4.18
-------- -------- -------- -------- -------
Distributions to
shareholders from
Net realized gains (3.27) (2.63) (0.85) 0 (0.64)
-------- -------- -------- -------- -------
Total distributions to
shareholders (3.27) (2.63) (0.85) 0 (0.64)
-------- -------- -------- -------- -------
Net asset value, end of
period $ 36.50 $ 25.04 $ 20.78 $ 23.18 $ 20.89
-------- -------- -------- -------- -------
Total return* 63.56% 36.00% (6.82%) 10.96% 24.88%
Ratios and supplemental
data
Net assets, end of
period (thousands) $134,252 $ 56,466 $ 36,301 $ 41,167 $21,644
Ratios to average net
assets
Expenses++ 1.88% 1.93% 2.08% 2.02% 1.98%
Net investment loss (1.44%) (1.67%) (1.88%) (1.80%) (1.60%)
Portfolio turnover rate 203% 86% 22% 56% 33%
</TABLE>
# Net investment income per share is based on average shares outstanding during
the period.
* Excluding applicable sales charges.
++ The ratio of expenses to average net assets excludes expense reductions and
includes fee waivers.
See Combined Notes to Financial Statements.
43
<PAGE>
EVERGREEN
Aggressive Growth Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
-----------------------------------------------
2000 # 1999 # 1998 # 1997 # 1996
<S> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value, beginning
of period $ 24.98 $ 20.75 $ 23.16 $ 20.88 $ 17.31
------- ------- ------- ------- -------
Income from investment
operations
Net investment loss (0.58) (0.39) (0.41) (0.36) (0.15)
Net realized and unrealized
gains or losses on
securities 15.29 7.25 (1.15) 2.64 4.36
------- ------- ------- ------- -------
Total from investment
operations 14.71 6.86 (1.56) 2.28 4.21
------- ------- ------- ------- -------
Distributions to
shareholders from
Net realized gains (3.27) (2.63) (0.85) 0 (0.64)
------- ------- ------- ------- -------
Total distributions to
shareholders (3.27) (2.63) (0.85) 0 (0.64)
------- ------- ------- ------- -------
Net asset value, end of
period $ 36.42 $ 24.98 $ 20.75 $ 23.16 $ 20.88
------- ------- ------- ------- -------
Total return* 63.64% 35.90% (6.87%) 10.92% 25.11%
Ratios and supplemental data
Net assets, end of period
(thousands) $15,736 $ 4,685 $ 2,570 $ 3,992 $ 991
Ratios to average net assets
Expenses++ 1.91% 1.92% 2.08% 2.02% 1.96%
Net investment loss (1.40%) (1.67%) (1.88%) (1.80%) (1.57%)
Portfolio turnover rate 203% 86% 22% 56% 33%
<CAPTION>
Year Ended September 30,
-----------------------------------------------
2000 # 1999 # 1998 # 1997 # 1996
<S> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value, beginning
of period $ 26.23 $ 21.46 $ 23.57 $ 21.09 $ 17.38
------- ------- ------- ------- -------
Income from investment
operations
Net investment loss (0.16) (0.17) (0.20) (0.17) (0.06)
Net realized and unrealized
gains or losses on
securities 16.06 7.57 (1.06) 2.65 4.41
------- ------- ------- ------- -------
Total from investment
operations 15.90 7.40 (1.26) 2.48 4.35
------- ------- ------- ------- -------
Distributions to
shareholders from
Net realized gains (3.27) (2.63) (0.85) 0 (0.64)
------- ------- ------- ------- -------
Total distributions to
shareholders (3.27) (2.63) (0.85) 0 (0.64)
------- ------- ------- ------- -------
Net asset value, end of
period $ 38.86 $ 26.23 $ 21.46 $ 23.57 $ 21.09
------- ------- ------- ------- -------
Total return 65.30% 37.36% (5.43%) 11.76% 25.84%
Ratios and supplemental data
Net assets, end of period
(thousands) $48,523 $28,867 $28,314 $44,384 $25,918
Ratios to average net assets
Expenses++ 0.88% 0.93% 1.08% 1.01% 0.97%
Net investment loss (0.44%) (0.67%) (0.89%) (0.78%) (0.60%)
Portfolio turnover rate 203% 86% 22% 56% 33%
</TABLE>
# Net investment income per share is based on average shares outstanding dur-
ing the period.
* Excluding applicable sales charges.
++ The ratio of expenses to average net assets excludes expense reductions and
includes fee waivers.
See Combined Notes to Financial Statements.
44
<PAGE>
EVERGREEN
Capital Growth Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
------------------------------------------------
2000# 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
CLASS A SHARES (a)
Net asset value, beginning of
period $ 24.38 $ 22.71 $ 22.42 $ 19.36 $ 16.02
-------- -------- -------- ------- -------
Income from investment
operations
Net investment income (loss) (0.02) (0.05) (0.10) (0.02) 0.11
Net realized and unrealized
gains on securities 3.44 4.27 2.34 5.87 3.73
-------- -------- -------- ------- -------
Total from investment
operations 3.42 4.22 2.24 5.85 3.84
-------- -------- -------- ------- -------
Distributions to shareholders
from
Net investment income 0 0 (0.01) 0 0
Net realized gains (0.51) (2.55) (1.94) (2.79) (0.50)
-------- -------- -------- ------- -------
Total distributions to
shareholders (0.51) (2.55) (1.95) (2.79) (0.50)
-------- -------- -------- ------- -------
Net asset value, end of
period $ 27.29 $ 24.38 $ 22.71 $ 22.42 $ 19.36
-------- -------- -------- ------- -------
Total return* 14.21% 20.21% 10.72% 34.78% 24.63%
Ratios and supplemental data
Net assets, end of period
(thousands) $222,615 $285,690 $145,117 $65,703 $31,889
Ratios to average net assets
Expenses++ 1.65% 1.39% 1.34% 1.41% 1.43%
Net investment income (loss) (0.07%) (0.21%) 0.06% 0.53% 0.51%
Portfolio turnover rate 77% 82% 104% 64% 98%
</TABLE>
<TABLE>
<CAPTION>
Year Ended
September 30, 2000 (b)#
<S> <C>
CLASS B SHARES (a)
Net asset value, beginning of period $ 24.33
-------
Income from investment operations
Net investment loss (0.14)
Net realized and unrealized gains on securities 3.43
-------
Total from investment operations 3.29
-------
Distributions to shareholders from
Net investment income 0
Net realized gains (0.51)
-------
Total distributions to shareholders (0.51)
-------
Net asset value, end of period $ 27.11
-------
Total return* 13.70%
Ratios and supplemental data
Net assets, end of period (thousands) $18,423
Ratios to average net assets
Expenses++ 2.35%+
Net investment loss (0.59%)+
Portfolio turnover rate 77%
</TABLE>
(a) Effective October 25, 1999, shareholders of Mentor Capital Growth Portfolio
Class A, Class B and Class Y shares became owners of that number of full
and fractional shares of Class A, Class C and Class Y, respectively, of Ev-
ergreen Capital Growth Fund. Additionally, the accounting and performance
history of Class B shares of Mentor Capital Growth Portfolio was
redesignated as that of Class C shares of Evergreen Capital Growth Fund.
(b) For the period from October 25, 1999 (commencement of class operations) to
September 30, 2000.
# Net investment income per share is based on average shares outstanding
during the period.
* Excluding applicable sales charges.
++ The ratio of expenses to average net assets excludes expense reductions and
includes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
45
<PAGE>
EVERGREEN
Capital Growth Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
---------------------------------------------------
2000# 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
CLASS C SHARES (a)
Net asset value,
beginning of period $ 22.97 $ 21.72 $ 21.68 $ 18.92 $ 15.79
-------- -------- -------- -------- -------
Income from investment
operations
Net investment loss (0.19) (0.22) (0.08) 0 (0.04)
Net realized and
unrealized gains on
securities 3.22 4.02 2.07 5.55 3.67
-------- -------- -------- -------- -------
Total from investment
operations 3.03 3.80 1.99 5.55 3.63
-------- -------- -------- -------- -------
Distributions to
shareholders from
Net investment income 0 0 (0.01) 0 0
Net realized gains (0.51) (2.55) (1.94) (2.79) (0.50)
-------- -------- -------- -------- -------
Total distributions to
shareholders (0.51) (2.55) (1.95) (2.79) (0.50)
-------- -------- -------- -------- -------
Net asset value, end of
period $ 25.49 $ 22.97 $ 21.72 $ 21.68 $ 18.92
-------- -------- -------- -------- -------
Total return* 13.37% 19.08% 9.86% 33.88% 23.64%
Ratios and supplemental
data
Net assets, end of
period (thousands) $223,242 $253,281 $196,751 $113,587 $68,213
Ratios to average net
assets
Expenses++ 2.41% 2.14% 2.09% 2.16% 2.18%
Net investment loss (0.82%) (0.96%) (0.70%) (0.22%) (0.24%)
Portfolio turnover rate 77% 82% 104% 64% 98%
</TABLE>
<TABLE>
<CAPTION>
Year Ended September
30,
------------------------
2000# 1999 1998 (b)
<S> <C> <C> <C>
CLASS Y SHARES (a)
Net asset value, beginning of period $24.50 $22.74 $20.81
------ ------ ------
Income from investment operations
Net investment income 0.12 0 0.02
Net realized and unrealized gains on securities 3.38 4.31 2.16
------ ------ ------
Total from investment operations 3.50 4.31 2.18
------ ------ ------
Distributions to shareholders from
Net realized gains (0.51) (2.55) (0.25)
------ ------ ------
Total distributions to shareholders (0.51) (2.55) (0.25)
------ ------ ------
Net asset value, end of period $27.49 $24.50 $22.74
------ ------ ------
Total return 14.48% 20.57% 10.56%
Ratios and supplemental data
Net assets, end of period (thousands) $ 37 $ 1 $ 1
Ratios to average net assets
Expenses++ 1.34% 1.13% 1.09%+
Net investment income 0.47% 0.08% 0.38%+
Portfolio turnover rate 77% 82% 104%
</TABLE>
(a) Effective October 25, 1999, shareholders of Mentor Capital Growth Portfolio
Class A, Class B and Class Y shares became owners of that number of full
and fractional shares of Class A, Class C and Class Y, respectively, of Ev-
ergreen Capital Growth Fund. Additionally, the accounting and performance
history of Class B shares of Mentor Capital Growth Portfolio was
redesignated as that of Class C shares of Evergreen Capital Growth Fund.
(b) For the period from November 19, 1997 (commencement of class operations) to
September 30, 1998.
# Net investment income per share is based on average shares outstanding
during the period.
* Excluding applicable sales charges.
++ The ratio of expenses to average net assets excludes expense reductions and
includes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
46
<PAGE>
EVERGREEN
Evergreen Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------------------
2000 # 1999 # 1998 # 1997 # 1996
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value, beginning of period $24.24 $21.11 $22.96 $17.64 $15.55
------ ------ ------ ------ ------
Income from investment operations
Net investment income (loss) (0.12) 0.02 0.06 0.11 0.12
Net realized and unrealized gains or
losses on securities 2.79 3.22 (1.31) 5.71 2.61
------ ------ ------ ------ ------
Total from investment operations 2.67 3.24 (1.25) 5.82 2.73
------ ------ ------ ------ ------
Distributions to shareholders from
Net investment income 0 (0.04) (0.10) (0.09) (0.06)
Net realized gains (10.03) (0.07) (0.50) (0.41) (0.58)
------ ------ ------ ------ ------
Total distributions to shareholders (10.03) (0.11) (0.60) (0.50) (0.64)
------ ------ ------ ------ ------
Net asset value, end of period $16.88 $24.24 $21.11 $22.96 $17.64
------ ------ ------ ------ ------
Total return* 11.07% 15.34% (5.59%) 33.72% 18.07%
Ratios and supplemental data
Net assets, end of period (millions) $ 161 $ 180 $ 183 $ 161 $ 87
Ratios to average net assets
Expenses++ 1.43% 1.39% 1.44% 1.40% 1.45%
Net investment income (loss) (0.49%) 0.06% 0.24% 0.58% 0.63%
Portfolio turnover rate 119% 35% 7% 12% 15%
</TABLE>
<TABLE>
<CAPTION>
Year Ended September 30,
-------------------------------------------
2000 # 1999 # 1998 # 1997 # 1996
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value, beginning of
period $ 23.80 $20.82 $22.69 $17.49 $15.48
------- ------ ------ ------ ------
Income from investment
operations
Net investment loss (0.28) (0.17) (0.12) (0.03) (0.03)
Net realized and unrealized
gains or losses on securities 2.72 3.22 (1.25) 5.64 2.64
------- ------ ------ ------ ------
Total from investment operations 2.44 3.05 (1.37) 5.61 2.61
------- ------ ------ ------ ------
Distributions to shareholders
from
Net investment income 0 0 0 0 (0.02)
Net realized gains (10.03) (0.07) (0.50) (0.41) (0.58)
------- ------ ------ ------ ------
Total distributions to
shareholders (10.03) (0.07) (0.50) (0.41) (0.60)
------- ------ ------ ------ ------
Net asset value, end of period $ 16.21 $23.80 $20.82 $22.69 $17.49
------- ------ ------ ------ ------
Total return* 10.22% 14.65% (6.18%) 32.69% 17.29%
Ratios and supplemental data
Net assets, end of period
(millions) $ 553 $ 646 $ 624 $ 503 $ 254
Ratios to average net assets
Expenses++ 2.18% 2.14% 2.19% 2.15% 2.18%
Net investment loss (1.23%) (0.70%) (0.50%) (0.16%) (0.10%)
Portfolio turnover rate 119% 35% 7% 12% 15%
</TABLE>
# Net investment income per share is based on average shares outstanding dur-
ing the period.
* Excluding applicable sales charges.
++ The ratio of expenses to average net assets excludes expense reductions and
includes fee waivers.
See Combined Notes to Financial Statements.
47
<PAGE>
EVERGREEN
Evergreen Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
------------------------------------------
2000 # 1999 # 1998 # 1997 # 1996
<S> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value, beginning of
period $23.77 $20.79 $22.66 $17.47 $15.48
------ ------ ------ ------ ------
Income from investment operations
Net investment loss (0.28) (0.16) (0.11) (0.04) 0
Net realized and unrealized gains
or losses on securities 2.72 3.21 (1.26) 5.64 2.61
------ ------ ------ ------ ------
Total from investment operations 2.44 3.05 (1.37) 5.60 2.61
------ ------ ------ ------ ------
Distributions to shareholders
from
Net investment income 0 0 0 0 (0.04)
Net realized gains (10.03) (0.07) (0.50) (0.41) (0.58)
------ ------ ------ ------ ------
Total distributions to
shareholders (10.03) (0.07) (0.50) (0.41) (0.62)
------ ------ ------ ------ ------
Net asset value, end of period $16.18 $23.77 $20.79 $22.66 $17.47
------ ------ ------ ------ ------
Total return* 10.23% 14.67% (6.19%) 32.67% 17.29%
Ratios and supplemental data
Net assets, end of period
(millions) $ 11 $ 14 $ 13 $ 9 $ 6
Ratios to average net assets
Expenses++ 2.18% 2.14% 2.19% 2.16% 2.14%
Net investment loss (1.24%) (0.70%) (0.50%) (0.18%) (0.07%)
Portfolio turnover rate 119% 35% 7% 12% 15%
</TABLE>
<TABLE>
<CAPTION>
Year Ended September 30,
-----------------------------------------
2000 # 1999 # 1998 # 1997 # 1996
<S> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value, beginning of
period $ 24.48 $21.25 $23.07 $17.71 $15.59
------- ------ ------ ------ ------
Income from investment operations
Net investment income (loss) (0.06) 0.07 0.12 0.16 0.24
Net realized and unrealized gains
or losses on securities 2.81 3.28 (1.30) 5.73 2.55
------- ------ ------ ------ ------
Total from investment operations 2.75 3.35 (1.18) 5.89 2.79
------- ------ ------ ------ ------
Distributions to shareholders from
Net investment income 0 (0.05) (0.14) (0.12) (0.09)
Net realized gains (10.03) (0.07) (0.50) (0.41) (0.58)
------- ------ ------ ------ ------
Total distributions to shareholders (10.03) (0.12) (0.64) (0.53) (0.67)
------- ------ ------ ------ ------
Net asset value, end of period $ 17.20 $24.48 $21.25 $23.07 $17.71
------- ------ ------ ------ ------
Total return 11.32% 15.79% (5.25%) 34.08% 18.43%
Ratios and supplemental data
Net assets, end of period
(millions) $ 887 $1,086 $1,028 $1,104 $ 841
Ratios to average net assets
Expenses++ 1.18% 1.14% 1.18% 1.15% 1.15%
Net investment income (loss) (0.23%) 0.30% 0.49% 0.80% 0.93%
Portfolio turnover rate 119% 35% 7% 12% 15%
</TABLE>
# Net investment income per share is based on average shares outstanding dur-
ing the period.
* Excluding applicable sales charges.
++ The ratio of expenses to average net assets excludes expense reductions and
includes fee waivers.
See Combined Notes to Financial Statements.
48
<PAGE>
EVERGREEN
Growth Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
-------------------------------------------------
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
CLASS A SHARES (a)
Net asset value, beginning
of period $ 15.99 $ 14.60 $ 19.94 $ 18.47 $ 16.08
-------- ------- ------- -------- -------
Income from investment
operations
Net investment loss (0.20) (0.12) (0.12) (0.17) (0.10)
Net realized and
unrealized gains or
losses on securities 10.19 2.07 (4.03) 4.19 4.23
-------- ------- ------- -------- -------
Total from investment
operations 9.99 1.95 (4.15) 4.02 4.13
-------- ------- ------- -------- -------
Distributions to
shareholders from
Net realized gains (0.87) (0.56) (1.19) (2.55) (1.74)
-------- ------- ------- -------- -------
Total distributions to
shareholders (0.87) (0.56) (1.19) (2.55) (1.74)
-------- ------- ------- -------- -------
Net asset value, end of
period $ 25.11 $ 15.99 $ 14.60 $ 19.94 $ 18.47
-------- ------- ------- -------- -------
Total return* 65.01% 13.90% (22.08%) 25.81% 29.15%
Ratios and supplemental
data
Net assets, end of period
(thousands) $114,248 $92,229 $77,720 $105,033 $40,272
Ratios to average net
assets
Expenses++ 1.44% 1.30% 1.26% 1.28% 1.28%
Net investment loss (0.91%) (0.71%) (0.56%) (0.67%) (0.39%)
Portfolio turnover rate 137% 108% 88% 77% 105%
</TABLE>
<TABLE>
<CAPTION>
Year Ended
September 30, 2000 (b)
<S> <C>
CLASS B SHARES (a)
Net asset value, beginning of period $14.88
------
Income from investment operations
Net investment loss (0.35)
Net realized and unrealized gains on securities 10.31
------
Total from investment operations 9.96
------
Distributions to shareholders from
Net investment income 0
Net realized gains (0.87)
------
Total distributions to shareholders (0.87)
------
Net asset value, end of period $23.97
------
Total return* 69.62%
Ratios and supplemental data
Net assets, end of period (millions) $6,155
Ratios to average net assets
Expenses++ 2.14%+
Net investment loss (1.60%)+
Portfolio turnover rate 137%
</TABLE>
(a) Effective October 18, 1999, shareholders of Mentor Growth Portfolio Class
A, Class B and Class Y shares became owners of that number of full and
fractional shares of Class A, Class C and Class Y, respectively, of Ever-
green Growth Fund. Additionally, the accounting and performance history of
Class B shares of Mentor Growth Portfolio was redesignated as that of Class
C shares of Evergreen Growth Fund.
(b) For the period from October 18, 1999 (commencement of class operations) to
September 30, 2000.
* Excluding applicable sales charges.
++ The ratio of expenses to average net assets excludes expense reductions and
includes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
49
<PAGE>
EVERGREEN
Growth Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------------------------------
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
CLASS C SHARES (a)
Net asset value,
beginning of period $ 15.39 $ 14.18 $ 19.53 $ 18.29 $ 16.05
-------- -------- -------- -------- --------
Income from investment
operations
Net investment loss (0.35) (0.25) (0.23) (0.22) (0.17)
Net realized and
unrealized gains or
losses on securities 9.77 2.02 (3.93) 4.01 4.15
-------- -------- -------- -------- --------
Total from investment
operations 9.42 1.77 (4.16) 3.79 3.98
-------- -------- -------- -------- --------
Distributions to
shareholders from
Net realized gains (0.87) (0.56) (1.19) (2.55) (1.74)
-------- -------- -------- -------- --------
Total distributions to
shareholders (0.87) (0.56) (1.19) (2.55) (1.74)
-------- -------- -------- -------- --------
Net asset value, end of
period $ 23.94 $ 15.39 $ 14.18 $ 19.53 $ 18.29
-------- -------- -------- -------- --------
Total return* 63.79% 13.01% (22.62%) 24.66% 28.18%
Ratios and supplemental
data
Net assets, end of
period (thousands) $439,879 $334,484 $383,188 $506,230 $371,578
Ratios to average net
assets
Expenses++ 2.20% 2.05% 2.01% 2.03% 2.03%
Net investment loss (1.67%) (1.45%) (1.30%) (1.42%) (1.13%)
Portfolio turnover rate 137% 108% 88% 77% 105%
</TABLE>
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------
2000 1999 1998 (b)
<S> <C> <C> <C>
CLASS Y SHARES (a)
Net asset value, beginning of period $ 16.05 $ 14.63 $ 18.12
-------- ------- -------
Income from investment operations
Net investment loss (0.15) (0.07) (0.02)
Net realized and unrealized gains or losses on
securities 10.25 2.05 (3.28)
-------- ------- -------
Total from investment operations 10.10 1.98 (3.30)
-------- ------- -------
Distributions to shareholders from
Net realized gains (0.87) (0.56) (0.19)
-------- ------- -------
Total distributions to shareholders (0.87) (0.56) (0.19)
-------- ------- -------
Net asset value, end of period $ 25.28 $ 16.05 $ 14.63
-------- ------- -------
Total return 65.47% 14.08% 18.36%
Ratios and supplemental data
Net assets, end of period (thousands) $136,704 $35,427 $25,353
Ratios to average net assets
Expenses++ 1.18% 1.05% 1.01%+
Net investment loss (0.65%) (0.47%) (0.04%)+
Portfolio turnover rate 137% 108% 88%
</TABLE>
(a) Effective October 18, 1999, shareholders of Mentor Growth Portfolio Class
A, Class B and Class Y shares became owners of that number of full and
fractional shares of Class A, Class C and Class Y, respectively, of Ever-
green Growth Fund. Additionally, the accounting and performance history of
Class B shares of Mentor Growth Portfolio was redesignated as that of Class
C shares of Evergreen Growth Fund.
(b) For the period from November 19, 1997 (commencement of class operations) to
September 30, 1998.
* Excluding applicable sales charges.
++ The ratio of expenses to average net assets excludes expense reductions and
includes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
50
<PAGE>
EVERGREEN
Large Company Growth Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------
2000 1999 # 1998 (a) #
<S> <C> <C> <C>
CLASS A SHARES
Net asset value, beginning of period $11.03 $ 9.67 $9.12
------ ------ -----
Income from investment operations
Net investment income (loss) (0.05) (0.03) 0.01
Net realized and unrealized gains on securities 3.46 2.73 0.54
------ ------ -----
Total from investment operations 3.41 2.70 0.55
------ ------ -----
Distributions to shareholders from
Net realized gains (1.80) (1.34) 0
------ ------ -----
Total distributions to shareholders (1.80) (1.34) 0
------ ------ -----
Net asset value, end of period $12.64 $11.03 $9.67
------ ------ -----
Total return* 33.16% 30.15% 6.03%
Ratios and supplemental data
Net assets, end of period (millions) $1,090 $ 862 $ 706
Ratios to average net assets
Expenses++ 0.95% 1.00% 1.10%+
Net investment income (loss) (0.34%) (0.29%) 0.08%+
Portfolio turnover rate 147% 132% 141%
</TABLE>
<TABLE>
<CAPTION>
Year Ended
Year Ended September 30, October 31,
------------------------------------- ---------------
2000 1999 # 1998 # 1997 (b) # 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $10.89 $ 9.63 $10.61 $ 8.68 $ 8.05 $ 7.54
------ ------ ------ ------ ------ ------
Income from investment
operations
Net investment income
(loss) (0.21) (0.11) (0.03) 0.01 (0.04) (0.02)
Net realized and
unrealized gains on
securities 3.46 2.71 0.39 2.96 1.04 1.13
------ ------ ------ ------ ------ ------
Total from investment
operations 3.25 2.60 0.36 2.97 1.00 1.11
------ ------ ------ ------ ------ ------
Distributions to
shareholders from
Net investment income 0 0 (0.02) 0 (0.01) 0
Net realized gains (1.80) (1.34) (1.32) (1.04) (0.36) (0.60)
------ ------ ------ ------ ------ ------
Total distributions to
shareholders (1.80) (1.34) (1.34) (1.04) (0.37) (0.60)
------ ------ ------ ------ ------ ------
Net asset value, end of
period $12.34 $10.89 $ 9.63 $10.61 $ 8.68 $ 8.05
------ ------ ------ ------ ------ ------
Total return* 31.99% 29.15% 3.87% 37.74% 12.95% 15.05%
Ratios and supplemental
data
Net assets, end of
period (millions) $ 86 $ 103 $ 130 $ 920 $ 497 $ 492
Ratios to average net
assets
Expenses++ 1.71% 1.75% 1.36% 1.19%+ 1.91% 2.01%
Net investment income
(loss) (1.09%) (1.03%) (0.26%) 0.12%+ (0.48%) (0.25%)
Portfolio turnover rate 147% 132% 141% 71% 156% 140%
</TABLE>
(a) For the period from January 20, 1998 (commencement of class operations) to
September 30, 1998.
(b) For the eleven months ended September 30, 1997. The Fund changed its fiscal
year end from October 31 to September 30, effective September 30, 1997.
# Net investment income per share is based on average shares outstanding
during the period.
* Excluding applicable sales charges.
++ Ratio of expenses to average net assets excludes expense reductions and in-
cludes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
51
<PAGE>
EVERGREEN
Large Company Growth Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------
2000 1999 # 1998 (a) #
<S> <C> <C> <C>
CLASS C SHARES
Net asset value, beginning of period $10.89 $ 9.63 $9.25
------ ------ -----
Income from investment operations
Net investment loss (0.04) (0.12) (0.07)
Net realized and unrealized gains on securities 3.30 2.72 0.45
------ ------ -----
Total from investment operations 3.26 2.60 0.38
------ ------ -----
Distributions to shareholders from
Net realized gains (1.80) (1.34) 0
------ ------ -----
Total distributions to shareholders (1.80) (1.34) 0
------ ------ -----
Net asset value, end of period $12.35 $10.89 $9.63
------ ------ -----
Total return* 32.08% 29.15% 4.11%
Ratios and supplemental data
Net assets, end of period (thousands) $7,176 $2,452 $ 453
Ratios to average net assets
Expenses++ 1.71% 1.75% 1.84%+
Net investment loss (1.11%) (1.08%) (0.80%)+
Portfolio turnover rate 147% 132% 141%
</TABLE>
<TABLE>
<CAPTION>
Year Ended
September 30,
-------------------
2000 1999 (b) #
<S> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $10.92 $11.28
------ ------
Income from investment
operations
Net investment loss (0.01) 0
Net realized and
unrealized gains and
losses on securities 3.40 (0.36)
------ ------
Total from investment
operations 3.39 (0.36)
------ ------
Distributions to
shareholders from
Net realized gains (1.80) 0
------ ------
Total distributions to
shareholders (1.80) 0
------ ------
Net asset value, end of
period $12.51 $10.92
------ ------
Total return 33.34% (3.19%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $2,602 $ 238
Ratios to average net
assets
Expenses++ 0.71% 0.75%+
Net investment loss (0.14%) (0.10%)+
Portfolio turnover rate 147% 132%
</TABLE>
(a) For the period from January 22, 1998 (commencement of class operations) to
September 30, 1998.
(b) For the period from June 30, 1999 (commencement of class operations) to
September 30, 1999.
# Net investment income per share is based on average shares outstanding
during the period.
* Excluding applicable sales charges.
++ Ratio of expenses to average net assets excludes expense reductions and in-
cludes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
52
<PAGE>
EVERGREEN
Masters Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended
September 30,
-------------------
2000 # 1999 (a)
<S> <C> <C>
CLASS A SHARES
Net asset value, beginning of period $ 10.05 $ 10.00
-------- --------
Income from investment operations
Net investment loss (0.10) (0.05)
Net realized and unrealized gains on securities 3.27 0.10
-------- --------
Total from investment operations 3.17 0.05
-------- --------
Net asset value, end of period $ 13.22 $ 10.05
-------- --------
Total return* 31.54% 0.50%
Ratios and supplemental data
Net assets, end of period (thousands) $192,473 $167,848
Ratios to average net assets
Expenses++ 1.58% 1.72%+
Net investment loss (0.78%) (0.70%)+
Portfolio turnover rate 111% 63%
<CAPTION>
Year Ended
September 30,
-------------------
2000 # 1999 (a)
<S> <C> <C>
CLASS B SHARES
Net asset value, beginning of period $ 10.01 $ 10.00
-------- --------
Income from investment operations
Net investment loss (0.19) (0.09)
Net realized and unrealized gains on securities 3.25 0.10
-------- --------
Total from investment operations 3.06 0.01
-------- --------
Net asset value, end of period $ 13.07 $ 10.01
-------- --------
Total return* 30.57% 0.10%
Ratios and supplemental data
Net assets, end of period (thousands) $133,637 $ 82,979
Ratios to average net assets
Expenses++ 2.34% 2.47%+
Net investment loss (1.54%) (1.48%)+
Portfolio turnover rate 111% 63%
</TABLE>
(a) For the period from December 31, 1998 (commencement of class operations)
to September 30, 1999.
* Excluding applicable sales charges.
# Net investment income per share is based on average shares outstanding
during the period.
++ Ratio of expenses to average net assets excludes expense reductions and in-
cludes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
53
<PAGE>
EVERGREEN
Masters Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------
2000 # 1999 (a)
<S> <C> <C>
CLASS C SHARES
Net asset value,
beginning of period $ 10.00 $ 10.00
------------ -----------
Income from investment
operations
Net investment loss (0.19) (0.09)
Net realized and
unrealized gains on
securities 3.24 0.09
------------ -----------
Total from investment
operations 3.05 0.00
------------ -----------
Net asset value, end of
period $ 13.05 $ 10.00
------------ -----------
Total return* 30.50% 0.00%
Ratios and supplemental
data
Net assets, end of
period (thousands) $ 11,387 $ 4,837
Ratios to average net
assets
Expenses++ 2.35% 2.47%+
Net investment loss (1.55%) (1.48%)+
Portfolio turnover rate 111% 63%
<CAPTION>
Year Ended September 30,
----------------------------
2000 # 1999 (a)
<S> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $ 10.07 $ 10.00
------------ -----------
Income from investment
operations
Net investment loss (0.07) (0.01)
Net realized and
unrealized gains on
securities 3.27 0.08
------------ -----------
Total from investment
operations 3.20 0.07
------------ -----------
Net asset value, end of
period $ 13.27 $ 10.07
------------ -----------
Total return 31.78% 0.70%
Ratios and supplemental
data
Net assets, end of
period (thousands) $ 4,479 $ 3,348
Ratios to average net
assets
Expenses++ 1.34% 1.50%+
Net investment loss (0.53%) (0.43%)+
Portfolio turnover rate 111% 63%
</TABLE>
(a) For the period from December 31, 1998 (commencement of class operations) to
September 30, 1999.
* Excluding applicable sales charges.
# Net investment income per share is based on average shares outstanding dur-
ing the period.
++ Ratio of expenses to average net assets excludes expense reductions and in-
cludes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
54
<PAGE>
EVERGREEN
Omega Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended
Year Ended September 30, December 31,
----------------------------------------- -------------------
2000 # 1999 # 1998 # 1997 (a)# 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 26.82 $ 21.50 $ 22.69 $ 19.52 $ 19.56 $ 15.54
-------- -------- -------- -------- -------- --------
Income from investment
operations
Net investment loss (0.22) (0.17) (0.09) (0.03) (0.06) 0
Net realized and
unrealized gains on
securities 13.32 8.10 1.03 4.05 2.15 5.58
-------- -------- -------- -------- -------- --------
Total from investment
operations 13.10 7.93 0.94 4.02 2.09 5.58
-------- -------- -------- -------- -------- --------
Distributions to
shareholders from
Net realized gains (0.99) (2.61) (2.13) (0.85) (2.13) (1.56)
-------- -------- -------- -------- -------- --------
Total distributions to
shareholders (0.99) (2.61) (2.13) (0.85) (2.13) (1.56)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period $ 38.93 $ 26.82 $ 21.50 $ 22.69 $ 19.52 $ 19.56
-------- -------- -------- -------- -------- --------
Total return* 49.83% 39.56% 4.43% 21.45% 11.31% 36.94%
Ratios and supplemental
data
Net assets, end of
period (thousands) $865,958 $371,361 $156,220 $162,847 $154,825 $135,079
Ratios to average net
assets
Expenses++ 1.18% 1.30% 1.32% 1.32%+ 1.33% 1.38%
Net investment loss (0.59%) (0.66%) (0.38%) (0.20%)+ (0.29%) 0.00%
Portfolio turnover rate 152% 120% 159% 76% 173% 159%
</TABLE>
<TABLE>
<CAPTION>
Year Ended September 30, Year Ended December 31,
------------------------------------------- -------------------------
2000 # 1999 # 1998 # 1997 (a)# 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 24.99 $ 20.32 $ 21.71 $ 18.83 $ 19.10 $ 15.34
---------- -------- -------- -------- ----------- -----------
Income from investment
operations
Net investment loss (0.46) (0.34) (0.25) (0.15) (0.17) (0.09)
Net realized and
unrealized gains on
securities 12.38 7.62 0.99 3.88 2.03 5.41
---------- -------- -------- -------- ----------- -----------
Total from investment
operations 11.92 7.28 0.74 3.73 1.86 5.32
---------- -------- -------- -------- ----------- -----------
Distributions to
shareholders from
Net realized gains (0.99) (2.61) (2.13) (0.85) (2.13) (1.56)
---------- -------- -------- -------- ----------- -----------
Total distributions to
shareholders (0.99) (2.61) (2.13) (0.85) (2.13) (1.56)
---------- -------- -------- -------- ----------- -----------
Net asset value, end of
period $ 35.92 $ 24.99 $ 20.32 $ 21.71 $ 18.83 $ 19.10
---------- -------- -------- -------- ----------- -----------
Total return* 48.72% 38.57% 3.64% 20.68% 10.31% 35.70%
Ratios and supplemental
data
Net assets, end of
period (thousands) $1,349,647 $372,956 $114,068 $110,349 $ 89,921 $ 71,636
Ratios to average net
assets
Expenses++ 1.94% 2.05% 2.10% 2.18%+ 2.20% 2.29%
Net investment loss (1.35%) (1.41%) (1.16%) (1.06%)+ (1.15%) (0.94%)
Portfolio turnover rate 152% 120% 159% 76% 173% 159%
</TABLE>
(a) For the nine months ended September 30, 1997. The Fund changed its fiscal
year end from December 31 to September 30, effective September 30, 1997.
# Net investment income per share is based on average shares outstanding dur-
ing the period.
* Excluding applicable sales charges.
++ Ratio of expenses to average net assets excludes expense reductions and in-
cludes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
55
<PAGE>
EVERGREEN
Omega Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30, Year Ended December 31,
----------------------------------------- -----------------------
2000 # 1999 # 1998 # 1997 (a) # 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value,
beginning of period $ 25.05 $ 20.37 $ 21.74 $ 18.86 $ 19.13 $ 15.37
-------- ------- ------- ------- ----------- -----------
Income from investment
operations
Net investment loss (0.47) (0.33) (0.25) (0.15) (0.18) (0.13)
Net realized and
unrealized gains on
securities 12.42 7.62 1.01 3.88 2.04 5.45
-------- ------- ------- ------- ----------- -----------
Total from investment
operations 11.95 7.29 0.76 3.73 1.86 5.32
-------- ------- ------- ------- ----------- -----------
Distributions to
shareholders from
Net realized gains (0.99) (2.61) (2.13) (0.85) (2.13) (1.56)
-------- ------- ------- ------- ----------- -----------
Total distributions to
shareholders (0.99) (2.61) (2.13) (0.85) (2.13) (1.56)
-------- ------- ------- ------- ----------- -----------
Net asset value, end of
period $ 36.01 $ 25.05 $ 20.37 $ 21.74 $ 18.86 $ 19.13
-------- ------- ------- ------- ----------- -----------
Total return* 48.73% 38.52% 3.73% 20.65% 10.29% 35.62%
Ratios and supplemental
data
Net assets, end of
period (thousands) $285,022 $26,929 $13,752 $16,067 $ 17,628 $ 13,963
Ratios to average net
assets
Expenses++ 1.95% 2.04% 2.11% 2.18%+ 2.21% 2.30%
Net investment loss (1.37%) (1.40%) (1.16%) (1.05%)+ (1.17%) (0.91%)
Portfolio turnover rate 152% 120% 159% 76% 173% 159%
</TABLE>
<TABLE>
<CAPTION>
Year Ended September 30,
--------------------------------------
2000 # 1999 # 1998 # 1997 (b) #
<S> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value, beginning of period $ 26.96 $21.54 $22.68 $19.98
------- ------ ------ ------
Income from investment operations
Net investment loss (0.13) (0.11) (0.02) (0.01)
Net realized and unrealized gains on
securities 13.39 8.14 1.01 3.56
------- ------ ------ ------
Total from investment operations 13.26 8.03 0.99 3.55
------- ------ ------ ------
Distributions to shareholders from
Net realized gains (0.99) (2.61) (2.13) (0.85)
------- ------ ------ ------
Total distributions to shareholders (0.99) (2.61) (2.13) (0.85)
------- ------ ------ ------
Net asset value, end of period $ 39.23 $26.96 $21.54 $22.68
------- ------ ------ ------
Total return 50.17% 39.99% 4.67% 18.60%
Ratios and supplemental data
Net assets, end of period (thousands) $23,520 $4,586 $ 571 $ 5
Ratios to average net assets
Expenses++ 0.94% 1.05% 1.11% 1.24%+
Net investment loss (0.36%) (0.42%) (0.09%) (0.21%)+
Portfolio turnover rate 152% 120% 159% 76%
</TABLE>
(a) For the nine months ended September 30, 1997. The Fund changed its fiscal
year end from December 31 to September 30, effective September 30, 1997.
(b) For the period from January 13, 1997 (commencement of class operations) to
September 30, 1997.
# Net investment income per share is based on average shares outstanding dur-
ing the period.
* Excluding applicable sales charges.
++ Ratio of expenses to average net assets excludes expense reductions and in-
cludes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
56
<PAGE>
EVERGREEN
Small Company Growth Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------
2000 # 1999 # 1998 (a) #
<S> <C> <C> <C>
CLASS A SHARES
Net asset value, beginning of period $ 6.47 $5.72 $ 7.75
------ ----- ------
Income from investment operations
Net investment loss (0.04) (0.04) (0.04)
Net realized and unrealized gains or losses on
securities 4.14 1.97 (1.99)
------ ----- ------
Total from investment operations 4.10 1.93 (2.03)
------ ----- ------
Distributions to shareholders from
Net realized gains 0 (1.18) 0
------ ----- ------
Total distributions to shareholders 0 (1.18) 0
------ ----- ------
Net asset value, end of period $10.57 $6.47 $ 5.72
------ ----- ------
Total return* 63.37% 39.74% (26.19%)
Ratios and supplemental data
Net assets, end of period (millions) $1,110 $ 712 $ 589
Ratios to average net assets
Expenses++ 1.01% 1.17% 1.15%+
Net investment loss (0.46%) (0.63%) (0.50%)+
Portfolio turnover rate 220% 125% 97%
</TABLE>
<TABLE>
<CAPTION>
Year Ended September 30, Year Ended May 31,
-------------------------------------- ---------------------
2000 1999 # 1998 # 1997 (b) # 1997 1996
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 6.39 $ 5.69 $ 9.44 $ 8.44 $ 10.35 $ 8.62
------ ------ ------- ------ --------- ---------
Income from investment
operations
Net investment loss (0.11) (0.07) (0.07) (0.04) (0.11) (0.13)
Net realized and
unrealized gains or
losses on securities 4.07 1.95 (2.90) 1.74 (0.78) 2.87
------ ------ ------- ------ --------- ---------
Total from investment
operations 3.96 1.88 (2.97) 1.70 (0.89) 2.74
------ ------ ------- ------ --------- ---------
Distributions to
shareholders from
Net realized gains 0 (1.18) (0.78) (0.70) (1.02) (1.01)
------ ------ ------- ------ --------- ---------
Total distributions to
shareholders 0 (1.18) (0.78) (0.70) (1.02) (1.01)
------ ------ ------- ------ --------- ---------
Net asset value, end of
period $10.35 $ 6.39 $ 5.69 $ 9.44 $ 8.44 $ 10.35
------ ------ ------- ------ --------- ---------
Total return* 61.97% 38.95% (33.91%) 21.43% (8.61%) 33.03%
Ratios and supplemental
data
Net assets, end of
period (millions) $ 81 $ 107 $ 200 $1,546 $ 1,407 $ 2,006
Ratios to average net
assets
Expenses++ 1.77% 1.93% 1.36% 1.77%+ 1.75% 1.73%
Net investment loss (1.23%) (1.35%) (0.89%) (1.43%)+ (1.32%) (1.34%)
Portfolio turnover rate 220% 125% 97% 28% 48% 94%
</TABLE>
(a) For the period from January 20, 1998 (commencement of class operations) to
September 30, 1998.
(b) For the four months ended September 30, 1997. The Fund changed its fiscal
year end from May 31 to September 30, effective September 30, 1997.
# Net investment income per share is based on average shares outstanding dur-
ing the period.
* Excluding applicable sales charges.
++ Ratio of expenses to average net assets excludes expense reductions and in-
cludes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
57
<PAGE>
EVERGREEN
Small Company Growth Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------
2000 1999 # 1998 (a) #
<S> <C> <C> <C>
CLASS C SHARES
Net asset value, beginning of period $ 6.39 $ 5.70 $ 7.73
------ ------ -------
Income from investment operations
Net investment loss (0.12) (0.07) (0.10)
Net realized and unrealized gains or losses on
securities 4.09 1.94 (1.93)
------ ------ -------
Total from investment operations 3.97 1.87 (2.03)
------ ------ -------
Distributions to shareholders from
Net realized gains 0 (1.18) 0
------ ------ -------
Total distributions to shareholders 0 (1.18) 0
------ ------ -------
Net asset value, end of period $10.36 $ 6.39 $ 5.70
------ ------ -------
Total return* 62.13% 38.65% (26.26%)
Ratios and supplemental data
Net assets, end of period (millions) $ 9 $ 2 $ 4
Ratios to average net assets
Expenses++ 1.76% 1.93% 1.90%+
Net investment loss (1.20%) (1.36%) (1.32%)+
Portfolio turnover rate 220% 125% 97%
</TABLE>
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------
2000 1999 # 1998 (a) #
<S> <C> <C> <C>
CLASS Y SHARES
Net asset value, beginning of period $ 6.51 $5.74 $ 7.73
------ ----- ------
Income from investment operations
Net investment loss (0.02) (0.03) (0.02)
Net realized and unrealized gains or losses on
securities 4.15 1.98 (1.97)
------ ----- ------
Total from investment operations 4.13 1.95 (1.99)
------ ----- ------
Distributions to shareholders from
Net realized gains 0 (1.18) 0
------ ----- ------
Total distributions to shareholders 0 (1.18) 0
------ ----- ------
Net asset value, end of period $10.64 $6.51 $ 5.74
------ ----- ------
Total return 63.44% 40.01% (25.74%)
Ratios and supplemental data
Net assets, end of period (millions) $ 5 $ 2 $ 1
Ratios to average net assets
Expenses++ 0.77% 0.92% 0.91%+
Net investment loss (0.21%) (0.42%) (0.33%)+
Portfolio turnover rate 220% 125% 97%
</TABLE>
(a) For the period from January 26, 1998 (commencement of class operations) to
September 30, 1998.
# Net investment income per share is based on average shares outstanding dur-
ing the period.
* Excluding applicable sales charges.
++ Ratio of expenses to average net assets excludes expense reductions and in-
cludes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
58
<PAGE>
EVERGREEN
Stock Selector Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30, Year Ended June 30,
--------------------------- -------------------------------
Period Ended
2000 1999 1998 (a) 1998 1997 1996 (b) (c) October 31, 1995 (d)
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 20.06 $ 18.34 $ 22.43 $ 21.13 $ 17.28 $ 17.08 $15.00
------- ------- ------- ------- ------- ------- ------
Income from investment
operations
Net investment income
(loss) (0.01) (0.02) 0 (0.02) 0.07 0.12 0.18
Net realized and
unrealized gains or
losses on securities
and futures contracts 2.47 5.86 (4.09) 4.24 5.32 1.49 2.87
------- ------- ------- ------- ------- ------- ------
Total from investment
operations 2.46 5.84 (4.09) 4.22 5.39 1.61 3.05
------- ------- ------- ------- ------- ------- ------
Distributions to
shareholders from
Net investment income 0 (0.01) 0 0 (0.07) (0.11) (0.17)
Net realized gains (4.83) (4.11) 0 (2.92) (1.47) (1.30) (0.80)
------- ------- ------- ------- ------- ------- ------
Total distributions to
shareholders (4.83) (4.12) 0 (2.92) (1.54) (1.41) (0.97)
------- ------- ------- ------- ------- ------- ------
Net asset value, end of
period $ 17.69 $ 20.06 $ 18.34 $ 22.43 $ 21.13 $ 17.28 $17.08
------- ------- ------- ------- ------- ------- ------
Total return* 12.31% 35.15% (18.23%) 21.54% 32.74% 19.11% 21.94%
Ratios and supplemental
data
Net assets, end of
period (thousands) $22,908 $20,930 $15,910 $20,509 $16,043 $11,178 $6,591
Ratios to average net
assets
Expenses++ 1.08% 1.10% 1.18%+ 1.25% 1.23% 1.22%+ 1.34%
Net investment income
(loss) (0.08%) (0.16%) (0.06%)+ (0.10%) 0.38% 0.89%+ 1.23%
Portfolio turnover rate 67% 85% 28% 61% 79% 114% 119%
</TABLE>
<TABLE>
<CAPTION>
Year Ended September 30,
-------------------------- Period Ended
2000 1999 1998 (a) June 30, 1998 (e) (f)
<S> <C> <C> <C> <C>
CLASS B SHARES
Net asset value, beginning
of period $19.77 $18.23 $22.33 $22.76
------ ------ ------ ------
Income from investment
operations
Net investment loss (0.13) (0.06) (0.03) (0.09)
Net realized and unrealized
gains or losses on
securities and futures
contracts 2.40 5.71 (4.07) 2.90
------ ------ ------ ------
Total from investment
operations 2.27 5.65 (4.10) 2.81
------ ------ ------ ------
Distributions to
shareholders from
Net realized gains (4.83) (4.11) 0 (3.24)
------ ------ ------ ------
Total distributions to
shareholders (4.83) (4.11) 0 (3.24)
------ ------ ------ ------
Net asset value, end of
period $17.21 $19.77 $18.23 $22.33
------ ------ ------ ------
Total return* 11.42% 34.18% (18.36%) 14.38%
Ratios and supplemental
data
Net assets, end of period
(thousands) $2,704 $2,376 $ 413 $ 349
Ratios to average net
assets
Expenses++ 1.84% 1.82% 1.94%+ 2.00%+
Net investment loss (0.84%) (0.86%) (0.76%)+ (0.85%)+
Portfolio turnover rate 67% 85% 28% 61%
</TABLE>
(a) For the three months ended September 30, 1998. The Fund changed its fiscal
year end from June 30 to September 30, effective September 30, 1998. Effec-
tive the close of business July 28, 1998, the Stock Selector Fund acquired
all the assets and certain liabilities of the CoreFund Core Equity Fund
through a tax free exchange of shares. The operating results of the
CoreFund have been carried forward for prior periods.
(b) For the eight months ended June 30, 1996. The Fund changed its fiscal year
end from October 31 to June 30, effective June 30, 1996.
(c) On April 15, 1996, the Conestoga Equity Fund was acquired by CoreFunds,
Inc. At that time, the Retail Class Shares of the Fund were exchanged for
Class A Shares.
(d) On February 21, 1995, the Shares of the Fund were redesignated as either
Retail or Institutional Shares. On that date, the Fund's net investment in-
come, expenses and distributions for the period November 1, 1994 through
February 20, 1995 were allocated to each class of Shares. The basis for the
allocation was the relative net assets of each class of Shares as of Febru-
ary 21, 1995. The results were combined with the results of operations and
distributions for each applicable class for the period February 21, 1995
through October 31, 1995. For the year ended October 31, 1995, the Finan-
cial Highlights' ratio of expenses, net investment income, total return,
and the per share investment activities and distributions reflect this al-
location.
(e) For the period from November 7, 1997 (commencement of class operations) to
June 30, 1998.
(f) Net realized gains per share adjusted to reflect a reverse stock split
which occurred on June 24, 1998.
* Excluding applicable sales charges.
++ Ratio of expenses to average net assets excludes expense reductions and in-
cludes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
59
<PAGE>
EVERGREEN
Stock Selector Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
-----------------------------
2000 1999 (a)
<S> <C> <C>
CLASS C SHARES
Net asset value, beginning of period $ 20.02 $ 21.58
------------ ------------
Income from investment operations
Net investment loss (0.12) (0.01)
Net realized and unrealized gains or losses on
securities and futures contracts 2.43 (1.55)
------------ ------------
Total from investment operations 2.31 (1.56)
------------ ------------
Distributions to shareholders from
Net realized gains (4.83) 0
------------ ------------
Total distributions to shareholders (4.83) 0
------------ ------------
Net asset value, end of period $ 17.50 $ 20.02
------------ ------------
Total return* 11.49% (7.23%)
Ratios and supplemental data
Net assets, end of period (thousands) $ 409 $ 78
Ratios to average net assets
Expenses++ 1.84% 1.87%+
Net investment loss (0.82%) (0.78%)+
Portfolio turnover rate 67% 85%
</TABLE>
<TABLE>
<CAPTION>
Year Ended September 30, Year Ended June 30, Institutional Class
------------------------------ -------------------------------- Year Ended
2000 1999 1998 (b) 1998 1997 1996 (c) (d) October 31, 1995 (e)
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $ 20.11 $ 18.35 $ 22.43 $ 21.11 $ 17.26 $ 17.07 $ 15.00
---------- -------- -------- -------- -------- -------- --------
Income from investment
operations
Net investment income 0.03 0.02 0.01 0.04 0.12 0.14 0.19
Net realized and
unrealized gains or
losses on securities
and futures contracts 2.48 5.87 (4.09) 4.24 5.32 1.49 2.87
---------- -------- -------- -------- -------- -------- --------
Total from investment
operations 2.51 5.89 (4.08) 4.28 5.44 1.63 3.06
---------- -------- -------- -------- -------- -------- --------
Distributions to
shareholders from
Net investment income (0.01) (0.02) 0 (0.04) (0.12) (0.14) (0.19)
Net realized gains (4.83) (4.11) 0 (2.92) (1.47) (1.30) (0.80)
---------- -------- -------- -------- -------- -------- --------
Total distributions to
shareholders (4.84) (4.13) 0 (2.96) (1.59) (1.44) (0.99)
---------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period $ 17.78 $ 20.11 $ 18.35 $ 22.43 $ 21.11 $ 17.26 $ 17.07
---------- -------- -------- -------- -------- -------- --------
Total return 12.62% 35.49% (18.19%) 21.90% 33.10% 19.24% 22.00%
Ratios and supplemental
data
Net assets, end of
period (thousands) $1,062,608 $476,928 $424,992 $563,987 $515,015 $414,824 $378,352
Ratios to average net
assets
Expenses++ 0.81% 0.85% 0.93%+ 1.00% 0.98% 0.97%+ 1.05%+
Net investment income 0.24% 0.09% 0.19%+ 0.15% 0.63% 1.15%+ 1.44%+
Portfolio turnover rate 67% 85% 28% 61% 79% 114% 119%
</TABLE>
(a) For the period from June 30, 1999 (commencement of class operations) to
September 30, 1999.
(b) For the three months ended September 30, 1998. The Fund changed its fiscal
year end from June 30 to September 30, effective September 30, 1998. Effec-
tive the close of business July 28, 1998, the Stock Selector Fund acquired
all the assets and certain liabilities of the CoreFund Core Equity Fund
through a tax free exchange of shares. The operating results of the
CoreFund have been carried forward for prior periods.
(c) For the eight months ended June 30, 1996. The Fund changed its fiscal year
end from October 31 to June 30, effective June 30, 1996.
(d) On April 15, 1996, the Conestoga Equity Fund was acquired by CoreFunds,
Inc. At that time the Institutional Class Shares of the Fund were exchanged
for Class Y Shares.
(e) On February 21, 1995, the Shares of the Fund were redesignated as either
Retail or Institutional Shares. On that date, the Fund's net investment in-
come, expenses and distributions for the period November 1, 1994 through
February 20, 1995 were allocated to each class of Shares. The basis for the
allocation was the relative net assets of each class of Shares as of Febru-
ary 21, 1995. The results were combined with the results of operations and
distributions for each applicable class for the period February 21, 1995
through October 31, 1995. For the year ended October 31, 1995, the Finan-
cial Highlights' ratio of expenses, net investment income, total return,
and the per share investment activities and distributions reflect this al-
location.
* Excluding applicable sales charges.
++ Ratio of expenses to average net assets excludes expense reductions and in-
cludes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
60
<PAGE>
EVERGREEN
Stock Selector Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Period Ended
September 30, 2000 (a)
<S> <C>
CLASS IS SHARES
Net asset value, beginning of period $19.83
------
Income from investment operations
Net investment income 0.01
Net realized and unrealized gains or losses on
securities and futures contracts 0.34
------
Total from investment operations 0.35
------
Distributions to shareholders from
Net realized gains (2.49)
------
Total distributions to shareholders (2.49)
------
Net asset value, end of period $17.69
------
Total return 1.56%
Ratios and supplemental data
Net assets, end of period (thousands) $1,435
Ratios to average net assets
Expenses++ 1.00%+
Net investment income 0.21%+
Portfolio turnover rate 67%
</TABLE>
(a) For the period from June 30, 2000 (commencement of class operations) to
September 30, 2000.
++ Ratio of expenses to average net assets excludes expense reductions and in-
cludes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
61
<PAGE>
EVERGREEN
Tax Strategic Equity Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------
2000 # 1999 # 1998 (a) #
<S> <C> <C> <C>
CLASS A SHARES
Net asset value, beginning of period $14.01 $10.65 $10.11
------ ------ ------
Income from investment operations
Net investment loss (0.07) (0.03) 0
Net realized and unrealized gains on securities 1.84 3.41 0.54
------ ------ ------
Total from investment operations 1.77 3.38 0.54
------ ------ ------
Distributions to shareholders from
Net investment income 0 (0.02) 0
------ ------ ------
Net asset value, end of period $15.78 $14.01 $10.65
------ ------ ------
Total return* 12.63% 31.69% 5.34%
Ratios and supplemental data
Net assets, end of period (thousands) $8,157 $5,055 $ 10
Ratios to average net assets
Expenses++ 1.63% 1.58% 1.54%+
Net investment income (loss) (0.42%) (0.25%) 9.12%+
Portfolio turnover rate 29% 90% 0%
</TABLE>
<TABLE>
<CAPTION>
Year Ended September 30,
-----------------------------
2000 # 1999 (b) #
<S> <C> <C>
CLASS B SHARES
Net asset value, beginning of period $ 13.94 $ 10.26
------------ -----------
Income from investment operations
Net investment loss (0.19) (0.13)
Net realized and unrealized gains on securities 1.82 3.83
------------ -----------
Total from investment operations 1.63 3.70
------------ -----------
Distributions to shareholders from
Net investment income 0 (0.02)
------------ -----------
Net asset value, end of period $ 15.57 $ 13.94
------------ -----------
Total return* 11.69% 36.01%
Ratios and supplemental data
Net assets, end of period (thousands) $ 13,346 $ 7,882
Ratios to average net assets
Expenses++ 2.39% 2.33%+
Net investment loss (1.17%) (1.03%)+
Portfolio turnover rate 29% 90%
</TABLE>
(a) For the period from September 4, 1998 (commencement of class operations) to
September 30, 1998.
(b) For the period from October 14, 1998 (commencement of class operations) to
September 30, 1999.
# Net investment income per share is based on average shares outstanding dur-
ing the period.
* Excluding applicable sales charges.
++ The ratio of expenses to average net assets excludes expense reductions and
includes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
62
<PAGE>
EVERGREEN
Tax Strategic Equity Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended
September 30,
-------------------
2000 # 1999 (a) #
<S> <C> <C>
CLASS C SHARES
Net asset value, beginning of period $13.96 $12.51
------ ------
Income from investment operations
Net investment loss (0.19) (0.14)
Net realized and unrealized gains on securities 1.82 1.61
------ ------
Total from investment operations 1.63 1.47
------ ------
Distributions to shareholders from
Net investment income 0 (0.02)
------ ------
Net asset value, end of period $15.59 $13.96
------ ------
Total return* 11.68% 11.71%
Ratios and supplemental data
Net assets, end of period (thousands) $5,063 $2,162
Ratios to average net assets
Expenses++ 2.40% 2.33%+
Net investment loss (1.19%) (0.98%)+
Portfolio turnover rate 29% 90%
</TABLE>
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------
2000 # 1999 # 1998 (b) #
<S> <C> <C> <C>
CLASS Y SHARES
Net asset value, beginning of period $14.08 $10.65 $10.00
------ ------ ------
Income from investment operations
Net investment loss (0.02) 0 0
Net realized and unrealized gains on securities 1.83 3.45 0.65
------ ------ ------
Total from investment operations 1.81 3.45 0.65
------ ------ ------
Distributions to shareholders from
Net investment income 0 (0.02) 0
------ ------ ------
Net asset value, end of period $15.89 $14.08 $10.65
------ ------ ------
Total return 12.86% 32.34% 6.50%
Ratios and supplemental data
Net assets, end of period (thousands) $1,097 $2,454 $3,629
Ratios to average net assets
Expenses++ 1.36% 1.32% 1.30%+
Net investment loss (0.14%) (0.01%) 8.87%+
Portfolio turnover rate 29% 90% 0%
</TABLE>
(a) For the period from November 4, 1998 (commencement of class operations) to
September 30, 1999.
(b) For the period from September 1, 1998 (commencement of class operations) to
September 30, 1998.
# Net investment income is based on average shares outstanding during the pe-
riod.
* Excluding applicable sales charges.
++ The ratio of expenses to average net assets excludes expense reductions and
includes fee waivers.
+ Annualized.
See Combined Notes to Financial Statements.
63
<PAGE>
EVERGREEN
Aggressive Growth Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 98.3%
CONSUMER DISCRETIONARY - 6.8%
Automobiles - 1.5%
Harley-Davidson, Inc. ................................... 150,000 $ 7,181,250
-----------
Media - 0.3%
Scholastic Corp. *....................................... 20,000 1,591,250
-----------
Specialty Retail - 5.0%
Bed Bath & Beyond, Inc. *................................ 340,000 8,292,812
Best Buy Co., Inc. *..................................... 100,000 6,362,500
Home Depot, Inc. ........................................ 57,500 3,051,094
RadioShack Corp. ........................................ 100,000 6,462,500
-----------
24,168,906
-----------
ENERGY - 11.0%
Energy Equipment & Services - 6.2%
Cal Dive Intl., Inc. *................................... 113,400 6,485,063
ENSCO Intl., Inc. ....................................... 120,000 4,590,000
Nabors Inds., Inc. *..................................... 140,000 7,336,000
Rowan Co., Inc. *........................................ 160,000 4,640,000
Santa Fe Intl. Corp. .................................... 150,000 6,759,375
-----------
29,810,438
-----------
Oil & Gas - 4.8%
Anadarko Petroleum Corp. ................................ 100,000 6,646,000
Apache Corp. ............................................ 110,000 6,503,750
Devon Energy Corp. ...................................... 165,000 9,924,750
-----------
23,074,500
-----------
FINANCIALS - 4.9%
Diversified Financials - 4.9%
Citigroup, Inc. ......................................... 148,733 8,040,878
Goldman Sachs Group, Inc. ............................... 40,000 4,557,500
Lehman Brothers Holdings, Inc. .......................... 40,000 5,910,000
Stilwell Finl., Inc. .................................... 120,000 5,220,000
-----------
23,728,378
-----------
HEALTH CARE - 21.7%
Biotechnology - 3.2%
Abgenix, Inc. ........................................... 50,000 4,040,625
Biovail Corp. ........................................... 140,000 11,401,250
-----------
15,441,875
-----------
Health Care Equipment & Supplies - 6.3%
Alza Corp. *............................................. 145,000 12,542,500
Medtronic, Inc. ......................................... 90,000 4,663,125
Minimed, Inc. ........................................... 150,000 13,406,250
-----------
30,611,875
-----------
</TABLE>
64
<PAGE>
EVERGREEN
Aggressive Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - continued
Health Care Providers & Services - 1.6%
Bindley Western Inds., Inc. ............................. 240,000 $ 7,680,000
-----------
Pharmaceuticals - 10.6%
Alpharma, Inc., Class A.................................. 125,000 7,640,625
American Home Products Corp. ............................ 150,000 8,484,375
King Pharmaceuticals, Inc. .............................. 150,000 5,015,625
Mylan Laboratories, Inc. ................................ 480,000 12,930,000
Pharmacia Corp. ......................................... 167,500 10,081,406
Watson Pharmaceuticals, Inc. *........................... 110,000 7,136,250
-----------
51,288,281
-----------
INDUSTRIALS - 6.1%
Aerospace & Defense - 1.3%
B.F. Goodrich Co. ....................................... 80,000 3,135,000
Hexcel Corp. ............................................ 250,000 3,343,750
-----------
6,478,750
-----------
Commercial Services & Supplies - 2.3%
Apollo Group, Inc. *..................................... 154,900 6,176,638
Devry, Inc. *............................................ 135,200 5,086,900
-----------
11,263,538
-----------
Industrial Conglomerates - 2.5%
Tyco Intl., Ltd. ........................................ 230,000 11,931,250
-----------
INFORMATION TECHNOLOGY - 45.6%
Communications Equipment - 13.2%
Alteon Websystems, Inc. ................................. 25,000 2,709,766
Audio Codes, Ltd. ....................................... 60,000 5,107,500
Brocade Communications Sys., Inc. ....................... 11,000 2,596,000
CIENA Corp. *............................................ 60,000 7,368,750
Cisco Sys., Inc. *....................................... 195,000 10,773,750
Copper Mountain Networks, Inc. .......................... 110,000 4,125,000
Extreme Networks, Inc. .................................. 60,000 6,870,000
Finisar Corp. ........................................... 100,000 4,837,500
Juniper Networks, Inc. .................................. 15,000 3,284,062
Nuance Communications, Inc. *............................ 44,800 5,451,600
Plantronics, Inc. ....................................... 120,000 4,560,000
SonicWall, Inc. ......................................... 100,000 2,850,000
Sycamore Networks, Inc. *................................ 27,700 2,991,600
-----------
63,525,528
-----------
Computers & Peripherals - 7.3%
EMC Corp. *.............................................. 135,000 13,381,875
Network Appliance, Inc. ................................. 22,000 2,802,250
NVIDIA Corp. ............................................ 175,000 14,328,125
</TABLE>
65
<PAGE>
EVERGREEN
Aggressive Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Computers & Peripherals - continued
QLogic Corp. ............................................ 55,387 $ 4,874,056
-----------
35,386,306
-----------
Electronic Equipment & Instruments - 6.6%
Cree Research, Inc. *.................................... 60,000 6,975,000
Oak Technology, Inc. .................................... 200,000 5,475,000
Sandisk Corp. ........................................... 115,900 7,736,325
Sanmina Corp. *.......................................... 30,000 2,808,750
Waters Corp. *........................................... 100,000 8,900,000
-----------
31,895,075
-----------
Internet Software & Services - 4.4%
Ariba, Inc. ............................................. 30,000 4,297,969
Check Point Software Technologies, Ltd. *................ 55,000 8,662,500
Commerce One, Inc. ...................................... 40,000 3,140,000
VeriSign, Inc. .......................................... 26,000 5,266,625
-----------
21,367,094
-----------
Semiconductor Equipment & Products - 3.6%
Atmel Corp. ............................................. 190,000 2,885,625
Broadcom Corp. *......................................... 15,000 3,656,250
Cypress Semiconductor Corp. *............................ 105,000 4,364,062
Micron Tech., Inc. *..................................... 91,000 4,186,000
PMC-Sierra, Inc. ........................................ 11,500 2,475,375
-----------
17,567,312
-----------
Software - 10.5%
I2 Technologies, Inc. ................................... 20,000 3,741,250
Interwoven, Inc. ........................................ 50,000 5,653,125
Mercury Interactive Corp. *.............................. 45,000 7,053,750
Micromuse, Inc. ......................................... 15,000 3,014,062
Microsoft Corp. *........................................ 70,000 4,221,875
Peregrine Sys., Inc. *................................... 80,000 1,515,000
Rational Software Corp. *................................ 90,000 6,243,750
Sapient Corp. *.......................................... 71,000 2,888,813
Siebel Sys., Inc. *...................................... 50,000 5,565,625
Veritas Software Corp. *................................. 75,000 10,650,000
-----------
50,547,250
-----------
TELECOMMUNICATION SERVICES - 0.2%
Electronic Equipment & Instruments - 0.2%
Inrange Technologies Corp. .............................. 17,000 901,000
-----------
UTILITIES - 2.0%
Electric Utilities - 1.0%
AES Corp. *.............................................. 70,000 4,795,000
-----------
</TABLE>
66
<PAGE>
EVERGREEN
Aggressive Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
UTILITIES - continued
Gas Utilities - 1.0%
El Paso Energy Corp. ................................ 80,000 $ 4,930,000
------------
Total Common Stocks (cost $362,004,608)............ 475,164,856
------------
<CAPTION>
Shares Value
<S> <C> <C>
SHORT-TERM INVESTMENTS - 11.7%
MUTUAL FUND SHARES - 11.7%
Evergreen Select Money Market Fund o ................ 18,064,126 18,064,126
Navigator Prime Portfolio pp ........................ 38,713,146 38,713,146
------------
Total Short-Term Investments (cost $56,777,272)............... 56,777,272
------------
Total Investments - (cost $418,781,880) - 110.0%.................. 531,942,128
Other Assets and Liabilities - (10.0%)............................ (48,447,440)
------------
Net Assets - 100.0%............................................... $483,494,688
============
</TABLE>
See Combined Notes to Schedules of Investments.
67
<PAGE>
EVERGREEN
Capital Growth Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 88.8%
CONSUMER DISCRETIONARY - 6.4%
Household Durables - 2.8%
Newell Rubbermaid, Inc. ................................. 577,200 $13,167,375
-----------
Media - 2.8%
Interpublic Group of Cos., Inc. ......................... 381,400 12,991,437
-----------
Multi-line Retail - 0.8%
May Dept. Stores Co. .................................... 171,500 3,515,750
-----------
CONSUMER STAPLES - 11.7%
Food & Drug Retailing - 4.7%
SYSCO Corp. ............................................. 474,700 21,984,544
-----------
Personal Products - 2.9%
Kimberly-Clark Corp. *................................... 244,400 13,640,575
-----------
Tobacco - 4.1%
Philip Morris Co., Inc. ................................. 637,340 18,761,696
-----------
FINANCIALS - 16.0%
Banks - 8.8%
SouthTrust Corp. ........................................ 421,500 13,250,906
Wachovia Corp. .......................................... 58,000 3,287,875
Washington Mutual, Inc. ................................. 310,940 12,379,299
Wells Fargo Co. ......................................... 263,500 12,104,531
-----------
41,022,611
-----------
Diversified Financials - 7.2%
American Express Co. .................................... 248,400 15,090,300
Fannie Mae Co. .......................................... 169,300 12,104,950
Freddie Mac Corp. ....................................... 115,000 6,217,188
-----------
33,412,438
-----------
HEALTH CARE - 8.6%
Health Care Equipment & Supplies - 1.7%
Baxter Intl., Inc. ...................................... 99,250 7,921,391
-----------
Health Care Providers & Services - 3.6%
Tenet Healthcare Corp. *................................. 456,600 16,608,825
-----------
Pharmaceuticals - 3.3%
American Home Products Corp. ............................ 76,200 4,310,063
Bristol-Myers Squibb Co. ................................ 9,930 567,251
Johnson & Johnson........................................ 57,900 5,438,981
Schering-Plough Corp. ................................... 104,500 4,859,250
-----------
15,175,545
-----------
INDUSTRIALS - 26.1%
Aerospace & Defense - 2.0%
United Technologies Corp. ............................... 135,000 9,348,750
-----------
</TABLE>
68
<PAGE>
EVERGREEN
Capital Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Building Products - 1.9%
Masco Corp. ............................................. 476,250 $ 8,870,156
------------
Commercial Services & Supplies - 10.8%
Automatic Data Processing, Inc. ......................... 263,000 17,588,125
Computer Sciences Corp. *................................ 241,750 17,949,937
First Data Corp. ........................................ 376,600 14,710,938
------------
50,249,000
------------
Industrial Conglomerates - 7.8%
Danaher Corp. ........................................... 284,000 14,129,000
Tyco Intl., Ltd. ........................................ 421,400 21,860,125
------------
35,989,125
------------
Machinery - 3.2%
Illinois Tool Works, Inc. ............................... 266,000 14,862,750
------------
Road & Rail - 0.4%
Werner Enterprises, Inc. ................................ 142,562 1,675,104
------------
INFORMATION TECHNOLOGY - 9.9%
Communications Equipment - 1.5%
Lucent Technologies, Inc. ............................... 222,500 6,800,156
------------
Computers & Peripherals - 2.7%
Intl. Business Machines Corp. ........................... 113,000 12,712,500
------------
Electronic Equipment & Instruments - 2.9%
Solectron Corp. *........................................ 296,000 13,653,000
------------
Semiconductor Equipment & Products - 2.8%
Intel Corp. ............................................. 310,220 12,893,519
------------
MATERIALS - 2.9%
Chemicals - 2.9%
Sherwin Williams Co. .................................... 625,300 13,365,787
------------
TELECOMMUNICATION SERVICES - 5.0%
Diversified Telecommunication Services - 5.0%
Verizon Communications. ................................. 482,000 23,346,875
------------
UTILITIES - 2.2%
Electric Utilities - 2.2%
Duke Energy Corp. ....................................... 119,000 10,204,250
------------
Total Common Stocks (cost $335,400,550)................ 412,173,159
------------
UNIT INVESTMENT TRUST - 1.9%
FINANCIALS - 1.9%
Diversified Financials - 1.9%
S&P 500 Depositary Receipt (Spiders) (cost $9,352,157)... 62,000 8,904,750
------------
</TABLE>
69
<PAGE>
EVERGREEN
Capital Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
SHORT-TERM INVESTMENTS - 9.5%
MUTUAL FUND SHARES - 9.5%
Evergreen Select Money Market Fund o ................ 41,824,069 $ 41,824,069
Navigator Prime Portfolio pp ........................ 2,148,016 2,148,016
------------
Total Short-Term Investments (cost $43,972,085)............... 43,972,085
------------
Total Investments - (cost $388,724,792) - 100.2%.................. 465,049,994
Other Assets and Liabilities - (0.2)%............................. (732,955)
------------
Net Assets - 100.0%............................................... $464,317,039
============
</TABLE>
See Combined Notes to Schedules of Investments.
70
<PAGE>
EVERGREEN
Evergreen Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 95.7%
CONSUMER DISCRETIONARY - 7.6%
Media - 5.1%
Clear Channel Communications, Inc. *.................. 130,000 $ 7,345,000
Disney (Walt) Co. .................................... 580,500 22,204,125
Echostar Communications Corp., Class A................ 181,700 9,584,675
Time Warner, Inc. .................................... 405,000 31,691,250
Viacom, Inc., Class B *............................... 195,212 11,419,902
--------------
82,244,952
--------------
Multi-line Retail - 1.8%
Kohl's Corp. *........................................ 86,500 4,989,969
Wal-Mart Stores, Inc. ................................ 496,180 23,878,662
--------------
28,868,631
--------------
Specialty Retail - 0.7%
Home Depot, Inc. ..................................... 229,500 12,177,844
--------------
CONSUMER STAPLES - 7.6%
Beverages - 3.1%
Anheuser Busch Cos., Inc. ............................ 261,000 11,043,563
Pepsico, Inc. ........................................ 372,100 17,116,600
The Coca-Cola Co. .................................... 395,700 21,812,962
--------------
49,973,125
--------------
Food & Drug Retailing - 1.2%
Kroger Co. *.......................................... 282,100 6,364,881
Walgreen Co. ......................................... 325,300 12,341,069
--------------
18,705,950
--------------
Household Products - 0.7%
Procter & Gamble Co. ................................. 177,500 11,892,500
--------------
Personal Products - 1.8%
Avon Products, Inc. .................................. 291,400 11,910,975
Clorox Co. ........................................... 144,000 5,697,000
Kimberly-Clark Corp. *................................ 139,900 7,808,169
The Estee Lauder Cos., Inc., Class A.................. 83,000 3,039,875
--------------
28,456,019
--------------
Tobacco - 0.8%
Philip Morris Co., Inc. .............................. 450,500 13,261,594
--------------
ENERGY - 8.6%
Energy Equipment & Services - 3.0%
Baker Hughes, Inc. ................................... 358,200 13,298,175
Diamond Offshore Drilling, Inc. ...................... 105,200 4,313,200
Halliburton Co. ...................................... 136,900 6,699,544
Schlumberger, Ltd. ................................... 209,100 17,211,544
Transocean Sedco Forex, Inc. ......................... 109,300 6,407,712
--------------
47,930,175
--------------
</TABLE>
71
<PAGE>
EVERGREEN
Evergreen Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
ENERGY - continued
Oil & Gas - 5.6%
Anadarko Petroleum Corp. ............................. 152,000 $ 10,101,920
Apache Corp. ......................................... 110,100 6,509,663
Chevron Corp. ........................................ 81,000 6,905,250
Conoco, Inc., Class B................................. 210,000 5,656,875
Devon Energy Corp. ................................... 80,100 4,818,015
Exxon Mobil Corp. .................................... 505,339 45,038,338
Royal Dutch Petroleum Co. ............................ 138,100 8,277,369
Texaco, Inc. ......................................... 77,000 4,042,500
--------------
91,349,930
--------------
FINANCIALS - 16.2%
Banks - 5.8%
Bank of America Corp. ................................ 384,910 20,159,661
Bank of New York Co., Inc. ........................... 288,200 16,157,212
Firstar Corp. ........................................ 178,000 3,982,750
FleetBoston Finl. Corp. *............................. 250,000 9,750,000
J.P. Morgan & Co., Inc. *............................. 48,300 7,891,012
KeyCorp. ............................................. 188,200 4,763,813
Mellon Finl. Corp. ................................... 72,700 3,371,463
PNC Finl. Svcs. Group................................. 105,400 6,851,000
State Street Corp. ................................... 60,900 7,917,000
Washington Mutual, Inc. .............................. 73,300 2,918,256
Wells Fargo Co. ...................................... 189,700 8,714,344
--------------
92,476,511
--------------
Diversified Financials - 4.9%
American Express Co. ................................. 245,500 14,914,125
Associates First Capital Corp., Class A............... 142,300 5,407,400
Charles Schwab Corp. ................................. 175,950 6,246,225
Citigroup, Inc. ...................................... 778,266 42,075,006
Freddie Mac Corp. .................................... 195,800 10,585,437
--------------
79,228,193
--------------
Insurance - 5.5%
Allstate Corp. ....................................... 279,300 9,705,675
American Intl. Group, Inc. ........................... 559,410 53,528,544
Chubb Corp. .......................................... 74,800 5,918,550
CIGNA Corp. .......................................... 42,800 4,468,320
Hartford Finl. Svcs. Group, Inc. ..................... 90,100 6,571,669
Lincoln Natl. Corp. .................................. 94,800 4,562,250
Marsh & McLennan Co. ................................. 33,500 4,447,125
--------------
89,202,133
--------------
</TABLE>
72
<PAGE>
EVERGREEN
Evergreen Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - 16.2%
Biotechnology - 1.1%
Amgen, Inc. *....................................... 126,200 $ 8,812,309
IDEC Pharmaceuticals Corp. ......................... 29,200 5,120,494
MedImmune, Inc. *................................... 50,100 3,870,225
--------------
17,803,028
--------------
Health Care Equipment & Supplies - 3.4%
Alza Corp. *........................................ 125,100 10,821,150
Becton Dickinson & Co. ............................. 150,100 3,968,269
Boston Scientific Corp. *........................... 221,700 3,644,194
Guidant Corp. *..................................... 276,300 19,530,956
Medtronic, Inc. .................................... 320,100 16,585,181
--------------
54,549,750
--------------
Health Care Providers & Services - 1.5%
HCA-The Healthcare Corp. ........................... 256,100 9,507,712
Tenet Healthcare Corp. *............................ 288,400 10,490,550
UnitedHealth Group, Inc. ........................... 45,900 4,532,625
--------------
24,530,887
--------------
Pharmaceuticals - 10.2%
Abbott Laboratories................................. 445,500 21,189,094
American Home Products Corp. ....................... 380,500 21,522,031
Bristol-Myers Squibb Co. ........................... 175,100 10,002,588
Johnson & Johnson................................... 180,100 16,918,144
Merck & Co., Inc. .................................. 300,300 22,353,581
Pfizer, Inc. ....................................... 769,385 34,574,238
Pharmacia Corp. .................................... 340,314 20,482,649
Schering-Plough Corp. .............................. 355,000 16,507,500
--------------
163,549,825
--------------
INDUSTRIALS - 11.2%
Aerospace & Defense - 1.9%
Boeing Co. ......................................... 180,900 11,396,700
General Motors Corp., Class H *..................... 285,300 10,607,454
United Technologies Corp. .......................... 135,500 9,383,375
--------------
31,387,529
--------------
Commercial Services & Supplies - 0.8%
Automatic Data Processing, Inc. .................... 188,900 12,632,687
--------------
Industrial Conglomerates - 8.5%
Danaher Corp. ...................................... 77,100 3,835,725
Gen. Elec. Co. ..................................... 1,815,240 104,716,657
Minnesota Mining & Manufacturing Co. ............... 92,900 8,465,513
Tyco Intl., Ltd. ................................... 374,000 19,401,250
--------------
136,419,145
--------------
</TABLE>
73
<PAGE>
EVERGREEN
Evergreen Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - 22.6%
Communications Equipment - 7.0%
CIENA Corp. *......................................... 51,600 $ 6,337,125
Cisco Sys., Inc. *.................................... 838,650 46,335,412
Corning, Inc. ........................................ 51,000 15,147,000
Juniper Networks, Inc. ............................... 34,700 7,597,131
Motorola, Inc. ....................................... 192,600 5,440,950
Nortel Networks Corp. ................................ 424,300 25,272,369
QUALCOMM, Inc. *...................................... 88,200 6,284,250
--------------
112,414,237
--------------
Computers & Peripherals - 8.0%
Compaq Computer Corp. ................................ 212,900 5,871,782
EMC Corp. *........................................... 388,600 38,519,975
Hewlett-Packard Co. .................................. 131,500 12,755,500
Intl. Business Machines Corp. ........................ 224,200 25,222,500
Palm, Inc. ........................................... 77,900 4,123,831
Sun Microsystems, Inc. *.............................. 360,850 42,129,238
--------------
128,622,826
--------------
Electronic Equipment & Instruments - 0.3%
JDS Uniphase Corp. *.................................. 62,000 5,870,625
--------------
Internet Software & Services - 1.1%
America Online, Inc. *................................ 204,200 10,975,750
Commerce One, Inc. ................................... 80,000 6,280,000
--------------
17,255,750
--------------
Semiconductor Equipment & Products - 4.0%
Applied Materials, Inc. *............................. 96,500 5,723,656
Broadcom Corp. *...................................... 15,600 3,802,500
Intel Corp. .......................................... 981,300 40,785,282
Micron Tech., Inc. *.................................. 180,200 8,289,200
Texas Instruments, Inc. .............................. 144,000 6,795,000
--------------
65,395,638
--------------
Software - 2.2%
I2 Technologies, Inc. *............................... 51,200 9,577,600
Oracle Sys. Corp. *................................... 247,400 19,482,750
Veritas Software Corp. *.............................. 46,000 6,532,000
--------------
35,592,350
--------------
TELECOMMUNICATION SERVICES - 3.3%
Diversified Telecommunication Services - 3.0%
Qwest Communications Intl., Inc. *.................... 207,145 9,955,907
SBC Communications, Inc. ............................. 424,200 21,210,000
Verizon Communications................................ 344,432 16,683,425
--------------
47,849,332
--------------
</TABLE>
74
<PAGE>
EVERGREEN
Evergreen Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
TELECOMMUNICATION SERVICES - continued
Wireless Telecommunications Services - 0.3%
Nextel Communications, Inc., Class A *........... 111,600 $ 5,217,300
--------------
UTILITIES - 2.4%
Electric Utilities - 1.1%
Duke Energy Corp. ............................... 102,100 8,755,075
Southern Co. .................................... 263,900 8,560,256
--------------
17,315,331
--------------
Gas Utilities - 1.3%
Enron Corp. ..................................... 236,600 20,732,075
--------------
Total Common Stocks - (cost $1,162,859,321).... 1,542,905,872
--------------
SHORT-TERM INVESTMENTS - 7.9%
MUTUAL FUND SHARES - 7.9%
Evergreen Select Money Market Fund o ............ 83,140,212 83,140,212
Navigator Prime Portfolio pp .................... 44,072,483 44,072,483
--------------
Total Short-Term Investments (cost $127,212,695)........... 127,212,695
--------------
Total Investments - (cost $1,290,072,016) - 103.6%............. 1,670,118,567
Other Assets and Liabilities - (3.6%).......................... (57,524,657)
--------------
Net Assets - 100.0%............................................ $1,612,593,910
==============
</TABLE>
See Combined Notes to Schedules of Investments.
75
<PAGE>
EVERGREEN
Growth Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 87.8%
CONSUMER DISCRETIONARY - 6.6%
Distributors - 1.3%
Kent Electronics Corp. ................................. 87,000 $ 2,077,125
SCP Pool Corp. ......................................... 238,162 7,055,549
------------
9,132,674
------------
Hotels, Restaurants & Leisure - 0.9%
Extended Stay America, Inc. ............................ 152,300 2,017,975
Ruby Tuesday, Inc. ..................................... 393,150 4,422,938
------------
6,440,913
------------
Internet & Catalog Retail - 0.3%
Polymedica Corp. ....................................... 42,150 1,807,181
------------
Leisure Equipment & Products - 0.7%
Concord Camera Corp. ................................... 178,400 4,571,500
------------
Multi-line Retail - 1.1%
Dollar Tree Stores, Inc. ............................... 121,237 4,917,676
Family Dollar Stores, Inc. ............................. 141,150 2,717,137
------------
7,634,813
------------
Specialty Retail - 2.3%
Men's Wearhouse, Inc. .................................. 204,550 5,791,322
Michaels Stores, Inc. *................................. 75,700 3,028,000
Rent-A-Center, Inc. .................................... 114,700 3,978,656
Williams Sonoma, Inc. *................................. 95,200 3,308,200
------------
16,106,178
------------
CONSUMER STAPLES - 0.0%
Food Products - 0.0%
Hain Celestial Group, Inc. ............................. 8,200 288,025
------------
ENERGY - 7.5%
Energy Equipment & Services - 5.8%
Core Laboratories....................................... 408,000 10,021,500
Gulf Islands Fabrication, Inc. ......................... 358,700 6,322,087
Hanover Compressor Co. *................................ 219,250 7,221,547
Precision Drilling Corp. ............................... 133,000 4,738,125
Pride Intl., Inc. *..................................... 333,250 8,831,125
Unifab Intl., Inc. ..................................... 239,850 3,058,088
------------
40,192,472
------------
Oil & Gas - 1.7%
Louis Dreyfus Natural Gas Corp. *....................... 91,950 3,643,519
St. Mary Land & Exploration Co. ........................ 198,400 4,575,600
Unit Corp. ............................................. 242,600 3,578,350
------------
11,797,469
------------
</TABLE>
76
<PAGE>
EVERGREEN
Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
FINANCIALS - 5.0%
Banks - 2.6%
Boston Private Financial Hldgs., Inc. .................. 193,500 $ 3,192,750
Commerce Bancorp, Inc. ................................. 90,462 5,263,757
Natl. Commerce Bancorp.................................. 383,284 7,641,725
Netbank, Inc. .......................................... 180,150 2,128,022
------------
18,226,254
------------
Diversified Financials - 1.2%
RentWay, Inc. .......................................... 237,400 7,211,025
Vyyo, Inc. ............................................. 36,800 1,104,000
------------
8,315,025
------------
Insurance - 1.2%
Markel Corp. ........................................... 52,660 7,991,155
------------
HEALTH CARE - 17.0%
Biotechnology - 3.3%
Abgenix, Inc. .......................................... 16,700 1,349,569
Affymetrix, Inc. *...................................... 20,000 997,500
Alkermes, Inc. ......................................... 45,900 1,772,887
Enzon, Inc. ............................................ 37,250 2,458,500
Gilead Sciences, Inc. .................................. 22,000 2,413,125
Human Genome Sciences, Inc. ............................ 20,550 3,557,719
IDEC Pharmaceuticals Corp. ............................. 15,000 2,630,391
Incyte Genomics, Inc. *................................. 62,100 2,553,862
Millennium Pharmaceuticals, Inc. *...................... 34,600 5,053,762
------------
22,787,315
------------
Health Care Equipment & Supplies - 2.9%
Cytyc Corp. ............................................ 74,250 3,202,031
Endocare , Inc. *....................................... 134,750 2,661,313
Molecular Devices Corp. ................................ 28,000 2,751,000
Physiometrix, Inc. ..................................... 150,100 3,320,962
Resmed, Inc. *.......................................... 38,400 1,200,000
The Cooper Companies, Inc. ............................. 61,900 2,189,713
Vital Signs, Inc. ...................................... 4,200 111,300
Zoll Medical Corp. ..................................... 94,400 4,602,000
------------
20,038,319
------------
Health Care Providers & Services - 6.9%
Accredo Health, Inc. *.................................. 119,650 5,847,894
Bindley Western Inds., Inc. ............................ 198,000 6,336,000
Caremark RX, Inc. ...................................... 241,500 2,716,875
Community Health Care................................... 180,200 5,788,925
Orthodontic Centers of America, Inc. ................... 174,650 5,818,028
Priority Healthcare Corp., Class B *.................... 57,450 4,380,562
</TABLE>
77
<PAGE>
EVERGREEN
Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - continued
Health Care Providers & Services - continued
Province Healthcare Co. ................................ 50,850 $ 2,030,822
Rare Hospitality Intl., Inc. ........................... 247,799 5,048,905
RehabCare Group, Inc. .................................. 83,100 3,531,750
Universal Health Svcs., Inc., Class B .................. 81,200 6,952,750
------------
48,452,511
------------
Pharmaceuticals - 3.9%
Barr Laboratories, Inc. ................................ 100,250 6,647,828
Biotech Holders Trust................................... 40,400 7,875,475
Cubist Pharmaceuticals, Inc. ........................... 41,700 2,171,006
King Pharmaceuticals, Inc. ............................. 116,687 3,901,722
Medicis Pharmaceutical Corp., Class A *................. 112,350 6,909,525
------------
27,505,556
------------
INDUSTRIALS - 18.5%
Aerospace & Defense - 0.5%
Remec, Inc. ............................................ 124,800 3,673,800
------------
Air Freight & Couriers - 2.4%
CH Robinson Worldwide................................... 74,400 4,193,137
Circle Intl. Group, Inc. ............................... 124,900 3,778,225
EGL, Inc. .............................................. 139,600 4,222,900
Expeditors Intl. of Washington, Inc. ................... 92,300 4,159,269
------------
16,353,531
------------
Airlines - 1.9%
Atlantic Coast Airlines Hldgs. ......................... 165,900 5,339,906
Frontier Airlines, Inc. ................................ 103,250 2,006,922
Skywest, Inc. .......................................... 114,300 5,857,875
------------
13,204,703
------------
Commercial Services & Supplies - 6.2%
Acxiom Corp. ........................................... 142,150 4,513,262
Concord EFS, Inc. *..................................... 132,474 4,704,897
Copart, Inc. *.......................................... 410,700 5,698,462
Dendrite Intl., Inc. ................................... 263,675 7,069,786
Hall, Kinion & Associates, Inc. *....................... 120,150 3,416,766
Heidrick & Struggles Intl., Inc. ....................... 109,250 5,612,719
Management Network Group, Inc. ......................... 201,350 4,203,181
Newgen Results Corp. ................................... 178,200 2,673,000
Teletech Hldgs., Inc. .................................. 87,850 2,174,288
The Intercept Group, Inc. .............................. 141,100 3,289,394
------------
43,355,755
------------
</TABLE>
78
<PAGE>
EVERGREEN
Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Construction & Engineering - 0.7%
Dycom Inds., Inc. ...................................... 77,550 $ 3,228,019
Mastec, Inc. ........................................... 62,400 1,950,000
------------
5,178,019
------------
Electrical Equipment - 2.7%
Advanced Lighting Technologies, Inc. ................... 132,800 1,643,400
AstroPower, Inc. ....................................... 96,800 3,835,700
C&D Technologies........................................ 169,150 9,599,263
H Power Corp. .......................................... 41,600 1,391,000
Power One, Inc. ........................................ 42,500 2,571,914
------------
19,041,277
------------
Machinery - 3.2%
APW, Ltd. .............................................. 99,450 4,848,187
Maverick Tube Corp. .................................... 220,900 5,950,494
Shaw Group, Inc. ....................................... 160,300 11,301,150
------------
22,099,831
------------
Road & Rail - 0.9%
Forward Air Corp. ...................................... 169,900 5,978,356
------------
INFORMATION TECHNOLOGY - 28.7%
Communications Equipment - 5.7%
Adtran, Inc. ........................................... 87,900 3,739,870
Advanced Fibre Communications, Inc. .................... 222,350 8,421,506
Alteon Websystems, Inc. *............................... 17,600 1,907,675
Commscope, Inc. ........................................ 34,900 855,050
Digital Lightwave, Inc. ................................ 34,950 2,538,244
DMC Stratex Networks, Inc. ............................. 189,600 3,045,450
Extreme Networks, Inc. *................................ 49,800 5,702,100
Polycom, Inc. .......................................... 200,000 13,393,750
------------
39,603,645
------------
Computers & Peripherals - 1.6%
Corsair Communications, Inc. ........................... 84,500 660,156
InFocus Corp. .......................................... 54,100 2,867,300
QLogic Corp. ........................................... 84,800 7,462,400
------------
10,989,856
------------
Electronic Equipment & Instruments - 9.6%
Artesyn Technologies, Inc. ............................. 153,650 4,475,056
Benchmark Electronics, Inc. ............................ 231,200 12,022,400
Methode Electronics, Inc., Class A ..................... 134,350 5,953,385
Mettler Toledo Intl., Inc. *............................ 71,700 3,154,800
Oak Technology, Inc. *.................................. 406,350 11,123,831
Parlex Corp. ........................................... 291,350 4,825,484
</TABLE>
79
<PAGE>
EVERGREEN
Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Electronic Equipment & Instruments - continued
Sandisk Corp. .......................................... 103,650 $ 6,918,638
Sensormatic Electronics Corp. .......................... 482,850 7,242,750
Sipex Corp. ............................................ 268,000 11,272,750
------------
66,989,094
------------
Internet Software & Services - 0.8%
Agile Software Corp. ................................... 66,950 6,021,316
------------
Office Electronics - 0.5%
Manugistics Group, Inc. ................................ 34,300 3,365,687
------------
Semiconductor Equipment & Products - 8.3%
Actel Corp. *........................................... 112,350 4,037,578
Bookham Technology Plc. ................................ 58,350 2,501,756
Cirrus Logic, Inc. ..................................... 85,700 3,454,781
Elantec Semiconductor, Inc. ............................ 99,000 9,862,875
Exar Corp. ............................................. 48,350 5,850,350
Hi/fn, Inc. *........................................... 89,700 6,110,812
Intl. Rectifier Corp. .................................. 45,500 2,300,594
Micrel, Inc. *.......................................... 64,100 4,294,700
Silicon Image, Inc. *................................... 65,350 1,621,497
Therma-Wave, Inc. *..................................... 98,350 2,827,563
Tripath Technology, Inc. ............................... 202,550 5,152,366
Veeco Instruments, Inc. *............................... 69,450 7,380,148
Zoran Corp. ............................................ 58,300 2,842,125
------------
58,237,145
------------
Software - 2.2%
Moldflow Corp. ......................................... 180,050 4,231,175
Network Associates, Inc. *.............................. 230,300 5,210,537
Verity, Inc. ........................................... 160,250 5,718,922
------------
15,160,634
------------
MATERIALS - 1.2%
Chemicals - 1.2%
Cabot Microelectronics Corp. ........................... 88,400 4,243,200
Evercel, Inc. .......................................... 181,550 3,891,978
------------
8,135,178
------------
TELECOMMUNICATION SERVICES - 3.3%
Diversified Telecommunication Services - 2.6%
Choice One Communications, Inc. *....................... 317,550 3,870,141
Efficient Networks, Inc. *.............................. 183,850 6,859,903
NEXTLINK Communications, Inc., Class A *................ 16,700 587,631
Time Warner Telecom, Inc., Class A ..................... 140,350 6,780,660
------------
18,098,335
------------
</TABLE>
80
<PAGE>
EVERGREEN
Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
TELECOMMUNICATION SERVICES - continued
Wireless Telecommunications Services - 0.7%
Airgate PCS, Inc. *.............................. 34,000 $ 1,525,750
Western Wireless Corp., Class A.................. 94,050 3,350,531
------------
4,876,281
------------
Total Common Stocks (cost $436,864,734)........ 611,649,803
------------
SHORT-TERM INVESTMENTS - 27.8%
MUTUAL FUND SHARES - 17.2%
Navigator Prime Portfolio pp .................... 119,527,312 119,527,312
<CAPTION>
Principal
Amount Value
<S> <C> <C>
REPURCHASE AGREEMENTS - 10.6%
State Street Bank & Trust Co., 6.53%,
dated 9/29/2000, due 10/2/2000, maturity value
$74,034,500 (cost $73,994,235) p ............... $73,994,235 73,994,235
Total Short-Term Investments (cost $193,521,547)........... 193,521,547
------------
Total Investments - (cost $630,386,281) - 115.5%............... 805,171,350
Other Assets and Liabilities - (15.5%)......................... (108,184,735)
------------
Net Assets - 100.0%............................................ $696,986,615
============
</TABLE>
See Combined Notes to Schedules of Investments.
81
<PAGE>
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Large Company Growth Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 97.0%
CONSUMER DISCRETIONARY - 7.6%
Media - 4.0%
Disney (Walt) Co. .................................... 400,000 $ 15,300,000
Time Warner, Inc. .................................... 188,900 14,781,425
Viacom, Inc., Class B *............................... 290,000 16,965,000
--------------
47,046,425
--------------
Multi-line Retail - 1.3%
Wal-Mart Stores, Inc. ................................ 330,000 15,881,250
--------------
Specialty Retail - 2.3%
Bed Bath & Beyond, Inc. *............................. 480,000 11,707,500
Best Buy Co., Inc. *.................................. 250,000 15,906,250
--------------
27,613,750
--------------
CONSUMER STAPLES - 1.1%
Food & Drug Retailing - 1.1%
Safeway, Inc. *....................................... 270,000 12,605,625
--------------
ENERGY - 10.0%
Energy Equipment & Services - 4.1%
ENSCO Intl., Inc. .................................... 300,000 11,475,000
Nabors Inds., Inc. *.................................. 485,000 25,414,000
Rowan Co., Inc. *..................................... 400,000 11,600,000
--------------
48,489,000
--------------
Oil & Gas - 5.9%
Anadarko Petroleum Corp. ............................. 300,000 19,938,000
Apache Corp. ......................................... 335,000 19,806,875
Exxon Mobil Corp. .................................... 345,000 30,748,125
--------------
70,493,000
--------------
FINANCIALS - 10.4%
Banks - 1.1%
PNC Finl. Svcs. Group................................. 200,000 13,000,000
--------------
Diversified Financials - 6.9%
American Express Co. ................................. 430,000 26,122,500
Citigroup, Inc. ...................................... 448,400 24,241,625
Goldman Sachs Group, Inc. ............................ 105,000 11,963,438
Morgan Stanley Dean Witter & Co. ..................... 210,000 19,201,875
--------------
81,529,438
--------------
Insurance - 2.4%
American Intl. Group, Inc. ........................... 295,312 28,257,667
--------------
</TABLE>
82
<PAGE>
EVERGREEN
Large Company Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - 19.1%
Biotechnology - 2.1%
Amgen, Inc. *......................................... 180,000 $ 12,569,063
MedImmune, Inc. *..................................... 158,700 12,259,575
--------------
24,828,638
--------------
Health Care Equipment & Supplies - 2.6%
Alza Corp. *.......................................... 215,000 18,597,500
Medtronic, Inc. ...................................... 241,600 12,517,900
--------------
31,115,400
--------------
Health Care Providers & Services - 1.9%
Cardinal Health, Inc. ................................ 250,000 22,046,875
--------------
Pharmaceuticals - 12.5%
American Home Products Corp. ......................... 765,000 43,270,312
Pfizer, Inc. ......................................... 400,000 17,975,000
Pharmacia Corp. ...................................... 454,709 27,367,798
Roche Hldg. AG........................................ 1,300 11,450,758
Serono SA, ADR........................................ 463,000 14,005,750
Shire Pharmaceuticals Group Plc, ADR *................ 400,000 20,650,000
Watson Pharmaceuticals, Inc. *........................ 215,000 13,948,125
--------------
148,667,743
--------------
INDUSTRIALS - 10.6%
Aerospace & Defense - 1.5%
Boeing Co. ........................................... 270,000 17,010,000
--------------
Commercial Services & Supplies - 2.6%
Paychex, Inc. ........................................ 595,000 31,237,500
--------------
Industrial Conglomerates - 6.5%
Gen. Elec. Co. ....................................... 825,000 47,592,187
Tyco Intl., Ltd. ..................................... 570,000 29,568,750
--------------
77,160,937
--------------
INFORMATION TECHNOLOGY - 36.1%
Communications Equipment - 11.6%
CIENA Corp. *......................................... 140,000 17,193,750
Cisco Sys., Inc. *.................................... 795,000 43,923,750
Corning, Inc. ........................................ 55,000 16,335,000
Juniper Networks, Inc. ............................... 30,000 6,568,125
Motorola, Inc. ....................................... 525,000 14,831,250
Nokia Corp., ADR...................................... 537,000 21,379,312
Nortel Networks Corp. ................................ 300,000 17,868,750
--------------
138,099,937
--------------
</TABLE>
83
<PAGE>
EVERGREEN
Large Company Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Computers & Peripherals - 8.2%
EMC Corp. *........................................... 372,400 $ 36,914,150
Intl. Business Machines Corp. ........................ 300,000 33,750,000
Sun Microsystems, Inc. *.............................. 230,000 26,852,500
--------------
97,516,650
--------------
Electronic Equipment & Instruments - 2.8%
Sandisk Corp. ........................................ 300,500 20,058,375
Waters Corp. *........................................ 150,000 13,350,000
--------------
33,408,375
--------------
Internet Software & Services - 4.5%
America Online, Inc. *................................ 323,500 17,388,125
Check Point Software Technologies, Ltd. *............. 100,000 15,750,000
Commerce One, Inc. ................................... 85,000 6,672,500
VeriSign, Inc. ....................................... 65,000 13,166,563
--------------
52,977,188
--------------
Semiconductor Equipment & Products - 4.5%
Broadcom Corp., Class A *............................. 40,000 9,750,000
Cypress Semiconductor Corp. *......................... 275,000 11,429,688
Intel Corp. .......................................... 250,000 10,390,625
Microchip Tech., Inc. *............................... 450,000 14,878,125
PMC-Sierra, Inc. *.................................... 30,000 6,457,500
--------------
52,905,938
--------------
Software - 4.5%
Oracle Sys. Corp. *................................... 145,000 11,418,750
Siebel Sys., Inc. *................................... 115,000 12,800,937
Veritas Software Corp. *.............................. 207,575 29,475,650
--------------
53,695,337
--------------
UTILITIES - 2.1%
Electric Utilities - 1.1%
AES Corp. *........................................... 180,000 12,330,000
Southern Energy, Inc. ................................ 25,000 784,375
--------------
13,114,375
--------------
Gas Utilities - 1.0%
El Paso Energy Corp. ................................. 195,000 12,016,875
--------------
Total Common Stocks (cost $834,011,724)............. 1,150,717,923
--------------
</TABLE>
84
<PAGE>
EVERGREEN
Large Company Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
SHORT-TERM INVESTMENTS - 11.7%
MUTUAL FUND SHARES - 11.7%
Evergreen Select Money Market Fund o .............. 80,416,475 $ 80,416,475
Navigator Prime Portfolio pp ...................... 58,223,986 58,223,986
--------------
Total Short-Term Investments (cost
$138,640,461)................................... 138,640,461
--------------
Total Investments - (cost $972,652,185) - 108.7%................ 1,289,358,384
Other Assets and Liabilities - (8.7%)........................... (103,536,151)
--------------
Net Assets - 100.0%............................................. $1,185,822,233
==============
</TABLE>
See Combined Notes to Schedules of Investments.
85
<PAGE>
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Masters Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 95.5%
CONSUMER DISCRETIONARY - 9.0%
Auto Components - 0.1%
Arvinmeritor, Inc. ..................................... 1,175 $ 17,258
Delphi Automotive Sys. Corp. ........................... 3,900 58,988
Johnson Controls, Inc. ................................. 700 37,231
SPX Corp. .............................................. 1,000 141,937
------------
255,414
------------
Automobiles - 0.1%
Ford Motor Co. ......................................... 9,872 249,885
General Motors Corp. *.................................. 2,180 141,700
Harley-Davidson, Inc. .................................. 1,800 86,175
------------
477,760
------------
Distributors - 0.9%
W.W. Grainger, Inc. .................................... 116,700 3,070,669
------------
Hotels, Restaurants & Leisure - 0.4%
Brinker Intl., Inc. *................................... 1,000 30,125
Carnival Corp., Class A ................................ 4,500 110,812
Darden Restaurants, Inc. ............................... 1,800 37,463
Harrahs Entertainment, Inc. *........................... 14,500 398,750
Marriott Intl., Inc., Class A .......................... 400 14,575
MGM Grand, Inc. ........................................ 2,088 79,735
Park Place Entertainment Corp. *........................ 50,800 768,350
Ruby Tuesday, Inc. ..................................... 3,800 42,750
Ryan's Family Steak Houses, Inc. *...................... 4,000 30,750
Wendy's Intl., Inc. .................................... 1,000 20,063
------------
1,533,373
------------
Household Durables - 0.2%
Del Webb Corp. ......................................... 500 13,875
Leggett & Platt, Inc. .................................. 20,000 316,250
Mohawk Inds., Inc. *.................................... 500 10,906
NVR, Inc. *............................................. 2,200 178,200
Ryland Group, Inc. ..................................... 2,000 62,000
------------
581,231
------------
Internet & Catalog Retail - 0.0%
CDW Computer Centers, Inc. *............................ 200 13,800
Valuevision Intl., Inc. *............................... 300 7,538
------------
21,338
------------
Leisure Equipment & Products - 0.1%
Brunswick Corp. ........................................ 2,900 52,925
Eastman Kodak Co. ...................................... 3,000 122,625
------------
175,550
------------
</TABLE>
86
<PAGE>
EVERGREEN
Masters Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER DISCRETIONARY - continued
Media - 4.0%
Charter Communications, Inc., Class A ................... 69,500 $ 1,130,461
Clear Channel Communications, Inc. *..................... 6,200 350,300
Comcast Corp., Class A .................................. 1,100 45,031
Disney (Walt) Co. ....................................... 6,700 256,275
Dow Jones & Co., Inc. ................................... 900 54,450
Echostar Communications Corp., Class A *................. 43,000 2,268,250
Fox Entertainment Group, Inc. *.......................... 6,900 182,850
Gannett Co., Inc. ....................................... 4,300 227,900
Gaylord Entertainment Co. ............................... 1,000 23,875
Getty Images, Inc. ...................................... 13,250 403,297
Harte-Hanks, Inc. ....................................... 2,000 54,500
Havas Advertising........................................ 685 10,018
Interpublic Group of Cos., Inc. ......................... 1,600 54,500
Knight-Ridder, Inc. ..................................... 1,100 55,894
Martha Stewart Living Omnimedia, Inc., Class A .......... 12,000 315,000
McClatchy Co., Class A .................................. 300 10,556
New York Times Co., Class A ............................. 13,200 518,925
Omnicom Group, Inc. ..................................... 5,100 371,981
Reader's Digest Assn., Inc., Class A .................... 3,500 123,594
RH Donnelley Corp. ...................................... 3,100 65,488
Scholastic Corp. *....................................... 25,200 2,004,975
Seagram Co., Ltd. ....................................... 400 22,975
SportsLine USA, Inc. *................................... 57,800 798,362
Time Warner, Inc. ....................................... 16,600 1,298,950
Tmp Worldwide, Inc. ..................................... 100 8,050
Tribune Co. ............................................. 1,700 74,162
Univision Communications, Inc., Class A *................ 1,100 41,113
USA Networks, Inc. *..................................... 5,700 125,044
Viacom, Inc., Class B *.................................. 45,492 2,661,282
Young & Rubicam, Inc. ................................... 300 14,850
Ziff Davis, Inc.-ZDNet *................................. 11,300 158,906
------------
13,731,814
------------
Multi-line Retail - 1.9%
BJ's Wholesale Club, Inc. *.............................. 74,400 2,538,900
Family Dollar Stores, Inc. .............................. 29,000 558,250
Kohl's Corp. *........................................... 600 34,613
May Dept. Stores Co. .................................... 2,650 54,325
Sears, Roebuck & Co. .................................... 2,700 87,534
Target Corp. ............................................ 3,200 82,000
Wal-Mart Stores, Inc. ................................... 61,700 2,969,312
------------
6,324,934
------------
</TABLE>
87
<PAGE>
EVERGREEN
Masters Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER DISCRETIONARY - continued
Specialty Retail - 1.0%
Ann Taylor Stores Corp. *............................... 800 $ 30,750
Best Buy Co., Inc. *.................................... 4,600 292,675
Borders Group, Inc. *................................... 8,200 114,287
Home Depot, Inc. ....................................... 36,750 1,950,047
Intimate Brands, Inc., Class A.......................... 400 7,475
Limited, Inc. .......................................... 7,600 167,675
Linens 'n Things, Inc. *................................ 1,300 33,150
Payless Shoesource, Inc. *.............................. 47 2,632
RadioShack Corp. ....................................... 10,500 678,562
Ross Stores, Inc. ...................................... 3,000 43,125
Tiffany & Co. .......................................... 3,800 146,537
Too, Inc., *............................................ 542 12,873
Zale Corp. *............................................ 3,000 97,313
------------
3,577,101
------------
Textiles & Apparel - 0.3%
Jones Apparel Group, Inc. *............................. 22,894 606,691
Liz Claiborne, Inc. .................................... 1,000 38,500
V.F. Corp. ............................................. 10,200 251,813
------------
897,004
------------
CONSUMER STAPLES - 3.2%
Beverages - 0.5%
Adolph Coors Co. ....................................... 1,000 63,188
Anheuser Busch Cos., Inc. .............................. 19,600 829,325
Constellation Brands, Inc. ............................. 200 10,863
Pepsico, Inc. .......................................... 16,800 772,800
The Coca-Cola Co. ...................................... 2,300 126,787
------------
1,802,963
------------
Food & Drug Retailing - 1.1%
CVS Corp. .............................................. 23,300 1,079,081
Kroger Co. *............................................ 76,700 1,730,544
Safeway, Inc. *......................................... 600 28,012
SYSCO Corp. ............................................ 15,100 699,319
Walgreen Co. ........................................... 3,200 121,400
------------
3,658,356
------------
Food Products - 0.9%
Agribrands Intl., Inc. *................................ 600 26,175
Conagra, Inc. .......................................... 3,300 66,206
Del Monte Foods Co. *................................... 201,500 1,246,781
Gen. Mills, Inc. ....................................... 10,500 372,750
H.J. Heinz Co. ......................................... 1,100 40,769
Keebler Foods Co. *..................................... 20,700 869,400
</TABLE>
88
<PAGE>
EVERGREEN
Masters Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER STAPLES - continued
Food Products - continued
Quaker Oats Co. ........................................ 5,600 $ 443,100
Ralston Purina Co. ..................................... 900 21,319
Wrigley (W.M.) Junior Co. .............................. 100 7,487
------------
3,093,987
------------
Personal Products - 0.7%
Alberto Culver Co., Class B ............................ 300 8,644
Avon Products, Inc. .................................... 4,700 192,112
Clorox Co. ............................................. 800 31,650
Colgate-Palmolive Co. *................................. 4,800 226,560
Dial Corp. ............................................. 10,900 126,713
Kimberly-Clark Corp. *.................................. 16,300 909,744
The Estee Lauder Cos., Inc., Class A ................... 20,400 747,150
------------
2,242,573
------------
Tobacco - 0.0%
R.J. Reynolds Tobacco Hldgs., Inc. *.................... 5,300 170,925
------------
ENERGY - 12.9%
Energy Equipment & Services - 4.5%
BJ Services Co., Inc. *................................. 9,700 592,912
Diamond Offshore Drilling, Inc. ........................ 29,900 1,225,900
ENSCO Intl., Inc. ...................................... 14,500 554,625
Global Inds., Ltd. ..................................... 190,500 2,381,250
Global Marine, Inc. *................................... 56,900 1,756,787
Grant Pride, Inc. ...................................... 14,200 311,513
Halliburton Co. ........................................ 12,000 587,250
Nabors Inds., Inc. *.................................... 6,000 314,400
Noble Affiliates, Inc. ................................. 10,900 404,663
Noble Drilling Corp. *.................................. 75,100 3,773,775
Santa Fe Intl. Corp. ................................... 5,700 256,856
Schlumberger, Ltd. ..................................... 600 49,388
Transocean Sedco Forex, Inc. ........................... 41,700 2,444,662
Weatherford Intl., Inc. *............................... 14,200 610,600
------------
15,264,581
------------
Oil & Gas - 8.4%
Amerada Hess Corp. ..................................... 2,100 140,569
Anadarko Petroleum Corp. ............................... 7,200 478,512
Anderson Exploration, Ltd. *............................ 12,954 282,748
Apache Corp. ........................................... 63,900 3,778,087
Beau Canada Exploration, Ltd. .......................... 50,000 59,709
Berkley Petroleum Corp. *............................... 15,000 85,086
Brown Tom, Inc. ........................................ 7,300 178,850
Burlington Res., Inc. .................................. 13,000 478,563
</TABLE>
89
<PAGE>
EVERGREEN
Masters Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
ENERGY - continued
Oil & Gas - continued
Cabot Oil & Gas Corp., Class A ......................... 1,000 $ 20,375
Canadian 88 Energy Corp. *.............................. 40,000 99,250
Canadian Hunter Exploration, Ltd. ...................... 13,700 331,752
Canadian Natural Res., Ltd. *........................... 6,716 224,986
Chevron Corp. .......................................... 7,800 664,950
Chieftain Intl., Inc. *................................. 6,100 126,194
Conoco, Inc., Class A .................................. 24,500 640,063
Conoco, Inc., Class B .................................. 2,300 61,956
Devon Energy Corp. ..................................... 12,000 721,800
Encal Energy, Ltd. ..................................... 10,000 61,700
EOG Res., Inc. ......................................... 131,300 5,104,287
Exxon Mobil Corp. ...................................... 42,937 3,826,760
Frontier Oil Corp. ..................................... 67,500 497,813
Genoil, Inc. ........................................... 33,333 1,548
Houston Exploration Co. *............................... 75,200 1,898,800
Husky Energy, Inc. ..................................... 4,921 45,544
Kerr-McGee Corp. ....................................... 2,600 172,250
Murphy Oil Corp. ....................................... 7,900 512,019
Newfield Exploration Co. *.............................. 112,300 5,243,006
Occidental Petroleum Corp. ............................. 4,000 87,250
Paramount Res., Ltd. ................................... 7,700 70,752
Phillips Petroleum Co. ................................. 3,000 188,250
Rio Alto Exploration, Ltd., *........................... 5,000 106,150
Royal Dutch Petroleum Co. .............................. 25,200 1,510,425
Stone Energy Corp. *.................................... 1,900 104,500
Talisman Energy, Inc. .................................. 7,700 269,472
Tesoro Petroleum Corp. ................................. 2,700 26,831
Texaco, Inc. ........................................... 6,500 341,250
Tosco Corp. ............................................ 3,000 93,563
Unocal Corp. ........................................... 9,500 336,656
USX-Marathon Group...................................... 400 11,350
------------
28,883,626
------------
FINANCIALS - 9.0%
Banks - 3.3%
Associated Banc Corp. .................................. 13,167 345,634
Bank of America Corp. .................................. 6,000 314,250
Bank of New York Co., Inc. ............................. 7,200 403,650
Bank United Corp. *..................................... 16,400 831,275
BB&T Corp. ............................................. 1,100 33,138
Charter One Finl., Inc. ................................ 31,080 757,575
Comerica, Inc. ......................................... 19,100 1,116,156
Dime Bancorp, Inc. ..................................... 1,000 21,563
</TABLE>
90
<PAGE>
EVERGREEN
Masters Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
FINANCIALS - continued
Banks - continued
Fifth Third Bancorp...................................... 16,450 $ 886,244
First Security Corp. .................................... 36,200 590,512
First Tennessee Natl. Corp. ............................. 12,200 249,337
Firstar Corp. ........................................... 19,200 429,600
FleetBoston Finl. Corp. *................................ 12,098 471,822
Golden Street Bancorp, Inc. *............................ 2,600 61,425
Golden West Finl. Corp. ................................. 1,000 53,625
Huntington Bancshares, Inc. ............................. 60,500 888,594
KeyCorp.................................................. 10,000 253,125
Mellon Finl. Corp. ...................................... 700 32,463
North Fork Bancorp, Inc. ................................ 20,190 436,609
Northern Trust Corp. .................................... 3,400 302,175
Old Kent Finl. Corp. .................................... 1,323 38,284
SouthTrust Corp. ........................................ 18,900 594,169
State Street Corp. ...................................... 5,200 676,000
Wachovia Corp. .......................................... 500 28,344
Washington Mutual, Inc. ................................. 12,200 485,712
Wells Fargo Co. ......................................... 8,700 399,656
Wilmington Trust Corp. .................................. 8,900 477,262
------------
11,178,199
------------
Diversified Financials - 3.3%
American Express Co. .................................... 18,100 1,099,575
Avis Rent-A-Car, Inc. *.................................. 4,300 127,388
AXA Finl., Inc. ......................................... 7,000 356,562
Bear Stearns Cos., Inc. ................................. 500 31,500
Charles Schwab Corp. .................................... 24,350 864,425
Citigroup, Inc. ......................................... 77,333 4,180,815
Countrywide Credit Inds., Inc. .......................... 5,900 222,725
Fannie Mae Co. .......................................... 2,300 164,450
Fortune Brands, Inc. .................................... 700 18,550
Goldman Sachs Group, Inc. ............................... 1,800 205,087
Household Intl., Inc. ................................... 1,700 96,263
Legg Mason, Inc. ........................................ 3,000 174,375
Lehman Brothers Holdings, Inc. .......................... 4,000 591,000
Merrill Lynch & Co., Inc. ............................... 10,800 712,800
Morgan Stanley Dean Witter & Co. ........................ 16,500 1,508,719
Neuberger Berman, Inc. .................................. 1,350 83,025
Price (T. Rowe) Associates, Inc. ........................ 5,000 234,687
Stilwell Finl., Inc. .................................... 10,700 465,450
Textron, Inc. ........................................... 200 9,225
Xtra Corp. .............................................. 2,400 106,650
------------
11,253,271
------------
</TABLE>
91
<PAGE>
EVERGREEN
Masters Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
FINANCIALS - continued
Insurance - 2.2%
AFLAC, Inc. ............................................ 1,600 $ 102,500
Allmerica Finl. Corp. .................................. 8,940 571,601
AMBAC Finl. Group, Inc. ................................ 13,190 966,167
American Intl. Group, Inc. ............................. 27,500 2,631,406
Chubb Corp. ............................................ 800 63,300
CIGNA Corp. ............................................ 5,500 574,200
Cincinnati Finl. Corp. ................................. 900 31,950
Hartford Finl. Svcs. Group, Inc. ....................... 1,000 72,938
HSB Group, Inc. ........................................ 6,000 240,750
Jefferson Pilot Corp. .................................. 2,700 183,263
MBIA, Inc. ............................................. 8,870 630,879
MGIC Investment Corp. .................................. 1,700 103,913
Partnerre, Ltd. ........................................ 12,770 605,777
PMI Group, Inc. ........................................ 3,750 254,062
Radian Group, Inc. ..................................... 166 11,205
The St. Paul Cos., Inc. ................................ 900 44,381
XL Capital, Ltd., Class A............................... 8,870 651,945
------------
7,740,237
------------
Real Estate - 0.2%
Boston Properties, Inc. REIT............................ 14,100 605,419
------------
HEALTH CARE - 12.2%
Biotechnology - 1.2%
Amgen, Inc. *........................................... 21,200 1,480,356
Chiron Corp., *......................................... 21,000 945,000
Genetech, Inc., *....................................... 4,600 854,163
Gilead Sciences, Inc. .................................. 3,200 351,000
Immunex Corp. *......................................... 13,100 569,850
------------
4,200,369
------------
Health Care Equipment & Supplies - 4.3%
Alza Corp. *............................................ 10,700 925,550
ArthroCare Corp. *...................................... 29,900 581,181
Baxter Intl., Inc. ..................................... 8,100 646,481
Beckman Coulter, Inc. .................................. 10,900 840,663
Becton Dickinson & Co. ................................. 8,700 230,006
Biomet, Inc. ........................................... 450 15,750
Cytyc Corp. ............................................ 76,500 3,299,063
Medtronic, Inc. ........................................ 3,300 170,981
PE Corp-PE Biosystems Group............................. 10,400 1,211,600
Sybron Intl. Corp. *.................................... 13,500 324,000
VISX, Inc. *............................................ 243,300 6,553,894
------------
14,799,169
------------
</TABLE>
92
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Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - continued
Health Care Providers & Services - 1.1%
Cardinal Health, Inc. .................................. 8,800 $ 776,050
Cybear Group............................................ 297 390
HC-The Healthcare Corp. ................................ 2,900 107,662
Health Mgmt. Associates, Inc., Class A *................ 35,900 747,169
IMS Health, Inc. ....................................... 13,000 269,750
Pacificare Health Sys., Inc. *.......................... 300 10,444
Synavant, Inc. ......................................... 600 4,013
Tenet Healthcare Corp. *................................ 1,700 61,837
Total Renal Care Hldgs., Inc. *......................... 159,100 1,193,250
Trigon Healthcare, Inc. *............................... 1,100 57,819
UnitedHealth Group, Inc. ............................... 5,500 543,125
------------
3,771,509
------------
Pharmaceuticals - 5.6%
Abbott Laboratories..................................... 9,000 428,062
Allergan, Inc. ......................................... 8,100 683,944
American Home Products Corp. ........................... 29,500 1,668,594
Andrx Corp. ............................................ 2,000 186,750
Bristol-Myers Squibb Co. ............................... 4,700 268,487
Dura Pharmaceuticals, Inc. *............................ 5,000 176,875
Elan Corp. Plc, ADR *................................... 2,500 136,875
Eli Lilly & Co. ........................................ 7,600 616,550
Forest Laboratories, Inc. .............................. 200 22,938
Intrabiotics Pharmaceuticals............................ 52,000 845,000
IVAX Corp. ............................................. 1,400 64,400
Johnson & Johnson....................................... 13,400 1,258,762
Merck & Co., Inc. ...................................... 18,700 1,391,981
Mylan Laboratories, Inc. ............................... 1,400 37,713
Pfizer, Inc. ........................................... 78,775 3,539,952
Pharmacia Corp. ........................................ 24,600 1,480,612
Scherin-Plough Corp. ................................... 23,700 1,102,050
Sepracor, Inc. ......................................... 300 36,806
United Therapeutics Corp. *............................. 58,600 5,120,175
------------
19,066,526
------------
INDUSTRIALS - 12.1%
Aerospace & Defense - 1.1%
Boeing Co. ............................................. 8,200 516,600
Gen. Dynamics Corp. .................................... 15,000 942,187
General Motors Corp., Class H *......................... 21,380 794,908
Lockheed Martin Corp. .................................. 44,500 1,466,720
Perkinelmer, Inc. ...................................... 500 52,188
United Technologies Corp. S&P........................... 1,700 117,725
------------
3,890,328
------------
</TABLE>
93
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Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Air Freight & Couriers - 0.1%
Expeditors Intl. of Washington, Inc. ................... 3,900 $ 175,744
United Parcel Svcs., Inc., Class B...................... 2,300 129,662
------------
305,406
------------
Airlines - 0.1%
Continental Airlines, Inc., Class B *................... 5,000 227,187
Delta Air Lines, Inc. .................................. 2,300 102,063
Southwest Airlines Co. ................................. 1,000 24,250
------------
353,500
------------
Building Products - 0.1%
American Standard Cos., Inc. *.......................... 3,600 159,975
Masco Corp. ............................................ 4,800 89,400
------------
249,375
------------
Commercial Services & Supplies - 6.0%
ACNielsen Corp. *....................................... 12,000 285,750
Amdocs, Ltd. *.......................................... 1,100 68,613
Automatic Data Processing, Inc. ........................ 5,700 381,187
Avery Dennison Corp. ................................... 6,100 282,888
BARRA, Inc. ............................................ 6,700 415,819
Bea Sys., Inc. *........................................ 9,800 763,175
Cadence Design Sys., Inc. *............................. 32,700 839,981
Checkfree Corp. ........................................ 135,400 5,671,991
Collectors Universe, Inc. *............................. 11,370 28,425
Computer Sciences Corp. *............................... 16,300 1,210,275
Convergys Corp. *....................................... 29,850 1,160,419
CSG Systems Intl., Inc. *............................... 76,900 2,230,100
Deluxe Corp. ........................................... 200 4,063
DST Sys., Inc. *........................................ 9,700 1,139,750
Dun & Bradstreet Corp. ................................. 1,100 37,881
eBay, Inc. ............................................. 500 34,344
Electronic Data Sys. Corp. ............................. 5,500 228,250
Fair Issac & Co., Inc. ................................. 9,800 418,337
First Data Corp. ....................................... 4,400 171,875
Fiserv, Inc. *.......................................... 200 11,975
John H. Harland Co. .................................... 2,000 30,625
McGraw-Hill Co., Inc. .................................. 12,400 788,175
Miller (Herman), Inc. .................................. 500 16,031
National Data Corp. .................................... 45,200 1,483,125
Nova Corp. ............................................. 131,500 2,251,937
Paychex, Inc. .......................................... 2,850 149,625
Switchboard, Inc. *..................................... 54,740 355,810
The Intercept Group, Inc. .............................. 1,200 27,975
------------
20,488,401
------------
</TABLE>
94
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Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Construction & Engineering - 0.2%
Metromedia Fiber Network, Inc., Class A................. 24,200 $ 588,363
Spectrasite Hldgs., Inc. *.............................. 6,500 120,656
------------
709,019
------------
Electrical Equipment - 0.6%
Cable Design Technologies Corp. *....................... 70,050 1,703,091
Cooper Inds., Inc. ..................................... 1,300 45,825
Emerson Elec. Co. ...................................... 1,300 87,100
Energizer Hldgs., Inc. ................................. 300 7,350
Molex, Inc. ............................................ 2,575 106,701
------------
1,950,067
------------
Industrial Conglomerates - 3.0%
Dover Corp. ............................................ 4,000 187,750
Gen. Elec. Co. ......................................... 110,000 6,345,625
Honeywell Intl., Inc. .................................. 4,350 154,969
Minnesota Mining & Manufacturing Co. ................... 6,200 564,975
Tyco Intl., Ltd. ....................................... 58,300 3,024,312
------------
10,277,631
------------
Machinery - 0.8%
AGCO Corp. ............................................. 146,900 1,744,437
APW, Ltd. .............................................. 10,000 487,500
CNH Global N.V. ........................................ 35,400 354,000
Illinois Tool Works, Inc. .............................. 1,500 83,813
Parker Hannifin Corp. .................................. 700 23,625
Reliance Steel & Aluminum Co. .......................... 2,700 56,869
------------
2,750,244
------------
Marine - 0.1%
SEACOR SMIT, Inc. *..................................... 1,500 69,937
Tidewater, Inc. ........................................ 7,400 336,700
------------
406,637
------------
Road & Rail - 0.0%
Union Pacific Corp. .................................... 3,100 120,513
------------
Transportation Infrastructure - 0.0%
Kansas City Southern Inds., Inc. ....................... 750 6,516
------------
INFORMATION TECHNOLOGY - 29.7%
Communications Equipment - 7.5%
3Com Corp. *............................................ 18,000 345,375
American Tower Sys. Corp., Class A *.................... 143,300 5,400,619
Avici Systems, Inc. .................................... 400 38,050
Aware, Inc. ............................................ 9,300 358,050
</TABLE>
95
<PAGE>
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Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Communications Equipment - continued
Brocade Communications Sys., Inc. *...................... 5,100 $ 1,203,600
CIENA Corp. *............................................ 2,400 294,750
Cisco Sys., Inc. *....................................... 88,600 4,895,150
Computer Network Technology *............................ 21,300 732,187
Comverse Tech., Inc. *................................... 11,800 1,274,400
Corning, Inc. ........................................... 4,800 1,425,600
Emulex Corp. *........................................... 32,600 3,993,500
Extreme Networks, Inc. .................................. 400 45,800
Infospace, Inc. ......................................... 5,600 169,400
Juniper Networks, Inc. .................................. 3,000 656,812
L-3 Communications Hldg. Corp. .......................... 9,600 542,400
Lucent Technologies, Inc. ............................... 7,000 213,938
Motorola, Inc. .......................................... 6,900 194,925
Nokia Corp., ADR......................................... 89 3,543
Nortel Networks Corp. ................................... 34,900 2,078,731
Qualcomm, Inc. .......................................... 8,400 598,500
Redback Networks, Inc. .................................. 5,029 824,442
Scientific Atlanta, Inc. ................................ 1,200 76,350
Tekelec, Inc. ........................................... 6,500 213,688
Tellabs, Inc. *.......................................... 2,900 138,475
------------
25,718,285
------------
Computers & Peripherals - 4.1%
Apple Computer *......................................... 16,000 412,000
Compaq Computer Corp. ................................... 5,300 146,174
Dell Computer Corp. *.................................... 9,500 292,719
EMC Corp. *.............................................. 24,600 2,438,475
Gateway, Inc. *.......................................... 1,700 79,475
Hewlett-Packard Co. ..................................... 7,800 756,600
Intl. Business Machines Corp. ........................... 600 67,500
Lexmark Intl. Group, Inc., Class A *..................... 300 11,250
NCR Corp. *.............................................. 500 18,906
Network Appliance, Inc. ................................. 6,600 840,675
Palm, Inc. .............................................. 23,583 1,248,425
QLogic Corp. ............................................ 32,728 2,880,064
Seagate Tech., Inc. *.................................... 27,700 1,911,300
Sun Microsystems, Inc. *................................. 24,400 2,848,700
Symbol Technologies, Inc. ............................... 1,050 37,735
------------
13,989,998
------------
Electronic Equipment & Instruments - 1.7%
Agilent Technologies, Inc. .............................. 827 40,471
AVX Corp. ............................................... 3,200 83,400
JDS Uniphase Corp. *..................................... 8,800 833,250
</TABLE>
96
<PAGE>
EVERGREEN
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Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Electronic Equipment & Instruments - continued
Methode Electronics, Inc., Class A...................... 3,000 $ 132,938
Rockwell Intl. Corp. ................................... 3,000 90,750
RSA Security, Inc. *.................................... 60,900 2,626,312
Sanmina Corp. *......................................... 4,700 440,038
Sawtek, Inc. *.......................................... 5,900 227,242
SCI Sys., Inc. *........................................ 22,500 922,500
Sipex Corp. ............................................ 1,900 79,919
Stratos Lightwave, Inc. ................................ 4,075 131,419
Vishay Intertechnology, Inc. ........................... 1,300 39,975
Waters Corp. *.......................................... 1,200 106,800
------------
5,755,014
------------
Internet Software & Services - 5.4%
America Online, Inc. *.................................. 11,800 634,250
Ariba, Inc. *........................................... 2,700 386,817
Broadvision, Inc. *..................................... 600 15,413
Chordiant Software, Inc. *.............................. 11,640 90,210
Cnet Networks, Inc. *................................... 46,900 1,142,455
Commerce One, Inc. ..................................... 800 62,800
Digex, Inc., Class A.................................... 17,200 806,250
Epresence, Inc. ........................................ 47,100 317,925
Exodus Communications, Inc. ............................ 700 34,562
Go2Net.................................................. 9,200 499,244
Internap Network Svcs. Corp. ........................... 12,000 387,750
Internet Security Sys., Inc. ........................... 61,500 4,620,187
Ivillage, Inc. ......................................... 43,800 169,725
Portal Software, Inc. .................................. 900 36,000
Real Networks, Inc. *................................... 11,000 437,250
S1 Corp. *.............................................. 142,016 1,695,316
Software Common, Inc. .................................. 300 54,431
VeriSign, Inc. *........................................ 33,937 6,874,364
Vignette Corp. ......................................... 1,500 44,812
Yahoo!, Inc. *.......................................... 3,700 336,700
------------
18,646,461
------------
Office Electronics - 0.2%
Radiant Systems, Inc. *................................. 24,750 529,031
------------
Semiconductor Equipment & Products - 5.7%
Advanced Micro Devices, Inc. *.......................... 3,000 70,875
Altera Corp. *.......................................... 3,600 171,900
Analog Devices, Inc. *.................................. 9,400 776,087
Applied Materials, Inc. *............................... 22,700 1,346,394
Applied Micro Circuits Corp. *.......................... 200 41,413
Applied Science & Tech, Inc. *.......................... 6,400 94,400
</TABLE>
97
<PAGE>
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Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Semiconductor Equipment & Products - continued
Atmel Corp. ............................................ 51,000 $ 774,563
Broadcom Corp. *........................................ 400 97,500
Conexant Sys., Inc. *................................... 3,000 125,625
Cypress Semiconductor Corp. *........................... 3,300 137,156
Dupont Photomasks, Inc. *............................... 15,700 922,375
Globespan Semiconductor, Inc. .......................... 500 61,000
Integrated Device Technology *.......................... 2,700 244,350
Intel Corp. ............................................ 105,400 4,380,687
Jabil Circuit, Inc. *................................... 19,320 1,096,410
KLA-Tencor Corp. ....................................... 2,900 119,444
Lam Research Corp. *.................................... 2,000 41,875
Lattice Semiconductor Corp. *........................... 2,000 107,500
Linear Technology Corp. ................................ 18,200 1,178,450
LSI Logic Corp. *....................................... 2,700 78,975
Marvell Technology Group, Ltd. ......................... 300 23,138
Maxim Integrated Products, Inc. *....................... 2,100 168,919
Mentor Graphics Corp. .................................. 14,000 329,875
Microchip Tech., Inc. *................................. 900 29,756
Micron Tech., Inc. **................................... 3,900 179,400
MKS Instruments, Inc. .................................. 7,000 191,625
Natl. Semiconductor Corp. *............................. 2,800 112,700
Novellus Sys., Inc. *................................... 11,900 554,094
PMC-Sierra, Inc. *...................................... 4,100 882,525
SDL, Inc. *............................................. 900 278,381
Teradyne, Inc. *........................................ 32,200 1,127,000
Texas Instruments, Inc. ................................ 29,720 1,402,412
Triquint Semiconductor, Inc. ........................... 6,100 222,269
Veeco Instruments, Inc. *............................... 6,000 637,594
Vitesse Semiconductor Corp. *........................... 2,300 204,556
Xilinx, Inc. *.......................................... 14,500 1,241,562
------------
19,452,785
------------
Software - 4.9%
Adobe Sys., Inc. ....................................... 4,100 636,525
Citrix Sys., Inc. ...................................... 166,800 3,346,425
Computer Associates Intl., Inc. ........................ 2,100 52,894
I2 Technologies, Inc. *................................. 4,700 879,194
Intuit, Inc. *.......................................... 11,900 678,300
Macromedia, Inc. ....................................... 5,800 468,713
Mercury Interactive Corp. *............................. 100 15,675
Microsoft Corp. *....................................... 30,200 1,821,437
Natl. Instruments Corp. ................................ 12,400 547,150
Network Associates, Inc. *.............................. 25,600 579,200
Oracle Sys. Corp. *..................................... 43,000 3,386,250
</TABLE>
98
<PAGE>
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Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Software - continued
Peoplesoft, Inc. *...................................... 1,500 $ 41,906
Phone.com, Inc. ........................................ 400 45,450
Rational Software Corp. *............................... 12,400 860,250
Siebel Sys., Inc. *..................................... 16,100 1,792,131
Speechworks Intl., Inc. ................................ 240 14,880
Symantec Corp. ......................................... 700 30,800
TIBCO Software, Inc. ................................... 800 67,550
Veritas Software Corp. *................................ 11,600 1,647,200
------------
16,911,930
------------
Specialty Retail - 0.2%
ADC Telecommunications, Inc. *.......................... 19,600 527,056
------------
MATERIALS - 1.5%
Chemicals - 0.5%
Albemarle Corp. ........................................ 7,900 159,481
Dexter Corp. ........................................... 800 59,273
Dow Chemical Co. ....................................... 5,300 132,169
DuPont (E.I.) De Nemours & Co. ......................... 5,400 223,762
Ecolab, Inc. ........................................... 500 18,031
Engelhard Corp. ........................................ 800 13,000
Praxair, Inc. .......................................... 11,800 441,025
Union Carbide Corp. .................................... 3,500 132,125
Valspar Corp. .......................................... 15,000 344,850
------------
1,523,716
------------
Construction Materials - 0.2%
Centex Construction Products, Inc. ..................... 900 22,331
Martin Marietta Materials, Inc. ........................ 6,700 256,476
Southdown, Inc. ........................................ 3,000 213,750
Vulcan Materials Co. ................................... 600 24,113
------------
516,670
------------
Containers & Packaging - 0.5%
AptarGroup, Inc. ....................................... 2,200 52,662
Ball Corp. ............................................. 100 3,169
Bemis Co., Inc. ........................................ 900 28,913
Pactiv Corp. *.......................................... 1,600 17,900
Sealed Air Corp. *...................................... 9,200 416,300
Smurfit Container Corp. *............................... 112,000 1,344,000
------------
1,862,944
------------
Metals & Mining - 0.1%
AK Steel Hldg. Corp. ................................... 900 8,438
Alcan Aluminum, Ltd. ................................... 1,800 52,087
</TABLE>
99
<PAGE>
EVERGREEN
Masters Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
MATERIALS - continued
Metals & Mining - continued
Alcoa, Inc. ............................................. 9,200 $ 232,875
Inco, Ltd. .............................................. 2,500 40,312
------------
333,712
------------
Paper & Forest Products - 0.2%
Bowater, Inc. ........................................... 13,000 603,687
Rayonier, Inc. .......................................... 900 32,344
Westvaco Corp. .......................................... 1,700 45,369
Weyerhaeuser Co. ........................................ 3,200 129,200
------------
810,600
------------
TELECOMMUNICATION SERVICES - 3.3%
Diversified Telecommunication Services - 2.8%
Adelphia Business Solutions, Class A..................... 35,700 421,706
Allegiance Telecom, Inc. *............................... 37,200 1,385,700
ALLTEL Corp. ............................................ 1,300 67,844
AT&T Corp., Liberty Media Group, Class A *............... 82,400 1,483,200
AT&T Wireless Group. .................................... 5,700 118,987
BellSouth Corp. ......................................... 20,000 805,000
Broadwing, Inc. ......................................... 6,700 171,269
Cosine Communications, Inc. ............................. 1,480 82,233
Covad Communications Group, Inc. ........................ 7,400 98,975
Mpower Communications Corp. ............................. 30,350 264,614
NEXTLINK Communications, Inc., Class A *................. 11,200 394,100
Pinnacle Hldgs., Inc. *.................................. 21,500 572,437
Powertel, Inc. .......................................... 8,400 638,925
Qwest Communications Intl., Inc. ........................ 5,700 273,956
SBC Communications, Inc. ................................ 12,500 625,000
Sprint Corp. ............................................ 20,400 597,975
Teleglobe, Inc. ......................................... 20,000 420,000
Telephone & Data Sys., Inc. ............................. 3,200 354,240
Time Warner Telecom, Inc., Class A....................... 200 9,663
Verizon Communications. ................................. 16,400 794,375
------------
9,580,199
------------
Electronic Equipment & Instruments - 0.0%
Inrange Technologies Corp., Class B...................... 390 20,670
------------
Wireless Telecommunications Services - 0.5%
Crown Castle Intl. Corp. ................................ 5,900 183,269
Leap Wireless Intl., Inc. ............................... 1,100 68,819
Nextel Communications, Inc., Class A *................... 11,600 542,300
Sprint Corp. (PCS Group), Ser. 1 *....................... 12,600 441,787
Vodafone Group Plc, ADR.................................. 7,600 281,200
</TABLE>
100
<PAGE>
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Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
TELECOMMUNICATION SERVICES - continued
Wireless Telecommunications Services - continued
Western Wireless Corp., Class A *........................ 8,800 $ 313,500
------------
1,830,875
------------
UTILITIES - 2.6%
Electric Utilities - 1.8%
AES Corp. *.............................................. 800 54,800
Allegheny Energy, Inc. .................................. 9,800 374,237
Ameren Corp. ............................................ 1,200 50,250
American Elec. Power Co., Inc. .......................... 700 27,388
Calpine Corp. *.......................................... 7,820 816,212
Constellation Energy Group, Inc. ........................ 500 24,875
Dominion Resources, Inc. ................................ 1,400 81,288
DQE, Inc. ............................................... 4,900 196,612
DTE Energy Co. .......................................... 1,300 49,725
Duke Energy Corp. ....................................... 300 25,725
Dynegy, Inc., Class A ................................... 32,720 1,865,040
Energy East Corp. ....................................... 1,000 22,625
Entergy Corp. ........................................... 1,200 44,700
FirstEnergy Corp. ....................................... 600 16,163
Florida Progress Corp. .................................. 2,800 148,225
Ipalco Enterprises....................................... 2,000 45,750
Montana Power Co. ....................................... 15,500 517,312
Northeast Utilities...................................... 500 10,844
PECO Energy Co. ......................................... 4,100 248,306
PPL Corp. ............................................... 2,100 87,675
Public Service Enterprise Group, Inc. ................... 4,400 196,625
Reliant Energy, Inc. .................................... 200 9,300
Southern Co. ............................................ 2,100 68,119
Southern Energy, Inc. ................................... 750 23,531
TXU Corp. ............................................... 700 27,738
Unicom Corp. ............................................ 3,600 202,275
UtiliCorp United, Inc. .................................. 37,200 962,550
------------
6,197,890
------------
Gas Utilities - 0.8%
Coastal Corp. ........................................... 1,100 81,537
Enron Corp. ............................................. 23,600 2,067,950
NICOR, Inc. ............................................. 200 7,238
Piedmont Natural Gas Co., Inc. .......................... 11,500 352,187
Sempra Energy............................................ 1,200 24,975
Southwestern Energy Co. ................................. 6,700 58,625
------------
2,592,512
------------
Total Common Stocks (cost $289,650,835)................ 326,685,883
------------
</TABLE>
101
<PAGE>
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Masters Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS - 0.2%
CONSUMER DISCRETIONARY - 0.2%
Leisure Equipment & Products - 0.1%
Tribune Co. (exchangeable for Mattel, Inc. Common
Stock), 6.25%, 8/15/2001............................. 9,900 $ 138,600
------------
Media - 0.1%
Emmis Communications Corp., 6.25%, 12/31/2049......... 9,000 355,500
------------
Total Convertible Preferred Stocks (cost $593,495).. 494,100
------------
<CAPTION>
Principal
Amount Value
<S> <C> <C>
CONVERTIBLE DEBENTURES - 0.5%
CONSUMER DISCRETIONARY - 0.1%
Media - 0.1%
Getty Images, Inc., 5.00%, 03/15/2007 144A ........... $ 500,000 395,625
------------
INFORMATION TECHNOLOGY - 0.4%
Internet Software & Services - 0.1%
Mail.com, Inc., 7.00%, 02/01/2005 144A ............... 420,000 190,050
------------
Semiconductor Equipment & Products - 0.1%
Vitesse Semiconductor Corp., 4.00%, 03/15/2005........ 450,000 469,125
------------
Software - 0.2%
Juniper Networks, Inc., 4.75%, 03/15/2007............. 450,000 693,562
------------
Total Convertible Debentures (cost $1,580,512)...... 1,748,362
------------
CORPORATE BONDS - 0.1%
INFORMATION TECHNOLOGY - 0.1%
Semiconductor Equipment & Products - 0.1%
Triquint Semiconductor, Inc., 4.00%, 03/01/2007 (cost
$367,313)............................................ 450,000 358,313
------------
<CAPTION>
Shares Value
<S> <C> <C>
SHORT-TERM INVESTMENTS - 2.9%
MUTUAL FUND SHARES - 2.9% - (cost $10,014,503)
Evergreen Select Money Market Fund o ................. 10,014,503 10,014,503
------------
Total Investments - (cost $302,206,658) - 99.2%.................... 339,301,161
Other Assets and Liabilities - 0.8%................................ 2,673,626
------------
Net Assets - 100.0%................................................ $341,974,787
============
</TABLE>
See Combined Notes to Schedules of Investments.
102
<PAGE>
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Omega Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 97.7%
CONSUMER DISCRETIONARY - 6.0%
Automobiles - 1.4%
Harley-Davidson, Inc. .............................. 725,000 $ 34,709,375
--------------
Media - 1.3%
Viacom, Inc., Class B *............................. 569,000 33,286,500
--------------
Specialty Retail - 3.3%
Best Buy Co., Inc. *................................ 505,000 32,130,625
RadioShack Corp. ................................... 500,000 32,312,500
Tweeter Home Entertainment Group, Inc. *............ 537,000 19,499,813
--------------
83,942,938
--------------
ENERGY - 8.1%
Energy Equipment & Services - 4.3%
ENSCO Intl., Inc. .................................. 600,000 22,950,000
Nabors Inds., Inc. *................................ 525,000 27,510,000
Rowan Co., Inc. *................................... 785,000 22,765,000
Santa Fe Intl. Corp. ............................... 765,000 34,472,812
--------------
107,697,812
--------------
Oil & Gas - 3.8%
Anadarko Petroleum Corp. ........................... 435,000 28,910,100
Apache Corp. ....................................... 525,000 31,040,625
Devon Energy Corp. ................................. 600,000 36,090,000
--------------
96,040,725
--------------
FINANCIALS - 7.2%
Diversified Financials - 5.7%
American Express Co. ............................... 825,000 50,118,750
Citigroup, Inc. .................................... 774,400 41,866,000
Lehman Brothers Holdings, Inc. ..................... 175,000 25,856,250
Morgan Stanley Dean Witter & Co. ................... 295,000 26,974,062
--------------
144,815,062
--------------
Insurance - 1.5%
American Intl. Group, Inc. ......................... 400,000 38,275,000
--------------
HEALTH CARE - 20.4%
Biotechnology - 2.0%
MedImmune, Inc. *................................... 332,800 25,708,800
Millennium Pharmaceuticals, Inc. *.................. 170,000 24,830,625
--------------
50,539,425
--------------
Health Care Equipment & Supplies - 4.1%
Alza Corp. *........................................ 455,000 39,357,500
Medtronic, Inc. .................................... 423,400 21,937,413
Stryker Corp. *..................................... 1,020,000 43,796,250
--------------
105,091,163
--------------
</TABLE>
103
<PAGE>
EVERGREEN
Omega Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - continued
Health Care Providers & Services - 2.9%
AmeriSource Health Corp., Class A *................. 325,000 $ 15,275,000
Cardinal Health, Inc. .............................. 660,000 58,203,750
--------------
73,478,750
--------------
Pharmaceuticals - 11.4%
Alpharma, Inc., Class A............................. 650,000 39,731,250
American Home Products Corp. ....................... 1,150,000 65,046,875
Mylan Laboratories, Inc. ........................... 2,450,000 65,996,875
Pfizer, Inc. ....................................... 850,000 38,196,875
Pharmacia Corp. .................................... 720,220 43,348,241
Watson Pharmaceuticals, Inc. *...................... 540,000 35,032,500
--------------
287,352,616
--------------
INDUSTRIALS - 9.8%
Aerospace & Defense - 1.4%
B.F. Goodrich Co. .................................. 300,000 11,756,250
Boeing Co. ......................................... 375,000 23,625,000
--------------
35,381,250
--------------
Commercial Services & Supplies - 3.6%
Apollo Group, Inc., Class A *....................... 624,800 24,913,900
Devry, Inc. *....................................... 541,100 20,358,887
Paychex, Inc. ...................................... 880,000 46,200,000
--------------
91,472,787
--------------
Industrial Conglomerates - 4.8%
Gen. Elec. Co. ..................................... 1,000,000 57,687,500
Tyco Intl., Ltd. ................................... 1,195,000 61,990,625
--------------
119,678,125
--------------
INFORMATION TECHNOLOGY - 44.2%
Communications Equipment - 9.1%
Alteon Websystems, Inc. ............................ 125,000 13,548,828
Brocade Communications Sys., Inc. .................. 60,000 14,160,000
CIENA Corp. *....................................... 260,000 31,931,250
Cisco Sys., Inc. *.................................. 1,005,000 55,526,250
Copper Mountain Networks, Inc. ..................... 470,000 17,625,000
Extreme Networks, Inc. ............................. 280,000 32,060,000
Juniper Networks, Inc. ............................. 75,000 16,420,313
Nuance Communications, Inc. *....................... 205,000 24,945,937
Plantronics, Inc. .................................. 600,000 22,800,000
--------------
229,017,578
--------------
</TABLE>
104
<PAGE>
EVERGREEN
Omega Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Computers & Peripherals - 7.9%
EMC Corp. *........................................... 650,000 $ 64,431,250
Network Appliance, Inc. .............................. 105,000 13,374,375
NVIDIA Corp. ......................................... 740,000 60,587,500
QLogic Corp. ......................................... 277,374 24,408,912
Sun Microsystems, Inc. *.............................. 315,000 36,776,250
--------------
199,578,287
--------------
Electronic Equipment & Instruments - 5.4%
Coherent, Inc., * *................................... 330,000 22,440,000
Cree Research, Inc. *................................. 295,000 34,293,750
Sandisk Corp. ........................................ 584,100 38,988,675
Sanmina Corp. *....................................... 120,000 11,235,000
Waters Corp. *........................................ 320,000 28,480,000
--------------
135,437,425
--------------
Internet Software & Services - 6.6%
America Online, Inc. *................................ 922,500 49,584,375
Ariba, Inc. .......................................... 125,000 17,908,203
Art Technology Group, Inc., * *....................... 245,000 23,213,750
Check Point Software Technologies, Ltd. *............. 200,000 31,500,000
Commerce One, Inc. ................................... 210,000 16,485,000
VeriSign, Inc. ....................................... 135,000 27,345,938
--------------
166,037,266
--------------
Semiconductor Equipment & Products - 5.2%
Atmel Corp. .......................................... 600,000 9,112,500
Broadcom Corp. *...................................... 80,000 19,500,000
Cypress Semiconductor Corp. *......................... 550,000 22,859,375
Intel Corp. .......................................... 530,000 22,028,125
Microchip Tech., Inc. *............................... 727,500 24,052,969
Micron Tech., Inc. *.................................. 468,700 21,560,200
PMC-Sierra, Inc. ..................................... 60,000 12,915,000
--------------
132,028,169
--------------
Software - 10.0%
I2 Technologies, Inc. *............................... 105,000 19,641,562
Interwoven, Inc. ..................................... 200,000 22,612,500
Mercury Interactive Corp. *........................... 222,500 34,876,875
Micromuse, Inc. ...................................... 75,000 15,070,312
Microsoft Corp. *..................................... 366,000 22,074,375
Oracle Sys. Corp. *................................... 275,000 21,656,250
Peregrine Sys., Inc. *................................ 375,000 7,101,563
Rational Software Corp. *............................. 420,000 29,137,500
Sapient Corp. ........................................ 372,900 15,172,369
</TABLE>
105
<PAGE>
EVERGREEN
Omega Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Software - continued
Siebel Sys., Inc. *................................... 240,000 $ 26,715,000
Veritas Software Corp. *.............................. 272,500 38,695,000
--------------
252,753,306
--------------
UTILITIES - 2.0%
Electric Utilities - 1.0%
AES Corp. *........................................... 375,000 25,687,500
--------------
Gas Utilities - 1.0%
El Paso Energy Corp. ................................. 410,000 25,266,250
--------------
Total Common Stocks (cost $2,008,144,692)........... 2,467,567,309
--------------
</TABLE>
<TABLE>
<S> <C> <C>
SHORT-TERM INVESTMENTS - 10.8%
MUTUAL FUND SHARES - 10.8%
Evergreen Select Money Market Fund o ............. 119,972,517 119,972,517
Navigator Prime Portfolio pp ..................... 152,030,892 152,030,892
--------------
Total Short-Term Investments (cost $272,003,409)............ 272,003,409
--------------
Total Investment - (cost $2,280,148,101) - 108.5%............... 2,739,570,718
Other Assets and Liabilities - (8.5%)........................... (215,423,933)
--------------
Net Assets - 100.0%............................................. $2,524,146,785
==============
</TABLE>
See Combined Notes to Schedules of Investments.
106
<PAGE>
EVERGREEN
Small Company Growth Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 99.2%
CONSUMER DISCRETIONARY - 5.1%
Media - 0.5%
Getty Images, Inc. ................................... 200,000 $ 6,087,500
--------------
Multi-line Retail - 1.5%
Chico's Fas, Inc. .................................... 148,500 5,049,000
Etoys Inc. ........................................... 652,400 3,486,262
Family Dollar Stores, Inc. ........................... 320,000 6,160,000
Neiman Marcus Group, Class A ......................... 100,200 3,250,238
--------------
17,945,500
--------------
Specialty Retail - 2.4%
Abercrombie & Fitch Co., Class A *.................... 231,800 4,418,688
Ann Taylor Stores Corp. *............................. 175,400 6,741,937
Hot Topic, Inc. ...................................... 131,900 3,957,000
Talbots, Inc. ........................................ 220,000 14,575,000
--------------
29,692,625
--------------
Textiles & Apparel - 0.7%
Liz Claiborne, Inc. .................................. 210,900 8,119,650
--------------
CONSUMER STAPLES - 0.5%
Food & Drug Retailing - 0.5%
Whole Foods Market, Inc. *............................ 101,200 5,433,175
--------------
ENERGY - 6.3%
Energy Equipment & Services - 3.7%
Core Laboratories..................................... 217,500 5,342,344
Diamond Offshore Drilling, Inc. ...................... 89,000 3,649,000
Global Marine, Inc. *................................. 551,800 17,036,825
Grant Pride, Inc. .................................... 270,500 5,934,093
Hydril Co. ........................................... 33,400 759,850
Weatherford Intl., Inc. *............................. 270,500 11,631,500
--------------
44,353,612
--------------
Oil & Gas - 2.6%
Chiles Offshore, Inc. ................................ 165,000 3,568,125
Cross Timbers Oil Co. ................................ 490,500 9,411,469
Triton Energy, Ltd. .................................. 483,100 18,840,900
--------------
31,820,494
--------------
FINANCIALS - 7.6%
Banks - 1.9%
Boston Private Financial Hldgs., Inc. ................ 50,000 825,000
North Fork Bancorp, Inc. ............................. 465,420 10,064,707
TCF Financial Corp. .................................. 322,000 12,115,250
--------------
23,004,957
--------------
</TABLE>
107
<PAGE>
EVERGREEN
Small Company Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
FINANCIALS - continued
Diversified Financials - 1.0%
Metris Companies Inc................................ 235,300 $ 9,294,350
Ubiquitel, Inc. .................................... 334,700 3,012,300
--------------
12,306,650
--------------
Insurance - 3.3%
AMBAC Finl. Group, Inc. ............................ 88,300 6,467,975
Arthur J. Gallagher & Co. .......................... 309,300 18,287,362
Everest Reinsurance Group, Ltd. .................... 173,100 8,568,450
Partnerre, Ltd. .................................... 141,200 6,698,175
--------------
40,021,962
--------------
Real Estate - 1.4%
AMB Property Corp.*................................. 113,100 2,778,019
Equity Office Properties Trust REIT................. 147,300 4,575,506
Equity Residential Properties Trust REIT............ 88,200 4,233,600
Spieker Properties, Inc. REIT....................... 86,200 4,961,888
--------------
16,549,013
--------------
HEALTH CARE - 21.5%
Biotechnology - 8.2%
Applied Molecular Evolution......................... 18,700 750,338
Biovail Corp. ...................................... 186,000 15,147,375
COR Therapeutics, Inc. ............................. 189,100 11,783,294
CuraGen Corp. ...................................... 140,100 7,464,703
Cv Therapeutics, Inc. .............................. 122,100 9,497,091
Diversa Corp. ...................................... 129,400 3,493,800
Enzon, Inc. ........................................ 110,900 7,319,400
Illumina, Inc. ..................................... 28,100 1,275,038
Incyte Genomics, Inc., Class A...................... 160,000 6,580,000
Maxygen, Inc., *.................................... 119,900 6,219,812
Medarex, Inc., *.................................... 90,200 10,581,587
Protein Design Labs, Inc., *........................ 48,500 5,844,250
Sangstat Med Corp. ................................. 196,900 2,522,781
Variagenics, Inc. .................................. 114,500 2,561,937
Vertex Pharmaceuticals, Inc. ....................... 95,000 8,027,500
--------------
99,068,906
--------------
Health Care Equipment & Supplies - 0.7%
C.R. Bard, Inc. .................................... 187,700 7,930,325
--------------
Health Care Providers & Services - 4.1%
Apria Healthcare Group, Inc. ....................... 194,800 2,715,025
Caremark RX, Inc. .................................. 1,001,600 11,268,000
Express Scripts, Inc., Class A...................... 85,300 6,162,925
Laboratory Corp. of America Holdings................ 86,800 10,394,300
Manor Care, Inc. *.................................. 391,900 6,147,932
</TABLE>
108
<PAGE>
EVERGREEN
Small Company Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - continued
Health Care Providers & Services - continued
Oxford Health Plans, Inc. *........................... 391,100 $ 12,020,214
Pharmacopeia, Inc. *.................................. 39,200 999,600
--------------
49,707,996
--------------
Pharmaceuticals - 8.5%
Andrx Corp. .......................................... 114,000 10,644,750
Barr Laboratories, Inc. .............................. 92,000 6,100,750
Cell Therapeutics, Inc. .............................. 112,500 7,502,344
Cubist Pharmaceuticals, Inc. ......................... 119,200 6,205,850
Dura Pharmaceuticals, Inc. *.......................... 516,500 18,271,187
IVAX Corp. ........................................... 394,700 18,156,200
Teva Pharmaceutical Inds., Ltd. ADR................... 115,300 8,438,519
Titan Pharmaceuticals, Inc. *......................... 104,200 6,773,000
Watson Pharmaceuticals, Inc. *........................ 301,400 19,553,325
--------------
101,645,925
--------------
INDUSTRIALS - 13.6%
Aerospace & Defense - 2.5%
B.F. Goodrich Co. .................................... 200,000 7,837,500
BE Aerospace, Inc. *.................................. 190,300 3,068,588
Doncasters Plc........................................ 144,100 2,918,025
Hexcel Corp. ......................................... 207,200 2,771,300
M Sys. Flash Disk Pioneers, Ltd. **................... 140,000 5,346,250
Precision Castparts Corp. ............................ 202,000 7,751,750
--------------
29,693,413
--------------
Commercial Services & Supplies - 6.5%
Apollo Group, Inc., Class A *......................... 444,400 17,720,450
BISYS Group, Inc. *................................... 122,855 9,498,227
Devry, Inc. *......................................... 680,068 25,587,558
Diamond Technology Partners, Inc., Class A *.......... 104,700 7,773,975
Dun & Bradstreet Corp. ............................... 200,000 6,887,500
Miller (Herman), Inc. ................................ 188,100 6,030,956
Republic Services, Inc., Class A *.................... 25,000 328,125
United Stationers, Inc. .............................. 160,100 4,302,688
--------------
78,129,479
--------------
Industrial Conglomerates - 0.4%
Floware Wireless Systems, Ltd. ....................... 200,000 4,981,250
--------------
Machinery - 2.7%
Roper Inds., Inc. .................................... 812,300 26,958,206
Shaw Group, Inc. ..................................... 70,500 4,970,250
--------------
31,928,456
--------------
</TABLE>
109
<PAGE>
EVERGREEN
Small Company Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Marine - 1.5%
Teekay Shipping Corp. .............................. 169,800 $ 7,969,988
Tidewater, Inc. .................................... 234,000 10,647,000
--------------
18,616,988
--------------
INFORMATION TECHNOLOGY - 41.1%
Communications Equipment - 12.1%
Audio Codes, Ltd. .................................. 100,000 8,512,500
Digital Lightwave, Inc. ............................ 738 53,597
Emulex Corp. ....................................... 266,700 32,670,750
Extreme Networks, Inc. ............................. 246,600 28,235,700
Glenayre Technologies, Inc. *....................... 170,000 1,848,750
Infospace, Inc. .................................... 347,700 10,517,925
Interwave Commerce International, Ltd. *............ 25,000 200,000
Mcdata Corp. ....................................... 123,700 15,201,571
Netro Corp. ........................................ 152,200 9,017,850
New Focus, Inc. .................................... 103,800 8,206,688
Nuance Communications, Inc. *....................... 127,900 15,563,831
SonicWall, Inc. .................................... 219,400 6,252,900
Tollgrade Communications, Inc. * *.................. 64,400 8,939,525
--------------
145,221,587
--------------
Computers & Peripherals - 5.5%
InFocus Corp. ...................................... 139,100 7,372,300
JNI Corp. *......................................... 120,900 10,760,100
Maxtor Corp. *...................................... 1,322,800 13,889,400
QLogic Corp. ....................................... 264,300 23,258,400
Storage Technology Corp. *.......................... 406,900 5,518,581
Symbol Technologies, Inc. .......................... 148,400 5,333,125
--------------
66,131,906
--------------
Electronic Equipment & Instruments - 3.1%
Caliper Technologies Corp. *........................ 117,500 6,807,656
Coherent, Inc. * *.................................. 160,200 10,893,600
Conductus, Inc. .................................... 82,800 1,221,300
Newport Corp. ...................................... 75,900 12,088,261
Sandisk Corp. ...................................... 96,700 6,454,725
--------------
37,465,542
--------------
Internet Software & Services - 7.7%
Art Technology Group, Inc. *........................ 219,100 20,759,725
Ask Jeeves, Inc. *.................................. 141,100 2,707,356
Avantgo, Inc. ...................................... 40,000 800,000
Cnet Networks, Inc. ................................ 623,600 15,190,506
I Many, Inc. ....................................... 300,000 5,981,250
Lycos, Inc. *....................................... 284,800 19,584,450
Marchfirst, Inc. ................................... 369,700 5,799,669
</TABLE>
110
<PAGE>
EVERGREEN
Small Company Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Internet Software & Services - continued
Netegrity, Inc. *................................... 158,850 $ 11,119,500
Software Common, Inc. .............................. 53,800 9,761,338
Telecommunication Systems, Inc., Class A ........... 85,000 1,625,625
--------------
93,329,419
--------------
Semiconductor Equipment & Products - 4.4%
Alliance Semiconductor Corp. ....................... 560,900 11,147,887
Alpha Industries, Inc. *............................ 374,200 12,746,187
Asyst Technologies, Inc. *.......................... 259,800 5,260,950
Intersil Holding Corp., Class A *................... 199,500 9,950,063
Maxim Integrated Products, Inc. *................... 131,356 10,565,948
Microchip Tech., Inc. *............................. 91,800 3,035,138
--------------
52,706,173
--------------
Software - 8.3%
Bottomline Technologies, Inc. **.................... 156,000 5,820,750
Hnc Software, Inc. ................................. 142,400 11,650,100
Interwoven, Inc. ................................... 137,200 15,512,175
Mercator Software, Inc. ............................ 294,200 4,872,688
Mercury Interactive Corp. *......................... 32,500 5,094,375
Opnet Technologies, Inc. ........................... 60,000 2,190,000
Peregrine Sys., Inc. *.............................. 425,550 8,058,853
Precise Software Solutions, Ltd. ................... 100,000 4,312,500
Rational Software Corp. *........................... 441,200 30,608,250
Smartforce Plc, *................................... 232,785 11,028,189
Speechworks Intl., Inc. ............................ 20,000 1,240,000
--------------
100,387,880
--------------
MATERIALS - 0.7%
Chemicals - 0.1%
Crompton Corp. ..................................... 126,600 996,975
--------------
Metals & Mining - 0.6%
Stillwater Mining Co. *............................. 253,100 6,851,418
--------------
TELECOMMUNICATION SERVICES - 2.8%
Diversified Telecommunication Services - 2.5%
Efficient Networks, Inc. *.......................... 141,100 5,264,794
Lexent, Inc. ....................................... 150,000 4,462,500
McLeod USA, Inc., Class A *......................... 1,204,100 17,233,681
West Teleservices Corp. **.......................... 150,000 3,300,000
--------------
30,260,975
--------------
Wireless Telecommunications Services - 0.3%
Us Unwired, Inc. ................................... 390,000 3,717,187
--------------
Total Common Stocks (cost $935,950,880)........... 1,194,106,938
--------------
</TABLE>
111
<PAGE>
EVERGREEN
Small Company Growth Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
SHORT-TERM INVESTMENTS - 25.5%
MUTUAL FUND SHARES - 25.5%
Evergreen Select Money Market Fund o ............. 11,929,893 $ 11,929,893
Navigator Prime Portfolio pp ..................... 295,255,294 295,255,294
--------------
Total Short-Term Investments (cost $307,185,187)............ 307,185,187
--------------
Total Investments - (cost $1,243,136,067) - 124.7%.............. 1,501,292,125
Other Assets and Liabilities - (24.7%).......................... (296,990,471)
--------------
Net Assets - 100.0%............................................. $1,204,301,654
==============
</TABLE>
See Combined Notes to Schedules of Investments.
112
<PAGE>
EVERGREEN
Stock Selector Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 99.2%
CONSUMER DISCRETIONARY - 8.9%
Auto Components - 0.3%
Delphi Automotive Sys. Corp. ......................... 181,425 $ 2,744,053
Visteon Corp. ........................................ 29,384 444,433
--------------
3,188,486
--------------
Automobiles - 0.5%
Ford Motor Co. ....................................... 224,416 5,680,530
--------------
Hotels, Restaurants & Leisure - 0.9%
Harrahs Entertainment, Inc. * ........................ 192,075 5,282,063
Tricon Global Restaurants, Inc. * .................... 143,157 4,384,183
--------------
9,666,246
--------------
Household Durables - 0.3%
Pulte Corp. .......................................... 100,772 3,325,476
--------------
Internet & Catalog Retail - 0.5%
CDW Computer Centers, Inc. * ......................... 86,907 5,996,583
--------------
Media - 3.2%
Clear Channel Communications, Inc. * ................. 104,844 5,923,686
Interpublic Group of Cos., Inc. ...................... 84,583 2,881,109
Omnicom Group, Inc. .................................. 31,290 2,282,214
Seagram Co., Ltd. .................................... 157,094 9,023,087
Time Warner, Inc. .................................... 172,825 13,523,556
USA Networks, Inc. * ................................. 55,817 1,224,485
--------------
34,858,137
--------------
Multi-line Retail - 2.2%
Sears, Roebuck & Co. ................................. 162,024 5,252,818
Target Corp. ......................................... 262,908 6,737,018
Wal-Mart Stores, Inc. ................................ 250,460 12,053,387
--------------
24,043,223
--------------
Specialty Retail - 1.0%
Home Depot, Inc. ..................................... 45,413 2,409,727
Lowe's Co., Inc. ..................................... 188,570 8,462,079
--------------
10,871,806
--------------
CONSUMER STAPLES - 6.0%
Beverages - 2.2%
Adolph Coors Co., Class B ............................ 38,678 2,443,966
Anheuser Busch Cos., Inc. ............................ 339,186 14,351,808
Pepsico, Inc. ........................................ 154,306 7,098,076
--------------
23,893,850
--------------
Food & Drug Retailing - 1.6%
Safeway, Inc. * ...................................... 77,500 3,618,281
SYSCO Corp. .......................................... 295,839 13,701,044
--------------
17,319,325
--------------
</TABLE>
113
<PAGE>
EVERGREEN
Stock Selector Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER STAPLES - continued
Food Products - 0.9%
Conagra, Inc. ........................................ 103,751 $ 2,081,504
McCormick & Co., Inc. ................................ 102,206 3,040,629
Nabisco Group Hldg. Corp. ............................ 178,344 5,082,804
--------------
10,204,937
--------------
Personal Products - 1.1%
Colgate-Palmolive Co. *............................... 78,151 3,688,727
Kimberly-Clark Corp. *................................ 140,378 7,834,847
--------------
11,523,574
--------------
Tobacco - 0.2%
Philip Morris Co., Inc. .............................. 86,770 2,554,292
--------------
ENERGY - 7.4%
Energy Equipment & Services - 0.5%
Rowan Co., Inc. *..................................... 202,401 5,869,629
--------------
Oil & Gas - 6.9%
Anadarko Petroleum Corp. ............................. 138,653 9,214,878
Apache Corp. ......................................... 169,983 10,050,245
Exxon Mobil Corp. .................................... 233,953 20,851,061
Kerr-McGee Corp. ..................................... 250,263 16,579,924
Occidental Petroleum Corp. ........................... 90,803 1,980,640
Phillips Petroleum Co. ............................... 118,590 7,441,523
Texaco, Inc. ......................................... 77,210 4,053,525
Tosco Corp. .......................................... 150,167 4,683,333
--------------
74,855,129
--------------
FINANCIALS - 16.4%
Banks - 5.3%
Bank of America Corp. ................................ 103,210 5,405,624
Firstar Corp. ........................................ 309,589 6,927,054
FleetBoston Finl. Corp. *............................. 280,363 10,934,157
J.P. Morgan & Co., Inc. *............................. 49,659 8,113,039
Mellon Finl. Corp. ................................... 76,230 3,535,166
SouthTrust Corp. ..................................... 508,061 15,972,168
Wells Fargo Co. ...................................... 158,288 7,271,355
--------------
58,158,563
--------------
Diversified Financials - 7.5%
Citigroup, Inc. ...................................... 604,261 32,667,860
Fannie Mae Co. ....................................... 152,122 10,876,723
Goldman Sachs Group, Inc. ............................ 37,451 4,267,073
Lehman Brothers Holdings, Inc. ....................... 95,106 14,051,912
Merrill Lynch & Co., Inc. ............................ 45,200 2,983,200
Morgan Stanley Dean Witter & Co. ..................... 100,359 9,176,576
</TABLE>
114
<PAGE>
EVERGREEN
Stock Selector Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
FINANCIALS - continued
Diversified Financials - continued
Providian Finl. Corp. ................................ 46,380 $ 5,890,260
Textron, Inc. ........................................ 32,080 1,479,690
--------------
81,393,294
--------------
Insurance - 3.6%
Allmerica Finl. Corp. ................................ 104,739 6,696,750
Allstate Corp. ....................................... 64,646 2,246,448
American Intl. Group, Inc. ........................... 258,091 24,696,083
Loews Corp. .......................................... 36,792 3,067,533
MGIC Investment Corp. ................................ 38,207 2,335,403
--------------
39,042,217
--------------
HEALTH CARE - 13.8%
Biotechnology - 1.4%
Amgen, Inc. *......................................... 71,123 4,966,386
Chiron Corp., *....................................... 82,405 3,708,225
Genetech, Inc., *..................................... 32,475 6,030,201
--------------
14,704,812
--------------
Health Care Equipment & Supplies - 2.5%
Bausch & Lomb, Inc. .................................. 82,423 3,209,346
Biomet, Inc. ......................................... 243,664 8,528,240
C.R. Bard, Inc. ...................................... 181,575 7,671,544
PE Corp-PE Biosystems Group........................... 71,277 8,303,770
--------------
27,712,900
--------------
Health Care Providers & Services - 1.8%
Cardinal Health, Inc. ................................ 85,456 7,536,151
HCA-The Healthcare Corp. ............................. 136,389 5,063,441
UnitedHealth Group, Inc. ............................. 39,701 3,920,474
Wellpoint Health Networks, Inc. *..................... 33,966 3,260,736
--------------
19,780,802
--------------
Pharmaceuticals - 8.1%
Bristol-Myers Squibb Co. ............................. 46,290 2,644,316
Elan Corp. Plc, ADR *................................. 57,900 3,170,025
Johnson & Johnson..................................... 151,075 14,191,608
Merck & Co., Inc. .................................... 274,860 20,459,891
Pfizer, Inc. ......................................... 781,401 35,114,208
Pharmacia Corp. ...................................... 107,995 6,499,949
Teva Pharmaceutical Inds., Ltd., ADR.................. 81,706 5,979,858
--------------
88,059,855
--------------
INDUSTRIALS - 9.3%
Aerospace & Defense - 1.9%
B.F. Goodrich Co. .................................... 57,197 2,241,408
</TABLE>
115
<PAGE>
EVERGREEN
Stock Selector Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Aerospace & Defense - continued
Gen. Dynamics Corp. .................................. 159,782 $ 10,036,307
Lockheed Martin Corp. ................................ 152,692 5,032,728
Northrop Grumman Corp. ............................... 34,598 3,144,093
--------------
20,454,536
--------------
Airlines - 0.2%
AMR Corp. *........................................... 80,334 2,625,918
--------------
Commercial Services & Supplies - 0.2%
McGraw-Hill Co., Inc. ................................ 26,624 1,692,288
--------------
Electrical Equipment - 0.7%
Emerson Elec. Co. .................................... 121,689 8,153,163
--------------
Industrial Conglomerates - 6.3%
Dover Corp. .......................................... 117,447 5,512,669
Gen. Elec. Co. ....................................... 832,334 48,015,268
Minnesota Mining & Manufacturing Co. ................. 76,995 7,016,169
Tyco Intl., Ltd. ..................................... 157,804 8,186,082
--------------
68,730,188
--------------
INFORMATION TECHNOLOGY - 28.0%
Communications Equipment - 6.8%
Cisco Sys., Inc. *.................................... 582,948 32,207,877
Corning, Inc. ........................................ 43,093 12,798,621
Ericsson LM Telephone Co., Class B, ADR............... 169,952 2,517,414
Motorola, Inc. ....................................... 82,513 2,330,992
Nokia Corp., ADR...................................... 137,333 5,467,570
Nortel Networks Corp. ................................ 233,519 13,908,976
Scientific Atlanta, Inc. ............................. 78,901 5,020,076
--------------
74,251,526
--------------
Computers & Peripherals - 6.6%
Apple Computer *...................................... 72,391 1,864,068
Compaq Computer Corp. ................................ 603,599 16,647,260
EMC Corp. *........................................... 276,703 27,428,185
Hewlett-Packard Co. .................................. 79,940 7,754,180
Intl. Business Machines Corp. ........................ 66,427 7,473,038
Sun Microsystems, Inc. *.............................. 92,779 10,831,948
--------------
71,998,679
--------------
Electronic Equipment & Instruments - 1.7%
Flextronics Intl., Ltd. .............................. 67,626 5,553,785
JDS Uniphase Corp. *.................................. 57,360 5,431,275
SCI Sys., Inc. *...................................... 67,912 2,784,392
Solectron Corp. *..................................... 97,006 4,474,402
--------------
18,243,854
--------------
</TABLE>
116
<PAGE>
EVERGREEN
Stock Selector Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Internet Software & Services - 1.3%
America Online, Inc. *................................ 201,228 $ 10,816,005
Yahoo!, Inc. *........................................ 31,844 2,897,804
--------------
13,713,809
--------------
Semiconductor Equipment & Products - 5.8%
Advanced Micro Devices, Inc. *........................ 90,624 2,140,992
Applied Materials, Inc. *............................. 52,311 3,102,696
Intel Corp. .......................................... 483,131 20,080,132
KLA-Tencor Corp. *.................................... 120,132 4,947,937
Micron Tech., Inc. *.................................. 63,542 2,922,932
Natl. Semiconductor Corp. *........................... 67,812 2,729,433
Novellus Sys., Inc. *................................. 95,093 4,427,768
PMC-Sierra, Inc. *.................................... 1,122 241,510
Teradyne, Inc. *...................................... 56,141 1,964,935
Texas Instruments, Inc. .............................. 301,614 14,232,411
Vitesse Semiconductor Corp. *......................... 24,730 2,199,424
Xilinx, Inc. *........................................ 49,385 4,228,591
--------------
63,218,761
--------------
Software - 5.3%
Microsoft Corp. *..................................... 530,365 31,987,639
Oracle Sys. Corp. *................................... 220,656 17,376,660
Remedy Corp. *........................................ 37,611 709,908
Siebel Sys., Inc. *................................... 61,024 6,792,734
Veritas Software Corp. *.............................. 9,494 1,348,148
--------------
58,215,089
--------------
Specialty Retail - 0.5%
ADC Telecommunications, Inc. *........................ 189,895 5,106,395
--------------
MATERIALS - 1.4%
Chemicals - 0.5%
Dow Chemical Co. ..................................... 131,840 3,287,760
Millipore Corp. ...................................... 36,100 1,748,594
--------------
5,036,354
--------------
Metals & Mining - 0.9%
Alcoa, Inc. .......................................... 312,937 7,921,218
Worthington Inds., Inc. .............................. 227,121 2,129,259
--------------
10,050,477
--------------
TELECOMMUNICATION SERVICES - 3.8%
Diversified Telecommunication Services - 3.6%
AT&T Corp. ........................................... 71,803 2,109,213
BellSouth Corp. ...................................... 288,229 11,601,217
Qwest Communications Intl., Inc. *.................... 69,735 3,351,638
</TABLE>
117
<PAGE>
EVERGREEN
Stock Selector Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
TELECOMMUNICATION SERVICES - continued
Diversified Telecommunication Services - continued
SBC Communications, Inc. ....................... 55,147 $ 2,757,350
Verizon Communications. ........................ 136,496 6,611,525
WorldCom, Inc. ................................. 426,079 12,942,150
--------------
39,373,093
--------------
Wireless Telecommunications Services - 0.2%
Nextel Communications, Inc., Class A *.......... 41,008 1,917,124
--------------
UTILITIES - 4.2%
Electric Utilities - 3.3%
Duke Energy Corp. .............................. 50,203 4,304,907
Entergy Corp. .................................. 82,317 3,066,308
Florida Progress Corp. ......................... 42,864 2,269,113
PECO Energy Co. ................................ 209,351 12,678,820
Southern Co. ................................... 210,114 6,815,573
TXU Corp. ...................................... 69,208 2,742,367
Unicom Corp. ................................... 81,977 4,606,083
--------------
36,483,171
--------------
Gas Utilities - 0.9%
El Paso Energy Corp. ........................... 150,206 9,256,446
--------------
Total Common Stocks (cost $878,390,969)....... 1,081,224,537
--------------
<CAPTION>
Principal
Amount Value
<S> <C> <C>
SHORT-TERM INVESTMENTS - 2.9%
U.S. TREASURY OBLIGATIONS - 0.1%
U.S. Treasury Bills:
6.03%, 10/26/2000.............................. $ 450,000 448,191
6.09%, 11/24/2000.............................. 750,000 743,275
--------------
Total U.S. Treasury Obligations (cost
$1,191,466).................................. 1,191,466
--------------
<CAPTION>
Shares Value
<S> <C> <C>
MUTUAL FUND SHARES - 2.8%
Evergreen Select Money Market Fund o ........... 8,708,618 8,708,618
Navigator Prime Portfolio pp ................... 21,904,181 21,904,181
--------------
Total Short-Term Investments (cost $30,612,799).......... 30,612,799
--------------
Total Investments - (cost $910,195,234) - 102.1%............. 1,113,028,802
Other Assets and Liabilities - (2.1%)........................ (22,964,946)
--------------
Net Assets - 100.0%.......................................... $1,090,063,856
==============
</TABLE>
See Combined Notes to Schedules of Investments.
118
<PAGE>
EVERGREEN
Tax Strategic Equity Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 99.8%
CONSUMER DISCRETIONARY - 10.0%
Auto Components - 0.0%
Visteon Corp. ............................................ 261 $ 3,948
-----------
Automobiles - 0.5%
Ford Motor Co. ........................................... 3,496 88,493
General Motors Corp. * ................................... 827 53,755
-----------
142,248
-----------
Household Durables - 0.2%
Ethan Allen Interiors, Inc. .............................. 1,500 42,469
-----------
Media - 4.9%
Clear Channel Communications, Inc. * ..................... 1,700 96,050
Disney (Walt) Co. ........................................ 10,900 416,925
Time Warner, Inc. ........................................ 8,800 688,600
Viacom, Inc., Class B * .................................. 2,819 164,911
-----------
1,366,486
-----------
Multi-line Retail - 3.0%
Consolidated Stores Corp. * .............................. 8,600 116,100
Costco Wholesale Corp. * ................................. 1,800 62,888
Sears, Roebuck & Co. ..................................... 6,248 202,560
Target Corp. ............................................. 1,600 41,000
Wal-Mart Stores, Inc. .................................... 8,700 418,687
-----------
841,235
-----------
Specialty Retail - 1.4%
Home Depot, Inc. ......................................... 3,900 206,944
RadioShack Corp. ......................................... 2,000 129,250
Tiffany & Co. ............................................ 1,000 38,562
-----------
374,756
-----------
CONSUMER STAPLES - 4.4%
Beverages - 2.3%
Adolph Coors Co., Class B ................................ 900 56,869
Anheuser Busch Cos., Inc. ................................ 3,000 126,938
Coca-Cola Femsa SA, ADR .................................. 10,000 200,000
Pepsico, Inc. ............................................ 5,400 248,400
-----------
632,207
-----------
Food & Drug Retailing - 0.4%
CVS Corp. ................................................ 1,500 69,469
Safeway, Inc. * .......................................... 800 37,350
-----------
106,819
-----------
Food Products - 0.6%
Conagra, Inc. ............................................ 8,500 170,531
-----------
Health Care Equipment & Supplies - 0.6%
SuperValu, Inc. .......................................... 10,500 158,156
-----------
</TABLE>
119
<PAGE>
EVERGREEN
Tax Strategic Equity Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER STAPLES - continued
Household Products - 0.4%
Procter & Gamble Co. ..................................... 1,700 $ 113,900
-----------
Personal Products - 0.1%
Colgate-Palmolive Co. *................................... 950 44,840
-----------
ENERGY - 6.9%
Energy Equipment & Services - 0.8%
Baker Hughes, Inc. ....................................... 2,400 89,100
Halliburton Co. .......................................... 800 39,150
Schlumberger, Ltd. ....................................... 1,000 82,312
Transocean Sedco Forex, Inc. ............................. 193 11,315
-----------
221,877
-----------
Oil & Gas - 6.1%
Ashland, Inc. ............................................ 900 30,319
Chevron Corp. ............................................ 2,000 170,500
Exxon Mobil Corp. ........................................ 10,252 913,709
Occidental Petroleum Corp. ............................... 2,825 61,620
Royal Dutch Petroleum Co. ................................ 4,900 293,694
Sunoco, Inc. ............................................. 2,200 59,263
Texaco, Inc. ............................................. 500 26,250
Tosco Corp. .............................................. 2,091 65,213
USX-Marathon Group. ...................................... 2,222 63,049
-----------
1,683,617
-----------
FINANCIALS - 15.9%
Banks - 4.9%
Bank of America Corp. .................................... 8,700 455,662
Bank of New York Co., Inc. ............................... 1,600 89,700
Chase Manhattan Corp. .................................... 2,355 108,772
Golden West Finl. Corp. .................................. 2,500 134,063
J.P. Morgan & Co., Inc. *................................. 1,100 179,712
PNC Finl. Svcs. Group. ................................... 1,500 97,500
Washington Mutual, Inc. .................................. 6,000 238,875
Wells Fargo Co. .......................................... 1,200 55,125
-----------
1,359,409
-----------
Diversified Financials - 6.7%
American Express Co. ..................................... 6,000 364,500
Citigroup, Inc. .......................................... 9,800 529,812
Fannie Mae Co. ........................................... 1,700 121,550
Merrill Lynch & Co., Inc. ................................ 8,000 528,000
Morgan Stanley Dean Witter & Co. ......................... 2,460 224,936
Ryder Sys., Inc. ......................................... 3,800 70,063
-----------
1,838,861
-----------
</TABLE>
120
<PAGE>
EVERGREEN
Tax Strategic Equity Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
FINANCIALS - continued
Insurance - 4.3%
AFLAC, Inc. .............................................. 5,000 $ 320,313
American Intl. Group, Inc. ............................... 4,893 468,199
Mony Group, Inc. ......................................... 10,000 398,750
-----------
1,187,262
-----------
HEALTH CARE - 12.8%
Biotechnology - 0.5%
Amgen, Inc. *............................................. 2,100 146,639
Edwards Lifesciences Corp. ............................... 80 1,745
-----------
148,384
-----------
Health Care Equipment & Supplies - 2.1%
Baxter Intl., Inc. ....................................... 400 31,925
Guidant Corp. *........................................... 400 28,275
Medtronic, Inc. .......................................... 4,000 207,250
PE Corp-PE Biosystems Group............................... 2,700 314,550
-----------
582,000
-----------
Health Care Providers & Services - 0.7%
Aetna, Inc. .............................................. 1,000 58,063
Tenet Healthcare Corp. *.................................. 3,300 120,037
-----------
178,100
-----------
Pharmaceuticals - 9.5%
Abbott Laboratories....................................... 6,500 309,156
American Home Products Corp. ............................. 2,500 141,406
Bristol-Myers Squibb Co. ................................. 3,600 205,650
Eli Lilly & Co. .......................................... 1,900 154,137
Johnson & Johnson......................................... 1,000 93,938
Merck & Co., Inc. ........................................ 6,800 506,175
Pfizer, Inc. ............................................. 18,800 844,825
Pharmacia Corp. .......................................... 952 57,299
Schering-Plough Corp. .................................... 3,250 151,125
Teva Pharmaceutical Inds., Ltd., ADR. .................... 2,400 175,650
-----------
2,639,361
-----------
INDUSTRIALS - 10.8%
Aerospace & Defense - 1.0%
Boeing Co. ............................................... 1,000 63,000
General Motors Corp., Class H *........................... 3,570 132,733
United Technologies Corp. ................................ 1,000 69,250
-----------
264,983
-----------
Air Freight & Couriers - 0.2%
United Parcel Svcs., Inc., Class B ....................... 820 46,227
-----------
</TABLE>
121
<PAGE>
EVERGREEN
Tax Strategic Equity Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Airlines - 0.7%
AMR Corp. *............................................... 3,734 $ 122,055
Delta Air Lines, Inc. .................................... 1,855 82,316
-----------
204,371
-----------
Commercial Services & Supplies - 1.1%
Automatic Data Processing, Inc. .......................... 1,000 66,875
Computer Sciences Corp. *................................. 2,000 148,500
First Data Corp. ......................................... 800 31,250
Pitney Bowes, Inc. ....................................... 1,500 59,156
-----------
305,781
-----------
Industrial Conglomerates - 7.4%
General Elec. Co. ........................................ 27,180 1,567,946
Honeywell Intl., Inc. .................................... 3,750 133,594
Minnesota Mining & Manufacturing Co. ..................... 1,400 127,575
Tyco Intl., Ltd. ......................................... 4,300 223,062
-----------
2,052,177
-----------
Real Estate - 0.4%
Inversiones y Representaciones, SA, GDR .................. 5,148 118,887
-----------
INFORMATION TECHNOLOGY - 29.4%
Communications Equipment - 8.4%
Cisco Sys., Inc. *........................................ 15,300 845,325
Corning, Inc. ............................................ 770 228,690
Ericsson LM Telephone Co., Class B, ADR .................. 4,800 71,100
Juniper Networks, Inc. ................................... 800 175,150
Motorola, Inc. ........................................... 5,400 152,550
Nokia Corp., ADR ......................................... 6,800 270,725
Nortel Networks Corp. .................................... 9,860 587,286
-----------
2,330,826
-----------
Computers & Peripherals - 7.7%
Compaq Computer Corp. .................................... 3,000 82,740
Dell Computer Corp. *..................................... 4,000 123,250
EMC Corp. *............................................... 5,800 574,925
Gateway, Inc. *........................................... 1,000 46,750
Hewlett-Packard Co. ...................................... 2,000 194,000
Intl. Business Machines Corp. ............................ 6,000 675,000
Sun Microsystems, Inc. *.................................. 3,800 443,650
-----------
2,140,315
-----------
Electronic Equipment & Instruments - 3.0%
Agilent Technologies, Inc. ............................... 762 37,291
JDS Uniphase Corp. *...................................... 4,038 382,348
Meade Instruments Corp. * *............................... 20,700 417,881
-----------
837,520
-----------
</TABLE>
122
<PAGE>
EVERGREEN
Tax Strategic Equity Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Internet Software & Services - 2.3%
America Online, Inc. *.................................... 7,500 $ 403,125
Ariba, Inc. .............................................. 900 128,939
Yahoo!, Inc. *............................................ 1,200 109,200
-----------
641,264
-----------
Semiconductor Equipment & Products - 5.0%
Advanced Micro Devices, Inc. *............................ 1,876 44,321
Applied Materials, Inc. *................................. 2,400 142,350
Broadcom Corp., Class A *................................. 666 162,337
Intel Corp. .............................................. 19,200 798,000
Micron Tech., Inc. *...................................... 1,300 59,800
Texas Instruments, Inc. .................................. 3,400 160,437
-----------
1,367,245
-----------
Software - 3.0%
Oracle Sys. Corp. *....................................... 7,500 590,625
Siebel Sys., Inc. *....................................... 1,000 111,313
Veritas Software Corp. *.................................. 800 113,600
-----------
815,538
-----------
MATERIALS - 1.0%
Chemicals - 0.8%
DuPont (E.I.) De Nemours & Co. ........................... 2,000 82,875
Eastman Chemical Co. ..................................... 1,600 59,100
W.R. Grace & Co. *........................................ 10,000 68,750
-----------
210,725
-----------
Metals & Mining - 0.2%
Allegheny Technologies, Inc. ............................. 3,200 58,000
-----------
TELECOMMUNICATION SERVICES - 6.1%
Diversified Telecommunication Services - 4.3%
BellSouth Corp. .......................................... 4,000 161,000
Global Crossing, Ltd. *................................... 18,050 559,550
SBC Communications, Inc. ................................. 6,400 320,000
Sprint Corp. ............................................. 3,600 105,525
WorldCom, Inc. ........................................... 1,600 48,600
-----------
1,194,675
-----------
Wireless Telecommunications Services - 1.8%
Nextel Communications, Inc., Class A *.................... 7,400 345,950
Sprint Corp. (PCS Group), Ser. 1 *........................ 4,000 140,250
-----------
486,200
-----------
</TABLE>
123
<PAGE>
EVERGREEN
Tax Strategic Equity Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
UTILITIES - 2.5%
Electric Utilities - 2.0%
Duke Energy Corp. ....................................... 1,400 $ 120,050
Entergy Corp. ........................................... 3,600 134,100
Reliant Energy, Inc. .................................... 6,300 292,950
-----------
547,100
-----------
Gas Utilities - 0.5%
Sempra Energy............................................ 7,200 149,850
-----------
Total Common Stocks (cost $22,087,979)................. 27,608,150
-----------
SHORT-TERM INVESTMENTS - 0.4%
MUTUAL FUND SHARES - 0.4% (cost $106,298)
Evergreen Select Money Market Fund o .................... 106,298 106,298
-----------
Total Investments - (cost $22,194,277) - 100.2%.................... 27,714,448
Other Assets and Liabilities - (0.2%).............................. (51,679)
-----------
Net Assets - 100.0%................................................ $27,662,769
===========
</TABLE>
See Combined Notes to Schedules of Investments.
124
<PAGE>
Combined Notes to Schedules of Investments
144A Security that may be sold to qualified institutional buyers under Rule
144A of the Securities Act of 1933, as amended. This security has been
determined to be liquid under guidelines established by the Board of
Trustees.
* Non-income producing security.
p The repurchase agreement is fully collateralized by $74,305,000 FNMA,
6.00%, 11/15/2001; value including accrued interest is $75,560,755.
pp Represents investment of cash collateral received for securities on
loan.
o The advisor of the Fund and the advisor of the Money Market Fund are
each a subsidiary of First Union National Bank.
Summary of Abbreviations:
ADR American Depository Receipt
REIT Real Estate Investment Trust
See Combined Notes to Financial Statements.
125
<PAGE>
EVERGREEN
Domestic Growth Funds
Statements of Assets and Liabilities
September 30, 2000
<TABLE>
<CAPTION>
Large Company
Aggressive Capital Growth
Growth Fund Growth Fund Evergreen Fund Growth Fund Fund
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Identified cost of
securities............ $418,781,880 $388,724,792 $1,290,072,016 $556,392,046 $ 972,652,185
Identified cost of
repurchase
agreements............ 0 0 0 73,994,235 0
Net unrealized gains on
securities............ 113,160,248 76,325,202 380,046,551 174,785,069 316,706,199
---------------------------------------------------------------------------------------------------
Market value of
securities............ 531,942,128 465,049,994 1,670,118,567 805,171,350 1,289,358,384
Cash................... 0 0 0 0 14
Receivable for
securities sold....... 997,039 0 0 20,107,075 24,158,437
Receivable for Fund
shares sold........... 1,273,346 1,667,281 94,973 451,030 380,121
Dividends and interest
receivable............ 129,297 796,254 1,239,213 109,617 318,693
Prepaid expenses and
other assets.......... 33,451 47,832 60,345 27,075 133,907
---------------------------------------------------------------------------------------------------
Total assets........... 534,375,261 467,561,361 1,671,513,098 825,866,147 1,314,349,556
---------------------------------------------------------------------------------------------------
Liabilities
Payable for securities
purchased............. 11,702,077 0 11,898,245 8,248,766 69,437,784
Payable for Fund shares
redeemed.............. 339,137 734,530 2,396,250 767,866 568,166
Payable for securities
on loan............... 38,713,146 2,148,016 44,072,483 119,527,312 58,223,986
Due to custodian bank.. 0 0 0 543 0
Advisory fee payable... 20,858 30,574 108,237 40,167 40,925
Distribution Plan
expenses payable...... 18,337 24,441 50,342 39,120 30,550
Due to other related
parties............... 4,011 5,733 18,228 8,607 9,896
Accrued expenses and
other liabilities..... 83,007 301,028 375,403 247,151 216,016
---------------------------------------------------------------------------------------------------
Total liabilities...... 50,880,573 3,244,322 58,919,188 128,879,532 128,527,323
---------------------------------------------------------------------------------------------------
Net assets.............. $483,494,688 $464,317,039 $1,612,593,910 $696,986,615 $1,185,822,233
---------------------------------------------------------------------------------------------------
Net assets represented
by
Paid-in capital........ $236,845,728 $349,451,026 $1,218,431,099 $375,685,113 $ 660,982,146
Undistributed net
investment loss....... (18,939) (3,615) (140,416) (4,625) (45,009)
Accumulated net
realized gains on
securities and foreign
currency related
transactions.......... 133,507,651 38,544,426 14,256,676 146,521,058 208,179,129
Net unrealized gains on
securities and foreign
currency related
transactions.......... 113,160,248 76,325,202 380,046,551 174,785,069 316,705,967
---------------------------------------------------------------------------------------------------
Total net assets........ $483,494,688 $464,317,039 $1,612,593,910 $696,986,615 $1,185,822,233
---------------------------------------------------------------------------------------------------
Net assets consists of
Class A................ $284,983,903 $222,615,238 $ 161,492,372 $114,248,344 $1,089,597,249
Class B................ 134,251,556 18,422,897 553,009,245 6,154,631 86,446,370
Class C................ 15,735,867 223,241,545 10,915,350 439,879,291 7,176,475
Class Y................ 48,523,362 37,359 887,176,943 136,704,349 2,602,139
Class IS............... 0 0 0 0 0
---------------------------------------------------------------------------------------------------
Total net assets........ $483,494,688 $464,317,039 $1,612,593,910 $696,986,615 $1,185,822,233
---------------------------------------------------------------------------------------------------
Shares outstanding
Class A................ 7,472,162 8,157,181 9,565,558 4,549,527 86,235,817
Class B................ 3,677,895 679,476 34,118,551 256,807 7,003,393
Class C................ 432,046 8,757,612 674,803 18,372,987 580,957
Class Y................ 1,248,815 1,359 51,570,907 5,407,087 208,018
Class IS............... 0 0 0 0 0
---------------------------------------------------------------------------------------------------
Net asset value per
share
Class A................ $ 38.14 $ 27.29 $ 16.88 $ 25.11 $ 12.64
---------------------------------------------------------------------------------------------------
Class A--Offering price
(based on
sales charge of
4.75%)................ $ 40.04 $ 28.65 $ 17.72 $ 26.36 $ 13.27
---------------------------------------------------------------------------------------------------
Class B................ $ 36.50 $ 27.11 $ 16.21 $ 23.97 $ 12.34
---------------------------------------------------------------------------------------------------
Class C................ $ 36.42 $ 25.49 $ 16.18 $ 23.94 $ 12.35
---------------------------------------------------------------------------------------------------
Class Y................ $ 38.86 $ 27.49 $ 17.20 $ 25.28 $ 12.51
---------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
126
<PAGE>
EVERGREEN
Domestic Growth Funds
Statements of Assets and Liabilities
September 30, 2000
<TABLE>
<CAPTION>
Tax
Small Company Stock Strategic
Omega Growth Selector Equity
Masters Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Identified cost of
securities............ $302,206,658 $2,280,148,101 $1,243,136,067 $ 910,195,234 $22,194,277
Net unrealized gains on
securities............ 37,094,503 459,422,617 258,156,058 202,833,568 5,520,171
----------------------------------------------------------------------------------------------------
Market value of
securities............ 339,301,161 2,739,570,718 1,501,292,125 1,113,028,802 27,714,448
Cash................... 0 0 1,066,204 0 0
Receivable for
securities sold....... 4,977,321 13,693,809 23,796,769 216,970 571,500
Receivable for Fund
shares sold........... 1,073,339 22,792,997 2,335,689 1,740,260 98,533
Dividends and interest
receivable............ 198,079 1,046,959 474,597 1,041,501 13,563
Receivable from
investment advisor.... 0 0 0 10,764 0
Prepaid expenses and
other assets.......... 10,083 160,520 90,599 63,006 27,428
----------------------------------------------------------------------------------------------------
Total assets........... 345,559,983 2,777,265,003 1,529,055,983 1,116,101,303 28,425,472
----------------------------------------------------------------------------------------------------
Liabilities
Payable for securities
purchased............. 3,074,998 98,537,270 25,817,204 199,377 586,573
Payable for Fund shares
redeemed.............. 401,800 1,837,135 3,364,828 3,502,818 163,902
Payable for securities
on loan............... 0 152,030,892 295,255,294 21,904,181 0
Payable for daily
variation margin on
open futures
contracts............. 0 0 0 150,525 0
Advisory fee payable... 24,593 98,703 41,197 0 2,018
Distribution Plan
expenses payable...... 15,953 153,546 30,459 0 1,718
Due to other related
parties............... 2,827 20,950 9,984 9,096 232
Accrued expenses and
other liabilities..... 65,025 439,722 235,363 271,450 8,260
----------------------------------------------------------------------------------------------------
Total liabilities...... 3,585,196 253,118,218 324,754,329 26,037,447 762,703
----------------------------------------------------------------------------------------------------
Net assets.............. $341,974,787 $2,524,146,785 $1,204,301,654 $1,090,063,856 $27,662,769
----------------------------------------------------------------------------------------------------
Net assets represented
by
Paid-in capital........ $262,966,176 $1,949,446,451 $ 581,701,155 $ 868,302,164 $23,278,864
Undistributed net
investment loss....... (8,072) (23,882) (55,171) (11,890) 0
Accumulated net
realized gains or
losses on securities,
futures and foreign
currency related
transactions.......... 41,922,180 115,301,599 364,499,612 19,105,403 (1,136,266)
Net unrealized gains on
securities, futures
and foreign currency
related transactions.. 37,094,503 459,422,617 258,156,058 202,668,179 5,520,171
----------------------------------------------------------------------------------------------------
Total net assets........ $341,974,787 $2,524,146,785 $1,204,301,654 $1,090,063,856 $27,662,769
----------------------------------------------------------------------------------------------------
Net assets consists of
Class A................ $192,472,661 $ 865,958,307 $1,109,984,708 $ 22,907,663 $ 8,156,568
Class B................ 133,636,618 1,349,646,886 81,198,063 2,704,498 13,346,224
Class C................ 11,386,983 285,021,653 8,546,968 408,638 5,062,825
Class Y................ 4,478,525 23,519,939 4,571,915 1,062,608,004 1,097,152
Class IS............... 0 0 0 1,435,053 0
----------------------------------------------------------------------------------------------------
Total net assets........ $341,974,787 $2,524,146,785 $1,204,301,654 $1,090,063,856 $27,662,769
----------------------------------------------------------------------------------------------------
Shares outstanding
Class A................ 14,554,153 22,245,124 105,061,658 1,294,894 516,992
Class B................ 10,227,580 37,577,105 7,846,269 157,146 857,305
Class C................ 872,769 7,915,733 825,227 23,353 324,688
Class Y................ 337,443 599,504 429,711 59,776,592 69,065
Class IS............... 0 0 0 81,133 0
----------------------------------------------------------------------------------------------------
Net asset value per
share
Class A................ $ 13.22 $ 38.93 $ 10.57 $ 17.69 $ 15.78
----------------------------------------------------------------------------------------------------
Class A--Offering price
(based on
sales charge of
4.75%)................ $ 13.88 $ 40.87 $ 11.09 $ 18.57 $ 16.56
----------------------------------------------------------------------------------------------------
Class B................ $ 13.07 $ 35.92 $ 10.35 $ 17.21 $ 15.57
----------------------------------------------------------------------------------------------------
Class C................ $ 13.05 $ 36.01 $ 10.36 $ 17.50 $ 15.59
----------------------------------------------------------------------------------------------------
Class Y................ $ 13.27 $ 39.23 $ 10.64 $ 17.78 $ 15.89
----------------------------------------------------------------------------------------------------
Class IS............... -- -- -- $ 17.69 --
----------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
127
<PAGE>
EVERGREEN
Domestic Growth Funds
Statements of Operations
Year Ended September 30, 2000
<TABLE>
<CAPTION>
Large
Aggressive Capital Evergreen Company
Growth Fund Growth Fund Fund Growth Fund Growth Fund
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income
Dividends (net of
foreign withholding
taxes of $6,241, $0,
$105,285, $0, $65,131,
respectively)......... $ 779,603 $ 6,144,245 $ 15,346,704 $ 454,372 $ 4,799,501
Securities lending
income................ 37,286 13,669 21,677 284,575 445,471
Interest............... 871,386 1,336,366 2,655,708 2,377,218 1,965,161
----------------------------------------------------------------------------------------------
Total investment
income................. 1,688,275 7,494,280 18,024,089 3,116,165 7,210,133
----------------------------------------------------------------------------------------------
Expenses
Advisory fee........... 2,103,035 3,789,146 15,812,585 4,189,088 5,203,977
Distribution Plan
expenses.............. 1,681,288 2,946,915 6,986,166 4,343,000 3,726,079
Administrative services
fees.................. 334,559 710,465 1,395,821 897,662 1,360,194
Transfer agent fee..... 728,666 1,584,265 4,407,089 1,269,106 961,318
Trustees' fees and
expenses.............. 7,909 9,591 39,567 11,915 24,152
Printing and postage
expenses.............. 49,196 127,615 267,013 382,822 172,630
Custodian fee.......... 107,817 203,468 673,763 159,663 319,328
Registration and filing
fees.................. 74,064 110,253 114,050 111,291 294,187
Professional fees...... 23,018 22,698 35,521 47,647 20,996
Organization expenses.. 4,342 0 0 0 0
Other.................. 13,031 90,407 86,377 64,458 63,225
----------------------------------------------------------------------------------------------
Total expenses......... 5,126,925 9,594,823 29,817,952 11,476,652 12,146,086
Less: Expense
reductions............ (28,838) (21,482) (291,794) (31,143) (92,679)
----------------------------------------------------------------------------------------------
Net expenses........... 5,098,087 9,573,341 29,526,158 11,445,509 12,053,407
----------------------------------------------------------------------------------------------
Net investment income.. (3,409,812) (2,079,061) (11,502,069) (8,329,344) (4,843,274)
----------------------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities
and foreign currency
related transactions
Net realized gains or
losses on:
Securities............. 155,458,871 53,670,631 796,280,843 174,193,814 245,945,669
Foreign currency
related transactions.. 0 0 0 (13) 110,772
----------------------------------------------------------------------------------------------
Net realized gains on
securities and foreign
currency related
transactions.......... 155,458,871 53,670,631 796,280,843 174,193,801 246,056,441
----------------------------------------------------------------------------------------------
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. 16,115,705 6,248,890 (565,166,402) 107,614,461 70,790,484
----------------------------------------------------------------------------------------------
Net realized and
unrealized gains on
securities and foreign
currency related
transactions.......... 171,574,576 59,919,521 231,114,441 281,808,262 316,846,925
----------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ $168,164,764 $57,840,460 $219,612,372 $273,478,918 $312,003,651
----------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
128
<PAGE>
EVERGREEN
Domestic Growth Funds
Statements of Operations
Year Ended September 30, 2000
<TABLE>
<CAPTION>
Tax
Small Stock Strategic
Masters Company Selector Equity
Fund Omega Fund Growth Fund Fund Fund
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income
Dividends (net of
foreign withholding
taxes of $12,688,
$26,451, $4,397,
$24,592, $1,456,
respectively)......... $ 1,800,864 $ 4,670,512 $ 3,076,880 $ 5,635,211 $ 180,571
Securities lending
income................ 0 586,600 1,056,046 18,804 0
Interest............... 665,397 4,359,090 2,058,242 570,554 122,343
--------------------------------------------------------------------------------------------
Total investment
income................. 2,466,261 9,616,202 6,191,168 6,224,569 302,914
--------------------------------------------------------------------------------------------
Expenses
Advisory fee........... 2,738,157 8,565,213 5,073,245 4,053,844 225,143
Distribution Plan
expenses.............. 1,641,159 11,581,226 3,663,218 89,484 179,357
Administrative services
fees.................. 253,576 1,446,746 936,398 499,952 21,246
Transfer agent fee..... 860,871 4,086,305 1,973,334 177,486 29,219
Trustees' fees and
expenses.............. 6,136 33,049 23,564 12,077 513
Printing and postage
expenses.............. 46,632 209,160 228,381 137,363 5,744
Custodian fee.......... 72,416 455,413 400,530 157,980 10,374
Registration and filing
fees.................. 99,501 465,421 145,432 140,818 42,480
Professional fees...... 20,941 20,902 43,551 40,762 16,656
Other.................. 20,079 238,947 30,408 13,259 2,371
--------------------------------------------------------------------------------------------
Total expenses......... 5,759,468 27,102,382 12,518,061 5,323,025 533,103
Less: Expense
reductions............ (12,150) (111,680) (175,291) (27,955) (5,191)
Fee waivers.......... 0 0 0 (371,302) (2,218)
--------------------------------------------------------------------------------------------
Net expenses........... 5,747,318 26,990,702 12,342,770 4,923,768 525,694
--------------------------------------------------------------------------------------------
Net investment income.. (3,281,057) (17,374,500) (6,151,602) 1,300,801 (222,780)
--------------------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities,
futures contracts and
foreign currency
related transactions
Net realized gains or
losses on:
Securities............. 49,164,620 130,394,397 466,895,429 95,804,667 (545,749)
Futures contracts...... 0 0 0 (489,416) 0
Foreign currency
related transactions.. 1,572 0 0 0 0
--------------------------------------------------------------------------------------------
Net realized gains or
losses on securities,
futures contracts and
foreign currency
related transactions.. 49,166,192 130,394,397 466,895,429 95,315,251 (545,749)
--------------------------------------------------------------------------------------------
Net change in
unrealized gains on
securities and foreign
currency related
transactions.......... 31,993,883 340,929,558 52,667,870 (39,270,021) 2,929,096
--------------------------------------------------------------------------------------------
Net realized and
unrealized gains on
securities, futures
contracts and foreign
currency related
transactions.......... 81,160,075 471,323,955 519,563,299 56,045,230 2,383,347
--------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ $77,879,018 $453,949,455 $513,411,697 $ 57,346,031 $2,160,567
--------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
129
<PAGE>
EVERGREEN
Domestic Growth Funds
Statements of Changes in Net Assets
Year Ended September 30, 2000
<TABLE>
<CAPTION>
Aggressive Capital Large Company
Growth Growth Growth Growth
Fund Fund Evergreen Fund Fund Fund
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations
Net investment loss.... $ (3,409,812) $ (2,079,061) $ (11,502,069) $ (8,329,344) $ (4,843,274)
Net realized gains on
securities and foreign
currency related
transactions.......... 155,458,871 53,670,631 796,280,843 174,193,801 246,056,441
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. 16,115,705 6,248,890 (565,166,402) 107,614,461 70,790,484
-------------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ 168,164,764 57,840,460 219,612,372 273,478,918 312,003,651
-------------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net realized gains
Class A................ (20,816,668) (5,632,668) (68,057,666) (4,502,995) (140,706,662)
Class B................ (7,498,495) (18,912) (239,465,206) (3,857) (17,025,506)
Class C................ (661,363) (5,500,066) (4,998,787) (17,616,171) (406,532)
Class Y................ (3,525,812) (28) (382,244,628) (2,301,558) (43,520)
-------------------------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (32,502,338) (11,151,674) (694,766,287) (24,424,581) (158,182,220)
-------------------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 187,916,768 87,533,172 1,384,224,662 165,547,325 131,708,753
Payment for shares
redeemed.............. (124,904,294) (219,737,375) (1,860,052,897) (203,481,596) (206,283,347)
Net asset value of
shares issued in
reinvestment of
distributions......... 28,278,050 10,859,838 638,036,211 23,726,826 138,920,109
-------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... 91,290,524 (121,344,365) 162,207,976 (14,207,445) 64,345,515
-------------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... 226,952,950 (74,655,579) (312,945,939) 234,846,892 218,166,946
Net assets
Beginning of period.... 256,541,738 538,972,618 1,925,539,849 462,139,723 967,655,287
-------------------------------------------------------------------------------------------------------
End of period.......... $ 483,494,688 $ 464,317,039 $ 1,612,593,910 $ 696,986,615 $1,185,822,233
-------------------------------------------------------------------------------------------------------
Undistributed net
investment loss........ $ (18,939) $ (3,615) $ (140,416) $ (4,625) $ (45,009)
-------------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
130
<PAGE>
EVERGREEN
Domestic Growth Funds
Statements of Changes in Net Assets
Year Ended September 30, 2000
<TABLE>
<CAPTION>
Small Company Tax
Omega Growth Stock Selector Strategic
Masters Fund Fund Fund Fund Equity Fund
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations
Net investment income
(loss)................ $ (3,281,057) $ (17,374,500) $ (6,151,602) $ 1,300,801 $ (222,780)
Net realized gains or
losses on securities;
futures contracts and
foreign currency
related transactions.. 49,166,192 130,394,397 466,895,429 95,315,251 (545,749)
Net change in
unrealized gains on
securities and foreign
currency related
transactions.......... 31,993,883 340,929,558 52,667,870 (39,270,021) 2,929,096
----------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ 77,879,018 453,949,455 513,411,697 57,346,031 2,160,567
----------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income..
Class A................ 0 0 0 0 0
Class B................ 0 0 0 0 0
Class C................ 0 0 0 0 0
Class Y................ 0 0 0 (281,763) 0
Class IS............... 0 0 0 0 0
Net realized gains
Class A................ 0 (14,155,787) 0 (5,418,693) 0
Class B................ 0 (16,797,293) 0 (667,652) 0
Class C................ 0 (1,310,986) 0 (72,030) 0
Class Y................ 0 (187,473) 0 (101,755,884) 0
Class IS............... 0 0 0 (126) 0
----------------------------------------------------------------------------------------------------
Total distributions to
shareholders.......... 0 (32,451,539) 0 (108,196,148) 0
----------------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 66,969,165 1,500,835,686 341,779,432 91,238,942 14,170,730
Payment for shares
redeemed.............. (61,884,286) (203,916,834) (473,371,312) (291,460,568) (6,221,708)
Net asset value of
shares issued in
reinvestment of
distributions......... 0 29,898,047 0 89,713,224 0
Net asset value of
shares issued in
acquisition........... 0 0 0 751,110,665 0
----------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
capital share
transactions.......... 5,084,879 1,326,816,899 (131,591,880) 640,602,263 7,949,022
----------------------------------------------------------------------------------------------------
Total increase in net
assets............... 82,963,897 1,748,314,815 381,819,817 589,752,146 10,109,589
Net assets
Beginning of period.... 259,010,890 775,831,970 822,481,837 500,311,710 17,553,180
----------------------------------------------------------------------------------------------------
End of period.......... $341,974,787 $2,524,146,785 $1,204,301,654 $1,090,063,856 $27,662,769
----------------------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income
(loss)................. $ (8,072) $ (23,882) $ (55,171) $ (11,890) $ 0
----------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
131
<PAGE>
EVERGREEN
Domestic Growth Funds
Statements of Changes in Net Assets
Year Ended September 30, 1999
<TABLE>
<CAPTION>
Large
Aggressive Capital Company
Growth Fund Growth Fund Evergreen Fund Growth Fund Growth Fund
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations
Net investment loss.... $ (2,572,063) $ (2,951,339) $ (1,256,075) $ (6,380,304) $ (3,745,527)
Net realized gains or
losses on securities
and foreign currency
related transactions.. 47,119,802 6,966,212 34,102,255 21,528,448 144,232,060
Net change in
unrealized gains on
securities and foreign
currency related
transactions.......... 26,781,815 63,612,291 265,253,469 50,477,009 107,095,909
-------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ 71,329,554 67,627,164 298,099,649 65,625,153 247,582,442
-------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class A................ 0 0 (344,730) 0 0
Class B................ 0 0 0 0 0
Class C................ 0 0 0 0 0
Class Y................ 0 0 (2,733,186) 0 0
Net realized gains
Class A................ (16,084,131) (16,362,218) (652,480) (2,988,098) (97,518,215)
Class B................ (4,545,584) 0 (2,054,332) 0 (19,003,185)
Class C................ (384,219) (23,300,909) (41,149) (15,033,436) (92,547)
Class Y................ (3,420,978) (125) (3,449,493) (1,016,636) 0
-------------------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (24,434,912) (39,663,252) (9,275,370) (19,038,170) (116,613,947)
-------------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 160,664,688 289,520,215 3,509,054,746 543,766,956 148,502,035
Payment for shares
redeemed.............. (178,215,913) (159,195,434) (3,764,445,912) (632,970,382) (251,438,959)
Net asset value of
shares issued in
reinvestment of
distributions......... 22,235,576 38,814,981 8,257,762 18,495,507 102,857,319
Net asset value of
shares issued in
acquisition........... 0 0 36,518,956 0 0
-------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... 4,684,351 169,139,762 (210,614,448) (70,707,919) (79,605)
-------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... 51,578,993 197,103,674 78,209,831 (24,120,936) 130,888,890
Net assets
Beginning of period.... 204,962,745 341,868,944 1,847,330,018 486,260,659 836,766,397
-------------------------------------------------------------------------------------------------
End of period.......... $256,541,738 $538,972,618 $1,925,539,849 $462,139,723 $967,655,287
-------------------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income
(loss)................. $ (15,427) 0 $ (111,928) 0 $ (29,927)
-------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
132
<PAGE>
EVERGREEN
Domestic Growth Funds
Statements of Changes in Net Assets
Year Ended September 30, 1999
<TABLE>
<CAPTION>
Small Stock Tax
Masters Company Selector Strategic
Fund (a) Omega Fund Growth Fund Fund Equity Fund
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations
Net investment income
(loss)................ $ (1,695,742) $ (4,934,184) $ (6,294,998) $ 359,279 $ (68,111)
Net realized gains or
losses on securities
and foreign currency
related transactions.. (389,241) 32,232,168 73,715,469 55,919,458 (556,814)
Net change in
unrealized gains on
securities and foreign
currency related
transactions.......... 5,100,620 78,923,602 216,564,571 80,892,386 2,456,449
----------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ 3,015,637 106,221,586 283,985,042 137,171,123 1,831,524
----------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class A................ 0 0 0 (5,558) (5,136)
Class B................ 0 0 0 0 (7,564)
Class C................ 0 0 0 0 (1,809)
Class Y................ 0 0 0 (490,627) (6,166)
Net realized gains.....
Class A................ 0 (18,881,795) (129,434,483) (3,569,299) 0
Class B................ 0 (14,406,403) (42,194,482) (120,260) 0
Class C................ 0 (1,728,482) (829,079) 0 0
Class Y................ 0 (112,388) (222,576) (90,604,377) 0
----------------------------------------------------------------------------------------------
Total distributions to
shareholders.......... 0 (35,129,068) (172,680,620) (94,790,121) (20,675)
----------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 308,336,791 547,549,257 427,997,897 209,754,401 18,078,274
Payment for shares
redeemed.............. (52,341,538) (159,851,713) (652,876,201) (287,629,154) (5,993,681)
Net asset value of
shares issued in
reinvestment of
distributions......... 0 32,430,705 142,159,901 94,489,967 18,071
----------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... 255,995,253 420,128,249 (82,718,403) 16,615,214 12,102,664
----------------------------------------------------------------------------------------------
Total increase in net
assets............... 259,010,890 491,220,767 28,586,019 58,996,216 13,913,513
Net assets
Beginning of period.... 0 284,611,203 793,895,818 441,315,494 3,639,667
----------------------------------------------------------------------------------------------
End of period.......... $259,010,890 $775,831,970 $822,481,837 $500,311,710 $17,553,180
----------------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income
(loss)................. $ (5,236) $ (8,206) $ (41,195) $ 94,561 0
----------------------------------------------------------------------------------------------
</TABLE>
(a) For the period from December 31, 1998 (commencement of operations) to Sep-
tember 30, 1999.
See Combined Notes to Financial Statements.
133
<PAGE>
Combined Notes to Financial Statements
1. ORGANIZATION
The Evergreen Domestic Growth Funds consist of Evergreen Aggressive Growth Fund
("Aggressive Growth Fund"), Evergreen Capital Growth Fund ("Capital Growth
Fund") (formerly, Mentor Capital Growth Portfolio), Evergreen Fund ("Evergreen
Fund"), Evergreen Growth Fund ("Growth Fund") (formerly, Mentor Growth Portfo-
lio), Evergreen Large Company Growth Fund ("Large Company Growth Fund") (for-
merly, Evergreen Strategic Growth Fund), Evergreen Masters Fund ("Masters
Fund"), Evergreen Omega Fund ("Omega Fund"), Evergreen Small Company Growth
Fund ("Small Company Growth Fund"), Evergreen Stock Selector Fund ("Stock Se-
lector Fund") and Evergreen Tax Strategic Equity Fund ("Tax Strategic Equity
Fund"), (collectively, the "Funds"). Each Fund is a diversified series of Ever-
green Equity Trust (the "Trust"), a Delaware business trust organized on Sep-
tember 18, 1997. The Trust is an open-end management investment company regis-
tered under the Investment Company Act of 1940, as amended (the "1940 Act").
Prior to October 18, 1999, the Capital Growth Fund and Growth Fund, were series
of Mentor Funds, a Massachusetts business trust.
The Funds offer Class A, Class B, Class C and Class Y shares. Class A shares
are sold with a front-end sales charge. Class B and Class C shares are sold
without a front-end sales charge, but pay a higher ongoing distribution fee
than Class A. Class B and Class C 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 Y shares are sold at net asset value
and are not subject to contingent deferred sales charges or distribution fees.
The Stock Selector Fund also offers Institutional Service shares ("Class IS").
This class of shares is sold without a front-end sales charge or contingent de-
ferred sales charge. These shares pay an ongoing service fee.
Effective October 18, 1999 and October 25, 1999, upon conversion of the respec-
tive Mentor Funds into series of Evergreen Delaware business trusts, the Class
A, Class B and Class Y shareholders of the former Mentor Growth Portfolio and
former Mentor Capital Growth Portfolio became shareholders of that number of
full and fractional shares of Class A, Class C and Class Y, respectively, of
Growth Fund and Capital Growth Fund, respectively. In addition, the Growth Fund
and Capital Growth Fund added a new class of shares designated as Class B.
Prior to the conversion, Class A shares of Capital Growth Fund and Growth Fund
were sold with a maximum sales charge of 5.75%.
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 the security is primarily traded. Securities traded on an exchange or NMS
and other securities traded in the over-the-counter market for which there has
been no sale are valued at the mean between the last reported bid and asked
price. Securities for which market quotations are not readily available (in-
cluding restricted securities) are valued at fair value as determined in good
faith according to procedures approved by the Board of Trustees. Mutual fund
shares held in a Fund are valued at the net asset value of each mutual fund.
Short-term investments with remaining maturities of 60 days or less are carried
at amortized cost, which approximates market value.
B. Repurchase Agreements
Securities pledged as collateral for repurchase agreements are held in a segre-
gated 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
134
<PAGE>
Combined Notes to Financial Statements (continued)
adequacy of the collateral daily and will require the seller to provide addi-
tional collateral in the event the market value of the securities pledged falls
below the carrying value of the repurchase agreement, including accrued inter-
est. Each Fund will only enter into repurchase agreements with banks and other
financial institutions, which are deemed by the investment advisor to be
creditworthy pursuant to guidelines established by the Board of Trustees.
Pursuant to an exemptive order issued by the Securities and Exchange Commis-
sion, the Funds may transfer uninvested cash balances into a joint trading ac-
count. These balances are invested 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 gain or loss on foreign currency related transactions includes foreign
currency gains and losses between trade date and settlement date on investment
securities transactions, gains and losses from foreign currency related trans-
actions and the difference between the amounts of interest and dividends re-
corded on the books of the Fund and the amount actually received. The portion
of foreign currency gains or losses related to fluctuations in exchange rates
between the initial purchase trade date and subsequent sale trade date is in-
cluded in realized gain or loss on securities.
D. Futures Contracts
In order to gain exposure to or protect against changes in security values, the
Funds may buy and sell futures contracts. The initial margin deposited with a
broker when entering into a futures transaction is subsequently adjusted by
daily payments or receipts ("variation margin") as the value of the contract
changes. Such changes are recorded as unrealized gains or losses. Realized
gains or losses are recognized on closing the contract.
Risks of entering into futures contracts include (i) the possibility of an il-
liquid market for the contract, (ii) the possibility that a change in the value
of the contract may not correlate with changes in the value of the underlying
instrument or index, and (iii) the credit risk that the other party will not
fulfill their obligations under the contract. Futures contracts also involve
elements of market risk in excess of the amount reflected in each Fund's State-
ment of Assets and Liabilities.
E. 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 assets or liabilities denominated in
a foreign currency. Forward contracts are recorded at the forward rate and
marked-to-market daily. Realized gains and losses arising from such transac-
tions are included in net realized gain or loss on foreign currency related
transactions. The Fund bears 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 contracts involve elements of market risk in excess of the
amount reflected in each Fund's Statement of Assets and Liabilities.
F. Securities Lending
In order to generate income and to offset expenses, the Funds may lend portfo-
lio securities to brokers, dealers and other qualified financial organizations.
Loans of securities 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 ac-
crued interest. The Fund monitors the adequacy of the collateral daily and will
require the borrower provide additional collateral as necessary. While such se-
curities are on loan, the borrower will pay a Fund any income accruing thereon,
and the Fund may invest any
135
<PAGE>
Combined Notes to Financial Statements (continued)
cash collateral received in portfolio securities, thereby increasing its re-
turn. A Fund will have the right to call any such loan and obtain the securi-
ties loaned at any time on five days' notice. The Fund bears the risk that the
borrower may not provide additional collateral when required or return the se-
curities when due.
G. 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 the dividend. Foreign income and capital
gains realized on some foreign securities may be subject to foreign taxes,
which are accrued as applicable.
H. Federal Taxes
The Funds intend to comply with the provisions of the Internal Revenue Code ap-
plicable to regulated investment companies and to distribute all of their net
investment company taxable income and net capital gains, if any, to their
shareholders. Accordingly, no provision for federal income or excise tax is re-
quired.
I. Distributions
Distributions from net investment income for the Funds are declared and paid
annually. Distributions from net realized capital gains, if any, are paid at
least annually. To the extent that realized capital gains can be offset by cap-
ital loss carryforwards, it is each Fund's policy not to distribute such gains.
Distributions to shareholders are recorded at the close of business on the ex-
dividend date.
Income and capital gains distributions to shareholders are determined in accor-
dance with income tax regulations, which may differ from generally accepted ac-
counting principles. Reclassifications have been made to the Funds' components
of net assets to reflect income and gains available for distribution (or avail-
able capital loss carryovers, as applicable) under income tax regulations. The
primary permanent differences causing such reclassifications are due to equal-
ization.
J. Class Allocations
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses are prorated among the classes based on the rela-
tive net assets of each class. Currently, class specific expenses are limited
to expenses incurred under the Distribution Plans for each class.
K. Organization Expenses
Organization expenses for Aggressive Growth Fund are amortized to operations
over a five-year period on a straight-line basis. In the event any of the ini-
tial shares of the Fund are redeemed by any holder during the five-year amorti-
zation period, redemption proceeds will be reduced by any unamortized organiza-
tion expenses in the same proportion as the number of initial shares being re-
deemed bears to the number of initial shares outstanding at the time of the re-
demption.
3. INVESTMENT ADVISORY AGREEMENTS AND OTHER AFFILIATED TRANSACTIONS
First Union National Bank ("FUNB"), a subsidiary of First Union Corporation,
("First Union") is the investment advisor to the Aggressive Growth Fund and
Masters Fund and is paid a management fee that is computed and paid daily at an
annual rate of 0.52% and 0.87%, respectively, of each Fund's average daily net
assets. Prior to January 3, 2000, the management fee was computed at an annual
rate of 0.60% and 0.95%, respectively, of the respective Fund's average daily
net assets.
Evergreen Investment Management Company ("EIMC"), an indirect wholly owned sub-
sidiary of FUNB is the investment advisor for Large Company Growth Fund, Omega
Fund and Small Company Growth Fund. In return for providing investment manage-
ment services, the Funds pay EIMC a management fee that is computed and paid
daily. For Large Company Growth Fund and Small Company Growth Fund, the manage-
ment fee is computed by applying percentage rates, starting at 0.61% and de-
clining to 0.26% per annum as net assets increase, to the average daily net as-
sets of the Fund. For Omega Fund, the management fee is com-
136
<PAGE>
Combined Notes to Financial Statements (continued)
puted by applying percentage rates, starting at 0.66% and declining to 0.41%
per annum as net assets increase, to the average daily net assets of the Fund.
Prior to January 3, 2000, the management fee for Large Company Growth Fund and
Small Company Growth Fund was computed by applying percentage rates which
started at 0.70% and declined to 0.35% per annum as net assets increased, to
the average daily net assets of each Fund. For Omega Fund, the management was
computed daily by applying percentage rates, which started at 0.75% and de-
clined to 0.50% per annum as net assets increased, to the average daily net as-
sets of the Fund.
Evergreen Asset Management Corp. ("EAMC"), an indirect wholly owned subsidiary
of FUNB, along with MFS Institutional Advisors, Inc., OppenheimerFunds, Inc.
and Putnam Investment Management, Inc. are investment managers to the Masters
Fund. Subject to the supervision of EIM, each manager manages a segment of the
Masters Fund's portfolio in accordance with the Fund's investment objective and
policies. The Masters Fund pays no direct fees to the investment managers for
their services.
EAMC also serves as the investment advisor to the Evergreen Fund and Tax Stra-
tegic Equity Fund. For the Evergreen Fund the advisory fee is paid to EAMC
based on the Fund average daily net assets that is computed daily and paid
monthly in accordance 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 for the Evergreen Fund was com-
puted 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>
For the Tax Strategic Equity Fund, EAMC is paid a management fee that is com-
puted and paid daily at an annual rate of 0.87% of the Fund's average daily net
assets. Prior to January 3, 2000, the management fee was computed at an annual
rate of 0.95% of the Fund's average daily net assets.
During the year ended September 30, 2000, the amount of investment advisory
fees waived by the advisors of the Stock Selector Fund and Tax Strategic Equity
Fund were $371,302 and $2,218, respectively. The impact on the expense ratio
represented as a percentage of the Funds' average net assets were 0.17% and
0.01%, respectively.
Lieber & Company, an affiliate of First Union, is the investment sub-advisor to
Evergreen Fund, Masters Fund and Tax Strategic Equity Fund and also provides
brokerage services with respect to security transactions of the Fund effected
on the New York or American Stock Exchanges. For the year ended September 30,
2000, Evergreen Fund, Masters Fund and Tax Strategic Equity Fund incurred bro-
kerage commissions of $71,136 and $8,680, respectively, with Lieber & Company.
Lieber & Company is reimbursed by EAMC for providing investment sub-advisory
services at no additional expense to the Fund.
Mentor Investment Advisors, LLC ("Mentor Advisors"), a subsidiary of First
Union, is the investment advisor to the Capital Growth Fund and Growth Fund and
is paid a management fee that is computed and paid daily at an annual rate of
0.80% and 0.70%, respectively, of each Fund's average daily net assets.
Meridian Investment Company ("MIC"), an indirect, wholly owned subsidiary of
First Union, is the investment advisor to Stock Selector Fund and is paid an
advisory fee that is computed and paid daily at an annual rate of 0.66% of the
Fund's average daily net assets. Prior to January 3, 2000, the management fee
was computed at an annual rate of 0.74% of the Fund's average daily net assets.
Evergreen Investment Services ("EIS"), an indirect, wholly owned subsidiary of
FUNB, is the administrator to the Funds. As administrator, EIS provides the
Funds with facilities, equipment and personnel. Prior to May 1, 2000, The BISYS
Group, Inc. ("BISYS") served as the sub-administrator to the Funds and provided
the officers of the Funds. Officers of the Funds and affiliated Trustees re-
ceive no compensation directly from the Funds.
137
<PAGE>
Combined Notes to Financial Statements (continued)
For its services, the Funds, except the Capital Growth Fund and Growth Fund,
pay the administrator a fee at the annual rate of 0.10% of each Fund's average
daily net assets. The Capital Growth Fund and Growth Fund pay the administrator
a fee at the annual rate of 0.15% of each Fund's average daily net assets. For
the Aggressive Growth Fund, Masters Fund and Stock Selector Fund, the sub-ad-
ministrator was paid by the administrator out of its fees until the sub-admin-
istration agreement with BISYS was terminated on April 30, 2000.
Prior to January 3, 2000, the administrator and sub-administrator for the Ag-
gressive Growth Fund, Masters Fund and Stock Selector Fund were entitled to an
annual fee based on the combined average daily net assets of all the funds ad-
ministered by EIS for which First Union or its investment advisory subsidiaries
were also the investment advisors. The administration fee was calculated by ap-
plying 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 aver-
age daily net assets of each Fund.
Prior to January 3, 2000, the administration fee for the Evergreen Fund and Tax
Strategic Equity Fund was paid by the investment advisor and was not a fund ex-
pense. The sub-administration fee for the Funds was also paid by the investment
advisor until the sub-administration agreement with BISYS was terminated on
April 30, 2000.
Prior to January 3, 2000, the administration fee for the Large Company Growth
Fund, Omega Fund and Small Company Growth Fund was paid by the investment advi-
sor and was not a fund expense. However, the Funds reimbursed EIMC for provid-
ing certain administration and accounting expenses. The sub-administration fee
for the Funds was paid by the investment advisor until the sub-administration
agreement with BISYS was terminated on April 30, 2000.
During the year ended September 30, 2000, the Funds paid or accrued to EIS the
following amounts for administrative and sub-administrative services:
<TABLE>
<CAPTION>
Administration Sub-Administration
Fee Fee
---------------------------------
<S> <C> <C>
Aggressive Growth Fund........ $ 327,180 $7,379
Capital Growth Fund........... 710,465 0
Growth Fund................... 897,662 0
Evergreen Fund................ 1,395,821 0
Large Company Growth Fund..... 1,360,194 0
Masters Fund.................. 247,208 6,368
Omega Fund.................... 1,446,746 0
Small Company Growth Fund..... 352,739 0
Stock Selector Fund........... 499,952 0
Tax Strategic Equity Fund..... 20,749 497
</TABLE>
Evergreen Service Company ("ESC"), an indirect, wholly owned subsidiary of
FUNB, 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 Plan expenses". Under the Distribu-
tion Plans, each class incurs distribution fees at the following annual rates:
138
<PAGE>
Combined Notes to Financial Statements (continued)
<TABLE>
<CAPTION>
Average Daily
Net Assets
-------------
<S> <C>
Class A ........................................... 0.25%
Class B ........................................... 1.00
Class C ........................................... 1.00
Class IS .......................................... 0.25
</TABLE>
Of the above amounts, each share class may pay under its Distribution Plan a
maximum service fee of 0.25% of the average daily net assets of the class to
pay for shareholder service fees. Distribution Plan expenses are calculated and
paid daily.
During the year ended September 30, 2000, amounts paid or accrued to EDI pursu-
ant to each Fund's Class A, Class B, Class C and Class IS Distribution Plans
were as follows:
<TABLE>
<CAPTION>
Class A Class B Class C Class IS
-----------------------------------------
<S> <C> <C> <C> <C>
Aggressive Growth
Fund .............. $ 610,801 $ 972,916 $ 97,571 --
Capital Growth
Fund .............. 564,470 54,039 2,179,067 --
Evergreen Fund ..... 471,436 6,379,376 135,354 --
Growth Fund ........ 251,932 20,069 3,897,215 --
Large Company Growth
Fund .............. 2,736,406 945,001 44,672 --
Masters Fund ....... 467,295 1,099,338 74,526 --
Omega Fund ......... 1,619,007 8,688,030 1,274,189 --
Small Company Growth
Fund .............. 2,642,698 952,317 68,203 --
Stock Selector
Fund .............. 57,268 28,206 3,301 $709
Tax Strategic Equity
Fund .............. 19,526 119,517 40,314 --
</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.
Prior to October 18, 1999, Mentor Distributors, LLC ("Mentor Distributors")
served as principal underwriter to the former Mentor Capital Growth Portfolio
and former Mentor Growth Portfolio. The former Mentor Capital Growth Portfolio
and former Mentor Growth Portfolio had adopted a Distribution Plan under Rule
12b-1 of the 1940 Act for their Class B shares. To compensate Mentor Distribu-
tors for the services it provided and for the expenses it incurred, Class B
shares of the former Mentor Capital Growth Portfolio and former Mentor Growth
Portfolio paid a distribution fee of 0.75%, which was accrued daily and paid
monthly.
Prior to October 18, 1999, the former Mentor Portfolios had also adopted a
Shareholder Servicing Plan (the "Service Plan") with Mentor Distributors with
respect to Class A and Class B shares. Under the Service Plan, financial insti-
tutions entered into shareholder service agreements with the former Mentor Cap-
ital Growth Portfolio and former Mentor Growth Portfolio to provide administra-
tive support services to their customers who from time to time might have been
owners of record or beneficial owners of Class A or Class B shares of one or
more Portfolios. In return for providing these support services, a financial
institution might have received payments from one or more Portfolios at an an-
nual rate of 0.25% of the average daily net assets of the Class A or Class B
shares of the Portfolio beneficially owned by the financial institution's cus-
tomers for whom it was a holder of record or with whom it had a servicing rela-
tionship.
139
<PAGE>
Combined Notes to Financial Statements (continued)
For the year ended September 30, 2000, amounts paid or accrued to Mentor Dis-
tributors pursuant to former Mentor Capital Growth Portfolio and former Mentor
Growth Portfolio Class A and Class B Distribution and Shareholder Servicing
Plans were as follows:
<TABLE>
<CAPTION>
Shareholder Shareholder
Servicing Fee Servicing Fee Distribution Fee
Class A Class C Class C
--------------------------------------------
<S> <C> <C> <C>
Capital Growth
Fund............. $31,997 $29,336 $ 88,006
Growth Fund....... 10,976 40,702 122,106
</TABLE>
5. ACQUISITIONS
Effective the close of business on July 30, 1999, Evergreen Fund acquired sub-
stantially all of the net assets and assumed certain liabilities of Evergreen
Micro Cap Fund, an open-end management investment company registered under the
1940 Act in an exchange for Class A, Class B, Class C and Class Y shares of Ev-
ergreen Fund. This acquisition was accomplished by a tax-free exchange for
1,418,500 shares of the Fund. The value of acquired net assets were $36,518,956
with unrealized appreciation of $9,170,886. The aggregate net assets of the Ev-
ergreen Fund immediately after the acquisition were $2,079,861,427.
Effective the close of business on July 20, 2000, the Stock Selector Fund ac-
quired substantially all of the net assets and assumed certain liabilities of
Evergreen Select Large Cap Blend Fund, an open-end management investment com-
pany registered under the 1940 Act in an exchange for Class Y and Class IS
shares of Stock Selector Fund. This acquisition was accomplished by a tax-free
exchange for 15,903,371 shares of the Fund. The value of acquired net assets
were $283,970,108 with unrealized appreciation of $83,356,329.
Effective the close of business on July 20, 2000, the Stock Selector Fund also
acquired substantially all of the net assets and assumed certain liabilities of
Evergreen Diversified Value Fund, an open-end management investment company
registered under the 1940 Act in an exchange of Class Y and Class IS shares of
Stock Selector Fund. This acquisition was accomplished by a tax-free exchange
for 26,161,874 shares of the Fund. The value of acquired net assets were
$467,140,556 with unrealized appreciation of $75,828,005.
The aggregate net assets of the Stock Selector Fund immediately after these ac-
quisitions were $1,175,731,925.
140
<PAGE>
Combined Notes to Financial Statements (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, Class Y and/or Class IS. Transactions
in shares of the Funds were as follows:
Aggressive Growth Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 2000 September 30, 1999
------------------------ -------------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold.............. 3,100,377 $103,839,814 4,091,486 $ 100,313,056
Automatic conversion of
Class B shares to Class
A shares................ 113,893 3,554,102 11,191 258,550
Shares redeemed.......... (2,797,954) (92,858,602) (4,837,721) (117,577,148)
Shares issued in
reinvestment of
distributions........... 619,549 17,223,446 690,702 14,484,012
-------------------------------------------------------------------------------
Net increase (decrease).. 1,035,865 31,758,760 (44,342) (2,521,530)
-------------------------------------------------------------------------------
Class B
Shares sold.............. 1,750,669 58,292,258 1,041,861 25,104,998
Shares redeemed.......... (471,778) (15,033,715) (737,558) (17,491,988)
Automatic conversion of
Class B shares to Class
A shares................ (118,379) (3,554,102) (10,834) (258,550)
Shares issued in
reinvestment of
distributions........... 262,406 7,024,615 214,557 4,381,250
-------------------------------------------------------------------------------
Net increase............. 1,422,918 46,729,056 508,026 11,735,710
-------------------------------------------------------------------------------
Class C
Shares sold.............. 265,688 8,888,157 559,471 12,662,073
Shares redeemed.......... (42,454) (1,378,845) (514,120) (11,614,643)
Shares issued in
reinvestment of
distributions........... 21,277 568,101 18,309 373,139
-------------------------------------------------------------------------------
Net increase............. 244,511 8,077,413 63,660 1,420,569
-------------------------------------------------------------------------------
Class Y
Shares sold.............. 492,490 16,896,539 927,592 22,584,561
Shares redeemed.......... (466,854) (15,633,132) (1,287,577) (31,532,134)
Shares issued in
reinvestment of
distributions........... 122,588 3,461,888 141,310 2,997,175
-------------------------------------------------------------------------------
Net increase (decrease).. 148,224 4,725,295 (218,675) (5,950,398)
-------------------------------------------------------------------------------
Net increase............. $ 91,290,524 $ 4,684,351
</TABLE>
--------------------------------------------------------------------------------
Capital Growth Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 2000 September 30, 1999
------------------------- -------------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A (a)
Shares sold............. 1,571,779 $ 39,800,998 8,969,729 $ 218,527,291
Automatic conversion of
Class B shares to Class
A shares............... 104 2,772 0 0
Shares redeemed......... (5,349,523) (132,663,877) (4,384,818) $(107,572,611)
Shares issued in
reinvestment of
distributions.......... 216,678 5,463,357 741,724 16,054,923
-------------------------------------------------------------------------------
Net increase
(decrease)............. (3,560,962) (87,396,750) 5,326,635 $ 127,009,603
-------------------------------------------------------------------------------
Class B (b)
Shares sold............. 752,540 19,686,961
Shares redeemed......... (73,694) (1,901,301)
Automatic conversion of
Class B shares to Class
A shares............... (104) (2,772)
Shares issued in
reinvestment of
distributions.......... 734 18,478
-------------------------------------------------------------------------------
Net increase............ 679,476 17,801,366
-------------------------------------------------------------------------------
Class C (a)
Shares sold............. 1,170,496 28,010,821 3,100,435 70,992,924
Shares redeemed......... (3,664,349) (85,172,197) (2,242,187) (51,662,823)
Shares issued in
reinvestment of
distributions.......... 226,919 5,377,984 1,106,815 22,759,993
-------------------------------------------------------------------------------
Net increase
(decrease)............. (2,266,934) (51,783,392) 1,965,063 42,090,094
-------------------------------------------------------------------------------
Class Y (a)
Shares sold............. 1,304 34,392 0 0
Shares redeemed......... 0 0 0 0
Shares issued in
reinvestment of
distributions.......... 1 19 5 125
-------------------------------------------------------------------------------
Net increase............ 1,305 34,411 5 125
-------------------------------------------------------------------------------
Net increase
(decrease)............. $(121,344,365) $ 169,099,822
</TABLE>
--------------------------------------------------------------------------------
(a) Effective October 18, 1999, shareholders of Mentor Capital Growth Portfolio
Class A, Class B and Class Y shares became owners of that number of full
and fractional shares of Class A, Class C and Class Y, respectively, of Ev-
ergreen Capital Growth Fund. In addition, Class B shares of Mentor Capital
Growth Portfolio were redesignated as Class C shares of Evergreen Capital
Growth Fund.
(b) For the period from October 25, 1999 (commencement of class operations) to
September 30, 2000
141
<PAGE>
Combined Notes to Financial Statements (continued)
Evergreen Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 2000 September 30, 1999
-------------------------- ----------------------------
Shares Amount Shares Amount
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold............. 24,685,942 $ 634,241,694 55,677,019 $ 1,355,992,224
Automatic conversion of
Class B shares to Class
A shares............... 608,123 16,316,036 21,872 535,683
Shares redeemed......... (26,978,305) (688,893,058) (57,057,535) (1,393,753,532)
Shares issued in
reinvestment of
distributions.......... 3,807,746 66,767,967 41,108 967,124
Shares issued in
acquisition of
Evergreen Micro Cap
Fund................... 0 0 110,596 2,832,746
-----------------------------------------------------------------------------------
Net increase
(decrease)............. 2,123,506 28,432,639 (1,206,940) (33,425,755)
-----------------------------------------------------------------------------------
Class B
Shares sold............. 1,818,268 44,260,276 6,058,040 143,376,051
Shares redeemed......... (8,122,817) (184,411,434) (9,071,055) (217,443,162)
Automatic conversion of
Class B shares to Class
A shares............... (621,702) (16,316,036) (22,179) (535,683)
Shares issued in
reinvestment of
distributions.......... 13,911,636 235,437,115 87,586 2,024,982
Shares issued in
acquisition of
Evergreen Micro Cap
Fund................... 0 0 133,296 3,355,417
-----------------------------------------------------------------------------------
Net increase
(decrease)............. 6,985,385 78,969,921 (2,814,312) (69,222,395)
-----------------------------------------------------------------------------------
Class C
Shares sold............. 126,214 3,054,279 157,835 3,791,613
Shares redeemed......... (319,659) (7,171,277) (232,531) (5,540,497)
Shares issued in
reinvestment of
distributions.......... 286,087 4,833,455 1,671 38,547
Shares issued in
acquisition of
Evergreen Micro Cap
Fund................... 0 0 48,087 1,208,311
-----------------------------------------------------------------------------------
Net increase
(decrease)............. 92,642 716,457 (24,938) (502,026)
-----------------------------------------------------------------------------------
Class Y
Shares sold............. 27,347,010 702,668,413 81,931,751 2,005,894,858
Shares redeemed......... (38,578,277) (979,577,128) (87,321,515) (2,147,708,721)
Shares issued in
reinvestment of
distributions.......... 18,454,462 330,997,674 220,439 5,227,109
Shares issued in
acquisition of
Evergreen Micro Cap
Fund................... 0 0 1,126,521 29,122,482
-----------------------------------------------------------------------------------
Net increase
(decrease)............. 7,223,195 54,088,959 (4,042,804) (107,464,272)
-----------------------------------------------------------------------------------
Net increase
(decrease)............. $ 162,207,976 $ (210,614,448)
-----------------------------------------------------------------------------------
</TABLE>
Growth Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 2000 September 30, 1999
------------------------ --------------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A (a)
Shares sold............. 3,213,966 $ 59,192,420 31,738,871 $ 498,194,431
Automatic conversion of
Class B shares to Class
A shares............... 35 708 0 0
Shares redeemed......... (4,692,164) (87,305,778) (31,503,018) (497,861,464)
Shares issued in
reinvestment of
distributions.......... 258,789 4,417,530 209,823 2,939,628
-------------------------------------------------------------------------------
Net increase
(decrease)............. (1,219,374) (23,695,120) 445,676 3,272,595
-------------------------------------------------------------------------------
Class B (b)
Shares sold............. 269,830 6,068,033
Automatic conversion of
Class B shares to Class
A shares............... (36) (708)
Shares redeemed......... (13,222) (302,751)
Shares issued in
reinvestment of
distributions.......... 235 3,857
-------------------------------------------------------------------------------
Net increase............ 256,807 5,768,431
-------------------------------------------------------------------------------
Class C (a)
Shares sold............. 745,305 15,988,064 2,136,351 27,314,195
Shares redeemed......... (5,148,069) (99,273,581) (8,496,928) (122,872,448)
Shares issued in
reinvestment of
distributions.......... 1,038,089 17,003,896 1,070,622 14,539,245
-------------------------------------------------------------------------------
Net decrease............ (3,364,675) (66,281,621) (5,289,955) (81,019,008)
-------------------------------------------------------------------------------
Class Y (a)
Shares sold............. 3,803,240 84,298,808 1,189,938 18,258,330
Shares redeemed......... (737,387) (16,599,486) (788,128) (12,236,470)
Shares issued in
reinvestment of
distributions.......... 134,201 2,301,543 72,358 1,016,634
-------------------------------------------------------------------------------
Net increase............ 3,200,054 70,000,865 474,168 7,038,494
-------------------------------------------------------------------------------
Net decrease............ $(14,207,445) $ (70,707,919)
-------------------------------------------------------------------------------
</TABLE>
(a) Effective October 18, 1999, shareholders of Mentor Growth Portfolio Class
A, Class B and Class Y shares became owners of that number of full and
fractional shares of Class A, Class C and Class Y, respectively, of Ever-
green Growth Fund. In addition, Class B shares of Mentor Growth Portfolio
were redesignated as Class C shares of Evergreen Growth Fund.
(b) For the period from October 18, 1999 (commencement of class operations) to
September 30, 2000.
142
<PAGE>
Combined Notes to Financial Statements (continued)
Large Company Growth
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 2000 September 30, 1999
-------------------------- --------------------------
Shares Amount Shares Amount
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold............. 7,306,072 $ 94,013,807 8,719,042 $ 92,955,895
Automatic conversion of
Class B shares to Class
A shares............... 4,198,873 51,860,653 6,128,578 63,408,824
Shares redeemed......... (14,420,685) (180,416,693) (18,728,821) (200,386,524)
Shares issued in
reinvestment of
distributions.......... 11,055,062 123,042,836 8,976,424 85,277,296
---------------------------------------------------------------------------------
Net increase............ 8,139,322 88,500,603 5,095,223 41,255,491
---------------------------------------------------------------------------------
Class B
Shares sold............. 2,365,679 29,460,430 4,914,300 51,035,070
Automatic conversion of
Class B shares to Class
A shares............... (4,275,735) (51,860,653) (6,179,154) (63,408,824)
Shares redeemed......... (1,981,248) (23,920,759) (4,614,211) (48,490,126)
Shares issued in
reinvestment of
distributions.......... 1,411,557 15,442,432 1,854,514 17,488,143
---------------------------------------------------------------------------------
Net decrease............ (2,479,747) (30,878,550) (4,024,551) (43,375,737)
---------------------------------------------------------------------------------
Class C
Shares sold............. 411,888 5,170,912 410,152 4,274,159
Shares redeemed......... (91,760) (1,121,371) (241,893) (2,562,309)
Shares issued in
reinvestment of
distributions.......... 35,737 391,321 9,743 91,880
---------------------------------------------------------------------------------
Net increase............ 355,865 4,440,862 178,002 1,803,730
---------------------------------------------------------------------------------
Class Y(a)
Shares sold............. 246,735 3,063,604 21,799 236,911
Shares redeemed......... (64,472) (824,524) 0 0
Shares issued in
reinvestment of
distributions.......... 3,956 43,520 0 0
---------------------------------------------------------------------------------
Net increase............ 186,219 2,282,600 21,799 236,911
---------------------------------------------------------------------------------
Net increase
(decrease)............. $ 64,345,515 $ (79,605)
---------------------------------------------------------------------------------
</TABLE>
(a) For the period from June 30, 1999 (commencement of class operations) to
September 30, 1999.
Masters Fund
<TABLE>
<CAPTION>
Year Ended Period Ended
September 30, 2000 September 30, 1999 (a)
------------------------ ------------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold............... 1,489,659 $ 18,736,347 20,318,705 $202,859,751
Automatic conversion of
Class B shares to Class A
shares................... 59,895 749,247 0 0
Shares redeemed........... (3,688,658) (44,262,539) (3,625,448) (36,604,532)
-------------------------------------------------------------------------------
Net increase (decrease)... (2,139,104) (24,776,945) 16,693,257 166,255,219
-------------------------------------------------------------------------------
Class B
Shares sold............... 3,190,144 39,847,013 9,086,441 89,703,567
Automatic conversion of
Class B shares to Class A
shares................... (60,265) (749,247) 0 0
Shares redeemed........... (1,188,498) (14,385,372) (800,242) (8,069,355)
-------------------------------------------------------------------------------
Net increase.............. 1,941,381 24,712,394 8,286,199 81,634,212
-------------------------------------------------------------------------------
Class C
Shares sold............... 549,220 6,872,754 587,143 5,789,821
Shares redeemed........... (160,320) (1,845,368) (103,274) (1,036,155)
-------------------------------------------------------------------------------
Net increase.............. 388,900 5,027,386 483,869 4,753,666
-------------------------------------------------------------------------------
Class Y
Shares sold............... 121,732 1,513,051 991,129 9,983,652
Shares redeemed........... (116,895) (1,391,007) (658,523) (6,631,496)
-------------------------------------------------------------------------------
Net increase.............. 4,837 122,044 332,606 3,352,156
-------------------------------------------------------------------------------
Net increase.............. $ 5,084,879 $255,995,253
-------------------------------------------------------------------------------
</TABLE>
(a) For the period from December 31, 1998 (commencement of operations) to Sep-
tember 30, 1999.
143
<PAGE>
Combined Notes to Financial Statements (continued)
Omega Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 2000 September 30, 1999
-------------------------- ------------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold............. 10,534,090 $ 386,870,560 9,289,908 $249,132,222
Automatic conversion of
Class B shares to Class
A shares............... 245,610 8,341,595 50,716 1,231,524
Shares redeemed......... (2,803,637) (101,189,916) (3,536,387) (88,747,695)
Shares issued in
reinvestment of
distributions.......... 421,997 13,010,048 776,324 17,048,085
-------------------------------------------------------------------------------
Net increase............ 8,398,060 307,032,287 6,580,561 178,664,136
-------------------------------------------------------------------------------
Class B
Shares sold............. 24,966,750 845,635,009 10,585,079 260,352,911
Automatic conversion of
Class B shares to Class
A shares............... (264,762) (8,341,595) (54,149) (1,231,524)
Shares redeemed......... (2,595,415) (87,218,625) (1,881,925) (44,716,715)
Shares issued in
reinvestment of
distributions.......... 547,714 15,675,575 660,924 13,608,425
-------------------------------------------------------------------------------
Net increase............ 22,654,287 765,750,364 9,309,929 228,013,097
-------------------------------------------------------------------------------
Class C
Shares sold............. 7,196,027 250,341,758 729,787 18,084,796
Shares redeemed......... (391,105) (12,976,594) (410,481) (10,036,714)
Shares issued in
reinvestment of
distributions.......... 35,872 1,029,164 80,514 1,661,807
-------------------------------------------------------------------------------
Net increase............ 6,840,794 238,394,328 399,820 9,709,889
-------------------------------------------------------------------------------
Class Y
Shares sold............. 494,781 17,988,359 788,319 19,979,328
Shares redeemed......... (71,268) (2,531,699) (649,835) (16,350,589)
Shares issued in
reinvestment of
distributions.......... 5,911 183,260 5,104 112,388
-------------------------------------------------------------------------------
Net increase............ 429,424 15,639,920 143,588 3,741,127
-------------------------------------------------------------------------------
Net increase............ $1,326,816,899 $420,128,249
-------------------------------------------------------------------------------
</TABLE>
Small Company Growth Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 2000 September 30, 1999
-------------------------- --------------------------
Shares Amount Shares Amount
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold............. 29,942,462 $ 274,292,689 53,448,602 $ 312,196,051
Automatic conversion of
Class B shares to Class
A shares............... 8,880,122 87,114,946 16,309,922 90,694,600
Shares redeemed......... (43,829,534) (415,104,100) (82,905,179) (481,200,472)
Shares issued in
reinvestment of
distributions.......... 0 0 20,259,885 101,907,344
---------------------------------------------------------------------------------
Net increase
(decrease)............. (5,006,950) (53,696,465) 7,113,230 23,597,523
---------------------------------------------------------------------------------
Class B
Shares sold............. 4,307,236 40,809,963 13,062,017 73,444,369
Automatic conversion of
Class B shares to Class
A shares............... (9,017,535) (87,114,946) (16,453,668) (90,694,600)
Shares redeemed......... (4,132,177) (37,946,211) (22,882,532) (126,566,626)
Shares issued in
reinvestment of
distributions.......... 0 0 7,865,978 39,251,232
---------------------------------------------------------------------------------
Net decrease............ (8,842,476) (84,251,194) (18,408,205) (104,565,625)
---------------------------------------------------------------------------------
Class C
Shares sold............. 1,344,667 12,160,439 4,040,301 23,282,516
Shares redeemed......... (869,077) (7,405,200) (4,563,805) (26,279,445)
Shares issued in
reinvestment of
distributions.......... 0 0 155,750 778,749
---------------------------------------------------------------------------------
Net increase
(decrease)............. 475,590 4,755,239 (367,754) (2,218,180)
---------------------------------------------------------------------------------
Class Y
Shares sold............. 1,557,852 14,516,341 3,464,745 19,074,961
Shares redeemed......... (1,378,162) (12,915,801) (3,380,610) (18,829,658)
Shares issued in
reinvestment of
distributions.......... 0 0 44,074 222,576
---------------------------------------------------------------------------------
Net increase............ 179,690 1,600,540 128,209 467,879
---------------------------------------------------------------------------------
Net decrease............ $(131,591,880) $ (82,718,403)
---------------------------------------------------------------------------------
</TABLE>
144
<PAGE>
Combined Notes to Financial Statements (continued)
Stock Selector Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 2000 September 30, 1999
-------------------------- --------------------------
Shares Amount Shares Amount
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold............. 537,369 $ 10,552,440 663,818 $ 13,366,339
Automatic conversion of
Class B shares to Class
A shares............... 5,370 106,147 907 17,214
Shares redeemed......... (572,865) (11,203,038) (686,671) (13,666,848)
Shares issued in
reinvestment of
distributions.......... 281,524 5,273,069 197,997 3,461,192
----------------------------------------------------------------------------------
Net increase............ 251,398 4,728,618 176,051 3,177,897
----------------------------------------------------------------------------------
Class B
Shares sold............. 114,999 2,252,005 334,998 6,785,937
Automatic conversion of
Class B shares to Class
A shares............... (5,472) (106,147) (916) (17,214)
Shares redeemed......... (106,698) (2,053,825) (243,303) (4,897,446)
Shares issued in
reinvestment of
distributions.......... 34,134 624,240 6,740 116,802
----------------------------------------------------------------------------------
Net increase............ 36,963 716,273 97,519 1,988,079
----------------------------------------------------------------------------------
Class C
Shares sold............. 17,817 354,149 3,912 82,570
Shares redeemed......... (2,265) (44,372) 0 0
Shares issued in
reinvestment of
distributions.......... 3,889 71,126 0 0
----------------------------------------------------------------------------------
Net increase............ 19,441 380,903 3,912 82,570
----------------------------------------------------------------------------------
Class Y
Shares sold............. 4,189,575 78,066,848 9,266,068 189,519,555
Shares redeemed......... (14,503,968) (278,125,983) (13,904,195) (269,064,860)
Shares issued in
reinvestment of
distributions.......... 4,386,089 83,744,663 5,193,569 90,911,973
Shares issued in
acquisition of :
Evergreen Diversified
Value Fund............. 26,089,242 465,849,504 0 0
Evergreen Select Large
Cap Blend Fund......... 15,893,799 283,799,973 0 0
----------------------------------------------------------------------------------
Net increase............ 36,054,737 633,335,005 555,442 11,366,668
----------------------------------------------------------------------------------
Class IS (a)
Shares sold............. 782 13,500
Shares redeemed......... (1,860) (33,350)
Shares issued in
reinvestment of
distributions.......... 7 126
Shares issued in
acquisition of :
Evergreen Diversified
Value Fund............. 72,632 1,291,052
Evergreen Select Large
Cap Blend Fund......... 9,572 170,136
----------------------------------------------------------------------------------
Net increase............ 81,133 1,441,464
----------------------------------------------------------------------------------
Net increase............ $ 640,602,263 $ 16,615,214
----------------------------------------------------------------------------------
</TABLE>
(a) For the period from June 30, 2000 (commencement of class operations) to
September 30, 2000.
145
<PAGE>
Combined Notes to Financial Statements (continued)
Tax Strategic Equity Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 2000 September 30, 1999
--------------------- ---------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold .................... 247,908 $ 3,898,035 432,504 $ 5,821,410
Automatic conversion of Class B
shares to Class A shares ...... 19,041 310,164 3,112 42,135
Shares issued in reinvestment of
distributions ................. 0 0 343 4,973
Shares redeemed ................ (110,717) (1,743,481) (76,163) (1,045,908)
-------------------------------------------------------------------------------
Net increase ................... 156,232 2,464,718 359,796 4,822,610
-------------------------------------------------------------------------------
Class B(a)
Shares sold .................... 425,927 6,586,354 656,707 8,881,618
Shares issued in reinvestment of
distributions ................. 0 0 497 7,141
Automatic conversion of Class B
shares to Class A shares ...... (19,187) (310,164) (3,115) (42,135)
Shares redeemed ................ (114,880) (1,824,832) (88,644) (1,211,916)
-------------------------------------------------------------------------------
Net increase ................... 291,860 4,451,358 565,445 7,634,708
-------------------------------------------------------------------------------
Class C(b)
Shares sold .................... 229,804 3,633,031 170,259 2,319,807
Shares issued in reinvestment of
distributions ................. 0 0 85 1,225
Shares redeemed ................ (60,032) (948,538) (15,428) (213,678)
-------------------------------------------------------------------------------
Net increase ................... 169,772 2,684,493 154,916 2,107,354
-------------------------------------------------------------------------------
Class Y
Shares sold .................... 3,351 53,310 79,526 1,055,439
Shares issued in reinvestment of
distributions ................. 0 0 326 4,732
Shares redeemed ................ (108,612) (1,704,857) (246,229) (3,522,179)
-------------------------------------------------------------------------------
Net decrease ................... (105,261) (1,651,547) (166,377) (2,462,008)
-------------------------------------------------------------------------------
Net increase ................... $ 7,949,022 $12,102,664
</TABLE>
--------------------------------------------------------------------------------
(a) For the period from October 14, 1998 (commencement of class operations) to
September 30, 1999.
(b) For the period from November 4, 1998 (commencement of class operations) to
September 30, 1999.
146
<PAGE>
Combined Notes to Financial Statements (continued)
7. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (excluding
short-term securities were as follows for the year ended September 30, 2000:
<TABLE>
<CAPTION>
Cost of Proceeds from
Purchases Sales
-----------------------------
<S> <C> <C>
Aggressive Growth Fund............ $ 834,593,901 $ 778,789,252
Capital Growth Fund............... 349,060,178 485,340,643
Growth Fund....................... 782,783,436 874,023,399
Evergreen Fund.................... 2,225,165,839 2,757,862,772
Large Company Growth Fund......... 1,680,290,024 1,770,952,414
Masters Fund...................... 333,821,052 334,530,472
Omega Fund........................ 3,662,356,503 2,390,968,683
Small Company Growth Fund......... 2,440,243,718 2,592,032,255
Stock Selector Fund............... 410,080,033 794,239,547
Tax Strategic Equity Fund......... 17,572,171 6,596,506
</TABLE>
At September 30, 2000, the Stock Selector Fund had open futures contracts out-
standing as follows:
<TABLE>
<CAPTION>
Initial Value at Unrealized
Contract September 30, Gain
Expiration Contracts Amount 2000 (Loss)
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
December 2000 27 S&P 500 Index $9,977,675 $9,812,286 ($165,389)
</TABLE>
The following Funds loaned securities during the year ended September 30, 2000
to certain brokers. At September 30, 2000, the value of securities on loan and
the value of collateral (including accrued interest) and the amount of income
earned from securities lending were as follows:
<TABLE>
<CAPTION>
Value of Securities
Securities Value of Lending
on Loan Collateral Income
------------------------------------
<S> <C> <C> <C>
Aggressive Growth Fund.... $ 37,147,764 $ 38,713,146 $ 37,286
Capital Growth Fund....... 2,055,073 2,148,016 13,669
Evergreen Fund............ 42,412,529 44,072,483 21,677
Growth Fund............... 114,846,191 119,527,312 284,575
Large Company Growth...... 54,338,716 58,223,986 445,471
Omega Fund................ 146,492,402 152,030,892 586,600
Small Company Growth...... 281,815,107 295,255,294 1,056,046
Stock Selector Fund....... 20,867,102 21,904,181 18,804
</TABLE>
On September 30, 2000, the composition of unrealized appreciation and deprecia-
tion on securities based on the aggregate cost of securities for federal income
tax purposes were as follows:
<TABLE>
<CAPTION>
Gross Gross Net Unrealized
Unrealized Unrealized Appreciation/
Tax Cost Appreciation Depreciation (Depreciation)
--------------------------------------------------------
<S> <C> <C> <C> <C>
Aggressive
Growth Fund... $ 418,781,880 $119,155,674 $ (5,995,426) $113,160,248
Capital Growth
Fund.......... 389,593,850 89,438,449 (13,982,305) 75,456,144
Evergreen
Fund.......... 1,293,362,730 394,884,855 (18,129,018) 376,755,837
Growth Fund.... 633,359,769 193,375,253 (21,563,672) 171,811,581
Large Company
Growth Fund... 976,270,530 318,775,655 (5,687,801) 313,087,854
Masters Fund... 303,897,700 66,192,906 (30,789,445) 35,403,461
Omega Fund..... 2,283,509,918 499,194,476 (43,133,676) 456,060,800
Small Company
Growth Fund... 1,247,977,688 308,474,698 (55,160,261) 253,314,437
Stock Selector
Fund.......... 911,889,274 260,303,988 (59,164,460) 201,139,528
Tax Strategic
Equity Fund... 22,273,034 6,406,292 (964,878) 5,441,414
</TABLE>
As of September 30, 2000, the Tax Strategic Equity Fund had capital loss carry-
overs for federal income tax purposes of $547,361 expiring in 2008.
Capital losses incurred after October 31 within a Fund's fiscal year are deemed
to arise on the first business day of the Fund's following fiscal year. The Tax
Strategic Equity Fund has incurred and will elect to defer post October capital
losses of $510,148.
147
<PAGE>
Combined Notes to Financial Statements (continued)
8. EXPENSE REDUCTIONS
Through expense offset arrangements with ESC and their custodian and
brokerage/service arrangements with specific brokers, a portion of the fund ex-
penses have been reduced. The amount of expense reductions received by each
Fund and the impact of the total expense reductions on each Fund's annualized
expense ratio represented as a percentage of its average net assets were as
follows:
<TABLE>
<CAPTION>
% of
Expense Total Average
Offset Brokerage Expense Net
Arrangements Transactions Reductions Assets
--------------------------------------------
<S> <C> <C> <C> <C>
Aggressive Growth
Fund ........... $18,407 $10,431 $28,838 0.01%
Capital Growth
Fund ........... 21,482 0 21,482 0.00%
Evergreen Fund .. 83,770 208,024 291,794 0.01%
Growth Fund ..... 31,143 0 31,143 0.00%
Large Company
Growth Fund .... 54,342 38,247 92,679 0.01%
Masters Fund .... 12,150 0 12,150 0.00%
Omega Fund ...... 73,988 37,692 111,680 0.01%
Small Company
Growth Fund .... 82,026 93,265 175,291 0.02%
Stock Selector
Fund ........... 27,955 0 27,955 0.01%
Tax Strategic
Equity Fund .... 1,329 3,862 5,191 0.02%
</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 Fund. The investment performance of the deferral accounts are based on the
investment performance of certain Evergreen Funds. Any gains earned or losses
incurred in the deferral accounts are reported in the Fund's Trustees' fees and
expenses. At the election of the Trustees, the deferral account will be paid
either in one lump sum or in quarterly installments for up to ten years.
10. FINANCING AGREEMENT
On July 27, 1999, certain Evergreen Funds and a group of banks (the "Lenders")
entered into a credit agreement. On August 6, 1999, Capital Growth Fund and
Growth Fund became party to this agreement. Under this agreement, the Lenders
provided an unsecured revolving credit commitment in the aggregate amount of
$1.050 billion. The credit facility was allocated, under the terms of the fi-
nancing agreement, among the Lenders. The credit facility was accessed by the
Funds for temporary or emergency purposes to fund the redemption of their
shares or for general working capital purposes as permitted by each Fund's bor-
rowing restrictions. Borrowings under this facility bore interest at 0.75% per
annum above the Federal Funds rate (1.50% per annum above the Federal Funds
rate during the period from and including December 1, 1999 through and includ-
ing January 31, 2000). A commitment fee of 0.10% per annum was incurred on the
average daily unused portion of the revolving credit commitment. The commitment
fee was 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 served as paying agent for the funds and as pay-
ing agent was entitled to a fee of $20,000 per annum which was allocated to all
the funds.
On July 25, 2000, this agreement was renewed, amended and restated among cer-
tain Evergreen Funds and the Lenders. Under this renewed agreement, the Lenders
provide an unsecured revolving credit commitment in the aggregate amount of
$755 million. The credit facility is allocated, under the terms of the financ-
ing agreement, among the Lenders. The credit facility is accessed by the Funds
to temporarily finance the purchase or sale of securities for prompt delivery,
including funding redemption of their shares, as permitted by each Fund's bor-
rowing restrictions. Borrowings under this facility bear interest at 0.50% per
annum above the Federal Funds rate. A commitment fee of 0.10% per annum contin-
ues to be incurred on the average daily unused portion of the revolving credit
commitment and is allocated to all funds. For its assistance in renewing this
financing agreement, First Union Capital Markets Corp. was paid a one-time ar-
rangement fee of $150,000. State Street continues as paying agent for the funds
and receives a fee of $20,000 per annum which is allocated to all the funds.
During the year ended September 30, 2000, Funds had no significant borrowings
under these agreements.
148
<PAGE>
Independent Auditors' Report
Board of Trustees and Shareholders
Evergreen Equity Trust
We have audited the accompanying statements of assets and liabilities, includ-
ing the schedules of investments of the Evergreen Aggressive Growth Fund, Ever-
green Capital Growth Fund, Evergreen Fund, Evergreen Growth Fund, Evergreen
Large Company Growth Fund, Evergreen Masters Fund, Evergreen Omega Fund, Ever-
green Small Company Growth Fund, Evergreen Stock Selector Fund and the Ever-
green Tax Strategic Equity Fund portfolios of the Evergreen Equity Trust, as of
September 30, 2000, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the years or periods
in the two-year period then ended, and the financial highlights for each of the
years or periods in the five-year period then ended. These financial statements
and financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and fi-
nancial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally ac-
cepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the finan-
cial statements and financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation
of securities owned as of September 30, 2000 by correspondence with the custo-
dian and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
portfolios of Evergreen Equity Trust, referred to above, as of September 30,
2000, the results of their operations, changes in their net assets and finan-
cial highlights for each of the years or periods described above in conformity
with accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Boston, Massachusetts
November 10, 2000
149
<PAGE>
Additional Information (unaudited)
FEDERAL TAX STATUS OF DISTRIBUTIONS (unaudited)
Pursuant to section 852 of the Internal Revenue Code, the Funds have designated
the following amounts as long-term capital gain distributions for the fiscal
year ended September 30, 2000:
<TABLE>
<CAPTION>
Aggregate Per Share
---------------------
<S> <C> <C>
Aggressive Growth Fund ................... $32,502,338 $3.268
Capital Growth Fund ...................... 10,673,435 0.491
Evergreen Fund ........................... 811,851,519 11.225
Growth Fund .............................. 24,424,581 0.867
Large Company Growth Fund ................ 126,072,019 1.437
Masters Fund ............................. 0 0
Omega Fund ............................... 27,010,814 0.827
Small Company Growth Fund ................ 0 0
Stock Selector Fund ...................... 103,881,909 4.337
Tax Strategic Equity Fund ................ 0 0
</TABLE>
150
<PAGE>
Evergreen Funds
Money Market Funds
Florida Municipal Money Market Fund
Money Market Fund
Municipal Money Market Fund
New Jersey Municipal Money Market Fund
Pennsylvania Municipal Money Market Fund
Treasury Money Market Fund
State Municipal Bond Funds
Connecticut Municipal Bond Fund
Florida High Income Municipal Bond Fund
Florida 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
National Municipal Bond Funds
High Grade Municipal Bond Fund
High Income Municipal Bond Fund
Municipal Bond Fund
Short Intermediate Municipal Bond Fund
Short and Intermediate Bond Funds
Intermediate Term Bond Fund
Short-Duration Income Fund
Intermediate and Long Term Bond Funds
Diversified Bond Fund
High Yield Bond Fund
Quality Income Fund
Strategic Income Fund
U.S. Government Fund
Balanced Funds
Balanced Fund
Foundation Fund
Tax Strategic Foundation Fund
Growth & Income Funds
Blue Chip Fund
Equity Income Fund
Equity Index Fund
Growth and Income Fund
Small Cap Value Fund
Value Fund
Domestic Growth Funds
Aggressive Growth Fund
Capital Growth Fund
Evergreen Fund
Growth Fund
Large Company Growth Fund
Masters Fund
Omega Fund
Small Company Growth Fund
Special Equity Fund
Stock Selector Fund
Tax Strategic Equity Fund
Sector Funds
Health Care Fund
Technology Fund
Utility Fund
Global & International Funds
Emerging Markets Growth Fund
Global Leaders Fund
Global Opportunities Fund
International Growth Fund
Latin America Fund
Perpetual Global Fund
Perpetual International Fund
Precious Metals Fund
Express Line
800.346.3858
Investor Services
800.343.2898
www.evergreen-funds.com
47701 540979 11/2000
---------------
[LOGO OF EVERGREEN FUNDS(SM)] PRSRT STD
U.S. POSTAGE
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