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September 30, 1999
[GRAPHIC]
Evergreen Select
Fixed Income Funds
Annual Report
[LOGO OF EVERGREEN FUNDS]
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TABLE OF CONTENTS
Letter to Shareholders .................................................... 1
Evergreen Select Adjustable Rate Fund
Fund at a Glance ........................................................ 2
Portfolio Manager Commentary ............................................ 3
Evergreen Select Core Bond Fund
Fund at a Glance ........................................................ 5
Portfolio Manager Commentary ............................................ 6
Evergreen Select Fixed Income Fund
Fund at a Glance ........................................................ 8
Portfolio Manager Commentary ............................................ 9
Evergreen Select Income Plus Fund
Fund at a Glance ........................................................ 11
Portfolio Manager Commentary ............................................ 12
Evergreen Select Intermediate Term Municipal Bond Fund
Fund at a Glance ........................................................ 14
Portfolio Manager Commentary ............................................ 15
Evergreen Select International Bond Fund
Fund at a Glance ........................................................ 17
Portfolio Manager Commentary ............................................ 18
Evergreen Select Limited Duration Fund
Fund at a Glance ........................................................ 21
Portfolio Manager Commentary ............................................ 22
Evergreen Select Total Return Bond Fund
Fund at a Glance ........................................................ 24
Portfolio Manager Commentary ............................................ 25
Financial Highlights
Evergreen Select Adjustable Rate Fund ................................... 28
Evergreen Select Core Bond Fund ......................................... 29
Evergreen Select Fixed Income Fund ...................................... 30
Evergreen Select Income Plus Fund ....................................... 31
Evergreen Select Intermediate Term
Municipal Bond Fund ................................................... 32
Evergreen Select International
Bond Fund ............................................................. 33
Evergreen Select Limited Duration Fund .................................. 34
Evergreen Select
Total Return Bond Fund ................................................ 35
Schedule of Investments
Evergreen Select Adjustable Rate Fund ................................... 36
Evergreen Select Core Bond Fund ......................................... 38
Evergreen Select Fixed Income Fund ...................................... 42
Evergreen Select Income Plus Fund ....................................... 46
Evergreen Select Intermediate Term Municipal Bond Fund .................. 51
Evergreen Select International Bond Fund ................................ 57
Evergreen Select Limited Duration Fund .................................. 59
Evergreen Select
Total Return Bond Fund ................................................ 63
Statements of Assets and Liabilities ...................................... 67
Statements of Operations .................................................. 69
Statements of Changes in Net Assets ....................................... 72
Combined Notes to Financial Statements .................................... 77
Independent Auditors' Report .............................................. 89
Additional Information (Unaudited) ........................................ 90
EVERGREEN FUNDS
Evergreen Funds is one of the nation's fastest growing investment companies with
approximately $70 billion in asssets under management.
With over 80 mutual funds to choose among and acclaimed service and operations
capabilities, investors enjoy a broad range of quality investment products and
services designed to meet their needs.
The Evergreen Funds employ intensive, research-driven investment strategies
executed by over 90 research analysts and portfolio managers. The fund company
remains dedicated to meeting the needs of investors and their advisors in a
global economy. Look to the Evergreen Funds to provide a distinctive level of
service and excellence in investment management.
This annual report must be preceded or accompanied by a prospectus of an
Evergreen fund contained herein. The prospectus contains more complete
information, including fees and expenses, and should be read carefully
before investing or sending money.
Mutual Funds: NOT FDIC INSURED May lose value . not bank guaranteed
Evergreen Distributor, Inc.
Evergreen(SM) is a Service Mark of Evergreen Investment Services, Inc.
<PAGE>
Letter to Shareholders
----------------------
November 1999
Dear Evergreen Shareholders,
We are pleased to provide the Evergreen Select Fixed Income Funds annual report,
which covers the twelve-month period ended September 30, 1999.
[PHOTO]
William M. Ennis
[PHOTO]
David C. Francis
Uncertainty over Interest Rates Influences the Markets
It has been a difficult environment over the last twelve months for fixed-income
investors. After the Federal Reserve Board lowered interest rates three times in
1998 in an attempt to insulate the U.S. economy from global economic turmoil, it
reversed course halfway through 1999 and raised interest rates twice during the
fiscal period because of concerns about an overheated U.S. economy. Amidst the
volatility, the yield on the bellwether 30-year Treasury bond rose from a low of
4.72% in October of 1998 to 6.05% by September 30, 1999, the end of the fiscal
period.
The Federal Reserve Bank's "tightening bias" leads many to anticipate further
interest rate increases in order to stem even the slightest inflationary
pressure. We believe that the economy is still fundamentally strong, and that
inflation will stay contained, producing only moderate upward pressure on
interest rates. We believe bonds are relatively attractive over the long term
compared to other asset classes, particularly because "real" interest rates are
high by historical standards.
Evergreen Funds is Ready for the Year 2000/1/
We have been addressing the Year 2000 challenge since February of 1996 and have
committed the time, resources and people necessary to prepare for any
ramifications from the millennium bug. Today, we are confident that our
preparations will enable us to continue to deliver the high-quality Evergreen
products and services on which our shareholders rely. In addition, Evergreen
portfolio managers have placed great emphasis on monitoring portfolios for Y2K
readiness.
We believe that sound investing is about taking steps to meet your long-term
financial needs and goals. We remind you to take advantage of your financial
advisor's expertise to develop and refine a financial plan that will enable you
to meet your objectives. Evergreen Funds offers a broad mix of stock, bond and
money market funds that should make it simple for you to choose the most
appropriate for your portfolio.
We would like to thank you for your continued investment in Evergreen Funds.
Sincerely,
/s/ WILLIAM M. ENNIS
William M. Ennis
President and CEO
Evergreen Investment Company, Inc.
/s/ DAVID C. FRANCIS
David C. Francis, C.F.A.
Managing Director
Chief Investment Officer
First Union National Bank
First Capital Group
/1/The information above constitutes Year 2000 readiness disclosure.
1
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EVERGREEN
Select Adjustable Rate Fund
Fund at a Glance as of September 30, 1999
PORTFOLIO PROFILE
Philosophy
Evergreen Select Adjustable Rate Fund seeks a high level of current income
consistent with low volatility of principal.
Process
Portfolio management emphasizes non-convertible, one-year CMT-indexed ARMS to
achieve coupon sensitivity to changing interest rates. A series of laddered
maturities help to ensure a gradual response to changing interest rates.
Benchmark
6-month Treasury Bill
PERFORMANCE AND RETURNS/1/
Portfolio Inception Date: 10/1/1991 Class I Class IS
Class Inception Date 10/1/1991 5/23/1994
Average Annual Returns
1 year 4.98% 4.73%
3 years 6.02% 5.76%
5 years 6.36% 6.31%
Since Portfolio Inception 5.50% 5.42%
30-day SEC Yield 5.72% 5.44%
12-month income dividends per share $0.59 $0.56
LONG TERM GROWTH
[CHART]
Consumer Price Evergreen Select
Index - US 6 Month T-Bill Adj Rate I
31-Oct-91 1,000,000 1,000,000 1,000,000
30-Sep-92 1,028,384 1,036,120 1,045,304
30-Sep-93 1,056,048 1,068,073 1,103,112
30-Sep-94 1,087,337 1,107,585 1,118,836
30-Sep-95 1,115,001 1,170,600 1,195,658
30-Sep-96 1,148,480 1,232,957 1,277,701
30-Sep-97 1,173,225 1,297,626 1,374,335
30-Sep-98 1,190,693 1,365,342 1,450,406
30-Sep-99 1,219,077 1,428,629 1,522,677
Comparison of a $1,000,000 investment in Evergreen Select Adjustable Rate Fund,
Class I shares/1/, versus a similar investment in the 6-month Treasury Bill (6
mo. T-Bill), and the Consumer Price Index (CPI).
The 6-month Treasury Bill does not include transaction costs associated with
buying and selling securities nor any management fees. 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.
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than original cost. Historical performance shown for Class IS prior to its
inception is based on the performance of Class I and has not been adjusted to
reflect the effect of the 0.25% 12b-1 fee applicable to Class IS. Class I pays
no 12b-1 fee. If these fees had been reflected, returns would have been lower.
2
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EVERGREEN
Select Adjustable Rate Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO]
Gary Pzegeo
Performance
For the twelve-month period ended September 30, 1999, the Evergreen Select
Adjustable Rate Fund produced strong performance. The Fund's Class I Shares
returned 4.98% outperforming the 3.49% average return generated by the Fund's
benchmark, the 6-month T-Bill for the period ended September 30, 1999. The
return on the Fund's Class I shares was higher than the returns on 92% of the
funds in the Lipper Adjustable Rate Mortgage category, and the return on the
Fund's Class IS Shares was higher than the returns on 83% of the funds listed in
the Lipper Adjustable Rate Mortgage category. Select Adjustable Rate Fund also
ranked Number 3 out of 25 funds for Class I Shares in the Morningstar Short-Term
Government Fund category for the twelve-month period ended September 30, 1999.
Lipper, Inc. and Morningstar, Inc. are independent monitors of mutual fund
performance.
We attribute the Fund's strong performance to maintaining a high quality
portfolio composed of Treasury and agency securities and to our strategy of
preserving income by emphasizing seasoned, conventional, one-year constant
maturity Treasury ARMs. As interest rates rose during the twelve months, the
one-year ARMs in the portfolio provided a steady stream of income to the Fund.
Portfolio
Characteristics
---------------
Total Net Assets $56,232,431
Average Credit Quality AAA
Effective Maturity 4.8 years
Average Duration 1.1 years
Environment
The investment environment changed significantly during the twelve months. At
the beginning of the period, interest rates were relatively low, as U.S.
fixed-income markets continued to be affected by the economic and financial
crises that had occurred in Asia, Latin America and Russia. Concerns that
turmoil overseas would significantly slow the U.S. economy prompted the Federal
Reserve Board to make three 0.25% interest-rate cuts between September and
November 1998. The Federal Reserve's action of lowering interest rates made it
attractive for property owners to refinance or prepay their mortgages, and this
resulted in lower than anticipated returns for mortgage-backed securities, such
as adjustable-rate mortgages.
As the year progressed, however, concerns about a slowdown in the U.S. economy
dissipated. Economic growth remained strong throughout the period, giving way to
concerns about accelerating inflation. While inflation remained at a relatively
low level, the Federal Reserve Board took a pre-emptive stance against inflation
and raised interest rates 0.25% in June and August 1999. Higher interest rates
were positive for the Fund, because as rates rose, mortgage refinancing and
prepayment activity declined. In addition, as interest rates reset on the ARMs
in the portfolio, they did so at higher rates, producing added income for the
Fund.
3
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EVERGREEN
Select Adjustable Rate Fund
Portfolio Manager Commentary
PORTFOLIO COMPOSITION
(based on 9/30/1999 net assets)
[PIE CHART]
. ARMS -- 73.3%
. U.S. Treasuries/Government Agency Notes/Bonds -- 13.2%
. Fixed-rate Mortgage-Backed Securities -- 7.0%
. Repurchase Agreements -- 6.3%
. Other Assets and Liabilities, net -- 0.2%
Strategy
During the twelve-month period, we kept the asset allocation in the Fund
relatively steady. In September 1998, ARMs accounted for about 76% of assets,
and in September 1999 they composed about 73% of the Fund. Most of that decline
came from one-year, conventional, constant maturity Treasury ARMs. Rising
interest rates affected the ARMs market in a couple of ways. First, they slowed
the market. As a result, home buying decelerated and fewer mortgages were
securitized by banks. This caused a decline in the supply of ARMs. At the same
time, there was constant prepayment activity. Prepayment activity slows when
interest rates rise, but it still goes on at a fairly steady pace. Even though
prepayments have dropped quite a bit from late 1998, they are still running at a
rate that is gradually reducing the Fund's existing holdings.
The fixed-rate position in the portfolio increased slightly as we invested new
money and the cash we received from ARMs prepayments. As yields rose, fixed-rate
securities became more attractively priced. At the end of the period, fixed-rate
securities, which included Treasury, government agency and mortgage-backed
securities, accounted for 20.2% of Fund assets.
We also increased the Fund's allocation to hybrid mortgages by about 2.5%. A
relatively large portion of new mortgages are hybrids. As a result, there was
ample supply and prices were attractive. With a hybrid mortgage, the interest
rate is fixed for a number of years before converting to an adjustable-rate
mortgage. For example with a 3/1 hybrid mortgage, the interest rate would be
fixed for three years, and at the end of that period the mortgage would convert
to a one year adjustable-rate mortgage. Hybrid mortgages benefit the Fund,
because they provide a predictable and attractive amount of income for a certain
period of time.
Outlook
Weakness in the housing and consumer sectors of the economy may indicate a
deceleration in economic growth. If this is the case, we believe the Fed may not
have to raise rates much further to keep the economy on a sustainable low
inflation pace of growth. Going forward, we believe the fixed-income markets
will most likely trade in a range of about 6.00% to 6.50% for the 30-year
Treasury bond and that range should continue to slow the economy. When rates are
at the lower end of the range, we intend to seek constant maturity Treasury ARMs
for the portfolio. As rates move to the higher end of the range, we anticipate
increasing the Fund's fixed-rate and hybrid positions.
4
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EVERGREEN
Select Core Bond Fund
Fund at a Glance as of September 30, 1999
PORTFOLIO PROFILE
Philosophy
The Evergreen Select Core Bond Fund is designed to maximize total return by
focusing on current income and identifying opportunities to capture capital
gains. The portfolio maintains a bias toward corporate and mortgage securities
in order to capture higher levels of income.
Process
The portfolio managers seek to enhance performance, while pursuing a controlled
risk approach, by actively managing three specific characteristics within the
portfolio: duration, sector allocation, and security selection. The managers use
both quantitative tools and fundamental research in order to determine an
appropriate duration strategy as well as enhance the sector allocation and
security selection processes.
Benchmark
Lehman Brothers Aggregate Bond Index
Lehman Brothers Government/Corporate Bond Index
PERFORMANCE AND RETURNS/1/
Portfolio Inception Date: 12/13/1990 Class I Class IS
Class Inception Date 12/13/1990 10/2/1997
Average Annual Returns
Six month 0.00% -0.17%
1 year 0.07% -0.18%
3 years 7.05% 6.91%
5 years 8.06% 7.97%
Since Portfolio Inception 7.41% 7.36%
30-day SEC Yield 6.33% 6.07%
6-month income dividends per share $0.30 $0.28
6-month capital gain distributions per share $0.01 $0.01
LONG TERM GROWTH
[CHART]
Lehman Brothers
Consumer Price LB Evergreen Select Government Corporate
Index - US Aggregate Core Bond I Bond Index
31-Dec-90 1,000,000 1,000,000 1,000,000 1,000,000
30-Sep-91 1,025,419 1,104,000 1,081,859 1,102,429
30-Sep-92 1,056,054 1,242,600 1,203,679 1,248,314
30-Sep-93 1,084,463 1,366,600 1,308,760 1,391,178
30-Sep-94 1,116,593 1,322,500 1,271,883 1,333,541
30-Sep-95 1,145,001 1,508,400 1,450,640 1,524,953
30-Sep-96 1,179,381 1,582,400 1,527,135 1,593,615
30-Sep-97 1,204,792 1,736,500 1,681,276 1,746,424
30-Sep-98 1,222,730 1,935,900 1,874,752 1,971,143
30-Sep-99 1,251,878 1,928,800 1,876,829 1,938,834
Comparison of a $1,000,000 investment in Evergreen Select Core Bond Fund, Class
I shares(1), versus a similar investment in the Lehman Brothers Aggregate Bond
Index (LBABI), the Lehman Brothers Government/Corporate Bond Index (LBGCBI) and
the Consumer Price Index (CPI).
The LBABI and LBGCBI are unmanaged market indices which do not include
transaction costs associated with buying and selling securities nor any
management fees. 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.
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees paid by the shareholders investing
in each class. The investment return and principal value will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than original
cost.
Historical performance shown for Class I Shares is based on the performance of
the Class I Shares of the Fund's predecessor fund, Tattersall Bond Fund.
Historical performance shown for Class IS Shares is based on (1) the performance
of the Class IS Shares of the Fund's predecessor fund, Tattersall Bond Fund,
since 10/2/1997 and (2) the Class I Shares of Tattersall Bond Fund from
12/13/1990 to 10/2/1997 which have not been adjusted to reflect the 0.25% 12b-1
fee paid by Class IS. Class I Shares do not pay a 12b-1. If these fees had been
reflected, returns would have been lower.
5
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EVERGREEN
Select Core Bond Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO OF FRED TATTERSALL]
Fred Tattersall
Team Leader
Performance
Evergreen Select Core Bond Fund's Class I shares returned 0.07% for the
twelve-month period ended September 30, 1999. The Lehman Brothers Aggregate Bond
Index lost -0.37% and the Lehman Brothers Government Corporate Bond Index lost
- -1.75% during the same period.
Portfolio
Characteristics
---------------
Total Net Assets $1,048,524,629
Average Credit Quality AAA
Effective Maturity 9.0 years
Average Duration 5.0 years
Changing Conditions Produce Challenge and Opportunity
The past twelve months were difficult for bond investors, as interest rates rose
across the yield curve between 0.50% and 1.50%. As the fiscal year began, the
global financial markets were beginning to recover from a turbulent summer,
during which Russia effectively defaulted on its debt and the largest hedge fund
in the United States bordered on bankruptcy. The situation prompted global
investors to seek the safety, quality and liquidity of the U.S. Treasury market.
This unusually strong demand for Treasury securities drove yields to decade lows
and pushed up bond prices. To enhance liquidity and stimulate sagging world
economies, the Federal Reserve Board and world central bankers lowered interest
rates during the fourth quarter of 1998.
Entering 1999, many investors believed that weak global demand would dampen the
U.S. economy in the coming year. Growth remained robust, however, and
international economies recovered faster and more heartily than many investors
anticipated. Concerned that inflation pressures of an overheated economy would
prompt the Federal Reserve to become restrictive, investors drove up interest
rates. The Federal Reserve followed through in the summer by raising short-term
rates in a preemptive move against the threat of rising inflation.
These volatile market conditions created sector opportunities for bond
investors, however. In the aftermath of the "flight-to-quality" trades, the
yield advantage provided by mortgage-backed securities and corporate bonds
versus Treasuries rose to extremely attractive levels. By the end of the first
quarter of 1999, much of this attractiveness had been realized, as economies and
financial markets showed signs of improvement. During the last half of the
fiscal year, yield advantages of sectors increased again to Treasuries in
reaction to heavy new issue supply and Y2K-induced liquidity fears. During
September, investors began to believe that both these concerns were only
temporary and bid up the prices of mortgage-backed securities and corporate
bonds relative to Treasuries. As the fiscal year ended, sectors still remained
attractive relative to historical standards.
PORTFOLIO COMPOSITION
(based on 9/30/1999 net assets)
[CHART]
Mortgage-Backed Securities -- 45.2%
Corporate Notes/Bonds -- 34.0%
Other Assets and Liabilities, net -- 8.0%
Treasury Notes/Bonds -- 7.0%
Asset-Backed -- 4.5%
Government Agency Notes/Bonds -- 1.1%
Foreign Bonds -- 0.2%
6
<PAGE>
EVERGREEN
Select Core Bond Fund
Portfolio Manager Commentary
Strategy
Sector allocation had the greatest effect on the Fund's performance, during the
period. In the first half of the fiscal year, the Fund was positioned for a
rebound in investment grade corporate bonds by being overweighted in the sector
relative to the Lehman Brothers Aggregate Bond Index. During the second half,
our overweighted position in mortgages relative to the Index contributed to the
Fund's outperformance.
As of September 30, 1999, approximately 45% of the Fund's net assets were
invested in mortgage-backed securities, up from 39% one year ago, and 38% at the
end of March. Also as of September 30, 1999, the Fund held a 36% position in
corporate bonds. As a result, the Fund's holdings in U.S. Treasuries were
reduced to 8% at the end of this fiscal period from 13% a year ago and 16% six
months ago. In the mortgage sector, we focused on "AAA"-rated, commercial,
mortgage-backed securities, which provided yields that were approximately 1.50%
higher than those of comparable U.S. Treasuries. We also selected corporate
bonds with long durations, which increased the Fund's potential for
outperformance. We believe that high quality, well known names represented
better risk-adjusted value than lower quality credits.
PORTFOLIO QUALITY
(based on 9/30/1999 portfolio assets)
[CHART]
AAA -- 66.0%
A -- 17.0%
BAA -- 10.0%
AA -- 7.0%
Outlook
We are optimistic about bonds, heading forward. The economy appears to be
healthy, and we believe inflation will stay well-contained, rising approximately
2% on an annualized basis. In this environment, we anticipate only modest upward
pressure on interest rates, keeping the yield on the 30-year U.S. Treasury
within a range of 5% to 6%.
We also believe that bonds are attractive relative to other asset classes and
have the potential to generate solid total returns in the months ahead. The
current level of yields on mortgage-backed securities and corporate bonds
presents the opportunity for price appreciation in addition to the ability to
earn a generous income stream. Further, "real" interest rates, the rates earned
by investors in excess of inflation, are high. The combination certainly
enhances the value of bonds and should improve their potential for
outperformance.
7
<PAGE>
EVERGREEN
Select Fixed Income Fund
Fund at a Glance as of September 30, 1999
PORTFOLIO PROFILE
Philosophy
The Evergreen Select Fixed Income Fund seeks to increase total return by
focusing on current income and identifying opportunities to capture capital
gains. The portfolio maintains a bias toward corporate and mortgage securities
in order to capture higher levels of income.
Process
The Fund's portfolio manager seeks to enhance performance, while controlling
risk, by actively managing three specific characteristics within the portfolio:
duration, sector allocation and security selection. The manager utilizes both
quantitative tools and fundamental research to determine an appropriate duration
strategy as well as to enhance the sector allocation and security selection
processes.
Benchmark
Lehman Brothers Intermediate Government/Corporate Index
PERFORMANCE AND RETURNS/1/
Portfolio Inception Date: 3/31/1977 Class I Class IS
Class Inception Date 11/24/1997 3/9/1998
Average Annual Returns
1 year 0.84% 0.59%
3 years 5.77% 5.49%
5 years 6.51% 6.23%
10 years 7.05% 6.78%
Since Portfolio Inception 8.13% 7.86%
30-day SEC Yield 7.61% 7.34%
12-month income dividends per share $0.35 $0.33
LONG TERM GROWTH
[CHART]
Lehman Brothers Consumer Price Evergreen Select
Interm Govt/Corp Index - US Fixed Income; I
30-Sep-89 1,000,000 1,000,000 1,000,000
30-Sep-90 1,083,924 1,061,600 1,092,845
30-Sep-91 1,234,088 1,097,600 1,236,482
30-Sep-92 1,391,081 1,130,392 1,376,500
30-Sep-93 1,505,441 1,160,800 1,485,208
30-Sep-94 1,480,519 1,195,192 1,449,091
30-Sep-95 1,647,633 1,225,600 1,600,891
30-Sep-96 1,732,187 1,262,400 1,681,793
30-Sep-97 1,874,164 1,289,600 1,808,854
30-Sep-98 2,069,551 1,308,800 1,975,928
30-Sep-99 2,082,628 1,340,000 1,992,973
Comparison of a $1,000,000 investment in Evergreen Select Fixed Income Fund,
Class I shares(1), versus a similar investment in the Lehman Brothers
Intermediate Government/Corporate Bond Index (LBIGCBI), and the Consumer Price
Index (CPI).
The LBIGCBI is an unmanaged market index which does not include transaction
costs associated with buying and selling securities nor any management fees. 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.
1Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees paid by the shareholders investing
in each class. The investment return and principal value will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than original
cost.
Historical performance shown for Class IS from 11/24/1997 to its inception is
based on the performance of Class I and has not been adjusted to reflect the
effect of the 0.25% 12b-1 fee applicable to Class IS. Class I pays no 12b-1 fee.
If these fees had been reflected, returns would have been lower. Prior to
11/24/1997, the returns for Classes I and IS are based on the Fund's predecessor
common trust fund's (CTF) performance, adjusted for estimated mutual fund
expenses. The CTF was not registered under the 1940 Act and was not subject to
certain investment restrictions. If the CTF had been registered, it's
performance might have been adversely affected. Performance for the CTF has been
adjusted to include the effect of estimated mutual fund class gross expense
ratios at the time the Fund was converted to a mutual fund. If fee waivers and
expense reimbursements had been calculated into the mutual fund class expense
ratio, the total returns would be as follows: Class I--3 year = 5.81%, 5 year =
6.58%, 10 year = 7.14% and since 3/31/1977 = 8.23%; Class IS--3 year = 5.53%, 5
year = 6.30%, 10 year = 6.86% and since 3/31/1977 = 7.96%.
8
<PAGE>
EVERGREEN
Select Fixed Income Fund
Portfolio Manager Commentary
Portfolio Management Team
[PHOTO OF ROLLIN C. WILLIAMS] [PHOTO OF L. ROBERT CHESHIRE]
Rollin C. Williams, CFA L. Robert Cheshire
[PHOTO OF THOMAS L.ELLIS]
Thomas L.Ellis
Performance
For the twelve-month period ended September 30, 1999, the Evergreen Select Fixed
Income Fund Class I Shares posted a 0.84% total return, outpacing the 0.63%
return of its benchmark, the Lehman Brothers Intermediate Government/Corporate
Bond Index. Strong performance can be attributed to the portfolio's
neutral-to-short duration stance as well as to favorable sector weightings
throughout the period.
Portfolio
Characteristics
---------------
Total Net Assets $602,517,442
Average Credit Quality AA
Effective Maturity 4.6 years
Average Duration 3.4 years
Environment
Fixed-income investors experienced a bumpy ride during the past twelve months.
During the first half of the fiscal year, the Federal Reserve Board lowered
interest rates three times in an effort to insulate the U.S. economy from global
economic turmoil. The Federal Reserve Board then reversed course in the face of
low unemployment and increasingly strong consumer spending levels which hinted
at an inflationary flare-up, and increased interest rates twice in just over
three months: on June 30 and again on August 24. Amid this backdrop, interest
rates climbed steadily higher as the yield on the bellwether 30-year Treasury
Bond rose from its low of 4.72% on October 5 to close at 6.05% on September 30.
PORTFOLIO QUALITY
(based on 9/30/1999 portfolio assets)
U.S. Government
Agency -- 24.3%
U.S. Government -- 23.3%
A -- 18.8%
AAA -- 13.4%
BAA -- 11.0%
AA -- 8.1%
BA -- 1.1%
9
<PAGE>
EVERGREEN
Select Fixed Income Fund
Portfolio Manager Commentary
Strategy
The portfolio's duration strategy had an extremely positive impact on
performance and was a primary factor in outperforming the benchmark. We reduced
duration steadily during the period and average duration--starting at 3.7 years,
was reduced to 3.6 years by March 31 and closed at 3.4 years on September 30,
1999. This strategy of reducing duration and maintaining a neutral-to-short
stance positively impacted performance as rates edged higher throughout
virtually the entire period.
Strategic over-weightings in the "spread" sectors--corporates and
mortgages--also positively impacted total return, especially in the final half
of the period. The portfolio's increased weighting of mortgages, from 13.6% to
30.8% during the final three months of the period, had a particularly positive
impact on performance in the waning months as this sector outpaced government
securities and, to a lesser extent, corporate bonds.
PORTFOLIO COMPOSITION
(based on 9/30/1999 portfolio assets)
[CHART]
Mortgage-Backed Securities -- 22.0%
Corporate Notes/Bonds -- 19.2%
Commercial Paper(1) -- 19.0%
Treasury Notes/Bonds -- 18.3%
Asset-Backed Securities -- 7.7%
Government Agency Notes/Bonds -- 7.5%
Foreign Bonds -- 3.6%
Repurchase Agreements -- 2.3%
Municipal Bonds -- 0.4%
1Represents collateral received for securities on loan.
Outlook
Going forward, the portfolio will likely maintain a neutral-to-shorter duration
stance in anticipation of rising interest rates in the near term. We feel that
the historically low unemployment rate and strong consumer spending will
continue to nudge inflation higher and likely prompt the Fed to increase rates
at least one more time in the near term. Looking further down the road, however,
favorable market fundamentals such as globalization of economies and low
worldwide inflation bode well for a strong investing backdrop and a low interest
rate environment over the long term.
10
<PAGE>
EVERGREEN
Select Income Plus Fund
Fund at a Glance as of September 30, 1999
PORTFOLIO PROFILE
Philosophy
The Evergreen Select Income Plus Fund seeks to increase total return by pursuing
a high level of current income and a potential for capital appreciation. The
portfolio managers seek to achieve the Fund's objective by actively managing
portfolio duration for capital gain opportunities.
Process
The portfolio managers complement fundamental research with quantitative tools
which identify undervalued or over-looked fixed income securities with potential
for appreciation. In an effort to achieve a high level of current income, the
Fund emphasizes corporate and mortgage-backed securities.
Benchmark
Lehman Brothers Government/Corporate Bond Index
PERFORMANCE AND RETURNS/1/
Portfolio Inception Date: 8/31/1988 Class I Class IS
Class Inception Date 11/24/1997 3/2/1998
Average Annual Returns
1 year -2.13% -2.36%
3 years 5.93% 5.73%
5 years 7.02% 6.84%
10 years 7.23% 7.06%
Since Portfolio Inception 7.48% 7.31%
30-day SEC Yield 6.42% 6.19%
12-month income dividends per share $0.33 $0.32
12-month capital gain distributions per share $0.05 $0.05
LONG TERM GROWTH
Lehman Brothers Consumer Price Evergreen Select
Govt/Corp Index - US Income Plus; I
30-Sep-89 1,000,000 1,000,000 1,000,000
30-Sep-90 1,067,545 1,061,600 1,061,462
30-Sep-91 1,236,834 1,097,600 1,224,301
30-Sep-92 1,400,505 1,130,392 1,358,034
30-Sep-93 1,560,787 1,160,800 1,510,169
30-Sep-94 1,496,123 1,195,192 1,437,484
30-Sep-95 1,710,871 1,225,600 1,639,963
30-Sep-96 1,787,905 1,262,400 1,700,976
30-Sep-97 1,959,343 1,289,600 1,860,018
30-Sep-98 2,211,460 1,308,800 2,067,783
30-Sep-99 2,175,212 1,340,000 2,025,078
Comparison of a $1,000,000 investment in Evergreen Select Income Plus Fund Class
I shares/1/, versus a similar investment in the Lehman Brothers
Government/Corporate Bond Index (LBGCBI), and the Consumer Price Index (CPI).
The LBGCBI is an unmanaged market index which does not include transaction costs
associated with buying or selling securities nor any management fees. 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.
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees paid by the shareholders investing
in each class. The investment return and principal value will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than original
cost.
Historical performance shown for Class IS from 11/24/1997 to its inception is
based on the performance of Class I and has not been adjusted to reflect the
effect of the 0.25% 12b-1 fee applicable to Class IS. Class I pays no 12b-1 fee.
If these fees had been reflected, returns would have been lower. Prior to
11/24/1997, the returns for Classes I and IS are based on the Fund's predecessor
common trust fund's (CTF) performance, adjusted for estimated mutual fund
expenses. The CTF was not registered under the 1940 Act and was not subject to
certain investment restrictions. If the CTF had been registered, it's
performance might have been adversely affected. Performance for the CTF has been
adjusted to include the effect of estimated mutual fund class gross expense
ratios at the time the Fund was converted to a mutual fund. If fee waivers and
expense reimbursements had been calculated into the mutual fund class expense
ratio, the total returns would be as follows: Class I--3 year = 5.97%, 5 year =
7.09%, 10 year = 7.31% and since 8/31/1988 = 7.57%; Class IS--3 year = 5.73%, 5
year = 6.84%, 10 year = 7.06% and since 8/31/1988 = 7.31%.
11
<PAGE>
EVERGREEN
Select Income Plus Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO]
J.P. Weaver, CFA
Performance
For the twelve-month period ended September 30, 1999, the Evergreen Select
Income Plus Bond Fund Class I Shares posted a -2.13% total return, trailing the
- -1.62% return of its benchmark, the Lehman Brothers Government/Corporate Bond
Index. Most of the Fund's under-performance can be attributed to a slightly
longer duration stance during much of the period that penalized returns in light
of steadily increasing interest rates.
Portfolio
Characteristics
---------------
Total Net Assets $1,805,079,909
Average Credit Quality AA
Effective Maturity 10.1 years
Average Duration 5.7 years
Environment
Most fixed income investors experienced negative returns during the fiscal year,
as bond prices declined in response to sharply higher interest rates. As the
period progressed, powerful consumer spending levels and low unemployment rates
hinted at an inflationary flare-up which ultimately resulted in rising interest
rates.
In an effort to contain inflation before it infected the U.S. economy, the
Federal Reserve Board lowered the Fed Funds rate twice during the final three
months of 1998. Amid this backdrop, the yield on the bellwether 30-year Treasury
Bond rose from its low of 4.72% on October 5 to close at 6.05% on September 30.
PORTFOLIO QUALITY
(based on 9/30/1999 portfolio assets)
[PIE CHART]
AAA -- 54.7%
A -- 19.0%
BAA -- 14.8%
AA -- 8.2%
BA -- 3.3%
12
<PAGE>
EVERGREEN
Select Income Plus Fund
Portfolio Manager Commentary
Strategy
The Fund's "income plus" strategy dictates we maintain a strong weighting in
yield-oriented issues such as corporate bonds and mortgage-backed securities. As
of September 30, over half of the Fund's assets were invested in these two
sectors.
Although this exposure to corporates and mortgages hurt performance in the
opening months and again in July, these areas performed well for the majority of
the fiscal year and had a positive impact on performance. Near the end of the
period, our analysis determined attractive valuations and opportunities within
the corporate bond market, so the portfolio was composed of 32.7% corporate
bonds/notes by the end of the period.
The portfolio's duration remained slightly longer than the benchmark for most of
the fiscal year, a stance which penalized performance as interest rates rose
steadily. Duration, however, was reduced from 6.0 years to 5.7 years during the
final half of the period.
PORTFOLIO COMPOSITION
(based on 9/30/1999 net assets)
[PIE CHART]
Corporate Notes/Bonds -- 32.7%
Treasury Notes/Bonds -- 29.3%
Government Agency Notes/Bonds -- 18.1%
Foreign Bonds -- 7.0%
Asset-Backed Securities -- 5.2%
Other Assets and Liabilities, net -- 4.1%
Mortgage-Backed Securities -- 3.4%
Preferred Stock -- 0.2%
Outlook
Interest rates have risen this year as economic growth has remained robust and
global economies have recovered. This has raised the prospects for a reversal of
the favorable trends we have experienced recently in core inflation. We believe
interest rates now better reflect the economy's underlying risks and, as such,
expect rates to remain in a fairly narrow band during the fourth quarter.
Investors remain chastened by last year's Long Term Capital Management hedge
fund and Russian default debacles, and securities dealers have sharply reduced
their risk appetites. This has negatively affected bond market liquidity. Still,
historically wide yield spreads should benefit investors in the fixed-income
spread sectors during the coming three to six months as liquidity slowly
improves.
13
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Fund at a Glance as of September 30, 1999
PORTFOLIO PROFILE
Philosophy
The Evergreen Select Intermediate Term Municipal Bond Fund seeks the highest
possible current income, exempt from federal income taxes, consistent with the
Fund's maturity and preservation of capital/1/. The Fund provides stable,
non-taxable income flows at competitive rates by primarily investing in tax-free
bonds.
Process
The portfolio manager utilizes both quantitative tools and hands-on, fundamental
research to identify attractive tax-exempt investment opportunities. In order to
increase total return, the Fund may also lend portfolio securities and enter
into repurchase and reverse repurchase agreements.
Benchmark
Lehman Brothers Municipal 7-Year Bond Index
PERFORMANCE AND RETURNS/2/
Portfolio Inception Date: 1/31/1984 Class I Class IS
ClassInception Date 11/24/1997 3/2/1998
Average Annual Returns
1 year -3.00% -3.24%
3 years 4.31% 4.07%
5 years 5.07% 4.82%
10 years 5.78% 5.52%
Since Portfolio Inception 6.72% 6.46%
30-day SEC Yield 5.08% 4.83%
Tax Equivalent Yield* 8.41% 8.00%
12-month income dividends per share $2.97 $2.81
12-month capital gain distributions per share $0.89 $0.89
* Assumes maximum 39.6% federal tax rate. Results for investors subject to lower
tax rates would not be as advantageous.
LONG TERM GROWTH
Consumer Price Lehman Brothers Evergreen Select
Index - US Munis 7-Yr Int. Muni; I Shares
30-Sep-89 1,000,000 1,000,000 1,000,000
30-Sep-90 1,061,600 1,071,618 1,062,143
30-Sep-91 1,097,600 1,202,796 1,167,148
30-Sep-92 1,130,392 1,320,670 1,261,788
30-Sep-93 1,160,800 1,465,081 1,388,185
30-Sep-94 1,195,192 1,455,638 1,376,765
30-Sep-95 1,225,600 1,605,259 1,488,236
30-Sep-96 1,262,400 1,676,430 1,556,829
30-Sep-97 1,289,600 1,809,875 1,679,183
30-Sep-98 1,308,800 1,952,233 1,824,050
30-Sep-99 1,340,000 1,964,212 1,769,129
Comparison of a $1,000,000 investment in Evergreen Select Intermediate Term
Municipal Bond Fund, Class I shares2, versus a similar investment in the
Lehman Brothers Municipal Bond 7-Year Index (LBMB7YI**), and the Consumer Price
Index (CPI).
The LBMB7YI is an unmanaged market index which does not include transaction
costs associated with buying and selling securities nor any management fees. 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 Lehman Brothers Municipal Bond 7-Year Index inception date was 1/31/1990.
The Lehman Brothers Municipal Bond 10-Year Index was used for the period
8/31/1988 - 1/31/1990.
/1/ Some portion of the Fund's income may be subject to the Federal Alternative
Minimum Tax.
/2/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees paid by the shareholders investing
in each class. The investment return and principal value will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than original
cost.
Historical performance shown for Class IS from 11/24/1997 to its inception is
based on the performance of Class I and has not been adjusted to reflect the
effect of the 0.25% 12b-1 fee applicable to Class IS. Class I pays no 12b-1 fee.
If these fees had been reflected, returns would have been lower. Prior to
11/24/1997, the returns for Classes I and IS are based on the Fund's predecessor
common trust fund's (CTF) performance, adjusted for estimated mutual fund
expenses. The CTF was not registered under the 1940 Act and was not subject to
certain investment restrictions. If the CTF had been registered, it's
performance might have been adversely affected. Performance for the CTF has been
adjusted to include the effect of estimated mutual fund class gross expense
ratios at the time the Fund was converted to a mutual fund. If fee waivers and
expense reimbursements had been calculated into the mutual fund class expense
ratio, the total returns would be as follows: Class I--3 year = 4.35%, 5 year =
5.14%, 10 year = 5.87% and since 1/31/1984 = 6.81%; Class IS--3 year = 4.11%, 5
year = 4.89%, 10 year = 5.61% and since 1/31/1984 = 6.55%.
14
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO]
Richard K.Marrone
Performance
For the twelve-month period ended September 30, 1999, the Evergreen Select
Intermediate Term Municipal Bond Fund Class I Shares posted a -3.00% total
return. This performance trailed the 0.57% return of its benchmark, the Lehman
Brothers Municipal Bond 7-year index.
Portfolio
Characteristics
---------------
Total Net Assets $710,336,097
Average Credit Quality AA
Effective Maturity 8.8 years
Average Duration 6.9 years
Environment
The past twelve months marked a difficult period for most fixed income
investors. In the first six months of the period, interest rates rose roughly
1.25% despite the fact that the Federal Reserve Board lowered the Fed Funds rate
on three separate occasions early in the period in an effort to insulate the
U.S. economy from global economic turmoil. Consequently, rising rates pushed
bond prices lower.
The Fed then reversed course and shifted focus to a sizzling U.S. economy, low
unemployment and strong consumer spending, raising interest rates twice in a
pre-emptive measure against inflation. Overall interest rates rose markedly
during the fiscal year as the yield on the bellwether 30-year Treasury Bond rose
from its low of 4.72% on October 5, 1998 to close at 6.05% on September 30.
PORTFOLIO QUALITY
(based on 9/30/1999 portfolio assets)
[PIE CHART]
AAA -- 35.8%
BBB -- 24.0%
A -- 18.6%
AA -- 11.7%
Not Rated -- 7.4%
BB -- 2.5%
15
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Portfolio Manager Commentary
Strategy
The Fund's income-oriented investment strategy seeks to maximize shareholders'
total return while reducing the portfolio's risk profile. Consistent with this
strategy, early in the fiscal period we significantly scaled back the
portfolio's weighting of zero-coupon bonds, a type of security with relatively
high volatility.
Conversely, we have invested new assets as well as cash reserves in securities
that enjoy strong yields. Our yield curve analysis indicates that the greatest
value currently lies in bonds with intermediate-range maturities; as a result,
we have strengthened this area with selective purchases. From a quality
standpoint AA and AAA-rated bonds seem to be most attractively priced, as
spreads between high and low-quality municipal bonds remain narrow. Although we
acknowledge the attractive valuations among higher-rated issues, we have
selectively added some lower-rated issues in order to bolster the Fund's yield.
PORTFOLIO COMPOSITION
(based on 9/30/1999 net assets)
[PIE CHART]
Hospitals/Nursing Homes/Health Care -- 24.3%
Housing -- 12.8%
Airlines -- 10.7%
General Obligation Notes/Bonds -- 10.3%
Industrial Development -- 10.2%
Escrow -- 6.3%
Education -- 4.6%
Sales Tax -- 4.3%
Transportation -- 3.9%
Mutual Funds Shares and Cash -- 3.5%
Public Facilities -- 3.2%
Other Revenue Bonds -- 2.3%
Utility -- 2.0%
Rental Bonds/Municipal Leases -- 1.6%
Outlook
Looking ahead, we anticipate interest rates to remain in their current range,
possibly trending modestly higher as the Federal Reserve Board addresses
inflationary pressure within the U.S. Economic data suggest that inflation may
be on the rise, and we feel the Fed is likely to act--by raising interest
rates--before inflationary pressures inflict any harmful effects on the U.S.
economy. Along with our team of municipal credit analysts we will continue to
maximize our shareholders' total return utilizing an income-oriented approach
that also seeks to reduce price volatility.
16
<PAGE>
EVERGREEN
Select International Bond Fund
Fund at a Glance as of September 30, 1999
PORTFOLIO PROFILE
Philosophy
The Evergreen Select International Bond Fund seeks to capitalize upon the
unprecedented opportunities taking place in international capital markets and
economies worldwide. The investment management team aims to add yield, provide
diversification, control currency risk while adding value, and utilize the low
to negative correlation to U.S. asset classes.
Process
The investment process incorporates quantitative tools to manage a massive
amount of financial data and to complement the team's fundamental research. A
minimum of 80% of the portfolio is invested in investment grade securities of 19
of the world's top economies*. Up to 20% can be invested in below investment
grade bonds from those 19 countries, or in emerging market bonds. The team
actively uses currency hedging for more efficient risk control.
Benchmark
J.P. Morgan Global Government
Index excluding U.S.
PERFORMANCE AND RETURNS/1/
Portfolio Inception Date: 12/15/1993 Class I Class IS
Class Inception Date 12/15/1993 12/15/1993
Average Annual Returns
1 year 3.96% 3.74%
3 years 5.24% 5.04%
5 years 7.34% 7.10%
Since Portfolio Inception 4.47% 4.23%
30-day SEC Yield 3.83% 3.58%
12-month income dividends per share $0.38 $0.36
LONG TERM GROWTH
[CHART]
JPM Global Consumer Price Evergreen Select
Govt ex US Index - US Interntl Bond I
31-Dec-93 1,000,000 1,000,000 1,000,000
30-Sep-94 1,042,539 1,024,692 898,582
30-Sep-95 1,236,520 1,050,762 1,011,150
30-Sep-96 1,302,665 1,082,312 1,098,597
30-Sep-97 1,299,667 1,105,632 1,158,707
30-Sep-98 1,448,111 1,122,093 1,231,824
30-Sep-99 1,457,235 1,148,842 1,280,550
Comparison of a $1,000,000 investment in Evergreen Select International Bond
Fund, Class I shares/1/, versus a similar investment in the J.P. Morgan Global
Government Index--excluding U.S. (JPMG6XUS), and the Consumer Price Index (CPI).
The JPMG6XUS is an unmanaged market index which does not include transaction
costs associated with buying and selling securities or any management fees. 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.
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees paid by the shareholders investing
in each class. The investment return and principal value will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than original
cost.
Historical performance shown for Class I Shares prior to its inception is based
on the performance of the Class Y Shares of the Fund's predecessor fund,
CoreFund Global Bond Fund. Historical performance shown for Class IS prior to
its inception is based on the performance of the Class A Shares of the Fund's
predecessor fund, and reflects the same 0.25% 12b-1 applicable to Class IS.
*Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany,
Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Spain,
Sweden, Switzerland, United Kingdom.
17
<PAGE>
EVERGREEN
Select International Bond Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO OF GEORGE MCNEIL]
George McNeil
First International Advisors,Ltd.
Performance
Evergreen Select International Bond Fund's Class I shares produced a return of
3.96% for the twelve-month period ended September 30, 1999. The Fund
outperformed its benchmark, the J.P. Morgan Global (excluding U.S.) Government
Index, which returned 0.27% for the same period.
Portfolio
Characteristics
---------------
Total Net Assets $55,496,719
Average Credit Quality AA
Effective Maturity 6.5 years
Average Duration 5.6 years
Environment
While the Fund's fiscal year began with bond prices moving higher,
stronger-than-expected economic growth pushed global interest rates higher over
most of the past twelve months. Central bankers around the world lowered
interest rates in the final quarter of 1998 to stabilize economies and financial
markets after a turbulent summer. Bond prices rose as investors expected weak
economic recoveries in 1999.
The U.S. economy remained strong, however, and many international economies
improved faster and more heartily than many investors anticipated. Market
sentiment shifted to the possibility of excessive, rather than fragile, economic
growth, especially in the United States. Investors began to watch for signs of
inflation and expected a more restrictive monetary policy. The trend toward
higher U.S. interest rates forced many foreign interest rates upward as well, as
the world's economies strengthened and countries sought to attract global cash
flows.
PORTFOLIO QUALITY
(based on 9/30/1999 portfolio assets)
[CHART]
U.S. Government -- 48.7%
AAA -- 26.8%
AA -- 13.6%
A -- 5.1%
BAA -- 4.2%
BA -- 1.3%
B -- 0.3%
18
<PAGE>
EVERGREEN
Select International Bond Fund
Portfolio Manager Commentary
Strategy
We emphasized quality throughout the fiscal year, and actively managed both the
Fund's duration and currency exposure. As of September 30, 1999, approximately
87% of the Fund's net assets were invested in "AAA"-rated or "AA"-rated
securities, resulting in an average portfolio quality of "AA". Also as of that
date, approximately 67% of the Fund was invested in European countries with
stable political climates and large, liquid financial markets, and 23% of net
assets were in Japanese holdings. The remaining 10% of net assets were invested
as follows: Australia, United States, Lithuania, Hong Kong, Poland, Slovakia,
Mexico, Kazakhstan and Supranationals. Supranational bonds are issues of
supranational institutions, such as the World Bank, that can be issued in any
country and in any currency denomination. We established holdings in Japanese
bonds in February, fine-tuning the position's size and duration throughout the
period.
Currency transactions made a positive contribution to the Fund's performance.
Our primary positions were in the euro, the U.S. dollar and the Japanese yen. We
actively managed these holdings depending on relative value and our expectations
for potential price appreciation. In the fourth quarter of 1998, we emphasized
European currencies, taking advantage of their strength prior to the euro being
launched on January 1, 1999. We then shifted the Fund's focus to the U.S. dollar
to benefit from the strength of the U.S. economy in the first half of 1999. By
the end of June 1999, we began to reduce U.S. dollar holdings, reinvesting
assets in the euro and the Japanese yen. This strategy benefited total return,
as the euro and the yen appreciated against the U.S. dollar by 12.04% and 3.5%,
respectively, during the third quarter of 1999. As of September 30, 1999, the
Fund's currency exposure was as follows: 46% euro, 28% Japanese yen, 16% other
European currencies, and 10% U.S. dollar and dollar block currencies.
We also actively managed duration, the Fund's sensitivity to changes in interest
rates. We lengthened duration in the first part of the fiscal year, which
increased the Fund's potential for total return when interest rates fell. We
then shortened duration in January--enhancing price stability as interest rates
rose--and kept a defensive stance for the rest of the fiscal period.
PORTFOLIO COMPOSITION
(based on 9/30/1999 net assets)
[CHART]
Foreign Bonds -- 50.6%
Corporate Notes/Bonds -- 45.5%
Other Assets and Liabilities, net -- 3.9%
GEOGRAPHICAL ALLOCATION
(based on 9/30/1999 portfolio assets)
Japan 22.5%
Netherlands 15.0%
United Kingdom 10.0%
Germany 8.6%
Sweden 6.1%
Denmark 5.5%
Belgium 4.7%
Spain 4.4%
Italy 3.7%
France 3.3%
Norway 3.1%
Austria 2.6%
Supranational 2.5%
Australia 2.4%
Other Countries 5.6%
19
<PAGE>
EVERGREEN
Select International Bond Fund
Portfolio Manager Commentary
Outlook
Our outlook is cautiously optimistic. With the current level of interest rates,
continued low inflation and our expectations for economic fundamentals, we
believe some international bonds are beginning to have attractive relative
value, particularly European bonds with longer maturities. We believe it is
still too early to aggressively lengthen the portfolio, but think it is prudent
to move from a "defensive" to a "neutral" stance.
We are monitoring several factors. "Real" interest rates--the rate earned by
investors after inflation is removed--are in the range of 4 1/2% to 5%, which is
high by historical standards. Economic growth also continues to strengthen, with
signs of sustainable growth coming from France and Spain, in particular. An
outlook for stronger economies, combined with a tightening bias from the United
Kingdom central bank and the European central bank, bodes well for the credit
markets. Further, we expect inflation to remain low because of double-digit
unemployment and the euro appreciating from its lows.
We are less optimistic about the investment environments in the United States
and Japan. The mature economic expansion and low unemployment in the United
States could signal higher interest rates to cool an overheating economy and
contain inflationary pressures. Further, the high trade deficit continues to put
downward pressure on the U.S. dollar. In Japan, the economy began to show signs
of sustainable growth, although it was still reliant on government spending.
Japan's economy remains in a restructuring phase, however, and investors are
facing a heavy calendar for bond issuance in the fourth quarter of 1999.
Additionally, we believe Japan's economic growth will be limited by recent
strength in the yen.
20
<PAGE>
EVERGREEN
Select Limited Duration Fund
Fund at a Glance as of September 30, 1999
PORTFOLIO PROFILE
Philosophy
Evergreen Select Limited Duration Fund seeks higher yields consistent with
preservation of capital and low principal fluctuation. By emphasizing the use of
high quality corporate, mortgage and asset-backed securities maturing in less
than five years, the Fund seeks to provide investors a high level of current
income while reducing price volatility.
Process
The Fund's portfolio manager seeks to enhance performance, while reducing
principal fluctuation, by actively managing three specific characteristics
within the portfolio: maturity structure, sector allocation and security
selection. In addition, quantitative tools are utilized to analyze interest rate
movement and to determine an appropriate duration strategy.
Benchmark
Merrill Lynch 1-3 Year Treasury Bond Index
PERFORMANCE AND RETURNS/1/
Portfolio Inception Date: 4/30/1994 Class I Class IS
Class Inception Date 11/24/1997 7/28/1998
Average Annual Returns
1 year 3.07% 2.81%
3 years 5.60% 5.39%
5 years 6.92% 5.68%
Since Portfolio Inception 5.71% 5.47%
30-day SEC Yield 6.19% 5.94%
12-month income dividends per share $0.60 $0.58
12-month capital gain distributions per share $0.02 $0.02
LONG TERM GROWTH
[GRAPH]
Consumer Price ML 1-3YR Evergreen Select
Index - US Treasury Limited Duration; I
30-Apr-94 1,000,000 1,000,000 1,000,000
30-Sep-94 1,013,569 1,014,291 1,014,669
30-Sep-95 1,039,356 1,098,251 1,093,194
30-Sep-96 1,070,564 1,160,151 1,154,714
30-Sep-97 1,093,630 1,240,083 1,234,016
30-Sep-98 1,109,913 1,338,370 1,323,275
30-Sep-99 1,136,371 1,382,083 1,364,052
Comparison of a $1,000,000 investment in Evergreen Select Limited Duration Fund,
Class I shares/1/, versus a similar investment in the Merrill Lynch 1-3 Year
Treasury Bond Index (ML1-3YTBI), and the Consumer Price Index (CPI).
The ML1-3YTBI is an unmanaged market index which does not include transaction
costs associated with buying and selling securities nor any management fees. 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.
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees paid by the shareholders investing
in each class. The investment return and principal value will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than original
cost.
Historical performance shown for Class IS from 11/24/1997 to its inception is
based on the performance of Class I and has not been adjusted to reflect the
effect of the 0.25% 12b-1 fee applicable to Class IS. Class I pays no 12b-1 fee.
If these fees had been reflected, returns would have been lower. Prior to
11/24/1997, the returns for Classes I and IS are based on the Fund's predecessor
common trust fund's (CTF) performance, adjusted for estimated mutual fund
expenses. The CTF was not registered under the 1940 Act and was not subject to
certain investment restrictions. If the CTF had been registered, it's
performance might have been adversely affected. Performance for the CTF has been
adjusted to include the effect of estimated mutual fund class gross expense
ratios at the time the Fund was converted to a mutual fund. If fee waivers and
expense reimbursements had been calculated into the mutual fund class expense
ratio, the total returns would be as follows: Class I--3 year = 5.71%, 5 year =
6.10% and since 4/30/1994 = 5.90%; Class IS--3 year = 5.50%, 5 year = 5.86% and
since 4/30/1994 = 5.66%.
21
<PAGE>
EVERGREEN
Select Limited Duration Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO] [PHOTO]
Sam Paddison David Fowley
Performance
For the twelve-month period ended September 30, 1999, the Evergreen Select
Limited Duration Bond Fund I Shares posted a 3.07% total return, versus a 3.22%
return on its benchmark, the Merrill Lynch 1-3 Year Treasury Index. The return
of 3.07% ranked in the top 25% of short U.S. government funds tracked by Lipper
Inc., an independent mutual fund rating company.
Portfolio
Characteristics
---------------
Total Net Assets $313,785,740
Average Credit Quality AA
Effective Maturity 1.9 years
Average Duration 1.6 years
Environment
U.S. Treasury yields increased significantly over the last year. The 2-Year
Treasury's yield widened 8 basis points during the quarter, making it 133 basis
points wider for the year, yielding 5.60% at quarter end. Bond yields continued
to rise as fears of inflation resurfaced with investors. The Federal Reserve
lowered its target rate by 25 basis points on October 15, 1998, and again on
November 17. The Federal Reserve reversed out earlier rate cuts by raising rates
by 25 basis points on June 30, 1999, and again on August 24, bringing the target
rate back to 5.25%. The Federal Reserve appears to be in a holding pattern, with
a tightening bias, while investors are trying to figure out the consequences, if
any, of Y2K.
PORTFOLIO COMPOSITION
(based on 9/30/1999 net assets)
[PIE CHART]
Corporate Notes/Bonds -- 51.2%
Mortgage-Backed
Securities -- 19.2%
Asset-Backed Securities -- 18.6%
Other Assets and
Liabilities, net -- 11.0%
22
<PAGE>
EVERGREEN
Select Limited Duration Fund
Portfolio Manager Commentary
Strategy
The Fund increased its exposure to corporate, mortgage-backed and asset-backed
securities during the period, eliminated its position in U.S. Treasuries and
reduced its exposure to Federal Agencies. Corporate spreads ended the year
relatively unchanged from their November highs, resulting in corporate bonds
outperforming comparable Treasuries by a relatively wide margin. The patient
investor can find bonds at "fire-sale" prices as brokers and investors clean
their books in anticipation of Y2K and do some year-end window dressing.
Short-term, mortgage-backed and asset-backed securities were the two highest
performing sectors over the year. The Fund maintained below-average duration
ranging from 95% to 100% of its benchmark, the Merrill Lynch 1-3 Year Treasury
Bond Index.
PORTFOLIO QUALITY
(based on 9/30/1999 portfolio assets)
[PIE CHART]
BAA -- 33.1%
AAA -- 28.7%
A -- 16.7%
AA -- 13.6%
BA -- 7.9%
Outlook
We plan to maintain an above-average weighting in spread sectors (corporate,
asset-backed and mortgage-backed securities), because we feel the sectors are
still undervalued based on break-even analysis. We plan to stay short of the
benchmark until the technical and fundamental factors convince us otherwise. We
believe the bond yields are currently trading in a range between 6.00% and
6.25%, but longer term, we feel bond yields will fall as the Federal Reserve
continues to keep inflation under control.
23
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Fund at a Glance as of September 30, 1999
PORTFOLIO PROFILE
Philosophy
The Evergreen Select Total Return Bond Fund uses a core-plus, fixed income
approach which seeks to enhance returns by opportunistically investing up to 35%
of the portfolio in the high yield and international fixed income markets.
Process
The managers maintain a focus on sector allocation, credit analysis and security
selection as opposed to interest rate anticipation. Asset allocation among the
three portfolio components--domestic high grade, domestic high yield and
international--is aided by quantitative models, and determined through dynamic
discussions between the three portfolio managers that revolve around several
factors, including underlying market fundamentals.
Benchmark
Lehman Brothers Aggregate Bond Index
PERFORMANCE AND RETURNS/1/
Portfolio Inception Date: 4/20/1998 Class I Class IS
Class Inception Date 4/20/1998 8/3/1998
Average Annual Returns
1 year -0.87% -1.12%
Since Portfolio Inception 1.35% 1.14%
30-day SEC Yield 6.40% 6.14%
12-month income dividends per share $6.30 $6.06
LONG TERM GROWTH
[LINE GRAPH]
Lehman Brothers Consumer Price Evergreen Select
Aggregate Index - US Total Return I
30-Apr-98 1,000,000 1,000,000 1,000,000
31-May-98 1,010,152 1,001,846 1,008,803
30-Jun-98 1,018,744 1,003,077 1,016,286
31-Jul-98 1,020,870 1,004,308 1,019,179
31-Aug-98 1,037,513 1,005,538 1,015,517
30-Sep-98 1,061,794 1,006,769 1,031,008
31-Oct-98 1,056,160 1,009,231 1,019,643
30-Nov-98 1,062,180 1,009,231 1,031,078
31-Dec-98 1,065,366 1,008,615 1,033,766
31-Jan-99 1,072,929 1,011,077 1,041,034
28-Feb-99 1,054,152 1,012,308 1,021,826
31-Mar-99 1,059,949 1,015,385 1,026,710
30-Apr-99 1,063,340 1,022,769 1,033,137
31-May-99 1,053,983 1,022,769 1,021,180
30-Jun-99 1,050,610 1,022,769 1,015,583
31-Jul-99 1,046,197 1,025,846 1,016,342
31-Aug-99 1,045,674 1,028,308 1,013,407
30-Sep-99 1,057,916 1,030,769 1,021,998
Comparison of a $1,000,000 investment in Evergreen Select Total Return Bond
Fund, Class I shares/1/, versus a similar investment in the Lehman Brothers
Aggregate Bond Index (LBABI), and the Consumer Price Index (CPI).
The LBABI is an unmanaged market index which does not include transaction costs
associated with buying and selling securities nor any management fees. 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.
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees paid by the shareholders investing
in each class. The investment return and principal value will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than original
cost
Historical performance shown for Class IS prior to its inception is based on the
performance of Class I and has not been adjusted to reflect the effect of the
0.25% 12b-1 fee applicable to Class IS. Class I pays no 12b-1 fee. If these fees
had been reflected, returns would have been lower.
24
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Portfolio Manager Commentary
Portfolio Management Team
[PHOTO] [PHOTO]
Rollin C. Williams, CFA Richard M. Cryan
[PHOTO]
Anthony Norris
First International Advisers, Ltd.
Performance
Evergreen Select Total Return Bond Fund's Class I shares declined to -0.87% for
the twelve month period ended September 30, 1999. The Fund modestly lagged its
benchmark, the Lehman Brothers Aggregate Index, which fell to -0.37% for the
same period.
Portfolio
Characteristics
---------------
Total Net Assets $150,653,519
Average Credit Quality AA
Effective Maturity 8.7 years
Average Duration 5.5 years
Environment
Interest rates fell going into the fourth quarter of 1998, but beginning early
in the quarter, trended higher for the rest of the fiscal year on
stronger-than-expected economic growth. Central bankers around the world
initiated a series of interest rate cuts late in 1998, seeking to restore
stability to global economies and financial markets after a turbulent summer.
Many investors anticipated weak recoveries in 1999, believing that fragile
international economies would dampen U.S. economic growth.
The U.S. economy remained robust, however; and foreign economies generally
experienced faster and more sustainable growth than many investors had
anticipated. Market sentiment reversed course, focusing on the possibility that
the economy could overheat instead of falter. Investors pushed interest rates
higher, monitoring signs of inflation and preparing for a tighter domestic
monetary policy. With stronger worldwide growth and the pursuit of international
cash flows, the trend toward higher interest rates became global. Investor
expectations of a more restrictive monetary policy became reality in mid-1999,
when the Federal Reserve Board and other central bankers began to raise interest
rates.
While the year was difficult for bond investors, opportunities also emerged from
the market's changing conditions. Demand for U.S. Treasuries surged at the end
of the last fiscal year, as investors sparked a
25
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Portfolio Manager Commentary
"flight-to-quality" in response to increasingly shaky world economies and
financial markets. Seeking only securities of the highest quality and liquidity,
investors drove the yield advantages of riskier credits versus Treasuries to
levels that were high by historical standards--with yield advantage increasing
with risk. The rising yield advantages gave corporate bonds, mortgage-backed
securities and international bonds attractive relative value.
PORTFOLIO COMPOSITION
(based on 9/30/1999 net assets)
[PIE CHART]
Treasury Notes/Bonds -- 31.5%
Corporate Notes/Bonds -- 26.0%
Foreign Bonds -- 20.1%
Mortgage-Backed Securities -- 18.8%
Other Assets and Liabilities, net -- 3.6%
Strategy
We emphasized total return and income by actively managing the Fund's
asset-allocation. We also fine-tuned the Fund's holdings within each market
sector, including actively managing duration.
The investment grade portion of the Fund maintained a long duration relative to
the Fund's benchmark for the first part of the fiscal period. This added to
total return when interest rates fell. We adjusted duration throughout the
period, depending upon our outlook for interest rates. As of September 30, 1999,
the duration of the Fund's investment grade investments stood at 5.50 years,
approximately 110% of its benchmark. We also fine-tuned the Fund's investment
grade corporate bond position, increasing holdings when yield advantages reached
attractive levels in the fourth quarter of 1998 and later reducing the position
when yield advantages declined.
Asset-allocation, currency exposure and duration management drove performance in
the Fund's international sector. The Fund's international holdings rose from 7%
at the beginning of the fiscal year, to 11% on March 31, 1999 and 20.1% on
September 30, 1999.
We emphasized quality throughout the period, primarily investing in bonds rated
"AAA" and "AA" in European countries with stable governments and large, liquid
financial markets. The Fund also held a sizable position in Japan. We increased
the Fund's exposure to the international sector in July 1999, when foreign
interest rates became attractive and the outlook for Europe's investment climate
and currency performance improved.
The Fund experienced three major currency shifts. We emphasized European
currencies in the fourth quarter of 1998, taking advantage of their strength
just prior to the January 1, 1999 launch of the euro. We then focused on the
U.S. dollar to benefit from the strength in the U.S. economy through mid-year
1999. By the end of June, we began to reduce U.S. dollar holdings, reinvesting
assets in the euro and the Japanese yen. The international portion of the Fund
also actively managed duration, maintaining a long duration in the fourth
quarter of 1998, shortening and keeping a defensive duration stance throughout
much of the period, and becoming neutral as the fiscal year came to a close.
We increased high yield bond holdings from 17% at the beginning of the fiscal
year to 25% in May 1999, taking advantage of the attractive yield advantage
provided by high yield bonds, particularly at the end of 1998. We reduced the
Fund's holdings in "BB"-rated credits, increasing our position in bonds rated
"B" because of the attractive pick-up in yield advantages. This strategy
benefited performance when lower-rated bonds outperformed higher-rated bonds. We
reduced the Fund's overall allocation to high yield bonds to 16% in July,
reinvesting assets in international
26
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Portfolio Manager Commentary
bonds. At that time, we became more cautious about the near-term outlook for
high yield bonds, which later underperformed because of a rising default rate,
heavy new supply and less demand.
PORTFOLIO QUALITY
(based on 9/30/1999 portfolio assets)
[PIE CHART]
U.S. Government -- 33.1%
U.S. Government Agency -- 19.8%
Not Rated -- 16.1%
Not Available -- 10.0%
A -- 9.5%
AAA -- 5.1%
BAA -- 4.4%
AA -- 2.0%
Outlook
We think bonds offer attractive relative value over the longer term, although
domestically, we could be in for choppy conditions over the next few months.
Investors are waiting to see if the Federal Reserve Board will tighten monetary
policy again before the end of the year--and the market hates uncertainty.
Additionally, many issuers have brought bonds to market prior to Y2K, increasing
supply. In contrast, most dealers are reluctant to build inventory, particularly
in light of Y2K. The combination of heavy supply and limited demand has given
little support to bond prices. The near-term outlook for Europe appears
brighter, with increasing signs of sustainable growth and a bias toward higher
interest rates--a situation that bodes well for the Fund's currency position.
Longer term, we believe bonds offer attractive relative value. "Real" interest
rates--the rate earned by the investor in excess of inflation--are high by
historical standards. Further, we think yield advantages represent attractive
value. The combination of "real" interest rates and generous yield advantages
set the stage for solid price appreciation longer term.
27
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
September 30, February 28, September 30,
----------------- ----------------- ----------------
1999 1998 (a) 1998 1997 (b) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS I
Net asset value,
beginning of period $ 9.68 $ 9.75 $ 9.71 $ 9.68 $ 9.65 $ 9.61
------- ------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.59 0.35 0.64 0.28 0.64# 0.63
Net realized and
unrealized gains or
losses on securities (0.12) (0.07) 0.04 0++ 0 0.01
------- ------- ------- ------- ------- -------
Total from investment
operations 0.47 0.28 0.68 0.28 0.64 0.64
------- ------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.59) (0.35) (0.64) (0.25) (0.61) (0.60)
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 9.56 $ 9.68 $ 9.75 $ 9.71 $ 9.68 $ 9.65
------- ------- ------- ------- ------- -------
Total return 4.98% 2.88% 7.15% 2.97% 6.86% 6.87%
Ratios and supplemental
data
Net assets, end of
period (thousands) $36,033 $23,174 $25,981 $70,264 $65,974 $23,616
Ratios to average net
assets
Expenses* 0.30% 0.33%+ 0.30% 0.30%+ 0.30% 0.30%
Net investment income 6.11% 6.12%+ 6.63% 6.79%+ 6.84% 6.61%
Portfolio turnover rate 14% 46% 107% 44% 85% 56%
<CAPTION>
Year Ended Year Ended Year Ended
September 30, February 28, September 30,
----------------- ----------------- ----------------
1999 1998 (a) 1998 1997 (b) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS IS
Net asset value,
beginning of period $ 9.68 $ 9.76 $ 9.72 $ 9.68 $ 9.65 $ 9.61
------- ------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.55 0.33 0.59 0.28 0.65# 0.64
Net realized and
unrealized gains or
losses on securities (0.11) (0.08) 0.06 0++ (0.03) (0.02)
------- ------- ------- ------- ------- -------
Total from investment
operations 0.44 0.25 0.65 0.28 0.62 0.62
------- ------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.56) (0.33) (0.61) (0.24) (0.59) (0.58)
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 9.56 $ 9.68 $ 9.76 $ 9.72 $ 9.68 $ 9.65
------- ------- ------- ------- ------- -------
Total return 4.73% 2.63% 6.89% 2.97% 6.60% 6.60%
Ratios and supplemental
data
Net assets, end of
period (thousands) $20,199 $ 9,645 $10,320 $ 3,564 $14,361 $ 2,871
Ratios to average net
assets
Expenses* 0.55% 0.57%+ 0.55% 0.55%+ 0.55% 0.55%
Net investment income 5.86% 5.82%+ 6.15% 6.39%+ 6.64% 6.70%
Portfolio turnover rate 14% 46% 107% 44% 85% 56%
</TABLE>
(a) For the seven months ended September 30, 1998. The Fund changed its fiscal
year end from the last day of February to September 30, effective September
30, 1998.
(b) For the five months ended February 28, 1997. The Fund changed its fiscal
year end from September 30 to the last day of February, effective February
28, 1997.
# Net investment income is based on weighted average shares throughout the
period.
+ Annualized.
++ Amount represents less than $0.01 per share.
* Ratio of expenses to average net assets excludes fees credits, but includes
fee waivers.
See Combined Notes to Financial Statements.
28
<PAGE>
EVERGREEN
Select Core Bond Fund
Financial Highlights
(For a share oustanding throughout each period)
<TABLE>
<CAPTION>
Period Ended Years Ended March 31, (b)
September 30, --------------------------------------------
1999** (b) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS I
Net asset value,
beginning of period $ 10.39 $ 10.53 $ 9.98 $ 10.11 $ 9.70 $ 9.88
--------- -------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.30 0.59 0.56 0.66 0.68 0.60
Net realized and
unrealized gains or
losses on securities (0.30) 0.09 0.61 (0.12) 0.40 (0.18)
--------- -------- ------- ------- ------- -------
Total from investment
operations 0 0.68 1.17 0.54 1.08 0.42
--------- -------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.30) (0.61) (0.62) (0.67) (0.67) (0.60)
Net realized gains (0.01) (0.21) 0 0 0 0
--------- -------- ------- ------- ------- -------
Total distributions to
shareholders (0.31) (0.82) (0.62) (0.67) (0.67) (0.60)
--------- -------- ------- ------- ------- -------
Net asset value, end of
period $ 10.08 $ 10.39 $ 10.53 $ 9.98 $ 10.11 $ 9.70
--------- -------- ------- ------- ------- -------
Total return 0.00% 0.07% 12.06% 5.52% 11.23% 4.56%
Ratios and supplemental
data
Net assets, end of
period (thousands) 1,042,781 $109,028 $96,252 $76,499 $74,774 $72,029
Ratios to average net
assets
Expenses* 0.40%+ 0.50% 0.50% 0.50% 0.53% 0.53%
Net investment income 5.70%+ 5.73% 6.06% 6.48% 6.54% 6.28%
Portfolio turnover rate 225% 221% 235% 207% 268% 381%
</TABLE>
<TABLE>
<CAPTION>
Period Ended Year Ended March 31 (b)
September 30, -----------------------
1999** 1999 1998 (a)
<S> <C> <C> <C>
CLASS IS
Net asset value, beginning of
period $10.40 $ 10.54 $ 10.40
------ ----------- -----------
Income from investment operations
Net investment income 0.28 0.59 0.36
Net realized and unrealized gains
or losses on securities (0.31) 0.07 0.08
------ ----------- -----------
Total from investment operations (0.03) 0.66 0.44
------ ----------- -----------
Distributions to shareholders from
Net investment income (0.28) (0.59) (0.30)
Net realized gains (0.01) (0.21) --
------ ----------- -----------
Total Distributions (0.29) (0.80) (0.30)
------ ----------- -----------
Net asset value, end of period $10.08 $ 10.40 $ 10.54
------ ----------- -----------
Total return (0.17%) (0.01%) 8.55%
Ratios and supplemental data
Net assets, end of period
(thousands) $5,744 $ 2,721 $ 3,069
Ratios to average net assets
Expenses* 0.61%+ 0.65% 0.65%+
Net investment income 5.49%+ 5.59% 5.96%+
Portfolio turnover rate 225% 221% 235%
</TABLE>
(a) For the period from October 2, 1997 (commencement of class operations) to
March 31, 1998. through March 31, 1998.
(b) On June 4, 1999, Evergreen Select Core Bond Fund acquired the net assets of
the Tattersall Bond Fund. The Tattersall Bond Fund was the accounting and
performance survivor in this transaction. The above financial highlights
for the the periods ended prior to March 31, 1999 are those of the
Tattersall Bond Fund, which have been restated to give effect for this
transaction.
+ Annualized.
* Ratio of expenses to average net assets excludes fees credits, but includes
fee waivers.
** For the six month period ended September 30, 1999. The Fund changed its fis-
cal year end from the last day of March to September 30, effective September
30, 1999.
See Combined Notes to Financial Statements.
29
<PAGE>
EVERGREEN
Select Fixed Income Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------
1999 1998 (a)
<S> <C> <C>
CLASS I
Net asset value, beginning of period $ 6.12 $ 5.96
------------ ------------
Income from investment operations
Net investment income 0.35 0.31
Net realized and unrealized gains or losses on
securities (0.30) 0.16
------------ ------------
Total from investment operations 0.05 0.47
------------ ------------
Distributions to shareholders from
Net investment income (0.35) (0.31)
------------ ------------
Net asset value, end of period $ 5.82 $ 6.12
------------ ------------
Total return 0.84% 8.06%
Ratios and supplemental data
Net assets, end of period (thousands) $ 590,927 $ 668,907
Ratios to average net assets
Expenses* 0.49% 0.52%+
Net investment income 5.86% 5.99%+
Portfolio turnover rate 63% 46%
<CAPTION>
Year Ended September 30,
----------------------------
1999 1998 (b)
<S> <C> <C>
CLASS IS
Net asset value, beginning of period $ 6.12 $ 5.97
------------ ------------
Income from investment operations
Net investment income 0.33 0.20
Net realized and unrealized gains or losses on
securities (0.30) 0.15
------------ ------------
Total from investment operations 0.03 0.35
------------ ------------
Distributions to shareholders from
Net investment income (0.33) (0.20)
------------ ------------
Net asset value, end of period $ 5.82 $ 6.12
------------ ------------
Total return 0.59% 5.94%
Ratios and supplemental data
Net assets, end of period (thousands) $ 11,590 $ 9,808
Ratios to average net assets
Expenses* 0.74% 0.77%+
Net investment income 5.65% 5.65%+
Portfolio turnover rate 63% 46%
</TABLE>
(a) For the period from November 24, 1997 (commencement of class operations) to
September 30, 1998.
(b) For the period from March 9, 1998 (commencement of class operations) to
September 30, 1998.
+ Annualized
* Ratio of expenses to average net assets excludes fees credits, but includes
fee waivers.
See Combined Notes to Financial Statements.
30
<PAGE>
EVERGREEN
Select Income Plus Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
-----------------------------
1999 1998 (a)
<S> <C> <C>
CLASS I
Net asset value, beginning of period $ 5.92 $ 5.72
------------ ------------
Income from investment operations
Net investment income 0.33 0.30
Net realized and unrealized gains or losses on
securities (0.46) 0.20
------------ ------------
Total from investment operations (0.13) 0.50
------------ ------------
Distributions to shareholders from
Net investment income (0.33) (0.30)
Net realized gains (0.05) 0
------------ ------------
Total distributions to shareholders (0.38) (0.30)
------------ ------------
Net asset value, end of period $ 5.41 $ 5.92
------------ ------------
Total return (2.13%) 8.99%
Ratios and supplemental data
Net assets, end of period (thousands) $ 1,794,209 $ 1,367,240
Ratios to average net assets
Expenses* 0.48% 0.51%+
Net investment income 5.95% 6.09%+
Portfolio turnover rate 70% 37%
<CAPTION>
Year Ended September 30,
-----------------------------
1999 1998 (b)
<S> <C> <C>
CLASS IS
Net asset value, beginning of period $ 5.92 $ 5.71
------------ ------------
Income from investment operations
Net investment income 0.32 0.19
Net realized and unrealized gains or losses on
securities (0.46) 0.21
------------ ------------
Total from investment operations (0.14) 0.40
------------ ------------
Distributions to shareholders from
Net investment income (0.32) (0.19)
Net realized gains (0.05) 0
------------ ------------
Total distributions to shareholders (0.37) (0.19)
------------ ------------
Net asset value, end of period $ 5.41 $ 5.92
------------ ------------
Total return (2.36%) 7.21%
Ratios and supplemental data
Net assets, end of period (thousands) $ 10,871 $ 7,528
Ratios to average net assets
Expenses* 0.73% 0.75%+
Net investment income 5.74% 5.80%+
Portfolio turnover rate 70% 37%
</TABLE>
(a) For the period from November 24, 1997 (commencement of class operations) to
September 30, 1998.
(b) For the period from March 2, 1998 (commencement of class operations) to
September 30, 1998.
+ Annualized
* Ratio of expenses to average net assets excludes fees credits, but includes
fee waivers.
See Combined Notes to Financial Statements.
31
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
-----------------------------
1999 1998 (a)
<S> <C> <C>
CLASS I
Net asset value, beginning of period $ 67.11 $ 64.84
------------ ------------
Income from investment operations
Net investment income 2.97 2.57
Net realized and unrealized gains or losses on
securities (4.89) 2.27
------------ ------------
Total from investment operations (1.92) 4.84
------------ ------------
Distributions to shareholders from
Net investment income (2.97) (2.57)
Net realized gains (0.89) 0
------------ ------------
Total distributions to shareholders (3.86) (2.57)
------------ ------------
Net asset value, end of period $ 61.33 $ 67.11
------------ ------------
Total return (3.00%) 7.61%
Ratios and supplemental data
Net assets, end of period (thousands) $ 704,474 $ 746,874
Ratios to average net assets
Expenses* 0.57% 0.62%+
Net investment income 4.59% 4.59%+
Portfolio turnover rate 97% 47%
<CAPTION>
Year Ended September 30,
-----------------------------
1999 1998 (b)
<S> <C> <C>
CLASS IS
Net asset value, beginning of period $ 67.11 $ 65.91
------------ ------------
Income from investment operations
Net investment income 2.81 1.66
Net realized and unrealized gains or losses on
securities (4.89) 1.20
------------ ------------
Total from investment operations (2.08) 2.86
------------ ------------
Distributions to shareholders from
Net investment income (2.81) (1.66)
Net realized gains (0.89) 0
------------ ------------
Total distributions to shareholders (3.70) (1.66)
------------ ------------
Net asset value, end of period $ 61.33 $ 67.11
------------ ------------
Total return (3.24%) 4.41%
Ratios and supplemental data
Net assets, end of period (thousands) $ 5,863 $ 4,736
Ratios to average net assets
Expenses* 0.83% 0.89%+
Net investment income 4.41% 4.35%+
Portfolio turnover rate 97% 47%
</TABLE>
(a) For the period from November 24, 1997 (commencement of class operations) to
September 30, 1998.
(b) For the period from March 2, 1998 (commencement of class operations) to
September 30, 1998.
+ Annualized
* Ratio of expenses to average net assets excludes fees credits, but includes
fee waivers.
See Combined Notes to Financial Statements.
32
<PAGE>
EVERGREEN
Select International Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30, Year Ended June 30, 1999
------------------------------ --------------------------------------
1999 1998 (a) (b) 1998 (b) 1997 (b) 1996 (b) 1995 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS I
Net asset value,
beginning of period $ 9.52 $ 9.32 $ 9.54 $ 9.70 $ 9.62 $ 9.06
------------ ------------ ------- ------- ------- -------
Income from investment
operations
Net investment income 0.40 0.11# 0.47 0.49 0.47 0.62
Net realized and
unrealized gains or
losses on securities (0.03) 0.22 (0.06) 0.09 0.30 0.24
------------ ------------ ------- ------- ------- -------
Total from investment
operations 0.37 0.33 0.41 0.58 0.77 0.86
------------ ------------ ------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.38) (0.13) (0.63) (0.74) (0.69) (0.30)
------------ ------------ ------- ------- ------- -------
Net asset value, end of
period $ 9.51 $ 9.52 $ 9.32 $ 9.54 $ 9.70 $ 9.62
------------ ------------ ------- ------- ------- -------
Total return 3.96% 3.56% 4.42% 6.18% 8.00% 9.70%
Ratios and supplemental
data
Net assets, end of
period (thousands) $ 55,258 $ 46,607 $36,722 $34,590 $32,998 $26,898
Ratios to average net
assets
Expenses* 0.69% 0.76%+ 0.81% 0.85% 0.71% 0.64%
Net investment income 4.18% 4.89%+ 4.90% 5.14% 5.81% 6.84%
Portfolio turnover rate 158% 3% 46% 90% 67% 133%
<CAPTION>
Year Ended September 30, Year Ended June 30,
------------------------------ --------------------------------------
1999 1998 (a) (b) 1998 (b) 1997 (b) 1996 (b) 1995 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS IS
Net asset value,
beginning of period $ 9.51 $ 9.30 $ 9.52 $ 9.68 $ 9.61 $ 9.04
------------ ------------ ------- ------- ------- -------
Income from investment
operations
Net investment income 0.38 0.11# 0.40 0.42 0.61 0.61
Net realized and
unrealized gains or
losses on securities (0.03) 0.23 (0.01) 0.14 0.12 0.24
------------ ------------ ------- ------- ------- -------
Total from investment
operations 0.35 0.34 0.39 0.56 0.73 0.85
------------ ------------ ------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.36) (0.13) (0.61) (0.72) (0.66) (0.28)
------------ ------------ ------- ------- ------- -------
Net asset value, end of
period $ 9.50 $ 9.51 $ 9.30 $ 9.52 $ 9.68 $ 9.61
------------ ------------ ------- ------- ------- -------
Total return 3.74% 3.61% 4.16% 5.92% 7.74% 9.57%
Ratios and supplemental
data
Net assets, end of
period (thousands) $ 238 $ 129 $ 198 $ 182 $ 152 $ 170
Ratios to average net
assets
Expenses* 0.95% 1.00%+ 1.06% 1.10% 0.96% 0.89%
Net investment income 3.85% 4.65%+ 4.65% 4.89% 5.56% 6.59%
Portfolio turnover rate 158% 3% 46% 90% 67% 133%
</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.
(b) On August 28, 1998, CoreFund Global Bond Fund exchanged substantially all
of its net assets for shares of Evergreen Select International Bond Fund.
CoreFund Global Bond Fund is the accounting survivor and as such its basis
of accounting for assets and liabilities and its operating results for the
periods prior to August 28, 1998 have been carried forward in these finan-
cial highlights.
# Net investment income is based on weighted average shares throughout the pe-
riod.
+ Annualized.
* Ratio of expenses to average net assets excludes fees credits, but includes
fee waivers.
See Combined Notes to Financial Statements.
33
<PAGE>
EVERGREEN
Select Limited Duration Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
---------------------------
1999 1998 (a)
<S> <C> <C>
CLASS I
Net asset value, beginning of period $ 10.52 $ 10.42
------------ -----------
Income from investment operations
Net investment income 0.60 0.53#
Net realized and unrealized gains or losses on
securities (0.29) 0.10
------------ -----------
Total from investment operations 0.31 0.63
------------ -----------
Distributions to shareholders from
Net investment income (0.60) (0.53)
Net realized gains (0.02) 0
------------ -----------
Total distributions to shareholders (0.62) (0.53)
------------ -----------
Net asset value, end of period $ 10.21 $ 10.52
------------ -----------
Total return 3.07% 6.21%
Ratios and supplemental data
Net assets, end of period (thousands) $ 312,157 $ 70,810
Ratios to average net assets
Expenses* 0.31% 0.30%+
Net investment income 5.88% 5.97%+
Portfolio turnover rate 147% 78%
<CAPTION>
Year Ended September 30,
---------------------------
1999 1998 (b)
<S> <C> <C>
CLASS IS
Net asset value, beginning of period $ 10.52 $ 10.41
------------ -----------
Income from investment operations
Net investment income 0.58 0.11#
Net realized and unrealized gains or losses on
securities (0.29) 0.11
------------ -----------
Total from investment operations 0.29 0.22
------------ -----------
Distributions to shareholders from
Net investment income (0.58) (0.11)
Net realized gains (0.02) 0
------------ -----------
Total distributions to shareholders (0.60) (0.11)
------------ -----------
Net asset value, end of period $ 10.21 $ 10.52
------------ -----------
Total return 2.81% 2.12%
Ratios and supplemental data
Net assets, end of period (thousands) $ 1,629 $ 614
Ratios to average net assets
Expenses* 0.56% 0.55%+
Net investment income 5.67% 5.84%+
Portfolio turnover rate 147% 78%
</TABLE>
(a) For the period from November 24, 1997 (commencement of class operations) to
September 30, 1998.
(b) For the period from July 28, 1998 (commencement of class operations) to
September 30, 1998.
# Net investment income is based on weighted average shares throughout the
period.
+ Annualized.
* Ratio of expenses to average net assets excludes fees credits, but includes
fee waivers.
See Combined Notes to Financial Statements.
34
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
-----------------------------
1999 1998 (a)
<S> <C> <C>
CLASS I
Net asset value, beginning of period $ 99.71 $ 100.00
------------ ------------
Income from investment operations
Net investment income 6.29 3.08
Net realized and unrealized gains or losses on
securities (7.13) (0.29)
------------ ------------
Total from investment operations (0.84) 2.79
------------ ------------
Distributions to shareholders from
Net investment income (6.30) (3.08)
------------ ------------
Net asset value, end of period $ 92.57 $ 99.71
------------ ------------
Total return (0.87%) 2.83%
Ratios and supplemental data
Net assets, end of period (thousands) $ 144,320 $ 135,998
Ratios to average net assets
Expenses* 0.50% 0.41%+
Net investment income 6.57% 6.88%+
Portfolio turnover rate 136% 80%
<CAPTION>
Year Ended September 30,
-----------------------------
1999 1998 (b)
<S> <C> <C>
CLASS IS
Net asset value, beginning of period $ 99.71 $ 99.67
------------ ------------
Income from investment operations
Net investment income 6.05 1.05
Net realized and unrealized gains or losses on
securities (7.13) 0.04
------------ ------------
Total from investment operations (1.08) 1.09
------------ ------------
Distributions to shareholders from
Net investment income (6.06) (1.05)
------------ ------------
Net asset value, end of period $ 92.57 $ 99.71
------------ ------------
Total return (1.12%) 1.10%
Ratios and supplemental data
Net assets, end of period (thousands) $ 6,334 $ 24
Ratios to average net assets
Expenses* 0.75% 0.66%+
Net investment income 6.35% 6.51%+
Portfolio turnover rate 136% 80%
</TABLE>
(a) For the period from April 20, 1998 (commencement of class operations) to
September 30, 1998.
(b) For the period from August 3, 1998 (commencement of class operations) to
September 30, 1998.
+ Annualized
* Ratio of expenses to average net assets excludes fees credits, but includes
fee waivers.
See Combined Notes to Financial Statements.
35
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Schedule of Investments
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ADJUSTABLE RATE MORTGAGE SECURITIES - 73.3%
FHLMC - 25.6%
$2,118,123 6.664%, 1/1/2022..................................... $ 2,188,285
586,898 6.722%, 3/1/2021..................................... 601,847
611,340 6.768%, 7/1/2030..................................... 627,289
1,441,685 6.772%, 3/1/2022..................................... 1,464,212
938,570 6.921%, 3/1/2019..................................... 981,392
307,012 6.943%, 7/1/2019..................................... 315,743
2,111,921 6.95%, 6/1/2016...................................... 2,147,570
1,048,411 6.994%, 11/1/2021.................................... 1,074,621
3,399,577 7.072%, 4/1/2022..................................... 3,522,267
674,017 7.073%, 10/1/2021.................................... 685,287
600,366 7.328%, 9/1/2017..................................... 612,001
157,466 7.397%, 4/1/2020..................................... 159,015
-----------
14,379,529
-----------
FNMA - 44.2%
2,458,204 5.482%, 7/1/2029..................................... 2,408,646
752,748 5.779%, 4/1/2038..................................... 752,043
865,900 5.94%, 11/1/2028..................................... 854,808
692,284 6.087%, 5/1/2036..................................... 692,284
231,587 6.45%, 1/1/2022...................................... 232,203
220,801 6.504%, 7/1/2027..................................... 225,769
2,081,965 6.556%, 5/1/2022..................................... 2,124,916
598,451 6.64%, 1/1/2016...................................... 612,664
200,942 6.646%, 10/1/2017.................................... 204,836
507,066 6.656%, 11/1/2018.................................... 517,527
156,816 6.703%, 7/1/2020..................................... 161,594
6,469,402 6.725%, 9/1/2021..................................... 6,662,449
83,334 6.726%, 2/1/2017..................................... 83,633
137,905 6.728%, 12/1/2022.................................... 140,685
1,087,744 6.773%, 2/1/2027..................................... 1,124,455
375,507 6.795%, 1/1/2022..................................... 387,827
339,788 6.798%, 10/1/2016.................................... 348,177
2,418,416 6.805%, 12/1/2023.................................... 2,448,114
1,980,273 6.845%, 1/1/2031..................................... 2,029,463
597,731 6.852%, 12/1/2019.................................... 613,421
682,740 6.90%, 9/1/2018...................................... 710,159
1,447,982 6.928%, 11/1/2017.................................... 1,492,327
-----------
24,828,000
-----------
GNMA - 3.5%
1,996,643 6.00%, 8/20/2029..................................... 1,989,682
-----------
Total Adjustable Rate Mortgage Securities (cost
$41,388,029)........................................ 41,197,211
-----------
FIXED RATE MORTGAGES - 7.4%
FHLMC - 0.6%
250,000 6.25%, 7/15/2004..................................... 248,545
14,844 7.25%, 11/1/2008..................................... 14,846
94,788 10.50%, 4/1/2004..................................... 97,805
-----------
361,196
-----------
FNMA - 4.5%
67,953 9.50%, 4/15/2005..................................... 68,292
162,927 10.50%, 3/1/2001..................................... 166,608
422,055 10.75%, 10/1/2012.................................... 456,857
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
FIXED RATE MORTGAGES - continued
FNMA - continued
$ 283,612 11.00%, 1/1/2018..................................... $ 311,127
536,326 9.00%, 11/1/2006..................................... 555,345
346,510 9.00%, 6/1/2007...................................... 358,420
596,322 9.50%, 5/1/2007...................................... 616,692
-----------
2,533,341
-----------
GNMA - 2.3%
1,279,403 10.25%, 11/15/2029................................... 1,293,975
-----------
Total Fixed Rate Mortgages
(cost $4,255,419)................................... 4,188,512
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.8%
FHLMC - 0.8%
455,262 FHLMC STRIPS CMO, Ser. 20,
Class F, IO,
5.856%, 7/1/2029 (cost $457,538)..................... 451,848
-----------
U.S. AGENCY OBLIGATIONS - 2.2%
FHLMC - 2.2%
498,861 9.00%, 6/1/2006...................................... 511,617
530,532 9.75%, 3/1/2016...................................... 555,743
167,797 10.50%, 10/1/2005.................................... 171,428
-----------
Total U.S. Agency Obligations
(cost $1,241,008)................................... 1,238,788
-----------
U.S. TREASURY OBLIGATIONS - 9.8%
U.S. Treasury Notes:
400,000 4.50%, 1/31/2001..................................... 394,564
600,000 4.75%, 2/15/2004..................................... 575,532
1,000,000 5.25%, 5/15/2004..................................... 977,340
2,600,000 5.50%, 8/31/2001 - 5/31/2003......................... 2,588,718
1,000,000 5.75%, 11/30/2002.................................... 999,370
-----------
Total U.S. Treasury Obligations
(cost $5,576,208)................................... 5,535,524
-----------
REPURCHASE AGREEMENT - 6.3%
3,514,000 Evergreen Joint Repurchase Agreement, 5.30%, dated
9/30/1999, due 10/1/1999 (cost $3,514,000
maturity value, $3,514,173) (a)..................... 3,514,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments - (cost $56,432,202)........ 99.8% 56,125,883
Other Assets and
Liabilities - net............................. 0.2 106,548
----- -----------
Net Assets .................................... 100.0% $56,232,431
===== ===========
</TABLE>
36
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Schedule of Investments(continued)
September 30, 1999
(a) The repurchase agreements are fully collateralized by U.S. government
and/or agency obligations based on market prices at September 30, 1999.
Note: The maturity date included in each security description is the stated ma-
turity date. The effective maturity of each security may be shorter due
to current and projected prepayment rates. Changes in interest rates may
accelerate or slow prepayment of mortgage obligations.
Summary of Abbreviations:
CMO Collateralized Mortgage Obligations
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
GNMA General National Mortgage Association
IO Interest Only
STRIPS Separate Trading of Registered Interest and Principal of Securities
See Combined Notes to Financial Statements.
37
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Automotive Equipment & Manufacturing - continued
$ 725,000 6.80%, 4/17/2001.................................... $ 731,046
235,000 Notes,
8.80%, 3/1/2021..................................... 269,156
9,000,000 Sr. Notes,
5.50%, 1/14/2002.................................... 8,789,202
------------
55,646,356
------------
Banks - 4.2%
610,000 Bank of New York, Inc.,
Notes (Subord.),
6.50%, 12/1/2003................................... 601,522
8,350,000 BankAmerica Corp.,
7.75%, 7/15/2002................................... 8,604,926
2,450,000 Firststar Bank (Milwaukee)
Natl., 6.25%, 12/1/2002............................ 2,427,499
Natl. City Corp.:
5,635,000 Debs. (Subord.),
6.875%, 5/15/2019................................... 5,140,489
900,000 Notes (Subord.),
7.20%, 5/15/2005.................................... 902,885
9,750,000 PNC Funding Corp.,
Notes (Subord.),
6.125%, 2/15/2009.................................. 8,905,396
340,000 SunTrust Banks, Inc.,
Notes (Subord.),
6.125%, 2/15/2004.................................. 330,684
675,000 Wachovia Corp.,
Notes (Subord.),
6.15%, 3/15/2009................................... 629,921
16,000,000 Washington Mutual Inc.,
7.50%, 8/15/2006................................... 16,079,536
------------
43,622,858
------------
Brokers - 0.6%
900,000 Bear Stearns Co., Inc.,
Sr. Notes,
6.25%, 7/15/2005................................... 857,688
895,000 Donaldson Lufkin & Jenrette Securities, Inc.,
6.50%, 6/1/2008.................................... 838,070
5,000,000 Morgan Stanley Group Inc.,
5.625%, 1/20/2004.................................. 4,775,915
------------
6,471,673
------------
Building, Construction & Furnishings - 2.2%
10,000,000 Caterpillar Fin. Svcs., Inc.,
6.50%, 2/1/2002.................................... 10,022,880
13,275,000 Masco Corp.,
7.75%, 8/1/2029.................................... 13,238,520
------------
23,261,400
------------
Chemical & Agricultural Products - 0.7%
6,700,000 Rohm & Haas Co.,
7.85%, 7/15/2029 (a)............................... 6,826,650
------------
Diversified Companies - 0.7%
7,000,000 Tyco Int'l. Group S.A.,
6.875%, 9/5/2002................................... 7,017,878
------------
ASSET-BACKED SECURITIES - 4.5%
CIT Receivables Owner Trust:
$ 135,150 Ser. 1995-B, Cl. A1,
6.50%, 4/15/2011................................... $ 135,671
334,245 Ser. 1996-A, Cl. A1,
5.40%, 12/15/2011.................................. 332,462
925,000 Contimortgage Home Equity
Loan Trust,
Ser. 1998-2, Cl. A4,
6.15%, 1/15/2014.................................. 912,989
10,175,000 Distribution Fin. Svcs.
Receivables Trust,
Ser. 1999, Cl. A3,
6.43%, 7/1/2011................................... 10,180,545
9,466,299 Federal Express Corp.,
Ser. 1998, Cl. A1,
6.72%, 1/15/2022.................................. 8,854,160
276,215 Fleetwood 94 Trust,
Ser. 1994, Cl. A,
4.70%, 7/15/2009.................................. 273,200
256,084 Fleetwood Credit Corp. Grantor Trust, Ser. 1996-A,
Cl. A,
6.75%, 10/17/2011................................. 256,880
891,481 Green Tree Receivables Equipment & Consumer Trust,
Ser. 1998-A, Cl. A1C,
6.18%, 6/15/2019.................................. 884,728
SLMA Student Loan Trust:
1,538,639 Ser. 1997-2, Cl. A1,
5.40%, 10/25/2005.................................. 1,533,400
1,331,577 Ser. 1997-3, Cl. 1FR,
5.46%, 4/25/2006................................... 1,326,057
22,826,903 Ser. 1998-1, Cl. A1,
5.50%, 1/25/2007................................... 22,779,994
------------
Total Asset-Backed Securities
(cost $47,652,897)................................ 47,470,086
------------
CORPORATE BONDS & NOTES - 34.0%
Aerospace & Defense - 1.6%
350,000 Boeing Co.,
Debs.,
6.625%, 2/15/2038................................. 308,748
Raytheon Co.:
12,500,000 5.70%, 11/1/2003................................... 11,953,625
4,425,000 7.20%, 8/15/2027................................... 4,112,064
------------
16,374,437
------------
Automotive Equipment & Manufacturing - 5.3%
425,000 Dana Corp.,
Notes,
7.00%, 3/15/2028.................................. 381,784
13,750,000 Delphi Automotive Sys. Corp., 6.125%, 5/1/2004..... 13,245,293
Ford Motor Co.:
10,255,000 5.80%, 1/12/2009................................... 9,331,947
15,130,000 6.375%, 2/1/2029................................... 13,051,713
335,000 Debs.,
8.90%, 1/15/2032................................... 386,390
GMAC:
10,365,000 MTN,
5.85%, 1/14/2009................................... 9,459,825
</TABLE>
38
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Finance & Insurance - 4.7%
$20,000,000 American General Fin. Corp., MTN,
6.67%, 6/28/2002................................... $ 20,026,700
Associates Corp. of North America:
700,000 Notes,
5.75%, 10/15/2003................................... 673,579
10,000,000 Sr. Note,
6.50%, 7/15/2002.................................... 9,988,670
800,000 Beneficial Corp.,
6.33%, 10/9/2001................................... 797,920
100,000 Commercial Credit Group, Inc.,
8.70%, 6/15/2009................................... 110,889
Household Fin. Corp.,
Notes:
10,500,000 6.50%, 11/15/2008................................... 9,896,092
5,200,000 7.20%, 7/15/2006.................................... 5,198,440
1,315,000 Int'l. Lease Fin. Corp., MTN,
6.42%, 9/11/2000................................... 1,318,931
915,000 Mellon Finl. Co.,
7.625%, 11/15/1999................................. 916,903
450,000 Norwest Fin., Inc. MTN,
6.05%, 11/19/1999.................................. 450,335
------------
49,378,459
------------
Food & Beverage Products - 0.9%
5,215,000 Coca-Cola Enterprises, Inc.,
Debs.,
6.75%, 1/15/2038................................... 4,610,686
4,600,000 Pepsi Bottling Group Inc.,
7.00%, 3/1/2029.................................... 4,250,726
790,000 Philip Morris Co., Inc.,
6.15%, 3/15/2000................................... 791,770
------------
9,653,182
------------
Metals & Mining - 0.1%
775,000 Aluminum Co. of America,
Bonds, Ser. B,
6.50%, 6/15/2018................................... 684,503
------------
Oil/Energy - 2.3%
7,000,000 Anadarko Petroleum Corp.,
Debs.,
7.20%, 3/15/2029................................... 6,457,388
800,000 Enron Corp.,
Sr. Notes,
7.375%, 5/15/2019.................................. 760,411
Phillips Petroleum Co.,
Debs.,
13,560,000 7.125%, 3/15/2028................................... 12,154,248
460,000 Sr. Notes,
7.00%, 3/30/2029.................................... 424,580
4,850,000 Williams Cos., Inc.,
7.625%, 7/15/2019.................................. 4,677,801
------------
24,474,428
------------
Paper & Packaging - 0.1%
1,000,000 Georgia Pacific Corp.,
8.125%, 6/15/2023.................................. 959,759
325,000 Int'l. Paper Co.,
Notes,
6.50%, 11/15/2007.................................. 313,031
------------
1,272,790
------------
CORPORATE BONDS - continued
Real Estate - 4.4%
$ 6,485,000 Avalon Properties, Inc.,
Notes,
6.625%, 1/15/2005................................. $ 6,218,317
425,000 BRE Properties, Inc.,
Notes,
7.125%, 2/15/2013................................. 384,118
3,470,000 Duke Reality L.P.,
Puttable Reset Securities,
7.05%, 3/1/2006................................... 3,342,557
10,000,000 EOP Operating L.P.,
Notes,
6.80%, 1/15/2009.................................. 9,261,600
ERP Operating L.P.:
Notes:
875,000 6.55%, 11/15/2001.................................. 867,007
20,450,000 6.63%, 4/13/2005................................... 19,250,342
450,000 Prologis Trust,
Notes,
7.00%, 10/1/2003.................................. 441,256
7,000,000 Spieker Properties L.P.,
7.25%, 5/1/2009................................... 6,650,812
------------
46,416,009
------------
Retailing & Wholesale - 1.4%
2,690,000 Dayton Hudson Corp.,
5.95%, 6/15/2000.................................. 2,693,107
May Dept. Stores Co.:
Debs.:
650,000 6.70%, 9/15/2028................................... 588,532
275,000 7.45%, 9/15/2011................................... 284,246
7,700,000 Safeway Inc.,
7.50%, 9/15/2009.................................. 7,713,229
Sears Roebuck Acceptance Corp.:
MTN:
1,500,000 5.63%, 2/7/2001.................................... 1,478,628
750,000 6.86%, 7/3/2001.................................... 750,104
750,000 6.99%, 9/30/2002................................... 748,097
------------
14,255,943
------------
Telecommunication Services & Equipment - 3.9%
1,100,000 Alltel Corp.,
Debs.,
6.50%, 11/1/2013.................................. 991,935
AT&T Corp.:
Notes:
615,000 6.00%, 3/15/2009................................... 572,426
16,540,000 6.50%, 3/15/2029................................... 14,639,554
5,445,000 Bellsouth Telecommunications, Inc.,
Debs.,
6.375%, 6/1/2028.................................. 4,783,596
600,000 Pacific Bell,
Notes,
6.625%, 11/1/2009................................. 585,037
82,000 Southwestern Bell Telephone Co., 6.625%,
7/15/2007......................................... 80,743
Sprint Capital Corp.,
Notes:
9,500,000 6.125%, 11/15/2008................................. 8,828,350
640,000 6.375%, 5/1/2009................................... 604,736
</TABLE>
39
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Telecommunication Services & Equipment -
continued
$10,000,000 Worldcom, Inc.,
6.25%, 8/15/2003........................ $ 9,830,290
--------------
40,916,667
--------------
Transportation - 0.6%
Burlington Northern Santa Fe Corp.:
615,000 Debs.,
6.70%, 8/1/2028.......................... 542,804
400,000 Notes,
6.75%, 3/15/2029......................... 355,020
5,000,000 Santa Fe Pacific Corp.,
8.625%, 11/1/2004....................... 5,342,460
420,000 United Parcel Service America, Inc.,
Debs.,
8.375%, 4/1/2030........................ 467,918
--------------
6,708,202
--------------
Utilities - 0.3%
1,000,000 Carolina Power & Light Co.,
1st Mtge Note,
6.75%, 10/1/2002........................ 1,000,941
2,160,000 U.S. West Capital Funding, Inc., 6.25%,
7/15/2005............................... 2,055,203
--------------
3,056,144
--------------
Total Corporate Bonds & Notes
(cost $360,481,656)..................... 356,037,579
--------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 10.4%
7,210,000 Citicorp Mtge. Sec., Inc.,
6.49%, 9/25/2014........................ 6,995,935
FHLMC PC Gtd.:
12,850,000 6.25%, 4/15/2012......................... 12,383,738
7,045,000 8.50%, 6/15/2007......................... 7,343,165
825,000 6.75%, 2/15/2007......................... 826,872
1,228,387 8.00%, 4/15/2022......................... 1,259,626
925,000 7.00%, 1/15/2008......................... 929,870
FHLMC:
17,725,000 6.00%, 3/15/2028......................... 16,143,310
14,140,000 6.25%, 1/15/2012......................... 13,637,818
14,575,000 6.279%, 6/15/2009........................ 13,829,416
11,025,000 6.50%, 10/15/2024........................ 10,684,272
FNMA:
15,892,600 6.00%, 12/25/2010 - 6/25/2020............ 15,306,381
7,000,000 6.50%, 2/25/2021......................... 6,927,305
FNMA REMIC Trust:
648,858 7.50%, 5/25/2021......................... 660,359
2,338,559 8.00%, 4/25/2007 - 7/25/2022............. 2,409,968
--------------
Total Collateralized Mortgage Obligations
(cost $109,377,406)..................... 109,338,035
--------------
MORTGAGE-BACKED SECURITIES - 34.8%
$ 5,469,969 Bear Stearns Commercial Mtge.
Sec., Inc.,
7.00%, 5/20/2030................................ $ 5,483,644
24,565,000 Chase Commercial Mtge.
Sec. Corp.,
6.56%, 5/18/2008................................ 23,968,439
12,750,000 GMAC Commercial Mtge.
Sec., Inc.,
6.175%, 5/15/2033............................... 11,880,259
960,000 GS Mtge. Secs. Corp.,
6.62%, 10/18/2030............................... 931,666
LB Commercial Conduit Mtge. Trust:
5,460,000 6.21%, 10/15/2008................................ 5,150,063
9,452,603 6.41%, 8/15/2007................................. 9,257,738
Morgan Stanley Capital I Inc.:
9,373,789 6.25%, 7/15/2007................................. 9,130,023
14,830,160 6.12%, 3/15/2031................................. 14,353,593
FHLMC
186,543 6.00%, 5/1/2011.................................. 180,646
6,420,000 6.00%, 7/15/2028................................. 5,912,435
714,705 7.00%, 6/1/2008.................................. 719,436
165,303 7.50%, 4/1/2023.................................. 166,892
28,492 7.671%, 12/1/2020................................ 28,770
FNMA
10,428,485 5.81%, 1/1/2009.................................. 9,665,954
65,495,580 6.00%, 7/1/2006 - 12/1/2099...................... 62,499,726
4,803,555 6.08%, 4/1/2005.................................. 4,668,438
5,207,027 6.153%, 12/1/2008................................ 4,930,346
4,088,651 6.318%, 4/1/2009................................. 3,903,814
26,720,139 6.50%, 7/1/2014 - 8/1/2014....................... 26,233,031
540,405 6.70%, 11/1/2007................................. 537,587
1,446,311 6.81%, 8/1/2004.................................. 1,448,210
611,281 7.00%, 7/1/2005.................................. 620,542
87,570 7.919%, 6/1/2019................................. 88,627
587,733 8.66%, 1/1/2005.................................. 629,244
GNMA
19,500,000 5.50%, 10/25/2029................................ 19,268,535
51,403,838 6.00%, 2/15/2014 - 7/15/2014..................... 49,416,051
13,667,450 6.50%, 11/15/2023 - 8/15/2027.................... 13,197,173
39,918,768 7.00%, 1/15/2029 - 8/15/2029..................... 39,220,988
41,046,997 7.50%, 9/15/2010 - 9/15/2029..................... 41,240,573
137,378 8.00%, 7/15/2016 - 6/15/2017..................... 142,451
501,946 8.85%, 5/15/2018 - 7/15/2018..................... 526,843
--------------
Total Mortgage-Backed Securities (cost
$365,896,941)................................... 365,401,737
--------------
</TABLE>
40
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
U.S. AGENCY OBLIGATIONS - 1.1%
$11,500,000 FHLB,
5.25%, 4/25/2002
(cost $11,312,146)............................... $ 11,264,009
--------------
U.S. TREASURY OBLIGATIONS - 7.0%
U.S. Treasury Bonds:
520,000 8.125%, 8/15/2021................................. 621,075
37,375,000 8.875%, 8/15/2017................................. 46,835,547
U.S. Treasury Notes:
9,041,030 3.375%, 1/15/2007................................. 8,637,014
16,457,000 7.00%, 7/15/2006.................................. 17,285,001
--------------
Total U.S. Treasury Obligations
(cost $73,858,120)............................... 73,378,637
--------------
YANKEE OBLIGATIONS - 0.2%
Government - 0.2%
2,015,000 Quebec Province, Canada,
5.75%, 2/15/2009
(cost $1,908,875)................................ 1,840,059
--------------
<CAPTION>
Shares Value
<C> <S> <C>
MUTUAL FUND SHARES - 2.4%
37,400 Blackrock 1999 Term Trust, Inc.................... 374,000
261,300 Blackrock 2001 Term Trust, Inc.................... 2,351,700
316,400 Blackrock North American Government, Inc.......... 3,183,775
147,700 Blackrock Strategic Term
Trust, Inc....................................... 1,310,837
43,100 Dreyfus Strategic Government
Income Fund...................................... 352,881
7,400 Excelsior Income Shares, Inc...................... 112,388
25,500 First Commonwealth Fund, Inc...................... 258,188
232,200 Hyperion 1999 Term Trust, Inc. ................... 1,654,425
MUTUAL FUND SHARES - continued
458,800 Hyperion 2002 Term Trust, Inc. .................. $ 3,756,425
50,700 Hyperion 2005 Investment
Grade Opportunities Trust....................... 408,769
304,300 Hyperion Total Return Fund, Inc. ................ 2,339,306
16,400 Income Opportunities Fund 1999................... 160,925
47,300 Kemper Intermediate
Government Trust................................ 298,581
96,300 Kleinwort Benson Australian
Income Fund, Inc................................ 607,894
593,700 MFS Government Markets
Income Trust.................................... 3,636,412
526,400 MFS Intermediate Income Trust.................... 3,322,900
27,000 Morgan Stanley Dean Witter Government Income
Trust........................................... 222,750
55,700 TCW/DW Term Trust 2000........................... 522,188
118,100 Templeton Global Income
Fund, Inc. ..................................... 782,412
--------------
Total Mutual Fund Shares
(cost $25,191,972).............................. 25,656,756
--------------
REPURCHASE AGREEMENT - 8.8%
$91,932,000 State Street Bank
Repurchase Agreement
5.22%, dated 9/30/1999,
due 10/1/1999 cost $91,932,000 maturity value
$91,945,830 (b)................................. 91,932,000
--------------
Total Investments -
(cost $1,087,612,013)................... 103.2% 1,082,318,898
Other Assets and Liabilities - net....... (3.2) (33,794,269)
----- --------------
Net Assets............................... 100.0% $1,048,524,629
===== ==============
</TABLE>
(a) Securities that may be resold to "qualified institutional buyers" un-
der Rule 144A or securities offered pursuant to Section 4(2) of the
Securities Act of 1933, as amended. These securities have been deter-
mined to be liquid under guidelines established by the Board of
Trustees.
(b) Repurchase agreement is collateralized by the following:
$21,866,000 FFCB, 9/10/2001; value including accrued interest -
$22,307,245
$35,000,000 FNMA, 12/10/2002; value including accrued interest -
$35,717,672
$35,000,000 FHLMC, 11/16/2000; value including accrued interest -
$35,708,575
Summary of Abbreviations:
CMO Collateralized Mortgage Obligation
FFCB Federal Farm Credit Bank
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
GNMA General National Mortgage Association
MTN Medium Term Note
REMIC Real Estate Mortgaged Investment Conduit
SLMA Student Loan Marketing Association
See Combined Notes to Financial Statements.
41
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - 10.2%
$ 2,000,000 American Airlines Pass Through Trust, Ser. 1999-1
Cl. C, 7.155%, 10/15/2004........................ $ 2,000,000
Amresco Residential Securities Mtge. Loan Trust:
1,905,684 Ser. 1998-2, Cl. A1,
6.50%, 12/25/2015................................. 1,900,892
8,000,000 Ser. 1998-2, Cl. A2, 6.245%, 4/25/2022............ 7,970,680
3,895,197 Carco Auto Loan Master Trust, Ser. 1997-1, Cl. A,
6.689%, 8/15/2004................................ 3,898,294
Case Equipment Receivable Trust:
1,857,000 Ser. 1997-B, Cl. A4, 6.41%, 9/15/2004............. 1,859,275
200,000 Ser. 1998-A, Cl. A4, 5.86%, 2/15/2005............. 198,577
Contimortgage Home Equity Loan Trust:
4,705,658 Ser. 1996-1, Cl. A5, 6.15%, 3/15/2011............. 4,697,682
3,185,000 Ser. 1997-2, Cl. A9, 7.09%, 4/15/2028............. 3,175,493
827,489 Ser. 1997-4, Cl. A3, 6.26%, 7/15/2012............. 826,757
5,000,000 Distribution Fin. Svcs. Receivables Trust, Ser.
1999-3, Cl. A4, 6.65%, 11/3/2015.................. 5,010,375
5,495,999 Empire Funding Home Loan Owner Trust, Ser. 1998-1,
Cl. A4, 6.64%, 12/25/2012......................... 5,373,576
104,998 EQCC Home Equity Loan Trust,
Ser. 1996-1, Cl. A2,
5.82%, 9/15/2009.................................. 105,047
First Plus Home Loan Trust:
559,729 Ser. 1997-2, Cl. A5, 6.82%, 4/10/2023............. 560,006
2,455,000 Ser. 1997-3, Cl. A5, 6.86%, 10/10/2013............ 2,465,520
622,600 Heller Equipment Asset Receivables Trust, Ser.
1997-1, Cl. A2,
6.39%, 5/25/2005................................. 623,468
598,927 IMC Home Equity Loan Trust,
Ser. 1997-2, Cl. A3,
6.94%, 11/20/2011................................ 599,702
2,329,038 Life Finl. Home Loan Owner Trust,
Ser. 1997-3, Cl. A2,
6.79%, 10/25/2011................................ 2,319,174
1,700,000 Metlife Capital Equipment Loan Trust, Ser. 1997-A,
Cl. A, 6.85%, 5/20/2008.......................... 1,706,502
270,591 Olympic Automobile Receivables Trust, Ser. 1995-D,
Cl. B, 6.10%, 4/15/2002.......................... 270,861
2,366,667 Sears Credit Account Master Trust,
Ser. 1995-3, Cl. A,
7.00%, 10/15/2004................................ 2,386,322
2,500,000 Southern Pacific Secd. Assets Corp., Ser. 1998-1,
Cl. A6, 7.08%, 3/25/2028......................... 2,464,362
631,774 The Money Store Home Equity Trust, Ser. 1992-B,
Cl. A, 6.90%, 7/15/2007.......................... 630,716
ASSET-BACKED SECURITIES - continued
$ 451,491 Union Acceptance Corp.,
Ser. 1996-A, Cl. A,
5.40%, 4/7/2003.................................. $ 449,755
WFS Finl. Owner Trust:
5,000,000 Ser. 1997-D, Cl. A4, 6.25%, 3/20/2003............. 5,004,625
3,200,000 Ser. 1998-A, Cl. A4, 5.95%, 2/20/2003............. 3,179,600
1,599,090 Xerox Rental Equipment Trust
Ser. 1996-A,
6.20%, 12/26/2005 (a)............................. 1,596,092
-------------
Total Asset-Backed Securities
(cost $61,563,823)............................... 61,273,353
-------------
CORPORATE BONDS & NOTES - 25.5%
Automotive Equipment & Manufacturing - 1.4%
3,567,000 GMAC, Sr. Notes,
5.875%, 1/22/2003................................ 3,470,552
5,000,000 Johnson Controls, Inc., Sr. Notes, 6.30%,
2/1/2008......................................... 4,716,320
-------------
8,186,872
-------------
Banks - 4.4%
85,000 Banc One Corp., Sr. Notes (Subord.), 7.60%,
5/1/2007......................................... 86,623
BB & T Corp., Sr. Notes (Subord.):
6,850,000 6.375%, 6/30/2005................................. 6,477,387
1,000,000 7.05%, 5/23/2003.................................. 1,010,434
5,000,000 Citigroup, Inc., Sr. Notes, 6.125%, 6/15/2000..... 5,001,220
3,000,000 First Chicago Corp., MTN, Sr. Notes (Subord.),
9.20%, 12/17/2001................................ 3,168,432
2,120,000 NationsBank Corp., Sr. Notes, 5.75%, 3/15/2001.... 2,101,613
1,020,000 NCNB Corp., Sr. Notes (Subord.), 9.125%,
10/15/2001....................................... 1,068,806
1,970,000 Security Pacific Corp., Sr. Notes (Subord.),
11.50%, 11/15/2000............................... 2,072,375
899,000 Societe Generale (New York), Sr. Notes (Subord.),
7.40%, 6/1/2006.................................. 889,194
5,000,000 Swiss Bank Corp. (New York), Sr. Notes (Subord.),
6.75%, 7/15/2005................................. 4,877,505
-------------
26,753,589
-------------
Brokers - 3.7%
1,545,000 Bear Stearns Co., Sr. Notes, 6.65%, 12/1/2004..... 1,510,873
Lehman Brothers Holdings, Inc., Sr. Notes
(Subord.):
3,500,000 6.84%, 10/7/1999.................................. 3,500,220
2,640,000 7.25%, 4/15/2003.................................. 2,649,998
Sr. Notes:
5,000,000 6.625%, 11/15/2000................................ 5,008,495
75,000 6.71%, 10/12/1999................................. 75,015
2,350,000 Merrill Lynch & Co., Inc., 6.00%, 2/12/2003....... 2,299,414
3,210,000 Morgan Stanley Dean Witter, Sr. Notes,
5.89%, 3/20/2000................................. 3,213,293
</TABLE>
42
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Brokers - continued
$ 1,665,000 Paine Webber Group, Inc., Sr. Notes, 6.50%,
11/1/2005........................................ $ 1,587,909
2,405,000 Salomon Smith Barney, Inc.,
Sr. Notes,
6.25%, 1/15/2005................................. 2,323,725
-------------
22,168,942
-------------
Building, Construction & Furnishings - 0.8%
5,000,000 Case Corp., Ser. B,
6.25%, 12/1/2003................................. 4,869,840
-------------
Building Products - 0.2%
1,545,000 CSR America, Inc., Sr. Notes, 6.875%, 7/21/2005... 1,499,135
-------------
Cable/Other Video Distribution - 0.2%
1,288,000 Tele-Communications, Inc., Sr. Notes, 7.25%,
8/1/2005......................................... 1,309,081
-------------
Finance & Insurance - 7.4%
7,000,000 Associated P&C Holdings, Inc.
Sr. Notes,
6.75%, 7/15/2003 (a)............................. 6,781,572
Associates Corp. of North America, Sr. Notes:
5,000,000 6.00%, 6/15/2000.................................. 5,000,265
1,890,000 6.75%, 7/15/2001.................................. 1,902,122
3,720,000 CIT Group Holdings, Inc., Sr. Notes, 6.375%,
8/1/2002......................................... 3,684,969
2,000,000 Commercial Credit Co., Sr. Notes, 6.75%,
5/15/2000........................................ 2,014,582
8,750,000 First Security Corp., MTN, 6.08%, 2/9/2001........ 8,695,873
2,250,000 Horace Mann Educators Corp.,
Sr. Notes,
6.625%, 1/15/2006................................ 2,138,834
3,620,000 Household Fin. Corp., MTN,
Sr. Notes,
6.00%, 5/8/2000.................................. 3,620,228
1,695,000 Loews Corp., Sr. Notes, 6.75%, 12/15/2006......... 1,639,609
5,000,000 Metropolitan Life Insurance Co.
Sr. Notes,
7.00%, 11/1/2005 (a)............................. 4,932,355
3,000,000 SFFED Corp. Sr. Debs., 11.20%, 9/1/2004 (a)....... 3,389,649
1,000,000 U.S. Life Corp., Sr. Notes, 6.375%, 6/15/2000..... 1,004,112
-------------
44,804,170
-------------
Food & Beverage Products - 0.5%
1,800,000 Nabisco, Inc., Sr. Notes, 6.00%, 2/15/2001........ 1,783,023
1,355,000 Philip Morris Co., Inc., 6.15%, 3/15/2000......... 1,358,035
-------------
3,141,058
-------------
Healthcare Products & Services - 1.2%
7,175,000 Columbia/HCA Healthcare
Corp., MTN,
6.875%, 7/15/2001................................ 6,994,915
-------------
CORPORATE BONDS - continued
Industrial Specialty Products & Services - 0.2%
$ 1,000,000 Harcourt General, Inc., Sr. Notes,
8.25%, 6/1/2002.................................. $ 1,017,017
-------------
Oil/Energy - 0.3%
1,600,000 Duke Capital Corp., Sr. Notes, Ser. A, 6.25%,
7/15/2005........................................ 1,528,162
-------------
Printing, Publishing, Broadcasting &
Entertainment - 0.3%
1,690,000 Time Warner, Inc., Sr. Notes, 8.11%, 8/15/2006.... 1,753,939
-------------
Real Estate - 0.2%
1,250,000 EOP Operating L.P., Sr. Notes, 6.376%, 2/15/2002.. 1,231,456
-------------
Retailing & Wholesale - 0.3%
1,585,000 Gap, Inc., Sr. Notes,
6.90%, 9/15/2007................................. 1,577,433
-------------
Telecommunication Services & Equipment - 0.3%
2,000,000 MCI Worldcom, Inc., Sr. Notes, 6.125%, 8/15/2001.. 1,987,198
-------------
Transportation - 2.3%
2,872,346 Continental Airlines, Inc., Ser. 971B, 7.461%,
4/1/2013......................................... 2,830,683
4,900,093 U.S. Airways,
7.35%, 1/30/2018................................. 4,691,912
6,000,000 Union Pacific Corp., 9.625%, 12/15/2002........... 6,471,384
-------------
13,993,979
-------------
Utilities - 1.8%
423,000 Cmnwlth. Edison Co., MTN, 9.05%, 10/15/1999....... 423,336
5,000,000 LG & E Capital Corp., 5.75%, 11/1/2001 (a)........ 4,885,075
2,000,000 Natl. Rural Utilities Cooperative Fin., 6.75%,
9/1/2001......................................... 2,010,878
3,675,000 PG & E Gas Transmission Northwest, Sr. Note,
7.10%, 6/1/2005.................................. 3,706,278
-------------
11,025,567
-------------
Total Corporate Bonds & Notes
(cost $155,844,105).............................. 153,842,353
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 16.2%
3,250,000 Blackrock Capital Fin. LP, Ser. 1997, Cl. C1,
7.15%, 10/25/2026 (a)............................ 3,215,550
3,000,000 Continental Airlines, Inc., Ser. 1999-2, Cl. C2,
7.434%, 9/15/2004................................ 2,974,425
CS First Boston Mtge. Securities Corp.:
5,000,000 Ser. 1998-C1, Cl. A1B, 6.48%, 5/17/2008........... 4,773,325
15,000,000 Ser. 1998-Fl2A, Cl. D, 6.78%, 10/15/2001.......... 14,772,000
</TABLE>
43
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS - continued
$ 176,259 CWMBS, Inc., Ser. 1997-A1, Cl. A1, 7.00%,
3/25/2027........................................ $ 176,392
3,486,357 Deutsche Mtge. & Asset Receivables Corp., Ser.
1998-1, Cl. A1, 6.22%, 9/15/2007................. 3,370,766
DLJ Commercial Mtge. Corp.:
6,700,000 Ser. 1998, Cl. B1, 6.255%, 12/8/2000 (a).......... 6,679,197
3,350,000 Ser. 1998, Cl. B2, 6.575%, 12/8/2000.............. 3,343,350
FHLMC
1,675,000 Ser. 1519, Cl. F,
6.75%, 3/15/2007.................................. 1,684,556
1,788,503 Ser. B-02, Cl. 1,
5.75%, 10/15/2016................................. 1,785,560
FHLMC PC Gtd.:
3,018,752 Ser. 12, Cl. A,
9.25%, 11/15/2019................................. 3,149,720
153,285 Ser. 1608, Cl. FN,
6.14%, 11/15/2023................................. 153,497
626,873 Ser. 1935, Cl. FL,
6.14%, 2/15/2027.................................. 635,868
5,750,000 FNMA, Ser. 1998-W8, Cl. A4,
6.02%, 9/25/2028................................. 5,567,466
2,658,166 Iroquois Trust, Ser. 1997-3, Cl. A, 6.68%,
11/10/2003 (a)................................... 2,659,242
3,000,000 Nationslink Funding Corp.,
Ser. 1998-1, Cl. D,
6.803%, 1/20/2008................................ 2,790,000
Potomac Gtd. Fin. Corp.:
2,400,421 Ser. 1, Cl. A, 6.887%, 12/21/2026 (a)............. 2,370,140
2,000,000 Ser. 1, Cl. B, 7.00%, 12/21/2026 (a).............. 1,979,830
3,503,925 Prudential Home Mtge. Securities, Ser. 1993-39,
Cl. A8, 6.50%, 10/25/2008........................ 3,478,259
Prudential Securities Secd. Fin. Corp.:
2,601,219 Ser. 1994-4, Cl. A1,
8.12%, 2/15/2025.................................. 2,648,418
3,912,685 Ser. 1998-C1, Cl. 1A1,
6.105%, 11/15/2002................................ 3,886,724
2,384,689 RMF Commercial Mtge. Pass-Through Certificates,
Ser. 1997-1, Cl. A1,
6.38%, 1/15/2019 (a)............................. 2,372,348
1,002,392 Saxon Mtge. Securities Corp.,
Ser. 1993-8A, Cl. 1A2, 7.375%, 9/25/2023......... 1,005,304
Structured Asset Securities Corp.:
7,000,000 Ser. 1996-CFL, Cl. C, 6.525%, 2/25/2028........... 6,983,025
3,319,494 Ser. 1997-C1, Cl. A,
6.28%, 8/25/2000.................................. 3,321,768
11,974,593 Ser. 1998-C2, Cl. E,
5.98%, 2/25/2001 (a).............................. 11,816,708
-------------
Total Collateralized Mortgage Obligations
(cost $98,277,370)............................... 97,593,438
-------------
MORTGAGE-BACKED SECURITIES - 13.1%
FHLMC
$ 232,545 6.00%, 12/1/2000.................................. $ 231,897
976,869 6.50%, 7/1/2004................................... 970,920
155,026 7.00%, 1/1/2000................................... 155,487
109,428 8.00%, 2/1/2000 - 4/1/2000........................ 111,582
FNMA
73,806 5.75%, 6/1/2017................................... 72,633
8,105,350 5.886%, 2/1/2031.................................. 7,929,626
2,933,269 6.00%, 11/1/2008.................................. 2,874,017
15,000,000 6.50%, 12/1/2099.................................. 14,718,750
24,000,000 7.00%, 12/1/2099.................................. 23,778,720
4,268,755 11.00%, 2/15/2025................................. 4,778,107
GNMA
10,000,000 7.50%, 12/15/2099................................. 10,031,200
5,856,444 8.05%, 6/15/2019 - 10/15/2020..................... 6,053,108
5,651,705 8.30%, 9/15/2019 - 1/15/2021...................... 5,854,876
1,199,855 9.20%, 4/15/2018 - 9/15/2018...................... 1,283,917
-------------
Total Mortgage-Backed Securities
(cost $79,208,670)............................... 78,844,840
-------------
U.S. TREASURY NOTES - 24.3%
15,000,000 5.625%, 5/15/2008+................................ 14,568,750
10,160,000 5.75%, 4/30/2003+................................. 10,147,300
37,470,000 6.125%, 8/15/2007+................................ 37,528,566
21,500,000 6.50%, 10/15/2006+................................ 21,983,750
29,500,000 6.625%, 5/15/2007+................................ 30,440,312
12,220,000 7.00%, 7/15/2006+................................. 12,834,825
17,695,000 7.875%, 11/15/2004+............................... 19,182,495
-------------
Total U. S. Treasury Notes (cost $147,688,581).... 146,685,998
-------------
U.S. AGENCY OBLIGATIONS - 9.9%
FHLB - 6.8%
2,000,000 5.45%, 10/19/2005................................. 1,895,934
3,050,930 5.467%, 2/19/2004................................. 2,990,826
5,000,000 5.72%, 8/25/2003.................................. 4,892,815
3,720,000 5.89%, 6/30/2008.................................. 3,530,712
5,000,000 5.905%, 3/27/2008................................. 4,759,330
778,953 6.043%, 4/28/2003................................. 780,900
5,000,000 6.07%, 8/28/2008.................................. 4,720,155
1,810,000 6.10%, 10/12/2000................................. 1,810,005
1,306,785 6.23%, 5/18/2005.................................. 1,311,751
4,000,000 6.54%, 12/12/2007................................. 3,887,084
10,000,000 7.70%, 9/20/2004.................................. 10,560,190
-------------
41,139,702
-------------
</TABLE>
44
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
U.S. AGENCY OBLIGATIONS - continued
FHLMC - 0.7%
$ 2,250,000 6.51%, 1/8/2007................................... $ 2,242,445
1,825,000 6.97%, 6/16/2005.................................. 1,814,785
-------------
4,057,230
-------------
FNMA - 2.4%
6,441,000 5.125%, 2/13/2004................................. 6,134,602
4,000,000 5.52%, 4/17/2002.................................. 3,929,036
4,495,000 6.95%, 11/13/2006................................. 4,462,267
-------------
14,525,905
-------------
Total U.S. Agency Obligations
(cost $61,405,368)............................... 59,722,837
-------------
YANKEE OBLIGATIONS - 4.9%
Banks - 4.2%
Korea Dev. Bank:
5,000,000 7.25%, 5/15/2006.................................. 4,712,145
5,000,000 7.375%, 9/17/2004................................. 4,872,000
14,865,000 Natl. Bank of Canada, Sr. Notes (Subord.), Ser. B,
8.125%, 8/15/2004................................ 15,589,520
-------------
25,173,665
-------------
Finance & Insurance - 0.2%
1,500,000 FBG Fin. Ltd., Sr. Notes,
6.75%, 11/15/2005 (a)............................ 1,457,550
-------------
Oil/Energy - 0.3%
1,625,000 Amoco Argentina Oil Co., MTN, 6.75%, 2/1/2007..... 1,621,736
-------------
Utilities - 0.2%
1,000,000 Hydro Quebec, MTN, 7.52%, 7/17/2003............... 1,027,302
-------------
Total Yankee Obligations (cost $29,627,201)....... 29,280,253
-------------
MUNICIPALS - 0.5%
3,000,000 Virginia Electric & Power Co., MTN, 6.30%,
6/21/2001........................................ 2,994,225
-------------
Total Municipals
(cost $3,000,000)................................ 2,994,225
-------------
COMMERCIAL PAPER - 25.2%
Aerospace & Defense - 4.2%
$25,000,000 TRW, Inc.,
5.54%, 10/29/1999*............................... $ 24,892,278
-------------
Banks - 0.4%
2,572,000 Natl. Cooperative Bank,
5.60%, 10/29/1999*............................... 2,560,798
-------------
Building, Construction & Furnishings - 4.1%
25,000,000 Conseco, Inc.,
5.60%, 10/29/1999*............................... 24,891,111
-------------
Chemical & Agricultural Products - 4.2%
25,000,000 Air Products & Chemicals, Inc.,
5.55%, 10/29/1999*............................... 24,892,083
-------------
Paper & Packaging - 4.1%
25,000,000 Georgia Pacific Corp., 5.60%, 10/29/1999*......... 24,891,111
-------------
Retailing & Wholesale - 4.1%
25,000,000 J.C. Penney Funding Corp., 5.60%, 10/29/1999*..... 24,891,111
-------------
Telecommunication Services & Equipment - 4.1%
25,000,000 AT&T Capital Corp., 5.75%, 10/29/1999*............ 24,888,194
-------------
Total Commercial Paper (cost $151,906,686)........ 151,906,686
-------------
REPURCHASE AGREEMENT - 3.1%
18,750,303 Societe Generale Repurchase Agreement 5.30%, dated
9/30/1999, due 10/1/1999 cost $18,750,303
maturity value $18,753,063 (b)................... 18,750,303
-------------
Total Investments -
(cost $807,272,107) ...................... 132.9% 800,894,286
Other Assets and Liabilities - net......... (32.9) (198,376,844)
----- -------------
Net Assets................................. 100.0% $ 602,517,442
===== =============
</TABLE>
(a) Securities that may be resold to "qualified institutional buyers" un-
der Rule 144A or securities offered pursuant to Section 4(2) of the
Securities Act of 1933, as amended. These securities have been deter-
mined to be liquid under guidelines established by the Board of
Trustees.
(b) Repurchase agreement is collateralized by $100,000 U.S. Treasury
Note, 6.25%, due 02/15/2008 with a value including accrued inter-
est, - $99,833 and $19,031,000 U.S. Treasury STRIPS, 3.625%, due
01/15/2008 with a value, including accrued interest, - $18,710,271.
+ A portion of these securities are on loan (see note 7).
* Represents collateral received for securities on loan.
Summary of Abbreviations:
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
GNMA General National Mortgage Association
MTN Medium Term Note
STRIPS Separate Trading of Registered Interest and Principal of Securi-
ties
See Combined Notes to Financial Statements.
45
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments
September 30, 1999
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 0.2%
Finance & Insurance - 0.2%
4,000 First Republic Preferred Capital Corp., Preferred,
Ser. A
(cost $4,000,000) (a)............................. $ 4,000,000
------------
ASSET-BACKED SECURITIES - 5.2%
$ 7,325,000 BankBoston Receivable
Asset-Backed Trust,
Ser. 1997-1, Cl. A8,
6.54%, 5/15/2009.................................. 7,324,231
3,542,081 Carco Auto Loan Master Trust,
Ser. 1997-1, Cl. A,
6.689%, 8/15/2004................................. 3,544,897
7,575,000 Case Equipment Receivable Trust, Ser. 1997-B, Cl.
A4,
6.41%, 9/15/2004.................................. 7,584,279
2,980,000 Contimortgage Home Equity Loan Trust,
Ser. 1997-2,Cl. A9,
7.09%, 4/15/2028.................................. 2,971,105
1,412,945 Continental Airlines, Inc.,
Ser. 1997-CI,
7.42%, 4/1/2007................................... 1,407,286
1,078,953 Corestates Home Equity Trust,
Ser. 1993-2, Cl. A,
5.10%, 3/15/2009.................................. 1,073,046
4,996,363 Empire Funding Home Loan Owner Trust,
Ser. 1998-1, Cl. A4,
6.64%, 12/25/2012................................. 4,885,069
40,625 FA Title I American Savings & Loan, 9.50%, 5/2/2002
(d)............................................... 40,625
1,865,763 First Plus Home Loan Trust,
Ser. 1997-2, Cl. A5,
6.82%, 4/10/2023.................................. 1,866,687
243,617 Harley-Davidson Eaglemark Motorcycle Trust,
Ser. 1997-3, Cl. A1,
5.98%, 12/15/2001................................. 243,221
2,058,377 Harley-Davidson Eaglemark Ownership Trust,
Ser. 1996-3, Cl. A2,
6.35%, 10/15/2002................................. 2,060,146
2,807,847 Heller Equipment Asset
Receivables Trust,
Ser. 1997-1, Cl. A2,
6.39%, 5/25/2005.................................. 2,811,764
10,000,000 Jet Equipment Trust,
Ser. A10,
9.41%, 6/15/2010.................................. 10,957,260
MBNA Master Credit Card Trust:
6,300,000 5.33%, 2/15/2006................................... 6,293,732
6,155,000 5.29%, 2/15/2005................................... 6,144,444
5,000,000 Paine Webber Mtge. Acceptance Corp.,
Ser. 1996-M1, Cl. E,
7.655%, 1/2/2012.................................. 4,917,187
Potomac Gtd. Fin. Corp.:
16,322,861 6.89%, 12/21/2026.................................. 16,116,948
5,250,000 7.22%, 12/21/2026.................................. 5,110,744
ASSET-BACKED SECURITIES - continued
$ 104,969 Sears Mtge. Securities Corp.,
Ser. 1998, Cl. PA 19,
10.36%, 7/25/2018 (d).............................. $ 104,969
2,862,898 Southwest Airlines Co.,
Ser. 1996-A Cl. A1,
7.67%, 1/2/2014.................................... 2,924,694
5,000,000 US Airways Pass Through Trust,
Ser. 1999-1, Cl. A,
8.36%, 7/20/2020................................... 4,968,675
832,202 Xerox Rental Equipment Trust,
Ser. 1996-A,
6.20%, 12/25/2005.................................. 830,641
------------
Total Asset-Backed Securities
(cost $94,015,813)................................. 94,181,650
------------
CORPORATE BONDS & NOTES - 32.7%
Aerospace & Defense - 0.9%
6,000,000 Raytheon Co., Deb.,
6.00%, 12/15/2010.................................. 5,382,306
10,480,000 United Technologies Corp.,
Notes,
7.00%, 9/15/2006................................... 10,510,182
------------
15,892,488
------------
Banks - 4.1%
5,000,000 Banq Paribas, New York,
Notes (Subord.),
6.95%, 7/22/2013................................... 4,614,960
7,500,000 Comerica, Inc.,
Notes (Subord.),
7.125%, 12/1/2013.................................. 7,366,942
6,200,000 Fleet Finl. Group Inc.,
Notes,
6.375%, 5/15/2008.................................. 5,827,988
8,540,000 Fleet Finl. Group Inc.,
Deb. (Subord.),
6.875%, 1/15/2028.................................. 7,595,553
1,150,000 FNBC Inc.,
Pass-Thru Certificates,
Ser. 1993-A,
8.08%, 1/5/2018.................................... 1,195,701
4,000,000 HUBCO Capital Trust II,
Ser. B,
7.65%, 6/15/2028................................... 3,674,320
59,000 Irving Bank Corp.,
Deb.,
8.50%, 6/1/2002.................................... 59,076
7,925,000 KeyCorp,
Notes (Subord.),
7.50%, 6/15/2006................................... 7,980,713
7,000,000 Mellon Capital I,
Ser. A,
7.72%, 12/1/2026................................... 6,597,752
10,000,000 NationsBank Corp.,
Sr. Notes,
5.75%, 3/15/2001................................... 9,913,270
5,000,000 NCNB TX Natl. Bank of Dallas,
9.50%, 6/1/2004.................................... 5,541,135
11,000,000 PNC Inc., Institutional Capital
Trust B,
Spl. Purpose,
8.315%, 5/15/2027 (a).............................. 10,723,691
</TABLE>
46
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Banks - continued
$ 3,000,000 SFFED Corp.,
Sr. Deb.,
11.20%, 9/1/2004 (a)............................... $ 3,389,649
------------
74,480,750
------------
Brokers - 2.5%
6,315,000 Donaldson Lufkin & Jenrette Securities, Inc.,
6.50%, 6/1/2008.................................... 5,913,309
Lehman Brothers Holdings Inc.:
5,000,000 6.00%, 2/26/2001.................................... 4,959,415
12,000,000 7.50%, 9/1/2006..................................... 11,949,492
4,600,000 Merrill Lynch & Co., Inc.,
8.40%, 11/1/2019................................... 4,874,372
12,250,000 Morgan Stanley Dean Witter,
5.25%, 2/8/2001.................................... 12,096,630
5,000,000 Paine Webber Group Inc.,
Sr. Notes,
6.50%, 11/1/2005................................... 4,768,495
3,558 Salomon Brothers Mtge. Securities
IV, Inc.,
10.25%, 4/1/2016 (d)............................... 3,558
------------
44,565,271
------------
Building, Construction & Furnishings - 1.1%
10,000,000 Masco Corp.,
Sr. Notes,
7.75%, 8/1/2029.................................... 9,972,520
10,000,000 Owens-Corning Inc.,
Notes,
7.50%, 5/1/2005.................................... 9,764,430
------------
19,736,950
------------
Building Products - 0.3%
5,000,000 Cemex S.A.
Notes,
9.625%, 10/1/2009.................................. 4,964,100
------------
Cable/Other Video
Distribution - 0.4%
6,910,000 Comcast Cable Communications I,
Sr. Notes,
6.20%, 11/15/2008.................................. 6,345,453
------------
Chemical & Agricultural
Products - 0.5%
4,000,000 Freeport McMoran Resource Partners,
Sr. Notes,
7.00%, 2/15/2008................................... 3,775,188
5,000,000 Millenium America Inc.,
Sr. Notes,
7.00%, 11/15/2006.................................. 4,596,090
------------
8,371,278
------------
Commercial Services - 0.3%
5,000,000 Federal Express Corp.,
9.65%, 6/15/2012................................... 5,873,370
------------
CORPORATE BONDS - continued
Communication Systems & Services - 0.5%
$10,000,000 Metromedia Fiber Network, Inc.,
Sr. Notes,
10.00%, 11/15/2008................................. $ 9,700,000
------------
Consumer Products &
Services - 0.5%
8,750,000 Procter & Gamble Co.,
Notes,
6.875%, 9/15/2009.................................. 8,786,383
------------
Electrical Equipment &
Services - 0.6%
7,000,000 Central VT Pub. Svcs. Corp.,
8.125%, 8/1/2004................................... 6,910,638
5,000,000 Texas Instruments, Inc.,
Notes,
6.125%, 2/1/2006................................... 4,704,965
------------
11,615,603
------------
Finance & Insurance - 5.0%
8,365,000 Associates Corp. of North America,
Sr. Notes,
5.80%, 4/20/2004................................... 8,042,939
5,000,000 Capital One Finl. Corp.,
Sr. Notes,
7.25%, 5/1/2006.................................... 4,778,655
10,000,000 Citigroup Capital II,
7.75%, 12/1/2036................................... 9,475,050
3,000,000 ERP Operating L.P.,
6.63%, 4/13/2015................................... 2,824,011
Ford Motor Credit Co.:
5,000,000 6.70%, 7/16/2004.................................... 4,973,775
3,500,000 8.00%, 6/15/2002.................................... 3,625,828
10,000,000 Heller Finl. Inc.,
Notes,
6.00%, 3/19/2004................................... 9,591,420
20,000,000 Household Fin. Corp.,
Notes,
7.20%, 7/15/2006................................... 19,994,000
10,000,000 Loews Corp.,
Sr. Notes,
7.00%, 10/15/2023.................................. 8,735,840
6,100,000 Macsaver Finl. Svcs. Inc.,
Deb.,
7.60%, 8/1/2007.................................... 4,178,500
6,265,000 Mellon Capital II,
Ser. B,
7.995%, 1/15/2027.................................. 6,057,259
8,097,438 Topaz Ltd.,
Ser. 1997-1,
6.92%, 3/10/2007 (a)............................... 8,126,184
750,000 Wesco Finl. Corp.,
Notes,
8.875%, 11/1/1999.................................. 751,825
------------
91,155,286
------------
</TABLE>
47
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Food & Beverage Products - 0.8%
$ 7,000,000 Coca Cola Enterprises, Inc.,
Notes,
7.875%, 2/1/2002.................................. $ 7,226,751
6,805,000 Philip Morris Co., Inc.,
(Eff. Yield 6.15%),
0.00%, 3/15/2000 (c).............................. 6,820,243
------------
14,046,994
------------
Forest Products - 0.3%
5,391,000 Weyerhaeuser Co.,
6.95%, 8/1/2017................................... 5,093,681
------------
Gaming - 0.2%
4,000,000 Circus Circus Enterprises Inc., 7.625%, 7/15/2013.. 3,390,000
------------
Machinery - Diversified - 1.0%
12,165,000 Caterpillar Inc.,
Sr. Deb.,
7.25%, 9/15/2009.................................. 12,234,024
5,000,000 Deere & Co.,
8.95%, 6/15/2019.................................. 5,744,435
------------
17,978,459
------------
Oil/Energy - 2.3%
6,500,000 Atlantic Richfield Co.,
Deb.,
9.00%, 4/1/2021................................... 7,610,395
15,000,000 Occidental Petroleum Corp.,
Sr. Notes,
8.45%, 2/15/2029.................................. 15,731,235
2,500,000 Suburban Propane Partners, L.P.,
Sr. Notes,
7.54%, 6/30/2011.................................. 2,580,250
10,000,000 Texaco Capital, Inc.,
Notes,
5.50%, 1/15/2009.................................. 9,018,050
6,000,000 Transocean Offshore Inc.,
Notes,
7.45%, 4/15/2027.................................. 6,026,118
------------
40,966,048
------------
Paper & Packaging - 1.2%
10,000,000 Fort James Corp.,
Sr. Notes,
6.625%, 9/15/2004................................. 9,863,180
5,000,000 Georgia Pacific Corp.,
Deb.,
7.70%, 6/15/2015.................................. 4,934,665
8,000,000 Westvaco Corp.,
7.75%, 2/15/2023.................................. 7,963,488
------------
22,761,333
------------
Printing, Publishing, Broadcasting &
Entertainment - 1.0%
1,132,000 Belo (A.H.) Corp.,
Sr. Notes,
6.875%, 6/1/2002.................................. 1,123,455
Time Warner, Inc.:
4,000,000 6.88%, 6/15/2018................................... 3,694,480
CORPORATE BONDS - continued
Printing, Publishing, Broadcasting &
Entertainment - continued
$ 8,355,000 8.11%, 8/15/2006................................... $ 8,671,103
5,000,000 8.18%, 8/15/2007................................... 5,249,355
------------
18,738,393
------------
Retailing & Wholesale - 1.6%
3,500,000 Dayton Hudson Corp.,
Notes,
5.875%, 11/1/2008................................. 3,216,007
6,000,000 Dillards Inc.,
Notes,
6.08%, 8/1/2000................................... 5,965,362
12,000,000 Kroger Co.,
6.00%, 1/1/2000................................... 11,974,800
8,000,000 Wal Mart Stores Inc.,
Notes,
6.875%, 8/10/2009................................. 8,027,848
------------
29,184,017
------------
Telecommunication Services & Equipment - 4.2%
5,000,000 Airtouch Communications, Inc.,
Notes,
7.00%, 10/1/2003.................................. 5,021,950
6,935,000 AT&T Corp.,
Notes,
6.50%, 3/15/2029.................................. 6,138,168
2,727,412 Bellsouth Savings & Employee Stock Option Trust,
Ser. A,
9.125%, 7/1/2003.................................. 2,881,399
GTE Corp.:
5,000,000 9.38%, 12/1/2000................................... 5,171,110
7,500,000 6.36%, 4/15/2006................................... 7,292,520
10,500,000 Qwest Communications Int'l., Inc.,
Sr. Notes,
7.50%, 11/1/2008.................................. 10,421,250
10,000,000 Sprint Capital Corp.,
Notes,
6.90%, 5/1/2019................................... 9,312,960
5,000,000 Sprint Spectrum, L.P.,
Sr. Notes,
11.00%, 8/15/2006 5,625,000
6,375,000 Tele-Communications, Inc.,
7.25%, 8/1/2005................................... 6,479,340
Worldcom, Inc.:
12,510,000 6.40%, 8/15/2005................................... 12,224,159
5,000,000 6.95%, 8/15/2028................................... 4,665,980
------------
75,233,836
------------
Transportation - 1.6%
4,000,000 AMERCO,
Sr. Notes,
7.20%, 4/1/2002................................... 3,935,988
10,000,000 CSX Corp.,
8.10%, 9/15/2022.................................. 10,180,790
U.S. West Capital Funding, Inc.:
10,000,000 6.25%, 7/15/2005................................... 9,514,830
5,000,000 6.38%, 7/15/2008................................... 4,666,995
------------
28,298,603
------------
</TABLE>
48
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Utilities - Electric - 1.8%
$ 3,000,000 Carolina Power & Light Co.,
8.625%, 9/15/2021................................. $ 3,303,240
10,000,000 Cmnwlth. Edison Co.,
Notes,
7.625%, 1/15/2007................................. 10,195,860
10,000,000 Duke Capital Corp.,
Sr. Notes,
7.25%, 10/1/2004.................................. 10,037,490
8,500,000 Niagara Mohawk Power Corp.,
Sr. Notes, Ser. G,
7.75%, 10/1/2008.................................. 8,629,829
------------
32,166,419
------------
Total Corporate Bonds & Notes
(cost $604,357,336)............................... 589,344,715
------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 1.4%
FHLMC:
3,500,000 5.85%, 1/25/2019................................... 3,440,623
4,559,153 6.50%, 4/15/2018................................... 4,577,914
5,770,000 6.75%, 3/15/2007................................... 5,802,918
FNMA:
4,120,000 6.50%, 3/25/2019................................... 4,067,944
7,724,000 7.75%, 9/25/2022................................... 7,788,635
------------
Total Collateralized Mortgage Obligations (cost
$25,267,532)...................................... 25,678,034
------------
MORTGAGE-BACKED SECURITIES - 2.0%
FHLMC:
1,790,265 5.50%, 4/1/2006.................................... 1,708,163
5,000,000 6.24%, 10/6/2004................................... 4,962,705
1,209,298 6.50%, 11/1/1999................................... 1,211,378
2,000,000 6.75%, 5/30/2006................................... 2,023,742
8,250,000 7.00%, 9/15/2007................................... 8,195,426
4,555,123 7.50%, 5/1/2009 - 10/1/2010........................ 4,636,341
2,804,299 8.00%, 7/1/2025.................................... 2,874,463
38,568 11.88%, 6/15/2013.................................. 40,565
9,895,005 GNMA,
6.50%, 4/20/2029.................................. 9,442,506
------------
Total Mortgage-Backed Securities (cost
$35,682,597)...................................... 35,095,289
------------
U.S. AGENCY OBLIGATIONS - 18.1%
FFCB:
2,000,000 5.75%, 2/9/2005.................................... 1,930,220
7,000,000 6.37%, 10/30/2007.................................. 6,891,283
2,000,000 7.60%, 7/24/2006................................... 2,085,402
1,091,332 FHA
Puttable Project Loan 64,
7.43%, 1/1/2024................................... 1,112,433
FHLB:
10,000,000 5.38%, 3/2/2001.................................... 9,918,030
2,000,000 5.50%, 1/21/2003................................... 1,955,860
10,000,000 5.62%, 1/27/2003................................... 9,811,440
10,000,000 5.75%, 4/30/2001................................... 9,961,120
5,000,000 5.82%, 7/13/2005................................... 4,840,180
5,000,000 6.50%, 11/29/2005.................................. 4,998,505
U.S. AGENCY OBLIGATIONS - continued
Finl. Assistance Corp.:
$17,500,000 8.80%, 6/10/2005.................................... $ 19,419,838
5,000,000 9.38%, 7/21/2003.................................... 5,499,430
FNMA:
37,170,000 5.13%, 2/13/2004.................................... 35,401,823
2,000,000 6.29%, 2/11/2002.................................... 2,005,614
5,000,000 6.38%, 1/16/2002.................................... 5,028,810
15,099,000 6.38%, 6/15/2009.................................... 14,781,423
8,873,876 6.50%, 8/1/2010 - 9/1/2010.......................... 8,764,931
11,653,838 7.00%, 11/1/2026.................................... 11,525,529
16,691,099 7.50%, 6/1/2002 - 5/1/2027.......................... 16,810,211
GNMA:
26,332,216 6.00%, 4/15/2011 - 1/20/2029........................ 24,515,847
42,708,200 6.50%, 2/15/2009 - 5/15/2028........................ 41,047,752
20,593,202 7.00%, 2/15/2011 - 5/15/2027........................ 20,332,671
26,551,295 7.50%, 9/15/2025 - 6/15/2027........................ 26,695,071
9,041,205 8.00%, 6/15/2026 - 12/15/2026....................... 9,260,093
5,930,988 8.25%, 7/15/2008 - 5/15/2020........................ 6,174,281
373,269 8.50%, 7/15/2021.................................... 388,799
6,197,378 9.00%, 5/15/2016 - 10/15/2021....................... 6,537,916
1,381,200 9.50%, 8/15/2018 - 12/15/2020....................... 1,484,333
37,790 11.50%, 5/15/2013 - 6/15/2013....................... 42,652
Private Export Funding Corp.:
10,000,000 7.30%, 1/31/2002.................................... 10,251,540
2,000,000 7.90%, 3/31/2000.................................... 2,022,398
5,000,000 6.90%, 1/31/2003.................................... 5,096,140
------------
Total U.S. Agency Obligations
(cost $328,847,764)................................ 326,591,575
------------
U.S. TREASURY OBLIGATIONS - 29.3%
U.S. Treasury Bonds:
75,000,000 5.50%, 8/15/2028.................................... 67,148,475
22,301,000 6.50%, 11/15/2026................................... 22,663,391
25,000,000 7.50%, 11/15/2016................................... 27,687,500
10,000,000 8.00%, 11/15/2021................................... 11,818,750
44,454,000 8.13%, 8/15/2019 - 8/15/2021........................ 53,034,747
15,000,000 8.75%, 5/15/2020.................................... 18,876,570
8,500,000 8.88%, 2/15/2019.................................... 10,741,875
15,000,000 9.00%, 11/15/2018................................... 19,139,070
15,000,000 11.25%, 2/15/2015................................... 22,007,820
U.S. Treasury Notes:
1,500,000 5.50%, 5/15/2009.................................... 1,450,782
9,700,000 5.63%, 11/30/2000................................... 9,718,187
97,338,000 5.75%, 10/31/2002 - 8/15/2003....................... 97,184,708
5,000,000 6.25%, 2/28/2002.................................... 5,062,500
95,000,000 7.00%, 7/15/2006.................................... 99,779,735
10,000,000 7.25%, 5/15/2004.................................... 10,550,000
10,000,000 7.50%, 11/15/2001................................... 10,365,630
25,000,000 7.88%, 11/15/2004................................... 27,101,575
14,340,000 8.00%, 5/15/2001.................................... 14,859,825
------------
Total U.S. Treasury Obligations
(cost $530,322,932)................................ 529,191,140
------------
</TABLE>
49
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - 7.0%
Banks - 1.7%
$ 2,000,000 Banco Santiago, S.A.,
7.00%, 7/18/2007................................ $ 1,764,846
Korea Development Bank
8,000,000 7.25%, 5/15/2006................................. 7,539,432
8,000,000 7.38%, 9/17/2004................................. 7,795,200
2,982,000 Skandinaviska Enskilda Banken, 6.875%,
2/15/2009....................................... 2,803,942
5,000,000 Svenska Handelsbanken,
8.35%, 7/15/2004................................ 5,196,075
5,000,000 Westpac Banking Co.,
9.125%, 8/15/2001............................... 5,224,825
--------------
30,324,320
--------------
Finance & Insurance - 0.9%
6,000,000 FBG Fin. Ltd.,
6.75%, 11/15/2005............................... 5,830,200
5,000,000 Ford Capital B.V.,
9.875%, 5/15/2002............................... 5,385,785
5,000,000 Santander Fin. Issuances,
6.375%, 2/15/2011............................... 4,478,315
--------------
15,694,300
--------------
Government - 1.8%
10,000,000 Manitoba (Province of), Canada, 8.00%,
4/15/2002....................................... 10,371,600
7,500,000 Ontario Hydro Corp.,
7.45%, 3/31/2013................................ 7,738,425
Quebec Province, Canada
8,200,000 8.80%, 4/15/2003................................. 8,746,366
5,250,000 5.75%, 2/15/2009................................. 4,794,195
--------------
31,650,586
--------------
Leisure & Tourism - 0.4%
8,060,000 Royal Caribbean Cruises Ltd.,
7.50%, 10/15/2027............................... 7,296,468
--------------
YANKEE OBLIGATIONS - continued
Metals & Mining - 0.4%
$ 7,854,000 Barrick Gold Corp.,
7.50%, 5/1/2007................................. $ 7,858,579
--------------
Oil/Energy - 0.9%
15,000,000 Petro-Canada Ltd.,
8.60%, 1/15/2010................................ 17,102,400
--------------
Paper & Packaging - 0.3%
5,000,000 Celulosa Arauco Y Constitucion, 7.20%,
9/15/2009....................................... 4,472,655
--------------
Utilities - Electric - 0.6%
11,500,000 Fletcher Challenge Capital Canada Inc.,
7.875%, 3/24/2017............................... 11,246,218
--------------
Total Yankee Obligations
(cost $124,430,913)............................. 125,645,526
--------------
MUTUAL FUND SHARES - 0.0%
222,012 Valiant General Money Market
Fund
(cost $222,012)................................. 222,012
--------------
REPURCHASE AGREEMENT - 0.4%
$ 7,101,954 Societe Generale Repurchase Agreement,
5.30%, dated 9/30/1999, due 10/1/1999 cost
$7,101,954 maturity value $7,103,000 (b)........ 7,101,954
--------------
Total Investments -
(cost $1,754,248,853)..................... 96.3% 1,737,051,895
Other Assets and
Liabilities - net......................... 3.7 68,028,014
----- --------------
Net Assets................................. 100.0% $1,805,079,909
===== ==============
</TABLE>
(a) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under guidelines established by the Board of Trustees.
(b) Repurchase agreement is collateralized by $7,208,000 U.S. Treasury STRIPS,
due 1/15/2008 with a value, including accrued interest, of $7,228,254 and
$30,000 U.S. Treasury Notes, due 2/15/2003 with a value, including accrued
interest of $30,549.
(c) Effective yield (calculated at date of purchase) is the annual yield at
which the bond accrues until its maturity date.
(d) No market quotation available. Valued at fair value as determined in good
faith under procedures established by the Fund's Board of Trustees.
Summary of Abbreviations:
FFCB Federal Farm Credit Bank
FHA Federal Housing Authority
FHLB Federal Home Loan Banks
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
GNMA General National Mortgage Association
STRIPS Separate Trading of Registered Interest and Principal of Securi-
ties
See Combined Notes to Financial Statements.
50
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 96.5%
Alabama - 0.5%
$ 3,640,000 Alabama Spl. Care Facs. Fin.
Auth. RB, Hosp. Charity Obl.
Group, Ser. D,
4.95%, 11/1/2014, (COLL: U.S. Government
Securities)....................................... $ 3,577,792
------------
Alaska - 0.5%
3,750,000 Alaska IDA RB, Ser. A,
5.70%, 4/1/2011, (MBIA)........................... 3,780,075
------------
Arizona - 0.5%
3,660,000 Phoenix, AZ SFHRB, Ser. A,
6.60%, 12/1/2029, (COLL: GNMA/FNMA)............... 3,910,051
------------
Arkansas - 0.5%
3,000,000 Arkansas Student Loan Auth.
RB, Ser. B,
7.25%, 6/1/2009................................... 3,298,350
------------
California - 5.8%
7,150,000 California Statewide CDA
5.20%, 12/1/2029.................................. 6,926,992
10,000,000 California Student Loan RB,
Ser. D,
6.50%, 6/1/2005................................... 10,450,300
1,700,000 Delta Cnty, CA SFHRB, Ser. A,
6.70%, 6/1/2024, (MBIA)........................... 1,833,144
4,000,000 Foothill/Eastern Corridor
Agcy., CA Toll Road RB, Sr.
Lien, Ser. A,
6.50%, 1/1/2032................................... 4,453,400
Foothill/Eastern Trans. Corridor:
3,885,000 5.00%, 1/15/2005................................... 3,938,768
5,815,000 5.00%, 1/15/2006................................... 5,867,684
4,210,000 Palmdale, CA SFHRB, Ser. A
8.00%, 9/1/2011, (COLL: FHA)...................... 5,264,352
San Franciso Bay Area Transit
Auth. RB,
Bridge Toll Notes:
1,500,000 5.25%, 8/1/2004, (ACA)............................. 1,536,525
1,000,000 5.50%, 8/1/2005, (ACA)............................. 1,032,620
------------
41,303,785
------------
Colorado - 6.2%
4,000,000 Arapahoe Cnty., CO Capital
Impt. Hwy. RB, Prerefunded,
6.90%, 8/31/2015, (COLL: U.S.
Government Securities)............................ 4,556,560
Colorado HFA, SFHRB:
3,500,000 Sr. Ser. A2,
6.60%, 5/1/2028.................................... 3,614,835
1,000,000 Sr. Ser. A3,
6.05%, 10/1/2016................................... 1,044,870
2,250,000 Sr. Ser. C2,
6.875%, 11/1/2028.................................. 2,405,452
1,000,000 Sr. Ser. C3,
6.75%, 5/1/2017.................................... 1,066,120
2,000,000 Sr. Ser. D3,
6.125%, 11/1/2023.................................. 2,043,500
MUNICIPAL OBLIGATIONS - continued
Colorado - continued
$ 1,105,000 Colorado Student Obl. Bond
Auth., Student Loan RB, Ser. B,
6.55%, 12/1/2002.................................. $ 1,131,255
Denver CO City & Cnty. Spl. Facs. RB:
3,025,000 Ser A,
6.00%, 1/1/2011, (MBIA)............................ 3,155,529
1,000,000 Ser. B,
6.50%, 12/1/2002, (MBIA)........................... 1,053,940
3,485,000 Larimer Cnty. CO GO, Sch.
Dist. No. R1,
8.50%, 12/15/2008, (MBIA)......................... 4,368,587
19,000,000 United Airlines Proj., Ser. A,
6.875%, 10/1/2032, (MBIA)......................... 19,515,660
------------
43,956,308
------------
Connecticut - 1.0%
Connecticut Dev. Auth., Mtge. RB, Church Homes Inc.
Hlth. Care Proj.:
340,000 4.65%, 4/1/2000.................................... 340,133
425,000 4.90%, 4/1/2002.................................... 424,503
925,000 5.00%, 4/1/2003.................................... 922,447
1,220,000 5.40%, 4/1/2007.................................... 1,209,849
2,035,000 5.70%, 4/1/2012.................................... 1,917,011
2,550,000 5.80%, 4/1/2021.................................... 2,355,868
------------
7,169,811
------------
Delaware - 0.4%
3,000,000 Delaware Solid Wst. Sys. RB,
Ser. A,
6.75%, 7/1/2003................................... 3,108,990
------------
Florida - 2.2%
6,475,000 Florida Division Bond Fin.
Dept. RB
5.75%, 7/1/2010, (AMBAC).......................... 6,712,309
1,080,000 Halifax, FL Hosp. Med. Ctr. Hlth. Care Facs. RB,
Ser. A,
4.60%, 4/1/2008, (ACA)............................ 1,007,867
Palm Beach Cnty., FL Hlth. Facs. Auth. RB:
Abbey DelRay South Proj.:
675,000 4.35%, 10/1/1999................................... 675,000
700,000 4.50%, 10/1/2000................................... 700,014
750,000 4.65%, 10/1/2001................................... 747,900
805,000 4.80%, 10/1/2002................................... 802,199
775,000 5.00%, 10/1/2003................................... 773,969
850,000 5.00%, 10/1/2004................................... 844,917
930,000 5.10%, 10/1/2005................................... 921,667
500,000 5.30%, 10/1/2007................................... 494,010
Waterford Proj.:
475,000 4.35%, 10/1/1999................................... 475,000
675,000 4.50%, 10/1/2000................................... 675,013
725,000 4.65%, 10/1/2001................................... 722,970
------------
15,552,835
------------
</TABLE>
51
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Georgia - 1.7%
$ 1,500,000 Coffee Cnty., GA Hosp. Auth. RAN,
6.75%, 12/1/2026.................................. $ 1,509,165
11,695,000 Fulton Cnty., GA Dev. Auth. Spl. RB, Delta Airlines
Inc. Proj.,
5.30%, 5/1/2013................................... 10,930,732
------------
12,439,897
------------
Hawaii - 0.4%
2,500,000 Hawaii Dept. of Budget & Fin., Spl. Purpose RB, The
Queens Hlth. Sys. Group, Ser. A,
6.05%, 7/1/2016................................... 2,526,775
------------
Illinois - 7.0%
3,500,000 Chicago, IL O'Hare Int'l. Arpt., Spl. Fac. RB,
United Airlines Proj., Ser. B
5.20%, 4/1/2011................................... 3,253,250
1,770,000 Chicago, IL SFHRB, Ser. A,
4.70%, 10/1/2017, (COLL: GNMA/FNMA)............... 1,766,159
Illinois Dev. Fin. Auth. PCRB Cmmnwlth. Ed.:
4,000,000 5.30%, 1/15/2004................................... 4,112,360
400,000 Ser. A,
7.60%, 3/1/2014.................................... 412,536
Illinois Dev. Fin. Auth. RB:
Community Rehabilitation Providers,
Ser. A:
2,540,000 5.70%, 7/1/2007.................................... 2,545,741
3,490,000 5.80%, 7/1/2008.................................... 3,529,716
Lockport Sch. Dist.:
2,510,000 5.00%, 7/1/2006.................................... 2,388,114
Illinois Edl. Facs. Auth. RB
Mercy Hosp.:
4,820,000 10.00%, 1/1/2015................................... 6,473,163
10,705,000 Ser. A,
5.50%, 7/1/2009.................................... 10,303,884
1,580,000 Illinois Hsg. Dev. Auth. RB, Ser. D-2, 5.00%,
8/1/2019.......................................... 1,567,329
12,500,000 Illinois Sales Tax RB, Ser. Q,
6.00%, 6/15/2012, (MBIA-IBC)...................... 13,229,250
------------
49,581,502
------------
Indiana - 3.8%
Indiana Hlth. Facs. Fin. Auth., Hosp. RB
Charity Obl. Group, Ser. D:
6,875,000 5.00%, 11/1/2026, (MBIA)........................... 6,752,831
1,000,000 5.50%, 11/15/2008.................................. 1,021,510
1,070,000 5.50%, 11/15/2009.................................. 1,086,532
4,215,000 5.75%, 11/15/2014.................................. 4,218,330
1,075,000 Indiana Hsg., SFHRB,
Ser. B1,
7.55%, 7/1/2010, (COLL: GNMA)..................... 1,107,658
8,615,000 Indianapolis, IN, Arpt. Auth.
RB, Spl. Facs. United Air
Lines Proj., Ser. A,
6.50%, 11/15/2031................................. 8,676,253
MUNICIPAL OBLIGATIONS - continued
Indiana - continued
$ 4,000,000 Wabash, IN, Solid Wst.
Disposal RB, JSC Proj,
7.50%, 6/1/2026,
(Gtd. by JSC, Inc.)................................ $ 4,315,520
------------
27,178,634
------------
Kansas - 1.5%
5,000,000 Burlington, KS Env. Impt. RB
4.50%, 3/1/2000.................................... 4,964,400
Sedgwick & Shawnee Cnty., KS
SFHRB:
1,810,000 Ser. A,
6.70%, 6/1/2029, (COLL: GNMA)....................... 1,908,229
3,635,000 Ser. A1,
5.15%, 12/1/2013, (COLL: GNMA)...................... 3,593,343
------------
10,465,972
------------
Louisiana - 1.0%
East Baton Rouge, LA, Sales &
Use Tax RB, Ser. ST:
1,760,000 8.00%, 2/1/2002, (FGIC)............................. 1,898,107
1,920,000 8.00%, 2/1/2003, (FGIC)............................. 2,122,080
Jefferson Parish, LA Sinking
Fund Mtge. RB
Ser. B1:
750,000 5.00%, 12/1/2012, (COLL: GNMA)...................... 726,045
2,000,000 6.75%, 6/1/2030, (COLL: GNMA)....................... 2,142,600
------------
6,888,832
------------
Maryland - 1.6%
2,670,000 Frederick Cnty., MD, Spl.
Obl., Spl. Tax, Urbana
Community Dev. Auth.,
6.25%, 7/1/2010.................................... 2,572,679
10,000,000 Northeast, MD, Wst. Disposal
Resources RB, Baltimore Resco
Retrofit Proj.,
5.00%, 1/1/2012, (COLL: FNMA)...................... 8,810,800
------------
11,383,479
------------
Massachusetts - 2.2%
6,095,000 Massachusetts HFA RB Hsg. Proj.,
5.95%, 10/1/2008, (AMBAC).......................... 6,314,298
2,000,000 Residential Dev.,
6.35%, 5/15/2003, (COLL: FNMA)..................... 2,087,700
8,165,000 Massachusetts Hlth. & Edl.
Facs. Auth. RB, Caritas
Christi Obl. Group A,
5.70%, 7/1/2015.................................... 7,609,780
------------
16,011,778
------------
Michigan - 1.7%
5,715,000 Dickinson Cnty., MI Hlth. Care RB
5.50%, 11/1/2013................................... 5,220,081
335,000 Kalamazoo, MI Hosp. Fin. Auth.
RB, Ser. A,
6.25%, 7/1/2004, (FGIC)............................ 335,670
3,000,000 Michigan Bldg. Auth. RB,
Refunding Facs. Program, Ser. 1,
4.625%, 10/15/2021................................. 2,868,060
</TABLE>
52
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Michigan - continued
$ 4,300,000 Michigan Strategic Fund, RB,
United Wst. Sys. Proj.,
5.20%, 4/1/2010................................... $ 4,004,676
------------
12,428,487
------------
Minnesota - 0.2%
Minnesota HFA, SFHRB
Ser. C:
495,000 6.80%, 7/1/2011.................................... 510,162
685,000 7.10%, 7/1/2011, (FHA)............................. 708,865
------------
1,219,027
------------
Mississippi - 3.5%
10,750,000 Mississippi Business Fin.
Corp. Solid Wst. Disposal RB,
Phosphates Corp. Proj.,
5.80%, 3/1/2022................................... 9,980,945
4,855,000 Mississippi Gulf Coast, Reg'l.
Waste Wtr. Auth. RB
7.00%, 7/1/2012, (COLL: U.S. Government
Securities)....................................... 5,542,322
Mississippi Home Corp. SFHRB:
2,000,000 Class 6, Ser. A,
5.25%, 6/1/2031, (COLL: GNMA/FNMA)................. 2,078,640
7,230,000 Ser. H,
6.70%, 12/1/2029, (COLL: GNMA/FNMA)................ 7,511,681
------------
25,113,588
------------
Missouri - 1.6%
5,230,000 Missouri Hsg. Dev. Commission
Mtge., SFHRB, Ser. E1,
6.45%, 9/1/2029, (COLL: GNMA/FNMA)................ 5,578,736
3,000,000 Missouri Office Bldg., Spl.
Obl.
6.00%, 12/1/2002.................................. 3,106,860
2,395,000 Missouri SFHRB, Ser. B2,
6.40%, 9/1/2029, (COLL: GNMA/FNMA)................ 2,552,615
------------
11,238,211
------------
Nevada - 0.0%
315,000 Nevada Hsg. Division SFHRB,
Ser. A1
7.55%, 10/1/2010.................................. 322,380
------------
New Hampshire - 1.8%
13,000,000 New Hampshire Business PCRB,
Refunding United Illumination Proj.,
4.55%, 7/1/2027................................... 12,687,220
------------
New Jersey - 6.4%
1,000,000 Cherry Hill Township NJ,
5.80%, 6/1/2004................................... 1,050,820
2,000,000 Howell Township, NJ GO
6.40%, 1/1/2003, (COLL: U.S. Government
Securities) (FGIC)................................ 2,120,320
MUNICIPAL OBLIGATIONS - continued
New Jersey - continued
New Jersey EDA, RB:
$16,525,000 Continental Airlines, Inc. Proj.,
6.625%, 9/15/2012, (FHA)........................... $ 17,396,859
Franciscan Oaks Proj.:
3,620,000 5.60%, 10/1/2012................................... 3,455,688
5,685,000 5.70%, 10/1/2017................................... 5,223,435
900,000 Keswick Pines Proj.,
5.60%, 1/1/2012.................................... 855,585
The Evergreens:
3,380,000 5.875%, 10/1/2012.................................. 3,348,228
680,000 6.00%, 10/1/2017................................... 663,932
3,325,000 6.00%, 10/1/2022................................... 3,204,668
New Jersey Hsg. & Mtge. Fin.
Agcy. RB:
3,650,000 Home Buyer AA,
5.10%, 10/1/2006, (MBIA)........................... 3,637,261
1,650,000 Ser. 1,
6.45%, 11/1/2007................................... 1,728,458
1,000,000 New Jersey Hwy. Auth. RB
6.25%, 1/1/2014.................................... 1,048,060
500,000 New Jersey Turnpike Auth.
Turnpike RB, Ser. C,
6.30%, 1/1/2004.................................... 516,120
160,000 New Jersey Waste Wtr.
Treatment Trust RB
6.80%, 6/15/2002................................... 163,986
1,000,000 Rutgers St. Univ. RB, Ser. R,
6.40%, 5/1/2008.................................... 1,062,660
------------
45,476,080
------------
New York - 12.5%
7,000,000 Metropolitan Trans. Auth. of
NY RB, Ser. A,
6.10%, 7/1/2026, (FSA)............................. 7,680,260
8,000,000 New York City Muni. Wtr. Fin.
Auth., Wtr. & Swr. Sys. RB,
Ser. B,
6.25%, 6/15/2020................................... 8,769,120
13,000,000 New York Dormitory Auth. RB,
Ser. A,
5.50%, 5/15/2013................................... 13,061,100
1,000,000 New York Env. Facs. RB, 7.05%, 6/15/2004............ 1,065,810
1,000,000 New York Local Govt. Assist
RB, Ser. A,
7.125%, 4/1/2011................................... 1,062,620
2,250,000 New York Muni. Bond Bank RB,
Ser. A,
6.875%, 3/15/2006.................................. 2,372,670
6,045,000 New York Urban Dev. Corp. RB
5.75%, 7/1/2009.................................... 6,353,960
New York, NY GO:
14,490,000 Ser. 1992-B,
7.50%, 2/1/2006..................................... 15,599,209
Ser. A:
10,535,000 5.875%, 8/1/2003................................... 11,009,180
2,500,000 6.25%, 8/1/2010.................................... 2,654,800
3,000,000 6.25%, 8/1/2011.................................... 3,166,260
</TABLE>
53
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New York - continued
$ 5,795,000 Ser. C,
6.50%, 2/1/2008..................................... $ 6,319,332
6,000,000 Ser. I,
6.50%, 3/15/2005.................................... 6,472,620
3,000,000 Port Auth. of NY & NJ, Spl. Obl.
6.75%, 10/1/2011................................... 3,210,060
------------
88,797,001
------------
North Carolina - 2.9%
Cumberland Cnty., NC Hosp.
Fac. RB
Cumberland Cnty. Hosp. Sys., Inc.:
3,435,000 5.25%, 10/1/2010.................................... 3,342,736
3,295,000 5.25%, 10/1/2011.................................... 3,170,119
12,930,000 North Carolina Eastern Muni.
Pwr. Sys. RB, Ser. A,
5.70%, 1/1/2015, (MBIA)............................ 12,889,659
North Carolina Med. Care
Commission, Hosp. RB,
Transylvania Cmmnty. Hosp. Inc.:
130,000 4.45%, 10/1/1999.................................... 130,000
135,000 4.60%, 10/1/2000.................................... 135,265
140,000 4.70%, 10/1/2001.................................... 139,873
155,000 4.80%, 10/1/2002.................................... 154,460
155,000 4.90%, 10/1/2003.................................... 154,239
155,000 5.00%, 10/1/2004.................................... 154,073
175,000 5.00%, 10/1/2005.................................... 172,541
185,000 5.05%, 10/1/2006.................................... 181,402
190,000 5.15%, 10/1/2007.................................... 185,898
------------
20,810,265
------------
Ohio - 0.6%
Franklin Cnty., OH Hlth. Care
Facs. RB,
Friendship Village of Dublin Proj.:
505,000 5.00%, 11/1/2005.................................... 497,465
380,000 5.05%, 11/1/2006.................................... 372,324
225,000 5.10%, 11/1/2007.................................... 219,236
100,000 5.15%, 11/1/2008.................................... 96,803
1,250,000 5.50%, 11/1/2016.................................... 1,169,512
1,750,000 5.625%, 11/1/2022................................... 1,613,745
------------
3,969,085
------------
Oklahoma - 2.4%
Oklahoma Dev. Fin. Auth. RB,
Refunding Hillcrest Healthcare Sys.:
4,425,000 5.75%, 8/15/2013.................................... 4,293,533
3,805,000 5.75%, 8/15/2014.................................... 3,672,434
4,120,000 Oklahoma HFA, SFHRB, Mtge.
Homeownership Loan,
6.40%, 9/1/2030.................................... 4,288,467
5,000,000 Tulsa Cnty., OK IDA, Hlth.
Care RB, St. Francis Hosp.,
5.15%, 12/15/2018.................................. 5,075,100
------------
17,329,534
------------
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - 3.6%
$ 1,500,000 Beaver Falls, PA Muni. Auth.
Spl. Obl.
9.125%, 8/1/2005, (COLL: State
& Local Government)................................ $ 1,828,950
Dauphin Cnty., PA General
Auth. RB,
Office & Parking, Forum Place,
Ser. A:
7,865,000 5.50%, 1/15/2008.................................... 7,585,399
3,950,000 5.75%, 1/15/2010.................................... 3,812,896
245,000 Delaware River Port Auth. of
PA & NJ, Delaware River
Bridges RB,
6.50%, 1/15/2011................................... 264,345
4,000,000 Montgomery Cnty., PA Higher
Ed. & Hlth. Auth. RB, Beaver
College,
5.80%, 4/1/2016.................................... 4,000,000
445,000 Northampton Cnty., PA IDA RB,
Commercial Development
Strawbridge Proj.
7.20%, 12/15/2001.................................. 461,087
730,000 Pennsylvania Higher Ed. RB,
Ser. O,
5.00%, 6/15/2009................................... 727,722
95,000 Philadelphia, PA Hosp. &
Higher Ed. Facs. Auth. RB
6.75%, 8/15/2001................................... 95,662
1,795,000 West View, PA, Muni. Auth.
Spl. Obl.
9.20%, 5/15/2003, (COLL: U.S.
Government Securities)............................. 1,936,644
5,000,000 Westmoreland Cnty., PA IDA RB,
Valley Landfill Proj.,
0.00%, 5/1/2018
(Eff. Yield 5.10%) (a)............................. 4,588,700
------------
25,301,405
------------
South Dakota - 0.8%
5,000,000 Heartland Consumer Pwr. Dist.
RB
7.00%, 1/1/2016, (COLL: U.S.
Government Securities)............................. 5,691,650
------------
Tennessee - 2.2%
Shelby Cnty., TN Hlth. Edl. &
Hsg. RB
St. Judes Childrens Research:
1,000,000 4.65%, 7/1/2004..................................... 999,680
1,000,000 5.00%, 7/1/2009..................................... 984,770
13,500,000 6.00%, 7/1/2014..................................... 13,877,055
------------
15,861,505
------------
Texas - 11.6%
9,915,000 Alliance Arpt. Auth., Spl.
Facs. RB, American Airlines
Inc. Proj.,
7.00%, 12/1/2011................................... 10,928,610
750,000 Austin, TX Utility Sys. RB
8.00%, 11/15/1999, (COLL: U.S.
Government Securities)............................. 753,896
</TABLE>
54
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Texas - continued
Harris Cnty., TX Hlth. Facs.
Dev. RB
Christus Hlth., Ser. A:
$ 8,145,000 5.25%, 7/1/2007..................................... $ 8,294,868
4,000,000 5.50%, 7/1/2009..................................... 4,102,840
2,000,000 5.50%, 7/1/2010..................................... 2,038,860
10,790,000 5.625%, 7/1/2011.................................... 11,020,367
2,035,000 Laredo, TX Independent School
Dist. RB
6.20%, 8/1/2010.................................... 2,196,477
North Central TX Hlth. Facs.
Dev. Corp. RB,
TX Hlth. Resources Sys., Ser. B:
3,910,000 5.75%, 2/15/2009, (MBIA)............................ 4,064,758
4,595,000 5.75%, 2/15/2012, (MBIA)............................ 4,680,927
4,120,000 5.75%, 2/15/2013.................................... 4,164,578
2,000,000 United Reg'l. Hlth. Care Sys.
Inc. Proj.,
5.25%, 9/1/2008, (MBIA)............................ 2,019,760
10,000,000 Redeemable River Auth. TX PCRB
5.20%, 7/1/2011.................................... 9,819,900
1,300,000 Retama, TX Dev. Corp. Spl.
Facs. RB, Retama Racetrack
8.75%, 12/15/2018, (COLL: U.S.
Treaury STRIPs).................................... 1,568,606
Texas Dept. Hsg. & Cmmnty.
Affairs:
2,460,000 MFHRB,
5.55%, 1/1/2005..................................... 2,503,444
2,435,000 SFHRB, Ser. E,
5.00%, 9/1/2016, (MBIA)............................. 2,238,982
5,000,000 Texas GO, Vets Hsg. Assistance
Program, Ser. B,
5.25%, 12/1/2030................................... 4,993,500
5,455,000 Texas Turnpike Auth. RB
12.625%, 1/1/2020, (COLL: U.S.
Government Securities)............................. 6,700,267
------------
82,090,640
------------
Utah - 0.2%
Utah HFA SFHRB:
495,000 Ser. D-1, Class I,
5.65%, 7/1/2016..................................... 493,362
610,000 Ser. G1,
7.35%, 7/1/2018..................................... 638,298
------------
1,131,660
------------
Virginia - 1.6%
2,000,000 Chesapeake, VA Redev. & Hsg.
Auth., Ser. A,
6.20%, 4/1/2028.................................... 1,945,320
2,000,000 Metro Washington DC Arpt.
Auth. RB, Ser. A,
7.25%, 10/1/2010................................... 2,096,320
1,100,000 Newport News Virginia, Ser. A,
6.50%, 11/1/2006................................... 1,147,124
5,985,000 Riverside, VA, Reg'l. Jail
Auth. RB
5.875%, 7/1/2014, (MBIA)........................... 6,124,510
------------
11,313,274
------------
MUNICIPAL OBLIGATIONS - continued
Washington - 2.0%
$12,000,000 Washington GO, Ser. B & AT 7,
6.40%, 6/1/2017.................................... $ 13,123,800
1,100,000 Washington Pub. Pwr. Supply
RB, Ser. A,
5.00%, 7/1/2011.................................... 1,057,364
------------
14,181,164
------------
Wisconsin - 1.8%
Wisconsin Hlth. & Edl. Facs.
Auth. RB:
6,865,000 Med. College Inc.,
5.95%, 12/1/2015................................... 6,970,378
5,300,000 Mercy Hosp. of Janesville, Inc.,
6.50%, 8/15/2011................................... 5,498,326
------------
12,468,704
------------
U. S. Virgin Islands - 2.3%
Virgin Islands Pub. Fin. Auth.
RB, Sr. Lien:
7,070,000 Ser. A,
5.20%, 10/1/2009.................................... 6,898,906
3,000,000 Ser. C:
5.50%, 10/1/2007.................................... 3,027,030
3,855,000 5.50%,
10/1/2008........................................... 3,874,005
2,000,000 Virgin Islands Wtr. & Pwr.
Auth. RB, Ser. B,
7.60%, 1/1/2012.................................... 2,217,160
------------
16,017,101
------------
Total Municipal Obligations
(cost $692,837,315)................................ 685,582,847
------------
MUTUAL FUND SHARES - 3.4%
23,977,000 Federated Municipal
Obligation Fund
(cost $23,977,000) ................................ 23,977,000
------------
Total Investments -
(cost $716,814,315)........................... 99.9% 709,559,847
Other Assets and
Liabilities - net............................. 0.1 776,250
----- ------------
Net Assets..................................... 100.0% $710,336,097
===== ============
</TABLE>
55
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments(continued)
September 30, 1999
The Fund invests primarily in debt securities issued by municipalities.
The ability of the issuers of debt securities to meet their obligations
may be affected by economic developments in a specific industry or munic-
ipality. In order to reduce risk associated with such economic develop-
ments, at September 30, 1999, 31.2% of the securities, as a percentage of
net assets, are backed by bond insurance of various financial institu-
tions and financial guaranty assurance agencies. At September 30, 1999,
the Fund had securities backed by bond insurance of the following finan-
cial institutions representing more than 5% of net assets:
MBIA 12.6%
(a) Effective yield (calculated at date of purchase) is the annual yield at
which the bond accrues until its maturity date.
Summary of Abbreviations:
ACA American Capital Access
AMBAC American Municipal Bond Assurance Corporation
CDA Community Development Authority
COLL Collateral
EDA Economic Development Authority
FGIC Financial Guaranty Insurance Corporation
FHA Federal Housing Authority
FNMA Federal National Mortgage Association
FSA Financial Security Assurance Corporation
GNMA Government National Mortgage Association
GO General Obligation
HFA Housing Finance Authority
IBC Insured Bond Certification
IDA Industrial Development Authority
JSC Jefferson Smurfit Corp.
MBIA Municipal Bond Investors Assurance Corporation
MFHRB Multi Family Housing Revenue Bond
PCRB Pollution Control Revenue Bond
RAN Revenue Anticipation Note
RB Revenue Bond
SFHRB Single Family Housing Revenue Bond
STRIPS Separate Trading of Registered Interest and Principal of Securi-
ties
See Combined Notes to Financial Statements.
56
<PAGE>
EVERGREEN
Select International Bond Fund
Schedule of Investments
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS & NOTES - 1.1%
United States - 1.1%
647,000 Household Fin. Corp.,
EUR 5.13%, 6/24/2009
(cost $623,022)..................................... $ 637,374
------------
FOREIGN BONDS (NON U.S. DOLLARS) - 88.9%
Australia - 2.3%
1,600,000 New South Wales Treasury Corp.,
AUD 12.00%, 12/1/2001................................... 1,275,585
------------
Austria - 2.4%
2,400,000 Oester Kontrollbank,
DEM 5.75%, 9/12/2007.................................... 1,331,315
------------
Belgium - 4.5%
2,680,000 Kingdom of Belgium,
EUR 3.75%, 3/28/2009.................................... 2,515,443
------------
Denmark - 5.3%
Kingdom of Denmark,
5,800,000 5.00%, 8/15/2005.................................... 825,087
DKK
13,500,000 7.00%, 11/15/2007................................... 2,115,423
DKK ------------
2,940,510
------------
France - 3.2%
10,600,000 Credit Local De France,
FRF 5.38%, 1/13/2004.................................... 1,772,171
------------
Germany - 8.2%
1,950,000 Bayer Hypo Vereinsbank,
EUR 4.75%, 9/19/2007.................................... 1,992,938
100,000 Federal Republic of Germany,
EUR 6.00%, 7/4/2007..................................... 112,289
Kreditanstalt Fuer Wiederaufbau,
1,300,000 5.25%, 1/4/2010..................................... 1,359,956
EUR
1,003,875 5.50%, 3/12/2007.................................... 1,091,838
EUR ------------
4,557,021
------------
Italy - 3.5%
1,800,000 Republic of Italy,
EUR 5.75%, 7/10/2007.................................... 1,966,427
------------
Japan - 21.6%
Japan, Government of,
976,000,000 1.40%, 6/22/2009.................................... 8,781,075
JPY
260,000,000 1.50%, 1/20/2005.................................... 2,497,210
JPY
75,000,000 2.60%, 3/20/2019.................................... 713,245
JPY ------------
11,991,530
------------
FOREIGN BONDS (NON U.S. DOLLARS) - continued
Mexico - 0.4%
125,000 United Mexican States,
GBP 8.75%, 5/30/2002..................................... $ 204,398
------------
Netherlands - 14.4%
1,700,000 Bank Voor Ned Gemeenten,
NLG 6.25%, 9/15/2000..................................... 841,358
9,800,000 Depfa Fin. NV,
FRF 6.38%, 11/18/2008.................................... 1,680,807
3,150,000 DSL Fin. NV,
DEM 5.00%, 7/23/2004..................................... 1,738,252
7,000,000 Helaba Fin. BV,
SEK 3.88%, 3/3/2004...................................... 788,045
Netherlands, Government of,
900,000 3.75%, 7/15/2009..................................... 849,622
EUR
748,737 6.50%, 4/15/2003..................................... 850,868
EUR
1,160,000 Siemens Financier,
EUR 5.50%, 3/12/2007..................................... 1,243,722
------------
7,992,674
------------
Norway - 3.0%
13,000,000 Eksportfinans AS,
SEK 6.88%, 2/9/2004...................................... 1,665,260
------------
Slovakia - 0.6%
550,000 Vodohospodarska Vystavba,
DEM 8.00%, 7/9/2001...................................... 306,717
------------
Spain - 4.2%
Kingdom of Spain,
830,000 4.50%, 7/30/2004..................................... 875,687
EUR
1,380,000 5.15%, 7/30/2009..................................... 1,449,005
EUR ------------
2,324,692
------------
Supernational - 2.4%
Int'l. Bank of Reconstruction & Dev.,
760,000 5.38%, 11/6/2003..................................... 370,330
NZD
1,860,000 7.25%, 5/27/2003..................................... 967,079
NZD ------------
1,337,409
------------
Sweden - 5.9%
Kingdom of Sweden,
16,400,000 5.00%, 1/15/2004..................................... 1,976,265
SEK
3,100,000 5.00%, 1/28/2009..................................... 356,718
SEK
550,000 Swedish Export Credit Corp,
GBP 7.63%, 12/27/2001.................................... 917,189
------------
3,250,172
------------
</TABLE>
57
<PAGE>
EVERGREEN
Select International Bond Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS & NOTES - continued
United Kingdom - 7.0%
10,000,000 Diageo PLC,
FRF 6.25%, 11/25/2002..................................... $ 1,701,518
1,175,000 Gallaher Group PLC,
DEM 5.88%, 8/6/2008....................................... 608,595
950,000 Halifax Bldg. PLC,
GBP 8.38%, 12/15/1999..................................... 1,567,977
-----------
3,878,090
-----------
Total Foreign Bonds (Non U.S. Dollars)
(cost $50,852,918)................................... 49,309,414
-----------
YANKEE OBLIGATIONS - 6.1%
Cayman Island - 0.7%
$ 400,000 Hutchison Whampoa Fin.,
6.95%, 8/1/2007...................................... 379,190
-----------
Kazakhstan - 0.3%
200,000 Republic of Kazakhstan,
8.38%, 10/2/2002..................................... 181,200
-----------
Korea - 0.9%
200,000 Export-Import Bank of Korea,
7.13%, 9/20/2001..................................... 197,289
300,000 SK Telecom Ltd.,
7.75%, 4/29/2004..................................... 291,491
-----------
488,780
-----------
YANKEE OBLIGATIONS - continued
Lithuania - 0.9%
$ 525,000 Republic of Lithuania,
7.13%, 7/22/2002...................................... $ 490,087
-----------
Poland - 0.6%
350,000 TPSA Finance BV,
7.13%, 12/10/2003..................................... 344,940
-----------
United Kingdom - 2.7%
500,000 Abbey Natl. PLC,
6.69%, 10/17/2005..................................... 492,458
500,000 British Telecom,
7.00%, 5/23/2007...................................... 505,228
500,000 Rothmans Holdings,
6.50%, 5/6/2003....................................... 480,680
-----------
1,478,366
-----------
Total Yankee Obligations
(cost $3,442,807)..................................... 3,362,563
-----------
Total Investments -
(cost $54,918,747)............................. 96.1% 53,309,351
Other Assets and
Liabilities - net.............................. 3.9 2,187,368
----- -----------
Net Assets...................................... 100.0% $55,496,719
===== ===========
</TABLE>
Summary of Abbreviations:
AUD Australian Dollar
DEM German Deutsche Mark
DKK Danish Krone
EUR Euro Dollar
FRF French Franc
GBP Pound Sterling
JPY Japanese Yen
NLG Dutch Guilder
NZD New Zealand Dollar
SEK Swedish Krone
See Combined Notes to Financial Statements.
58
<PAGE>
EVERGREEN
Select Limited Duration Fund
Schedule of Investments
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - 18.6%
$ 4,774 Aames Mtge. Trust,
Ser. 1996-B, Cl. A1B,
7.275%, 5/15/2020................................... $ 4,766
578,669 Advanta Mtge. Loan Trust,
Ser. 1993-3, Cl. A1,
4.90%, 1/25/2010.................................... 571,653
2,150,000 BankBoston Receivable
Asset-Backed Trust,
Ser. 1997-1, Cl. A7,
6.48%, 7/15/2008.................................... 2,150,183
Case Equipment Receivable Trust:
447,117 Ser. 1996-1, Cl. A4,
6.28%, 6/15/2000..................................... 447,459
363,637 Ser. 1996-B, Cl. A3,
6.65%, 9/15/2003..................................... 364,486
940,000 Ser. 1997-B, Cl. A4,
6.41%, 9/15/2004..................................... 941,152
1,000,000 Ser. 1998-A, Cl. A4,
5.83%, 2/15/2005..................................... 992,885
2,000,000 Ser. 1998-B, Cl. A3,
5.81%, 5/15/2003..................................... 1,994,970
850,000 Chase Credit Card Master Trust,
Ser. 1997-2, Cl. A,
6.30%, 4/15/2003.................................... 852,223
111,806 CIT Receivables Owner Trust,
Ser. 1995-B, Cl. A,
6.50%, 4/15/2011.................................... 112,237
Contimortgage Home Equity Loan Trust:
80,787 Ser. 1996-4, Cl. A5,
6.60%, 10/15/2011.................................... 80,706
530,000 Ser. 1997-2, Cl. A9,
7.09%, 4/15/2028..................................... 528,418
2,371,462 Ser. 1997-4, Cl. A3,
6.26%, 7/15/2012..................................... 2,369,364
3,000,000 Copelco Capital Funding Corp.,
Ser. 1997-4, Cl. A3,
6.47%, 4/20/2005.................................... 3,008,895
2,000,000 Daimler Benz Vehicle Owner Trust,
Ser. 1998-A, Cl. A4,
5.22%, 12/22/2003................................... 1,950,370
2,500,000 Discover Card Master Trust,
Ser. 1994-3, Cl. A,
5.37%, 4/16/2002.................................... 2,501,588
EQCC Home Equity Loan Trust:
13,797 Ser. 1996-2, Cl. A2,
6.70%, 9/15/2008..................................... 13,813
399,913 Ser. 1997-1, Cl. A3,
6.84%, 9/15/2011..................................... 401,579
133,988 Fifth Third Bank Auto Grantor Trust,
Ser. 1996-A, Cl. A,
6.20%, 12/15/2001................................... 134,134
1,038,930 First Plus Home Loan Trust,
Ser. 1997-3, Cl. A3,
6.57%, 10/10/2010................................... 1,038,385
485,284 First Security Auto Grantor Trust,
Ser. 1997-A, Cl. A,
6.30%, 8/15/2003.................................... 485,689
3,600,000 GE Capital Mtge. Svcs., Inc.,
Ser. 1998-1, Cl. A4,
6.44%, 10/25/2016................................... 3,585,402
ASSET-BACKED SECURITIES - continued
$ 1,412,379 Heller Equipment Asset Receivables Trust,
6.39%, 5/25/2005................................... $ 1,414,349
157,612 IMC Home Equity Loan Trust,
Ser. 1997-2, Cl. A3,
6.94%, 11/20/2011.................................. 157,816
MBNA Master Credit Card Trust:
101,357 Ser. 1196-B, Cl. A3,
6.33%, 4/21/2003.................................... 101,576
12,170,000 Ser. 1995-C, Cl. A,
6.45%, 2/15/2008.................................... 12,080,489
760,000 Ser. 1996-J, Cl. A,
5.14%, 2/15/2006.................................... 759,244
2,750,000 Ser. 1998-A, Cl. A,
5.29%, 8/15/2005.................................... 2,745,284
336,877 Olympic Automobile
Receivables Trust,
Ser. 1995-D, Cl. B,
6.10%, 4/15/2002................................... 337,212
Premier Auto Trust:
160,053 Ser. 1996-2, Cl. A4,
6.58%, 10/6/2000.................................... 160,293
1,020,000 Ser. 1997-3, Cl. A5,
6.34%, 1/6/2002..................................... 1,022,014
2,280,000 Ser. 1998-2, Cl. A4,
5.82%, 12/6/2002.................................... 2,262,706
1,000,000 Ser. 1998-3, Cl. A3,
5.88%, 12/8/2001.................................... 998,805
138,676 Prudential Securities Fin.
Asset Funding,
Ser. 1993-8, Cl. A,
5.78%, 11/15/2014.................................. 136,235
391,077 SLMA,
Ser. 1997-1, Cl. A1,
5.32%, 10/6/1999................................... 389,597
1,350 The Money Store, Home Equity
Loan Trust,
Ser. 1993-B, Cl. A1,
5.40%, 8/15/2005................................... 1,350
4,670,000 Toyota Auto Lease Trust,
Ser. 1997-A, Cl. A2,
6.35%, 4/26/2004................................... 4,665,213
Union Acceptance Corp.:
198,999 Ser. 1995-D, Cl. B,
6.03%, 1/7/2003..................................... 198,976
474,362 Ser. 1996-A, Cl. A,
5.40%, 4/7/2003..................................... 472,538
2,476,908 Ser. 1996-D, Cl. A2,
6.17%, 10/9/2002.................................... 2,478,257
2,551,791 Vanderbilt Mtge. & Fin. Inc.,
Ser. 1997-B, Cl. 1A2,
6.78%, 1/7/2008.................................... 2,559,919
1,000,000 WFS Finl. Owner Trust,
Ser. 1998-A, Cl. A4,
5.95%, 2/20/2003................................... 993,625
------------
Total Asset-Backed Securities
(cost $58,664,902)................................. 58,465,855
------------
</TABLE>
59
<PAGE>
EVERGREEN
Select Limited Duration Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS & NOTES - 51.2%
Aerospace & Defense - 1.5%
$4,850,000 Raytheon Co., Notes,
5.95%, 3/15/2001.................................... $ 4,815,575
------------
Automotive Equipment &
Manufacturing - 0.3%
1,000,000 Navistar Int'l. Corp.,
Sr. Notes, Ser. B,
7.00%, 2/1/2003..................................... 972,500
------------
Banks - 3.8%
1,000,000 Banc One Corp.,
Sr. Notes, MTN,
7.00%, 3/25/2002.................................... 1,008,001
MBNA Corp.:
1,975,000 MTN,
6.88%, 10/1/1999..................................... 1,975,000
2,000,000 Sr. Notes, MTN,
6.50%, 9/15/2000..................................... 1,993,786
NationsBank Corp.,
Sr. Notes:
395,000 5.375%, 4/15/2000.................................... 394,175
4,510,000 5.75%, 3/15/2001..................................... 4,470,884
2,000,000 Transamerica Fin. Corp.,
Sr. Notes, MTN,
5.56%, 10/22/1999................................... 2,000,786
------------
11,842,632
------------
Brokers - 10.0%
4,530,000 Bear Stearns Co., Inc.,
6.25%, 12/1/2000.................................... 4,524,519
Lehman Brothers Holdings, Inc.,
MTN:
2,000,000 6.125%, 2/1/2001..................................... 1,983,932
1,000,000 6.33%, 8/1/2000...................................... 1,000,561
850,000 6.50%, 7/18/2000..................................... 851,798
Merrill Lynch & Co., Inc.,
Notes:
10,000,000 5.73%, 2/26/2002..................................... 9,856,340
6,000,000 6.00%, 1/15/2001..................................... 5,976,420
Morgan Stanley Dean Witter,
Sr. Notes:
4,700,000 5.25%, 2/8/2001...................................... 4,641,156
750,000 5.89%, 3/20/2000..................................... 750,769
750,000 Salomon, Inc.: Notes,
6.50%, 3/1/2000..................................... 752,394
1,000,000 Sr. Notes,
7.30%, 5/15/2002.................................... 1,019,912
------------
31,357,801
------------
Building, Construction &
Furnishings - 2.2%
2,000,000 Case Corp., Ser. B,
6.25%, 12/1/2003.................................... 1,947,936
5,000,000 Cemex, SA, MTN,
8.50%, 8/31/2000.................................... 5,061,000
------------
7,008,936
------------
Consumer Products &
Services - 0.3%
1,000,000 Honeywell, Inc., Notes,
6.75%, 3/15/2002.................................... 1,005,346
------------
CORPORATE BONDS & NOTES - continued
Diversified Companies - 0.2%
$ 625,000 Nabisco, Inc., Notes,
6.00%, 2/15/2001.................................... $ 619,105
------------
Electronic Equipment &
Services - 0.8%
2,550,000 Analog Devices Inc.,
6.625%, 3/1/2000.................................... 2,554,840
------------
Finance & Insurance - 11.1%
Associates Corp. of North America,
Sr. Notes:
2,770,000 5.80%, 4/20/2004..................................... 2,663,352
1,250,000 6.00%, 6/15/2000..................................... 1,250,066
1,000,000 Caterpillar Finl. Svcs., MTN,
6.75%, 6/15/2001.................................... 1,007,744
510,000 Chrysler Finl. Co. LLC, Notes,
6.375%, 1/28/2000................................... 511,242
5,430,000 CIT Group Holdings, Inc.,
6.375%, 8/1/2002.................................... 5,378,866
Ford Motor Credit Co.,
Notes:
2,000,000 5.75%, 1/25/2001..................................... 1,984,270
1,000,000 6.55%, 9/10/2002..................................... 996,244
250,000 7.75%, 10/1/1999..................................... 250,000
2,500,000 Freemont General Corp., Sr. Note, 7.70%, 3/17/2004... 2,462,593
GMAC:
MTN:
700,000 5.10%, 12/9/1999..................................... 699,264
500,000 5.95%, 4/20/2001..................................... 497,717
2,000,000 Notes,
5.625%, 2/15/2001.................................... 1,984,124
1,000,000 Ikon Capital, Inc., MTN,
6.73%, 6/15/2001.................................... 979,843
Int'l. Lease Fin. Corp.,
Notes:
750,000 6.125%, 11/1/1999.................................... 750,199
1,500,000 7.00%, 5/15/2000..................................... 1,508,964
3,500,000 McKesson Corp.,
6.60%, 3/1/2000..................................... 3,510,892
Mellon Finl. Co.,
Sr. Notes:
1,000,000 6.30%, 6/1/2000...................................... 1,001,507
255,000 7.625%, 11/15/1999................................... 255,530
6,600,000 PHH Corp., MTN,
5.49%, 3/1/2000..................................... 6,593,598
500,000 Transamerica Fin. Corp., Sub. Notes, 6.75%,
6/1/2000............................................ 502,430
------------
34,788,445
------------
Food & Beverage Products - 1.7%
1,000,000 Coca-Cola Enterprises, Inc., Notes, 6.375%,
8/1/2001............................................ 1,000,164
3,000,000 Heinz HJ Co.,
6.75%, 10/15/1999................................... 3,001,035
1,500,000 Pepsico, Inc., MTN,
6.375%, 12/31/1999.................................. 1,500,543
------------
5,501,742
------------
Healthcare Products & Services - 0.8%
2,500,000 Tenet Healthcare Corp., Sr. Notes, 8.625%,
12/1/2003........................................... 2,482,340
------------
</TABLE>
60
<PAGE>
EVERGREEN
Select Limited Duration Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Industrial Development/Pollution/Resource
Recovery - 4.4%
WMX Technologies, Inc.:
$ 4,000,000 6.25%, 10/15/2000.................................. $ 3,922,304
10,000,000 7.125%, 6/15/2001.................................. 9,802,820
------------
13,725,124
------------
Industrial Specialty Products & Services - 0.8%
2,500,000 EOP Operating L.P.,
6.50%, 1/15/2004.................................. 2,408,015
------------
Information Services & Technology - 3.3%
Comdisco, Inc.:
7,500,000 MTN,
6.02%, 6/26/2000................................... 7,467,465
2,790,000 Notes,
6.50%, 6/15/2000................................... 2,789,018
------------
10,256,483
------------
Lease Rental Obligations - 0.6%
2,000,000 Amerco, Sr. Notes,
7.20%, 4/1/2002................................... 1,967,994
------------
Oil/Energy - 0.2%
590,000 Coastal Corp., Sr. Notes,
8.125%, 9/15/2002................................. 608,632
------------
Paper & Packaging - 0.3%
1,000,000 Int'l. Paper Co., Notes,
7.00%, 6/1/2001................................... 1,005,736
------------
Real Estate - 1.1%
3,500,000 Homeside Lending, Inc., MTN,
6.875%, 5/15/2000................................. 3,517,923
------------
Retailing & Wholesale - 1.8%
5,605,000 Dayton Hudson Corp.,
5.95%, 6/15/2000.................................. 5,611,474
------------
Telecommunication Services & Equipment - 3.9%
4,720,000 AT&T Corp.,
5.625%, 3/15/2004................................. 4,529,727
3,750,000 Cox Communications, Inc., Notes, 6.375%,
6/15/2000......................................... 3,760,313
340,000 TCI Communications, Sr. Notes, 8.65%, 9/15/2004.... 366,884
Worldcom, Inc.,
Sr. Notes:
2,505,000 6.125%, 8/15/2001.................................. 2,488,965
1,000,000 6.25%, 8/15/2003................................... 983,029
------------
12,128,918
------------
Transportation - 2.0%
2,500,000 Burlington Northern Santa Fe Corp., 7.00%,
8/1/2002.......................................... 2,527,775
1,000,000 Continental Airlines, Inc., Sr. Notes,
9.50%, 12/15/2001.................................. 1,017,500
2,800,000 U.S. West Capital Funding, Inc., 6.125%,
7/15/2002......................................... 2,743,975
------------
6,289,250
------------
CORPORATE BONDS - continued
U.S. Government Agencies - 0.1%
$ 90,000 FFCB,
8.60%, 5/30/2006.................................. $ 93,484
100,000 Israel, U.S. Government Guaranteed Notes,
5.75%, 3/15/2000.................................. 100,106
------------
193,590
------------
Total Corporate Bonds & Notes
(cost $161,574,178)............................... 160,662,401
------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 3.1%
7,500,000 Credit Suisse First Boston Mtge. Securities Corp.,
6.58%, 10/15/2001................................. 7,386,000
2,293,656 Deutsche Mtge. & Asset Receivable Corp.,
6.22%, 9/15/2007.................................. 2,217,609
------------
Total Collateralized Mortgage Obligations
(cost $9,644,080)................................. 9,603,609
------------
MORTGAGE-BACKED SECURITIES - 16.1%
FHLB:
200,000 4.218%, 8/27/2003.................................. 184,487
10,000,000 5.25%, 4/25/2002................................... 9,794,790
15,000,000 5.875%, 8/15/2001.................................. 14,951,730
FHLMC:
6,500,000 5.75%, 6/15/2001................................... 6,475,697
2,765,586 6.00%, 1/1/2001 - 12/15/2009....................... 2,722,870
9,266,123 6.50%, 7/1/2004 - 5/15/2013........................ 9,164,928
644,945 7.00%, 12/1/1999................................... 646,699
1,939 9.00%, 5/1/2001.................................... 1,991
FNMA:
1,888,428 5.50%, 1/1/2014.................................... 1,781,675
1,096,849 6.50%, 9/1/2005 - 8/1/2010......................... 1,088,448
500,000 8.25%, 12/18/2000.................................. 513,357
GNMA:
910,459 6.50%, 12/15/2008 - 10/15/2010..................... 898,609
23,273 7.50%, 7/20/2002................................... 23,507
4,600 8.00%, 8/15/2007................................... 4,767
18,199 8.25%, 7/15/2002................................... 18,611
300,742 8.50%, 6/20/2005 - 9/20/2005....................... 309,334
11,343 8.75%, 8/15/2001 - 9/15/2001....................... 11,617
1,128,542 9.00%, 10/20/2002 - 8/15/2022...................... 1,185,001
35,149 9.50%, 7/15/2002................................... 36,705
14,404 9.75%, 5/15/2001 - 5/20/2005....................... 14,888
30,594 10.00%, 10/15/2000 - 3/20/2004..................... 31,944
2,098 10.25%, 2/15/2001.................................. 2,180
638,980 14.00%, 2/15/2012 - 6/15/2012...................... 750,725
------------
Total Mortgage-Backed Securities
(cost $50,811,231)................................ 50,614,560
------------
</TABLE>
61
<PAGE>
EVERGREEN
Select Limited Duration Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - 0.7%
Finance - 0.4%
$ 1,000,000 Hanson Overseas B.V., Sr. Notes, 7.375%,
1/15/2003......................................... $ 1,012,900
------------
Metals & Mining - 0.3%
1,000,000 WMC Fin. USA Ltd., Notes,
6.50%, 11/15/2003................................. 972,851
------------
Total Yankee Obligations
(cost $2,051,783)................................. 1,985,751
------------
COMMERCIAL PAPER - 9.8%
Oil/Energy - 0.7%
2,100,000 Pennzoil Quaker,
5.90%, 10/1/1999.................................. 2,100,000
------------
COMMERCIAL PAPER - continued
Retailing & Wholesale - 6.7%
$10,000,000 J.C. Penney Funding Corp.,
6.32%, 1/10/2000................................... $ 9,822,689
11,385,000 Rite Aid Corporation,
5.70%, 10/4/1999................................... 11,379,592
------------
21,202,281
------------
Telecommunication Services & Equipment - 2.4%
7,500,000 AT&T Capital Corp.,
5.65%, 10/14/1999.................................. 7,484,698
------------
Total Commercial Paper
(cost $30,786,979)................................. 30,786,979
------------
Total Investments -
(cost $313,533,153)......................... 99.5% 312,119,155
Other Assets and
Liabilities - net........................... 0.5 1,666,585
----- ------------
Net Assets - ................................ 100.0% $313,785,740
===== ============
</TABLE>
Summary of Abbreviations:
FFCB Federal Farm Credit Bank
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
GNMA General National Mortgage Association
MTN Medium Term Note
SLMA Student Loan Marketing Association
See Combined Notes to Financial Statements.
62
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Schedule of Investments
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS & NOTES - 26.0%
Advertising & Related Services - 0.6%
$ 250,000 American Standard Inc.,
7.375%, 2/1/2008.................................. $ 227,500
250,000 Holley Performance Prods Inc., Sr. Notes,
12.25%, 9/15/2007 (a)............................. 242,500
500,000 Isle Capri Casinos Inc.,
Sr. Notes (Subord.),
8.75%, 4/15/2009.................................. 458,750
------------
928,750
------------
Automotive Equipment & Manufacturing - 1.1%
500,000 Eagle Picher Inds., Inc.,
Sr. Notes (Subord.),
9.375%, 3/1/2008.................................. 440,000
250,000 Federal Mogul Corp., Notes,
7.50%, 1/15/2009.................................. 225,559
500,000 Hayes Wheels Intl., Inc.,
Sr. Notes (Subord.), Ser. B,
9.125%, 7/15/2007................................. 468,750
500,000 Mark IV Inds., Inc.,
Sr. Notes (Subord.),
7.50%, 9/1/2007................................... 458,750
------------
1,593,059
------------
Banks - 1.4%
2,000,000 Keycorp, Notes (Subord.),
8.00%, 7/1/2004................................... 2,067,870
------------
Cable/Other Video Distribution - 0.3%
300,000 Charter Communications Holdings, Sr. Notes,
8.625%, 4/1/2009 (a).............................. 285,000
250,000 Metromedia Fiber Network, Inc., Sr. Notes,
10.00%, 11/15/2008................................ 242,500
------------
527,500
------------
Chemical & Agricultural Products - 1.0%
500,000 Huntsman ICI Chemicals, Inc., Sr. Notes (Subord.),
10.125%, 7/1/2009 (a)............................. 491,250
500,000 Polymer Group, Inc.,
Sr. Notes (Subord.), Ser. B,
9.00%, 7/1/2007................................... 473,750
500,000 Scotts Co.,
Sr. Notes (Subord.),
8.625%, 1/15/2009 (a)............................. 477,500
------------
1,442,500
------------
Diversified Companies - 0.7%
500,000 Bulong Operation Property Ltd., Sr. Notes,
12.50%, 12/15/2008................................ 507,500
500,000 Lyondell Chemical Co.,
Sr. Notes (Subord. & Exchangeable),
10.875%, 5/1/2009................................. 505,000
------------
1,012,500
------------
Electrical Equipment & Services - 1.3%
2,000,000 Sony Corp., Notes,
6.125%, 3/4/2003.................................. 1,978,738
------------
CORPORATE BOND & NOTES - continued
Energy - 0.8%
$ 500,000 AES Corp.,
Sr. Notes (Subord. & Exchangeable),
8.50%, 11/1/2007..................................... $ 458,750
500,000 Triton Energy Ltd.,
Sr. Notes,
8.75%, 4/15/2002..................................... 491,250
250,000 Western Gas Resources, Inc.,
Sr. Notes (Subord.),
10.00%, 6/15/2009 (a)................................ 256,875
------------
1,206,875
------------
Environmental Services - 0.1%
250,000 Allied Waste North America, Inc., Sr. Notes,
7.625%, 1/1/2006..................................... 225,313
------------
Finance & Insurance - 1.7%
465,000 Household Fin. Corp.,
5.125%, 6/24/2009.................................... 458,082
2,000,000 Lincoln Natl. Corp., Note,
7.00%, 3/15/2018..................................... 1,906,356
250,000 Standard Pacific Corp. New,
Sr. Notes (Subord.),
8.50%, 4/1/2009...................................... 233,750
------------
2,598,188
------------
Food & Beverage Products - 0.5%
250,000 Aurora Foods, Inc.,
Sr. Notes (Subord.),
9.875%, 2/15/2007.................................... 251,875
500,000 Chiquita Brands Intl., Inc.,
Sr. Notes,
9.625%, 1/15/2004.................................... 487,500
------------
739,375
------------
Gaming - 0.8%
250,000 Boyd Gaming Corp.,
Sr. Notes (Subord.),
9.50%, 7/15/2007..................................... 242,500
500,000 Mohegan Tribal Gaming Auth.,
Sr. Notes (Subord.),
8.75%, 1/1/2009...................................... 490,000
500,000 Station Casinos, Inc.,
Sr. Notes (Subord.),
9.75%, 4/15/2007..................................... 506,875
------------
1,239,375
------------
Household Products & Services - 0.2%
250,000 Playtex Family Prods. Corp.,
Sr. Notes (Subord.),
9.00%, 12/15/2003.................................... 249,375
------------
Iron & Steel - 0.6%
500,000 Alaska Steel Corp., Sr. Notes,
7.875%, 2/15/2009.................................... 460,000
250,000 Natl. Steel Corp., Mtge. Ser. D,
9.875%, 3/1/2009..................................... 247,500
250,000 WHX Corp., Sr. Notes,
10.50%, 4/15/2005.................................... 234,375
------------
941,875
------------
</TABLE>
63
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BOND & NOTES - continued
Lease Rental Obligations - 0.8%
$ 500,000 Budget Group, Inc.,
Sr. Notes,
9.125%, 4/1/2006................................... $ 448,750
500,000 Nationsrent, Inc.,
Sr. Notes (Subord.),
10.375%, 12/15/2008................................ 492,500
250,000 United Rentals, Inc.,
Sr. Notes,
9.25%, 1/15/2009................................... 240,625
------------
1,181,875
------------
Leisure & Tourism - 0.5%
500,000 Carmike Cinemas Inc.,
Sr. Notes (Subord.),
9.375%, 2/1/2009................................... 465,000
250,000 Hollywood Park, Inc.,
Sr. Notes, Ser. B,
9.25%, 2/15/2007................................... 242,500
------------
707,500
------------
Oil/Energy - 0.6%
500,000 Calpine Corp.,
Sr. Notes,
7.625%, 4/15/2006.................................. 476,250
250,000 Cross Timbers Oil Co.,
Sr. Notes (Subord.),
8.75%, 11/1/2009................................... 241,875
250,000 Ocean Energy Inc.,
Sr. Notes (Subord.),
8.375%, 7/1/2008................................... 242,500
------------
960,625
------------
Paper & Packaging - 1.3%
2,000,000 UPM-Kymmene Corp.,
6.875%, 11/26/2007 (a)............................. 1,904,412
------------
Printing, Publishing, Broadcasting & Entertainment -
2.8%
250,000 Ackerley Group, Inc.,
Sr. Notes (Subord.),
9.00%, 1/15/2009................................... 238,750
500,000 Big Flower Press Holdings, Inc.,
Sr. Notes (Subord.),
8.625%, 12/1/2008.................................. 487,500
500,000 Cinemark USA, Inc.,
Sr. Notes (Subord.),
9.625%, 8/1/2008................................... 430,000
250,000 Hollinger Intl.,
Sr. Notes (Subord.),
9.25%, 2/1/2006.................................... 249,375
400,000 K III Communications Corp.,
Sr. Notes,
8.50%, 2/1/2006.................................... 388,000
250,000 Sinclair Broadcast Group, Inc.,
Sr. Notes (Subord.),
10.00%, 9/30/2005.................................. 248,750
250,000 TV Guide Inc.,
Sr. Notes (Subord.),
8.125%, 3/1/2009................................... 236,875
1,820,000 Viacom, Inc.,
Sr. Notes,
7.75%, 6/1/2005.................................... 1,854,787
------------
4,134,037
------------
CORPORATE BOND & NOTES - continued
Real Estate - 0.8%
$ 250,000 Crown Castle Intl. Corp.,
Sr. Notes,
9.00%, 5/15/2011.................................... $ 235,625
500,000 HMH Property, Inc.,
Sr. Notes,
7.875%, 8/1/2008.................................... 446,250
500,000 MDC Holdings, Inc.,
Sr. Notes,
8.375%, 2/1/2008.................................... 452,500
------------
1,134,375
------------
Retailing & Wholesale - 3.1%
250,000 Ames Dept. Stores Inc.,
Sr. Notes,
10.00%, 4/15/2006................................... 242,500
2,000,000 Kroger Co.,
Sr. Notes,
6.375%, 3/1/2008.................................... 1,853,636
250,000 Michaels Stores Inc.,
Sr. Notes,
10.875%, 6/15/2006.................................. 263,750
2,000,000 Sears Roebuck & Co.,
9.375%, 11/1/2011................................... 2,305,854
------------
4,665,740
------------
Telecommunication Services & Equipment - 3.1%
250,000 Adelphia Communications Corp.,
Sr. Notes,
9.875%, 3/1/2007.................................... 255,000
250,000 Bresnan Communications Group,
Sr. Notes,
8.00%, 2/1/2009..................................... 245,625
250,000 Comcast Corp.,
9.50%, 1/15/2008.................................... 260,313
250,000 Echostar DBS Corp.,
Sr. Notes,
9.375%, 2/1/2009.................................... 248,750
250,000 Global Crossings Holdings Ltd.,
Sr. Notes,
9.625%, 5/15/2008................................... 258,750
500,000 Intermedia Communications, Inc.,
Sr. Notes (Disc.),
Ser. B (Eff. Yield 9.79%),
0.00%, 7/15/2007 (c)................................ 332,500
500,000 Jordan Telecommunication Products, Inc.,
Sr. Notes,
9.875%, 8/1/2007.................................... 480,000
1,500,000 MCI Worldcom, Inc.,
Sr. Notes,
7.75%, 4/1/2007..................................... 1,559,890
500,000 McLeod USA, Inc.,
Sr. Notes (Disc.) (Eff. Yield 9.12%),
0.00%, 3/1/2007 (c)................................. 396,250
250,000 Nextel Communications Inc.,
9.75%, 8/15/2004.................................... 253,438
500,000 Price Communications Wireless, Inc.,
Sr. Notes (Secd.),
9.125%, 12/15/2006 (a).............................. 511,250
------------
4,801,766
------------
</TABLE>
64
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BOND & NOTES - continued
Textile & Apparel - 0.3%
$ 500,000 Westpoint Stevens, Inc.,
Sr. Notes,
7.875%, 6/15/2005.................................. $ 468,750
------------
Transportation - 1.6%
500,000 Sea Containers Ltd.,
Sr. Notes,
7.875%, 2/15/2008.................................. 445,000
1,812,885 Southwest Airlines Co., Ser. A3,
8.70%, 7/1/2011.................................... 1,954,716
------------
2,399,716
------------
Total Corporate Bonds & Notes
(cost $41,010,783)................................. 39,110,089
------------
FOREIGN BONDS - (NON-US DOLLARS) - 16.2%
Banks - 2.1%
600,000 Bayerische Hypo Vereinsbank,
EUR 4.75%, 9/19/2007.................................... 615,066
500,000 HSBC Holdings PLC,
EUR 5.50%, 7/15/2009.................................... 507,525
985,000 IBRD World Bank,
NZD 7.25%, 5/27/2003.................................... 512,136
Kreditanstalt Fuer Wiederaufbau:
530,000 5.25%, 1/4/2010..................................... 553,630
EUR
383,468 5.50%, 3/12/2007.................................... 417,069
EUR
1,075,000 Oester Kontrollbank,
DEM 5.75%, 9/12/2007.................................... 596,318
------------
3,201,744
------------
Finance - 1.1%
1,000,000 DSL Fin. NV,
DEM 5.00%, 7/23/2004.................................... 551,826
2,500,000 Eksportfinans AS,
SEK 6.875%, 2/9/2004.................................... 320,243
540,000 Siemens Financier,
EUR 5.50%, 3/12/2007.................................... 578,974
60,000 Swedish Export Credit Corp.,
GBP 7.625%, 12/27/2001.................................. 100,057
------------
1,551,100
------------
Food & Beverage Products - 0.2%
2,000,000 Sara Lee Corp.,
FRF Notes,
4.625%, 3/12/2002................................... 329,401
------------
Utilities - Water - 0.1%
180,000 Vodohospodarska Vystavba,
DEM 8.00%, 7/9/2001..................................... 100,380
------------
Government - 12.7%
1,140,000 Federal Republic of Germany,
EUR 6.00%, 7/4/2007..................................... 1,280,096
France, Government of:
640,000 4.50%, 7/12/2002.................................... 688,890
EUR
914,694 5.25%, 4/25/2008.................................... 977,858
EUR
Japan, Government of:
285,000,000 1.40%, 6/22/2009.................................... 2,564,146
JPY
FOREIGN BONDS - (NON-US DOLLARS) - continued
Government - continued
320,000,000 1.50%, 1/20/2005.................................... $ 3,073,490
JPY
120,000,000 2.60%, 3/20/2019.................................... 1,141,191
JPY
3,800,000 Kingdom of Belgium,
EUR 3.75%, 3/28/2009.................................... 3,566,672
Kingdom of Denmark:
2,100,000 5.00%, 8/15/2005.................................... 298,738
DKK
4,300,000 7.00%, 11/15/2007................................... 673,802
DKK
Kingdom of Spain:
280,000 4.50%, 7/30/2004.................................... 295,412
EUR
2,000,000 5.15%, 7/30/2009.................................... 2,100,008
EUR
12,200,000 Kingdom of Sweden:
SEK 5.00%, 1/15/2004.................................... 1,470,148
4,900,000 5.00%, 1/28/2009.................................... 563,844
SEK
70,000 Mexican U.S.,
GBP 8.75%, 5/30/2002.................................... 114,462
417,477 Netherlands, Government of,
EUR 6.50%, 4/15/2003.................................... 475,655
------------
19,284,412
------------
Total Foreign Bonds - (Non-US Dollars)
(cost $24,614,062)................................. 24,467,037
------------
MORTGAGE-BACKED SECURITIES - 18.8%
FHLMC:
$ 4,402,584 6.00%, 2/1/2029..................................... 4,112,233
4,392,342 6.50%, 3/1/2029..................................... 4,220,514
4,774,849 7.00%, 6/1/2027 - 5/1/2028.......................... 4,705,470
7,415,041 7.50%, 10/1/2011 - 7/1/2028......................... 7,484,613
2,228,954 8.00%, 4/1/2027 - 5/1/2027.......................... 2,284,789
1,485,597 8.50%, 1/1/2028..................................... 1,541,738
GNMA:
1,487,874 6.00%, 5/15/2028.................................... 1,382,295
2,699,486 6.50%, 5/15/2028.................................... 2,583,624
------------
Total Mortgage-Backed Securities
(cost $29,203,593)................................. 28,315,276
------------
U.S. AGENCY OBLIGATIONS - 0.5%
425,000 FHLB,
6.875%, 6/7/2002
(cost $716,792).................................... 700,633
------------
U.S. TREASURY OBLIGATIONS - 31.5%
U.S. Treasury Bonds:
5,710,000 6.125%, 8/15/2029................................... 5,763,531
5,000,000 7.625%, 2/15/2007................................... 5,195,315
3,590,000 7.875%, 2/15/2021................................... 4,177,862
3,800,000 8.125%, 5/15/2021................................... 4,533,875
2,475,000 9.00%, 11/15/2018................................... 3,157,947
6,500,000 10.375%, 11/15/2012................................. 8,157,500
U.S. Treasury Notes:
3,000,000 5.50%, 2/28/2003.................................... 2,973,750
4,240,000 5.625%, 11/30/2000.................................. 4,247,950
</TABLE>
65
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Schedule of Investments(continued)
September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
U.S. TREASURY OBLIGATIONS - continued
$6,250,000 6.625%, 3/31/2002................................... $ 6,382,812
2,850,000 7.50%, 11/15/2001................................... 2,954,205
------------
Total U.S. Treasury Obligations
(cost $49,136,195)................................. 47,544,747
------------
YANKEE OBLIGATIONS - 3.9%
Building Products - 1.8%
2,540,000 Hanson PLC,
7.375%, 1/15/2003.................................. 2,572,766
------------
Finance & Insurance - 0.4%
100,000 Hutchison Whampoa Fin., C.I. Ltd., Notes, Ser. A
6.95%, 8/1/2007 (a)................................ 95,357
500,000 ICI Fin. Nederlands,
6.75%, 8/7/2002.................................... 494,652
------------
590,009
------------
Food & Beverage Products - 0.3%
400,000 Diageo PLC,
6.625%, 6/24/2004.................................. 398,880
------------
Oil/Energy - 0.3%
500,000 Gulf Canada Resources Ltd.,
Sr. Notes,
8.35%, 8/1/2006.................................... 488,750
------------
Paper & Packaging - 0.3%
500,000 Norampac, Inc.,
Sr. Notes,
9.50%, 2/1/2008.................................... 507,500
------------
Printing, Publishing, Broadcasting & Entertainment -
0.5%
500,000 Imax Corp.,
Sr. Notes,
7.875%, 12/1/2005.................................. 465,000
500,000 Radio E Televisao Bandeirantes,
Notes,
12.875%, 5/15/2006 (a)............................. 225,000
------------
690,000
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - continued
Telecommunication Services & Equipment - 0.2%
$ 200,000 SK Telecom Ltd.,
7.75%, 4/29/2004................................... $ 194,328
100,000 TPSA Fin. BV,
7.125%, 12/10/2003 (a)............................. 98,554
------------
292,882
------------
Government - 0.1%
100,000 Republic of Kazakhstan,
8.375%, 10/2/2002.................................. 90,600
100,000 Republic of Lithuania,
7.125%, 7/22/2002.................................. 93,350
------------
183,950
------------
Total Yankee Obligations
(cost $6,679,547).................................. 5,724,737
------------
REPURCHASE AGREEMENT - 2.0%
3,067,105 Societe Generale Repurchase Agreement 5.30%, dated
9/30/1999,
due 10/1/1999 cost $3,067,105
maturity value $3,067,557 (b)...................... 3,067,105
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $154,428,077)............................ 98.9% 148,929,624
Other Assets and
Liabilities - net.............................. 1.1 1,723,895
----- ------------
Net Assets -.................................... 100.0% $150,653,519
===== ============
</TABLE>
(a) Securities that may be resold to "qualified institutional buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under guidelines established by the Board of Trustees.
(b) Repurchase agreement is collateralized by $10,000 U.S. Treasury Notes
6.25%, due 2/15/03; value including accrued interest - $9,983 and U.S.
Treasury STRIPS, 3.625%, due 01/15/2003 with a value, including accrued in-
terest - $3,060,537.
(c) Effective yield (calculated at date of purchase) is the annual yield at
which the bond accrues until its maturity date.
Summary of Abbreviations:
DEM Deutsche Mark
DKK Danish Krone
EUR Euro Dollar
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FRF French Franc
GBP Pound Sterling
GNMA General National Mortgage Association
JPY Japanese Yen
NZD New Zealand Dollar
SEK Swedish Krone
STRIPS Separate Trading of Registered Interest and Principal of Securi-
ties
See Combined Notes to Financial Statements.
66
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Assets and Liabilities
September 30, 1999
<TABLE>
<CAPTION>
Adjustable Rate Fixed Income Income Plus
Fund Core Bond Fund Fund Fund
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Identified cost of
securities............ $56,432,202 $1,087,612,013 $807,272,107 $1,754,248,853
Net unrealized losses
on securities......... (306,319) (5,293,115) (6,377,821) (17,196,958)
- ---------------------------------------------------------------------------------------
Market value of
securities............ 56,125,883 1,082,318,898 800,894,286 1,737,051,895
Cash................... 358 580 0 0
Foreign currency, at
value (cost $0, $0, $0
and $0,
respectively)......... 0 0 0 0
Receivable for
securities sold....... 249,354 31,208,066 0 62,964,200
Receivable for Fund
shares sold........... 0 0 1,525 0
Interest and dividend
receivable............ 425,562 9,844,831 7,833,514 26,005,937
Receivable for closed
forward foreign
currency exchange
contracts............. 0 0 0 0
Prepaid expenses and
other assets.......... 0 42,295 18,105 146,033
- ---------------------------------------------------------------------------------------
Total assets........... 56,801,157 1,123,414,670 808,747,430 1,826,168,065
- ---------------------------------------------------------------------------------------
Liabilities
Distributions payable.. 271,903 5,343,134 3,083,031 9,276,837
Payable for securities
purchased............. 0 69,113,354 50,422,438 10,980,450
Payable for Fund shares
redeemed.............. 272,823 0 0 800
Payable for securities
on loan............... 0 0 151,905,405 0
Due to custodian bank.. 0 0 534,282 0
Deferred mortgage
dollar roll income.... 0 0 26,691 0
Advisory fee payable... 14,005 256,840 198,051 596,596
Distribution Plan
expenses payable...... 2,141 754 1,916 2,302
Due to other related
parties............... 0 23,615 10,190 33,539
Accrued expenses and
other liabilities..... 7,854 152,344 47,984 197,632
- ---------------------------------------------------------------------------------------
Total liabilities...... 568,726 74,890,041 206,229,988 21,088,156
- ---------------------------------------------------------------------------------------
Net assets.............. $56,232,431 $1,048,524,629 $602,517,442 $1,805,079,909
- ---------------------------------------------------------------------------------------
Net assets represented
by
Paid-in capital........ $57,364,260 $1,071,849,415 $609,330,063 $1,833,309,601
Undistributed
(overdistributed) net
investment income..... 924 (225,304) (631,290) (509,450)
Accumulated net
realized gains or
losses on securities
and foreign currency
related transactions.. (826,434) (17,806,367) 196,490 (10,523,284)
Net unrealized losses
on securities and
foreign currency
related transactions.. (306,319) (5,293,115) (6,377,821) (17,196,958)
- ---------------------------------------------------------------------------------------
Total net assets........ $56,232,431 $1,048,524,629 $602,517,442 $1,805,079,909
- ---------------------------------------------------------------------------------------
Net assets consists of
Class I................ $36,032,963 $1,042,780,552 $590,927,188 $1,794,208,965
Class IS............... 20,199,468 5,744,077 11,590,254 10,870,944
- ---------------------------------------------------------------------------------------
Total net assets........ $56,232,431 $1,048,524,629 $602,517,442 $1,805,079,909
- ---------------------------------------------------------------------------------------
Shares outstanding
Class I................ 3,768,749 103,482,282 101,554,906 331,483,317
Class IS............... 2,112,716 570,018 1,991,825 2,008,467
- ---------------------------------------------------------------------------------------
Net asset value per
share
Class I................ $ 9.56 $ 10.08 $ 5.82 $ 5.41
- ---------------------------------------------------------------------------------------
Class IS............... $ 9.56 $ 10.08 $ 5.82 $ 5.41
- ---------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
67
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Assets and Liabilities
September 30, 1999
<TABLE>
<CAPTION>
Intermediate International Limited Total Return
Bond Bond Duration Bond
Fund Fund Fund Fund
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Identified cost of
securities............ $716,814,315 $54,918,747 $313,533,153 $154,428,077
Net unrealized losses
on securities......... (7,254,468) (1,609,396) (1,413,998) (5,498,453)
- ---------------------------------------------------------------------------------
Market value of
securities............ 709,559,847 53,309,351 312,119,155 148,929,624
Cash................... 987 588,294 128 0
Foreign currency, at
value (cost $0,
290,866, $0 and 0,
respectively)......... 0 293,443 0 0
Receivable for
securities sold....... 0 0 10,575 254,444
Receivable for Fund
shares sold........... 0 0 0 0
Interest and dividend
receivable............ 11,514,638 1,168,798 3,335,973 2,290,914
Receivable for closed
forward foreign
currency exchange
contracts............. 0 161,150 0 45,321
Prepaid expenses and
other assets.......... 18,723 4,141 5,297 5,627
- ---------------------------------------------------------------------------------
Total assets........... 721,094,195 55,525,177 315,471,128 151,525,930
- ---------------------------------------------------------------------------------
Liabilities
Distributions payable.. 2,864,065 0 1,528,957 783,714
Payable for securities
purchased............. 7,495,586 0 0 0
Payable for Fund shares
redeemed.............. 0 0 0 0
Payable for Securities
on Loan............... 0 0 0 0
Due to custodian bank.. 0 0 0 519
Deferred Mortgage
Dollar Roll income.... 0 0 0 0
Advisory fee payable... 295,048 17,406 49,776 46,989
Distribution Plan
expenses payable...... 1,318 23 313 650
Due to other related
parties............... 14,051 5,319 6,177 1,920
Accrued expenses and
other liabilities..... 88,030 5,710 100,165 38,619
- ---------------------------------------------------------------------------------
Total liabilities...... 10,758,098 28,458 1,685,388 872,411
- ---------------------------------------------------------------------------------
Net assets.............. $710,336,097 $55,496,719 $313,785,740 $150,653,519
- ---------------------------------------------------------------------------------
Net assets represented
by
Paid-in capital........ $721,029,475 $56,884,028 $315,294,910 $161,675,467
Undistributed
(overdistributed) net
investment income..... 12,256 324,141 5,793 (30,350)
Accumulated net
realized losses on
securities and foreign
currency related
transactions.......... (3,451,166) (110,507) (100,965) (5,495,840)
Net unrealized losses
on securities and
foreign currency
related transactions.. (7,254,468) (1,600,943) (1,413,998) (5,495,758)
- ---------------------------------------------------------------------------------
Total net assets........ $710,336,097 $55,496,719 $313,785,740 $150,653,519
- ---------------------------------------------------------------------------------
Net assets consists of
Class I................ $704,473,534 $55,258,280 $312,156,908 $144,319,976
Class IS............... 5,862,563 238,439 1,628,832 6,333,543
- ---------------------------------------------------------------------------------
Total net assets........ $710,336,097 $55,496,719 $313,785,740 $150,653,519
- ---------------------------------------------------------------------------------
Shares outstanding
Class I................ 11,487,435 5,807,719 30,566,099 1,559,047
Class IS............... 95,597 25,094 159,494 68,419
- ---------------------------------------------------------------------------------
Net asset value per
share
Class I................ $ 61.33 $ 9.51 $ 10.21 $ 92.57
- ---------------------------------------------------------------------------------
Class IS............... $ 61.33 $ 9.50 $ 10.21 $ 92.57
- ---------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
68
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Operations
Year Ended September 30, 1999
<TABLE>
<CAPTION>
Adjustable Rate Core Bond Fixed Income Income Plus
Fund Fund (a) Fund Fund
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income
Dividend............... $ 0 $ 423,866 $ 0 $ 35,000
Interest............... 2,332,541 20,065,534 39,376,081 93,308,730
- ------------------------------------------------------------------------------------
Total investment
income................. 2,332,541 20,489,400 39,376,081 93,343,730
- ------------------------------------------------------------------------------------
Expenses
Advisory fee........... 109,172 1,341,265 3,103,125 7,268,470
Distribution Plan
expenses.............. 33,833 4,191 29,172 22,267
Transfer agent fee..... 2,867 13,353 33,225 39,458
Administrative services
fees.................. 4,875 82,328 154,082 359,786
Trustees' fees and
expenses.............. 212 5,471 17,102 36,832
Custodian fee.......... 8,134 122,541 237,554 505,235
Registration and filing
fees.................. 20,626 25,016 25,446 91,167
Printing and postage
expenses.............. 6,279 12,085 20,066 43,884
Professional fees...... 20,051 41,420 28,716 32,340
Other.................. 2,349 48,724 21,069 27,459
- ------------------------------------------------------------------------------------
Total expenses......... 208,398 1,696,394 3,669,557 8,426,898
Less: Fee credits...... (419) (38,585) (31,897) (75,249)
Fee waivers.......... (64,702) (318,098) (620,625) (1,453,694)
- ------------------------------------------------------------------------------------
Net expenses........... 143,277 1,339,711 3,017,035 6,897,955
- ------------------------------------------------------------------------------------
Net investment income.. 2,189,264 19,149,689 36,359,046 86,445,775
- ------------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities
and foreign currency
related transactions
Net realized gains or
losses on:
Securities............. (206,625) (17,915,146) 1,416,510 (9,539,387)
Foreign currency
related transactions.. 0 0 0 0
- ------------------------------------------------------------------------------------
Net realized gains or
losses on securities
and foreign currency
related transactions.. (206,625) (17,915,146) 1,416,510 (9,539,387)
- ------------------------------------------------------------------------------------
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. (203,833) 10,559,806 (33,036,101) (95,323,463)
- ------------------------------------------------------------------------------------
Net realized and
unrealized losses on
securities and foreign
currency related
transactions.......... (410,458) (7,355,340) (31,619,591) (104,862,850)
- ------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ $1,778,806 $ 11,794,349 $ 4,739,455 $ (18,417,075)
- ------------------------------------------------------------------------------------
</TABLE>
(a) For the six months ended September 30, 1999.
See Combined Notes to Financial Statements.
69
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Operations
Year Ended September 30, 1999
<TABLE>
<CAPTION>
Intermediate International Limited Total Return
Bond Bond Duration Bond
Fund Fund Fund Fund
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income
Dividend............... 0 0 0 0
Interest............... $ 37,852,704 $ 2,309,334 $ 8,534,531 $ 10,236,516
- --------------------------------------------------------------------------------
Total investment
income................. 37,852,704 2,309,334 8,534,531 10,236,516
- --------------------------------------------------------------------------------
Expenses
Advisory fee........... 4,398,704 287,115 416,391 580,306
Distribution Plan
expenses.............. 13,511 402 1,943 15,342
Transfer agent fee..... 9,919 1,414 52,676 728
Administrative services
fees.................. 182,850 11,917 33,285 35,924
Trustees' fees and
expenses.............. 15,731 958 2,905 2,814
Custodian fee.......... 236,416 53,938 49,586 46,676
Registration and filing
fees.................. 44,255 57,827 75,375 66,433
Printing and postage
expenses.............. 22,340 893 5,009 2,267
Professional fees...... 24,983 36,748 25,087 24,325
Other.................. 7,115 3,280 37,062 12,212
- --------------------------------------------------------------------------------
Total expenses......... 4,955,824 454,492 699,319 787,027
Less: Fee credits...... (42,834) (20,999) (7,417) (7,694)
Fee waivers............ (733,117) (122,058) (274,975) (53,477)
- --------------------------------------------------------------------------------
Net expenses........... 4,179,873 311,435 416,927 725,856
- --------------------------------------------------------------------------------
Net investment income.. 33,672,831 1,997,899 8,117,604 9,510,660
- --------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities
and foreign currency
related transactions
Net realized gains or
losses on:
Securities............. (3,177,212) 2,561,983 (98,199) (4,139,220)
Foreign currency
related transactions.. 0 567,365 0 346,065
- --------------------------------------------------------------------------------
Net realized gains or
losses on securities
and foreign currency
related transactions.. (3,177,212) 3,129,348 (98,199) (3,793,155)
- --------------------------------------------------------------------------------
Net change in
unrealized losses on
securities and foreign
currency related
transactions.......... (52,389,950) (3,192,115) (2,114,578) (6,893,620)
- --------------------------------------------------------------------------------
Net realized and
unrealized losses on
securities and foreign
currency related
transactions.......... (55,567,162) (62,767) (2,212,777) (10,686,775)
- --------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ $(21,894,331) $ 1,935,132 $ 5,904,827 $ (1,176,115)
- --------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
70
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statement of Operations
Year Ended March 31, 1999
<TABLE>
<CAPTION>
Core
Bond Fund (a)
- --------------------------------------------------------------------------------
<S> <C>
Investment income
Interest........................................................ $ 6,473,084
Dividend........................................................ 483,139
- --------------------------------------------------------------------------------
Total investment income.......................................... 6,956,223
- --------------------------------------------------------------------------------
Expenses
Advisory fee.................................................... 418,525
Distribution Plan expenses...................................... 4,201
Administrative services fees.................................... 98,726
Trustees' fees and expenses..................................... 8,220
Custodian fee................................................... 18,459
Registration and filing fees.................................... 6,234
Postage and Supplies............................................ 3,799
Printing and postage expenses................................... 7,441
Professional fees............................................... 15,245
Pricing Costs................................................... 15,146
Insurance Expense............................................... 3,269
Other........................................................... 4,317
- --------------------------------------------------------------------------------
Total expenses.................................................. 603,582
Less: Fee credits............................................... (18,717)
Fee waived ................................................... (23,693)
- --------------------------------------------------------------------------------
Net expenses.................................................... 561,172
- --------------------------------------------------------------------------------
Net investment income........................................... 6,395,051
- --------------------------------------------------------------------------------
Net realized and unrealized gains or losses on securities
Securities...................................................... 1,960,347
Net change in unrealized gains and losses on securities......... (1,449,745)
- --------------------------------------------------------------------------------
Net realized and unrealized gains on securities................. 510,602
- --------------------------------------------------------------------------------
Net increase in net assets resulting from operations............ $ 6,905,653
- --------------------------------------------------------------------------------
</TABLE>
(a) The above Statement of Operations is for the Tattersall Bond Fund, the ac-
counting survivor in the June 4, 1999 merger with Core Bond Fund. The Fund
changed its year end and, accordingly presents this statement of operation
to comply with financial reporting requirements.
See Combined Notes to Financial Statements.
71
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Changes in Net Assets
Period Ended September 30, 1999
<TABLE>
<CAPTION>
Adjustable Rate Core Bond Fixed Income Income Plus
Fund Fund (a) Fund Fund
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income.. $ 2,189,264 $ 19,149,689 $ 36,359,046 $ 86,445,775
Net realized gains or
losses on securities
and foreign currency
related transactions.. (206,625) (17,915,146) 1,416,510 (9,539,387)
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. (203,833) 10,559,806 (33,036,101) (95,323,463)
- ---------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 1,778,806 11,794,349 4,739,455 (18,417,075)
- ---------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class I................ (1,397,318) (18,838,531) (35,671,468) (85,924,615)
Class IS............... (793,896) (117,748) (658,927) (510,896)
Net realized gains
Class I................ 0 (144,394) 0 (12,260,419)
Class IS............... 0 (3,606) 0 (77,202)
- ---------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (2,191,214) (19,104,279) (36,330,395) (98,773,132)
- ---------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 32,420,775 83,677,773 147,719,575 233,942,078
Net asset value of
shares issued in
reinvestment of
distributions......... 1,817,776 3,931,283 7,882,569 17,855,318
Payment for shares
redeemed.............. (10,412,264) (48,148,961) (200,209,090) (314,597,134)
Net asset value of
shares issued in
acquisition of:
Common Trust Funds..... 0 312,235,534 0 610,301,298
Investment Companies... 0 592,389,300 0 0
- ---------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... 23,826,287 944,084,929 (44,606,946) 547,501,560
- ---------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... 23,413,879 936,774,999 (76,197,886) 430,311,353
Net assets
Beginning of period.... 32,818,552 111,749,630 678,715,328 1,374,768,556
- ---------------------------------------------------------------------------------------
End of period.......... $56,232,431 $1,048,524,629 $602,517,442 $1,805,079,909
- ---------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ 924 $ (225,304) $ (631,290) $ (509,450)
- ---------------------------------------------------------------------------------------
</TABLE>
(a) For the six months ended September 30, 1999.
See Combined Notes to Financial Statements.
72
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Changes in Net Assets
Year Ended September 30, 1999
<TABLE>
<CAPTION>
Intermediate International Limited Total Return
Bond Bond Duration Bond
Fund Fund Fund Fund
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income.. $ 33,672,831 $ 1,997,899 $ 8,117,604 $ 9,510,660
Net realized gains or
losses on securities
and foreign currency
related transactions.. (3,177,212) 3,129,348 (98,199) (3,793,155)
Net change in
unrealized losses on
securities and foreign
currency related
transactions.......... (52,389,950) (3,192,115) (2,114,578) (6,893,620)
- ----------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ (21,894,331) 1,935,132 5,904,827 (1,176,115)
- ----------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class I................ (33,430,318) (1,906,784) (8,066,740) (9,139,842)
Class IS............... (236,269) (5,278) (43,790) (389,292)
Net realized gains
Class I................ (9,895,453) 0 (125,867) 0
Class IS............... (67,252) 0 (1,052) 0
- ----------------------------------------------------------------------------------
Total distributions to
shareholders.......... (43,629,292) (1,912,062) (8,237,449) (9,529,134)
- ----------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 81,766,341 14,680,094 65,588,737 20,634,659
Net asset value of
shares issued in
reinvestment of
distributions......... 8,732,727 1,496,453 2,540,973 6,980,846
Payment for shares
redeemed.............. (106,674,508) (7,438,959) (65,752,963) (2,278,793)
Net asset value of
share issued in
acquisition of:
Common Trust Funds..... 40,425,308 0 242,317,183 0
- ----------------------------------------------------------------------------------
Net increase in net
assets resulting from
capital share
transactions.......... 24,249,868 8,737,588 244,693,930 25,336,712
- ----------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... (41,273,755) 8,760,658 242,361,308 14,631,463
Net assets
Beginning of period.... 751,609,852 46,736,061 71,424,432 136,022,056
- ----------------------------------------------------------------------------------
End of period.......... $ 710,336,097 $55,496,719 $313,785,740 $150,653,519
- ----------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ 12,256 $ 324,141 $ 5,793 $ (30,350)
- ----------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
73
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Changes in Net Assets
Period Ended September 30, 1998
<TABLE>
<CAPTION>
Adjustable Rate Core Bond Fixed Income Income Plus
Fund (a) Fund (c) Fund (b) Fund (b)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income.. $ 1,232,382 $ 6,395,051 $ 26,565,434 $ 62,767,885
Net realized gains or
losses on securities
and foreign currency
related transactions.. (78,229) 1,960,347 (496,271) 10,936,797
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. (188,602) (1,449,745) 18,257,417 34,820,095
- -------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ 965,551 6,905,653 44,326,580 108,524,777
- -------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class I................ (887,998) (6,248,934) (26,373,150) (62,598,276)
Class IS............... (344,384) (154,241) (192,964) (169,001)
Net realized gains
Class I................ 0 (2,212,023) 0 0
Class IS............... 0 (55,284) 0 0
- -------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (1,232,382) (8,670,482) (26,566,114) (62,767,277)
- -------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 12,620,392 18,357,060 584,709,292 1,335,192,430
Net asset value of
shares issued in
reinvestment of
distributions......... 913,798 8,385,840 2,361,028 1,853,405
Payment for shares
redeemed.............. (16,749,211) (12,547,141) (98,155,046) (170,985,567)
Net asset value of
shares issued in
acquisition of:
Investment Companies... 0 0 172,039,588 162,950,788
- -------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... (3,215,021) 14,195,759 660,954,862 1,329,011,056
- -------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... (3,481,852) 12,430,930 678,715,328 1,374,768,556
Net assets
Beginning of period.... 36,300,404 99,318,700 0 0
- -------------------------------------------------------------------------------------
End of period.......... $32,818,552 $111,749,630 $678,715,328 $1,374,768,556
- -------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ 2,876 $ 0 $ (288,591) $ (242,819)
- -------------------------------------------------------------------------------------
</TABLE>
(a) For the seven months ended September 30, 1998. The Fund changed its fiscal
year end from the last day of February to September 30, effective September
30, 1998.
(b) For the period from November 24, 1997 (commencement of operations) to Sep-
tember 30, 1998.
(c) For the year ended March 31, 1999. The above statement of changes in net
assets is for the Tattersall Bond Fund, the accounting survivor in the June
4, 1999 merger with Select Core Bond Fund.
See Combined Notes to Financial Statements.
74
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Changes in Net Assets
Period Ended September 30, 1998
<TABLE>
<CAPTION>
Intermediate International Total Return
Bond Bond Limited Duration Bond
Fund (a) Fund (b) Fund (a) Fund (c)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income.. $ 29,283,024 $ 490,222 $ 3,080,248 $ 3,611,355
Net realized gains or
losses on securities
and foreign currency
related transactions.. 9,684,239 (588,730) 184,337 (1,717,936)
Net change in
unrealized gains on
securities and foreign
currency related
transactions.......... 16,064,710 1,578,308 616,411 1,397,862
- ------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ 55,031,973 1,479,800 3,880,996 3,291,281
- ------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class I................ (29,222,895) (638,833) (3,073,999) (3,611,031)
Class IS............... (60,129) (1,692) (6,249) (324)
- ------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (29,283,024) (640,525) (3,080,248) (3,611,355)
- ------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 815,300,441 8,607,670 76,083,563 134,638,661
Net asset value of
shares issued in
reinvestment of
distributions......... 120,031 512,803 1,650,900 3,130,119
Payment for shares
redeemed.............. (89,559,569) (144,292) (40,029,773) (1,426,650)
Net asset value of
shares issued in
acquisition of
Investment Companies.. 0 0 32,918,994 0
- ------------------------------------------------------------------------------------
Net increase in net
assets resulting from
capital share
transactions.......... 725,860,903 8,976,181 70,623,684 136,342,130
- ------------------------------------------------------------------------------------
Total increase in net
assets............... 751,609,852 9,815,456 71,424,432 136,022,056
Net assets
Beginning of period.... 0 36,920,605 0 0
- ------------------------------------------------------------------------------------
End of period.......... $751,609,852 $46,736,061 $ 71,424,432 $136,022,056
- ------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ 10,524 $ (103,870) $ 5,023 $ 4,751
- ------------------------------------------------------------------------------------
</TABLE>
(a) For the period from November 24, 1997 (commencement of operations) to Sep-
tember 30, 1998.
(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.
(c) For the period from April 20, 1998 (commencement of operations) to Septem-
ber 30, 1998.
See Combined Notes to Financial Statements.
75
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Changes in Net Assets
For the periods indicated
<TABLE>
<CAPTION>
Core Bond Fund
Adjustable Rate Fund Year Ended International Bond Fund
Year Ended March 31, Year Ended
February 28, 1998 1998 (a) June 30, 1998
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations
Net investment income.. $ 3,007,633 $ 5,273,886 $ 1,771,184
Net realized gains or
losses on securities
and foreign currency
related transactions.. 297,743 1,826,210 (242,462)
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. (69,974) 2,574,722 38,713
- -------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ 3,235,402 9,674,818 1,567,435
- -------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class I................ (2,543,452) (5,189,396) (2,380,391)
Class IS............... (437,527) (99,842) (14,784)
- -------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (2,980,979) (5,289,238) (2,395,175)
- -------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 17,099,051 19,913,441 1,569,153
Net asset value of
shares issued in
reinvestment of
distributions......... 2,868,485 5,149,079 2,047,650
Payment for shares
redeemed.............. (57,749,240) (6,628,894) (640,270)
- -------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... (37,781,704) 18,433,626 2,976,533
- -------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... (37,527,281) 22,819,206 2,148,793
Net assets
Beginning of period.... 73,827,685 76,499,494 34,771,812
- -------------------------------------------------------------------------------------
End of period.......... $ 36,300,404 $99,318,700 $36,920,605
- -------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ (10,097) 0 0
- -------------------------------------------------------------------------------------
</TABLE>
(a) The Statement of Changes for the year ended March 31, 1998 is for the
Tattersall Bond Fund, the accounting survivor in the June 4, 1999 merger
with Select Core Bond Fund.
See Combined Notes to Financial Statements.
76
<PAGE>
Combined Notes to Financial Statements
1. ORGANIZATION
The Evergreen Select Fixed Income Funds consist of Evergreen Select Adjustable
Rate Fund ("Adjustable Rate Fund"), Evergreen Select Core Bond Fund ("Core Bond
Fund"), Evergreen Select Fixed Income Fund ("Fixed Income Fund"), Evergreen Se-
lect Income Plus Fund ("Income Plus Fund"), Evergreen Select Intermediate Term
Municipal Bond Fund (formerly Evergreen Select Intermediate Tax Exempt Bond
Fund) ("Intermediate Bond Fund"), Evergreen Select International Bond Fund
("International Bond Fund"), Evergreen Select Limited Duration Fund ("Limited
Duration Fund") and Evergreen Select Total Return Bond Fund ("Total Return Bond
Fund"), (collectively, the "Funds"). Each Fund is a diversified series of Ever-
green Select Fixed Income Trust (the "Trust"), a Delaware business trust orga-
nized on September 18, 1997. The Trust is an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act").
The Funds offer an Institutional Class of shares ("Class I") and an Institu-
tional Service Class of shares ("Class IS"). Each Class of shares is sold with-
out a front-end sales charge or contingent deferred sales charge. Class IS
shares pay an ongoing service fee.
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
Corporate bonds, U.S. government obligations, mortgage and other asset-backed
securities, municipal bonds and other fixed-income securities are valued at
prices provided by an independent pricing service. In determining a price for
normal institutional-size transactions, the pricing service uses methods based
on market transactions for comparable securities and analysis of various rela-
tionships between similar securities, which are generally recognized by insti-
tutional traders. Securities for which valuations are not available from an in-
dependent pricing service may be valued by brokers which use prices provided by
market makers or estimates of market value obtained from yield data relating to
investments or securities with similar characteristics. Otherwise, securities
for which valuations are not readily available from an independent pricing
service (including restricted securities) are valued at fair value as deter-
mined in good faith according to procedures established by the Board of Trust-
ees.
Securities traded on a national securities exchange or included on the Nasdaq
National Market System ("NMS") and other securities traded in the over-the-
counter market are valued at the last reported sales price on the exchange
where primarily traded. Securities traded on an exchange or NMS for which there
has been no sale and other securities traded in the over-the-counter market are
valued at the mean between the last reported bid and asked price. Securities,
for which market quotations are not readily available, including restricted se-
curities, are valued at fair value as determined in good faith according to
procedures approved by the Board of Trustees.
Mutual fund shares, held for short-term investments, are valued at the net as-
set 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
Each Fund may invest in repurchase agreements. Securities pledged as collateral
for repurchase agreements are held in a segregated account by the custodian on
the Fund's behalf. Collateral for certain tri-party repurchase agreements is
held at the counterparty's custodian in a segregated account for the benefit of
the Fund and the counterparty. Each Fund monitors the adequacy of the collat-
eral daily and will require the seller to provide additional collateral in the
event the market value of the securities pledged falls below the carrying
77
<PAGE>
Combined Notes to Financial Statements (continued)
value of the repurchase agreement, including accrued interest. Each Fund will
only enter into repurchase agreements with banks and other financial institu-
tions, 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 Adjustable Rate Fund, along with certain other funds managed by Ever-
green Investment Management Company ("EIMC"), a subsidiary of First Union Na-
tional Bank ("FUNB"), may transfer uninvested cash balances into a joint trad-
ing account. These balances are invested in one or more repurchase agreements
that are fully collateralized by U.S. Treasury and/or federal agency obliga-
tions.
C. Reverse Repurchase Agreements
To obtain short-term financing, the Funds may enter into reverse repurchase
agreements with qualified third-party broker-dealers. Interest on the value of
reverse repurchase agreements is based upon competitive market rates at the
time of issuance. At the time the Fund enters into a reverse repurchase agree-
ment, it will establish and maintain a segregated account with the custodian
containing qualifying assets having a value not less than the repurchase price,
including accrued interest. If the counterparty to the transaction is rendered
insolvent, the ultimate realization of the securities to be repurchased by the
Fund may be delayed or limited.
D. 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 gain (loss) resulting from changes in foreign cur-
rency exchange rates is a component of net unrealized gains or losses on secu-
rities and foreign currency related transactions. Net realized foreign currency
gain or loss on foreign currency related transactions includes foreign currency
gains and losses between trade date and settlement date on investment securi-
ties transactions, foreign currency related transactions and the difference be-
tween the amounts of interest and dividends recorded 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 included in realized gain or loss
on securities.
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 foreign currency assets or liabili-
ties. Forward contracts are recorded at the forward rate and marked-to-market
daily. Realized gains and losses arising from such transactions are included in
net realized 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 con-
tracts involve elements of market risk in excess of the amount reflected in the
statement of assets and liabilities.
F. When-issued and Delayed Delivery Transactions
The Funds record when-issued or delayed delivery transactions on the trade date
and will segregate with the custodian qualifying assets having a value suffi-
cient to make payment for the securities purchased. Securities purchased on a
when-issued or delayed delivery basis are marked-to-market daily and the Fund
begins earning interest on the settlement date. Losses may arise due to changes
in the market value of the underlying securities or if the counterparty does
not perform under the contract.
G. Securities Lending
In order to generate income and to offset expenses, the Funds may lend portfo-
lio securities to brokers, dealers and other financial organizations. A Fund's
investment adviser will monitor the creditworthiness of such borrowers. Loans
of securities may not exceed 33 1/3% of a Fund's total assets and will be col-
lateralized by cash, letters of credit or U.S. Government securities that are
maintained at all times in an amount equal to at least
78
<PAGE>
Combined Notes to Financial Statements (continued)
100% of the current market value of the loaned securities, including accrued
interest. The Fund monitors the adequacy of the collateral daily and will re-
quire the borrower to provide additional collateral in the event the value of
the collateral falls below 100% of the market value of the securities on loan.
While such securities are on loan, the borrower will pay a Fund any income ac-
cruing thereon, and the Fund may invest any cash collateral received in portfo-
lio securities, thereby increasing its return. A Fund will have the right to
call any such loan and obtain the securities loaned at any time on five days'
notice. Any gain or loss in the market price of the loaned securities, which
occurs during the term of the loan, would affect a Fund and its investors. A
Fund may pay fees in connection with such loans.
H. Dollar Rolls Transactions
The Funds may engage in dollar roll transactions with respect to mortgage-
backed securities issued by GNMA, FNMA and FHLMC. In a dollar roll transaction,
a Fund sells a mortgage-backed security to a financial institution, such as a
bank or broker/dealer and simultaneously agrees to repurchase a substantially
similar (i.e. same type, coupon and maturity) security from the institution at
a later date at an agreed upon price. The mortgage-backed securities that are
repurchased will bear the same interest rate as those sold, but generally will
be collateralized by different pools of mortgages with different prepayment
histories.
I. 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. Foreign income and capital gains re-
alized on some foreign securities may be subject to foreign taxes, which are
accrued as applicable.
J. Federal Taxes
The Funds have qualified and intend to continue to qualify as regulated invest-
ment companies under the Internal Revenue Code of 1986, as amended (the
"Code"). Thus, the Funds will not incur any federal income tax liability since
they are expected to distribute all of their net investment company taxable in-
come, net tax-exempt income and net capital gains, if any, to their sharehold-
ers. The Funds also intend to avoid any excise tax liability by making the re-
quired distributions under the Code. Accordingly, no provision for federal
taxes is required. To the extent that realized capital gains can be offset by
capital loss carryforwards, it is each Fund's policy not to distribute such
gains.
K. Distributions
Distributions from net investment income for each Fund, except International
Bond Fund, are declared daily and paid monthly. Distributions from net invest-
ment income for the International Bond Fund are declared and paid quarterly.
Distributions from net realized capital gains, if any, are paid at least annu-
ally. 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. The significant differences between financial statement
amounts available for distributions and distributions made in accordance with
income tax regulations are primarily due to differing treatment for mortgage
paydown gains or losses, net realized foreign currency gains or losses and cer-
tain realized loss on securities that have been subsequently repurchased.
L. Class Allocations
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses are prorated among the classes based on the rela-
tive net assets of each class. Currently, class specific expenses are limited
to expenses incurred under the Distribution Plans for Class IS.
M. Organization Expenses
Organization expenses for International Bond 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 ex-
79
<PAGE>
Combined Notes to Financial Statements (continued)
penses in the same proportion as the number of initial shares being redeemed
bears to the number of initial shares outstanding at the time of the redemp-
tion. Organization expenses for International Bond Fund have been fully amor-
tized as of September 30, 1999.
3. INVESTMENT ADVISORY AGREEMENT AND OTHER AFFILIATED TRANSACTIONS
EIMC is the investment advisor for Adjustable Rate Fund. In return for provid-
ing investment advisory and administrative services to the Fund, the Fund pays
EIMC an advisory fee that is calculated daily and paid monthly. The advisory
fee is computed at an annual rate of 0.30% of the average daily net assets of
the Fund for the year ended September 30, 1999.
Effective June 4, 1999, Tattersall Advisory Group ("TAG"), a subsidiary of
FUNB, became the investment advisor of Core Bond Fund. In return for its serv-
ices, the Fund pays TAG an advisory fee that is calculated daily and paid
monthly at an annual rate of 0.40% of the Fund's average daily net assets.
Prior to June 4, 1999, FUNB was the investment advisor to the Fund and earned
the same investment advisory fee. For the six months ended September 30, 1999,
TAG, and FUNB voluntarily waived $318,098 of their advisory fee, representing
0.09% (annualized) of the Funds average daily net assets. For the year ended
March 31, 1999, TAG voluntarily waived $23,693 of their advisory fee, repre-
senting 0.04% of the Funds average daily net assets.
FUNB, a subsidiary of First Union, serves as the investment advisor to Fixed
Income Fund, Income Plus Fund, Intermediate Bond Fund, Limited Duration Fund
and Total Return Bond Fund. In return for providing investment advisory serv-
ices to the Funds, each Fund pays FUNB an advisory fee that is calculated daily
and paid monthly based on the following percentages of each Fund's average
daily net assets:
<TABLE>
<CAPTION>
Annual
Advisory Fee
------------
<S> <C>
Fixed Income Fund................................... 0.50%
Income Plus Fund.................................... 0.50%
Intermediate Bond Fund.............................. 0.60%
Limited Duration Fund............................... 0.30%
Total Return Bond Fund.............................. 0.40%
</TABLE>
First International Advisors, Ltd. ("First International"), a subsidiary of
First Union Corporation ("First Union"), is the investment advisor for the In-
ternational Bond Fund. First International is paid an advisory fee that is cal-
culated daily and paid monthly. The advisory fee is computed at an annual rate
of 0.60% of the average daily net assets of the Fund.
During the year ended September 30, 1999, the amount of investment advisory
fees waived by each investment advisor and the impact on each Fund's expense
ratio represented as a percentage of its average net assets were as follows:
<TABLE>
<CAPTION>
Fees % of Average
Waived daily net assets
------------------------
<S> <C> <C>
Adjustable Rate Fund................ $ 64,702 .18%
Fixed Income Fund................... 620,625 .10%
Income Plus Fund.................... 1,453,694 .10%
Intermediate Bond Fund.............. 733,117 .10%
International Bond Fund............. 122,058 .26%
Limited Duration Fund............... 274,975 .20%
Total Return Bond Fund.............. 53,477 .04%
</TABLE>
First International and EIMC serve as sub-investment advisors to the Total Re-
turn Bond Fund. These services are being provided at no additional cost to the
Fund. FUNB is responsible for the supervision and payment of fees to First In-
ternational and EIMC.
Evergreen Investment Services ("EIS"), a subsidiary of First Union, serves as
the administrator and The BISYS Group, Inc. ("BISYS") serves as the sub-admin-
istrator to the Funds. As administrator, EIS provides the Funds with facili-
ties, equipment and personnel. As sub-administrator to the Funds, BISYS pro-
vides the officers of the Funds. Officers of the Funds and affiliated Trustees
receive no compensation directly from the Funds.
The administrator and sub-administrator for each Fund, other than Adjustable
Rate Fund, are entitled to an annual fee based on the average daily net assets
of the funds administered by EIS for which First Union or
80
<PAGE>
Combined Notes to Financial Statements (continued)
its investment advisory subsidiaries are also the investment advisors. The ad-
ministration fee is calculated by applying percentage rates, which start at
0.05% and decline to 0.01% per annum as net assets increase, to the average
daily net assets of each Fund. The sub-administration fee is calculated by ap-
plying percentage rates, which start at 0.01% and decline to 0.004% per annum
as net assets increase, to the average daily net assets of each Fund.
During the year ended September 30, 1999, the Funds, other than Adjustable Rate
Fund, paid or accrued the following amounts for administrative and sub-adminis-
trative services:
<TABLE>
<CAPTION>
Administration Sub-administration
Fee Fee
-----------------------------
<S> <C> <C>
Core Bond Fund................ $ 82,328 $ 0
Fixed Income Fund............. 122,160 31,922
Income Plus Fund.............. 285,349 74,437
Intermediate Bond Fund........ 145,164 37,686
International Bond Fund....... 9,459 2,458
Limited Duration Fund......... 26,289 6,996
Total Return Bond Fund........ 28,473 7,451
</TABLE>
During the year ended September 30, 1999, the Adjustable Rate Fund reimbursed
EIMC $4,875 for providing certain administration and accounting expenses.
Evergreen Service Company ("ESC"), an indirectly, wholly owned subsidiary of
First Union, serves as 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 Class IS shares. 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". Class IS currently pays a service
fee equal to 0.25% of the average daily net assets of the class. Distribution
Plan expenses are calculated daily and paid at least quarterly.
Each of the Distribution Plans may be terminated at any time by vote of the In-
dependent Trustees or by vote of a majority of the outstanding voting shares of
the respective class.
5. ACQUISITIONS
On June 25, 1999 several of the Funds acquired the net assets of various common
trust funds managed by FUNB. These acquisitions were accomplished through tax-
able or tax-free exchanges of Class I shares of each Fund. The value of total
shares issued, net assets acquired and unrealized appreciation (depreciation)
of each Fund were as follows:
<TABLE>
<CAPTION>
Total Total Unrealized
Shares Net Assets Appreciation
Acquiring Fund Common Trust Fund Acquired Issued Acquired (Depreciation)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Core Bond Fund CoreFund Charitable Fixed Income Trust 10,632,584 $106,874,434 $ (2,608,935)
CoreFund Bond Fund 20,219,688 203,240,383 --
Signet Premium Income Fund 210,985 2,120,717 (32,764)
----------- ------------ ------------
31,063,257 312,235,534 (2,641,699)
Income Plus Fund CoreFund Fixed Income Fund 45,904,652 248,651,717 (5,968,898)
CoreFund Bond Trust 66,765,388 361,649,581 (6,978,079)
----------- ------------ ------------
112,670,040 610,301,298 (12,946,977)
Intermediate Bond Fund CoreFund Delaware Municipal Bond Fund 644,587 40,425,308 304,901
----------- ------------ ------------
Limited Duration Fund CoreFund Intermediate Bond Trust 10,728,927 109,605,697 (334,385)
CoreFund Intermediate Fund 4,178,636 42,688,717 (21,833)
CoreFund Intermediate Bond Fund 8,812,023 90,022,769 --
----------- ------------ ------------
23,719,586 242,317,183 (356,218)
</TABLE>
81
<PAGE>
Combined Notes to Financial Statements (continued)
On June 4, 1999, Core Bond Fund acquired all of the net assets and certain lia-
bilities of the Tattersall Bond Fund ("Tattersall") an open-end, management in-
vestment company registered under the 1940 Act, through a tax-free exchange of
Class I and Class IS shares. The acquired net assets consisted primarily of
portfolio securities with unrealized depreciation of $1,251,269. The aggregate
net assets of Tattersall and Core Bond Fund immediately before the acquisition
were $109,122,148 and $592,389,300, respectively. The aggregate net assets of
Core Bond Fund after the acquisition were $701,511,448. Since TAG was expected
to be the investment adviser to Core Bond Fund, after the acquisition, and that
Core Bond Fund would be managed in accordance with Tattersall's investment ob-
jective and policies, it was determined that Tattersall was the accounting and
performance survivor of this reorganization and as such its basis of accounting
for assets and liabilities and its operating results for prior periods are car-
ried forward. Tattersall changed its fiscal year from March 31 to September 30,
effective September 30, 1999.
On July 27, 1998, Fixed Income Fund acquired substantially all the assets and
assumed certain liabilities of CoreFund Short Intermediate Fund in exchange for
Class I and Class IS shares of Fixed Income Fund.
On July 27, 1998, Income Plus Fund acquired substantially all the assets and
assumed certain liabilities of CoreFund Bond Fund in exchange for Class I and
Class IS shares of Income Plus Fund.
On July 27, 1998, Limited Duration Fund acquired substantially all the assets
and assumed certain liabilities of CoreFund Short Term Income Fund, in an ex-
change for Class I and Class IS shares of Limited Duration Fund.
These acquisitions were accomplished by a tax-free exchange of the respective
shares of each Fund. The value of net assets acquired, number of shares issued,
unrealized appreciation acquired and the aggregate net assets of each Fund im-
mediately after the acquisition were as follows:
<TABLE>
<CAPTION>
Net Assets
Value of Net Number of Unrealized After
Acquiring Fund Acquired Fund Assets Acquired Shares Issued Appreciation Acquisition
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fixed Income Fund....... CoreFund Short Intermediate Bond Fund $172,039,588 28,782,616 $1,206,249 $ 672,078,330
Income Plus Fund........ CoreFund Bond Fund $162,950,788 28,298,931 $3,357,731 $1,341,154,434
Limited Duration Fund... CoreFund Short Term Income Fund $ 32,918,994 3,162,720 $ 82,968 $ 86,669,648
</TABLE>
Effective on the close of business August 28, 1998, the International Bond Fund
acquired all of the assets and certain liabilities of the CoreFund Global Bond
Fund (the "CoreFund") through a tax-free exchange of shares. Shareholders of
Class A and Class Y shares of the CoreFund became owners of that number of full
and fractional shares of Class IS and Class I, respectively, of the Interna-
tional Bond Fund having an aggregate net asset value equal to the aggregate net
asset value of their shares of the CoreFund immediately prior to the close of
business on August 28, 1998. The financial statements of the International Bond
Fund reflect the historical financial results of the CoreFund prior to the re-
organization. Additionally, the fiscal year end of the CoreFund for financial
reporting and tax purposes was changed to coincide with that of the Trust.
82
<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 I and Class IS. Transactions in shares of the Funds were as
follows:
Adjustable Rate Fund
<TABLE>
<CAPTION>
Year Ended September 30,
------------------------------------------------ Year Ended February 28,
1999 1998 (a) 1998
---------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I
Shares sold............. 1,602,911 $15,347,739 694,346 $ 6,750,376 756,542 $ 7,370,775
Shares issued in
reinvestment of
distributions.......... 125,051 1,199,107 76,201 739,024 254,776 2,481,417
Shares redeemed......... (354,414) (3,423,816) (1,040,259) (10,108,386) (5,579,904) (54,382,797)
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease)............. 1,373,548 13,123,030 (269,712) (2,618,986) (4,568,586) (44,530,605)
- ----------------------------------------------------------------------------------------------------
Class IS
Shares sold............. 1,780,289 17,073,036 603,561 5,870,016 996,337 9,728,276
Shares issued in
reinvestment of
distributions.......... 64,525 618,669 18,011 174,774 39,661 387,068
Shares redeemed......... (728,144) (6,988,448) (683,194) (6,640,825) (344,863) (3,366,443)
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease)............. 1,116,670 10,703,257 (61,622) (596,035) 691,135 6,748,901
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease)............. $23,826,287 $ (3,215,021) $(37,781,704)
- ----------------------------------------------------------------------------------------------------
</TABLE>
(a)For the seven months ended September 30, 1998.
Core Bond Fund
<TABLE>
<CAPTION>
Year Ended September Year Ended March 31,
30, ------------------------------------------------
1999 (b) 1999 (c) 1998 (c)
------------------------ ------------------------ ----------------------
Shares Amount Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I
Shares sold............. 7,983,350 $ 81,433,457 1,686,530 $ 17,978,857 1,486,107 $15,597,164
Shares issued in
reinvestment of
distributions.......... 378,980 3,856,401 768,493 8,176,315 485,057 5,049,237
Shares redeemed......... (4,611,016) (46,750,534) (1,092,498) (11,649,216) (499,442) (5,227,155)
Shares issued in
acquisition of:
Common Trust Funds .... 31,063,256 312,235,534 0 0 0 0
Investment Companies... 58,366,376 590,194,768 0 0 0 0
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease)............. 93,180,946 940,969,626 1,362,525 14,505,956 1,471,722 15,419,246
- ----------------------------------------------------------------------------------------------------
Class IS
Shares sold............. 223,070 2,244,316 35,245 378,203 413,428 4,316,277
Shares issued in
reinvestment of
distributions.......... 7,336 74,882 19,694 209,525 9,483 99,842
Shares redeemed......... (138,270) (1,398,427) (84,097) (897,925) (131,813) (1,401,739)
Shares issued in
acquisition of:
Investment Companies... 222,949 2,194,532 0 0 0 0
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease)............. 315,085 3,115,303 (29,158) (310,197) 291,098 3,014,380
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease)............. $944,084,929 $ 14,195,759 $18,433,626
- ----------------------------------------------------------------------------------------------------
</TABLE>
(b) For the six months ended September 30, 1999.
(c) The above capital share activity is that of Tattersall Bond Fund, the ac-
counting survivor in the June 4, 1999 merger with Core Bond Fund. The num-
ber of shares for each transaction type have been restated to give effect
for this transaction.
83
<PAGE>
Combined Notes to Financial Statements (continued)
Fixed Income Fund
<TABLE>
<CAPTION>
Year Ended September 30,
-----------------------------------------------------
1999 1998 (a)
-------------------------- -------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............. 22,718,254 $ 134,684,835 96,306,245 $574,168,788
Shares issued in
reinvestment of
distributions.......... 1,260,239 7,507,425 367,945 2,225,816
Shares redeemed......... (31,679,032) (189,162,288) (15,780,546) (94,528,967)
Shares issued in
acquisition of
Investment Companies... 0 0 28,361,801 169,524,345
- -------------------------------------------------------------------------------
Net increase
(decrease)............. (7,700,539) (46,970,028) 109,255,445 651,389,982
- -------------------------------------------------------------------------------
Class IS
Shares sold............. 2,187,052 13,034,740 1,763,400 10,540,504
Shares issued in
reinvestment of
distributions.......... 63,140 375,144 22,476 135,212
Shares redeemed......... (1,860,394) (11,046,802) (604,664) (3,626,079)
Shares issued in
acquisition of
Investment Companies... 0 0 420,815 2,515,243
- -------------------------------------------------------------------------------
Net increase............ 389,798 2,363,082 1,602,027 9,564,880
- -------------------------------------------------------------------------------
Net increase
(decrease)............. $ (44,606,946) $660,954,862
- -------------------------------------------------------------------------------
</TABLE>
Income Plus Fund
<TABLE>
<CAPTION>
Year Ended September 30,
-------------------------------------------------------
1999 1998 (b)
-------------------------- ---------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............. 38,979,040 $ 218,566,129 231,167,025 $1,322,240,227
Shares issued in
reinvestment of
distributions.......... 3,076,886 17,501,272 300,191 1,753,774
Shares redeemed......... (54,255,598) (302,962,132) (28,469,435) (163,795,977)
Shares issued in
acquisition of:
Common Trust Funds..... 112,670,040 610,301,298 0 0
Investment Companies... 0 0 28,015,168 161,316,824
- ---------------------------------------------------------------------------------
Net increase............ 100,470,368 543,406,567 231,012,949 1,321,514,848
- ---------------------------------------------------------------------------------
Class IS
Shares sold............. 2,754,186 15,375,949 2,219,376 12,952,203
Shares issued in
reinvestment of
distributions.......... 62,835 354,046 17,172 99,631
Shares redeemed......... (2,080,768) (11,635,002) (1,248,097) (7,189,590)
Shares issued in
acquisition of
Investment Companies... 0 0 283,763 1,633,964
- ---------------------------------------------------------------------------------
Net increase............ 736,253 4,094,993 1,272,214 7,496,208
- ---------------------------------------------------------------------------------
Net increase............ $ 547,501,560 $1,329,011,056
- ---------------------------------------------------------------------------------
</TABLE>
Intermediate Bond Fund
<TABLE>
<CAPTION>
Year Ended September 30,
--------------------------------------------------
1999 1998 (b)
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............... 1,116,432 $ 71,950,904 12,457,190 $808,447,293
Shares issued in
reinvestment of
distributions............ 131,074 8,571,865 1,174 77,276
Shares redeemed........... (1,534,043) (98,321,050) (1,328,980) (87,315,146)
Shares issued in
acquisition of Common
Trust Funds.............. 644,588 40,425,308 0 0
- ------------------------------------------------------------------------------
Net increase.............. 358,051 22,627,027 11,129,384 721,209,423
- ------------------------------------------------------------------------------
Class IS
Shares sold............... 151,491 9,815,437 104,141 6,853,148
Shares issued in
reinvestment of
distributions............ 2,481 160,862 647 42,755
Shares redeemed........... (128,949) (8,353,458) (34,214) (2,244,423)
- ------------------------------------------------------------------------------
Net increase.............. 25,023 1,622,841 70,574 4,651,480
- ------------------------------------------------------------------------------
Net increase.............. $ 24,249,868 $725,860,903
- ------------------------------------------------------------------------------
</TABLE>
(a) For the period from November 24, 1997 and March 9, 1998 (Commencement of
Class Operations), respectively, for Class I and Class IS.
(b) For the period from November 24, 1997 and March 2, 1998 (Commencement of
Class Operations), respectively, for Class I and Class IS.
84
<PAGE>
Combined Notes to Financial Statements (continued)
International Bond Fund
<TABLE>
<CAPTION>
Period Ended September 30, Year Ended June
------------------------------------------- 30,
1999 1998 (C) 1998
---------------------- ------------------- -------------------
Shares Amount Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I
Shares sold............. 1,537,729 $14,497,718 906,343 $8,607,462 157,657 $1,499,070
Shares issued in
reinvestment of
distributions.......... 157,821 1,491,568 53,689 511,122 216,504 2,032,922
Shares redeemed......... (781,161) (7,361,053) (7,356) (70,319) (60,566) (577,276)
- ------------------------------------------------------------------------------------------
Net increase............ 914,389 8,628,233 952,676 9,048,265 313,595 2,954,716
- ------------------------------------------------------------------------------------------
Class IS
Shares sold............. 19,285 182,376 22 208 7,353 70,083
Shares issued in
reinvestment of
distributions.......... 517 4,885 177 1,681 1,571 14,728
Shares redeemed......... (8,315) (77,906) (7,900) (73,973) (6,711) (62,994)
- ------------------------------------------------------------------------------------------
Net increase
(decrease)............. 11,487 109,355 (7,701) (72,084) 2,213 21,817
- ------------------------------------------------------------------------------------------
Net increase............ $ 8,737,588 $8,976,181 $2,976,533
- ------------------------------------------------------------------------------------------
</TABLE>
(CFor)the three months ended September 30, 1998.
Limited Duration Fund
<TABLE>
<CAPTION>
Year Ended September 30,
--------------------------------------------------
1999 1998 (a)
------------------------ ------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............... 6,242,085 $ 64,355,655 7,297,523 $ 76,033,178
Shares issued in
reinvestment of
distributions............ 242,535 2,506,847 157,603 1,644,655
Shares redeemed........... (6,370,003) (65,521,557) (3,832,975) (40,029,735)
Shares issued in
acquisition of:
Common Trust Funds....... 23,719,586 242,317,183 0 0
Investment Companies..... 0 0 3,109,745 32,367,615
- -------------------------------------------------------------------------------
Net increase.............. 23,834,203 243,658,128 6,731,896 70,015,713
- -------------------------------------------------------------------------------
Class IS
Shares sold............... 120,212 1,233,082 4,835 50,385
Shares issued in
reinvestment of
distributions............ 3,301 34,126 596 6,245
Shares redeemed........... (22,421) (231,406) (4) (38)
Shares issued in
acquisition of Investment
Companies................ 0 0 52,975 551,379
- -------------------------------------------------------------------------------
Net increase.............. 101,092 1,035,802 58,402 607,971
- -------------------------------------------------------------------------------
Net increase.............. $244,693,930 $ 70,623,684
- -------------------------------------------------------------------------------
</TABLE>
Total Return Bond Fund
<TABLE>
<CAPTION>
Year Ended September 30,
---------------------------------------------
1999 1998 (b)
-------------------- -----------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold.................... 142,731 $13,614,331 1,346,358 $134,570,252
Shares issued in reinvestment
of distributions.............. 69,113 6,624,642 31,423 3,130,119
Shares redeemed................ (16,673) (1,589,530) (13,905) (1,381,981)
- ------------------------------------------------------------------------------
Net increase................... 195,171 18,649,443 1,363,876 136,318,390
- ------------------------------------------------------------------------------
Class IS
Shares sold.................... 71,687 7,020,328 689 68,409
Shares issued in reinvestment
of distributions.............. 3,718 356,204 0 0
Shares redeemed................ (7,223) (689,263) (452) (44,669)
- ------------------------------------------------------------------------------
Net increase................... 68,182 6,687,269 237 23,740
- ------------------------------------------------------------------------------
Net increase................... $25,336,712 $136,342,130
- ------------------------------------------------------------------------------
</TABLE>
(a) For the period from November 24, 1997 and July 28, 1998 (Commencement of
Class Operations), respectively, for Class I and Class IS.
(b) For the period from April 20, 1998 and August 3, 1998 (Commencement of
Class Operations), respectively, for Class I and Class IS.
85
<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, 1999:
<TABLE>
<CAPTION>
Cost of Purchases Proceeds from Sales
----------------------------------- -----------------------------------
U.S. Government Non-U.S. Government U.S. Government Non-U.S. Government
----------------------------------------------------------------
<S> <C> <C> <C> <C>
Adjustable Rate Fund.... $ 35,453,185 $ 0 $ 5,096,332 $ 0
Core Bond Fund (1)...... 1,293,091,277 523,325,041 1,158,622,067 191,049,007
Fixed Income Fund....... 294,751,656 120,422,920 272,348,781 113,076,452
Income Plus Fund........ 957,337,338 597,526,861 591,035,849 390,947,208
Intermediate Bond Fund.. 0 686,498,652 0 684,533,413
International Bond
Fund................... 0 82,348,371 0 73,307,928
Limited Duration Fund... 183,032,998 240,738,255 154,894,794 46,090,277
Total Return Bond Fund.. 114,311,915 106,988,781 93,462,285 99,458,707
</TABLE>
- -------
(1) For the six months ended September 30, 1999
The Fixed Income Fund loaned securities during the year ended September 30,
1999 to certain brokers who paid the Fund a negotiated lenders' fee. These fees
are included in interest income. At September 30, 1999, the value of securities
on loan and the value of collateral amounted to $146,685,998 and $151,906,686
respectively. During the year ended September 30, 1999, the Fixed Income Fund
earned $812,210 in income from securities lending.
On September 30, 1999, 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>
Adjustable Rate Fund.... $ 56,447,352 $ 62,762 $ (384,231) $ (321,469)
Core Bond Fund.......... 1,088,015,717 3,590,713 (9,287,532) (5,696,819)
Fixed Income Fund....... 807,067,519 3,405,430 (9,578,663) (6,173,233)
Income Plus Fund........ 1,754,816,259 20,630,190 (38,394,554) (17,764,364)
Intermediate Bond Fund.. 716,814,315 8,297,328 (15,551,796) (7,254,468)
International Bond
Fund................... 54,918,747 460,462 (2,069,858) (1,609,396)
Limited Duration Fund... 313,533,153 284,177 (1,698,175) (1,413,998)
Total Return Bond Fund.. 154,428,077 474,750 (5,973,203) (5,498,453)
</TABLE>
As of September 30, 1999, the Funds had capital loss carryovers for federal in-
come tax purposes as follows:
<TABLE>
<CAPTION>
Capital Loss Expiration
Carryover 2000 2001 2003 2006 2007
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Adjustable Rate Fund.... $ (634,495) $(198,013) $(280,866) $(43,378) $ (80,791) $ (31,447)
Core Bond Fund.......... (336,338) 0 0 0 (336,338) 0
Fixed Income Fund....... (10,509) 0 0 (10,509) 0 0
International Bond
Fund................... (271,657) 0 0 0 (271,657) 0
Limited Duration Fund... (975) 0 0 0 0 (975)
Total Return Bond Fund.. (3,056,179) 0 0 0 0 (3,056,179)
</TABLE>
Core Bond Fund's capital loss carryforward was created as a result of the June
4, 1999 acquisition of substantially all of the assets and assumption of cer-
tain liabilities of the Tattersall Bond Fund in exchange for Core Bond Fund
shares. In accordance with income tax regulations, certain Core Bond Fund gains
may not be used to offset this capital loss carryforward.
86
<PAGE>
Combined Notes to Financial Statements (continued)
In addition to capital loss carryovers, net capital losses incurred after Octo-
ber 31, 1998 through the end of the fiscal year may be deemed to have occurred
on the first day of the following fiscal year for tax purposes. The Funds have
incurred and have elected to defer such post-October losses as follows:
<TABLE>
<CAPTION>
Amount
----------
<S> <C>
Adjustable Rate Fund................................ (169,177)
Core Bond Fund...................................... (17,066,325)
Income Plus Fund.................................... (9,955,878)
Intermediate Bond Fund.............................. (3,451,166)
Limited Duration Fund............................... (99,990)
Total Return Bond Fund.............................. (2,484,982)
</TABLE>
9. EXPENSE OFFSET ARRANGEMENTS
The Funds have entered into expense offset arrangements with ESC and their cus-
todian whereby credits realized as a result of uninvested cash balances were
used to reduce a portion of each Fund's related expenses. The assets deposited
with ESC and the custodian under these expense offset arrangements could have
been invested in income-producing assets. The amount of fee credits received by
each Fund and the impact on each Fund's expense ratio represented as a percent-
age of its average net assets were as follows:
<TABLE>
<CAPTION>
Total
Fee Credits % of Average
Received Net Assets
-----------------------
<S> <C> <C>
Adjustable Rate Fund................... $ 419 .00%
Core Bond Fund......................... $38,585 .00%
Fixed Income Fund...................... $31,897 .01%
Income Plus Fund....................... $75,249 .01%
Intermediate Bond Fund................. $42,834 .01%
International Bond Fund................ $20,999 .04%
Limited Duration Fund.................. $ 7,417 .01%
Total Return Bond Fund................. $ 7,694 .01%
</TABLE>
10. 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. Trustees will be paid either in one lump sum or in quarterly install-
ments for up to ten years at their election, not earlier than either the year
in which the Trustee ceases to be a member of the Board of Trustees or January
1, 2000.
11. FINANCING AGREEMENTS
Certain Evergreen Funds and State Street Bank and Trust Company ("State
Street") and a group of banks (collectively, the "Banks") entered into a fi-
nancing agreement dated December 22, 1997, as amended on November 20, 1998. Un-
der this agreement, the Banks provided an unsecured credit facility in the ag-
gregate amount of $400 million ($275 million committed and $125 million uncom-
mitted). The credit facility was allocated, under the terms of the financing
agreement, among the Banks. The credit facility was accessed by the Funds for
temporary or emergency purposes only and was subject to each Fund's borrowing
restrictions. Borrowings under this facility bore interest at 0.50% per annum
above the Federal Funds rate. A commitment fee of 0.065% per annum will be in-
curred on the unused portion of the committed facility, which was allocated to
all funds. For its assistance in arranging this financing agreement, the Capi-
tal Market Group of First Union was paid a one-time arrangement fee of $27,500.
State Street served as administrative agent for the Banks, and as administra-
tive agent was entitled to a fee of $20,000 per annum which was allocated to
all of the funds.
This agreement was amended and renewed on December 22, 1998. The amended fi-
nancing agreement became effective on December 22, 1998 among all of the Ever-
green Funds, State Street and The Bank of New York ("BONY"). Under this agree-
ment, State Street and BONY provided an unsecured credit facility in the
87
<PAGE>
Combined Notes to Financial Statements (continued)
aggregate amount of $150 million ($125 million committed and $25 million uncom-
mitted). The remaining terms and conditions of the agreement were unaffected.
This agreement was terminated on July 27, 1999.
On July 27, 1999, all of the Evergreen Funds and a group of banks (the "Lend-
ers") entered into credit agreement. Under this agreement, the Lenders provide
an unsecured revolving credit commitment in the aggregate amount of $1.050 bil-
lion. The credit facility is allocated, under the terms of the financing agree-
ment, among the Lenders. The credit facility is accessed by the Funds for tem-
porary or emergency purposes to fund the redemption of their shares or as gen-
eral working capital as permitted by each Fund's borrowing restrictions.
Borrowings under this facility bear interest at 0.75% per annum above the Fed-
eral Funds rate (1.50% per annum above the Federal Funds rate during the period
from and including December 1, 1999 through and including January 31, 2000). A
commitment fee of 0.10% per annum is incurred on the average daily unused por-
tion of the revolving credit commitment. The commitment fee is allocated to all
funds. For its assistance in arranging this financing agreement, First Union
Capital Markets Corp. was paid a one-time arrangement fee of $250,000. State
Street serves as paying agent for the funds, and as paying agent is entitled to
a fee of $20,000 per annum which is allocated to all of the funds.
During the year ended September 30, 1999, the Funds had no borrowings under
these agreements.
12. CHANGE IN INDEPENDENT AUDITORS
Based on the recommendation of the Audit Committee of the funds, the Board of
Trustees has determined not to retain PricewaterhouseCoopers LLP as the inde-
pendent auditor of Core Bond Fund, Fixed Income Fund, Income Plus Fund, Inter-
mediate Bond Fund, International Bond Fund, Limited Duration Fund and Total Re-
turn Bond Fund and voted to appoint KPMG LLP for the fund's fiscal year ended
September 30, 1999. During the previous fiscal year, PricewaterhouseCoopers LLP
audit report contained no adverse opinion or disclaimer of opinion; nor were
its reports qualified or modified as to uncertainty, audit scope, or accounting
principle. Further in connection with its audit for the most recent fiscal year
and through June 18, 1999, there were no disagreements between the funds and
PricewaterhouseCoopers LLP on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which if not re-
solved to the satisfaction of PricewaterhouseCoopers LLP would have caused it
to make reference to the disagreements in its report on the financial state-
ments for such year.
88
<PAGE>
Independent Auditors' Report
Board of Trustees and Shareholders
Evergreen Select Fixed Income Trust
We have audited the accompanying statements of assets and liabilities, includ-
ing the schedules of investments of the Evergreen Select Adjustable Rate Fund,
Evergreen Select Core Bond Fund, Evergreen Select Fixed Income Fund, Evergreen
Select Income Plus Fund, Evergreen Select Intermediate Term Municipal Bond Fund
(formally, Evergreen Select Intermediate Tax Exempt Bond Fund), Evergreen Se-
lect International Bond Fund, Evergreen Select Limited Duration Fund, and Ever-
green Select Total Return Bond Fund, portfolios of the Evergreen Select Fixed
Income Trust, as of September 30, 1999, and the related statements of opera-
tions, the statements of changes in net assets and financial highlights for
each of the years or periods then ended. We also audited the statement of
changes in net assets for Evergreen Select Adjustable Rate Fund for each of the
years or periods in the two year period ended September 30, 1998, and financial
highlights for each of the years or periods in the four 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 fi-
nancial statements and financial highlights based on our audits. For the Ever-
green Select Core Bond Fund, Evergreen Select Fixed Income Fund, Evergreen Se-
lect Income Plus Fund, Evergreen Select Intermediate Term Municipal Bond Fund,
Evergreen Select International Bond Fund, Evergreen Select Limited Duration
Fund, and Evergreen Select Total Return Bond Fund, the statements of changes in
net assets for the year or period ended September 30, 1998, and prior, and the
financial highlights for each of the years or periods ended September 30, 1998
and prior, were audited by other auditors whose report dated November 23, 1998
and April 30, 1999 expressed an unqualified opinion on those financial state-
ments and financial highlights.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform our audits to obtain
reasonable assurance about whether the financial statements and financial high-
lights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of Sep-
tember 30, 1999 by correspondence with the custodian 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 pre-
sentation. We believe that our audits provide a reasonable basis for our opin-
ion.
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 the Evergreen Select Fixed Income Trust as of September 30, 1999,
the results of their operations, changes in their net assets and financial
highlights for each of the years or periods described above in conformity with
generally accepted accounting principles.
/s/ KPMG LLP
Boston, Massachusetts
November 5, 1999
89
<PAGE>
Additional Information (Unaudited)
FEDERAL TAX STATUS OF DIVIDENDS
Pursuant to section 852 of the Internal Revenue Code, the Funds have designated
the following amounts as long-term 20% capital gains for the fiscal year ended
September 30, 1999:
<TABLE>
<CAPTION>
Aggregate Per Share
--------------------
<S> <C> <C>
Core Bond Fund............................. 10,796,853 0.193
Income Plus Fund........................... 10,151,945 0.044
Intermediate Bond Fund..................... 8,238,041 0.739
Limited Duration Fund...................... 51,965 0.007
</TABLE>
For the fiscal year ended September 30, 1999, the percentage representing the
portion of dividends exempt from federal income taxes, other than alternative
minimum tax for Intermediate Bond Fund is 99.85%.
YEAR 2000
Like other investment companies, the Funds could be adversely affected if the
computer systems used by the Funds' investment advisors and the Funds' other
service providers are not able to perform their intended functions effectively
after 1999 because of the inability of computer software to distinguish the
year 2000 from the year 1900. The Funds' investment advisors are taking steps
to address this potential year 2000 problem with respect to the computer sys-
tems that they use and to obtain satisfactory assurances that comparable steps
are being taken by the Funds' other major service providers. At this time, how-
ever, there can be no assurance that these steps will be sufficient to avoid
any adverse impact on the Funds from this problem.
90
<PAGE>
Evergreen Select Funds*
Money Market
Money Market Fund
Treasury Money Market Fund
100% Treasury Money Market Fund
Municipal Money Market Fund
U.S. Government Money Market Fund
Municipal Fixed
Income
Intermediate Term Municipal Bond Fund
Taxable Fixed
Income
International Bond Fund
Total Return Bond Fund
Income Plus Fund
Core Bond Fund
Fixed Income Fund
Fixed Income II
Adjustable Rate Fund
Limited Duration Fund
Growth and Income/
Balanced
Balanced Fund
Growth
Special Equity Fund
Small Cap Growth Fund
Small Company Value Fund
Strategic Growth Fund
Core Equity Fund
Equity Index Fund
Large Cap Blend Fund
Strategic Value Fund
Diversified Value Fund
Social Principles
Secular Growth Fund
* Minimum investment in an Evergreen
Select Fund is $1,000,000.
28575 543698 11/99
[LOGO OF EVERGREEN FUNDS] BULK RATE
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PAID
200 Berkeley Street PERMIT NO. 19
Boston, MA 02116 HUDSON, MA
