<PAGE>
March 31, 1999
[ARTWORK APPEARS HERE]
Evergreen Select
Fixed Income Funds
Semiannual Report
[LOGO OF EVERGREEN FUNDS APPEARS HERE]
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Table of Contents
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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 ........................................................ 20
Portfolio Manager Commentary ............................................ 21
Evergreen Select Total Return Bond Fund
Fund at a Glance ........................................................ 23
Portfolio Manager Commentary ............................................ 24
Financial Highlights
Evergreen Select Adjustable Rate Fund ..................................... 26
Evergreen Select Core Bond Fund ........................................... 27
Evergreen Select Fixed Income Fund ........................................ 29
Evergreen Select Income Plus Fund ......................................... 30
Evergreen Select Intermediate Term Municipal Bond Fund .................... 31
Evergreen Select International Bond Fund .................................. 32
Evergreen Select Limited Duration Fund .................................... 33
Evergreen Select Total Return Bond Fund ................................... 34
Schedule of Investments
Evergreen Select Adjustable Rate Fund ..................................... 35
Evergreen Select Core Bond Fund ........................................... 36
Evergreen Select Fixed Income Fund ........................................ 38
Evergreen Select Income Plus Fund ......................................... 43
Evergreen Select Intermediate Term Municipal Bond Fund .................... 48
Evergreen Select International Bond Fund .................................. 53
Evergreen Select Limited Duration Fund .................................... 55
Evergreen Select Total Return Bond Fund ................................... 58
Statements of Assets and Liabilities ...................................... 63
Statements of Operations .................................................. 65
Statements of Changes in Net Assets ....................................... 67
Combined Notes to Financial
Statements ................................................................ 72
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Evergreen Funds
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Evergreen Funds is one of the nation's fastest growing investment companies with
approximately $50 billion in assets under management.
With over 70 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 semiannual report must be preceded or accompanied by a prospectus of an
Evergreen fund contained herein. The prospectus contains more complete
information, including fees and expenses, and should be read carefully before
investing or sending money.
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Mutual Funds: ARE NOT FDIC INSURED May lose value . Are not bank guaranteed
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Evergreen Distributor, Inc.
Evergreen(SM) is a Service Mark of Evergreen Investment Services, Inc.
<PAGE>
Letter to Shareholders
----------------------
March 1999
Dear Evergreen Shareholders,
We are pleased to provide the Evergreen Select Fixed Income Funds semiannual
report, which covers the six-month period ended March 31, 1999.
[PHOTO OF WILLIAM M. ENNIS APPEARS HERE]
[PHOTO OF DAVID C. FRANCIS APPEARS HERE]
Shift in the Interest Rate Environment
Throughout this period, lingering concerns about inflation affected the
fixed-income markets and produced a shift in the interest-rate environment.
Fears about the robust U.S. economy and high levels of consumer spending drove
interest rates steadily upward during the first five months of the period,
despite three separate cuts in the Fed Funds rate by the Federal Reserve in the
final months of 1998. As a result, fixed-income investors experienced negative
returns, for the most part, because bond prices fell in response to the rising
interest rates.
We believe interest rates will remain in their current trading range; the
underlying fundamentals in the fixed-income markets support continued low rates
and minimal inflation.
Year 2000 Preparation/1/
At Evergreen, we continue to prepare ourselves to provide uninterrupted service
and communication with all our shareholders throughout the end of 1999 and right
through the date change into the Year 2000 and beyond. As of the end of April,
when this report was finalized, we have completed 75% of the testing of internal
systems and are rapidly moving through the remaining systems. In March, we
successfully participated in industry-wide testing with the Securities Industry
Association. We are confident that our efforts will enable our shareholders to
receive the same Evergreen products and services we deliver today.
As always, we encourage all shareholders to diversify their mutual fund
portfolios and we suggest you consult with your financial advisor for an
allocation strategy that helps you meet your investment goals and objectives.
Evergreen Funds offers a wide range of funds that includes multiple investment
styles to help you find one that is appropriate in your portfolio.
Thank you for your continued investment in Evergreen Funds.
Sincerely,
/s/ William M. Ennis
William M. Ennis
Managing Director
Evergreen Funds
/s/ David C. Francis
David C. Francis, C.F.A.
Managing Director
Chief Investment Officer
First Capital Group
/1/The information above constitutes Year 2000 readiness disclosure.
1
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E V E R G R E E N
Select Adjustable Rate Fund
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Fund at a Glance as of March 31, 1999
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PORTFOLIO PROFILE
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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
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Performance and Returns/1/
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Portfolio Inception Date: 10/1/91 Class I Class IS
Class Inception Date 10/1/91 5/23/94
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Average Annual Returns
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6 mos 2.45% 2.33%
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1 year 4.98% 4.61%
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3 years 6.34% 6.08%
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5 years 5.90% 5.58%
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Since Portfolio Inception 5.54% 5.38%
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30-day SEC Yield 6.29% 6.05%
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LONG TERM GROWTH
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[LINE GRAPH APPEARS HERE]
CPI 6 mo. T-bill Sel Adj Rate
9/30/91 1,000,000 1,000,000 1,000,000
3/31/92 1,015,299 1,021,591 1,026,829
3/31/93 1,046,647 1,055,923 1,083,183
3/31/94 1,072,886 1,090,322 1,125,095
3/31/95 1,103,491 1,149,416 1,165,106
3/31/96 1,133,550 1,211,475 1,245,842
3/31/97 1,166,181 1,275,360 1,332,096
3/31/98 1,182,216 1,342,881 1,427,201
3/31/99 1,202,569 1,407,093 1,497,695
Comparison of a $1,000,000 investment in Evergreen Select Adjustable Rate Fund,
Class I shares1, versus a similar investment in the 6-month Treasury 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 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 their
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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E V E R G R E E N
Select Adjustable Rate Fund
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Portfolio Manager Commentary
Portfolio Management
[PHOTO OF GARY PZEGEO APPEARS HERE]
Gary Pzegeo
Performance
Evergreen Select Adjustable Rate Fund produced strong performance during the
six-month period ended March 31, 1999. For the period, the Fund's Institutional
Shares returned 2.45% and the Institutional Service Shares returned 2.33%,
outperforming the 1.38% average return generated by the funds in the Lipper
Adjustable Rate Mortgage category. The return on the Fund's Institutional Shares
was higher than the returns on 76% of the Funds in the Lipper Adjustable Rate
Mortgage category, and the return on the Fund's Institutional Service shares was
higher than the returns on 66% of all Funds listed in the Lipper Adjustable Rate
Mortgage category. Lipper Analytical Services, Inc. is an independent monitor of
mutual fund performance.
Portfolio
Characteristics
---------------
Total Net Assets $34,130,080
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Average Credit Quality AAA
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Average Maturity 4.9 years
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Average Duration 0.9 years
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Investment Environment
During the six months, the investment environment for ARMs improved
significantly. Early in the period, the fixed-income markets continued to be
affected by the financial and economic uncertainty that plagued several
economies around the world. Concerns about an economic slowdown in the U.S.
prompted investors to focus on relatively safe investments over more risky ones.
In the fixed-income markets this led to a "flight to quality," with investors
favoring Treasury securities above everything else. In this environment, the
performance of most income-producing securities lagged the performance of U.S.
Treasuries.
Against this uncertain economic backdrop, long-term interest rates remained
relatively low, making it attractive for homeowners to refinance or prepay their
mortgages. When mortgages are prepaid faster than market expectations, the
result can be a lower than anticipated return for a mortgage-backed security.
As we moved forward into the six-month period, the investment environment
changed. A measure of stability returned to the troubled overseas economies,
U.S. economic growth continued on an upward course and confidence was restored
to the financial markets. In addition, long-term interest rates rose, which was
positive for ARMs and for the Fund. Higher long-term rates made it less
attractive for homeowners to refinance their mortgages; therefore, mortgage
prepayment activity was reduced. Higher long-term rates benefited the Fund in
another way. As the interest rates on ARMs reset, they did so at higher rates,
producing added income for the Fund.
3
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E V E R G R E E N
Select Adjustable Rate Fund
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Portfolio Manager Commentary
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PORTFOLIO COMPOSITION
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(based on portfolio assets)
[PIE CHART APPEARS HERE]
ARMS 80.8%
Fixed-Rate Mortgage-Backed Securities 10.7%
U.S. Treasury Obligations 6.0%
Repurchase Agreements 2.5%
Strategy
During the six months, we took a more fully invested stance in the portfolio. To
take advantage of higher yields, we invested the portfolio's relatively small
cash position in ARMs. We also sold Treasury securities and reinvested the
proceeds in ARMs. The Fund benefited from this strategy, because the larger
number of ARMs provided a higher level of income. The supply of traditional ARMs
was relatively low during the period, but "hybrid" mortgages were more
plentiful. A hybrid mortgage is an investment for which 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 an
adjustable-rate mortgage. With hybrid mortgages we have the advantage of locking
in attractive amounts of income for a certain period of time. As of March 31,
1999, 79% of the portfolio was invested in ARMs, a 1.6% increase from the
beginning of the period, and nearly 10% was invested in fixed-rate securities.
portfolio QUALITY (based on portfolio assets)
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PORTFOLIO QUALITY
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(based on portfolio assets)
[PIE CHART APPEARS HERE]
U.S. Government Agency 91.5%
U.S. Treasury Obligations 6.0%
AAA 2.5%
Outlook
We think the investment environment will be positive for ARMs in the coming
months. We believe U.S. economic growth will continue to be strong and inflation
will remain at a relatively low level. We also believe the market environment
for ARMs will be characterized by low volatility. Despite strong economic
growth, there are no signs that the Federal Reserve Board will raise interest
rates. A relatively stable interest-rate environment is positive for portfolios
composed of income-producing investments, such as ARMs, because they can rely on
a steady stream of income. We believe ARMs could be one of the
strongest-performing sectors in the coming months.
4
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E V E R G R E E N
Select Core Bond Fund
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Fund at a Glance as of March 31, 1999
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PORTFOLIO PROFILE
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Philosophy
The Evergreen Select Core Bond Fund is designed to maximize total return by
focusing on current income and capital appreciation. 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
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PERFORMANCE AND RETURNS/1/
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Portfolio Inception Date: 2/28/86 Class I Class IS Class IC
Class Inception Date 12/19/97 3/9/98 11/24/97
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Average Annual Returns
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6 mos -0.41% -0.53% -0.41%
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1 year 5.46% 5.21% 5.46%
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3 years 6.93% 6.69% 6.93%
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5 years 6.67% 6.42% 6.67%
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10 years 8.49% 8.23% 8.49%
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Since Portfolio Inception 7.87% 7.61% 7.87%
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30-day SEC Yield 5.34% 5.06% 5.38%
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LONG TERM GROWTH
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[LINE GRAPH APPEARS HERE]
CPI LB Aggr Core Bond
3/31/89 1,000,000 1,000,000 1,000,000
3/31/90 1,052,330 1,123,386 1,096,751
3/31/91 1,103,843 1,268,443 1,235,042
3/31/92 1,138,994 1,413,017 1,383,104
3/31/93 1,174,162 1,600,810 1,585,671
3/31/94 1,203,598 1,638,782 1,636,622
3/31/95 1,237,931 1,720,550 1,689,394
3/31/96 1,271,652 1,906,115 1,848,086
3/31/97 1,308,258 1,999,841 1,925,331
3/31/98 1,326,247 2,239,195 2,142,678
3/31/99 1,349,079 2,384,457 2,259,719
Comparison of a $1,000,000 investment in Evergreen Select Core Bond Fund, Class
I shares1, versus a similar investment in the Lehman Brothers Aggregate Bond
Index (LBABI) and the Consumer Price Index (CPI).
The LBABI 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 their
original cost. Historical performance shown for Class IS from 11/24/97 to its
inception is based on the performance of Class IC and has not been adjusted to
reflect the effect of the 0.25% 12b-1 fee applicable to Class IS. Historical
performance shown for Class I from 11/24/97 to its inception is based on the
performance of Class IC. Classes I and IC pay no 12b-1 fees. If these fees had
been reflected, returns for Class IS would have been lower. Prior to 11/24/97,
the returns for Classes I, IS and IC are based on the Fund's predecessor common
trust fund's (CTFs) performance, adjusted for estimated mutual fund expenses.
The CTFs were not registered under the 1940 Act and were not subject to certain
investment restrictions. If the CTFs had been registered, their performance
might have been adversely affected. Performance for the common trust fund 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 = 6.99%, 5 year =
6.75%, 10 year = 8.58% and since 2/28/86 = 7.96%; Class IC - 3 year = 6.99%, 5
year = 6.75%, 10 year = 8.58% and since 2/28/86 = 7.96%; Class IS - 3 year =
6.75%, 5 year = 6.49%, 10 year = 8.31% and since 2/28/86 = 7.70%.
5
<PAGE>
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EVERGREEN
Select Core Bond Fund
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Portfolio Manager Commentary
Portfolio Management Team
[PHOTO OF L. ROBERT [PHOTO OF BRUCE J.
CHESHIRE APPEARS HERE] BESECKER APPEARS HERE
L. Robert Cheshire Bruce J. Besecker, CFA
Performance
For the six months ended March 31, 1999, the Evergreen Select Core Bond Fund's
Class I, IS and IC Shares returned -0.41%, -0.53%, -0.41%, respectively,
slightly trailing the -0.16% return of its benchmark, the Lehman Brothers
Aggregate Bond Index. The Fund's Class I Share one-year return of 5.46%,
however, outdistanced the average return of 128 intermediate U.S. government
funds tracked by Lipper Analytical Services, an independent mutual fund rating
company.
Portfolio
Characteristics
---------------
Total Net Assets $577,617,375
- -------------------------------------
Average Credit Quality AA
- -------------------------------------
Average Maturity 9.2 years
- -------------------------------------
Average Duration 5.0 years
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Bond Market Environment
Bond prices trended lower in the fiscal period as interest rates increased
steadily during the first five months. In fact, the yield on the bellwether
30-year Treasury Bond started the period at 4.98%, before peaking at 5.70% on
March 4th. Investors' fears of an inflationary flare-up served as the catalyst
for higher rates despite three rate cuts by the Federal Reserve during the
period. In March, inflationary concerns subsided and interest rates trended
modestly lower during the final weeks, closing the period at 5.63%.
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PORTFOLIO COMPOSITION
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(based on portfolio assets)
[PIE CHART APPEARS HERE]
Mortgage-Backed Securities 26.7%
U.S. Treasury Obligations 21.7%
Corporate Notes/Bonds 18.7%
U.S. Government & Agency Obligations 10.9%
Yankee Obligations 10.8%
Repurchase Agreements 7.4%
Asset-Backed Securities 2.6%
Collateralized Mortgage Obligations 1.2%
6
<PAGE>
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EVERGREEN
Select Core Bond Fund
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Portfolio Manager Commentary
Investment Strategy
Our duration strategy had a positive impact on performance during the final
three months, while sector adjustments within the portfolio provided mixed
results during the period.
Because interest rates increased for much of the period, the decision to reduce
duration (starting in January) made a positive contribution to total return.
Duration was shortened from 5.1 years to 5.0 in the final three months, but
still finished the period a bit longer than the benchmark Lehman Brothers
Aggregate Index (4.62 years).
From a sector standpoint, the decision to position the portfolio for a rebound
in corporate bonds in September proved beneficial, as this area posted strong
gains in the final months of 1998. Conversely, the portfolio had an
under-exposure to lower-rated securities late in the period because we felt this
sector would languish if corporate earnings stalled, as many pundits predicted.
When the U.S. economy surged, this group performed well, but the portfolio's
conservative weighting hurt relative performance.
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Portfolio Quality
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
AAA 60.9%
A 17.05
U.S. Government Agency 10.9%
AA 6.8%
BAA 4.4%
Outlook
Looking ahead, we anticipate interest rates to stay within their current trading
range, but do feel rates are more likely to decline than rise due to their
recent sharp rise in the past several months. Furthermore, a slowdown in
economic growth - as many analysts predict - provides another catalyst for
declining rates. As a result, we will keep duration modestly long to capitalize
upon potentially lower interest rates, but not so long as to have a
significantly adverse impact should rates rise.
7
<PAGE>
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EVERGREEN
Select Fixed Income Fund
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Fund at a Glance as of March 31, 1999
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PORTFOLIO PROFILE
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Philosophy
The Evergreen Select Fixed Income Fund seeks a high level of current income and
a potential for capital appreciation. The Fund also seeks the preservation of
capital.
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
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Performance and Returns/1/
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Portfolio Inception Date: 3/31/77 Class I Class IS
Class Inception Date 11/24/97 3/9/98
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Average Annual Returns
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6 mos. 0.23% 0.11%
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1 year 6.00% 5.74%
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3 years 6.36% 6.07%
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5 years 6.34% 6.06%
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10 years 7.77% 7.50%
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Since Portfolio Inception 8.29% 8.02%
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30-day SEC Yield 5.74% 5.49%
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LONG TERM GROWTH
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[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Consumer Price Lehman Brothers Select Fixed
Index - US Interm Govt/Corp Income I
<S> <C> <C> <C>
3/31/89 1,000,000 1,000,000 1,000,000
3/31/90 1,052,330 1,114,108 1,111,767
3/31/91 1,103,843 1,248,562 1,247,468
3/31/92 1,138,994 1,383,358 1,374,890
3/31/93 1,174,162 1,555,473 1,529,648
3/31/94 1,203,598 1,594,604 1,554,968
3/31/95 1,237,931 1,666,244 1,611,037
3/31/96 1,271,652 1,825,593 1,757,180
3/31/97 1,308,258 1,913,383 1,839,197
3/31/98 1,326,247 2,097,651 1,994,522
3/31/99 1,349,079 2,236,138 2,113,979
</TABLE>
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 Index (LBIGCI), and the Consumer Price Index
(CPI).
The LBIGCI 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 their
original cost. Historical performance shown for Class IS from 11/24/97 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 11/24/97, the returns for Classes I and IS are based on the Fund's
predecessor common trust fund's (CTFs) performance, adjusted for estimated
mutual fund expenses. The CTFs were not registered under the 1940 Act and were
not subject to certain investment restrictions. If the CTFs had been registered,
their performance might have been adversely affected. Performance for the common
trust fund 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
= 6.42%, 5 year = 6.42%, 10 year = 7.87% and since 3/31/77 = 8.39%; Class IS - 3
year = 6.13%, 5 year = 6.14%, 10 year = 7.60% and since 3/31/77 = 8.12%.
8
<PAGE>
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EVERGREEN
Select Fixed Income Fund
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Portfolio Manager Commentary
Portfolio Management Team
[PHOTO OF ROLLIN C. WILLIAMS APPEARS HERE]
Rollin C. Williams, CFA
[PHOTO OF L. ROBERT CHESHIRE APPEARS HERE]
L. Robert Cheshire
[PHOTO OF THOMAS L. ELLIS APPEARS HERE]
Thomas L. Ellis
Performance
For the six months ended March 31, 1999, the Evergreen Select Fixed Income
Fund's Class I and IS Shares returned 0.23% and 0.11%, respectively, slightly
outpacing the 0.10% return of its benchmark, the Lehman Brothers Intermediate
Government/Corporate Index. Strong performance relative to our benchmark can be
attributed to an attractive duration stance for much of the period, as well as
favorable sector adjustments.
Portfolio
Characteristics
---------------
Total Net Assets $614,212,246
- ---------------------------------------------------
Average Credit Quality AA
- ---------------------------------------------------
Average Maturity 5.0 years
- ---------------------------------------------------
Average Duration 3.6 years
- ---------------------------------------------------
Fluctuating Interest Rate Environment
During the first five months of the period, interest rates rose roughly 1.25%
despite the fact the Federal Reserve Board lowered the Fed Funds rate three
times in the fourth quarter of 1998, in an effort to insulate the U.S. economy
from global economic turmoil. During the final month, investors' inflationary
fears subsided and interest rates managed to trend downward. In all, bond prices
generally fell as the yield on the bellwether 30-year Treasury Bond rose from
4.98% to 5.63% during the six months.
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Portfolio Composition
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
Corporate Notes/Bonds 27.9%
U.S. Treasury Obligations 25.8%
Asset-Backed Securities 12.3%
U.S. Government & Agency Obligations 12.2%
Collateralized Mortgage Obligations 10.8%
Mortgage-Backed Securities 4.9%
Yankee Obligations 4.9%
Repurchase Agreements 1.2%
9
<PAGE>
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EVERGREEN
Select Fixed Income Fund
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Portfolio Manager Commentary
Investment Strategy
The portfolio's duration strategy was a major reason the Fund outdistanced the
Lehman Brothers Intermediate Government Corporate Index during the fiscal
period. The decision to reduce duration, from 3.7 years to 3.6 years during the
six months, contributed to total return as interest rates rose markedly during
that period.
Sector adjustments also positively impacted performance. Corporate and mortgage
securities outperformed Treasuries during the six months and our decision to
emphasize these sectors helped immensely. The portfolio's weighting in these two
areas increased from 38% to 42% during the first three months, and at quarter
end our corporate and mortgage/asset-backed exposure stood at 33.8% and 19.5%,
respectively.
- --------------------------------------------------------------------------------
Portfolio Quality
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
U.S. Government 26.1%
AAA 25.3%
A 15.6%
U.S. Government Agency 12.4%
BAA 11.5%
AA 8.0%
Not Available 1.1%
Outlook
Looking ahead, we anticipate keeping duration slightly longer than the benchmark
in order to capitalize on potentially declining interest rates, while not being
overly vulnerable should rates rise. The market's long-term fundamentals appear
extremely positive and we feel the risk of a potential short-term uptick in
rates is outweighed by lower rates over the long term. We expect interest rates
to maintain their current trading range for the near term. In addition, we will
continue to monitor the fixed income markets for areas of relative value and
hidden opportunity.
10
<PAGE>
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EVERGREEN
Select Income Plus Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of March 31, 1999
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
- --------------------------------------------------------------------------------
Philosophy
The Evergreen Select Income Plus Fund seeks a high level of current income and a
potential for capital appreciation.
Process
The portfolio managers seek to achieve the Fund's objective by actively managing
portfolio duration for capital gain opportunities. 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 Index
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/1/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 8/31/88 Class I Class IS
- --------------------------------------------------------------------------------
Class Inception Date 11/24/97 3/2/98
- --------------------------------------------------------------------------------
Average Annual Returns
- --------------------------------------------------------------------------------
6 mos -1.34% -1.46%
- --------------------------------------------------------------------------------
1 year 5.39% 5.14%
- --------------------------------------------------------------------------------
3 years 6.94% 6.65%
- --------------------------------------------------------------------------------
5 years 6.95% 6.67%
- --------------------------------------------------------------------------------
10 years 8.16% 7.89%
- --------------------------------------------------------------------------------
Since Portfolio Inception 7.93% 7.66%
- --------------------------------------------------------------------------------
30-day SEC Yield 5.77% 5.52%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Consumer Price Lehman Brothers Select Income
Index - US Govt/Corp Plus I
<S> <C> <C> <C>
3/31/89 1,000,000 1,000,000 1,000,000
3/31/90 1,052,330 1,116,929 1,101,928
3/31/91 1,103,843 1,256,433 1,231,560
3/31/92 1,138,994 1,399,430 1,363,380
3/31/93 1,174,162 1,599,538 1,535,000
3/31/94 1,203,598 1,643,936 1,566,126
3/31/95 1,237,931 1,719,129 1,624,272
3/31/96 1,271,652 1,906,951 1,792,380
3/31/97 1,308,258 1,991,954 1,868,436
3/31/98 1,326,247 2,238,931 2,079,889
3/31/99 1,349,079 2,385,768 2,191,974
</TABLE>
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 Index (LBGCI) and the Consumer Price Index (CPI).
The LBGCI 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 their
original cost. Historical performance shown for Class IS from 11/24/97 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 11/24/97, the returns for Classes I and IS are based on the Fund's
predecessor common trust fund's (CTFs) performance, adjusted for estimated
mutual fund expenses. The CTFs were not registered under the 1940 Act and were
not subject to certain investment restrictions. If the CTFs had been registered,
their performance might have been adversely affected. Performance for the common
trust fund 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
= 7.00%, 5 year = 7.03%, 10 year = 8.26% and since 8/31/88 = 8.02%; Class IS - 3
year = 6.71%, 5 year = 6.75%, 10 year = 7.98% and since 8/31/88 = 7.75%.
11
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Income Plus Fund
- --------------------------------------------------------------------------------
Portfolio Manager Commentary
Portfolio Management
[PHOTO OF J.P. WEAVER APPEARS HERE]
J.P. Weaver, CFA
Performance
For the six months ended March 31, 1999, the Evergreen Select Income Plus Bond
Fund's Class I and IS Shares returned -1.34% and -1.46%, respectively, trailing
the -1.07% return of its benchmark, the Lehman Brothers Government/Corporate
Index. Most of the Fund's underperformance took place in the opening months of
the fiscal period, when the portfolio's strong weighting of corporates and
mortgages hurt returns. Performance rebounded markedly in the final three
months, with the Fund outdistancing the benchmark by 20 basis points.
Portfolio
Characteristics
---------------
Total Net Assets $1,303,863,432
- ------------------------------------------------------
Average Credit Quality AA
- ------------------------------------------------------
Average Maturity 10.4 years
- ------------------------------------------------------
Average Duration 6.0 years
- ------------------------------------------------------
Interest Rates Reverse Course
The steady decline in interest rates that investors witnessed in the first three
quarters of 1998 was halted during the past six months as rates reversed course
and trended upward in the October-through-March period. The catalyst for rising
interest rates was the market's fear of an inflationary flare-up due to robust
economic growth and powerful consumer spending levels. Curiously, interest rates
increased significantly, from 4.98% to 5.63% during the six months, despite the
fact that the Federal Reserve Board cut the Fed Funds rate three times in three
months. Consequently, fixed income investors witnessed generally negative
returns as bond prices fell in response to rising interest rates.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
U.S. Treasury Obligations 31.4%
Corporate Notes/Bonds 30.6%
U.S. Government & Agency Obligations 18.0%
Yankee Obligations 10.0%
Collateralized Mortgage Obligations 4.0%
Repurchase Agreements 2.3%
Asset-Backed Securities 2.2%
Mortgage-Backed Securities 1.5%
12
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Income Plus Fund
- --------------------------------------------------------------------------------
Portfolio Manager Commentary
Sector Weightings and Duration Strategy
From a sector standpoint, we maintained a strong weighting of corporates and
mortgages throughout the period, because we felt these two areas were
attractively valued considering the recent run-up by Treasury securities.
Although this over-exposure negatively impacted performance in October, the Fund
benefited from a return to sanity in the spread sectors (corporate and
mortgage-backed securities) where the Fund currently has over 48% of its assets.
In retrospect, our decision to "stay the course" in these sectors during the
difficult fall period served us well when yield spreads snapped back quickly in
early 1999. Spreads have now retraced 75% to 80% of their post-crisis widening.
The portfolio's duration was modestly long during the period and, consequently,
hurt performance because rates rose for much of the period. As of March 31,
duration stood at 6.0 years versus 5.5 years for the benchmark index.
Outlook
We believe that given the environment we witnessed over the past few months, an
overweight in the spread sectors remains appropriate. We will continue to
emphasize liquid and defensive corporate and mortgage-backed sectors in an
attempt to add yield during a period of range bound Treasury rates. As for the
second half of 1999, we anticipate a transition towards slower economic growth
and an appropriate response may be to reduce spread sector exposures in favor of
Treasury and Federal Agency debt.
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
U.S. Government 32.2%
A 21.4%
U.S. Government Agency 18.5%
BAA 12.8%
AA 7.8%
AAA 5.5%
Not Rated 1.8%
13
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Intermediate Term Municipal Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of March 31, 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/
Process
The Fund provides stable, non-taxable income flows at competitive rates by
primarily investing in tax-free bonds. 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 Bond 7-Year Index
** The Lehman Brothers Municipal Bond 7-Year Index inception date was 1/31/90.
The Lehman Brothers Municipal Bond 10-year Index was used for the period
3/31/89-1/31/90.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/2/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 1/31/84 Class I Class IS
Class Inception Date 11/24/97 3/2/98
- --------------------------------------------------------------------------------
Average Annual Returns
- --------------------------------------------------------------------------------
6 mos. 0.27% 0.15%
- --------------------------------------------------------------------------------
1 year 4.83% 4.58%
- --------------------------------------------------------------------------------
3 years 6.20% 5.96%
- --------------------------------------------------------------------------------
5 years 5.94% 5.69%
- --------------------------------------------------------------------------------
10 years 6.66% 6.40%
- --------------------------------------------------------------------------------
Since Portfolio Inception 7.18% 6.92%
- --------------------------------------------------------------------------------
30-day SEC Yield 4.58% 4.32%
- --------------------------------------------------------------------------------
Tax Equivalent Yield* 6.99% 7.42%
- --------------------------------------------------------------------------------
* Assumes maximum 39.6% federal tax rate. Results for investors subject to lower
tax rates would not be as advantageous.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
Select Int Muni Bond LB 1-7 Value
3/31/89 1,000,000 1,000,000 1,000,000
3/31/90 1,086,593 1,098,593 1,052,330
3/31/91 1,170,000 1,202,628 1,103,843
3/31/92 1,257,454 1,310,616 1,138,994
3/31/93 1,380,356 1,462,483 1,174,162
3/31/94 1,427,962 1,506,311 1,203,598
3/31/95 1,492,955 1,601,939 1,237,931
3/31/96 1,590,828 1,731,163 1,271,652
3/31/97 1,651,976 1,811,150 1,308,258
3/31/98 1,818,097 1,974,716 1,326,247
3/31/99 1,905,914 2,091,677 1,349,079
Comparison of a $1,000,000 investment in Evergreen Select Intermediate Term
Municipal Bond Fund, Class I Shares/1/, versus a similar investment in the
Lehman Brothers Municipal Bond 7-year Index (LBMB7YI**), and the Consumer Price
Index.
The LBMB7YI 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.
/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 their
original cost. Historical performance shown for Class IS from 11/24/97 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 11/24/97, the returns for Classes I and IS are based on the Fund's
predecessor common trust fund's (CTF's) performance, adjusted for estimated
mutual fund expenses. The CTFs were not registered under the 1940 Act and were
not subject to certain investment restrictions. If the CTFs had been registered,
their performance might have been adversely affected. Performance for the common
trust fund 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
=6.26%, 5 year = 6.02%, 10 year = 6.75% and since 1/31/84 = 7.28%; Class IS - 3
year = 6.01%, 5 year = 5.77%, 10 year = 6.49% and since 1/31/84 = 7.02%.
/1/ Some portion of the Fund's income may be subject to the Federal Alternative
Minimum Tax.
14
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Intermediate Term Municipal Bond Fund
- --------------------------------------------------------------------------------
Portfolio Manager Commentary
Portfolio Management
[PHOTO OF RICHARD K. MARRONE APPEARS HERE]
Richard K. Marrone
Performance
For the six months ended March 31, 1999, the Evergreen Select Intermediate Term
Municipal Bond Fund's Class I and Class IS shares returned 0.27% and 0.15%,
respectively. This compares with the Fund's benchmark, the Lehman Brothers
Municipal 7-year Index, which returned 1.49% for the same period.
Municipal Bond Market Environment
During the fiscal period, municipal bonds held up very well in a difficult
fixed-income environment and managed to outpace Treasuries. Investors witnessed
heavy new issuance throughout the six months that actually caused a slight
supply/demand imbalance early in the period. The strong U.S. economy fueled this
considerable issuance as local governments, armed with increasing tax revenue,
incurred more debt.
Municipal bonds posted positive gains despite the fact interest rates increased
steadily throughout the period. Curiously, interest rates trended higher, from
4.98% to 5.63% during the six months although the Federal Reserve Board cut the
Fed Funds rate three times in three months. Rates rose in response to investors'
fears of a potential inflationary flare-up resulting from robust economic growth
and powerful consumer spending levels.
Portfolio Characteristics
-------------------------
Total Net Assets $730,201,806
- ------------------------------------------------------
Average Credit Quality AA
- ------------------------------------------------------
Average Maturity 5.0 years
- ------------------------------------------------------
Average Duration 3.6 years
- ------------------------------------------------------
Portfolio Quality
(based on portfolio assets)
[PIE CHART APPEARS HERE]
AAA 37.1%
BBB 25.2%
A 14.2%
AA 14.1%
Not Rated 9.4%
15
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Intermediate Term Municipal Bond Fund
- --------------------------------------------------------------------------------
Portfolio Manager Commentary
Investment Strategy
Most of the adjustments made to the portfolio took place in the final half of
the fiscal period, focusing on the Fund's two primary objectives: strong yield
and price stability. As a result, during the past several months we have sold
most zero-coupon bonds because these issues typically have significant price
volatility.
We also trimmed exposure to securities with higher volatility and lower coupon
structures. Most of these sales took place in mid-to-late January, while we
spent early February re-investing these funds. Simply put, these adjustments
resulted in a portfolio with higher yield, more stable net asset value and a
slightly lower duration. Portfolio Composition (based on portfolio assets)
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
Other Revenue Bonds 20.1%
Hospitals/Nursing Homes/Health Care 20.1%
General Obligation Notes/Bonds 9.4%
Escrow 9.4%
Airlines 9.2%
Housing 9.1%
Industrial Development 8.4%
Residential Care 5.0%
Sales Tax 4.5%
Public Facilities 3.8%
Money Market Funds 1.0%
Outlook
Going forward, we will continue to focus on securities consistent with our
income-oriented approach. We are confident this strategy will enhance total
return and reward our shareholders over the long term. Along with our team of
municipal credit analysts, we will continue to monitor the market for hidden and
potential opportunities in order to meet the Fund's and our clients' objectives.
16
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select International Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of March 31, 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 into 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: 12/15/93 Class I Class IS
- --------------------------------------------------------------------------------
Class Inception Date 12/15/93 12/15/93
- --------------------------------------------------------------------------------
Average Annual Returns
- --------------------------------------------------------------------------------
6 mos 1.98% 1.84%
- --------------------------------------------------------------------------------
1 year 6.13% 5.85%
- --------------------------------------------------------------------------------
3 years 5.59% 5.33%
- --------------------------------------------------------------------------------
5 years 5.96% 5.71%
- --------------------------------------------------------------------------------
Since Portfolio Inception 4.52% 4.27%
- --------------------------------------------------------------------------------
30-day SEC Yield 3.55% 3.30%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
CPI JPMGGI Sel Int'l Bond
12/31/93 1,000,000 1,000,000 1,000,000
3/31/94 1,009,609 970,874 940,358
3/31/95 1,038,409 880,583 951,574
3/31/96 1,066,695 938,835 1,067,151
3/31/97 1,097,401 1,015,534 1,126,521
3/31/98 1,112,490 1,080,583 1,183,649
3/31/99 1,131,643 1,061,165 1,256,233
Comparison of a $1,000,000 investment in Evergreen International Bond Fund,
Class I shares/1/, versus a similar investment in the J.P. Morgan Global
Government Index-excluding U.S. (JPM6XUS), and the Consumer Price Index (CPI).
The JPM6XUS 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 their
original cost. Historical performance shown for Class I prior to August 28,
1998, 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 August 28, 1998, is based on the performance of the Class A
Shares of the Fund's predecessor fund, CoreFund Global Bond 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 APPEARS HERE]
George McNeil
First International Advisors, Ltd.
Performance
For the six months ending March 31, 1999, the Fund's Class I and Class IS shares
produced a total return of 1.98% and 1.84%, respectively. This compares
favorably with the Fund's benchmark, the J.P. Morgan Global Government Bond
Index, which generated a return of -0.41%.
Portfolio
Characteristics
---------------
Total Net Assets $44,520,048
- --------------------------------------------------
Average Credit Quality AA
- --------------------------------------------------
Average Maturity 6.9 years
- --------------------------------------------------
Average Duration 5.6 years
- --------------------------------------------------
Investment Environment and Strategy
Two contrasting environments existed within the Fund's fiscal period. In the
fourth quarter of 1998, European bond prices rose as investors anticipated
slower economic growth, particularly in Asia, Europe, Latin America and emerging
markets. However, in the first quarter of 1999, market sentiment shifted as
continued strength in the U.S. economy made weaker international growth appear
less likely. Commodity prices climbed higher, particularly energy and oil
prices, and investors encountered supply and demand pressures. The combination
of factors drove long-term international bond yields higher, erasing the price
gains achieved in the first part of the period. In particular, Japanese bond
yields rose substantially. The benchmark 20-year government bond yield rose from
1.4% on December 31, 1998, to 3.2% on March 31, 1999.
The Fund maintained a strong emphasis on quality, investing in countries with
stable political climates, favorable economic conditions and large, liquid
securities markets. The Fund's largest positions were in Japan, United Kingdom,
Netherlands, Germany and Sweden. As of March 31, 1999, the Fund held 48.86% of
its net assets in corporate bonds and 47.34% in government bonds. The remaining
3.80% was invested in supranational bonds. Supranational bonds are the
securities of issuers that can issue debt in any country and in any
denomination. Also as of March 31, 1999, over two-thirds of the portfolio was
invested in securities rated "AAA". As of that date, the Fund's credit breakdown
was as follows: AAA - 69%, AA - 15%, A - 6%, BBB - 5%, and BB - 5%. BB is
considered to be the highest level of quality within the high yield bond sector.
The Fund's high yield holdings, which are continually monitored, include
investments in Poland, South Korea, Slovakia and Mexico.
18
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select International Bond Fund
- --------------------------------------------------------------------------------
Portfolio Manager Commentary
We focused on building the Fund's total return potential while generating an
attractive yield. We did this by emphasizing market sectors that we believed
offered the greatest potential for price appreciation and by adjusting the
Fund's sensitivity to interest rate changes. In the first half of the fiscal
period, we increased the Fund's European holdings and lengthened duration. The
heavier weighting in European securities enabled the Fund to take advantage of
the favorable investment conditions there; and the longer duration gave the Fund
a greater sensitivity to changes in interest rates, boosting total return when
European interest rates fell. In January 1999, we shortened duration, making it
modestly shorter than the Fund's benchmark. This decreased the Fund's
sensitivity to changes in interest rates, which enhanced price stability as
European interest rates rose and bond prices fell.
The Fund also established a position in Japanese securities in early February.
At that time, the yields on Japanese bonds had risen to a point where we
believed they offered attractive relative value. We selected bonds with 20-year
maturities, which lengthened the Fund's duration and increased its sensitivity
to changes in Japanese interest rates. Prior to February, the Fund did not have
a position in Japanese bonds.
We believe the Fund's currency position also benefited performance. The Fund
emphasized European currencies in the fourth quarter of 1998, when European
currencies strengthened prior to the commencement of the "euro", a single common
currency representing eleven countries. We then shifted our focus to U.S.
dollars in the first quarter of 1999, when that currency strengthened
considerably on news of continued strength in the U.S. economy.
Outlook
We believe we will remain in an environment characterized by minimal inflation
and low interest rates. Further, we think that any upward pressures on inflation
should be negligible and short-term in nature.
We anticipate a period of interest rate stability through the middle of 1999.
While we expect short-term interest rates to fall in the second half of the
year, we would not be surprised to see a marginal rise in long-term interest
rates from dormant inflationary pressures.
We also believe the U.S. economy will begin to show signs of a slowdown in the
second half of 1999, while at the same time, the European economy could begin to
recover. Stronger economic growth should have positive implications for the
"euro".
With this scenario in mind, we plan to maintain the Fund's duration over the
next few months, keeping a neutral interest rate stance. Longer term, however,
we expect to take advantage of developing trends, locking in both higher yields
and the appreciation that could result from a strengthening in the "euro".
- --------------------------------------------------------------------------------
Geographical Allocation
- --------------------------------------------------------------------------------
(based on portfolio assets)
Japan 15.9%
--------------------------------------------------------------
United Kingdom 15.5%
--------------------------------------------------------------
Netherlands 14.8%
--------------------------------------------------------------
Germany 7.9%
--------------------------------------------------------------
Sweden 7.2%
--------------------------------------------------------------
Australia 6.3%
--------------------------------------------------------------
Canada 6.1%
--------------------------------------------------------------
Italy 5.1%
--------------------------------------------------------------
France 4.4%
--------------------------------------------------------------
Norway 4.2%
--------------------------------------------------------------
Supranational 3.4%
--------------------------------------------------------------
Denmark 2.1%
--------------------------------------------------------------
Other Countries 7.1%
--------------------------------------------------------------
19
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Limited Duration Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of March 31, 1999
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
- --------------------------------------------------------------------------------
Philosophy
Evergreen Select Limited Duration Fund seeks to provide current income
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 attempts 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: 4/30/94 Class I Class IS
- --------------------------------------------------------------------------------
Class Inception Date 11/24/97 7/28/98
- --------------------------------------------------------------------------------
Average Annual Returns
- --------------------------------------------------------------------------------
6 mos. 1.54% 1.42%
- --------------------------------------------------------------------------------
1 year 5.84% 5.64%
- --------------------------------------------------------------------------------
3 years 5.98% 5.77%
- --------------------------------------------------------------------------------
Since Inception 5.99% 5.75%
- --------------------------------------------------------------------------------
30-day SEC Yield 5.70% 5.45%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Consumer Price Index - US Merrill Lynch 1-3 Yr Govt Select Limited Duration I
<S> <C> <C> <C>
4/30/94 1,000,000 1,000,000 1,000,000
3/31/95 1,027,137 1,048,384 1,043,337
3/31/96 1,055,116 1,129,647 1,118,216
3/31/97 1,085,489 1,189,760 1,174,888
3/31/98 1,100,415 1,279,136 1,257,457
3/31/99 1,119,359 1,356,828 1,331,001
</TABLE>
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 (MLI-3YTBI), and the Consumer Price Index (CPI).
The MLI-3YTBI 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 their
original cost. Historical performance shown for Class IS from 11/24/97 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 11/24/97, the returns for Classes I and IS are based on the Fund's
predecessor common trust fund's (CTFs) performance, adjusted for estimated
mutual fund expenses. The CTFs were not registered under the 1940 Act and were
not subject to certain investment restrictions. If the CTFs had been registered,
their performance might have been adversely affected. Performance for the common
trust fund 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
= 6.14% and since 4/30/94 = 6.20%; Class IS - 3 year = 5.93% and since 4/30/94 =
5.96%.
20
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Limited Duration Fund
- --------------------------------------------------------------------------------
Portfolio Manager Commentary
Portfolio Management Team
[PHOTO OF DAVID FOWLEY APPEARS HERE] [PHOTO OF SAM C. PADDISON APPEARS HERE]
David Fowley Sam C. Paddison
Performance
For the six months ended March 31, 1999, the Evergreen Select Limited Duration
Bond Fund's Class I and IS returned 1.54% and 1.42%, respectively, outpacing the
1.36% return of its benchmark, the Merrill Lynch 1-3 Year Treasury Index. The
Fund's one-year return of 5.84% (Class I Shares) ranked in the top 25% of short
U.S. government funds tracked by Lipper Analytical Services, an independent
mutual fund rating company.
Portfolio
Characteristics
---------------
Total Net Assets $76,491,328
- -----------------------------------------------------------------
Average Credit Quality A
- -----------------------------------------------------------------
Average Maturity 2.5 years
- -----------------------------------------------------------------
Average Duration 2.0 years
- -----------------------------------------------------------------
Investment Environment
The U.S. equity markets continue to dominate the headlines with the Dow Jones
Industrial Average finally closing over 10,000 in April, 1999. Consumer
confidence continues to strengthen as stocks climb and the unemployment rate
falls to a 30-year low of 4.2%. U.S.Treasury yields increased over the last six
months as the domestic economy continued its strong growth and renewed
investors' concerns over rising inflation. The yield on the 5-year U.S. Treasury
Note increased by 88 basis points to 5.10%.
Although inflation ended the period at a low 1.6% (year over year), Gross
Domestic Product ended the year at 4.3%. The U.S. continues to benefit from a
strong dollar and cheap imports, keeping inflation down. Strong GDP growth put
the Federal Reserve on hold with its monetary policy and removed the Fed's
easing bias.
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
Corporate Notes/Bonds 53.2%
Mortgage-Backed Securities 17.2%
Asset-Backed Securities 16.3%
Commercial Paper 9.6%
Yankee Obligations 2.6%
Collateralized Mortgage Obligations 0.7%
Repurchase Agreements 0.4%
21
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Limited Duration Fund
- --------------------------------------------------------------------------------
Portfolio Manager Commentary
Investment Strategy
The Fund increased its exposure to spread products (corporate, mortgage-backed
and asset-backed securities) in anticipation of credit spreads tightening after
their dramatic widening in August and September of 1998. Corporate spreads
started their descent in mid-November, tightening approximately 45 basis points
by the end of the first quarter of 1999, resulting in corporate bonds
outperforming comparable Treasuries. Liquidity has come back to the corporate
market; witnessed by investors easily digesting a new $8 billion dollar issuance
by AT&T.
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. Short-term mortgage-backed and
asset-backed securities were the two highest performing sectors over the
six-month period. The Fund maintained an above-average duration ranging from
110% to 120% of its benchmark, the Merrill Lynch 1-3 Year Treasury Index.
- --------------------------------------------------------------------------------
Portfolio Quality
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
A 33.6%
AAA 32.9%
BAA 22.6%
AA 8.2%
BA 2.7%
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 our break-even analysis. We anticipate the U.S.
economy will show signs of weakening when corporate profit growth starts to
decline and the stock market transcends back to total returns more consistent
with historical levels. Additionally, the Federal Budget surplus and decreasing
Treasury supply coupled with slower growth should give the bond market a needed
boost for the remainder of 1999. However, we will keep our eyes on consumer
prices, inflation and unemployment.
22
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Total Return Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of March 31, 1999
- --------------------------------------------------------------------------------
PORTFOLIO PROFILE
- --------------------------------------------------------------------------------
Philosophy
The Evergreen Select Total Return Bond Fund seeks to maximize total return
through a combination of current income and capital appreciation by investing
primarily in investment grade fixed income securities with complimentary
investments in high yield foreign and fixed income securities.
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 among 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: 4/20/98 Class I Class IS
Class Inception Date 4/20/98 8/3/98
- --------------------------------------------------------------------------------
Average Annual Returns
- --------------------------------------------------------------------------------
6 mos. -0.42% -0.54%
- --------------------------------------------------------------------------------
Cumulative Since Portfolio Inception 2.56% 2.39%
- --------------------------------------------------------------------------------
30-day SEC Yield 6.06% 5.80%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GROWTH CHART
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
Consumer Price Lehman Brothers Evergreen Select
Index - US Aggregate Total Return I
4/30/98 1,000,000 1,000,000 1,000,000
5/31/98 1,001,846 1,010,152 1,008,803
6/30/98 1,003,077 1,018,744 1,016,286
7/31/98 1,004,308 1,020,870 1,018,805
8/31/98 1,005,538 1,037,513 1,015,144
9/30/98 1,006,769 1,061,794 1,030,629
10/31/98 1,008,000 1,056,160 1,019,268
11/30/98 1,010,470 1,062,174 1,030,699
12/31/98 1,010,470 1,065,361 1,033,386
1/31/99 1,012,895 1,072,925 1,040,652
2/28/99 1,014,121 1,054,149 1,021,451
3/31/99 1,015,338 1,059,947 1,026,333
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 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 their
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.
23
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Total Return Bond Fund
- --------------------------------------------------------------------------------
Portfolio Manager Commentary
Portfolio Management Team
[PHOTO OF ROLLIN C. WILLIAMS APPEARS HERE]
Rollin C. Williams, CFA
[PHOTO OF RICHARD CRYAN APPEARS HERE]
Richard Cryan
[PHOTO OF ANTHONY NORRIS APPEARS HERE]
Anthony Norris
First International Advisers, Ltd.
Performance
For the six months ended March 31, 1999, the Evergreen Select Total Return Bond
Fund's Class I and IS Shares returned -0.42% and -0.54% respectively, modestly
behind the -0.16% return of its benchmark, the Lehman Brothers Aggregate Index.
The Fund's underperformance is primarily due to its heavy exposure to long
Treasury securities, an area which performed poorly during the period.
Portfolio
Characteristics
---------------
Total Net Assets $144,186,321
- --------------------------------------------------------------------
Average Credit Quality AA
- --------------------------------------------------------------------
Average Maturity 9.0 years
- --------------------------------------------------------------------
Average Duration 5.9 years
- --------------------------------------------------------------------
Interest Rates Rise Worldwide
A surging U.S. economy re-ignited inflationary fears and caused interest rates
to rise across the maturity spectrum in U.S. fixed income markets, causing bond
prices to drop. Curiously, interest rates increased significantly, from 4.98% to
5.63% during the six months, despite the fact that the Federal Reserve Board cut
the Fed Funds rate three times in three months.
Although higher quality paper continued to outperform during January and
February, lower quality bonds and riskier zero coupon securities were well bid
in March, causing them to outperform in the final three months of the period.
The resilient U.S. economy also had an impact on overseas markets, driving
long-term international bond yields higher during the fiscal period.
24
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Total Return Bond Fund
- --------------------------------------------------------------------------------
Portfolio Manager Commentary
Domestic Investment Grade Strategy
Within the domestic investment grade portion, duration was nearly 110% of the
benchmark for much of the first three months, before we became concerned about
the market's momentum and shortened duration. As our concern dissipated,
duration was extended back to its long position by March 31. Also, the
investment grade corporate bond position was reduced in the final months of the
fiscal period as spreads narrowed from the wider levels seen in the fourth
quarter of 1998. Sales included Barrick Gold, Chrysler, Paine Webber, Household
Finance and Petroleum Geo-Services. These sales were used primarily to purchase
mortgages, while duration was extended through Treasury purchases.
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
Corporate Notes/Bonds 35.4%
U.S. Treasury Obligations 30.2%
Mortgage-Backed Securities 22.4%
Foreign Bonds 9.1%
Yankee Obligations 2.0%
Repurchase Agreements 0.9%
High Yield and International Exposure
We made some sector adjustments within the portfolio's high yield component.
During the final months of the fiscal period, we increased our exposure to the
Cable & Media sector due to strong fundamentals in those businesses, coupled
with increasing merger and acquisition activity among cable companies.
Conversely, we eliminated our modest exposure to the healthcare industry,
because we anticipate certain post-acute care providers to continue to struggle
with stricter Medicare reimbursement guidelines.
Within the Fund's international portion, quality was the main focus; we invested
in countries with stable political climates, favorable economic conditions and
large, liquid securities markets. Consequently, the Fund's largest international
positions were in Germany, the United Kingdom and Sweden. As of March 31, 1999,
the Fund's assets were split rather evenly between corporate bonds and
government securities.
- --------------------------------------------------------------------------------
Portfolio Quality
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
U.S. Government - 30.4%
AAA - 29.2%
B - 11.9%
BA - 8.1%
BAA - 7.9%
A - 6.8%
AA - 5.0%
CAA - 0.4%
Less than CAA - 0.3%
25
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Adjustale Rate Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September
Six Months Ended Year Ended February 28, 30,
March 31, 1999 Year Ended ----------------------- -------------------------
(Unaudited) September 30, 1998 (a) 1998 1997 (b) 1996 # 1995 1994
<S> <C> <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 $ 9.93
------- ------- ----------- ----------- ------- ------- -------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.30 0.35 0.64 0.28 0.64 0.63 0.63
.........................................................................
Net realized and
unrealized gains or
losses on securities (0.07) (0.07) 0.04 0++ 0 0.01 (0.49)
------- ------- ----------- ----------- ------- ------- -------
.........................................................................
Total from investment
operations 0.23 0.28 0.68 0.28 0.64 0.64 0.14
------- ------- ----------- ----------- ------- ------- -------
.........................................................................
Distributions to
shareholders from (0.30) (0.35) (0.64) (0.25) (0.61) (0.60) (0.46)
.........................................................................
Net investment income
------- ------- ----------- ----------- ------- ------- -------
.........................................................................
Net asset value, end of
period $ 9.61 $ 9.68 $ 9.75 $ 9.71 $ 9.68 $ 9.65 $ 9.61
------- ------- ----------- ----------- ------- ------- -------
.........................................................................
Total return 2.45% 2.88% 7.15% 2.97% 6.86% 6.87% 1.43%
.........................................................................
Ratios and supplemental
data
.........................................................................
Net assets, end of
period (thousands) $21,132 $23,174 $ 25,981 $ 70,264 $65,974 $23,616 $25,200
.........................................................................
Ratios to average net
assets
.........................................................................
Expenses* 0.30%+ 0.33%+ 0.30% 0.30%+ 0.30% 0.30% 0.30%
.........................................................................
Net investment income 6.23%+ 6.12%+ 6.63% 6.79%+ 6.84% 6.61% 5.15%
.........................................................................
Portfolio turnover rate 29% 46% 107% 44% 85% 56% 63%
.........................................................................
<CAPTION>
Year Ended September
Year Ended February 28, 30,
Six Months Ended ----------------------- -------------------------
March 31, 1999 Year Ended 1994
(Unaudited) September 30, 1998 (a) 1998 1997 (b) 1996 1995 (c)
<S> <C> <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 $ 9.73
------- ------- ----------- ----------- ------- ------- -------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.28 0.33 0.59 0.28 0.65# 0.64 0.17
Net realized and
unrealized gains or
losses on securities (0.06) (0.08) 0.06 0++ (0.03) (0.02) (0.13)
------- ------- ----------- ----------- ------- ------- -------
.........................................................................
Total from investment
operations 0.22 0.25 0.65 0.28 0.62 0.62 0.04
------- ------- ----------- ----------- ------- ------- -------
.........................................................................
Net investment income
------- ------- ----------- ----------- ------- ------- -------
.........................................................................
Distributions to
shareholders from (0.29) (0.33) (0.61) (0.24) (0.59) (0.58) (0.16)
.........................................................................
Net asset value, end of
period $ 9.61 $ 9.68 $ 9.76 $ 9.72 $ 9.68 $ 9.65 $ 9.61
------- ------- ----------- ----------- ------- ------- -------
.........................................................................
.........................................................................
Total return 2.33% 2.63% 6.89% 2.97% 6.60% 6.60% 0.35%
.........................................................................
Ratios and supplemental
data
.........................................................................
Net assets, end of
period (thousands) $12,998 $ 9,645 $ 10,320 $ 3,564 $14,361 $ 2,871 $ 1
.........................................................................
Ratios to average net
assets
.........................................................................
Expenses* 0.55%+ 0.57%+ 0.55% 0.55%+ 0.55% 0.55% 0.43%+
.........................................................................
Net investment income 6.02%+ 5.82%+ 6.15% 6.39%+ 6.64% 6.70% 5.03%+
.........................................................................
Portfolio turnover rate 29% 46% 107% 44% 85% 56% 63%
.........................................................................
</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.
(c) For the period from May 23, 1994 (commencement of class operations) to Sep-
tember 30, 1994.
# Net investment income is based on weighted average shares throughout the pe-
riod.
+ Annualized.
++ Amount represents less than $0.01 per share.
* The ratio of expenses to average net assets excludes fee credits but includes
fee waivers.
See Combined Notes to Financial Statements.
26
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Core Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1999 Period Ended
(Unaudited) September 30, 1998 (a)
<S> <C> <C>
CLASS I
Net asset value, beginning of period $ 11.02 $ 10.68
-------- --------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.30 0.51
.........................................................................
Net realized and unrealized gains or
losses on securities (0.34) 0.34
-------- --------
.........................................................................
Total from investment operations (0.04) 0.85
-------- --------
.........................................................................
Distributions to shareholders from
.........................................................................
Net investment income (0.31) (0.51)
.........................................................................
Net realized gains (0.22) 0
-------- --------
.........................................................................
Total distributions to shareholders (0.53) (0.51)
-------- --------
.........................................................................
Net asset value, end of period $ 10.45 $ 11.02
-------- --------
.........................................................................
Total return (0.41%) 8.12%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $120,645 $125,070
.........................................................................
Ratios to average net assets
.........................................................................
Expenses* 0.42%+ 0.42%+
.........................................................................
Net investment income 5.68%+ 5.99%+
.........................................................................
Portfolio turnover rate 44% 77%
.........................................................................
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1999 Period Ended
(Unaudited) September 30, 1998 (b)
<S> <C> <C>
CLASS IS
Net asset value, beginning of period $11.02 $10.66
------ ------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.29 0.35
.........................................................................
Net realized and unrealized gains or
losses on securities (0.35) 0.36
------ ------
.........................................................................
Total from investment operations (0.06) 0.71
------ ------
.........................................................................
Distributions to shareholders from
.........................................................................
Net investment income (0.29) (0.35)
.........................................................................
Net realized gains (0.22) 0
------ ------
.........................................................................
Total distributions to shareholders (0.51) (0.35)
------ ------
.........................................................................
Net asset value, end of period $10.45 $11.02
------ ------
.........................................................................
Total return (0.53%) 6.74%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $ 781 $ 286
.........................................................................
Ratios to average net assets
.........................................................................
Expenses* 0.67%+ 0.68%+
.........................................................................
Net investment income 5.52%+ 5.76%+
.........................................................................
Portfolio turnover rate 44% 77%
.........................................................................
</TABLE>
(a) For the period from December 19, 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
* The ratio of expenses to average net assets excludes fee credits but includes
fee waivers.
See Combined Notes to Financial Statements.
27
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Core Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1999 Period Ended
(Unaudited) September 30, 1998 (a)
<S> <C> <C>
CLASS IC
Net asset value, beginning of period $ 11.02 $ 10.68
-------- --------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.30 0.55
.........................................................................
Net realized and unrealized gains or
losses on securities (0.34) 0.34
-------- --------
.........................................................................
Total from investment operations (0.04) 0.89
-------- --------
.........................................................................
Distributions to shareholders from
.........................................................................
Net investment income (0.31) (0.55)
.........................................................................
Net realized gains (0.22) 0
-------- --------
.........................................................................
Total distributions to shareholders (0.53) (0.55)
-------- --------
.........................................................................
Net asset value, end of period $ 10.45 $ 11.02
-------- --------
.........................................................................
Total return (0.41%) 8.55%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $456,192 $471,421
.........................................................................
Ratios to average net assets
Expenses* 0.42%+ 0.42%+
.........................................................................
Net investment income 5.67%+ 5.98%+
.........................................................................
Portfolio turnover rate 44% 77%
.........................................................................
</TABLE>
(a) For the period from November 24, 1997 (commencement of operations) to Sep-
tember 30, 1998.
+ Annualized.
* The ratio of expenses to average net assets excludes fee credits but includes
fee waivers.
See Combined Notes to Financial Statements.
28
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1999 Period Ended
(Unaudited) September 30, 1998 (a)
<S> <C> <C>
CLASS I
Net asset value, beginning of period $ 6.12 $ 5.96
-------- --------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.17 0.31
.........................................................................
Net realized and unrealized gains or
losses on securities (0.16) 0.16
-------- --------
.........................................................................
Total from investment operations 0.01 0.47
-------- --------
.........................................................................
Distributions to shareholders from
.........................................................................
Net investment income (0.17) (0.31)
-------- --------
.........................................................................
Net asset value, end of period $ 5.96 $ 6.12
-------- --------
.........................................................................
Total return 0.23% 8.06%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $602,077 $668,907
.........................................................................
Ratios to average net assets
.........................................................................
Expenses* 0.49%+ 0.52%+
.........................................................................
Net investment income 5.76%+ 5.99%+
.........................................................................
Portfolio turnover rate 23% 46%
.........................................................................
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1999 Period Ended
(Unaudited) September 30, 1998 (b)
<S> <C> <C>
CLASS IS
Net asset value, beginning of period $ 6.12 $ 5.97
------- ------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.17 0.20
.........................................................................
Net realized and unrealized gains or
losses on securities (0.16) 0.15
------- ------
.........................................................................
Total from investment operations 0.01 0.35
------- ------
.........................................................................
Distributions to shareholders from
.........................................................................
Net investment income (0.17) (0.20)
------- ------
.........................................................................
Net asset value, end of period $ 5.96 $ 6.12
------- ------
.........................................................................
Total return 0.11% 5.94%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $12,135 $9,808
.........................................................................
Ratios to average net assets
.........................................................................
Expenses* 0.74%+ 0.77%+
.........................................................................
Net investment income 5.55%+ 5.65%+
.........................................................................
Portfolio turnover rate 23% 46%
.........................................................................
</TABLE>
(a) For the period from November 24, 1997 (commencement of operations) to Sep-
tember 30, 1998.
(b) For the period from March 9, 1998 (commencement of class operations) to
September 30, 1998.
+ Annualized
* The ratio of expenses to average net assets excludes fee credits but includes
fee waivers.
See Combined Notes to Financial Statements.
29
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Income Plus Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1999 Period Ended
(Unaudited) September 30, 1998 (a)
<S> <C> <C>
CLASS I
Net asset value, beginning of period $ 5.92 $ 5.72
---------- ----------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.17 0.30
.........................................................................
Net realized and unrealized gains or
losses on securities (0.25) 0.20
---------- ----------
.........................................................................
Total from investment operations (0.08) 0.50
---------- ----------
.........................................................................
Distributions to shareholders from
.........................................................................
Net investment income (0.17) (0.30)
.........................................................................
Net realized gains (0.05) 0
---------- ----------
.........................................................................
Total distributions to shareholders (0.22) (0.30)
---------- ----------
.........................................................................
Net asset value, end of period $ 5.62 $ 5.92
---------- ----------
.........................................................................
Total return (1.34%) 8.99%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $1,294,116 $1,367,240
.........................................................................
Ratios to average net assets
.........................................................................
Expenses* 0.49%+ 0.51%+
.........................................................................
Net investment income 5.86%+ 6.09%+
.........................................................................
Portfolio turnover rate 26% 37%
.........................................................................
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1999 Period Ended
(Unaudited) September 30, 1998 (b)
<S> <C> <C>
CLASS IS
Net asset value, beginning of period $ 5.92 $ 5.71
------ ------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.16 0.19
.........................................................................
Net realized and unrealized gains or
losses on securities (0.25) 0.21
------ ------
.........................................................................
Total from investment operations (0.09) 0.40
------ ------
.........................................................................
Distributions to shareholders from
.........................................................................
Net investment income (0.16) (0.19)
.........................................................................
Net realized gains (0.05) 0
------ ------
.........................................................................
Total distributions to shareholders (0.21) (0.19)
------ ------
.........................................................................
Net asset value, end of period $ 5.62 $ 5.92
------ ------
.........................................................................
Total return (1.46%) 7.21%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $9,748 $7,528
.........................................................................
Ratios to average net assets
.........................................................................
Expenses* 0.74%+ 0.75%+
.........................................................................
Net investment income 5.66%+ 5.80%+
.........................................................................
Portfolio turnover rate 26% 37%
.........................................................................
</TABLE>
(a) For the period from November 24, 1997 (commencement of operations) to Sep-
tember 30, 1998.
(b) For the period from March 2, 1998 (commencement of class operations) to
September 30, 1998.
+ Annualized.
* The ratio of expenses to average net assets excludes fee credits but includes
fee waivers.
See Combined Notes to Financial Statements.
30
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Intermediate Term Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1999 Period Ended
(Unaudited) September 30, 1998 (a)
<S> <C> <C>
CLASS I
Net asset value, beginning of period $ 67.11 $ 64.84
-------- --------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 1.49 2.57
.........................................................................
Net realized and unrealized gains or
losses on securities (1.32) 2.27
-------- --------
.........................................................................
Total from investment operations 0.17 4.84
-------- --------
.........................................................................
Distributions to shareholders from
.........................................................................
Net investment income (1.49) (2.57)
.........................................................................
Net realized gains (0.89) 0
-------- --------
.........................................................................
Total distributions to shareholders (2.38) (2.57)
-------- --------
.........................................................................
Net asset value, end of period $ 64.90 $ 67.11
-------- --------
.........................................................................
Total return 0.27% 7.61%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $724,569 $746,874
.........................................................................
Ratios to average net assets
.........................................................................
Expenses* 0.58%+ 0.62%+
.........................................................................
Net investment income 4.52%+ 4.59%+
.........................................................................
Portfolio turnover rate 53% 47%
.........................................................................
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1999 Period Ended
(Unaudited) September 30, 1998 (b)
<S> <C> <C>
CLASS IS
Net asset value, beginning of period $67.11 $65.91
------ ------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 1.40 1.66
.........................................................................
Net realized and unrealized gains or
losses on securities (1.31) 1.20
------ ------
.........................................................................
Total from investment operations 0.09 2.86
------ ------
.........................................................................
Distributions to shareholders from
.........................................................................
Net investment income (1.41) (1.66)
.........................................................................
Net realized gains (0.89) 0
------ ------
.........................................................................
Total distributions to shareholders (2.30) (1.66)
------ ------
.........................................................................
Net asset value, end of period $64.90 $67.11
------ ------
.........................................................................
Total return 0.15% 4.41%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $5,633 $4,736
.........................................................................
Ratios to average net assets
.........................................................................
Expenses* 0.83%+ 0.89%+
.........................................................................
Net investment income 4.29%+ 4.35%+
.........................................................................
Portfolio turnover rate 53% 47%
.........................................................................
</TABLE>
(a) For the period from November 24, 1997 (commencement of operations) to Sep-
tember 30, 1998.
(b) For the period from March 2, 1998 (commencement of class operations) to
September 30, 1998.
+ Annualized.
* The ratio of expenses to average net assets excludes fee credits but in-
cludes fee waivers.
See Combined Notes to Financial Statements.
31
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select International Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Period Ended Year Ended June 30,
March 31, 1999 September 30, ---------------------------------------------------
(Unaudited) # 1998 # (a) 1998 (b) 1997 (b) 1996 (b) 1995 (b) 1994 (b)(c)
<S> <C> <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 $ 10.00
------- ------- ------- ------- ------- ------- -------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.22 0.11 0.47 0.49 0.47 0.62 0.25
.........................................................................
Net realized and
unrealized gains or
losses on securities (0.03) 0.22 (0.06) 0.09 0.30 0.24 (1.15)
------- ------- ------- ------- ------- ------- -------
.........................................................................
Total from investment
operations 0.19 0.33 0.41 0.58 0.77 0.86 (0.90)
------- ------- ------- ------- ------- ------- -------
.........................................................................
Distributions to
shareholders from
net investment income (0.33) (0.13) (0.63) (0.74) (0.69) (0.30) (0.04)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 9.38 $ 9.52 $ 9.32 $ 9.54 $ 9.70 $ 9.62 $ 9.06
------- ------- ------- ------- ------- ------- -------
.........................................................................
.........................................................................
Total return 1.98% 3.56% 4.42% 6.18% 8.00% 9.70% 9.00%
.........................................................................
Ratios and supplemental
data
.........................................................................
Net assets, end of
period (thousands) $44,390 $46,607 $36,722 $34,590 $32,998 $26,898 $24,957
.........................................................................
Ratios to average net
assets
Expenses* 0.67%+ 0.76%+ 0.81% 0.85% 0.71% 0.64% 0.73%+
.........................................................................
Net investment income 4.55%+ 4.89%+ 4.90% 5.14% 5.81% 6.84% 5.04%+
.........................................................................
Portfolio turnover rate 58% 3% 46% 90% 67% 133% 161%
.........................................................................
<CAPTION>
Six Months Ended Period Ended Year Ended June 30,
March 31, 1999 September 30, ---------------------------------------------------
(Unaudited) # 1998 # (a) 1998 (b) 1997 (b) 1996 (b) 1995 (b) 1994 (b)(c)
<S> <C> <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 $ 10.00
------- ------- ------- ------- ------- ------- -------
Net realized and
unrealized gains or
losses on securities (0.02) 0.23 (0.01) 0.14 0.12 0.24 (1.11)
------- ------- ------- ------- ------- ------- -------
.........................................................................
Income from investment
operations
Total from investment
operations 0.18 0.34 0.39 0.56 0.73 0.85 (0.92)
------- ------- ------- ------- ------- ------- -------
.........................................................................
Net investment income 0.20 0.11 0.40 0.42 0.61 0.61 0.19
.........................................................................
Distributions to
shareholders from
net investment income (0.32) (0.13) (0.61) (0.72) (0.66) (0.28) (0.04)
------- ------- ------- ------- ------- ------- -------
.........................................................................
Net asset value, end of
period $ 9.37 $ 9.51 $ 9.30 $ 9.52 $ 9.68 $ 9.61 $ 9.04
------- ------- ------- ------- ------- ------- -------
.........................................................................
.........................................................................
.........................................................................
Total return 1.84% 3.61% 4.16% 5.92% 7.74% 9.57% 9.22%
.........................................................................
Ratios and supplemental
data
.........................................................................
Net assets, end of
period (thousands) $ 130 $ 129 $ 198 $ 182 $ 152 $ 170 $ 167
.........................................................................
Ratios to average net
assets
Expenses* 0.92%+ 1.00%+ 1.06% 1.10% 0.96% 0.89% 0.98%+
.........................................................................
Net investment income 4.29%+ 4.65%+ 4.65% 4.89% 5.56% 6.59% 1.37%+
.........................................................................
Portfolio turnover rate 58% 3% 46% 90% 67% 133% 161%
.........................................................................
</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.
(c) For the period from December 15, 1993 (commencement of operations) to June
30, 1994.
# Net investment income is based on weighted average shares outstanding
throughout the period.
+ Annualized.
* The ratio of expenses to average net assets excludes fee credits but includes
fee waivers.
See Combined Notes to Financial Statements.
32
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Limited Duration Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1999 Period Ended
(Unaudited) September 30, 1998 # (a)
<S> <C> <C>
CLASS I
Net asset value, beginning of
period $ 10.52 $ 10.42
------- -------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.30 0.53
.........................................................................
Net realized and unrealized gains
or losses on securities (0.14) 0.10
------- -------
.........................................................................
Total from investment operations 0.16 0.63
------- -------
.........................................................................
Distributions to shareholders from
.........................................................................
Net investment income (0.30) (0.53)
.........................................................................
Net realized gains (0.02) 0
------- -------
.........................................................................
Total distributions to shareholders (0.32) (0.53)
------- -------
.........................................................................
Net asset value, end of period $ 10.36 $ 10.52
------- -------
.........................................................................
Total return 1.54% 6.21%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period
(thousands) $75,799 $70,810
.........................................................................
Ratios to average net assets
.........................................................................
Expenses* 0.30%+ 0.30%+
.........................................................................
Net investment income 5.82%+ 5.97%+
.........................................................................
Portfolio turnover rate 59% 78%
.........................................................................
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1999 Period Ended
(Unaudited) September 30, 1998 # (b)
<S> <C> <C>
CLASS IS
Net asset value, beginning of
period $10.52 $10.41
------ ------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.29 0.11
.........................................................................
Net realized and unrealized gains
or losses on securities (0.14) 0.11
------ ------
.........................................................................
Total from investment operations 0.15 0.22
------ ------
.........................................................................
Distributions to shareholders from
.........................................................................
Net investment income (0.29) (0.11)
.........................................................................
Net realized gains (0.02) 0
------ ------
.........................................................................
Total distributions to shareholders (0.31) (0.11)
------ ------
.........................................................................
Net asset value, end of period $10.36 $10.52
------ ------
.........................................................................
Total return 1.42% 2.12%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period
(thousands) $ 693 $ 614
.........................................................................
Ratios to average net assets
.........................................................................
Expenses* 0.55%+ 0.55%+
.........................................................................
Net investment income 5.58%+ 5.84%+
.........................................................................
Portfolio turnover rate 59% 78%
.........................................................................
</TABLE>
(a) For the period from November 24, 1997 (commencement of operations) to Sep-
tember 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 pe-
riod.
+ Annualized.
* The ratio of expenses to average net assets excludes fee credits but includes
fee waivers.
See Combined Notes to Financial Statements.
33
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Total Return Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1999 Period Ended
(Unaudited) September 30, 1998 (a)
<S> <C> <C>
CLASS I
Net asset value, beginning of period $ 99.71 $ 100.00
-------- --------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 3.17 3.08
.........................................................................
Net realized and unrealized gains or
losses on securities (3.56) (0.29)
-------- --------
.........................................................................
Total from investment operations (0.39) 2.79
-------- --------
.........................................................................
Distributions to shareholders from
.........................................................................
Net investment income (3.17) (3.08)
-------- --------
.........................................................................
Net asset value, end of period $ 96.15 $ 99.71
-------- --------
.........................................................................
Total return (0.42%) 2.83%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $137,583 $135,998
.........................................................................
Ratios to average net assets
.........................................................................
Expenses* 0.48%+ 0.41%+
.........................................................................
Net investment income 6.49%+ 6.88%+
.........................................................................
Portfolio turnover rate 79% 80%
.........................................................................
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1999 Period Ended
(Unaudited) September 30, 1998 (b)
<S> <C> <C>
CLASS IS
Net asset value, beginning of period $99.71 $99.67
------ ------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 3.04 1.05
.........................................................................
Net realized and unrealized gains or
losses on securities (3.55) 0.04
------ ------
.........................................................................
Total from investment operations (0.51) 1.09
------ ------
.........................................................................
Distributions to shareholders from
.........................................................................
Net investment income (3.05) (1.05)
------ ------
.........................................................................
Net asset value, end of period $96.15 $99.71
------ ------
.........................................................................
Total return (0.54%) 1.10%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $6,603 $ 24
.........................................................................
Ratios to average net assets
Expenses* 0.74%+ 0.66%+
.........................................................................
Net investment income 6.31%+ 6.51%+
.........................................................................
Portfolio turnover rate 79% 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.
* The ratio of expenses to average net assets excludes fee credits but includes
fee waivers.
See Combined Notes to Financial Statements.
34
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Adjustable Rate Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ADJUSTABLE RATE MORTGAGE SECURITIES - 79.2%
FHLMC - 34.8%
$ 1,444,172 6.801%, 1/1/22...................................... $ 1,496,523
679,650 6.90%, 3/1/22....................................... 692,818
2,553,564 6.958%, 6/1/16...................................... 2,607,036
958,581 7.056%, 10/1/21..................................... 1,000,817
670,916 7.097%, 3/1/21...................................... 686,327
950,224 7.136%, 3/1/19...................................... 986,451
698,986 7.145%, 7/1/30...................................... 720,284
1,413,137 7.197%, 11/1/21..................................... 1,452,882
1,176,841 7.324%, 4/1/22...................................... 1,211,229
159,478 7.395%, 4/1/20...................................... 162,942
72,443 7.453%, 7/1/19...................................... 74,265
769,817 7.50%, 9/1/17....................................... 789,662
------------
11,881,236
------------
FNMA - 44.4%
860,299 5.802%, 4/1/38...................................... 867,020
980,928 5.966%, 11/1/28..................................... 986,901
836,939 6.106%, 5/1/36...................................... 844,785
407,580 6.45%, 1/1/22....................................... 416,751
255,408 6.753%, 7/1/27...................................... 262,192
226,629 6.862%, 10/1/17..................................... 232,401
427,161 6.915%, 1/1/22...................................... 437,771
1,836,760 6.945%, 5/1/22...................................... 1,886,132
171,843 6.963%, 12/1/22..................................... 176,516
88,234 6.99%, 2/1/17....................................... 90,219
598,010 7.01%, 11/1/18...................................... 612,212
767,029 7.054%, 9/1/18...................................... 801,783
2,021,012 7.082%, 9/1/21...................................... 2,081,642
1,170,914 7.15%, 1/1/31....................................... 1,205,679
644,477 7.154%, 12/1/19..................................... 663,812
188,912 7.192%, 7/1/20...................................... 194,963
859,018 7.237%, 11/1/17..................................... 888,547
666,264 7.27%, 1/1/16....................................... 685,213
1,439,334 7.37%, 12/1/23...................................... 1,473,058
345,255 7.416%, 10/1/16..................................... 355,126
------------
15,162,723
------------
Total Adjustable Rate Mortgage Securities
(cost $27,163,868)................................. 27,043,959
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
FIXED RATE MORTGAGES - 10.5%
FHLMC - 2.9%
$ 250,000 5.00%, 1/15/04..................................... $ 244,163
574,414 STRIPS CMO, Ser. 20, Class F, IO,
6.232%, 7/1/29..................................... 574,055
19,183 7.25%, 11/1/08..................................... 19,396
135,809 10.50%, 4/1/04..................................... 140,531
------------
978,145
------------
FNMA - 3.8%
92,104 9.50%, 4/15/05..................................... 95,760
262,141 10.50%, 3/1/01..................................... 268,285
523,294 10.75%, 10/1/12.................................... 569,035
323,403 11.00%, 1/1/18..................................... 356,011
------------
1,289,091
------------
GNMA - 3.8%
1,282,309 10.25%, 11/15/29................................... 1,306,519
------------
Total Fixed Rate Mortgages
(cost $3,625,201)................................. 3,573,755
------------
U. S. TREASURY OBLIGATIONS - 5.9%
U.S. Treasury Notes - 5.9%
400,000 4.50%, 1/31/01..................................... 396,500
600,000 5.50%, 5/31/03..................................... 606,372
1,000,000 5.75%, 11/30/02.................................... 1,018,280
------------
Total U. S. Treasury Obligations
(cost $2,027,301)................................. 2,021,152
------------
REPURCHASE AGREEMENT - 2.4%
823,000 Evergreen Joint Repurchase Agreement, in a joint
trading account, (5.00%, dated 3/31/99, maturity
value $823,114) (cost $823,000) (a)............... 823,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $33,639,370)........................... 98.0% 33,461,866
Other Assets and Liabilities - net............ 2.0 668,214
----- -----------
Net Assets.................................... 100.0% $34,130,080
===== ===========
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government
and/or agency obligations based on market prices at March 31, 1999.
Note: The maturity date included in each security description is the
stated maturity 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 ob-
ligations.
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 Securi-
ties
See Combined Notes to Financial Statements.
35
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Core Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - 2.6%
$ 2,000,000 Jet Equipment Trust,
9.41%, 6/15/10 (a)............................... $ 2,306,766
11,356,000 Saxon Asset Securities Trust,
Ser. 1998-4, Class AF5,
6.93%, 1/25/30................................... 11,483,925
1,150,074 UCFC Home Equity Loan Trust,
Ser. 1996-C1, Class A3,
7.15%, 12/15/13.................................. 1,178,245
------------
Total Asset-Backed Securities
(cost $14,931,632)............................... 14,968,936
------------
CORPORATE BONDS - 18.7%
Banks - 3.4%
4,600,000 BankAmerica Corp., Notes,
9.50%, 6/1/04.................................... 5,270,887
3,600,000 NBD Bank N.A., Deb. (Subord.), 8.25%, 11/1/24..... 4,207,417
7,500,000 State Street Boston Corp., Notes, 7.35%, 6/15/26.. 8,108,910
2,155,000 SunTrust Banks, Inc., Notes (Subord.), 6.00%,
2/15/26.......................................... 2,092,913
------------
19,680,127
------------
Cable/Other Video
Distribution - 0.8%
4,400,000 Comcast Cable Communications, Notes,
6.20%, 11/15/08.................................. 4,346,927
------------
Communication Systems & Services - 0.4%
2,400,000 Panamsat Corp., Notes,
6.375%, 1/15/08.................................. 2,293,627
------------
Finance - 3.5%
6,000,000 Associates Corp. North America, Deb., 5.96%,
5/15/37.......................................... 6,124,890
7,000,000 General Electric Capital Corp., Notes, 6.29%,
12/15/07......................................... 7,097,860
Merrill Lynch & Co., Inc.:
1,300,000 Deb., 8.40%, 11/1/19............................. 1,481,412
5,600,000 Notes, 6.375%, 10/15/08........................... 5,597,542
------------
20,301,704
------------
Industrial Specialty Products & Services - 1.5%
4,938,000 Dow Chemical Co., Notes,
8.55%, 10/15/09.................................. 5,716,426
2,700,000 Owens Corning, Notes,
7.50%, 5/1/05.................................... 2,743,192
------------
8,459,618
------------
Insurance - 1.6%
Allstate Corp.:
3,400,000 Deb., 6.75%, 5/15/18............................. 3,419,863
4,390,000 Notes, 6.75%, 6/15/03............................. 4,492,098
1,400,000 Lincoln National Corp., Notes,
7.00%, 3/15/18................................... 1,412,123
------------
9,324,084
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Manufacturing - Distributing - 0.4%
$ 1,800,000 Deere & Co., Deb.,
8.95%, 6/15/19.................................... $ 2,176,893
------------
Oil/Energy - 2.4%
13,560,000 Phillips Petroleum Co., Deb., 7.125%, 3/15/28...... 13,683,057
------------
Paper & Packaging - 1.9%
5,120,000 Caliber Systems Inc., Notes, 7.80%, 8/1/06......... 5,308,743
5,600,000 Westvaco Corp., Deb., 7.75%, 2/15/23............... 5,875,873
------------
11,184,616
------------
Utilities - 2.8%
2,710,000 Alabama Power Co., Sr. Notes, Series G,
5.375%, 10/1/08................................... 2,582,199
1,100,000 Alltel Corp., Deb.,
6.50%, 11/1/13.................................... 1,118,251
4,975,000 AT&T Corp., Notes,
6.50%, 3/15/29.................................... 4,887,873
1,700,000 Carolina Power & Light Co., 1st Mtge., 8.625%,
9/15/21........................................... 2,016,428
3,060,000 National Rural Utilities Cooperative Finance,
5.75%, 11/1/08.................................... 3,010,030
2,700,000 Tenaska Washington Partners LP, Bonds,
6.79%, 9/23/11 (a)................................ 2,707,803
------------
16,322,584
------------
Total Corporate Bonds (cost $106,211,417).......... 107,773,237
------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 1.2%
2,498,434 CMO Trust, Ser. 22, Class Y, 7.95%, 5/1/17......... 2,487,490
4,300,000 FNMA REMIC, Ser. 1992-163, Class M, 7.75%,
9/25/22........................................... 4,459,427
------------
Total Collateralized Mortgage Obligations (cost
$6,781,306)....................................... 6,946,917
------------
MORTGAGE-BACKED SECURITIES - 26.6%
FHLMC:
16,004,789 6.50%, 4/1/28...................................... 15,970,379
14,524,930 7.00%, 4/1/28...................................... 14,764,882
1,190,560 7.50%, 5/1/09...................................... 1,230,044
584,462 8.00%, 10/1/25..................................... 609,196
FHLMC PC Guaranteed:
2,900,000 5.85%, 1/25/19..................................... 2,898,216
2,000,000 6.50%, 4/15/18..................................... 2,016,723
5,330,021 FNMA,
6.50%, 10/1/00..................................... 5,397,286
GNMA:
48,717,332 6.00%, 3/15/11 - 3/15/29........................... 47,405,224
19,619,662 6.50%, 4/1/99 - 7/15/28............................ 19,657,938
429,786 6.625%, 4/1/99..................................... 437,432
27,961,452 7.00%, 2/15/11 - 7/15/28........................... 28,476,873
</TABLE>
36
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Core Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MORTGAGE-BACKED SECURITIES - continued
GNMA (continued):
$ 3,946,951 7.50%, 8/15/12 - 3/15/26.......................... $ 4,091,014
9,184,181 8.00%, 6/15/24 - 8/15/27.......................... 9,575,825
719,687 9.00%, 4/15/20 - 8/15/21.......................... 768,983
297,315 9.50%, 2/15/21.................................... 320,764
------------
Total Mortgage-Backed Securities (cost
$153,448,775).................................... 153,620,779
------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 10.8%
Farm Credit Systems Financial Assist Corp.:
8,000,000 8.80%, 6/10/05................................... 9,318,624
5,800,000 9.375%, 7/21/03................................... 6,628,373
4,800,000 FFCB,
8.65%, 10/1/99................................... 4,888,440
41,100,000 FNMA,
6.00%, 5/15/08................................... 41,640,794
------------
Total U.S. Government & Agency Obligations
(cost $61,853,421) .............................. 62,476,231
------------
U.S. TREASURY OBLIGATIONS - 21.6%
U.S. Treasury Bonds:
14,160,000 6.875%, 8/15/25................................... 16,022,932
1,400,000 8.75%, 5/15/17.................................... 1,843,188
3,950,000 8.875%, 8/15/17................................... 5,265,844
U.S. Treasury Notes:
5,125,800 3.625%, 7/15/02................................... 5,093,764
65,590,000 5.875%, 8/31/99 - 11/15/05........................ 66,787,220
30,000,000 6.25%, 5/31/99.................................... 30,075,000
------------
Total U.S. Treasury Obligations
(cost $126,867,199).............................. 125,087,948
------------
YANKEE OBLIGATIONS - 10.7%
Banks - 3.2%
4,800,000 Bayerische Landesbank Girozen, 6.20%, 2/9/06...... 4,796,534
4,800,000 Korea Development Bank, 6.625%, 11/21/03.......... 4,553,698
Svenska Handelsbanken:
3,400,000 8.125%, 8/15/07................................... 3,734,550
4,800,000 8.35%, 7/15/04.................................... 5,257,588
------------
18,342,370
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - continued
Electronic Equipment &
Services - 0.9%
$ 5,100,000 Philips Electronics NV, 7.125%, 5/15/25........... $ 5,155,978
------------
Finance - 1.7%
6,700,000 BHP Fin. USA Ltd.,
8.50%, 12/1/12................................... 7,661,671
2,150,000 WMC Fin. USA Ltd., 6.50%, 11/15/03................ 2,159,041
------------
9,820,712
------------
Metals & Mining - 0.5%
2,900,000 Placer Dome Inc.,
8.50%, 12/31/45.................................. 2,804,439
------------
Oil/Energy - 1.6%
7,720,000 Petro Canada Ltd.,
8.60%, 1/15/10................................... 9,370,768
------------
Utilities - 1.9%
9,855,000 Hydro-Quebec,
8.00%, 2/1/13.................................... 11,311,470
------------
Government - 0.9%
3,400,000 Japan Fin. Corp. Municipal Enterprises,
6.85%, 4/15/06................................... 3,534,824
1,400,000 New Brunswick (Province of Canada),
7.625%, 2/15/13.................................. 1,585,822
------------
5,120,646
------------
Total Yankee Obligations (cost $57,581,022)....... 61,926,383
------------
REPURCHASE AGREEMENT - 7.4%
42,596,674 Dresdner Bank AG 4.85%, dated 3/31/99, due 4/1/99,
maturity value, $42,602,413 (cost $42,506,674)
(b).............................................. 42,596,674
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -(cost $570,271,446)...... 99.6% 575,397,105
Other Assets and Liabilities - net.......... 0.4 2,220,270
----- ------------
Net Assets.................................. 100.0% $577,617,375
===== ============
</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 $43,600,000 U.S. Treasury Bills,
4/8/99 to 9/16/99; value including accrued interest - $43,449,097.
Summary of Abbreviations:
CMO Collateralized Mortgage Obligation
FFCB Federal Farm Credit Bank
FHLMC Federal Home Loan Mortgage Corp.
FNMA Federal National Mortgage Assn.
GNMA General National Mortgage Assn.
REMIC Real Estate Mortgaged Investment Conduit
See Combined Notes to Financial Statements.
37
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - 12.2%
Amresco Residential Securities Mtge. Loan Trust:
$ 4,252,962 Ser. 98-2, Class A1, 6.50%, 12/25/15............... $ 4,264,381
8,000,000 Ser. 98-2, Class A2, 6.245%, 4/25/22............... 8,040,120
Case Equipment Loan Trust:
500,000 Ser. 95-B, Class CTFS,
6.45%, 9/15/02..................................... 500,522
1,857,000 Ser. 97-B, Class A4, 6.41%, 9/15/04................ 1,877,752
200,000 Ser. 98-A, Class A4, 5.83%, 2/15/05................ 199,445
Contimortgage Home Equity Loan Trust:
4,999,962 Ser. 96-1, Class A5, 6.15%, 3/15/11................ 5,021,337
3,185,000 Ser. 97-2, Class A9, 7.09%, 4/15/28................ 3,277,349
1,516,445 Ser. 97-4, Class A3, 6.26%, 7/15/12................ 1,522,776
5,495,999 Empire Funding Home Loan Owner Trust,
Ser. 98-1, Class A4, 6.26%, 12/25/12.............. 5,483,056
496,478 EQCC Home Equity Loan Trust, Ser. 96-1, Class A2,
5.82%, 9/15/09.................................... 498,090
First Plus Home Loan Trust: Ser. 97-2, Class A5,
660,000 6.82%, 4/10/23.................................... 666,095
2,455,000 Ser. 97-3, Class A5, 6.86%, 10/10/13............... 2,494,808
467,911 GCC Home Equity Trust, Ser. 90-1, Class A,
10.00%, 7/15/05................................... 469,149
849,473 Heller Equipment Asset Receivables Trust,
Ser. 97-1, Class A2, 6.39%, 5/25/05............... 854,990
1,252,369 IMC Home Equity Loan Trust, Ser. 97-2, Class A3,
6.94%, 11/20/11................................... 1,262,006
2,329,038 Life Financial Home Loan Owner Trust,
Ser. 97-3, Class A2, 6.79%, 10/25/11.............. 2,330,540
MBNA Master Credit Card Trust: Ser. 96-J, Class A,
2,910,000 5.09%, 4/15/99.................................... 2,913,332
1,570,000 Ser. 98-A, Class A, 5.05%, 4/15/99................. 1,569,552
1,700,000 Metlife Capital Equipment Loan Trust, Ser. 97-A,
Class A, 6.85%, 5/20/08........................... 1,742,645
392,137 Olympic Automobile Receivables Trust,
Ser. 95-D, Class B,
6.10%, 4/15/02.................................... 394,202
Premier Auto Trust:
1,500,000 Ser. 95-3, Class CTFS,
6.25%, 8/6/01..................................... 1,502,917
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - continued
Premier Auto Trust - continued
$ 2,265,000 Ser. 97-3, Class A5, 6.34%, 1/6/02................. $ 2,298,284
2,705,000 Ser. 98-2, Class A4, 5.82%, 12/6/02................ 2,721,893
3,021,941 Prudential Securities Secured Financing Corp.,
Ser. 94-4, Class A1, 8.12%, 2/15/25............... 3,100,859
2,840,000 Sears Credit Account Master Trust, Ser. 95-3, Class
A,
7.00%, 10/15/04................................... 2,896,757
2,500,000 Southern Pacific Secured Assets Corp.,
Ser. 98-1, Class A6, 7.08%, 3/25/28............... 2,553,787
793,409 The Money Store Home Equity Trust, Ser. 92-B, Class
A, 6.90%, 7/15/07................................. 795,602
3,697,000 Toyota Auto Lease Trust,
Ser. 97-A, Class A2,
6.35%, 4/26/04.................................... 3,743,786
627,510 Union Acceptance Corp., Ser. 96-A, Class A,
5.40%, 4/7/03..................................... 628,479
842,274 Western Financial Grantor Trust, Ser. 95-3, Class
A2,
6.05%, 11/1/00.................................... 843,542
WFS Financial Owner Trust:
5,000,000 Ser. 97-D, Class A4, 6.25%, 3/20/03................ 5,067,625
3,200,000 Ser. 98-A, Class A4, 5.95%, 2/20/03................ 3,229,648
------------
Total Asset-Backed Securities (cost $74,328,441)... 74,765,326
------------
CORPORATE BONDS - 27.6%
Automotive Equipment & Manufacturing - 1.4%
3,567,000 General Motors Acceptance Corp., Notes,
5.875%, 1/22/03................................... 3,567,371
5,000,000 Johnson Controls, Inc.,
Notes,
6.30%, 2/1/08..................................... 5,030,715
------------
8,598,086
------------
Banks - 6.1%
85,000 Banc One Corp.,
Notes (Subord.),
7.60%, 5/1/07..................................... 92,465
BB & T Corp.,
Notes (Subord.):
6,850,000 6.375%, 6/30/99.................................... 6,807,194
1,000,000 7.05%, 5/23/03..................................... 1,032,464
2,000,000 Chase Manhattan Corp., Notes (Subord.),
8.00%, 5/15/04.................................... 1,991,450
5,000,000 Citigroup Inc.,
Notes,
6.125%, 6/15/00................................... 5,030,440
</TABLE>
38
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Banks - continued
First Chicago Corp.:
$ 3,000,000 MTN, Notes (Subord.), 9.20%, 12/17/01............. $ 3,229,428
7,725,000 Notes (Subord.),
9.00%, 6/15/99.................................... 7,779,678
2,120,000 Nationsbank Corp.,
Sr. Notes,
5.75%, 3/15/01................................... 2,125,080
1,020,000 NCNB Corp.,
Debs.,
9.125%, 10/15/01................................. 1,099,968
1,970,000 Security Pacific Corp., Sr. Notes (Subord.),
11.50%, 11/15/00................................. 2,130,642
899,000 Societe Generale - New York, Notes (Subord.),
7.40%, 6/1/06.................................... 944,773
5,000,000 Swiss Bank Corp. - New York, Notes (Subord.),
6.75%, 7/15/05................................... 5,111,235
------------
37,374,817
------------
Brokers - 3.7%
1,545,000 Bear Stearns Co.,
Bonds,
6.65%, 12/1/04................................... 1,563,630
Lehman Brothers Holdings:
75,000 MTN, Notes,
6.71%, 10/12/99................................... 75,362
5,000,000 Sr. Notes,
6.625%, 11/15/00.................................. 5,045,840
Lehman Brothers, Inc.:
3,500,000 MTN, Sr. Notes (Subord.), 6.84%, 10/7/99.......... 3,518,889
2,640,000 Sr. Notes (Subord.), 7.25%, 4/15/03............... 2,695,799
2,350,000 Merrill Lynch & Co.,
Bonds,
6.00%, 2/12/03................................... 2,358,495
3,210,000 Morgan Stanley Dean Witter, MTN, Sr. Notes,
5.89%, 3/20/00................................... 3,214,404
1,665,000 Paine Webber Group, Inc.,
Notes,
6.50%, 11/1/05................................... 1,643,139
2,405,000 Salomon Smith Barney, Inc.,
Notes,
6.25%, 1/15/05................................... 2,397,439
------------
22,512,997
------------
Building Products - 0.2%
1,545,000 CSR America, Inc.,
Notes,
6.875%, 7/21/05.................................. 1,543,147
------------
Cable/Other Video Distribution - 0.5%
1,288,000 Tele-Communications, Inc.,
Sr. Notes,
7.25%, 8/1/05.................................... 1,363,337
1,690,000 Time Warner, Inc.,
Notes,
8.11%, 8/15/06................................... 1,868,996
------------
3,232,333
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Diversified Companies - 0.2%
$ 1,355,000 Philip Morris, Inc.,
6.15%, 3/15/10................................... $ 1,362,371
------------
Finance - 5.8%
Associates Corp. of North America, Sr. Notes:
5,000,000 6.00%, 6/15/00.................................... 5,029,845
1,890,000 6.75%, 7/15/01.................................... 1,937,001
5,000,000 Case Corp.,
Notes,
6.25%, 12/1/03................................... 4,914,295
3,720,000 CIT Group Holdings, Inc.,
Notes,
6.375%, 8/1/02................................... 3,781,945
2,000,000 Commercial Credit Co.,
Notes,
6.75%, 5/15/00................................... 2,028,600
8,750,000 First Security Corp. - Utah, MTN, Sr. Notes,
6.08%, 2/9/01.................................... 8,772,785
3,620,000 Household Fin. Corp.,
MTN, Sr. Notes,
6.00%, 5/8/00.................................... 3,634,799
1,695,000 Loews Corp.,
Notes,
6.75%, 12/15/06.................................. 1,731,588
3,000,000 SFFED Corp.,
Debs.,
11.20%, 9/1/04 (a)............................... 3,495,000
------------
35,325,858
------------
Food & Beverage Products - 0.3%
1,800,000 Nabisco, Inc.,
Notes,
6.00%, 2/15/01................................... 1,801,057
------------
Healthcare Products & Services - 1.1%
7,175,000 Columbia/HCA Healthcare Corp., MTN,
6.875%, 7/15/01.................................. 6,929,199
------------
Industrial Specialty Products & Services - 0.2%
1,000,000 Harcourt General, Inc.,
Sr. Notes,
8.25%, 6/1/02.................................... 1,041,741
------------
Insurance - 2.5%
7,000,000 Associated P&C Holdings, Inc.,
Sr. Notes,
6.75%, 7/15/03 (a)............................... 6,914,789
2,250,000 Horace Mann Educators Corp., Sr. Notes,
6.625%, 1/15/06.................................. 2,222,552
5,000,000 Metropolitan Life Insurance Co., Notes,
7.00%, 11/1/05 (a)............................... 5,113,960
1,000,000 U.S. Life Corp.,
Notes,
6.375%, 6/15/00.................................. 1,011,038
------------
15,262,339
------------
</TABLE>
39
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Office Equipment & Supplies - 0.4%
$ 2,492,561 Xerox Rental Equipment Trust, 6.20%, 12/26/05 (a).. $ 2,488,666
------------
Oil/Energy - 0.3%
1,600,000 Duke Capital Corp.,
Sr. Notes, Ser. A,
6.25%, 7/15/05.................................... 1,600,349
------------
Real Estate - 0.2%
1,250,000 EOP Operating LP,
Notes,
6.376%, 2/15/02................................... 1,243,706
------------
Retailing & Wholesale - 0.3%
1,585,000 Gap Inc.,
Notes,
6.90%, 9/15/07.................................... 1,677,638
------------
Telecommunication Services & Equipment - 0.3%
2,000,000 MCI Worldcom Inc.,
Sr. Notes,
6.125%, 8/15/01................................... 2,019,878
------------
Transportation - 2.4%
2,890,416 Continental Airlines, Inc.,
Ser. 971B,
7.461%, 4/1/13.................................... 3,032,813
5,000,000 U. S. Airways,
Ser. 98-1,
7.35%, 1/30/18.................................... 5,052,225
6,000,000 Union Pacific Corp.,
Debs.,
9.625%, 12/15/02.................................. 6,722,772
------------
14,807,810
------------
Utilities - 1.7%
423,000 Commonwealth Edison Co.,
MTN,
9.05%, 10/15/99................................... 430,199
5,000,000 LG & E Capital Corp.,
MTN,
5.75%, 11/1/01 (a)................................ 4,933,335
1,200,000 Pennsylvania Power & Light Resources, Inc.,
1st Mtge., 7.75%, 5/1/02.......................... 1,263,346
3,675,000 PG & E Gas Transmission Northwest, Sr. Notes,
7.10%, 6/1/05..................................... 3,840,640
------------
10,467,520
------------
Total Corporate Bonds (cost $167,569,358).......... 169,289,512
------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 10.7%
3,250,000 Blackrock Capital Finance L.P., Ser. 97-C1, Class
D,
7.15%, 10/25/26................................... 3,221,562
5,350,000 Carco Auto Loan Master Trust, Ser. 97-1, Class A,
6.689%, 8/15/04................................... 5,345,854
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS - continued
$ 5,000,000 CS First Boston Mtge. Securities Corp.,
Ser. 1998-C1, Class A1B, 6.48%, 5/17/08........... $ 5,003,025
CWMBS, Inc.:
492,434 Ser. 97-A1, Class A1, 7.00%, 3/25/27............... 494,854
809,233 Ser. 97-A3, Class A10, 7.25%, 5/25/27.............. 811,528
2,250,000 DLJ Mtge. Acceptance Corp.,
Ser. 93-MF7, Class A2, 7.95%, 6/18/03............. 2,368,474
FHLMC:
1,675,000 Ser. 1519, Class F, 6.75%, 3/15/07................. 1,703,984
3,505,083 Ser. B-02, Class 1, 5.75%, 10/15/16................ 3,510,779
FHLMC PC Gtd.:
3,708,143 Ser. 12, Class A,
9.25%, 11/15/19.................................... 3,953,306
519,151 Ser. 1608, Class FN, 5.70%, 11/15/23............... 521,814
762,391 Ser. 1935, Class FL, 5.70%, 2/15/27................ 768,754
FNMA:
5,790 Ser. 91-61, Class G, 7.00%, 9/25/20................ 5,774
5,750,000 Ser. 98-W8, Class A4, 6.02%, 9/25/28............... 5,728,006
5,000,000 Iroquois Trust,
Ser. 97-3, Class A, 6.68%, 11/10/03 (a)........... 5,033,725
3,000,000 Nationslink Funding Corp.,
Ser. 98-1, Class D, 6.803%, 1/20/08............... 2,980,200
Potomac Gurnee Fin. Corp.:
2,419,976 Ser. 1, Class A,
6.887%, 12/21/26 (a)............................... 2,463,257
2,000,000 Ser. 1, Class B,
7.003%, 12/21/26 (a)............................... 2,050,830
4,184,981 Prudential Home Mtge. Securities, Ser. 93-39, Class
A8, 6.50%, 10/25/08............................... 4,202,830
4,421,813 Prudential Securities Secured Financing Corp.,
Ser. 1998-C1, Class A1A1,
6.105%, 11/15/02.................................. 4,440,893
2,465,642 RMF Commercial Mtge. Pass-Through Certificates,
Ser. 1997-1, Class A1,
6.38%, 1/15/19.................................... 2,474,161
1,922,616 Saxon Mtge. Securities Corp.,
Ser. 93-8A, Class 1A2, 7.375%, 9/25/23............ 1,939,391
7,000,000 Structured Asset Securities Corp.,
Ser. 96-CFL, Class C, 6.525%, 2/25/28............. 7,062,335
------------
Total Collateralized Mortgage Obligations (cost
$65,672,623)...................................... 66,085,336
------------
</TABLE>
40
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MORTGAGE-BACKED SECURITIES - 4.9%
FHLMC:
$ 285,922 6.00%, 12/1/00..................................... $ 287,695
1,144,419 6.50%, 7/1/04...................................... 1,163,096
1,869,696 7.00%, 1/1/00...................................... 1,888,505
175,361 8.00%, 2/1/00 - 4/1/00............................. 178,958
FNMA:
89,811 5.90%, 4/1/99...................................... 90,605
3,189,005 6.00%, 11/1/08..................................... 3,198,030
1,675,070 6.50%, 8/1/10 - 10/1/10............................ 1,696,196
5,174,248 11.00%, 2/15/25.................................... 5,755,301
GNMA:
6,626,578 8.05%, 6/15/19 - 10/15/20.......................... 6,967,533
7,027,630 8.30%, 9/15/19 - 1/15/21........................... 7,428,395
1,340,821 9.20%, 4/15/18 - 9/15/18........................... 1,452,820
------------
Total Mortgage-Backed Securities (cost
$30,034,213)...................................... 30,107,134
------------
U. S. TREASURY OBLIGATIONS - 25.6%
U.S. Treasury Notes:
12,000,000 5.625%, 5/15/08.................................... 12,221,256
7,000,000 5.75%, 4/30/03..................................... 7,135,625
44,470,000 6.125%, 8/15/07.................................... 46,512,863
5,180,000 6.25%, 2/15/03 - 2/15/07........................... 5,449,081
21,500,000 6.50%, 10/15/06.................................... 22,917,667
29,500,000 6.625%, 5/15/07.................................... 31,804,687
7,220,000 7.00%, 7/15/06..................................... 7,899,135
5,695,000 7.25%, 5/15/04 - 8/15/04........................... 6,213,428
12,000,000 7.875%, 11/15/04................................... 13,481,256
3,480,000 8.00%, 5/15/01..................................... 3,685,539
------------
Total U. S. Treasury Obligations
(cost $152,900,641)............................... 157,320,537
------------
YANKEE OBLIGATIONS - 4.9%
Banks - 4.2%
Korea Development Bank Bonds:
5,000,000 7.25%, 5/15/06..................................... 4,775,670
5,000,000 7.375%, 9/17/04.................................... 4,887,410
14,865,000 National Bank of Canada, Notes (Subord.), Ser. B,
8.125%, 8/15/04................................... 16,173,090
------------
25,836,170
------------
Finance - 0.2%
1,500,000 FBG Finance Ltd, Notes, 6.75%, 11/15/05 (a)........ 1,480,350
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - continued
Oil/Energy - 0.3%
$ 1,625,000 Amoco Argentina Oil Co.,
MTN, 6.75%, 2/1/07................................ $ 1,717,219
------------
Utilities - 0.2%
1,000,000 Hydro Quebec, MTN, 7.52%, 7/17/03.................. 1,061,545
------------
Total Yankee Obligations (cost $29,682,282)........ 30,095,284
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 12.1%
FHLB:
2,000,000 5.45%, 10/19/05.................................... 1,976,818
3,200,000 5.467%, 2/19/04.................................... 3,176,000
5,000,000 5.72%, 8/25/03..................................... 5,029,670
5,000,000 Ser. CK08,
5.905%, 3/27/08................................... 5,017,215
3,720,000 Ser. GJ08,
5.89%, 6/30/08.................................... 3,729,717
1,810,000 Ser. H400,
6.10%, 10/12/00................................... 1,819,955
5,000,000 Ser. IQ08,
6.07%, 8/28/08.................................... 4,949,525
4,000,000 Ser. KP07,
6.54%, 12/12/07................................... 4,047,628
3,700,000 Ser. NR05,
6.23%, 5/18/05.................................... 3,709,250
2,320,761 Ser. YU03,
6.043%, 4/28/03................................... 2,326,563
10,000,000 Sr. Notes, Ser. AT04,
7.70%, 9/20/04.................................... 10,980,640
FHLMC:
3,000,000 6.00%, 5/15/16..................................... 3,005,161
5,867,820 Ser. 1991, Class PA,
6.00%, 3/15/14.................................... 5,890,968
Sr. Debs.:
2,250,000 6.51%, 1/8/07...................................... 2,342,419
3,000,000 7.55%, 4/26/06..................................... 3,005,361
1,825,000 Sr. Notes,
6.97%, 6/16/05.................................... 1,852,691
FNMA:
6,441,000 5.125%, 2/13/04.................................... 6,329,622
4,495,000 6.95%, 11/13/06.................................... 4,606,539
550,000 Sr. Notes,
8.70%, 6/10/99.................................... 553,969
------------
Total U.S. Government Agency Obligations (cost
$74,012,878)...................................... 74,349,711
------------
</TABLE>
See Combined Notes to Financial Statements.
41
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
REPURCHASE AGREEMENT - 1.2%
$ 7,354,348 Dresdner Bank AG, 4.85%, dated 3/31/99, due 4/1/99,
maturity value $7,355,339 (cost $7,354,348) (b)... $ 7,354,348
------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
Total Investments -
(cost $601,554,784).. 99.2% 609,367,188
Other Assets and
Liabilities - net.... 0.8 4,845,058
----- ------------
Net Assets............ 100.0% $614,212,246
===== ============
</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 $7,665,000 U.S. Treasury Bills,
9/16/99 to 9/23/99; value including accrued interest - $7,502,015.
Summary of Abbreviations:
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corp.
FNMA Federal National Mortgage Assn.
GNMA General National Mortgage Assn.
MTN Medium Term Note
See Combined Notes to Financial Statements.
42
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Income Plus Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - 2.2%
$1,553,658 Corestates Home Equity Trust,
Ser. 1993-2, Class A,
5.10%, 3/15/09..................................... $ 1,546,549
4,996,363 Empire Funding Home Loan
Owner Trust,
Ser. 1998-1, Class A4,
6.64%, 12/25/12.................................... 4,984,597
2,200,000 First Plus Home Loan Trust,
Ser. 1997-2, Class A5,
6.82%, 4/10/23..................................... 2,220,317
3,427,242 Harley-Davidson Eaglemark
Motorcycle Trust,
Ser. 1997-3, Class A1,
5.98%, 12/15/01.................................... 3,455,226
3,293,415 Harley-Davidson Eaglemark
Ownership Trust,
Ser. 1996-3, Class A2,
6.35%, 10/15/02 (a) ............................... 3,314,963
10,000,000 Jet Equipment Trust,
Ser. A10,
9.41%, 6/15/10 (a)................................. 11,533,830
1,297,168 Xerox Rental Equipment Trust,
Ser. 1996-A,
6.20%, 12/25/05 (a) ............................... 1,295,141
-------------
Total Asset-Backed Securities
(cost $26,751,542)................................. 28,350,623
-------------
CORPORATE BONDS AND NOTES - 30.3%
Banks - 4.4%
973,000 Banca Commerziale Italiana,
Deposit Notes,
8.25%, 7/15/07..................................... 1,076,308
1,540,000 BankBoston, N.A.,
Subord.,
7.00%, 9/15/07..................................... 1,613,768
5,000,000 Banq Paribas, New York,
Notes (Subord.),
6.95%, 7/22/13..................................... 5,004,275
7,500,000 Comerica Bank,
Notes (Subord.),
7.125%, 12/1/13.................................... 7,579,440
5,000,000 Fleet Financial Group Inc.,
Notes (Subord.),
7.625%, 12/1/99.................................... 5,071,240
1,150,000 FNBC Inc.,
Pass-Thru Certificates,
Ser.1993-A,
8.08%, 1/5/18...................................... 1,258,887
4,000,000 HUBCO Capital Trust II,
Ser. B,
7.65%, 6/15/28..................................... 4,015,376
144,000 Irving Bank Corp.,
Debs.,
8.50%, 6/1/02...................................... 144,209
1,685,000 KeyCorp,
Notes (Subord.),
7.50%, 6/15/06..................................... 1,799,701
7,000,000 Mellon Capital I,
Ser. A,
7.72%, 12/1/26..................................... 7,208,222
1,600,000 Midlantic Corp.,
Debs.,
9.25%, 9/1/99...................................... 1,624,397
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS AND NOTES - continued
Banks - continued
$ 5,000,000 NCNB Texas National Bank of
Dallas, Notes,
9.50%, 6/1/04..................................... $ 5,729,225
11,000,000 PNC Inc.,
Institutional Capital Trust B,
8.315%, 5/15/27 (a)............................... 11,781,352
3,000,000 SFFED Corp.,
Debs.
11.20%, 9/1/04 (a)................................ 3,495,000
-------------
57,401,400
-------------
Building, Construction & Furnishings - 0.4%
5,000,000 Owens-Corning, Inc.,
Notes,
7.50%, 5/1/05..................................... 5,079,985
-------------
Chemical & Agricultural Products - 0.3%
4,000,000 Freeport McMoran Resource
Partners, Sr. Notes,
7.00%, 2/15/08.................................... 3,896,860
-------------
Electrical Equipment & Services - 0.4%
5,000,000 Texas Instruments, Inc.,
Notes,
6.125%, 2/1/06.................................... 5,029,800
-------------
Finance & Insurance - 8.9%
10,000,000 Citigroup Capital II,
Bonds
7.75%, 12/1/36.................................... 10,542,740
10,500,000 Continental Corp.,
Notes,
8.375%, 8/15/12................................... 11,122,261
3,000,000 ERP Operating Limited
Partnership, Notes,
6.63%, 4/13/15.................................... 2,973,339
1,490,000 Fleet Financial Group Inc.,
Debs. (Subord.),
6.875%, 1/15/28................................... 1,470,673
5,000,000 Geico Corp.,
Notes,
7.50%, 4/15/05.................................... 5,347,350
10,000,000 General Elec. Capital Corp.,
Notes,
6.29%, 12/15/01................................... 10,139,800
1,000,000 General Motors Acceptance Corp.,
Debs.,
9.625%, 5/15/00................................... 1,044,083
2,250,000 Goldman Sachs Group, L.P.,
Notes,
6.375%, 6/15/00 (a)............................... 2,268,698
10,000,000 Heller Financial Inc.,
Notes,
6.00%, 3/19/04.................................... 9,949,650
Lehman Brothers Holdings, Inc.:
1,250,000 7.38%, 5/15/04..................................... 1,285,009
5,000,000 6.00%, 2/26/01..................................... 4,975,465
10,000,000 Liberty Mutual Insurance Co.,
Notes,
8.20%, 5/4/07 (a)................................. 10,829,930
</TABLE>
43
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS AND NOTES - continued
Finance & Insurance - continued
$10,000,000 Loews Corp.,
Sr. Notes,
7.00%, 10/15/23................................... $ 9,533,410
5,000,000 MBNA America Bank National Association,
Notes,
5.96%, 8/10/00.................................... 4,970,020
3,000,000 Merrill Lynch & Co., Inc.,
Debs.,
8.40%, 11/1/19.................................... 3,418,644
3,125,000 Morgan Stanley Dean Witter, Inc.,
Sr. Notes, MTN,
5.89%, 3/20/00.................................... 3,129,287
5,000,000 Paine Webber Group, Inc.,
6.50%, 11/1/05.................................... 4,934,350
8,504,309 Topaz Ltd.,
Sr. Notes,
Ser. 1997-1,
6.92%, 3/10/07 (a)................................ 8,740,559
750,000 Wesco Financial Corp.,
Debs.,
8.875%, 11/1/99................................... 765,071
9,000,000 Western Investment REIT,
Sr. Notes,
7.30%, 9/15/10.................................... 8,346,330
-------------
115,786,669
-------------
Food & Beverage Products - 0.7%
7,000,000 Coca Cola Enterprises Inc.,
Notes,
7.875%, 2/1/02.................................... 7,387,261
1,390,000 Philip Morris, Inc.,
Bonds,
6.15%, 3/15/10.................................... 1,397,562
-------------
8,784,823
-------------
Forest Products - 0.1%
1,124,000 Weyerhaeuser Co.,
Debs.,
6.95%, 8/1/17..................................... 1,129,488
-------------
Gaming - 0.3%
4,000,000 Circus Circus Enterprises Inc.,
Sr. Debs. (Subord.),
7.625%, 7/15/13................................... 3,642,552
-------------
Healthcare Products & Services - 0.2%
3,000,000 Baxter Int'l, Inc.,
Debs.,
9.25%, 12/15/99................................... 3,077,859
-------------
Industrial Specialty Products & Services - 0.3%
4,000,000 United States Filter Corp.,
Bonds,
6.50%, 1/1/99..................................... 3,986,724
-------------
Machinery - Diversified - 0.5%
5,000,000 Deere & Co.,
Debs.,
8.95%, 6/15/19.................................... 6,046,925
-------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS AND NOTES - continued
Oil/Energy - 2.3%
$ 6,500,000 Atlantic Richfield Co.,
Debs.,
9.00%, 4/1/21..................................... $ 8,143,805
1,656,000 Lasmo (USA), Inc.,
6.75%, 12/15/07................................... 1,581,352
12,000,000 Occidental Petroleum Corp.,
Debs.,
7.20%, 4/1/28...................................... 11,131,272
2,500,000 Suburban Propane Partners, L.P.,
7.54%, 6/30/11..................................... 2,580,250
6,000,000 Transocean Offshore Inc.,
Notes,
7.45%, 4/15/27..................................... 6,240,252
-------------
29,676,931
-------------
Paper & Packaging - 1.8%
10,000,000 Fort James Corp.,
Sr. Notes,
6.625%, 9/15/04.................................... 10,164,020
5,000,000 Georgia-Pacific Corp.,
Debs.,
7.70%, 6/15/15..................................... 5,263,255
8,000,000 Westvaco Corp.,
Debs.,
7.75%, 2/15/23..................................... 8,394,104
-------------
23,821,379
-------------
Publishing, Broadcasting & Entertainment - 0.9%
1,132,000 Belo (A.H.) Corp.,
Sr. Notes,
6.875%, 6/1/02..................................... 1,155,386
Time Warner, Inc.:
4,000,000 6.88%, 6/15/18..................................... 3,996,764
1,915,000 8.11%, 8/15/06..................................... 2,117,827
5,000,000 United States West Capital
Funding, Inc.,
6.375%, 7/15/08.................................... 5,074,880
-------------
12,344,857
-------------
Retailing & Wholesale - 1.3%
3,500,000 Dayton Hudson Corp.,
Notes,
5.875%, 11/1/08.................................... 3,430,312
6,000,000 Dillards Inc.,
Notes,
6.08%, 8/1/00...................................... 6,025,356
1,685,000 Gap Inc.,
Notes,
6.90%, 9/15/07..................................... 1,783,483
8,050,000 Macsaver Financial Services, Inc.,
Notes,
7.60%, 8/1/07...................................... 5,272,750
-------------
16,511,901
-------------
Telecommunication Services & Equipment - 3.4%
5,000,000 Airtouch Communications, Inc.,
Notes,
7.00%, 10/1/03..................................... 5,217,640
</TABLE>
44
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS AND NOTES - continued
Telecommunication Services & Equipment - continued
$3,012,600 Bellsouth Savings & Employee Stock Option Trust,
MTN,
9.125%, 7/1/03.................................... $ 3,231,402
GTE Corp., Debs.:
7,500,000 6.36%, 4/15/06.................................... 7,618,410
5,000,000 9.38%, 12/1/00.................................... 5,294,270
10,500,000 Qwest Communications Int'l, Inc.,
Sr. Notes,
7.50%, 11/1/08.................................... 10,867,500
5,000,000 Sprint Spectrum L P,
Sr. Notes,
11.00%, 8/15/06................................... 5,775,000
1,385,000 Tele-Communications, Inc.,
Sr. Notes,
7.25%, 8/1/05..................................... 1,466,010
5,000,000 Worldcom, Inc.,
Sr. Notes,
6.95%, 8/15/28.................................... 5,098,360
--------------
44,568,592
--------------
Transportation - 1.9%
4,000,000 AMERCO,
Sr. Notes,
7.20%, 4/1/02..................................... 3,979,840
2,000,000 Consolidated Rail Corp.,
Debs.,
9.75%, 6/1/00..................................... 2,094,216
1,429,676 Continental Airlines Inc.,
Pass-Thru Certificates,
Ser.1997-CI,
7.42%, 4/1/07..................................... 1,479,221
10,000,000 Norfolk Southern Corp.,
Bonds,
7.70%, 5/15/17.................................... 10,885,310
2,862,898 Southwest Airlines Co.,
Pass Thru Certificates,
Ser. 96A1,
7.67%, 1/2/14..................................... 3,100,419
3,819,000 Union Pacific Corp.,
Notes,
6.125%, 1/15/04................................... 3,793,714
--------------
25,332,720
--------------
Utilities - Electric - 2.2%
3,000,000 Carolina Power & Light Co.,
1st Mtge.,
8.625%, 9/15/21................................... 3,558,402
Pennsylvania Power & Light Resources, Inc., 1st
Mtge:
8,500,000 7.38%, 3/1/14..................................... 9,073,376
15,000,000 7.75%, 5/1/02..................................... 15,791,820
1,000,000 Virginia Elec. & Power Co.,
Notes,
MTN,
9.30%, 6/9/99..................................... 1,006,894
--------------
29,430,492
--------------
Total Corporate Bonds and Notes (cost
$388,081,074).................................... 395,549,957
--------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
COLLATERALLIZED MORTGAGE OBLIGATIONS - 3.9%
$2,082,028 CMO Trust,
Ser. 22, Class Y,
7.95%, 5/1/17...................................... $ 2,072,908
FHLMC:
3,500,000 5.85%, 1/25/19..................................... 3,497,847
5,776,529 6.50%, 4/15/18..................................... 5,824,829
2,285,000 6.75%, 3/15/07..................................... 2,324,540
7,724,000 FNMA,
7.75%, 9/25/22..................................... 8,010,375
1,620,000 FNMA, REMIC,
6.50%, 3/25/19..................................... 1,628,934
5,000,000 Paine Webber Mortgage Acceptance Corp.,
Ser. 1996-M1, Class E,
7.655%, 1/2/12 (a)................................. 5,156,055
Potomac Gtd. Fin. Corp.:
16,455,836 6.89%, 12/21/26.................................... 16,750,149
5,250,000 7.22%, 12/21/26.................................... 5,283,311
--------------
Total Collaterallized Mortgage Obligations
(cost $49,611,020)................................ 50,548,948
--------------
MORTGAGE-BACKED SECURITIES - 1.5%
FHLMC:
581,349 6.00%, 8/1/99...................................... 584,453
5,000,000 6.24%, 10/6/04..................................... 5,150,780
2,035,385 6.50%, 11/1/99..................................... 2,051,118
2,000,000 6.52%, 8/25/00..................................... 2,033,978
2,000,000 6.75%, 5/30/06..................................... 2,115,132
5,333,469 7.50%, 5/1/09 - 10/1/10............................ 5,512,563
1,585,795 8.00%, 7/1/25...................................... 1,652,906
--------------
Total Mortgage-Backed Securities
(cost $18,817,609)................................ 19,100,930
--------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 17.8%
FFCB:
2,000,000 5.75%, 2/9/05...................................... 1,997,908
7,000,000 6.37%, 10/30/07.................................... 7,237,608
2,000,000 7.60%, 7/24/06..................................... 2,214,850
1,100,691 FHA, Putable Project Loans,
7.43%, 1/1/24...................................... 1,167,904
FHLB:
10,000,000 5.38%, 3/2/01...................................... 10,023,110
2,000,000 5.50%, 1/21/03..................................... 2,000,276
10,000,000 5.62%, 1/27/03..................................... 10,039,960
10,000,000 5.75%, 4/30/01..................................... 10,096,170
5,000,000 5.82%, 7/13/05..................................... 5,048,075
5,000,000 5.89%, 6/30/08..................................... 5,013,060
5,000,000 6.19%, 5/6/08...................................... 5,116,200
5,000,000 6.50%, 11/29/05.................................... 5,225,470
Financial Assistance Corp., Bonds:
5,000,000 9.38%, 7/21/03..................................... 5,714,115
17,500,000 8.80%, 6/10/05..................................... 20,384,490
</TABLE>
45
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Income Plus Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS - continued
FNMA:
$47,170,000 5.13%, 2/13/04.................................... $ 46,354,336
5,000,000 5.78%, 10/10/00................................... 5,042,495
10,000,000 6.21%, 11/7/07.................................... 10,249,800
2,000,000 6.29%, 2/11/02.................................... 2,044,846
5,000,000 6.38%, 1/16/02.................................... 5,128,930
5,000,000 6.48%, 8/27/07.................................... 5,213,095
1,443,360 7.50%, 6/1/11..................................... 1,491,958
1,529,366 7.50%, 8/1/25..................................... 1,574,589
2,437,038 6.50%, 9/1/10..................................... 2,466,331
2,722,188 7.50%, 5/1/27..................................... 2,800,506
5,846,316 7.50%, 6/1/02..................................... 5,996,274
2,209,305 6.50%, 8/1/10..................................... 2,238,071
2,769,469 7.00%, 11/1/26.................................... 2,814,888
GNMA:
3,803,618 6.00%, 4/15/11.................................... 3,802,401
10,707,367 6.50%, 2/15/09 - 5/15/28.......................... 10,747,971
4,463,168 7.00%, 2/15/11 - 6/15/26.......................... 4,577,441
4,799,473 7.50%, 12/15/25 - 6/15/27......................... 4,949,728
1,093,051 8.00%, 12/15/26................................... 1,139,484
453,094 8.50%, 7/15/21.................................... 479,112
2,666,474 9.00%, 1/15/20 - 10/15/21......................... 2,858,941
1,507,853 9.50%, 12/15/20................................... 1,629,205
Private Export Funding Corp.:
10,000,000 7.30%, 1/31/02.................................... 10,494,270
2,000,000 7.90%, 3/31/00.................................... 2,052,244
5,000,000 6.90%, 1/31/03.................................... 5,239,565
--------------
Total U.S. Government & Agency Obligations
(cost $226,951,480).............................. 232,665,677
--------------
U.S. TREASURY OBLIGATIONS - 31.1%
U.S. Treasury Bonds:
75,000,000 5.50%, 8/15/28.................................... 71,742,225
25,000,000 7.50%, 11/15/16................................... 29,382,825
10,000,000 7.88%, 2/15/21.................................... 12,387,500
25,000,000 8.00%, 11/15/21................................... 31,445,325
15,000,000 8.75%, 5/15/20.................................... 20,100,000
15,000,000 9.00%, 11/15/18................................... 20,371,875
15,000,000 11.25%, 2/15/15................................... 23,404,695
U.S. Treasury Notes:
25,000,000 5.63%, 5/15/08.................................... 25,460,950
15,000,000 5.75%, 8/15/03.................................... 15,304,695
25,000,000 6.13%, 8/15/07.................................... 26,148,450
5,000,000 6.25%, 2/28/02.................................... 5,150,000
25,000,000 6.50%, 5/15/05.................................... 26,515,625
20,000,000 6.88%, 5/15/06.................................... 21,712,500
20,000,000 7.00%, 7/15/06.................................... 21,881,260
10,000,000 7.25%, 5/15/04.................................... 10,896,880
5,000,000 7.50%, 11/15/01................................... 5,289,065
25,000,000 7.88%, 11/15/04................................... 28,085,950
10,000,000 8.00%, 5/15/01.................................... 10,590,630
--------------
Total U.S. Treasury Obligations
(cost $398,760,170).............................. $ 405,870,450
--------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - 9.9%
Banks - 2.6%
$2,000,000 Banco Santiago, S.A.,
Notes (Subord.),
7.00%, 7/18/07..................................... $ 1,727,564
Korea Dev. Bank:
8,000,000 7.25%, 5/15/06..................................... 7,641,072
8,000,000 7.38%, 9/17/04..................................... 7,819,856
2,982,000 Skandinaviska Enskilda Banken,
Notes (Subord.),
6.875%, 2/15/09.................................... 3,042,138
Svenska Handelsbanken:
3,000,000 8.13%, 8/15/07..................................... 3,295,191
5,000,000 8.35%, 7/15/04..................................... 5,476,655
5,000,000 Westpac Banking Co.,
Debs. (Subord.),
9.125%, 8/15/01.................................... 5,340,790
--------------
34,343,266
--------------
Finance & Insurance - 1.8%
10,000,000 Abbey National PLC,
Notes (Subord.), ETM,
6.69%, 10/17/05.................................... 10,209,280
6,000,000 FBG Fin. Ltd.,
Notes,
6.75%, 11/15/05(a) ................................ 5,921,400
5,000,000 Ford Capital BV,
Debs.,
9.875%, 5/15/02.................................... 5,531,870
1,885,000 Santander Fin. Issuances,
6.375%, 2/15/11.................................... 1,811,445
--------------
23,473,995
--------------
Government Agency Notes & Bonds - 2.2%
10,000,000 Manitoba (Province of), Canada,
8.00%, 4/15/02..................................... 10,652,200
7,500,000 Ontario Hydro Corp.,
Debs.,
7.45%, 3/31/13..................................... 8,380,200
8,200,000 Quebec (Province of),
8.80%, 4/15/03..................................... 9,061,000
--------------
28,093,400
--------------
Leisure & Tourism - 0.1%
1,665,000 Royal Caribbean Cruises Ltd.,
Debs.,
7.50%, 10/15/27.................................... 1,686,006
--------------
Metals & Mining - 0.2%
1,785,000 Barrick Gold Fin., Inc.,
7.50%, 5/1/07...................................... 1,845,419
--------------
Oil/Energy - 1.4%
15,000,000 Petro-Canada Ltd.,
8.60%, 1/15/10..................................... 18,207,450
--------------
Paper & Packaging - 0.3%
5,000,000 Celulosa Arauco Y Constitucion,
Notes,
7.20%, 9/15/09..................................... 4,441,070
--------------
</TABLE>
46
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Income Plus Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - continued
Utilities - Electric - 1.3%
$16,500,000 Fletcher Challenge Capital
Canada Inc., Bonds,
7.875%, 3/24/17................................... $ 16,839,124
--------------
Total Yankee Obligations
(cost $121,690,583).............................. 128,929,730
--------------
REPURCHASE AGREEMENT - 2.4%
30,931,009 Dresdner Bank, AG,
4.85%, dated 3/31/99,
due 4/1/99, maturity value $30,935,176
(cost $30,931,009) (b) .......................... 30,931,009
--------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
MUTUAL FUND SHARES
216,759 Valiant General Money Market Fund,
(cost $216,759).................................... $ 216,759
--------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $1,261,811,246)...................... 99.1% 1,292,164,083
Other Assets and
Liabilities - net.......................... 0.9 11,699,349
----- --------------
Net Assets.................................. 100.0% $1,303,863,432
===== ==============
</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 $32,225,000 U.S. Treasury Bills,
due 9/16/99 with a value, including accrued interest, of $31,552,465.
Note: Securities that have been Escrowed to Maturity (ETM) or prerefunded have
been fully collateralized with U.S. Government Securities, cash or both.
Summary of Abbreviations:
MTN Medium Term Note
REIT Real Estate Investment Trust
See Combined Notes to Financial Statements.
47
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Intermediate Term Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 98.7%
Alabama - 3.7%
$ 3,640,000 Alabama Spl. Care Facs. Fin. Auth. RB, Hosp.
Charity Obl. Group, Ser. D, 4.95%, 11/1/14........ $ 3,729,362
21,725,000 Jefferson Cnty., AL Swr. RB,
Capital Improvement, Ser. A,
5.75%, 2/1/38..................................... 23,167,105
------------
26,896,467
------------
Arizona - 0.5%
3,660,000 Phoenix, AZ, SFHRB, Ser. A,
6.60%, 12/1/29.................................... 3,989,473
------------
Arkansas - 0.5%
3,000,000 Arkansas Student Loan Auth., RB,
Ser. B,
7.25%, 6/1/09..................................... 3,461,340
------------
California - 3.0%
1,700,000 Delta Cnty, CA, SFHRB, Ser. A, 6.70%, 6/1/24,
(MBIA)............................................ 1,871,972
4,000,000 Foothill/Eastern Corridor Agcy., CA Toll Road RB,
Sr. Lien, Ser. A,
6.50%, 1/1/32..................................... 4,456,480
10,000,000 Intercommunity Hosp. Auth., CA RB, 5.25%, 11/1/19.. 9,887,900
4,210,000 Palmdale, CA, SFHRB, Ser. A, ETM, 8.00%, 9/1/11.... 5,576,019
------------
21,792,371
------------
Colorado - 5.2%
4,000,000 Arapahoe Cnty., CO, Capital Impt. Hwy. RB,
Prerefunded,
0.00%, 8/31/15,
(Eff. Yield 4.21%) (a)............................ 4,746,200
Colorado HFA, SFHRB:
1,000,000 Sr. Ser. A2,
6.60%, 5/1/28...................................... 1,114,470
1,000,000 Sr. Ser. A3,
6.05%, 10/1/16..................................... 1,090,420
2,250,000 Sr. Ser. C2,
6.875%, 11/1/28.................................... 2,521,575
1,000,000 Sr. Ser. C3,
6.75%, 5/1/17...................................... 1,113,870
2,000,000 Sr. Ser. D3,
6.125%, 11/1/23.................................... 2,160,620
1,105,000 Colorado Student Obl. Bond Auth., Student Loan RB,
Ser. B
6.55%, 12/1/02.................................... 1,157,498
Dawson Ridge CO, Metropolitan Dist. GO, ETM:
18,825,000 Ser. A, (Eff. Yield 5.42%),
0.00%, 10/1/22 (a)................................. 4,900,336
54,685,000 Ser. B, (Eff. Yield 5.58%)
0.00%, 10/1/22 (a)................................. 14,235,052
3,485,000 Larimer Cnty. CO, GO Sch.
Dist. No. R1,
8.50%, 12/15/08, (MBIA)........................... 4,598,597
------------
37,638,638
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Connecticut - 1.1%
Connecticut Dev. Auth., Mtge. RB, Church Homes Inc.
Hlth. Care Proj.:
$ 485,000 4.45%, 4/1/99...................................... $ 485,000
340,000 4.65%, 4/1/00...................................... 342,945
425,000 4.90%, 4/1/02...................................... 434,456
925,000 5.00%, 4/1/03...................................... 948,902
1,220,000 5.40%, 4/1/07...................................... 1,279,463
2,035,000 5.70%, 4/1/12...................................... 2,047,332
2,550,000 5.80%, 4/1/21...................................... 2,575,041
------------
8,113,139
------------
Delaware - 0.4%
3,000,000 Delaware Solid Wst. Sys. RB, Ser. A, 6.75%,
7/1/03............................................ 3,155,730
------------
Florida - 2.1%
Halifax, FL Hosp. Med. Ctr.,
Hlth. Care Facs. RB, Ser. A:
1,080,000 4.60%, 4/1/08, (ACA)............................... 1,079,212
1,200,000 4.75%, 4/1/09, (ACA)............................... 1,205,700
Palm Beach Cnty., FL, Hlth. Facs. Auth. RB:
Abbey DelRay South Proj.:
675,000 4.35%, 10/1/99..................................... 677,990
700,000 4.50%, 10/1/00..................................... 707,714
750,000 4.65%, 10/1/01..................................... 761,490
805,000 4.80%, 10/1/02..................................... 821,776
775,000 5.00%, 10/1/03..................................... 796,475
850,000 5.00%, 10/1/04..................................... 875,135
930,000 5.10%, 10/1/05..................................... 957,974
500,000 5.30%, 10/1/07..................................... 515,885
Waterford Proj.:
475,000 4.35%, 10/1/99..................................... 477,104
675,000 4.50%, 10/1/00..................................... 682,439
725,000 4.65%, 10/1/01..................................... 736,107
5,000,000 Pinellas Cnty., FL, HFA, SFHRB, 5.95%, 3/1/30...... 5,357,100
------------
15,652,101
------------
Georgia - 2.8%
1,500,000 Coffee Cnty., GA, Hosp. Auth. RAN, 6.75%, 12/1/26.. 1,572,705
Fulton Cnty., GA, Dev. Auth. Spl. RB, Delta
Airlines Inc. Proj.:
11,695,000 5.30%, 5/1/13...................................... 11,752,890
7,350,000 5.45%, 5/1/23...................................... 7,300,902
------------
20,626,497
------------
Hawaii - 0.4%
2,500,000 Hawaii Dept. of Budget & Fin., Spl. Purpose RB, The
Queens Hlth. Sys. Group, Ser. A,
6.05%, 7/1/16..................................... 2,716,650
------------
</TABLE>
48
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Intermediate Term Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Illinois - 9.5%
Chicago, IL, O Hare Int'l. Arpt., Spl. Fac. RB
Refunding United Air Lines Proj.:
$11,350,000 Ser. A,
5.35%, 9/1/16...................................... $ 11,266,918
7,500,000 Ser. B,
5.20%, 4/1/11...................................... 7,590,225
Illinois Dev. Fin. Auth. RB:
Community Rehabilitation Providers, Ser. A:
2,540,000 5.70%, 7/1/07...................................... 2,671,749
3,490,000 5.80%, 7/1/08...................................... 3,742,013
5,490,000 Sarah Bush Lincoln Hlth. Ctr.
5.50%, 2/15/16.................................... 5,590,083
Illinois Edl. Facs. Auth. RB:
Alexian Brothers Hlth. Sys.:
6,960,000 5.25%, 1/1/12...................................... 7,212,927
4,255,000 5.25%, 1/1/13...................................... 4,382,650
5,945,000 5.25%, 1/1/14...................................... 6,086,015
4,820,000 Mercy Hosp., ETM,
10.00%, 1/1/15.................................... 6,820,686
12,500,000 Illinois Sales Tax RB Ser. Q,
6.00%, 6/15/12, (MBIA-IBC)........................ 14,058,000
------------
69,421,266
------------
Indiana - 2.4%
1,290,000 Indiana Hsg., SFHRB, Ser. B1,
7.55%, 7/1/10..................................... 1,346,915
6,875,000 Indiana Hlth. Facs. Fin. Auth., Hosp. RB, Charity
Obl. Group, Ser. D, 5.00%, 11/1/26, (MBIA)........ 7,063,031
3,900,000 Indianapolis, IN, Arpt. Auth. RB, Spl. Facs. United
Air Lines Proj., Ser. A, 6.50%, 11/15/31.......... 4,171,518
550,000 Lafayette, IN, PCRB, Anheuser-Bush Inc. Proj.,
6.50%, 6/1/04..................................... 552,580
4,000,000 Wabash, IN, Solid Wst. Disposal RB, Jefferson
Smurfit Corp. Proj, 7.50%, 6/1/26, (Gtd. by JSC,
Inc.)............................................. 4,457,280
------------
17,591,324
------------
Kansas - 0.5%
1,540,000 Newton, KS, Hosp. RB, Newton Hlth. Care Corp., Ser.
A,
5.70%, 11/15/18................................... 1,540,000
1,810,000 Sedgwick & Shawnee Cnty., KS SFHRB, Ser. A,
6.70%, 6/1/29..................................... 2,028,557
------------
3,568,557
------------
Louisiana - 1.6%
East Baton Rouge, LA, Sales & Use Tax RB, Ser. ST:
1,760,000 8.00%, 2/1/02, (FGIC).............................. 1,953,653
1,920,000 8.00%, 2/1/03, (FGIC).............................. 2,193,216
7,625,000 St. John Baptist Parish, LA,
5.35%, 12/1/13.................................... 7,506,507
------------
11,653,376
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Maryland - 2.1%
$ 2,670,000 Frederick Cnty., MD, Spl. Obl., Spl. Tax, Urbana
Community Dev. Auth., 6.25%, 7/1/10............... $ 2,681,695
12,750,000 Northeast, MD, Wst. Disposal Resources, RB,
Baltimore Resco Retrofit Proj.,
5.00%, 1/1/12..................................... 12,577,620
------------
15,259,315
------------
Massachusetts - 1.3%
2,000,000 Massachusetts HFA RB, Residential Dev.,
6.35%, 5/15/03, (COLL: FNMA)...................... 2,134,580
5,665,000 Massachusetts Hlth. & Edl. Facs. Auth. RB:
Caritas Christi Obl. Group A,
5.70%, 7/1/15..................................... 5,712,756
1,750,000 Milford Whitinsville Regl., Ser. C, 5.75%,
7/15/13........................................... 1,787,747
------------
9,635,083
------------
Michigan - 1.8%
Michigan Bldg. Auth. RB, Refunding Facs. Program,
Ser. 1:
3,000,000 4.625%, 10/15/21................................... 2,979,180
3,000,000 5.25%, 10/15/12.................................... 3,130,770
1,000,000 Michigan Strategic Fund, RB, United Wst. Sys.
Proj.,
5.20%, 4/1/10..................................... 1,000,000
6,000,000 Wayne Charter Cnty., MI, Arpt. RB, Detroit Metro,
Ser. B,
5.25%, 12/1/13, (MBIA)............................ 6,152,280
------------
13,262,230
------------
Minnesota - 0.3%
Minnesota HFA, SFHRB, Ser. C:
495,000 6.80%, 7/1/11...................................... 517,423
1,285,000 7.10%, 7/1/11...................................... 1,349,790
------------
1,867,213
------------
Mississippi - 4.0%
10,750,000 Mississippi Business Fin. Corp. Solid Wst. Disposal
RB, Phosphates Corp. Proj.,
5.80%, 3/1/22..................................... 10,801,170
4,855,000 Mississippi Gulf Coast, Reg'l. Wastewater. Auth.
RB, ETM, 7.00%, 7/1/12............................ 5,859,499
Mississippi Home Corp. SFHRB:
2,000,000 Class 6, Ser. A
5.25%, 6/1/31...................................... 2,168,120
7,230,000 Ser. H,
6.70%, 12/1/29..................................... 7,844,695
2,500,000 Perry Cnty., MS, PCRB, Refunding Leaf River Forest
Proj.,
5.20%, 10/1/12.................................... 2,495,200
------------
29,168,684
------------
</TABLE>
49
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Intermediate Term Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Missouri - 1.6%
$ 5,245,000 Missouri Hsg. Dev. Commission Mtge., RB, Ser. E1,
6.45%, 9/1/29..................................... $ 5,725,337
3,000,000 Missouri Office Bldg., Spl. Obl., RB, 6.00%,
12/1/02........................................... 3,172,710
2,480,000 Missouri SFHRB, Ser. B2,
6.40%, 9/1/29..................................... 2,724,379
------------
11,622,426
------------
New Hampshire - 1.8%
13,000,000 New Hampshire Business PCRB, Refunding United
Illumination Proj. (Eff. Yield 4.55%),
0.00%, 7/1/27, (a)................................ 12,958,530
------------
New Jersey - 4.4%
2,000,000 Howell Township, NJ GO Partially Prerefunded,
6.40%, 1/1/03, (FGIC)............................. 2,169,620
New Jersey EDA RB:
Franciscan Oaks Proj.:
3,620,000 5.60%, 10/1/12..................................... 3,650,770
5,685,000 5.70%, 10/1/17..................................... 5,745,204
900,000 Keswick Pines Proj.,
5.60%, 1/1/12..................................... 899,991
The Evergreens:
3,380,000 5.875%, 10/1/12.................................... 3,431,646
680,000 6.00%, 10/1/17..................................... 705,201
3,325,000 6.00%, 10/1/22..................................... 3,434,858
1,650,000 New Jersey Hsg. & Mtge. Fin. Agcy. RB, Ser. 1,
6.45%, 11/1/07.................................... 1,772,067
10,000,000 New Jersey Trans. Trust Fund Auth. RB,
5.125%, 6/15/15................................... 10,203,200
160,000 New Jersey Wastewater Treatment Trust RB,
6.80%, 6/15/02.................................... 166,991
------------
32,179,548
------------
New York - 15.1%
Metropolitan Trans. Auth. of NY RB, Ser. A:
4,325,000 5.70%, 7/1/17, (MBIA).............................. 4,618,884
7,000,000 6.10%, 7/1/26, (FSA)............................... 7,993,160
8,000,000 New York City Muni. Wtr. Fin. Auth., Wtr. & Swr.
Sys. RB, Ser. B,
6.25%, 6/15/20.................................... 9,128,160
New York Dormitory Auth. RB:
13,000,000 Ser. A,
5.50%, 5/15/13..................................... 13,924,820
12,235,000 Ser. E,
5.10%, 2/15/12..................................... 12,403,598
5,000,000 New York Med. Care Facs. Fin. RB, 5.25%, 8/15/14... 5,121,300
6,045,000 New York Urban Dev. Corp. RB, 5.75%, 7/1/09........ 6,634,629
New York, NY GO: Ser. A:
10,535,000 5.875%, 8/1/03..................................... 11,300,157
2,500,000 6.25%, 8/1/10...................................... 2,790,925
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New York - continued
$ 3,000,000 6.25%, 8/1/11...................................... $ 3,349,110
14,490,000 Ser. B,
7.50%, 2/1/06...................................... 16,016,522
5,795,000 Ser. C,
6.50%, 2/1/08...................................... 6,613,544
6,000,000 Ser. I,
6.50%, 3/15/05..................................... 6,696,900
3,000,000 Port Auth. of NY & NJ, Spl. Obl. RB, 6.75%,
10/1/11........................................... 3,322,050
------------
109,913,759
------------
North Carolina - 5.1%
13,860,000 Charlotte, NC, Spl. Facs. RB, Charlotte Douglas
Intl.,
5.60%, 7/1/27..................................... 13,761,455
North Carolina Med. Care Commission, Hosp. RB,
Transylvania Cmmnty. Hosp. Inc.:
130,000 4.45%, 10/1/99..................................... 130,675
135,000 4.60%, 10/1/00..................................... 136,836
140,000 4.70%, 10/1/01..................................... 142,243
155,000 4.80%, 10/1/02..................................... 158,049
155,000 4.90%, 10/1/03..................................... 158,768
155,000 5.00%, 10/1/04..................................... 159,500
175,000 5.00%, 10/1/05..................................... 179,884
185,000 5.05%, 10/1/06..................................... 190,348
190,000 5.15%, 10/1/07..................................... 196,068
North Carolina, Eastern Muni. Pwr. Sys. RB, Ser. A:
7,850,000 5.625%, 1/1/14, (MBIA)............................. 8,361,506
12,930,000 5.70%, 1/1/15, (MBIA).............................. 13,812,085
------------
37,387,417
------------
Ohio - 6.1%
Cuyahoga Cnty., OH Hosp. RB, Cleveland Clinic
Hlth., Ser. B:
4,400,000 5.00%, 1/1/10...................................... 4,506,348
7,780,000 5.25%, 1/1/11...................................... 8,074,162
7,385,000 5.25%, 1/1/12...................................... 7,605,959
Franklin Cnty. OH, Hlth. Care Facs. RB, Friendship
Village of Dublin Proj.:
505,000 5.00%, 11/1/05..................................... 516,075
380,000 5.05%, 11/1/06..................................... 387,570
225,000 5.10%, 11/1/07..................................... 228,924
100,000 5.15%, 11/1/08..................................... 101,546
1,250,000 5.50%, 11/1/16..................................... 1,254,575
1,750,000 5.625%, 11/1/22.................................... 1,752,222
Miami Cnty. OH, Hosp. Facs. RB: Ohio Bldg. Auth.:
8,385,000 5.25%, 10/1/11..................................... 8,857,327
7,070,000 5.25%, 10/1/12..................................... 7,439,195
Upper Valley Med. Ctr., Ser. A:
1,500,000 6.25%, 5/15/16..................................... 1,578,090
2,250,000 6.375%, 5/15/26.................................... 2,378,813
------------
44,680,806
------------
</TABLE>
50
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Intermediate Term Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Oklahoma - 2.5%
Oklahoma Dev. Fin. Auth. RB, Refunding Hillcrest
Healthcare Sys.:
$ 4,425,000 5.75%, 8/15/13..................................... $ 4,535,404
3,805,000 5.75%, 8/15/14..................................... 3,881,747
4,120,000 Oklahoma HFA, SFHRB, Mtge. Homeownership Loan,
6.40%, 9/1/30...................................... 4,497,392
5,000,000 Tulsa Cnty., OK, IDA, Hlth Care RB, St. Francis
Hosp.,
5.15%, 12/15/18................................... 5,204,900
------------
18,119,443
------------
Pennsylvania - 3.8%
1,500,000 Beaver Falls, PA, Muni. Auth. Spl. Obl.
Prerefunded,
9.125%, 8/1/05.................................... 1,910,490
Dauphin Cnty., PA, General Auth. RB, Office &
Parking, Forum Place, Ser. A:
7,865,000 5.50%, 1/15/08..................................... 7,951,672
3,950,000 5.75%, 1/15/10..................................... 4,029,198
245,000 Delaware River Port Auth. of PA & NJ, Delaware
River Bridges RB,
6.50%, 1/15/11.................................... 274,390
4,000,000 Montgomery Cnty., PA, Higher Ed. & Hlth. Auth. RB,
Beaver College, 5.80%, 4/1/16..................... 4,255,600
Pennsylvania Higher Edl. RB, Univ. Med. Ctr. Hlth.
Sys., Ser. A:
2,750,000 5.25%, 8/1/12...................................... 2,843,280
4,000,000 5.25%, 8/1/13...................................... 4,109,520
1,795,000 West View, PA, Muni. Auth. Spl. Obl. Bonds, ETM,
9.20%, 5/15/03.................................... 2,082,164
------------
27,456,314
------------
South Carolina - 0.7%
5,300,000 Charlestown Cnty., SC, RB,
Care Alliance Hlth. Svcs., Ser. A,
5.00%, 8/15/12..................................... 5,392,803
------------
South Dakota - 0.8%
5,000,000 Heartland Consumer Pwr. Dist. RB, ETM,
7.00%, 1/1/16..................................... 5,994,300
------------
Texas - 5.8%
9,915,000 Alliance Aprt. Auth., Spl. Facs. RB, American
Airlines Inc. Proj.,
7.00%, 12/1/11..................................... 11,640,805
330,000 Austin TX, Utility Sys. RB:
8.00%, 11/15/99.................................... 339,857
420,000 ETM,
8.00%, 11/15/99.................................... 432,239
North Central TX, Hlth. Facs. Dev. Corp. RB: TX
Hlth. Resources Sys., Ser. B:
3,910,000 5.75%, 2/15/09, (MBIA)............................. 4,263,347
4,595,000 5.75%, 2/15/12, (MBIA)............................. 4,973,260
4,120,000 5.75%, 2/15/13..................................... 4,448,282
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Texas - continued
$ 2,000,000 United Reg'l. Hlth. Care Sys. Inc. Proj.,
5.25%, 9/1/08, (MBIA)............................... $ 2,117,180
1,300,000 Retama TX, Dev. Corp. Spl. Facs. RB, Retama
Racetrack, ETM,
8.75%, 12/15/18..................................... 1,640,860
2,650,000 Texas Dept. Hsg. & Cmmnty. Affairs: MFHRB,
5.55%, 1/1/05....................................... 2,754,012
3,000,000 SFHRB, Ser. E,
5.00%, 9/1/16, (MBIA)............................... 3,075,300
5,455,000 Texas Turnpike Auth. RB,
12.625%, 1/1/20..................................... 7,007,002
-----------
42,692,144
-----------
Utah - 0.1%
985,000 Utah HFA SFHRB, Ser. G1,
7.35%, 7/1/18....................................... 1,057,614
-----------
Virginia - 1.2%
2,000,000 Chesapeake, VA, Redev. & Hsg. Auth. RB,
6.20%, 4/1/28....................................... 2,035,840
5,985,000 Riverside, VA, Regional Jail Auth. RB,
5.875%, 7/1/14, (MBIA).............................. 6,471,401
-----------
8,507,241
-----------
Washington - 2.4%
12,000,000 Washington GO. Ser. B & AT7,
6.40%, 6/1/17....................................... 14,100,000
3,035,000 Washington Pub. Pwr. Supply RB, Nuclear Proj #1,
Ser. B,
5.125%, 7/1/12...................................... 3,096,641
-----------
17,196,641
-----------
Wisconsin - 1.8%
6,000,000 Nekoosa, WI, PCRB,
5.50%, 7/1/14....................................... 6,067,500
6,865,000 Wisconsin Hlth. & Edl. Facs. RB, Med. College Inc.,
5.95%, 12/1/15...................................... 7,354,818
-----------
13,422,318
-----------
U. S. Virgin Islands - 2.3%
7,070,000 Virgin Islands Public Fin. Auth. RB,
Sr. Lien:
Ser. A,
5.20%, 10/1/09...................................... 7,211,047
Ser. C:
3,000,000 5.50%, 10/1/07...................................... 3,153,720
3,855,000 5.50%, 10/1/08...................................... 4,040,965
2,000,000 Virgin Islands Wtr. & Pwr. Auth. RB, Ser. B,
7.60%, 1/1/12....................................... 2,262,220
-----------
16,667,952
-----------
Total Municipal Obligations (cost $703,294,391)..... 720,718,710
-----------
</TABLE>
51
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Intermediate Term Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
MUTUAL FUND
SHARES - 1.0%
7,558,000 Federated
Municipal
Obligation
Fund
(cost
$7,558,000).... $ 7,558,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $710,852,391).......................... 99.7% 728,276,710
Other Assets and
Liabilities - net............................ 0.3 1,925,096
----- ------------
Net Assets.................................... 100.0% $730,201,806
===== ============
</TABLE>
Note: Securities that have been Escrowed to Maturity (ETM) or prerefunded have
been fully collateralized with U.S. Government Securities, cash or both.
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 municipality.
In order to reduce risk associated with such economic developments, at
March 31, 1999, 11.96% of the securities, as a percentage of net assets,
are backed by bond insurance of various financial institutions and finan-
cial guaranty assurance agencies. At March 31, 1999, the Fund had securi-
ties backed by bond insurance of the following financial institutions rep-
resenting more than 5% of net assets: MBIA 9.38%
(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
COLL Collateral
EDA Economic Development Authority
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Corp.
FSA Financial Security Assurance Corp.
GO General Obligation
HFA Housing Finance Authority
IBC Insured Bond Certification
IDA Industrial Development Authority
JSC Jefferson Smurfit Corp.
MBIA Municipal Bond Investors Assurance Corp.
MFHRB Multi Family Housing Revenue Bond
PCRB Pollution Control Revenue Bond
RAN Revenue Anticipation Note
RB Revenue Bond
SFHRB Single Family Housing Revenue Bond
See Combined Notes to Financial Statements.
52
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select International Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
FOREIGN BONDS (Non U.S. Dollars) - 84.3%
Australia - 6.1%
$ 1,600,000 New South Wales Treasury,
AUD 12.00%, 12/1/01..................................... $ 1,239,238
2,400,000 Oester Kontrollbank,
DEM 5.75%, 9/12/07...................................... 1,468,122
-----------
2,707,360
-----------
Canada - 5.8%
3,900,000 Canada (Government of),
CAD 4.75%, 9/15/99...................................... 2,582,216
-----------
Denmark - 2.0%
5,800,000 City of Copenhagen,
DKK 6.25%, 3/15/01...................................... 886,159
-----------
France - 4.2%
10,600,000 Credit Local De France,
FRF 5.38%, 1/13/04...................................... 1,885,575
-----------
Germany - 7.6%
1,950,000 Bayer Hypo Vereins,
EUR 4.75%, 9/19/07...................................... 2,182,231
1,003,875 Kreditanst Fuer Wied,
EUR 5.50%, 3/12/07...................................... 1,189,965
-----------
3,372,196
-----------
Italy - 4.9%
1,800,000 Italy (Republic of),
EUR 5.75%, 7/10/07...................................... 2,155,471
-----------
Japan - 15.2%
790,000,000 Japan (Government of),
JPY 2.60%, 3/20/18...................................... 6,779,690
-----------
Mexico - 0.5%
125,000 United Mexican States,
GBP 8.75%, 5/30/02...................................... 197,473
-----------
Netherlands - 14.2%
1,700,000 Bank Voor Ned Gemeenten,
NLG 6.25%, 9/15/00...................................... 868,404
9,800,000 Depfa Fin. NV,
FRF 6.38%, 11/18/08..................................... 1,846,919
3,150,000 DSL Fin. NV,
DEM 5.00%, 7/23/04...................................... 1,851,578
748,737 Dutch (Government of),
EUR 6.50%, 4/15/03...................................... 905,910
7,000,000 Helaba Fin. BV,
SEK 3.88%, 3/3/04....................................... 851,703
-----------
6,324,514
-----------
Norway - 4.0%
13,000,000 Eksportfinans AS,
SEK 6.88%, 2/9/04....................................... 1,793,327
-----------
Slovakia - 0.7%
550,000 Vodohospodarska Vystavba,
DEM 8.00%, 7/9/01....................................... 308,430
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
FOREIGN BONDS (Non U.S. Dollars) - continued
Supernational - 3.2%
Int'l Bank of Reconstruction & Dev.:
$ 760,000 5.38%, 11/6/03...................................... $ 396,070
NZD
1,860,000 7.25%, 5/27/03...................................... 1,040,762
NZD -----------
1,436,832
-----------
Sweden - 6.9%
16,400,000 Sweden (Kingdom of),
SEK 5.00%, 1/15/04...................................... 2,118,170
550,000 Swedish Export Credit Corp,
GBP 7.63%, 12/27/01..................................... 947,925
-----------
3,066,095
-----------
United Kingdom - 9.0%
10,000,000 Diageo,
FRF 6.25%, 11/25/02..................................... 1,793,703
1,175,000 Gallaher Group Plc,
DEM 5.88%, 8/6/08....................................... 662,165
950,000 Halifax Bldg.,
GBP 8.38%, 12/15/99..................................... 1,561,720
-----------
4,017,588
-----------
Total Foreign Bonds (Non U.S. Dollars) (cost
$37,478,322)....................................... 37,512,926
-----------
YANKEE OBLIGATIONS - 11.6%
China - 0.9%
400,000 Hutchison Whampoa Fin.,
6.95%, 8/1/07....................................... 389,000
-----------
Colombia - 0.4%
200,000 Colombia (Republic of),
7.25%, 2/23/04...................................... 176,430
-----------
Kazakhstan - 0.4%
200,000 Kazakhstan (Republic of),
8.38%, 10/2/02...................................... 180,100
-----------
Korea - 1.4%
200,000 Export-Import Bank of Korea,
7.13%, 9/20/01...................................... 196,093
200,000 Korea (Republic of),
8.75%, 4/15/03...................................... 209,880
200,000 Samsung Electronics America Inc.,
9.75%, 5/1/03....................................... 205,000
-----------
610,973
-----------
Lithuania - 1.1%
525,000 Lithuania (Republic of),
7.13%, 7/22/02...................................... 493,945
-----------
Poland - 0.8%
350,000 TPSA Fin. BV,
7.13%, 12/10/03..................................... 345,814
-----------
Slovakia - 0.4%
200,000 Slovakia (Republic of),
9.50%, 5/28/03...................................... 186,628
-----------
Thailand - 0.4%
200,000 Thailand (Kindom of),
7.75%, 4/15/07...................................... 199,170
-----------
</TABLE>
53
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select International Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - continued
United Kingdom - 5.8%
$ 500,000 Abbey National Plc,
6.69%, 10/17/05...................................... $ 509,870
500,000 British Telecom,
7.00%, 5/23/07....................................... 523,129
500,000 ICI Fin. Nederland,
6.75%, 8/7/02........................................ 502,703
545,000 Rolls Royce Capital,
7.13%, 7/29/03....................................... 556,701
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - continued
United Kingdom - continued
$ 500,000 Rothmans Holdings,
6.50%, 5/6/03....................................... $ 489,090
-----------
2,581,493
-----------
Total Yankee Obligations
(cost $5,159,358).................................. 5,163,553
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $42,637,680).......................... 95.9% 42,676,479
Other Assets and Liabilities - net........... 4.1 1,843,569
----- -----------
Net Assets................................... 100.0% $44,520,048
===== ===========
</TABLE>
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
<TABLE>
<CAPTION>
Net Unrealized
U.S. $ Value at In Exchange Appreciation
Exchange Date Contracts to Deliver March 31, 1999 for U.S. $ (Depreciation)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Forward Foreign Currency Exchange Contracts to Sell:
4/08/99 4,088,000 Euro Dollar $4,422,170 $4,431,269 $ 9,099
4/14/99 6,200,000 Danish Krone 902,060 990,415 88,355
4/14/99 14,260,000 Swedish Krona 1,737,555 1,797,895 60,340
5/18/99 15,810,000 Swedish Krona 1,930,003 1,949,349 19,346
5/28/99 4,193,028 Euro Dollar 4,548,459 4,500,000 (48,459)
6/09/99 1,850,000 Netherland Guilder 911,270 986,667 75,397
8/24/99 8,440,000 Swedish Krona 1,036,072 1,051,543 15,471
</TABLE>
Summary of Abbreviations:
AUD Australian Dollar
CAD Canadian 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 Krona
See Combined Notes to Financial Statements.
54
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Limited Duration Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - 16.6%
$ 61,407 Aames Mtge. Trust,
Ser. 1996, Class A1B,
7.275%, 5/15/20....................................... $ 61,603
2,000,000 Case Equipment Receivable Trust,
Ser. 1998-B, Class A3,
5.81%, 5/15/03........................................ 2,006,630
850,000 Chase Credit Card Master Trust,
Ser. 1997-2, Class A,
6.30%, 4/15/03........................................ 861,539
131,350 Chevy Chase Auto Receivables,
Ser. 1995-1, Class A,
6.00%, 12/15/01....................................... 131,490
136,773 CIT RV Owner Trust,
Ser. 1995-B, Class A,
6.50%, 4/15/11........................................ 138,172
Contimortgage Home Equity Loan Trust:
210,000 Ser. 1996-4, Class A5,
6.60%, 10/15/11........................................ 210,881
462,331 Ser. 1997-4, Class A3,
6.26%, 7/15/12......................................... 464,261
2,000,000 Daimler Benz Vehicle Owner Trust,
Ser. 1998-A, Class A4,
5.22%, 12/22/03....................................... 1,965,330
EQCC Home Equity Loan Trust:
69,056 Ser. 1996-2, Class A2,
6.70%, 9/15/08......................................... 69,482
700,867 Ser. 1997-1, Class A3,
6.84%, 9/15/11......................................... 708,916
500,000 Firstplus Home Loan Owner Trust,
Ser. 1997-3, Class A3,
6.57%, 10/10/10....................................... 502,333
393,275 Heller Equipment Asset Receivables,
Ser. 1997-1, Class A2,
6.39%, 5/25/05........................................ 395,829
Navistar Financial Owner Trust:
157,095 Ser. 1196-B, Class A3,
6.33%, 4/21/03......................................... 158,342
6,603 Ser. 1997-A, Class A2,
6.35%, 1/15/00......................................... 6,612
488,197 Olympic Automobile Receivables,
Ser. 1995-D, Class B,
6.10%, 4/15/02........................................ 490,767
441,697 Premier Auto Trust,
Ser. 1996-2, Class A4,
6.575%, 10/6/00....................................... 444,411
469,575 SLMA,
Ser. 1997-1, Class A1,
4.962%, 4/7/99........................................ 468,089
45,706 The Money Store, Home Equity Loan Trust, Ser. 1993-B,
Class A1,
5.40%, 8/15/05........................................ 45,671
750,000 Toyota Auto Lease Trust,
Ser. 1997-A, Class A2,
6.35%, 4/26/04........................................ 759,491
Union Acceptance Corp.:
86,757 Ser. 1995-A, Class A,
7.725%, 3/10/01........................................ 86,893
280,692 Ser. 1995-D, Class B,
6.025%, 1/7/03......................................... 282,002
235,463 Ser. 1996-A, Class A,
5.40%, 4/7/03.......................................... 235,827
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - continued
Union Acceptance Corp. - continued:
$1,762,623 Ser. 1996-D, Class A2,
6.17%, 10/9/02........................................ $ 1,776,221
25,384 Ser. 1997-A, Class A1,
6.13%, 7/10/01........................................ 25,382
405,506 Vanderbilt Mtge. & Fin. Inc.,
Ser. 1997-B, Class 1A2,
6.775%, 1/7/08....................................... 409,547
-----------
Total Asset-Backed Securities
(cost $12,710,357)................................... 12,705,721
-----------
CORPORATE BONDS - 54.1%
Automotive Equipment & Manufacturing - 1.3%
1,000,000 Navistar Int'l. Corp.,
Sr. Notes, Ser. B,
7.00%, 2/1/03......................................... 1,015,000
-----------
Banks - 7.9%
1,000,000 Banc One,
Sr. Notes, MTN,
7.00%, 3/25/02........................................ 1,032,563
2,000,000 MBNA Corp.,
Sr. Notes, MTN,
6.50%, 9/15/00........................................ 2,001,560
2,000,000 Transamerica Fin. Corp.,
Sr. Notes, MTN,
5.22%, 4/22/99........................................ 2,007,698
1,000,000 Wachovia Corp.,
Notes (Subord.),
6.375%, 4/15/03....................................... 1,014,955
-----------
6,056,776
-----------
Communication Systems &
Services - 2.3%
1,250,000 Cox Communications, Inc.,
Notes, 6.375%, 6/15/00................................ 1,262,391
500,000 TCI Communications,
Sr. Notes, 6.375%, 9/15/99............................ 503,211
-----------
1,765,602
-----------
Consumer Products & Services - 1.4%
1,000,000 Honeywell, Inc.,
Notes, 6.75%, 3/15/02................................. 1,025,029
-----------
Finance & Insurance - 23.3%
1,250,000 Associates Corp., N.A.,
Sr. Notes, 6.00%, 6/15/00............................. 1,257,461
1,000,000 Caterpillar Financial Svcs.,
Notes, MTN, 6.75%, 6/15/01............................ 1,023,002
510,000 Chrysler Financial Co. LLC,
Notes, 6.375%, 1/28/00................................ 514,157
1,000,000 CIT Group Holdings, Inc.,
Sr. Notes, MTN,
6.15%, 12/15/02....................................... 1,008,569
500,000 Fleet Mtge. Group, Inc.,
Notes, 6.50%, 9/15/99................................. 502,592
1,000,000 Ford Motor Credit Co.,
Notes, 6.55%, 9/10/02................................. 1,022,047
GMAC,
Notes, MTN:
700,000 5.03%, 6/9/99......................................... 700,453
500,000 5.95%, 4/20/01........................................ 503,374
</TABLE>
55
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Limited Duration Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Finance & Insurance - continued
$ 750,000 Goldman Sachs Group LP,
Notes,
6.60%, 7/15/02 (a).................................... $ 760,292
1,000,000 Ikon Capital, Inc.,
Notes, MTN,
6.73%, 6/15/01........................................ 990,291
Int'l. Lease Fin. Corp.,
Notes:
1,000,000 6.00%, 6/15/03........................................ 1,001,345
1,000,000 7.00%, 5/15/00........................................ 1,016,306
Lehman Brothers Holdings, Inc.,
Notes, MTN:
1,000,000 6.33%, 8/1/00......................................... 1,001,533
850,000 6.50%, 7/18/00........................................ 853,037
255,000 Mellon Financial Co.,
Sr. Notes, 7.625%, 11/15/99........................... 258,580
750,000 Morgan Stanley Dean Witter,
Sr. Notes, MTN,
5.89%, 3/20/00........................................ 751,029
395,000 Nationsbank Corp.,
Sr. Notes, 5.375%, 4/15/00............................ 394,796
2,000,000 PHH Corp.,
Notes, MTN,
5.49%, 3/1/00......................................... 1,995,448
Salomon, Inc.:
750,000 Notes, 6.50%, 3/1/00.................................. 756,472
1,000,000 Sr. Notes, 7.30%, 5/15/02............................. 1,036,588
500,000 Transamerica Fin. Corp.,
Notes (Subord.), 6.75%, 6/1/00........................ 504,578
-----------
17,851,950
-----------
Food & Beverage Products - 3.3%
1,000,000 Coca-Cola Enterprises, Inc.,
Notes, 6.375%, 8/1/01................................. 1,014,490
1,500,000 Pepsico, Inc., MTN,
6.375%, 12/31/99...................................... 1,509,381
-----------
2,523,871
-----------
Industrial Specialty Products & Services - 2.6%
2,000,000 Case Corp.,
Notes, 6.25%, 12/1/03 (a) ............................ 1,965,717
-----------
Oil/Energy - 2.7%
2,000,000 Occidental Petroleum Corp.,
Sr. Notes, 7.65%, 2/15/06............................. 2,048,440
-----------
Paper & Packaging - 1.3%
1,000,000 Int'l. Paper Co.,
Notes, 7.00%, 6/1/01.................................. 1,020,820
-----------
Retailing & Wholesale - 2.7%
1,000,000 Dillard Dept. Stores, Inc.,
Notes, 7.375%, 6/15/99................................ 1,003,424
1,000,000 Sears Roebuck Acceptance Corp.,
Sr. Notes, MTN,
6.56%, 11/20/03....................................... 1,017,076
-----------
2,020,500
-----------
Telecommunication Services & Equipment - 1.3%
1,000,000 Worldcom, Inc.,
Sr. Notes, 6.25%, 8/15/03............................. 1,013,624
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Transportation - 1.4%
$1,000,000 Continental Airlines, Inc.,
Sr. Notes, 9.50%, 12/15/01........................... $ 1,052,500
-----------
Lease Rental Obligations - 2.6%
2,000,000 Amerco, Sr. Notes,
7.20%, 4/1/02........................................ 1,989,920
-----------
Total Corporate Bonds
(cost $41,338,737).................................. 41,349,749
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.7%
540,627 Prudential Home Mortgage Securities Co., Ser. 1992-
45, Class A4,
6.50%, 1/25/00 (cost $537,924)....................... 540,878
-----------
MORTGAGE-BACKED SECURITIES - 17.5%
FHLMC:
1,600,000 5.99%, 12/1/03....................................... 1,626,021
2,000,000 6.00%, 12/15/09...................................... 1,982,650
1,939,341 6.50%, 5/15/13....................................... 1,932,197
387,975 6.00%, 1/1/01........................................ 389,977
660,149 6.00%, 9/1/01........................................ 665,185
1,031,538 7.00%, 12/1/99....................................... 1,042,142
FNMA:
1,972,615 5.50%, 1/1/14........................................ 1,923,043
379,085 6.50%, 9/1/05........................................ 383,513
260,644 6.50%, 9/1/05........................................ 263,313
2,500,001 6.00%, 2/1/14........................................ 2,484,326
GNMA:
721,992 6.50%, 12/15/08...................................... 735,609
-----------
Total Mortgage-Backed Securities
(cost $13,472,935).................................. 13,427,976
-----------
YANKEE OBLIGATIONS - 2.7%
Finance - 1.4%
1,000,000 Hanson Overseas B.V.,
Sr. Notes,
7.375%, 1/15/03...................................... 1,046,492
-----------
Metals & Mining - 1.3%
1,000,000 WMC Fin. USA Ltd.,
Notes,
6.50%, 11/15/03...................................... 1,004,205
-----------
Total Yankee Obligations
(cost $2,051,490)................................... 2,050,697
-----------
COMMERCIAL PAPER - 9.8%
Automotive Equipment & Manufacturing - 3.3%
2,500,000 Volvo Group Treasury NA,
5.15%, 4/1/99........................................ 2,500,000
-----------
Finance & Insurance - 3.3%
2,500,000 Orix Credit Alliance,
5.17%, 4/7/99........................................ 2,497,846
-----------
Utilities - Electric - 3.2%
2,500,000 PP&L Capital Funding, Inc.,
5.30%, 4/9/99........................................ 2,497,056
-----------
Total Commercial Paper
(cost $7,494,902)................................... 7,494,902
-----------
</TABLE>
56
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Limited Duration Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
REPURCHASE AGREEMENT - 0.4%
$ 280,081 Dresdner Bank AG, 4.85% dated 3/31/99, due 4/1/99,
maturity value $280,119 (cost $280,081) (b)......... $ 280,081
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $77,886,426)........................... 101.8% 77,850,004
Other Assets and
Liabilities - net............................ (1.8) (1,358,676)
----- -----------
Net Assets.................................... 100.0% $76,491,328
===== ===========
</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 $295,000 in U.S. Treasury
Bills, due 9/16/99; value including accrued interest - $288,843.
Summary of Abbreviations:
FHLMC Federal Home Loan Mortgage Corp.
FNMA Federal National Mortgage Association
GMAC General Motors Acceptance Corp.
GNMA General National Mortgage Association
MTN Medium Term Note
SLMA Student Loan Marketing Association
See Combined Notes to Financial Statements.
57
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Total Return Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS & NOTES - 35.7%
Aerospace & Defense - 0.4%
$ 500,000 BE Aerospace, Inc.,
Sr. Notes (Subord.),
9.50%, 11/1/08.................................. $ 533,750
------------
Automotive Equipment & Manufacturing - 1.5%
500,000 Eagle Picher Inds., Inc.,
Sr. Notes (Subord.),
9.375%, 3/1/08.................................. 482,500
250,000 Federal Mogul Corp.,
Notes,
7.50%, 1/15/09 (a).............................. 244,400
500,000 Hayes Wheels Int'l., Inc.,
Sr. Notes (Subord.),
9.125%, 7/15/07................................. 523,750
500,000 Mark IV Industries, Inc.,
Sr. Notes (Subord.),
7.50%, 9/1/07................................... 475,625
500,000 Walbro Corp.,
Sr. Notes,
10.125%, 12/15/07............................... 505,000
------------
2,231,275
------------
Banks - 1.5%
2,000,000 Keycorp,
Notes (Subord.),
8.00%, 7/1/04................................... 2,153,988
------------
Building, Construction & Furnishings - 0.4%
500,000 Nortek, Inc.,
Sr. Notes,
9.125%, 9/1/07.................................. 521,250
Chemical & Agricultural Products - 1.1%
375,000 Allied Waste North America, Inc.,
Sr. Notes,
7.875%, 1/1/09.................................. 368,906
250,000 ISP Holdings, Inc.,
Sr. Notes,
9.00%, 10/15/03................................. 256,250
500,000 Polymer Group, Inc.,
Sr. Notes (Subord.),
9.00%, 7/1/07................................... 511,250
500,000 Scotts Co.,
Sr. Notes (Subord.),
8.625%, 1/15/09 (a)............................. 516,250
------------
1,652,656
------------
Communication Systems & Services - 2.2%
500,000 Adelphia Communications Corp.,
Sr. Notes,
9.875%, 3/1/07.................................. 552,500
500,000 Century Communications Corp.,
Sr. Notes,
9.75%, 2/15/02.................................. 525,000
500,000 Lenfest Communications, Inc.,
Sr. Notes (Secd.),
8.375%, 11/1/05................................. 530,000
500,000 Metromedia Fiber Network, Inc.,
Sr. Notes,
10.00%, 11/15/08 (a)............................ 536,250
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS & NOTES - continued
Communication Systems & Services - continued
$ 500,000 Rogers Cablesystems Ltd.,
2nd Priority Notes,
9.625%, 8/1/02.................................. $ 537,500
500,000 Telewest Communications PLC,
Sr. Deb. (Disc.), Step Bond (Eff. Yield 8.37%),
0.00%, 10/1/07 (c).............................. 440,000
------------
3,121,250
------------
Electronic Equipment & Services - 1.8%
500,000 Motors & Gears, Inc.,
Notes,
10.75%, 11/15/06................................ 513,125
100,000 Samsung Electronics America, Inc.,
Notes,
9.75%, 5/1/03................................... 103,750
2,000,000 Sony Corp.,
Notes,
6.125%, 3/4/03.................................. 2,025,446
------------
2,642,321
------------
Finance & Insurance - 1.8%
2,000,000 Lincoln National Corp.,
Notes,
7.00%, 3/15/18.................................. 2,017,318
500,000 Reliance Group Holdings, Inc.,
Sr. Deb. (Subord.),
9.75%, 11/15/03................................. 519,345
------------
2,536,663
------------
Food & Beverage Products - 1.4%
500,000 Aurora Foods, Inc.,
Sr. Notes (Subord.),
9.875%, 2/15/07................................. 540,000
500,000 Chiquita Brands Int'l., Inc.,
Sr. Notes,
9.625%, 1/15/04................................. 513,750
500,000 FRD Acquisition Co.,
Sr. Notes,
12.50%, 7/15/04................................. 512,500
500,000 Pathmark Stores, Inc.,
Sr. Notes (Subord.),
9.625%, 5/1/03.................................. 514,375
------------
2,080,625
------------
Gaming - 1.4%
500,000 Boyd Gaming Corp.,
Sr. Notes (Subord.),
9.50%, 7/15/07.................................. 512,500
500,000 Circus Circus Enterprises, Inc.,
9.25%, 12/1/05.................................. 524,375
500,000 Mohegan Tribal Gaming Auth.,
Sr. Notes (Subord.),
8.75%, 1/1/09 (a)............................... 520,625
500,000 Station Casinos, Inc.,
Sr. Notes (Subord.),
9.75%, 4/15/07.................................. 528,750
------------
2,086,250
------------
</TABLE>
58
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Total Return Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS & NOTES - continued
Household Products & Services - 0.4%
$ 500,000 Playtex Family Products Corp.,
Sr. Notes (Subord.),
9.00%, 12/15/03..................................... $ 516,250
------------
Iron & Steel - 1.1%
500,000 AK Steel Corp.,
7.875%, 2/15/09 (a)................................. 499,375
500,000 National Steel Corp.,
1st Mtge. Notes,
9.875%, 3/1/09 (a).................................. 516,250
500,000 NSM Steel, Inc.,
Sr. Notes,
12.00%, 2/1/06 (a).................................. 100,000
500,000 WHX Corp.,
Sr. Notes,
10.50%, 4/15/05..................................... 483,750
------------
1,599,375
------------
Metals & Mining - 0.6%
500,000 Bulong Operations Properties Ltd.,
Sr. Notes,
12.50%, 12/15/08 (a)................................ 506,250
400,000 Golden Northwest Aluminum, Inc.,
1st Mtge. Notes,
12.00%, 12/15/06 (a)................................ 400,000
------------
906,250
------------
Oil/Energy - 0.7%
500,000 Calpine Corp.,
Sr. Notes,
7.625%, 4/15/06..................................... 506,875
500,000 HS Resources, Inc.,
Sr. Notes (Subord.),
9.25%, 11/15/06..................................... 487,500
------------
994,375
------------
Paper & Packaging - 2.2%
500,000 Container Corp. of America,
Sr. Notes,
11.25%, 5/1/04...................................... 527,500
500,000 Packaging Corp. of America,
Notes,
9.625%, 4/1/09 (a).................................. 500,000
175,000 Stone Container Corp.,
1st Mtge. Notes,
10.75%, 10/1/02..................................... 183,094
2,000,000 UPM-Kymmene Corp.,
Notes,
6.875%, 11/26/07 (a)................................ 2,027,416
------------
3,238,010
------------
Publishing, Broadcasting & Entertainment - 4.9%
500,000 Ackerley Group, Inc.,
Sr. Notes (Subord.),
9.00%, 1/15/09 (a).................................. 515,000
500,000 Big Flower Press Holdings, Inc.,
Sr. Notes (Subord.),
8.875%, 7/1/07...................................... 507,500
500,000 Carmike Cinemas, Inc.,
Sr. Notes (Subord.),
9.375%, 2/1/09 (a).................................. 507,500
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS & NOTES - continued
Publishing, Broadcasting
& Entertainment -
continued
$ 500,000 Chancellor Media Corp.,
Sr. Notes,
8.00%, 11/1/08 (a).................................. $ 520,625
500,000 Cinemark USA, Inc.,
Sr. Notes (Subord.),
9.625%, 8/1/08...................................... 517,500
500,000 Hollinger Int'l.
Publishing, Inc.,
Sr. Notes,
8.625%, 3/15/05..................................... 527,500
500,000 Hollywood Park, Inc.,
Sr. Notes (Subord.),
9.25%, 2/15/07 (a).................................. 516,250
400,000 K III Communications
Corp.,
Sr. Notes,
8.50%, 2/1/06....................................... 409,000
500,000 Loews Cineplex
Entertainment Corp.,
Sr. Notes (Subord.),
8.875%, 8/1/08...................................... 501,250
500,000 Sinclair Broadcast
Group, Inc.,
Sr. Notes (Subord.),
10.00%, 9/30/05..................................... 530,000
1,820,000 Viacom, Inc.,
Sr. Notes,
7.75%, 6/1/05....................................... 1,941,885
------------
6,994,010
------------
Real Estate - 0.7%
500,000 HMH Property, Inc.,
Sr. Notes,
7.875%, 8/1/08...................................... 487,500
500,000 MDC Holdings, Inc.,
Sr. Notes,
8.375%, 2/1/08...................................... 491,250
------------
978,750
------------
Retailing & Wholesale -
4.1%
500,000 Great Atlantic & Pacific
Tea, Inc.,
Sr. Notes,
7.70%, 1/15/04...................................... 499,755
2,000,000 Kroger Co.,
Sr. Notes,
6.375%, 3/1/08...................................... 2,000,406
500,000 MTS, Inc.,
Sr. Notes (Subord.),
9.375%, 5/1/05...................................... 477,500
2,000,000 Sears Roebuck & Co.,
Debs.,
9.375%, 11/1/11..................................... 2,476,416
500,000 Southland Corp.,
Sr. Debs. (Subord.),
5.00%, 12/15/03..................................... 443,125
------------
5,897,202
------------
Telecommunication
Services & Equipment -
3.1%
250,000 Comcast Corp.,
Sr. Debs. (Subord.),
9.50%, 1/15/08...................................... 262,500
500,000 Echostar DBS Corp.,
Sr. Notes,
9.375%, 2/1/09 (a) ................................. 518,750
</TABLE>
59
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Total Return Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS & NOTES - continued
Telecommunication Services & Equipment - continued
$ 500,000 Jordan Telecommunication Products, Inc.,
Sr. Notes,
9.875%, 8/1/07...................................... $ 495,000
1,500,000 MCI Worldcom, Inc.,
Sr. Notes,
7.75%, 4/1/07....................................... 1,649,891
500,000 McLeodUSA, Inc.,
Sr. Notes,
8.125%, 2/15/09 (a)................................. 501,250
500,000 Price Communications Wireless, Inc.,
Sr. Notes (Secd.),
9.125%, 12/15/06.................................... 522,500
500,000 Qwest Communications Int'l., Inc.,
Sr. Notes,
7.50%, 11/1/08 (a).................................. 517,500
------------
4,467,391
------------
Textile & Apparel - 0.4%
500,000 Westpoint Stevens, Inc.,
Sr. Notes,
7.875%, 6/15/05..................................... 513,750
------------
Transportation - 3.3%
2,000,000 Federal Express Corp.,
Global Notes,
9.875%, 4/1/02...................................... 2,166,382
500,000 Sea Containers Ltd.,
Sr. Notes,
7.875%, 2/15/08..................................... 481,250
1,864,220 Southwest Airlines Co.,
Notes,
8.70%, 7/1/11....................................... 2,120,671
------------
4,768,303
------------
Lease Rental Obligations - 0.7%
500,000 Nationsrent, Inc.,
Sr. Notes (Subord.),
10.375%, 12/15/08................................... 522,500
500,000 United Rentals, Inc.,
Sr. Notes (Subord.),
9.25%, 1/15/09 (a).................................. 506,875
------------
1,029,375
------------
Total Corporate Bonds & Notes
(cost $51,832,279)................................. 51,463,069
------------
FOREIGN BONDS - 9.2%
Banks - 1.6%
600,000 Bayerische Hypo Vereinsbank,
EUR 4.75%, 9/19/07...................................... 675,164
985,000 IBRD World Bank,
NZD 7.25%, 5/27/03...................................... 551,156
383,468 Kreditanst Fur Wie,
EUR 5.50%, 3/12/07...................................... 454,552
1,075,000 Oest Kontrollbank,
DEM 5.75%, 9/12/07...................................... 657,596
------------
2,338,468
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
FOREIGN BONDS - continued
Finance - 1.0%
$ 1,000,000 DSL Fin. NV,
DEM 5.00%, 7/23/04..................................... $ 587,802
2,500,000 Eksportfinans AS,
SEK 6.875%, 2/9/04..................................... 344,871
200,000 GMAC Int'l. Fin. BV,
GBP 7.125%, 2/10/00.................................... 327,473
60,000 Swedish Export Credit Corp.,
GBP 7.625%, 12/27/01................................... 103,410
------------
1,363,556
------------
Food & Beverage Products - 0.2%
2,000,000 Sara Lee Corp.,
FRF Notes,
4.625%, 3/12/02.................................... 343,262
------------
Utilities - Water - 0.1%
180,000 Vodohospodarska Vystavba,
DEM 8.00%, 7/9/01...................................... 100,941
------------
Government - 6.3%
720,000 Australia (Government of),
AUD 9.75%, 3/15/02..................................... 515,102
400,000 Canada (Government of),
CAD 7.00%, 12/1/06..................................... 297,155
Denmark (Kingdom of):
2,100,000 5.00%, 8/15/05..................................... 323,921
DKK
4,300,000 7.00%, 11/15/07.................................... 746,407
DKK
425,000 FHLB,
GBP 6.875%, 6/7/02..................................... 719,561
300,000 Finland (Republic of),
CAD 9.50%, 9/15/04..................................... 234,732
France (Government of):
EUR 4.50%, 7/12/02..................................... 720,443
EUR 5.25%, 4/25/08..................................... 1,076,735
260,000,000 Japan (Government of),
JPY 2.60%, 3/20/18..................................... 2,231,290
417,477 Netherlands (Government of),
EUR 6.50%, 4/15/03..................................... 504,864
12,200,000 Sweden (Kingdom of),
SEK 5.00%, 1/15/04..................................... 1,575,712
70,000 United Mexican States,
GBP 8.75%, 5/30/02..................................... 110,585
------------
9,056,507
------------
Total Foreign Bonds
(cost $13,563,961)................................ 13,202,734
------------
MORTGAGE-BACKED SECURITIES - 22.6%
FHLMC:
4,490,469 6.00%, 2/1/29...................................... 4,375,154
4,500,000 6.50%, 3/1/29...................................... 4,490,325
5,226,030 7.00%, 6/1/27 - 5/1/28............................. 5,322,712
8,944,205 7.50%, 10/1/11 - 7/1/28............................ 9,204,521
2,772,528 8.00%, 4/1/27 - 5/1/27............................. 2,888,780
1,931,106 8.50%, 1/1/28...................................... 2,032,914
GNMA:
1,499,071 6.00%, 5/15/28..................................... 1,458,806
2,845,360 6.50%, 5/15/28..................................... 2,836,426
------------
Total Mortgage-Backed Securities
(cost $32,611,804)................................ 32,609,638
------------
</TABLE>
60
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Total Return Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
U.S. TREASURY OBLIGATIONS - 30.4%
U.S. Treasury Bonds:
$ 5,600,000 5.25%, 2/15/29...................................... $ 5,300,753
3,000,000 7.625%, 2/15/07..................................... 3,180,939
4,440,000 7.875%, 2/15/21..................................... 5,500,050
2,500,000 8.125%, 5/15/21..................................... 3,176,563
3,000,000 9.00%, 11/15/18..................................... 4,074,375
6,500,000 10.375%, 11/15/12................................... 8,573,909
U.S. Treasury Notes:
3,000,000 5.50%, 2/28/03...................................... 3,031,875
1,500,000 5.625%, 11/30/00.................................... 1,514,532
6,250,000 6.625%, 3/31/02..................................... 6,503,906
2,850,000 7.50%, 11/15/01..................................... 3,014,767
------------
Total U.S. Treasury Obligations
(cost $44,468,454)................................. 43,871,669
------------
YANKEE OBLIGATIONS - 2.0%
Finance - 0.4%
100,000 Hutchison Whampoa Fin., C.I. Ltd.,
Notes,
6.95%, 8/1/07 (a)................................... 96,507
500,000 ICI Fin. Nederlands,
Notes,
6.75%, 8/7/02....................................... 502,702
------------
599,209
------------
Oil/Energy - 0.3%
500,000 Gulf Canada Resources Ltd.,
Sr. Notes,
8.35%, 8/1/06....................................... 497,500
------------
Paper & Packaging - 0.4%
500,000 Norampac, Inc.,
Sr. Notes,
9.50%, 2/1/08....................................... 519,375
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - continued
Publishing, Broadcasting & Entertainment - 0.5%
$ 500,000 Imax Corp.,
Sr. Notes,
7.875%, 12/1/05...................................... $ 490,625
500,000 Radio E Televisao Bandeirantes,
Notes,
12.875%, 5/15/06 (a)................................. 257,500
------------
748,125
------------
Telecommunication Services & Equipment - 0.1%
100,000 TPSA Fin. BV,
7.125%, 12/10/03 (a)................................. 98,804
------------
Government - 0.3%
100,000 Kazakhstan (Republic of),
8.375%, 10/2/02...................................... 90,050
100,000 Korea (Republic of),
8.75%, 4/15/03....................................... 104,940
100,000 Lithuania (Republic of),
7.125%, 7/22/02...................................... 94,085
100,000 Slovakia (Republic of),
9.50%, 5/28/03....................................... 93,314
100,000 Thailand (Kingdom of),
7.75%, 4/15/07....................................... 99,585
------------
481,974
------------
Total Yankee Obligations
(cost $3,185,158)................................... 2,944,987
------------
REPURCHASE AGREEMENT - 0.9%
1,267,579 Dresdner Bank AG,
4.85%, dated 3/31/99, due 4/1/99,
maturity value $1,267,750
(cost $1,267,579) (b)............................... 1,267,579
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $146,929,235)......................... 100.8% 145,359,676
Other Assets and
Liabilities - net........................... (0.8) (1,173,355)
----- ------------
Net Assets................................... 100.0% $144,186,321
===== ============
</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 $1,275,000 U.S. Treasury Notes,
due 2/15/00; value including accrued interest - $1,294,866.
(c) Effective yield (calculated at date of purchase) is the annual yield at
which the bond accrues until its maturity date.
See Combined Notes to Financial Statements.
61
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Total Return Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999 (Unaudited)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
<TABLE>
<CAPTION>
Forward Foreign Currency Exchange
Contracts to Sell:
U.S. $ Value at In Exchange Unrealized Appreciation/
Exchange Date Contracts to Deliver March 31, 1999 for U.S. $ (Depreciation)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
4/16/99 1,851,000 Danish Krone $ 269,333 $ 297,254 $ 27,921
4/8/99 1,600,000 Euro Currency 1,730,791 1,734,352 3,561
5/28/99 1,584,033 Euro Currency 1,718,307 1,700,000 (18,307)
4/8/99 466,000 Pound Sterling 752,296 751,376 (920)
6/3/99 455,000 Pound Sterling 734,225 728,409 (5,816)
2/22/00 341,200,000 Japanese Yen 3,013,222 2,995,084 (18,138)
4/8/99 11,600,000 Swedish Krona 1,412,991 1,405,498 (7,493)
5/18/99 4,014,000 Swedish Krona 490,009 495,825 5,816
<CAPTION>
Forward Foreign Currency Exchange
Contracts to Buy:
U.S. Value at in Exchange Unrealized
Exchange Date Contracts to Receive March 31,1999 for U.S. $ Appreciation
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2/22/00 81,200,000 Japanese Yen 717,098 714,848 $ 2,250
</TABLE>
Summary of Abbreviations:
AUD Australian Dollar
CAD Canadian Dollar
DEM Deutsche Mark
DKK Danish Krone
EUR Euro Dollar
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FRF French Franc
GBP Pound Sterling
GNMA Government National Mortgage Association
JPY Japanese Yen
MTN Medium Term Note
NZD New Zealand Dollar
SEK Swedish Krone
See Combined Notes to Financial Statements.
62
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Funds
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Adjustable Rate Core Bond Fixed Income Income Plus
Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Identified cost of
securities............. $33,639,370 $570,271,446 $601,554,784 $1,261,811,246
Net unrealized gains or
losses on securities... (177,504) 5,125,659 7,812,404 30,352,837
- ---------------------------------------------------------------------------------------
Market value of
securities............. 33,461,866 575,397,105 609,367,188 1,292,164,083
Cash.................... 364 0 0 0
Receivable for
securities sold........ 650,486 0 0 15,210,202
Receivable for Fund
shares sold............ 0 400,973 582,778 964,067
Interest receivable..... 286,672 7,457,630 7,861,828 21,284,459
Prepaid expenses and
other assets........... 0 20,954 41,284 142,421
- ---------------------------------------------------------------------------------------
Total assets........... 34,399,388 583,276,662 617,853,078 1,329,765,232
- ---------------------------------------------------------------------------------------
Liabilities
Distributions payable... 11,716 2,416,051 2,287,189 5,809,300
Payable for securities
purchased.............. 246,801 0 0 19,050,151
Payable for Fund shares
redeemed............... 0 3,008,569 1,072,523 395,762
Advisory fee payable.... 8,371 148,752 207,604 442,673
Distribution Plan
expenses payable....... 1,333 112 1,698 2,631
Due to other related
parties................ 0 14,510 12,286 28,141
Accrued expenses and
other liabilities...... 1,087 71,293 59,532 173,142
- ---------------------------------------------------------------------------------------
Total liabilities...... 269,308 5,659,287 3,640,832 25,901,800
- ---------------------------------------------------------------------------------------
Net assets.............. $34,130,080 $577,617,375 $614,212,246 $1,303,863,432
- ---------------------------------------------------------------------------------------
Net assets represented
by
Paid-in capital......... $35,046,232 $574,772,909 $606,461,708 $1,272,127,981
Undistributed
(overdistributed) net
investment income...... (10,547) (309,400) (371,864) (556,305)
Accumulated net realized
gains or losses on
securities and foreign
currency related
transactions........... (728,101) (1,971,793) 309,998 1,938,919
Net unrealized gains or
losses on securities
and foreign currency
related transactions... (177,504) 5,125,659 7,812,404 30,352,837
- ---------------------------------------------------------------------------------------
Total net assets........ $34,130,080 $577,617,375 $614,212,246 $1,303,863,432
- ---------------------------------------------------------------------------------------
Net assets consists of
Class I................. $21,132,223 $120,644,845 $602,077,482 $1,294,115,801
Class IS................ 12,997,857 780,885 12,134,764 9,747,631
Class IC................ 0 456,191,645 0 0
- ---------------------------------------------------------------------------------------
Total net assets........ $34,130,080 $577,617,375 $614,212,246 $1,303,863,432
- ---------------------------------------------------------------------------------------
Shares outstanding
Class I................. 2,199,595 11,539,441 100,997,922 230,425,301
Class IS................ 1,351,884 74,694 2,035,782 1,735,630
Class IC................ 0 43,633,867 0 0
- ---------------------------------------------------------------------------------------
Net asset value per
share
Class I................. $ 9.61 $ 10.45 $ 5.96 $ 5.62
- ---------------------------------------------------------------------------------------
Class IS................ $ 9.61 $ 10.45 $ 5.96 $ 5.62
- ---------------------------------------------------------------------------------------
Class IC................ -- $ 10.45 -- --
- ---------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
63
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Funds
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
March 31, 1999 (Unaudited)
<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............. $710,852,391 $42,637,680 $77,886,426 $146,929,235
Net unrealized gains or
losses on securities... 17,424,319 38,799 (36,422) (1,569,559)
- ----------------------------------------------------------------------------------
Market value of
securities............. 728,276,710 42,676,479 77,850,004 145,359,676
Cash.................... 0 480,461 0 0
Foreign currency, at
value (cost $0,
$198,999, $0, and
350547, respectively).. 0 198,180 0 348,466
Receivable for
securities sold........ 15,795,727 0 0 766,352
Receivable for Fund
shares sold............ 206,202 0 245,809 0
Interest receivable..... 10,201,518 852,096 755,828 2,325,771
Receivable for closed
forward foreign
currency exchange
contracts.............. 0 150,382 0 13,312
Unrealized gains on
forward foreign
currency exchange
contracts.............. 0 268,008 0 39,548
Prepaid expenses and
other assets........... 21,923 22,145 33,141 24,844
- ----------------------------------------------------------------------------------
Total assets........... 754,502,080 44,647,751 78,884,782 148,877,969
- ----------------------------------------------------------------------------------
Liabilities
Distributions payable... 2,803,246 36,210 136,774 160,980
Payable for securities
purchased.............. 18,758,824 0 1,995,800 4,397,836
Payable for Fund shares
redeemed............... 306,472 0 222,552 0
Unrealized losses on
forward foreign
currency exchange
contracts.............. 0 48,459 0 50,674
Due to custodian bank... 1,999,046 0 0 0
Advisory fee payable.... 286,100 12,367 23,352 45,826
Distribution Plan
expenses payable....... 1,236 17 252 720
Due to other related
parties................ 16,591 989 1,877 2,863
Accrued expenses and
other liabilities...... 128,759 29,661 12,847 32,749
- ----------------------------------------------------------------------------------
Total liabilities...... 24,300,274 127,703 2,393,454 4,691,648
- ----------------------------------------------------------------------------------
Net assets.............. $730,201,806 $44,520,048 $76,491,328 $144,186,321
- ----------------------------------------------------------------------------------
Net assets represented
by
Paid-in capital......... $700,356,070 $46,703,590 $76,406,575 $149,635,865
Undistributed
(overdistributed) net
investment income...... (57,547) (678,091) 9,877 (3,356)
Accumulated net realized
gains or losses on
securities and foreign
currency related
transactions........... 12,478,964 (1,738,524) 111,298 (3,853,600)
Net unrealized gains or
losses on securities
and foreign currency
related transactions... 17,424,319 233,073 (36,422) (1,592,588)
- ----------------------------------------------------------------------------------
Total net assets........ $730,201,806 $44,520,048 $76,491,328 $144,186,321
- ----------------------------------------------------------------------------------
Net assets consists of
Class I................. $724,568,625 $44,389,594 $75,798,512 $137,583,146
Class IS................ 5,633,181 130,454 692,816 6,603,175
- ----------------------------------------------------------------------------------
Total net assets........ $730,201,806 $44,520,048 $76,491,328 $144,186,321
- ----------------------------------------------------------------------------------
Shares outstanding
Class I................. 11,164,134 4,732,295 7,315,774 1,430,977
Class IS................ 86,796 13,918 66,866 68,678
- ----------------------------------------------------------------------------------
Net asset value per
share
Class I................. $ 64.90 $ 9.38 $ 10.36 $ 96.15
- ----------------------------------------------------------------------------------
Class IS................ $ 64.90 $ 9.37 $ 10.36 $ 96.15
- ----------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
64
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Funds
- --------------------------------------------------------------------------------
Statements of Operations
Six Months Ended March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Adjustable Rate Core Bond Fixed Income Income Plus
Fund Fund Fund Fund
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income
Interest................ $1,026,769 $ 18,193,805 $ 19,904,473 $ 42,119,687
- -------------------------------------------------------------------------------------
Expenses
Advisory fee............ 47,030 1,195,963 1,594,310 3,335,481
Distribution Plan
expenses............... 13,092 360 14,183 10,637
Transfer agent fee...... 0 49,844 10,839 15,995
Administrative services
fees................... 0 77,406 82,586 172,744
Trustees' fees and
expenses............... 397 7,384 11,707 21,180
Custodian fee........... 0 112,097 120,343 231,222
Registration and filing
fees................... 0 65,656 16,363 81,724
Printing and postage
expenses............... 0 15,486 16,323 25,724
Professional fees....... 0 13,618 17,660 23,591
Other................... 51 5,887 6,792 32,216
- -------------------------------------------------------------------------------------
Total expenses......... 60,570 1,543,701 1,891,106 3,950,514
Less: Fee credits....... 0 (18,469) (18,661) (37,723)
Fee waivers............ 0 (298,991) (318,862) (667,096)
- -------------------------------------------------------------------------------------
Net expenses........... 60,570 1,226,241 1,553,583 3,245,695
- -------------------------------------------------------------------------------------
Net investment income... 966,199 16,967,564 18,350,890 38,873,992
- -------------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities
and foreign currency
related transactions
Net realized gains or
losses on Securities... (108,293) (1,651,508) 1,901,367 3,199,712
- -------------------------------------------------------------------------------------
Net change in unrealized
losses on securities
and foreign currency
related transactions... (75,018) (17,992,152) (18,845,876) (60,720,347)
- -------------------------------------------------------------------------------------
Net realized and
unrealized losses on
securities and foreign
currency related
transactions........... (183,311) (19,643,660) (16,944,509) (57,520,635)
- -------------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting
from operations........ $ 782,888 $ (2,676,096) $ 1,406,381 $(18,646,643)
- -------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
65
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Funds
- --------------------------------------------------------------------------------
Statements of Operations
Six Months Ended March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Intermediate International Limited Total Return
Bond Bond Duration Bond
Fund Fund Fund Fund
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income
Interest................ $ 18,789,248 $ 1,244,146 $ 2,207,890 $ 4,942,931
- ---------------------------------------------------------------------------------
Expenses
Advisory fee............ 2,213,080 143,605 108,303 283,546
Distribution Plan
expenses............... 6,317 164 775 7,258
Transfer agent fee...... 1,601 741 15,839 162
Administrative services
fees................... 95,509 6,195 9,344 18,145
Trustees' fees and
expenses............... 13,132 482 762 1,976
Custodian fee........... 134,393 21,680 6,483 22,534
Registration and filing
fees................... 22,502 35,509 13,190 38,512
Printing and postage
expenses............... 19,232 4,043 5,262 5,625
Professional fees....... 12,874 16,354 14,301 9,030
Other................... 8,079 316 408 640
- ---------------------------------------------------------------------------------
Total expenses......... 2,526,719 229,089 174,667 387,428
Less: Fee credits....... (23,739) (5,356) (2,238) (4,238)
Fee waivers............ (368,847) (67,998) (64,656) (36,265)
- ---------------------------------------------------------------------------------
Net expenses........... 2,134,133 155,735 107,773 346,925
- ---------------------------------------------------------------------------------
Net investment income... 16,655,115 1,088,411 2,100,117 4,596,006
- ---------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities
and foreign currency
related transactions
Net realized gains or
losses on:
Securities............. 12,757,430 2,475,964 120,367 (2,069,761)
Foreign currency
related transactions.. 0 (1,316,807) 0 (64,527)
- ---------------------------------------------------------------------------------
Net realized gains or
losses on securities
and foreign currency
related transactions... 12,757,430 1,159,157 120,367 (2,134,288)
- ---------------------------------------------------------------------------------
Net change in unrealized
losses on securities
and foreign currency
related transactions... (27,406,261) (1,358,099) (1,086,739) (2,990,450)
- ---------------------------------------------------------------------------------
Net realized and
unrealized losses on
securities and foreign
currency related
transactions........... (14,648,831) (198,942) (966,372) (5,124,738)
- ---------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting
from operations........ $ 2,006,284 $ 889,469 $ 1,133,745 $ (528,732)
- ---------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
66
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Funds
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
Six Months Ended March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Adjustable Rate Core Bond Fixed Income Income Plus
Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income... $ 966,199 $ 16,967,564 $ 18,350,890 $ 38,873,992
Net realized gains or
losses on securities
and foreign currency
related transactions... (108,293) (1,651,508) 1,901,367 3,199,712
Net change in unrealized
losses on securities
and foreign currency
related transactions... (75,018) (17,992,152) (18,845,876) (60,720,347)
- ----------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 782,888 (2,676,096) 1,406,381 (18,646,643)
- ----------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class I................ (659,689) (3,493,259) (18,117,640) (38,946,064)
Class IS............... (319,933) (8,008) (316,523) (241,414)
Class IC............... 0 (13,576,084) 0 0
Net realized gains
Class I................ 0 (2,487,138) 0 (12,260,420)
Class IS............... 0 (3,470) 0 (77,202)
Class IC............... 0 (9,796,525) 0 0
- ----------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (979,622) (29,364,484) (18,434,163) (51,525,100)
- ----------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold................... 8,553,980 75,833,673 64,005,510 111,531,295
Payment for shares
redeemed............... (7,922,702) (77,792,472) (116,080,485) (127,058,002)
Net asset value of
shares issued in
reinvestment of
distributions.......... 876,984 14,840,324 4,599,675 14,793,326
- ----------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... 1,508,262 12,881,525 (47,475,300) (733,381)
- ----------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... 1,311,528 (19,159,055) (64,503,082) (70,905,124)
Net assets
Beginning of period..... 32,818,552 596,776,430 678,715,328 1,374,768,556
- ----------------------------------------------------------------------------------------
End of period........... $34,130,080 $577,617,375 $ 614,212,246 $1,303,863,432
- ----------------------------------------------------------------------------------------
Overdistributed net
investment income...... $ (10,547) $ (309,400) $ (371,864) $ (556,305)
- ----------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
67
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Funds
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
Six Months Ended March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Intermediate International Limited Total Return
Bond Bond Duration Bond
Fund Fund Fund Fund
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income... $ 16,655,115 $ 1,088,411 $ 2,100,117 $ 4,596,006
Net realized gains or
losses on securities
and foreign currency
related transactions... 12,757,430 1,159,157 120,367 (2,134,288)
Net change in unrealized
losses on securities
and foreign currency
related transactions... (27,406,261) (1,358,099) (1,086,739) (2,990,450)
- -----------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 2,006,284 889,469 1,133,745 (528,732)
- -----------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class I................ (16,614,366) (1,658,310) (2,078,035) (4,421,593)
Class IS............... (108,820) (4,322) (17,228) (182,520)
Net realized gains
Class I................ (9,895,453) 0 (125,867) 0
Class IS............... (67,252) 0 (1,052) 0
- -----------------------------------------------------------------------------------
Total distributions to
shareholders.......... (26,685,891) (1,662,632) (2,222,182) (4,604,113)
- -----------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold................... 39,278,389 3,526,405 22,960,750 10,791,311
Payment for shares
redeemed............... (44,631,453) (6,256,931) (18,179,037) (1,177,194)
Net asset value of
shares issued in
reinvestment of
distributions.......... 8,624,625 1,287,676 1,373,620 3,682,993
- -----------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... 3,271,561 (1,442,850) 6,155,333 13,297,110
- -----------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... (21,408,046) (2,216,013) 5,066,896 8,164,265
Net assets
Beginning of period..... 751,609,852 46,736,061 71,424,432 136,022,056
- -----------------------------------------------------------------------------------
End of period........... $730,201,806 $44,520,048 $ 76,491,328 $144,186,321
- -----------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ (57,547) $ (678,091) $ 9,877 $ (3,356)
- -----------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
68
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Funds
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
Year Ended September 30, 1998
<TABLE>
<CAPTION>
Adjustable Core Fixed Income
Rate Bond Income Plus
Fund (a) Fund (b) Fund (b) Fund (b)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income... $ 1,232,382 $ 27,872,987 $ 26,565,434 $ 62,767,885
Net realized gains or
losses on securities
and foreign currency
related transactions... (78,229) 11,761,342 (496,271) 10,936,797
Net change in unrealized
gains or losses on
securities and foreign
currency related
transactions........... (188,602) 5,569,632 18,257,417 34,820,095
- --------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ 965,551 45,203,961 44,326,580 108,524,777
- --------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class I................ (887,998) (5,164,728) (26,373,150) (62,598,276)
Class IS............... (344,384) (6,574) (192,964) (169,001)
Class IC............... 0 (22,701,686) 0 0
- --------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (1,232,382) (27,872,988) (26,566,114) (62,767,277)
- --------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold................... 12,620,392 763,461,851 584,709,292 1,335,192,430
Payment for shares
redeemed............... (16,749,211) (188,202,770) (98,155,046) (170,985,567)
Net asset value of
shares issued in
reinvestment of
distributions.......... 913,798 4,186,376 2,361,028 1,853,405
Net asset value of
shares issued in
acquisition of:
CoreFund Bond Fund..... 0 0 0 162,950,788
CoreFund Short
Intermediate Bond
Fund.................. 0 0 172,039,588 0
- --------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... (3,215,021) 579,445,457 660,954,862 1,329,011,056
- --------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... (3,481,852) 596,776,430 678,715,328 1,374,768,556
Net assets
Beginning of period..... 36,300,404 0 0 0
- --------------------------------------------------------------------------------------
End of period........... $ 32,818,552 $ 596,776,430 $678,715,328 $1,374,768,556
- --------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ 2,876 $ (199,613) $ (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.
See Combined Notes to Financial Statements.
69
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Funds
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
Year Ended September 30, 1998
<TABLE>
<CAPTION>
Intermediate International Limited Total Return
Bond Bond 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
Payment for shares
redeemed............... (89,559,569) (144,292) (40,029,773) (1,426,650)
Net asset value of
shares issued in
reinvestment of
distributions.......... 120,031 512,803 1,650,900 3,130,119
Net asset value of
shares issued in
acquisition of
CoreFund Short Term
Income Fund............ 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.
70
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Select Fixed Income Funds
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
For the periods indicated
<TABLE>
<CAPTION>
Adjustable Rate Fund International Bond Fund
-------------------- -----------------------
Year Ended Year Ended
February 28, 1998 June 30, 1998
- ---------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income............. $ 3,007,633 $ 1,771,184
Net realized gains or losses on
securities and foreign currency
related transactions............. 297,743 (242,462)
Net change in unrealized gains or
losses on securities and foreign
currency related transactions.... (69,974) 38,713
- ---------------------------------------------------------------------------------
Net increase in net assets
resulting from operations....... 3,235,402 1,567,435
- ---------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income
Class I.......................... (2,543,452) (2,380,391)
Class IS......................... (437,527) (14,784)
- ---------------------------------------------------------------------------------
Total distributions to
shareholders.................... (2,980,979) (2,395,175)
- ---------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold......... 17,099,051 1,569,153
Payment for shares redeemed....... (57,749,240) (640,270)
Net asset value of shares issued
in reinvestment of
distributions.................... 2,868,485 2,047,650
- ---------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from capital
share transactions.............. (37,781,704) 2,976,533
- ---------------------------------------------------------------------------------
Total increase (decrease) in net
assets......................... (37,527,281) 2,148,793
Net assets
Beginning of period............... 73,827,685 34,771,812
- ---------------------------------------------------------------------------------
End of period..................... $ 36,300,404 $36,920,605
- ---------------------------------------------------------------------------------
Undistributed (overdistributed)
net investment income............ $ (10,097) 0
- ---------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
71
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (Unaudited)
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 Mu-
nicipal Bond Fund (formerly Evergreen Select Intermediate Tax Exempt Bond Fund)
("Intermediate Bond Fund"), Evergreen Select International Bond Fund ("Interna-
tional 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 Evergreen Se-
lect Fixed Income Trust (the "Trust"), a Delaware business trust organized on
September 18, 1997. The Trust is an open end management investment company reg-
istered 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"). Additionally, the Core Bond Fund
offered an Institutional Charitable Class of shares ("Class IC"). Each class of
shares is sold without a front-end sales charge or contingent deferred sales
charge. Class IS shares pay on ongoing service fee. Class I and Class IS shares
are available to institutional investors through broker dealers, banks and
other financial intermediaries. Class IC shares were available only to those
investors that qualify as a non-profit organization under the Internal Revenue
Code.
On April 30, 1999, Class IC shares were terminated through a non-taxable ex-
change for Class I shares. Shareholders of Class IC received shares of Class I
with an equivalent aggregate net asset value to their Class IC shares held
prior to the exchange.
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 institu-
tional traders. Securities for which valuations are not available from an inde-
pendent 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.
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. Each Fund monitors the adequacy of the collateral daily and
will require the seller to provide additional collateral in the event the mar-
ket value of the securities pledged falls below the carrying value of the re-
purchase agreement, including accrued interest. Each Fund will only enter into
repurchase agreements with banks and other financial institutions, which are
deemed by the investment advisor to be creditworthy pursuant to guidelines es-
tablished by the Board of Trustees.
72
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (Unaudited) (continued)
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, may
transfer uninvested cash balances into a joint trading account. These balances
are invested in one or more repurchase agreements that are fully collateralized
by U.S. Treasury and/or federal agency obligations.
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 or 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. Securities Lending
In order to generate income and to offset expenses, the Funds may lend portfo-
lio securities to brokers, dealers and other financial organizations. The
Funds' 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
collateralized by cash, letters of credit or U.S. Government securities that
are maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities, including accrued interest. The Fund
monitors the adequacy of the collateral daily and will require the borrower to
provide additional collateral in the event the value of the collateral falls
below 100% of the market value of the securities on loan. While such securities
are on loan, the borrower will pay a Fund any income accruing thereon, and the
Fund may invest any cash collateral received in portfolio securities, thereby
increasing its return. A Fund will have the right to call any such loan and ob-
tain the securities loaned at any time on five days' notice. Any gain or loss
in the market price of the loaned securities, which occurs during the term of
the loan, would affect a Fund and its investors. A Fund may pay fees in connec-
tion with such loans.
73
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (Unaudited) (continued)
G. Security Transactions and Investment Income
Securities transactions are accounted for no later than one business day after
the trade date. Realized gains and losses are computed on the identified cost
basis. Interest income is recorded on the accrual basis and includes accretion
of discounts and amortization of premiums.
H. 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.
I. Distributions
Distributions from net investment income for the Funds are declared daily and
paid monthly. Distributions from net investment income for the International
Bond Fund are declared and paid quarterly. Distributions from net realized cap-
ital gains, if any, are paid at least annually. 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.
Certain distributions paid during previous years have been reclassified to con-
form to current year presentation.
J. Class Allocations
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses are prorated among the classes based on the rela-
tive net assets of each class. Currently, class specific expenses are limited
to expenses incurred under the Distribution Plans for Class IS.
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.
First International Advisors, Ltd. ("First International"), a subsidiary of
First Union, is the investment advisor for the International Bond Fund. First
International is paid an advisory fee that is calculated daily and paid month-
ly. The advisory fee is computed at an annual rate of 0.60% of the average
daily net asset value of the Fund. During the six months ended March 31, 1999,
First International waived advisory fees of $67,998, representing 0.28% of av-
erage daily net assets for the period.
First Union National Bank ("FUNB"), a subsidiary of First Union, serves as the
investment advisor to Core Bond Fund, Fixed Income Fund, Income Plus, Interme-
diate Bond Fund, Limited Duration Fund and Total Return Bond Fund. In return
for providing investment advisory and administrative services 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>
<S> <C>
Core Bond Fund.................................................... 0.40%
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>
FUNB has voluntarily agreed to reduce the investment advisory fee on each Fund
and/or reimburse a portion of each Fund's annual operating expenses (excluding
interest, taxes, brokerage commissions and extraordi-
74
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (Unaudited) (continued)
nary expenses). For the period ended March 31, 1999, FUNB voluntarily waived
the following amounts of advisory fees:
<TABLE>
<CAPTION>
Fees % of Average
Waived daily net assets
-------- ----------------
<S> <C> <C>
Core Bond Fund................................ $298,991 0.10%
Fixed Income Fund............................. 318,862 0.10%
Income Plus Fund.............................. 667,096 0.10%
Intermediate Bond Fund........................ 368,847 0.10%
Limited Duration Fund......................... 64,656 0.18%
Total Return Bond Fund........................ 36,265 0.05%
</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 its investment advi-
sory subsidiaries are also the investment advisors. The administration 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 asset value of
each Fund. The sub-administration fee is calculated by applying percentage
rates, which start at 0.01% and decline to 0.004% per annum as net assets in-
crease, to the average daily net asset value of each Fund.
During the six months ended March 31, 1999, the Funds, other than Adjustable
Rate Fund, paid or accrued the following amounts for administrative and sub-ad-
ministrative services:
<TABLE>
<CAPTION>
Administration Sub-administration
Fee Fee
-------------- ------------------
<S> <C> <C>
Core Bond Fund......................... $ 61,741 $15,665
Fixed Income Fund...................... 65,876 16,710
Income Plus Fund....................... 137,790 34,954
Intermediate Bond Fund................. 76,183 19,326
International Bond Fund................ 4,941 1,254
Limited Duration Fund.................. 7,453 1,891
Total Return Bond Fund................. 14,431 3,714
</TABLE>
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 asset 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.
75
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (Unaudited) (continued)
5. ACQUISITIONS
During the year ended September 30, 1998, several of the Funds had acquired
various open-end management investment companies registered under the 1940 Act.
On July 27, 1998, Fixed Income Fund acquired substantially all the assets and
assumed certain liabilities of CoreFund Short Intermediate Bond Fund in ex-
change 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 acquisi-
tions 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 ap-
preciation acquired and the aggregate net assets of each Fund immediately after
the acquisition were as follows:
<TABLE>
<CAPTION>
Unrealized
Value of Net Number of Appreciation Net Assets
Acquiring Fund Acquired Fund Assets Acquired Shares Issued (Depreciation) After 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.
6. CONVERSION INFORMATION
On November 24, 1997, the Fixed Income Fund, Income Plus Fund, Intermediate
Bond Fund and Limited Duration Fund commenced operations of their respective
Class I shares, and the Core Bond Fund commenced operations of its Class IC
shares, as a result of a conversion of common trust funds managed by FUNB.
<TABLE>
<CAPTION>
Core Bond Fixed Income Income Plus Intermediate Limited
Fund Fund Fund Bond Fund Duration Fund
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares issued........... 37,986,480 78,155,087 201,873,263 11,507,322 4,756,439
Net assets.............. $405,676,074 $465,572,501 $1,153,786,915 $746,085,404 $49,567,895
Net asset value per
share.................. $10.68 $5.96 $5.72 $64.84 $10.42
Unrealized appreciation
of investments......... $17,548,179 $7,194,614 $52,895,358 $28,765,870 $350,938
</TABLE>
The foregoing amounts are reflected as proceeds received from shares sold in
the statement of changes in net assets.
7. IN-KIND TRANSACTION
On January 21, 1998, the Evergreen Intermediate Term Bond Fund II, Class Y, ex-
ecuted a redemption in kind transaction of $107,122,275. This transaction re-
sulted in the liquidation of substantially all of the net assets of this Fund's
Class Y shares. In turn, on January 22, 1998, the assets from this transaction
were transferred to the Core Bond Fund in exchange for 9,937,532 Class I
shares. These amounts are reflected in proceeds from shares sold in the state-
ment of changes in net assets. In exchange for these shares, investment securi-
ties, excluding cash and cash equivalents, with a cost and market value of
$105,937,662, were contributed to the Fund. Additionally, Core Bond Fund re-
ceived cash and other assets of $1,184,613 to complete the transaction.
76
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (Unaudited) (continued)
8. 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, Class IS and Class IC. Transactions in shares of the
Funds were as follows:
Adjustable Rate Fund
<TABLE>
<CAPTION>
Six Months Ended Period Ended Year Ended
March 31, 1999 September 30, 1998 (a) February 28, 1998
--------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I
Shares sold............. 35,348 $ 341,384 694,346 $ 6,750,376 756,542 $ 7,370,775
Shares redeemed......... (298,145) (2,885,752) (1,040,259) (10,108,386) (5,579,904) (54,382,797)
Shares issued in
reinvestment of
distributions.......... 67,191 644,647 76,201 739,024 254,776 2,481,417
- ----------------------------------------------------------------------------------------------------
Net decrease............ (195,606) $(1,899,721) (269,712) $ (2,618,986) (4,568,586) $(44,530,605)
- ----------------------------------------------------------------------------------------------------
Class IS
Shares sold............. 856,227 $ 8,212,596 603,561 $ 5,870,016 996,337 $ 9,728,276
Shares redeemed......... (524,600) (5,036,950) (683,194) (6,640,825) (344,863) (3,366,443)
Shares issued in
reinvestment of
distributions.......... 24,211 232,337 18,011 174,774 39,661 387,068
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease)............. 355,838 $ 3,407,983 (61,622) $ (596,035) 691,135 $ 6,748,901
- ----------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting
from capital share
transactions........... 160,232 $ 1,508,262 (331,334) $ (3,215,021) (3,877,451) $(37,781,704)
- ----------------------------------------------------------------------------------------------------
</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.
Core Bond Fund
<TABLE>
<CAPTION>
Six Months Ended Period Ended
March 31, 1999 September 30, 1998 (a)
------------------------ --------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............. 2,101,413 $ 22,508,065 25,320,737 $ 272,870,840
Shares redeemed......... (2,374,653) (25,497,591) (14,355,469) (154,715,985)
Shares issued in
reinvestment of
distributions.......... 466,781 4,978,345 380,632 4,107,609
- ------------------------------------------------------------------------------
Net increase............ 193,541 $ 1,988,819 11,345,900 $ 122,262,464
- ------------------------------------------------------------------------------
<CAPTION>
Six Months Ended Period Ended
March 31, 1999 September 30, 1998 (b)
------------------------ --------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class IS
Shares sold............. 72,635 $ 762,948 28,459 $ 298,107
Shares redeemed......... (24,637) (263,746) (2,982) (32,567)
Shares issued in
reinvestment of
distributions.......... 753 8,031 466 5,043
- ------------------------------------------------------------------------------
Net increase............ 48,751 $ 507,233 25,943 $ 270,583
- ------------------------------------------------------------------------------
<CAPTION>
Six Months Ended Period Ended
March 31, 1999 September 30, 1998 (c)
------------------------ --------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class IC
Shares sold............. 4,872,190 $ 52,562,660 45,858,535 $ 490,292,904
Shares redeemed......... (4,930,694) (52,031,135) (3,099,900) (33,454,218)
Shares issued in
reinvestment of
distributions.......... 926,918 9,853,948 6,818 73,724
- ------------------------------------------------------------------------------
Net increase............ 868,414 $ 10,385,473 42,765,453 $ 456,912,410
- ------------------------------------------------------------------------------
Net increase in net
assets resulting from
capital share
transactions........... 1,110,706 $ 12,881,525 54,137,296 $ 579,445,457
- ------------------------------------------------------------------------------
</TABLE>
(a) For the period from December 19, 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.
(c) For the period from November 24, 1997 (commencement of operations) to
September 30, 1998.
77
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (Unaudited) (continued)
Fixed Income Fund
<TABLE>
<CAPTION>
Six Months Ended Period Ended
March 31, 1999 September 30, 1998 (a)
-------------------------- -------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............. 9,358,672 $ 56,416,579 96,306,245 $574,168,788
Shares redeemed......... (18,347,016) (110,923,223) (15,780,546) (94,528,967)
Shares issued in
reinvestment of
distributions.......... 730,821 4,406,155 367,945 2,225,816
Shares issued in
acquisition of CoreFund
Short Intermediate
Bond Fund.............. 0 0 28,361,801 169,524,345
- --------------------------------------------------------------------------------
Net increase
(decrease)............. (8,257,523) $ (50,100,489) 109,255,445 $651,389,982
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Period Ended
March 31, 1999 September 30, 1998 (b)
------------------------ -------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class IS
Shares sold.............. 1,258,302 $ 7,588,931 1,763,400 $ 10,540,504
Shares redeemed.......... (856,680) (5,157,262) (604,664) (3,626,079)
Shares issued in
reinvestment of
distributions........... 32,133 193,520 22,476 135,212
Shares issued in
acquisition of CoreFund
Short Intermediate Bond
Fund.................... 0 0 420,815 2,515,243
- ------------------------------------------------------------------------------
Net increase............. 433,755 $ 2,625,189 1,602,027 $ 9,564,880
- ------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting
from capital share
transactions............ (7,823,768) $(47,475,300) 110,857,472 $660,954,862
- ------------------------------------------------------------------------------
</TABLE>
(a) For the period from November 24, 1997 (commencement of operations) to
September 30, 1998.
(b) For the period from March 9, 1998 (commencement of class operations) to
September 30, 1998.
Income Plus Fund
<TABLE>
<CAPTION>
Six Months Ended Period Ended
March 31, 1999 September 30, 1998 (a)
-------------------------- ---------------------------
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............. 18,106,971 $ 103,926,997 231,167,025 $1,322,240,227
Shares redeemed......... (21,236,961) (121,900,299) (28,469,435) (163,795,977)
Shares issued in
reinvestment of
distributions.......... 2,542,342 14,571,088 300,191 1,753,774
Shares issued in
acquisition of CoreFund
Bond Fund.............. 0 0 28,015,168 161,316,824
- ----------------------------------------------------------------------------------
Net increase
(decrease)............. (587,648) $ (3,402,214) 231,012,949 $1,321,514,848
- ----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Period Ended
March 31, 1999 September 30, 1998 (b)
---------------------- ---------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class IS
Shares sold............... 1,327,865 $ 7,604,298 2,219,376 $ 12,952,203
Shares redeemed........... (903,224) (5,157,703) (1,248,097) (7,189,590)
Shares issued in
reinvestment of
distributions............ 38,775 222,238 17,172 99,631
Shares issued in
acquisition of CoreFund
Bond Fund................ 0 0 283,763 1,633,964
- --------------------------------------------------------------------------------
Net increase.............. 463,416 $ 2,668,833 1,272,214 $ 7,496,208
- --------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting from
capital share
transactions............. (124,232) $ (733,381) 232,285,163 $1,329,011,056
- --------------------------------------------------------------------------------
</TABLE>
(a) For the period from November 24, 1997 (commencement of operations) to
September 30, 1998.
(b) For the period from March 2, 1998 (commencement of class operations) to
September 30, 1998.
78
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (Unaudited) (continued)
Intermediate Bond Fund
<TABLE>
<CAPTION>
Six Months Ended Period Ended
March 31, 1999 September 30, 1998 (a)
---------------------- ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold................. 512,936 $ 33,777,839 12,457,190 $808,447,293
Shares redeemed............. (608,363) (40,088,782) (1,328,980) (87,315,146)
Shares issued in
reinvestment of
distributions.............. 130,177 8,515,214 1,174 77,276
- ------------------------------------------------------------------------------
Net increase................ 34,750 $ 2,204,271 11,129,384 $721,209,423
- ------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Period Ended
March 31, 1999 September 30, 1998 (b)
-------------------- ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class IS
Shares sold................... 83,319 $ 5,500,550 104,141 $ 6,853,148
Shares redeemed............... (68,765) (4,542,671) (34,214) (2,244,423)
Shares issued in reinvestment
of distributions............. 1,668 109,411 647 42,755
- ------------------------------------------------------------------------------
Net increase.................. 16,222 $ 1,067,290 70,574 $ 4,651,480
- ------------------------------------------------------------------------------
Net increase in net assets
resulting from capital share
transactions................. 50,972 $ 3,271,561 11,199,958 $725,860,903
- ------------------------------------------------------------------------------
</TABLE>
(a) For the period from November 24, 1997 (commencement of operations) to Sep-
tember 30, 1998.
(b) For the period from March 2, 1998 (commencement of class operations) to
September 30, 1998.
International Bond Fund
<TABLE>
<CAPTION>
Six Months Ended Period Ended Year Ended
March 31, 1999 September 30, 1998 (a) June 30, 1998
--------------------- ----------------------- -------------------
Shares Amount Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I
Shares sold............. 368,766 $ 3,526,405 906,343 $ 8,607,462 157,657 $1,499,070
Shares redeemed......... (665,042) (6,255,586) (7,356) (70,319) (60,566) (577,276)
Shares issued in
reinvestment of
distributions.......... 135,241 1,283,383 53,689 511,122 216,504 2,032,922
- ----------------------------------------------------------------------------------------------
Net increase
(decrease)............. (161,035) $(1,445,798) 952,676 $ 9,048,265 313,595 $2,954,716
- ----------------------------------------------------------------------------------------------
Class IS
Shares sold............. 0 $ 0 22 $ 208 7,353 $ 70,083
Shares redeemed......... (141) (1,345) (7,900) (73,973) (6,711) (62,994)
Shares issued in
reinvestment of
distributions.......... 452 4,293 177 1,681 1,571 14,728
- ----------------------------------------------------------------------------------------------
Net increase
(decrease)............. 311 $ 2,948 (7,701) $ (72,084) 2,213 $ 21,817
- ----------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting
from capital share
transactions........... (160,724) $(1,442,850) 944,975 $ 8,976,181 315,808 $2,976,533
- ----------------------------------------------------------------------------------------------
</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.
79
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (Unaudited) (continued)
Limited Duration Fund
<TABLE>
<CAPTION>
Six Months Ended Period Ended
March 31, 1999 September 30, 1998 (a)
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............... 2,187,449 $ 22,811,728 7,297,523 $ 76,033,178
Shares redeemed........... (1,733,846) (18,099,824) (3,832,975) (40,029,735)
Shares issued in
reinvestment of
distributions............ 130,275 1,355,467 157,603 1,644,655
Shares issued in
acquisition of CoreFund
Short Term Income Fund... 0 0 3,109,745 32,367,615
- ------------------------------------------------------------------------------
Net increase.............. 583,878 $ 6,067,371 6,731,896 $ 70,015,713
- ------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Period Ended
March 31, 1999 September 30, 1998 (b)
------------------- ------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class IS
Shares sold.................... 14,369 $ 149,022 4,835 $ 50,385
Shares redeemed................ (7,648) (79,213) (4) (38)
Shares issued in reinvestment
of distributions.............. 1,743 18,153 596 6,245
Shares issued in acquisition of
CoreFund Short Term Income
Fund.......................... 0 0 52,975 551,379
- -------------------------------------------------------------------------------
Net increase................... 8,464 $ 87,962 58,402 $ 607,971
- -------------------------------------------------------------------------------
Net increase in net assets
resulting from capital share
transactions.................. 592,342 $6,155,333 6,790,298 $ 70,623,684
- -------------------------------------------------------------------------------
</TABLE>
(a) For the period from November 24, 1997 (commencement of operations) to Sep-
tember 30, 1998.
(b) For the period from July 28, 1998 (commencement of class operations) to
September 30, 1998.
Total Return Bond Fund
<TABLE>
<CAPTION>
Six Months Ended Period Ended
March 31, 1999 September 30, 1998 (a)
------------------- -----------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold..................... 41,761 $4,103,879 1,346,358 $134,570,252
Shares redeemed................. (10,513) (1,018,914) (13,905) (1,381,981)
Shares issued in reinvestment of
distributions.................. 35,853 3,501,733 31,423 3,130,119
- -------------------------------------------------------------------------------
Net increase.................... 67,101 $6,586,698 1,363,876 $136,318,390
- -------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Period Ended
March 31, 1999 September 30, 1998 (b)
-------------------- -----------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class IS
Shares sold.................... 68,163 $ 6,687,432 689 $ 68,409
Shares redeemed................ (1,600) (158,280) (452) (44,669)
Shares issued in reinvestment
of distributions.............. 1,878 181,260 0 0
- ------------------------------------------------------------------------------
Net increase................... 68,441 $ 6,710,412 237 $ 23,740
- ------------------------------------------------------------------------------
Net increase in net assets
resulting from capital share
transactions.................. 135,542 $13,297,110 1,364,113 $136,342,130
- ------------------------------------------------------------------------------
</TABLE>
(a) For the period from April 20, 1998 (commencement of operations) to Septem-
ber 30, 1998.
(b) For the period from August 3, 1998 (commencement of class operations) to
September 30, 1998.
80
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (Unaudited) (continued)
9. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (excluding
short-term securities) were as follows for the six months ended March 31, 1999.
<TABLE>
<CAPTION>
Cost of Purchases Proceeds from Sales
------------------------- -------------------------
U.S. Non-U.S. U.S. Non-U.S.
Government Government Government Government
-------------------------------------------------
<S> <C> <C> <C> <C>
Adjustable Rate
Fund........... $ 9,844,305 $ 0 $ 8,696,969 $ 0
Core Bond Fund.. 233,292,907 41,529,706 191,214,832 50,817,354
Fixed Income
Fund........... 99,017,439 45,184,075 115,381,936 41,310,473
Income Plus
Fund........... 273,908,859 94,922,809 189,361,890 144,584,953
Intermediate
Bond Fund...... 0 379,373,012 0 383,581,327
International
Bond Fund...... 0 26,871,986 0 29,515,656
Limited Duration
Fund........... 18,808,935 26,393,826 29,752,589 8,138,747
Total Return
Bond Fund...... 75,558,944 58,250,842 60,030,129 50,980,037
</TABLE>
The average daily balance of reverse repurchase agreements outstanding for the
Adjustable Rate Fund during the six months ended March 31, 1999 was approxi-
mately $200,000 at a weighted average interest rate of 4.849%. The maximum
amount outstanding under reverse repurchase agreements during the six months
ended March 31, 1999 for Adjustable Rate Fund was $200,027 (including accrued
interest). There were no reverse repurchase agreements outstanding at March 31,
1999.
As of September 30, 1998, the following funds had capital loss carryovers for
federal income tax purposes as follows:
<TABLE>
<CAPTION>
Expiration
----------------------------------------------------------------
2000 2001 2002 2003 2004 2005 2006
----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Adjustable Rate Fund.... $198,000 $281,000 -- $ 43,000 -- -- $ 81,000
Fixed Income Fund....... -- -- $157,000 $1,229,000 -- -- --
International Bond
Fund................... -- -- $844,000 -- $729,000 $402,000 $923,000
</TABLE>
10. EXPENSE OFFSET ARRANGEMENTS
Each Fund, except Adjustable Rate Fund, has entered into expense offset ar-
rangements with ESC and their custodian 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 ex-
pense ratio represented as a percentage of its average net assets were as fol-
lows:
<TABLE>
<CAPTION>
Total
Fee Credits % of Average
Received Net Assets
-----------------------
<S> <C> <C>
Core Bond Fund............................. $18,469 0.01%
Fixed Income Fund.......................... 18,661 0.01%
Income Plus Fund........................... 37,723 0.00%
Intermediate Bond Fund..................... 23,739 0.01%
International Bond Fund.................... 5,356 0.01%
Limited Duration Fund...................... 2,238 0.01%
Total Return Bond Fund..................... 4,238 0.01%
</TABLE>
11. 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
81
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements(Unaudited) (continued)
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 installments 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.
12. 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 bear 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 serves as administrative agent for the Banks, and as administra-
tive agent is entitled to a fee of $20,000 per annum which is 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 provide an unsecured credit facility in the aggre-
gate amount of $150 million ($125 million committed and $25 million uncommit-
ted). The remaining terms and conditions of the agreement are unaffected.
During the six months ended March 31, 1999, the Funds had no significant
borrowings under these agreement.
13. 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.
82
<PAGE>
Evergreen Select Funds
Money Market
Money Market Fund
Treasury Money Market Fund
100% Treasury Money Market Fund
Municipal 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
Adjustable Rate Fund
Limited Duration Fund
Growth and Income/
Balanced
Equity Income Fund
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
67440 543697 05/99
BULK RATE
U.S. POSTAGE
PAID
PERMIT NO. 19
HUDSON, MA
[LOGO OF EVERGREEN FUNDS APPEARS HERE]
200 Berkeley Street
Boston, MA 02116
