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[GRAPHIC]
March 31, 2000
Evergreen Select
Fixed Income Funds
Semiannual Report
[LOGO OF EVERGREEN FUNDS] [GRAPHIC]
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Table of Contents
Letter to Shareholders ..................................................... 1
Evergreen Select Adjustable Rate Fund
Fund at a Glance ........................................................ 2
Portfolio Manager Commentary ............................................ 3
Evergreen Select Core Bond Fund
Fund at a Glance ........................................................ 5
Portfolio Manager Commentary ............................................ 6
Evergreen Select Fixed Income Fund
Fund at a Glance ........................................................ 9
Portfolio Manager Commentary ............................................ 10
Evergreen Select High Yield Bond Fund
Fund at a Glance ........................................................ 12
Portfolio Manager Commentary ............................................ 13
Evergreen Select Income Plus Fund
Fund at a Glance ........................................................ 15
Portfolio Manager Commentary ............................................ 16
Evergreen Select Intermediate Term Municipal Bond Fund
Fund at a Glance ........................................................ 18
Portfolio Manager Commentary ............................................ 19
Evergreen Select International Bond Fund
Fund at a Glance ........................................................ 21
Portfolio Manager Commentary ............................................ 22
Evergreen Select Limited Duration Fund
Fund at a Glance ........................................................ 24
Portfolio Manager Commentary ............................................ 25
Evergreen Select Total Return Bond Fund
Fund at a Glance ........................................................ 27
Portfolio Manager Commentary ............................................ 28
Financial Highlights
Evergreen Select Adjustable Rate Fund ................................... 30
Evergreen Select Core Bond Fund ......................................... 31
Evergreen Select Fixed Income Fund ...................................... 32
Evergreen Select High Yield Bond Fund ................................... 33
Evergreen Select Income Plus Fund ....................................... 34
Evergreen Select Intermediate Term
Municipal Bond Fund ................................................... 35
Evergreen Select International Bond Fund ................................ 36
Evergreen Select Limited Duration Fund .................................. 37
Evergreen Select Total Return Bond Fund ................................. 38
Schedule of Investments
Evergreen Select Adjustable Rate Fund ................................... 39
Evergreen Select Core Bond Fund ......................................... 40
Evergreen Select Fixed Income Fund ...................................... 44
Evergreen Select High Yield Bond Fund ................................... 48
Evergreen Select Income Plus Fund ....................................... 52
Evergreen Select Intermediate Term
Municipal Bond Fund ................................................... 57
Evergreen Select International Bond Fund ................................ 62
Evergreen Select Limited Duration Fund .................................. 64
Evergreen Select Total Return Bond Fund ................................. 67
Combined Notes to the Schedules of Investments ............................. 72
Statements of Assets and Liabilities ....................................... 73
Statements of Operations ................................................... 75
Statements of Changes in Net Assets ........................................ 77
Combined Notes to Financial Statements ..................................... 82
Evergreen Funds
Evergreen Funds is one of the nation's fastest growing investment companies with
approximately $80 billion in assets under management.
With over 80 mutual funds to choose among and acclaimed service and operations
capabilities, investors enjoy a broad range of quality investment products and
services designed to meet their needs.
The Evergreen Funds employ intensive, research-driven investment strategies
executed by over 90 research analysts and portfolio managers. The fund company
remains dedicated to meeting the needs of investors and their advisors in a
global economy. Look to Evergreen Funds to provide a distinctive level of
service and excellence in investment management.
This semiannual report must be preceded or accompanied by a prospectus of an
Evergreen fund contained herein. The prospectus contains more complete
information, including fees and expenses, and should be read carefully before
investing or sending money.
Mutual Funds: NOT FDIC INSURED MAY LOSE VALUE NOT BANK GUARANTEED
Evergreen Distributor, Inc.
Evergreen Funds(SM) is a service mark of Evergreen Investment Services, Inc.
<PAGE>
Letter to Shareholders
----------------------
May 2000
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, 2000.
U.S. Bond Markets Experience Volatility
[PHOTO]
William M. Ennis
[PHOTO]
Dennis H. Ferro
The bond market environment has suffered a great deal of volatility and
unpredictability for the past six-month period. The Federal Reserve Board
increased interest rates three times during the period as a response to a
potential inflationary environment. In addition, the Treasury's announcement of
a plan to curtail new and existing supplies of long-term government bonds led
investors to seek longer-term issues in anticipation of possible shortages.
These counteractive forces have caused the yield on the bellwether 30-year
Treasury bond to decrease 0.22%, while the ~10-Year Treasury yield increased
approximately 0.10% by the end of the period. These factors are indicative of an
abnormal investment environment where longer-term bonds paid lower rates than
short-term bonds, this is also known as an "inverted yield curve". Amidst this
volatile environment, we still believe that bonds are relatively attractive over
the long term.
We believe that sound investing is about taking steps to meet your long-term
financial needs and goals. We remind you to take advantage of your financial
advisor's expertise to develop and refine a financial plan that will enable you
to meet your objectives. Evergreen Funds offers a broad mix of stock, bond and
money market funds that could make it simple for you to choose the most
appropriate for your portfolio.
Website Enhancements
Please visit our enhanced website, evergreen-funds.com, for more information
about Evergreen Funds. The site offers an array of helpful information including
an investment education center, interactive calculators to assist your
investment planning and general information about Evergreen Funds.
Thank you for your continued investment in Evergreen Funds.
Sincerely,
/s/ William M. Ennis
William M. Ennis
President and CEO
Evergreen Investment Company, Inc.
/s/ Dennis H. Ferro
Dennis H. Ferro
Chief Investment Officer
First Union National Bank
Capital Management Group
1
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Fund at a Glance as of March 31, 2000
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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 by investing primarily in adjustable
rate securities, whose interest rates are periodically reset when market rates
change.
Process
Portfolio management emphasizes non-convertible, one-year CMT-indexed ARMS to
achieve coupon sensitivity to changing interest rates. A series of laddered
maturities helps to ensure a gradual response to changing interest rates.
Benchmark
6-Month Treasury Bill--the 6-month Treasury Bill Index is comprised of a single
issue purchased at the beginning of the month and held for a full month. At the
end of the month, that issue is sold and rolled into a newly selected issue. The
issue selected at each month-end rebalancing is the outstanding Treasury Bill
that matures closest to, but not beyond, six months from the rebalancing
date.
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PERFORMANCE AND RETURNS1
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Portfolio Inception Date: 10/1/1991 Class I Class IS
Class Inception Date 10/1/1991 5/23/1994
Average Annual Returns
6 months 2.67% 2.54%
1 year 5.20% 4.95%
5 years 6.23% 6.07%
Since Portfolio Inception 5.50% 5.34%
30-day SEC Yield 6.15% 5.88%
6-month income distributions per share $0.30 $0.28
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LONG TERM GROWTH
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[GRAPH]
Consumer Price Evergreen Select
Index - US 6 Month T-Bill Adj Rate I
10/1/91 1,000,000 1,000,000 1,000,000
3/31/92 1,013,828 1,019,998 1,026,871
3/31/93 1,045,124 1,057,289 1,083,347
3/31/94 1,071,325 1,091,815 1,125,101
3/31/95 1,101,892 1,146,399 1,165,316
3/31/96 1,133,188 1,213,658 1,245,932
3/31/97 1,164,483 1,278,711 1,332,273
3/31/98 1,180,495 1,348,234 1,427,707
3/31/99 1,200,873 1,416,888 1,498,199
3/31/00 1,238,168 1,488,007 1,576,169
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 (6 Mo.
T-Bill) and the Consumer Price Index (CPI).
The 6-Mo. T-Bill is an unmanaged market index and does not include transaction
costs associated with buying and selling securities nor any mutual fund
expenses. The CPI is a commonly used measure of inflation and does not represent
an investment return. It is not possible to invest directly in an index.
U.S. Government guarantees apply only to the underlying securities of the Fund's
portfolio and not to the Fund's shares.
All data is as of 3/31/2000 and subject to change.
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. Performance includes the reinvestment of income and capital gain
distributions.
Historical performance shown for Class IS shares prior to inception is based on
the performance of Class I shares and has not been adjusted to reflect the
effect of the 0.25% 12b-1 fee applicable to Class IS shares. Class I shares pay
no 12b-1 fees. If these fees had been reflected, returns would have been lower.
The advisor is waiving its advisory fee and reimbursing the Fund for other
expenses. Had the fee not been waived or the expenses reimbursed, the returns
would have been lower.
2
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EVERGREEN
Select Adjustable Rate Fund
Portfolio Manager Commentary
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Portfolio Management
--------------------------------------------------------------------------------
[PHOTO]
Gary Pzegeo
Tenure: October 1991
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Performance
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Evergreen Select Adjustable Rate Fund, Class I, produced a return of 2.67% for
the six-month period ended March 31, 2000, outperforming the 2.65% return of its
benchmark, the 6-month U.S. Treasury bill. The Fund's return also outpaced the
2.37% average return generated by the 24 adjustable rate mortgage funds followed
by Lipper, Inc., putting it in the top twenty-five percent of adjustable rate
mortgage funds. Lipper, Inc. is an independent monitor of mutual fund
performance.
Portfolio
Characteristics
---------------
(as of 3/31/2000)
Total Net Assets $50,996,008
Average Credit Quality AAA
Average Maturity 4.7 years
Average Duration 1.1 years
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Environment
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Ongoing concerns that excessive economic strength would ignite inflation kept
interest rates climbing over the past six months. Real GDP (gross domestic
product)--the value of the country's total output of goods and services adjusted
for inflation--rose an impressive 4.6% for all of 1999. In the fourth quarter of
1999, real GDP grew at an annualized rate of 7.3%. The growth, which
significantly outpaced the 10-year annualized average of 3.2%, combined with
signs of potential inflation, such as rising energy prices and a tight labor
market, prompted the Federal Reserve to raise short-term interest rates for the
fifth time since June 1999 to keep inflation in check.
The environment was positive for adjustable rate mortgage securities (ARMS).
Rising short-term interest rates pushed the coupons on ARMS higher. At the
beginning of the period, coupons reflecting the current market environment stood
at 6.25%. By the end of the period, they were 6.85%. ARMS also provided an
increasing yield advantage over U.S. Treasuries as the period progressed, with
U.S. Treasury yields falling in the first quarter of 2000.
3
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Portfolio Manager Commentary
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PORTFOLIO COMPOSITION
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(based on 3/31/2000 portfolio assets)
[GRAPH]
ARMS-- 58.3%
Repurchase Agreements-- 27.4%
Fixed Rate Mortgage-Backed Securities-- 10.3%
U.S. Treasury Obligations-- 3.2%
Collateralized Mortgage Obligations-- 0.8%
Strategy
Our strategy focused on building and protecting income. We took advantage of the
rising interest rate environment by increasing the Fund's position in ARMS to
80% of invested assets on March 31, 2000, up from 78% on September 30, 1999, and
decreasing holdings in fixed-rate mortgages to 19% from 21%, during the same
period. We also emphasized "hybrid" mortgages, whose coupons are fixed for three
or five years before they begin to change annually. These mortgages provide a
more predictable cash flow for a longer period of time and also enabled the Fund
to lower the average cost of its holdings. Further, hybrids became attractively
priced during the period, relative to other types of adjustable rate mortgages.
Outlook
Our outlook is positive for adjustable rate securities. We anticipate higher
short-term interest rates, a low level of prepayments and ample supply. With the
economy growing at such a fast clip, we think the Federal Reserve Board will
continue to raise short-term interest rates, and that inflation will remain well
under control. Rising interest rates should keep prepayments low. Prepayments
occur when mortgage-holders pay-off their mortgages prior to maturity.
Typically, this happens more often when interest rates fall because
mortgage-holders can refinance their mortgages at lower rates. Supply also
appears to be plentiful and growing. According to the Mortgage Bankers
Association, ARMS account for 25%-30% of all mortgage applications, including
both refinancings and new purchases. That number has risen from 10% in 1998 and
early 1999.
We think ARMS offer attractive relative value and believe they warrant a place
in a well-rounded investment portfolio. Their historically solid stream of
income and stability of principal enhance investor liquidity, and with their
positive outlook, ARMS can be a particularly welcome respite from the
fluctuations incurred in riskier financial markets.
4
<PAGE>
EVERGREEN
Select Core Bond Fund
Fund at a Glance as of March 31, 2000
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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 identifying opportunities to capture capital
gains. The portfolio maintains a bias toward corporate and mortgage securities
in order to capture higher levels of income.
Process
The portfolio managers seek to enhance performance, while pursuing a controlled
risk approach, by actively managing three specific characteristics within the
portfolio: duration, sector allocation, and security selection. The managers use
both quantitative tools and fundamental research in order to determine an
appropriate duration strategy as well as enhance the sector allocation and
security selection processes.
Benchmarks
Lehman Brothers Aggregate Bond Index--the LBABI is a fixed income index covering
the U.S. investment grade fixed-rate bond market, including U.S. Government and
U.S. Government agency securities, corporate securities, and asset-backed
securities.
Lehman Brothers Government/Corporate Bond Index--the LBGCBI is a fixed income
index that includes investment grade fixed-rate U.S. government, U.S. government
agency, and corporate securities.
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PERFORMANCE AND RETURNS1
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Portfolio Inception Date: 12/13/1990 Class I Class IS
Class Inception Date 12/13/1990 10/2/1997
Average Annual Returns
6 months 1.74% 1.61%
1 year 1.74% 1.44%
5 years 7.35% 7.24%
Since Portfolio Inception 7.20% 7.13%
30-day SEC Yield 6.66% 6.40%
6-month income distributions per share $0.32 $0.30
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LONG TERM GROWTH
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[GRAPH]
Lehman Brothers
Consumer Price Evergreen Select Government Corporate
Index - US LB Aggregate Core Bond I Bond Index
12/13/90 1,000,000 1,000,000 1,000,000 1,000,000
3/91 1,008,969 1,028,028 1,016,994 1,026,952
3/92 1,041,106 1,145,200 1,122,083 1,143,831
3/93 1,073,244 1,297,399 1,253,874 1,307,390
3/94 1,100,149 1,328,174 1,280,472 1,343,680
3/95 1,131,540 1,394,444 1,338,471 1,405,139
3/96 1,163,677 1,544,838 1,488,925 1,558,656
3/97 1,195,815 1,620,720 1,571,149 1,628,134
3/98 1,212,257 1,814,972 1,760,468 1,830,001
3/99 1,233,184 1,932,521 1,875,047 1,950,017
3/00 1,271,482 1,968,786 1,907,660 1,982,619
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), the Lehman Brothers Government/Corporate Bond Index (LBGCBI) and
the Consumer Price Index (CPI).
The LBABI and LBGCBI are unmanaged market indices and do not include transaction
costs associated with buying and selling securities nor any management fees. The
CPI is a commonly used measure of inflation and does not represent an investment
return. It is not possible to invest directly in an index.
U.S. Government guarantees apply only to the underlying securities of the Fund's
portfolio and not to the Fund's shares.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
Funds that invest in high yield, lower-rated bonds may contain more risks due to
the increased possibility of default.
All data is as of 3/31/2000 and subject to change.
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. Performance includes the reinvestment of income and capital gain
distributions.
Historical performance shown for class I shares is based on the performance of
the Class I shares of the Fund's predecessor fund, Tattersall Bond Fund.
Historical performance shown for Class IS shares is based on (1) the performance
of the Class IS shares of the Fund's predecessor fund, Tattersall Bond Fund,
since 10/02/97 and (2) the Class I shares of Tattersall Bond Fund from 12/13/90
to 10/02/97 which have not been adjusted to reflect the 0.25% 12b-1 fee paid by
Class IS shares. Class I shares do not pay a 12b-1 fee. If these fees had been
reflected, returns would have been lower. The advisor is waiving a portion of
its advisory fee. Had the fee not been waived, returns would have been
lower.
5
<PAGE>
EVERGREEN
Select Core Bond Fund
Portfolio Manager Commentary
--------------------------------------------------------------------------------
Portfolio Management
--------------------------------------------------------------------------------
[PHOTO]
Fred Tattersall
Team Leader
Tenure: June 1999
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Performance
--------------------------------------------------------------------------------
Evergreen Select Core Bond Fund's Class I shares returned 1.74% for the
six-month period ended March 31, 2000. The Fund's benchmarks, the Lehman
Brothers Aggregate Bond Index, returned 2.09 and the Lehman Brothers Government
Corporate Bond Index returned 2.27 for the same period. The Fund under-performed
the average return for Corporate Debt BBB-rated funds, which returned 1.88% for
the same period, as measured by Lipper, Inc., an independent monitor of mutual
fund performance.
Portfolio
Characteristics
---------------
(as of 3/31/2000)
Total Net Assets $1,143,733,888
Average Credit Quality AAA
Average Maturity 8.5 years
Average Duration 4.8 years
--------------------------------------------------------------------------------
Environment
--------------------------------------------------------------------------------
One of the most significant events of the past six months has been the reshaping
of the Treasury yield curve which began in late January when the Treasury
announced that it would curtail the issuance of new long-term debt and begin to
retire old debt through a buy-back program. That set the stage for a rally in
the Treasury market, confusion in the corporate and mortgage bond markets and
volatility in the stock markets. Up to that point, the stock market had been
focusing on the wonders of the "new era" economy and had dismissed inflation as
a concern of the past. It rallied powerfully during the last quarter of 1999.
Meanwhile, the bond market remained skeptical about inflation staying dormant
while the economy was in overdrive, and so did the Federal Reserve Board as the
Federal Funds rate was increased by 0.25% in November, February and again in
March. With upward pressure on short-term interest rates and with downward
pressure on long-term rates as investors scrambled for "scarce" bonds, the
Treasury curve inverted for the first time since 1990. Between the end of
September 1999 and the end of March 2000, the 3-month Treasury bill had risen
1.06%, while the 30-year Treasury bond fell nearly 0.25%.
The mortgage and corporate sectors finished 1999 in a technically strong
environment as volatility remained low, liquidity remained sufficient, and
demand exceeded supply. Most investors believed that out-performance of mortgage
and corporate bonds relative to Treasuries would be a recurrent theme in 2000
and that overweighted portfolio positions in these securities would be
appropriate. By February, this belief was called into question as the Treasury
yield curve inverted. The supply/demand dynamics changed
6
<PAGE>
EVERGREEN
Select Core Bond Fund
Portfolio Manager Commentary
completely as investors shunned long-term corporate bonds in favor of long-term
Treasury bonds. This caused two significant developments: long-term Treasury
yields were pushed artificially low in light of the economy that was still
booming and inflation that appeared to be rising; and yield spreads of mortgage
and corporate securities which remained basically unchanged as Treasury yields
dropped, became wide by historical standards.
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PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
Mortgage-Backed Securities-- 35.5%
Corporate Bonds-- 29.7%
Collateralized Mortgage Obligations-- 10.5%
Repurchase Agreements-- 9.5%
U.S. Treasury Obligations-- 7.8%
Mutual Fund Shares-- 4.5%
Asset-Backed Securities-- 2.5%
--------------------------------------------------------------------------------
Strategy
--------------------------------------------------------------------------------
This has been an extremely challenging market environment for bond investors. It
became apparent that the best duration strategy would be one in which the
duration of the portfolio would be close to that of the Lehman Brothers
Aggregate Bond Index. This meant we could concentrate our efforts on identifying
the opportunities among mortgage and corporate bonds. Through the last quarter
of 1999, we maintained an over-weighting in the mortgage sector, especially in
the less interest-sensitive mortgage securities since it was cheap to do so as
volatility had leveled off. We emphasized discount pass-throughs, FNMA bonds and
commercial mortgages. We found corporates to be attractive, as well, as the
huge, new-issue wave of corporates, which had rolled into the market during the
summer and had caused yield spreads to widen relative to Treasuries, had abated
by the fall leaving opportunities in "A"-rated debt. Our emphasis in both areas
of the markets proved successful for the last quarter of 1999 and continued
through the first month of the new year as pent-up demand resulting from the Y2K
concerns, caused buying interest in bonds of all types. Then confusion reigned
supreme as the Treasury yield curve inverted causing investors to lose their
natural benchmark for determining value in non-Treasury sectors. As long
Treasury yields fell, yields of mortgages and corporates stayed essentially the
same causing them to lag the performance of the Treasury market. Our
over-weighting in mortgage and corporate securities relative to the market
detracted marginally from the overall performance of the portfolio during the
first quarter of the year.
--------------------------------------------------------------------------------
Portfolio Quality
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
AAA--66.0%
AA--7.0%
A--15.0%
BBB--12.0%
7
<PAGE>
EVERGREEN
Select Core Bond Fund
Portfolio Manager Commentary
--------------------------------------------------------------------------------
Outlook
--------------------------------------------------------------------------------
Our conservative style of management in which we control risk and volatility,
and commit only to situations that are biased to outperform, should protect the
portfolio in uncertain times such as these. Actually, we are energized by the
uncertainty, which currently characterizes the mortgage and corporate security
markets, because we know that opportunities for out-performance arise out of
such confusion. We are especially excited about what we see in the corporate
market because we believe that the excess yield that corporates provide over
Treasuries is historically high and out of line with reality. We are
concentrating in liquid, high quality credits in the long end of the market
where corporate yields should snap back in line with Treasury yields, thus
providing the potential for out-performance. We are also emphasizing
discount-priced securities that should fare well in a falling interest rate
environment. Our mortgage holdings reflect a bias towards falling interest
rates, as well, with a concentration in prepayment-insensitive securities. We
have also recently been taking advantage of the confusion surrounding the
expected congressional study of Government Sponsored Enterprises (GSEs) by
buying conventional paper (FNMA, FHLMC) which has become cheap relative to
government-guaranteed GNMAs.
Our interest rate barometer is indicating that our portfolios be structured with
a slight bias for falling interest rates. Our sector work, however, is
indicating a tremendous opportunity in over-weighting the mortgage and corporate
sectors. We believe that incorporating our outlook for rates through careful
security selection within very cheap sectors should not only position the
portfolio for out-performance, but is consistent with our low risk/high reward
approach to managing the fund.
8
<PAGE>
EVERGREEN
Select Fixed Income Fund
Fund at a Glance as of March 31, 2000
--------------------------------------------------------------------------------
PORTFOLIO PROFILE
--------------------------------------------------------------------------------
Philosophy
The Evergreen Select Fixed Income Fund seeks to increase total return by
focusing on current income and identifying opportunities to capture capital
gains. The portfolio maintains a bias toward corporate and mortgage securities
in order to capture higher levels of income.
Process
The Fund's portfolio manager seeks to enhance performance, while controlling
risk, by actively managing three specific characteristics within the portfolio:
duration, sector allocation, and security selection. The manager utilizes both
quantitative tools and fundamental research in order 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--the LBIGCBI is a fixed
income index that includes investment grade fixed-rate U.S. government, U.S.
government agency, and corporate securities.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 3/31/1977 Class I Class IS
Class Inception Date 11/24/1997 3/9/1998
Average Annual Returns
6 months 2.17% 2.04%
1 year 2.78% 2.53%
5 years 6.17% 5.89%
10 years 6.93% 6.66%
30-day SEC Yield 7.00% 6.75%
6-month income distributions per share $0.19 $0.18
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
Evergreen Select
Lehman Brothers Consumer Price Fixed Income
Interm Govt/Corp Index - US Fund Class I
3/31/90 1,000,000 1,000,000 1,000,000
3/31/91 1,120,683 1,048,951 1,123,145
3/31/92 1,241,673 1,082,362 1,239,167
3/31/93 1,396,160 1,115,773 1,379,881
3/31/94 1,431,283 1,143,745 1,403,934
3/31/95 1,495,585 1,176,379 1,456,181
3/31/96 1,638,614 1,209,790 1,589,827
3/31/97 1,717,323 1,243,201 1,665,483
3/31/98 1,883,545 1,260,295 1,807,720
3/31/99 2,007,101 1,282,051 1,916,562
3/31/00 2,048,832 1,321,867 1,969,766
Comparison of a $1,000,000 investment in Evergreen Select Fixed Income Fund,
Class I shares1, versus a similar investment in the Lehman Brothers Intermediate
Government/Corporate Bond Index (LBIGCBI) and the Consumer Price Index (CPI).
The LBIGCBI is an unmanaged market index and does not include transaction costs
associated with buying and selling securities nor any mutual fund expenses. The
CPI is a commonly used measure of inflation and does not represent an investment
return. It is not possible to invest directly in an index.
U.S. Government guarantees apply only to the underlying securities of the Fund's
portfolio and not to the Fund's shares.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
Funds that invest in high yield, lower-rated bonds may contain more risks due to
the increased possibility of default.
All data is as of 3/31/2000 and subject to change.
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. Performance includes the reinvestment of income and capital gain
distributions.
Historical performance shown for Class IS shares from 11/24/97 to its inception
is based on the performance of Class I shares and has not been adjusted to
reflect the effect of the 0.25% 12b-1 fee applicable to Class IS shares. Class I
shares pay 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 shares are based
on the Fund's predecessor common trust fund's (CTF) performance, adjusted for
estimated mutual fund expenses. The CTF was not registered under the 1940 Act
and was not subject to certain investment restrictions. If the CTF had been
registered, its performance might have been adversely affected. The advisor is
waiving a portion of its advisory fee. Had the fee not been waived, returns
would have been lower.
9
<PAGE>
EVERGREEN
Select Fixed Income Fund
Portfolio Manager Commentary
--------------------------------------------------------------------------------
Portfolio Management Team
--------------------------------------------------------------------------------
[PHOTO] [PHOTO]
Rollin C. Williams, CFA L. Robert Cheshire
Tenure: November 1997 Tenure: November 1997
[PHOTO]
Thomas L. Ellis
Tenure: November 1997
--------------------------------------------------------------------------------
Performance
--------------------------------------------------------------------------------
For the six-month period ended March 31, 2000 the Evergreen Select Fixed Income
Fund Class I produced a total return of 2.17%, outpacing the 1.09% return of its
benchmark, the Lehman Brothers Intermediate Government/Corporate Bond Index.
Strong performance can be attributed to our timely duration and sector weighting
changes.
Portfolio
Characteristics
---------------
(as of 3/31/2000)
Total Net Assets $572,304,877
Average Credit Quality AA
Average Maturity 5.0 years
Average Duration 3.7 years
--------------------------------------------------------------------------------
Environment
--------------------------------------------------------------------------------
Bond yield volatility during this period was extreme. The ten-year Treasury
yield was approximately 5.90% at the end of September and peaked at 6.78% on
January 20th. Over the last two months the ten-year Treasury yield began to
recoil and ended the first quarter at approximately 6.00%. The most notable
event in the fixed income markets was the inversion of the Treasury yield curve
in January. The inverted yield curve was mainly brought about by a reduction in
the supply of long-term government debt securities. This shortage was caused by
three underlying factors: the Federal Reserve Board raising short-term interest
rates, the announcement of the government's Treasury bond buy-back program, and
a decline in the issuance of Treasury notes and bonds.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
U.S. Treasury Obligations-- 17.8%
Corporate Bonds-- 16.9%
Commercial Paper-- 15.2%
Collateralized Mortgage Obligations-- 14.0%
Mortgage-Backed Securities-- 11.9%
Asset-Backed Securities-- 7.1%
U.S. Government Agency Obligations-- 7.0%
Yankee Obligations-- 6.9%
Repurchase Agreements-- 3.2%
10
<PAGE>
EVERGREEN
Select Fixed Income Fund
Portfolio Manager Commentary
Strategy
Our changes in duration and sector weightings this period have significantly
enhanced the Fund's performance. We managed to display timely and effective
decision-making when shifting duration. During the last quarter of 1999 the Fund
held a neutral-to-short duration, which had a positive impact on performance,
then in the first quarter of 2000, as rates began to rise, we made a timely
decision to lengthen the Fund's duration. This change enabled the Fund to
capitalize on the fourth quarter's decreasing rates and first quarter's
increasing rates, maximizing the Funds overall performance and return. The
Fund's slightly under-weighted position in corporate and agency securities had a
net positive impact. Although an increased weight in mortgages had a negative
impact, that impact was muted by the "Mortgage dollar-roll" program, which
contributed incremental income and an increase in the Fund's overall return.
--------------------------------------------------------------------------------
PORTFOLIO QUALITY
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
AAA -- 58.7%
AA -- 5.3%
A -- 18.6%
BBB -- 17.4%
Outlook
We believe the Federal Reserve Board will continue to raise interest rates
several times until signs of slower economic growth emerge and fears of
increasing inflation diminish. Additionally, the Fund will delay extending
duration further unless we experience a period of weakness in the bond market.
With the current disruption in Treasury supply and the widening of the yield
spread between high and low-rated paper, the Fund intends to gradually increase
our allocation of mortgage and corporate debt securities. We do not believe that
the government will remove the implied backing from federal agencies, but do
anticipate that agency yield spread will remain wide in the short run.
11
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Fund at a Glance as of March 31, 2000
--------------------------------------------------------------------------------
PORTFOLIO PROFILE
--------------------------------------------------------------------------------
Philosophy
Evergreen Select High Yield Bond Fund seeks to provide investors with a high
level of total return while controlling risk. The Fund invests primarily in
high-yield, high-risk bonds, but will be managed with less emphasis on yield and
a greater emphasis on total return.
Process
The portfolio managers invest at least 65% of the Fund's total assets in bonds,
debentures, and other income obligations, which are rated by Standard & Poor's
Ratings Services or Moody's Investors Service, Inc. as below investment grade.
They intend to emphasize securities rated B- or higher by S&P or B3 or higher by
Moody's.
Benchmark
Merrill Lynch High Yield Master II Bond Index--the MLHYMIIBI provides a
broad-based performance measure of the non-investment grade U.S. domestic bond
market.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 11/30/1999 Class I Class IS
Class Inception Date 11/30/1999 11/30/1999
Cumulative Returns
Since Portfolio Inception -1.35% -1.45%
30-day SEC Yield 9.69% 9.74%
6-month income distributions per share $0.27 $0.26
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
ML High Consumer Price Evergreen Select
Yield Master Index - US High Yield Bond I
11/30/99 1,000,000 1,000,000 1,000,000
12/31/99 1,005,250 1,000,000 1,003,440
1/31/00 1,002,999 1,002,377 995,252
2/29/00 1,003,862 1,008,318 995,690
3/31/00 989,828 1,010,840 986,470
Comparison of a $1,000,000 investment in Evergreen Select High Yield Bond Fund,
Class I shares1, versus a similar investment in the Merrill Lynch High Yield
Master II Bond Index (MLHYMIIBI), and the Consumer Price Index (CPI).
The MLHYMIIBI is an unmanaged market index, which does not include transaction
costs associated with buying and selling securities nor any mutual fund
expenses. The CPI is a commonly used measure of inflation and does not represent
an investment return. It is not possible to invest directly in an index.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
Funds that invest in high yield, lower-rated bonds may contain more risks due to
the increased possibility of default.
All data is as of 3/31/2000 and subject to change.
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. Performance includes the reinvestment of income and capital gain
distributions.
The Fund incurs 12b-1 expenses of 0.25% for Class IS shares. Class I shares pay
no 12b-1 fees. The advisor is waiving a portion of its advisory fee. Had the fee
not been waived, returns would have been lower.
12
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO]
Richard Cryan
Tenure: November 1999
Performance
Evergreen Select High Yield Bond Fund's Class I shares returned -1.35% from
inception on November 30, 1999 through March 31, 2000. In comparison, the Fund's
benchmark, the Merrill Lynch High Yield Master II Bond Index returned -1.80% for
the same period. We attribute the negative absolute return to the unfavorable
investment conditions affecting the high yield bond market during the period. We
attribute the Fund's better relative performance primarily to security
selection. Holdings included some of the top-performing companies and were void
of companies that turned in the poorest relative performance. The Fund's
objective is to limit risk while taking advantage of the opportunities available
in higher-yielding, lower-quality bonds. In accordance with that objective, the
Fund invests only in the top two credit tiers of the high yield bond market,
securities that are rated "BB" and "B". The securities rated "BB" and "B" in the
Merrill Lynch High Yield Master II Bond Index returned -2.03% for the period.
Portfolio
Characteristics
---------------
(as of 3/31/2000)
Total Net Assets $53,979,392
Average Credit Quality B
Average Maturity 7.6 years
Average Duration 4.6 years
Environment
High yield bonds dramatically outperformed their higher-quality counterparts,
during much of 1999. That trend was reversed in the first quarter of 2000,
however, when heavy redemptions from mutual funds forced investors to sell bonds
to raise cash. Negative cash flows also caused buying power to evaporate. The
situation created extraordinary downward pressure on high yield bond prices,
with "B"-rated credits particularly hard-hit. We believe the substantial selling
of "B"-rated credits resulted from that tier tending to comprise a large portion
of the assets held--and consequently a large portion of the assets sold--by many
high yield bond funds. One positive result of the downdraft, in our opinion, was
that it began to set the stage for future gains. Many "B"-rated credits began to
offer extremely attractive yield advantages over "BB"-rated bonds, based on
historical standards. Historically, investors have been richly rewarded for
purchasing "B"-rated bonds when yield relationships have reached these levels.
In contrast, bonds rated "BB" benefited from a spillover of favorable supply and
demand factors in the U.S. Treasury market. A shrinking supply of
longer-maturity U.S. Treasuries, as well as increased demand from investors
seeking refuge from stock market volatility pushed longer-term Treasury prices
higher. While the prices of "BB"-rated bonds fell, they held their value
considerably better than "B"-rated securities.
13
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Portfolio Manager Commentary
The top-performing credit tier was "CCC", in which the Fund is prohibited to
invest. "CCC"-rated securities had dramatically under-performed other credit
tiers in 1999. Their past price decline pushed "CCC" yield advantages to levels
that were unusually high compared to higher credit tiers, and the ensuing
rebound in prices gave investors positive returns.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
Corporate Bonds -- 88.2%
Repurchase Agreements -- 6.8%
Yankee Obligations -- 5.0%
Strategy
Security selection was the key contributor to performance. We employed a "bottom
up" strategy, building the portfolio one bond at a time. We focused on "B"-rated
bonds, because of the economy's strength and that tier's increased potential for
total return. Lower-rated credits have tended to outperform their higher-rated
counterparts during periods of strong economic growth, as investors have been
more comfortable with credit risk in strong economies. On March 31, 2000, 36% of
the Fund's assets were invested in "BB"-rated securities and 60% were invested
in bonds rated "B". The Fund's average quality was "B" also as of that day.
We also emphasized energy and de-emphasized healthcare bonds. Energy bonds were
among the top performers last year, benefiting from the higher oil prices that
resulted from OPEC's productions cutback. In contrast, healthcare was one of the
worst performing industries because of lower government reimbursements to
healthcare companies.
--------------------------------------------------------------------------------
PORTFOLIO QUALITY
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
BBB -- 2.0%
BB -- 35.7%
B -- 59.5%
CCC -- 0.2%
Not Rated -- 2.6%
Outlook
We are cautious on high yield bonds for the next few months, but are more
optimistic longer term. Supply/demand dynamics--which are unfavorable now--are
likely to remain that way over the near-term. Supply is still plentiful, and we
expect high yield bond mutual funds to attract assets slowly, which will limit
demand. On the positive side, the economy remains strong and we see continued
positive trends in underlying credits. Further, with the back-up in prices, many
bonds are reaching levels that provide both attractive current yields and solid
potential for price appreciation. When the supply/demand imbalance works itself
out, we think many fundamentals are in place for attractive returns over the
longer term.
14
<PAGE>
EVERGREEN
Select Income Plus Fund
Fund at a Glance as of March 31, 2000
--------------------------------------------------------------------------------
PORTFOLIO PROFILE
--------------------------------------------------------------------------------
Philosophy
The Evergreen Select Income Plus Fund seeks to increase total return by pursuing
a high level of current income and a potential for capital appreciation. The
portfolio managers seek to achieve the Fund's objective by actively managing
portfolio duration for capital gain opportunities.
Process
The portfolio managers complement fundamental research with quantitative tools
which identify undervalued or over-looked fixed income securities with
potential for appreciation. In an effort to achieve a high level of current
income, the Fund emphasizes corporate and mortgage-backed securities.
Benchmark
Lehman Brothers Government/Corporate Bond Index--the LBGCBI is a fixed income
index that includes investment grade, fixed-rate U.S. government, U.S.
government agency, and corporate securities.
--------------------------------------------------------------------------------
Performance and Returns1
--------------------------------------------------------------------------------
Portfolio Inception Date: 8/31/1988 Class I Class IS
Class Inception Date 11/24/1997 3/2/1998
Average Annual Returns
6 months 1.92% 1.79%
1 year 1.10% 0.86%
5 years 6.41% 6.16%
10 years 7.24% 6.98%
30-day SEC Yield 7.15% 6.90%
6-month income distribution per share $0.19 $0.18
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
Lehman Brothers Consumer Price Evergreen Select
Govt/Corp Index - US Income Plus; I
3/31/90 1,000,000 1,000,000 1,000,000
3/31/91 1,124,899 1,048,951 1,118,801
3/31/92 1,252,926 1,082,362 1,239,452
3/31/93 1,432,085 1,115,773 1,396,713
3/31/94 1,471,836 1,143,745 1,426,334
3/31/95 1,539,157 1,176,379 1,480,538
3/31/96 1,707,316 1,209,790 1,634,903
3/31/97 1,783,420 1,243,201 1,705,916
3/31/98 2,004,542 1,260,295 1,900,007
3/31/99 2,136,004 1,282,051 2,003,280
3/31/00 2,171,716 1,321,867 2,025,803
Comparison of a $1,000,000 investment in Evergreen Select Income Plus, Class I
shares 1, versus a similar investment in the Lehman Brothers
Government/Corporate Bond Index (LBGCBI) and the Consumer Price Index (CPI).
The LBGCBI is an unmanaged market index and 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.
U.S. Government guarantees apply only to the underlying securities of the Fund's
portfolio and not to the Fund's shares.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
Funds that invest in high yield, lower-rated bonds may contain more risks due to
the increased possibility of default.
All data is as of 3/31/2000 and subject to change.
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. Performance includes the reinvestment of income and capital gain
distributions.
Historical performance shown for Class IS shares from 11/24/97 to its inception
is based on the performance of Class I shares and has not been adjusted to
reflect the effect of the 0.25% 12b-1 fee applicable to Class IS shares. Class I
shares pay 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 shares are based
on the Fund's predecessor common trust fund's (CTF) performance, adjusted for
estimated mutual fund expenses. The CTF was not registered under the 1940 Act
and were not subject to certain investment restrictions. If the CTF had been
registered, their performance might have been adversely affected. The advisor is
waiving a portion of its advisory fee. Had the fee not been waived, returns
would have been lower.
15
<PAGE>
EVERGREEN
Select Income Plus Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO]
J.P. Weaver, CFA
Tenure: November 1997
Performance
For the six-month period ended March 31, 2000 the Evergreen Select Income Plus
Fund Class I Shares returned 1.92%, compared to the 2.27% return of its
benchmark, the Lehman Brothers Government/Corporate Bond Index. For the fourth
quarter of 1999 the Fund beat 48% of its competitors, and for the first quarter
of 2000 the Fund's returns bested 87% of its peers in this universe. These good
relative returns, however, occurred during a period of generally poor absolute
performance for bonds.
Portfolio
Characteristics
---------------
(as of 3/31/2000)
Total Net Assets $1,690,570,970
Average Credit Quality AA
Average Maturity 9.3 years
Average Duration 5.3 years
Environment
As described above, bond market returns favored new Treasury securities during
the fourth quarter of 1999 and Treasury securities over spread securities in the
first quarter of 2000. This pattern of relative performance is explained by the
substantial rally in longer maturity Treasuries as the U.S. Treasury's debt
managers embarked on a program of debt retirement early in 2000. After a very
difficult year, corporate and mortgage-backed securities returned to favor as
their attractive valuations became more pronounced late in 1999. Adding to the
corporate and mortgage sectors woes so far in 2000 is a growing uncertainty over
how to value these securities based on declining supply in the market's
traditional benchmark, U.S. Treasuries. Additionally, the corporate and mortgage
sectors experienced an increase in fundamental risk as "old economy" stocks
(which constitute most of the bond market's major issuers) struggle, putting
pressure on company management to enhance shareholder value, often at the
detriment of bondholder protection.
--------------------------------------------------------------------------------
Portfolio Quality
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
AAA -- 37.9%
AA -- 7.5%
A -- 28.0%
BBB -- 19.6%
BB -- 7.0%
16
<PAGE>
EVERGREEN
Select Income Plus Fund
Portfolio Manager Commentary
Strategy
The reasons for the Fund outperforming its peers for the last six months can be
split into two components. In the later stages of 1999, the Fund's
over-weighting in non-treasury sectors benefited from the best quarter for these
sectors in 1999. Corporate bonds and mortgage securities did well, relative to
Treasury issues. With the start of 2000, superior sector and security selection
drove the Fund's outperformance. An over-weighting in the corporate sectors,
which performed best, and an avoidance of securities that experienced credit and
default problems--which is an increasing occurrence in the world of corporate
bonds--were the key positives. Detracting from performance was a slight
under-weight in long maturity Treasuries and an under-weighting in mortgage
pass-through securities.
--------------------------------------------------------------------------------
Portfolio COMPOSITION
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
Corporate Bonds -- 41.6%
U.S. Treasury Obligations -- 17.0%
Mortgage-Backed Securities -- 14.3%
Yankee Obligations -- 12.1%
U.S. Government & Agency Obligations -- 3.8%
Collateralized Mortgage Obligations -- 3.2%
Asset-Backed Securities -- 3.1%
Commercial Paper -- 2.5%
Repurchase Agreements -- 2.1%
Common Stocks -- 2.0%
Mutual Fund Shares -- 0.1%
Outlook
While we believe that interest rates will be less volatile in the coming six
months we remain concerned about the increase in spread volatility. Reduced
liquidity, a rising fear of shareholder enhancement moves, and an uncertain and
rapidly changing valuation paradigm will take some time to work through the
market. There are mixed implications for what influence the stock market will
have on the corporate and mortgage sectors, but this will be a crucial
determinant of bond market and bond sector returns going forward.
17
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Fund at a Glance as of March 31, 2000
--------------------------------------------------------------------------------
PORTFOLIO PROFILE
--------------------------------------------------------------------------------
Philosophy
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. The Fund is managed to provide
stable, non-taxable income flows at competitive rates by primarily investing in
tax-free bonds.
Process
The portfolio manager utilizes both quantitative tools and hands-on, fundamental
research to identify attractive tax-exempt investment opportunities. In order to
increase total return, the Fund may also lend portfolio securities and enter
into repurchase and reverse repurchase agreements.
Benchmark
Lehman Brothers Municipal Bond 7-Year Index--the LBMB7YI is a broad-market,
performance index for tax-exempt bonds with a remaining maturity of one to seven
years.
--------------------------------------------------------------------------------
Performance and Returns1
--------------------------------------------------------------------------------
Portfolio Inception Date: 1/31/1984 Class I Class IS
Class Inception Date 11/24/1997 3/2/1998
Average Annual Returns
6 months 0.37% 0.25%
1 year -2.91% 3.15%
5 years 4.39% 4.14%
10 years 5.47% 5.21%
30-day SEC Yield 5.19% 4.94%
Tax Equivalent Yield* 8.59% 8.18%
6-month income distributions per share $1.48 $1.40
* Assumes maximum 39.6% federal tax rate. Results for investors subject to lower
tax rates would not be as advantageous.
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
Consumer Price Lehman Brothers Evergreen Select
Index - US Munis 7-Yr Int. Muni; I Shares
3/31/90 1,000,000 1,000,000 1,000,000
3/31/91 1,048,951 1,094,883 1,077,968
3/31/92 1,082,362 1,193,250 1,160,000
3/31/93 1,115,773 1,331,442 1,274,854
3/31/94 1,143,745 1,371,167 1,320,241
3/31/95 1,176,379 1,458,174 1,381,452
3/31/96 1,209,790 1,575,757 1,473,702
3/31/97 1,243,201 1,648,546 1,531,837
3/31/98 1,260,295 1,797,192 1,686,731
3/31/99 1,282,051 1,903,594 1,768,256
3/31/00 1,321,867 1,915,416 1,716,628
Comparison of a $1,000,000 investment in Evergreen Select Intermediate Term
Municipal Bond Fund, Class I shares1, versus a similar investment in the Lehman
Brothers Municipal Bond 7-Year Index (LBMB7YI**) and the Consumer Price Index
(CPI).
The LBMB7YI is an unmanaged market index and does not include transaction costs
associated with buying and selling securities nor any mutual fund expenses. The
CPI is a commonly used measure of inflation and does not represent an investment
return. It is not possible to invest directly in an index.
**The Lehman Brothers Municipal Bond 7-Year Index inception date was 1/31/1990.
The Lehman Brothers Municipal Bond 10-Year Index was used for the period
8/31/1988--1/31/1990.
The Fund's yield will fluctuate, and there can be no guarantee that the Fund
will achieve its objective on any particular tax-exempt yield. Income may be
subject to the federal alternative minimum tax.
Funds that invest in high yield, lower-rated bonds may contain more risks due to
the increased possibility of default.
All data is as of 3/31/2000 and subject to change.
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. Performance includes the reinvestment of income and capital gain
distributions.
Historical performance shown for Class IS shares from 11/24/97 to its inception
is based on the performance of Class I shares and has not been adjusted to
reflect the effect of the 0.25% 12b-1 fee applicable to Class IS shares. Class I
shares pay 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 shares are based
on the Fund's predecessor common trust fund's (CTF) performance, adjusted for
estimated mutual fund expenses. The CTF was not registered under the 1940 Act
and was not subject to certain investment restrictions. If the CTF had been
registered, its performance might have been adversely affected. Past performance
is not indicative of future results. The advisor is waiving a portion of its
advisory fee. Had the fee not been waived, returns would have been
lower.
18
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO]
Richard K. Marrone
Tenure: November 1997
Performance
The Evergreen Select Intermediate Municipal Bond Fund Class I Shares posted a
0.37% return, for the six-month period ended March 31, 2000. This performance
trailed the 1.49% return of its benchmark, the Lehman Brothers Municipal Bond
7-year Index.
Portfolio
Characteristics
-----------------
(as of 3/31/2000)
Total Net Assets $653,830,646
Average Credit Quality AA
Average Maturity 8.6 years
Average Duration 6.1 years
Environment
Throughout this period we have seen an extremely difficult and volatile market.
During the fourth quarter of 1999 investors witnessed a rise in long-term
interest rates, whereas long-term interest rates have declined during the first
quarter of 2000. Municipal bonds outperformed most debt securities significantly
in the fourth quarter but have under-performed dramatically this year as the
Federal Reserve Board continued to raise short-term interest rates. Short-term
municipal bonds have underperformed long-term municipals this year on almost a
two-to-one basis. As a result of underperformance, municipal bonds are cheap
relative to treasury bonds. There is strong demand for any municipal bonds with
maturities between five and ten years and the yield curve remains steep out to
the fifteen-year range, though little value is gained beyond that.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
Housing -- 18.1%
Hospitals/Nursing Homes/Health Care -- 15.2%
General Obligations -- 9.7%
Airports -- 8.5%
Other Revenue Bonds -- 8.1%
Escrow -- 7.1%
Industrial Development -- 6.5%
Mutual Fund Shares -- 5.8%
Sales Tax -- 4.4%
Transportation -- 3.7%
Education -- 3.6%
Public Facilities -- 3.4%
Water & Sewer -- 3.2%
Utility -- 2.7%
19
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Portfolio Manager Commentary
Strategy
Last quarter, while short- and long-term interest rates were still rising, we
restructured the portfolio to align it with the new management approach of
net-asset-value stability while providing a competitive yield. As interest
rates increased throughout the fourth quarter of 1999, the price of bonds began
to decrease. While continuing to restructure the Fund, we have shortened the
duration of the Fund to lessen the variability of the net asset value. This
placed us in a competitive position with the Lehman Brothers Municipal Bond
7-year Index during the first quarter of 2000, trailing the index by 0.16%. Due
to decreasing rates in the first quarter of 2000, we were able to gain some
ground on the index. This enabled us to provide investors with some
net-asset-value stability and income. To achieve this we sold discount bonds and
low, book-yielding bonds. Conversely, we invested in premium bonds at higher
yields and limited duration.
--------------------------------------------------------------------------------
PORTFOLIO QUALITY
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
AAA -- 40.1%
AA -- 12.4%
A -- 18.2%
BBB -- 17.8%
Not Rated -- 11.5%
Outlook
Looking forward, we anticipate that short-term interest rates will continue to
trend up as the Federal Reserve Board continues to raise rates. This trend will
continue until the Federal Reserve begins to see economic activity slow to what
they feel is an acceptable pace. With this increase in rates, we believe the
shorter part of the municipal yield curve will rise. We do not believe that
there will be an inversion in the municipal yield curve in the short run. The
Fund will be positioned in the intermediate range of the municipal curve to
provide investors with greater value.
20
<PAGE>
EVERGREEN
Select International Bond Fund
Fund at a Glance as of March 31, 2000
--------------------------------------------------------------------------------
PORTFOLIO PROFILE
--------------------------------------------------------------------------------
Philosophy
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 complete the team's fundamental research. A
minimum of 80% of the portfolio is invested in investment grade securities of 19
of the world's top economies*. Up to 20% can be invested in below investment
grade bonds from those 19 countries, or in emerging market bonds. The team
actively uses currency hedging for more efficient risk control.
Benchmark
J.P. Morgan Global Government Index excluding U.S.--the JPMG6XUS is the most
widely used benchmark for measuring performance and quantifying risk across
international fixed income bond markets.
--------------------------------------------------------------------------------
Performance and Returns1
--------------------------------------------------------------------------------
Portfolio Inception Date: 12/15/1993 Class I Class IS
Class Inception Date 12/15/1993 12/15/1993
Average Annual Returns
6 months -4.54% -4.62%
1 year -2.69% -2.84%
5 years 5.14% 4.90%
Since Portfolio Inception 3.34% 3.11%
30-day SEC Yield 5.04% 4.78%
6-month income distributions per share $0.28 $0.27
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
JPM Global Consumer Price Evergreen Select
Govt ex US Index - US Interntl Bond I
12/15/93 1,000,000 1,000,000 1,000,000
3/31/94 963,792 1,009,602 945,949
9/30/94 934,700 1,024,691 903,889
3/31/95 991,963 1,038,409 957,137
9/30/95 1,083,354 1,050,754 1,017,089
3/31/96 1,139,440 1,067,901 1,073,400
9/30/96 1,220,565 1,082,305 1,105,106
3/31/97 1,285,276 1,097,394 1,133,200
9/30/97 1,389,593 1,105,624 1,165,549
3/31/98 1,471,704 1,112,483 1,190,599
9/30/98 1,586,627 1,122,085 1,239,084
3/31/99 1,649,424 1,131,687 1,263,726
9/30/99 1,642,646 1,151,578 1,288,238
3/31/00 1,659,233 1,166,833 1,229,791
Comparison of a $1,000,000 investment in Evergreen Select International Bond,
Class I shares 1, versus a similar investment in the J.P. Morgan Global
Government Index excluding U.S. (JPMGXUS) and the Consumer Price Index (CPI).
The JPMG6XUS is an unmanaged market index and does not include transaction costs
associated with buying and selling securities nor any mutual fund expenses. The
index measures the total, principal, and interest returns in each market. The
CPI is a commonly used measure of inflation and does not represent an investment
return. It is not possible to invest directly in an index.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations. Risks of international investing are magnified in
emerging or developing markets.
Funds that invest in high yield, lower-rated bonds may contain more risks due to
the increased possibility of default.
All data is as of 3/31/2000 and subject to change.
1 Past performance is no guarantee of future results. 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. The performance of each class
may vary based on differences in fees paid by the shareholders investing in each
class. Performance includes the reinvestment of income and capital gain
distributions.
Historical performance shown for Class I shares prior to its inception is based
on the performance of the Class Y shares of the Fund's predecessor fund, Core
Fund Global Bond Fund. Historical performance shown for Class IS shares prior to
inception is based on the performance of the Class A shares of the Fund's
predecessor fund and reflects the same 0.25% 12b-1 fee applicable to Class IS
shares. Class I shares pay no 12b-1 fee. The advisor is waiving a portion of its
advisory fee. Had the fee not been waived, returns would have been
lower.
*Australia, Austria, Belgium, Canada, Denmark, Finland, France, Sweden,
Switzerland, United Kingdom, Germany, Ireland, Italy, Japan, Netherlands, New
Zealand, Norway, Portugal and Spain.
21
<PAGE>
EVERGREEN
Select International Bond Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO]
George McNeill
Tenure: December 1993
Performance
Evergreen Select International Bond Fund's Class I shares produced a return of
-4.54% for the six-month period ended March 31, 2000. The Fund under-performed
its benchmark, the J.P. Morgan Global Government (excluding U.S.) Index, which
returned ~-3.17% for the same period.
Portfolio
Characteristics
---------------
(as of 3/31/2000)
Total Net Assets $53,394,258
Average Credit Quality AA
Average Maturity 9.2 years
Average Duration 6.6 years
Environment
Central bankers pushed global interest rates higher and bond prices lower over
the past six months, reflecting ongoing strength in many of the world's
economies. With inflation remaining subdued, "real" interest rates--the
inflation-adjusted rate of return--reached the historically attractive levels of
5% in Europe and 4% in other parts of the world. A shrinking supply of long
government bonds in the United States and United Kingdom helped support the
price of longer maturities in both countries, causing the yield curves to invert
between 10 and 30 years. Supply remained heavy in Japan, however; and with the
need for an accommodative monetary policy to stimulate the economy, Japanese
interest rates were low relative to other international levels that existed
during the period. The global currency market fluctuated, but the U.S. dollar
was strong on the country's interest rate outlook and equity performance. Slower
relative growth in Europe caused weakness in the euro; and while Japan's fiscal
year-end of March 31 caused a powerful rally in the yen over the last two weeks
of the Fund's fiscal period, the currency lost over one-third of those gains in
the beginning of April 2000.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
Foreign Bonds-- 81.0%
Corporate Bonds-- 11.4%
Yankee Obligations-- 7.6%
22
<PAGE>
EVERGREEN
Select International Bond Fund
Portfolio Manager Commentary
Strategy
Our strategies involved actively managing the Fund's asset distributions and
currency allocations, adjusting average maturity, and maintaining an emphasis on
quality. We emphasized U.S. dollar economies and Europe to take advantage of
both the dollar's strength and the attractive real rates of return available in
Europe. We weighted assets in countries whose bonds offered the most attractive
relative value, particularly Germany, which represented approximately 24% of
assets at the end of the fiscal period. As of March 31, over 80% of the Fund was
invested in U.S. dollar economies and in Europe. During the period, we adjusted
the Fund's average maturity, lengthening it over the last two months. The longer
average maturity enabled the Fund to take advantage of the extra value provided
in the longer end of the yield curve, increasing total return potential and
boosting yield. The Fund also maintained its emphasis on quality. Lower-rated
credits provided limited yield advantages over their higher-rated counterparts.
Further, we think lower-rated credits could be more sensitive to the negative
effects of higher interest rates, causing their yield advantages to increase. As
of March 31, 2000, just under 50% of assets were invested in government
securities and nearly 90% of assets were rated "AAA" or "AA" by both Moody's and
Standard and Poor's. Also as of that day, the Fund's average quality stood ~at
"AA".
--------------------------------------------------------------------------------
Portfolio QUALITY
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
AAA -- 58.2%
AA -- 30.3%
A -- 4.6%
BBB -- 5.2%
BB -- 1.3%
B -- 0.4%
Outlook
We are cautiously optimistic about international bonds. While it is too early to
say the cycle of higher interest rates is over, we think a turning point may be
in the foreseeable future. In the short-term, we believe recent trends could
continue and that would favor U.S. dollar and Sterling-denominated assets.
However, our outlook for the euro is bright. In our opinion, the currency is
cheap and poised for a rally. We believe the euro's recent weakness has made
European goods attractively priced in the world's markets. This should generate
trade for Europe, stimulate economic growth and attract investment flows. We
intend to stay underweighted in the yen. Japan's economy has begun to exhibit
signs of growth; however, government bond issuance is still expected to be
heavy, which could put upward pressure on rates and downward pressure on prices.
Additionally, Japan's interest rates are low relative to other international
rates. In our opinion, Japanese rates will need to increase to attract
investment flows.
23
<PAGE>
EVERGREEN
Select Limited Duration Fund
Fund at a Glance as of March 31, 2000
--------------------------------------------------------------------------------
PORTFOLIO PROFILE
--------------------------------------------------------------------------------
Philosophy
Evergreen Select Limited Duration Fund seeks higher yields consistent with
preservation of capital and low principal fluctuation. By emphasizing the use of
high quality corporate, mortgage and asset-backed securities maturing in less
than five years, the Fund seeks to provide investors a high level of current
income while reducing price volatility.
Process
The Fund's portfolio manager seeks to enhance performance, while reducing
principal fluctuation, by actively managing three specific characteristics
within the portfolio: maturity structure, sector allocation and security
selection. In addition, quantitative tools are utilized to analyze interest rate
movement and to determine an appropriate duration strategy.
Benchmark
Merrill Lynch 1-3 Year Treasury Bond Index--the ML1-3YTBI is a subset of the ML
Treasury Master Index measuring the performance of Treasury securities with a
maturity range of one to three years.
--------------------------------------------------------------------------------
Performance and Returns1
--------------------------------------------------------------------------------
Portfolio Inception Date: 4/30/1994 Class I Class IS
Class Inception Date 11/24/1997 7/28/1998
Average Annual Returns
6 months 2.07% 1.94%
1 year 3.60% 3.35%
5 years 5.74% 5.51%
Since Portfolio Inception 5.58% 5.34%
30-day SEC Yield 7.64% 7.39%
12-month income dividends per share $0.32 $0.31
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
Consumer Price ML 1-3YR Evergreen Select
Index - US Treasury Limited Duration; I
4/30/94 1,000,000 1,000,000 1,000,000
3/31/95 1,027,137 1,048,384 1,045,853
9/30/95 1,039,349 1,098,248 1,093,194
3/31/96 1,056,309 1,129,647 1,123,948
9/30/96 1,070,556 1,159,901 1,154,656
3/31/97 1,085,482 1,189,760 1,184,123
9/30/97 1,093,623 1,239,815 1,233,955
3/31/98 1,100,407 1,279,136 1,269,479
9/30/98 1,109,905 1,338,671 1,323,314
3/31/99 1,119,403 1,356,908 1,343,633
9/30/99 1,139,077 1,381,856 1,363,916
3/31/00 1,154,168 1,407,548 1,392,337
Comparison of a $1,000,000 investment in Evergreen Select Limited Duration Fund,
Class I shares 1, versus a similar investment in the Merrill Lynch 1-3 Year
Treasury Bond Index (ML1-3YTBI) and the Consumer Price Index (CPI).
The ML1-3YTBI is an unmanaged market index and does not include transaction
costs associated with buying and selling securities nor any mutual fund
expenses. The CPI is a commonly used measure of inflation and does not represent
an investment return. It is not possible to invest directly in an index.
U.S. Government guarantees apply only to the underlying securities of the Fund's
portfolio and not to the Fund's shares.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
All data is as of 3/31/2000 and subject to change.
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. Performance includes the reinvestment of income and capital gain
distributions.
Historical performance shown for Class IS shares from 11/24/97 to inception is
based on the performance of Class I shares and has not been adjusted to reflect
the effect of the 0.25% 12b-1 fee applicable to Class IS shares. Class I shares
pay no 12b-1 fee. If these fees had been reflected, returns would have been
lower. Prior to 11/24/97, the returns for Class I and IS shares are based on the
Fund's predecessor common trust fund's (CTF) performance, adjusted for estimated
mutual fund expenses. The CTF was not registered under the 1940 Act and was not
subject to certain investment restrictions. If the CTF had been registered, its
performance might have been adversely affected. The advisor is waiving a portion
of its advisory fee. Had the fee not been waived, returns would have been lower.
24
<PAGE>
EVERGREEN
Select Limited Duration Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO] [PHOTO]
Sam Paddison David Fowley
Tenure: November 1997 Tenure: November 1997
Performance
For the six-month period ended March 31, 2000 the Evergreen Select Limited
Duration Bond Fund Class I shares produced a return of 2.07% and outperformed
the Merrill Lynch 1-3 Treasury Index, the Fund's benchmark, by 0.22%.
Additionally, the Fund was ranked 17th out of 78 funds in the Lipper Short U.S.
Government Funds universe, beating 78% of its competitors. The Fund
under-performed the average return for Corporate Debt BBB-rated funds, which
returned 1.88% for the same period, as measured by Lipper, Inc., an independent
monitor of mutual fund performance. The Fund maintained a defensive position for
the entire period compared to its index, which improved the Fund's relative
performance.
Portfolio
Characteristics
---------------
(as of 3/31/2000)
Total Net Assets $299,671,036
Average Credit Quality AA
Average Maturity 1.8 years
Average Duration 1.5 years
Environment
The Federal Reserve Board raised its target rate by 0.25% three times during the
period, leaving the Federal Funds interest rate at 6.00%. Further Federal
Reserve rate hikes are expected throughout the year, as they attempt to keep
inflation at bay. Bond yield volatility continued again this period, aided by a
rally in the price of the 30-year Treasury bond. The rally was caused in part by
the government's increasing U.S. Treasury bond buybacks and diminishing new
issuance that is drying up the supply of long-term U.S. Government debt
securities.
--------------------------------------------------------------------------------
Portfolio Composition
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
Corporate Bonds -- 50.4%
Mortgage-Backed Securities -- 28.3%
Asset-Backed Securities -- 13.9%
Commercial Paper -- 3.8%
Yankee Obligations -- 2.7%
Repurchase Agreements -- 0.9%
25
<PAGE>
EVERGREEN
Select Limited Duration Fund
Portfolio Manager Commentary
Strategy
We continued to receive a bearish signal from our technical model and will
maintain our defensive posture by keeping the portfolio's duration between
90-95% of the Merrill 1-3 Treasury Index. The only change made to our sector
exposure was moving from short-term commercial paper into longer-term U.S.
Government agencies in order to maintain our duration target and to take
advantage of the yield differences between U.S. Treasuries and agencies. We feel
that debt securities with 2-year maturities still offer good relative value as
real returns remain high.
--------------------------------------------------------------------------------
Portfolio Quality
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
AAA -- 35.5%
AA -- 9.4%
A -- 13.5%
BBB -- 30.2%
BB -- 11.4%
Outlook
We believe the Federal Reserve Board will continue to raise interest rates for
the remainder of the year until it feels it has addressed the threat of
inflation. Additionally, we will continue to take advantage of the historically
large yield differences between long- and short-term Treasury and non-Treasury
securities.
26
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Fund at a Glance as of March 31, 2000
--------------------------------------------------------------------------------
PORTFOLIO PROFILE
--------------------------------------------------------------------------------
Philosophy
The Evergreen Select Total Return Bond Fund uses a core-plus, fixed income
approach which seeks to enhance returns by opportunistically investing up to 35%
of the portfolio in the high yield and international fixed income markets.
Process
The managers maintain a focus on sector allocation, credit analysis and security
selection as opposed to interest rate anticipation. Asset allocation among the
three portfolio components--domestic high grade, domestic high yield and
international--is aided by quantitative models, and determined through dynamic
discussions between the three portfolio managers that revolve around several
factors, including underlying market fundamentals.
Benchmark
Lehman Brothers Aggregate Bond Index--The LBABI is a fixed income index
covering the U.S. investment grade fixed-rate bond market, including U.S.
Government and U.S. Government agency securities, corporate securities, and
asset-backed securities.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 4/20/1998 Class I Class IS
Class Inception Date 4/20/1998 8/3/1998
Average Annual Returns
6 months 0.55% 0.42%
1 year 0.08% -0.17%
Since Portfolio Inception 1.28% 1.07%
30-day SEC Yield 6.98% 6.73%
6-month income distributions per share $2.97 $2.86
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
Lehman Brothers Consumer Price Evergreen Select
Aggregate Index - US Total Return I
4/20/98 1,000,000 1,000,000 1,000,000
6/30/98 1,018,073 1,003,077 1,013,866
9/30/98 1,061,102 1,006,769 1,028,447
12/31/98 1,064,677 1,008,615 1,031,404
3/31/99 1,059,264 1,015,385 1,024,303
6/30/99 1,049,932 1,022,769 1,013,196
9/30/99 1,057,120 1,033,231 1,019,598
12/31/99 1,055,833 1,035,692 1,015,116
3/31/00 1,079,142 1,046,919 1,025,069
Comparison of a $1,000,000 investment in Evergreen Select Total Return 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 is an unmanaged market index that does not include transaction costs
associated with buying and selling securities nor any mutual fund expenses. The
CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
U.S. Government guarantees apply only to the underlying securities of the Fund's
portfolio and not to the Fund's shares.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
Funds that invest in high yield, lower-rated bonds may contain more risks due to
the increased possibility of default.
All data is as of 3/31/2000 and subject to change.
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 Performance includes the reinvestment of income and capital gain
distributions.
Historical performance shown for Class IS shares prior to inception is based on
the performance of Class I shares and has not been adjusted to reflect the
effect of the 0.25% 12b-1 fee applicable to Class IS shares. Class I shares pay
no 12b-1 fees. If these fees had been reflected, returns would have been lower.
The advisor is waiving a portion of its advisory fee. Had the fee not been
waived, returns would have been lower.
27
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Portfolio Manager Commentary
Portfolio Management Team
[PHOTO] [PHOTO]
Rollin C. Williams, CFA Richard M. Cryan
Tenure: April 1998 Tenure: April 1998
[PHOTO]
Anthony Norris
Tenure: April 1998
Performance
The Evergreen Select Total Return Bond Fund Class I shares produced a return of
0.55% for the six-month period ended March 31, 2000. The Fund under-performed
the average return for Corporate Debt BBB-rated funds, which returned 1.88% for
the same period, as measured by Lipper, Inc., an independent monitor of mutual
fund performance.
Portfolio
Characteristics
---------------
(as of 3/31/2000)
Total Net Assets $145,849,534
Average Credit Quality AA
Effective Maturity 8.9 years
Average Duration 5.4 years
Environment
The encouraging news for fixed income investors in the first quarter of 2000 was
that the bond market produced positive returns. Merrill Lynch's U.S. Bond Index
generated a return of 2.33% versus a -0.58% return for the same period last year
and the greatest total return since the third quarter of 1998. The turnaround
comes as somewhat of a surprise considering that the Federal Reserve Board
remains in its tightening mode due to strong domestic growth. In addition, the
rapid rise in oil prices, topping $30 per barrel for the first time since 1990,
has proven to be only an inflation scare and has not led to overall inflation, a
bond investor's nemesis.
One of the biggest surprises this year has been the rebound in long bond rates
and the inversion of the yield curve. From December 31 to March 31 the long bond
decreased from 6.48% to 5.84% while the two-year Treasury increased from 6.26%
to 6.48%. Part of the rebound in long rates was the result of earlier Federal
Reserve Board announcements that budget surpluses would allow for reductions in
government debt, which convinced market participants that the supply of Treasury
bonds would diminish over the next few years. Already, the Federal Reserve has
cut back the issuance of 30-year bonds from 4 times per year to twice per year.
While government bonds have proven to be a profitable investment so far, albeit
small, corporate bond returns continue to disappoint investors. In general,
corporate returns continue to detract from overall portfolio performance with
the only return coming from its coupon. Overall, the yield difference between
corporate bonds and Treasuries has widened by 0.35% to 0.40% during the quarter.
28
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Portfolio Manager Commentary
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
U.S. Treasury Obligations -- 26.7%
Corporate Bonds -- 26.2%
Mortgage-Backed Securities -- 25.3%
Foreign Bonds -- 15.7%
Yankee Obligations -- 4.3%
Repurchase Agreements -- 1.4%
Commercial Paper -- 0.4%
Strategy
During the fourth quarter 1999 the Fund offset some negative factors by
increasing exposure in mortgage-backed securities, from approximately 18.4% to
23.7%. This increasingly strong weighting had a positive impact on performance
as mortgages emerged as the best performing sector during the quarter and entire
year. Additionally, the Fund's duration was shortened from 5.45 years to 5.4
years during the same period. This shorter duration stance positively impacted
performance within a rising interest rate environment.
For the first quarter of 2000, the Fund gained ground within the largest segment
of the Fund, the Enhanced Index. The Enhanced team lengthened the duration to
107.5% of the index early in the quarter. 30-year Treasury yields were roughly
6.63% at the beginning of the period, while at the end of the quarter the yield
was 5.84%. In addition to duration adjustment, the Fund has taken a closer look
at the corporate positions within the Fund. A number of corporate realignments
were implemented to increase issuer exposure.
International strategy involved actively managing asset-distributions and
currency allocation, adjusting average maturity, and maintaining an emphasis on
credit quality. The international management team emphasized U.S. dollar
economies and Europe to take advantage of both the dollar's strength and the
attractive real rates of return available in Europe. Additionally, the team
weighted assets in countries whose bonds offered the most attractive relative
value.
--------------------------------------------------------------------------------
PORTFOLIO QUALITY
--------------------------------------------------------------------------------
(based on 3/31/2000 portfolio assets)
[GRAPH]
AAA -- 60.5%
AA -- 9.0%
A -- 8.3%
BBB -- 5.6%
BB -- 6.3%
B -- 10.0%
Not Rated -- 0.3%
Outlook
Despite five Federal Fund rate increases (totaling 1.25%) over the last ten
months, the economy has continued to grow at a rate above the Federal Reserve's
Gross Domestic Product (GDP) target, 3.0%-3.5%. As a result, we are
anticipating further rate increases until this level of GDP is achieved. We are
less certain about the future shape of the yield curve. To some extent, the
inverted yield curve indicates that the market is ahead of itself. The last
inversion occurred in 1990 when the Federal Reserve tightened 3% and inflation
reached 6%. Both situations are, at best, a distant site at this juncture.
However, until the economic outlook becomes a little clearer and perhaps the
market establishes a new benchmark for 30-year Treasury yields, we believe the
yield curve's inversion may remain. As long as the Federal Reserve remains in
its tightening mode, we expect market participants to push rates lower.
Internationally, we are cautiously optimistic about bonds. While it is too early
to say if the cycle of higher interest rates is over, we think that a turning
point may be in the foreseeable future. We believe the outlook for the Euro is
bright. In our opinion, the currency is cheap and poised for a rally.
29
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended September 30, Year Ended February 28, Year Ended September 30,
March 31, 2000 ---------------------------- -------------------------- --------------------------
(Unaudited) 1999 1998 (a) 1998 1997 (b) 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS I
Net asset value,
beginning of period $ 9.56 $ 9.68 $ 9.75 $ 9.71 $ 9.68 $ 9.65 $ 9.61
------- ------------ ------------ ----------- ----------- ------------ ------------
Income from investment
operations
Net investment income 0.30 0.59 0.35 0.64 0.28 0.64# 0.63
Net realized and
unrealized gains or
losses on securities (0.04) (0.12) (0.07) 0.04 0 0 0.01
------- ------------ ------------ ----------- ----------- ------------ ------------
Total from investment
operations 0.26 0.47 0.28 0.68 0.28 0.64 0.64
------- ------------ ------------ ----------- ----------- ------------ ------------
Distributions to
shareholders from
Net investment income (0.30) (0.59) (0.35) (0.64) (0.25) (0.61) (0.60)
------- ------------ ------------ ----------- ----------- ------------ ------------
Net asset value, end of
period $ 9.52 $ 9.56 $ 9.68 $ 9.75 $ 9.71 $ 9.68 $ 9.65
------- ------------ ------------ ----------- ----------- ------------ ------------
Total return 2.67% 4.98% 2.88% 7.15% 2.97% 6.86% 6.87%
Ratios and supplemental
data
Net assets, end of
period (thousands) $27,426 $ 36,033 $ 23,174 $ 25,981 $ 70,264 $ 65,974 $ 23,616
Ratios to average net
assets
Expenses++ 0.34%+ 0.30% 0.33%+ 0.30% 0.30%+ 0.30% 0.30%
Net investment income 6.27%+ 6.11% 6.12%+ 6.63% 6.79%+ 6.84% 6.61%
Portfolio turnover rate 33% 14% 46% 107% 44% 85% 56%
<CAPTION>
Six Months Ended Year Ended September 30, Year Ended February 28, Year Ended September 30,
March 31, 2000 ---------------------------- -------------------------- --------------------------
(Unaudited) 1999 1998 (a) 1998 1997 (b) 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS IS
Net asset value,
beginning of period $ 9.56 $ 9.68 $ 9.76 $ 9.72 $ 9.68 $ 9.65 $ 9.61
------- ------------ ------------ ----------- ----------- ------------ ------------
Income from investment
operations
Net investment income 0.28 0.55 0.33 0.59 0.28 0.65# 0.64
Net realized and
unrealized gains or
losses on securities (0.04) (0.11) (0.08) 0.06 0(*) (0.03) (0.02)
------- ------------ ------------ ----------- ----------- ------------ ------------
Total from investment
operations 0.24 0.44 0.25 0.65 0.28 0.62 0.62
------- ------------ ------------ ----------- ----------- ------------ ------------
Distributions to
shareholders from
Net investment income (0.28) (0.56) (0.33) (0.61) (0.24) (0.59) (0.58)
------- ------------ ------------ ----------- ----------- ------------ ------------
Net asset value, end of
period $ 9.52 $ 9.56 $ 9.68 $ 9.76 $ 9.72 $ 9.68 $ 9.65
------- ------------ ------------ ----------- ----------- ------------ ------------
Total return 2.54% 4.73% 2.63% 6.89% 2.97% 6.60% 6.60%
Ratios and supplemental
data
Net assets, end of
period (thousands) $23,570 $ 20,199 $ 9,645 $ 10,320 $ 3,564 $ 14,361 $ 2,871
Ratios to average net
assets
Expenses++ 0.58%+ 0.55% 0.57%+ 0.55% 0.55%+ 0.55% 0.55%
Net investment income 5.94%+ 5.86% 5.82%+ 6.15% 6.39%+ 6.64% 6.70%
Portfolio turnover rate 33% 14% 46% 107% 44% 85% 56%
(a) For the seven months ended September 30, 1998. The Fund changed its fiscal
year end from the last day of February to September 30, effective
September 30, 1998.
(b) For the five months ended February 28, 1997. The Fund changed its fiscal
year end from September 30 to the last day of February, effective
February 28, 1997.
# Net investment income is based on weighted average shares outstanding
throughout the period.
+ Annualized.
++ Ratio of expenses to average net assets excludes expense reductions, but in-
cludes fee waivers.
(*) Amount represents less than $0.01 per share.
</TABLE>
See Combined Notes to Financial Statements.
30
<PAGE>
EVERGREEN
Select Core Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Years Ended March 31,
March 31, 2000 Six Months Ended --------------------------------------
(Unaudited) September 30, 1999** (b) 1999 (b) 1998 (b) 1997 (b) 1996 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS I
Net asset value,
beginning of period $ 10.08 $ 10.39 $ 10.53 $ 9.98 $ 10.11 $ 9.70
---------- ---------- -------- ------- ------- -------
Income from investment
operations
Net investment income 0.32 0.30 0.59 0.56 0.66 0.68
Net realized and
unrealized gains or
losses on securities (0.14) (0.17) 0.09 0.61 (0.12) 0.40
---------- ---------- -------- ------- ------- -------
Total from investment
operations 0.18 0.13 0.68 1.17 0.54 1.08
---------- ---------- -------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.32) (0.30) (0.61) (0.62) (0.67) (0.67)
Net realized gains 0 (0.14) (0.21) 0 0 0
---------- ---------- -------- ------- ------- -------
Total distributions to
shareholders (0.32) (0.44) (0.82) (0.62) (0.67) (0.67)
---------- ---------- -------- ------- ------- -------
Net asset value, end of
period $ 9.94 $ 10.08 $ 10.39 $ 10.53 $ 9.98 $ 10.11
---------- ---------- -------- ------- ------- -------
Total return 1.74% 0.00% 0.07% 12.06% 5.52% 11.23%
Ratios and supplemental
data
Net assets, end of
period (thousands) $1,130,066 $1,042,781 $109,028 $96,252 $76,499 $74,774
Ratios to average net
assets
Expenses++ 0.42%+ 0.40%+ 0.50% 0.50% 0.50% 0.53%
Net investment income 6.31%+ 5.70%+ 5.73% 6.06% 6.48% 6.54%
Portfolio turnover rate 128% 225% 221% 235% 207% 268%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended March 31,
March 31, 2000 Six Months Ended ---------------------
(Unaudited) September 30, 1999** (b) 1999 (b) 1998 (a)(b)
<S> <C> <C> <C> <C>
CLASS IS
Net asset value,
beginning of period $ 10.08 $10.40 $10.54 $10.40
------- ------ ------ ------
Income from investment
operations
Net investment income 0.31 0.28 0.59 0.36
Net realized and
unrealized gains or
losses on securities (0.15) (0.18) 0.07 0.08
------- ------ ------ ------
Total from investment
operations 0.16 0.10 0.66 0.44
------- ------ ------ ------
Distributions to
shareholders from
Net investment income (0.30) (0.28) (0.59) (0.30)
Net realized gains 0 (0.14) (0.21) 0
------- ------ ------ ------
Total distributions to
shareholders (0.30) (0.42) (0.80) (0.30)
------- ------ ------ ------
Net asset value, end of
period $ 9.94 $10.08 $10.40 $10.54
------- ------ ------ ------
Total return 1.61% (0.17%) (0.01%) 8.55%
Ratios and supplemental
data
Net assets, end of
period (thousands) $13,668 $5,744 $2,721 $3,069
Ratios to average net
assets
Expenses++ 0.68%+ 0.61%+ 0.65% 0.65%+
Net investment income 6.15%+ 5.49%+ 5.59% 5.96%+
Portfolio turnover rate 128% 225% 221% 235%
</TABLE>
(a) For the period from October 2, 1997 (commencement of class operations) to
March 31, 1998.
(b) On June 4, 1999, Evergreen Select Core Bond Fund acquired the net assets of
the Tattersall Bond Fund. The Tattersall Bond Fund was the accounting and
performance survivor in this transaction. The above financial highlights
for the periods prior to June 4, 1999 are those of the Tattersall Bond
Fund, which have been restated to give effect to this transaction.
+ Annualized.
++ Ratio of expenses to average net assets excludes expense reductions, but in-
cludes fee waivers.
** For the six months ended September 30, 1999. The Fund changed its fiscal
year end from March 31 to September 30, effective September 30, 1999.
See Combined Notes to Financial Statements.
31
<PAGE>
EVERGREEN
Select Fixed Income Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended September 30,
March 31, 2000 ----------------------------
(Unaudited) 1999 1998 (a)
<S> <C> <C> <C>
CLASS I
Net asset value, beginning of
period $ 5.82 $ 6.12 $ 5.96
-------- ------------ ------------
Income from investment
operations
Net investment income 0.19 0.38 0.31
Net realized and unrealized
gains or losses on securities (0.06) (0.30) 0.16
-------- ------------ ------------
Total from investment operations 0.13 0.08 0.47
-------- ------------ ------------
Distributions to shareholders
from
Net investment income (0.19) (0.38) (0.31)
-------- ------------ ------------
Net asset value, end of period $ 5.76 $ 5.82 $ 6.12
-------- ------------ ------------
Total return 2.17% 0.84% 8.06%
Ratios and supplemental data
Net assets, end of period
(thousands) $559,352 $ 591,017 $ 668,907
Ratios to average net assets
Expenses++ 0.53%+ 0.49% 0.52%+
Net investment income 6.46%+ 5.86% 5.99%+
Portfolio turnover rate 16% 63% 46%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended September 30,
March 31, 2000 ----------------------------
(Unaudited) 1999 1998 (b)
<S> <C> <C> <C>
CLASS IS
Net asset value, beginning of
period $ 5.82 $ 6.12 $ 5.97
------- ------------ -----------
Income from investment
operations
Net investment income 0.18 0.36 0.20
Net realized and unrealized
gains or losses on securities (0.06) (0.30) 0.15
------- ------------ -----------
Total from investment operations 0.12 0.06 0.35
------- ------------ -----------
Distributions to shareholders
from
Net investment income (0.18) (0.36) (0.20)
------- ------------ -----------
Net asset value, end of period $ 5.76 $ 5.82 $ 6.12
------- ------------ -----------
Total return 2.04% 0.59% 5.94%
Ratios and supplemental data
Net assets, end of period
(thousands) $12,953 $ 11,592 $ 9,808
Ratios to average net assets
Expenses++ 0.78%+ 0.74% 0.77%+
Net investment income 6.24%+ 5.65% 5.65%+
Portfolio turnover rate 16% 63% 46%
</TABLE>
(a) For the period from November 24, 1997 (commencement of class operations) to
September 30, 1998.
(b) For the period from March 9, 1998 (commencement of class operations) to
September 30, 1998.
+ Annualized.
++ Ratio of expenses to average net assets excludes expense reductions, but in-
cludes fee waivers.
See Combined Notes to Financial Statements.
32
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Period Ended
March 31, 2000 (a)
(Unaudited)
<S> <C>
CLASS I
Net asset value, beginning of period $ 10.00
-------
Income from investment operations
Net investment income 0.28
Net realized and unrealized gains or losses on securities (0.41)
-------
Total from investment operations (0.13)
-------
Distributions to shareholders from
Net investment income (0.27)
-------
Net asset value, end of period $ 9.60
-------
Total return (1.35%)
Ratios and supplemental data
Net assets, end of period (thousands) $53,978
Ratios to average net assets
Expenses++ 0.62%+
Net investment income 8.63%+
Portfolio turnover rate 20%
</TABLE>
<TABLE>
<CAPTION>
Period Ended
March 31, 2000 (a)
(Unaudited)
<S> <C>
CLASS IS
Net asset value, beginning of period $10.00
------
Income from investment operations
Net investment income 0.29
Net realized and unrealized gains or losses on securities (0.43)
------
Total from investment operations (0.14)
------
Distributions to shareholders from
Net investment income (0.26)
------
Net asset value, end of period $ 9.60
------
Total return (1.45%)
Ratios and supplemental data
Net assets, end of period (thousands) $ 1
Ratios to average net assets
Expenses++ 0.59%+
Net investment income 8.53%+
Portfolio turnover rate 20%
</TABLE>
(a) For the period from November 30, 1999 (commencement of class operations) to
March 31, 2000.
+ Annualized
++ Ratio of expenses to average net assets excludes expense reductions, but in-
cludes fee waivers.
See Combined Notes to Financial Statements.
33
<PAGE>
EVERGREEN
Select Income Plus Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended September 30,
March 31, 2000 -----------------------------
(Unaudited) 1999 1998 (a)
<S> <C> <C> <C>
CLASS I
Net asset value, beginning of
period $ 5.41 $ 5.92 $ 5.72
---------- ------------ ------------
Income from investment
operations
Net investment income 0.19 0.33 0.30
Net realized and unrealized
gains or losses on securities (0.07) (0.46) 0.20
---------- ------------ ------------
Total from investment
operations 0.12 (0.13) 0.50
---------- ------------ ------------
Distributions to shareholders
from
Net investment income (0.19) (0.33) (0.30)
Net realized gains 0 (0.05) 0
---------- ------------ ------------
Total distributions to
shareholders (0.19) (0.38) (0.30)
---------- ------------ ------------
Net asset value, end of period $ 5.34 $ 5.41 $ 5.92
---------- ------------ ------------
Total return 1.92% (2.13%) 8.99%
Ratios and supplemental data
Net assets, end of period
(thousands) $1,676,532 $ 1,794,209 $ 1,367,240
Ratios to average net assets
Expenses++ 0.51%+ 0.48% 0.51%+
Net investment income 6.50%+ 5.95% 6.09%+
Portfolio turnover rate 31% 70% 37%
<CAPTION>
Six Months Ended Year Ended September 30,
March 31, 2000 -----------------------------
(Unaudited) 1999 1998 (b)
<S> <C> <C> <C>
CLASS IS
Net asset value, beginning of
period $ 5.41 $ 5.92 $ 5.71
---------- ------------ ------------
Income from investment
operations
Net investment income 0.18 0.32 0.19
Net realized and unrealized
gains or losses on securities (0.07) (0.46) 0.21
---------- ------------ ------------
Total from investment
operations 0.11 (0.14) 0.40
---------- ------------ ------------
Distributions to shareholders
from
Net investment income (0.18) (0.32) (0.19)
Net realized gains 0 (0.05) 0
---------- ------------ ------------
Total distributions to
shareholders (0.18) (0.37) (0.19)
---------- ------------ ------------
Net asset value, end of period $ 5.34 $ 5.41 $ 5.92
---------- ------------ ------------
Total return 1.79% (2.36%) 7.21%
Ratios and supplemental data
Net assets, end of period
(thousands) $ 14,039 $ 10,871 $ 7,528
Ratios to average net assets
Expenses++ 0.76%+ 0.73% 0.75%+
Net investment income 6.31%+ 5.74% 5.80%+
Portfolio turnover rate 31% 70% 37%
</TABLE>
(a) For the period from November 24, 1997 (commencement of class operations) to
September 30, 1998.
(b) For the period from March 2, 1998 (commencement of class operations) to
September 30, 1998.
+ Annualized
++ Ratio of expenses to average net assets excludes expense reductions, but in-
cludes fee waivers.
See Combined Notes to Financial Statements.
34
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended September 30,
March 31, 2000 -----------------------------
(Unaudited) 1999 1998 (a)
<S> <C> <C> <C>
CLASS I
Net asset value, beginning of
period $ 61.33 $ 67.11 $ 64.84
-------- ------------ ------------
Income from investment
operations
Net investment income 1.48 2.97 2.57
Net realized and unrealized
gains or losses on securities (1.25) (4.89) 2.27
-------- ------------ ------------
Total from investment
operations 0.23 (1.92) 4.84
-------- ------------ ------------
Distributions to shareholders
from
Net investment income (1.48) (2.97) (2.57)
Net realized gains 0 (0.89) 0
-------- ------------ ------------
Total distributions to
shareholders (1.48) (3.86) (2.57)
-------- ------------ ------------
Net asset value, end of period $ 60.08 $ 61.33 $ 67.11
-------- ------------ ------------
Total return 0.37% (3.00%) 7.61%
Ratios and supplemental data
Net assets, end of period
(thousands) $646,882 $ 704,474 $ 746,874
Ratios to average net assets
Expenses++ 0.63%+ 0.57% 0.62%+
Net investment income 4.88%+ 4.59% 4.59%+
Portfolio turnover rate 30% 97% 47%
<CAPTION>
Six Months Ended Year Ended September 30,
March 31, 2000 -----------------------------
(Unaudited) 1999 1998 (b)
<S> <C> <C> <C>
CLASS IS
Net asset value, beginning of
period $ 61.33 $ 67.11 $ 65.91
-------- ------------ ------------
Income from investment
operations
Net investment income 1.41 2.81 1.66
Net realized and unrealized
gains or losses on securities (1.26) (4.89) 1.20
-------- ------------ ------------
Total from investment
operations 0.15 (2.08) 2.86
-------- ------------ ------------
Distributions to shareholders
from
Net investment income (1.40) (2.81) (1.66)
Net realized gains 0 (0.89) 0
-------- ------------ ------------
Total distributions to
shareholders (1.40) (3.70) (1.66)
-------- ------------ ------------
Net asset value, end of period $ 60.08 $ 61.33 $ 67.11
-------- ------------ ------------
Total return 0.25% (3.24%) 4.41%
Ratios and supplemental data
Net assets, end of period
(thousands) $ 6,949 $ 5,863 $ 4,736
Ratios to average net assets
Expenses++ 0.89%+ 0.83% 0.89%+
Net investment income 4.67%+ 4.41% 4.35%+
Portfolio turnover rate 30% 97% 47%
</TABLE>
(a) For the period from November 24, 1997 (commencement of class operations) to
September 30, 1998.
(b) For the period from March 2, 1998 (commencement of class operations) to
September 30, 1998.
+ Annualized
++ Ratio of expenses to average net assets excludes expense reductions, but
includes fee waivers.
See Combined Notes to Financial Statements.
35
<PAGE>
EVERGREEN
Select International Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended
Six Months Ended September 30, Year Ended June 30, 1999
March 31, 2000 -------------------- --------------------------------------
(Unaudited) 1999 1998 (a)(b) 1998 (b) 1997 (b) 1996 (b) 1995 (b)
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS I
Net asset value,
beginning of period $ 9.51 $ 9.52 $ 9.32 $ 9.54 $ 9.70 $ 9.62 $ 9.06
------- ------- ------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.20# 0.53 0.11# 0.47 0.49 0.47 0.62
Net realized and
unrealized gains or
losses on securities (0.68) (0.03) 0.22 (0.06) 0.09 0.30 0.24
------- ------- ------- ------- ------- ------- -------
Total from investment
operations (0.48) 0.50 0.33 0.41 0.58 0.77 0.86
------- ------- ------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.28) (0.51) (0.13) (0.63) (0.74) (0.69) (0.30)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 8.75 $ 9.51 $ 9.52 $ 9.32 $ 9.54 $ 9.70 $ 9.62
------- ------- ------- ------- ------- ------- -------
Total return (4.54%) 3.96% 3.56% 4.42% 6.18% 8.00% 9.70%
Ratios and supplemental
data
Net assets, end of
period (thousands) $53,247 $55,258 $46,607 $36,722 $34,590 $32,998 $26,898
Ratios to average net
assets
Expenses++ 0.70%+ 0.69% 0.76%+ 0.81% 0.85% 0.71% 0.64%
Net investment income 4.44%+ 4.18% 4.89%+ 4.90% 5.14% 5.81% 6.84%
Portfolio turnover rate 43% 158% 3% 46% 90% 67% 133%
<CAPTION>
Year Ended
Six Months Ended September 30, Year Ended June 30,
March 31, 2000 -------------------- --------------------------------------
(Unaudited) 1999 1998 (a)(b) 1998 (b) 1997 (b) 1996 (b) 1995 (b)
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS IS
Net asset value,
beginning of period $ 9.50 $ 9.51 $ 9.30 $ 9.52 $ 9.68 $ 9.61 $ 9.04
------- ------- ------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.20# 0.38 0.11# 0.40 0.42 0.61 0.61
Net realized and
unrealized gains or
losses on securities (0.68) (0.03) 0.23 (0.01) 0.14 0.12 0.24
------- ------- ------- ------- ------- ------- -------
Total from investment
operations (0.48) 0.35 0.34 0.39 0.56 0.73 0.85
------- ------- ------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.27) (0.36) (0.13) (0.61) (0.72) (0.66) (0.28)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 8.75 $ 9.50 $ 9.51 $ 9.30 $ 9.52 $ 9.68 $ 9.61
------- ------- ------- ------- ------- ------- -------
Total return (4.62%) 3.74% 3.61% 4.16% 5.92% 7.74% 9.57%
Ratios and supplemental
data
Net assets, end of
period (thousands) $ 147 $ 238 $ 129 $ 198 $ 182 $ 152 $ 170
Ratios to average net
assets
Expenses++ 0.95%+ 0.95% 1.00%+ 1.06% 1.10% 0.96% 0.89%
Net investment income 4.17%+ 3.85% 4.65%+ 4.65% 4.89% 5.56% 6.59%
Portfolio turnover rate 43% 158% 3% 46% 90% 67% 133%
</TABLE>
(a) For the three months ended September 30, 1998. The Fund changed its fiscal
year end from June 30 to September 30, effective September 30, 1998.
(b) On August 28, 1998, CoreFund Global Bond Fund exchanged substantially all
of its net assets for shares of Evergreen Select International Bond Fund.
CoreFund Global Bond Fund is the accounting survivor and as such its basis
of accounting for assets and liabilities and its operating results for the
periods prior to August 28, 1998 have been carried forward in these finan-
cial highlights.
# Net investment income is based on weighted average shares outstanding
throughout the period.
+ Annualized.
++ Ratio of expenses to average net assets excludes expense reductions, but
includes fee waivers.
See Combined Notes to Financial Statements.
36
<PAGE>
EVERGREEN
Select Limited Duration Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended September 30,
March 31, 2000 ----------------------------
(Unaudited) 1999 1998 (a)
<S> <C> <C> <C>
CLASS I
Net asset value, beginning of
period $ 10.21 $ 10.52 $ 10.42
-------- ------------ -----------
Income from investment operations
Net investment income 0.33 0.60 0.53#
Net realized and unrealized gains
or losses on securities (0.12) (0.29) 0.10
-------- ------------ -----------
Total from investment operations 0.21 0.31 0.63
-------- ------------ -----------
Distributions to shareholders
from
Net investment income (0.32) (0.60) (0.53)
Net realized gains 0.00 (0.02) 0.00
-------- ------------ -----------
Total distributions to
shareholders (0.32) (0.62) (0.53)
-------- ------------ -----------
Net asset value, end of period $ 10.10 $ 10.21 $ 10.52
-------- ------------ -----------
Total return 2.07% 3.07% 6.21%
Ratios and supplemental data
Net assets, end of period
(thousands) $290,463 $ 312,157 $ 70,810
Ratios to average net assets
Expenses++ 0.31%+ 0.31% 0.30%+
Net investment income 6.40%+ 5.88% 5.97%+
Portfolio turnover rate 25% 147% 78%
<CAPTION>
Six Months Ended Year Ended September 30,
March 31, 2000 ----------------------------
(Unaudited) 1999 1998 (b)
<S> <C> <C> <C>
CLASS IS
Net asset value, beginning of
period $ 10.21 $ 10.52 $ 10.41
-------- ------------ -----------
Income from investment operations
Net investment income 0.31 0.58 0.11#
Net realized and unrealized gains
or losses on securities (0.11) (0.29) 0.11
-------- ------------ -----------
Total from investment operations 0.20 0.29 0.22
-------- ------------ -----------
Distributions to shareholders
from
Net investment income (0.31) (0.58) (0.11)
Net realized gains 0.00 (0.02) 0.00
-------- ------------ -----------
Total distributions to
shareholders (0.31) (0.60) (0.11)
-------- ------------ -----------
Net asset value, end of period $ 10.10 $ 10.21 $ 10.52
-------- ------------ -----------
Total return 1.94% 2.81% 2.12%
Ratios and supplemental data
Net assets, end of period
(thousands) $ 9,208 $ 1,629 $ 614
Ratios to average net assets
Expenses++ 0.56%+ 0.56% 0.55%+
Net investment income 6.29%+ 5.67% 5.84%+
Portfolio turnover rate 25% 147% 78%
</TABLE>
(a) For the period from November 24, 1997 (commencement of class operations)
to September 30, 1998.
(b) For the period from July 28, 1998 (commencement of class operations) to
September 30, 1998.
# Net investment income is based on weighted average shares outstanding
throughout the period.
+ Annualized.
++ Ratio of expenses to average net assets excludes expense reductions, but
includes fee waivers.
See Combined Notes to Financial Statements.
37
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended September 30,
March 31, 2000 -----------------------------
(Unaudited) 1999 1998 (a)
<S> <C> <C> <C>
CLASS I
Net asset value, beginning of
period $ 92.57 $ 99.71 $ 100.00
-------- ------------ ------------
Income from investment
operations
Net investment income 3.08 6.29 3.08
Net realized and unrealized
gains or losses on securities (2.57) (7.13) (0.29)
-------- ------------ ------------
Total from investment
operations 0.51 (0.84) 2.79
-------- ------------ ------------
Distributions to shareholders
from
Net investment income (2.97) (6.30) (3.08)
-------- ------------ ------------
Net asset value, end of period $ 90.11 $ 92.57 $ 99.71
-------- ------------ ------------
Total return 0.55% (0.87%) 2.83%
Ratios and supplemental data
Net assets, end of period
(thousands) $145,597 $ 144,320 $ 135,998
Ratios to average net assets
Expenses++ 0.50%+ 0.50% 0.41%+
Net investment income 6.72%+ 6.57% 6.88%+
Portfolio turnover rate 58% 136% 80%
<CAPTION>
Six Months Ended Year Ended September 30,
March 31, 2000 -----------------------------
(Unaudited) 1999 1998 (b)
<S> <C> <C> <C>
CLASS IS
Net asset value, beginning of
period $ 92.57 $ 99.71 $ 99.67
-------- ------------ ------------
Income from investment
operations
Net investment income 3.71 6.05 1.05
Net realized and unrealized
gains or losses on securities (3.31) (7.13) 0.04
-------- ------------ ------------
Total from investment
operations 0.40 (1.08) 1.09
-------- ------------ ------------
Distributions to shareholders
from
Net investment income (2.86) (6.06) (1.05)
-------- ------------ ------------
Net asset value, end of period $ 90.11 $ 92.57 $ 99.71
-------- ------------ ------------
Total return 0.42% (1.12%) 1.10%
Ratios and supplemental data
Net assets, end of period
(thousands) $ 252 $ 6,334 $ 24
Ratios to average net assets
Expenses++ 0.75%+ 0.75% 0.66%+
Net investment income 6.22%+ 6.35% 6.51%+
Portfolio turnover rate 58% 136% 80%
</TABLE>
(a) For the period from April 20, 1998 (commencement of class operations) to
September 30, 1998.
(b) For the period from August 3, 1998 (commencement of class operations) to
September 30, 1998.
+ Annualized
++ Ratio of expenses to average net assets excludes expense reductions, but
includes fee waivers.
See Combined Notes to Financial Statements.
38
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Schedule of Investments
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ADJUSTABLE RATE MORTGAGE SECURITIES - 57.5%
FHLMC - 22.9%
$ 1,268,843 5.683%, 8/1/2029..................................... $ 1,227,992
1,959,746 6.587%, 6/1/2016..................................... 1,997,412
510,838 6.848%, 3/1/2021..................................... 525,847
290,702 6.886%, 7/1/2019..................................... 299,560
548,483 6.918%, 7/1/2030..................................... 566,396
600,564 7.106%, 3/1/2022..................................... 615,518
576,113 7.143%, 9/1/2017..................................... 597,268
866,218 7.144%, 4/1/2022..................................... 894,936
883,581 7.148%, 3/1/2019..................................... 908,984
965,563 7.289%, 1/1/2022..................................... 987,744
1,113,418 7.299%, 11/1/2021.................................... 1,140,867
608,206 7.373%, 10/1/2021.................................... 624,554
155,580 7.398%, 4/1/2020..................................... 155,906
1,119,168 8.119%, 5/1/2026..................................... 1,138,949
-----------
11,681,933
-----------
FNMA - 34.0%
729,532 5.792%, 4/1/2038..................................... 729,304
824,495 5.933%, 11/1/2028.................................... 797,567
627,659 6.07%, 5/1/2036...................................... 627,855
306,557 6.251%, 3/1/2015..................................... 310,328
500,000 6.29%, 3/1/2027...................................... 491,700
508,535 6.386%, 11/1/2039.................................... 498,240
483,249 6.828%, 11/1/2018.................................... 496,311
185,293 6.889%, 10/1/2017.................................... 190,157
145,013 6.916%, 7/1/2020..................................... 150,587
125,608 6.975%, 12/1/2022.................................... 129,730
1,296,305 6.984%, 11/1/2017.................................... 1,328,712
736,076 7.009%, 3/1/2027..................................... 754,360
226,600 7.042%, 10/1/2016.................................... 233,221
200,352 7.06%, 7/1/2027...................................... 205,830
960,146 7.141%, 5/1/2022..................................... 975,817
586,611 7.156%, 12/1/2019.................................... 606,785
362,261 7.229%, 1/1/2022..................................... 376,810
1,981,453 7.244%, 9/1/2021..................................... 2,044,930
576,360 7.279%, 1/1/2031..................................... 597,271
78,738 7.288%, 2/1/2017..................................... 79,366
229,345 7.45%, 1/1/2022...................................... 234,792
583,501 7.49%, 8/1/2027...................................... 601,427
875,794 7.507%, 2/1/2027..................................... 892,767
2,226,835 7.552%, 12/1/2023.................................... 2,263,771
1,023,540 7.645%, 1/1/2016..................................... 1,052,005
627,952 7.716%, 9/1/2018..................................... 656,404
-----------
17,326,047
-----------
GNMA - 0.6%
331,643 7.125%, 10/20/2027................................... 334,442
-----------
Total Adjustable Rate Mortgage Securities
(cost $29,448,819).................................. 29,342,422
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
FIXED RATE MORTGAGES - 10.2%
FHLMC - 2.5%
$ 250,000 6.25%, 7/15/2004.................................... $ 242,240
12,415 7.25%, 11/1/2008.................................... 12,264
381,886 9.00%, 6/1/2006..................................... 387,046
451,781 9.75%, 3/1/2016..................................... 466,261
151,116 10.50%, 4/1/2004 - 10/1/2005........................ 154,259
-----------
1,262,070
-----------
FNMA - 5.2%
740,289 9.00%, 11/1/2006 - 6/1/2007......................... 757,360
524,232 9.50%, 4/15/2005 - 5/1/2007......................... 532,550
573,067 10.40%, 4/25/2019................................... 605,380
83,554 10.50%, 3/1/2001.................................... 83,972
359,795 10.75%, 10/1/2012................................... 386,207
246,905 11.00%, 1/1/2018.................................... 268,664
-----------
2,634,133
-----------
GNMA - 2.5%
1,276,341 10.25%, 11/15/2029.................................. 1,287,803
-----------
Total Fixed Rate Mortgages
(cost $5,294,995).................................. 5,184,006
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.8%
FHLMC - 0.8%
409,337 STRIPS CMO, Ser. 20, Class F, IO,
5.97%, 7/1/2029
(cost $411,384).................................... 405,720
-----------
U. S. TREASURY OBLIGATIONS - 3.2%
U. S. Treasury Notes:
600,000 4.75%, 2/15/2004.................................... 567,282
1,000,000 5.25%, 5/15/2004.................................... 960,160
100,000 5.50%, 5/31/2003.................................... 97,312
-----------
Total U. S. Treasury Obligations
(cost $1,656,933).................................. 1,624,754
-----------
REPURCHASE AGREEMENT - 27.0%
13,783,000 Evergreen Joint Repurchase Agreement, 6.10%, dated
3/31/2000, due 4/3/2000 (cost $13,783,000 maturity
value, $13,790,006) (c)............................ 13,783,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $50,595,131)........................... 98.7% 50,339,902
Other Assets and Liabilities - net............ 1.3 656,106
----- -----------
Net Assets.................................... 100.0% $50,996,008
===== ===========
</TABLE>
See Combined Notes to Schedules of Investments.
39
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - 2.7%
$ 925,000 Contimortgage Home Equity
Loan Trust,
Ser. 1998-2, Cl. A4,
6.19%, 1/15/2014............................... $ 906,755
10,175,000 Distribution Finl. Svcs. Trust,
Ser. 1999-3, Cl. A3,
6.43%, 7/1/2011................................ 10,067,094
9,304,276 Federal Express Corp. Pass Through Certificates,
Ser. 981A,
6.72%, 1/15/2022............................... 8,715,734
711,310 Green Tree Receivables Equipment & Consumer
Trust,
Ser. 1998-A, Cl. A1C,
6.18%, 6/15/2019............................... 696,945
SLMA Student Loan Trust:
1,318,274 Ser. 1997-2, Cl. A1,
6.425%, 4/3/2000............................... 1,312,164
1,177,049 Ser. 1997-3, Cl. A1,
6.485%, 4/3/2000............................... 1,172,606
7,992,699 Ser. 1998-1, Cl. A1,
6.595%, 4/3/2000............................... 7,984,347
--------------
Total Asset-Backed Securities
(cost $31,162,370)............................. 30,855,645
--------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 11.0%
7,794,038 Bear Stearns Comml. Mtge. Securities., Inc.,
Ser. 2000-WF1, Cl. A1,
7.64%, 2/15/2032............................... 7,865,827
14,575,000 FHLMC,
Ser. 2171, Cl. B,
6.279%, 6/15/2009.............................. 13,682,063
FNMA:
5,830,000 Ser. 1994-72, Cl. J,
6.00%, 6/25/2023............................... 5,299,610
7,427,600 Ser. 1996-21, Cl. PJ,
6.00%, 12/25/2010.............................. 6,953,905
5,615,000 Ser. 1999-19, Cl. PG,
6.00%, 10/25/2027.............................. 5,075,763
8,465,000 Ser. 1999-35, Cl. PH,
6.00%, 6/25/2020............................... 8,008,102
7,340,000 Ser. 1999-6, Cl. PB,
6.00%, 3/25/2019............................... 6,616,823
677,784 Ser. G92-23, Cl. Z,
7.50%, 5/25/2021............................... 660,469
875,340 Ser. G92-44, Cl. Z,
8.00%, 7/25/2022............................... 875,537
GMAC Comml. Mtge.
Securities, Inc.:
17,822,816 Ser. 1998-C2, Cl. A1,
6.15%, 5/15/2035............................... 16,960,103
22,435,000 Ser. 1999-C1, Cl. A2,
6.175%, 5/15/2033.............................. 20,458,025
LB Comml. Conduit Mtge. Trust:
5,460,000 Ser. 1998-C4, Cl. A1B,
6.21%, 10/15/2008.............................. 5,016,512
22,070,206 Ser. 1999-C1, Cl. A1,
6.41%, 8/15/2007............................... 21,178,333
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS - continued
$ 8,565,000 Morgan Stanley Capital I, Inc.,
Ser. 1998-XL1, Cl. A3,
6.48%, 6/3/2030................................ $ 8,053,370
--------------
Total Collateralized Mortgage Obligations
(cost $127,706,195)............................ 126,704,442
--------------
CORPORATE BONDS - 31.5%
Aerospace & Defense - 0.0%
350,000 Boeing Co.,
Deb.,
6.625%, 2/15/2038.............................. 299,593
--------------
Airlines - 1.1%
13,410,000 Delta Air Lines, Inc.,
Notes,
8.30%, 12/15/2029.............................. 12,297,278
--------------
Automotive Equipment & Manufacturing - 3.1%
13,750,000 Delphi Automotive Sys. Corp., Notes,
6.125%, 5/1/2004............................... 12,876,916
Ford Motor Co.:
15,130,000 Deb.,
6.375%, 2/1/2029............................... 12,751,731
10,255,000 Sr. Notes,
5.80%, 1/12/2009............................... 9,083,151
235,000 General Motors Corp.,
Deb.,
8.80%, 3/1/2021................................ 263,501
--------------
34,975,299
--------------
Banks - 4.7%
2,610,000 Bank of New York, Inc.,
Sub. Notes,
6.50%, 12/1/2003............................... 2,525,676
8,350,000 BankAmerica Corp.,
Sub. Notes,
7.75%, 7/15/2002............................... 8,408,250
2,450,000 Firststar Bank (Milwaukee) Natl., Sr. Notes,
6.25%, 12/1/2002............................... 2,377,706
5,600,000 Firststar Bank, NA,
Sub. Notes,
7.125%, 12/1/2009.............................. 5,410,860
Natl. City Corp.,
Sub. Notes:
10,255,000 6.875%, 5/15/2019.............................. 9,164,350
900,000 7.20%, 5/15/2005............................... 884,243
PNC Funding Corp. :
Sub. Notes,
5,000,000 6.125%, 9/1/2003............................... 4,811,930
9,750,000 6.13%, 2/15/2009............................... 8,717,504
340,000 SunTrust Banks, Inc.,
Sub. Notes,
6.125%, 2/15/2004.............................. 324,661
675,000 Wachovia Corp.,
Sub. Notes,
6.15%, 3/15/2009............................... 611,176
</TABLE>
40
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Banks - continued
$ 10,700,000 Washington Mutual, Inc.,
Notes,
7.50%, 8/15/2006................................ $ 10,546,594
--------------
53,782,950
--------------
Brokers - 0.5%
900,000 Bear Stearns Co., Inc.,
Sr. Notes,
6.25%, 7/15/2005................................ 842,713
895,000 Donaldson Lufkin & Jenrette Securities, Inc.,
Sr. Notes,
6.50%, 6/1/2008................................. 820,309
5,000,000 Morgan Stanley Group, Inc.,
Sr. Unsub. Notes,
5.625%, 1/20/2004............................... 4,704,670
--------------
6,367,692
--------------
Building, Construction & Furnishings - 0.3%
3,275,000 Masco Corp.,
Deb.,
7.75%, 8/1/2029................................. 3,225,721
--------------
Diversified Companies - 0.6%
7,000,000 Tyco Intl. Group, S.A.,
Notes,
6.875%, 9/5/2002................................ 6,873,608
--------------
Finance & Insurance - 7.1%
20,000,000 American General Fin. Corp.,;
MTN,
6.67%, 6/28/2002................................ 19,653,100
Associates Corp. of No. America,
Sr. Notes:
1,800,000 5.75%, 10/15/2003............................... 1,703,173
10,000,000 6.50%, 7/15/2002................................ 9,815,080
800,000 Beneficial Corp.,
Notes,
6.33%, 10/9/2001................................ 789,806
10,000,000 Caterpillar, Inc.,
Notes,
6.50%, 2/1/2002................................. 9,881,200
100,000 Comml. Credit Group, Inc.,
Deb.,
8.70%, 6/15/2009................................ 109,429
GMAC:
Notes:
5,000,000 5.95%, 3/14/2003................................ 4,801,260
725,000 6.80%, 4/17/2001................................ 723,499
10,365,000 Sr. Unsub. Notes,
5.85%, 1/14/2009................................ 9,182,240
Household Fin. Corp.,
Notes:
10,500,000 6.50%, 11/15/2008............................... 9,681,756
5,200,000 7.20%, 7/15/2006................................ 5,076,063
Intl. Lease Fin. Corp.,
MTN:
9,000,000 5.64%, 4/1/2002................................. 8,710,380
1,315,000 6.42%, 9/11/2000................................ 1,312,806
--------------
81,439,792
--------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Food & Beverage Products - 1.6%
$ 5,215,000 Coca Cola Enterprises, Inc.,
Deb.,
6.75%, 1/15/2038................................ $ 4,475,669
15,600,000 Pepsi Bottling Group, Inc.,
Sr. Notes,
7.00%, 3/1/2029................................. 14,139,856
--------------
18,615,525
--------------
Metals & Mining - 0.1%
775,000 Aluminum Co. of America,
Ser. B,
6.50%, 6/15/2018................................ 693,059
--------------
Oil/Energy - 1.0%
7,200,000 Enron Corp.,
Sr. Notes,
7.375%, 5/15/2019............................... 6,671,815
460,000 Phillips Petroleum Co.,
Deb.,
7.00%, 3/30/2029................................ 399,524
4,850,000 Williams Cos., Inc.,
Notes,
7.625%, 7/15/2019............................... 4,611,967
--------------
11,683,306
--------------
Paper & Packaging - 0.0%
325,000 Intl. Paper Co.,
Notes,
6.50%, 11/15/2007............................... 307,795
--------------
Real Estate - 4.1%
6,485,000 Avalon Properties, Inc.,
Notes,
6.625%, 1/15/2005............................... 6,134,810
425,000 BRE Properties, Inc.,
Notes,
7.125%, 2/15/2013............................... 366,301
3,470,000 Duke Realty, L.P.,
7.05%, 4/3/2000................................. 3,384,510
10,000,000 EOP Operating, L.P.,
Notes,
6.80%, 1/15/2009................................ 9,109,050
ERP Operating, L.P.,
Notes:
875,000 6.55%, 11/15/2001............................... 856,075
20,450,000 6.63%, 4/13/2005................................ 19,697,235
450,000 Prologis Trust,
Notes,
7.00%, 10/1/2003................................ 435,091
7,000,000 Spieker Properties, L.P.,
Notes,
7.25%, 5/1/2009................................. 6,533,800
--------------
46,516,872
--------------
Retailing & Wholesale - 1.2%
2,690,000 Dayton Hudson Corp.,
Puttable Reset Security,
5.95%, 6/15/2000................................ 2,684,120
275,000 May Department Stores Co.,
7.45%, 9/15/2011................................ 277,623
</TABLE>
41
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Retailing & Wholesale - continued
$ 9,000,000 Safeway, Inc.,
Notes,
6.50%, 11/15/2008............................... $ 8,336,124
Sears Roebuck Acceptance Corp.,
MTN:
1,500,000 5.63%, 2/7/2001................................. 1,478,971
750,000 6.86%, 7/3/2001................................. 744,117
750,000 6.99%, 9/30/2002................................ 738,217
--------------
14,259,172
--------------
Telecommunication Services & Equipment - 4.4%
1,100,000 Alltel Corp.,
Deb.,
6.50%, 11/1/2013................................ 1,002,377
AT&T Corp.,
Notes:
615,000 6.00%, 3/15/2009................................ 556,759
11,090,000 6.50%, 3/15/2029................................ 9,616,228
Bellsouth Telecommunications, Inc.,
Deb.:
5,445,000 6.375%, 6/1/2028................................ 4,589,770
7,625,000 7.875%, 2/15/2030............................... 7,743,637
600,000 Pacific Bell,
Notes,
6.625%, 11/1/2009............................... 569,055
82,000 Southwestern Bell Telephone Co.,
Notes,
6.625%, 7/15/2007............................... 78,175
Sprint Capital Corp.,
Notes:
10,000,000 5.875%, 5/1/2004................................ 9,471,930
9,500,000 6.125%, 11/15/2008.............................. 8,629,486
640,000 6.375%, 5/1/2009................................ 589,139
8,000,000 6.875%, 11/15/2028.............................. 7,190,920
--------------
50,037,476
--------------
Transportation - 1.2%
Burlington Northern Santa Fe Corp.:
Deb.:
615,000 6.70%, 8/1/2028................................. 530,721
8,320,000 6.75%, 3/15/2029................................ 7,235,896
5,000,000 Notes,
8.625%, 11/1/2004............................... 5,205,025
420,000 United Parcel Service, Inc.,
Deb.,
8.375%, 4/3/2000................................ 460,633
--------------
13,432,275
--------------
Utilities - Telephone - 0.4%
4,625,000 MCI Communications Corp.,
6.50%, 4/15/2010................................ 4,301,528
--------------
Utilities - 0.1%
1,000,000 Carolina Pwr. & Light Co.,
1st Mtge. Note,
6.75%, 10/1/2002................................ 982,069
--------------
Total Corporate Bonds
(cost $367,123,280)............................. 360,091,010
--------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MORTGAGE-BACKED SECURITIES - 37.6%
FHLMC:
$ 171,757 6.00%, 5/1/2011.................................. $ 162,465
30,950,506 6.50%, 3/1/2014 - 3/1/2015....................... 29,794,504
32,792,289 7.00%, 7/1/2029 - 3/1/2030....................... 31,552,383
5,340,650 7.20%, 11/1/2006................................. 5,315,616
154,111 7.50%, 4/1/2023.................................. 152,379
27,972 7.663%, 12/1/2020................................ 28,196
FNMA:
5,179,991 5.756%, 12/1/2008................................ 4,753,468
4,110,325 5.78%, 12/1/2008................................. 3,784,864
10,372,651 5.81%, 1/1/2009.................................. 9,406,698
4,069,124 5.911%, 4/1/2009................................. 3,766,094
61,911,075 6.00%, 7/1/2006 - 12/1/2029...................... 57,725,823
4,774,818 6.08%, 4/1/2005.................................. 4,535,315
4,461,947 6.125%, 5/1/2009................................. 4,134,064
3,605,322 6.135%, 4/1/2009................................. 3,343,294
8,882,475 6.469%, 8/11/2000................................ 8,635,535
6,117,882 6.605%, 2/1/2007................................. 5,872,476
22,085,000 6.625%, 9/15/2009................................ 21,275,342
537,552 6.70%, 11/1/2007................................. 517,579
5,130,000 6.882%, 11/1/2006................................ 5,104,350
10,516,068 7.00%, 7/1/2029 - 1/1/2030....................... 10,112,987
6,897,901 7.056%, 11/1/2006................................ 6,845,785
3,943,646 7.13%, 5/2/2000.................................. 3,882,537
4,313,181 7.24%, 11/1/2006................................. 4,296,618
86,040 7.919%, 5/15/2000................................ 87,141
582,705 8.66%, 1/1/2005.................................. 607,509
124,375,000 6.00%, TBA....................................... 116,147,775
8,225,000 7.00%, TBA....................................... 7,906,281
GNMA:
27,086,313 5.50%, 5/1/2000.................................. 26,223,072
17,601,532 6.00%, 2/15/2014 - 7/15/2014..................... 16,604,582
5,757,172 6.375%, 5/1/2000................................. 5,777,063
13,015,372 6.50%, 11/15/2023 - 8/15/2027.................... 12,393,017
11,479,654 7.50%, 9/15/2010 - 3/15/2029..................... 11,400,732
7,243,375 7.75%, 7/15/2020 - 8/15/2021..................... 7,242,122
121,187 8.00%, 7/15/2016 - 6/15/2017..................... 123,461
495,961 8.85%, 5/15/2018 - 7/15/2018..................... 514,738
--------------
Total Mortgage-Backed Securities
(cost $431,295,027)............................. 430,025,865
--------------
U. S. TREASURY OBLIGATIONS - 8.3%
18,815,000 U.S. Treasury Bonds,
8.875%, 8/15/2017............................... 24,071,441
U.S. Treasury Notes:
18,678,758 3.375%, 1/15/2007............................... 17,984,151
53,705,000 5.75%, 8/15/2003................................ 52,681,275
30,000 7.00%, 7/15/2006................................ 31,050
--------------
Total U. S. Treasury Obligations
(cost $93,715,105).............................. 94,767,917
--------------
</TABLE>
42
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
MUTUAL FUND SHARES - 4.8%
987,600 Blackrock 2001 Term Trust....................... $ 8,764,950
167,600 Blackrock Income Trust.......................... 995,125
133,100 Blackrock Investment Quality
Term Trust..................................... 1,039,844
836,400 Blackrock No. American Government Income Trust.. 8,102,625
438,300 Blackrock Strategic Term Trust.................. 3,807,731
121,300 Dresdner RCM Global Strategic Income Fund....... 727,800
55,500 Dreyfus Strategic Government Income Fund........ 426,656
7,400 Excelsior Income Shares......................... 107,763
226,000 First Commonwealth Fund......................... 2,118,750
844,000 Hyperion 2002 Term Trust........................ 6,910,250
117,600 Hyperion 2005 Investment Grade Opportunity Term
Trust.......................................... 926,100
462,000 Hyperion Total Return Fund...................... 3,493,875
112,300 John Hancock Income
Securities Trust............................... 1,445,863
77,300 Kemper Intermediate
Government Trust............................... 487,956
1,167,700 MFS Government Markets
Income Trust................................... 7,006,200
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
MUTUAL FUND SHARES - continued
849,200 MFS Intermediate Income Trust................... $ 5,201,350
55,700 TCW/DW Term Trust 2000.......................... 532,631
50,100 Templeton Global Government Income Trust........ 291,206
377,500 Templeton Global Income Fund.................... 2,265,000
--------------
Total Mutual Fund Shares
(cost $54,822,853)............................. 54,651,675
--------------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
REPURCHASE AGREEMENTS - 10.0%
$114,503,000 State Street Bank & Trust Co.#,
6.05%, dated 3/31/2000,
due 4/3/2000, maturity
value $114,560,729
(cost $114,503,000)............................ 114,503,000
--------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $1,220,327,830).................... 105.9% 1,211,599,554
Other Assets and
Liabilities - net........................ (5.9) (67,865,666)
----- --------------
Net Assets ............................... 100.0% $1,143,733,888
===== ==============
</TABLE>
# Collateralized by $73,615,000 FNMA, 4.75% - 6.23%, 8/20/2001 - 11/14/2003 and
$44,660,000 FFCB, 6.00%, 10/1/2001; value including accrued
interest - $116,800,780.
See Combined Notes to Schedules of Investments.
43
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - 9.3%
$ 2,000,000 American Airlines, Inc. Pass Through Trust,
Ser. 1999-1, Cl. C,
7.155%, 10/15/2004................................. $ 1,964,550
Amresco Residential Securities Mtge. Loan Trust:
172,242 Ser. 1998-2, Cl. A1,
6.50%, 12/25/2015.................................. 171,572
8,000,000 Ser. 1998-2, Cl. A2,
6.245%, 4/25/2022.................................. 7,940,600
Case Equipment Loan Trust:
1,708,368 Ser. 1997-B, Cl. A4,
6.41%, 9/15/2004................................... 1,698,963
200,000 Ser. 1998-A, Cl. A4,
5.86%, 2/15/2005................................... 197,531
Contimortgage Home Equity Loan Trust:
2,688,484 Ser. 1996-1, Cl. A5,
6.15%, 3/15/2011................................... 2,679,061
251,708 Ser. 1997-4, Cl. A3,
6.26%, 7/15/2012................................... 251,078
Continental Airlines, Inc. Pass Through Trust:
3,000,000 Ser. 1999-2, Cl. C2,
7.434%, 9/15/2004.................................. 2,918,295
2,866,196 Ser. 971B,
7.461%, 4/1/2013................................... 2,799,801
5,000,000 Distribution Finl. Svcs. Trust,
Ser. 1999-3, Cl. A4,
6.65%, 11/3/2015................................... 4,935,825
5,495,999 Empire Funding Home Loan Owner Trust,
Ser. 1998-1, Cl. A4,
6.26%, 12/25/2012.................................. 5,383,469
First Plus Home Loan Trust:
61 Ser. 1997-2, Cl. A5,
6.82%, 4/10/2023................................... 61
2,455,000 Ser. 1997-3, Cl. A5,
6.86%, 10/10/2013.................................. 2,450,249
5,750,000 FNMA,
Ser. 1998-W8, Cl. A4,
6.02%, 9/25/2028................................... 5,449,016
421,508 Heller Equipment Asset Receivables Trust,
Ser. 1997-1, Cl. A2,
6.39%, 5/25/2005................................... 419,904
92,892 IMC Home Equity Loan Trust,
Ser. 1997-2, Cl. A3,
6.94%, 11/20/2011.................................. 92,648
1,488,031 Life Fin. Home Loan Owner Trust,
Ser. 1997-3, Cl. A2,
6.79%, 10/25/2011.................................. 1,479,468
1,700,000 Metlife Capital Equipment Loan Trust,
Ser. 1997-A, Cl. A,
6.85%, 5/20/2008................................... 1,684,318
181,226 Olympic Automobile Receivables Trust,
Ser. 1995-D, Cl. B,
6.10%, 4/15/2002................................... 181,132
2,281,621 Prudential Securities Secd. Financing Corp.,
Ser. 1994-4, Cl. A1,
8.12%, 2/15/2025................................... 2,316,792
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - continued
$ 2,500,000 Southern Pacific Secd. Assets Corp.,
Ser. 1998-1, Cl. A6,
7.08%, 3/25/2028................................... $ 2,381,137
529,484 The Money Store Home Equity Trust,
Ser. 1992-B, Cl. A,
6.90%, 7/15/2007................................... 524,404
4,786,260 U.S. Airways, Inc. Pass Through Certificates,
Ser. 1998-1, Cl. B,
7.35%, 1/30/2018................................... 4,536,345
317,963 Union Acceptance Corp.,
Ser. 1996-A, Cl. A,
5.40%, 4/7/2003.................................... 316,079
459,421 Xerox Rental Equipment Trust,
Ser. 1996-A,
6.20%, 12/26/2005.................................. 458,416
------------
Total Asset-Backed Securities
(cost $54,397,060)................................. 53,230,714
------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 20.0%
3,250,000 Blackrock Capital Fin., L.P.,
Ser. 1997-C1, Cl. D,
7.15%, 10/25/2026.................................. 3,160,901
3,042,547 Carco Auto Loan Master Trust,
Ser. 1997-1, Cl. A,
6.689%, 8/15/2004.................................. 3,037,664
Credit Suisse First Boston Mtge. Securities Corp.:
5,000,000 Ser. 1998-C1, Cl. A1B,
6.48%, 5/17/2008................................... 4,660,287
3,300,000 Ser. 1998-FL1A, Cl. E,
6.7625%, 1/10/2001................................. 3,276,521
15,000,000 Ser. 1998-Fl2A, Cl. D,
7.47%, 10/15/2001 (e).............................. 14,949,480
3,327,814 Deutsche Mtge. & Asset Receiving Corp.,
Ser. 1998-C1, Cl. A1,
6.22%, 9/15/2007................................... 3,187,371
DLJ Comml. Mtge. Corp.:
6,700,000 Ser. 1998-ST1A, Cl. B1,
6.82%, 12/8/2000................................... 6,686,298
3,350,000 Ser. 1998-ST1A, Cl. B2,
7.14%, 12/8/2000................................... 3,342,781
6,711,000 Ser. 1999-STF1, Cl. B1,
8.6325%, 9/15/2001 (e)............................. 6,751,320
10,713,000 Ser. 1999-STF1, Cl. B2,
9.2325%, 9/15/2001................................. 10,790,208
FHLMC:
2,537,112 Ser. 12, Cl. A,
9.25%, 11/15/2019.................................. 2,598,409
1,675,000 Ser. 1519, Cl. F,
6.75%, 3/15/2007................................... 1,666,365
418,187 Ser. 1546, Cl. D,
5.75%, 10/15/2016.................................. 417,144
132,514 Ser. 1608, Cl. FN,
6.7625%, 11/15/2023................................ 132,673
577,322 Ser. 1935, Cl. FL,
6.7625%, 2/15/2027................................. 579,051
6,000,000 Fortress Comml. Mtge. Trust,
Ser. 1999-PC1, Cl. C,
7.6863%, 12/10/2004 (e)............................ 6,057,186
</TABLE>
44
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS - continued
$ 1,904,945 Iroquois Trust,
Ser. 1997-3, Cl. A,
6.68%, 11/10/2003................................. $ 1,893,144
Potomac Gurnee Fin. Corp.:
2,380,171 Ser. 1, Cl. A,
6.887%, 12/21/2026................................ 2,323,963
2,000,000 Ser. 1, Cl. B,
7.003%, 12/21/2026................................ 1,965,810
3,251,908 Prudential Home Mtge. Securities,
Ser. 1993-39, Cl. A8,
6.50%, 10/25/2008................................. 3,189,065
3,222,874 Prudential Securities Secd. Financing Corp.,
Ser. 1998-C1, Cl. A1,
6.105%, 11/15/2002................................ 3,180,484
94,358 Residential Asset Securitization Trust,
Ser. 1997-A1, Cl. A1,
7.00%, 3/25/2027................................... 93,927
2,304,704 RMF Comml. Mtge. Pass Through Certificates,
Ser. 1997-1, Cl. A1,
6.38%, 1/15/2019.................................. 2,279,986
9,328,938 SASCO Floating Rate Comml. Mtge.,
Ser. 1999-C3, Cl. H,
7.5213%, 3/20/2002................................ 9,320,570
665,873 Saxon Mtge. Securities Corp.,
Ser. 1993-8, Cl. 1A2,
7.375%, 9/25/2023................................. 663,772
Structured Asset Securities Corp.:
7,000,000 Ser. 1996-CFL, Cl. C,
6.525%, 2/25/2028................................. 6,889,295
11,672,432 Ser. 1998-C2A, Cl. E,
6.725%, 2/25/2001................................. 11,529,153
------------
Total Collateralized Mortgage Obligations
(cost $114,752,000)............................... 114,622,828
------------
CORPORATE BONDS - 23.5%
Automotive Equipment & Manufacturing - 1.3%
2,525,000 DaimlerChrysler AG, MTN,
6.46%, 12/7/2001.................................. 2,487,915
5,000,000 Johnson Controls, Inc.,
Sr. Notes,
6.30%, 2/1/2008................................... 4,651,770
------------
7,139,685
------------
Banks - 3.8%
85,000 Banc One Corp.,
Sub. Notes,
7.60%, 5/1/2007................................... 83,760
BB & T Corp.,
Sub Notes:
6,850,000 6.375%, 6/30/2005................................. 6,477,332
1,000,000 7.05%, 5/23/2003.................................. 982,616
3,000,000 First Chicago Corp.,
Sr. Sub. Notes,
9.20%, 12/17/2001................................. 3,087,444
2,120,000 NationsBank Corp.,
Sr. Notes,
5.75%, 3/15/2001.................................. 2,094,064
1,020,000 NCNB Corp.,
Sr. Sub. Notes,
9.125%, 10/15/2001................................ 1,044,469
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Banks - continued
$ 1,970,000 Security Pacific Corp.,
Sr. Sub. Notes,
11.50%, 11/15/2000............................... $ 2,022,487
899,000 Societe Generale (New York),
Sr. Sub. Notes,
7.40%, 6/1/2006.................................. 884,858
5,000,000 Swiss Bank Corp.,
Sr. Sub. Notes,
6.75%, 7/15/2005................................. 4,813,790
------------
21,490,820
------------
Brokers - 2.7%
1,545,000 Bear Stearns Co.,
Sr. Notes,
6.65%, 12/1/2004................................. 1,482,162
Lehman Brothers Holdings, Inc.:
5,000,000 Sr. Notes,
6.625%, 11/15/2000............................... 4,984,265
2,640,000 Sr. Sub. Notes,
7.25%, 4/15/2003................................. 2,607,847
2,350,000 Merrill Lynch & Co., Inc.,
6.00%, 2/12/2003................................. 2,264,815
1,665,000 Paine Webber Group Inc.,
Sr. Notes,
6.50%, 11/1/2005................................. 1,560,463
2,405,000 Salomon Smith Barney, Inc.,
Sr. Notes,
6.25%, 1/15/2005................................. 2,288,362
------------
15,187,914
------------
Building, Construction & Furnishings - 0.3%
1,545,000 CSR America, Inc.,
Sr. Notes,
6.875%, 7/21/2005................................ 1,502,350
------------
Cable/Other Video Distribution - 0.5%
1,288,000 Tele-Communications, Inc.,
Sr. Notes,
7.25%, 8/1/2005.................................. 1,286,307
1,690,000 Time Warner, Inc.,
Notes,
8.11%, 8/15/2006................................. 1,734,711
------------
3,021,018
------------
Finance & Insurance - 6.9%
7,000,000 Associated P & C Holdings, Inc.,
Sr. Notes,
6.75%, 7/15/2003 (a)............................. 6,718,355
3,720,000 CIT Group Holdings, Inc.,
Sr. Notes,
6.375%, 8/1/2002................................. 3,634,276
8,750,000 First Security Corp.,
MTN,
6.08%, 2/9/2001.................................. 8,650,390
8,000,000 Ford Motor Credit Co.,
Notes,
7.375%, 10/28/2009............................... 7,846,400
3,567,000 GMAC,
Sr. Notes,
5.875%, 1/22/2003................................ 3,422,947
</TABLE>
45
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Finance & Insurance - continued
$ 2,250,000 Horace Mann Educators Corp.,
Sr. Notes,
6.625%, 1/15/2006............................... $ 2,113,025
5,000,000 Metropolitan Life Insurance Co.,
Sr. Notes,
7.00%, 11/1/2005 (a)............................ 4,842,965
2,000,000 Natl. Rural Utilities Cooperative Fin.,
6.75%, 9/1/2001................................. 1,988,332
------------
39,216,690
------------
Food & Beverage Products - 0.3%
1,800,000 Nabisco, Inc.,
Sr. Notes,
6.00%, 2/15/2001................................ 1,774,327
------------
Healthcare Products & Services - 1.2%
7,175,000 Columbia/HCA Healthcare Corp.,
MTN,
6.875%, 7/15/2001............................... 6,976,052
------------
Industrial Specialty Products & Services - 0.2%
1,000,000 Harcourt General, Inc.,
Sr. Notes,
8.25%, 6/1/2002................................. 1,000,272
------------
Machinery - Diversified - 0.8%
5,000,000 Case Corp.,
Ser. B,
6.25%, 12/1/2003................................ 4,762,720
------------
Manufacturing - Distributing - 0.9%
5,000,000 Honeywell Intl., Inc.,
Notes,
7.50%, 3/1/2010................................. 5,062,730
------------
Real Estate - 0.2%
1,250,000 EOP Operating, L.P.,
Sr. Notes,
6.376%, 2/15/2002............................... 1,218,093
------------
Retailing & Wholesale - 0.8%
1,585,000 Gap, Inc.,
Sr. Notes,
6.90%, 9/15/2007................................ 1,540,043
3,200,000 Target Corp.,
Notes,
7.50%, 2/15/2005................................ 3,227,891
------------
4,767,934
------------
Telecommunication Services & Equipment - 0.3%
2,000,000 Sprint Capital Corp.,
5.70%, 11/15/2003............................... 1,896,436
------------
Transportation - 1.1%
6,000,000 Union Pacific Corp.,
Deb.,
9.625%, 12/15/2002.............................. 6,278,922
------------
Utilities - Electric - 0.5%
3,000,000 Virginia Elec. & Pwr. Co.,
MTN,
6.30%, 6/21/2001................................ 2,969,559
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Utilities - 1.7%
$ 1,600,000 Duke Capital Corp.,
Sr. Notes, Ser. A,
6.25%, 7/15/2005.................................. $ 1,506,778
5,000,000 LG & E Capital Corp.,
5.75%, 11/1/2001.................................. 4,813,855
3,675,000 PG & E Gas Transmission Northwest,
Sr. Notes,
7.10%, 6/1/2005................................... 3,637,735
------------
9,958,368
------------
Total Corporate Bonds (cost $137,755,398).......... 134,223,890
------------
MORTGAGE-BACKED SECURITIES - 16.5%
FHLMC:
153,567 6.00%, 12/1/2000................................... 152,077
893,934 6.50%, 7/1/2004.................................... 876,261
10,000,000 7.50%, 12/1/2099................................... 9,834,300
19,008 8.00%, 4/1/2000.................................... 19,051
10,000,000 8.00%, TBA ........................................ 10,037,500
15,000,000 8.50%, TBA (d)..................................... 15,285,900
FNMA:
2,686,757 6.00%, 11/1/2008................................... 2,581,006
7,423,741 6.149%, 2/1/2031................................... 7,235,697
69,817 6.15%, 6/1/2017.................................... 68,208
3,777,825 11.00%, 2/15/2025.................................. 4,125,249
32,000,000 7.00%, TBA ........................................ 31,178,600
13,000,000 GNMA,
8.00%, TBA (d).................................... 13,146,250
------------
Total Mortgage-Backed Securities
(cost $94,030,912)................................ 94,540,099
------------
U.S. AGENCY OBLIGATIONS - 9.8%
FHLB:
2,000,000 5.45%, 10/19/2005.................................. 1,852,970
2,860,533 5.467%, 2/19/2004.................................. 2,716,553
5,000,000 5.72%, 8/25/2003................................... 4,796,815
3,720,000 5.89%, 6/30/2008................................... 3,424,558
5,000,000 5.905%, 3/27/2008.................................. 4,620,880
673,009 6.043%, 4/28/2003.................................. 669,172
5,000,000 6.07%, 8/28/2008................................... 4,591,425
1,100,554 6.23%, 5/18/2005................................... 1,087,227
4,000,000 6.54%, 12/12/2007.................................. 3,788,784
10,000,000 7.70%, 9/20/2004................................... 10,253,260
FHLMC:
2,250,000 6.51%, 1/8/2007.................................... 2,178,317
1,825,000 6.97%, 6/16/2005................................... 1,785,120
FNMA:
6,441,000 5.125%, 2/13/2004.................................. 6,020,326
4,000,000 5.52%, 4/17/2002................................... 3,891,856
4,495,000 6.95%, 11/13/2006.................................. 4,360,442
------------
Total U.S. Agency Obligations (cost $59,158,040)... 56,037,705
------------
</TABLE>
46
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
U.S. TREASURY OBLIGATIONS+ - 24.8%
U.S. Treasury Notes:
$15,000,000 5.625%, 5/15/2008.................................. $ 14,409,375
10,160,000 5.75%, 4/30/2003................................... 9,959,980
47,470,000 6.125%, 8/15/2007.................................. 47,039,827
21,500,000 6.50%, 10/15/2006.................................. 21,721,729
29,500,000 6.625%, 5/15/2007.................................. 30,080,796
17,695,000 7.875%, 11/15/2004................................. 18,745,641
------------
Total U.S. Treasury Obligations
(cost $144,850,838)............................... 141,957,348
------------
YANKEE OBLIGATIONS - 5.3%
Banks - 4.3%
Korea Dev. Bank,
Notes:
5,000,000 7.25%, 5/15/2006.................................. 4,742,500
5,000,000 7.375%, 9/17/2004................................. 4,838,255
14,865,000 Natl. Bank of Canada,
Sr. Sub. Notes, Ser. B,
8.125%, 8/15/2004................................. 15,146,142
------------
24,726,897
------------
Diversified Companies - 0.3%
1,750,000 Tyco Intl. Group SA,
6.125%, 1/15/2009................................. 1,562,424
------------
Finance & Insurance - 0.2%
1,500,000 FBG Fin., Ltd.,
Notes,
6.75%, 11/15/2005 (a)............................. 1,449,539
------------
Oil/Energy - 0.3%
1,625,000 Amoco Argentina Oil Co.,
MTN,
6.75%, 2/1/2007................................... 1,605,375
------------
Utilities - 0.2%
1,000,000 Hydro Quebec,
MTN,
7.52%, 7/17/2003.................................. 1,004,458
------------
Total Yankee Obligations
(cost $31,113,684)................................ 30,348,693
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
COMMERCIAL PAPER* - 25.6%
Diversified Companies - 4.4%
$25,000,000 Tyco Intl. Group SA,
6.23%, 5/19/2000 ................................. $ 24,800,986
------------
Finance & Insurance - 4.3%
25,000,000 Conseco, Inc.,
6.25%, 5/19/2000.................................. 24,800,348
------------
Food & Beverage Products - 4.3%
25,000,000 Imperial Tobacco Group PLC,
6.25%, 5/19/2000.................................. 24,800,347
------------
Oil/Energy - 4.3%
25,000,000 Edison Mission Midwest Holdings,
6.25%, 5/19/2000.................................. 24,800,347
------------
Paper & Packaging - 3.9%
22,434,000 Crown, Cork & Seal Co.,
6.25%, 5/19/2000.................................. 22,254,840
------------
Utilities - Electric - 4.4%
25,000,000 Texas Utilities Co.,
6.23%, 5/19/2000.................................. 24,800,987
------------
Total Commercial Paper
(cost $146,257,853)............................... 146,257,855
------------
REPURCHASE AGREEMENT - 4.4%
25,234,311 Dresdner Bank AG#,
5.90%, dated 3/31/2000, due
4/3/2000, maturity value
$25,246,718 (cost $25,234,311).................... 25,234,311
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $809,316,560)....................... 139.2% 796,453,443
Other Assets and Liabilities - net......... (39.2) (224,148,566)
----- -------------
Net Assets................................. 100.0% $ 572,304,877
===== =============
</TABLE>
# Collateralized by $299,000 U.S. Treasury Notes, 6.00% - 6.50%, 8/15/2009 -
2/15/2010 and $33,700,000 U.S. Treasury STRIPS, 3.625% - 3.375%, 1/15/2007 -
4/15/2028; value including accrued interest--$25,743,636.
See Combined Notes to Schedules of Investments.
47
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Schedule of Investments
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - 84.5%
Advertising & Related Services - 2.9%
$ 500,000 Infinity Broadcasting, Inc.,
Sr. Sub. Notes,
8.875%, 6/15/2007................................. $ 510,000
600,000 K III Communications Corp.,
Sr. Notes,
8.50%, 2/1/2006................................... 577,500
500,000 Lamar Media Corp.,
Sr. Sub. Notes,
9.625%, 12/1/2006................................. 498,750
-----------
1,586,250
-----------
Aerospace & Defense - 0.8%
450,000 Sequa Corp.,
Sr. Notes,
9.00%, 8/1/2009................................... 419,625
-----------
Automotive Equipment & Manufacturing - 5.6%
550,000 Eagle-Picher Inds.,
Sr. Sub. Notes,
9.375%, 3/1/2008.................................. 470,250
600,000 Federal Mogul Corp.,
Notes,
7.50%, 1/15/2009.................................. 464,964
600,000 Hayes Wheels Intl., Inc.,
Ser. B,
9.125%, 7/15/2007................................. 538,500
500,000 Lear Corp.,
Sub. Notes,
9.50%, 7/15/2006.................................. 487,500
600,000 Mark IV Inds., Inc.,
Sr. Sub. Notes,
7.50%, 9/1/2007................................... 551,971
500,000 Tenneco Automotive, Inc.,
Sr. Sub. Notes,
11.625%, 10/15/2009............................... 490,000
-----------
3,003,185
-----------
Building, Construction &
Furnishings - 4.0%
600,000 American Standard, Inc.,
Sr. Notes,
7.375%, 2/1/2008.................................. 543,000
300,000 Lennar Corp.,
Sr. Notes,
7.625%, 3/1/2009.................................. 259,461
650,000 MDC Holdings, Inc.,
Sr. Notes,
8.375%, 2/1/2008.................................. 549,250
450,000 Nortek, Inc.,
Sr. Notes,
Ser. B,
8.875%, 8/1/2008.................................. 405,000
450,000 Standard Pacific Corp.,
Sr. Notes,
8.50%, 4/1/2009................................... 387,000
-----------
2,143,711
-----------
Business Equipment & Services - 0.5%
300,000 Merrill Corp.,
Sr. Sub. Notes,
12.00%, 5/1/2009 (a).............................. 289,500
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Cable/Other Video Distribution - 1.2%
$ 100,000 Adelphia Communications Corp.,
Sr. Notes, Ser. B,
9.875%, 3/1/2007.................................... $ 98,000
600,000 Charter Communications,
Sr. Notes,
8.625%, 4/1/2009.................................... 532,500
-----------
630,500
-----------
Chemical & Agricultural Products - 3.4%
650,000 Huntsman ICI Chemicals LLC,
Sr. Sub. Notes,
10.125%, 7/1/2009................................... 630,500
250,000 ISP Holdings, Inc.,
Sr. Notes, Ser. B,
9.75%, 2/15/2002.................................... 238,125
550,000 Scotts Co.,
Sr. Sub. Notes,
8.625%, 1/15/2009 (a)............................... 508,750
450,000 Sterling Chemicals, Inc.,
Ser. B,
12.375%, 7/15/2006.................................. 461,250
-----------
1,838,625
-----------
Communication Systems & Services - 0.8%
500,000 Century Communications Corp.,
Sr. Notes,
8.875%, 1/15/2007................................... 460,000
-----------
Consumer Products & Services - 1.2%
650,000 Playtex Family Products Corp.,
Sr. Sub. Notes,
9.00%, 12/15/2003................................... 635,375
-----------
Food & Beverage Products - 1.3%
600,000 AFC Enterprises, Inc.,
Sr. Sub. Notes,
10.25%, 5/15/2007................................... 585,000
250,000 Aurora Foods, Inc.,
Sr. Sub. Notes, Ser. B,
9.875%, 2/15/2007................................... 95,000
-----------
680,000
-----------
Gaming - 9.9%
600,000 Argosy Gaming Co.,
Sr. Sub. Notes,
10.75%, 6/1/2009.................................... 610,500
500,000 Aztar Corp.,
Sr. Sub. Notes,
8.875%, 5/15/2007................................... 453,750
600,000 Boyd Gaming Corp.,
Sr. Sub. Notes,
9.50%, 7/15/2007.................................... 564,750
500,000 Harrahs Operating Co., Inc.,
Sr. Sub. Notes,
7.875%, 12/15/2005.................................. 465,000
600,000 Hollywood Park, Inc.,
Sr. Sub. Notes,
9.25%, 2/15/2007.................................... 591,000
600,000 Horseshoe Gaming Holdings,
Sr. Notes,
8.625%, 5/15/2009................................... 552,000
</TABLE>
48
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Gaming - continued
$ 600,000 Isle of Capri Casinos, Inc.,
Sr. Sub. Notes,
8.75%, 4/15/2009..................................... $ 528,000
600,000 Mohegan Tribal Gaming Auth.,
Sr. Notes,
8.125%, 1/1/2006..................................... 568,500
500,000 Park Place Entertainment Corp.,
Sr. Sub. Notes,
7.875%, 12/15/2005................................... 462,500
Station Casinos, Inc.:
500,000 8.88%, 12/1/2008..................................... 462,500
100,000 9.75%, 4/15/2007..................................... 98,250
-----------
5,356,750
-----------
Independent Power Producers - 1.0%
Calpine Corp.:
150,000 7.63%, 4/15/2006..................................... 139,500
450,000 7.75%, 4/15/2009..................................... 417,937
-----------
557,437
-----------
Industrial Specialty Products & Services - 0.1%
100,000 Allied Waste No. America, Inc.,
Sr. Notes,
7.625%, 1/1/2006..................................... 82,500
-----------
Iron & Steel - 1.3%
600,000 National Steel Corp.,
1st Mtge. Notes, Ser. D,
9.875%, 3/1/2009..................................... 589,500
100,000 WHX Corp.,
Sr. Notes,
10.50%, 4/15/2005.................................... 92,750
-----------
682,250
-----------
Lease Rental Obligations - 3.8%
500,000 Avis Rent-A-Car, Inc.,
11.00%, 5/1/2009..................................... 498,750
600,000 Budget Group, Inc.,
Sr. Notes,
9.125%, 4/1/2006..................................... 483,000
600,000 Nationsrent, Inc.,
Sr. Sub. Notes,
10.375%, 12/15/2008.................................. 538,500
600,000 United Rentals, Inc.,
Sr. Sub. Notes, Ser. B,
9.25%, 1/15/2009..................................... 534,000
-----------
2,054,250
-----------
Leisure & Tourism - 2.9%
250,000 HMH Properties, Inc.,
Ser. B,
7.875%, 8/1/2008..................................... 211,875
510,000 Outboard Marine Corp.,
Sr. Sub. Notes, Ser. B,
10.75%, 6/1/2008..................................... 395,250
500,000 Premier Parks, Inc.,
Sr. Notes,
9.75%, 1/15/2007..................................... 490,625
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Leisure & Tourism - continued
$ 500,000 Prime Hospitality Corp.,
Sr. Sub. Notes, Ser. B,
9.75%, 4/1/2007..................................... $ 482,500
-----------
1,580,250
-----------
Manufacturing - Distributing - 2.5%
600,000 Holley Performance Products, Inc.,
Sr. Sub. Notes, Ser. B,
12.25%, 9/15/2007................................... 588,000
263,000 Owens Illinois, Inc.,
Sr. Notes,
7.35%, 5/15/2008.................................... 236,889
530,000 Sun World Intl., Inc.,
1st. Mtge. Notes, Ser. B,
11.25%, 4/15/2004................................... 522,050
-----------
1,346,939
-----------
Metals & Mining - 1.0%
550,000 Kaiser Aluminum & Chemical Corp.,
Sr. Notes, Ser. B,
10.875%, 10/15/2006................................. 517,000
-----------
Oil/Energy - 7.6%
600,000 Cross Timbers Oil Co.,
Sr. Sub. Notes, Ser. B,
8.75%, 11/1/2009.................................... 552,000
500,000 Giant Inds., Inc.,
Sr. Sub. Notes,
9.00%, 9/1/2007..................................... 448,125
500,000 Nuevo Energy Co.,
Sr. Sub. Notes, Ser. B,
9.50%, 6/1/2008..................................... 483,750
600,000 Ocean Energy, Inc.,
Sr. Sub. Notes, Ser. B,
8.375%, 7/1/2008.................................... 561,000
500,000 P&L Coal Holdings Corp.,
Sr. Sub. Notes, Ser. B,
9.625%, 5/15/2008................................... 446,250
650,000 Triton Energy, Ltd.,
Sr. Notes,
8.75%, 4/15/2002.................................... 645,125
500,000 Vintage Petroleum, Inc.,
Sr. Sub. Notes,
9.00%, 12/15/2005................................... 486,250
500,000 Western Gas Resources, Inc.,
Sr. Sub. Notes,
10.00%, 6/15/2009................................... 507,500
-----------
4,130,000
-----------
Paper & Packaging - 3.5%
500,000 Container Corp. of America,
Sr. Notes, Ser. A,
11.25%, 5/1/2004.................................... 510,000
450,000 Packaging Corp. of America,
Sr. Sub. Notes,
9.625%, 4/1/2009.................................... 445,500
400,000 Repap New Brunswick, Inc.,
Sr. Secd. Notes,
11.50%, 6/1/2004.................................... 409,500
500,000 Stone Container Corp.,
First Mtge.,
10.75%, 10/1/2002................................... 508,750
-----------
1,873,750
-----------
</TABLE>
49
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Printing, Publishing, Broadcasting & Entertainment -
11.8%
$ 600,000 Ackerley Group, Inc.,
Sr. Sub. Notes, Ser. B,
9.00%, 1/15/2009.................................... $ 558,000
550,000 American Lawyer Media, Inc.,
Sr. Sub. Notes, Ser. B,
9.75%, 12/15/2007................................... 512,875
500,000 American Media Operations, Inc.,
Sr. Sub. Notes,
10.25%, 5/1/2009.................................... 486,250
600,000 Chancellor Media Corp.,
8.00%, 11/1/2008.................................... 594,750
600,000 Echostar DBS Corp.,
Sr. Notes,
9.375%, 2/1/2009.................................... 582,000
500,000 Emmis Communications Corp.,
Ser. B,
8.125%, 3/15/2009................................... 467,500
500,000 Hollinger Intl. Publishing, Inc.,
Sr. Sub. Notes,
9.25%, 2/1/2006..................................... 473,750
500,000 Lin Television Corp.,
8.375%, 3/1/2008.................................... 435,000
500,000 Mediacom LLC,
Sr. Notes, Ser. B,
8.50%, 4/15/2008.................................... 457,500
600,000 Sinclair Broadcast Group, Inc.,
Sr. Sub. Notes,
10.00%, 9/30/2005................................... 567,000
550,000 TV Guide, Inc.,
Sr. Sub. Notes,
8.125%, 3/1/2009.................................... 544,500
300,000 World Color Press, Inc.,
Sr. Sub. Notes,
7.75%, 2/15/2009.................................... 287,634
450,000 Young Broadcasting, Inc.,
Ser. B,
8.75%, 6/15/2007.................................... 396,000
-----------
6,362,759
-----------
Retailing & Wholesale - 2.7%
600,000 Ames Dept. Stores, Inc.,
Sr. Notes,
10.00%, 4/15/2006................................... 564,000
400,000 Jo-Ann Stores, Inc.,
Sr. Sub. Notes,
10.375%, 5/1/2007................................... 354,000
525,000 Michaels Stores, Inc.,
Sr. Notes,
10.875%, 6/15/2006.................................. 548,625
-----------
1,466,625
-----------
Telecommunication Services & Equipment - 12.6%
550,000 Crown Castle Intl. Corp.,
Sr. Notes,
9.00%, 5/15/2011.................................... 500,500
600,000 Global Crossing, Ltd.,
Sr. Notes,
9.125%, 11/15/2006 (a).............................. 573,000
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Telecommunication Services & Equipment - continued
$ 500,000 Hyperion Telecommunications, Inc.,
Sr. Secd. Notes, Ser. B,
12.25%, 9/1/2004...................................... $ 520,000
550,000 Intermedia Communications, Inc.,
Sr. Notes, Ser. B,
8.60%, 6/1/2008....................................... 486,750
650,000 McleodUSA, Inc.,
Sr. Notes,
8.125%, 2/15/2009..................................... 575,250
600,000 Metromedia Fiber Network, Inc.,
Sr. Notes, Ser. B,
10.00%, 11/15/2008.................................... 573,000
500,000 Nextel Communications, Inc.,
Sr. Notes,
9.375%, 11/15/2009.................................... 462,500
450,000 Nextlink Communications, Inc.,
Sr. Notes,
12.50%, 4/15/2006..................................... 465,750
350,000 Powertel, Inc.,
Sr. Notes,
11.125%, 6/1/2007..................................... 362,250
Price Communications Wireless, Inc.:
100,000 9.13%, 12/15/2006..................................... 97,500
450,000 11.75%, 7/15/2007..................................... 488,250
500,000 Time Warner Telecom, LLC,
Sr. Notes,
9.75%, 7/15/2008...................................... 507,500
575,000 Voicestream Wireless Co.,
Sr. Notes,
10.375%, 11/15/2009 (a)............................... 575,000
600,000 Williams Communications Group, Inc.,
Sr. Notes,
10.875%, 10/1/2009.................................... 595,500
----------
6,782,750
----------
Textile & Apparel - 0.1%
100,000 Westpoint Stevens, Inc.,
Sr. Notes,
7.875%, 6/15/2005..................................... 79,500
----------
Utilities - 2.0%
650,000 AES Corp.,
Sr. Sub. Notes,
8.50%, 11/1/2007...................................... 572,000
500,000 Azurix Corp.,
Notes,
10.375%, 2/15/2007 (a)................................ 500,000
----------
1,072,000
----------
Total Corporate Bonds
(cost $47,458,672).................................... 45,631,531
----------
YANKEE OBLIGATIONS - 6.8%
Cable/Other Video Distribution - 1.7%
450,000 Imax Corp.,
Sr. Notes,
7.875%, 12/1/2005..................................... 411,750
450,000 Rogers Cablesystems, Ltd.,
11.00%, 12/1/2015..................................... 509,625
----------
921,375
----------
</TABLE>
50
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - continued
Finance & Insurance - 0.9%
$ 500,000 Tembec Fin. Corp.,
Sr. Notes,
9.875%, 9/30/2005.................................... $ 500,000
-----------
Oil/Energy - 0.8%
450,000 Gulf Canada Resources, Ltd.,
Sr. Notes,
8.35%, 8/1/2006...................................... 436,500
-----------
Paper & Packaging - 1.6%
420,000 Domtar, Inc.,
Notes,
8.75%, 8/1/2006...................................... 423,675
450,000 Norampac, Inc.,
Sr. Notes,
9.50%, 2/1/2008...................................... 438,750
-----------
862,425
-----------
Telecommunication Services & Equipment - 1.8%
500,000 Rogers Cantel, Inc.,
Deb.,
9.75%, 6/1/2016...................................... 552,500
400,000 Telewest Communications, Plc.,
Sr. Deb.,
9.625%, 10/1/2006.................................... 388,000
-----------
940,500
-----------
Total Yankee Obligations
(cost $3,761,779).................................... 3,660,800
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
REPURCHASE AGREEMENT - 6.7%
$3,603,000 Evergreen Joint Repurchase Agreement 6.05%, dated
3/31/2000, due 4/3/2000, maturity value $3,604,817
(cost $3,603,000) (c).............................. $ 3,603,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $54,823,451)............................ 98.0% 52,895,331
Other Assets and
Liabilities - net............................. 2.0 1,084,061
----- -----------
Net Assets..................................... 100.0% $53,979,392
===== ===========
</TABLE>
See Combined Notes to Schedules of Investments.
51
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
COMMON STOCKS - 0.2%
Banks - 0.2%
4,000 First Rep. Pfd. Capital Corp.
(cost $4,000,000)............................... $ 3,860,000
--------------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - 2.8%
$ 7,325,000 BankBoston Receivable Asset Backed Trust,
Ser. 1997-1, Cl. A8,
6.54%, 5/15/2009................................ 7,243,876
6,968,705 Case Equipment Loan Trust,
Ser. 1997-B, Cl. A4,
6.41%, 9/15/2004................................ 6,930,342
775,002 Corestates Home Equity Trust,
Ser. 1993-2, Cl. A,
5.10%, 3/15/2009................................ 767,581
4,996,363 Empire Funding Home Loan Owner Trust,
Ser. 1998-1, Cl. A4,
6.64%, 12/25/2012............................... 4,894,063
202 First Plus Home Loan Trust,
Ser. 1997-2, Cl. A5,
6.82%, 4/10/2023................................ 202
1,194,102 Harley Davidson Eaglemark,
Ser. 1996-3, Cl. A2,
6.35%, 10/15/2002............................... 1,191,560
1,900,949 Heller Equipment Asset Receivables Trust,
Ser. 1997-1, Cl. A2,
6.39%, 5/25/2005................................ 1,893,716
6,300,000 MBNA Master Credit Card Trust,
Ser. 1996-J, Cl. A,
6.154%, 4/15/2000............................... 6,310,489
17,565,000 Saxon Asset Securities Trust,
Ser. 1993-3, Cl. AF4,
7.55%, 10/25/2026............................... 17,430,364
93,812 Sears Mtge. Securities Corp.,
Ser. 1999, Cl. PA19,
10.36%, 7/25/2018............................... 93,812
239,101 Xerox Rental Equipment Trust,
Ser. 1996-A,
6.20%, 12/25/2005............................... 238,578
--------------
Total Asset-Backed Securities
(cost $47,457,827).............................. 46,994,583
--------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 5.2%
2,766,727 Carco Auto Loan Master Trust,
Ser. 1997-1, Cl. A,
6.689%, 8/15/2004............................... 2,762,287
7,305,000 Commerce 2000,
Ser. 2000-FL1A, Cl. H,
7.298%, 4/16/2000............................... 7,131,506
7,435,000 Credit Suisse First Boston Mtge. Securities
Corp.,
Ser. 1998-FL2A, Cl. D,
7.471%, 4/15/2000............................... 7,409,959
8,510,000 DLJ Comml. Mtge. Corp.,
Ser. 1999-STF1, Cl. B1,
8.413%, 4/5/2000................................ 8,561,128
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS - continued
FHLMC:
$ 5,770,000 6.75%, 3/15/2007................................ $ 5,740,255
3,327,880 6.50%, 4/15/2018................................ 3,312,589
34,415 11.88%, 6/15/2013............................... 35,843
FNMA:
7,724,000 7.75%, 9/25/2022................................ 7,675,728
4,120,000 6.50%, 3/25/2019................................ 4,012,406
2,710,000 Midland Realty Acceptance Corp.,
Ser. 1996-C2, Cl. A2,
7.233%, 1/25/2029............................... 2,666,139
5,000,000 Paine Webber Mtge. Acceptance Corp. IV,
Ser. 1996-M1, Cl. E,
7.655%, 1/2/2012................................ 4,893,750
20,493,272 Potomac Gurnee Fin. Corp.,
Ser. 1, Cl. A,
6.887%, 12/21/2026.............................. 20,009,323
3,521 Salomon Brothers Mtge., Inc.,
10.25%, 4/1/2016................................ 3,521
3,806,003 Sasco Comml. Mtge. Trust,
Ser. 1998-C3A, Cl. F,
6.675%, 4/25/2000............................... 3,752,481
10,000,000 Structured Asset Securities Corp.,
Ser. 2000-1, Cl. A1,
6.403%, 4/25/2000............................... 10,000,000
--------------
Total Collateralized Mortgage Obligations
(cost $88,316,163).............................. 87,966,915
--------------
CORPORATE BONDS - 41.0%
Aerospace & Defense - 1.5%
10,000,000 Jet Equipment Trust,
9.41%, 6/15/2010................................ 10,718,570
6,000,000 Raytheon Co.,
6.00%, 12/15/2010............................... 5,131,992
10,480,000 United Technologies Corp.,
7.00%, 9/15/2006................................ 10,332,484
--------------
26,183,046
--------------
Air Freight & Couriers - 0.3%
5,000,000 Federal Express Corp.,
9.65%, 6/15/2012................................ 5,563,395
--------------
Banks - 4.1%
5,000,000 Bank of America Corp.,
Notes,
9.50%, 6/1/2004................................. 5,335,050
5,000,000 Capital One Finl. Corp.,
Notes,
7.25%, 5/1/2006................................. 4,805,785
7,500,000 Comerica, Inc.,
7.125%, 12/1/2013............................... 6,975,622
Fleet Finl. Group, Inc.:
8,540,000 6.88%, 1/15/2028................................ 7,500,033
6,200,000 6.38%, 5/15/2008................................ 5,719,859
4,000,000 HUBCO Capital Trust II,
7.65%, 6/15/2028................................ 3,641,200
59,000 Irving Bank Corp.,
Deb.,
8.50%, 6/1/2002................................. 59,012
7,925,000 Keycorp,
7.50%, 6/15/2006................................ 7,871,839
</TABLE>
52
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Banks - continued
Mellon Capital II:
$ 7,000,000 7.72%, 12/1/2026................................. $ 6,461,357
6,265,000 8.00%, 1/15/2027................................. 5,932,191
5,000,000 Paribas New York Branch,
6.95%, 7/22/2013................................. 4,584,070
11,000,000 PNC Institutional Capital Trust B,
8.315%, 5/15/2027................................ 10,594,133
--------------
69,480,151
--------------
Brokers - 2.3%
Lehman Brothers Holdings, Inc.:
5,000,000 6.00%, 2/26/2001................................. 4,939,620
12,000,000 7.50%, 9/1/2006.................................. 11,767,320
4,600,000 Merrill Lynch & Co., Inc.,
8.40%, 11/1/2019................................. 4,844,444
12,250,000 Morgan Stanley Dean Witter,
Sr. Notes,
5.25%, 2/8/2001.................................. 12,065,478
5,000,000 Paine Webber Group, Inc.,
Sr. Notes,
6.50%, 11/1/2005................................. 4,686,075
--------------
38,302,937
--------------
Building, Construction & Furnishings - 2.2%
12,165,000 Caterpillar, Inc.,
Deb.,
7.25%, 9/15/2009................................. 11,983,766
10,000,000 Masco Corp.,
Deb.,
7.75%, 8/1/2029.................................. 9,849,530
10,000,000 Owens Corning,
7.50%, 5/1/2005.................................. 9,403,180
6,500,000 Pulte Corp.,
9.50%, 4/1/2003.................................. 6,500,000
--------------
37,736,476
--------------
Cable/Other Video Distribution - 1.8%
6,910,000 Comcast Cable Communications,
Notes,
6.20%, 11/15/2008................................ 6,164,964
6,375,000 Tele-Communications, Inc., Sr. Notes,
7.25%, 8/1/2005.................................. 6,366,623
Time Warner, Inc.:
4,000,000 6.88%, 6/15/2018................................. 3,553,280
8,355,000 8.11%, 8/15/2006................................. 8,576,040
5,000,000 8.18%, 8/15/2007................................. 5,152,535
--------------
29,813,442
--------------
Chemical & Agricultural Products - 0.3%
5,000,000 Millennium America, Inc.,
7.00%, 11/15/2006 ............................... 4,558,685
--------------
Consumer Products & Services - 0.5%
8,750,000 Procter & Gamble Co.,
6.875%, 9/15/2009................................ 8,533,919
--------------
Diversified Companies - 0.3%
5,000,000 GTE Corp.,
9.375%, 12/1/2000................................ 5,078,185
--------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Electronic Equipment & Services - 0.3%
$ 5,000,000 Texas Instruments, Inc.,
Notes,
6.125%, 2/1/2006................................. $ 4,696,655
--------------
Finance & Insurance - 7.7%
8,365,000 Associates Corp., No. America,
Sr. Notes,
5.80%, 4/20/2004................................. 7,877,128
28,510,000 CIT Group, Inc.,
Sr. Notes,
7.125%, 10/15/2004............................... 28,146,241
10,000,000 Citigroup Capital II,
7.75%, 12/1/2036................................. 9,263,440
10,000,000 Duke Capital Corp.,
Sr. Notes,
7.25%, 10/1/2004................................. 9,888,740
8,000,000 Emerald Investor Grade CBO II, Ltd., Ser. 1A,
6.768%, 8/24/2000................................ 7,984,000
5,000,000 Ford Motor Credit Co.,
6.70%, 7/16/2004................................. 4,852,940
10,000,000 Heller Finl., Inc., Notes,
6.00%, 3/19/2004................................. 9,490,210
20,000,000 Household Fin. Corp., Notes,
7.20%, 7/15/2006................................. 19,523,320
10,000,000 Loews Corp., Sr. Notes,
7.00%, 10/15/2023................................ 8,608,400
4,000,000 Macsaver Finl. Svcs., Inc.,
Deb.,
7.60%, 8/1/2007.................................. 2,380,000
Private Export Funding Corp.:
5,000,000 6.90%, 1/31/2003................................. 4,979,540
10,000,000 7.30%, 1/31/2002................................. 10,055,930
7,676,562 Topaz 1997 1, Ltd.,
6.92%, 3/10/2007................................. 7,430,490
--------------
130,480,379
--------------
Food & Beverage Products - 0.4%
7,000,000 Coca Cola Enterprises, Inc.,
Notes,
7.875%, 2/1/2002................................. 7,058,597
--------------
Forest Products - 0.3%
5,391,000 Weyerhaeuser Co.,
6.95%, 8/1/2017.................................. 4,973,580
--------------
Gaming - 0.2%
4,000,000 Circus Circus Enterprises, Inc.,
7.625%, 7/15/2013................................ 3,180,000
--------------
Industrial Development/Pollution/
Resource Recovery - 0.6%
12,500,000 USA Wst. Service, Inc.,
7.125%, 10/1/2007................................ 10,905,363
--------------
Internet Software & Services - 1.0%
10,000,000 PSI Net, Inc.,
Sr. Notes,
11.00%, 8/1/2009................................. 9,750,000
7,500,000 Verio, Inc.,
10.625%, 11/15/2009.............................. 7,312,500
--------------
17,062,500
--------------
</TABLE>
53
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Lease Rental Obligations - 0.2%
$ 4,000,000 AMERICO,
Sr. Notes,
7.20%, 4/1/2002.................................. $ 3,879,592
--------------
Machinery - Diversified - 0.3%
5,000,000 Deere & Co.,
Deb.,
8.95%, 6/15/2019................................. 5,602,460
--------------
Metals & Mining - 0.2%
4,000,000 Freeport McMoran Resources Partners,
Sr. Notes,
7.00%, 2/15/2008................................. 3,742,168
--------------
Metal Products & Services - 0.7%
12,500,000 Aluminum Co. America, Inc.,
6.75%, 1/15/2028................................. 11,234,550
--------------
Oil/Energy - 2.8%
6,500,000 Atlantic Richfield Co.,
Deb.,
9.00%, 4/1/2021.................................. 7,487,740
10,135,000 Chevron Corp.,
6.625%, 10/1/2004................................ 9,934,651
15,000,000 Occidental Petroleum Corp.,
Sr. Notes,
8.45%, 2/15/2029................................. 15,215,955
10,000,000 Texaco Capital, Inc.,
5.50%, 1/15/2009................................. 8,841,510
6,000,000 Transocean Offshore, Inc.,
7.45%, 4/15/2027................................. 5,855,640
--------------
47,335,496
--------------
Paper & Packaging - 0.9%
10,000,000 Fort James Corp.,
Sr. Notes,
6.625%, 9/15/2004................................ 9,634,360
5,000,000 Georgia Pacific Corp.,
7.70%, 6/15/2015................................. 4,748,575
--------------
14,382,935
--------------
Real Estate - 0.7%
7,500,000 Duke Weeks Realty, Ltd.,
Sr. Notes,
7.75%, 11/15/2009................................ 7,230,547
5,000,000 Susa Partnership, LP,
Notes,
7.00%, 12/1/2007................................. 4,559,910
--------------
11,790,457
--------------
Retailing & Wholesale - 2.4%
3,500,000 Dayton Hudson Corp.,
Notes,
5.875%, 11/1/2008................................ 3,153,752
6,000,000 Dillards, Inc.,
Notes,
6.08%, 8/1/2000.................................. 5,954,160
16,250,000 Target Corp.,
Notes,
7.50%, 2/15/2005................................. 16,391,635
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Retailing & Wholesale - continued
$ 8,000,000 Wal-Mart Stores, Inc.,
Sr. Notes,
6.875%, 8/10/2009................................ $ 7,808,000
8,000,000 Westvaco Corp.,
7.75%, 2/15/2023................................. 7,881,528
--------------
41,189,075
--------------
Telecommunication Services & Equipment - 6.0%
5,000,000 Airtouch Communications, Inc.,
7.00%, 10/1/2003................................. 4,920,755
6,935,000 AT&T Corp.,
Notes,
6.50%, 3/15/2029................................. 6,013,394
2,427,810 Bellsouth Savings & Employee Stock,
MTN,
9.125%, 7/1/2003................................. 2,494,318
10,000,000 Metromedia Fiber Network, Inc.,
Sr. Notes, Ser. B,
10.00%, 11/15/2008............................... 9,550,000
10,500,000 Qwest Communications Intl., Inc.,
Sr. Notes,
7.50%, 11/1/2008................................. 10,206,042
10,000,000 Sprint Capital Corp.,
6.90%, 5/1/2019.................................. 9,161,700
5,000,000 Sprint Spectrum, LP,
11.00%, 8/15/2006................................ 5,389,295
U.S. West Capital Funding, Inc.:
10,000,000 6.25%, 7/15/2005................................. 9,403,620
5,000,000 6.38%, 7/15/2008................................. 4,583,235
17,830,000 U.S. West Communications, Inc.,
7.20%, 11/1/2004................................. 17,628,343
5,000,000 Williams Communications Group, Inc.,
Sr. Notes,
10.875%, 10/1/2009............................... 4,962,500
Worldcom, Inc.:
12,510,000 6.40%, 8/15/2005................................. 11,957,746
5,000,000 6.95%, 8/15/2028................................. 4,580,980
--------------
100,851,928
--------------
Transportation - 0.7%
1,409,713 Continental Airlines Pass Through Trust,
Ser. 1997-1, Cl. C,
7.42%, 4/1/2007.................................. 1,375,309
10,000,000 CSX Corp.,
8.10%, 9/15/2022................................. 9,988,940
--------------
11,364,249
--------------
Utilities - Electric - 2.3%
3,000,000 Carolina Power & Light Co.,
8.625%, 9/15/2021................................ 3,263,640
7,000,000 Central VT Pub. Svcs. Corp.,
8.125%, 8/1/2004................................. 6,738,249
10,000,000 Commonwealth Edison Co.,
Notes,
7.625%, 1/15/2007................................ 10,004,660
18,500,000 Niagara Mohawk Power Corp.,
Sr. Notes,
7.75%, 10/1/2008................................. 18,226,422
--------------
38,232,971
--------------
Total Corporate Bonds
(cost $719,932,116).............................. 693,213,191
--------------
</TABLE>
54
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MORTGAGE-BACKED SECURITIES - 12.8%
FHLMC:
$ 1,776,593 5.50%, 4/1/2006................................. $ 1,678,898
4,079,506 7.50%, 5/1/2009 - 10/1/2010..................... 4,081,891
2,544,164 8.00%, 7/1/2025................................. 2,558,666
8,250,000 7.00%, TBA...................................... 7,956,052
20,000,000 7.50%, TBA...................................... 19,618,600
FNMA:
8,181,496 6.50%, 8/1/2010 - 9/1/2010...................... 7,919,576
11,182,948 7.00%, 11/1/2026................................ 10,799,485
15,293,660 7.50%, 6/1/2002 - 5/1/2027...................... 15,132,164
8,267,786 8.00%, 11/1/2029................................ 8,322,601
10,000,000 8.00%, 12/1/2099................................ 10,028,100
GNMA:
25,626,032 6.00%, 4/15/2011 - 1/20/2029.................... 23,458,734
50,383,165 6.50%, 2/15/2009 - 4/20/2029.................... 47,698,200
19,480,866 7.00%, 2/15/2011 - 5/15/2027.................... 18,996,924
6,263,161 7.50%, 12/15/2025............................... 6,228,901
5,448,670 8.25%, 7/15/2008 - 5/15/2020.................... 5,550,429
319,897 8.50%, 7/15/2021................................ 328,480
5,639,176 9.00%, 5/15/2016 - 10/15/2021................... 5,880,874
1,198,128 9.50%, 8/15/2018 - 12/15/2020................... 1,261,506
37,087 11.50%, 5/15/2013 - 6/15/2013................... 41,033
19,100,000 8.00%, TBA (d).................................. 19,249,219
--------------
Total Mortgage-Backed Securities
(cost $221,160,493)............................. 216,790,333
--------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 7.0%
2,000,000 FFCB,
7.60%, 7/24/2006................................ 2,052,412
FHLB:
6,600,000 5.38%, 3/2/2001................................. 6,526,166
10,000,000 5.62%, 1/27/2003................................ 9,635,890
5,000,000 5.82%, 7/13/2005................................ 4,726,480
5,000,000 6.50%, 11/29/2005............................... 4,866,870
FHLMC:
5,000,000 6.24%, 10/6/2004................................ 4,842,400
34,325,000 6.88%, 1/15/2005................................ 34,055,549
Finl. Assistance Corp.:
17,500,000 8.80%, 6/10/2005................................ 18,715,620
5,000,000 9.38%, 7/21/2003................................ 5,324,530
FNMA:
9,045,000 5.13%, 2/13/2004................................ 8,454,253
20,099,000 6.38%, 1/16/2002 - 6/15/2009.................... 19,242,558
--------------
Total U.S. Government & Agency Obligations
(cost $120,316,217)............................. 118,442,728
--------------
U.S. TREASURY OBLIGATIONS - 19.8%
U.S. Treasury Bonds:
22,301,000 6.50%, 11/15/2026+.............................. 23,534,535
25,000,000 7.50%, 11/15/2016+.............................. 28,335,950
10,000,000 8.00%, 11/15/2021............................... 12,178,130
44,454,000 8.13%, 8/15/2019 - 8/15/2021+................... 54,568,136
15,000,000 8.75%, 5/15/2020................................ 19,359,375
8,500,000 8.88%, 2/15/2019................................ 10,994,223
15,000,000 9.00%, 11/15/2018+.............................. 19,570,320
15,000,000 11.25%, 2/15/2015+.............................. 22,185,945
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
U.S. TREASURY OBLIGATIONS - continued
U.S. Treasury Notes:
$77,338,000 5.75%, 10/31/2002 - 8/15/2003+.................. $ 75,908,542
23,940,000 6.13%, 12/31/2001+.............................. 23,775,412
5,000,000 6.25%, 2/28/2002................................ 4,975,000
19,035,000 7.00%, 7/15/2006................................ 19,701,225
10,000,000 7.25%, 5/15/2004................................ 10,312,500
5,050,000 7.50%, 11/15/2001............................... 5,127,331
4,000,000 7.88%, 11/15/2004............................... 4,237,500
--------------
Total U.S. Treasury Obligations
(cost $330,348,874)............................. 334,764,124
--------------
YANKEE OBLIGATIONS - 10.8%
Banks - 1.4%
2,000,000 Banco Santiago,
7.00%, 7/18/2007................................ 1,808,970
8,000,000 Korea Dev. Bank,
Notes,
7.25%, 5/15/2006................................ 7,588,000
5,000,000 Santander Fin. Issuances,
6.375%, 2/15/2011............................... 4,437,310
5,000,000 Svenska Handelsbanken,
8.35%, 7/15/2004................................ 5,142,620
5,000,000 Westpac Banking Corp.,
Sub. Deb.,
9.125%, 8/15/2001............................... 5,093,420
--------------
24,070,320
--------------
Building, Construction & Furnishings - 0.6%
5,000,000 Celulosa Arauco Y Constitucion,
7.20%, 9/15/2009................................ 4,555,255
5,000,000 Cemex SA,
9.625%, 10/1/2009............................... 5,126,000
--------------
9,681,255
--------------
Diversified Companies - 0.6%
10,000,000 Tyco Intl. Group SA,
5.875%, 11/1/2004............................... 9,294,470
--------------
Finance & Insurance - 1.3%
6,000,000 FBG Fin., Ltd., Notes,
6.75%, 11/15/2005............................... 5,798,154
11,500,000 Fletcher Challenge Capital Canada, Inc.,
7.875%, 3/24/2017............................... 10,769,037
5,000,000 Ford Capital BV,
9.875%, 5/15/2002............................... 5,213,665
--------------
21,780,856
--------------
Government - 2.2%
10,000,000 Argentina,
Ser. B,
0.00%, 4/15/2001 (b)............................ 9,200,000
10,000,000 Manitoba Province, Canada,
Deb., Ser. CQ,
8.00%, 4/15/2002................................ 10,134,400
Quebec Province, Canada:
5,250,000 5.75%, 2/15/2009................................ 4,686,481
8,200,000 8.80%, 4/15/2003................................ 8,523,965
5,000,000 United Mexican States,
9.875%, 2/1/2010................................ 5,300,000
--------------
37,844,846
--------------
</TABLE>
55
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - continued
Leisure & Tourism - 0.5%
$10,060,000 Royal Caribbean Cruises, Ltd.,
7.50%, 10/15/2027............................... $ 9,094,622
--------------
Metals & Mining - 0.5%
7,854,000 Barrick Gold Fin., Inc.,
7.50%, 5/1/2007................................. 7,561,321
--------------
Oil/Energy - 1.0%
15,000,000 Petro Canada, Ltd.,
8.60%, 1/15/2010................................ 16,621,200
--------------
Telecommunication Services & Equipment - 1.8%
30,085,000 Vodafone Airtouch, PLC,
7.75%, 2/15/2010................................ 30,374,809
--------------
Utilities - Electric - 0.9%
8,000,000 Korea Electric Power Corp.,
8.25%, 3/15/2005................................ 7,943,937
7,500,000 Ontario Hydro Corp.,
7.45%, 3/31/2013................................ 7,445,175
--------------
15,389,112
--------------
Total Yankee Obligations
(cost $181,697,756)............................. 181,712,811
--------------
COMMERCIAL PAPER - 14.6%
Diversified Companies - 4.1%
Tyco Intl. Group SA:
50,000,000 6.10%, 4/3/2000*................................ 50,000,000
19,311,000 6.20%, 4/19/2000................................ 19,257,788
--------------
69,257,788
--------------
Finance & Insurance - 10.4%
50,000,000 Conseco, Inc.,
6.05%, 4/3/2000*................................ 50,000,000
26,628,000 Dominion Capital,
6.05%, 4/3/2000*................................ 26,628,000
50,000,000 Glencore Funding, Inc.,
6.03%, 4/3/2000*................................ 50,000,000
50,000,000 UNUM Corp.,
6.10%, 4/3/2000*................................ 50,000,000
--------------
176,628,000
--------------
Total Commercial Paper
(cost $245,885,788)............................. 245,885,788
--------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
REPURCHASE AGREEMENTS - 2.4%
$34,292,564 Dresdner Bank AG,
dated 03/31/2000, 5.90%,
maturing 4/3/2000,
maturity value $34,309,425
(cost $34,292,564)*............................. $ 34,292,564
6,172,000 State Street Bank & Trust Co.,
dated 03/31/2000, 6.05%,
maturing 4/3/2000,
maturity value $6,175,112
(cost $6,172,000) (c)........................... 6,172,000
--------------
40,464,564
--------------
<CAPTION>
Shares Value
<C> <S> <C>
MUTUAL FUND SHARES - 0.0%
228,066 Valiant General Fund
(cost $228,066)................................. 228,066
--------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $1,999,807,864)................... 116.5% 1,970,323,103
Other Assets and Liabilities - net....... (16.5) (279,752,133)
----- --------------
Net Assets............................... 100.0% $1,690,570,970
===== ==============
</TABLE>
* Collateralized by $35,521,000 U.S. Treasury Notes, 5.50% - 6.50%, 8/15/2004 -
8/15/2009; value including accrued interest--$34,980,779.
See Combined Notes to Schedule of Investments.
56
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 96.1%
Alabama - 2.9%
$18,200,000 Mobile, AL Arpt. Auth. RRB,
Ser. A,
6.375%, 10/1/2014................................. $ 19,162,598
------------
Alaska - 0.6%
3,750,000 Alaska IDA RB, Ser. A,
5.70%, 4/1/2011,
(Insd. by MBIA)................................... 3,808,013
------------
Arizona - 0.6%
3,525,000 Phoenix, AZ SFHRB, Refunding,
Ser. A,
6.60%, 12/1/2029.................................. 3,689,300
------------
Arkansas - 0.7%
4,110,000 Arkansas Student Loan Auth.,
Sub. Ser. B,
7.25%, 6/1/2009................................... 4,502,628
------------
California - 3.8%
California HFA:
2,335,000 Ser. A,
7.55%, 8/1/2003................................... 2,487,849
10,000,000 Ser. L,
0.00%, 8/1/2027 (b)............................... 2,184,200
10,000,000 California Student Loan RB,
Ser. D,
6.50%, 6/1/2005................................... 10,289,700
8,950,000 Central Valley, CA RB,
Cogeneration Proj.,
6.00%, 7/1/2009................................... 9,093,737
940,000 Delta Cnty., CA Home Mtge. Fin.,
Ser. A,
6.70%, 6/1/2024,
(Insd. by MBIA)................................... 994,219
------------
25,049,705
------------
Colorado - 3.4%
4,000,000 Arapahoe Cnty., CO Capital Impt.
Hwy. RB, Ser. E470, Prerefunded,
6.90%, 8/31/2015.................................. 4,472,760
Colorado HFA, SFHRB:
2,250,000 Sr. Ser. C2,
6.875%, 11/1/2028................................. 2,363,017
Sr. Ser. C3:
1,000,000 4.70%, 10/1/2022.................................. 997,250
1,000,000 6.75%, 5/1/2017................................... 1,046,300
Denver, CO City & Cnty.:
4,500,000 Arpt. RB, Ser. A,
8.25%, 11/15/2012................................. 4,667,580
1,000,000 Sch. RB, Ser. B,
6.50%, 12/1/2002,
(Insd. by MBIA)................................... 1,037,380
3,025,000 Spl. Fac. RB, Rental Car Proj.,
Ser. A,
6.00%, 1/1/2011,
(Insd. by MBIA)................................... 3,179,729
3,485,000 Larimer Cnty., CO GO,
Sch. Dist. No. R1,
8.50%, 12/15/2008,
(Insd. by MBIA)................................... 4,309,203
------------
22,073,219
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Connecticut - 0.7%
Connecticut Dev. Auth., Mtge. RB
Church Homes, Inc. Hlth. Care Proj.:
$ 340,000 4.65%, 4/1/2000..................................... $ 340,000
425,000 4.90%, 4/1/2002..................................... 420,312
925,000 5.00%, 4/1/2003..................................... 907,897
1,220,000 5.40%, 4/1/2007..................................... 1,168,114
2,035,000 5.70%, 4/1/2012..................................... 1,818,781
------------
4,655,104
------------
Delaware - 0.5%
3,000,000 Delaware Solid Wst. Sys. RB,
Ser. A,
6.75%, 7/1/2003.................................... 3,073,530
------------
Florida - 1.2%
1,080,000 Halifax Hosp. Med. Ctr. FL Hlth.,
Ser. A,
4.60%, 4/1/2008,
(Insd. by ACA)..................................... 990,446
Palm Beach Cnty., FL Hlth. Facs. Auth. RB:
Abbey DelRay So. Proj.:
700,000 4.50%, 10/1/2000................................... 698,418
750,000 4.65%, 10/1/2001................................... 743,078
805,000 4.80%, 10/1/2002................................... 792,885
775,000 5.00%, 10/1/2003................................... 757,764
850,000 5.00%, 10/1/2004................................... 822,196
930,000 5.10%, 10/1/2005................................... 894,093
500,000 5.30%, 10/1/2007................................... 475,430
Waterford Proj.:
675,000 4.50%, 10/1/2000................................... 673,475
725,000 4.65%, 10/1/2001................................... 718,308
------------
7,566,093
------------
Georgia - 0.2%
1,500,000 Coffee Cnty., GA RB,
6.75%, 12/1/2026................................... 1,367,655
------------
Illinois - 5.2%
1,770,000 Chicago, IL SFHRB,
Ser. A,
4.70%, 10/1/2017................................... 1,741,184
Illinois Dev. Fin. Auth. PCRB:
4,000,000 Cmnwlth. Ed.,
5.30%, 1/15/2004................................... 4,033,760
400,000 Ser. A,
7.60%, 3/1/2014.................................... 409,076
Illinois Dev. Fin. Auth. RB:
2,510,000 Capital Appreciation Sch. Dist. Lockport,
5.00%, 7/1/2006.................................... 2,327,398
Community Rehab. Providers,
Ser. A:
2,540,000 5.70%, 7/1/2007.................................... 2,456,104
3,490,000 5.80%, 7/1/2008.................................... 3,385,195
4,685,000 Illinois Hlth. Facs. Auth. RB, Mercy Hosp.,
9.996%, 1/1/2015................................... 6,212,591
12,500,000 Illinois Sales Tax RB, Ser. Q,
6.00%, 6/15/2012,
(Insd. by MBIA/IBC)................................ 13,323,125
------------
33,888,433
------------
</TABLE>
57
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Indiana - 1.7%
$ 1,000,000 Indiana Hlth. Facs. Hosp. RB, Charity Obl. Group,
Ser. D,
5.50%, 11/15/2008................................. $ 1,006,750
885,000 Indiana SFHRRB, Ser. B1
7.55%, 7/1/2010,
(Insd. by FHA).................................... 906,886
9,485,000 Sullivan PCRB, Ser. 1993-C,
5.95%, 5/1/2009................................... 9,425,434
------------
11,339,070
------------
Kansas - 2.5%
5,000,000 Burlington, KS Env. Impt. RB,
4.50%, 10/1/2017.................................. 4,846,550
Sedgwick & Shawnee Cnty., KS SFHRB:
1,810,000 Ser. A, AMT,
6.70%, 6/1/2029................................... 1,988,647
3,635,000 Ser. A1,
5.15%, 12/1/2013.................................. 3,572,151
5,840,000 Wichita, KS Hosp. RB, Ser. XI,
6.75%, 11/15/2014................................. 6,206,810
------------
16,614,158
------------
Kentucky - 0.8%
5,000,000 Ashland, KY PCRB,
Ashland Oil, Inc. Proj.,
6.65%, 8/1/2009................................... 5,181,550
------------
Louisiana - 1.0%
East Baton Rouge, LA Sales Tax RB:
1,760,000 8.00%, 2/1/2002, (Insd. by FGIC).................. 1,858,402
1,920,000 8.00%, 2/1/2003, (Insd. by FGIC).................. 2,074,944
Jefferson Parish, LA Sinking Fund Mtge. RRB,
Ser. B1:
750,000 5.00%, 12/1/2012.................................. 735,885
2,000,000 6.75%, 6/1/2030................................... 2,103,620
------------
6,772,851
------------
Maryland - 0.4%
2,670,000 Frederick Cnty., MD Spl. Tax RB, Urbana CDA,
6.25%, 7/1/2010................................... 2,528,624
------------
Massachusetts - 4.6%
5,000,000 Boston, MA IDA, Pilot Seafood Proj.,
0.00%, 4/1/2030, (b) ............................. 5,041,350
8,155,000 Massachusetts Edl. Fin. Auth.,
Issue G, Ser. A,
5.50%, 12/1/2007.................................. 8,194,797
Massachusetts HFA RB:
6,095,000 Hsg. Proj., Ser. A,
5.95%, 10/1/2008,
(Insd. by AMBAC).................................. 6,248,228
2,000,000 Residential Dev., Refunding,
6.35%, 5/15/2003.................................. 2,076,440
8,500,000 Massachusetts Port Auth. RB,
Ser. 1999A,
0.00%, 10/1/2029 (b).............................. 8,477,475
------------
30,038,290
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Michigan - 2.3%
$ 7,000,000 Dickinson Cnty., MI EDA RRB,
Dev. Corp. Solid Wst. Disposal,
6.55%, 3/1/2007................................... $ 7,149,310
5,715,000 Dickinson Cnty., MI
Healthcare RRB,
5.50%, 11/1/2013.................................. 4,892,554
3,000,000 Michigan Bldg. Auth. RRB,
Facs. Program, Ser. 1,
4.625%, 10/15/2021................................ 2,843,130
------------
14,884,994
------------
Minnesota - 0.1%
Minnesota HFA, Ser. C:
480,000 6.80%, 7/1/2011................................... 490,272
385,000 7.10%, 7/1/2011, (Insd. by FHA)................... 395,607
------------
885,879
------------
Mississipi - 3.4%
10,750,000 Mississippi Business Fin. Corp.
Solid Wst. Disposal RB,
Phosphates Corp. Proj.,
5.80%, 3/1/2022................................... 9,223,392
4,855,000 Mississippi Gulf Coast Regl. Wst. Wtr.
Auth. RB, Wst. Wtr. Treatment,
ETM,
7.00%, 7/1/2012................................... 5,502,560
7,230,000 Mississippi Home Corp. SFHRB, Refunding,
Ser. H,
6.70%, 12/1/2029.................................. 7,390,289
------------
22,116,241
------------
Missouri - 4.4%
Missouri Hsg. Dev. Commission Mtge. RB:
2,340,000 Ser. B2, AMT,
6.40%, 9/1/2029................................... 2,436,665
5,145,000 Ser. E1, Prerefunded, AMT,
6.45%, 9/1/2029................................... 5,356,923
Missouri Hsg. Dev. Commission Mtge. SFHRB:
2,500,000 Ser. A1,
7.50%, 3/1/2031................................... 2,743,225
8,500,000 Ser. C1,
6.95%, 9/1/2030................................... 9,154,415
3,000,000 Missouri Office Bldg. Spl. GO,
6.00%, 12/1/2002.................................. 3,064,500
St. Louis Cnty., MO MHRB:
1,555,000 Westbrooke Apts., Ser. C,
0.00%, 11/15/2029 (b)............................. 1,549,853
4,570,000 Westbrooke Village West, Ser. B,
0.00%, 11/15/2029 (b)............................. 4,554,873
------------
28,860,454
------------
Montana - 0.4%
2,500,000 Montana Board Hsg. SFHRB,
Ser. A2,
5.70%, 12/1/2031.................................. 2,511,575
------------
Nevada - 0.0%
270,000 Nevada Hsg. Division SFHRB,
Ser. A1,
7.55%, 10/1/2010.................................. 274,180
------------
</TABLE>
58
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New Hampshire - 2.2%
$13,000,000 New Hampshire Business Fin. Auth. PCRB, United
Illumination Proj., Refunding,
4.55%, 7/1/2027................................... $ 12,333,880
2,250,000 New Hampshire HFA RB, Ser. D,
6.15%, 7/1/2029................................... 2,309,332
------------
14,643,212
------------
New Jersey - 5.9%
Cherry Hill Township, NJ:
705,000 Prerefunded,
5.80%, 6/1/2004................................... 733,306
295,000 Unrefunded,
5.80%, 6/1/2004................................... 306,257
2,000,000 Howell Township, NJ GO,
6.40%, 1/1/2003,
(Insd. by FGIC)................................... 2,085,940
New Jersey EDA RB:
16,525,000 Continental Airlines, Inc. Proj.,
6.625%, 9/15/2012,
(Insd. by FHA).................................... 16,749,575
900,000 Keswick Pines Proj.,
5.60%, 1/1/2012................................... 782,802
3,380,000 The Evergreens,
5.875%, 10/1/2012................................. 3,135,626
New Jersey EDA, Franciscan Oaks Proj.,
Franciscan Oaks Proj.:
3,620,000 5.60%, 10/1/2012.................................. 3,220,605
4,000,000 5.70%, 10/1/2017.................................. 3,323,320
New Jersey Hsg. & Mtge. Fin. Agcy. RB,
Home Buyer, AMT:
3,650,000 5.10%, 10/1/2006,
(Insd. by MBIA)................................... 3,624,523
1,650,000 Ser. 1,
6.45%, 11/1/2007.................................. 1,714,680
New Jersey Hwy. Garden St.:
125,000 Prerefunded,
6.25%, 1/1/2014................................... 130,513
875,000 Unrefunded,
6.25%, 1/1/2014................................... 908,031
500,000 New Jersey Turnpike Auth. RB,
Ser. C,
6.30%, 1/1/2004................................... 511,740
160,000 New Jersey Wst. Wtr. Treatment
Trust Loan,
6.80%, 6/15/2002.................................. 161,606
1,000,000 Rutgers Univ., NJ RB, Ser. R,
6.40%, 5/1/2008................................... 1,047,460
------------
38,435,984
------------
New Mexico - 0.3%
1,600,000 New Mexico HFA SFHRB, Ser. A2, AMT,
7.10%, 9/1/2030................................... 1,737,664
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New York - 15.5%
$ 7,000,000 Metropolitan Trans. Auth., NY Trans.
Facs., Ser. A,
Prerefunded,
6.10%, 7/1/2026,
(Insd. by FSA).................................... $ 7,534,660
8,000,000 New York City Muni. Wtr. Fin. Auth.,
Ser. B, Prerefunded,
6.25%, 6/15/2020.................................. 8,630,400
13,000,000 New York Dormitory Auth. RB, Ser. A,
5.50%, 5/15/2013.................................. 13,120,250
New York Env. Facs.:
800,000 Ser. A, Prerefunded,
7.05%, 6/15/2004.................................. 839,920
200,000 Ser. A, Unrefunded,
7.05%, 6/15/2004.................................. 209,288
1,000,000 New York Local Assistance Corp. RB,
Ser. A, Prerefunded,
7.125%, 4/1/2011.................................. 1,047,540
New York, NY GO:
14,490,000 Ser. 1992-B,
7.50%, 2/1/2006................................... 15,316,799
Ser. A:
10,535,000 5.875%, 8/1/2003.................................. 10,839,988
2,500,000 6.25%, 8/1/2010................................... 2,653,075
3,000,000 6.25%, 8/1/2011................................... 3,178,680
5,795,000 Ser. C,
6.50%, 2/1/2008................................... 6,262,541
2,005,000 Ser. F,
5.90%, 8/1/2009................................... 2,090,233
6,000,000 Ser. I,
6.50%, 3/15/2005.................................. 6,360,900
6,045,000 New York Urban Dev. Corp. RB,
5.75%, 7/1/2009................................... 6,293,994
6,000,000 Port Auth. of NY & NJ RB, Spl. Obl.
6.75%, 10/1/2011.................................. 6,132,120
Tsasc, Inc., NY RB,
Ser. 1:
3,200,000 5.50%, 7/15/2013.................................. 3,114,496
2,080,000 5.60%, 7/15/2014.................................. 2,063,672
2,900,000 5.70%, 7/15/2014.................................. 2,880,135
2,615,000 5.75%, 7/15/2015.................................. 2,606,841
------------
101,175,532
------------
North Carolina - 0.2%
North Carolina Med. Care Commission Hosp. RB
Transylvania Community Hosp., Inc.:
135,000 4.60%, 10/1/2000.................................. 134,719
140,000 4.70%, 10/1/2001.................................. 138,697
155,000 4.80%, 10/1/2002.................................. 152,491
155,000 4.90%, 10/1/2003.................................. 150,962
155,000 5.00%, 10/1/2004.................................. 149,634
175,000 5.00%, 10/1/2005.................................. 167,006
185,000 5.05%, 10/1/2006.................................. 174,845
190,000 5.15%, 10/1/2007.................................. 178,383
------------
1,246,737
------------
</TABLE>
59
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
North Dakota - 1.0%
$ 2,650,000 North Dakota HFA RB, Ser. A,
5.70%, 7/1/2030................................... $ 2,658,506
4,335,000 Oakes, ND IDA RB, Omniquip Intl., Inc. Proj.,
5.80%, 2/1/2014................................... 4,037,966
------------
6,696,472
------------
Ohio - 0.3%
Franklin Cnty., OH Hlth. Care Facs. RB
Friendship Vlg. of Dublin Proj.:
505,000 5.00%, 11/1/2005.................................. 482,558
380,000 5.05%, 11/1/2006.................................. 359,712
225,000 5.10%, 11/1/2007.................................. 210,944
100,000 5.15%, 11/1/2008.................................. 92,415
1,250,000 5.50%, 11/1/2016.................................. 1,081,412
------------
2,227,041
------------
Oklahoma - 1.7%
Oklahoma HFA SFHRB Mtge. Homeownership Loan:
4,100,000 Ser. A2,
6.40%, 9/1/2030................................... 4,233,045
1,825,000 Ser. D1,
7.10%, 9/1/2016................................... 1,970,763
5,000,000 Tulsa Cnty., OK Indl. Auth. Hlth. RB,
St. Francis Hosp.,
Ser. B,
5.15%, 12/15/2018................................. 4,936,050
------------
11,139,858
------------
Oregon - 0.3%
2,300,000 Oregon Hsg. & CDA RB,
Ser. M,
5.70%, 7/1/2022................................... 2,302,553
------------
Pennsylvania - 5.1%
1,405,000 Beaver Falls, PA Muni. Auth.
RB, Spl. Obl.,
9.125%, 8/1/2005.................................. 1,671,487
Dauphin Cnty., PA Gen. Auth. RB, Office & Parking,
Forum Place
Ser. A:
7,865,000 5.50%, 1/15/2008.................................. 7,504,783
3,950,000 5.75%, 1/15/2010.................................. 3,795,397
235,000 Delaware River Port Auth. PA & NJ, Delaware River
Bridges RB,
6.50%, 1/15/2011.................................. 236,147
4,000,000 Montgomery Cnty., PA Higher Ed., Beaver College,
5.80%, 4/1/2016................................... 4,049,480
315,000 Northampton Cnty., PA IDA, Comml. Dev. Strawbridge
Proj.,
7.20%, 12/15/2001................................. 324,834
8,000,000 Pennsylvania Convention Ctr. RB,
Ser. A,
6.75%, 9/1/2019,
(Insd. by MBIA/IBC)............................... 8,564,960
Pennsylvania EDA, Colver Proj.,
Ser. D:
2,000,000 7.125%, 12/1/2015................................. 2,078,540
2,500,000 7.15%, 12/1/2018.................................. 2,561,400
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
$ 730,000 Pennsylvania Higher Edl. RB,
Ser. O,
5.00%, 6/15/2009.................................. $ 723,576
60,000 Philadelphia, PA Hosp. & Higher Ed. Facs. RB, Ed.
Facs. Auth.,
6.75%, 8/15/2001.................................. 60,054
1,795,000 West View, PA Muni. Auth. Spl. GO,
9.20%, 5/15/2003.................................. 1,890,763
------------
33,461,421
------------
South Dakota - 0.9%
5,000,000 Heartland Consumer Pwr. Dist. RB, SD Elec.,
7.00%, 1/1/2016................................... 5,596,750
------------
Tennessee - 2.0%
Shelby Cnty., TN Hlth. Edl. & Hsg. RB St. Judes
Childrens Research:
1,000,000 4.65%, 7/1/2004................................... 978,080
12,000,000 6.00%, 7/1/2014................................... 12,395,400
------------
13,373,480
------------
Texas - 11.1%
Alliance Arpt. Auth., Inc., TX Spl. American
Airlines, Inc. Proj.:
9,915,000 7.00%, 12/1/2011.................................. 10,745,976
3,000,000 7.50%, 12/1/2029.................................. 3,063,180
3,740,000 Grand Prairie, TX Metropolitan Utility,
6.50%, 4/1/2012................................... 3,904,149
3,400,000 Gulf Coast Wst. Disposal Auth., TX RB, Champion
Intl. Corp.,
7.45%, 5/1/2026................................... 3,525,970
Harris Cnty., TX Hlth. Facs. Dev. RB
Christus Hlth., Ser. A:
8,145,000 5.25%, 7/1/2007................................... 8,188,169
4,000,000 5.50%, 7/1/2009................................... 4,075,120
2,000,000 5.50%, 7/1/2010................................... 2,034,300
10,790,000 5.625%, 7/1/2011.................................. 11,029,322
North Central TX, Hlth. Facs. Dev.:
3,910,000 TX Hlth. Resources Sys., Ser. B,
5.75%, 2/15/2009,
(Insd. by MBIA)................................... 4,046,967
4,595,000 5.75%, 2/15/2012,
(Insd. by MBIA)................................... 4,712,954
1,300,000 Retama, TX Dev. Corp. Spl. Facs. RB, Retama
Racetrack, Prerefunded,
8.75%, 12/15/2018................................. 1,543,997
Texas Dept. Hsg. & Community Affairs:
2,265,000 MHRB, Ser. A,
5.55%, 1/1/2005................................... 2,283,573
1,915,000 SFHRB, Ser. E,
5.00%, 3/1/2016,
(Insd. by MBIA)................................... 1,868,121
5,000,000 Texas GO, Ser. B,
5.25%, 12/1/2030.................................. 4,923,950
5,440,000 Texas Turnpike Auth. RB, Jr. Lien-Houston Shipping
Channel, Prerefunded,
12.625%, 1/1/2020................................. 6,433,942
------------
72,379,690
------------
</TABLE>
60
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments (continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Utah - 0.2%
Utah HFA RB:
$ 485,000 Ser. D-1, Class I,
5.65%, 7/1/2016................................... $ 483,831
510,000 SFHRB, Ser. G1,
7.35%, 7/1/2018................................... 527,202
------------
1,011,033
------------
Virginia - 1.7%
2,000,000 Chesapeake, VA Redev. & Hsg. Auth. MHRB, Ser. A,
6.20%, 4/1/2028................................... 1,816,040
2,000,000 Metropolitan Washington DC Arpt. Auth. RB, Ser. A,
7.25%, 10/1/2010.................................. 2,065,460
1,100,000 Newport News, VA GO, Ser. A,
6.50%, 11/1/2006.................................. 1,130,954
5,985,000 Riverside, VA Regl. Jail Auth. RB,
5.875%, 7/1/2014,
(Insd. by MBIA)................................... 6,160,361
------------
11,172,815
------------
Washington - 2.0%
12,000,000 Washington GO, Ser. B & AT7,
6.40%, 6/1/2017................................... 13,225,560
------------
Wisconsin - 1.9%
Wisconsin Hlth. & Edl. Facs. RB:
6,865,000 Med. College, Inc.,
5.95%, 12/1/2015.................................. 6,943,192
5,300,000 Mercy Hosp. of Janesville, Inc.,
6.50%, 8/15/2011.................................. 5,385,913
------------
12,329,105
------------
U. S. Virgin Islands - 2.4%
Virgin Islands Pub. Fin. Auth. RB:
7,070,000 Ser. A,
5.20%, 10/1/2009.................................. 6,738,700
Ser. C:
3,000,000 5.50%, 10/1/2007.................................. 2,976,420
3,855,000 5.50%, 10/1/2008.................................. 3,811,284
2,000,000 Virgin Islands Wtr. & Pwr. Auth. RB, Ser. B,
7.60%, 1/1/2012................................... 2,164,820
------------
15,691,224
------------
Total Municipal Obligations
(cost $635,222,094)............................... 628,690,275
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
MUTUAL FUND SHARES - 6.0%
29,614,000 Federated Municipal Obligations Fund............... $ 29,614,000
9,344,000 Federated Tax Free Obligations Fund................ 9,344,000
------------
Total Mutual Fund Shares
(cost $38,958,000)................................ 38,958,000
------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
Total Investments -
(cost $674,180,094).......................... 102.1% 667,648,275
Other Assets and Liabilities - net............ (2.1) (13,817,629)
----- ------------
Net Assets.................................... 100.0% $653,830,646
===== ============
</TABLE>
See Combined Notes to Schedules of Investments.
61
<PAGE>
EVERGREEN
Select International Bond Fund
Schedule of Investments
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - 3.7%
United States - 3.7%
$2,247,000 Household Fin. Corp.,
5.13%, 6/24/2009
(cost $2,149,942) ................................... $ 1,984,490
-----------
FOREIGN BONDS (NON U.S. DOLLARS) - 85.8%
Belgium - 4.3%
2,680,000 Belgium,
3.75%, 3/28/2009..................................... 2,285,067
-----------
Denmark - 4.3%
Denmark:
5,800,000 5.00%, 8/15/2005..................................... 735,070
DKK
11,300,000 7.00%, 11/15/2007.................................... 1,584,781
DKK -----------
2,319,851
-----------
France - 7.6%
10,600,000 Credit Local De France,
FRF 5.38%, 1/13/2004..................................... 1,559,719
France:
600,000 4.00%, 10/25/2009.................................... 518,957
EUR
2,105,000 5.50%, 4/25/2029..................................... 1,964,042
EUR -----------
4,042,718
-----------
Germany - 14.2%
1,950,000 Bayer Hypo Vereinsbank,
EUR 4.75%, 9/19/2007..................................... 1,781,330
Germany:
2,150,000 4.50%, 7/4/2009...................................... 1,951,748
EUR
455,000 4.75%, 7/4/2000...................................... 382,789
EUR
100,000 6.00%, 7/4/2007...................................... 100,165
EUR
Kreditanstalt Fur Wiederaufbau:
1,300,000 5.25%, 1/4/2010 ..................................... 1,210,147
EUR
1,003,875 5.50%, 3/12/2007 .................................... 970,945
EUR
2,400,000 Oesterreich Kontrollbank,
DEM 5.75%, 9/12/2007..................................... 1,194,260
-----------
7,591,384
-----------
Italy - 9.2%
Italy:
500,000 5.25%, 11/1/2029..................................... 441,000
EUR
4,600,000 5.75%, 7/10/2007..................................... 4,471,241
EUR -----------
4,912,241
-----------
Japan - 2.8%
1,710,000 Nippon Telegraph & Telephone Co.,
EUR 3.75%, 5/15/2006..................................... 1,492,581
-----------
Mexico - 0.4%
125,000 United Mexican States,
GBP 8.75%, 5/30/2002..................................... 198,955
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
FOREIGN BONDS (NON U.S. DOLLARS) - continued
Netherlands - 20.7%
$1,000,000 Agbar Intl. BV,
EUR 6.00%, 11/12/2009................................... $ 960,327
9,800,000 Depfa Fin. NV,
FRF 6.38%, 11/18/2008................................... 1,488,919
3,150,000 DSL Fin. NV,
DEM 5.00%, 7/23/2004.................................... 1,539,090
7,000,000 Helaba Fin. BV,
SEK 3.88%, 3/3/2004..................................... 750,261
2,100,000 Netherlands:
EUR 3.75%, 7/15/2009.................................... 1,786,634
1,560,000 5.50%, 1/15/2028.................................... 1,466,124
EUR
748,737 6.50%, 4/15/2003.................................... 751,008
EUR
2,440,000 Siemens Financier,
EUR 5.50%, 3/12/2007.................................... 2,329,384
-----------
11,071,747
-----------
Norway - 2.9%
13,000,000 Eksportfinans AS,
SEK 6.88%, 2/9/2004..................................... 1,553,832
-----------
Portugal - 2.7%
1,500,000 Electridade De Portugal,
EUR 6.00%, 10/29/2009................................... 1,441,567
-----------
Slovakia - 0.5%
550,000 Vodohospodarska Vystavba,
DEM 8.00%, 7/9/2001..................................... 273,905
-----------
Spain - 6.4%
Spain:
600,000 4.50%, 7/30/2004.................................... 563,222
EUR
1,380,000 5.15%, 7/30/2009.................................... 1,297,418
EUR
1,596,000 6.00%, 1/31/2001.................................... 1,561,183
EUR -----------
3,421,823
-----------
Supernational - 2.4%
IBRD World Bank:
760,000 5.38%, 11/6/2003.................................... 347,740
NZD
1,860,000 7.25%, 5/27/2003.................................... 911,656
NZD -----------
1,259,396
-----------
Sweden - 4.2%
2,425,000 Sweden,
EUR 5.00%, 1/28/2009.................................... 2,255,747
-----------
United Kingdom - 3.2%
1,175,000 Gallaher Group PLC,
DEM 5.88%, 8/6/2008..................................... 535,313
1,390,000 Lloyds Bank, PLC,
EUR 4.75%, 3/18/2011.................................... 1,189,218
-----------
1,724,531
-----------
Total Foreign Bonds (Non U.S. Dollars)
(cost $51,434,308).................................. 45,845,345
-----------
</TABLE>
62
<PAGE>
EVERGREEN
Select International Bond Fund
Schedule of Investments (continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - 7.4%
Argentina - 1.1%
$ 665,000 Argentina
0.00%, 10/11/2001
(Eff. Yield 9.254%), (b) ............................ $ 578,550
-----------
Cayman Island - 0.7%
400,000 Hutchison Whampoa Fin.,
6.95%, 8/1/2007...................................... 385,544
-----------
Kazakhstan - 0.4%
200,000 Kazakhstan,
8.38%, 10/2/2002..................................... 191,500
-----------
Korea - 0.9%
200,000 Export-Import Bank Korea,
7.13%, 9/20/2001..................................... 196,925
300,000 SK Telecom, Ltd.,
7.75%, 4/29/2004..................................... 292,969
-----------
489,894
-----------
Lithuania - 1.0%
525,000 Lithuania,
7.13%, 7/22/2002..................................... 506,338
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - continued
Netherlands - 1.5%
$ 500,000 Rothmans Nederland Holdings BV,
6.50%, 5/6/2003...................................... $ 475,958
350,000 TPSA Fin. BV,
7.13%, 12/10/2003.................................... 335,771
-----------
811,729
-----------
United Kingdom - 1.8%
500,000 Abbey Natl. PLC,
6.69%, 10/17/2005.................................... 479,630
500,000 British Telecom PLC,
7.00%, 5/23/2007..................................... 490,390
-----------
970,020
-----------
Total Yankee Obligations
(cost $4,029,171).................................... 3,933,575
-----------
</TABLE>
<TABLE>
<S> <C> <C>
Total Investments -
(cost $57,613,421)................................... 96.9% 51,763,410
Other Assets and
Liabilities - net.................................... 3.1 1,630,848
----- -----------
Net Assets............................................ 100.0% $53,394,258
===== ===========
</TABLE>
Select International Bond Fund (as of 03/31/2000 net assets)
<TABLE>
<CAPTION>
Industry Allocation
--------------------------------------------------------------------------------
<S> <C>
Government................................................................ 49.7%
Finance & Insurance....................................................... 29.7%
Banks..................................................................... 10.5%
Telecommunication Services & Equipment.................................... 4.3%
Utilities - Electric...................................................... 2.7%
-----
Total..................................................................... 96.9%
=====
</TABLE>
See Combined Notes to Schedules of Investments.
63
<PAGE>
EVERGREEN
Select Limited Duration Fund
Schedule of Investments
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - 13.4%
$ 411,394 Advanta Mtge. Loan Trust,
Ser. 1993-3, Cl. A1,
4.90%, 1/25/2010.................................. $ 405,028
2,150,000 BankBoston Receivable Asset-Backed Trust,
Ser. 1997-1, Cl. A7,
6.48%, 7/15/2008.................................. 2,134,445
2,437 Capital Equipment Receivables Trust, Ser. 1996-1,
Cl. A4,
6.28%, 6/15/2000.................................. 2,437
Case Equipment Loan Trust:
864,763 Ser. 1997-B, Cl. A4,
6.41%, 9/15/2004.................................. 860,003
1,000,000 Ser. 1998-A, Cl. A4,
5.83%, 2/15/2005.................................. 987,655
2,000,000 Ser. 1998-B, Cl. A3,
5.81%, 5/15/2003.................................. 1,994,250
850,000 Chase Credit Card Master Trust,
Ser. 1997-2, Cl. A,
6.30%, 4/15/2003.................................. 849,647
93,283 CIT Receivables Trust,
Ser. 1995-B, Cl. A,
6.50%, 4/15/2011.................................. 93,076
721,359 Contimortgage Home Equity Loan Trust,
Ser. 1997-4, Cl. A3,
6.26%, 7/15/2012.................................. 719,552
3,000,000 Copelco Capital Fund Corp.,
Ser. 1997-4, Cl. A3,
6.47%, 4/20/2005.................................. 2,987,565
2,000,000 Daimler-Benz Vehicle Trust,
Ser. 1998-A, Cl. A4,
5.22%, 12/22/2003................................. 1,943,050
188,406 EQCC Home Equity Loan Trust,
Ser. 1997-1, Cl. A3,
6.84%, 9/15/2011.................................. 188,560
60,028 Fifth Third Bank Auto Grantor Trust, Ser. 1996-A,
Cl. A,
6.20%, 9/15/2001.................................. 60,060
295,996 First Security Auto Grantor Trust,
Ser. 1997-A, Cl. A,
6.30%, 8/15/2003.................................. 296,154
3,600,000 GE Capital Mtge. Svcs. Inc.,
Ser. 1998-1, Cl. A4,
6.44%, 10/25/2016................................. 3,555,630
956,199 Heller Equipment Asset Receivables Trust,
Ser. 1997-1, Cl. A2,
6.39%, 5/25/2005.................................. 952,560
24,445 IMC Home Equity Loan Trust,
Ser. 1997-2, Cl. A3,
6.94%, 11/20/2011................................. 24,381
MBNA Master Credit Card Trust:
12,170,000 Ser. 1995-C, Cl. A,
6.45%, 2/15/2008.................................. 11,800,215
760,000 Ser. 1996-J, Cl. A,
6.03%, 2/15/2006.................................. 761,265
62,161 Navistar Finl. Corp. Owner Trust,
Ser. 1196-B, Cl. A3,
6.33%, 4/21/2003.................................. 62,168
225,620 Olympic Automobile Receivables Trust,
Ser. 1995-D, Cl. B,
6.10%, 4/15/2002.................................. 225,504
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - continued
Premier Auto Trust:
$ 1,020,000 Ser. 1997-3, Cl. A5,
6.34%, 1/6/2002................................... $ 1,017,914
2,280,000 Ser. 1998-2, Cl. A4,
5.82%, 12/6/2002.................................. 2,247,658
1,000,000 Ser. 1998-3, Cl. A3,
5.88%, 12/8/2001.................................. 997,565
123,598 Prudential Securities Finl. Asset Funding Corp.,
Ser. 1993-8, Cl. A,
5.775%, 11/15/2014................................ 120,262
335,132 SLMA,
Ser. 1997-1, Cl. A1,
6.345%, 4/4/2000.................................. 333,551
Union Acceptance Corp.:
138,384 Ser. 1995-D, Cl. B,
6.025%, 1/7/2003.................................. 138,008
334,070 Ser. 1996-A, Cl. A,
5.40%, 4/7/2003................................... 332,090
1,690,785 Ser. 1996-D, Cl. A2,
6.17%, 10/9/2002.................................. 1,686,228
1,392,476 Vanderbilt Mtge. Fin., Inc.,
Ser. 1997-B, Cl. 1A2,
6.775%, 1/7/2008.................................. 1,391,759
1,000,000 WFS Fin. Owner Trust,
Ser. 1998-A, Cl. A4,
5.95%, 2/20/2003.................................. 987,625
------------
Total Asset-Backed Securities
(cost $40,690,171)................................ 40,155,865
------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 6.2%
1,215,000 Commerce 2000,
Ser. 2000-FL1A, Cl. H,
7.298%, 12/16/2011................................ 1,186,144
7,500,000 Credit Suisse First Boston Mtge. Securities Corp.,
Ser. 1998-FL2A, Cl. D,
7.28%, 10/15/2001................................. 7,474,740
2,189,351 Deutsche Mtge. & Asset Receiving Corp.,
Ser. 1998-C1, Cl. A1,
6.22%, 9/15/2007.................................. 2,096,955
FHLMC:
1,742,736 6.00%, 12/15/2009................................. 1,688,215
1,620,325 6.50%, 5/15/2013.................................. 1,556,320
4,668,225 SASCO Floating Rate Comml. Mtge., Ser. 1999-C3,
Cl. H,
7.33%, 3/20/2002.................................. 4,664,037
------------
Total Collateralized Mortgage Obligations
(cost $18,673,672)................................ 18,666,411
------------
CORPORATE BONDS - 50.3%
Aerospace & Defense - 1.6%
4,850,000 Raytheon Co., Notes,
5.95%, 3/15/2001.................................. 4,779,306
------------
Automotive Equipment & Manufacturing - 0.3%
1,000,000 Navistar Intl. Corp.,
Sr. Notes, Ser. B,
7.00%, 2/1/2003................................... 960,000
------------
</TABLE>
64
<PAGE>
EVERGREEN
Select Limited Duration Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Banks - 3.3%
$ 1,000,000 Banc One Corp.,
Sr. Notes, MTN,
7.00%, 3/25/2002................................... $ 989,293
4,500,000 MBNA Corp.,
Sr. Notes, MTN,
6.50%, 9/15/2000................................... 4,482,571
4,510,000 NationsBank Corp.,
Sr. Notes,
5.75%, 3/15/2001................................... 4,454,825
------------
9,926,689
------------
Brokers - 10.6%
4,530,000 Bear Stearns Co., Inc.,
6.25%, 12/1/2000................................... 4,502,149
5,000,000 Goldman Sachs Group, Inc.,
6.209%, 4/14/2000.................................. 5,001,885
2,000,000 Lehman Brothers Holdings, Inc.,
6.125%, 2/1/2001................................... 1,977,384
Merrill Lynch & Co., Inc.,
Notes:
10,000,000 5.73%, 2/26/2002................................... 9,718,850
6,000,000 6.00%, 1/15/2001................................... 5,947,092
4,700,000 Morgan Stanley Dean Witter,
Sr. Notes,
5.25%, 2/8/2001.................................... 4,629,204
------------
31,776,564
------------
Cable/Other Video Distribution - 1.3%
3,750,000 Cox Communications, Inc.,
Notes,
6.375%, 6/15/2000.................................. 3,744,630
------------
Consumer Products & Services - 2.9%
1,000,000 Honeywell, Inc.,
Notes,
6.75%, 3/15/2002................................... 989,531
9,500,000 Service Corp. Intl.,
Notes,
6.75%, 6/1/2001.................................... 7,742,500
------------
8,732,031
------------
Finance & Insurance - 5.6%
1,000,000 Caterpillar Finl. Svcs., MTN,
6.75%, 6/15/2001................................... 996,101
5,430,000 CIT Group Holdings, Inc.,
Sr. Notes,
6.375%, 8/1/2002................................... 5,304,871
5,000,000 Conseco, Inc.,
Notes,
7.875%, 12/15/2000................................. 4,946,645
1,000,000 Ford Motor Credit Co.,
Notes,
6.55%, 9/10/2002................................... 982,512
2,750,000 Freemont General Corp.,
Sr. Note,
7.70%, 3/17/2004................................... 2,463,203
1,000,000 Ikon Capital, Inc., MTN,
6.73%, 6/15/2001................................... 977,898
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Finance and Insurance - continued
$ 1,000,000 Salomon, Inc.,
Sr. Notes,
7.30%, 5/15/2002................................... $ 997,583
------------
16,668,813
------------
Food & Beverage Products - 0.5%
1,000,000 Coca Cola Enterprises, Inc.,
Notes,
6.375%, 8/1/2001................................... 989,625
625,000 Nabisco, Inc.,
Sr. Notes,
6.00%, 2/15/2001................................... 616,086
------------
1,605,711
------------
Healthcare Products & Services - 0.8%
2,500,000 Tenet Healthcare Corp.,
Sr. Notes,
8.625%, 12/1/2003.................................. 2,450,938
------------
Industrial Specialty Products & Services - 4.5%
WMX Technologies, Inc.,
Notes:
4,000,000 6.25%, 10/15/2000.................................. 3,930,384
10,000,000 7.125%, 6/15/2001.................................. 9,693,810
------------
13,624,194
------------
Information Services & Technology - 3.4%
Comdisco, Inc.:
7,500,000 MTN, 6.02%, 6/26/2000.............................. 7,479,480
2,790,000 Notes, 6.50%, 6/15/2000............................ 2,784,613
------------
10,264,093
------------
Lease Rental Obligations - 1.0%
3,000,000 AMERICO, Sr. Notes,
7.20%, 4/1/2002.................................... 2,909,694
------------
Machinery - Diversified - 0.8%
2,400,000 Case Corp.,
Ser. B,
6.25%, 12/1/2003................................... 2,286,106
------------
Oil/Energy - 0.2%
590,000 Coastal Corp.,
Sr. Notes,
8.125%, 9/15/2002.................................. 596,651
------------
Paper & Packaging - 0.3%
1,000,000 Intl. Paper Co.,
Notes,
7.00%, 6/1/2001.................................... 991,803
------------
Real Estate - 2.0%
2,500,000 EOP Operating LP,
6.50%, 1/15/2004................................... 2,374,543
3,500,000 Homeside Lending, Inc.,
MTN,
6.875%, 5/15/2000.................................. 3,499,317
------------
5,873,860
------------
</TABLE>
65
<PAGE>
EVERGREEN
Select Limited Duration Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Retailing & Wholesale - 4.3%
$ 5,605,000 Dayton Hudson Corp.,
Puttable Reset Security,
5.95%, 6/15/2000................................... $ 5,592,747
7,000,000 Federated Dept. Stores, Inc.,
Sr. Note,
10.00%, 2/15/2001.................................. 7,137,067
------------
12,729,814
------------
Telecommunication Services & Equipment - 4.1%
4,720,000 AT&T Corp.,
5.625%, 3/15/2004.................................. 4,448,685
5,500,000 Sprint Capital Corp.,
5.70%, 11/15/2003.................................. 5,215,199
2,800,000 U.S. West Capital Funding, Inc.,
6.125%, 7/15/2002.................................. 2,713,894
------------
12,377,778
------------
Transportation - 1.2%
2,500,000 Burlington Northern Santa Fe Corp.,
7.00%, 8/1/2002.................................... 2,485,097
1,000,000 Continental Airlines, Inc., Sr. Notes,
9.50%, 12/15/2001.................................. 1,005,000
------------
3,490,097
------------
Utilities - Electric - 1.6%
5,000,000 Niagara Mohawk Power Corp.,
5.875%, 9/1/2002................................... 4,814,920
------------
Total Corporate Bonds
(cost $153,788,534)................................ 150,603,692
------------
MORTGAGE-BACKED SECURITIES - 4.4%
FHLMC:
733,422 6.00%, 1/1/2001 - 9/1/2001......................... 722,445
7,028,963 6.50%, 7/1/2004 - 9/1/2008......................... 6,871,976
1,105 9.00%, 5/1/2001.................................... 1,113
FNMA:
1,804,849 5.50%, 1/1/2014.................................... 1,664,738
951,898 6.50%, 9/1/2005 - 8/1/2010......................... 926,941
GNMA:
857,144 6.50%, 12/15/2008 - 10/15/2010..................... 834,978
17,853 7.50%, 7/20/2002................................... 17,764
3,793 8.00%, 8/15/2007................................... 3,818
13,264 8.25%, 7/15/2002................................... 13,353
242,127 8.50%, 6/20/2005 - 9/20/2005....................... 245,667
6,892 8.75%, 8/15/2001 - 9/15/2001....................... 6,953
997,277 9.00%, 10/20/2002 - 8/15/2022...................... 1,036,105
29,806 9.50%, 7/15/2002................................... 30,235
10,448 9.75%, 5/15/2001 - 5/20/2005....................... 10,755
21,616 10.00%, 10/15/2000 - 3/20/2004..................... 22,340
914 10.25%, 2/15/2001.................................. 931
579,091 14.00%, 2/15/2012 - 6/15/2012...................... 673,204
------------
Total Mortgage-Backed Securities
(cost $13,393,611)................................. 13,083,316
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
U.S. AGENCY OBLIGATIONS - 17.9%
$ 90,000 FFCB,
8.60%, 5/30/2006.................................. $ 91,868
FHLB:
200,000 4.32%, 8/26/2000.................................. 183,610
10,000,000 5.25%, 4/25/2002.................................. 9,685,390
15,000,000 5.875%, 8/15/2001................................. 14,805,360
5,000,000 6.75%, 2/15/2002.................................. 4,982,440
6,500,000 FHLMC,
5.75%, 6/15/2001.................................. 6,420,570
FNMA:
13,000,000 5.75%, 4/15/2003.................................. 12,538,721
5,000,000 7.125%, 2/15/2005................................. 5,010,865
------------
Total U.S. Agency Obligations
(cost $54,120,545)................................ 53,718,824
------------
YANKEE OBLIGATIONS - 2.6%
Building, Construction & Furnishings - 2.3%
5,000,000 Cemex SA,
MTN,
8.50%, 8/31/2000.................................. 5,008,420
2,000,000 Hanson Overseas BV,
Sr. Notes,
7.375%, 1/15/2003................................. 1,984,950
------------
6,993,370
------------
Diversified Companies - 0.3%
1,000,000 WMC Fin. USA Ltd.,
Notes,
6.50%, 11/15/2003................................. 961,529
------------
Total Yankee Obligations
(cost $8,087,575)................................. 7,954,899
------------
COMMERCIAL PAPER - 3.8%
Printing, Publishing, Broadcasting &
Entertainment - 3.8%
11,264,000 Houghton Mifflin Co.,
6.48%, 4/3/2000
(cost $11,264,000)................................ 11,264,000
------------
REPURCHASE AGREEMENT - 0.9%
2,757,902 Dresdner Bank AG, 5.90%, dated 3/31/2000, due
4/5/2000, maturity value $2,759,258
(cost $2,757,902) (c)............................. 2,757,902
------------
</TABLE>
<TABLE>
<S> <C> <C>
Total Investments -
(cost $302,776,010).................................. 99.5% 298,204,909
Other Assets and
Liabilities - net.................................... 0.5 1,466,126
----- ------------
Net Assets............................................ 100.0% $299,671,035
===== ============
</TABLE>
See Combined Notes to Schedules of Investments.
66
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Schedule of Investments
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
ASSET-BACKED SECURITIES - 0.3%
$ 500,000 Residential Asset Security Mtge. Pass, Ser. 2000-
KS1, Cl. AI5,
8.195%, 3/1/2000
(cost $502,387)................................... $ 506,023
------------
CORPORATE BONDS - 25.5%
Advertising & Related Services - 0.5%
250,000 Infinity Broadcasting, Inc.,
Sr. Sub. Notes,
8.875%, 6/15/2007................................. 255,000
250,000 K III Communications Corp.,
Sr. Notes,
8.50%, 2/1/2006................................... 240,625
200,000 Lamar Media Corp.,
Sr. Sub. Notes,
9.625%, 12/1/2006................................. 199,500
------------
695,125
------------
Aerospace & Defense - 0.2%
250,000 Sequa Corp.,
Sr. Notes,
9.00%, 8/1/2009................................... 233,125
------------
Automotive Equipment & Manufacturing - 1.0%
250,000 Eagle-Picher Inds.,
Sr. Sub. Notes,
9.375%, 3/1/2008.................................. 213,750
250,000 Federal Mogul Corp.,
Notes,
7.50%, 1/15/2009.................................. 193,735
250,000 Hayes Wheels Intl., Inc.,
Sr. Sub. Notes,
9.125%, 7/15/2007................................. 224,375
250,000 Lear Corp.,
Sub. Notes,
9.50%, 7/15/2006.................................. 243,750
500,000 Mark IV Inds., Inc.,
Sr. Sub. Notes,
7.50%, 9/1/2007................................... 459,976
200,000 Tenneco Automotive, Inc.,
Sr. Sub. Notes,
11.625%, 10/15/2009............................... 196,000
------------
1,531,586
------------
Banks - 0.7%
1,000,000 Capital One Bank,
6.65%, 3/15/2004.................................. 958,415
------------
Brokers - 1.4%
1,000,000 Goldman Sachs Group, Inc.,
7.80%, 1/28/2010.................................. 1,002,092
1,000,000 Lehman Brothers Holdings,
7.75%, 1/15/2005.................................. 999,460
------------
2,001,552
------------
Building, Construction & Furnishings - 1.8%
200,000 American Standard, Inc.,
Sr. Notes,
7.375%, 2/1/2008.................................. 181,000
250,000 MDC Holdings, Inc.,
Sr. Notes,
8.375%, 2/1/2008.................................. 211,250
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Building, Construction & Furnishings - continued
$ 250,000 Nortek, Inc.,
Sr. Notes, Ser. B,
8.875%, 8/1/2008................................... $ 225,000
2,000,000 Simon Debartolo Group LP,
6.75%, 6/15/2005................................... 1,860,504
250,000 Standard Pacific Corp.,
Sr. Sub. Notes,
8.50%, 4/1/2009.................................... 215,000
------------
2,692,754
------------
Cable/Other Video Distribution - 0.1%
250,000 Charter Communications,
Sr. Notes,
8.625%, 4/1/2009................................... 221,875
------------
Chemical & Agricultural Products - 0.5%
250,000 Huntsman ICI Chemicals LLC,
Sr. Sub. Notes,
10.125%, 7/1/2009.................................. 242,500
250,000 Scotts Co.,
Sr. Sub. Notes,
8.625%, 1/15/2009.................................. 231,250
250,000 Sterling Chemicals, Inc.,
Ser. B,
12.375%, 7/15/2006................................. 256,250
------------
730,000
------------
Communication Systems & Services - 0.1%
200,000 Century Communications Corp.,
Sr. Notes,
8.875%, 1/15/2007.................................. 184,000
------------
Consumer Products & Services - 0.2%
250,000 Playtex Family Products Corp.,
Sr. Sub. Notes,
9.00%, 12/15/2003.................................. 244,375
------------
Electrical Equipment & Services - 0.7%
1,000,000 Sony Corp.,
Notes,
6.125%, 3/4/2003................................... 973,496
------------
Finance & Insurance - 1.8%
965,000 Household Fin. Corp.,
5.125%, 6/24/2009.................................. 852,262
2,000,000 Lincoln Natl. Corp.,
Notes,
7.00%, 3/15/2018................................... 1,795,152
------------
2,647,414
------------
Food & Beverage Products - 0.2%
200,000 AFC Enterprises, Inc.,
Sr. Sub. Notes,
10.25%, 5/15/2007.................................. 195,000
250,000 Aurora Foods, Inc.,
Sr. Sub. Notes, Ser. B,
9.875%, 2/15/2007.................................. 95,000
------------
290,000
------------
</TABLE>
67
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Gaming - 1.6%
$ 250,000 Argosy Gaming Co.,
Sr. Sub. Notes,
10.75%, 6/1/2009................................... $ 254,375
250,000 Aztar Corp.,
Sr. Sub. Notes,
8.875%, 5/15/2007.................................. 226,875
250,000 Boyd Gaming Corp.,
Sr. Sub. Notes,
9.50%, 7/15/2007................................... 232,500
250,000 Harrahs Operating Co., Inc.,
Sr. Sub. Notes,
7.875%, 12/15/2005................................. 232,500
250,000 Hollywood Park, Inc.,
Sr. Notes, Ser. B,
9.25%, 2/15/2007................................... 246,250
250,000 Horseshoe Gaming Holdings,
Sr. Notes,
8.625%, 5/15/2009.................................. 230,000
250,000 Isle of Capri Casinos, Inc.,
Sr. Sub. Notes,
8.75%, 4/15/2009................................... 220,000
250,000 Mohegan Tribal Gaming Auth.,
Sr. Notes,
8.125%, 1/1/2006................................... 236,875
250,000 Park Place Entertainment Corp.,
Sr. Sub. Notes,
7.875%, 12/15/2005................................. 231,250
250,000 Station Casinos, Inc.,
Sr. Sub. Notes,
9.75%, 4/15/2007................................... 245,625
------------
2,356,250
------------
Independent Power Producers - 0.5%
Calpine Corp., Sr. Notes:
500,000 7.625%, 4/15/2006.................................. 465,000
250,000 7.75%, 4/15/2009................................... 232,188
------------
697,188
------------
Industrial Specialty Products & Services - 0.1%
250,000 Allied Waste No. America, Inc.,
Sr. Notes,
7.625%, 1/1/2006................................... 206,250
------------
Iron & Steel - 0.3%
250,000 National Steel Corp.,
1st Mtge. Notes, Ser. D,
9.875%, 3/1/2009................................... 245,625
250,000 WHX Corp.,
Sr. Notes,
10.50%, 4/15/2005.................................. 231,875
------------
477,500
------------
Lease Rental Obligations - 0.6%
250,000 Avis Rent-A-Car, Inc.,
11.00%, 5/1/2009................................... 249,375
250,000 Budget Group, Inc.,
Sr. Notes,
9.125%, 4/1/2006................................... 201,250
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Lease Rental Obligations - continued
$ 250,000 Nationsrent, Inc.,
Sr. Sub. Notes,
10.375%, 12/15/2008................................ $ 224,375
250,000 United Rentals, Inc.,
Sr. Notes,
9.25%, 1/15/2009................................... 222,500
------------
897,500
------------
Leisure & Tourism - 0.6%
250,000 HMH Properties, Inc.,
Sr. Notes,
7.875%, 8/1/2008................................... 210,313
150,000 Outboard Marine Corp.,
Sr. Sub. Notes, Ser. B,
10.75%, 6/1/2008................................... 116,250
250,000 Premier Parks, Inc.,
Sr. Notes,
9.75%, 1/15/2007................................... 245,312
250,000 Prime Hospitality Corp.,
Sr. Sub. Notes, Ser. B,
9.75%, 4/1/2007.................................... 241,250
------------
813,125
------------
Manufacturing - Distributing - 0.5%
250,000 Holley Performance Products, Inc.,
Sr. Sub. Notes, Ser. B,
12.25%, 9/15/2007.................................. 245,000
250,000 Owens Illinois, Inc.,
Sr. Notes,
7.35%, 5/15/2008................................... 225,180
250,000 Sun World Intl., Inc.,
1st. Mtge. Notes, Ser. B,
11.25%, 4/15/2004.................................. 246,250
------------
716,430
------------
Oil/Energy - 1.4%
250,000 Cross Timbers Oil Co.,
Sr. Sub. Notes, Ser. B,
8.75%, 11/1/2009................................... 230,000
250,000 Giant Inds., Inc.,
Sr. Sub. Notes,
9.00%, 9/1/2007.................................... 226,250
500,000 Lasmo USA, Inc.,
6.75%, 12/15/2007.................................. 466,065
250,000 Nuevo Energy Co.,
Sr. Sub. Notes, Ser. B,
9.50%, 6/1/2008.................................... 241,875
250,000 Ocean Energy, Inc.,
Sr. Sub. Notes,
8.375%, 7/1/2008................................... 233,750
250,000 P&L Coal Holdings Corp.,
Sr. Sub. Notes, Ser. B,
9.625%, 5/15/2008.................................. 223,125
200,000 Triton Energy, Ltd.,
Sr. Notes,
8.75%, 4/15/2002................................... 198,500
250,000 Vintage Petroleum, Inc.,
Sr. Sub. Notes,
9.00%, 12/15/2005.................................. 243,125
------------
2,062,690
------------
</TABLE>
68
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Paper & Packaging - 1.3%
$ 250,000 Container Corp. of America,
Sr. Notes,
11.25%, 5/1/2004.................................. $ 255,000
250,000 Packaging Corp. of America,
Sr. Sub. Notes,
9.625%, 4/1/2009.................................. 247,500
250,000 Repap New Brunswick, Inc.,
Sr. Secd. Notes,
11.50%, 6/1/2004.................................. 255,937
250,000 Stone Container Corp.,
1st Mtge. Notes,
10.75%, 10/1/2002................................. 254,375
1,000,000 UPM Kymmene Corp.,
6.875%, 11/26/2007 (a)............................ 937,976
------------
1,950,788
------------
Printing, Publishing, Broadcasting &
Entertainment - 3.2%
250,000 Ackerley Group, Inc.,
Sr. Sub. Notes, Ser. B,
9.00%, 1/15/2009.................................. 232,500
250,000 American Lawyer Media, Inc.,
Sr. Sub. Notes, Ser. B,
9.75%, 12/15/2007................................. 233,125
200,000 American Media Operations, Inc.,
Sr. Sub. Notes,
10.25%, 5/1/2009.................................. 194,500
250,000 Chancellor Media Corp.,
Sr. Notes,
8.00%, 11/1/2008.................................. 247,813
250,000 Echostar DBS Corp.,
Sr. Notes,
9.375%, 2/1/2009.................................. 242,500
250,000 Emmis Communications Corp.,
Ser. B,
8.125%, 3/15/2009................................. 233,750
250,000 Hollinger Intl. Publishing, Inc.,
Sr. Sub. Notes,
9.25%, 2/1/2006................................... 236,875
250,000 Lin Televison Corp.,
8.375%, 3/1/2008.................................. 217,500
250,000 Mediacom LLC,
Sr. Notes, Ser. B,
8.50%, 4/15/2008.................................. 228,750
250,000 Sinclair Broadcast Group, Inc.,
Sr. Sub. Notes,
10.00%, 9/30/2005................................. 236,250
250,000 TV Guide, Inc.,
Sr. Sub. Notes,
8.125%, 3/1/2009.................................. 247,500
1,820,000 Viacom Inc.,
Sr. Notes,
7.75%, 6/1/2005................................... 1,826,703
250,000 Young Broadcasting, Inc.,
Ser. B,
8.75%, 6/15/2007.................................. 220,000
------------
4,597,766
------------
Retailing & Wholesale - 1.1%
250,000 Ames Dept. Stores, Inc.,
Sr. Notes,
10.00%, 4/15/2006................................. 235,000
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Retailing & Wholesale - continued
$ 250,000 Jo-Ann Stores, Inc.,
Sr. Sub. Notes,
10.375%, 5/1/2007.................................. $ 221,250
1,000,000 Kroger Co.,
Sr. Notes,
6.375%, 3/1/2008................................... 906,545
250,000 Michaels Stores, Inc.,
Sr. Notes,
10.875%, 6/15/2006................................. 261,250
------------
1,624,045
------------
Telecommunication Services & Equipment - 2.8%
250,000 Crown Castle Intl. Corp.,
Sr. Notes,
9.00%, 5/15/2011................................... 227,500
250,000 Global Crossing, Ltd.,
Sr. Notes (a),
9.125%, 11/15/2006................................. 238,750
250,000 Hyperion Telecommunications, Inc.,
Sr. Secd. Notes, Ser. B,
12.25%, 9/1/2004................................... 260,000
250,000 Intermedia Communications, Inc.,
Sr. Notes, Ser. B,
8.60%, 6/1/2008.................................... 221,250
250,000 McLeod USA, Inc.,
Sr. Disc. Notes,
0.00%, 3/1/2007 (b)................................ 197,500
250,000 Metromedia Fiber Network, Inc.,
Sr. Notes, Ser. B,
10.00%, 11/15/2008................................. 238,750
150,000 Nextel Communications, Inc.,
Sr. Notes,
9.375%, 11/15/2009................................. 138,750
250,000 Nextlink Communications, Inc.,
Sr. Notes,
12.50%, 4/15/2006.................................. 258,750
250,000 Powertel, Inc.,
Sr. Notes,
11.125%, 6/1/2007.................................. 258,750
250,000 Price Communications Wireless, Inc.,
Sr. Secd. Notes,
9.125%, 12/15/2006................................. 243,750
250,000 Time Warner Telecom, LLC,
Sr. Notes,
9.75%, 7/15/2008................................... 253,750
1,000,000 Vodafone Airtouch PLC,
7.625%, 2/15/2005 (a).............................. 1,010,124
250,000 Voicestream Wireless Co.,
Sr. Notes,
10.375%, 11/15/2009 (a)............................ 250,000
250,000 Williams Communications Group, Inc.,
Sr. Notes,
10.875%, 10/1/2009................................. 246,250
------------
4,043,874
------------
Transportation - 1.3%
1,792,626 Southwest Airlines Co.,
Ser. A3,
8.70%, 7/1/2011.................................... 1,894,330
------------
</TABLE>
69
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
CORPORATE BONDS - continued
Utilities - Telephone - 0.7%
$ 1,000,000 MCI Worldcom Inc.,
Sr. Notes,
7.75%, 4/1/2007.................................... $ 1,017,914
------------
Utilities - 0.3%
250,000 AES Corp.,
Sr. Sub. Notes,
8.50%, 11/1/2007................................... 220,000
250,000 Azurix Corp.,
Notes,
10.375%, 2/15/2007 (a)............................. 250,000
------------
470,000
------------
Total Corporate Bonds
(cost $39,282,982)................................. 37,229,367
------------
MORTGAGE-BACKED SECURITIES - 24.9%
425,000 FHLB:
6.875%, 6/7/2002................................... 674,999
FHLMC:
4,295,766 6.00%, 2/1/2029.................................... 3,916,192
6,714,651 6.50%, 3/1/2029 - 5/1/2029......................... 6,310,297
11,733,602 7.00%, 6/1/2027 - 11/1/2029........................ 11,296,668
6,897,535 7.50%, 10/1/2011 - 7/1/2028........................ 6,828,371
2,018,022 8.00%, 4/1/2027 - 5/1/2027......................... 2,028,556
1,319,708 8.50%, 1/1/2028.................................... 1,348,121
GNMA:
1,476,523 6.00%, 5/15/2028................................... 1,352,554
2,674,554 6.50%, 5/15/2028................................... 2,525,554
------------
Total Mortgage-Backed Securities
(cost $37,861,626)................................. 36,281,312
------------
U.S. TREASURY OBLIGATIONS - 26.2%
U.S. Treasury Bonds:
4,510,000 6.25%, 5/15/2030................................... 4,772,144
5,000,000 7.625%, 2/15/2007.................................. 5,085,940
1,600,000 8.125%, 5/15/2021.................................. 1,966,000
3,040,000 8.75%, 5/15/2017................................... 3,841,800
3,625,000 9.00%, 11/15/2018.................................. 4,729,494
2,640,000 10.375%, 11/15/2012................................ 3,248,850
2,000,000 10.75%, 8/15/2005.................................. 2,389,376
1,270,000 11.75%, 11/15/2014................................. 1,749,822
U.S. Treasury Notes:
3,000,000 5.50%, 2/28/2003................................... 2,925,939
2,100,000 7.25%, 5/15/2004................................... 2,165,625
5,290,000 7.50%, 11/15/2001.................................. 5,371,006
------------
Total U. S. Treasury Obligations
(cost $38,466,603)................................. 38,245,996
------------
YANKEE OBLIGATIONS - 4.5%
Building, Construction & Furnishings - 1.0%
1,540,000 Hanson Overseas BV,
Sr. Notes,
7.375%, 1/15/2003.................................. 1,528,411
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - continued
Cable/Other Video Distribution - 0.4%
$ 250,000 Imax Corp.,
Sr. Notes,
7.875%, 12/1/2005.................................. $ 228,750
250,000 Rogers Cablesystems, Ltd.,
11.00%, 12/1/2015.................................. 283,125
------------
511,875
------------
Finance & Insurance - 0.4%
100,000 Hutchison Whampoa Fin., Ltd.,
Notes, Ser. A,
6.95%, 8/1/2007 (a)................................ 95,846
500,000 ICI Fin. Netherlands,
6.75%, 8/7/2002.................................... 489,674
------------
585,520
------------
Forest Products - 0.2%
250,000 Tembec Inds., Inc,
Sr. Notes,
8.625%, 6/30/2009.................................. 237,500
------------
Government - 0.3%
330,000 Argentina,
0.00%, 10/15/2001 (b).............................. 287,100
100,000 Kazakhstan,
8.375%, 10/2/2002.................................. 95,750
100,000 Lithuania,
7.125%, 7/22/2002.................................. 96,445
------------
479,295
------------
Metals & Mining - 0.3%
500,000 Bulong Operation Property, Ltd.,
Sr. Notes,
12.50%, 12/15/2008................................. 375,000
------------
Manufacturing - Distributing - 0.6%
1,000,000 Tyco Intl. Group SA,
6.125%, 11/1/2008.................................. 895,388
------------
Oil/Energy - 0.4%
250,000 Gulf Canada Resources, Ltd.,
Sr. Notes,
8.35%, 8/1/2006.................................... 242,500
352,000 Petroleum GEO Svcs.,
Notes,
7.50%, 3/31/2007................................... 342,292
------------
584,792
------------
Paper & Packaging - 0.3%
250,000 Domtar, Inc.,
Notes,
8.75%, 8/1/2006.................................... 252,188
250,000 Norampac, Inc.,
Sr. Notes,
9.50%, 2/1/2008.................................... 243,750
------------
495,938
------------
</TABLE>
70
<PAGE>
EVERGREEN
Select Total Return Bond Fund
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
YANKEE OBLIGATIONS - continued
Telecommunication Services & Equipment - 0.6%
$ 250,000 Rogers Cantel, Inc.,
Deb.,
9.75%, 6/1/2016.................................... $ 276,250
200,000 SK Telecom, Ltd.,
7.75%, 4/29/2004................................... 195,313
250,000 Telewest Communications, PLC,
Sr. Deb.,
9.625%, 10/1/2006.................................. 242,500
100,000 TPSA Fin. BV,
7.125%, 12/10/2003 (a)............................. 95,935
------------
809,998
------------
Total Yankee Obligations
(cost $6,794,377).................................. 6,503,717
------------
FOREIGN BOND-(NON-US DOLLAR DENOMINATED) - 15.4%
Banks - 2.1%
600,000 Bayer Hypo Vereinsbank,
EUR 4.75%, 9/19/2007................................... 548,910
500,000 HSBC Holdings PLC,
EUR 5.50%, 7/15/2009................................... 455,411
985,000 IBRD World Bank,
NZD 7.25%, 5/27/2003................................... 482,785
Kreditanstalt Fur Wiederaufbau:
530,000 5.25%, 1/4/2010.................................... 494,788
EUR
383,468 5.50%, 3/12/2007................................... 370,889
EUR
210,000 Lloyds Bk., PLC,
EUR 4.75%, 3/18/2011................................... 179,374
1,075,000 Oesterreich Kontrollbank,
DEM 5.75%, 9/12/2007................................... 534,929
------------
3,067,086
------------
Building, Construction & Furnishings - 0.1%
180,000 Vodohospodarska Vystavba,
DEM 8.00%, 7/9/2001.................................... 89,695
------------
Finance - 1.3%
1,000,000 DSL Fin. NV,
DEM 5.00%, 7/23/2004................................... 488,600
2,500,000 Eksportfinans AS,
SEK 6.875%, 2/9/2004................................... 298,814
1,210,000 Siemens Financier,
EUR 5.50%, 3/12/2007................................... 1,155,145
------------
1,942,559
------------
Government - 11.1%
4,530,000 Belgium,
EUR 3.75%, 3/28/2009................................... 3,862,445
Denmark:
2,100,000 5.00%, 8/15/2005................................... 266,146
DKK
4,300,000 7.00%, 11/15/2007.................................. 603,058
DKK
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
FOREIGN BOND-(NON-US DOLLAR DENOMINATED) - continued
Government - continued
France:
914,694 5.25%, 4/25/2008.................................. $ 877,816
EUR
1,310,000 5.50%, 4/25/2029.................................. 1,222,278
EUR
1,140,000 Germany,
EUR 6.00%, 7/4/2007................................... 1,141,885
1,400,000 Italy,
EUR 5.75%, 7/10/2007.................................. 1,355,757
Netherlands:
720,000 3.75%, 7/15/2009.................................. 612,560
EUR
710,000 5.50%, 1/15/2028.................................. 665,415
EUR
417,477 6.50%, 4/15/2003.................................. 417,760
EUR
Spain:
280,000 4.50%, 7/30/2004.................................. 262,837
EUR
2,000,000 5.15%, 7/30/2009.................................. 1,880,316
EUR
972,000 6.00%, 1/31/2029.................................. 950,796
EUR
2,085,000 Sweden,
EUR 5.00%, 1/28/2009.................................. 1,936,787
70,000 United Mexican States,
GBP 8.75%, 5/30/2002.................................. 111,415
------------
16,167,271
------------
Telecommunication Services & Equipment - 0.8%
1,320,000 Nippon Telegraph & Telephone Co.,
EUR 3.75%, 5/15/2006.................................. 1,154,570
------------
Total Foreign Bond-(Non-US Dollar Denominated)
(cost $25,215,772)................................ 22,421,181
------------
REPURCHASE AGREEMENT - 1.3%
$ 1,944,527 Dresdner Bank AG, 5.90%, dated 3/31/2000, due
4/3/2000 (cost $1,944,527, maturity value of
$1,945,483) (#)................................... 1,944,527
------------
</TABLE>
<TABLE>
<S> <C> <C>
Total Investments -
(cost $150,068,274).................................. 98.1% 143,132,123
Other Assets and
Liabilities - net.................................... 1.9 2,717,412
----- ------------
Net Assets............................................ 100.0% $145,849,535
===== ============
</TABLE>
# Collateralized by $1,540,000 U.S. Treasury Bonds, 8.75%, 5/15/2017; value
including accrued interest--$1,985,819.
See Combined Notes to Schedules of Investments.
71
<PAGE>
EVERGREEN
Combined Notes to Schedules of Investments
Schedule of Investments(continued)
March 31, 2000 (Unaudited)
(a) Security that may be resold to "qualified institutional buyers" under Rule
144A of the Securities Act of 1933. This security has been determined to be
liquid under guidelines established by the Board of Trustees.
(b) Effective yield (calculated at the date of purchase) is the yield at which
the bill accretes on an annual basis until maturity date.
(c) The repurchase agreement is fully collateralized by U.S. Government and/or
agency obligations based on market prices at March 31, 2000 plus accrued
interest.
(d) All or a portion of the principal amount of this security was pledged as
collateral for open mortgage dollar roll agreements.
(e) Security acquired under mortgage dollar roll agreements.
+ A portion of these securities are on loan.
* Represents collateral received for securities on loan.
Summary of Abbreviations:
<TABLE>
<S> <C>
ACA American Capital Access
AMBAC American Municipal Bond Assurance Corp.
AMT Alternative Minimum Tax
CDA Community Development Authority
DEM German Deutsche Mark
DKK Danish Krone
EDA Economic Development Authority
ETM Escrowed to Maturity
EUR Euro Dollar
FFCB Federal Farm Credit Bank
FGIC Financial Guaranty Insurance Corp.
FHA Federal Housing Authority
FHLB Federal Home Loan Banks
FHLMC Federal Home Loan Mortgage Corp.
FNMA Federal National Mortgage Association
FRF French Franc
FSA Financial Security Assurance Corp.
GBP Pound Sterling
GNMA Government National Mortgage Association
GO General Obligation
HFA Housing Finance Authority
IBC Insured Bond Certification
IDA Industrial Development Authority
MBIA Municipal Bond Investors Assurance Corp.
MHRB Multifamily Housing Revenue Bond
MTN Medium Term Notes
NZD New Zealand Dollar
PCRB Pollution Control Revenue Bond
RB Revenue Bond
RRB Refunding Revenue Bond
SEK Swedish Krone
SFHRB Single Family Housing Revenue Bond
SFHRRB Single Family Housing Refunding Revenue Bond
SLMA Student Loan Marketing Association
STRIPS Separate Trading of Registered Interest and Principal of Securities
</TABLE>
72
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Assets and Liabilities
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Adjustable Fixed Income High Yield
Rate Fund Core Bond Fund Fund Bond Fund
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Identified cost of securities................................... $36,812,131 $1,105,824,830 $784,082,249 $51,220,451
Repurchase agreements at amortized cost......................... 13,783,000 114,503,000 25,234,311 3,603,000
--------------------------------------------------------------------------------------------------------------------------------
Total cost of securities........................................ 50,595,131 1,220,327,830 809,316,560 54,823,451
Net unrealized gains or losses on securities.................... (255,229) (8,728,276) (12,863,117) (1,928,120)
--------------------------------------------------------------------------------------------------------------------------------
Market value of securities...................................... 50,339,902 1,211,599,554 796,453,443 52,895,331
Cash............................................................ 0 127 0 367
Receivable for securities sold.................................. 82,024 104,857,992 118,675,534 0
Receivable for Fund shares sold................................. 794,703 2,592,914 894,210 0
Dividends and interest receivable............................... 317,134 11,235,308 7,913,031 1,448,371
Receivable from investment advisor.............................. 1,829 47,648 11,512 7,203
Prepaid expenses and other assets............................... 2,997 79,392 122,277 54,267
--------------------------------------------------------------------------------------------------------------------------------
Total assets................................................... 51,538,589 1,330,412,935 924,070,007 54,405,539
--------------------------------------------------------------------------------------------------------------------------------
Liabilities
Distributions payable........................................... 12,150 5,056,011 2,724,611 406,411
Payable for securities purchased................................ 499,587 179,272,376 200,987,599 0
Payable for Fund shares redeemed................................ 570 2,254,024 1,759,540 0
Payable for securities on loan.................................. 0 0 146,237,587 0
Deferred mortgage dollar roll income............................ 0 0 26,577 0
Due to custodian bank........................................... 1,677 0 0 0
Advisory fee payable............................................ 0 0 0 0
Distribution Plan expenses payable.............................. 214 275 265 0
Due to other related parties.................................... 309 9,349 4,692 443
Accrued expenses and other liabilities.......................... 28,074 87,012 24,259 19,293
--------------------------------------------------------------------------------------------------------------------------------
Total liabilities.............................................. 542,581 186,679,047 351,765,130 426,147
--------------------------------------------------------------------------------------------------------------------------------
Net assets....................................................... $50,996,008 $1,143,733,888 $572,304,877 $53,979,392
--------------------------------------------------------------------------------------------------------------------------------
Net assets represented by
Paid-in capital................................................. 52,334,831 1,181,381,776 $585,990,222 $55,936,445
Undistributed (overdistributed) net investment income........... 34,044 76,344 (386,551) 70,985
Accumulated net realized gains or losses on securities
and foreign currency related transactions...................... (1,117,638) (28,995,956) (435,677) (99,918)
Net unrealized losses on securities and
foreign currency related transactions.......................... (255,229) (8,728,276) (12,863,117) (1,928,120)
--------------------------------------------------------------------------------------------------------------------------------
Total net assets................................................. $50,996,008 $1,143,733,888 $572,304,877 $53,979,392
--------------------------------------------------------------------------------------------------------------------------------
Net assets consists of
Class I......................................................... 27,425,791 1,130,065,574 $559,352,115 $53,978,406
Class IS........................................................ 23,570,217 13,668,314 12,952,762 986
--------------------------------------------------------------------------------------------------------------------------------
Total net assets................................................. $50,996,008 $1,143,733,888 $572,304,877 $53,979,392
--------------------------------------------------------------------------------------------------------------------------------
Shares outstanding
Class I......................................................... 2,880,183 113,683,332 97,194,112 5,622,196
Class IS........................................................ 2,475,738 1,375,071 2,250,697 103
--------------------------------------------------------------------------------------------------------------------------------
Net asset value per share
Class I......................................................... $ 9.52 $ 9.94 $ 5.76 $ 9.60
--------------------------------------------------------------------------------------------------------------------------------
Class IS........................................................ $ 9.52 $ 9.94 $ 5.76 $ 9.60
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
73
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Assets and Liabilities
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Limited
Income Plus Intermediate International Duration Total Return
Fund Bond Fund Bond Fund Fund Bond Fund
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Identified cost of securities........................ $1,959,343,300 $674,180,094 $57,613,421 $300,018,108 $148,123,747
Repurchase Agreements at amortized cost.............. 40,464,564 0 0 2,757,902 1,944,527
---------------------------------------------------------------------------------------------------------------------------------
Total cost of securities............................. 1,999,807,864 674,180,094 57,613,421 302,776,010 150,068,274
Net unrealized gains or losses on securities......... (29,484,761) (6,531,819) (5,850,011) (4,571,101) (6,936,151)
---------------------------------------------------------------------------------------------------------------------------------
Market value of securities........................... 1,970,323,103 667,648,275 51,763,410 298,204,909 143,132,123
Cash................................................. 686 123 0 681 0
Foreign currency, at value (cost $0, $0,
$16,883, $0, and $2,159, respectively).............. 0 0 16,883 0 2,159
Receivable for securities sold....................... 44,332,813 6,757,598 222,349 10,574 0
Receivable for Fund shares sold...................... 1,168,041 102,000 0 62,388 0
Dividends and interest receivable.................... 27,779,583 10,313,529 1,362,122 3,586,358 2,719,755
Receivable for closed forward foreign
currency exchange contracts......................... 0 0 52,831 0 223,757
Unrealized gains on forward foreign
currency exchange contracts......................... 0 0 354,463 0 0
Receivable from investment advisor................... 48,201 0 0 55,531 0
Prepaid expenses and other assets.................... 156,330 73,806 9,859 5,512 6,602
---------------------------------------------------------------------------------------------------------------------------------
Total assets........................................ 2,043,808,757 684,895,331 53,781,917 301,925,953 146,084,396
---------------------------------------------------------------------------------------------------------------------------------
Liabilities
Distributions payable................................ 9,355,377 2,845,465 210,485 1,470,161 184,798
Payable for securities purchased..................... 114,742,248 27,288,742 0 0 0
Payable for Fund shares redeemed..................... 2,530,994 884,249 0 656,456 0
Payable for securities on loan....................... 226,458,049 0 0 0 0
Deferred mortgage dollar roll income................. 23,449 0 0 0 0
Due to custodian bank................................ 0 0 160,893 0 0
Advisory fee payable................................. 0 17,437 0 0 1,101
Distribution Plan expenses payable................... 288 143 0 187 0
Due to other related parties......................... 13,838 5,367 439 2,448 1,188
Accrued expenses and other liabilities............... 113,544 23,282 15,842 125,666 47,774
---------------------------------------------------------------------------------------------------------------------------------
Total liabilities................................... 353,237,787 31,064,685 387,659 2,254,918 234,861
---------------------------------------------------------------------------------------------------------------------------------
Net assets............................................ $1,690,570,970 $653,830,646 $53,394,258 $299,671,035 $145,849,535
---------------------------------------------------------------------------------------------------------------------------------
Net assets represented by
Paid-in capital...................................... $1,744,291,674 $678,923,704 $59,368,036 $304,473,295 $160,939,519
Undistributed (overdistributed) net
investment income................................... 273,280 75,985 (448,310) 195,435 146,404
Accumulated net realized gains or losses on
securities and foreign currency
related transactions................................ (24,509,223) (18,637,224) 39,726 (426,594) (8,488,853)
Net unrealized losses on securities and
foreign currency related transactions............... (29,484,761) (6,531,819) (5,565,194) (4,571,101) (6,747,535)
---------------------------------------------------------------------------------------------------------------------------------
Total net assets...................................... $1,690,570,970 $653,830,646 $53,394,258 $299,671,035 $145,849,535
---------------------------------------------------------------------------------------------------------------------------------
Net assets consists of
Class I.............................................. $1,676,532,042 $646,881,679 $53,247,095 $290,463,411 $145,597,406
Class IS............................................. 14,038,928 6,948,967 147,163 9,207,624 252,129
---------------------------------------------------------------------------------------------------------------------------------
Total net assets...................................... $1,690,570,970 $653,830,646 $53,394,258 $299,671,035 $145,849,535
---------------------------------------------------------------------------------------------------------------------------------
Shares outstanding
Class I.............................................. 314,174,515 10,767,066 6,083,213 28,761,492 1,615,802
Class IS............................................. 2,630,816 115,661 16,819 911,729 2,798
---------------------------------------------------------------------------------------------------------------------------------
Net asset value per
share
Class I.............................................. $ 5.34 $ 60.08 $ 8.75 $ 10.10 $ 90.11
---------------------------------------------------------------------------------------------------------------------------------
Class IS............................................. $ 5.34 $ 60.08 $ 8.75 $ 10.10 $ 90.11
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
74
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Operations
Six Months Ended March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
High Yield
Adjustable Core Bond Fixed Bond
Rate Fund Fund Income Fund Fund (a)
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income
Interest.................................................................. $1,417,648 $35,293,501 $20,679,496 $ 1,410,245
Dividends................................................................. 0 1,487,687 0 0
----------------------------------------------------------------------------------------------------------------------------------
Total investment income.................................................... 1,417,648 36,781,188 20,679,496 1,410,245
----------------------------------------------------------------------------------------------------------------------------------
Expenses
Advisory fee.............................................................. 56,722 1,964,970 1,365,601 76,347
Distribution Plan expenses................................................ 16,027 13,210 15,333 1
Administrative services fees.............................................. 8,747 322,475 170,913 15,269
Transfer agent fee........................................................ 3,506 33,357 28,833 324
Trustees' fees and expenses............................................... 416 10,982 5,948 431
Printing and postage expenses............................................. 1,749 27,000 10,036 2,545
Custodian fee............................................................. 7,893 157,311 100,436 7,347
Registration and filing fees.............................................. 2,166 144,675 28,685 16,414
Professional fees......................................................... 9,700 12,766 9,907 5,769
Organization expenses..................................................... 0 0 0 3,985
Other..................................................................... 7,905 70,495 13,389 624
----------------------------------------------------------------------------------------------------------------------------------
Total expenses........................................................... 114,831 2,757,241 1,749,081 129,056
Less: Expense reductions................................................. (642) (20,467) (11,585) (3,818)
Fee waivers........................................................ (25,457) (429,870) (184,382) (33,621)
----------------------------------------------------------------------------------------------------------------------------------
Net expenses............................................................. 88,732 2,306,904 1,553,114 91,617
----------------------------------------------------------------------------------------------------------------------------------
Net investment income..................................................... 1,328,916 34,474,284 19,126,382 1,318,628
----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains or losses on
securities and foreign currency related
transactions............................................................. (291,204) (11,189,589) (632,167) (99,918)
----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized gains or losses on
securities and foreign currency related
transactions............................................................. 51,090 (3,435,161) (6,485,296) (1,928,120)
----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized losses on securities and
foreign currency related transactions.................................... (240,114) (14,624,750) (7,117,463) (2,028,038)
----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................................... $1,088,802 $19,849,534 $12,008,919 $ (709,410)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) For the period from November 30, 1999 (commencement of operations) through
March 31, 2000.
See Combined Notes to Financial Statements.
75
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Operations
Six Months Ended March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Intermediate International Limited Total Return
Income Plus Bond Bond Duration Bond
Fund Fund Fund Fund Fund
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income
Interest................................................ $ 61,216,250 $ 18,770,958 $ 1,406,274 $ 9,972,121 $ 5,447,814
Dividends............................................... 210,000 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------------
Total investment income.................................. 61,426,250 18,770,958 1,406,274 9,972,121 5,447,814
---------------------------------------------------------------------------------------------------------------------------------
Expenses
Advisory fee............................................ 4,046,722 1,913,970 155,243 388,142 272,608
Distribution Plan expenses.............................. 17,568 8,427 304 6,600 4,353
Administrative services fees............................ 502,619 203,372 16,577 86,450 43,750
Transfer agent fee...................................... 31,370 2,901 818 19,356 985
Trustees' fees and expenses............................. 17,680 6,918 553 2,997 1,512
Printing and postage expenses........................... 34,051 10,383 2,864 6,273 5,624
Custodian fee........................................... 260,868 29,503 37,610 56,234 25,505
Registration and filing fees............................ 105,539 1,905 8,140 25,555 24,851
Professional fees....................................... 19,557 11,833 8,581 8,598 8,639
Other................................................... 39,757 7,196 12,104 58,408 12,104
---------------------------------------------------------------------------------------------------------------------------------
Total expenses......................................... 5,075,731 2,196,408 242,794 658,613 399,931
Less: Expense reductions............................... (37,792) (11,879) (13,925) (11,575) (2,843)
Fee waivers...................................... (561,810) (28,254) (48,814) (191,754) (15,042)
---------------------------------------------------------------------------------------------------------------------------------
Net expenses........................................... 4,476,129 2,156,275 180,055 455,284 382,046
---------------------------------------------------------------------------------------------------------------------------------
Net investment income................................... 56,950,121 16,614,683 1,226,219 9,516,837 5,065,768
---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains or losses on
securities and foreign currency related transactions
Net realized gains or losses on:
Securities............................................. (13,985,939) (15,186,058) 24,049 (325,629) (3,276,935)
Foreign currency related transactions.................. 0 0 126,184 0 283,922
---------------------------------------------------------------------------------------------------------------------------------
Net realized gains or losses on securities
and foreign currency related transactions.............. (13,985,939) (15,186,058) 150,233 (325,629) (2,993,013)
---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized gains or losses on
securities and foreign currency related
transactions........................................... (12,287,803) 722,649 (3,964,251) (3,157,103) (1,251,777)
---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized losses on
securities and foreign currency
related transactions................................... (26,273,742) (14,463,409) (3,814,018) (3,482,732) (4,244,790)
---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations.............................. $ 30,676,379 $ 2,151,274 $(2,587,799) $ 6,034,105 $ 820,978
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
76
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Changes in Net Assets
Six Months Ended March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Adjustable High Yield
Rate Core Bond Fixed Income Bond
Fund Fund Fund Fund (a)
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income.............................................. $ 1,328,916 $ 34,474,284 $ 19,126,382 $ 1,318,628
Net realized gains or losses on securities
and foreign currency related transactions......................... (291,204) (11,189,589) (632,167) (99,918)
Net change in unrealized gains or losses
on securities and foreign currency
related transactions.............................................. 51,090 (3,435,161) (6,485,296) (1,928,120)
----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations........................................ 1,088,802 19,849,534 12,008,919 (709,410)
----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income
Class I........................................................... (924,350) (33,854,628) (18,503,601) (1,247,617)
Class IS.......................................................... (371,446) (318,008) (378,042) (26)
----------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders............................... (1,295,796) (34,172,636) (18,881,643) (1,247,643)
----------------------------------------------------------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold.......................................... 26,635,178 230,671,510 91,114,800 55,887,523
Payment for shares redeemed........................................ (32,989,502) (128,513,276) (118,044,867) 0
Net asset value of shares issued in
reinvestment of distributions..................................... 1,324,895 7,374,127 3,590,226 48,922
----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
capital share transactions....................................... (5,029,429) 109,532,361 (23,339,841) 55,936,445
----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets.......................... (5,236,423) 95,209,259 (30,212,565) 53,979,392
Net assets
Beginning of period................................................ 56,232,431 1,048,524,629 602,517,442 0
----------------------------------------------------------------------------------------------------------------------------------
End of period...................................................... $ 50,996,008 $1,143,733,888 $ 572,304,877 $53,979,392
----------------------------------------------------------------------------------------------------------------------------------
Undistributed (overdistributed) net investment income............... $ 34,044 $ 76,344 $ (386,551) $ 70,985
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) For the period from November 30, 1999 (commencement of operations) through
March 31, 2000.
See Combined Notes to Financial Statements.
77
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Changes in Net Assets
Six Months Ended March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Intermediate International Limited Total Return
Income Plus Bond Bond Duration Bond
Fund Fund Fund Fund Fund
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations
Net investment income.. $ 56,950,121 $ 16,614,683 $ 1,226,219 $ 9,516,837 $ 5,065,768
Net realized gains or
losses on securities
and foreign currency
related transactions.. (13,985,939) (15,186,058) 150,233 (325,629) (2,993,013)
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. (12,287,803) 722,649 (3,964,251) (3,157,103) (1,251,777)
--------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations........... 30,676,379 2,151,274 (2,587,799) 6,034,105 820,978
--------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class I............... (55,731,041) (16,394,532) (1,990,795) (9,165,645) (4,784,461)
Class IS.............. (436,350) (156,422) (7,875) (161,550) (104,553)
--------------------------------------------------------------------------------------------------
Total distributions to
shareholders......... (56,167,391) (16,550,954) (1,998,670) (9,327,195) (4,889,014)
--------------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 132,090,072 70,988,334 4,124,009 47,065,238 8,647,202
Payment for shares
redeemed.............. (224,810,730) (113,272,615) (3,048,603) (59,403,779) (13,884,689)
Net asset value of
shares issued in
reinvestment of
distributions......... 3,702,731 178,510 1,408,602 1,516,926 4,501,539
--------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions... (89,017,927) (42,105,771) 2,484,008 (10,821,615) (735,948)
--------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets.............. (114,508,939) (56,505,451) (2,102,461) (14,114,705) (4,803,984)
Net assets
Beginning of period.... 1,805,079,909 710,336,097 55,496,719 313,785,740 150,653,519
--------------------------------------------------------------------------------------------------
End of period.......... $1,690,570,970 $ 653,830,646 $53,394,258 $299,671,035 $145,849,535
--------------------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ 273,280 $ 75,985 $ (448,310) $ 195,435 $ 146,404
--------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
78
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Changes in Net Assets
Year Ended September 30, 1999
<TABLE>
<CAPTION>
Adjustable
Rate Core Bond Fixed Income Income Plus
Fund Fund(a) Fund Fund
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income.. $ 2,189,264 $ 19,149,689 $ 36,359,046 $ 86,445,775
Net realized gains or
losses on securities,
futures contracts and
foreign currency
related transactions.. (206,625) (17,915,146) 1,416,510 (9,539,387)
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. (203,833) 10,559,806 (33,036,101) (95,323,463)
------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations........... 1,778,806 11,794,349 4,739,455 (18,417,075)
------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class I............... (1,397,318) (18,838,531) (35,671,468) (85,924,615)
Class IS.............. (793,896) (117,748) (658,927) (510,896)
Net realized gains.....
Class I............... 0 (144,394) 0 (12,260,419)
Class IS.............. 0 (3,606) 0 (77,202)
------------------------------------------------------------------------------------
Total distributions to
shareholders......... (2,191,214) (19,104,279) (36,330,395) (98,773,132)
------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 32,420,775 83,677,773 147,719,575 233,942,078
Payment for shares
redeemed.............. (10,412,264) (48,148,961) (200,209,090) (314,597,134)
Net asset value of
shares issued in
reinvestment of
distributions......... 1,817,776 3,931,283 7,882,569 17,855,318
Net asset value of
shares issued in
acquisition of:
Common Trust Funds.... 0 312,235,534 0 610,301,298
Investment Companies.. 0 592,389,300 0 0
------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... 23,826,287 944,084,929 (44,606,946) 547,501,560
------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... 23,413,879 936,774,999 (76,197,886) 430,311,353
Net assets
Beginning of period.... 32,818,552 111,749,630 678,715,328 1,374,768,556
------------------------------------------------------------------------------------
End of period.......... $56,232,431 $1,048,524,629 $602,517,442 $1,805,079,909
------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ 924 $ (225,304) $ (631,290) $ (509,450)
------------------------------------------------------------------------------------
</TABLE>
(a) For the six months ended September 30, 1999. The Fund changed its fiscal
year end from March 31 to September 30, effective September 30, 1999.
See Combined Notes to Financial Statements.
79
<PAGE>
Evergreen
Select Fixed Income Funds
Statements of Changes in Net Assets
Year Ended September 30, 1999
<TABLE>
<CAPTION>
Intermediate International Limited Total Return
Bond Bond Duration Bond
Fund Fund Fund Fund
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income.. $ 33,672,831 $ 1,997,899 $ 8,117,604 $ 9,510,660
Net realized gains or
losses on securities,
futures contracts and
foreign currency
related transactions.. (3,177,212) 3,129,348 (98,199) (3,793,155)
Net change in
unrealized gains or
losses on securities,
and foreign currency
related transactions.. (52,389,950) (3,192,115) (2,114,578) (6,893,620)
---------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations........... (21,894,331) 1,935,132 5,904,827 (1,176,115)
---------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class I............... (33,430,318) (1,906,784) (8,066,740) (9,139,842)
Class IS.............. (236,269) (5,278) (43,790) (389,292)
Net realized gains
Class I............... (9,895,453) 0 (125,867) 0
Class IS.............. (67,252) 0 (1,052) 0
---------------------------------------------------------------------------------
Total distributions to
shareholders......... (43,629,292) (1,912,062) (8,237,449) (9,529,134)
---------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 81,766,341 14,680,094 65,588,737 20,634,659
Payment for shares
redeemed.............. (106,674,508) (7,438,959) (65,752,963) (2,278,793)
Net asset value of
shares issued in
reinvestment of
distributions......... 8,732,727 1,496,453 2,540,973 6,980,846
Net asset value of
shares issued in
acquisition of:
Common Trust Funds.... 40,425,308 0 242,317,183 0
---------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... 24,249,868 8,737,588 244,693,930 25,336,712
---------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... (41,273,755) 8,760,658 242,361,308 14,631,463
Net assets
Beginning of period.... 751,609,852 46,736,061 71,424,432 136,022,056
---------------------------------------------------------------------------------
End of period.......... $710,336,097 $55,496,719 $313,785,740 $150,653,519
---------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ 12,256 $ 324,141 $ 5,793 $ (30,350)
---------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
80
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Core Bond Fund
Year Ended
March 31,
1999(a)
--------------------------------------------------------------------------------
<S> <C>
Operations
Net investment income.......................................... $ 6,395,051
Net realized gains on securities and foreign currency related
transactions.................................................. 1,960,347
Net change in unrealized losses on securities and foreign
currency related transactions................................. (1,449,745)
--------------------------------------------------------------------------------
Net increase in net assets resulting from operations.......... 6,905,653
--------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income
Class I....................................................... (6,248,934)
Class IS...................................................... (154,241)
Net realized gains
Class I....................................................... (2,212,023)
Class IS...................................................... (55,284)
--------------------------------------------------------------------------------
Total distributions to shareholders........................... (8,670,482)
--------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold...................................... 18,357,060
Payment for shares redeemed.................................... (12,547,141)
Net asset value of shares issued in reinvestment of
distributions................................................. 8,385,840
--------------------------------------------------------------------------------
Net increase in net assets resulting from capital share
transactions................................................. 14,195,759
--------------------------------------------------------------------------------
Total increase in net assets.................................. 12,430,930
Net assets
Beginning of period............................................ 99,318,700
--------------------------------------------------------------------------------
End of period.................................................. $111,749,630
--------------------------------------------------------------------------------
Undistributed net investment income............................. $ 0
--------------------------------------------------------------------------------
</TABLE>
(a) The information represented for the Tattersall Bond Fund, the accounting
survivor in the June 4, 1999 merger with Select Core Bond Fund.
See Combined Notes to Financial Statements.
81
<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 High Yield Bond Fund ("High Yield Bond Fund"), Evergreen Select Income
Plus Fund ("Income Plus Fund"), Evergreen Select Intermediate Term Municipal
Bond Fund ("Intermediate Bond Fund"), Evergreen Select International Bond Fund
("International Bond Fund"), Evergreen Select Limited Duration Fund ("Limited
Duration Fund") and Evergreen Select Total Return Bond Fund ("Total Return Bond
Fund"), (collectively, the "Funds"). Each Fund is a diversified series of Ever-
green Select Fixed Income Trust (the "Trust"), a Delaware business trust orga-
nized on September 18, 1997. The Trust is an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act").
The Funds offer an Institutional class of shares ("Class I") and an Institu-
tional Service class of shares ("Class IS"). Each class of shares is sold with-
out a front-end sales charge or contingent deferred sales charge. Class IS
shares pay an ongoing service fee.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently fol-
lowed by the Funds in the preparation of their financial statements. The poli-
cies are in conformity with generally accepted accounting principles, which re-
quire management to make estimates and assumptions that affect amounts reported
herein. Actual results could differ from these estimates.
A. Valuation of Securities
Corporate bonds, U.S. government obligations, mortgage and other asset-backed
securities, municipal bonds and other fixed-income securities are valued at
prices provided by an independent pricing service. In determining a price for
normal institutional-size transactions, the pricing service uses methods based
on market transactions for comparable securities and analysis of various rela-
tionships between similar securities, which are generally recognized by insti-
tutional traders. Securities for which valuations are not available from an in-
dependent pricing service may be valued by brokers which use prices provided by
market makers or estimates of market value obtained from yield data relating to
investments or securities with similar characteristics.
Securities traded on a national securities exchange or included on the Nasdaq
National Market System ("NMS") and other securities traded in the over-the-
counter market are valued at the last reported sales price on the exchange
where primarily traded. Securities traded on an exchange or NMS and other secu-
rities traded in the over-the-counter market for which there has been no sale
are valued at the mean between the last reported bid and asked price.
Mutual fund shares held in a fund are valued at the net asset value of each mu-
tual fund.
Short-term investments with remaining maturities of 60 days or less are carried
at amortized cost, which approximates market value.
Securities for which valuations are not readily available from an independent
pricing service (including restricted securities) are valued at fair value as
determined in good faith according to procedures established by the Board of
Trustees.
B. Repurchase Agreements
Each Fund may invest in repurchase agreements. Securities pledged as collateral
for repurchase agreements are held in a segregated account by the custodian on
the Fund's behalf. Collateral for certain tri-party repurchase agreements is
held at the counterparty's custodian in a segregated account for the benefit of
the Fund and the counterparty. Each Fund monitors the adequacy of the collat-
eral daily and will require the seller to provide additional collateral in the
event the market value of the securities pledged falls below the carrying
82
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
value of the repurchase agreement, including accrued interest. Each Fund will
only enter into repurchase agreements with banks and other financial institu-
tions, which are deemed by the investment advisor to be creditworthy pursuant
to guidelines established by the Board of Trustees.
Pursuant to an exemptive order issued by the Securities and Exchange Commis-
sion, the Funds, may transfer uninvested cash balances into a joint trading ac-
count. These balances are invested in one or more repurchase agreements that
are fully collateralized by U.S. Treasury and/or federal agency obligations.
C. Reverse Repurchase Agreements
To obtain short-term financing, the Funds may enter into reverse repurchase
agreements with qualified third-party broker-dealers. Interest on the value of
reverse repurchase agreements is based upon competitive market rates at the
time of issuance. At the time the Fund enters into a reverse repurchase agree-
ment, it will establish and maintain a segregated account with the custodian
containing qualifying assets having a value not less than the repurchase price,
including accrued interest. If the counterparty to the transaction is rendered
insolvent, the ultimate realization of the securities to be repurchased by the
Fund may be delayed or limited.
D. Foreign Currency
The books and records of the Funds are maintained in United States (U.S.) dol-
lars. Foreign currency amounts are translated into U.S. dollars as follows:
market value of investments, other assets and liabilities at the daily rate of
exchange; purchases and sales of investments and income and expenses at the
rate of exchange prevailing on the respective dates of such transactions. Net
unrealized foreign exchange gain (loss) resulting from changes in foreign cur-
rency exchange rates is a component of net unrealized gains or losses on secu-
rities and foreign currency related transactions. Net realized foreign currency
gain or loss on foreign currency related transactions includes foreign currency
gains and losses between trade date and settlement date on investment securi-
ties transactions, foreign currency related transactions and the difference be-
tween the amounts of interest and dividends recorded on the books of the Fund
and the amount actually received. The portion of foreign currency gains or
losses related to fluctuations in exchange rates between the initial purchase
trade date and subsequent sale trade date is included in realized gain or loss
on securities.
E. Forward Foreign Currency Exchange Contracts
The Funds may enter into forward foreign currency exchange contracts ("forward
contracts") to settle portfolio purchases and sales of securities denominated
in a foreign currency and to hedge certain foreign currency assets or liabili-
ties. Forward contracts are recorded at the forward rate and marked-to-market
daily. Realized gains and losses arising from such transactions are included in
net realized gain or loss on foreign currency related transactions. The Fund
bears the risk of an unfavorable change in the foreign currency exchange rate
underlying the forward contract and is subject to the credit risk that the
other party will not fulfill their obligations under the contract. Forward con-
tracts involve elements of market risk in excess of the amount reflected in the
Statements of Assets and Liabilities.
F. When-issued and Delayed Delivery Transactions
The Funds record when-issued or delayed delivery transactions on the trade date
and will segregate with the custodian qualifying assets having a value suffi-
cient to make payment for the securities purchased. Securities purchased on a
when-issued or delayed delivery basis are marked-to-market daily and the Fund
begins earning interest on the settlement date. Losses may arise due to changes
in the market value of the underlying securities or if the counterparty does
not perform under the contract.
G. Securities Lending
In order to generate income and to offset expenses, the Funds may lend portfo-
lio securities to brokers, dealers and other qualified financial organizations.
A Fund's investment adviser will monitor the creditworthiness of such borrow-
ers. 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 bor-
rower to provide additional collateral in the
83
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
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 obtain the securities loaned at any
time on five days' notice. Any gain or loss in the market price of the loaned
securities, which occurs during the term of the loan, would affect a Fund and
its investors. A Fund may pay fees in connection with such loans.
H. Mortgage Dollar Rolls Transactions
Each Fund may engage in mortgage dollar roll transactions with respect to mort-
gage-backed securities issued by GNMA, FNMA and FHLMC. In a mortgage dollar
roll transaction, a Fund sells a mortgage-backed security to a financial insti-
tution, such as a bank or broker/dealer and simultaneously agrees to repurchase
a substantially similar (i.e. same type, coupon and maturity) security from the
institution at a later date at an agreed upon price. The mortgage-backed secu-
rities that are repurchased will bear the same interest rate as those sold, but
generally will be collateralized by different pools of mortgages with different
prepayment histories. During the roll period the Fund foregoes principal and
interest paid on the securities. The Fund receives compensation from the inter-
est earned on the cash proceeds of the initial sale and in the form of a fee
which is recorded as deferred income and amortized to income over the roll pe-
riod, or alternatively, a lower price for the security upon its repurchase.
Mortgage dollar rolls may be renewed with a new purchase and repurchase price
and cash settlement made at each renewal without physical delivery of the secu-
rities subject to the contract.
I. Security Transactions and Investment Income
Securities transactions are accounted for no later than one business day after
the trade date. Realized gains and losses are computed on the identified cost
basis. Interest income is recorded on the accrual basis and includes accretion
of discounts and amortization of premiums. Foreign income and capital gains re-
alized on some foreign securities may be subject to foreign taxes, which are
accrued as applicable.
J. Federal Taxes
The Funds have qualified and intend to continue to qualify as regulated invest-
ment companies under the Internal Revenue Code of 1986, as amended (the
"Code"). Thus, the Funds will not incur any federal income tax liability since
they are expected to distribute all of their net investment company taxable in-
come, net tax-exempt income and net capital gains, if any, to their sharehold-
ers. The Funds also intend to avoid any excise tax liability by making the re-
quired distributions under the Code. Accordingly, no provision for federal
taxes is required. To the extent that realized capital gains can be offset by
capital loss carryforwards, it is each Funds policy not to distribute such
gains.
K. Distributions
Distributions from net investment income for each Fund, except International
Bond Fund, are declared daily and paid monthly. Distributions from net invest-
ment income for the International Bond Fund are declared and paid quarterly.
Distributions from net realized capital gains, if any, are paid at least annu-
ally. Distributions to shareholders are recorded at the close of business on
the ex-dividend date.
Income and capital gains distributions to shareholders are determined in accor-
dance with income tax regulations, which may differ from generally accepted ac-
counting principles.
L. Class Allocations
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses are prorated among the classes based on the rela-
tive net assets of each class. Currently, class specific expenses are limited
to expenses incurred under the Distribution Plans for Class IS.
M. Organization Expenses
Expenses relating to the organization of High Yield Bond Fund have been re-
flected in High Yield Bond Fund's operating results for the period ended March
31, 2000.
84
<PAGE>
Combined Notes to Financial Statements(Unaudited) (continued)
3. INVESTMENT ADVISORY AGREEMENT AND OTHER AFFILIATED TRANSACTIONS
Evergreen Investment Management Company ("EIMC"), an indirect wholly owned sub-
sidiary of First Union National Bank ("FUNB"), is the investment advisor for
Adjustable Rate Fund and High Yield Bond Fund. In return for providing invest-
ment advisory and administrative services to both of the Funds, the Funds pay
EIMC an advisory fee that is calculated and paid daily. The advisory fee, for
Adjustable Rate Fund and High Yield Bond Fund, is computed at an annual rate of
0.21% and 0.50%, respectively, of the average daily net assets of the respec-
tive Fund. Prior to January 3, 2000, the advisory fee for Adjustable Rate Fund
rate was calculated at a rate of 0.30% of its average daily net assets.
Tattersall Advisory Group ("TAG"), a subsidiary of FUNB, is the investment ad-
visor of Core Bond Fund. In return for its services, the Fund pays TAG an advi-
sory fee that is calculated and paid daily at an annual rate of 0.32% of the
Fund's average daily net assets. Prior to January 3, 2000, the advisory fee for
Core Bond Fund rate was calculated at a rate of 0.40% of its average daily net
assets.
FUNB, a division of First Union Corporation, ("First Union"), serves as the in-
vestment advisor to Fixed Income Fund, Income Plus Fund, Limited Duration Fund
and Total Return Bond Fund. In return for providing investment advisory serv-
ices to the Funds, each Fund pays FUNB an advisory fee that is calculated and
paid daily based on the following percentages of each Fund's average daily net
assets:
<TABLE>
<CAPTION>
Annual
Advisory Fee
------------
<S> <C>
Fixed Income Fund................................... 0.42%
Income Plus Fund.................................... 0.42%
Intermediate Bond Fund.............................. 0.52%
Limited Duration Fund............................... 0.22%
Total Return Bond Fund.............................. 0.32%
</TABLE>
Prior to January 3, 2000, Fixed Income Fund, Income Plus Fund, Intermediate
Bond Fund, Limited Duration Fund and the Total Return Bond Fund, rates were
calculated and paid daily based on the Fund's average daily net assets as fol-
lows:
<TABLE>
<CAPTION>
Annual
Advisory Fee
------------
<S> <C>
Fixed Income Fund................................... 0.50%
Income Plus Fund.................................... 0.50%
Intermediate Bond Fund.............................. 0.60%
Limited Duration Fund............................... 0.30%
Total Return Bond Fund.............................. 0.40%
</TABLE>
First International Advisors, Ltd. ("FIA"), a division of FUNB, is the invest-
ment advisor for the International Bond Fund. FIA is paid an advisory fee that
is calculated and paid daily. The advisory fee is computed at an annual rate of
0.52% of the average daily net assets of the Fund. Prior to January 3, 2000,
the advisory fee for the rate was calculated at a rate of 0.60% of the Fund's
average daily net assets.
During the six months ended March 31, 2000, the amount of investment advisory
fees waived by each investment advisor and the impact on each Fund's expense
ratio represented as a percentage of its average net assets were as follows:
<TABLE>
<CAPTION>
Fees % of Average
Waived Daily Net Assets
-------------------------
<S> <C> <C>
Adjustable Rate Fund.................. $ 25,457 0.12%
Core Bond Fund........................ 429,870 0.08%
Fixed Income Fund..................... 184,382 0.06%
High Yield Fund....................... 33,621 0.22%
Income Plus Fund...................... 561,810 0.06%
Intermediate Bond Fund................ 28,254 0.01%
International Bond Fund............... 48,814 0.18%
Limited Duration Fund................. 191,754 0.13%
Total Return Bond Fund................ 15,042 0.02%
</TABLE>
85
<PAGE>
Combined Notes to Financial Statements(Unaudited) (continued)
FIA and EIMC serve as sub-investment advisors to the Total Return 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 FIA and EIMC.
Evergreen Investment Services ("EIS"), a indirect wholly owned subsidiary of
FUNB, is the administrator to the Funds. As administrator, EIS provides the
Funds with facilities, equipment and personnel. For its services, the Funds pay
the administrator a fee at the annual rate of 0.10% of each Fund's average
daily net assets. Prior to March 15, 2000, The BISYS Group, Inc. ("BISYS")
served as the sub-administrator to the Funds and provided the officers of the
Funds. Officers of the Funds and affiliated Trustees receive no compensation
directly from the Funds.
Prior to January 3, 2000, the Adjustable Rate Fund had reimbursed EIMC for pro-
viding certain administration and accounting expenses. The sub-administration
fee was paid by the investment advisor until the sub-administration agreement
with BISYS was terminated on March 14, 2000.
Prior to January 3, 2000, the administrator and sub-administrator for the each
Fund, except Adjustable Rate Fund, was entitled to an annual fee based on the
combined average daily net assets of all the funds administered by EIS for
which First Union or its investment advisory subsidiaries are also the invest-
ment advisors. The sub-administrator was paid by the administrator out of its
fees until the sub-administration agreement with BISYS was terminated on March
14, 2000. The administration fee was calculated by applying percentage rates,
which started at 0.05% and declined to 0.01% per annum as net assets increased,
to the average daily net assets of each Fund. The sub-administration fee was
calculated by applying percentage rates, which started at 0.01% and declined to
0.004% per annum as net assets increased, to the average daily net assets of
each Fund.
Evergreen Service Company, ("ESC"), an indirectly, wholly owned subsidiary of
First Union, serves as the transfer agent and dividend disbursing agent for the
Funds.
During the six months ended March 31, 2000, the Funds, paid or accrued the fol-
lowing amounts for administrative and sub-administrative services:
<TABLE>
<CAPTION>
Administration Sub-administration
Fee Fee
---------------------------------
<S> <C> <C>
Adjustable Rate Fund.......... $ 8,747 $ 0
Core Bond Fund................ 298,598 23,877
Fixed Income Fund............. 157,869 13,044
High Yield Fund............... 14,660 609
Income Plus Fund.............. 467,176 35,443
Intermediate Bond Fund........ 188,356 15,016
International Bond Fund....... 15,360 1,217
Limited Duration Fund......... 80,556 5,894
Total Return Bond Fund........ 40,426 3,324
</TABLE>
4. DISTRIBUTION PLANS
Evergreen Distributor, Inc. ("EDI"), a wholly owned subsidiary of BISYS, serves
as principal underwriter to the Funds.
Each Fund has adopted a Distribution Plan, as allowed by Rule 12b-1 of the 1940
Act, for Class IS shares. Distribution plans permit a Fund to compensate its
principal underwriter for costs related to selling shares of the Fund and for
various other services. These costs, which consist primarily of commissions and
service fees to broker-dealers who sell shares of the Fund, are paid by the
Fund through "Distribution Plan expenses". Class IS currently pays a service
fee equal to 0.25% of the average daily net assets of the class. Distribution
Plan expenses are calculated and paid daily.
Each Distribution Plan may be terminated at any time by vote of the Independent
Trustees or by vote of a majority of the outstanding voting shares of the Class
IS.
86
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
5. ACQUISITIONS
On June 25, 1999 several of the Funds acquired the net assets of certain common
trust funds managed by FUNB. These acquisitions were accomplished through tax-
able or tax-free exchanges of Class I shares of each Fund. The value of total
shares issued, net assets acquired and unrealized appreciation of each Fund
were as follows:
<TABLE>
<CAPTION>
Total Total Net Unrealized
Acquiring Shares Assets Appreciation
Fund Common Trust Fund Acquired Issued Acquired (Depreciation)
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Core Bond Fund Charitable Fixed Income Trust 10,632,584 $106,874,434 (2,608,935)
Fund Core CoreFund Bond Fund 20,219,688 203,240,383 0
Signet Premium Income Fund 210,985 2,120,717 (32,764)
----------- ------------ -----------
31,063,257 312,235,534 (2,641,699)
Income Plus CoreFund Fixed Income Fund 45,904,652 248,651,717 (5,968,898)
Fund CoreFund Bond Trust 66,765,388 361,649,581 (6,978,079)
----------- ------------ -----------
112,670,040 610,301,298 (12,946,977)
Intermediate CoreFund Delaware Municipal Bond Fund 644,587 40,425,308 304,901
Bond Fund ----------- ------------ -----------
Limited CoreFund Intermediate Bond Trust 10,728,927 109,605,697 (334,385)
Duration CoreFund Intermediate Fund 4,178,636 42,688,717 (21,833)
Fund CoreFund Intermediate Bond Fund 8,812,023 90,022,769 0
----------- ------------ -----------
23,719,586 242,317,183 (356,218)
</TABLE>
On June 4, 1999, Core Bond Fund acquired all of the net assets and certain lia-
bilities of the Tattersall Bond Fund ("Tattersall"), an open-end, management
investment company, registered under 1940 Act, through a tax-free exchange of
Class I and Class IS shares. The acquired net assets consisted primarily of
portfolio securities with unrealized depreciation of $1,251,269. The aggregate
net assets of Tattersall and Core Bond Fund immediately before the acquisition
were $109,122,148 and $592,389,300, respectively. The aggregate net assets of
Core Bond Fund after the acquisition were $701,511,448. Since TAG was expected
to be the investment adviser to Core Bond Fund after the acquisition and Core
Bond Fund was to be managed in accordance with Tattersall's investment objec-
tive and policies, it was determined that Tattersall would be the accounting
and performance survivor of this reorganization and as such its basis of ac-
counting for assets and liabilities and its operating results for prior periods
are carried forward.
87
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
6. CAPITAL SHARE TRANSACTIONS
The Funds have an unlimited number of shares of beneficial interest with $0.001
par value authorized. Shares of beneficial interest of the Funds are currently
divided into Class I and Class IS. Transactions in shares of the Funds were as
follows:
Adjustable Rate Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 2000 September 30, 1999
------------------------ ----------------------
Shares Amount Shares Amount
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold................. 402,157 $ 4,004,291 1,602,911 $15,347,739
Shares redeemed............. (1,405,041) (13,387,773) (354,414) (3,423,816)
Shares issued in
reinvestment of
distributions.............. 114,318 913,728 125,051 1,199,107
------------------------------------------------------------------------------
Net increase (decrease)..... (888,566) (8,469,754) 1,373,548 13,123,030
------------------------------------------------------------------------------
Class IS
Shares sold................. 2,377,716 22,630,887 1,780,289 17,073,036
Shares redeemed............. (2,057,824) (19,601,729) (728,144) (6,988,448)
Shares issued in
reinvestment of
distributions.............. 43,130 411,167 64,525 618,669
------------------------------------------------------------------------------
Net increase (decrease)..... 363,022 3,440,325 1,116,670 10,703,257
------------------------------------------------------------------------------
Net increase (decrease)..... $ (5,029,429) 23,826,287
------------------------------------------------------------------------------
</TABLE>
Core Bond Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended Year Ended
March 31, 2000 September 30, 1999 (a) March 31, 1999 (b)
-------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I
Shares sold............. 21,719,775 $ 215,895,503 7,983,350 $ 81,433,457 1,686,530 $ 17,978,857
Shares redeemed......... (12,237,174) (121,491,286) (4,611,016) (46,750,534) (1,092,498) (11,649,216)
Shares issued in
reinvestment of
distributions.......... 718,449 7,156,505 378,980 3,856,401 768,493 8,176,315
Shares issued in
acquisition of:
Common Trust Funds...... 0 0 31,063,257 312,235,534 0 0
Investment Companies.... 0 0 58,366,376 590,194,768 0 0
----------------------------------------------------------------------------------------------------------
Net increase
(decrease)............. 10,201,050 101,560,722 93,180,947 940,969,626 1,362,525 14,505,956
----------------------------------------------------------------------------------------------------------
Class IS
Shares sold............. 1,490,681 14,776,007 223,070 2,244,316 35,245 378,203
Shares redeemed......... (707,533) (7,021,990) (138,270) (1,398,427) (84,097) (897,925)
Shares issued in
reinvestment of
distributions.......... 21,905 217,622 7,336 74,882 19,694 209,525
Shares issued in
acquisition of
Investment Companies... 0 0 222,949 2,194,532 0 0
----------------------------------------------------------------------------------------------------------
Net increase
(decrease)............. 805,053 7,971,639 315,085 3,115,303 (29,158) (310,197)
----------------------------------------------------------------------------------------------------------
Net increase
(decrease)............. $ 109,532,361 $944,084,929 $ 14,195,759
----------------------------------------------------------------------------------------------------------
</TABLE>
Fixed Income Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 2000 September 30, 1999
-------------------------- --------------------------
Shares Amount Shares Amount
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............. 14,537,316 $ 83,826,473 22,718,254 $ 134,684,835
Shares redeemed......... (19,480,124) (112,011,162) (31,679,032) (189,162,288)
Shares issued in
reinvestment of
distributions.......... 582,014 3,347,110 1,260,239 7,507,425
Shares issued in
acquisition of
Investment Companies... 0 0 0 0
--------------------------------------------------------------------------------
Net increase
(decrease)............. (4,360,794) (24,837,579) (7,700,539) (46,970,028)
--------------------------------------------------------------------------------
Class IS
Shares sold............. 1,265,487 7,288,327 2,187,052 13,034,740
Shares redeemed......... (1,048,893) (6,033,705) (1,860,394) (11,046,802)
Shares issued in
reinvestment of
distributions.......... 42,278 243,116 63,140 375,144
Shares issued in
acquisition of
Investment Companies... 0 0 0 0
--------------------------------------------------------------------------------
Net increase
(decrease)............. 258,872 1,497,738 389,798 2,363,082
--------------------------------------------------------------------------------
Net increase
(decrease)............. $ (23,339,841) $ (44,606,946)
--------------------------------------------------------------------------------
</TABLE>
(a) For the six months ended September 30, 1999. The Fund changed its fiscal
year end from March 31 to September 30, effective September 30, 1999.
(b) The capital share activity is that of Tatersall Bond Fund, the accounting
survivor in the June 4, 1999 merger with Core Bond Fund. The number of
shares for each transaction type have been restated to give effect to this
transaction.
88
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
High Yield Fund
<TABLE>
<CAPTION>
Period Ended
March 31, 2000 (a)
---------------------
Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C>
Class I
Shares sold.............................................. 5,617,195 $55,886,523
Shares redeemed.......................................... 0 0
Shares issued in reinvestment of distributions........... 5,001 48,897
-------------------------------------------------------------------------------
Net increase............................................. 5,622,196 55,935,420
-------------------------------------------------------------------------------
Class IS
Shares sold.............................................. 100 1,000
Shares redeemed.......................................... 0 0
Shares issued in reinvestment of distributions........... 3 25
-------------------------------------------------------------------------------
Net increase............................................. 103 1,025
-------------------------------------------------------------------------------
Net increase............................................. $55,936,445
-------------------------------------------------------------------------------
</TABLE>
Income Plus Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 2000 September 30, 1999
-------------------------- --------------------------
Shares Amount Shares Amount
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............. 22,257,340 $ 118,589,345 38,979,040 $ 218,566,129
Shares redeemed......... (40,209,925) (214,417,801) (54,255,598) (302,962,132)
Shares issued in
reinvestment of
distributions.......... 643,783 3,438,988 3,076,886 17,501,272
Shares issued in
acquisition of Common
Trust Funds............ 0 0 112,670,040 610,301,298
--------------------------------------------------------------------------------
Net increase
(decrease)............. (17,308,802) (92,389,468) 100,470,368 543,406,567
--------------------------------------------------------------------------------
Class IS
Shares sold............. 2,525,466 13,500,727 2,754,186 15,375,949
Shares redeemed......... (1,952,536) (10,392,929) (2,080,768) (11,635,002)
Shares issued in
reinvestment of
distributions.......... 49,419 263,743 62,835 354,046
--------------------------------------------------------------------------------
Net increase............ 622,349 3,371,541 736,253 4,094,993
--------------------------------------------------------------------------------
Net increase
(decrease)............. $ (89,017,927) $ 547,501,560
--------------------------------------------------------------------------------
</TABLE>
Intermediate Bond Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 2000 September 30, 1999
------------------------- ------------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold.............. 1,080,246 $ 65,038,868 1,116,432 $ 71,950,904
Shares redeemed.......... (1,801,945) (108,436,973) (1,534,043) (98,321,050)
Shares issued in
reinvestment of
distributions........... 1,330 80,041 131,074 8,571,865
Shares issued in
acquisition of Common
Trust Funds............. 0 0 644,587 40,425,308
-------------------------------------------------------------------------------
Net increase (decrease).. (720,369) (43,318,064) 358,050 22,627,027
-------------------------------------------------------------------------------
Class IS
Shares sold.............. 98,865 5,949,466 151,491 9,815,437
Shares redeemed.......... (80,440) (4,835,642) (128,949) (8,353,458)
Shares issued in
reinvestment of
distributions........... 1,639 98,469 2,481 160,862
-------------------------------------------------------------------------------
Net increase............. 20,064 1,212,293 25,023 1,622,841
-------------------------------------------------------------------------------
Net increase (decrease).. $ (42,105,771) $ 24,249,868
-------------------------------------------------------------------------------
</TABLE>
(a) From November 30, 1999 (commencement of operations).
89
<PAGE>
Combined Notes to Financial Statements(Unaudited) (continued)
International Bond Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 2000 September 30, 1999
------------------------- ------------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold.............. 447,731 $ 4,067,902 1,537,729 $ 14,497,718
Shares redeemed.......... (328,188) (2,915,093) (781,161) (7,361,053)
Shares issued in
reinvestment of
distributions........... 155,951 1,402,963 157,821 1,491,568
-------------------------------------------------------------------------------
Net increase (decrease).. 275,494 2,555,772 914,389 8,628,233
-------------------------------------------------------------------------------
Class IS
Shares sold.............. 6,067 56,107 19,285 182,376
Shares redeemed.......... (14,968) (133,510) (8,315) (77,906)
Shares issued in
reinvestment of
distributions........... 626 5,639 517 4,885
-------------------------------------------------------------------------------
Net increase (decrease).. (8,275) (71,764) 11,487 109,355
-------------------------------------------------------------------------------
Net increase (decrease).. $ 2,484,008 $ 8,737,588
-------------------------------------------------------------------------------
Limited Duration Fund
<CAPTION>
Six Months Ended Year Ended
March 31, 2000 September 30, 1999
------------------------- ------------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold.............. 3,798,593 $ 38,427,260 6,242,085 $ 64,355,655
Shares redeemed.......... (5,740,942) (58,274,960) (6,370,003) (65,521,557)
Shares issued in
reinvestment of
distributions........... 137,742 1,396,878 242,535 2,506,847
Shares issued in
acquisition of Common
Trust Funds............. 0 0 23,719,586 242,317,183
-------------------------------------------------------------------------------
Net increase (decrease).. (1,804,607) (18,450,822) 23,834,203 243,658,128
-------------------------------------------------------------------------------
Class IS
Shares sold.............. 852,061 8,637,978 120,212 1,233,082
Shares redeemed.......... (111,708) (1,128,819) (22,421) (231,406)
Shares issued in
reinvestment of
distributions........... 11,882 120,048 3,301 34,126
-------------------------------------------------------------------------------
Net increase............. 752,235 7,629,207 101,092 1,035,802
-------------------------------------------------------------------------------
Net increase (decrease).. $(10,821,615) $244,693,930
-------------------------------------------------------------------------------
Total Return Bond Fund
<CAPTION>
Six Months Ended Year Ended
March 31, 2000 September 30, 1999
------------------------- ------------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold.............. 94,568 $ 8,543,190 142,731 $ 13,614,331
Shares redeemed.......... (85,971) (7,730,277) (16,673) (1,589,530)
Shares issued in
reinvestment of
distributions........... 48,158 4,371,494 69,113 6,624,642
-------------------------------------------------------------------------------
Net increase............. 56,755 5,184,407 195,171 18,649,443
-------------------------------------------------------------------------------
Class IS
Shares sold.............. 1,156 104,012 71,687 7,020,328
Shares redeemed.......... (68,196) (6,154,412) (7,223) (689,263)
Shares issued in
reinvestment of
distributions........... 1,419 130,045 3,718 356,204
-------------------------------------------------------------------------------
Net increase (decrease).. (65,621) (5,920,355) 68,182 6,687,269
-------------------------------------------------------------------------------
Net increase (decrease).. $ (735,948) $ 25,336,712
-------------------------------------------------------------------------------
</TABLE>
90
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
7. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (excluding
short-term securities) were as follows for the year ended March 31, 2000:
<TABLE>
<CAPTION>
Cost of Purchases Cost of Purchases
--------------------------- ---------------------------
U.S. Non-U.S. U.S. Non-U.S.
Government Government Government Government
-------------------------------------------------------
<S> <C> <C> <C> <C>
Adjustable Rate Fund.... $ 13,411,395 $ 0 $ 25,531,362 $ 0
Core Bond Fund.......... 1,166,684,868 258,894,652 1,067,454,103 259,610,208
Fixed Income Fund....... 569,139,021 97,764,580 538,021,272 124,149,588
High Yield Fund (a)..... 0 58,474,489 0 7,196,876
Income Plus Fund........ 223,302,560 305,010,201 276,259,596 266,286,987
Intermediate Bond Fund.. 0 193,871,664 0 235,127,778
International Bond
Fund................... 0 25,723,207 0 22,484,265
Limited Duration Fund... 4,982,422 74,410,613 10,568,547 61,083,505
Total Return Bond Fund.. 24,265,720 61,036,073 59,299,547 24,712,864
</TABLE>
-------
(a) From November 30, 1999 (commencement of operations) through March 31, 2000.
At March 31, 2000, the International Bond Fund had forward foreign exchange
contracts outstanding as follows:
Forward Foreign Currency Exchange Contracts to Sell:
<TABLE>
<CAPTION>
U.S. Value at In Exchange Unrealized
Exchange Date Contracts to Deliver March 31, 2000 for U.S. $ Gain (Loss)
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
4/28/2000 Euro Dollar $7,812,230 $8,151,143 $338,913
6/27/2000 Euro Dollar 3,207,923 3,223,473 15,550
</TABLE>
The Fixed Income Fund and Income Plus Fund loaned securities during the six
months ended March 31, 2000 to certain brokers who paid the Fund a negotiated
lenders' fee. These fees are included in interest income. At March 31, 2000,
the value of the securities on loan and the value of the collateral (including
accrued interest) and income earned on securities lending, was as follows.
<TABLE>
<CAPTION>
Value of Value of Income
Securities on loan Collateral Earned
----------------------------------------
<S> <C> <C> <C>
Fixed Income Fund..... $141,957,348 $146,257,854 $577,754
Income Plus Fund...... 225,413,406 226,628,000 177,667
</TABLE>
As of September 30, 1999, the following Funds had capital loss carryovers for
federal income tax purposes as follows:
<TABLE>
<CAPTION>
Expiration
Capital Loss ---------------------------------------------
Carryover 2000 2001 2003 2006 2007
----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Adjustable Rate Fund.... $ 634,495 $198,013 $280,866 $43,378 $ 80,791 $ 31,447
Core Bond Fund.......... 336,338 0 0 0 336,338 0
Fixed Income Fund....... 10,509 0 0 10,509 0 0
International Bond
Fund................... 271,657 0 0 0 271,675 0
Limited Duration Fund... 975 0 0 0 0 975
Total Return Bond Fund.. 3,056,175 0 0 0 0 3,056,175
</TABLE>
Core Bond Fund's capital loss carryforward was created as a result of the June
4, 1999 acquisition of substantially all of the assets and assumption of cer-
tain liabilities of the Tattersall Bond Fund in exchange for Core Bond Fund
shares. In accordance with income tax regulations, certain Core Bond Fund gains
may not be used to offset this capital loss carryforward.
During the six months ended March 31, 2000, the Fixed Income Fund and Income
Plus Fund entered into mortgage dollar roll transactions. At March 31, 2000,
the Fixed Income Fund and Income Plus Fund had the following dollar roll agree-
ments outstanding:
<TABLE>
<CAPTION>
Dollar Roll Interest Maturity
Amount Counterparty Rate Date
-----------------------------------------------
<S> <C> <C> <C> <C>
Fixed Income Fund..... $13,000,000 DLJ 8.00% 04/19/2000
15,000,000 Paine Webber 8.50% 04/13/2000
Income Plus Fund...... 19,100,000 Lehman Brothers 8.00% 04/19/2000
</TABLE>
91
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
During the six months ended March 31, 2000, the Fixed Income Fund and Income
Plus Fund earned income on mortgage dollar roll transactions as follows:
<TABLE>
<CAPTION>
Income Earned
-------------
<S> <C>
Fixed Income Fund.................................. $665,288
Income Plus Fund................................... 17,586
</TABLE>
8. EXPENSE REDUCTIONS
The Funds have entered into expense offset arrangements with ESC and their cus-
todian whereby credits realized as a result of uninvested cash balances were
used to reduce a portion of each Fund's related expenses. The assets deposited
with ESC and the custodian under these expense offset arrangements could have
been invested in income-producing assets. The amount of expense reductions re-
ceived by each Fund and the impact of the expense reductions on each Fund's
annualized expense ratio represented as a percentage of its average net assets
were as follows:
<TABLE>
<CAPTION>
Total Expense % of Average
Reductions Net Assets
--------------------------
<S> <C> <C>
Adjustable Rate Fund................. $ 642 0.01%
Core Bond Fund....................... 20,467 0.00%
Fixed Income Fund.................... 11,585 0.00%
High Yield Fund...................... 3,818 0.03%
Income Plus Fund..................... 37,792 0.00%
Intermediate Bond Fund............... 11,879 0.00%
International Bond Fund.............. 13,925 0.01%
Limited Duration Fund................ 11,575 0.01%
Total Return Bond Fund............... 2,843 0.00%
</TABLE>
9. DEFERRED TRUSTEES' FEES
Each Independent Trustee of each Fund may defer any or all compensation related
to performance of their duties as Trustees. The Trustees' deferred balances are
allocated to deferral accounts, which are included in the accrued expenses for
the Fund. The investment performance of the deferral accounts are based on the
investment performance of certain Evergreen Funds. Any gains earned or losses
incurred in the deferral accounts are reported in the Fund's Trustees' fees and
expenses. At the election of the Trustees, the deferral account will be paid
either in one lump sum or in quarterly installments for up to ten years.
10. FINANCING AGREEMENT
On July 27, 1999, certain of the Evergreen Funds and a group of banks (the
"Lenders") entered into a credit agreement. Under this agreement, the Lenders
provided an unsecured revolving credit commitment in the aggregate amount of
$1.050 billion. The credit facility is allocated, under the terms of the fi-
nancing agreement, among the Lenders. The credit facility is accessed by the
Funds for temporary of emergency purposes to fund the redemption of their
shares or a general working capital as permitted by each Fund's borrowing re-
strictions. Borrowings under this facility bear interest at 0.75% per annum
above the Federal Funds rate (1.50% per annum above the Federal Funds rate dur-
ing the period from and including December 1, 1999 through and including Janu-
ary 31, 2000). A commitment fee of 0.10% per annum is incurred on the average
daily unused portion of the revolving credit commitment. The commitment fee is
allocated to all funds. For its assistance in arranging this financing agree-
ment, First Union Capital Markets Corp. was paid a one-time arrangement fee of
$250,000. State Street serves as paying agent for the funds and as paying agent
is entitled to a fee of $20,000 per annum which is allocated to all the funds.
During the six months ended March 31, 2000, the Funds had no significant
borrowings under these agreements.
92
<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
Balanced Fund
Growth
Special Equity Fund
Small Cap Growth Fund
Strategic Growth Fund
Core Equity Fund
Equity Index Fund
Strategic Value Fund
* Minimum investment in an Evergreen
Select Fund is $1,000,000.
64434 543697 5/2000
--------------------------------------------------------------------------------
-------------
[LOGO OF EVERGREEN FUNDS] PRSRT STD
U.S. POSTAGE
200 Berkeley Street PAID
Boston, MA 02116 HUDSON, MA
PERMIT NO. 19
-------------
