<PAGE>
September 30, 2000
Evergreen Select
Fixed Income Funds
Annual Report
[LOGO OF EVERGREEN FUNDS] [SEAL]
<PAGE>
Table of Contents
Letter to Shareholders 1
Evergreen Select Adjustable Rate Fund
Fund at a Glance 2
Portfolio Manager Commentary 3
Evergreen Select Core Bond Fund
Fund at a Glance 5
Portfolio Manager Commentary 6
Evergreen Select Fixed Income Fund
Fund at a Glance 8
Portfolio Manager Commentary 9
Evergreen Select Fixed Income Fund II
Fund at a Glance 11
Portfolio Manager Commentary 12
Evergreen Select High Yield Bond Fund
Fund at a Glance 14
Portfolio Manager Commentary 15
Evergreen Select Income Plus Fund
Fund at a Glance 18
Portfolio Manager Commentary 19
Evergreen Select Intermediate Term Municipal Bond Fund
Fund at a Glance 21
Portfolio Manager Commentary 22
Evergreen Select International Bond Fund
Fund at a Glance 24
Portfolio Manager Commentary 25
Evergreen Select Limited Duration Fund
Fund at a Glance 27
Portfolio Manager Commentary 28
Financial Highlights
Evergreen Select Adjustable Rate Fund 30
Evergreen Select Core Bond Fund 33
Evergreen Select Fixed Income Fund 34
Evergreen Select Fixed Income Fund II 35
Evergreen Select High Yield Bond Fund 36
Evergreen Select Income Plus Fund 37
Evergreen Select Intermediate Term Municipal Bond Fund 38
Evergreen Select International Bond Fund 39
Evergreen Select Limited Duration Fund 40
Schedules of Investments
Evergreen Select Adjustable Rate Fund 41
Evergreen Select Core Bond Fund 43
Evergreen Select Fixed Income Fund 50
Evergreen Select Fixed Income Fund II 57
Evergreen Select High Yield Bond Fund 60
Evergreen Select Income Plus Fund 65
Evergreen Select Intermediate Term Municipal Bond Fund 74
Evergreen Select International Bond Fund 80
Evergreen Select Limited Duration Fund 83
Combined Notes to Schedules of Investments 88
Statements of Assets and Liabilities 89
Statements of Operations 91
Statements of Changes in Net Assets 93
Combined Notes to Financial Statements 99
Independent Auditors' Report 112
Additional Information 113
Evergreen Funds
Evergreen Funds is one of the nation's fastest growing investment companies with
more than $80 billion in assets under management. We offer over 80 mutual funds
to choose among and acclaimed service and operations capabilities, giving
investors a broad range of quality investment products and services designed to
meet their needs.
The Evergreen Funds employ intensive, research-driven investment strategies
executed by over 90 research analysts and portfolio managers. The fund company
remains dedicated to meeting the needs of investors and their advisors in a
global economy. Look to Evergreen Funds to provide a distinctive level of
service and excellence in investment management.
This annual report must be preceded or accompanied by a prospectus of an
Evergreen fund contained herein. The prospectus contains more complete
information, including fees 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 FundsSM is a service mark of Evergreen Investment Services, Inc.
<PAGE>
Letter to Shareholders
----------------------
November 2000
Dear Evergreen Shareholders,
We are pleased to provide the Evergreen Select Fixed Income Funds annual report,
which covers the twelve-month period ended September 30, 2000.
[PHOTO]
William M. Ennis
[PHOTO]
Dennis H. Ferro
Bond Markets React to Volatile Equity Markets
Over the past year, U.S. bond markets experienced significant turmoil, which was
largely overshadowed by the volatility in the stock market. Bond prices fell and
interest rates rose in the first half of the period as the Federal Reserve Board
increased interest rates in an effort to curtail what they believed was an
overheated economy. Reports that second quarter economic growth might have
heated up again drove the Federal Reserve Board to notch rates up again in May
and caused bond prices to drop further.
Investor demand for bonds is typically closely linked to the performance of the
stock market, but when the equity markets are volatile, investors buy bonds to
preserve gains rather than to generate returns. By some measures, bonds produced
relatively attractive returns in 2000. For example, for the nine-month period
beginning December 31, 1999 through September 30, 2000, the Lehman Brothers
Aggregate Bond Index, which measures 6,600 taxable government investment-grade
corporate and mortgage securities, returned 7.12%. This outperformed the
Standard & Poor's 500 Index return of -1.39% for the same period.
The S & P 500 tracks 500 of the most widely held domestic, large-company stocks,
representing about 70% of the U.S. stock market's total value.
While it appears that the Federal Reserve Board's monetary policy has begun to
ease, we believe that it is too soon to tell. Additionally, we think that the
economy is poised for a slowdown, which may push bond prices higher and interest
rates lower. In this environment, we will maintain a defensive posture and
remain cautiously optimistic about the continued growth of the U.S. economy.
The Value of Diversification
An environment like this year's offers many reasons for building a diversified
portfolio rather than trying to predict the market's movements. Diversification
provides exposure to many different opportunities while reducing the risk of any
single investment or strategy. We encourage you to talk to your financial
advisor to confirm that your investment portfolio is appropriately diversified
and structured to support your long-term investment objectives.
Thank you for your continued investment in Evergreen Funds.
Sincerely,
/s/ William M. Ennis
William M. Ennis
President and CEO
Evergreen Investment Company, Inc.
/s/ Dennis Ferro
Dennis Ferro
Chief Investment Officer
First Union National Bank
Capital Management Group
1
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Fund at a Glance as of September 30, 2000
--------------------------------------------------------------------------------
PORTFOLIO PROFILE
--------------------------------------------------------------------------------
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
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads, fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that investors' shares, when redeemed, may be worth more or
less than their original cost. Performance includes the reinvestment of income
dividends and capital gain distributions.
Historical performance shown for Classes A, B, C and IS prior to inception is
based on the performance of Class I Shares. These historical returns have not
been adjusted to reflect the effect of each class' 12b-1 fees. The Fund incurs
12b-1 expenses of 0.21% for Class A. This rate is based on 0.25% on assets prior
to 1/1/1997 and 0.10% assessed on new assets from 1/1/1997. The fees are 0.25%
for Class IS and 1.00% for Classes B and C. 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.
Class I and IS shares are only available to institutional shareholders with a
minimum $1 million investment. Class I and IS shares do not incur sales charges.
Had sales charges been included, returns would have been lower.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/1/
--------------------------------------------------------------------------------
Portfolio Inception
Date: 10/1/1991 Class A Class B Class C Class I Class IS
Class Inception Date 6/30/2000 6/30/2000 6/30/2000 10/1/1991 5/23/1994
Average Annual
Returns*
1 year 2.50% 0.75% 3.73% 6.05% 5.79%
5 years 5.48% 5.82% 6.13% 6.19% 6.04%
Since Portfolio
Inception 5.16% 5.53% 5.53% 5.57% 5.40%
Maximum Sales 3.25% 5.00% 2.00% n/a n/a
Charge Front End CDSC CDSC
30-day SEC Yield 6.20% 5.41% 5.40% 6.41% 6.15%
12-month income
dividends per share $0.16 $0.14 $0.14 $0.60 $0.58
*Adjusted for maximum applicable sales charge.
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
Select Adjustable Rate
Fund Class I Consumer Price Index - US SBr 6-Mth Treas Bill
------------------------ ------------------------- --------------------
<S> <C> <C> <C>
10/01/91 1,000,000 1,000,000 1,000,000
09/30/92 1,054,077 1,029,883 1,044,943
09/30/93 1,112,259 1,057,580 1,079,307
09/30/94 1,128,246 1,088,921 1,120,468
09/30/95 1,205,675 1,116,618 1,186,745
09/30/96 1,288,329 1,150,146 1,251,426
09/30/97 1,385,846 1,174,927 1,319,446
09/30/98 1,462,678 1,192,420 1,390,509
09/30/99 1,535,233 1,223,761 1,456,911
09/30/00 1,628,107 1,266,505 1,540,423
</TABLE>
Comparison of a $1,000,000 investment in Evergreen Select Adjustable Rate Fund,
Class I shares/1/, versus a similar investment in the 6-Month Treasury Bill (6
Mo. T-Bill) and the Consumer Price Index (CPI).
The 6-Mo. T-Bill does not include transaction costs associated with buying and
selling securities or any mutual fund expenses. The CPI is a commonly used
measure of inflation and does not represent an investment return. It is not
possible to invest directly in an index.
U.S. government guarantees apply only to the underlying securities of the Fund's
portfolio and not to the Fund's shares.
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
All data is as of September 30, 2000 and subject to change.
2
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO]
Gary Pzegeo
Tenure: October 1991
Performance
Evergreen Select Adjustable Rate Fund's Class I Shares returned 6.05% for the
twelve-month period ended September 30, 2000, surpassing the 5.29% average
return of the 19 Adjustable Rate Mortgage Funds followed by Lipper, Inc. and the
5.89% return for the Fund's benchmark, the 6-Month Treasury Bill for the same
period. Lipper, Inc. is a mutual fund ranking service. Returns do not reflect
the effects of sales charges. We attribute the strong relative performance to
careful asset allocation, as well as the accurate anticipation of interest rate
movement.
Portfolio
Characteristics
-----------------
(as of 9/30/2000)
Total Net Assets $88,488,612
Average Credit Quality AAA
Effective Maturity 4.6 years
Average Duration 0.9 years
Environment
Investment conditions changed dramatically over the past twelve months. As the
period opened, the Federal Reserve Board was in the midst of raising interest
rates to cool a potentially overheating economy. Real Gross Domestic Product
(GDP)--the total output of the economy's goods and services adjusted for
inflation--had grown at an impressive annualized rate of 7.3% in the fourth
quarter of 1999, significantly outpacing the 10-year annualized average of 3.2%.
Further, tight labor markets and rising energy prices prompted concerns that
inflationary pressures could begin to build. The Federal Reserve Board continued
raising interest rates through May 2000. At that time, the economy began to show
signs of slowing and the Federal Reserve Board adopted a more neutral interest
rate stance. The slower, but still solid rate of growth continued through the
fiscal period, and inflation--with the exception of oil prices--remained low.
Within this atmosphere, investor confidence grew and prices moved higher.
3
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Portfolio Manager Commentary
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 9/30/2000 portfolio assets)
[GRAPH]
Mortgage-Backed Securities -- 95.8%
U.S. Treasury Obligations -- 3.0%
Mutual Fund Shares -- 1.2%
Strategy
Throughout the year, our strategy focused on building and protecting income. In
accordance with that goal, we adjusted the Fund's positions in U.S. Treasury and
agency securities relative to its investment in adjustable rate mortgage
securities (ARMS), depending upon our interest rate outlook. We started the
period with a heavier position in U.S. Treasuries and agencies, lightening up
holdings as a higher rate environment became more likely, in our opinion, and
ARMS appeared to be attractively valued. As the impact of higher rates began to
take hold of the economy, we added to the Fund's "hybrid" mortgage position. The
coupons of hybrid mortgages are fixed for three or five years before they begin
to change annually. In addition to providing a greater and more predictable cash
flow for a longer period of time, they increased the Fund's duration, or
sensitivity to interest rate changes. Lengthening duration increases a fund's
sensitivity and conversely, shortening duration enhances price stability. The
Fund's longer duration improved performance as interest rates fell. Our decision
to choose hybrid-ARMS over fixed-rate U.S. Treasuries or agencies was based on
our opinion that hybrid-ARMS offered better value.
Outlook
We believe the economy is poised for a slowdown, pushing bond prices higher and
interest rates lower over the next year. We think business spending will
decline, resulting in lower employment and slower economic growth as higher
expenses, including labor and energy, push the cost of doing business higher and
factors such as increased competition and weaker commodity prices put pressure.
In anticipation of lower interest rates, we intend to increase the Fund's
holdings in fixed-rate securities to secure the highest rate of interest for the
longest period of time. In the meantime, we believe the Fund's ARMS position may
provide a cushion of income as interest rates fall. ARMS lag the actual movement
of interest rates; and if interest rates fall, the older, higher rates should
provide an attractive level of income to the Fund's shareholders.
4
<PAGE>
EVERGREEN
Select Core Bond Fund
Fund at a Glance as of September 30, 2000
--------------------------------------------------------------------------------
PORTFOLIO PROFILE
--------------------------------------------------------------------------------
Philosophy
The Evergreen Select Core Bond Fund is designed to maximize total return by
focusing on current income and identifying opportunities to capture capital
gains. The portfolio maintains a bias toward corporate and mortgage securities
in order to capture higher levels of income.
Process
The portfolio managers seek to enhance performance, while pursuing a controlled
risk approach, by actively managing three specific characteristics within the
portfolio: duration, sector allocation, and security selection. The managers use
both quantitative tools and fundamental research in order to determine an
appropriate duration strategy as well as enhance the sector allocation and
security selection processes.
Benchmarks
Lehman Brothers Aggregate Bond Index
Lehman Brothers Government/Credit Index
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that investors' shares, when redeemed, may be worth more or
less than their original cost. Performance includes the reinvestment of income
dividends 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 from
12/13/1990 to 6/4/1999. 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, from 10/2/1997 to 6/4/1999 and (2) the Class I
shares of Tattersall Bond Fund from 12/13/1990 to 10/2/1997 which have not been
adjusted to reflect the 0.25% 12b-1 fee paid by Class IS 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.
Class I and IS shares are only available to institutional shareholders with a
minimum $1 million investment. Class I and IS shares do not incur sales charges.
Had sales charges been included, returns would have been lower.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/1/
--------------------------------------------------------------------------------
Portfolio Inception Date: 12/13/1990 Class I Class IS
Class Inception Date 12/13/1990 10/2/1997
Average Annual Returns
1 year 6.60% 6.33%
5 years 6.61% 6.47%
Since Portfolio Inception 7.32% 7.25%
30-day SEC Yield 6.65% 6.40%
12-month income divdends per share $0.63 $0.60
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
Select Core Bond
Fund Class I Consumer Price Index - US Lehman Brothers Aggregate Bond Lehman Brothers Govt/Credit
------------------ ------------------------- ------------------------------ ---------------------------
<S> <C> <C> <C> <C>
12/13/90 1,000,000 1,000,000 1,000,000 1,000,000
9/30/91 1,082,833 1,025,411 1,121,248 1,119,083
9/30/92 1,204,762 1,056,054 1,261,950 1,267,172
9/30/93 1,309,938 1,084,454 1,387,845 1,412,195
9/30/94 1,273,028 1,116,592 1,343,093 1,353,687
9/30/95 1,451,946 1,144,993 1,531,946 1,547,990
9/30/96 1,528,510 1,179,372 1,607,016 1,617,690
9/30/97 1,681,342 1,204,783 1,763,112 1,772,807
9/30/98 1,873,933 1,222,720 1,966,033 2,000,921
9/30/99 1,874,940 1,254,858 1,958,655 1,968,124
9/30/00 1,998,737 1,298,688 2,095,502 2,100,412
</TABLE>
Comparison of a $1,000,000 investment in Evergreen Select Core Bond Fund, Class
I shares/1/, versus a similar investment in the Lehman Brothers Aggregate Bond
Index (LBABI), the Lehman Brothers Government/Credit Index (LBGCI) and the
Consumer Price Index (CPI).
The LBABI and LBGCI are unmanaged market indices which do not include
transaction costs associated with buying and selling securities or any mutual
fund expenses. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
U.S. government guarantees apply only to the underlying securities of the Fund's
portfolio and not to the Fund's shares.
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
All data is as of September 30, 2000 and subject to change.
5
<PAGE>
EVERGREEN
Select Core Bond Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO]
Fred Tattersall
Team Leader
Tenure: June 1999
Performance
Evergreen Select Core Bond Fund's Class I shares returned 6.60% for the
twelve-month period ended September 30, 2000. The Lehman Brothers Aggregate Bond
Index returned 6.99%, while the Lehman Brothers Government/Credit Index returned
6.74%.
Portfolio
Characteristics
-----------------
(as of 9/30/2000)
Total Net Assets $1,305,342,743
Average Credit Quality AAA
Effective Maturity 9.0 years
Average Duration 4.9 years
Environment
The inversion of the Treasury yield curve was a significant event for the bond
market this year. This was due to the Federal Reserve Board tightening which
caused short-term interest rates to rise, as well as to the perceived scarcity
of long-term Treasuries, which kept pressure on long-term interest rates to
fall. Another major influence on the bond market was the growing perception
among investors that gains in productivity would offset the tendency for prices
to rise and that inflation would not become a problem despite the existence of
what the Federal Reserve Board referred to as supply/demand imbalances. Finally,
as the year progressed, the "soft landing" scenario appeared to be unfolding as
more reality than theory. Taken together, these influences had different effects
on different maturities of the Treasury yield curve as 3-month Treasury bills
rose 1.35% in yield during the fiscal year, the 2-year Treasury security rose
0.38%, and the 5-year rose 0.09%, while the 10 and 30-year Treasury securities
fell 0.07% and 0.17% in yield, respectively. The other major sectors of the
market, corporates and mortgages, did not fare as well as the Treasury sector.
This caused their yields to increase relative to Treasury yields.
6
<PAGE>
EVERGREEN
Select Core Bond Fund
Portfolio Manager Commentary
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 9/30/2000 portfolio assets)
[GRAPH]
Mortgage-Backed Securities -- 34.3%
Corporate Bonds -- 27.7%
U.S. Treasury Obligations -- 12.0%
Collateralized Mortage Obligations -- 10.1%
Repurchase Agreements -- 7.3%
Mutual Fund Shares -- 5.7%
Asset-Backed Securities -- 2.9%
Strategy
Since interest rates did not move dramatically during the past twelve months,
the average maturity and duration of the Fund was kept close to that of the
LBABI (the "Index"). The sector weightings between the Fund and the Index were
very different, however. The portfolio was over-weighted in corporates,
especially in long-term "A"-rated industrial credits where there was tremendous
value. The portfolio was also over-weighted in mortgages, especially those
mortgages whose structures protected them from untimely and unforeseen
prepayments. The tremendous value in both of these sectors went largely
unnoticed by investors in their rush to own mainly Treasury securities.
Closed-end bond funds performed well during the last year as discount narrowed
to net asset values.
--------------------------------------------------------------------------------
PORTFOLIO QUALITY
--------------------------------------------------------------------------------
(based on 9/30/2000 market value of bonds)
[GRAPH]
AAA -- 66.0%
AA -- 10.0%
A -- 15.0%
BBB/NA -- 9.0%
Outlook
The value in non-Treasury sectors is just too hard to ignore. The portfolio will
maintain its over-weightings in corporates and mortgages relative to the Index
until the yields these sectors provide over Treasury securities returns to a
normal amount as measured by history or until the yield of mortgages and
corporates no longer compensates the investor for their risk. The risk of owning
corporates is credit risk while the risk of owning mortgages is prepayment risk.
The maturity strategy will be one of staying close to the average maturity of
the Index until the next major trend in interest rates is established.
7
<PAGE>
EVERGREEN
Select Fixed Income Fund
Fund at a Glance as of September 30, 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/Credit Index
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that investors' shares, when redeemed, may be worth more or
less than their original cost. Performance includes the reinvestment of income
dividends and capital gain distributions.
Historical performance shown for Class IS shares from 11/24/1997 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 pays no 12b-1 fee. If these fees had been reflected,
returns would have been lower. Prior to 11/24/1997, the returns for Classes I
and IS 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.
Class I and IS shares are only available to institutional shareholders with a
minimum $1 million investment. Class I and IS shares do not incur sales charges.
Had sales charges been included, returns would have been lower.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/1/
--------------------------------------------------------------------------------
Portfolio Inception Date: 3/31/1977 Class I Class IS
Class Inception Date 11/24/1997 3/9/1998
Average Annual Returns
1 year 6.82% 6.55%
5 years 5.86% 5.59%
10 years 6.89% 6.62%
30-day SEC Yield 6.73% 6.48%
12-month income dividends per share $0.37 $0.36
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
Select Fixed
Income Fund Class I Consumer Price Index - US Lehman Brothers Interm Govt/Credit
--------------------- ------------------------- ----------------------------------
<S> <C> <C> <C>
9/30/90 1,000,000 1,000,000 1,000,000
9/30/91 1,131,434 1,033,911 1,138,537
9/30/92 1,259,557 1,064,808 1,283,375
9/30/93 1,359,029 1,093,444 1,388,880
9/30/94 1,325,980 1,125,848 1,365,887
9/30/95 1,464,884 1,154,484 1,520,063
9/30/96 1,538,912 1,189,148 1,598,070
9/30/97 1,655,244 1,214,770 1,729,004
9/30/98 1,808,275 1,232,856 1,909,302
9/30/99 1,823,108 1,265,260 1,921,286
9/30/00 1,947,581 1,309,454 2,041,034
</TABLE>
Comparison of a $1,000,000 investment in Evergreen Select Fixed Income Fund,
Class I shares/1/, versus a similar investment in the Lehman Brothers
Intermediate Government/Credit Index (LBIGCI) and the Consumer Price Index
(CPI).
The LBIGCI is an unmanaged market index which does not include transaction costs
associated with buying and selling securities or any mutual fund expenses. The
CPI is a commonly used measure of inflation and does not represent an investment
return. It is not possible to invest directly in an index.
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.
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
All data is as of September 30, 2000 and subject to change.
8
<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 twelve-month period ended September 30, 2000, the Evergreen Select Fixed
Income Fund Class I posted a 6.82% total return, exceeding the 6.25% total
return of the Lehman Brothers Intermediate Government/Credit Index by 0.37%. The
Fund's performance this past year is attributable mainly to good sector
allocation decisions and individual security selection.
Portfolio
Characteristics
---------------
(as of 9/30/2000)
Total Net Assets $567,140,646
Average Credit Quality AA
Effective Maturity 4.8 years
Average Duration 3.5 years
Environment
Interest rates over the past year were driven initially higher based on an
expectation of continued high levels of economic growth, fears of increasingly
higher inflation rates, and the resultant continuation of a restrictive monetary
policy. However, after yields reached peaks of almost 7.0% on both 2-year and
10-year Treasuries in the first half of the year, yields retreated to almost
where they began by year-end. Yields fell nearly 1.0% over the last 6 months, as
it became apparent that the pace of economic growth was slowing, that the
pressure on inflation remained under control, and that the Federal Reserve Board
could "remain on hold" and refrain from increasing rates further. Currently,
2-year rates stand at 5.96% and 10-year rates at 5.83%.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 9/30/2000 portfolio assets)
[GRAPH]
Corporate Bonds -- 25.1%
Collateralized Mortgage Obligations -- 15.8%
U.S. Treasury Obligations -- 15.0%
Mortgage-Backed Securities -- 14.4%
Commercial Paper -- 11.6%
Yankee Obligations -- 5.6%
U.S. Government Agency Obligations -- 5.4%
Asset-Backed Securities -- 4.7%
Mutual Fund Shares -- 2.4%
9
<PAGE>
EVERGREEN
Select Fixed Income Fund
Portfolio Manager Commentary
Strategy
The focus of our portfolio strategy over the past year concentrated on sector
weightings and individual security selection. Although we made slight duration
adjustments during the year, our duration strategy centered around a neutral
weighting. Duration strategy had a slight positive impact on portfolio returns.
The largest positive impact on returns, was the overweightings we built into the
portfolio in corporates and mortgages, as yield spreads on those sectors widened
to very attractive levels. We have also recently increased weightings in Federal
Agencies as well. We currently continue to hold over-weightings in each of these
sectors. As we have reported in the past, the portfolio continues to generate
additional incremental income from both securities lending and mortgage
dollar-roll activities.
--------------------------------------------------------------------------------
PORTFOLIO QUALITY
--------------------------------------------------------------------------------
(based on 9/30/2000 market value of bonds)
[GRAPH]
AAA -- 48.4%
AA -- 9.2%
A -- 20.8%
BBB & lower/NA/NR -- 21.6%
Outlook
Although it is apparent that Federal Reserve Board's monetary policy remains on
hold, we believe that it may be too early to expect the Federal Reserve Board to
begin to ease. The market, however, has become more optimistic, with 2 year
rates already reflecting as much as a 0.50% decrease. For the moment, we will
keep duration neutral. At this point, potential shocks from the price of oil,
turmoil around the world (especially the Middle East), and a further decline in
the stock market make the reward of duration exposure not worth the risk. We
enter the next twelve months with the belief that the best opportunities to
outperform lie in continued over-weightings to corporates, agencies, and
mortgages.
10
<PAGE>
EVERGREEN
Select Fixed In come Fund II
Fund at a Glance as of September 30, 2000
--------------------------------------------------------------------------------
PORTFOLIO PROFILE
--------------------------------------------------------------------------------
Philosophy
The Evergreen Select Fixed Income Fund II seeks to achieve a high level of total
return through diversified portfolios of primarily high quality fixed-income
securities.
Process
Portfolio management emphasizes sector rotation, term structure allocation, high
credit quality, and individual security valuation. The manager uses a
combination of quantitatively driven security selection and regular portfolio
repositioning to enhance returns above those available from more passive
management approaches.
Benchmark
Lehman Brothers Aggregate Bond Index
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that investors' shares, when redeemed, may be worth more or
less than their original cost. Performance includes the reinvestment of income
dividends and capital gain distributions.
Historical performance shown for Class IS shares prior 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.
Class I and IS shares are only available to institutional shareholders with a
minimum $1 million investment. Class I and IS shares do not incur sales charges.
Had sales charges been included, returns would have been lower.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/1/
--------------------------------------------------------------------------------
Portfolio Inception Date: 12/6/1994 Class I Class IS
Class Inception Date 12/6/1994 10/18/1999
Average Annual Returns
1 year 6.68% 6.36%
5 years 5.83% 5.77%
Since Portfolio Inception 7.40% 7.34%
30-day SEC Yield 7.15% 6.94%
11-month income dividends per share $0.92 $0.89
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
Select Fixed Income Fund II Consumer Price Index - US Lehman Brothers Aggregate Bond
--------------------------- ------------------------- ------------------------------
<S> <C> <C> <C>
12/6/94 1,000,000 1,000,000 1,000,000
9/30/95 1,140,790 1,023,380 1,144,169
9/30/96 1,188,287 1,054,108 1,200,237
9/30/97 1,299,667 1,076,820 1,316,820
9/30/98 1,430,138 1,092,852 1,468,377
9/30/99 1,419,675 1,121,576 1,462,867
9/30/00 1,514,405 1,160,752 1,565,074
</TABLE>
Comparison of a $1,000,000 investment in Evergreen Select Fixed Income Fund II,
Class I shares/1/, versus a similar investment in the Lehman Brothers Aggregate
Bond Index (LBABI), and the Consumer Price Index (CPI).
The LBABI is an unmanaged market index which does not include transaction costs
associated with buying and selling securities or any mutual fund expenses. The
CPI is a commonly used measure of inflation and does not represent an investment
return. It is not possible to invest directly in an index.
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.
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
All data is as of September 30, 2000 and subject to change.
11
<PAGE>
EVERGREEN
Select Fixed In come Fund II
Portfolio Manager Commentary
Portfolio Management
[PHOTO]
J.P. Weaver
Tenure: August 2000
Performance
For the twelve-month period ended September 30, 2000, the Evergreen Select Fixed
Income Fund II Class I shares returned 6.68%. These results slightly lagged the
Fund's benchmark, the Lehman Brothers Aggregate Bond Index, which returned 6.99%
for the same period. The Fund's twelve-month returns placed it in the top
quartile of its Lipper peer universe.
Portfolio
Characteristics
-----------------
(as of 9/30/2000)
Total Net Assets $60,730,401
Average Credit Quality AAA
Effective Maturity 8.8 years
Average Duration 5.1 years
Environment
The Federal Reserve Board, concerned about a potentially overheating economy,
sought to bring growth rates more in line with the economy's potential by
raising rates during most of the last year. Overall, they have succeeded. Equity
markets have come back to earth and tightening liquidity conditions are making
it more difficult for companies to borrow to fund growth initiatives. These
trends have created an inhospitable climate for credit risk in the form of
corporate bonds. Corporate bond yields have climbed to their widest spreads over
Treasury bonds in over a decade. Recently, rising oil prices, frequent negative
corporate profit warnings, and deflating equity prices have compounded the
damage to corporate bond returns. In the mortgage sector, recent interest rate
stability, well-balanced real estate supply and demand fundamentals, and steady
demand for mortgage bonds by risk adverse investors have kept returns steady.
12
<PAGE>
EVERGREEN
Select Fixed Income Fund II
Portfolio Manager Commentary
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 9/30/2000 portfolio assets)
[GRAPH]
Mortgage-Backed Securities -- 48.4%
Asset-Backed Securities -- 15.6%
U.S. Treasury Obligations -- 14.3%
Corporate Bonds -- 12.6%
Yankee Obligations -- 4.2%
Mutual Fund Shares -- 2.9%
Collateralized Mortgage Obligations -- 2.0%
Strategy
The Fund's strong performance during fiscal year 2000 relates to the employment
of three key strategies. First, we maintained a lower weighting in corporate
bonds whose returns were the lowest among the major fixed income asset classes.
Secondly, we maintained a shorter interest rate duration profile as the Federal
Reserve Board was raising rates, which gave us a lower sensitivity to rising
rates. Lastly, we maintained an overweighting in mortgage and asset backed
securities which provided a high level of coupon income. Mortgage and asset
backed securities were not as adversely affected by market developments as were
corporate bonds.
The Fund had an underexposure to Treasury securities, which experienced the
strongest market price appreciation of the major bond sectors. The Fund was also
under-weighted (3% out of an allowable 10%) in below investment grade issues.
Returns in this sector trailed the overall Lehman Brothers Aggregate Bond Index
returns by 5% during the period and reduced the Fund's total return by 0.2%
relative to its index.
--------------------------------------------------------------------------------
PORTFOLIO QUALITY
--------------------------------------------------------------------------------
(based on 9/30/2000 market value of bonds)
[GRAPH]
AAA -- 82.0%
AA -- 1.6%
A -- 7.6%
BBB -- 7.3%
BB & lower/NR -- 1.5%
Outlook
Based on the continued inability of the corporate bond market to judiciously
price risk, we believe that the Select Fixed Income Fund II's overly-weighted
position in mortgage and asset backed securities is the best recipe for
continued strong and steady returns. We believe the recent negative trends in
the corporate bond market may have more room to play itself out and the Fund
will "keep our powder dry" until some semblance of stability returns. In the
meantime, we believe the Fund will continue to reap the benefit of high current
yield in the mortgage sector. We anticipate raising our allocation eventually to
the corporate bond arena. For now, however, we will seek to maintain the Fund's
high-income levels through the alternative yield enhancing sectors.
13
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Fund at a Glance as of September 30, 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
Rating Services ("S&P") or Moody's Investors Service, Inc. ("Moody's") 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 Bond Index
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that investors' shares, when redeemed, may be worth more or
less than their original cost. Performance includes the reinvestment of income
dividends 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.
Class I and IS shares are only available to institutional shareholders with a
minimum $1 million investment. Class I and IS shares do not incur sales charges.
Had sales charges been included, returns would have been lower.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/1/
--------------------------------------------------------------------------------
Portfolio Inception Date: 11/30/1999 Class I Class IS
Class Inception Date 11/30/1999 11/30/1999
Cumulative Returns
Since Portfolio Inception 2.82% 2.59%
30-day SEC Yield 9.25% 9.18%
10-month income dividends per share $0.70 $0.67
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
Select High Yield
Bond Fund Class I Consumer Price Index - US Merrill Lynch High Yield Bond
------------------------ ------------------------- -----------------------------
<S> <C> <C> <C>
11/30/99 1,000,000 1,000,000 1,000,000
12/31/99 1,003,440 1,000,000 1,005,250
1/31/00 995,252 1,002,971 1,002,999
2/29/00 995,690 1,008,913 1,003,862
3/31/00 986,470 1,017,231 989,828
4/30/00 999,590 1,017,825 990,173
5/31/00 984,196 1,019,014 979,271
6/30/00 999,845 1,024,361 996,037
7/31/00 1,014,843 1,026,738 1,003,089
8/31/00 1,026,919 1,027,332 1,015,336
9/30/00 1,028,254 1,032,469 1,009,408
</TABLE>
Comparison of a $1,000,000 investment in Evergreen Select High Yield Bond Fund,
Class I shares/1/, versus a similar investment in the Merrill Lynch High Yield
Master Bond Index (MLHYMBI) and the Consumer Price Index (CPI).
The MLHYMBI is an unmanaged market index, which does not include transaction
costs associated with buying and selling securities or any mutual fund expenses.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
Fund performance is extremely short-term and as such may not give investors an
adequate basis for evaluating the fund's performance potential over varying
market conditions or economic cycles. Unusual investment returns may be due to
the funds recent inception, existing market and economic conditions and the
increased potential of a small number of securities effecting fund performance
due to the smaller asset size. Investments in most mutual funds are intended to
be long-term investments.
Funds that invest in high yield, lower-rated bonds may contain more risks due to
the increased possibility of default.
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
All data is as of September 30, 2000 and subject to change.
14
<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 2.82% since the
Fund's inception on November 30, 1999, surpassing its benchmark, the Merrill
Lynch High Yield Master Bond Index, which returned 0.68%. We attribute the
Fund's strong relative performance to careful security selection and the Fund's
focus on higher-tier credits within the high yield bond market. The Fund invests
only in the top two credit tiers of the high yield market, specifically,
securities rated "BB" and "B". Further, the Fund does not invest in certain
securities that typically carry higher risk, including foreign bonds, preferred
stocks, pay-in-kind securities and zero coupon bonds.
We believe the key factor in the Fund's performance was accurate credit
analysis. Our team of professionals thoroughly analyze and constantly monitor
the Fund's investments. This diligence was particularly important over the past
ten months because many corporations incurred sharp, rapid changes in their
financial conditions. We maintained holdings only in those companies that met
our high credit standards, selling positions as soon as we recognized any
negative credit developments.
Portfolio Characteristics
-------------------------
(as of 9/30/2000)
Total Net Assets $75,204,878
Average Credit Quality B
Effective Maturity 7.2 years
Average Duration 4.3 years
Environment
Market conditions were extremely challenging for high yield bond investors over
the past ten months. By the end of the period, however, yield levels had reached
extremely attractive levels based on historical standards. Rapid and dramatic
changes in the financial conditions of many companies, as well as deterioration
in industries that historically represented relative safe-havens for high yield
investors, underscored the importance of diligent credit monitoring. Always an
important component of high yield investing, credit analysis became the key
factor in either securing opportunity or being consumed by credit declines.
Financial conditions often changed faster than reflected by rating agencies;
and, as result, credit ratings often were not a reliable gauge of a company's
actual financial health. Reflecting the challenging environment, the default
rate had doubled just prior to the beginning of the fiscal period; and further,
the number of companies considered to be in financial distress moved higher over
the past ten months. The Merrill Lynch Distress Ratio--defined as the percentage
of high yield bonds trading at 10 points higher in yield than U.S. Treasuries
with comparable maturities, rose from 13% in January 2000 to nearly 20% by the
end of the Fund's fiscal period--the highest levels since the early 1990's. To
add perspective, the Distress Ratio stood at 5% in July 1998; and at the peak of
the international financial crisis in the fall of 1998, the Distress Ratio was
approximately 15%. Certain
15
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Portfolio Manager Commentary
industries endured higher default rates than others. Telecommunications, known
for its high level of risk, as well as its potential for extraordinary returns,
had the highest default rate, year-to-date for the period ended September 30,
2000. Approximately 25% of the bonds that defaulted on their debt payments,
year-to-date through September 30, 2000, were in the telecommunications
industry. Supermarkets and food producers had the second and third highest
default rates, respectively, for the same period. Historically, investors have
considered these industries to have relatively low risk.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 9/30/2000 portfolio assets)
[GRAPH]
Corporate Bonds -- 79.4%
Mutual Fund Shares -- 11.3%
Yankee Obligations -- 9.3%
Strategy
Our investment strategy focused on bottom-up, rigorous security analysis and
selection. We favored companies and industries that demonstrated the ability to
generate ample free cash flow after debt service and capital expenditures. We
also emphasized larger, liquid issues to maximize trading flexibility. We
under-weighted the Fund in bonds issued from deals smaller than $150 million. We
also invested in industries that were less cyclical--less sensitive to the ups
and downs of economic cycles--as well as in companies that had pricing power
over their products. We over-weighted the Fund in the energy sector, paper and
forest products. With oil prices rising, energy was a strong performer as well
as paper and forest products which benefited from higher pulp and liner board
prices. We also emphasized cable, gaming and publishing. Cable companies
continued to generate steady cash flows and gaming has just completed an
expansion phase. Typically, the publishing industry produces solid cash flows
and also has been experiencing some consolidation--an event that tends to push
associated bond prices higher. We under-weighted the Fund in
telecommunications--the market's most volatile and highest risk sector--since we
found few companies that met our standards regarding free cash flow and proven
business strategies. The Fund also was over-weighted in "BB" and "BBB"-rated
credits. "BBB" is considered to be "investment grade" rather than "high yield".
However, several holdings were up-graded because of business improvements or
merger activity.
--------------------------------------------------------------------------------
PORTFOLIO QUALITY
--------------------------------------------------------------------------------
(based on 9/30/2000 market value of bonds)
[GRAPH]
BBB -- 5.0%
BB -- 35.9%
B -- 59.1%
Outlook
We are cautiously optimistic about high yield bonds in the months ahead. While
we would not be surprised to see the default rate rise somewhat, yield levels
make the value of high yield bonds compelling. The Merrill Lynch Garman Model,
which measures the value of the high yield market as an asset class, recently
generated a "buy" signal. In the past 15 years, the Model has indicated a buy or
sell opportunity only four or five times. The last signal was to buy high yield
bonds in the fall of 1998; and the following year, high yield bonds outperformed
U.S. Treasuries by 10 percentage points. While the Model is not infallible
16
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Portfolio Manager Commentary
and past performance is not indicative of future results, it is an interesting
investment tool, particularly with yields at such attractive levels. The stock
market's performance also could affect the direction of high yield bond prices.
In the coming months, investors may choose to redirect some of their assets to
the attractive yields available in high yield bonds in light of the recent price
volatility and lackluster returns in the stock market. In this environment, we
think credit analysis, particularly with regard to free cash flow, will be the
key to unlocking value and opportunity. We will continue to scrutinize the
businesses and financial conditions of the Fund's holdings and build the
portfolio one bond at a time.
17
<PAGE>
EVERGREEN
Select Income Plus Fund
Fund at a Glance as of September 30, 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 manager seeks to achieve the Fund's objective by actively managing
portfolio duration for capital gain opportunities.
Process
The portfolio manager complements fundamental research with quantitative tools,
which identify undervalued or overlooked 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/Credit Index
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that investors' shares, when redeemed, may be worth more or
less than their original cost. Performance includes the reinvestment of income
dividends and capital gain distributions.
Historical performance shown for Class IS shares from 11/24/1997 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 pays no 12b-1 fee. If these fees had been reflected,
returns would have been lower. Prior to 11/24/1997, the returns for Classes I
and IS 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.
Class I and IS shares are only available to institutional shareholders with a
minimum $1 million investment. Class I and IS shares do not incur sales charges.
Had sales charges been included, returns would have been lower.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/1/
--------------------------------------------------------------------------------
Portfolio Inception Date: 8/31/1988 Class I Class IS
Class Inception Date 11/24/1997 3/2/1998
Average Annual Returns
1 year 5.82% 5.57%
5 years 5.49% 5.24%
10 years 7.28% 7.02%
30-day SEC Yield 7.11% 6.87%
12-month income dividends per share $0.35 $0.34
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
Select Income Plus
Fund Class I Consumer Price Index - US Lehman Brothers Govt/Credit
-------------------- ------------------------- ---------------------------
<S> <C> <C> <C>
9/30/90 1,000,000 1,000,000 1,000,000
9/30/91 1,153,684 1,033,911 1,158,577
9/30/92 1,279,703 1,064,808 1,311,893
9/30/93 1,423,064 1,093,444 1,462,034
9/30/94 1,354,677 1,125,848 1,401,461
9/30/95 1,545,553 1,154,484 1,602,622
9/30/96 1,603,054 1,189,148 1,674,781
9/30/97 1,752,940 1,214,770 1,835,373
9/30/98 1,949,053 1,232,856 2,071,538
9/30/99 1,908,222 1,265,260 2,037,583
9/30/00 2,019,760 1,309,454 2,174,540
</TABLE>
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/Credit
Index (LBGCI) and the Consumer Price Index (CPI).
The LBGCI is an unmanaged market index and does not include transaction costs
associated with buying and selling securities or any mutual fund expenses. The
CPI is a commonly used measure of inflation and does not represent an investment
return. It is not possible to invest directly in an index.
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.
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders. All data is as of September 30, 2000 and
subject to change.
18
<PAGE>
EVERGREEN
Select Income Plus Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO]
J.P. Weaver, CFA
Tenure: November 1997
Performance
For the twelve-month period ended September 30, 2000, the Evergreen Select
Income Plus Fund Class I shares posted a total return of 5.82%. This return
trailed the Lehman Brothers Government/Credit Index, which returned 6.74% for
the same period. This return positioned the Fund near the median for its Lipper
peer universe for the period. Lipper Inc., is an independent monitor of mutual
fund performance.
Portfolio Characteristics
-------------------------
(as of 9/30/2000)
Total Net Assets $1,585,103,792
Average Credit Quality AA
Effective Maturity 8.5 years
Average Duration 4.9 years
Environment
The primary source of systematic risk in the bond market for most of the last
twelve months has been Federal Reserve Board policy. Rising market interest
rates translated into uncertainty about the economy and corporate profit growth
as the Federal Reserve Board sought to curb what it considered a potentially
overheating pace of growth. Exacerbating these concerns was the increased market
liquidity premium felt by marginal corporate borrowers. These trends translated
into increased issue specific risk. This caused a number of corporate bond
issuers to see their spreads gap out to unprecedented recession-like levels. At
this writing, corporate bond spreads are at their widest levels in a decade.
Clearly, the market is having difficulty pricing and buying corporate credit
risk. As an example of this trend, almost 5% of the corporate bond issuer
universe have seen their spreads widen over 30%--in a 10-year bond this
translates into almost $10 per $100 in unrealized losses. The Fund has not been
immune to this trend. The two bond issuers the Fund held within this 5% cohort
alone caused another 0.3% of the Fund's performance shortfall relative to its
benchmark.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 9/30/2000 portfolio assets)
[GRAPH]
Corporate Bonds -- 39.5% U.S.
Treasury Obligations -- 20.5%
Mortgage-Backed Securities -- 15.4%
Yankee Obligations -- 9.4%
Collateralized Mortgage Obligations -- 8.4%
U.S. Government & Agency Obligations -- 3.5%
Asset-Backed Securities -- 2.0%
Mutual Fund Shares -- 1.1%
Convertible Preferred Stock -- 0.2%
19
<PAGE>
EVERGREEN
Select Income Plus Fund
Portfolio Manager Commentary
Strategy
One of the Fund's key objectives is to seek a high level of current income for
its shareholders. Based on this goal, the Fund tends to be normally
over-weighted in corporate and mortgage-backed securities relative to its
performance benchmark index. This strategy cost the Fund for the year ended
September 30, 2000. Treasury bonds, benefiting from a program by the U.S.
Treasury Department to buy back debt, were by far the strongest performing
sector in the bond market. Corporate bonds, which suffered from a supply/demand
imbalance relative to Treasury debt performed very poorly. Another area that
caused the Fund's performance to lag its benchmark was below investment grade
bonds. The Fund's 5% weighting in these securities contributed 0% to total
return and was responsible for about 0.3% of the disparity between Fund and
index returns.
--------------------------------------------------------------------------------
PORTFOLIO QUALITY
--------------------------------------------------------------------------------
(based on 9/30/2000 market value of bonds)
[GRAPH]
AAA -- 43.7%
AA -- 7.5%
A -- 24.5%
BBB -- 20.1%
BB & lower/NA/NR -- 4.2%
Outlook
Risk factors for the bond market have shifted from a single one--the Federal
Reserve Board, to multiple factors; rising oil prices, the implications of the
election, the bursting NASDAQ bubble, and weakening international currencies.
This proliferation of risk factors heightens overall bond market uncertainty.
This is manifest in the rising implied volatility levels observed in the stocks
of the 80 largest corporate bond issuers which have risen above 50% recently--a
level which attests to the market's reduced ability to price for risk. Finally,
the pace of economic growth is finally beginning to feel the impact of tighter
monetary conditions and is clearly slowing. The bond market is assigning an
increased probability to a "hard landing" scenario for the economy in 2001.
The confluence of increased risk and uncertainty has caused us recently to
embark on a strategy to reduce corporate bond exposure in the new fiscal year.
We will replace this sector allocation with a higher commitment to Federal
Agency mortgage bonds. There may very well be a period in the coming fiscal year
during which we will look to rotate into the more cyclical corporate sectors
which have been especially hard hit. For now it seems prudent to lower the
fund's overall weighting in this sector in favor of high yielding mortgage
pass-through securities.
20
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Fund at a Glance as of September 30, 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.
Benchmark
Lehman Brothers Municipal Bond 7-Year Index
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that investors' shares, when redeemed, may be worth more or
less than their original cost. Performance includes the reinvestment of income
dividends and capital gain distributions.
Historical performance shown for Class IS shares from 11/24/1997 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 pays no 12b-1 fee. If these fees had been reflected,
returns would have been lower. Prior to 11/24/1997, the returns for Classes I
and IS 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.
Class I and IS shares are only available to institutional shareholders with a
minimum $1 million investment. Class I and IS shares do not incur sales charges.
Had sales charges been included, returns would have been lower.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/1/
--------------------------------------------------------------------------------
Portfolio Inception Date: 1/31/1984 Class I Class IS
Class Inception Date 11/24/1997 3/2/1998
Average Annual Returns
1 year 3.58% 3.32%
5 years 4.25% 4.00%
10 years 5.60% 5.34%
30-day SEC Yield 5.20% 4.95%
Tax Equivalent Yield* 8.61% 8.20%
12-month income dividends per share $2.99 $2.84
* Assumes maximum 39.6% federal tax rate. Results for investors subject to lower
tax rates would not be as advantageous.
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
Select Intermediate Term
Municipal Bond Fund Class I Consumer Price Index - US Lehman Brothers Munis 7-Yr
----------------------------------------- ------------------------- --------------------------
<S> <C> <C> <C>
9/30/90 1,000,000 1,000,000 1,000,000
9/30/91 1,098,862 1,033,911 1,122,476
9/30/92 1,187,964 1,064,808 1,232,578
9/30/93 1,306,967 1,093,444 1,367,050
9/30/94 1,296,162 1,125,848 1,358,254
9/30/95 1,401,050 1,154,484 1,497,637
9/30/96 1,465,624 1,189,148 1,564,056
9/30/97 1,580,811 1,214,770 1,688,465
9/30/98 1,717,139 1,232,856 1,821,149
9/30/99 1,665,101 1,265,260 1,832,304
9/30/00 1,724,486 1,309,454 1,933,039
</TABLE>
Comparison of a $1,000,000 investment in Evergreen Select Intermediate Term
Municipal Bond Fund, Class I shares/1/, versus a similar investment in the
Lehman Brothers Municipal Bond 7-Year Index (LBMB7YI) and the Consumer Price
Index (CPI).
The LBMB7YI is an unmanaged market index and does not include transaction costs
associated with buying and selling securities or any mutual fund expenses. The
CPI is a commonly used measure of inflation and does not represent an investment
return. It is not possible to invest directly in an index.
The Fund's 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.
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
All data is as of September 30, 2000 and subject to change.
21
<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 Term Municipal Bond Fund Class I shares posted
a 3.58% return for the twelve-month period ended September 30, 2000. This
trailed the 5.48% performance of its benchmark, the Lehman Brothers Municipal
Bond 7-year Index. The shorter part of the yield curve (less than 10 years)
significantly outperformed the intermediate (12-15 years) part of the curve
which contributed to the better relative performance of the index versus the
Fund. This outperformance was the result of extremely strong retail demand for
maturities less than 10 years. The intermediate part of the curve was in fact
the worst performing spot on the municipal curve during the month of September.
Portfolio
Characteristics
-----------------
(as of 9/30/2000)
Total Net Assets $619,039,186
Average Credit Quality AA
Effective Maturity 8.1 years
Average Duration 5.7 years
Environment
It has been a challenging twelve-month period. Interest rates rose and prices
dropped during the last quarter of 1999, only to reverse that pattern during
most of this year until we reached late summer as rates again reversed course
and rose during September 2000. During most of this period, municipals
outperformed their taxable counterparts until the summer as tax-exempts became
rich to treasuries and had to back up to present a more attractive investment.
It sounds like a lot of volatility in the municipal market, but actually the
municipal curve has exhibited much less volatility than taxables--we were just
reacting to moves in the taxable market. The slope of the municipal curve has
moved only about 26% as much as the slope of the treasury curve over the past
year.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 9/30/2000 portfolio assets)
[GRAPH]
Housing -- 15.2%
Airlines & Airport -- 13.8%
Pre-refunded, Lease & Escrow -- 10.6%
Hospital -- 10.5%
Education & Student Loan -- 10.3%
General Obligation -- 7.4%
Development District -- 6.2%
Water, Sewer & Solid Waste -- 5.9%
Industrial Development Revenue -- 5.0%
Electric Revenue & Utility -- 4.4%
Sales Tax & Special Tax -- 3.2%
Public Facilities -- 2.7%
Mutual Fund Shares -- 0.5%
Other -- 4.3%
22
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Portfolio Manager Commentary
Strategy
All this relative volatility argues even stronger in favor of the approach we
follow in managing the Fund. We continue to restructure the Fund to focus on our
core strategy of supplying strong income and yield with less price or NAV
variability. We attempt to accomplish this by selling lower book yield, longer
maturity securities in favor of bonds that supply higher yields, either due to
the coupon/maturity structure or selected lower investment grade rated bonds.
This approach is beginning to show the fruits of this labor as our adjusted
distribution yield rankings show this Fund in the top 15% of its universe based
on yield and risk adjusted return.
--------------------------------------------------------------------------------
PORTFOLIO QUALITY
--------------------------------------------------------------------------------
(based on 9/30/2000 market value of bonds)
[GRAPH]
AAA -- 42.1%
AA -- 9.9%
A -- 18.6%
BBB -- 17.0%
BB/NR -- 12.4%
Outlook
Seasonally, the fourth quarter of the year is typically kind to the municipal
bond market. The higher yields we have attained during the past month usually
produce a renewed retail bid as the fall season begins, with the month of
December being the strongest month of the quarter. We anticipate this to
continue, especially with new issuance expected to be approximately 19% lower
than last year. This will lead to greater demand than supply and hopefully
higher prices. We believe the intermediate portion of the yield curve is ideally
positioned to outperform and represents by far the most value in the municipal
market. In fact, the historical monthly return per unit of volatility is greater
for intermediate municipals than long municipals and also greater than that of
the S&P 500. This supports the view that municipal bonds (intermediates in
particular) may be a good way to diversify an equity portfolio.
23
<PAGE>
EVERGREEN
Select International Bond Fund
Fund at a Glance as of September 30, 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.
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that investors' shares, when redeemed, may be worth more or
less than their original cost. Performance includes the reinvestment of income
dividends 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,
CoreFund Global Bond Fund. Historical performance shown for Class IS shares
prior to its inception is based on the performance of the Class A shares of the
Fund's predecessor fund and reflects the same 0.25% 12b-1 applicable to Class IS
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.
Class I and IS shares are only available to institutional shareholders with a
minimum $1 million investment. Class I and IS shares do not incur sales charges.
Had sales charges been included, returns would have been lower.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/1/
--------------------------------------------------------------------------------
Portfolio Inception Date: 12/15/1993 Class I Class IS
Class Inception Date 12/15/1993 12/15/1993
Average Annual Returns
1 year -8.47% -8.67%
5 years 3.00% 2.76%
Since Portfolio Inception 2.46% 2.22%
30-day SEC Yield 4.85% 4.59%
12-month income dividends per share $0.56 $0.53
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
Select International
Bond Fund Class I Consumer Price Index - US J.P. Morgan Global Non-U.S. Gov Bd
--------------------------- ------------------------- ----------------------------------
<S> <C> <C> <C>
12/15/93 1,000,000 1,000,000 1,000,000
9/30/94 903,889 1,024,691 1,042,538
9/30/95 1,017,089 1,050,754 1,236,522
9/30/96 1,105,106 1,082,305 1,302,665
9/30/97 1,165,549 1,105,624 1,299,665
9/30/98 1,239,084 1,122,085 1,453,281
9/30/99 1,288,238 1,151,578 1,457,268
9/30/00 1,179,133 1,191,800 1,337,724
</TABLE>
Comparison of a $1,000,000 investment in Evergreen Select International Bond
Fund, Class I shares/1/, versus a similar investment in the J.P. Morgan Global
Government Index excluding U.S. (JPMGXUS) and the Consumer Price Index (CPI).
The JPMGXUS is an unmanaged market index and does not include transaction costs
associated with buying and selling securities or any mutual fund expenses. The
CPI is a commonly used measure of inflation and does not represent an investment
return. It is not possible to invest directly in an index.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations. 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.
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
All data is as of September 30, 2000 and subject to change.
*Australia, Austria, Belgium, Canada, Denmark, Finland, France, Sweden,
Switzerland, United Kingdom, Germany, Ireland, Italy, Japan, Netherlands, New
Zealand, Norway, Portugal and Spain.
24
<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 returned -8.47% for
the twelve-month period ended September 30, 2000. In comparison, the Fund's
benchmark, the J.P. Morgan Global Government Index excluding U.S. returned
-8.20% for the same period. The negative return reflects the decline in value of
some of the Fund's currency positions, particularly the euro and the British
pound. During the year, the currency market in general, incurred substantial
price fluctuations.
Portfolio
Characteristics
-----------------
(as of 9/30/2000)
Total Net Assets $72,068,681
Average Credit Quality AA
Effective Maturity 10.1 years
Average Duration 6.7 years
Environment
Prices in the global bond markets moved in three phases, over the past twelve
months--lower, higher and sideways. The fiscal year began with a continuation of
the interest rate hikes that began in mid-1999, implemented to cool potentially
overheating international economies and halt the rise of future inflation.
Long-term rates peaked in January 2000, reaching 7.00% in the United States,
6.20% in the United Kingdom and 5.90% in Euroland. Euroland is a term referring
to the group of 13 European countries participating in the use of the euro. At
the end of January 2000, however, long-term interest rates fell on expectations
of lower bond supply in longer-term maturities. The U.S. Treasury announced
plans to buy back a sizeable amount of long-term government securities and
reduce the size of future auctions. Supply also shrank in the United Kingdom.
The decline in long-term rates inverted the U.S. and U.K. yield curves between
10 and 30 years, with yields in the longest maturities falling to as low as
6.00% in the United States, 5.40% in the United Kingdom and 5.00% in Euroland.
Rates then moved within a half percentage point range for the rest of the fiscal
year. In Japan, interest rates remained low relative to Europe and the United
States, moving between 1.9% and 2.6%, during the period.
The higher rates witnessed early in the period slowed the U.S. economy. Growth,
however, remained solid; and inflation, with the exception of higher energy
prices, stayed low. The countries of Euroland continued to coordinate their
labor and financial markets, improving overall economic strength, although
overall growth was slower than in the United States. A weaker euro also boosted
economic momentum in Euroland. Italy and Germany were the only countries whose
economies did not exhibit stronger growth, with unemployment rates there still
high. In Japan, signs of more sustainable growth emerged after substantial
government intervention and heavy debt issuance.
25
<PAGE>
EVERGREEN
Select International Bond Fund
Portfolio Manager Commentary
Prices in the currency market fluctuated, with the U.S. dollar rising versus
other currencies. In comparison, the euro depreciated by 18%, the British pound
weakened by 12% and the yen fell in value by 3%.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 9/30/2000 portfolio assets)
[GRAPH]
Foreign Bonds -- 92.7%
Yankee Obligations -- 7.3%
Strategy
Our investment strategies included actively managing asset-distribution by
country, currency allocation and adjusting duration. Duration measures a fund's
sensitivity to interest rate changes. Lengthening duration increases a fund's
sensitivity to changes in interest rates and conversely, shortening duration
enhances price stability. The Fund maintained a relatively short duration in the
beginning of the period, when interest rates were rising, moving to a neutral
duration relative to the Fund's benchmark at the end of 1999. We lengthened
duration in the first quarter of 2000, keeping it longer than the J.P. Morgan
Global Government Index for the remainder of the fiscal period, to take
advantage of both attractive yield levels and the positive investment
environment. We also maintained an emphasis on quality throughout the year. The
Fund's assets were weighted toward U.S. dollar economies and Euroland bonds to
benefit from the U.S. dollar's strength and the attractive value available in
Euroland. The Fund's largest positions were in Germany, Spain and the
Netherlands, at the close of the fiscal period. The Fund did not invest in
Japanese securities during the year, because of the relatively low interest
rates available in Japan, and because of our expectations that Japanese interest
rates would be rising--pushing bond prices lower--as
Japan's economy gained strength. As of September 30, 2000, the Fund was
over-weighted, relative to its index, in the U.S. dollar and under-weighted in
both the euro and the yen.
--------------------------------------------------------------------------------
PORTFOLIO QUALITY
--------------------------------------------------------------------------------
(based on 9/30/2000 market value of bonds)
[GRAPH]
AAA -- 53.6%
AA -- 30.8%
A -- 7.6%
BBB -- 5.9%
BB & lower/NA -- 2.1%
Outlook
We believe the cycle of higher rates that began in late 1998 is over, and global
interest rates are in the process of heading lower. We recognize the possibility
that the Federal Reserve Board may have to increase rates again in early 2001
because of tight labor markets and rising energy costs. However, we think
putting the monetary brakes on too fast--increasing deflationary pressures and
taking the chance that the economy's "soft landing" becomes a "hard landing"--is
a greater risk than the possibility of future inflation. We expect U.S. economic
growth to slow, and that the paths of the U.S. and Euroland economies will
converge in 2001, prompting a rebound in the euro. With that scenario, we are
focusing on the value and potential returns of the euro and eurobonds. The
"real" yields of eurobonds--yields adjusted for inflation--are approaching 4%, a
level that is attractive by historical standards. Further, in our opinion, the
euro's value is extremely attractive and we believe it could be poised for a
rapid and significant recovery. We are optimistic that the combination of
positive economic fundamentals, high yields and attractive currency levels can
generate solid returns in the months ahead.
26
<PAGE>
EVERGREEN
Select Limited Duration Fund
Fund at a Glance as of September 30, 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 managers seek 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
/1/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that investors' shares, when redeemed, may be worth more or
less than their original cost. Performance includes the reinvestment of income
dividends and capital gain distributions.
Historical performance shown for Class IS shares from 11/24/1997 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 pays no 12b-1 fee. If these fees had been reflected,
returns would have been lower. Prior to 11/24/1997, 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.
Class I and IS shares are only available to institutional shareholders with a
minimum $1 million investment. Class I and IS shares do not incur sales charges.
Had sales charges been included, returns would have been lower.
--------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/1/
--------------------------------------------------------------------------------
Portfolio Inception Date: 4/30/1994 Class I Class IS
Class Inception Date 11/24/1997 7/28/1998
Average Annual Returns
1 year 6.42% 6.15%
5 years 5.84% 5.61%
Since Portfolio Inception 5.98% 5.74%
30-day SEC Yield 7.46% 7.20%
12-month income dividends per share $0.66 $0.64
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
Select Limited Duration
Fund Class I Consumer Price Index - US Merrill Lynch 1-3 Yr Govt
------------------------- ------------------------- -------------------------
<S> <C> <C> <C>
4/30/94 1,000,000 1,000,000 1,000,000
9/30/94 1,014,669 1,013,569 1,014,280
9/30/95 1,093,194 1,039,349 1,098,248
9/30/96 1,154,656 1,070,556 1,159,901
9/30/97 1,233,955 1,093,623 1,239,815
9/30/98 1,323,314 1,109,905 1,338,671
9/30/99 1,363,861 1,139,077 1,381,856
9/30/00 1,451,743 1,178,864 1,461,833
</TABLE>
Comparison of a $1,000,000 investment in Evergreen Select Limited Duration Fund,
Class I shares/1/, versus a similar investment in the Merrill Lynch 1-3 Year
Treasury Bond Index (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 or any mutual fund expenses.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
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.
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
All data is as of September 30, 2000 and subject to change.
27
<PAGE>
EVERGREEN
Select Limited Duration Fund
Portfolio Manager Commentary
Portfolio Management
[PHOTO] [PHOTO]
Sam Paddison David Fowley
Tenure: November 1997 Tenure: November 1997
Performance
The Evergreen Select Limited Duration Bond Fund Class I shares returned 6.42%
for the twelve-month period ended September 30, 2000, outperforming its index,
the Merrill Lynch 1-3 Year Treasury Bond Index, which returned 5.79% for the
same period. We maintained a short duration for the first nine months of the
period and then began to lengthen duration in early June relative to its index.
The duration decisions coupled with heavy exposure to the spread sectors helped
the Fund outperform.
Portfolio
Characteristics
-----------------
(as of 9/30/2000)
Total Net Assets $291,975,405
Average Credit Quality AA
Effective Maturity 2.0 years
Average Duration 1.6 years
Environment
The Federal Reserve raised its discount rate by 25 basis points 3 times during
the period and once by 50 basis points, leaving the target rate at 6.50%. No
further Federal Reserve Board tightening is expected throughout the remainder of
2000. Some economists are starting to believe that the next move by the Federal
Reserve Board might be an easing of monetary policy. The Core CPI is currently
running at 3.4% year after year. Yield volatility continued again this period as
2 year U.S. Treasury Note yields started at a 5.60%, peaked at 6.91% on May 18th
and then retreated to 5.98% by the end of the period. 3-Year U.S. Treasury Notes
and 6-month U.S. Treasury Bills outperformed all other maturity sectors in the
Treasury market, except for the 30-Year, which continues to rally as supply of
long term bonds diminishes.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
(based on 9/30/2000 portfolio assets)
[GRAPH]
Corporate Bonds -- 46.2%
Mortgage-Backed Securities -- 18.3%
Asset-Backed Securities -- 12.1%
Collateralized Mortgage Obligations -- 9.3%
U.S. Agency Obligations -- 6.7%
Mutual Fund Shares -- 3.4%
Yankee Obligations -- 2.6%
Repurchase Agreements -- 1.4%
28
<PAGE>
EVERGREEN
Select Limited Duration Fund
Portfolio Manager Commentary
Strategy
Our technical model gave us a buy signal in early June. The portfolio's duration
was increased from a bearish position of 95% to 105% of the index's duration.
Spreads on corporate, asset backed, mortgage backed and Federal Agency
securities remain at historically high levels. The Fund sold some lower-rated
credits and credits with limited upside potential in an effort to upgrade the
overall credit quality of the portfolio and position the Fund to outperform
going forward.
--------------------------------------------------------------------------------
PORTFOLIO QUALITY
--------------------------------------------------------------------------------
(based on 9/30/2000 market value of bonds)
[GRAPH]
AAA -- 46.4%
AA -- 14.0%
A -- 10.3%
BBB -- 26.1%
BB/NA/NR -- 3.2%
Outlook
We believe the Federal Reserve Board will remain on hold with its monetary
policy for the remainder of the year, as the economy seems to be heading for a
"soft landing." We believe many investors are taking a cautionary approach to
their portfolios as they await the outcome of this November's presidential
election. We will continue to take advantage of historically wide spreads
offered on non-Treasury issues.
29
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Financial Highlights
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Period Ended
September 30, 2000 (a)
<S> <C>
CLASS A SHARES
Net asset value, beginning of period $ 9.54
-------
Income from investment operations
Net investment income 0.16
Net realized and unrealized losses on securities (0.02)
-------
Total from investment operations 0.14
-------
Distributions to shareholders from
Net investment income (0.16)
-------
Net asset value, end of period $ 9.52
-------
Total return* 1.43%
Ratios and supplemental data
Net assets, end of period (thousands) $26,552
Ratios to average net assets
Expenses++ 0.71%+
Net investment income 6.54%+
Portfolio turnover rate 74%
<CAPTION>
Period Ended
September 30, 2000 (a)
<S> <C>
CLASS B SHARES
Net asset value, beginning of period $ 9.54
-------
Income from investment operations
Net investment income 0.14
Net realized and unrealized losses on securities (0.02)
-------
Total from investment operations 0.12
-------
Distributions to shareholders from
Net investment income (0.14)
-------
Net asset value, end of period $ 9.52
-------
Total return* 1.23%
Ratios and supplemental data
Net assets, end of period (thousands) $ 5,067
Ratios to average net assets
Expenses++ 1.50%+
Net investment income 5.73%+
Portfolio turnover rate 74%
</TABLE>
(a) For the period from June 30, 2000 (commencement of class operations) to
September 30, 2000.
* Excluding applicable sales charges.
+ Annualized.
++ Ratio of expenses to average net assets excludes expense reductions, but
includes fee waivers.
See Combined Notes to Financial Statements.
30
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Financial Highlights
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Period Ended
September 30, 2000 (a)
<S> <C>
CLASS C SHARES
Net asset value, beginning of period $ 9.54
------
Income from investment operations
Net investment income 0.14
Net realized and unrealized losses on securities (0.02)
------
Total from investment operations 0.12
------
Distributions to shareholders from
Net investment income (0.14)
------
Net asset value, end of period $ 9.52
------
Total return* 1.23%
Ratios and supplemental data
Net assets, end of period (thousands) $3,699
Ratios to average net assets
Expenses++ 1.50%+
Net investment income 5.73%+
Portfolio turnover rate 74%
</TABLE>
<TABLE>
<CAPTION>
Year Ended
Year Ended September 30, February 28,
-------------------------- ----------------- Year Ended
2000 1999 1998 (b) 1998 1997 (c) September 30, 1996 #
<S> <C> <C> <C> <C> <C> <C>
CLASS I SHARES
Net asset value,
beginning of period $ 9.56 $ 9.68 $ 9.75 $ 9.71 $ 9.68 $ 9.65
------- ------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.61 0.59 0.35 0.64 0.28 0.64
Net realized and
unrealized gains or
losses on securities (0.05) (0.12) (0.07) 0.04 0@ 0
------- ------- ------- ------- ------- -------
Total from investment
operations 0.56 0.47 0.28 0.68 0.28 0.64
------- ------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.60) (0.59) (0.35) (0.64) (0.25) (0.61)
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 9.52 $ 9.56 $ 9.68 $ 9.75 $ 9.71 $ 9.68
------- ------- ------- ------- ------- -------
Total return 6.05% 4.98% 2.88% 7.15% 2.97% 6.86%
Ratios and supplemental
data
Net assets, end of
period (thousands) $32,787 $36,033 $23,174 $25,981 $70,264 $65,974
Ratios to average net
assets
Expenses++ 0.43% 0.30% 0.33%+ 0.30% 0.30%+ 0.30%
Net investment income 6.43% 6.11% 6.12%+ 6.63% 6.79%+ 6.84%
Portfolio turnover rate 74% 14% 46% 107% 44% 85%
</TABLE>
(a) For the period from June 30, 2000 (commencement of class operations) to
September 30, 2000.
(b) For the seven months ended September 30, 1998. The Fund changed its fiscal
year end from February 28 to September 30, effective September 30, 1998.
(c) For the five months ended February 28, 1997. The Fund changed its fiscal
year end from September 30 to February 28, effective February 28, 1997.
* Excluding applicable sales charges.
# Net investment income is based on average shares outstanding during the pe-
riod.
+ Annualized.
++ Ratio of expenses to average net assets excludes expense reductions, but
includes fee waivers.
@ Amount represents less than $0.01 per share.
See Combined Notes to Financial Statements.
31
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30, Year Ended February 28,
-------------------------- --------------------------- Year Ended
2000 1999 1998 (a) 1998 1997 (b) September 30, 1996 #
<S> <C> <C> <C> <C> <C> <C>
CLASS IS SHARES
Net asset value,
beginning of period $ 9.56 $ 9.68 $ 9.76 $ 9.72 $ 9.68 $ 9.65
------- ------- ------ ------------ ----------- -------
Income from investment
operations
Net investment income 0.58 0.55 0.33 0.59 0.28 0.65
Net realized and
unrealized gains or
losses on securities (0.04) (0.11) (0.08) 0.06 0@ (0.03)
------- ------- ------ ------------ ----------- -------
Total from investment
operations 0.54 0.44 0.25 0.65 0.28 0.62
------- ------- ------ ------------ ----------- -------
Distributions to
shareholders from
Net investment income (0.58) (0.56) (0.33) (0.61) (0.24) (0.59)
------- ------- ------ ------------ ----------- -------
Net asset value, end of
period $ 9.52 $ 9.56 $ 9.68 $ 9.76 $ 9.72 $ 9.68
------- ------- ------ ------------ ----------- -------
Total return 5.79% 4.73% 2.63% 6.89% 2.97% 6.60%
Ratios and supplemental
data
Net assets, end of
period (thousands) $20,384 $20,199 $9,645 $ 10,320 $ 3,564 $14,361
Ratios to average net
assets
Expenses++ 0.70% 0.55% 0.57%+ 0.55% 0.55%+ 0.55%
Net investment income 6.18% 5.86% 5.82%+ 6.15% 6.39%+ 6.64%
Portfolio turnover rate 74% 14% 46% 107% 44% 85%
</TABLE>
(a) For the seven months ended September 30, 1998. The Fund changed its fiscal
year end from February 28 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 February 28, effective February 28, 1997.
# Net investment income is based on average shares outstanding during the pe-
riod.
+ Annualized.
++ Ratio of expenses to average net assets excludes expense reductions, but
includes fee waivers.
@ Amount represents less than $0.01 per share.
See Combined Notes to Financial Statements.
32
<PAGE>
EVERGREEN
Select Core Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September
30, Year Ended March 31,
------------------------ --------------------------------------
2000 1999 (a) (b) 1999 (b) 1998 (b) 1997 (b) 1996 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS I SHARES
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 0.64 0.30 0.59 0.56 0.66 0.68
Net realized and
unrealized gains or
losses on securities 0 (0.30) 0.09 0.61 (0.12) 0.40
---------- ---------- -------- ------- ------- -------
Total from investment
operations 0.64 0 0.68 1.17 0.54 1.08
---------- ---------- -------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.63) (0.30) (0.61) (0.62) (0.67) (0.67)
Net realized gains 0 (0.01) (0.21) 0 0 0
---------- ---------- -------- ------- ------- -------
Total distributions to
shareholders (0.63) (0.31) (0.82) (0.62) (0.67) (0.67)
---------- ---------- -------- ------- ------- -------
Net asset value, end of
period $ 10.09 $ 10.08 $ 10.39 $ 10.53 $ 9.98 $ 10.11
---------- ---------- -------- ------- ------- -------
Total return 6.60% 0.00% 0.07% 12.06% 5.52% 11.23%
Ratios and supplemental
data
Net assets, end of
period (thousands) $1,283,130 $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 6.45% 5.70%+ 5.73% 6.06% 6.48% 6.54%
Portfolio turnover rate 195% 225% 221% 235% 207% 268%
</TABLE>
<TABLE>
<CAPTION>
Year Ended September
30, Year Ended March 31,
--------------------- ----------------------
2000 1999 (a) (b) 1999 (b) 1998 (c) (b)
<S> <C> <C> <C> <C>
CLASS IS SHARES
Net asset value, beginning of
period $ 10.08 $10.40 $10.54 $10.40
------- ------ ------ ------
Income from investment operations
Net investment income 0.61 0.28 0.59 0.36
Net realized and unrealized gains
or losses on securities 0 (0.31) 0.07 0.08
------- ------ ------ ------
Total from investment operations 0.61 (0.03) 0.66 0.44
------- ------ ------ ------
Distributions to shareholders
from
Net investment income (0.60) (0.28) (0.59) (0.30)
Net realized gains 0 (0.01) (0.21) 0
------- ------ ------ ------
Total distributions to
shareholders (0.60) (0.29) (0.80) (0.30)
------- ------ ------ ------
Net asset value, end of period $ 10.09 $10.08 $10.40 $10.54
------- ------ ------ ------
Total return 6.33% (0.17%) (0.01%) 8.55%
Ratios and supplemental data
Net assets, end of period
(thousands) $22,213 $5,744 $2,721 $3,069
Ratios to average net assets
Expenses++ 0.68% 0.61%+ 0.65% 0.65%+
Net investment income 6.24% 5.49%+ 5.59% 5.96%+
Portfolio turnover rate 195% 225% 221% 235%
</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) 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.
(c) For the period from October 2, 1997 (commencement of class operations) to
March 31, 1998.
+ Annualized.
++ Ratio of expenses to average net assets excludes expense reductions, but
includes fee waivers.
See Combined Notes to Financial Statements.
33
<PAGE>
EVERGREEN
Select Fixed Income Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------
2000 1999 1998 (a)
<S> <C> <C> <C>
CLASS I SHARES
Net asset value, beginning of period $ 5.82 $ 6.12 $ 5.96
-------- -------- --------
Income from investment operations
Net investment income 0.37 0.35 0.31
Net realized and unrealized gains or losses on
securities 0.01 (0.30) 0.16
-------- -------- --------
Total from investment operations 0.38 0.05 0.47
-------- -------- --------
Distributions to shareholders from
Net investment income (0.37) (0.35) (0.31)
-------- -------- --------
Net asset value, end of period $ 5.83 $ 5.82 $ 6.12
-------- -------- --------
Total return 6.82% 0.84% 8.06%
Ratios and supplemental data
Net assets, end of period (thousands) $554,432 $590,927 $668,907
Ratios to average net assets
Expenses++ 0.52% 0.49% 0.52%+
Net investment income 6.52% 5.86% 5.99%+
Portfolio turnover rate 37% 63% 46%
<CAPTION>
Year Ended September 30,
----------------------------
2000 1999 1998 (b)
<S> <C> <C> <C>
CLASS IS SHARES
Net asset value, beginning of period $ 5.82 $ 6.12 $ 5.97
-------- -------- --------
Income from investment operations
Net investment income 0.36 0.33 0.20
Net realized and unrealized gains or losses on
securities 0.01 (0.30) 0.15
-------- -------- --------
Total from investment operations 0.37 0.03 0.35
-------- -------- --------
Distributions to shareholders from
Net investment income (0.36) (0.33) (0.20)
-------- -------- --------
Net asset value, end of period $ 5.83 $ 5.82 $ 6.12
-------- -------- --------
Total return 6.55% 0.59% 5.94%
Ratios and supplemental data
Net assets, end of period (thousands) $ 12,709 $ 11,590 $ 9,808
Ratios to average net assets
Expenses++ 0.78% 0.74% 0.77%+
Net investment income 6.26% 5.65% 5.65%+
Portfolio turnover rate 37% 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
includes fee waivers.
See Combined Notes to Financial Statements.
34
<PAGE>
EVERGREEN
Select Fixed Income Fund II
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended October 31,
Period Ended --------------------------------------------
September 30, 2000 (b) 1999 1998 1997 1996 1995 (c)
<S> <C> <C> <C> <C> <C> <C>
CLASS I SHARES (a)
Net asset value,
beginning of period $ 12.38 $ 13.15 $ 13.11 $ 12.89 $ 13.71 $ 12.50
------- ------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.80 0.78 0.79 0.83 0.77 0.81
Net realized and
unrealized gains or
losses on securities,
interest rate swaps
and futures contracts (0.08) (0.66) 0.13 0.21 (0.16) 1.14
------- ------- ------- ------- ------- -------
Total from investment
operations 0.72 0.12 0.92 1.04 0.61 1.95
------- ------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.92) (0.77) (0.82) (0.82) (0.77) (0.74)
Net realized gains 0 (0.12) (0.06) 0 (0.66) 0
------- ------- ------- ------- ------- -------
Total distributions to
shareholders (0.92) (0.89) (0.88) (0.82) (1.43) (0.74)
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 12.18 $ 12.38 $ 13.15 $ 13.11 $ 12.89 $ 13.71
------- ------- ------- ------- ------- -------
Total return 6.08% 0.97% 7.21% 8.39% 4.87% 15.90%
Ratios and supplemental
data
Net assets, end of
period (thousands) $60,729 $77,470 $83,372 $61,738 $49,962 $34,053
Ratios to average net
assets
Expenses++ 0.11%+ 0.10% 0.10% 0.15% 0.17% 0.22%+
Net investment income 6.86%+ 6.16% 6.08% 6.52% 6.22% 6.75%+
Portfolio turnover rate 113% 209% 137% 194% 226% 302%
</TABLE>
<TABLE>
<CAPTION>
Period Ended Period Ended
September 30, 2000 (b) October 31, 1999 (d)
<S> <C> <C>
CLASS IS SHARES
Net asset value, beginning of
period $12.38 $12.25
------ ------
Income from investment operations
Net investment income 0.74 0.03
Net realized and unrealized gains
or losses on securities,
interest rate swaps and futures
contracts (0.06) 0.10
------ ------
Total from investment operations 0.68 0.13
------ ------
Distributions to shareholders
from
Net investment income (0.89) 0
------ ------
Net asset value, end of period $12.17 $12.38
------ ------
Total return 5.76% 1.06%
Ratios and supplemental data
Net assets, end of period
(thousands) $ 1 $ 1
Ratios to average net assets
Expenses++ 0.39%+ 0.39%+
Net investment income 7.18%+ 6.86%+
Portfolio turnover rate 113% 209%
</TABLE>
(a) Effective October 18, 1999, shareholders of Mentor Fixed Income Portfolio
became owners of that number of full and fractional shares of Class I of
Evergreen Select Fixed Income Fund II.
(b) For the eleven months ended September 30, 2000. The Fund changed its fiscal
year end from October 31 to September 30, effective September 30, 2000.
(c) For the period from December 6, 1994 (commencement of class operations) to
October 31, 1995.
(d) For the period from October 18, 1999 (commencement of class operations) to
October 31, 1999.
+ Annualized.
++ Ratio of expenses to average net assets excludes expense reductions.
See Combined Notes to Financial Statements.
35
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Financial Highlights
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Period Ended
September 30, 2000 (a)
<S> <C>
CLASS I SHARES
Net asset value, beginning of period $ 10.00
-------
Income from investment operations
Net investment income 0.71
Net realized and unrealized losses on securities (0.44)
-------
Total from investment operations 0.27
-------
Distributions to shareholders from
Net investment income (0.70)
-------
Net asset value, end of period $ 9.57
-------
Total return 2.82%
Ratios and supplemental data
Net assets, end of period (thousands) $75,204
Ratios to average net assets
Expenses++ 0.61%+
Net investment income 8.98%+
Portfolio turnover rate 48%
<CAPTION>
Period Ended
September 30, 2000 (a)
<S> <C>
CLASS IS SHARES
Net asset value, beginning of period $ 10.00
-------
Income from investment operations
Net investment income 0.71
Net realized and unrealized losses on securities (0.47)
-------
Total from investment operations 0.24
-------
Distributions to shareholders from
Net investment income (0.67)
-------
Net asset value, end of period $ 9.57
-------
Total return 2.59%
Ratios and supplemental data
Net assets, end of period (thousands) $ 1
Ratios to average net assets
Expenses++ 0.56%+
Net investment income 8.89%+
Portfolio turnover rate 48%
</TABLE>
(a) For the period from November 30, 1999 (commencement of class operations) to
September 30, 2000.
+ 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 Income Plus Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
-----------------------------------
2000 1999 1998 (a)
<S> <C> <C> <C>
CLASS I SHARES
Net asset value, beginning of period $ 5.41 $ 5.92 $ 5.72
---------- ---------- ----------
Income from investment operations
Net investment income 0.35 0.33 0.30
Net realized and unrealized gains or
losses on securities (0.05) (0.46) 0.20
---------- ---------- ----------
Total from investment operations 0.30 (0.13) 0.50
---------- ---------- ----------
Distributions to shareholders from
Net investment income (0.35) (0.33) (0.30)
Net realized gains 0 (0.05) 0
---------- ---------- ----------
Total distributions to shareholders (0.35) (0.38) (0.30)
---------- ---------- ----------
Net asset value, end of period $ 5.36 $ 5.41 $ 5.92
---------- ---------- ----------
Total return 5.82% (2.13%) 8.99%
Ratios and supplemental data
Net assets, end of period (thousands) $1,568,819 $1,794,209 $1,367,240
Ratios to average net assets
Expenses++ 0.51% 0.48% 0.51%+
Net investment income 6.68% 5.95% 6.09%+
Portfolio turnover rate 40% 70% 37%
<CAPTION>
Year Ended September 30,
-----------------------------------
2000 1999 1998 (b)
<S> <C> <C> <C>
CLASS IS SHARES
Net asset value, beginning of period $ 5.41 $ 5.92 $ 5.71
---------- ---------- ----------
Income from investment operations
Net investment income 0.34 0.32 0.19
Net realized and unrealized gains or
losses on securities (0.05) (0.46) 0.21
---------- ---------- ----------
Total from investment operations 0.29 (0.14) 0.40
---------- ---------- ----------
Distributions to shareholders from
Net investment income (0.34) (0.32) (0.19)
Net realized gains 0 (0.05) 0
---------- ---------- ----------
Total distributions to shareholders (0.34) (0.37) (0.19)
---------- ---------- ----------
Net asset value, end of period $ 5.36 $ 5.41 $ 5.92
---------- ---------- ----------
Total return 5.57% (2.36%) 7.21%
Ratios and supplemental data
Net assets, end of period (thousands) $ 16,285 $ 10,871 $ 7,528
Ratios to average net assets
Expenses++ 0.77% 0.73% 0.75%+
Net investment income 6.47% 5.74% 5.80%+
Portfolio turnover rate 40% 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
includes fee waivers.
See Combined Notes to Financial Statements.
37
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
-----------------------------
2000 1999 1998 (a)
<S> <C> <C> <C>
CLASS I SHARES
Net asset value, beginning of period $ 61.33 $ 67.11 $ 64.84
-------- -------- --------
Income from investment operations
Net investment income 2.99 2.97 2.57
Net realized and unrealized gains or losses
on securities (0.89) (4.89) 2.27
-------- -------- --------
Total from investment operations 2.10 (1.92) 4.84
-------- -------- --------
Distributions to shareholders from
Net investment income (2.99) (2.97) (2.57)
Net realized gains 0 (0.89) 0
-------- -------- --------
Total distributions to shareholders (2.99) (3.86) (2.57)
-------- -------- --------
Net asset value, end of period $ 60.44 $ 61.33 $ 67.11
-------- -------- --------
Total return 3.58% (3.00%) 7.61%
Ratios and supplemental data
Net assets, end of period (thousands) $611,279 $704,474 $746,874
Ratios to average net assets
Expenses++ 0.63% 0.57% 0.62%+
Net investment income 4.98% 4.59% 4.59%+
Portfolio turnover rate 66% 97% 47%
<CAPTION>
Year Ended September 30,
-----------------------------
2000 1999 1998 (b)
<S> <C> <C> <C>
CLASS IS SHARES
Net asset value, beginning of period $ 61.33 $ 67.11 $ 65.91
-------- -------- --------
Income from investment operations
Net investment income 2.84 2.81 1.66
Net realized and unrealized gains or losses
on securities (0.89) (4.89) 1.20
-------- -------- --------
Total from investment operations 1.95 (2.08) 2.86
-------- -------- --------
Distributions to shareholders from
Net investment income (2.84) (2.81) (1.66)
Net realized gains 0 (0.89) 0
-------- -------- --------
Total distributions to shareholders (2.84) (3.70) (1.66)
-------- -------- --------
Net asset value, end of period $ 60.44 $ 61.33 $ 67.11
-------- -------- --------
Total return 3.32% (3.24%) 4.41%
Ratios and supplemental data
Net assets, end of period (thousands) $ 7,760 $ 5,863 $ 4,736
Ratios to average net assets
Expenses++ 0.88% 0.83% 0.89%+
Net investment income 4.77% 4.41% 4.35%+
Portfolio turnover rate 66% 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.
38
<PAGE>
EVERGREEN
Select International Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30, Year Ended June 30,
--------------------------------- ----------------------------
2000 1999 1998 (a) (b) # 1998 (b) 1997 (b) 1996 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS I SHARES
Net asset value,
beginning of period $ 9.51 $ 9.52 $ 9.32 $ 9.54 $ 9.70 $ 9.62
------- ------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.43 0.40 0.11 0.47 0.49 0.47
Net realized and
unrealized gains or
losses on securities
and foreign currency
related transactions (1.21) (0.03) 0.22 (0.06) 0.09 0.30
------- ------- ------- ------- ------- -------
Total from investment
operations (0.78) 0.37 0.33 0.41 0.58 0.77
------- ------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.56) (0.38) (0.13) (0.63) (0.74) (0.69)
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 8.17 $ 9.51 $ 9.52 $ 9.32 $ 9.54 $ 9.70
------- ------- ------- ------- ------- -------
Total return (8.47%) 3.96% 3.56% 4.42% 6.18% 8.00%
Ratios and supplemental
data
Net assets, end
of period (thousands) $71,910 $55,258 $46,607 $36,722 $34,590 $32,998
Ratios to average net
assets
Expenses++ 0.70% 0.69% 0.76%+ 0.81% 0.85% 0.71%
Net investment income 4.52% 4.18% 4.89%+ 4.90% 5.14% 5.81%
Portfolio turnover rate 64% 158% 3% 46% 90% 67%
<CAPTION>
Year Ended September 30, Year Ended June 30,
--------------------------------- ----------------------------
2000 1999 1998 (a) (b) # 1998 (b) 1997 (b) 1996 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS IS SHARES
Net asset value,
beginning of period $ 9.50 $ 9.51 $ 9.30 $ 9.52 $ 9.68 $ 9.61
------- ------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.33 0.38 0.11 0.40 0.42 0.61
Net realized and
unrealized gains or
losses on securities
and foreign currency
related transactions (1.13) (0.03) 0.23 (0.01) 0.14 0.12
------- ------- ------- ------- ------- -------
Total from investment
operations (0.80) 0.35 0.34 0.39 0.56 0.73
------- ------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.53) (0.36) (0.13) (0.61) (0.72) (0.66)
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 8.17 $ 9.50 $ 9.51 $ 9.30 $ 9.52 $ 9.68
------- ------- ------- ------- ------- -------
Total return (8.67%) 3.74% 3.61% 4.16% 5.92% 7.74%
Ratios and supplemental
data
Net assets, end
of period (thousands) $ 159 $ 238 $ 129 $ 198 $ 182 $ 152
Ratios to average net
assets
Expenses++ 0.95% 0.95% 1.00%+ 1.06% 1.10% 0.96%
Net investment income 4.26% 3.85% 4.65%+ 4.65% 4.89% 5.56%
Portfolio turnover rate 64% 158% 3% 46% 90% 67%
</TABLE>
(a) For the three months ended September 30, 1998. The Fund changed its fiscal
year end from June 30 to September 30, effective September 30, 1998.
(b) On August 28, 1998, CoreFund Global Bond Fund exchanged substantially all
of its net assets for shares of Evergreen Select International Bond Fund.
CoreFund Global Bond Fund is the accounting survivor and as such its basis
of accounting for assets and liabilities and its operating results for the
periods prior to August 28, 1998 have been carried forward in these finan-
cial highlights.
# Net investment income is based on weighted average shares throughout the
period.
+ Annualized.
++ Ratio of expenses to average net assets excludes expense reductions, but
includes fee waivers.
See Combined Notes to Financial Statements.
39
<PAGE>
EVERGREEN
Select Limited Duration Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended September 30,
------------------------------
2000 1999 1998 (a) #
<S> <C> <C> <C>
CLASS I SHARES
Net asset value, beginning of period $ 10.21 $ 10.52 $ 10.42
-------- -------- -------
Income from investment operations
Net investment income 0.67 0.60 0.53
Net realized and unrealized gains or losses on
securities (0.04) (0.29) 0.10
-------- -------- -------
Total from investment operations 0.63 0.31 0.63
-------- -------- -------
Distributions to shareholders from
Net investment income (0.66) (0.60) (0.53)
Net realized gains 0 (0.02) 0
-------- -------- -------
Total distributions to shareholders (0.66) (0.62) (0.53)
-------- -------- -------
Net asset value, end of period $ 10.18 $ 10.21 $ 10.52
-------- -------- -------
Total return 6.42% 3.07% 6.21%
Ratios and supplemental data
Net assets, end of period (thousands) $282,827 $312,157 $70,810
Ratios to average net assets
Expenses++ 0.30% 0.31% 0.30%+
Net investment income 6.61% 5.88% 5.97%+
Portfolio turnover rate 62% 147% 78%
<CAPTION>
Year Ended September 30,
------------------------------
2000 1999 1998 (b) #
<S> <C> <C> <C>
CLASS IS SHARES
Net asset value, beginning of period $ 10.21 $ 10.52 $ 10.41
-------- -------- -------
Income from investment operations
Net investment income 0.64 0.58 0.11
Net realized and unrealized gains or losses on
securities (0.03) (0.29) 0.11
-------- -------- -------
Total from investment operations 0.61 0.29 0.22
-------- -------- -------
Distributions to shareholders from
Net investment income (0.64) (0.58) (0.11)
Net realized gains 0 (0.02) 0
-------- -------- -------
Total distributions to shareholders (0.64) (0.60) (0.11)
-------- -------- -------
Net asset value, end of period $ 10.18 $ 10.21 $ 10.52
-------- -------- -------
Total return 6.15% 2.81% 2.12%
Ratios and supplemental data
Net assets, end of period (thousands) $9,148 $1,629 $ 614
Ratios to average net assets
Expenses++ 0.54% 0.56% 0.55%+
Net investment income 6.45% 5.67% 5.84%+
Portfolio turnover rate 62% 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.
40
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
MORTGAGE-BACKED SECURITIES - 93.6%
FHLMC:
6.25%, 07/15/2004............................ AAA $ 750,000 $ 743,476
6.59%, 06/01/2016............................ AAA 3,226,777 3,227,496
6.70%, 07/01/2029............................ AAA 801,067 785,590
7.22%, 09/01/2028............................ AAA 1,811,311 1,801,314
7.25%, 11/01/2008............................ AAA 10,180 10,210
7.33%, 04/01/2020............................ AAA 401,523 402,860
7.37%, 10/01/2021............................ AAA 926,793 941,853
7.42%, 05/01/2020............................ AAA 37,597 37,809
7.54%, 02/01/2028............................ AAA 689,553 703,929
7.57%, 03/01/2022............................ AAA 1,098,598 1,115,402
7.68%, 03/01/2019............................ AAA 1,549,544 1,582,540
7.69%, 02/01/2021............................ AAA 755,735 755,026
7.70%, 01/01/2022............................ AAA 2,448,808 2,502,626
7.71%, 11/01/2021............................ AAA 1,537,537 1,574,169
7.84%, 09/01/2017............................ AAA 1,161,858 1,183,457
7.86%, 07/01/2030............................ AAA 1,000,362 1,015,207
7.91%, 03/01/2021............................ AAA 973,062 985,527
7.95%, 11/01/2029............................ AAA 2,451,843 2,510,293
8.06%, 04/01/2022............................ AAA 3,184,599 3,257,069
8.13%, 05/01/2026............................ AAA 2,027,824 2,086,388
8.14%, 07/01/2019............................ AAA 261,280 264,792
8.29%, 05/01/2019............................ AAA 28,894 29,047
8.39%, 06/01/2024............................ AAA 280,976 288,732
9.00%, 06/01/2006............................ AAA 280,553 283,917
9.75%, 03/01/2016............................ AAA 396,603 407,470
10.50%, 04/01/2004 - 10/01/2005.............. AAA 164,899 169,122
FNMA:
5.78%, 04/01/2038............................ AAA 1,561,974 1,587,961
5.94%, 11/01/2028............................ AAA 1,788,941 1,731,641
6.10%, 05/01/2036............................ AAA 1,244,940 1,276,952
6.29%, 03/01/2027............................ AAA 2,438,494 2,448,168
6.39%, 11/01/2039............................ AAA 2,513,463 2,466,542
7.28%, 10/01/2017 - 09/01/2030............... AAA 3,372,817 3,379,587
7.33%, 04/01/2028............................ AAA 3,160,473 3,196,753
7.45%, 01/01/2022............................ AAA 352,120 354,652
7.50%, 03/01/2015............................ AAA 488,897 490,092
7.52%, 03/01/2019............................ AAA 134,861 136,420
7.53%, 12/01/2022............................ AAA 290,764 295,442
7.58%, 11/01/2018 - 01/01/2022............... AAA 1,613,739 1,641,884
7.61%, 11/01/2017............................ AAA 1,341,888 1,368,828
7.62%, 06/01/2019............................ AAA 193,444 194,502
7.63%, 01/01/2016............................ AAA 879,956 887,374
7.65%, 03/01/2027............................ AAA 689,002 696,105
7.69%, 07/01/2019............................ AAA 131,140 131,836
</TABLE>
41
<PAGE>
EVERGREEN
Select Adjustable Rate Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
MORTGAGE-BACKED SECURITIES - continued
7.70%, 02/01/2017............................. AAA $ 127,992 $ 127,802
7.71%, 09/01/2018............................. AAA 1,394,713 1,437,209
7.72%, 09/01/2021............................. AAA 5,589,584 5,709,650
7.74%, 07/01/2027............................. AAA 447,201 453,279
7.75%, 08/01/2015............................. AAA 291,234 291,345
7.78%, 08/01/2027............................. AAA 2,118,913 2,173,947
7.83%, 05/01/2022............................. AAA 2,584,367 2,635,034
7.84%, 01/01/2031............................. AAA 2,765,589 2,834,617
7.87%, 12/01/2019............................. AAA 1,044,310 1,069,085
7.98%, 08/01/2027............................. AAA 2,509,620 2,589,647
7.99%, 01/01/2028............................. AAA 221,631 227,231
8.03%, 02/01/2027............................. AAA 781,827 801,615
8.07%, 07/01/2020............................. AAA 395,009 404,822
8.08%, 12/01/2023............................. AAA 845,315 853,303
8.28%, 10/01/2016............................. AAA 438,224 443,978
8.50%, 06/01/2018 - 10/01/2026................ AAA 1,243,541 1,277,572
9.00%, 11/01/2006 - 06/01/2007................ AAA 614,621 628,146
9.50%, 04/01/2005 - 05/01/2007................ AAA 487,907 496,137
10.40%, 04/25/2019............................ AAA 976,712 1,034,087
10.50%, 03/01/2001............................ AAA 10,579 10,625
10.75%, 10/01/2012............................ AAA 305,500 325,437
11.00%, 01/01/2016 - 01/01/2018............... AAA 524,633 569,601
12.50%, 07/01/2015............................ AAA 698,690 788,237
GNMA:
7.125%, 12/20/2022 - 10/20/2027............... AAA 2,008,586 2,023,957
7.375%, 06/20/2022............................ AAA 79,829 79,891
10.25%, 11/15/2029............................ AAA 2,546,230 2,600,337
-----------
Total Mortgage-Backed Securities
(cost $83,210,969).......................... 82,836,651
-----------
U.S. TREASURY OBLIGATIONS - 2.9%
U.S. Treasury Notes:
4.75%, 02/15/2004............................. AAA 1,200,000 1,157,244
5.25%, 05/15/2004............................. AAA 1,000,000 978,590
5.50%, 05/31/2003............................. AAA 425,000 420,352
-----------
Total U.S. Treasury Obligations (cost
$2,573,358)................................. 2,556,186
-----------
Shares Value
SHORT-TERM INVESTMENTS - 1.2%
MUTUAL FUND SHARES - 1.2%
Evergreen Select Money Market Fund (cost $1,076,997)
o .................................................... 1,076,997 1,076,997
-----------
Total Investments - (cost $86,861,324) - 97.7%.................... 86,469,834
Other Assets and Liabilities - 2.3%............................... 2,018,778
-----------
Net Assets - 100.0%............................................... $88,488,612
-----------
</TABLE>
See Combined Notes to Schedules of Investments.
42
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
ASSET-BACKED SECURITIES - 3.0%
Contimortgage Home Equity Loan Trust, Ser.
1998-2, Class A4, 6.19%, 01/15/2014....... AAA $ 925,000 $ 916,938
Distribution Finl. Svcs. Trust:
Ser. 1999-1, Class A5, 5.97%, 08/15/2013.. AAA 12,295,000 11,981,170
Ser. 1999-3, Class A3, 6.43%, 07/01/2011.. AAA 10,175,000 10,140,863
Federal Express Corp. Pass Through Certs.,
Ser. 981A, 6.72%, 01/15/2022.............. AAA 9,266,876 8,655,957
Green Tree Recreational Equipment &
Consumer Trust, Ser. 1998-A, Class A1C,
6.18%, 06/15/2019......................... AAA 568,578 561,480
Mid State Trust VI, 7.34%, 07/01/2035...... AAA 107,516 107,268
SLMA Student Loan Trust:
Ser. 1997-3, Class A1, 6.78%, 04/25/2006.. AAA 1,015,820 1,011,945
Ser. 1998-1, Class A1, 6.89%, 01/25/2007.. AAA 5,735,711 5,736,313
--------------
Total Asset-Backed Securities (cost
$39,155,843)............................ 39,111,934
--------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 10.6%
FHLMC:
Ser. 2073, Class PD, 6.00%, 12/15/2020.... AAA 21,825,000 21,199,387
Ser. 2097, Class PH, 6.00%, 10/15/2027.... AAA 3,425,000 3,197,460
Ser. 2171, Class B, 6.28%, 06/15/2009..... AAA 14,575,000 13,888,491
FNMA:
Ser. 1994-72, Class J, 6.00%, 06/25/2023.. AAA 6,070,000 5,636,391
Ser. 1996-21, Class PJ, 6.00%,
12/25/2010............................... AAA 7,427,600 7,158,238
Ser. 1999-19, Class PG, 6.00%,
10/25/2027............................... AAA 5,840,000 5,404,307
Ser. 1999-35, Class PH, 6.00%,
06/25/2020............................... AAA 8,465,000 8,198,141
Ser. 1999-6, Class PB, 6.00%, 03/25/2019.. AAA 7,340,000 6,739,521
Ser. G92-23, Class Z, 7.50%, 05/25/2021... AAA 699,231 694,646
Ser. G92-44, Class Z, 8.00%, 07/25/2022... AAA 904,910 920,428
GE Capital Mtge. Svcs., Inc., Ser. 2000-5,
Class A, 7.25%, 04/25/2015................ AAA 2,406 2,390
GMAC Comml. Mtge. Secs., Inc.:
Ser. 1998-C2, Class A1, 6.15%,
05/15/2035............................... AAA 8,920,025 8,643,906
Ser. 1999-C1, Class A2, 6.18%,
05/15/2033............................... AAA 16,520,000 15,502,609
Lehman Brothers Comml. Conduit Mtge. Trust:
Ser. 1998-C4, Class A1B, 6.21%,
10/15/2008............................... AAA 670,000 633,397
Ser. 1999-C1, Class A1, 6.41%,
08/15/2007............................... NA 23,355,278 22,909,578
Morgan Stanley Capital I, Inc.:
Ser. 1998-WF1, Cl. A1, 6.25%, 07/15/2007.. AAA 358,411 353,051
Ser. 1998-XL1, Class A3, 6.48%,
06/03/2030............................... AAA 8,835,000 8,537,481
Mtge. Capital Funding, Inc., Ser. 1998-MC2,
Class A1, 6.33%, 10/18/2007............... Aaa 8,580,752 8,399,892
--------------
Total Collateralized Mortgage Obligations
(cost $136,116,726)..................... 138,019,314
--------------
</TABLE>
43
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - 29.1%
CONSUMER DISCRETIONARY - 4.0%
Auto Components - 1.0%
Delphi Automotive Sys. Corp., 6.13%,
05/01/2004............................... BBB $14,100,000 $ 13,467,544
--------------
Automobiles - 2.4%
Ford Motor Co.:
5.80%, 01/12/2009........................ A 21,060,000 18,689,002
6.38%, 02/01/2029........................ A 15,130,000 12,297,044
Gen. Motors Corp., 8.80%, 03/01/2021...... A 235,000 257,527
--------------
31,243,573
--------------
Media - 0.1%
AT&T Corp., 6.00%, 03/15/2009............. AA- 615,000 554,705
--------------
Multi-line Retail - 0.5%
May Dept. Stores Co.:
7.45%, 09/15/2011........................ A+ 275,000 271,817
8.75%, 05/15/2029........................ A+ 5,965,000 6,279,988
--------------
6,551,805
--------------
CONSUMER STAPLES - 2.5%
Beverages - 1.9%
Coca Cola Enterprises, Inc.:
6.75%, 01/15/2038........................ A 5,715,000 4,854,549
8.50%, 02/01/2022........................ A 4,200,000 4,476,755
Pepsi Bottling Group, Inc., 7.00%,
03/01/2029............................... A- 16,320,000 15,001,703
--------------
24,333,007
--------------
Food & Drug Retailing - 0.6%
Safeway, Inc., 6.50%, 11/15/2008.......... BBB 9,000,000 8,354,106
--------------
FINANCIALS - 15.8%
Banks - 4.2%
Bank of New York, Inc., 6.50%,
12/01/2003............................... A 2,610,000 2,582,559
BankAmerica Corp., 7.75%, 07/15/2002...... A 8,350,000 8,464,737
Firststar Bank:
6.25%, 12/01/2002........................ A 2,450,000 2,418,334
7.13%, 12/01/2009........................ A 5,925,000 5,838,205
Natl. City Corp.:
6.88%, 05/15/2019........................ A- 7,795,000 6,943,186
7.20%, 05/15/2005........................ A- 900,000 894,654
Norwest Finl., Inc., 5.38%, 09/30/2003.... AA- 850,000 816,838
PNC Funding Corp., 6.13%, 09/01/2003 -
02/15/2009.............................. BBB+ 15,625,000 14,676,255
SunTrust Banks, Inc., 6.13%, 02/15/2004... A 340,000 330,676
Wachovia Corp., 6.15%, 03/15/2009......... A+ 1,775,000 1,644,626
Washington Mutual, Inc., 7.50%,
08/15/2006............................... BBB+ 10,700,000 10,729,842
--------------
55,339,912
--------------
</TABLE>
44
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
FINANCIALS - continued
Diversified Financials - 6.4%
Associates Corp. of North America:
5.75%, 10/15/2003........................ A+ $ 1,800,000 $ 1,747,037
6.38%, 10/15/2002........................ A+ 825,000 819,756
6.50%, 07/15/2002........................ A+ 10,000,000 9,957,300
Caterpillar Finl. Svcs., 7.93%,
01/15/2003............................... A+ 9,000,000 9,216,558
GMAC Corp.:
5.91%, 03/11/2002........................ A 220,000 217,210
5.95%, 03/14/2003........................ A 5,000,000 4,886,235
5.85%, 01/14/2009........................ A 11,080,000 9,955,579
7.55%, 06/09/2003........................ A 8,000,000 8,121,168
Household Fin. Corp.:
5.88%, 09/25/2004........................ A 225,000 215,146
6.50%, 11/15/2008........................ A 11,000,000 10,330,650
7.20%, 07/15/2006........................ A 5,200,000 5,170,412
8.00%, 05/09/2005........................ A 6,000,000 6,201,396
Intl. Lease Fin. Corp., MTN, 5.64%,
04/01/2002............................... AA- 9,325,000 9,210,620
Merrill Lynch & Co., Inc., 7.85%,
05/30/2003............................... AA- 400,000 409,266
Morgan Stanley Dean Witter, 7.13%,
08/15/2003............................... AA- 500,000 503,004
Morgan Stanley Group, Inc., 5.63%,
01/20/2004............................... AA- 5,000,000 4,811,115
Sears Roebuck Acceptance Corp., MTN,
6.99%, 09/30/2002........................ A- 750,000 748,277
Star Bank, 6.38%, 03/01/2004.............. A 325,000 316,589
--------------
82,837,318
--------------
Insurance - 1.6%
American Gen. Fin. Corp.:
6.67%, 06/28/2002........................ A+ 20,000,000 19,935,000
6.86%, 11/22/2002........................ A+ 650,000 648,693
--------------
20,583,693
--------------
Real Estate - 3.6%
Avalon Bay Communities, Inc., 6.63%,
01/15/2005............................... BBB+ 6,485,000 6,287,279
BRE Properties, Inc., 7.13%, 02/15/2013... BBB 425,000 372,776
Duke Realty, LP, 7.05%, 03/01/2006........ BBB+ 3,470,000 3,405,184
EOP Operating, LP, 6.80%, 01/15/2009...... BBB+ 10,000,000 9,299,990
ERP Operating, LP:
6.55%, 11/15/2001........................ BBB+ 1,325,000 1,312,753
6.63%, 04/13/2005........................ BBB+ 20,450,000 19,593,533
Prologis Trust, 7.00%, 10/01/2003......... BBB+ 450,000 442,350
Spieker Properties, LP, 7.25%,
05/01/2009............................... BBB 7,000,000 6,683,033
--------------
47,396,898
--------------
</TABLE>
45
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
INDUSTRIALS - 2.1%
Aerospace & Defense - 0.0%
Boeing Co., 6.63%, 02/15/2038............. AA- $ 350,000 $ 306,154
--------------
Air Freight & Couriers - 0.4%
United Parcel Svcs., Inc., 8.38%,
04/01/2030............................... AAA 4,470,000 4,836,781
--------------
Airlines - 0.2%
Delta Air Lines, Inc., 8.30%, 12/15/2029.. BBB- 3,565,000 3,204,771
--------------
Building Products - 0.2%
Masco Corp., 7.75%, 08/01/2029............ A- 3,275,000 3,023,310
--------------
Industrial Conglomerates - 0.3%
Tyco Intl. Group SA, 6.88%, 09/05/2002.... A- 3,610,000 3,602,509
--------------
Road & Rail - 1.0%
Burlington Northern Santa Fe Corp.:
6.70%, 08/01/2028........................ BBB+ 615,000 521,313
6.75%, 03/15/2029........................ BBB+ 8,320,000 7,074,072
8.63%, 11/01/2004........................ BBB+ 5,000,000 5,280,075
--------------
12,875,460
--------------
MATERIALS - 0.1%
Metals & Mining - 0.1%
Aluminum Co. of America, Ser. B, 6.50%,
06/15/2018............................... A+ 775,000 691,811
--------------
Paper & Forest Products - 0.0%
Intl. Paper Co., 6.50%, 11/15/2007........ BBB+ 325,000 305,787
--------------
TELECOMMUNICATION SERVICES - 4.1%
Diversified Telecommunication Services -
4.1%
Alltel Corp., 6.50%, 11/01/2013........... A 1,100,000 979,641
AT&T Corp., 6.50%, 03/15/2029............. AA- 7,640,000 6,376,138
Bellsouth Telecommunications, Inc.:
6.38%, 06/01/2028........................ AA- 5,445,000 4,603,328
7.88%, 02/15/2030........................ AA- 3,925,000 3,984,656
MCI Communications Corp., 6.50%,
04/15/2010............................... A- 4,800,000 4,473,816
Pacific Bell, 6.63%, 11/01/2009........... AA- 600,000 565,541
Sprint Capital Corp.:
5.88%, 05/01/2004........................ BBB+ 10,000,000 9,590,410
6.13%, 11/15/2008........................ BBB+ 10,000,000 9,060,830
6.38%, 05/01/2009........................ BBB+ 640,000 586,558
6.88%, 11/15/2028........................ BBB+ 8,300,000 7,102,269
Worldcom, Inc., 6.95%, 08/15/2028......... A- 6,350,000 5,764,981
--------------
53,088,168
--------------
</TABLE>
46
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
UTILITIES - 0.5%
Gas Utilities - 0.5%
Enron Corp., 7.38%, 05/15/2019............ BBB+ $ 7,675,000 $ 7,369,973
--------------
Total Corporate Bonds (cost
$383,202,138).......................... 379,967,285
--------------
MORTGAGE-BACKED SECURITIES - 36.1%
FHLMC:
6.00%, 05/01/2011 - 12/15/2027........... AAA 6,777,863 6,303,421
6.50%, 04/01/2028........................ AAA 265,152 255,190
7.00%, 07/01/2015 - 06/01/2030........... AAA 50,458,556 49,590,317
7.50%, 04/01/2023........................ AAA 143,370 144,220
7.76%, 12/01/2020........................ AAA 27,482 27,878
8.00%, 06/01/2030 - 08/01/2030........... AAA 27,258,588 27,677,553
FNMA:
5.81%, 01/01/2009 [_].................... AAA 10,314,860 9,615,513
6.00%, 12/01/2008 - 09/01/2029........... AAA 68,326,496 64,417,299
6.08%, 04/01/2005........................ AAA 4,745,116 4,599,301
6.13%, 05/01/2009........................ AAA 4,438,033 4,226,354
6.14%, 04/01/2009........................ AAA 3,585,724 3,418,791
6.16%, 12/01/2008........................ AAA 5,153,961 4,875,922
6.31%, 03/01/2008........................ AAA 817,331 792,685
6.32%, 04/01/2009........................ AAA 4,050,479 3,857,057
6.37%, 04/01/2009........................ AAA 182,699 174,594
6.47%, 11/01/2039........................ AAA 8,914,224 8,657,951
6.61%, 02/01/2007........................ AAA 6,056,412 5,983,644
6.63%, 09/15/2009........................ Aaa 22,085,000 21,920,135
6.64%, 10/01/2039........................ AAA 7,163,401 7,007,182
6.70%, 11/01/2007........................ AAA 534,591 529,678
6.77%, 08/01/2004........................ AAA 174,630 173,246
7.00%, 06/01/2029 - 06/01/2030........... AAA 19,220,343 18,850,071
7.04%, 01/01/2030........................ AAA 9,893,783 9,634,269
7.13%, 11/01/2006........................ AAA 4,336,260 4,386,165
7.24%, 11/01/2006........................ AAA 4,562,973 4,624,252
7.28%, 10/01/2003........................ AAA 141,758 142,372
7.36%, 11/01/2006 [_].................... AAA 5,130,000 5,205,411
7.50%, 08/01/2015 - 06/01/2030........... AAA 42,087,601 42,125,379
7.54%, 11/01/2006........................ AAA 6,875,241 7,007,722
7.74%, 06/01/2007 [_].................... AAA 5,153,350 5,395,042
7.92%, 06/01/2019........................ AAA 79,912 81,279
8.00%, 02/01/2030 - 08/01/2030........... AAA 30,161,344 30,587,642
8.66%, 01/01/2005........................ AAA 577,440 607,960
6.00%, TBA............................... AAA 5,170,000 4,827,488
7.50%, TBA............................... AAA 72,825,000 72,659,442
8.00%, TBA............................... AAA 3,645,000 3,692,822
</TABLE>
47
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
MORTGAGE-BACKED SECURITIES - continued
GNMA:
5.50%, 01/20/2030......................... AAA $23,808,720 $ 23,168,742
7.00%, 09/15/2012......................... AAA 108,718 109,198
7.38%, 02/20/2025......................... AAA 5,429,709 5,472,061
7.50%, 07/15/2023......................... AAA 386,550 389,287
7.75%, 07/15/2020 - 08/15/2021............ AAA 7,366,630 7,429,964
8.00%, 07/15/2016 - 06/15/2017............ AAA 104,615 107,390
8.85%, 05/15/2018 - 07/15/2018............ AAA 455,987 476,647
--------------
Total Mortgage-Backed Securities (cost
$465,099,618)........................... 471,228,536
--------------
U.S. TREASURY OBLIGATIONS - 12.6%
U.S. Treasury Bonds, 8.00%, 11/15/2021..... AAA 68,715,000 83,961,141
U.S. Treasury Notes:
3.38%, 01/15/2007......................... AAA 35,592,224 34,424,372
5.75%, 08/15/2003......................... AAA 2,270,000 2,258,650
7.00%, 07/15/2006......................... AAA 41,565,000 43,721,184
--------------
Total U.S. Treasury Obligations (cost
$164,790,381)........................... 164,365,347
--------------
<CAPTION>
Shares Value
<S> <C> <C> <C>
MUTUAL FUND SHARES - 4.7%
Blackrock 2001 Term Trust.......................... 1,049,700 9,709,725
Blackrock Income Trust............................. 140,500 895,687
Blackrock Investment Quality Term Trust............ 139,100 1,121,494
Blackrock No. American Govt. Income Trust.......... 957,100 9,451,362
Blackrock Strategic Term Trust..................... 490,300 4,443,344
Dreyfus Strategic Govt. Income Fund................ 55,500 527,250
Excelsior Income Shares............................ 7,400 115,163
First Australia Prime Income Fund.................. 406,200 1,710,102
First Commonwealth Fund............................ 249,300 2,212,537
Hyperion 2002 Term Trust........................... 907,200 7,824,600
Hyperion 2005 Investment Grade Opportunity Term
Trust............................................. 145,600 1,201,200
Hyperion Total Return Fund......................... 372,200 3,070,650
Income Opportunities Fund 2000..................... 25,000 248,438
John Hancock Income Securities Trust............... 130,400 1,784,850
Kemper Intermediate Govt. Trust.................... 88,700 582,094
MFS Govt. Markets Income Trust..................... 1,283,700 7,862,662
MFS Intermediate Income Trust...................... 803,200 5,120,400
TCW/DW Term Trust 2000............................. 80,700 791,869
Templeton Global Govt. Income Trust................ 50,100 284,944
Templeton Global Income Fund....................... 388,700 2,356,494
--------------
Total Mutual Fund Shares (cost $59,400,807)...... 61,314,865
--------------
</TABLE>
48
<PAGE>
EVERGREEN
Select Core Bond Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
SHORT-TERM INVESTMENTS - 9.0%
REPURCHASE AGREEMENTS - 7.7%
State Street Bank & Trust Co., dated 9/29/2000,
6.58%, maturing 10/2/2000, maturity value
$101,084,398 (cost $101,029,000) (1)............ $101,029,000 $ 101,029,000
--------------
MUTUAL FUND SHARES - 1.3%
Navigator Prime Portfolio (cost $17,021,420)pp... 17,021,420 17,021,420
--------------
Total Short-Term Investments (cost $118,050,420).............. 118,050,420
--------------
Total Investments - (cost $1,365,815,933) - 105.1%.............. 1,372,057,701
Other Assets and Liabilities - (5.1%)........................... (66,714,958)
--------------
Net Assets - 100.0%............................................. $1,305,342,743
--------------
</TABLE>
See Combined Notes to Schedules of Investments.
49
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
ASSET-BACKED SECURITIES - 6.1%
American Airlines, Inc. Pass Through Trust,
Ser. 1999-1, Class C, 7.16%, 10/15/2004 .... A $ 2,000,000 $ 1,969,810
Amresco Residential Securities Mtge. Loan
Trust, Ser. 1998-2, Class A2, 6.25%,
04/25/2022.................................. Aaa 5,456,170 5,424,179
Case Equipment Loan Trust:
Ser. 1997-B, Class A4, 6.41%, 09/15/2004.... AAA 1,087,675 1,085,733
Ser. 1998-A, Class A4, 5.88%, 02/15/2005.... AAA 150,666 149,395
Contimortgage Home Equity Loan Trust, Ser.
1996-1, Class A5, 6.15%, 03/15/2011......... AAA 1,113,901 1,111,022
Continental Airlines, Inc., Ser. 1997, Class
1B, 7.46%, 04/01/2013....................... A+ 2,830,752 2,762,290
Continental Airlines, Inc. Pass Through
Trust, Ser. 1999-2, Class C2, 7.43%,
09/15/2004.................................. A- 3,000,000 2,947,035
Distribution Finl. Svcs. Trust, Ser. 1999-3,
Class A4, 6.65%, 11/03/2015................. AAA 5,000,000 4,983,275
Empire Funding Home Loan Owner Trust, Ser.
1998-1, Class A4, 6.64%, 12/25/2012......... NA 5,495,999 5,439,363
First Plus Home Loan Trust, Ser. 1997-3,
Class A5, 6.86%, 10/10/2013................. AAA 1,156,413 1,155,170
Heller Equipment Asset Receivables Trust,
Ser. 1997-1, Class A2, 6.39%, 05/25/2005.... NR 269,805 269,221
Life Fin. Home Loan Owner Trust, Ser. 1997-3,
Class A2, 6.79%, 10/25/2011................. NA 457,136 455,181
Metlife Capital Equipment Loan Trust, Ser.
1997-A, Class A, 6.85%, 05/20/2008.......... AAA 1,700,000 1,701,420
Prudential Securities Secd. Financing Corp.,
Ser. 1994-4, Class A1, 8.12%, 02/15/2025.... AAA 1,950,450 1,998,032
Southern Pacific Secd. Assets Corp., Ser.
1998-1, Class A6, 7.08%, 03/25/2028......... AAA 2,540,000 2,455,583
The Money Store Home Equity Trust, Ser. 1992-
B, Class A, 6.90%, 07/15/2007............... AAA 443,251 442,158
------------
Total Asset-Backed Securities (cost
$34,693,605).............................. 34,348,867
------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 20.4%
Blackrock Capital Fin., LP, Ser. 1997-C1,
Class D, 7.15%,10/25/2026 144A.............. NA 3,250,000 3,175,949
Carco Auto Loan Master Trust, Ser. 1997-1,
Class A, 6.69%, 08/15/2004.................. AAA 2,446,108 2,420,290
Credit Suisse First Boston Mtge. Corp.:
Ser. 1998-FL1A, Class E, 7.49%,
01/10/2001 (+/-)........................... NA 3,300,000 3,295,978
Ser. 1998-FL2A, Class D, 8.03%,
10/15/2001 (+/-)........................... NA 18,800,000 18,844,934
Deutsche Mtge. & Asset Receiving Corp., Ser.
1998-C1, Class A1, 6.22%, 09/15/2007........ Aaa 3,482,162 3,400,912
</TABLE>
50
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS - continued
DLJ Comml. Mtge. Corp.:
Ser. 1998-ST1A, Class B1, 7.57%, 12/08/2000
144A (+/-).................................. NA $ 6,697,350 $ 6,700,799
Ser. 1998-ST1A, Class B2, 7.89%,
12/08/2000 (+/-)............................ NA 3,350,000 3,350,318
Ser. 1999-STF1, Class B1, 9.14%, 09/05/2001
144A [_] (+/-).............................. NA 6,711,000 6,738,770
Ser. 1999-STF1, Class B2, 9.74%, 09/05/2001
144A [_] (+/-).............................. NA 10,713,000 10,761,455
FHLMC:
Ser. 12, Class A, 9.25%, 11/15/2019.......... AAA 16,092 16,591
Ser. 1519, Class F, 6.75%, 03/15/2007........ AAA 1,551,060 1,547,314
Ser. 1608, Class FN, 7.39%, 11/15/2023....... AAA 132,514 133,062
Ser. 1935, Class FL, 7.39%, 02/15/2027....... AAA 536,815 540,282
FNMA, Ser. 1998-W8, Class A4, 6.02%,
09/25/2028................................... AAA 5,750,000 5,585,406
Fortress Comml. Mtge. Trust, Ser. 1999-PC1,
Class C, 8.39%, 12/10/2004 [_] (+/-)......... NA 6,000,000 6,019,698
Iroquois Trust, Ser. 1997-3, Class A,
6.68%, 11/10/2003 144A....................... Aaa 1,374,584 1,371,058
Potomac Gurnee Fin. Corp., Ser. 1, Class B,
7.00%, 12/21/2026............................ NR 2,000,000 1,951,218
Prudential Home Mtge. Securities, Ser. 1993-
39, Class A8, 6.50%, 10/25/2008.............. NR 2,952,738 2,920,361
Prudential Securities Secd. Financing Corp.,
Ser. 1998-C1, Class A1A, 6.10%, 11/15/2002... AAA 1,980,531 1,965,561
Residential Asset Securitization Trust, Ser.
1997-A1, Class A1, 7.00%, 03/25/2027......... AAA 52,571 52,330
RMF Comml. Mtge., Ser. 1997-1, Class A1,
6.38%, 01/15/2019 144A....................... NR 2,217,762 2,181,313
SASCO Comml. Mtge. Trust:
Ser. 1998-C3A, Class G, 7.17%,
03/25/2002 (+/-)............................ NA 1,856,999 1,841,660
Ser. 1999-C3, Class D, 7.48%, 02/20/2002
(+/-)....................................... NR 4,938,665 4,958,714
Ser. 1999-C3, Class H, 8.08%, 03/20/2002
144A (+/-).................................. NA 9,181,840 9,216,761
Saxon Mtge. Securities Corp., Ser. 1993- 8A,
Class 1A2, 7.38%, 09/25/2023................. AAA 292,229 291,035
Starwood Asset Receivables Trust, Ser. 2000-1,
Class D, 8.07%, 06/25/2004 (+/-)............. NA 5,000,000 4,973,884
Structured Asset Securities Corp.:
Ser. 1996-CFL, Class C, 6.53%, 02/25/2028.... AAA 1,757,144 1,748,828
Ser. 1998-C2A, Class E, 7.25%,
02/25/2001 (+/-)............................ NA 9,694,902 9,687,292
------------
Total Collateralized Mortgage Obligations
(cost $114,955,772)........................ 115,691,773
------------
</TABLE>
51
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - 32.3%
CONSUMER DISCRETIONARY - 4.3%
Auto Components - 0.8%
Johnson Controls, Inc., 6.30%, 02/01/2008..... A- 5,000,000 $ 4,639,050
------------
Automobiles - 1.3%
Daimler Chrysler AG, 6.46%, 12/07/2001........ A+ 2,525,000 2,512,842
Daimler Chrysler America Corp., 7.13%,
03/01/2002................................... A+ 5,000,000 5,005,385
------------
7,518,227
------------
Media - 0.7%
Harcourt Gen., Inc., 8.25%, 06/01/2002........ BBB 1,000,000 1,003,901
Tele-Communications, Inc., 7.25%, 08/01/2005.. AA- 1,288,000 1,296,085
Time Warner, Inc., 8.11%, 08/15/2006.......... BBB 1,690,000 1,751,112
------------
4,051,098
------------
Multi-line Retail - 1.5%
Target Corp., 7.50%, 02/15/2005............... A 8,200,000 8,364,738
------------
CONSUMER STAPLES - 0.3%
Food Products - 0.3%
Nabisco, Inc., 6.00%, 02/15/2001.............. BBB 1,800,000 1,786,428
------------
ENERGY - 1.7%
Oil & Gas - 1.7%
Conoco, Inc., 6.35%, 04/15/2009............... A- 5,000,000 4,747,010
Phillips Petroleum Co.:
8.50%, 05/25/2005............................ BBB 1,715,000 1,812,908
8.75%, 05/25/2010............................ BBB 2,800,000 3,056,177
------------
9,616,095
------------
FINANCIALS - 19.7%
Banks - 7.7%
Bank of America Corp.:
5.75%, 03/15/2001............................ A+ 2,120,000 2,110,428
7.80%, 02/15/2010............................ A 7,000,000 7,216,454
9.13%, 10/15/2001............................ A 1,020,000 1,043,404
Bank One Corp., 9.20%, 12/17/2001............. A+ 3,000,000 3,079,812
BB&T Corp.:
6.38%, 05/23/2003............................ BBB+ 6,850,000 6,575,500
7.05%, 05/23/2003............................ BBB+ 1,000,000 998,420
Bell Atlantic Fin. Svcs., Inc., 7.60%,
03/15/2007................................... A+ 5,000,000 5,106,175
Fleet Boston Finl. Corp., 7.38%, 12/01/2009... A- 5,000,000 4,946,200
Security Pacific Corp., 11.50%, 11/15/2000.... A 1,970,000 1,979,192
Societe Gen., 7.40%, 06/01/2006............... A+ 899,000 900,632
UBS AG, 6.75%, 07/15/2005..................... AA 5,000,000 4,911,010
Wells Fargo & Co., 6.63%, 07/15/2004.......... A+ 5,000,000 4,952,935
------------
43,820,162
------------
</TABLE>
52
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
FINANCIALS - continued
Diversified Financials - 9.3%
Bear Stearns Co., 6.65%, 12/01/2004......... A $ 1,545,000 $ 1,515,137
CIT Group Holdings, Inc., 6.38%,
08/01/2002................................. A+ 3,720,000 3,684,519
Citigroup, Inc., 7.45%, 06/06/2002.......... AA- 3,500,000 3,536,981
Ford Motor Credit Co., 7.38%, 10/28/2009.... A 5,000,000 4,901,900
GMAC:
5.88%, 01/22/2003.......................... A 8,567,000 8,370,610
6.75%, 12/10/2002.......................... A 5,000,000 4,985,895
7.50%, 07/15/2005.......................... A 5,000,000 5,070,645
Lehman Brothers Holdings, Inc., 7.25%,
04/15/2003................................. A 2,640,000 2,654,169
LG&E Capital Corp., 5.75%, 11/01/2001 144A.. BBB+ 5,000,000 4,896,730
Merrill Lynch & Co., Inc., 6.00%,
02/12/2003................................. AA- 2,350,000 2,309,979
Natl. Rural Utilities Fin. Corp., 6.75%,
09/01/2001................................. Aa3 2,000,000 1,999,282
Paine Webber Group, Inc., 6.50%,
11/01/2005................................. BBB+ 1,665,000 1,622,925
Salomon Smith Barney, Inc., 6.25%,
01/15/2005................................. A 7,405,000 7,188,767
------------
52,737,539
------------
Insurance - 2.5%
Associated P & C Holdings, Inc., 6.75%,
07/15/2003 144A............................ Baa1 7,000,000 6,823,208
Horace Mann Educators Corp., 6.63%,
01/15/2006................................. A- 2,250,000 2,164,300
Metropolitan Life Insurance Co., 7.00%,
11/01/2005................................. A+ 5,000,000 4,947,515
------------
13,935,023
------------
Real Estate - 0.2%
EOP Operating, LP, 6.38%, 02/15/2002........ BBB+ 1,250,000 1,226,712
------------
HEALTH CARE - 1.2%
Health Care Providers & Services - 1.2%
Columbia/HCA Healthcare Corp., 6.88%,
07/15/2001................................. BB+ 7,175,000 7,105,919
------------
INDUSTRIALS - 3.8%
Aerospace & Defense - 0.2%
Lockheed Martin Corp., 8.20%, 12/01/2009.... BBB- 800,000 837,762
------------
Commercial Services & Supplies - 0.8%
USA Waste Svcs., Inc., 6.13%, 07/15/2001.... BBB 1,800,000 1,763,966
WMX Technologies, Inc., 6.38%, 12/01/2003... BBB 2,800,000 2,649,895
------------
4,413,861
------------
Industrial Conglomerates - 0.9%
Honeywell Intl., Inc., 7.50%, 03/01/2010.... A 5,000,000 5,110,615
------------
Machinery - 0.8%
Case Corp., Ser. B, 6.25%, 12/01/2003....... BBB- 5,000,000 4,760,100
------------
Road & Rail - 1.1%
Union Pacific Corp., 9.63%, 12/15/2002...... BBB- 6,000,000 6,310,548
------------
</TABLE>
53
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
MATERIALS - 0.3%
Construction Materials - 0.3%
CSR America, Inc., 6.88%, 07/21/2005........ A- $ 1,545,000 $ 1,513,783
------------
TELECOMMUNICATION SERVICES - 0.3%
Diversified Telecommunication Services - 0.3%
Sprint Capital Corp., 5.70%, 11/15/2003..... BBB+ 2,000,000 1,926,826
------------
UTILITIES - 0.7%
Electric Utilities - 0.7%
PG&E Gas Transmission Northwest, 7.10%,
06/01/2005................................. A- 3,675,000 3,708,490
------------
Total Corporate Bonds (cost
$183,964,868)............................ 183,382,976
------------
MORTGAGE-BACKED SECURITIES - 18.6%
FHLB:
5.47%, 02/19/2004 [_]...................... Aaa 2,678,501 2,594,345
6.04%, 04/28/2003 [_]...................... Aaa 582,538 581,534
6.07%, 08/28/2008 [_]...................... Aaa 5,000,000 4,706,670
FHLMC:
6.00%, 12/01/2000.......................... AAA 121,375 120,100
6.50%, 07/01/2004.......................... AAA 793,816 785,593
6.97%, 06/16/2005.......................... Aaa 1,825,000 1,806,803
7.50%, TBA (+/-)(+/-) ..................... AAA 10,000,000 9,984,400
8.00%, TBA (+/-)(+/-)...................... AAA 13,000,000 13,186,940
8.50%, TBA (+/-)(+/-)...................... AAA 15,000,000 15,398,400
FNMA:
6.00%, 11/01/2008.......................... AAA 2,468,735 2,397,808
6.32%, 06/01/2017.......................... AAA 64,374 63,563
11.00%, 02/01/2025......................... AAA 3,415,339 3,732,489
7.00%, TBA (+/-)(+/-)...................... AAA 32,000,000 31,633,640
GNMA:
8.05%, 06/15/2019-10/15/2020............... AAA 4,967,293 5,058,248
8.00%, TBA (+/-)(+/-)...................... AAA 13,000,000 13,231,530
------------
Total Mortgage-Backed Securities (cost
$105,598,330)............................ 105,282,063
------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 7.0%
FHLB:
5.45%, 10/19/2005.......................... Aaa 2,000,000 1,905,904
5.72%, 08/25/2003.......................... Aaa 5,000,000 4,899,190
5.91%, 03/27/2008.......................... Aaa 5,000,000 4,765,055
6.23%, 05/18/2005.......................... Aaa 907,060 901,970
7.70%, 09/20/2004.......................... Aaa 10,000,000 10,408,740
FHLMC, 6.51%, 01/08/2007.................... Aaa 2,250,000 2,238,354
</TABLE>
54
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS -
continued
FNMA:
5.13%, 02/13/2004.......................... AAA $ 6,441,000 $ 6,193,814
5.52%, 04/17/2002.......................... AAA 4,000,000 3,945,460
6.95%, 11/13/2006.......................... AAA 4,495,000 4,427,867
------------
Total U.S. Government & Agency Obligations
(cost $40,523,046)....................... 39,686,354
------------
U.S. TREASURY OBLIGATIONS - 19.3%
U.S. Treasury Notes:
5.75%, 04/30/2003.......................... AAA 10,160,000 10,106,030
6.00%, 08/15/2009.......................... AAA 17,000,000 17,074,375
6.13%, 08/15/2007.......................... AAA 10,530,000 10,645,177
6.50%, 10/15/2006.......................... AAA 21,500,000 22,097,980
6.63%, 05/15/2007.......................... AAA 29,500,000 30,587,813
7.88%, 11/15/2004.......................... AAA 17,695,000 18,939,189
------------
Total U.S. Treasury Obligations (cost
$108,791,171)............................ 109,450,564
------------
YANKEE OBLIGATIONS - CORPORATE - 5.6%
ENERGY - 0.3%
Oil & Gas - 0.3%
Amoco Argentina Oil Co., 6.75%, 02/01/2007.. AA+ 1,625,000 1,614,593
------------
FINANCIALS - 4.7%
Banks - 4.4%
Korea Dev. Bank:
7.25%, 05/15/2006.......................... BBB 5,000,000 4,832,405
7.38%, 09/17/2004.......................... BBB 5,000,000 4,928,595
Natl. Bank of Canada, Ser. B, 8.13%,
08/15/2004................................. A- 14,865,000 15,333,812
------------
25,094,812
------------
Diversified Financials - 0.3%
FBG Fin., Ltd., 6.75%, 11/15/2005........... BBB+ 1,500,000 1,455,608
------------
INDUSTRIALS - 0.3%
Industrial Conglomerates - 0.3%
Tyco Intl. Group SA, 6.13%, 01/15/2009...... A- 1,750,000 1,611,092
------------
MATERIALS - 0.1%
Paper & Forest Products - 0.1%
Abitibi Consolidated., Inc., 8.55%,
08/01/2010................................. BBB- 800,000 815,572
------------
UTILITIES - 0.2%
Electric Utilities - 0.2%
Hydro Quebec, 7.52%, 07/17/2003............. A+ 1,000,000 1,015,620
------------
Total Yankee Obligations - Corporate (cost
$31,879,596)............................. 31,607,297
------------
YANKEE OBLIGATIONS - GOVERNMENT - 1.6%
Canada, 5.50%, 10/01/2008 (cost
$8,975,124)................................ AA- 10,000,000 9,165,770
------------
</TABLE>
55
<PAGE>
EVERGREEN
Select Fixed Income Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
SHORT-TERM INVESTMENTS - 18.1%
COMMERCIAL PAPER - 15.0% pp
Edison Mission Midwest Holdings, 6.75%,
11/20/2000........................................ $ 7,022,000 $ 6,957,485
Glencore Funding, Inc., 6.77%,11/20/2000........... 25,000,000 24,769,632
Hilton Hotels Corp., 7.00%, 11/20/2000............. 2,882,000 2,854,541
Houston Ind. Fin. Co., 6.77%, 11/20/2000........... 25,000,000 24,769,632
Imperial Tobacco Group Plc, 6.78%, 11/20/2000...... 18,991,000 18,815,745
PG&E Generating Co., 6.73%, 11/20/2000............. 7,050,000 6,985,420
-------------
85,152,455
-------------
<CAPTION>
Shares Value
<S> <C> <C>
MUTUAL FUND SHARES - 3.1%
Evergreen Select Money Market Fund o .............. 17,722,396 17,722,396
-------------
Total Short-Term Investments (cost
$102,874,851)................................... 102,874,851
-------------
Total Investments - (cost $732,256,363) - 129.0%................. 731,490,515
Other Assets and Liabilities - (29.0%)........................... (164,349,869)
-------------
Net Assets - 100.0%.............................................. $ 567,140,646
-------------
</TABLE>
See Combined Notes to Schedules of Investments.
56
<PAGE>
EVERGREEN
Select Fixed Income Fund II
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
ASSET-BACKED SECURITIES - 15.8%
Advanta Home Equity Loan Trust, Ser. 1993-2,
Class A2, 6.15%,10/25/2009.................... AAA $ 367,920 $ 361,226
Advanta Mtge. Loan Trust, Ser. 1993-3, Class
A3, 4.75%, 11/25/2009......................... AAA 45,466 45,159
AFG Receivables Trust:
Ser. 1997-A, Class A, 6.35%, 10/15/2002....... AAA 290,031 289,534
Ser. 1997-B, Class B, 6.40%, 02/15/2003....... A+ 74,615 74,469
Ser. 1997-B, Class C, 7.00%, 02/15/2003....... BBB 149,232 149,201
Capital One Master Trust, Ser. 1998-4, Class A,
5.43%, 01/15/2007............................. AAA 1,000,000 963,065
Credit Suisse First Boston Mtge. Securities
Corp., Ser. 1996-2, Class A6, 7.18%,
02/25/2018.................................... AAA 980,000 961,650
EQCC Home Equity Loan Trust, Ser. 1998-2, Class
A6F, 6.16%, 04/15/2008........................ AAA 711,000 696,115
GE Capital Mtge. Funding Corp., Ser. 1999-HE3,
Class A3, 7.11%, 07/25/2014................... Aaa 600,000 599,289
J.C. Penney Master Credit Card Trust, Ser. E,
Class A, 5.50%, 06/15/2007.................... AAA 1,800,000 1,737,063
Northwest Airlines Corp., Ser. 1999-2, Class B,
7.95%, 03/01/2015............................. A 990,615 962,903
Union Acceptance Corp.:
Ser. 1997-A, Class A3, 6.48%, 05/10/2004...... AAA 1,462,000 1,453,733
Ser. 1998-D, Class A3, 5.75%, 06/09/2003...... AAA 1,129,507 1,125,480
-----------
Total Asset-Backed Securities (cost
$9,548,134)................................. 9,418,887
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS - 2.0%
Bank America Mtge. Securities, Inc., Ser. 1998-
3, Class 2M, 6.50%, 07/25/2013................ NR 233,682 223,450
Prudential Home Mtge. Security, Ser. 1996-3,
Class M, 6.75%, 03/25/2011.................... AA 983,461 961,269
-----------
Total Collateralized Mortgage Obligations
(cost $1,224,369)........................... 1,184,719
-----------
CORPORATE BONDS - 12.6%
CONSUMER DISCRETIONARY - 2.7%
Media - 2.7%
Charter Communications, 8.625%, 04/01/2009..... B+ 200,000 180,500
Time Warner, Inc., 6.875%, 06/15/2018.......... BBB 1,000,000 895,617
Times Mirror Co., 7.45%, 10/15/2009............ A 550,000 549,645
-----------
1,625,762
-----------
ENERGY - 0.5%
Oil & Gas - 0.5%
EOTT Energy Partners, LP, 11.00%, 10/01/2009... BB 100,000 106,000
Pride Petroleum Svcs., Inc., 9.375%,
05/01/2007.................................... BB 200,000 204,500
-----------
310,500
-----------
</TABLE>
57
<PAGE>
EVERGREEN
Select Fixed Income Fund II
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
FINANCIALS - 3.4%
Diversified Financials - 3.4%
Enterprise Rent-A-Car USA Fin. Co., 7.95%,
12/15/2009 144A.............................. BBB+ $1,000,000 $ 985,445
Gen. Elec. Capital Corp., 7.25%, 02/01/2005... AAA 1,000,000 1,016,073
-----------
2,001,518
-----------
INDUSTRIALS - 1.5%
Airlines - 1.5%
Delta Air Lines, Inc., 8.30%, 12/15/2029...... BBB- 1,000,000 898,954
-----------
INFORMATION TECHNOLOGY - 0.3%
Semiconductor Equipment & Products - 0.3%
Amkor Tech., Inc., 9.25%, 05/01/2006.......... BB- 200,000 199,500
-----------
TELECOMMUNICATION SERVICES - 0.9%
Diversified Telecommunication Services - 0.9%
Level 3 Communications, Inc., 11.00%,
03/15/2008................................... B 150,000 144,000
McLeod USA, Inc., 9.25%, 07/15/2007........... B+ 200,000 187,500
Nextel Communications, Inc., Sr. Disc. Notes,
Step Bond, 0.00%, 09/15/2007 +............... B 250,000 205,625
-----------
537,125
-----------
UTILITIES - 3.3%
Electric Utilities - 1.6%
Southern CA Edison Co., 7.625%, 01/15/2010.... A 1,000,000 985,301
-----------
Gas Utilities - 1.7%
Williams Gas Pipelines Co., 7.375%, 11/15/2006
144A......................................... BBB 1,000,000 1,000,955
-----------
Total Corporate Bonds (cost $7,720,447)..... 7,559,615
-----------
MORTGAGE-BACKED SECURITIES - 48.8%
FHLMC:
7.00%, 03/15/2010............................ Aaa 3,500,000 3,558,863
8.50%, 09/01/2020............................ AAA 1,173,745 1,211,363
FNMA:
6.00%, 08/01/2006............................ AAA 1,890,139 1,833,888
6.50%, 11/01/2014............................ AAA 1,240,993 1,218,233
7.00%, 08/01/2029............................ AAA 2,973,780 2,916,653
7.50%, 10/01/2029............................ AAA 3,713,236 3,710,266
8.00%, 10/01/2014 - 11/01/2014............... AAA 1,390,377 1,416,377
8.50%, 04/01/2025 - 05/01/2030............... AAA 4,638,791 4,766,283
GNMA:
6.50%, 04/15/2029............................ AAA 3,698,553 3,566,292
7.00%, 04/15/2024............................ AAA 1,988,763 1,965,315
7.50%, 05/15/2029 - 10/15/2029............... AAA 1,971,747 1,979,575
8.00%, 04/15/2030............................ AAA 1,012,351 1,031,515
-----------
Total Mortgage-Backed Securities (cost
$29,070,890)............................... 29,174,623
-----------
</TABLE>
58
<PAGE>
EVERGREEN
Select Fixed Income Fund II
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS - 14.4%
U.S. Treasury Bonds:
5.25%, 02/15/2029............................ AAA $5,200,000 $ 4,671,878
6.00%, 02/15/2026............................ AAA 900,000 891,844
7.25%, 05/15/2016............................ AAA 1,388,000 1,545,017
9.25%, 02/15/2016............................ AAA 1,140,000 1,493,757
-----------
Total U.S. Treasury Obligations (cost
$8,181,899)................................ 8,602,496
-----------
YANKEE OBLIGATIONS - CORPORATE - 4.2%
CONSUMER DISCRETIONARY - 1.0%
Media - 1.0%
Rogers Cablesystems Ltd., Ser. B, 10.00%,
03/15/2005................................... BB+ 400,000 420,000
Telewest Communications Plc, Sr. Disc. Notes,
Step Bond, 0.00%, 10/01/2007 +............... B+ 200,000 192,500
-----------
612,500
-----------
CONSUMER STAPLES - 1.5%
Tobacco - 1.5%
Rothmans Nederland Holdings BV, 6.875%,
05/06/2008................................... A 1,000,000 884,782
-----------
FINANCIALS - 1.7%
Diversified Financials - 1.7%
Principal Finl. Group, 8.20%, 08/15/2009
144A......................................... A 1,000,000 1,006,261
-----------
Total Yankee Obligations - Corporate (cost
$2,638,459)................................ 2,503,543
-----------
<CAPTION>
Shares Value
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 3.0%
MUTUAL FUND SHARES - 3.0%
Evergreen Select Money Market Fund (cost
$1,778,852) o ....................................... 1,778,852 1,778,852
-----------
Total Investments - (cost $60,163,050) - 99.2%..................... 60,222,735
Other Assets and Liabilities - 0.8%................................ 507,666
-----------
Net Assets - 100.0%................................................ $60,730,401
-----------
</TABLE>
See Combined Notes to Schedules of Investments.
59
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - 77.6%
CONSUMER DISCRETIONARY - 33.4%
Auto Components - 2.0%
Hayes Wheels Intl., Inc., Ser. B, 9.125%,
07/15/2007.................................... B $850,000 $ 733,125
Lear Corp., 9.50%, 07/15/2006.................. BB- 750,000 742,500
-----------
1,475,625
-----------
Hotels, Restaurants & Leisure - 9.1%
Argosy Gaming Co., 10.75%, 06/01/2009.......... B 850,000 893,563
Aztar Corp., 8.875%, 05/15/2007................ B+ 800,000 780,000
Boyd Gaming Corp., 9.50%, 07/15/2007........... B+ 850,000 799,000
Horseshoe Gaming Holdings, Ser. B, 8.625%,
05/15/2009.................................... B+ 850,000 837,250
Isle of Capri Casinos, Inc., 8.75%,
04/15/2009.................................... B 850,000 794,750
Mohegan Tribal Gaming Auth., 8.75%,
01/01/2009.................................... BB- 800,000 796,000
Park Place Entertainment Corp., 8.875%,
09/15/2008.................................... BB+ 550,000 547,250
Prime Hospitality Corp., Ser. B, 9.75%,
04/01/2007.................................... B+ 600,000 600,000
Station Casinos, Inc.:
8.875%, 12/01/2008............................ B+ 500,000 484,375
9.75%, 04/15/2007............................. B+ 350,000 350,875
-----------
6,883,063
-----------
Household Durables - 2.9%
K Hovnanian Enterprises, Inc., 10.50%,
10/01/2007 144A............................... BB- 680,000 666,400
Lennar Corp., 7.625%, 03/01/2009............... BB+ 300,000 270,044
MDC Holdings, Inc., 8.375%, 02/01/2008......... BB 750,000 716,250
Standard Pacific Corp., 8.50%, 04/01/2009...... BB 550,000 522,500
-----------
2,175,194
-----------
Leisure Equipment & Products - 0.3%
Outboard Marine Corp., Ser. B, 10.75%,
06/01/2008.................................... B 660,000 267,300
-----------
Media - 17.5%
Ackerley Group, Inc., Ser. B, 9.00%,
01/15/2009.................................... B 850,000 805,375
Adelphia Communications Corp., 9.375%,
11/15/2009.................................... B+ 800,000 729,000
American Lawyer Media, Inc., Ser. B, 9.75%,
12/15/2007.................................... B 800,000 760,000
American Media Operations, Inc., 10.25%,
05/01/2009.................................... B- 750,000 735,000
Chancellor Media Corp., 8.00%, 11/01/2008...... BBB- 850,000 860,625
Echostar DBS Corp., 9.375%, 02/01/2009......... B+ 850,000 837,250
Emmis Communications Corp., Ser. B, 8.125%,
03/15/2009.................................... B- 800,000 764,000
Hollinger Intl. Publishing, Inc., 9.25%,
02/01/2006.................................... BB- 750,000 757,500
Infinity Broadcasting, Inc., 8.875%,
06/15/2007.................................... BBB 600,000 619,500
K-III Communications Corp., Ser. B, 8.50%,
02/01/2006.................................... BB- 850,000 820,250
Lamar Media Corp., 9.625%, 12/01/2006.......... B 750,000 771,562
Lin Televison Corp., 8.375%, 03/01/2008........ B- 800,000 764,000
Mediacom LLC, Ser. B, 8.50%, 04/15/2008........ B+ 800,000 748,000
Premier Parks, Inc., 9.75%, 01/15/2007......... B 750,000 742,500
Sinclair Broadcast Group, Inc., 10.00%,
09/30/2005.................................... B 850,000 845,750
</TABLE>
60
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
CONSUMER DISCRETIONARY - continued
Media - continued
TV Guide, Inc., 8.125%, 03/01/2009............. BB- $800,000 $ 811,000
Young Broadcasting, Inc., Ser. B, 8.75%,
06/15/2007.................................... B 800,000 760,000
-----------
13,131,312
-----------
Multi-line Retail - 0.5%
Ames Dept. Stores, Inc., 10.00%, 04/15/2006.... B+ 850,000 395,250
-----------
Specialty Retail - 1.1%
Michaels Stores, Inc., 10.875%, 06/15/2006..... BB 775,000 806,000
-----------
CONSUMER STAPLES - 3.2%
Food & Drug Retailing - 1.1%
AFC Enterprises, Inc., 10.25%, 05/15/2007...... B 800,000 808,000
-----------
Food Products - 1.0%
Sun World Intl., Inc., Ser. B, 11.25%,
04/15/2004.................................... B 780,000 747,825
-----------
Household Products - 1.1%
Playtex Family Products Corp., 9.00%,
12/15/2003.................................... B 850,000 845,750
-----------
ENERGY - 6.7%
Oil & Gas - 6.7%
Cross Timbers Oil Co., Ser. B, 9.25%,
04/01/2007.................................... B 800,000 800,000
Giant Inds., Inc., 9.00%, 09/01/2007........... B+ 500,000 466,250
Nuevo Energy Co., Ser. B, 9.50%, 06/01/2008.... B+ 800,000 804,000
Ocean Energy, Inc., Ser. B, 8.375%,
07/01/2008.................................... BB- 850,000 854,250
Pioneer Natural Resources Co., 9.625%,
04/01/2010.................................... BB+ 850,000 905,910
Triton Energy, Ltd., 8.75%, 04/15/2002......... BB- 650,000 671,125
Vintage Petroleum, Inc., 9.00%, 12/15/2005..... BB- 500,000 507,500
-----------
5,009,035
-----------
FINANCIALS - 4.0%
Diversified Financials - 4.0%
Avis Rent-A-Car, Inc., 11.00%, 05/01/2009...... BB- 750,000 817,500
Budget Group, Inc., 9.125%, 04/01/2006......... B+ 850,000 616,250
Merrill Corp., Ser. B, 12.00%, 05/01/2009...... B 300,000 208,500
NationsRent, Inc., 10.375%, 12/15/2008......... B 850,000 633,250
United Rentals, Inc., Ser. B, 9.25%,
01/15/2009.................................... BB- 850,000 773,500
-----------
3,049,000
-----------
HEALTH CARE - 2.5%
Health Care Providers & Services - 2.5%
HCA Healthcare Co., 8.75%, 09/01/2010.......... BB+ 550,000 562,742
Owens & Minor, Inc., 10.875%, 06/01/2006....... B+ 550,000 570,625
Tenet Healthcare Corp., Ser. B, 8.125%,
12/01/2008.................................... BB- 800,000 770,000
-----------
1,903,367
-----------
</TABLE>
61
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
INDUSTRIALS - 6.1%
Aerospace & Defense - 1.1%
Sequa Corp., 9.00%, 08/01/2009................. BB $800,000 $ 790,000
-----------
Building Products - 1.0%
American Standard, Inc., 7.375%, 02/01/2008.... BB+ 800,000 750,000
-----------
Commercial Services & Supplies - 1.3%
Allied Waste, Inc., Ser. B, 7.625%,
01/01/2006.................................... BB- 800,000 720,000
Quebecor World, Inc., 7.75%, 02/15/2009........ BBB- 300,000 280,175
-----------
1,000,175
-----------
Construction & Engineering - 0.9%
Metromedia Fiber Network, Inc.:
10.00%, 12/15/2009............................ B+ 500,000 470,000
Ser. B, 10.00%, 11/15/2008.................... B+ 250,000 235,000
-----------
705,000
-----------
Industrial Conglomerates - 1.0%
Nortek, Inc., Ser. B, 8.875%, 08/01/2008....... B+ 800,000 740,000
-----------
Machinery - 0.8%
Eagle-Picher Inds., 9.375%, 03/01/2008......... B- 700,000 577,500
-----------
MATERIALS - 9.8%
Chemicals - 3.5%
ISP Holdings, Inc., Ser. B, 9.75%, 02/15/2002.. BB- 250,000 225,000
Lyondell Chemical Co., Ser. A, 9.625%,
05/01/2007.................................... BB 800,000 783,000
Scotts Co., 8.625%, 01/15/2009 144A............ B+ 800,000 788,000
Sterling Chemicals, Inc., Ser. B, 12.375%,
07/15/2006.................................... BB- 800,000 812,000
-----------
2,608,000
-----------
Containers & Packaging - 4.3%
Container Corp. of America, Ser. A, 11.25%,
05/01/2004.................................... B 750,000 757,500
Owens-Illinois, Inc.:
7.15%, 05/15/2005............................. BB+ 535,000 485,187
7.35%, 05/15/2008............................. BB+ 513,000 450,922
Packaging Corp. of America, 9.625%,
04/01/2009.................................... B+ 800,000 814,000
Stone Container Corp., 10.75%, 10/01/2002...... B+ 750,000 764,063
-----------
3,271,672
-----------
Metals & Mining - 2.0%
Kaiser Aluminum & Chemical Corp., Ser. B,
10.875%, 10/15/2006........................... B1 550,000 543,125
P&L Coal Holdings Corp., Ser. B, 9.625%,
05/15/2008.................................... B 800,000 780,000
WHX Corp., 10.50%, 04/15/2005.................. B- 350,000 194,250
-----------
1,517,375
-----------
</TABLE>
62
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
TELECOMMUNICATION SERVICES - 9.0%
Diversified Telecommunication Services - 4.8%
Allegiance Telecom, Inc., 12.875%, 05/15/2008.. B $500,000 $ 503,750
Intermedia Communications, Inc., Ser. B, 8.60%,
06/01/2008.................................... B 100,000 96,500
McLeod USA, Inc., 9.25%, 07/15/2007............ B+ 750,000 703,125
Nextel Communications, Inc., 9.375%,
11/15/2009.................................... B 700,000 686,000
Nextlink Communications, Inc., 12.50%,
04/15/2006.................................... B 700,000 687,750
Time Warner Telecom LLC, 9.75%, 07/15/2008..... B 750,000 686,250
Williams Communications Group, Inc., 10.875%,
10/01/2009.................................... B+ 250,000 230,000
-----------
3,593,375
-----------
Wireless Telecommunications Services - 4.2%
Crown Castle Intl. Corp., 9.00%, 05/15/2011.... B 800,000 764,000
Powertel, Inc., 11.125%, 06/01/2007............ B 600,000 646,500
Price Communications Wireless, Inc.:
11.75%, 07/15/2007............................ B- 450,000 483,750
Ser. B, 9.125%, 12/15/2006.................... B+ 350,000 355,250
Voicestream Wireless Corp., 10.375%,
11/15/2009.................................... B- 825,000 895,125
-----------
3,144,625
-----------
UTILITIES - 2.9%
Electric Utilities - 2.2%
AES Corp., 8.50%, 11/01/2007................... B+ 850,000 816,000
Calpine Corp., 7.75%, 04/15/2009............... BB+ 850,000 809,826
-----------
1,625,826
-----------
Gas Utilities - 0.7%
Western Gas Resources, Inc., 10.00%,
06/15/2009.................................... BB- 500,000 525,000
-----------
Total Corporate Bonds (cost $59,503,929)..... 58,345,269
-----------
YANKEE OBLIGATIONS - CORPORATE - 9.0%
CONSUMER DISCRETIONARY - 2.7%
Media - 2.7%
Imax Corp., 7.875%, 12/01/2005................. BB- 500,000 480,625
Rogers Cablesystems, Ltd., 11.00%, 12/01/2015.. BB- 700,000 787,500
Telewest Communications Plc, 9.625%,
10/01/2006.................................... B+ 800,000 740,000
-----------
2,008,125
-----------
ENERGY - 1.0%
Oil & Gas - 1.0%
Gulf Canada Resources, Ltd., 8.35%,
08/01/2006.................................... BBB- 800,000 796,000
-----------
</TABLE>
63
<PAGE>
EVERGREEN
Select High Yield Bond Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
YANKEE OBLIGATIONS - CORPORATE - continued
MATERIALS - 4.2%
Paper & Forest Products - 4.2%
Domtar, Inc., 8.75%, 08/01/2006............... BBB- $ 670,000 $ 700,150
Norampac, Inc., 9.50%, 02/01/2008............. BB 800,000 810,000
Repap New Brunswick, Inc., 11.50%,
06/01/2004................................... B- 800,000 892,000
Tembec Inds., Inc, 8.625%, 06/30/2009......... BB+ 800,000 784,000
-----------
3,186,150
-----------
TELECOMMUNICATION SERVICES - 1.1%
Wireless Telecommunications Services - 1.1%
Rogers Cantel, Inc., 9.75%, 06/01/2016........ BB+ 750,000 813,750
-----------
Total Yankee Obligations - Corporate (cost
$6,815,738)................................ 6,804,025
-----------
Shares Value
WARRANTS - 0.0%
FINANCIALS - 0.0%
Diversified Financials - 0.0%
Merrill Corp., Expiring 5/1/2009 (cost $3,732) 144A
*.................................................... 300 3
-----------
SHORT-TERM INVESTMENTS - 11.1%
MUTUAL FUND SHARES - 11.1%
Evergreen Select Money Market Fund (cost $8,338,568)
o ................................................... 8,338,568 8,338,568
-----------
Total Investments - (cost $74,661,967) - 97.7%..................... 73,487,865
Other Assets and Liabilities - 2.3%................................ 1,717,013
-----------
Net Assets - 100.0%................................................ $75,204,878
-----------
</TABLE>
See Combined Notes to Schedules of Investments.
64
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
ASSET-BACKED SECURITIES - 2.2%
BankBoston Receivable Asset Backed Trust,
Ser. 1997-1, Class A8, 6.54%, 05/15/2009.. AAA $ 7,325,000 $ 7,283,650
Carco Auto Loan Master Trust, Ser. 1997-1,
Class A, 6.689%, 08/15/2004............... AAA 2,224,358 2,200,880
Corestates Home Equity Trust, Ser. 1993-2,
Class A, 5.10%, 03/15/2009................ AAA 545,668 542,894
Empire Funding Home Loan Owner Trust, Ser.
1998-1, Class A4, 6.64%,12/25/2012........ NA 4,996,363 4,944,876
Heller Equipment Asset Receivables Trust,
Ser. 1997-1, Class A2, 6.39%, 05/25/2005.. NR 1,216,787 1,214,152
Saxon Asset Securities Trust, Ser. 1993-3,
Class AF4, 7.55%,10/25/2026............... Aaa 17,565,000 17,616,378
--------------
Total Asset-Backed Securities (cost
$33,966,953)............................ 33,802,830
--------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 8.9%
Commerce 2000, Ser. 2000-FL1A, Class H,
7.90%, 12/16/2011 [_] (+/-)............... NA 7,305,000 7,186,001
Credit Suisse First Boston Mtge. Corp.:
Ser. 1998-FL2A, Class D, 8.019%,
10/15/2001 (+/-)......................... NA 7,460,000 7,477,830
Ser. 1998-FL2A, Class E, 8.619%,
11/15/2001 (+/-)......................... NA 12,155,000 12,211,747
DLJ Comml. Mtge. Corp.:
Ser. 1998-ST1A, Class B3, 8.688%,
12/08/2000 144A [_] (+/-)................ NA 8,100,000 8,125,596
Ser. 1999-STF1, Class B1, 9.128%,
09/05/2001 144A [_] (+/-)................ NA 8,510,000 8,545,214
FHLMC:
Ser. 1519, Class F, 6.75%, 03/15/2007..... AAA 5,343,055 5,330,152
Ser. 1727, Class E, 6.50%, 04/15/2018..... AAA 1,960,826 1,955,208
Ser. A, Class 3, 11.875%, 06/15/2013...... AAA 30,545 32,042
FNMA, Ser. 1992-210, Class H, 6.50%,
03/25/2019................................ AAA 4,120,000 4,061,475
GMAC Comml. Mtge. Securities., Inc., Ser.
1999-FL1, Class E, 8.223%, 10/15/2009
(+/-)..................................... Baa3 18,000,000 17,932,500
Midland Realty Acceptance Corp., Ser. 1996-
C2, Class A2, 7.233%, 01/25/2029.......... NR 2,710,000 2,722,046
Paine Webber Mtge. Acceptance Corp. IV,
Ser. 1996-M1, Class E, 7.655%,
01/02/2012 [_]............................ NA 5,000,000 4,944,335
Potomac Gurnee Fin. Corp., Ser. 1, Class A,
6.887%, 12/21/2026........................ NR 10,875,922 10,691,363
Salomon Brothers Mtge. Secs. IV, Ser. 1985-
1, Class Z,
10.25%, 04/01/2016 [_].................... NA 3,334 3,334
SASCO Comml. Mtge. Trust:
Ser. 1998-C3A, Class F, 7.17%,
05/25/2015 [_] (+/-)..................... NA 3,775,038 3,766,204
Ser. 1998-C3A, Class G, 7.17%, 03/25/2002
(+/-).................................... NA 12,998,993 12,891,622
Ser. 1999-C3, Class D, 7.47%, 02/20/2002
(+/-).................................... NR 4,938,665 4,958,714
Sears Mtge. Securities Corp., Ser. 1998,
Class PA19,
10.36%, 07/25/2018 [_].................... NA 84,217 84,217
</TABLE>
65
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS -
continued
Starwood Asset Receivables Trust:
Ser. 2000-1, Class C, 7.62%, 09/25/2022
(+/-).................................... NA $10,000,000 $ 9,963,879
Ser. 2000-1, Class E, 9.37%, 01/25/2005
(+/-).................................... NA 10,000,000 9,957,649
Structured Asset Securities Corp., Ser.
2000-1, Class A1,
6.91%, 07/25/2024 (+/-)................... AAA 8,692,358 8,674,669
--------------
Total Collateralized Mortgage Obligations
(cost $141,055,229)..................... 141,515,797
--------------
CORPORATE BONDS - 42.0%
CONSUMER DISCRETIONARY - 4.2%
Hotels, Restaurants & Leisure - 0.2%
Circus Circus Enterprises, Inc., 7.625%,
07/15/2013................................ BB- 4,000,000 3,340,000
--------------
Household Durables - 0.4%
Pulte Corp., 9.50%, 04/01/2003............. BBB 6,500,000 6,581,978
--------------
Media - 1.8%
Comcast Cable Communications, 6.20%,
11/15/2008................................ BBB 6,910,000 6,394,141
Tele-Communications, Inc., 7.25%,
08/01/2005................................ AA- 5,000,000 5,031,385
Time Warner, Inc.:
6.875%, 06/15/2018........................ BBB 4,000,000 3,582,468
8.11%, 08/15/2006......................... BBB 8,355,000 8,657,125
8.18%, 08/15/2007......................... BBB 5,000,000 5,183,170
--------------
28,848,289
--------------
Multi-line Retail - 1.8%
Dayton Hudson Corp., 5.875%, 11/01/2008.... A 3,500,000 3,168,715
Target Corp., 7.50%, 02/15/2005............ A 16,250,000 16,576,462
Wal-Mart Stores, Inc., 6.875%, 08/10/2009.. AA 8,000,000 7,919,600
--------------
27,664,777
--------------
CONSUMER STAPLES - 1.0%
Beverages - 0.4%
Coca Cola Enterprises, Inc., 7.875%,
02/01/2002................................ A 7,000,000 7,076,965
--------------
Household Products - 0.6%
Procter & Gamble Co., 6.875%, 09/15/2009... AA 8,750,000 8,680,157
--------------
ENERGY - 2.4%
Energy Equipment & Services - 0.4%
Transocean Offshore, Inc., 7.45%,
04/15/2027................................ A 6,000,000 5,954,700
--------------
Oil & Gas - 2.0%
BP Amoco Plc, 9.00%, 04/01/2021............ AA+ 6,500,000 7,683,943
Chevron Corp., 6.625%, 10/01/2004.......... AA 10,135,000 10,084,274
Occidental Petroleum Corp., 8.45%,
02/15/2029................................ BBB- 5,000,000 5,233,225
Texaco Capital, Inc., 5.50%, 01/15/2009.... A+ 10,000,000 9,034,140
--------------
32,035,582
--------------
</TABLE>
66
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
FINANCIALS - 18.1%
Banks - 4.5%
Banc America, 7.07%, 05/12/2005 (+/-)..... NA $ 5,000,000 $ 5,000,000
Bank of America Corp., 9.50%, 06/01/2004.. A+ 5,000,000 5,379,975
Comerica, Inc., 7.125%, 12/01/2013........ A- 7,500,000 7,121,348
Fleet Finl. Group, Inc.:
6.375%, 05/15/2008....................... A- 6,200,000 5,819,630
6.875%, 01/15/2028....................... A- 5,000,000 4,451,655
HUBCO Capital Trust II, Ser. B, 7.65%,
06/15/2028............................... NA 4,000,000 3,588,080
Keycorp, 7.50%, 06/15/2006................ BBB+ 5,285,000 5,305,712
Mellon Capital I, Ser. A, 7.72%,
12/01/2026............................... NR 7,000,000 6,348,937
Mellon Capital II, Ser. B, 7.995%,
01/15/2027............................... A- 6,265,000 5,859,504
Paribas, NY, 6.95%, 07/22/2013............ A 5,000,000 4,634,540
PNC Institutional Capital Trust B,
8.315%, 05/15/2027, 144A ................ BBB 11,000,000 10,465,147
Wells Fargo & Co., 6.625%, 07/15/2004..... A+ 8,360,000 8,281,307
--------------
72,255,835
--------------
Diversified Financials - 12.0%
Capital One Finl. Corp., 7.25%,
05/01/2006............................... BB+ 5,000,000 4,738,815
CIT Group, Inc., 7.125%, 10/15/2004....... A+ 28,510,000 28,459,138
Citigroup Capital II, 7.75%, 12/01/2036... Aa3 10,000,000 9,068,090
Duke Capital Corp., 7.25%, 10/01/2004..... A 10,000,000 10,073,160
Emerald Investment Grade CBO II, Ltd.,
Ser. 1-A,
7.262%, 02/24/2012 [_] (+/-)............. NA 8,000,000 8,021,840
Finl. Assistance Corp.:
Ser. A-03, 9.375%, 07/21/2003............ NA 5,000,000 5,363,525
Ser. A-05, 8.80%, 06/10/2005............. NA 17,500,000 19,074,143
Ford Motor Credit Co., 6.70%, 07/16/2004.. A 5,000,000 4,901,785
Heller Finl., Inc., 6.00%, 03/19/2004..... A- 10,000,000 9,613,180
Household Fin. Corp., 7.20%, 07/15/2006... A 20,000,000 19,886,200
Jet Equipment Trust, Ser. A10, 9.41%,
06/15/2010............................... NR 9,823,688 10,574,149
Lehman Brothers Holdings, Inc., MTN:
6.00%, 02/26/2001........................ A 5,000,000 4,986,395
7.50%, 09/01/2006........................ A 10,000,000 9,978,980
Macsaver Finl. Svcs., Inc., 7.60%,
08/01/2007. ............................. NR 4,000,000 720,000
Merrill Lynch & Co., Inc., 8.40%,
11/01/2019............................... AA- 4,600,000 4,854,826
Morgan Stanley Dean Witter, 5.25%,
02/08/2001............................... AA- 12,250,000 12,189,804
Paine Webber Group, Inc., 6.50%,
11/01/2005............................... BBB+ 5,000,000 4,873,650
Private Export Funding Corp.:
6.90%, 01/31/2003........................ AAA 5,000,000 5,044,585
7.30%, 01/31/2002........................ AAA 10,000,000 10,102,140
Topaz 1997 1, Ltd., 6.92%, 03/10/2007
144A..................................... A+ 7,241,082 7,125,051
--------------
189,649,456
--------------
</TABLE>
67
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
FINANCIALS - continued
Insurance - 0.8%
AMERICO, 7.20%, 04/01/2002................ BBB $ 4,000,000 $ 3,840,220
Loews Corp., 7.00%, 10/15/2023............ AA- 10,000,000 8,411,520
--------------
12,251,740
--------------
Real Estate - 0.8%
Duke Weeks Realty, Ltd., 7.75%,
11/15/2009............................... BBB+ 7,500,000 7,398,082
Susa Partnership, LP, 7.00%, 12/01/2007... BBB 5,000,000 4,663,475
--------------
12,061,557
--------------
INDUSTRIALS - 4.6%
Aerospace & Defense - 1.0%
Raytheon Co., 6.00%, 12/15/2010........... BBB- 6,000,000 5,341,626
United Technologies Corp., 7.00%,
09/15/2006............................... A+ 10,480,000 10,535,575
--------------
15,877,201
--------------
Air Freight & Couriers - 0.3%
Federal Express Corp., 9.65%, 06/15/2012.. BBB 4,570,000 5,084,011
--------------
Airlines - 0.1%
Continental Airlines, Inc., Pass Through
Certificates, 7.42%,04/01/2007........... BBB+ 1,331,602 1,314,750
--------------
Building Products - 0.3%
Masco Corp., 7.75%, 08/01/2029............ A- 5,000,000 4,615,740
--------------
Commercial Services & Supplies - 0.7%
USA Waste Service, Inc.:
7.00%, 10/01/2004........................ BBB 2,000,000 1,910,896
7.125%, 10/01/2007....................... BBB 10,525,000 9,823,688
--------------
11,734,584
--------------
Construction & Engineering - 0.6%
Metromedia Fiber Network, Inc., Ser. B,
10.00%, 11/15/2008....................... B+ 10,000,000 9,400,000
--------------
Machinery - 1.0%
Caterpillar, Inc., 7.25%, 09/15/2009...... A+ 10,000,000 9,846,260
Deere & Co., 8.95%, 06/15/2019............ A+ 5,000,000 5,388,630
--------------
15,234,890
--------------
Road & Rail - 0.6%
CSX Corp., 8.10%, 09/15/2022.............. BBB 10,000,000 9,799,090
--------------
INFORMATION TECHNOLOGY - 0.6%
Internet Software & Services - 0.3%
PSI Net, Inc., 11.00%, 08/01/2009......... B- 8,000,000 5,240,000
--------------
</TABLE>
68
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
INFORMATION TECHNOLOGY - continued
Semiconductor Equipment & Products - 0.3%
Texas Instruments Inc., 6.125%,
02/01/2006............................... A $ 5,000,000 $ 4,828,085
--------------
MATERIALS - 2.3%
Construction Materials - 0.1%
Owens Corning, 7.50%, 05/01/2005. ........ BB- 5,500,000 2,227,500
--------------
Metals & Mining - 0.9%
Aluminum Co. America, Inc., 6.75%,
01/15/2028............................... A+ 12,500,000 11,249,550
Freeport McMoran Resources Partners,
7.00%, 02/15/2008........................ BBB 4,000,000 3,660,828
--------------
14,910,378
--------------
Paper & Forest Products - 1.3%
Boise Cascade Corp., 9.45%, 11/01/2009.... BB+ 5,000,000 5,279,230
Fort James Corp., 6.625%, 09/15/2004...... BBB 10,000,000 9,707,340
Georgia Pacific Corp., 7.70%, 06/15/2015.. BBB- 5,000,000 4,744,135
--------------
19,730,705
--------------
TELECOMMUNICATION SERVICES - 5.7%
Diversified Telecommunication Services -
5.4%
AT&T Corp., 6.50%, 03/15/2029............. AA- 6,935,000 5,787,764
Bellsouth Savings & Employee Stock, MTN,
9.125%, 07/01/2003....................... AA- 2,109,035 2,156,412
GTE Corp.:
6.94%, 04/15/2028........................ A+ 5,000,000 4,538,810
9.375%, 12/01/2000....................... A+ 5,000,000 5,018,285
Qwest Communications Intl., Inc., Ser. B,
7.50%, 11/01/2008........................ BBB+ 10,500,000 10,473,834
Sprint Capital Corp., 6.90%, 05/01/2019... BBB+ 10,000,000 8,800,910
Sprint Spectrum, LP, 11.00%, 08/15/2006... BBB+ 5,000,000 5,373,765
U.S. West Capital Funding, Inc.:
6.25%, 07/15/2005........................ BBB+ 5,000,000 4,807,345
6.375%, 07/15/2008....................... BBB+ 5,000,000 4,660,410
U.S. West Communications, Inc., 7.20%,
11/01/2004............................... BBB+ 17,830,000 17,849,007
Williams Communications Group, Inc.,
10.875%, 10/01/2009...................... B+ 5,000,000 4,600,000
Worldcom, Inc., 6.40%, 08/15/2005......... A- 12,510,000 12,131,798
--------------
86,198,340
Wireless Telecommunications Services - 0.3%
Airtouch Communications, Inc., 7.00%,
10/01/2003............................... A 5,000,000 4,977,525
--------------
UTILITIES - 3.1%
Electric Utilities - 3.1%
Carolina Power & Light Co., 8.625%,
09/15/2021............................... A 3,000,000 3,192,744
Central VT Pub. Svcs. Corp., 8.125%,
08/01/2004............................... BBB- 7,000,000 6,865,068
</TABLE>
69
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
UTILITIES - continued
Electric Utilities - continued
Commonwealth Edison Co., 7.625%,
01/15/2007.............................. BBB $ 10,000,000 $ 10,041,230
Edison Mission Energy, 7.73%,
06/15/2009.............................. A- 10,000,000 9,813,980
Niagara Mohawk Power Corp., 7.75%,
10/01/2008.............................. BBB- 18,500,000 18,637,381
--------------
48,550,403
--------------
Total Corporate Bonds (cost
$689,538,254)......................... 666,124,238
--------------
MORTGAGE-BACKED SECURITIES - 16.4%
FHLMC:
5.50%, 04/01/2006....................... AAA 1,449,099 1,387,019
6.875%, 01/15/2005...................... AAA 34,325,000 34,766,420
8.00%, 07/01/2025....................... AAA 2,334,544 2,375,048
7.00%, TBA (+/-)(+/-)................... AAA 19,250,000 19,020,623
7.50%, TBA (+/-)(+/-)................... AAA 20,000,000 19,968,800
8.50%, TBA (+/-)(+/-)................... AAA 10,000,000 10,265,600
FNMA:
7.50%, 05/01/2027....................... AAA 7,645,728 7,650,698
8.00%, 11/01/2029....................... AAA 8,188,212 8,335,354
7.50%, TBA (+/-)(+/-)................... AAA 20,000,000 20,143,800
8.00%, TBA (+/-)(+/-)................... AAA 10,000,000 10,131,300
GNMA:
6.00%, 04/15/2011 - 01/20/2029.......... AAA 24,419,220 22,945,920
6.50%, 02/15/2009 - 04/20/2029.......... AAA 47,379,079 45,793,790
7.00%, 02/15/2011 - 03/15/2011.......... AAA 2,016,446 2,026,629
8.25%, 07/15/2008 - 05/15/2020.......... AAA 4,968,842 5,107,217
8.50%, 07/15/2021....................... AAA 289,658 298,112
9.00%, 05/15/2016 - 10/15/2021.......... AAA 4,980,301 5,226,839
9.50%, 08/15/2018 - 12/15/2020.......... AAA 1,058,039 1,113,081
11.50%, 05/15/2013 - 06/15/2013......... AAA 30,529 33,770
7.00%, TBA (+/-)(+/-)................... AAA 17,000,000 16,745,000
7.50%, TBA (+/-)(+/-)................... AAA 6,500,000 6,518,265
8.00%, TBA (+/-)(+/-)................... AAA 19,100,000 19,440,171
--------------
Total Mortgage-Backed Securities (cost
$259,039,431)......................... 259,293,456
--------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 3.7%
FFCB, 7.60%, 07/24/2006.................. AAA 2,000,000 2,089,586
FHLB:
5.375%, 03/02/2001...................... Aaa 4,000,000 3,980,060
5.615%, 01/27/2003...................... Aaa 9,500,000 9,325,627
5.815%, 07/13/2005...................... Aaa 5,000,000 4,851,895
6.50%, 11/29/2005....................... Aaa 5,000,000 4,985,530
FHLMC, 6.24%, 10/06/2004................. AAA 5,000,000 4,952,030
</TABLE>
70
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS -
continued
FNMA:
5.125%, 02/13/2004........................ AAA $ 9,045,000 $ 8,697,880
6.375%, 01/16/2002 - 06/15/2009........... Aaa 20,099,000 19,705,803
--------------
Total U.S. Government & Agency
Obligations (cost $60,454,885).......... 58,588,411
--------------
U.S. TREASURY OBLIGATIONS - 21.8%
U.S. Treasury Bonds:
6.125%, 08/15/2029........................ AAA 1,790,000 1,828,598
6.50%, 11/15/2026......................... AAA 12,301,000 12,989,094
7.50%, 11/15/2016......................... AAA 25,000,000 28,492,200
8.00%, 11/15/2021......................... AAA 10,000,000 12,218,750
8.125%, 08/15/2019 - 08/15/2021........... AAA 17,454,000 21,466,031
8.75%, 05/15/2020......................... AAA 15,000,000 19,443,750
8.875%, 02/15/2019........................ AAA 8,500,000 11,050,000
9.00%, 11/15/2018......................... AAA 15,000,000 19,668,750
11.25%, 02/15/2015........................ AAA 15,000,000 22,298,445
U.S. Treasury Notes:
5.75%, 10/31/2002 - 08/15/2003............ AAA 77,338,000 76,964,405
6.125%, 12/31/2001 - 08/15/2007........... AAA 75,940,000 75,987,594
6.25%, 02/28/2002......................... AAA 5,000,000 5,009,375
7.00%, 07/15/2006......................... AAA 17,535,000 18,444,628
7.25%, 05/15/2004......................... AAA 10,000,000 10,428,130
7.50%, 11/15/2001......................... AAA 5,050,000 5,117,862
7.875%, 11/15/2004........................ AAA 4,000,000 4,281,252
--------------
Total U.S. Treasury Obligations (cost
$338,067,319)........................... 345,688,864
--------------
YANKEE OBLIGATIONS - CORPORATE - 7.6%
CONSUMER DISCRETIONARY - 0.5%
Hotels, Restaurants & Leisure - 0.5%
Royal Caribbean Cruises, Ltd., 7.50%,
10/15/2027................................ BBB 10,060,000 8,042,155
--------------
ENERGY - 1.1%
Oil & Gas - 1.1%
Petro Canada, Ltd., 8.60%, 01/15/2010...... AA+ 15,000,000 16,503,435
--------------
FINANCIALS - 1.9%
Banks - 0.9%
Banco Santiago, 7.00%, 07/18/2007.......... BBB 2,000,000 1,829,004
Korea Dev. Bank, 7.25%, 05/15/2006......... BBB 8,000,000 7,731,848
Westpac Banking Corp., 9.125%, 08/15/2001.. A+ 5,000,000 5,086,405
--------------
14,647,257
--------------
</TABLE>
71
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
YANKEE OBLIGATIONS-CORPORATE - continued
FINANCIALS - continued
Diversified Financials - 1.0%
FBG Fin., Ltd., 6.75%, 11/15/2005......... BBB+ $ 6,000,000 $ 5,822,430
Ford Capital BV, 9.875%, 05/15/2002....... A 5,000,000 5,219,710
Santander Fin. Issuances, 6.375%,
02/15/2011............................... A 5,000,000 4,508,660
--------------
15,550,800
--------------
INDUSTRIALS - 0.9%
Industrial Conglomerates - 0.9%
Celulosa Arauco Y Constitucion, 7.20%,
09/15/2009............................... BBB+ 5,000,000 4,533,035
Tyco Intl. Group SA, 5.875%, 11/01/2004... A- 10,000,000 9,559,440
--------------
14,092,475
--------------
MATERIALS - 0.3%
Construction Materials - 0.3%
Cemex SA, 9.625%, 10/01/2009.............. BBB- 5,000,000 5,187,500
--------------
TELECOMMUNICATION SERVICES - 1.9%
Wireless Telecommunications Services - 1.9%
Vodafone Airtouch, Plc, 7.75%,
02/15/2010............................... A 30,085,000 30,713,656
--------------
UTILITIES - 1.0%
Electric Utilities - 1.0%
Korea Electric Power Corp., 8.25%,
03/15/2005............................... BBB 8,000,000 8,087,848
Ontario Hydro Corp., 7.45%, 03/31/2013.... AA- 7,500,000 7,681,223
--------------
15,769,071
--------------
Total Yankee Obligations - Corporate
(cost $119,890,141).................... 120,506,349
--------------
YANKEE OBLIGATIONS - GOVERNMENT - 2.4%
Argentina, Ser. B, 0.00%, 04/15/2001 #.... BBB 10,000,000 9,637,500
Manitoba, Canada, Ser. CQ, 8.00%,
04/15/2002............................... AA- 10,000,000 10,181,000
Quebec, Canada:
5.75%, 02/15/2009........................ A+ 5,250,000 4,810,040
8.80%, 04/15/2003........................ A+ 8,200,000 8,569,500
United Mexican States, 9.875%,
02/01/2010............................... BB+ 5,000,000 5,327,500
--------------
Total Yankee Obligations - Government
(cost $37,980,896)..................... 38,525,540
--------------
</TABLE>
72
<PAGE>
EVERGREEN
Select Income Plus Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS - 0.2%
FINANCIALS - 0.2%
Banks - 0.2%
First Rep. Pfd. Capital Corp., Ser. A (cost
$4,000,000)....................................... 4,000 $ 3,380,000
--------------
SHORT-TERM INVESTMENTS - 1.2%
MUTUAL FUND SHARES - 1.2%
Evergreen Select Money Market Fund (cost
$18,776,806) o ................................... 18,776,806 18,776,806
--------------
Total Investments - (cost $1,702,769,914) - 106.4%.............. 1,686,202,291
Other Assets and Liabilities - (6.4%)........................... (101,098,499)
--------------
Net Assets - 100.0%............................................. $1,585,103,792
--------------
</TABLE>
See Combined Notes to Schedules of Investments.
73
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS - 98.3%
Airlines - 3.2%
Chicago, IL O'Hare Intl. Arpt. Spl. Facs. RB,
Ser. A, 6.75%,11/01/2011.................... NR $19,360,000 $20,030,630
Airport - 10.4%
Alliance Arpt. Auth., Inc. Texas Spl. Facs.
RB, 7.50%, 12/01/2029....................... BBB- 3,000,000 3,066,150
Denver, CO City & Cnty. Arpt. RB:
Ser. A, 6.00%, 01/01/2011................... AAA 3,025,000 3,209,464
Ser. D, 7.75%, 11/15/2013................... A 6,905,000 8,171,308
Hawaii Arpt. Sys. RB:
Refunding, Ser. B, 6.50%, 07/01/2014........ AAA 14,095,000 15,330,004
Ser. 2, 7.00%, 07/01/2018................... A- 2,600,000 2,681,328
Kenton Cnty., KY Arpt. Board RRB, 6.30%,
03/01/2015.................................. AAA 6,250,000 6,593,438
Mobile, AL Arpt. Auth. RRB, Ser. A, 6.375%,
10/01/2014.................................. AAA 18,200,000 19,303,830
Port Auth. of NY & NJ RB, Ser. 4, 6.75%,
10/01/2011.................................. NR 6,000,000 6,167,700
Community Development District - 2.1%
New Jersey EDA RB:
5.60%, 10/01/2012........................... NR 2,620,000 2,358,052
Continental Airlines, Inc. Proj., 6.625%,
09/15/2012.................................. BB 9,525,000 9,662,160
Keswick Pines Proj., 5.60%, 01/01/2012...... NR 900,000 775,737
Continuing Care Retirement Community - 4.1%
Central Valley, CA Fin. Auth. RB,
Cogeneration Proj., 6.00%, 07/01/2009....... BBB 8,950,000 9,258,775
Connecticut Dev. Auth. RRB, Church Homes,
Inc. Proj.:
4.90%, 04/01/2002........................... BBB 425,000 420,580
5.00%, 04/01/2003........................... BBB 925,000 907,564
5.40%, 04/01/2007........................... BBB 1,220,000 1,163,063
5.70%, 04/01/2012........................... BBB 3,275,000 2,923,330
Franklin Cnty., OH Hlth. Care Facs. RRB,
5.15%, 11/01/2008........................... NR 100,000 94,078
New Jersey EDA RB:
Franciscan Oaks Proj., 5.70%, 10/01/2017.... NR 5,215,000 4,394,003
The Evergreens Proj., 5.875%, 10/01/2012.... NR 3,380,000 3,204,409
Palm Beach Cnty., FL, Hlth. Facs. Auth. RB:
4.50%, 10/01/2000........................... BBB 1,375,000 1,374,972
4.65%, 10/01/2001........................... BBB 1,475,000 1,468,879
Education - 5.0%
Massachusetts Edl. Fin. Auth. RRB, Ser. A,
5.50%, 12/01/2007........................... AAA 8,155,000 8,387,744
Montgomery Cnty., PA Higher Ed. Auth. RB,
Beaver College Proj., 5.80%, 04/01/2016..... AAA 4,000,000 4,067,560
New York Dorm. Auth. RB, Ser. A, 5.50%,
05/15/2013.................................. A 13,000,000 13,284,310
Northeast TX Independent Sch. Dist. GO,
7.00%, 02/01/2011........................... AAA 3,600,000 4,134,600
Rutgers Univ., NJ RRB, Ser. R, 6.40%,
05/01/2008.................................. AA 1,000,000 1,044,420
</TABLE>
74
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Electric Revenue - 2.3%
Arizona Agricultural Impt. & Pwr. Dist. RB,
Salt River Proj., Ser.C, 6.25%, 01/01/2019.. AA $ 2,000,000 $ 2,067,220
Sullivan, IN PCRRB, Ser. C, 5.95%,
05/01/2009.................................. BBB 12,485,000 12,442,801
Escrow - 2.8%
Beaver Falls, PA Muni. Auth. RB, 9.125%,
08/01/2005.................................. NR 1,290,000 1,534,300
Delaware River Port Auth. PA & NJ RB, 6.50%,
01/15/2011.................................. AAA 235,000 252,089
Heartland Consumer Pwr. Dist. RB, 7.00%,
01/01/2016.................................. AAA 5,000,000 5,705,500
Howell Township, NJ GO, Refunding, 6.40%,
01/01/2003.................................. AAA 2,000,000 2,082,820
Illinois Hlth. Facs. Auth. RB, 10.00%,
01/01/2015.................................. NR 4,685,000 6,269,420
Philadelphia, PA Hosp. & Higher Ed. Facs.
Auth. RRB, 6.75%, 08/15/2001, (Insd. by
FHA)........................................ NR 25,000 25,003
West View, PA Muni. Auth. Spl. Obl. Bonds,
9.20%, 05/15/2003........................... AAA 1,445,000 1,509,317
General Obligation - Local - 5.1%
Clark & Skamania Cnty., WA GO, Sch. Dist.
112-6, 5.75%, 12/01/2016.................... NR 2,790,000 2,847,893
Larimer Cnty., CO GO, Sch. Dist. R1,
Refunding, 8.50%, 12/15/2008................ NR 3,485,000 4,333,737
New York, NY GO, Ser. A:
5.875%, 08/01/2003.......................... A 5,535,000 5,729,334
6.25%, 08/01/2010........................... A 2,500,000 2,680,525
6.25%, 08/01/2011........................... A 3,000,000 3,205,620
Ser. C, 6.50%, 02/01/2008................... A 5,795,000 6,371,544
Ser. I, 6.50%, 03/15/2005................... A 6,000,000 6,444,900
General Obligation - State - 2.2%
Washington GO, Ser. B, 6.40%, 06/01/2017..... AA+ 12,000,000 13,321,080
Hospital - 10.4%
Alamogordo, NM Hosp. RB, 5.00%, 01/01/2008... A- 5,680,000 5,358,853
Coffee County, GA Hosp. Auth. RB, Ser. A,
6.75%, 12/01/2026........................... NR 1,500,000 1,351,935
Colorado Hlth. Facs. Auth. RB, Ser. C, 7.00%,
03/01/2019.................................. NR 660,000 656,575
Dickinson Cnty., MI Hlth. Care Sys. Hosp.
RRB, 5.50%, 11/01/2013...................... NR 5,715,000 4,934,674
Harris Cnty., TX Hlth. Facs. Dev. Corp. RB,
Ser. A:
5.25%, 07/01/2007........................... AAA 8,145,000 8,259,844
5.625%, 07/01/2011.......................... AAA 5,790,000 5,940,251
Harris Cnty., TX Hosp. Dist. RRB, 5.75%,
02/15/2012.................................. AAA 4,500,000 4,667,895
Indiana Hlth. Facs. Auth. Hosp. RB, 7.35%,
03/01/2012.................................. NR 2,000,000 2,071,820
North Carolina Med. Care Commission Hosp. RB:
4.60%, 10/01/2000........................... NR 135,000 134,997
4.70%, 10/01/2001........................... NR 140,000 139,412
4.80%, 10/01/2002........................... NR 155,000 153,596
North Central TX, Hlth. Facs. Dev. Corp. RB,
Ser. B, 5.75%, 02/15/2009................... AAA 3,910,000 4,086,693
Shawnee, OK Hosp. Auth. RRB, 6.125%,
10/01/2014.................................. BBB 8,500,000 7,821,445
</TABLE>
75
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Hospital - continued
Wichita, KS Hosp. RRB, Ser. 11, 6.75%,
11/15/2014............................... A+ $ 5,840,000 $ 6,275,956
Wisconsin Hlth. & Edl. Facs. Auth. RB:
5.95%, 12/01/2015........................ A 6,865,000 6,970,995
6.50%, 08/15/2011........................ NR 5,300,000 5,408,332
Housing - 15.1%
California HFA RB:
Ser. A, 7.55%, 08/01/2003................ A+ 2,335,000 2,468,492
Ser. L, 0.00%, 08/01/2027 m.............. AAA 9,835,000 2,248,871
Chesapeake, VA Redev. & Hsg. Auth. MHRB,
Ser. A, 6.20%, 04/01/2028................ NR 1,580,000 1,421,336
Colorado HFA SFHRB:
Sr. Ser. C-2, 6.875%, 11/01/2028......... NR 2,250,000 2,371,005
4.70%, 10/01/2022........................ NR 940,000 937,951
6.75%, 05/01/2017........................ NR 1,000,000 1,049,940
Delta County, CA Home Mtge. Fin. Auth.
SFHRB, Ser. A, 6.70%, 06/01/2024......... AAA 835,000 887,881
Jefferson Parish, LA Home Mtge. Auth.
SFHRRB, Ser. B-1, 6.75%, 06/01/2030...... NR 1,995,000 2,120,625
Massachusetts HFA RB:
Ser. A, 6.15%, 10/01/2015, (Insd. by
AMBAC).................................. AAA 13,000,000 13,255,320
Ser. C, 6.35%, 05/15/2003................ AAA 2,000,000 2,067,560
Minnesota HFA SFHRB, Ser. C:
6.80%, 07/01/2011........................ AA 480,000 489,043
7.10%, 07/01/2011........................ AA+ 290,000 296,537
Ser. E, 6.85%, 01/01/2024................ AA+ 10,285,000 10,553,027
Mississippi Home Corp. SFHRB, Ser. H,
Class 6, 6.70%, 12/01/2029............... NR 7,230,000 7,472,422
Missouri Hsg. Dev. Commission SFHRB:
Ser. A-1, 7.50%, 03/01/2031.............. AAA 2,500,000 2,762,975
Ser. B-2, 6.40%, 09/01/2029.............. AAA 2,285,000 2,401,923
Ser. C-1, 6.95%, 09/01/2030.............. AAA 8,490,000 9,230,413
Ser. E-1, 6.45%, 09/01/2029.............. AAA 4,985,000 5,229,365
Nevada Hsg. Division SFHRB, Ser. A-1,
7.55%, 10/01/2010........................ AA 255,000 258,162
New Hampshire HFA SFHRB, Ser. D, 6.15%,
07/01/2029............................... NR 2,250,000 2,332,417
New Jersey Hsg. & Mtge. Fin. Agcy. RRB,
Ser. 1, 6.45%, 11/01/2007................ A+ 1,650,000 1,711,479
New Mexico Mtge. Fin. Auth. SFHRB, A-2,
7.10%, 09/01/2030........................ AAA 1,600,000 1,754,768
New York HFA RRB, Ser. C, 5.875%,
09/15/2014............................... A- 6,040,000 6,139,660
Oklahoma HFA SFHRB:
Ser. A-2, 6.40%, 09/01/2030.............. NR 3,995,000 4,154,840
Ser. D-1, 7.10%, 09/01/2016.............. NR 1,825,000 1,978,136
Phoenix, AZ IDA SFHRB, Ser. A, 6.60%,
12/01/2029............................... AAA 3,350,000 3,509,125
Sedgwick & Shawnee Cnty., KS SFHRB, Ser.
A-2, 6.70%, 06/01/2029................... NR 1,810,000 2,017,010
</TABLE>
76
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Housing - continued
Texas Dept. of Hsg. & Community Affairs MHRB,
Ser. A, 5.55%, 01/01/2005................... A $ 2,065,000 $ 2,084,246
Utah HFA SFHRB, Ser. G-1, 7.35%, 07/01/2018.. AAA 475,000 491,121
Industrial Development Revenue - 4.9%
Boston, MA IDA RB, Pilot Seafood Proj.,
5.875%, 04/01/2030.......................... AA- 5,000,000 5,087,700
Escambia Cnty., FL PCRB, Champion Intl. Corp.
Proj., 6.90%, 08/01/2022.................... BBB 7,125,000 7,361,906
Mississippi Business Fin. Corp. RB, 5.80%,
03/01/2022.................................. BB 10,750,000 8,967,220
Northampton Cnty., PA IDA RRB, Strawbridge
Proj., 7.20%, 12/15/2001.................... BBB- 315,000 320,878
Oakes, ND IDRB, Omniquip Intl., Inc. Proj.,
5.80%, 02/01/2014........................... NR 4,335,000 4,015,597
Rockport, IN PCRRB, Ser. B, 7.60%,
03/01/2016.................................. BBB 4,500,000 4,620,195
Lease - 3.9%
Denver, CO City & Cnty. Sch. Dist. RB, Ser.
B, 6.50%, 12/01/2002........................ A 1,000,000 1,031,540
Michigan COP:
5.75%, 06/01/2013........................... AAA 3,360,000 3,491,040
5.75%, 06/01/2015........................... AAA 2,320,000 2,383,870
Texas Natl. Research Lab Commission RB,
6.95%, 12/01/2012........................... AAA 15,000,000 17,252,100
Pre-Refunded - 3.8%
Arapahoe Cnty., CO Capital Impt. Hwy. RB,
6.90%, 08/31/2015........................... NR 4,000,000 4,493,640
Cherry Hill Township, NJ GO,
5.80%, 06/01/2004........................... NR 1,000,000 1,039,606
New Jersey Turnpike Auth. RB, Ser. C, 6.30%,
01/01/2004.................................. A- 500,000 509,720
New York City Muni. Wtr. Fin. Auth. RB, Ser.
B, 6.25%, 06/15/2020........................ AAA 8,000,000 8,713,200
Newport News, VA GO, Ser. A, 6.50%,
11/01/2006.................................. NR 1,100,000 1,118,425
NY Metro. Trans. Auth. RB, Ser. A, 6.10%,
07/01/2026.................................. AAA 7,000,000 7,617,960
Public Facilities - 2.7%
Dauphin Cnty., PA General Auth. RB, Ser. A:
5.50%, 01/15/2008........................... NR 7,865,000 7,711,790
5.75%, 01/15/2010........................... NR 3,950,000 3,896,596
Hartford, CT Parking Systems RB, Ser. A,
6.50%, 07/01/2025........................... BBB 2,000,000 2,008,340
Missouri Board of Pub. Bldgs. RRB, 6.00%,
12/01/2002.................................. AA 3,000,000 3,050,940
Resource Recovery - 1.2%
Delaware Solid Wst. Auth. RRB, Ser. A, 6.75%,
07/01/2003.................................. A 3,000,000 3,063,570
Pennsylvania Econ. Dev. Financing Auth. RB,
Colver Proj., Ser. D:
7.125%, 12/01/2015.......................... BBB- 2,000,000 2,049,120
7.15%, 12/01/2018........................... BBB- 2,500,000 2,553,250
</TABLE>
77
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Sales Tax - 2.0%
East Baton Rouge, LA Sales Tax RB:
8.00%, 02/01/2002.......................... AAA $ 1,760,000 $ 1,837,299
8.00%, 02/01/2003.......................... AAA 1,920,000 2,061,696
Pennsylvania Convention Ctr. RRB, Ser. A,
6.75%, 09/01/2019, (Insd. by MBIA)......... AAA 8,000,000 8,612,560
Solid Waste - 2.9%
Huntsville, AL Solid Wst. Disposal Auth.
RRB:
5.75%, 10/01/2009.......................... AAA 7,865,000 8,224,666
5.75%, 10/01/2012.......................... AAA 9,210,000 9,485,379
Special Tax - 1.2%
Allegheny Cnty., PA Redev. Auth. RB,
Waterfront Proj.:
Ser. A, 5.875%, 12/15/2010................. NR 2,530,000 2,619,132
Ser. B, 5.75%, 12/15/2005.................. NR 2,165,000 2,214,600
Frederick Cnty., MD Spl. Tax RB, 6.25%,
07/01/2010................................. NR 2,670,000 2,557,006
Student Loan - 5.1%
Alaska Student Loan Corp. RB, Ser. A:
5.80%, 07/01/2012.......................... AAA 2,935,000 3,016,563
5.85%, 07/01/2013.......................... AAA 3,285,000 3,373,071
5.90%, 07/01/2014.......................... AAA 3,600,000 3,693,024
Arkansas Student Loan Auth. RB:
5.35%, 06/01/2009.......................... NR 6,465,000 6,475,797
7.25%, 06/01/2009.......................... NR 4,110,000 4,595,843
California Student Loan RRB, Sub. Ser. D,
6.50%, 06/01/2005.......................... NR 10,000,000 10,377,000
Tobacco - 1.8%
Tsasc, Inc., NY RB, Ser. 1:
5.50%, 07/15/2013.......................... A 3,200,000 3,182,304
5.60%, 07/15/2014.......................... A 2,080,000 2,097,722
5.70%, 07/15/2014.......................... A 2,900,000 2,921,373
5.75%, 07/15/2015.......................... A 2,615,000 2,636,181
Transportation - 1.1%
Massachusetts Port Auth. RB, Ser. 1999A,
5.75%, 10/01/2029.......................... BB+ 1,000,000 992,620
New Jersey Hwy. Auth. RB, Garden State
Pkwy., 6.25%, 01/01/2014................... AA- 1,000,000 1,037,179
Volusia Cnty., FL Arpt. Systems RRB:
6.80%, 10/01/2006.......................... AAA 965,000 1,059,811
7.00%, 10/01/2008.......................... AAA 1,100,000 1,243,682
7.00%, 10/01/2009.......................... AAA 1,175,000 1,339,159
7.00%, 10/01/2010.......................... AAA 1,260,000 1,445,800
Utility - 2.0%
Grand Prairie, TX Metro. Util. GO,
Refunding, 6.50%, 04/01/2012............... A 3,740,000 3,933,882
Maricopa Cnty., AZ PCRB, 5.75%, 08/01/2015.. NR 8,500,000 8,500,425
</TABLE>
78
<PAGE>
EVERGREEN
Select Intermediate Term Municipal Bond Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Water & Sewer - 3.0%
Ashland, KY PCRB, 6.65%, 08/01/2009.......... NR $ 5,000,000 $ 5,169,900
Blytheville, AR Solid Wst. RB, 6.90%,
12/01/2021.................................. AA- 1,500,000 1,550,025
Dickinson Cnty., MI Econ. Dev. Corp. RRB,
6.55%, 03/01/2007........................... BBB 7,000,000 7,143,710
New Jersey Wst. Wtr. Treatment Trust RB,
6.80%, 06/15/2002........................... AA 160,000 161,078
New York Env. Facs. Corp. PCRB, Ser. A,
7.05%, 06/15/2004........................... AA+ 1,000,000 1,037,826
Texas Gulf Coast Wst. Disposal Auth. RB,
Champion Intl. Corp., 7.45%, 05/01/2026..... BBB+ 3,400,000 3,521,210
------------
Total Municipal Obligations (cost
$604,388,455)............................. 608,705,840
------------
Shares Value
SHORT-TERM INVESTMENTS - 0.5%
MUTUAL FUND SHARES - 0.5%
Federated Muni. Obligations Fund............. 2,778,000 2,778,000
Federated Tax Free Obligations Fund.......... 4,000 4,000
------------
Total Short-Term Investments (cost $2,782,000)................. 2,782,000
------------
Total Investments - (cost $607,170,455) - 98.8%.................... 611,487,840
Other Assets and Liabilities - 1.2%................................ 7,551,346
------------
Net Assets - 100.0%................................................ $619,039,186
------------
</TABLE>
Portfolio Composition by State
(based on 9/30/2000 portfolio assets)
<TABLE>
<S> <C>
New York................ 13%
Texas................... 9%
Pennsylvania............ 6%
Alabama................. 6%
Massachusetts........... 5%
New Jersey.............. 5%
Illinois................ 4%
Colorado................ 4%
California.............. 4%
Missouri................ 4%
Indiana................. 3%
Hawaii.................. 3%
Michigan................ 3%
Mississippi............. 3%
</TABLE>
<TABLE>
<S> <C>
Washington.............. 3%
Florida................. 3%
Arizona................. 2%
Oklahoma................ 2%
Arkansas................ 2%
Wisconsin............... 2%
Kentucky................ 2%
Minnesota............... 2%
Alaska.................. 2%
Kansas.................. 1%
Connecticut............. 1%
New Mexico.............. 1%
Other................... 5%
</TABLE>
See Combined Notes to Schedules of Investments.
79
<PAGE>
EVERGREEN
Select International Bond Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
FOREIGN BONDS-CORPORATE (PRINCIPAL AMOUNT
DENOMINATED IN CURRENCY INDICATED) - 40.9%
CONSUMER STAPLES - 0.7%
Tobacco - 0.7%
Gallaher Group Plc, 5.875%, 08/06/2008, EUR... NA 600,767 $ 495,382
-----------
FINANCIALS - 28.9%
Banks - 14.6%
Bayer Hypo Vereinsbank, 4.75%, 09/19/2007,
EUR.......................................... NA 2,550,000 2,127,362
Credit Local de France, 5.375%, 01/13/2004,
FRF.......................................... AA+ 7,600,000 1,017,865
Intl. Bank for Recon. & Dev.:
5.375%, 11/06/2003, NZD...................... NA 760,000 295,488
7.25%, 05/27/2003, NZD....................... AAA 2,845,000 1,151,626
Kreditanstalt Fur Wiederaufbau:
5.25%, 01/04/2010, EUR....................... NA 1,830,000 1,561,628
5.50%, 03/12/2007, EUR....................... AAA 1,003,875 883,964
Lloyds Bank Plc, 4.75%, 03/18/2011, EUR....... Aa1 2,470,000 1,936,439
Oesterreich Kontrollbank, 5.75%, 09/12/2007,
DEM.......................................... AAA 3,475,000 1,573,754
-----------
10,548,126
-----------
Diversified Financials - 14.3%
Amp UK Plc, 4.875%, 11/27/2008, DEM........... A 2,775,000 1,156,348
Depfa Fin. NV, 6.375%, 11/18/2008, FRF........ Aa3 9,800,000 1,362,376
Eksportfinans AS, 6.875%, 02/09/2004, SEK..... AAA 2,500,000 269,592
FHLB, 6.875%, 06/07/2002, GBP................. Aaa 425,000 634,327
Helaba Fin. BV, 3.875%, 03/03/2004, SEK....... Aaa 7,000,000 687,659
Household Fin. Corp., 5.125%, 06/24/2009,
EUR.......................................... A2 3,212,000 2,555,998
HSBC Holdings Plc, 5.50%, 07/15/2009, EUR..... NA 500,000 414,236
Siemens Financier, 5.50%, 03/12/2007, EUR..... AA 3,650,000 3,181,833
-----------
10,262,369
-----------
INDUSTRIALS - 2.9%
Commercial Services & Supplies - 2.4%
Agbar Intl. BV, 6.00%, 11/12/2009, EUR........ Aa3 2,000,000 1,761,313
-----------
Construction & Engineering - 0.5%
Vodohospodarska Vystavba, 8.00%, 07/09/2001,
DEM.......................................... Ba1 730,000 334,142
-----------
TELECOMMUNICATION SERVICES - 5.7%
Diversified Telecommunication Services - 5.7%
Nippon Telegraph & Telephone Co., 3.75%,
05/15/2006, EUR.............................. Aa1 3,030,000 2,406,773
Telefonica de Espana SA, 5.625%, 04/06/2007,
EUR.......................................... NA 2,000,000 1,701,925
-----------
4,108,698
-----------
UTILITIES - 2.7%
Electric Utilities - 2.7%
Electridade De Portugal, 6.00%, 10/29/2009,
EUR.......................................... NA 2,260,000 1,995,277
-----------
Total Foreign Bonds-Corporate (cost
$33,915,001)............................... 29,505,307
-----------
</TABLE>
80
<PAGE>
EVERGREEN
Select International Bond Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
FOREIGN BONDS-GOVERNMENT (PRINCIPAL AMOUNT
DENOMINATED IN CURRENCY INDICATED) - 46.1%
Belgium, 3.75%, 03/28/2009, EUR.............. AA+ 4,530,000 $ 3,525,779
Denmark:
5.00%, 08/15/2005, DKK...................... AAA 5,800,000 669,734
7.00%, 11/15/2007, DKK...................... AAA 15,600,000 1,985,125
France:
4.00%, 10/25/2009, FRF...................... Aaa 600,000 479,596
5.50%, 04/25/2029, FRF...................... AAA 3,415,000 2,945,127
Germany:
4.50%, 07/04/2009, DEM...................... AAA 2,150,000 1,803,864
4.75%, 07/04/2028, DEM...................... AAA 455,000 354,479
6.00%, 07/04/2007, DEM...................... AAA 1,140,000 1,050,975
Italy:
5.25%, 11/01/2029, EUR...................... AA 500,000 399,058
5.75%, 07/10/2007, EUR...................... AA 1,930,000 1,719,026
Netherlands:
3.75%, 07/15/2009, EUR...................... Aaa 2,820,000 2,224,971
5.50%, 01/15/2028, EUR...................... AAA 6,368,000 5,529,588
6.50%, 04/15/2003, EUR...................... AAA 1,166,214 1,062,076
Spain:
4.50%, 07/30/2004, EUR...................... AA+ 880,000 758,238
5.15%, 07/30/2009, EUR...................... Aa2 3,380,000 2,911,603
6.00%, 01/31/2029, EUR...................... AA+ 3,768,000 3,390,741
Sweden, 5.00%, 01/28/2009, SEK............... AA+ 2,085,000 1,776,470
Turkey, 9.625%, 02/23/2005, EUR.............. B+ 355,000 321,575
United Mexican States, 8.75%, 05/30/2002,
GBP......................................... Baa3 195,000 292,279
-----------
Total Foreign Bonds-Government (cost
$36,398,268).............................. 33,200,304
-----------
YANKEE OBLIGATIONS-CORPORATE - 4.3%
CONSUMER STAPLES - 0.7%
Tobacco - 0.7%
Rothmans Nederland Holdings BV, 6.50%,
05/06/2003.................................. A $ 500,000 485,025
-----------
FINANCIALS - 1.6%
Banks - 0.3%
Export-Import Bank Korea, 7.125%,
09/20/2001.................................. Baa2 200,000 198,091
-----------
Diversified Financials - 1.3%
Hutchison Whampoa Fin., Ltd., 6.95%,
08/01/2007.................................. A 500,000 480,099
ICI Fin. Netherlands, 6.75%, 08/07/2002...... A- 500,000 495,768
-----------
975,867
-----------
TELECOMMUNICATION SERVICES - 2.0%
Diversified Telecommunication Services - 1.3%
British Telecom Plc, 7.00%, 05/23/2007....... NA 500,000 488,431
TPSA Fin. BV, 7.125%, 12/10/2003............. BBB 450,000 440,209
-----------
928,640
-----------
</TABLE>
81
<PAGE>
EVERGREEN
Select International Bond Fund
Schedule of Investments(continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
YANKEE OBLIGATIONS-CORPORATE - continued
Wireless Telecommunications Services - 0.7%
SK Telecom, Ltd., 7.75%, 04/29/2004........... BBB $ 500,000 $ 496,139
-----------
Total Yankee Obligations-Corporate (cost
$3,124,108)................................ 3,083,762
-----------
YANKEE OBLIGATIONS-GOVERNMENT - 2.5%
Argentina, 0.00%, 10/11/2001 m................ NA 995,000 915,400
Kazakhstan, 8.375%, 10/02/2002................ B+ 300,000 295,898
Lithuania, 7.125%, 07/22/2002................. BBB 625,000 617,875
-----------
Total Yankee Obligations - Government (cost
$1,810,963)................................ 1,829,173
-----------
Total Investments - (cost $75,248,340) - 93.8%...................... 67,618,546
Other Assets and Liabilities - 6.2%................................. 4,450,135
-----------
Net Assets - 100.0%................................................. $72,068,681
-----------
</TABLE>
See Combined Notes to Schedule of Investments.
82
<PAGE>
EVERGREEN
Select Limited Duration Fund
Schedule of Investments
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
ASSET-BACKED SECURITIES - 12.5%
Advanta Mtge. Loan Trust, Ser. 1993-3, Class
A1, 4.90%, 01/25/2010....................... AAA $ 244,666 $ 241,940
Associates Auto Receivables Trust, Ser. 2000-
2, Class A4, 6.90%, 08/15/2005.............. AAA 4,000,000 4,016,458
BankBoston Receivable Asset-Backed Trust,
Ser. 1997-1, Class A7, 6.48%, 07/15/2008.... AAA 2,150,000 2,143,969
Case Equip. Loan Trust:
Ser. 1997-B, Class A4, 6.41%, 09/15/2004.... AAA 550,573 549,590
Ser. 1998-A, Class A4, 5.83%, 02/15/2005.... AAA 753,329 746,975
Ser. 1998-B, Class A3, 5.81%, 05/15/2003.... AAA 740,846 740,012
Chase Credit Card Owner Trust, Ser. 1999-3,
Class A, 6.66%, 01/15/2007.................. AAA 5,000,000 4,990,625
CIT Receivables Trust, Ser. 1995-B, Class A,
6.50%, 04/15/2011........................... AAA 75,923 75,845
Copelco Capital Funding Corp., Ser. 1997-4,
Class A4, 6.47%, 04/20/2005................. AAA 2,671,109 2,670,521
Daimler-Benz Vehicle Trust, Ser. 1998-A,
Class A4, 5.22%, 12/22/2003................. AAA 2,000,000 1,959,010
EQCC Home Equity Loan Trust, Ser. 1997-1,
Class A3, 6.84%, 09/15/2011................. AAA 48,689 48,718
Fifth Third Bank Auto Grantor Trust, Ser.
1996, Class A, 6.20%, 09/15/2001............ AAA 17,072 17,074
GE Capital Mtge. Svcs. Inc., Ser. 1998-1,
Class A4, 6.44%, 10/25/2016................. Aaa 3,600,000 3,571,110
Heller Equipment Asset Receivables Trust,
Ser. 1997-1, Class A2, 6.39%, 05/25/2005.... NR 612,057 610,732
MBNA Master Credit Card Trust:
Ser. 1995-C, Class A, 6.45%, 02/15/2008..... AAA 7,170,000 7,084,283
Ser. 1996-J, Class A, 6.771%, 09/15/2006.... AAA 760,000 761,858
Navistar Finl. Corp. Owner Trust, Ser. 1996-
B, Class A3, 6.33%, 04/21/2003.............. AAA 31,963 31,975
Premier Auto Trust:
Ser. 1997-3, Class A5, 6.34%, 01/06/2002.... AAA 655,126 654,579
Ser. 1998-2, Class A4, 5.82%, 12/06/2002.... AAA 2,280,000 2,265,830
Ser. 1998-3, Class A3, 5.88%, 12/08/2001.... AAA 474,492 473,991
Prudential Finl. Asset Funding Corp., Ser.
1993-8, Class A, 5.775%, 11/15/2014......... AAA 110,312 108,095
SLMA, Ser. 1997-1, Class A1, 6.643%,
10/25/2005.................................. AAA 277,623 276,628
Union Acceptance Corp., Ser. 1996-D, Class
A2, 6.17%, 10/09/2002....................... AAA 982,230 980,163
Vanderbilt Mtge. Fin., Inc., Ser. 1997-B,
Class 1A2, 6.775%, 01/07/2008............... NR 434,249 433,999
WFS Fin. Owner Trust, Ser. 1998-A, Class A4,
5.95%, 02/20/2003........................... AAA 1,000,000 995,325
------------
Total Asset-Backed Securities (cost
$36,500,570).............................. 36,449,305
------------
</TABLE>
83
<PAGE>
EVERGREEN
Select Limited Duration Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS - 9.6%
Commerce 2000, Ser. 2000-FL1A, Class H,
7.903%, 12/16/2011 [_]...................... NA $ 1,215,000 $ 1,195,208
Credit Suisse First Boston Mtge. Corp., Ser.
1998-FL2A, Class D, 8.019%, 10/15/2001...... Baa2 7,500,000 7,517,926
Deutsche Mtge. & Asset Receiving Corp., Ser.
1998-C1, Class A1, 6.22%, 09/15/2007........ Aaa 2,109,370 2,060,152
FHLMC:
Ser. 1641, Class WD, 6.50%, 05/15/2013...... AAA 1,620,325 1,533,741
Ser. 1916, Class PB, 6.50%, 08/15/2011...... AAA 4,757,987 4,675,193
Ser. 2052, Class PT, 6.00%, 12/15/2009...... AAA 1,544,143 1,519,846
GMAC Comml. Mtge. Securities., Inc., Ser.
1999-FL1, Class E, 8.321%, 10/15/2009....... Baa3 5,000,000 4,981,250
SASCO Comml. Mtge. Trust, Ser. 1999-C3, Class
H, 8.074%, 03/20/2002 144A.................. Baa1 4,590,920 4,608,380
------------
Total Collateralized Mortgage Obligations
(cost $27,910,870)........................ 28,091,696
------------
CORPORATE BONDS - 47.6%
CONSUMER DISCRETIONARY - 2.4%
Multi-line Retail - 2.4%
Federated Dept. Stores, Inc., 10.00%,
02/15/2001.................................. BBB+ 7,000,000 7,043,827
------------
CONSUMER STAPLES - 0.6%
Beverages - 0.4%
Coca Cola Enterprises, Inc., 6.375%,
08/01/2001.................................. A 1,000,000 994,422
------------
Food Products - 0.2%
Nabisco, Inc., 6.00%, 02/15/2001............. BBB 625,000 620,288
------------
FINANCIALS - 30.8%
Banks - 6.1%
Banc One Corp., MTN, 7.00%, 03/25/2002....... A 1,000,000 1,000,147
Bank of America Corp., 5.75%, 03/15/2001..... A+ 4,510,000 4,489,637
Intl. Bank For Reconstruction & Dev. Co.,
6.75%, 03/06/2002........................... Aaa 7,500,000 7,529,497
Mellon Financial Co.:
5.75%, 11/15/2003........................... A+ 3,000,000 2,899,356
6.00%, 03/01/2004........................... A+ 1,797,000 1,742,535
------------
17,661,172
------------
Diversified Financials - 21.1%
Bear Stearns Co., Inc., 6.25%, 12/01/2000.... A 4,530,000 4,524,904
Caterpillar Finl. Svcs. Corp., MTN, 6.75%,
06/15/2001.................................. A+ 1,000,000 1,000,420
Conseco, Inc., 7.875%, 12/15/2000............ BB- 5,000,000 4,925,000
Goldman Sachs Group, Inc., 6.901%,
01/14/2002.................................. A+ 5,000,000 5,006,180
Ikon Capital, Inc., MTN, 6.73%, 06/15/2001... BBB+ 1,000,000 997,448
</TABLE>
84
<PAGE>
EVERGREEN
Select Limited Duration Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
FINANCIALS - continued
Diversified Financials - continued
Lehman Brothers Holdings, Inc.:
6.125%, 02/01/2001......................... A $ 2,000,000 $ 1,994,038
MTN, 6.625%, 12/27/2002.................... A 5,000,000 4,965,900
Merrill Lynch & Co., Inc.:
5.73%, 02/26/2002.......................... AA- 10,000,000 9,857,440
6.00%, 01/15/2001.......................... AA- 6,000,000 5,981,886
Morgan Stanley Dean Witter, 5.25%,
02/08/2001................................. AA- 4,700,000 4,676,904
Paine Webber Group, Inc., 6.375%,
05/15/2004................................. BBB+ 5,000,000 4,889,015
Salomon, Inc., 7.30%, 05/15/2002............ A 5,000,000 5,027,235
U.S. West Capital Funding, Inc., 6.125%,
07/15/2002................................. BBB+ 2,800,000 2,757,009
USAA Capital Corp., 7.41%, 06/30/2003....... AAA 5,000,000 5,064,835
------------
61,668,214
------------
Insurance - 2.8%
AMERICO, 7.20%, 04/01/2002.................. BBB 3,000,000 2,880,165
St. Paul Cos., Inc., 7.875%, 04/15/2005..... A+ 5,000,000 5,141,985
------------
8,022,150
------------
Real Estate - 0.8%
EOP Operating, LP, 6.50%, 01/15/2004........ BBB+ 2,500,000 2,431,260
------------
HEALTH CARE - 1.6%
Health Care Equipment & Supplies - 1.6%
Boston Scientific Corp., 6.625%,
03/15/2005................................. BBB 5,000,000 4,698,585
------------
INDUSTRIALS - 5.4%
Aerospace & Defense - 1.8%
Raytheon Co., 5.95%, 03/15/2001............. BBB- 5,350,000 5,311,475
------------
Commercial Services & Supplies - 1.6%
Service Corp. Intl., 6.75%, 06/01/2001...... BB- 5,000,000 4,725,000
------------
Machinery - 1.1%
Case Corp., Ser. B, 6.25%, 12/01/2003....... BBB- 2,400,000 2,284,848
Navistar Intl. Corp., Ser. B, 7.00%,
02/01/2003................................. BBB- 1,000,000 960,000
------------
3,244,848
------------
Road & Rail - 0.9%
Burlington Northern Santa Fe Corp., 7.00%,
08/01/2002................................. BBB+ 2,500,000 2,519,310
------------
INFORMATION TECHNOLOGY - 1.1%
Electronic Equipment & Instruments - 0.4%
Honeywell, Inc., 6.75%, 03/15/2002.......... A 1,000,000 997,472
------------
Software - 0.7%
Oracle Corp., 6.72%, 02/15/2004............. A- 2,145,000 2,128,827
------------
</TABLE>
85
<PAGE>
EVERGREEN
Select Limited Duration Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
MATERIALS - 0.3%
Paper & Forest Products - 0.3%
Intl. Paper Co., 7.00%, 06/01/2001.......... BBB+ $ 1,000,000 $ 997,081
------------
TELECOMMUNICATION SERVICES - 1.8%
Diversified Telecommunication Services - 1.8%
Sprint Capital Corp., 5.70%, 11/15/2003..... BBB+ 5,500,000 5,298,771
------------
UTILITIES - 3.6%
Electric Utilities - 3.4%
Commonwealth Edison Co., Ser. 85, 7.375%,
09/15/2002................................. BBB+ 5,000,000 5,027,515
Niagara Mohawk Power Corp., 5.875%,
09/01/2002................................. BBB+ 5,000,000 4,896,475
------------
9,923,990
------------
Gas Utilities - 0.2%
Coastal Corp., 8.125%, 09/15/2002........... BBB 590,000 605,511
------------
Total Corporate Bonds (cost
$139,140,726)............................ 138,892,203
------------
MORTGAGE-BACKED SECURITIES - 18.9%
FHLMC:
6.00%, 01/01/2001 - 09/01/2001............. AAA 542,068 535,109
6.50%, 07/01/2004 - 09/01/2008............. AAA 6,325,733 6,263,451
6.875%, 01/15/2005......................... AAA 5,000,000 5,064,300
7.375%, 05/15/2003......................... Aaa 10,000,000 10,210,160
9.00%, 05/01/2001.......................... AAA 560 563
FNMA:
5.50%, 01/01/2014.......................... AAA 1,708,245 1,613,010
5.75%, 04/15/2003.......................... Aaa 13,000,000 12,779,923
6.50%, 09/01/2005 - 08/01/2010............. AAA 1,216,986 1,204,477
7.00%, 07/15/2005.......................... Aaa 5,000,000 5,091,940
7.20%, 04/25/2023.......................... AAA 5,000,000 5,002,475
GNMA:
6.50%, 12/15/2008 - 10/15/2010............. AAA 746,889 744,627
7.50%, 07/20/2002 - 05/20/2023............. AAA 4,768,198 4,791,058
8.00%, 08/15/2007.......................... AAA 3,140 3,184
8.25%, 07/15/2002.......................... AAA 8,471 8,499
8.50%, 06/20/2005 - 09/20/2005............. AAA 207,350 211,422
8.75%, 08/15/2001 - 09/15/2001............. AAA 3,931 3,943
9.00%, 10/20/2002 - 08/15/2022............. AAA 894,257 933,526
9.50%, 07/15/2002.......................... AAA 24,128 24,529
9.75%, 05/15/2001 - 05/20/2005............. AAA 5,666 5,878
10.00%, 01/20/2003 - 03/20/2004............ AAA 16,492 17,122
10.25%, 02/15/2001......................... AAA 429 433
14.00%, 02/15/2012 - 06/15/2012............ AAA 569,470 651,582
------------
Total Mortgage-Backed Securities (cost
$54,842,354)............................. 55,161,211
------------
</TABLE>
86
<PAGE>
EVERGREEN
Select Limited Duration Fund
Schedule of Investments (continued)
September 30, 2000
<TABLE>
<CAPTION>
Credit Principal
Rating/\ Amount Value
<S> <C> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 6.9%
FFCB, 8.60%, 05/30/2006..................... AAA $ 90,000 $ 91,214
FHLB:
4.32%, 08/27/2003.......................... Aaa 200,000 183,312
5.25%, 04/25/2002.......................... Aaa 10,000,000 9,822,970
5.875%, 08/15/2001......................... AAA 5,000,000 4,973,780
6.75%, 02/15/2002.......................... Aaa 5,000,000 5,018,685
------------
Total U.S. Government & Agency Obligations
(cost $20,144,426)....................... 20,089,961
------------
YANKEE OBLIGATIONS-CORPORATE - 2.7%
FINANCIALS - 1.7%
Banks - 1.7%
Barclays Bank Plc, 5.95%, 07/15/2001........ A 5,000,000 4,966,260
------------
MATERIALS - 1.0%
Construction Materials - 0.7%
Hanson Overseas BV, 7.375%, 01/15/2003...... BBB+ 2,000,000 2,008,208
------------
Metals & Mining - 0.3%
WMC Fin. USA Ltd., 6.50%, 11/15/2003........ A 1,000,000 976,050
------------
Total Yankee Obligations-Corporate (cost
$8,016,330).............................. 7,950,518
------------
SHORT-TERM INVESTMENTS - 4.8%
REPURCHASE AGREEMENTS - 1.4%
Societe Generale, dated 9/29/2000, 6.52%,
maturing 10/2/2000, maturity value
$4,114,122
(cost $4,111,888) (2)...................... AA- 4,111,888 4,111,888
------------
<CAPTION>
Shares Value
<S> <C> <C>
MUTUAL FUND SHARES - 3.4%
Evergreen Select Money Market Fund o/............... 8,327,084 8,327,084
Navigator Prime Portfolio pp........................ 1,673,100 1,673,100
------------
Total Short-Term Investments (cost $14,112,072)............... 14,112,072
------------
Total Investments - (cost $300,667,348) - 103.0%.................. 300,746,966
Other Assets and Liabilities - (3.0%)............................. (8,771,561)
------------
Net Assets - 100.0%............................................... $291,975,405
------------
</TABLE>
87
<PAGE>
Combined Notes to Schedules of Investments
September 30, 2000
144A Security that may be sold to qualified institutional buyers under Rule
144A of the Securities Act of 1933, as amended. This security has been
determined to be liquid under guidelines established by the Board of
Trustees.
* Non-income producing security.
. Security which has defaulted on payment of interest and/or principal.
+ Security initially issued in zero coupon form which converts to coupon
form at a specified rate and date. An effective interest rate is
applied to recognize interest income daily for the bond. This rate is
based on total expected interest to be earned over the life of the
bond which consists of the aggregate coupon-interest payments and
discount at acquisition. The rate shown is the stated rate at the
current period end.
# Security issued in zero coupon form with no periodic interest payments
but is acquired at a discount that results in a current yield to
maturity. An effective interest rate is applied to recognize interest
income daily for the bond. This rate is based on total expected income
to be earned over the life of the bond from amortization of discount
at acquisition.
pp Represents investment of cash collateral received for securities on
loan.
[_] No market value quotation available. Valued at fair value as
determined in good faith under procedures established by the Board of
Trustees.
(+/-) All or a portion of the principal amount of this security was pledged
as collateral for open mortgage dollar roll agreements.
(+/-)(+/-)Security acquired under mortgage dollar roll agreement.
/\ Credit ratings are unaudited and rated by Moody's Investors Service
where Standard and Poor's ratings are not available.
o The advisor of the Fund and the advisor of the money market fund are
each a subsidiary of First Union.
(1) The repurchase agreement is fully collateralized by $31,415,000 FNMA,
6.00%, 7/16/2001; $34,840,000 FFCB, 6.00%, 10/1/2001; and $35,690,000
FHLB, 5.875%, 8/15/2001--value including accrued interest is
$103,059,756.
(2) The repurchase agreement is fully collateralized by $4,434,000 U.S.
Treasury Bills, 0.00%, 8/30/2001--value including accrued interest is
$4,113,852.
Summary of Abbreviations:
AMBAC American Municipal Bond Assurance Corp.
COP Certificates of Participation
DEM German Deutsche Mark
DKK Danish Krone
EDA Economic Development Authority
EUR Euro Dollar
FFCB Federal Farm Credit Bank
FHA Federal Housing Authority
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corp.
FNMA Federal National Mortgage Association
FRF French Franc
GBP Pound Sterling
GNMA Government National Mortgage Association
GO General Obligation
HFA Housing Finance Authority
IDA Industrial Development Authority
IDRB Industrial Development Revenue Bond
MBIA Municipal Bond Investors Assurance Corp.
MHRB Multifamily Housing Revenue Bond
MTN Medium Term Note
NZD New Zealand Dollar
PCRB Pollution Control Revenue Bond
PCRRB Pollution Control Refunding 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
TBA To Be Announced
See Combined Notes to Financial Statements.
88
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Assets and Liabilities
September 30, 2000
<TABLE>
<CAPTION>
Fixed
Adjustable Fixed Income Income Fund High Yield
Rate Fund Core Bond Fund Fund II Bond Fund
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Identified cost of
securities............ $86,861,324 $1,365,815,933 $732,256,363 $60,163,050 $74,661,967
Net unrealized gains or
losses on securities.. (391,490) 6,241,768 (765,848) 59,685 (1,174,102)
----------------------------------------------------------------------------------------------
Market value of
securities............ 86,469,834 1,372,057,701 731,490,515 60,222,735 73,487,865
Cash................... 0 173 0 0 0
Receivable for
securities sold....... 628,534 27,548,717 11,771,094 0 554,069
Receivable for Fund
shares sold........... 788,551 2,387,047 495,509 4,000 175,000
Interest and dividends
receivable............ 779,553 14,058,416 8,087,449 554,594 2,062,986
Receivable from
investment advisor.... 6,859 40,363 8,904 0 5,633
Prepaid expenses and
other assets.......... 94,673 4,164 8,408 92,482 50,304
----------------------------------------------------------------------------------------------
Total assets........... 88,768,004 1,416,096,581 751,861,879 60,873,811 76,335,857
----------------------------------------------------------------------------------------------
Liabilities
Distributions payable.. 113,505 5,423,725 2,419,316 122,851 438,215
Payable for securities
purchased............. 0 87,114,649 95,015,326 0 663,680
Payable for Fund shares
redeemed.............. 142,905 1,120,917 1,992,930 0 0
Payable for securities
on loan............... 0 17,021,420 85,195,168 0 0
Deferred mortgage
dollar roll income.... 0 0 46,073 0 0
Distribution Plan
expenses payable...... 1,574 454 266 0 0
Due to other related
parties............... 716 10,666 4,653 0 615
Foreign taxes payable.. 0 0 1,387 0 0
Accrued expenses and
other liabilities..... 20,692 62,007 46,114 20,559 28,469
----------------------------------------------------------------------------------------------
Total liabilities...... 279,392 110,753,838 184,721,233 143,410 1,130,979
----------------------------------------------------------------------------------------------
Net assets.............. $88,488,612 $1,305,342,743 $567,140,646 $60,730,401 $75,204,878
----------------------------------------------------------------------------------------------
Net assets represented
by
Paid-in capital........ $91,478,165 $1,324,419,193 $572,934,989 $64,514,798 $77,456,457
Undistributed
(overdistributed) net
investment income..... 32,989 1,026,179 (1,517,986) (493,774) 95,322
Accumulated net
realized losses on
securities and foreign
currency related
transactions.......... (2,631,052) (26,344,397) (3,510,509) (3,350,308) (1,172,799)
Net unrealized gains or
losses on securities
and foreign currency
related transactions.. (391,490) 6,241,768 (765,848) 59,685 (1,174,102)
----------------------------------------------------------------------------------------------
Total net assets........ $88,488,612 $1,305,342,743 $567,140,646 $60,730,401 $75,204,878
----------------------------------------------------------------------------------------------
Net assets consists of
Class A................ $26,552,246 $ 0 $ 0 $ 0 $ 0
Class B................ 5,066,855 0 0 0 0
Class C................ 3,698,779 0 0 0 0
Class I................ 32,786,688 1,283,129,474 554,432,093 60,729,330 75,203,854
Class IS............... 20,384,044 22,213,269 12,708,553 1,071 1,024
----------------------------------------------------------------------------------------------
Total net assets........ $88,488,612 $1,305,342,743 $567,140,646 $60,730,401 $75,204,878
----------------------------------------------------------------------------------------------
Shares outstanding
Class A................ 2,787,937 0 0 0 0
Class B................ 532,027 0 0 0 0
Class C................ 388,370 0 0 0 0
Class I................ 3,442,674 127,116,810 95,056,712 4,985,740 7,861,058
Class IS............... 2,140,426 2,200,619 2,178,853 88 107
----------------------------------------------------------------------------------------------
Net asset value per
share
Class A................ $ 9.52 -- -- -- --
----------------------------------------------------------------------------------------------
Class A--Offering price
(based on sales charge
of 3.25%)............. $ 9.84 -- -- -- --
----------------------------------------------------------------------------------------------
Class B................ $ 9.52 -- -- -- --
----------------------------------------------------------------------------------------------
Class C................ $ 9.52 -- -- -- --
----------------------------------------------------------------------------------------------
Class I................ $ 9.52 $ 10.09 $ 5.83 $ 12.18 $ 9.57
----------------------------------------------------------------------------------------------
Class IS............... $ 9.52 $ 10.09 $ 5.83 $ 12.17 $ 9.57
----------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
89
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Assets and Liabilities
September 30, 2000
<TABLE>
<CAPTION>
Limited
Income Plus Intermediate International Duration
Fund Bond Fund Bond Fund Fund
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Identified cost of
securities................... $1,702,769,914 $607,170,455 $75,248,340 $300,667,348
Net unrealized gains or losses
on securities................ (16,567,623) 4,317,385 (7,629,794) 79,618
-----------------------------------------------------------------------------------------
Market value of securities.... 1,686,202,291 611,487,840 67,618,546 300,746,966
Cash.......................... 1,346 2,451 1,465,666 0
Foreign currency, at value
(cost $0, 0, 541,905 and 0,
respectively)................ 0 0 545,037 0
Receivable for securities
sold......................... 12,943,868 0 0 0
Receivable for Fund shares
sold......................... 791,016 25,000 700 272,194
Interest and dividends
receivable................... 27,643,745 10,387,158 1,826,451 3,581,544
Receivable for closed forward
foreign currency exchange
contracts.................... 0 0 278,725 0
Unrealized gains on forward
foreign currency exchange
contracts.................... 0 0 395,249 0
Receivable from investment
advisor...................... 39,138 30,113 4,475 19,459
Prepaid expenses and other
assets....................... 2,765 51,672 11,308 2,645
-----------------------------------------------------------------------------------------
Total assets................ 1,727,624,169 621,984,234 72,146,157 304,622,808
-----------------------------------------------------------------------------------------
Liabilities
Distributions payable......... 8,996,122 2,686,952 0 1,357,384
Payable for securities
purchased.................... 130,007,235 0 0 4,999,938
Payable for Fund shares
redeemed..................... 3,343,645 224,788 0 4,536,866
Payable for securities on
loan......................... 0 0 0 1,673,100
Unrealized losses on forward
foreign currency exchange
contracts.................... 0 0 46,647 0
Deferred mortgage dollar roll
income....................... 59,501 0 0 0
Distribution Plan expenses
payable...................... 325 152 0 190
Due to other related parties.. 12,999 5,069 589 2,423
Foreign taxes payable......... 0 0 4,876 0
Accrued expenses and other
liabilities.................. 100,550 28,087 25,364 77,502
-----------------------------------------------------------------------------------------
Total liabilities........... 142,520,377 2,945,048 77,476 12,647,403
-----------------------------------------------------------------------------------------
Net assets..................... $1,585,103,792 $619,039,186 $72,068,681 $291,975,405
-----------------------------------------------------------------------------------------
Net assets represented by
Paid-in capital............... $1,631,655,070 $640,402,908 $81,368,629 $294,454,026
Undistributed
(overdistributed) net
investment income............ (349,786) (62,915) (769,286) 201,525
Accumulated net realized
losses on securities and
foreign currency related
transactions................. (29,633,869) (25,618,192) (1,231,687) (2,759,764)
Net unrealized gains or losses
on securities and foreign
currency related
transactions................. (16,567,623) 4,317,385 (7,298,975) 79,618
-----------------------------------------------------------------------------------------
Total net assets............... $1,585,103,792 $619,039,186 $72,068,681 $291,975,405
-----------------------------------------------------------------------------------------
Net assets consists of
Class A....................... $ 0 $ 0 $ 0 $ 0
Class B....................... 0 0 0 0
Class C....................... 0 0 0 0
Class I....................... 1,568,818,415 611,278,769 71,909,579 282,826,720
Class IS...................... 16,285,377 7,760,417 159,102 9,148,685
-----------------------------------------------------------------------------------------
Total net assets............... $1,585,103,792 $619,039,186 $72,068,681 $291,975,405
-----------------------------------------------------------------------------------------
Shares outstanding
Class A....................... 0 0 0 0
Class B....................... 0 0 0 0
Class C....................... 0 0 0 0
Class I....................... 292,593,950 10,113,652 8,805,025 27,780,984
Class IS...................... 3,037,109 128,397 19,482 898,634
-----------------------------------------------------------------------------------------
Net asset value per share
Class A....................... -- -- -- --
-----------------------------------------------------------------------------------------
Class B....................... -- -- -- --
-----------------------------------------------------------------------------------------
Class C....................... -- -- -- --
-----------------------------------------------------------------------------------------
Class I....................... $ 5.36 $ 60.44 $ 8.17 $ 10.18
-----------------------------------------------------------------------------------------
Class IS...................... $ 5.36 $ 60.44 $ 8.17 $ 10.18
-----------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
90
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Operations
Year Ended September 30, 2000
<TABLE>
<CAPTION>
Adjustable Core Fixed High Yield
Rate Bond Fixed Income Bond Fund
Fund Fund Income Fund Fund II (a) (b)
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income
Interest............... $3,739,419 $73,981,625 $40,764,347 $ 4,337,927 $ 4,044,190
Dividends.............. 0 3,483,340 0 0 0
-----------------------------------------------------------------------------------------
Total investment
income................. 3,739,419 77,464,965 40,764,347 4,337,927 4,044,190
-----------------------------------------------------------------------------------------
Expenses
Advisory fee........... 125,635 3,836,711 2,559,721 0 212,500
Distribution Plan
expenses.............. 71,012 32,543 31,187 3 3
Administrative services
fees.................. 41,563 920,394 465,803 0 42,500
Transfer agent fee..... 21,563 67,537 74,143 18,753 1,199
Trustees' fees and
expenses.............. 1,402 22,547 11,675 1,385 1,031
Printing and postage
expenses.............. 5,780 41,756 19,910 4,596 3,163
Custodian fee.......... 19,564 337,439 192,126 20,304 16,691
Registration and filing
fees.................. 4,956 277,322 34,820 7,671 26,990
Professional fees...... 14,233 22,164 16,361 10,557 19,080
Organization expenses.. 0 0 0 0 3,985
Other.................. 25,581 57,551 21,258 3,745 8,926
-----------------------------------------------------------------------------------------
Total expenses......... 331,289 5,615,964 3,427,004 67,014 336,068
Less: Expense
reductions............ (1,868) (44,120) (27,981) (4,475) (4,993)
Fee waivers.......... (17,507) (788,947) (351,621) 0 (76,073)
-----------------------------------------------------------------------------------------
Net expenses........... 311,914 4,782,897 3,047,402 62,539 255,002
-----------------------------------------------------------------------------------------
Net investment income.. 3,427,505 72,682,068 37,716,945 4,275,388 3,789,188
-----------------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities,
futures contracts and
foreign currency
related transactions
Net realized losses on:
Securities............. (422,614) (8,547,053) (4,947,953) (1,152,655) (1,178,799)
Futures contracts...... 0 0 0 (159,172) 0
Foreign currency
related transactions.. 0 0 0 0 0
-----------------------------------------------------------------------------------------
Net realized losses on
securities, futures
contracts and foreign
currency related
transactions.......... (422,614) (8,547,053) (4,947,953) (1,311,827) (1,178,799)
-----------------------------------------------------------------------------------------
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. 151,300 11,534,883 5,611,973 811,905 (1,174,102)
-----------------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities,
futures contracts and
foreign currency
related transactions.. (271,314) 2,987,830 664,020 (499,922) (2,352,901)
-----------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ $3,156,191 $75,669,898 $38,380,965 $ 3,775,466 $ 1,436,287
-----------------------------------------------------------------------------------------
</TABLE>
(a) For the eleven months ended September 30, 2000. The Fund changed its fiscal
year end from October 31 to September 30, effective September 30, 2000.
(b) For the period from November 30, 1999 (commencement of operations) through
September 30, 2000.
See Combined Notes to Financial Statements.
91
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Operations
Year Ended September 30, 2000
<TABLE>
<CAPTION>
Intermediate International Limited
Income Plus Bond Bond Duration
Fund Fund Fund Fund
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income
Interest............... $120,605,261 $ 36,780,446 $ 2,760,570 $20,264,607
Dividends.............. 420,000 0 0 0
--------------------------------------------------------------------------------
Total investment
income................. 121,025,261 36,780,446 2,760,570 20,264,607
--------------------------------------------------------------------------------
Expenses
Advisory fee........... 7,450,799 3,560,533 290,036 708,281
Distribution Plan
expenses.............. 36,638 17,766 554 19,342
Administrative services
fees.................. 1,335,113 520,019 41,798 231,968
Transfer agent fee..... 48,376 7,640 1,457 39,336
Trustees' fees and
expenses.............. 34,121 13,347 1,076 6,064
Printing and postage
expenses.............. 52,794 20,911 4,125 13,888
Custodian fee.......... 487,611 157,940 71,653 106,517
Registration and filing
fees.................. 156,943 20,163 23,081 26,990
Professional fees...... 33,021 17,421 23,916 14,971
Interest expense....... 0 0 0 2,127
Other.................. 50,378 2,811 14,326 16,556
--------------------------------------------------------------------------------
Total expenses......... 9,685,794 4,338,551 472,022 1,186,040
Less: Expense
reductions............ (87,687) (26,486) (26,862) (18,634)
Fee waivers.......... (969,386) (183,242) (96,364) (294,327)
--------------------------------------------------------------------------------
Net expenses........... 8,628,721 4,128,823 348,796 873,079
--------------------------------------------------------------------------------
Net investment income.. 112,396,540 32,651,623 2,411,774 19,391,528
--------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities,
futures contracts and
foreign currency
related transactions
Net realized losses on:
Securities............. (20,073,609) (22,167,026) (357,516) (2,656,157)
Futures contracts...... 0 0 0 0
Foreign currency
related transactions.. 0 0 (908,379) 0
--------------------------------------------------------------------------------
Net realized losses on
securities, futures
contracts and foreign
currency related
transactions.......... (20,073,609) (22,167,026) (1,265,895) (2,656,157)
--------------------------------------------------------------------------------
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. 629,335 11,571,853 (5,698,032) 1,493,616
--------------------------------------------------------------------------------
Net realized and
unrealized losses on
securities, futures
contracts and foreign
currency related
transactions.......... (19,444,274) (10,595,173) (6,963,927) (1,162,541)
--------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ $ 92,952,266 $ 22,056,450 $(4,552,153) $18,228,987
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
92
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Changes in Net Assets
Year Ended September 30, 2000
<TABLE>
<CAPTION>
High Yield
Adjustable Fixed Income Fixed Income Bond
Rate Fund Core Bond Fund Fund Fund II (a) Fund (b)
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations
Net investment income.. $ 3,427,505 $ 72,682,068 $ 37,716,945 $ 4,275,388 $ 3,789,188
Net realized losses on
securities, futures
contracts and foreign
currency related
transactions.......... (422,614) (8,547,053) (4,947,953) (1,311,827) (1,178,799)
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. 151,300 11,534,883 5,611,973 811,905 (1,174,102)
-------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 3,156,191 75,669,898 38,380,965 3,775,466 1,436,287
-------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class A................ (332,496) 0 0 0 0
Class B................ (56,567) 0 0 0 0
Class C................ (40,437) 0 0 0 0
Class I................ (1,909,189) (70,628,747) (36,587,102) (4,916,694) (3,687,796)
Class IS............... (1,056,751) (792,815) (775,585) (75) (70)
-------------------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (3,395,440) (71,421,562) (37,362,687) (4,916,769) (3,687,866)
-------------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 43,719,459 447,495,756 174,151,758 4,745,981 77,731,803
Payment for shares
redeemed.............. (50,437,311) (210,511,925) (217,709,595) (24,725,140) (350,000)
Net asset value of
shares issued in
reinvestment of
distributions......... 2,886,165 15,585,947 7,162,763 4,409,590 74,654
Net asset value of
shares issued in
acquisition........... 36,327,117 0 0 0 0
-------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... 32,495,430 252,569,778 (36,395,074) (15,569,569) 77,456,457
-------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... 32,256,181 256,818,114 (35,376,796) (16,710,872) 75,204,878
Net assets
Beginning of period.... 56,232,431 1,048,524,629 602,517,442 77,441,273 0
-------------------------------------------------------------------------------------------------
End of period.......... $ 88,488,612 $1,305,342,743 $ 567,140,646 $ 60,730,401 $75,204,878
-------------------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ 32,989 $ 1,026,179 $ (1,517,986) $ (493,774) $ 95,322
-------------------------------------------------------------------------------------------------
</TABLE>
(a) For the eleven months ended September 30, 2000. The Fund changed its fiscal
year end from October 31 to September 30, effective September 30, 2000.
(b) For the period from November 30, 1999 (commencement of operations) through
September 30, 2000.
See Combined Notes to Financial Statements.
93
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Changes in Net Assets
Year Ended September 30, 2000
<TABLE>
<CAPTION>
Income Plus Intermediate International Limited
Fund Bond Fund Bond Fund Duration Fund
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income.. $ 112,396,540 $ 32,651,623 $ 2,411,774 $ 19,391,528
Net realized losses on
securities, futures
contracts and foreign
currency related
transactions.......... (20,073,609) (22,167,026) (1,265,895) (2,656,157)
Net change in
unrealized gains or
losses on securities
and foreign currency
related transactions.. 629,335 11,571,853 (5,698,032) 1,493,616
-------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 92,952,266 22,056,450 (4,552,153) 18,228,987
-------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class A................ 0 0 0 0
Class B................ 0 0 0 0
Class C................ 0 0 0 0
Class I................ (110,332,973) (32,388,002) (3,347,664) (18,705,422)
Class IS............... (940,879) (338,792) (12,822) (493,016)
-------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (111,273,852) (32,726,794) (3,360,486) (19,198,438)
-------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 226,814,913 118,334,611 31,348,329 88,032,335
Payment for shares
redeemed.............. (434,407,327) (199,273,680) (9,111,270) (112,305,275)
Net asset value of
shares issued in
reinvestment of
distributions......... 5,937,883 312,502 2,247,542 3,432,056
-------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... (201,654,531) (80,626,567) 24,484,601 (20,840,884)
-------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... (219,976,117) (91,296,911) 16,571,962 (21,810,335)
Net assets
Beginning of period.... 1,805,079,909 710,336,097 55,496,719 313,785,740
-------------------------------------------------------------------------------------
End of period.......... $1,585,103,792 $ 619,039,186 $72,068,681 $ 291,975,405
-------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ (349,786) $ (62,915) $ (769,286) $ 201,525
-------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
94
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Changes in Net Assets
Year Ended September 30, 1999
<TABLE>
<CAPTION>
Adjustable Core Bond Fund Fixed Income
Rate Fund (a) Fund
---------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations
Net investment income............. $ 2,189,264 $ 19,149,689 $ 36,359,046
Net realized gains or losses on
securities, futures contracts and
foreign currency related
transactions..................... (206,625) (17,915,146) 1,416,510
Net change in unrealized gains or
losses on securities, and foreign
currency related transactions.... (203,833) 10,559,806 (33,036,101)
---------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations....................... 1,778,806 11,794,349 4,739,455
---------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income.............
Class I........................... (1,397,318) (18,838,531) (35,671,468)
Class IS.......................... (793,896) (117,748) (658,927)
Net realized gains................
Class I........................... 0 (144,394) 0
Class IS.......................... 0 (3,606) 0
---------------------------------------------------------------------------------
Total distributions to
shareholders..................... (2,191,214) (19,104,279) (36,330,395)
---------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold......... 32,420,775 83,677,773 147,719,575
Payment for shares redeemed....... (10,412,264) (48,148,961) (200,209,090)
Net asset value of shares issued
in reinvestment of
distributions.................... 1,817,776 3,931,283 7,882,569
Net asset value of shares issued
in acquisition of:
Common Trust Funds................ 0 312,235,534 0
Investment Companies.............. 0 592,389,300 0
---------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from capital
share transactions............... 23,826,287 944,084,929 (44,606,946)
---------------------------------------------------------------------------------
Total increase (decrease) in net
assets.......................... 23,413,879 936,774,999 (76,197,886)
Net assets
Beginning of period............... 32,818,552 111,749,630 678,715,328
---------------------------------------------------------------------------------
End of period..................... $ 56,232,431 $1,048,524,629 $ 602,517,442
---------------------------------------------------------------------------------
Undistributed (overdistributed) net
investment income................. 924 (225,304) (631,290)
---------------------------------------------------------------------------------
</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.
95
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Changes in Net Assets (continued)
Year Ended September 30, 1999
<TABLE>
<CAPTION>
Limited
Income Plus Intermediate International Duration
Fund Bond Fund Bond Fund Fund
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income.. $ 86,445,775 $ 33,672,831 $ 1,997,899 $ 8,117,604
Net realized gains or
losses on securities,
futures contracts and
foreign currency
related transactions.. (9,539,387) (3,177,212) 3,129,348 (98,199)
Net change in
unrealized gains or
losses on securities,
and foreign currency
related transactions.. (95,323,463) (52,389,950) (3,192,115) (2,114,578)
------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ (18,417,075) (21,894,331) 1,935,132 5,904,827
------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income..
Class I................ (85,924,615) (33,430,318) (1,906,784) (8,066,740)
Class IS............... (510,896) (236,269) (5,278) (43,790)
Net realized gains.....
Class I................ (12,260,419) (9,895,453) 0 (125,867)
Class IS............... (77,202) (67,252) 0 (1,052)
------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (98,773,132) (43,629,292) (1,912,062) (8,237,449)
------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 233,942,078 81,766,341 14,680,094 65,588,737
Payment for shares
redeemed.............. (314,597,134) (106,674,508) (7,438,959) (65,752,963)
Net asset value of
shares issued in
reinvestment of
distributions......... 17,855,318 8,732,727 1,496,453 2,540,973
Net asset value of
shares issued in
acquisition of:
Common Trust Funds..... 610,301,298 0 0 0
Investment Companies... 0 40,425,308 0 242,317,183
------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... 547,501,560 24,249,868 8,737,588 244,693,930
------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... 430,311,353 (41,273,755) 8,760,658 242,361,308
Net assets
Beginning of period.... 1,374,768,556 751,609,852 46,736,061 71,424,432
------------------------------------------------------------------------------------
End of period.......... $1,805,079,909 $ 710,336,097 $55,496,719 $313,785,740
------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... (509,450) 12,256 324,141 5,793
------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
96
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Changes in Net Assets
Year Ended March 31, 1999 (a)
<TABLE>
<CAPTION>
Core Bond
Fund
--------------------------------------------------------------------------------
<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 gains or 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 presented is for the Tattersall Bond Fund, the accounting
survivor in the June 4, 1999 merger with Select Core Bond Fund, restated to
give effect to this transaction.
See Combined Notes to Financial Statements.
97
<PAGE>
EVERGREEN
Select Fixed Income Funds
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Fixed Income Fund II
Year Ended October 31,
1999 1998
--------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income.............................. $ 5,058,629 $ 4,321,183
Net realized gains or losses on securities and
futures contracts................................. (2,172,496) 774,135
Net change in unrealized gains or losses on
securities and futures contracts.................. (2,191,118) (60,111)
--------------------------------------------------------------------------------
Net increase in net assets resulting from
operations........................................ 695,015 5,035,207
--------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income
Class I (a)........................................ (5,016,287) (4,374,722)
Class IS........................................... 0 0
Net realized gains
Class I (a)........................................ (798,581) (285,172)
Class IS........................................... 0 0
--------------------------------------------------------------------------------
Total distributions to shareholders................ (5,814,868) (4,659,894)
--------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold.......................... 15,646,360 23,755,754
Payment for shares redeemed........................ (20,614,478) (6,804,702)
Net asset value of shares issued in reinvestment of
distributions..................................... 4,156,912 4,307,983
--------------------------------------------------------------------------------
Net Increase (decrease) in net assets resulting
from capital share transactions................... (811,206) 21,259,035
--------------------------------------------------------------------------------
Total increase (decrease) in net assets........... (5,931,059) 21,634,348
Net assets
Beginning of period................................ 83,372,332 61,737,984
--------------------------------------------------------------------------------
End of period...................................... $ 77,441,273 $83,372,332
--------------------------------------------------------------------------------
Undistributed net investment income................. $ 222,341 $ 210,480
--------------------------------------------------------------------------------
</TABLE>
(a) Effective October 18, 1999 shareholders of Mentor Fixed Income Portfolio
became owners of that number of full and fractional shares of Class I of
Evergreen Select Fixed Income Fund II.
See Combined Notes to Financial Statements.
98
<PAGE>
Combined Notes to Financial Statements
1. ORGANIZATION
The Evergreen Select Fixed Income Funds consist of Evergreen Select Adjustable
Rate Fund ("Adjustable Rate Fund"), Evergreen Select Core Bond Fund ("Core Bond
Fund"), Evergreen Select Fixed Income Fund ("Fixed Income Fund"), Evergreen Se-
lect Fixed Income Fund II ("Fixed Income Fund II"), Evergreen Select 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 ("Interna-
tional Bond Fund") and Evergreen Select Limited Duration Fund ("Limited Dura-
tion Fund"), (collectively, the "Funds"). Each Fund is a diversified series of
Evergreen Select Fixed Income Trust (the "Trust"), a Delaware business trust
organized 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 Institutional shares ("Class I") and Institutional Service
shares ("Class IS"). In addition, Adjustable Rate Fund offers Class A, Class B
and Class C shares. Class A shares are sold with a front-end sales charge.
Class B and Class C shares are sold without a front-end sales charge, but pay a
higher ongoing distribution fee than Class A. Class B and Class C shares are
sold subject to a contingent deferred sales charge that is payable upon redemp-
tion and decreases depending on how long the shares have been held. Class I and
Class IS shares are sold without a front-end sales charge or contingent de-
ferred sales charge; however, 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 institu-
tional traders. Securities for which valuations are not available from an inde-
pendent pricing service may be valued by brokers which use prices provided by
market makers or estimates of market value obtained from yield data relating to
investments or securities with similar characteristics.
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.
Securities for which valuations are not readily available (including restricted
securities) are valued at fair value as determined in good faith according to
procedures established by the Board of Trustees.
Mutual fund shares held 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.
B. Repurchase Agreements
Securities pledged as collateral for repurchase agreements are held in a segre-
gated account by the custodian on the Fund's behalf. Collateral for certain
tri-party repurchase agreements is held at the counterparty's custodian in a
segregated account for the benefit of the Fund and the counterparty. Each Fund
monitors the ade-
99
<PAGE>
Combined Notes to Financial Statements (continued)
quacy of the collateral daily and will require the seller to provide additional
collateral in the event the market value of the securities pledged falls below
the carrying value of the repurchase agreement, including accrued interest.
Each Fund will only enter into repurchase agreements with banks and other fi-
nancial institutions, which are deemed by the investment advisor to be credit-
worthy 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 repurchase of the collateral securities 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 gains or losses resulting from changes in foreign
currency exchange rates is a component of net unrealized gains or losses on se-
curities and foreign currency related transactions. Net realized foreign cur-
rency gain or loss on foreign currency related transactions includes foreign
currency gains and losses between trade date and settlement date on investment
securities transactions, gains and losses from foreign currency related trans-
actions and the difference between the amounts of interest and dividends re-
corded on the books of the Fund and the amount actually received. The portion
of foreign currency gains or losses related to fluctuations in exchange rates
between the initial purchase trade date and subsequent sale trade date is in-
cluded in realized gain or loss on securities.
E. Futures Contracts
In order to gain exposure to or protect against changes in security values, the
Funds may buy and sell futures contracts. The initial margin deposited with a
broker when entering into a futures transaction is subsequently adjusted by
daily payments or receipts ("variation margin") as the value of the contract
changes. Such changes are recorded as unrealized gains or losses. Realized
gains or losses are recognized on closing the contract.
Risks of entering into futures contracts include (i) the possibility of an il-
liquid market for the contract, (ii) the possibility that a change in the value
of the contract may not correlate with changes in the value of the underlying
instrument or index, and (iii) the credit risk that the other party will not
fulfill their obligations under the contract. Futures contracts also involve
elements of market risk in excess of the amount reflected in each Fund's State-
ment of Assets and Liabilities.
F. Forward Foreign Currency Exchange Contracts
The Funds may enter into forward foreign currency exchange contracts ("forward
contracts") to settle portfolio purchases and sales of securities denominated
in a foreign currency and to hedge certain assets or liabilities denominated in
a foreign currency. Forward contracts are recorded at the forward rate and
marked-to-market daily. Realized gains and losses arising from such transac-
tions are included in net realized gain or loss on foreign currency related
transactions. The Fund bears the risk of an unfavorable change in the foreign
currency exchange rate underlying the forward contract and is subject to the
credit risk that the other party will not fulfill their obligations under the
contract. Forward contracts involve elements of market risk in excess of the
amount reflected in each Fund's Statement of Assets and Liabilities.
100
<PAGE>
Combined Notes to Financial Statements (continued)
G. 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.
H. Securities Lending
In order to generate income and to offset expenses, the Funds may lend portfo-
lio securities to brokers, dealers and other qualified financial organizations.
Loans of securities will be collateralized by cash, letters of credit or U.S.
Government securities that are maintained at all times in an amount equal to at
least 100% of the current market value of the loaned securities, including ac-
crued interest. The Fund monitors the adequacy of the collateral daily and will
require the borrower to provide additional collateral as necessary. While such
securities are on loan, the borrower will pay a Fund any income accruing there-
on, and the Fund may invest any cash collateral received in portfolio securi-
ties, 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.
The Fund bears the risk that the borrower may not provide additional collateral
when required or return the securities when due.
I. Dollar Rolls Transactions
Each Fund may engage in dollar roll transactions with respect to mortgage-
backed securities. In a mortgage dollar roll transaction, a Fund sells a mort-
gage-backed security to a financial institution, such as a bank or
broker/dealer and simultaneously agrees to repurchase a substantially similar
(i.e. same type, coupon and maturity) security from the institution at a later
date at an agreed upon price. During the roll period the Fund foregoes princi-
pal and interest paid on the securities. The Fund receives compensation as con-
sideration for entering into the commitment to repurchase. The compensation is
recorded as deferred income and amortized to income over the roll period, or
alternatively, a lower price for the security upon its repurchase.
J. Security Transactions and Investment Income
Securities transactions are accounted for no later than one business day after
the trade date. Realized gains and losses are computed on the identified cost
basis. Interest income is recorded on the accrual basis and includes accretion
of discounts and amortization of premiums. Dividend income is recorded on the
ex-dividend date or in the case of some foreign securities, on the date there-
after when the Fund is made aware of the dividend. Foreign income and capital
gains realized on some foreign securities may be subject to foreign taxes,
which are accrued as applicable.
K. Federal Taxes
The Funds intend to comply with the provisions of the Internal Revenue Code ap-
plicable to regulated investment companies and to distribute all of their net
investment company taxable income, net tax-exempt income and net capital gains,
if any, to their shareholders. Accordingly, no provision for federal income or
excise tax is required.
L. Distributions
Distributions from net investment income for each Fund, except Fixed Income
Fund II and International Bond Fund, are declared daily and paid monthly. Dis-
tributions from net investment income for Fixed Income Fund II and Interna-
tional Bond Fund are declared and paid quarterly. Distributions from net real-
ized capital gains, if any, are paid at least annually. To the extent that re-
alized capital gains can be offset by capital loss carryforwards, it is each
Fund's policy not to distribute such gains. Distributions to shareholders are
recorded at the close of business on the ex-dividend date.
Income and capital gains distributions to shareholders are determined in accor-
dance with income tax regulations, which may differ from generally accepted ac-
counting principles. Reclassifications have been made to the Funds' components
of net assets to reflect income and gains available for distribution (or avail-
able capital loss carryovers, as applicable) under income tax regulations. The
primary permanent differences causing such reclassifications are due to, net
realized foreign currency gains or losses, certain repurchases of securities
sold
101
<PAGE>
Combined Notes to Financial Statements (continued)
at a loss, certain capital loss carryforwards assumed as a result of acquisi-
tions and differing treatment of mortgage dollar rolls.
M. Class Allocations
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses are prorated among the classes based on the rela-
tive net assets of each class. Currently, class specific expenses are limited
to expenses incurred under the Distribution Plans for each class.
N. 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 Sep-
tember 30, 2000.
3. INVESTMENT ADVISORY AGREEMENT AND OTHER AFFILIATED TRANSACTIONS
Evergreen Investment Management Company ("EIMC"), an indirect, wholly owned
subsidiary 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 management services, the Funds pay EIMC a management fee that is computed
and paid daily. The management 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 av-
erage daily net assets of the respective Fund. Prior to January 3, 2000, the
management fee for Adjustable Rate Fund was calculated at an annual rate of
0.30% of its average daily net assets.
Tattersall Advisory Group ("TAG"), a subsidiary of FUNB, is the investment ad-
visor for Core Bond Fund. In return for its services, the Fund pays TAG a man-
agement fee that is computed and paid daily at an annual rate of 0.32% of the
Fund's average daily net assets. Prior to January 3, 2000, the management fee
for Core Bond Fund was calculated at an annual rate of 0.40% of its average
daily net assets.
FUNB, a subsidiary of First Union Corporation ("First Union"), is the invest-
ment advisor for Fixed Income Fund, Income Plus Fund, Intermediate Bond Fund
and Limited Duration Fund. In return for providing investment management serv-
ices, the Funds pay FUNB a management fee that is computed and paid daily. The
management fee is computed based on the following percentages of each Fund's
average daily net assets:
<TABLE>
<CAPTION>
Rate prior to
Current Rate 1/3/2000
--------------------------
<S> <C> <C>
Fixed Income Fund.................... 0.42% 0.50%
Income Plus Fund..................... 0.42% 0.50%
Intermediate Bond Fund............... 0.52% 0.60%
Limited Duration Fund................ 0.22% 0.30%
</TABLE>
Mentor Investment Advisors, LLC ("Mentor Advisors"), a subsidiary of First
Union, is the investment advisor for the Fixed Income Fund II. Mentor Advisors
receives no compensation for its services.
First International Advisors, Ltd. ("FIA"), a subsidiary of First Union, is the
investment advisor for the International Bond Fund. In return for providing in-
vestment management services, the Fund pays FIA a management fee that is com-
puted and paid daily. The management fee for International Bond Fund is com-
puted at an annual rate of 0.52% of the average daily net assets of the Fund.
Prior to January 3, 2000, the management fee was calculated at an annual rate
of 0.60% of the average daily net assets of the Fund.
During the year ended September 30, 2000, the amount of investment advisory
fees waived by the investment advisors and the impact on each Fund's annualized
expense ratio represented as a percentage of its average net assets were as
follows:
<TABLE>
<CAPTION>
% of Average
Fees Waived Daily Net Assets
----------------------------
<S> <C> <C>
Adjustable Rate Fund............... $ 17,507 0.02%
Core Bond Fund..................... 788,947 0.07
Fixed Income Fund.................. 351,621 0.06
High Yield Bond Fund............... 76,073 0.18
Income Plus Fund................... 969,386 0.06
Intermediate Bond Fund............. 183,242 0.03
International Bond Fund............ 96,364 0.18
Limited Duration Fund.............. 294,327 0.10
</TABLE>
102
<PAGE>
Combined Notes to Financial Statements (continued)
Evergreen Investment Services ("EIS"), an indirect, wholly owned subsidiary of
FUNB, is the administrator to the Funds. As administrator, EIS provides the
Funds with facilities, equipment and personnel. Prior to May 1, 2000, The BISYS
Group, Inc. ("BISYS") served as the sub-administrator to the Funds and provided
the officers of the Funds. Officers of the Funds and affiliated Trustees re-
ceive no compensation directly from the Funds.
For its services, each Fund, (except Fixed Income Fund II) pays the administra-
tor a fee at the annual rate of 0.10% of each Fund's average daily net assets.
EIS receives no compensation from Fixed Income Fund II for its services. For
each Fund, except Adjustable Rate Fund, the sub-administrator was paid by the
administrator out of its fees until the sub-administration agreement with BISYS
was terminated on April 30, 2000.
Prior to January 3, 2000, the administrator and sub-administrator for each
Fund, except Adjustable Rate Fund and Fixed Income Fund II, were entitled to an
annual fee based on the combined average daily net assets of all the funds ad-
ministered by EIS for which First Union or its investment advisory subsidiaries
were also the investment advisors. The administration fee was calculated by ap-
plying percentage rates, which started at 0.05% and declined to 0.01% per annum
as net assets increased, to the average daily net assets of each Fund. The sub-
administration fee was calculated by applying percentage rates, which started
at 0.01% and declined to 0.004% per annum as net assets increased, to the aver-
age daily net assets of each Fund.
Prior to January 3, 2000, the administration fee for Adjustable Rate Fund was
paid by the investment advisor and was not a fund expense. However, the Funds
reimbursed EIMC for providing certain administration and accounting expenses.
During the year ended September 30, 2000, the Funds paid or accrued to EIS the
following amounts for administrative and sub-administrative services:
<TABLE>
<CAPTION>
Administration Sub-administration
Fee Fee
---------------------------------
<S> <C> <C>
Adjustable Rate Fund.......... $ 41,563 $ 0
Core Bond Fund................ 896,517 23,877
Fixed Income Fund............. 452,759 13,044
High Yield Bond Fund.......... 41,891 609
Income Plus Fund.............. 1,299,670 35,443
Intermediate Bond Fund........ 505,003 15,016
International Bond Fund....... 40,581 1,217
Limited Duration Fund......... 226,074 5,894
</TABLE>
Evergreen Service Company ("ESC"), an indirect, wholly owned subsidiary of
FUNB, is the transfer and dividend disbursing agent for the Funds.
4. DISTRIBUTION PLANS
Evergreen Distributor, Inc. ("EDI"), a wholly owned subsidiary of BISYS, serves
as principal underwriter to the Funds.
Each Fund has adopted Distribution Plans, as allowed by Rule 12b-1 of the 1940
Act, for Class IS shares, as well as for Class A, Class B and Class C for Ad-
justable Rate Fund. Distribution plans permit a Fund to compensate its princi-
pal underwriter for costs related to selling shares of the Fund and for various
other services. These costs, which consist primarily of commissions and service
fees to broker-dealers who sell shares of the Fund, are paid by the Fund
through "Distribution Plan expenses." Under the Distribution Plans, each class
incurs distribution fees at the following annual rates:
<TABLE>
<CAPTION>
Average Daily
Net Assets
-------------
<S> <C>
Class A............................................ 0.25%
Class B............................................ 1.00
Class C............................................ 1.00
Class IS........................................... 0.25
</TABLE>
Of the above amounts, each share class may pay under its Distribution Plan a
maximum service fee of 0.25% of the average daily net assets of the class to
pay for shareholder service fees.
103
<PAGE>
Combined Notes to Financial Statements(continued)
During the year ended September 30, 2000, amounts paid or accrued to EDI pursu-
ant to the Distribution Plans were as follows:
<TABLE>
<CAPTION>
Class A Class B Class C Class IS
--------------------------------
<S> <C> <C> <C> <C>
Adjustable Rate Fund......... $10,789 $9,887 $7,071 $43,265
Core Bond Fund............... 0 0 0 32,543
Fixed Income Fund............ 0 0 0 31,187
Fixed Income Fund II......... 0 0 0 3
High Yield Bond Fund......... 0 0 0 3
Income Plus Fund............. 0 0 0 36,638
Intermediate Bond Fund....... 0 0 0 17,766
International Bond Fund...... 0 0 0 554
Limited Duration Fund........ 0 0 0 19,342
</TABLE>
With respect to the Class B and C shares, the principal underwriter may pay
distribution fees greater than the allowable annual amounts each Fund is per-
mitted to pay under the Distribution Plans.
Each 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.
5. ACQUISITIONS
On July 21, 2000, Adjustable Rate Fund acquired substantially all the assets
and assumed certain liabilities of Evergreen Capital Preservation and Income
Fund in exchange for Class A, Class B and Class C shares of Adjustable Rate
Fund. The acquired net assets consisted primarily of portfolio securities with
unrealized depreciation of $236,471. The aggregate net assets of Adjustable
Rate Fund and Evergreen Capital Preservation and Income Fund immediately prior
to the acquisition were $46,395,424 and $36,327,117, respectively. The aggre-
gate net assets of Adjustable Rate Fund immediately after the acquisition were
$82,722,541.
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
Shares Assets Appreciation
Acquiring Fund Common Trust Fund Acquired Issued Acquired (Depreciation)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Core Bond Fund CoreFund Charitable Fixed Income Trust 10,632,584 $106,874,434 $(2,608,935)
CoreFund Bond Fund 20,219,688 203,240,383 0
Signet Premium Income Fund 210,985 2,120,717 (32,764)
----------- ------------ -----------
31,063,257 312,235,534 (2,641,699)
Income Plus Fund CoreFund Fixed Income Fund 45,904,652 248,651,717 (5,968,898)
CoreFund Bond Trust 66,765,388 361,649,581 (6,978,079)
----------- ------------ -----------
112,670,040 610,301,298 (12,946,977)
Intermediate Bond Fund CoreFund Delaware Municipal Bond Fund 644,587 40,425,308 304,901
----------- ------------ -----------
Limited Duration Fund CoreFund Intermediate Bond Trust 10,728,927 109,605,697 (334,385)
CoreFund Intermediate Fund 4,178,636 42,688,717 (21,833)
CoreFund Intermediate Bond Fund 8,812,023 90,022,769 0
----------- ------------ -----------
23,719,586 242,317,183 (356,218)
</TABLE>
On June 4, 1999, Core Bond Fund acquired substantially all the assets and as-
sumed certain liabilities 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 acquisi-
tion and Core Bond Fund was to be managed in accordance with Tattersall's in-
vestment objective and policies, it was determined that Tattersall would be the
accounting and performance survivor of this reorganization and as such its ba-
sis of accounting for assets and liabilities and its operating results for
prior periods have been carried forward.
104
<PAGE>
Combined Notes to Financial Statements(continued)
6. CAPITAL SHARE TRANSACTIONS
The Funds have an unlimited number of shares of beneficial interest with $0.001
par value authorized. Shares of beneficial interest of the Funds are currently
divided into Class I and Class IS, as well as Class A, Class B and Class C for
Adjustable Rate Fund. Transactions in shares of the Funds were as follows:
Adjustable Rate Fund
<TABLE>
<CAPTION>
Year Ended September 30,
------------------------------------------------
2000 1999
------------------------ ----------------------
Shares Amount Shares Amount
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A (a)
Shares sold.................. 73,667 $ 700,007
Shares redeemed.............. (173,059) (1,646,963)
Shares issued in reinvestment
of distributions............ 22,701 215,914
Shares issued in acquisition
of Evergreen Capital
Preservation and Income
Fund........................ 2,864,628 27,303,067
--------------------------------------------------------------------------------
Net increase................. 2,787,937 26,572,025
--------------------------------------------------------------------------------
Class B (a)
Shares sold.................. 6,546 62,309
Shares redeemed.............. (31,545) (300,108)
Shares issued in reinvestment
of distributions............ 3,909 37,177
Shares issued in acquisition
of Evergreen Capital
Preservation and Income
Fund........................ 553,117 5,271,655
--------------------------------------------------------------------------------
Net increase................. 532,027 5,071,033
--------------------------------------------------------------------------------
Class C (a)
Shares sold.................. 23,872 226,782
Shares redeemed.............. (31,516) (299,574)
Shares issued in reinvestment
of distributions............ 2,299 21,862
Shares issued in acquisition
of Evergreen Capital
Preservation and Income
Fund........................ 393,719 3,752,395
--------------------------------------------------------------------------------
Net increase................. 388,374 3,701,465
--------------------------------------------------------------------------------
Class I
Shares sold.................. 1,026,242 9,957,317 1,602,911 $15,347,739
Shares redeemed.............. (1,555,676) (14,823,916) (354,414) (3,423,816)
Shares issued in reinvestment
of distributions............ 203,359 1,761,786 125,051 1,199,107
--------------------------------------------------------------------------------
Net increase (decrease)...... (326,075) (3,104,813) 1,373,548 13,123,030
--------------------------------------------------------------------------------
Class IS
Shares sold.................. 3,440,789 32,773,044 1,780,289 17,073,036
Shares redeemed.............. (3,502,235) (33,366,750) (728,144) (6,988,448)
Shares issued in reinvestment
of distributions............ 89,156 849,426 64,525 618,669
--------------------------------------------------------------------------------
Net increase................. 27,710 255,720 1,116,670 10,703,257
--------------------------------------------------------------------------------
Net increase................. $ 32,495,430 $23,826,287
--------------------------------------------------------------------------------
</TABLE>
(a) For the period from June 30, 2000 (commencement of class operations) to
September 30, 2000.
Core Bond Fund
<TABLE>
<CAPTION>
Year Ended September 30,
---------------------------------------------------- Year Ended
2000 1999 (b) March 31, 1999 (c)
-------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I
Shares sold............. 41,868,670 $ 417,398,564 7,983,350 $ 81,433,457 1,686,530 $ 17,978,857
Shares redeemed......... (19,749,904) (196,203,342) (4,611,016) (46,750,534) (1,092,498) (11,649,216)
Shares issued in
reinvestment of
distributions.......... 1,515,762 15,104,053 378,980 3,856,401 768,493 8,176,315
Shares issued in
acquisition of:
Common Trust Funds..... 0 0 31,063,256 312,235,534 0 0
Investment Companies... 0 0 58,366,376 590,194,768 0 0
--------------------------------------------------------------------------------------------------------
Net increase............ 23,634,528 236,299,275 93,180,946 940,969,626 1,362,525 14,505,956
--------------------------------------------------------------------------------------------------------
Class IS
Shares sold............. 3,016,834 30,097,192 223,070 2,244,316 35,245 378,203
Shares redeemed......... (1,434,674) (14,308,583) (138,270) (1,398,427) (84,097) (897,925)
Shares issued in
reinvestment of
distributions.......... 48,441 481,894 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)............. 1,630,601 16,270,503 315,085 3,115,303 (29,158) (310,197)
--------------------------------------------------------------------------------------------------------
Net increase............ $ 252,569,778 $944,084,929 $ 14,195,759
--------------------------------------------------------------------------------------------------------
</TABLE>
(b) 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.
(c) The capital share activity is that of Tattersall 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.
105
<PAGE>
Combined Notes to Financial Statements(continued)
Fixed Income Fund
<TABLE>
<CAPTION>
Year Ended September 30,
------------------------------------------------------
2000 1999
-------------------------- --------------------------
Shares Amount Shares Amount
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............. 28,042,018 $ 161,285,403 22,718,254 $ 134,684,835
Shares redeemed......... (35,697,696) (205,418,401) (31,679,032) (189,162,288)
Shares issued in
reinvestment of
distributions.......... 1,157,484 6,664,297 1,260,239 7,507,425
--------------------------------------------------------------------------------
Net decrease............ (6,498,194) (37,468,701) (7,700,539) (46,970,028)
--------------------------------------------------------------------------------
Class IS
Shares sold............. 2,234,345 12,866,355 2,187,052 13,034,740
Shares redeemed......... (2,133,909) (12,291,194) (1,860,394) (11,046,802)
Shares issued in
reinvestment of
distributions.......... 86,592 498,466 63,140 375,144
--------------------------------------------------------------------------------
Net increase............ 187,028 1,073,627 389,798 2,363,082
--------------------------------------------------------------------------------
Net decrease............ $ (36,395,074) $ (44,606,946)
--------------------------------------------------------------------------------
</TABLE>
Fixed Income Fund II
<TABLE>
<CAPTION>
Period Ended October 31,
Period Ended ------------------------------------------------
September 30, 2000 (a) 1999 (b) 1998
------------------------ ------------------------ ----------------------
Shares Amount Shares Amount Shares Amount
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I (c)
Shares sold............. 387,259 $ 4,745,981 1,220,609 $ 15,645,360 1,822,466 $23,755,754
Shares redeemed......... (2,021,519) (24,725,140) (1,634,506) (20,614,478) (520,775) (6,804,702)
Shares issued in
reinvestment of
distributions.......... 363,849 4,409,515 327,679 4,156,912 332,359 4,307,983
----------------------------------------------------------------------------------------------------
Net increase
(decrease)............. (1,270,411) (15,569,644) (86,218) (812,206) 1,634,050 21,259,035
----------------------------------------------------------------------------------------------------
Class IS
Shares sold............. 0 0 82 1,000
Shares redeemed......... 0 0 0 0
Shares issued in
reinvestment of
distributions.......... 6 75 0 0
----------------------------------------------------------------------------------------------------
Net increase............ 6 75 82 1,000
----------------------------------------------------------------------------------------------------
Net increase
(decrease)............. $(15,569,569) $ (811,206) $21,259,035
----------------------------------------------------------------------------------------------------
</TABLE>
(a) For the eleven months ended September 30, 2000. The fund changed its fiscal
year end from October 31 to September 30, effective September 30, 2000.
(b) For Class IS, for the period from October 18, 1999 (commencement of class
operations) to October 31, 1999.
(c) Effective October 18, 1999, shareholders of Mentor Fixed Income Portfolio
became owners of that number of full and fractional shares of Class I of
Evergreen Select Fixed Income Fund II.
High Yield Fund
<TABLE>
<CAPTION>
Period Ended
September 30, 2000 (d)
------------------------
Shares Amount
--------------------------------------------------------------------------------
<S> <C> <C>
Class I
Shares sold........................................... 7,889,907 $ 77,730,803
Shares redeemed....................................... (36,534) (350,000)
Shares issued in reinvestment of distributions........ 7,685 74,584
--------------------------------------------------------------------------------
Net increase.......................................... 7,861,058 77,455,387
--------------------------------------------------------------------------------
Class IS
Shares sold........................................... 100 1,000
Shares redeemed....................................... 0 0
Shares issued in reinvestment of distributions........ 7 70
--------------------------------------------------------------------------------
Net increase.......................................... 107 1,070
--------------------------------------------------------------------------------
Net increase.......................................... $ 77,456,457
--------------------------------------------------------------------------------
</TABLE>
(d) For the period from November 30, 1999 (commencement of class operations) to
September 30, 2000.
106
<PAGE>
Combined Notes to Financial Statements(continued)
Income Plus Fund
<TABLE>
<CAPTION>
Year Ended September 30,
------------------------------------------------------
2000 1999
-------------------------- --------------------------
Shares Amount Shares Amount
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............. 37,646,502 $ 200,329,489 38,979,040 $ 218,566,129
Shares redeemed......... (77,546,544) (412,912,189) (54,255,598) (302,962,132)
Shares issued in
reinvestment of
distributions.......... 1,010,675 5,387,166 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)............. (38,889,367) (207,195,534) 100,470,368 543,406,567
--------------------------------------------------------------------------------
Class IS
Shares sold............. 4,969,183 26,485,424 2,754,186 15,375,949
Shares redeemed......... (4,043,770) (21,495,138) (2,080,768) (11,635,002)
Shares issued in
reinvestment of
distributions.......... 103,229 550,717 62,835 354,046
--------------------------------------------------------------------------------
Net increase............ 1,028,642 5,541,003 736,253 4,094,993
--------------------------------------------------------------------------------
Net increase
(decrease)............. $(201,654,531) $ 547,501,560
--------------------------------------------------------------------------------
</TABLE>
Intermediate Municipal Bond Fund
<TABLE>
<CAPTION>
Year Ended September 30,
---------------------------------------------------
2000 1999
------------------------- ------------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold.............. 1,776,137 $ 106,824,895 1,116,432 $ 71,950,904
Shares redeemed.......... (3,151,965) (189,521,923) (1,534,043) (98,321,050)
Shares issued in
reinvestment of
distributions........... 2,045 122,985 131,074 8,571,865
Shares issued in
acquisition of Common
Trust Funds............. 0 0 644,588 40,425,308
-------------------------------------------------------------------------------
Net increase (decrease).. (1,373,783) (82,574,043) 358,051 22,627,027
-------------------------------------------------------------------------------
Class IS
Shares sold.............. 191,688 11,509,716 151,491 9,815,437
Shares redeemed.......... (162,043) (9,751,757) (128,949) (8,353,458)
Shares issued in
reinvestment of
distributions........... 3,155 189,517 2,481 160,862
-------------------------------------------------------------------------------
Net increase............. 32,800 1,947,476 25,023 1,622,841
-------------------------------------------------------------------------------
Net increase (decrease).. $ (80,626,567) $ 24,249,868
-------------------------------------------------------------------------------
</TABLE>
International Bond Fund
<TABLE>
<CAPTION>
Year Ended September 30,
-----------------------------------------------
2000 1999
----------------------- ----------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold.................. 3,766,723 $31,129,917 1,537,729 $14,497,718
Shares redeemed.............. (1,025,906) (8,836,426) (781,161) (7,361,053)
Shares issued in reinvestment
of distributions............ 256,489 2,240,025 157,821 1,491,568
-------------------------------------------------------------------------------
Net increase................. 2,997,306 24,533,516 914,389 8,628,233
-------------------------------------------------------------------------------
Class IS
Shares sold.................. 25,218 218,412 19,285 182,376
Shares redeemed.............. (31,681) (274,844) (8,315) (77,906)
Shares issued in reinvestment
of distributions............ 851 7,517 517 4,885
-------------------------------------------------------------------------------
Net increase (decrease)...... (5,612) (48,915) 11,487 109,355
-------------------------------------------------------------------------------
Net increase................. $24,484,601 $ 8,737,588
-------------------------------------------------------------------------------
</TABLE>
107
<PAGE>
Combined Notes to Financial Statements(continued)
Limited Duration Fund
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------------------------------
2000 1999
-------------------------- ------------------------
Shares Amount Shares Amount
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I
Shares sold............. 7,415,216 $ 74,964,417 6,242,085 $ 64,355,655
Shares redeemed......... (10,505,383) (106,377,843) (6,370,003) (65,521,557)
Shares issued in
reinvestment of
distributions.......... 305,052 3,087,295 242,535 2,506,847
Shares issued in
acquisition of Common
Trust Funds............ 0 0 23,719,586 242,317,183
------------------------------------------------------------------------------
Net increase
(decrease)............. (2,785,115) (28,326,131) 23,834,203 243,658,128
------------------------------------------------------------------------------
Class IS
Shares sold............. 1,291,513 13,067,918 120,212 1,233,082
Shares redeemed......... (586,512) (5,927,432) (22,421) (231,406)
Shares issued in
reinvestment of
distributions.......... 34,139 344,761 3,301 34,126
------------------------------------------------------------------------------
Net increase............ 739,140 7,485,247 101,092 1,035,802
------------------------------------------------------------------------------
Net increase
(decrease)............. $ (20,840,884) $244,693,930
------------------------------------------------------------------------------
</TABLE>
7. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (excluding
short-term securities and mortgage dollar roll transactions) were as follows
for the year ended September 30, 2000:
<TABLE>
<CAPTION>
Cost of Purchases Proceeds from Sales
--------------------------- ---------------------------
U.S. Non-U.S. U.S. Non-U.S.
Government Government Government Government
-------------------------------------------------------
<S> <C> <C> <C> <C>
Adjustable Rate Fund.... $ 82,397,332 $ 0 $ 39,327,910 $ 0
Core Bond Fund.......... 2,013,419,408 399,803,565 1,529,359,062 606,384,771
Fixed Income Fund....... 65,791,333 166,097,616 145,391,164 131,065,761
Fixed Income Fund II
(a).................... 63,774,400 9,873,923 58,743,223 23,803,238
High Yield Bond Fund
(b).................... 0 88,227,976 0 20,836,133
Income Plus Fund........ 194,134,771 478,161,613 516,720,304 309,028,043
Intermediate Bond Fund.. 0 418,167,827 0 482,356,383
International Bond
Fund................... 623,160 55,798,877 0 33,488,747
Limited Duration Fund... 62,848,911 124,014,231 21,699,108 153,489,773
</TABLE>
(a) For the eleven months ended September 30, 2000. The Fund changed its fiscal
year end from October 31 to September 30, effective September 30, 2000.
(b) For the period from November 30, 1999 (commencement of operations) to Sep-
tember 30, 2000.
At September 30, 2000, International Bond Fund had forward foreign currency ex-
change contracts outstanding as follows:
Forward Foreign Currency Exchange Contracts to Buy:
<TABLE>
<CAPTION>
U.S. Value at In Exchange Unrealized
Exchange Date Contracts to Receive September 30, 2000 for U.S. $ Gain (Loss)
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
10/23/2000 1,496,596,500 JPY $13,942,631 $13,837,990 $104,641
</TABLE>
Forward Foreign Currency Exchange Contracts to Sell:
<TABLE>
<CAPTION>
U.S. Value at In Exchange Unrealized
Exchange Date Contracts to Deliver September 30, 2000 for U.S. $ Gain (Loss)
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
10/10/2000 8,364,884 EUR $ 7,396,647 $ 7,350,000 $(46,647)
10/23/2000 15,410,000 EUR 13,635,407 13,837,990 202,583
10/30/2000 8,863,000 EUR 7,845,148 7,933,173 88,025
</TABLE>
The following Funds loaned securities during the year ended September 30, 2000
to certain brokers. At September 30, 2000, the value of the securities on loan,
the value of the collateral (including accrued interest) and the income earned
on securities lending were as follows:
<TABLE>
<CAPTION>
Value of Value of Income
Securities on Loan Collateral Earned
---------------------------------------
<S> <C> <C> <C>
Core Bond Fund......... $16,669,335 $17,021,420 $ 3,605
Fixed Income Fund...... 81,731,012 85,195,168 765,091
Income Plus Fund....... 0 0 634,145
Limited Duration Fund.. 1,636,026 1,673,100 3,168
</TABLE>
108
<PAGE>
Combined Notes to Financial Statements(continued)
During the year ended September 30, 2000, the Fixed Income Fund and Income Plus
Fund entered into dollar roll transactions. At September 30, 2000, the Funds
had the following dollar roll agreements outstanding:
<TABLE>
<CAPTION>
Dollar Roll Interest Maturity
Amount Counterparty Rate Date
--------------------------------------------------------
<S> <C> <C> <C> <C>
Fixed Income
Fund......... $20,000,000 Paine Webber, Inc. 7.00% 10/19/2000
12,000,000 Paine Webber, Inc. 7.00 10/16/2000
13,000,000 Prudential Securities 8.00 10/23/2000
10,000,000 Morgan Stanley & Co. 7.50 10/16/2000
13,000,000 Prudential Securities 8.00 10/16/2000
15,000,000 Morgan Stanley & Co. 8.50 10/16/2000
Income Plus
Fund......... 11,000,000 AG Edwards & Co. 7.00 10/19/2000
8,250,000 Morgan Stanley & Co. 7.00 10/16/2000
20,000,000 Morgan Stanley & Co. 7.50 10/16/2000
10,000,000 Morgan Stanley & Co. 8.50 10/16/2000
20,000,000 Banc One Capital Markets 7.50 10/19/2000
10,000,000 Morgan Stanley & Co. 8.00 10/16/2000
19,100,000 Prudential Securities 8.00 10/23/2000
17,000,000 Morgan Stanley & Co. 7.00 10/23/2000
6,500,000 Morgan Stanley & Co. 7.50 10/23/2000
</TABLE>
During the year ended September 30, 2000, the Fixed Income Fund and Income Plus
Fund earned income on dollar roll transactions as follows:
<TABLE>
<CAPTION>
Income
Earned
----------
<S> <C>
Fixed Income Fund..................................... $1,252,244
Income Plus Fund...................................... 1,048,885
</TABLE>
On September 30, 2000 the composition of unrealized appreciation and deprecia-
tion on securities based on the aggregate cost of securities for federal income
tax purposes were as follows:
<TABLE>
<CAPTION>
Gross Gross Net Unrealized
Unrealized Unrealized Appreciation/
Tax Cost Appreciation Depreciation (Depreciation)
--------------------------------------------------------
<S> <C> <C> <C> <C>
Adjustable Rate
Fund........... $ 86,893,753 $ 254,256 $ (678,175) $ (423,919)
Core Bond Fund.. 1,366,734,634 13,835,314 (8,512,247) 5,323,067
Fixed Income
Fund........... 731,116,007 5,929,530 (5,555,022) 374,508
Fixed Income
Fund II........ 60,206,945 701,305 (685,515) 15,790
High Yield Bond
Fund........... 74,694,233 465,340 (1,671,708) (1,206,368)
Income Plus
Fund........... 1,702,835,720 24,206,329 (40,839,758) (16,633,429)
Intermediate
Bond Fund...... 607,170,455 11,130,674 (6,813,289) 4,317,385
International
Bond Fund...... 76,298,646 0 (8,680,100) (8,680,100)
Limited Duration
Fund........... 300,667,348 1,454,332 (1,374,714) 79,618
</TABLE>
As of September 30, 2000, the Funds had capital loss carryovers for federal in-
come tax purposes as follows:
<TABLE>
<CAPTION>
Expiration
---------------------------------------------------------
2001 2002 2003 2006 2007 2008
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Adjustable Rate Fund.... $478,350 $641,839 $296,983 $114,855 $ 476,682 $ 187,870
Core Bond Fund.......... 0 0 0 336,338 0 19,553,656
Fixed Income Fund II.... 0 0 0 0 1,979,112 1,327,303
Income Plus Fund........ 0 0 0 0 0 10,088,303
Intermediate Bond Fund.. 0 0 0 0 0 8,498,463
International Bond
Fund................... 0 0 0 325,874 0 0
Limited Duration Fund... 0 0 0 0 975 180,454
</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.
Adjustable Rate Fund's capital loss carryfoward was created as a result of the
July 21, 2000 acquisition of substantially all of the assets and assumption of
certain liabilities of the Evergreen Capital Preservation and Income Fund in
exchange for Adjustable Rate Fund shares. In accordance with income tax regula-
tions, certain Adjustable Rate Fund gains may not be used to offset this capi-
tal loss carryforward.
109
<PAGE>
Combined Notes to Financial Statements (continued)
Capital losses incurred after October 31 within a Fund's fiscal year are deemed
to arise on the first business day of the Fund's following fiscal year. The
Funds have incurred and will elect to defer the following post October losses:
<TABLE>
<CAPTION>
Post
October
Losses
-----------
<S> <C>
Adjustable Rate Fund................................. $ 391,555
Core Bond Fund....................................... 5,535,702
Fixed Income Fund.................................... 4,650,864
High Yield Bond Fund................................. 1,140,533
Income Plus Fund..................................... 19,479,760
Intermediate Bond Fund............................... 17,119,729
International Bond Fund.............................. 610,183
Limited Duration Fund................................ 2,578,335
</TABLE>
8. IN-KIND TRANSACTION
On September 25, 2000, Evergreen Select Total Return Bond Fund ("Total Return
Bond Fund"), a series of the Trust, executed a redemption in-kind transaction.
This transaction liquidated the net asset of Total Return Bond Fund. In turn,
on September 25, 2000, the assets from this transaction were transferred on a
pro-rata basis to Core Bond Fund, High Yield Bond Fund and International Bond
Fund and into a separately managed account of First Union. In exchange for is-
suing the following amount of Class I shares, investment securities and cash
were contributed to the Core Bond Fund, High Yield Bond Fund and International
Bond Fund to complete the transaction:
<TABLE>
<CAPTION>
Class I Cost/Market Value
shares issued of Securities Cash
------------------------------------------
<S> <C> <C> <C>
Core Bond Fund...... 1,738,187 $15,934,494 $1,255,682
High Yield Bond
Fund............... 2,042,699 17,823,986 1,271,971
International Bond
Fund............... 2,921,288 21,144,211 1,682,290
</TABLE>
The amount of shares issued by the Core Bond Fund, High Yield Bond Fund and In-
ternational Bond Fund are reflected in the proceeds from shares sold in each
Fund's Statement of Changes in Net Assets for the year ended September 30,
2000.
9. EXPENSE REDUCTIONS
Through expense offset arrangements with ESC and their custodian, a portion of
the Fund expenses have been reduced. The amount of expense reductions received
by each Fund and the impact of the total expense reductions on each Fund's
annualized expense ratio represented as a percentage of its average net assets
were as follows:
<TABLE>
<CAPTION>
Total Expense % of Average
Reductions Net Assets
--------------------------
<S> <C> <C>
Adjustable Rate Fund................. $ 1,868 0.00%
Core Bond Fund....................... 44,120 0.00
Fixed Income Fund.................... 27,981 0.00
Fixed Income Fund II................. 4,475 0.01
High Yield Fund...................... 4,993 0.01
Income Plus Fund..................... 87,687 0.01
Intermediate Bond Fund............... 26,486 0.00
International Bond Fund.............. 26,862 0.05
Limited Duration Fund................ 18,634 0.01
</TABLE>
10. DEFERRED TRUSTEES' FEES
Each Independent Trustee of each Fund may defer any or all compensation related
to performance of their duties as Trustees. The Trustees' deferred balances are
allocated to deferral accounts, which are included in the accrued expenses for
the Fund. The investment performance of the deferral accounts is 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.
110
<PAGE>
Combined Notes to Financial Statements(continued)
11. FINANCING AGREEMENT
On July 27, 1999, certain 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 bil-
lion. The credit facility was allocated, under the terms of the financing
agreement, among the Lenders. The credit facility was accessed by the Funds for
temporary or emergency purposes to fund the redemption of their shares or for
general working capital purposes as permitted by each Fund's borrowing restric-
tions. Borrowings under this facility bore interest at 0.75% per annum above
the Federal Funds rate (1.50% per annum above the Federal Funds rate during the
period from and including December 1, 1999 through and including January 31,
2000). A commitment fee of 0.10% per annum was incurred on the average daily
unused portion of the revolving credit commitment. The commitment fee was allo-
cated to all funds. For its assistance in arranging this financing agreement,
First Union Capital Markets Corp. was paid a one-time arrangement fee of
$250,000. State Street Bank & Trust Co. ("State Street") served as paying agent
for the funds and as paying agent was entitled to a fee of $20,000 per annum
which was allocated to all the funds.
On July 25, 2000, this agreement was renewed, amended and restated among cer-
tain Evergreen Funds and the Lenders. Under this renewed agreement, the Lenders
provide an unsecured revolving credit commitment in the aggregate amount of
$755 million. The credit facility is allocated, under the terms of the financ-
ing agreement, among the Lenders. The credit facility is accessed by the Funds
to temporarily finance the purchase or sale of securities for prompt delivery,
including funding redemption of their shares, as permitted by each Fund's bor-
rowing restrictions. Borrowings under this facility bear interest at 0.50% per
annum above the Federal Funds rate. A commitment fee of 0.10% per annum contin-
ues to be incurred on the average daily unused portion of the revolving credit
commitment and is allocated to all funds. For its assistance in renewing this
financing agreement, First Union Capital Markets Corp. was paid a one-time ar-
rangement fee of $150,000. State Street continues as paying agent for the funds
and receives a fee of $20,000 per annum, which is allocated to all the funds.
During the year ended September 30, 2000, the Funds had no borrowings under
these agreements.
111
<PAGE>
Independent Auditors' Report
Board of Trustees and Shareholders
Evergreen Select Fixed Income Trust
We have audited the accompanying statements of assets and liabilities, includ-
ing the schedules of investments of the Evergreen Select Adjustable Rate Fund,
Evergreen Select Core Bond Fund, Evergreen Select Fixed Income Fund, Evergreen
Select Fixed Income Fund II, Evergreen Select High Yield Bond Fund, Evergreen
Select Income Plus Fund, Evergreen Select Intermediate Term Municipal Bond
Fund, Evergreen Select International Bond Fund and Evergreen Select Limited Du-
ration Fund, portfolios of Evergreen Select Fixed Income Trust, as of September
30, 2000, and the related statements of operations for the year or period then
ended, the statements of changes in net assets for each of the years or periods
in the two-year period then ended, and the financial highlights for each of the
years or periods in the five-year period then ended. These financial statements
and financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and fi-
nancial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally ac-
cepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the finan-
cial statements and financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation
of securities owned as of September 30, 2000 by correspondence with the custo-
dian and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
portfolios of Evergreen Select Fixed Income Trust, referred to above, as of
September 30, 2000, the results of their operations, changes in their net as-
sets and financial highlights for each of the years or periods described above
in conformity with accounting principles generally accepted in the United
States of America.
/s/ KPMG LLP
Boston, Massachusetts
November 3, 2000
112
<PAGE>
Additional Information (Unaudited)
FEDERAL TAX STATUS OF DISTRIBUTIONS
For corporate shareholders, the following percentages of ordinary income divi-
dends paid during the fiscal year ended September 30, 2000 qualified for the
dividends received deductions:
<TABLE>
<S> <C>
Core Bond Fund............................................. 4.40%
</TABLE>
For the fiscal year ended September 30, 2000, the percentage representing the
portion of dividends exempt from federal income tax, other than alternative
minimum tax for the Intermediate Bond Fund is 99.66%.
113
<PAGE>
Evergreen Select Funds*
Money Market
Money Market Fund
Treasury Money Market Fund
100% Treasury Money Market Fund
Municipal Money Market Fund
U.S. Government Money Market Fund
Municipal Fixed Income
Intermediate Term Municipal Bond Fund
Taxable Fixed Income
International Bond Fund
Income Plus Fund
Core Bond Fund
Fixed Income Fund
Adjustable Rate Fund
Limited Duration Fund
Fixed Income Fund II
High Yield Bond Fund
* Minimum investment in an Evergreen Select Fund is $1,000,000.
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
Secular Growth Fund
47711 543698 11/2000
[LOGO OF EVERGREEN FUNDS]
200 Berkeley Street
Boston, MA 02116
-------------
PRSRT STD
U.S. POSTAGE
LANCASTER, PA
PERMIT NO. 11
-------------
