<PAGE>
Semiannual Report
as of November 30, 1999
Evergreen
National Municipal Bond Funds
[LOGO OF EVERGREEN FUNDS]
<PAGE>
Table of Contents
Letter to Shareholders .................................. 1
Evergreen High Grade Municipal
Bond Fund
Fund at a Glance ...................................... 2
Portfolio Manager Interview ........................... 3
Evergreen Municipal Bond Fund
Fund at a Glance ...................................... 5
Portfolio Manager Interview ........................... 6
Evergreen Short-Intermediate
Municipal Fund
Fund at a Glance ...................................... 9
Portfolio Manager Interview ........................... 10
Financial Highlights
Evergreen High Grade Municipal Bond Fund .............. 12
Evergreen Municipal Bond Fund ......................... 14
Evergreen Short-Intermediate Municipal Fund ........... 16
Schedule of Investments
Evergreen High Grade Municipal Bond Fund .............. 18
Evergreen Municipal Bond Fund ......................... 23
Evergreen Short-Intermediate Municipal Fund ........... 33
Statements of Assets and Liabilities .................... 36
Statements of Operations ................................ 37
Statements of Changes in Net Assets ..................... 38
Combined Notes to Financial
Statements .............................................. 40
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Evergreen Funds
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Evergreen Funds is one of the nation's fastest growing investment companies with
approxiamtely $80 billion in asstes under management
With over 80 mutual funds to choose among and acclaimed service and operations
capabilities, investors enjoy a broad range of quality investment products and
services designed to meet their needs.
The Evergreen Funds employ intensive, research- driven investment strategies
executed by over 90 research analyst and portfolio managers. The Fund company
remains dedicates to meeting the needs of investors and their advisors in a
global economy. Look to the Evergreen Funds to provide a distinctive level of
service and excellence in investment management.
This semiannual report must be preceded or accompanied by a prospectus of an
Evergreen fund contained herein. The prospectus contains more complete
information, including fees and expenses, and should be read carefully before
investing or sending money.
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Mutual Funds: ARE NOT FDIC INSURED May lose value . Are not bank guaranteed
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Evergreen Distributor,Inc.
EvergreenSM is a Service Mark of Evergreen Investment Services,Inc.
<PAGE>
Letter to Shareholders
----------------------
January 2000
[PHOTO OF WILLIAM M. ENNIS]
William M. Ennis
President and CEO
Dear Evergreen Shareholders,
We are pleased to provide the Evergreen National Municipal Bond Funds semiannual
report, which covers the six-month period ended November 30, 1999.
Uncertainty over Interest Rates Influences the Markets
The last year has been a difficult environment for fixed-income investors. After
the Federal Reserve Board lowered interest rates three times in 1998 in an
attempt to insulate the U.S. economy from global economic turmoil, it reversed
course halfway through 1999 and raised interest rates three times during the
fiscal period because of concerns about an overheated U.S. economy. Amidst the
volatility, the yield on the bellwether 30-year Treasury bond rose from 5.06% in
November of 1998 to 6.29% by November 30, 1999.
The Federal Reserve Bank's "tightening bias" leads many to anticipate further
interest rate increases in order to stem even the slightest inflationary
pressure. We believe that the economy is still fundamentally strong, and that
inflation will stay contained, producing only moderate upward pressure on
interest rates. We believe bonds are relatively attractive over the long term
compared to other asset classes, particularly because "real" interest rates are
high by historical standards.
Website Enhancements
Please visit our enhanced website, evergreen-funds.com, for more information
about Evergreen Funds. The site offers an array of helpful information including
1999 tax information, an investment education center, interactive calculators to
assist your investment planning and general information about Evergreen Funds.
We believe that sound investing is about taking steps to meet your long-term
financial needs and goals. We remind you to take advantage of your financial
advisor's expertise to develop and refine a financial plan that will enable you
to meet your objectives. Evergreen Funds offers a broad mix of stock, bond and
money market funds that should make it simple for you to choose the most
appropriate for your portfolio.
We would like to thank you for your continued investment in Evergreen Funds.
Sincerely,
/s/ William M. Ennis
William M. Ennis
President and CEO
Evergreen Investment Company, Inc.
1
<PAGE>
EVERGREEN
High Grade Municipal Bond Fund
Fund at a Glance as of November 30 , 1999
With today's high interest rates and higher yields,we believe municipal bonds
offer excellent investment value over the long term.
Portfolio Management
- --------------------
[PHOTO]
James T.Colby III
Tenure: December 1992
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CURRENT INVESTMENT STYLE 1
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[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 11/30/1999.
The Fixed-Income Style Box placement is based on a fund's average effective
maturity or duration and the average credit rating of the bond portfolio.
1 Source: 1999 Morningstar, Inc.
2 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. Historical performance for Classes B, C
and Y prior to their inception dates reflects that of Class A, the original
class offered, The historical returns for Classes B, C and Y have not been
adjusted to reflect the effect of each class' 12b-1 fees. These fees for Class
A are 0.25%, for Class B are 1.00% and for Class C are 1.00%. Class Y does not
pay a 12b-1 fee. If these fees had been reflected, returns for Classes B and C
would have been lower while returns for Class Y would have been higher. The
investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than original cost.
<TABLE>
<CAPTION>
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PERFORMANCE AND RETURNS 2
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Portfolio Inception Date: 2/21/1992 Class A Class B Class C Class Y
Class Inception Date 2/21/1992 1/11/1993 4/30/1999 2/28/1994
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<S> <C> <C> <C> <C>
Average Annual Returns*
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6 month with sales charge -8.85% -9.27% -5.59% n/a
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6 month w/o sales charge -4.30% -4.66% -4.66% -4.18%
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1 year with sales charge -8.94% -9.63% -5.83% n/a
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1 year w/o sales charge -4.41% -5.13% -4.83% -4.18%
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3 years 1.05% 1.04% 2.54% 2.94%
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5 years 5.75% 5.68% 6.70% 7.05%
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Since Portfolio Inception 5.06% 5.08% 5.72% 5.92%
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Maximum Sales Charge 4.75% 5.00% 1.00% n/a
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SEC Yield 4.51% 3.98% 3.99% 5.00%
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Taxable Equivalent Yield** 7.47% 6.59% 6.61% 8.28%
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6 month dividends per share $ 0.24 $ 0.20 $ 0.20 $ 0.25
- -----------------------------------------------------------------------------------------
6 month capital gain distribution
per share $ 0.15 $ 0.15 $ 0.15 $ 0.15
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</TABLE>
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
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LONG TERM GROWTH
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[LINE GRAPH]
CLASS A CPI LBMBI
2/29/92 9,526 10,000 10,000
11/30/92 10,230 10,245 10,743
11/30/93 11,476 10,519 11,934
11/30/94 10,515 10,801 11,307
11/30/95 12,923 11,082 13,445
11/30/96 13,486 11,443 14,235
11/30/97 14,226 11,652 15,255
11/30/98 15,277 11,833 16,440
11/30/99 14,604 12,157 16,263
Comparison of a $10,000 investment in Evergreen High Grade Municipal Bond Fund,
Class A2, versus a similar investment in the Lehman Brothers Municipal Bond
Index (LBMBI) and the Consumer Price Index (CPI).
The LBMBI is an unmanaged index and does not include transaction costs
associated with buying and selling securities nor any management fees. The CPI
is a commonly used measure of inflation and does not represent an investment
return. It is not possible to invest directly in an index.
2
<PAGE>
EVERGREEN
High Grade Municipal Bond Fund
Portfolio Manager Interview
How did the Fund perform?
The Evergreen High Grade Municipal Bond Fund Class A shares had a total return,
before deduction of any applicable sales charges, of -4.30% for the six-month
period ended November 30, 1999. This compares to a -1.86% return from the
Fund's benchmark, the Lehman Brothers Municipal Bond Index, for the same period.
During the same six-month period, the average return of insured municipal bond
funds was -3.65%, according to Lipper Inc., an independent monitor of mutual
fund performance. You can find more performance information for all share
classes on the preceding page.
Portfolio
Characteristics
---------------
(as of 11/30/1999)
Total Net Assets: $133,453,970
------------------------------------
Average Credit Quality: AAA
------------------------------------
Average Maturity: 17.77 years
------------------------------------
Average Duration: 8.85 years
------------------------------------
How would you describe the investment environment for the Fund?
Investors in municipal securities faced a challenging environment during most of
1999. Interest rates rose amid concerns about overly strong economic growth and
the possibility of an increase in inflation. On January 1, 1999, the yield on
the 30-year Treasury Bond, for example, was 5.08%. It rose to 6.29% by November
30, 1999. In the municipal market, the yield on the Bond Buyer 40 Index rose
from 5.17% to 6.11% during the same period. Because interest rates and bond
prices tend to move in opposite directions, the overall effect was a loss in
value for most types of bonds, including municipal bonds. In a rising interest
rate environment, a portfolio with a longer duration--a measure of sensitivity
to interest rate changes--will tend to be more adversely affected than a
portfolio with a shorter duration.
While this was a difficult time for municipal bond investing in general, it was
particularly difficult for investing in the insured municipal securities that
your Fund emphasizes. Insured bonds, with their AAA ratings, are the most liquid
securities in the market, which means they are the easiest to sell. There are
many willing buyers. While this often is a favorable characteristic of these
bonds, it can be a problem when interest rates are rising and bond prices are
falling. In such a general downturn, investors who want to sell some bonds often
sell their insured securities first precisely because they are the easiest to
sell. This means the insured securities may experience even more price loss than
other securities. That happened during the six months of the period, and insured
municipal bonds lagged even the general municipal bond market in performance. In
fact, the Lehman Brothers index for insured municipal bonds lost 5.75% during
the six-month period--the worst performance of any bond group tracked by Lehman
Brothers.
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PORTFOLIO QUALITY
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(based on 11/30/1999 portfolio assets)
[PIE CHART]
AAA -- 80.4%
AA -- 14.7%
A -- 3.3%
NR -- 1.6%
3
<PAGE>
EVERGREEN
High Grade Municipal Bond Fund
Portfolio Manager Interview
What strategies did you employ in this environment?
We persisted with our long-term strategy of building stability in the portfolio
while focusing on yield. We believe this is the best way to achieve superior,
long-term performance. As bond yields rose and prices dropped, the duration--or
interest rate sensitivity--of the Fund's portfolio extended automatically. This
meant that we had to work to shorten the duration of the Fund against this
overall trend. We did this primarily by selling securities of longer duration
and longer maturity and engaging in some hedging tactics through the purchase of
futures contracts.
Among sectors, we tended to reduce single-family-housing and industrial revenue
and pollution control bonds as we shortened the interest rate sensitivity of the
overall portfolio. Holdings in single-family-housing bonds, for example,
declined from 20.7% of net assets to 18.3% during the six months, while
industrial development and pollution control bonds declined from 15.5% to 11.4%.
The Fund's earlier emphasis on single-family housing bonds tended to hurt
performance during the six months. While housing-related bonds tend to offer
attractive yields, they often perform poorly in a rising interest rate
environment.
The overall credit quality in the portfolio--which is always very high--rose
during the six months, with 80.4% of net assets invested in AAA-rated
securities, compared to 76.4% six months earlier. Consistent with the past, the
average credit rating was AAA. The Fund's investment objective requires that at
least 65% of net assets be invested in insured municipal securities, which are
automatically rated AAA, the highest rating. During the period, we kept the
allocation to insured bonds at between 65% and 75% of the Fund's net assets.
While the six-month period was challenging, the overall strategies seemed to
work, as the Fund had strong performance relative to its Lipper peer group in
the final month of the period.
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PORTFOLIO COMPOSITION
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(based on 11/30/1999 net assets)
[PIE CHART]
Housing -- 22.4%
Other Investments & other assets and liabilities, net -- 12.5%
Industrial Development/Pollution Control -- 11.4%
Transportation -- 9.7%
Hospitals -- 9.3%
Special Revenue -- 7.7%
General Obligation-Local -- 7.5%
Lease Revenue/COP -- 7.3%
Airports -- 6.7%
Water & Sewer -- 5.5%
What is your outlook?
We are encouraged by the values we see in the municipal bond market, in general,
and the insured municipal market in particular. At the end of November, for
example, insured municipal bonds offered about 95% of the yield of taxable
Treasury bonds. This means that on an after-tax basis, virtually all
individuals paying income taxes would receive substantially more income than
they would receive from equivalently-rated taxable bonds.
Moreover, the U.S. economy is fundamentally strong and growing, and increasing
tax revenues have tended to keep municipalities financially sound, with no
deterioration in the general credit-worthiness of the public sector.
While the near-term outlook for interest rates remains uncertain, the long-term
value in the municipal bond market looks extremely attractive. Because insured
municipal bonds tend to move in price more quickly than other municipal bonds--
either up or down--this leads to opportunity when the market starts to recover.
When the market shows signs of recovery, we may very well increase our
allocation to insured bonds to take advantage of any momentum.
In this environment, we will continue to try to build attractive yield and
stability in the portfolio. With today's high interest rates and higher yields,
we believe municipal bonds offer excellent investment value over the long term.
4
<PAGE>
EVERGREEN
Municipal Bond Fund
Fund at a Glanceas of November 30, 1999
Throughout the period,we continued to work to build stability in the portfolio
while focusing on yield. We believe this is the best way to achieve
superior,long-term performance.
Portfolio
Management
- -----------------------------------------
[PHOTO] [PHOTO]
James T.Colby III George J.Kimball
Tenure: March 1998 Tenure: March 1998
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CURRENT INVESTMENT STYLE1
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[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 11/30/1999.
The Fixed-Income Style Box placement is based on a fund's average effective
maturity or duration and the average credit rating of the bond portfolio.
1 Source: 1999 Morningstar, Inc.
2 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. Historical performance for Classes A, C,
and Y prior to their inception dates reflects that of Class B, the original
class offered. The historical returns for Classes A and Y have been adjusted to
eliminate the effect of the higher 12b-1 fees applicable to Class B. The 12b-1
fees for Class A are 0.25%, for Class B are 1.00% and for Class C are 1.00%.
Class Y does not pay a 12b-1 fee. If these fees had not been eliminated, returns
would have been lower. The investment return and principal value will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
original cost.
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PERFORMANCE AND RETURNS2
- --------------------------------------------------------------------------------
Portfolio Inception Date: Class A Class B Class C Class Y
1/19/1978
Class Inception Date 1/20/1998 1/19/1978 1/26/1998 4/30/1999
- --------------------------------------------------------------------------------
Average Annual Returns*
- --------------------------------------------------------------------------------
6 month with sales charge -9.17% -9.67% -5.97% n/a
- --------------------------------------------------------------------------------
6 month w/o sales charge -4.68% -5.04% -5.04% -4.56%
- --------------------------------------------------------------------------------
1 year with sales charge -8.87% -9.59% -5.95% n/a
- --------------------------------------------------------------------------------
1 year w/o sales charge -4.33% -5.05% -5.04% -4.09%
- --------------------------------------------------------------------------------
3 years 0.89% 1.16% 1.80% 2.82%
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5 years 4.93% 5.37% 5.19% 6.24%
- --------------------------------------------------------------------------------
10 years 5.42% 5.49% 5.04% 6.19%
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Since Portfolio Inception 6.72% 6.48% 6.23% 7.16%
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Maximum Sales Charge 4.75% 5.00% 1.00% n/a
- --------------------------------------------------------------------------------
SEC Yield 4.85% 4.34% 4.34% 5.35%
- --------------------------------------------------------------------------------
Taxable Equivalent Yield** 8.03% 7.19% 7.19% 8.86%
- --------------------------------------------------------------------------------
6 month dividends per share $ 0.17 $ 0.15 $ 0.15 $ 0.18
- --------------------------------------------------------------------------------
6 month capital gain distribution
per share $ 0.04 $ 0.04 $ 0.04 $ 0.04
- --------------------------------------------------------------------------------
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
[LINE CHART]
------------------------------------------------------
LONG TERM GROWTH
------------------------------------------------------
CLASS B CPI LBMBI
11/30/89 10,000 10,000 10,000
11/30/90 10,671 10,627 10,771
11/30/91 11,591 10,945 11,876
11/30/92 12,637 11,279 13,067
11/30/93 13,901 11,581 14,516
11/30/94 12,882 11,890 13,753
11/30/95 15,178 12,200 16,353
11/30/96 15,921 12,597 17,314
11/30/97 16,842 12,828 18,555
11/30/98 17,803 13,026 19,996
11/30/99 16,905 13,384 19,781
Comparison of a $10,000 investment in Evergreen Municipal Bond Fund, Class B2,
versus a similar investment in the Lehman Brothers Municipal Bond Index (LBMBI)
and the Consumer Price Index (CPI).
The LBMBI is an unmanaged index and does not include transaction costs
associated with buying and selling securities nor any management fees. The CPI
is a commonly used measure of inflation and does not represent an investment
return. It is not possible to invest directly in an index.
5
<PAGE>
EVERGREEN
Municipal Bond Fund
Portfolio Manager Interview
How did the Fund perform?
The Evergreen Municipal Bond Fund's Class B shares had a total return, before
deduction of any applicable sales charges, of -5.04% for the six-month period
ended November 30, 1999. During the same period, the Lehman Brothers Municipal
Bond Index had a return of -1.86%, while the average performance of general
municipal bond funds was -3.57%, according to Lipper, Inc., an independent
monitor of mutual fund performance. You can find more performance information
for all share classes on the preceding page.
Portfolio
Characteristics
---------------
(as of 11/30/1999)
Total Net Assets: $1,035,200,450
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Average Credit Quality: AA
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Average Maturity: 18.02 years
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Average Duration: 8.88 years
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What factors affected the Fund's performance?
Investors in municipal securities faced a challenging environment during most of
1999. Interest rates rose amid concerns about overly strong economic growth and
the possibility of an increase in inflation. On January 1, 1999, the yield on
the 30-year Treasury Bond, for example, was 5.08%. It rose to 6.34% by November
30. In the municipal market, the yield on the Bond Buyer 40 Index rose from
5.17% to 6.11% during the same period. Because interest rates and bond prices
tend to move in opposite directions, the overall effect was a loss in value for
most types of bonds, including municipal bonds. In a rising interest rate
environment, a portfolio with a longer duration--a measure of sensitivity to
interest rate changes--will tend to be more adversely affected than a portfolio
with a shorter duration.
At the start of the period, your Fund's duration was somewhat higher than the
average duration of funds in the Lipper general municipal debt objective, so the
rising interest rates particularly hurt the Fund's performance. As rates rose,
the portfolio experienced an automatic increase in duration. In addition, the
Fund's holdings in the health care and industrial development revenue sectors
lagged in performance. Health care bonds performed poorly as hospital balance
sheets deteriorated due to legislated decreases in Medicare and Medicaid
reimbursements, while the bonds of corporate issuers in general performed poorly
because of heavy new issuance.
6
<PAGE>
EVERGREEN
Municipal Bond Fund
Portfolio Manager Interview
A consistent theme in the bond market throughout the year has been the worry
that strong growth in the domestic economy could lead to inflation and prompt
the Federal Reserve Board to raise short-term rates as a pre-emptive act. While
evidence of inflation is scant, the fear of potential inflation did prompt the
Federal Reserve Board to raise rates three times during the year, reversing the
three rate reductions in 1998.
In this generally difficult environment, it has been a challenge to trade bonds
in the municipal bond market. Bond dealers have been less willing to buy bonds
at price levels consistent with our view of the underlying value of the
securities.
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PORTFOLIO COMPOSITION
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(based on 11/30/1999 net assets)
[PIE CHART]
Hospitals/Health Care Facilities -- 18.7%
Industrial Development/Pollution Control -- 13.2%
Housing -- 12.9%
Other Investments & other asset liabilities, net -- 11.1%
Water & Sewer -- 9.3%
General Obligation-Local -- 7.9%
Electric Power -- 6.5%
Airports -- 5.9%
Transportation -- 5.8%
General Obligation-Local -- 5.4%
Special Revenue -- 3.3%
What were your principal strategies during the period?
Throughout the period, we continued to work to build stability in the portfolio
while focusing on yield. We believe this is the best way to achieve superior,
long-term performance.
As interest rates rose and bond prices fell, we faced the challenge of dealing
with a portfolio that was automatically lengthening in duration--a measure of
sensitivity to interest rate changes--if we did not take any actions. We
shortened the duration, primarily by selling securities of longer duration and
longer maturity. At the end of the period, on November 30, 1999, the average
maturity of bonds in the portfolio was 18.02 years and the effective duration
was 8.88 years.
To gain added stability and reduce duration, we also reduced Fund holdings in
single-family housing and hospital-related securities. During the six months,
the Fund's investments in hospital bonds declined from 17.1% to 15.2%, while
investments in single-family housing bonds declined from 13.3% to 12.1% of net
assets.
At the same time, we continued to emphasize yield, working to lock in the higher
yields that were available in the market. Despite a disappointing total return,
our yield-oriented strategy has allowed us to keep the income distributed to
shareholders well above average for similar funds in the Lipper objective.
7
<PAGE>
EVERGREEN
Municipal Bond Fund
Portfolio Manager Interview
We continued to maintain a high quality portfolio, with the average credit
quality remaining at AA, as measured by the Standard & Poor's rating system.
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PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on 11/30/1999 portfolio assets)
[PIE CHART]
AAA -- 57.0%
AA -- 12.8%
A -- 9.5%
BBB -- 15.2%
BB -- 2.2%
NR -- 3.3%
What is your outlook for municipal bond investing?
Despite some near-term uncertainty about the direction of interest rate changes,
there are many reasons to have an optimistic view about the municipal bond
market. As an asset class, municipal bonds offer exceptional value in the
market. The recent 5.9% yield for AAA-rated municipal bonds, for example,
translates into a tax-equivalent yield of 9.22% for investors in the 36% federal
income tax bracket. That means that on an after-tax basis, investors in
municipal bonds are receiving substantially more income than they could receive
from equivalently rated taxable bonds.
Moreover, the U.S. economy is fundamentally strong and growing, and increasing
tax revenues have tended to keep municipalities financially sound, with no
deterioration in the general credit-worthiness of the public sector. The
exception to this rule is the hospital sector, where government and private
insurance reimbursements have made it difficult to forecast revenues.
In this environment, we will continue to try to build attractive yield and
stability in the portfolio. With today's high interest rates and higher yields,
we believe municipal bonds offer excellent investment value over the long term.
8
<PAGE>
EVERGREEN
Short-Intermediate Municipal Fund
Fund at a Glance as of November 30, 1999
While we emphasize income and price stability,we believe that over the longer
time horizon,the greater stability will contribute to better total return
numbers.
Portfolio
Management
- ----------------------
[PHOTO]
Diane Beaver
Tenure:September 1998
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CURRENT INVESTMENT 1
- --------------------------------------------------------------------------------
[STYLE BOX]
Morningstar's Style Box is based on a portfolio date as of 11/30/1999.
The Fixed-Income Style Box placement is based on a fund's average effective
maturity or duration and the average credit rating of the bond portfolio.
1 Source: 1999 Morningstar, Inc.
2 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. Historical performance for Class A and B,
prior to their inception, reflects that of Class Y, the original class offered.
These historical returns for Classes Aand B have not been adjusted to reflect
the effect of each class' 12b-1 fees. These fees for Class A are 0.10% and for
Class B are 1.00%. Class Y does not pay a 12b-1 fee. If these fees had been
reflected, returns would have been lower. The investment return and principal
value will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than original cost.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURN 2
- --------------------------------------------------------------------------------
Portfolio Inception Date: 11/18/1991 Class A Class B Class Y
Class Inception Date 1/5/1995 1/5/1995 7/17/1991
- --------------------------------------------------------------------------------
Average Annual Returns*
- --------------------------------------------------------------------------------
6 month with sales charge -3.16% -5.22% n/a
- --------------------------------------------------------------------------------
6 month w/o sales charge 0.10% -0.35% 0.15%
- --------------------------------------------------------------------------------
1 year with sales charge -1.91% -4.38% n/a
- --------------------------------------------------------------------------------
1 year w/o sales charge 1.36% 0.46% 1.47%
- --------------------------------------------------------------------------------
3 years 2.25% 1.56% 3.52%
- --------------------------------------------------------------------------------
5 years 3.53% 2.97% 4.31%
- --------------------------------------------------------------------------------
Since Portfolio Inception 4.04% 3.92% 4.54%
- --------------------------------------------------------------------------------
Maximum Sales Charge 3.75% 5.00% n/a
- --------------------------------------------------------------------------------
30-day SEC Yield 4.20% 3.44% 4.44%
- --------------------------------------------------------------------------------
Taxable Equivalent Yield** 6.95% 5.70% 7.35%
- --------------------------------------------------------------------------------
6 month dividends per share $ 0.20 $ 0.16 $ 0.21
- --------------------------------------------------------------------------------
6 month capital gaindistribution
per share $ 0.07 $ 0.07 $ 0.07
- --------------------------------------------------------------------------------
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
[LINE GRAPH]
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
CLASS A CPI LB3YMBI
11/30/91 9,673 10,000 10,000
11/30/92 10,462 10,305 10,791
11/30/93 11,142 10,581 11,411
11/30/94 11,107 10,864 11,560
11/30/95 11,895 11,147 12,588
11/30/96 12,363 11,509 13,193
11/30/97 12,818 11,720 13,830
11/30/98 13,475 11,901 14,613
11/30/99 13,659 12,228 14,963
Comparison of a $10,000 investment in Evergreen Short Intermediate Municipal
Fund, Class A, versus a similar investment in the Lehman Brothers 3 Year
Municipal Bond Index (LB3YMBI) and the Consumer Price Index (CPI).
The LB3YMBI is an unmanaged index and does not include transaction costs
associated with buying and selling securities nor any management fees. The CPI
is a commonly used measure of inflation and does not represent an investment
return. It is not possible to invest directly in an index.
9
<PAGE>
EVERGREEN
Short-Intermediate Municipal Fund
Portfolio Manager Interview
How did the Fund perform?
For the six-month period ended November 30, 1999, the Evergreen Short-
Intermediate Municipal Fund Class A shares had a total return of 0.10%, before
deduction of any applicable sales charges. During the same period, the average
return of short-intermediate municipal bond funds was -0.12%, according to
Lipper Inc., an independent monitor of mutual fund performance. The Lehman
Brothers 3-Year Municipal Bond Index had a return of 0.85%. You can find more
performance information for all share classes on the preceding page.
Portfolio
Characteristics
---------------
(as of 11/30/1999)
Total Net Assets: $162,452,541
- -------------------------------------------------------------------------------
Average Credit Quality: A
- -------------------------------------------------------------------------------
Average Maturity: 5.13 years
- -------------------------------------------------------------------------------
Average Duration: 2.75 years
- -------------------------------------------------------------------------------
What was the investment environment like for the Fund during the six months?
Interest rates generally rose throughout the period and bond prices fell. The
rate increases were more extreme, and the price losses tended to be greatest,
among longer-maturity bonds than among the short-to-intermediate term bonds in
which the Fund invests. During the period, the U.S. Federal Reserve Board raised
short-term rates three times in an effort to restrain economic growth and pre-
empt inflationary pressures.
At the same time that the bond market was hurt by interest rate increases, the
stock market continued to enjoy a sustained boom. The persistent strong
performance of the stock market, combined with falling bond prices, tended to
discourage investments in municipal bonds, and this lack of demand also
contributed to the interest rate increases.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on 11/30/1999 net assets)
[PIE CHART]
Hospitals -- 16.0%
Education -- 13.1%
Other Investments and Other Assets and Liabilities, net -- 12.6%
Industrial Development/Pollution Control -- 12.5%
Housing -- 10.4%
General Obligation -- 8.0%
Special Revenue -- 6.3%
Public Facilities -- 5.8%
Transportation -- 4.6%
Sales Tax -- 4.1%
Community Development -- 3.6%
Utilities -- 3.0%
What were your principal strategies during the period?
We maintained the formal policy we implemented early in 1999 to focus on yield
and price stability, rather than total return. We adopted this policy with a
long-term view of aligning our strategy with the goals of shareholders, who
invest principally for income. However, in a challenging period of rising
interest rates and declining prices, this policy had the added benefit of
helping the Fund, with its greater price stability, outperform most of its
competitors during the period.
10
<PAGE>
EVERGREEN
Short-Intermediate Municipal Fund
Portfolio Manager Interview
Early in 1999, we changed our emphasis because of our realization that most
individuals invested in municipal bond funds for the yield and income. We
decided we would not try to anticipate changes in interest rates and alternately
lengthen or shorten duration to maximize short-term total return. While we
emphasize income and price stability, we believe that over the longer time
horizon, the greater stability will contribute to better total return numbers.
Because we focused on yield, we also invested in some higher-coupon, lower-rated
bonds that are not as sensitive to interest rate changes as higher-rated bonds.
The lower-rated bonds tend to be more sensitive to the financial fundamentals of
the underlying issuer than they are to interest rate changes. Their price
fluctuations in response to interest rate changes normally are not as extreme as
the price changes of higher-rated bonds.
During the period, the Fund's sensitivity to interest rates--as measured by
duration--was reduced slightly, from 3.13 years to 2.75 years. While we did not
deliberately set out to raise the overall credit quality of the portfolio, our
search for relative value in the market led us to invest in securities that
resulted in an average credit quality of A. We also tended to avoid sectors with
increasing uncertainty, most notably the hospital sector, where factors such as
the balanced budget amendment and changes in Medicare reimbursement procedures
have raised concerns about future revenues.
- -------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on 11/30/1999 portfolio assets)
[PIE CHART]
AAA -- 23.2%
AA -- 14.7%
A -- 25.5%
BBB -- 21.9%
NR -- 14.7%
What is your investment outlook?
We think interest rates should be more stable during the next six months,
although rates may trend upward early in the period. This should be an
environment in which our strategies do well. At a time when municipal securities
offer relatively high after tax yields, compared to taxable bonds, we believe
municipal bonds can be an attractive place for many investors interested in
current income, particularly on an after-tax basis. We will continue to
emphasize a relatively stable net asset value and as high or competitive a yield
as is prudent. We believe this strategy should position the Fund to continue to
perform well.
11
<PAGE>
EVERGREEN
High Grade Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended May 31, Year Ended August 31, Year Ended
November 30, 1999 ------------------------- ---------------------- December 31,
(unaudited) 1999 1998 1997(a) 1996 1995 (b) 1994
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 11.01 $ 11.36 $ 10.89 $ 10.72 $ 10.69 $ 9.79 $ 11.16
------- ------- ------- ------- ---------- ---------- -------
Income from investment
operations
Net investment income 0.24 0.48 0.47 0.37 0.52 0.34 0.52
Net realized and
unrealized gains or
losses on securities
and futures contracts (0.71) (0.08) 0.48 0.17 0.03 0.90 (1.37)
------- ------- ------- ------- ---------- ---------- -------
Total from investment
operations (0.47) 0.40 0.95 0.54 0.55 1.24 (0.85)
------- ------- ------- ------- ---------- ---------- -------
Distributions to
shareholders from
Net investment income (0.24) (0.48) (0.48) (0.37) (0.52) (0.34) (0.52)
Net realized gains (0.15) (0.27) 0 0 0 0 0
------- ------- ------- ------- ---------- ---------- -------
Total distributions to
shareholders (0.39) (0.75) (0.48) (0.37) (0.52) (0.34) (0.52)
------- ------- ------- ------- ---------- ---------- -------
Net asset value, end of
period $ 10.15 $ 11.01 $ 11.36 $ 10.89 $ 10.72 $ 10.69 $ 9.79
------- ------- ------- ------- ---------- ---------- -------
Total return* (4.30%) 3.62% 8.88% 5.13% 5.21% 12.83% (7.71%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $60,166 $63,018 $64,526 $45,814 $ 50,569 $ 58,751 $57,676
Ratios to average net
assets
Expenses** 0.94%+ 0.95% 1.09% 1.11%+ 1.09% 1.09%+ 1.02%
Net investment income 4.51%+ 4.26% 4.25% 4.60%+ 4.78% 4.93%+ 5.04%
Portfolio turnover rate 69% 79% 127% 114% 65% 27% 53%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended May 31, Year Ended August 31, Year Ended
November 30, 1999 ------------------------- ---------------------- December 31,
(unaudited) 1999 1998 1997 (a) 1996 1995 (b) 1994
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 11.01 $ 11.36 $ 10.89 $ 10.72 $ 10.69 $ 9.79 $ 11.16
------- ------- ------- ------- ---------- ---------- -------
Income from investment
operations
Net investment income 0.20 0.40 0.39 0.31 0.44 0.29 0.46
Net realized and
unrealized gains or
losses on securities
and futures contracts (0.71) (0.08) 0.48 0.17 0.03 0.90 (1.37)
------- ------- ------- ------- ---------- ---------- -------
Total from investment
operations (0.51) 0.32 0.87 0.48 0.47 1.19 (0.91)
------- ------- ------- ------- ---------- ---------- -------
Distributions to
shareholders from
Net investment income (0.20) (0.40) (0.40) (0.31) (0.44) (0.29) (0.46)
Net realized gains (0.15) (0.27) 0 0 0 0 0.00
------- ------- ------- ------- ---------- ---------- -------
Total distributions to
shareholders (0.35) (0.67) (0.40) (0.31) (0.44) (0.29) (0.46)
------- ------- ------- ------- ---------- ---------- -------
Net asset value, end of
period $ 10.15 $ 11.01 $ 11.36 $ 10.89 $ 10.72 $ 10.69 $ 9.79
------- ------- ------- ------- ---------- ---------- -------
Total return* (4.66%) 2.85% 8.07% 4.55% 4.42% 12.27% (8.24%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $49,083 $32,088 $32,822 $31,874 $ 32,221 $ 34,206 $32,435
Ratios to average net
assets
Expenses** 1.69%+ 1.70% 1.84% 1.86%+ 1.84% 1.84%+ 1.59%
Net investment income 3.80%+ 3.52% 3.51% 3.85%+ 4.03% 4.18%+ 4.47%
Portfolio turnover rate 69% 79% 127% 114% 65% 27% 53%
</TABLE>
* Excluding applicable sales charges.
** The ratio of expenses to average net assets excludes fee credits but in-
cludes fee waivers.
+ Annualized.
(a) For the nine months ended May 31, 1997. The Fund changed its fiscal year
end from August 31 to May 31, effective May 31, 1997.
(b) For the eight months ended August 31, 1995. The Fund changed its fiscal
year end from December 31 to August 31, effective August 31, 1995.
See Combined Notes to Financial Statements.
12
<PAGE>
EVERGREEN
High Grade Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended
November 30, 1999 Period Ended
(unaudited) May 31, 1999 (c)
<S> <C> <C>
CLASS C SHARES
Net asset value, beginning of period $11.01 $11.14
------ ------
Income from investment operations
Net investment income 0.20 0.03#
Net realized and unrealized gains or
losses on securities and futures
contracts (0.71) (0.13)
------ ------
Total from investment operations (0.51) (0.10)
------ ------
Distributions to shareholders from
Net investment income (0.20) (0.03)
Net realized gains (0.15) 0
------ ------
Total distributions to shareholders (0.35) (0.03)
------ ------
Net asset value, end of period $10.15 $11.01
------ ------
Total return* (4.66%) (0.86%)
Ratios and supplemental data
Net assets, end of period (thousands) $1,952 $ 1
Ratios to average net assets
Expenses** 1.70%+ 1.66%+
Net investment income 3.87%+ 3.71%+
Portfolio turnover rate 69% 79%
</TABLE>
<TABLE>
<CAPTION>
Year Ended
Six Months Ended Year Ended May 31, August 31,
November 30, 1999 -------------------------- -----------------
(unaudited) 1999 1998 1997 (a) 1996 1995 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $ 11.01 $ 11.36 $ 10.89 $ 10.72 $ 10.69 $ 9.79
------- ------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.25 0.51 0.51 0.39 0.55 0.36
Net realized and
unrealized gains or
losses on securities
and futures contracts (0.71) (0.08) 0.47 0.17 0.03 0.90
------- ------- ------- ------- ------- -------
Total from investment
operations (0.46) 0.43 0.98 0.56 0.58 1.26
------- ------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.25) (0.51) (0.51) (0.39) (0.55) (0.36)
Net realized gains (0.15) 0 0 0 0 0
------- ------- ------- ------- ------- -------
Total distributions to
shareholders (0.40) (0.78) (0.51) (0.39) (0.55) (0.36)
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 10.15 $ 11.01 $ 11.36 $ 10.89 $ 10.72 $ 10.69
------- ------- ------- ------- ------- -------
Total return (4.18%) 3.88% 9.15% 5.32% 5.47% 13.02%
Ratios and supplemental
data
Net assets, end of
period (thousands) $22,254 $22,264 $24,976 $24,441 $25,112 $25,079
Ratios to average net
assets
Expenses** 0.69%+ 0.70% 0.84% 0.86%+ 0.84% 0.84%+
Net investment income 4.76%+ 4.51% 4.51% 4.85%+ 5.03% 5.18%+
Portfolio turnover rate 69% 79% 127% 114% 65% 27%
</TABLE>
* Excluding applicable sales charges.
** The ratio of expenses to average net assets excludes fee credits but in-
cludes fee waivers.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
(a) For the nine months ended May 31, 1997. The Fund changed its fiscal year
end from August 31 to May 31, effective May 31, 1997.
(b) For the eight months ended August 31, 1995. The Fund changed its fiscal
year end from December 31 to August 31, effective August 31, 1995.
(c) For the period from April 30, 1999 (commencement of class operations) to
May 31, 1999.
See Combined Notes to Financial Statements.
13
<PAGE>
EVERGREEN
Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended May 31,
November 30, 1999 ----------------------
(unaudited) 1999 1998 (b)
<S> <C> <C> <C>
CLASS A SHARES
Net asset value, beginning of
period $ 7.48 $ 7.78 $ 7.91
-------- ---------- ----------
Income from investment operations
Net investment income 0.17 0.34# 0.13#
Net realized and unrealized gains
or losses on securities and
futures contracts (0.52) (0.07) (0.13)
-------- ---------- ----------
Total from investment operations (0.35) 0.27 0
-------- ---------- ----------
Distributions to shareholders from
Net investment income (0.17) (0.34) (0.13)
Net realized gains (0.04) (0.23) 0
-------- ---------- ----------
Total distributions to
shareholders (0.21) (0.57) (0.13)
-------- ---------- ----------
Net asset value, end of period $ 6.92 $ 7.48 $ 7.78
-------- ---------- ----------
Total return* (4.68%) 3.64% 0.04%
Ratios and supplemental data
Net assets, end of period
(thousands) $944,818 $1,099,718 $1,243,327
Ratios to average net assets
Expenses** 0.88%+ 0.85% 0.93%+
Net investment income 4.87%+ 4.49% 4.69%+
Portfolio turnover rate 35% 90% 77%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended May 31, Year Ended December 31,
November 30, 1999 ------------------ ----------------------------------
(unaudited) 1999 1998 (a) 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 7.48 $ 7.78 $ 7.82 $ 7.71 $ 7.86 $ 7.10
------- ------- -------- ---------- ---------- ----------
Income from investment
operations
Net investment income 0.15 0.29# 0.12# 0.38 0.41 0.41
Net realized and
unrealized gains or
losses on securities
and futures contracts (0.52) (0.07) (0.03) 0.23 (0.17) 0.74
------- ------- -------- ---------- ---------- ----------
Total from investment
operations (0.37) 0.22 0.09 0.61 0.24 1.15
------- ------- -------- ---------- ---------- ----------
Distributions to
shareholders from
Net investment income (0.15) (0.29) (0.13) (0.40) (0.39) (0.39)
Net realized gains (0.04) (0.23) 0 (0.10) 0 0
------- ------- -------- ---------- ---------- ----------
Total distributions to
shareholders (0.19) (0.52) (0.13) (0.50) (0.39) (0.39)
------- ------- -------- ---------- ---------- ----------
Net asset value, end of
period $ 6.92 $ 7.48 $ 7.78 $ 7.82 $ 7.71 $ 7.86
------- ------- -------- ---------- ---------- ----------
Total return* (5.04%) 2.86% 1.15% 8.15% 3.15% 16.61%
Ratios and supplemental
data
Net assets, end of
period (thousands) $82,695 $78,169 $124,664 $1,375,730 $1,557,886 $1,204,468
Ratios to average net
assets
Expenses** 1.63%+ 1.60% 1.26%+ 0.96% 0.87% 0.95%
Net investment income 4.14%+ 3.74% 4.32%+ 4.97% 5.34% 5.41%
Portfolio turnover rate 35% 90% 77% 126% 69% 56%
</TABLE>
* Excluding applicable sales charges.
** The ratio of expenses to average net assets excludes fee credits but in-
cludes fee waivers.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
(a) For the five months ended May 31, 1998. The Fund changed its fiscal year
end from December 31 to May 31, effective May 31, 1998.
(b) For the period from January 20, 1998 (commencement of class operations) to
May 31, 1998.
See Combined Notes to Financial Statements.
14
<PAGE>
EVERGREEN
Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended May 31,
November 30, 1999 ------------------
(unaudited) 1999 1998 (a)
<S> <C> <C> <C>
CLASS C SHARES
Net asset value, beginning of period $ 7.48 $ 7.78 $ 7.85
------ ------ ------
Income from investment operations
Net investment income 0.15 0.29# 0.11#
Net realized and unrealized gains or
losses on securities and futures
contracts (0.52) (0.07) (0.07)
------ ------ ------
Total from investment operations (0.37) 0.22 0.04
------ ------ ------
Distributions to shareholders from
Net investment income (0.15) (0.29) (0.11)
Net realized gains (0.04) (0.23) 0
------ ------ ------
Total distributions to shareholders (0.19) (0.52) (0.11)
------ ------ ------
Net asset value, end of period $ 6.92 $ 7.48 $ 7.78
------ ------ ------
Total return* (5.04%) 2.87% 0.46%
Ratios and supplemental data
Net assets, end of period (thousands) $7,541 $6,899 $7,708
Ratios to average net assets
Expenses** 1.63%+ 1.60% 1.68%+
Net investment income 4.14%+ 3.75% 3.94%+
Portfolio turnover rate 35% 90% 77%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
November 30, 1999 Year Ended
(unaudited) May 31, 1999 (b)
<S> <C> <C>
CLASS Y SHARES
Net asset value, beginning of period $ 7.48 $ 7.57
------ ------
Income from investment operations
Net investment income 0.22 0.04#
Net realized and unrealized gains or
losses on securities and futures
contracts (0.56) (0.10)
------ ------
Total from investment operations (0.34) (0.06)
------ ------
Distributions to shareholders from
Net investment income (0.18) (0.03)
Net realized gains (0.04) 0
------ ------
Total distributions to shareholders (0.22) (0.03)
------ ------
Net asset value, end of period $ 6.92 $ 7.48
------ ------
Total return (4.56%) (0.79%)
Ratios and supplemental data
Net assets, end of period (thousands) $ 146 $ 1
Ratios to average net assets
Expenses** 0.64%+ 0.52%+
Net investment income 5.22%+ 5.44%+
Portfolio turnover rate 35% 90%
</TABLE>
* Excluding applicable sales charges.
** The ratio of expenses to average net assets excludes fee credits but in-
cludes fee waivers.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
(a) For the period from January 26, 1998 (commencement of class operations) to
May 31, 1998.
(b) For the period from April 30, 1999 (commencement of class operations) to
May 31, 1999.
See Combined Notes to Financial Statements.
15
<PAGE>
EVERGREEN
Short Intermediate Municipal Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended May 31, Year Ended August 31,
November 30, 1999 ------------------------ -------------------------
(unaudited) 1999 1998 1997 (a) 1996 1995 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $10.12 $10.19 $10.09 $10.08 $ 10.17 $ 9.97
------ ------ ------ ------ ----------- ----------
Income from investment
operations
Net investment income 0.20 0.40 0.41 0.30 0.43 0.30
Net realized and
unrealized gains or
losses on securities (0.19) 0.01 0.10 0.01 (0.09) 0.20
------ ------ ------ ------ ----------- ----------
Total from investment
operations 0.01 0.41 0.51 0.31 0.34 0.50
------ ------ ------ ------ ----------- ----------
Distributions to
shareholders from
Net investment income (0.20) (0.40) (0.41) (0.30) (0.43) (0.30)
Net realized gains (0.07) (0.08) 0 0 0 0
------ ------ ------ ------ ----------- ----------
Total distributions to
shareholders (0.27) (0.48) (0.41) (0.30) (0.43) (0.30)
------ ------ ------ ------ ----------- ----------
Net asset value, end of
period $ 9.86 $10.12 $10.19 $10.09 $ 10.08 $ 10.17
------ ------ ------ ------ ----------- ----------
Total return* 0.10% 4.09% 5.11% 3.08% 3.37% 5.09%
Ratios and supplemental
data
Net assets, end of
period (thousands) $8,367 $7,975 $6,569 $6,072 $ 27,722 $ 6,820
Ratios to average net
assets
Expenses** 0.72%+ 0.75% 0.85% 0.96%+ 1.11% 1.14%+
Net investment income 4.03%+ 3.93% 4.01% 3.94%+ 4.05% 4.32%+
Portfolio turnover rate 7% 65% 78% 34% 29% 80%
<CAPTION>
Six Months Ended Year Ended May 31, Year Ended August 31,
November 30, 1999 ------------------------ -------------------------
(unaudited) 1999 1998 1997 (a) 1996 1995 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $10.12 $10.19 $10.10 $10.08 $ 10.17 $ 9.97
------ ------ ------ ------ ----------- ----------
Income from investment
operations
Net investment income 0.16 0.31 0.32 0.23 0.34 0.24
Net realized and
unrealized gains or
losses on securities (0.19) 0.01 0.09 0.02 (0.09) 0.20
------ ------ ------ ------ ----------- ----------
Total from investment
operations (0.03) 0.32 0.41 0.25 0.25 0.44
------ ------ ------ ------ ----------- ----------
Distributions to
shareholders from
Net investment income (0.16) (0.31) (0.32) (0.23) (0.34) (0.24)
Net realized gains (0.07) (0.08) 0 0 0 0
------ ------ ------ ------ ----------- ----------
Total distributions to
shareholders (0.23) (0.39) (0.32) (0.23) (0.34) (0.24)
------ ------ ------ ------ ----------- ----------
Net asset value, end of
period $ 9.86 $10.12 $10.19 $10.10 $ 10.08 $ 10.17
------ ------ ------ ------ ----------- ----------
Total return* (0.35%) 3.16% 4.07% 2.49% 2.44% 4.50%
Ratios and supplemental
data
Net assets, end of
period (thousands) $5,844 $6,232 $5,790 $6,742 $ 7,413 $ 6,050
Ratios to average net
assets
Expenses** 1.61%+ 1.65% 1.74% 1.86%+ 2.07% 2.26%+
Net investment income 3.13%+ 3.04% 3.11% 3.04%+ 3.28% 3.50%+
Portfolio turnover rate 7% 65% 78% 34% 29% 80%
</TABLE>
* Excluding applicable sales charges.
** The ratio of expenses to average net assets excludes fee credits but in-
cludes fee waivers.
+ Annualized.
(a) For the nine months ended May 31, 1997. The Fund changed its fiscal year
end from August 31 to May 31, effective May 31, 1997.
(b) For the period from January 5, 1995 (commencement of class operations) to
August 31, 1995.
See Combined Notes to Financial Statements.
16
<PAGE>
EVERGREEN
Short Intermediate Municipal Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended
Six Months Ended Year Ended May 31, August 31,
November 30, 1999 ---------------------------- ----------------
(unaudited) 1999 1998 1997 (a) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $ 10.12 $ 10.19 $ 10.10 $ 10.07 $ 10.17 $ 10.21
-------- -------- -------- ------- ------- -------
Income from investment
operations
Net investment income 0.21 0.41 0.42 0.30 0.43 0.46
Net realized and
unrealized gains or
losses on securities (0.19) 0.01 0.09 0.03 (0.10) (0.04)
-------- -------- -------- ------- ------- -------
Total from investment
operations 0.02 0.42 0.51 0.33 0.33 0.42
-------- -------- -------- ------- ------- -------
Distributions to
shareholders from
Net investment income (0.21) (0.41) (0.42) (0.30) (0.43) (0.46)
Net realized gains (0.07) (0.08) 0 0 0 0
-------- -------- -------- ------- ------- -------
Total distributions to
shareholders (0.28) (0.49) (0.42) (0.30) (0.43) (0.46)
-------- -------- -------- ------- ------- -------
Net asset value, end of
period $ 9.86 $ 10.12 $ 10.19 $ 10.10 $ 10.07 $ 10.17
-------- -------- -------- ------- ------- -------
Total return 0.15% 4.20% 5.11% 3.36% 3.30% 4.20%
Ratios and supplemental
data
Net assets, end of
period (thousands) $148,242 $160,325 $167,905 $32,293 $34,893 $40,581
Ratios to average net
assets
Expenses* 0.62%+ 0.65% 0.70% 0.86%+ 0.90% 0.86%
Net investment income 4.12%+ 4.04% 4.18% 4.04%+ 4.27% 4.52%
Portfolio turnover rate 7% 65% 78% 34% 29% 80%
</TABLE>
* The ratio of expenses to average net assets excludes fee credits but in-
cludes fee waivers.
+ Annualized.
(a) For the nine months ended May 31, 1997. The Fund changed its fiscal year
end from August 31 to May 31, effective May 31, 1997.
See Combined Notes to Financial Statements.
17
<PAGE>
EVERGREEN
High Grade Municipal Bond Fund
Schedule of Investments
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 94.9%
Alaska - 0.7%
$1,000,000 Alaska Student Loan Corp.
Student Loan RB, Ser. A,
5.45%, 7/1/2016, (AMBAC)........................... $ 939,260
------------
California - 15.4%
500,000 Abag Fin. Auth. Non Profit
Corp., CA COP, Rhoda Haas
Goldman Plaza Proj.,
5.125%, 5/15/2015,
(CA Mtge. Ins.).................................... 462,475
1,000,000 Alameda, CA Hsg. Auth. MHRRB,
Ser. A,
5.35%, 2/20/2031, (GNMA)........................... 884,430
500,000 Bakersfield, CA COP, Convention Ctr.
Expansion Proj.,
5.80%, 4/1/2017, (MBIA)............................ 502,580
2,200,000 California Edl. Facs. Auth. RB,
Santa Clara Univ.,
0.00%, 9/1/2014,
(Eff. Yield 4.90%) (AMBAC) (a)..................... 962,874
470,000 California HFA Home Mtge. RB, Ser. L,
6.40%, 8/1/2027, (MBIA)............................ 478,700
1,000,000 California HFA MHRB, Ser. B,
6.05%, 8/1/2016,
(AMBAC/FHA)........................................ 1,007,940
1,000,000 California HFA RB, Ser. A,
5.05%, 8/1/2017, (AMBAC)........................... 922,890
890,000 California HFA SFHRB, Ser. A-1, Cl. 3,
5.70%, 8/1/2011, (MBIA)............................ 882,444
California Hlth. Facs. Fin. Auth. RB:
500,000 Enloe Hlth. Sys., Ser. A,
5.00%, 11/15/2018, (FSA)........................... 447,995
1,000,000 Refunding, Ser. A, 5.75%, 7/1/2015................. 1,006,660
California Pub. Works Board Lease RB, CA Univ.
Proj.:
1,000,000 Refunding, Ser. A,
5.35%, 12/1/2015, (AMBAC).......................... 982,920
350,000 Ser. B,
5.50%, 6/1/2019..................................... 335,076
2,000,000 California Rural Home Mtge.
Fin. Auth. SFHRB, Mtge. Backed
Securities Program, Ser. A,
6.35%, 12/1/2029,
(GNMA/FNMA/FHLMC).................................. 2,043,380
500,000 Elk Grove, CA Unified Sch. Dist. 1,
Spl. Tax, Refunding,
6.50%, 12/1/2024, (AMBAC).......................... 547,300
1,000,000 Los Angeles Cnty., CA
Community Facs. Spl. Tax, Refunding, Dist. 3, Ser.
A, 5.50%, 9/1/2014, (FSA).......................... 1,008,170
500,000 Los Angeles, CA Community
Redev. Agcy. Tax Allocation,
Refunding, Ser. H,
6.50%, 12/1/2016, (FSA)............................ 539,195
1,000,000 Los Angeles, CA Convention & Exhibit
Ctr. Auth. RRB, Ser. A,
6.00%, 8/15/2010, (MBIA/IBC)....................... 1,082,910
1,000,000 Orange Cnty., CA Pub. Fin. Auth.
Wst. Mgmt. Sys. RRB,
5.75%, 12/1/2010................................... 1,032,940
1,000,000 Sacramento Cnty., CA Arpt. Sys. RB,
Ser. A, 6.00%, 7/1/2011, (MBIA).................... 1,049,840
800,000 San Francisco, CA Bldg. Auth. Lease
RB, San Francisco Civic Ctr.
Complex, Ser. A,
5.25%, 12/1/2016, (AMBAC).......................... 768,704
1,100,000 San Jose, CA Redev. Agcy. Tax
Allocation, Merged Area Redev. Proj.,
6.00%, 8/1/2015, (MBIA)............................ 1,160,731
300,000 Santa Ana, CA Fin. Auth. Lease RB,
Police Administration & Holding
Facs., Ser. A,
6.25%, 7/1/2015, (MBIA)............................ 324,312
1,000,000 South Orange Cnty., CA Pub. Fin. Auth.
Spl. Tax, Sr. Lien,
Ser. A, 7.00%, 9/1/2009, (MBIA).................... 1,157,810
1,000,000 Southern CA Pub. Pwr. Auth.
Transmission Proj. RRB,
0.00%, 7/1/2014,
(Eff. Yield 6.07%) (FGIC) (a)...................... 448,730
500,000 Watsonville, CA Solid Wst. RB, 5.50%, 5/15/2016,
(MBIA)............................................. 494,655
------------
20,535,661
------------
Colorado - 3.1%
1,500,000 Arapahoe Cnty., CO Capital Impt. Trust
Fund Hwy. RB, East 470 Hwy. Proj.,
6.15%, 8/31/2026, (MBIA)........................... 1,518,030
1,000,000 Colorado East 470 Pub. Hwy. Auth. RB,
Sr. Ser. A,
5.75%, 9/1/2014, (MBIA)............................ 1,026,980
3,225,000 Metropolitan Football Stadium,
CO Sales Tax RB, Ser. A,
0.00%, 1/1/2012, (Eff. Yield
5.62%)(MBIA) (a)................................... 1,644,653
------------
4,189,663
------------
District of Columbia - 2.2%
1,000,000 Dist. of Columbia GO, Refunding,
Ser. B, 5.50%, 6/1/2012, (FSA)..................... 1,000,000
2,000,000 Dist. of Columbia HFA Mtge. SFHRB,
Ser. B, 5.85%, 12/1/2018, (GNMA/FNMA).............. 1,948,140
------------
2,948,140
------------
Florida - 1.5%
1,000,000 Broward Cnty., FL Arpt. Sys. RB,
Ser. G, 5.125%, 10/1/2016.......................... 918,910
Orange Cnty., FL Hlth. Facs. Auth. RB:
705,000 Prerefunded, Ser. C, 6.25%, 10/1/2016, (MBIA)...... 756,070
295,000 Unrefunded, Ser. C, 6.25%, 10/1/2016, (MBIA)....... 315,700
------------
1,990,680
------------
Georgia - 1.8%
2,500,000 Metropolitan Atlanta Rapid Trans. Auth.,
GA Sales Tax RRB, Ser. A,
5.50%, 7/1/2016, (MBIA)............................ 2,438,825
------------
Idaho - 0.5%
615,000 Idaho Hsg. Agcy. SFHRB, Ser. C-1,
6.30%, 7/1/2011, (FHA)............................. 625,547
------------
</TABLE>
18
<PAGE>
EVERGREEN
High Grade Municipal Bond Fund
Schedule of Investments (continued)
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Illinois - 6.0%
$1,000,000 Chicago, IL Midway Arpt. RB, Ser. B,
5.625%, 1/1/2029, (MBIA)........................... $ 924,160
3,000,000 Illinois Dev. Fin. Auth. PCRRB, Edison Co. Proj.,
Ser. D, 6.75%, 3/1/2015, (AMBAC) (c)............... 3,258,300
1,000,000 Illinois Hlth. Facs. Auth. RB, Sherman
Hlth. Sys., 5.25%, 8/1/2017........................ 921,960
1,750,000 Illinois Hlth. Facs. Auth. RRB, Ser. AA,
6.50%, 6/1/2012, (MBIA)............................ 1,915,025
1,000,000 Illinois Sales Tax RRB, Ser. Q, 5.50%, 6/15/2020.... 953,280
------------
7,972,725
------------
Indiana - 1.3%
1,500,000 Lawrence Township, IN Metropolitan
Sch. Dist. RB,
6.875%, 7/5/2011, (MBIA/IBC)....................... 1,678,140
------------
Kansas - 0.8%
1,000,000 Wichita, KS Hosp. RRB, Facs. Impt.,
Ser. 11,
6.75%, 11/15/2019.................................. 1,032,280
------------
Massachusetts - 3.8%
1,805,000 Massachusetts HFA RB, Ser. C,
5.45%, 7/1/2018, (AMBAC)........................... 1,675,509
1,500,000 Massachusetts HFA SFHRB, Ser. 73,
5.90%, 12/1/2019, (FSA)............................ 1,450,485
1,000,000 Massachusetts IFA RB, Avon Assn.,
LLC, Ser. A,
5.375%, 4/1/2020, (MBIA)........................... 939,330
1,000,000 Massachusetts Port Auth. RRB, Ser. A,
5.50%, 7/1/2016, (MBIA/IBC)........................ 977,620
------------
5,042,944
------------
Michigan - 1.1%
1,500,000 Detroit, MI Wtr. Supply Sys., Sr. Lien,
Ser. A, 5.50%, 7/1/2014, (FGIC).................... 1,491,000
------------
Minnesota - 0.3%
360,000 Minnesota HFA SFHRB, Ser. H,
6.70%, 1/1/2018.................................... 370,451
------------
Missouri - 1.5%
2,000,000 Kansas City, MO Muni. Assistance
Corp. RB, Ser. B,
5.85%, 1/15/2016, (AMBAC).......................... 2,017,840
------------
New Jersey - 2.2%
1,000,000 New Jersey EDA RB, Trans. Proj.,
Ser. A,
5.25%, 5/1/2017, (FSA)............................. 948,550
New Jersey Trans. Trust Fund Auth.
RB, Ser. A:
1,000,000 5.75%, 6/15/2015................................... 1,020,620
1,000,000 5.75%, 6/15/2016................................... 1,014,930
------------
2,984,100
------------
New Mexico - 0.4%
500,000 Albuquerque, NM Arpt. RB, Ser. A,
6.35%, 7/1/2007, (AMBAC)........................... 527,665
------------
New York - 18.7%
400,000 Albany Cnty., NY GO, Pub. Impt.,
Ser. B,
5.60%, 3/15/2014, (FGIC)........................... 402,724
500,000 Buffalo, NY Muni. Wtr. Fin. Auth. RRB,
Ser. B,
5.00%, 7/1/2018, (FGIC)............................ 448,025
550,000 Hempstead, NY GO, Ser. B,
5.625%, 2/1/2015, (FGIC)........................... 551,199
100,000 Islip, NY Resources Recovery Agcy.
RB, Ser. B,
7.25%, 7/1/2011, (AMBAC)........................... 115,493
Long Island Pwr. Auth. NY Elec. Sys. RB, Ser. A:
500,000 5.00%, 12/1/2018, (FSA)............................ 446,365
500,000 5.125%, 12/1/2016, (FSA)........................... 464,330
400,000 Metropolitan Trans. Auth., NY Svcs.
Contract RB,
Ser. 7, 5.625%, 7/1/2016........................... 385,168
695,000 Nassau Cnty., NY GO, Combined Swr.
Dist., Refunding, Ser. B,
6.00%, 5/1/2014, (FGIC)............................ 727,839
600,000 New Rochelle, NY GO, Ser. B,
6.15%, 8/15/2017, (MBIA)........................... 613,476
New York Dormitory Auth. RB:
500,000 Hamilton College,
5.125%, 7/1/2015, (MBIA)........................... 471,525
300,000 Sch. Dist. Program,
5.25%, 7/1/2013, (FSA)............................. 291,477
250,000 St. Univ. Edl. Facs., Ser. A, 5.875%, 5/15/2011,
(AMBAC/TCRS)....................................... 263,983
1,000,000 New York Energy Research & Dev. Auth.
PCRB, LILCo. Proj., Ser. B,
5.15%, 3/1/2016.................................... 908,760
250,000 New York Env. Facs. Corp.
RRB, Riverbank St. Park,
5.50%, 4/1/2016, (AMBAC)........................... 244,710
1,475,000 New York HFA MHRB, Ser. B, 6.35%, 8/15/2023,
(AMBAC/HFA)........................................ 1,521,875
New York Mtge. Agcy. RB:
1,000,000 Ser. 70,
5.375%, 10/1/2017.................................. 935,150
1,000,000 Ser. 86,
5.95%, 10/1/2020................................... 974,300
250,000 New York Thruway Auth. Hwy. &
Bridge Trust Fund, Ser. A,
5.00%, 4/1/2018, (FGIC)............................ 224,975
New York Thruway Auth. Svcs.
Contract RB, Local Hwy. & Bridge:
700,000 5.75%, 4/1/2016.................................... 684,005
500,000 Ser. A-2,
5.375%, 4/1/2016, (MBIA)........................... 480,265
500,000 New York Urban Dev. Corp. RB, Higher
Ed. Technology
Grants, 6.00%, 4/1/2010, (MBIA).................... 519,770
New York Urban Dev. Corp. RRB:
500,000 Correctional Facs.,
0.00%, 1/1/2010,
(Eff. Yield 5.43%)
(AMBAC/TCRS) (a)................................... 292,700
1,000,000 Ser. A,
6.50%, 1/1/2010, (FSA)............................. 1,105,110
</TABLE>
19
<PAGE>
EVERGREEN
High Grade Municipal Bond Fund
Schedule of Investments (continued)
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New York - continued
$2,000,000 New York, NY City Edl. Construction
Fund RB, Jr. Sub.,
5.50%, 4/1/2016, (AMBAC)........................... $ 1,949,380
95,000 New York, NY City IDA RB, Japan Arls Co.,
6.00%, 11/1/2015................................... 98,823
New York, NY City Transitional Fin.
Auth. RB, Ser. A:
2,000,000 5.125%, 8/15/2021.................................. 1,784,520
1,000,000 5.25%, 11/15/2013, (FGIC/TCRS)..................... 977,740
New York, NY GO:
1,500,000 Ser. D,
5.375%, 8/1/2017, (FGIC/TCRS)...................... 1,425,210
500,000 Ser. J,
5.125%, 8/1/2014, (FGIC/TCRS)...................... 474,975
Niagara Falls, NY GO, Pub. Impt.:
500,000 7.50%, 3/1/2014, (MBIA)............................ 598,955
750,000 7.50%, 3/1/2016, (MBIA)............................ 897,082
Niagara, NY Frontier Auth. Arpt. RB:
500,000 Buffalo Niagara Int'l. Arpt.,
5.00%, 4/1/2028, (FGIC)............................ 420,920
100,000 Greater Buffalo Int'l Arpt., Ser. A,
6.125%, 4/1/2014, (AMBAC).......................... 102,411
500,000 Port Auth. NY & NJ, Ser. 97,
6.50%, 7/15/2019, (FGIC)........................... 523,080
250,000 St. Lawrence Cnty., NY Indl. Dev. Civic Fac. RB,
Saint Lawrence Univ., Ser. A,
5.625%, 7/1/2013, (MBIA)........................... 255,165
1,000,000 Suffolk Cnty., NY IDA Southwest Swr.
Sys. RB,
6.00%, 2/1/2008, (FGIC)............................ 1,060,120
1,370,000 Triborough Bridge & Tunnel Auth. NY
RRB, Ser. A,
5.25%, 1/1/2014, (FGIC)............................ 1,324,927
------------
24,966,532
------------
North Dakota - 2.3%
3,000,000 Mercer Cnty., ND PCRRB, Basin Elec.
Pwr. Proj., Refunding, Ser. 2,
6.05%, 1/1/2019, (AMBAC)........................... 3,022,110
------------
Ohio - 1.2%
1,000,000 Kings Local Sch. Dist., OH GO,
7.50%, 12/1/2016, (FGIC)........................... 1,202,920
445,000 Ohio HFA Mtge. RB, Ser. A-2,
6.625%, 3/1/2026, (GNMA)........................... 457,162
------------
1,660,082
------------
Oklahoma - 1.5%
2,000,000 Oklahoma Inds. Auth. RRB, Ser. A,
6.25%, 8/15/2015................................... 2,075,500
------------
Pennsylvania - 8.9%
1,000,000 Delaware Cnty., PA IDA RB, Wtr. Facs.,
6.00%, 6/1/2029, (FGIC)............................ 981,030
1,000,000 Lehigh Cnty., PA IDA PCRRB, PA Pwr.
& Light Co. Proj., Ser. B,
6.40%, 9/1/2029, (MBIA)............................ 1,022,600
Pennsylvania HFA SFHRB:
3,000,000 Ser. 52B,
6.25%, 10/1/2024, (FHA)............................ 3,017,100
1,565,000 Ser. 54A,
6.15%, 10/1/2022, (FHA)............................ 1,539,584
50,000 Pennsylvania Turnpike Commission RB,
Ser. F,
7.25%, 12/1/2017, (AMBAC).......................... 51,005
2,505,000 Pittsburgh, PA GO, Ser. A,
5.375% 9/1/2014, (FGIC)............................ 2,451,143
2,000,000 Pittsburgh, PA Wtr. & Swr. Auth. RB,
Ser. C,
5.00%, 9/1/2019, (FSA)............................. 1,782,920
1,000,000 York Cnty., PA Solid Wst. & Refuse Auth. RRB,
5.50%, 12/1/2012, (FGIC)........................... 1,015,800
------------
11,861,182
------------
South Carolina - 1.7%
2,300,000 Greenville Hosp. Sys., SC Hosp. Facs.
RB, Ser. A,
5.75%, 5/1/2014.................................... 2,290,961
------------
South Dakota - 0.7%
1,000,000 South Dakota Hsg. Dev. Auth. RB,
Home Ownership Mtge., Ser. G,
5.95%, 5/1/2020.................................... 974,590
------------
Tennessee - 1.4%
1,700,000 Knox Cnty., TN Hlth. Edl. & Hsg. Facs.
RRB, Fort Sanders Alliance, 6.25%, 1/1/2013,
(MBIA)............................................. 1,814,461
------------
Texas - 4.9%
1,500,000 Austin, TX Arpt. Sys. RB, Priority Lien,
Ser. A,
6.125%, 11/15/2025, (MBIA)......................... 1,495,110
1,000,000 Houston, TX Wtr. Conveyance Sys.
Contract COP, Ser. H,
7.50%, 12/15/2014, (AMBAC)......................... 1,188,020
1,000,000 Matagorda Cnty., TX Navigation Dist. 1
RRB, Reliant Energy Proj., Ser. B,
5.95%, 5/1/2030.................................... 927,410
2,000,000 San Antonio, TX Arpt. Sys. RB,
5.70%, 7/1/2011, (FGIC)............................ 2,036,020
1,000,000 Texas Dept. of Hsg. & Community
Affairs RB, Ser. A,
5.25%, 7/1/2018, (GNMA/FNMA)....................... 902,100
------------
6,548,660
------------
Utah - 3.3%
1,000,000 Salt Lake City, UT Arpt. RB, Ser. A,
6.00%, 12/1/2012, (FGIC)........................... 1,028,350
Utah HFA SFHRB:
2,700,000 Ser. A-2, Class 2,
5.35%, 7/1/2020, (FHA)............................. 2,463,642
1,000,000 Sr. Ser. E-1,
5.375%, 7/1/2018, (FHA)............................ 927,330
------------
4,419,322
------------
</TABLE>
20
<PAGE>
EVERGREEN
High Grade Municipal Bond Fund
Schedule of Investments (continued)
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Virginia - 1.1%
$1,545,000 Virginia Hsg. Dev. Auth. Cmnwlth. Mtge. RB, Ser. D-
2, 5.40%, 7/1/2021................................. $ 1,433,528
------------
Washington - 0.7%
1,000,000 Snohomish Cnty., WA Sch. Dist. 015 GO, Refunding,
5.25%, 12/1/2015, (FGIC)........................... 947,140
------------
West Virginia - 0.4%
500,000 West Virginia Hsg. Dev. Fund RB, Ser. A, 6.05%,
5/1/2027........................................... 504,425
------------
Wisconsin - 4.8%
4,500,000 Superior, WI Ltd. Obl. RRB, Midwest Energy, Ser. E,
6.90%, 8/1/2021, (FGIC)............................ 5,034,015
1,500,000 Wisconsin Trans. RB, Unrefunded, Ser. B, 5.50%,
7/1/2022........................................... 1,386,900
------------
6,420,915
------------
Puerto Rico - 0.7%
400,000 Puerto Rico Cmnwlth. Hwy. & Trans. Auth. RB, Ser. Y,
5.25%, 7/1/2015, (FSA)............................. 388,788
325,000 Puerto Rico Hsg. Bank & Fin. Agcy. SFHRB,
6.10%, 10/1/2015,
(GNMA/FNMA/FHLMC).................................. 326,511
250,000 Puerto Rico Pub. Bldgs. Auth. RB, Ser. B, 5.00%,
7/1/2012, (MBIA)................................... 245,188
------------
960,487
------------
Total Municipal Obligations (cost $127,571,012)..... 126,684,816
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
MUTUAL FUND SHARES - 1.1%
1,516,953 Federated Municipal Obligations Fund, (cost
$1,516,953)........................................ $ 1,516,953
------------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
SHORT-TERM INVESTMENTS - 4.5%
Alabama - 0.5%
$ 600,000 Stevenson, AL Indl. Dev. Board Envl. Impt. RB, Mead
Corp. Proj., Ser. B, 3.85%, 12/1/1999, (LOC: First
Natl. Bank) (b).................................... 600,000
------------
California - 4.0%
Alameda Cnty., CA IDA RB:
3,875,000 Dicon Fiberoptics Inc. Proj.,
Ser. A, 3.75%,
12/2/1999, (b)...................................... 3,875,000
1,500,000 Plyproperties Proj., Ser. A,
3.75%, 12/2/1999, (b)............................... 1,500,000
------------
5,375,000
------------
Total Short-Term Investments (cost $5,975,000)...... 5,975,000
------------
Total Investments -(cost $135,062,965)....... 100.5% 134,176,769
Other Assets and Liabilities - net........... (0.5) (722,799)
----- ------------
Net Assets................................... 100.0% $133,453,970
===== ============
</TABLE>
The Fund invests primarily in debt securities issued by municipalities. The
ability of the issuers of debt securities to meet their obligations may be af-
fected by economic developments in a specific industry or municipality. In or-
der to reduce risk associated with such economic developments, at November 30,
1999, 76.6% of the securities, as a percentage of net assets, are backed by
bond insurance of various financial institutions and financial guaranty assur-
ance agencies. At November 30, 1999, the Fund had the following portions of its
securities backed by bond insurance of the following financial institutions
representing more than 5% of net assets:
<TABLE>
<S> <C>
MBIA 22.2%
FGIC 18.9%
AMBAC 16.8%
FSA 7.4%
FHA 6.4%
</TABLE>
(a) Effective yield (calculated at the date of purchase) is the yield at which
the bond accretes on an annual basis until maturity date.
(b) Security is a variable or floating rate instrument with periodic demand
features. The Fund is entitled to full payment of principal and accrued in-
terest upon surrendering the security to the issuing agent.
(c) At November 30, 1999, 3,000,000 principal amount of this security was
pledged to cover margin requirements for open futures contracts.
21
<PAGE>
EVERGREEN
High Grade Municipal Bond Fund
Schedule of Investments (continued)
November 30, 1999 (Unaudited)
Summary of Abbreviations:
<TABLE>
<C> <S>
AMBAC Insured by American Municipal Bond Assurance Corporation
COP Certificates of Participation
EDA Economic Development Authority
FGIC Insured by Financial Guaranty Insurance Corporation
FHA Federal Housing Authority
FHLMC Guaranteed by Federal Home Loan Mortgage Corporation
FNMA Guaranteed by Federal National Mortgage Association
FSA Insured by Financial Security Assurance Corporation
GNMA Guaranteed by Government National Mortgage Association
GO General Obligation
HFA Housing Finance Authority
IBC Insured Bond Certification
IDA Industrial Development Authority
IFA Industrial Finance Agency
LILCo. Long Island Lighting Company
LOC Letter of Credit
MBIA Insured by Municipal Bond Investors Assurance Corporation
MHRB Multifamily Housing Revenue Bond
MHRRB Multifamily Housing Refunding Revenue Bond
PCRB Pollution Control Revenue Bond
PCRRB Pollution Control Refunding Revenue Bond
RB Revenue Bond
RRB Refunding Revenue Bond
SFHRB Single Family Housing Revenue Bond
TCRS Transferable Custody Receipts
</TABLE>
Futures Contracts - Short Positions
<TABLE>
<CAPTION>
Number of Initial Contract Value at Unrealized
Expiration Contracts Description Amount November 30, 1999 Loss
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December-
1999 36 Municipal Bond Index $3,915,562 $3,960,000 $44,438
</TABLE>
See Combined Notes to Financial Statements.
22
<PAGE>
EVERGREEN
Municipal Bond Fund
Schedule of Investments
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 96.0%
Alabama - 1.5%
$ 1,875,000 Alabama, HFA, SFHRB, Ser. D-1, 6.00%, 10/1/2016,
(GNMA).......................................... $ 1,900,538
655,000 Birmingham, AL, Arpt. Auth. RB, 5.625%, 7/1/2026,
(MBIA).......................................... 635,212
3,895,000 Jefferson Cnty., AL, Board of Ed. Capital Outlay,
Sch. Warrants, Ser. A,
5.80%, 2/15/2020, (FSA)......................... 3,844,482
9,900,000 Jefferson Cnty., AL, Swr. RB, Ser. A54, 7.22%,
2/15/2020, (d).................................. 9,437,868
--------------
15,818,100
--------------
Alaska - 1.8%
15,000,000 Alaska, Energy Auth., Util. RB, Linked
Bulls/Bears FRN, 6.60%, 7/1/2015, (FSA) (c)..... 16,396,950
2,000,000 Alaska, Int'l. Arpt. RB, Ser. A, 5.125%,
10/1/2015, (AMBAC).............................. 1,843,720
--------------
18,240,670
--------------
Arizona - 1.0%
850,000 Chandler, AZ, Wtr. & Swr. RB, 6.75%, 7/1/2006,
(FGIC).......................................... 889,346
6,000,000 Maricopa Cnty., AZ, Elementary Sch. Dist. 69, GO,
Ser. C, 8.125%, 1/1/2010, (MBIA)................ 7,346,880
2,030,000 Pima Cnty., AZ, Unified Sch. Dist. 1, GO,
Refunding,
7.50%, 7/1/2003, (FGIC)......................... 2,226,281
--------------
10,462,507
--------------
California - 4.3%
1,500,000 Abag, CA, Rhoda Haas Goldman Plaza, Fin. Auth.
for Non Profit Corp., COP,
5.125%, 5/15/2015,
(CA Mtge. Insured).............................. 1,399,005
1,000,000 Anaheim, CA, Pub. Fin. Auth. Lease RB, Pub. Impt.
Proj., Ser. C, 6.00%, 9/1/2016, (FSA)........... 1,053,040
2,500,000 California, GO, Veteran's Bonds, Ser. BH,
5.50%, 12/1/2018................................ 2,370,275
California, HFA RB:
12,000,000 Ser. D,
5.85%, 8/1/2017................................. 12,069,240
1,920,000 Ser. H,
6.25%, 8/1/2027, (FHA).......................... 1,935,111
California, Pub. Works Board, Lease RB:
4,925,000 CA State Univ.,
5.50%, 10/1/2014, (MBIA/IBC).................... 4,955,387
3,700,000 State Prison, Ser. E,
5.50%, 6/1/2015................................. 3,692,341
2,000,000 California, Rural Home Mtge. Fin. Auth. SFHRB,
Ser. A, 6.35%, 12/1/2029, (GNMA/FNMA/FHLMC)..... 2,065,640
1,300,000 Poway, CA, Community Facs. Dist., Spl. Tax,
Refunding, Parkway Business Ctr.,
6.75%, 8/15/2015................................ 1,347,957
2,000,000 Riverside Cnty., CA, Pub. Fin. Auth. COP,
5.75%, 5/15/2019................................ 1,896,860
200,000 San Francisco, CA, Bldg. Auth., Lease RB, San
Francisco Civic Ctr. Complex, Ser. A,
5.25%, 12/1/2016, (AMBAC)....................... 192,600
2,000,000 San Jose, CA, Redev. Agcy., Tax Allocation,
Merged Area Redev. Proj., Ser. B,
5.75%, 8/1/2011................................. 2,067,040
400,000 San Juan, CA, MSR Pub. Pwr. Agcy. RB, Ser. E,
6.75%, 7/1/2011, (MBIA)......................... 420,936
10,000,000 Southern CA, Pub. Pwr. Auth., Transmission Proj.
RB, 0.00%, 7/1/2015,
(Eff. Yield 5.93%) (FGIC) (b)................... 4,172,800
Victor Valley, CA, Joint Unified High Sch.
Dist., Capital Appreciation, GO:
3,780,000 0.00%, 9/1/2011,
(Eff. Yield 5.59%) (MBIA) (b)................... 2,037,949
4,450,000 0.00%, 9/1/2013,
(Eff. Yield 5.37%) (MBIA) (b)................... 2,102,536
625,000 Vista, CA, Community Dev. Commission, Tax
Allocation, Vista Redev. Proj. Area,
6.00%, 9/1/2010, (MBIA)......................... 674,794
--------------
44,453,511
--------------
Colorado - 6.8%
4,000,000 Arapahoe Cnty., CO, SFHRB, 0.00%, 9/1/2010,
(Eff. Yield 5.82%) (b).......................... 2,202,840
9,795,000 Colorado East 470 Pub. Hwy. Auth.
RB, Capital Appreciation, Sr. Ser. B,
0.00%, 9/1/2013,
(Eff. Yield 5.30%) (b) (MBIA)................... 4,530,089
Colorado, HFA, SFHRB:
2,275,000 Ser. A-2,
6.60%, 5/1/2028................................. 2,369,003
2,995,000 Ser. B-2,
6.40%, 11/1/2024................................ 3,090,211
Denver, CO, City & Cnty. Arpt. RB:
140,000 Prerefunded Balance, Ser. A,
8.00%, 11/15/2025............................... 149,288
865,000 Prerefunded Balance, Ser. B,
7.25%, 11/15/2012............................... 943,663
8,200,000 Ser. D,
7.75%, 11/15/2013............................... 9,614,500
Unrefunded Balance, Ser. A:
5,480,000 7.50%, 11/15/2023............................... 6,020,383
1,300,000 8.00%, 11/15/2025............................... 1,363,349
8,060,000 8.75%, 11/15/2023............................... 8,753,160
3,385,000 Unrefunded Balance, Ser. B,
7.25%, 11/15/2012............................... 3,620,021
9,700,000 Unrefunded Balance, Ser. D
7.75%, 11/15/2021............................... 10,318,860
</TABLE>
23
<PAGE>
EVERGREEN
Municipal Bond Fund
Schedule of Investments(continued)
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Colorado - continued
$ 8,000,000 Douglas Cnty., CO, Sch. Dist. 1 RB, Prerefunded,
Ser. A,
6.50%, 12/15/2016, (MBIA)....................... $ 8,732,000
El Paso Cnty., CO, GO, Sch. Dist. 11, Colorado
Springs:
2,310,000 6.50%, 12/1/2012................................ 2,545,089
2,000,000 7.10%, 12/1/2013................................ 2,313,780
1,000,000 7.10%, 12/1/2016................................ 1,147,550
2,250,000 Larimer Cnty., CO, GO, Sch. Dist. 1
7.00%, 12/15/2016, (MBIA/IBC)................... 2,550,172
--------------
70,263,958
--------------
Delaware - 0.2%
1,600,000 Delaware, Hlth. Facs. Auth. RRB,
Med. Ctr. of DE,
7.00%, 10/1/2015, (MBIA)........................ 1,747,696
--------------
District of Columbia - 1.0%
1,500,000 District of Columbia, American Assn. for the
Advancement of Science RB,
5.25%, 1/1/2016, (AMBAC)........................ 1,403,985
5,000,000 District of Columbia, GO, Refunding, Ser. B,
5.50%, 6/1/2014, (FSA).......................... 4,936,150
3,765,000 District of Columbia, Hosp. RRB, Medatlantic
Healthcare Group, Ser. A,
6.00%, 8/15/2011, (MBIA)........................ 3,978,814
--------------
10,318,949
--------------
Florida - 3.1%
4,320,000 Broward Cnty., FL, Arpt. Sys. RB, Passenger Fac.
Convertible Lien, Ser. H1,
5.25%, 10/1/2015, (AMBAC)....................... 4,097,131
435,000 Gainesville, FL, Util. Sys. RB, Ser. B, 7.50%,
10/1/2008....................................... 511,808
345,000 Hillsborough Cnty., FL, HFA, SFHRB, Ser. A,
7.30%, 4/1/2022, (GNMA)......................... 353,408
3,580,000 Jacksonville, FL, GO, Jacksonville Transit Auth.,
9.20%, 1/1/2015................................. 4,787,749
Lee Cnty., FL, IDA Hlth. Care Facs. RB:
300,000 Ser. B,
7.00%, 10/1/2011, (MBIA)........................ 317,979
Shell Point Village Proj., Ser. A:
2,500,000 5.50%, 11/15/2021............................... 2,129,575
5,900,000 5.50%, 11/15/2029............................... 4,853,222
5,000,000 North Port, FL Util. RB,
6.25%, 10/1/2022, (FGIC)........................ 5,337,000
495,000 Orange Cnty., FL, HFA SFHRB, Ser. B,
6.85%, 10/1/2027, (GNMA/FNMA)................... 510,414
2,000,000 Orange Cnty., FL, Hlth. Facs. Auth. RB, Orlando
Reg'l. Healthcare, Ser. A,
6.25%, 10/1/2018, (MBIA)........................ 2,121,040
2,960,000 Orlando-Orange Cnty., FL, Expressway Auth. RB,
Jr. Lien, 8.25%, 7/1/2015, (FGIC)............... 3,793,270
3,600,000 Palm Beach Cnty. FL, Hlth. Facs. Auth. RB, Acts
Retirement Life Communities,
5.125%, 11/15/2029.............................. 2,918,340
500,000 Tampa, FL, Allegheny Hlth. Sys. RB, St. Joseph's
Hosp.,
6.50%, 12/1/2023................................ 550,635
--------------
32,281,571
--------------
Georgia - 4.2%
5,000,000 Fulton Cnty., GA, Dev. Auth. Spl. Facs. RB, Delta
Airlines, Inc. Proj., 5.45%, 5/1/2023........... 4,361,850
Georgia, GO:
5,000,000 Refunding, Ser. E,
5.50%, 7/1/2003................................. 5,176,700
10,700,000 Ser. C,
5.25%, 4/1/2011................................. 10,826,795
7,320,000 Ser. D,
5.80%, 11/1/2002................................ 7,621,218
9,800,000 Georgia, Muni. Elec. Auth., RB, Ser. B,
6.375%, 1/1/2016................................ 10,447,094
4,255,000 Metropolitan Atlanta Rapid Transit Auth., GA,
Sales Tax RRB, Ser. P, 6.25%, 7/1/2011,
(AMBAC)......................................... 4,663,054
--------------
43,096,711
--------------
Hawaii - 0.5%
2,000,000 Hawaii, Dept. Budget & Fin. RRB, Hawaiian Elec.
Co., Ser. B, 5.75%, 12/1/2018, (AMBAC).......... 1,966,000
4,060,000 Hawaii, Hsg. Fin. & Dev. Corp. SFHRB, Ser. C,
5.35%, 7/1/2020, (FNMA)......................... 3,718,879
--------------
5,684,879
--------------
Idaho - 0.0%
465,000 Idaho, HFA, SFHRB, Sr. Ser. D1, 8.00%, 1/1/2020,
(FHA)........................................... 494,904
--------------
Illinois - 6.5%
12,000,000 Chicago, IL, Capital Appreciation GO, City
Colleges,
0.00%, 1/1/2014, (Eff. Yield 5.80%) (FGIC) (b).. 5,350,920
12,900,000 Chicago, IL, O'Hare Int'l. Arpt. RB, United Air
Lines, Inc. Proj., Ser. A, 5.35%, 9/1/2016...... 11,362,320
1,880,000 Chicago, IL, SFHRB, Ser. B,
6.95%, 9/1/2028, (GNMA/FNMA/FHLMC).............. 1,972,007
6,000,000 Cook Cnty., IL, GO, Refunding,
Ser. A,
5.625%, 11/15/2022, (MBIA)...................... 5,742,900
3,000,000 Illinois Hlth. Facs. Auth. RB, Centegra Hlth.
Sys. Proj.,
5.25%, 9/1/2024, (AMBAC)........................ 2,662,230
</TABLE>
24
<PAGE>
EVERGREEN
Municipal Bond Fund
Schedule of Investments (continued)
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Illinois - continued
$ 4,000,000 Illinois, Dev. Fin. Auth., PCRB, Edison Co.
Proj., Ser. D,
6.75%, 3/1/2015, (AMBAC)........................ $ 4,319,080
5,575,000 Illinois, Reg'l. Transport Auth. RB, Ser. A,
6.125%, 6/1/2022, (AMBAC)....................... 5,798,502
10,500,000 Illinois, Sales Tax RB, Ser. P,
6.50%, 6/15/2022................................ 11,126,010
2,965,000 Kankakee, IL, Swr. RRB,
6.875%, 5/1/2011, (FGIC)........................ 3,233,214
3,000,000 Metropolitan Fair & Exposition Auth. IL RB, Ser.
A, 5.00%, 6/1/2015, (BIG)....................... 2,762,580
5,960,000 Metropolitan Pier & Exposition Auth. IL RB,
Prerefunded,
6.50%, 6/15/2027................................ 6,441,032
4,950,000 Quincy, IL, RB, Blessing Hosp. Proj., 6.00%,
11/15/2018...................................... 4,916,587
1,760,000 Southwestern IL, Dev. Auth. RB, Anderson Hosp.
Proj., 5.625%, 8/15/2029........................ 1,511,294
--------------
67,198,676
--------------
Indiana - 1.0%
3,000,000 Goshen, IN, RB, Greencroft
Obl. Group,
5.75%, 8/15/2028................................ 2,577,630
6,800,000 Indiana, HFA, SFHRB, Ser. A3,
5.375%, 1/1/2023, (FNMA/GNMA)................... 6,224,788
1,640,000 St. Joseph Cnty., IN, Edl. Facs. RB, Univ. of
Notre Dame du Lac Proj.,
6.50%, 3/1/2026................................. 1,793,602
--------------
10,596,020
--------------
Kansas - 0.7%
2,000,000 Burlington, KS, PCRRB, KS Gas & Elec. Co. Proj.,
7.00%, 6/1/2031, (MBIA)......................... 2,101,760
1,500,000 Manhattan, KS, Hlth. Care Fac. RB,
Meadowlark Hills Retirement Proj., 6.50%,
5/15/2028....................................... 1,399,200
4,000,000 Wichita, KS, Hosp. RRB, Facs. Impt., Ser 11,
6.75%, 11/15/2019............................... 4,139,200
--------------
7,640,160
--------------
Kentucky - 0.3%
3,000,000 Carroll Cnty., KY, PCRB, KY Util. Co., Ser. A,
7.45%, 9/15/2016................................ 3,244,830
--------------
Louisiana - 1.7%
4,085,000 Jefferson Parish, LA Hosp. Dist. 2 Hosp. RB,
5.25%, 7/1/2014, (FSA)........................... 3,927,891
5,755,000 Jefferson, LA, Sales Tax Dist. RRB, Capital
Appreciation, 0.00%, 12/1/2016,
(Eff. Yield 5.52%) (FSA) (b).................... 2,142,356
Louisiana, Pub. Facs. Auth., Hosp. RB:
5,000,000 Franciscan Missionaries, Refunding, Ser. A,
5.50%, 7/1/2010................................. 5,100,250
3,000,000 Touro Infirmary Proj., Ser. A,
5.50%, 8/15/2019................................ 2,632,830
New Orleans, LA, GO, Capital Appreciation,
Refunding:
6,960,000 0.00%, 9/1/2014,
(Eff. Yield 6.05%) (AMBAC) (b)................... 3,030,245
2,800,000 0.00%, 9/1/2015,
(Eff. Yield 5.65%) (AMBAC) (b)................... 1,134,700
--------------
17,968,272
--------------
Maine - 0.4%
4,000,000 Maine, HFA Mtge. Purchase, RB, Ser. C2,
6.05%, 11/15/2028............................... 3,940,760
--------------
Massachusetts - 7.5%
305,000 Gloucester, MA, GO,
5.25%, 7/15/2015, (MBIA)........................ 293,657
250,000 Lowell, MA, GO,
5.50%, 12/15/2015, (AMBAC)...................... 248,940
Massachusetts, Dev. Fin. Agcy. RB:
3,240,000 Curry College, Ser. A,
5.50%, 3/1/2029, (ACA).......................... 2,927,145
2,000,000 Eastern Nazarine College,
5.625%, 4/1/2029................................. 1,781,340
2,500,000 New England Ctr. for Children,
5.875%, 11/1/2018................................ 2,336,300
1,240,000 Regis College,
5.25%, 10/1/2018................................. 1,105,026
2,510,000 YMCA Greater Boston Issue,
5.35%, 11/1/2019................................. 2,262,464
400,000 Massachusetts, Edl. Fin. Auth. RRB, Ser. A
4.80%, 7/1/2012, (AMBAC)......................... 375,148
Massachusetts, HFA SFHRB:
285,000 Ser. 52, 6.00%, 6/1/2014......................... 287,639
2,085,000 Ser. 73,
5.90%, 12/1/2019, (FSA).......................... 2,048,992
Massachusetts, Hlth. & Edl. Facs. Auth. RB:
5,450,000 Boston Med. Ctr., Ser. A,
5.25%, 7/1/2014, (MBIA).......................... 5,250,857
2,250,000 Cape Cod Healthcare, Ser. B,
5.45%, 11/15/2023................................ 1,940,648
5,200,000 Jordan Hosp., Ser. D,
5.25%, 10/1/2023................................. 4,362,228
3,000,000 Milford-Whitinsville Reg'l. Hosp., Ser. C,
5.25%, 7/15/2018................................. 2,499,030
700,000 Milton Hosp., Ser. B,
7.25%, 7/1/2005, (MBIA).......................... 725,368
500,000 North Adams Reg'l. Hosp., Ser. C,
6.75%, 7/1/2009.................................. 518,385
</TABLE>
25
<PAGE>
EVERGREEN
Municipal Bond Fund
Schedule of Investments (continued)
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Massachusetts - continued
Massachusetts, Hlth. & Edl. Facs.
Auth. RB - continued:
South Shore Hosp., Ser. F:
$ 1,000,000 5.625%, 7/1/2019................................ $ 934,190
4,000,000 5.75%, 7/1/2029................................. 3,736,680
2,000,000 St. Mem. Med. Ctr., Ser. A,
6.00%, 10/1/2023................................ 1,750,740
Massachusetts, IFA, RB:
5,000,000 Refunding, Ogden Haverhill Proj., Ser. A,
5.60%, 12/1/2019................................ 4,398,900
250,000 Wentworth Institute of Technology,
5.55%, 10/1/2013................................ 239,053
14,000,000 Massachusetts, Muni. Wholesale Elec. Copower
Supply Sys. RB,
5.45%, 7/1/2018, (c)............................ 13,233,640
Massachusetts, Port Auth. RB:
5,120,000 Refunding, Ser. A,
5.50%, 7/1/2014................................. 5,104,486
400,000 Spl. Facs. Bosfuel Proj.,
5.30%, 7/1/2008, (MBIA)......................... 403,548
Massachusetts, Wtr. Pollution Abatement RB:
125,000 Loan Program, Ser. A,
6.375%, 2/1/2015................................ 131,571
5,000,000 Pool Loan Proj., Ser. 3,
5.625%, 2/1/2016................................ 4,996,950
MBTA, Gen. Trans. Sys., RB:
7,950,000 Refunding, Ser. A,
6.25%, 3/1/2012.................................. 8,630,679
2,125,000 Refunding, Ser. B,
6.20%, 3/1/2016.................................. 2,234,841
1,950,000 Ser. A, 7.00%, 3/1/2021, (MBIA).................. 2,193,984
500,000 Methuen, MA GO,
5.625%, 11/15/2015, (FSA)....................... 502,950
300,000 Worcester, MA GO, Muni. Purpose Loan, Ser. A,
5.25%, 8/1/2012, (AMBAC)........................ 297,516
--------------
77,752,895
--------------
Michigan - 3.3%
3,965,000 Chelsea, MI, EDA RRB, United Methodist Retirement
Proj., 5.40%, 11/15/2027........................ 3,223,981
2,000,000 Michigan Muni. Bond Auth. RB, Drinking Wtr.
Revolving Fund,
5.50%, 10/1/2019................................ 1,925,120
10,000,000 Michigan, Hosp. Fin. Auth. RRB, Oakwood Hosp.
Obl. Group, Ser. A,
5.625%, 11/1/2018............................... 9,732,900
10,000,000 Monroe Cnty., MI EDA, Ltd. Obl. RRB, Detroit
Edison Co., 6.95%, 9/1/2022, (FGIC)............. 11,510,900
Wayne Charter Cnty., MI, Arpt. RB, Ser. A:
5,000,000 5.25%, 12/1/2014................................ 4,741,400
3,500,000 5.25%, 12/1/2018, (MBIA)........................ 3,223,430
--------------
34,357,731
--------------
Mississipi - 1.2%
1,000,000 Harrison Cnty., MS, Wst. Wtr. Treatment Mgmt.
Dist. RRB, Wst. Wtr. Treatment Facs., Ser. A,
8.50%, 2/1/2013, (FGIC)......................... 1,307,070
Mississippi, Business Fin. Corp., PCRB
Energy Resource, Inc. Proj.:
5,000,000 5.875%, 4/1/2022................................ 4,425,200
4,650,000 5.90%, 5/1/2022................................. 4,127,944
1,995,000 Mississippi, Home Corp., SFHRB, Ser. B, Class 7,
6.20%, 6/1/2030, (FNMA/GNMA).................... 2,037,095
--------------
11,897,309
--------------
Missouri - 2.4%
5,650,000 Bridgeton, MO, IDA, Sr. Hsg. RB, Sarah Community
Proj., 5.80%, 5/1/2018.......................... 5,116,244
500,000 Cape Girardeau Cnty., MO, IDA Solid Wst. Disp.
RB, Procter & Gamble Paper Prod. Proj.,
5.30%, 5/15/2028................................ 449,995
600,000 Kansas City, MO, Muni. Assistance Corp. RRB,
Leasehold, Ser. A,
5.125%, 4/15/2015, (MBIA)....................... 563,784
500,000 Missouri, COP, Psychiatric Rehab Ctr. Proj., Ser.
A, 6.00%, 11/1/2015............................. 512,190
Missouri, Env. Impt. & Energy Resource Auth.,
Wtr. PCRB:
1,000,000 Kansas City, Ser. A,
5.75%, 1/1/2016................................. 1,008,300
600,000 Ser. B, 7.20%, 7/1/2016......................... 662,178
520,000 Ser. E, 5.125%, 1/1/2019........................ 479,227
1,000,000 Missouri, Higher Ed. Student Loan RB, Sub. Ser.
F, 6.75%, 2/15/2009............................. 1,028,870
Missouri, Hlth. & Edl. Facs. Auth. RB:
1,000,000 Bethesda Hlth. Group Proj., Ser. A,
7.50%, 8/15/2012................................ 1,066,340
500,000 BJC Hlth. Sys., Ser. A,
6.50%, 5/15/2020................................ 544,300
250,000 Jefferson Mem. Hosp. Obl. Group,
6.80%, 5/15/2025................................ 254,068
750,000 Maryville Univ. of St. Louis Proj.,
5.75%, 6/15/2017................................ 711,900
100,000 Unrefunded Balance,
6.50%, 2/15/2021................................ 101,126
</TABLE>
26
<PAGE>
EVERGREEN
Municipal Bond Fund
Schedule of Investments (continued)
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Missouri - continued
Missouri, Hsg. Community Mtge. RB:
$ 180,000 SFHRB, Ser. A,
7.125%, 12/1/2014, (FNMA/GNMA).................. $ 192,126
SFHRB, Ser. B:
400,000 6.25%, 9/1/2015, (FNMA/GNMA).................... 406,408
1,790,000 6.45%, 9/1/2027, (FNMA/GNMA).................... 1,817,226
490,000 SFHRB, Ser. D2,
6.50%, 9/1/2029, (FNMA/GNMA).................... 512,653
Sikeston, MO, Elec. RRB:
325,000 6.00%, 6/1/2014, (MBIA)......................... 343,421
500,000 6.00%, 6/1/2015, (MBIA)......................... 523,710
495,000 St. Louis Cnty., MO, IDA Hlth. Facs. RB,
Mother of Perpetual Help,
6.40%, 8/1/2035, (GNMA)......................... 512,241
700,000 St. Louis, MO, Land Clearance Redev. Auth.
RRB, Kiel Site Lease, Ser. B,
5.125%, 7/1/2013, (MBIA)........................ 671,853
950,000 St. Louis, MO, Muni. Fin. Corp. Leasehold RB,
Impt. City Justice Ctr., Ser. A,
5.75%, 2/15/2011, (AMBAC)....................... 979,963
500,000 St. Louis, MO, Wtr. RRB
4.75%, 7/1/2014, (AMBAC)........................ 453,835
4,000,000 Valley Park, MO, IDA Sr. Hsg. RB,
Cape Albeon Proj.,
6.15%, 12/1/2033................................ 3,510,120
West Plains, MO, IDA, Hosp. RB,
Ozarks Med. Ctr. Proj:
1,150,000 5.65%, 11/15/2022............................... 952,327
1,625,000 6.75%, 11/15/2024............................... 1,531,806
--------------
24,906,211
--------------
Nebraska - 1.0%
5,635,000 Nebraska, IFA SFHRB, Ser. F,
5.60%, 9/1/2020, (GNMA/FNMA/FHLMC).............. 5,362,548
5,000,000 Nebraska, Pub. Pwr. Dist. RB,
6.125%, 1/1/2015................................ 5,313,600
--------------
10,676,148
--------------
Nevada - 1.1%
11,800,000 Clark Cnty., NV, IDRB, NV Pwr. Co.
Proj., Ser. A,
5.60%, 10/1/2030................................ 10,322,050
1,000,000 Las Vegas, NV, New Convention &
Visitors Auth. RB,
5.75%, 7/1/2015, (AMBAC)........................ 1,003,880
--------------
11,325,930
--------------
New Hampshire - 0.3%
3,155,000 New Hampshire, Higher Ed. & Hlth. Facs.
Auth. RB, Frisbie Mem. Hosp.,
6.125%, 10/1/2013............................... 3,075,810
--------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New Jersey - 1.2%
$ 1,000,000 Gloucester Cnty., NJ, Impt. Auth., Solid Wst.
Resource Recovery RB, Ser. A,
8.125%, 7/1/2010,
(LOC: Fuji Bank Ltd.)........................... $ 1,003,300
6,400,000 New Jersey, EDA Spl. Facs. RB, Continental
Airlines, Inc. Proj.,
6.25%, 9/15/2019................................ 6,153,728
New Jersey, Hlth. Care Facs. Fin. Auth. RB:
570,000 Prerefunded,
6.125%, 7/1/2012, (AMBAC)....................... 614,255
430,000 Unrefunded,
6.125%, 7/1/2012, (AMBAC)....................... 452,631
3,000,000 New Jersey, Trans. Trust Fund Auth. RB,
Trans. Sys. Ser. A,
5.75%, 6/15/2015................................ 3,068,130
1,055,000 Salem Cnty., NJ, PCRB, E.I. Du Pont-Chambers
Works Proj., Ser. A,
6.50%, 11/15/2021............................... 1,102,981
--------------
12,395,025
--------------
New Mexico - 1.7%
1,500,000 Albuquerque, NM, Hosp. Sys. RRB, Ser. A,
6.375%, 8/1/2007, (MBIA)........................ 1,576,980
Farmington, NM, PCRRB:
10,000,000 Pub. Svc. Co. of San Juan, Ser. C,
5.70%, 12/1/2016, (AMBAC)....................... 9,978,400
5,000,000 Southern CA Edison Co., Ser. A,
5.875%, 6/1/2023, (MBIA)........................ 5,057,200
1,000,000 Univ. of NM, RRB, Ser. A,
6.00%, 6/1/2021................................. 1,011,880
--------------
17,624,460
--------------
New York - 10.6%
Huntington, NY, HFA Sr. Hsg. Facs.
RB, Gurwin Jewish Sr.
Residences, Ser. A:
1,000,000 6.00%, 5/1/2029................................. 904,590
3,000,000 6.00%, 5/1/2039................................. 2,672,130
Metropolitan Trans. Auth., NY,
Trans. Facs. RB:
10,000,000 Ser. A,
5.70%, 7/1/2017, (MBIA)......................... 9,911,900
11,600,000 Svc. Contract, Ser. 7,
5.625%, 7/1/2016................................ 11,312,784
9,360,000 Svc. Contract, Ser. R,
5.50%, 7/1/2017................................. 8,933,559
14,900,000 New York City, NY, Muni. Wtr. Fin.
Auth., Wtr. & Swr. Sys. RB, Ser. A65,
7.22%, 6/15/29, (a)(d).......................... 14,115,366
</TABLE>
27
<PAGE>
EVERGREEN
Municipal Bond Fund
Schedule of Investments (continued)
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New York - continued
New York City, NY, GO:
Prerefunded, Ser. A:
$ 40,000 5.75%, 8/1/2010, (FGIC)........................... $ 41,864
160,000 7.75%, 8/15/2008.................................. 171,419
85,000 7.75%, 8/15/2014.................................. 91,066
135,000 7.75%, 8/15/2015.................................. 144,635
3,755,000 Ser. F,
5.25%, 8/1/2012, (FGIC)........................... 3,703,519
Ser. J:
2,500,000 5.25%, 5/15/2009, (FSA)........................... 2,518,450
4,500,000 5.875%, 2/15/2019................................. 4,440,960
Unrefunded, Ser. A:
90,000 7.75%, 8/15/2008.................................. 95,887
55,000 7.75%, 8/15/2014.................................. 58,364
85,000 7.75%, 8/15/2015.................................. 90,085
2,500,000 New York City, NY, Hlth. & Hosp. Corp. RB, Hlth.
Sys., Ser. A,
5.25%, 2/15/2017.................................. 2,209,675
500,000 New York City, NY, IDA Spl. Facs. RB, American
Airlines, Inc. Proj.,
5.40%, 7/1/2019................................... 456,035
New York, Dormitory Auth. RB:
3,980,000 City Univ. Sys., Ser. D,
7.00%, 7/1/2009, (FGIC)........................... 4,430,257
2,500,000 Secured Hosp., Interfaith Med. Ctr., Ser. D,
5.25%, 2/15/2016.................................. 2,247,350
8,000,000 New York, Energy Research & Dev. Auth., PCRB,
LILCo. Proj. Ser. B,
5.15%, 3/1/2000................................... 7,222,720
545,000 New York, Env. Facs. Corp., PCRB, Wtr. Revolving
Fund, Unrefunded, Ser. E,
6.875%, 6/15/2010................................. 574,141
7,000,000 New York, Hsg. Corp. RB, Ser. A,
0.00%, 11/1/2010,
(Eff. Yield 6.17%) (b)............................ 6,878,340
New York, Med. Care Facs., Fin. Agcy. RB:
3,575,000 Hlth. Ctr. Proj., Ser. A,
6.375%, 11/15/2019, (AMBAC)....................... 3,758,153
30,000 Unrefunded, Ser. E,
6.375%, 8/15/2014, (FGIC)......................... 31,831
4,000,000 New York, Mtge. Agcy. RB, Homeowener Mtge., Ser.
27,
6.90%, 4/1/2015................................... 4,183,720
New York, Mtge. Agcy. RB:
5,500,000 Ser. 71,
.5.40%, 4/1/2029................................... 4,969,800
4,000,000 Ser. 82,
.5.65%, 4/1/2030................................... 3,726,200
3,000,000 Ser. 86,
.5.95%, 10/1/2020.................................. 2,933,220
5,000,000 New York, Thruway Auth. Svc. Contract RB, Local
Hwy. & Bridge Proj., Ser. A2,
5.25%, 4/1/2015, (MBIA)........................... 4,811,150
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New York - continued
$ 1,175,000 New York, Urban Dev. Corp. RRB, Correctional
Facs., Ser. A,
6.50%, 1/1/2009................................. $ 1,279,916
500,000 Niagara Falls, NY, Pub. Impt. GO
7.50%, 3/1/2014, (MBIA)......................... 602,800
400,000 Triborough Bridge & Tunnel Auth., NY, Spl. Obl.,
RRB, Ser. A,
5.25%, 1/1/2014, (FGIC)......................... 389,508
--------------
109,911,394
--------------
North Dakota - 1.7%
North Dakota, HFA RB, Hsg. Fin. Program, Home
Mtge.:
14,000,000 Ser. B,
5.50%, 7/1/2029, (MBIA)......................... 12,837,160
4,945,000 Ser. C,
5.55%, 7/1/2029................................. 4,561,614
--------------
17,398,774
--------------
Ohio - 0.7%
2,000,000 Adams Cnty., OH, Valley Local Sch. Dist. GO,
7.00%, 12/1/2015, (MBIA)........................ 2,304,820
2,000,000 Butler Cnty., OH, Trans. Impt. Dist. RB, Ser. A,
6.00%, 4/1/2012, (FSA).......................... 2,100,340
2,500,000 Montgomery Cnty., OH, Hosp. RRB, Kettering Med.
Ctr.,
6.25%, 4/1/2020, (MBIA)......................... 2,623,850
--------------
7,029,010
--------------
Oklahoma - 0.7%
8,315,000 Oklahoma, Dev. Fin. Auth. RRB, Hillcrest
Healthcare Sys.,
5.625%, 8/15/2029............................... 6,821,626
--------------
Oregon - 1.0%
Klamath Falls, OR, Elec. RRB,
Sr. Lien, Klamath Cogen Proj.:
5,000,000 5.75%, 1/1/2013................................. 4,714,700
6,000,000 6.00%, 1/1/2025................................. 5,540,520
--------------
10,255,220
--------------
Pennsylvania - 5.1%
2,500,000 Allegheny Cnty., PA, Swr. RRB,
0.00%, 6/1/2015,
(Eff. Yield 6.05%) (FGIC) (b)................... 1,030,875
2,750,000 Delaware Cnty., PA, IDA RB, Wtr. Facs. Proj.,
6.00%, 6/1/2029, (FGIC)......................... 2,690,490
2,000,000 Lebanon Cnty., PA, Hosp Auth. RB, Good Samaritan
Proj.,
6.00%, 11/15/2018............................... 1,910,680
2,000,000 McKeesport, PA, Area Sch. Dist. GO, Ser. B,
0.00%, 10/1/2015,
(Eff. Yield 5.41%) (FSA) (b).................... 809,120
5,000,000 Montgomery Cnty., PA, IDRB, Acts Retirement-Life
Communities,
5.25%, 11/15/2028............................... 4,234,850
</TABLE>
28
<PAGE>
EVERGREEN
Municipal Bond Fund
Schedule of Investments (continued)
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
$ 900,000 Montgomery Cnty., PA, PCRRB, Philadelphia Elec.
Co.,
7.60%, 4/1/2021................................. $ 952,452
6,000,000 Pennsylvania Intergovernmental Coop. Auth. Spl.
Tax RB, Philadelphia Funding Program,
5.35%, 6/15/2007, (FGIC)........................ 6,158,880
5,545,000 Pennsylvania, HFA RRB, Residential Dev., Section
8, Ser. A,
7.60%, 7/1/2013, (HUD Sec. 8)................... 5,778,777
1,750,000 Pennsylvania, IDA RB, EDA,
6.00%, 1/1/2012, (AMBAC)........................ 1,809,185
3,500,000 Pennsylvania EDA, Solid Wst. Disposal, RB, USG
Corp. Proj.,
6.00%, 6/1/2031................................. 3,271,065
1,000,000 Philadelphia, PA, Hosp. & Higher Edl. Facs. Auth.
RRB, Community College, Ser. B,
6.50%, 5/1/2007, (MBIA)......................... 1,094,480
7,360,000 Philadelphia, PA, Muni. Auth. RB, Muni. Svcs.
Bldg. Lease,
0.00%, 3/15/2014,
(Eff. Yield 5.42%) (FSA) (b).................... 3,288,816
9,350,000 Philadelphia, PA, Wtr. & Wst. Wtr. RB,
5.00%, 6/15/2016, (FSA)......................... 8,478,019
3,600,000 Pittsburgh, PA, GO, Ser. A,
5.50%, 9/1/2015, (FGIC)......................... 3,543,840
6,350,000 Sayre, PA, Hlth. Care Facs. Auth. RB, Guthrie
Healthcare, Ser. A,
7.10%, 3/1/2017, (AMBAC)........................ 6,665,595
1,000,000 Susquehanna, PA, Area Reg'l. Arpt. Auth. RB, Aero
Harrisburg LLC Proj.,
5.50%, 1/1/2024................................. 858,540
--------------
52,575,664
--------------
South Carolina - 0.3%
3,095,000 South Carolina, Port Auth. RB,
5.375%, 7/1/2015, (FSA)......................... 2,976,462
--------------
South Dakota - 0.9%
South Dakota, Hsg. Dev. Auth. RB:
6,603,000 Ser. F,
5.80%, 5/1/2028................................. 6,302,564
3,000,000 Ser. G,
5.95%, 5/1/2020................................. 2,937,390
--------------
9,239,954
--------------
Tennessee - 3.9%
7,465,000 Bristol, TN, Hlth & Edl. Facs. Auth. RRB, Bristol
Mem. Hosp.,
6.75%, 9/1/2010, (FGIC)......................... 8,355,276
Knox Cnty., TN, Hlth. & Edl. Facs. Auth. RRB,
Fort Sanders Alliance:
9,000,000 Ser. B,
7.25%, 1/1/2010, (MBIA)......................... 10,371,420
4,500,000 Ser. C,
5.25%, 1/1/2015, (MBIA)......................... 4,331,970
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Tennessee - continued
$10,000,000 Metro Govt., Nashville & Davidson Cnty., TN, Wtr.
& Swr. RRB,
7.70%, 1/1/2012, (FGIC)......................... $ 12,170,800
5,280,000 Tennsessee, Hsg. Dev. Agcy. RB, Ser. 2A,
5.70%, 7/1/2031................................. 4,936,536
--------------
40,166,002
--------------
Texas - 10.0%
10,000,000 Alliance, TX, Arpt. Auth., TX Spl. Facs. RB,
Federal Express Corp. Proj.,
6.375%, 4/1/2021................................ 9,788,000
3,740,000 Austin, TX, Hotel Occupancy Tax RRB, Sub. Lien,
5.625%, 11/15/2017, (AMBAC)..................... 3,659,291
Austin, TX, Util. Sys. RB:
1,530,000 Prerefunded,
5.75%, 5/15/2024, (FGIC)........................ 1,629,572
2,000,000 Refunded, Ser. B,
5.70%, 11/15/2021, (MBIA)....................... 2,004,480
3,470,000 Unrefunded Balance,
5.75%, 5/15/2024, (FGIC)........................ 3,355,039
25,000 Bexar, TX, Metropolitan Wtr. Dist. Wtr. Works
Sys. RB, Unrefunded Balance,
6.625%, 5/1/2014, (AMBAC)....................... 26,378
60,000 Brazos Cnty., TX, HFA, SFHRRB
5.80%, 9/1/2025, (GNMA/FNMA).................... 57,671
30,000 Brazos Cnty., TX, Hlth. Facs. Dev. RB,
Franciscan Svc. Corp., Ser. B,
5.375%, 1/1/2022, (MBIA)........................ 27,824
2,400,000 Brownsville, TX, Util. Sys. RRB
6.25%, 9/1/2014, (MBIA)......................... 2,572,416
3,000,000 Dallas Fort Worth, TX Int'l. Arpt. Facs. Impt.
Corp. RB, American Airlines, Inc. Proj.,
6.375%, 5/1/2035................................ 2,899,800
10,000,000 Gulf Coast, TX, IDA, Wst. Disposal RB, Valero
Refining Proj.,
5.60%, 12/1/2031................................ 8,662,700
Harris Cnty., TX, Hlth. Facs. Dev. Corp., Hosp.
RB, Mem. Hosp. Sys. Proj., Ser. A:
3,215,000 6.00%, 6/1/2009................................. 3,425,647
2,525,000 7.125%, 6/1/2015................................ 2,700,790
5,000,000 Houston, TX, Arpt. Sys. RB, Sub. Lien Ser. B,
5.25%, 7/1/2014, (FGIC)......................... 4,764,750
Houston, TX, Arpt. Sys. RB,
Continental Airlines Proj.:
5,000,000 Ser. B,
6.125%, 7/15/2027............................... 4,593,100
5,000,000 Ser. C,
5.70%, 7/15/2029................................ 4,263,200
8,750,000 Houston, TX, Wtr. & Swr. Sys. RRB,
Jr. Lien, Ser. A,
6.20%, 12/1/2025, (MBIA)........................ 9,419,287
</TABLE>
29
<PAGE>
EVERGREEN
Municipal Bond Fund
Schedule of Investments (continued)
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Texas - continued
Houston, TX, Wtr. & Swr. Sys. RRB:
$20,000,000 Jr. Lien, Ser. A,
0.00%, 12/1/2019,
(Eff. Yield 5.58%) (FSA) (b).................... $ 6,074,000
Jr. Lien, Ser. C:
2,700,000 0.00%, 12/1/2010,
(Eff. Yield 6.08%) (AMBAC) (b).................. 1,509,381
3,000,000 0.00%, 12/1/2011,
(Eff. Yield 5.32%) (AMBAC) (b).................. 1,574,070
4,805,000 Matagorda Cnty., TX, Navigation Dist. 1 RRB,
Reliant Energy Proj., Ser. B,
5.95%, 5/1/2030................................. 4,424,684
2,000,000 Port Arthur, TX, Navigation Dist. GO, Refunding,
0.00%, 3/1/2009,
(Eff. Yield 4.72%) (AMBAC) (b).................. 1,233,140
1,085,000 Rio Grande Valley, TX, Hlth. Facs. Corp., Hosp.
RB, Baptist Med. Proj.,
8.00%, 8/1/2017, (BIG).......................... 1,102,414
6,415,000 Tarrant Cnty., TX, HFA, SFHRB, Ser. A,
0.00%, 9/15/2016,
(Eff. Yield 7.40%) (MBIA) (b)................... 2,390,101
2,565,000 Tarrant Cnty., TX, Hlth. Facs. Dev. RB, TX Hlth.
Resource Sys., Ser. A,
5.75%, 2/15/2015, (MBIA)........................ 2,590,676
Texas, GO:
5,250,000 Refunding, Ser. A,
5.70%, 10/1/2003................................ 5,476,380
4,000,000 Veterans Hsg. Assistance Program, Ser. A,
5.65%, 12/1/2017................................ 3,842,920
Texas, Muni. Pwr. Agcy. RRB:
1,125,000 0.00%, 9/1/2008,
(Eff. Yield 4.34%) (AMBAC) (b).................. 721,800
175,000 5.25%, 9/1/2012, (MBIA)......................... 172,748
Texas, Wtr. Dev. Board RB, Sr. Lien, Ser. B:
2,000,000 5.75%, 7/15/2013................................ 2,046,060
4,000,000 5.75%, 7/15/2014................................ 4,057,920
3,000,000 Univ. TX, RB, Fing Sys. Proj., Ser. B,
5.375%, 8/15/2017............................... 2,847,090
--------------
103,913,329
--------------
Utah - 0.1%
55,000 Utah, HFA, SFHRB, Ser. C2,
7.95%, 7/1/2010, (FHA).......................... 56,536
6,500,000 Utah, Intermountain Pwr. Agcy. RB, Ser. C,
0.00%, 7/1/2020,
(Eff. Yield 6.80%) (b).......................... 1,190,280
--------------
1,246,816
--------------
Vermont - 0.3%
3,500,000 Vermont, EDA RB, Wake Robin
Corp. Proj., Ser. A,
6.30%, 3/1/2033................................. 3,418,660
--------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Virginia - 1.5%
Virginia, Hsg. Dev. Auth., MHRB:
Ser. E,
$ 3,245,000 5.60%, 11/1/2017................................ $ 3,138,045
Sub. Ser. B-1,
7,845,000 5.50%, 1/1/2022................................. 7,295,614
5,500,000 Winchester, VA, IDA, Hosp. RRB,
Winchester Med. Ctr., Inc.
5.50%, 1/1/2015, (AMBAC)........................ 5,373,115
--------------
15,806,774
--------------
Washington - 2.5%
8,000,000 Chelan Cnty., WA, Pub. Util. Dist. 1 RRB,
Columbia River Rock Proj., Ser. A,
0.00%, 6/1/2013,
(Eff. Yield 5.75%) (MBIA) (b)................... 3,742,320
2,000,000 King Cnty., WA, GO, Kent Sch. Dist. 415,
5.875%, 6/1/2016, (FSA)......................... 2,050,360
2,065,000 Seattle, WA, GO, Ser. B,
5.75%, 12/1/2019................................ 2,028,904
2,000,000 Spokane, WA, Reg'l. Solid Wst. Mgmt. Sys. RRB,
6.50%, 1/1/2011, (AMBAC)........................ 2,155,540
4,000,000 Washington Hlth. Care Facs. RB, Swedish Hlth.
Sys. Proj.,
5.125%, 11/15/2018, (AMBAC)..................... 3,594,280
1,000,000 Washington, GO, Ser. A,
6.75%, 2/1/2015................................. 1,100,770
2,650,000 Washington, HFA, SFHRB, Ser. 4A,
5.40%, 12/1/2024, (FNMA/GNMA)................... 2,426,287
Washington, Pub. Pwr. Supply Sys. RRB:
4,700,000 Nuclear Proj. 1, Ser. A,
6.50%, 7/1/2015................................. 5,014,712
Nuclear Proj. 3, Ser. B:
4,000,000 0.00%, 7/1/2012,
(Eff. Yield 5.60%) (MBIA) (b)................... 1,987,200
2,000,000 5.60%, 7/1/2015, (MBIA)......................... 1,953,220
--------------
26,053,593
--------------
Wisconsin - 0.7%
3,500,000 Wisconsin, HFA & EDA RB, Ser. G,
5.75%, 4/1/2030................................. 3,303,685
4,100,000 Wisconsin, Hlth. & Edl. Facs. RB,
Monroe Clinic, Inc.,
5.375%, 2/15/2022............................... 3,578,849
--------------
6,882,534
--------------
Puerto Rico - 1.3%
Cmnwlth. of Puerto Rico, GO:
100,000 Pub. Impt., Refunding,
5.50%, 7/1/2011................................. 101,883
5,300,000 Refunding,
0.00%, 7/1/2014,
(Eff. Yield 5.53%) (MBIA) (b)................... 2,396,289
170,000 Cmnwlth. of Puerto Rico, Hwy. &
Trans. RB, Ser. X,
5.50%, 7/1/2015................................. 168,065
</TABLE>
30
<PAGE>
EVERGREEN
Municipal Bond Fund
Schedule of Investments (continued)
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Puerto Rico - continued
$ 4,030,000 Cmnwlth. of Puerto Rico, Indl., Tourist, Edl.,
Med. Env. Cultural Facs., Fin. Auth. RB, Hosp.
Auxilio Mutuo, Ser. A,
6.25%, 7/1/2024................................. $ 4,233,918
6,250,000 Cmnwlth. of Puerto Rico, Pub. Bldg. Auth. Hlth. &
Edl. Facs. RB
5.70%, 7/1/2016................................. 6,267,438
--------------
13,167,593
--------------
Total Municipal Obligations
(cost $1,021,384,458)........................... 994,327,098
--------------
SHORT-TERM MUNICIPAL SECURITIES - 3.8%
Alabama - 0.5%
$ 5,000,000 Stevenson, AL, IDRB, Mead Corp. Proj., Ser. B,
3.85%, 12/1/1999,
(LOC: First National Bank) (a).................. 5,000,000
--------------
Florida - 0.0%
40,000 Dade Cnty., FL, Wtr. & Swr. Sys. RB
3.60%, 12/1/1999,
(SPA: Commerzbank & Ins. by FGIC) (a)........... 40,000
--------------
Illinois - 1.0%
2,000,000 Illinois, Ed'l Facs. Auth. RB
3.85%, 12/1/1999,
(LOC: First National Bank)...................... 2,000,000
Illinois, Hlth. Facs. Auth. RB:
2,600,000 Elmhurst Mem. Hosp., Ser. B,
3.80%, 12/1/1999................................ 2,600,000
6,205,000 Palos Community Hosp.,
3.90%, 12/2/1999................................ 6,205,000
--------------
10,805,000
--------------
Indiana - 0.1%
1,350,000 Indiana, Hlth. Fac. Fin. Auth. RB, Capital
Access,
3.90%, 12/1/1999, (a)........................... 1,350,000
--------------
Iowa - 0.8%
700,000 Iowa, Fin. Auh. Solid Wst. Disposal RB, Cedar
River Paper Co. Proj.,
3.95%, 12/1/1999,
(LOC: Bank of Nova Scotia)...................... 700,000
7,200,000 Iowa, Fin. Auth. RB, Burlington Med. Ctr.,
3.95%, 12/2/1999,
(SPA: Firstar Bank Milawaukee & Ins. by FSA).... 7,200,000
--------------
7,900,000
--------------
Missouri - 0.0%
180,000 Kansas City, MO, IDA Hosp. RB, Insured Research
Hlth. Svcs. Sys.,
3.65%, 12/1/1999,
(SPA: Bank of America, Illinois & Ins. by
MBIA) (a)....................................... 180,000
45,000 Missouri, Hlth. & Edl. Facs. Auth. RB, Christian
Hlth. Svcs., Ser. A,
3.85%, 12/1/1999,
(LOC: Morgan Guaranty Trust)(a)................. 45,000
--------------
225,000
--------------
New York - 1.0%
100,000 Long Island Pwr. Auth., NY, Elec. Sys RB, Sub.
Ser. 5,
3.60%, 12/1/1999,
(LOC: ABN Amro Bank N.V. & Morgan Guaranty
Trust) (a)...................................... 100,000
175,000 New York City, NY, RB, Sub. Ser. A8,
3.80%, 12/1/1999,
(LOC: Morgan Guaranty Trust).................... 175,000
New York, Job Dev. Auth. Gtd. RB:
3,000,000 Ser. A1-A21,
3.70%, 12/1/1999................................ 3,000,000
2,520,000 Ser. A1-A25,
3.70%, 12/1/1999................................ 2,520,000
700,000 Ser. B1-B9,
3.70%, 12/1/1999................................ 700,000
530,000 New York, Job Dev. Auth. Gtd. Spl. Purpose RB,
Ser. B1-B2,
3.70%, 12/1/1999, (a)........................... 530,000
3,000,000 Port Auth. NY & NJ Spl. Obl.
3.75%, 12/1/1999................................ 3,000,000
--------------
10,025,000
--------------
Wyoming - 0.4%
3,750,000 Lincoln Cnty., WY, PCRB, Exxon Proj., Ser. A,
3.85%, 12/1/1999................................ 3,750,000
--------------
Total Short-Term Municipal Securities
(cost $39,095,000)............................... 39,095,000
--------------
<CAPTION>
Shares Value
<C> <S> <C> <C>
MUTUAL FUND SHARES - 0.5%
4,709,172 Federated Municipal Obligations Fund
(cost $4,709,172)................................ 4,709,172
--------------
Total Investments -
(cost $1,065,188,630).................. 100.3% 1,038,131,270
Other Assets and Liabilities - net...... (0.3) (2,930,820)
----- --------------
Net Assets.............................. 100.0% $1,035,200,450
===== ==============
</TABLE>
31
<PAGE>
EVERGREEN
Municipal Bond Fund
Schedule of Investments (continued)
November 30, 1999 (Unaudited)
The Fund invests primarily in debt securities issued by municipalities. The
ability of the issuers of debt securities to meet their obligations may be af-
fected by economic developments in a specific industry or municipality. In or-
der to reduce risk associated with such economic developments, at November 30,
1999, 42.6% of the securities, as a percentage of net assets, are backed by
bond insurance of various financial institutions and financial guaranty assur-
ance agencies. At November 30, 1999, the Fund had securities backed by bond in-
surance of the following financial institutions representing more than 5% of
net assets:
AMBAC 7.4%
FGIC 8.7%
FSA 6.1%
MBIA 14.4%
(a) Securities are variable or floating rate instruments with periodic demand
features. The Fund is entitled to full payment of principal and accrued in-
terest upon surrendering the security to the issuing agent.
(b) Effective yield (calculated at date of purchase) is the annual yield at
which the bond accretes until its maturity date.
(c) At the discretion of the portfolio manager, these securities may be sepa-
rated into securities with interest or principal payments that are linked
to another rate or index and therefore would be considered derivative secu-
rities.
(d) Securities that may be resold to "qualified institutional buyers" under
rule 144a or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under the guidelines established by the Board of Trustees.
Summary of Abbreviations:
<TABLE>
<C> <S>
ACA American Capital Access
AMBAC Insured by American Municipal Bond Assurance Corporation
BIG Bond Investors Guaranty
COP Certificates of Participation
EDA Economic Development Authority
FGIC Insured by Financial Guaranty Insurance Corporation
FHA Federal Housing Authority
FHLMC Guaranteed by Federal Home Loan Mortgage Corporation
FNMA Guaranteed by Federal National Mortgage Association
FRN Floating Rate Note
FSA Insured by Financial Security Assurance Corporation
GNMA Guaranteed by Government National Mortgage Association
GO General Obligation
HFA Housing Finance Authority
HUD Housing and Urban Development
IBC Insured Bond Certification
IDA Industrial Development Authority
IDRB Industrial Development Revenue Bond
IFA Industrial Finance Agency
LILCo. Long Island Lighting Company
LOC Letter of Credit
MBIA Insured by Municipal Bond Investors Assurance Corporation
MHRB Multifamily Housing Revenue Bond
PCRB Pollution Control Revenue Bond
PCRRB Pollution Control Refunding Revenue Bond
RB Revenue Bond
RRB Refunding Revenue Bond
SFHRB Single Family Housing Revenue Bond
SPA Securities Purchase Agreement
</TABLE>
FUTURES CONTRACTS - SHORT POSITIONS
<TABLE>
<CAPTION>
Number of Initial Contract Value at Unrealized
Expiration Contracts Description Amount November 30, 1999 Gain
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December-
1999 537 Municipal Bond Index $59,464,571 $59,070,000 $394,571
</TABLE>
See Combined Notes to Financial Statements.
32
<PAGE>
EVERGREEN
Short Intermediate Municipal Fund
Schedule of Investments
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 97.1%
Alabama - 4.3%
$7,000,000 Huntsville, AL, Warrants, Ser. A,
4.50%, 12/1/2000................................... $ 7,000,000
------------
Arizona - 2.3%
2,000,000 Arizona, Edl. Loan Marketing Corp. Edl. Loan RB, Sr.
Ser.,
6.125%, 9/1/2002................................... 2,073,140
1,600,000 Pima Cnty., AZ, GO, Refunding,
6.55%, 7/1/2001.................................... 1,655,296
------------
3,728,436
------------
California - 0.6%
1,025,000 Stockton, CA, Hlth. Facs. RB, Dameron Hosp. Assn.,
Ser. A,
5.00%, 12/1/2001................................... 1,029,551
------------
Colorado - 3.2%
Colorado, HFA, SFHRB:
300,000 Ser. A3,
4.25%, 10/1/2005................................... 295,131
1,000,000 Ser. B2,
4.90%, 4/1/2007.................................... 972,330
1,500,000 Denver, CO, City & Cnty. Arpt. RB, Ser. C,
6.35%, 11/15/2001.................................. 1,542,810
1,085,000 Denver, CO, Hlth. & Hosp. RB, Ser. A,
5.00%, 12/1/2003................................... 1,078,327
1,300,000 Weld Cnty., CO, IDRB, Monfort, Inc., Proj.,
6.75%, 12/15/2001.................................. 1,327,794
------------
5,216,392
------------
Florida - 12.9%
3,520,000 Broward Cnty., FL, Resource Recovery RB,
Wheelabrator Tech. Proj.,
7.95%, 12/1/2008................................... 3,633,907
3,000,000 Florida, GO, Board of Ed., Capital Outlay,
6.75%, 6/1/2000.................................... 3,041,370
1,000,000 Hillsborough Cnty., FL, IDRB, Univ. Hlth. Facs.
Proj., Community. Hosp., Ser. A,
4.50%, 8/15/2003................................... 976,590
4,905,000 Jacksonville, FL, IDRRB, TTX Co. Proj.,
5.40%, 3/1/2001.................................... 4,962,732
1,150,000 Lee Cnty., FL, IDA, Hlth. Care Facs. RB, Shell Point
Vlg. Proj., Ser. A,
5.25%, 11/15/2004.................................. 1,145,814
3,390,000 Leon Cnty., FL, Edl. Facs. Auth., COP, Southgate
Proj.,
9.00%, 9/1/2014, (ETM)............................. 3,727,089
1,550,000 Palm Beach Cnty., FL, Solid Wst. Auth. RRB
5.50%, 12/1/2002, (MBIA)........................... 1,601,429
Pinellas Cnty., FL, Edl. Facs. Auth. RRB, Barry
University Proj.:
375,000 4.55%, 10/1/2002................................... 371,366
390,000 4.60%, 10/1/2003................................... 383,526
1,000,000 Sarasota, FL, GO, Refunding,
6.85%, 8/1/2000.................................... 1,018,550
------------
20,862,373
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Illinois - 0.6%
$1,000,000 Illinois, Dev. Fin. Auth. RRB, Community
Rehabilitation Providers, Ser. A,
5.35%, 7/1/2000.................................... $ 1,003,530
------------
Iowa - 2.3%
3,500,000 Iowa, Loan Liquidity Corp., Student Loan RB, Ser. B,
6.65%, 3/1/2003.................................... 3,694,775
------------
Kansas - 2.5%
4,000,000 Burlington, KS, Env. Impt. RRB, Kansas City Pwr. &
Light Co., Proj., Ser. D,
4.35%, 10/1/2017................................... 3,973,120
------------
Louisiana - 2.9%
4,460,000 Louisiana, Pub. Facs. Auth. RB, Student Loan
Subord., Ser. A3,
7.00%, 9/1/2006.................................... 4,681,662
------------
Maine - 1.8%
3,000,000 Baileyville, ME, PCRB, Georgia-Pacific Corp. Proj.,
4.75%, 6/1/2005.................................... 2,926,320
------------
Massachusetts - 3.6%
Massachusetts, Hlth. & Edl. Facs. Auth. RB:
1,400,000 Caritas Christi Obl. Group, Ser. A,
5.25%, 7/1/2006.................................... 1,369,326
970,000 Fairview Extended Care Svcs., Inc., Ser. B,
4.55%, 1/1/2021.................................... 963,327
Massachusetts, IFA RB:
760,000 Ser. A, Refunding,
5.35%, 11/1/2007,
(LOC: Rabobank Nederland).......................... 766,080
905,000 Ser. B,
5.35%, 11/1/2007,
(LOC: Rabobank Nederland).......................... 912,240
380,000 Ser. G,
5.30%, 12/1/2006,
(LOC: Rabobank Nederland).......................... 382,911
475,000 Ser. I,
5.30%, 12/1/2006,
(LOC: First Nat'l. Bank of Grand Fork)............. 478,638
1,000,000 New England Edl. Loan Marketing Corp. RRB, Ser. B,
5.40%, 6/1/2000.................................... 1,006,160
------------
5,878,682
------------
Michigan - 1.5%
Grand Rapids Charter Turnpike, MI, RB, Porter Hills
Obl. Group:
475,000 3.95%, 7/1/2001.................................... 468,417
210,000 4.25%, 7/1/2004.................................... 200,953
600,000 4.50%, 7/1/2006.................................... 566,562
610,000 4.60%, 7/1/2007.................................... 572,326
690,000 4.70%, 7/1/2008.................................... 644,515
------------
2,452,773
------------
</TABLE>
33
<PAGE>
EVERGREEN
Short Intermediate Municipal Fund
Schedule of Investments (continued)
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Missouri - 2.3%
$3,000,000 St. Louis Cnty., MO, IDA MHRRB, Ser. C,
5.20%, 11/15/2029.................................. $ 2,993,460
710,000 North Kansas City, MO, Sch. Dist., GO, Direct
Deposit Prog.,
6.70%, 3/1/2000.................................... 714,807
------------
3,708,267
------------
Nebraska - 1.2%
2,000,000 American Public Energy Agcy., RB, NE Pub. Gas Agcy.
Proj., Ser. A,
5.00%, 6/1/2005.................................... 2,007,620
------------
New Hampshire - 3.0%
5,000,000 New Hampshire, Business Fin. Auth., PCRB, United
Illumination Co., Proj. A,
4.35%, 7/1/2027.................................... 4,885,150
------------
New Jersey - 9.6%
New Jersey, EDA RB:
Franciscan Oaks Proj.:
1,545,000 5.20%, 10/1/2004................................... 1,524,405
825,000 5.40%, 10/1/2006................................... 809,845
1,075,000 5.50%, 10/1/2007................................... 1,053,038
Keswick Pines, Refunding:
480,000 4.70%, 1/1/2000.................................... 479,952
695,000 4.85%, 1/1/2001.................................... 694,541
805,000 5.00%, 1/1/2002.................................... 802,569
845,000 5.10%, 1/1/2003.................................... 841,079
465,000 5.15%, 1/1/2004.................................... 460,713
500,000 5.25%, 1/1/2005.................................... 493,360
975,000 5.35%, 1/1/2006.................................... 959,966
925,000 5.45%, 1/1/2007.................................... 908,877
3,365,000 New Jersey, Hlth. Care Facs. Fin. Auth. RRB,
Atlantic City Med. Ctr., Ser. C,
6.30%, 7/1/2001.................................... 3,446,601
3,000,000 New Jersey, Turnpike Auth. RB, Ser. C,
6.50%, 1/1/2006.................................... 3,102,060
------------
15,577,006
------------
New Mexico - 4.4%
6,680,000 Alamogordo, NM, Hosp. RB, Gerald Champion Mem. Hosp.
Proj., 5.00%, 1/1/2008............................. 6,346,868
795,000 New Mexico, Edl. Assistance Foundation Student Loan
RB, Ser. A,
6.70%, 4/1/2002, (AMBAC)........................... 826,657
------------
7,173,525
------------
New York - 4.1%
1,000,000 Nassau Cnty., NY, Tobacco Settlement Corp.,
5.40%, 7/15/2012................................... 990,020
2,000,000 New York City, NY, IDA, Spl. Facs. RB, Terminal One
Group Assn. Proj.,
6.00%, 1/1/2007.................................... 2,060,380
New York City, NY, GO:
Prerefunded Bonds, Ser. L:
305,000 5.00%, 8/1/2001, (ETM)............................. 308,435
210,000 5.25%, 8/1/2000, (ETM)............................. 211,812
Unrefunded Balance, Ser. L:
1,145,000 5.00%, 8/1/2001.................................... 1,155,465
790,000 5.25%, 8/1/2000.................................... 796,067
1,080,000 TSASC Inc., NY, RB, Ser. 1, Plan Principle 2003,
5.00%, 7/15/2009................................... 1,066,954
------------
6,589,133
------------
Ohio - 3.6%
940,000 Cincinnati, OH, Student Loan RB, The Student Loan
Funding Corp., Ser. A,
5.50%, 12/1/2001................................... 943,703
2,000,000 Ohio, Air Quality Dev. Auth. RB, Ohio Edison Co.,
Proj. B, 4.25%, 6/1/2001........................... 1,969,540
3,000,000 Ohio, Wtr. Dev. Auth. PCRRB, Ohio Edison Co.,
Proj. A, 4.25%, 6/1/2001........................... 2,949,570
------------
5,862,813
------------
Oklahoma - 9.4%
2,340,000 Oklahoma, Dev. Fin. Auth. RRB, Hillcrest Sys.
Proj., Ser. A,
4.70%, 8/15/2005................................... 2,196,090
Oklahoma, HFA, SFHRB:
750,000 Mtge. Ser. B1,
6.80%, 9/1/2016.................................... 800,137
2,000,000 Mtge. Ser. B2,
6.80%, 9/1/2026.................................... 2,134,180
5,475,000 Mtge., Ser. D2,
6.25%, 9/1/2029, (FNMA/GNMA)....................... 5,758,167
4,450,000 Oklahoma, Hsg. Dev. Auth. RB, Lease Purchase
Program, Ser. A,
4.75%, 12/1/2002, (GNMA)........................... 4,401,273
------------
15,289,847
------------
Pennsylvania - 4.1%
4,620,000 Dauphin Cnty., PA, General Auth. RB, Office & Forum
Parking Proj., Ser. A,
5.125%, 1/15/2003.................................. 4,558,231
1,950,000 Philadelphia, PA, Wtr. & Swr. RB, 16th Ser.,
Prerefunded, 7.50%, 8/1/2010....................... 2,086,636
------------
6,644,867
------------
South Dakota - 0.6%.................................
1,000,000 South Dakota, Hsg. Dev. Auth. RB, Homeownership
Mtge., Ser. J,
4.60%, 5/1/2002, (FNMA)............................ 995,380
------------
Texas - 2.2%
1,000,000 Austin, TX, Utility Sys. RB, Ser. A, 9.50%,
5/15/2015.......................................... 1,024,910
2,500,000 Houston, TX, Arpt. Sys. RB, Sub. Lien, Ser. A,
6.75%, 7/1/2008, (FGIC)............................ 2,622,600
------------
3,647,510
------------
</TABLE>
34
<PAGE>
EVERGREEN
Short Intermediate Municipal Fund
Schedule of Investments (continued)
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Utah - 4.6%
Utah, Board of Regents Student Loan RB:
$1,700,000 Ser. B,
5.65%, 11/1/2006.................................... $ 1,700,748
3,000,000 Ser. F,
7.05%, 11/1/2003, (AMBAC)........................... 3,134,010
Utah, Intermountain Pwr. Agcy., UT Pwr. Supply RB:
1,760,000 Capital Appreciation Bonds, Ser. B, 0.00%, 7/1/2000,
(Eff. Yield 7.00%) (a).............................. 1,716,405
1,000,000 Capital Appreciation Bonds, Ser. D, 0.00%, 7/1/2000,
(Eff. Yield 9.70%) (a).............................. 975,230
------------
7,526,393
------------
Vermont - 2.9%
4,385,000 Vermont, RRB, Ser. 2,
6.00%, 12/1/2006, (AMBAC).......................... 4,681,382
------------
Virginia - 0.7%
1,130,000 Alexandria, VA, Redev. & Hsg. Auth. MHRB, Buckingham
Vlg. Apts., 4.875%, 7/1/2006....................... 1,105,999
------------
Washington - 1.9%
2,950,000 Washington, GO, Motor Vehicle Fuel Tax, Ser. R-92D,
5.60%, 9/1/2001.................................... 3,015,224
------------
Wisconsin - 0.6%
$1,000,000 Milwaukee, WI, Metropolitan Swr. Dist. GO, Ser. A,
7.00%, 9/1/2001.................................... $ 1,045,320
------------
U. S. Virgin Islands - 3.4%
3,500,000 Virgin Islands, Pub. Fin. Auth. RB, Sr. Lien,
Ser. C, 5.00%, 10/1/2003........................... 3,503,395
2,000,000 Virgin Islands, Wtr. & Pwr. Auth. Elec. Sys. RRB
5.125%, 7/1/2003................................... 2,018,800
------------
5,522,195
------------
Total Municipal Obligations
(cost $159,415,785)................................ 157,725,245
------------
<CAPTION>
Shares Value
<C> <S> <C> <C>
MUTUAL FUND SHARES - 1.7%
2,794,000 Federated Municipal Obligations Fund
(cost $2,794,000).................................. 2,794,000
------------
Total Investments - (cost $162,209,785)...... 98.80% 160,519,245
Other Assets and Liabilities - net........... 1.2 1,933,296
------ ------------
Net Assets................................... 100.00% $162,452,541
====== ============
</TABLE>
The Fund invests primarily in debt securities issued by municipalities. The
ability of the issuers of debt securities to meet their obligations may be af-
fected by economic developments in a specific industry or municipality. In or-
der to reduce risk associated with such economic developments, securities may
possess municipal bond insurance from various financial institutions and finan-
cial guaranty assurance agencies. Therefore, the Funds may be more affected by
developments in the insurance industry or a specific municipal bond insurer. At
November 30, 1999, 16.3% of the securities, as a percentage of net assets, are
backed by bond insurance of various financial institutions and financial guar-
anty assurance agencies. At November 30, 1999, the Fund had securities backed
by bond insurance of the following financial institutions representing more
than 5% of net assets:
AMBAC 5.3%
(a) Effective yield (calculated at the date of purchase) is the yield at which
the bond accretes on an annual basis until maturity date.
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
COP Certficates of Participation
EDA Economic Development Authority
ETM Escrowed to Maturity
FGIC Insured by Federal Guaranty Insurance Corporation
FNMA Guaranteed by Federal National Mortgage Association
GNMA Guaranteed by Government National Mortgage Association
GO General Obligation
HFA Housing Finance Authority
IDA Industrial Development Authority
IDRB Industrial Development Revnue Bond
IDRRB Industrial Development Refunding Revnue Bond
IFA Industrial Finance Agency
LOC Letter of Credit
MBIA Insured by Municipal Bond Investors Assurance Corporation
MHRB Multifamily Housing Revenue Bond
MHRRB Multifamily Housing Refunding Revenue Bond
PCRB Pollution Control Revenue Bond
PCRRB Pollution Control Refunding Revenue Bond
RB Revenue Bond
RRB Refunding Revenue Bond
SFHRB Single Family Housing Revenue Bond
See Combined Notes to Financial Statements.
35
<PAGE>
EVERGREEN
National Municipal Bond Funds
Statements of Assets and Liabilities
November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Short
High Grade Intermediate
Fund Municipal Fund Fund
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Identified cost of securities..... $135,062,965 $1,065,188,630 $162,209,785
Net unrealized losses on
securities....................... (886,196) (27,057,360) (1,690,540)
- ---------------------------------------------------------------------------------
Market value of securities........ 134,176,769 1,038,131,270 160,519,245
Cash.............................. 0 725 5,694
Receivable for securities sold.... 0 72,140 0
Receivable for Fund shares sold... 65,871 0 140,481
Dividends and interest
receivable....................... 2,252,619 17,409,856 2,944,826
Prepaid expenses and other
assets........................... 33,764 210,095 26,733
- ---------------------------------------------------------------------------------
Total assets...................... 136,529,023 1,055,824,086 163,636,979
- ---------------------------------------------------------------------------------
Liabilities
Distributions payable............. 217,260 2,150,340 444,714
Payable for securities purchased.. 2,448,763 14,917,377 0
Payable for Fund shares redeemed.. 242,882 2,116,810 605,851
Payable for daily variation margin
on open futures contracts........ 13,500 201,375 0
Advisory fee payable.............. 65,304 385,618 67,229
Distribution Plan expenses
payable.......................... 66,954 471,543 4,617
Due to other related parties...... 2,559 0 0
Accrued expenses and other
liabilities...................... 17,831 380,573 62,027
- ---------------------------------------------------------------------------------
Total liabilities................. 3,075,053 20,623,636 1,184,438
- ---------------------------------------------------------------------------------
Net assets........................ $133,453,970 $1,035,200,450 $162,452,541
- ---------------------------------------------------------------------------------
Net assets represented by
Paid-in capital................... $138,927,843 $1,088,375,423 $164,556,344
Undistributed (overdistributed)
net investment income............ 105,058 639,715 (12,857)
Accumulated net realized losses on
securities and futures
contracts........................ (4,648,297) (27,151,899) (400,406)
Net unrealized losses on
securities and futures
contracts........................ (930,634) (26,662,789) (1,690,540)
- ---------------------------------------------------------------------------------
Total net assets.................. $133,453,970 $1,035,200,450 $162,452,541
- ---------------------------------------------------------------------------------
Net assets consists of
Class A........................... $ 60,165,743 $ 944,818,057 $ 8,366,856
Class B........................... 49,082,516 82,694,791 5,843,906
Class C........................... 1,951,961 7,541,151 0
Class Y........................... 22,253,750 146,451 148,241,779
- ---------------------------------------------------------------------------------
Total net assets.................. $133,453,970 $1,035,200,450 $162,452,541
- ---------------------------------------------------------------------------------
Shares outstanding
Class A........................... 5,930,548 136,588,045 848,376
Class B........................... 4,837,919 11,954,937 592,550
Class C........................... 192,397 1,090,173 0
Class Y........................... 2,193,531 21,172 15,031,248
- ---------------------------------------------------------------------------------
Net asset value per share
Class A........................... $ 10.15 $ 6.92 $ 9.86
- ---------------------------------------------------------------------------------
Class A--Offering price (based on
sales charge of 4.75%, 4.75% and
3.25%, respectively)............. $ 10.66 $ 7.27 $ 10.19
- ---------------------------------------------------------------------------------
Class B........................... $ 10.15 $ 6.92 $ 9.86
- ---------------------------------------------------------------------------------
Class C........................... $ 10.15 $ 6.92 --
- ---------------------------------------------------------------------------------
Class Y........................... $ 10.15 $ 6.92 $ 9.86
- ---------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
36
<PAGE>
EVERGREEN
National Municipal Bond Funds
Statements of Operations
Six Months Ended November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Short
High Grade Municipal Intermediate
Fund Fund Fund
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment income
Interest............................ $ 3,672,849 $ 31,995,120 $ 3,967,755
- --------------------------------------------------------------------------------
Expenses
Advisory fee........................ 335,365 2,411,217 417,906
Distribution Plan expenses.......... 316,166 1,724,941 34,086
Transfer agent fee.................. 61,596 590,329 18,773
Administrative services fees........ 7,058 89,813 0
Trustees' fees and expenses......... 1,344 11,205 1,808
Custodian fee....................... 22,622 168,892 28,178
Registration and filing fees........ 15,400 49,217 16,089
Printing and postage expenses....... 10,628 168,232 9,658
Professional fees................... 12,285 27,034 13,577
Other............................... 1,399 32,591 10,341
- --------------------------------------------------------------------------------
Total expenses.................... 783,863 5,273,471 550,416
Less: Fee credits................. (2,587) (25,976) (3,104)
- --------------------------------------------------------------------------------
Net expenses...................... 781,276 5,247,495 547,312
- --------------------------------------------------------------------------------
Net investment income................ 2,891,573 26,747,625 3,420,443
================================================================================
Net realized and unrealized gains or
losses on securities and futures
contracts
Net realized gains or losses on:
Securities......................... (4,762,446) (26,786,505) (387,732)
Futures contracts.................. 192,809 964,764 0
- --------------------------------------------------------------------------------
Net realized losses on securities and
futures contracts................... (4,569,637) (25,821,741) (387,732)
- --------------------------------------------------------------------------------
Net change in unrealized losses on
securities and futures contracts.... (4,433,879) (56,050,442) (2,865,992)
- --------------------------------------------------------------------------------
Net realized and unrealized losses on
securities and futures contracts.... (9,003,516) (81,872,183) (3,253,724)
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations........... $(6,111,943) $(55,124,558) $ 166,719
================================================================================
</TABLE>
See Combined Notes to Financial Statements
37
<PAGE>
EVERGREEN
National Municipal Bond Funds
Statements of Changes in Net Assets
Six Months Ended November 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Short
High Grade Municipal Intermediate
Fund Fund Fund
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations
Net investment income............ $ 2,891,573 $ 26,747,625 $ 3,420,443
Net realized gains or losses on
securities and futures contracts.... (4,569,637) (25,821,741) (387,732)
Net change in unrealized losses
on securities and futures
contracts....................... (4,433,879) (56,050,442) (2,865,992)
- -------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operation. (6,111,943) (55,124,558) 166,719
- ----------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income............
Class A......................... (1,455,313) (24,576,573) (164,594)
Class B......................... (861,052) (1,700,100) (93,688)
Class C......................... (27,801) (151,819) 0
Class Y......................... (533,334) (3,465) (3,155,461)
Net realized gains
Class A......................... (886,168) (5,315,286) (56,794)
Class B......................... (723,643) (465,890) (40,076)
Class C......................... (28,625) (42,381) 0
Class Y......................... (326,940) (792) (1,024,921)
- -------------------------------------------------------------------------------
Total distributions to
shareholders................... (4,842,876) (32,256,306) (4,535,534)
- -------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold........ 16,385,370 161,142,457 21,932,360
Payment for shares redeemed...... (34,288,402) (266,719,958) (31,406,887)
Net asset value of shares issued
in reinvestment of
distributions................... 3,047,238 16,959,380 1,763,554
Net asset value of shares issued
in acquisition of other
investment companies............ 41,894,184 26,411,291 0
- -------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from capital
share transactions............. 27,038,390 (62,206,830) (7,710,973)
- -------------------------------------------------------------------------------
Total increase (decrease) in
net assets.................... 16,083,571 (149,587,694) (12,079,788)
Net assets
Beginning of period.............. 117,370,399 1,184,788,144 174,532,329
- -------------------------------------------------------------------------------
End of period.................... $133,453,970 $1,035,200,450 $162,452,541
- -------------------------------------------------------------------------------
Undistributed (overdistributed)
net investment income........... $ 105,058 $ 639,715 $ (12,857)
- -------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
38
<PAGE>
EVERGREEN
National Municipal Bond Funds
Statements of Changes in Net Assets
Year Ended May 31, 1999
<TABLE>
<CAPTION>
Short
High Grade Municipal Intermediate
Fund Fund Fund
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations
Net investment income............. $ 5,122,886 $ 57,042,037 $ 6,980,138
Net realized gains on securities
and futures contracts............ 3,299,428 23,258,046 1,924,186
Net change in unrealized losses
on securities and futures
contracts........................ (4,092,412) (32,853,414) (1,867,258)
- --------------------------------------------------------------------------------
Net increase in net assets
resulting from operations....... 4,329,902 47,446,669 7,037,066
- --------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income
Class A.......................... (2,850,300) (52,828,617) (275,716)
Class B.......................... (1,160,127) (4,001,229) (186,375)
Class C.......................... (4) (276,027) 0
Class Y.......................... (1,128,806) (4) (6,537,604)
Net realized gains
Class A.......................... (1,616,602) (35,326,187) (56,521)
Class B.......................... (780,637) (3,564,827) (44,004)
Class C.......................... 0 (220,155) 0
Class Y.......................... (641,983) 0 (1,185,596)
- --------------------------------------------------------------------------------
Total distributions to
shareholders.................... (8,178,459) (96,217,046) (8,285,816)
- --------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold......... 18,319,059 197,057,932 59,101,241
Payment for shares redeemed....... (26,775,934) (393,166,651) (65,832,372)
Net asset value of shares issued
in reinvestment of
distributions.................... 5,405,970 53,968,092 2,248,570
Net asset value of shares issued
in acquisition of other
investment companies............. 1,945,718 0 0
- --------------------------------------------------------------------------------
Net decrease in net assets
resulting from capital share
transactions................... (1,105,187) (142,140,627) (4,482,561)
- --------------------------------------------------------------------------------
Total decrease in net assets... (4,953,744) (190,911,004) (5,731,311)
Net assets
Beginning of period............... 122,324,143 1,375,699,148 180,263,640
- --------------------------------------------------------------------------------
End of period..................... $117,370,399 $1,184,788,144 $174,532,329
- --------------------------------------------------------------------------------
Undistributed (overdistributed)
net investment income............. $ 90,985 $ 324,047 $ (19,557)
- --------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
39
<PAGE>
Combined Notes to Financial Statements (Unaudited)
1. ORGANIZATION
The Evergreen National Municipal Bond Funds consist of Evergreen High Grade Mu-
nicipal Bond Fund ("High Grade Fund"), Evergreen Municipal Bond Fund ("Munici-
pal Fund") and Evergreen Short Intermediate Municipal Fund ("Short Intermediate
Fund"), (collectively, the "Funds"). Each Fund is a diversified series of Ever-
green Municipal Trust (the "Trust"), a Delaware business trust organized on
September 18, 1997. The Trust is an open-end management investment company reg-
istered under the Investment Company Act of 1940, as amended (the "1940 Act").
The Funds offer Class A, Class B, Class C and/or Class Y shares. Class A shares
are sold with a maximum front-end sales charge of 4.75% for both High Grade
Fund and Municipal Fund and a maximum front-end sales charge of 3.25% for the
Short Intermediate Fund. 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 shares are sold subject to a contingent deferred sales charge that is payable
upon redemption and decreases depending on how long the shares have been held.
Class B shares purchased after January 1, 1997 will automatically convert to
Class A shares after seven years. Class B shares purchased prior to January 1,
1997 follow the conversion rights at the time the shares were purchased. Class
C shares are sold subject to a contingent deferred sales charge payable on
shares redeemed within one year after the month of purchase. Class Y shares are
sold at net asset value and are not subject to contingent deferred sales
charges or distribution fees. Class Y shares are sold only to investment advi-
sory clients of First Union Corporation ("First Union") and its affiliates,
certain institutional investors or Class Y shareholders of record of certain
other funds managed by First Union and its affiliates as of December 30, 1994.
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
An independent pricing service values each Fund's municipal bonds at fair value
using a variety of factors which may include yield, liquidity, interest rate
risk, credit quality, coupon, maturity and type of issue. Securities for which
valuations are not available from an independent 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 simi-
lar characteristics. Otherwise, securities for which valuations are not avail-
able from an independent pricing service (including restricted securities) are
valued at fair value as determined in good faith according to procedures estab-
lished by the Board of Trustees.
Mutual fund shares held for short-term investment are valued at net asset val-
ue. Short-term investments with remaining maturities of 60 days or less are
carried at amortized cost, which approximates market value.
B. 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 trans-
action is subsequently adjusted by daily payments or receipts ("variation mar-
gin") 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 the statement of
assets and liabilities.
40
<PAGE>
Combined Notes to Financial Statements(Unaudited) (continued)
C. 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.
D. Federal Taxes
The Funds have qualified and intend to continue to qualify as regulated invest-
ment companies under the Internal Revenue Code of 1986, as amended (the
"Code"). Thus, the Funds will not incur any federal income tax liability since
they are expected to distribute all of their net investment company taxable in-
come, net tax-exempt income and net capital gains, if any, to their sharehold-
ers. The Funds also intend to avoid any excise tax liability by making the re-
quired distributions under the Code. Accordingly, no provision for federal
taxes is required. To the extent that realized capital gains can be offset by
capital loss carryforwards, it is each Fund's policy not to distribute such
gains.
E. Distributions
Distributions from net investment income for the Funds are declared daily and
paid monthly. Distributions from net realized capital gains, if any, are paid
at least annually. Distributions to shareholders are recorded at the close of
business on the ex-dividend date.
Income and capital gains distributions to shareholders are determined in accor-
dance with income tax regulations, which may differ from generally accepted ac-
counting principles.
F. 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.
G. Derivative Securities
The Municipal Fund may invest in derivative securities. A derivative security
is any investment that derives its value from and underlying security, asset or
market index. Greater market fluctuations may result if these securities are
leveraged. The Fund invests in these types of securities when it is consistent
with its investment objectives.
3. INVESTMENT ADVISORY AGREEMENT AND OTHER AFFILIATED TRANSACTIONS
First Union National Bank ("FUNB"), a subsidiary of First Union, serves as the
investment advisor to the High Grade Fund and is paid a management fee that is
computed and paid monthly at an annual rate of 0.50% of the Fund's average
daily net assets.
Evergreen Investment Management Company ("EIMC"), a subsidiary of First Union,
is the investment advisor for Municipal Fund. In return for providing invest-
ment management and administrative services to Municipal Fund, the Fund pays
EIMC a management fee that is computed daily and paid monthly. The management
fee is computed daily at an annual rate of 2.00% of Municipal Fund's gross in-
vestment income plus an amount determined by applying percentage rates starting
at 0.50% and declining to 0.25% per annum as net assets increase, to the aver-
age daily net assets of the Fund.
Evergreen Asset Management Corp. ("EAMC"), a wholly-owned subsidiary of First
Union, serves as the investment advisor to the Short Intermediate Fund and is
paid a management fee that is computed daily and paid monthly at an annual rate
of 0.50% of the Fund's average daily net assets.
Lieber & Company, an affiliate of First Union, is the investment sub-advisor to
Short Intermediate Fund. Lieber & Company is reimbursed by EAMC for providing
investment sub-advisory services at no additional expense to the Short Interme-
diate Fund.
Evergreen Investment Services ("EIS"), a subsidiary of First Union, serves as
the administrator and The BISYS Group, Inc. ("BISYS") serves as the sub-admin-
istrator to each of the Funds. As administrator, EIS provides the
41
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
Funds with facilities, equipment and personnel. As sub-administrator to the
Funds, BISYS provides the officers of the Funds. Officers of the Funds and af-
filiated Trustees receive no compensation directly from the Funds.
The administrator and sub-administrator for the High Grade Fund are entitled to
an annual fee based on the average daily net assets of the funds administered
by EIS for which First Union or its investment advisory subsidiaries are also
the investment advisors. The administration fee is calculated by applying per-
centage rates, which start at 0.05% and decline to 0.01% per annum as net as-
sets increase, to the average daily net assets of the Fund. The sub-administra-
tion fee is calculated by applying percentage rates, which start at 0.01% and
decline to 0.004% per annum as net assets increase, to the average daily net
assets of the Fund.
During the six months ended November 30, 1999, the High Grade Fund paid or ac-
crued $3,564 and $3,494, respectively, for administrative and sub-administra-
tive services.
For the Municipal Fund and Short Intermediate Fund, the administration and sub-
administration fees are paid by the investment advisor and is not a fund ex-
pense. During the six months ended November 30, 1999, the Municipal Fund reim-
bursed EIMC $89,813 for providing certain administration and accounting servic-
es.
Evergreen Service Company ("ESC"), an indirect, wholly owned subsidiary of
First Union, serves as the transfer and dividend disbursing agent for the
Funds.
4. DISTRIBUTION PLANS
Evergreen Distributor, Inc. ("EDI"), a wholly owned subsidiary of BISYS, serves
as principal underwriter to the Funds.
Each Fund has adopted Distribution Plans, as allowed by Rule 12b-1 of the 1940
Act, for each class of shares, except Class Y. Distribution plans permit a Fund
to compensate its principal underwriter for costs related to selling shares of
the Fund and for various other services. These costs, which consist primarily
of commissions and service fees to broker-dealers who sell shares of the Fund,
are paid by the Fund through "Distribution Plan expenses". Under the Distribu-
tion Plans, Class A incurs distributions fees equal to 0.25% of the average
daily net asset of the class, except Class A of Short Intermediate which incurs
distributions fees equal to 0.10% of the average daily net assets of the class,
all of which is used to pay for shareholder service fees. Class B and Class C
incur distribution fees equal to 1.00% of the average daily net assets of each
class. Of this amount, 0.25% of the distribution fees incurred is used to pay
for shareholder service fees and 0.75% is used to pay for distribution-related
costs. Distribution Plan expenses are calculated daily and paid at least quar-
terly.
During the six months ended November 30, 1999, amounts paid or accrued to EDI
pursuant to each Fund's Class A, Class B, Class C Distribution Plans were as
follows:
<TABLE>
<CAPTION>
Class A Class B Class C
----------------------------
<S> <C> <C> <C>
High Grade Fund.................... $ 80,815 $228,098 $ 7,253
Municipal Fund..................... 1,272,772 415,134 37,035
Short Intermediate Fund............ 4,082 30,004 0
</TABLE>
With respect to Class B, Class C shares, the principal underwriter may pay dis-
tribution fees greater than the allowable annual amounts each Fund is permitted
to pay under the Distribution Plans.
Each of the Distribution Plans may be terminated at any time by vote of the In-
dependent Trustees or by vote of a majority of the outstanding voting shares of
the respective class.
42
<PAGE>
Combined Notes to Financial Statements(Unaudited) (continued)
5. ACQUISITIONS
Effective on the close of business on July 30, 1999, High Grade Fund acquired
substantially all the assets and assumed certain liabilities of Evergreen Cali-
fornia Municipal Bond Fund ("California Fund") and Evergreen New York Municipal
Bond Fund ("New York Fund"), both open-end management investment companies reg-
istered under the 1940 Act, in an exchange of shares for Class A, Class B,
Class C and/or Class Y shares of High Grade Fund.
Effective on the close of business on July 30, 1999, Municipal Fund acquired
substantially all the assets and assumed certain liabilities of Evergreen Mas-
sachusetts Municipal Bond Fund ("Massachusetts Fund") and Evergreen Missouri
Municipal Bond Fund ("Missouri Fund"), both open-end management investment com-
panies registered under the 1940 Act, in an exchange of Class A, Class B and
Class C shares of Municipal Fund.
Effective on the close of business on July 24, 1998, High Grade Fund acquired
substantially all the assets and assumed certain liabilities of CoreFund Inter-
mediate Municipal Bond Fund ("CoreFund Intermediate"), an open-end management
investment company registered under the 1940 Act, in an exchange of shares for
Class A, Class B, Class C and/or Class Y shares of High Grade Fund.
These acquisitions were accomplished by a tax-free exchange of the respective
shares of each Fund. The value of net assets acquired, number of shares issued,
unrealized appreciation/(depreciation) acquired and the aggregate net assets of
each Fund immediately after the acquisition were as follows:
<TABLE>
<CAPTION>
Unrealized
Value of Net Number of Appreciation/ Net Assets
Acquiring Fund Acquired Fund Assets Acquired Shares Issued (Depreciation) After Acquisition
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
High Grade Fund......... CoreFund Intermediate $ 1,945,718 171,570 $ 51,328 $ 127,732,184
------------------------------------------------------------
High Grade Fund......... California Fund $20,712,329 1,929,521 $546,303
High Grade Fund......... New York Fund 21,181,855 1,973,255 164,251
------------------------------------------------------------
$41,894,184 3,902,776 $710,554 $ 154,453,020
------------------------------------------------------------
Municipal Fund.......... Massachusetts Fund $ 7,793,202 1,070,536 $(23,637)
Municipal Fund.......... Missouri Fund 18,618,089 2,557,538 64,815
------------------------------------------------------------
$26,411,291 3,628,074 $ 41,178 $1,149,023,461
------------------------------------------------------------
</TABLE>
43
<PAGE>
Combined Notes to Financial Statements(Unaudited) (continued)
6. Capital Share Transactions
The Funds have an unlimited number of shares of beneficial interest with $0.001
par value authorized. Shares of beneficial interest of the Funds are currently
divided into Class A, Class B, Class C and/or Class Y. Transactions in shares
of the Funds were as follows:
High Grade Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
November 30, 1999 May 31, 1999
------------------------ ------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold................ 1,263,017 $ 13,238,349 751,068 $ 8,521,661
Automatic Conversion of
Class B shares to Class A
shares.................... 0 0 1,811 20,337
Shares redeemed............ (2,054,457) (21,578,344) (1,053,272) (11,920,506)
Shares issued in
reinvestment of
distributions............. 143,021 1,479,271 270,601 3,051,015
Shares issued in
acquisition of:
CoreFund Intermediate
Municipal Bond Fund..... 0 0 76,637 869,114
California Fund.......... 513,840 5,515,701 0 0
New York Fund............ 340,061 3,650,317 0 0
- --------------------------------------------------------------------------------
Net increase............... 205,482 2,305,294 46,845 541,621
- --------------------------------------------------------------------------------
Class B
Shares sold................ 78,291 829,722 412,546 4,682,255
Automatic Conversion of
Class B shares to Class A
shares.................... 0 0 (1,811) (20,337)
Shares redeemed............ (858,265) (8,978,112) (491,173) (5,569,981)
Shares issued in
reinvestment of
distributions............. 88,866 916,271 107,295 1,209,317
Shares issued in
acquisition of:
California Fund.......... 1,280,928 13,750,122 0 0
New York Fund............ 1,332,981 14,308,891 0 0
- --------------------------------------------------------------------------------
Net increase............... 1,922,801 20,826,894 26,857 301,254
- --------------------------------------------------------------------------------
Class C*
Shares sold................ 8,462 87,841 90 1,000
Shares redeemed............ (49,821) (516,005) 0 0
Shares issued in
reinvestment of
distributions............. 3,856 39,508 0 4
Shares issued in
acquisition of:
California Fund.......... 134,753 1,446,506 0 0
New York Fund............ 95,057 1,020,389 0 0
- --------------------------------------------------------------------------------
Net increase............... 192,307 2,078,239 90 1,004
- --------------------------------------------------------------------------------
Class Y
Shares sold................ 210,999 2,229,458 452,470 5,114,143
Shares redeemed............ (304,632) (3,215,941) (824,354) (9,285,447)
Shares issued in
reinvestment of
distributions............. 59,351 612,188 101,709 1,145,634
Shares issued in
acquisition of:
CoreFund Intermediate
Municipal Bond Fund..... 0 0 94,933 1,076,604
New York Fund............ 205,156 2,202,258 0 0
- --------------------------------------------------------------------------------
Net increase (decrease).... 170,874 1,827,963 (175,242) (1,949,066)
- --------------------------------------------------------------------------------
Net increase (decrease).... $ 27,038,390 $ (1,105,187)
- --------------------------------------------------------------------------------
</TABLE>
* For the period from April 30, 1999 (Commencement of Operations) to May 31,
1999.
44
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
MUNICIPAL FUND
<TABLE>
<CAPTION>
Six Months Ended Year Ended
November 30, 1999 May 31, 1999
-------------------------- --------------------------
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold............. 22,140,188 $ 158,373,231 23,978,424 $ 182,234,205
Automatic Conversion of
Class B shares to Class
A shares............... 0 0 4,188,100 31,927,957
Shares redeemed......... (35,491,078) (253,947,392) (47,475,315) (362,485,428)
Shares issued in
reinvestment of
distributions.......... 2,237,804 15,826,094 6,444,544 49,344,612
Shares issued in
acquisition of:
Massachusetts Fund..... 274,088 1,995,306 0 0
Missouri Fund.......... 418,545 3,046,937 0 0
- ----------------------------------------------------------------------------------
Net (decrease).......... (10,420,453) (74,705,824) (12,864,247) (98,978,654)
- ----------------------------------------------------------------------------------
Class B
Shares sold............. 308,386 2,215,112 1,822,072 13,980,072
Automatic Conversion of
Class B shares to Class
A shares............... 0 0 (4,188,253) (31,927,957)
Shares redeemed......... (1,641,845) (11,738,031) (3,771,056) (28,951,245)
Shares issued in
reinvestment of
distributions.......... 144,789 1,023,724 556,665 4,265,017
Shares issued in
acquisition of:
Massachusetts Fund..... 631,521 4,597,283 0 0
Missouri Fund.......... 2,062,424 15,013,754 0 0
- ----------------------------------------------------------------------------------
Net increase
(decrease)............. 1,505,275 11,111,842 (5,580,572) (42,634,113)
- ----------------------------------------------------------------------------------
Class C
Shares sold............. 38,002 266,641 109,350 842,655
Shares redeemed......... (126,705) (897,992) (224,935) (1,729,978)
Shares issued in
reinvestment of
distributions.......... 15,061 106,851 46,787 358,459
Shares issued in
acquisition of:
Massachusetts Fund..... 164,927 1,200,616 0 0
Missouri Fund.......... 76,569 557,395 0 0
- ----------------------------------------------------------------------------------
Net increase
(decrease)............. 167,854 1,233,511 (68,798) (528,864)
- ----------------------------------------------------------------------------------
Class Y*
Shares sold............. 39,855 287,473 132 1,000
Shares redeemed......... (19,204) (136,543) 0 0
Shares issued in
reinvestment of
distributions.......... 389 2,711 0 4
- ----------------------------------------------------------------------------------
Net increase............ 21,040 153,641 132 1,004
- ----------------------------------------------------------------------------------
Net (decrease).......... $ (62,206,830) $(142,140,627)
- ----------------------------------------------------------------------------------
*For the period from April 30, 1999 (Commencement of Operations) to May 31,
1999.
SHORT INTERMEDIATE FUND
<CAPTION>
Six Months Ended Year Ended
November 30, 1999 May 31, 1999
-------------------------- --------------------------
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold............. 203,338 $ 2,026,060 1,277,930 $ 13,013,571
Automatic Conversion of
Class B shares to Class
A shares............... 0 0 9,774 114,565
Shares redeemed......... (156,295) (1,557,243) (1,160,473) (11,819,868)
Shares issued in
reinvestment of
distributions.......... 13,507 134,187 15,911 162,316
- ----------------------------------------------------------------------------------
Net increase............ 60,550 603,004 143,142 1,470,584
- ----------------------------------------------------------------------------------
Class B
Shares sold............. 44,961 448,574 150,861 1,539,699
Automatic Conversion of
Class B shares to Class
A shares............... 0 0 (9,774) (114,565)
Shares redeemed......... (77,330) (771,698) (109,499) (1,103,599)
Shares issued in
reinvestment of
distributions.......... 9,261 91,984 15,998 163,268
- ----------------------------------------------------------------------------------
Net increase
(decrease)............. (23,108) (231,140) 47,586 484,803
- ----------------------------------------------------------------------------------
Class Y
Shares sold............. 1,952,541 19,457,726 4,363,929 44,547,971
Shares redeemed......... (2,915,467) (29,077,946) (5,186,456) (52,908,905)
Shares issued in
reinvestment of
distributions.......... 155,269 1,537,383 188,565 1,922,986
- ----------------------------------------------------------------------------------
Net (decrease).......... (807,657) (8,082,837) (633,962) (6,437,948)
- ----------------------------------------------------------------------------------
Net (decrease).......... $ (7,710,973) $ (4,482,561)
- ----------------------------------------------------------------------------------
</TABLE>
45
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
7. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (excluding
short-term securities) were as follows for the six months ended November 30,
1999:
<TABLE>
<CAPTION>
Cost of Proceeds
Purchases from Sales
--------------------------
<S> <C> <C>
High Grade Fund....................... $ 69,756,351 $ 84,501,580
Municipal Fund........................ 356,949,584 477,795,120
Short Intermediate Fund............... 12,505,573 22,471,667
</TABLE>
On July 30, 1999 High Grade Fund acquired securities with a cost basis of
$18,034,707 and $17,825,650 resulting from the Fund's acquisition of California
Fund and New York Fund, respectively.
On July 30, 1999 Municipal Fund acquired securities with a cost basis of
$6,932,979 and $17,694,090 resulting from the Fund's acquisition of Massachu-
setts Fund and Missouri Fund, respectively.
8. EXPENSE OFFSET ARRANGEMENTS
The Funds have entered into expense offset arrangements with ESC and their cus-
todian whereby credits realized as a result of uninvested cash balances were
used to reduce a portion of each Fund's related expenses. The assets deposited
with ESC and the custodian under these expense offset arrangements could have
been invested in income-producing assets. The amount of fee credits received by
each Fund and the impact on each Fund's expense ratio represented as a percent-
age of its average net assets were as follows:
<TABLE>
<CAPTION>
Total
Fee Credits % of Average
Received Net Assets
----------------------
<S> <C> <C>
High Grade Fund........................ $ 2,587 0.00%
Municipal Fund......................... $25,976 0.00%
Short Intermediate Fund................ $ 3,104 0.00%
</TABLE>
9. DEFERRED TRUSTEES' FEES
Each Independent Trustee of each Fund may defer any or all compensation related
to performance of their duties as Trustees. The Trustees' deferred balances are
allocated to deferral accounts, which are included in the accrued expenses for
the Fund. The investment performance of the deferral accounts are based on the
investment performance of certain Evergreen Funds. Any gains earned or losses
incurred in the deferral accounts are reported in the Fund's Trustees' fees and
expenses. Trustees will be paid either in one lump sum or in quarterly install-
ments for up to ten years at their election, not earlier than either the year
in which the Trustee ceases to be a member of the Board of Trustees or January
1, 2000.
10. FINANCING AGREEMENTS
An amended and renewed financing agreement became effective on December 22,
1998 among all of the Evergreen Funds and State Street Bank and Trust ("State
Street") and The Bank of New York ("BONY") (collectively, "the Banks"). Under
this agreement, State Street and BONY provided an unsecured credit facility in
the aggregate amount of $150 million ($125 million committed and $25 million
uncommitted). The credit facility was allocated, under the terms of the financ-
ing agreement, among the Banks. The credit facility was accessed by the Funds
for temporary or emergency purposes only and was subject to each Fund's borrow-
ing restrictions. Borrowings under this facility bore interest at 0.50% per an-
num above the Federal Funds rate. A commitment fee of 0.065% per annum was in-
curred on the unused portion of the committed facility, which was allocated to
all funds. State Street served as administrative agent for the Banks, and as
administrative agent was entitled to a fee of $20,000 per annum which was allo-
cated to all of the funds. This agreement was terminated on July 27, 1999.
On July 27, 1999, all of the Evergreen Funds and a group of banks (the "Lend-
ers") entered into a credit agreement. Under this agreement, the Lenders pro-
vide an unsecured revolving credit commitment in the aggregate amount of $1.050
billion. The credit facility is allocated, under the terms of the financing
agreement,
46
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
among the Lenders. The credit facility is accessed by the Funds for temporary
of emergency purposes to fund the redemption of their shares or a general work-
ing capital as permitted by each Fund's borrowing restrictions. Borrowings un-
der this facility bear 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 in-
cluding December 1, 1999 through and including January 31, 2000). A commitment
fee of 0.10% per annum is incurred on the average daily unused portion of the
revolving credit commitment. The commitment fee is allocated to all funds. For
its assistance in arranging this financing agreement, First Union Capital Mar-
kets Corp. was paid a one-time arrangement fee of $250,000. State Street serves
as paying agent for the funds and as paying agent is entitled to a fee of
$20,000 per annum which is allocated to all the funds.
47
<PAGE>
Evergreen Funds
Money Market
Treasury Money Market Fund
Money Market Fund
Municipal Money Market Fund
Florida Municipal Money Market Fund
New Jersey Municipal Money Market Fund
Pennsylvania Municipal Money Market Fund
Tax Advantaged
Short Intermediate Municipal Fund
High Grade Municipal Bond Fund
Municipal Bond Fund
Connecticut Municipal Bond Fund
Florida Municipal Bond Fund
Florida High Income Municipal Bond Fund
Georgia Municipal Bond Fund
Maryland Municipal Bond Fund
New Jersey Municipal Bond Fund
North Carolina Municipal Bond Fund
Pennsylvania Municipal Bond Fund
South Carolina Municipal Bond Fund
Virginia Municipal Bond Fund
Income
Capital Preservation and Income Fund
Short Intermediate Bond Fund
Intermediate Term Bond Fund
U.S. Government Fund
Diversified Bond Fund
Strategic Income Fund
High Yield Bond Fund
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