1933 Act No. 333-37433
1940 Act No. 811-07246
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 4 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 4 [X]
EVERGREEN FIXED INCOME TRUST
(Exact Name of Registrant as Specified in Charter)
200 Berkeley Street, Boston, Massachusetts 02116-5034
(Address of Principal Executive Offices)
(617) 210-3200
(Registrant's Telephone Number)
The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b)
[X] on November 1, 1998 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(2)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
<PAGE>
EVERGREEN FIXED INCOME TRUST
CONTENTS OF
POST-EFFECTIVE AMENDMENT NO. 4
to
REGISTRATION STATEMENT
This Post-Effective Amendment No.4 to Registrant's Registration Statement
No. 333-37433/811-07246 consists of the following pages, items of information
and documents:
The Facing Sheet
The Contents Page
The Cross-Reference Sheet
PART A
------
Prospectuses for Evergreen Short-Intermediate Bond Fund, Evergreen
Intermediate Term Government Securities Fund, Evergreen Capital Preservation
and Income Fund and Evergreen Intermediate Term Bond Fund are contained herein.
Prospectuses for the following funds are contained in Registration Statement
No. 333-37433/811-07246 filed on August 31, 1998: Evergreen U.S.
Government Fund, Evergreen Strategic Income Fund, Evergreen Diversified
Bond Fund and Evergreen High Yield Bond Fund.
PART B
------
The Statement of Additional Information for Evergreen Short-Intermediate
Term Bond Fund, Evergreen Intermediate Term Government Securities Fund,
Evergreen Capital Preservation and Income Fund and Evergreen Intermediate
Term Bond Fund is contained herein.
The Statement of Additional Information for Evergreen U.S. Government Fund,
Evergreen Strategic Income Fund, Evergreen Diversified Bond Fund and Evergreen
High Yield Bond Fund is contained in the Registration Statement
No. 333-37433/811-07246 filed on August 31, 1998.
PART C
------
Financial Statements
Exhibits
Number of Holders of Securities
Indemnification
Business and Other Connections of Investment Adviser
Principal Underwriter
Location of Accounts and Records
Management Services
Undertakings
Signatures
<PAGE>
EVERGREEN FIXED INCOME TRUST
Cross-Reference Sheet pursuant to Rules 404 and 495 under the Securities
Act of 1933.
<TABLE>
<CAPTION>
N-1A Item No.
Part A Location in Prospectus(es)
- ------ --------------------------
<S> <C>
Item 1. Cover Page Cover Page
Item 2. Synopsis and Fee Table Expense Information; Performance Data
Item 3. Condensed Financial Information Financial Highlights
Item 4. General Description of Registrant Cover Page; Description of the Funds; Investment Objectives
and Policies; Investment Practices and Restrictions; General Information
Item 5. Management of the Fund Organization and Service Providers; Expenses
Item 6. Capital Stock and Other Securities Description of the Funds; Dividends, Distributions and Taxes; General Information;
Shareholder Services
Item 7. Purchase of Securities Being Offered Dividends, Distributions and Taxes; How to Buy Shares; Exchange Privilege;
Shareholders Services
Item 8. Redemption or Repurchase How to Redeem Shares
Item 9. Pending Legal Proceedings Not Applicable
Location in Statement of
Part B Additional Information
- ------ ------------------------
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History Not Applicable
Item 13. Investment Objectives and Policies Fund Investments; Appendix
Item 14. Management of the Fund Management of the Trust
Item 15. Control Persons and Principal Principal Holders of Fund Shares
Holders of Securities
Item 16. Investment Advisory and Other Services Additional Information; Distribution Plans and Agreements; Expenses; Investment
Advisors; Principal Underwriter; Additional Service Providers
Item 17. Brokerage Allocation Brokerage
Item 18. Capital Stock and Other Securities Trust Organization
Item 19. Purchase, Redemption and Pricing of Purchase, Redemption and Pricing of Shares; Distribution Plans and Agreements;
Securities Being Offered Additional Information
Item 20. Tax Status Additional Tax Information
Item 21. Underwriters Principal Underwriter
Item 22. Calculation of Performance Data Performance
Item 23. Financial Statements Financial Statements
</TABLE>
Part C
- ------
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Registration Statement.
<PAGE>
EVERGREEN FIXED INCOME TRUST
PART A
PROSPECTUSES
<PAGE>
- -------------------------------------------------------------------------------
PROSPECTUS November 1, 1998
- -------------------------------------------------------------------------------
[LOGO OF EVERGREEN FUNDS
EVERGREEN(SM) SHORT AND INTERMEDIATE TERM BOND FUNDS APPEARS HERE]
- -------------------------------------------------------------------------------
EVERGREEN SHORT-INTERMEDIATE BOND FUND
EVERGREEN INTERMEDIATE TERM GOVERNMENT SECURITIES FUND
EVERGREEN CAPITAL PRESERVATION AND INCOME FUND
EVERGREEN INTERMEDIATE TERM BOND FUND
(Each a "Fund", together, the "Funds")
CLASS A SHARES
CLASS B SHARES
CLASS C SHARES
The Funds are designed to provide investors with a selection of
investment alternatives which seek to provide a high level of current income.
This prospectus provides information regarding the Class A, Class B and
Class C shares offered by the Funds. Each Fund is a series of Evergreen Fixed
Income Trust (the "Trust"), an open-end, diversified, management investment
company. This prospectus sets forth concise information about the Funds that a
prospective investor should know before investing. The address of the Funds is
200 Berkeley Street, Boston, Massachusetts 02116.
A Statement of Additional Information ("SAI") for the Funds dated
November 1, 1998, as supplemented from time to time, has been filed with the
Securities and Exchange Commission ("SEC") and is incorporated by reference
herein. The SAI provides information regarding certain matters discussed in
this prospectus and other matters which may be of interest to investors, and
may be obtained without charge by calling the Funds at (800) 343-2898. There
can be no assurance that the investment objective of any Fund will be
achieved. Investors are advised to read this prospectus carefully.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT INSURED OR OTHERWISE
PROTECTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THE
FUNDS INVOLVES RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Keep This Prospectus For Future Reference
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
EXPENSE INFORMATION....................... 3
FINANCIAL HIGHLIGHTS...................... 5
DESCRIPTION OF THE FUNDS
Investment Objectives and Policies..... 13
Investment Practices and Restrictions.. 16
ORGANIZATION AND SERVICE PROVIDERS........ 21
Service Providers...................... 21
Distribution Plans and Agreements...... 23
PURCHASE AND REDEMPTION OF SHARES
How to Buy Shares...................... 24
How to Redeem Shares................... 27
Exchange Privilege..................... 28
Shareholder Services................... 29
Banking Laws........................... 30
OTHER INFORMATION
Dividends, Distributions and Taxes..... 30
General Information.................... 31
</TABLE>
2
<PAGE>
- --------------------------------------------------------------------------------
EXPENSE INFORMATION
- --------------------------------------------------------------------------------
The tables and examples set forth below summarize the various costs and
expenses a shareholder will bear, directly or indirectly, associated with an
investment in Class A, Class B and Class C shares of each Fund. Shareholder
transaction expenses are fees paid directly from your account when you buy or
sell shares. For further information see "Purchase and Redemption of Shares"
and "General Information--Other Classes of Shares."
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A SHARES CLASS B SHARES CLASS C SHARES
- -------------------------------- -------------- -------------- --------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on
Purchases
(as a % of offering price).... 3.25% None None
Maximum Contingent Deferred
Sales Charge
(as a % of original purchase
price or redemption proceeds,
whichever is lower)........... None(1) 5.00%(2) 1.00%(2)
</TABLE>
Annual operating expenses reflect the normal operating expenses of a Fund,
and include costs such as management, distribution and other fees. The tables
below show estimated annual operating expenses for each Fund for the fiscal
year ending June 30, 1999. The examples show what you would pay if you invested
$1,000 over periods indicated. The examples assume that you reinvest all of
your dividends and that each Fund's average annual return will be 5%. THE
EXAMPLES ARE FOR ILLUSTRATION PURPOSES ONLY AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OR ANNUAL RETURN. THE FUNDS' ACTUAL
EXPENSES AND RETURNS WILL VARY. For a more complete description of the various
costs and expenses borne by the Funds see "Organization and Service Providers".
EVERGREEN SHORT-INTERMEDIATE BOND FUND
EXAMPLES
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES
- -------------------------
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C>
Management
Fees........... 0.50% 0.50% 0.50%
12b-1 Fees(3)... 0.10% 1.00% 1.00%
Other Expenses.. 0.20% 0.20% 0.20%
---- ---- ----
Total........... 0.80% 1.70% 1.70%
==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
ASSUMING REDEMPTION ASSUMING NO
AT END OF PERIOD REDEMPTION
----------------------- ---------------
CLASS A CLASS B CLASS C CLASS B CLASS C
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
After 1 Year............ $ 40 $ 67 $ 27 $ 17 $ 17
After 3 Years........... $ 57 $ 84 $ 54 $ 54 $ 54
After 5 Years........... $ 75 $112 $ 92 $ 92 $ 92
After 10 Years.......... $128 $165 $201 $165 $201
</TABLE>
EVERGREEN INTERMEDIATE TERM GOVERNMENT SECURITIES FUND
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES*
- --------------------------
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C>
Management
Fees........... 0.60% 0.60% 0.60%
12b-1 Fees(3)... 0.06%* 1.00% 1.00%
Other Expenses.. 0.22% 0.22% 0.22%
---- ---- ----
Total........... 0.88% 1.82% 1.82%
==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
ASSUMING REDEMPTION ASSUMING NO
AT END OF PERIOD REDEMPTION
----------------------- ---------------
CLASS A CLASS B CLASS C CLASS B CLASS C
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
After 1 Year............ $ 41 $ 68 $ 28 $ 18 $ 18
After 3 Years........... $ 60 $ 87 $ 57 $ 57 $ 57
After 5 Years........... $ 80 $119 $ 99 $ 99 $ 99
After 10 Years.......... $137 $177 $214 $177 $214
</TABLE>
EVERGREEN CAPITAL PRESERVATION AND INCOME FUND
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES*
- --------------------------
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C>
Management
Fees........... 0.20% 0.20% 0.20%
12b-1 Fees(3)... 0.25% 1.00% 1.00%
Other Expenses.. 0.45% 0.45% 0.45%
---- ---- ----
Total........... 0.90% 1.65% 1.65%
==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
ASSUMING REDEMPTION ASSUMING NO
AT END OF PERIOD REDEMPTION
----------------------- ---------------
CLASS A CLASS B CLASS C CLASS B CLASS C
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
After 1 Year............ $ 41 $ 67 $ 27 $ 17 $ 17
After 3 Years........... $ 60 $ 82 $ 52 $ 52 $ 52
After 5 Years........... $ 81 $110 $ 90 $ 90 $ 90
After 10 Years.......... $140 $166 $195 $166 $195
</TABLE>
3
<PAGE>
EVERGREEN INTERMEDIATE TERM BOND FUND (JUNE 30, 1998)
EXAMPLES
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES*
- --------------------------
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C>
Management
Fees........... 0.27% 0.27% 0.27%
12b-1 Fees(3)... 0.25% 1.00% 1.00%
Other Expenses.. 0.58% 0.58% 0.58%
---- ---- ----
Total........... 1.10% 1.85% 1.85%
==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
ASSUMING REDEMPTION ASSUMING NO
AT END OF PERIOD REDEMPTION
----------------------- ---------------
CLASS A CLASS B CLASS C CLASS B CLASS C
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
After 1 Year............ $ 43 $ 69 $ 29 $ 19 $ 19
After 3 Years........... $ 66 $ 88 $ 58 $ 58 $ 58
After 5 years........... $ 91 $120 $100 $100 $100
After 10 years.......... $162 $188 $217 $188 $217
</TABLE>
- -------
(1) Investments of $1 million or more are not subject to a front-end sales
charge, but may be subject to a contingent deferred sales charge upon
redemption within one year after the month of purchase.
(2) The deferred sales charge on Class B shares declines from 5% to 1% on
amounts redeemed within six years after the month of purchase. The
deferred sales charge on Class C shares is 1% on amounts redeemed within
one year after the month of purchase. No sales charge is imposed on
redemptions made thereafter. See "Purchase and Redemption of Shares" for
more information.
(3) Class A shares of the Funds can pay up to 0.75% of average daily net
assets as a 12b-1 fee. For the foreseeable future, the Class A 12b-1 fees
will be limited to 0.25% of average daily net assets (with the exception
of Evergreen Short-Intermediate Bond Fund which is limited to 0.10%).
Long-term shareholders may pay more than the economic equivalent front-end
sales charges permitted by the National Association of Securities Dealers,
Inc. ("NASD").
* From time to time, each Fund's investment advisor may, at its discretion,
reduce or waive its fees or reimburse a Fund for certain of its expenses in
order to reduce expense ratios. Each Fund's investment advisor may cease
these waivers and reimbursements at any time. The annual operating expenses
reflect fee waivers and expense reimbursements. Absent the waivers,
management fees, 12b-1 fees, other expenses and total operating expenses
for Evergreen Intermediate Term Government Securities Fund for Class A
would be 0.60%, 0.25%, 0.22% and 1.07%, respectively. Absent the waivers,
management fees, other expenses and total operating expenses for Evergreen
Capital Preservation and Income Fund for Class A would be 0.27%, 0.59% and
1.11%, respectively; for Class B and Class C would be 0.27%, 0.59% and
1.86%, respectively. Absent the waivers, management fees, other expenses
and total operating expenses for Evergreen Intermediate Term Bond Fund for
Class A would be 0.63%, 0.59% and 1.47%, respectively; for Class B and
Class C would be 0.63%, 0.59% and 2.22%, respectively.
4
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
The following tables present, for each Fund, financial highlights for a
share outstanding throughout each period indicated. This information has been
audited by KPMG Peat Marwick llp, the Funds' independent auditors. Information
for the fiscal periods prior to June 30, 1996 has been audited by other
auditors. A report of KPMG Peat Marwick llp on the audited information is
included in the Funds' Annual Report which, with respect to each Fund is
incorporated by reference into the Funds' SAI. The following information for
each Fund should be read in conjunction with the financial statements and
related notes which are incorporated by reference into the Funds' SAI.
Further information about each Fund's performance is contained in the
Funds' annual report to shareholders, which may be obtained without charge.
EVERGREEN SHORT-INTERMEDIATE BOND FUND--CLASS A SHARES
<TABLE>
<CAPTION>
NINE
SIX MONTHS YEAR ENDED MONTHS YEAR
YEAR ENDED JUNE 30, ENDED DECEMBER 31, ENDED ENDED
------------------------- JUNE 30, ------------------------------------ DECEMBER 31, MARCH 31,
1998 1997 1996 1995(C) 1994 1993 1992 1991 1990(D) 1990
------- ------- ------- ---------- ------- ------- ------- ------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE
BEGINNING OF
PERIOD.......... $9.83 $9.82 $10.02 $9.52 $10.42 $10.41 $10.54 $9.99 $9.72 $9.50
------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Income from
investment
operations:
Net investment
income......... 0.61 0.63 0.63 0.32 0.65 0.65 0.71 0.73 0.55 0.79
Net realized and
unrealized gain
(loss) on
investments.... 0.07 0.02 (0.19) 0.50 (0.91) 0.19 (0.06) 0.60 0.24 0.20
------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Total from
investment
operations...... 0.68 0.65 0.44 0.82 (0.26) 0.84 0.65 1.33 0.79 0.99
------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Less
distributions
from:
Net investment
income......... (0.61) (0.64) (0.64) (0.32) (0.64) (0.65) (0.67) (0.70) (0.52) (0.77)
In excess of net
investment
income......... 0 0 0 0 0 0 0 (0.01) 0 0
Net realized
gains.......... 0 0 0 0 0 (0.18) (0.11) (0.07) 0 0
------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Total
distributions... (0.61) (0.64) (.64) (.32) (.64) (.83) (.78) (.78) (.52) (.77)
------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Net asset value
end of period... $9.90 $9.83 $9.82 $10.02 $9.52 $10.42 $10.41 $10.54 $9.99 $9.72
======= ======= ======= ======= ======= ======= ======= ======= ======= ======
TOTAL RETURN(A).. 7.08% 6.77% 4.45% 8.77% (2.57%) 8.29% 6.39% 13.74% 8.31% 10.51%
RATIOS/SUPPLEMENTAL
DATA:
Ratios to average
net assets:
Expenses........ 0.80% 0.72% 0.79% 0.77%(b) 0.75%(b) 0.93% 0.90% 0.80% 1.01%(b) 1.00%
Expenses
excluding
indirectly paid
expenses....... 0.80% 0.72% -- -- -- -- -- -- -- --
Expenses
excluding
waivers and
reimbursements.. 0.80% -- -- -- -- -- -- 0.89% 1.82%(b) 1.50%
Net investment
income......... 6.14% 6.37% 6.35% 6.58%(b) 6.46%(b) 6.15% 6.79% 7.30% 7.53%(b) 7.57%
Portfolio
turnover rate... 68% 45% 76% 34% 48% 73% 66% 53% 27% 32%
NET ASSETS END OF
PERIOD
(THOUSANDS)..... $16,848 $17,703 $18,630 $18,898 $19,127 $22,865 $21,488 $17,680 $11,765 $6,496
<CAPTION>
JANUARY 29,
1989
(COMMENCEMENT
OF CLASS
OPERATIONS)
THROUGH
MARCH 31,
1989
-------------
<S> <C>
PER SHARE DATA:
NET ASSET VALUE
BEGINNING OF
PERIOD.......... $9.70
-------------
Income from
investment
operations:
Net investment
income......... 0.10
Net realized and
unrealized gain
(loss) on
investments.... (0.14)
-------------
Total from
investment
operations...... (0.04)
-------------
Less
distributions
from:
Net investment
income......... (0.16)
In excess of net
investment
income......... 0
Net realized
gains.......... 0
-------------
Total
distributions... (0.16)
-------------
Net asset value
end of period... $9.50
=============
TOTAL RETURN(A).. (0.31%)
RATIOS/SUPPLEMENTAL
DATA:
Ratios to average
net assets:
Expenses........ 1.78%(b)
Expenses
excluding
indirectly paid
expenses....... --
Expenses
excluding
waivers and
reimbursements.. --
Net investment
income......... 6.10%(b)
Portfolio
turnover rate... 18%
NET ASSETS END OF
PERIOD
(THOUSANDS)..... $11,680
</TABLE>
- -------
(a) Excluding applicable sales charges.
(b) Annualized.
(c) The Fund changed its fiscal year end from December 31 to June 30.
(d) The Fund changed its fiscal year end from March 31 to December 31.
5
<PAGE>
EVERGREEN SHORT-INTERMEDIATE BOND FUND--CLASS B SHARES
<TABLE>
<CAPTION>
CLASS B SHARES
-----------------------------------------------------------------
JANUARY 25,
1993
(COMMENCE-
MENT OF
CLASS
SIX MONTHS OPERATIONS)
YEAR ENDED JUNE 30, ENDED YEAR ENDED THROUGH
------------------------- JUNE 30, DECEMBER 31, DECEMBER 31,
1998 1997 1996 1995(C) 1994 1993
------- ------- ------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE
BEGINNING OF PERIOD.... $9.85 $9.84 $10.04 $9.54 $10.44 $10.57
------- ------- ------- ------- ------- ------
Income from investment
operations:
Net investment income.. 0.52 0.54 0.55 0.28 0.58 0.58
Net realized and
unrealized gain (loss)
on investments........ 0.07 0.01 (0.19) 0.50 (0.92) 0.05
------- ------- ------- ------- ------- ------
Total from investment
operations............. 0.59 0.55 0.36 0.78 (0.34) 0.63
------- ------- ------- ------- ------- ------
Less distributions to
shareholders from:
Net investment income.. (0.52) (0.54) (0.56) (0.28) (0.56) (0.58)
Net realized gains on
investments........... 0 0 0 0 0 (0.18)
------- ------- ------- ------- ------- ------
Total distributions..... (0.52) (0.54) (0.56) (0.28) (0.56) (0.76)
------- ------- ------- ------- ------- ------
Net asset value end of
period................. $9.92 $9.85 $9.84 $10.04 $9.54 $10.44
======= ======= ======= ======= ======= ======
TOTAL RETURN(A)......... 6.11% 5.78% 3.62% 8.31% (3.33%) 6.08%
RATIOS/SUPPLEMENTAL
DATA:
Ratios to average net
assets:
Expenses............... 1.70% 1.62% 1.69% 1.67%(b) 1.50% 1.57%(b)
Expenses excluding
indirectly paid
expenses.............. 1.70% 1.62% -- -- -- --
Net investment income.. 5.23% 5.48% 5.45% 5.68%(b) 5.75% 5.42%(b)
Portfolio turnover
rate................... 68% 45% 76% 34% 48% 73%
NET ASSETS END OF PERIOD
(THOUSANDS)............ $22,689 $22,237 $21,006 $17,366 $17,625 $8,876
</TABLE>
EVERGREEN SHORT-INTERMEDIATE BOND FUND--CLASS C SHARES
<TABLE>
<CAPTION>
CLASS C SHARES
------------------------------------------------
SEPTEMBER 6,
1994
(COMMENCE-
MENT OF
CLASS
SIX MONTHS OPERATIONS)
YEAR ENDED JUNE 30, ENDED THROUGH
---------------------- JUNE 30, DECEMBER 31,
1998 1997 1996 1995(C) 1994
------ ------ ------ ---------- ------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE BEGINNING OF
PERIOD....................... $9.85 $9.84 $10.05 $9.55 $9.85
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income........ 0.52 0.54 0.55 0.26 0.18
Net realized and unrealized
gain (loss) on investments.. 0.07 0.01 (0.20) 0.50 (0.30)
------ ------ ------ ------ ------
Total from investment
operations................... 0.59 0.55 0.35 0.76 (0.12)
------ ------ ------ ------ ------
Less distributions to
shareholders from:
Net investment income........ (0.52) (0.54) (0.56) (0.26) (0.18)
------ ------ ------ ------ ------
Total distributions........... (0.52) (0.54) (0.56) (0.26) (0.18)
------ ------ ------ ------ ------
Net asset value end of
period....................... $9.92 $9.85 $9.84 $10.05 $9.55
====== ====== ====== ====== ======
TOTAL RETURN(A)............... 6.11% 5.77% 3.51% 8.23% (1.27%)
RATIOS/SUPPLEMENTAL DATA:
Ratios to average net assets:
Expenses..................... 1.70% 1.62% 1.69% 1.67%(b) 1.65%(b)
Expenses excluding indirectly
paid expenses............... 1.70% 1.62% -- -- --
Net investment income........ 5.25% 5.47% 5.46% 5.69%(b) 5.87%(b)
Portfolio turnover rate....... 68% 45% 76% 34% 48%
NET ASSETS END OF PERIOD
(THOUSANDS).................. $1,143 $1,029 $1,155 $ 527 $ 512
</TABLE>
- -------
(a) Excluding applicable sales charges.
(b) Annualized.
(c) The Fund changed its fiscal year end from December 31 to June 30.
6
<PAGE>
EVERGREEN INTERMEDIATE-TERM GOVERNMENT SECURITIES FUND--CLASS A AND B
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
------------------------------------------ --------------------------------
MAY 2, 1995 FEBRUARY 9, 1996
(COMMENCEMENT (COMMENCEMENT
TEN OF CLASS OF CLASS
YEAR ENDED MONTHS OPERATIONS) YEAR ENDED OPERATIONS)
JUNE 30, ENDED THROUGH JUNE 30, THROUGH
--------------- JUNE 30, AUGUST 31, -------------- JUNE 30,
1998 1997 1996(C) 1995 1998 1997 1996
------- ------ -------- -------------- ------ ------ ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE
BEGINNING OF PERIOD.... $10.02 $9.99 $10.15 $9.95 $10.02 $9.99 $10.38
------- ------ ------ ------ ------ ------ ------
Income from investment
operations:
Net investment income.. 0.55 0.55 0.46 0.19 0.46 0.45 0.18
Net realized and
unrealized gain (loss)
on investments........ 0.19 0.03 (0.16) 0.20 0.19 0.04 (0.39)
------- ------ ------ ------ ------ ------ ------
Total from investment
operations............. 0.74 0.58 0.30 0.39 0.65 0.49 (0.21)
------- ------ ------ ------ ------ ------ ------
Less distributions from:
Net investment income.. (0.55) (0.55) (0.46) (0.19) (0.46) (0.46) (0.18)
------- ------ ------ ------ ------ ------ ------
Total distributions..... (0.55) (0.55) (0.46) (0.19) (0.46) (0.46) (0.18)
------- ------ ------ ------ ------ ------ ------
Net asset value end of
period................. $10.21 $10.02 $9.99 $10.15 $10.21 $10.02 $9.99
======= ====== ====== ====== ====== ====== ======
TOTAL RETURN(A)......... 7.55% 6.00% 3.00% 3.90% 6.57% 5.03% (1.99%)
RATIOS/SUPPLEMENTAL
DATA:
Ratios to average net
assets:
Expenses............... 0.83% 0.86% 0.81%(b) 0.80%(b) 1.82% 1.81% 1.80%(b)
Expenses excluding
indirectly paid
expenses.............. 0.83% 0.86% -- -- 1.82% 1.81% --
Expenses excluding
waivers and
reimbursements........ 1.02% 0.94% 1.06%(b) 1.34%(b) 1.82% 1.89% 1.91%(b)
Net investment income.. 5.39% 5.47% 5.49%(b) 5.42%(b) 4.49% 4.53% 4.62%(b)
Portfolio turnover
rate.................. 45% 68% 28% 45% 45% 68% 28%
NET ASSETS END OF PERIOD
(THOUSANDS)............ $81,034 $571 $497 $9 $1,052 $742 $359
</TABLE>
EVERGREEN INTERMEDIATE TERM GOVERNMENT SECURITIES FUND--CLASS C
<TABLE>
<CAPTION>
CLASS C SHARES
--------------------------------
APRIL 10, 1996
(COMMENCEMENT
OF CLASS
YEAR ENDED OPERATIONS)
JUNE 30, THROUGH
---------------- JUNE 30,
1998 1997 1996
------ ------ --------------
<S> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE BEGINNING OF PERIOD........... $10.02 $9.99 $10.01
------ ------ ------
Income from investment operations:
Net investment income........................ 0.45(c) 0.40 0.11
Net realized and unrealized gain (loss) on
investments................................. 0.20 0.09 (0.02)
------ ------ ------
Total from investment operations.............. 0.65 0.49 0.09
------ ------ ------
Less distributions from:
Net investment income........................ (0.46) (0.46) (0.11)
------ ------ ------
Total distributions........................... (0.46) (0.46) (0.11)
------ ------ ------
Net asset value end of period................. $10.21 $10.02 $9.99
====== ====== ======
TOTAL RETURN(A)............................... 6.57% 5.03% 0.89%
====== ====== ======
RATIOS/SUPPLEMENTAL DATA:
Ratios to average net assets:
Expenses..................................... 1.83% 1.81% 1.80%(b)
Expenses excluding indirectly paid expenses.. 1.83% 1.81% --
Expenses excluding waivers and
reimbursements.............................. 1.83% 1.90% 1.91%(b)
Net investment income........................ 4.54% 4.53% 4.47%(b)
Portfolio turnover rate...................... 45% 68% 28%
NET ASSETS END OF PERIOD (THOUSANDS).......... $126 $12 $32
</TABLE>
- -------
(a) Excluding applicable sales charges.
(b) Annualized.
(c) The Fund changed its fiscal year end from August 31 to June 30.
7
<PAGE>
EVERGREEN CAPITAL PRESERVATION AND INCOME FUND--CLASS A SHARES
<TABLE>
<CAPTION>
DECEMBER 30, 1994
(COMMENCEMENT OF
NINE MONTHS YEAR ENDED CLASS OPERATIONS)
YEAR ENDED ENDED SEPTEMBER 30, THROUGH
JUNE 30, 1998 JUNE 30, 1997(D) 1996(C) SEPTEMBER 30, 1995
------------- ---------------- ------------- ------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE
BEGINNING OF PERIOD.... $9.80 $9.74 $9.68 $9.51
------- ------- ------- -------
Income from investment
operations:
Net investment income.. 0.57 0.46 0.61 0.46
Net realized and
unrealized gain on
investments........... (0.07) 0.03 0.01 0.14
------- ------- ------- -------
Total from investment
operations............. 0.50 0.49 0.62 0.60
------- ------- ------- -------
Less distributions from:
Net investment income.. (0.56) (0.42) (0.53) (0.42)
In excess of net
investment income..... (0.01) (0.01) 0 (0.01)
Tax basis return of
capital............... 0 0 (0.03) 0
------- ------- ------- -------
Total distributions..... (0.57) (0.43) (0.56) (0.43)
------- ------- ------- -------
Net asset value end of
period................. $9.73 $9.80 $9.74 $9.68
======= ======= ======= =======
TOTAL RETURN(A)......... 5.24% 5.12% 6.56% 6.36%
RATIOS/SUPPLEMENTAL DATA
Ratios to average net
assets:
Expenses............... 0.87% 0.92%(b) 0.91% 0.86%(b)
Expenses excluding
indirectly paid
expenses.............. 0.87% 0.90%(b) 0.90% 0.82%(b)
Expenses excluding
waivers and
reimbursements........ 1.29% 1.47%(b) 1.33% 1.27%(b)
Net investment income.. 5.77% 6.24%(b) 6.31% 6.37%(b)
Portfolio turnover
rate................... 88% 52% 74% 67%
NET ASSETS END OF PERIOD
(THOUSANDS)............ $18,022 $15,751 $22,684 $19,293
</TABLE>
- -------
(a) Excluding applicable sales charges.
(b) Annualized.
(c) Calculation based on average shares outstanding.
(d) The Fund changed its fiscal year end from September 30 to June 30.
8
<PAGE>
EVERGREEN CAPITAL PRESERVATION AND INCOME FUND--CLASS B SHARES
<TABLE>
<CAPTION>
JULY 1, 1991
(COMMENCE-
MENT OF
CLASS
NINE MONTHS OPERATIONS)
YEAR ENDED ENDED YEAR ENDED SEPTEMBER 30, THROUGH
JUNE 30, JUNE 30, --------------------------------------------- SEPTEMBER 30,
1998 1997(D) 1996(C) 1995 1994 1993 1992 1991
---------- ----------- ------- ------- ------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE
BEGINNING OF PERIOD.... $9.81 $9.75 $9.68 $9.62 $9.91 $9.88 $10.06 $10.00
------- ------- ------- ------- ------- -------- -------- -------
Income from investment
operations:
Net investment income.. 0.49 0.39 0.55 0.52 0.47 0.45 0.58 0.18
Net realized and
unrealized gain (loss)
on investments........ (0.07) 0.04 0.01 0.03 (0.41) (0.05) (0.21) 0.06
------- ------- ------- ------- ------- -------- -------- -------
Total from investment
operations............. 0.42 0.43 0.56 0.55 0.06 0.40 0.37 0.24
------- ------- ------- ------- ------- -------- -------- -------
Less distributions from:
Net investment income.. (0.48) (0.36) (0.46) (0.48) (0.34) (0.37) (0.55) (0.18)
In excess of net
investment income..... (0.01) (0.01) 0 (0.01) (0.01) 0 0 0
Tax basis return of
capital............... 0 0 (0.03) 0 0 0 0 0
------- ------- ------- ------- ------- -------- -------- -------
Total distributions..... (0.49) (0.37) (0.49) (0.49) (0.35) (0.37) (0.55) (0.18)
------- ------- ------- ------- ------- -------- -------- -------
Net asset value end of
period................. $9.74 $9.81 $9.75 $9.68 $9.62 $9.91 $9.88 $10.06
======= ======= ======= ======= ======= ======== ======== =======
TOTAL RETURN(A)......... 4.42% 4.53% 5.90% 5.81% 0.58% 4.16% 3.71% 2.43%
RATIOS/SUPPLEMENTAL DATA
Ratios to average net
assets:
Expenses............... 1.65% 1.67%(b) 1.63% 1.53% 1.50% 1.50% 1.36% 1.19%(b)
Expenses excluding
indirectly paid
expenses.............. 1.65% 1.65%(b) 1.62% 1.50% -- -- -- --
Expenses excluding
waivers and
reimbursements........ 2.10% 2.23%(b) 2.09% 2.09% 1.93% 1.94% 2.03% 3.19%(b)
Net investment income.. 5.07% 5.52%(b) 5.63% 5.46% 4.05% 4.44% 5.50% 6.42%(b)
Portfolio turnover
rate................... 88% 52% 74% 67% 34% 60% 41% 2%
NET ASSETS END OF PERIOD
(THOUSANDS)............ $26,056 $32,694 $44,096 $62,998 $95,761 $144,725 $186,742 $25,769
</TABLE>
- -------
(a) Excluding applicable sales charges.
(b) Annualized.
(c) Calculation based on average shares outstanding.
(d) The Fund changed its fiscal year end from September 30 to June 30.
9
<PAGE>
EVERGREEN CAPITAL PRESERVATION AND INCOME FUND--CLASS C SHARES
<TABLE>
<CAPTION>
FEBRUARY 1, 1993
YEAR ENDED (COMMENCEMENT OF
NINE MONTHS SEPTEMBER 30, CLASS OPERATIONS)
YEAR ENDED ENDED ----------------------- THROUGH
JUNE 30, 1998 JUNE 30, 1997(D) 1996(C) 1995 1994 SEPTEMBER 30, 1993
------------- ---------------- ------- ------ ------ ------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE
BEGINNING OF PERIOD.... $9.80 $9.74 $9.67 $9.60 $9.90 $9.82
------ ------ ------ ------ ------ ------
Income from investment
operations:
Net investment income.. 0.49 0.40 0.54 0.52 0.40 0.23
Net realized and
unrealized gain (loss)
on investments........ (0.06) 0.03 0.02 0.04 (0.35) 0.09
------ ------ ------ ------ ------ ------
Total from investment
operations............. 0.43 0.43 0.56 0.56 0.05 0.32
------ ------ ------ ------ ------ ------
Less distributions from:
Net investment income.. (0.48) (0.36) (0.46) (0.48) (0.34) (0.24)
In excess of net
investment income..... (0.01) (0.01) 0 (0.01) (0.01) 0
Tax basis return of
capital............... 0 0 (0.03) 0 0 0
------ ------ ------ ------ ------ ------
Total distributions..... (0.49) (0.37) (0.49) (0.49) (0.35) (0.24)
------ ------ ------ ------ ------ ------
Net asset value end of
period................. $9.74 $9.80 $9.74 $9.67 $9.60 $9.90
====== ====== ====== ====== ====== ======
TOTAL RETURN(A)......... 4.53% 4.53% 5.91% 5.93% 0.48% 3.28%
RATIOS/SUPPLEMENTAL DATA
Ratios to average net
assets:
Expenses............... 1.65% 1.67%(b) 1.64% 1.53% 1.50% 1.50%(b)
Expenses excluding
indirectly paid
expenses.............. 1.65% 1.65%(b) 1.62% 1.50% -- --
Expenses excluding
waivers and
reimbursements........ 2.09% 2.23%(b) 2.09% 2.08% 1.94% 1.67%(b)
Net investment income.. 5.05% 5.53%(b) 5.60% 5.51% 4.08% 2.91%(b)
Portfolio turnover
rate................... 88% 52% 74% 67% 34% 60%
NET ASSETS END OF PERIOD
(THOUSANDS)............ $3,972 $4,105 $4,152 $2,755 $2,874 $2,077
</TABLE>
- -------
(a) Excluding applicable sales charges.
(b) Annualized.
(c) Calculation based on average shares outstanding.
(d) The Fund changed its fiscal year end from September 30 to June 30.
10
<PAGE>
EVERGREEN INTERMEDIATE TERM BOND FUND--CLASS A SHARES
<TABLE>
<CAPTION>
CLASS A SHARES
----------------------------------------------------
ELEVEN MONTHS
YEAR ENDED ENDED YEAR ENDED JULY 31,
JUNE 30, JUNE 30, -------------------------
1998 1997(D) 1996 1995 1994
---------- ------------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE
BEGINNING OF PERIOD.... $8.93 $8.73 $8.88 $8.84 $9.46
-------- ------- ------- ------- -------
Income from investment
operations:
Net investment income.. 0.57(c) 0.54 0.59 0.63 0.57(c)
Net realized and
unrealized gain (loss)
on investments, closed
futures contracts and
foreign currency
related transactions.. 0.20 0.18 (0.16) 0.02 (0.59)
-------- ------- ------- ------- -------
Total from investment
operations............. 0.77 0.72 0.43 0.65 (0.02)
-------- ------- ------- ------- -------
Less distributions from:
Net investment income.. (0.61) (0.52) (0.58) (0.57) (0.57)
In excess of net
investment income..... (0.01) 0 0 (0.04) (0.02)
Tax basis return of
capital............... 0 0 0 0 (0.01)
-------- ------- ------- ------- -------
Total distributions..... (0.62) (0.52) (0.58) (0.61) (0.60)
-------- ------- ------- ------- -------
Net asset value end of
period................. $9.08 $8.93 $8.73 $8.88 $8.84
======== ======= ======= ======= =======
TOTAL RETURN(A)......... 8.82% 8.40% 4.95% 7.76% (0.29%)
RATIOS/SUPPLEMENTAL
DATA:
Ratios to average net
assets:
Expenses............... 1.11% 1.12%(b) 1.10% 1.00% 1.00%
Expenses excluding
indirectly paid
expenses.............. 1.10% 1.10%(b) 1.08% -- --
Expenses excluding
waivers and
reimbursements........ 1.44% 1.58%(b) 1.54% 1.48% 1.80%
Net investment income.. 6.00% 6.43%(b) 6.57% 7.13% 6.81%
Portfolio turnover
rate................... 331% 179% 231% 149% 280%
NET ASSETS END OF PERIOD
(THOUSANDS)............ $123,723 $10,341 $12,958 $14,558 $16,036
</TABLE>
<TABLE>
<CAPTION>
CLASS A SHARES
----------------------------------------------------
YEAR ENDED JULY 31,
----------------------------------------------------
1993 1992 1991 1990 1989 1988
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE BEGINNING
OF PERIOD............... $9.23 $8.64 $8.60 $9.11 $9.05 $9.61
------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income... 0.70 0.71 0.72 0.67 0.69 0.72
Net realized and
unrealized gain (loss)
on investments, closed
futures contracts and
foreign currency
related transactions... 0.18 0.60 0.05 (0.45) 0.10 (0.45)
------- ------- ------- ------- ------- -------
Total from investment
operations.............. 0.88 1.31 0.77 0.22 0.79 0.27
------- ------- ------- ------- ------- -------
Less distributions from:
Net investment income... (0.65) (0.71) (0.72) (0.70) (0.73) (0.83)
In excess of net
investment income...... 0 (0.01) (0.01) (0.03) 0 0
Tax basis return of
capital................ 0 0 0 0 0 0
------- ------- ------- ------- ------- -------
Total distributions...... (0.65) (0.72) (0.73) (0.73) (0.73) (0.83)
------- ------- ------- ------- ------- -------
Net asset value end of
period.................. $9.46 $9.23 $8.64 $8.60 $9.11 $9.05
======= ======= ======= ======= ======= =======
TOTAL RETURN(A).......... 9.88% 15.65% 9.42% 2.71% 9.13% 2.95%
RATIOS/SUPPLEMENTAL DATA:
Ratios to average net
assets:
Expenses................ 1.52% 1.88% 2.00% 2.00% 1.92% 1.30%
Expenses excluding
indirectly paid
expenses............... -- -- -- -- -- --
Expenses excluding
waivers and
reimbursements......... 1.99% 1.88% 2.06% 2.33% 2.19% 2.65%
Net investment income... 7.48% 7.85% 8.42% 7.90% 7.88% 7.48%
Portfolio turnover rate.. 160% 90% 76% 107% 148% 208%
NET ASSETS END OF PERIOD
(THOUSANDS)............. $18,032 $19,288 $20,227 $23,694 $30,337 $38,615
</TABLE>
- -------
(a) Excluding applicable sales charges.
(b) Annualized.
(c) Calculation based on average shares outstanding.
(d) The Fund changed its fiscal year end from July 31 to June 30.
11
<PAGE>
EVERGREEN INTERMEDIATE TERM BOND FUND--CLASS B SHARES
<TABLE>
<CAPTION>
CLASS B SHARES
------------------------------------------------------------------------
FEBRUARY 1, 1993
ELEVEN MONTHS YEAR ENDED (DATE OF INITIAL
YEAR ENDED ENDED JULY 31, PUBLIC OFFERING)
JUNE 30, JUNE 30, ------------------------- THROUGH
1998 1997(D) 1996 1995 1994 JULY 31, 1993
---------- ------------- ------- ------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE
BEGINNING OF PERIOD.... $8.95 $8.74 $8.89 $8.85 $9.47 $9.35
------- ------- ------- ------- ------- ------
Income from investment
operations:
Net investment income.. 0.48(c) 0.47 0.52 0.56 0.49(c) 0.29
Net realized and
unrealized gain (loss)
on investments, closed
futures contracts and
foreign currency
related transactions.. 0.21 0.20 (0.16) 0.02 (0.58) 0.12
------- ------- ------- ------- ------- ------
Total from investment
operations............. 0.69 0.67 0.36 0.58 (0.09) 0.41
------- ------- ------- ------- ------- ------
Less distributions from:
Net investment income.. (0.54) (0.46) (0.51) (0.51) (0.49) (0.29)
In excess of net
investment income..... (0.01) 0 0 (0.03) (0.03) 0
Tax basis return of
capital............... 0 0 0 0 (0.01) 0
------- ------- ------- ------- ------- ------
Total distributions..... (0.55) (0.46) (0.51) (0.54) (0.53) (0.29)
------- ------- ------- ------- ------- ------
Net asset value end of
period................. $9.09 $8.95 $8.74 $8.89 $8.85 $9.47
======= ======= ======= ======= ======= ======
TOTAL RETURN(A)......... 7.89% 7.81% 4.10% 6.87% (1.05%) 4.42%
RATIOS/SUPPLEMENTAL
DATA:
Ratios to average net
assets:
Expenses............... 1.86% 1.87%(b) 1.85% 1.75% 1.75% 1.76%(b)
Expenses excluding
indirectly paid
expenses.............. 1.85% 1.85%(b) 1.83% -- -- --
Expenses excluding
waivers and
reimbursements........ 2.22% 2.35%(b) 2.32% 2.21% 2.36% 2.71%(b)
Net investment income.. 5.28% 5.68%(b) 5.82% 6.38% 5.48% 5.67%(b)
Portfolio turnover
rate................... 331% 179% 231% 149% 280% 160%
NET ASSETS END OF PERIOD
(THOUSANDS)............ $10,763 $11,368 $16,034 $17,985 $17,819 $8,159
</TABLE>
EVERGREEN INTERMEDIATE TERM BOND FUND--CLASS C SHARES
<TABLE>
<CAPTION>
CLASS C SHARES
----------------------------------------------------------------------
FEBRUARY 1, 1993
ELEVEN MONTHS YEAR ENDED (DATE OF INITIAL
YEAR ENDED ENDED JULY 31, PUBLIC OFFERING)
JUNE 30, JUNE 30, ------------------------ THROUGH
1998 1997(D) 1996 1995 1994 JULY 31, 1993
---------- ------------- ------ ------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
NET ASSET VALUE
BEGINNING OF PERIOD.... $8.94 $8.74 $8.89 $8.85 $9.46 $9.35
------ ------ ------ ------- ------- ------
Income from investment
operations:
Net investment income.. 0.49(c) 0.46 0.52 0.55 0.49(c) 0.29
Net realized and
unrealized gain (loss)
on investments, closed
futures contracts and
foreign currency
related transactions.. 0.21 0.20 (0.16) 0.03 (0.57) 0.11
------ ------ ------ ------- ------- ------
Total from investment
operations............. 0.70 0.66 0.36 0.58 (0.08) 0.40
------ ------ ------ ------- ------- ------
Less distributions from:
Net investment income.. (0.54) (0.46) (0.51) (0.51) (0.49) (0.29)
In excess of net
investment income..... (0.01) 0 0 (0.03) (0.03) 0
Tax basis return of
capital............... 0 0 0 0 (0.01) 0
------ ------ ------ ------- ------- ------
Total distributions..... (0.55) (0.46) (0.51) (0.54) (0.53) (0.29)
------ ------ ------ ------- ------- ------
Net asset value end of
period................. $9.09 $8.94 $8.74 $8.89 $8.85 $9.46
====== ====== ====== ======= ======= ======
TOTAL RETURN(A)......... 8.01% 7.70% 4.10% 6.87% (0.95%) 4.31%
RATIOS/SUPPLEMENTAL
DATA:
Ratios to average net
assets:
Expenses............... 1.86% 1.87%(b) 1.85% 1.75% 1.75% 1.77%(b)
Expenses excluding
indirectly paid
expenses.............. 1.85% 1.85%(b) 1.83% -- -- --
Expenses excluding
waivers and
reimbursements........ 2.21% 2.35%(b) 2.31% 2.23% 2.37% 2.61%(b)
Net investment income.. 5.26% 5.68%(b) 5.82% 6.37% 5.44% 5.61%(b)
Portfolio turnover
rate................... 331% 179% 231% 149% 280% 160%
NET ASSETS END OF PERIOD
(THOUSANDS)............ $5,439 $7,259 $9,084 $10,185 $13,086 $7,522
</TABLE>
- -------
(a) Excluding applicable sales charges.
(b) Annualized.
(c) Calculation based on average shares outstanding.
(d) The Fund changed its fiscal year end from July 31 to June 30.
12
<PAGE>
- -------------------------------------------------------------------------------
DESCRIPTION OF THE FUNDS
- -------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
Each Fund's investment objectives are nonfundamental; as a result a Fund
may change its objectives without a shareholder vote. Each Fund has also
adopted certain fundamental investment policies which are mainly designed to
limit a Fund's exposure to risk. These fundamental policies cannot be changed
without a shareholder vote. See the SAI for more information regarding a
Fund's fundamental investment policies or other related investment policies.
There can be no assurance that a Fund's investment objectives will be
achieved.
In addition to the investment policies detailed below, each Fund may
employ certain additional investment strategies which are discussed in
"Investment Practices and Restrictions" below.
EVERGREEN SHORT-INTERMEDIATE BOND FUND
The objective of EVERGREEN SHORT-INTERMEDIATE BOND FUND is to attain a
high level of current income, with capital growth as a secondary objective.
The Fund invests in a broad range of investment grade debt securities. The
Fund is suitable for conservative investors who want attractive income and
permits them to participate in a broad portfolio of fixed income securities
rather than purchasing a single issue.
The Fund will invest at least 65% of its assets in bonds that, at the
date of investment, are rated within the four highest categories by Standard &
Poor's Ratings Services ("S&P") (AAA, AA, A and BBB), by Moody's Investors
Service, Inc. ("Moody's") (Aaa, Aa, A and Baa), by Fitch IBCA, Inc. ("Fitch")
(AAA, AA, A and BBB) or, if not rated under a different system, are of
comparable quality to obligations so rated as determined by another nationally
recognized statistical ratings organization or by the Fund's investment
advisor. The Fund may invest the remaining 35% of its assets in lower rated
bonds, but it will not invest in bonds rated below B. The Fund is not required
to sell or otherwise dispose of any security that loses its rating or has its
rating reduced after the Fund has purchased it.
Debt securities may include fixed, adjustable rate, zero coupon, or
stripped securities, debentures, notes, U.S. government securities, and debt
securities convertible into, or exchangeable for, preferred or common stock.
Debt securities may also include mortgage-backed and asset-backed securities.
See "Investment Practices and Restrictions," below. The duration of the
securities will not exceed 10 years. The Fund intends to maintain a dollar-
weighted average maturity of 5 years or less.
In normal market conditions the Fund may invest up to 20% of its assets
in money market instruments consisting of: (1) high grade commercial paper,
including master demand notes; (2) obligations of banks or savings and loan
associations having at least $1 billion in deposits, including certificates of
deposit and bankers' acceptances; (3) A-rated or better corporate obligations;
(4) obligations issued or guaranteed by the U.S. government or by any agency
or instrumentality of the U.S. government; and (5) repurchase agreements
collateralized by any security listed above.
The types of U.S. government securities in which the Fund may invest
include: direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes and bonds; and notes, bonds, and discount notes of U.S. government
agencies or instrumentalities, such as the Farm Credit System, including the
National Bank for Cooperatives, Farm Credit Banks, and Banks for Cooperatives;
Farmers Home Administration; Federal Home Loan Banks; Federal Home Loan
Mortgage Corporation ("FHLMC"); Federal National Mortgage Association
("FNMA"); Government National Mortgage Association ("GNMA"); Student Loan
Marketing Association; Tennessee Valley Authority; Export-Import Bank of the
United States; Commodity Credit Corporation; Federal Financing Bank; and
National Credit Union Administration (collectively, "U.S. government
securities"). Some U.S. government agency obligations are backed by the full
faith and credit of the U.S. Treasury. Others in which the Fund may invest are
supported by: the issuer's right to borrow an amount limited to a specific
line of credit from the U.S. Treasury; discretionary authority of the U.S.
government to purchase certain obligations of an agency or instrumentality; or
the credit of the agency or instrumentality.
The Fund may also invest up to 20% of its assets in foreign securities or
U.S. securities traded in foreign markets in order to provide further
diversification. The Fund may also invest in preferred stock; units which are
debt securities with stock or warrants attached; and obligations denominated
in foreign currencies. In making these decisions, the Fund's investment
advisor will consider such factors as the condition and growth potential of
13
<PAGE>
various economies and securities markets, currency and taxation considerations
and other pertinent financial, social, national and political factors. See
"Investment Practices and Restrictions"--"Foreign Investments."
The Fund may enter into dollar rolls in which the Fund sells income
securities for delivery in the current month and simultaneously contracts to
repurchase substantially similar (same type, coupon and maturity) securities
on a specified future date. During the roll period, the Fund foregoes
principal and interest paid on such securities. The Fund is compensated by the
difference between the current sales price and forward price for the future
purchase (often referred to as the "drop") as well as by the interest earned
on the cash proceeds of the initial sale. Dollar rolls are treated by the Fund
in the same manner as reverse repurchase agreements for leverage purposes.
EVERGREEN INTERMEDIATE TERM GOVERNMENT SECURITIES FUND
The investment objective of EVERGREEN INTERMEDIATE TERM GOVERNMENT
SECURITIES FUND is to preserve principal value and maintain a high degree of
liquidity while providing current income.
The Fund invests exclusively in U.S. Treasury obligations, obligations
issued or guaranteed as to principal and interest by agencies and
instrumentalities of the U.S. government, receipts evidencing separately
traded principal and interest components of U.S. government obligations,
obligations of supranational entities and repurchase agreements involving any
of such obligations. No more than 35% of the Fund's assets may be invested in
receipts, obligations of supranational entities and repurchase agreements
involving such securities.
The Fund will maintain an average weighted remaining maturity of
approximately three to ten years, although under normal conditions the
investment advisor expects to maintain an average maturity of three to six
years. No remaining maturity will exceed ten years. The investment advisor may
vary the average maturity substantially in anticipation of a change in the
interest rate environment.
The U.S. government obligations that the Fund may acquire include
securities representing an interest in a pool of mortgage loans that are
issued or guaranteed by a U.S. government agency. The primary issuers of these
mortgage-backed securities are GNMA, FNMA and FHLMC. The only agency which may
actually guarantee principal or interest is GNMA. Mortgage-backed securities
are in most cases "pass through" instruments through which the holder receives
a share of all interest and principal payments from the mortgages underlying
the certificates. The mortgages backing these securities include conventional
thirty-year fixed rate mortgages. However, due to scheduled and unscheduled
principal payments on the underlying loans, these securities have a shorter
average maturity and, therefore, less principal volatility than comparable
bonds. During periods of declining interest rates, prepayment of mortgages
underlying mortgage-backed securities can be expected to accelerate. When the
mortgage obligations are prepaid, the Fund will reinvest the prepaid amounts
in securities, the yield of which reflects interest rates prevailing at the
time. For purposes of complying with the Fund's investment policy of acquiring
securities with remaining maturity of ten years or less, the investment
advisor will use the expected life of a mortgage-backed security.
EVERGREEN CAPITAL PRESERVATION AND INCOME FUND
The investment objective of EVERGREEN CAPITAL PRESERVATION AND INCOME
FUND is to seek a high level of current income consistent with low volatility
of principal.
Under ordinary circumstances, the Fund invests at least 65% of its assets
in loan pool securities ("Loan Pool(s)") or in mortgage securities or other
securities collateralized by, or representing an interest in, a pool of
mortgages (collectively, "Mortgage Securities") that have interest rates that
reset at periodic intervals and are issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
The Fund may also invest in (i) securities rated AAA by S&P, Moody's
and/or Fitch or, if not rated or rated under a different system, believed by
the Fund's investment advisor to be of comparable quality, and (ii) high grade
commercial paper of United States or foreign issuers. The Fund may invest up
to 20% of its assets in the foregoing investments.
The Fund does not attempt to maintain a constant price per share.
However, the Fund does follow a strategy that seeks to minimize changes in its
net asset value per share by investing primarily in adjustable-rate
securities, whose interest rates are periodically reset when market rates
change. The average dollar weighted
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reset period of adjustable-rate securities held by the Fund will not exceed
one year. The Fund seeks to provide a relatively stable net asset value while
providing high current income relative to high quality, short-term investment
alternatives.
By investing primarily in Mortgage Securities and Loan Pools with
adjustable rates of interest that are issued or guaranteed by the U.S.
government, its agencies or instrumentalities, the Fund will achieve a less
volatile net asset value per share than is characteristic of mutual funds that
invest primarily in U.S. government securities paying a fixed-rate of
interest.
Unlike fixed rate mortgages and loans, adjustable-rate mortgage
securities ("ARMS") and adjustable-rate Loan Pools ("AR Loan Pools") allow the
Fund to participate in increases in interest rates through periodic
adjustments in the coupons of the underlying mortgages or loans, resulting in
both higher current yields and lower price fluctuations in the Fund's net
asset value per share. The Fund is also affected by decreases in interest
rates through periodic decreases in the coupons of the underlying mortgages or
loans resulting in lower income to the Fund. This downward adjustment results
in lower price fluctuations in the net asset value per share in a decreasing
interest rate environment. As the interest rates on the mortgages or loans
underlying the Fund's investments are reset periodically, coupons of portfolio
securities will gradually align themselves to reflect changes in market rates
and should cause the net asset value per share of the Fund to fluctuate less
dramatically than it would if the Fund invested in more traditional long-term,
fixed-rate mortgages.
The portion of the Fund that is not invested in ARMS and AR Loan Pools is
intended to add incremental yield from changes in market rates without
materially increasing the volatility of the net asset value per share. As a
result, the overall impact on the Fund of this portion of the Fund's portfolio
is expected to be neutral in terms or price risk.
The Fund may invest in GNMA, FNMA and FHLMC fixed-rate mortgage
securities. The expected price behavior of fixed-rate GNMA, FNMA and FHLMC
mortgage securities is like that of other fixed rate debt securities in that
their principal value rises as market interest rates fall and declines as
market interest rates rise. (See "Investment Practices and Restrictions--Risks
of Asset-Backed Securities").
The Fund may invest in fixed-rate and adjustable-rate collateralized
mortgage obligations ("CMOs"), including CMOs with rates that move inversely
to market rates. CMOs are securities collateralized by mortgages, mortgage
pass-throughs, mortgage pay-through bonds (bonds representing an interest in a
pool of mortgages where the cash flow generated from the mortgage collateral
pool is dedicated to bond repayment), and mortgage-backed bonds (general
obligations of the issuers payable out of the issuers' general funds and
additionally secured by a first lien on a pool of single family detached
properties). The Fund may invest in CMOs that are either issued by and
guaranteed as to principal and interest by the U.S. government, its agencies
or instrumentalities, or are issued by private issuers. Although some of the
mortgages underlying CMOs may be supported by various types of insurance, and
some CMOs may be backed by GNMA certificates or other mortgage pass-throughs
issued or guaranteed by U.S. Government agencies or instrumentalities, the
CMOs themselves are not generally guaranteed.
EVERGREEN INTERMEDIATE TERM BOND FUND
The Fund seeks current income by investing primarily in a broad range of
investment quality debt securities. As a secondary objective, the Fund seeks
to protect capital. Where appropriate the Fund will take advantage of
opportunities to realize capital appreciation.
The Fund seeks current income by normally investing at least 80% of its
assets in debt securities including U.S. Treasury bills, notes and bonds;
mortgage-backed securities issued by the U.S. government, its agencies or
instrumentalities; mortgage-backed securities issued by private issuers;
corporate debt securities; and commercial paper. The Fund's debt securities
may also include fixed and adjustable-rate or stripped bonds, debentures,
notes, equipment trust certificates and debt securities convertible into, or
exchangeable for, preferred or common stock. The Fund may also invest in
units, which are debt securities with stock or warrants to buy stock attached,
and preferred stock.
Under ordinary circumstances, the Fund expects to invest at least 65% of
its assets in bonds and debentures. The Fund will invest in securities that,
at the time of investment, are rated within the four highest grades by S&P
(AAA, AA, A and BBB), by Moody's (Aaa, Aa, A and Baa) or by Fitch (AAA, AA, A
and BBB), or if not rated or rated under a different system, are of comparable
quality to obligations so rated, as determined by its investment advisor. The
Fund may invest up to 25% of its assets in below-investment grade securities
having
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a rating range of BB to CCC by S&P and Fitch and Ba to Caa by Moody's, or if
unrated or rated under a different system, believed by its investment advisor
to be of comparable quality (commonly known as "junk bonds"). Securities rated
BB or lower by S&P or Fitch, or Ba or lower by Moody's, are considered
predominately speculative with respect to the ability of the issuer to meet
principal and interest payments. For more information on below-investment
grade securities, see the SAI.
The Fund may also invest up to 50% of its assets in securities that are
principally traded in securities markets located outside the United States.
The Fund currently expects that the dollar weighted average maturity of
its investments will range from three to seven years. However, the Fund may
invest in securities with remaining maturities of ten years or less.
Bonds which are rated BBB or Baa are considered to be medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present, but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher rated
categories. Such bonds lack outstanding investment characteristics and may
have speculative characteristics.
When the Fund buys securities, it will consider the ratings of Moody's,
S&P, and Fitch assigned to various debt securities as well as many other
factors, including the preservation of capital, the potential for realizing
capital appreciation, maturity and yield to maturity. The Fund will adjust its
investments in particular securities or in types of debt securities in
response to its appraisal of changing economic conditions and trends. The Fund
may sell one security and purchase another security of comparable quality and
maturity to take advantage of what it believes to be short-term differentials
in market values or yield disparities.
Other Eligible Securities. The Fund may invest up to 20% of its total assets
under ordinary circumstances and, when in its investment advisor's opinion
market conditions warrant, up to 100% of its assets for temporary defensive
purposes in the following types of money market instruments: (1) commercial
paper, including master demand notes, that at the date of investment is rated
A-1, the highest grade by S&P, P-1, the highest grade by Moody's or, if not
rated by such services, is issued by a company which at the date of investment
has an outstanding issue rated A or better by S&P or Moody's; (2) obligations,
including certificates of deposit and bankers' acceptances, of banks or
savings and loan associations having at least $1 billion in assets that are
members of the Federal Deposit Insurance Corporation including U.S. branches
of foreign banks and foreign branches of U.S. banks; (3) corporate obligations
which at the date of investment are rated A or better by S&P or Moody's; and
(4) obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities.
INVESTMENT PRACTICES AND RESTRICTIONS
Risk Factors. Bond prices move inversely to interest rates, i.e. as interest
rates decline the values of the bonds increase, and vice versa. The longer the
maturity of a bond, the greater the exposure to market price fluctuations. The
same market factors are reflected in the share price or net asset value of
bond funds which will vary with interest rates. In addition, certain of the
obligations in which each Fund may invest, may be variable or floating rate
instruments, which may involve a conditional or unconditional demand feature,
and may include variable amount master demand notes. While these types of
instruments may, to a certain degree, offset the risk to principal associated
with rising interest rates, they would not be expected to appreciate in a
falling interest rate environment.
Defensive Investments. The Funds may invest without limitation in high quality
money market instruments, such as notes, certificates of deposit or bankers'
acceptances, or U.S. government securities if, in the opinion of each Fund's
investment advisor, market conditions warrant a temporary defensive investment
strategy.
EVERGREEN CAPITAL PRESERVATION AND INCOME FUND may invest up to 35% of
its assets under ordinary circumstances and, when in its investment advisors
opinion market conditions warrant, up to 100% of its assets for temporary
defensive purposes in the following instruments: obligations of the U.S.
government, its agencies or instrumentalities, including the Federal Home Loan
Banks, FNMA, GNMA, Bank for Cooperatives (including Central Bank for
Cooperatives), Federal Land Banks, Federal Intermediate Credit Banks,
Tennessee Valley Authority, Export-Import Bank of the United States, Commodity
Credit Corporation, Federal Financing Bank, The Student Loan Marketing
Association, FHLMC, Small Business Administration or the National Credit Union
Administration.
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Downgrades. If any security invested in by any of the Funds loses its rating
or has its rating reduced after a Fund has purchased it, a Fund is not
required to sell or otherwise dispose of the security, but may consider doing
so.
Repurchase Agreements. The Funds may invest in repurchase agreements.
Repurchase agreements are agreements by which a Fund purchases a security
(usually U.S. government securities) for cash and obtains a simultaneous
commitment from the seller (usually a bank or broker/dealer) to repurchase the
security at an agreed-upon price and specified future date. The repurchase
price reflects an agreed-upon interest rate for the time period of the
agreement. A Fund's risk is the inability of the seller to pay the agreed-upon
price on the delivery date. However, this risk is tempered by the ability of a
Fund to sell the security in the open market in the case of a default. In such
a case, a Fund may incur costs in disposing of the security which would
increase Fund expenses. Each Fund's investment advisor will monitor the
creditworthiness of the firms with which the Funds enter into repurchase
agreements.
Reverse Repurchase Agreements. The Funds may also enter into reverse
repurchase agreements. A reverse repurchase agreement is an agreement by a
Fund to sell a security and repurchase it at a specified time and price. A
Fund could lose money if the market values of the securities it sold decline
below their repurchase prices. Reverse repurchase agreements may be considered
a form of borrowing, and, therefore, a form of leverage. Leverage may magnify
gains or losses of a Fund.
When-Issued, Delayed-Delivery and Forward Commitment Transactions. Each Fund
may enter into transactions whereby it commits to buying a security, but does
not pay for or take delivery of the security until some specified date in the
future. The value of these securities is subject to market fluctuation during
this period and no income accrues to a Fund until settlement. At the time of
settlement, a when-issued security may be valued at less than its purchase
price. When entering into these transactions, a Fund relies on the other party
to consummate the transaction; if the other party fails to do so, a Fund may
be disadvantaged. Each Fund does not intend to purchase when-issued securities
for speculative purposes, but only in furthurance of its investment objective.
Securities Lending. In order to generate additional income, a Fund may lend up
to 33 1/3% of its portfolio securities on a short-term or long-term basis to
broker/dealers, banks, or other institutional borrowers of securities. The
Funds will only enter into loan arrangements with creditworthy borrowers and
will receive collateral in the form of cash or U.S. government securities
equal to at least 100% of the value of the securities loaned. There is the
risk that when lending portfolio securities, the securities may not be
available to a Fund on a timely basis and a Fund may, therefore, lose the
opportunity to sell the securities at a desirable price. In addition, in the
event that a borrower of securities would file for bankruptcy or become
insolvent, disposition of the securities may be delayed pending court action.
Options And Futures. The Funds may buy and sell futures and options on futures
relating to individual securities and indices and EVERGREEN SHORT-INTERMEDIATE
BOND FUND and EVERGREEN INTERMEDIATE TERM BOND FUND may also buy and sell
futures and options on futures relating to foreign currencies. Such
transactions may be entered into only in order to hedge against declines in
markets and to gain exposure to markets prior to buying individual securities.
Options and futures transactions are intended to enable a Fund to manage
market, interest rate or exchange rate risk, and the Funds do not use these
transactions for speculation or leverage.
A Fund may attempt to hedge all or a portion of its portfolio through the
purchase of both put and call options on its portfolio securities and listed
put options on financial futures contracts for portfolio securities. The Fund
may also write covered call options on its portfolio securities to attempt to
increase current income. The Fund will maintain its positions in securities,
option rights, and segregated cash subject to puts and calls until the options
are exercised, closed, or have expired. An option position may be closed out
only on an exchange which provides a secondary market for an option of the
same series. The Fund may purchase listed put options on financial futures
contracts. These options will be used only to protect portfolio securities
against decreases in value resulting from market factors such as an
anticipated increase in interest rates.
EVERGREEN SHORT-INTERMEDIATE BOND FUND may write (i.e., sell) covered
call and put options. By writing a call option, a Fund becomes obligated
during the term of the option to deliver the securities underlying the option
upon payment of the exercise price. By writing a put option, the Fund becomes
obligated during the term of the option to purchase the securities underlying
the option at the exercise price if the option is exercised. The Fund may also
write straddles (combinations of covered puts and calls on the same underlying
security). The Fund may only write "covered" options. This means that so long
as the Fund is obligated as the writer of a call option, it will own the
underlying securities subject to the option or, in the case of call options on
U.S. Treasury bills, the Fund might own substantially similar U.S. Treasury
bills. The Fund will be considered "covered" with respect to a put option it
writes if, so long as it is obligated as the writer of the put option, it
deposits and maintains with its custodian in a segregated account liquid
assets having a value equal to or greater than the exercise price of the
option.
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The principal reason for writing call or put options is to obtain,
through a receipt of premiums, a greater current return than would be realized
on the underlying securities alone. The Fund receives a premium from writing a
call or put option which they retain whether or not the option is exercised.
By writing a call option, the Fund might lose the potential for gain on the
underlying security while the option is open, and by writing a put option the
Fund might become obligated to purchase the underlying securities for more
than its current market price upon exercise.
A futures contract is a firm commitment by two parties: the seller, who
agrees to make delivery of the specific type of instrument called for in the
contract ("going short"), and the buyer, who agrees to take delivery of the
instrument ("going long") at a certain time in the future. Financial futures
contracts call for the delivery of particular debt instruments issued or
guaranteed by the U.S. Treasury or by specified agencies or instrumentalities
of the U.S. government. If a Fund enters into financial futures contracts
directly to hedge its holdings of fixed income securities, it would enter into
contracts to deliver securities at an undetermined price (i.e., "go short") to
protect itself against the possibility that the prices of its fixed income
securities may decline during a Fund's anticipated holding period. The Fund
would agree to purchase securities in the future at a predetermined price
(i.e., "go long") to hedge against a decline in market interest rates.
The EVERGREEN SHORT-INTERMEDIATE BOND FUND and EVERGREEN INTERMEDIATE
TERM BOND FUND may also enter into currency and other financial futures
contracts and write options on such contracts. The Funds intend to enter into
such contracts and related options for hedging purposes. The Funds will enter
into futures on securities, currencies, or index-based futures contracts in
order to hedge against changes in interest rates, exchange rates or securities
prices. A futures contract on securities or currencies is an agreement to buy
or sell securities or currencies during a designated month at whatever price
exists at that time. A futures contract on a securities index does not involve
the actual delivery of securities, but merely requires the payment of a cash
settlement based on changes in the securities index. A Fund does not make
payment or deliver securities upon entering into a futures contract. Instead,
it puts down a margin deposit, which is adjusted to reflect changes in the
value of the contract and which remains in effect until the contract is
terminated.
The Funds may sell or purchase currency or other financial futures
contracts. When a futures contract is sold by a Fund, the profit on the
contract will tend to rise when the value of the underlying securities or
currencies declines and to fall when the value of such securities or
currencies increases. Thus, a Fund sells futures contracts in order to offset
a possible decline in the profit on its securities or currencies. If a futures
contract is purchased by a Fund, the value of the contract will tend to rise
when the value of the underlying securities or currencies increases and to
fall when the value of such securities or currencies declines.
The EVERGREEN SHORT-INTERMEDIATE BOND FUND and EVERGREEN INTERMEDIATE
TERM BOND FUND may enter into closing purchase and sale transactions in order
to terminate a futures contract. A Fund's ability to enter into closing
transactions depends on the development and maintenance of a liquid secondary
market. There is no assurance that a liquid secondary market will exist for
any particular contract or at any particular time. As a result, there can be
no assurance that a Fund will be able to enter into an offsetting transaction
with respect to a particular contract at a particular time. If a Fund is not
able to enter into an offsetting transaction, a Fund will continue to be
required to maintain the margin deposits on the contract and to complete the
contract according to its terms, in which case it would continue to bear
market risk on the transaction.
Risk Characteristics Of Options And Futures. Although options and futures
transactions are intended to enable the Funds to manage market, exchange, or
interest rate risks, these investment devices can be highly volatile, and the
Funds use of them can result in poorer performance (i.e., the Funds' returns
may be reduced). The Funds attempt to use such investment devices for hedging
purposes may not be successful. Successful futures strategies require the
ability to predict future movements in securities prices, interest rates and
other economic factors. When the Funds use financial futures contracts and
options on financial futures contracts as hedging devices, there is a risk
that the prices of the securities subject to the financial futures contracts
and options on financial futures contracts may not correlate perfectly with
the prices of the securities in the Funds' portfolios. This may cause the
financial futures contract and any related options to react to market changes
differently than the portfolio securities. In addition, the Funds' investment
advisors could be incorrect in their expectations and forecasts about the
direction or extent of market factors, such as interest rates, securities
price movements, and other economic factors. Even if the Funds' investment
advisors correctly predict interest rate movements, a hedge could be
unsuccessful if changes in the value of a Fund's futures position did not
correspond to changes in the value of its investments. In these events, the
Funds may lose money on the financial futures contracts or the options on
financial futures contracts. It is not certain that a secondary market for
positions in financial futures contracts or for options on financial futures
contracts will exist at all times. Although the Funds' investment
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advisors will consider liquidity before entering into financial futures
contracts or options on financial futures contracts transactions, there is no
assurance that a liquid secondary market on an exchange will exist for any
particular financial futures contract or option on a financial futures
contract at any particular time. The Funds' ability to establish and close out
financial futures contracts and options on financial futures contract
positions depends on this secondary market. If a Fund is unable to close out
its position due to disruptions in the market or lack of liquidity, a Fund may
lose money on the futures contract or option, and the losses to the Fund could
be significant.
Zero-Coupon And Stripped Securities. EVERGREEN SHORT-INTERMEDIATE BOND FUND,
EVERGREEN INTERMEDIATE TERM BOND FUND and EVERGREEN INTERMEDIATE TERM
GOVERNMENT SECURITIES FUND may invest in zero-coupon and stripped securities.
Zero-coupon securities in which the Funds may invest are debt obligations
which are generally issued at a discount and payable in full at maturity, and
which do not provide for current payments of interest prior to maturity. Zero-
coupon securities usually trade at a deep discount from their face or par
value and are subject to greater market value fluctuations from changing
interest rates than debt obligations of comparable maturities which make
current distributions of interest. As a result, the net asset value of shares
of the Funds may fluctuate over a greater range than shares of other mutual
funds investing in securities making current distributions of interest and
having similar maturities.
Zero-coupon securities may include U.S. Treasury bills issued directly by
the U.S. Treasury or other short-term debt obligations, and longer-term bonds
or notes and their unmatured interest coupons which have been separated by
their holder, typically a custodian bank or investment banking firm. A number
of securities firms and banks have stripped the interest coupons from the
underlying principal (the "corpus") of U.S. Treasury securities and resold
them in custodial receipt programs with a number of different names, including
Treasury Income Growth Receipts ("TIGRS") and Certificates of Accrual on
Treasuries ("CATS"). The underlying U.S. Treasury bonds and notes themselves
are held in book-entry form at the Federal Reserve Bank or, in the case of
bearer securities (i.e., unregistered securities which are owned ostensibly by
the bearer or holder thereof), in trust on behalf of the owners thereof.
In addition, the Treasury has facilitated transfers of ownership of zero-
coupon securities by accounting separately for the beneficial ownership of
particular interest coupons and corpus payments on Treasury securities through
the Federal Reserve book-entry record-keeping system. The Federal Reserve
program as established by the Treasury Department is known as "STRIPS" or
"Separate Trading of Registered Interest and Principal of Securities". Under
the STRIPS program, the Funds will be able to have their beneficial ownership
of U.S. Treasury zero-coupon securities recorded directly in the book-entry
record-keeping system in lieu of having to hold certificates or other evidence
of ownership of the underlying U.S. Treasury securities.
When debt obligations have been stripped of their unmatured interest
coupons by the holder, the stripped coupons are sold separately. The principal
or corpus is sold at a deep discount because the buyer receives only the right
to receive a future fixed payment on the security and does not receive any
rights to periodic cash interest payments. Once stripped or separated, the
corpus and coupons may be sold separately. Typically, the coupons are sold
separately or grouped with other coupons with like maturity dates and sold in
such bundled form. Purchasers of stripped obligations acquire, in effect,
discount obligations that are economically identical to the zero-coupon
securities issued directly by the obligor.
Foreign Investments. EVERGREEN SHORT-INTERMEDIATE BOND FUND and EVERGREEN
INTERMEDIATE TERM BOND FUND may invest in foreign securities or securities
denominated in or indexed to foreign currencies. In addition, EVERGREEN SHORT-
INTERMEDIATE BOND FUND may invest in foreign currencies. Foreign securities
may be affected by the strength of foreign currencies relative to the U.S.
dollar, or by political or economic developments in foreign countries.
Accounting procedures and government supervision may be less stringent than
those applicable to U.S. companies. Foreign markets may be less liquid or more
volatile than U.S. markets and may offer less protection to investors. It may
also be more difficult to enforce contractual obligations abroad than would be
the case in the United States because of differences in the legal systems.
Foreign securities may be subject to foreign taxes, which may reduce yield,
and may be less marketable than comparable U.S. securities. All these factors
are considered by the investment advisor before making any of these types of
investments.
Foreign Currency Transactions. As discussed above, the EVERGREEN SHORT-
INTERMEDIATE BOND FUND and EVERGREEN INTERMEDIATE TERM BOND FUND may invest in
securities of foreign issuers. When a Fund invests in foreign securities, they
usually will be denominated in foreign currencies, and a Fund temporarily may
hold funds in foreign currencies. Thus, the value of Fund shares will be
affected by changes in exchange rates.
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As one way of managing exchange rate risk, in addition to entering into
currency futures contracts, the Funds may enter into forward currency exchange
contracts (agreements to purchase or sell currencies at a specified price and
date). The exchange rate for the transaction (the amount of currency the Funds
will deliver or receive when the contract is completed) is fixed when a Fund
enters into the contract. The Funds usually will enter into these contracts to
stabilize the U.S. dollar value of a security it has agreed to buy or sell.
The Funds intend to use these contracts to hedge the U.S. dollar value of a
security it already owns, particularly if the Funds expect a decrease in the
value of the currency in which the foreign security is denominated. Although
the Funds will attempt to benefit from using forward contracts, the success of
its hedging strategy will depend on the investment advisor's ability to
predict accurately the future exchange rates between foreign currencies and
the U.S. dollar. The value of the Fund's investment denominated in foreign
currencies will depend on the relative strength of those currencies and the
U.S. dollar, and the Funds may be affected favorably or unfavorably by changes
in the exchange rates or exchange control regulations between foreign
currencies and the U.S. dollar. Changes in foreign currency exchange rates
also may affect the value of dividends and interest earned, gains and losses
realized on the sale of securities and net investment income and gains, if
any, to be distributed to shareholders by a Fund. The Funds do not intend to
enter into foreign currency transactions for speculation or leverage.
Risk Characteristics Of Asset-Backed Securities. The Funds may invest in
asset-backed securities. Asset-backed securities are created by the grouping
of certain governmental, government-related and private loans, receivables and
other lender assets into pools. Interests in these pools are sold as
individual securities. Payments from the asset pools may be divided into
several different tranches of debt securities, with some tranches entitled to
receive regular installments of principal and interest, other tranches
entitled to receive regular installments of interest, with principal payable
at maturity or upon specified call dates, and other tranches only entitled to
receive payments of principal and accrued interest at maturity or upon
specified call dates. Different tranches of securities will bear different
interest rates, which may be fixed or floating.
Because the loans held in the asset pool often may be prepaid without
penalty or premium, asset-backed securities and mortgage backed securities are
generally subject to higher prepayment risks than most other types of debt
instruments. Prepayment risks on mortgage securities tend to increase during
periods of declining mortgage interest rates, because many borrowers refinance
their mortgages to take advantage of the more favorable rates. Depending upon
market conditions, the yield that the Funds receive from the reinvestment of
such prepayments, or any scheduled principal payments, may be lower than the
yield on the original mortgage security. As a consequence, mortgage securities
may be a less effective means of "locking in" interest rates than other types
of debt securities having the same stated maturity and may also have less
potential for capital appreciation.
For certain types of asset pools, such as collateralized mortgage
obligations, prepayments may be allocated to one tranche of securities ahead
of other tranches, in order to reduce the risk of prepayment for the other
tranches.
Prepayments may result in a capital loss to the Funds to the extent that
the prepaid mortgage securities were purchased at a market premium over their
stated amount. Conversely, the prepayment of mortgage securities purchased at
a market discount from their stated principal amount will accelerate the
recognition of interest income by the Funds, which would be taxed as ordinary
income when distributed to the shareholders. The credit characteristics of
asset-backed securities also differ in a number of respects from those of
traditional debt securities. The credit quality of most asset-backed
securities depends primarily upon the credit quality of the assets underlying
such securities, how well the entity issuing the securities is insulated from
the credit risk of the originator or any other affiliated entities, and the
amount and quality of any credit enhancement to such securities.
Derivatives. Derivatives are financial contracts whose value is based on an
underlying asset, such as a stock or a bond, or an underlying economic factor,
such as an index or an interest rate. The Funds may invest in derivatives only
if the expected risks and rewards are consistent with its objectives and
policies.
Losses from derivatives can sometimes be substantial. This is true partly
because small price movements in the underlying asset can result in immediate
and substantial gains or losses in the value of the derivative. Derivatives
can also cause the Fund to lose money if the Fund fails to correctly predict
the direction in which the underlying asset or economic factor will move.
Borrowing. Each Fund may borrow from banks in an amount up to 33 1/3% of its
total assets, taken at market value. Each Fund may also borrow an additional
5% of its total assets from banks or others. The Funds may only
20
<PAGE>
borrow as a temporary measure for extraordinary or emergency purposes such as
redemption of fund shares. A Fund may not purchase securities so long as
outstanding borrowings do not exceed 5% of its total assets.
Illiquid Securities. The Funds may invest up to 15% of their net assets in
illiquid securities and other securities which are not readily marketable.
Repurchase agreements with maturities longer than seven days will be included
for the purposes of the foregoing 15% limit. The inability of a Fund to
dispose of illiquid or not readily marketable investments readily or at a
reasonable price could impair a Fund's ability to raise cash for redemptions
or other purposes.
Restricted Securities. The Funds may invest in restricted securities,
including securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933 (the "1933 Act"). Generally, Rule 144A establishes a
safe harbor from the registration requirements of the 1933 Act for resale by
large institutional investors of securities not publicly traded in the United
States. Each Fund's investment advisor determines the liquidity of Rule 144A
securities according to guidelines and procedures adopted by the Trust's Board
of Trustees. The Board of Trustees monitors the investment advisor's
application of those guidelines and procedures. Securities eligible for resale
pursuant to Rule 144A, which a Fund's investment advisor has determined to be
liquid or readily marketable, are not subject to the 15% limit on illiquid
securities.
- -------------------------------------------------------------------------------
ORGANIZATION AND SERVICE PROVIDERS
- -------------------------------------------------------------------------------
Fund Structure. Each Fund is an investment pool, which invests shareholders'
money towards a specified goal. Each Fund is a diversified series of an open-
end, investment management company called "Evergreen Fixed Income Trust". The
Trust is a Delaware business trust organized on September 18, 1997.
Board of Trustees. The Trust is supervised by a Board of Trustees that is
responsible for representing the interests of shareholders. The Trustees meet
periodically throughout the year to oversee each Fund's activities, reviewing,
among other things, each Fund's performance and its contractual arrangements
with various service providers.
Shareholder Rights. All shareholders have equal voting, liquidation and other
rights. Each share is entitled to one vote for each dollar of net asset value
applicable to such share. Shareholders may exchange shares as described under
"Exchanges," but will have no other preference, conversion, exchange or
preemptive rights. When issued and paid for, shares will be fully paid and
nonassessable. Shares of the Funds are redeemable, transferable and freely
assignable as collateral. The Trust may establish additional classes or series
of shares.
The Funds do not hold annual shareholder meetings; a Fund may, however,
hold special meetings for such purposes as electing or removing Trustees,
changing fundamental policies and approving investment advisory agreements or
12b-1 plans. In addition, the Funds are prepared to assist shareholders in
communicating with one another for the purpose of convening a meeting to elect
trustees.
SERVICE PROVIDERS
Investment Advisor. The investment advisor to EVERGREEN SHORT-INTERMEDIATE
BOND FUND and EVERGREEN INTERMEDIATE TERM GOVERNMENT SECURITIES FUND is the
Capital Management Group of First Union National Bank ("FUNB"), a subsidiary
of First Union Corporation ("First Union"). First Union is located at 301
South College Street and FUNB at 201 South College Street, Charlotte, North
Carolina 28288-0630. First Union and its subsidiaries provide a broad range of
financial services to individuals and businesses throughout the United States.
The investment advisor to EVERGREEN CAPITAL PRESERVATION AND INCOME FUND
and EVERGREEN INTERMEDIATE TERM BOND FUND is Evergreen Investment Management
Company ("EIMC"). EIMC has provided investment advisory and management
services to investment companies and private accounts since it was organized
in 1932. EIMC is an indirect subsidiary of FUNB.
21
<PAGE>
EVERGREEN SHORT-INTERMEDIATE BOND FUND and EVERGREEN INTERMEDIATE TERM
GOVERNMENT SECURITIES FUND pay FUNB an annual fee for its services equal to
0.50% and 0.60%, respectively, of the Fund's average daily net assets.
EVERGREEN CAPITAL PRESERVATION AND INCOME FUND and EVERGREEN INTERMEDIATE
TERM BOND FUND pay EIMC a fee, calculated on an annual basis, equal to 2.0% of
gross dividend and interest income of the Fund plus 0.50% of the first
$100,000,000 of the aggregate net asset value of shares of the Fund, plus
0.45% of the next $100,000,000, plus 0.40% of the next $100,000,000, plus
0.35% of the next $100,000,000, plus 0.30% of the next $100,000,000, plus
0.25% of amounts over $500,000,000.
Advisory fees are computed as of the close of business each business day
and paid monthly.
Portfolio Managers. Thomas L. Ellis has been the portfolio manager of
EVERGREEN SHORT-INTERMEDIATE BOND FUND since its inception in 1988. Mr. Ellis
has over 28 years of experience in investments. Since joining FUNB in 1985,
Mr. Ellis has been a Vice President and Senior Portfolio Manager. At FUNB he
is responsible for the portfolio management of over $1 billion in taxable
fixed income assets, including Evergreen Select Fixed Income Fund; the Fixed
Income Fund, a common trust fund; and 17 separate accounts.
L. Robert Cheshire has been the portfolio manager of EVERGREEN
INTERMEDIATE TERM GOVERNMENT SECURITIES FUND since its inception in 1991.
Since joining First Fidelity Bank in 1990, which was acquired by FUNB in 1995,
Mr. Cheshire has been a Vice President and Senior Portfolio Manager. He is
also head of the Newark Taxable Fixed Income Unit.
Christopher P. Conkey is the portfolio manager of EVERGREEN INTERMEDIATE
TERM BOND FUND. Mr. Conkey has served as Chief Investment Officer of Fixed
Income for the past nine months and as Head of the High Grade Bond Team for
EIMC for the last three years. During the past five years at EIMC, Mr. Conkey
has also served as portfolio manager of several high grade fixed income funds,
several high grade-high yield fixed income funds and several off-shore closed-
end fixed income funds.
Gary Pzegeo has been the portfolio manager of EVERGREEN CAPITAL
PRESERVATION AND INCOME FUND since 1997. Mr. Pzegeo is a EIMC Vice President
and Portfolio Manager in the Fixed Income group. Mr. Pzegeo joined EIMC in
1990 and has experience as a Senior Cash Manager, Senior Research Associate
and Analyst.
Administrator. Evergreen Investment Services, Inc. ("EIS") serves as
administrator to EVERGREEN SHORT-INTERMEDIATE BOND FUND and EVERGREEN
INTERMEDIATE TERM GOVERNMENT SECURITIES FUND. EIS provides each Fund with
facilities, equipment and personnel. For its services as administrator, EIS is
entitled to receive a fee based on the aggregate average daily net assets of
all the mutual funds administered by EIS for which any affiliate of FUNB
serves as investment advisor. The administration fee is calculated in
accordance with the following schedule:
ADMINISTRATION FEE
0.050% on the first $7 billion
0.035% on the next $3 billion
0.030% on the next $5 billion
0.020% on the next $10 billion
0.015% on the next $5 billion
0.010% on assets in excess of $30 billion
EIS also provides facilities, equipment and personnel to EVERGREEN
CAPITAL PRESERVATION AND INCOME FUND and EVERGREEN INTERMEDIATE TERM BOND FUND
on behalf of their investment advisor and is reimbursed by the Funds for its
services.
Transfer Agent and Dividend Disbursing Agent. Evergreen Service Company
("ESC"), 200 Berkeley Street, Boston, Massachusetts 02116-5034, acts as each
Fund's transfer agent and dividend disbursing agent. ESC is an indirect,
wholly-owned subsidiary of First Union.
Custodian. State Street Bank and Trust Company, P.O. Box 9021, Boston,
Massachusetts 02205-9827 acts as each Fund's custodian.
22
<PAGE>
Principal Underwriter. Evergreen Distributor, Inc. ("EDI"), a subsidiary of
The BISYS Group, Inc., located at 125 West 55th Street, New York, New York
10019, is the principal underwriter of each Fund.
DISTRIBUTION PLANS AND AGREEMENTS
Distribution Plans. Each Fund's Class A, Class B and Class C shares pay for
the expenses associated with the distribution of its shares according to a
distribution plan that it has adopted pursuant to Rule 12b-1 under the 1940
Act (each a "Plan" or collectively the "Plans"). Under the Plans, each Fund
may incur distribution-related and shareholder servicing-related expenses
which are based upon the following maximum annual rates:
<TABLE>
<CAPTION>
SHARE CLASS % OF CLASS'S AVERAGE DAILY NET ASSETS
----------- ----------------------------------------------------------
<C> <S>
Class A shares 0.75%, currently limited to 0.25% for Evergreen Capital
Preservation and Income Fund, Evergreen Intermediate Term
Bond Fund and Evergreen Intermediate Term Government
Securities Fund and 0.10% for Evergreen Short-
Intermediate Bond Fund
Class B shares 1.00%
Class C shares 1.00%
</TABLE>
Of the amount that each class may pay under its respective Plan, up to
0.25% may constitute a service fee to be used to compensate organizations,
which may include each Fund's investment advisor or its affiliates, for
personal services rendered to shareholders and/or the maintenance of
shareholder accounts. The Funds may not pay any distribution or services fees
during any fiscal period in excess of the amounts set forth above. Amounts
paid by the Plans are used to compensate the Funds' distributor pursuant to
the Distribution Agreements entered into by each Fund.
The Plans are in compliance with the Conduct Rules of the NASD which
effectively limit the annual asset-based sales charges and service fees that a
mutual fund may pay on a class of shares to an annual rate of 0.75% and 0.25%,
respectively, of the average aggregate annual net assets attributable to that
class. The rules also limit the aggregate of all front-end, deferred and
asset-based sales charges imposed with respect to a class of shares by a
mutual fund that also charges a service fee to 6.25% of cumulative gross sales
of shares of that class, plus interest on the unpaid amount at the prime rate
plus 1% per annum.
Distribution Agreements. Each Fund has also entered into distribution
agreements (each a "Distribution Agreement" or collectively the "Distribution
Agreements") with EDI. Pursuant to the Distribution Agreements, a Fund will
compensate EDI for its services as distributor based upon the maximum annual
rate as a percentage of each Fund's average daily net assets attributable to
the class, as follows:
Class A shares 0.25%
Class B shares 1.00%
Class C shares 1.00%
The Distribution Agreements provide that EDI will use the distribution
fee received from the Fund for payments (1) to compensate broker-dealers or
other persons for distributing shares of the Fund, including interest and
principal payments made in respect of amounts paid to broker-dealers or other
persons that have been financed (EDI may assign its rights to receive
compensation under the Plans to secure such financings), (2) to otherwise
promote the sale of shares of the Fund, and (3) to compensate broker-dealers,
depository institutions and other financial intermediaries for providing
administrative, accounting and other services with respect to a Fund's
shareholders. FUNB or its affiliates may finance the payments made by EDI to
compensate broker-dealers or other persons for distributing shares of a Fund.
In the event a Fund acquires the assets of other mutual funds,
compensation paid to EDI under the Distribution Agreements may be paid by EDI
to the distributors of the funds or their predecessors.
Since EDI's compensation under the Distribution Agreements is not
directly tied to the expenses incurred by EDI, the amount of compensation
received by EDI under the Distribution Agreements during any year may be more
or less than its actual expenses and may result in a profit to EDI.
Distribution expenses incurred by EDI in one fiscal year that exceed the level
of compensation paid to EDI for that year may be paid from distribution fees
received from a Fund in subsequent fiscal years.
23
<PAGE>
- -------------------------------------------------------------------------------
PURCHASE AND REDEMPTION OF SHARES
- -------------------------------------------------------------------------------
HOW TO BUY SHARES
You may purchase shares of the Funds through broker-dealers, banks or
other financial intermediaries or directly through EDI. In addition, you may
purchase shares of a Fund by mailing a completed application to that Fund, c/o
ESC, P.O. Box 2121, Boston, Massachusetts 02106-2121,with a check payable to
that Fund. You may also telephone 1-800-343-2898 to obtain the number of an
account to which you can wire or electronically transfer funds and then send
in a completed application. The minimum initial investment is $1,000, which
may be waived in certain situations. Subsequent investments in any amount may
be made by check, by wiring federal funds, by direct deposit or by an
electronic funds transfer.
There is no minimum amount for subsequent investments. Investments of $25
or more are allowed under the Systematic Investment Plan. See the application
for more information. Only Class A, Class B and Class C shares are offered
through this prospectus. See "General Information" --"Other Classes of
Shares."
Class A Shares--Front-End Sales Charge Alternative. You may purchase Class A
shares of each Fund at net asset value plus an initial sales charge on
purchases under $1,000,000. You may purchase $1,000,000 or more of Class A
shares without a front-end sales charge, however, a contingent deferred sales
charge ("CDSC") equal to the lesser of 1% of the purchase price or the
redemption value will be imposed on shares redeemed during the month of
purchase and the 12-month period following the month of purchase. The schedule
of charges for Class A shares is as follows:
Initial Sales Charge
<TABLE>
<CAPTION>
COMMISSION TO
DEALER/AGENT
AS A % OF THE NET AS A % OF THE AS A % OF
AMOUNT OF PURCHASE AMOUNT INVESTED OFFERING PRICE OFFERING PRICE
------------------ ----------------- -------------- --------------
<S> <C> <C> <C>
Less than $50,000............... 3.36% 3.25% 2.75%
$ 50,000-$99,000................ 3.09% 3.00% 2.75%
$100,000-$249,999............... 2.56% 2.50% 2.25%
$250,000-$499,999............... 2.04% 2.00% 1.75%
$500,000-$999,999............... 1.52% 1.50% 1.25%
</TABLE>
No front-end sales charges are imposed on Class A shares purchased by (a)
institutional investors, which may include bank trust departments and
registered investment advisors; (b) investment advisors, consultants or
financial planners who place trades for their own accounts or the accounts of
their clients and who charge such clients a management, consulting, advisory
or other fee; (c) clients of investment advisors or financial planners who
place trades for their own accounts if the accounts are linked to the master
account of such investment advisors or financial planners on the books of the
broker-dealer through whom shares are purchased; (d) institutional clients of
broker-dealers, including retirement and deferred compensation plans and the
trusts used to fund these plans, which place trades through an omnibus account
maintained with a Fund by the broker-dealer; (e) shareholders of record on
October 12, 1990 in any series of Evergreen Investment Trust in existence on
that date, and the members of their immediate families; (f) current and
retired employees of FUNB and its affiliates, EDI and any broker-dealer with
whom EDI has entered into an agreement to sell shares of the Funds, and
members of the immediate families of such employees; (g) and upon the initial
purchase of an Evergreen fund by investors reinvesting the proceeds from a
redemption within the preceding thirty days of shares of other mutual funds,
provided such shares were initially purchased with a front-end sales charge or
subject to a CDSC; and (h) all qualified plan customers holding Evergreen
Class Y shares in connection with a rollover into an individual retirement
account. Certain broker-dealers or other financial institutions may impose a
fee on transactions in shares of the Funds.
Class A shares may also be purchased at net asset value by a corporation
or certain other qualified retirement plan or a non-qualified deferred
compensation plan, or a Title I tax sheltered annuity or TSA plan sponsored by
an organization having 100 or more eligible employees, or a TSA plan sponsored
by a public education entity having 5,000 or more eligible employees.
24
<PAGE>
In connection with sales made to plans of the type described in the
preceding sentence, EDI will pay broker-dealers and others concessions at the
rate of 0.50% of the net asset value of the shares purchased. These payments
are subject to reclaim in the event the shares are redeemed within twelve
months after purchase.
Certain employer-sponsored retirement or savings plans, including
eligible 401(k) plans, may purchase Class A shares at net asset value provided
that such plans meet a certain required minimum number of eligible employees
or required amount of assets. Additional information concerning the waiver of
sales charges is set forth in the SAI.
When Class A shares are sold, EDI will normally retain a portion of the
applicable sales charge and pay the balance to the broker-dealer or other
financial intermediary through whom the sale was made. EDI may also pay fees
to banks from sales charges for services performed on behalf of the customers
of such banks in connection with the purchase of shares of the Funds. Certain
purchases of Class A shares may qualify for reduced sales charges in
accordance with a Fund's concurrent purchases, Rights of Accumulation, Letter
of Intent, certain Retirement Plans and Reinstatement Privilege. See "Sales
Charge Waivers or Reductions" in the SAI for additional information.
Class B Shares--Deferred Sales Charge Alternative. You may purchase Class B
shares at net asset value without an initial sales charge. However, you may
pay a CDSC if you redeem shares within six years after the month of purchase.
The amount of the CDSC (expressed as a percentage of the lesser of the current
net asset value or original cost) will vary according to the number of years
from the month of purchase of Class B shares as set forth below.
<TABLE>
<CAPTION>
CDSC
REDEMPTION TIMING IMPOSED
- ----------------- -------
<S> <C>
Month of purchase and the first twelve-month period following the
month of purchase.................................................... 5.00%
Second twelve-month period following the month of purchase............ 4.00%
Third twelve-month period following the month of purchase............. 3.00%
Fourth twelve-month period following the month of purchase............ 3.00%
Fifth twelve-month period following the month of purchase............. 2.00%
Sixth twelve-month period following the month of purchase............. 1.00%
</TABLE>
No CDSC is imposed on amounts redeemed thereafter.
The CDSC is deducted from the amount of the redemption and is paid to
EDI. In the event a Fund acquires the assets of other mutual funds, the CDSC
may be paid by EDI to the distributors of the acquired funds. Class B shares
are subject to higher distribution and/or shareholder service fees than Class
A shares for a period of seven years after the month of purchase (after which
it is expected that they will convert to Class A shares without imposition of
a front-end sales charge). The higher fees mean a higher expense ratio, so
Class B shares pay correspondingly lower dividends and may have a lower net
asset value than Class A shares. The Funds will not normally accept any
purchase of Class B shares in the amount of $250,000 or more.
At the end of the period ending seven years after the end of the calendar
month in which the shareholder's purchase order was accepted, Class B shares
will automatically convert to Class A shares and will no longer be subject to
a higher distribution services fee imposed on Class B shares. Such conversion
will be on the basis of the relative net asset values of the two Classes,
without the imposition of any sales load, fee or other charge. The purpose of
the conversion feature is to reduce the distribution services fee paid by
holders of Class B shares that have been outstanding long enough for EDI to
have been compensated for the expenses associated with the sale of such
shares. The CDSC applicable to Class B shares will be waived on redemptions
made by certain employer-sponsored retirement or savings plans, including 401k
plans. See "Sales Charge Waivers or Reductions" in the SAI.
Class C Shares--Level-Load Alternative. Class C shares are only offered
through broker-dealers who have special distribution agreements with EDI. You
may purchase Class C shares at net asset value without any initial sales
charge and, therefore, the full amount of your investment will be used to
purchase Fund shares. However, you will pay a 1.00% CDSC, if you redeem shares
during the month of purchase and the 12-month period following the month of
purchase. No CDSC is imposed on amounts redeemed thereafter. Class C shares
incur higher distribution and/or shareholder service fees than Class A shares
but, unlike Class B shares, do not convert to any other class of shares of a
Fund. The higher fees mean a higher expense ratio, so Class C shares pay
correspondingly lower dividends and may have a lower net asset value than
Class A shares. The Funds will not normally accept any purchase of Class C
shares in the amount of $500,000 or more. No CDSC will be imposed on Class C
shares purchased by institutional investors and through employee benefit and
savings plans eligible
25
<PAGE>
for the exemption from front-end sales charges described under "Class A
Shares--Front End Sales Charge Alternative," above. Broker-dealers and other
financial intermediaries whose clients have purchased Class C shares may
receive a service fee equal to 0.75% of the average daily net asset value of
such shares on an annual basis held by their clients more than one year from
the date of purchase. The payment of fees will commence immediately with
respect to shares eligible for exemption from the CDSC normally applicable to
Class C shares.
Contingent Deferred Sales Charge. Certain shares which a Fund did not pay a
commission on issuance including shares obtained from dividend or distribution
reinvestment are not subject to a CDSC. Any CDSC imposed upon the redemption
of Class A, Class B or Class C shares is a percentage of the lesser of (1) the
net asset value of the shares redeemed or (2) the net asset value at the time
of purchase of such shares.
No CDSC is imposed on a redemption of shares of a Fund in the event of
(1) death or disability of the shareholder; (2) a lump-sum distribution from a
401(k) plan or other benefit plan qualified under the Employee Retirement
Income Security Act of 1974 ("ERISA"); (3) automatic withdrawals from ERISA
plans if the shareholder is at least 59 1/2 years old; (4) involuntary
redemptions of accounts having an aggregate net asset value of less than
$1,000; (5) automatic withdrawals under the Systematic Withdrawal Plan of up
to 1.00% per month of the shareholder's initial account balance; (6)
withdrawals consisting of loan proceeds to a retirement plan participant; (7)
financial hardship withdrawals made by a retirement plan participant; or (8)
withdrawals consisting of returns of excess contributions or excess deferral
amounts made to a retirement plan participant.
The Funds may also sell Class A, Class B or Class C shares at net asset
value without any initial sales charge or a CDSC to certain Directors,
Trustees, officers and employees of the Funds, EIMC, FUNB, EDI, Evergreen
Asset Management Corp. ("Evergreen Asset"), Meridian Investment Company
("Meridian") and certain of their affiliates, and to members of the immediate
families of such persons, to registered representatives of firms with dealer
agreements with EDI, and to a bank or trust company acting as a trustee for a
single account. See "Sales Charge Waivers or Reductions" in the SAI.
How the Funds Value Their Shares. The net asset value of each class of shares
of a Fund is calculated by dividing the value of the amount of a Fund's net
assets attributable to that class by the number of outstanding shares of that
class. Shares are valued each day the New York Stock Exchange (the "Exchange")
is open as of the close of regular trading (currently 4:00 p.m. eastern time).
The securities in a Fund are valued at their current market value determined
on the basis of market quotations or, if such quotations are not readily
available, such other methods as the Trustees believe would accurately reflect
fair value. Non-dollar denominated securities will be valued as of the close
of the Exchange at the closing price of such securities in their principal
trading market.
General. The decision as to which class of shares is more beneficial to you
depends on the amount of your investment and the length of time you will hold
it. If you are making a large investment, thus qualifying for a reduced sales
charge, you might consider Class A shares. If you are making a smaller
investment, you might consider Class B shares because 100% of your purchase is
invested immediately and because such shares will convert to Class A shares,
which incur lower ongoing distribution and/or shareholder service fees, after
seven years. If you are unsure of the time period of your investment, you
might consider Class C shares since there are no initial sales charges and,
although there is no conversion feature, the CDSC only applies to redemptions
made during the first year. Consult your financial intermediary for further
information. The compensation received by dealers and agents may differ
depending on whether they sell Class A, Class B or Class C shares. There is no
size limit on purchases of Class A shares.
In addition to the discount or commission paid to dealers, EDI and EIS
may from time to time pay to broker-dealers additional cash or other
incentives that are conditioned upon the sale of a specified minimum dollar
amount of shares of a Fund and/or other Evergreen funds. Such incentives will
take the form of payment for attendance at seminars, lunches, dinners,
sporting events or theater performances, or payment for travel, lodging and
entertainment incurred in connection with travel by persons associated with a
broker-dealer and their immediate family members to urban or resort locations
within or outside the United States. Such a broker-dealer may elect to receive
cash incentives of equivalent amount in lieu of such payments. EDI may also
limit the availability of such incentives to certain specified dealers. EDI
from time to time sponsors promotions involving First Union Brokerage
Services, Inc., an affiliate of each Fund's investment advisor, and select
broker-dealers, pursuant to which incentives are paid, including gift
certificates and payments in amounts up to 1.0% of the dollar amount of shares
of a Fund sold. Awards may also be made based on the opening of a minimum
number of accounts. Such promotions are not being made available to all
broker-dealers. Certain broker-dealers may also receive payments from EDI or a
Fund's investment advisor over and above the usual service fees or shareholder
servicing payments applicable to a given class of shares.
26
<PAGE>
Additional Purchase Information. As a condition of this offering, if a
purchase is canceled due to nonpayment or because an investor's check does not
clear, the investor will be responsible for any loss a Fund or the Fund's
investment advisor incurs. If such investor is an existing shareholder, a Fund
may redeem shares from an investor's account to reimburse a Fund or a Fund's
investment advisor for any loss. In addition, such investors may be prohibited
or restricted from making further purchases in any of the Evergreen mutual
funds. The Funds will not accept third party checks other than those payable
directly to a shareholder whose account has been in existence at least 30
days.
HOW TO REDEEM SHARES
You may "redeem" (i.e., sell) your shares in a Fund to the Fund for cash
at their net redemption value on any day the Exchange is open, either by
writing to the Fund, c/o ESC, or through your financial intermediary. The
amount you will receive is based on the net asset value adjusted for fractions
of a cent (less any applicable CDSC for Class B or Class C shares) next
calculated after the Fund receives your request in proper form. Proceeds
generally will be sent to you within seven days. However, for shares recently
purchased by check, a Fund will not send proceeds until it is reasonably
satisfied that the check has been collected (which may take up to 15 days).
Once a redemption request has been telephoned or mailed, it is irrevocable and
may not be modified or canceled.
Redeeming Shares Through Your Financial Intermediary. A Fund must receive
instructions from your financial intermediary before 4:00 p.m. (Eastern time)
for you to receive that day's net asset value (less any applicable CDSC). Your
financial intermediary is responsible for furnishing all necessary
documentation to the Fund and may charge you for this service. Certain
financial intermediaries may require that you give instructions earlier than
4:00 p.m. (eastern time).
Redeeming Shares Directly by Mail or Telephone. You may redeem by mail by
sending a signed letter of instruction or stock power form to the Fund, c/o
ESC, (the registrar, transfer agent and dividend-disbursing agent for each
Fund). Stock power forms are available from your financial intermediary, ESC,
and many commercial banks. Additional documentation is required for the sale
of shares by corporations, financial intermediaries, fiduciaries and surviving
joint owners. Signature guarantees are required for all redemption requests
for shares with a value of more than $50,000. Currently, the requirement for a
signature guarantee has been waived on redemptions of $50,000 or less when the
account address of record has been the same for a minimum period of 30 days.
Each Fund and ESC reserve the right to withdraw this waiver at any time. A
signature guarantee must be provided by a bank or trust company (not a Notary
Public), a member firm of a domestic stock exchange or by other financial
institutions whose guarantees are acceptable under the Exchange Act of 1934
and ESC's policies.
Shareholders may redeem amounts of $1,000 or more (up to $50,000) from
their accounts by calling the telephone number on the front page of this
prospectus between the hours of 8:00 a.m. and 6:00 p.m. (eastern time) each
business day (i.e., any weekday exclusive of days on which the Exchange or
ESC's offices are closed). The Exchange is closed on New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day. Redemption requests
received after 4:00 p.m. (Eastern time) will be processed using the net asset
value determined on the next business day. Such redemption requests must
include the shareholder's account name, as registered with a Fund, and the
account number. During periods of drastic economic or market changes,
shareholders may experience difficulty in effecting telephone redemptions. If
you cannot reach a Fund by telephone, you should follow the procedures for
redeeming by mail or through a broker-dealer as set forth herein. The
telephone redemption service is not made available to shareholders
automatically. Shareholders wishing to use the telephone redemption service
must complete the appropriate sections on the application and choose how the
redemption proceeds are to be paid. Redemption proceeds will either (1) be
mailed by check to the shareholder at the address in which the account is
registered or (2) be wired to an account with the same registration as the
shareholder's account in a Fund at a designated commercial bank.
In order to insure that instructions received by ESC are genuine when you
initiate a telephone transaction, you will be asked to verify certain criteria
specific to your account. At the conclusion of the transaction, you will be
given a transaction number confirming your request, and written confirmation
of your transaction will be mailed the next business day. Your telephone
instructions will be recorded. Redemptions by telephone are allowed only if
the address and bank account of record have been the same for a minimum period
of 30 days. Each Fund reserves the right at any time to terminate, suspend, or
change the terms of any redemption method described in this prospectus, except
redemption by mail, and to impose fees.
27
<PAGE>
Except as otherwise noted, the Funds, ESC and EDI will not assume
responsibility for the authenticity of any instructions received by any of
them from a shareholder in writing, over the Evergreen Express Line (described
below), or by telephone. ESC will employ reasonable procedures to confirm that
instructions received over the Evergreen Express Line or by telephone are
genuine. The Funds, ESC and EDI will not be liable when following instructions
received over the Evergreen Express Line or by telephone that ESC reasonably
believes are genuine.
Evergreen Express Line. The Evergreen Express Line offers you specific fund
account information and price and yield quotations as well as the ability to
do account transactions, including investments, exchanges and redemptions. You
may access the Evergreen Express Line by dialing toll free 1-800-346-3858 on
any touch-tone telephone, 24 hours a day, seven days a week.
General. The sale of shares is a taxable transaction for federal income tax
purposes. The Funds may temporarily suspend the right to redeem their shares
when (1) the Exchange is closed, other than customary weekend and holiday
closings; (2) trading on the Exchange is restricted; (3) an emergency exists
and the Funds cannot dispose of their investments or fairly determine their
value; or (4) the SEC so orders. The Funds reserve the right to close an
account that through redemption has fallen below $1,000 and has remained so
for 30 days. Shareholders will receive 60 days' written notice to increase the
account value to at least $1,000 before the account is closed. The Funds have
elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which each
Fund is obligated to redeem shares solely in cash, up to the lesser of
$250,000 or 1% of the Fund's total net assets, during any 90 day period for
any one shareholder.
EXCHANGE PRIVILEGE
How To Exchange Shares. You may exchange some or all of your shares for shares
of the same class in the other Evergreen funds through your financial
intermediary or by calling or writing to ESC or by using the Evergreen Express
Line as described above. If the shares being tendered for exchange are still
subject to a contingent deferred sales charge or are eligible for conversion
in a specified time, such remaining charge or remaining time will carry over
to the shares being acquired in the exchange transaction. Once an exchange
request has been telephoned or mailed, it is irrevocable and may not be
modified or canceled. Exchanges will be made on the basis of the relative net
asset values of the shares exchanged next determined after an exchange request
is received. An exchange, which represents an initial investment in another
Evergreen fund is subject to the minimum investment and suitability
requirements of each Fund.
Each of the Evergreen funds has different investment objectives and
policies. For more information, a prospectus of the fund into which an
exchange will be made should be read prior to the exchange. An exchange order
must comply with the requirement for a redemption or repurchase order and must
specify the dollar value or number of shares to be exchanged. An exchange is
treated for federal income tax purposes as a redemption and purchase of shares
and may result in the realization of a capital gain or loss. Shareholders are
limited to five exchanges per calendar year, with a maximum of three per
calendar quarter. This exchange privilege may be modified or discontinued at
any time by a Fund upon 60 days' notice to shareholders and is only available
in states in which shares of the fund being acquired may lawfully be sold.
No CDSC will be imposed in the event Class B or Class C shares are
exchanged for Class B or Class C shares, respectively, of other Evergreen
funds. If you redeem shares, the CDSC applicable to the Class B or Class C
shares of the Evergreen fund originally purchased for cash is applied. Also,
Class B shares will continue to age following an exchange for purposes of
conversion to Class A shares and determining the amount of the applicable
CDSC.
Exchanges Through Your Financial Intermediary. Generally, your financial
intermediary must receive exchange instructions before 4:00 p.m. (eastern
time) for you to receive that day's net asset value. Your financial
intermediary is responsible for furnishing all necessary documentation to the
Fund and may charge you for this service.
Exchanges by Telephone and Mail. Exchange requests made after 4:00 p.m.
(eastern time) will be processed using the net asset value determined on the
next business day. During periods of drastic economic or market changes,
shareholders may experience difficulty in effecting telephone exchanges. You
should follow the procedures outlined below for exchanges by mail if you are
unable to reach ESC by telephone. If you wish to use the telephone exchange
service you should indicate this on the application. As noted above, each Fund
will employ reasonable procedures to confirm that instructions for the
redemption or exchange of shares communicated by telephone are genuine. A
telephone exchange may be refused by a Fund or ESC if it is
28
<PAGE>
believed advisable to do so. Procedures for exchanging Fund shares by
telephone may be modified or terminated at any time. Written requests for
exchanges should follow the same procedures outlined for written redemption
requests in the section entitled "How to Redeem Shares", however, no signature
guarantee is required.
SHAREHOLDER SERVICES
The Funds offer the following shareholder services. For more information
about these services or your account, contact your financial intermediary, ESC
or the toll-free number on the front page of this prospectus. Some services
are described in more detail in the application.
Systematic Investment Plan. Under a Systematic Investment Plan you may invest
as little as $25 per month to purchase shares of a Fund with no minimum
initial investment required.
Telephone Investment Plan. You may make investments into an existing account
electronically in amounts of not less than $100 or more than $10,000 per
investment. Telephone investment requests received by 4:00 p.m. (Eastern time)
will be credited to a shareholder's account the day the request is received.
Systematic Withdrawal Plan. When an account of $10,000 or more is opened or
when an existing account reaches that size, you may participate in the
Systematic Withdrawal Plan (the "Withdrawal Plan") by filling out the
appropriate part of the application. Under this Withdrawal Plan, you may
receive (or designate a third party to receive) payments in a stated amount of
at least $75, or a maximum of 1.0% per month or 3.0% per quarter of the total
net asset value of your account when the Plan was opened. Fund shares will be
redeemed as necessary to meet withdrawal payments. All participants must elect
to have their dividends and capital gain distributions reinvested
automatically. Any applicable CDSC will be waived with respect to redemptions
occurring under a Withdrawal Plan during a calendar year to the extent that
such redemptions do not exceed 12% of (1) the initial value of the account
plus (2) the value, at the time of purchase, of any subsequent investments.
Investments Through Employee Benefit and Savings Plans. Certain qualified and
non-qualified benefit and savings plans may make shares of the Funds and the
other Evergreen funds available to their participants. Investments made by
such employee benefit plans may be exempt from front-end sales charges if they
meet the criteria set forth under "Class A Shares-Front End Sales Charge
Alternative". Evergreen Asset, EIMC or FUNB may provide compensation to
organizations providing administrative and recordkeeping services to plans
which make shares of the Evergreen funds available to their participants.
Automatic Reinvestment Plan. For the convenience of investors, all dividends
and distributions are automatically reinvested in full and fractional shares
of a Fund at the net asset value per share at the close of business on the
record date, unless otherwise requested by a shareholder in writing. If the
transfer agent does not receive a written request for subsequent dividends
and/or distributions to be paid in cash at least three full business days
prior to a given record date, the dividends and/or distributions to be paid to
a shareholder will be reinvested.
Dollar Cost Averaging. Through dollar cost averaging you can invest a fixed
dollar amount each month or each quarter in any Evergreen fund. This results
in more shares being purchased when the selected fund's net asset value is
relatively low and fewer shares being purchased when a fund's net asset value
is relatively high and may result in a lower average cost per share than a
less systematic investment approach.
Prior to participating in dollar cost averaging, you must establish an
account in an Evergreen fund. You should designate on the application (1) the
dollar amount of each monthly or quarterly investment you wish to make and (2)
the fund in which the investment is to be made. Thereafter, on the first day
of the designated month, an amount equal to the specified monthly or quarterly
investment will automatically be redeemed from your initial account and
invested in shares of the designated fund.
Two Dimensional Investing. You may elect to have income and capital gains
distributions from any class of Evergreen fund shares you own automatically
invested to purchase the same class of shares of any other Evergreen fund. You
may select this service on your application and indicate the Evergreen fund(s)
into which distributions are to be invested.
Tax Sheltered Retirement Plans. The Funds have various retirement plans
available to eligible investors, including Individual Retirement Accounts
(IRAs); Rollover IRAs; Simplified Employee Pension Plans (SEPs); Savings
Incentive Match Plan for Employees (SIMPLEs); Tax Sheltered Annuity; 403(b)(7)
Plans; 401(k) Plans; Keogh Plans; Profit-Sharing Plans; Medical Savings
Accounts and Money Purchase Pension Plans. For details, including fees and
application forms, call toll free 1-800-247-4075 or write to ESC.
29
<PAGE>
BANKING LAWS
The Glass-Steagall Act and other banking laws and regulations presently
prohibit member banks of the Federal Reserve System ("Member Banks") or their
non-bank affiliates from sponsoring, organizing, controlling, or distributing
the shares of registered open-end investment companies such as the Funds. Such
laws and regulations also prohibit banks from issuing, underwriting or
distributing securities in general. However, under the Glass-Steagall Act and
such other laws and regulations, a Member Bank or an affiliate thereof may act
as investment advisor, transfer agent or custodian to a registered open-end
investment company and may also act as agent in connection with the purchase
of shares of such an investment company upon the order of its customer. FUNB
and its affiliates are subject to and in compliance with the aforementioned
laws and regulations.
Changes to applicable laws and regulations or future judicial or
administrative decisions could result in FUNB and its affiliates being
prevented from continuing to perform the services required under the
investment advisory contract or from acting as agent in connection with the
purchase of shares of the Funds by their customers. If FUNB and its affiliates
were prevented from continuing to provide the services called for under the
investment advisory agreement, it is expected that the Trustees would
identify, and call upon each Fund's shareholders to approve, a new investment
advisor. If this were to occur, it is not anticipated that the shareholders of
any Fund would suffer any adverse financial consequences.
- -------------------------------------------------------------------------------
OTHER INFORMATION
- -------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Funds intend to declare dividends from net investment income daily
and distribute to its shareholders such dividends monthly. The Funds intend to
declare and distribute all net realized capital gains at least annually.
Shareholders receive a Fund's distributions in the form of additional shares
of that class of shares upon which the distribution is based or, at the
shareholder's option, in cash. Shareholders of a Fund who have not opted to
receive cash prior to the payable date for any dividend from net investment
income or the record date for any capital gains distribution will have the
number of such shares determined on the basis of a Fund's net asset value per
share computed at the end of that day after adjustment for the distribution.
Net asset value is used in computing the number of shares in both capital
gains and income distribution investments.
Each Fund has qualified and intends to continue to qualify as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code"). While so qualified, so long as a Fund distributes all of its
investment company taxable income and any net realized gains to shareholders,
it is expected that each Fund will not be required to pay any Federal income
taxes. The Code imposes a 4% nondeductible excise tax on regulated investment
companies, such as the Funds, to the extent they do not meet certain
distribution requirements by the end of each calendar year. Each Fund
anticipates meeting such distribution requirements.
Because Class A shares bear most of the costs of distribution of such
shares through payment of a front-end sales charge, while Class B and, when
applicable, Class C shares bear such expenses through a higher annual
distribution fee, expenses attributable to Class B shares and Class C shares
will generally be higher than those of Class A shares, and income
distributions paid by the Fund with respect to Class A shares will generally
be greater than those paid with respect to Class B and Class C shares.
Account statements and/or checks, as appropriate, will be mailed within
seven days after a Fund pays a distribution. Unless the Fund receives
instructions to the contrary before the record or payable date, as the case
may be, it will assume that a shareholder wishes to receive that distribution
and future capital gains and income distributions in shares. Instructions
continue in effect until changed in writing. If a shareholder has elected to
receive dividends and/or capital gain distributions in cash and the postal or
other delivery service selected by ESC is unable to deliver checks to the
shareholder's address of record, the shareholder's distribution option will
automatically be converted to having all dividend and other distributions
reinvested in additional shares. No interest will accrue on amounts
represented by uncashed distribution or redemption checks.
Any taxable dividend declared in October, November or December to
shareholders of record in such a month paid by the following January 31 will
be includable in the taxable income of shareholders as if paid on December 31
of the year in which the dividend was declared.
30
<PAGE>
A Fund may be subject to foreign withholding taxes which would reduce the
yield on its investments. Tax treaties between certain countries and the
United States may reduce or eliminate such taxes. Shareholders of a Fund who
are subject to United States Federal income tax may be entitled, subject to
certain rules and limitations, to claim a Federal income tax credit or
deduction for foreign income taxes paid by a Fund. See the SAI for additional
details. A Fund's transactions in options, futures and forward contracts may
be subject to special tax rules. These rules can affect the amount, timing and
characteristics of distributions to shareholders.
Each Fund is required by Federal law to withhold 31% of reportable
payments (which may include dividends, capital gain distributions, if any, and
redemptions) paid to certain shareholders. In order to avoid this backup
withholding requirement, you must certify on the Application, or on a separate
form supplied by the Funds' transfer agent, that your social security number
or taxpayer identification number is correct and that you are not currently
subject to backup withholding or are exempt from backup withholding. A
shareholder who acquires Class A shares of a Fund and sells or otherwise
disposes of such shares within ninety days of acquisition may not be allowed
to include certain sales charges incurred in acquiring such shares for
purposes of calculating gain and loss realized upon a sale or exchange of
shares of the Fund.
Each Fund intends to distribute its net capital gains as capital gains
dividends. Shareholders should treat such dividends as long-term capital
gains. Each Fund will designate capital gains distributions as such by a
written notice mailed to each shareholder no later than 60 days after the
close of the Fund's taxable year. If a shareholder receives a capital gain
dividend and holds his shares for six months or less, then any allowable loss
on disposition of such shares will be treated as a long-term capital loss to
the extent of such capital gain dividend.
The foregoing discussion of Federal income tax consequences is based on
tax laws and regulations in effect on the date of this prospectus, and is
subject to change by legislative or administrative action. As the foregoing
discussion is for general information only, you should also review the
discussion of "Additional Tax Information" contained in the SAI. In addition,
you should consult your own tax advisor as to the tax consequences of
investments in the Funds, including the application of state and local taxes
which may be different from Federal income tax consequences described above.
GENERAL INFORMATION
Portfolio Turnover. The estimated annual portfolio turnover rate for each Fund
is not expected to exceed 100%. A portfolio turnover rate of 100% would occur
if all of a Fund's portfolio securities were replaced in one year. The
portfolio turnover rate experienced by a Fund directly affects the transaction
costs relating to the purchase and sale of securities which the Fund bears
directly. A high rate of portfolio turnover will increase such costs. See the
SAI for further information regarding the practices of the Fund affecting
portfolio turnover.
Portfolio Transactions. Consistent with the Conduct Rules of the NASD, and
subject to seeking best price and execution, a Fund may consider sales of its
shares as a factor in the selection of dealers to enter into portfolio
transactions with the Fund.
Other Classes of Shares. EVERGREEN SHORT-INTERMEDIATE BOND FUND, EVERGREEN
INTERMEDIATE TERM BOND FUND and EVERGREEN INTERMEDIATE TERM GOVERNMENT
SECURITIES FUND currently offer four classes of shares, Class A, Class B,
Class C and Class Y, and may in the future offer additional classes. Class Y
shares are not offered by this prospectus and are only available to (1) all
shareholders of record in one or more of the Funds for which Evergreen Asset
served as investment advisor as of December 30, 1994, (2) certain
institutional investors and (3) investment advisory clients of FUNB, Evergreen
Asset, EIMC, Meridian or their affiliates. The dividends payable with respect
to Class A, Class B and Class C shares will be less than those payable with
respect to Class Y shares due to the distribution and shareholder servicing-
related expenses borne by Class A, Class B and Class C shares and the fact
that such expenses are not borne by Class Y shares. EVERGREEN CAPITAL
PRESERVATION AND INCOME FUND currently offers Class A, Class B and Class C
shares.
Performance Information. The Funds may quote their "total return" or "yield"
for specified periods in advertisements, reports, or other communications to
shareholders. Total return and yield are computed separately for each Class of
shares. Performance data for one or more classes may be included in any
advertisement or sales literature using performance data of a Fund.
Yield is a way of showing the rate of income a Fund earns on its
investments as a percentage of the Fund's share price. A Fund's yield is
calculated according to accounting methods that are standardized by the SEC
for all stock and bond funds. Because yield accounting methods differ from the
method used for other accounting purposes, a Fund's yield may not equal its
distribution rate, the income paid to your account or the
31
<PAGE>
net investment income reported in the Fund's financial statements. To
calculate yield, a Fund takes the interest income it earned from its portfolio
of investments (as defined by the SEC formula) for a 30-day period (net of
expenses), divides it by the average number of shares entitled to receive
dividends, and expresses the result as an annualized percentage rate based on
the Fund's share price at the end of the 30-day period. This yield does not
reflect gains or losses from selling securities.
Total returns are based on the overall dollar or percentage change in the
value of a hypothetical investment in a Fund. A Fund's total return shows its
overall change in value including changes in share prices and assumes all the
Fund's distributions are reinvested. A cumulative total return reflects a
Fund's performance over a stated period of time. An average annual total
return reflects the hypothetical annually compounded return that would have
produced the same cumulative total return if a Fund's performance had been
constant over the entire period. Because average annual total returns tend to
smooth out variations in a Fund's return, you should recognize that they are
not the same as actual year-by-year results. To illustrate the components of
overall performance, a Fund may separate its cumulative and average annual
total returns into income results and realized and unrealized gain or loss.
Comparative performance information may also be used from time to time in
advertising or marketing a Fund's shares, including data from Lipper
Analytical Services, Inc. and Morningstar, Inc. and other industry
publications. A Fund may also advertise in items of sales literature an
"actual distribution rate" which is computed by dividing the total ordinary
income distributed (which may include the excess of short-term capital gains
over losses) to shareholders for the latest twelve month period by the maximum
public offering price per share on the last day of the period. Investors
should be aware that past performance may not be reflective of future results.
In marketing a Fund's shares, information may be provided that is
designed to help individuals understand their investment goals and explore
various financial strategies. Such information may include publications
describing general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; a questionnaire designed to
help create a personal financial profile; and an action plan offering
investment alternatives. The information provided to investors may also
include discussions of other Evergreen funds, products, and services, which
may include: retirement investing; brokerage products and services; the
effects of periodic investment plans and dollar cost averaging; saving for
college; and charitable giving. In addition, the information provided to
investors may quote financial or business publications and periodicals,
including model portfolios or allocations, as they relate to fund management,
investment philosophy, and investment techniques. EDI may also reprint, and
use as advertising and sales literature, articles from Evergreen Events, a
quarterly magazine provided free of charge to Evergreen fund shareholders.
Year 2000 Risks. Like other investment companies, financial and business
organizations and individuals around the world, the Funds could be adversely
affected if the computer systems used by the Funds' investment advisors and
the Funds' other service providers do not properly process and calculate date-
related information and data from and after January 1, 2000. This is commonly
known as the "Year 2000 Problem." The Funds' investment advisors are taking
steps to address the Year 2000 Problem with respect to the computer systems
that they use and to obtain assurances that comparable steps are being taken
by the Funds' other major service providers. At this time, however, there can
be no assurance that these steps will be sufficient to avoid any adverse
impact on the Funds.
Additional Information. This prospectus and the SAI, which has been
incorporated by reference herein, do not contain all the information set forth
in the Registration Statement filed by the Trust with the SEC under the 1933
Act, as amended. Copies of the Registration Statement may be obtained at a
reasonable charge from the SEC or may be examined, without charge, at the
offices of the SEC in Washington, D.C.
32
<PAGE>
INVESTMENT ADVISOR
Capital Management Group of First Union National Bank, 201 South College
Street, Charlotte, North Carolina 28288
Evergreen Short-Intermediate Bond Fund
Evergreen Intermediate Term Government Securities Fund
Evergreen Investment Management Company, 200 Berkeley Street, Boston,
Massachusetts 02116-5034
Evergreen Capital Preservation and Income Fund
Evergreen Intermediate Term Bond Fund
CUSTODIAN
State Street Bank and Trust Company, Box 9021, Boston, Massachusetts 02205-9827
TRANSFER AGENT
Evergreen Service Company, Box 2121, Boston, Massachusetts 02106-2121
LEGAL COUNSEL
Sullivan & Worcester LLP, 1025 Connecticut Avenue, N.W., Washington, D.C. 20036
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP, 99 High Street, Boston, Massachusetts 02110
DISTRIBUTOR
Evergreen Distributor, Inc., 125 W. 55th Street, New York, New York 10019
37429 541692RV2
<PAGE>
- -------------------------------------------------------------------------------
PROSPECTUS November 1, 1998
- -------------------------------------------------------------------------------
[LOGO OF EVERGREEN
EVERGREEN/SM/ SHORT AND INTERMEDIATE TERM BOND FUNDS FUNDS/SM/ APPEARS HERE]
- -------------------------------------------------------------------------------
EVERGREEN SHORT INTERMEDIATE BOND FUND
EVERGREEN INTERMEDIATE TERM GOVERNMENT SECURITIES FUND
EVERGREEN INTERMEDIATE TERM BOND FUND
(Each a "Fund"; together, the "Funds")
CLASS Y SHARES
The Funds are designed to provide investors with a selection of
investment alternatives which seek to provide a high level of current income.
This prospectus provides information regarding the Class Y shares offered
by the Funds. Each Fund is a series of Evergreen Fixed Income Trust (the
"Trust"), an open-end, diversified, management investment company. This
prospectus sets forth concise information about the Funds that a prospective
investor should know before investing. The address of the Funds is 200
Berkeley Street, Boston, Massachusetts 02116.
A Statement of Additional Information ("SAI") for the Funds dated
November 1, 1998, as supplemented from time to time, has been filed with the
Securities and Exchange Commission ("SEC") and is incorporated by reference
herein. The SAI provides information regarding certain matters discussed in
this prospectus and other matters which may be of interest to investors, and
may be obtained without charge by calling the Funds at (800) 343-2898. There
can be no assurance that the investment objective of any Fund will be
achieved. Investors are advised to read this prospectus carefully.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT INSURED OR OTHERWISE
PROTECTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THE
FUNDS INVOLVES RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Keep This Prospectus For Future Reference
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
EXPENSE INFORMATION....................... 3
FINANCIAL HIGHLIGHTS...................... 4
DESCRIPTION OF THE FUNDS
Investment Objectives and Policies..... 6
Investment Practices and Restrictions.. 8
ORGANIZATION AND SERVICE PROVIDERS........ 13
Service Providers...................... 13
PURCHASE AND REDEMPTION OF SHARES
How to Buy Shares...................... 15
How to Redeem Shares................... 15
Exchange Privilege..................... 17
Shareholder Services................... 17
Banking Laws........................... 18
OTHER INFORMATION
Dividends, Distributions and Taxes..... 19
General Information.................... 20
</TABLE>
2
<PAGE>
- -------------------------------------------------------------------------------
EXPENSE INFORMATION
- -------------------------------------------------------------------------------
The tables and examples set forth below summarize various costs and
expenses a shareholder will bear, directly or indirectly, associated with an
investment in Class Y shares of each Fund. For further information see
"Purchase and Redemption of Shares" and "General Information--Other Classes of
Shares".
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
--------------------------------
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a % of offering
price)........................................................... None
Maximum Contingent Deferred Sales Charge (as a % of original
purchase price or redemption proceeds, whichever is lower)....... None
</TABLE>
Annual operating expenses reflect the normal operating expenses of the
Funds, and include costs such as management, distribution and other fees. The
tables below show the Fund's estimated annual operating expenses for each Fund
for the fiscal year ending June 30, 1999. The examples show what you would pay
if you invested $1,000 over the periods indicated. The examples assume that
you reinvest all of your dividends and that each Fund's average annual return
will be 5%. THE EXAMPLES ARE FOR ILLUSTRATION PURPOSES ONLY AND SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR ANNUAL RETURN. THE
FUND'S ACTUAL EXPENSES AND RETURNS WILL VARY. For a more complete description
of the various costs and expenses borne by the Funds see "Organization and
Service Providers".
EVERGREEN SHORT INTERMEDIATE BOND FUND
<TABLE>
<CAPTION>
ANNUAL OPERATING
EXPENSES
----------------
<S> <C>
Management Fees.............. 0.50%
Other Expenses............... 0.20%
----
Total........................ 0.70%
====
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
-------
<S> <C>
After 1 Year................................. $ 7
After 3 Years................................ $22
After 5 Years................................ $39
After 10 Years............................... $87
</TABLE>
EVERGREEN INTERMEDIATE TERM GOVERNMENT SECURITIES FUND
<TABLE>
<CAPTION>
ANNUAL OPERATING
EXPENSES
----------------
<S> <C>
Management Fees.............. 0.60%
Other Expenses............... 0.22%
----
Total........................ 0.82%
====
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
-------
<S> <C>
After 1 Year................................. $ 8
After 3 Years................................ $ 26
After 5 Years................................ $ 46
After 10 Years............................... $101
</TABLE>
EVERGREEN INTERMEDIATE TERM BOND FUND
<TABLE>
<CAPTION>
ANNUAL OPERATING
EXPENSES*
----------------
<S> <C>
Management Fees.............. 0.27%
Other Expenses............... 0.58%
----
Total........................ 0.85%
====
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
-------
<S> <C>
After 1 Year................................. $ 9
After 3 Years................................ $ 27
After 5 Years................................ $ 47
After 10 Years............................... $105
</TABLE>
* From time to time, a Fund's investment advisor may, at its discretion,
reduce or waive its fees or reimburse a Fund for certain of its expenses in
order to reduce its expense ratios. A Fund's investment advisor may cease
these waivers and reimbursements at any time. The annual operating expenses
and examples reflect fee waivers and expense reimbursements. Absent the
waivers, management fees, other expenses and total operating expenses for
Evergreen Intermediate Term Bond Fund would be 0.63%, 0.59% and 1.22%,
respectively.
3
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
The following tables present, for each Fund, financial highlights for a
share outstanding throughout each period indicated. This information has been
audited by KPMG Peat Marwick LLP, the Funds' independent auditors. Information
for the fiscal periods prior to June 30, 1996, has been audited by other
auditors. A report of KPMG Peat Marwick LLP on the audited information is
included in the Funds' Annual Report which, with respect to each Fund is
incorporated by reference into the Funds' SAI. The following information for
each Fund should be read in conjunction with the financial statements and
related notes which are incorporated by reference into the Funds' SAI.
Further information about each Fund's performance is contained in the
Funds' annual report to shareholders, which may be obtained without charge.
EVERGREEN SHORT-INTERMEDIATE BOND FUND -- CLASS Y SHARES
<TABLE>
<CAPTION>
JANUARY 4,
1991
(COMMENCEMENT
OF CLASS
YEAR ENDED SIX MONTHS OPERATIONS)
JUNE 30, ENDED YEAR ENDED DECEMBER 31, THROUGH
---------------------------- JUNE 30, ----------------------------- DECEMBER 31,
1998 1997 1996 1995 (B) 1994 1993 1992 1991
-------- -------- -------- ---------- -------- -------- -------- -------------
PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
BEGINNING OF PERIOD.... $9.83 $9.82 $10.02 $9.52 $10.43 $10.41 $10.54 $10.06
-------- -------- -------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income.. 0.62 0.64 0.64 0.33 0.65 0.69 0.70 0.71
Net realized and
unrealized gain (loss)
on investments........ 0.07 0.02 (0.19) 0.49 (0.91) 0.19 (0.02) 0.56
-------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations............. 0.69 0.66 0.45 0.82 (0.26) 0.88 0.68 1.27
-------- -------- -------- -------- -------- -------- -------- --------
Less distributions from:
Net investment income.. (0.62) (0.65) (0.65) (0.32) (0.65) (0.68) (0.70) (0.71)
In excess of net
investment income..... 0 0 0 0 0 0 0 (0.01)
Net realized gains on
investments........... 0 0 0 0 0 (0.18) (0.11) (0.07)
-------- -------- -------- -------- -------- -------- -------- --------
Total distributions..... (0.62) (0.65) (0.65) (0.32) (0.65) (0.86) (0.81) (0.79)
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value end of
period................. $9.90 $9.83 $9.82 $10.02 $9.52 $10.43 $10.41 $10.54
======== ======== ======== ======== ======== ======== ======== ========
TOTAL RETURN............ 7.19% 6.88% 4.63% 8.80% (2.55%) 8.67% 6.64% 13.80%
RATIOS/SUPPLEMENTAL DATA
Ratios to average net
assets:
Expenses............... 0.70% 0.62% 0.69% 0.67%(a) 0.65% 0.66% 0.69% 0.69%(a)
Expenses excluding
indirectly paid
expenses.............. 0.70% 0.62% -- -- -- -- -- --
Expenses excluding
waivers and
reimbursements........ 0.70% 0.62% 0.69% 0.67%(a) 0.65% 0.66% 0.69% 0.69%(a)
Net investment income.. 6.25% 6.48% 6.45% 6.68%(a) 6.56% 6.41% 6.67% 7.12%(a)
Portfolio turnover
rate................... 68% 45% 76% 34% 48% 73% 66% 53%
NET ASSETS END OF PERIOD
(THOUSANDS)............ $348,358 $357,706 $352,095 $347,050 $345,025 $376,445 $324,068 $256,254
</TABLE>
- -------
(a) Annualized.
(b) The Fund changed its fiscal year end from December 31 to June 30.
4
<PAGE>
EVERGREEN INTERMEDIATE TERM GOVERNMENT SECURITIES FUND -- CLASS Y SHARES
<TABLE>
<CAPTION>
NOVEMBER 1, 1991
YEAR ENDED (COMMENCEMENT
JUNE 30, TEN MONTHS YEAR ENDED AUGUST 31, OF CLASS OPERATIONS)
---------------- ENDED ---------------------------- THROUGH
1998 1997 JUNE 30, 1996 (B) 1995 1994 1993 AUGUST 31, 1992
------- ------- ----------------- -------- -------- -------- --------------------
PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
BEGINNING OF PERIOD.... $10.02 $9.99 $10.15 $9.92 $10.61 $10.41 $10.00
------- ------- ------- -------- -------- -------- -------
Income from investment
operations:
Net investment income.. 0.56 0.56 0.46 0.55 0.54 0.57 0.48
Net realized and
unrealized gain (loss)
on investments........ 0.19 0.03 (0.16) 0.23 (0.64) 0.24 0.40
------- ------- ------- -------- -------- -------- -------
Total from investment
operations............. 0.75 0.59 0.30 0.78 (0.10) 0.81 0.88
------- ------- ------- -------- -------- -------- -------
Less distributions from:
Net investment income.. (0.56) (0.56) (0.46) (0.55) (0.54) (0.58) (0.47)
Net realized gains on
investments........... 0 0 0 0 (0.05) (0.03) 0
------- ------- ------- -------- -------- -------- -------
Total distributions..... (0.56) (0.56) (0.46) (0.55) (0.59) (0.61) (0.47)
------- ------- ------- -------- -------- -------- -------
Net asset value end of
period................. $10.21 $10.02 $9.99 $10.15 $9.92 $10.61 $10.41
======= ======= ======= ======== ======== ======== =======
TOTAL RETURN............ 7.63% 6.08% 3.00% 8.16% (0.99%) 8.03% 9.04%
RATIOS/SUPPLEMENTAL DATA
Ratios to average net
assets:
Expenses............... 0.82% 0.81% 0.80%(a) 0.70% 0.55% 0.55% 0.55%(a)
Expenses excluding
indirectly paid
expenses.............. 0.82% 0.81% -- -- -- -- --
Expenses excluding
waivers and
reimbursements........ 0.82% 0.89% 0.87%(a) 0.84% 0.82% 0.83% 0.86%(a)
Net investment income.. 5.47% 5.52% 5.47%(a) 5.54% 5.22% 5.48% 5.68%(a)
PORTFOLIO TURNOVER
RATE................... 45% 68% 28% 45% 45% 31% 47%
NET ASSETS END OF PERIOD
(THOUSANDS)............ $99,729 $71,588 $87,004 $106,066 $106,448 $119,172 $87,648
</TABLE>
- -------
(a) Annualized.
(b) The Fund changed its fiscal year end from August 31 to June 30.
EVERGREEN INTERMEDIATE TERM BOND FUND -- CLASS Y SHARES
<TABLE>
<CAPTION>
JANUARY 26, 1998
(COMMENCEMENT
OF CLASS OPERATIONS)
THROUGH
JUNE 30, 1998
--------------------
PER SHARE DATA
<S> <C>
NET ASSET VALUE BEGINNING OF PERIOD....................... $ 9.09
-------
Income from investment operations:
Net investment income.................................... 0.24(b)
Net realized and unrealized gain (loss) on investments
and foreign currency related transactions............... (0.01)
-------
Total from investment operations.......................... 0.23
-------
Less distributions from:
Net investment income.................................... (0.24)
In excess of net investment income....................... 0(c)
Total distributions....................................... (0.24)
-------
Net asset value end of period............................. $ 9.08
-------
TOTAL RETURN.............................................. 2.58%
RATIOS/SUPPLEMENTAL DATA
Ratios to average net assets:
Expenses................................................. 0.86%(a)
Expenses excluding indirectly paid expenses.............. 0.85%(a)
Expenses excluding waivers and reimbursements............ 1.10%(a)
Net investment income.................................... 6.23%(a)
PORTFOLIO TURNOVER RATE................................... 331%
NET ASSETS END OF PERIOD (THOUSANDS)...................... $63,721
</TABLE>
- -------
(a) Annualized.
(b) Calculation based on average shares outstanding.
(c) Represents an amount less than $0.01 per share.
5
<PAGE>
- -------------------------------------------------------------------------------
DESCRIPTION OF THE FUNDS
- -------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
Each Fund's investment objectives are nonfundamental; as a result a Fund
may change its objectives without a shareholder vote. Each Fund has also
adopted certain fundamental investment policies which are mainly designed to
limit a Fund's exposure to risk. These fundamental policies cannot be changed
without a shareholder vote. See the SAI for more information regarding a
Fund's fundamental investment policies or other related investment policies.
There can be no assurance that a Fund's investment objectives will be
achieved.
In addition to the investment policies detailed below, each Fund may
employ certain additional investment strategies which are disclosed in
"Investment Practices and Restrictions" below.
EVERGREEN SHORT-INTERMEDIATE BOND FUND
The objective of EVERGREEN SHORT-INTERMEDIATE BOND FUND is to attain a
high level of current income, with capital growth as a secondary objective.
The Fund invests in a broad range of investment grade debt securities. The
Fund is suitable for conservative investors who want attractive income and
permits them to participate in a broad portfolio of fixed income securities
rather than purchasing a single issue.
The Fund will invest at least 65% of its assets in bonds that, at the
date of investment, are rated within the four highest categories by Standard &
Poor's Ratings Services ("S&P") (AAA, AA, A and BBB), by Moody's Investors
Service Inc. ("Moody's") (Aaa, Aa, A and Baa), by Fitch IBCA, Inc. ("Fitch")
(AAA, AA, A and BBB) or, if not rated under a different system, are of
comparable quality to obligations so rated as determined by another nationally
recognized statistical ratings organization or by the Fund's investment
advisor. The Fund may invest the remaining 35% of its assets in lower rated
bonds, but it will not invest in bonds rated below B. The Fund is not required
to sell or otherwise dispose of any security that loses its rating or has its
rating reduced after the Fund has purchased it.
Debt securities may include fixed, adjustable rate, zero coupon, or
stripped securities, debentures, notes, U.S. government securities, and debt
securities convertible into, or exchangeable for, preferred or common stock.
Debt securities may also include mortgage-backed and asset-backed securities.
See "Investment Practices and Restrictions", below. The duration of the
securities will not exceed 10 years. The Fund intends to maintain a dollar-
weighted average maturity of 5 years or less.
In normal market conditions the Fund may invest up to 20% of its assets
in money market instruments consisting of: (1) high grade commercial paper,
including master demand notes; (2) obligations of banks or savings and loan
associations having at least $1 billion in deposits, including certificates of
deposit and bankers' acceptances; (3) A-rated or better corporate obligations;
(4) obligations issued or guaranteed by the U.S. government or by any agency
or instrumentality of the U.S. government; and (5) repurchase agreements
collateralized by any security listed above.
The types of U.S. government securities in which the Fund may invest
include: direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes and bonds; and notes, bonds, and discount notes of U.S. government
agencies or instrumentalities, such as the Farm Credit System, including the
National Bank for Cooperatives, Farm Credit Banks, and Banks for Cooperatives;
Farmers Home Administration; Federal Home Loan Banks; Federal Home Loan
Mortgage Corporation ("FHLMC"); Federal National Mortgage Association
("FNMA"); Government National Mortgage Association ("GNMA"); Student Loan
Marketing Association; Tennessee Valley Authority; Export-Import Bank of the
United States; Commodity Credit Corporation; Federal Financing Bank; and
National Credit Union Administration (collectively, "U.S. government
securities"). Some U.S. government agency obligations are backed by the full
faith and credit of the U.S. Treasury. Others in which the Fund may invest are
supported by: the issuer's right to borrow an amount limited to a specific
line of credit from the U.S. Treasury; discretionary authority of the U.S.
government to purchase certain obligations of an agency or instrumentality; or
the credit of the agency or instrumentality.
The Fund may also invest up to 20% of its assets in foreign securities or
U.S. securities traded in foreign markets in order to provide further
diversification. The Fund may also invest in preferred stock; units which are
6
<PAGE>
debt securities with stock or warrants attached; and obligations denominated
in foreign currencies. In making these decisions, the Fund's investment
advisor will consider such factors as the condition and growth potential of
various economies and securities markets, currency and taxation considerations
and other pertinent financial, social, national and political factors. See
"Investment Practices and Restrictions"--"Foreign Investments".
The Fund may enter into dollar rolls in which the Fund sells income
securities for delivery in the current month and simultaneously contracts to
repurchase substantially similar (same type, coupon and maturity) securities
on a specified future date. During the roll period, the Fund foregoes
principal and interest paid on such securities. The Fund is compensated by the
difference between the current sales price and forward price for the future
purchase (often referred to as the "drop") as well as by the interest earned
on the cash proceeds of the initial sale. Dollar rolls are treated by the Fund
in the same manner as reverse repurchase agreements for leverage purposes.
EVERGREEN INTERMEDIATE TERM GOVERNMENT SECURITIES FUND
The investment objective of EVERGREEN INTERMEDIATE TERM GOVERNMENT
SECURITIES FUND is to preserve principal value and maintain a high degree of
liquidity while providing current income.
The Fund invests exclusively in U.S. Treasury obligations, obligations
issued or guaranteed as to principal and interest by agencies and
instrumentalities of the U.S. government, receipts evidencing separately
traded principal and interest components of U.S. government obligations,
obligations of supranational entities and repurchase agreements involving any
of such obligations. No more than 35% of the Fund's assets may be invested in
receipts, obligations of supranational entities and repurchase agreements
involving such securities.
The Fund will maintain an average weighted remaining maturity of
approximately three to ten years, although under normal conditions the
investment advisor expects to maintain an average maturity of three to six
years. No remaining maturity will exceed ten years. The investment advisor may
vary the average maturity substantially in anticipation of a change in the
interest rate environment.
The U.S. government obligations that the Fund may acquire include
securities representing an interest in a pool of mortgage loans that are
issued or guaranteed by a U.S. government agency. The primary issuers of these
mortgage-backed securities are GNMA, FNMA and FHLMC. The only agency which may
actually guarantee principal or interest is GNMA. Mortgage-backed securities
are in most cases "pass through" instruments through which the holder receives
a share of all interest and principal payments from the mortgages underlying
the certificates. The mortgages backing these securities include conventional
thirty-year fixed rate mortgages. However, due to scheduled and unscheduled
principal payments on the underlying loans, these securities have a shorter
average maturity and, therefore, less principal volatility than comparable
bonds. During periods of declining interest rates, prepayment of mortgages
underlying mortgage-backed securities can be expected to accelerate. When the
mortgage obligations are prepaid, the Fund will reinvest the prepaid amounts
in securities, the yield of which reflects interest rates prevailing at the
time. For purposes of complying with the Fund's investment policy of acquiring
securities with remaining maturity of ten years or less, the investment
advisor will use the expected life of a mortgage-backed security.
EVERGREEN INTERMEDIATE TERM BOND FUND
The Fund seeks current income by investing primarily in a broad range of
investment quality debt securities. As a secondary objective, the Fund seeks
to protect capital. Where appropriate the Fund will take advantage of
opportunities to realize capital appreciation.
The Fund seeks current income by normally investing at least 80% of its
assets in debt securities including U.S. Treasury bills, notes and bonds;
mortgage-backed securities issued by the U.S. government, its agencies or
instrumentalities; mortgage-backed securities issued by private issuers;
corporate debt securities; and commercial paper. The Fund's debt securities
may also include fixed and adjustable-rate or stripped bonds, debentures,
notes, equipment trust certificates and debt securities convertible into, or
exchangeable for, preferred or common stock. The Fund may also invest in
units, which are debt securities with stock or warrants to buy stock attached,
and preferred stock.
Under ordinary circumstances, the Fund expects to invest at least 65% of
its assets in bonds and debentures. The Fund will invest in securities that,
at the time of investment, are rated within the four highest
7
<PAGE>
grades by S&P (AAA, AA, A and BBB), by Moody's (Aaa, Aa, A and Baa) or by
Fitch (AAA, AA, A and BBB), or if not rated or rated under a different system,
are of comparable quality to obligations so rated, as determined by its
investment advisor. The Fund may invest up to 25% of its assets in below-
investment grade securities having a rating range of BB to CCC by S&P and
Fitch and Ba to Caa by Moody's, or if unrated or rated under a different
system, believed by its investment advisor to be of comparable quality
(commonly known as "junk bonds").
Securities rated BB or lower by S&P or Fitch, or Ba or lower by Moody's,
are considered predominately speculative with respect to the ability of the
issuer to meet principal and interest payments. For more information on below-
investment grade securities, see the SAI.
The Fund may also invest up to 50% of its assets in securities that are
principally traded in securities markets located outside the United States.
The Fund currently expects that the dollar weighted average maturity of
its investments will range from three to seven years. However, the Fund may
invest in securities with remaining maturities of ten years or less.
Bonds which are rated BBB or Baa are considered to be medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present, but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher rated
categories. Such bonds lack outstanding investment characteristics and may
have speculative characteristics.
When the Fund buys securities, it will consider the ratings of Moody's,
S&P, and Fitch assigned to various debt securities as well as many other
factors, including the preservation of capital, the potential for realizing
capital appreciation, maturity and yield to maturity. The Fund will adjust its
investments in particular securities or in types of debt securities in
response to its appraisal of changing economic conditions and trends. The Fund
may sell one security and purchase another security of comparable quality and
maturity to take advantage of what it believes to be short-term differentials
in market values or yield disparities.
Other Eligible Securities. The Fund may invest up to 20% of its total assets
under ordinary circumstances and, when in its investment advisor's opinion
market conditions warrant, up to 100% of its assets for temporary defensive
purposes in the following types of money market instruments: (1) commercial
paper, including master demand notes, that at the date of investment is rated
A-1, the highest grade by S&P, P-1, the highest grade by Moody's or, if not
rated by such services, is issued by a company which at the date of investment
has an outstanding issue rated A or better by S&P or Moody's; (2) obligations,
including certificates of deposit and bankers' acceptances, of banks or
savings and loan associations having at least $1 billion in assets that are
members of the Federal Deposit Insurance Corporation including U.S. branches
of foreign banks and foreign branches of U.S. banks; (3) corporate obligations
which at the date of investment are rated A or better by S&P or Moody's; and
(4) obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities.
INVESTMENT PRACTICES AND RESTRICTIONS
Risk Factors. Bond prices move inversely to interest rates, i.e. as interest
rates decline the values of the bonds increase, and vice versa. The longer the
maturity of a bond, the greater the exposure to market price fluctuations. The
same market factors are reflected in the share price or net asset value of
bond funds which will vary with interest rates. In addition, certain of the
obligations in which each Fund may invest may be variable or floating rate
instruments, which may involve a conditional or unconditional demand feature,
and may include variable amount master demand notes. While these types of
instruments may, to a certain degree, offset the risk to principal associated
with rising interest rates, they would not be expected to appreciate in a
falling interest rate environment.
Defensive Investments. The Funds may invest without limitation in high quality
money market instruments, such as notes, certificates of deposit or bankers'
acceptances, or U.S. government securities if, in the opinion of each Fund's
investment advisor, market conditions warrant a temporary defensive investment
strategy.
Downgrades. If any security invested in by any of the Funds loses its rating
or has its rating reduced after a Fund has purchased it, a Fund is not
required to sell or otherwise dispose of the security, but may consider doing
so.
8
<PAGE>
Repurchase Agreements. The Funds may invest in repurchase agreements.
Repurchase agreements are agreements by which a Fund purchases a security
(usually U.S. government securities) for cash and obtains a simultaneous
commitment from the seller (usually a bank or broker/dealer) to repurchase the
security at an agreed-upon price and specified future date. The repurchase
price reflects an agreed-upon interest rate for the time period of the
agreement. A Fund's risk is the inability of the seller to pay the agreed-upon
price on the delivery date. However, this risk is tempered by the ability of a
Fund to sell the security in the open market in the case of a default. In such
a case, a Fund may incur costs in disposing of the security which would
increase Fund expenses. Each Fund's investment advisor will monitor the
creditworthiness of the firms with which the Funds enter into repurchase
agreements.
Reverse Repurchase Agreements. The Funds may also enter into reverse
repurchase agreements. A reverse repurchase agreement is an agreement by a
Fund to sell a security and repurchase it at a specified time and price. A
Fund could lose money if the market values of the securities it sold decline
below their repurchase prices. Reverse repurchase agreements may be considered
a form of borrowing, and, therefore, a form of leverage. Leverage may magnify
gains or losses of a Fund.
When-Issued, Delayed-Delivery and Forward Commitment Transactions. Each Fund
may enter into transactions whereby it commits to buying a security, but does
not pay for or take delivery of the security until some specified date in the
future. The value of these securities is subject to market fluctuation during
this period and no income accrues to a Fund until settlement. At the time of
settlement, a when-issued security may be valued at less than its purchase
price. When entering into these transactions, a Fund relies on the other party
to consummate the transaction; if the other party fails to do so, a Fund may
be disadvantaged. Each Fund does not intend to purchase when-issued securities
for speculative purposes, but only in furtherance of its investment objective.
Securities Lending. In order to generate additional income, a Fund may lend up
to 33 1/3% of its portfolio securities on a short-term or long-term basis to
broker/dealers, banks, or other institutional borrowers of securities. The
Funds will only enter into loan arrangements with creditworthy borrowers and
will receive collateral in the form of cash or U.S. government securities
equal to at least 100% of the value of the securities loaned. There is the
risk that when lending portfolio securities, the securities may not be
available to a Fund on a timely basis and a Fund may, therefore, lose the
opportunity to sell the securities at a desirable price. In addition, in the
event that a borrower of securities would file for bankruptcy or become
insolvent, disposition of the securities may be delayed pending court action.
Options And Futures. The Funds may buy and sell futures and options on futures
relating to individual securities and indices, and EVERGREEN SHORT-
INTERMEDIATE BOND FUND and EVERGREEN INTERMEDIATE TERM BOND FUND may also buy
and sell futures and options on futures relating to foreign currencies. Such
transactions may be entered into only in order to hedge against declines in
markets and to gain exposure to markets prior to buying individual securities.
Options and futures transactions are intended to enable a Fund to manage
market, interest rate or exchange rate risk, and the Funds do not use these
transactions for speculation or leverage.
A Fund may attempt to hedge all or a portion of its portfolio through the
purchase of both put and call options on its portfolio securities and listed
put options on financial futures contracts for portfolio securities. The Fund
may also write covered call options on its portfolio securities to attempt to
increase current income. The Fund will maintain its positions in securities,
option rights, and segregated cash subject to puts and calls until the options
are exercised, closed, or have expired. An option position may be closed out
only on an exchange which provides a secondary market for an option of the
same series. The Fund may purchase listed put options on financial futures
contracts. These options will be used only to protect portfolio securities
against decreases in value resulting from market factors such as an
anticipated increase in interest rates.
EVERGREEN SHORT-INTERMEDIATE BOND FUND may write (i.e., sell) covered
call and put options. By writing a call option, a Fund becomes obligated
during the term of the option to deliver the securities underlying the option
upon payment of the exercise price. By writing a put option, the Fund becomes
obligated during the term of the option to purchase the securities underlying
the option at the exercise price if the option is exercised. The Fund may also
write straddles (combinations of covered puts and calls on the same underlying
security). The Fund may only write "covered" options. This means that so long
as the Fund is obligated as the writer of a call option, it will own the
underlying securities subject to the option or, in the case of call options on
U.S. Treasury bills, the Fund might own substantially similar U.S. Treasury
bills. The Fund will be considered "covered" with respect to a put option it
writes if, so long as it is obligated as the writer of the put option, it
deposits and maintains with its custodian in a segregated account liquid
assets having a value equal to or greater than the exercise price of the
option.
9
<PAGE>
The principal reason for writing call or put options is to obtain,
through a receipt of premiums, a greater current return than would be realized
on the underlying securities alone. The Fund receives a premium from writing a
call or put option which they retain whether or not the option is exercised.
By writing a call option, the Fund might lose the potential for gain on the
underlying security while the option is open, and by writing a put option the
Fund might become obligated to purchase the underlying securities for more
than its current market price upon exercise.
A futures contract is a firm commitment by two parties: the seller, who
agrees to make delivery of the specific type of instrument called for in the
contract ("going short"), and the buyer, who agrees to take delivery of the
instrument ("going long") at a certain time in the future. Financial futures
contracts call for the delivery of particular debt instruments issued or
guaranteed by the U.S. Treasury or by specified agencies or instrumentalities
of the U.S. government. If the Fund enters into financial futures contracts
directly to hedge its holdings of fixed income securities, it would enter into
contracts to deliver securities at an undetermined price (i.e., "go short") to
protect itself against the possibility that the prices of its fixed income
securities may decline during the Fund's anticipated holding period. The Fund
would agree to purchase securities in the future at a predetermined price
(i.e., "go long") to hedge against a decline in market interest rates.
The EVERGREEN SHORT-INTERMEDIATE BOND FUND and EVERGREEN INTERMEDIATE
TERM BOND FUND may also enter into currency and other financial futures
contracts and write options on such contracts. The Funds intend to enter into
such contracts and related options for hedging purposes. The Funds will enter
into futures on securities, currencies, or index-based futures contracts in
order to hedge against changes in interest rates, exchange rates or securities
prices. A futures contract on securities or currencies is an agreement to buy
or sell securities or currencies during a designated month at whatever price
exists at that time. A futures contract on a securities index does not involve
the actual delivery of securities, but merely requires the payment of a cash
settlement based on changes in the securities index. A Fund does not make
payment or deliver securities upon entering into a futures contract. Instead,
it puts down a margin deposit, which is adjusted to reflect changes in the
value of the contract and which remains in effect until the contract is
terminated.
The Funds may sell or purchase currency or other financial futures
contracts. When a futures contract is sold by a Fund, the profit on the
contract will tend to rise when the value of the underlying securities or
currencies declines and to fall when the value of such securities or
currencies increases. Thus, a Fund sells futures contracts in order to offset
a possible decline in the profit on its securities or currencies. If a futures
contract is purchased by a Fund, the value of the contract will tend to rise
when the value of the underlying securities or currencies increases and to
fall when the value of such securities or currencies declines.
The EVERGREEN SHORT-INTERMEDIATE BOND FUND and EVERGREEN INTERMEDIATE
TERM BOND FUND may enter into closing purchase and sale transactions in order
to terminate a futures contract. The Fund's ability to enter into closing
transactions depends on the development and maintenance of a liquid secondary
market. There is no assurance that a liquid secondary market will exist for
any particular contract or at any particular time. As a result, there can be
no assurance that the Fund will be able to enter into an offsetting
transaction with respect to a particular contract at a particular time. If the
Fund is not able to enter into an offsetting transaction, the Fund will
continue to be required to maintain the margin deposits on the contract and to
complete the contract according to its terms, in which case it would continue
to bear market risk on the transaction.
Risk Characteristics Of Options And Futures. Although options and futures
transactions are intended to enable the Funds to manage market, exchange, or
interest rate risks, these investment devices can be highly volatile, and the
Funds use of them can result in poorer performance (i.e., the Funds' returns
may be reduced). The Funds attempt to use such investment devices for hedging
purposes may not be successful. Successful futures strategies require the
ability to predict future movements in securities prices, interest rates and
other economic factors. When the Funds use financial futures contracts and
options on financial futures contracts as hedging devices, there is a risk
that the prices of the securities subject to the financial futures contracts
and options on financial futures contracts may not correlate perfectly with
the prices of the securities in the Funds' portfolios. This may cause the
financial futures contract and any related options to react to market changes
differently than the portfolio securities. In addition, the Funds' investment
advisors could be incorrect in their expectations and forecasts about the
direction or extent of market factors, such as interest rates, securities
price movements, and other economic factors. Even if the Funds' investment
advisors correctly predict interest rate movements, a hedge could be
unsuccessful if changes in the value of a Fund's futures position did not
correspond to changes in the value of its investments. In these events, the
Funds may lose money on the financial futures contracts or the
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options on financial futures contracts. It is not certain that a secondary
market for positions in financial futures contracts or for options on
financial futures contracts will exist at all times. Although the Funds'
investment advisors will consider liquidity before entering into financial
futures contracts or options on financial futures contracts transactions,
there is no assurance that a liquid secondary market on an exchange will exist
for any particular financial futures contract or option on a financial futures
contract at any particular time. The Funds' ability to establish and close out
financial futures contracts and options on financial futures contract
positions depends on this secondary market. If a Fund is unable to close out
its position due to disruptions in the market or lack of liquidity, the Fund
may lose money on the futures contract or option, and the losses to the Fund
could be significant.
Zero-Coupon And Stripped Securities. The Funds may invest in zero-coupon and
stripped securities. Zero-coupon securities in which the Funds may invest are
debt obligations which are generally issued at a discount and payable in full
at maturity, and which do not provide for current payments of interest prior
to maturity. Zero-coupon securities usually trade at a deep discount from
their face or par value and are subject to greater market value fluctuations
from changing interest rates than debt obligations of comparable maturities
which make current distributions of interest. As a result, the net asset value
of shares of the Funds may fluctuate over a greater range than shares of other
mutual funds investing in securities making current distributions of interest
and having similar maturities.
Zero-coupon securities may include U.S. Treasury bills issued directly by
the U.S. Treasury or other short-term debt obligations, and longer-term bonds
or notes and their unmatured interest coupons which have been separated by
their holder, typically a custodian bank or investment banking firm. A number
of securities firms and banks have stripped the interest coupons from the
underlying principal (the "corpus") of U.S. Treasury securities and resold
them in custodial receipt programs with a number of different names, including
Treasury Income Growth Receipts ("TIGRS") and Certificates of Accrual on
Treasuries ("CATS"). The underlying U.S. Treasury bonds and notes themselves
are held in book-entry form at the Federal Reserve Bank or, in the case of
bearer securities (i.e., unregistered securities which are owned ostensibly by
the bearer or holder thereof), in trust on behalf of the owners thereof.
In addition, the Treasury has facilitated transfers of ownership of zero-
coupon securities by accounting separately for the beneficial ownership of
particular interest coupons and corpus payments on Treasury securities through
the Federal Reserve book-entry record-keeping system. The Federal Reserve
program as established by the Treasury Department is known as "STRIPS" or
"Separate Trading of Registered Interest and Principal of Securities". Under
the STRIPS program, the Funds will be able to have their beneficial ownership
of U.S. Treasury zero-coupon securities recorded directly in the book-entry
record-keeping system in lieu of having to hold certificates or other evidence
of ownership of the underlying U.S. Treasury securities.
When debt obligations have been stripped of their unmatured interest
coupons by the holder, the stripped coupons are sold separately. The principal
or corpus is sold at a deep discount because the buyer receives only the right
to receive a future fixed payment on the security and does not receive any
rights to periodic cash interest payments. Once stripped or separated, the
corpus and coupons may be sold separately. Typically, the coupons are sold
separately or grouped with other coupons with like maturity dates and sold in
such bundled form. Purchasers of stripped obligations acquire, in effect,
discount obligations that are economically identical to the zero-coupon
securities issued directly by the obligor.
Foreign Investments. EVERGREEN SHORT-INTERMEDIATE BOND FUND and EVERGREEN
INTERMEDIATE TERM BOND FUND may invest in foreign securities or securities
denominated in or indexed to foreign currencies. In addition, EVERGREEN SHORT-
INTERMEDIATE BOND FUND may invest in foreign currencies. Foreign securities
may be affected by the strength of foreign currencies relative to the U.S.
dollar, or by political or economic developments in foreign countries.
Accounting procedures and government supervision may be less stringent than
those applicable to U.S. companies. Foreign markets may be less liquid or more
volatile than U.S. markets and may offer less protection to investors. It may
also be more difficult to enforce contractual obligations abroad than would be
the case in the United States because of differences in the legal systems.
Foreign securities may be subject to foreign taxes, which may reduce yield,
and may be less marketable than comparable U.S. securities. All these factors
are considered by the investment advisor before making any of these types of
investments.
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Foreign Currency Transactions. As discussed above, the EVERGREEN SHORT-
INTERMEDIATE BOND FUND and EVERGREEN INTERMEDIATE TERM BOND FUND may invest in
securities of foreign issuers. When the Fund invests in foreign securities,
they usually will be denominated in foreign currencies, and the Fund
temporarily may hold funds in foreign currencies. Thus, the value of Fund
shares will be affected by changes in exchange rates.
As one way of managing exchange rate risk, in addition to entering into
currency futures contracts, the Funds may enter into forward currency exchange
contracts (agreements to purchase or sell currencies at a specified price and
date). The exchange rate for the transaction (the amount of currency the Funds
will deliver or receive when the contract is completed) is fixed when the Fund
enters into the contract. The Funds usually will enter into these contracts to
stabilize the U.S. dollar value of a security it has agreed to buy or sell.
The Funds intend to use these contracts to hedge the U.S. dollar value of a
security it already owns, particularly if the Funds expect a decrease in the
value of the currency in which the foreign security is denominated. Although
the Funds will attempt to benefit from using forward contracts, the success of
its hedging strategy will depend on the investment advisor's ability to
predict accurately the future exchange rates between foreign currencies and
the U.S. dollar. The value of the Fund's investment denominated in foreign
currencies will depend on the relative strength of those currencies and the
U.S. dollar, and the Funds may be affected favorably or unfavorably by changes
in the exchange rates or exchange control regulations between foreign
currencies and the U.S. dollar. Changes in foreign currency exchange rates
also may affect the value of dividends and interest earned, gains and losses
realized on the sale of securities and net investment income and gains, if
any, to be distributed to shareholders by the Fund. The Funds do not intend to
enter into foreign currency transactions for speculation or leverage.
Risk Characteristics Of Asset-Backed Securities. The Funds may invest in
asset-backed securities. Asset-backed securities are created by the grouping
of certain governmental, government-related and private loans, receivables and
other lender assets into pools. Interests in these pools are sold as
individual securities. Payments from the asset pools may be divided into
several different tranches of debt securities, with some tranches entitled to
receive regular installments of principal and interest, other tranches
entitled to receive regular installments of interest, with principal payable
at maturity or upon specified call dates, and other tranches only entitled to
receive payments of principal and accrued interest at maturity or upon
specified call dates. Different tranches of securities will bear different
interest rates, which may be fixed or floating.
Because the loans held in the asset pool often may be prepaid without
penalty or premium, asset-backed securities and mortgage backed securities are
generally subject to higher prepayment risks than most other types of debt
instruments. Prepayment risks on mortgage securities tend to increase during
periods of declining mortgage interest rates, because many borrowers refinance
their mortgages to take advantage of the more favorable rates. Depending upon
market conditions, the yield that the Funds receive from the reinvestment of
such prepayments, or any scheduled principal payments, may be lower than the
yield on the original mortgage security. As a consequence, mortgage securities
may be a less effective means of "locking in" interest rates than other types
of debt securities having the same stated maturity and may also have less
potential for capital appreciation. For certain types of asset pools, such as
collateralized mortgage obligations, prepayments may be allocated to one
tranche of securities ahead of other tranches, in order to reduce the risk of
prepayment for the other tranches.
Prepayments may result in a capital loss to the Funds to the extent that
the prepaid mortgage securities were purchased at a market premium over their
stated amount. Conversely, the prepayment of mortgage securities purchased at
a market discount from their stated principal amount will accelerate the
recognition of interest income by the Funds, which would be taxed as ordinary
income when distributed to the shareholders. The credit characteristics of
asset-backed securities also differ in a number of respects from those of
traditional debt securities. The credit quality of most asset-backed
securities depends primarily upon the credit quality of the assets underlying
such securities, how well the entity issuing the securities is insulated from
the credit risk of the originator or any other affiliated entities, and the
amount and quality of any credit enhancement to such securities.
Derivatives. Derivatives are financial contracts whose value is based on an
underlying asset, such as a stock or a bond, or an underlying economic factor,
such as an index or an interest rate. The Funds may invest in derivatives only
if the expected risks and rewards are consistent with its objectives and
policies.
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Losses from derivatives can sometimes be substantial. This is true partly
because small price movements in the underlying asset can result in immediate
and substantial gains or losses in the value of the derivative. Derivatives
can also cause the Fund to lose money if the Fund fails to correctly predict
the direction in which the underlying asset or economic factor will move.
Borrowing. Each Fund may borrow from banks in an amount up to 33 1/3% of its
total assets, taken at market value. Each Fund may also borrow an additional
5% of its total assets from banks or others. The Funds may only borrow as a
temporary measure for extraordinary or emergency purposes such as redemption
of fund shares. A Fund may not purchase securities so long as outstanding
borrowings do not exceed 5% of its total assets.
Illiquid Securities. The Funds may invest up to 15% of their net assets in
illiquid securities and other securities which are not readily marketable.
Repurchase agreements with maturities longer than seven days will be included
for the purposes of the foregoing 15% limit. The inability of a Fund to
dispose of illiquid or not readily marketable investments readily or at a
reasonable price could impair a Fund's ability to raise cash for redemptions
or other purposes.
Restricted Securities. The Funds may invest in restricted securities,
including securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933 (the "1933 Act"). Generally, Rule 144A establishes a
safe harbor from the registration requirements of the 1933 Act for resale by
large institutional investors of securities not publicly traded in the United
States. Each Fund's investment advisor determines the liquidity of Rule 144A
securities according to guidelines and procedures adopted by the Trust's Board
of Trustees. The Board of Trustees monitors the investment advisor's
application of those guidelines and procedures. Securities eligible for resale
pursuant to Rule 144A, which a Fund's investment advisor has determined to be
liquid or readily marketable, are not subject to the 15% limit on illiquid
securities.
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ORGANIZATION AND SERVICE PROVIDERS
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Fund Structure. Each Fund is an investment pool, which invests shareholders'
money towards a specified goal. Each Fund is a diversified series of an open-
end, investment management company called "Evergreen Fixed Income Trust". The
Trust is a Delaware business trust organized on September 18, 1997.
Board of Trustees. The Trust is supervised by a Board of Trustees that is
responsible for representing the interests of shareholders. The Trustees meet
periodically throughout the year to oversee each Fund's activities, reviewing,
among other things, each Fund's performance and its contractual arrangements
with various service providers.
Shareholder Rights. All shareholders have equal voting liquidation and other
rights. Each share is entitled to one vote for each dollar of net asset value
applicable to such share. Shareholders may exchange shares as described under
"Exchanges," but will have no other preference, conversion, exchange or
preemptive rights. When issued and paid for, your shares will be fully paid
and nonassessable. Shares of the Funds are redeemable, transferable and freely
assignable as collateral. The Trust may establish additional classes or series
of shares.
The Funds do not hold annual shareholder meetings; a Fund may, however,
hold special meetings for such purposes as electing or removing Trustees,
changing fundamental policies and approving investment advisory agreements or
12b-1 plans. In addition, the Funds are prepared to assist shareholders in
communicating with one another for the purpose of convening a meeting to elect
trustees.
SERVICE PROVIDERS
Investment Advisor. The investment advisor to EVERGREEN SHORT-INTERMEDIATE
BOND FUND and EVERGREEN INTERMEDIATE TERM GOVERNMENT SECURITIES FUND is the
Capital Management Group of First Union National Bank ("FUNB"), a subsidiary
of First Union Corporation ("First Union"). First Union is located at 301
South College Street, and FUNB at 201 South College Street, Charlotte, North
Carolina 28288-0630. First Union and its subsidiaries provide a broad range of
financial services to individuals and businesses throughout the United States.
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<PAGE>
The investment advisor to EVERGREEN INTERMEDIATE TERM BOND FUND is
Evergreen Investment Management Company ("EIMC"). EIMC has provided investment
advisory and management services to investment companies and private accounts
since it was organized in 1932. EIMC is an indirect subsidiary of FUNB.
EVERGREEN SHORT-INTERMEDIATE BOND FUND and EVERGREEN INTERMEDIATE TERM
GOVERNMENT SECURITIES FUND pays FUNB an annual fee for its services equal to
0.50% and 0.60%, respectively, of the Fund's average daily net assets.
EVERGREEN INTERMEDIATE TERM BOND FUND pays EIMC a fee, calculated on an
annual basis, equal to 2.0% of gross dividend and interest income of the Fund
plus 0.50% of the first $100,000,000 of the aggregate net asset value of
shares of the Fund, plus 0.45% of the next $100,000,000, plus 0.40% of the
next $100,000,000, plus 0.35% of the next $100,000,000, plus 0.30% of the next
$100,000,000, plus 0.25% of amounts over $500,000,000.
Advisory fees are computed as of the close of business each business day
and paid monthly.
Portfolio Managers. Thomas L. Ellis has been the portfolio manager of
EVERGREEN SHORT-INTERMEDIATE BOND FUND since its inception in 1988. Mr. Ellis
has over 28 years of experience in investments. Since joining FUNB in 1985,
Mr. Ellis has been a Vice President and Senior Portfolio Manager. At FUNB he
is responsible for the portfolio management of over $1 billion in taxable
fixed income assets, including Evergreen Select Fixed Income Fund; the Fixed
Income Fund, a common trust fund; and 17 separate accounts. Prior to joining
First Union, Mr. Ellis served in the bond department of 1st Tennessee Bank.
L. Robert Cheshire has been the portfolio manager of EVERGREEN
INTERMEDIATE TERM GOVERNMENT SECURITIES FUND since its inception in 1991.
Since joining First Fidelity Bank in 1990, which was acquired by First Union
in 1995, Mr. Cheshire has been a Vice President and Senior Portfolio Manager.
He is also head of the Newark Taxable Fixed Income Unit.
Christopher P. Conkey is the portfolio manager of EVERGREEN INTERMEDIATE
TERM BOND FUND. Mr. Conkey has served as Chief Investment Officer of Fixed
Income for the past nine months and as Head of the High Grade Bond Team for
EIMC for the last three years. During the past five years at EIMC, Mr. Conkey
has also served as portfolio manager of several high grade fixed income funds,
several high grade-high yield fixed income funds and several off-shore closed-
end fixed income funds.
Administrator. Evergreen Investment Services, Inc. ("EIS") serves as
administrator to EVERGREEN SHORT-INTERMEDIATE BOND FUND and EVERGREEN
INTERMEDIATE TERM GOVERNMENT SECURITIES FUND. EIS provides each fund with
facilities, equipment and personnel. For its services as administrator, EIS is
entitled to receive a fee based on the aggregate average daily net assets of
all the mutual funds administered by EIS for which any affiliate of FUNB
serves as investment advisor. The administration fee is calculated in
accordance with the following schedule:
ADMINISTRATION FEE
------------------
0.050% on the first $7 billion
0.035% on the next $3 billion
0.030% on the next $5 billion
0.020% on the next $10 billion
0.015% on the next $5 billion
0.010% on assets in excess of $30 billion
EIS also provides facilities, equipment and personnel to EVERGREEN
INTERMEDIATE TERM BOND FUND on behalf of its investment advisor and is
reimbursed by the Funds for its services.
Transfer Agent and Dividend Disbursing Agent. Evergreen Service Company
("ESC"), 200 Berkeley Street, Boston, Massachusetts 02116-5034, acts as each
Fund's transfer agent and dividend disbursing agent. ESC is an indirect,
wholly-owned subsidiary of First Union.
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Custodian. State Street Bank and Trust Company, P.O. Box 9021, Boston,
Massachusetts 02205-9827 acts as each Fund's custodian.
Principal Underwriter. Evergreen Distributor, Inc. ("EDI"), a subsidiary of
The BISYS Group, Inc., located at 125 West 55th Street, New York, New York
10019, is the principal underwriter of each Fund.
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PURCHASE AND REDEMPTION OF SHARES
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HOW TO BUY SHARES
Class Y shares are offered at net asset value without a front-end sales
charge or a contingent deferred sales load. Class Y shares are only offered to
(1) persons who at or prior to December 31, 1994 owned shares in a mutual fund
advised by Evergreen Asset Management Corp. ("Evergreen Asset"), (2) certain
institutional investors and (3) investment advisory clients of FUNB, Evergreen
Asset, EIMC, Meridian or their affiliates.
Eligible investors may purchase Class Y shares of a Fund through broker-
dealers, banks or other financial intermediaries, or directly through EDI. In
addition, you may purchase Class Y shares of a Fund by mailing a completed
application to that Fund, c/o ESC P.O. Box 2121, Boston, Massachusetts 02106-
2121, with a check payable to that Fund. You may also telephone 1-800-343-2898
to obtain the number of an account to which you can wire or electronically
transfer funds and then send in a completed application. The minimum initial
investment is $1,000, which may be waived in certain situations. Subsequent
investments in any amount may be made by check, by wiring federal funds, by
direct deposit or by an electronic funds transfer.
There is no minimum amount for subsequent investments. Investments of $25
or more are allowed under the Systematic Investment Plan. See the application
for more information. Only Class Y shares are offered through this prospectus.
See "General Information"--"Other Classes of Shares".
How the Funds Values Their Shares. The net asset value of each class of shares
of a Fund is calculated by dividing the value of the amount of a Fund's net
assets attributable to that class by the number of outstanding shares of that
class. Shares are valued each day the New York Stock Exchange (the "Exchange")
is open as of the close of regular trading (currently 4:00 p.m. eastern time).
The securities in a Fund are valued at their current market values determined
on the basis of market quotations or, if such quotations are not readily
available, such other methods as the Trustees of the Trust believe would
accurately reflect fair value. Non-dollar denominated securities will be
valued as of the close of the Exchange at the closing price of such securities
in their principal trading markets.
Additional Purchase Information. As a condition of this offering, if a
purchase is canceled due to nonpayment or because an investor's check does not
clear, the investor will be responsible for any loss a Fund or a Fund's
investment advisor incurs. If such investor is an existing shareholder, a Fund
may redeem shares from an investor's account to reimburse a Fund or its
investment advisor for any loss. In addition, such investor may be prohibited
or restricted from making further purchases in any of the Evergreen funds. The
Funds will not accept third party checks other than those payable directly to
a shareholder whose account has been in existence at least 30 days.
HOW TO REDEEM SHARES
You may "redeem" (i.e. sell) your shares in a Fund to the Fund for cash
at the net redemption value on any day the Exchange is open, either by writing
to the Fund, c/o ESC, or through your financial intermediary. The amount you
will receive is based on the net asset value adjusted for fractions of a cent
next calculated after a Fund receives your request in proper form. Proceeds
generally will be sent to you within seven days. However, for shares recently
purchased by check, a Fund will not send proceeds until it is reasonably
satisfied that the check has been collected (which may take up to 15 days).
Once a redemption request has been telephoned or mailed, it is irrevocable and
may not be modified or canceled.
Redeeming Shares Through Your Financial Intermediary. A Fund must receive
instructions from your financial intermediary before 4:00 p.m. (eastern time)
for you to receive that day's net asset value. Your financial intermediary is
responsible for furnishing all necessary documentation to the Fund and may
charge you for this service. Certain financial intermediaries may require that
you give instructions earlier than 4:00 p.m. (eastern time).
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<PAGE>
Redeeming Shares Directly by Mail or Telephone. You may redeem by mail by
sending a signed letter of instruction or stock power form to the Fund, c/o
ESC, (the registrar, transfer agent and dividend-disbursing agent for each
Fund). Stock power forms are available from your financial intermediary, ESC,
and many commercial banks. Additional documentation is required for the sale
of shares by corporations, financial intermediaries, fiduciaries and surviving
joint owners. Signature guarantees are required for all redemption requests
for shares with a value of more than $50,000. Currently, the requirement for a
signature guarantee has been waived on redemptions of $50,000 or less when the
account address of record has been the same for a minimum period of 30 days.
Each Fund and ESC reserve the right to withdraw this waiver at any time. A
signature guarantee must be provided by a bank or trust company (not a Notary
Public), a member firm of a domestic stock exchange or by other financial
institutions whose guarantees are acceptable under the Exchange Act of 1934
and ESC's policies.
Shareholders may redeem amounts of $1,000 or more (up to $50,000) from
their accounts by calling (800) 343-2898 between the hours of 8:00 a.m. and
6:00 p.m. (eastern time) each business day (i.e., any weekday exclusive of
days on which the Exchange or ESC's offices are closed). The Exchange is
closed on New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. Redemption requests received after 4:00 p.m. (Eastern time)
will be processed using the net asset value determined on the next business
day. Such redemption requests must include the shareholder's account name, as
registered with a Fund, and the account number. During periods of drastic
economic or market changes, shareholders may experience difficulty in
effecting telephone redemptions. If you cannot reach the Fund by telephone,
you should follow the procedures for redeeming by mail or through a broker-
dealer as set forth herein. The telephone redemption service is not made
available to shareholders automatically. Shareholders wishing to use the
telephone redemption service must complete the appropriate sections on the
application and choose how the redemption proceeds are to be paid. Redemption
proceeds will either (1) be mailed by check to the shareholder at the address
in which the account is registered or (2) be wired to an account with the same
registration as the shareholder's account in a Fund at a designated commercial
bank.
In order to insure that instructions received by ESC are genuine when you
initiate a telephone transaction, you will be asked to verify certain criteria
specific to your account. At the conclusion of the transaction, you will be
given a transaction number confirming your request, and written confirmation
of your transaction will be mailed the next business day. Your telephone
instructions will be recorded. Redemptions by telephone are allowed only if
the address and bank account of record have been the same for a minimum period
of 30 days. Each Fund reserves the right at any time to terminate, suspend, or
change the terms of any redemption method described in this prospectus, except
redemption by mail, and to impose fees.
Except as otherwise noted, the Funds, ESC and EDI will not assume
responsibility for the authenticity of any instructions received by any of
them from a shareholder in writing, over the Evergreen Express Line (described
below), or by telephone. ESC will employ reasonable procedures to confirm that
instructions received over the Evergreen Express Line or by telephone are
genuine. The Funds, ESC and EDI will not be liable when following instructions
received over the Evergreen Express Line or by telephone that ESC reasonably
believes are genuine.
Evergreen Express Line. The Evergreen Express Line offers you specific fund
account information and price and yield quotations as well as the ability to
do account transactions, including investments, exchanges and redemptions. You
may access the Evergreen Express Line by dialing toll free 1-800-346-3858 on
any touch-tone telephone, 24 hours a day, seven days a week.
General. The sale of shares is a taxable transaction for federal income tax
purposes. The Funds may temporarily suspend the right to redeem their shares
when (1) the Exchange is closed, other than customary weekend and holiday
closings; (2) trading on the Exchange is restricted; (3) an emergency exists
and the Funds cannot dispose of their investments or fairly determine their
value; or (4) the SEC so orders. The Funds reserve the right to close an
account that through redemption has fallen below $1,000 and has remained so
for 30 days. Shareholders will receive 60 days' written notice to increase the
account value to at least $1,000 before the account is closed. The Funds have
elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which each
Fund is obligated to redeem shares solely in cash, up to the lesser of
$250,000 or 1% of the Fund's total net assets, during any 90 day period for
any one shareholder.
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<PAGE>
EXCHANGE PRIVILEGE
How To Exchange Shares. You may exchange some or all of your Class Y shares
for shares of the same Class in the other Evergreen funds through your
financial intermediary or by calling or writing to ESC or by using the
Evergreen Express Line as described above. Once an exchange request has been
telephoned or mailed, it is irrevocable and may not be modified or canceled.
Exchanges will be made on the basis of the relative net asset values of the
shares exchanged next determined after an exchange request is received. An
exchange, which represents an initial investment in another Evergreen fund is
subject to the minimum investment and suitability requirements of each Fund.
Each of the Evergreen funds has different investment objectives and
policies. For more information, a prospectus of the fund into which an
exchange will be made should be read prior to the exchange. An exchange order
must comply with the requirement for a redemption or repurchase order and must
specify the dollar value or number of shares to be exchanged. An exchange is
treated for federal income tax purposes as a redemption and purchase of shares
and may result in the realization of a capital gain or loss. Shareholders are
limited to five exchanges per calendar year, with a maximum of three per
calendar quarter. This exchange privilege may be modified or discontinued at
any time by a Fund upon 60 days' notice to shareholders and is only available
in states in which shares of the fund being acquired may lawfully be sold.
Exchanges Through Your Financial Intermediary. Generally, your financial
intermediary must receive exchange instructions before 4:00 p.m. (eastern
time) for you to receive that day's net asset value. Your financial
intermediary is responsible for furnishing all necessary documentation to the
Fund and may charge you for this service.
Exchanges by Telephone and Mail. Exchange requests made after 4:00 p.m.
(eastern time) will be processed using the net asset value determined on the
next business day. During periods of drastic economic or market changes,
shareholders may experience difficulty in effecting telephone exchanges. You
should follow the procedures outlined below for exchanges by mail if you are
unable to reach ESC by telephone. If you wish to use the telephone exchange
service you should indicate this on the application. As noted above, each Fund
will employ reasonable procedures to confirm that instructions for the
redemption or exchange of shares communicated by telephone are genuine. A
telephone exchange may be refused by a Fund or ESC if it is believed advisable
to do so. Procedures for exchanging Fund shares by telephone may be modified
or terminated at any time. Written requests for exchanges should follow the
same procedures outlined for written redemption requests in the section
entitled "How to Redeem Shares", however, no signature guarantee is required.
SHAREHOLDER SERVICES
The Funds offer the following shareholder services. For more information
about these services or your account, contact your financial intermediary, ESC
or the toll-free number on the front page of this prospectus. Some services
are described in more detail in the application.
Systematic Investment Plan. Under a Systematic Investment Plan you may invest
as little as $25 per month to purchase shares of a Fund with no minimum
initial investment required.
Telephone Investment Plan. You may make investments into an existing account
electronically in amounts of not less than $100 or more than $10,000 per
investment. Telephone investment requests received by 4:00 p.m. (Eastern time)
will be credited to a shareholder's account the day the request is received.
Systematic Withdrawal Plan. When an account of $10,000 or more is opened or
when an existing account reaches that size, you may participate in the
Systematic Withdrawal Plan ("Withdrawal Plan") by filling out the appropriate
part of the application. Under this Withdrawal Plan, you may receive (or
designate a third party to receive) payments in a stated amount of at least
$75, or a maximum of 1.0% per month or 3.0% per quarter of the total net asset
value of your account when the Withdrawal Plan was opened. Fund shares will be
redeemed as necessary to meet withdrawal payments. All participants must elect
to have their dividends and capital gain distributions reinvested
automatically.
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Automatic Reinvestment Plan. For the convenience of investors, all dividends
and distributions are automatically reinvested in full and fractional shares
of a Fund at the net asset value per share at the close of business on the
record date, unless otherwise requested by a shareholder in writing. If the
transfer agent does not receive a written request for subsequent dividends
and/or distributions to be paid in cash at least three full business days
prior to a given record date, the dividends and/or distributions to be paid to
a shareholder will be reinvested.
Dollar Cost Averaging. Through dollar cost averaging you can invest a fixed
dollar amount each month or each quarter in any Evergreen fund. This results
in more shares being purchased when the selected fund's net asset value is
relatively low and fewer shares being purchased when a Fund's net asset value
is relatively high and may result in a lower average cost per share than a
less systematic investment approach.
Prior to participating in dollar cost averaging, you must establish an
account in an Evergreen fund. You should designate on the application (1) the
dollar amount of each monthly or quarterly investment you wish to make and (2)
a Fund in which the investment is to be made. Thereafter, on the first day of
the designated month, an amount equal to the specified monthly or quarterly
investment will automatically be redeemed from your initial account and
invested in shares of the designated fund.
Two Dimensional Investing. You may elect to have income and capital gains
distributions from any Class Y Evergreen fund shares you own automatically
invested to purchase the same class of shares of any other Evergreen fund. You
may select this service on your application and indicate the Evergreen fund(s)
into which distributions are to be invested.
Tax Sheltered Retirement Plans. The Funds have various retirement plans
available to eligible investors, including Individual Retirement Accounts
(IRAs); Rollover IRAs; Simplified Employee Pension Plans (SEPs); Savings
Incentive Match Plan for Employees (SIMPLEs); Tax Sheltered Annuity; 403(b)(7)
Plans; 401(k) Plans; Keogh Plans; Profit-Sharing Plans; Medical Savings
Accounts and Money Purchase Pension Plans. For details, including fees and
application forms, call toll free 1-800-247-4075 or write to ESC.
BANKING LAWS
The Glass-Steagall Act and other banking laws and regulations presently
prohibit member banks of the Federal Reserve System ("Member Banks") or their
non-bank affiliates from sponsoring, organizing, controlling, or distributing
the shares of registered open-end investment companies such as the Funds. Such
laws and regulations also prohibit banks from issuing, underwriting or
distributing securities in general. However, under the Glass-Steagall Act and
such other laws and regulations, a Member Bank or an affiliate thereof may act
as investment advisor, transfer agent or custodian to a registered open-end
investment company and may also act as agent in connection with the purchase
of shares of such an investment company upon the order of its customer. FUNB
and its affiliates are subject to and in compliance with the aforementioned
laws and regulations.
Changes to applicable laws and regulations or future judicial or
administrative decisions could result in FUNB and its affiliates being
prevented from continuing to perform the services required under the
investment advisory contract or from acting as agent in connection with the
purchase of shares of the Funds by their customers. If FUNB and its affiliates
were prevented from continuing to provide the services called for under the
investment advisory agreement, it is expected that the Trustees would
identify, and call upon each Fund's shareholders to approve, a new investment
advisor. If this were to occur, it is not anticipated that the shareholders of
any Fund would suffer any adverse financial consequences.
18
<PAGE>
- -------------------------------------------------------------------------------
OTHER INFORMATION
- -------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Funds intend to declare dividends from net investment income daily
and distribute to its shareholders such dividends monthly. The Funds intend to
declare and distribute all net realized capital gains at least annually.
Shareholders receive a Fund's distributions in the form of additional shares
of that class of shares upon which the distribution is based or, at the
shareholder's option, in cash. Shareholders of a Fund who have not opted to
receive cash prior to the payable date for any dividend from net investment
income or the record date for any capital gains distribution will have the
number of such shares determined on the basis of a Fund's net asset value per
share computed at the end of that day after adjustment for the distribution.
Net asset value is used in computing the number of shares in both capital
gains and income distribution investments.
Each Fund has qualified and intends to qualify as a regulated investment
company under the Internal Revenue Code of 1986, as amended (the "Code").
While so qualified, it is expected that each Fund will not be required to pay
any Federal income taxes so long as a Fund distributes all of its investment
company taxable income and any net realized gains to shareholders. The Code
imposes a 4% nondeductible excise tax on regulated investment companies, such
as the Funds, to the extent they do not meet certain distribution requirements
by the end of each calendar year. Each Fund anticipates meeting such
distribution requirements.
Account statements and/or checks, as appropriate, will be mailed within
seven days after a Fund pays a distribution. Unless a Fund receives
instructions to the contrary before the record or payable date, as the case
may be, it will assume that a shareholder wishes to receive that distribution
and future capital gains and income distributions in shares. Instructions
continue in effect until changed in writing. If a shareholder has elected to
receive dividends and/or capital gain distributions in cash and the postal or
other delivery service selected by ESC is unable to deliver checks to the
shareholder's address of record, the shareholder's distribution option will
automatically be converted to having all dividend and other distributions
reinvested in additional shares. No interest will accrue on amounts
represented by uncashed distribution or redemption checks.
Any taxable dividend declared in October, November or December to
shareholders of record in such a month and paid by the following January 31
will be includable in the taxable income of shareholders as if paid on
December 31 of the year in which the dividend was declared.
A Fund may be subject to foreign withholding taxes which would reduce the
yield on its investments. Tax treaties between certain countries and the
United States may reduce or eliminate such taxes. Shareholders of a Fund who
are subject to United States Federal income tax may be entitled, subject to
certain rules and limitations, to claim a Federal income tax credit or
deduction for foreign income taxes paid by a Fund. See the SAI for additional
details. A Fund's transactions in options, futures and forward contracts may
be subject to special tax rules. These rules can affect the amount, timing and
characteristics of distributions to shareholders.
Each Fund is required by Federal law to withhold 31% of reportable
payments (which may include dividends, capital gain distributions, if any, and
redemptions) paid to certain shareholders. In order to avoid this backup
withholding requirement, you must certify on the application, or on a separate
form supplied by the Funds' transfer agent, that your social security number
or taxpayer identification number is correct and that you are not currently
subject to backup withholding or are exempt from backup withholding.
Each Fund intends to distribute its net capital gains as capital gains
dividends. Shareholders should treat such dividends as long-term capital
gains. Each Fund will designate capital gains distributions as such by a
written notice mailed to each shareholder no later than 60 days after the
close of the Fund's taxable year. If a shareholder receives a capital gain
dividend and holds his shares for six months or less, then any allowable loss
on disposition of such shares will be treated as a long-term capital loss to
the extent of such capital gain dividend.
The foregoing discussion of Federal income tax consequences is based on
tax laws and regulations in effect on the date of this prospectus, and is
subject to change by legislative or administrative action. As the
19
<PAGE>
foregoing discussion is for general information only, you should also review
the discussion of "Additional Tax Information" contained in the SAI. In
addition, you should consult your own tax advisor as to the tax consequences
of investments in the Funds, including the application of state and local
taxes which may be different from Federal income tax consequences described
above.
GENERAL INFORMATION
Portfolio Turnover. The estimated annual portfolio turnover for each Fund is
not expected to exceed 100%. A portfolio turnover rate of 100% would occur if
all of a Fund's portfolio securities were replaced in one year. The portfolio
turnover rate experienced by a Fund directly affects the transaction costs
relating to the purchase and sale of securities which a Fund bears directly. A
high rate of portfolio turnover will increase such costs. See the SAI for
further information regarding the practices of each Fund affecting portfolio
turnover.
Portfolio Transactions. Consistent with the Conduct Rules of the National
Association of Securities Dealers, Inc. and subject to seeking best price and
execution, a Fund may consider sales of its shares as a factor in the
selection of dealers to enter into portfolio transactions with the Fund.
Other Classes of Shares. The Funds currently offer four classes of shares,
Class A, Class B, Class C and Class Y, and may in the future offer additional
classes. Class Y shares are the only class of shares offered by this
prospectus and are only available to (1) shareholders who at or prior to
December 30, 1994 owned shares in a mutual fund advised by Evergreen Asset,
(2) certain institutional investors and (3) investment advisory clients of
FUNB, Evergreen Asset, EIMC, Meridian or their affiliates. The dividends
payable with respect to Class A, Class B and Class C shares will be less than
those payable with respect to Class Y shares due to the distribution and
shareholder servicing-related expenses borne by Class A, Class B and Class C
shares and the fact that such expenses are not borne by Class Y shares.
Performance Information. The Funds may quote their "total return" or "yield"
for specified periods in advertisements, reports, or other communications to
shareholders. Total return and yield are computed separately for each Class of
shares. Performance data for one or more Classes may be included in any
advertisement or sales literature using performance data of a Fund.
Yield is a way of showing the rate of income a Fund earns on its
investments as a percentage of the Fund's share price. A Fund's yield is
calculated according to accounting methods that are standardized by the SEC
for all stock and bond funds. Because yield accounting methods differ from the
method used for other accounting purposes, a Fund's yield may not equal its
distribution rate, the income paid to your account or the net investment
income reported in the Fund's financial statements. To calculate yield, a Fund
takes the interest income it earned from its portfolio of investments (as
defined by the SEC formula) for a 30-day period (net of expenses), divides it
by the average number of shares entitled to receive dividends, and expresses
the result as an annualized percentage rate based on the Fund's share price at
the end of the 30-day period. This yield does not reflect gains or losses from
selling securities.
Total returns are based on the overall dollar or percentage change in the
value of a hypothetical investment in a Fund. A Fund's total return shows its
overall change in value including changes in share prices and assumes all the
Fund's distributions are reinvested. A cumulative total return reflects a
Fund's performance over a stated period of time. An average annual total
return reflects the hypothetical annually compounded return that would have
produced the same cumulative total return if a Fund's performance had been
constant over the entire period. Because average annual total returns tend to
smooth out variations in a Fund's return, you should recognize that they are
not the same as actual year-by-year results. To illustrate the components of
overall performance, a Fund may separate its cumulative and average annual
total returns into income results and realized and unrealized gain or loss.
Comparative performance information may also be used from time to time in
advertising or marketing a Fund's shares, including data from Lipper
Analytical Services, Inc. and Morningstar, Inc. and other industry
publications. A Fund may also advertise in items of sales literature an
"actual distribution rate" which is computed by dividing the total ordinary
income distributed (which may include the excess of short-term capital gains
over losses) to shareholders for the latest twelve month period by the maximum
public offering price per share on the last day of the period. Investors
should be aware that past performance may not be reflective of future results.
20
<PAGE>
In marketing a Fund's shares, information may be provided that is
designed to help individuals understand their investment goals and explore
various financial strategies. Such information may include publications
describing general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; a questionnaire designed to
help create a personal financial profile; and an action plan offering
investment alternatives. The information provided to investors may also
include discussions of other Evergreen funds, products, and services, which
may include: retirement investing; brokerage products and services; the
effects of periodic investment plans and dollar cost averaging; saving for
college; and charitable giving. In addition, the information provided to
investors may quote financial or business publications and periodicals,
including model portfolios or allocations, as they relate to fund management,
investment philosophy, and investment techniques. EDI may also reprint, and
use as advertising and sales literature, articles from Evergreen Events, a
quarterly magazine provided free of charge to Evergreen fund shareholders.
Year 2000 Risks. Like other investment companies, financial and business
organizations and individuals around the world, the Funds could be adversely
affected if the computer systems used by the Funds' investment advisors and
the Funds' other service providers do not properly process and calculate date-
related information and data from and after January 1, 2000. This is commonly
known as the "Year 2000 Problem." The Funds' investment advisors are taking
steps to address the Year 2000 Problem with respect to the computer systems
that they use and to obtain assurances that comparable steps are being taken
by the Funds' other major service providers. At this time, however, there can
be no assurance that these steps will be sufficient to avoid any adverse
impact on the Funds.
Additional Information. This prospectus and the SAI, which has been
incorporated by reference herein, do not contain all the information set forth
in the Registration Statement filed by the Trusts with the SEC under the
Securities Act of 1933, as amended. Copies of the Registration Statement may
be obtained at a reasonable charge from the SEC or may be examined, without
charge, at the offices of the SEC in Washington, D.C.
21
<PAGE>
Notes
22
<PAGE>
INVESTMENT ADVISOR
Capital Management Group of First Union National Bank, 201 South College
Street, Charlotte, North Carolina 28288
Evergreen Short-Intermediate Bond Fund
Evergreen Intermediate Term Government Securities Fund
Evergreen Investment Management Company, 200 Berkeley Street, Boston,
Massachusetts 02116-5034
Evergreen Intermediate Term Bond Fund
CUSTODIAN
State Street Bank and Trust Company, Box 9021, Boston, Massachusetts 02205-9827
TRANSFER AGENT
Evergreen Service Company, Box 2121, Boston, Massachusetts 02106-2121
LEGAL COUNSEL
Sullivan & Worcester LLP, 1025 Connecticut Avenue, N.W., Washington, D.C. 20036
INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP, 99 High Street, Boston, Massachusetts 02110
DISTRIBUTOR
Evergreen Distributor, Inc., 125 W. 55th Street, New York, New York 10019
37976 541693RV2
<PAGE>
EVERGREEN FIXED INCOME TRUST
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
Item 24(a). Financial Statements
The financial statements listed below are included in Part A of this
Amendment to the Registration Statement:
Financial Highlights for:
<TABLE>
<S> <C>
EVERGREEN SHORT-INTERMEDIATE For the years ended June 30, 1998, 1997 and 1996; for the six-month period ended
BOND FUND June 30, 1995; for the years ended December 31, 1994, 1993, 1992 and 1991; for the
Class A nine-month period ended December 31, 1990; and for the year ended March 31, 1990.
EVERGREEN SHORT-INTERMEDIATE For the years ended June 30, 1998, 1997 and 1996; for the six-month period ended June 30, 1995;
BOND FUND for the year ended December 31, 1994; and for the period from January 25, 1993
Class B (commencement of operations) through December 31, 1993.
EVERGREEN SHORT-INTERMEDIATE For the years ended June 30, 1998, 1997 and 1996; for the six-month period ended June 30, 1995;
BOND FUND and for the period from September 6, 1994 (commencement of operations)
Class C through December 31, 1994.
EVERGREEN SHORT-INTERMEDIATE For the years ended June 30, 1998, 1997 and 1996; for the six-month period ended June 30, 1995;
BOND FUND for the years ended December 31, 1994, 1993 and 1992; and the period from January 4, 1991
Class Y (commencement of operations) through December 31, 1991.
EVERGREEN INTERMEDIATE TERM For the years ended June 30, 1998 and 1997; for the ten-month period ended June 30, 1996;
GOVERNMENT SECURITIES FUND for the period from May 2, 1995 (commencement of operations) through August 31, 1995.
Class A
EVERGREEN INTERMEDIATE TERM For the years ended June 30, 1998 and 1997; and for the period from February 9, 1996(commencement
GOVERNMENT SECURITIES FUND of operations) through June 30, 1996.
Class B
EVERGREEN INTERMEDIATE TERM For the years ended June 30, 1998 and 1997; for the period from April 10, 1996 (commencement of
GOVERNMENT SECURITIES FUND operations) through June 30, 1996.
Class C
EVERGREEN INTERMEDIATE TERM For the years ended June 30, 1998 and 1997; for the ten-month period ended June 30, 1996; for
GOVERNMENT SECURITIES FUND the years ended August 31, 1995, 1994 and 1993; and for the period from November 1, 1991
Class Y (commencement of operations) through August 31, 1992.
EVERGREEN CAPITAL PRESERVATION For the year ended June 30, 1998; for the nine-month period ended June 30, 1997; for the year
AND INCOME FUND ended September 30, 1996; for the period from December 30, 1994 (commencement of operations)
Class A through September 30, 1995.
EVERGREEN CAPITAL PRESERVATION For the year June 30, 1998; for the nine-month period ended June 30, 1997; for the years ended
AND INCOME FUND September 30, 1996, 1995, 1994, 1993 and 1992; For the period from July 1, 1991 (commencement
Class B of operations) through September 30, 1991.
EVERGREEN CAPITAL PRESERVATION For the year ended June 30, 1998; for the nine-month period ended June 30, 1997; for the years
AND INCOME FUND ended September 30, 1996, 1995 and 1994; and for the period from February 1, 1993 (commencement
Class C of operations) through September 30, 1993.
EVERGREEN INTERMEDIATE TERM For the year ended June 30, 1998; for the eleven-month period ended June 30, 1997; and
BOND FUND for the years ended July 31, 1996, 1995, 1994, 1993, 1992, 1991, 1990, 1989 and 1988.
Class A
EVERGREEN INTERMEDIATE TERM For the year ended June 30, 1998; for the eleven-month period ended June 30, 1997; for the years
BOND FUND ended July 31, 1996, 1995 and 1994; and for the period from February 1, 1993 (date of initial
Class B public offering) through July 31, 1993.
EVERGREEN INTERMEDIATE TERM For the year ended June 30, 1998; for the eleven-month period ended June 30, 1997; for the
BOND FUND years ended July 31, 1996, 1995 and 1994; and for the period from February 1, 1993 (date of
Class C initial public offering) through July 31, 1993.
EVERGREEN INTERMEDIATE TERM For the period from January 26, 1998 (commencement of operations) through June 30, 1998.
BOND FUND
Class Y
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
The financial statements listed below are incorporated by reference
into Part B of this Amendment to the Registration Statement:
Financial Highlights for Evergreen Short-Intermediate Bond Fund, Evergreen Intermediate Term Government Securities
Fund, Evergreen Capital Preservation and Income Fund and Evergreen Intermediate Term Bond Fund for the years and periods
indicated in Part A:
Schedule of Investments of Evergreen Short-Intermediate Bond Fund, Evergreen Intermediate Term Government Securities Fund,
Evergreen Capital Preservation and Income Fund, Evergreen Intermediate Term Bond Fund as of June 30, 1998.
Statement of Assets and Liabilities of Evergreen Short-Intermediate Bond Fund, Evergreen Intermediate Term Government
Securities Fund, Evergreen Capital Preservation and Income Fund, Evergreen Intermediate Term Bond Fund as of June 30, 1998.
Statement of Operations of Evergreen Short-Intermediate Bond Fund, Evergreen Intermediate Term Government
Securities Fund, Evergreen Capital Preservation and Income Fund, Evergreen Intermediate Term Bond Fund as of June 30, 1998.
Statement of Changes in Net Assets of Evergreen Short-Intermediate Bond Fund for years ended June 30, 1998 and 1997;
Evergreen Intermediate Term Government Securities Fund for years ended June 30, 1998 and 1997;
Evergreen Capital Preservation and Income Fund for year ended June 30, 1998, for the nine-month period ended
June 30, 1997 and the year ended September 30, 1996; Evergreen Intermediate Term Bond Fund for year ended June 30, 1998,
the eleven-month period ended June 30, 1997 and the year ended July 31, 1996.
Combined Notes to Financial Statements of Evergreen Short-Intermediate Bond Fund, Evergreen Intermediate Term Government
Securities Fund, Evergreen Capital Preservation and Income Fund, Evergreen Intermediate Term Bond Fund as of June 30, 1998.
Independent Auditors' Report of Evergreen Short-Intermediate Bond Fund, Evergreen Intermediate Term Government
Securities Fund, Evergreen Capital Preservation and Income Fund, Evergreen Intermediate Term Bond Fund dated July 31, 1998.
The information required by this item Evergreen U.S.
Government Fund, Evergreen Strategic Income Fund, Evergreen Diversified
Bond Fund and Evergreen High Yield Bond Fund is contained in Registration
Statement No. 333-37433/811-07246 filed on August 31, 1998.
Item 24(b). Exhibits
Unless otherwise indicated, each of the Exhibits listed below is filed
herewith.
</TABLE>
<TABLE>
<CAPTION>
Exhibit
Number Description Location
- ------- ----------- -----------
<S> <C> <C>
1 Declaration of Trust Incorporated by reference to
Registrant's Registration Statement
Filed on October 8, 1997
2 By-laws Incorporated by reference to
Registrant's Registration Statement
Filed on October 8, 1997
3 Not applicable
4 Provisions of instruments defining the rights
of holders of the securities being registered
are contained in the Declaration of Trust
Articles II, III.(6)(c), VI.(3), IV.(8), V, VI,
VII, VIII and By-laws Articles II, III and VIII
included as part of Exhibits 1 and 2 of this
Registration Statement
5(a) Investment Advisory and Management Incorporated by reference to Registrant's Registration
Agreement between the Registrant and First Statement filed on August 31, 1998.
Union National Bank
5(b) Investment Advisory and Management Incorporated by reference to Registrant's Registration
Agreement between the Registrant and Keystone Statement filed on August 31, 1998.
Investment Management Company
6(a) Class A and Class C Principal Underwriting Incorporated by reference to Registrant's Registration
Agreement between the Registrant and Evergreen Statement filed on August 31, 1998.
Distributor, Inc.
6(b) Class B Principal Underwriting Agreement Incorporated by reference to Registrant's Registration
between the Registrant and Evergreen Investment Statement filed on August 31, 1998.
Services, Inc. (B-1)
6(c) Class B Principal Underwriting Agreement Incorporated by reference to Registrant's Registration
between the Registrant and Evergreen Distributor, Statement filed on August 31, 1998.
Inc. (B-2)
6(d) Class B Principal Underwriting Agreement Incorporated by reference to Registrant's Registration
between the Registrant and Evergreen Distributor, Statement filed on August 31, 1998.
Inc. (Evergreen/KCF)
6(e) Class Y Principal Underwriting Agreement Incorporated by reference to Registrant's Registration
between the Registrant and Evergreen Distributor, Statement filed on August 31, 1998.
Inc.
6(f) Specimen copy of Dealer Agreement used by Incorporated by reference to
Evergreen Distributor, Inc. Registrant's Pre-Effective Amendment No. 1
Filed on November 10, 1997
7 Form of Deferred Compensation Plan Incorporated by reference to
Registrant's Pre-Effective Amendment No. 1
Filed on November 10, 1997
8 Custodian Agreement between the Registrant Incorporated by reference to Registrant's Registration
and State Street Bank and Trust Company Statement filed on August 31, 1998.
9(a) Administration Agreement between Evergreen Incorporated by reference to Registrant's Registration
Investment Services, Inc. and the Registrant Statement filed on August 31, 1998.
9(b) Transfer Agent Agreement between the Incorporated by reference to Registrant's Registration
Registrant and Evergreen Service Company Statement filed on August 31, 1998.
10 Opinion and Consent of Sullivan & Worcester LLP Incorporated by reference to
Registrant's Post-Effective Amendment No. 1
Filed on December 12, 1997
11 Consent of KPMG Peat Marwick LLP Filed herein
12 Not applicable
13 Not applicable
15(a) 12b-1 Distribution Plan for Class A Incorporated by reference to Registrant's Registration
Statement filed on August 31, 1998.
15(b) 12b-1 Distribution Plan for Class B Incorporated by reference to Registrant' Registration
(KAF B-1) Statement filed on August 31, 1998.
15(c) 12b-1 Distribution Plan for Class B Incorporated by reference to Registrant's Registration
(KAF B-2) Statement filed on August 31, 1998.
15(d) 12b-1 Distribution Plan for Class B Incorporated by reference to Registrant's Registration
(KCF/Evergreen) Statement filed on August 31, 1998.
15(e) 12b-1 Distribution Plan for Class C Incorporated by reference to Registrant's Registration
Statement filed on August 31, 1998.
16 Performance Calculations Filed herein
17 FDS Filed herein
18 Multiple Class Plan Incorporated by reference to
Registrant's Pre-Effective Amendment No. 1
Filed on November 10, 1997
19 Powers of Attorney
</TABLE>
Item 25. Persons Controlled by or Under Common Control with Registrant.
None
Item 26. Number of Holders of Securities (as of September 30, 1998)
Evergreen Short-Intermediate Bond Fund
Class A 1,108
Class B 1,213
Class C 48
Class Y 41
Evergreen Intermediate Term Government Securities Fund
Class A 3,740
Class B 74
Class C 2
Class Y 14
Evergreen Capital Preservation and Income Fund
Class A 518
Class B 1,234
Class C 198
Evergreen Intermediate Term Bond Fund
Class A 8,435
Class B 612
Class C 227
Class Y 24
Item 27. Indemnification.
Provisions for the indemnification of the Registrant's Trustees and
officers are contained the Registrant's Declaration of Trust.
Provisions for the indemnification of the Registrant's Investment Advisor
are contained in their respective Investment Advisory and Management Agreements.
Provisions for the indemnification of Evergreen Distributor, Inc., the
Registrant's principal underwriter, are contained in each Principal Underwriting
Agreement between Evergreen Distributor, Inc. and the Registrant.
Item 28. Business or Other Connections of Investment Adviser.
The Directors and principal executive officers of First Union National Bank
are:
Edward E. Crutchfield, Jr. Chairman and Chief Executive Officer,
First Union Corporation; Chief Executive
Officer and Chairman, First Union National
Bank
Anthony P. Terracciano President, First Union Corporation; President
First Union National Bank
John R. Georgius Vice Chairman, First Union Corporation;
Vice Chairman, First Union National Bank
Marion A. Cowell, Jr. Executive Vice President, Secretary &
General Counsel, First Union Corporation;
Secretary and Executive Vice President,
First Union National Bank
Robert T. Atwood Executive Vice President and Chief Financial
Officer, First Union Corporation; Chief
Financial Officer and Executive Vice
President
All of the above persons are located at the following address: First Union
National Bank, One First Union Center, Charlotte, NC 28288.
The information required by this item with respect to Keystone Investment
Management Company is incorporated by reference to the Form ADV (File No.
801-8327) of Keystone Investment Management Company.
Item 29. Principal Underwriters.
The Directors and principal executive officers of Evergreen Distributor,
Inc. are:
Lynn C. Mangum Director, Chairman and Chief Executive
Officer
Robert J. McMullan Director, Executive Vice President and
Treasurer
J. David Huber President
Kevin J. Dell Vice President, General Counsel and Secretary
All of the above persons are located at the following address: Evergreen
Distributor, Inc., 125 West 55th Street, New York, New York 10019.
Evergreen Distributor, Inc. acts as principal underwriter for each
registered investment company or series thereof that is a part of the Evergreen
"fund complex" as such term is defined in Item 22(a) of Schedule 14A under the
Securities Exchange Act of 1934.
Item 30. Location of Accounts and Records.
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:
Evergreen Investment Services, Inc., Evergreen Service Company and Keystone
Investment Management Company, all located at 200 Berkeley Street, Boston,
Massachusetts 02110
First Union National Bank, One First Union Center, 301 S. College Street,
Charlotte, North Carolina 28288
Iron Mountain, 3431 Sharp Slot Road, Swansea, Massachusetts 02777
State Street Bank and Trust Company, 2 Heritage Drive, North Quincy,
Massachusetts 02171
Item 31. Management Services.
Not Applicable
Item 32. Undertakings.
The Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual
report to shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Columbus, and State of Ohio, on the day of
October, 1998.
EVERGREEN FIXED INCOME TRUST
By: /s/ William J. Tomko
-----------------------------
Name: William J. Tomko
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 29th day of October, 1998.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/William J. Tomko /s/ Laurence B. Ashkin /s/ Charles A. Austin, III
- ------------------------- ----------------------------- --------------------------------
William J. Tomko Laurence B. Ashkin* Charles A. Austin III*
President amd Treasurer (Principal Trustee Trustee
Financial and Accounting Officer)
/s/ K. Dun Gifford /s/ James S. Howell /s/ William Walt Pettit
- ---------------------------- ---------------------------- --------------------------------
K. Dun Gifford* James S. Howell* William Walt Pettit*
Trustee Trustee Trustee
/s/Gerald M. McDonnell /s/ Thomas L. McVerry /s/ Michael S. Scofield
- ------------------------------- ----------------------------- --------------------------------
Gerald M. McDonell* Thomas L. McVerry* Michael S. Scofield*
Trustee Trustee Trustee
/s/ David M. Richardson /s/ Russell A. Salton, III MD
- ------------------------------ -------------------------------
David M. Richardson* Russell A. Salton, III MD*
Trustee Trustee
/s/ Richard J. Shima
- ------------------------------
Richard J. Shima*
Trustee
</TABLE>
*By: /s/ Maureen E. Towle
- -------------------------------
Maureen E. Towle
Attorney-in-Fact
*Maureen E. Towle, by signing her name hereto, does hereby sign this
document on behalf of each of the above-named individuals pursuant to powers of
attorney duly executed by such persons.
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------- -------
11 Consent of KPMG Peat Marwick LLP
16 Fund Performance
17 Financial Data Schedules
CONSENT OF INDEPENDENT AUDITORS
The Trustees and Shareholders
Evergreen Fixed Income Trust:
We consent to the use of our report, dated July 31, 1998, for Evergreen
Short-Intermediate Bond Fund, Evergreen Intermediate Term Government
Securities Fund, Evergreen Capital Preservation and Income Fund and Evergreen
Intermediate Term Bond Fund incorporated herein by reference and to the
references to our firm under the captions "FINANCIAL HIGHLIGHTS" in the
prospectuses and "Independent Auditors" in the statement of additional
information.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Boston, Massachusetts
October 26, 1998
<TABLE>
<CAPTION>
Short-Intermediate
$967.50
A NAV A A
TIME ACCOUNT A AVERAGE A/C VALUE A AVERAGE
YEARS PERIOD VALUE CLASS ANNNUAL W/LOAD CLASS ANNNUAL
<S> <C> <C> <C> <C> <C> <C> <C>
30-Jun-98 BLANK 1,978.69 0.00% 967.5 -3.25% -3.25%
31-May-98 1MO 1,967.11 0.59% 0.59% 973.19 -2.68% -2.68%
31-Mar-98 QTR 1,947.63 1.59% 1.59% 982.93 -1.71% -1.71%
31-Dec-97 YTD 1,914.23 3.37% 3.37% 1,000.08 0.01% 0.01%
30-Jun-97 1 1,847.87 7.08% 7.08% 1,035.99 3.60% 3.60%
30-Jun-95 3 1,657.03 19.41% 6.09% 1,155.31 15.53% 4.93%
30-Jun-93 5 1,529.74 29.35% 5.28% 1,251.44 25.14% 4.59%
30-Jun-88 10 0 0
31-Jan-89 INCEPT. 1,000.00 97.87% 7.51% 1,914.38 91.44% 7.14%
INCEPTION FACTOR: 9.4192
</TABLE>
<TABLE>
<CAPTION>
$1,000
B B NAV LEVEL VALUE OF VALUE OF B
TIME ACCOUNT B AVERAGE LOAD CLASS B CLASS B INIB. AVERAGE
YEARS PERIOD VALUE CLASS ANNNUAL COMP INVESTMENT INVESTMENT CUMULATIVE ANNUAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Jun-98 BLANK 1,291.73 0.00% 50 1,000.00 1,000.00 0.00%
31-May-98 1MO 1,285.13 0.51% 0.51% 50 1,005.13 1,001.01 -4.49% -4.49%
31-Mar-98 QTR 1,274.33 1.36% 1.36% 50 1,013.65 1,001.01 -3.64% -3.64%
31-Dec-97 YTD 1,255.27 2.90% 2.90% 50 1,029.05 1,003.03 -2.10% -2.10%
30-Jun-97 1 1,217.32 6.11% 6.11% 50 1,061.12 1,007.11 1.11% 1.11%
30-Jun-95 3 1,110.66 16.30% 5.16% 29.641 1,163.02 988.05 13.34% 4.26%
30-Jun-93 5 1,041.14 24.07% 4.41% 18.542 1,240.69 927.1 22.21% 4.09%
30-Jun-88 10 0 1000
25-Jan-93 INCEPT. 1,000.00 29.17% 4.82% 9.385 1,291.73 938.51 28.23% 4.68%
INCEPTION FACTOR: 5.4329
</TABLE>
<TABLE>
<CAPTION>
$1,000
C C NAV LEVEL VALUE OF VALUE OF C
ACCOUNT C AVERAGE LOAD CLASS C CLASS C INIC. AVERAGE
YEARS VALUE CLASS ANNNUAL COMP INVESTMENT INVESTMENT CUMULATIVE ANNUAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Jun-98 BLANK 1,241.48 0.00% 10 1,000.00 1,000.00 0.00%
31-May-98 1MO 1,235.14 0.51% 0.51% 10 1,005.13 1,001.01 -0.49% -0.49%
31-Mar-98 QTR 1,224.76 1.37% 1.37% 10 1,013.65 1,001.01 0.37% 0.37%
31-Dec-97 YTD 1,206.43 2.91% 2.91% 10 1,029.06 1,003.03 1.91% 1.91%
30-Jun-97 1 1,169.95 6.11% 6.11% 10 1,061.14 1,007.11 5.11% 5.11%
30-Jun-95 3 1,068.56 16.18% 5.13% 1,161.83 987.06 16.18% 5.13%
30-Jun-93 5 0 1000 927.97
30-Jun-88 10 0 1000
6-Sep-94 INCEPT. 1,000.00 24.15% 5.83% 0 1,241.48 1,007.11 24.15% 5.83%
INCEPTION FACTOR: 3.8192
</TABLE>
Y
ACCOUNT Y AVERAGE
YEARS VALUE CLASS ANNNUAL
30-Jun-98 BLANK 1,664.36 0.00%
31-May-98 1MO 1,654.49 0.60% 0.60%
31-Mar-98 QTR 1,637.83 1.62% 1.62%
31-Dec-97 YTD 1,609.35 3.42% 3.42%
30-Jun-97 1 1,552.77 7.19% 7.19%
30-Jun-95 3 1,388.59 19.86% 6.22%
30-Jun-93 5 1,278.37 30.19% 5.42%
30-Jun-88 10 0
4-Jan-91 INCEPT. 1,000.00 66.44% 7.04%
INCEPTION FACTOR: 7.4932
<TABLE>
<CAPTION>
Capital Preservation
$967.50
A NAV A A
TIME ACCOUNT A AVERAGE A/C VALUE A AVERAGE
YEARS PERIOD VALUE CLASS ANNNUAL W/LOAD CLASS ANNNUAL
<S> <C> <C> <C> <C> <C> <C> <C>
30-Jun-98 BLANK 1,253.74 0.00% 967.5 -3.25% -3.25%
31-May-98 1MO 1,250.63 0.25% 0.25% 969.91 -3.01% -3.01%
31-Mar-98 QTR 1,241.75 0.97% 0.97% 976.84 -2.32% -2.32%
31-Dec-97 YTD 1,226.60 2.21% 2.21% 988.91 -1.11% -1.11%
30-Jun-97 1 1,191.36 5.24% 5.24% 1,018.16 1.82% 1.82%
30-Jun-95 3 1,050.02 19.40% 6.09% 1,155.22 15.52% 4.93%
30-Jun-93 5 0 0
30-Jun-88 10 0 0
30-Dec-94 INCEPT. 1,000.00 25.37% 6.67% 1,213.00 21.30% 5.67%
INCEPTION FACTOR: 3.5041
</TABLE>
<TABLE>
<CAPTION>
$1,000
B B NAV LEVEL VALUE OF VALUE OF B
TIME ACCOUNT B AVERAGE LOAD CLASS B CLASS B INIB. AVERAGE
YEARS PERIOD VALUE CLASS ANNNUAL COMP INVESTMENT INVESTMENT CUMULATIVE ANNUAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Jun-98 BLANK 1,361.13 0.00% 50 1,000.00 1,000.00 0.00%
31-May-98 1MO 1,358.59 0.19% 0.19% 49.898 1,001.87 997.95 -4.80% -4.80%
31-Mar-98 QTR 1,350.61 0.78% 0.78% 49.796 1,007.79 995.91 -4.20% -4.20%
31-Dec-97 YTD 1,336.77 1.82% 1.82% 49.694 1,018.22 993.88 -3.15% -3.15%
30-Jun-97 1 1,303.48 4.42% 4.42% 49.643 1,044.23 992.86 -0.54% -0.54%
30-Jun-95 3 1,164.26 16.91% 5.35% 30 1,169.10 1,004.12 13.91% 4.44%
30-Jun-93 5 1,096.14 24.18% 4.43% 19.677 1,241.75 983.84 22.21% 4.09%
30-Jun-88 10 0 1000
1-Jul-91 INCEPT. 1,000.00 36.11% 4.50% 0 1,361.13 974 36.11% 4.50%
INCEPTION FACTOR: 7.0055
</TABLE>
<TABLE>
<CAPTION>
$1,000
C C NAV LEVEL VALUE OF VALUE OF C
ACCOUNT C AVERAGE LOAD CLASS C CLASS C INIC. AVERAGE
YEARS VALUE CLASS ANNNUAL COMP INVESTMENT INVESTMENT CUMULATIVE ANNUAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Jun-98 BLANK
31-May-98 1MO 1,272.11 0.00% 10 1,000.00 1,000.00 0.00%
31-Mar-98 QTR 1,268.44 0.29% 0.29% 9.99 1,002.90 998.97 -0.71% -0.71%
31-Dec-97 YTD 1,261.00 0.88% 0.88% 9.97 1,008.82 996.93 -0.12% -0.12%
30-Jun-97 1 1,248.07 1.93% 1.93% 9.95 1,019.26 994.89 0.93% 0.93%
30-Jun-95 3 1,216.99 4.53% 4.53% 9.94 1,045.30 993.88 3.54% 3.54%
30-Jun-93 5 1,086.87 17.04% 5.39% 1,170.43 1,005.16 17.04% 5.39%
30-Jun-88 10 1,023.20 24.33% 4.45% 1,243.27 984.83 24.33% 4.45%
1-Feb-93 INCEPT. 0 1000
1,000.00 27.21% 4.55% 0 1,272.11 991.85 27.21% 4.55%
INCEPTION FACTOR: 5.4137
</TABLE>
<TABLE>
<CAPTION>
$967.50
Intermediate Bond Fund
A NAV A A
TIME ACCOUNT A AVERAGE A/C VALUE A AVERAGE
YEARS PERIOD VALUE CLASS ANNNUAL W/LOAD CLASS ANNNUAL
<S> <C> <C> <C> <C> <C> <C> <C>
31-May-98 1MO 2,080.15 0.00% 967.5 -3.25% -3.25%
31-Mar-98 QTR 2,067.47 0.61% 0.61% 973.4 -2.66% -2.66%
31-Dec-97 YTD 2,042.43 1.85% 1.85% 985.37 -1.46% -1.46%
30-Jun-97 1 2,015.30 3.22% 3.22% 998.63 -0.14% -0.14%
30-Jun-95 3 1,911.55 8.82% 8.82% 1,052.83 5.28% 5.28%
30-Jun-93 5 1,683.59 23.55% 7.30% 1,195.39 19.54% 6.13%
30-Jun-88 10 1,556.44 33.65% 5.97% 1,293.05 29.30% 5.27%
14-Apr-87 INCEPT. 1,005.29 106.92% 7.54% 2,001.96 100.20% 7.19%
1,000.00 108.02% 6.74% 2,012.55 101.25% 6.43%
INCEPTION FACTOR: 11.2219
</TABLE>
<TABLE>
<CAPTION>
$1,000
B B NAV LEVEL VALUE OF VALUE OF B
TIME ACCOUNT B AVERAGE LOAD CLASS B CLASS B INIB. AVERAGE
YEARS PERIOD VALUE CLASS ANNNUAL COMP INVESTMENT INVESTMENT CUMULATIVE ANNUAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Jun-98 BLAN 1,337.03 0.00% 50 1,000.00 1,000.00 0.00%
31-May-98 1MO 1,329.69 0.55% 0.55% 50 1,005.52 1,001.10 -4.45% -4.45%
31-Mar-98 QTR 1,315.23 1.66% 1.66% 50 1,016.57 1,003.31 -3.34% -3.34%
31-Dec-97 YTD 1,301.53 2.73% 2.73% 49.672 1,027.28 993.44 -2.24% -2.24%
30-Jun-97 1 1,239.28 7.89% 7.89% 50 1,078.87 1,015.64 2.89% 2.89%
30-Jun-95 3 1,107.14 20.76% 6.49% 30 1,207.64 1,014.51 17.76% 5.60%
30-Jun-93 5 1,040.00 28.56% 5.15% 19.177 1,285.60 958.86 26.64% 4.84%
30-Jun-88 10 0 1000 988.04
1-Feb-93 INCEPT. 1,000.00 33.70% 5.51% 9.722 1,337.03 972.19 32.73% 5.37%
INCEPTION FACTOR: 5.4109
</TABLE>
<TABLE>
<CAPTION>
$1,000
C C NAV LEVEL VALUE OF VALUE OF C
ACCOUNT C AVERAGE LOAD CLASS C CLASS C INIC. AVERAGE
YEARS VALUE CLASS ANNNUAL COMP INVESTMENT INVESTMENT CUMULATIVE ANNUAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Jun-98 BLAN 1,337.12 0.00% 10 1,000.00 1,000.00 0.00%
31-May-98 1MO 1,329.78 0.55% 0.55% 10 1,005.52 1,001.10 -0.45% -0.45%
31-Mar-98 QTR 1,315.32 1.66% 1.66% 10 1,016.58 1,003.31 0.66% 0.66%
31-Dec-97 YTD 1,300.20 2.84% 2.84% 9.95 1,028.39 994.53 1.84% 1.84%
30-Jun-97 1 1,237.99 8.01% 8.01% 10 1,080.07 1,016.78 7.01% 7.01%
30-Jun-95 3 1,107.14 20.77% 6.49% 1,207.73 1,014.51 20.77% 6.49%
30-Jun-93 5 1,038.91 28.70% 5.18% 1,287.04 959.87 28.70% 5.18%
30-Jun-88 10 0 1000 988.04
1-Feb-93 INCEPT. 1,000.00 33.71% 5.52% 0 1,337.12 972.19 33.71% 5.52%
INCEPTION FACTOR: 5.4109
</TABLE>
Y
ACCOUNT Y AVERAGE
YEARS VALUE CLASS ANNNUAL
1,025.78 0.00%
30-Jun-98 BLAN 1,019.32 0.63% 0.63%
31-May-98 1MO 1,006.56 1.91% 1.91%
31-Mar-98 QTR 0
31-Dec-97 YTD 0
30-Jun-97 1 0
30-Jun-95 3 0
30-Jun-93 5 0
30-Jun-88 10 1,000.00 2.58% 6.14%
28-Jan-98 INCEPT.
INCEPTION FACTOR: 0.4274
<TABLE>
<CAPTION>
Intermediate Term Government
$967.50
A NAV A A
TIME ACCOUNT A AVERAGE A/C VALUE A AVERAGE
YEARS PERIOD VALUE CLASS ANNNUAL W/LOAD CLASS ANNNUAL
<S> <C> <C> <C> <C> <C> <C> <C>
30-Jun-98 BLAN 1,219.94 0.00% 967.5 -3.25% -3.25%
31-May-98 1MO 1,213.26 0.55% 0.55% 972.83 -2.72% -2.72%
31-Mar-98 QTR 1,200.07 1.66% 1.66% 983.52 -1.65% -1.65%
31-Dec-97 YTD 1,184.23 3.02% 3.02% 996.68 -0.33% -0.33%
30-Jun-97 1 1,134.30 7.55% 7.55% 1,040.54 4.05% 4.05%
30-Jun-95 3 1,029.43 18.51% 5.82% 1,146.55 14.65% 4.66%
30-Jun-93 5 0 0
30-Jun-88 10 0 0
2-May-95 INCEPT. 1,000.00 21.99% 6.48% 1,180.29 18.03% 5.37%
INCEPTION FACTOR: 3.1671 3.1671
</TABLE>
<TABLE>
<CAPTION>
$1,000
B B NAV LEVEL VALUE OF VALUE OF B
TIME ACCOUNT B AVERAGE LOAD CLASS B CLASS B INIB. AVERAGE
YEARS PERIOD VALUE CLASS ANNNUAL COMP INVESTMENT INVESTMENT CUMULATIVE ANNUAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Jun-98 BLAN 1,097.08 0.00% 50 1,000.00 1,000.00 0.00%
31-May-98 1MO 1,091.91 0.47% 0.47% 50 1,004.73 1,000.98 -4.53% -4.53%
31-Mar-98 QTR 1,081.73 1.42% 1.42% 50 1,014.19 1,002.95 -3.58% -3.58%
31-Dec-97 YTD 1,069.88 2.54% 2.54% 50 1,025.42 1,002.95 -2.46% -2.46%
30-Jun-97 1 1,029.46 6.57% 6.57% 50 1,065.68 1,018.96 1.57% 1.57%
30-Jun-95 3 0 30 1000 1,005.91
30-Jun-93 5 0 19.411 1000 970.53
30-Jun-88 10 0 1000
9-Feb-96 INCEPT. 1,000.00 9.71% 3.95% 29.509 1,097.08 983.62 6.76% 2.77%
INCEPTION FACTOR: 2.3918 2.3918
</TABLE>
<TABLE>
<CAPTION>
$1,000
C C NAV LEVEL VALUE OF VALUE OF C
ACCOUNT C AVERAGE LOAD CLASS C CLASS C INIC. AVERAGE
YEARS VALUE CLASS ANNNUAL COMP INVESTMENT INVESTMENT CUMULATIVE ANNUAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Jun-98 BLAN 1,129.29 0.00% 10 1,000.00 1,000.00 0.00%
31-May-98 1MO 1,123.97 0.47% 0.47% 10 1,004.73 1,000.98 -0.53% -0.53%
31-Mar-98 QTR 1,113.49 1.42% 1.42% 10 1,014.19 1,002.95 0.42% 0.42%
31-Dec-97 YTD 1,101.30 2.54% 2.54% 10 1,025.41 1,002.95 1.54% 1.54%
30-Jun-97 1 1,059.69 6.57% 6.57% 10 1,065.68 1,018.96 5.57% 5.57%
30-Jun-95 3 0 1000 1,005.91
30-Jun-93 5 0 1000 970.53
30-Jun-88 10
30-Jun-78 20 1000
10-Apr-96 INCEPT. 1000
1,000.00 12.93% 5.62% 0 1,129.29 1,019.98 12.93% 5.62%
INCEPTION FACTOR: 2.2247 2.2247
</TABLE>
Y
ACCOUNT Y AVERAGE
YEARS VALUE CLASS ANNNUAL
30-BLANK8 14,834.04 0.00% 0.00%
31-1aMO98 14,752.07 0.56% 0.56%
31-QTR-98 14,590.23 1.67% 1.67%
31-YTD-97 14,395.52 3.05% 3.05%
30-Jun-97 1 13,782.37 7.63% 7.63%
30-Jun-95 3 12,497.81 18.69% 5.88%
30-Jun-93 5 11,576.61 28.14% 5.08%
30-Jun-88 10 0
1-INCEPT. 10,000.00 48.34% 6.09%
INCEPTION FACTOR: 6.6685 6.6685
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN SHORT INTERMEDIATE BOND FUND CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 383,973,617
<INVESTMENTS-AT-VALUE> 385,984,491
<RECEIVABLES> 5,785,208
<ASSETS-OTHER> 57,441
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 391,827,140
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,812,073
<TOTAL-LIABILITIES> 2,812,073
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17,351,799
<SHARES-COMMON-STOCK> 1,702,320
<SHARES-COMMON-PRIOR> 1,800,182
<ACCUMULATED-NII-CURRENT> 94,569
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (833,624)
<ACCUM-APPREC-OR-DEPREC> 235,350
<NET-ASSETS> 16,848,094
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,136,124
<OTHER-INCOME> 0
<EXPENSES-NET> (130,797)
<NET-INVESTMENT-INCOME> 1,005,327
<REALIZED-GAINS-CURRENT> (47,772)
<APPREC-INCREASE-CURRENT> 164,602
<NET-CHANGE-FROM-OPS> 1,122,157
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,003,205)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 500,922
<NUMBER-OF-SHARES-REDEEMED> (674,862)
<SHARES-REINVESTED> 76,079
<NET-CHANGE-IN-ASSETS> (854,940)
<ACCUMULATED-NII-PRIOR> 102,728
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (796,135)
<GROSS-ADVISORY-FEES> (81,853)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (130,797)
<AVERAGE-NET-ASSETS> 16,363,011
<PER-SHARE-NAV-BEGIN> 9.83
<PER-SHARE-NII> 0.61
<PER-SHARE-GAIN-APPREC> 0.07
<PER-SHARE-DIVIDEND> (0.61)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.90
<EXPENSE-RATIO> 0.80
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN SHORT INTERMEDIATE BOND FUND CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 383,973,617
<INVESTMENTS-AT-VALUE> 385,984,491
<RECEIVABLES> 5,785,208
<ASSETS-OTHER> 57,441
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 391,827,140
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,812,073
<TOTAL-LIABILITIES> 2,812,073
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 23,525,831
<SHARES-COMMON-STOCK> 2,287,879
<SHARES-COMMON-PRIOR> 2,257,458
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (8,108)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (883,952)
<ACCUM-APPREC-OR-DEPREC> 55,455
<NET-ASSETS> 22,689,226
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,473,683
<OTHER-INCOME> 0
<EXPENSES-NET> (361,457)
<NET-INVESTMENT-INCOME> 1,112,226
<REALIZED-GAINS-CURRENT> (61,550)
<APPREC-INCREASE-CURRENT> 216,168
<NET-CHANGE-FROM-OPS> 1,266,844
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,108,182)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,023,010
<NUMBER-OF-SHARES-REDEEMED> (1,071,136)
<SHARES-REINVESTED> 78,547
<NET-CHANGE-IN-ASSETS> 452,036
<ACCUMULATED-NII-PRIOR> 1,214
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (835,768)
<GROSS-ADVISORY-FEES> (106,167)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (361,457)
<AVERAGE-NET-ASSETS> 21,270,076
<PER-SHARE-NAV-BEGIN> 9.85
<PER-SHARE-NII> 0.52
<PER-SHARE-GAIN-APPREC> 0.07
<PER-SHARE-DIVIDEND> (0.52)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.92
<EXPENSE-RATIO> 1.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN SHORT INTERMEDIATE BOND FUND CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 383,973,617
<INVESTMENTS-AT-VALUE> 385,984,491
<RECEIVABLES> 5,785,208
<ASSETS-OTHER> 57,441
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 391,827,140
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,812,073
<TOTAL-LIABILITIES> 2,812,073
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,146,949
<SHARES-COMMON-STOCK> 115,273
<SHARES-COMMON-PRIOR> 104,492
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (1,770)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (29,108)
<ACCUM-APPREC-OR-DEPREC> 27,220
<NET-ASSETS> 1,143,291
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 70,299
<OTHER-INCOME> 0
<EXPENSES-NET> (17,221)
<NET-INVESTMENT-INCOME> 53,078
<REALIZED-GAINS-CURRENT> (2,947)
<APPREC-INCREASE-CURRENT> 8,967
<NET-CHANGE-FROM-OPS> 59,098
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (53,200)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 64,686
<NUMBER-OF-SHARES-REDEEMED> (58,395)
<SHARES-REINVESTED> 4,490
<NET-CHANGE-IN-ASSETS> 113,875
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (1,013)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (29,743)
<GROSS-ADVISORY-FEES> (5,062)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (17,221)
<AVERAGE-NET-ASSETS> 1,011,031
<PER-SHARE-NAV-BEGIN> 9.85
<PER-SHARE-NII> 0.52
<PER-SHARE-GAIN-APPREC> 0.07
<PER-SHARE-DIVIDEND> (0.52)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.92
<EXPENSE-RATIO> 1.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN SHORT INTERMEDIATE BOND FUND CLASS Y
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 383,973,617
<INVESTMENTS-AT-VALUE> 385,984,491
<RECEIVABLES> 5,785,208
<ASSETS-OTHER> 57,441
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 391,827,140
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,812,073
<TOTAL-LIABILITIES> 2,812,073
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 362,120,034
<SHARES-COMMON-STOCK> 35,195,495
<SHARES-COMMON-PRIOR> 36,392,215
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (283,797)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (15,194,630)
<ACCUM-APPREC-OR-DEPREC> 1,692,849
<NET-ASSETS> 348,334,456
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 24,765,552
<OTHER-INCOME> 0
<EXPENSES-NET> (2,489,342)
<NET-INVESTMENT-INCOME> 22,276,210
<REALIZED-GAINS-CURRENT> (1,077,688)
<APPREC-INCREASE-CURRENT> 3,468,690
<NET-CHANGE-FROM-OPS> 24,667,212
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (22,216,773)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 12,608,737
<NUMBER-OF-SHARES-REDEEMED> (14,971,442)
<SHARES-REINVESTED> 1,165,985
<NET-CHANGE-IN-ASSETS> (9,371,556)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (119,162)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (14,341,041)
<GROSS-ADVISORY-FEES> (1,783,283)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2,489,342)
<AVERAGE-NET-ASSETS> 356,629,008
<PER-SHARE-NAV-BEGIN> 9.83
<PER-SHARE-NII> 0.62
<PER-SHARE-GAIN-APPREC> 0.07
<PER-SHARE-DIVIDEND> (0.62)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.90
<EXPENSE-RATIO> 0.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN INTERMEDIATE TERM BOND FUND CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUN-30-97
<PERIOD-END> JUN-30-98
<INVESTMENTS-AT-COST> 200,306,590
<INVESTMENTS-AT-VALUE> 203,797,260
<RECEIVABLES> 4,480,092
<ASSETS-OTHER> 186,467
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 208,463,819
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,818,469
<TOTAL-LIABILITIES> 4,818,469
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 127,130,016
<SHARES-COMMON-STOCK> 13,624,306
<SHARES-COMMON-PRIOR> 1,157,517
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (105,523)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (5,913,506)
<ACCUM-APPREC-OR-DEPREC> 2,611,653
<NET-ASSETS> 123,722,640
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,415,742
<OTHER-INCOME> 0
<EXPENSES-NET> (531,892)
<NET-INVESTMENT-INCOME> 2,883,850
<REALIZED-GAINS-CURRENT> 220,319
<APPREC-INCREASE-CURRENT> 195,351
<NET-CHANGE-FROM-OPS> 3,299,520
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,960,648)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,161,368
<NUMBER-OF-SHARES-REDEEMED> (1,958,558)
<SHARES-REINVESTED> 263,979
<NET-CHANGE-IN-ASSETS> 113,578,418
<ACCUMULATED-NII-PRIOR> 125,200
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (2,110,581)
<GROSS-ADVISORY-FEES> (299,357)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (531,891)
<AVERAGE-NET-ASSETS> 48,101,787
<PER-SHARE-NAV-BEGIN> 8.93
<PER-SHARE-NII> 0.57
<PER-SHARE-GAIN-APPREC> 0.20
<PER-SHARE-DIVIDEND> (0.61)
<PER-SHARE-DISTRIBUTIONS> (0.01)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.08
<EXPENSE-RATIO> 1.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN INTERMEDIATE TERM BOND FUND CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUN-30-97
<PERIOD-END> JUN-30-98
<INVESTMENTS-AT-COST> 200,306,590
<INVESTMENTS-AT-VALUE> 203,797,260
<RECEIVABLES> 4,480,092
<ASSETS-OTHER> 186,467
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 208,463,819
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,818,469
<TOTAL-LIABILITIES> 4,818,469
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,663,537
<SHARES-COMMON-STOCK> 1,183,619
<SHARES-COMMON-PRIOR> 1,270,826
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (35,036)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (2,022,159)
<ACCUM-APPREC-OR-DEPREC> 156,990
<NET-ASSETS> 10,763,332
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 776,522
<OTHER-INCOME> 0
<EXPENSES-NET> (201,715)
<NET-INVESTMENT-INCOME> 574,807
<REALIZED-GAINS-CURRENT> (5,793)
<APPREC-INCREASE-CURRENT> 44,199
<NET-CHANGE-FROM-OPS> 613,213
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (654,821)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 280,163
<NUMBER-OF-SHARES-REDEEMED> (403,520)
<SHARES-REINVESTED> 36,150
<NET-CHANGE-IN-ASSETS> (831,083)
<ACCUMULATED-NII-PRIOR> 79,837
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (1,106,086)
<GROSS-ADVISORY-FEES> (68,809)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (201,715)
<AVERAGE-NET-ASSETS> 10,883,268
<PER-SHARE-NAV-BEGIN> 8.95
<PER-SHARE-NII> 0.48
<PER-SHARE-GAIN-APPREC> 0.21
<PER-SHARE-DIVIDEND> (0.54)
<PER-SHARE-DISTRIBUTIONS> (0.01)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.09
<EXPENSE-RATIO> 1.86
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN INTERMEDIATE TERM BOND FUND CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUN-30-97
<PERIOD-END> JUN-30-98
<INVESTMENTS-AT-COST> 200,306,590
<INVESTMENTS-AT-VALUE> 203,797,260
<RECEIVABLES> 4,480,092
<ASSETS-OTHER> 186,467
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 208,463,819
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,818,469
<TOTAL-LIABILITIES> 4,818,469
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 68,421,865
<SHARES-COMMON-STOCK> 7,017,260
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (198,606)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (5,310,914)
<ACCUM-APPREC-OR-DEPREC> 808,435
<NET-ASSETS> 63,720,780
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,877,101
<OTHER-INCOME> 0
<EXPENSES-NET> (225,005)
<NET-INVESTMENT-INCOME> 1,652,096
<REALIZED-GAINS-CURRENT> (118,558)
<APPREC-INCREASE-CURRENT> 252,117
<NET-CHANGE-FROM-OPS> 1,785,655
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,652,096)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,138,147
<NUMBER-OF-SHARES-REDEEMED> (1,165,196)
<SHARES-REINVESTED> 44,309
<NET-CHANGE-IN-ASSETS> 63,894,483
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (164,393)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (225,006)
<AVERAGE-NET-ASSETS> 62,079,643
<PER-SHARE-NAV-BEGIN> 9.09
<PER-SHARE-NII> 0.24
<PER-SHARE-GAIN-APPREC> (0.01)
<PER-SHARE-DIVIDEND> (0.24)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.08
<EXPENSE-RATIO> 0.86
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 104
<NAME> EVERGREEN INTERMEDIATE TERM BOND FUND CLASS Y
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUN-30-97
<PERIOD-END> JUN-30-98
<INVESTMENTS-AT-COST> 200,306,590
<INVESTMENTS-AT-VALUE> 203,797,260
<RECEIVABLES> 4,480,092
<ASSETS-OTHER> 186,467
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 208,463,819
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,818,469
<TOTAL-LIABILITIES> 4,818,469
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,874,693
<SHARES-COMMON-STOCK> 598,217
<SHARES-COMMON-PRIOR> 811,659
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (42,205)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (1,394,359)
<ACCUM-APPREC-OR-DEPREC> 469
<NET-ASSETS> 5,438,598
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 474,856
<OTHER-INCOME> 0
<EXPENSES-NET> (123,473)
<NET-INVESTMENT-INCOME> 351,383
<REALIZED-GAINS-CURRENT> (2,546)
<APPREC-INCREASE-CURRENT> 27,117
<NET-CHANGE-FROM-OPS> 375,954
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (410,056)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 248,773
<NUMBER-OF-SHARES-REDEEMED> (492,378)
<SHARES-REINVESTED> 30,163
<NET-CHANGE-IN-ASSETS> (1,964,052)
<ACCUMULATED-NII-PRIOR> 37,751
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (833,349)
<GROSS-ADVISORY-FEES> (42,156)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (123,473)
<AVERAGE-NET-ASSETS> 6,676,975
<PER-SHARE-NAV-BEGIN> 8.94
<PER-SHARE-NII> 0.49
<PER-SHARE-GAIN-APPREC> 0.21
<PER-SHARE-DIVIDEND> (0.54)
<PER-SHARE-DISTRIBUTIONS> (0.01)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.09
<EXPENSE-RATIO> 1.86
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN CAPITAL PRESERVATION & INCOME FUND CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 47,318,629
<INVESTMENTS-AT-VALUE> 47,385,859
<RECEIVABLES> 821,366
<ASSETS-OTHER> 26,252
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 48,233,477
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 183,284
<TOTAL-LIABILITIES> 183,284
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 18,152,013
<SHARES-COMMON-STOCK> 1,851,308
<SHARES-COMMON-PRIOR> 1,607,197
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 52,719
<ACCUMULATED-NET-GAINS> (429,592)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 247,096
<NET-ASSETS> 18,022,236
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,020,854
<OTHER-INCOME> 0
<EXPENSES-NET> (133,314)
<NET-INVESTMENT-INCOME> 887,540
<REALIZED-GAINS-CURRENT> 49,334
<APPREC-INCREASE-CURRENT> (150,279)
<NET-CHANGE-FROM-OPS> 786,595
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (887,540)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,684,678
<NUMBER-OF-SHARES-REDEEMED> (1,502,907)
<SHARES-REINVESTED> 62,340
<NET-CHANGE-IN-ASSETS> 2,276,447
<ACCUMULATED-NII-PRIOR> 48,209
<ACCUMULATED-GAINS-PRIOR> (494,911)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (96,817)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (199,021)
<AVERAGE-NET-ASSETS> 15,372,550
<PER-SHARE-NAV-BEGIN> 9.80
<PER-SHARE-NII> 0.57
<PER-SHARE-GAIN-APPREC> (0.07)
<PER-SHARE-DIVIDEND> (0.56)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> (0.01)
<PER-SHARE-NAV-END> 9.73
<EXPENSE-RATIO> 0.87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN CAPITAL PRESERVATION & INCOME FUND CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 47,318,629
<INVESTMENTS-AT-VALUE> 47,385,859
<RECEIVABLES> 821,366
<ASSETS-OTHER> 26,252
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 48,233,477
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 183,284
<TOTAL-LIABILITIES> 183,284
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 32,635,730
<SHARES-COMMON-STOCK> 2,674,041
<SHARES-COMMON-PRIOR> 3,360,676
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (115,396)
<ACCUMULATED-NET-GAINS> (6,308,092)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (156,221)
<NET-ASSETS> 26,056,021
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,954,880
<OTHER-INCOME> 0
<EXPENSES-NET> (480,554)
<NET-INVESTMENT-INCOME> 1,474,326
<REALIZED-GAINS-CURRENT> 99,064
<APPREC-INCREASE-CURRENT> (284,444)
<NET-CHANGE-FROM-OPS> 1,288,946
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,474,326)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 212,637
<NUMBER-OF-SHARES-REDEEMED> (998,736)
<SHARES-REINVESTED> 99,464
<NET-CHANGE-IN-ASSETS> (6,914,003)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (6,437,413)
<OVERDISTRIB-NII-PRIOR> (123,929)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (184,821)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (610,156)
<AVERAGE-NET-ASSETS> 29,096,623
<PER-SHARE-NAV-BEGIN> 9.81
<PER-SHARE-NII> 0.49
<PER-SHARE-GAIN-APPREC> (0.07)
<PER-SHARE-DIVIDEND> (0.48)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> (0.01)
<PER-SHARE-NAV-END> 9.74
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN CAPITAL PRESERVATION & INCOME FUND CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 47,318,629
<INVESTMENTS-AT-VALUE> 47,385,859
<RECEIVABLES> 821,366
<ASSETS-OTHER> 26,252
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 48,233,477
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 183,284
<TOTAL-LIABILITIES> 183,284
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,060,301
<SHARES-COMMON-STOCK> 407,970
<SHARES-COMMON-PRIOR> 418,845
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (18,892)
<ACCUMULATED-NET-GAINS> (45,828)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (23,645)
<NET-ASSETS> 3,971,936
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 274,724
<OTHER-INCOME> 0
<EXPENSES-NET> (67,666)
<NET-INVESTMENT-INCOME> 207,058
<REALIZED-GAINS-CURRENT> 13,937
<APPREC-INCREASE-CURRENT> (40,055)
<NET-CHANGE-FROM-OPS> 180,940
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (207,058)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 89,775
<NUMBER-OF-SHARES-REDEEMED> (118,346)
<SHARES-REINVESTED> 17,696
<NET-CHANGE-IN-ASSETS> (131,938)
<ACCUMULATED-NII-PRIOR> (20,093)
<ACCUMULATED-GAINS-PRIOR> (64,026)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (26,016)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (85,655)
<AVERAGE-NET-ASSETS> 4,097,341
<PER-SHARE-NAV-BEGIN> 9.80
<PER-SHARE-NII> 0.49
<PER-SHARE-GAIN-APPREC> (0.06)
<PER-SHARE-DIVIDEND> (0.48)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> (0.01)
<PER-SHARE-NAV-END> 9.74
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> EVERGREEN INTERMEDIATE GOVERNMENT SECURITIES FUND CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 176,856,143
<INVESTMENTS-AT-VALUE> 180,443,312
<RECEIVABLES> 2,119,885
<ASSETS-OTHER> 16,441
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 182,579,638
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 638,392
<TOTAL-LIABILITIES> 638,392
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 85,000,867
<SHARES-COMMON-STOCK> 7,939,396
<SHARES-COMMON-PRIOR> 57,029
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (12,309)
<ACCUMULATED-NET-GAINS> (4,657,281)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 702,593
<NET-ASSETS> 81,033,870
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,790,744
<OTHER-INCOME> 0
<EXPENSES-NET> (239,011)
<NET-INVESTMENT-INCOME> 1,551,733
<REALIZED-GAINS-CURRENT> (604)
<APPREC-INCREASE-CURRENT> 121,657
<NET-CHANGE-FROM-OPS> 1,672,786
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,551,596)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,087,669
<NUMBER-OF-SHARES-REDEEMED> (1,323,352)
<SHARES-REINVESTED> 118,050
<NET-CHANGE-IN-ASSETS> 80,457,617
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (172,649)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (293,894)
<AVERAGE-NET-ASSETS> 28,764,219
<PER-SHARE-NAV-BEGIN> 10.02
<PER-SHARE-NII> 0.55
<PER-SHARE-GAIN-APPREC> 0.19
<PER-SHARE-DIVIDEND> (0.55)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.21
<EXPENSE-RATIO> 0.83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> EVERGREEN INTERMEDIATE GOVERNMENT SECURITIES FUND CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 176,856,143
<INVESTMENTS-AT-VALUE> 180,443,312
<RECEIVABLES> 2,119,885
<ASSETS-OTHER> 16,441
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 182,579,638
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 638,392
<TOTAL-LIABILITIES> 638,392
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,167,587
<SHARES-COMMON-STOCK> 103,086
<SHARES-COMMON-PRIOR> 74,011
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (939)
<ACCUMULATED-NET-GAINS> (125,957)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11,469
<NET-ASSETS> 1,052,160
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 49,954
<OTHER-INCOME> 0
<EXPENSES-NET> (14,393)
<NET-INVESTMENT-INCOME> 35,561
<REALIZED-GAINS-CURRENT> 2,928
<APPREC-INCREASE-CURRENT> 6,667
<NET-CHANGE-FROM-OPS> 45,156
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (35,699)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 79,762
<NUMBER-OF-SHARES-REDEEMED> (53,064)
<SHARES-REINVESTED> 2,377
<NET-CHANGE-IN-ASSETS> 307,022
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (4,751)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (14,399)
<AVERAGE-NET-ASSETS> 791,808
<PER-SHARE-NAV-BEGIN> 10.02
<PER-SHARE-NII> 0.46
<PER-SHARE-GAIN-APPREC> 0.19
<PER-SHARE-DIVIDEND> (0.46)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.21
<EXPENSE-RATIO> 1.82
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN INTERMEDIATE GOVERNMENT SECURITIES FUND CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 176,856,143
<INVESTMENTS-AT-VALUE> 180,443,312
<RECEIVABLES> 2,119,885
<ASSETS-OTHER> 16,441
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 182,579,638
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 638,392
<TOTAL-LIABILITIES> 638,392
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 143,689
<SHARES-COMMON-STOCK> 12,394
<SHARES-COMMON-PRIOR> 1,207
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (93)
<ACCUMULATED-NET-GAINS> (17,624)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 527
<NET-ASSETS> 126,499
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7,202
<OTHER-INCOME> 0
<EXPENSES-NET> (2,071)
<NET-INVESTMENT-INCOME> 5,131
<REALIZED-GAINS-CURRENT> 419
<APPREC-INCREASE-CURRENT> 433
<NET-CHANGE-FROM-OPS> 5,983
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,115)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,721
<NUMBER-OF-SHARES-REDEEMED> (30)
<SHARES-REINVESTED> 496
<NET-CHANGE-IN-ASSETS> 114,421
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (684)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2,072)
<AVERAGE-NET-ASSETS> 113,063
<PER-SHARE-NAV-BEGIN> 10.02
<PER-SHARE-NII> 0.45
<PER-SHARE-GAIN-APPREC> 0.20
<PER-SHARE-DIVIDEND> (0.46)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.21
<EXPENSE-RATIO> 1.83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> EVERGREEN INTERMEDIATE GOVERNMENT SECURITIES FUND CLASS Y
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 176,856,143
<INVESTMENTS-AT-VALUE> 180,443,312
<RECEIVABLES> 2,119,885
<ASSETS-OTHER> 16,441
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 182,579,638
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 638,392
<TOTAL-LIABILITIES> 638,392
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 112,036,049
<SHARES-COMMON-STOCK> 9,771,069
<SHARES-COMMON-PRIOR> 7,142,890
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (28,381)
<ACCUMULATED-NET-GAINS> (15,151,531)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,872,580
<NET-ASSETS> 99,728,717
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5,157,422
<OTHER-INCOME> 0
<EXPENSES-NET> (669,547)
<NET-INVESTMENT-INCOME> 4,487,875
<REALIZED-GAINS-CURRENT> 260,667
<APPREC-INCREASE-CURRENT> 1,091,911
<NET-CHANGE-FROM-OPS> 5,840,453
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (4,476,803)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,816,899
<NUMBER-OF-SHARES-REDEEMED> (3,469,534)
<SHARES-REINVESTED> 280,814
<NET-CHANGE-IN-ASSETS> 28,148,976
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (490,855)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (670,220)
<AVERAGE-NET-ASSETS> 82,029,671
<PER-SHARE-NAV-BEGIN> 10.02
<PER-SHARE-NII> 0.56
<PER-SHARE-GAIN-APPREC> 0.19
<PER-SHARE-DIVIDEND> (0.56)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.21
<EXPENSE-RATIO> 0.82
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
