<PAGE> 1
FINANCIAL SERVICES INTERNATIONAL
NORTH AMERICA
ING MUTUAL FUNDS
ANNUAL REPORT / OCTOBER 31, 1999
[LOGO ING FUNDS]
<PAGE> 2
ING MUTUAL FUNDS ANNUAL REPORT
Data as of October 31, 1999
STOCK FUNDS
<TABLE>
<CAPTION>
Cumulative Total Return (1)
Without Sales Charge
------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS X CLASS I(13)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ING Internet Fund (2) 26.70% 26.30% 26.30% 26.30% N/A
ING Small Cap Growth Fund (3),(15) 13.20 12.60 12.60 0.27 N/A
ING Focus Fund (4) 25.40 24.80 24.70 14.84 N/A
ING Mid Cap Growth Fund (7),(16) 3.90 3.30 3.30 - 1.90 1.27%
ING Large Cap Growth Fund (3),(17) 18.00 17.50 17.40 8.41 6.21
ING Tax Efficient Equity Fund (3) 19.90 19.60 19.20 7.67 N/A
ING Growth & Income Fund (4) 14.34 13.79 13.81 6.51 N/A
</TABLE>
<TABLE>
<CAPTION>
Cumulative Total Return (1)
With Sales Charge
-----------------------------------------------------------------------------
CLASS A (10) CLASS B (11) CLASS C (11) CLASS X (11),(12) CLASS I (13)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ING Internet Fund (2) 19.42% 21.30% 25.30% 21.30% N/A
ING Small Cap Growth Fund (3),(15) 6.69 7.60 11.60 - 4.73 N/A
ING Focus Fund (4) 18.19 19.80 23.70 9.84 N/A
ING Mid Cap Growth Fund (7),(16) - 2.07 - 1.70 2.30 - 6.80 1.27%
ING Large Cap Growth Fund (3),(17) 11.22 12.50 16.40 3.41 6.21
ING Tax Efficient Equity Fund (3) 13.01 14.60 18.20 2.67 N/A
ING Growth & Income Fund (4) 7.77 8.79 12.81 1.51 N/A
</TABLE>
GLOBAL/INTERNATIONAL FUNDS
<TABLE>
<CAPTION>
Cumulative Total Return (1)
Without Sales Charge
-----------------------------------------------------------
CLASS A CLASS B CLASS C CLASS X CLASS I(13)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BOND FUNDS ING
International Bond Fund (3),(16) -10.16% -10.71% - 10.60% - 9.64% - 1.35%
STOCK FUNDS
ING Global Information Technology Fund (3) 73.80 72.80 72.80 39.21 N/A
ING European Equity Fund (6) 9.50 8.90 8.90 3.42 N/A
ING International Equity Fund (9),(17) 18.20 17.60 17.60 14.84 4.69
ING Global Brand Names Fund (5), (16) 15.70 15.00 15.10 7.06 2.12
</TABLE>
<TABLE>
<CAPTION>
Cumulative Total Return (1)
With Sales Charge
----------------------------------------------------------------------
CLASS A(10) CLASS B(11) CLASS C(11) CLASS X(11),(12) CLASS I(13)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BOND FUNDS ING
International Bond Fund (3),(16) - 14.44% - 15.10% - 11.48% - 14.09% - 1.35%
STOCK FUNDS
ING Global Information Technology Fund (3) 63.81 67.80 71.80 34.21 N/A
ING European Equity Fund (6) 3.20 3.90 7.90 - 1.58 N/A
ING International Equity Fund (9),(17) 11.40 12.60 16.60 9.84 4.69
ING Global Brand Names Fund (5), (16) 9.05 10.00 14.10 2.06 2.12
</TABLE>
BOND FUNDS
<TABLE>
<CAPTION>
Cumulative Total Return(1)
Without Sales Charge
CLASS A CLASS B CLASS C CLASS X CLASS I(13)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ING High Yield Bond Fund (3) 6.37% 5.57% 5.67% 4.99% N/A
ING Intermediate Bond Fund (3) - 1.46 - 2.13 - 2.10 - 1.07 N/A
</TABLE>
<TABLE>
<CAPTION>
Cumulative Total Return(1)
With Sales Charge
CLASS A(10) CLASS B(11) CLASS C(11) CLASS X(11),(12) CLASS I(13)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ING High Yield Bond Fund (3) 1.31% 0.59% 4.68% 0.02% N/A
ING Intermediate Bond Fund (3) - 6.15 - 6.83 - 3.04 - 5.83 N/A
</TABLE>
MONEY MARKET FUNDS
<TABLE>
<CAPTION>
7-Day Yield
-------------------------------------------------------
CLASS A CLASS B CLASS C CLASS X CLASS I(13)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ING Money Market Fund (8), (14),(18) 4.85% 4.21% 4.21% 4.21% 5.31%
</TABLE>
<TABLE>
<CAPTION>
30-Day Yield
-----------------------------------------------------
CLASS A CLASS B CLASS C CLASS X CLASS I(13)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ING Money Market Fund (8), (14),(18) 4.81% 4.16% 4.17% 4.17% N/A
</TABLE>
[LOGO ING FUNDS]
SHARES OF ING FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, ARE NOT
GUARANTEED BY ANY BANK, ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY, AND
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT
INVESTED.
Past performance are historical and cannot guarantee future results. Fund
returns include change in share value and reinvestment of distributions. Because
of ongoing market volatility, the Funds' performance may be subject to
substantial short-term changes.
(1). Cumulative total return (not annualized) since inception. (2). Inception
date (all share classes) is 7/1/99. Inception date for Class A, B and C shares
of all funds (except INGInternet Fund) is 12/15/98. Inception dates for Class X
shares are as noted in the following notes: (3). Inception date is 1/11/99. (4).
Inception date is 1/12/99. (5). Inception date is 1/14/99. (6). Inception date
is 1/15/99. (7). Inception date is 1/19/99. (8). Inception date is 1/20/99. (9).
Inception date is 2/16/99. (10). Class A shares are subject to the current
maximum initial sales charge of 5.75% (stock funds) and 4.75% (bond funds).
(11). The amounts shown assume redemption of Fund shares at the end of each
period indicated. Class B, Class C and Class X shares are subject to a maximum
contingent deferred sales charge of 5%, 1% and 5%, respectively. (12). Class X
shares are offered to qualified investors (including, but not limited to, IRAs,
Roth IRAs, Education IRAs, SEP IRAs, Simple IRAs and 403(b)(7) plans). Investors
purchasing Class X shares will receive bonus shares having a value equal to 2%
of the amount invested. Bonus shares are paid by the Fund's Distributor. Shares
purchased by the reinvestment of dividends or capital gains distributions are
not eligible for bonus shares. Total return for Class X shares does not include
the 2% bonus shares paid by the distributor. (13). Class I shares are offered
only to retirement plans affiliated with ING Group. Shares are sold without an
initial sales charge and are not subject to any Rule 12b-1 fee, shareholder
services fees or account servicing fees. (14). Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund. (15). Prior to 10/31/99, the Fund had a
different Investment Adviser. Inception dates for Class I shares are as follows:
(16). Inception date is 7/29/99. (17). Inception date is 9/27/99. (18).
Inception date is 10/13/99.
ING Funds are distributed by ING Funds Distributor, Inc.
1475 Dunwoody Drive, West Chester, PA 19380-1478
MEMBER NASD
<PAGE> 3
A LETTER FROM THE PRESIDENT
[PHOTO JOHN J. PILEGGI]
President & CEO
ING Funds
DEAR FELLOW SHAREHOLDER,
We are pleased to present the first ING Funds Annual Report to our shareholders.
It has been an exciting and rewarding first year for all of us and we appreciate
your confidence. Rest assured that we will always work with you in mind. This
report begins with an overview of the financial markets, followed by detailed
information about your fund investment.
STOCKS CONTINUE UPWARD Over the last year, stock markets around the world have
generally posted solid results. During the first 10 months of 1999, the S&P 500
Index has risen 12.03%. And the MSCI Index of international stocks generated a
12.85% return. In the U.S. and abroad, these returns were the result of
continued strong economic growth.
Domestically, as the year began, there was speculation that our lengthy
economic expansion was in jeopardy. The biggest threat was a continued rise in
interest rates and the prospect of slower earnings from U.S. companies. But
after fourth quarter earnings data was reported, and overall GDP was above
expectations, growth was once again the norm. In the U.S. stock market, much of
the year has been marked by a very narrow rally -- one in which the majority of
gains have been registered by a relatively small group of larger-cap growth and
technology stocks. This trend has masked the less impressive returns of many
smaller-cap and value oriented issues.
Overseas, most international markets have performed well this year. A
surprisingly fast rebound in Asia has continued to unfold after last year's
disruptions. In Japan, the market has generated very strong returns, due to
unexpected gains in the country's domestic economy and meaningful economic
reforms. However, returns in much of Europe have been disappointing, with
lackluster economic growth muting performance.
"Over the last year, stock markets around the world have generally posted
solid results."
A DIFFICULT BOND MARKET During the last year we have seen the interest rate
environment come full circle. As the year began, the Federal Reserve Board (the
Fed) was easing credit, as it focused on the weak global economy and few signs
of domestic inflation. Since that time, sentiment has dramatically changed.
First, the Fed took a neutral stance for several months, as benign inflation
overshadowed higher than expected growth rates. However, with rising commodity
prices, wage pressures and few signs of growth abating, the Fed has raised
interest rates three times in the last five months. These rising rates have
caused most sectors of the bond market to be relatively flat, or negative, thus
far in 1999. One bright spot, however, has been the high yield market, which
continues to produce positive returns despite the problems in other bond market
sectors.
LOOKING AHEAD We are cautiously optimistic as we look toward the new millennium.
There are a number of positives, such as the strong economy, healthy corporate
profits and technology-driven productivity gains. The stock market has also
gained considerable momentum since the end of October. However, uncertainties
surrounding inflation, interest rates and Y2K could upset the markets.
Therefore, we would encourage investors to have a long-term outlook, to maintain
a broadly diversified portfolio, and to work closely with their financial
advisor.
In summary, it has been an eventful year at ING Funds. We have broadened our
investment line-up with the addition of the ING Internet Fund and ING National
Tax-Exempt Bond Fund. In addition, we have expanded the services we provide to
shareholders -- including many enhancements to our Web site, www.ingfunds.com,
and 24-hour automated telephone system, 1-877-463-6464. Additional information
on these services can be found on page 72 of this report. I would like to thank
you for your investment with ING, and we look forward to serving your needs in
the years to come. Thank you for your confidence in us. We work to earn it each
day.
Sincerely,
/s/ John J. Pileggi
- ------------------------------
John J. Pileggi
President & CEO
November 23, 1999
ING Funds Annual Report / October 31, 1999 1
<PAGE> 4
TABLE OF CONTENTS
FUND INFORMATION AT YOUR FINGERTIPS
WE ARE PLEASED TO PROVIDE THIS DETAILED REVIEW OF THE ING FUNDS FOR THE PERIOD
THAT ENDED OCTOBER 31, 1999. TO HELP ANALYZE YOUR FUND WE HAVE BROKEN DOWN THE
REPORT INTO A NUMBER OF EASY-TO-FOLLOW SECTIONS. LISTED BELOW IS A TABLE OF
CONTENTS AND DESCRIPTION OF EACH SECTION.
Pages 3 - 17 FUND SUMMARIES
A summary of the Fund's performance record and portfolio composition, and an
interview with the Fund's portfolio manager or managers.
Pages 20 - 42 SCHEDULES OF INVESTMENTS
A complete listing of the securities in the Fund's portfolio as of October 31,
1999. This section also includes the number of shares or principal amount, and
market value as of the end of the reporting period.
<TABLE>
<CAPTION>
SCHEDULE OF
FUND NAME FUND SUMMARY INVESTMENTS
<S> <C> <C>
ING Internet Fund Page 3 Page 20
ING Small Cap Growth Fund Page 4 Page 21
ING Focus Fund Page 5 Page 23
ING Mid Cap Growth Fund Page 6 Page 24
ING Large Cap Growth Fund Page 7 Page 26
ING Tax Efficient Equity Fund Page 8 Page 27
ING Growth &Income Fund Page 9 Page 29
ING International Bond Fund Page 10 Page 31
ING Global Information Technology Fund Page 11 Page 32
ING European Equity Fund Page 12 Page 33
ING International Equity Fund Page 13 Page 35
ING Global Brand Names Fund Page 14 Page 36
ING High Yield Bond Fund Page 15 Page 37
ING Intermediate Bond Fund Page 16 Page 39
ING Money Market Fund Page 17 Page 40
</TABLE>
Pages 44 - 51 FINANCIAL HIGHLIGHTS
A description of the factors that affected a Fund's net asset value (NAV) during
the reporting period. In addition to providing total returns, this section
reports asset sizes, distributions, expense ratios and portfolio turnover rates
(when applicable).
Pages 52 - 53 STATEMENTS OF ASSETS & LIABILITIES
A complete "balance sheet" as of the end of the reporting period. It includes
the Fund's NAV, which is calculated by dividing its net assets (assets minus
liabilities) by its number of shares outstanding.
Pages 54 - 55 STATEMENTS OF OPERATIONS
A listing of a Fund's investment income, expenses and gains or losses on
securities, as well as appreciation or depreciation from portfolio holdings.
Pages 56 - 57 STATEMENTS OF CHANGES IN NET ASSETS
A reporting of the increase or decrease in a Fund's net assets during the
reporting period. Changes in net assets could occur for a variety of reasons,
including investment operations, dividends, distributions or capital share
transactions.
Pages 58 - 68 NOTES TO FINANCIAL STATEMENTS
A description of the significant accounting policies of the Fund, and more
detailed information about the schedules and tables that appear in the report.
Page 72 ING FUNDS SERVICES
A description of convenient services available to Fund shareholders.
Inside Back Cover FUND FAMILY OVERVIEW
A brief summary of the ING Funds, including objectives and primary portfolios.
2 ING Funds Annual Report / October 31, 1999
<PAGE> 5
Data as of 10/31/99
ING INTERNET FUND
For investors seeking long-term capital appreciation from a non-diversified
equity portfolio
GROWTH OF A $10,000 INVESTMENT
ING Internet Fund vs. @Net Index (IIX): 7/1/99 - 10/31/99
[INTERNET LINE GRAPH]
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares @Net Index (IIX)
<S> <C> <C> <C>
9,425 10,000 10,000 10,000
8,115 8,600 8,600 8,899
9,020 9,550 9,560 9,488
10,132 10,720 10,730 10,333
11,942 12,130 12,530 11,387
</TABLE>
Hypothetical illustration of $10,000 invested in the Fund on 7/1/99 includes the
current maximum initial sales charge of 5.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSC of 5% and 1%,
respectively. The @Net Index (IIX) is unmanaged with no sales charges or
expenses.
CUMULATIVE TOTAL RETURN (2)
Since inception
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Class X shares
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Without Sales Charge 26.70% 26.30% 26.30% 26.30%
With Sales Charge 19.42 21.30 25.30 21.30
</TABLE>
Inception date for the Fund is 7/1/99.
1. Holdings are subject to change and are dollar-weighted based on invested
assets.
2. Past performance is historical and is no guarantee of future results. Total
returns are cumulative, not annualized, and include change in share value and
reinvestment of distributions.
PLEASE SEE PAGES 18 AND 19 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND
RISK CONSIDERATIONS.
TOP TEN HOLDINGS (1)
BroadVision, Inc. 5.7%
DoubleClick, Inc. 4.6
Yahoo! Inc. 4.2
America Online, Inc. 4.1
Cisco Sytems, Inc. 4.1
VeriSign, Inc. 3.9
Liberate Technologies, Inc. 3.8
Internet Capital Group, Inc. 3.5
CMGIInc. 3.4
Broadcom Corp. 3.3
TOP FIVE INDUSTRIES (1)
Internet Software 27.6%
Internet Content 26.3
Retail - Internet 6.9
Computer Data Security 5.5
Enterprise Software/Service 5.4
Manager's Overview
[PHOTO GUY UDING]
Portfolio Management
Team Leader
OBJECTIVE
LONG-TERM CAPITAL APPRECIATION through the investment in a non-diversified
portfolio of U.S. and non-U.S. Internet technology companies.
"The Fund has generated very strong returns, handily outperforming its
benchmark"
QUESTION: The Fund was launched on July 1, 1999. How has it performed since its
inception?
ANSWER: The Fund has generated very strong returns, handily outperforming its
benchmark, the @Net Index (IIX).
QUESTION: How would you characterize the Fund's first four months of operations?
ANSWER: As one of contrasts. In July, the Internet sector was trading downward,
although on low volumes. Starting in August, Internet stocks recovered quickly,
with strong fundamental growth in both the consumer and business sectors.
QUESTION: What has been your overriding strategy for the Fund?
ANSWER: In the business-to-business sector, companies are forced by competition
to expand their Internet presence. With this in mind, we launched the Fund with
an emphasis on themes related to business-to-business commerce. Examples include
enabling software companies, e-business solution providers and Internet hosting
and servers.
QUESTION: Can you share some examples of winning holdings for the Fund?
ANSWER: Businesses want to broaden their Internet presence, but it's no longer
enough to simply post a homepage with a few bells and whistles. Companies now
have to offer transaction capabilities to establish a real e-business. This
requires interaction with back office systems, or even with suppliers and client
systems. In our portfolio, Tibco Software is an example of a firm that provides
software to connect systems on a real time basis. Another example of a
successful theme is our exposure to companies that help build or improve the
infrastructure of the Internet itself. Inktomi, for example, delivers systems
that store content and web sites locally to speed up access. They also provide
search engine technology that helps to categorize and index the fast growing
number of web pages.
QUESTION: Were there areas that detracted from performance?
ANSWER: We were adversely affected by specific holdings that experienced system
problems. A high profile example of this was eBay, whose site was shut down for
almost a full day. We believe companies will learn from these errors, and
improve their infrastructure by investing in the right equipment.
QUESTION: What is your outlook for the Fund?
ANSWER: The Internet sector is still in its infancy. And we're convinced that we
are at the beginning stages of a long-term positive trend. While we expect
volatility to remain high, we've already seen how the Internet has penetrated
virtually every economic sector. For the time being, we anticipate that our
major focus will remain on the business-to-business sector.
SEE PAGE 20 FOR FINANCIAL DETAILS.
[LOGO ING FUNDS] ING Funds Annual Report / October 31, 1999 3
<PAGE> 6
Data as of 10/31/99
ING SMALL CAP GROWTH FUND
For aggressive investors seeking above-average long-term growth
GROWTH OF A $10,000 INVESTMENT
ING Small Cap Growth Fund vs. Russell 2500 Growth Index: 12/15/98 - 10/31/99
[SMALL CAP GROWTH LINE GRAPH]
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Russell 2500 Growth
<S> <C> <C> <C>
$ 9,425 $10,000 $10,000 $10,000
10,697 11,350 11,350 11,215
10,443 11,070 11,070 11,539
9,576 10,150 10,150 10,603
9,491 10,050 10,050 11,098
9,670 10,230 10,230 11,983
9,500 10,050 10,060 12,107
10,311 10,900 10,910 12,963
10,019 10,580 10,590 12,698
9,962 10,520 10,530 12,424
9,906 10,450 10,450 12,513
10,669 10,760 11,160 13,123
</TABLE>
Hypothetical illustration of $10,000 invested in the Fund on 12/15/98 includes
the current maximum initial sales charge of 5.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSC of 5% and 1%,
respectively. The Russell 2500 Growth Index is unmanaged with no sales charges
or expenses.
CUMULATIVE TOTAL RETURN(2)
Since inception
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Class X shares
<S> <C> <C> <C> <C>
Without Sales Charge 13.20% 12.60% 12.60% 0.27%
With Sales Charge 6.69 7.60 11.60 - 4.73
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; Class X shares is
1/11/99.
1. Holdings are subject to change and are dollar-weighted based on invested
assets.
2. Past performance is historical and is no guarantee of future results. Total
returns are cumulative, not annualized, and include change in share value and
reinvestment of distributions.
PLEASE SEE PAGES 18 AND 19 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND
RISK CONSIDERATIONS.
TOP TEN HOLDINGS (1)
Electronic Arts Inc. 3.4%
Cypress Semiconductor Corp. 2.6
Concord EFS, Inc. 2.4
VERITASSoftware Corp. 2.3
Legato Systems Inc. 2.3
Novellus Systems, Inc. 2.2
Mercury Interactive Corp. 2.2
Citrix Systems, Inc. 2.1
CDW Computer Centers Inc. 2.0
Comverse Technology Inc. 1.9
TOP FIVE INDUSTRIES (1)
Electronic Components - Semiconductor 13.6%
Medical - Biomedical 7.7
Applications Software 3.6
Entertainment Software 3.2
Commercial Services - Fin. 3.2
Manager's Overview
[PHOTO GEORGE PAOLETTI]
Portfolio Manager
OBJECTIVE
GROWTH OF CAPITAL through investment in a diversified portfolio of companies
primarily with market capitalizations of $200 million to $5 billion.
"Some of the Fund's largest contributors to performance were in the
communications equipment and Internet infrastructure sectors."
QUESTION: How has the Small Cap Growth Fund performed since its inception?
ANSWER: The Fund has underperformed its benchmark, the Russell 2500 Growth
Index. This can largely be attributed to several factors, including the ill
effects of limited diversification during the Fund's initial period of
operations, and several sector allocation decisions.
QUESTION: What were some of the specific areas that detracted from performance?
ANSWER: Earlier in the year, the Fund was underexposed to the Internet group.
Our investment philosophy calls for investing in companies with strong
fundamentals and earnings growth. While many Internet companies do not possess
these characteristics, they were, nonetheless, embraced by investors, and their
share prices appreciated substantially.
In addition, the Fund's exposure to traditional retailing companies was a
drag on performance. Many of these firms did not meet earnings expectations.
There was concern that this group may be adversely affected by the growing
popularity of the Internet. In recent months, our consumer focus has shifted to
advertising and ad services, and to speciality retailers. Current holdings in
these areas include Lamar Advertising, Electronic Arts and Ann Taylor.
QUESTION: Which investment strategies enhanced the Fund's returns?
ANSWER: Some of the Fund's largest contributors to performance were in the
communications equipment and Internet infrastructure sectors. Companies like
Comverse Technology and SDL, Inc. benefited from the rapid growth of the
Internet. Additionally, the Fund's semiconductor capital equipment stocks
experienced a strong rally on the back of a semiconductor recovery.
Overweighting this group with names like Novellus, Lam Research, Credence
Systems, and KLA Tencor aided Fund performance.
QUESTION: What is your outlook for small cap stocks?
ANSWER: The current environment of low inflation and steady economic growth are
positive for the financial markets and small-cap stocks. Against this backdrop,
high growth areas within the Internet, biotechnology, and semiconductor capital
equipment sectors have been among the major benefactors. We believe these areas
could continue to experience strong returns going forward if current economic
conditions remain in place.
On October 29, 1999, shareholders of the ING Small Cap Growth Fund approved
the appointment of Furman Selz Capital Management, LLC as sub-adviser to the
Fund. Prior to this date, the Fund was sub-advised by Baring Asset Management
Inc.
SEE PAGE 21 FOR FINANCIAL DETAILS.
4 ING Funds Annual Report / October 31, 1999 [LOGO ING FUNDS]
<PAGE> 7
Data as of 10/31/99
ING FOCUS FUND
For investors seeking long-term growth from a non-diversified equity portfolio
GROWTH OF A $10,000 INVESTMENT
ING Focus Fund vs. Russell 1000 Index: 12/15/98 - 10/31/99
[FOCUS LINE GRAPH]
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Russell 1000
<S> <C> <C> <C> <C>
9425 10000 10000 10000
10320 10950 10950 10850
10773 11410 11420 11237
10811 11460 11460 10881
11140 11810 11800 11298
11272 11930 11930 11770
11216 11870 11870 11516
11942 12630 12630 12103
11565 12220 12220 11734
11235 11870 11870 11624
11027 11650 11650 11304
11819 11980 12370 12064
</TABLE>
Hypothetical illustration of $10,000 invested in the Fund on 12/15/98 includes
the current maximum initial sales charge of 5.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSC of 5% and 1%,
respectively. The Russell 1000 Index is unmanaged with no sales charges or
expenses.
CUMULATIVE TOTAL RETURN (2)
Since inception
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Class X shares
<S> <C> <C> <C> <C>
Without Sales Charge 25.40% 24.80% 24.70% 14.84%
With Sales Charge 18.19 19.80 23.70 9.84
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; X shares is 1/12/99.
1. Holdings are subject to change and are dollar-weighted based on invested
assets.
2. Past performance is historical and is no guarantee of future results. Total
returns are cumulative, not annualized, and include change in share value and
reinvestment of distributions.
PLEASE SEE PAGES 18 AND 19 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND
RISK CONSIDERATIONS.
TOP TEN HOLDINGS (1)
The Bank of New York Co., Inc. 4.3%
American International Group, Inc. 4.0
Bell Atlantic Corp. 3.9
Siebel Systems, Inc. 3.9
Texaco Inc. 3.3
CBS Corp. 3.2
AT&T - Liberty Media Group 3.1
The Kroger Co. 3.1
Baxter International Inc. 3.0
The TJX Cos., Inc. 2.9
TOP FIVE INDUSTRIES (1)
Telecommunication Equipment 6.4%
Medical Products 4.5
Multimedia 4.3
Application Software 4.3
Medical - Drugs 4.0
Manager's Overview
[PHOTO MICHAEL L. KASS
AND ADRIAN JONES
Portfolio Managers]
OBJECTIVE
GROWTH OF CAPITAL through investment in a non-diversified portfolio of
approximately 20 - 40 stocks.
"...we remain enthusiastic about the prospects for our companies and the
industries in which they compete."
QUESTION: How has the Focus Fund performed since its inception?
ANSWER: The Fund continues to post strong results -- outperforming its
benchmark, the Russell 1000 Index.
QUESTION: Which investment themes have produced the best results?
ANSWER: Our largest theme, Bandwidth, continues to generate outstanding returns,
led by several telecommunications and media holdings. Through extensive
bottom-up, fundamental research we identified several stocks in this area,
nearly all of which have outperformed the market. During the year, we increased
our exposure to equipment vendors, while maintaining our overall weighting
towards service providers.
Our Enterprise Data Management stocks have also done extremely well. We
remain very interested in companies that help businesses share, manage and
secure their data. We are also focusing on firms that help break down the
barriers between operating systems and processing architectures.
QUESTION: Were there any themes that did not live up to your expectations?
ANSWER: We had invested in several waste services companies, where structural
changes being implemented were likely to improve financial returns. During the
third quarter the largest company in the industry disclosed a host of accounting
and financial control problems. These were of such magnitude that the firm
became a forced seller of assets. Virtually overnight, the industry shifted from
having an imbalance of buyers of assets, to an imbalance of sellers. This has
offset some of the positive trends of the industry, and has resulted in severely
depressed valuations across the industry.
QUESTION: How have the Fund's financial stocks performed?
ANSWER: We remained underweight in this sector, where rising interest rates have
hurt balance sheets and earnings prospects. However, we maintained our core
investments in fee-driven companies, whose earnings are largely insulated from
these trends.
QUESTION: What is your outlook for the Fund?
ANSWER: We remain enthusiastic about the prospects for our companies and the
industries in which they compete. In addition, the recent market consolidation
presented many interesting long-term investment opportunities to evaluate. With
our significant cash holding we have begun to accumulate positions in companies
that have been on our wish-list for some time. One new area of potential
interest is in certain health care services, where changes to Medicare
reimbursement enacted by the government last year have resulted in a near
distress situation across the board.
SEE PAGE 23 FOR FINANCIAL DETAILS.
[LOGO ING FUNDS] ING Funds Annual Report / October 31, 1999 5
<PAGE> 8
DATA AS OF 10/31/99
ING MID CAP GROWTH FUND
For investors seeking long-term growth
GROWTH OF A $10,000 INVESTMENT
ING Mid Cap Growth Fund vs. Russell Mid Cap Growth Index: 12/15/98 - 10/31/99
[MID CAP GROWTH LINE GRAPH]
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Russell Mid Cap Growth
<S> <C> <C> <C>
9,425 10,000 10,000 10,000
10,151 10,770 10,770 11,215
9,746 10,330 10,330 11,552
9,086 9,630 9,630 10,987
9,189 9,730 9,730 11,599
9,510 10,060 10,060 12,128
9,510 10,070 10,060 11,971
9,934 10,510 10,500 12,807
9,755 10,310 10,310 12,400
9,472 10,000 10,000 12,271
9,548 10,070 10,070 12,166
9,793 9,830 10,230 13,107
</TABLE>
Hypothetical illustration of $10,000 invested in the Fund on 12/15/98 includes
the current maximum initial sales charge of 5.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSC of 5% and 1%,
respectively. The Russell Mid Cap Growth Index is unmanaged with no sales
charges or expenses.
CUMULATIVE TOTAL RETURN (2)
Since inception
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Class I shares Class X shares
<S> <C> <C> <C> <C> <C>
Without Sales Charge 3.90% 3.30% 3.30% 1.27% - 1.90%
With Sales Charge - 2.07 - 1.70 2.30 1.27 - 6.80
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; Class I shares is
7/29/99; Class X shares is 1/19/99.
1. Holdings are subject to change and are dollar-weighted based on invested
assets.
2. Past performance is historical and is no guarantee of future results. Total
returns are cumulative, not annualized, and include change in share value and
reinvestment of distributions.
PLEASE SEE PAGES 18 AND 19 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND
RISK CONSIDERATIONS.
TOP TEN HOLDINGS (1)
Vitesse Semiconductor Corp. 2.7%
Linear Technology Corp. 2.6
Marcomedia, Inc. 2.5
Jones Apparel Group, Inc. 2.2
Circuit City Stores - Circuit City Group 2.1
Biogen, Inc. 2.1
Comverse Technology, Inc. 2.0
American Power Conversion Corp. 1.9
Optical Coating Laboratory, Inc. 1.8
ANTEC Corp. 1.8
TOP FIVE INDUSTRIES (1)
Telecommunication Equipment 8.6%
Circuits 6.1
Data Processing/Mgt 3.5
Printers & Related Prod. 3.2
Applications Software 3.0
Manager's Overview
[PHOTO MATTHEW S. PRICE
AND DAVID C. CAMPBELL
PORTFOLIO MANAGERS]
OBJECTIVE
GROWTH OF CAPITAL through investment in a diversified portfolio of companies
primarily with market capitalizations of $500 million to $7.5 billion.
"Some of the Fund's best performing stocks were in the semiconductor, cable
equipment and electronic manufacturing industries."
QUESTION: How has the Fund performed relative to its benchmark, the Russell
Mid-Cap Growth Index?
ANSWER: The mid-cap growth area generated excellent results since the Fund's
inception. However, given our investment discipline, the Fund did not
participate in several of the areas that generated the strongest results. As a
result, it underperformed its benchmark.
QUESTION: What types of stocks produced the best results?
ANSWER: In general, we saw a high concentration of the best performers coming
from a small group of stocks and industry sectors -- most notably in the
technology area. This made it difficult for more diversified mutual funds to
provide superior results.
QUESTION: What themes did investors favor?
ANSWER: Some of the best performers in the market were stocks with high
price-to-earnings ratios compared to their growth rates. These included
companies experiencing explosive revenue growth, but with little or no
profitability foreseen for several years. Examples included Internet providers
and wireless communication firms.
QUESTION: How did those themes match up with the Fund's investment philosophy?
ANSWER: Our disciplined investment philosophy favors positive earnings growth,
relative price strength and reasonable valuations. As such, it precluded us from
participating in many of the best performing themes. In addition, while we will
overweight an industry sector up to twice the weight of the representative
index, we will not allow any single position to exceed 3% of the portfolio.
QUESTION: What Fund holdings performed well?
ANSWER: As the year progressed, the Fund benefited by overweighting the
technology sector. Some of the Fund's best performing holdings were in the
semiconductor, cable equipment and electronic manufacturing industries. Several
of our stocks also excelled as a result of takeovers. For example, Motorola took
an important step into the cable telecommunications sector by acquiring General
Instrument.
QUESTION: What other factors detracted from performance?
ANSWER: The federal government's desire to reign in costs and reduce Medicaid
and Medicare expenditures in the budget process negatively impacted our nursing
homes, drug suppliers, HMOs and related companies.
QUESTION: What is your outlook for the Fund?
ANSWER: If the 'Goldilocks economy' of slow growth and low inflation continues,
mid-cap stocks should continue to produce record earnings and strong returns.
Valuations, on the other hand, are historically high, and the stock market will
not take disappointing news lightly.
SEE PAGE 24 FOR FINANCIAL DETAILS.
6 ING Funds Annual Report / October 31, 1999 [LOGO ING FUNDS]
<PAGE> 9
DATA AS OF 10/31/99
ING LARGE CAP GROWTH FUND
For investors seeking long-term growth
GROWTH OF A $10,000 INVESTMENT
ING Large Cap Growth Fund vs. S&P 500 Index: 12/15/98 - 10/31/99
[LARGE CAP GROWTH LINE GRAPH]
<TABLE>
<CAPTION>
Class A shares Class B Class C shares S&P 500
<S> <C> <C> <C>
9,425 10,000 10,000 10,000
10,151 10,770 10,760 10,771
10,518 11,150 11,150 11,222
10,236 10,850 10,840 10,873
10,707 11,340 11,330 11,308
10,773 11,410 11,410 11,745
10,292 10,890 10,890 11,468
11,046 11,680 11,680 12,104
10,631 11,230 11,240 11,727
10,603 11,190 11,200 11,668
10,462 11,050 11,050 11,348
11,122 11,250 11,640 12,067
</TABLE>
Hypothetical illustration of $10,000 invested in the Fund on 12/15/98 includes
the current maximum initial sales charge of 5.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSC of 5% and 1%,
respectively. The S&P 500 Index is unmanaged with no sales charges or expenses.
CUMULATIVE TOTAL RETURN (2)
Since inception
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Class I shares Class X shares
<S> <C> <C> <C> <C> <C>
Without Sales Charge 18.00% 17.50% 17.40% 6.21% 8.41%
With Sales Charge 11.22 12.50 16.40 6.21 3.41
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; Class I shares is
9/27/99; Class X shares is 1/11/99.
1. Holdings are subject to change and are dollar-weighted based on invested
assets.
2. Past performance is historical and is no guarantee of future results. Total
returns are cumulative, not annualized, and include change in share value and
reinvestment of distributions.
PLEASE SEE PAGES 18 AND 19 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND
RISK CONSIDERATIONS.
TOP TEN HOLDINGS (1)
Microsoft Corp. 5.4%
MCI WorldCom, Inc. 5.4
General Electric Co. 4.6
Lucent Technologies Inc. 4.4
Cisco Systems, Inc. 4.2
Citigroup Inc. 3.9
Wells Fargo Co. 3.8
Sun Microsystems, Inc. 3.4
American International Group, Inc. 3.0
America Online, Inc. 3.0
TOP FIVE INDUSTRIES (1)
Computers - Micro 7.6%
Div. Manufacturing Operations 7.5
Telephone - Integrated 7.1
Diversified Financial Services 5.9
Telecommunication Equipment 5.3
Manager's Overview
[PHOTO WILLIAM H.THOMAS
PORTFOLIO MANAGEMENT TEAM LEADER]
OBJECTIVE
GROWTH OF CAPITAL through investment in a diversified portfolio of companies
primarily with market capitalizations of $1 billion or more.
"The most significant contributor to performance has been our overweight
position in the technology sector."
QUESTION: How has the Fund performed since its inception?
ANSWER: The Fund has generated strong returns. However, on a relative basis, it
has underperformed its benchmark.
QUESTION: Could you briefly describe this year's equity market?
ANSWER: During the year, the U.S. equity market has been quite volatile and
rotational, responding to changing perceptions of growth in the economy, and in
corporate profits. However, we have maintained our disciplined investment
approach throughout.
QUESTION: What sectors have performed well for the Fund?
ANSWER: The most significant contributor to performance has been our overweight
position in the technology sector. Demand in this sector by both businesses and
consumers remains robust, driven by productivity and rapid growth in the
Internet and telecommunications markets. Key Fund holdings in these markets
included Cisco Systems, Sun Microsystems and Texas Instruments.
After a slow start, the finance sector has also aided returns. Rising
interest rates initially hurt these stocks. However, approval of the landmark
financial reform bill has expanded growth prospects within the group.
QUESTION: Were there areas that detracted from performance?
ANSWER: The Fund was hurt by its overweight position in consumer discretionary
stocks, primarily retail companies. We were positive on this sector, based on
our view that consumer spending would remain strong, and continue to produce
positive earnings surprises for leading companies. We were half-correct.
Spending has remained healthy, but not above consensus expectations.
Furthermore, the group generally underperformed, as interest rates rose and
questions regarding the impact of Internet strategies on traditional retailers
concerned investors. We have since reduced our exposure to retailers and
increased exposure to advertising agencies, who could be the direct
beneficiaries of "e-tailing."
QUESTION: What is your outlook for the Fund?
ANSWER: In general, our outlook is positive. Economic and profit growth should
remain strong, aided by the global recovery. Interest rates are expected to
stabilize, as inflation remains at bay. And strong earnings growth could
continue to move equity prices upward. We expect fundamentals to remain
strongest in the technology, communications, capital goods and finance sectors.
Companies with significant multinational exposure are favored over those with a
primarily domestic orientation, as they should benefit from improving overseas
economies, and a more favorable currency environment.
SEE PAGE 26 FOR FINANCIAL DETAILS.
[LOGO ING FUNDS] ING Funds Annual Report / October 31, 1999 7
<PAGE> 10
DATA AS OF 10/31/99
ING TAX EFFICIENT EQUITY FUND
For investors seeking long-term growth with minimum tax consequences
GROWTH OF A $10,000 INVESTMENT
ING Tax Efficient Equity Fund vs. S&P 500 Index: 12/15/98 - 10/31/99
[TAX EFFICIENT LINE GRAPH]
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares S&P 500
<S> <C> <C> <C>
9,425 10,000 10,000 10,000
10,151 10,770 10,770 10,771
10,443 11,100 11,070 11,222
10,132 10,760 10,730 10,873
10,424 11,070 11,040 11,308
11,056 11,730 11,690 11,745
10,886 11,550 11,510 11,468
11,527 12,230 12,180 12,104
11,178 11,850 11,810 11,727
11,056 11,720 11,680 11,668
10,745 11,380 11,340 11,348
11,301 11,460 11,820 12,067
</TABLE>
Hypothetical illustration of $10,000 invested in the Fund on 12/15/98 includes
the current maximum initial sales charge of 5.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSC of 5% and 1%,
respectively. The S&P 500 Index is unmanaged with no sales charges or expenses.
CUMULATIVE TOTAL RETURN (2)
Since inception
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Class X shares
<S> <C> <C> <C> <C>
Without Sales Charge 19.90% 19.60% 19.20% 7.67%
With Sales Charge 13.01 14.60 18.20 2.67
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; Class X shares is
1/11/99. 1. Holdings are subject to change and are dollar-weighted based on
invested assets. 2. Past performance is historical and is no guarantee of future
results. Total returns are cumulative, not annualized, and include change in
share value and reinvestment of distributions. PLEASE SEE PAGES 18 AND 19 FOR
FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND RISK CONSIDERATIONS.
TOP TEN HOLDINGS (1)
General Electric Co. 3.7%
Microsoft Corp. 2.8
Int'l Business Machines Corp. 2.2
Johnson & Johnson 2.1
Fannie Mae 2.0
Merck & Co., Inc. 2.0
Bank of America Corp. 1.7
Bestfoods 1.7
Intel Corp. 1.7
Citigroup Inc. 1.7
TOP FIVE INDUSTRIES (1)
Medical - Drugs 5.8%
Div. Manufacturing Operations 4.7
Oil Companies - Integrated 4.6
Cosmetics & Toiletries 3.9
Telephone - Integrated 3.7
Manager's Overview
[PHOTO BOB SANDRONI
CARL GOLDSMITH
MARLA RYAN
Portfolio Managers]
OBJECTIVE
HIGH TOTAL RETURN on an after-tax basis through a diversified portfolio of
stocks.
"The Fund's technology holdings, by far, provided the largest contribution to
performance."
QUESTION: How has the Fund performed since its inception?
ANSWER: The Fund's return was fairly consistent with that of its benchmark, the
S&P 500 Index. This is noteworthy, as the vast majority of gains in the
benchmark index came from a relatively small group of stocks.
QUESTION: What are some of the reason for this strong performance?
ANSWER: The Fund's technology holdings, by far, provided the largest
contribution to performance. Other notable performance outside the technology
area included General Electric, Wal-Mart, Citigroup, and Alcoa.
QUESTION: What areas of the technology sector performed well for the Fund?
ANSWER: Two themes in particular enhanced overall returns. First, the explosion
in demand for communications products led to price appreciation for the makers
of networking/telecommunications equipment, wireless infrastructure and cellular
handsets, communication chips, servers, and PCs/microprocessors for Internet
usage.
The second, and related theme, involved the recovery in demand for
semiconductor capital equipment. In 1998, the Asian Crisis created excess
inventories of technology products that, in turn, stalled the demand for new
chip making equipment. However, the continual need to lower unit manufacturing
costs necessitated the use of more advanced equipment. This, coupled with the
buoyant demand for communications products, drove up the prices of semiconductor
capital equipment companies.
QUESTION: What areas detracted from returns?
ANSWER: We were disappointed with the returns of selected financial services and
retail holdings. Specifically, shares of Bank One and First Union suffered, as
earnings shortfalls related to their recent acquisitions pushed down future
analyst expectations. Both firms retain significant franchises within the
financial services sector, and we believe their prices are undervalued at
current levels.
QUESTION: How is the Fund positioned going forward?
ANSWER: We expect to see a continuation of economic growth, and gains in the
stock market as long as the current growth/inflation balance remains intact. We
believe the strong secular forces of technology-driven productivity improvements
and Internet-based competition will offset cyclical inflation concerns. On the
other hand, the concentration of gains in expensive, larger capitalization
issues and wealth-induced consumption spending somewhat tempers our outlook.
SEE PAGE 27 FOR FINANCIAL DETAILS.
8 ING Funds Annual Report / October 31, 1999 [LOGO ING FUNDS]
<PAGE> 11
DATA AS OF 10/31/99
ING GROWTH & INCOME FUND
For investors seeking long-term total returns
GROWTH OF A $10,000 INVESTMENT
ING Growth & Income Fund vs. S&P 500 Index: 12/15/98 - 10/31/99
[GROWTH & INCOME LINE GRAPH]
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares S&P 500
<S> <C> <C> <C>
$ 9,425 $10,000 $10,000 $10,000
9,934 10,540 10,540 10,771
10,292 10,910 10,920 11,222
9,896 10,490 10,490 10,873
10,143 10,748 10,740 11,308
10,416 11,039 11,030 11,745
10,256 10,858 10,850 11,468
10,814 11,439 11,442 12,104
10,512 11,119 11,111 11,727
10,324 10,908 10,901 11,668
10,069 10,638 10,681 11,348
10,777 10,879 11,281 12,077
</TABLE>
Hypothetical illustration of $10,000 invested in the Fund on 12/15/98 includes
the current maximum initial sales charge of 5.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSC of 5% and 1%,
respectively. The S&P 500 Index is unmanaged with no sales charges or expenses.
CUMULATIVE TOTAL RETURN (2)
Since inception
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Class X shares
<S> <C> <C> <C> <C>
Without Sales Charge 14.34% 13.79% 13.81% 6.51%
With Sales Charge 7.77 8.79 12.81 1.51
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; Class X shares is
1/12/99.
1. Holdings are subject to change and are dollar-weighted based on invested
assets.
2. Past performance is historical and is no guarantee of future results. Total
returns are cumulative, not annualized, and include change in share value and
reinvestment of distributions.
PLEASE SEE PAGES 18 AND 19 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND
RISK CONSIDERATIONS.
TOP TEN HOLDINGS (1)
Microsoft Corp. 4.4%
General Electric Co. 4.0
S & P's 500 Depository Receipts 3.2
Intel Corp. 2.5
Wal-Mart Stores, Inc. 2.5
Merck & Co., Inc. 2.4
Cisco Systems, Inc. 2.4
Wells Fargo Co. 2.1
Citigroup Inc. 2.1
Mobil Corp. 2.1
TOP FIVE INDUSTRIES (1)
Medical - Drugs 8.0%
Diversified Manufacturing Operations 5.7
Telephone - Integrated 5.6
Computers - Micro 4.8
Super-Regional Banks - US 4.5
Manager's Overview
[PHOTO DAVID KUSHNER
MARTIN JANSEN
Portfolio Managers]
OBJECTIVE
HIGH TOTAL RATES OF RETURN through investment in a diversified portfolio of
primarily income-producing stocks.
"Our strategy of not taking major sector bets has been beneficial for the Fund."
QUESTION: How has the Fund performed relative to its benchmark?
ANSWER: Overall, since its inception the Fund has lagged the return of the S&P
500 Index. Virtually all this underperformance came during the first four months
of the year -- a period in which the market was extremely narrow. Since that
time, the Fund has produced very competitive results.
QUESTION: How has this year's market environment affected the Fund?
ANSWER: The momentum based nature of the market has negatively impacted the
Fund. We are not momentum investors, preferring instead to concentrate on
fundamental analysis and selecting securities that pass our rigorous screening
process. When stock price movement is based entirely on momentum, as it has been
for much of the year, our performance suffers.
QUESTION: Can you provide some examples of ways you enhanced Fund returns?
ANSWER: Our strategy of not taking major sector bets has been beneficial for the
Fund. With this approach, we do not suffer the volatility associated with rapid
market rotation, or the risk of missing a sudden move in a specific sector.
Turning to specific holdings, two of our best performing stocks continue to
be Citigroup and Sun Microsystems. Citigroup has maintained its leadership role
in the consolidation of the Financial Services industry, and its management team
has done an outstanding job in drawing synergies from its diverse group of
operations. Sun Microsystems continues to ride the wave of the immense
popularity of the Internet. As the "owner" of the Java programming script and
provider of high end Internet servers, the firm's stock has risen substantially.
QUESTION: Can you give some examples of securities that hindered performance?
ANSWER: Early in the year, the Fund was hurt by two technology stocks that did
not meet their earnings targets. Cadence Design experienced falling demand for
its integrated circuit design tools, and the stock was subsequently sold. Compaq
Computers has not done a good job in its attempts to expand from a mixed channel
distributor to a mixed channel/direct distributor of computers.
QUESTION: What is your outlook for the market going forward?
ANSWER: With the Fed raising interest rates to try to slow the economy, we
believe investors will eventually turn back to looking at the fundamental
factors influencing stock prices. Our investment strategy should be a
beneficiary of this trend, as we are dedicated to identifying those companies
with strong business prospects, and selling securities that do not meet our
expectations.
SEE PAGE 29 FOR FINANCIAL DETAILS.
[LOGO ING FUNDS] ING Funds Annual Report / October 31, 1999 9
<PAGE> 12
DATA AS OF 10/31/99
ING INTERNATIONAL BOND FUND
For investors seeking high current income and growth potential
GROWTH OF A $10,000 INVESTMENT
ING International Bond Fund vs. SB Non-US World Gov't. Bond Index: 12/15/98 -
10/31/99
[INTERNATIONAL BOND LINE GRAPH]
<TABLE>
<CAPTION>
SB Non-US World Gov't.
Class A shares Class B shares Class C shares Bond Index
<S> <C> <C> <C>
9524 10000 10000 10000
9499 9970 9970 9960
9366 9822 9825 9804
8959 9390 9391 9460
8925 9349 9360 9477
8862 9288 9279 9463
8686 9089 9100 9272
8532 8923 8934 9051
8650 9041 9052 9369
8577 8960 8971 9429
8639 9020 9031 9604
8556 8490 8853 9594
</TABLE>
Hypothetical illustration of $10,000 invested in the Fund on 12/15/98 includes
the current maximum initial sales charge of 4.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSC of 5% and 1%,
respectively. The SB Non-USWorld Gov't. Bond Index is unmanaged with no sales
charges or expenses.
CUMULATIVE TOTAL RETURN (2)
Since inception
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Class I shares Class X shares
<S> <C> <C> <C> <C> <C>
Without Sales Charge - 10.16% - 10.71% - 10.60% - 1.35% - 9.64%
With Sales Charge - 14.44 - 15.10 - 11.48 - 1.35 - 14.09
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; Class I shares is
7/29/99; Class X shares is 1/11/99.
1. Holdings are subject to change and are dollar-weighted based on invested
assets.
2. Past performance is historical and is no guarantee of future results. Total
returns are cumulative, not annualized, and include change in share value and
reinvestment of distributions.
PLEASE SEE PAGES 18 AND 19 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND
RISK CONSIDERATIONS.
TOP FIVE COUNTRIES (1)
United States 14.5%
Germany 12.3
Italy 11.0
France 7.9
Canada 5.9
REGIONAL BREAKDOWN (1)
Europe 60.5%
North America 20.4
Pacific Rim 9.5
Supra-National Entity 9.6
CREDIT ALLOCATION (1)
U.S. Treasury 8.2%
U.S. Government 4.0
AAA/Aaa 51.6
AA/Aa 32.2
NR 1.8
Manager's Overview
[PHOTO PAUL THURSBY
Portfolio Management
Team Leader]
OBJECTIVE
HIGH TOTAL RETURN through investment in a non-diversified portfolio of bonds
from issuers generally outside of the U.S.
"Our short duration stance in U.S. bonds for much of the period was beneficial,
as the market performed poorly due to rising interest rates."
QUESTION: How has the Fund performed relative to its benchmark since its
inception?
ANSWER: Generally speaking, the international bond market has performed poorly
this year. Against this backdrop, the Fund underperformed its benchmark.
QUESTION: What were some of the specific areas that detracted from performance?
ANSWER: Our underweight position in the Japanese yen hurt performance, as it
appreciated during the reporting period. We feel the yen's strength is
unsustainable, especially given the fact that the economy is in the early stages
of a recovery. We believe government authorities will have to eventually
implement a tight fiscal policy, together with a loose monetary policy, in order
to combat the high build up in government debt. Performance was also adversely
influenced by our underweight position in Japanese government bonds, as we felt
they offered unacceptably low real yields.
QUESTION: What strategies did you use that helped Fund performance?
ANSWER: Our short duration stance in U.S. bonds for much of the period was
beneficial, as the market performed poorly due to rising interest rates. We
anticipate maintaining this stance until we see signs of a slowdown in the U.S.
economy, convincing evidence that inflation is not an issue, or a belief that
the Federal Reserve has finished tightening. Our underweight Sterling position
also benefited the Fund, as it fell against the U.S. dollar over most of the
period.
QUESTION: What do you think the impact of Y2K will be to the bond market?
ANSWER: We believe that Y2K fears will lead to a cautious stance on the part of
banks and retail investors. We also expect to see further withdrawals of
liquidity from bond and currency markets. Central banks recognize this danger,
and are taking steps to boost liquidity and currency levels. As an end result,
the transaction costs of moving between bonds and, to a lesser extent,
currencies, may well rise as the end of December approaches. We will factor this
into our investment decision-making process.
QUESTION: What is your outlook for international bonds?
ANSWER: As we approach the end of 1999, the prevailing sentiment is one of
uncertainty. This is largely due to concerns about growth, the possibility of
higher inflation and Y2K. We believe that inflation fears are relatively
unfounded, and that growth rates will remain modest. Growing evidence of
productivity gains and modest wage increases encourage us to believe that the
high real yields available in quality bond markets are sufficient compensation
for investors. All told, it is our belief that 2000 should be a better year for
bonds.
SEE PAGE 31 FOR FINANCIAL DETAILS.
10 ING Funds Annual Report / October 31, 1999 [ING FUNDS LOGO]
<PAGE> 13
DATA AS OF 10/31/99
ING GLOBAL INFORMATION TECHNOLOGY FUND
For investors seeking long-term growth
GROWTH OF A $10,000 INVESTMENT
ING Global Information Tech. Fund vs. GS Tech. Industry Composite Index:
12/15/98 - 10/31/99
[GLOBAL INFO TECH LINE GRAPH]
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares GS Technology Industry Composite Index
<S> <C> <C> <C>
9,425 10,000 10,000 10,000
10,782 11,440 11,440 11,295
12,234 12,960 12,970 13,109
11,320 11,990 11,990 11,533
11,583 12,270 12,270 12,517
11,376 12,040 12,040 12,911
11,301 11,960 11,960 12,768
12,790 13,530 13,520 14,268
12,762 13,490 13,480 14,129
13,421 14,180 14,180 14,862
14,505 15,310 15,310 15,009
16,381 16,780 17,180 15,540
</TABLE>
Hypothetical illustration of $10,000 invested in the Fund on 12/15/98 includes
the current maximum initial sales charge of 5.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSC of 5% and 1%,
respectively. The GS Technology Industry Composite Index is unmanaged with no
sales charges or expenses.
CUMULATIVE TOTAL RETURN (2)
Since inception
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Class X shares
<S> <C> <C> <C> <C>
Without Sales Charge 73.80% 72.80% 72.80% 39.21%
With Sales Charge 63.81 67.80 71.80 34.21
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; Class X shares is
1/11/99.
1. Holdings are subject to change and are dollar-weighted based on invested
assets.
2. Past performance is historical and is no guarantee of future results. Total
returns are cumulative, not annualized, and include change in share value and
reinvestment of distributions.
PLEASE SEE PAGES 18 AND 19 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND
RISK CONSIDERATIONS.
REGIONAL BREAKDOWN (1)
North America 81.4%
Europe 10.6
Pacific Rim 8.0
TOP FIVE HOLDINGS (1)
12 Technologies, Inc. 3.9%
Microsoft Corp. 3.8
BroadVision, Inc. 3.7
Sun Microsystems, Inc. 3.7
VERITAS Software Corp. 3.6
TOP FIVE COUNTRIES (1)
United States 79.0%
Japan 8.0
Netherlands 4.9
United Kingdom 2.6
Canada 2.4
Manager's Overview
[PHOTO GUY UDING
Portfolio Management
Team Leader]
OBJECTIVE
GROWTH OF CAPITAL through investment in a diversified portfolio of primarily
global information technology stocks.
"...our investments in Internet infrastructure companies were rewarded
handsomely."
QUESTION: Technology stocks have generated outstanding results this year. How
has the Fund fared?
ANSWER: The Fund handily outperformed its benchmark, the Goldman Sachs
Technology Index.
QUESTION: As we entered the year you were cautious about the market's prospects.
Why?
ANSWER: We believed that two issues would affect the broader market. First, that
Y2K compliance issues would impact investor's perceptions of IT spending
patterns. Second, that uncertainty regarding the interest rate environment would
lead to increased stock market volatility. Given these concerns, we positioned
the portfolio with a more defensive bias as the year began -- favoring companies
in the outsourcing, storage and networking equipment industries.
QUESTION: The Fund had many success stories during the year. Could you share a
few?
ANSWER: We strongly believed that 1999 would be a pivotal year for the Internet.
Business-to-consumer usage had already reached a critical mass. More
importantly, in our opinion the opportunity for business-to-business Internet
related applications would gain momentum as we moved into the next millennium.
We took advantage of Internet market weakness in July and increased our exposure
to the sector. In particular, our investments in Internet infrastructure
companies were rewarded handsomely.
A natural extension of this theme was the inevitable growth of the physical
communication infrastructure. Therefore, we increased our exposure in this area,
especially in the optical components/equipment industries. Our exposure to
software vendors was also beneficial.
QUESTION: What detracted from performance?
ANSWER: We underestimated the impact of Y2K on the IT services sector. We
assumed that the labor intensity of IT projects would make this sector more
immune to a slowdown. Also, the transition of IT services companies towards the
Internet was more difficult than expected. Companies like Computer Sciences and
Unisys experienced a significant slowdown in their bookings.
QUESTION: What is your outlook for the Fund?
ANSWER: We are still very positive about the outlook for the IT sector.
Companies are using technology more and more as a strategic advantage rather
than a cost cutting tool. As a result, IT companies that deliver solutions to
business problems, such as supply chain software firms, will likely experience
strong demand for their products. Companies are also increasing their Internet
presence to generate revenue. This should drive significant long-term demand for
IT products and services.
SEE PAGE 32 FOR FINANCIAL DETAILS.
[LOGO ING FUNDS] ING Funds Annual Report / October 31, 1999 11
<PAGE> 14
DATA AS OF 10/31/99
ING EUROPEAN EQUITY FUND
For investors seeking long-term growth
GROWTH OF A $10,000 INVESTMENT
ING European Equity Fund vs. FT Europe Index: 12/15/98 - 10/31/99
[EUROPEAN EQUITY LINE GRAPH]
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares FT Europe Index
<S> <C> <C> <C>
9,425 10,000 10,000 10,000
9,972 10,570 10,570 10,652
9,962 10,560 10,560 10,578
9,680 10,250 10,250 10,338
9,812 10,390 10,390 10,492
10,075 10,670 10,670 10,864
9,566 10,120 10,110 10,326
9,840 10,400 10,400 10,515
9,991 10,560 10,560 10,655
10,151 10,720 10,720 10,772
9,943 10,490 10,490 10,691
10,320 10,390 10,790 11,022
</TABLE>
Hypothetical illustration of $10,000 invested in the Fund on 12/15/98 includes
the current maximum initial sales charge of 5.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSC of 5% and 1%,
respectively. The FT Europe Index is unmanaged with no sales charges or
expenses.
CUMULATIVE TOTAL RETURN (2)
Since inception
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Class X shares
<S> <C> <C> <C> <C>
Without Sales Charge 9.50% 8.90% 8.90% 3.42%
With Sales Charge 3.20 3.90 7.90 - 1.58
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; Class X shares is
1/15/99.
1. Holdings are subject to change and are dollar-weighted based on invested
assets.
2. Past performance is historical and is no guarantee of future results. Total
returns are cumulative, not annualized, and include change in share value and
reinvestment of distributions.
PLEASE SEE PAGES 18 AND 19 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND
RISK CONSIDERATIONS.
TOP FIVE HOLDINGS (1)
Shell Transport & Trading Co. PLC 2.6%
Nokia Oyj 2.5
Vodafone AirTouch PLC 2.5
Roche Holding AG 2.3
BP Amoco PLC 2.2
TOP FIVE INDUSTRIES (1)
Money Center Banks 11.4%
Medical - Drugs 10.1
Oil Companies - Integrated 7.5
Multi-line Insurance 6.9
Telephone - Integrated 5.5
TOP FIVE COUNTRIES (1)
United Kingdom 34.4%
France 15.1
Germany 12.1
Switzerland 10.6
Netherlands 8.3
Manager's Overview
[PHOTO ADRIAN VAN TIGGELEN
Portfolio Management
Team Leader]
OBJECTIVE
GROWTH OF CAPITAL through investment in a diversified portfolio of primarily
European companies.
"...we focused our efforts on successful stock picking to generate strong
performance."
QUESTION: How has the Fund performed since its inception?
ANSWER: The Fund generated respectable results, although it slightly
underperformed its benchmark, the FT-Europe Index. During the reporting period,
sector rotations have been fast and quite furious, driven by significant changes
in interest rate movements and growth expectations. More thematic issues such as
the Internet, mergers and acquisitions, oil prices and Y2K added fuel to the
fire.
QUESTION: What were some of the areas that enhanced Fund performance?
ANSWER: By positioning the portfolio towards the benchmark from a sector point
of view we were less vulnerable to the market's gyrations. Within that
framework, we focused our efforts on successful stock picking to generate strong
performance. Examples of stocks that made major contributions to the Fund
included Nokia, Ericsson, Telefonica and Mannesmann in the telecommunications
equipment and services area.
QUESTION: What strategies detracted from performance?
ANSWER: We were not immune to the multiple rotations thrown at us by the market.
For example, like many portfolio managers, we were not optimally positioned for
the spring rally in cyclical stocks. In addition, we have been only slightly
overweight in telecommunications and information technology hardware -- both of
which provided exceptional returns. Our emphasis on defensive sectors such as
utilities, retailers and pharmaceuticals also hindered results.
QUESTION: How have currency movements affected the Fund?
ANSWER: Since the portfolio is not hedged for currency movements, the
euro/dollar relationship has been an important factor for Fund investors. This
movement has been negative in 1999, with the euro declining significantly
against the dollar. We see a reasonable chance for a reversal of this trend in
2000, which would enhance the return on European equities for U.S. investors.
QUESTION: What is your outlook for the Fund?
ANSWER: Our outlook remains moderately positive for the near future. Year-end
liquidity has helped the markets recently, and liquidity is also expected to
drive markets upward early next year, assuming Y2K problems turn out to be a
non-event. Longer-term fundamentals, especially inflation, are encouraging, and
the earnings outlook for European companies looks quite positive. With valuation
levels rather high, interest rates will provide the most important key to equity
performance in 2000. If bond yields stabilize at their present levels, as we
expect, we still see reasonable upside potential for European equities.
SEE PAGE 33 FOR FINANCIAL DETAILS.
12 ING Funds Annual Report / October 31, 1999 [LOGO ING FUNDS]
<PAGE> 15
DATA AS OF 10/31/99
ING INTERNATIONAL EQUITY FUND
For investors seeking long-term growth
GROWTH OF A $10,000 INVESTMENT
ING International Equity Fund vs. MSCI EAFE Index: 12/15/98 - 10/31/99
[INTERNATIONAL EQUITY LINE GRAPH]
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares MSCI EAFE
<S> <C> <C> <C>
$ 9,425 $10,000 $10,000 $10,000
9,604 10,190 10,190 10,522
9,849 10,450 10,440 10,493
9,670 10,250 10,240 10,246
10,094 10,690 10,680 10,676
10,556 11,180 11,170 11,110
10,075 10,660 10,650 10,540
10,547 11,150 11,150 10,954
10,905 11,520 11,520 11,282
10,877 11,490 11,480 11,326
10,716 11,320 11,320 11,443
11,140 11,260 11,660 11,874
</TABLE>
Hypothetical illustration of $10,000 invested in the Fund on 12/15/98 includes
the current maximum initial sales charge of 5.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSC of 5% and 1%,
respectively. The MSCI EAFE Index is unmanaged with no sales charges or
expenses.
CUMULATIVE TOTAL RETURN (2)
Since inception
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Class I Shares Class X shares
<S> <C> <C> <C> <C> <C>
Without Sales Charge 18.20% 17.60% 17.60% 4.69% 14.84%
With Sales Charge 11.40 12.60 16.60 4.69 9.84
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; Class I shares is
9/27/99; Class X shares is 2/16/99.
1. Holdings are subject to change and are dollar-weighted based on invested
assets.
2. Past performance is historical and is no guarantee of future results. Total
returns are cumulative, not annualized, and include change in share value and
reinvestment of distributions.
PLEASE SEE PAGES 18 AND 19 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND
RISK CONSIDERATIONS.
REGIONAL BREAKDOWN (1)
Europe 66.1%
Pacific Rim 27.1
North America 4.2
South America 2.0
Africa 0.6
TOP FIVE HOLDINGS (1)
BP Amoco PLC 2.5%
Deutsche Telekom AG 2.1
Nokia Oyj 2.0
Nippon Telegraph & Telephone Corp. 2.0
Total Fina SA 1.9
TOP FIVE COUNTRIES (1)
Japan 19.5%
United Kingdom 18.2
France 13.0
Germany 10.2
Switzerland 7.9
Manager's Overview
[PHOTO JAMES P. WILLIAMS
AND HAYES MILLER
Portfolio Managers]
OBJECTIVE
GROWTH OF CAPITAL through investment in a diversified portfolio of stocks in
markets generally outside of the United States.
"Another positive was the Fund's overweight in French stocks, which performed
well because of merger and acquisition activity, and strong growth in the
country."
QUESTION: How has the Fund performed since its inception?
ANSWER: While the Fund has provided solid absolute returns since its inception,
it has slightly lagged the performance of its benchmark, the MSCI EAFE Index.
QUESTION: What were some of the steps you took to enhance performance?
ANSWER: A primary contributor to performance was the inclusion of select
emerging market stocks in the portfolio. These included small positions in South
Korea, Indonesia, Taiwan and Mexico. In addition, a significant overweight in
Singapore was very helpful. This position was made ahead of the consensus, and
was based on our view that the U.S. would continue to provide consumer support
for electronic components that form the backbone of Singapore exports.
QUESTION: What strategies did you employ in Europe?
ANSWER: The Fund benefited by increasing its exposure to value, or cyclically
sensitive stocks, from the so-called growth areas, early in the year. These
stocks performed well between February and September. We then increased our
telecommunications weightings in early October, and benefited from the strong
run that followed in these stocks. Another positive was the Fund's overweight in
French stocks, which performed well because of merger and acquisition activity,
and strong growth in the country.
QUESTION: What strategies hurt performance?
ANSWER: Our underweight position in Japan was the largest detractor from
performance. The Japanese market is up substantially this year, with most of the
outperformance coming early in 1999. The decision not to invest in Hong Kong
earlier this year has also proven to be overly cautious. While interest rates
there have remained high and property prices stagnant, the market has been
robust, due to general Asian growth themes and Chinese fortitude vis-a-vis its
currency.
QUESTION: What is your outlook for the Fund?
ANSWER: We are taking a somewhat cautious stance, based on a variety of factors.
We do not believe the growth of the world economy will be as potent as the
consensus believes. This is based on rising interest rates in the U.S.,
questions regarding the long-term success of structural changes in Asia and
Japan, and the world-wide impact of electronic commerce on service dominated
economies.
Therefore, we have shifted the balance of risk in our global model more
toward stocks and away from country and currency risks. We think that this is
appropriate, as we anticipate a turning point in expectations over the next
several quarters.
SEE PAGE 35 FOR FINANCIAL DETAILS.
[LOGO ING FUNDS] ING Funds Annual Report / October 31, 1999 13
<PAGE> 16
Data as of 10/31/99
ING GLOBAL BRAND NAMES FUND
For investors seeking long-term growth
GROWTH OF A $10,000 INVESTMENT
ING Global Brand Names Fund vs. MSCI World Index: 12/15/98 - 10/31/99
[GLOBAL BRAND LINE GRAPH]
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares MSCI World
<S> <C> <C> <C>
$ 9,425 $10,000 $10,000 $10,000
10,028 10,640 10,640 10,647
10,547 11,180 11,180 10,881
10,075 10,680 10,680 10,593
10,509 11,130 11,130 11,036
10,396 11,000 11,000 11,473
10,123 10,710 10,710 11,055
10,613 11,230 11,230 11,572
10,631 11,240 11,250 11,539
10,669 11,270 11,280 11,520
10,217 10,790 10,790 11,410
10,905 11,000 11,410 12,004
</TABLE>
Hypothetical illustration of $10,000 invested in the Fund on 12/15/98 includes
the current maximum initial sales charge of 5.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSC of 5% and 1%,
respectively. The MSCI World Index is unmanaged with no sales charges or
expenses.
CUMULATIVE TOTAL RETURN (2)
Since inception
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Class I shares Class X shares
<S> <C> <C> <C> <C> <C>
Without Sales Charge 15.70% 15.00% 15.10% 2.12% 7.06%
With Sales Charge 9.05 10.00 14.10 2.12 2.06
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; Class I shares is
7/29/99; Class X shares is 1/14/99.
1. Holdings are subject to change and are dollar-weighted based on invested
assets.
2. Past performance is historical and is no guarantee of future results. Total
returns are cumulative, not annualized, and include change in share value and
reinvestment of distributions.
PLEASE SEE PAGES 18 AND 19 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND
RISK CONSIDERATIONS.
REGIONAL BREAKDOWN (1)
North America 60.0%
Europe 31.0
Pacific Rim 9.0
TOP FIVE HOLDINGS (1)
Nokia Oyj 7.0%
The Coca-Cola Co. 5.8
Time Warner Inc. 5.6
Microsoft Corp. 5.3
Intel Corp. 5.0
TOP FIVE COUNTRIES (1)
United States 60.0%
Netherlands 9.0
France 7.6
Finland 7.0
Japan 6.8
Manager's Overview
[PHOTO Herman Kleeven
Portfolio Management
Team Leader]
OBJECTIVE
GROWTH OF CAPITAL through investment in a non-diversified portfolio of
multi-national companies with well-known brands.
"...we expect global brand name companies to benefit from a recovery in the
emerging markets."
QUESTION: How has the Fund performed for its shareholders?
ANSWER: Since the Fund's inception it has produced strong absolute returns.
However, on a relative basis it has underperformed its benchmark, the MSCI World
Index.
QUESTION: How has this year's recovery in many global economies affected the
Fund?
ANSWER: Despite rising interest rates in the U.S., stock markets in many
countries continue to rebound strongly. It's no surprise that brand name
consumer goods in general have been benefactors of this renewed economic
strength.
QUESTION: Was there any downside to these recoveries?
ANSWER: For the Fund, there were some negative implications. Evidence of a
strong economy forced portfolio managers to add to their underweight cyclical
positions, such as steel, paper, oil and chemical companies. This shift was
financed by a move out of growth stocks, to which our portfolio has a strong
bias.
QUESTION: Can you share some examples of Fund success stories?
ANSWER: Our investment in Nokia continues to enhance Fund performance, as the
company grows its market share with leading edge products for the mobile phone
market. Luxury goods companies Louis Vuitton Moet Hennesy (LVMH) and Gucci
benefited from an improving outlook in Asia. Gucci's earnings were substantially
above consensus estimates, and its share price further benefited from the
takeover battle that started when LVMH launched its bid.
QUESTION: What detracted from returns?
ANSWER: The Fund's holding in Philip Morris was a drag on returns, as its stock
price dropped during the period under review. Ongoing legal problems have led to
lackluster results throughout the tobacco industry. Gillette was also a
disappointment, due to negative developments in Latin America and Japan, and
poor performance by a number of its subsidiaries.
QUESTION: What is your outlook for the Fund?
ANSWER: Continued economic strength, particularly in the U.S., would seem to
favor cyclical stocks at the expense of high-multiple stocks to which our Fund
is biased. However, rising interest rates makes it unlikely that economically
sensitive stocks will continue to perform well, and we expect investor focus to
shift back toward growth stocks. Moreover, we expect global brand name companies
to benefit from a recovery in the emerging markets. Longer term, we remain
positive for investments in global stock markets and global brand names
companies in particular. However, we do not believe the above average market
returns of the past few years can be sustained.
SEE PAGE 36 FOR FINANCIAL DETAILS.
14 ING Funds Annual Report / October 31, 1999 [LOGO ING FUNDS]
<PAGE> 17
Data as of 10/31/99
ING HIGH YIELD BOND FUND
For investors seeking high current income and total returns
GROWTH OF A $10,000 INVESTMENT
ING High Yield Bond Fund vs. LB High Yield Index: 12/15/98 - 10/31/99
[HIGH YIELD BOND LINE GRAPH]
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares LB High Yield Index
<S> <C> <C> <C>
9,524 10,000 10,000 10,000
9,567 10,042 10,042 10,031
9,772 10,243 10,250 10,180
9,757 10,209 10,218 10,120
9,906 10,369 10,378 10,216
10,094 10,569 10,569 10,414
9,905 10,355 10,355 10,274
9,980 10,427 10,426 10,252
10,009 10,450 10,450 10,293
9,987 10,420 10,430 10,180
10,051 10,481 10,491 10,107
10,131 10,059 10,468 10,173
</TABLE>
Hypothetical illustration of $10,000 invested in the Fund on 12/15/98 includes
the current maximum initial sales charge of 4.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSC of 5% and 1%,
respectively. The Lehman Brothers High Yield Index is unmanaged with no sales
charges or expenses.
CUMULATIVE TOTAL RETURN (2)
Since inception (unless otherwise noted)
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Class X shares
<S> <C> <C> <C> <C>
Without Sales Charge 6.37% 5.57% 5.67% 4.99%
With Sales Charge 1.31 0.59 4.68 0.02
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; Class X shares is
1/11/99.
1. Holdings are subject to change and are dollar-weighted based on invested
assets.
2. Past performance is historical and is no guarantee of future results. Total
returns are cumulative, not annualized, and include change in share value and
reinvestment of distributions. PLEASE SEE PAGES 18 AND 19 FOR FOOTNOTES, WHICH
INCLUDE ADDITIONAL DETAILS AND RISK CONSIDERATIONS.
TOP TEN HOLDINGS (1)
Hyperion Telecomm. due 4/15/03 5.2%
Spanish Broadcasting due 3/15/05 5.2
CSC Holdings, Inc. due 4/1/08 4.9
US Treasury Notes due 2/15/07 4.6
Boyd Gaming Corp. due 10/1/03 3.4
Del E. Webb Corp. due 2/15/10 3.4
NEXTLINK Comm. due 4/15/06 3.2
Williams Comm. due 10/1/07 3.1
Insight Midwest LP due 10/1/09 3.1
Orange PLC due 6/1/06 3.1
CREDIT ALLOCATION (1)
US Treasury 4.4%
BBB/B 86.0
CCC 5.0
Repurchase Agreement 4.6
Manager's Overview
[PHOTO Bob Bowman
Portfolio Management
Team Leader]
OBJECTIVE
HIGH CURRENT INCOME AND TOTAL RETURN, through investment in a diversified
portfolio of below-investment grade corporate bonds.
"Fund returns were enhanced by successful security selection within the sectors
that outperformed the overall high yield market."
QUESTION: How has the ING High Yield Fund performed since its inception?
ANSWER: The Fund continues to generate very strong returns -- outperforming both
the Lehman Brothers High Yield Index and competitive universe of high yield
funds by a wide margin.
QUESTION: Overall, what were some of the reasons for this success?
ANSWER: The primary reasons were our overweight positions in sectors that
generated strong returns, while limiting our exposure to sectors that produced
sub-par results. Individual security selection and trading gains also aided
performance.
QUESTION: Can you give some specific examples of strategies that worked well for
the Fund?
ANSWER: The Fund has maintained an overweight position in the communications
sector. This proved beneficial, as year-to-date, this sector has outperformed
the Lehman Brothers High Yield Index by nearly 500 basis points. Fund returns
were enhanced by successful security selection within the sectors that
outperformed the overall high yield market.
In the past several months, the Fund's defensive positioning helped to
protect principal and generate relatively strong returns. These defensive
tactics included holding higher cash balances, investing in securities with
higher credit quality, and shortening duration levels relative to the benchmark.
QUESTION: Were there any investment strategies that didn't work for the Fund?
ANSWER: During the first quarter of the year the Fund's duration was longer than
the benchmark. This hindered performance, as interest rates rose steadily during
the period. However, the effect was not dramatic, as the high yield universe is
not as highly correlated with interest rate movements as other sectors of the
fixed income marketplace.
QUESTION: What is your forecast for the high yield market and the Fund?
ANSWER: The outlook for the high yield market is somewhat mixed. The strong
domestic economy should continue to be supportive of high yield bonds. However,
short-term supply and demand issues, and the uncertainty associated with Y2K
will likely be limiting factors over the next several months. Given this, we
anticipate that the Fund will continue to be defensively positioned through the
remainder of 1999. In the year 2000, we believe the outlook for high yield bonds
will improve. Should this occur, the Fund will be more aggressively positioned,
by investing in higher yielding securities that we feel provide attractive
relative value.
SEE PAGE 37 FOR FINANCIAL DETAILS.
[LOGO ING FUNDS] ING Funds Annual Report / October 31, 1999 15
<PAGE> 18
Data as of 10/31/99
ING INTERMEDIATE BOND FUND
For investors seeking high current income consistent with the preservation of
capital and liquidity
GROWTH OF A $10,000 INVESTMENT
ING Intermediate Bond Fund vs. LB Gov't./Corp. Index: 12/15/98 - 10/31/99
[INTERMEDIATE BOND LINE GRAPH]
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares LB Gov't./Corp. Index
<S> <C> <C> <C>
9,524 10,000 10,000 10,000
9,514 9,974 9,986 9,960
9,557 10,023 10,035 10,030
9,381 9,823 9,835 9,792
9,451 9,889 9,902 9,841
9,471 9,904 9,916 9,865
9,330 9,761 9,763 9,764
9,276 9,698 9,701 9,733
9,282 9,698 9,701 9,706
9,269 9,679 9,682 9,698
9,385 9,793 9,796 9,786
9,385 9,317 9,696 9,811
</TABLE>
Hypothetical illustration of $10,000 invested in the Fund on 12/15/98 includes
the current maximum initial sales charge of 4.75% with reinvestment of
distributions. Class B & C shares are subject to a maximum CDSC of 5% and 1%,
respectively. The Lehman Brothers Gov't/Corp. Index is unmanaged with no sales
charges or expenses.
CUMULATIVE TOTAL RETURN (2)
Since inception
<TABLE>
<CAPTION>
Class A shares Class B shares Class C shares Class X shares
<S> <C> <C> <C> <C>
Without Sales Charge - 1.46% - 2.13% - 2.10% - 1.07%
With Sales Charge - 6.15 - 6.83 - 3.04 - 5.83
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; Class X shares is
1/11/99.
1. Holdings are subject to change and are dollar-weighted based on invested
assets.
2. Past performance is historical and is no guarantee of future results. Total
returns are cumulative, not annualized, and include change in share value and
reinvestment of distributions.
PLEASE SEE PAGES 18 AND 19 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND
RISK CONSIDERATIONS.
TOP FIVE HOLDINGS (1)
US Treasury Bonds due 2/15/09 5.9%
Rogers Cantel Inc. due 6/1/08 3.1
Williams Comm. due 10/1/07 3.1
Lenfest Comm. due 11/1/05 3.0
Nat'l. Bank of Canada due 11/1/09 3.0
CREDIT ALLOCATION (1)
U.S. Treasury 14.5%
U.S. Government 4.0
AA/A 21.6
BBB/BB 39.3
B/B 14.9
Repurchase Agreement 5.7
Manager's Overview
[PHOTO James B. Kauffmann
Portfolio Management
Team Leader]
OBJECTIVE
HIGH CURRENT INCOME consistent with the preservation of capital and liquidity
through investment in a diversified portfolio of U.S. government and
high-quality corporate bonds.
"The primary driver of performance was the Fund's overweight position in the
corporate bond sector."
QUESTION: It has been a difficult year for the overall bond market. How has the
Fund fared in this environment?
ANSWER: The Fund has performed relatively well, generating a return that has
been competitive to that of its benchmark, the Lehman Brothers Government
Corporate Index.
QUESTION: Why have interest rates risen this year?
ANSWER: In an attempt to slow the robust U.S. economy and head off inflation,
the Federal Reserve Board has risen short-term interest rates on three occasions
thus far in 1999. When rates rise, bond prices fall, making this a difficult
period for fixed income funds.
QUESTION: What were some of the strategies you used to enhance performance?
ANSWER: The primary driver of performance was the Fund's overweight position in
the corporate bond sector. Specifically, the Fund carried twice the allocation
of corporate bonds compared to its benchmark. We felt the values in this sector
were enormously compelling relative to the credit risk and the global economic
climate. This strategy was somewhat volatile and, at times, a bit painful. While
the first quarter 1999 performance for the sector was very strong, the third
quarter was extremely difficult, as the capital markets priced in a huge risk
premium.
Another positive factor has been the Fund's trading efforts. In several
instances, the Fund was able to take advantage of pricing inefficiencies in the
new issue market and make several profitable, short term buys and sells.
QUESTION: What factors hurt the Fund's return?
ANSWER: Of course, rising interest rates were a main culprit. In addition, the
Fund was hurt by a few individual securities that experienced inordinate pricing
pressures. This was due to management missteps and the absence of a clear
strategy for dealing with business risks. Rite Aid, the third largest drugstore
chain in the U.S., and Service Corporation, the nations largest provider of
funeral services, are two clear examples.
QUESTION: What strategies are you now employing for the Fund?
ANSWER: The Fund has adopted a neutral interest rate position relative to the
market. However, we anticipate extending maturities when we believe the Fed has
completed its tightening cycle. We have increased our exposure to mortgages in
order to bolster portfolio yields, upgrade credit quality and take advantage of
lower interest rate volatility. Although credit spreads have contracted
markedly, we remain overweighted in corporate bonds, as we feel the credit
fundamentals are very solid, and technical supply conditions remain favorable
going into the end of the year.
SEE PAGE 39 FOR FINANCIAL DETAILS.
16 ING Funds Annual Report / October 31, 1999 [LOGO ING FUNDS]
<PAGE> 19
Data as of 10/31/99
ING MONEY MARKET FUND
For investors seeking preservation of capital and liquidity
ASSET ALLOCATION (1)
[MONEY MARKET PIE CHART]
- - 1st Tier Commercial Paper 73.3%
- - Asset-Backed 10.3
- - Short & Medium-Term Note 7.3
- - Repurchase Agreement 4.1
- - U.S. Government Agency 2.9
- - Floating Rate Note 2.1
PERFORMANCE HIGHLIGHTS
<TABLE>
<CAPTION>
IBC Money
Fund Rep
1st Tier
7-Day Yield 30-Day Yield Average
<S> <C> <C> <C>
A Shares 4.85% 4.81% 4.71%
B Shares 4.21 4.16 --
C Shares 4.21 4.17 --
I Shares 5.31 N/A --
X Shares 4.21 4.17 --
</TABLE>
Inception date for Class A, B, and C shares is 12/15/98.
Inception date for Class I shares is 10/13/99.
Inception date for Class X shares is 1/20/99.
TOP TEN HOLDINGS (1)
State St. Bank Repurchase Agreement 4.1%
IBM Credit Corp. due 11/12/99 2.6
Norwest Corp. due 3/15/00 2.1
Consolidated Natural Gas due 11/10/99 2.1
Eksportfinans ASA due 11/29/99 2.1
Deere & Co. due 11/30/99 2.1
Credit Suisse First Boston due 2/16/00 2.1
Procter & Gamble Co. due 11/16/99 2.1
ANRC Auto Owner Trust due 10/16/00 1.7
American Home Products due 4/20/00 1.7
1. Fund holdings are subject to change and are dollar-weighted based on invested
assets.
PAST PERFORMANCE IS HISTORICAL AND IS NO GUARANTEE OF FUTURE RESULTS. PLEASE SEE
PAGES 18 AND 19 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS AND RISK
CONSIDERATIONS.
Manager's Overview
[PHOTO Jennifer Thompson
Portfolio Management
Team Leader]
OBJECTIVE
The preservation of capital and liquidity and the maintenance of a stable $1.00
net asset value per share.
"...the Fund will attempt to balance its liquidity objectives while attempting
to provide a high level of current income."
QUESTION: How has the Fund performed since its inception?
ANSWER: The Fund continues to meet its objective. As of October 31, 1999 the
Fund had a seven-day yield of 4.85% for its Class A shares, 4.21% for its Class
B, C and X shares. These compare to the seven-day yield of 4.71% from the Fund's
benchmark, the IBC Financial Data First Tier Index.
QUESTION: Can you describe the economic environment during the last year?
ANSWER: In the last half of 1998, the Federal Reserve Board responded to the
global economic crisis by lowering its Fed Funds target -- the rate banks charge
each other for overnight loans -- by 75 basis points in three one-quarter point
moves. After restoring confidence to the markets, the U.S. economy began to
recover in 1999.
In May, as global economies stabilized and the U.S. continued to show signs
of strength, the Fed shifted to a "tight bias." As widely anticipated, the Fed
Funds target was raised at the end of June, in a pre-emptive move to ward off
inflation. However, economic indicators continued to show strength, leading the
Fed to again raise rates by 25 basis points in August and mid-November. In
November, the Fed bias was shifted back to neutral.
QUESTION: What investment strategies have you employed for the Fund?
ANSWER: As market participants anticipated a Fed tightening in June, the yield
curve out to one year steepened. This made longer-term interest rates more
attractive. To take advantage of the higher rates, and as a hedge to a potential
Fed tightening, the Fund employed a barbell investment strategy. In addition,
the average maturity of the Fund was shortened relative to its benchmark prior
to the tightenings. This strategy allowed the Fund to reinvest assets at higher
rates after the tightenings.
QUESTION: What is your outlook for the Fund as we approach the year 2000?
ANSWER: The outlook for the remainder of the year is somewhat uncertain. One of
the Fund's objectives is to maintain sufficient liquidity to meet potential
redemptions. However, as Y2K approaches, many money funds and other investors
have the same liquidity objective. At the same time, many money market issuers
have funded themselves earlier-than-usual, leading to thin supply. The
combination of a lot of money to invest and less supply is leading to
unattractive short-rates as we approach year-end. Finally, there is uncertainty
over the Fed's next move. As such, the Fund will attempt to balance its
liquidity objectives, while attempting to provide a high level of current
income.
SEE PAGE 40 FOR FINANCIAL DETAILS.
[LOGO ING FUNDS] ING Funds Annual Report / October 31, 1999 17
<PAGE> 20
October 31, 1999
FOOTNOTES
For Fund Performance pages 3 - 17
Past performance data are historical and cannot guarantee future results. The
principal value and return on an investment in the Fund will fluctuate, so that
an investor's share, when redeemed, may be worth more or less than the original
cost. Because of ongoing market volatility, the Fund's performance may be
subject to substantial short-term changes. It is important to note that the Fund
is new with limited operating history.
Shares of ING Funds are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the FDIC or any other agency and
involve investment risks, including the possible loss of the principal amount
invested.
Credit allocation includes securities rated by national rating organizations, or
if not rated, determined to be of comparable quality by the Fund's Sub-Adviser.
Total return (cumulative, not annualized) without sales charge for Class A
shares is at NAV. Total return with sales charge for Class A shares include the
current initial maximum sales charge of 5.75% (Stock funds); 4.75% (Bond Funds),
respectively. Class A shares of ING Money Market Fund are not subject to an
initial sales charge.
Total return (cumulative, not annualized) with sales charge for Class B, Class C
and Class X shares, assume redemption of Fund shares at the end of each period
indicated, with the maximum contingent deferred sales charge of 5%, 1% and 5%,
respectively.
Class I shares are offered only to retirement plans affiliated with ING Group.
Shares are sold without an initial sales charge and are not subject to any Rule
12b-1 fees, shareholder servicing fees or account servicing fees.
Class X shares are offered to qualified investors (including, but not limited
to, IRAs, Roth IRAs, Education IRAs, SEP IRAs, Simple IRAs and 403(b)(7) Plans.)
Investors purchasing Class X shares will receive bonus shares having a value
equal to 2% of the amount invested. Bonus shares are paid by the Fund's
Distributor. Shares purchased by the reinvestment of dividends or capital gains
distributions are not eligible for bonus shares. Total return for Class X shares
does not include the 2% bonus shares paid by the distributor.
RISK CONSIDERATIONS
These and other risks are more fully described in the prospectus.
GLOBAL/INTERNATIONAL: There are risks associated with investing in foreign
securities. Foreign securities markets may not be subject to the same degree of
regulation as, and may be more volatile and less liquid than, the major US
markets. International investing also involves political and economic
uncertainties as well as exposure to currency fluctuations.
ING INTERNET FUND: The Fund concentrates its investments in internet and
internet-related companies. The Fund carries more risks than funds invested
across many industries and may be subject to significant price fluctuations. The
Fund may also invest in foreign securities.
ING SMALL CAP GROWTH FUND: There are risks associated with investing in small,
less well-known issuers. Small capitalization issuers typically have limited
product lines and smaller market share, and are less liquid than stocks of
large, more diversified companies.
ING FOCUS FUND: The Fund concentrates its investments in up to only 40 holdings.
The Fund carries more risk than more diversified funds.
ING TAX-EFFICIENT EQUITY FUND: The Fund may invest up to 10% of its total assets
in foreign securities, which may be subject to exchange rate risk, and political
and economic uncertainties.
ING GLOBAL INFORMATION TECHNOLOGY FUND: The Fund concentrates its investments in
information technology companies. The Fund carries more risk than funds invested
across many industries and may be subject to significant price fluctuations and
stock price declines.
ING HIGH YIELD BOND FUND: Investments in high yield bonds are high risk
investments. Certain high yield/high risk bonds carry particular market risks
and may experience greater volatility in market value than investment grade
corporate bonds.
ING MONEY MARKET FUND: Shares of the Fund are not insured nor guaranteed by the
Federal Deposit Insurance Corp., or any other government agency. Although the
Fund seeks to preserve the value of $1.00 per share, it is possible to lose
money by investing in the Fund.
18 ING Funds Annual Report / October 31, 1999
<PAGE> 21
BENCHMARKS
THE @NET INDEX encompasses 50 companies which are key drivers in the development
of the Internet. The index is weighted based on market capitalization of each of
the component stock.
RUSSELL 2500 GROWTH INDEX measures the performance of the Russell 2500 companies
with higher price-to-book ratios and higher forecasted growth values.
RUSSELL 1000 INDEX measures the performance of the 1000 largest companies in the
Russell 3000 Index which represents approximately 89% of the total market
capitalization of the Russell 3000 Index. The average market capitalization is
approximately $9.9 billion.
RUSSELL MID-CAP GROWTH INDEX measures the performance of the Russell Midcap
companies with higher price-to-book ratios and higher forecasted growth values.
The stocks are also members of the Russell 1000 Growth Index.
S&P 500 INDEX includes 500 widely held common stocks in four broad sectors
(industrials, utilities, financial and transportation). It is a total return
index with dividends reinvested.
SALOMON BROTHERS NON-US WORLD GOVERNMENT BOND INDEX includes a wide range of
foreign government bonds with maturities over 1 year.
GOLDMAN SACHS TECHNOLOGY INDUSTRY COMPOSITE INDEX is a modified
capitalization-weighted index currently composed of 190 companies involved in
the technology industry. It includes reinvestment of dividends and capital
gains.
FT-EUROPE INDEX is average weighted by the market value of the performance of
securities listed on the Stock Exchange of Austria, Belgium, Denmark, Finland,
France, Germany, Ireland, Italy, Netherlands, Norway, Spain, Sweden, Switzerland
and UK.
MSCI EAFE INDEX is a stock index designed to measure the investment returns of
developed countries outside of North America. The Index is composed of
approximately 1000 stocks from 18 countries.
MSCI WORLD INDEX represents 20 countries with market value representing the
performance of approximately 1,450 stocks. It includes the U.S., Europe, Canada,
Australia, New Zealand and the Far East. The average company in the Index has a
market capitalization of about $3.5 billion. The index is total return with
dividends reinvested.
LEHMAN BROTHERS HIGH YIELD INDEX includes all fixed-income securities having a
maximum quality rating of Ba1 (including default issues), a minimum amount
outstanding of $100 million and at least 1 year to maturity.
LEHMAN BROTHERS GOVERNMENT/CORP. INDEX includes government and corporate bonds,
U.S. treasuries, agency securities, corporate and yankee bonds with reinvestment
of income.
IBC MONEY FUND REPORT 1ST TIER AVERAGE is a weekly report tracking the
performance, assets, average maturities and portfolio composition of over 1,300
taxable and tax-free money funds.
ING Funds Annual Report / October 31, 1999 19
<PAGE> 22
OCTOBER 31, 1999
SCHEDULE OF INVESTMENTS
ING Internet Fund
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
- --------- ------
<S> <C>
COMMON STOCK(1)-- 95.4%
APPLICATIONS SOFTWARE -- 1.4%
25,770 New Era of Networks, Inc. .............................. $ 835,914
COMPUTER DATA SECURITY -- 5.5%
27,240 ISS Group, Inc. ........................................ 1,038,525
17,590 VeriSign, Inc. ......................................... 2,172,365
-----------
3,210,890
COMPUTER SERVICES -- 2.2%
5,030 Ariba, Inc. ............................................ 779,650
4,400 Integra-Net SA ......................................... 273,034
16,300 Segue Software, Inc. ................................... 208,844
-----------
1,261,528
COMPUTER SOFTWARE -- 3.9%
11,415 E.piphany, Inc. ........................................ 981,690
32,385 TIBCO Software Inc. .................................... 1,263,015
-----------
2,244,705
CONSULTING SERVICES -- 3.0%
45,050 USWeb Corp. ............................................ 1,745,688
ELECTRONIC COMPONENTS-SEMICONDUCTOR -- 3.2%
14,330 Broadcom Corp. -- A Shares ............................. 1,831,553
ENTERPRISE SOFTWARE/SERVICES -- 5.4%
42,625 BroadVision, Inc. ...................................... 3,138,266
FINANCE-INVESTMENT BANKERS/BROKERS -- 2.1%
2,750 Consors Discount-Broker AG .............................. 154,449
43,640 E*TRADE Group, Inc. .................................... 1,039,177
-----------
1,193,626
INTERNET CONTENT -- 26.3%
17,100 CMGI Inc. .............................................. 1,871,381
30,490 CNET, Inc. ............................................. 1,438,749
35,190 Critical Path, Inc. .................................... 1,609,942
18,010 DoubleClick Inc. ....................................... 2,521,400
15,370 Inktomi Corp. .......................................... 1,559,094
16,380 Internet Capital Group, Inc. ........................... 1,906,222
36,750 Preview Travel, Inc. ................................... 1,120,875
24,000 SportsLine USA, Inc. ................................... 862,500
12,910 Yahoo! Inc. ............................................ 2,311,697
-----------
15,201,860
INTERNET SOFTWARE -- 27.6%
14,450 Allaire Corp. .......................................... 1,053,947
17,400 America Online, Inc. ................................... 2,256,562
32,040 At Home Corp.-- A Shares ............................... 1,197,495
16,330 Exodus Communications, Inc. ............................ 1,404,380
5,960 Fantastic Corp. ........................................ 419,985
12,230 FortuneCity.com, Inc. .................................. 117,695
21,700 Infoseek Corp. ......................................... 687,619
7,580 Internet Initiative Japan Inc. ADR ..................... 407,425
31,140 Liberate Technologies, Inc. ............................ 2,121,413
12,520 Lycos, Inc. ............................................ 668,255
14,360 RealNetworks, Inc. ..................................... 1,575,113
14,730 Rhythms NetConnections Inc. ............................ 429,932
17,745 Silknet Software, Inc. ................................. 1,419,600
21,000 Software.com, Inc. ..................................... 1,413,562
25,040 Usinternetworking, Inc. ................................ 834,145
-----------
16,007,128
NETWORK SOFTWARE -- 1.3%
42,030 Network Associates, Inc. ............................... 769,674
NETWORKING PRODUCTS -- 3.9%
30,350 Cisco Systems, Inc. .................................... 2,245,900
RETAIL-INTERNET -- 6.9%
14,790 Amazon.com, Inc. ....................................... 1,044,544
25,460 Chemdex Corp. .......................................... 970,662
8,510 eBay Inc. .............................................. 1,149,914
16,990 MP3.com, Inc. .......................................... 824,015
-----------
3,989,135
TELECOMMUNICATION SERVICES -- 1.3%
13,595 Net2Phone, Inc. ........................................ 737,529
TELEPHONE-INTEGRATED -- 1.4%
9,570 MCI WorldCom, Inc. ...................................... 821,226
TOTAL COMMON STOCK
(Cost-- $45,485,257) .................................. $55,234,622
REPURCHASE AGREEMENT -- 4.6%
$2,659,000 State Street Bank & Trust Co., 5.120% due
11/1/99; Proceeds at maturity -- $2,660,135;
(Fully collateralized by U.S. Treasury Bonds,
8.125% due 8/15/2019; Market value --
$2,713,650) (Cost-- $2,659,000) ...................... $ 2,659,000
TOTAL INVESTMENTS -- 100.0%
(Cost-- $48,144,257)(2) .............................. $57,893,622
</TABLE>
1. Non-income producing securities.
2. Aggregate cost for Federal income tax purposes is $48,500,626.
See Notes to Financial Statements.
20 ING Funds Annual Report / October 31, 1999
<PAGE> 23
ING SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
- --------- ------
<S> <C>
COMMON STOCK -- 95.5%
ADVERTISING AGENCIES -- 2.8%
10,600 Snyder Communications, Inc. ............................ $ 135,150
4,200 True North Communications Inc. (1) ..................... 169,313
16,733 Ventiv Health, Inc. .................................... 119,225
10,300 Young & Rubicam Inc.(1) ................................ 471,225
-----------
894,913
ADVERTISING SALES -- 1.3%
7,700 Lamar Advertising Co. .................................. 415,800
ADVERTISING SERVICES -- 2.0%
2,400 Modem Media.Poppe Tyson, Inc. .......................... 165,600
7,900 TMP Worldwide Inc. ..................................... 493,256
-----------
658,856
APPLICATIONS SOFTWARE -- 3.6%
10,000 Citrix Systems, Inc. ................................... 641,250
9,900 Intuit Inc. ............................................ 288,337
13,200 SERENA Software, Inc. .................................. 247,500
-----------
1,177,087
AUDIO/VIDEO PRODUCTS -- 0.3%
1,700 Polycom, Inc. ........................................... 85,000
CASINO HOTELS -- 0.4%
2,700 MGM Grand, Inc. ......................................... 137,700
CIRCUIT BOARDS -- 1.4%
9,000 Jabil Circuit, Inc. ..................................... 470,250
CIRCUITS -- 1.7%
4,000 Integrated Device Technology, Inc. ..................... 82,250
10,600 Vitesse Semiconductor Corp. ............................ 486,275
-----------
568,525
COMMERCIAL BANKS-WESTERN US -- 0.2%
3,600 Pacific Century Financial Corp.(1) ..................... 82,125
COMMERCIAL SERVICES -- 0.4%
2,650 Circle.com ............................................. 38,425
1,900 StarTek, Inc. .......................................... 86,212
-----------
124,637
COMMERCIAL SERVICES-FINANCE -- 3.2%
27,150 Concord EFS, Inc. ...................................... 734,747
3,600 NCO Group, Inc. ........................................ 152,550
3,500 The Profit Recovery Group International, Inc. .......... 144,156
-----------
1,031,453
COMMUNICATIONS SOFTWARE -- 0.4%
1,600 Razorfish Inc. ......................................... 118,000
COMPUTER SERVICES -- 1.7%
2,800 Cognizant Technology Solutions Corp. ................... 128,625
3,300 Sapient Corp. .......................................... 421,988
-----------
550,613
COMPUTER SOFTWARE -- 3.0%
8,500 Mercury Interactive Corp. .............................. 689,563
3,500 SalesLogix Corp. ....................................... 110,250
4,100 Unigraphics Solutions Inc. ............................. 88,406
3,800 Wind River Systems, Inc. ............................... 77,425
-----------
965,644
COMPUTERS-MEMORY DEVICES -- 2.2%
6,500 VERITAS Software Corp. ................................. 701,188
CONSULTING SERVICES -- 1.1%
2,500 Charles River Associates Inc. .......................... 63,125
10,000 Navigant Consulting, Inc. .............................. 285,625
-----------
348,750
CONTAINERS-PAPER/PLASTIC -- 0.8%
4,700 Sealed Air Corp. ....................................... 260,263
DATA PROCESSING/MANAGEMENT -- 0.2%
3,200 Best Software, Inc. .................................... 64,200
DIAGNOSTIC EQUIPMENT-- 0.3%
2,300 Cytyc Corp. ............................................ 91,425
ELECTRIC PRODUCTS-MISCELLANEOUS -- 0.2%
1,700 C-Cube Microsystems Inc. ............................... 75,650
ELECTRONIC COMPONENTS-MISCELLANEOUS -- 2.6%
20,600 Gentex Corp. .......................................... 354,063
11,700 Sawtek Inc. ........................................... 479,700
-----------
833,763
ELECTRONIC COMPONENTS-SEMICONDUCTOR -- 13.6%
2,800 ACT Manufacturing, Inc. ................................ 74,725
1,900 ATMI, Inc. ............................................. 51,181
3,800 Amkor Technology, Inc. ................................. 76,713
4,300 Applied Micro Circuits Corp. ........................... 334,594
32,000 Cypress Semiconductor Corp. ............................ 818,000
5,000 Ibis Technology Corp. .................................. 228,125
5,400 KLA-Tencor Corp. ....................................... 427,612
4,700 Lam Research Corp. ..................................... 396,856
3,500 MKS Instruments, Inc. .................................. 73,500
8,900 Novellus Systems, Inc. ................................. 689,750
3,700 SDL, Inc. .............................................. 456,256
2,900 TranSwitch Corp. ....................................... 136,481
6,900 TriQuint Semiconductor, Inc. ........................... 552,000
1,200 Xilinx, Inc. ........................................... 94,350
-----------
4,410,143
ELECTRONIC MEASURING INSTRUMENTS -- 1.3%
5,300 Credence Systems Corp. ................................. 241,813
7,000 Vishay Intertechnology, Inc. ........................... 171,063
-----------
412,876
ENTERTAINMENT SOFTWARE -- 3.2%
13,000 Electronic Arts Inc. .................................. 1,050,562
FIBER OPTICS -- 2.2%
3,200 Harmonic Inc. .......................................... 190,000
2,600 JDS Uniphase Corp. ..................................... 433,875
2,500 Williams Communications Group, Inc. .................... 79,687
-----------
703,562
HUMAN RESOURCES -- 0.6%
8,500 Korn/Ferry International ............................... 189,125
INDEPENDENT POWER PRODUCER -- 1.0%
5,600 Calpine Corp. .......................................... 322,700
INDUSTRIAL AUTOMATION/ROBOT -- 0.2%
3,600 Brooks Automation, Inc. ................................ 68,400
INTERNET SOFTWARE-- 1.8%
2,800 AppNet, Inc. ........................................... 121,975
2,600 Proxicom, Inc. ......................................... 199,550
2,100 Scient Corp. ........................................... 260,137
-----------
581,662
INVESTMENT MANAGEMENT/ADVISORY SERVICES -- 0.3%
3,000 Neuberger Berman Inc. .................................. 87,000
MACHINERY-GENERAL INDUSTRIES -- 0.8%
4,900 Asyst Technologies, Inc. ............................... 189,875
4,800 GaSonics International Corp. ........................... 80,400
-----------
270,275
MEDICAL PRODUCTS -- 1.1%
4,700 MiniMed Inc. ........................................... 356,319
</TABLE>
ING FUNDS ANNUAL REPORT / OCTOBER 31, 1999 21
<PAGE> 24
OCTOBER 31, 1999
SCHEDULE OF INVESTMENTS
ING SMALL CAP GROWTH FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
- --------- ------
<S> <C>
MEDICAL-BIOMEDICAL/GENETIC -- 7.7%
1,400 Affymetrix, Inc. ....................................... $ 123,375
6,900 BioCryst Pharmaceuticals, Inc. ......................... 186,300
5,800 Biogen, Inc. ........................................... 429,925
10,400 Chiron Corp. ........................................... 297,050
4,400 CuraGen Corp. .......................................... 79,750
3,600 IDEC Pharmaceuticals Corp. ............................. 418,275
13,000 Inhale Therapeutic Systems, Inc. ....................... 358,313
4,100 Millennium Pharmaceuticals, Inc. ....................... 287,512
4,800 Protein Design Labs, Inc. .............................. 192,300
9,800 Vical Inc. ............................................. 139,650
-----------
2,512,450
MEDICAL-DRUGS -- 2.3%
5,100 King Pharmaceuticals, Inc. ............................. 154,275
2,800 Medco Research, Inc. ................................... 67,550
4,000 MedImmune, Inc. ........................................ 448,000
4,100 ViroPharma Inc. ........................................ 85,587
-----------
755,412
MISCELLANEOUS MANUFACTURERS -- 0.8%
6,700 Pentair, Inc. (1) ...................................... 252,087
NETWORK SOFTWARE-- 2.2%
13,000 Legato Systems, Inc. ................................... 698,750
NETWORKING PRODUCTS-- 1.0%
3,300 Network Appliance, Inc. ................................ 244,200
3,450 Performance Technologies, Inc. ......................... 74,606
-----------
318,806
OIL COMPANIES-EXPLORATION & PRODUCTION -- 2.6%
9,700 Anadarko Petroleum Corp.(1) ............................ 298,881
7,400 Barrett Resources Corp. ................................ 248,363
4,000 Devon Energy Corp.(1) .................................. 155,500
10,300 Forest Oil Corp. ....................................... 137,762
-----------
840,506
OIL & GAS DRILLING -- 1.2%
10,600 Noble Drilling Corp. ................................... 235,188
7,300 Precision Drilling Corp. ............................... 169,269
-----------
404,457
PIPELINES -- 1.3%
10,300 El Paso Energy Corp.(1) ................................ 422,300
PRINTERS & RELATED PRODUCTS -- 1.7%
13,800 Electronics for Imaging, Inc. .......................... 556,313
PRINTING-COMMERCIAL -- 0.9%
7,100 Valassis Communications, Inc. .......................... 305,300
RACETRACKS -- 0.8%
5,300 International Speedway Corp.-- A Shares(1) ............. 273,613
RADIO -- 1.6%
4,000 Citadel Communications Corp. ........................... 193,250
2,700 Cox Radio, Inc.-- A Shares ............................. 189,000
1,600 Hispanic Broadcasting Corp. ............................ 129,600
-----------
511,850
RETAIL-APPAREL/SHOE -- 0.9%
3,500 AnnTaylor Stores Corp. ................................. 148,969
3,100 The Talbots, Inc.(1) ................................... 145,894
-----------
294,863
RETAIL-COMPUTER EQUIPMENT -- 1.9%
10,200 CDW Computer Centers, Inc. ............................. 629,850
RETAIL-CONSUMER ELECTRONICS -- 0.2%
2,100 REX Stores Corp. ....................................... 60,112
RETAIL-DISCOUNT -- 0.5%
7,600 Family Dollar Stores, Inc.(1) .......................... 156,750
RETAIL-HOME FURNISHINGS -- 1.0%
9,150 Cost Plus, Inc. ........................................ 333,975
RETAIL-MAIL ORDER -- 0.9%
3,800 Lands' End Inc. ........................................ 292,362
RETAIL-RESTAURANTS -- 0.6%
5,600 Papa John's International, Inc. ........................ 209,300
TELECOMMUNICATION EQUIPMENT -- 1.8%
5,100 Comverse Technology, Inc. .............................. 578,850
TELECOMMUNICATION SERVICES -- 3.0%
2,700 Allegiance Telecom, Inc. ............................... 186,300
1,700 Commonwealth Telephone Enterprises, Inc. ............... 90,950
5,000 McLeodUSA Inc. ......................................... 223,125
5,800 RCN Corp. .............................................. 277,675
4,100 Teligent, Inc.-- A Shares .............................. 183,988
-----------
962,038
THERAPEUTICS -- 2.5%
3,200 Gilead Sciences, Inc. .................................. 202,200
11,700 Medarex, Inc. .......................................... 80,437
6,200 Progenics Pharmaceuticals, Inc. ........................ 133,300
9,400 QLT PhotoTherapeutics Inc. ............................. 398,325
-----------
814,262
TOYS -- 0.5%
3,700 JAKKS Pacific, Inc. .................................... 151,700
WIRELESS EQUIPMENT -- 1.7%
3,100 Carrier Access Corp. .................................... 153,256
7,600 RF Micro Devices, Inc. .................................. 392,350
-----------
545,606
TOTAL COMMON STOCK
(Cost -- $25,638,045) ................................. $30,989,978
REPURCHASE AGREEMENT -- 4.5%
$1,475,000 State Street Bank & Trust Co., 5.120% due
11/1/99; Proceeds at maturity -- $1,475,629;
(Fully collateralized by U.S. Treasury Notes,
6.875% due 5/15/2006; Market value -- $1,507,683)
(Cost -- $1,475,000) ................................ $ 1,475,000
TOTAL INVESTMENTS -- 100.0%
(Cost-- $27,113,045)(2) ................................. $32,464,978
</TABLE>
1. Income producing security.
2. Aggregate cost for Federal income tax purposes is $27,153,632.
See Notes to Financial Statements.
22 ING Funds Annual Report / October 31, 1999
<PAGE> 25
ING FOCUS FUND
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
- --------- ------
<S> <C>
COMMON STOCK -- 85.1%
APPLICATIONS SOFTWARE -- 4.3%
6,300 Citrix Systems, Inc.(1) ................................ $ 403,987
12,600 Siebel Systems, Inc.(1) ................................ 1,383,638
-----------
1,787,625
BEVERAGES-NON-ALCOHOLIC -- 2.1%
25,700 PepsiCo, Inc. .......................................... 891,469
BROADCASTING SERVICE/PROGRAM -- 2.6%
27,600 AT&T -- Liberty Media Group(1) ......................... 1,095,375
BUILDING PRODUCT-CEMENT/AGGREGATE -- 1.8%
19,000 Martin Marietta Materials, Inc. .......................... 739,813
CELLULAR TELECOMMUNICATION -- 1.9%
16,550 Vodafone AirTouch PLC Sponsored ADR ...................... 793,366
COMPUTERS-MEMORY DEVICES -- 1.5%
8,700 EMC Corp.(1) ............................................ 635,100
DATA PROCESSING/MANAGEMENT -- 2.2%
20,100 First Data Corp. ....................................... 918,319
DIVERSIFIED FINANCIAL SERVICES -- 1.8%
7,000 Morgan Stanley Dean Witter & Co. ....................... 772,187
ELECTRIC-INTEGRATED -- 2.4%
110,500 El Paso Electric Co.(1) ............................... 1,008,312
Enterprise Software/Service -- 2.1%
31,800 Compuware Corp.(1) ..................................... 884,438
FINANCE-MORTAGE LOAN/BANKER -- 1.9%
14,700 Freddie Mac ............................................ 794,719
FOOD-RETAIL -- 2.6%
52,100 The Kroger Co.(1) ...................................... 1,084,331
GOLD MINING -- 1.0%
23,700 Barrick Gold Corp. ..................................... 434,006
INTERNET SOFTWARE -- 1.7%
19,100 Verio Inc.(1) .......................................... 712,669
MEDICAL-DRUGS -- 4.0%
12,100 Bristol-Myers Squibb Co. ............................... 929,431
11,400 SmithKline Beecham PLC ADR ............................. 729,600
-- -----------
1,659,031
MEDICAL-HOSPITALS -- 2.3%
49,200 Tenet Healthcare Corp.(1) .............................. 956,325
MEDICAL PRODUCTS -- 4.5%
16,200 Baxter International Inc. .............................. 1,050,975
7,700 Johnson & Johnson ...................................... 806,575
-----------
1,857,550
METAL-ALUMINUM -- 1.8%
12,300 Reynolds Metals Co. .................................... 743,381
MONEY CENTER BANKS -- 3.7%
36,500 The Bank of New York Co., Inc. ......................... 1,528,438
MULTI-LINE INSURANCE -- 3.4%
13,673 American International Group, Inc. ..................... 1,407,464
MULTIMEDIA -- 4.3%
23,450 CBS Corp.(1) ........................................... 1,144,653
9,000 Time Warner Inc. ....................................... 627,188
-----------
1,771,841
OIL-FIELD SERVICES -- 2.0%
21,800 Halliburton Co. ........................................ 821,587
OIL COMPANIES-INTEGRATED -- 2.8%
19,100 Texaco Inc. ............................................ 1,172,262
PIPELINES -- 2.1%
23,700 The Williams Cos., Inc. ................................ 888,750
PROPERTY/CASUALTY INSURANCE -- 1.6%
11,900 The Chubb Corp. ........................................ 653,013
RETAIL-DISCOUNT -- 2.5%
38,500 The TJX Cos., Inc. ..................................... 1,044,313
SATELLITE TELECOMMUNICATION -- 2.1%
12,200 General Motors Corp.-- H Shares(1) ....................... 888,313
SAVINGS & LOANS/THRIFTS-WESTERN US -- 1.9%
21,800 Washington Mutual, Inc ................................. 783,437
TELECOMMUNICATION EQUIPMENT -- 6.4%
18,500 ADC Telecommunications, Inc.(1) ........................ 882,219
19,200 General Instrument Corp.(1) ............................ 1,033,200
17,100 Telefonaktiebolaget LM Ericsson Sponsored ADR .......... 731,025
-----------
2,646,444
TELECOMMUNICATION SERVICES -- 3.2%
17,100 Global Telesystems Group Inc.(1) ....................... 409,331
12,000 NTL Inc.(1) ............................................ 904,500
-----------
1,313,831
TELEPHONE-INTEGRATED -- 3.3%
12,529 AT&T Corp. ............................................. 585,731
15,528 SBC Communications Inc. ................................ 790,957
-----------
1,376,688
TELEPHONE-LOCAL -- 3.3%
21,400 Bell Atlantic Corp. .................................... 1,389,662
TOTAL COMMON STOCK
(Cost -- $30,104,875) .................................. $35,454,059
REPURCHASE AGREEMENT -- 14.9%
$6,188,000 State Street Bank & Trust Co., 5.120%
due 11/1/99; Proceeds at maturity -- $6,190,640;
(Fully collateralized by U.S. Treasury Bonds,
8.125% due 8/15/2019; Market value --
$6,316,050) (Cost -- $6,188,000) ................... $ 6,188,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $36,292,875)(2) ................................ $41,642,059
</TABLE>
1. Non-income producing security.
2. Aggregate cost for Federal income tax purposes is $36,330,015.
See Notes to Financial Statements.
ING Funds Annual Report / October 31, 1999 23
<PAGE> 26
October 31, 1999
SCHEDULE OF INVESTMENTS
ING MID CAP GROWTH FUND
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
- --------- ------
<S> <C>
COMMON STOCK -- 96.7%
ADVANCED MATERIALS/PRODUCTS -- 1.8%
5,000 Optical Coating Laboratory, Inc. ....................... $ 534,375
ADVERTISING AGENCIES -- 1.1%
7,000 Young & Rubicam Inc. ................................... 320,250
AEROSPACE/DEFENSE-EQUIPMENT -- 0.9%
5,000 General Dynamics Corp. ................................. 277,187
AIRLINES -- 0.9%
12,000 COMAIR Holdings, Inc. ................................. 276,937
APPAREL MANUFACTURERS -- 2.1%
20,000 Jones Apparel Group, Inc.(1) ........................... 632,500
APPLICATIONS SOFTWARE -- 3.0%
8,000 Citrix Systems, Inc.(1) ................................ 513,000
12,900 National Instruments Corp.(1) .......................... 387,806
-----------
900,806
AUTO/TRUCK PARTS & EQUIPMENT -- 0.8%
14,000 Tower Automotive, Inc.(1) .............................. 228,375
BUILDING PRODUCTS-CEMENT/AGGREGATE -- 0.9%
7,000 Martin Marietta Materials, Inc. ........................ 272,563
BUILDING-MAINTENANCE & SERVICE -- 0.8%
7,200 Ecolab Inc. ............................................ 243,450
CIRCUIT BOARDS -- 2.7%
8,500 Jabil Circuit, Inc.(1) ................................. 444,125
4,000 Sanmina Corp.(1) ....................................... 360,250
-----------
804,375
CIRCUITS -- 6.1%
10,600 Linear Technology Corp. ................................ 741,338
5,400 Micrel, Inc.(1) ........................................ 293,625
17,000 Vitesse Semiconductor Corp.(1) ......................... 779,875
-----------
1,814,838
COMMERCIAL BANKS-CENTRAL US -- 0.8%
5,565 Old Kent Financial Corp. ............................... 226,774
COMMERCIAL BANKS-EASTERN US -- 0.9%
12,500 North Fork Bancorp., Inc. .............................. 258,594
COMMERCIAL BANKS-SOUTHERN US -- 1.6%
9,150 AmSouth Bancorp ........................................ 235,613
10,000 National Commerce Bancorp. ............................. 250,000
-----------
485,613
COMMERCIAL BANKS-WESTERN US -- 2.2%
13,400 City National Corp. .................................... 519,250
2,500 Zions Bancorp. ......................................... 147,344
-----------
666,594
COMMERCIAL SERVICE-FINANCE -- 2.4%
11,250 Concord EFS, Inc.(1) ................................... 304,453
10,500 Paychex, Inc. .......................................... 413,437
-----------
717,890
COMPUTER SOFTWARE -- 2.4%
11,000 Macromedia, Inc.(1) .................................... 708,812
COMPUTERS-INTEGRATED SYSTEM -- 1.1%
10,000 NCR Corp.(1) ........................................... 331,250
CONSULTING SERVICES -- 0.9%
10,000 Navigant Consulting, Inc.(1) ........................... 285,625
CONSUMER PRODUCTS-MISCELLANEOUS -- 0.7%
8,400 Blyth Industries, Inc.(1) .............................. 210,525
DATA PROCESSING/MANAGEMENT -- 3.5%
14,000 Acxiom Corp.(1) ........................................ 231,000
13,000 American Management Systems, Inc.(1) ................... 336,375
7,500 Fiserv, Inc.(1) ........................................ 240,000
12,500 The Reynolds & Reynolds Co. -- A Shares ................ 227,344
-----------
1,034,719
DENTAL SUPPLIES & EQUIPMENT -- 1.6%
20,000 Sybron International Corp.(1) .......................... 476,250
DIRECT MARKETING -- 0.7%
10,000 Harte-Hanks, Inc. ...................................... 198,125
DIVERSIFIED MANUFACTURING OPERATIONS -- 2.1%
5,400 Carlisle Cos. Inc. ..................................... 179,550
5,000 Danaher Corp. .......................................... 241,563
6,100 Teleflex Inc. .......................................... 207,781
-----------
628,894
ELECTRONIC COMPONENTS-MISCELLANEOUS -- 0.7%
12,000 Gentex Corp.(1) ........................................ 206,250
ELECTRONIC COMPONENTS-SEMICONDUCTOR -- 2.9%
10,500 Altera Corp.(1) ........................................ 510,563
4,400 KLA-Tencor Corp.(1) .................................... 348,425
-----------
858,988
ELECTRONIC MEASURING INSTRUMENTS -- 0.9%
11,500 Vishay Intertechnology, Inc.(1) ........................ 281,031
ENTERPRISE SOFTWARE/SERVICES -- 1.6%
10,000 Symantec Corp.(1) ...................................... 477,500
FINANCE-CREDIT CARD -- 0.6%
3,600 Capital One Financial Corp. ............................ 190,800
FOOD-WHOLESALE/DISTRIBUTION -- 0.7%
11,000 U.S. Foodservice(1) ................................... 211,062
HEALTH CARE COST CONTAIN -- 0.9%
8,000 MedQuist Inc.(1) ...................................... 256,000
IDENTIFICATION SYSTEM/DEVICE -- 1.7%
12,500 Symbol Technologies, Inc. .............................. 496,875
INSTRUMENTS-SCIENTIFIC -- 1.1%
6,400 Waters Corp.(1) ........................................ 340,000
LIFE/HEALTH INSURANCE -- 0.9%
7,300 Protective Life Corp. ................................ 264,169
MACHINERY TOOLS & RELATED PRODUCTS -- 1.4%
14,000 Applied Power Inc. -- A Shares ......................... 406,875
MEDICAL-BIOMEDICAL/GENETIC -- 2.0%
8,000 Biogen, Inc.(1) ........................................ 593,000
MEDICAL-WHOLESALE DRUG DISTRIBUTION -- 0.8%
16,000 AmeriSource Health Corp. -- A Shares(1) ............... 240,000
MEDICAL PRODUCTS -- 1.4%
5,400 MiniMed Inc.(1) ......................................... 409,387
MISCELLANEOUS MANUFACTURER -- 0.9%
6,900 Pentair, Inc. .......................................... 259,613
MULTI-LINE INSURANCE -- 1.3%
13,400 Horace Mann Educators Corp. ............................ 377,712
</TABLE>
24 ING Funds Annual Report / October 31, 1999
<PAGE> 27
ING MID CAP GROWTH FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
- ---------- ------
<S> <C>
NETWORK SOFTWARE -- 1.5%
8,600 Legato Systems, Inc.(1) ................................ $ 462,250
OIL COMPANIES-EXPLORATION & PRODUCTION -- 1.8%
12,500 EOG Resources, Inc. .................................... 260,156
20,000 Union Pacific Resources Group Inc. ..................... 290,000
-----------
550,156
POWER CONVERSION/SUPPLY EQUIPMENT -- 1.8%
24,000 American Power Conversion Corp.(1) ..................... 538,500
PRINTERS & RELATED PRODUCTS -- 3.2%
12,500 Electronics for Imaging, Inc.(1) ....................... 503,906
6,000 Lexmark International Group, Inc.(1) ................... 468,375
-----------
972,281
PRINTING-COMMERCIAL -- 1.1%
7,400 Valassis Communications, Inc.(1) ....................... 318,200
PUBLISHING-PERIODICALS -- 0.8%
7,800 The Reader's Digest Association, Inc. -- A Shares ...... 251,550
RENTAL AUTO/EQUIPMENT -- 1.1%
7,500 The Hertz Corp. -- A Shares ............................ 325,313
RETAIL-APPAREL/SHOE -- 0.8%
12,000 Ross Stores, Inc. ...................................... 247,500
RETAIL-AUTO PARTS -- 0.7%
11,000 CSK Auto Corp.(1) ...................................... 196,625
RETAIL-BEDDING -- 1.5%
11,400 Linens `n Things, Inc.(1) .............................. 453,150
RETAIL-BUILDING PRODUCTS -- 0.7%
5,400 Fastenal Co. .............................................. 195,750
RETAIL-CONSUMER ELECTRONICS -- 2.0%
14,000 Circuit City Stores-Circuit City Group ................. 597,625
RETAIL-DISCOUNT -- 1.8%
10,000 Dollar General Corp. ................................... 263,750
13,800 Family Dollar Stores, Inc. ............................. 284,625
-----------
548,375
RETAIL-MAIL ORDER -- 1.5%
8,600 Williams-Sonoma, Inc.(1) ............................... 462,250
RETAIL-RESTAURANTS -- 0.9%
12,000 Outback Steakhouse, Inc.(1) ............................ 276,000
SCHOOLS -- 1.9%
12,500 Apollo Group, Inc. -- A Shares(1) ...................... 328,906
12,000 DeVry Inc.(1) .......................................... 252,750
-----------
581,656
TELECOMMUNICATION EQUIPMENT -- 8.6%
10,000 ADC Telecommunications, Inc.(1) ........................ 476,875
11,000 ANTEC Corp.(1) ......................................... 533,500
8,500 CommScope, Inc.(1) ..................................... 338,938
5,050 Comverse Technology, Inc.(1) ........................... 573,175
8,400 General Instrument Corp.(1) ............................ 452,025
3,500 Plantronics, Inc.(1) ................................... 204,969
-----------
2,579,482
TOYS -- 0.6%
9,000 Hasbro, Inc. ........................................... 185,625
TRANSPORTATION-SERVICES -- 1.9%
8,500 C.H. Robinson Worldwide, Inc. .......................... 287,406
7,400 Expeditors International of Washington, Inc. ........... 276,575
-----------
563,981
TRANSPORTATION-TRUCK -- 0.7%
12,000 Swift Transportation Co., Inc.(1) ...................... 209,250
TOTAL COMMON STOCK
(Cost -- $25,727,389) ........................................... $28,920,102
REPURCHASE AGREEMENT -- 3.3%
$1,001,000 State Street Bank & Trust Co., 5.120%
due 11/1/99; Proceeds at maturity -- $1,001,427;
(Fully collateralized by U.S. Treasury Bonds,
8.125% due 8/15/2019; Market value --
$1,025,025) (Cost -- $1,001,000) ............. $ 1,001,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $26,728,389)(2) ..................... $29,921,102
</TABLE>
1. Non-income producing security.
2. Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
ING Funds Annual Report / October 31, 1999 25
<PAGE> 28
October 31, 1999
SCHEDULE OF INVESTMENTS
ING LARGE CAP GROWTH FUND
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
------ -----
<S> <C>
COMMON STOCK -- 94.6%
ADVERTISING AGENCIES -- 2.5%
13,100 Omnicom Group Inc. $1,152,800
5,600 Young & Rubicam Inc. 256,200
----------
1,409,000
CELLULAR TELECOMMUNICATIONS -- 1.1%
7,500 Sprint Corp. (PCS Group)(1) 622,031
COMPUTER SOFTWARE -- 5.1%
31,600 Microsoft Corp.(1) 2,924,975
COMPUTERS - MEMORY DEVICES -- 3.3%
15,800 EMC Corp.(1) 1,153,400
6,600 VERITAS Software Corp.(1) 711,975
----------
1,865,375
COMPUTERS - MICRO -- 7.6%
34,600 Dell Computer Corp.(1) 1,388,325
15,100 Hewlett-Packard Co. 1,118,344
17,100 Sun Microsystems, Inc.(1) 1,809,394
----------
4,316,063
CRUISE LINES -- 0.7%
9,600 Carnival Corp. 427,200
DIVERSIFIED FINANCIAL SERVICES -- 5.9%
38,500 Citigroup Inc. 2,083,812
11,500 Morgan Stanley Dean Witter & Co. 1,268,594
----------
3,352,406
DIVERSIFIED MANUFACTURING OPERATIONS -- 7.5%
12,200 Danaher Corp. 589,412
18,400 General Electric Co. 2,494,350
4,700 Illinois Tool Works Inc. 344,275
20,600 Tyco International Ltd. 822,713
----------
4,250,750
ELECTRONIC COMPONENTS - SEMICONDUCTOR -- 3.1%
17,000 Texas Instruments Inc. 1,525,750
3,300 Xilinx, Inc.(1) 259,462
----------
1,785,212
ENTERPRISE SOFTWARE/SERVICE -- 1.0%
8,600 BMC Software, Inc.(1) 552,013
FINANCE - CREDIT CARD -- 2.8%
10,400 American Express Co. 1,601,600
FINANCE - INVESTMENT BANKER/BROKER -- 0.7%
10,000 The Charles Schwab Corp. 389,375
FOOD - WHOLESALE/DISTRIBUTION -- 1.4%
21,400 SYSCO Corp. 822,563
INSTRUMENTS - CONTROLS -- 1.5%
8,300 Honeywell Inc. 875,131
INTERNET SOFTWARE -- 2.8%
12,500 America Online, Inc.(1) 1,621,094
MEDICAL - BIOMEDICAL/GENETIC -- 0.9%
7,000 Biogen, Inc.(1) 518,875
MEDICAL - DRUGS -- 3.2%
18,600 Schering-Plough Corp. 920,700
11,100 Warner-Lambert Co. 885,919
----------
1,806,619
MEDICAL INSTRUMENTS -- 1.5%
25,100 Medtronic, Inc. $ 869,087
MEDICAL PRODUCTS -- 2.6%
14,000 Johnson & Johnson 1,466,500
MONEY CENTER BANKS -- 2.3%
30,800 The Bank of New York Co., Inc. 1,289,750
MULTI-LINE INSURANCE -- 2.9%
15,950 American International Group, Inc. 1,641,853
MULTIMEDIA -- 0.9%
6,700 Gannett Co., Inc. 516,737
NETWORKING PRODUCTS -- 4.0%
30,500 Cisco Systems, Inc.(1) 2,257,000
OIL COMPANIES - EXPLORATION & PRODUCTION -- 0.8%
7,600 Anadarko Petroleum Corp. 234,175
5,800 Apache Corp. 226,200
----------
460,375
OIL COMPANIES - INTEGRATED -- 2.0%
15,600 Exxon Corp. 1,155,375
RETAIL - APPAREL/SHOE -- 1.3%
19,550 The Gap, Inc. 725,794
RETAIL - BUILDING PRODUCTS -- 1.0%
7,600 The Home Depot, Inc. 573,800
RETAIL - CONSUMER ELECTRONICS -- 2.3%
20,500 Tandy Corp. 1,290,219
RETAIL - DISCOUNT -- 3.5%
26,400 Dollar General Corp. 696,300
22,500 Wal-Mart Stores, Inc. 1,275,469
----------
1,971,769
RETAIL - RESTAURANTS -- 2.4%
33,000 McDonald's Corp. 1,361,250
SUPER-REGIONAL BANKS - US -- 3.6%
43,100 Wells Fargo Co. 2,063,412
TELECOMMUNICATION EQUIPMENT -- 5.3%
5,800 Comverse Technology, Inc.(1) 658,300
37,000 Lucent Technologies Inc. 2,377,250
----------
3,035,550
TELEPHONE - INTEGRATED -- 7.1%
34,000 MCI WorldCom, Inc.(1) 2,917,625
22,000 SBC Communications Inc. 1,120,625
----------
4,038,250
TOTAL COMMON STOCK
(Cost -- $46,575,731) $53,857,003
REPURCHASE AGREEMENT -- 5.4%
$3,087,000 State Street Bank & Trust Co., 5.120%
due 11/1/99; Proceeds at maturity
-- $3,088,317; (Fully collateralized
by U.S. Treasury Bonds, 8.125% due
8/15/2019; Market value -- $3,152,100)
(Cost -- $3,087,000) $ 3,087,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $49,662,731)(2) $56,944,003
</TABLE>
1. Non-income producing security.
2. Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
26 ING Funds Annual Report / October 31, 1999
<PAGE> 29
ING Tax Efficient Equity Fund
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
------ -----
<S> <C>
COMMON STOCK -- 84.9%
AEROSPACE/DEFENSE - EQUIPMENT -- 1.6%
19,800 The B.F. Goodrich Co. $ 469,013
3,600 General Dynamics Corp. 199,575
3,794 United Technologies Corp. 229,537
----------
898,125
AIRLINES -- 0.8%
7,300 AMR Corp.(1) 463,550
AUTO - CARS/LIGHT TRUCKS -- 2.7%
15,000 Ford Motor Co. 823,125
10,200 General Motors Corp. 716,550
----------
1,539,675
BEVERAGES - NON-ALCOHOLIC -- 0.5%
4,900 The Coca-Cola Co. 289,100
BUILDING & CONSTRUCTION PRODUCTS - MISCELLANEOUS -- 0.2%
2,200 USG Corp. 109,038
BUILDING PRODUCTS - AIR & HEATING -- 0.7%
10,100 American Standard Cos. Inc.(1) 385,694
CHEMICALS - DIVERSIFIED -- 0.3%
3,093 E.I. du Pont de Nemours & Co. 199,305
CHEMICALS - SPECIALTY -- 0.2%
6,400 Arch Chemicals, Inc. 94,400
CIRCUITS -- 0.9%
10,000 Analog Devices, Inc.(1) 531,250
COMPUTER SOFTWARE -- 3.0%
5,700 Computer Associates International, Inc. 322,050
14,800 Microsoft Corp.(1) 1,369,925
----------
1,691,975
COMPUTERS - MEMORY DEVICES -- 0.4%
10,800 Quantum Corp. -- DLT & Storage Systems(1) 166,725
5,400 Quantum Corp. -- Hard Disk Drive Group(1) 33,075
----------
199,800
COMPUTERS - MICRO -- 3.6%
5,100 Hewlett-Packard Co. 377,719
10,600 International Business Machines Corp. 1,042,775
6,000 Sun Microsystems, Inc.(1) 634,875
----------
2,055,369
CONTAINERS - METAL/GLASS -- 0.8%
18,000 Owens-Illinois, Inc.(1) 430,875
COSMETICS & TOILETRIES -- 3.9%
10,800 Colgate-Palmolive Co. 653,400
12,000 Kimberly-Clark Corp. 757,500
7,700 The Procter & Gamble Co. 807,537
----------
2,218,437
CRUISE LINES -- 0.7%
8,000 Royal Caribbean Cruises Ltd. 424,500
DATA PROCESSING/MANAGEMENT -- 0.6%
7,200 First Data Corp. 328,950
DISTRIBUTION/WHOLESALE -- 0.5%
3,700 Costco Wholesale Corp.(1) 297,156
DIVERSIFIED FINANCIAL SERVICES -- 1.4%
15,250 Citigroup Inc. 825,406
DIVERSIFIED MANUFACTURING OPERATIONS -- 4.7%
6,200 Eaton Corp. $ 466,550
13,200 General Electric Co. 1,789,425
11,000 Tyco International Ltd. 439,312
----------
2,695,287
ELECTRONIC COMPONENTS - MISCELLANEOUS -- 1.1%
8,400 Solectron Corp.(1) 632,100
ELECTRONIC COMPONENTS - SEMICONDUCTOR -- 2.6%
10,700 Intel Corp. 828,581
7,200 Texas Instruments Inc. 646,200
----------
1,474,781
ELECTRONIC MEASURING INSTRUMENTS -- 0.4%
6,200 Teradyne, Inc.(1) 238,700
ELECTRONIC PARTS DISTRIBUTION -- 2.4%
32,600 Arrow Electronics, Inc.(1) 711,088
11,800 Avnet, Inc. 640,888
----------
1,351,976
FINANCE - CONSUMER LOANS -- 1.2%
15,400 Household International, Inc. 687,225
FINANCE - INVESTMENT BANKER/BROKER -- 0.5%
3,300 Merrill Lynch & Co., Inc. 259,050
FINANCE - MORTGAGE LOAN/BANKER -- 2.4%
12,100 Countrywide Credit Industries, Inc. 410,644
13,900 Fannie Mae 983,425
----------
1,394,069
FOOD - MISCELLANEOUS/DIVERSIFIED -- 1.5%
14,200 Bestfoods 834,250
HOME DECORATION PRODUCTS -- 0.2%
4,100 Newell Rubbermaid Inc. 141,962
INSTRUMENTS - CONTROLS -- 1.0%
12,600 Parker-Hannifin Corp. 577,238
MACHINERY - ELECTRICAL -- 0.7%
8,900 W.W. Grainger, Inc. 377,137
MACHINERY - GENERAL INSTRUMENTS -- 1.0%
6,500 Applied Materials, Inc.(1) 583,781
MACHINERY TOOLS & RELATED PRODUCTS -- 1.5%
11,400 The Black & Decker Corp. 490,200
12,400 Kennametal Inc. 356,500
----------
846,700
MEDICAL - DRUGS -- 5.8%
12,000 Abbott Laboratories 484,500
9,900 Bristol-Myers Squibb Co. 760,444
7,200 Eli Lilly & Co. 495,900
12,200 Merck & Co., Inc. 970,662
14,700 Pfizer Inc. 580,650
----------
3,292,156
MEDICAL INFORMATION SYSTEM -- 0.6%
11,600 IMS Health Inc. 336,400
MEDICAL PRODUCTS -- 3.1%
11,800 Baxter International Inc. 765,525
9,600 Johnson & Johnson 1,005,600
----------
1,771,125
</TABLE>
ING Funds Annual Report / October 31, 1999 27
<PAGE> 30
October 31, 1999
SCHEDULE OF INVESTMENTS
ING TAX EFFICIENT EQUITY FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
------ -----
<S> <C>
METAL - ALUMINUM -- 1.2%
11,000 Alcoa Inc. $ 668,250
MONEY CENTER BANKS -- 2.8%
13,000 Bank of America Corp. 836,875
9,000 The Chase Manhattan Corp. 786,375
-----------
1,623,250
MULTIMEDIA -- 1.2%
5,600 CBS Corp.(1) 273,350
6,100 Time Warner Inc. 425,094
-----------
698,444
NETWORKING PRODUCTS -- 1.3%
10,000 Cisco Systems, Inc.(1) 740,000
OIL - FIELD SERVICES -- 1.2%
9,000 Halliburton Co. 339,188
5,900 Schlumberger Ltd. 357,319
-----------
696,507
OIL COMPANIES - INTEGRATED -- 4.6%
4,500 Atlantic Richfield Co. 419,344
19,610 Conoco Inc. -- B Shares 531,921
8,200 Mobil Corp. 791,300
8,500 Texaco Inc. 521,687
11,000 Unocal Corp. 379,500
-----------
2,643,752
PAPER & RELATED PRODUCTS -- 0.9%
5,200 Bowater Inc. 273,000
4,752 International Paper Co. 250,074
-----------
523,074
POWER CONVERSION/SUPPLY EQUIPMENT -- 0.6%
14,000 American Power Conversion Corp.(1) 314,125
RETAIL - BUILDING PRODUCTS -- 1.2%
8,800 The Home Depot, Inc. 664,400
RETAIL - CONSUMER ELECTRONICS -- 0.4%
4,000 Tandy Corp. 251,750
RETAIL - DISCOUNT -- 2.0%
20,400 Consolidated Stores Corp.(1) 373,575
14,000 Wal-Mart Stores, Inc. 793,625
-----------
1,167,200
RETAIL - DRUG STORE -- 0.4%
24,200 Rite Aid Corp. 211,750
RETAIL - MAJOR DEPARTMENT STORE -- 0.6%
18,500 Saks Inc.(1) 317,969
RETAIL - RESTAURANTS -- 0.6%
8,900 McDonald's Corp. 367,125
SUPER-REGIONAL BANKS - US -- 3.6%
12,200 Bank One Corp. 458,263
9,500 First Union Corp. 405,531
15,100 Fleet Boston Corp. 658,738
19,000 KeyCorp 530,813
-----------
2,053,345
TELECOMMUNICATION EQUIPMENT -- 1.6%
11,630 Lucent Technologies Inc. 747,227
4,300 Telefonaktiebolaget LM Ericsson
Sponsored ADR 183,825
-----------
931,052
TELEPHONE - INTEGRATED -- 3.7%
8,800 AT&T Corp. 411,400
7,700 GTE Corp. 577,500
7,800 MCI WorldCom, Inc.(1) 669,338
8,600 SBC Communications Inc. 438,062
-----------
2,096,300
TELEPHONE - LOCAL -- 1.0%
8,600 Bell Atlantic Corp. $ 558,462
TOBACCO -- 0.3%
7,400 Philip Morris Cos. Inc. 186,388
TOYS -- 0.4%
15,200 Mattel, Inc. 203,300
TRANSPORTATION - AIR FREIGHT -- 0.3%
3,400 FDX Corp.(1) 146,412
TRANSPORTATION - RAIL -- 0.6%
11,500 Burlington Northern Santa Fe Corp. 366,562
TRANSPORTATION - TRUCK -- 0.9%
15,200 CNF Transportation Inc. 502,550
TOTAL COMMON STOCK
(Cost -- $41,996,976) $48,408,509
REPURCHASE AGREEMENT -- 15.1%
$8,629,000 State Street Bank & Trust Co., 5.120%
due 11/1/99; Proceeds at maturity --
$8,632,682; (Fully collateralized by
U.S. Treasury Bonds, 8.125% due
8/15/2019; Market value -- $8,804,550)
(Cost -- $8,629,000) $ 8,629,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $50,625,976)(2) $57,037,509
</TABLE>
1. Non-income producing security.
2. Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
28 ING Funds Annual Report / October 31, 1999
<PAGE> 31
ING Growth & Income Fund
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
------ -----
<S> <C>
COMMON STOCK -- 92.8%
AEROSPACE/DEFENSE -- 1.4%
5,500 AlliedSignal Inc. $ 313,156
5,000 The Boeing Co. 230,313
----------
543,469
AEROSPACE/DEFENSE - EQUIPMENT -- 1.1%
7,000 United Technologies Corp. 423,500
AIRLINES -- 0.3%
2,200 AMR Corp.(1) 139,700
AUTO/TRUCK PARTS & EQUIPMENT -- 0.6%
14,000 Delphi Automotive Systems Corp. 230,125
AUTO - CARS/LIGHT TRUCKS -- 0.7%
5,300 Ford Motor Co. 290,838
BEVERAGES - NON-ALCOHOLIC -- 1.9%
21,300 PepsiCo, Inc. 738,844
BREWERY -- 0.9%
5,100 Anheuser-Busch Cos., Inc. 366,244
BUILDING PRODUCTS - CEMENT/AGGREGATE -- 0.7%
6,000 Southdown, Inc. 289,875
BUILDING - HEAVY CONSTRUCTION -- 0.9%
9,500 Jacobs Engineering Group Inc.(1) 337,250
CHEMICALS - DIVERSIFIED -- 0.8%
2,800 The Dow Chemical Co. 331,100
COMPUTER SOFTWARE -- 4.3%
18,200 Microsoft Corp.(1) 1,684,638
COMPUTERS - MEMORY DEVICES -- 0.8%
4,500 EMC Corp.(1) 328,500
COMPUTERS - MICRO -- 4.8%
12,100 Compaq Computer Corp. 229,900
3,000 Hewlett-Packard Co. 222,187
7,400 International Business Machines Corp. 727,975
7,000 Sun Microsystems, Inc.(1) 740,687
----------
1,920,749
COSMETICS & TOILETRIES -- 1.9%
7,200 The Procter & Gamble Co. 755,100
CRUISE LINES -- 0.5%
4,500 Carnival Corp. 200,250
DISTRIBUTION/WHOLESALE -- 1.0%
4,870 Costco Wholesale Corp.(1) 391,122
DIVERSIFIED FINANCIAL SERVICES -- 2.8%
15,000 Citigroup Inc. 811,875
2,700 Morgan Stanley Dean Witter & Co. 297,844
----------
1,109,719
DIVERSIFIED MANUFACTURING OPERATIONS -- 5.7%
11,300 General Electric Co. $1,531,856
7,200 PPG Industries, Inc. 436,500
7,600 Tyco International Ltd. 303,525
----------
2,271,881
ELECTRIC - INTEGRATED -- 2.2%
16,000 Edison International 474,000
10,000 Texas Utilities Co. 387,500
----------
861,500
ELECTRONIC COMPONENTS - SEMICONDUCTOR -- 2.4%
12,500 Intel Corp. 967,969
ENTERPRISE SOFTWARE/SERVICES -- 1.7%
11,000 Compuware Corp.(1) 305,938
8,100 Oracle Corp.(1) 385,256
----------
691,194
FINANCE - MORTGAGE LOAN/BANKER -- 1.5%
8,300 Fannie Mae 587,225
FOOD - MISCELLANEOUS/DIVERSIFIED -- 2.5%
4,400 Bestfoods 258,500
10,200 Ralston-Ralston Purina Group 320,662
14,600 Sara Lee Corp. 395,113
----------
974,275
FOOD - RETAIL -- 1.0%
18,800 The Kroger Co.(1) 391,275
INTERNET SOFTWARE -- 0.7%
2,000 America Online, Inc.(1) 259,375
LIFE/HEALTH INSURANCE -- 2.1%
10,700 AXA Financial, Inc. 343,069
5,200 Lincoln National Corp. 239,850
7,500 Torchmark Corp. 233,906
----------
816,825
MACHINERY - GENERAL INDUSTRIES -- 1.3%
5,800 Applied Materials, Inc.(1) 520,913
MEDICAL - BIOMEDICAL/GENETIC -- 0.7%
3,300 Amgen Inc.(1) 263,175
MEDICAL - DRUGS -- 8.0%
13,000 American Home Products Corp. 679,250
7,000 Bristol-Myers Squibb Co. 537,687
11,500 Merck & Co., Inc. 914,969
9,100 Schering-Plough Corp. 450,450
7,200 Warner-Lambert Co. 574,650
----------
3,157,006
MEDICAL - HOSPITALS -- 0.5%
11,000 Tenet Healthcare Corp.(1) 213,812
MEDICAL PRODUCTS -- 0.9%
5,500 Baxter International Inc. 356,812
MONEY CENTER BANKS -- 2.1%
7,000 Bank of America Corp. 450,625
4,200 The Chase Manhattan Corp. 366,975
----------
817,600
</TABLE>
ING Funds Annual Report / October 31, 1999 29
<PAGE> 32
October 31, 1999
SCHEDULE OF INVESTMENTS
ING GROWTH & INCOME FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
------ -----
<S> <C>
MULTI-LINE INSURANCE -- 2.7%
11,000 The Allstate Corp. $ 316,250
7,400 American International Group, Inc. 761,737
----------
1,077,987
MULTIMEDIA -- 3.0%
3,500 Gannett Co., Inc. 269,937
5,500 The McGraw-Hill Cos., Inc. 327,937
8,600 Time Warner Inc. 599,312
----------
1,197,186
NETWORKING PRODUCTS -- 2.3%
12,200 Cisco Systems, Inc.(1) 902,800
NON-HAZARDOUS WASTE DISPOSAL -- 0.5%
20,000 Allied Waste Industries, Inc.(1) 210,000
OIL COMPANIES - INTEGRATED -- 3.8%
5,600 Chevron Corp. 511,350
7,400 Conoco Inc. -- A Shares 203,037
8,200 Mobil Corp. 791,300
----------
1,505,687
OIL - FIELD SERVICES -- 0.7%
7,000 Halliburton Co. 263,813
RETAIL - BUILDING PRODUCTS -- 1.3%
6,900 The Home Depot, Inc. 520,950
RETAIL - CONSUMER ELECTRONICS -- 0.6%
6,000 Circuit City Stores-Circuit City Group 256,125
RETAIL - DISCOUNT -- 3.0%
7,900 The TJX Cos., Inc. 214,288
17,000 Wal-Mart Stores, Inc. 963,687
----------
1,177,975
RETAIL - MAJOR DEPARTMENT STORE -- 0.5%
5,200 The May Department Stores Co. 180,375
SUPER-REGIONAL BANKS - US -- 4.5%
6,100 First Union Corp. 260,394
11,500 PNC Bank Corp. 685,688
17,000 Wells Fargo Co. 813,875
----------
1,759,957
TELECOMMUNICATION EQUIPMENT -- 1.8%
11,300 Lucent Technologies Inc. 726,025
TELEPHONE - INTEGRATED -- 5.6%
12,750 AT&T Corp. 596,063
6,500 GTE Corp. 487,500
7,800 MCI WorldCom, Inc.(1) 669,338
9,212 SBC Communications Inc. 469,236
----------
2,222,137
TELEPHONE - LOCAL -- 1.3%
11,500 BellSouth Corp. $ 517,500
TOBACCO -- 0.9%
14,500 Philip Morris Cos., Inc. 365,219
TRANSPORTATION - RAIL -- 0.4%
4,400 Burlington Northern Santa Fe Corp. 140,250
WIRELESS EQUIPMENT -- 1.2%
5,000 Motorola, Inc. 487,187
TOTAL COMMON STOCK
(Cost -- $33,017,783) $36,743,033
UNIT INVESTMENT TRUST -- 3.1%
9,000 Standard and Poor's 500 Index
Depository Receipts (Cost --
$1,065,651) $ 1,233,000
REPURCHASE AGREEMENT -- 4.1%
$1,603,000 State Street Bank & Trust Co., 5.120%
due 11/1/99; Proceeds at maturity --
$1,603,684; (Fully collateralized by
U.S. Treasury Notes, 5.500% due
7/31/2001; Market value -- $1,637,188)
(Cost -- $1,603,000) $ 1,603,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $35,686,434)(2) $39,579,033
</TABLE>
1. Non-income producing security.
2. Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
30 ING Funds Annual Report / October 31, 1999
<PAGE> 33
ING INTERNATIONAL BOND FUND
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Ratings(1) Value
------ ---------- -----
<S> <C> <C>
FOREIGN BONDS -- 75.9%
AUSTRALIA -- 4.8%
1,870,000 Queensland Treasury Corp.,
Series 05G,
6.500% due 6/14/2005(2) AAA/Aaa $ 1,189,013
AUSTRIA -- 4.2%
980,000 Austria Republic, Series
98 2, 4.300% due 7/15/2003(3) AAA/Aaa 1,020,653
BELGIUM -- 4.1%
1,000,000 Kingdom of Belgium, 6.500% due
3/25/2002(4) AAA/Aaa 1,001,890
CANADA -- 5.9%
Canadian Government:
1,440,000 5.250% due 9/1/2003(5) AAA/Aa1 953,639
550,000 5.250% due 11/5/2008(4) AAA/Aa1 497,305
-----------
1,450,944
DENMARK -- 4.3%
7,270,000 Kingdom of Denmark, 6.000% due
11/15/2002(6) AAA/Aaa 1,065,844
FINLAND -- 4.0%
930,000 Finnish Government, 4.000% due
6/21/2000(3) AA+/Aaa 982,173
FRANCE -- 7.9%
798,000 French Treasury Notes, 4.500%
due 7/12/2003(3) NR/Aaa 836,802
1,100,000 Government of France, 5.500% due
4/25/2029(3) AAA/Aaa 1,105,174
-----------
1,941,976
GERMANY -- 12.3%
Bundesobligation:
483,000 Series 121, 4.750% due 11/20/2001(3) AAA/Aaa 515,963
894,000 Series 123, 4.500% due 5/17/2002(3) AAA/Aaa 946,776
Bundesrepublic Deutschland:
894,000 Series 97, 6.000% due 7/4/2007(3) AAA/Aaa 984,329
560,000 Series 98, 5.625% due 1/4/2028(3) NR/Aaa 575,938
-----------
3,023,006
ITALY -- 11.0%
Buoni Poliennali del Tes:
840,000 3.000% due 6/15/2002(3) AA/Aa3 855,380
830,000 3.750% due 9/1/2002(3) AA/Aa3 857,763
993,997 4.500% due 5/1/2009(3) AA/Aa3 985,568
-----------
2,698,711
JAPAN -- 4.7%
150,000 Development Bank of Japan, 9.125% due
1/31/2005(7) AAA/Aa1 267,670
280,000 Japan Finance Corp. Municipal
Enterprise, 6.375% due 3/9/2004(7) AAA/Aa1 451,443
260,000 Kansai International Airport Co.,
7.375% due 9/24/2007(7)* NR/NR 442,875
-----------
1,161,988
NETHERLANDS -- 3.9%
916,000 Netherlands Government, 5.250% due
7/15/2008(3) AAA/Aaa 963,454
SPAIN -- 4.3%
1,020,000 Bonos Y Oblig del Estado, 4.500% due
7/30/2004(3) NR/Aa2 1,056,941
SWEDEN -- 3.5%
7,000,000 Swedish Government, Series 1039, 5.500%
due 4/12/2002(8) AAA/Aaa $ 861,678
UNITED KINGDOM -- 1.0%
150,000 United Kingdom Treasury, 7.000% due
11/6/2001(7) AAA/Aaa 250,826
TOTAL FOREIGN BONDS
(Cost $20,463,594) $18,669,097
U.S. GOVERNMENT AGENCIES & OBLIGATIONS -- 12.3%
300,000 Fannie Mae, Series EMTN, 6.875% due
6/7/2002(7) NR/Aaa $ 493,955
500,000 Tennessee Valley Authority, Series E,
6.750% due 11/1/2025(4) AAA/Aaa 487,400
US Treasury Notes:
1,060,000 4.625% due 11/30/2000(4) NR/NR 1,049,069
950,000 7.250% due 8/15/2004(4) NR/NR 996,906
TOTAL U.S. GOVERNMENT AGENCIES & OBLIGATIONS
(Cost -- $3,034,528) $ 3,027,330
SUPRA-NATIONAL ENTITY -- 9.6%
960,000 Asian Development Bank, 6.750% due
6/11/2007(4) AAA/Aaa $ 953,451
Inter-American Development Bank:
480,000 6.375% due 10/22/2007(4) AAA/Aaa 470,260
500,000 5.750% due 2/26/2008(4) AAA/Aaa 469,704
460,000 International Bank for
Reconstruction and Development,
7.625% due 1/19/2023(4) AAA/Aaa 477,764
TOTAL SUPRA-NATIONAL ENTITY
(Cost -- $2,453,761) $ 2,371,179
REPURCHASE AGREEMENT -- 2.2%
$529,000 State Street Bank & Trust Co., 5.120%
due 11/1/99; Proceeds at maturity --
$529,226; (Fully collateralized by U.S.
Treasury Notes, 6.875% due 5/15/2006;
Market value -- $543,405) (Cost --
$529,000) $ 529,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $26,480,883)(9) $24,596,606
</TABLE>
1. Credit ratings are provided by Standard & Poor's Rating Group and Moody's
Investors Service, Inc.
2. Security is denominated in Australian Dollar.
3. Security is denominated in EURO.
4. Security is denominated in United States Dollar.
5. Security is denominated in Canadian Dollar.
6. Security is denominated in Danish Kroner.
7. Security is denominated in British Pound.
8. Security is denominated in Swedish Kronor.
9. Aggregate cost for Federal income tax purposes is $26,645,008.
See Notes to Financial Statements.
ING Funds Annual Report / October 31, 1999 31
<PAGE> 34
October 31, 1999
SCHEDULE OF INVESTMENTS
ING GLOBAL INFORMATION TECHNOLOGY FUND
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
------ -----
<S> <C>
COMMON STOCK -- 95.9%
CANADA -- 2.4%
25,698 Nortel Networks Corp. $ 1,591,670
GERMANY -- 1.9%
1,332 SAP AG 586,990
14,879 Software AG(1) 639,261
------------
1,226,251
IRELAND -- 1.2%
38,394 CBT Group PLC Sponsored ADR(1) 791,876
JAPAN -- 8.0%
16,700 Fuji Soft ABC Inc. 1,529,539
126 NTT Data Corp. 1,993,862
2,100 SOFTBANK Corp. 872,063
18,000 Sumisho Computer Systems Corp. 966,721
------------
5,362,185
NETHERLANDS -- 4.9%
11,379 ASM Lithography Holding NV(1) 803,044
9,412 Equant NV(1) 915,664
20,473 Ordina Beheer NV 497,400
13,711 United Pan-Europe Communications NV(1) 1,054,142
------------
3,270,250
UNITED KINGDOM -- 2.6%
27,832 CMG PLC 1,074,294
51,978 SEMA Group PLC 678,198
------------
1,752,492
UNITED STATES -- 74.9%
21,183 Amdocs Ltd.(1) 589,152
13,118 America Online, Inc.(1) 1,701,241
10,258 Applied Materials, Inc.(1) 921,297
13,759 At Home Corp. -- A Shares(1) 514,243
31,224 BEA Systems, Inc.(1) 1,424,595
19,089 BMC Software, Inc.(1) 1,225,275
31,955 BroadVision, Inc.(1) 2,352,687
30,031 Cambridge Technology Partners, Inc.(1) 332,218
26,528 Cisco Systems, Inc.(1) 1,963,072
19,300 Citrix Systems, Inc.(1) 1,237,613
6,742 Computer Sciences Corp.(1) 463,091
34,830 Compuware Corp.(1) 968,709
26,664 Convergys Corp.(1) 521,614
18,295 Dell Computer Corp.(1) 734,087
5,000 DoubleClick Inc.(1) 700,000
21,309 EMC Corp.(1) 1,555,557
9,000 Gadzoox Networks, Inc.(1) 428,625
31,821 I2 Technologies, Inc.(1) 2,511,870
14,625 Inktomi Corp.(1) 1,483,523
22,504 Intel Corp. 1,742,654
13,325 International Business Machines Corp. 1,310,847
11,527 JDS Uniphase Corp.(1) 1,923,568
7,932 KLA-Tencor Corp.(1) 628,115
16,656 Lucent Technologies Inc. 1,070,148
341 MCI WorldCom, Inc.(1) 29,262
26,089 Microsoft Corp.(1) 2,414,863
9,784 Motorola, Inc. 953,329
41,045 Network Associates, Inc.(1) 751,637
24,323 New Era of Networks, Inc.(1) 788,977
36,612 Oracle Corp.(1) 1,741,358
10,099 Rambus Inc.(1) 682,945
30,034 RF Micro Devices, Inc.(1) 1,550,505
13,714 Sapient Corp.(1) 1,753,678
10,628 SCM Microsystems, Inc.(1) 502,173
16,343 Siebel Systems, Inc.(1) 1,794,666
22,124 Sun Microsystems, Inc.(1) 2,340,996
18,454 Teradyne, Inc.(1) 710,479
9,836 Texas Instruments Inc. 882,781
17,963 Unisys Corp.(1) 435,603
21,212 VERITAS Software Corp.(1) 2,288,245
19,258 Whittman-Hart, Inc.(1) 740,229
7,699 Yahoo! Inc.(1) 1,378,602
------------
50,044,129
TOTAL COMMON STOCK
(Cost -- $44,524,656) $ 64,038,853
REPURCHASE AGREEMENT -- 4.1%
$2,745,000 State Street Bank & Trust Co.,
5.120% due 11/1/99; Proceeds at
maturity -- $2,746,171; (Fully
collateralized by U.S. Treasury
Bonds, 8.125% due 8/15/2019;
Market value -- $2,802,525)
(Cost -- $2,745,000) $ 2,745,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $47,269,656)(2) $ 66,783,853
</TABLE>
1. Non-income producing security.
2. Aggregate cost for Federal income tax purposes is substantially the same.
ADR -- American Depository Receipts.
See Notes to Financial Statements.
32 ING Funds Annual Report / October 31, 1999
<PAGE> 35
ING EUROPEAN EQUITY FUND
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
------ -----
<S> <C>
FOREIGN STOCKS -- 98.5%
AUSTRIA -- 0.5%
2,910 Bank Austria AG $ 144,674
BELGIUM -- 0.8%
355 Electrabel SA 117,089
2,751 KBC Bancassurance Holding NV 141,775
-----------
258,864
DENMARK -- 0.7%
749 Den Danske Bank Group 85,319
2,566 ISS International Service System
A/S -- B Shares(1) 137,614
-----------
222,933
FINLAND -- 4.1%
37,191 Merita PLC 215,527
7,419 Metso Oyj(1) 83,882
6,477 Nokia Oyj 741,234
6,717 UPM-Kymmene Oyj 211,938
-----------
1,252,581
FRANCE -- 15.1%
590 Accor SA 132,794
1,189 Air Liquide SA 183,203
1,519 Alcatel SA 237,245
5,875 Alstom SA 177,956
2,308 Axa SA 325,520
2,226 Banque Nationale de Paris 195,490
1,487 Cap Gemini SA 225,209
2,956 Carrefour SA 547,179
9 Elf Aquitaine SA 1,325
2,139 Lafarge SA 205,847
145 L'Oreal SA 96,764
1,141 Louis Vuitton Moet Hennessy 344,414
3,923 Rhone-Poulenc SA 219,504
5,400 Sanofi-Synthelabo SA(1) 238,253
2,627 Schneider Electric SA 180,973
990 Societe Generale -- A Shares 215,535
711 Suez Lyonnaise des Eaux SA 114,786
4,350 Total Fina SA 587,902
9,305 Usinor SA 129,280
3,125 Vivendi SA 236,808
-----------
4,595,987
GERMANY -- 12.1%
1,058 Allianz AG -- Registered Shares 322,142
6,205 Bayer AG 253,866
335 Celanese AG(1) 5,296
3,161 DaimlerChrysler AG -- Registered Shares 246,019
3,721 Deutsche Bank AG -- Registered Shares 266,905
5,474 Deutsche Telekom AG 251,593
910 Fresenius AG Preferred 148,828
3,357 Hoechst AG 147,761
2,220 HypoVereinsbank 145,697
2,792 Mannesmann AG 439,005
3,151 Metro AG 169,349
968 Muenchener Rueckversicherungs-
Gesellschaft AG -- Registered Shares 221,945
917 SAP AG 340,646
983 Schering AG 116,931
2,146 Siemens AG 192,640
8,010 Thyssen Krupp AG(1) 189,552
4,343 Veba AG 234,782
-----------
3,692,957
GREECE -- 0.5%
1,842 Alpha Credit Bank SA 140,830
IRELAND -- 0.7%
7,634 Bank of Ireland $ 59,335
1,100 CRH PLC (Dublin) 20,767
6,893 CRH PLC (London) 130,024
-----------
210,126
ITALY -- 4.3%
5,410 Assicurazioni Generali 173,544
50,770 Banca di Roma 68,349
35,156 Banca Nazionale del Lavoro S.p.A.(1) 119,061
33,247 ENI S.p.A. 194,420
7,910 La Rinascente S.p.A. 54,908
13,667 La Rinascente S.p.A. RNC 50,310
14,980 Riunione Adriatica di Sicurta S.p.A. 138,173
3,967 Rolo Banca 1473 S.p.A. 81,360
10,319 San Paolo-IMI S.p.A. 133,709
19,911 Telecom Italia Mobile S.p.A. 124,392
15,464 Telecom Italia S.p.A. 75,954
18,957 UniCredito Italiano S.p.A. 88,724
-----------
1,302,904
NETHERLANDS -- 8.3%
15,304 ABN AMRO Holding NV 370,047
3,991 Aegon NV 368,334
1,906 Akzo Nobel NV 82,070
1,915 Equant NV(1) 186,304
15,052 Fortis (NL) NV 518,147
3,050 Heineken Holding NV -- A Shares 110,670
3,991 Koninklijke Ahold NV 122,568
5,823 Koninklijke Nedlloyd NV 162,601
3,003 Koninklijke Numico NV 122,388
1,127 Koninklijke (Royal) Philips
Electronics NV 115,569
2,749 Koninklijke KPN NV 141,065
1,050 STMicroelectronics NV 92,212
3,806 Wolters Kluwer NV 127,174
-----------
2,519,149
PORTUGAL -- 1.3%
26,655 BPI-SGPS, SA -- Registered Shares 106,531
4,877 Electricidade de Portugal SA 75,812
4,530 Portugal Telecom SA -- Registered
Shares 202,012
-----------
384,355
SPAIN -- 2.7%
3,518 Argentaria, Caja Postal y Banco
Hipotecario de Espana SA 78,071
19,266 Banco Santander Central Hispano SA 199,996
9,296 Endesa SA 186,058
22,218 Telefonica SA 365,472
-----------
829,597
SWEDEN -- 2.4%
9,034 Skandia Forsakrings AB 201,000
12,606 Telefonaktiebolaget LM Ericsson --
B Shares 524,164
-----------
725,164
</TABLE>
ING Funds Annual Report / October 31, 1999 33
<PAGE> 36
OCTOBER 31, 1999
SCHEDULE OF INVESTMENTS
ING EUROPEAN EQUITY FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
------ -----
<S> <C>
SWITZERLAND -- 10.6%
2,833 ABB Ltd.(1) $ 282,094
236 Adecco SA -- Registered Shares 143,096
240 Clariant AG -- Registered Shares 105,046
129 Compagnie Financiere Richemont AG -- A Unit 246,504
1,359 Credit Suisse Group -- Registered Shares 261,295
26 Kuoni Reisen Holding AG -- Registered Shares 110,900
248 Nestle SA -- Registered Shares 478,457
279 Novartis AG -- Registered Shares 417,429
58 Roche Holding AG 696,502
89 Schweizerische Rueckversicherungs-
Gesellschaft -- Registered Shares 184,553
1,059 UBS AG -- Registered Shares 308,200
-----------
3,234,076
UNITED KINGDOM -- 34.4%
5,469 Abbey National PLC 106,858
12,900 Alliance & Leicester PLC 188,137
27,286 Allied Zurich PLC 331,136
6,203 AstraZeneca Group PLC 279,604
9,415 Bank of Scotland 117,430
10,481 Barclays PLC 321,561
16,654 Bass PLC 181,994
16,816 BBA Group PLC 117,029
51,162 BG PLC 283,961
67,954 BP Amoco PLC 659,962
33,410 British Telecommunications PLC 606,399
8,660 Cable & Wireless PLC 101,253
24,476 Cadbury Schweppes PLC 159,679
14,248 CGU PLC 207,914
12,936 Compass Group PLC 139,238
21,159 Diageo PLC 214,882
23,458 General Electric Co. PLC 256,540
7,973 GKN PLC 127,810
15,758 Glaxo Wellcome PLC 465,076
22,506 The Great Universal Stores PLC 170,866
13,369 Hays PLC 152,906
34,230 HSBC Holdings PLC 422,157
38,412 Invensys PLC 189,052
18,342 J. Sainsbury PLC 110,091
12,000 Kingfisher PLC 131,234
27,918 Lloyds TSB Group PLC 385,831
27,963 Marks & Spencer PLC 128,779
9,955 National Power PLC 67,317
2,940 Orange PLC(1) 73,146
12,128 Pearson PLC 270,848
14,785 Prudential PLC 231,907
6,305 Railtrack Group PLC 128,891
24,827 Reed International PLC 145,140
19,652 Rentokil Initial PLC 65,557
16,526 ScottishPower PLC 153,166
102,612 Shell Transport & Trading Co. PLC 786,623
44,777 SmithKline Beecham PLC 576,883
78,951 Tesco PLC 234,181
5,783 Thames Water PLC 83,438
37,658 Unilever PLC 349,332
157,785 Vodafone AirTouch PLC 736,378
-----------
10,460,186
TOTAL FOREIGN STOCKS
(Cost -- $28,227,048) $29,974,383
REPURCHASE AGREEMENT -- 1.5%
$453,000 State Street Bank & Trust Co., 5.120%
due 11/1/99; Proceeds at maturity -- $453,193;
(Fully collateralized by U.S. Treasury Bonds,
8.125% due 8/15/2019; Market value -- $462,150)
(Cost -- $453,000) $ 453,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $28,680,048)(2) $30,427,383
</TABLE>
1. Non-income producing security.
2. Aggregate cost for Federal income tax purposes is $28,789,354.
See Notes to Financial Statements.
34 ING Fund Annual Report / October 31, 1999
<PAGE> 37
ING INTERNATIONAL EQUITY FUND
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
------ -----
<S> <C>
FOREIGN STOCKS -- 95.8%
AUSTRALIA -- 1.1%
12,300 Broken Hill Proprietary Co. Ltd. $ 127,143
7,700 Rio Tinto Ltd. 123,793
27,100 Telstra Corp. Ltd. 137,878
-----------
388,814
FINLAND -- 1.9%
5,780 Nokia Oyj 661,469
FRANCE -- 13.0%
850 Accor SA 191,313
3,340 Banque Nationale de Paris 293,323
3,870 Canal Plus 268,638
1,310 Carrefour SA 242,492
1,450 Castorama Dubois Investisse 434,331
1,280 Christian Dior SA 229,130
12 Elf Aquitaine SA 1,767
5,150 France Telecom SA 497,507
2,810 Groupe GTM SA 307,364
2,930 Lafarge SA 281,969
2,650 Societe Generale -- A Shares 576,938
830 Societe Television Francaise 1 260,140
4,655 Total Fina SA 629,123
15,590 Usinor SA 216,602
-----------
4,430,637
GERMANY -- 10.2%
840 Allianz AG -- Registered Shares 255,765
7,560 BASF AG(1) 339,915
4,448 Deutsche Bank AG -- Registered Shares 319,052
15,160 Deutsche Telekom AG 696,776
6,080 Dresdner Bank AG 311,739
1,930 HypoVereinsbank 126,664
3,180 Mannesmann AG 500,013
430 SAP AG 189,494
6,310 Siemens AG 566,429
3,040 Veba AG 164,342
-----------
3,470,189
HONG KONG -- 0.5%
218,000 Cosco Pacific Ltd. 161,353
HUNGARY -- 0.6%
7,050 Magyar Tavkozlesi Rt Sponsored ADR 203,128
INDIA -- 1.2%
16,600 Mahanagar Telephone Nigam Ltd. GDR(1)(2) 136,950
17,600 Videsh Sanchar Nigam Ltd. Sponsored GDR(3) 284,909
-----------
421,859
INDONESIA -- 0.3%
14,500 PT Tambang Timah Tbk GDR -- Registered Shares 110,925
ISRAEL -- 0.2%
5,100 Partner Communications Co. Ltd. ADR(1) 80,325
ITALY -- 2.5%
39,790 Autostrade Concessioni e Costruzioni
Autostrade S.p.A. 300,058
54,140 ENI S.p.A. 316,596
17,760 San Paolo -- IMI S.p.A. 230,126
-----------
846,780
JAPAN -- 19.5%
20,000 The Bank of Tokyo-Mitsubishi, Ltd. $ 331,447
14,000 Canon, Inc. 396,087
36 East Japan Railway Co. 220,620
32,000 Fuji Heavy Industries Ltd. 271,910
8,000 Fuji Photo Film Co. 257,025
40,000 Hitachi Ltd. 432,339
16 Japan Tobacco, Inc. 176,465
5,000 Kyocera Corp. 479,524
12,000 Marui Co., Ltd. 226,719
17,000 Matsushita Electric Industrial Co., Ltd. 357,869
40,000 Mitsubishi Corp. 287,715
81,000 Mitsubishi Heavy Industries Ltd. 317,723
160,000 The Mitsui Trust & Banking Co., Ltd. 497,171
43 Nippon Telegraph & Telephone Corp. 659,825
3,600 Promise Co., Ltd. 241,680
7,000 Sankyo Co., Ltd. 199,386
25,000 Sekisui House Ltd. 270,692
29,000 The Tokio Marine & Fire Insurance Co. Ltd. 379,639
16,000 Toyota Motor Corp. 553,946
15,000 Yamaha Corp. 100,700
-----------
6,658,482
MEXICO -- 0.9%
4,300 Grupo Televisa SA Sponsored GDR 182,750
7,200 Panamerican Beverages, Inc. -- A Shares 115,650
-----------
298,400
NETHERLANDS -- 4.6%
3,710 Equant NV(1) 360,934
3,673 Koninklijke Philips Electronics NV 376,650
8,910 Royal Dutch Petroleum Co. 532,559
11,730 TNT Post Group NV 298,556
-----------
1,568,699
PERU -- 0.6%
11,900 Southern Peru Copper Corp. 193,375
RUSSIA -- 0.5%
21,000 Surgutneftegaz Sponsored ADR 174,825
SINGAPORE -- 2.9%
38,000 Keppel Corp. Ltd. 103,302
32,550 Oversea-Chinese Banking Corp. Ltd. 244,707
23,000 Singapore Airlines Ltd. 242,076
12,000 Singapore Press Holdings Ltd. 205,690
100,000 Singapore Telecommunications Ltd. 190,052
-----------
985,827
SOUTH AFRICA -- 0.4%
17,500 Sappi Ltd. 145,014
SOUTH KOREA -- 1.6%
7,300 Korea Telecom Corp. Sponsored ADR(1) 257,325
2,900 Samsung Electronics Sponsored GDR(2) 169,650
8,000 SK Telecom Co. Ltd. ADR 105,800
-----------
532,775
SPAIN -- 4.2%
8,280 Argentaria, Caja Postal y Banco Hipotecario
de Espana, SA 183,749
40,964 Banco Santander Central Hispano SA 425,238
8,410 Endesa SA 168,325
16,870 Repsol SA 347,763
17,567 Telefonica SA(1) 288,966
-----------
1,414,041
SWEDEN -- 1.8%
14,880 Skandinaviska Enskilda Banken -- A Shares 152,871
11,020 Telefonaktiebolaget LM Ericsson -- B Shares 458,218
-----------
611,089
</TABLE>
ING Fund Annual Report / October 31, 1999 35
<PAGE> 38
OCTOBER 31, 1999
SCHEDULE OF INVESTMENTS
ING INTERNATIONAL EQUITY FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
------ -----
<S> <C>
SWITZERLAND -- 7.9%
3,916 ABB Ltd.(1) $ 394,452
640 Adecco SA -- Registered Shares 388,057
170 Compagnie Financiere Richemont AG -- A Unit 324,851
1,380 Credit Suisse Group -- Registered Shares 265,332
200 Novartis AG -- Registered Shares 299,232
1,010 Oerlikon-Buehrle Holding AG -- Registered Shares 152,438
850 PubliGroupe SA 623,597
790 UBS AG -- Registered Shares 229,913
-----------
2,677,872
TAIWAN -- 0.0%
458 China Steel Corp. Sponsored GDR 7,797
TURKEY -- 0.7%
2,236,400 Akbank TAS 34,888
23,818,200 Turkiye Garanti Bankasi AS 203,121
-----------
238,009
UNITED KINGDOM -- 18.2%
49,000 Arjo Wiggins Appleton PLC 171,310
7,500 AstraZeneca Group PLC 338,068
43,000 Avis Europe PLC 184,427
9,700 Barclays PLC 297,600
37,000 Barratt Developments PLC 143,493
35,640 BG PLC 197,811
85,600 BP Amoco PLC 831,338
24,000 British Telecommunications PLC 435,606
14,500 CGU PLC 211,591
10,700 Dixons Group PLC 189,724
8,400 GKN PLC 134,655
14,600 Glaxo Wellcome PLC 430,899
14,030 Hammerson PLC 103,634
13,000 Hays PLC 148,686
37,400 HSBC Holdings PLC 461,253
14,000 Imperial Tobacco Group PLC 148,850
85,500 Laporte PLC -- B Shares(1) 1,229
25,900 Lloyds TSB Group PLC 357,942
10,000 Logica PLC 154,388
17,550 Millennium & Copthorne Hotels PLC 120,118
10,000 The Peninsular & Oriental Steam Navigation Co. 143,131
14,000 Scottish & Newcastle PLC 130,330
16,650 Trinity Mirror PLC 153,632
118,500 Vodafone AirTouch PLC 553,036
13,100 WPP Group PLC 143,587
-----------
6,186,338
VENEZUELA -- 0.5%
7,000 Compania Anonima Nacional Telefonos
de Venezuela ADR 180,688
TOTAL FOREIGN STOCKS
(Cost -- $29,429,446) $32,648,710
REPURCHASE AGREEMENT -- 4.2%
$1,449,000 State Street Bank & Trust Co., 5.120%
due 11/1/99; Proceeds at maturity -- $1,449,518;
(Fully collateralized by U.S. Treasury Bonds,
8.125% due 8/15/2019; Market value -- $1,481,250)
(Cost -- $1,449,000) $ 1,449,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $30,878,446)(3) $34,097,710
</TABLE>
1. Non-income producing security.
2. Security is exempt from registration under Rule 144a of the Securities Act
of 1933. This security may be resold in transactions that are exempt from
registration, normally to qualified institutional buyers. Rule 144a
securities amounted to $591,509 in market value or 1.8% of net assets.
3. Aggregate cost for Federal inome tax purposes is $30,966,727.
ADR -- American Depository Receipts.
GDR -- Global Depository Receipts.
ING GLOBAL BRAND NAMES FUND
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
------ -----
<S> <C>
COMMON STOCK -- 99.0%
AUSTRALIA -- 2.2%
409,100 Foster's Brewing Group Ltd. $ 1,087,531
FINLAND -- 7.0%
29,790 Nokia Oyj 3,409,196
FRANCE -- 7.6%
3,450 L'Oreal SA 2,302,308
4,730 Louis Vuitton Moet Hennessy 1,427,762
-----------
3,730,070
GERMANY -- 1.9%
4,900 Adidas-Salomon AG 354,566
10,050 Volkswagen AG 594,039
-----------
948,605
JAPAN -- 6.8%
16,000 Canon, Inc. 452,671
11,000 Fuji Photo Film Co. Ltd. 353,409
12,000 Honda Motor Co., Ltd. 506,378
9,800 Sony Corp. 1,528,225
14,000 Toyota Motor Corp. 484,703
-----------
3,325,386
NETHERLANDS -- 9.0%
11,400 Gucci Group NV -- NY Registered Shares 920,550
45,900 Heineken NV 2,340,871
17,176 Unilever NV -- Share Certificates 1,138,086
-----------
4,399,507
SWEDEN -- 2.8%
33,000 Telefonaktiebolaget LM Ericsson -- B Shares 1,372,158
SWITZERLAND -- 2.5%
640 Nestle SA 1,234,727
UNITED STATES -- 59.2%
2,330 America Online, Inc.(1) 302,172
11,400 American Express Co. 1,755,600
47,600 The Coca-Cola Co. 2,808,400
28,800 Colgate-Palmolive Co. 1,742,400
73,950 Compaq Computer Corp. 1,405,050
15,850 Ford Motor Co. 869,769
32,400 The Gillette Co. 1,172,475
31,250 Intel Corp. 2,419,922
17,100 Johnson & Johnson 1,791,225
22,050 Mattel, Inc. 294,919
43,000 McDonald's Corp. 1,773,750
28,050 Microsoft Corp.(1) 2,596,378
10,650 NIKE, Inc. -- B Shares 601,059
37,150 The Pepsi Bottling Group, Inc. 675,666
36,800 The PepsiCo, Inc. 1,276,500
32,650 Philip Morris Cos. Inc. 822,372
12,950 The Procter & Gamble Co. 1,358,131
38,850 Time Warner Inc. 2,707,359
51,150 The Walt Disney Co. 1,349,081
15,500 Wm. Wrigley Jr. Co. 1,239,031
-----------
28,961,259
TOTAL COMMON STOCK
(Cost -- $44,220,841) $48,468,439
</TABLE>
See Notes to Financial Statements.
36 ING Fund Annual Report / October 31, 1999
<PAGE> 39
ING GLOBAL BRAND NAMES FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Value
------ -----
<S> <C>
PREFERRED STOCK -- 0.2%
15,150 Unilever NV Cumulative Preferred Shares
(Cost -- $91,421) $ 79,989
REPURCHASE AGREEMENT -- 0.8%
$411,000 State Street Bank & Trust Co., 5.120%
due 11/1/99; Proceeds at maturity -- $411,175;
(Fully collateralized by U.S. Treasury Notes,
8.000% due 5/15/2001; Market value -- $421,860)
(Cost -- $411,000) $ 411,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $44,723,262)(2) $48,959,428
</TABLE>
1. Non-income producing security.
2. Aggregate cost for Federal income tax purposes is $44,726,020.
See Notes to Financial Statements.
ING HIGH YIELD BOND FUND
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Ratings(1) Value
------ ---------- -----
<S> <C> <C>
U.S. GOVERNMENT OBLIGATION -- 4.4%
$1,500,000 U.S. Treasury Notes,
6.250% due 2/15/2007
(Cost -- $1,487,683) NR/NR $ 1,507,500
CORPORATE BONDS -- 90.8%
AIRLINES -- 1.4%
500,000 Amtran, Inc., Senior Notes,
9.625% due 12/15/2005 B+/B2 $ 471,250
BROADCASTING SERVICE/PROGRAM -- 2.9%
1,000,000 Echostar DBS Corp.,
Senior Notes,
9.250% due 2/1/2006 B/B2 995,000
BUILDING - RESIDENTIAL/COMMERCIAL -- 3.2%
1,250,000 Del E. Webb Corp.,
Senior Subordinated Debentures,
10.250% due 2/15/2010 B-/B2 1,126,563
CABLE TV -- 10.4%
1,500,000 CSC Holdings, Inc., Series M,
Payment-in-Kind Preferred Bonds,
11.125% due 4/1/2008 B+/B2 1,620,000
500,000 Lenfest Communications, Inc.,
Senior Notes,
8.375% due 11/1/2005 BB+/Ba2 515,000
500,000 Rogers Cablesystems Inc.,
Series B, Senior Notes,
10.000% due 3/15/2005 BB+/Ba3 537,500
1,000,000 Telewest Communications PLC,
Debentures, Step Coupon to
11.000% due 10/1/2007 B+/B1 913,750
-----------
3,586,250
CASINO HOTELS -- 3.3%
1,125,000 Boyd Gaming Corp.,
Senior Notes,
9.250% due 10/1/2003 BB-/Ba3 1,127,813
CELLULAR TELECOMMUNICATIONS -- 5.4%
1,000,000 Orange PLC, Senior Notes,
8.750% due 6/1/2006(2) BB-/Ba3 1,030,000
Rogers Cantel, Inc.:
500,000 Debentures,
9.375% due 6/1/2008 BB+/Ba3 522,500
300,000 Senior Subordinated Notes,
8.800% due 10/1/2007 BB-/B2 302,625
-----------
1,855,125
CHEMICALS - DIVERSIFIED -- 1.5%
500,000 Lyondell Chemical Co.,
Series B, Senior Notes,
9.875% due 5/1/2007 BB/Ba3 500,000
CONTAINERS - PAPER/PLASTIC -- 0.7%
250,000 Norampac Inc, Senior Notes,
9.500% due 2/01/2008 BB/B2 256,250
DIVERSIFIED MANUFACTURING OPERATION -- 1.5%
500,000 Blount Inc.,
Senior Subordinated Notes,
13.000% due 8/1/2009(2) B-/B3 513,750
FIBER OPTICS -- 3.0%
1,000,000 Williams Communications
Group, Inc., Senior Notes,
10.700% due 10/1/2007 BB-/B2 1,036,250
</TABLE>
ING Funds Annual Report / October 31, 1999 37
<PAGE> 40
OCTOBER 31, 1999
SCHEDULE OF INVESTMENTS
ING HIGH YIELD BOND FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Ratings(1) Value
------ ---------- -----
<S> <C> <C>
FINANCE -- 0.8%
$250,000 RBF Finance Co.,
Senior Notes,
11.375% due 3/15/2009 BB-/Ba3 $ 264,375
FOOD - RETAIL -- 2.9%
1,000,000 The Kroger Co., Senior Notes,
7.625% due 9/15/2006 BBB-/Baa3 1,008,356
HOME FURNISHINGS -- 1.4%
500,000 Sleepmaster LLC,
Senior Subordinated Notes,
11.000% due 5/15/2009(2) B-/B3 497,500
MEDICAL - HOSPITALS -- 2.6%
500,000 Rural/Metro Corp.,
Senior Notes,
7.875% due 3/15/2008 BB-/Ba3 417,500
500,000 Tenet Healthcare Corp.,
Senior Notes,
8.625% due 12/01/2003 BB+/Ba1 491,640
-----------
909,140
MISCELLANEOUS MANUFACTURER -- 3.5%
250,000 Advanced Glassfiber Yarns LLC,
Senior Subordinated Notes,
9.875% due 1/15/2009 B/B2 228,750
Westinghouse Air Brake:
750,000 Series B2, Senior Notes,
9.375% due 6/15/2005 B+/Ba3 746,250
250,000 Senior Notes,
9.375% due 6/15/2005 B+/Ba3 248,750
-----------
1,223,750
MULTIMEDIA -- 1.4%
500,000 Ackerley Group, Inc., Series B,
Senior Subordinated Notes,
9.000% due 1/15/2009 B/B2 483,750
NON-HAZARDOUS WASTE DISPOSAL -- 1.2%
500,000 Allied Waste North America,
Senior Subordinated Notes,
10.000% due 8/1/2009(2) B+/B2 425,625
OIL COMPANY - EXPLORATION & PRODUCTION -- 2.8%
1,000,000 Nuevo Energy Co.,
Senior Subordinated Notes,
9.500% due 6/1/2008(2) B+/B1 985,000
RACETRACKS -- 3.5%
250,000 Hollywood Park, Inc., Series B,
Senior Subordinated Notes,
9.250% due 2/15/2007 B/B2 243,125
1,000,000 Speedway Motorsports, Inc.,
Series D, Senior Subordinated
Notes, 8.500% due 8/15/2007 B+/Ba3 965,000
-----------
1,208,125
RADIO -- 10.7%
1,000,000 Chancellor Media Corp., Series B,
Senior Subordinated Notes,
8.125% due 12/15/2007 B/B1 985,000
Spanish Broadcasting System, Inc.:
1,000,000 Senior Subordinated Notes,
9.625% due 11/1/2009 B-/B3 1,006,250
1,606,875 Series A, Payment-in-Kind Preferred
Bonds, 14.250% due 3/15/2005 CCC/NR 1,719,356
-----------
3,710,606
RENTAL AUTO/EQUIPMENT -- 1.3%
$500,000 Budget Group, Inc., Senior Notes,
9.125% due 4/1/2006 BB-/B1 $ 435,000
RETAIL - DISCOUNT -- 2.8%
1,000,000 Ames Department Stores, Inc.,
Senior Notes,
10.000% due 4/15/2006 B+/B2 980,000
TELECOMMUNICATION SERVICES -- 13.8%
Global Crossing Holdings, Ltd.:
500,000 Payment-in-Kind Preferred Bonds,
10.500% due 12/1/2008 B+/B1 528,750
1,000,000 Senior Notes,
9.625% due 5/15/2008 BB/Ba2 1,020,000
2,000,000 Hyperion Telecommunications, Inc.,
Series B, Senior Discount
Notes, Step Coupon to
13.000% due 4/15/2003 B+/B3 1,725,000
1,000,000 Insight Midwest LP, Senior Notes,
9.750% due 10/01/2009(2) B+/B1 1,032,500
500,000 ITC DeltaCom, Inc., Senior Notes,
8.875% due 3/1/2008 B/B2 477,500
-----------
4,783,750
TELEPHONE - INTEGRATED -- 3.1%
1,000,000 NEXTLINK Communications, Inc.,
Senior Notes,
12.500% due 4/15/2006 B/B3 1,067,500
TRANSPORTATION - MARINE -- 2.9%
1,000,000 Sea Containers Ltd., Senior Notes,
10.750% due 10/15/2006(2) BB-/Ba3 1,000,000
TRANSPORTATION - SERVICES -- 2.8%
1,000,000 RailWorks Corp.,
Senior Subordinated Notes,
11.500% due 4/15/2009(2) B/B3 980,000
TOTAL CORPORATE BONDS
(Cost -- $31,724,120) $31,430,728
REPURCHASE AGREEMENT -- 4.8%
$1,669,000 State Street Bank & Trust Co., 5.120% due
11/1/1999; Proceeds at maturity -- $1,669,712;
(Fully collateralized by U.S. Treasury Notes,
5.500% due 7/31/2001; Market value --
$1,702,675) (Cost -- $1,669,000) $ 1,669,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $34,880,803)(3) $34,607,228
</TABLE>
1. Credit ratings are provided by Standard & Poor's Rating Group and Moody's
Investors Service, Inc.
2. Security is exempt from registration under Rule 144a of the Securities Act
of 1933. This security may be resold in transactions that are exempt from
registration, normally to qualified institutional buyers. Rule 144a
securities amounted to $6,464,375 in market value or 18.7% of net assets.
3. Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
38 ING Funds Annual Report / October 31, 1999
<PAGE> 41
ING INTERMEDIATE BOND FUND
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Ratings(1) Value
------ ---------- -----
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 14.5%
U.S. Treasury Notes:
$1,000,000 6.250% due 6/30/2002 NR/NR $ 1,008,750
930,000 6.250% due 8/31/2002 NR/NR 938,718
500,000 6.000% due 8/15/2004 NR/NR 501,250
U.S. Treasury Bonds:
225,000 9.125% due 5/15/2018 NR/NR 287,859
2,310,000 5.250% due 2/15/2029 NR/NR 1,998,873
500,000 6.125% due 8/15/2029 NR/NR 498,125
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost -- $5,208,330) $ 5,233,575
U.S. GOVERNMENT AGENCIES -- 4.0%
1,000,000 Federal Home Loan Bank,
5.125% due 9/15/2003 NR/Aaa $ 956,985
500,000 Tennessee Valley Authority,
Series C, 6.000% due 3/15/2013 NR/Aaa 468,793
-----------
TOTAL U.S. GOVERNMENT AGENCIES
(Cost -- $1,531,129) $ 1,425,778
CORPORATE BONDS -- 75.8%
AEROSPACE/DEFENSE -- 2.6%
1,000,000 Raytheon Co., Senior Notes,
5.700% due 11/1/2003 BBB/Baa1 $ 944,400
CABLE TV -- 8.2%
500,000 CSC Holdings, Inc.,
Series M, Payment-in-Kind
Preferred Bonds,
11.125% due 4/1/2008 B+/B2 540,000
700,000 Jones Intercable, Inc.,
Senior Notes,
7.625% due 4/15/2008 BBB-/Baa3 696,075
1,000,000 Lenfest Communications, Inc.,
Senior Notes,
8.375% due 11/1/2005 BB+/Ba2 1,030,000
750,000 Telewest Communications PLC,
Debentures, Step Coupon to
11.000% due 10/1/2007 B+/B1 685,312
-----------
2,951,387
CELLULAR TELECOMMUNICATIONS -- 2.9%
1,000,000 Rogers Cantel, Inc., Debentures,
9.375% due 6/1/2008 BB+/Ba3 1,045,000
COMMERCIAL BANKS -- 5.5%
1,000,000 National Bank of Canada NY,
Subordinated Notes,
7.750% due 11/1/2009 A-/A2 1,009,325
1,000,000 Popular, Inc., Series 3,
Medium Term Notes,
6.200% due 4/30/2001 BBB+/A3 989,161
-----------
1,998,486
DIVERSIFIED FINANCIAL SERVICES -- 2.7%
1,000,000 Finova Capital Corp., Notes,
6.250% due 8/15/2000 A-/Baa1 998,313
ELECTRIC - DISTRIBUTION -- 2.7%
1,000,000 AES Eastern Energy LP,
Pass Through Certificates,
9.000% due 1/2/2017(2) BBB-/Ba1 955,880
ELECTRIC - INTEGRATED -- 2.4%
1,000,000 Texas-New Mexico Power Co.,
Senior Notes,
6.250% due 1/15/2009 BBB/Baa2 872,955
FIBER OPTICS -- 2.9%
$1,000,000 Williams Communications
Group, Inc., Senior Notes,
10.700% due 10/1/2007 BB-/B2 $ 1,036,250
FINANCE - AUTO LOANS -- 2.7%
1,000,000 Ford Motor Credit Co., Notes,
5.125% due 10/15/2001 A/A1 974,172
FINANCE - INVESTMENT BANKER/BROKER -- 2.8%
1,000,000 Lehman Brothers Holdings Inc.,
Series E, Medium Term Notes,
6.900% due 1/29/2001 A/A3 1,001,708
FINANCE - OTHER SERVICES -- 2.7%
1,000,000 Newcourt Credit Group Inc.,
Notes, 6.875% due 2/16/2005(2) BBB/A1 990,624
INVESTMENT COMPANIES -- 2.8%
1,000,000 Garanti Trade Payment Rights
Master Trust, Series 1999-B
Class 1, 10.810% due 6/15/2004(2) NR/NR 998,438
MISCELLANEOUS MANUFACTURER -- 2.8%
1,000,000 Westinghouse Air Brake Co.,
Senior Notes,
9.375% due 6/15/2005 B+/Ba3 995,000
MULTI-LINE INSURANCE -- 2.8%
1,000,000 Royal & Sun Alliance Insurance
Group PLC, Subordinate Notes,
8.950% due 10/15/2029(2) A/A1 999,329
NON-HAZARDOUS WASTE DISPOSAL -- 1.3%
500,000 WMX Technologies, Inc.,
Notes, 6.250% due 10/15/2000 BBB/Ba1 481,648
REITS - HEALTH CARE -- 2.7%
1,000,000 HRPT Properties Trust,
Series A, Senior Notes,
6.750% due 12/18/2002 BBB/Baa2 966,825
RETAILS - DISCOUNT -- 3.5%
250,000 Ames Department Stores, Inc.,
Senior Notes,
10.000% due 4/15/2006 B+/B2 245,000
1,000,000 Wal-Mart Stores, Inc.,
Senior Notes,
6.875% due 8/10/2009 AA/Aa2 1,005,636
-----------
1,250,636
RETAILS - DRUG STORE -- 2.3%
1,000,000 Rite Aid Corp., Notes,
5.500% due 12/15/2000(2) BB/Ba2 815,000
TELECOMMUNICATION SERVICES -- 6.1%
1,000,000 Cincinnati Bell Telephone Co.,
Debentures,
6.300% due 12/1/2028 AA-/A2 842,685
500,000 Global Crossing Holdings Ltd.,
Payment-in-Kind Preferred Bonds,
10.500% due 12/1/2008 B+/B1 528,750
600,000 Hyperion Telecommunications, Inc.,
Series B, Senior Discount
Notes, Step Coupon to
13.000% due 4/15/2003 B+/B3 517,500
276,000 ITC DeltaCom Inc., Senior Notes,
11.000% due 6/1/2007 B/B2 291,180
-----------
2,180,115
</TABLE>
ING Funds Annual Report / October 31, 1999 39
<PAGE> 42
OCTOBER 31, 1999
SCHEDULE OF INVESTMENTS
ING INTERMEDIATE BOND FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Ratings(1) Value
------ ---------- -----
<S> <C> <C>
TELEPHONE - INTEGRATED -- 1.5%
$500,000 NEXTLINK Communications, Inc.,
Senior Notes,
12.500% due 4/15/2006 B/B3 $ 533,750
TELEPHONE - LONG DISTANCE -- 2.5%
1,000,000 Sprint Capital Corp., Notes,
6.875% due 11/15/2028 BBB+/Baa1 917,670
TOBACCO -- 2.7%
1,000,000 R.J. Reynolds Tobacco
Holdings, Inc., Notes,
7.375% due 5/15/2003(2) BBB-/Baa2 967,792
TRANSPORTATION-AIR FREIGHT -- 2.6%
997,502 Federal Express Corp.,
Series 981A,
Pass Through Certificates,
6.720% due 1/15/2022 AAA/Aa2 933,862
TRANSPORTATION - RAIL -- 2.8%
1,000,000 Union Pacific Corp., Notes,
7.375% due 5/15/2001 BBB-/Baa3 1,008,939
WIRE & CABLE PRODUCTS -- 1.3%
500,000 Ametek Inc., Senior Notes,
7.200% due 7/15/2008(2) BBB/Ba1 457,383
TOTAL CORPORATE BONDS
(Cost -- $27,916,088) $27,275,562
REPURCHASE AGREEMENT -- 5.7%
$ 2,053,000 State Street Bank & Trust Co., 5.120% due
11/1/1999; Proceeds at maturity -- $2,053,876;
(Fully collateralized by U.S. Treasury Bonds,
8.000% due 11/15/2021;Market value --
$2,100,000) (Cost -- $2,053,000) $ 2,053,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $36,708,547)(3) $35,987,915
</TABLE>
1. Credit ratings are provided by Standard & Poor's Rating Group and Moody's
Investors Service, Inc.
2. Security is exempt from registration under Rule 144a of the Securities Act
of 1933. This security may be resold in transactions that are exempt from
registration, normally to qualified institutional buyers. Rule 144a
securities amounted to $6,184,446 in market value or 17.2% of net assets.
3. Aggregate cost for Federal income tax purposes is 36,864,188.
See Notes to Financial Statements.
ING MONEY MARKET FUND
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Ratings(1) Value
------ ---------- -----
<S> <C> <C>
U.S. GOVERNMENT AGENCIES -- 2.9%
Fannie Mae:
$1,000,000 5.50% 4/20/2000(2) NR/Aaa $ 999,864
1,000,000 Series B, 5.37% due 11/9/99(3) NR/Aaa 999,615
-----------
1,999,479
1,000,000 Federal Home Loan Bank,
5.16% to 5.23%
due 3/3/2000 to 5/26/2000(2) NR/Aaa 999,898
3,746,000 Federal Mortgage Corp.,
5.39% due 12/17/1999(2) NR/NR 3,720,918
TOTAL U.S. GOVERNMENT AGENCIES
(Cost -- $6,720,295) $ 6,720,29
COMMERCIAL PAPER -- 73.3%
AGRICULTURAL OPERATIONS -- 0.2%
500,000 Cargill Inc.,
5.64% due 1/20/2000(2) A-1/P-1 494,000
AUTO - CARS/LIGHT TRUCKS -- 3.0%
7,000,000 DaimlerChrysler NA Holdings,
5.43% to 6.12%
due 11/29/1999-2/9/2000(2) A-1/P-1 6,914,792
BEVERAGES - NON-ALCOHOLIC -- 0.9%
2,000,000 Coca-Cola Co.,
5.43% due 11/3/1999(2)(4) A-1+/P-1 1,999,409
BREWERY -- 0.2%
500,000 Anheuser Busch Cos.,
5.3075% due 11/16/1999(3)(4) A-1/P-1 499,722
COMMERCIAL BANKS -- 2.1%
2,000,000 Abbey National North America,
5.49% due 12/3/1999(2) A-1+/P-1 1,990,489
3,000,000 Bank One Corp.,
5.88% due 2/8/2000(2) A-1/P-1 2,953,387
-----------
4,943,876
COSMETICS & TOILETRIES -- 2.1%
4,900,000 Procter & Gamble Co.,
5.40% to 5.43% due 11/16/1999(2) A-1+/P-1 4,889,176
DIVERSIFIED FINANCIAL SERVICES -- 14.9%
4,000,000 Associates Corp. NA,
5.88% to 5.92%
due 1/12/2000 to 2/8/2000(2) A-1+/P1 3,950,387
1,000,000 Associates First Capital,
5.74% due 1/31/2000(2) A-1/P-1 986,097
5,000,000 Eksportfinans ASA,
5.40% due 11/29/99(2) A-1+/P-1 4,979,389
10,000,000 General Electric Capital Corp.,
5.39% to 6.13%
due 11/17/1999 to 2/9/2000(2) A-1+/P-1 9,923,159
9,000,000 IBM Credit Corp.,
5.33% to 5.89% due
11/12/1999 to 1/26/2000(2) A-1/P-1 8,949,830
6,000,000 Transamerica Finance Corp.,
5.40% to 6.12%
due 11/9/1999 to 2/25/2000(2) A-1/P-1 5,957,267
-----------
34,746,129
ELECTRIC - INTEGRATED -- 3.0%
7,000,000 Southern California Edison Co.,
5.39% to 5.42%
due 11/5/1999 to 12/6/1999(2) A-1/P-1 6,977,626
</TABLE>
40 ING Funds Annual Report / October 31, 1999
<PAGE> 43
ING MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Ratings(1) Value
------ ---------- -----
<S> <C> <C>
FINANCE - AUTO LOANS -- 3.4%
$3,000,000 Ford Motor Credit Co.,
5.40% due 11/8/1999(2) A-1/P-1 $ 2,996,908
5,000,000 Toyota Motor Credit Corp.,
5.37% to 5.43%
due 11/15/1999 to 11/22/1999(2) A-1+/P-1 4,986,614
------------
7,983,522
FINANCE - CONSUMER LOANS -- 5.9%
7,000,000 American General Finance,
5.36% to 5.93%
due 11/19/1999 to 2/1/2000(2) A-1/P-1 $6,961,624
6,800,000 Household Finance Corp.,
5.37% to 5.94%
due 11/15/1999 to 1/26/2000(2) A-1/P-1 6,775,451
------------
13,737,075
FINANCE - CREDIT CARD -- 4.0%
9,440,000 American Express Credit,
5.00% to 5.43%
due 11/9/1999 to 11/22/99(2) A-1/P-1 9,422,274
FINANCE - INVESTMENT BANKER/BROKER -- 5.4%
6,500,000 Goldman Sachs Group Inc.,
5.59% to 6.17%
due 1/19/2000 to 2/11/2000(2) A-1+/P-1 6,398,842
3,300,000 Merrill Lynch & Co.,
5.20% to 5.36%
due 11/18/1999 to 2/2/2000(2) A-1+/P-1 3,288,705
3,250,000 Morgan Stanley Dean Witter,
5.18% to 6.11%
due 1/18/2000(2) A-1/P-1 3,208,850
3,000,000 Salomon Smith Barney
Holding Co.,
5.98% due 2/4/2000(2) A-1/P-1 2,954,321
------------
15,850,718
FINANCE - OTHER SERVICES -- 1.3%
3,000,000 Caterpillar Financial Service Corp.,
5.89% due 1/27/2000(2) A-1/P-1 2,958,892
FOOD - FLOUR & GRAIN -- 1.1%
2,500,000 Archer Daniels Midland,
5.45% to 5.59%
due 12/14/1999 to 1/18/2000(2) A-1+/P1 2,481,532
FOOD - MISCELLANEOUS/DIVERSIFIED -- 0.1%
200,000 General Mills Inc.,
5.29% due 2/16/2000(2) A-1/P-1 197,016
MACHINERY - FARM -- 2.1%
5,000,000 Deere & Co.,
5.41% due 11/30/1999(2) A-1/P-1 4,978,693
MEDICAL - DRUGS -- 2.8%
American Home Products:
4,000,000 5.4825% due 11/22/1999(3)(4) A-1/P-1 3,999,813
2,495,000 5.61% to 6.09%
due 1/26/2000 to 2/14/2000(2)(4) A-1/P-1 2,455,377
------------
6,455,190
MONEY CENTER BANKS -- 2.9%
7,000,000 Credit Suisse First Boston Inc.,
5.99% to 6.03%
due 2/10/2000 to 2/16/2000(2)(4) A-1+/P-1 6,882,061
MULTIMEDIA -- 0.5%
1,100,000 Walt Disney Co.,
4.98% to 4.99% due 11/9/1999(2) A-1/P-1 1,098,830
OFFICE AUTOMATION & EQUIPMENT -- 1.7%
$4,000,000 Xerox Corp.,
5.32% due 11/3/1999(2) A-1/P-1 $ 3,998,836
PHOTO EQUIPMENT & SUPPLIES -- 3.0%
7,000,000 Eastman Kodak Co.,
5.87% to 5.96%
due 1/21/2000 to 1/27/2000(2) A-1/P-1 6,906,250
SPECIAL PURPOSE ENTITY -- 1.3%
3,000,000 Cargill Global Fund PLC,
5.89% due 1/19/2000(2)(4) A-1/P-1 2,962,607
TELECOMMUNICATION EQUIPMENT -- 0.1%
200,000 Lucent Technologies,
5.31% due 2/9/2000(2) A-1/P-1 197,200
TELECOMMUNICATION SERVICES -- 2.5%
5,900,000 BellSouth Telecommunications Inc.,
5.40% to 5.85%
due 11/2/1999 to 2/9/2000(2) A-1+/P-1 5,868,204
TELEPHONE - LONG DISTANCE -- 2.3%
5,379,000 AT&T Corp., 5.37% to 5.39%
due 11/4/1999 to 11/8/99(2) A-1+/P1 5,375,164
TOYS -- 1.7%
4,072,000 Hasbro Inc., 5.48% to 5.96%
due 11/1/1999 to 2/25/2000(2) A-1/P-1 4,052,311
UTILITY - GAS -- 3.4%
8,000,000 Consolidated Natural Gas,
5.39% to 5.40%
due 11/8/1999 to 11/10/1999(2) A-1+/P-1 7,990,272
TOTAL COMMERCIAL PAPER
(Cost -- $170,861,377) $170,861,377
ASSET-BACKED COMMERCIAL PAPER -- 7.5%
Corporate Asset Funding Co.:
1,000,000 6.2025% due 1/18/2000 A-1+/P-1 $ 1,000,000
8,000,000 5.48% to 5.98%
due 11/4/1999 to 1/24/2000(2) A-1+/P-1 7,933,037
8,639,000 Delaware Funding Corp.,
5.45% to 6.29%
due 11/10/1999 to 1/25/2000(2)(4) A-1+/P-1 8,565,683
------------
TOTAL ASSET-BACKED COMMERCIAL PAPER
(Cost -- $17,498,720) $ 17,498,720
SHORT-TERM AND MEDIUM-TERM NOTES -- 12.2%
ASSET-BACKED SECURITIES -- 2.8%
4,000,000 ANRC Auto Owner Trust,
Series 1999-A Class A1,
6.16625% due 10/16/2000 A-1+/P-1 $ 4,000,000
2,000,000 Carmax Auto Owner Trust,
Series 1999-1 Class A1,
6.2025% due 11/15/2000 NR/P-1 2,000,000
160,159 Caterpillar Financial Asset Trust,
Series 1999-A, Class A1,
5.365% due 7/25/2000 A-1+/P-1 160,159
460,228 Toyota Auto Receivables Owner
Trust, 5.365% due 7/17/2000 AAA/Aaa 460,145
------------
6,620,304
</TABLE>
ING Funds Annual Report / October 31, 1999 41
<PAGE> 44
OCTOBER 31, 1999
SCHEDULE OF INVESTMENTS
ING MONEY MARKET FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal Market
Amount Ratings(1) Value
------ ---------- -----
<S> <C> <C>
COMMERCIAL BANKS -- 2.1%
$2,000,000 Bank One Corp.,
6.700% due 3/24/2000 A+/Aa3 $ 2,005,592
3,000,000 Bank One NA Illinois,
Series 1999-A,
6.1575% due 1/20/2000(3) AA-/Aa2 2,997,389
------------
5,002,981
DIVERSIFIED FINANCIAL SERVICES -- 0.4%
500,000 Chrysler Financial Co. LLC,
5.850% due 5/15/2000 A+/A1 501,917
500,000 IBM Credit Corp.,
5.898% due 8/7/2000 A+/A1 499,845
------------
1,001,762
FINANCE - AUTO LOANS -- 1.7%
Ford Motor Credit Co.:
1,000,000 5.435% due 11/18/1999(3) A/A1 999,356
2,000,000 8.375% due 1/15/2000 A/A1 2,008,662
1,000,000 6.840% due 6/5/2000 A/A1 1,004,498
------------
4,012,516
FINANCE - INVESTMENT BANKER/BROKER -- 1.1%
1,000,000 Goldman Sachs Group,
5.400% due 3/28/2000 A+/A1 997,672
500,000 Merrill Lynch & Co.,
Series B, 5.8525%
due 11/16/1999(3) AA-/Aa3 500,645
1,000,000 Morgan Stanley Dean Witter,
6.250% due 3/15/2000 A+/Aa3 1,001,070
------------
2,499,387
FINANCE - OTHER SERVICES -- 0.8%
Caterpillar Financial Services Corp.:
500,000 5.780% due 3/1/2000 A+/A2 500,014
800,000 6.750% due 6/1/2000 A+/A2 803,191
500,000 Xerox Credit Corp.,
5.113% due 3/21/2000 A/A2 499,931
------------
1,803,136
MEDICAL - DRUGS -- 0.4%
850,000 American Home Products,
7.700% due 2/15/2000 A/A2 854,691
OFFICE AUTOMATION & EQUIPMENT -- 0.1%
200,000 Xerox Corp.,
5.635% due 7/14/2000 A/A2 199,913
SUPER REGIONAL BANKS -- 2.2%
5,000,000 Norwest Corp.,
6.000% due 3/15/2000 A+/Aa3 5,001,248
TELEPHONE - LONG DISTANCE -- 0.6% AT&T Corp.:
500,000 6.1362% due 1/13/2000(3)(4) NR/NR 499,861
1,000,000 Euro Dollar,
8.250% due 1/11/2000 AA-/A1 1,003,993
------------
1,503,854
TOTAL SHORT-TERM AND MEDIUM-TERM NOTES
(Cost -- $28,499,792) $ 28,499,792
REPURCHASE AGREEMENT -- 4.1%
$9,659,000 State Street Bank & Trust Co., 5.120% due
11/1/99; Proceeds at maturity -- $9,663,121;
(Fully collateralized by U.S. Treasury Bonds,
11.250% due 2/15/2015; Market value --
$9,857,375) (Cost -- $9,659,000) $ 9,659,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $233,239,184)(5) $233,239,184
</TABLE>
1. Credit ratings are provided by Standard & Poor's Rating Group and Moody's
Investors Service, Inc.
2. Rate shown is yield to maturity on date of purchase in effect at October
31, 1999.
3. Floating rate note, date shown is the next interest reset date. Interest
rate shown is the current rate.
4. 4-2 commercial paper or 144a issue, security may be sold to institutional
investors only. These securities amounted to $27,864,533 or 12.0% of net
assets.
5. Aggregate cost for Federal income tax purpose is substantially the same.
See Notes to Financial Statements.
42 ING Funds Annual Report / October 31, 1999
<PAGE> 45
BOND RATINGS (UNAUDITED)
All ratings are by Standard & Poor's Rating Group (Standard & Poor's) and
Moody's Investors Service, Inc. (Moody's). The definitions of the applicable
rating symbol are set forth below:
Standard & Poor's applies indicators "+" and " - " to its rating categories. The
indicators show relative standing within the major rating categories.
AAA - Highest grade debts in which capacity to pay interest and repay
principal is extremely strong.
AA - High-grade debts having a very strong capacity to pay interest and
repay principal.
A - Upper medium grade debts that have a strong capacity to pay interest
and repay principal although they are somewhat more susceptible to
the adverse effects of changes in circumstances and economic
conditions than debts in higher rated categories.
BBB - Debts having an adequate capacity to pay interest and repay
principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and
repay principal for debts in this category than in higher rated
categories.
BB,B, - Debts rated in these categories are predominantly speculative with
CCC, CC respect to capacity to pay interest and repay principal in accordance
with terms of the obligations; BB indicates the highest grade and
CC the lowest within the speculative rating categories.
Moody's applies numerical indicators 1, 2 and 3 to rating categories. The
modifier 1 indicates that the security is in the higher end of its rating
category; the modifier 2 indicates a mid-range ranking; and modifier 3 indicates
a ranking toward the lower end of the category.
AAA - Debts judged to be the best quality and carry the smallest degree of
investment risk.
Aa - Debts judged to be of high quality by all standards.
A - Debts possess many favorable investment attributes and are to be
considered as "upper medium grade obligations."
Baa - Debts are considered to be medium grade obligations, 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.
Ba - Debts rated in this category are judged to have speculative elements,
their future cannot be considered as well assured.
B - Debts rated in this category generally lack characteristics of the
desirable investment.
Caa - Debts in this category are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
SHORT-TERM RATINGS
A-1 - Standard & Poor's highest rating for demand obligations and
commercial paper. It indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess
extremely strong safety characteristics will be denoted with a
plus (+) designation.
A-2 - Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high
as for issues designated "A-1."
P-1 - Moody's highest commercial paper rating. Issuers rated Prime-1
("P-1") have a superior ability for repayment of senior short-term
promissory obligations.
P-2 - Issuers rated Prime-2 ("P-2") have a strong ability for repayment of
senior short-term promissory obligations.
NR - Indicates that the bond is not rated by Standard & Poor's or Moody's.
ING Funds Annual Report / October 31, 1999 43
<PAGE> 46
FOR THE PERIOD ENDED OCTOBER 31, 1999
FINANCIAL HIGHLIGHTS
ING Internet Fund
<TABLE>
<CAPTION>
Class A Class B Class C Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(1)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00
From investment operations:
Net investment loss (0.03) (0.03) (0.03) (0.04)
Net realized and unrealized gain(2) 2.70 2.66 2.66 2.67
-------- -------- ------- --------
Total from investment operations 2.67 2.63 2.63 $ 2.63
-------- -------- ------- --------
Distributions paid from investment income -- -- -- --
-------- -------- ------- --------
Net asset value per share, end of period $ 12.67 $ 12.63 $ 12.63 $ 12.63
NET ASSETS, END OF PERIOD (in thousands) $ 35,798 $ 14,869 $ 5,290 $ 1,060
Total investment return at net asset value(3,4) 26.70% 26.30% 26.30% 26.30%
Ratios to average net assets:(5)
Net expenses 1.54% 2.17% 2.18% 2.17%
Gross expenses 3.35% 3.75% 3.79% 3.65%
Net investment loss -1.15% -1.88% -1.88% -1.85%
Portfolio turnover rate(4) 22.08% 22.08% 22.08% 22.08%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B, C and X shares commenced operations on July 1, 1999.
2. Includes gains and losses on foreign currency transactions.
3. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges with respect to Class B, C, and X shares. Total
return for Class X shares does not include the 2.00% bonus shares paid by
the Distributor. If the effect of bonus shares was included, total return
for Class X shares would have been 28.83%. Total returns would be lower if
part of the Fund's expenses were not waived or reimbursed.
4. Not annualized.
5. Annualized.
FINANCIAL HIGHLIGHTS
ING Small Cap Growth Fund
<TABLE>
<CAPTION>
Class A Class B Class C Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $10.00 $10.00 $11.24
From investment operations:
Net investment loss (0.08) (0.08) (0.08) (0.09)
Net realized and unrealized gain 1.40 1.34 1.34 0.12
------ ------ ------ ------
Total from investment operations 1.32 1.26 1.26 0.03
------ ------ ------ ------
Distributions paid from investment income -- -- -- --
------ ------ ------ ------
Net asset value per share, end of period $ 11.32 $11.26 $11.26 $11.27
NET ASSETS, END OF PERIOD (in thousands) $29,860 $ 761 $ 423 $ 572
Total investment return at net asset value(3,4) 13.20% 12.60% 12.60% 0.27%
Ratios to average net assets:(5)
Net expenses 1.34% 1.99% 1.99% 1.99%
Gross expenses 2.67% 2.97% 3.01% 2.97%
Net investment loss -0.89% -1.64% -1.66% -1.64%
Portfolio turnover rate(4) 139.12% 139.12% 139.12% 139.12%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B and C shares commenced operations on December 15, 1998.
2. Class X shares commenced offering on January 11, 1999.
3. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges with respect to Class B, C, and X shares. Total
return for Class X shares does not include the 2.00% bonus shares paid by
the Distributor. If the effect of bonus shares was included, total return
for Class X shares would have been 2.27%. Total returns would be lower if
part of the Fund's expenses were not waived or reimbursed.
4. Not annualized.
5. Annualized.
44 ING Funds Annual Report / October 31, 1999
<PAGE> 47
FOR THE PERIOD ENDED OCTOBER 31, 1999
FINANCIAL HIGHLIGHTS
ING Focus Fund
<TABLE>
<CAPTION>
Class A Class B Class C Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $10.00 $10.00 $10.85
From investment operations:
Net investment loss (0.02) (0.03) (0.03) (0.05)
Net realized and unrealized gain 2.56 2.51 2.50 1.66
------- ------ ------ ------
Total from investment operations 2.54 2.48 2.47 1.61
------- ------ ------ ------
Distributions paid from investment income -- -- -- --
------- ------ ------ ------
Net asset value per share, end of period $ 12.54 $12.48 $12.47 $12.46
NET ASSETS, END OF PERIOD (in thousands) $35,783 $2,984 $ 976 $1,116
Total investment return at net asset value(3,4) 25.40% 24.80% 24.70% 14.84%
Ratios to average net assets:(5)
Net expenses 1.34% 1.99% 1.99% 2.00%
Gross expenses 2.60% 2.92% 2.92% 2.89%
Net investment loss -0.25% -0.88% -0.87% -0.92%
Portfolio turnover rate(4) 95.71% 95.71% 95.71% 95.71%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B and C shares commenced operations on December 15, 1998.
2. Class X shares commenced offering on January 12, 1999.
3. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges with respect to Class B, C, and X shares. Total
return for Class X shares does not include the 2.00% bonus shares paid by
the Distributor. If the effect of bonus shares was included, total return
for Class X shares would have been 17.14%. Total returns would be lower if
part of the Fund's expenses were not waived or reimbursed.
4. Not annualized.
5. Annualized.
FINANCIAL HIGHLIGHTS
ING Mid Cap Growth Fund
<TABLE>
<CAPTION>
Class A Class B Class C Class I Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(2) Shares(3)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $10.00 $10.00 $10.27 $10.53
From investment operations:
Net investment loss (0.03) (0.05) (0.06) (0.01) (0.07)
Net realized and unrealized gain (loss) 0.42 0.38 0.39 0.14 (0.13)
------- ------ ------ ------ ------
Total from investment operations 0.39 0.33 0.33 0.13 (0.20)
------- ------ ------ ------ ------
Distributions paid from investment income -- -- -- -- --
------- ------ ------ ------ ------
Net asset value per share, end of period $ 10.39 $10.33 $10.33 $10.40 $10.33
NET ASSETS, END OF PERIOD (in thousands) $28,042 $ 653 $ 391 $ 416 $ 333
Total investment return at net asset value(4,5) 3.90% 3.30% 3.30% 1.27% -1.90%
Ratios to average net assets:(6)
Net expenses 1.35% 1.99% 1.99% 0.80% 1.99%
Gross expenses 2.68% 2.82% 2.82% 1.56% 2.82%
Net investment loss -0.35% -1.42% -1.45% -0.24% -1.38%
Portfolio turnover rate(5) 41.27% 41.27% 41.27% 41.27% 41.27%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B and C shares commenced operations on December 15, 1998.
2. Class I shares commenced offering on July 29,1999.
3. Class X shares commenced offering on January 19, 1999.
4. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges with respect to Class B, C, and X shares. Total
return for Class X shares does not include the 2.00% bonus shares paid by
the Distributor. If the effect of bonus shares was included, total return
for Class X shares would have been 0.06%. Total returns would be lower if
part of the Fund's expenses were not waived or reimbursed.
5. Not annualized.
6. Annualized.
ING Funds Annual Report / October 31, 1999 45
<PAGE> 48
FOR THE PERIOD ENDED OCTOBER 31, 1999
FINANCIAL HIGHLIGHTS
ING Large Cap Growth Fund
46
<TABLE>
<CAPTION>
Class A Class B Class C Class I Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(2) Shares(3)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $10.00 $10.00 $11.12 $10.82
From investment operations:
Net investment loss (0.04) (0.04) (0.03) 0.00(7) (0.06)
Net realized and unrealized gain 1.84 1.79 1.77 0.69 0.97
-------- ------ ------ ------ ------
Total from investment operations 1.80 1.75 1.74 0.69 0.91
-------- ------ ------ ------ ------
Distributions paid from investment income -- -- -- -- --
-------- ------ ------ ------ ------
Net asset value per share, end of period $ 11.80 $11.75 $11.74 $11.81 $11.73
NET ASSETS, END OF PERIOD (in thousands) $37,517 $3,900 $10,692 $ 51 $5,105
Total investment return at net asset value(4,5) 18.00% 17.50% 17.40% 6.21% 8.41%
Ratios to average net assets:(6)
Net expenses 1.28% 1.93% 1.93% 0.77% 1.93%
Gross expenses 2.39% 2.69% 2.67% 1.49% 2.68%
Net investment loss -0.41% -1.14% -1.13% -0.08% -1.13%
Portfolio turnover rate(5) 61.71% 61.71% 61.71% 61.71% 61.71%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B and C shares commenced operations on December 15, 1998.
2. Class I shares commenced offering on September 27, 1999.
3. Class X shares commenced offering on January 11, 1999.
4. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges with respect to Class B, C, and X shares. Total
return for Class X shares does not include the 2.00% bonus shares paid by
the Distributor. If the effect of bonus shares was included, total return
for Class X shares would have been 10.58%. Total returns would be lower if
part of the Fund's expenses were not waived or reimbursed.
5. Not annualized.
6. Annualized.
7. Amount represents less than $0.01.
FINANCIAL HIGHLIGHTS
ING Tax Efficient Equity Fund
<TABLE>
<CAPTION>
Class A Class B Class C Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $10.00 $10.00 $11.08
From investment operations:
Net investment income (loss) 0.04 (0.01) 0.00(6) (0.01)
Net realized and unrealized gain 1.95 1.97 1.92 0.86
------- ------ ------ ------
Total from investment operations 1.99 1.96 1.92 0.85
------- ------ ------ ------
Distributions paid from investment income -- -- -- --
------- ------ ------ ------
Net asset value per share, end of period $ 11.99 $11.96 $11.92 $11.93
NET ASSETS, END OF PERIOD (in thousands) $45,714 $7,059 $1,222 $3,089
Total investment return at net asset value(3,4) 19.90% 19.60% 19.20% 7.67%
Ratios to average net assets:(5)
Net expenses 1.28% 1.95% 1.97% 1.94%
Gross expenses 2.40% 2.66% 2.64% 2.67%
Net investment income (loss) 0.49% -0.14% -0.14% -0.14%
Portfolio turnover rate(4) 8.51% 8.51% 8.51% 8.51%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B and C shares commenced operations on December 15, 1998.
2. Class X shares commenced offering on January 11, 1999.
3. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges with respect to Class B, C, and X shares. Total
return for Class X shares does not include the 2.00% bonus shares paid by
the Distributor. If the effect of bonus shares was included, total return
for Class X shares would have been 9.82%. Total returns would be lower if
part of the Fund's expenses were not waived or reimbursed.
4. Not annualized.
5. Annualized.
6. Amount represents less than $0.01.
46 ING Funds Annual Report / October 31, 1999
<PAGE> 49
FOR THE PERIOD ENDED OCTOBER 31, 1999
FINANCIAL HIGHLIGHTS
ING Growth & Income Fund
<TABLE>
<CAPTION>
Class A Class B Class C Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $10.00 $10.00 $10.67
From investment operations:
Net investment income (loss) 0.01 (0.03) (0.02) (0.03)
Net realized and unrealized gain 1.42 1.41 1.40 0.72
------- ------ ------ ------
Total from investment operations 1.43 1.38 1.38 0.69
------- ------ ------ ------
Distributions paid from investment income (0.01) (0.02) (0.00)(6) (0.01)
------- ------ ------ ------
Net asset value per share, end of period $ 11.42 $11.36 $11.38 $11.35
NET ASSETS, END OF PERIOD (in thousands) $34,964 $1,132 $ 855 $1,470
Total investment return at net asset value(3,4) 14.34% 13.79% 13.81% 6.51%
Ratios to average net assets:(5)
Net expenses 1.28% 1.93% 1.93% 1.93%
Gross expenses 2.37% 2.67% 2.68% 2.66%
Net investment income (loss) 0.14% -0.61% -0.61% -0.59%
Portfolio turnover rate(4) 32.44% 32.44% 32.44% 32.44%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B and C shares commenced operations on December 15, 1998.
2. Class X shares commenced offering on January 12, 1999.
3. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges with respect to Class B, C, and X shares. Total
return for Class X shares does not include the 2.00% bonus shares paid by
the Distributor. If the effect of bonus shares was included, total return
for Class X shares would have been 8.64%. Total returns would be lower if
part of the Fund's expenses were not waived or reimbursed.
4. Not annualized.
5. Annualized.
6. Amount represents less than $0.01.
FINANCIAL HIGHLIGHTS
ING International Bond Fund
<TABLE>
<CAPTION>
Class A Class B Class C Class I Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(2) Shares(3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $10.00 $10.00 $ 8.97 $ 9.87
From investment operations:
Net investment income(4) 0.20 0.18 0.17 0.09 0.16
Net realized and unrealized loss(5) (1.21) (1.25) (1.23) (0.21) (1.11)
------- ---- ------ ------ ------
Total from investment operations (1.01) (1.07) (1.06) (0.12) (0.95)
------- ---- ------ ------ ------
Distributions paid from return of capital (0.21) (0.15) (0.15) (0.09) (0.14)
------- ---- ------ ------ ------
Net asset value per share, end of period $ 8.78 $ 8.78 $ 8.79 $ 8.76 $8.78
NET ASSETS, END OF PERIOD (in thousands) $23,630 $520 $ 14 $ 5 $ 736
Total investment return at net asset value(6,7) -10.16% -10.71% -10.60% -1.35% -9.64%
Ratios to average net assets:(8)
Net expenses 1.48% 2.12% 2.13% 1.03% 2.12%
Gross expenses 2.78% 3.01% 3.02% 1.81% 3.01%
Net investment income 2.51% 2.26% 2.20% 3.84% 2.26%
Portfolio turnover rate(7) 140.92% 140.92% 140.92% 140.92% 140.92%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B and C shares commenced operations on December 15, 1998.
2. Class I shares commenced offering on July 29,1999.
3. Class X shares commenced offering on January 11, 1999.
4. Per share net investment income is based on average number of shares
outstanding during the period.
5. Includes gains and losses on foreign currency transactions.
6. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges with respect to Class B, C, and X shares. Total return
for Class X shares does not include the 2.00% bonus shares paid by the
Distributor. If the effect of bonus shares was included, total return for
Class X shares would have been (7.83)%. Total returns would be lower if part
of the Fund's expenses were not waived or reimbursed.
7. Not annualized.
8. Annualized.
ING Funds Annual Report / October 31, 1999 47
<PAGE> 50
FOR THE PERIOD ENDED OCTOBER 31, 1999
FINANCIAL HIGHLIGHTS
ING Global Information Technology Fund
<TABLE>
<CAPTION>
Class A Class B Class C Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $10.00 $10.00 $12.42
From investment operations:
Net investment loss (0.13) (0.08) (0.05) (0.13)
Net realized and unrealized gain(3) 7.51 7.36 7.33 5.00
------- ------ ------ ------
Total from investment operations 7.38 7.28 7.28 4.87
------- ------ ------ ------
Distributions paid from investment income -- -- -- --
------- ------ ------ ------
Net asset value per share, end of period $ 17.38 $17.28 $17.28 $17.29
NET ASSETS, END OF PERIOD (in thousands) $54,798 $5,964 $2,102 $2,545
Total investment return at net asset value(4,5) 73.80% 72.80% 72.80% 39.21%
Ratios to average net assets:(6)
Net expenses 1.57% 2.25% 2.24% 2.25%
Gross expenses 2.95% 3.22% 3.20% 3.22%
Net investment loss -1.29% -2.04% -2.05% -2.02%
Portfolio turnover rate(5) 56.88% 56.88% 56.88% 56.88%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B and C shares commenced operations on December 15, 1998.
2. Class X shares commenced offering on January 11, 1999.
3. Includes gains and losses on foreign currency transactions.
4. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges with respect to Class B, C, and X shares. Total
return for Class X shares does not include the 2.00% bonus shares paid by
the Distributor. If the effect of bonus shares was included, total return
for Class X shares would have been 42.00%. Total returns would be lower if
part of the Fund's expenses were not waived or reimbursed.
5. Not annualized.
6. Annualized.
FINANCIAL HIGHLIGHTS
ING European Equity Fund
<TABLE>
<CAPTION>
Class A Class B Class C Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $10.00 $10.00 $10.53
From investment operations:
Net investment income (loss) 0.04 0.00(7) (0.01) 0.01
Net realized and unrealized gain(3) 0.91 0.89 0.90 0.35
------- ------ ------ ------
Total from investment operations 0.95 0.89 0.89 0.36
------- ------ ------ ------
Distributions paid from investment income -- -- -- --
------- ------ ------ ------
Net asset value per share, end of period $ 10.95 $10.89 $10.89 $10.89
NET ASSETS, END OF PERIOD (in thousands) $28,746 $ 849 $ 62 $ 707
Total investment return at net asset value(4,5) 9.50% 8.90% 8.90% 3.42%
Ratios to average net assets:(6)
Net expenses 1.61% 2.27% 2.26% 2.26%
Gross expenses 3.06% 3.35% 3.34% 3.35%
Net investment income (loss) 0.48% -0.08% -0.15% 0.11%
Portfolio turnover rate(5) 62.91% 62.91% 62.91% 62.91%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B and C shares commenced operations on December 15, 1998.
2. Class X shares commenced offering on January 15, 1999.
3. Includes gains and losses on foreign currency transactions.
4. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges with respect to Class B, C, and X shares. Total
return for Class X shares does not include the 2.00% bonus shares paid by
the Distributor. If the effect of bonus shares was included, total return
for Class X shares would have been 5.49%. Total returns would be lower if
part of the Fund's expenses were not waived or reimbursed.
5. Not annualized.
6. Annualized.
7. Amount represents less than $0.01.
48 ING Funds Annual Report / October 31, 1999
<PAGE> 51
FOR THE PERIOD ENDED OCTOBER 31, 1999
FINANCIAL HIGHLIGHTS
ING International Equity Fund
<TABLE>
<CAPTION>
Class A Class B Class C Class I Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(2) Shares(3)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $10.00 $10.00 $11.29 $10.24
From investment operations:
Net investment income (loss) 0.04 (0.01) (0.01) 0.00(8) (0.01)
Net realized and unrealized gain(4) 1.78 1.77 1.77 0.53 1.53
------- ------ ------ ------ ------
Total from investment operations 1.82 1.76 1.76 0.53 1.52
------- ------ ------ ------ ------
Distributions paid from investment income -- -- -- -- --
------- ------ ------ ------ ------
Net asset value per share, end of period $ 11.82 $11.76 $11.76 $11.82 $11.76
NET ASSETS, END OF PERIOD (in thousands) $32,106 $ 680 $ 417 $ 89 $ 347
Total investment return at net asset value(5,6) 18.20% 17.60% 17.60% 4.69% 14.84%
Ratios to average net assets:(7)
Net expenses 1.59% 2.23% 2.20% 1.04% 2.23%
Gross expenses 3.04% 3.30% 3.39% 2.63% 3.32%
Net investment income (loss) 0.44% -0.32% -0.59% -0.03% -0.24%
Portfolio turnover rate(6) 105.44% 105.44% 105.44% 105.44% 105.44%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B and C shares commenced operations on December 15, 1998.
2. Class I shares commenced offering on September 27, 1999.
3. Class X shares commenced offering on February 16, 1999.
4. Includes gains and losses on foreign currency transactions.
5. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges with respect to Class B, C, and X shares. Total
return for Class X shares does not include the 2.00% bonus shares paid by
the Distributor. If the effect of bonus shares was included, total return
for Class X shares would have been 17.14%. Total returns would be lower if
part of the Fund's expenses were not waived or reimbursed.
6. Not annualized.
7. Annualized.
8. Amount represents less than $0.01.
FINANCIAL HIGHLIGHTS
ING Global Brand Names Fund
<TABLE>
<CAPTION>
Class A Class B Class C Class I Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(2) Shares(3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $10.00 $10.00 $11.34 $10.76
From investment operations:
Net investment loss (0.02) (0.04) (0.06) 0.00(8) (0.05)
Net realized and unrealized gain(4) 1.59 1.54 1.57 0.24 0.81
------- ------ ------ ------ ------
Total from investment operations 1.57 1.50 1.51 0.24 0.76
------- ------ ------ ------ ------
Distributions paid from investment income -- -- -- -- --
------- ------ ------ ------ ------
Net asset value per share, end of period $ 11.57 $11.50 $11.51 $11.58 $11.52
NET ASSETS, END OF PERIOD (in thousands) $35,376 $2,841 $7,548 $ 461 $2,316
Total investment return at net asset value(5,6) 15.70% 15.00% 15.10% 2.12% 7.06%
Ratios to average net assets:(7)
Net expenses 1.48% 2.14% 2.13% 0.96% 2.14%
Gross expenses 2.68% 2.93% 2.93% 1.68% 2.93%
Net investment loss -0.18% -0.97% -0.78% -0.12% -0.87%
Portfolio turnover rate(6) 11.09% 11.09% 11.09% 11.09% 11.09%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B and C shares commenced operations on December 15, 1998.
2. Class I shares commenced offering on July 29,1999.
3. Class X shares commenced offering on January 14, 1999.
4. Includes gains and losses on foreign currency transactions.
5. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges with respect to Class B, C, and X shares. Total
return for Class X shares does not include the 2.00% bonus shares paid by
the Distributor. If the effect of bonus shares was included, total return
for Class X shares would have been 9.20%. Total returns would be lower if
part of the Fund's expenses were not waived or reimbursed.
6. Not annualized.
7. Annualized.
8. Amount represents less than $0.01.
ING Funds Annual Report / October 31, 1999 49
<PAGE> 52
FOR THE PERIOD ENDED OCTOBER 31, 1999
FINANCIAL HIGHLIGHTS
ING High Yield Bond Fund
<TABLE>
<CAPTION>
Class A Class B Class C Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $10.00 $10.00 $10.02
From investment operations:
Net investment income(3) 0.67 0.60 0.62 0.58
Net realized and unrealized loss (0.04) (0.05) (0.06) (0.09)
------- ------ ------ ------
Total from investment operations 0.63 0.55 0.56 0.49
------- ------ ------ ------
Distributions paid from investment income (0.67) (0.59) (0.60) (0.56)
------- ------ ------ ------
Net asset value per share, end of period $ 9.96 $9.96 $9.96 $ 9.95
NET ASSETS, END OF PERIOD (in thousands) $30,537 $2,374 $ 776 $ 865
Total investment return at net asset value(4,5) 6.37% 5.57% 5.67% 4.99%
Ratios to average net assets:(6)
Net expenses 1.00% 1.72% 1.73% 1.74%
Gross expenses 2.32% 2.64% 2.66% 2.66%
Net investment income 7.53% 6.90% 7.01% 7.11%
Portfolio turnover rate(5) 756.40% 756.40% 756.40% 756.40%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B and C shares commenced operations on December 15, 1998.
2. Class X shares commenced offering on January 11, 1999.
3. Per share net investment income is based on average number of shares
outstanding during the period.
4. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges with respect to Class B, C, and X shares. Total
return for Class X shares does not include the 2.00% bonus shares paid by
the Distributor. If the effect of bonus shares was included, total return
for Class X shares would have been 7.09%. Total returns would be lower if
part of the Fund's expenses were not waived or reimbursed.
5. Not annualized.
6. Annualized.
FINANCIAL HIGHLIGHTS
ING Intermediate Bond Fund
<TABLE>
<CAPTION>
Class A Class B Class C Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $10.00 $10.00 $ 9.87
From investment operations:
Net investment income(3) 0.45 0.40 0.42 0.37
Net realized and unrealized loss (0.60) (0.61) (0.63) (0.48)
------- ------ ------ ------
Total from investment operations (0.15) (0.21) (0.21) (0.11)
------- ------ ------ ------
Distributions paid from investment income (0.45) (0.39) (0.39) (0.36)
------- ------ ------ ------
Net asset value per share, end of period $ 9.40 $ 9.40 $9.40 $ 9.40
NET ASSETS, END OF PERIOD (in thousands) $32,013 $1,958 $1,082 $1,006
Total investment return at net asset value(4,5) -1.46% -2.13% -2.10% -1.07%
Ratios to average net assets:(6)
Net expenses 0.96% 1.70% 1.71% 1.71%
Gross expenses 2.12% 2.39% 2.44% 2.41%
Net investment income 5.38% 4.83% 4.94% 4.90%
Portfolio turnover rate(5) 431.50% 431.50% 431.50% 431.50%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B and C shares commenced operations on December 15, 1998.
2. Class X shares commenced offering on January 11, 1999.
3. Per share net investment income is based on average number of shares
outstanding during the period.
4. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges with respect to Class B, C, and X shares. Total
return for Class X shares does not include the 2.00% bonus shares paid by
the Distributor. If the effect of bonus shares was included, total return
for Class X shares would have been 0.91%. Total returns would be lower if
part of the Fund's expenses were not waived or reimbursed.
5. Not annualized.
6. Annualized.
50 ING Funds Annual Report / October 31, 1999
<PAGE> 53
FOR THE PERIOD ENDED OCTOBER 31, 1999
FINANCIAL HIGHLIGHTS
ING Money Market Fund
<TABLE>
<CAPTION>
Class A Class B Class C Class I Class X
For a share of beneficial interest outstanding throughout the period: Shares(1) Shares(1) Shares(1) Shares(2) Shares(3)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value per share, beginning of period $ 1.00 $ 1.00 $1.00 $ 1.00 $ 1.00
From investment operations:
Net investment income(4) 0.04 0.03 0.03 0.00(8) 0.03
Net realized and unrealized gain -- -- -- -- --
-------- ------ ----- ------ ------
Total from investment operations 0.04 0.03 0.03 0.00(8) 0.03
-------- ------ ----- ------ ------
Distributions paid from investment income (0.04) (0.03) (0.03) (0.00)(8) (0.03)
-------- ------ ----- ------ ------
Net asset value per share, end of period $ 1.00 $ 1.00 $1.00 $ 1.00 $ 1.00
NET ASSETS, END OF PERIOD (in thousands) $228,124 $1,173 $ 444 $1,906 $1,512
Total investment return at net asset value(5,6) 3.98% 3.31% 3.30% 0.28% 2.94%
Ratios to average net assets:(7)
Net expenses 0.73% 1.41% 1.41% 0.31% 1.41%
Gross expenses 1.67% 1.79% 1.78% 0.59% 1.73%
Net investment income 4.59% 3.85% 3.89% 5.29% 3.81%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Class A, B and C shares commenced operations on December 15, 1998.
2. Class I shares commenced offering on October 13, 1999.
3. Class X shares commenced offering on January 20, 1999.
4. Per share net investment income is based on average number of shares
outstanding during the period.
5. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
contingent deferred sales charges with respect to Class B, C, and X shares.
Total return for Class X shares does not include the 2.00% bonus shares paid
by the Distributor. If the effect of bonus shares was included, total return
for Class X shares would have been 5.00%. Total returns would be lower if
part of the Fund's expenses were not waived or reimbursed.
6. Not annualized.
7. Annualized.
8. Amount represents less than $0.01.
ING Funds Annual Report / October 31, 1999 51
<PAGE> 54
OCTOBER 31, 1999
STATEMENTS OF ASSETS & LIABILITIES
<TABLE>
<CAPTION>
ING ING ING
Internet Small Cap Focus
Fund Growth Fund Fund
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments in securities, at cost $45,485,257 $25,638,045 $30,104,875
----------- ----------- -----------
Investments in securities, at value $55,234,622 $30,989,978 $35,454,059
Repurchase agreements, at value 2,659,000 1,475,000 6,188,000
Cash 277 547 1,453
Foreign currency, at value -- -- --
Receivable for fund shares sold 3,214,647 5,978 219,265
Receivable for investment securities sold 44,466 752,423 448,164
Receivable for open foreign currency
contracts (Note 5) -- -- --
Dividend and interest receivable 1,134 1,702 27,316
Prepaid registration expense 748 4,188 4,236
Prepaid insurance -- 506 506
----------- ----------- -----------
Total Assets 61,154,894 33,230,322 42,342,999
LIABILITIES:
Payable for investment securities
purchased 3,704,255 1,551,384 1,403,765
Payable for fund shares redeemed 328,491 -- 4,855
Shareholder services fee payable (Note 3) 9,679 6,043 8,112
Management fee payable (Note 3) 12,099 6,315 8,112
Distribution fee payable (Note 3) 12,884 3,419 5,718
Payable for open foreign currency
contracts (Note 5) -- -- --
Foreign currency payable to bank -- -- --
Dividend payable -- -- --
Other accrued expenses 71,022 46,250 53,565
----------- ----------- -----------
Total Liabilities 4,138,430 1,613,411 1,484,127
NET ASSETS $57,016,464 $31,616,911 $40,858,872
Composition of Net Assets:
Par value of shares of beneficial
interest $ 4,506 $ 2,793 $ 3,260
Capital paid in excess of par value 45,994,722 27,842,461 34,120,031
Accumulated net investment income
(loss) -- -- --
Accumulated net realized gain (loss) 1,267,871 (1,580,276) 1,386,397
Net unrealized appreciation
(depreciation)
of investments and foreign
currencies 9,749,365 5,351,933 5,349,184
NET ASSETS $57,016,464 $31,616,911 $40,858,872
Class A Shares
Net Assets $35,797,725 $29,860,417 $35,782,905
Shares Outstanding 2,825,950 2,636,927 2,853,393
Net Asset Value Per Share (and
redemption price) $12.67 $11.32 $12.54
Maximum Public Offering Price $13.44(1) $12.01(1) $13.31(1)
Class B Shares
Net Assets $14,869,071 $ 761,111 $ 2,983,561
Shares Outstanding 1,177,100 67,608 239,158
Net Asset Value Per Share(3) $12.63 $11.26 $12.48
Class C Shares
Net Assets $ 5,289,637 $ 423,245 $ 976,115
Shares Outstanding 418,663 37,593 78,252
Net Asset Value Per Share(4) $12.63 $11.26 $12.47
Class I Shares
Net Assets -- -- --
Shares Outstanding -- -- --
Net Asset Value Per Share (and
redemption price) -- -- --
Class X Shares
Net Assets $ 1,060,031 $ 572,138 $ 1,116,291
Shares Outstanding 83,915 50,777 89,565
Net Asset Value Per Share(3) $12.63 $11.27 $12.46
</TABLE>
<TABLE>
<CAPTION>
ING ING ING
Mid Cap Large Cap Tax Efficient
Growth Fund Growth Fund Equity Fund
-------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments in securities, at cost $25,727,389 $46,575,731 $41,996,976
----------- ----------- -----------
Investments in securities, at value $28,920,102 $53,857,003 $48,408,509
Repurchase agreements, at value 1,001,000 3,087,000 8,629,000
Cash 483 4,162 616
Foreign currency, at value -- -- --
Receivable for fund shares sold 4,440 440,757 107,594
Receivable for investment securities sold 647,149 186,873 --
Receivable for open foreign currency
contracts (Note 5) -- -- --
Dividend and interest receivable 6,905 19,300 41,386
Prepaid registration expense 4,967 4,867 4,300
Prepaid insurance 506 506 506
----------- ----------- -----------
Total Assets 30,585,552 57,600,468 57,191,911
LIABILITIES:
Payable for investment securities
purchased 685,594 237,325 --
Payable for fund shares redeemed -- 3,240 8,939
Shareholder services fee payable (Note 3) 6,043 10,905 11,426
Management fee payable (Note 3) 7,859 8,185 9,141
Distribution fee payable (Note 3) 3,124 13,109 10,389
Payable for open foreign currency
contracts (Note 5) -- -- --
Foreign currency payable to bank -- -- --
Dividend payable -- -- --
Other accrued expenses 46,676 62,290 66,927
----------- ----------- -----------
Total Liabilities 749,296 335,054 106,822
NET ASSETS $29,836,256 $57,265,414 $57,085,089
Composition of Net Assets:
Par value of shares of beneficial
interest $ 2,873 $ 4,862 $ 4,766
Capital paid in excess of par value 28,717,629 51,376,160 50,494,837
Accumulated net investment income
(loss) -- -- 181,305
Accumulated net realized gain (loss) (2,076,959) (1,396,880) (7,352)
Net unrealized appreciation
(depreciation)
of investments and foreign
currencies 3,192,713 7,281,272 6,411,533
NET ASSETS $29,836,256 $57,265,414 $57,085,089
Class A Shares
Net Assets $28,041,990 $37,517,467 $45,714,406
Shares Outstanding 2,699,045 3,179,855 3,813,901
Net Asset Value Per Share (and
redemption price) $10.39 $11.80 $11.99
Maximum Public Offering Price $11.02(1) $12.52(1) $12.72(1)
Class B Shares
Net Assets $ 653,393 $ 3,899,686 $ 7,059,205
Shares Outstanding 63,257 331,997 590,216
Net Asset Value Per Share(3) $10.33 $11.75 $11.96
Class C Shares
Net Assets $ 391,477 $10,692,242 $ 1,222,420
Shares Outstanding 37,907 910,651 102,569
Net Asset Value Per Share(4) $10.33 $11.74 $11.92
Class I Shares
Net Assets $ 416,495 $ 50,926 --
Shares Outstanding 40,053 4,312 --
Net Asset Value Per Share (and
redemption price) $10.40 $11.81 --
Class X Shares
Net Assets $ 332,901 $ 5,105,093 $ 3,089,058
Shares Outstanding 32,236 435,292 259,021
Net Asset Value Per Share(3) $10.33 $11.73 $11.93
</TABLE>
1. Maximum offering price per share is net asset value divided by 94.25%.
2. Maximum offering price per share is net asset value divided by 95.25%.
3. Redemption price is net asset value per share of Class B and X shares
reduced by a 5.00% CDSC if shares are redeemed within one year from purchase
(See Note 3).
4. Redemption price is net asset value per share of Class C shares reduced by a
1.00% CDSC if shares are redeemed within one year from purchase (See Note
3).
See Notes to Financial Statements.
52 ING Funds Annual Report / October 31, 1999
<PAGE> 55
<TABLE>
<CAPTION>
ING Global
ING ING Information ING ING
Growth & International Technology European International
Income Fund Bond Fund Fund Equity Fund Equity Fund
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at cost $34,083,434 $25,951,883 $44,524,656 $28,227,048 $29,429,446
----------- ----------- ----------- ----------- -----------
Investments in securities, at value $37,976,033 $24,067,606 $64,038,853 $29,974,383 $32,648,710
Repurchase agreements, at value 1,603,000 529,000 2,745,000 453,000 1,449,000
Cash 7,014 820 953 132 490
Foreign currency, at value -- 54,047 -- -- --
Receivable for fund shares sold 105,935 -- 1,251,471 26,515 264,103
Receivable for investment securities sold 651,414 1,498,478 -- 217,981 116,477
Receivable for open foreign currency
contracts (Note 5) -- -- 142 686 --
Dividend and interest receivable 26,461 551,497 6,973 56,728 71,941
Prepaid registration expense 4,188 5,046 4,252 4,188 4,747
Prepaid insurance 506 506 506 506 506
----------- ----------- ----------- ----------- -----------
Total Assets 40,374,551 26,707,000 68,048,150 30,734,119 34,555,974
LIABILITIES:
Payable for investment securities
purchased 1,878,770 1,719,627 2,496,744 277,011 837,159
Payable for fund shares redeemed 4,325 2,000 20,669 -- 485
Shareholder services fee payable (Note 3) 7,678 5,291 12,220 6,309 6,823
Management fee payable (Note 3) 5,758 5,291 15,275 7,217 8,543
Distribution fee payable (Note 3) 4,776 2,806 9,352 3,369 3,437
Payable for open foreign currency
contracts (Note 5) -- 20,666 -- 573 3,034
Foreign currency payable to bank -- -- -- 20,489 2,797
Dividend payable -- 366 -- -- --
Other accrued expenses 52,581 44,777 84,315 55,643 53,913
----------- ----------- ----------- ----------- -----------
Total Liabilities 1,953,888 1,800,824 2,638,575 370,611 916,191
NET ASSETS $38,420,663 $24,906,176 $65,409,575 $30,363,508 $33,639,783
Composition of Net Assets:
Par value of shares of beneficial
interest $ 3,365 $ 2,838 $ 3,768 $ 2,773 $ 2,846
Capital paid in excess of par value 34,421,539 27,185,503 42,378,299 27,787,177 28,848,588
Accumulated net investment income
(loss) 15,089 (67,772) (142) 141,180 152,314
Accumulated net realized gain (loss) 88,071 (323,411) 3,516,094 685,985 1,417,325
Net unrealized appreciation
(depreciation)
of investments and foreign
currencies 3,892,599 (1,890,982) 19,511,556 1,746,393 3,218,710
NET ASSETS $38,420,663 $24,906,176 $65,409,575 $30,363,508 $33,639,783
Class A Shares
Net Assets $34,963,696 $23,629,908 $54,798,263 $28,745,799 $32,105,962
Shares Outstanding 3,060,829 2,692,508 3,153,493 2,624,643 2,715,555
Net Asset Value Per Share (and
redemption price) $11.42 $8.78 $17.38 $10.95 $11.82
Maximum Public Offering Price $12.12(1) $9.22(2) $18.44(1) $11.62(1) $12.54(1)
Class B Shares
Net Assets $ 1,132,009 $ 520,273 $ 5,964,174 $ 849,193 $ 680,420
Shares Outstanding 99,664 59,285 345,054 78,007 57,875
Net Asset Value Per Share(3) $11.36 $8.78 $17.28 $10.89 $11.76
Class C Shares
Net Assets $ 854,598 $ 14,244 $ 2,101,754 $ 61,810 $ 417,495
Shares Outstanding 75,127 1,621 121,623 5,677 35,511
Net Asset Value Per Share(4) $11.38 $8.79 $17.28 $10.89 $11.76
Class I Shares
Net Assets -- $ 5,332 -- -- $ 88,672
Shares Outstanding -- 609 -- -- 7,500
Net Asset Value Per Share (and
redemption price) -- $8.76 -- -- $11.82
Class X Shares
Net Assets $ 1,470,360 $ 736,419 $ 2,545,384 $ 706,706 $ 347,234
Shares Outstanding 129,552 83,908 147,243 64,914 29,534
Net Asset Value Per Share(3) $11.35 $8.78 $17.29 $10.89 $11.76
<CAPTION>
ING ING ING ING Money
Global Brand High Yield Intermediate Market
Names Fund Bond Fund Bond Fund Fund
------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at cost $44,312,262 $33,211,803 $34,655,547 $223,580,184
----------- ----------- ----------- ------------
Investments in securities, at value $48,548,428 $32,938,228 $33,934,915 $223,580,184
Repurchase agreements, at value 411,000 1,669,000 2,053,000 9,659,000
Cash 448 838 730 964
Foreign currency, at value -- -- -- --
Receivable for fund shares sold 152,753 270,346 492,931 873,162
Receivable for investment securities sol -- 232,406 -- --
Receivable for open foreign currency
contracts (Note 5) -- -- -- --
Dividend and interest receivable 43,711 516,299 642,493 326,978
Prepaid registration expense 4,967 4,276 4,243 10,762
Prepaid insurance 506 506 506 506
----------- ----------- ----------- ------------
Total Assets 49,161,813 35,631,899 37,128,818 234,451,556
LIABILITIES:
Payable for investment securities
purchased 470,154 1,000,000 998,560 --
Payable for fund shares redeemed 47,734 5,833 4,713 1,083,833
Shareholder services fee payable (Note 3 9,709 7,133 7,539 48,419
Management fee payable (Note 3) 9,802 4,636 3,769 12,167
Distribution fee payable (Note 3) 10,473 2,325 2,321 22,808
Payable for open foreign currency
contracts (Note 5) -- -- -- --
Foreign currency payable to bank -- -- -- --
Dividend payable -- 7,105 2,105 3,084
Other accrued expenses 71,372 52,148 50,230 122,484
----------- ----------- ----------- ------------
Total Liabilities 619,244 1,079,180 1,069,237 1,292,795
NET ASSETS $48,542,569 $34,552,719 $36,059,581 $233,158,761
Composition of Net Assets:
Par value of shares of beneficial
interest $ 4,202 $ 3,468 $ 3,835 $ 233,159
Capital paid in excess of par value 43,641,942 34,760,016 37,995,170 232,905,588
Accumulated net investment income
(loss) -- 20,101 20,178 20,014
Accumulated net realized gain (loss) 660,015 42,709 (1,238,970) --
Net unrealized appreciation
(depreciation)
of investments and foreign
currencies 4,236,410 (273,575) (720,632) --
NET ASSETS $48,542,569 $34,552,719 $36,059,581 $233,158,761
Class A Shares
Net Assets $35,376,463 $30,536,742 $32,012,747 $228,123,599
Shares Outstanding 3,057,962 3,065,460 3,404,222 228,123,601
Net Asset Value Per Share (and
redemption price) $11.57 $9.96 $9.40 $1.00
Maximum Public Offering Price $12.28(1) $10.46(2) $9.87(2) $1.00
Class B Shares
Net Assets $ 2,840,714 $ 2,374,381 $ 1,958,114 $ 1,172,583
Shares Outstanding 246,951 238,328 208,291 1,172,584
Net Asset Value Per Share(3) $11.50 $9.96 $9.40 $1.00
Class C Shares
Net Assets $ 7,547,641 $ 776,323 $ 1,082,445 $ 444,324
Shares Outstanding 655,719 77,950 115,098 444,324
Net Asset Value Per Share(4) $11.51 $9.96 $9.40 $1.00
Class I Shares
Net Assets $ 461,409 -- -- $ 1,906,480
Shares Outstanding 39,838 -- -- 1,906,476
Net Asset Value Per Share (and
redemption price) $11.58 -- -- $1.00
Class X Shares
Net Assets $ 2,316,342 $ 865,273 $ 1,006,275 $ 1,511,775
Shares Outstanding 201,151 86,922 107,045 1,511,776
Net Asset Value Per Share(3) $11.52 $9.95 $9.40 $1.00
ING Funds Annual Report / October 31, 1999 53
</TABLE>
<PAGE> 56
FOR THE PERIOD ENDED OCTOBER 31, 1999
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
ING ING ING ING ING ING
Internet Small Cap Focus Mid Cap Large Cap Tax Efficient
Fund(1) Growth Fund(2) Fund(2) Growth Fund(2) Growth Fund(2) Equity Fund(2)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 32,515 $ 57,673 $ 142,976 $ 134,541 $ 91,966 $ 268,882
Dividend -- 52,746 174,912 103,292 200,932 423,830
Less: foreign withholding tax -- -- -- -- -- --
----------- ---------- --------- ---------- ---------- -----------
Total income 32,515 110,419 317,888 237,833 292,898 692,712
EXPENSES:
Management fees (Note 3) 107,458 246,303 289,222 241,513 256,234 310,922
Distribution fees (Note 3) 49,383 125,134 148,462 121,650 185,041 207,041
Transfer agent fees (Note 3) 59,116 85,158 104,403 77,774 152,736 168,070
Shareholder services fees (Note 3) 21,492 61,576 72,306 60,125 85,403 97,163
Registration fees 11,222 34,937 36,267 39,286 42,934 40,890
Fund accounting fees (Note 3) 14,043 37,500 37,500 37,500 37,500 37,500
Professional fees 22,662 29,416 32,698 29,246 33,067 36,742
Custodian fees 11,851 18,987 15,755 18,478 18,635 19,586
Reports to shareholders 7,609 12,736 14,346 13,483 16,606 21,573
Other expenses 1,961 8,344 8,591 8,366 8,864 8,944
----------- ---------- --------- ---------- ---------- -----------
Total expenses 306,797 660,091 759,550 647,421 837,020 948,431
----------- ---------- --------- ---------- ---------- -----------
Expenses waived and reimbursed by
Manager and Distributor (Note 3) (153,685) (323,211) (360,259) (318,380) (361,440) (413,162)
----------- ---------- --------- ---------- ---------- -----------
Net expenses 153,112 336,880 399,291 329,041 475,580 535,269
NET INVESTMENT INCOME (LOSS) (120,597) (226,461) (81,403) (91,208) (182,682) 157,443
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCIES (NOTES 4 AND 5):
Realized gain (loss) from:
Security transactions 1,378,481 (1,580,276) 1,444,110 (2,076,959) (1,396,880) (7,352)
Foreign currency transactions (2,157) -- -- -- -- --
NET REALIZED GAIN (LOSS) 1,376,324 (1,580,276) 1,444,110 (2,076,959) (1,396,880) (7,352)
Net increase (decrease) in
unrealized appreciation from:
Investments 9,749,365 5,351,933 5,349,184 3,192,713 7,281,272 6,411,533
Foreign Currencies -- -- -- -- -- --
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) 9,749,365 5,351,933 5,349,184 3,192,713 7,281,272 6,411,533
Net realized and unrealized gain
(loss) on investments
and foreign currencies 11,125,689 3,771,657 6,793,294 1,115,754 5,884,392 6,404,181
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $11,005,092 $3,545,196 $6,711,891 $1,024,546 $5,701,710 $6,561,624
</TABLE>
1. Commenced operations on July 1, 1999.
2. Commenced operations on December 15, 1998.
See Notes to Financial Statements.
54 ING Funds Annual Report / October 31, 1999
<PAGE> 57
<TABLE>
<CAPTION>
ING Global
ING ING Information ING
Growth & International Technology European
Income Fund(2) Bond Fund(2) Fund(2) Equity Fund(2)
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 48,194 $ 911,334 $ 65,548 $ 13,320
Dividend 355,140 -- 34,249 573,330
Less: foreign withholding tax -- (18,306) (3,787) (64,328)
---------- ----------- ----------- ----------
Total income 403,334 893,028 96,010 522,322
EXPENSES:
Management fees (Note 3) 212,950 219,617 432,856 285,737
Distribution fees (Note 3) 145,285 111,593 179,369 126,332
Transfer agent fees (Note 3) 102,839 71,527 156,881 84,632
Shareholder services fees (Note 3) 70,984 54,901 86,571 62,117
Registration fees 36,465 39,557 38,896 34,910
Fund accounting fees (Note 3) 37,500 37,500 37,500 37,500
Professional fees 31,076 35,436 36,795 33,119
Custodian fees 17,665 26,142 36,349 75,269
Reports to shareholders 16,009 10,288 20,568 14,330
Other expenses 8,537 6,524 9,840 8,386
---------- ----------- ----------- ----------
Total expenses 679,310 613,085 1,035,625 762,332
---------- ----------- ----------- ----------
Expenses waived and reimbursed by (305,400) (282,641) (470,526) (356,350)
Manager and Distributor (Note 3) ---------- ----------- ----------- ----------
Net expenses 373,910 330,444 565,099 405,982
NET INVESTMENT INCOME (LOSS) 29,424 562,584 (469,089) 116,340
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCIES (NOTES 4 AND 5):
Realized gain (loss) from:
Security transactions 88,071 (1,345,593) 3,984,226 685,985
Foreign currency transactions -- (25,523) (22,783) 1,286
NET REALIZED GAIN (LOSS) 88,071 (1,371,116) 3,961,443 687,271
Net increase (decrease) in
unrealized appreciation from:
Investments 3,892,599 (1,884,277) 19,514,197 1,747,335
Foreign Currencies -- (6,705) (2,641) (942)
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) 3,892,599 (1,890,982) 19,511,556 1,746,393
Net realized and unrealized gain
(loss) on investments
and foreign currencies 3,980,670 (3,262,098) 23,472,999 2,433,664
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $4,010,094 $(2,699,514) $23,003,910 $2,550,004
<CAPTION>
ING ING ING ING ING Money
International Global Brand High Yield Intermediate Market
Equity Fund(2) Names Fund(2) Bond Fund(2) Bond Fund(2) Fund(2)
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 94,745 $ 31,606 $2,268,544 $ 1,788,315 $3,595,273
Dividend 468,607 452,035 -- -- --
Less: foreign withholding tax (51,249) (32,735) -- -- --
---------- ---------- ---------- ------------ ----------
Total income 512,103 450,906 2,268,544 1,788,315 3,595,273
EXPENSES:
Management fees (Note 3) 315,441 346,777 172,459 140,136 168,913
Distribution fees (Note 3) 127,207 190,220 136,758 146,136 339,487
Transfer agent fees (Note 3) 74,762 146,631 94,679 99,547 223,899
Shareholder services fees (Note 3) 63,077 86,406 66,331 70,068 168,667
Registration fees 37,780 43,455 36,742 37,468 117,264
Fund accounting fees (Note 3) 37,500 37,500 37,500 37,500 37,500
Professional fees 33,032 33,865 32,299 31,466 30,071
Custodian fees 57,924 30,307 21,441 15,946 21,367
Reports to shareholders 14,249 22,860 15,207 14,850 15,791
Other expenses 8,407 9,041 8,286 8,302 8,205
---------- ---------- ---------- ------------ ----------
Total expenses 769,379 947,062 621,702 601,419 1,131,164
---------- ---------- ---------- ------------ ----------
Expenses waived and reimbursed by (365,822) (387,728) (344,152) (313,058) (629,729)
Manager and Distributor (Note 3) ---------- ---------- ---------- ------------ ----------
Net expenses 403,557 559,334 277,550 288,361 501,435
NET INVESTMENT INCOME (LOSS) 108,546 (108,428) 1,990,994 1,499,954 3,093,838
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCIES (NOTES 4 AND 5):
Realized gain (loss) from:
Security transactions 1,417,325 795,580 42,709 (1,238,970) --
Foreign currency transactions 19,752 (51,927) -- -- --
NET REALIZED GAIN (LOSS) 1,437,077 743,653 42,709 (1,238,970) --
Net increase (decrease) in
unrealized appreciation from:
Investments 3,219,264 4,236,166 (273,575) (720,632) --
Foreign Currencies (554) 244 -- -- --
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) 3,218,710 4,236,410 (273,575) (720,632) --
Net realized and unrealized gain
(loss) on investments
and foreign currencies 4,655,787 4,980,063 (230,866) (1,959,602) --
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $4,764,333 $4,871,635 $1,760,128 $ (459,648) $3,093,838
</TABLE>
ING Funds Annual Report / October 31, 1999 55
<PAGE> 58
FOR THE PERIOD ENDED OCTOBER 31, 1999
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ING ING ING ING ING ING
Internet Small Cap Focus Mid Cap Large Cap Tax Efficient
Fund(1) Growth Fund(2) Fund(2) Growth Fund(2) Growth Fund(2) Equity Fund(2)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Net investment income (loss) $ (120,597) $ (226,461) $ (81,403) $ (91,208) $ (182,682) $ 157,443
Net realized gain (loss) on investments
and foreign currencies 1,376,324 (1,580,276) 1,444,110 (2,076,959) (1,396,880) (7,352)
Net change in unrealized appreciation
(depreciation) 9,749,365 5,351,933 5,349,184 3,192,713 7,281,272 6,411,533
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 11,005,092 3,545,196 6,711,891 1,024,546 5,701,710 6,561,624
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares -- -- -- -- -- --
Class B shares -- -- -- -- -- --
Class C shares -- -- -- -- -- --
Class I shares -- -- -- -- -- --
Class X shares -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
-- -- -- -- -- --
Return of Capital
Class A shares -- -- -- -- -- --
Class B shares -- -- -- -- -- --
Class C shares -- -- -- -- -- --
Class I shares -- -- -- -- -- --
Class X shares -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
-- -- -- -- -- --
TOTAL DISTRIBUTIONS PAID -- -- -- -- -- --
CAPITAL SHARE TRANSACTIONS (NOTE 9):
Net proceeds from sale of shares
Class A shares 31,032,102 27,733,436 30,105,049 27,612,489 33,983,244 41,141,495
Class B shares 12,538,049 720,182 3,195,205 646,218 3,743,914 6,877,202
Class C shares 4,757,431 388,119 963,946 385,487 10,475,479 1,246,004
Class I shares -- -- -- 414,531 49,138 --
Class X shares 855,683 533,637 1,057,689 329,944 4,974,893 3,083,700
----------- ----------- ----------- ----------- ----------- -----------
49,183,265 29,375,374 35,321,889 29,388,669 53,226,668 52,348,401
Dividend reinvestments
Class A shares -- -- -- -- -- --
Class B shares -- -- -- -- -- --
Class C shares -- -- -- -- -- --
Class I shares -- -- -- -- -- --
Class X shares -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
-- -- -- -- -- --
Cost of shares repurchased
Class A shares (2,306,139) (1,281,046) (823,282) (559,344) (1,383,990) (1,419,922)
Class B shares (458,465) (14,674) (331,601) (9,976) (44,163) (156,928)
Class C shares (408,839) (2,855) (23,655) (2,855) (118,613) (46,936)
Class I shares -- -- -- (3,267) -- --
Class X shares (6,000) (12,227) (3,513) (8,660) (123,341) (208,293)
----------- ----------- ----------- ----------- ----------- -----------
(3,179,443) (1,310,802) (1,182,051) (584,102) (1,670,107) (1,832,079)
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS 46,003,822 28,064,572 34,139,838 28,804,567 51,556,561 50,516,322
INCREASE IN NET ASSETS 57,008,914 31,609,768 40,851,729 29,829,113 57,258,271 57,077,946
NET ASSETS:
Beginning of period 7,550 7,143 7,143 7,143 7,143 7,143
END OF PERIOD $57,016,464 $31,616,911 $40,858,872 $29,836,256 $57,265,414 $57,085,089
</TABLE>
1. Commenced operations on July 1, 1999.
2. Commenced operations on December 15, 1998.
See Notes to Financial Statements.
56 ING Funds Annual Report/October 31, 1999
<PAGE> 59
<TABLE>
<CAPTION>
ING Global
ING ING Information ING
Growth & International Technology European
Income Fund(2) Bond Fund(2) Fund(2) Equity Fund(2)
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Net investment income (loss) $ 29,424 $ 562,584 $ (469,089) $ 116,340
Net realized gain (loss) on investments
and foreign currencies 88,071 (1,371,116) 3,961,443 687,271
Net change in unrealized appreciation
(depreciation) 3,892,599 (1,890,982) 19,511,556 1,746,393
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 4,010,094 (2,699,514) 23,003,910 2,550,004
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares (36,973) (356) -- --
Class B shares (403) (4) -- --
Class C shares (75) -- -- --
Class I shares -- -- -- --
Class X shares (616) (6) -- --
----------- ----------- ----------- -----------
(38,067) (366) -- --
Return of Capital
Class A shares -- (551,089) -- --
Class B shares -- (5,936) -- --
Class C shares -- (99) -- --
Class I shares -- (51) -- --
Class X shares -- (9,146) -- --
----------- ----------- ----------- -----------
-- (566,321) -- --
TOTAL DISTRIBUTIONS PAID (38,067) (566,687) -- --
CAPITAL SHARE TRANSACTIONS (NOTE 9):
Net proceeds from sale of shares
Class A shares 31,362,914 26,645,837 34,340,200 34,004,254
Class B shares 1,118,285 545,209 4,934,897 826,835
Class C shares 830,860 15,073 1,826,104 56,964
Class I shares -- 5,813 -- --
Class X shares 1,487,100 794,628 2,009,012 681,711
----------- ----------- ----------- -----------
34,799,159 28,006,560 43,110,213 35,569,764
Dividend reinvestments
Class A shares 36,868 550,002 -- --
Class B shares 388 4,861 -- --
Class C shares 74 94 -- --
Class I shares -- 50 -- --
Class X shares 616 9,128 -- --
----------- ----------- ----------- -----------
37,946 564,135 -- --
Cost of shares repurchased
Class A shares (279,659) (379,828) (542,965) (7,742,471)
Class B shares (28,455) (1,867) (61,977) (11,090)
Class C shares (6,897) (2,758) (27,703) --
Class I shares -- (402) -- --
Class X shares (80,601) (20,606) (79,046) (9,842)
----------- ----------- ----------- -----------
(395,612) (405,461) (711,691) (7,763,403)
----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS 34,441,493 28,165,234 42,398,522 27,806,361
INCREASE IN NET ASSETS 38,413,520 24,899,033 65,402,432 30,356,365
NET ASSETS:
Beginning of period 7,143 7,143 7,143 7,143
END OF PERIOD $38,420,663 $24,906,176 $65,409,575 $30,363,508
<CAPTION>
ING ING ING ING ING Money
International Global Brand High Yield Intermediate Market
Equity Fund(2) Names Fund(2) Bond Fund(2) Bond Fund(2) Fund(2)
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Net investment income (loss) $ 108,546 $ (108,428) $ 1,990,994 $ 1,499,954 $ 3,093,838
Net realized gain (loss) on investments
and foreign currencies 1,437,077 743,653 42,709 (1,238,970) --
Net change in unrealized appreciation
(depreciation) 3,218,710 4,236,410 (273,575) (720,632) --
----------- ----------- ----------- ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 4,764,333 4,871,635 1,760,128 (459,648) 3,093,838
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares -- -- (1,875,514) (1,382,288) (3,055,168)
Class B shares -- -- (65,719) (54,075) (7,890)
Class C shares -- -- (19,232) (23,989) (5,583)
Class I shares -- -- -- -- (5,232)
Class X shares -- -- (30,529) (39,602) (19,965)
----------- ----------- ----------- ----------- ------------
-- -- (1,990,994) (1,499,954) (3,093,838)
Return of Capital
Class A shares -- -- -- -- --
Class B shares -- -- -- -- --
Class C shares -- -- -- -- --
Class I shares -- -- -- -- --
Class X shares -- -- -- -- --
----------- ----------- ----------- ----------- ------------
-- -- -- -- --
TOTAL DISTRIBUTIONS PAID -- -- (1,990,994) (1,499,954) (3,093,838)
CAPITAL SHARE TRANSACTIONS (NOTE 9):
Net proceeds from sale of shares
Class A shares 29,823,874 33,423,997 29,549,612 42,274,629 325,378,899
Class B shares 687,875 2,772,072 2,474,568 3,175,052 1,897,590
Class C shares 402,152 7,249,758 784,122 1,097,966 675,705
Class I shares 85,270 456,052 -- -- 1,901,244
Class X shares 325,080 2,238,091 885,049 2,271,631 2,378,957
----------- ----------- ----------- ----------- ------------
31,324,251 46,139,970 33,693,351 48,819,278 332,232,395
Dividend reinvestments
Class A shares -- -- 1,855,772 1,366,772 3,010,550
Class B shares -- -- 45,149 53,854 7,368
Class C shares -- -- 17,932 23,450 5,450
Class I shares -- -- -- -- 5,232
Class X shares -- -- 30,325 38,177 19,653
----------- ----------- ----------- ----------- ------------
-- -- 1,949,178 1,482,253 3,048,253
Cost of shares repurchased
Class A shares (2,405,072) (2,263,633) (693,436) (9,831,107) (100,268,229)
Class B shares (48,745) (39,010) (116,958) (1,197,919) (734,755)
Class C shares -- (131,596) (19,911) (11,653) (239,212)
Class I shares -- (4,595) -- -- --
Class X shares (2,127) (37,345) (35,782) (1,248,812) (886,834)
----------- ----------- ----------- ----------- ------------
(2,455,944) (2,476,179) (866,087) (12,289,491) (102,129,030)
----------- ----------- ----------- ----------- ------------
NET INCREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS 28,868,307 43,663,791 34,776,442 38,012,040 233,151,618
INCREASE IN NET ASSETS 33,632,640 48,535,426 34,545,576 36,052,438 233,151,618
NET ASSETS:
Beginning of period 7,143 7,143 7,143 7,143 7,143
END OF PERIOD $33,639,783 $48,542,569 $34,552,719 $36,059,581 $233,158,761
</TABLE>
ING Funds Annual Report / October 31, 1999 57
<PAGE> 60
OCTOBER 31, 1999
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
ING Funds Trust (the "Trust") was organized as a Delaware business trust on
July 30, 1998 and is registered with the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended (the "Investment
Company Act"), as an open-end management investment company. The Trust
consists of twenty-one investment portfolios (each, a "Fund" and,
collectively, the "Funds"): the ING U.S. Treasury Money Market Fund, ING
Money Market Fund, ING Intermediate Bond Fund, ING High Yield Bond Fund, ING
International Bond Fund, ING Mortgage Income Fund, ING National Tax-Exempt
Bond Fund, ING Large Cap Growth Fund, ING Growth & Income Fund, ING Mid Cap
Growth Fund, ING Small Cap Growth Fund, ING Balanced Fund, ING Global Brand
Names Fund, ING International Equity Fund, ING Emerging Markets Equity Fund,
ING European Equity Fund, ING Tax Efficient Equity Fund, ING Focus Fund, ING
Global Information Technology Fund, ING Global Real Estate Fund and ING
Internet Fund. Each Fund, except for the ING National Tax-Exempt Bond Fund,
offers five classes of shares, which have been designated as Class A, B, C,
I and X shares. The ING National Tax-Exempt Bond Fund offers only Class A, B
and C shares. The ING U.S. Treasury Money Market Fund, ING Mortgage Income
Fund, ING National Tax-Exempt Bond Fund, ING Balanced Fund, ING Emerging
Markets Equity Fund, and ING Global Real Estate Fund have not commenced
operations. The ING Internet Fund commenced operations on July 1, 1999. The
remaining Funds commenced operations on December 15, 1998.
2. SIGNIFICANT ACCOUNTING POLICIES
The Funds' financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
SECURITY VALUATION Securities listed on an exchange or trading in the
over-the-counter market are valued on the basis of the last sale prior to
the time the valuation is made. If there has been no sale since the
immediately previous valuation, then the average of the last bid and asked
prices is used. Quotations are taken from the exchange where the security is
primarily traded. Portfolio securities which are primarily traded on foreign
exchanges are generally valued at the preceding closing values of such
securities on their respective exchanges, except that when an occurrence
subsequent to the time a foreign security is valued is likely to have
changed such value, then the fair value of those securities will be
determined by consideration of other factors by or under the direction of
the Board of Trustees. Securities for which market quotations are not
readily available are valued at the fair value as determined in good faith
by or at the direction of the Board of Trustees. Bonds and other fixed
income securities are valued by using market quotations and may be valued on
the basis of prices provided by a pricing service approved by the Board of
Trustees. The amortized cost method of valuation is used with respect to
debt obligations with 60 days or less remaining to maturity, unless this
method does not represent fair value.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME Investment transactions are
recorded on trade date. Realized gains and losses from security and foreign
currency transactions are calculated on the identified cost basis. Dividend
income is recorded on the ex-dividend date. Interest income is recorded on
an accrual basis. Discounts and premiums are treated as adjustments to
interest income and identified costs of investments over the lives of the
respective investments.
FOREIGN CURRENCY TRANSLATION The books and records of the Funds are
maintained in U.S. dollars as follows: (1) the foreign currency market value
of investment securities and other assets and liabilities stated in foreign
currencies are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
rate of exchange prevailing on the respective dates of such transactions.
The Funds do not isolate the portion of operations resulting from changes in
foreign exchange rates on investments from the fluctuations arising from
changes in market prices of foreign securities held. Such fluctuations are
included in net realized and unrealized gain or loss from investments. Net
realized exchange gain or loss from foreign currency transactions represent
net foreign exchange gain or loss from forward foreign currency contracts,
deposition of foreign currencies, currency gain or loss realized between the
trade and settlement dates on security transactions, and the difference
between the amount of net investment income recorded on the Funds'
accounting records and the U.S. dollar equivalent amounts actually received
or paid. Net unrealized foreign exchange gain or loss arises from changes in
value of assets and liabilities, other than investments in securities, as a
result of changes in exchange rates.
58 ING Funds Annual Report / October 31, 1999
<PAGE> 61
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS The Funds, except the ING Money
Market Fund, are permitted to enter into forward foreign currency exchange
contracts solely for purposes of protecting against adverse changes in
foreign currency exchange rates. A forward foreign currency exchange
contract involves an obligation to purchase or sell a specific currency at a
future date. These contracts are marked to market daily, by recognizing the
difference between the contract exchange rate and the current market rate as
an unrealized gain or loss. Realized gains or losses are recognized when the
contracts are settled. When a Fund enters into a forward foreign currency
exchange contract to buy a foreign currency, it will place cash or readily
marketable securities in a segregated account in an amount equal to the
value of its total assets committed to the consummation of the forward
contract. If the value of the securities placed in the segregated account
declines, additional cash or securities will be placed in the account so
that the value of the account will be equal to the amount of the Fund's
commitment with respect to the contract.
Risks may arise from forward foreign currency exchange contracts with
respect to the potential inability of counterparties to meet the terms of
their contracts. A forward foreign currency exchange contract may also limit
any potential gain which might result should the value of such currency
increase.
U.S. FEDERAL TAX STATUS Each Fund intends to distribute substantially all of
its taxable income and to comply with the other requirements of the Internal
Revenue Code of 1986, as amended, applicable to regulated investment
companies. Accordingly, no provision for U.S. Federal income taxes is
required. In addition, by distributing during each calendar year
substantially all of its ordinary income and capital gains, if any, each
Fund intends not to be subject to U.S. Federal excise tax.
FOREIGN WITHHOLDING TAXES Income received from sources outside of the United
States may be subject to withholding and other taxes imposed by countries
other than the United States.
DIVIDENDS AND DISTRIBUTIONS The ING Money Market Fund, ING Intermediate Bond
Fund, ING High Yield Bond Fund and ING International Bond Fund declare
dividends daily from net investment income. Dividends are paid monthly,
generally on the last business day of each month. Substantially all of the
net investment income of the ING Growth & Income Fund is distributed in the
form of quarterly dividends to shareholders. The ING Large Cap Growth Fund,
ING Mid Cap Growth Fund, ING Small Cap Growth Fund, ING Global Brand Names
Fund, ING International Equity Fund, ING European Equity Fund, ING Tax
Efficient Equity Fund, ING Focus Fund, ING Global Information Technology
Fund and ING Internet Fund declare and pay annually substantially all of the
Funds' net investment income. Distribution of net realized gains, if any,
will be declared and paid at least annually by each Fund.
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gain distributions are determined in accordance
with income tax regulations.
EXPENSES Expenses directly attributable to a Fund and a specific class are
charged to that Fund or class, other expenses are allocated proportionately
among each Fund within the Trust in relation to the net assets of each Fund,
or on another reasonable basis.
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
MANAGER AND SUB-ADVISERS ING Mutual Funds Management Co. LLC (the
"Manager"), a wholly-owned indirect subsidiary of ING Groep, N.V. ("ING
Group"), serves as the manager of the Funds pursuant to a Management
Agreement with the Trust. The Trust pays the Manager for its services under
the Management Agreement a fee, payable monthly, based on an annual rate of
the average daily net assets of each Fund. The Manager has entered into
various Sub-Advisory Agreements with entities (the "Sub-Advisers")
ING Funds Annual Report / October 31, 1999 59
<PAGE> 62
OCTOBER 31, 1999
NOTES TO FINANCIAL STATEMENTS
(continued)
which are wholly-owned indirect subsidiaries of ING Group. Under the
Sub-Advisory Agreements, the Sub-Advisers have full investment discretion and
make all determinations with respect to the investment of a Fund's assets and
the purchase and sale of portfolio securities and other investments. Pursuant to
the Sub-Advisory Agreements, the Manager pays to the Sub-Advisers a monthly fee
based on an annual rate of the average daily net assets of each Fund. The
applicable management fee, sub-advisory fee, and the Sub-Adviser for each Fund
are indicated below:
<TABLE>
<CAPTION>
Fund Name Sub-Adviser Management Fee Sub-Advisory Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ING Internet Fund ING Investment Management Advisors B.V. 1.25% 0.625%
ING Small Cap Growth Fund Baring Asset Management, Inc. 1.00 0.500
ING Focus Fund Furman Selz Capital Management LLC 1.00 0.500
ING Mid Cap Growth Fund Furman Selz Capital Management LLC 1.00 0.500
ING Large Cap Growth Fund Baring Asset Management, Inc. 0.75 0.375
ING Tax Efficient Equity Fund Delta Asset Management 0.80 0.400
ING Growth & Income Fund ING Investment Management LLC 0.75 0.375
ING International Bond Fund Baring International Investment Ltd. 1.00 0.500
ING Global Information Technology Fund ING Investment Management Advisors B.V. 1.25 0.625
ING European Equity Fund ING Investment Management Advisors B.V. 1.15 0.575
ING International Equity Fund Baring International Investment Ltd. 1.25 0.625
ING Global Brand Names Fund ING Investment Management Advisors B.V. 1.00 0.500
ING High Yield Bond Fund ING Investment Management LLC 0.65 0.325
ING Intermediate Bond Fund ING Investment Management LLC 0.50 0.250
ING Money Market Fund ING Investment Management LLC 0.25 0.125
</TABLE>
For the period ended October 31, 1999, the Manager and the Sub-Advisers were
entitled to and voluntarily waived management and sub-advisory fees as
indicated below:
<TABLE>
<CAPTION>
Management Management Sub-Advisory Sub-Advisory
Fund Name Fee Entitled Fee Waived Fee Entitled Fee Waived
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ING Internet Fund $107,458 $ 80,586 $ 53,729 $ 40,293
ING Small Cap Growth Fund 246,303 184,750 123,152 92,375
ING Focus Fund 289,222 216,924 144,611 108,462
ING Mid Cap Growth Fund 241,513 180,890 120,757 90,445
ING Large Cap Growth Fund 256,234 192,239 128,117 96,120
ING Tax Efficient Equity Fund 310,922 233,232 155,461 116,616
ING Growth & Income Fund 212,950 159,721 106,475 79,861
ING International Bond Fund 219,617 164,722 109,809 82,361
ING Global Information Technology Fund 432,856 324,634 216,428 162,317
ING European Equity Fund 285,737 214,302 142,869 107,151
ING International Equity Fund 315,441 236,564 157,721 118,282
ING Global Brand Names Fund 346,777 260,132 173,389 130,066
ING High Yield Bond Fund 172,459 129,351 86,230 64,676
ING Intermediate Bond Fund 140,136 105,110 70,068 52,555
ING Money Market Fund 168,913 126,675 84,457 63,338
</TABLE>
In addition, for the period ended October 31, 1999, the Manager has agreed to
reimburse expenses amounting to $44,647 for ING Internet Fund, $30,883 for ING
Small Cap Growth Fund, $19,352 for ING Focus Fund, $31,256 for ING Mid Cap
Growth Fund, $38,295 for ING Large Cap Growth Fund, $25,408 for ING Tax
Efficient Equity Fund, $23,221 for ING Growth & Income Fund, $33,596 for ING
European Equity Fund, $17,386 for ING International Equity Fund, $50,538 for ING
High Yield Bond Fund, $37,779 for ING Intermediate Bond Fund and $117,515 for
ING Money Market Fund.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICING PLAN The Trust, on behalf of the
Funds, has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act. Each Fund pays ING Funds Distributor, Inc. (the
"Distributor") monthly, based on an annual rate of up to 0.50% of average daily
net assets attributable to the Funds' Class A shares and 0.75% of average daily
net assets attributable to the Funds' Class B, C, and X shares. The distribution
fee for all classes may be used by the Distributor for the purpose of financing
any activity which is primarily intended to result in the sale of shares of the
applicable Fund.
The Funds have adopted a Shareholder Servicing Plan pursuant to which each may
pay a service fee up to an annual rate of 0.25% of a Fund's average daily net
assets to various banks, trust companies, broker-dealers or other financial
organizations including the Manager and its affiliates.
60 ING Funds Annual Report / October 31, 1999
<PAGE> 63
For the period ended October 31, 1999, the Distributor voluntarily waived part
of the distribution fees. The distribution fees to which the Distributor was
entitled, the distribution fees waived, and the shareholder servicing fees are
indicated below:
<TABLE>
<CAPTION>
Distribution Fee Distribution Fee Shareholder Servicing
Fund Name Entitled Waived Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ING Internet Fund ............................................. $ 49,383 $ 24,144 $ 21,492
ING Small Cap Growth Fund ..................................... 125,134 95,375 61,576
ING Focus Fund ................................................ 148,462 109,529 72,306
ING Mid Cap Growth Fund ....................................... 121,650 93,965 60,125
ING Large Cap Growth Fund ..................................... 185,041 113,889 85,403
ING Tax Efficient Equity Fund ................................. 207,041 135,128 97,163
ING Growth & Income Fund ...................................... 145,285 108,271 70,984
ING International Bond Fund ................................... 111,593 84,987 54,901
ING Global Information Technology Fund ........................ 179,369 128,548 86,571
ING European Equity Fund ...................................... 126,332 96,013 62,117
ING International Equity Fund ................................. 127,207 99,234 63,077
ING Global Brand Names Fund ................................... 190,220 110,399 86,406
ING High Yield Bond Fund ...................................... 136,758 124,469 66,331
ING Intermediate Bond Fund .................................... 146,136 128,137 70,068
ING Money Market Fund ......................................... 339,487 284,318 168,667
</TABLE>
In addition, the Distributor collects sales charges imposed on sales of each
Fund's Class A shares, except for the ING Money Market Fund, and reallows a
portion of such charges to dealers through which the sales are made. There is
also a contingent deferred sales charge ("CDSC") on Class B, C and X shares,
which applies if redemption occurs within six years of purchase for the Class B
and X shares and within one year of purchase for the Class C shares. Class A
share purchases equal to or exceeding $1,000,000 in the aggregate, which did not
incur an initial sales charge, are subject to a 1.00% CDSC if redeemed within
one year of purchase.
For the period ended October 31, 1999, sales charges and CDSC's paid to the
Distributor were:
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares Class X Shares
Fund Name Sales Charges CDSC CDSC CDSC
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ING Internet Fund .................................. $1,162,212 $ 14,573 $ 5,438 $ 3,953
ING Small Cap Growth Fund .......................... 31,758 132 20 3
ING Focus Fund ..................................... 96,524 1,996 44 11
ING Mid Cap Growth Fund ............................ 38,092 26 20 5
ING Large Cap Growth Fund .......................... 155,686 665 1,127 109
ING Tax Efficient Equity Fund ...................... 234,878 2,668 163 2,525
ING Growth & Income Fund ........................... 99,821 1,215 57 13
ING International Bond Fund ........................ 15,209 12 23 151
ING Global Information Technology Fund ............. 344,105 901 65 11
ING European Equity Fund ........................... 18,526 549 -- --
ING International Equity Fund ...................... 48,783 980 -- 100
ING Global Brand Names Fund ........................ 159,116 401 25 7
ING High Yield Bond Fund ........................... 80,353 316 33 --
ING Intermediate Bond Fund ......................... 145,046 939 27 364
ING Money Market Fund .............................. -- 1,075 30 656
</TABLE>
OTHER TRANSACTIONS WITH AFFILIATES ING Fund Services Co. LLC ("ING Fund
Services") has entered into a Fund Services Agreement with the Funds pursuant to
which ING Fund Services will perform or engage third parties to perform transfer
agency, fund accounting, account services and other services. Under the Fund
Services Agreement, each Fund may pay ING Fund Services up to $40,000 for fund
accounting services plus out of pocket expenses, $17 per account for transfer
agent services plus out of pocket expenses and up to 0.25% of each Fund's
average daily net assets annually for account servicing activities.
All officers and one trustee of the Trust are employees of the Manager.
ING Funds Annual Report/October 31, 1999 61
<PAGE> 64
October 31, 1999
NOTES TO FINANCIAL STATEMENTS
4. INVESTMENTS IN SECURITIES
For the period ended October 31, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) and the aggregate gross unrealized appreciation and
depreciation of investments for U.S. Federal income tax purpose were as
follows:
<TABLE>
<CAPTION>
Net Appreciation/
Fund Name Purchases Sales Appreciation Depreciation (Depreciation)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ING Internet Fund ....................... $ 49,776,972 $ 5,670,196 $ 10,541,559 $ 1,148,563 $ 9,392,996
ING Small Cap Growth Fund ............... 65,040,330 37,822,008 6,157,744 846,398 5,311,346
ING Focus Fund .......................... 56,373,393 27,712,628 5,877,084 565,040 5,312,044
ING Mid Cap Growth Fund ................. 37,681,902 9,877,554 5,368,155 2,175,442 3,192,713
ING Large Cap Growth Fund ............... 70,476,713 22,504,102 8,180,097 898,825 7,281,272
ING Tax Efficient Equity Fund ........... 45,181,505 3,177,177 8,650,628 2,239,095 6,411,533
ING Growth & Income Fund ................ 43,971,749 9,976,385 5,508,415 1,615,816 3,892,599
ING International Bond Fund ............. 59,492,901 32,224,899 14,199 2,062,601 (2,048,402)
ING Global Information Technology Fund .. 62,401,653 21,861,224 20,987,358 1,618,320 19,369,038
ING European Equity Fund ................ 44,937,258 17,362,079 3,209,181 1,571,152 1,638,029
ING International Equity Fund ........... 56,273,824 28,248,905 3,956,768 825,785 3,130,983
ING Global Brand Names Fund ............. 47,775,513 4,258,831 7,899,720 3,666,312 4,233,408
ING High Yield Bond Fund ................ 237,398,923 204,299,054 236,580 681,742 (445,162)
ING Intermediate Bond Fund .............. 164,283,610 128,386,156 41,820 918,093 (876,273)
</TABLE>
5. FORWARD FOREIGN CURRENCY CONTRACTS
At October 31, 1999, the ING International Bond Fund, ING Global Information
Technology Fund, ING European Equity Fund and ING International Equity Fund
had open forward foreign currency contracts as described below. These Funds
bear the market risk that arises from changes in foreign currency exchange
rates. The unrealized gain (loss) on the contracts reflected in the
accompanying financial statements were as follows:
<TABLE>
<CAPTION>
ING INTERNATIONAL BOND FUND Local Market Settlement Unrealized
Currency Cost Value Date Loss
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TO BUY:
EURO 1,635,014 $1,740,292 $1,719,626 11/2/1999 $(20,666)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Gross unrealized depreciation on forward foreign currency contract $(20,666)
-------
</TABLE>
<TABLE>
<CAPTION>
ING GLOBAL INFORMATION TECHNOLOGY FUND Local Market Settlement Unrealized
Currency Cost Value Date Gain
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TO BUY:
British Pound 18,238 $29,829 $29,971 11/3/1999 $ 142
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Gross unrealized appreciation on forward foreign currency contract $ 142
---------
</TABLE>
<TABLE>
<CAPTION>
ING EUROPEAN EQUITY FUND Local Cost/ Market Settlement Unrealized
Currency Proceeds Value Date Gain (Loss)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TO BUY:
British Pound 25,646 $ 41,945 $ 42,144 11/3/1999 $ 199
EURO 1,156 1,218 1,216 11/1/1999 (2)
EURO 54,166 57,361 56,969 11/3/1999 (392)
EURO 24,749 26,209 26,030 11/30/1999 (179)
-------- -------- --------
$126,733 $126,359 (374)
- ------------------------------------------------------------------------------------------------------------------------------------
TO SELL:
British Pound 25,625 $ 42,486 $ 42,110 11/1/1999 $ 376
EURO 26,087 27,548 27,437 11/30/1999 111
-------- -------- -------
$ 70,034 $ 69,547 $ 487
- ------------------------------------------------------------------------------------------------------------------------------------
Gross unrealized appreciation on forward foreign currency contracts $ 686
-------
Gross unrealized depreciation on forward foreign currency contracts $ 573
-------
</TABLE>
62 ING Funds Annual Report/October 31, 1999
<PAGE> 65
<TABLE>
<CAPTION>
ING INTERNATIONAL EQUITY FUND Local Cost/ Market Settlement Unrealized
Currency Proceeds Value Date Loss
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TO BUY:
British Pound 147,952 $245,304 $243,129 11/2/1999 $(2,175)
Japanese Yen 8,790,038 84,658 84,301 11/1/1999 (357)
Japanese Yen 42,864,138 411,088 411,088 11/2/1999 --
-------- -------- -------
$741,050 $738,518 $(2,532)
- ------------------------------------------------------------------------------------------------------------------------------------
TO SELL:
British Pound 64,320 $105,195 $105,697 11/3/1999 $ (502)
- ------------------------------------------------------------------------------------------------------------------------------------
Gross unrealized depreciation on forward foreign currency contracts $(3,034)
-------
</TABLE>
6. Concentration of Risks
HIGH YIELD BOND MARKET The ING Intermediate Bond Fund and ING High Yield
Bond Fund may invest in high yield, high risk debt securities. Lower-rated
debt securities possess speculative characteristics and are subject to
greater market fluctuations and risk of loss of income and principal than
higher-rated debt securities for a variety of reasons. Also, during an
economic downturn or substantial period of rising interest rates, highly
leveraged issuers may experience financial stress which would adversely
affect their ability to service their principal and interest payment
obligations, to meet projected business goals and to obtain additional
financing. In addition, periods of economic uncertainty and changes can be
expected to result in increased volatility of market prices of lower-rated
debt securities.
FOREIGN SECURITIES The Funds, except the ING Money Market Fund, may invest
in foreign securities. Investments in foreign securities may entail risks
not present in domestic investments. Since investments of securities are
denominated in foreign currencies, changes in the relationship of these
foreign currencies to the U.S. dollar can significantly affect the value of
the investments and earnings of the Funds. Foreign investments may also
subject the Funds to foreign government exchange restrictions,
expropriation, taxation or other political, social or economic developments,
as well as from movements in currency, security value and interest rate, all
of which could affect the market and/or credit risk of the investments.
NON-DIVERSIFIED The ING International Bond Fund, ING Global Brand Names Fund
and ING Focus Fund are classified as non-diversified investment companies
under the Investment Company Act, which means that each Fund is not limited
in the proportion of its assets in a single issuer. The investment of a
large percentage of a Fund's assets in the securities of a small number of
issuers may cause that Fund's share price to fluctuate more than that of a
diversified investment company.
INDUSTRY CONCENTRATION The ING Internet Fund and ING Global Information
Technology Fund concentrate their assets in securities related to a
particular industry. As a result, the Funds may be subject to greater market
fluctuation than a fund which has securities representing a broader range of
investment alternatives.
7. Repurchase Agreements
The Funds may enter into repurchase agreements with U.S. banks or
broker/dealers. A repurchase agreement is a transaction in which the seller
of a security commits itself at the time of the sale to repurchase that
security from the buyer at a mutually agreed upon time and price. The Funds
will always receive and maintain securities as collateral whose market
value, including accrued interest, will equal or exceed the repurchase
price.
ING Funds Annual Report/October 31, 1999 63
<PAGE> 66
October 31, 1999
NOTES TO FINANCIAL STATEMENTS
(continued)
8. Federal Income Tax
Income dividends and capital gain distributions are determined in accordance
with Federal income tax regulations which may differ from those determined
in accordance with generally accepted accounting principles. To the extent
these differences are permanent, such amounts are reclassified within the
capital accounts based on their Federal tax basis treatment; temporary
differences do not require such reclassifications. These amounts are as
follows:
<TABLE>
<CAPTION>
Undistributed Net Undistributed Net Realized Paid-In
Fund Name Investment Income Gains and Losses Capital
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ING Internet Fund $120,597 ($ 108,453) ($ 12,144)
ING Small Cap Growth Fund 226,461 -- (226,461)
ING Focus Fund 81,403 (57,713) (23,690)
ING Mid Cap Growth Fund 91,208 -- (91,208)
ING Large Cap Growth Fund 182,682 -- (182,682)
ING Tax Efficient Equity Fund 23,862 -- (23,862)
ING Growth & Income Fund 23,732 -- (23,732)
ING International Bond Fund (63,669) 1,047,705 (984,036)
ING Global Information Technology Fund 468,947 (445,349) (23,598)
ING European Equity Fund 24,840 (1,286) (23,554)
ING International Equity Fund 43,768 (19,752) (24,016)
ING Global Brand Names Fund 108,428 (83,638) (24,790)
ING High Yield Bond Fund 20,101 -- (20,101)
ING Intermediate Bond Fund 20,178 -- (20,178)
ING Money Market Fund 20,014 -- (20,014)
</TABLE>
At October 31, 1999, the ING Small Cap Growth Fund, ING Mid Cap Growth Fund,
ING Large Cap Growth Fund, ING Tax Efficient Equity Fund, ING International
Bond Fund and ING Intermediate Bond Fund had, for Federal income tax
purposes, capital loss carryforwards available to offset future realized
gains. The amount and date of expiration of these carryforwards are as
follows:
<TABLE>
<CAPTION>
Fund Name Capital Loss Carryforwards Expiration
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ING Small Cap Growth Fund $1,539,689 October 31, 2007
ING Mid Cap Growth Fund 2,076,959 October 31, 2007
ING Large Cap Growth Fund 1,396,880 October 31, 2007
ING Tax Efficient Equity Fund 7,352 October 31, 2007
ING International Bond Fund 247,357 October 31, 2007
ING Intermediate Bond Fund 1,083,329 October 31, 2007
</TABLE>
9. Shares of Beneficial Interest
At October 31, 1999, the Trust had an unlimited number of shares of
beneficial interest authorized with a par value of $0.001 per share. The
Funds have the ability to issue multiple classes of shares. Each share of a
class represents an identical legal interest in a Fund and has the same
rights, except that each class bears certain expenses specifically related
to the distribution of its shares.
At October 31, 1999, total paid-in capital amounted to the following for
each Fund:
<TABLE>
<CAPTION>
Fund Name Class A Shares Class B Shares Class C Shares Class I Shares Class X Shares
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ING Internet Fund $ 28,726,061 $12,073,466 $ 4,348,471 -- $ 851,230
ING Small Cap Growth Fund 26,241,411 702,351 384,808 -- 516,684
ING Focus Fund 29,271,910 2,860,014 940,994 -- 1,050,373
ING Mid Cap Growth Fund 26,972,549 635,306 382,725 $1,411,017 318,905
ING Large Cap Growth Fund 32,484,446 3,687,559 10,335,794 49,135 4,824,088
ING Tax Efficient Equity Fund 39,698,994 6,723,305 1,201,508 -- 2,875,796
ING Growth & Income Fund 31,092,292 1,094,626 827,824 -- 1,410,162
ING International Bond Fund 25,860,271 540,610 14,645 5,463 767,352
ING Global Information
Technology Fund 33,801,001 4,862,425 1,797,691 -- 1,920,950
ING European Equity Fund 26,240,620 818,198 59,351 -- 671,781
ING International Equity Fund 27,393,611 643,469 405,150 85,277 323,927
ING Global Brand Names Fund 31,177,793 2,728,675 7,094,284 451,688 2,193,704
ING High Yield Bond Fund 30,695,394 2,404,476 784,330 -- 879,284
ING Intermediate Bond Fund 33,794,080 2,032,641 1,111,821 -- 1,060,463
ING Money Market Fund 228,103,837 1,172,533 444,288 1,906,442 1,511,647
</TABLE>
64 ING Funds Annual Report/October 31, 1999
<PAGE> 67
Transactions in shares for the period ended October 31, 1999 were as follows:
<TABLE>
<CAPTION>
Shares Amount
- ----------------------------------------------------------------------
<S> <C> <C>
ING INTERNET FUND(1)
Class A Shares
Shares sold 3,045,309 $ 31,032,102
Shares issued on reinvestment -- --
Shares redeemed (219,359) (2,306,139)
------------ ------------
Net increase 2,825,950 $ 28,725,963
------------ ------------
Class B Shares
Shares sold 1,217,308 $ 12,538,049
Shares issued on reinvestment -- --
Shares redeemed (40,458) (458,465)
------------ ------------
Net increase 1,176,850 $ 12,079,584
------------ ------------
Class C Shares
Shares sold 454,931 $ 4,757,431
Shares issued on reinvestment -- --
Shares redeemed (36,518) (408,839)
------------ ------------
Net increase 418,413 $ 4,348,592
------------ ------------
Class X Shares
Shares sold 84,230 $ 855,683
Shares issued on reinvestment -- --
Shares redeemed (570) (6,000)
------------ ------------
Net increase 83,660 $ 849,683
------------ ------------
ING SMALL CAP GROWTH FUND
Class A Shares(2)
Shares sold 2,756,698 $ 27,733,436
Shares issued on reinvestment -- --
Shares redeemed (120,009) (1,281,046)
------------ ------------
Net increase 2,636,689 $ 26,452,390
------------ ------------
Class B Shares(2)
Shares sold 68,717 $ 720,182
Shares issued on reinvestment -- --
Shares redeemed (1,347) (14,674)
------------ ------------
Net increase 67,370 $ 705,508
------------ ------------
Class C Shares(2)
Shares sold 37,625 $ 388,119
Shares issued on reinvestment -- --
Shares redeemed (270) (2,855)
------------ ------------
Net increase 37,355 $ 385,264
------------ ------------
Class X Shares(3)
Shares sold 51,926 $ 533,637
Shares issued on reinvestment -- --
Shares redeemed (1,149) (12,227)
------------ ------------
Net increase 50,777 $ 521,410
------------ ------------
ING FOCUS FUND
Class A Shares(2)
Shares sold 2,922,599 $ 30,105,049
Shares issued on reinvestment -- --
Shares redeemed (69,444) (823,282)
------------ ------------
Net increase 2,853,155 $ 29,281,767
------------ ------------
Class B Shares(2)
Shares sold 266,465 $ 3,195,205
Shares issued on reinvestment -- --
Shares redeemed (27,545) (331,601)
------------ ------------
Net increase 238,920 $ 2,863,604
------------ ------------
Class C Shares(2)
Shares sold 80,003 $ 963,946
Shares issued on reinvestment -- --
Shares redeemed (1,989) (23,655)
------------ ------------
Net increase 78,014 $ 940,291
------------ ------------
Class X Shares(4)
Shares sold 89,863 $ 1,057,689
Shares issued on reinvestment -- --
Shares redeemed (298) (3,513)
------------ ------------
Net increase 89,565 $ 1,054,176
------------ ------------
ING MID CAP GROWTH FUND
Class A Shares(2)
Shares sold 2,753,482 $ 27,612,489
Shares issued on reinvestment -- --
Shares redeemed (54,675) (559,344)
------------ ------------
Net increase 2,698,807 $ 27,053,145
------------ ------------
Class B Shares(2)
Shares sold 63,976 $ 646,218
Shares issued on reinvestment -- --
Shares redeemed (957) (9,976)
------------ ------------
Net increase 63,019 $ 636,242
------------ ------------
Class C Shares(2)
Shares sold 37,952 $ 385,487
Shares issued on reinvestment -- --
Shares redeemed (283) (2,855)
------------ ------------
Net increase 37,669 $ 382,632
------------ ------------
Class I Shares(5)
Shares sold 40,383 $ 414,531
Shares issued on reinvestment -- --
Shares redeemed (330) (3,267)
------------ ------------
Net increase 40,053 $ 411,264
------------ ------------
Class X Shares(6)
Shares sold 33,054 $ 329,944
Shares issued on reinvestment -- --
Shares redeemed (818) (8,660)
------------ ------------
Net increase 32,236 $ 321,284
------------ ------------
</TABLE>
ING Funds Annual Report/October 31, 1999 65
<PAGE> 68
October 31, 1999
NOTES TO FINANCIAL STATEMENTS
(continued)
Transactions in shares for the period ended October 31, 1999 were as follows:
<TABLE>
<CAPTION>
Shares Amount
- ----------------------------------------------------------------------
<S> <C> <C>
ING LARGE CAP GROWTH FUND
Class A Shares(2)
Shares sold 3,303,263 $ 33,983,244
Shares issued on reinvestment -- --
Shares redeemed (123,646) (1,383,990)
------------ ------------
Net increase 3,179,617 $ 32,599,254
------------ ------------
Class B Shares(2)
Shares sold 335,562 $ 3,743,914
Shares issued on reinvestment -- --
Shares redeemed (3,803) (44,163)
------------ ------------
Net increase 331,759 $ 3,699,751
------------ ------------
Class C Shares(2)
Shares sold 921,262 $ 10,475,479
Shares issued on reinvestment -- --
Shares redeemed (10,849) (118,613)
------------ ------------
Net increase 910,413 $ 10,356,866
------------ ------------
Class I Shares(7)
Shares sold 4,312 $ 49,138
Shares issued on reinvestment -- --
Shares redeemed -- --
------------ ------------
Net increase 4,312 $ 49,138
------------ ------------
Class X Shares(3)
Shares sold 446,082 $ 4,974,893
Shares issued on reinvestment -- --
Shares redeemed (10,790) (123,341)
------------ ------------
Net increase 435,292 $ 4,851,552
------------ ------------
ING TAX EFFICIENT EQUITY FUND
Class A Shares(2)
Shares sold 3,938,486 $ 41,141,495
Shares issued on reinvestment -- --
Shares redeemed (124,823) (1,419,922)
------------ ------------
Net increase 3,813,663 $ 39,721,573
------------ ------------
Class B Shares(2)
Shares sold 603,425 $ 6,877,202
Shares issued on reinvestment -- --
Shares redeemed (13,447) (156,928)
------------ ------------
Net increase 589,978 $ 6,720,274
------------ ------------
Class C Shares(2)
Shares sold 106,384 $ 1,246,004
Shares issued on reinvestment -- --
Shares redeemed (4,053) (46,936)
------------ ------------
Net increase 102,331 $ 1,199,068
------------ ------------
Class X Shares(3)
Shares sold 276,862 $ 3,083,700
Shares issued on reinvestment -- --
Shares redeemed (17,841) (208,293)
------------ ------------
Net increase 259,021 $ 2,875,407
------------ ------------
ING GROWTH & INCOME FUND
Class A Shares(2)
Shares sold 3,082,641 $ 31,362,914
Shares issued on reinvestment 3,398 36,868
Shares redeemed (25,448) (279,659)
------------ ------------
Net increase 3,060,591 $ 31,120,123
------------ ------------
Class B Shares(2)
Shares sold 101,981 $ 1,118,285
Shares issued on reinvestment 36 388
Shares redeemed (2,591) (28,455)
------------ ------------
Net increase 99,426 $ 1,090,218
------------ ------------
Class C Shares(2)
Shares sold 75,515 $ 830,860
Shares issued on reinvestment 7 74
Shares redeemed (633) (6,897)
------------ ------------
Net increase 74,889 $ 824,037
------------ ------------
Class X Shares(4)
Shares sold 136,848 $ 1,487,100
Shares issued on reinvestment 57 616
Shares redeemed (7,353) (80,601)
------------ ------------
Net increase 129,552 $ 1,407,115
------------ ------------
ING INTERNATIONAL BOND FUND
Class A Shares(1)
Shares sold 2,674,034 $ 26,645,837
Shares issued on reinvestment 60,379 550,002
Shares redeemed (42,143) (379,828)
------------ ------------
Net increase 2,692,270 $ 26,816,011
------------ ------------
Class B Shares(2)
Shares sold 58,708 $ 545,209
Shares issued on reinvestment 546 4,861
Shares redeemed (207) (1,867)
------------ ------------
Net increase 59,047 $ 548,203
------------ ------------
Class C Shares(2)
Shares sold 1,687 $ 15,073
Shares issued on reinvestment 11 94
Shares redeemed (315) (2,758)
------------ ------------
Net increase 1,383 $ 12,409
------------ ------------
Class I Shares(5)
Shares sold 648 $ 5,813
Shares issued on reinvestment 7 50
Shares redeemed (46) (402)
------------ ------------
Net increase 609 $ 5,461
------------ ------------
Class X Shares(3)
Shares sold 85,168 $ 794,628
Shares issued on reinvestment 1,023 9,128
Shares redeemed (2,283) (20,606)
------------ ------------
Net increase 83,908 $ 783,150
------------ ------------
</TABLE>
66 ING Funds Annual Report/October 31, 1999
<PAGE> 69
Transactions in shares for the period ended October 31, 1999 were as follows:
<TABLE>
<CAPTION>
Shares Amount
- ----------------------------------------------------------------------
<S> <C> <C>
ING GLOBAL INFORMATION TECHNOLOGY FUND
Class A Shares(2)
Shares sold 3,191,651 $ 34,340,200
Shares issued on reinvestment -- --
Shares redeemed (38,396) (542,965)
------------ ------------
Net increase 3,153,255 $ 33,797,235
------------ ------------
Class B Shares(2)
Shares sold 349,185 $ 4,934,897
Shares issued on reinvestment -- --
Shares redeemed (4,369) (61,977)
------------ ------------
Net increase 344,816 $ 4,872,920
------------ ------------
Class C Shares(2)
Shares sold 123,393 $ 1,826,104
Shares issued on reinvestment -- --
Shares redeemed (2,008) (27,703)
------------ ------------
Net increase 121,385 $ 1,798,401
------------ ------------
Class X Shares(3)
Shares sold 153,449 $ 2,009,012
Shares issued on reinvestment -- --
Shares redeemed (6,206) (79,046)
------------ ------------
Net increase 147,243 $ 1,929,966
------------ ------------
ING EUROPEAN EQUITY FUND
Class A Shares(2)
Shares sold 3,358,479 $ 34,004,254
Shares issued on reinvestment -- --
Shares redeemed (734,074) (7,742,471)
------------ ------------
Net increase 2,624,405 $ 26,261,783
------------ ------------
Class B Shares(2)
Shares sold 78,820 $ 826,835
Shares issued on reinvestment -- --
Shares redeemed (1,051) (11,090)
------------ ------------
Net increase 77,769 $ 815,745
------------ ------------
Class C Shares(2)
Shares sold 5,439 $ 56,964
Shares issued on reinvestment -- --
Shares redeemed -- --
------------ ------------
Net increase 5,439 $ 56,964
------------ ------------
Class X Shares(8)
Shares sold 65,838 $ 681,711
Shares issued on reinvestment -- --
Shares redeemed (924) (9,842)
------------ ------------
Net increase 64,914 $ 671,869
------------ ------------
ING INTERNATIONAL EQUITY FUND
Class A Shares(2)
Shares sold 2,924,161 $ 29,823,874
Shares issued on reinvestment -- --
Shares redeemed (208,844) (2,405,072)
------------ ------------
Net increase 2,715,317 $ 27,418,802
------------ ------------
Class B Shares(2)
Shares sold 61,956 $ 687,875
Shares issued on reinvestment -- --
Shares redeemed (4,319) (48,745)
------------ ------------
Net increase 57,637 $ 639,130
------------ ------------
Class C Shares(2)
Shares sold 35,273 $ 402,152
Shares issued on reinvestment -- --
Shares redeemed -- --
------------ ------------
Net increase 35,273 $ 402,152
------------ ------------
Class I Shares(7)
Shares sold 7,500 $ 85,270
Shares issued on reinvestment -- --
Shares redeemed -- --
------------ ------------
Net increase 7,500 $ 85,270
------------ ------------
Class X Shares(9)
Shares sold 29,719 $ 325,080
Shares issued on reinvestment -- --
Shares redeemed (185) (2,127)
------------ ------------
Net increase 29,534 $ 322,953
------------ ------------
ING GLOBAL BRAND NAMES FUND
Class A Shares(2)
Shares sold 3,258,101 $ 33,423,997
Shares issued on reinvestment -- --
Shares redeemed (200,377) (2,263,633)
------------ ------------
Net increase 3,057,724 $ 31,160,364
------------ ------------
Class B Shares(2)
Shares sold 250,238 $ 2,772,072
Shares issued on reinvestment -- --
Shares redeemed (3,525) (39,010)
------------ ------------
Net increase 246,713 $ 2,733,062
------------ ------------
Class C Shares(2)
Shares sold 667,391 $ 7,249,758
Shares issued on reinvestment -- --
Shares redeemed (11,910) (131,596)
------------ ------------
Net increase 655,481 $ 7,118,162
------------ ------------
Class I Shares(5)
Shares sold 40,252 $ 456,052
Shares issued on reinvestment -- --
Shares redeemed (414) (4,595)
------------ ------------
Net increase 39,838 $ 451,457
------------ ------------
Class X Shares(10)
Shares sold 204,477 $ 2,238,091
Shares issued on reinvestment -- --
Shares redeemed (3,326) (37,345)
------------ ------------
Net increase 201,151 $ 2,200,746
------------ ------------
</TABLE>
ING Funds Annual Report/October 31, 1999 67
<PAGE> 70
NOTES TO FINANCIAL STATEMENTS
Transactions in shares for the period ended October 31, 1999 were as follows:
<TABLE>
<CAPTION>
Shares Amount
- ----------------------------------------------------------------------
<S> <C> <C>
ING HIGH YIELD BOND FUND
Class A Shares(2)
Shares sold 2,950,126 $ 29,549,612
Shares issued on reinvestment 184,187 1,855,772
Shares redeemed (69,091) (693,436)
------------- -------------
Net increase 3,065,222 $ 30,711,948
------------- -------------
Class B Shares(2)
Shares sold 245,269 $ 2,474,568
Shares issued on reinvestment 4,506 45,149
Shares redeemed (11,685) (116,958)
------------- -------------
Net increase 238,090 $ 2,402,759
------------- -------------
Class C Shares(2)
Shares sold 77,919 $ 784,122
Shares issued on reinvestment 1,787 17,932
Shares redeemed (1,994) (19,911)
------------- -------------
Net increase 77,712 $ 782,143
------------- -------------
Class X Shares(3)
Shares sold 87,496 $ 885,049
Shares issued on reinvestment 3,023 30,325
Shares redeemed (3,597) (35,782)
------------- -------------
Net increase 86,922 $ 879,592
------------- -------------
ING INTERMEDIATE BOND FUND
Class A Shares(2)
Shares sold 4,290,518 $ 42,274,629
Shares issued on reinvestment 142,631 1,366,772
Shares redeemed (1,029,165) (9,831,107)
------------- -------------
Net increase 3,403,984 $ 33,810,294
------------- -------------
Class B Shares(2)
Shares sold 328,463 $ 3,175,052
Shares issued on reinvestment 5,663 53,854
Shares redeemed (126,073) (1,197,919)
------------- -------------
Net increase 208,053 $ 2,030,987
------------- -------------
Class C Shares(2)
Shares sold 113,633 $ 1,097,966
Shares issued on reinvestment 2,468 23,450
Shares redeemed (1,241) (11,653)
------------- -------------
Net increase 114,860 $ 1,109,763
------------- -------------
Class X Shares(3)
Shares sold 233,086 $ 2,271,631
Shares issued on reinvestment 4,011 38,177
Shares redeemed (130,052) (1,248,812)
------------- -------------
Net increase 107,045 $ 1,060,996
------------- -------------
ING MONEY MARKET FUND
Class A Shares(2)
Shares sold 325,378,899 $ 325,378,899
Shares issued on reinvestment 3,010,550 3,010,550 3,010,550
Shares redeemed (100,268,229) (100,268,229)
------------- -------------
Net increase 228,121,220 $ 228,121,220
------------- -------------
Class B Shares(2)
Shares sold 1,897,590 $ 1,897,590
Shares issued on reinvestment 7,368 7,368
Shares redeemed (734,755) (734,755)
------------- -------------
Net increase 1,170,203 $ 1,170,203
------------- -------------
Class C Shares(2)
Shares sold 675,705 $ 675,705
Shares issued on reinvestment 5,450 5,450
Shares redeemed (239,212) (239,212)
------------- -------------
Net increase 441,943 $ 441,943
------------- -------------
Class I Shares(11)
Shares sold 1,901,244 $ 1,901,244
Shares issued on reinvestment 5,232 5,232
Shares redeemed -- --
------------- -------------
Net increase 1,906,476 $ 1,906,476
------------- -------------
Class X Shares(12)
Shares sold 2,378,957 $ 2,378,957
Shares issued on reinvestment 19,653 19,653
Shares redeemed (886,834) (886,834)
------------- -------------
Net increase 1,511,776 $ 1,511,776
------------- -------------
</TABLE>
1. ING Internet Fund commenced operations on July 1, 1999.
2. Class A, B and C shares commenced operations on December 15, 1998.
3. Class X shares commenced offering on January 11, 1999.
4. Class X shares commenced offering on January 12, 1999.
5. Class I shares commenced offering on July 29, 1999.
6. Class X shares commenced offering on January 19, 1999.
7. Class I shares commenced offering on September 27,1999.
8. Class X shares commenced offering on January 15, 1999.
9. Class X shares commenced offering on February 16, 1999.
10. Class X shares commenced offering on January 14, 1999.
11. Class I shares commenced offering on October 13, 1999.
12. Class X shares commenced offering on January 20, 1999.
10. Results of Special Meeting of Shareholders of ING Small Cap Growth Fund
(unaudited)
On October 29, 1999, a Special Meeting of Shareholders of
ING Small Cap Growth Fund was held to approve the new Investment
Sub-Advisory Agreement between ING Mutual Funds Management Co. LLC and
Furman Selz Capital Management LLC ("Furman Selz"), pursuant to which
Furman Selz would serve as the new sub-adviser to the ING Small Cap
Growth Fund effective as of October 31, 1999. On September 30, 1999,
the record date for the meeting, the ING Small Cap Growth Fund had
outstanding 2,773,653 shares of beneficial interest. The votes cast at
the meeting were as follows: 2,593,328 were voted in favor to approve
the new Investment Sub-Advisory Agreement between ING Mutual Funds
Management Co. LLC and Furman Selz, 28 shares against it, 1,950 shares
abstained and 178,347 shares were not voted. Accordingly, the new
Investment Sub-Advisory Agreement was approved.
68 ING Funds Annual Report/October 31, 1999
<PAGE> 71
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees of ING Funds Trust:
We have audited the accompanying statements of assets and liabilities,
including the statements of investments, of ING Internet Fund, ING Small Cap
Growth Fund, ING Focus Fund, ING Mid Cap Growth Fund, ING Large Cap Growth Fund,
ING Tax Efficient Equity Fund, ING Growth & Income Fund, ING International Bond
Fund, ING Global Information Technology Fund, ING European Equity Fund, ING
International Equity Fund, ING Global Brand Names Fund, ING High Yield Bond
Fund, ING Intermediate Bond Fund and ING Money Market Fund (fifteen of the
portfolios constituting ING Funds Trust) (collectively, the "Funds") as of
October 31, 1999, and the related statements of operations and changes in net
assets, and financial highlights for the period indicated therein. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included verification by
confirmation of securities held by the custodian as of October 31, 1999 and
confirmation of securities not held by the custodian by correspondence with
others. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Funds at October 31, 1999, the results of their operations, the changes in their
net assets and their financial highlights for the period indicated therein, in
conformity with generally accepted accounting principles.
/S/ Ernst & Young LLP
---------------------------------
New York, New York
December 3, 1999
ING Funds Annual Report/october 31, 1999 69
<PAGE> 72
TAX INFORMATION
The Funds intend to make an election under Internal Revenue Code Section 853
to pass through foreign taxes paid by the Funds to their shareholders. The total
amount of foreign taxes that may be passed through to the shareholders for the
fiscal year ended October 31, 1999, are $18,306 for ING International Bond Fund,
$32,735 for ING Global Brand Names Fund, $3,787 for ING Global Information
Technology Fund, $51,249 for ING International Equity Fund and $64,328 for ING
European Equity Fund. The foreign source income for information purposes are
$526,953 for ING International Bond Fund; $136,240 for ING Global Brand Names
Fund, $23,140 for ING Global Information Technology Fund, $374,072 for ING
International Equity Fund and $390,617 for ING European Equity Fund.
Shareholders should not use the above information to prepare their tax
returns. The information necessary to complete your income tax returns will be
included with your Form 1099 DIV which will be sent to you separately in January
2000.
70 ING Funds Annual Report/October 31, 1999
<PAGE> 73
ING MUTUAL FUNDS
Board of Trustees
John J. Pileggi, Chairman of the Board
Joseph N. Hankin
Jack D. Rehm
Blaine E. Rieke
Richard A. Wedemeyer
Officers
John J. Pileggi, President & CEO
Donald E. Brostrom, Treasurer
Louis S. Citron, Vice President
Ralph G. Norton III, Vice President
Rachelle I. Rehner, Secretary
Charles Eng, Assistant Treasurer
Amy Lau, Assistant Treasurer
Office of the Funds
1475 Dunwoody Drive
West Chester, PA 19380-1478
Manager
ING Mutual Funds Management Co. LLC
1475 Dunwoody Drive
West Chester, PA 19380-1478
Distributor
ING Funds Distributor, Inc.
1475 Dunwoody Drive
West Chester, PA 19380-1478
Custodian
Investors Fiduciary Trust Co.
801 Pennsylvania Street
Kansas City, MO 64105
Transfer Agent
DST Systems, Inc.
333 W. 11th Street
Kansas City, MO 64105
Independent Auditors
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
Legal Counsel
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064
Sub-Advisers
Baring Asset Management, Inc.
125 High Street
Boston, MA 02110
Baring International Investment Limited
155 Bishopgate
London, England EC2M 3XY
Baring Asset Management (Asia) Limited
19/F Edinburgh Tower, The Landmark,
15 Queens Road, Central, Hong Kong
Delta Asset Management
333 South Grand Avenue
Los Angeles, CA 90071
Furman Selz Capital Management LLC
230 Park Avenue
New York, NY 10169
ING Investment Management Advisors B.V.
Schenkkade 65, 2595 AS
The Hague, The Netherlands
ING Investment Management LLC
5780 Powers Ferry Road, N.W., Suite 300
Atlanta, GA 30327
ING Funds Annual Report/October 31, 1999 71
<PAGE> 74
ING FUNDS SERVICES
www.ingfunds.com--Your Around-the-Clock Information Source
INSTANT FUND AND FINANCIAL MARKET INFORMATION To learn the latest information on
the ING Funds and your accounts, look no further than our Web site at
www.ingfunds.com. When you reach our homepage you'll have instant access to the
prior business day closing prices on all the ING Funds. As a special feature, we
also provide updates throughout the business day on the performance of several
key financial market indicators--including the Dow Jones Industrial Average, the
S&P 500 Index and the 30-year Treasury bond. What's more, you can even receive
free quotes on thousands of mutual funds and stocks.
[GRAPHIC]
REVIEW YOUR ING FUNDS ACCOUNTS To receive an update on your ING Funds accounts
simply click on "Shareholders & Investors" on the top of the homepage, and then
on "My Accounts." This is a secure section of the site, and you'll be asked to
provide your Social Security number and a password/PIN to enter. To create a
password, call ING Funds at 1-877-INFO-ING (1-877-463-6464). Once the phone
representative establishes the password, click on "View Account" to access your
ING Funds portfolio information. Here you'll find a host of information, such as
your latest account balance and a complete history of your account. You can even
order duplicate statements and tax documents to be sent to your address of
record.
[GRAPHIC]
ACCOUNT TRANSACTIONS You can use the site to make account purchases, exchanges
and redemptions within your fund account. After viewing any account position,
you have access to tools that will enable you to buy, exchange, or sell shares.
To take advantage of this feature, you will be required to provide your bank
information to ING Funds when you set up your Internet account. You will receive
confirmations in the mail after conducting any transactions on the web.
[GRAPHIC]
FOR ADDITIONAL INFORMATION ON THE ING FUNDS WEB SITE, PLEASE CALL ING FUNDS AT
1-877-INFO-ING (1-877-463-6464), MONDAY THROUGH FRIDAY, 8:00AM-6:00PM, EST.
24-HOUR AUTOMATED TELEPHONE INFORMATION
If you don't have access to the Web, you can always call our 24-hour automated
telephone information system at 1-877-INFO-ING (1-877-463-6464). The system is
easy to use, and with it you can:
- - Obtain fund prices
- - Learn account balances
- - Review recent account history
- - Buy, sell and exchange shares.
72 ING Funds Annual Report/October 31, 1999
<PAGE> 75
ING MUTUAL FUNDS
A list of fund objectives and primary portfolios
ING OFFERS A DIVERSE FUND FAMILY TO HELP MEET YOUR NEEDS AND LONG-TERM FINANCIAL
GOALS. THESE INCLUDE U.S. STOCK, U.S. BOND AND A VARIETY OF GLOBAL AND
INTERNATIONAL FUNDS. TO LEARN WHICH ING MUTUAL FUNDS BEST MEET YOUR INVESTMENT
OBJECTIVES, CONTACT YOUR FINANCIAL ADVISOR FOR ADDITIONAL INFORMATION, INCLUDING
A PROSPECTUS. YOU CAN ALSO CALL US TOLL FREE AT 1-877-INFO-ING (1-877-463-6464)
OR VISIT OUR WEB SITE AT www.ingfunds.com
STOCK FUNDS
<TABLE>
<CAPTION>
FUND OBJECTIVE PRIMARY PORTFOLIO
<S> <C> <C>
ING Internet Fund Capital appreciation A non-diversified portfolio of Internet
technology companies
ING Small Cap Growth Fund Growth of capital Primarily small cap companies
ING Focus Fund Growth of capital A non-diversified portfolio of stocks
ING Mid Cap Growth Fund Growth of capital Primarily mid cap companies
ING Large Cap Growth Fund Growth of capital Primarily large cap companies
ING Tax Efficient Equity Fund High total return A diversified portfolio of stocks
ING Growth &Income Fund High total return Primarily income-producing stocks
GLOBAL/INTERNATIONAL FUNDS
BOND FUNDS
ING International Bond Fund High total return A non-diversified portfolio of bonds from
issuers generally outside of the U.S.
STOCK FUNDS
ING Global Information Technology Fund Growth of capital Primarily global information technology stocks
ING European Equity Fund Growth of capital Primarily European companies
ING International Equity Fund Growth of capital Primarily companies outside of the U.S.
ING Global Brand Names Fund Growth of capital A non-diversified portfolio of multi-national
companies with well-known brands
Bond Funds
ING High Yield Bond Fund High current income and total return Below-investment grade corporate bonds
ING Intermediate Bond Fund High current income U.S. government and high-quality corporate
bonds
ING National Tax-Exempt Bond Fund* High current tax-exempt income Diversified portfolio
of municipal bonds
Money Market Funds
ING Money Market Fund High level of current income 1st tier commercial paper
</TABLE>
SHARES OF ING FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, ARE NOT
GUARANTEED BY ANY BANK, ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY, AND
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT
INVESTED.
*Due to limited operating history, performance information not yet available
(inception 11/8/99).
<PAGE> 76
ING MUTUAL FUNDS
Information and Services
CUSTOMER SERVICE REPRESENTATIVES
1-877-INFO-ING
(1-877-463-6464)
Mon - Fri 8:00am - 6:00pm
AUTOMATED FUND AND
ACCOUNT INFORMATION
1-877-INFO-ING
(1-877-463-6464)
24 hours, 7 days a week
Web Site
www.ingfunds.com
TRANSFER AGENT
DST Systems, Inc.
333 West 11th Street
Kansas City, MO 64105
THIS REPORT IS AUTHORIZED FOR USE ONLY WHEN PRECEDED OR ACCOMPANIED BY THE
CURRENT ING FUNDS PROSPECTUS, WHICH DESCRIBES IN GREATER DETAIL THE INVESTMENT
POLICIES, MANAGEMENT FEES AND OTHER MATTERS OF INTEREST TO INVESTORS. PLEASE
READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND MONEY. THIS REPORT DOES
NOT OFFER FOR SALE OR SOLICIT ORDERS TO BUY ANY SECURITY. IF USED AS SALES
MATERIAL AFTER DECEMBER 31, 1999, THIS REPORT MUST BE ACCOMPANIED BY PERFORMANCE
FOR THE MOST RECENTLY COMPLETED CALENDAR QUARTER.
RA.0000 12/99
FINANCIAL SERVICES INTERNATIONAL NORTH AMERICA
[ING FUNDS LOGO] ----------------
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U.S. Postage
PAID
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----------------
