<PAGE> 1
AMERICAS ING FUNDS
ING DOMESTIC MUTUAL FUNDS
ANNUAL REPORT / OCTOBER 31, 2000
[GRAPHIC OF FLAG]
[ING FUNDS LOGO]
<PAGE> 2
TABLE OF CONTENTS
FUND INFORMATION AT YOUR FINGERTIPS
WE ARE PLEASED TO PROVIDE THIS DETAILED REVIEW OF ING MUTUAL FUNDS FOR THE
PERIOD THAT ENDED OCTOBER 31, 2000. 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 3-12 FUND SUMMARIES
A summary of the Funds' performance record and portfolio composition, and an
interview with the Funds' portfolio manager or managers.
PAGES 14-29 SCHEDULES OF INVESTMENTS
A complete listing of the securities in the Funds' portfolio as of October 31,
2000. 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 14
ING Small Cap Growth Fund Page 4 Page 15
ING Focus Fund Page 5 Page 17
ING Mid Cap Growth Fund Page 6 Page 18
ING Large Cap Growth Fund Page 7 Page 20
ING Tax Efficient Equity Fund Page 8 Page 21
ING Growth & Income Fund Page 9 Page 23
ING High Yield Bond Fund Page 10 Page 25
ING Intermediate Bond Fund Page 11 Page 27
ING National Tax-Exempt Bond Fund Page 12 Page 29
</TABLE>
PAGES 31-35 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 36-37 STATEMENTS OF ASSETS & LIABILITIES
A complete "balance sheet" as of the end of the reporting period. It includes
the Funds' NAV, which is calculated by dividing its net assets (assets minus
liabilities) by its number of shares outstanding.
PAGES 38-39 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 40-42 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, dividend distributions and capital share
transactions.
PAGES 43-52 NOTES TO FINANCIAL STATEMENTS
A description of the significant accounting policies of the Funds, and more
detailed information about the schedules and tables that appear in the report.
INSIDE BACK COVER FUND FAMILY OVERVIEW
A brief summary of the ING Funds, including objectives and primary portfolios.
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.
ING Funds are distributed by ING Funds Distributor, Inc. and ING Pilgrim
Securities, Inc. through a sub-distribution agreement. Member NASD.
<PAGE> 3
[PHOTO OF ROBERT W. STALLINGS]
ROBERT W. STALLINGS
President & CEO
ING Funds Trust
"WE CONTINUE TO BELIEVE IT'S IMPERATIVE TO TAKE A LONG-TERM INVESTMENT APPROACH
AND TO MAINTAIN A BROADLY DIVERSIFIED PORTFOLIO."
A LETTER FROM THE PRESIDENT
DEAR FELLOW SHAREHOLDERS,
We are pleased to present the latest ING Funds Annual Shareholder Report,
covering the one-year period ended October 31, 2000. We include a review of the
financial markets, followed by detailed information about your fund's
investment.
A VOLATILE STOCK MARKET During the one-year reporting period, the S&P 500 Index
produced a 6.09% return, while the Nasdaq composite rose 13.59% and the MSCI
EAFE Index fell 2.66%.
The period began on a positive note for U.S. equities. The bull market
continued through February, with the majority of the gains produced by large-cap
growth and technology-related stocks. In March, however, the markets experienced
a widely anticipated correction. Continued strong economic growth, inflationary
pressures and rising interest rates drove the decline. While other types of
stocks were dragged down, technology issues experienced the brunt of the fall.
Within a few weeks the technology-heavy Nasdaq composite had fallen 37% from its
peak.
The equity markets then abruptly changed course for a brief period during
the summer. Investors were encouraged that signs of moderating economic growth
would result in an end to interest rate hikes by the Federal Reserve. However,
market sentiment shifted yet again, as uncertainty arose regarding the state of
corporate profits in the face of an economic slowdown and high energy prices.
All told, by the end of the reporting period the Standard & Poor's 500 and the
Nasdaq were down 7% and 46%, respectively, from their March 2000 peaks.
The overseas equity markets were not immune from the market's gyrations.
Once again, the technology sector was the most volatile area. By the end of the
reporting period, most developed markets in Europe, Japan and Asia, as well as
many emerging equity markets, registered negative returns.
A MIXED BOND MARKET During the reporting period the bond market, as measured by
the Lehman Brothers Aggregate Bond Index, generated a 7.30% return. Early in the
reporting period most sectors of the U.S. bond faltered, due to rising interest
rates. However, when the Federal Reserve moved to a more accommodating monetary
policy, the U.S. fixed income market subsequently rebounded. One noteworthy
exception was the performance of high yield bonds. Rising default rates, falling
demand and slower economic growth caused these issues to perform poorly during
the period.
LOOKING AHEAD As we look ahead, it's entirely possible that the gyrations we're
experiencing in the financial markets could continue. Uncertainty surrounding
the direction of the economy, corporate profits and inflation could unsettle
investors in the coming months. As such, we continue to believe it is imperative
to take a long-term investment approach and to maintain a broadly diversified
portfolio.
NEW PARTNERSHIP On September 1, ING purchased ReliaStar Financial Corp., the
indirect parent company of Pilgrim Capital Corp., now ING Pilgrim Capital
Corporation. ING Pilgrim is the new umbrella sales and marketing name for the
Pilgrim and ING fund families, with approximately one million shareholders. We
are happy to bring together the global financial services power of ING with the
disciplined investment experience of Pilgrim Funds and ING Funds. The new
organization will strive to provide unparalleled global asset management
expertise to investors and investment professionals.
I would like to thank you for your ING Funds investment, and look forward to
serving your needs in the future.
Sincerely,
/s/ Robert W. Stallings
Robert W. Stallings,
President & CEO
November 17, 2000
ING Domestic Mutual Funds Annual Report / October 31, 2000 1
<PAGE> 4
DATA AS OF 10/31/00
ING FUNDS PERFORMANCE SUMMARY
DATA AS OF OCTOBER 31, 2000
<TABLE>
<CAPTION>
Cumulative Total Return w/Sales Charge(5)
Share Inception Newspaper -----------------------------------------
Class Date Quotron CUSIP Listing YTD 1-Year Inception
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STOCK FUNDS
ING INTERNET FUND(1) A 07/01/99 INGAX 45683V209 InternetA -51.04% -9.48% 14.66%
B 07/01/99 INGBX 45683V308 InternetB -50.91 -9.35 16.45
C 07/01/99 INICX 45683V407 InternetC -48.87 -5.50 20.55
X(4) 07/01/99 n/a 45683V712 n/a -50.83 -9.19 16.65
ING SMALL CAP A 12/15/98 ISCGX 45683U532 SmCpGrA -14.95 17.49 32.99
GROWTH FUND(2, 6) B 12/15/98 n/a 45683U524 n/a -14.84 18.71 35.30
C 12/15/98 n/a 45683U516 n/a -11.26 22.71 39.30
X(4) 01/11/99 n/a 45683U490 n/a -14.84 18.69 20.02
ING FOCUS FUND A 12/15/98 IFFAX 45683U235 FocusA 1.45 13.84 42.81
B 12/15/98 n/a 45683U227 n/a 2.01 15.03 45.80
C 12/15/98 n/a 45683U219 n/a 6.01 19.05 49.70
X(4) 01/12/99 n/a 45683U193 n/a 2.02 15.06 33.88
ING MID CAP A 12/15/98 IMCGX 45683U573 MdCpGrA 10.26 19.96 24.60
GROWTH FUND B 12/15/98 n/a 45683U565 n/a 11.40 21.43 26.60
C 12/15/98 n/a 45683U557 n/a 15.40 25.43 30.60
X(4) 01/19/99 n/a 45683U540 n/a 11.40 21.43 20.03
ING LARGE CAP A 12/15/98 ILCGX 45683U664 LgCpGrA -11.24 -0.32 17.62
GROWTH FUND B 12/15/98 n/a 45683U656 n/a -10.99 0.02 19.40
C 12/15/98 n/a 45683U649 n/a -7.24 4.11 23.40
X(4) 01/11/99 n/a 45683U631 n/a -10.92 0.12 9.96
ING TAX EFFICIENT A 12/15/98 ITEAX 45683U276 TxEfEqA -8.30 -2.33 17.10
EQUITY FUND B 12/15/98 n/a 45683U268 n/a -8.14 -2.06 19.12
C 12/15/98 n/a 45683U250 n/a -4.22 1.91 22.67
X(4) 01/11/99 n/a 45683U243 n/a -8.14 -2.12 6.77
ING GROWTH A 12/15/98 IGIFX 45683U623 GrIncA -9.15 -3.11 10.81
& INCOME FUND B 12/15/98 n/a 45683U615 n/a -9.01 -2.93 12.15
C 12/15/98 n/a 45683U599 n/a -5.09 1.07 16.17
X(4) 01/12/99 n/a 45683U581 n/a -8.94 -2.84 4.82
BOND FUNDS
ING HIGH YIELD A 12/15/98 IHYAX 45683U847 HiYldA -5.82% -2.98% 3.23%
BOND FUND(3) B 12/15/98 n/a 45683U839 n/a -6.45 -3.61 2.96
C 12/15/98 n/a 45683U821 n/a -2.79 0.09 6.75
X(4) 01/11/99 n/a 45683U813 n/a -6.35 -3.51 2.49
ING INTERMEDIATE A 12/15/98 IIBAX 45683U888 InmdBdA 2.50 2.96 1.46
BOND FUND B 12/15/98 n/a 45683U870 n/a 1.99 2.30 1.20
C 12/15/98 n/a 45683U862 n/a 6.00 6.32 5.06
X(4) 01/11/99 n/a 45683U854 n/a 1.99 2.30 2.30
ING NATIONAL TAX-EXEMPT A 11/08/99 n/a 45683U714 n/a 3.45 n/a 1.04
BOND FUND B 11/08/99 n/a 45683U698 n/a 2.74 n/a 0.02
C 11/08/99 n/a 45683U680 n/a 6.89 n/a 4.29
</TABLE>
Past performance is historical and cannot guarantee future results. Because of
ongoing market volatility, each Fund's performance may be subject to substantial
short-term changes.
THESE AND OTHER RISKS ARE MORE FULLY DESCRIBED IN THE CURRENT FUND PROSPECTUS.
1. The Fund concentrates its investments in Internet-related companies and
carries more risks than more diversified funds. 2. Investments in small
capitalization issuers carry more risks than larger companies. 3. Investments in
high yield bonds carry particular market risks and may experience greater
volatility in market value than investment grade corporate bonds. 4. 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. 5. Cumulative total return (not
annualized). Fund returns include change in share value and reinvestment of
distributions. Class A shares are subject to a maximum initial sales charge of
5.75% (Stock Funds); and 4.75% (Bond Funds). Class B and Class X shares are
subject to a maximum contingent deferred sales charge of 5% (1-year) and 4%
(inception); Class C shares are subject to a maximum CDSC of 1% (1-year). For
the Funds that are in operations for less than one year, the CDSC for Class B
and X shares are 5% and for Class C shares is 1%. 6. Prior to 10/31/99 the Fund
had a different Sub-Adviser.
2 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 5
DATA AS OF 10/31/00
ING INTERNET FUND
FOR INVESTORS SEEKING LONG-TERM CAPITAL APPRECIATION FROM A NON-DIVERSIFIED
EQUITY PORTFOLIO
<TABLE>
<CAPTION>
ASSET ALLOCATION(1)
<S> <C>
Common Stocks 100.0%
</TABLE>
<TABLE>
<CAPTION>
TOP FIVE INDUSTRIES(1)
<S> <C>
Internet Applications Software 29.7%
Internet Security 11.7
Business-to-Business:
E-Commerce 6.7
Web Hosting: Design 6.6
E-Marketing: Information 6.3
</TABLE>
<TABLE>
<CAPTION>
TOP TEN HOLDINGS(1)
<S> <C>
BroadVision, Inc. 5.6%
Software.com, Inc. 4.7
America Online Inc. 4.2
E.piphany, Inc. 4.1
Commerce One Inc. 4.0
Internet Security Systems, Inc. 4.0
VeriSign, Inc. 4.0
Interwoven, Inc. 3.9
Cisco Systems, Inc. 3.8
Check Point Software Technologies
Ltd. 3.8
</TABLE>
GROWTH OF A $10,000 INVESTMENT
ING Internet Fund vs. @Net Index (IIX): 7/1/99-10/31/00
[LINE GRAPH]
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES @NET
<S> <C> <C> <C>
9425 10000 10000 10000
8115 8600 8600 8899
9020 9550 9560 9488
10132 10720 10730 10333
11942 12630 12630 11387
15740 16630 16650 13995
22075 23311 23341 18333
19339 20419 20439 17068
25735 27154 27174 20091
21999 23210 23230 19871
16861 17779 17789 16380
13277 13997 14007 13471
16203 17061 17071 15838
14888 15676 15686 15546
16690 17567 17567 17911
14507 15251 15261 16069
11466 11645 12055 14035
</TABLE>
Hypothetical illustration of $10,000 includes the maximum sales charge of 5.75%
for Class A shares. Class B shares are subject to a maximum CDSC of 5% (1-year)
and 4% (inception). Class C shares are subject to a maximum CDSC of 1% (1-year).
Ending values include change in share value and reinvestment of distributions.
The @Net Index (IIX) is unmanaged with no sales charges or expenses.
PLEASE SEE PAGE 13 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DISCLOSURES AND RISK
CONSIDERATIONS.
AVERAGE ANNUAL TOTAL RETURN(2) (with sales charge)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS X SHARES
<S> <C> <C> <C> <C>
1-Year -9.48% -9.35% -5.50% -9.19%
Inception 10.80 12.09 15.04 12.24
</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.
The principal value and return on an investment in the Fund will fluctuate, so
that an investor's shares when redeemed may be worth more or less than the
original cost. Total returns include change in share value and reinvestment of
distributions.
MANAGER'S OVERVIEW
[PHOTO OF GUY UDING]
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.
"DURING THE PAST YEAR WE HAVE SEEN THE MOST RAPID BUILD-OUT OF A NEW MEDIUM IN
HISTORY."
SEE PAGE 14 FOR FINANCIAL DETAILS.
QUESTION: How did the Fund perform versus its benchmark?
ANSWER: Overall, the Fund underperformed its benchmark. However, it's important
to note that the Fund is not actively managed against an index, since most
indices are market cap weighted--resulting in only a few companies
dominating the entire index. In contract, our Fund is more diversified, and
has a maximum weighting in one stock of 7%.
QUESTION: What strategies enhanced returns?
ANSWER: We invested in a number of Internet software companies that provide
businesses with mission critical applications in the areas of procurement,
customer interaction, transaction based E-commerce and content management.
The high adoption rate of these types of applications created a very fast
growth path for the Internet software group, and resulted in good stock
performance.
Another growth area is business-to-business, where thousands of online
trading platforms have been created in virtually every industrial sector.
Only a handful of Internet companies managed to get a substantial number of
contracts to build these exchanges. Both CommerceOne and Ariba have been
part of that group, and have contributed positively to the Fund.
QUESTION: Were there any areas that didn't meet your expectations?
ANSWER: A disappointing group has been the Internet consulting area, where some
fundamental changes within the Internet sector have adversely affected the
outlook for the E-consulting sector. First of all, there was the demise of
many consumer oriented commerce companies. When the capital markets stopped
funding this group, the E-consultants received significantly less orders.
Besides this, the nature of Internet consulting changed as well. Enterprises
are building out their Internet platforms and are starting ever bigger and
more complex projects. Many of the smaller E-consulting companies were
unable to handle these bigger projects and lost business to traditional
consultants like Andersen and IBM, who already boosted their Web offerings.
QUESTION: Looking ahead, what areas do you believe hold the most promise?
ANSWER: During the past year we have seen the most rapid build-out of a new
medium in history. Initial euphoria about the opportunities has slowly been
overtaken by a more realistic view. Nevertheless we expect ongoing strong
growth in several areas. The online integration and collaboration between
businesses should spur ongoing investments in software, services and
infrastructure. Investors, however, will need to be more selective going
forward in allocating capital to the Internet sector. This puts more
pressure on companies in terms of execution, product innovation and
strategy. We will focus on those companies that can meet those criteria and
expect them to outperform the market.
[ING FUNDS LOGO]
ING Domestic Mutual Funds Annual Report / October 31, 2000 3
<PAGE> 6
DATA AS OF 10/31/00
ING SMALL CAP GROWTH FUND
FOR AGGRESSIVE INVESTORS SEEKING ABOVE-AVERAGE LONG-TERM GROWTH
<TABLE>
<CAPTION>
ASSET ALLOCATION(1)
<S> <C>
Common Stocks 85.1%
Short-term Investments 14.9
</TABLE>
<TABLE>
<CAPTION>
TOP FIVE INDUSTRIES(1)
<S> <C>
Medical-Biomedical: Genetic 9.9%
Electronic Compo.: Semicon. 9.4
Internet Applications Software 5.3
Therapeutics 5.0
Semiconductor Equipment 4.5
</TABLE>
<TABLE>
<CAPTION>
TOP TEN HOLDINGS(1)
<S> <C>
PE Corp. - Celera Genomics Group 4.8%
Medarex Inc. 4.6
Lexmark International Inc. 3.9
UnitedGlobalCom Inc. 3.8
Mercury Interactive Corp. 3.4
Idec Pharmaceuticals Corp. 3.4
Silicon Laboratories Inc. 3.3
Microcell Telecommunications 3.2
Finisar Corp. 3.1
Vignette Corp. 2.8
</TABLE>
GROWTH OF A $10,000 INVESTMENT
ING Small Cap Growth Fund vs. Russell 2500 Growth Index: 12/15/98-10/31/00
[LINE GRAPH]
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES RUSSELL 2500 GROWTH INDEX
<S> <C> <C> <C>
9425 10000 10000 10000
10697 11350 11350 11215
10443 11070 11070 11539
9576 10150 10150 10603
9491 10050 10050 11098
9670 10230 10230 11983
9500 10050 10060 12107
10311 10900 10910 12963
10019 10580 10590 12698
9962 10520 10530 12424
9906 10450 10450 12513
10669 11260 11260 13123
12008 12670 12670 14672
14741 15540 15540 17440
15306 16120 16110 17342
19642 20680 20670 21790
16635 17500 17500 20080
14863 15630 15630 18124
13007 13670 13670 16511
15382 16160 16150 18694
15042 15790 15780 17163
16503 17320 17310 19399
15174 15920 15910 18144
13299 13530 13930 17023
</TABLE>
Hypothetical illustration of $10,000 includes the maximum sales charge of 5.75%
for Class A shares. Class B shares are subject to a maximum contingent deferred
sales charge (CDSC) of 5% (1-year) and 4% (inception); Class C shares has a
maximum CDSC of 1% (1-year). Ending values include change in share value and
reinvestment of distributions. The Russell 2500 Growth Index is unmanaged with
no sales charges or expenses. Furman Selz Capital Management became Sub-Adviser
to the Fund on October 31, 1999.
PLEASE SEE PAGE 13 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DISCLOSURES AND RISK
CONSIDERATIONS.
AVERAGE ANNUAL TOTAL RETURN(2) (with sales charge)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS X SHARES
<S> <C> <C> <C> <C>
1-Year 17.49% 18.71% 22.71% 18.69%
Inception 16.41 17.48 19.32 10.65
</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.
The principal value and return on an investment in the Fund will fluctuate, so
that an investor's shares when redeemed may be worth more or less than the
original cost. Total returns include change in share value and reinvestment of
distributions.
MANAGER'S OVERVIEW
[PHOTO OF GEORGE PAOLETTI]
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.
"THE FUND'S ENERGY AND HEALTHCARE STOCKS HAVE BOTH PRODUCED STRONG RESULTS."
SEE PAGE 15 FOR FINANCIAL DETAILS.
QUESTION: How has the Fund performed relative to its benchmark?
ANSWER: Despite the challenging investment environment, the Fund produced a very
strong absolute return. However, it lagged the return of its benchmark, the
Russell 2500 Growth Index.
QUESTION: Which areas were the largest contributors to performance?
ANSWER: The Fund's energy and healthcare stocks have both produced strong
results. The energy sector has benefited from higher commodity prices
leading to increased profitability. One such Fund's holding was Swift
Energy, a natural gas and oil producer from the U.S. gulf region.
Contributing to Swift's performance was an increase in natural gas prices,
its inclusion in the S&P Small-Cap 600 Index, and a new discovery in New
Zealand.
The healthcare sector has performed well, as it has been viewed as a
defensive sector amid the market's volatility. The Fund's holding in Health
Management Associates, which operates a number of hospitals, was
particularly impressive. The firm's positive performance is due to the
market's sector rotation and the hope that Congress will pass a "Relief Act"
giving hospitals better economics. Another example was Medarex, a producer
of monoclonal anti-bodies from mice. Its stock rose on hopes that increased
genomics data will provide them more opportunities to commercialize their
antibody technology.
QUESTION: What areas hindered performance?
ANSWER: A number of our technology and telecommunications stocks fell, due to
the confluence of extremely high valuations running into decelerating,
although still strong, growth. For example, LTX Corp., a semiconductor test
firm, reported strong results, and is small enough that it may be able to
post good results throughout an industry slowdown. However, its price
declined sharply in sympathy to its largest competitor's (Teradyne)
reporting weak results.
Another technology holding was Keynote Systems, which sells a web site
measurement service. It also reported good results, but investors expected
sales growth to slow to "only" 20% per quarter. While the company is
profitable and nearly half its market value is in cash, it still declined.
QUESTION: What is your outlook for the Fund?
ANSWER: We're currently taking a cautious approach, and have increased the
Fund's cash position in recent months. In the short-term, stock performance
will depend on the sector psychology of investors. Having said that, we
believe the stocks in the Fund's portfolio should show strong operating
results over the long-term.
4 ING Domestic Mutual Funds Annual Report / October 31, 2000 [ING FUNDS LOGO]
<PAGE> 7
DATA AS OF 10/31/00
ING FOCUS FUND
FOR INVESTORS SEEKING LONG-TERM GROWTH FROM A NON-DIVERSIFIED EQUITY PORTFOLIO
<TABLE>
<CAPTION>
ASSET ALLOCATION(1)
<S> <C>
Common Stocks 92.7%
Short-term Investments 7.3
</TABLE>
<TABLE>
<CAPTION>
TOP FIVE INDUSTRIES(1)
<S> <C>
Medical: Hospitals 6.1%
Medical Products 5.5
Telecom. Services 4.8
Retail: Discount 4.7
Multimedia 4.2
</TABLE>
<TABLE>
<CAPTION>
TOP TEN HOLDINGS(1)
<S> <C>
American International Group, Inc. 4.1%
The Chubb Corp. 3.9
Baxter International Inc. 3.8
Siebel Systems, Inc. 3.7
PepsiCo, Inc. 3.6
General Dynamics Corp. 3.6
AON Corp. 3.6
Tenet Healthcare Corp. 3.5
Bank of New York Co. Inc. 3.2
HCA - The Healthcare Co. 3.1
</TABLE>
GROWTH OF A $10,000 INVESTMENT
ING Focus Fund vs. Russell 1000 Index: 12/15/98-10/31/00
[LINE GRAPH]
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES RUSSELL 1000 INDEX
<S> <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 12480 12470 12064
12309 12990 12980 12374
13270 13999 13989 13120
12900 13597 13587 12583
12832 13524 13514 12549
13659 14381 14361 13693
13240 13937 13917 13237
13338 14030 14020 12894
13493 14185 14175 13223
13532 14216 14206 13003
14106 14825 14805 13965
13951 14650 14629 13317
14281 14580 14970 13158
</TABLE>
Hypothetical illustration of $10,000 includes the maximum sales charge of 5.75%
for Class A shares. Class B shares are subject to a maximum contingent deferred
sales charge (CDSC) of 5% (1-year) and 4% (inception); Class C shares has a
maximum CDSC of 1% (1-year). Ending values include change in share value and
reinvestment of distributions. The Russell 1000 Index is unmanaged with no sales
charges or expenses.
PLEASE SEE PAGE 13 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DISCLOSURES AND RISK
CONSIDERATIONS.
AVERAGE ANNUAL TOTAL RETURN(2) (with sales charge)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS X SHARES
<S> <C> <C> <C> <C>
1-Year 13.84% 15.03% 19.05% 15.06%
Inception 20.91 22.25 23.98 17.60
</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.
The principal value and return on an investment in the Fund will fluctuate, so
that an investor's shares when redeemed may be worth more or less than the
original cost. Total returns include change in share value and reinvestment of
distributions.
MANAGER'S OVERVIEW
[PHOTOS OF MICHAEL L. KASS AND ADRIAN JONES]
MICHAEL L. KASS
ADRIAN JONES
Portfolio Managers
OBJECTIVE
GROWTH OF CAPITAL through investment in a non-diversified portfolio of
approximately 20-40 stocks.
"OUR LARGEST THEME, THE RECOVERY IN HEALTHCARE SERVICES, HAS BEEN A MAJOR
CONTRIBUTOR TO PERFORMANCE."
SEE PAGE 17 FOR FINANCIAL DETAILS.
QUESTION: How did the Fund perform during the one year reporting period?
ANSWER: The Fund significantly outperformed its benchmark, the Russell 1000
Index.
QUESTION: What is your current take on the market given this year's steep
correction?
ANSWER: Although the major indices are still struggling, the bear market in
breadth could be subsiding, and early signs of new market leadership have
emerged. Outside of the mega-cap technology stocks we're finding other areas
of the market that continue to thrive and reward improving fundamentals. We
have built thematic concentrations in three such areas over the past several
months: healthcare services, defense and insurance.
QUESTION: Could you describe some of the Fund's strong performers?
ANSWER: Our largest theme, the recovery in healthcare services, has been a major
contributor to performance. In particular, our hospital stocks have
performed well.
In the defense sector, we see major fundamental changes that are likely
to lead to improving financial returns for the next several years. Foremost
to this belief is that, in order to maintain the current stock of military
equipment, procurement spending on tanks, planes and ships will need to rise
substantially for several years. And, in the financial services area, our
insurance investments have posted solid returns. Additionally, our other
stocks in the theme, Bank of New York and Morgan Stanley Dean Witter, have
also risen in recent months.
QUESTION: What strategies detracted from the Fund's performance?
ANSWER: Our bandwidth theme has recently underperformed. After being one of the
most favored areas of the market, telecommunications services has lost some
of its luster, and our holdings were no exception. It may be some time
before the business fundamentals reassert themselves and the financing
overhang clears.
QUESTION: What is your outlook for the Fund given current market conditions?
ANSWER: It appears that the slowdown in economic activity has persisted and may
be more cyclical than seasonal. Also, anecdotal evidence points to tighter
bank lending, particularly in the leveraged loan market. Should the economy
start to weaken too much, we believe the Federal Reserve may have less room
to ease policy than we had previously thought, due to high oil prices and
the tight labor market. Having said that, we are encouraged by this year's
results, and remain enthusiastic about the prospects for our companies and
the industries in which they compete.
[ING FUNDS LOGO] ING Domestic Mutual Funds Annual Report / October 31, 2000 5
<PAGE> 8
DATA AS OF 10/31/00
ING MID CAP GROWTH FUND
FOR INVESTORS SEEKING LONG-TERM GROWTH
<TABLE>
<CAPTION>
ASSET ALLOCATION(1)
<S> <C>
Common Stocks 97.8%
Short-term Investments 2.2
</TABLE>
<TABLE>
<CAPTION>
TOP FIVE INDUSTRIES(1)
<S> <C>
Telecomm. Equipment 7.6%
Medical: Drugs 6.4
Semicon. Comp.: Intg. Circuit 5.7
Wireless Equipment 4.5
Commercial Services: Finance 3.8
</TABLE>
<TABLE>
<CAPTION>
TOP TEN HOLDINGS(1)
<S> <C>
King Pharmaceuticals Inc. 2.9%
Comverse Technology, Inc. 2.6
Linear Technology Corp. 2.5
Waters Corp. 2.2
Sanmina Corp. 2.2
IVAX Corp. 2.2
MiniMed Inc. 2.1
Polycom Inc. 2.0
Paychex Inc. 2.0
Concord EFS Inc. 1.9
</TABLE>
GROWTH OF A $10,000 INVESTMENT
ING Mid Cap Growth Fund vs. Russell Mid Cap Growth Index: 12/15/98-10/31/00
[LINE GRAPH]
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES RUSSELL
<S> <C> <C> <C>
9425 10000 10000 10000
10151 10770 10770 11215
9746 10330 10330 11552
9086 9630 9630 10987
9189 9730 9730 11599
9510 10060 10060 12128
9510 10070 10060 11971
9934 10510 10500 12807
9755 10310 10310 12400
9472 10000 10000 12271
9548 10070 10070 12166
9793 10330 10330 13107
10113 10660 10660 14465
10650 11220 11220 16970
10160 10700 10700 16967
12045 12680 12680 20533
12516 13170 13170 20554
12385 13020 13020 18558
11480 12070 12060 17205
12696 13340 13330 19030
12130 12730 12730 17826
13393 14050 14050 20514
12865 13490 13490 19511
12460 12660 13060 18176
</TABLE>
Hypothetical illustration of $10,000 includes the maximum sales charge of 5.75%
for Class A shares. Class B shares are subject to a maximum contingent deferred
sales charge (CDSC) of 5% (1-year) and 4% (inception); Class C shares has a
maximum CDSC of 1% (1-year). Ending values include change in share value and
reinvestment of distributions. The Russell Mid Cap Growth Index is unmanaged
with no sales charges or expenses.
PLEASE SEE PAGE 13 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DISCLOSURES AND RISK
CONSIDERATIONS.
AVERAGE ANNUAL TOTAL RETURN(2) (with sales charge)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS X SHARES
<S> <C> <C> <C> <C>
1-Year 19.96% 21.43% 25.43% 21.43%
Inception 12.43 13.39 15.29 10.79
</TABLE>
Inception dates: Class A, B, and C shares is 12/15/98; 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.
The principal value and return on an investment in the Fund will fluctuate, so
that an investor's shares when redeemed may be worth more or less than the
original cost. Total returns include change in share value and reinvestment of
distributions.
MANAGER'S OVERVIEW
[PHOTOS MATTHEW S. PRICE AND DAVID C. CAMPBELL]
MATTHEW S. PRICE
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.
"WE'VE BEEN REWARDED FOR MAINTAINING A VERY DISCIPLINED INVESTMENT STRATEGY..."
SEE PAGE 18 FOR FINANCIAL DETAILS.
QUESTION: How did the Fund perform during the reporting period?
ANSWER: The Fund generated excellent absolute and relative returns,
outperforming its benchmark, the Russell Mid-Cap Growth Index.
QUESTION: To what would you attribute these strong results?
ANSWER: We've been rewarded for maintaining a very disciplined investment
strategy--one that favors stocks with positive earnings growth, relative
price strength and reasonable valuations. As such, we were able to
participate in the market's upside, while avoiding some of the weakest
performers when the market corrected.
QUESTION: Could you describe some investment strategies that have performed well
for the Fund?
ANSWER: We increased our healthcare weighting over the course of this year, and
this has contributed to performance. We have focused primarily on medical
technology and in hospital companies. As a result of the enhancements made
to our screening process earlier this year, we also have a few biotechnology
investments. We also increased our exposure to energy-related stocks from
virtually zero a year ago to our current weighting in the area of 10%. We
believe the fundamentals continue to look very strong for our energy-related
investments. And stocks of financial services companies have recently come
to life. We have some exposure to financial institutions, but would probably
look to add some more.
QUESTION: Can you give us some examples of strategies that did not work for the
Fund?
ANSWER: Our semiconductor and software stocks, the two areas in which we have
the most exposure, have weakened in recent months, as investors have become
nervous about technology earnings growth. The possibility of a slowdown in
the economy has also cast a pall over cyclical stocks. We have had limited
investments in both consumer and industrial cyclicals--with mixed results.
QUESTION: What is your outlook for the market and for the Fund?
ANSWER: At the moment, the overriding long-term bullish factors in the stock
market--productivity improvements and free markets, among others--are being
clouded by short-term anxiety about the pace of worldwide economic growth.
The speculative enthusiasm of last year and early this year has given way to
a degree of caution, if not pessimism, among some investors. And it is clear
that there is a renewed focus on earnings and valuations.
We are still confident that in the current environment and in the future,
our attention to bottom-line improvement and reasonable valuations, along
with the increased flexibility in our screens, will reward the patient
investor in mid-cap stocks.
6 ING Domestic Mutual Funds Annual Report / October 31, 2000
[ING FUNDS LOGO]
<PAGE> 9
DATA AS OF 10/31/00
ING LARGE CAP GROWTH FUND
FOR INVESTORS SEEKING LONG-TERM GROWTH
<TABLE>
<CAPTION>
ASSET ALLOCATION(1)
<S> <C>
Common Stocks 96.2%
Short-term Investments 3.8
</TABLE>
<TABLE>
<CAPTION>
TOP FIVE INDUSTRIES(1)
<S> <C>
Electronic Comp.: Semicon. 9.5%
Medical: Drugs 7.7
Diversified Manufact. Operations 7.4
Networking Products 7.3
Computers: Memory Devices 6.2
</TABLE>
<TABLE>
<CAPTION>
TOP TEN HOLDINGS(1)
<S> <C>
General Electric Co. 7.7%
Cisco Systems, Inc. 6.2
Pfizer Inc. 5.3
Sun Microsystems, Inc. 5.1
EMC Corp. 4.4
Intel Corp. 4.3
America Online Inc. 3.3
Cardinal Health Inc. 3.0
Oracle Corp. 3.0
Medtronic Inc. 2.7
</TABLE>
GROWTH OF A $10,000 INVESTMENT
ING Large Cap Growth Fund vs. S&P 500 Index: 12/15/98-10/31/00
[LINE GRAPH]
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES S&P 500
<S> <C> <C> <C>
9425 10000 10000 10000
10151 10770 10760 10771
10518 11150 11150 11222
10236 10850 10840 10873
10707 11340 11330 11308
10773 11410 11410 11745
10292 10890 10890 11468
11046 11680 11680 12104
10631 11230 11240 11727
10603 11190 11200 11668
10462 11050 11050 11348
11122 11750 11740 12067
11659 12300 12300 12312
12488 13170 13170 13037
11640 12280 12270 12382
11951 12600 12590 12148
12884 13570 13560 13337
12290 12940 12930 12935
11904 12530 12520 12670
12941 13610 13600 12982
12564 13210 13200 12779
13704 14400 14390 13573
12488 13110 13100 12856
11762 11940 12340 12802
</TABLE>
Hypothetical illustration of $10,000 includes the maximum sales charge of 5.75%
for Class A shares. Class B shares are subject to a maximum contingent deferred
sales charge (CDSC) of 5% (1-year) and 4% (inception); Class C shares has a
maximum CDSC of 1% (1-year). Ending values include change in share value and
reinvestment of distributions. The S&P 500 Index is unmanaged with no sales
charges or expenses.
PLEASE SEE PAGE 13 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DISCLOSURES AND RISK
CONSIDERATIONS.
AVERAGE ANNUAL TOTAL RETURN(2) (WITH SALES CHARGE)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS I SHARES CLASS X SHARES
<S> <C> <C> <C> <C> <C>
1-Year -0.32% 0.02% 4.11% 6.35% 0.12%
Inception 9.03 9.91 11.86 11.76 5.41
</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.
The principal value and return on an investment in the Fund will fluctuate, so
that an investor's shares when redeemed may be worth more or less than the
original cost. Total returns include change in share value and reinvestment of
distributions. Class I shares return does not include sales charge.
MANAGER'S OVERVIEW
[PHOTO OF WILLIAM H. THOMAS]
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 FUND ALSO ASTUTELY AVOIDED LAST YEAR'S TECHNOLOGY DARLINGS, THE SO-CALLED
"DOT.COMS."
SEE PAGE 20 FOR FINANCIAL DETAILS.
QUESTION: How did the Fund perform during the six-month reporting period?
ANSWER: The Fund slightly underperformed its benchmark, the S&P 500 Index.
QUESTION: Can you describe the prevailing market environment during this period?
ANSWER: While the period was one of positive equity market returns, volatility
was high, due to investor concern over rising interest rates and the threat
of higher inflation. Strong growth of corporate earnings provided the
support for the positive trend in stock prices.
QUESTION: What factors contributed most to the Fund's results?
ANSWER: The leading contributor to performance has been technology stocks, which
continued to benefit from strong growth in productivity-related capital
spending. In particular, our exposure to optical networks firms, including
JDS Uniphase and Corning have been particularly helpful, as have our
holdings in leading data storage companies EMC and Veritas. The Fund's
financial services stocks, such as AIG and Citigroup, also performed well,
as these companies lead in the global consolidation of this industry.
The Fund also astutely avoided last year's technology darlings, the
so-called "dot.coms." A substantial number of these companies have
underperformed this year, as many business models have proven unsuccessful
in sustaining revenue growth.
QUESTION: What factors hindered the Fund's performance?
ANSWER: While we have avoided most direct consumer-related Internet stocks, two
holdings, America Online and Yahoo underperformed. AOL has suffered from
uncertainty over its pending merger with Time Warner, while Yahoo has been
under a cloud of concern related to the strength of advertising spending
over the Internet. Telecommunications has also been a difficult sector, with
growing concerns over price competition, especially in voice transmission.
Earlier in the year the Fund sold Sprint PCS, and reduced its position in
Worldcom.
QUESTION: What is your outlook for the stock market and the Fund?
ANSWER: Volatility in the equity markets has continued, as investors have become
increasingly concerned that slower economic growth will lead to
disappointing earnings performance for many companies. We remain
constructive, forecasting that economic growth next year will be near its
long-term trend of 3-3 1/2 percent. Productivity related investments should
remain high, which could support strong earnings growth in the technology
sector. From an economic standpoint, we expect inflation to decline. With
slower growth and lower inflation, the Federal Reserve Board should remain
on the sidelines, and may even lower interest rates later in the coming
year.
ING Domestic Mutual Funds Annual Report / October 31, 2000 7
[ING FUNDS LOGO]
<PAGE> 10
DATA AS OF 10/31/00
ING TAX EFFICIENT EQUITY FUND
FOR INVESTORS SEEKING LONG-TERM GROWTH WITH MINIMUM TAX CONSEQUENCES
<TABLE>
<CAPTION>
ASSET ALLOCATION(1)
<S> <C>
Common Stocks 97.8%
Short-term Investments 2.2
</TABLE>
<TABLE>
<CAPTION>
TOP FIVE INDUSTRIES(1)
<S> <C>
Oil Companies: Integrated 7.9%
Diversified Mfg. Operations 5.7
Computers 5.7
Medical: Drugs 5.6
Super-Regional Banks-US 3.9
</TABLE>
<TABLE>
<CAPTION>
TOP TEN HOLDINGS(1)
<S> <C>
General Electric Co. 3.6%
Intel Corp. 2.4
Conoco Inc. 2.3
Sun Microsystems, Inc. 2.2
Merck & Co., Inc. 2.1
Exxon Mobil Corp. 1.9
Household International Inc. 1.9
Baxter International Inc. 1.9
IBM Corp. 1.8
Cisco Systems, Inc. 1.8
</TABLE>
GROWTH OF A $10,000 INVESTMENT
ING Tax Efficient Equity Fund vs. S&P 500 Index: 12/15/98-10/31/00
[LINE GRAPH]
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares S&P 500 Index
<S> <C> <C> <C>
9425 10000 10000 10000
10151 10770 10770 10771
10443 11100 11070 11222
10132 10760 10730 10873
10424 11070 11040 11308
11056 11730 11690 11745
10886 11550 11510 11468
11527 12230 12180 12104
11178 11850 11810 11727
11056 11720 11680 11668
10745 11380 11340 11348
11301 11960 11920 12067
11423 12090 12050 12312
12032 12733 12679 13037
11397 12052 12005 12382
11426 12072 12025 12148
12316 13004 12960 13337
12316 13004 12950 12935
11984 12643 12598 12670
11899 12543 12498 12982
11729 12352 12317 12779
12486 13144 13101 13573
11672 12282 12236 12856
11710 11912 12267 12802
</TABLE>
12/15/18 10/31/00
Hypothetical illustration of $10,000 includes the maximum sales charge of 5.75%
for Class A shares. Class B shares are subject to a maximum contingent deferred
sales charge (CDSC) of 5% (1-year) and 4% (inception); Class C shares has a
maximum CDSC of 1% (1-year). Ending values include change in share value and
reinvestment of distributions. The S&P 500 Index is unmanaged with no sales
charges or expenses.
PLEASE SEE PAGE 13 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DISCLOSURES AND RISK
CONSIDERATIONS.
AVERAGE ANNUAL TOTAL RETURN(2) (with sales charge)
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares Class X Shares
<S> <C> <C> <C> <C>
1-Year -2.33% -2.06% 1.91% -2.12%
Inception 8.77 9.77 11.50 3.70
</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.
The principal value and return on an investment in the Fund will fluctuate, so
that an investor's shares when redeemed may be worth more or less than the
original cost. Total returns include change in share value and reinvestment of
distributions.
MANAGER'S OVERVIEW
[PHOTOS OF BOB SANDRONI, CARL GOLDSMITH AND MARLA RYAN]
BOB SANDRONI
CARL GOLDSMITH
MARLA RYAN
Portfolio Managers
OBJECTIVE
HIGH TOTAL RETURN on an after-tax basis through a diversified portfolio of
stocks.
"...WE FOCUSED ON VERY ATTRACTIVELY PRICED INDUSTRIAL COMPANIES THAT HAVE
DEMONSTRATED SOLID FUNDAMENTAL GROWTH."
SEE PAGE 21 FOR FINANCIAL DETAILS.
QUESTION: How has the Fund performed relative to its benchmark?
ANSWER: During the reporting period the Fund underperformed its benchmark, the
S&P 500 Index.
QUESTION: What were some of the major factors behind the Fund's returns?
ANSWER: A moderation in economic growth, brought on by Federal Reserve Board
interest rate hikes, negatively impacted the results of both our banking and
retail stocks. Also, our exposure to telecommunications service providers
detracted from our returns, as these companies faced a rapid deterioration
in long distance pricing. Finally, a few of our technology stocks posted
major earnings disappointments, causing their stock prices to fall sharply.
QUESTION: What investment strategies did you employ to enhance returns?
ANSWER: One strategy that has worked well for the Fund was maintaining our
position in certain portions of the technology sector. In addition, we
focused on very attractively priced industrial companies that have
demonstrated solid fundamental growth.
QUESTION: Could you share some examples?
ANSWER: Within technology, we identified high growth opportunities, such as
those in the server and data storage markets. Fund holdings in this area
included Sun Microsystems and Veritas Software, and secularly growing
contract manufacturers, Flextronics and Solectron. Other winning stocks were
chipmaker Analog Devices and electronics distributor Arrow Electronics. At
the same time, our exposure to several industrial stocks demonstrating solid
earnings growth aided returns. Examples included Tyco International, United
Technologies, and General Dynamics.
QUESTION: What strategies hurt results?
ANSWER: A well diversified equity fund should enable investors over the long run
to reduce their risk of having too much exposure to any given stock. While
our Fund seeks long term capital appreciation, in the short term we had too
many stocks with earnings disappointments. However, diversification limited
our downside, and a number of strong performers made up some of the
performance differential.
QUESTION: What is your outlook for the Fund?
ANSWER: Our economic outlook is for continued moderate growth and low inflation.
We believe that technology-driven capital spending has the potential to
yield further productivity gains, lengthening this economic expansion. We
are also encouraged by the more rational equity market tone, whereby
investors are questioning overly exuberant growth forecasts, and valuation
is once again important. We expect the Fund to perform well in this
environment, as our broadly diversified portfolio is committed to
emphasising companies with attractive growth prospects that are reasonably
valued.
8 ING Domestic Mutual Funds Annual Report / October 31, 2000 [ING FUNDS LOGO]
<PAGE> 11
DATA AS OF 10/31/00
ING GROWTH & INCOME FUND
FOR INVESTORS SEEKING LONG-TERM TOTAL RETURNS
<TABLE>
<CAPTION>
ASSET ALLOCATION(1)
<S> <C>
Common Stocks 99.0%
Short-term Investments 1.0
</TABLE>
<TABLE>
<CAPTION>
TOP FIVE INDUSTRIES(1)
<S> <C>
Medical: Drugs 8.2%
Diversified Mfg. Operations 6.1
Computers 5.9
Telecommunication Services 5.1
Multimedia 4.1
</TABLE>
<TABLE>
<CAPTION>
TOP TEN HOLDINGS(1)
<S> <C>
General Electric Co. 4.8%
Verizon Communications 3.5
Cisco Systems, Inc. 3.3
Microsoft Corp. 3.3
Exxon Mobil Corp. 2.8
Pfizer Inc. 2.7
Wells Fargo & Co. 2.7
Merck & Co., Inc. 2.7
Intel Corp. 2.7
Citigroup Inc. 2.6
</TABLE>
GROWTH OF A $10,000 INVESTMENT
ING Growth & Income Fund vs. S&P 500 Index: 12/15/98-10/31/00
[LINE GRAPH]
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares S&P 500 Index
<S> <C> <C> <C>
9425 10000 10000 10000
9934 10540 10540 10771
10292 10910 10920 11222
9896 10490 10490 10873
10143 10748 10740 11308
10416 11039 11030 11745
10256 10858 10850 11468
10814 11439 11442 12104
10512 11119 11111 11727
10324 10908 10901 11668
10069 10638 10631 11348
10777 11379 11381 12066
11003 11600 11602 12312
11498 12127 12118 13037
11015 11605 11597 12382
10816 11394 11386 12148
11801 12418 12419 13336
11479 11667 12068 12935
11148 11715 11717 12670
11365 11936 11938 12982
11166 11725 11727 12779
11876 12458 12459 13573
11214 11756 11757 12856
11081 11215 11617 12802
</TABLE>
12/15/98 10/31/00
Hypothetical illustration of $10,000 includes the maximum sales charge of 5.75%
for Class A shares. Class B shares are subject to a maximum contingent deferred
sales charge (CDSC) of 5% (1-year) and 4% (inception); Class C shares has a
maximum CDSC of 1% (1-year). Ending values include change in share value and
reinvestment of distributions. The S&P 500 Index is unmanaged with no sales
charges or expenses.
PLEASE SEE PAGE 13 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DISCLOSURES AND RISK
CONSIDERATIONS.
AVERAGE ANNUAL TOTAL RETURN(2) (with sales charge)
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares Class X Shares
<S> <C> <C> <C> <C>
1-Year -3.11% -2.93% 1.07% -2.84%
Inception 5.62 6.30 8.31 2.65
</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.
The principal value and return on an investment in the Fund will fluctuate, so
that an investor's shares when redeemed may be worth more or less than the
original cost. Total returns include change in share value and reinvestment of
distributions.
MANAGER'S OVERVIEW
[PHOTO OF MARTIN JANSEN]
MARTIN JANSEN
Portfolio Manager
Objective
HIGH TOTAL RATES OF RETURN through investment in a diversified portfolio of
primarily income-producing stocks.
"...AN OVERWEIGHTING IN THE DEFENSIVE CONSUMER STAPLES AND ENERGY SECTORS HELPED
PERFORMANCE."
SEE PAGE 23 FOR FINANCIAL DETAILS.
QUESTION: How did the Fund perform relative to its benchmark during the
reporting period?
ANSWER: The Fund underperformed its benchmark, the S&P 500 Index. Both sector
and stock selection contributed to the underperformance.
QUESTION: How was the Fund affected by the global stock market correction?
ANSWER: On a sector level, an overweight in technology hurt the Fund in the
March and April timeframe, as the Nasdaq peaked and subsequently fell
approximately 35%. Stock selection particularly hurt performance in the
communication services sector. The Fund had a lack of wireless exposure
early in the year, and holdings in MCI Worldcom and Sprint detracted from
results, due to the rejection of their proposed merger in late June, as well
as a weakening of the consumer long-distance business throughout the year.
QUESTION: What are some examples of strategies that helped performance?
ANSWER: Our underweight in communication services was beneficial, as the sector
fell 21% during the period. Conversely, an overweighting in the defensive
consumer staples and energy sectors helped performance. Stock selection was
strong in healthcare and technology, where our holdings in Sun Microsystems,
Ciena Corp, Applied Materials, Tenet Healthcare and Eli Lilly, contributed
positively to results.
QUESTION: What is your outlook for the market going forward?
ANSWER: With the benefit of hindsight, the market was to some degree justified
in its concerns regarding the earnings slowdown. We believe the earnings
deceleration is likely to continue in the coming quarters, before
accelerating once again. In this respect, the "landing" from an earnings
perspective is somewhat harder than expected. With the equity market well
off its highs and long bond yields 100 basis points below February peaks,
the slowdown appears reflected in stock prices. Instead of the feared
Federal Reserve tightening, the next move is now more likely to be an
easing, although this is still a few months away. This friendlier backdrop
should arrest the decline in growth by the first half of next year, thereby
alleviating fears of a full-blown earnings recession.
QUESTION: Based on your outlook, how have you positioned the Fund's portfolio?
ANSWER: We eliminated our small underweight in technology and capital goods
during the month of October by reducing our overweight in the interest
sensitive financial and utility sectors, which appears fully valued at
current levels. We maintain small overweight positions in consumer staples
and healthcare and remain comfortable with our underweight in consumer
cyclicals.
ING Domestic Mutual Funds Annual Report / October 31, 2000 9
[ING FUNDS LOGO]
<PAGE> 12
DATA AS OF 10/31/00
ING HIGH YIELD BOND FUND
FOR INVESTORS SEEKING HIGH CURRENT INCOME AND TOTAL RETURNS
<TABLE>
<CAPTION>
ASSET ALLOCATION(1)
<S> <C>
Corporate Bonds 93.1%
Warrants 0.1
Repurchase Agreement 6.8
</TABLE>
<TABLE>
<CAPTION>
CREDIT ALLOCATION(1)
<S> <C>
A/A 2.7%
BBB/BB 42.8
B/B 44.2
CCC/Caa 1.5
NR/NR 2.0
Repurchase Agreement 6.8
</TABLE>
<TABLE>
<CAPTION>
TOP TEN HOLDINGS(1)
<S> <C>
CSC Holdings, Inc., 11.125% due 4/1/08 6.8%
Century Comm. Corp., due 3/15/03 6.5
Gulf Canada Ltd., 8.375% due 11/15/05 4.6
Rogers Cablesys. Inc., 10.0% due 3/15/05 4.5
Chancellor Media Corp.,
8.125% due 12/15/07 4.3
Nuevo Energy Co., 9.375% due 10/1/10 4.3
Global Cr. Hldg. Ltd., 10.5% due 12/1/08 3.8
Crown Castle Int'l. Corp.,
10.625% due 11/15/07 3.3
Pride Int'l., Inc., 10.0% due 6/1/09 3.0
Orange PLC, 8.75% due 6/1/06 2.9
</TABLE>
GROWTH OF A $10,000 INVESTMENT
ING High Yield Bond Fund vs. Lehman Brothers High Yield Index: 12/15/98-10/31/00
[LINE GRAPH]
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES LB HIGH YIELD INDEX
<S> <C> <C> <C>
9524 10000 10000 10000
9567 10042 10042 10031
9772 10243 10250 10180
9757 10209 10218 10120
9906 10369 10378 10216
10094 10569 10569 10414
9905 10355 10355 10274
9980 10427 10426 10252
10009 10450 10450 10293
9987 10420 10430 10180
10051 10481 10491 10107
10131 10557 10567 10039
10332 10760 10770 10158
10442 10868 10878 10272
10338 10753 10763 10228
10367 10776 10786 10247
10256 10654 10664 10032
10365 10760 10770 10048
10261 10646 10656 9945
10466 10852 10862 10148
10556 10938 10948 10225
10681 11060 11071 10294
10506 10873 10884 10205
10323 10296 10675 9878
</TABLE>
Hypothetical illustration of $10,000 includes the maximum sales charge of 4.75%
for Class A shares. Class B shares are subject to a maximum contingent deferred
sales charge (CDSC) of 5% (1-year) and 4% (inception); Class C shares has a
maximum CDSC of 1% (1-year). Ending values include change in share value and
reinvestment of distributions. The LB High Yield Index is unmanaged with no
sales charges or expenses.
PLEASE SEE PAGE 13 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DISCLOSURES AND RISK
CONSIDERATIONS.
AVERAGE ANNUAL TOTAL RETURN(2) (with sales charge)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS X SHARES
<S> <C> <C> <C> <C>
1-Year -2.98% -3.61% 0.09% -3.51%
Inception 1.72 1.57 3.55 1.37
</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.
The principal value and return on an investment in the Fund will fluctuate, so
that an investor's shares when redeemed may be worth more or less than the
original cost. Total returns include change in share value and reinvestment of
distributions.
MANAGER'S OVERVIEW
[PHOTO OF BOB BOWMAN]
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.
"OUR SHIFTING STRATEGY IN THE COMMUNICATIONS SECTOR WAS ALSO HELPFUL."
SEE PAGE 25 FOR FINANCIAL DETAILS.
QUESTION: How has the Fund performed relative to its benchmark, the Lehman
Brothers High Yield Index?
ANSWER: In a very difficult environment for high yield bonds the Fund soundly
outperformed its Index.
QUESTION: What were some of the strategies you used to enhance results?
ANSWER: A number of strategies were employed that helped the Fund's performance.
First, the Fund maintained a relatively high credit quality portfolio, with
a higher average credit rating compared to the index. This was beneficial,
as BB-rated securities outperformed more speculative B-rated securities over
the last twelve months.
Second, the Fund's sector weighting strategy aided returns, particularly
our overweight positions in energy and gaming. Our shifting strategy in the
communications sector was also helpful. We were overweight in communications
during the first six months of the period. This strategy paid off, as the
sector outperformed the Index by 2.60% during that time. However, over the
last six months of the period we shifted to an underweight position. This
strategy significantly helped performance, as the sector underperformed the
Index by 4.35% over the last six months.
Third, the number of trading opportunities in the new issue market has
declined over the year, as market weakness and decreased liquidity has made
buyers less receptive to new issues. However, we continue to be able to help
performance by trading in the new issue market.
QUESTION: What strategies hindered the Fund?
ANSWER: While sector weighting continued to generally help Fund performance,
some sector weighting decisions had a negative impact on returns. For
example, we maintained an overweight position in basic industries over the
year, which began to underperform as the economy started to show signs of
slowing. And we continued to underweight the finance sector, which has
outperformed the Index during the period. There were also there were several
security specific holdings that fell sharply.
QUESTION: What is your outlook for the high yield market?
ANSWER: We remain cautious regarding the near term high yield market. Many money
managers, weary as a result of the volume of downgrades and defaults, are
unwilling to add risk moving into the end of the year. In the longer term,
we are cautiously optimistic about the market. We believe that the market
default rate will peak in the first half of 2001. Market technicals should
improve after the end fiscal 2000. Therefore, we think that any further
near-term weakness could provide buying opportunities for long term
investors.
10 ING Domestic Mutual Funds Annual Report / October 31, 2000 [ING FUNDS LOGO]
<PAGE> 13
DATA AS OF 10/31/00
ING INTERMEDIATE BOND FUND
FOR INVESTORS SEEKING HIGH CURRENT INCOME CONSISTENT WITH THE PRESERVATION OF
CAPITAL AND LIQUIDITY
<TABLE>
<CAPTION>
ASSET ALLOCATION(1)
<S> <C>
Corporate Bonds 49.7%
U.S. Government 24.3
U.S. Treasury 20.2
Repurchase Agreement 5.8
</TABLE>
<TABLE>
<CAPTION>
CREDIT ALLOCATION(1)
<S> <C>
U.S. Treasury 20.2%
U.S. Government 24.3
AA/A 13.2
BBB/BB 31.6
B/B 4.9
Repurchase Agreement 5.8
</TABLE>
<TABLE>
<CAPTION>
TOP TEN HOLDINGS(1)
<S> <C>
US Treasury Bonds, 6.125% due 8/15/29 15.0%
FNMA Pass-Thru, 7.0% due 11/1/14 3.7
US Treasury Notes, 5.75% due 8/15/10 3.6
FNMA Pass-Thru, 6.5% due 9/1/14 3.6
FNMA Pass-Thru, 6.5% due 4/1/29 3.2
Rogers Cablesys., 10.0% due 3/15/05 3.0
Duke Energy Field Services,
7.875% due 8/16/10 2.9
Park Place Entertainment Corp.,
9.375% due 2/15/07 2.9
Lehman Brothers Hldg. Inc.,
6.9% due 1/29/01 2.9
FNMA Pass-Thru, 7.500% due 4/1/30 2.8
</TABLE>
GROWTH OF A $10,000 INVESTMENT
ING Intermediate Bond Fund vs. Lehman Brothers Gov't./Corp. Index:
12/15/98-10/31/00
[LINE GRAPH]
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES LB GOV'T./CORP. INDEX
<S> <C> <C> <C>
9524 10000 10000 10000
9514 9974 9986 9960
9557 10023 10035 10030
9381 9823 9835 9792
9451 9889 9902 9841
9471 9904 9916 9865
9330 9761 9763 9764
9276 9698 9701 9733
9282 9698 9701 9706
9269 9679 9682 9698
9385 9793 9796 9786
9385 9787 9790 9811
9393 9790 9792 9805
9424 9815 9819 9745
9395 9779 9783 9742
9495 9877 9881 9864
9538 9916 9919 10007
9569 9941 9945 9958
9561 9916.04 9931 9949
9749 10105 10119 10152
9866 10231 10235 10260
10036 10401 10405 10404
10080 10440 10444 10444
10146 10120 10506 10510
</TABLE>
Hypothetical illustration of $10,000 includes the maximum sales charge of 4.75%
for Class A shares. Class B shares are subject to a maximum contingent deferred
sales charge (CDSC) of 5% (1-year) and 4% (inception); Class C shares has a
maximum CDSC of 1% (1-year). Ending values include change in share value and
reinvestment of distributions. The LB Gov't/Corp. Index is unmanaged with no
sales charges or expenses.
PLEASE SEE PAGE 13 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DISCLOSURES AND RISK
CONSIDERATIONS.
AVERAGE ANNUAL TOTAL RETURN(2) (with sales charge)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS X SHARES
<S> <C> <C> <C> <C>
1-Year 2.96% 2.30% 6.32% 2.30%
Inception 0.78 0.65 2.67 1.27
</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.
The principal value and return on an investment in the Fund will fluctuate, so
that an investor's shares when redeemed may be worth more or less than the
original cost. Total returns include change in share value and reinvestment of
distributions.
MANAGER'S OVERVIEW
[PHOTO OF JAMES B. KAUFFMANN]
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.
"SECTOR AND SECURITY SELECTION WAS THE MAIN DRIVERS OF OUTPERFORMANCE DURING THE
REPORTING PERIOD."
SEE PAGE 27 FOR FINANCIAL DETAILS.
QUESTION: How has the Fund performed versus its benchmark?
ANSWER: The Fund outperformed its benchmark during the 12-month reporting
period.
QUESTION: What investment strategies enhanced returns?
ANSWER: Sector and security selection were the main drivers of outperformance
during the reporting period. Overweights in the financial institutions,
utility and energy sectors, and underweights in the retail auto parts and
telephone sectors have all helped results. Furthermore, our decision to
underweight corporate bonds and overweight Treasury bonds in the fall was
critical, as corporate spreads have underperformed since September.
Portfolio quality was another driver of performance, as the bond market
generally rewarded those who owned high quality bonds. Early in the year, we
were overweight a group of lower quality names in the Fund. The decision to
sell those names and then overweight much higher quality names was an
effective strategy, as the high yield market generated poor results during
the second half of the year.
QUESTION: Were there any strategies that did not work?
ANSWER: Despite being underweight poorly performing sectors for the majority of
the year, we did own specific names that hindered results. Corporate bonds
such as Saks, Rite-Aid, Kmart, Ames and Amerco hurt returns, as this group
of bonds grossly underperformed the overall index. Fortunately, we exited
many of these positions before they became too damaging.
Despite our view that the Treasury yield curve would invert for most of
the year, we were caught overweight long maturity corporate bonds during the
summer. We were able to dampen the blow by reducing our overweight position
in the fall, as corporate spreads significantly widened.
QUESTION: What is your outlook for the Fund?
ANSWER: Looking ahead to 2001, the corporate bond landscape looks very
challenging. The economy is clearly slowing, and we've seen evidence of this
at the corporate level, as numerous companies have missed earnings due to
slower revenue growth and lower profit margins. We are now beginning to see
slower growth at the macro level, and we believe GDP growth will be between
2.5% to 3% for the next few quarters.
In a slower growth environment, we see the Federal Reserve remaining out
of the market, which should be a catalyst for short-term interest rates to
decline. However, we are worried about corporate bond spreads, even though
they are very attractive from a historical perspective. The news is not all
negative, however, as we think there will be positive performance in certain
sectors of the corporate bond market.
[ING FUNDS LOGO] ING Domestic Mutual Funds Annual Report / October 31, 2000 11
<PAGE> 14
DATA AS OF 10/31/00
ING NATIONAL TAX-EXEMPT BOND FUND
FOR INVESTORS SEEKING CURRENT TAX-EXEMPT INCOME
<TABLE>
<CAPTION>
TOP FIVE STATES(1)
<S> <C>
Illinois 17.2%
Texas 9.3
Oklahoma 9.2
New York 8.7
Pennsylvania 8.7
</TABLE>
<TABLE>
<CAPTION>
CREDIT ALLOCATION(1)
<S> <C>
AAA/Aaa 42.7%
AA/Aa 29.8
A/A 12.6
BBB/Baa 9.2
Repurchase Agreement 5.7
</TABLE>
<TABLE>
<CAPTION>
TOP TEN HOLDINGS(1)
<S> <C>
IL St. Sales Tax Rev., 4.0% due 6/15/04 7.0%
De Kalb Etc. IL Community College
District, 5.75% due 2/1/11 6.4
Salt River Project AZ Impt. & Power,
5.75% due 1/1/19 5.3
San Felipe Del Rio TX, 5.5% due 8/15/19 5.0
Allegheny Co. PA Port Authority,
6.0% due 3/1/24 5.0
OK St. Inds. Auth. Rev., 6.0% due 8/15/19 5.0
NY St. Dorm Auth. Rev., 5.5% due 7/1/15 4.9
Manchester NH Housing/Redevelopment
5.75% due 1/1/08 4.9
Clark Co. NV Sch. Dist., 5.75% due 6/15/02 4.9
W.VA. St. Hosp. Fin. Auth., 6.75% due 9/1/30 4.9
</TABLE>
GROWTH OF A $10,000 INVESTMENT
ING National Tax-Exempt Bond Fund vs. LB Municipal Bond Index: 11/8/99-10/31/00
[LINE GRAPH]
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES LB MUNICIPAL BOND INDEX
<S> <C> <C> <C>
9524 10000 10000 10000
9447 9913 9915 10106
9306 9747 9758 10030
9194 9632 9634 9986
9385 9817 9829 10102
9638 10086 10088 10322
9570 9997 10010 10261
9503 9921 9933 10208
9778 10202 10214 10478
9936 10357 10373 10624
10066 10485 10502 10788
10005 10416 10432 10732
10104 10002 10429 10849
</TABLE>
Hypothetical illustration of $10,000 includes the maximum sales charge of 4.75%
for Class A shares. Class B shares are subject to a maximum contingent deferred
sales charge (CDSC) of 5%; Class C shares has a maximum CDSC of 1%. Ending
values include change in share value and reinvestment of distributions. The LB
Municipal Bond Index is unmanaged, and does not include any sales charges or
expenses
PLEASE SEE PAGE 13 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DISCLOSURES AND RISK
CONSIDERATIONS.
CUMULATIVE TOTAL RETURN(2) (with sales charge)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
<S> <C> <C> <C>
Inception 1.04% 0.02% 4.29%
</TABLE>
Inception date for the fund is 11/8/99. 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. The principal value and return on an
investment in the Fund will fluctuate, so that an investor's shares when
redeemed may be worth more or less than the original cost. Total returns (not
annualized) include change in share value and reinvestment of distributions.
MANAGER'S OVERVIEW
[PHOTO OF ROBERT SCHONBRUNN]
ROBERT SCHONBRUNN
Portfolio Manager
OBJECTIVE
HIGH CURRENT TAX-EXEMPT INCOME, consistent with preservation of capital and
liquidity through investment in a diversified portfolio of municipal bonds.
"THE MUNICIPAL BOND MARKET CONTINUES TO HAVE POSITIVE FUNDAMENTALS."
SEE PAGE 29 FOR FINANCIAL DETAILS.
QUESTION: How has the Fund performed since its launch in November 1999?
ANSWER: Overall, the Fund has generated strong after-tax returns for its
shareholders.
QUESTION: How was the Fund's portfolio positioned during the period?
ANSWER: Initially, the Fund was hurt as it stressed the long end of the yield
curve to take advantage of the higher yields being offered there. When
interest rates rose early in the period these holdings detracted from
results. However, early in 2000 interest rates began to decline. As such,
the very issues that were responsible for the Fund underperforming were
suddenly helping the Fund to generate very strong relative results.
The Fund's high quality portfolio also proved to be a solid strategy. The
Fund's average rating is AA, with the vast majority of its holding rated A
or higher. By avoiding lower quality issues we were spared when interest
rate spreads widened in this portion of the yield curve.
QUESTION: Can you briefly explain your view on the economy and interest rates?
ANSWER: The stock and bond markets are currently discounting a successful move
from strong economic growth to a "soft landing". However, we believe the
odds of a "hard landing," and possibly a recession, are increasing. The
stock market is not expecting this outcome, and will react negatively if it
materializes. On the other hand, the bond market should perform well during
a slow economy. Economic factors most directly impact the short end of the
maturity curve, while inflation is more important to the longer end. As the
economy continues to slow we expect the interest rates on shorter maturity
Treasuries to decline. This interest rate movement should re-establish the
yield curve with a positive slope from its currently inverted position.
Longer rates may also decline depending on the length and strength of the
slowdown.
QUESTION: What is your outlook for the municipal bond market and the Fund?
ANSWER: The municipal bond market continues to have positive fundamentals. And
while municipal bond yields have come down in recent months, we still
believe they are attractive for the long-term. There has been considerable
attention given to the reduced level of new issuance of municipal bonds
because of the stronger state and local balance sheets. Another factor that
is contributing to the relative scarcity of bonds is the strong demand by
the rapidly growing segment of our wealthy population that benefits from tax
exemption.
[ING FUNDS LOGO]
12 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 15
OCTOBER 31, 2000
FOOTNOTES
FOR FUND PERFORMANCE PAGES 3-12
THE VIEWS EXPRESSED IN THE MANAGER'S OVERVIEW ARE SOLELY THOSE OF THE PORTFOLIO
MANAGERS.
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 shares 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. Recent stock market gains has
produced higher than usual short-term fund returns which may not continue.
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 returns 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. Class B,
Class C and Class X shares assume redemption of Fund shares at the end of each
period indicated. Class B and X shares are subject to a maximum contingent
deferred sales charge (CDSC) of 5% (1-year) and 4% (inception) and Class C
shares are subject to a maximum CDSC of 1% (1-year). All share classes have the
same investment portfolio, but are subject to different expenses.
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.
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.
RISK CONSIDERATIONS
These and other risks are more fully described in the prospectus.
ING INTERNET FUND: concentrates its investments in internet and internet-related
companies and carries more risks than funds with more diversified portfolios.
The Fund may also invest in foreign securities.
ING SMALL CAP GROWTH FUND: invests 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 larger, more diversified companies.
ING FOCUS FUND: concentrates its investments in up to only 40 holdings. The Fund
carries more risks than larger more diversified funds.
ING TAX-EFFICIENT EQUITY FUND: may invest up to 10% of its total assets in
foreign securities which may be subject to currency fluctuations, economic and
political uncertainties.
ING HIGH YIELD BOND FUND: Investing 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 INTERNET FUND AND ING FOCUS FUND: Each Fund is classified as a
non-diversified investment company, which means that compared with other funds,
each Fund may invest a greater percentage of its assets in a particular issuer.
The investment of a larger percentage of a Fund's assets in the securities of a
small number of issuers may cause the Fund's share price to fluctuate more than
that of a diversified investment company.
BENCHMARKS
THE @NET INDEX encompasses 50 companies which are key components in the
development of the Internet. The Index is weighted based on market
capitalization of each of the component stocks.
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 1,000 largest companies in
the Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The average market capitalization is
approximately $12.1 billion; the median market capitalization is approximately
$3.8 billion. The smallest company in the index has an approximate market
capitalization of $1,350.8 million.
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.
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.
LEHMAN BROTHERS MUNICIPAL BOND INDEX is comprised of 8,000 bonds. These bonds
are all investment grade fixed-rate, long-term maturities (greater than two
years) and are selected from issues larger than 50 million. It is a total return
index.
ING Domestic Mutual Funds Annual Report / October 31, 2000 13
<PAGE> 16
October 31, 2000
SCHEDULE OF INVESTMENTS
ING INTERNET FUND
<TABLE>
<CAPTION>
Shares/
Principal
Amount Value
--------- -----
<S> <C>
COMMON STOCK -- 100.0%
APPLICATIONS SOFTWARE -- 2.7%
74,790 OpenTV Corp.(1) $ 2,009,981
29,480 Resonate Inc.(1) 1,249,215
------------
3,259,196
BUSINESS-TO-BUSINESS/E-COMMERCE -- 6.7%
24,900 Ariba, Inc.(1) 3,146,738
74,210 Commerce One, Inc.(1) 4,763,354
------------
7,910,092
COMPUTER SERVICES -- 0.7%
148,965 MarchFirst, Inc.(1) 865,859
DATA PROCESSING/MANAGEMENT -- 4.6%
38,750 Automatic Data Processing, Inc. 2,530,860
58,130 First Data Corp. 2,913,766
------------
5,444,626
E-COMMERCE/PRODUCTS -- 2.1%
67,150 Amazon.com, Inc.(1) 2,459,369
E-COMMERCE/SERVICES -- 2.6%
61,050 eBay, Inc.(1) 3,144,075
E-MARKETING/INFORMATION -- 6.3%
122,380 Digitas Inc.(1) 1,460,911
66,090 DoubleClick Inc.(1) 1,073,963
54,475 E.piphany, Inc.(1) 4,909,559
------------
7,444,433
E-SERVICES/CONSULTING -- 3.3%
41,590 Internet Initiative Japan Inc. --
Sponsored ADR 1,039,750
201,320 Razorfish, Inc. -- A Shares(1) 905,940
112,110 Scient Corp.(1) 2,017,980
------------
3,963,670
ELECTRONIC COMPONENTS-SEMICONDUCTOR -- 3.7%
19,774 Broadcom Corp. -- A Shares(1) 4,397,243
FINANCE - INVESTMENT BANKERS/BROKERS -- 0.2%
2,750 Consors Discount Broker AG(1) 218,638
INTERNET APPLICATION SOFTWARE -- 29.7%
56,160 Art Technology Group, Inc.(1) 3,524,040
61,160 Blue Martini Software, Inc.(1) 2,301,145
222,855 BroadVision, Inc.(1) 6,629,936
45,463 Interwoven, Inc.(1) 4,580,397
105,762 Kana Communications, Inc.(1) 2,485,407
120,710 Liberate Technologies, Inc.(1) 2,301,034
71,390 RealNetworks, Inc.(1) 1,471,303
37,690 Software.com, Inc.(1) 5,615,810
121,990 Tumbleweed Communications Corp.(1) 2,089,079
142,570 Vignette Corp.(1) 4,250,368
------------
35,248,519
INTERNET CONNECTIVITY SERVICE -- 0.0%
8,620 Rhythms NetConnections Inc.(1) 18,856
INTERNET CONTENT-INFORMATION/NETWORKING -- 2.0%
117,280 InfoSpace, Inc.(1) 2,360,260
INTERNET INFRASTRUCTURE SOFTWARE -- 4.0%
30,130 Inktomi Corp.(1) 1,911,372
44,555 TIBCO Software Inc.(1) 2,806,965
------------
4,718,337
INTERNET SECURITY -- 11.7%
28,220 Check Point Software Technologies Ltd.(1) 4,469,343
53,920 Internet Security Systems, Inc.(1) 4,758,440
35,640 VeriSign, Inc.(1) 4,704,480
------------
13,932,263
INTERNET TELEPHONY -- 1.5%
93,595 Net2Phone, Inc.(1) $ 1,737,357
NETWORKING PRODUCTS -- 3.8%
82,970 Cisco Systems, Inc.(1) 4,470,009
TELEPHONE-INTEGRATED -- 1.6%
80,740 WorldCom, Inc.(1) 1,917,575
WEB HOSTING/DESIGN -- 6.6%
65,640 Critical Path, Inc.(1) 3,187,643
43,120 Digex, Inc.(1) 1,692,460
87,680 Exodus Communications, Inc.(1) 2,942,760
------------
7,822,863
WEB PORTALS/INTERNET SERVICE PROVIDERS -- 6.2%
99,230 America Online, Inc.(1) 5,004,169
39,320 Yahoo! Inc.(1) 2,305,135
------------
7,309,304
TOTAL INVESTMENTS -- 100.0%
(Cost -- $165,141,819)(2) $118,642,544
</TABLE>
1. Non-income producing security.
2. Aggregate cost for Federal income tax purposes is $170,849,136.
ADR -- American Depository Receipts.
See Notes to Financial Statements.
14 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 17
ING SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
Shares/
Principal
Amount Value
--------- -----
<S> <C>
COMMON STOCK -- 85.1%
ADVERTISING SALES -- 0.8%
7,700 Lamar Advertising Co.(1) $ 369,600
AGRICULTURAL OPERATIONS -- 1.0%
20,000 Delta and Pine Land Co. 488,750
APPAREL MANUFACTURERS -- 1.0%
35,000 McNaughton Apparel Group Inc.(1) 481,250
APPLICATIONS SOFTWARE -- 1.2%
10,000 Intuit Inc.(1) 614,375
BROADCAST SERVER/PROGRAM -- 3.2%
50,000 UnitedGlobalCom Inc. -- A Shares(1) 1,590,625
BUILDING-RESIDENTIAL/COMMERCIAL -- 1.6%
43,600 D.R. Horton, Inc. 806,600
CELLULAR TELECOMMUNICATIONS -- 1.8%
10,000 Powertel, Inc.(1) 872,500
CHEMICALS-PLASTICS -- 0.5%
21,500 Uniroyal Technology Corp.(1) 219,031
CHEMICALS-SPECIALTY -- 0.7%
10,000 Ashland Inc. 327,500
COMMERCIAL SERVICES -- 0.6%
30,000 Boron, LePore & Associates, Inc.(1) 296,250
COMPUTERS-MEMORY DEVICES -- 0.8%
3,800 SanDisk Corp.(1) 204,191
7,500 Silicon Storage Technology, Inc.(1) 170,625
----------
374,816
E-MARKETING/INFORMATION -- 0.6%
25,000 LifeMinders, Inc.(1) 290,625
ELECTRONIC COMPONENTS-MISCELLANEOUS -- 0.8%
20,000 KINSEKI, Ltd.(1) 192,325
7,500 Vishay Intertechnology, Inc.(1) 225,000
----------
417,325
ELECTRONIC COMPONENTS-SEMICONDUCTOR -- 9.4%
20,000 Bookham Technology PLC --
Sponsored ADR(1) 673,750
90,000 Entegris Inc.(1) 804,375
20,000 International Rectifier Corp.(1) 892,500
49,000 Silicon Laboratories Inc.(1) 1,375,062
45,000 Virata Corp. (1) 871,875
----------
4,617,562
ELECTRONIC MEASURING INSTRUMENTS -- 2.2%
66,500 Signal Technology Corp.(1) 1,072,312
HEART MONITORS -- 1.9%
179,000 CardioDynamics International Corp.(1) 939,750
INTERNET APPLICATIONS SOFTWARE -- 5.3%
20,000 BroadVision, Inc.(1) $ 595,000
40,000 RealNetworks, Inc.(1) 824,375
40,000 Vignette Corp.(1) 1,192,500
----------
2,611,875
INTERNET SECURITY -- 0.4%
4,250 WatchGuard Technologies, Inc.(1) 212,500
MEDICAL-BIOMEDICAL/GENETIC -- 9.9%
6,800 CuraGen Corp.(1) 439,450
7,200 IDEC Pharmaceuticals Corp.(1) 1,412,100
30,000 PE Corp. -- Celera Genomics Group(1) 2,025,000
5,600 Protein Design Labs, Inc.(1) 756,437
10,800 Vical Inc.(1) 229,500
----------
4,862,487
MEDICAL-DRUGS -- 0.5%
26,500 InKine Pharmaceutical Co., Inc.(1) 238,500
MEDICAL-HOSPITALS -- 2.3%
57,000 Health Management Associates, Inc. -- A Shares(1) 1,129,313
NETWORK SOFTWARE -- 1.3%
25,000 Packeteer, Inc.(1) 621,875
NETWORKING PRODUCTS -- 0.8%
17,500 Ixia(1) 410,156
OIL & GAS DRILLING -- 0.1%
2,300 Precision Drilling Corp.(1) 65,837
OIL COMPANIES-EXPLORATION & PRODUCTION -- 3.2%
9,000 Devon Energy Corp. 453,600
10,000 Forest Oil Corp.(1) 138,125
10,000 Stone Energy Corp.(1) 512,000
15,000 Swift Energy Co.(1) 487,500
----------
1,591,225
OIL FIELD MACHINERY & EQUIPMENT -- 0.4%
6,000 Dril-Quip, Inc.(1) 198,000
PIPELINES -- 2.0%
15,300 El Paso Energy Corp. 959,119
PRINTERS & RELATED PRODUCTS -- 3.3%
40,000 Lexmark International, Inc.(1) 1,640,000
RETAIL-HOME FURNISHINGS -- 1.6%
60,000 Pier 1 Imports, Inc. 795,000
SAVINGS & LOAN/THRIFTS-EASTERN US -- 0.4%
10,000 American Financial Holdings, Inc. 178,750
SCHOOLS -- 0.6%
20,000 Sylvan Learning Systems, Inc.(1) 308,750
</TABLE>
ING Domestic Mutual Funds Annual Report / October 31, 2000 15
<PAGE> 18
October 31, 2000
SCHEDULE OF INVESTMENTS
ING SMALL CAP GROWTH FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal
Amount Value
--------- -----
<S> <C>
SEISMIC DATA COLLECTION -- 1.0%
60,000 Input/Output, Inc.(1) $ 506,250
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- 2.1%
27,600 TriQuint Semiconductor, Inc.(1) 1,057,425
SEMICONDUCTOR EQUIPMENT -- 4.5%
11,800 Asyst Technologies, Inc.(1) 177,000
14,100 Lam Research Corp.(1) 273,188
80,000 LTX Corp.(1) 1,120,000
16,200 Novellus Systems, Inc.(1) 663,188
-----------
2,233,376
SOFTWARE TOOLS -- 2.9%
13,000 Mercury Interactive Corp.(1) 1,443,000
10,000 Unify Corp.(1) 5,000
-----------
1,448,000
TELECOMMUNICATION EQUIPMENT -- 0.8%
8,600 ADC Telecommunications, Inc.(1) 183,825
6,000 Westell Technologies, Inc. -- A Shares(1) 33,000
10,500 WJ Communications, Inc.(1) 157,500
-----------
374,325
TELECOMMUNICATION EQUIPMENT/FIBER OPTICS -- 2.6%
45,000 Finisar Corp.(1) 1,296,563
TELECOMMUNICATION SERVICES -- 4.2%
15,000 Aspect Communications Corp.(1) 247,266
25,500 McLeodUSA Inc. -- A Shares(1) 490,875
47,800 Microcell Telecommunications Inc.(1) 1,331,678
-----------
2,069,819
THERAPEUTICS -- 5.0%
67,500 AVAX Technologies, Inc.(1) 402,891
20,000 The Immune Response Corp.(1) 121,250
31,400 Medarex, Inc.(1) 1,919,325
-----------
2,443,466
WIRELESS EQUIPMENT -- 1.8%
40,000 Netro Corp.(1) 872,500
TOTAL COMMON STOCK
(Cost -- $36,765,042) $41,903,982
REPURCHASE AGREEMENT -- 14.9%
$7,328,000 State Street Bank & Trust Co., 6.540% due
11/1/2000; Proceeds at maturity -- $7,329,331;
(Fully collateralized by Fannie Mae, 6.000%
due 11/15/2001; Market value -- $7,479,056)
(Cost -- $7,328,000) $ 7,328,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $44,093,042)(2) $49,231,982
</TABLE>
1. Non-income producing security.
2. Aggregate cost for Federal income tax purposes is $44,463,538.
ADR -- American Depository Receipts.
See Notes to Financial Statements.
16 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 19
ING FOCUS FUND
<TABLE>
<CAPTION>
Shares/
Principal
Amount Value
--------- -----
<S> <C>
COMMON STOCK -- 92.7%
AEROSPACE/DEFENSE -- 3.8%
24,000 The Boeing Co. $ 1,627,500
12,300 Northrop Grumman Corp. 1,033,200
-----------
2,660,700
AEROSPACE/DEFENSE-EQUIPMENT -- 3.3%
32,800 General Dynamics Corp. 2,347,250
APPLICATIONS SOFTWARE -- 3.4%
22,800 Siebel Systems, Inc.(1) 2,392,575
AUTO-CARS/LIGHT TRUCKS -- 2.4%
27,217 General Motors Corp. 1,690,856
BEVERAGES-NON-ALCOHOLIC -- 3.4%
49,000 PepsiCo, Inc. 2,373,438
BROADCASTING SERVICE/PROGRAM -- 2.3%
89,250 AT&T -- Liberty Media Group -- A Shares(1) 1,606,500
CABLE TV -- 2.4%
82,700 USA Networks, Inc.(1) 1,674,675
CELLULAR TELECOMMUNICATIONS -- 1.1%
18,950 Vodafone Group PLC --
Sponsored ADR 806,559
COMPUTERS-MEMORY DEVICES -- 1.9%
15,000 EMC Corp.(1) 1,335,937
DATA PROCESSING/MANAGEMENT -- 2.7%
38,700 First Data Corp. 1,939,837
DIVERSIFIED FINANCIAL SERVICES -- 1.6%
13,800 Morgan Stanley Dean Witter & Co. 1,108,313
DIVERSIFIED MANUFACTURING OPERATIONS -- 2.6%
34,812 Honeywell International Inc. 1,873,321
FOOD-RETAIL -- 2.2%
68,900 The Kroger Co.(1) 1,554,556
INSURANCE BROKERS -- 3.3%
56,400 Aon Corp. 2,337,075
MEDICAL-HOSPITALS -- 6.1%
50,100 HCA -- The Healthcare Co. 2,000,869
58,700 Tenet Healthcare Corp.(1) 2,307,644
-----------
4,308,513
MEDICAL PRODUCTS -- 5.5%
30,600 Baxter International Inc. 2,514,937
14,600 Johnson & Johnson 1,345,025
-----------
3,859,962
MONEY CENTER BANKS -- 2.9%
36,100 The Bank of New York Co., Inc. 2,078,006
MULTI-LINE INSURANCE -- 3.8%
27,109 American International Group 2,656,682
MULTIMEDIA -- 4.2%
13,600 Time Warner Inc. 1,032,376
33,689 Viacom Inc. -- B Shares(1) 1,916,062
-----------
2,948,438
OIL-FIELD SERVICES -- 2.0%
18,900 Schlumberger Ltd. 1,438,763
OIL COMPANIES-INTEGRATED -- 2.5%
30,500 Texaco Inc. 1,801,406
PHARMACY SERVICES -- 1.5%
16,100 Express Scripts, Inc. -- A Shares(1) 1,081,719
PIPELINES -- 2.3%
38,800 The Williams Cos., Inc. 1,622,325
PROPERTY/CASUALTY INSURANCE -- 3.6%
30,500 The Chubb Corp. 2,575,344
REITS-OFFICE PROPERTY -- 2.2%
50,900 Equity Office Properties Trust 1,533,362
RETAIL-DISCOUNT -- 4.7%
39,400 Costco Wholesale Corp.(1) 1,443,025
69,300 The TJX Cos., Inc. 1,888,425
-----------
3,331,450
SATELLITE TELECOMMUNICATIONS -- 1.7%
37,700 General Motors Corp. -- H Shares(1) 1,221,480
TELECOMMUNICATION EQUIPMENT -- 2.3%
76,200 ADC Telecommunications Inc.(1) 1,628,775
TELECOMMUNICATION SERVICES -- 4.8%
32,275 NTL Inc.(1) 1,418,083
34,100 Verizon Communications 1,971,406
-----------
3,389,489
TELEPHONE-INTEGRATED -- 3.8%
29,300 SBC Communications Inc. 1,690,244
38,700 Sprint Corp. (FON Group) 986,850
-----------
2,677,094
WIRELESS EQUIPMENT -- 2.4%
66,915 Motorola Inc. 1,668,693
TOTAL COMMON STOCK
(Cost -- $53,084,451) $65,523,093
REPURCHASE AGREEMENT -- 7.3%
$5,135,000 State Street Bank & Trust Co., 6.540%
due 11/1/2000; Proceeds at maturity -- $5,135,933;
(Fully collateralized by Fannie Mae, 6.000% due
11/15/2001; Market value -- $5,241,470)
(Cost -- $5,135,000) $ 5,135,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $58,219,451)(2) $70,658,093
</TABLE>
1. Non-income producing security.
2. Aggregate cost for Federal income tax purposes is $58,267,571.
ADR -- American Depository Receipts.
See Notes to Financial Statements.
ING Domestic Mutual Funds Annual Report / October 31, 2000 17
<PAGE> 20
October 31, 2000
SCHEDULE OF INVESTMENTS
ING MID CAP GROWTH FUND
<TABLE>
<CAPTION>
Shares/
Principal
Amount Value
--------- -----
<S> <C>
COMMON STOCK -- 97.8%
APPLICATIONS SOFTWARE -- 1.8%
16,000 National Instruments Corp.(1) $ 747,000
AUDIO/VIDEO PRODUCTS -- 2.0%
13,000 Polycom, Inc.(1) 845,000
BUSINESS-TO-BUSINESS/E-COMMERCE -- 0.5%
1,800 Ariba, Inc.(1) 227,475
CIRCUIT BOARDS -- 1.4%
10,800 Jabil Circuit, Inc.(1) 616,275
COMMERCIAL BANKS - CENTRAL US -- 1.2%
13,000 TCF Financial Corp. 525,688
COMMERCIAL BANKS - EASTERN US -- 0.6%
12,500 North Fork Bancorp., Inc. 252,344
COMMERCIAL BANKS - SOUTHERN US -- 0.5%
10,000 National Commerce Bancorp 212,500
COMMERCIAL BANKS - WESTERN US -- 1.1%
13,400 City National Corp. 460,625
COMMERCIAL SERVICES -- 2.9%
11,000 Convergys Corp.(1) 479,187
12,000 Plexus Corp.(1) 756,750
----------
1,235,937
COMMERCIAL SERVICES - FINANCE -- 3.8%
19,250 Concord EFS, Inc.(1) 795,266
14,250 Paychex, Inc. 807,797
----------
1,603,063
COMPUTERS - INTEGRATED SYSTEMS -- 1.5%
1,000 Brocade Communications Systems, Inc.(1) 227,375
4,000 Redback Networks Inc.(1) 425,750
----------
653,125
COMPUTERS - MEMORY DEVICES -- 0.8%
6,300 SanDisk Corp.(1) 338,527
DATA PROCESSING/MANAGEMENT -- 1.9%
9,800 Acxiom Corp.(1) 394,450
7,500 Fiserv, Inc.(1) 393,281
----------
787,731
DIAGNOSTIC EQUIPMENT -- 1.1%
8,000 Cytyc Corp.(1) 475,000
DISTRIBUTION/WHOLESALE -- 1.2%
12,000 Tech Data Corp.(1) 499,500
ELECTRONIC COMPONENTS - MISCELLANEOUS -- 3.4%
12,000 Gentex Corp.(1) 297,000
8,000 Sanmina Corp.(1) 914,500
7,500 Vishay Intertechnology, Inc.(1) 225,000
----------
1,436,500
ELECTRONIC COMPONENTS - SEMICONDUCTOR -- 3.0%
5,400 Applied Micro Circuits Corp.(1) $ 412,425
10,125 Microchip Technology Inc.(1) 320,203
9,700 TranSwitch Corp.(1) 560,175
----------
1,292,803
ELECTRONIC PARTS DISTRIBUTION -- 1.1%
14,000 Arrow Electronics, Inc.(1) 448,000
E-SERVICES/CONSULTING -- 0.4%
12,400 Proxicom, Inc.(1) 167,400
FINANCIAL GUARANTEE INSURANCE -- 0.7%
3,500 Ambac Financial Group, Inc. 279,344
FOOD-MISCELLANEOUS/DIVERSIFIED -- 1.2%
13,000 Hain Celestial Group, Inc.(1) 515,937
HUMAN RESOURCES -- 3.0%
12,000 Korn/Ferry International(1) 420,000
8,100 Manpower Inc. 281,981
18,100 Robert Half International Inc.(1) 552,050
----------
1,254,031
IDENTIFICATION SYSTEM/DEVICE -- 1.6%
15,000 Symbol Technologies, Inc. 681,563
INDEPENDENT POWER PRODUCER -- 1.7%
8,600 Calpine Corp.(1) 678,862
1,000 Southern Energy, Inc.(1) 27,250
----------
706,112
INSTRUMENTS - SCIENTIFIC -- 3.2%
3,500 PE Corp. -- PE Biosystems Group 409,500
12,800 Waters Corp.(1) 928,800
----------
1,338,300
INTERNET APPLICATIONS SOFTWARE -- 0.8%
5,300 Art Technology Group, Inc.(1) 332,575
INTERNET INFRASTRUCTURE SOFTWARE -- 0.7%
5,000 TIBCO Software Inc.(1) 315,000
INTERNET SECURITY -- 1.0%
5,000 RSA Security Inc.(1) 290,000
900 VeriSign, Inc.(1) 118,800
----------
408,800
MEDICAL - BIOMEDICAL/GENETIC -- 2.8%
5,000 Affymetrix, Inc.(1) 276,875
11,500 Digene Corp.(1) 373,211
7,000 Invitrogen Corp.(1) 532,437
----------
1,182,523
MEDICAL - DRUGS -- 6.4%
9,600 Celgene Corp.(1) 618,000
20,850 IVAX Corp.(1) 906,975
26,437 King Pharmaceuticals, Inc.(1) 1,184,708
----------
2,709,683
MEDICAL - HOSPITALS -- 2.3%
25,000 Health Management Associates, Inc. --
A Shares(1) 495,313
12,000 Tenet Healthcare Corp. 471,750
----------
967,063
</TABLE>
18 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 21
ING MID CAP GROWTH FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal
Amount Value
--------- -----
<S> <C>
MEDICAL INSTRUMENTS -- 1.3%
4,900 Techne Corp.(1) $ 552,475
MEDICAL LABS & TESTING SERVICES -- 0.7%
2,100 Laboratory Corp. of America Holdings(1) 283,237
MEDICAL PRODUCTS -- 2.1%
12,000 MiniMed Inc.(1) 875,250
OIL - FIELD SERVICES -- 0.9%
7,500 BJ Services Co.(1) 393,281
OIL & GAS DRILLING -- 1.4%
4,600 Nabors Industries, Inc.(1) 234,140
8,900 Noble Drilling Corp.(1) 369,906
-----------
604,046
OIL COMPANIES - EXPLORATION & PRODUCTION -- 2.5%
9,100 Anadarko Petroleum Corp. 582,855
12,500 EOG Resources, Inc. 492,187
-----------
1,075,042
OIL FIELD MACHINE & EQUIPMENT -- 3.4%
6,900 Cooper Cameron Corp.(1) 376,050
8,600 Lone Star Technologies, Inc.(1) 345,290
12,500 National-Oilwell, Inc.(1) 365,625
10,000 Weatherford International, Inc.(1) 365,000
-----------
1,451,965
PIPELINES -- 1.1%
9,700 Dynegy Inc. -- A Shares 449,231
RADIO -- 0.4%
20,000 Radio One, Inc. -- D Shares(1) 160,313
RETAIL - APPAREL/SHOE -- 0.7%
15,000 Pacific Sunwear of California, Inc.(1) 307,500
RETAIL - DISCOUNT -- 0.7%
9,000 BJ's Wholesale Club, Inc.(1) 296,437
SCHOOLS -- 0.7%
4,000 Corinthian Colleges, Inc.(1) 276,500
SEMICONDUCTOR COMPONENT - INTERGRATION CIRCUITS -- 5.7%
2,500 GlobalSpan, Inc.(1) 192,344
16,000 Linear Technology Corp. 1,033,000
10,800 Micrel, Inc.(1) 488,700
10,000 Vitesse Semiconductor Corp.(1) 699,375
-----------
2,413,419
SEMICONDUCTOR EQUIPMENT -- 1.9%
8,000 DuPont Photomasks, Inc.(1) 449,000
3,500 KLA-Tencor Corp.(1) 118,344
5,300 Novellus Systems, Inc.(1) 216,969
-----------
784,313
TELECOMMUNICATION EQUIPMENT -- 7.6%
25,000 ADC Telecommunications, Inc.(1) 534,375
8,000 CommScope, Inc.(1) 202,500
9,500 Comverse Technology, Inc.(1) 1,061,625
10,500 Plantronics, Inc.(1) 479,063
10,000 Scientific-Atlanta, Inc. 684,375
7,000 Tut Systems, Inc.(1) 232,750
-----------
3,194,688
TELECOMMUNICATION EQUIPMENT/FIBER OPTICS -- 1.7%
3,000 Avanex Corp.(1) $ 304,687
3,000 Corvis Corp.(1) 196,875
2,000 Newport Corp. 228,406
-----------
729,968
TELEPHONE - LOCAL -- 0.6%
2,500 Telephone & Data Systems, Inc. 263,750
THERAPEUTICS -- 0.5%
2,800 Abgenix, Inc.(1) 220,850
TRANSPORTATION - SERVICES -- 2.0%
8,500 C.H. Robinson Worldwide, Inc. 464,844
7,400 Expeditors International of Washington, Inc. 383,875
-----------
848,719
WEB HOUSING/DESIGN -- 1.8%
10,000 Macromedia, Inc.(1) 770,625
WIRELESS EQUIPMENT -- 4.5%
4,000 Palm, Inc.(1) 214,250
16,500 Powerwave Technologies, Inc.(1) 794,063
10,000 SBA Communications Corp.(1) 501,250
20,400 Spectrasite Holdings, Inc.(1) 402,900
-----------
1,912,463
TOTAL COMMON STOCK
(Cost -- $30,526,814) $41,379,496
REPURCHASE AGREEMENT -- 2.2%
$922,000 State Street Bank & Trust Co., 6.540%
due 11/1/2000; Proceeds at maturity -- $922,168;
(Fully collateralized by Federal Home Loan Bank,
6.750% due 2/15/2002; Market value -- $941,188)
(Cost -- $922,000) $ 922,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $31,448,814)(2) $42,301,496
</TABLE>
1. Non-Income producing security.
2. Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
ING Domestic Mutual Funds Annual Report / October 31, 2000 19
<PAGE> 22
October 31, 2000
SCHEDULE OF INVESTMENTS
ING LARGE CAP GROWTH FUND
<TABLE>
<CAPTION>
Shares/
Principal
Amount Value
--------- -----
<S> <C>
COMMON STOCK -- 96.2%
ADVERTISING AGENCIES -- 0.9%
8,500 Omnicom Group Inc. $ 784,125
APPLICATIONS SOFTWARE -- 2.0%
16,800 Siebel Systems, Inc. (1) 1,762,950
BREWERY -- 1.8%
35,000 Anheuser-Busch Cos., Inc. 1,601,250
BUSINESS-TO-BUSINESS/E-COMMERCE -- 1.0%
6,300 Ariba, Inc.(1) 796,163
COMPUTERS -- 4.9%
39,100 Sun Microsystems, Inc.(1) 4,335,212
COMPUTERS - MEMORY DEVICES -- 6.2%
42,000 EMC Corp.(1) 3,740,625
12,100 VERITAS Software Corp.(1) 1,706,289
-----------
5,446,914
DIVERSIFIED FINANCIAL SERVICES -- 2.5%
23,333 Citigroup Inc. 1,227,899
12,600 Morgan Stanley Dean Witter & Co. 1,011,938
-----------
2,239,837
DIVERSIFIED MANUFACTURING OPERATIONS -- 7.4%
119,200 General Electric Co. 6,533,650
E-COMMERCE/SERVICES -- 1.2%
14,600 TMP Worldwide Inc.(1) 1,016,297
ELECTRIC - GENERATION -- 1.5%
23,300 The AES Corp. 1,316,450
ELECTRONIC COMPONENTS - SEMICONDUCTOR -- 9.5%
6,000 Broadcom Corp. -- A Shares(1) 1,334,250
81,000 Intel Corp. 3,645,000
34,900 Texas Instruments Inc. 1,712,281
22,600 Xilinx, Inc.(1) 1,637,087
-----------
8,328,618
ELECTRONIC FORMS -- 1.1%
13,000 Adobe Systems Inc. 988,813
ENTERPRISE SOFTWARE/SERVICES -- 3.8%
11,200 BEA Systems, Inc.(1) 803,600
76,000 Oracle Corp.(1) 2,508,000
-----------
3,311,600
FINANCE - INVESTMENT BANKER/BROKER -- 0.9%
7,600 Goldman Sachs Group, Inc. 758,575
FOOD - RETAIL -- 1.1%
17,400 Safeway Inc.(1) 951,562
INDEPENDENT POWER PRODUCER -- 1.5%
16,400 Calpine Corp.(1) 1,294,575
INSTRUMENTS - SCIENTIFIC -- 1.0%
12,100 Waters Corp.(1) 878,006
INTERNET BROKERS -- 0.9%
22,500 The Charles Schwab Corp. 790,312
MEDICAL - BIOMEDICAL/GENETIC -- 1.8%
12,000 Genentech, Inc.(1) 990,000
8,700 Millennium Pharmaceuticals Inc.(1) 631,294
-----------
1,621,294
MEDICAL - DRUGS -- 7.7%
19,000 Eli Lilly & Co. 1,698,125
4,200 Forest Laboratories, Inc.(1) 556,500
103,525 Pfizer Inc. 4,470,986
-----------
6,725,611
MEDICAL - WHOLESALE DRUG DISTRIBUTION -- 2.9%
27,000 Cardinal Health, Inc. 2,558,250
MEDICAL INSTRUMENTS -- 2.6%
42,000 Medtronic, Inc. $ 2,281,125
MEDICAL PRODUCTS -- 1.3%
11,900 Johnson & Johnson 1,096,288
MULTI-LINE INSURANCE -- 2.4%
21,675 American International Group, Inc. 2,124,150
NETWORK SOFTWARE -- 1.1%
5,800 Micromuse Inc.(1) 984,188
NETWORKING PRODUCTS -- 7.3%
97,000 Cisco Systems, Inc.(1) 5,225,875
5,800 Juniper Networks, Inc.(1) 1,131,000
-----------
6,356,875
OIL COMPANIES - EXPLORATION & PRODUCTION -- 0.4%
6,700 Apache Corp. 370,594
SEMICONDUCTOR COMPONENTS - INTEGRATED CIRCUITS -- 1.6%
21,900 Linear Technology Corp. 1,413,919
SEMICONDUCTOR EQUIPMENT -- 1.1%
23,800 Novellus Systems, Inc.(1) 974,312
SOFTWARE TOOLS -- 1.3%
10,200 Mercury Interactive Corp.(1) 1,132,200
SUPER-REGIONAL BANKS - US -- 1.4%
14,700 Northern Trust Corp. 1,255,012
TELECOMMUNICATION EQUIPMENT -- 2.4%
10,100 Comverse Technology, Inc.(1) 1,128,675
21,700 Nortel Networks Corp. 987,350
-----------
2,116,025
TELECOMMUNICATION EQUIPMENT/FIBER OPTICS -- 4.1%
23,100 Corning Inc. 1,767,150
22,200 JDS Uniphase Corp.(1) 1,806,525
-----------
3,573,675
TELECOMMUNICATION SERVICES -- 0.9%
7,350 Allegiance Telecom, Inc.(1) 231,066
20,500 McLeodUSA Inc. -- A Shares(1) 394,625
9,200 Metromedia Fiber Network, Inc. -- A Shares(1) 174,800
-----------
800,491
TELEPHONE - INTEGRATED -- 2.0%
49,300 WorldCom, Inc.(1) 1,170,875
17,800 XO Communications, Inc. -- A Shares(1) 600,472
-----------
1,771,347
TELEVISION -- 0.8%
17,400 Univision Communications Inc. -- A Shares(1) 665,550
WEB PORTALS/INTERNET SERVICE PROVIDERS -- 3.9%
54,800 America Online, Inc.(1) 2,763,564
11,100 Yahoo! Inc.(1) 650,737
-----------
3,414,301
TOTAL COMMON STOCK
(Cost -- $76,912,380) $84,370,116
REPURCHASE AGREEMENT -- 3.8%
$3,312,000 State Street Bank & Trust Co., 6.540% due
11/1/2000; Proceeds at maturity -- $3,312,602;
(Fully collateralized by Fannie Mae, 6.000%
due 11/15/2001; Market value -- $3,381,923)
(Cost -- $3,312,000) $ 3,312,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $80,224,380)(2) $87,682,116
</TABLE>
1. Non-income producing security.
2. Aggregate cost for Federal income tax purposes is $80,259,354.
See Notes to Financial Statements.
20 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 23
ING TAX EFFICIENT EQUITY FUND
<TABLE>
<CAPTION>
Shares/
Principal
Amount Value
--------- -----
<S> <C>
COMMON STOCK -- 97.8%
AEROSPACE/DEFENSE-EQUIPMENT -- 2.1%
19,800 The B.F. Goodrich Co. $ 810,562
3,600 General Dynamics Corp. 257,625
3,794 United Technologies Corp. 264,869
----------
1,333,056
AIRLINES -- 0.4%
7,300 AMR Corp.(1) 239,075
APPLICATIONS SOFTWARE -- 1.6%
14,800 Microsoft Corp.(1) 1,019,350
AUTO - CARS/LIGHT TRUCKS -- 1.9%
26,222 Ford Motor Co. 685,050
7,672 General Motors Corp. 476,623
----------
1,161,673
BEVERAGES - NON-ALCOHOLIC -- 0.5%
4,900 The Coca-Cola Co. 295,837
BUILDING PRODUCTS - AIR & HEATING -- 0.8%
10,300 American Standard Cos. Inc.(1) 472,512
CHEMICALS - SPECIALTY -- 0.2%
6,400 Arch Chemicals, Inc. 124,400
COMPUTERS -- 5.7%
16,600 Compaq Computer Corp. 504,806
12,200 Hewlett-Packard Co. 566,537
11,200 International Business Machines Corp. 1,103,200
12,000 Sun Microsystems, Inc.(1) 1,330,500
----------
3,505,043
COMPUTERS - MEMORY DEVICES -- 1.6%
7,000 Veritas Software Corp.(1) 987,109
CONTAINERS - METAL/GLASS -- 0.3%
30,100 Owens-Illinois, Inc.(1) 178,719
CONTAINERS - PAPER/PLASTIC -- 0.8%
35,600 Packaging Corp. of America(1) 522,875
COSMETICS & TOILETRIES -- 3.4%
10,800 Colgate-Palmolive Co. 634,608
13,600 Kimberly-Clark Corp. 897,600
7,700 The Procter & Gamble Co. 550,069
----------
2,082,277
CRUISE LINES -- 0.3%
8,000 Royal Caribbean Cruises Ltd. 180,000
DATA PROCESSING/MANAGEMENT -- 1.2%
14,500 First Data Corp. 726,812
DIVERSIFIED FINANCIAL SERVICES -- 1.7%
20,333 Citigroup Inc. 1,070,024
DIVERSIFIED MANUFACTURING OPERATIONS -- 5.7%
10,700 Eaton Corp. 728,269
39,600 General Electric Co. 2,170,575
11,000 Tyco International Ltd. 623,563
----------
3,522,407
ELECTRONIC COMPONENTS - MISCELLANEOUS -- 2.3%
18,400 Flextronics International Ltd.(1) 699,200
16,800 Solectron Corp.(1) 739,200
----------
1,438,400
ELECTRONIC COMPONENTS - SEMICONDUCTOR -- 3.5%
31,600 Intel Corp. 1,422,000
15,000 Texas Instruments Inc. 735,938
----------
2,157,938
ELECTRONIC MEASURING INSTRUMENTS -- 0.5%
6,926 Agilent Technologies, Inc.(1) $ 320,760
ELECTRONIC PARTS DISTRIBUTION -- 2.7%
32,600 Arrow Electronics, Inc. 1,043,200
23,600 Avnet, Inc. 634,250
----------
1,677,450
ENTERPRISE SOFTWARE/SERVICES -- 1.3%
9,000 Computer Associates International, Inc. 286,875
16,200 Oracle Corp.(1) 534,600
----------
821,475
FINANCE - CONSUMER LOANS -- 1.8%
22,400 Household International, Inc. 1,127,000
FINANCE - INVESTMENT BANKER/BROKER -- 0.7%
6,600 Merrill Lynch & Co., Inc. 462,000
FINANCE - MORTGAGE LOAN/BANKER -- 2.5%
12,100 Countrywide Credit Industries, Inc. 452,994
13,900 Fannie Mae 1,070,300
----------
1,523,294
INSTRUMENT CONTROLS -- 0.9%
13,300 Parker-Hannifin Corp. 550,288
MACHINERY - GENERAL INDUSTRY -- 0.8%
13,300 Ingersoll-Rand Co. 502,075
MACHINERY-TOOLS & RELATED PRODUCTS -- 1.6%
16,400 The Black & Decker Corp. 617,050
12,400 Kennametal Inc. 364,250
----------
981,300
MEDICAL - DRUGS -- 5.6%
12,000 Abbott Laboratories 633,750
6,900 Eli Lilly & Co. 616,687
14,000 Merck & Co., Inc. 1,259,125
14,700 Pfizer Inc. 634,856
6,700 Schering-Plough Corp. 346,306
----------
3,490,724
MEDICAL PRODUCTS -- 3.5%
13,700 Baxter International Inc. 1,125,969
11,100 Johnson & Johnson 1,022,587
----------
2,148,556
METAL - ALUMINUM -- 1.3%
29,000 Alcoa Inc. 831,937
MONEY CENTER BANKS -- 2.6%
20,300 Bank of America Corp. 975,669
13,500 The Chase Manhattan Corp. 614,250
----------
1,589,919
MULTIMEDIA -- 1.7%
6,100 Time Warner Inc. 463,051
10,090 Viacom Inc. -- B Shares(1) 573,869
----------
1,036,920
NETWORKING PRODUCTS -- 2.2%
20,000 Cisco Systems, Inc.(1) 1,077,500
12,530 Lucent Technologies Inc. 292,106
----------
1,369,606
</TABLE>
ING Domestic Mutual Funds Annual Report / October 31, 2000 21
<PAGE> 24
October 31, 2000
SCHEDULE OF INVESTMENTS
ING TAX EFFICIENT EUQITY FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal
Amount Value
--------- -----
<S> <C>
OIL - FIELD SERVICES -- 1.3%
9,000 Halliburton Co. $ 333,563
5,900 Schlumberger Ltd. 449,138
-----------
782,701
OIL & GAS DRILLING -- 0.4%
6,400 Santa Fe International Corp. 233,600
OIL COMPANIES - INTEGRATED -- 7.9%
7,800 Chevron Corp. 640,575
51,710 Conoco Inc. -- B Shares 1,405,866
13,125 Exxon Mobil Corp. 1,170,586
13,900 Texaco Inc. 820,969
24,900 Unocal Corp. 849,713
-----------
4,887,709
PAPER & RELATED PRODUCTS -- 1.7%
9,800 Bowater Inc. 530,425
13,552 International Paper Co. 496,342
-----------
1,026,767
POWER CONVERSION/SUPPLY EQUIPMENT -- 0.3%
14,000 American Power Conversion Corp.(1) 181,125
RETAIL - BUILDING PRODUCTS -- 1.4%
13,200 The Home Depot, Inc. 567,600
7,200 Lowe's Cos. Inc. 328,950
-----------
896,550
RETAIL - CONSUMER ELECTRONICS -- 0.9%
8,900 RadioShack Corp. 530,662
RETAIL - DISCOUNT -- 1.5%
8,800 Costco Wholesale Corp.(1) 322,300
14,000 Wal-Mart Stores, Inc. 635,250
-----------
957,550
RETAIL - MAJOR DEPARTMENT STORE -- 0.3%
18,500 Saks Inc.(1) 188,469
RETAIL - RESTAURANTS -- 1.0%
19,000 McDonald's Corp. 589,000
SEMICONDUCTOR COMPONENT -- INTEGRATED CIRCUITS -- 1.6%
15,000 Analog Devices, Inc.(1) 975,000
SEMICONDUCTOR EQUIPMENT -- 2.2%
13,800 Applied Materials, Inc.(1) 733,125
20,600 Teradyne, Inc.(1) 643,750
-----------
1,376,875
SUPER-REGIONAL BANKS - US -- 3.9%
9,500 First Union Corp. 287,969
21,900 FleetBoston Financial Corp. 832,200
29,000 KeyCorp 715,937
24,700 U.S. Bancorp 597,431
-----------
2,433,537
TELECOMMUNICATION EQUIPMENT -- 1.2%
10,800 Nortel Networks Corp. 491,400
17,200 Telefonaktiebolaget LM Ericsson AB --
Sponsored ADR 238,650
-----------
730,050
TELECOMMUNICATION EQUIPMENT/FIBER OPTICS -- 0.3%
1,900 JDS Uniphase Corp.(1) $ 154,613
TELECOMMUNICATION SERVICES -- 1.7%
1,044 Avaya Inc.(1) 14,029
17,994 Verizon Communications 1,040,278
-----------
1,054,307
TELEPHONE - INTEGRATED -- 2.9%
11,800 AT&T Corp. 273,612
17,100 SBC Communications Inc. 986,456
21,500 WorldCom, Inc.(1) 510,625
-----------
1,770,693
TOBACCO -- 0.4%
7,400 Philip Morris Cos. Inc. 271,025
TRANSPORTATION - SERVICES -- 1.1%
11,000 United Parcel Service, Inc. -- B Shares 668,250
TRANSPORTATION - TRUCK -- 1.1%
25,100 CNF Transportation Inc. 669,856
WEB HOSTING/DESIGN -- 0.1%
5,100 PSINet Inc.(1) 33,947
WIRELESS EQUIPMENT -- 0.9%
13,900 Motorola, Inc. 346,631
7,500 Nextel Partners, Inc. -- A Shares(1) 183,750
-----------
530,381
TOTAL COMMON STOCK
(Cost -- $51,819,682) $60,393,478
REPURCHASE AGREEMENT -- 2.2%
$1,386,000 State Street Bank & Trust Co., 6.540% due
11/1/2000; Proceeds at maturity -- $1,386,252;
(Fully collateralized by Fannie Mae, 7.250%
due 2/15/2007; Market value -- $1,415,813)
(Cost -- $1,386,000) $ 1,386,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $53,205,682)(2) $61,779,478
</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.
22 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 25
ING GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Shares/
Principal
Amount Value
--------- -----
<S> <C>
COMMON STOCK -- 99.0%
AEROSPACE/DEFENSE -- 0.5%
3,000 The Boeing Co. $ 203,437
AEROSPACE/DEFENSE-EQUIPMENT -- 0.8%
5,100 United Technologies Corp. 356,044
APPLICATIONS SOFTWARE -- 3.2%
20,820 Microsoft Corp.(1) 1,433,977
AUTO-CARS/LIGHT TRUCKS -- 0.6%
3,900 General Motors Corp. 242,288
BEVERAGES-NON-ALCOHOLIC -- 2.2%
10,200 The Coca Cola Co. 615,825
7,100 PepsiCo, Inc. 343,906
----------
959,731
BREWERY -- 1.1%
10,200 Anheuser-Busch Cos., Inc. 466,650
CELLULAR TELECOMMUNICATIONS -- 0.6%
6,400 Nextel Communications, Inc. -- A Shares(1) 246,000
CHEMICALS-DIVERSIFIED -- 2.0%
13,200 The Dow Chemical Co. 404,250
11,000 E.I. du Pont de Nemours and Co. 499,125
----------
903,375
COMPUTERS -- 5.9%
11,300 Compaq Computer Corp. 343,633
11,450 Dell Computer Corp.(1) 337,775
6,900 Hewlett-Packard Co. 320,419
8,275 International Business Machines Corp. 815,087
7,275 Sun Microsystems, Inc.(1) 806,616
----------
2,623,530
COMPUTERS-MEMORY DEVICES -- 2.9%
9,925 EMC Corp.(1) 883,945
2,725 VERITAS Software Corp.(1) 384,268
----------
1,268,213
COSMETICS & TOILETRIES -- 1.3%
8,150 The Procter & Gamble Co. 582,216
DIVERSIFIED FINANCIAL SERVICES -- 4.1%
4,120 AXA Financial, Inc. 222,737
21,600 Citigroup Inc. 1,136,700
5,400 Morgan Stanley Dean Witter & Co. 433,688
----------
1,793,125
DIVERSIFIED MANUFACTURING OPERATIONS -- 6.1%
38,000 General Electric Co. 2,082,875
10,900 Tyco International Ltd. 617,894
----------
2,700,769
ELECTRIC-GENERATION -- 1.0%
7,950 The AES Corp.(1) 449,175
ELECTRIC-INTEGRATED -- 1.1%
8,170 Exelon Corp. 491,221
ELECTRONIC COMPONENTS-MISCELLANEOUS -- 1.1%
10,950 Solectron Corp.(1) 481,800
ELECTRONIC COMPONENTS-SEMICONDUCTOR -- 3.7%
25,820 Intel Corp. $1,161,900
9,600 Texas Instruments, Inc. 471,000
----------
1,632,900
ENTERPRISE SOFTWARE/SERVICES -- 1.9%
26,000 Oracle Corp.(1) 858,000
FINANCE-CREDIT CARD -- 1.1%
13,300 MBNA Corp. 499,581
FINANCE-INVESTMENT BANKER/BROKER -- 0.5%
3,300 Lehman Brothers Holdings Inc. 212,850
FINANCE-MORTGAGE LOAN/BANKER -- 1.8%
10,500 Fannie Mae 808,500
FOOD-MISCELLANEOUS/DIVERSIFIED -- 0.8%
15,000 Ralston-Ralston Purina Group 363,750
LIFE/HEALTH INSURANCE -- 0.8%
11,000 John Hancock Financial Services, Inc.(1) 347,875
MEDICAL-DRUGS -- 8.2%
4,100 Eli Lilly and Co. 366,437
4,600 MedImmune, Inc.(1) 300,725
13,050 Merck & Co., Inc. 1,173,684
27,475 Pfizer Inc. 1,186,577
11,000 Pharmacia Corp. 605,000
----------
3,632,423
MEDICAL-HOSPITALS -- 1.4%
15,500 Tenet Healthcare Corp.(1) 609,344
MEDICAL PRODUCTS -- 2.5%
6,400 Baxter International Inc. 526,000
6,500 Johnson & Johnson 598,812
----------
1,124,812
MONEY CENTER BANKS -- 1.1%
10,500 The Chase Manhattan Corp. 477,750
MULTI-LINE INSURANCE -- 2.5%
8,250 American International Group, Inc. 808,500
3,900 The Hartford Financial Services Group, Inc. 290,306
----------
` 1,098,806
MULTIMEDIA -- 4.1%
6,000 Gannett Co., Inc. 348,000
4,100 The McGraw-Hill Cos., Inc. 263,169
10,000 Time Warner Inc. 759,100
8,100 Viacom Inc. -- B Shares(1) 460,688
----------
1,830,957
NETWORKING PRODUCTS -- 3.9%
26,700 Cisco Systems, Inc.(1) 1,438,462
11,650 Lucent Technologies Inc. 271,591
----------
1,710,053
</TABLE>
ING Domestic Mutual Funds Annual Report / October 31, 2000 23
<PAGE> 26
October 31, 2000
SCHEDULE OF INVESTMENTS
ING GROWTH & INCOME FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal
Amount Value
--------- -----
<S> <C>
OIL-FIELD SERVICES -- 0.7%
8,600 Halliburton Co. $ 318,737
OIL COMPANIES-EXPLORATION & PRODUCTION -- 0.7%
8,400 Burlington Resources Inc. 302,400
OIL COMPANIES-INTEGRATED -- 4.1%
6,800 Chevron Corp. 558,450
13,900 Exxon Mobil Corp. 1,239,706
-----------
1,798,156
PIPELINES -- 1.2%
6,380 Enron Corp. 523,559
RETAIL-APPAREL/SHOE -- 0.5%
8,500 The Gap, Inc. 219,406
RETAIL-BUILDING PRODUCTS -- 1.2%
11,500 Lowe's Cos., Inc. 525,406
RETAIL-DISCOUNT -- 2.8%
7,800 Costco Wholesale Corp.(1) 285,675
20,800 Wal-Mart Stores, Inc. 943,800
-----------
1,229,475
RETAIL-DRUG STORE -- 1.7%
14,000 CVS Corp. 741,125
RETAIL-RESTAURANTS -- 0.8%
11,400 McDonald's Corp. 353,400
SEMICONDUCTOR-EQUIPMENT -- 0.6%
4,700 Applied Materials, Inc.(1) 249,687
SUPER-REGIONAL BANKS-US -- 4.0%
12,300 Mellon Financial Corp. 593,475
25,500 Wells Fargo & Co. 1,180,969
-----------
1,774,444
TELECOMMUNICATION EQUIPMENT -- 1.0%
9,550 Nortel Networks Corp. 434,525
TELECOMMUNICATION EQUIPMENT/FIBER OPTICS -- 2.4%
2,600 CIENA Corp.(1) 273,325
5,700 Corning Inc. 436,050
4,450 JDS Uniphase Corp.(1) 362,119
-----------
1,071,494
TELECOMMUNICATION SERVICES -- 5.1%
5,500 Level 3 Communications, Inc.(1) 262,281
9,700 Qwest Communications International Inc.(1) 471,663
26,500 Verizon Communications 1,532,031
-----------
2,265,975
TELEPHONE-INTEGRATED -- 0.7%
13,200 AT&T Corp. $ 306,075
TOBACCO -- 0.4%
5,500 Philip Morris Cos., Inc. 201,438
WEB PORTALS/INTERNET SERVICE PROVIDERS -- 1.6%
10,600 America Online, Inc.(1) 534,558
3,150 Yahoo! Inc.(1) 184,669
-----------
719,227
WIRELESS EQUIPMENT -- 0.7%
11,750 Motorola, Inc. 293,016
TOTAL COMMON STOCK
(Cost -- $38,455,524) $43,736,697
REPURCHASE AGREEMENT -- 1.0%
$464,000 State Street Bank & Trust Co., 6.540%
due 11/1/2000; Proceeds at maturity -- $464,084;
(Fully collateralized by Fannie Mae, 6.375% due
1/16/2002; Market value -- $477,491)
(Cost -- $464,000) $ 464,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $38,919,524)(2) $44,200,697
</TABLE>
1. Non-income producing security.
2. Aggregate cost for Federal income tax purposes is $38,985,988.
See Notes to Financial Statements.
24 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 27
ING HIGH YIELD BOND FUND
<TABLE>
<CAPTION>
Shares/
Principal
Amount Ratings(1) Value
--------- ------- -----
<S> <C> <C>
CORPORATE BONDS -- 93.1%
AIRLINES -- 0.6%
$250,000 Amtran, Inc., Senior Notes, 9.625%
due 12/15/2005 B+/B2 $ 226,875
BEVERAGES - WINE/SPIRITS -- 1.3%
500,000 Canandaigua Brands, Inc., Senior Notes,
8.625% due 8/1/2006 BB/Ba2 502,500
BROADCASTING SERVICE/PROGRAM -- 2.6%
1,000,000 Echostar DBS Corp.,
Senior Notes, 9.250% due 2/1/2006 B+/B1 992,500
CABLE TV -- 19.2%
500,000 Adelphia Communications Corp.,
Series B, Senior Notes, 9.250%
due 10/1/2002 B+/B2 492,500
500,000 Century Communications Corp.,
Senior Notes, 9.750% due 2/15/2002 B+/B2 496,250
3,000,000 Century Communications Corp.,
Senior Discount Notes, Zero Coupon
due 3/15/2003 B+/B2 2,272,500
2,231,944 CSC Holdings, Inc., Series M,
Payment-in-Kind Preferred Bonds,
11.125% due 4/1/2008 B+/B1 2,388,180
1,500,000 Rogers Cablesystems Inc., Series B,
Senior Notes, 10.000%
due 3/15/2005 BB+/Baa3 1,590,000
----------
7,239,430
CASINO HOTELS -- 5.3%
1,000,000 Harrah's Operating Co. Inc., Senior
Subordinated Notes, 7.875%
due 12/15/2005 BB+/Ba2 972,500
500,000 MGM Mirage Inc., Senior
Subordinated Notes, 9.750%
due 6/1/2007 BB+/Ba2 521,250
500,000 Park Place Entertainment Corp.,
Senior Subordinated Notes, 9.375%
due 2/15/2007 BB+/Ba2 506,250
----------
2,000,000
CELLULAR TELECOMMUNICATIONS -- 5.8%
1,500,000 Crown Castle International Corp.,
Senior Discount Notes, 10.625%
due 11/15/2007 B/B3 1,147,500
1,000,000 Orange PLC, Senior Notes, 8.750%
due 6/1/2006 A/A1 1,030,000
----------
2,177,500
CHEMICALS - DIVERSIFIED -- 2.6%
1,000,000 Lyondell Chemical Co., Series A,
Senior Secured Notes, 9.625%
due 5/1/2007 BB/Ba3 972,500
CONTAINERS - PAPER/PLASTIC -- 2.7%
1,000,000 Norampac Inc., Senior Notes, 9.500%
due 2/1/2008 BB/B1 1,010,000
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.6%
250,000 Blount Inc., Senior Subordinated
Notes, 13.000% due 8/1/2009 B-/B3 212,500
FOOD - RETAIL -- 2.7%
$1,000,000 The Kroger Co., Senior Notes,
7.625% due 9/15/2006 BBB-/Baa3 $1,001,820
GAMBLING (NON-HOTEL) -- 1.9%
750,000 Horseshoe Gaming Holdings Corp.,
Series B, Senior Subordinated
Notes, 8.625% due 5/15/2009 B+/B2 727,500
HOME FURNISHINGS -- 1.1%
500,000 Sleepmaster LLC, Series B, Senior
Subordinated Notes, 11.000%
due 5/15/2009 B-/B3 430,000
INDEPENDENT POWER PRODUCER -- 2.6%
Calpine Corp., Senior Notes:
500,000 8.250% due 8/15/2005 BB+/Ba1 498,382
500,000 8.625% due 8/15/2010 BB+/Ba1 494,596
----------
992,978
MACHINERY TOOLS & RELATED PRODUCTS -- 1.3%
500,000 Cincinnati Milacron Inc., Notes,
8.375% due 3/15/2004 BB+/Ba1 498,815
MEDICAL - HOSPITALS -- 6.8%
500,000 HCA - The Healthcare Corp., Notes,
8.750% due 9/1/2010 BB+/Ba2 505,319
1,250,000 Rural/Metro Corp., Senior Notes,
7.875% due 3/15/2008 CCC/B3 562,500
Tenet Healthcare Corp., Senior Notes:
1,000,000 7.875% due 1/15/2003 BB+/Ba1 990,000
500,000 Series B, 9.250% due 9/1/2010 BB+/Ba1 526,250
----------
2,584,069
METAL - ALUMINUM -- 1.1%
500,000 Kaiser Aluminum and Chemicals,
Senior Notes, 9.875%
due 2/15/2002 B/B1 422,500
OIL & GAS DRILLING -- 5.4%
1,000,000 Parker Drilling Co. Series D, Senior
Notes, 9.750% due 11/15/2006 B+/B1 985,000
1,000,000 Pride International, Inc., Senior
Notes, 10.000% due 6/1/2009 BB/Ba3 1,040,000
----------
2,025,000
OIL COMPANIES - EXPLORATION & PRODUCTION -- 8.3%
1,590,000 Gulf Canada Resources, Ltd., Senior
Notes, 8.375% due 11/15/2005 BBB-/Ba1 1,621,800
1,500,000 Nuevo Energy Co., Senior
Subordinated Notes, 9.375%
due 10/1/2010(2) B+/B1 1,500,000
----------
3,121,800
RACETRACKS -- 0.6%
250,000 Speedway Motorsports, Inc.,
Series D, Senior Subordinated Notes,
8.500% due 8/15/2007 B+/Ba3 237,500
</TABLE>
ING Domestic Mutual Funds Annual Report / October 31, 2000 25
<PAGE> 28
October 31, 2000
SCHEDULE OF INVESTMENTS
ING HIGH YIELD BOND FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal
Amount Ratings(1) Value
--------- ------- -----
<S> <C> <C>
RADIO -- 5.3%
$1,500,000 Chancellor Media Corp., Series B,
Senior Subordinated Notes, 8.125%
due 12/15/2007 BB+/Ba3 $ 1,515,000
500,000 Spanish Broadcasting System, Inc.,
Senior Subordinated Notes, 9.625%
due 11/1/2009 B-/B3 486,250
-----------
2,001,250
RETAIL - DISCOUNT -- 1.2%
500,000 Kmart Corp., Notes, 8.375%
due 12/1/2004 BB+/Baa3 433,218
SPECIAL PURPOSE ENTITY -- 1.5%
500,000 RBF Finance Co., Senior Secured
Notes, 11.000% due 3/15/2006 BB-/Ba3 571,250
STEEL - PRODUCERS -- 2.4%
1,000,000 AK Steel Corp., Senior Notes,
7.875% due 2/15/2009 BB/Ba2 910,000
TELECOMMUNICATION SERVICES -- 6.3%
1,400,000 Global Crossing Holdings, Ltd.,
Payment-in-Kind Preferred Bonds,
10.500% due 12/1/2008 B+/B1 1,351,000
500,000 GT Group Telecom Inc., Senior
Discount Notes, Step Coupon to
13.250% due 2/1/2010 B-/Caa1 185,000
1,000,000 McLeodUSA Inc., Senior Discount
Notes, Step Coupon to 10.500%
due 3/1/2007 B+/B1 840,000
-----------
2,376,000
TRANSPORTATION - SERVICES -- 0.8%
1,000,000 RailWorks Corp., Senior Subordinated
Notes, 11.500% due 4/15/2009 B/B3 300,000
TRANSPORTATION - TRUCK -- 1.8%
750,000 North American Van Lines Inc.,
Senior Subordinated Notes,
13.375% due 12/1/2009(2) B-/B3 671,250
WIRELESS EQUIPMENT -- 1.3%
$1,000,000 Spectrasite Holdings, Inc., Senior
Discount Notes, Step Coupon to
12.875% due 3/15/2010 B-/B3 $ 490,000
TOTAL CORPORATE BONDS
(Cost -- $36,575,107) $35,128,755
WARRANTS -- 0.1%
500 GT Group Telecom Inc. 30,000
2,000 O'Sullivan Industries, Inc. 2,250
TOTAL WARRANTS
(Cost -- $0) $32,250
REPURCHASE AGREEMENT -- 6.8%
2,582,000 State Street Bank & Trust Co., 6.540% due 11/1/2000;
Proceeds at maturity -- $2,582,469; (Fully
collateralized by Federal Farm Credit Bank, 6.000%
due 10/1/2001; Market value -- $2,634,589)
(Cost -- $2,582,000) $2,582,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $39,157,107)(3) $37,743,005
</TABLE>
1. Credit ratings are provided by Standard & Poor's Rating Group and Moody's
Investors Service, Inc. (unaudited).
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 $2,171,250 in market value or 5.5% of net assets.
3. Aggregate cost for Federal income tax purposes is $39,346,674.
See Notes to Financial Statements.
26 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 29
ING INTERMEDIATE BOND FUND
<TABLE>
<CAPTION>
Shares/
Principal
Amount Ratings(1) Value
--------- ------- -----
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 20.2%
U.S. Treasury Notes:
$ 660,000 6.750% due 5/15/2005 NR/NR $ 684,441
1,269,000 5.750% due 8/15/2010 NR/NR 1,268,208
----------
1,952,649
U.S. Treasury Bonds:
225,000 9.125% due 5/15/2018 NR/NR 300,292
5,051,000 6.125% due 8/15/2029 NR/NR 5,232,523
----------
5,532,815
TOTAL U.S. TREASURY OBLIGATIONS
(Cost -- $7,443,229) $7,485,464
U.S. GOVERNMENT AGENCIES -- 24.3%
Fannie Mae Conventional Loan:
1,277,827 Pool #252707,
6.500% due 9/1/2014 NR/Aaa 1,253,394
1,288,976 Pool #252870,
7.000% due 11/1/2014 NR/Aaa 1,283,022
1,163,942 Pool #459764,
6.500% due 4/1/2029 NR/Aaa 1,119,736
706,072 Pool #484534,
6.500% due 5/1/2029 NR/Aaa 679,255
656,698 Pool #492741,
6.000% due 5/1/2029 NR/Aaa 616,241
568,902 Pool #517081,
7.000% due 10/1/2029 NR/Aaa 558,109
994,560 Pool #536618,
7.500% due 4/1/2030 NR/Aaa 993,488
498,206 Pool #537869,
8.000% due 5/1/2030 NR/Aaa 504,568
----------
7,007,813
Government National Mortgage
Association:
149,732 Pool #271676,
10.000% due 3/15/2019 NR/Aaa 158,012
145,208 Pool #291879,
10.000% due 1/15/2021 NR/Aaa 153,103
271,873 Pool #297548,
10.000% due 1/15/2021 NR/Aaa 286,655
257,021 Pool #299577,
10.000% due 1/15/2021 NR/Aaa 270,996
692,527 Pool #507655,
7.000% due 9/15/2029 NR/Aaa 683,437
----------
1,552,203
500,000 Tennessee Valley Authority,
Series C, 6.000% due 3/15/2013 NR/Aaa 466,274
TOTAL U.S. GOVERNMENT AGENCIES
(Cost -- $9,051,259) $9,026,290
CORPORATE BONDS -- 49.7%
AEROSPACE/DEFENSE-EQUIPMENT -- 1.4%
500,000 Lockheed Martin Corp., Bonds,
8.500% due 12/1/2029 BBB-/Baa3 $ 536,521
AUTOMOBILE -- 2.7%
1,000,000 Ford Motor Credit Auto Owner
Trust, Series 1999B Class C,
Subordinated Bonds, 6.650%
due 10/15/2003 BBB/Baa3 987,845
BROADCAST SERVICES/PROGRAMMING -- 1.4%
500,000 Clear Channel Communications,
Notes, 7.875% due 6/15/2005 BBB-/Baa3 504,770
CABLE TV -- 6.5%
557,980 CSC Holdings, Inc., Series M,
Payment-in-Kind Preferred Bonds,
11.125% due 4/1/2008 B+/B1 597,039
1,000,000 Century Communications Corp.,
Senior Discount Notes, Zero
Coupon due 3/15/2003 B+/B2 757,500
1,000,000 Rogers Cablesystems, Series B,
Senior Notes, 10.000%
due 3/15/2005 BB+/Baa3 1,060,000
----------
2,414,539
CASINO HOTELS -- 2.7%
1,000,000 Park Place Entertainment Corp.,
Senior Subordinated Notes, 9.375%
due 2/15/2007 BB+/Ba2 1,012,500
CELLULAR TELECOMMUNICATIONS -- 1.4%
500,000 Orange PLC, Senior Notes, 8.750%
due 6/1/2006 A/A1 515,000
COMMERCIAL BANKS-SOUTHERN US -- 1.3%
500,000 First Union National Bank,
Subordinated Notes,
7.800% due 8/18/2010 A/A1 499,674
DIVERSIFIED FINANCIAL SERVICES -- 1.3%
500,000 Citigroup Inc., Subordinated Notes,
7.250% due 10/1/2010 A+/Aa3 496,880
</TABLE>
ING Domestic Mutual Funds Annual Report / October 31, 2000 27
<PAGE> 30
October 31, 2000
SCHEDULE OF INVESTMENTS
ING INTERMEDIATE BOND FUND (continued)
<TABLE>
<CAPTION>
Shares/
Principal
Amount Ratings(1) Value
--------- ------- -----
<S> <C> <C>
ELECTRIC--INTEGRATED -- 4.1%
$ 500,000 Consolidated Edison, Inc., Series B,
Notes, 7.500% due 9/1/2010 A+/A1 $ 496,877
250,000 Dominion Resources Inc.,
Series B, Senior Notes,
7.625% due 7/15/2005 BBB+/Baa1 252,519
350,000 Niagara Mohawk Power Corp.,
Senior Discount Notes, Series H,
Step Coupon to 8.500%
due 7/1/2010 BBB-/Baa3 284,155
500,000 NSTAR, Notes,
8.000% due 2/15/2010 BBB+/A2 502,490
-----------
1,536,041
FINANCE-INVESTMENT BANKER/BANKER -- 2.7%
1,000,000 Lehman Brothers Holdings Inc.,
Series E, Medium Term Notes,
6.900% due 1/29/2001 A/A3 1,000,364
INDEPENDENT POWER PRODUCER -- 1.3%
500,000 Calpine Corp., Senior Notes,
8.250% due 8/15/2005 BB+/Ba1 498,382
INVESTMENT COMPANIES -- 2.4%
904,487 Garanti Trade Payment Rights
Master Trust, Series 1999-B
Class 1, 10.810% due 6/15/2004(2) NR/NR 904,452
MEDICAL-HOSPITALS -- 1.4%
500,000 HCA -- The Healthcare Co., Notes,
8.750% due 9/1/2010 BB+/Ba2 505,318
MORTGAGE-LOANS -- 1.3%
482,216 Residential Accredited Loans, Inc.,
Series 1997-QS4, Class M2,
7.750% due 5/25/2027 NR/NR 472,347
OIL COMPANIES-EXPLORATION & PRODUCTION -- 2.7%
500,000 Gulf Canada Resources Ltd., Senior
Notes, 8.375% due 11/15/2005 BBB-/Ba1 510,000
500,000 Pemex Project Funding Master Trust,
Notes 9.125% due 10/13/2010(2) BB+/Baa3 486,250
-----------
996,250
PIPELINES -- 4.1%
Duke Energy Field Services, Notes:
500,000 7.500% due 8/16/2005 BBB/Baa2 505,007
1,000,000 7.875% due 8/16/2010 BBB/Baa2 1,020,384
-----------
1,525,391
REITS-OFFICE PROPERTY -- 2.6%
1,000,000 HRPT Properties Trust, Series A,
Senior Notes, 6.750%
due 12/18/2002 BBB/Baa2 974,004
RETAIL-DISCOUNT -- 0.6%
$ 250,000 Kmart Corp., Notes, 8.375%
due 12/1/2004 BB+/Baa3 $ 216,609
RETAIL-REGIONAL DEPARTMENT STORES -- 1.4%
500,000 Federated Department Stores Inc.,
Senior Notes, 8.500%
due 6/15/2003 BBB+/Baa1 503,041
TELECOMMUNICATION SERVICES -- 1.3%
500,000 Global Crossing Holdings Ltd.,
Payment-in-Kind Preferred Bonds,
10.500% due 12/1/2008 B+/B1 482,500
TOBACCO -- 2.6%
1,000,000 R.J. Reynolds Tobacco Holdings,
Inc., Notes, 7.375% due 5/15/2003 BBB-/Baa2 955,377
TRANSPORTATION - AIR FREIGHT -- 2.5%
976,489 Federal Express Corp., Series 981A,
Pass Through Certificates, 6.720%
due 1/15/2022 AAA/Aa2 911,879
TOTAL CORPORATE BONDS
(Cost -- $18,649,484) $18,449,684
REPURCHASE AGREEMENT -- 5.8%
2,134,000 State Street Bank & Trust Co., 6.540%
due 11/1/2000; Proceeds at maturity --
$2,134,388; (Fully collateralized by
Fannie Mae, 6.600% due 6/7/2002;
Market value -- $2,180,679)
(Cost -- $2,134,000) $ 2,134,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $37,277,972)(3) $37,095,438
</TABLE>
1. Credit ratings are provided by Standard & Poor's Rating Group and Moody's
Investors Service, Inc. (unaudited).
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 $1,390,702 in market value or 3.7% of net assets.
3. Aggregate cost for Federal income tax purposes is $37,682,652.
See Notes to Financial Statements.
28 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 31
ING NATIONAL TAX-EXEMPT BOND FUND
<TABLE>
<CAPTION>
Shares/
Principal
Amount Ratings(1) Value
--------- ------- -----
<S> <C> <C>
MUNICIPAL SECURITIES -- 94.3%
ARIZONA -- 5.0%
$1,100,000 Salt River Project, Arizona
Agriculture Improvement & Power
District Electrical Systems Revenue,
5.750% due 1/1/2019 AA/Aa2 $ 1,104,268
COLORADO -- 4.6%
1,000,000 Interlocken Metropolitan District,
Colorado Reference, Series A,
5.750% due 12/15/2019 AA/NR 1,006,050
CONNECTICUT -- 4.6%
1,000,000 Connecticut State General Obligation,
Series B, 5.500% due 11/1/2018 AA/Aa3 1,011,940
ILLINOIS -- 17.2%
1,000,000 Chicago Illinois Board of Education,
Chicago School Reform, AMBAC
Insured, 5.750% due 12/1/2027 AAA/Aaa 1,005,990
1,250,000 De Kalb Ogle Etc Counties, Illinois
Community College District No. 523,
FSA Insured, 5.750% due 2/1/2011 NR/Aaa 1,321,963
1,500,000 Illinois State Sales Tax Revenue,
Series Z, 4.000% due 6/15/2004 AAA/Aa2 1,452,000
-----------
3,779,953
INDIANA -- 4.5%
1,000,000 Indianapolis Industrial Local Public
Improvement Board, Series E,
5.750% due 2/1/2029 AA/NR 981,410
MASSACHUSETTS -- 4.6%
1,000,000 Massachusetts State Port Authority
Revenue, Series C,
5.750% due 7/1/2029 AA-/Aa3 1,010,260
NEVADA -- 4.6%
1,000,000 Clark County, Nevada School
District Building & Renovation,
Series B, FGIC Insured,
5.750% due 6/15/2002 AAA/Aaa 1,019,990
NEW HAMPSHIRE -- 4.6%
1,000,000 Manchester New Hampshire
Housing & Redevelopment
Authority Revenue, Series A,
5.750% due 1/1/2008 A/Baa3 1,020,490
NEW YORK -- 8.7%
1,000,000 New York, New York General
Obligation, Series H,
5.000% due 3/15/2029 A/A2 894,970
1,000,000 New York State Dormitory Authority
Revenue, Series A, FSA Insured,
5.500% due 7/1/2015 AAA/Aaa 1,025,480
-----------
1,920,450
OKLAHOMA -- 9.2%
1,000,000 Oklahoma State Industrial Authority
Revenue Reference, Health System
Obligation Group, Series A,
6.000% due 8/15/2019 AAA/Aaa 1,030,740
1,000,000 Payne County Oklahoma Economic
Development Authority, Student
Housing Revenue, Collegiate Housing
Foundation, Series A,
6.375% due 6/1/2030 NR/Baa3 1,001,070
-----------
2,031,810
PENNSYLVANIA -- 8.7%
$1,000,000 Allegheny County Pennsylvania
Port Authority Special Revenue,
MBIA Insured,
6.000% due 3/1/2024 AAA/Aaa $ 1,040,850
1,000,000 Philadelphia Pennsylvania Hospital
& Higher Education Facilities
Authority Revenue, Jefferson
Health System, Series A,
5.000% due 5/15/2018 AA-/A1 864,580
-----------
1,905,430
TEXAS -- 9.3%
1,000,000 Laredo Texas Independent School
District, General Obligation, PSF
Guaranteed, 5.500% due 8/1/2020 AAA/Aaa 995,730
1,050,000 San Felipe Del Rio Texas
Independent School District, General
Obligation, PSF Guaranteed,
5.500% due 8/15/2019 AAA/Aaa 1,044,435
-----------
2,040,165
WASHINGTON -- 4.1%
1,000,000 Seattle Washington Municipal Light
& Power Revenue, Series B, MBIA
Insured, 5.000% due 6/1/2024 AAA/Aaa 905,810
WEST VIRGINIA -- 4.6%
1,000,000 West Virginia State Hospital Finance
Authority, Hospital Revenue,
Oak Hill Hospital, Series B,
6.750% due 9/1/2030 NR/A2 1,019,500
TOTAL MUNICIPAL SECURITIES
(Cost -- $20,392,076) $20,757,526
REPURCHASE AGREEMENT -- 5.7%
1,250,000 State Street Bank & Trust Co., 6.540% due
11/1/2000; Proceeds at maturity -- $1,250,227;
(Fully collateralized by Fannie Mae, 6.230%
due 8/20/2001; Market value -- $1,277,420)
(Cost -- $1,250,000) $ 1,250,000
TOTAL INVESTMENTS -- 100.0%
(Cost -- $21,642,076)(2) $22,007,526
</TABLE>
1. Credit ratings are provided by Standard & Poor's Rating Group and Moody's
Investors Service, Inc. (unaudited).
2. Aggregate cost for Federal income tax purposes is substantially the same.
AMBAC -- American Municipal Bond Assurance Corp.
FGIC -- Financial Guaranty Insurance Corp.
FSA -- Financial Security Assurance Corp.
MBIA -- Municipal Bond Insurance Association Corp.
PSF -- Permanent School Fund
See Notes to Financial Statements.
ING Domestic Mutual Funds Annual Report / October 31, 2000 29
<PAGE> 32
OCTOBER 31, 2000 (UNAUDITED)
BOND RATINGS
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.
NR - Indicates that the bond is not rated by Standard & Poor's or Moody's.
30 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 33
FINANCIAL HIGHLIGHTS
ING INTERNET FUND
<TABLE>
<CAPTION>
For a share of beneficial
interest outstanding Class A Shares(1) Class B Shares(1) Class C Shares(1) Class X Shares(1)
throughout each period: 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value per share,
beginning of period $12.67 $10.00 $12.63 $10.00 $12.63 $10.00 $12.63 $10.00
From investment operations:
Net investment loss (0.24) (0.03) (0.32) (0.03) (0.34) (0.03) (0.29) (0.04)
Net realized and unrealized gain
(loss)(2) (0.17) 2.70 (0.17) 2.66 (0.14) 2.66 (0.18) 2.67
------- ------- ------- ------- ------- ------ ------ ------
Total from investment operations (0.41) 2.67 (0.49) 2.63 (0.48) 2.63 (0.47) 2.63
------- ------- ------- ------- ------- ------ ------ ------
Distributions paid from capital gain (0.23) -- (0.23) -- (0.23) -- (0.23) --
------- ------- ------- ------- ------- ------ ------ ------
Net asset value per share, end
of period $12.03 $12.67 $11.91 $12.63 $11.92 $12.63 $11.93 $12.63
NET ASSETS, END OF PERIOD
(in thousands) $59,155 $35,798 $38,726 $14,869 $17,709 $5,290 $3,630 $1,060
Total investment return at net
asset value(3) (3.98)% 26.70%(4) (4.63)% 26.30%(4) (4.55)% 26.30%(4) (4.47)% 26.30%(4)
Ratios to average net assets:
Net expenses 1.47% 1.54%(5) 2.12% 2.17%(5) 2.12% 2.18%(5) 2.13% 2.17%(5)
Gross expenses 2.76% 3.35%(5) 3.01% 3.75%(5) 3.01% 3.79%(5) 3.02% 3.65%(5)
Net investment loss (1.36)% (1.15)%(5) (2.01)% (1.88)%(5) (2.01)% (1.88)%(5) (2.03)% (1.85)%(5)
Portfolio turnover rate 112.15% 22.08%(4) 112.15% 22.08%(4) 112.15% 22.08%(4) 112.15% 22.08%(4)
</TABLE>
1. 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 load with respect to Class A shares or the applicable
contingent deferred sales load 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 (2.56)% for the year ended 10/31/00 and 28.83% for the
period ended 10/31/99. 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>
For a share of
beneficial interest outstanding Class A Shares(1) Class B Shares(1) Class C Shares(1) Class X Shares(2)
throughout each period: 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value per share,
beginning of period $11.32 $10.00 $11.26 $10.00 $11.26 $10.00 $11.27 $11.24
From investment operations:
Net investment loss (0.12) (0.08) (0.16) (0.08) (0.18) (0.08) (0.18) (0.09)
Net realized and unrealized gain 2.91 1.40 2.83 1.34 2.85 1.34 2.85 0.12
------- ------- ------ ----- ------ ----- ------ -----
Total from investment operations 2.79 1.32 2.67 1.26 2.67 1.26 2.67 0.03
------- ------- ------ ----- ------ ----- ------ -----
Distributions paid from investment income -- -- -- -- -- -- -- --
------- ------- ------ ----- ------ ----- ------ -----
Net asset value per share, end of period $14.11 $11.32 $13.93 $11.26 $13.93 $11.26 $13.94 $11.27
NET ASSETS, END OF PERIOD (in thousands) $41,638 $29,860 $3,201 $ 761 $2,574 $ 423 $1,572 $ 572
Total investment return at
net asset value(3) 24.65% 13.20%(4) 23.71% 12.60%(4) 23.71% 12.60%(4) 23.69% 0.27%(4)
Ratios to average net assets:
Net expenses 1.43% 1.34%(5) 2.10% 1.99%(5) 2.10% 1.99%(5) 2.09% 1.99%(5)
Gross expenses 2.47% 2.67%(5) 2.74% 2.97%(5) 2.74% 3.01%(5) 2.73% 2.97%(5)
Net investment loss (0.78)% (0.89)%(5) (1.40)% (1.64)%(5) (1.40)% (1.66)%(5) (1.41)% (1.64)%(5)
Portfolio turnover rate 342.58% 139.12%(4) 342.58% 139.12%(4) 342.58% 139.12%(4) 342.58% 139.12%(4)
</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 load with respect to Class A
shares or the applicable contingent deferred sales load 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 26.17% for the year
ended 10/31/00 and 2.27% for the period ended 10/31/99. Total returns would be
lower if part of the Fund's expenses were not waived or reimbursed. 4. Not
annualized. 5. Annualized.
ING Domestic Mutual Funds Annual Report /October 31, 2000 31
<PAGE> 34
FINANCIAL HIGHLIGHTS
ING FOCUS FUND
<TABLE>
<CAPTION>
For a share of beneficial
interest outstanding Class A Shares(1) Class B Shares(1) Class C Shares(1) Class X Shares(2)
throughout each period: 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value per share,
beginning of period $12.54 $10.00 $12.48 $10.00 $12.47 $10.00 $12.46 $10.85
From investment operations:
Net investment loss 0.00 (0.02) (0.07) (0.03) (0.07) (0.03) (0.07) (0.05)
Net realized and unrealized gain 2.56 2.56 2.52 2.51 2.52 2.50 2.52 1.66
------- ------- ------ ------ ------ ---- ------ ------
Total from investment operations 2.56 2.54 2.45 2.48 2.45 2.47 2.45 1.61
------- ------- ------ ------ ------ ---- ------ ------
Distributions paid from capital gain (0.42) -- (0.42) -- (0.42) -- (0.42) --
------- ------- ------ ------ ------ ---- ------ ------
Net asset value per share, end of period $14.68 $12.54 $14.51 $12.48 $14.50 $12.47 $14.49 $12.46
NET ASSETS, END OF PERIOD (in thousands) $60,826 $35,783 $5,544 $2,984 $2,912 $976 $2,275 $1,116
Total investment return at net asset
value(3) 20.83% 25.40%(4) 20.03% 24.80%(4) 20.05% 24.70%(4) 20.06% 14.84%(4)
Ratios to average net assets:
Net expenses 1.39% 1.34%(5) 2.04% 1.99%(5) 2.04% 1.99%(5) 2.04% 2.00%(5)
Gross expenses 2.43% 2.60%(5) 2.68% 2.92%(5) 2.67% 2.92%(5) 2.67% 2.89%(5)
Net investment income (loss) 0.03% (0.25)%(5) (0.62)% (0.88)%(5) (0.60)% (0.87)%(5) (0.61)% (0.92)%(5)
Portfolio turnover rate 63.45% 95.71%(4) 63.45% 95.71%(4) 63.45% 95.71%(4) 63.45% 95.71%(4)
</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 load with respect to Class A
shares or the applicable contingent deferred sales load 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 22.47% for the year
ended 10/31/00 and 17.14% for the period ended 10/31/99. 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>
For a share of beneficial
interest outstanding Class A Shares(1) Class B Shares(1) Class C Shares(1)
throughout each period: 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value per share,
beginning of period $10.39 $10.00 $10.33 $10.00 $10.33 $10.00
From investment operations:
Net investment loss (0.13) (0.03) (0.14) (0.05) (0.16) (0.06)
Net realized and unrealized
gain (loss) 2.96 0.42 2.87 0.38 2.89 0.39
------- ------- ------ ------ ------ ----
Total from investment
operations 2.83 0.39 2.73 0.33 2.73 0.33
------- ------- ------ ------ ------ ----
Distributions paid from
investment income -- -- -- -- -- --
------- ------- ------ ------ ------ ----
Net asset value per share,
end of period $13.22 $10.39 $13.06 $10.33 $13.06 $10.33
NET ASSETS, END OF PERIOD
(in thousands) $38,918 $28,042 $2,568 $ 653 $1,307 $ 391
Total investment return at
net asset value(5) 27.24% 3.90%(6) 26.43% 3.30%(6) 26.43% 3.30%(6)
Ratios to average net assets:
Net expenses 1.49% 1.35%(7) 2.16% 1.99%(7) 2.15% 1.99%(7)
Gross expenses 2.52% 2.68%(7) 2.79% 2.82%(7) 2.79% 2.82%(7)
Net investment loss (1.12)% (0.35)%(7) (1.81)% (1.42)%(7) (1.81)% (1.45)%(7)
Portfolio turnover rate 85.45% 41.27%(6) 85.45% 41.27%(6) 85.45% 41.27%(6)
</TABLE>
<TABLE>
<CAPTION>
For a share of beneficial
interest outstanding Class I Shares(2) Class X Shares(3)
throughout each period: 10/31/00(4) 10/31/99 10/31/00 10/31/99
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value per share,
beginning of period N/A $10.27 $10.33 $10.53
From investment operations:
Net investment loss N/A (0.01) (0.18) (0.07)
Net realized and unrealized
gain (loss) N/A 0.14 2.91 (0.13)
------- ------- ------ ------
Total from investment
operations N/A 0.13 2.73 (0.20)
------- ------- ------ ------
Distributions paid from
investment income N/A -- -- --
------- ------- ------ ------
Net asset value per share,
end of period N/A $10.40 $13.06 $10.33
NET ASSETS, END OF PERIOD
(in thousands) N/A $ 416 $ 670 $ 333
Total investment return at
net asset value(5) N/A 1.27%(6) 26.43% (1.90)%(6)
Ratios to average net assets:
Net expenses N/A 0.80%(7) 2.15% 1.99%(7)
Gross expenses N/A 1.56%(7) 2.78% 2.82%(7)
Net investment loss N/A (0.24)%(7) (1.79)% (1.38)%(7)
Portfolio turnover rate N/A 41.27%(6) 85.45 41.27%(6)
</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. Class I shares were fully redeemed on December 29, 1999.
5. Total return assumes reinvestment of all dividend and capital gain
distributions, if any, and does not reflect the deduction of the applicable
sales load with respect to Class A shares or the applicable contingent deferred
sales load 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 28.96% for the year ended 10/31/00 and 0.06% for the period ended 10/31/99.
Total returns would be lower if part of the Fund's expenses were not waived or
reimbursed. 6. Not annualized. 7. Annualized.
32 Ing Domestic Mutual Funds Annual Report/ October 31, 2000
<PAGE> 35
FINANCIAL HIGHLIGHTS
ING LARGE CAP GROWTH FUND
<TABLE>
<CAPTION>
For a share of beneficial interest outstanding Class A Shares(1) Class B Shares(1) Class C Shares(1)
throughout each period: 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value per share, beginning of period $11.80 $10.00 $11.75 $10.00 $11.74 $10.00
From investment operations:
Net investment loss (0.08) (0.04) (0.14) (0.04) (0.14) (0.03)
Net realized and unrealized gain 0.76 1.84 0.73 1.79 0.74 1.77
------- ------- ------ ------ ------- -------
Total from investment operations 0.68 1.80 0.59 1.75 0.60 1.74
------- ------- ------ ------ ------- -------
Distributions paid from investment income -- -- -- -- -- --
------- ------- ------ ------ ------- -------
Net asset value per share, end of period $12.48 $11.80 $12.34 $11.75 $12.34 $11.74
NET ASSETS, END OF PERIOD (in thousands) $54,682 $37,517 $7,242 $3,900 $18,817 $10,692
Total investment return at net asset value(4) 5.76% 18.00%(5) 5.02% 17.50%(5) 5.11% 17.40%(5)
Ratios to average net assets:
Net expenses 1.27% 1.28%(6) 1.91% 1.93%(6) 1.92% 1.93%(6)
Gross expenses 2.12% 2.39%(6) 2.37% 2.69%(6) 2.37% 2.67%(6)
Net investment loss (0.65)% (0.41)%(6) (1.31)% (1.14)%(6) (1.31)% (1.13)%(6)
Portfolio turnover rate 92.38% 61.71%(5) 92.38% 61.71%(5) 92.38% 61.71%(5)
</TABLE>
<TABLE>
<CAPTION>
For a share of beneficial interest outstanding Class I Shares(2) Class X Shares(3)
throughout each period: 10/31/00 10/31/99 10/31/00 10/31/99
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value per share, beginning of period $11.81 $11.12 $11.73 $ 10.82
From investment operations:
Net investment loss (0.01) 0.00(7) (0.16) (0.06)
Net realized and unrealized gain 0.76 0.69 0.76 0.97
------- ------- ------ ------
Total from investment operations 0.75 0.69 0.60 0.91
------- ------- ------ ------
Distributions paid from investment income -- -- -- --
------- ------- ------ ------
Net asset value per share, end of period $12.56 $11.81 $12.33 $ 11.73
NET ASSETS, END OF PERIOD (in thousands) $186 $ 51 $6,724 $ 5,105
Total investment return at net asset value(4) 6.35% 6.21%(5) 5.12% 8.41%(5)
Ratios to average net assets:
Net expenses 0.71% 0.77%(6) 1.92% 1.93%(6)
Gross expenses 1.12% 1.49%(6) 2.37% 2.68%(6)
Net investment loss (0.13)% (0.08)%(6) (1.30)% (1.13)%(6)
Portfolio turnover rate 92.38% 61.71%(5) 92.38% 61.71%(5)
</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 load with respect to Class A shares or the
applicable contingent deferred sales load 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 7.22% for the year ended 10/31/00 and
10.58% for the period ended 10/31/99. 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>
For a share of beneficial
interest outstanding Class A Shares(1) Class B Shares(1) Class C Shares(1) Class X Shares(2)
throughout each period: 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value per share,
beginning of period $11.99 $10.00 $11.96 $10.00 $11.92 $10.00 $11.93 $11.08
From investment operations(3):
Net investment income (loss) 0.05 0.04 (0.04) (0.01) (0.04) 0.00(7) (0.04) (0.01)
Net realized and unrealized gain 0.38 1.95 0.39 1.97 0.39 1.92 0.38 0.86
------- ------ ------ ------ ------ ------ ------ ------
Total from investment operations 0.43 1.99 0.35 1.96 0.35 1.92 0.34 0.85
------- ------ ------ ------ ------ ------ ------ ------
Distributions paid
from investment income (0.05) -- (0.03) -- (0.07) -- 0.00(7) --
------- ------ ------ ------ ------ ------ ------ ------
Net asset value per share,
end of period $12.37 $11.99 $12.28 $11.96 $12.20 $11.92 $12.27 $11.93
NET ASSETS, END OF PERIOD
(in thousands) $47,647 $45,714 $8,268 $7,059 $2,870 $1,222 $2,963 $3,089
Total investment return at
net asset value(4) 3.62% 19.90%(5) 2.94% 19.60%(5) 2.91% 19.20%(5) 2.88% 7.67%(5)
Ratios to average net assets:
Net expenses 1.31% 1.28%(6) 1.96% 1.95%(6) 1.95% 1.97%(6) 1.96% 1.94%(6)
Gross expenses 2.22% 2.40%(6) 2.47% 2.66%(6) 2.47% 2.64%(6) 2.48% 2.67%(6)
Net investment income (loss) 0.36% 0.49%(6) (0.29)% (0.14)%(6) (0.32)% (0.14)%(6) (0.28)% (0.14)%(6)
Portfolio turnover rate 14.31% 8.51%(5) 14.31% 8.51%(5) 14.31% 8.51%(5) 14.31 8.51%(5)
</TABLE>
1. Class A, B and C shares commenced operation December 15, 1998. 2. Class X
shares commenced offering on January 11, 1999. 3. Per share calculation for the
year ended October 31, 2000 is based on average number of shares outstanding
during the year. 4. Total return assumes reinvestment of all dividend and
capital gain distributions, if any, and does not reflect the deduction of the
applicable sales load with respect to Class A shares or the applicable
contingent deferred sales load 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 4.94% for the year ended 10/31/00 and 9.82% for the
period ended 10/31/99. 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.
ING Domestic Mutual Funds Annual Report/October 31, 2000 33
<PAGE> 36
FINANCIAL HIGHLIGHTS
ING GROWTH & INCOME FUND
<TABLE>
<CAPTION>
For a share of beneficial
interest outstanding Class A Shares(1) Class B Shares(1) Class C Shares(1) Class X Shares(2)
throughout each period: 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value per share,
beginning of period $11.42 $10.00 $11.36 $10.00 $11.38 $10.00 $11.35 $10.67
From investment operations:(7)
Net investment income (loss) (0.02) 0.01 (0.07) (0.03) (0.08) (0.02) (0.09) (0.03)
Net realized and unrealized gain 0.35 1.42 0.31 1.41 0.32 1.40 0.34 0.72
------- ------- ------ ------ ------ ---- ------ ------
Total from investment operations 0.33 1.43 0.24 1.38 0.24 1.38 0.25 0.69
------- ------- ------ ------ ------ ---- ------ ------
Distributions paid from:
Investment income (0.01) (0.01) -- (0.02) -- 0.00(6) -- (0.01)
Capital gain (0.03) -- (0.03) -- (0.03) -- (0.03) --
------- ------- ------ ------ ------ ---- ------ ------
Total distributions (0.04) (0.01) (0.03) (0.02) (0.03) 0.00(6) (0.03) (0.01)
------- ------- ------ ------ ------ ---- ------ ------
Net asset value per share,
end of period $11.71 $11.42 $11.57 $11.36 $11.59 $11.38 $11.57 $11.35
NET ASSETS, END OF PERIOD
(in thousands) $37,554 $34,964 $2,673 $1,132 $1,935 $855 $2,026 $1,470
Total investment return at
net asset value(3) 2.83% 14.34%(4) 2.07% 13.79%(4) 2.07% 13.81%(4) 2.16% 6.51%(4)
Ratios to average net assets:
Net expenses 1.32% 1.28%(5) 1.97% 1.93%(5) 1.97% 1.93%(5) 1.97% 1.93%(5)
Gross expenses 2.27% 2.37%(5) 2.51% 2.67%(5) 2.52% 2.68%(5) 2.51% 2.66%(5)
Net investment income (loss) (0.17)% 0.14%(5) (0.86)% (0.61)%(5) (0.85)% (0.61)%(5) (0.83)% (0.59)%(5)
Portfolio turnover rate 75.90% 32.44%(4) 75.90% 32.44%(4) 75.90% 32.44%(4) 75.90% 32.44%(4)
</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 load with respect to Class A
shares or the applicable contingent deferred sales load 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 4.21% for the year
ended 10/31/00 and 8.64% for the period ended 10/31/99. 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. 7. Per share
calculation is based on overage number of shares outstanding during the period.
FINANCIAL HIGHLIGHTS
ING HIGH YIELD BOND FUND
<TABLE>
<CAPTION>
For a share of beneficial
interest outstanding Class A Shares(1) Class B Shares(1) Class C Shares(1) Class X Shares(2)
throughout each period: 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value per share,
beginning of period $9.96 $10.00 $9.96 $10.00 $9.96 $10.00 $9.95 $10.02
From investment operations:(3)
Net investment income 0.85 0.67 0.78 0.60 0.78 0.62 0.78 0.58
Net realized and
unrealized loss (0.65) (0.04) (0.66) (0.05) (0.66) (0.06) (0.65) (0.09)
------- ------- ------ ------ ------ ---- ------ ----
Total from investment
operations 0.20 0.63 0.12 0.55 0.12 0.56 0.13 0.49
------- ------- ------ ------ ------ ---- ------ ----
Distributions paid from:
Investment income (0.86) (0.67) (0.79) (0.59) (0.79) (0.60) (0.79) (0.56)
Capital gain (0.06) -- (0.06) -- (0.06) -- (0.06) --
------- ------- ------ ------ ------ ---- ------ ----
Total distributions (0.92) (0.67) (0.85) (0.59) (0.85) (0.60) (0.85) (0.56)
------- ------- ------ ------ ------ ---- ------ ----
Net asset value per share,
end of period $9.24 $9.96 $9.23 $9.96 $9.23 $9.96 $9.23 $9.95
------- ------- ------ ------ ------ ---- ------ ----
NET ASSETS, END OF PERIOD
(in thousands) $33,220 $30,537 $3,702 $2,374 $1,578 $776 $1,048 $865
Total investment return at
net asset value(4) 1.89% 6.37%(5) 1.02% 5.57%(5) 1.02% 5.67%(5) 1.13% 4.99%(5)
Ratios to average net assets:
Net expenses 1.04% 1.00%(6) 1.79% 1.72%(6) 1.79% 1.73%(6) 1.79% 1.74%(6)
Gross expenses 2.16% 2.32%(6) 2.41% 2.64%(6) 2.40% 2.66%(6) 2.41% 2.66%(6)
Net investment income 8.75% 7.53%(6) 7.99% 6.90%(6) 7.98% 7.01%(6) 8.02% 7.11%(6)
Portfolio turnover rate 480.64% 756.40%(5) 480.64% 756.40%(5) 480.64% 756.40%(5) 480.64% 756.40%(5)
</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 calculation 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 load with respect to
Class A shares or the applicable contingent deferred sales load 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 3.15% for the year
ended 10/31/00 and 7.09% for the period ended 10/31/99. Total returns would be
lower if part of the Fund's expenses were not waived or reimbursed. 5. Not
annualized. 6. Annualized.
34 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 37
FINANCIAL HIGHLIGHTS
ING INTERMEDIATE BOND FUND
<TABLE>
<CAPTION>
For a share of beneficial
interest outstanding Class A Shares(1) Class B Shares(1) Class C Shares(1) Class X Shares(2)
throughout each period: 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99 10/31/00 10/31/99
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value per share,
beginning of period $9.40 $10.00 $9.40 $10.00 $9.40 $10.00 $9.40 $9.87
From investment operations:(3)
Net investment income 0.61 0.45 0.53 0.40 0.54 0.42 0.53 0.37
Net realized and unrealized loss 0.12 (0.60) 0.13 (0.61) 0.12 (0.63) 0.13 (0.48)
------- ------- ------ ------ ------ ------ ---- ------
Total from investment operations 0.73 (0.15) 0.66 (0.21) 0.66 (0.21) 0.66 (0.11)
------- ------- ------ ------ ------ ------ ---- ------
Distributions paid from
investment income (0.61) (0.45) (0.54) (0.39) (0.54) (0.39) (0.54) (0.36)
------- ------- ------ ------ ------ ------ ---- ------
Net asset value per share,
end of period $9.52 $9.40 $9.52 $9.40 $9.52 $9.40 $9.52 $9.40
NET ASSETS, END OF PERIOD
(in thousands) $29,893 $32,013 $1,523 $1,958 $5,248 $1,082 $554 $1,006
Total investment return at
net asset value(4) 8.11% (1.46)%(5) 7.30% (2.13)%(5) 7.32% (2.10)%(5) 7.30% (1.07)%(5)
Ratios to average net assets:
Net expenses 1.00% 0.96%(6) 1.74% 1.70%(6) 1.73% 1.71%(6) 1.75% 1.71%(6)
Gross expenses 2.08% 2.12%(6) 2.33% 2.39%(6) 2.32% 2.44%(6) 2.33% 2.41%(6)
Net investment income 6.48% 5.38%(6) 5.71% 4.83%(6) 5.74% 4.94%(6) 5.70% 4.90%(6)
Portfolio turnover rate 733.33% 431.50%(5) 733.33% 431.50%(5) 733.33% 431.50%(5) 733.33% 431.50%(5)
</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 calculation 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 load with respect to
Class A shares or the applicable contingent deferred sales load 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 9.44% for the year
ended 10/31/00 and 0.91% for the period ended 10/31/99. 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 NATIONAL TAX-EXEMPT BOND FUND
<TABLE>
<CAPTION>
For a share of beneficial
interest outstanding Class A Shares(1) Class B Shares(1) Class C Shares(1)
throughout each period: 10/31/00 10/31/00 10/31/00
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value per share, beginning of period $ 10.00 $ 10.00 $ 10.00
From investment operations(2):
Net investment income 0.48 0.38 0.39
Net realized and unrealized gain 0.11 0.11 0.12
---------- ---------- ----------
Total from investment operations 0.59 0.49 0.51
---------- ---------- ----------
Distributions paid from investment income (0.48) (0.40) (0.40)
---------- ---------- ----------
Net asset value per share, end of period $ 10.11 $ 10.09 $ 10.11
NET ASSETS, END OF PERIOD (in thousands) $ 21,592 $ 311 $ 439
Total investment return at net asset value(3,4) 6.09% 5.02% 5.29%
Ratios to average net assets:(5)
Net expenses 0.95% 1.67% 1.68%
Gross expenses 2.12% 2.32% 2.33%
Net investment income 4.92% 3.93% 4.00%
Portfolio turnover rate(4) 49.99% 49.99% 49.99%
</TABLE>
1. Commenced operations on November 8, 1999. 2. Per share calculation is based
on average number of shares outstanding during the period. 3. Total return
assumes reinvestment of all dividend and capital gain distributions, if any, and
does not reflect the deduction of the applicable sales load with respect to
Class A shares or the applicable contingent deferred sales load with respect to
Class B and C shares. Total returns would be lower if part of the Fund's
expenses were not waived or reimbursed. 4. Not annualized. 5. Annualized.
ING Domestic Mutual Funds Annual Report / October 31, 2000 35
<PAGE> 38
OCTOBER 31, 2000
STATEMENTS OF ASSETS & LIABILITIES
<TABLE>
<CAPTION>
ING ING ING ING ING
INTERNET SMALL CAP FOCUS MID CAP LARGE CAP
FUND GROWTH FUND FUND GROWTH FUND GROWTH FUND
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at cost $165,141,819 $36,765,042 $53,084,451 $30,526,814 $76,912,380
----------- ---------- ---------- ---------- ----------
Investments in securities, at value $118,642,544 $41,903,982 $65,523,093 $41,379,496 $84,370,116
Repurchase agreements, at value -- 7,328,000 5,135,000 922,000 3,312,000
Cash -- 26,089 24,151 16,471 --
Receivable for investment securities sold 1.333,563 57,328 917,581 1,494,957 94,543
Receivable for fund shares sold 720,560 321,149 26,771 69,632 42,659
Dividend and interest receivable -- 6,010 54,845 4,180 2,912
Prepaid expenses 11,875 7,258 7,679 7,116 8,957
----------- ---------- ---------- ---------- ----------
Total Assets 120,708,542 49,649,816 71,689,120 43,893,852 87,831,187
LIABILITIES:
Payable for investment securities
purchased -- 498,750 -- 355,012 --
Payable to bank 955,325 -- -- -- 5,572
Payable for fund shares redeemed 234,112 76,551 13,288 -- 34,261
Management fee payable 67,097 20,707 29,121 17,887 27,719
Distribution fee payable 45,910 7,661 11,485 6,018 25,190
Dividend payable -- -- -- -- --
Other accrued expenses 185,732 61,440 77,543 51,340 87,084
----------- ---------- ---------- ---------- ----------
Total Liabilities 1,488,176 665,109 131,437 430,257 179,826
NET ASSETS $119,220,366 $48,984,707 $71,557,683 $43,463,595 $87,651,361
Composition of Net Assets:
Par value of shares of beneficial
interest $ 9,959 $ 3,479 $ 4,883 $ 3,292 $ 7,053
Capital paid in excess of par value 153,747,059 38,581,361 56,022,797 33,721,209 78,832,773
Accumulated net investment income (loss) -- -- -- -- --
Accumulated net realized gain (loss) 11,962,623 5,260,939 3,091,361 (1,113,588) 1,353,799
Net unrealized appreciation
(depreciation) of investments and
foreign currencies (46,499,275) 5,138,928 12,438,642 10,852,682 7,457,736
NET ASSETS $119,220,366 $48,984,707 $71,557,683 $43,463,595 $87,651,361
Class A Shares
Net Assets $ 59,155,277 $41,637,533 $60,826,395 $38,917,852 $54,682,045
Shares Outstanding 4,917,841 2,951,951 4,143,448 2,943,927 4,380,628
Net Asset Value Per Share
(and redemption price) $ 12.03 $ 14.11 $ 14.68 $ 13.22 $ 12.48
Maximum Public Offering Price $ 12.76(1) $ 14.97(1) $ 15.58(1) $ 14.03(1) $ 13.24(1)
Class B Shares
Net Assets $ 38,726,244 $ 3,200,755 $ 5,544,350 $ 2,568,194 $ 7,242,325
Shares Outstanding 3,250,500 229,706 381,990 196,673 586,717
Net Asset Value Per Share(3) $ 11.91 $ 13.93 $ 14.51 $ 13.06 $ 12.34
Class C Shares
Net Assets $ 17,708,683 $ 2,574,231 $ 2,911,564 $ 1,307,468 $18,817,399
Shares Outstanding 1,485,928 184,796 200,818 100,135 1,525,526
Net Asset Value Per Share(4) $ 11.92 $ 13.93 $ 14.50 $ 13.06 $ 12.34
Class I Shares
Net Assets -- -- -- -- $ 185,902
Shares Outstanding -- -- -- -- 14,797
Net Asset Value Per Share
(and redemption price) -- -- -- -- 12.56
Class X Shares
Net Assets $ 3,630,162 $ 1,572,188 $ 2,275,374 $ ,670,081 $ 6,723,690
Shares Outstanding 304,366 112,768 157,065 51,319 545,478
Net Asset Value Per Share(3) $ 11.93 $ 13.94 $ 14.49 $ 13.06 $ 12.33
</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% CDSL 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% CDSL if shares are redeemed within one year from purchase (See Note 3).
See Notes to Financial Statements.
36 ING Domestic Mutual Funds Annual Report/ October 31, 2000
<PAGE> 39
<TABLE>
<CAPTION>
ING ING ING ING ING NATIONAL
TAX EFFICIENT GROWTH & HIGH YIELD INTERMEDIATE TAX-EXEMPT
EQUITY FUND INCOME FUND BOND FUND BOND FUND BOND FUND
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at cost $51,819,682 $38,455,524 $36,575,107 $35,143,972 $ 20,392,077
---------- ---------- ---------- ---------- ----------
Investments in securities, at value $60,393,478 $43,736,697 $35,161,005 $34,961,438 $ 20,757,526
Repurchase agreements, at value 1,386,000 464,000 2,582,000 2,134,000 1,250,000
Cash 18,826 30,439 25,849 46,451 8,982
Receivable for investment securities sold -- 13,525 1,070,778 3,953,415 --
Receivable for fund shares sold 6,642 26,033 574,282 16,660 --
Dividend and interest receivable 39,172 18,382 732,241 484,535 356,456
Prepaid expenses 7,845 7,346 7,246 7,686 3,667
---------- ---------- ---------- ---------- ----------
Total Assets 61,851,963 44,296,422 40,153,401 41,604,185 22,376,631
LIABILITIES:
Payable for investment
securities purchased -- 14,451 493,592 4,326,908 --
Payable to bank -- -- -- -- --
Payable for fund shares redeemed 6,500 15,051 30,359 -- --
Management fee payable 41,965 13,733 10,839 15,266 2,270
Distribution fee payable 14,971 7,193 3,829 4,631 468
Dividend payable -- -- 27,870 2,548 3,218
Other accrued expenses 39,863 57,519 38,762 37,344 28,805
---------- ---------- ---------- ---------- ----------
Total Liabilities 103,299 107,947 605,251 4,386,697 34,761
NET ASSETS $61,748,664 $44,188,475 $39,548,150 $37,217,488 $ 22,341,870
Composition of Net Assets:
Par value of shares of beneficial
interest $ 5,002 $ 3,781 $ 4,283 $ 3,910 $ 2,210
Capital paid in excess of par value 53,441,169 39,284,478 42,867,128 38,778,877
22,076,682
Accumulated net investment income (loss) 82,919 -- 447 -- 229
Accumulated net realized gain (loss) (354,222) (380,957) (1,909,606) (1,382,765) (102,700)
Net unrealized appreciation
(depreciation) of investments and
foreign currencies 8,573,796 5,281,173 (1,414,102) (182,534) 365,449
NET ASSETS $61,748,664 $44,188,475 $39,548,150 $37,217,488 $ 22,341,870
Class A Shares
Net Assets $47,647,031 $37,553,766 $33,220,324 $29,892,908 $ 21,591,511
Shares Outstanding 3,852,072 3,207,521 3,597,139 3,140,401 2,135,898
Net Asset Value Per Share
(and redemption price) $ 12.37 $ 11.71 $ 9.24 $ 9.52 $ 10.11
Maximum Public Offering Price $ 13.12(1) $ 12.42(1) $ 9.70(2) $ 9.99(2) $ 10.61(2)
Class B Shares
Net Assets $ 8,268,156 $ 2,673,454 $ 3,702,006 $ 1,522,510 $ 311,343
Shares Outstanding 673,158 231,146 400,919 160,010 30,843
Net Asset Value Per Share(3) $ 12.28 $ 11.57 $ 9.23 $ 9.52 $ 10.09
Class C Shares
Net Assets $ 2,870,173 $ 1,935,432 $ 1,578,136 $ 5,247,934 $ 439,016
Shares Outstanding 235,168 167,030 170,918 551,204 43,444
Net Asset Value Per Share(4) $ 12.20 $ 11.59 $ 9.23 $ 9.52 $ 10.11
Class I Shares
Net Assets -- -- -- -- --
Shares Outstanding -- -- -- -- --
Net Asset Value Per Share
(and redemption price) -- -- -- -- --
Class X Shares
Net Assets $ 2,963,304 $ 2,025,823 $ 1,047,684 $ 554,136 --
Shares Outstanding 241,449 175,020 113,536 58,227 --
Net Asset Value Per Share(3) $ 12.27 $ 11.57 $ 9.23 $ 9.52 --
</TABLE>
ING Domestic Mutual Funds Annual Report/October 31, 2000 37
<PAGE> 40
FOR THE YEAR ENDED OCTOBER 31, 2000
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
ING ING ING
INTERNET SMALL CAP FOCUS
FUND GROWTH FUND FUND
---------------------------------------------------------------------------------------------
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest $ 191,080 $ 296,605 $ 384,698
Dividend -- 49,355 496,596
Less: foreign withholding tax -- (249) --
------------ ------------ ------------
Total income 191,080 345,711 881,294
EXPENSES:
Management fees (Note 3) 2,126,079 523,848 619,625
Distribution fees (Note 3) 1,053,885 277,881 330,849
Transfer agent fees (Note 3) 981,081 191,229 229,038
Shareholder services fees (Note 3) 425,110 130,955 154,909
Registration fees 100,411 49,648 55,272
Fund accounting fees 44,455 49,694 45,695
Professional fees 44,049 26,837 29,919
Reports to shareholders 59,210 20,154 24,132
Custodian fees 38,151 25,357 16,532
Trustees' fees 6,184 5,070 5,272
Other expenses 24,476 9,902 12,256
------------ ------------ ------------
Total expenses 4,903,091 1,310,575 1,523,499
------------ ------------ ------------
Expenses waived and reimbursed by
Manager and Distributor (Note 3) (1,866,267) (518,763) (605,620)
---------- -------- --------
Net expenses 3,036,824 791,812 917,879
NET INVESTMENT INCOME (LOSS) (2,845,744) (446,101) (36,585)
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES (NOTE 4):
Realized gain (loss) from:
Security transactions 15,183,518 7,308,218 3,165,086
Foreign currency transactions (18,782) (21,496) --
NET REALIZED GAIN (LOSS) 15,164,736 7,286,722 3,165,086
Net change in unrealized
appreciation (depreciation) from:
Investments (56,248,640) (212,994) 7,089,458
Foreign currencies -- (11) --
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) (56,248,640) (213,005) 7,089,458
Net realized and unrealized gain
(loss) on investments
and foreign currencies (41,083,904) 7,073,717 10,254,544
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $(43,929,648) $ 6,627,616 $ 10,217,959
</TABLE>
1. Commenced operations on November 8, 1999.
See Notes To Financial Statements.
38 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 41
<TABLE>
<CAPTION>
ING ING ING ING ING
MID CAP LARGE CAP TAX EFFICIENT GROWTH & HIGH YIELD
GROWTH FUND GROWTH FUND EQUITY FUND INCOME FUND BOND FUND
---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
<S> <C> <C> <C> <C> <C>
Interest $ 72,479 $ 163,945 $ 336,224 $ 47,958 $ 3,908,649
Dividend 65,802 356,979 711,701 457,929 --
Less: foreign withholding tax -- -- -- -- --
----------- ---------- ----------- ----------- -----------
Total income 138,281 520,924 1,047,925 505,887 3,908,649
EXPENSES:
Management fees (Note 3) 379,530 633,296 501,862 330,680 259,537
Distribution fees (Note 3) 196,705 495,026 349,050 234,059 213,443
Transfer agent fees (Note 3) 125,478 311,439 229,345 160,527 128,385
Shareholder services fees (Note 3) 94,760 210,778 156,845 110,227 99,815
Registration fees 48,438 64,736 50,532 48,631 49,295
Fund accounting fees 48,580 46,852 49,236 48,293 48,247
Professional fees 24,918 31,614 30,414 26,444 27,374
Reports to shareholders 15,863 31,379 26,917 18,917 23,455
Custodian fees 17,459 18,782 16,150 19,479 11,464
Trustees' fees 4,905 5,644 5,444 5,043 4,949
Other expenses 8,112 15,578 13,923 9,683 8,935
----------- ---------- ----------- ----------- -----------
Total expenses 964,748 1,865,124 1,429,718 1,011,983 874,899
----------- ---------- ----------- ----------- -----------
Expenses waived and reimbursed by
Manager and Distributor (Note 3) (380,841) (605,874) (517,049) (395,443) (417,377)
----------- ---------- ----------- ----------- -----------
Net expenses 583,907 1,259,250 912,669 616,540 457,522
NET INVESTMENT INCOME (LOSS) (445,626) (738,326) 135,256 (110,653) 3,451,127
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES (NOTE 4):
Realized gain (loss) from:
Security transactions 963,371 2,750,679 (346,870) (380,957) (1,738,019)
Foreign currency transactions -- -- -- -- --
NET REALIZED GAIN (LOSS) 963,371 2,750,679 (346,870) (380,957) (1,738,019)
Net change in unrealized
appreciation (depreciation) from:
Investments 7,659,969 176,464 2,162,263 1,388,574 (1,140,527)
Foreign currencies -- -- -- -- --
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) 7,659,969 176,464 2,162,263 1,388,574 (1,140,527)
Net realized and unrealized gain
(loss) on investments
and foreign currencies 8,623,340 2,927,143 1,815,393 1,007,617 (2,878,546)
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $ 8,177,714 $2,188,817 $ 1,950,649 $ 896,964 $ 572,581
</TABLE>
<TABLE>
<CAPTION>
ING ING NATIONAL
INTERMEDIATE TAX-EXEMPT
BOND FUND BOND FUND(1)
----------------------------------------------------------------------------------
INVESTMENT INCOME:
<S> <C> <C>
Interest $ 2,732,297 $ 1,194,627
Dividend -- --
Less: foreign withholding tax -- --
----------- -----------
Total income 2,732,297 1,194,627
EXPENSES:
Management fees (Note 3) 182,829 101,496
Distribution fees (Note 3) 196,111 104,444
Transfer agent fees (Note 3) 119,870 55,554
Shareholder services fees (Note 3) 91,401 50,893
Registration fees 49,549 30,803
Fund accounting fees 48,105 44,542
Professional fees 25,976 14,999
Reports to shareholders 22,299 8,415
Custodian fees 23,439 14,319
Trustees' fees 4,930 4,190
Other expenses 8,945 1,681
----------- -----------
Total expenses 773,454 431,336
----------- -----------
Expenses waived and reimbursed by
Manager and Distributor (Note 3) (370,293) (234,950)
-------- --------
Net expenses 403,161 196,386
NET INVESTMENT INCOME (LOSS) 2,329,136 998,241
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES (NOTE 4):
Realized gain (loss) from:
Security transactions (143,795) (102,700)
Foreign currency transactions -- --
NET REALIZED GAIN (LOSS) (143,795) (102,700)
Net change in unrealized
appreciation (depreciation) from:
Investments 538,098 365,449
Foreign currencies -- --
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) 538,098 365,449
Net realized and unrealized gain
(loss) on investments
and foreign currencies 394,303 262,749
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $ 2,723,439 $ 1,260,990
</TABLE>
ING Domestic Mutual Funds Annual Report / October 31, 2000 39
<PAGE> 42
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ING INTERNET FUND ING SMALL CAP GROWTH FUND
----------------------------------------------------------------------------------------------------------------------------------
Year Ended Period Ended Year Ended Period Ended
October 31, 2000 October 31, 1999(1) October 31, 2000 October 31, 1999(2)
------------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Net investment income (loss) $ (2,845,744) $ (120,597) $ (446,101) $ (226,461)
Net realized gain (loss) on investments
and foreign currencies 15,164,736 1,376,324 7,286,722 (1,580,276)
Net change in unrealized appreciation
(depreciation) (56,248,640) 9,749,365 (213,005) 5,351,933
------------- ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (43,929,648) 11,005,092 6,627,616 3,545,196
------------- ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares -- -- -- --
Class B shares -- -- -- --
Class C shares -- -- -- --
Class I shares -- -- -- --
Class X shares -- -- -- --
------------- ------------ ------------ ------------
-- -- -- --
------------- ------------ ------------ ------------
Capital Gain
Class A shares (922,425) -- -- --
Class B shares (449,215) -- -- --
Class C shares (222,063) -- -- --
Class I shares -- -- -- --
Class X shares (30,537) -- -- --
------------- ------------ ------------ ------------
(1,624,240) -- -- --
------------- ------------ ------------ ------------
TOTAL DISTRIBUTIONS PAID (1,624,240) -- -- --
------------- ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares
Class A shares 133,092,443 31,032,102 29,014,681 27,733,436
Class B shares 65,415,898 12,538,049 3,320,124 720,182
Class C shares 32,803,757 4,757,431 3,114,114 388,119
Class I shares -- -- -- --
Class X shares 5,054,969 855,683 1,161,350 533,637
------------- ------------ ------------ ------------
236,367,067 49,183,265 36,610,269 29,375,374
------------- ------------ ------------ ------------
Dividend reinvestments
Class A shares 862,682 -- -- --
Class B shares 428,895 -- -- --
Class C shares 215,340 -- -- --
Class I shares -- -- -- --
Class X shares 29,961 -- -- --
------------- ------------ ------------ ------------
1,536,878 -- -- --
------------- ------------ ------------ ------------
Cost of shares repurchased
Class A shares (94,511,228) (2,306,139) (24,429,979) (1,281,046)
Class B shares (23,631,325) (458,465) (571,684) (14,674)
Class C shares (11,245,970) (408,839) (759,712) (2,855)
Class I shares -- -- -- --
Class X shares (757,632) (6,000) (108,714) (12,227)
------------- ------------ ------------ ------------
(130,146,155) (3,179,443) (25,870,089) (1,310,802)
------------- ------------ ------------ ------------
NET INCREASE IN NET ASSETS
FROM CAPITAL SHARE
TRANSACTIONS 107,757,790 46,003,822 10,740,180 28,064,572
INCREASE IN NET ASSETS 62,203,902 57,008,914 17,367,796 31,609,768
NET ASSETS:
Beginning of year 57,016,464 7,550 31,616,911 7,143
END OF YEAR* $ 119,220,366 $ 57,016,464 $ 48,984,707 $ 31,616,911
*Including net undistributed
investment income of: $ -- $ -- $ -- $ --
</TABLE>
<TABLE>
<CAPTION>
ING FOCUS FUND
---------------------------------------------------------------------------------------
Year Ended Period Ended
October 31, 2000 October 31, 1999(2)
--------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Net investment income (loss) $ (36,585) $ (81,403)
Net realized gain (loss) on investments
and foreign currencies 3,165,086 1,444,110
Net change in unrealized appreciation
(depreciation) 7,089,458 5,349,184
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 10,217,959 6,711,891
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares -- --
Class B shares -- --
Class C shares -- --
Class I shares -- --
Class X shares -- --
------------ ------------
-- --
------------ ------------
Capital Gain
Class A shares (1,231,430) --
Class B shares (109,915) --
Class C shares (39,872) --
Class I shares -- --
Class X shares (42,320) --
------------ ------------
(1,423,537) --
------------ ------------
TOTAL DISTRIBUTIONS PAID (1,423,537) --
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares
Class A shares 29,723,910 30,105,049
Class B shares 2,656,944 3,195,205
Class C shares 2,229,348 963,946
Class I shares -- --
Class X shares 1,120,570 1,057,689
------------ ------------
35,730,772 35,321,889
------------ ------------
Dividend reinvestments
Class A shares 1,200,818 --
Class B shares 89,817 --
Class C shares 34,925 --
Class I shares -- --
Class X shares 42,323 --
------------ ------------
1,367,883 --
------------ ------------
Cost of shares repurchased
Class A shares (13,497,372) (823,282)
Class B shares (832,155) (331,601)
Class C shares (624,361) (23,655)
Class I shares -- --
Class X shares (240,378) (3,513)
------------ ------------
(15,194,266) (1,182,051)
------------ ------------
NET INCREASE IN NET ASSETS
FROM CAPITAL SHARE
TRANSACTIONS 21,904,389 34,139,838
INCREASE IN NET ASSETS 30,698,811 40,851,729
NET ASSETS:
Beginning of year 40,858,872 7,143
END OF YEAR* $ 71,557,683 $ 40,858,872
*Including net undistributed
investment income of: $ -- $ --
</TABLE>
1. Commenced operations on July 1, 1999.
2. Commenced operations on December 15, 1998.
See Notes to Financial Statements.
40 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 43
<TABLE>
<CAPTION>
ING MID CAP GROWTH FUND ING LARGE CAP GROWTH FUND
-----------------------------------------------------------------------------------
Year Ended Period Ended Year Ended Period Ended
October 31, 2000 October 31, 1999(2) October 31, 2000 October 31, 1999(2)
---------------- ------------------- -------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Net investment income (loss) $ (445,626) $ (91,208) $ (738,326) $ (182,682)
Net realized gain (loss) on investments
and foreign currencies 963,371 (2,076,959) 2,750,679 (1,396,880)
Net change in unrealized appreciation
(depreciation) 7,659,969 3,192,713 176,464 7,281,272
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 8,177,714 1,024,546 2,188,817 5,701,710
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares -- -- -- --
Class B shares -- -- -- --
Class C shares -- -- -- --
Class I shares -- -- -- --
Class X shares -- -- -- --
------------ ------------ ------------ ------------
-- -- -- --
------------ ------------ ------------ ------------
Capital Gain
Class A shares -- -- -- --
Class B shares -- -- -- --
Class C shares -- -- -- --
Class I shares -- -- -- --
Class X shares -- -- -- --
------------ ------------ ------------ ------------
-- -- -- --
------------ ------------ ------------ ------------
TOTAL DISTRIBUTIONS PAID -- -- -- --
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 4,247,135 27,612,489 24,535,101 33,983,244
Class A shares 2,015,705 646,218 4,255,316 3,743,914
Class B shares 909,276 385,487 10,882,599 10,475,479
Class C shares 17,447 414,531 137,209 49,138
Class I shares 446,541 329,944 1,895,411 4,974,893
Class X shares ------------ ------------ ------------ ------------
7,636,104 29,388,669 41,705,636 53,226,668
------------ ------------ ------------ ------------
Dividend reinvestments -- -- -- --
Class A shares -- -- -- --
Class B shares -- -- -- --
Class C shares -- -- -- --
Class I shares -- -- -- --
Class X shares ------------ ------------ ------------ ------------
-- -- -- --
------------ ------------ ------------ ------------
Cost of shares repurchased (1,077,637) (559,344) (8,883,477) (1,383,990)
Class A shares (320,648) (9,976) (1,032,951) (44,163)
Class B shares (117,557) (2,855) (3,078,661) (118,613)
Class C shares (465,783) (3,267) -- --
Class I shares (204,854) (8,660) (513,417) (123,341)
Class X shares ------------ ------------ ------------ ------------
(2,186,479) (584,102) (13,508,506) (1,670,107)
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS 5,449,625 28,804,567 28,197,130 51,556,561
FROM CAPITAL SHARE
TRANSACTIONS
13,627,339 29,829,113 30,385,947 57,258,271
INCREASE IN NET ASSETS
NET ASSETS: 29,836,256 7,143 57,265,414 7,143
Beginning of year
END OF YEAR* $ 43,463,595 $ 29,836,256 $ 87,651,361 $ 57,265,414
*Including net undistributed
investment income of: $ -- $ -- $ -- $ --
</TABLE>
<TABLE>
<CAPTION>
ING TAX EFFICIENT EQUITY FUND ING GROWTH & INCOME FUND
--------------------------------------------------------------------------------
Year Ended Period Ended Year Ended Period Ended
October 31, 2000 October 31, 1999(2) October 31, 2000 October 31, 1999(2)
------------------------------------- --------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Net investment income (loss) $ 135,256 $ 157,443 $ (110,653) $ 29,424
Net realized gain (loss) on investments
and foreign currencies (346,870) (7,352) (380,957) 88,071
Net change in unrealized appreciation
(depreciation) 2,162,263 6,411,533 1,388,574 3,892,599
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 1,950,649 6,561,624 896,964 4,010,094
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares (204,514) -- (22,878) (36,973)
Class B shares (19,959) -- -- (403)
Class C shares (8,313) -- -- (75)
Class I shares -- -- -- --
Class X shares (856) -- (28) (616)
------------ ------------ ------------ ------------
(233,642) -- (22,906) (38,067)
------------ ------------ ------------ ------------
Capital Gain
Class A shares -- -- (78,779) --
Class B shares -- -- (3,062) --
Class C shares -- -- (2,720) --
Class I shares -- -- -- --
Class X shares -- -- (3,759) --
------------ ------------ ------------ ------------
-- -- (88,320) --
------------ ------------ ------------ ------------
TOTAL DISTRIBUTIONS PAID (233,642) -- (111,226) (38,067)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares 7,093,779 41,141,495 6,259,029 31,362,914
Class A shares 3,257,580 6,877,202 1,959,879 1,118,285
Class B shares 2,844,483 1,246,004 1,496,348 830,860
Class C shares -- -- -- --
Class I shares 361,122 3,083,700 733,681 1,487,100
Class X shares ------------ ------------ ------------ ------------
13,556,964 52,348,401 10,448,937 34,799,159
------------ ------------ ------------ ------------
Dividend reinvestments 199,162 -- 100,476 36,868
Class A shares 19,626 -- 3,036 388
Class B shares 8,257 -- 2,564 74
Class C shares -- -- -- --
Class I shares 865 -- 3,792 616
Class X shares ------------ ------------ ------------ ------------
227,910 -- 109,868 37,946
------------ ------------ ------------ ------------
Cost of shares repurchased (6,821,496) (1,419,922) (4,556,148) (279,659)
Class A shares (2,248,794) (156,928) (410,748) (28,455)
Class B shares (1,194,399) (46,936) (409,133) (6,897)
Class C shares -- -- -- --
Class I shares (573,617) (208,293) (200,702) (80,601)
Class X shares ------------ ------------ ------------ ------------
(10,838,306) (1,832,079) (5,576,731) (395,612)
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS 2,946,568 50,516,322 4,982,074 34,441,493
FROM CAPITAL SHARE
TRANSACTIONS
4,663,575 57,077,946 5,767,812 38,413,520
INCREASE IN NET ASSETS
NET ASSETS: 57,085,089 7,143 38,420,663 7,143
Beginning of year
END OF YEAR* $ 61,748,664 $ 57,085,089 $ 44,188,475 $ 38,420,663
*Including net undistributed
investment income of: $ 82,919 $ 181,305 $ -- $ 15,089
</TABLE>
ING Domestic Mutual Funds Annual Report / October 31, 2000 41
<PAGE> 44
STATEMENTS OF CHANGES IN NET ASSETS
(continued)
<TABLE>
<CAPTION>
ING HIGH YIELD
BOND FUND
---------------------------------------------------------------------------------------------------
Year Ended Period Ended
October 31, 2000 October 31, 1999(1)
---------------- -------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Net investment income $ 3,451,127 $ 1,990,994
Net realized gain (loss) on investments (1,738,019) 42,709
Net change in unrealized appreciation (depreciation) (1,140,527) (273,575)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 572,581 1,760,128
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares (3,026,673) (1,875,514)
Class B shares (259,285) (65,719)
Class C shares (104,775) (19,232)
Class X shares (80,495) (30,529)
------------ ------------
(3,471,228) (1,990,994)
------------ ------------
Capital Gain
Class A shares (186,445) --
Class B shares (16,236) --
Class C shares (6,007) --
Class X shares (5,161) --
------------ ------------
(213,849) --
------------ ------------
TOTAL DISTRIBUTIONS PAID (3,685,077) (1,990,994)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares
Class A shares 7,879,297 29,549,612
Class B shares 2,578,002 2,474,568
Class C shares 1,149,721 784,122
Class X shares 462,208 885,049
------------ ------------
12,069,228 33,693,351
------------ ------------
Dividend reinvestments
Class A shares 3,000,374 1,855,772
Class B shares 169,541 45,149
Class C shares 90,648 17,932
Class X shares 75,035 30,325
------------ ------------
3,335,598 1,949,178
------------ ------------
Cost of shares repurchased
Class A shares (5,535,027) (693,436)
Class B shares (1,156,802) (116,958)
Class C shares (328,499) (19,911)
Class X shares (276,571) (35,782)
------------ ------------
(7,296,899) (866,087)
------------ ------------
NET INCREASE IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS 8,107,927 34,776,442
INCREASE IN NET ASSETS 4,995,431 34,545,576
NET ASSETS:
Beginning of period 34,552,719 7,143
END OF PERIOD* $ 39,548,150 $ 34,552,719
*Including net undistributed
investment income of: $ 447 $ 20,101
</TABLE>
<TABLE>
<CAPTION>
ING NATIONAL
ING INTERMEDIATE TAX-EXEMPT
BOND FUND BOND FUND
---------------------------------------------------------------------------------------------------------------------
Year Ended Period Ended Period Ended,
October 31, 2000 October 31, 1999(1) October 31, 2000(2)
---------------- ------------------- -------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Net investment income $ 2,329,136 $ 1,499,954 $ 998,241
Net realized gain (loss) on investments (143,795) (1,238,970) (102,700)
Net change in unrealized appreciation (depreciation) 538,098 (720,632) 365,449
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 2,723,439 (459,648) 1,260,990
------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares (2,041,049) (1,382,288) (986,356)
Class B shares (101,798) (54,075) (6,239)
Class C shares (163,643) (23,989) (5,646)
Class X shares (42,824) (39,602) --
------------ ------------ ------------
(2,349,314) (1,499,954) (998,241)
------------ ------------ ------------
Capital Gain
Class A shares -- -- --
Class B shares -- -- --
Class C shares -- -- --
Class X shares -- -- --
------------ ------------ ------------
-- -- --
------------ ------------ ------------
TOTAL DISTRIBUTIONS PAID (2,349,314) (1,499,954) (998,241)
------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 8):
Net proceeds from sale of shares
Class A shares 6,951,913 42,274,629 20,400,991
Class B shares 1,832,353 3,175,052 322,416
Class C shares 4,500,995 1,097,966 428,611
Class X shares 341,592 2,271,631 --
------------ ------------ ------------
13,626,853 48,819,278 21,152,018
------------ ------------ ------------
Dividend reinvestments
Class A shares 1,990,945 1,366,772 984,828
Class B shares 95,747 53,854 2,650
Class C shares 157,438 23,450 3,841
Class X shares 42,046 38,177 --
------------ ------------ ------------
2,286,176 1,482,253 991,319
------------ ------------ ------------
Cost of shares repurchased
Class A shares (11,378,033) (9,831,107) (45,034)
Class B shares (2,372,024) (1,197,919) (24,143)
Class C shares (542,480) (11,653) (39)
Class X shares (836,710) (1,248,812) --
------------ ------------ ------------
(15,129,247) (12,289,491) (69,216)
------------ ------------ ------------
NET INCREASE IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS 783,782 38,012,040 22,074,121
INCREASE IN NET ASSETS 1,157,907 36,052,438 22,336,870
NET ASSETS:
Beginning of period 36,059,581 7,143 5,000
END OF PERIOD* $ 37,217,488 $ 36,059,581 $ 22,341,870
*Including net undistributed
investment income of: $ -- $ 20,178 $ 229
</TABLE>
1. Commenced operations on December 15, 1998.
2. Commenced operations on November 8, 1999.
See Notes to Financial Statements.
42 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 45
OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
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 High Yield Bond Fund, ING Intermediate Bond Fund
and ING National Tax-Exempt Bond Fund (the "Funds") are separate investment
portfolios of the ING Funds Trust (the "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, as an open-end management investment company. The Trust consists
of the Funds and seventeen other investment portfolios: the ING U.S.
Treasury Money Market Fund, ING Money Market Fund, ING National Tax-Exempt
Money Market Fund, ING International Bond Fund, ING Mortgage Income Fund,
ING Stable Value Fund, ING Global Brand Names Fund, ING International Equity
Fund, ING European Equity Fund, ING Tax Efficient Equity Value Fund, ING
Global Information Technology Fund, ING Global Communications Fund, ING
Internet Fund II, ING Balanced Fund, ING Emerging Markets Equity Fund, ING
Global Real Estate Fund and ING Quality of Life Fund. The financial
statements and financial highlights of the other funds are presented in
separate annual reports except for the ING U.S. Treasury Money Market Fund,
ING National Tax-Exempt Money Market Fund, ING Mortgage Income Fund, ING
Stable Value Fund, ING Tax Efficient Equity Value Fund, ING Internet Fund
II, ING Balanced Fund, ING Global Real Estate Fund and ING Quality of Life
Fund, which have not commenced operations. The Funds, except for the ING
National Tax-Exempt Bond Fund, offer 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.
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.
ING Domestic Mutual Funds Annual Report / October 31, 2000 43
<PAGE> 46
OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS
(continued)
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.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS The Funds, except for the
ING National Tax-Exempt Bond 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 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 contracts with respect to the
potential inability of counterparties to meet the terms of their contracts.
A forward foreign currency 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 Intermediate Bond Fund, ING High Yield
Bond Fund and ING National Tax-Exempt Bond Fund declare daily dividends 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 Tax Efficient Equity Fund, ING Focus
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 which may differ from generally accepted accounting principles.
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.
44 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 47
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") 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 Furman Selz Capital Management LLC 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 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 National Tax-Exempt Bond Fund Furman Selz Capital Management LLC 0.50 0.250
</TABLE>
For the period ended October 31, 2000, the Manager and the
Sub-Advisers were entitled to and 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 $2,126,079 $1,426,936 $1,063,040 $713,468
ING Small Cap Growth Fund 523,848 283,466 261,924 141,733
ING Focus Fund 619,625 335,330 309,813 167,665
ING Mid Cap Growth Fund 379,530 206,459 189,765 103,230
ING Large Cap Growth Fund 633,296 344,025 316,648 172,013
ING Tax Efficient Equity Fund 501,862 276,398 250,931 138,199
ING Growth & Income Fund 330,680 181,663 165,340 90,832
ING High Yield Bond Fund 259,537 142,978 129,769 71,489
ING Intermediate Bond Fund 182,829 101,529 91,415 50,765
ING National Tax-Exempt Bond Fund 101,496 76,122 50,748 38,061
</TABLE>
ING Domestic Mutual Funds Annual Report / October 31, 2000 45
<PAGE> 48
OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS
(continued)
In addition, for the period ended October 31, 2000, the Manager has agreed
to reimburse expenses amounting to $25,133 for ING Small Cap Growth Fund,
$25,106 for ING Focus Fund, $15,311 for ING Mid Cap Growth Fund, $14,909 for
the ING Tax Efficient Equity Fund, $37,138 for ING Growth & Income Fund,
$42,503 for ING High Yield Bond Fund, $57,742 for ING Intermediate Bond Fund
and $26,094 for ING National Tax-Exempt Bond 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.
For the period ended October 31, 2000, the Distributor 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 $1,053,885 $354,309 $425,110
ING Small Cap Growth Fund 277,881 183,973 130,955
ING Focus Fund 330,849 214,203 154,909
ING Mid Cap Growth Fund 196,705 140,119 94,760
ING Large Cap Growth Fund 495,026 219,693 210,778
ING Tax Efficient Equity Fund 349,050 194,373 156,845
ING Growth & Income Fund 234,059 154,596 110,227
ING High Yield Bond Fund 213,443 172,007 99,815
ING Intermediate Bond Fund 196,111 156,182 91,401
ING National Tax-Exempt Bond Fund 104,444 102,198 50,893
</TABLE>
In addition, the Distributor collects sales charges imposed on sales of each
Fund's Class A shares and reallows a portion of such charges to dealers
through which the sales are made. There is also a contingent deferred sales
load ("CDSL") 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% CDSL if redeemed within one year of purchase.
For the period ended October 31, 2000, sales charges and CDSL's paid to the
Distributor were approximately:
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares Class X Shares
Fund Name Sales Charges CDSL CDSL CDSL
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ING Internet Fund $3,705,324 $411,949 $68,005 $10,127
ING Small Cap Growth Fund 147,727 4,548 1,742 2,109
ING Focus Fund 138,263 11,933 3,524 1,267
ING Mid Cap Growth Fund 91,439 5,281 255 207
ING Large Cap Growth Fund 174,359 19,335 10,473 10,471
ING Tax Efficient Equity Fund 152,686 37,685 4,924 613
ING Growth & Income Fund 134,869 6,356 1,760 2,556
ING High Yield Bond Fund 67,291 32,254 566 1,374
ING Intermediate Bond Fund 46,510 7,957 2,822 3,233
ING National Tax-Exempt Bond Fund 13,247 -- -- --
</TABLE>
46 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 49
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.
For the period ended October 31, 2000, ING Fund Services waived part of the
account servicing fees. The account servicing fees ING Fund Services was
entitled and waived are indicated below:
<TABLE>
<CAPTION>
Account Servicing Fee Account Servicing Fee
Fund Name Entitled Waived
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ING Internet Fund $425,110 $85,022
ING Small Cap Growth Fund 130,955 26,191
ING Focus Fund 154,909 30,981
ING Mid Cap Growth Fund 94,760 18,952
ING Large Cap Growth Fund 210,778 42,156
ING Tax Efficient Equity Fund 156,845 31,369
ING Growth & Income Fund 110,227 22,046
ING High Yield Bond Fund 99,815 59,889
ING Intermediate Bond Fund 91,401 54,840
ING National Tax-Exempt Bond Fund 50,893 30,536
</TABLE>
As of October 31, 2000, ING America Insurance Holdings, Inc.
owned more than 5% of the shares outstanding of each Fund's
Class A shares listed below.
<TABLE>
<CAPTION>
Percentage of
Fund Name Shares Outstanding
--------------------------------------------------------------------------------------------------------------------------
<S> <C>
ING Small Cap Growth Fund 84.7%
ING Focus Fund 60.3%
ING Mid Cap Growth Fund 84.9%
ING Large Cap Growth Fund 57.1%
ING Tax Efficient Equity Fund 64.9%
ING Growth & Income Fund 77.9%
ING High Yield Bond Fund 81.5%
ING Intermediate Bond Fund 89.1%
ING National Tax-Exempt Bond Fund 98.3%
</TABLE>
4. INVESTMENTS IN SECURITIES
The aggregate cost of purchases and proceeds from sales of investments
(including maturities, but excluding short-term securities) for the period
ended October 31, 2000 and the aggregate gross unrealized appreciation and
depreciation of investments for U.S. federal income tax purpose at October
31, 2000 were as follows:
<TABLE>
<CAPTION>
Net Unrealized
Unrealized Unrealized Appreciation/
Fund Name Purchases Sales Appreciation Depreciation (Depreciation)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ING Internet Fund $283,492,494 $179,019,450 $ 9,290,620 $61,497,212 $(52,206,592)
ING Small Cap Growth Fund 160,790,860 156,972,080 9,160,542 4,392,098 4,768,444
ING Focus Fund 54,583,440 34,769,334 13,977,118 1,586,596 12,390,522
ING Mid Cap Growth Fund 35,408,877 31,572,823 13,131,229 2,278,547 10,852,682
ING Large Cap Growth Fund 102,197,468 74,611,499 14,106,485 6,683,723 7,422,762
ING Tax Efficient Equity Fund 18,283,226 8,113,650 12,899,454 4,325,658 8,573,796
ING Growth & Income Fund 37,505,885 32,752,839 7,721,735 2,507,026 5,214,709
ING High Yield Bond Fund 180,112,332 174,554,329 400,149 2,003,818 (1,603,669)
ING Intermediate Bond Fund 256,195,025 255,681,043 42,622 629,836 (587,214)
ING National Tax-Exempt Bond Fund 29,768,576 9,269,975 406,456 41,007 365,449
</TABLE>
ING Domestic Mutual Funds Annual Report / October 31, 2000 47
<PAGE> 50
OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS
(continued)
5. 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 National Tax-Exempt Bond 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 Internet 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 concentrates its assets in
securities related to a particular industry. As a result, the Fund may be
subject to greater market fluctuation than a fund which has securities
representing a broader range of investment alternatives.
6. 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. If the seller should default on its obligation to repurchase the
securities, the Fund may experience a loss of income from the loaned
securities and a decrease in the value of any collateral, problems in
exercising its rights to the underlying securities and costs and time
delays in connection with the disposition of securities.
48 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 51
7. 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 follow:
<TABLE>
<CAPTION>
Undistributed Net Undistributed Net Paid-In
Fund Name Investment Income Realized Gains and Losses Capital
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ING Internet Fund $2,845,744 $(2,845,744) $ --
---------------------------------------------------------------------------------------------------------------------------
ING Small Cap Growth Fund 446,101 (445,507) (594)
---------------------------------------------------------------------------------------------------------------------------
ING Focus Fund 36,585 (36,585) --
---------------------------------------------------------------------------------------------------------------------------
ING Mid Cap Growth Fund 445,626 -- (445,626)
---------------------------------------------------------------------------------------------------------------------------
ING Large Cap Growth Fund 738,326 -- (738,326)
---------------------------------------------------------------------------------------------------------------------------
ING Growth & Income Fund 118,470 249 (118,719)
---------------------------------------------------------------------------------------------------------------------------
ING High Yield Bond Fund 447 (447) --
---------------------------------------------------------------------------------------------------------------------------
ING National Tax-Exempt Bond Fund 229 -- (229)
</TABLE>
At October 31, 2000, ING Mid Cap Growth Fund, ING Tax Efficient Equity
Fund, ING Growth & Income Fund, ING High Yield Bond Fund, ING
Intermediate Bond Fund and ING National Tax-Exempt 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 Mid Cap Growth Fund $1,113,588 October 31, 2007
--------------------------------------------------------------------------------
ING Tax Efficient Equity Fund 7,352 October 31, 2007
--------------------------------------------------------------------------------
ING Tax Efficient Equity Fund 346,870 October 31, 2008
--------------------------------------------------------------------------------
ING Growth & Income Fund 314,493 October 31, 2008
--------------------------------------------------------------------------------
ING High Yield Bond Fund 1,720,039 October 31, 2008
--------------------------------------------------------------------------------
ING Intermediate Bond Fund 978,085 October 31, 2007
--------------------------------------------------------------------------------
ING National Tax-Exempt Bond Fund 102,700 October 31, 2008
</TABLE>
8. SHARES OF BENEFICIAL INTEREST
At October 31, 2000, 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.
ING Domestic Mutual Funds Annual Report/October 31, 2000 49
<PAGE> 52
OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS
(continued)
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
ING INTERNET FUND(1)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31/00 Period Ended 10/31/99
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHARES SOLD
Class A 7,084,996 $ 133,092,443 3,045,309 $ 31,032,102
Class B 3,275,974 65,415,898 1,217,308 12,538,049
Class C 1,678,073 32,803,757 454,931 4,757,431
Class X 258,123 5,054,969 84,230 855,683
------------------------------------------------------------------------------------------------------------------------------------
SHARES ISSUED ON
REINVESTMENT
Class A 41,811 $ 862,682 -- --
Class B 20,949 428,895 -- --
Class C 10,469 215,340 -- --
Class X 1,458 29,961 -- --
------------------------------------------------------------------------------------------------------------------------------------
SHARES REDEEMED
Class A (5,034,916) $ (94,511,228) (219,359) $ (2,306,139)
Class B (1,223,523) (23,631,325) (40,458) (458,465)
Class C (621,277) (11,245,970) (36,518) (408,839)
Class X (39,130) (757,632) (570) (6,000)
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE
Class A 2,091,891 $ 39,443,897 2,825,950 $ 28,725,963
Class B 2,073,400 42,213,468 1,176,850 12,079,584
Class C 1,067,265 21,773,127 418,413 4,348,592
Class X 220,451 4,327,298 83,660 849,683
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commenced operations on July 1, 1999.
<TABLE>
<CAPTION>
ING FOCUS FUND(1)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31/00 Period Ended 10/31/99
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHARES SOLD
Class A 2,182,745 $ 29,723,910 2,922,599 $ 30,105,049
Class B 198,401 2,656,944 266,465 3,195,205
Class C 166,219 2,229,348 80,003 963,946
Class X 82,220 1,120,570 89,863 1,057,689
------------------------------------------------------------------------------------------------------------------------------------
SHARES ISSUED ON
REINVESTMENT
Class A 91,246 $ 1,200,818 -- --
Class B 6,865 89,817 -- --
Class C 2,675 34,925 -- --
Class X 3,241 42,323 -- --
------------------------------------------------------------------------------------------------------------------------------------
SHARES REDEEMED
Class A (983,936) $(13,497,372) (69,444) $ (823,282)
Class B (62,434) (832,155) (27,545) (331,601)
Class C (46,328) (624,361) (1,989) (23,655)
Class X (17,961) (240,378) (298) (3,513)
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE
Class A 1,290,055 $ 17,427,356 2,853,155 $ 29,281,767
Class B 142,832 1,914,606 238,920 2,863,604
Class C 122,566 1,639,912 78,014 940,291
Class X 67,500 922,515 89,565 1,054,176
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class A, B and C shares commenced operations on December 15, 1998.
Class X shares commenced offering on January 12, 1999.
<TABLE>
<CAPTION>
ING SMALL CAP GROWTH FUND(1)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31/00 Period Ended 10/31/99
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHARES SOLD
Class A 1,980,621 $ 29,014,681 2,756,698 $ 27,733,436
Class B 196,012 3,320,124 68,717 720,182
Class C 194,015 3,114,114 37,625 388,119
Class X 69,366 1,161,350 51,926 533,637
------------------------------------------------------------------------------------------------------------------------------------
SHARES ISSUED ON
REINVESTMENT
Class A -- -- -- --
Class B -- -- -- --
Class C -- -- -- --
Class X -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
SHARES REDEEMED
Class A (1,665,597) $(24,429,979) (120,009) $ (1,281,046)
Class B (33,914) (571,684) (1,347) (14,674)
Class C (46,812) (759,712) (270) (2,855)
Class X (7,375) (108,714) (1,149) (12,227)
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE
Class A 315,024 $ 4,584,702 2,636,689 $ 26,452,390
Class B 162,098 2,748,440 67,370 705,508
Class C 147,203 2,354,402 37,355 385,264
Class X 61,991 1,052,636 50,777 521,410
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class A, B and C shares commenced operations on December 15, 1998.
Class X shares commenced offering on January 11, 1999.
<TABLE>
<CAPTION>
ING MID CAP GROWTH FUND(1)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31/00 Period Ended 10/31/99
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHARES SOLD
Class A 330,450 $ 4,247,135 2,753,482 $ 27,612,489
Class B 158,492 2,015,705 63,976 646,218
Class C 71,585 909,276 37,952 385,487
Class I 1,594 17,447 40,383 414,531
Class X 28,188 446,541 33,054 329,944
------------------------------------------------------------------------------------------------------------------------------------
SHARES ISSUED ON
REINVESTMENT
Class A -- -- -- --
Class B -- -- -- --
Class C -- -- -- --
Class I -- -- -- --
Class X -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
SHARES REDEEMED
Class A (85,568) $ (1,077,637) (54,675) $ (559,344)
Class B (25,076) (320,648) (957) (9,976)
Class C (9,357) (117,557) (283) (2,855)
Class I (41,647) (465,783) (330) (3,267)
Class X (9,105) (204,854) (818) (8,660)
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE
Class A 244,882 $ 3,169,498 2,698,807 $ 27,053,145
Class B 133,416 1,695,057 63,019 636,242
Class C 62,228 791,719 37,669 382,632
Class I (40,053) (448,336) 40,053 411,264
Class X 19,083 241,687 32,236 321,284
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class A, B and C shares commenced operations on December 15, 1998.
Class I shares commenced offering on July 29, 1999.
Class X shares commenced offering on January 19, 1999.
50 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 53
<TABLE>
<CAPTION>
ING LARGE CAP GROWTH FUND(1)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31/00 Period Ended 10/31/99
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------------------
SHARES SOLD
<S> <C> <C> <C> <C>
Class A 1,892,498 $ 24,535,101 3,303,263 $ 33,983,244
Class B 334,062 4,255,316 335,562 3,743,914
Class C 853,082 10,882,599 921,262 10,475,479
Class I 10,485 137,209 4,312 49,138
Class X 149,250 1,895,411 446,082 4,974,893
------------------------------------------------------------------------------------------------------------------------------------
SHARES ISSUED ON
REINVESTMENT
Class A -- -- -- --
Class B -- -- -- --
Class C -- -- -- --
Class I -- -- -- --
Class X -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
SHARES REDEEMED
Class A (691,725) $ (8,883,477) (123,646) $ (1,383,990)
Class B (79,342) (1,032,951) (3,803) (44,163)
Class C (238,207) (3,078,661) (10,849) (118,613)
Class I -- -- -- --
Class X (39,064) (513,417) (10,790) (123,341)
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE
Class A 1,200,773 $ 15,651,624 3,179,617 $ 32,599,254
Class B 254,720 3,222,365 331,759 3,699,751
Class C 614,875 7,803,938 910,413 10,356,866
Class I 10,485 137,209 4,312 49,138
Class X 110,186 1,381,994 435,292 4,851,552
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class A, B and C shares commenced operations on December 15, 1998. Class I
shares commenced offering on September 27, 1999. Class X shares commenced
offering on January 11, 1999.
<TABLE>
<CAPTION>
ING GROWTH AND INCOME FUND(1)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31/00 Period Ended 10/31/99
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHARES SOLD
Class A 516,053 $ 6,259,029 3,082,641 $ 31,362,914
Class B 164,050 1,959,879 101,981 1,118,285
Class C 126,804 1,496,348 75,515 830,860
Class X 62,001 733,681 136,848 1,487,100
------------------------------------------------------------------------------------------------------------------------------------
SHARES ISSUED ON
REINVESTMENT
Class A 8,301 $ 100,476 3,398 $ 36,868
Class B 258 3,036 36 388
Class C 218 2,564 7 74
Class X 322 3,792 57 616
------------------------------------------------------------------------------------------------------------------------------------
SHARES REDEEMED
Class A (377,662) $ (4,556,148) (25,448) $ (279,659)
Class B (32,826) (410,748) (2,591) (28,455)
Class C (35,119) (409,133) (633) (6,897)
Class X (16,855) (200,702) (7,353) (80,601)
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE
Class A 146,692 $ 1,803,357 3,060,591 $ 31,120,123
Class B 131,482 1,552,167 99,426 1,090,218
Class C 91,903 1,089,779 74,889 824,037
Class X 45,468 536,771 129,552 1,407,115
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class A, B and C shares commenced operations on December 15, 1998. Class X
shares commenced offering on January 12, 1999.
<TABLE>
<CAPTION>
ING TAX EFFICIENT EQUITY FUND(1)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31/00 Period Ended 10/31/99
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHARES SOLD
Class A 567,268 $ 7,093,779 3,938,486 $ 41,141,495
Class B 276,738 3,257,580 603,425 6,877,202
Class C 228,730 2,844,483 106,384 1,246,004
Class X 29,084 361,122 276,862 3,083,700
------------------------------------------------------------------------------------------------------------------------------------
SHARES ISSUED ON
REINVESTMENT
Class A 16,297 $ 199,162 -- --
Class B 1,609 19,626 -- --
Class C 681 8,257 -- --
Class X 70 865 -- --
------------------------------------------------------------------------------------------------------------------------------------
SHARES REDEEMED
Class A (545,394) $ (6,821,496) (124,823) $ (1,419,922)
Class B (195,405) (2,248,794) (13,447) (156,928)
Class C (96,812) (1,194,399) (4,053) (46,936)
Class X (46,726) (573,617) (17,841) (208,293)
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE
Class A 38,171 $ 471,445 3,813,663 $ 39,721,573
Class B 82,942 1,028,412 589,978 6,720,274
Class C 132,599 1,658,341 102,331 1,199,068
Class X (17,572) (211,630) 259,021 2,875,407
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class A, B and C shares commenced operations on December 15, 1998. Class X
shares commenced offering on January 11, 1999.
<TABLE>
<CAPTION>
ING HIGH YIELD BOND FUND(1)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31/00 Period Ended 10/31/99
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHARES SOLD
Class A 795,930 $ 7,879,297 2,950,126 $ 29,549,612
Class B 263,509 2,578,002 245,269 2,474,568
Class C 117,601 1,149,721 77,919 784,122
Class X 47,258 462,208 87,496 885,049
------------------------------------------------------------------------------------------------------------------------------------
SHARES ISSUED ON
REINVESTMENT
Class A 308,536 $ 3,000,374 184,187 $ 1,855,772
Class B 17,410 169,541 4,506 45,149
Class C 9,355 90,648 1,787 17,932
Class X 8,397 75,035 3,023 30,325
------------------------------------------------------------------------------------------------------------------------------------
SHARES REDEEMED
Class A (572,787) $ (5,535,027) (69,091) $ (693,436)
Class B (118,328) (1,156,802) (11,685) (116,958)
Class C (33,988) (328,499) (1,994) (19,911)
Class X (29,041) (276,571) (3,597) (35,782)
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE
Class A 531,679 $ 5,344,644 3,065,222 $ 30,711,948
Class B 162,591 1,590,741 238,090 2,402,759
Class C 92,968 911,870 77,712 782,143
Class X 26,614 260,672 86,922 879,592
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class A, B and C shares commenced operations on December 15, 1998. Class X
shares commenced offering on January 11, 1999.
ING Domestic Mutual Funds Annual Report/October 31, 2000 51
<PAGE> 54
October 31, 2000
NOTES TO FINANCIAL STATEMENTS
(continued)
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
ING INTERMEDIATE BOND FUND(1)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31/00 Period Ended 10/31/99
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHARES SOLD
Class A 742,508 $ 6,951,913 4,290,518 $ 42,274,629
Class B 197,117 1,832,353 328,463 3,175,052
Class C 479,308 4,500,995 113,633 1,097,966
Class X 35,831 341,592 233,086 2,271,631
------------------------------------------------------------------------------------------------------------------------------------
SHARES ISSUED ON
REINVESTMENT
Class A 210,814 $ 1,990,945 142,631 $ 1,366,772
Class B 9,518 95,747 5,663 53,854
Class C 15,231 157,438 2,468 23,450
Class X 4,185 42,046 4,011 38,177
------------------------------------------------------------------------------------------------------------------------------------
SHARES REDEEMED
Class A (1,217,143) $(11,378,033) (1,029,165) $ (9,831,107)
Class B (254,916) (2,372,024) (126,073) (1,197,919)
Class C (58,433) (542,480) (1,241) (11,653)
Class X (88,834) (836,710) (130,052) (1,248,812)
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE)
Class A (263,821) $ (2,435,175) 3,403,984 $ 33,810,294
Class B (48,281) (443,924) 208,053 2,030,987
Class C 436,106 4,115,953 114,860 1,109,763
Class X (48,818) (453,072) 107,045 1,060,996
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class A, B and C shares commenced operations on December 15, 1998. Class X
shares commenced offering on January 11, 1999.
<TABLE>
<CAPTION>
ING NATIONAL TAX-EXEMPT BOND FUND(1)
--------------------------------------------------------------------------------
Period Ended 10/31/00
Shares Amount
--------------------------------------------------------------------------------
<S> <C> <C>
SHARES SOLD
Class A 2,048,913 $ 20,400,991
Class B 32,812 322,416
Class C 42,818 428,611
--------------------------------------------------------------------------------
SHARES ISSUED ON
REINVESTMENT
Class A 91,486 $ 984,828
Class B 240 2,650
Class C 380 3,841
--------------------------------------------------------------------------------
SHARES REDEEMED
Class A (4,501) $ (45,034)
Class B (2,459) (24,143)
Class C (4) (39)
--------------------------------------------------------------------------------
NET INCREASE
Class A 2,135,898 $ 21,340,785
Class B 30,593 300,923
Class C 43,194 432,413
--------------------------------------------------------------------------------
</TABLE>
(1) Commenced operations on November 8, 1999.
9. SUBSEQUENT EVENTS
ON NOVEMBER 16, 2000, the Board of Trustees of the ING Funds Trust
approved the proposed reorganizations of ING Focus Fund into Pilgrim
LargeCap Growth Fund; ING Large Cap Growth Fund into Pilgrim LargeCap
Growth Fund; ING Growth & Income Fund into Pilgrim Growth and Income
Fund; ING Mid Cap Growth Fund into Pilgrim MidCap Opportunities Fund
and ING Small Cap Growth Fund into Pilgrim SmallCap Opportunities Fund.
The proposed reorganizations are subject to shareholder approval. If
shareholder approval is obtained, it is expected that the
reorganizations will take place in the first quarter of 2001.
EFFECTIVE NOVEMBER 1, 2000, the Funds ceased offering Class X shares to
new and existing investors. Any attempted purchases of Class X shares
will be rejected and the proceeds returned to the investor. It is
anticipated that existing Class X shares will be converted to Class B
shares on or about the close of business on November 17, 2000.
EFFECTIVE NOVEMBER 1, 2000, ING Pilgrim Securities, Inc. ("ING Pilgrim
Securities") became the named distributor of the Funds, and the
distribution agreement between the Funds and ING Funds Distributor,
Inc. terminated. ING Pilgrim Securities is located at 7337 East
Doubletree Ranch Road, Scottsdale, Arizona 85258.
52 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 55
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 schedules 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 High Yield Bond
Fund, ING Intermediate Bond Fund and ING National Tax-Exempt Bond Fund (ten of
the portfolios constituting ING Funds Trust) (collectively, the "Funds") as of
October 31, 2000, and the related statements of operations for the period then
ended and the statements of changes in net assets and financial highlights for
the periods 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 auditing standards generally
accepted in the United States. 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, 2000 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, 2000, the results of their operations for
the period then ended, and the changes in their net assets and their financial
highlights for the periods indicated therein, in conformity with accounting
principles generally accepted in the United States.
[Ernst & Young LLP]
New York, New York
December 5, 2000
ING Domestic Mutual Funds Annual Report/October 31, 2000 53
<PAGE> 56
October 31, 2000 (unaudited)
TAX INFORMATION
In accordance with Federal tax law, ING Small Cap Growth Fund, ING
Focus Fund and ING Tax Efficient Equity Fund hereby designate 53.27%, 30.69% and
100.00%, respectively, of the ordinary dividends paid during the fiscal year
ended October 31, 2000 as qualifying for the corporate dividends received
deduction.
ING National Tax-Exempt Bond Fund designates all the dividends paid
from net investment income during the period ended October 31, 2000 as
"exempt-interest dividends."
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 2001.
54 ING Domestic Mutual Funds Annual Report / October 31, 2000
<PAGE> 57
ING MUTUAL FUNDS
BOARD OF TRUSTEES
Blaine E. Rieke, Chairman of the Board
Joseph N. Hankin
Jack D. Rehm
Richard A. Wedemeyer
OFFICERS
Robert W. Stallings, Chief Executive
Officer and President
James M. Hennessy, Senior Executive
Vice President, Chief Operating Officer
and Secretary
Stanley D. Vyner, Executive Vice President
Mary Lisanti, Executive Vice President
Michael J. Roland, Senior Vice President
Robert S. Naka, Senior Vice President and
Assistant Secretary
Robyn L. Ichilov, Vice President
OFFICE OF THE FUNDS
7337 East Doubletree Ranch Road
Scottsdale, AZ 85258
MANAGER
ING Mutual Funds Management Co. LLC
1475 Dunwoody Drive
West Chester, PA 19380-1478
DISTRIBUTOR
ING Pilgrim Securities, Inc.
7337 East Doubletree Ranch Road
Scottsdale, AZ 85258
CUSTODIAN
State Street Bank and Trust Company
801 Pennsylvania Street
Kansas City, MO 64105
TRANSFER AGENT
DST Systems, Inc.
P.O. Box 219368
Kansas City, MO 64121-9368
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
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 Domestic Mutual Funds Annual Report/October 31, 2000 55
<PAGE> 58
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 1-800-334-3444 OR VISIT OUR WEB
SITE AT www.ingfunds.com
<TABLE>
<CAPTION>
STOCK FUNDS
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
STOCK FUNDS
ING Emerging Markets Equity Fund Growth of capital A diversified portfolio of emerging market
stocks
ING Global Communications Fund Growth of capital A diversified portfolio of communications
products & svcs
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 International Bond Fund High total return A non-diversified portfolio of bonds from
issuers generally outside of the U.S.
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.
<PAGE> 59
ING MUTUAL FUNDS
Information and Services
CUSTOMER SERVICE
REPRESENTATIVES
1-800-334-3444
MON - FRI 8:00am - 6:00pm
AUTOMATED FUND AND
ACCOUNT INFORMATION
1-800-334-3444
24 HOURS, 7 DAYS A WEEK
WEB SITE
www.ingfunds.com
TRANSFER AGENT
DST SYSTEMS, INC.
P.O. BOX 219368
KANSAS CITY, MO 64121-9368
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, 2000, THIS REPORT MUST BE ACCOMPANIED BY PERFORMANCE
FOR THE MOST RECENTLY COMPLETED CALENDAR QUARTER.
[ING FUNDS LOGO] BULK RATE
U.S. POSTAGE
PAID
Mailed from Zip Code 07303
Permit No. 412
AMERICAS ING FUNDS
