Dear Fellow Shareholders:
We are pleased to report that in the six months ended December 31, 1999, assets
in the Select Fund portfolios grew to just over $24.5 million, an increase of
almost 93%. More importantly, both portfolios have performed quite well,
outperforming their respective benchmarks during a particularly difficult
period for fixed income investments
For the six-month period, the Intermediate portfolio recorded
a 1.82%* total return compared to 0.56% for the Lehman Aggregate Index and
1.12% for the Aggregate Intermediate Index. The straightforward
investment-grade holdings comprising the Intermediate portfolio were
negatively impacted by the steadily rising interest rates that characterized
most of 1999.
The High Income portfolio turned in a 2.45%* total return for the period,
compared to a 1.47% total return for the Lehman BB High Yield Index. This
portfolios composition of below investment-grade corporate bonds,
asset-backed securities, and convertible instruments helped boost returns.
Clearly, the more aggressive credit profile and equity-linked structures in
the High Income portfolio proved beneficial in an environment marked by a
strong economy, a strong equity market, and rising interest rates.
Although the market value of current portfolio holdings has been under
pressure, this environment has provided the opportunity to selectively add
assets which should enhance the portfolios earning rates in future periods.
Over time, our ability to consistently generate a competitive level of
income should benefit the net asset values of the Select Fund portfolios.
Therefore, we choose to focus on opportunities to improve the future earnings
of the portfolios, rather than the short-term price volatility.
Thankfully, we celebrated the New Year and the much-anticipated Y2K date
change without any noticeable mishaps. Certainly, there could have been
problems, perhaps even serious economic disruptions, but preparations were
substantial and apparently quite effective. As the new year gets under way
in the capital markets, we expect to see funds flowing back to securities
and asset classes that were shunned ahead of the feared Y2K. We expect to
benefit from this transition due to our preference for the off the run
- -term approach is to continue to look for income-oriented assets that, in our
opinion, are significantly undervalued relative to comparable alternatives.
Allen Morgan, Jr. Jim Kelsoe
President and Director Portfolio Manager
January 31, 2000
Below are the load-adjusted performance figures for the Morgan Keegan Select
Funds Intermediate Bond and High Income portfolios for the six months ended
December 31, 1999.
Intermediate Bond Fund
Class A shares -.37%
Class C shares 1.49%
Class I shares 1.82%
Class A shares carry a maximum sales load of 2% with a 12b-1 fee of .25%.
Class C shares carry no sales load but have a 12b-1 fee of .60%. Class I
shares carry no sales load or 12b-1 fee.
High Income Fund
Class A shares -.13%
Class C shares 2.07%
Class I shares 2.45%
Class A shares carry a maximum sales load of 2.5% with a 12b-1 fee of .25%.
Class C shares carry no sales load but have a 12b-1 fee of .75%. Class I
shares carry no sales load or 12b-1 fee.
*The performance cited represents that of the Class I shares for both
portfolios, which do not carry a sales load. Past performance is not
indicative of future results. Share price and return will vary, so you may
have a gain or loss of principal when you sell your shares.
Intermediate Bond Fund Schedule of Investments
Principal S&P Rating Market
Amount Name (unaudited) Cost Value (b)
Asset Backed Securities Investment Grade 50.4%
$400,000 ACLC Business Trust 1999-2, 9.35% 1/15/21 (a) A 392,500 392,500
100,000 Amresco Residential 1997-2 M2F, 7.665% 6/25/27A+ 98,188 98,313
100,000 Cityscape Home Equity 1997-3 B, 8.17% 7/25/18 BBB+ 91,000 91,250
465,000 Cityscape Home Equity 1997-4 M2, 7.71% 10/25/18 A 34,975 407,600
100,000 Comm 1999-1 F, 7.239% 10/15/08 A 90,750 84,875
400,000 Commercial Mortgage 1999-C2, 7.80% 7/17/13 A 380,750 374,376
270,000 Countrywide Certificates 1999-1 AF2, 6.16% 9/25 AAA 259,875 257,683
300,000 Deutsche Mtg. & Asset 1998-C1 C, 6.861% 3/15/08 A 297,656 273,375
199,854 Empire Funding 1998-1 M2, 7.43% 6/25/24 A 184,616 182,805
244,821 Empire Funding 1998-1 B1, 8.56% 6/25/24 BBB 201,859 205,038
300,000 Empire Funding 1998-2 B1, 9.03% 6/25/24 BBB 239,000 239,250
300,000 First Plus Home Loan 1997-2 M2, 7.59% 4/10/23 A 285,906 276,564
300,000 First Plus Home Loan 1998-2 M2, 7.51% 5/10/24 AAA 274,500 267,000
300,000 First Plus Home Loan 1998-1 B1, 7.63% 1/24 (a) BBB 241,125 235,689
300,000 GMACC 1997-C1 A3, 6.869% 8/15/07 A 307,875 289,968
310,000 Green Tree Fin. Corporation 7.27% 6/15/28 A+ 289,963 288,204
200,000 Green Tree Fin. Corporation 1997, 7.23% 2/15/29 BBB+ 191,125 182,094
150,000 Impac Secured Assets 1998-1 M2, 7.77% 7/25/25 A 140,938 132,984
600,000 Keystone Owner Trust 1998-P2 8.5% 1/25/29 (a) BBB- 485,250 482,436
350,000 The Money Store, 7.495% 5/15/30 A 323,875 336,658
300,000 PSB Lending 1997-3 M2, 7.63% 2/20/24 A 274,125 272,157
5,485,850 5,370,819
Corporate Bonds Investment Grade 39.1%
Automobile Manufacturers 4.8%
290,000 Ford Motor Credit Co., 5.75% Bond 2/23/04 A 282,096 275,413
250,000 General Motors Acceptance Corp., 6.15% 4/05/07 A 242,766 232,788
524,862 508,201
Automobile Rental 2.4%
250,000 Hertz Corp., 7.625% 8/15/07 A- 248,183 252,098
Banks 4.6%
500,000 Bank One, 6.875% Bond 8/01/06 A+ 487,540 486,065
Brokerage and Investment 5.4%
370,000 Lehman Brothers Hdlg., 6.125% Bond 7/15/03 A 359,866 355,100
250,000 Merrill Lynch & Co., 6.00% Bond 2/17/09 AA 236,148 225,145
596,013 580,245
Financial 1.8%
200,000 Provident Companies Inc., 6.375% Bond 7/15/05 BBB+ 198,483 187,132
Insurance 1.9%
200,000 Prudential, 8.3% Bond 7/01/25 A- 186,000 200,500
Machinery 1.1%
125,000 Thermo Electron Corp., 7.625% Bond 10/30/08 A 118,237 116,989
Optical Supplies 3.2%
400,000 Sola International, 6.875% Bond 3/15/08 BBB 369,700 345,880
REITS 2.0%
175,000 American Health Properties, 7.50% Bond 1/5/07 BBB 156,713 158,499
60,000 New Plan Realty, 6.80% Bond 5/15/02 A 60,407 58,756
217,121 217,255
Intermediate Bond Fund Schedule of Investments
Principal S&P Rating Market
Amount Name (unaudited) Cost Value (b)
Retail Auto Parts 2.8%
320,000 AutoZone, 6.00% Bond 11/01/03 A 311,314 300,323
Special Purpose Entity 6.1%
185,000 BHP Finance USA LTD., 6.42% Bond 3/01/26 A 182,461 178,297
500,000 Deutsche Bank Capital Funding, 7.872% 12/49 (a) AA 500,000 473,400
682,461 651,697
Telecommunications 2.1%
250,000 AT&T Corporation, 6.00% Bond 3/15/09 AA 240,468 228,165
Transportation 0.9%
100,000 US Freightways, 6.50% Bond 5/01/09 A 99,192 92,351
4,279,573 4,166,901
Corporate Bonds Non-Investment Grade 1.8%
Containers Metal/Glass 1.8%
200,000 Owens-Ill. Inc., 8.10% Bond 5/15/07 BB+ 197,938 190,818
Mortgage Backed Securities 8.7%
Collateralized Mortgage Obligation
365,000 Federal National Mortgage Assn. 7.20% 4/25/23 AAA 367,200 363,518
200,000 Residential Asset Trust 1998-A5 6.75% 5/25/28 AAA 194,500 183,782
391,304 Norwest Asset Corp. 1997-10 A4, 7.00% 8/25/27 AAA 378,587 374,306
940,287 921,606
Total Investments In Securities 10,903,648 10,650,144
(a)Securities sold within the terms of a private placement memorandum, exempt
from registration under Section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or to other
accredited investors. Pursuant to guidelines adopted by the Board of
Directors, these issues have been determined to be liquid by MAM.
(b)See note 1 of accompanying notes to financial statements regarding
valuation of securities.
High Income Fund Schedule of Investments
Principal S&P Rating Market
Amount Name (unaudited) Cost Value (b)
Asset Backed Securities Investment Grade 26.4%
$500,000 Cityscape Home Equity Trust 8.17% 7/25/18 BBB+ 456,094 456,250
100,000 Comm 1999-1 F, 7.239% 10/15/08 BBB- 90,750 84,875
519,620 Empire Funding 1998-1 B1, 8.56% 6/25/24 BBB 436,482 435,183
1,788,750 Empire Funding 1998-2 B1, 9.03% 6/25/24 BBB- 1,425,306 1,426,528
370,000 First Plus Home Loan 1997, 7.69% 9/11/23 (a)BBB 302,850 299,238
200,000 First Plus Home Loan 1998, 7.63% 1/10/24 (a)BBB 160,750 157,126
125,000 Green Tree Fin. Corp 1997, 7.23% 2/15/29 BBB+ 119,453 113,809
900,000 Keystone Owner Trust 1998, 8.50% 1/25/29 (a)BBB- 722,250 723,654
3,713,935 3,696,663
Asset Backed Securities Non-Investment Grade 11.1%
1,325,000 First Plus Home Loan 1997, 8.52% 9/23 (a) BB 723,000 729,784
750,000 First Plus Home Loan 1998, 8.36% 5/10/24 (a)BB 397,500 408,045
700,000 Master Fin. Asset Trust 1998, 10.02% 9/20/24BB 427,000 424,375
1,547,500 1,562,204
Corporate Bonds Investment Grade 9.0%
Banks 3.3%
500,000 Colonial Bank, 8.0% Bond 3/15/09 BBB- 481,625 465,815
Medical Hospitals 2.8%
500,000 Healthsouth, 3.25% Bond 4/01/03 BBB- 392,500 387,500
Machinery 1.1%
175,000 Thermo Electron, 4.25% Bond 1/01/03 BBB 141,750 147,875
Optical Supplies 1.8%
300,000 Sola International, 6.875% Bond 3/15/08 BBB 277,000 259,410
1,292,875 1,260,600
Corporate Bonds Non-Investment Grade 28.4%
Automobile/Equipment Rental 2.1%
300,000 United Rentals, 9.25% Bond 1/15/09 BB- 282,000 288,000
Containers Metal/Glass 2.1%
300,000 Owens-Ill., Inc., 8.10% Bond 5/15/07 BB+ 304,282 286,227
Finance Consumer 0.4%
100,000 Macsaver Financial, 7.875% Bond 8/01/03 BB+ 72,000 61,000
Insurance 1.7%
400,000 Vesta Insurance Group, 8.75% Bond 7/15/25 B+ 236,000 236,172
Medical Hospitals 3.0%
200,000 Columbia/HCA, 6.91% Bond 6/15/05 BB+ 183,000 182,822
250,000 Tenet Healthcare, 8.0% Bond 1/15/05 BB+ 245,250 239,375
428,250 422,197
Pharmacy Services 2.4%
500,000 Omnicare, 5.0% Bond 10/01/07 BBB- 335,000 334,375
Retail Petroleum Products 1.8%
300,000 Clark USA Inc., 10.875% Bond 12/01/05 B+ 277,375 258,000
Ship Building 3.3%
775,000 Friede Goldman, 4.50% Bond 9/15/04 B 479,305 465,000
High Income Fund Schedule of Investments
Principal S&P Rating Market
Amount Name (unaudited) Cost Value (b)
Telecommunications 10.0%
390,000 AMSC Acquisition, 12.25% Bond 4/01/08 B- 323,700 304,688
300,000 Global Crossing, 9.625% Bond 5/15/08 BB+ 312,750 300,000
400,000 GlobalStar LP, 11.50% Bond 6/01/05 B 300,000 266,000
400,000 Level 3 Communications, Bond 12/01/08 (Zero coupon through
12/01/2003, thereafter 10.50%) B 237,250 242,000
300,000 QWest Communications, 7.25% Bond 11/01/08 BB+ 290,625 289,125
1,464,325 1,401,813
Textiles 1.6%
250,000 WestPoint Stevens, 7.875% Bond 6/15/08 BB 244,563 223,750
4,123,100 3,976,534
Mortgage Backed Securities 0.9%
Collateralized Mortgage Obligation
189,595 Chase Mtge. Fin. Corp. 1999, 6.25% 6/14 (a)Non-rated 47,873 47,873
460,075 Hanover SPC-2, 6.25% 10/01/14 (a) BB 391,639 383,445
654,480 Norwest Asset Corp. 1999, 6.25% 3/25/14 (a)Non-rated 167,711 167,711
442,643 Norwest Asset Corp. 1999-15 B6, 6.25% 6/25/14
(subordinated class) (a) Non-rated 110,661 110,661
775,732 CS First Boston Mtg., 6.75% 9/25/28 (subordinated class) (a)
BB 599,254 554,168
1,317,137 1,263,858
Stocks 8.2%
25,000 Amresco Capital Trust 220,056 212,500
850 Cendant Corporation 28,473 31,981
5,500 Colonial Properties 94,050 97,284
7,000 General Growth Properties 151,357 140,875
15,000 Healthsouth 77,625 79,695
1,500 QWest Communications 47,266 64,500
12,000 RFS Hotel Investors 134,205 126,000
9,000 Star Gas Partners 146,993 118,125
3,700 Storage USA 99,812 111,925
4,700 US Restaurant Properties 90,070 65,213
1,500 United Rentals 28,406 25,688
1,500 Global Crossing 50,837 74,625
1,169,149 1,148,410
Repurchase Agreements 7.9%
State Street Bank & Trust Company
Dated December 31, 1999, 3.0%, to be repurchased at $1,105,276
on January 3, 2000 (Euro deposit). 1,105,000 1,105,000
Total Investments In Securities 14,268,696 14,013,267
(a)Securities sold within the terms of a private placement memorandum, exempt
from registration under Section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or to other
accredited investors. Pursuant to guidelines adopted by the Board of
Directors, these issues have been determined to be liquid by MAM.
(b)See note 1 of accompanying notes to financial statements regarding
valuation of securities.
Intermediate High Income
Bond Fund Fund
Assets:
Investments, in securities as detailed in the accompanying schedules at
market 10,650,144 $14,013,267
(cost $10,903,648 and $14,268,696 respectively)
Cash on deposit with custodian 207,676 123,086
Accrued interest 136,001 212,971
Due from affiliates 16,535 15,418
TOTAL ASSETS 11,010,356 14,364,742
Liabilities:
Accrued expenses 24,514 39,691
Payable for securities purchased 0 661,093
Distributions payable 63,597 125,630
Total Liabilities 88,111 826,414
Net Assets 10,922,245 13,538,328
Net Assets consist of:
Net unrealized depreciation of investments (253,504) (255,429)
Net proceeds of capital stock, par value $.001 per share-authorized
1 billion shares; outstanding 1,129,124 and 1,377,046 shares, respectively
11,175,749 13,793,757
Accumulated net realized gain from sale of investments 0 0
NET ASSETS $10,922,245 $13,538,328
Shares Outstanding and Net Asset Value Per Share:
Class A shares
Net Assets $15,679,595 $13,769,155
Shares outstanding 587,199 383,385
Net Asset Value per share $9.67 $9.83
Class C shares
Net Assets $13,655,642 $15,050,272
Shares outstanding 377,871 513,672
Net Asset Value per share $9.67 $9.83
Class I shares
Net Assets $11,587,008 $14,718,901
Shares outstanding 164,054 479,989
Net Asset Value per share $9.67 $9.83
See accompanying notes to financial statements.
Intermediate High Income
Bond Fund Fund
Investment Income:
Interest $357,844 $665,525
Dividends 35,247
357,844 700,772
Expenses:
Management fee 18,095 40,687
Distribution fee 14,798 21,397
Legal fees 4,209 4,788
Audit fees 10,750 10,750
Accounting and transfer agent fees 21,000 21,000
Custodian costs 3,354 3,768
Registration fees 1,000 1,000
Directors fees 2,750 2,750
Other 2,937 1,944
Less: Fee waiver and reimbursement from Advisor in excess of limitation
( 34,690) (32,438)
44,203 75,646
Net Investment Income 313,641 625,126
Realized and Unrealized Gains (Losses) on Investments:
Change in unrealized depreciation for the period (170,976) (345,841)
Net realized gain (loss) on securities (7,279) 6,262
Increase in net assets resulting from operations 135,386 285,547
See accompanying notes to financial statements.
Intermediate High Income
Bond Fund Fund
Increase (decrease) in net assets from operations:
Net investment income $313,641 $625,126
Unrealized depreciation, net (170,976) (345,841)
Net realized gain (loss) from securities transactions (7,279) 6,262
Increase in net assets resulting from operations 135,386 285,547
Distributions to shareholders from net investment income:
Class A (176,066) (151,282)
Class C (92,179) (284,018)
Class I (45,396) (189,826)
Total distributions to shareholders (313,641) (625,126)
Capital share transactions
Proceeds from shares sold:
Class A (254,157 and 278,355 shares) 2,498,379 2,773,624
Class C (173,093 and 122,375 shares) 1,691,627 1,220,287
Class I (51,300 and 390,923 shares) 502,250 3,922,852
Proceeds from sales of shares as a result of reinvested dividends:
Class A (16,216 and 10,070 shares) 158,513 99,783
Class C (7,502 and 22,203 shares) 73,342 220,971
Class I (4,257 and 15,151 shares) 41,637 150,264
Less Shares Redeemed:
Class A [(4,433) and (6,134) shares] (43,288) (60,253)
Class C [(4,357) and (30,358) shares] (42,347) (300,054)
Class I [(17,649) shares] (174,640)
Net Increase in Net Assets from share transactions 4,880,113 7,852,834
Total Increase In Net Assets 4,701,858 7,513,255
NET ASSETS:
Beginning of Period 6,220,387 6,025,073
End of Period $10,922,245 $13,538,328
See accompanying notes to financial statements.
Note 1: Summary of Significant Accounting Policies
Morgan Keegan Intermediate Bond Fund and Morgan Keegan High Income Fund (the
Funds) are separate diversified investment portfolios and series of capital
stock of Morgan Keegan Select Fund, Inc., an open-end management investment
company. The investment objectives of the Funds are as follows:
The objective of the Morgan Keegan Intermediate Bond Fund is total return
(including capital appreciation and income) by investing in investment grade,
fixed income debt securities. The Morgan Keegan Intermediate Bond Fund will
invest at least 65% of total assets in investment grade, intermediate term
maturity bonds with average effective maturities between 3 and 10 years.
The objective of the Morgan Keegan High Income Fund is total return
(including capital appreciation and income) by investing in below investment
grade, fixed income debt securities. The Morgan Keegan High Income Fund
primarily invests in debt securities rated below investment grades by
Standard and Poors
or Moodys rating agency.
All organizational costs will be unconditionally absorbed by Morgan Asset
Management, Inc. (the Advisor).
The inception of the Funds was January 13, 1999, and the commencement of
operations was March 22, 1999.
SIGNIFICANT ACCOUNTING POLICIES
Security Valuation:
Investments in securities traded on national securities exchanges are stated at
the last reported sales price on the day of valuation. Securities traded in the
over-the-counter market and listed securities for which no sale was reported
on that date are stated at the last quoted bid price. Short-term securities are
valued at amortized cost or original cost plus accrued interest, both of
which approximate market.
Federal Income Taxes:
The Funds policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all its taxable income to its shareholders. Therefore, no
federal income tax provision is required.
Other Policies:
The Fund follows industry practice and records security transactions on the
trade date. Dividend income and distributions to shareholders are recognized
on the ex-dividend date and interest is recognized on an accrual basis.
Repurchase Agreements:
It is the Funds policy for securities purchased under agreements to resell to
have market value equal to or greater than the Funds purchase price and to
have such securities taken into possession by the Funds custodian.
Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increase and decrease in net assets from operations
during the period. Actual results could differ from those estimates.
Note 2: Multiple Class Structure and Plan of Distribution
A multiple class structure has been adopted pursuant to Rule 18f-3 under the
Investment Company Act of 1940, as amended, on behalf of each Fund. Each Fund
offers three share classes: Class A, Class C and Class I. Class A shares are
sold with an initial sales charge. Class C shares are sold without an initial
sales charge and are subject to a contingent deferred sales charge within the
first year
of purchase. Class I shares are sold without sales charges of any kind and are
available only to certain retirement accounts and other special programs.
The Class A and Class C shares at each Fund have a distribution plan pursuant
to Rule 12b-1 under the Investment Company Act of 1940, as amended.
Note 3: Payment to Related Parties
Morgan Asset Management, Inc. (the Advisor) is the investment advisor for
each Fund. Morgan Keegan and Company, Inc. acts as a distributor of each of
the Funds shares under a plan of distribution pursuant to Rule 12b-1.
Investment advisory and management fees and 12b-1 distribution fees are based
on a percentage of each Funds average daily net assets value. The following
chart represents sales charges and fees:
Morgan Keegan Intermediate Bond Fund
Class A Class C Class I
Initial Sales Charge 2.00%
Deferred Sales Charge 1.00%
Investment Advisory Fee 0.40% 0.40% 0.40%
12b-1 Fees 0.25% 0.60%
Morgan Keegan High Income Fund
Class A Class C Class I
Initial Sales Charge 2.50%
Deferred Sales Charge 1.00%
Investment Advisory Fee 0.75% 0.75% 0.75%
12b-1 Fee 0.25% 0.75%
Morgan Keegan and Company, Inc. provides funds accounting services and
transfer agent services for each Fund. The Advisor has agreed to waive its
fee and to reimburse each Fund for its first twelve months of operations to
the extent each Funds annual operating expenses (excluding brokerage,
interest, taxes and extraordinary expenses) exceeds a specific level. The
Advisors fees waivers for each Fund as a percentage of net assets are as
follows:
Class A Class C Class I
Morgan Keegan Intermediate Bond Fund 0.90% 1.25% 0.65%
Morgan Keegan High Income Fund 1.25% 1.75% 1.00%
Note 4: Capital Share Transactions
At December 31, 1999, there were 100 million shares of .001 par value capital
shares authorized, and paid-in capital was $11,175,749 for the Morgan Keegan
Intermediate Bond Fund and $13,793,757 for the Morgan Keegan High Income Fund.
Note 5: Investment Securities
Information related to investment securities (excluding short-term investments)
by portfolio is as follows:
Morgan Keegan Morgan Keegan
Intermediate Bond Fund High Income Fund
Market Value 10,650,144 14,013,267
Cost 10,903,648 14,268,696
Unrealized depreciation (253,504) (255,429)
Securities with appreciation 36,789 99,105
Securities with depreciation (290,293) (354,534)
Unrealized depreciation (253,504) (255,429)
FOR THE SIX MONTHS ENDED DECEMBER 31, 1999
Intermediate High Income
Bond Fund Fund
CLASS A CLASS C CLASS I CLASS A CLASS C CLASS I
Net Asset Value, beginning of period
$9.85 $9.85 $9.85 $10.17 $10.18 $10.18
Income from Investment Operations:
Net Investment Income
0.34 0.33 0.36 0.58 0.55 0.59
Net Gains on Securities
(0.18) (0.18) (0.18) (0.34) (0.35) (0.35)
Total from Investment Operations
0.16 0.15 0.18 0.24 0.20 0.24
Less Distributions:
Dividends (from net investment income)
(0.34) (0.33) (0.36) (0.58) (0.55) (0.59)
Net Asset Value, end of period
$9.67 $9.67 $9.67 $9.83 $9.83 $9.83
Total Return * 1.67% 1.49% 1.82% 2.43% 2.07% 2.45%
Ratios/Supplemental Data
Net Assets, end of period
$5,679,595 $3,655,642 $1,587,008 $3,769,155 $5,050,272 4,718,901
Expenses to Average Net Assets **
0.90% 1.25% 0.65% 1.25% 1.75% 1.00%
Net Investment Income to Average Net Assets
6.04% 5.88% 6.41% 10.08% 9.97% 10.46%
Portfolio Turnover Rate
17.00% 17.00% 17.00% 8.00% 8.00% 8.00%
FOR THE PERIOD ENDED JUNE 30, 1999
CLASS A CLASS C CLASS I CLASS A CLASS C CLASS I
Net Asset Value, beginning of period
$10.00 $10.00 $10.00 $10.00 $10.00 $10.00
Income from Investment Operations:
Net Investment Income0.16 0.15 0.16 0.20 0.18 0.20
Net Gains on Securities
(0.15) (0.15) (0.15) 0.17 0.18 0.18
Total from Investment Operations
0.01 0.00 0.01 0.37 0.36 0.38
Less Distributions:
Dividends (from net investment income)
(0.16) (0.15) (0.16) (0.20) (0.18) (0.20)
Net Asset Value, end of period
9.85 9.85 9.85 10.17 10.18 10.18
Total Return * 0.06% (0.04%) 0.13% 3.69% 3.64% 3.85%
Ratios/Supplemental Data
Net Assets, end of period
$3,164,863 $1,986,591 $1,068,933 $1,028,584 $4,064,710 $931,780
Expenses to Average Net Assets+
0.90% 1.25% 0.65% 1.25% 1.75% 1.00%
Net Investment Income to Average Net Assets
6.48% 6.22% 6.82% 8.74% 8.65% 9.40%
Portfolio Turnover Rate
6.66% 6.66% 6.66% 0% 0% 0%
**Total return does not include front end sales load.
**1.55%, 2.15%, 1.12%, 1.71%, 2.40%, and 1.37% before excess reimbursement and
fee waiver from Advisor for classes A, C and I of the Intermediate Bond Fund
and High Income Fund, respectively.
+3.41%, 3.82%, 3.13%, 4.39%, 4.86%, and 4.02% before excess reimbursement
and fee waiver from Advisor for classes A, C and I of the Intermediate Bond
Fund and High Income Fund, respectively.
See accompanying notes to financial statements.
ALABAMA
Birmingham
(205) 879-0016
Decatur
(256) 350-1925
Fairhope
(334) 928-0555
Huntsville
(256) 539-6739
Mobile
(334) 316-3100
Montgomery
(334) 262-0100
ARKANSAS
Little Rock
(501) 666-1566
Rogers
(501) 936-7774
FLORIDA
Ft. Lauderdale
(954) 728-2800
Palm Beach
(561) 835-8141
Pensacola
(850) 434-2207
Sarasota
(941) 331-1100
GEORGIA
Athens
(706) 613-9915
Atlanta
(404) 240-6700
KENTUCKY
Bowling Green
(270) 781-0430
Covington
(606) 291-9535
Lexington
(606) 253-9769
Louisville
(502) 589-7979
LOUISIANA
Baton Rouge
(225) 344-9020
Lafayette
(337) 232-0644
Mandeville
(504) 727-9923
New Orleans
(504) 529-1556
Shreveport
(318) 424-2000
MASSACHUSETTS
Boston
(617) 542-9515
MISSISSIPPI
Jackson
(601) 368-2200
NEW YORK
New York
(212) 319-0443
NORTH CAROLINA
Charlotte
(704) 442-4700
Durham
(919) 419-2500
Raleigh
(919) 781-8187
Wilmington
(910) 256-2406
TENNESSEE
Jackson
(901) 668-1010
Knoxville
(865) 521-6653
Memphis
Morgan Keegan Tower
(901) 524-4100
Memphis
Crescent Center
(901) 766-7700
Nashville
(615) 255-0600
TEXAS
Austin
(512) 329-6700
Dallas
(214) 365-5500
Houston
Post Oak Park
(713) 840-3600
Houston
Memorial City Plaza
(713) 647-5300
VIRGINIA
Richmond
(804) 225-1100
