<PAGE> 1
[GRAPHIC: PHOTO COLLAGE WITH CELL PHONE] Nations
International
Value Fund
Nations
International
Equity Fund
Nations
Marsico
International
Opportunities Fund
Nations
Emerging Markets
Fund
INTERNATIONAL
STOCK FUNDS
SEMIANNUAL REPORT FOR THE PERIOD
ENDED SEPTEMBER 30, 2000
[NATIONS FUNDS LOGO]
<PAGE> 2
This Report is submitted for the general information of shareholders of Nations
Funds. This material must be preceded or accompanied by a current Nations Funds
prospectus.
Nations Funds distributor: Stephens Inc., which is not affiliated with Bank of
America N.A., is not a bank, and securities offered by it are not guaranteed by
any bank or insured by the FDIC. Stephens Inc., member NYSE, SIPC.
Nations Funds Investment adviser: Banc of America Advisors, Inc.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 3
PRESIDENTS' MESSAGE
Dear Shareholder:
The six-month period ended September 30, 2000 proved
to be quite unsettling for mutual fund investors.
Several factors led to turbulence in U.S. and
overseas markets. The Federal Reserve Board's
practice of increasing interest rates in an attempt
to slow down the economy and keep inflation at bay
took a toll on the stock market. Oil prices soared
over the summer causing concern across the country as
several cities saw gas prices above $2.00 per gallon.
The slowing economy affected earnings at a number of
leading U.S. companies, causing additional volatility
in the stock market. Overseas, the European Central
Bank raised interest rates in August -- the fifth
rate hike this year -- and the euro fell to a record
low. In Japan, the Bank of Japan increased interest
rates for the first time in a decade, adding
additional strain to an economy that has struggled
over the last several years.
The only seemingly bright spot for investors during
the past six months has been in the bond market.
Because of the federal government's budget surplus,
the U.S. Treasury has had to buy back many of its
long-term securities. The shortage in long-term
securities has generally increased returns on these
securities, resulting in an inversion of the yield
curve -- whereby short-term securities are yielding
more than many longer-term securities. This is the
first time in a long time that most bond sectors have
outperformed both the Standard & Poor's 500 Composite
Stock Price Index and the Nasdaq Composite Index*.
Now, you're probably asking yourself "Is this a good
time to invest in stocks or bonds?" We think the
answer is "Yes." While stocks of all sizes have
historically outperformed bonds over the long-term,
and bonds have performed well this year, a broadly
diversified portfolio -- one consisting of both
stocks and bonds -- can help you weather market
volatility. Remember that the financial markets tend
to be cyclical and while one asset class or
investment style may be the flavor of the month, it
could be out of favor the next.
It's also important to note that volatility tends to
keep some investors on the sidelines. But waiting for
the right time to invest may result in missed
opportunities. Disciplined investing requires staying
invested through market highs and lows. Investors can
also take advantage of dollar cost averaging** during
volatile times -- the practice of systematic
investing where you seek to buy more shares when
prices are low and fewer shares when prices are high,
resulting in a lower average share price over time.
Remaining invested and regularly investing is key.
Whether it's growth vs. value, large cap vs. small
cap, stocks vs. bonds, or U.S. vs. international, no
single investment style alone will assure that you
achieve your long-term financial goals. We believe
diversification is the key to long-term success and
an investment professional can help you create a
portfolio best suited to your risk tolerance and
investment time horizon.
*The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment. The
Nasdaq Composite Index tracks the performance of
domestic common stocks traded on the regular Nasdaq
market as National Market System traded foreign
stocks and ADRs. It is unmanaged and unavailable for
investment.
**Dollar cost averaging does not ensure a profit or
protect against a loss in a declining market. You
should carefully consider your ability to make
regular investments through periods of fluctuating
market conditions.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
<PAGE> 4
PRESIDENTS' MESSAGE CONTINUED...
At Nations Funds, we strongly believe in the value of
advice. An investment professional can provide you
with market research and analysis, years of
investment experience, and work with you to determine
the best strategy for surviving short-term volatility
and successfully reaching your long-term goals.
We remain committed to providing you with world-class
investment management and competitive products to
help you reach your long-term goals. Should you have
any questions or comments on your semiannual report,
please contact your investment professional or call
us at 1.800.321.7854. You can also visit us online at
www.nations-funds.com.
Thank you for being a part of the Nations Funds
family.
Sincerely,
/s/ A. Max Walker
A. MAX WALKER
PRESIDENT AND CHAIRMAN OF THE BOARD
NATIONS FUNDS
/s/ Robert H. Gordon
ROBERT H. GORDON
PRESIDENT
BANC OF AMERICA ADVISORS, INC.
September 30, 2000
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<S> <C>
NATIONS FUNDS SPECTRUM 2
FINANCIAL STATEMENTS
Statements of net assets
Nations International Value Fund 3
Nations International Equity Fund 4
Nations Marsico International Opportunities Fund 5
Nations Emerging Markets Fund 8
Statements of operations 11
Statements of changes in net assets 12
Schedules of capital stock activity 14
Financial highlights 18
Notes to financial statements 26
Statements of net assets -- Nations Master Investment Trust
Nations International Value Master Portfolio 33
Nations International Equity Master Portfolio 36
Statements of operations 41
Statements of changes in net assets 42
Supplementary data 42
Notes to financial statements 43
</TABLE>
<TABLE>
<S> <C>
------------------------------------------------------------------------------
NATIONS FUNDS [DALBAR LOGO]
RECOGNIZED FOR
OUTSTANDING DALBAR, Inc., is a well-respected
CUSTOMER SERVICE research firm that measures
customer service levels and
IN RECOGNITION OF ITS COMMITMENT TO establishes benchmarks in the
PROVIDE SHAREHOLDERS WITH THE financial services industry.
HIGHEST LEVEL OF CUSTOMER SERVICE
IN THE MUTUAL FUND INDUSTRY,
NATIONS FUNDS RECEIVED THE DALBAR
MUTUAL FUND SERVICE AWARD IN 1999.
------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
THE NATIONS FUNDS FAMILY OF FUNDS
LOWER RISK/REWARD POTENTIAL
MONEY MARKET FUNDS
Nations Prime Fund
Nations Cash Reserves
Nations Money Market Reserves
Nations Government Money Market Fund
Nations Government Reserves
Nations Treasury Fund
Nations Treasury Reserves
Nations Tax Exempt Fund
Nations Municipal Reserves
Nations California Tax-Exempt Reserves
FIXED INCOME FUNDS
INCOME FUNDS
Nations High Yield Bond Fund
Nations Strategic Income Fund
Nations U.S. Government Bond Fund
Nations Government Securities Fund
Nations Bond Fund
Nations Intermediate Bond Fund
Nations Short-Intermediate Government Fund
Nations Short-Term Income Fund
TAX-EXEMPT INCOME FUNDS
Nations Municipal Income Fund
Nations State-Specific Long-Term Municipal
Bond Funds (CA, FL, GA, KS,
MD, NC, SC, TN, TX, VA)
Nations Intermediate Municipal Bond Fund
Nations State-Specific Intermediate Municipal
Bond Funds (FL, GA, MD,
NC, SC, TN, TX, VA)
Nations Short-Term Municipal Income Fund
DOMESTIC EQUITY FUNDS
GROWTH FUNDS
Nations Small Company Fund
Nations Marsico 21st Century Fund
Nations MidCap Growth Fund
Nations Marsico Focused Equities Fund
Nations Aggressive Growth Fund
Nations Capital Growth Fund
Nations Strategic Growth Fund
Nations Blue Chip Fund
GROWTH AND INCOME FUNDS
Nations Marsico Growth & Income Fund
Nations Value Fund
Nations Equity Income Fund
Nations Asset Allocation Fund
Nations Balanced Assets Fund
Nations Convertible Securities Fund
INTERNATIONAL FUNDS
Nations Emerging Markets Fund
Nations Marsico International Opportunities Fund
Nations International Equity Fund
Nations International Value Fund
HIGHER RISK/REWARD POTENTIAL
INDEX FUNDS
Nations Managed Index Fund
Nations LargeCap Index Fund
Nations MidCap Index Fund
Nations SmallCap Index Fund
ASSET ALLOCATION PORTFOLIOS
Nations LifeGoal Balanced Growth Portfolio
Nations LifeGoal Growth Portfolio
Nations LifeGoal Income and Growth Portfolio
2
<PAGE> 7
NATIONS FUNDS
Nations International Value Fund
STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
(000)
----------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 100.0%
Investment in Nations Master
Investment Trust, International
Value Master Portfolio*........ $1,249,342
----------
TOTAL INVESTMENTS......... 100.0% 1,249,342
----------
OTHER ASSETS AND
LIABILITIES (NET)....... 0.0%
Administration fee payable....... $ (170)
Shareholder servicing and
distribution fees payable...... (130)
Accrued Trustees' fees and
expenses....................... (20)
Accrued expenses and other
liabilities.................... (121)
----------
TOTAL OTHER ASSETS AND
LIABILITIES (NET).............. (441)
----------
NET ASSETS................ 100.0% $1,248,901
==========
NET ASSETS CONSIST OF:
Undistributed net investment
income......................... $ 212
Accumulated net realized gain on
investment..................... 291
Net unrealized appreciation of
investment..................... 60,181
Paid-in capital.................. 1,188,217
----------
NET ASSETS....................... $1,248,901
==========
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($868,371,773 / 47,397,782
shares outstanding)............ $18.32
======
INVESTOR A SHARES:
Net asset value and redemption
price per share ($286,394,659 /
15,657,404 shares
outstanding)................... $18.29
======
Maximum sales charge............. 5.75%
Maximum offering price per
share.......................... $19.41
INVESTOR B SHARES:
Net asset value and offering
price per share(+) ($70,447,527 /
3,881,733 shares
outstanding)................... $18.15
======
INVESTOR C SHARES:
Net asset value and offering
price per share(+) ($23,687,349 /
1,305,108 shares
outstanding)................... $18.15
======
</TABLE>
---------------
* The financial statements of the International Value Master Portfolio,
including its portfolio of investments, are included elsewhere within this
report and should be read in conjunction with the International Value Fund's
financial statements.
(+) The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 8
NATIONS FUNDS
Nations International Equity Fund
STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
(000)
----------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 100.0%
Investment in Nations Master
Investment Trust, International
Equity Master Portfolio*....... $1,042,725
----------
TOTAL INVESTMENTS......... 100.0% 1,042,725
----------
OTHER ASSETS AND
LIABILITIES (NET)....... 0.0%
Administration fee payable....... $ (144)
Shareholder servicing and
distribution fees payable...... (33)
Accrued Trustees' fees and
expenses....................... (83)
Accrued expenses and other
liabilities.................... (162)
----------
TOTAL OTHER ASSETS AND
LIABILITIES (NET).............. (422)
----------
NET ASSETS................ 100.0% $1,042,303
==========
NET ASSETS CONSIST OF:
Distributions in excess of net
investment income.............. $ (3,187)
Accumulated net realized gain on
investment..................... 15,267
Net unrealized appreciation of
investment..................... 45,509
Paid-in capital.................. 984,714
----------
NET ASSETS....................... $1,042,303
==========
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($942,565,089 / 70,228,505
shares outstanding)............ $13.42
======
INVESTOR A SHARES:
Net asset value and redemption
price per share ($70,309,189 /
5,319,836 shares
outstanding)................... $13.22
======
Maximum sales charge............. 5.75%
Maximum offering price per
share.......................... $14.03
INVESTOR B SHARES:
Net asset value and offering
price per share+ ($28,146,396 /
2,199,366 shares
outstanding)................... $12.80
======
INVESTOR C SHARES:
Net asset value and offering
price per share+ ($1,282,413 /
102,657 shares outstanding)....
$12.49
======
</TABLE>
---------------
* The financial statements of the International Equity Master Portfolio,
including its portfolio of investments, are included elsewhere within this
report and should be read in conjunction with the International Equity
Fund's financial statements.
(+) The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 9
NATIONS FUNDS
Nations Marsico International Opportunities Fund
STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 84.5%
BRAZIL -- 3.0%
6,202 Embraer-Empresa Brasileira de
Aeronautica SA........................ $ 192
-------
CANADA -- 15.0%
6,134 BCE, Inc. .............................. 143
10,504 Bombardier, Inc. ....................... 181
2,980 Bonavista Petroleum Ltd.(!)............. 56
2,512 Celestica Inc.(!)....................... 173
2,932 Clarica Life Insurance Company(!)....... 70
1,371 Four Seasons Hotels Inc. ............... 100
4,175 Petro-Canada............................ 93
3,661 The Thomson Corporation................. 145
-------
961
-------
DENMARK -- 2.7%
765 Novo Nordisk AS-B....................... 170
-------
FRANCE -- 11.5%
2,133 Alcatel................................. 136
2,083 Aventis................................. 156
1,396 Axa(!).................................. 142
1,048 Groupe Danone........................... 144
1,019 Schlumberger Ltd. ...................... 84
497 Total Fina Elf SA....................... 73
-------
735
-------
HONG KONG -- 2.7%
13,000 Hutchison Whampoa....................... 173
-------
IRELAND -- 12.0%
12,016 Allied Irish Banks plc.................. 131
16,093 Bank of Ireland......................... 129
3,361 Elan Corporation, ADR(!)................ 184
39,581 Parthus Technologies plc(!)............. 158
7,281 Riverdeep Group plc(!).................. 162
-------
764
-------
JAPAN -- 7.1%
521 Nippon Telegraph & Telephone Company,
ADR................................... 26
8 Nippon Telegraph and Telephone
Company............................... 78
5 NTT Docomo Inc. ........................ 143
1,500 Sony Corporation........................ 153
540 Sony Corporation, ADR................... 55
-------
455
-------
NETHERLANDS -- 8.5%
5,328 ASM Lithography Holding NV(!)........... 177
3,205 ING Groep NV............................ 213
475 Koninklijke (Royal) Philips(!).......... 20
3,201 Nortel Networks Corporation............. 191
3,122 Philips Electronics NV.................. 134
-------
735
-------
SWEDEN -- 1.7%
7,012 LM Ericsson AB(!)....................... 107
-------
SWITZERLAND -- 3.4%
22 Julius Baer Holdings, Ltd. ............. 114
53 Schweizerische
Rueckversicherungs-Gesellschaft
(REGD)................................ 101
-------
215
-------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM -- 13.9%
30,039 ARC International plc(!)................ $ 182
19,195 Diageo plc.............................. 172
1,499 Pearson plc............................. 42
6,456 Reuters Group plc(!).................... 122
12,869 Sema Group plc(!)....................... 221
4,198 Shire Pharmaceuticals Group plc(!)...... 72
1,430 Shire Pharmaceuticals, ADR(!)........... 74
-------
885
-------
TOTAL COMMON STOCKS
(Cost $5,448)......................... 5,392
-------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000)
---------
<C> <S> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 11.0%
(Cost $700)
$ 700 Discount note due 10/02/00.............. 700
-------
<CAPTION>
SHARES
(000)
---------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 0.8%
(Cost $50)
50 Nations Cash Reserves#.................. 50
-------
TOTAL INVESTMENTS
(Cost $6,198*)................. 96.3% 6,142
-------
OTHER ASSETS AND LIABILITIES
(NET).......................... 3.7%
Cash.................................... $ 148
Receivable for investment securities
sold.................................. 2,238
Dividends receivable.................... 3
Receivable from administrator........... 32
Prepaid expenses........................ 34
Investment advisory fee payable......... (4)
Shareholder servicing and distribution
fees payable.......................... (2)
Payable for investment securities
purchased............................. (2,212)
Accrued Trustees' fees and expenses..... (1)
-------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)................................. 236
-------
NET ASSETS....................... 100.0% $ 6,378
=======
NET ASSETS CONSIST OF:
Undistributed net investment income..... $ 1
Accumulated net realized loss on
investments sold, foreign currencies
and net other assets.................. (19)
Net unrealized depreciation of
investments, foreign currencies and
net other assets...................... (52)
Paid-in capital......................... 6,448
-------
NET ASSETS.............................. $ 6,378
=======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 10
NATIONS FUNDS
Nations Marsico International Opportunities Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
------------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share ($1,518,824 / 151,492
shares outstanding)................... $10.03
=======
INVESTOR A SHARES:
Net asset value and redemption price per
share ($1,944,453 / 194,009 shares
outstanding).......................... $10.02
=======
5.75%
Maximum sales charge....................
$10.63
Maximum offering price per share........
INVESTOR B SHARES:
Net asset value and offering price per
share(+)($1,987,905 / 198,629 shares
outstanding).......................... $10.01
=======
INVESTOR C SHARES:
Net asset value and offering price per
share(+)($926,397 / 92,539 shares
outstanding).......................... $10.01
=======
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized depreciation of $56 on
investment securities was comprised of gross appreciation of $350 and gross
depreciation of $406 for federal income tax purposes. At September 30, 2000,
the aggregate cost of securities for federal income tax purposes was $6,198.
(!) Non-income producing security.
(+) The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc.
ADR -- American Depository Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 11
NATIONS FUNDS
Nations Marsico International Opportunities Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
At September 30, 2000, sector diversification was as follows:
<TABLE>
% OF NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Common stocks:
Pharmaceuticals............................................. 10.2% $ 656
Semiconductors.............................................. 8.1 517
Networking and telecommunications equipment................. 6.8 434
Telecommunications services................................. 6.1 390
Commercial banking.......................................... 5.9 374
Electronics................................................. 5.7 361
Diversified manufacturing................................... 5.6 354
Insurance................................................... 4.9 313
Publishing and advertising.................................. 4.8 309
Computer services........................................... 3.5 221
Financial services.......................................... 3.3 213
Aerospace and defense....................................... 3.0 192
Electrical equipment........................................ 2.7 174
Beverages................................................... 2.7 172
Integrated oil.............................................. 2.6 166
Software.................................................... 2.5 162
Food products............................................... 2.3 144
Lodging and recreation...................................... 1.6 100
Oilfield services........................................... 1.3 84
Exploration and production.................................. 0.9 56
---------- -------------
TOTAL COMMON STOCKS......................................... 84.5 5,392
U.S. GOVERNMENT AND AGENCY OBLIGATIONS...................... 11.0 700
INVESTMENT COMPANIES........................................ 0.8 50
---------- -------------
TOTAL INVESTMENTS........................................... 96.3 6,142
OTHER ASSETS AND LIABILITIES (NET).......................... 3.7 236
---------- -------------
NET ASSETS.................................................. 100.0% $ 6,378
========== =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 12
NATIONS FUNDS
Nations Emerging Markets Fund
STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 93.3%
ARGENTINA -- 2.5%
30,434 Grupo Financiero Galicia SA,
ADR(!)............................ $ 457
47,525 Perez Companc SA, ADR(!)............ 778
--------
1,235
--------
BRAZIL -- 13.3%
13,100 Brasil Telecom Part, ADR............ 763
840,000 Companhia de Bebidas das Americas
(Ambev)........................... 924
32,000 Companhia Vale do Rio Doce, ADR..... 798
13,500,000 Eletropaulo Metropolitana........... 809
44,000 Embratel Participacoes, ADR......... 814
18,000 Pao de Acucar, ADR.................. 669
10,300 Petrol Brasileiros, ADR............. 295
48,502 Tele Norte Leste Participacoes,
ADR............................... 1,109
10,000 Telesp Celular Participacoes SA,
ADR............................... 329
--------
6,510
--------
CHINA -- 0.7%
17,700 AsiaInfo Holdings, Inc.(!).......... 335
--------
GREECE -- 1.6%
52,000 STET Hellas Telecommunications SA,
ADR(!)............................ 774
--------
HONG KONG -- 4.3%
75,000 Cheung Kong (Holdings) Limited...... 906
85,000 China (HK) Mobile(!)................ 564
48,600 Hutchison Whampoa................... 645
--------
2,115
--------
HUNGARY -- 2.0%
16,400 Matav, ADR.......................... 386
11,000 Richter Geoeon, GDR................. 577
--------
963
--------
INDIA -- 4.2%
57,000 ICICI Limited, ADR.................. 627
61,000 Reliance Industries Ltd., GDR(!).... 954
36,100 Satyam Infoway Limited, ADR......... 490
--------
2,071
--------
ISRAEL -- 1.0%
61,200 Tioga Tech Ltd.(!).................. 509
--------
MALAYSIA -- 3.4%
670,000 AMMB Holdings Berhad................ 663
130,000 Globetronics Technology Berhad...... 257
210,000 Mesiniaga Berhad.................... 365
150,000 Telekom Malaysia Berhad............. 395
--------
1,680
--------
MEXICO -- 14.8%
435,000 Carso Global Telecom, ADR........... 2,097
38,500 Consorcio Ara, ADR(!)(-)............ 624
81,800 Grupo Carso SA de CV, ADR(!)........ 489
65,000 Grupo Elektra, SA de CV, GDR........ 618
42,000 Grupo IMSA SA de CV, ADR............ 383
240,000 Grupo Industrial Bimbo.............. 402
240,000 Grupo Modelo........................ 559
7,500 Grupo Televisa SA, GDR(!)........... 433
45,000 TV Azteca, SA de CV, ADS............ 579
51,000 Walmart de Mexico SA de CV, ADR(!).. 1,067
--------
7,251
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C>
POLAND -- 3.6%
23,500 Agora SA, GDR(!).................... $ 450
55,000 Elektrim(!)......................... 496
33,418 Polski Koncern Naftowy Orlen SA,
GDR(!)............................ 261
104,000 Telekomunikacja, GDR................ 533
--------
1,740
--------
RUSSIA -- 3.3%
15,000 Mobile Telesystems, ADS(!).......... 381
124,000 Tatneft, ADR........................ 1,232
--------
1,613
--------
SOUTH AFRICA -- 7.3%
22,000 Anglo American Platinum
Corporation....................... 848
30,500 De Beers Centenary Link Units....... 847
135,000 Dimension Data Holdings plc(!)...... 1,252
28,000 Nedcor Limited...................... 602
--------
3,549
--------
SOUTH KOREA -- 17.3%
69,000 Hyundai Electronics Industries
Company(!)........................ 987
112,000 Hyundai Motor Company Ltd., GDR(!).. 790
6,650 Korea Telecom Free.................. 291
20,200 Korea Telecom, ADR.................. 679
100,000 LG Electronics Inc., GDS(!)(-)...... 973
12,500 Samsung Electronics................. 2,264
42,100 Shinhan Bank, GDR................... 928
58,060 SK Telecom Company, ADR............. 1,488
--------
8,400
--------
TAIWAN -- 8.6%
110,800 Acer Comms, GDR..................... 1,118
69,435 Advanced Semiconductor, GDR......... 474
83,000 Asustek Computer Inc., GDR.......... 459
48 Asustek Computer, GDR(-)............ 0++
9,000 Gigamedia Ltd.(!)................... 73
70,206 Siliconware Precision Industries
Company........................... 352
85,552 Taiwan Semiconductor, ADR........... 1,743
--------
4,219
--------
THAILAND -- 1.5%
46,000 Advanced Info Services (FGN)(!)..... 388
924,000 Siam Commercial Bank Public Company
Limited(!)........................ 350
--------
738
--------
TURKEY -- 3.9%
101,600,000 Haci Omer Sabanci Holding........... 824
22,400 Turkcell Iletisim, ADS(!)........... 246
119,460,000 Yapi Kredi Bankasi.................. 862
--------
1,932
--------
TOTAL COMMON STOCKS
(Cost $50,414)...................... 45,634
--------
PREFERRED STOCKS -- 2.9%
BRAZIL -- 2.9%
121,415,518 Banco Bradesco Preferred............ 1,013
13,350 Petrol Brasileiros Preferred NPV.... 382
--------
1,395
--------
TOTAL PREFERRED STOCKS
(Cost $427)....................... 1,395
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 13
NATIONS FUNDS
Nations Emerging Markets Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C>
RIGHTS -- 0.0%+
(Cost $0)
BRAZIL -- 0.0%+
1,000 Telesp Celular Participacoes SA, ADR
Expire 10/12/00(!)................ $ 0++
--------
WARRANTS -- 0.0%+
BRAZIL -- 0.0%+
59,969 Ambev Cia De Bebidas
Expire 04/30/03(!)................ 13
4,990 Ambev Cia De Bebidas
Expire 04/30/03(!)................ 1
--------
14
--------
TOTAL WARRANTS
(Cost $3)......................... 14
--------
</TABLE>
<TABLE>
<CAPTION>
SHARES
(000)
------------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 10.4%
4,581 Nations Cash Reserves#............. 4,581
54 Taiwan Index Fund(!)............... 513
--------
TOTAL INVESTMENT COMPANIES
(Cost $5,088).................... 5,094
--------
TOTAL INVESTMENTS
(Cost $55,932*)........... 106.6% 52,137
--------
OTHER ASSETS AND
LIABILITIES (NET)......... (6.6)%
Cash............................... $ 172
Receivable for investment
securities sold.................. 1,406
Receivable for Fund shares sold.... 1,236
Dividends receivable............... 103
Interest receivable................ 9
Line of credit payable............. (364)
Collateral on securities loaned.... (4,581)
Investment advisory fee payable.... (43)
Administration fee payable......... (9)
Shareholder servicing and
distribution fees payable........ (3)
Payable for investment securities
purchased........................ (1,084)
Accrued Trustees' fees and
expenses......................... (18)
Accrued expenses and other
liabilities...................... (39)
--------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)............................ (3,215)
--------
NET ASSETS.................. 100.0% $ 48,922
========
NET ASSETS CONSIST OF:
Distributions in excess of net
investment loss.................. $ (430)
Accumulated net realized loss on
investments sold, foreign
currencies and net other
assets........................... (14,860)
Net unrealized depreciation of
investments, foreign currencies
and net other assets............. (3,795)
Paid-in capital.................... 68,007
--------
NET ASSETS......................... $ 48,922
========
</TABLE>
<TABLE>
<CAPTION>
VALUE
------------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($44,332,859 / 3,930,320 shares
outstanding)..................... $11.28
========
INVESTOR A SHARES:
Net asset value and redemption
price per share
($2,153,094 / 192,374 shares
outstanding)..................... $11.19
========
5.75%
Maximum sales charge...............
$11.87
Maximum offering price per share...
INVESTOR B SHARES:
Net asset value and offering price
per share(+) ($2,343,761 / 214,864
shares outstanding).............. $10.91
========
INVESTOR C SHARES:
Net asset value and offering price
per share(+) ($92,026 / 8,445
shares outstanding).............. $10.90
========
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized depreciation of $3,795 on
investment securities was comprised of gross appreciation of $4,678 and
gross depreciation of $8,473 for federal income tax purposes. At September
30, 2000, the aggregate cost of securities for federal income tax purposes
was $55,932.
(-) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
(!) Non-income producing security.
(+) The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
+ Amount represents less than 0.1%.
++ Amount represents less than $500.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc.
Represents cash collateral received from securities lending activity (Note
7).
ADR -- American Depository Receipt
ADS -- American Depository Shares
GDR -- Global Depository Receipt
GDS -- Global Depository Shares
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 14
NATIONS FUNDS
Nations Emerging Markets Fund
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
At September 30, 2000, sector diversification was as follows:
<TABLE>
% OF NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Common stocks:
Telecommunications services................................. 23.1% $ 11,237
Semiconductors.............................................. 12.9 6,329
Commercial banking.......................................... 7.0 3,405
Diversified electronics..................................... 5.7 2,807
Metals and mining........................................... 5.1 2,493
Department and discount stores.............................. 4.8 2,354
Software.................................................... 4.4 2,150
Diversified manufacturing................................... 4.1 1,982
Finance -- Miscellaneous.................................... 3.9 1,908
Real Estate................................................. 3.1 1,530
Beverages................................................... 3.0 1,483
Exploration and production.................................. 2.5 1,232
Broadcasting and cable...................................... 2.1 1,012
Electric power -- Non nuclear............................... 1.7 809
Automotive.................................................. 1.6 790
Oil and gas................................................. 1.6 778
Pharmaceuticals............................................. 1.2 577
Electrical equipment........................................ 1.0 496
Conglomerates............................................... 1.0 489
Publishing and advertising.................................. 0.9 450
Other....................................................... 2.6 1,323
---------- -------------
TOTAL COMMON STOCKS......................................... 93.3 45,634
PREFERRED STOCKS............................................ 2.9 1,395
RIGHTS...................................................... 0.0+ 0++
WARRANTS.................................................... 0.0+ 14
INVESTMENT COMPANIES........................................ 10.4 5,094
---------- -------------
TOTAL INVESTMENTS........................................... 106.6 52,137
OTHER ASSETS AND LIABILITIES (NET).......................... (6.6) (3,215)
---------- -------------
NET ASSETS.................................................. 100.0% $ 48,922
========== ==============
</TABLE>
---------------
+ Amount represents less than 0.1%.
++ Amount represents less than $500.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 15
NATIONS FUNDS
STATEMENTS OF OPERATIONS (UNAUDITED)
For the six months ended September 30, 2000
<TABLE>
INTERNATIONAL INTERNATIONAL INTERNATIONAL EMERGING
VALUE EQUITY OPPORTUNITIES(A) MARKETS
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
INVESTMENT INCOME:
Dividends (Net of foreign withholding taxes of $0,
$0, $1 and $21, respectively)..................... $ -- $ -- $ 5 $ 226
Dividends allocated from Portfolio (Net of foreign
withholding taxes of $1,410, $1,244, $0 and $0,
respectively)+.................................... 14,688 11,346 -- --
Interest............................................ -- -- 10 64
Interest allocated from Portfolio+.................. 2,519 1,552 -- --
Securities lending income........................... -- -- -- 52
Expenses allocated from Portfolio+.................. (5,179) (4,396) -- --
-------------- -------------- -------------- --------------
Total investment income......................... 12,028 8,502 15 342
-------------- -------------- -------------- --------------
EXPENSES:
Investment advisory fee............................. -- -- 6 279
Administration fee.................................. 911 778 35 62
Transfer agent fees................................. 223 143 8 10
Custodian fees...................................... -- -- 8 21
Legal and audit fees................................ 30 38 14 37
Registration and filing fees........................ 102 52 18 49
Trustees' fees and expenses......................... 9 8 2 9
Amortization of organization costs.................. -- -- -- 8
Interest expense.................................... -- -- -- 3
Printing expense.................................... 63 46 -- 36
Other............................................... 3 9 19 --
-------------- -------------- -------------- --------------
Subtotal........................................ 1,341 1,074 110 514
Shareholder servicing and distribution fees:
Investor A Shares................................. 300 48 1 3
Investor B Shares................................. 311 144 2 14
Investor C Shares................................. 88 5 1 1
-------------- -------------- -------------- --------------
Total expenses.................................. 2,040 1,271 114 532
Fees waived by investment advisor and/or
administrator..................................... (537) -- (100) --
Fees reduced by credits allowed by the custodian.... -- -- --* --
-------------- -------------- -------------- --------------
Net expenses.................................... 1,503 1,271 14 532
-------------- -------------- -------------- --------------
NET INVESTMENT INCOME/(LOSS)........................ 10,525 7,231 1 (190)
-------------- -------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS:
Net realized gain/(loss) from:
Security transactions............................. -- -- (12) 2,894
Security transactions allocated from Portfolio+... (4,489) 17,762 -- --
Foreign currencies and net other assets........... -- -- (7) (15)
Foreign currencies and net other assets allocated
from Portfolio+................................. (71) (483) -- --
-------------- -------------- -------------- --------------
Net realized gain/(loss) on investments............. (4,560) 17,279 (19) 2,879
-------------- -------------- -------------- --------------
Change in unrealized appreciation/(depreciation) of:
Securities (Note 9)............................... -- -- (56) (21,135)
Securities allocated from Portfolio (Note 9)+..... 17,972 (154,167) -- --
Foreign currencies and net other assets........... -- -- 5 1
Foreign currencies and net other assets allocated
from Portfolio+................................. (4) -- -- --
-------------- -------------- -------------- --------------
Net change in unrealized appreciation/(depreciation)
of investments.................................... 17,968 (154,167) (51) (21,134)
-------------- -------------- -------------- --------------
Net realized and unrealized gain/(loss) on
investments....................................... 13,408 (136,888) (70) (18,255)
-------------- -------------- -------------- --------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS........................................ $ 23,933 $ (129,657) $ (69) $ (18,445)
============== ============== ============== ==============
</TABLE>
---------------
* Amount represents less than $500.
+ Allocated from International Value Master Portfolio and International Equity
Master Portfolio, respectively.
(a) International Opportunities commenced operations on August 1, 2000.
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 16
NATIONS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERNATIONAL VALUE
----------------------------------------
SIX MONTHS
ENDED
9/30/00 YEAR ENDED
(UNAUDITED) 3/31/00(a)
----------------------------------------
<S> <C> <C>
(IN THOUSANDS)
Net investment income/(loss)................................ $ 10,525 $ 8,617
Net realized gain/(loss) on investments..................... -- 9,685#
Net realized gain/(loss) on investments allocated from
Portfolio+................................................ (4,560) 63,807
Net change in unrealized appreciation/(depreciation) of
investments............................................... -- (979)#
Net change in unrealized appreciation/(depreciation) of
investments allocated from Portfolio+..................... 17,968 38,439
-------------- --------------
Net increase/(decrease) in net assets resulting from
operations................................................ 23,933 119,569
Distributions to shareholders from net investment income:
Primary A Shares.......................................... (7,586) (6,376)
Primary B Shares.......................................... -- --
Investor A Shares......................................... (2,210) (1,624)
Investor B Shares......................................... (390) (268)
Investor C Shares......................................... (127) (77)
Distributions to shareholders from net realized gain on
investments:
Primary A Shares.......................................... (31,588) (8,649)
Primary B Shares.......................................... -- --
Investor A Shares......................................... (9,902) (2,023)
Investor B Shares......................................... (2,657) (477)
Investor C Shares......................................... (712) (138)
Net increase/(decrease) in net assets from Fund share
transactions.............................................. 428,178 599,041
-------------- --------------
Net increase/(decrease) in net assets....................... 396,939 698,978
NET ASSETS:
Beginning of period......................................... 851,962 152,984
-------------- --------------
End of period............................................... $ 1,248,901 $ 851,962
============== ==============
Undistributed net investment income/(loss)/(distributions in
excess of net investment income) at end of period......... $ 212 $ --
============== ==============
</TABLE>
---------------
# Amount represents results from operations prior to conversion to
master-feeder structure.
+ Allocated from International Value Master Portfolio and International Equity
Master Portfolio, respectively.
(a) As of October 18, 1999 and October 8, 1999, respectively, International
Value and International Equity converted to a master-feeder structure.
(b) International Opportunities commenced operations on August 1, 2000.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 17
NATIONS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INTERNATIONAL EMERGING MARKETS
----------------------------------------- OPPORTUNITIES -----------------------------------------
SIX MONTHS -------------- SIX MONTHS
ENDED PERIOD ENDED ENDED
9/30/00 YEAR ENDED 9/30/00(b) 9/30/00 YEAR ENDED
(UNAUDITED) 3/31/00(a) (UNAUDITED) (UNAUDITED) 3/31/00
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 7,231 $ 5,228 $ 1 $ (190) $ (153)
-- 99,696# (19) 2,879 3,874
17,279 90,176 -- -- --
-- (20,613)# (51) (21,134) 18,776
(154,167) 104,091 -- -- --
-------------- -------------- -------------- -------------- --------------
(129,657) 278,578 (69) (18,445) 22,497
(5,853) (3,424) -- -- (11)
-- -- -- -- --
(210) (85) -- -- --
(137) (52) -- -- --
(5) (5) -- -- --
(55,355) (112,315) -- -- --
-- -- -- -- --
(1,704) (4,362) -- -- --
(2,107) (4,558) -- -- --
(68) (143) -- -- --
294,497 3,532 6,448 4,458 16,119
-------------- -------------- -------------- -------------- --------------
99,401 157,166 6,379 (13,987) 38,605
942,902 785,736 -- 62,909 24,304
-------------- -------------- -------------- -------------- --------------
$ 1,042,303 $ 942,902 $ 6,378 $ 48,922 $ 62,909
============== ============== ============== ============== ==============
$ (3,187) $ (4,213) $ 1 $ (430) $ (240)
============== ============== ============== ============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 18
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY
<TABLE>
<CAPTION>
INTERNATIONAL VALUE
SIX MONTHS ENDED
SEPTEMBER 30, 2000 YEAR ENDED
(UNAUDITED) MARCH 31, 2000
-------------------- --------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 18,675 $ 351,870 25,792 $ 444,906
Issued as reinvestment of dividends....................... 1,207 21,426 541 9,269
Redeemed.................................................. (4,459) (83,871) (4,223) (71,784)
------- --------- ------- ---------
Net increase/(decrease)................................... 15,423 $ 289,425 22,110 $ 382,391
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 23,847 $ 448,820 29,999 $ 523,613
Issued as reinvestment of dividends....................... 593 10,489 196 3,460
Redeemed.................................................. (18,729) (352,371) (20,662) (365,045)
------- --------- ------- ---------
Net increase/(decrease)................................... 5,711 $ 106,938 9,533 $ 162,028
======= ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 1,121 $ 20,968 2,544 $ 44,056
Issued as reinvestment of dividends....................... 161 2,803 40 704
Redeemed.................................................. (136) (2,533) (147) (2,533)
------- --------- ------- ---------
Net increase/(decrease)................................... 1,146 $ 21,238 2,437 $ 42,227
======= ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 584 $ 10,893 745 $ 12,799
Issued as reinvestment of dividends....................... 41 727 11 182
Redeemed.................................................. (55) (1,043) (33) (586)
------- --------- ------- ---------
Net increase/(decrease)................................... 570 $ 10,577 723 $ 12,395
======= ========= ======= =========
Total net increase/(decrease)............................. 22,850 $ 428,178 34,803 $ 599,041
======= ========= ======= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 19
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY
SIX MONTHS ENDED
SEPTEMBER 30, 2000 YEAR ENDED
(UNAUDITED) MARCH 31, 2000
-------------------- --------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 54,096 $ 770,139 15,671 $ 202,540
Issued in exchange for:
Assets of Boatmen's Trust Company International Equity
Fund (Note 9)......................................... 2,048 29,129 -- --
Primary A Shares of Nations International Growth Fund
(Note 9).............................................. 1,260 17,669 -- --
Issued as reinvestment of dividends....................... 2,184 30,640 1,405 56,983
Redeemed.................................................. (41,144) (595,258) (17,980) (272,131)
------- --------- ------- ---------
Net increase/(decrease)................................... 18,444 $ 252,319 (904) $ (12,608)
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 51,498 $ 741,252 53,789 $ 802,774
Issued in exchange for:
Investor A Shares of Nations International Growth Fund
(Note 9).............................................. 1,309 18,066 -- --
A Shares of Pacific Horizon International Equity Fund
(Note 9).............................................. -- -- 3,095 41,876
Issued as reinvestment of dividends....................... 99 1,361 44 2,789
Redeemed.................................................. (50,197) (723,228) (55,232) (830,083)
------- --------- ------- ---------
Net increase/(decrease)................................... 2,709 $ 37,451 1,696 $ 17,356
======= ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 117 $ 2,883 311 $ 1,322
Issued in exchange for:
Investor B Shares of Nations International Growth Fund
(Note 9).............................................. 144 1,921 -- --
B Shares of Pacific Horizon International Equity Fund
(Note 9).............................................. -- -- 29 389
Issued as reinvestment of dividends....................... 157 2,110 112 4,442
Redeemed.................................................. (216) (3,004) (511) (7,354)
------- --------- ------- ---------
Net increase/(decrease)................................... 202 $ 3,910 (59) $ (1,201)
======= ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 64 $ 1,166 53 $ 616
Issued in exchange for:
Investor C Shares of Nations International Growth Fund
(Note 9).............................................. 30 392 -- --
K Shares of Pacific Horizon International Equity Fund
(Note 9).............................................. -- -- 62 808
Issued as reinvestment of dividends....................... 6 72 3 193
Redeemed.................................................. (60) (813) (116) (1,632)
------- --------- ------- ---------
Net increase/(decrease)................................... 40 $ 817 2 $ (15)
======= ========= ======= =========
Total net increase/(decrease)............................. 21,395 $ 294,497 735 $ 3,532
======= ========= ======= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 20
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL
OPPORTUNITIES
PERIOD ENDED
SEPTEMBER 30, 2000
(UNAUDITED)
-------------------
SHARES DOLLARS
-------------------
<S> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:+
Sold...................................................... 151 $1,515
Issued as reinvestment of dividends....................... -- --
Redeemed.................................................. -- --
--- ------
Net increase/(decrease)................................... 151 $1,515
=== ======
INVESTOR A SHARES:+
Sold...................................................... 195 $1,982
Issued as reinvestment of dividends....................... -- --
Redeemed.................................................. (1) (11)
--- ------
Net increase/(decrease)................................... 194 $1,971
=== ======
INVESTOR B SHARES:+
Sold...................................................... 199 $2,026
Issued as reinvestment of dividends....................... -- --
Redeemed.................................................. --* --*
--- ------
Net increase/(decrease)................................... 199 $2,026
=== ======
INVESTOR C SHARES:+
Sold...................................................... 99 $1,001
Issued as reinvestment of dividends....................... -- --
Redeemed.................................................. (6) (65)
--- ------
Net increase/(decrease)................................... 93 $ 936
=== ======
Total net increase/(decrease)............................. 637 $6,448
=== ======
</TABLE>
---------------
* Amount represents less than 500 shares and/or $500, as applicable.
+ International Opportunities Primary A, Investor A, Investor B and Investor C
Shares commenced operations on August 1, 2000.
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 21
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
EMERGING MARKETS
SIX MONTHS ENDED
SEPTEMBER 30, 2000 YEAR ENDED
(UNAUDITED) MARCH 31, 2000
-------------------- ------------------
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 1,217 $ 16,086 1,968 $ 26,549
Issued as reinvestment of dividends....................... -- -- --* --*
Redeemed.................................................. (854) (11,226) (1,065) (11,604)
------ -------- ------ --------
Net increase/(decrease)................................... 363 $ 4,860 903 $ 14,945
====== ======== ====== ========
INVESTOR A SHARES:
Sold...................................................... 834 $ 10,984 1,238 $ 15,527
Issued as reinvestment of dividends....................... -- -- -- --
Redeemed.................................................. (839) (11,240) (1,158) (14,764)
------ -------- ------ --------
Net increase/(decrease)................................... (5) $ (256) 80 $ 763
====== ======== ====== ========
INVESTOR B SHARES:
Sold...................................................... 13 $ 171 66 $ 878
Issued as reinvestment of dividends....................... -- -- -- --
Redeemed.................................................. (25) (325) (37) (429)
------ -------- ------ --------
Net increase/(decrease)................................... (12) $ (154) 29 $ 449
====== ======== ====== ========
INVESTOR C SHARES:
Sold...................................................... 1 $ 10 6 $ 83
Issued as reinvestment of dividends....................... -- -- -- --
Redeemed.................................................. --* (2) (9) (121)
------ -------- ------ --------
Net increase/(decrease)................................... 1 $ 8 (3) $ (38)
====== ======== ====== ========
Total net increase/(decrease)............................. 347 $ 4,458 1,009 $ 16,119
====== ======== ====== ========
</TABLE>
---------------
* Amount represents less than 500 shares and/or $500, as applicable.
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 22
NATIONS FUNDS
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT NET INVESTMENT
OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME INCOME
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL VALUE:
PRIMARY A SHARES*
Six months ended 9/30/2000#
(unaudited)................. $18.78 $0.20 $0.39 $0.59 $(0.17) $ --
Year ended 3/31/2000#......... 14.45 0.37 4.73 5.10 (0.28) --
Period ended 3/31/1999#....... 15.53 0.16 0.28 0.44 (0.18) --
Period ended 5/15/1998........ 13.17 0.09 2.56 2.65 -- --
Year ended 11/30/1997......... 11.29 0.09 1.91 2.00 (0.09) (0.01)
Period ended 11/30/1996**..... 10.00 0.06 1.29 1.35 (0.06) --
INVESTOR A SHARES*
Six months ended 9/30/2000#
(unaudited)................. $18.77 $0.17 $0.39 $0.56 $(0.16) $ --
Year ended 3/31/2000#......... 14.43 0.36 4.72 5.08 (0.25) --
Period ended 3/31/1999#....... 15.44 0.14 0.36 0.50 (0.17) --
Period ended 5/15/1998........ 13.13 0.08 2.52 2.60 -- --
Year ended 11/30/1997......... 11.29 0.01 1.91 1.92 (0.01) (0.05)
Period ended 11/30/1996**..... 10.00 0.04 1.31 1.35 (0.04) --
INVESTOR B SHARES
Six months ended 9/30/2000#
(unaudited)................. $18.64 $0.10 $0.40 $0.50 $(0.11) $ --
Year ended 3/31/2000#......... 14.40 0.22 4.66 4.88 (0.15) --
Period ended 3/31/1999***#.... 14.33 0.06 0.76 0.82 (0.13) --
INVESTOR C SHARES
Six months ended 9/30/2000#
(unaudited)................. $18.65 $0.10 $0.39 $0.49 $(0.11) $ --
Year ended 3/31/2000#......... 14.41 0.21 4.69 4.90 (0.17) --
Period ended 3/31/1999***#.... 13.33 0.06 1.77 1.83 (0.13) --
</TABLE>
---------------
+ Annualized
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
* The financial information for the fiscal periods through May 22, 1998
reflect the financial information for the Emerald International Equity Fund
Institutional and Retail Shares, which were reorganized into the
International Value Primary A and Investor A Shares, respectively, as of May
22, 1998.
** International Value Primary A and Investor A Shares commenced operations on
December 27, 1995.
*** International Value Investor B and Investor C Shares commenced operations
on May 22, 1998 and June 15, 1998, respectively.
# Per share net investment income has been calculated using the monthly
average shares method.
### Amount represents results prior to conversion to a master-feeder structure.
(a) The effect of the custodial expense offset (Note 2) on the operating
expense ratio, with and without waivers and/or expense reimbursements, was
less than 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 23
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF NET RATIO OF
DISTRIBUTIONS TOTAL NET ASSETS OPERATING INVESTMENT OPERATING
FROM NET DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO
REALIZED AND VALUE TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE
GAINS DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(0.88) $(1.05) $18.32 3.31% $868,372 1.11%+ 2.09%+ -- 1.22%+
(0.49) (0.77) 18.78 36.03 600,589 1.24(a) 2.11 12%### 1.34(a)
(1.34) (1.52) 14.45 1.48 142,546 1.30+ 1.36+ 44 1.39+
(0.29) (0.29) 15.53 20.54 119,412 1.25+ 2.06+ 88 1.26+
(0.02) (0.12) 13.17 17.75 54,277 1.21 0.89 29 1.21
-- (0.06) 11.29 13.47 17,528 0.00+ 0.00+ 50 3.46+
$(0.88) $(1.04) $18.29 3.17% $286,395 1.36%+ 1.84%+ -- 1.47%+
(0.49) (0.74) 18.77 35.86 186,649 1.49(a) 1.86 12%### 1.59(a)
(1.34) (1.51) 14.43 1.75 5,960 1.55+ 1.11+ 44 1.64+
(0.29) (0.29) 15.44 20.22 5,128 1.81+ 1.21+ 88 1.82+
(0.02) (0.08) 13.13 17.11 4,259 1.73 0.26 29 1.93
(0.02) (0.06) 11.29 13.54 115 0.00+ 1.83+ 50 57.40+
$(0.88) $(0.99) $18.15 2.87% $ 70,447 2.11%+ 1.09%+ -- 2.22%+
(0.49) (0.64) 18.64 34.51 50,999 2.24(a) 1.11 12%### 2.34(a)
(0.62) (0.75) 14.40 1.25 4,296 2.30+ 0.36+ 44 2.39+
$(0.88) $(0.99) $18.15 2.83% $ 23,687 2.11%+ 1.09%+ -- 2.22%+
(0.49) (0.66) 18.65 34.64 13,725 2.24(a) 1.11 12%### 2.34(a)
(0.62) (0.75) 14.41 3.98 182 2.30+ 0.36+ 44 2.39+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE> 24
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT NET INVESTMENT
OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME INCOME
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL EQUITY:
PRIMARY A SHARES
Six months ended 9/30/2000#
(unaudited)................. $16.74 $ 0.11 $(2.26) $(2.15) $(0.10) $ --
Year ended 3/31/2000#......... 14.12 0.10 4.91 5.01 (0.06) --
Year ended 3/31/1999#......... 14.81 0.11 0.39 0.50 (0.12) --
Year ended 3/31/1998#......... 13.13 0.11 1.95 2.06 (0.17) (0.05)
Year ended 3/31/1997#......... 13.50 0.08 0.11 0.19 (0.11) (0.00)##
Period ended 3/31/1996*#...... 11.75 0.07 1.80 1.87 (0.06) (0.04)
Year ended 5/31/1995#......... 12.06 0.14 (0.20) (0.06) (0.03) --
INVESTOR A SHARES
Six months ended 9/30/2000#
(unaudited)................. $16.51 $ 0.08 $(2.21) $(2.13) $(0.09) $ --
Year ended 3/31/2000#......... 13.97 0.06 4.86 4.92 (0.05) --
Year ended 3/31/1999#......... 14.67 0.08 0.40 0.48 (0.11) --
Year ended 3/31/1998#......... 13.01 0.07 1.94 2.01 (0.15) (0.04)
Year ended 3/31/1997#......... 13.39 0.05 0.11 0.16 (0.09) (0.00)##
Period ended 3/31/1996*#...... 11.67 0.04 1.78 1.82 (0.04) (0.04)
Year ended 5/31/1995#......... 12.00 0.11 (0.20) (0.09) (0.02) --
INVESTOR B SHARES
Six months ended 9/30/2000#
(unaudited)................. $16.06 $ 0.05 $(2.17) $(2.12) $(0.07) $ --
Year ended 3/31/2000#......... 13.75 (0.05) 4.72 4.67 (0.03) --
Year ended 3/31/1999#......... 14.56 (0.03) 0.38 0.35 (0.09) --
Year ended 3/31/1998#......... 12.83 (0.03) 1.92 1.89 -- --
Year ended 3/31/1997#......... 13.27 (0.05) 0.10 0.05 (0.04) (0.00)##
Period ended 3/31/1996*#...... 11.56 (0.02) 1.78 1.76 -- (0.03)
Year ended 5/31/1995#......... 11.96 0.05 (0.22) (0.17) (0.01) --
INVESTOR C SHARES
Six months ended 9/30/2000#
(unaudited)................. $15.72 $ 0.04 $(2.13) $(2.09) $(0.07) $ --
Year ended 3/31/2000#......... 13.52 (0.03) 4.60 4.57 (0.04) --
Year ended 3/31/1999#......... 14.34 (0.03) 0.37 0.34 (0.09) --
Year ended 3/31/1998#......... 12.74 (0.01) 1.89 1.88 (0.10) (0.02)
Year ended 3/31/1997#......... 13.13 0.02 0.10 0.12 (0.06) (0.00)##
Period ended 3/31/1996*#...... 11.45 (0.03) 1.75 1.72 -- (0.02)
Year ended 5/31/1995#......... 11.86 0.02 (0.21) (0.19) -- --
</TABLE>
---------------
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
* Fiscal year end changed to March 31. Prior to this, the fiscal year end was
May 31.
# Per share net investment income/(loss) has been calculated using the monthly
average shares method.
## Amount represents less than $0.01 per share.
### Amount represents results prior to conversion to a master-feeder structure.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE> 25
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
DISTRIBUTIONS RATIO OF RATIO OF NET
DISTRIBUTIONS IN EXCESS TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT
FROM NET OF NET DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO
REALIZED REALIZED AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER
GAINS GAINS DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS RATE
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(1.07) $ -- $(1.17) $13.42 (13.10)% $942,565 1.14%+(a) 1.55%+ --
(2.33) -- (2.39) 16.74 39.85 866,731 1.14 0.69 129%###
(1.07) -- (1.19) 14.12 3.68 743,861 1.13 0.79 146
(0.16) -- (0.38) 14.81 16.06 885,329 1.14 0.76 64
(0.42) (0.03) (0.56) 13.13 1.32 976,855 1.16 0.62 36
(0.02) -- (0.12) 13.50 16.01 849,731 1.17+ 0.65+ 26
(0.12) (0.10) (0.25) 11.75 (0.46) 572,940 1.03 1.17 92
$(1.07) $ -- $(1.16) $13.22 (13.19)% $ 70,309 1.39%+(a) 1.30%+ --
(2.33) -- (2.38) 16.51 39.54 43,111 1.39 0.44 129%###
(1.07) -- (1.18) 13.97 3.59 12,785 1.38 0.54 146
(0.16) -- (0.35) 14.67 15.77 13,477 1.39 0.51 64
(0.42) (0.03) (0.54) 13.01 1.08 9,443 1.41 0.37 36
(0.02) -- (0.10) 13.39 15.66 7,643 1.42+ 0.40+ 26
(0.12) (0.10) (0.24) 11.67 (0.69) 4,877 1.28 0.92 92
$(1.07) $ -- $(1.14) $12.80 (13.51)% $ 28,146 2.14%+(a) 0.55%+ --
(2.33) -- (2.36) 16.06 38.14 32,073 2.14 (0.31) 129%###
(1.07) -- (1.16) 13.75 2.65 28,266 2.13 (0.21) 146
(0.16) -- (0.16) 14.56 14.93 34,119 2.14 (0.24) 64
(0.42) (0.03) (0.49) 12.83 0.28 36,698 2.16 (0.38) 36
(0.02) -- (0.05) 13.27 15.25 40,426 1.99+ (0.17)+ 26
(0.12) (0.10) (0.23) 11.56 (1.30) 31,372 1.78 0.42 92
$(1.07) $ -- $(1.14) $12.49 (13.62)% $ 1,283 2.14%+(a) 0.55%+ --
(2.33) -- (2.37) 15.72 38.12 987 2.14 (0.31) 129%###
(1.07) -- (1.16) 13.52 2.63 824 2.13 (0.21) 146
(0.16) -- (0.28) 14.34 15.05 933 1.97 (0.07) 64
(0.42) (0.03) (0.51) 12.74 0.77 988 1.66 0.12 36
(0.02) -- (0.04) 13.13 15.09 652 2.09+ (0.27)+ 26
(0.12) (0.10) (0.22) 11.45 (1.56) 495 2.03 0.17 92
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF
OPERATING
EXPENSES TO
AVERAGE
NET ASSETS
---------------
<S> <C>
1.14%+
1.18
1.13
1.14
1.16
1.18+
1.04
1.39%+
1.43
1.38
1.39
1.41
1.43+
1.29
2.14%+
2.18
2.13
2.14
2.16
2.00+
1.79
2.14%+
2.18
2.13
1.97
1.66
2.10+
2.04
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE> 26
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED
VALUE NET AND UNREALIZED
BEGINNING INVESTMENT GAIN/(LOSS) ON
OF PERIOD INCOME/(LOSS) INVESTMENTS
--------------------------------------------------
<S> <C> <C> <C>
INTERNATIONAL OPPORTUNITIES
PRIMARY A SHARES
Period ended 9/30/2000* (unaudited)......................... $10.00 $ 0.02 $0.01
INVESTOR A SHARES
Period ended 9/30/2000* (unaudited)......................... $10.00 $ 0.01 $0.01
INVESTOR B SHARES
Period ended 9/30/2000* (unaudited)......................... $10.00 $(0.02) $0.03
INVESTOR C SHARES
Period ended 9/30/2000* (unaudited)......................... $10.00 $(0.02) $0.03
</TABLE>
---------------
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the deduction
of any applicable sales charges.
* International Opportunities Primary A, Investor A, Investor B and Investor C
Shares commenced operations on August 1, 2000.
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE> 27
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF NET RATIO OF
NET INCREASE/ NET ASSETS OPERATING INVESTMENT OPERATING
(DECREASE) IN NET ASSET END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO
NET ASSET VALUE VALUE TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE
FROM OPERATIONS END OF PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0.03 $10.03 0.30% $1,519 1.49%+ 0.43%+ 85% 10.64%+
$0.02 $10.02 0.20% $1,945 1.74%+ 0.18%+ 85% 10.89%+
$0.01 $10.01 0.10% $1,988 2.49%+ (0.57)%+ 85% 11.64%+
$0.01 $10.01 0.10% $ 926 2.49%+ (0.57)%+ 85% 11.64%+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE> 28
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT NET INVESTMENT
OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME INCOME
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EMERGING MARKETS
PRIMARY A SHARES
Six months ended 9/30/2000#
(unaudited)................. $15.76 $(0.04) $(4.44) $(4.48) $ -- $ --
Year ended 3/31/2000#......... 8.14 (0.05) 7.68 7.63 (0.01) --
Year ended 3/31/1999#......... 10.60 0.14 (2.53) (2.39) (0.07) --
Year ended 3/31/1998#......... 11.41 0.04 (0.76) (0.72) (0.09) --
Year ended 3/31/1997#......... 10.34 0.01 1.21 1.22 (0.02) (0.07)
Period ended 3/31/1996*#...... 10.00 (0.03) 0.37 0.34 -- (0.00)##
INVESTOR A SHARES
Six months ended 9/30/2000#
(unaudited)................. $15.65 $(0.05) $(4.41) $(4.46) $ -- $ --
Year ended 3/31/2000#......... 8.09 (0.09) 7.65 7.56 -- --
Year ended 3/31/1999#......... 10.57 0.10 (2.52) (2.42) (0.06) --
Year ended 3/31/1998#......... 11.39 0.01 (0.75) (0.74) (0.08) --
Year ended 3/31/1997#......... 10.32 (0.01) 1.21 1.20 (0.02) (0.05)
Period ended 3/31/1996*#...... 10.00 (0.05) 0.37 0.32 -- --
INVESTOR B SHARES
Six months ended 9/30/2000#
(unaudited)................. $15.32 $(0.10) $(4.31) $(4.41) $ -- $ --
Year ended 3/31/2000#......... 7.99 (0.16) 7.49 7.33 -- --
Year ended 3/31/1999#......... 10.49 0.05 (2.50) (2.45) (0.05) --
Year ended 3/31/1998#......... 11.31 (0.07) (0.75) (0.82) -- --
Year ended 3/31/1997#......... 10.26 (0.09) 1.20 1.11 -- --
Period ended 3/31/1996*#...... 10.00 (0.11) 0.37 0.26 -- --
INVESTOR C SHARES
Six months ended 9/30/2000#
(unaudited)................. $15.31 $(0.10) $(4.31) $(4.41) $ -- $ --
Year ended 3/31/2000#......... 7.98 (0.14) 7.47 7.33 -- --
Year ended 3/31/1999#......... 10.47 0.05 (2.49) (2.44) (0.05) --
Year ended 3/31/1998#......... 11.34 (0.05) (0.75) (0.80) (0.07) --
Year ended 3/31/1997#......... 10.27 (0.04) 1.20 1.16 (0.01) (0.02)
Period ended 3/31/1996*#...... 10.00 (0.10) 0.37 0.27 -- --
</TABLE>
---------------
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
* Emerging Markets Primary A, Investor A, Investor B and Investor C Shares
commenced operations on June 30, 1995.
# Per share net investment income/(loss) has been calculated using the monthly
average shares method.
## Amount represents less than $0.01 per share.
(a) The effect of the custodial expense offset (Note 2) on the operating expense
ratio, with and without waivers and/or expense reimbursements, was less than
0.01%.
(b) The effect of interest expense on the operating expense ratio was less than
0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE> 29
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF NET
OPERATING
EXPENSES
RATIO OF INCLUDING RATIO OF NET
DISTRIBUTIONS TOTAL NET ASSET NET ASSETS OPERATING INTEREST INVESTMENT
FROM NET DIVIDENDS VALUE END OF EXPENSES TO EXPENSE INCOME/(LOSS) PORTFOLIO
REALIZED AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TO AVERAGE TURNOVER
GAINS DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS NET ASSETS RATE
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ -- $ -- $11.28 (28.43)% $44,333 1.82%+ 1.83%+ (0.62)%+ 34%
-- (0.01) 15.76 93.71 56,234 1.90 1.91 (0.40) 61
-- (0.07) 8.14 (22.60) 21,689 1.78(a) (b) 1.66 71
-- (0.09) 10.60 (6.39) 73,797 1.57 -- 0.36 63
(0.06) (0.15) 11.41 11.97 76,483 1.74 -- 0.13 31
-- (0.00)## 10.34 3.42 47,560 2.13+ -- (0.38)+ 17
$ -- $ -- $11.19 (28.45)% $ 2,153 2.07%+ 2.08%+ (0.87)%+ 34%
-- -- 15.65 93.33 3,087 2.15 2.16 (0.65) 61
-- (0.06) 8.09 (22.90) 951 2.03(a) (b) 1.41 71
-- (0.08) 10.57 (6.60) 652 1.82 -- 0.11 63
(0.06) (0.13) 11.39 11.74 894 1.99 -- (0.12) 31
-- -- 10.32 3.20 477 2.38+ -- (0.63)+ 17
$ -- $ -- $10.91 (28.79)% $ 2,344 2.82%+ 2.83%+ (1.62)%+ 34%
-- -- 15.32 91.74 3,468 2.90 2.91 (1.40) 61
-- (0.05) 7.99 (23.42) 1,579 2.78(a) (b) 0.66 71
-- -- 10.49 (7.25) 1,247 2.57 -- (0.64) 63
(0.06) (0.06) 11.31 10.88 1,499 2.74 -- (0.87) 31
-- -- 10.26 2.60 1,209 3.13+ -- (1.38)+ 17
$ -- $ -- $10.90 (28.76)% $ 92 2.82%+ 2.83%+ (1.62)%+ 34%
-- -- 15.31 91.73 120 2.90 2.91 (1.40) 61
-- (0.05) 7.98 (23.37) 86 2.78(a) (b) 0.66 71
-- (0.07) 10.47 (7.17) 293 2.40 -- (0.47) 63
(0.06) (0.09) 11.34 11.34 226 2.24 -- (0.37) 31
-- -- 10.27 2.70 23 3.02+ -- (1.27)+ 17
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF
OPERATING
EXPENSES TO
AVERAGE
NET ASSETS
---------------
<S> <C>
1.84%+
2.54
1.98(a)
1.57
1.74
2.13+
2.09%+
2.79
2.23(a)
1.82
1.99
2.38+
2.84%+
3.54
2.98(a)
2.57
2.74
3.13+
2.84%+
3.54
2.98(a)
2.40
2.24
3.02+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE> 30
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Nations Reserves ("Reserves") and Nations Funds Trust ("Funds Trust") are each
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end investment company. At September 30, 2000, Reserves
offered sixteen separate portfolios and Funds Trust offered five separate
portfolios. These financial statements pertain only to the international stock
portfolios of Reserves and Funds Trust: International Value Fund, International
Equity Fund, International Opportunities Fund and Emerging Markets Fund (each a
"Fund" and collectively, the "Funds"). Financial statements for the other
portfolios of Reserves and Funds Trust are presented under separate cover. The
Funds currently offer four classes of shares: Primary A Shares, Investor A
Shares, Investor B Shares and Investor C Shares. Shareholders of a Fund have
equal voting rights on matters affecting all shareholders of the Fund. In
addition, each class of shares of a Fund has exclusive voting rights on matters
that relate solely to that class and separate voting rights on matters in which
the interests of one class differ from the interests of any other class.
International Value Fund and International Equity Fund (the "Feeder Funds") seek
to achieve their investment objectives by investing substantially all of their
assets in International Value Master Portfolio and International Equity Master
Portfolio, respectively (the "Master Portfolios"), each a series of Nations
Master Investment Trust (the "Master Trust"), another open-end management
investment company in the Nations Funds family. The Master Portfolios each have
the same investment objective as that of its corresponding Feeder Fund. The
value of the Feeder Funds' investments in the respective Master Portfolios
included in the Statements of net assets reflects the Feeder Funds'
proportionate beneficial interest in the net assets of the respective Master
Portfolios (98.1% at September 30, 2000 for International Value Master Portfolio
and 99.1% for International Equity Master Portfolio). The financial statements
of the Master Portfolios, including their schedules of investments, are included
elsewhere within this report and should be read in conjunction with the Feeder
Funds' financial statements. Other funds not registered under the 1940 act
offered by the Nations Offshore Funds and managed by Banc of America Advisors,
Inc. ("BAAI"), whose financial statements are not presented here, also invest in
the Master Portfolios.
On August 1, 2000, the International Opportunities Fund commenced operations in
a master-feeder structure. The Fund seeks to achieve its investment objective by
investing substantially all of its assets in the International Opportunities
Master Portfolio of the Master Trust, which has the same investment objective as
the Fund. Because the value of the Fund's investment in the International
Opportunities Master Portfolio at September 30, 2000 represented substantially
all of the beneficial interest in the International Opportunities Master
Portfolio, financial statements of the International Opportunities Master
Portfolio have not been prepared and references in this report to International
Opportunities Fund should be read to include references to the corresponding
Master Portfolio.
1. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
certain estimates and assumptions that affect the reported amounts and
disclosures in the financial statements. Actual results could differ from those
estimates. The following is a summary of significant accounting policies
followed by the Funds in the preparation of their financial statements.
Securities valuation: Securities traded on a recognized exchange or on NASDAQ
are valued at the last sale price on the exchange or market on which such
securities are primarily traded. Securities traded only over-the-counter are
valued at the last sale price, or if no sale occurred on such day, at the mean
of the current bid and asked prices. Debt securities are generally valued by an
independent pricing service. Prices provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as yield, type of issue, coupon rate, maturity and
general market conditions. Restricted securities, securities for which market
quotations are not readily available, and certain other assets may be valued
under procedures adopted by the Board of Trustees. Short-term investments that
mature in 60 days or less are valued at amortized cost, which approximates
current market value.
The valuation of each Feeder Fund's investment in its corresponding Master
Portfolio is based on the reported net asset value of that Master Portfolio. The
Master Portfolios use valuation policies consistent with those described above.
Foreign currency translation: The books and records of the Funds are maintained
in U.S. dollars. Foreign currencies, investments and other assets and
liabilities are translated into U.S. dollars at the current exchange rates.
Purchases and sales of investment securities and income and expenses are
translated on the respective dates of
26
<PAGE> 31
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
such transactions. Net realized foreign currency gains and losses resulting from
changes in exchange rates include foreign currency gains and losses between
trade date and settlement date of securities transactions, foreign currency
transactions and the difference between the amounts of interest and dividends
recorded on the books of a Fund and the amounts actually received. The effects
of changes in foreign currency exchange rates on securities are not separately
stated in the Statements of operations from the effects of changes in market
prices of those securities, but are included with the net realized and
unrealized gain or loss on securities.
Forward foreign currency transactions: Generally, each Fund may enter into
forward currency exchange contracts only under two circumstances: (i) when a
Fund enters into a contract for the purchase or sale of a security denominated
in a foreign currency, to "lock" in the U.S. exchange rate of the transaction,
with such period being a short-dated contract covering the period between
transaction date and settlement date; and (ii) when the investment adviser or
sub-adviser believes that the currency of a particular foreign country may
experience a substantial movement against the U.S. dollar. Forward foreign
currency contracts are valued at the forward rate and are marked-to-market
daily. The change in market value is recorded by a Fund as an unrealized gain or
loss. When the contract is closed or offset with the same counterparty, a Fund
records a realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed or
offset.
Forward foreign currency contracts will be used primarily to protect the Funds
from adverse currency movements and will generally not be entered into for terms
greater than one year. The use of forward foreign currency contracts does not
eliminate fluctuations in the underlying prices of a Fund's investment
securities; however, it does establish a rate of exchange that can be achieved
in the future. The use of forward contracts involves the risk that anticipated
currency movements will not be accurately predicted. A forward contract would
limit the risk of loss due to a decline in the value of a particular currency;
however, it also would limit any potential gain that might result should the
value of the currency increase instead of decrease. These contracts may involve
market risk in excess of the unrealized gain or loss reflected in the Statements
of net assets. In addition, the Funds could be exposed to risks if
counterparties to the contracts are unable to meet the terms of their contracts.
The counterparty risk exposure is, therefore, closely monitored and contracts
are only executed with high credit quality financial institutions.
Securities transactions and investment income: Securities transactions are
accounted for on trade date. Realized gains and losses are computed based on the
specific identification of securities sold. Interest income, adjusted for
accretion of discounts and amortization of premiums, is earned from settlement
date and recorded on an accrual basis. Dividend income is recorded on
ex-dividend date, except that if the ex-dividend date has passed, certain
dividends from foreign securities are recorded as soon as the Funds are informed
of the ex-dividend date. Each Fund's investment income and realized and
unrealized gains and losses are allocated among its share classes based upon the
relative net assets of each class of shares.
The Feeder Funds record their share of the investment income and realized and
unrealized gains and losses reported by the Master Portfolios on a daily basis.
The investment income and realized and unrealized gains and losses are allocated
daily to investors in the Master Portfolios based upon the value of their
investments in the Master Portfolios.
Dividends and distributions to shareholders: Distributions from net investment
income are declared and paid each calendar quarter for all Funds except
International Value, which declares and pays distributions annually. Each Fund
will distribute net realized capital gains (including net short-term capital
gains) at least annually after the fiscal year in which the capital gains were
earned, unless offset by any available capital loss carryforward. Income
distributions and capital gain distributions on a Fund level are determined in
accordance with federal income tax regulations which may differ from accounting
principles generally accepted in the United States of America.
Federal income tax: Each Fund intends to continue to qualify as a regulated
investment company by complying with the applicable requirements of the Internal
Revenue Code of 1986, as amended, and by distributing substantially all of its
earnings to its shareholders. Therefore, no provision is made for federal income
or excise taxes.
The Funds may be subject to foreign taxes on income, gains on investments or
currency repatriation, a portion of which may be recoverable. The Funds will
accrue such taxes and recoveries as applicable, based upon their current
interpretation of tax rules and regulations that exist in the markets in which
they invest.
27
<PAGE> 32
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Expenses: General expenses of Reserves and Funds Trust are allocated to the
Funds based upon their relative net assets or other expense allocation
methodologies determined by the nature of the expense. Expenses directly
attributable to a Fund or class of shares are charged to such Fund or class. The
Funds bear all costs in connection with their organization, including the fees
and expenses of registering and qualifying their shares for distribution under
federal and state securities regulations. All such costs are being amortized on
a straight line basis over a period of five years from commencement of
operations. The Feeder Funds record their share of the expenses reported by the
Master Portfolios on a daily basis. The expenses are allocated daily to
investors in the Master Portfolios based upon the value of the Feeder Funds'
investments in the Master Portfolios.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS
Each of Reserves and Funds Trust has entered into an investment advisory
agreement (the "Investment Advisory Agreements") with BAAI, a wholly-owned
subsidiary of Bank of America, N.A. ("Bank of America"), which in turn is a
wholly-owned banking subsidiary of Bank of America Corporation, a bank holding
company organized as a Delaware corporation, pursuant to which BAAI provides
investment advisory services to the Funds. Under the terms of the Investment
Advisory Agreements, BAAI is entitled to receive an advisory fee, calculated
daily and payable monthly, based on the following annual rates multiplied by the
average daily net assets of each Fund:
<TABLE>
<CAPTION>
ANNUAL
RATE
------
<S> <C>
International Opportunities................... 0.80%
Emerging Markets.............................. 1.00
</TABLE>
The Feeder Funds indirectly pay for investment advisory services through their
investments in their corresponding Master Portfolios (See Note 2 of Notes to
financial statements of the Master Portfolios).
Funds Trust has, on behalf of the International Opportunities Fund, entered into
a sub-advisory agreement with BAAI and Marsico Capital Management, LLC
("Marsico"), pursuant to which Marsico is entitled to receive a sub-advisory fee
from BAAI at the maximum annual rate of 0.45% of the Fund's average daily net
assets. Marsico Management Holdings, LLC, a partially-owned subsidiary of Bank
of America, owns 50% of the equity of Marsico. On June 28, 2000, Bank of America
announced its intention to purchase the remaining 50% equity interest in
Marsico. The proposed purchase is not expected to result in any change in the
Marsico personnel who manage the Fund or in the way that the Fund is managed.
Reserves has, on behalf of the Emerging Markets Fund, entered into a
sub-advisory agreement (the "Sub-Advisory Agreements") with BAAI and Gartmore
Global Partners ("Gartmore"). Gartmore is a general partnership which is an
indirect wholly-owned subsidiary of Nationwide Mutual Insurance Company. Under
the Sub-Advisory Agreements, Gartmore is entitled to receive a sub-advisory fee
from BAAI at the maximum annual rate of 0.66 % of the Fund's average daily net
assets. Prior to May 15, 2000, Gartmore received a sub-advisory fee from BAAI at
the maximum annual rate of 0.85% of the Fund's average daily net assets.
The Feeder Funds indirectly pay for sub-advisory services through their
investments in their corresponding Master Portfolios (See Note 2 of Notes to
financial statements of the Master Portfolios).
Stephens Inc. ("Stephens") and BAAI serve as co-administrators of Reserves and
Funds Trust. Under the co-administration agreements, Stephens and BAAI are
currently entitled to receive a combined fee, computed daily and paid monthly,
at the maximum annual rate of 0.22% of the average daily net assets of
International Opportunities Fund and Emerging Markets Fund. International Value
Fund and International Equity Fund pay a monthly fee at the maximum annual rate
of 0.17% of their average daily net assets. The Bank of New York ("BNY") serves
as sub-administrator of Reserves and Funds Trust pursuant to agreements with
BAAI. For the six months ended September 30, 2000, Stephens and BAAI earned
0.03% and 0.06%, respectively, of the Funds' average daily net assets for their
co-administration services.
BAAI and/or the sub-advisers and Stephens may, from time to time, reduce their
fees payable by each Fund. Effective August 1, 2000, BAAI and/or the
sub-advisers and Stephens agreed to reimburse expenses and/or waive their fees
until July 31, 2001 to the extent that total expenses (excluding shareholder
servicing and distribution fees), exceed an annual rate of 1.90% of Emerging
Markets Fund's average daily net assets. Prior to that date, BAAI and/or the
sub-advisers and Stephens had voluntarily agreed to reimburse expenses and/or
waive their fees to maintain this total expense limit.
BNY serves as the custodian of the Reserves' and Funds Trust's assets. For the
six months ended September 30, 2000, expenses of the Funds were reduced by $355
under
28
<PAGE> 33
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
expense offset arrangements with BNY. The Funds could have invested a portion of
the assets utilized in connection with the expense offset arrangements in an
income producing asset if they had not entered into such arrangements.
No officer, director or employee of Bank of America or BAAI, or any affiliate
thereof, receives any compensation from Reserves and Funds Trust for serving as
Trustee or Officer of Reserves and Funds Trust.
PFPC Inc. ("PFPC") serves as the transfer agent for the Funds' shares. Bank of
America serves as the sub-transfer agent for the Primary A and Primary B Shares
of the Funds. For the six months ended September 30, 2000, Bank of America
earned approximately $6,509 for providing such services.
Stephens also serves as distributor of the Funds' shares. For the six months
ended September 30, 2000, the Funds were informed that the distributor received
$34,444 in front-end sales charges for sales of Investor A Shares and $113,101
in contingent deferred sales charges from redemption of shares which were
subject to such charges. A substantial portion of these fees is paid to
affiliates of Bank of America.
Reserves' and Funds Trust's eligible Trustees may participate in non-qualified
deferred compensation and retirement plans which may be terminated at any time.
All benefits provided under these plans are unfunded and any payments to plan
participants are paid solely out of the Funds' assets. Income earned on each
plan participant's deferral account is tied to the rate of return of the
eligible mutual funds selected by the participants or, if no funds are selected,
to the rate of return of Nations Treasury Fund, a portfolio of Nations Fund,
Inc., another registered investment company in the Nations Funds family. The
expense for the deferred compensation and retirement plans is included in
"Trustees' fees and expenses" in the Statements of operations.
A significant portion of each Fund's Primary A Shares represents investments by
fiduciary accounts over which Bank of America has either sole or joint
investment discretion.
3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS
Reserves and Funds Trust each has adopted shareholder servicing plans and
distribution plans for the Investor A, Investor B and Investor C Shares of each
Fund. The shareholder servicing plans permit the Funds to compensate or
reimburse servicing agents for shareholder services provided by the servicing
agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940
Act, permit the Funds to compensate or reimburse the distributor (and for
Investor A Shares, the distributor and/or selling agents) for activities or
expenses primarily intended to result in the sale of the classes' shares.
Payments are made at an annual rate, as a percentage of average daily net
assets, set from time to time by the Board of Trustees, and are charged as
expenses of each Fund directly to the applicable class. A substantial portion of
the expenses incurred pursuant to these plans is paid to affiliates of Bank of
America and BAAI.
At September 30, 2000, the rates in effect and plan limits, as a percentage of
average daily net assets, were as follows:
<TABLE>
<CAPTION>
CURRENT PLAN
RATE LIMIT
----------------
<S> <C> <C>
Investor A Combined Shareholder
Servicing and Distribution Plan.... 0.25% 0.25%
Investor B and Investor C Shareholder
Servicing Plans.................... 0.25% 0.25%
Investor B and Investor C
Distribution Plans................. 0.75% 0.75%
</TABLE>
4. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, excluding
long-term U.S. government securities and short-term investments, for the six
months ended September 30, 2000 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
(000) (000)
--------------------
<S> <C> <C>
International Opportunities...... $ 8,190 $ 2,730
Emerging Markets................. 22,955 18,882
</TABLE>
There were no purchases or sales of long-term U.S. government securities for the
six months ended September 30, 2000.
5. SHARES OF BENEFICIAL INTEREST
As of September 30, 2000, an unlimited number of shares of beneficial interest
without par value were authorized for Reserves and Funds Trust. Reserves' and
Fund Trust's Declarations of Trust authorize the Boards of Trustees to classify
or reclassify any authorized, but unissued shares into one or more additional
classes or series of shares. See Schedules of capital stock activity.
6. LINES OF CREDIT
Reserves and Funds Trust each participate with other Nations Funds in an
uncommitted line of credit provided
29
<PAGE> 34
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
by BNY under a line of credit agreement (the "Agreement"). Advances under the
Agreement are taken primarily for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. Interest on borrowings is payable at a specified
Federal Funds rate plus 0.50% on an annualized basis. Each participating Fund
maintains a ratio of no less than 4 to 1 net assets (not including amounts
borrowed pursuant to the Agreement) to the aggregate amount of indebtedness
pursuant to the Agreement.
For the six months ended September 30, 2000, borrowings by the Funds under the
Agreement were as follows:
<TABLE>
<CAPTION>
AVERAGE
AMOUNT AVERAGE
OUTSTANDING INTEREST
FUND (000) RATE
---------------------------------------------------------
<S> <C> <C>
Emerging Markets................ $92 7.02%
</TABLE>
The average amount outstanding was calculated based on daily balances in the
period.
Reserves and Funds Trust also participate with other Nations Funds in a
committed line of credit provided by BNY. Interest on borrowings under the
committed line is payable at a specified Federal Funds rate plus 0.50% on an
annualized basis. A facility fee of 0.09% per annum of the total amounts
available under the line of credit is charged, of which each Fund pays its pro
rata share. This fee is paid quarterly in arrears. Each participating Fund is
required to maintain an asset coverage ratio of at least 300% under the terms of
the arrangement. For the six months ended September 30, 2000, there were no
borrowings by the Funds under the committed line of credit.
7. SECURITIES LENDING
Under an agreement with BNY, the Funds can lend their securities to approved
brokers, dealers and other financial institutions. Loans are collateralized by
cash, in an amount at least equal to the market value of the securities loaned.
The cash collateral received is invested in Nations Cash Reserves. A portion of
the income generated by the investment of the collateral, net of any rebates
paid by BNY to borrowers, is remitted to BNY as lending agent, and the remainder
is paid to the Fund. Generally, in the event of counterparty default, the Fund
has the right to use the collateral to offset losses incurred. There would be a
potential loss to the Fund in the event the Fund is delayed or prevented from
exercising its right to dispose of the collateral. The Fund bears the risk of
loss with respect to the investment of collateral.
At September 30, 2000, the following Funds had securities on loan:
<TABLE>
<CAPTION>
MARKET VALUE OF MARKET VALUE
LOANED SECURITIES OF COLLATERAL
FUND (000) (000)
------------------------------------------------------------
<S> <C> <C>
Emerging Markets......... $4,219 $4,581
</TABLE>
8. CAPITAL LOSS CARRYFORWARD
At March 31, 2000, the Emerging Markets Fund had available for federal income
tax purposes unused capital losses of $17,259,091, with $2,189,907 expiring in
2006 and $15,069,184 expiring in 2007.
At March 31, 2000, Emerging Markets Fund utilized capital losses of $1,635,307
during the year.
Under current tax law, capital and currency losses realized after October 31 may
be deferred and treated as occurring on the first day of the following fiscal
year. For the year ended March 31, 2000, Emerging Markets Fund elected to defer
losses of $63,337 occurring between November 1, 1999 and March 31, 2000 under
these rules.
9. REORGANIZATIONS
ACQUISITION OF PACIFIC HORIZON FUNDS
On May 14, 1999, the International Equity Fund (the "Acquiring Fund"), acquired
the assets and liabilities of the Pacific Horizon International Equity Fund (the
"Acquired Fund"), in a tax-free reorganization in exchange for shares of the
Acquiring Fund, pursuant to a plan of reorganization approved by the Acquired
Fund's shareholders. The number and value of shares issued by the Acquiring Fund
are presented in the Schedules of capital stock activity. Net assets and
unrealized appreciation as of the reorganization date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ACQUIRED
TOTAL NET TOTAL NET ASSETS OF FUND
ASSETS OF ASSETS OF ACQUIRING FUND UNREALIZED
ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION APPRECIATION
(000) (000) (000) (000)
-----------------------------------------------------------------
<S> <C> <C> <C>
$43,073 $766,603 $809,676 $5,349
</TABLE>
CHANGE OF REGISTERED INVESTMENT COMPANY
On August 20, 1999, the International Value, International Equity and Emerging
Markets Funds, newly established shell portfolios of Reserves (the "Successor
Funds"), acquired the assets and liabilities of their predecessor funds, which
were series of Nations Fund,
30
<PAGE> 35
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Inc., Nations Fund, Inc. and Nations Fund Portfolios, Inc., respectively,
pursuant to a plan of reorganization approved by each predecessor fund's
shareholders. The predecessor funds had the same name, investment objective and
principal investment strategies as the Successor Funds. The acquisition was
accomplished by a tax-free exchange of shares of the Successor Funds in an
amount equal to the value of the outstanding shares of the predecessor funds.
The financial statements of the Successor Funds reflect the historical financial
results of the predecessor funds prior to the reorganizations.
CONVERSION OF COMMON TRUST FUNDS
On May 12, 2000, the International Equity Fund (the "Acquiring Fund"), acquired
the assets of Boatmen's Trust Company International Equity Fund, a common trust
fund, managed by Bank of America, N.A., (the "Acquired Fund"), in a tax-free
exchange for shares of the Acquiring Fund. The number and value of shares issued
by the Acquiring Fund are presented in the Schedules of capital stock activity.
Net assets and unrealized appreciation as of the conversion date were as
follows:
<TABLE>
<CAPTION>
TOTAL NET ACQUIRED
TOTAL NET TOTAL NET ASSETS OF FUND
ASSETS OF ASSETS OF ACQUIRING FUND UNREALIZED
ACQUIRED FUND ACQUIRING FUND AFTER CONVERSION APPRECIATION
(000) (000) (000) (000)
-----------------------------------------------------------------
<S> <C> <C> <C>
$29,129 $868,368 $897,497 $5,808
</TABLE>
On September 8, 2000, the International Equity Fund (the "Acquiring Fund"),
acquired the assets and liabilities of Nations International Growth Fund (the
"Acquired Fund"), in a tax-free reorganization in exchange for shares of the
Acquiring Fund, pursuant to a plan of reorganization approved by the Acquired
Fund's shareholders. The number and value of shares issued by the Acquiring Fund
are presented in the Schedules of capital stock activity. Net assets and
unrealized appreciation as of the reorganization date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ACQUIRED
TOTAL NET TOTAL NET ASSETS OF FUND
ASSETS OF ASSETS OF ACQUIRING FUND UNREALIZED
ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION APPRECIATION
(000) (000) (000) (000)
-----------------------------------------------------------------
<S> <C> <C> <C>
$38,048 $1,023,329 $1,061,377 $8,549
</TABLE>
31
<PAGE> 36
NATIONS MASTER INVESTMENT TRUST
Nations International Value Master Portfolio and Nations International Equity
Master Portfolio Semi-Annual Report
SEPTEMBER 30, 2000 (UNAUDITED)
The following pages should be read in conjunction with the Nations International
Value and Nations International Equity Funds' Semi-Annual Report.
32
<PAGE> 37
NATIONS MASTER INVESTMENT TRUST
Nations International Value Master Portfolio
STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 94.9%
ARGENTINA -- 0.8%
494,000 Telecom Argentina Stet............. $ 10,683
----------
BRAZIL -- 6.4%
937,000 Banco Bradesco SA, ADR............. 7,821
241,760 Brasil Telecom Part, ADR........... 14,083
2,434,450 Centrais Eletricas Brasileiras SA,
ADR (Electrobas)(!).............. 23,751
882,000 Companhia de Bebidas das Americas
(Ambev).......................... 19,514
573,600 Petrol Brasileiros, ADR............ 16,415
----------
81,584
----------
CANADA -- 4.2%
1,800,000 Sun Life Financial Services of
Canada(!)........................ 37,124
609,000 Telus Corporation.................. 15,826
----------
52,950
----------
CHINA -- 1.0%
614,000 PetroChina Company Limited......... 12,127
----------
DENMARK -- 1.6%
158,915 Den Danske Bank(!)................. 20,188
----------
FRANCE -- 5.9%
479,200 Alcatel SA, ADR.................... 30,130
629,800 Compagnie Generale des
Establessements Michelin......... 17,507
23,700 Eridania Beghin - Say SA........... 2,039
341,170 Total Fina Elf..................... 25,055
----------
74,731
----------
GERMANY -- 8.0%
428,000 BASF AG............................ 15,595
858,000 Bayersche Motoren Werke AG......... 29,529
151,710 Deutsche Telekom AG (REGD)......... 5,295
568,300 Deutsche Telekom AG-Sponsored
ADR(!)........................... 19,464
347,400 E.On AG(!)......................... 17,934
46,000 Munchener Ruckvers................. 13,599
----------
101,416
----------
HONG KONG -- 3.3%
4,847,500 CLP Holdings Limited............... 21,760
3,159,000 Swire Pacific, Ltd. 'A', ADR....... 19,691
----------
41,451
----------
IRELAND -- 3.1%
931,140 Allied Irish Banks plc............. 20,369
609,000 Bank of Ireland.................... 19,222
----------
39,591
----------
ITALY -- 2.6%
484,840 ENI SpA............................ 25,666
75,390 Telecom Italia SpA................. 7,916
----------
33,582
----------
JAPAN -- 9.9%
188,000 Daiichi Pharmaceutical Company,
Ltd. ............................ 4,776
123,100 Hitachi Ltd., ADR.................. 14,064
1,230,000 Komatsu............................ 7,478
540,000 Komatsu Ltd........................ 13,133
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C>
JAPAN -- (CONTINUED)
43,400 Matsushita Electric Industrial
Company Ltd., ADR................ $ 11,398
10,262,000 Mitsubishi Heavy Industries,
Ltd. ............................ 40,645
690,700 Tokio Marine & Fire Insurance
Company, Ltd., ADR............... 34,665
----------
126,159
----------
MEXICO -- 2.5%
605,850 Telefonos de Mexico, ADR........... 32,223
----------
NETHERLANDS -- 3.1%
187,000 Akzo Nobel NV, ADR(!).............. 7,877
484,942 ING Groep NV, ADR.................. 31,945
----------
39,822
----------
NEW ZEALAND -- 1.5%
935,000 Telecom Corporation of New Zealand
Ltd., ADR........................ 18,700
----------
PORTUGAL -- 1.9%
2,359,800 Portugal Telecommunications, ADR... 23,893
----------
SINGAPORE -- 2.5%
263,453 DBS Group Holdings, ADR............ 11,626
3,464,100 Jardine Matheson Holdings, Ltd.,
ADR.............................. 20,265
----------
31,891
----------
SOUTH AFRICA -- 1.9%
781,941 De Beers Consolidated Mines, Ltd.,
ADR.............................. 21,650
379,600 South African Breweries plc........ 2,582
----------
24,232
----------
SOUTH KOREA -- 1.9%
833,000 Korea Electric Power Corporation,
ADR.............................. 10,881
714,300 Pohang Iron & Steel Company Ltd.,
ADR.............................. 13,304
----------
24,185
----------
SPAIN -- 2.5%
444,333 Banco Bilboa Vizcaya Argentaria
SA............................... 6,665
416,305 Telefonica SA, ADR................. 24,744
----------
31,409
----------
SWITZERLAND -- 4.4%
1,272,000 Allied Zurich plc, ADR............. 28,793
206,200 Nestle SA.......................... 21,474
22,600 Swisscom AG........................ 5,538
----------
55,805
----------
UNITED KINGDOM -- 25.2%
365,000 Allied Domecq plc.................. 1,819
826,500 BAE Systems plc(!)................. 17,878
137,000 BOC Group plc...................... 1,813
1,775,700 British American Tobacco plc,
ADR.............................. 23,195
1,540,000 British Energy plc, ADR............ 16,074
220,100 British Telecom plc, Sponsored
ADR.............................. 23,564
632,500 Cadbury Schweppes plc.............. 15,220
379,500 Corus Group plc, ADR............... 2,941
1,136,851 Diageo plc, ADR.................... 40,145
266,500 HSBC Holdings plc.................. 19,028
594,900 Imperial Chemical Industries plc,
ADR.............................. 13,794
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
33
<PAGE> 38
NATIONS MASTER INVESTMENT TRUST
Nations International Value Master Portfolio
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM -- (CONTINUED)
1,421,060 Invensys plc....................... $ 6,251
823,465 Marks & Spencer plc, ADR........... 14,829
336,200 National Power plc................. 23,198
321,500 PowerGen plc....................... 10,127
2,037,100 Reckitt & Colman................... 24,892
312,000 Rolls - Royce plc.................. 3,938
1,339,700 Royal & Sun Alliance Insurance
Group plc........................ 8,952
4,371,416 Safeway plc........................ 18,548
1,352,600 Unilever plc....................... 35,506
----------
321,712
----------
VENEZUELA -- 0.7%
377,900 Cia Anonima Nacional Telefonos de
Venezuela, ADR (CANTV)........... 9,235
----------
TOTAL COMMON STOCKS
(Cost $1,142,804)................ 1,207,569
----------
PREFERRED STOCKS -- 1.4%
(Cost $20,817)
BRAZIL -- 1.4%
221,700 Telebras, ADR Pfd. Block........... 17,542
----------
RIGHTS -- 0.0%+
(Cost $0)
BRAZIL -- 0.0%+
7,132 Telesp Celular Participacoes SA,
ADR
Expire 10/12/00(!)............... 0++
----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 32.8%
(Cost $418,065)
418,065 Nations Cash Reserves#............ $ 418,065
----------
TOTAL INVESTMENTS
(Cost $1,581,686*)....... 129.1% 1,643,176
----------
OTHER ASSETS AND
LIABILITIES (NET)........ (29.1)%
Cash.............................. $ 16,948
Dividends receivable.............. 3,628
Interest receivable............... 224
Prepaid expenses.................. 29
Collateral on securities loaned... (376,256)
Investment advisory fee payable... (815)
Administration fee payable........ (51)
Payable for investment securities
purchased....................... (13,851)
Accrued Trustees' fees and
expenses........................ (10)
----------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)........................... (370,154)
----------
NET ASSETS................. 100.0% $1,273,022
==========
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $61,490 on
investment securities was comprised of gross appreciation of $150,392 and
gross depreciation of $88,902 for federal income tax purposes. At September
30, 2000, the aggregate cost of securities for federal income tax purposes
was $1,581,686.
(!) Non-income producing security.
+ Amount represents less than 0.1%.
++ Amount represents less than $500.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc. A
portion of this amount represents cash collateral received from securities
lending activity (Note 6). The portion that represents cash collateral is
$376,256.
ADR -- American Depository Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
34
<PAGE> 39
NATIONS MASTER INVESTMENT TRUST
Nations International Value Master Portfolio
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
At September 30, 2000, sector diversification was as follows:
<TABLE>
% OF NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Common stocks:
Telecommunications.......................................... 16.5% $ 211,164
Commercial banking.......................................... 10.8 136,864
Insurance................................................... 9.7 123,133
Integrated oil.............................................. 6.2 79,263
Beverages................................................... 4.9 62,241
Heavy machinery............................................. 4.8 61,256
Food products............................................... 4.6 59,019
Electric power -- Non nuclear............................... 4.3 55,085
Automotive.................................................. 3.7 47,036
Chemicals -- Specialty...................................... 3.0 38,692
Metals and mining........................................... 3.0 37,724
Diversified electronics..................................... 2.8 35,149
Department and discount stores.............................. 2.8 35,094
Networking and telecommunications equipment................. 2.4 30,130
Household products.......................................... 2.0 24,892
Diversified manufacturing................................... 1.9 24,185
Tobacco..................................................... 1.8 23,195
Aerospace and defense....................................... 1.7 21,816
Food and drug stores........................................ 1.6 20,367
Conglomerates............................................... 1.5 19,691
Steel....................................................... 1.3 16,245
Chemicals -- Basic.......................................... 1.2 15,607
Electrical equipment........................................ 1.1 14,064
Other....................................................... 1.3 15,657
---------- -------------
TOTAL COMMON STOCKS......................................... 94.9 1,207,569
PREFERRED STOCKS............................................ 1.4 17,542
RIGHTS...................................................... 0.0+ 0++
INVESTMENT COMPANIES........................................ 32.8 418,065
---------- -------------
TOTAL INVESTMENTS........................................... 129.1 1,643,176
OTHER ASSETS AND LIABILITIES (NET).......................... (29.1) (370,154)
---------- -------------
NET ASSETS.................................................. 100.0% $ 1,273,022
---------- -------------
---------- -------------
</TABLE>
---------------
+ Amount represents less than 0.1%.
++ Amount represents less than $500.
SEE NOTES TO FINANCIAL STATEMENTS.
35
<PAGE> 40
NATIONS MASTER INVESTMENT TRUST
Nations International Equity Master Portfolio
STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 92.0%
ARGENTINA -- 0.1%
58,263 Perez Companc SA, ADR(!)............ $ 955
----------
AUSTRALIA -- 2.0%
50,000 Aristocrat Leisure Limited(!)....... 179
110,000 Broken Hill Proprietary Company,
Ltd. ............................. 1,141
60,000 Computershare Limited............... 271
66,900 CSR Limited......................... 147
200,000 Foster's Brewing Group Ord.(!)...... 466
540,000 National Australia Bank Limited..... 7,458
153,392 News Corporation.................... 2,160
220,000 Qantas Airways Limited.............. 424
210,000 Rio Tinto Ltd. ..................... 2,815
98,686 The News Corporation Ltd. .......... 5,534
90,000 Woodside Petroleum Limited.......... 667
----------
21,262
----------
BELGIUM -- 0.5%
130,273 Fortis.............................. 4,006
11,322 RTL Group........................... 1,227
----------
5,233
----------
BRAZIL -- 1.1%
17,300 Brasil Telecom Part, ADR............ 1,008
61,500 Cemig CIA Energ, ADR................ 1,020
9,000 Companhia Vale Do Rio Doce
(Cvrd)(!)......................... 224
74,367 Companhia Vale do Rio Doce, ADR..... 1,855
20,000 Embratel Participacoes SA........... 370
44,630 Embratel Participacoes, ADR......... 826
115,000 Petrol Brasileiros, ADR............. 3,291
54,500 Petroleo Brasileiro SA, ADR(!)...... 1,638
72,196 Tele Norte Leste Participacoes,
ADR............................... 1,651
----------
11,883
----------
CANADA -- 2.9%
87,479 Bank of Nova Scotia................. 2,544
200,000 Barrick Gold Corporation............ 3,049
85,926 BCE, Inc. .......................... 2,002
110,200 Bombardier, Inc. ................... 1,904
2,900 C-MAC Industries Inc.(!)............ 166
300 C-MAC Industries Inc.(!)............ 17
81,556 Canada Life Financial Corporation... 1,897
40,200 Canadian National Railway Company... 1,181
153,575 Nortel Networks Corporation......... 9,221
50,000 Petro - Canada...................... 1,113
78,000 Royal Bank of Canada................ 2,317
123,495 Sun Life Financial Services of
Canada(!)......................... 2,549
35,819 Suncor Energy, Inc. ................ 790
51,900 Toronto - Dominion Bank............. 1,525
----------
30,275
----------
CHILE -- 0.0%+
8,189 Enersis, ADR(!)..................... 146
10,100 Telecom de Chile, ADR(!)............ 175
----------
321
----------
DENMARK -- 0.3%
23,000 Den Danske Bank Group............... 2,922
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C>
FINLAND -- 1.8%
428,108 Nokia Oyj........................... $ 17,348
140,426 Stora Enso Oyj - R Shares........... 1,176
----------
18,524
----------
FRANCE -- 10.1%
41,778 Alcatel............................. 2,673
100,000 Alcatel SA, ADR..................... 6,288
118,405 Aventis............................. 8,881
30,046 Aventis SA.......................... 2,339
47,291 Axa................................. 6,175
25,282 Banque Nationale de Paris (BNP)..... 2,229
59,847 Bouygues SA(!)...................... 3,016
4,891 Canal Plus.......................... 732
6,600 Carrefour SA........................ 487
4,755 Castorama Dubois.................... 1,049
46,643 Christian Dior(!)................... 2,513
15,012 Compagnie De Saint-Gobain........... 1,888
90,000 Compagnie Generale des
Establessements Michelin.......... 2,502
14,493 Groupe Danone....................... 1,990
118,441 Havas Advertising(!)................ 1,871
26,223 L'Oreal SA(!)....................... 2,035
32,863 Lafarge - Coppee.................... 2,262
10,387 Pinault - Printemps - Redoute SA.... 1,829
37,960 Publicis Groupe..................... 1,159
138,302 Sanofi - Synthelabo................. 7,433
110,000 Societe Generale.................... 6,149
49,489 Societe Television Francaise 1...... 2,839
29,363 STMicroelectronics NV............... 1,439
198,921 Total Fina Elf SA................... 29,105
94,561 Usinor.............................. 859
83,545 Vivendi SA.......................... 6,208
----------
105,950
----------
GERMANY -- 5.4%
15,543 Allianz AG.......................... 5,137
125,000 BASF AG............................. 4,440
75,000 Bayer AG............................ 2,773
205,789 Bayersche Motoren Werke AG.......... 7,083
60,000 DaimlerChrysler AG.................. 2,675
106,284 Deutsche Bank AG.................... 8,890
65,408 Deutsche Lufthansa AG............... 1,351
54,061 Deutsche Telekom AG (REGD).......... 1,887
25,569 Dresdner Bank AG.................... 1,125
27,153 E. On AG............................ 1,399
38,445 Kamps AG............................ 603
33,516 Metro AG............................ 1,372
25,430 SAP AG.............................. 6,238
14,115 SAP AG.............................. 2,715
80,000 SAP AG, ADR......................... 4,920
31,130 Siemens AG.......................... 4,004
----------
56,612
----------
HONG KONG -- 3.3%
998,000 Cheung Kong (Holdings) Limited...... 12,064
757,000 China (HK) Mobile(!)................ 5,024
124,500 CLP Holdings........................ 559
78,700 Hang Seng Bank...................... 848
366,000 Hong Kong & China Gas(!)............ 458
480,000 Hong Kong Electric.................. 1,484
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
36
<PAGE> 41
NATIONS MASTER INVESTMENT TRUST
Nations International Equity Master Portfolio
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C>
HONG KONG -- (CONTINUED)
745,000 HSBC Holdings....................... $ 10,414
329,600 Hutchison Whampoa................... 4,376
----------
35,227
----------
IRELAND -- 1.1%
146,619 Bank of Ireland..................... 1,171
106,479 CRH plc............................. 1,689
319,799 CRH plc Ord......................... 5,091
62,475 Elan Corporation plc(!)............. 3,501
10,305 Elan Corporation, ADR(!)............ 564
----------
12,016
----------
ITALY -- 2.4%
88,553 Banca Fideuram SpA.................. 1,468
390,516 Banca Intesa SpA(!)................. 1,506
92,079 Bulgari SpA......................... 1,134
797,034 ENI SpA (REGD)...................... 4,220
17,945 Gucci Group NV...................... 1,815
182,690 Mediaset SpA........................ 2,721
62,593 San Paolo - IMI SpA................. 1,017
110,329 San Paolo - IMI SpA, ADR............ 3,593
261,796 Telecom Italia Mobile............... 2,116
524,034 Telecom Italia SpA.................. 5,568
----------
25,158
----------
JAPAN -- 17.1%
6,000 Aiful Corporation................... 577
273,000 Asahi Chemical Industry Company,
Ltd. ............................. 1,630
11,900 Asatsu - DK Inc. ................... 407
175,000 CANON Inc. ......................... 7,758
135,000 Daiwa Securities.................... 1,583
96 DDI Corporation..................... 633
67,000 Eisai Company, Ltd. ................ 2,114
165,000 Fuji Photo Film Company, Ltd. ...... 5,527
44,800 Fujisawa Pharmaceutical............. 1,650
219,800 Fujitsu............................. 5,105
13,300 Fujitsu Support Service............. 1,586
390,000 Hitachi, Ltd. ...................... 4,526
134,000 Honda Motor Company................. 4,935
104,000 Ito - Yokado Company, Ltd........... 5,418
31,000 Kao Corporation..................... 846
40,700 Kyocera Corporation................. 6,215
37,000 Lawson Inc. ........................ 1,397
600,000 Marubeni Corporation(!)............. 1,504
33,000 Matsushita Electric Industrial...... 864
700,000 Mitsubishi Heavy Industries,
Ltd. ............................. 2,773
525,000 Mitsubishi Materials Corporation.... 1,628
222 Mizuho Holdings, Inc.(!)............ 1,828
60,000 Namco, Ltd. ........................ 1,665
279,774 NEC Corporation..................... 6,356
21,000 Nichicon Corporation................ 508
785,000 Nikko Securities Company, Ltd. ..... 6,973
51,500 Nintendo Company, Ltd. ............. 9,404
400,000 Nippon Express Company, Ltd. ....... 2,136
416,000 Nippon Steel Corporation............ 739
1,663 Nippon Telegraph and Telephone
Company........................... 16,313
4,920 Nippon Television Network
Corporation....................... 2,827
310,000 Nissan Motor Company, Ltd.(!)....... 1,779
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C>
JAPAN -- (CONTINUED)
73,000 Nomura Securities................... $ 1,588
150,000 Nsk Ltd.(!)......................... 1,067
246 NTT Docomo Inc. .................... 7,057
13,200 Orix Corporation(!)................. 1,578
7,200 Rohm Company........................ 1,973
34,000 Sanwa Bank.......................... 303
15,000 Secom Company....................... 1,206
153,700 Sharp Corporation................... 2,378
100,000 Shin - Etsu Chemical Company,
Ltd. ............................. 4,210
30,900 Shinko Electric Industries.......... 1,315
105,000 Shiseido Company, Limited........... 1,304
16,300 Softbank Corporation................ 1,524
153,700 Sony Corporation.................... 15,589
163,700 Sumitomo Corporation................ 1,421
45,400 Sunkus & Associates Inc. ........... 1,210
63,000 Takeda Chemical Industries, Ltd. ... 4,163
45,000 Takefuji Corporation................ 4,957
425,000 The Bank of Tokyo - Mitsubishi,
Ltd. ............................. 5,022
4,000 The Furukawa Electric Company,
Ltd. ............................. 110
258,000 The Sumitomo Trust & Banking
Company, Ltd. .................... 1,748
64,000 Tokyo Broadcasting System........... 2,576
52,000 Tokyo Electric Power Company........ 1,225
125,000 Toyota Motor Corporation............ 4,939
13,000 Trend Micro, Inc.(!)................ 1,746
----------
179,413
----------
MEXICO -- 1.9%
484,340 Carso Global Telecom................ 1,167
585,667 Carso Global Telecom, ADR........... 2,822
150,533 Grupo Carso SA de CV, ADR(!)........ 901
87,902 Grupo Televisa SA, GDR(!)........... 5,071
163,869 Telefonos de Mexico, ADR............ 8,716
71,662 Walmart de Mexico SA de CV, ADR(!).. 1,499
----------
20,176
----------
NETHERLANDS -- 8.1%
316,617 ABN AMRO Holding NV................. 7,375
51,247 Aegon NV............................ 1,933
160,374 Akzo Nobel NV....................... 6,765
147,900 ASM Lithography Holding NV(!)....... 4,907
44,545 Fortis (NL) NV(!)................... 1,364
41,687 Gucci Group, ADR.................... 4,205
38,223 Heineken NV......................... 2,125
294,238 ING Groep NV........................ 19,599
110,783 Koninklijke Ahold NV................ 3,142
403,434 Philips Electronics NV.............. 17,363
109,019 Royal Dutch Petroleum Company....... 6,589
175,000 Unilever NV, ADR.................... 8,444
3,100 Unilever NV, ADR.................... 15
71,420 Wolters Kluwer NV................... 1,450
----------
85,276
----------
PORTUGAL -- 0.4%
410,000 Portugal Telecommunications, ADR.... 4,151
----------
SINGAPORE -- 0.8%
351,000 Chartered Semiconductor(!).......... 2,239
205,895 DBS Group Holding Ltd. ............. 2,272
105,000 Fraser & Neave Ltd.(!).............. 362
534,000 Neptune Orient Lines(!)............. 479
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
37
<PAGE> 42
NATIONS MASTER INVESTMENT TRUST
Nations International Equity Master Portfolio
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C>
SINGAPORE -- (CONTINUED)
290,000 OMNI Industries..................... $ 458
101,850 Overseas - Chinese Banking
Corporation Ltd. ................. 644
47,000 Sembcorp Logistics.................. 289
38,000 Singapore Airlines Ltd. ............ 360
6,000 Singapore Press Holdings, Ltd. ..... 90
340,000 Singapore Telecommunications........ 531
82,000 Venture Manufacturing Ltd. ......... 792
----------
8,516
----------
SOUTH KOREA -- 1.8%
12,700 Housing and Commercial Bank......... 301
265,374 Korea Electric Power Corporation,
ADR............................... 3,466
145,163 Korea Telecom, ADR.................. 4,881
45,334 Pohang Iron & Steel Company Ltd.,
ADR............................... 844
48,205 Samsung Electronics................. 8,732
17,670 SK Telecom Company, ADR............. 453
5,000 SK Telecom Company, Ltd., ADR(!).... 128
----------
18,805
----------
SPAIN -- 3.4%
282,689 Banco Bilbao Vizcaya................ 4,271
112,000 Banco Popular Espanol SA............ 3,435
300,000 Endessa SA.......................... 5,639
303,607 Iberdrola SA........................ 3,858
130,395 Repsol, ADR......................... 2,399
325,000 Repsol - YPF SA, ADR................ 5,952
440,934 Telefonica SA....................... 8,735
18,074 Telefonica SA, ADR.................. 1,074
----------
35,363
----------
SWEDEN -- 1.9%
3,201 ABB Ltd. ........................... 313
357,068 Investor AB......................... 5,060
522,789 LM Ericsson AB(!)................... 7,950
80,613 Sandvik AB(!)....................... 1,619
45,710 Securitas AB........................ 999
74,834 Skandia Forsakrings AB.............. 1,484
33,596 SKF AB.............................. 419
107,553 Svenska Handelsbanken AB............ 1,731
----------
19,575
----------
SWITZERLAND -- 5.7%
15,453 ABB Ltd.(!)......................... 1,502
2,001 Compagnie Financiere Richemont AG... 6,014
14,688 Credit Suisse Group................. 2,745
668 Julius Baer Holdings, Ltd. ......... 3,465
980 Kudelski SA(!)...................... 1,500
5,637 Nestle SA........................... 11,740
6,159 Novartis AG......................... 9,443
331 Roche Holding AG.................... 2,911
2,103 Schweizerische Rueckversicherungs -
Gesellschaft (REGD)............... 4,015
4,868 Serono SA - B(!).................... 5,943
2,645 The Swatch Group AG................. 780
2,332 The Swatch Group AG................. 3,373
15,717 UBS AG Registered................... 2,091
10,000 Zurich Allied AG.................... 4,623
----------
60,145
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C>
TAIWAN -- 0.4%
103,798 Advanced Semiconductor.............. $ 143
16,300 Asustek Computer Inc., GDR.......... 90
32 Asustek Computer, GDR(-)............ 0++
19,800 Bank Sinopac........................ 11
30,000 Compeq Manufacturing Company,
Ltd.(!)........................... 165
91,000 Hon Hai Precision Industry Company,
Ltd. ............................. 598
87,200 Hon Hai Precision(!)................ 775
11,752 President Chain Store Corporation... 37
23,310 Synnex Technology International
Corporation, GDR.................. 293
92,000 Taiwan Cellular Corporation(!)...... 223
234,880 Taiwan Semiconductor................ 780
15,361 Taiwan Semiconductor, ADR........... 313
308,000 United Microelectronics Corporation,
Ltd. ............................. 659
4,000 United Microelectronics Corporation,
Ltd.(!)........................... 48
----------
4,135
----------
THAILAND -- 0.0%+
26,700 Advanced Info Services (FGN)(!)..... 225
----------
TURKEY -- 0.0%+
26,000 Yapi ve Kredi Bankasi AS, GDR(!).... 184
----------
UNITED KINGDOM -- 19.4%
218,159 3i Group............................ 5,428
316,000 Abbey National plc.................. 4,200
605,111 Aegis Group......................... 1,306
166,477 Allied Zurich plc................... 1,893
51,929 Amvescap............................ 1,124
255,803 Arm Holdings plc.................... 2,844
195,706 AstraZeneca Group plc............... 10,256
200,000 Azlan Group Ord.(!)................. 651
201,509 BAE Systems......................... 1,087
59,536 Barclays............................ 1,648
195,317 BG Group plc........................ 1,241
203,152 BOC Group plc....................... 2,688
1,512,190 BP Amoco............................ 13,459
55,000 British Airways plc, ADR............ 2,351
48,567 British Sky Broadcasting Group plc
("BSkyB")(!)...................... 747
605,392 British Telecommunications Ord. .... 6,364
199,073 Cable & Wireless plc................ 2,840
131,679 Capita Group plc.................... 1,168
425,418 Carlton Communications plc.......... 3,321
118,490 Cgnu plc............................ 1,682
30,738 Colt Telecom Group(!)............... 882
210,000 Corus Group plc, ADR................ 1,628
82,894 Daily Mail and General Trust - A
NV................................ 1,197
718,435 Diageo plc.......................... 6,421
92,195 EMAP plc............................ 1,239
183,530 EMI Group plc....................... 1,465
58,196 Exel Ord. .......................... 933
277,080 Glaxo Wellcome plc.................. 8,389
656,620 Granada Compass plc(!).............. 6,125
82,506 Granada Media plc(!)................ 550
231,740 Hays................................ 1,348
331,170 HSBC Holdings....................... 4,710
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
38
<PAGE> 43
NATIONS MASTER INVESTMENT TRUST
Nations International Equity Master Portfolio
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM -- (CONTINUED)
204,000 Kingfisher plc...................... $ 1,333
85,942 Logica.............................. 2,827
92,567 Marconi plc......................... 1,266
965,000 Marks & Spencer plc................. 2,897
245,689 Misys plc........................... 2,307
216,053 National Grid Group plc............. 1,854
380,594 New Dixons Group plc................ 1,187
44,486 Pearson plc......................... 1,236
400,000 Peninsular and Oriental Steam
Navigation Company................ 3,518
350,000 PowerGen plc........................ 2,683
120,962 Psion plc........................... 1,323
48,821 Rio Tinto plc....................... 708
167,910 Royal Bank of Scotland.............. 3,545
561,333 Scottish Power plc.................. 4,357
84,862 Seagram Company Ltd. ............... 4,874
166,800 Securicor plc....................... 345
2,419,342 Shell Transport and Trading
Company........................... 19,708
729,233 Smithkline Beecham plc.............. 9,989
67,847 Smiths Industries plc............... 704
169,830 Spirent plc(!)...................... 1,682
831,803 Tesco plc........................... 3,056
466,460 Unilever............................ 3,021
6,242,614 Vodafone AirTouch plc............... 23,303
136,621 Williams plc........................ 667
379,268 WPP Group Ord. ..................... 4,542
----------
204,117
----------
UNITED STATES -- 0.1%
800 BCE Inc. ........................... 19
27,870 BCE Inc. ........................... 651
----------
670
----------
TOTAL COMMON STOCKS
(Cost $921,362)................... 967,089
----------
PREFERRED STOCKS -- 0.1%
(Cost $810)
JAPAN -- 0.1%
29,300 Tokyo Broadcasting Company(!)(-).... 1,205
----------
RIGHTS -- 0.0%+
(Cost $0)
CHILE -- 0.0%+
3,107 Enersis SA, ADR
Expire 10/12/00................... 1
----------
WARRANTS -- 0.1%
JAPAN -- 0.0%+
8,000 Tokyo Broadcasting Company Expire
11/17/00(!)....................... 323
----------
SOUTH KOREA -- 0.1%
35,800 Korea Electric Power Expire
04/27/01(!)....................... 934
----------
TOTAL WARRANTS
(Cost $1,274)..................... 1,257
----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 9.1%
(Cost $96,000)
96,000 Nations Cash Reserves#............. $ 96,000
----------
TOTAL INVESTMENTS
(Cost $1,019,446*)........ 101.3% 1,065,552
----------
OTHER ASSETS AND LIABILITIES
(NET)..................... (1.3)%
Cash............................... $ 65,808
Receivable for investment
securities sold.................. 22,743
Receivable for Fund shares sold.... 2
Dividends receivable............... 2,107
Interest receivable................ 267
Receivable for variation margin.... 1,009
Collateral on securities loaned.... (37,499)
Payable for Fund shares redeemed... (6)
Investment advisory fee payable.... (680)
Administration fee payable......... (42)
Payable for investment securities
purchased........................ (66,964)
Accrued Trustees' fees and
expenses......................... (8)
Accrued expenses and other
liabilities...................... (100)
----------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)............................ (13,363)
----------
NET ASSETS.................. 100.0% $1,052,189
==========
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $46,106 on
investment securities was comprised of gross appreciation of $118,181 and
gross depreciation of $72,075 for federal income tax purposes. At September
30, 2000, the aggregate cost of securities for federal income tax purposes
was $1,019,446.
(-) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
(!) Non-income producing security.
+ Amount represents less than 0.1%.
# Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by Banc of America Capital Management,
Inc. A portion of this amount represents cash collateral received from
securities lending activity (Note 6). The portion that represents cash
collateral is $37,499.
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
39
<PAGE> 44
NATIONS MASTER INVESTMENT TRUST
Nations International Equity Master Portfolio
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
At September 30, 2000, sector diversification was as follows:
<TABLE>
% OF NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Common stocks:
Telecommunications services................................. 12.7% $ 133,425
Commercial banking.......................................... 9.8 103,371
Integrated oil.............................................. 8.4 88,264
Pharmaceuticals............................................. 6.6 68,960
Electronics................................................. 4.9 51,703
Insurance................................................... 3.0 31,388
Broadcasting and cable...................................... 2.9 30,305
Food products............................................... 2.7 28,869
Networking and telecommunications equipment................. 2.7 28,283
Automotive.................................................. 2.3 23,913
Investment services......................................... 2.1 21,756
Chemicals -- Basic.......................................... 2.0 20,829
Semiconductors.............................................. 1.9 19,868
Financial services.......................................... 1.9 19,599
Electric power -- Non nuclear............................... 1.9 19,566
Software.................................................... 1.8 19,030
Specialty stores............................................ 1.5 16,227
Leisure..................................................... 1.4 14,931
Diversified manufacturing................................... 1.4 14,741
Publishing and advertising.................................. 1.4 14,497
Other....................................................... 18.7 197,564
---------- -------------
TOTAL COMMON STOCKS......................................... 92.0 967,089
PREFERRED STOCKS............................................ 0.1 1,205
RIGHTS...................................................... 0.0+ 1
WARRANTS.................................................... 0.1 1,257
INVESTMENT COMPANIES........................................ 9.1 96,000
---------- -------------
TOTAL INVESTMENTS........................................... 101.3 1,065,552
OTHER ASSETS AND LIABILITIES (NET).......................... (1.3) (13,363)
---------- -------------
NET ASSETS.................................................. 100.0% $ 1,052,189
========== =============
</TABLE>
---------------
+ Amount represents less than 0.1%.
SEE NOTES TO FINANCIAL STATEMENTS.
40
<PAGE> 45
NATIONS MASTER INVESTMENT TRUST
STATEMENTS OF OPERATIONS (UNAUDITED)
For the six months ended September 30, 2000
<TABLE>
INTERNATIONAL INTERNATIONAL
VALUE EQUITY
MASTER MASTER
PORTFOLIO PORTFOLIO
-------------------------------
<S> <C> <C>
(IN THOUSANDS)
INVESTMENT INCOME:
Dividends (Net of foreign withholding taxes of $1,439 and
$1,259, respectively)..................................... $ 14,895 $ 11,439
Interest.................................................... 1,189 1,382
Securities lending income................................... 1,471 231
-------------- --------------
Total investment income................................. 17,555 13,052
-------------- --------------
EXPENSES:
Investment advisory fee..................................... 4,919 3,869
Administration fee.......................................... 273 242
Custodian fees.............................................. 60 207
Legal and audit fees........................................ 30 32
Trustees' fees and expenses................................. 12 11
Interest expense............................................ -- 28
Other....................................................... 14 14
-------------- --------------
Total expenses.......................................... 5,308 4,403
Fees waived by investment advisor........................... (547) --
Fees reduced by credits allowed by the custodian............ (25) --
-------------- --------------
Net expenses............................................ 4,736 4,403
-------------- --------------
NET INVESTMENT INCOME....................................... 12,819 8,649
-------------- --------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain/(loss) from:
Security transactions..................................... (4,592) 17,594
Futures contracts......................................... -- (264)
Forward foreign exchange contracts, foreign currencies and
net other assets........................................ (72) (664)
-------------- --------------
Net realized gain/(loss) on investments..................... (4,664) 16,666
-------------- --------------
Change in unrealized appreciation/(depreciation) of:
Securities................................................ 18,512 (144,974)
Futures contracts......................................... -- (50)
Forward foreign exchange contracts, foreign currencies and
net other assets........................................ (56) (149)
-------------- --------------
Net change in unrealized appreciation/(depreciation) of
investments............................................... 18,456 (145,173)
-------------- --------------
Net realized and unrealized gain/(loss) on investments...... 13,792 (128,507)
-------------- --------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ 26,611 $ (119,858)
============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
41
<PAGE> 46
NATIONS MASTER INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
INTERNATIONAL VALUE INTERNATIONAL EQUITY
MASTER PORTFOLIO MASTER PORTFOLIO
-------------------------------- ---------------------------------
SIX MONTHS SIX MONTHS
ENDED ENDED
9/30/00 PERIOD ENDED 9/30/00 PERIOD ENDED
(UNAUDITED) 3/31/00(a) (UNAUDITED) 3/31/00(b)
----------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
Net investment income................................ $ 12,819 $ 6,583 $ 8,649 $ 406
Net realized gain/(loss) on investments.............. (4,664) 63,750 16,666 90,616
Net change in unrealized appreciation/(depreciation)
of investments..................................... 18,456 39,265 (145,173) 105,272
-------------- -------------- -------------- --------------
Net increase/(decrease) in net assets resulting from
operations......................................... 26,611 109,598 (119,858) 196,294
Contributions........................................ 919,366 1,096,010 1,701,586 1,587,782
Withdrawals.......................................... (529,051) (349,512) (1,457,985) (855,630)
-------------- -------------- -------------- --------------
Net increase/(decrease) in net assets................ 416,926 856,096 123,743 928,446
NET ASSETS:
Beginning of period.................................. 856,096 -- 928,446 --
-------------- -------------- -------------- --------------
End of period........................................ $ 1,273,022 $ 856,096 $ 1,052,189 $ 928,446
============== ============== ============== ==============
</TABLE>
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
WITHOUT WAIVERS
RATIO OF AND/OR EXPENSE
OPERATING REIMBURSEMENTS
EXPENSES ---------------
RATIO OF INCLUDING RATIO OF NET RATIO OF
OPERATING INTEREST INVESTMENT OPERATING
EXPENSES EXPENSE INCOME/(LOSS) PORTFOLIO EXPENSES TO
TO AVERAGE TO AVERAGE TO AVERAGE TURNOVER AVERAGE
NET ASSETS NET ASSETS NET ASSETS RATE NET ASSETS
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INTERNATIONAL VALUE MASTER PORTFOLIO:
Six months ended 9/30/2000 (unaudited).... 0.86%+ -- 2.34%+ 3% 0.97%+
Period ended 3/31/2000(a)................. 0.88+ -- 2.31+ 22 0.98+
INTERNATIONAL EQUITY MASTER PORTFOLIO:
Six months ended 9/30/2000 (unaudited).... 0.90%+ 0.91%+ 1.78%+ 41% 0.91%+
Period ended 3/31/2000(b)................. 0.92+ 0.94+ 0.10+ 48 0.94+
</TABLE>
---------------
+ Annualized.
(a) International Value Master Portfolio commenced operations on October 18,
1999.
(b) International Equity Master Portfolio commenced operations on October 8,
1999.
SEE NOTES TO FINANCIAL STATEMENTS.
42
<PAGE> 47
NATIONS MASTER INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Nations Master Investment Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company. At September 30, 2000, the Trust offered nine separate
portfolios. These financial statements pertain only to International Value
Master Portfolio and International Equity Master Portfolio (each a "Master
Portfolio" and collectively, the "Master Portfolios"). Financial statements for
the other portfolios of the Trust are presented under separate cover.
The following investors were invested in the Master Portfolios at September 30,
2000:
<TABLE>
<S> <C>
International Value Master Portfolio:
Nations International Value Fund............ 98.1%
Nations International Value Fund
(Offshore)................................ 1.9%
International Equity Master Portfolio:
Nations International Equity Fund........... 99.1%
Nations International Equity Fund
(Offshore)................................ 0.9%
</TABLE>
1. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
certain estimates and assumptions that affect the reported amounts and
disclosures in the financial statements. Actual results could differ from those
estimates. The following is a summary of significant accounting policies
followed by the Master Portfolios in the preparation of their financial
statements.
Securities valuation: Securities traded on a recognized exchange or on NASDAQ
are valued at the last sale price on the exchange or market on which such
securities are primarily traded. Securities traded only over-the-counter are
valued at the last sale price, or if no sale occurred on such day, at the mean
of the current bid and asked prices. Debt securities are generally valued by an
independent pricing service. Prices provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as yield, type of issue, coupon rate, maturity and
general market conditions. Restricted securities, securities for which market
quotations are not readily available, and certain other assets may be valued
under procedures adopted by the Board of Trustees. Short-term investments that
mature in 60 days or less are valued at amortized cost, which approximates
current market value.
Foreign currency translation: The books and records of the Master Portfolios
are maintained in U.S. dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars at the current exchange rates.
Purchases and sales of investment securities and income and expenses are
translated on the respective dates of such transactions. Net realized foreign
currency gains and losses resulting from changes in exchange rates include
foreign currency gains and losses between trade date and settlement date of
securities transactions, foreign currency transactions and the difference
between the amounts of interest and dividends recorded on the books of a Master
Portfolio and the amounts actually received. The effects of changes in foreign
currency exchange rates on securities are not separately stated in the
Statements of operations from the effects of changes in market prices of those
securities, but are included with the net realized and unrealized gain or loss
on securities.
Forward foreign currency transactions: Generally, each Master Portfolio may
enter into forward currency exchange contracts only under two circumstances: (i)
when a Master Portfolio enters into a contract for the purchase or sale of a
security denominated in a foreign currency, to "lock" in the U.S. exchange rate
of the transaction, with such period being a short-dated contract covering the
period between transaction date and settlement date; and (ii) when the
investment adviser or sub-adviser believes that the currency of a particular
foreign country may experience a substantial movement against the U.S. dollar.
Forward foreign currency contracts are valued at the forward rate and are
marked-to-market daily. The change in market value is recorded by a Master
Portfolio as an unrealized gain or loss. When the contract is closed or offset
with the same counterparty, a Master Portfolio records a realized gain or loss
equal to the difference between the value of the contract at the time it was
opened and the value at the time it was closed or offset.
Forward foreign currency contracts will be used primarily to protect the Master
Portfolio from adverse currency movements and will generally not be entered into
for terms greater than one year. The use of forward foreign currency contracts
does not eliminate fluctuations in the underlying prices of a Master Portfolio's
investment securities; however, it does establish a rate of exchange that can be
achieved in the future. The use of forward contracts involves the risk that
anticipated currency movements will not be accurately predicted. A forward
contract would limit the risk of loss due to decline in the value of a
particular currency; however, it also would limit any potential gain that might
result should the value of the currency increase instead of decrease. These
contracts may involve market risk in excess of the unrealized gain or loss
reflected in the Statements of net
43
<PAGE> 48
NATIONS MASTER INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
assets. In addition, the Master Portfolios could be exposed to risks if
counterparties to the contracts are unable to meet the terms of their contracts.
The counterparty risk exposure is, therefore, closely monitored and contracts
are only executed with high credit quality financial institutions.
Securities transactions and investment income: Securities transactions are
accounted for on trade date. Realized gains and losses are computed based on the
specific identification of securities sold. Interest income, adjusted for
accretion of discounts and amortization of premiums, is earned from settlement
date and recorded on an accrual basis. Dividend income is recorded on ex-
dividend date, except that if the ex-dividend date has passed, certain dividends
from foreign securities are recorded as soon as the Master Portfolios are
informed of the ex-dividend date.
Federal income taxes: The Master Portfolios are treated as partnerships for
federal income tax purposes and therefore are not subject to federal income tax.
Each investor in the Master Portfolios will be taxed on its allocated share of
the Master Portfolio's ordinary income and capital gains.
Expenses: General expenses of the Trust are allocated to the Master Portfolios
based upon their relative net assets or other expense allocation methodologies
determined by the nature of the expense. Expenses directly attributable to a
Master Portfolio are charged to such Portfolio.
The Master Portfolios may be subject to foreign taxes on income, gains on
investments or currency repatriation, a portion of which may be recoverable. The
Master Portfolios will accrue such taxes and recoveries as applicable, based
upon their current interpretation of tax rules and regulations that exist in the
markets in which they invest.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS
The Trust has entered into an investment advisory agreement (the "Investment
Advisory Agreement") with Banc of America Advisors, Inc. ("BAAI"), a wholly-
owned subsidiary of Bank of America, N.A. ("Bank of America"), which in turn is
a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding
company organized as a Delaware corporation, pursuant to which BAAI provides
investment advisory services to the Master Portfolios. Under the terms of the
Investment Advisory Agreement, BAAI is entitled to receive an advisory fee,
calculated daily and payable monthly, based on the following annual rates
multiplied by the average daily net assets of each Master Portfolio:
<TABLE>
<CAPTION>
ANNUAL
RATE
------
<S> <C>
International Value Master Portfolio.......... 0.90%
International Equity Master Portfolio......... 0.80%
</TABLE>
The Trust has, on behalf on the International Value Master Portfolio, entered
into a sub-advisory agreement with BAAI and Brandes Investment Partners, L.P.
("Brandes"), pursuant to which Brandes is entitled to receive a sub-advisory fee
from BAAI at the maximum annual rate of 0.50% of the Master Portfolio's average
daily net assets.
The International Equity Master Portfolio is a "multi-manager" fund, which means
that it is managed by more than one sub-adviser. Gartmore Global Partners
("Gartmore"), INVESCO Global Asset Management (N.A.), Inc. ("INVESCO") and
Putnam Investment Management, Inc. ("Putnam") each manage approximately
one-third of the assets of the Master Portfolio. Gartmore is a general
partnership which is an indirect wholly-owned subsidiary of Nationwide Mutual
Insurance Company. Pursuant to the sub-advisory agreement, Gartmore, INVESCO and
Putnam are entitled to receive a fee from BAAI at the maximum annual rate of
0.65% of the first $60 million, 0.55% of the next $130 million, 0.45% of the
next $200 million and 0.40% over $390 million of the Master Portfolio's average
daily net assets under management. Prior to May 15, 2000, Gartmore received a
sub-advisory fee from BAAI at the maximum annual rate of 0.70% of the Fund's
average daily net assets.
Stephens Inc. ("Stephens") and BAAI serve as co-administrators of the Trust.
Under the co-administration agreements, Stephens and BAAI are currently entitled
to receive a combined fee, computed daily and paid monthly, at the maximum
annual rate of 0.05% of each Master Portfolio's average daily net assets. The
Bank of New York ("BNY") serves as sub-administrator of the Trust pursuant to an
agreement with BAAI. For the six months ended September 30, 2000, BAAI earned
0.05% from the average daily net assets of the Master Portfolios for its
co-administration services.
BNY serves as the custodian of the Trust's assets. For the six months ended
September 30, 2000, expenses of the Master Portfolios were reduced by $25,345
under expense offset arrangements with BNY. The Master
44
<PAGE> 49
NATIONS MASTER INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Portfolios could have invested a portion of the assets utilized in connection
with the expense offset arrangements in an income producing asset if they had
not entered into such arrangements.
No officer, director or employee of Bank of America or BAAI, or any affiliate
thereof, receives any compensation from the Trust for serving as a Trustee or
officer of the Trust.
The Trust's eligible Trustees may participate in non-qualified deferred
compensation and retirement plans which may be terminated at any time. All
benefits provided under these plans are unfunded and any payments to plan
participants are paid solely out of the Master Portfolios' assets. Income earned
on each plan participant's deferral account is tied to the rate of return of the
eligible mutual funds selected by the participants or, if no funds are selected,
to the rate of return of Nations Treasury Fund, a portfolio of Nations Fund,
Inc., another registered investment company in the Nations Funds family. The
expense for the deferred compensation and retirement plans is included in
"Trustees' fees and expenses" in the Statements of operations.
The Master Portfolios have made daily investments of cash balances in the
Nations Cash Reserves, a portfolio of Nations Reserves, pursuant to an exemptive
order received from the Securities and Exchange Commission. For the six months
ended September 30, 2000, the Master Portfolios earned $1,980,514 in the
aggregate from such investments, which is included in interest income.
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, excluding
long-term U.S. government securities and short-term investments, for the six
months ended September 30, 2000 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
PORTFOLIO (000) (000)
-------------------------------------------------------
<S> <C> <C>
International Value Master
Portfolio..................... $395,371 $ 31,337
International Equity Master
Portfolio..................... 549,292 373,305
</TABLE>
There were no purchases and sales of long-term U.S. government securities for
the six months ended September 30, 2000.
4. FUTURES CONTRACTS
At September 30, 2000, the following Master Portfolios had futures contracts
open:
<TABLE>
<CAPTION>
VALUE OF
CONTRACT MARKET
NUMBER WHEN VALUE OF UNREALIZED
OF OPENED CONTRACTS DEPRECIATION
DESCRIPTION CONTRACTS (000) (000) (000)
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTERNATIONAL EQUITY
MASTER PORTFOLIO:
Taiwan Index (long
position) expiring
December 2000(a).... 28 $411,650 $411,600 $(50)
</TABLE>
---------------
(a) Cash has been segregated as collateral for the International Equity Master
Portfolio for open futures contracts.
5. LINES OF CREDIT
The Trust participates with other Nations Funds in an uncommitted line of credit
provided by BNY under a line of credit agreement (the "Agreement"). Advances
under the Agreement are taken primarily for temporary or emergency purposes,
including the meeting of redemption requests that otherwise might require the
untimely disposition of securities. Interest on borrowings is payable at a
specified Federal Funds rate plus 0.50% on an annualized basis. Each
participating Master Portfolio maintains a ratio of no less than 4 to 1 net
assets (not including funds borrowed pursuant to the Agreement) to the aggregate
amount of indebtedness pursuant to the Agreement.
At September 30, 2000, there were no loans outstanding under this Agreement. For
the six months ended September 30, 2000, borrowings by the Master Portfolios
under the Agreement were as follows:
<TABLE>
<CAPTION>
AVERAGE
AMOUNT AVERAGE
OUTSTANDING INTEREST
PORTFOLIO (000) RATE
---------------------------------------------------------
<S> <C> <C>
International Equity Master
Portfolio..................... $803 7.00%
</TABLE>
The average amount outstanding was calculated based on daily balances in the
period.
The Trust also participates with other Nations Funds in a committed line of
credit provided by BNY. Interest on borrowings under the committed line is
payable at a specified Federal Funds rate plus 0.50% on an annualized basis. A
facility fee of 0.09% per annum of the total amounts available under the line of
credit is charged, of which each Master Portfolio pays its pro rata share. This
fee is paid quarterly in arrears. Each participating Master
45
<PAGE> 50
NATIONS MASTER INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Portfolio is required to maintain an asset coverage ration of at least 300%
under the terms of the arrangement. For the six months ended September 30, 2000,
there were no borrowings by the Master Portfolios under the committed line of
credit.
6. SECURITIES LENDING
Under an agreement with BNY, the Master Portfolios can lend their securities to
approved brokers, dealers and other financial institutions. Loans are
collateralized by cash in an amount at least equal to the market value of the
securities loaned. The cash collateral received is invested in Nations Cash
Reserves. A portion of the income generated by the investment of the collateral,
net of any rebates paid by BNY to borrowers, is remitted to BNY as lending
agent, and the remainder is paid to the Master Portfolios. Generally, in the
event of counterparty default, the Master Portfolio has the right to use the
collateral to offset losses incurred. There would be a potential loss to the
Master Portfolio in the event the Master Portfolio is delayed or prevented from
exercising its right to dispose of the collateral. The Master Portfolio bears
the risk of loss with respect to the investment of collateral.
At September 30, 2000, the following Master Portfolios had securities on loan:
<TABLE>
<CAPTION>
MARKET VALUE OF MARKET VALUE
LOANED SECURITIES OF COLLATERAL
PORTFOLIO (000) (000)
------------------------------------------------------------
<S> <C> <C>
International Value
Master Portfolio....... $354,451 $376,256
International Equity
Master Portfolio....... 35,370 37,499
</TABLE>
7. REORGANIZATIONS
CONVERSION OF COMMON TRUST FUNDS
On May 12, 2000, the International Equity Fund (the "Acquiring Fund"), acquired
the assets of Bank of America Common Trust International Equity Fund, a common
trust fund, managed by Bank of America, N.A., (the "Acquired Fund"), in a
tax-free exchange for shares of the Acquiring Fund. The number and value of
shares issued by the Acquiring Fund are presented in the Schedules of capital
stock activity. Net assets and unrealized appreciation as of the conversion date
were as follows:
<TABLE>
<CAPTION>
TOTAL NET ACQUIRED
TOTAL NET TOTAL NET ASSETS OF FUND
ASSETS OF ASSETS OF ACQUIRING FUND UNREALIZED
ACQUIRED FUND ACQUIRING FUND AFTER CONVERSION APPRECIATION
(000) (000) (000) (000)
----------------------------------------------------------------
<S> <C> <C> <C>
$29,129 $868,368 $897,497 $5,808
</TABLE>
On September 8, 2000, the International Equity Fund (the "Acquiring Fund"),
acquired the assets and liabilities of Nations International Growth Fund (the
"Acquired Fund"), in a tax-free reorganization in exchange for shares of the
Acquiring Fund, pursuant to a plan of reorganization approved by the Acquired
Fund's shareholders. The number and value of shares issued by the Acquiring Fund
are presented in the Schedules of capital stock activity. The Acquiring Fund
contributed the securities and other assets to the International Equity Master
Portfolio for an interest in the Master Portfolio. Net assets and unrealized
appreciation as of the reorganization date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ACQUIRED
TOTAL NET TOTAL NET ASSETS OF FUND
ASSETS OF ASSETS OF ACQUIRING FUND UNREALIZED
ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION APPRECIATION
(000) (000) (000) (000)
-----------------------------------------------------------------
<S> <C> <C> <C>
$38,052 $1,023,391 $1,061,443 $8,549
</TABLE>
46
<PAGE> 51
P.O. Box 34602
Charlotte, NC 28254-4602
Toll free 1.800.321.7854
NATIONS FUNDS
INTSTKSAR (9/00)
