DEUTSCHE ASSET MANAGEMENT
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Mutual Fund
Annual Report
October 31, 2000
Municipal Bond
Short-Term Municipal Bond
Fixed Income
Short-Term Fixed Income
High Yield Bond
Each formerly a Morgan Grenfell Fund
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A MEMBER OF THE
DEUTSCHE BANK GROUP
<PAGE>
Domestic Fixed Income Funds
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TABLE OF CONTENTS
LETTER TO SHAREHOLDERS ................................... 3
DOMESTIC FIXED INCOME FUNDS
Schedule of Investments ............................... 21
Statements of Assets and Liabilities .................. 72
Statements of Operations .............................. 74
Statements of Changes in Net Assets ................... 76
Financial Highlights .................................. 78
Notes to Financial Statements ......................... 87
Report of Independent Accountants ..................... 94
Tax Information ....................................... 94
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The Fund is not insured by the FDIC and is not a
deposit, obligation of or guaranteed by Deutsche
Bank. The Fund is subject to investment risks,
including possible loss of principal amount
invested.
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<PAGE>
Domestic Fixed Income Funds
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LETTER TO SHAREHOLDERS
Dear Fellow Shareholder:
We are pleased to present you with this annual report for the US fixed income
funds.
We are also pleased to announce that Morningstar continued to recognize several
of the Funds for their strong investment performance.1 Most notably, many of our
fixed income offerings' Institutional Classes received a high Overall
Morningstar Rating(TM) based on their risk-adjusted performance.
As of October 31, 2000:
o Municipal Bond was rated 5 stars out of 1,719 municipal bond funds.
o Fixed Income was rated 4 stars out of 1,751 taxable bond funds.
o Short-Term Municipal Bond was rated 5 stars out of 1,719 municipal bond funds.
o Short-Term Fixed Income was rated 5 stars out of 1,751 taxable bond funds.
In the pages that follow, you will find a discussion of the Funds' investment
performance by the portfolio management teams. The analyses highlight key
factors influencing recent performance of the Funds and are followed by detailed
financial statements for the 12-month period ended October 31, 2000.
Our continuing goal is to provide you with high-quality investment management
services across a broad range of specialized mutual funds. We thank you for
investing in our family of mutual funds and we appreciate your continued support
and confidence.
Sincerely,
\S\ SIGNATURE DAVID W. BALDT
David W.Baldt
Executive Vice President
Lead Manager of the Funds
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TAX-EXEMPT FIXED INCOME FUNDS
O MUNICIPAL BOND
O SHORT-TERM MUNICIPAL BOND
MARKET REVIEW
Municipal bonds performed better during the annual period ended October 31,
2000, than during the prior fiscal year. Strong economic growth and rising oil
prices continued to spark investor concern over the effects of possible
inflation in the short term. At the same time, investors seemed to believe the
Federal Reserve Board was taking action to combat inflation in the long run
through a series of interest rate hikes. This led to an inversion of the
Treasury yield curve for much of the period, ie, short-term US Treasury rates
were higher than long-term Treasury rates. The bond market was also affected by
the US Treasury announcement that it was going to reduce issuance of debt across
all maturities and retire existing debt through a buyback program, whereby the
US Treasury would buy back its own longer-dated issues with budget surplus
monies.
Municipal bond yields decreased during the twelve month period, with the
five-year AA municipal bond yield falling 0.14%, while the 30-year AA municipal
bond yield declined by 0.47%. Lack of supply and reduced institutional demand
continued to dominate the municipal market. New issue supply was down roughly
20% in the marketplace, as strong revenue collections allowed municipalities to
use cash instead of debt to pay for capital projects. And rising interest rates
made it less attractive for municipalities to refund older debt. This lack of
supply caused investors to bid up the prices of available bonds.
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1 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Morningstar proprietary
ratings on US domiciled funds reflect historical risk-adjusted performance as
of October 31, 2000. The ratings are subject to change every month.
Morningstar ratings are calculated from the Funds' three-, five- and ten-year
(if applicable) average annual returns in excess of 90-day Treasury bill
returns with appropriate fee adjustments, and a risk factor that reflects fund
performance below 90-day T-bill returns. The Overall Morningstar Rating(TM) is
a weighted average of the Funds' three-, five- and ten-year (if applicable)
risk adjusted performance. Municipal Bond was rated five stars among 1,719 and
1,473 municipal bond funds for the three- and five-year periods, respectively.
Fixed Income was rated four stars among 1,751 and 1,313 taxable bond funds for
the three- and five-year periods, respectively. Short-Term Municipal Bond was
rated five stars among 1,719 and 1,473 municipal bond funds for the three- and
five-year periods, respectively. Short-Term Fixed Income was rated five stars
among 1,751 and 1,313 taxable bond funds for the three- and five-year periods,
respectively. The top 10% of the funds in a broad asset class receive five
stars, the next 22.5% receive four stars, the next 35% receive three stars,
the next 22.5% receive two stars and the bottom 10% receive one star. The
Funds were rated exclusively against US domiciled funds. Ratings are for the
Institutional Class only. Other classes may vary.
3
<PAGE>
Domestic Fixed Income Funds
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LETTER TO SHAREHOLDERS
Institutional demand for municipal bonds was modest compared to historical
standards, as bond funds experienced outflows due primarily to investor
preoccupation with equity returns and reduced activity from property and
casualty insurers. Insurers, who comprise close to half of the institutional
market, have been suffering from decreased profitability and have been seeking
attractive spread opportunities in the taxable bond market. Retail demand
continued to be strong, especially in high tax states.
Municipal bonds continued to be attractive relative to other fixed income
classes. A 5-year AA municipal bond yielded 4.57% at the end of October 2000.
The taxable equivalent yield of that bond for an investor in the highest tax
bracket (39.6%) is 7.62%. To compare, the 5-year Treasury yielded just 5.81% for
the same period.
O MUNICIPAL BOND
Municipal Bond Institutional Class outperformed its benchmark index for the
twelve months ended October 31, 2000. The Fund produced an annual return of
6.45%, compared to 5.77% for the Lehman 5 Year General Obligation (G.O.) Index.
Since the inception of the Fund in December 1991, we have sought to provide
shareholders with a high level of federally tax-exempt income consistent with
the preservation of capital, without
<TABLE>
<CAPTION>
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURNS TOTAL RETURNS
Periods ended Past 1 Past 3 Past 5 Since Past 1 Past 3 Past 5 Since
October 31, 2000 year years years inception year years years inception
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Municipal Bond
Institutional Class 1
(inception 12/13/91) 6.45% 12.55% 29.30% 83.66% 6.45% 4.02% 5.27% 7.08%
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Lehman Brothers 5 Year
G.O. Index 2 5.77% 13.89% 27.14% 63.67%4 5.77% 4.43% 4.92% 5.70%4
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Lipper Intermediate Muni
Debt Funds Average 3 6.21% 11.71% 24.83% 61.30%4 6.21% 3.76% 4.53% 5.56%4
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</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURNS TOTAL RETURNS
Periods ended Past 1 Past 3 Since Past 1 Past 3 Since
October 31, 2000 year years inception year years inception
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Municipal Bond
Investment Class 1
(inception 7/30/97) 6.21% 11.88% 13.25% 6.21% 3.81% 3.90%
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Lehman Brothers 5 Year
G.O. Index 2 5.77% 13.89% 15.01%4 5.77%4 4.43% 4.39%4
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Lipper Intermediate Muni
Debt Funds Average 3 6.21% 11.71% 12.43%4 6.21%4 3.76% 3.67%4
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</TABLE>
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1 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. These figures assume the
reinvestment of dividend and capital gain distributions. Performance figures
for the classes differ because each class maintains a distinct expense
structure. Performance would have been lower during the specified periods if
certain fees and expenses had not been waived by the Fund.
2 The Lehman Brothers 5 Year G.O. Index includes over 1,900 intermediate-term
General Obligation tax-exempt municipal bonds with an average maturity range
of four to six years. The index includes tax-exempt municipal issues with a
minimum par amount of $5 million.Index returns do not reflect expenses, which
have been deducted from the Fund's returns.
3 Lipper figures represent the average of the total returns reported by all of
the mutual funds designated by Lipper Inc. as falling into the category
indicated. These figures do not reflect sales charges.
4 Benchmark returns are for the periods beginning December 31, 1991, for the
Institutional Class and July 31, 1997, for the Investment Class.
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4
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Domestic Fixed Income Funds
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LETTER TO SHAREHOLDERS
investing exclusively in long-term bonds in order to obtain that high level of
income.
In pursuit of this goal, we focused on purchasing issues with intermediate
maturities and early retirement features, such as sinking funds and prepayment
bond calls. Duration was held relatively constant during the period in line with
our intermediate strategy.
We also focused during the fiscal year on the purchase of government-backed
bonds, ie, escrowed-to-maturity and prerefunded issues, as these high quality
issues offered attractive yields. Also, strong retail demand in high tax states
allowed the Fund to participate in swap opportunities to add value.
O SHORT-TERM MUNICIPAL BOND
Short-Term Municipal Bond Institutional Class outperformed its benchmark index
for the twelve months ended October 31, 2000. The Fund produced an annual return
of 5.52%, compared to just 3.44% for the iMoneyNet All Tax-Free Money Funds
Average. The Short-Term Municipal Bond is a diversified portfolio of federally
tax-exempt municipal securities with a dollar weighted effective
<TABLE>
<CAPTION>
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURNS TOTAL RETURNS
Periods ended Past 1 Past 3 Past 5 Since Past 1 Past 3 Past 5 Since
October 31, 2000 year years years inception year years years inception
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Short-Term Municipal
Bond Institutional Class 1
(inception 3/6/95) 5.52% 12.80% 27.73% 33.34% 5.52% 4.10% 5.02% 5.22%
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iMoneyNet All Tax-Free
Money Funds Average 2 3.44% 9.43% 16.30% 18.61%4 3.44% 3.05% 3.06% 3.10%4
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Lipper Short Muni
Debt Funds Average 3 4.23% 11.41% 21.19% 25.54%4 4.23% 3.67% 3.92% 4.16%4
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</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURNS TOTAL RETURNS
Periods ended Past 1 Since Past 1 Since
October 31, 2000 year inception year inception
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Municipal
Bond Investment Class 1
(inception 12/3/97) 5.24% 11.99% 5.24% 3.97%
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iMoneyNet AllTax-Free
Money Funds Average 2 3.44% 9.14%4 3.44% 3.04%4
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Lipper Short Muni
Debt Funds Average 3 4.23% 11.07%4 4.23% 3.67%4
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</TABLE>
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1 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. These figures assume the
reinvestment of dividend and capital gain distributions. Performance figures
for the classes differ because each class maintains a distinct expense
structure. Performance would have been lower during the specified periods if
certain fees and expenses had not been waived by the Fund.
2 Money Fund Report Averages are compiled by iMoneyNet, Inc., (formerly IBC
Financial Data) an independent money market mutual fund rating service. The
iMoneyNet All Tax-Free Money Funds Average is the average of all tax-exempt
municipal money market funds that invest in obligations of tax-exempt
entities, including state and municipal authorities. Averages do not reflect
expenses, which have been deducted from theFund's returns.
3 Lipper figures represent the average of the total returns reported by all of
the mutual funds designated by Lipper Inc. as falling into the category
indicated. These figures do not reflect sales charges.
4 Benchmark returns are for the periods beginning March 31, 1995, for the
Institutional Class and November 30, 1997, for the Investment Class.
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5
<PAGE>
Domestic Fixed Income Funds
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LETTER TO SHAREHOLDERS
average maturity of no longer than three years. This very short duration is
intended to provide investors with an attractive investment alternative to lower
yielding tax-free money market funds. We seek to achieve relative stability of
principal in the Fund by investing in bonds with short-term maturities and
anticipated early redemptions.
During the annual period, we continued to add value through individual security
selection of attractively priced bonds. We continue to believe that bonds with
sinking fund retirements and mortgage prepayment calls offer attractive
investment opportunities, and we maintain our investments in these securities.
MARKET OUTLOOK
In our view, municipal bonds remain moderately undervalued relative to other
fixed income asset classes. We believe the relative lack of supply, especially
if municipalities cannot refund due to rising interest rates, as well as the
level of participation by large institutional players will continue to be key
drivers of municipal market conditions over the months ahead. We will continue
to focus on the purchase of high quality issues, such as government-backed
bonds, as we believe investors are seldom rewarded for purchasing lower-rated
issues.
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TAXABLE FIXED INCOME FUNDS:
INVESTMENT GRADE
O FIXED INCOME
O SHORT-TERM FIXED INCOME
MARKET REVIEW
Overall, the US fixed income markets performed strongly during the fiscal year.
Such strong performance was especially remarkable in light of the challenges
presented during the period. Primary among these was the uncertainty surrounding
the length and extent of the Fed's tightening campaign. In an attempt to quell
rising inflation and unsustainably strong economic growth, the Federal Reserve
Board raised interest rates by 1.25% through four hikes during the fiscal year.
Continuing their gradual approach from the summer of 1999, the Fed raised the
targeted federal funds rate by 0.25% at each of their November 1999 and February
and March 2000 meetings. In a more aggressive effort to slow the economy, the
Fed then raised interest rates by 0.50% in May. Since then, the Fed has chosen
not to raise interest rates, primarily based on signs that the economy may be
slowing. On October 31, 2000, the targeted federal funds rate stood at 6.50%.
Particularly challenging to the spread sectors--the corporate, mortgage and
asset-backed sectors--was the `scarcity value' created by the US Treasury. The
US Treasury announced its decision in mid-March to reduce the number of auctions
held and to institute a buyback program, whereby the US Treasury would buy back
its own longer-dated issues with budget surplus monies. Year-to-date, the
Treasury has purchased $22.25 billion of outstanding debt, on schedule to meet
its previously announced $30 billion for the year 2000.
On an annualized basis, Treasuries are shaping up to have their best yearly
return since 1995.
For the fiscal year, US Treasuries produced a nominal annual return of 8.43%.
Two-year US Treasury yields rose by 0.13% to 5.92%, but the 30-year Treasury
yield declined by 0.37% to 5.79%.
During the first half of the fiscal year, the Treasury yield curve became
significantly inverted for the first time since 1990, in response to an
aggressive Federal Reserve Board, a diminishing supply of longer-dated US
Treasuries, and the US Treasury's debt buyback program. By early March, 30-year,
10-year, and 5-year yields were all lower than 2-year Treasury yields. In the
second calendar quarter, Treasury yields were mixed, with yields declining at
the short end of the curve, while longer-term bond yields rose. Dominant market
technicals shifted during the third calendar quarter, as the Federal Reserve
Board had appeared to successfully engineer a `soft landing' for the US economy.
In addition, the euro currency grew ever weaker, and oil prices stayed high.
This background created a suitable environment for investors to re-enter the
bond markets. As a result, the Treasury yield curve steepened during the
quarter, dramatically reversing the significant inversion of the prior six
months. The yield curve inverted by as much as 0.76% earlier in the year, but
ended the period inverted by only 0.13%.
For the twelve months, commercial mortgage-backed securities performed the best
of the US bond market sectors, outperforming US Treasuries by 0.78%.
Asset-backed securities and residential mortgages came in second and third, with
0.27% and 0.10% returns in excess
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6
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Domestic Fixed Income Funds
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LETTER TO SHAREHOLDERS
of Treasuries, respectively. Of the spread sectors, only the corporate sector
underperformed US Treasuries for the fiscal year. Still, higher quality
corporate credits significantly outperformed lower quality credits, as investors
sought the safety of higher quality.
O FIXED INCOME
Fixed Income Institutional Class outperformed its benchmark index for the twelve
months ended October 31, 2000. The Fund returned 7.55% for the annual period, as
compared to 7.30% for the Lehman Brothers Aggregate Bond Index. We stayed true
to our guiding principle that regardless of the direction of interest rates, we
will use a focused bottom-up approach to determine fundamental value in
individual issues as we seek to provide outstanding risk-adjusted returns over
the long term.
The Fund primarily benefited from its higher allocation to spread sectors.
During the first quarter of the fiscal year, the portfolio benefited from the
contraction in credit
<TABLE>
<CAPTION>
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURNS TOTAL RETURNS
Periods ended Past 1 Past 3 Past 5 Since Past 1 Past 3 Past 5 Since
October 31, 2000 year years years inception year years years inception
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed Income
Institutional Class 1
(inception 9/18/92) 7.55% 17.43% 36.30% 78.00% 7.55% 5.50% 6.39% 7.36%
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Lehman Brothers
Aggregate Bond Index 2 7.30% 17.94% 35.94% 67.17%4 7.30% 5.66% 6.33% 6.56%4
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Lipper Intermediate
Investment Grade
Debt Funds Average 3 5.84% 14.16% 29.74% 58.99%4 5.84% 4.51% 5.34% 5.89%4
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</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURNS TOTAL RETURNS
Periods ended Past 1 Since Past 1 Since
October 31, 2000 year inception year inception
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fixed Income
Investment Class 1
(inception 2/11/98) 7.19% 13.55% 7.19% 4.78%
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Lehman Brothers
Aggregate Bond Index 2 7.30% 14.85%4 7.30% 5.33%4
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Lipper Intermediate
Investment Grade
Debt Funds Average 3 5.84% 11.51%4 5.84% 4.16%4
--------------------------------------------------------------------------------------------------------------
</TABLE>
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1 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. These figures assume the
reinvestment of dividend and capital gain distributions. Performance figures
for the classes differ because each class maintains a distinct expense
structure. Performance would have been lower during the specified periods if
certain fees and expenses had not been waived by the Fund.
2 The Lehman Brothers Aggregate Bond Index is unmanaged and represents US
domestic taxable investment grade bonds including US Treasuries, agencies,
corporate, mortgage-backed and asset-backed securities with an average
maturity and duration in the intermediate range. Index returns do not reflect
expenses, which have been deducted from the Fund's returns.
3 Lipper figures represent the average of the total returns reported by all of
the mutual funds designated by Lipper Inc. as falling into the category
indicated. These figures do not reflect sales charges.
4 Benchmark returns are for the periods beginning September 30, 1992, for the
Institutional Class and February 28, 1998, for the Investment Class.
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7
<PAGE>
Domestic Fixed Income Funds
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LETTER TO SHAREHOLDERS
spreads, which resulted in positive relative returns for all sectors of the
fixed income market versus duration-matched Treasuries. The spread sectors
underperformed duration-matched US Treasuries for the second quarter of the
Fund's fiscal year. Credit spreads widened significantly as the Treasury yield
curve inverted and spread sector yields were basically unchanged. Still, private
label mortgage bonds and short-dated corporate and asset-backed securities were
among the portfolio's best performers for the quarter.
During the second half of the fiscal year, credit spreads once again narrowed at
the long-term end of the curve. Market anticipation of a less aggressive Federal
Reserve Board and less than anticipated corporate debt issuance, especially in
the telecommunication sectors, lent a positive tone to credit markets.
Commercial mortgage-backed securities and asset-backed securities were standout
performers for the portfolio, posting strong excess returns over
duration-matched Treasuries. Technicals and fundamentals remained well balanced
in both of these sectors. The residential mortgage sector continued to perform
well, too, despite large-scale liquidations of bank balance sheet portfolios
brought on by the combination of a flat yield curve, a shrinking deposit base,
and strong loan growth.
O SHORT-TERM FIXED INCOME
The objective of Short-Term Fixed Income is to provide a high level of income
with limited price volatility through the purchase of short-term investment
grade securities. The portfolio management team particularly seeks short-term
securities with both a comparatively high initial yield and the potential to
appreciate in value should yield spreads contract toward the target yield we
assign to that individual bond.
Short-Term Fixed Income Institutional Class outperformed its benchmark for the
twelve months ended October 31, 2000. The Fund returned 6.63% for the annual
period, as compared to 5.57% for the Merrill Lynch 1 Year Treasury Bill Index.
In general, the Fund's significant allocation to the top-performing spread
sectors contributed positively to performance.
During the first half of the fiscal year, the Fund particularly benefited from
the significant dislocations in the spread sectors in what proved to be a
volatile market environment. Short-duration, high quality taxable municipal
securities were one of the best performing sectors during these months. These
securities were then sold opportunistically in favor of mortgages, corporates
and asset-backed securities. Commercial mortgage-
<TABLE>
<CAPTION>
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURNS TOTAL RETURNS
Periods ended Past 1 Past 3 Past 5 Since Past 1 Past 3 Past 5 Since
October 31, 2000 year years years inception year years years inception
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Short-Term Fixed Income
Institutional Class 1
(inception 3/13/95) 6.63% 19.14% 34.75% 39.90% 6.63% 6.01% 6.15% 6.14%
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Merrill Lynch 1 Year
Treasury Bill Index 2 5.57% 16.69% 30.94% 36.70%4 5.57% 5.28% 5.54% 5.70%4
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Lipper Short Investment
Grade Debt
Funds Average 3 5.76% 15.52% 29.56% 37.00%4 5.76% 4.92% 5.31% 5.79%4
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</TABLE>
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1 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. These figures assume the
reinvestment of dividend and capital gain distributions. Performance would
have been lower during the specified periods if certain fees and expenses had
not been waived by the Fund.
2 The Merrill Lynch 1 Year Treasury Bill Index tracks the performance of the 1
Year Treasury Bill market. Index returns do not reflect expenses, which have
been deducted from the Fund's returns.
3 Lipper figures represent the average of the total returns reported by all of
the mutual funds designated by Lipper Inc. as falling into the category
indicated. These figures do not reflect sales charges.
4 Benchmark returns are for the periods beginning March 31, 1995.
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8
<PAGE>
Domestic Fixed Income Funds
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LETTER TO SHAREHOLDERS
backed securities, residential mortgage-backed securities, and asset-backed
securities each performed well during the second half of the fiscal year. Added
to that was an overall bond market that reacted positively to a Federal Reserve
Board seemingly on hold.
MARKET OUTLOOK
Going forward, confirmation of a slowing US economy and a continuation of
divided government after the November elections, ie, executive and legislative
branches controlled by different political parties, are likely necessary to
maintain the fixed income market's positive momentum into 2001. With yield
spreads at historically wide levels, we believe most of the spread sectors will
likely outperform US Treasuries on a six-month to one-year horizon. ERISA reform
legislation, which will enable broader investment by pension funds in investment
grade structured credit is nearing finalization. This should add to the positive
technical backdrop for the spread sectors, especially asset-backed and
commercial mortgage-backed securities. As bottom-up security selectors, we will
continue to look for those specific bonds in these sectors that we believe have
the best risk-adjusted return potential.
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TAXABLE FIXED INCOME FUNDS: HIGH YIELD
O HIGH YIELD BOND
MARKET REVIEW
For the twelve months ended October 31, 2000, high yield bonds underperformed US
Treasuries. The CS First Boston High Yield Index posted a return of -0.77% for
the fiscal year, while US Treasuries returned 6.73%1 for the same time period.
The high yield market was negatively impacted by rising interest rates, supply
outpacing demand and what is known as negative event risk. During the annual
period, this negative event risk came in the form of credit rating downgrades
and a historically high default rate.
The increase in credit risk premiums was the major investment theme over the
last twelve months. In both investment grade and non-investment grade corporate
debt, yield spreads widened irrespective of individual creditworthiness.
Compounding the underperformance of the high yield asset class was the fact that
the lower the credit quality of the issuer, the greater the yields widened.
Clearly, the increased event risk in a number of sectors, especially cyclicals
and telecommunications, and credit deterioration of specific securities placed a
greater premium on skillful sector and security selection.
More recently, the market witnessed a liquidation of dealer inventory and
reduced liquidity. This followed a number of high profile takeovers of high
yield dealers and the subsequent consolidation of risk positions. Coupled with
ongoing uncertainty surrounding the US presidential election and concerns over
an anticipated acceleration in high yield defaults in 2001, the high yield
market ended the fiscal year at depressed levels.
O HIGH YIELD BOND
High Yield Bond Institutional Class returned 2.45% for the twelve months ended
October 31, 2000, outperforming its benchmark return of -0.77%. This strong
performance was primarily due to our issue specific credit analysis. Our
overweighting of the telecommunications sector, and more specifically global
issuers, added value during the first half of the fiscal year. However, after
several high profile earnings revisions in the third calendar quarter, these
holdings generally detracted from performance over the annual period.
The biggest change to our strategy since our last report was our increasingly
neutral sector allocation. We reduced the portfolio's weighting in fixed
communication issuers. We then redeployed those assets into the industrial and
cyclical sectors, partially reversing the portfolio's underweight positions
there. In our view, the industrial and cyclical sectors cheapened on a relative
value basis. We continued to be overweight global issuers, as we believe that
they offered better relative value.
Our larger sector exposure continued to be in wireless providers, primarily due
to robust demand and industry consolidation. We maintained a bias towards
international wireless companies that, in our view, face less competition than
their domestic counterparts. We also maintained a significant weighting in
short-duration paper in the Fund. This strategy is intended to provide some
cushion in the event that markets become more volatile.
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1 Ten-year US Treasury return. Source: CS First Boston High Yield Indices --
Month Ending October 2000.
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9
<PAGE>
Domestic Fixed Income Funds
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LETTER TO SHAREHOLDERS
MARKET OUTLOOK
Looking ahead, we believe the outlook for high yield bonds is solid,
particularly given the poor performance of the overall market this year. In our
opinion, high yield bonds are now attractively valued relative to US investment
grade securities. As evidence, the Moody's trailing twelve-month default rate
stood at 4.9% as of October 31, 2000. But, at the time of this writing, current
yield spread levels (which had widened further with the increased equity market
volatility and concern over the election stalemate) correspond to a 14.1%*
default rate, discounting a significant pick-up in defaults. High yield spreads
to Treasuries are currently trading at near recessionary levels, despite a very
strong economy.
Given these factors, we believe the high yield fixed income sector has been this
attractive on a fundamental basis relative to Treasuries only two other times in
the last ten years -- during the fall of 1998 and at the start of 1991. Both
periods were followed by significant outperformance of the high yield asset
class versus Treasuries. Of course, past performance is not a guarantee of
future results, but history may serve as a useful guide.
<TABLE>
<CAPTION>
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURNS TOTAL RETURNS
Periods ended Past 1 Since Past 1 Since
October 31, 2000 year inception year inception
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
High Yield Bond
Institutional Class 1
(inception 3/16/98) 2.45% 10.00% 2.45% 3.69%
------------------------------------------------------------------------------------------------------------
CS First Boston High
Yield Index 2 (0.77)% (2.53)%4 (0.77)% (0.97)%4
------------------------------------------------------------------------------------------------------------
Lipper High Yield
Funds Average 3 (2.77)% (6.67)%4 (2.77)% (2.76)%4
------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURNS TOTAL RETURNS
Periods ended Past 1 Since Past 1 Since
October 31, 2000 year inception year inception
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
High Yield Bond
Investment Class 1
(inception 9/15/98) 2.34% 19.02% 2.34% 8.53%
------------------------------------------------------------------------------------------------------------
CSFirst Boston High
Yield Index 2 (0.77)% 2.64%4 (0.77)% 1.26%4
------------------------------------------------------------------------------------------------------------
Lipper High Yield
Funds Average 3 (2.77)% 0.80%4 (2.77)% 0.28%4
</TABLE>
--------------------------------------------------------------------------------
1 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. These figures assume the
reinvestment of dividend and capital gain distributions. Performance figures
for the classes differ because each class maintains a distinct expense
structure. Performance would have been lower during the specified periods if
certain fees and expenses had not been waived by the Fund.
2 The CS First Boston High Yield Index is a trader-priced portfolio constructed
to mirror the global high yield debt market. Index returns do not reflect
expenses, which have been deducted from the Fund's returns.
3 Lipper figures represent the average of the total returns reported by all of
the mutual funds designated by Lipper Inc. as falling into the category
indicated. These figures do not reflect sales charges.
4 Benchmark returns are for the periods beginning March 31, 1998, for the
Institutional Class and September 30, 1998, for the Investment Class.
* "Defaults and the 1998 Cohort," Merrill Lynch 11/8/00.
--------------------------------------------------------------------------------
10
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
That said, we do not believe the high yield market will experience a dramatic
bounce. Money continues to be channeled into equity markets, market technicals
remain weak, and new issue supply awaits any pick-up in demand. In our opinion,
the primary risks to the high yield market at this point would likely be a
dramatic slowdown in the US economy or significantly higher interest rates. Both
or either of these events could lead to a higher default rate. We are sensitive
to both of these risks and continue to invest with these risks in mind. However,
without actual evidence that either of these scenarios is likely in the near
term, the high yield market currently seems to have largely discounted these
events. In addition, with the average price of high yield debt in the Index
trading at 78 cents on the dollar, we like the risk/reward outlook for this
asset class. For yield-oriented investors, willing to accept the risks
associated with below investment grade bonds, we believe high yield bonds
currently offer good value versus equities and other fixed income investments.
We believe the Fund is well positioned to take advantage of what we expect will
be a relatively stable high yield market with attractive yields over the next
year. Most importantly, we continue to invest with a longer-term perspective in
companies we believe to either be improving on a fundamental credit basis or
that are currently trading at undervalued levels.
--------------------------------------------------------------------------------
11
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
PERFORMANCE COMPARISON
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
MUNICIPAL BOND INSTITUTIONAL CLASS 1, LEHMAN BROTHERS 5 YEAR
G.O. INDEX AND LIPPER INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE
GROWTH OF A $250,000 INVESTMENT (SINCE DECEMBER 13, 1991)2
Lipper Intermediate
Municipal Bond Lehman Brothers 5 Year Municipal Debt
Institutional Class G.O. Index Funds Average
12/31/91 250,000 250,000 250,000
04/30/92 267,000 256,278 252,748
10/31/92 279,575 267,977 263,102
04/30/93 303,525 281,839 280,861
10/31/93 320,700 293,260 294,989
04/30/94 314,800 289,970 287,855
10/31/94 320,200 291,639 288,137
04/30/95 338,100 304,998 303,448
10/31/95 355,100 321,832 320,239
04/30/96 363,700 326,923 323,576
10/31/96 379,600 337,302 335,018
04/30/97 387,300 342,665 340,987
10/31/97 407,950 359,266 358,926
04/30/98 419,550 366,147 366,686
10/31/98 434,750 382,681 383,821
04/30/99 442,200 389,967 388,947
10/31/99 431,350 386,860 378,572
04/30/00 440,125 391,347 385,462
10/31/00 459,150 409,184 403,254
Average Annual Total Return for the Periods Ended October 31, 2000
One-Year 6.45% Three-Year 4.02% Five-Year 5.27% Since 12/13/91 2 7.08%
--------------------------------------------------------------------------------
1 On February 28, 2000 the Institutional Shares were renamed the Institutional
Class.
2 The Fund's inception date.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. These figures assume the
reinvestment of dividend and capital gain distributions. Performance would have
been lower during the specified periods if certain fees and expenses had not
been waived by the Fund.
The Lehman Brothers 5 Year G.O. Index includes over 1,900 intermediate term
General Obligation tax-exempt municipal bonds with an average maturity range of
four to six years. Lipper figures represent the average of the total returns
reported by all the mutual funds designated by Lipper Inc. as falling into the
category indicated. Benchmark returns are for the period beginning December 31,
1991.
--------------------------------------------------------------------------------
12
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
PERFORMANCE COMPARISON
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
MUNICIPAL BOND INVESTMENT CLASS 1, LEHMAN BROTHERS 5 YEAR
G.O. INDEX AND LIPPER INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE
GROWTH OF A $10,000 INVESTMENT (SINCE JULY 30, 1997)2
Lipper Intermediate
Municipal Bond Lehman Brothers 5 Year Municipal Debt
Investment Class G.O. Index Funds Average
07/31/97 10,001 10,000 10,000
10/31/97 10,122 10,098 10,071
01/31/98 10,375 10,311 10,328
04/30/98 10,407 10,292 10,280
07/31/98 10,580 10,484 10,476
10/31/98 10,771 10,756 10,743
01/31/99 10,927 10,927 10,924
04/30/99 10,942 10,961 10,885
07/31/99 10,828 10,860 10,715
10/31/99 10,662 10,874 10,581
01/31/00 10,637 10,890 10,569
04/30/00 10,869 11,000 10,758
07/31/00 11,149 11,321 11,053
10/31/00 11,325 11,501 11,243
Average Annual Total Return for the Periods Ended October 31, 2000
One-Year 6.21% Three-Year 3.81% Since 7/30/97 2 3.90%
--------------------------------------------------------------------------------
1 On February 28, 2000 the Service Shares were renamed the Investment Class.
2 The Fund's inception date.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. These figures assume the
reinvestment of dividend and capital gain distributions. Performance would have
been lower during the specified periods if certain fees and expenses had not
been waived by the Fund.
The Lehman Brothers 5 Year G.O. Index includes over 1,900 intermediate term
General Obligation tax-exempt municipal bonds with an average maturity range of
four to six years. Lipper figures represent the average of the total returns
reported by all the mutual funds designated by Lipper Inc. as falling into the
category indicated. Benchmark returns are for the period beginning July 31,
1997.
--------------------------------------------------------------------------------
13
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
PERFORMANCE COMPARISON
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
SHORT-TERM MUNICIPAL BOND INSTITUTIONAL CLASS 1,
iMONEYNET ALL TAX-FREE MONEY FUNDS AVERAGE
AND LIPPER SHORT-TERM MUNICIPAL DEBT FUNDS AVERAGE
GROWTH OF A $250,000 INVESTMENT (SINCE MARCH 6, 1995)2
Short-Term iMoneyNet All Lipper Short-Term
Municipal Bond Tax-Free Money Municipal Debt
Institutional Class Funds Average Funds Average
03/31/95 250,000 250,000 250,000
04/30/95 253,075 250,750 250,825
07/31/95 255,875 252,913 255,847
10/31/95 260,975 255,018 259,006
01/31/96 265,700 257,114 263,277
04/30/96 267,400 258,970 263,381
07/31/96 271,525 260,891 266,103
10/31/96 276,350 262,853 269,523
01/31/97 280,875 264,856 272,578
04/30/97 283,850 266,767 274,049
07/31/97 291,625 268,961 279,344
10/31/97 295,525 271,064 281,920
01/31/98 300,300 273,238 285,771
04/30/98 302,125 275,210 287,087
07/31/98 306,625 277,335 290,863
10/31/98 311,775 279,336 295,570
01/31/99 315,625 281,212 298,892
04/30/99 317,075 282,874 300,329
07/31/99 317,125 284,774 300,356
10/31/99 315,925 286,743 301,227
01/31/00 317,350 288,928 302,493
04/30/00 322,950 291,159 305,405
07/31/00 328,825 293,875 310,159
10/31/00 333,350 296,525 313,850
Average Annual Total Return for the Periods Ended October 31, 2000
One-Year 5.52% Three-Year 4.10% Five-Year 5.02% Since 3/6/95 2 5.22%
--------------------------------------------------------------------------------
1 On February 28, 2000 the Institutional Shares were renamed the Institutional
Class.
2 The Fund's inception date.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. These figures assume the
reinvestment of dividend and capital gain distributions. Performance would have
been lower during the specified periods if certain fees and expenses had not
been waived by the Fund.
Money Fund Report Averages are compiled by iMoneyNet, Inc. (formerly
IBC Financial Data), an independent money market mutual fund rating service. The
iMoneyNet All Tax-Free Money Funds Average is the average of all tax-exempt
municipal money market funds that invest in obligations of tax-exempt entities,
including state and municipal authorities. Lipper figures represent the average
of the total returns reported by all the mutual funds designated by Lipper Inc.
as falling into the category indicated.
Benchmark returns are for the period beginning March 31, 1995.
--------------------------------------------------------------------------------
14
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
PERFORMANCE COMPARISON
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
SHORT-TERM MUNICIPAL BOND INVESTMENT CLASS 1,
iMONEYNET ALL TAX-FREE MONEY FUNDS AVERAGE AND LIPPER
SHORT-TERM MUNICIPAL DEBT FUNDS AVERAGE
GROWTH OF A $10,000 INVESTMENT (SINCE DECEMBER 3, 1997)2
Short-Term iMoneyNet All Lipper Short-Term
Municipal Bond Tax-Free Money Municipal Debt
Investment Class Funds Average Funds Average
12/31/97 10,000 10,000 10,000
01/31/98 10,114 10,053 10,106
04/30/98 10,169 10,126 10,153
07/31/98 10,314 10,204 10,286
10/31/98 10,480 10,277 10,453
01/31/99 10,642 10,346 10,570
04/30/99 10,684 10,408 10,621
07/31/99 10,679 10,477 10,622
10/31/99 10,642 10,550 10,653
01/31/00 10,682 10,630 10,698
04/30/00 10,853 10,712 10,801
07/31/00 11,043 10,812 10,969
10/31/00 11,199 10,914 11,107
Average Annual Total Return for the Periods Ended October 31, 2000
One-Year 5.24% Since 12/3/97 2 3.97%
--------------------------------------------------------------------------------
1 On February 28, 2000 the Service Shares were renamed the Investment Class.
2 The Fund's inception date.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. These figures assume the
reinvestment of dividend and capital gain distributions. Performance would have
been lower during the specified periods if certain fees and expenses had not
been waived by the Fund.
Money Fund Report Averages are compiled by iMoneyNet, Inc. (formerly
IBC Financial Data), an independent money market mutual fund rating service. The
iMoneyNet All Tax-Free Money Funds Average is the average of all tax-exempt
municipal money market funds that invest in obligations of tax-exempt entities,
including state and municipal authorities. Lipper figures represent the average
of the total returns reported by all the mutual funds designated by Lipper Inc.
as falling into the category indicated.
Benchmark returns are for the period beginning November 30, 1997.
--------------------------------------------------------------------------------
15
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
PERFORMANCE COMPARISON
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
FIXED INCOME INSTITUTIONAL CLASS 1,
LEHMAN BROTHERS AGGREGATE BOND INDEX AND
LIPPER INTERMEDIATE INVESTMENT GRADE DEBT FUNDS AVERAGE
GROWTH OF A $250,000 INVESTMENT (SINCE SEPTEMBER 18, 1992)3
Lipper Intermediate
Fixed Income Lehman Brothers Aggregate Investment Grade
Institutional Class Bond Index Debt Funds Average
9/30/92 250,000 250,000 250,000
10/31/92 249,500 246,675 245,974
4/30/93 271,825 262,850 262,855
10/31/93 292,625 275,956 277,203
4/30/94 281,525 265,047 265,420
10/31/94 285,075 265,814 265,368
4/30/95 302,400 284,457 281,796
10/31/95 326,500 307,422 303,241
4/30/96 329,025 309,017 304,527
10/31/96 346,950 325,353 320,106
4/30/97 354,600 330,908 325,700
10/31/97 378,950 354,327 347,324
4/30/98 391,600 366,998 359,082
10/31/98 410,150 387,362 375,128
4/30/99 414,950 389,997 378,668
10/31/99 413,750 389,363 375,661
4/30/00 421,300 394,860 378,519
10/31/00 445,000 417,770 397,465
Average Annual Total Return for the Periods Ended October 31, 2000
One-Year 7.55% Three-Year 5.50% Five-Year 6.39% Since 9/18/92 2 7.36%
--------------------------------------------------------------------------------
1 On February 28, 2000 the Institutional Shares were renamed the Institutional
Class.
2 The Fund's inception date.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. These figures assume the
reinvestment of dividend and capital gain distributions. Performance would have
been lower during the specified periods if certain fees and expenses had not
been waived by the Fund.
The Lehman Brothers Aggregate Bond Index is unmanaged and represents US domestic
taxable investment grade bonds including US Treasuries, agencies, corporate,
mortgage-backed and asset-backed securities. Lipper figures represent the
average of the total returns reported by all the mutual funds designated by
Lipper Inc. as falling into the category indicated.
Benchmark returns are for the period beginning September 30, 1992.
--------------------------------------------------------------------------------
16
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
PERFORMANCE COMPARISON
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
FIXED INCOME INVESTMENT CLASS 1,
LEHMAN BROTHERS AGGREGATE BOND INDEX AND
LIPPER INTERMEDIATE INVESTMENT GRADE DEBT FUNDS AVERAGE
GROWTH OF A $10,000 INVESTMENT (SINCE FEBRUARY 11, 1998)2
Lipper Intermediate
Fixed Income Lehman Brothers Aggregate Investment Grade
Investment Class Bond Index Debt Funds Average
02/11/98 10,000 10,000 10,000
04/30/98 10,063 10,086 10,079
07/31/98 10,285 10,290 10,266
10/31/98 10,526 10,646 10,542
01/31/99 10,705 10,815 10,711
04/30/99 10,636 10,718 10,629
07/31/99 10,508 10,544 10,443
10/31/99 10,594 10,701 10,549
01/31/00 10,530 10,613 10,481
04/30/00 10,773 10,852 10,650
07/31/00 11,060 11,173 10,927
10/31/00 11,355 11,485 11,151
Average Annual Total Return for the Periods Ended October 31, 2000
One-Year 7.19% Since 2/11/98 2 4.78%
--------------------------------------------------------------------------------
1 On February 28, 2000 the Service Shares were renamed the Investment Class.
2 The Fund's inception date.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. These figures assume the
reinvestment of dividend and capital gain distributions. Performance would have
been lower during the specified periods if certain fees and expenses had not
been waived by the Fund.
The Lehman Brothers Aggregate Bond Index is unmanaged and represents US domestic
taxable investment grade bonds including US Treasuries, agencies, corporate,
mortgage-backed and asset-backed securities. Lipper figures represent the
average of the total returns reported by all the mutual funds designated by
Lipper Inc. as falling into the category indicated.
Benchmark returns are for the period beginning February 28, 1998.
--------------------------------------------------------------------------------
17
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
PERFORMANCE COMPARISON
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
SHORT-TERM FIXED INCOME INSTITUTIONAL CLASS 1, MERRILL LYNCH
1 YEAR TREASURY BILL INDEX, MERRILL LYNCH 6 MONTH TREASURY BILL
INDEX AND LIPPER SHORT INVESTMENT GRADE DEBT FUNDS AVERAGE
GROWTH OF A $250,000 INVESTMENT (SINCE MARCH 13, 1995)2
Short-Term
Fixed Income Merrill Lynch Lipper Short Investment Merrill Lynch
Institutional 1 Year Treasury Grade Debt 6 Month Treasury
Class Bill Index Funds Average Bill Index
03/31/95 250,650 250,000 250,000 250,000
04/30/95 251,750 252,174 252,250 252,131
07/31/95 255,475 257,146 258,670 256,284
10/31/95 259,550 261,005 264,061 259,881
01/31/96 264,800 265,704 270,557 263,904
04/30/96 266,200 267,675 268,854 266,821
07/31/96 270,000 271,101 272,200 270,248
10/31/96 275,375 276,247 278,587 274,167
01/31/97 278,725 279,921 282,079 277,748
04/30/97 283,025 283,311 284,789 281,441
07/31/97 288,900 288,815 291,995 285,644
10/31/97 293,550 292,868 296,245 289,574
01/31/98 298,750 297,036 301,216 293,459
04/30/98 301,600 300,717 304,208 297,293
07/31/98 306,550 304,813 308,548 301,470
10/31/98 313,925 311,372 314,123 306,126
01/31/99 317,550 313,600 317,749 309,423
04/30/99 320,975 316,811 320,030 312,722
07/31/99 323,500 320,300 320,285 316,318
10/31/99 328,000 323,734 323,786 320,015
01/31/00 330,750 325,935 325,309 323,914
04/30/00 336,725 330,989 329,421 328,705
07/31/00 343,600 337,029 336,114 333,967
10/31/00 349,750 341,750 342,500 341,359
Average Annual Total Return for the Periods Ended October 31, 2000
One-Year 6.63% Three-Year 6.01% Five-Year 6.15% Since 3/13/95 2 6.14%
--------------------------------------------------------------------------------
1 On February 28, 2000 the Institutional Shares were renamed the Institutional
Class.
2 The Fund's inception date.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. These figures assume the
reinvestment of dividend and capital gain distributions. Performance would have
been lower during the specified periods if certain fees and expenses had not
been waived by the Fund.
The Merrill Lynch 1 Year T-bill Index tracks the performance of the 1 year
Treasury Bill market. The Merrill Lynch 6 Month T-bill Index tracks the
performance of the 6 month Treasury Bill Market. The Fund changed its benchmark
from the Merrill Lynch 6 Month Treasury Bill Index to the Merrill Lynch 1 year
Treasury Bill Index.This index more closely reflects the dollar weighted average
portfolio maturity of the Fund. Lipper figures represent the average of the
total returns reported by all the mutual funds designated by Lipper Inc. as
falling into the category indicated.
Benchmark returns are for the period beginning March 31, 1995.
--------------------------------------------------------------------------------
18
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
PERFORMANCE COMPARISON
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
HIGH YIELD BOND INSTITUTIONAL CLASS 1, CS FIRST BOSTON
HIGH YIELD INDEX AND LIPPER HIGH YIELD FUNDS AVERAGE
GROWTH OF A $250,000 INVESTMENT (SINCE MARCH 16, 1998)2
High Yield Bond CS First Boston Lipper High Yield
Institutional Class High Yield Index Funds Average
03/31/98 250,000 250,000 250,000
04/30/98 253,200 251,674 249,243
07/31/98 257,750 254,730 253,925
10/31/98 230,475 232,686 258,421
01/31/99 248,700 246,211 261,509
04/30/99 268,425 253,414 262,220
07/31/99 266,125 250,927 258,348
10/31/99 268,425 245,571 250,052
01/31/00 285,350 250,915 245,312
04/30/00 286,950 248,309 250,071
07/31/00 289,225 252,158 254,048
10/31/00 275,000 243,687 257,330
Average Annual Total Return for the Periods Ended October 31, 2000
One-Year 2.45% Since 3/16/98 2 3.69%
--------------------------------------------------------------------------------
1 On February 28, 2000 the Institutional Shares were renamed the Institutional
Class.
2 The Fund's inception date.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. These figures assume the
reinvestment of dividend and capital gain distributions. Performance would have
been lower during the specified periods if certain fees and expenses had not
been waived by theFund.
The CS First Boston High Yield Index is a trader-priced portfolio constructed to
mirror the global high yield debt market. Lipper figures represent the average
of the total returns reported by all the mutual funds designated by Lipper Inc.
as falling into the category indicated.
Benchmark returns are for the period beginning March 31, 1998.
--------------------------------------------------------------------------------
19
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
PERFORMANCE COMPARISON
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
HIGH YIELD BOND INVESTMENT CLASS 1, CS FIRST BOSTON
HIGH YIELD INDEX AND LIPPER HIGH YIELD FUNDS AVERAGE
GROWTH OF A $10,000 INVESTMENT (SINCE SEPTEMBER 15, 1998)2
High Yield Bond CS First Boston Lipper High Yield
Investment Class High Yield Index Funds Average
09/30/98 10,000 10,000 10,000
10/31/98 10,026 9,801 9,970
01/31/99 10,812 10,371 10,089
04/30/99 11,646 10,674 10,116
07/31/99 11,539 10,569 9,966
10/31/99 11,631 10,344 9,647
01/31/00 12,360 10,569 9,464
04/30/00 12,438 10,459 9,648
07/31/00 12,531 10,621 9,802
10/31/00 11,902 10,264 9,929
Average Annual Total Return for the Periods Ended October 31, 2000
One-Year 2.34% Since 9/15/98 2 8.53%
--------------------------------------------------------------------------------
1 On February 28, 2000 the Service Shares were renamed the Investment Class.
2 The Fund's inception date.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. These figures assume the
reinvestment of dividend and capital gain distributions. Performance would have
been lower during the specified periods if certain fees and expenses had not
been waived by the Fund.
The CS First Boston High Yield Index is a trader-priced portfolio constructed to
mirror the global high yield debt market. Lipper figures represent the average
of the total returns reported by all the mutual funds designated by Lipper Inc.
as falling into the category indicated.
Benchmark returns are for the period beginning September 30, 1998.
--------------------------------------------------------------------------------
20
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
MUNICIPAL BONDS -- 96.58%
ALABAMA -- 1.96%
Alabama 21st Century Authority,
Tobacco
Settlement Revenue, RB,
$2,000,000 5.75%, 12/1/20 ..............$ 1,930,660
Alabama Housing Finance Authority,
Multi-Family Mortgage,The Club
Apartments, RB, Series I, AMT,
1,875,000 5.65%, 6/1/08 ............... 1,852,294
Birmingham, Alabama, Jefferson
Alabama Civic Center, Capital
Outlays, Special Tax Revenue,
800,000 7.40%, 1/1/08 ............... 802,632
Birmingham, Alabama, Industrial
Development Board, Industrial
Revenue Development, American
Metal Products, RB, AMT, LOC:
60,000 4.50%, 4/1/04 ............... 58,552
90,000 4.50%, 4/1/04 ............... 87,827
95,000 5.00%, 4/1/09 ............... 91,520
110,000 5.00%, 4/1/09 ............... 105,971
120,000 5.50%, 4/1/14 ............... 115,265
225,000 5.75%, 4/1/19 ............... 212,546
40,000 5.75%, 4/1/19 ............... 37,786
Birmingham, Alabama, Medical Clinic
Board, Baptist Medical Centers,
RB, ETM,
90,000 8.25%, 7/1/05 ............... 96,519
Birmingham, Alabama, Private Education
Building, Miles College, RB, ACA,
310,000 5.50%, 5/1/28 ............... 285,622
Birmingham, Alabama, Special Care
Facilities Financing Authority,
Methodist Home for Aging, RB, LOC,
3,560,000 5.00%, 3/1/14 ............... 3,414,147
Lauderdale & Florence Counties,
Alabama Public Hospital, RB, ETM,
185,000 7.00%, 7/1/07 ............... 197,164
West Jefferson, Alabama, Amusement
& Public Park Authority, Visionland
Alabama Project, RB, Pre-Refunded
@ 102,4
935,000 7.50%, 12/1/06 .............. 1,028,406
-----------
10,316,911
-----------
AMERICAN SAMOA -- 0.37%
Territory of American Samoa, GO, ACA:
495,000 5.75%, 9/1/05 ............... 501,821
700,000 6.00%, 9/1/06 ............... 716,849
700,000 6.00%, 9/1/07 ............... 716,051
-----------
1,934,721
-----------
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
ARIZONA -- 0.87%
Arizona Health Facilities Authority,
Hospital System Revenue Refunding,
RB, ETM, MBIA,
$ 280,000 6.25%, 9/1/11 ............... $ 291,894
Arizona State Transportation Board,
Excise Tax Revenue, Maricopa County
Regional Area Roads, RB, AMBAC,
440,000 5.60%, 7/1/03 ............... 452,786
Coconino County, Arizona, Unified
School District, GO, AMBAC,
260,000 5.00%, 7/1/01 ............... 260,718
Maricopa County, Arizona, Hospital
Revenue Authority, Phoenix Baptist
Hospital & Medical Center, RB, ETM,
50,000 7.125%, 10/1/02 ............. 51,447
Maricopa County, Arizona, Industrial
Development Authority, John C
Lincoln Hospital, RB, FSA,
210,000 7.00%, 12/1/00 .............. 210,414
Maricopa County, Arizona, Industrial
Development Authority, Pines at
Camelback Apartments Project, RB,
Series A, Asset Guaranty:
145,000 4.90%, 5/1/06 ............... 142,950
125,000 5.00%, 5/1/07 ............... 122,872
310,000 5.30%, 5/1/13 ............... 305,272
Maricopa County, Arizona, Samaritan
Health Service, RB, ETM,
230,000 6.75%, 1/1/04 ............... 236,847
Pinal County, Arizona, Community
College, RB, AMBAC,
280,000 4.75%, 7/1/09 ............... 280,258
Santa Cruz County, Arizona, Industrial
Development Authority, Citizens
Utility Company Project, RB, Optional
Put @ 100,3
850,000 4.75%, 8/1/20 ............... 830,756
Yuma, Arizona, Industrial Development
Authority, Multi-Family Mortgage,
Regency Apartments, RB, Series A,
GNMA,
1,425,000 5.40%, 12/20/17 ............. 1,383,062
-----------
4,569,276
-----------
ARKANSAS -- 0.99%
Arkansas State, Development Finance
Authority, Correction Facilities
Revenue, RB, MBIA,
255,000 5.10%, 10/1/16 .............. 255,569
Drew County, Arkansas, Public Facilities
Board, Single Family Mortgage, RB,
Series A-2, FNMA,
142,240 7.90%, 8/1/11 ............... 147,845
See Notes to Financial Statements.
--------------------------------------------------------------------------------
21
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Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Fayetteville, Arkansas, Public Facilities
Board, Single Family Mortgage, RB,
$ 385,000 7.25%, 4/1/11 ............... $ 398,795
Jefferson County, Arkansas, Health
Care Facility,1978 Conventional
Series, RB, ETM, FSA,
130,000 7.40%, 12/1/10 .............. 145,704
Lonoke County, Arkansas, Residential
Housing, RB, Series B,
106,852 7.375%, 4/1/11 .............. 110,893
Mississippi County, Arkansas, Public
Facilities Board, RB, Series 1,
345,000 7.20%, 7/15/10 .............. 367,504
North Little Rock, Arkansas, Residential
Housing Facilities, Capital
Appreciation, RB,1
2,186,000 0.00%, 12/1/10 .............. 1,094,180
Rogers County, Arkansas, Sales & Use
Tax Redevelopment, RB,
1,875,000 5.35%, 11/1/11 .............. 1,908,956
Rogers, Arkansas, Sales & Use Tax
Revenue, RB,
380,000 5.00%, 11/1/15 .............. 381,486
Saline County, Arkansas, Residential
Housing Facilities, Single Family
Mortgage, RB,
275,000 7.875%, 3/1/11 .............. 284,127
Stuttgart, Arkansas, Public Facilities
Board, Single Family Mortgage, RB,
Series B,
128,179 7.75%, 9/1/11 ............... 134,450
-----------
5,229,509
-----------
CALIFORNIA -- 2.83%
Abag, California, Finance Authority for
Nonprofit Corporations, American
Baptist Homes, COP, Series A,
400,000 5.50%, 10/1/07 .............. 382,904
Atwater, California, Redevelopment
Agency, Downtown Redevelopment
Project, Tax Allocation Bond, Series A,
ACA:
60,000 5.50%, 6/1/01 ............... 60,329
55,000 5.50%, 6/1/02 ............... 55,686
65,000 5.50%, 6/1/03 ............... 66,217
California Home Finance Authority,
Mortgage Backed Securities Program,
RB, Series B, AMT, GNMA / FNMA,
105,000 6.90%, 10/1/24 .............. 108,007
California Statewide Community Housing
Development, Cudahy Gardens Project,
RB, Series I, AMT, LOC,
905,000 5.10%, 10/1/12 .............. 903,842
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
California Statewide Community Housing
Development, Cudahy Gardens
Project, RB, Series I, Mandatory Put
@ 100, AMT, LOC,2
$ 925,000 5.60%, 4/1/16 ............... $ 931,059
California Statewide Community
Housing Development, Riverside
Gardens Project, RB, Series J,
AMT, LOC,
795,000 5.10%, 10/1/12 .............. 793,982
Contra Costa County, California,
Multi-Family Housing, Bollinger
Crest Apartments, RB, Series C,
AMT, FNMA,
400,000 4.85%, 5/1/11 ............... 379,776
Delta County, California, Home
Mortgage Finance, Pacific Mortgage
Backed Securities, RB, Series A, AMT,
MBIA / GNMA,
370,000 6.70%, 6/1/24 ............... 393,983
Emeryville, California, Redevelopment
Agency, Residential Mortgage,
RB, ETM,
145,000 7.50%, 9/1/11 ............... 163,054
Fresno, California, Multi-Family Housing
Authority, Central Valley Coalition
Projects, RB, Series A, AMT, FNMA,
250,000 5.15%, 8/1/07 ............... 250,262
Fresno, California, Multi-Family Housing
Authority, Central Valley Coalition
Projects, RB, Series B, AMT, FNMA,
130,000 5.15%, 8/1/07 ............... 130,136
Fresno, California, Multi-Family Housing
Authority, Woodlands Apartments
Projects, RB, Series A, GNMA,
375,000 6.65%, 5/20/08 .............. 398,490
Los Angeles, California, Community
Redevelopment Agency , Angelus Plaza
Project, RB, Series A, FNMA,
2,670,000 7.40%, 6/15/10 .............. 2,922,555
Los Angeles, California, Community
Redevelopment Authority, Monterey
Hills Project, RB, Series B,
155,000 8.65%, 12/1/22 .............. 168,549
Los Angeles, California, Multi-Family
Housing, Earthquake Rehabilitation,
RB, Series A, AMT, FNMA,
895,000 5.70%, 12/1/27 .............. 915,531
Los Angeles, California, Multi-Family
Housing, Earthquake Rehabilitation,
RB, Series B, Mandatory Put @ 100,
AMT, FNMA,2
3,135,000 5.85%, 12/1/07 .............. 3,220,680
See Notes to Financial Statements.
--------------------------------------------------------------------------------
22
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Los Angeles, California, Regional
Airports Lease, RB,
$ 85,000 10.00%, 1/1/01 .............. $ 85,315
Sacramento, California, Municipal
Utility District, RB, Series M, ETM,
145,000 8.75%, 4/1/03 ............... 153,661
Turlock, California, Public Financing
Authority Revenue, RB,
35,000 5.25%, 9/1/15 ............... 33,099
Vista, California, Multi-Family Housing,
Pepperwood Apartments Project, RB,
Series A, Mandatory Put @ 100,
FNMA,2
2,345,000 5.70%, 6/1/05 ............... 2,396,942
-----------
14,914,059
-----------
COLORADO -- 2.25%
Arvada, Colorado, Industrial
Development Authority, Wanco
Incorporated Project, RB, AMT, LOC:
245,000 5.60%, 12/1/12 .............. 240,271
355,000 5.80%, 12/1/17 .............. 340,505
Aurora, Colorado, Centretech
Metropolitan District, GO, Series C,
Mandatory Put @ 100, LOC,2
1,280,000 4.875%, 12/1/08 ............. 1,254,426
Aurora, Colorado, Single Family
Mortgage Revenue, RB, Series A,
190,000 7.30%, 5/1/10 ............... 194,155
Boulder County, Colorado, Community
Hospital Project, RB, ETM,
150,000 7.00%, 7/1/09 ............... 162,396
Castle Rock Ranch, Colorado, Public
Improvements Authority, RB,
755,000 5.90%, 12/1/03 .............. 772,554
Colorado Housing Finance Authority,
Multi-Family Insured Mortgage, RB,
Series C-3, FHA,
1,455,000 5.70%, 10/1/21 .............. 1,439,155
Colorado Housing Finance Authority,
Single Family Program, RB, AMT,
120,000 5.75%, 11/1/04 .............. 119,408
Colorado Housing Finance Authority,
Single Family Program, RB, Series A,
160,000 4.75%, 11/1/05 .............. 160,565
Colorado Housing Finance Authority,
Single Family Program, RB, Series A-3,
765,000 6.50%, 5/1/16 ............... 815,100
Colorado Housing Finance Authority,
Single Family Program, RB,
Series B-2, AMT,
755,000 6.40%, 11/1/24 .............. 800,542
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Colorado Housing Finance Authority,
Single Family Program, RB, Series B-3,
$1,105,000 6.55%, 5/1/25 ...............$ 1,185,521
Colorado Housing Finance Authority,
Single Family Program, RB, Series C,
155,000 5.00%, 5/1/05 ............... 153,221
Colorado Housing Finance Authority,
Single Family Program, RB, Series D-1,
AMT,
725,000 5.20%, 12/1/05 .............. 733,482
Colorado Student Obligation Board
Authority, RB, Series C, Pre-Refunded
@ 102, AMT,4
710,000 7.15%, 9/1/02 ............... 739,337
Denver, Colorado, City & County, Single
Family Mortgage Revenue Home,
Metro Mayors Caucus, RB, GNMA /
FNMA / FHLMC,
120,000 5.00%, 11/1/15 .............. 116,306
Denver, Colorado, Multi-Family Mortgage,
Buerger Brothers Project, RB, Series A,
AMT, FHA,
200,000 5.10%, 11/1/07 .............. 198,032
Denver, Colorado, Multi-Family Mortgage,
Garden Court Community, RB, FHA,
350,000 4.70%, 7/1/08 ............... 339,458
Vail, Colorado, Single Family Mortgage,
RB, Series A,
125,000 8.125%, 6/1/10 .............. 133,719
Westminster, Colorado, Multi-Family
Housing, Semper Village Apartments,
RB, Mandatory Put @ 100, AXA,2
1,670,000 5.95%, 9/1/06 ............... 1,706,489
Westminster, Colorado, Multi-family
Revenue Refunding, Housing, Oasis
Wexford Apartments, RB, Mandatory
Put @ 100, FNMA,2
280,000 5.35%, 12/1/05 .............. 282,587
-----------
11,887,229
-----------
CONNECTICUT -- 0.93%
Stamford, Connecticut, Housing Authority
Multi-Family Revenue Refunding,
Fairfield Apartments, RB, Mandatory
Put @ 100, AMT,2
2,535,000 4.75%, 12/1/08 .............. 2,349,590
Waterbury, Connecticut, Housing
Mortgage Authority, RB, Series A,
AMBAC / FHA,
1,270,000 4.85%, 7/1/09 ............... 1,248,766
See Notes to Financial Statements.
--------------------------------------------------------------------------------
23
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Waterbury, Connecticut, Housing
Mortgage Authority, RB, Series C,
AMBAC / FHA,
$1,340,000 4.85%, 7/1/09 ...............$ 1,317,595
-----------
4,915,951
-----------
DELAWARE -- 0.48%
Delaware State Economic Development
Authority RB, Peninsula United,
Series A,
35,000 6.00%, 5/1/09 ............... 34,387
Delaware State Economic Development
Authority, Wilmington Friends School
Project:
55,000 6.30%, 7/1/01 ............... 54,884
60,000 6.30%, 7/1/02 ............... 59,620
60,000 6.30%, 7/1/03 ............... 59,330
65,000 6.30%, 7/1/04 ............... 63,943
70,000 6.30%, 7/1/05 ............... 68,326
75,000 6.30%, 7/1/06 ............... 72,451
80,000 6.30%, 7/1/07 ............... 76,658
85,000 6.30%, 7/1/08 ............... 80,614
90,000 6.30%, 7/1/09 ............... 84,420
95,000 6.30%, 7/1/10 ............... 88,326
100,000 6.30%, 7/1/11 ............... 91,660
110,000 6.30%, 7/1/12 ............... 99,563
115,000 6.30%, 7/1/13 ............... 102,747
Delaware State Housing Authority,
Multi-Family Mortgage, RB, HUD,
60,000 6.60%, 7/1/01 ............... 60,469
Delaware State Housing Authority,
Residential Mortgage, RB, Series A,
625,000 8.75%, 6/1/17 ............... 627,387
Delaware Transportation Authority,
Transportation Systems Revenue, RB,
520,000 6.10%, 7/1/02 ............... 533,598
Wilmington, Delaware, Park Authority,
RB, Series B, ETM,
265,000 7.15%, 8/1/06 ............... 281,207
-----------
2,539,590
-----------
DISTRICT OF COLUMBIA -- 0.46%
District of Columbia, Housing Finance
Agency, Mayfair Mansions
Apartments, RB, AMT, FHA,
640,000 5.00%, 2/1/08 ............... 622,138
District of Columbia, Housing Finance
Agency, Single Family Mortgage, RB,
Series A, AMT, FNMA / GNMA,
1,740,000 6.25%, 12/1/28 .............. 1,778,245
-----------
2,400,383
-----------
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
FLORIDA -- 2.83%
Boca Place Associates, Florida, RB, LOC,
$3,820,000 4.65%, 2/1/04 ...............$ 3,790,242
Brevard County, Florida, Health Facility
Revenue Authority, Courtenay Springs
Village, RB, ETM,
815,000 7.375%, 11/15/04 ............ 854,682
Broward County, Florida, Water &
Sewer Utility Revenue, RB,
Pre-Refunded @ 100,4
230,000 6.875%, 9/1/06 .............. 247,475
Dade County, Florida, Aviation Revenue,
RB, Series E, AMBAC,
50,000 5.40%, 10/1/07 .............. 52,195
Dade County, Florida, Government
Leasing Corporation, COP, Series B,
45,000 8.50%, 4/1/07 ............... 45,988
Dade County, Florida, Government
Leasing Corporation, COP, Series C,
250,000 9.00%, 4/1/20 ............... 257,865
Dade County, Florida, Housing Finance
Authority, Multi-Family Mortgage,
Midway Point Phase I, RB, Series A,
Mandatory Put @ 100, AMT, FNMA,2
790,000 5.90%, 6/1/06 ............... 809,671
Dade County, Florida, Housing Finance
Authority, Single Family Mortgage
Revenue, RB, Series B-1, AMT,
FNMA / GNMA,
3,165,703 6.10%, 4/1/27 ............... 3,304,266
Daytona Beach, Florida, Water & Sewer
Revenue, RB, Series 1978, ETM,
400,000 6.75%, 11/15/07 ............. 421,824
Duval County, Florida, Housing Finance
Authority, GNMA Mortgage Backed
Securities Program, RB, Series C,
FGIC / GNMA,
65,000 7.65%, 9/1/10 ............... 66,948
Florida, Miramar, Water Improvement
Assessment, RB, FGIC,
205,000 5.125%, 10/1/20 ............. 205,494
Gainesville, Florida, Utility Systems
Revenue, RB, ETM,
165,000 6.30%, 10/1/06 .............. 173,466
Jacksonville, Florida, Health Facilities
Authority, Saint Vincent Medical Center
Incorporated, RB, ETM,
430,000 9.125%, 1/1/03 .............. 451,061
Jacksonville, Florida, Health Facility
Authority, Saint Catherine Laboure
Manor Incorporated, RB, ETM,
140,000 9.125%, 1/1/03 .............. 146,873
See Notes to Financial Statements.
--------------------------------------------------------------------------------
24
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Miami Beach, Florida, Housing
Authority, Section 8, RB, HUD,
$ 900,000 6.625%, 1/15/09 ............. $ 925,578
Miami-Dade County, Florida, Housing
Finance Authority, RB, Series A, AMT,
FNMA / GNMA,
1,550,000 5.90%, 6/1/25 ............... 1,552,449
Miami, Florida, Fernando Apartments,
654,864 9.75%, 10/1/11 .............. 702,643
Pinellas County, Florida, Housing Finance
Authority, Single Family Mortgage
Program, RB, Series A, AMT, GNMA,
660,000 6.85%, 3/1/29 ............... 699,402
St. John's County, Florida, Industrial
Development Authority, RB,
Series A, MBIA,
185,000 5.50%, 3/1/17 ............... 186,981
-----------
14,895,103
-----------
GEORGIA -- 1.39%
Athens, Georgia, Water & Sewer
Revenue, RB, ETM,
800,000 6.20%, 7/1/08 ............... 878,056
Augusta, Georgia, Housing
Rehabilitation, Multi-Family Housing,
Bon Air, RB, Series C, HUD,
740,000 7.00%, 9/1/05 ............... 767,743
Clayton County, Georgia, Multi-Family
Housing Authority, Pointe South
Apartments Projects, RB, AMT, FNMA,
100,000 5.75%, 1/1/13 ............... 101,078
Fulton County, Georgia, Housing Authority,
Single Family Mortgage, RB, Series A,
AMT, GNMA,
190,000 6.20%, 3/1/13 ............... 188,383
Georgia Housing Authority, Multi-Family
Housing, Ridge Point Apartments
Project, RB, Series A, Mandatory Put
@ 100, FNMA,2
1,985,000 5.70%, 6/1/05 ............... 2,024,918
Gwinnett County, Georgia, Multi-Family
Housing Authority, Singleton-Oxford
Association, Series A, RB, Mandatory
Put @ 100, FNMA,2
990,000 5.50%, 4/1/06 ............... 1,003,820
Savannah, Georgia, Economic
Development Authority Revenue,
College of Art & Design, RB:
1,070,000 6.20%, 10/1/09 .............. 1,090,458
800,000 6.50%, 10/1/13 .............. 819,416
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
St. Marys, Georgia, Housing Authority,
Multi-Family Mortgage, Cumberland
Oaks Apartments, RB, Series A, FHA,
$ 305,000 7.25%, 9/1/05 ............... $ 309,267
St. Marys, Georgia, Housing Authority,
Multi-Family Mortgage, Pines
Apartments, RB, Series C, FHA,
120,000 7.25%, 10/1/05 .............. 120,967
-----------
7,304,106
-----------
HAWAII-- 0.40%
Hawaii State Housing Finance &
Development Corporation, Single Family
Mortgage, Series A, RB, AMT, FNMA,
1,935,000 5.20%, 7/1/12 ............... 1,911,877
Honolulu, Hawaii, Housing Authority,
Multi-Family Mortgage, Waipahu
Towers Project, RB, Series A, AMT,
GNMA,
175,000 6.90%, 6/20/05 .............. 181,704
-----------
2,093,581
-----------
IDAHO -- 0.95%
Bingham County, Idaho, Industrial
Development Company, Supreme
Potatoes Incorporated Project, RB,
AMT, LOC:
45,000 4.60%, 11/1/00 .............. 45,000
145,000 4.75%, 11/1/01 .............. 144,868
65,000 4.85%, 11/1/02 .............. 64,902
240,000 4.95%, 11/1/03 .............. 239,472
260,000 5.05%, 11/1/04 .............. 259,350
265,000 5.15%, 11/1/05 .............. 264,192
290,000 5.20%, 11/1/06 .............. 288,086
305,000 5.30%, 11/1/07 .............. 303,066
325,000 5.40%, 11/1/08 .............. 323,333
355,000 5.50%, 11/1/09 .............. 353,757
80,000 5.60%, 11/1/10 .............. 79,879
85,000 5.70%, 11/1/11 .............. 84,931
90,000 5.80%, 11/1/12 .............. 90,031
Idaho Housing & Finance Association,
Multi-Family Housing, Teton
Apartments, RB, Mandatory Put @
100, AMT, LOC,2
155,000 5.15%, 8/1/04 ............... 154,674
Idaho Housing & Finance Association,
Single Family Mortgage, RB,
Series B, AMT,
285,000 5.65%, 7/1/09 ............... 281,905
Idaho Housing & Finance Association,
Single Family Mortgage, RB,
Series C-2, AMT,
235,000 5.25%, 7/1/11 ............... 232,509
See Notes to Financial Statements.
--------------------------------------------------------------------------------
25
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Idaho Housing & Finance Association,
Single Family Mortgage, RB,
Series F-2, AMT,
$ 510,000 5.10%, 7/1/12 ............... $ 487,448
Idaho Housing Agency, Single Family
Mortgage, RB, Series C-1,
110,000 7.65%, 7/1/10 ............... 111,522
Idaho Housing Agency, Single Family
Mortgage, RB, Series F, AMT,
485,000 5.80%, 7/1/07 ............... 489,835
Idaho Housing & Finance Association,
RB, Series E-2, AMT,
725,000 5.90%, 1/1/15 ............... 735,599
-----------
5,034,359
-----------
ILLINOIS -- 8.41%
Alton, Illinois, Hospital Facility, Alton
Memorial Hospital Project, RB, ETM,
345,000 7.00%, 7/1/05 ............... 364,575
Bedford Park, Illinois, Water Revenue,
RB, Series B, AMT, ACA,
1,325,000 6.00%, 12/15/08 ............. 1,349,592
Belleville, Illinois, St. Clair County,
Single Family Mortgage Revenue, RB,
MGIC, ETM,
20,000 7.25%, 11/1/09 .............. 22,013
Berwyn, Illinois, GO, AMBAC,
800,000 5.375%, 11/15/10 ............ 810,800
Bolingbrook, Illinois, Capital
Appreciation, RB, Series 1A,
735,000 0.00%, 1/1/11 ............... 351,624
Buffalo Grove, Illinois, Economic
Development Authority, RB,
235,000 5.45%, 8/15/02 .............. 235,005
Chicago, Illinois, Equipment Notes,
GO, FGIC,
440,000 5.00%, 1/1/07 ............... 446,261
Chicago, Illinois, Multi-Family Mortgage,
Bryne Mawr / Belle Project, RB,
AMT, GNMA:
140,000 4.95%, 6/1/05 ............... 139,801
135,000 5.25%, 6/1/08 ............... 134,726
135,000 5.35%, 6/1/09 ............... 135,030
145,000 5.45%, 6/1/10 ............... 146,112
140,000 5.50%, 6/1/11 ............... 140,104
145,000 5.55%, 6/1/12 ............... 145,107
Chicago, Illinois, Sales Tax Revenue,
RB, FGIC,
1,000,000 5.00%, 1/1/09 ............... 1,011,290
Darien, Illinois, Park District, GO,
Series B, FSA, Converts to
5.40%, 11/1/051
2,010,000 0.00%, 5/1/12 ............... 1,554,413
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Davis Junction, Illinois, Solid Waste
Improvements, GO, Series B, LOC,
$1,000,000 5.50%, 4/15/10 .............. $ 998,510
Des Plaines, Illinois, Hospital Facility,
Holy Family Hospital, RB, ETM,
155,000 7.00%, 1/1/07 ............... 163,919
Des Plaines, Illinois, Hospital Facility,
Holy Family Hospital, RB, ETM, FGIC,
145,000 7.00%, 1/1/07 ............... 152,418
Des Plaines, Illinois, Hospital Facility,
Holy Family Hospital, RB, ETM, MBIA,
145,000 7.00%, 1/1/07 ............... 152,418
Du Page County, Illinois, Community High
School District, GO, FSA,
1,335,000 5.50%, 12/1/14 .............. 1,358,803
Fairfield, Illinois, Economic Development
Authority, Wayne County Center
Project, RB,
410,000 6.00%, 12/15/05 ............. 417,003
Granite City, Illinois, Hospital Facilities
Revenue, RB, ETM,
165,000 7.00%, 1/1/08 ............... 176,570
Grayslake, Illinois, Multi-Family Housing,
Country Squire Apartments Project,
RB, Series A, FHA,
635,000 6.00%, 6/1/05 ............... 651,808
Greater Peoria, Illinois, Airport Authority,
GO, AMT:
95,000 6.50%, 12/1/05 .............. 100,883
430,000 6.60%, 12/1/06 .............. 457,387
185,000 6.70%, 12/1/07 .............. 197,883
Illinois Development Finance Authority
Revenue, Provena Health, RB,
Series A, MBIA,
1,220,000 5.125%, 5/15/23 ............. 1,120,424
Illinois Development Finance Authority,
Catholic Health, RB, Series A,
Connie Lee,
765,000 5.15%, 2/15/06 .............. 778,747
Illinois Development Finance Authority,
Community Rehabilitation Providers,
RB, Series A:
640,000 5.375%, 7/1/09 .............. 584,589
1,915,000 5.60%, 7/1/19 ............... 1,602,874
Illinois Development Finance Authority,
Debt Restructure East Saint Louis, GO,
705,000 6.875%, 11/15/05 ............ 741,547
Illinois Development Finance Authority,
Fund for Child Project, RB, Series A,
1,205,000 7.40%, 9/1/04 ............... 1,236,414
See Notes to Financial Statements.
--------------------------------------------------------------------------------
26
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Illinois Development Finance Authority,
Section 8, RB, Series A, FHA / MBIA,
$ 120,000 5.20%, 7/1/08 ............... $ 120,142
Illinois Educational Facilities, Authority
Revenue Refunding, Augustana
College, RB:
135,000 4.60%, 10/1/08 .............. 127,197
280,000 5.00%, 10/1/13 .............. 260,543
Illinois Health Facilities Authority,
Lutheran Social Services, RB,
635,000 6.125%, 8/15/10 ............. 596,875
Illinois Health Facilities Authority,
Michael Reese Hospital & Medical
Center, RB, ETM,
300,000 6.75%, 12/1/08 .............. 321,126
Illinois Health Facilities Authority,
Midwest Group LTD, RB, ACA,
620,000 5.375%, 11/15/08 ............ 624,749
Illinois Health Facilities Authority,
Northwestern Medical Facility
Foundation, RB, MBIA,
1,755,000 5.125%, 11/15/28 ............ 1,582,641
Illinois Health Facilities Authority,
Northwestern Memorial Hospital
Project, RB, ETM,
195,000 6.375%, 5/1/03 .............. 199,682
Illinois Health Facilities Authority,
Sydney R. Forkosh Memorial Hospital,
RB, Pre-Refunded @ 100,4
315,000 7.00%, 7/1/02 ............... 325,269
Illinois Health Facilities Revenue
Authority, Community Hospital of
Ottawa Project, RB,
420,000 6.75%, 8/15/14 .............. 426,052
Illinois Housing Development Authority,
Multi-Family Program, RB, Series 3,
HUD, Section 8,
350,000 6.05%, 9/1/10 ............... 356,853
Illinois Industrial Pollution Control,
Finance Revenue Authority,
Commonwealth Edison Company Project,
RB,
730,000 5.875%, 5/15/07 ............. 733,453
Illinois State, GO, FGIC,
500,000 5.125%, 3/1/11 .............. 507,380
Illinois State, Sales Tax Revenue, RB,
Series S,
625,000 5.00%, 6/15/08 .............. 636,463
Illinois Southwestern Development
Authority, Wood River Township
Hospital Project, RB, ETM,
95,000 6.875%, 8/1/03 .............. 98,276
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Illinois Upper River Valley Development
Authority, Waste Recovery Illinois
Project, RB, AMT,
$2,165,000 5.90%, 2/1/14 ...............$ 2,098,664
Lake County, Illinois, Community United
School District, GO, Series A, FSA,
1,345,000 5.375%, 12/1/12 ............. 1,371,564
Lake County, Illinois, Township High
School District Number 113, GO,
380,000 8.10%, 12/1/12 .............. 483,816
Oak Lawn, Illinois, GO, FGIC,
145,000 5.25%, 12/1/04 .............. 149,009
Palatine, Illinois, Tax Increment Revenue,
Dundee Road Redevelopment Project,
Tax Allocation, AMBAC,
9,030,000 5.00%, 1/1/15 ............... 8,730,385
Quincy, Illinois, Single Family Mortgage,
RB,
200,000 6.875%, 3/1/10 .............. 205,036
Rockford, Illinois, Faust Landmark
Apartments, RB, Series A, AMT, MBIA,
320,000 5.625%, 1/1/07 .............. 326,058
Rockford-Concord Commons, Illinois,
Housing Facility, Concord Commons
Project, RB, Series A, FHA:
330,000 5.55%, 11/1/06 .............. 335,379
1,385,000 6.15%, 11/1/22 .............. 1,401,551
Rosemont, Illinois, GO, Series B, FGIC,
250,000 6.75%, 2/1/08 ............... 256,275
Silvas, Illinois, Mortgage Revenue, RB,
FHA:
1,610,000 4.90%, 8/1/11 ............... 1,564,292
1,285,000 5.20%, 8/1/17 ............... 1,214,813
Woodridge, Illinois, Multi-Family
Revenue, Hawthorn Ridge Housing,
Series A, RB, GNMA,
1,510,000 5.65%, 12/20/32 ............. 1,445,312
-----------
44,377,505
-----------
INDIANA -- 3.26%
Columbus, Indiana, Multi-School Building
Corporation, First Mortgage, RB, AMBAC,
1,115,000 6.25%, 7/1/02 ............... 1,132,204
Fort Wayne, Indiana, Hospital Revenue
Authority, Parkview Memorial
Hospital, RB, ETM,
650,000 6.50%, 1/1/05 ............... 670,683
Gary, Indiana, Mortgage Redevelopment,
Willow On Clark Apartments, RB,
Series A, AMT, GNMA:
220,000 4.75%, 8/20/08 .............. 216,251
280,000 5.15%, 8/20/13 .............. 265,871
655,000 5.40%, 8/20/38 .............. 599,528
See Notes to Financial Statements.
--------------------------------------------------------------------------------
27
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Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Indiana Bond Bank Special Program
Waste Water Treatment, RB, Series C:
$ 95,000 5.20%, 8/1/07 ............... $ 96,016
220,000 5.30%, 8/1/08 ............... 223,192
190,000 5.40%, 8/1/09 ............... 193,564
Indiana Bond Bank, Indiana, Special
Programs, RB, Series C,
500,000 7.15%, 2/1/04 ............... 512,910
Indiana Health Facilities Finance
Authority, Kings Daughters Hospital,
RB, Asset Guaranty:
195,000 5.00%, 8/15/05 .............. 195,975
290,000 5.10%, 2/15/06 .............. 292,247
300,000 5.10%, 8/15/06 .............. 302,520
305,000 5.25%, 2/15/08 .............. 308,288
330,000 5.35%, 8/15/09 .............. 335,059
1,345,000 5.50%, 4/1/18 ............... 1,302,485
Indiana Health Facility Authority, Floyd
Memorial Hospital, RB,
505,000 4.85%, 2/15/06 .............. 487,067
Indiana State Health Facility, Floyd
Memorial Hospital, RB:
265,000 4.80%, 2/15/07 .............. 251,313
255,000 4.85%, 2/15/08 .............. 240,455
245,000 4.95%, 2/15/09 .............. 231,211
Indiana University Revenue, Indiana,
Student Fee, RB, Series H,
300,000 6.60%, 8/1/01 ............... 304,785
Indianapolis, Indiana, Economic
Development Authority, RB, AMT,
GNMA,
1,245,000 5.35%, 4/20/17 .............. 1,190,120
Indianapolis, Indiana, Industrial Economic
Development Authority, Knob in the
Woods Project, RB, Mandatory Put
@ 100, AMT, FNMA,2
2,510,000 6.375%, 12/1/04 ............. 2,634,973
Lawrence, Indiana, Multi-Family Housing,
Pinnacle Apartments Project, RB,
Mandatory Put @ 100, AMT, FNMA,2
1,615,000 5.15%, 1/1/08 ............... 1,586,447
Lawrence, Indiana, Multi-Family
Housing, Revenue Refunding, Pinnacle
Apartments, RB, AMT, FNMA,
325,000 5.05%, 1/1/08 ............... 319,423
Purdue University, Indiana, Student Fee,
RB, Series Q,
170,000 6.00%, 7/1/09 ............... 184,187
Purdue University, Indiana, Student Fee,
RB, Series N,
500,000 5.50%, 7/1/12 ............... 520,065
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
South Bend, Indiana, Community School
Building Corporation Refunding,
Edison, RB, AMBAC,
$2,510,000 5.125%, 1/15/11 .............$ 2,512,635
Vigo County, Indiana, Hospital Authority,
RB, ETM,
85,000 6.875%, 4/1/04 .............. 88,096
-----------
17,197,570
-----------
IOWA -- 0.32%
Dubuque, Iowa, Hospital Facilities,
Finley Hospital Project, RB, ETM,
450,000 6.875%, 1/1/12 .............. 470,470
Iowa Financial Authority, Small
Business, Terrace Center Association
LP Project, RB,
1,170,000 7.50%, 3/1/22 ............... 1,217,947
-----------
1,688,417
-----------
KANSAS -- 0.67%
Kansas State Development Finance
Authority, Multi-Family Housing,
Four Seasons Apartment Project,
RB, AMT, LOC,
230,000 5.30%, 10/1/07 .............. 226,594
Kansas State Development Finance
Authority, Multi-Family Housing,
Four Seasons Apartment Project, RB,
Mandatory Put @ 100, AMT, LOC,2
780,000 5.60%, 10/1/07 .............. 767,731
Labette & Cowley County, Kansas,
Single Family Mortgage, RB,
Series A-2, GNMA,
130,000 7.65%, 12/1/11 .............. 132,908
Manhattan, Kansas, Central Business
District Redevelopment, Tax
Allocation, Series A, Asset Guaranty,
375,000 5.20%, 12/1/03 .............. 379,185
McPherson, Kansas, Electric Utility
Revenue, RB, Pre-Refunded @ 100,
ETM,4
1,620,000 5.90%, 3/1/03 ............... 1,692,819
Merriam, Kansas, Hospital Revenue,
Shawnee Mission Medical Center,
RB, ETM,
100,000 6.90%, 6/1/05 ............... 104,546
Reno County, Kansas, Single Family
Mortgage, RB, Series B,
105,000 8.70%, 9/1/11 ............... 109,504
Saline County, Kansas, Residential
Housing Facilities, RB, Series A,
20,000 9.50%, 10/1/11 .............. 20,492
See Notes to Financial Statements.
--------------------------------------------------------------------------------
28
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Wichita, Kansas, Single Family
Mortgage, RB, Series A,
$ 85,000 7.10%, 9/1/09 ............... $ 86,874
-----------
3,520,653
-----------
KENTUCKY -- 0.62%
Ashland, Kentucky, Environmental Import,
Allied Chemical Corporation Project,
RB, ETM,
565,000 5.80%, 3/1/03 ............... 571,950
Greater Kentucky Housing Assistance
Corporation, Kentucky, Section 8, RB,
Series C, FHA / MBIA,
305,000 5.35%, 7/1/07 ............... 304,976
Kentucky Area Development Districts,
Trust Lease Revenue Program, City of
Ewing, RB, Standby LOC,
1,500,000 5.70%, 6/1/15 ............... 1,512,825
Kentucky State Turnpike Authority,
RB, ETM:
322,000 6.125%, 7/1/07 .............. 335,492
180,000 6.625%, 7/1/08 .............. 191,142
Lakeland, Kentucky, Wesley Village
Housing Incorporated, Section 8
Assisted Project, RB, FHA,
140,000 7.125%, 11/1/02 ............. 142,244
Owensboro, Kentucky, Electric Light
& Power, RB, ETM,
190,000 10.50%, 1/1/04 .............. 201,354
-----------
3,259,983
-----------
LOUISIANA -- 2.13%
Iberia, Louisiana, Single Family
Mortgage, RB,
350,000 7.375%, 1/1/11 .............. 364,868
Jefferson Parish, Louisiana, Hospital
Services District, RB, ETM,
140,000 7.125%, 1/1/02 .............. 142,439
Louisiana Housing Finance Agency, Malta
Square Project, RB, AMT, GNMA:
470,000 6.45%, 9/1/27 ............... 486,901
1,220,000 6.50%, 9/1/38 ............... 1,263,774
Louisiana Housing Finance Agency,
Single Family Mortgage Revenue,
RB, GNMA / FNMA,
250,000 4.625%, 6/1/09 .............. 247,600
Louisiana Public Facilities Authority,
Multi-Family Housing, Edgewood
Apartments, RB, Mandatory
Put @ 100, FNMA,2
3,950,000 5.80%, 6/1/05 ............... 4,017,348
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Louisiana Public Facilities Authority,
Multi-Family Housing, Oakleigh
Apartments Project, RB, AXA:
$ 225,000 5.75%, 3/15/03 .............. $ 227,264
235,000 5.85%, 3/15/04 .............. 236,767
250,000 5.95%, 3/15/05 .............. 251,250
Louisiana Public Facilities Authority,
Public Health & Education, RB,
Series A-1, Mandatory Put @ 100,
AMBAC,2
635,000 5.00%, 6/1/02 ............... 637,559
Louisiana Public Facility Authority,
Multi-Family Housing, Beau Terre
Project, RB, Mandatory Put @ 100,
FNMA,2
560,000 5.80%, 6/1/05 ............... 570,830
Louisiana Public Facility Authority,
Single Family Mortgage, RB, Series A,
250,000 7.375%, 10/1/12 ............. 256,053
Louisiana Public Facility Authority, Single
Family Mortgage, RB, Series C,
209,525 8.45%, 12/1/12 .............. 213,077
Louisiana State Health Education
Authority, Lease Rent Revenue, Tulane
University Medical Center, RB, ETM,
85,000 7.875%, 7/1/09 .............. 94,320
Tensas Parish, Louisiana, LA Law
Enforcement District, COP,
Pre-Refunded @ 102,4
2,000,000 7.00%, 9/1/08 ............... 2,235,180
-----------
11,245,230
-----------
MAINE -- 0.15%
Bucksport, Maine, Solid Waste Disposal
Revenue, Champ International
Corporation Project, RB,
100,000 6.25%, 5/1/10 ............... 101,376
Maine Finance Revenue Authority,
Electronic Rate Stabilization, RB,
AMT, FSA,
170,000 5.20%, 7/1/18 ............... 158,095
Maine Municipal Bond Bank, RB,
Series B, MBIA,
500,000 5.375%, 11/1/05 ............. 518,490
-----------
777,961
-----------
MARYLAND -- 0.49%
Baltimore County, Maryland, Mortgage
Revenue, Three Garden Village
Project, RB, Series A, FHLMC,
450,000 4.80%, 1/1/13 ............... 421,155
See Notes to Financial Statements.
--------------------------------------------------------------------------------
29
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Baltimore, Maryland, City Housing
Corporate Revenue, RB, HUD,
Section 8,
$ 345,000 7.75%, 10/1/09 .............. $ 345,918
Cecil County, Maryland, Economic
Development Authority, Northeast
Plaza Association, Series A,
1,280,000 6.875%, 1/15/08 ............. 1,293,939
Cecil County, Maryland, Economic
Development Authority, Northeast
Plaza Association, Series B,
385,000 6.875%, 1/15/10 ............. 386,829
Frederick County, Maryland, Economic
Redevelopment Authority,
Northhampton, RB, Series A, FHA,
155,000 5.90%, 2/1/05 ............... 160,747
-----------
2,608,588
-----------
MASSACHUSETTS -- 3.31%
Boston, Massachusetts, Deutsches
Altenheim, RB, Series A, FHA,
570,000 5.95%, 10/1/18 .............. 577,974
Boston, Massachusetts, Industrial
Development Finance Authority, North
End Community, RB, Series A, FHA,
1,465,000 6.45%, 8/1/37 ............... 1,524,611
Dartmouth, Massachusetts, Housing
Development Corporation, Crossroads
Apartments, RB, Series A, MBIA / FHA,
450,000 4.85%, 7/1/09 ............... 438,480
Massachusetts Educational Loan
Authority, RB, Series A, AMT, MBIA,
375,000 7.25%, 1/1/09 ............... 383,693
Massachusetts State, Development
Finance Agency, Human Services
Provider, Seven Hills Foundation &
Affiliate, RB, Asset Guaranty,
310,000 4.85%, 9/1/13 ............... 292,749
Massachusetts State, Industrial
Finance Agency, Assisted Living
Facilities, Arbors at Taunton, RB,
AMT, GNMA,
410,000 5.30%, 6/20/19 .............. 383,965
Massachusetts State, Industrial
Finance Agency, Museum Revenue,
Norman Rockwell Stockbridge,
RB, GNMA,
2,555,000 8.125%, 7/1/11 .............. 2,637,194
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Massachusetts State Development
Finance Agency, Worchester
Redevelopment Authority, RB,
Asset Guaranty,
$1,050,000 6.00%, 6/1/24 ...............$ 1,080,198
Massachusetts State Health &
Education Authority, Beth Israel
Hospital, RB, ETM,
60,000 5.75%, 7/1/06 ............... 61,581
Massachusetts State Housing Finance
Agency, RB, Series A, AMT, MBIA,
175,000 6.125%, 12/1/11 ............. 181,358
Massachusetts State Housing Finance
Agency, Housing Revenue, RB,
Series D, AMT, AMBAC,
1,360,000 5.50%, 7/1/13 ............... 1,358,654
Massachusetts State Industrial Finance
Agency, Draper Place Project, RB,
AMT, GNMA:
310,000 5.40%, 8/20/12 .............. 311,318
5,490,000 6.45%, 8/20/39 .............. 5,705,483
Massachusetts State Industrial Finance
Agency, Higher Education, Hampshire
College Project, RB,
1,655,000 5.80%, 10/1/17 .............. 1,567,897
Massachusetts State, GO, Series B,
MBIA
1,000,000 5.00%, 5/1/17 ............... 956,250
-----------
17,461,405
-----------
MICHIGAN -- 1.11%
Avondale, Michigan, School District, GO,
135,000 5.80%, 5/1/07 ............... 139,705
Battle Creek, Michigan, Economic
Development Authority, Kellogg
Company Project, RB,
315,000 5.125%, 2/1/09 .............. 319,908
Detroit, Michigan, Water Supply, RB,
ETM,
495,000 8.875%, 1/1/05 .............. 537,956
Dickinson County, Michigan, Economic
Development Authority, Champion
International Corporation, RB,
560,000 6.55%, 3/1/07 ............... 571,446
Grand Rapids Charter Township, Michigan,
Porter Hills Obligated Group, RB,
890,000 5.20%, 7/1/14 ............... 841,771
Kalamazoo, Michigan, Economic
Development Corporation, Revenue
Refunding, RB,
100,000 5.75%, 5/15/05 .............. 99,333
See Notes to Financial Statements.
--------------------------------------------------------------------------------
30
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Michigan State Building Authority, RB,
Series II, ETM, MBIA,
$ 60,000 7.40%, 4/1/01 ............... $ 60,511
Michigan State Building Revenue
Authority, RB, Series I, AMBAC,
500,000 6.00%, 10/1/02 .............. 514,160
Michigan State Hospital Finance
Authority, Saint Joseph Mercy
Hospital Project, RB, ETM,
315,000 7.00%, 7/1/05 ............... 331,997
Michigan State Hospital Finance
Authority, William Beaumont Hospital
Project, RB, ETM,
155,000 6.20%, 1/1/03 ............... 157,492
Michigan State Housing Development
Authority, RB, Series D, AMT,
AMBAC:
95,000 5.05%, 12/1/07 .............. 95,603
95,000 5.15%, 12/1/08 .............. 95,896
95,000 5.25%, 12/1/09 .............. 95,268
95,000 5.35%, 12/1/10 .............. 97,093
Michigan State Strategic Fund Obligation,
The Oxford Institute, RB, Series A, ETM,
245,000 7.875%, 8/15/05 ............. 262,155
Michigan State Hospital Finance Revenue
Authority, Ascension Health Credit,
RB, Series B, Mandatory Put @ 100,2
500,000 5.05%, 11/15/04 ............. 497,645
Michigan State Housing Development
Authority, RB, Series B,
200,000 6.30%, 12/1/03 .............. 205,638
Petoskey, Michigan, Hospital Finance
Authority, RB, ETM,
610,000 6.70%, 3/1/07 ............... 639,670
Saginaw, Michigan, Hospital Finance
Authority, Saint Luke Hospital, RB,
ETM,
240,000 7.50%, 11/1/10 .............. 268,466
-----------
5,831,713
-----------
MINNESOTA -- 1.21%
Cambridge, Minnesota, Mortgage
Revenue, Health Care Center, RB,
Series A, GNMA.,
330,000 5.40%, 11/20/05 ............. 333,940
Dakota County, Minnesota, Housing &
Redevelopment Authority, RB, AMT,
FNMA / GNMA:
90,000 5.55%, 10/1/02 .............. 91,297
120,000 5.75%, 10/1/04 .............. 123,762
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Minnesota White Earth Band of
Chippewa Indians Revenue, RB,
Series A, ACA,
$2,000,000 7.00%, 12/1/11 ..............$ 2,039,980
Monticello, Minnesota, Pollution Control
Authority, Northern States Power
Company, RB,
305,000 5.375%, 2/1/03 .............. 305,583
Rochester, Minnesota, Saint Mary's
Hospital, RB, ETM,
365,000 5.75%, 10/1/07 .............. 375,917
Sartell, Minnesota, Pollution Control
Revenue, RB,
3,000,000 6.95%, 10/1/12 .............. 3,123,060
-----------
6,393,539
-----------
MISSISSIPPI-- 2.18%
Corinth & Alcorn County, Mississippi,
Magnolia Regional Health Center, RB,
Series A,
1,725,000 5.00%, 10/1/08 .............. 1,610,650
Corinth & Alcorn County, Mississippi,
Magnolia Regional Health Center,
RB, Series B,
785,000 5.125%, 10/1/10 ............. 718,236
Jackson, Mississippi, Housing Authority,
Multi-Family Revenue, Elton Park
Apartments, RB, Series B, Mandatory
Put @100, AMT, QBE,2
1,080,000 5.40%, 4/1/19 ............... 994,745
Jackson, Mississippi, Housing Authority,
Multi-Family Revenue, The
Woodlands, RB, Series A, AMT, FSA,
490,000 5.30%, 4/1/19 ............... 458,787
Mississippi Business Finance
Corporation, Landau Uniforms Project,
RB, AMT, LOC:
215,000 5.45%, 9/1/01 ............... 215,572
225,000 5.60%, 9/1/02 ............... 226,537
260,000 5.80%, 9/1/04 ............... 262,551
265,000 5.90%, 9/1/05 ............... 267,594
Mississippi Business Financial
Corporation, Mississippi Retirement
Facilities Revenue Refunding,
Aldersgate Community, RB, GNMA,
1,160,000 5.45%, 5/20/34 .............. 1,071,701
Mississippi Business Financial
Corporation, Mississippi Retirement
Facilities Revenue Refunding,
Wesley Manor, RB, Series A, GNMA,
1,455,000 5.45%, 5/20/34 .............. 1,344,245
See Notes to Financial Statements.
--------------------------------------------------------------------------------
31
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Mississippi Home Corporation, Single
Family Mortgage, Access Program,
RB, Series A, AMT, GNMA,
$ 135,000 5.00%, 6/1/04 ............... $ 135,477
Mississippi Home Corporation, Single
Family Mortgage, RB, Series A,
GNMA,
425,000 5.125%, 12/1/17 ............. 423,164
Mississippi Home Corporation, Single
Family Mortgage, RB, Series I, AMT,
GNMA,
2,255,000 7.375%, 6/1/28 .............. 2,417,631
Perry County, Mississippi, Pollution
Control Revenue, Leaf River Forest
Project, RB,
1,475,000 5.20%, 10/1/12 .............. 1,358,947
-----------
11,505,837
-----------
MISSOURI -- 2.86%
Boone County, Missouri, Industrial
Development Authority, Otscon
Incorporated Project, RB, Mandatory
Put @100, AMT, LOC,2
1,780,000 5.125%, 5/1/05 .............. 1,733,008
Bridgeton, Missouri, Industrial
Development Authority, Mizpah
Assisted Living, RB, GNMA,
170,000 5.25%, 12/20/19 ............. 158,892
Joplin, Missouri, Industrial Development,
Tri State Osteopathic Hospital,
Pre-Refunded @ 102,4
6,040,000 8.25%, 12/15/01 ............. 6,369,663
Kansas City, Missouri, Industrial
Development Authority, Industrial
Development Revenue, RB,
Pre-Refunded @ 100,4
800,000 5.50%, 11/15/01 ............. 809,192
Missouri State Development Financial
Board, Recreation Facilities Revenue,
YMCA, Greater St. Louis, RB,
Series A, LOC,
170,000 4.75%, 9/1/07 ............... 169,480
Missouri State Developmet Finance
Board, Greater St. Louis Project, RB,
LOC,
685,000 4.90%, 9/1/10 ............... 680,842
Missouri State Housing Development
Community, Single Family Mortgage,
RB, AMT, GNMA,
250,000 6.625%, 12/1/17 ............. 254,875
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Pacific & Franklin Counties,
Missouri, Industrial Development
Authority, Clayton Corporation
Project, RB, AMT, LOC:
$ 360,000 5.45%, 5/1/02 ............... $ 362,675
720,000 5.95%, 5/1/07 ............... 741,067
720,000 6.20%, 5/1/12 ............... 735,804
720,000 6.45%, 5/1/17 ............... 735,674
St. Louis County, Missouri, Regional
Convention & Sports Center RB,
Series B,
585,000 6.50%, 8/15/01 .............. 592,453
St. Charles County, Missouri, Industrial
Development Authority, Health Care
Facilities Revenue, Garden View Care
Center Project, RB, AMT, LOC,
1,480,000 5.40%, 11/15/16 ............. 1,273,022
St. Louis, Missouri, Land Clearance
Redevelopment Authority,
Westminsters Place Apartments, RB,
Series A, Mandatory Put @ 100,
FNMA,2
450,000 5.95%, 4/1/07 ............... 467,694
-----------
15,084,341
-----------
MONTANA -- 0.07%
Missoula County, Montana, Community
Hospital, ETM,
358,000 7.125%, 6/1/07 .............. 383,715
-----------
NEBRASKA -- 1.45%
American Public Energy Agency, Nebraska,
Gas Supply Revenue, Public Gas
Agency Project, RB, Series C, AMBAC,
1,400,000 4.30%, 3/1/11 ............... 1,232,392
Clay County, Nebraska, Industrial
Development Revenue, Hybrids
Cooperative Project, RB, AMT LOC,
1,610,000 5.25%, 3/15/14 .............. 1,504,126
Fillmore County, Nebraska,
Industrial Development Revenue,
O'Malley Grain Incorporated
Project, RB, AMT, LOC:
45,000 5.00%, 12/1/10 .............. 42,939
180,000 5.00%, 12/1/11 .............. 169,601
135,000 5.10%, 12/1/12 .............. 126,888
195,000 5.20%, 12/1/13 .............. 182,902
Nebraska Investment Finance Authority,
Multi-Family Housing, Cheney
Apartments, RB, Series A, Mandatory
Put @ 100, FNMA,2
1,510,000 5.50%, 12/1/05 .............. 1,529,268
See Notes to Financial Statements.
--------------------------------------------------------------------------------
32
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Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Nebraska Investment Finance Authority,
Multi-Family Housing, Tara Hills Villa,
RB, FNMA,
$ 525,000 4.875%, 1/1/08 .............. $ 516,096
Nebhelp Incorporated, Nebraska,
Student Loan Revenue Program-B,
RB, AMT, MBIA,
310,000 5.25%, 6/1/02 ............... 312,089
Nebraska Public Power District
Revenue, Power Supply Systems, RB,
Pre-Refunded @ 102,4
300,000 5.70%, 1/1/03 ............... 312,909
Omaha, Nebraska, Public Power District,
Electricity Revenue, RB, ETM,
1,045,000 5.75%, 2/1/03 ............... 1,060,905
Woolworth, Nebraska, Housing
Mortgage Development Corporation,
Section 8 Assisted Project, RB, MBIA,
690,000 5.35%, 7/1/21 ............... 637,222
-----------
7,627,337
-----------
NEVADA -- 1.23%
Clark County, Nevada, Highway
Improvement Revenue, Motor Vehicle
Fuel Tax, RB, AMBAC,
500,000 5.70%, 7/1/03 ............... 515,010
Humboldt County, Nevada, Pollution
Control Revenue, Idaho Power
Company Project, RB,
810,000 8.30%, 12/1/14 .............. 901,870
Nevada Housing Division, Multi-Unit
Housing, Campaige, RB, Series A,
AMT, LOC,
550,000 5.45%, 10/1/18 .............. 499,637
Nevada Housing Division, Single Family
Mortgage, RB, Series B-1,
460,000 4.95%, 4/1/12 ............... 439,489
Nevada Housing Division, Single Family
Program, RB, Series A, AMT,
505,000 6.35%, 10/1/07 .............. 515,423
Nevada Multi-Unit Housing, Saratoga
Palms, RB, AMT, FNMA,
405,000 5.90%, 4/1/06 ............... 419,953
Nevada Housing Division, Multi-Unit
Housing, RB, Series A, AMT, LOC,
1,520,000 5.55%, 10/1/28 .............. 1,369,155
Nevada Housing Division, Single Family
Program, RB, Series B-1,
430,000 6.20%, 10/1/15 .............. 441,563
Nevada State Housing Division, Austin
Crest Project, RB, AMT, FNMA,
360,000 5.50%, 10/1/09 .............. 360,986
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Nevada State Housing Division, Single
Family Mortgage, RB, Series B, AMT,
$ 400,000 6.45%, 10/1/07 .............. $ 409,936
Nevada State Housing Division, Single
Family Mortgage, RB, Series C-1, AMT,
320,000 5.45%, 4/1/10 ............... 313,987
Nevada State Housing Division, Single
Family Mortgage, RB, Series E, AMT,
310,000 6.00%, 10/1/09 .............. 313,695
-----------
6,500,704
-----------
NEW HAMPSHIRE -- 1.13%
Manchester, New Hampshire, Housing &
Redevelopment Revenue Authority,
RB, ACA,
3,580,000 6.05%, 1/1/12 ............... 3,664,237
New Hampshire Higher Education &
Health Authority, River College:
125,000 4.65%, 1/1/04 ............... 122,723
130,000 4.75%, 1/1/05 ............... 127,065
130,000 4.85%, 1/1/07 ............... 125,226
145,000 4.90%, 1/1/08 ............... 138,998
New Hampshire Higher Education &
Health Facility, Kendal at Hanover
Issue, RB, LOC:
625,000 5.20%, 10/1/06 .............. 626,869
475,000 5.30%, 10/1/07 .............. 476,539
New Hampshire Higher Educational &
Health Authority, Franklin Pierce
College, RB, ACA:
120,000 4.90%, 10/1/08 .............. 117,576
375,000 5.00%, 10/1/09 .............. 368,374
New Hampshire Higher Educational
& Health Facilities Authority
Revenue, Rivier College, RB,
185,000 5.55%, 1/1/18 ............... 170,990
-----------
5,938,597
-----------
NEW JERSEY -- 0.91%
Gloucester County, New Jersey,
Import Authority, Electric
Mobility Project, RB, AMT, County
Guaranteed:
145,000 4.25%, 11/1/01 .............. 144,352
155,000 4.50%, 11/1/03 .............. 154,056
105,000 4.60%, 11/1/04 .............. 104,357
105,000 4.70%, 11/1/05 .............. 104,492
110,000 4.75%, 11/1/06 .............. 109,376
115,000 4.80%, 11/1/07 .............. 114,325
125,000 5.00%, 11/1/08 .............. 125,409
215,000 5.00%, 11/1/10 .............. 214,164
See Notes to Financial Statements.
--------------------------------------------------------------------------------
33
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
New Jersey Church Street Corporation,
Keansburg Elderly Housing, Series 1994,
HUD Section 8 Assistance,
$ 55,000 5.00%, 3/1/01 ............... $ 55,009
New Jersey Economic Development
Authority Revenue Adjusted,
Reformed Church, RB, Series B,
125,000 4.95%, 12/1/28 .............. 121,984
New Jersey Economic Development
Authority Revenue, RB, Series B,
AMT, LOC,
175,000 5.30%, 12/1/07 .............. 178,423
New Jersey Economic Development
Authority, Cadbury Corporation
Project, RB, Series A, ACA:
160,000 4.60%, 7/1/02 ............... 159,029
230,000 4.75%, 7/1/03 ............... 228,397
265,000 4.85%, 7/1/04 ............... 262,967
New Jersey Economic Development
Authority, RB, Series H-2, AMT, LOC,
330,000 5.00%, 10/1/05 .............. 331,937
New Jersey State Building Authority,
RB, ETM,
320,000 9.625%, 2/1/03 .............. 338,586
New Jersey State Education Facility
Authority, Caldwell College, RB,
Series A,
875,000 7.25%, 7/1/25 ............... 916,186
New Jersey State Turnpike Authority, RB,
Series C, ETM,
1,085,000 5.20%, 1/1/08 ............... 1,096,610
Secaucus Municipal Utilities Authority,
New Jersey, Sewer Revenue, RB, ETM,
55,000 6.875%, 12/1/08 ............. 58,947
-----------
4,818,606
-----------
NEW MEXICO-- 0.66%
Albuquerque, New Mexico, Class B-2,
CMO, FGIC A,
3,795,000 0.00%, 5/15/11 .............. 1,791,430
Bernalillo County, New Mexico,
Multi-Family Housing, Sunchase
Apartments, Series A, Mandatory
Put @ 100, AXA,2
1,130,000 5.80%, 11/1/06 .............. 1,148,905
New Mexico Mortgage Finance
Authority, Single Family Mortgage
Program, RB, FHLMC / FNMA / GNMA:
170,000 5.50%, 7/1/17 ............... 166,359
365,000 5.60%, 7/1/28 ............... 350,123
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Santa Fe, New Mexico, Single Family
Mortgage, RB,
$ 43,296 8.45%, 12/1/11 .............. $ 44,910
-----------
3,501,727
-----------
NEW YORK-- 6.13%
Albany, New York, Housing Authority,
Lark Drive Associates, RB, AMT, LOC:
40,000 5.20%, 12/1/13 .............. 37,854
40,000 5.40%, 12/1/18 .............. 37,413
265,000 5.50%, 12/1/28 .............. 247,780
Amherst, New York, Industrial
Development Agency, Multi Service
Rink Complex, RB, ETM, LOC:
155,000 4.75%, 10/1/02 .............. 156,039
265,000 5.18%, 10/1/06 .............. 272,319
Cattaraugus County, New York, Industrial
Development Agency, Jamestown
Community College, RB, Series A,
350,000 5.75%, 7/1/08 ............... 358,460
Dutchess County, New York, Solid Waste
Systems, RB, Series C, AMT, MBIA,
2,255,000 5.00%, 1/1/10 ............... 2,245,010
Erie County, New York, Tobacco Asset
Securitization, RB, Class A:
1,025,000 5.50%, 7/15/12 .............. 1,014,463
500,000 6.00%, 7/15/20 .............. 495,955
New York Capital District Youth Center
Lease, RB, LOC,
375,000 6.00%, 2/1/17 ............... 383,273
New York Metropolitan Transportation
Authority, New York Commuter Facility
Revenue, Service Contract, RB, Series R,
245,000 5.30%, 7/1/09 ............... 249,927
New York Municipal Assistance
Corporation for New York City, RB,
Series N,
450,000 5.25%, 7/1/07 ............... 466,601
New York City, New York, Industrial
Development Agency, College of
Aeronautics Project:
345,000 5.00%, 5/1/06 ............... 340,763
205,000 5.20%, 5/1/09 ............... 202,097
New York City, New York, Housing
Development Corporation, Multi-Family
Housing, RB, Series B, FHA,
2,000,000 5.70%, 11/1/13 .............. 2,022,100
New York City, New York, GO, Series E,
FGIC,
700,000 6.00%, 8/1/07 ............... 755,832
See Notes to Financial Statements.
--------------------------------------------------------------------------------
34
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
New York State Dormitory Authority,
Capital Appreciation, Pre-Refunded City,
RB, Series C, ETM, FSA,1
$ 105,000 0.00%, 7/1/04 ............... $ 86,298
New York State Dormitory Authority,
Hunts Point Multi Service Center, RB,
2,255,000 5.625%, 7/1/22 .............. 2,228,391
New York State Dormitory Authority,
Lease Revenue, State University
Dormitory Facilities, RB, Series A,
AMBAC,
265,000 5.25%, 7/1/12 ............... 270,846
New York State Dormitory Authority,
Lutheran Nursing Home, RB,
AMBAC / FHA,
1,000,000 5.125%, 2/1/18 .............. 968,090
New York State Dormitory Authority,
Saint Mary's Hospital Amsterdam,
RB, MBIA,
1,010,000 5.25%, 5/1/05 ............... 1,037,240
New York State Dormitory Revenue
Authority, New York University, RB,
Series A, ETM, MBIA,
500,000 6.00%, 7/1/06 ............... 536,335
New York State Dormitory Revenue
Authority, State University Education
Facilities, RB,
300,000 5.00%, 5/15/10 .............. 301,236
New York State Dormitory Revenue
Authority, Cons City University
Systems, RB, FGIC,
500,000 5.75%, 7/1/13 ............... 536,295
New York State Power Authority, RB,
Series C, ETM,
5,000 9.50%, 1/1/01 ............... 5,043
New York State Urban Development
Corporation, Correctional Facility, RB,
AMBAC,
3,835,000 5.625%, 1/1/07 .............. 3,974,901
New York State, GO, Series F,
400,000 5.25%, 9/15/09 .............. 413,440
New York State Mortgage Agency
Revenue, Homeowner Mortgage, RB,
Series 91,
755,000 5.40%, 10/1/08 .............. 783,909
New York State Environmental Facility
Corporation, Pollution Control Revenue,
New York City Municipal Water, RB,
500,000 5.75%, 6/15/10 .............. 537,030
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
New York State Local Assistance
Corporation, RB, Series E,
$ 500,000 5.25%, 4/1/16 ............... $ 502,080
New York Triborough Bridge & Tunnel
Authority, Convention Center Project,
RB, Series E,
355,000 7.25%, 1/1/10 ............... 399,215
Oneida County, New York, Industrial
Development Agency, RB, LOC,
600,000 5.00%, 3/1/14 ............... 576,252
Oneida County, New York, Industrial
Development Agency, Mohawk Valley,
RB, Series A, FSA:
635,000 4.55%, 2/1/04 ............... 635,908
540,000 4.65%, 2/1/05 ............... 542,030
685,000 4.70%, 2/1/06 ............... 688,117
765,000 5.00%, 1/1/13 ............... 753,311
755,000 5.20%, 2/1/13 ............... 759,122
Oneida County, New York, Industrial
Development Agency, Mohawk Valley,
RB, Series B, FSA,
1,230,000 5.00%, 1/1/13 ............... 1,211,206
Onondaga County, New York,
Industrial Development Agency,
Civic Facility Revenue, Lemoyne
College Project, RB, Series A:
180,000 5.00%, 3/1/07 ............... 175,322
410,000 5.50%, 3/1/14 ............... 399,024
Syracuse, New York, Housing Authority,
Loretto Rest Homes, RB, Series A, FHA,
1,805,000 5.00%, 8/1/07 ............... 1,831,714
Syracuse, New York, Industrial
Development Agency, Pilot Revenue,
RB,
1,345,000 5.125%, 10/15/02 ............ 1,351,981
UFA Development Corporation, New York,
Loretto Utica Project, RB, FHA,
525,000 5.15%, 7/1/03 ............... 525,966
Ulster County, New York, Industrial
Development Agency, Kingston
Hospital Project, RB, LOC:
230,000 4.40%, 11/15/01 ............. 228,954
245,000 4.50%, 11/15/02 ............. 242,927
Yates County, New York, Industrial
Development Agency, Soldiers &
Sailors Memorial Hospital, RB, FHA,
560,000 5.50%, 2/1/19 ............... 552,966
-----------
32,341,035
-----------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
35
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
NORTH CAROLINA -- 0.04%
Wake County, North Carolina, Hospital
Revenue, RB, ETM,
$ 220,000 6.25%, 1/1/08 ............... $ 230,201
-----------
NORTH DAKOTA -- 0.09%
North Dakota State Housing Financial
Agency Revenue, Housing Finance
Program, RB, Series D, AMT:
110,000 4.55%, 7/1/08 ............... 106,832
130,000 4.85%, 7/1/11 ............... 125,867
130,000 4.95%, 1/1/12 ............... 125,831
125,000 5.00%, 1/1/13 ............... 120,035
-----------
478,565
-----------
OHIO -- 2.85%
Cuyahoga County, Ohio, Mortgage
Revenue, RB, AMT, GNMA,
205,000 5.20%, 9/20/09 .............. 206,904
Cuyahoga County, Ohio, Multi-Family
Housing, Water Street Association,
RB, AMT, GNMA,
975,000 6.25%, 12/20/36 ............. 990,239
Franklin County, Ohio, Housing Revenue,
Rosewind Limited Partnership,
AMT, RB,
175,000 4.90%, 1/1/02 ............... 175,047
Hancock County, Ohio, Multi-Family
Housing, Crystal Glen Apartments,
RB, Series C, AMT, LOC,
915,000 5.05%, 1/1/10 ............... 881,767
Jefferson County, Ohio, GO, Asset
Guaranty,
240,000 6.625%, 12/1/05 ............. 251,966
Lorain County, Ohio, Health Care
Facilities, Kendal at Oberlin, RB,
Series B, Optional Put @ 100,2
1,175,000 4.75%, 2/1/02 ............... 1,153,051
Lorain County, Ohio, Hospital Finance
Authority, Humility of Mary Health
Care, RB, Series A,
Pre-Refunded @ 100,4
4,520,000 5.90%, 6/15/05 .............. 4,752,644
Lorain County, Ohio, Hospital Finance
Authority, Humility of Mary Health
Care, RB, Series B, ETM,
755,000 7.20%, 12/15/11 ............. 792,312
Lorain County, Ohio, Hospital Finance
Authority, Humility of Mary Health
Care, RB, Series D, ETM,
825,000 7.125%, 12/15/06 ............ 865,103
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Ohio Capital Corporation for Housing
Mortgage Revenue, Section 8 Assisted
Project, RB, Series A, FHA / MBIA,
$ 100,000 4.50%, 1/1/03 ............... $ 99,141
Ohio Capital Corporation for Housing
Mortgage Revenue, Section 8 Assisted
Project, RB, Series C, FHA / MBIA,
1,395,000 5.10%, 7/1/09 ............... 1,385,263
Ohio Capital Corporation for Housing
Mortgage Revenue, Section 8 Assisted
Project, RB, Series E, FHA / MBIA,
230,000 5.70%, 1/1/05 ............... 234,154
Ohio Capital Housing Corporation
Mortgage, Georgetown Section 8,
RB, Series A, FHA,
910,000 6.625%, 7/1/22 .............. 937,700
Ohio Lucas-Palmer Housing Development
Corporation, Palmer Gardens, RB,
Series A, MBIA / FHA,
225,000 5.90%, 7/1/07 ............... 231,462
Ohio State Pollution Control RB,
General Motors Corporation Project,
185,000 6.50%, 3/1/06 ............... 186,961
Ohio State Water Development
Authority, Pollution Control Facilities
Revenue, Republic Steel Project,
RB, ETM,
80,000 6.375%, 6/1/07 .............. 83,697
Sandusky County, Ohio, Health Care
Facilities Revenue, Bethany Place
Retirement Center Project, RB, FNMA,
85,000 5.15%, 7/1/09 ............... 85,704
Stark County, Ohio, Health Care Facility,
Rose Land Incorporated Project, RB,
GNMA / FHA:
850,000 5.30%, 7/20/18 .............. 808,308
940,000 5.35%, 7/20/23 .............. 883,045
-----------
15,004,468
-----------
OKLAHOMA -- 1.18%
Cleveland County, Oklahoma, Home
Loan Authority, Single Family
Mortgage, Series 1992,
800,000 8.375%, 8/1/12 .............. 824,032
Grand River, Oklahoma, Dam Authority,
RB, ETM,
1,935,000 6.25%, 11/1/08 .............. 2,002,299
McAlester, Oklahoma, Public Works
Authority, RB, ETM, FSA:
115,000 8.25%, 12/1/04 .............. 130,778
560,000 8.25%, 12/1/05 .............. 652,506
145,000 8.25%, 12/1/06 .............. 172,714
See Notes to Financial Statements.
--------------------------------------------------------------------------------
36
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Oklahoma Housing Finance Agency,
Multi-Family Housing, Northpark &
Meadowlane Project, RB, FNMA,
$ 280,000 5.10%, 12/1/07 .............. $ 277,040
Oklahoma Ordnance Works Authority,
Ralston Purina Project, RB,
1,500,000 6.30%, 9/1/15 ............... 1,521,105
Payne County, Oklahoma, Home Finance
Authority, Single Family Mortgage,
RB, Series A,
320,000 8.625%, 3/1/11 .............. 331,888
Tulsa, Oklahoma, Municipal Airport
Travel Revenue, RB, AMT,
280,000 7.60%, 12/1/30 .............. 287,512
-----------
6,199,874
-----------
OREGON -- 0.22%
Cow Creek Band, Oregon, Umpqua
Tribe of Indians, Oregon Revenue,
RB, Series B, 144A, AMBAC,
880,000 5.10%, 7/1/12 ............... 874,588
Oregon State Economic Development
Communication, Economic &
Industrial Development Revenue,
Globe-Union, RB,
160,000 6.25%, 4/1/03 ............... 159,339
Oregon State Health Housing
Educational & Cultural Facilities
Authority, Cedarwest Housing, RB,
Series A, AMT, LOC,
135,000 4.65%, 1/2/08 ............... 129,813
-----------
1,163,740
-----------
PENNSYLVANIA-- 15.71%
Aliquippa Beaver County, Pennsylvania,
Asset Guaranty, GO, Partially ETM,
195,000 8.25%, 9/15/01 .............. 200,910
Allegheny County, Pennsylvania, Airport
Revenue, Greater Pittsburgh
International Airport, RB, Partially
Pre-Refunded @ 102 on 1/1/02, FSA,4
2,000,000 6.625%, 1/1/22 .............. 2,065,660
Allegheny County, Pennsylvania, Hospital
Development Authority, Allegheny
General Hospital Project, RB,
Series A, MBIA,
2,820,000 6.20%, 9/1/15 ............... 3,069,739
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Allegheny County, Pennsylvania,
Hospital Development Authority,
Health Center -- UPMC Health
Systems, RB, MBIA:
$1,690,000 4.65%, 11/1/09 $ 1,628,332
1,420,000 5.00%, 11/1/23 .............. 1,275,558
Allegheny County, Pennsylvania, Hospital
Development Authority, North Hills
Passavant Hospital, RB, ETM,
210,000 6.75%, 7/1/05 ............... 220,485
Allegheny County, Pennsylvania,
Industrial Development Authority,
HVL Plaza Project, RB, AMT, LOC,
700,000 6.00%, 10/1/04 .............. 693,028
Allegheny County, Pennsylvania,
Industrial Development Authority,
RB, Series A,
1,320,000 6.70%, 12/1/20 .............. 1,329,042
Allegheny County, Pennsylvania,
Residential Finance Authority, Single
Family Mortgage, RB, GNMA,
185,000 6.50%, 11/1/14 .............. 186,304
Allegheny County, Pennsylvania,
Residential Finance Authority, Single
Family Mortgage, RB, Series CC-1,
GNMA,
570,000 5.20%, 5/1/17 ............... 545,416
Allegheny County, Pennsylvania,
Residential Finance Authority, Single
Family Mortgage, RB, Series CC-2,
GNMA,
280,000 5.20%, 5/1/17 ............... 267,924
Allentown, Pennsylvania, Hospital
Authority, Sacred Heart Hospital of
Allentown, RB,
325,000 6.20%, 11/15/03 ............. 328,952
Beaver County, Pennsylvania, Industrial
Development Authority, Health Care
Revenue Refunding, RB, GNMA,
2,410,000 4.85%, 5/20/10 .............. 2,409,952
Berks County, Pennsylvania, Municipal
Authority, Health Care Pooled
Financing Project, RB,
1,200,000 5.00%, 3/1/28 ............... 1,023,684
Berks County, Pennsylvania,
Redevelopment Authority, Multi-Family
Revenue, Woodgate Associate Project,
RB, Series A, FNMA,
1,610,000 5.15%, 1/1/19 ............... 1,486,497
Bucks County, Pennsylvania, Saint Mary's
Hospital Authority, RB, ETM,
70,000 6.625%, 7/1/04 .............. 72,688
See Notes to Financial Statements.
--------------------------------------------------------------------------------
37
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Chester County, Pennsylvania, Health &
Education Facility, Immaculata College,
RB:
$ 170,000 4.65%, 10/15/01 ............. $ 169,432
230,000 4.75%, 10/15/02 ............. 228,429
215,000 4.85%, 10/15/03 ............. 213,231
270,000 4.90%, 10/15/04 ............. 267,206
265,000 5.00%, 10/15/06 ............. 260,182
310,000 5.00%, 10/15/07 ............. 302,355
120,000 5.10%, 10/15/08 ............. 117,088
230,000 5.125%, 10/15/09 ............ 223,562
280,000 5.30%, 10/15/11 ............. 271,578
Chester County, Pennsylvania, Health &
Educational Facility Authority,
Barclay Friends Project, RB, Series B,
Mandatory Put @ 100, LOC,2
2,400,000 4.60%, 8/1/02 ............... 2,376,024
Clearfield, Pennsylvania, Hospital
Revenue Authority, Clearfield Hospital
Project, RB,
890,000 6.875%, 6/1/16 .............. 891,344
Cumberland County, Pennsylvania,
Municipal Revenue Authority,
Presbyterian Homes Project, RB,
1,210,000 6.00%, 12/1/26 .............. 1,128,652
Dauphin County, Pennsylvania, General
Authority, WW15 Term, RB, Mandatory
Tender @ 100,2
525,000 6.85%, 6/1/09 ............... 538,498
Delaware County, Pennsylvania, College
Revenue Authority, RB Series B:
200,000 4.75%, 10/1/06 .............. 191,286
205,000 4.85%, 10/1/07 .............. 195,832
345,000 4.95%, 10/1/08 .............. 329,040
2,675,000 5.50%, 10/1/19 .............. 2,432,003
Delaware County, Pennsylvania,
Housing Authority, Dunwoody Village
Project, RB,
130,000 5.625%, 4/1/09 .............. 130,036
Delaware River Port Authority,
Pennsylvania, RB, ETM,
135,000 6.50%, 1/15/11 .............. 145,144
Erie, Pennsylvania, Higher Education
Building Authority, Gannon University
Project, RB, Series E,
800,000 5.20%, 7/15/16 .............. 735,256
Erie, Pennsylvania, Higher Education
Building Authority, Mercyhurst College
Project, RB:
110,000 5.75%, 3/15/12 .............. 110,300
600,000 5.75%, 3/15/13 .............. 597,330
325,000 5.85%, 3/15/17 .............. 316,306
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Erie, Pennsylvania, Higher Education
Building Authority, Mercyhurst College
Project, RB, Series B,
$1,370,000 5.75%, 3/15/13 ..............$ 1,363,904
Falls Township, Pennsylvania, Hospital
Authority, Delaware Valley Medical
Center, RB, FHA,
705,000 6.90%, 8/1/11 ............... 708,349
Fayette County, Pennsylvania, Hospital
Authority, Uniontown Hospital, RB,
Connie Lee Insured:
210,000 5.20%, 6/15/04 .............. 213,589
845,000 5.40%, 6/15/06 .............. 870,511
450,000 5.45%, 6/15/07 .............. 465,368
1,070,000 5.55%, 6/15/08 .............. 1,113,046
1,135,000 5.65%, 6/15/09 .............. 1,183,408
Hampton Township, Pennsylvania, GO,
275,000 6.30%, 6/1/02 ............... 278,385
Jefferson County, Pennsylvania,
Municipal Authority, RB, ETM, MBIA,
65,000 7.00%, 12/1/02 .............. 66,853
Lancaster, Pennsylvania, Sewer
Authority, RB, ETM,
70,000 6.00%, 4/1/12 ............... 74,233
Lebanon County, Pennsylvania, Good
Samaritan Hospital Authority, RB, ETM,
10,000 6.80%, 11/1/01 .............. 10,108
Monroeville, Pennsylvania, Hospital
Authority, East Suburban Health Center
Project, RB, Pre-Refunded @ 100,4
865,000 7.60%, 7/1/04 ............... 932,954
Montgomery County, Pennsylvania,
Industrial Development Authority,
Pollution Control Revenue, Peco
Energy Company, RB, Series A,
5,500,000 5.20%, 10/1/30 .............. 5,469,035
Montgomery County, Pennsylvania,
GO, ETM,
175,000 9.00%, 8/15/04 .............. 188,876
Montgomery County, Pennsylvania,
Higher Education Authority, Waverly
Heights Project, RB,
230,000 5.00%, 1/1/03 ............... 227,231
Montgomery County, Pennsylvania,
Industrial Development Authority RB,
BMHR Associated Project, LOC,
185,000 6.75%, 11/15/04 ............. 192,306
Montgomery County, Pennsylvania,
Industrial Development Authority,
ECRI Project, RB,
220,000 6.40%, 6/1/03 ............... 219,289
See Notes to Financial Statements.
--------------------------------------------------------------------------------
38
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Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Montgomery County, Pennsylvania,
Industrial Development Authority,
Meadowood Corporation Project, RB,
Series A, Pre-Refunded @ 102,4
$1,875,000 10.25%, 12/1/00 .............$ 1,920,656
Mount Lebanon, Pennsylvania,
Hospital Authority, RB, ETM,
130,000 7.00%, 7/1/06 ............... 137,960
Northampton County, Pennsylvania,
Industrial Development Authority,
Strawbridge & Clothier Project,
RB, ETM,
165,000 7.20%, 12/15/01 ............. 167,727
Pennsylvania Housing Finance Agency,
Rental Housing, RB, FNMA:
305,000 5.15%, 7/1/03 ............... 306,101
3,945,000 6.50%, 7/1/23 ............... 4,080,629
Pennsylvania Housing Finance Agency,
Single Family Mortgage, RB,
Series 1991-31A, AMT,
175,000 7.00%, 10/1/05 .............. 179,466
Pennsylvania Housing Finance Agency,
Single Family Mortgage, RB,
Series 64, AMT,1
1,575,000 0.00%, 4/1/30 ............... 869,384
Pennsylvania Housing Finance Agency,
Single Family Mortgage, RB,
Series 65A, AMT,
145,000 4.60%, 10/1/08 .............. 142,336
Pennsylvania Southeastern Greene School
District, GO, ETM,
25,000 9.375%, 7/1/03 .............. 26,835
Pennsylvania State Finance Authority,
Municipal Capital Imports Program, RB,
Investment Agreement,
1,815,000 6.60%, 11/1/09 .............. 1,934,137
Pennsylvania State Higher Educational
Facilities Authority, Health Services
Revenue, RB, Series A,
3,735,000 7.00%, 1/1/09 ............... 3,947,148
Pennsylvania State Higher
Educational Facilities Authority,
UPMC Health Systems, RB, Series A,
FSA:
800,000 5.25%, 8/1/10 ............... 811,520
800,000 5.25%, 8/1/11 ............... 807,792
Pennsylvania State Higher Educational
Facility Authority, College & University
Revenue, RB, Asset Guaranty,
800,000 5.15%, 3/15/20 .............. 739,032
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Pennsylvania State Higher Educational
Facility Authority, Health Services
Revenue, Allegheny Delaware Valley
Obligation, RB, Series A, MBIA,
$ 200,000 5.40%, 11/15/07 ............. $ 205,528
Pennsylvania State Higher Educational
Facility Authority, Health Services
Revenue, Allegheny Delaware Valley
Obligation, RB, Series C, MBIA,
1,450,000 5.875%, 11/15/18 ............ 1,464,283
Pennsylvania State Higher Educational
Facility, Allegheny Delaware Valley
Obligation, RB, Series A, MBIA:
1,010,000 5.60%, 11/15/09 ............. 1,049,148
2,215,000 5.70%, 11/15/11 ............. 2,312,748
Pennsylvania State Higher Educational
Facility, Gwynedd Mercy College, RB,
1,080,000 5.00%, 11/1/08 .............. 1,060,571
Pennsylvania State Higher Educational
Facility, University of The Arts, RB,
Asset Guaranty:
125,000 4.75%, 3/15/05 .............. 125,043
200,000 4.85%, 3/15/06 .............. 200,200
230,000 5.10%, 3/15/09 .............. 230,409
Pennsylvania State Higher Educational
Facility, Ursinus College, RB:
120,000 5.00%, 1/1/02 ............... 120,247
140,000 5.10%, 1/1/03 ............... 140,588
140,000 5.20%, 1/1/04 ............... 140,963
165,000 5.30%, 1/1/05 ............... 166,521
190,000 5.40%, 1/1/06 ............... 192,375
960,000 5.85%, 1/1/17 ............... 937,382
Philadelphia Hospital & Higher
Education Auhority, Pennsylvania,
Health System, RB, Series A, FHA,
2,690,000 5.375%, 1/1/28 .............. 2,489,461
Philadelphia, Pennsylvania, Authority for
Industrial Development, Simpson
Housing Project:
240,000 5.00%, 8/15/09 .............. 218,242
290,000 5.00%, 8/15/10 .............. 259,138
240,000 5.10%, 8/15/11 .............. 213,113
Philadelphia, Pennsylvania, Hospital &
Higher Education Facilities Authority
Revenue, Temple University Childrens
Medical, RB,
65,000 4.40%, 6/15/01 .............. 64,527
Philadelphia, Pennsylvania, Hospitals &
Higher Education, RB, ACA,
1,550,000 6.20%, 5/1/11 ............... 1,571,189
See Notes to Financial Statements.
--------------------------------------------------------------------------------
39
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Philadelphia, Pennsylvania, Housing
Redevelopment Authority,
Multi-Family Housing, RB, HUD,
$ 790,000 5.45%, 2/1/23 ............... $ 748,999
Philadelphia, Pennsylvania, Industrial
Development Authority, Elmira
Jefferies Memorial Home, RB, FHA,
405,000 4.75%, 2/1/08 ............... 390,286
Philadelphia, Pennsylvania, Industrial
Development Authority, Jeanes
Physicians' Office, RB, Series A,
605,000 9.375%, 7/1/10 .............. 606,416
Philadelphia, Pennsylvania,
Redevelopment Authority, First Lien
Mortgage, Series A,
696,000 6.50%, 1/1/29 ............... 713,240
Philadelphia, Pennsylvania, Saint
Agnes Medical Center Project,
RB, ETM,
40,000 6.75%, 8/15/01 .............. 40,077
Pittsburgh, Pennsylvania, Urban
Redevelopment Authority, RB,
Series C, AMT, FNMA / GNMA,
160,000 5.95%, 10/1/29 .............. 160,099
Potter County, Pennsylvania, Hospital
Redevelopment Authority, Charles
Cole Memorial Hospital, RB, Asset
Guaranty,
230,000 5.10%, 8/1/02 ............... 231,435
Pottsville, Pennsylvania, Hospital
Authority, Hospital Revenue, Hospital
& Warne Clinic, RB, ACA,
530,000 5.625%, 7/1/24 .............. 493,626
Pottsville, Pennsylvania, Hospital
Authority, Pottsville Hospital & Warne
Clinic, RB:
600,000 4.70%, 7/1/01 ............... 595,734
630,000 4.80%, 7/1/02 ............... 618,692
680,000 5.15%, 7/1/09 ............... 602,419
1,790,000 5.50%, 7/1/18 ............... 1,465,133
455,000 7.25%, 7/1/24 ............... 500,163
Scranton-Lackawanna Counties,
Pennsylvania, Health & Welfare
Authority, RB,
170,000 6.625%, 4/15/07 ............. 170,245
Somerset County, Pennsylvania,
Hospital Authority, Community
Hospital District B, RB,
Asset Guaranty:
455,000 5.20%, 3/1/10 ............... 457,412
135,000 5.30%, 3/1/11 ............... 135,948
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Washington County, Pennsylvania,
Hospital Revenue Authority,
Canonsburg General Hospital
Project, RB, Pre-Refunded @ 102,4
$ 425,000 7.35%, 6/1/03 ............... $ 455,583
Williamsport, Pennsylvania,
Multi-Family Housing Authority,
RB, Series A, MBIA / FHA,
1,165,000 5.25%, 1/1/15 ............... 1,090,743
York County, Pennsylvania, Hospital
Authority, Hanover Hospital
Incorporated, RB, AMBAC,
745,000 4.60%, 12/1/09 .............. 714,701
York, Pennsylvania, Housing
Redevelopment Mortgage Corporation,
RB, Series A,
870,000 6.875%, 11/1/09 ............. 884,181
-----------
82,859,261
-----------
RHODE ISLAND-- 0.90%
Central Falls, Rhode Island, GO,
Pre-Refunded @ 103,4
125,000 9.25%, 11/15/00 ............. 128,321
Rhode Island Housing & Mortgage
Finance Corporation, Homeownership
Opportunity, RB, Series 2,
750,000 7.70%, 10/1/10 .............. 780,188
Rhode Island State Health & Educational
Building Corporation Revenue, Higher
Education Facility, Roger Williams,
RB, AMBAC,
490,000 5.00%, 11/15/24 ............. 443,024
Rhode Island State Industrial
Facilities Corporation, Industrial
Development Revenue, Building
Authority Program, RB, AMT:
175,000 4.70%, 4/1/05 ............... 169,649
190,000 4.80%, 4/1/06 ............... 183,730
185,000 4.90%, 4/1/07 ............... 178,516
160,000 5.00%, 4/1/08 ............... 154,230
210,000 5.10%, 4/1/09 ............... 202,610
225,000 5.20%, 4/1/10 ............... 217,260
230,000 5.25%, 4/1/11 ............... 220,547
245,000 5.30%, 4/1/12 ............... 233,840
265,000 5.35%, 4/1/13 ............... 253,091
65,000 5.40%, 4/1/14 ............... 61,747
305,000 5.50%, 4/1/19 ............... 271,904
380,000 5.60%, 4/1/24 ............... 334,168
Rhode Island State Industrial Facility
Corporation, Crystal Thermoplastics
Project, Series A, AMT,
285,000 6.95%, 8/1/14 ............... 293,160
See Notes to Financial Statements.
--------------------------------------------------------------------------------
40
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
West Warwick, Rhode Island, GO,
Series A, Asset Guaranty,
$ 585,000 7.30%, 7/15/08 .............. $ 628,056
-----------
4,754,041
-----------
SOUTH CAROLINA-- 2.30%
Myrtle Beach, South Carolina,
Convention Center Project, COP, ETM,
620,000 6.75%, 7/1/02 ............... 632,685
South Carolina Economic Jobs
Development, Westminster
Presbyterian, RB, Series A,
735,000 5.125%, 11/15/08 ............ 696,677
South Carolina Job Economic
Development, Caterpillar
Incorporated Project, RB, AMT,
375,000 5.05%, 6/1/08 ............... 362,603
South Carolina Jobs Economic
Development Revenue Authority,
Ebenezer Nursing, RB, GNMA,
1,295,000 6.90%, 1/20/37 .............. 1,398,393
South Carolina State Housing Finance &
Development Authority, Bryton Point
Apartments Project, Mandatory
Put @ 100, FNMA,2
2,290,000 5.70%, 6/1/05 ............... 2,347,296
South Carolina State Housing Finance &
Development Authority, Runway Bay
Apartments Projects, RB,
560,000 5.50%, 12/1/05 .............. 562,923
South Carolina State Housing Finance &
Development Authority, Westbury
Plantation, RB, FHA,
340,000 6.05%, 7/1/27 ............... 339,966
South Carolina State Housing Finance &
Development Authority, Hunting Ridge
Apartments, RB, Mandatory
Put @ 100, AMT,2
755,000 6.75%, 6/1/10 ............... 777,174
York County, South Carolina, Industrial
Revenue, Hoechst Celanese, RB, AMT,
5,565,000 5.70%, 1/1/24 ............... 4,998,427
-----------
12,116,144
-----------
SOUTH DAKOTA -- 0.25%
South Dakota Housing Development
Authority, Multi-Family Housing, RB,
Series B, HUD,
755,000 7.00%, 4/1/12 ............... 787,850
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
South Dakota Housing Development
Authority, Homeownership Mortgage,
RB, Series A,
$ 515,000 5.50%, 5/1/10 ............... $ 520,737
-----------
1,308,587
-----------
TENNESSEE-- 2.32%
Greeneville, Tennessee, Health &
Education Facility Board, Southern
Advent Hospital, RB, ETM,
255,000 8.70%, 10/1/09 .............. 297,692
Memphis, Tennessee, Health, Education
& Housing Facility Board, Multi-Family
Housing, Hickory Pointe Apartments
Project, RB, Series A, MBIA,
465,000 5.40%, 7/1/10 ............... 467,748
Memphis-Shelby County, Tennessee,
Tennessee Airport, Federal Express
Corporation, RB,
3,735,000 6.75%, 9/1/12 ............... 3,880,628
Nashville & Davidson Counties,
Tennessee, Health & Education
Facilities Board, Homes, Inc. Project,
RB, Series A, Pre-Refunded @ 105,4
185,000 9.00%, 11/1/07 .............. 232,613
Nashville & Davidson County, Tennessee,
Health & Education Facilities Board,
Modal Health, RB, Asset Guaranty,
630,000 5.50%, 5/1/23 ............... 595,092
Nashville & Davidson County, Tennessee,
Health & Education Facility Revenue
Board, Multi-Family Housing, RB,
Mandatory Put @ 100, FNMA,2
1,610,000 5.20%, 2/1/06 ............... 1,629,771
Nashville & Davidson, Tennessee,
Multi-Family Housing, Welch Bend
Apartments, RB, Series A, Mandatory
Put @ 100, FNMA,2,3
1,600,000 5.50%, 1/1/07 ............... 1,622,400
Shelby County, Tennessee, Health
Educational & Housing Facility Board,
Methodist Health Systems, RB, MBIA,
1,505,000 5.20%, 8/1/13 ............... 1,502,923
Shelby County, Tennessee,
Multi-Family Housing, Windsor
Apartments, RB, Series A, Asset
Guaranty:
1,000,000 6.50%, 10/1/07 .............. 1,037,780
370,000 6.75%, 10/1/17 .............. 385,640
Shelby County, Tennessee, Public
Improvements, GO, Series B,
10,000 5.25%, 11/1/06 .............. 10,338
See Notes to Financial Statements.
--------------------------------------------------------------------------------
41
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Shelby County, Tennessee, GO, Series B,
$ 405,000 5.50%, 8/1/07 ............... $ 424,954
Tennessee Energy Acquisition
Corporation, Gas Revenue, RB,
Series B, AMBAC,
140,000 5.00%, 9/1/07 ............... 134,354
-----------
12,221,933
-----------
TEXAS -- 6.49%
Austin, Texas, Hotel Occupancy Tax, RB,
Series A, AMBAC,
1,340,000 5.125%, 11/15/14 ............ 1,322,165
Austin, Texas, Water Sewer & Electric
Revenue, RB,
360,000 14.00%, 11/15/01 ............ 376,895
Bexar County, Texas, Housing Finance
Corporation, GO,1
1,330,000 0.00%, 3/1/15 ............... 552,549
Bryan, Texas, Higher Education Authority,
Allen Academy Project, RB, Series A:
320,000 6.50%, 12/1/06 .............. 319,027
1,315,000 7.30%, 12/1/16 .............. 1,319,866
Collin County, Texas, Housing Financial
Corporation, Preston Bend Apartments
Project, RB, Mandatory Put @ 100,
AXA,2
930,000 6.50%, 9/1/03 ............... 931,349
Del Rio, Texas, GO, Asset Guaranty:
115,000 7.50%, 4/1/03 ............... 120,967
145,000 7.50%, 4/1/04 ............... 154,957
95,000 7.50%, 4/1/08 ............... 105,674
145,000 7.50%, 4/1/09 ............... 160,598
95,000 6.50%, 4/1/10 ............... 99,305
45,000 5.55%, 4/1/11 ............... 44,024
95,000 5.65%, 4/1/13 ............... 92,194
45,000 5.75%, 4/1/16 ............... 42,962
185,000 5.75%, 4/1/17 ............... 175,395
Denison, Texas, Hospital Authority,
Texoma Medical Center, RB, ETM,
125,000 7.125%, 7/1/08 .............. 135,410
Edgewood, Texas, Independent School
District, RB:
530,000 4.90%, 8/15/08 .............. 499,196
560,000 5.00%, 8/15/09 .............. 526,870
585,000 5.00%, 8/15/10 .............. 543,336
645,000 5.25%, 8/15/13 .............. 601,076
Gregg County, Texas, Housing Finance
Corporation, Summer Lake Project,
RB, Series A, Mandatory Put @ 100,
AXA,2
615,000 6.40%, 3/1/06 ............... 634,797
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Harris County, Texas, Health Facilities
Development Corporation, Memorial
Hospital System, RB, Pre-Refunded
at various dates,
$5,525,000 7.125%, 6/1/15 ..............$ 5,835,616
Harris County, Texas, Housing Finance
Corporation, Cypress Ridge
Apartments, RB, AMT, FSA,
210,000 5.70%, 6/1/06 ............... 212,692
Harris County, Texas, Toll Road
Authority, GO, MBIA,
855,000 7.125%, 8/15/01 ............. 823,758
Heart of Texas Housing Finance
Corporation, Multi-Family Housing
Revenue, RB, GNMA, AMT,
1,000,000 7.40%, 9/20/35 .............. 1,119,750
Houston, Texas, Housing Finance
Corporation, RB, Series A-2,1
1,380,000 0.00%, 6/1/14 ............... 513,181
Houston, Texas, Housing Finance
Corporation, Series A-1, RB,
520,000 8.00%, 6/1/14 ............... 554,892
Houston, Texas, Port Authority, Airport
and Marina Improvement, RB,
100,000 5.75%, 5/1/02 ............... 100,582
Houston, Texas, Sewer Systems,
RB, ETM:
480,000 5.40%, 10/1/04 .............. 486,485
175,000 6.375%, 10/1/08 ............. 186,757
Odessa, Texas, Housing Finance
Corporation, Single Family Mortgage,
RB, Series A, FNMA,
123,720 8.45%, 11/1/11 .............. 130,223
Panhandle, Texas, Regional Housing
Finance Corporation, Single Family
Mortgage, RB, Series A, AMT, GNMA,
290,000 7.50%, 5/1/24 ............... 291,334
Robstown, Texas, Electric Light &
Power Revenue, RB:
100,000 6.00%, 12/1/02 .............. 100,076
100,000 6.00%, 12/1/03 .............. 100,076
100,000 6.00%, 12/1/04 .............. 100,076
100,000 6.00%, 12/1/05 .............. 100,076
100,000 6.00%, 12/1/06 .............. 100,076
Southeast, Texas, Housing Finance
Corporation, Residual Revenue
Capital Appreciation, RB,1
8,255,000 0.00%, 9/1/17 ............... 3,384,137
See Notes to Financial Statements.
--------------------------------------------------------------------------------
42
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Texas Capital Area, Housing Finance
Corporation, IDK Partners II Trust,
Series A,
$1,195,000 6.50%, 11/1/19 ..............$ 1,201,154
Texas Gulf Coast Waste Disposal
Authority, Atlantic Richfield Company
Project, RB, Pre-Refunded @ 100,4
305,000 6.50%, 8/1/03 ............... 315,638
Texas Northeast Hospital Authority,
RB, ETM,
535,000 8.00%, 7/1/08 ............... 597,242
Texas State Department Housing &
Community Affairs, Meadow Ridge
Apartments Project, RB, AMT, FNMA,
1,185,000 5.05%, 8/1/08 ............... 1,176,669
Texas State Department Housing &
Community Affairs, Volente Project,
RB, AMT, FNMA,
885,000 5.00%, 7/1/08 ............... 872,760
Tarrant County, Texas, Health Facility,
South Central Nursing, RB, Series A,
MBIA / FHA,
185,000 6.00%, 1/1/37 ............... 187,374
Tarrant County, Texas, Housing Finance
Corporation, Multi-Family Housing,
Summit Project, RB, Series A,
Mandatory Put @ 100, FNMA,2
1,510,000 5.08%, 9/1/07 ............... 1,498,720
Texarkana, Texas, Housing Finance
Corporation, Summerhill, RB,
Series A, GNMA,
175,000 5.55%, 1/20/07 .............. 176,540
Texas State Department Housing &
Community Affairs, Single Family
Revenue, RB, Series E, MBIA,
1,200,000 6.00%, 9/1/17 ............... 1,228,464
Texas State, GO, Series A,
500,000 6.00%, 10/1/06 .............. 535,345
Texas Water Resident Finance Authority
Revenue Refunding, RB, AMBAC,
470,000 4.60%, 8/15/08 .............. 462,424
Travis County, Texas, Housing Finance
Corporation, Broadmoor Apartments
Project, RB, AMT, FSA,
725,000 5.70%, 6/1/06 ............... 736,027
University of Texas, Texas, RB,
Series A,
500,000 6.50%, 8/15/01 .............. 508,225
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Willow Fork, Texas, Drain District, GO,
AMBAC:
$ 80,000 4.60%, 9/1/05 ............... $ 79,755
185,000 4.60%, 9/1/06 ............... 183,775
320,000 4.65%, 9/1/07 ............... 317,322
215,000 4.70%, 9/1/08 ............... 213,403
310,000 4.80%, 9/1/09 ............... 308,438
325,000 4.90%, 9/1/10 ............... 323,976
390,000 4.90%, 9/1/11 ............... 384,817
-----------
34,206,467
-----------
UTAH -- 1.24%
Hilldale, Utah, GO,
220,000 7.50%, 12/15/03 ............. 228,551
Provo City, Utah, Housing Authority,
Multi-Family Housing, Lookout Pointe
Apartments, RB, GNMA,
385,000 6.00%, 7/20/08 .............. 402,352
Utah State Housing Agency, Single
Family Mortgage, RB, AMT,
1,610,000 5.40%, 7/1/20 ............... 1,551,702
Utah State Housing Finance Agency,
Single Family Mortgage, RB, AMT,
240,000 5.25%, 7/1/12 ............... 234,684
Utah State Housing Finance Agency,
Single Family Mortgage, RB, AMT,
FHA,
20,000 7.60%, 1/1/22 ............... 20,066
Utah State Housing Finance Agency,
Single Family Mortgage, RB,
Series A-2, AMT,
660,000 5.40%, 7/1/16 ............... 647,579
Utah State Housing Finance Agency,
Single Family Mortgage, RB,
Series A-2, Class III, AMT,
465,000 5.05%, 7/1/12 ............... 453,682
Utah State Housing Finance Agency,
Single Family Mortgage, RB,
Series B-2, AMT,
380,000 5.25%, 7/1/11 ............... 380,247
Utah State Housing Finance Agency,
Single Family Mortgage, RB,
Series F-1, Class I,
305,000 5.50%, 7/1/16 ............... 303,393
Utah State Housing Finance Agency,
Single Family Mortgage, Series A-2,
AMT,
330,000 5.20%, 7/1/11 ............... 325,991
Utah State Housing Finance Agency,
Sub-Single Family Mortgage, RB,
AMBAC,
390,000 5.85%, 7/1/07 ............... 406,368
See Notes to Financial Statements.
--------------------------------------------------------------------------------
43
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Utah State Housing Finance Agency,
Single Family Mortgage, RB, Series A,
$ 25,000 6.05%, 7/1/25 ............... $ 25,126
Utah State Housing Finance Agency,
Single Family Mortgage, RB, Series C,
Class III, AMT,
500,000 6.25%, 7/1/14 ............... 512,520
Weber County, Utah, Municipal Building
Authority, RB, Asset Guaranty,
960,000 6.75%, 12/15/04 ............. 1,020,038
-----------
6,512,299
-----------
VERMONT -- 0.23%
Vermont Education & Health Building
Finance Authority, Norwich University
Project, RB:
150,000 4.75%, 7/1/04 ............... 147,150
275,000 5.00%, 7/1/06 ............... 268,884
310,000 5.00%, 7/1/07 ............... 300,917
525,000 5.75%, 7/1/13 ............... 518,915
-----------
1,235,866
-----------
VIRGINIA -- 1.55%
Alexandria Redevelopment & Housing
Authority, Virginia, Multi-Family
Housing, United Dominion-Parkwood
Court, RB, AMT,
2,245,000 6.625%, 5/1/24 .............. 2,296,949
Arlington County, Virginia, GO,
400,000 5.50%, 8/1/05 ............... 416,560
Chesterfield County, Virginia,
Industrial Development Authority,
Multi-Family Housing, Winchester
Greens, RB, Standby LOC:
170,000 5.00%, 7/1/14 ............... 158,336
135,000 5.20%, 7/1/19 ............... 122,959
Newport News, Virginia, Industrial
Development Authority, Mennowood
Communities, RB, Series A, GNMA,
875,000 7.25%, 8/1/16 ............... 973,420
Richmond, Virginia, Metro Expressway
Authority, RB, ETM, AMBAC,
790,000 7.00%, 10/15/13 ............. 881,364
Virginia Poplar Hill Community
Development Authority, BAN, Series B,
2,000,000 5.50%, 6/15/01 .............. 1,999,660
Virginia State Housing Development
Authority, Multi-Family Mortgage,
RB, Series D,
600,000 6.80%, 11/1/09 .............. 622,584
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Virginia State Housing Development
Authority, RB,
$ 500,000 6.10%, 1/1/07 ............... $ 513,100
Virginia State Housing Development
Authority, Multi-Family Mortgage, RB,
190,000 6.30%, 11/1/08 .............. 192,198
-----------
8,177,130
-----------
WASHINGTON-- 1.38%
Grays Harbor County, Washington,
Public Utility District Number 1,
RB, ETM,
245,000 5.375%, 1/1/06 .............. 248,553
King County, Washington, Housing
Authority, Multi-Family Mortgage,
Section 8 Assisted, RB, Series A,
355,000 7.00%, 8/1/03 ............... 356,551
King County, Washington, Housing
Authority, Multi-Family Mortgage,
Section 8 Assisted, RB, Series B,
110,000 7.00%, 8/1/03 ............... 110,477
Seattle, Washington, Low Income
Housing Assistance Authority,
Kin On Project, RB, Series A,
GNMA,
1,132,000 7.40%, 11/20/36 ............. 1,251,188
Spokane, Washington, Housing
Authority, Valley 206 Apartments,
RB, Series A,
755,000 5.625%, 4/1/28 .............. 680,497
Spokane, Washington, Housing
Authority, Valley 206 Apartments,
RB, Series B, LOC,
420,000 5.75%, 4/1/28 ............... 388,462
Washington State Health Care Facilities
Authority Revenue Refunding, Our
Lady of Lourdes Health, RB,
Pre-Refunded @ 102,4
280,000 7.875%, 12/1/00 ............. 286,328
Washington State Housing Finance
Commision, Convention Deferred
Interest, RB, Series 4A, AMT,
FNMA / GNMA,1
2,440,000 0.00%, 12/1/20 .............. 1,472,247
Washington State Housing Finance
Commision, RB, Series B,
GNMA / FNMA,
785,000 6.90%, 7/1/16 ............... 786,688
See Notes to Financial Statements.
--------------------------------------------------------------------------------
44
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Washington State Housing Finance
Commission, Nonprofit Housing
Revenue, Presbyterian Ministries,
RB, Series A, ACA:
$ 995,000 5.10%, 1/1/14 ............... $ 917,599
840,000 5.30%, 1/1/19 ............... 754,824
-----------
7,253,414
-----------
WEST VIRGINIA-- 1.44%
Beckley, West Virginia, Nursing Facility,
Beckley Healthcare Corporation Project,
RB, Standby LOC:
190,000 5.55%, 9/1/08 ............... 182,695
150,000 5.70%, 9/1/09 ............... 144,312
Harrison County, West Virginia, CMO,
Series B, AMBAC,1
2,127,000 0.00%, 10/20/10 ............. 1,000,392
Marshall County, West Virginia, Capital
Appreciation, RB, MBIA,1
2,255,000 0.00%, 5/1/14 ............... 803,569
Mason County, West Virginia, Point
Pleasant Haven, RB, LOC,
635,000 6.20%, 12/1/05 .............. 627,901
Preston County, West Virginia, Pollution
Control Authority, Community-
Monongahela, RB, Series C,
4,105,000 4.50%, 3/1/03 ............... 4,058,285
Raleigh Fayette & Nicholas County,
West Virginia, Series B, AMBAC,1
1,627,000 0.00%, 6/20/10 .............. 778,064
-----------
7,595,218
-----------
WISCONSIN -- 2.61%
Oshkosh, Wisconsin, Hospital Facility,
Mercy Medical Center. RB,
Pre-Refunded @ 100,4
170,000 7.375%, 7/1/07 .............. 190,488
Pewaukee, Wisconsin, Industrial
Development Authority, Lake County
Development Project, RB, AMT, LOC:
100,000 5.80%, 6/1/04 ............... 102,211
105,000 5.90%, 6/1/05 ............... 107,892
130,000 6.00%, 6/1/06 ............... 134,180
Shell Lake, Wisconsin, Nursing Home
Revenue, Terraceview Living, RB,
GNMA,
1,270,000 5.30%, 9/20/18 .............. 1,187,209
West Bend, Wisconsin, GO,
140,000 6.40%, 2/1/05 ............... 145,417
Whitewater, Wisconsin, Waterworks
Systems Mortgage,RB,
185,000 7.50%, 7/1/16 ............... 209,901
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Wisconsin Housing & Economic
Development Authority, Home
Ownership Revenue, RB,
Series C, FHA,
$2,500,000 6.25%, 9/1/17 ...............$ 2,532,125
Wisconsin Housing & Economic
Development Authority, RB,
Series B, AMT,
305,000 4.95%, 9/1/09 ............... 299,675
Wisconsin State Health & Education
Facility, Richland Hospital
Inc. Project,
RB, Series A, ACA,
2,755,000 5.375%, 6/1/28 .............. 2,427,017
Wisconsin State Health & Educational
Facilities, Sister Sorrowful
Mothers, RB, Series A, MBIA:
850,000 5.10%, 8/15/07 .............. 862,402
1,260,000 5.20%, 8/15/08 .............. 1,283,323
890,000 5.30%, 8/15/09 .............. 909,687
Wisconsin State Health & Educational
Facilities, Viterbo College
Incorporated
Project, RB, LOC:
110,000 5.25%, 2/1/04 ............... 110,806
95,000 5.40%, 2/1/05 ............... 96,069
390,000 5.75%, 2/1/12 ............... 392,808
405,000 6.00%, 2/1/17 ............... 404,955
Wisconsin State Health & Educational
Facility Revenue Authority, RB, ACA,
1,000,000 6.00%, 5/15/16 .............. 1,005,010
Wisconsin State, GO, Series C,
600,000 5.00%, 5/1/08 ............... 609,750
Wisconsin State Petroleum, Inspection
Fee Revenue, RB, Series A,
700,000 5.40%, 7/1/08 ............... 725,263
-----------
13,736,188
-----------
WYOMING -- 0.77%
Cheyenne, Wyoming, Federal Mineral
Royalty, RB,
755,000 6.20%, 6/1/09 ............... 784,241
Green River-Sweetwater County,
Wyoming, Joint Powers Board, RB,
Series B, FSA,
465,000 4.50%, 3/1/14 ............... 463,591
Teton County Hospital, Wyoming,
St. John's, RB, ACA,
250,000 5.00%, 12/1/03 .............. 249,990
Wyoming Community Development
Authority, RB, Series 5, AMT,
145,000 5.70%, 12/1/07 .............. 149,885
See Notes to Financial Statements.
--------------------------------------------------------------------------------
45
<PAGE>
Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Wyoming Community Development
Authority, Single Family Mortgage,
RB, Series B, AMT,
$ 95,000 8.125%, 6/1/21 ............. $ 96,540
Wyoming Multi-Family Community
Development Authority, Aspen Court
Apartments Project, RB, Series A,
Mandatory Put @ 100, AMT, LOC,2
2,410,000 4.75%, 12/1/08 ............. 2,297,742
-----------
4,041,989
-----------
TOTAL MUNICIPAL BONDS
(Cost $513,803,080) ................... 509,194,626
-----------
TAX-EXEMPT
ASSET-BACKED SECURITIES-- 0.69%
Bridlewood Village Apartments,
Participation Certificate,
Class A, FHA,
1,654,482 5.60%, 9/1/21 .............. 1,654,689
FHA Insured Trust, Series 1996-1,
Class A-2, Private Placement,
606,877 6.75%, 2/1/13 .............. 611,890
FHA Insured Trust, Series 1996-1,
Class A-3, Private Placement,
1,383,380 7.00%, 7/1/22 .............. 1,394,807
-----------
TOTAL TAX-EXEMPT ASSET-BACKED SECURITIES
(Cost $3,645,600) ..................... 3,661,386
-----------
CASH EQUIVALENT -- 1.27%
6,688,558 Provident Institutional Municipal
Cash Fund .................. 6,688,558
-----------
TOTAL INVESTMENTS
(Cost $524,137,238) ........ 98.54% 519,544,570
OTHER ASSETS IN EXCESS
OF LIABILITIES ............. 1.46 7,707,701
------ -----------
NET ASSETS .................... 100.00% $527,252,271
====== ============
--------------------------------------------------------------------------------
1 Zero Coupon Security.
2 Mandatory Put/Tender Security. The mandatory put/tender date is shown as
the maturity date on the Schedule of Investments.
3 Variable Rate Security. The rate reported on the Schedule of Investments is
the rate in effect as of October 31, 2000.
4 Pre-Refunded Security. The pre-refunded date is shown as the maturity date on
the Schedule of Investments.
Abbreviations
AMT -- Income from security may be subject to alternative minimum tax.
CMO -- Collaterized Mortgage Obligation
COP -- Certificate of Participation
ETM -- Escrowed to Maturity
GO -- General Obligation
LOC -- Securities are held in connection with a letter of credit by a
major commercial bank.
RB -- Revenue Bond
The following organizations have provided underlying credit support for the
securities as defined in the Schedule of Investments.
ACA -- American Capital Access
AMBAC -- American Municipal Bond Assurance Corporation
Asset Guaranty -- Asset Guaranty
AXA -- Multi-Line Insurance
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
HUD -- Housing & Urban Development
MBIA -- Municipal Bond Investors Assurance
QBE -- Insurance Group Limited
See Notes to Financial Statements.
--------------------------------------------------------------------------------
46
<PAGE>
Short-Term Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
MUNICIPAL BONDS -- 94.63%
ALABAMA -- 0.25%
Alabama 21st Century Authority,
Tobacco Settlement Revenue, RB,
$ 460,000 5.25%, 12/1/01 ............ $ 462,383
Hartselle Medical Clinic, Alabama
Hospital Clinic America, Board
Hospital RB, ETM,
10,000 6.25%, 10/1/02 ............ 10,205
-----------
472,588
-----------
ALASKA -- 0.18%
Alaska Municipal Bond Bank, Municipal
Bond Bank Revenue Authority, RB,
Series B,
45,000 4.70%, 1/1/01 ............. 45,004
Valdez, Alaska, Marine Terminal
Revenue, ARCO Pipe Line Company
Project, RB, Pre-Refunded @ 100,4
300,000 6.00%, 8/1/03 ............. 309,741
-----------
354,745
-----------
ARIZONA-- 0.67%
Arizona Health Facility Authority,
Hospital Systems Revenue, Phoenix
Baptist Hospital & Medical, RB,
ETM, MBIA,
75,000 6.25%, 9/1/11 ............. 78,186
Arizona Valley Housing Development
Corporation, Roosevelt Plaza,
RB, HUD Section 8,
295,000 8.00%, 10/1/20 ............ 297,481
Maricopa County, Arizona, Hospital
Revenue Authority, RB, Phoenix
Baptist Hospital & Medical Center,
ETM,
100,000 7.125%, 10/1/02 ........... 102,895
Maricopa County, Arizona, Hospital
Revenue Authority, Samaritan Health
Services, RB, ETM,
220,000 6.75%, 1/1/04 ............. 226,549
Maricopa County, Arizona, Hospital
Revenue Authority, Sun Health Corp.,
RB, ETM,
235,000 7.875%, 4/1/02 ............ 241,658
Maricopa County, Arizona, Industrial
Development Authority, Lutheran
Hospital & Homes, RB, ETM,
335,000 6.75%, 12/1/03 ............ 345,683
-----------
1,292,452
-----------
ARKANSAS -- 1.48%
Arkansas State Development Finance
Authority, Single Family Mortgage
Revenue, RB, Series A,
55,000 8.00%, 8/15/11 ............ 57,076
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Crosett, Arkansas, Industrial Development
Authority, Georgia Pacific Project, RB,
Pre-Refunded @ 100,4
$ 400,000 6.00%, 6/1/01 ............. $ 403,100
Little Rock, Arkansas, Residential
Housing & Public Facility Board, RB,
Series B,1
465,000 0.00%, 7/15/11 ............ 228,738
Mississippi County, Arkansas, Hospital
Revenue, RB, AMBAC, ETM,
115,000 7.25%, 11/1/02 ............ 118,042
Rogers Ark, Arkansas, Residential
Housing Facility Board, Innisfree
Apartment Project, RB, Mandatory
Put @ 100 LOC,2
965,000 4.875%, 5/1/03 ............ 954,964
Rogers Ark, Arkansas, Sales & Use Tax
Revenue, RB, Series 1996,
910,000 5.00%, 11/1/15 ............ 913,558
Springdale, Arkansas, Residential
Housing & Healthcare Facility Board,
RB, Series A, FNMA,
157,459 7.65%, 9/1/11 ............. 170,077
-----------
2,845,555
-----------
CALIFORNIA -- 0.33%
Brea, California, Public Finance Revenue
Authority, Pre-Refunded @ 102, MBIA,4
115,000 7.00%, 8/1/01 ............. 119,745
California ABAG Finance Authority for
The Non-Profit Co., American Baptist
Homes, Series A, COP,
250,000 5.50%, 10/1/07 ............ 239,315
Los Angeles, California, Housing Authority,
Multi-Family Housing, The Palm
Apartments, RB, Series E, AMT FNMA,
35,000 4.30%, 1/1/01 ............. 35,002
Los Angeles, California, Public Facility
Corporation, RB, ETM,
80,000 5.40%, 8/1/07 ............. 82,788
Santa Clara County, California, Housing
Authority, Amberwood Apartments
Project, RB, Series C, FNMA,
155,000 4.75%, 10/1/07 ............ 155,079
-----------
631,929
-----------
COLORADO -- 5.25%
Aurora, Colorado, Single Family
Mortgage Revenue, RB, Series A,
140,000 7.30%, 5/1/10 ............. 143,062
Broomfield, Colorado, GO, Series C, FSA,1
100,000 0.00%, 12/1/00 ............ 99,621
Colorado Housing Finance Authority,
Single Family Program, RB, Series A,
300,000 4.375%, 10/1/06 ........... 292,389
See Notes to Financial Statements.
--------------------------------------------------------------------------------
47
<PAGE>
Short-Term Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Colorado Housing Finance Authority,
Single Family Program, RB, Series B,
$ 500,000 4.875%, 4/1/07 ............ $ 488,415
Colorado Housing Finance Authority,
Single Family Program, RB, Series D-3,
1,000,000 5.15%, 4/1/11 ............. 1,000,270
Colorado Housing Finance Authority,
Single Family Program, RB, Series D-1,
210,000 6.60%, 8/1/17 ............. 214,265
Colorado Housing Finance Authority,
Single Family Program, RB, Series C-2,
AMT,
95,000 6.85%, 8/1/22 ............. 95,833
Colorado Housing & Finance Authority,
Single Family Housing Program, RB,
AMT, Series E,
35,000 6.25%, 12/1/09 ............ 35,376
Colorado Housing Finance Authority,
Single Family Program, Series B, RB,
25,000 4.625%, 11/1/05 ........... 24,390
Colorado Meridian Metropolitan
District, GO,
6,500,000 7.50%, 12/1/11 ............ 6,720,870
Colorado Student Obligation Board
Authority, Series C, RB, AMT,
565,000 6.90%, 9/1/01 ............. 576,306
El Paso County, Colorado, Colonial
Multi-Family Mortgage Revenue,
Cottonwood Terrace Project, RB,
GNMA,
15,000 5.25%, 9/20/03 ............ 15,107
El Paso County, Colorado, Colonial
Residual Revenue, RB, Series C,
AMT,1
1,000,000 0.00%, 7/10/14 ............ 357,750
Logan County, Colorado, Single Family
Mortgage, RB, Series A,
50,000 8.50%, 11/1/11 ............ 51,711
-----------
10,115,365
-----------
CONNECTICUT -- 2.04%
Connecticut Health & Educational
Facilities, Lutheran General Health
Care System, RB, ETM,
50,000 7.25%, 7/1/04 ............. 52,439
Connecticut State Housing Finance
Authority, Housing Mortgage
Finance Program, RB, Series B,
150,000 7.00%, 11/15/02 ........... 151,662
Connecticut State, GO,
245,000 5.25%, 7/1/02 ............. 245,167
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Stamford, Connecticut, Multi-Family
Housing Revenue Authority, Fairfield
Apartments Project, RB, AMT,
Mandatory Put @ 100,2
$3,750,000 4.75%, 12/1/08 ............ $ 3,475,725
-----------
3,924,993
-----------
DELAWARE -- 0.13%
Delaware State, Health Facilities
Authority, Beebe Medical Center, RB,
180,000 5.80%, 6/1/01 ............. 179,582
Delaware Transportation Authority,
Delaware Turnpike Revenue, RB, ETM,
45,000 9.00%, 7/1/01 ............. 46,280
Dover, Delaware, Water & Sewer
Revenue, RB, Series B, MBIA,
20,000 7.20%, 7/1/01 ............. 20,043
-----------
245,905
-----------
DISTRICT OF COLUMBIA -- 0.18%
District of Columbia Housing Finance
Agency, Multi-Family Housing
Revenue, Rockburne Estates,
RB, AMT, GNMA,
360,000 5.20%, 2/20/09 ............ 352,379
-----------
FLORIDA -- 3.86%
Alachua County, Florida, Health
Facility Authority, Shands Teaching
Hospital & Clinics Inc., RB, ETM,
350,000 7.00%, 12/1/01 ............ 355,414
Dade County, Florida, Housing Finance
Authority, Single Family Mortgage
Revenue, RB, Series B-1, AMT,
FNMA / GNMA,
235,382 6.10%, 4/1/27 ............. 245,685
Florida State Board of Public Education,
GO, ETM,
500,000 6.20%, 5/1/06 ............. 516,780
Fort Meyers, Florida, Improvement
Revenue Authority, Special
Assessment, Pre-Refunded @ 100,4
275,000 7.05%, 7/1/03 ............. 292,413
Gainesville, Florida, Utility Systems
Revenue, RB, ETM,
685,000 6.20%, 10/1/02 ............ 695,522
Lee County, Florida, Justice Center
Complex, RB, Series A, ETM, MBIA,
5,000 10.75%, 1/1/01 ............ 5,045
Orange County, Florida, Housing
Authority, RB, CMO, Series A,
AMT, GNMA,
45,000 7.25%, 9/1/11 ............. 46,221
See Notes to Financial Statements.
--------------------------------------------------------------------------------
48
<PAGE>
Short-Term Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Palm Beach County, Florida, Housing
Finance Authority, Single Family
Mortgage Purpose Revenue, RB,
Series A, AMT, GNMA / FNMA,
$ 40,000 6.15%, 10/1/17 ............ $ 40,750
Putnam County, Florida, Development
Authority, Pollution Control Revenue,
Hudson Pulp & Paper Corporation
Project, RB,
210,000 7.25%, 5/1/02 ............. 211,407
St. Johns County, Florida, Housing
Finance Authority, Housing Revenue,
RB, FNMA,3
5,000,000 4.35%, 2/15/28 ............ 5,000,000
Tallahassee, Florida, Municipal
Electricity, RB, ETM,
25,000 9.10%, 10/1/02 ............ 26,597
-----------
7,435,834
-----------
GEORGIA -- 4.76%
Atlanta, Georgia, Urban Residential
Finance Authority, Multi-Family
Revenue, Shamrock Garden
Apartmnets Project, RB, AMT, FNMA,
365,000 5.10%, 10/1/14 ............ 345,476
Augusta-Richmond County, Georgia,
Coliseum Revenue Authority, RB, ETM,
145,000 6.30%, 2/1/10 ............. 154,524
Canton, Georgia, Multi-Family Housing
Authority, Canterbury Ridge
Apartments Project, RB, FNMA, AMT,
500,000 4.90%, 3/1/08 ............. 490,320
Clarke County, Georgia, Hospital
Authority, RB, MBIA, ETM,
130,000 9.75%, 1/1/02 ............. 134,423
Cobb County, Georgia, Water & Sewer
Revenue, RB, ETM,
200,000 9.50%, 1/1/02 ............. 206,588
Cobb County, Georgia, Kennestone
Hospital Authority, RB, MBIA, ETM,
110,000 10.25%, 2/1/02 ............ 114,423
Crisp County, Georgia, Industrial
Development Authority, Cobis
Products Company, RB, ETM,
109,000 6.30%, 7/1/02 ............. 109,688
Dekalb County, Georgia, Industrial
Development Authority, RB, LOC, AMT,
245,000 5.40%, 11/1/03 ............ 247,678
Fulton County, Georgia, Housing
Authority, Single Family Revenue,
RB, AMT, GNMA,
60,000 6.20%, 3/1/13 ............. 59,489
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Marietta, Georgia, Housing Authority,
Multi-Family Revenue, RB, Series A,
FNMA,3
$7,300,000 4.30%, 5/15/07 ............ $ 7,300,000
-----------
9,162,609
-----------
IDAHO -- 1.22%
Boise City, Idaho, Industrial
Development Corporation, Western
Trailer Company Project, RB,
AMT, LOC,
650,000 4.75%, 12/15/02 ........... 644,156
Idaho Housing Agency, Single Family
Mortgage, RB, Series B-2, AMT,
585,000 6.50%, 7/1/25 ............. 593,091
Idaho Housing & Finance Association,
Single Family Mortgage, RB,
Series G-2, AMT,
100,000 5.75%, 1/1/14 ............. 100,580
Idaho Housing & Finance Association,
Single Family Mortgage, RB,
Sub Series H-2, AMT,
910,000 5.85%, 1/1/14 ............. 922,385
Idaho Falls Electric, RB, ETM,
5,000 8.75%, 4/1/01 ............. 5,081
Idaho State Housing Agency, Single
Family Mortgage, RB, Series C-1,
85,000 7.65%, 7/1/10 ............. 86,176
-----------
2,351,469
-----------
ILLINOIS -- 7.70%
Dupage County, Illinois, Water & Sewer,
RB, MBIA, ETM,
275,000 10.50%, 1/1/02 ............ 285,466
East Saint Louis, Illinois, Dawson
Manor, RB, Series A, MBIA,
235,000 5.875%, 1/1/06 ............ 240,306
Homewood, Illinois, CTFS, GO, MBIA,
20,000 5.70%, 12/1/01 ............ 20,242
Illinois Health Facilities Authority
Revenue, Macneal Memorial Hospital
Association Project, RB,
Pre-Refunded @ 100,4
90,000 6.60%, 8/1/01 ............. 91,350
Illinois Health Facilities Authority
Revenue, Midwest Group Ltd.,
RB, ACA,
3,300,000 5.375%, 11/15/08 .......... 3,325,278
Illinois Health Facilities Authority
Revenue, RB, Pre-Refunded @ 102,4
645,000 9.00%, 10/1/02 ............ 710,526
Illinois Health Facilities Authority
Revenue, RB, Series A, FSA,
918,000 7.60%, 8/15/10 ............ 938,297
See Notes to Financial Statements.
--------------------------------------------------------------------------------
49
<PAGE>
Short-Term Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Illinois Health Facilities Authority,
Evangelical Hospital Association
Project, RB, ETM,
$ 125,000 6.60%, 10/1/03 ............ $ 129,206
Illinois Health Facilities Authority
Revenue, Sydney R. Forkosh Memorial
Hospital, RB, Pre-Refunded @ 100,4
105,000 7.00%, 7/1/02 ............. 108,423
Illinois Health Facilities Revenue
Authority, Community Hospital of
Ottawa Project, RB,
300,000 6.75%, 8/15/14 ............ 304,323
Illinois Health Facilities Revenue
Authority, Ravenswood Hospital
Medical Center Project, RB, ETM,
130,000 7.25%, 8/1/06 ............. 138,749
Illinois Industrial Development
Finance Authority, Rayner &
Rinn-Scott Project, RB, AMT, LOC:
160,000 5.65%, 6/1/03 ............. 161,482
170,000 5.70%, 6/1/04 ............. 172,128
195,000 6.35%, 6/1/15 ............. 199,109
Illinois State Toll Highway Authority, RB,
Pre-Refunded @ 100,4
195,000 6.75%, 7/1/06 ............. 206,825
Onterie Center, Illinois, Housing
Finance Corporation, Onterie Center
Project, RB, MBIA, FHA,
3,000,000 7.00%, 7/1/12 ............. 3,140,910
Palatine County, Illinois, Multi-Family
Housing, Clover Ridge East Apartments,
RB, Mandatory Put @ 100, LOC,2,3
500,000 4.75%, 12/15/02 ........... 494,715
Palatine County, Illinois, Tax Increment
Revenue, Dundee Road Redevelopment
Project, Tax Allocation Bond, AMBAC,
1,500,000 5.25%, 1/1/17 ............. 1,484,430
Pittsburgh, Illinois, Urban
Redevelopment Authority, Hazlewood
Project, RB, MBIA / FHA,
60,000 5.40%, 1/1/22 ............. 56,464
St. Clair County, Illinois, COP, MBIA,
230,000 8.00%, 12/1/01 ............ 238,561
Urbana, Illinois, Residential Mortgage
Revenue, RB, ETM,
2,245,000 7.30%, 9/1/06 ............. 2,374,087
-----------
14,820,877
-----------
INDIANA -- 4.28%
Indiana Health Facility Financing
Authority, Hospital Revenue,
Community Hospital Improvements
Project, RB, MBIA,
5,000,000 6.40%, 5/1/12 ............. 5,192,100
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Indiana State Housing Finance Authority,
Single Family Mortgage Revenue,
Home Mortgage Program, RB, GNMA,
$ 440,000 7.50%, 1/1/16 ............. $ 449,482
La Porte, Indiana, Economic Development
Agency, RB, FGIC, ETM,
45,000 7.375%, 6/1/01 ............ 45,674
Michigan City, Indiana, Pollution Control
Revenue, Northern Indianna Public
Service Co. Project, RB,
2,420,000 5.70%, 10/1/03 ............ 2,428,881
Vigo County, Indiana, Hospital Authority,
RB, ETM,
120,000 6.875%, 4/1/04 ............ 124,370
-----------
8,240,507
-----------
IOWA -- 2.38%
Des Moines, Iowa, Hospital Revenue
Authority, Fairview Community,
Lutheran Hospital, MBIA, ETM,
1,135,000 9.50%, 11/15/02 ........... 1,191,148
Dubuque, Iowa, Hospital Facilities,
Finley Hospital Project, RB, ETM,
2,875,000 6.875%, 1/1/12 ............ 3,005,784
Muscatine, Iowa, Electric Revenue,
RB, ETM,
380,000 6.50%, 1/1/04 ............. 390,876
-----------
4,587,808
-----------
KANSAS -- 0.27%
Saline County, Kansas, Single Family
Mortgage, RB, Series A,
30,000 9.50%, 10/1/11 ............ 30,739
Wichita, Kansas, Hospital Revenue,
RB, ETM:
35,000 6.00%, 7/1/04 ............. 35,725
160,000 7.00%, 3/1/06 ............. 168,893
Wichita, Kansas, Hospital Revenue, Wesley
Medical Center, RB, MBIA, ETM,
275,000 10.00%, 4/1/02 ............ 287,721
-----------
523,078
-----------
KENTUCKY -- 0.60%
Campbell & Kenton Counties, Kentucky,
Sanitation District Revenue Authority,
RB, ETM,
180,000 6.375%, 8/1/03 ............ 184,694
Kentucky State, Pollution Abatement,
Authority Revenue, RB, ETM,
75,000 5.90%, 8/1/03 ............. 76,484
Kentucky Rural Economic Development
Authority, RB, Optional Put on
12/1/04 @ 100, AMT, LOC,2
915,000 6.75%, 12/1/14 ............ 899,244
-----------
1,160,422
-----------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
50
<PAGE>
Short-Term Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
LOUISIANA -- 1.11%
Calcasieu Parish, Louisiana, Mortgage
Revenue Authority, RB, Series B,
$ 50,000 6.375%, 11/1/02 ........... $ 50,320
East Baton Rouge Parish Hospital,
Louisiana, RB, ETM,
40,000 6.20%, 10/1/02 ............ 40,791
Louisiana Public Facilities Revenue
Authority, RB, Series A-1,
1,325,000 6.20%, 3/1/01 ............. 1,332,062
Louisiana State Health Education
Authority, Alton Ochsner Medical
Foundation Issue-A, RB, ETM,
360,000 8.75%, 5/1/05 ............. 391,475
Ouachita Parish, Louisiana, Industrial
Development Board Incorporated,
Physicians & Surgeons Medical,
RB, LOC,
325,000 4.80%, 8/1/02 ............. 324,707
-----------
2,139,355
-----------
MAINE -- 0.88%
Bucksport, Maine, Solid Waste Disposal
Revenue, Champ International
Corporation Project, RB,
395,000 6.25%, 5/1/10 ............. 400,435
Maine Finance Revenue Authority,
Electronic Rate Stabilization, RB,
AMT, FSA,
1,400,000 5.20%, 7/1/18 ............. 1,301,958
-----------
1,702,393
-----------
MARYLAND -- 0.09%
Annapolis, Maryland, Economic
Development, Saint John's College
Facility, RB,
175,000 4.60%, 10/1/02 ............ 174,645
-----------
MASSACHUSETTS -- 3.82%
Massachusetts Educational Loan
Revenue Authority, RB, Series A-Issue
D, MBIA, AMT,
190,000 7.75%, 1/1/08 ............. 192,669
Massachusetts State Housing Finance
Agency, RB, FNMA,
2,000,000 6.875%, 11/15/11 .......... 2,097,980
Massachusetts State Health &
Educational Facilities Authority
Revenue, Deutsches Altenheim, RB,
Pre-Refunded @ 102, FHA,4
840,000 7.70%, 12/30/99 ........... 856,800
Massachusetts State Housing Finance
Agency, Residential Development,
RB, FNMA,
3,000,000 6.80%, 11/15/12 ........... 3,136,830
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Massachusetts State Industrial Finance
Agency, Ames Safety Envelope
Company, RB, AMT, LOC,
$ 110,000 5.91%, 9/1/05 ............. $ 109,989
Massachusetts State Development
Finance Agency, Curry College,
Series A, RB, ACA,
175,000 4.10%, 3/1/04 ............. 168,514
Massachusetts State Health &
Educational Facilities Authority,
Community Health Center, RB,
Series B, Mandatory Put @ 100, LOC,2
800,000 5.50%, 5/15/01 ............ 796,840
-----------
7,359,622
-----------
MICHIGAN -- 2.10%
Detroit, Michigan, Economic
Development Corporation,
Association Limited Partnership, RB,
Mandatory Put @ 100,2
1,305,000 7.00%, 6/1/02 ............. 1,331,009
Detroit, Michigan, Water Supply
System, RB, ETM,
1,095,000 8.875%, 1/1/05 ............ 1,190,024
Kalamazoo, Michigan, Hospital Finance
Authority, RB, ETM,
120,000 7.00%, 7/1/01 ............. 121,678
Lapeer, Michigan, Tax Increment Finance
Authority, Pre-Refunded @ 102,4
500,000 7.50%, 6/1/02 ............. 531,890
Michigan Home Corporation, Single
Family Revenue, Series A,
FNMA / GNMA,
400,000 4.80%, 6/1/19 ............. 397,116
Michigan Municipal Bond Revenue
Authority, Wayne County Project, GO,
ETM, MBIA,
170,000 7.40%, 12/1/02 ............ 175,405
Michigan State Housing Development
Authority, Rental Housing Revenue,
RB, Series A,
200,000 6.00%, 4/1/01 ............. 200,828
Michigan State Building Authority, RB,
Series II, ETM, MBIA,
15,000 7.40%, 4/1/01 ............. 15,128
Michigan State Hospital Finance
Authority, Saint Joseph Mercy Hospital
Project, RB, ETM,
70,000 7.00%, 7/1/05 ............. 73,777
-----------
4,036,855
-----------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
51
<PAGE>
Short-Term Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
MINNESOTA -- 0.90%
Fridley, Minnesota, Communal
Development Revenue, Fridley Bus
Plaza, RB, Mandatory Put @ 100,
AMT, LOC,2
$1,145,000 5.375%, 9/1/01 ............ $ 1,144,427
Minneapolis & St. Paul, Minnesota,
Housing & Redevelopment Authority,
Health One Obligated Group, RB,
Series A, Pre-Refunded @ 100, MBIA,4
300,000 7.40%, 8/15/02 ............ 310,818
St. Paul, Minnesota, Science Museum,
COP, ETM,
215,794 7.50%, 12/15/01 ........... 219,666
St. Paul, Minnesota, Port Authority,
Hospital Revenue, RB, ETM,
55,000 7.75%, 7/1/04 ............. 58,516
-----------
1,733,427
-----------
MISSISSIPPI-- 1.34%
Corinth & Alcorn County, Mississippi,
Magnolia Regional Health Center,
Series A, RB,
1,000,000 4.75%, 10/1/03 ............ 983,840
Gulfport, Mississippi, Hospital Facility
Revenue, Memorial Hospital at
Gulfport, RB, ETM,
240,000 6.25%, 7/1/02 ............. 243,826
Jackson, Mississippi, Housing Authority,
Multi-Family, Arbor Peak Apartment
Project, RB, Mandatory Put @ 100,
AMT, LOC,2
1,000,000 5.05%, 12/1/01 ............ 998,810
Mississippi Higher Educational
Authority, RB, Series B,
350,000 6.10%, 7/1/01 ............. 353,199
-----------
2,579,675
-----------
MISSOURI-- 1.40%
Freeman Hospital, Missouri, RB, ETM,
75,000 6.75%, 8/1/03 ............. 77,557
Joplin, Missouri, Industrial Development,
Hospital Facilities Revenue, Tri State
Osteopathic Hospital Improvements,
RB, Pre-Refunded @102,4
25,000 8.25%, 12/15/01 ........... 26,364
Missouri State Housing Development,
Single Family Mortgage, RB, AMT,
GNMA,
265,000 6.625%, 12/1/17 ........... 270,167
Saint Louis County, Missouri, Single
Family Mortgage, RB, AMBAC,
200,000 9.25%, 10/1/16 ............ 204,330
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Saint Louis, Missouri, Airport Revenue,
RB, ETM,
$ 45,000 12.10%, 7/1/01 ............ $ 47,223
St. Louis, Missouri, Land Clearance
Redevelopment Authority, RB,
Pre-Refunded @ 102,4
2,030,000 7.75%, 1/1/01 ............. 2,077,949
-----------
2,703,590
-----------
MONTANA -- 1.04%
Montana State Higher Education
Assistance, RB, Series C, AMT,
1,965,000 5.95%, 12/1/12 ............ 1,995,438
-----------
NEBRASKA -- 2.53%
Buffalo County, Nebraska, Hospital
Authority, Good Samaritan Hospital
Project, RB, ETM,
5,000 7.40%, 11/1/00 ............ 5,000
Clay County, Nebraska, Industrial
Development Revenue, Hybrids
Cooperative Project, RB, AMT, LOC:
200,000 4.10%, 3/15/01 ............ 199,294
310,000 4.20%, 3/15/02 ............ 305,961
375,000 4.30%, 3/15/03 ............ 367,260
1,000,000 4.75%, 3/15/09 ............ 942,780
Fillmore County, Nebraska, Industrial
Development Revenue, Omalley Grain
Incorporated Project, RB, AMT, LOC:
135,000 3.90%, 12/1/00 ............ 134,899
155,000 4.20%, 12/1/03 ............ 150,476
150,000 4.30%, 12/1/04 ............ 144,636
170,000 4.40%, 12/1/05 ............ 162,217
175,000 4.50%, 12/1/06 ............ 166,134
185,000 4.60%, 12/1/07 ............ 174,979
190,000 4.70%, 12/1/08 ............ 179,255
Nebraska Consumers Public Power
District, Nuclear Facility Revenue, RB,
130,000 5.10%, 1/1/03 ............. 130,048
Nebhelp Incorporated, Nebraska,
Student Loan Program, RB, MBIA, AMT,
1,690,000 5.875%, 6/1/14 ............ 1,732,926
Nebraska State Investment Finance
Authority, Single Family Mortgage,
RB, AMT, GNMA,
70,000 7.50%, 3/15/15 ............ 71,098
-----------
4,866,963
-----------
NEVADA-- 0.04%
Nevada State Housing Division,
Multi-Unit Housing Revenue, RB,
Issue A, AMT, FNMA,
35,000 6.45%, 10/1/04 ............ 36,114
See Notes to Financial Statements.
--------------------------------------------------------------------------------
52
<PAGE>
Short-Term Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Washoe, Nevada, Housing Finance
Corporation, Multi-Family Revenue,
Golden Apartments II, RB, MBIA / FHA,
$ 35,000 6.875%, 7/1/21 ............ $ 35,747
-----------
71,861
-----------
NEW HAMPSHIRE-- 1.28%
New Hampshire Higher Educational &
Health Facilities Revenue Authority,
Elliot Hospital Manchester, RB, ETM,
20,000 6.70%, 10/1/04 ............ 20,746
New Hampshire Higher Educational &
Health Facilities Revenue Authority,
St. Anselm College, RB,
2,205,000 6.375%, 7/1/23 ............ 2,212,232
New Hampshire Housing Finance
Authority, Single Family Housing, RB,
Series B,
40,000 7.55%, 7/1/09 ............. 40,522
New Hampshire State, Housing Finance
Authority, RB, AMT, LOC,
185,000 6.125%, 1/1/18 ............ 185,228
-----------
2,458,728
-----------
NEW JERSEY -- 5.25%
New Jersey Economic Development
Authority, Reformed Church Ministries,
2,220,000 4.95%, 12/1/28 ............ 2,166,431
New Jersey Health Care Facilities,
Financing Authority Revenue Refunding,
RB, Refunded to Variable dates, FHA,
2,000,000 6.80%, 8/1/19 ............. 2,051,360
New Jersey Health Care Facilities,
Muhlenberg REGL-B, RB, MBIA,
850,000 8.00%, 7/1/18 ............. 851,156
New Jersey State Educational Facilities,
Fairleigh Dickinson University, RB,
Series C, ETM,
750,000 7.75%, 7/1/01 ............. 759,285
New Jersey State Housing Finance
Agency, Mortgage Revenue, RB,
Pre-Refunded @ 100, HUD:4
50,000 6.25%, 11/1/00 ............ 50,000
1,000,000 6.375%, 11/1/00 ........... 1,000,000
New Jersey State Turnpike Authority
RB, ETM,
2,695,000 10.375%, 1/1/03 ........... 2,878,152
New Jersey State Turnpike Authority,
RB, ETM, MBIA,
15,000 10.375%, 1/1/03 ........... 15,952
New Jersey State, GO,
340,000 5.00%, 4/30/02 ............ 339,320
-----------
10,111,656
-----------
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
NEW MEXICO -- 2.92%
Albuquerque, New Mexico, Industrial
Development Revenue, MCT
Industries Incorporated Project, RB,
Series A, AMT,
$4,330,000 6.50%, 4/1/17 ............. $ 4,494,973
Albuquerque, New Mexico, CMO,
Class B-2, FGIC,1
1,711,000 0.00%, 5/15/11 ............ 807,678
Clovis, New Mexico, Hospital Revenue,
RB, ETM,
70,000 7.375%, 8/1/03 ............ 73,135
Taos County, New Mexico, Local
Hospital Gross, RB, Series B,
Asset Guaranty,
245,000 5.00%, 5/15/02 ............ 245,037
-----------
5,620,823
-----------
NEW YORK-- 0.88%
Battery Park City, New York,
Revenue Authority, RB, Series B,
620,000 5.20%, 11/1/23 ............ 618,121
New York State Dormitory Authority
Revenues, Capital Appreciation, RB,
Series C, FSA,1
340,000 0.00%, 7/1/04 ............. 279,840
New York State Dormitory Revenue
Authority, FFT Senior Community's
Incorporated, RB, Series B, LOC,
Mandatory Put @ 1002
250,000 5.70%, 5/13/05 ............ 252,475
New York State Housing Finance
Agency, Hospital & Nursing Home
Project, RB, ETM,
65,000 6.875%, 11/1/07 ........... 69,711
Onondaga County, New York, Industrial
Development Agency, Lemoyne
College Project, RB, Series A,
190,000 5.00%, 3/1/03 ............. 189,202
Yates County, New York, Industrial
Development Agency, Soldiers &
Sailors Memorial Hospital, RB,
Series A, FHA,
285,000 5.00%, 2/1/09 ............. 287,086
-----------
1,696,435
-----------
NORTH CAROLINA -- 0.22%
North Carolina Medical Care Community
Hospital, Duke University Hospital
Project, RB, ETM,
280,000 6.70%, 7/1/03 ............. 289,262
See Notes to Financial Statements.
--------------------------------------------------------------------------------
53
<PAGE>
Short-Term Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Surry County, North Carolina, Industrial
Facilities & Pollution Control Financing
Revenue Authority, Weyerhaeuser
Company Project, RB,
$ 135,000 9.25%, 12/1/02 ............ $ 140,688
-----------
429,950
-----------
NORTH DAKOTA -- 0.10%
Minot, North Dakota, Health Care
Facilities, RB, ETM,
175,000 6.50%, 9/1/07 ............. 183,920
-----------
OHIO -- 2.01%
Elyria, Ohio, Hospital Revenue, RB, ETM,
250,000 6.80%, 4/1/03 ............. 256,852
Franklin County, Ohio, Multi-Family
Revenue, Lincoln Park Project, RB,
AMT, GNMA,
435,000 5.65%, 4/20/13 ............ 436,870
Hamilton County, Ohio, Hospital
Facilities, Saint Francis -- Saint
Georges Hospital Inc., RB, ETM,
40,000 7.625%, 2/15/01 ........... 40,321
Lucas County, Ohio, Riverside
Hospital Project, RB, ETM,
30,000 6.95%, 8/1/04 ............. 31,398
Lucas County, Ohio, Mercy Hospital
Project, RB, ETM,
480,000 6.00%, 9/1/04 ............. 491,582
Mason, Ohio, Health Care Facilities,
MCV Health Care Facilities Project,
RB, GNMA,
45,000 5.25%, 2/20/20 ............ 41,848
Middletown, Ohio, Improvement
Revenue, RB, ETM,
20,000 6.375%, 4/1/06 ............ 20,841
Ohio Housing Finance Agency, Single
Family Mortgage, RB, Series A, BIGI,
305,000 5.75%, 4/1/16 ............. 305,000
Ohio State Air Quality Development
Authority, Armco Steel Corporation
Project, RB, ETM,
95,000 7.875%, 11/1/00 ........... 95,000
Ohio State Water Development
Authority, Akron Ohio Project, RB, ETM,
235,000 8.00%, 12/1/04 ............ 250,019
Ohio State Capital Housing Corporation,
Section 8 Assisted, RB, MBIA,
480,000 4.50%, 1/1/03 ............. 475,877
Ohio State Water Development Authority,
Pollution Control Facilities Revenue,
Republic Steel Project, RB, ETM,
65,000 6.375%, 6/1/07 ............ 68,004
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Stark County, Ohio, Hospital Revenue
Authority, RB, ETM,
$1,280,000 6.875%, 12/1/06 ........... $ 1,347,930
-----------
3,861,542
-----------
OKLAHOMA -- 2.40%
Bryan County, Oklahoma, Economic
Development Revenue Authority,
Single Family Mortgage, RB, Series A,
65,000 8.60%, 7/1/10 ............. 66,371
Canadian County, Oklahoma, Home Finance
Authority, Single Family Mortgage
Revenue, Mortgage Backed Securities
Program, RB, Series B, AMT, GNMA,
1,255,000 5.50%, 9/1/14 ............. 1,252,490
Oklahoma Environmental Finance,
Public Service Company of Oklahoma,
RB,
1,000,000 5.90%, 12/1/07 ............ 1,000,670
Oklahoma City, Oklahoma, Hospital,
RB, ETM,
285,000 6.40%, 2/1/05 ............. 294,433
Oklahoma State Industrial Authority
Revenue, Presbyterian Hospital,
RB, ETM,
380,000 6.25%, 10/1/02 ............ 387,847
Oklahoma State Industrial Authority,
Baptist Medical Center, RB, ETM,
190,000 7.00%, 7/1/03 ............. 196,169
Oklahoma State Turnpike Revenue
Authority, RB, ETM,
55,000 4.70%, 1/1/06 ............. 55,136
Ponca City, Oklahoma, Hospital Revenue
Authority, RB, ETM,
170,000 7.625%, 4/1/03 ............ 175,994
Stillwater, Oklahoma, Medical Center
Authority, ETM,
245,000 6.30%, 1/1/04 ............. 251,323
Tulsa, Oklahoma, Industrial Revenue
Authority, Hillcrest Medical Center,
RB, ETM,
415,000 6.50%, 4/1/07 ............. 436,352
Tulsa, Oklahoma, Municipal Airport,
AMT, RB,
500,000 7.60%, 12/1/30 ............ 513,415
-----------
4,630,200
-----------
PENNSYLVANIA-- 13.33%
Allegheny County, Pennsylvania,
Residential Finance Mortgage Revenue
Authority, Single Family Mortgage, RB,
Series DD-2, AMT, GNMA,
135,000 4.80%, 11/1/07 ............ 134,113
See Notes to Financial Statements.
--------------------------------------------------------------------------------
54
<PAGE>
Short-Term Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Allegheny County, Pennsylvania,
Hospital Development Revenue
Authority, North Hills, Passavant
Hospital, RB, ETM,
$ 90,000 6.75%, 7/1/05 ............. $ 94,494
Allegheny County, Pennsylvania, Industrial
Development Authority, Three Parkway
Center East, RB, Optional Put on
12/1/01 @ 100, LOC,3
5,000 5.05%, 12/1/04 ............ 5,000
Allegheny County, Pennsylvania,
Residential Finance Authority, Single
Family Mortgage, RB, Series AA,
AMT, GNMA,
100,000 5.10%, 5/1/01 ............. 100,255
Allegheny Valley School District,
Pennsylvania, GO, ETM,
85,000 6.00%, 12/1/03 ............ 86,663
Athens, Pennsylvania, Area School
Authority, RB, ETM,
60,000 6.25%, 4/1/02 ............. 60,391
Baldwin Whitehall, Pennsylvania,
School Building Revenue Authority,
RB, Pre-Refunded $7,610,000 to
11/15/03 @ 100, Balance ETM,4
50,000 6.70%, 11/15/07 ........... 52,902
Beaver County, Pennsylvania, Hospital
Authority Revenue, Saint Francis
General Hospital, RB, ETM,
50,000 7.75%, 7/15/01 ............ 51,156
Beaver County, Pennsylvania, Industrial
Development & Pollution Control
Revenue Authority, RB,
220,000 6.00%, 5/1/07 ............. 220,220
Bensalem Township, Pennsylvania,
Water & Sewer Authority, RB, ETM,
15,000 5.70%, 11/1/02 ............ 15,160
Blairsville-Saltsburg, Pennsylvania,
School District, GO, ETM, AMBAC,
130,000 9.00%, 5/15/03 ............ 138,945
Bucks County, Pennsylvania, Saint
Mary's Hospital Authority, RB, ETM,
115,000 6.625%, 7/1/04 ............ 119,416
Butler, Pennsylvania, Penn Area School
District, GO, FGIC,
50,000 6.60%, 9/1/02 ............. 50,866
California, Pennsylvania, Area School
Building, MBIA, ETM,
35,000 5.75%, 5/15/03 ............ 35,430
Carbon County, Pennsylvania, GO,
Pre-Refunded @ 100, MBIA,4
25,000 5.00%, 12/15/00 ........... 25,020
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Catasauqua, Pennsylvania, Penn Area
Schools, GO, ETM,
$ 60,000 8.40%, 2/15/01 ............ $ 60,676
Chester County, Pennsylvania, Hospital
Authority, RB, ETM,
15,000 7.50%, 7/1/09 ............. 16,469
Clearfield Hospital Authority,
Pennsylvania, Clearfield Hospital
Project, RB,
285,000 6.875%, 6/1/16 ............ 285,430
Dauphin County, Pennsylvania, General
Authority Sub Series QQQ 2--
Mandatory Put @ 100, RB, AMBAC,2,3
1,015,000 4.625%, 6/2/03 ............ 1,013,376
Dauphin County, Pennsylvania, General
Authority, RB, Mandatory Put @ 100,2,3
200,000 6.40%, 6/3/02 ............. 203,970
Delaware County, Pennsylvania,
Hospital Revenue Authority,
Crozer-Chester Medical Center, RB,
45,000 5.125%, 12/15/00 .......... 44,991
Delaware County, Pennsylvania,
Industrial Development Authority,
Pollution Control Revenue, Peco
Energy Company Project, RB, Series A,
Mandatory Put @ 100,2
1,250,000 5.20%, 10/1/04 ............ 1,245,575
Delaware County, Pennsylvania,
Authority University Revenues,
Villanova University RB, ETM,
65,000 9.625%, 8/1/02 ............ 68,831
East Pennsboro Township, Pennsylvania,
GO, ETM,
90,000 6.00%, 3/1/02 ............. 91,010
Hampton Township, Pennsylvania, GO,
65,000 6.30%, 6/1/02 ............. 65,800
Hazleton, Pennsylvania, Health Services,
Authority Hospital, RB,
Pre-Refunded @ 102,4
2,040,000 8.375%, 1/1/03 ............ 2,225,518
Langhorne Manor Borough, Pennsylvania,
Higher Education & Health Revenue
Authority, Woods Schools, Partially
Pre-Refunded: $600,000 to 11/15/02
@ 100, AMBAC,4
235,000 6.60%, 11/15/10 ........... 240,741
Lehigh County, Pennsylvania, Industrial
Development Authority, RB, ETM,
580,000 7.20%, 12/15/01 ........... 589,616
Ligonier, Pennsylvania, Municipal Water
Revenue Authority, RB,
95,000 6.30%, 4/15/06 ............ 95,094
See Notes to Financial Statements.
--------------------------------------------------------------------------------
55
<PAGE>
Short-Term Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Montour, Pennsylvania, School Authority,
RB, ETM, MBIA,
$ 55,000 6.40%, 12/1/02 ............ $ 55,754
Northampton County, Pennsylvania,
Hospital Authority, RB, ETM,
120,000 7.50%, 7/1/02 ............. 123,616
Northampton County, Pennsylvania,
Industrial Development Authority,
Strawbridge Project, RB, ETM,
45,000 7.20%, 12/15/01 ........... 45,744
Pennsylvania Economic Development
Financing Revenue Authority,
Dr. Gertrude A. Barber Center
Incorporated, RB, Asset Guaranty,
1,000,000 6.15%, 12/1/20 ............ 1,000,010
Pennsylvania Energy Development
Authority, Piney Creek, RB, Series B,
AMT LOC,
15,000 7.20%, 12/1/00 ............ 15,024
Pennsylvania Housing Finance Agency,
Single Family Mortgage, RB,
Series 65A, AMT,
425,000 4.80%, 10/1/22 ............ 419,985
Pennsylvania Housing Finance Agency,
Single Family Mortgage, RB,
Series 1991-32,
175,000 7.15%, 4/1/15 ............. 180,278
Pennsylvania Interboro School District
Authority, RB,
MBIA, ETM,
395,000 6.40%, 9/1/01 ............. 401,636
Pennsylvania Intergovernmental
Corporation Authority, Special Tax
Bond, ETM, FGIC,
110,000 6.00%, 6/15/02 ............ 111,763
Philadephia, Pennsylvania, Municipal
Revenue Authority, RB, Series D,
70,000 6.00%, 7/15/03 ............ 70,582
Pennsylvania State, Higher Education
Facilities Authority, Pennsylvania,
Health Services Revenue, RB, MBIA,
200,000 4.80%, 11/15/00 ........... 200,014
Philadelphia, Pennsylvania, Hospitals &
Higher Education, Saint Agnes
Medical Center Project, RB, ETM,
40,000 6.75%, 8/15/01 ............ 40,077
Philadelphia, Pennsylvania, Authority for
Industrial Development Revenues,
Mandatory Put @ 100 LOC,2
1,200,000 5.00%, 12/1/01 ............ 1,192,968
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Philadelphia, Pennsylvania, Hospital &
Higher Educational Facilities Authority,
Temple University Hospital, RB,
Series A,
$ 215,000 6.00%, 11/15/00 ........... $ 215,043
Philadelphia, Pennsylvania, Hospitals &
Higher Educational Facilities Authority,
Philadelphia Manager Project, RB,
590,000 5.50%, 8/1/01 ............. 591,540
Pittsburgh, Pennsylvania, Water &
Sewer Authority, RB, ETM, FGIC,
215,000 7.625%, 9/1/04 ............ 232,299
Pittsburgh, Pennsylvania, Urban
Redevelopment Authority, Oliver
Garage Project, RB, FGIC, LOC,
90,000 4.40%, 6/1/01 ............. 89,939
Pocono Mountain, Pennsylvania,
School District, GO, MBIA, ETM,
15,000 9.10%, 3/1/02 ............. 15,578
Radnor Township, Pennsylvania, School
Revenue Authority, RB, ETM,
5,000 5.85%, 10/15/01 ........... 5,061
Ridgway, Pennsylvania, Area School
Revenue Authority, RB, ETM,
25,000 6.25%, 6/15/02 ............ 25,383
Sayre Boro, Pennsylvania, Hospital
Authority, RB, AMBAC, ETM,
160,000 6.90%, 11/1/02 ............ 163,658
Sayre, Pennsylvania, Health Care
Facilities Authority, Capital Asset
Finance Program, RB, Series H-2,
AMBAC,
900,000 7.625%, 12/1/15 ........... 920,025
Scranton Lackawanna, Pennsylvania,
Moses Taylor Hospital Project, RB,
Series A, ETM,
35,000 8.25%, 7/1/01 ............. 35,790
Somerset County, Pennsylvania, General
Authority, Commonwealth Lease
Revenue, RB, Pre-Refunded @ 100,
FGIC,4
2,000,000 6.60%, 10/15/01 ........... 2,042,140
Southeastern Pennsylvania, Area
Schools, RB, Series A,
25,000 5.00%, 4/1/01 ............. 25,011
Pennsylvania State Finance Authority,
Capital Improvements Program,
Investment Agreement RB,
1,825,000 6.60%, 11/1/09 ............ 1,944,793
Pennsylvania State Higher Education
Assistance, RB, FGIC, Series AC,
25,000 6.80%, 12/1/00 ............ 25,039
See Notes to Financial Statements.
--------------------------------------------------------------------------------
56
<PAGE>
Short-Term Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Pennsylvania State Higher Education
Facilities Authority, Health Services
Revenue, Allegheny Delaware Valley
Obligation, RB, MBIA,
$3,000,000 4.90%, 11/15/01 ........... $ 3,009,720
Stroudsburg Area, Pennsylvania School
District, GO, FGIC, ETM,
5,000 8.40%, 9/1/01 ............. 5,147
Uniontown Area, Pennsylvania School
Authority, RB, ETM,
85,000 6.30%, 10/1/02 ............ 86,806
Valley View School Building Authority,
Pennsylvania, RB, ETM:
20,000 6.05%, 2/1/02 ............. 20,205
15,000 6.25%, 2/1/02 ............. 15,181
Washington County, Pennsylvania,
Hospital Revenue Authority, Canonsburg,
General Hospital Project, RB,
Pre-Refunded @ 102,4
100,000 7.35%, 6/1/03 ............. 107,196
Wayne Pike, Pennsylvania, Joint School
Authority, RB, MBIA, ETM,
590,000 6.00%, 12/1/07 ............ 600,567
Wilkes-Barre, Pennsylvania, General
Municipal Authority, Misericordia
College, RB, Series B,
1,260,000 7.75%, 12/1/12 ............ 1,330,736
Williamsport Area, Pennsylvania, Joint
School Authority, RB, MBIA, ETM,
115,000 6.00%, 3/1/07 ............. 118,884
York County, Pennsylvania, Industrial
Development Authority, Fox Ridge
Personal Care Facility, RB, Series A,
Pre-Refunded @ 100,4
110,000 9.50%, 10/1/02 ............ 119,510
Yough School District, Pennsylvania,
Limited Obligation Revenue, RB,
Series A, Asset Guaranty:
1,270,000 5.10%, 4/1/01 ............. 1,273,277
1,335,000 5.20%, 4/1/02 ............. 1,345,814
-----------
25,658,921
-----------
RHODE ISLAND-- 0.03%
Rhode Island Housing & Mortgage,
Finance Corporation, RB, Series 2,
50,000 7.15%, 10/1/01 ............ 50,980
-----------
SOUTH CAROLINA -- 0.84%
Charleston, South Carolina, Waterworks
& Sewer Revenue, RB, ETM,
40,000 10.125%, 1/1/02 ........... 41,460
Fairfield County, South Carolina,
Pollution Control Revenue, South
Carolina Electric & Gas Company, RB,
50,000 6.50%, 9/1/14 ............. 52,703
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
South Carolina Medical University
Harborview Office, COP,
$ 500,000 7.375%, 1/1/04 ............ $ 517,135
Western Carolina, South Carolina,
Region Sewer Authority, Sewer
Systems Revenue, RB, AMBAC,
990,000 7.00%, 3/1/02 ............. 1,011,770
-----------
1,623,068
-----------
SOUTH DAKOTA -- 0.18%
South Dakota Housing Development
Authority, Home Ownership Mortgage,
RB, Series E,
50,000 5.60%, 5/1/01 ............. 50,239
South Dakota State Health &
Educational Facilities Authority, Rapid
City Regional Hospital Project, RB, ETM,
85,000 7.75%, 9/1/07 ............. 93,322
South Dakota State Health &
Educational Facilities Authority, Saint
Joseph Hospital, RB, ETM,
200,000 5.95%, 7/1/02 ............. 202,858
-----------
346,419
-----------
TENNESSEE -- 0.78%
Bristol, Tennessee, Health & Educational
Facilities, RB, ETM,
215,000 6.90%, 1/1/07 ............. 227,384
Fayetteville & Lincoln County, Tennessee,
Industrial Development Board, Franke
Incorporated Project, RB, AMT, LOC,
380,000 5.00%, 6/1/01 ............. 380,771
Nashville & Davidson County, Tennessee,
Industrial Development Board Revenue,
Pebble Creek, RB, FHA,
85,000 6.25%, 7/1/02 ............. 86,021
Nashville & Davidson County, Tennessee,
Industrial Development Board Revenue,
Multi-Family Mortgage, RB, FHA,
160,000 6.25%, 7/1/02 ............. 161,718
Shelby County, Tennessee, Health &
Educational Authority, Multi-Family
Housing, Windsor Apartments, RB,
Asset Guaranty:
430,000 6.00%, 10/1/02 ............ 434,614
100,000 6.50%, 10/1/07 ............ 103,778
Tennessee Housing Development Agency,
Homeownership Program, AMT, RB,
100,000 7.375%, 7/1/23 ............ 101,455
-----------
1,495,741
-----------
TEXAS -- 7.00%
Austin, Texas, Water Sewer & Electric
Revenue, RB, ETM,
385,000 14.00%, 11/15/01 .......... 404,242
See Notes to Financial Statements.
--------------------------------------------------------------------------------
57
<PAGE>
Short-Term Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Austin, Texas, Water Sewer & Electric
Revenue, RB,
$1,030,000 14.00%, 11/15/01 .......... $ 1,078,338
Collin County, Texas, Community College,
RB, AMBAC,
25,000 5.15%, 2/1/07 ............. 25,231
Fort Worth, Texas, Housing Financial
Services Program, Single Family
Mortgage, RB, Series A, AMT, GNMA,
30,000 7.90%, 6/1/01 ............. 30,197
Gulf Coast Waste Disposal Authority,
Texas, Champion International
Corporation, RB, AMT,
7,000,000 6.875%, 12/1/28 ........... 7,147,910
Gulf Coast Waste Disposal Authority,
Texas, Pollution Control Revenue,
Atlantic Richfield Company Project,
RB, Pre-Refunded @ 100,4
275,000 6.50%, 8/1/03 ............. 284,592
Harris County, Texas, Health Facilities
Development Corporation, Memorial
Hospital System Project, RB,
Pre-Refunded to Various Dates,
100,000 7.125%, 6/1/15 ............ 105,622
Houston, Texas, Housing Finance
Corporation, Single Family Housing,
RB, Series A-1,
205,000 8.00%, 6/1/14 ............. 218,756
Lewisville, Texas, Independent School
District, GO, PSF,
50,000 7.15%, 8/15/02 ............ 51,007
Matagorda County, Texas, Port of Bay
City Authority, Hoechst Celanese
Corporation Project, RB, AMT,
1,250,000 6.50%, 5/1/26 ............. 1,240,775
Panhandle-Plains, Texas, Higher
Education Authority, Student Loan
Revenue, RB, AMT,
415,000 5.55%, 3/1/05 ............. 420,698
Sabine River Authority, Texas, RB,
Series A,
500,000 6.875%, 9/1/08 ............ 506,805
Southeast Housing Finance Corporation,
Texas, Capital Appreciation,
Pre-Refunded @ 36.127 RB,
Series B,1,4
1,100,000 0.00%, 12/1/02 ............ 360,382
Texas Water Residential Finance
Authority, RB, AMBAC:
1,250,000 4.70%, 8/15/09 ............ 1,235,575
45,000 4.80%, 8/15/10 ............ 44,712
Texas State, Veterans Housing
Assistance, GO, Series C,
75,000 6.25%, 12/1/15 ............ 75,070
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Texoma, Texas, Housing Finance
Corporation, Single Family Mortgage,
RB, AMT, FNMA / GNMA,
$ 25,000 5.05%, 9/1/07 ............. $ 25,010
Washington County, Texas, Health
Facilities Development Corporation,
Trinity Community Medical Center
Project, RB, ACA,
225,000 4.50%, 6/1/01 ............. 224,568
-----------
13,479,490
-----------
UTAH -- 0.24%
Ogden City, Utah, Housing Finance
Corporation, Section 8 Assisted
Project, RB, Series A, FNMA,
225,000 5.50%, 7/1/05 ............. 224,881
Salt Lake City, Utah, Industrial
Development, Hermes Associates
Project, RB, LOC,
185,000 5.90%, 9/1/02 ............. 186,835
Uintah County, Utah, Pollution Control
Revenue, National Rural Utility,
RB, Pre-Refunded @ 100,4
45,000 10.50%, 6/15/01 ........... 46,611
-----------
458,327
-----------
VIRGINIA -- 0.94%
Henrico County, Virginia, Industrial
Development Revenue Authority,
Optional Put on 3/1/02 @ 100, RB,
AMT, LOC,
1,510,000 4.10%, 3/1/16 ............. 1,476,856
Virginia State Housing Development
Authority, Multi-Family Mortgage,
RB, Series A,
55,000 6.125%, 11/1/09 ........... 55,085
Virginia State, Water & Sewer Systems
Revenue, RB, Series B,
275,000 8.70%, 11/1/11 ............ 280,580
-----------
1,812,521
-----------
WASHINGTON -- 4.05%
Seattle, Washington, Housing Authority,
Low Income Housing Assitance
Revenue, Foss Home Project, RB,3
1,095,000 4.40%, 12/1/24 ............ 1,095,000
Washington State Housing Finance
Authority, Nonprofit Housing Revenue,
Taxable RB, Series B, ACA,
1,610,000 6.50%, 7/1/08 ............. 1,569,975
Washington State Housing Finance
Commission, Multi-Family Housing,
Summit Apartments Project, Mandatory
Put @ 100, AMT, RB, Series A, LOC,2,3
165,000 4.90%, 7/1/08 ............. 161,076
See Notes to Financial Statements.
--------------------------------------------------------------------------------
58
<PAGE>
Short-Term Municipal Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Washington State Housing Finance,
Community Nonprofit Revenue, St.
Vincent DePaul Project, RB, LOC,3
$4,450,000 4.45%, 2/1/30 ............. $ 4,450,000
Washington County, Washington,
Health Facilities Development
Corporation, Trinity Community
Medical Center, RB, ACA,
320,000 4.60%, 6/1/02 ............. 317,421
Washington State, Washington, Public
Power Supply, Systems Nuclear
Project, Revenue Refunding, RB,
Series B,
200,000 7.375%, 7/1/04 ............ 204,816
-----------
7,798,288
-----------
WEST VIRGINIA-- 0.98%
Randolph County, West Virginia,
Building Community Hospital
Revenue, Davis Memorial Hospital
Project, RB, Pre-Refunded @ 102,4
465,000 7.65%, 11/1/01 ............ 485,702
West Virginia State Board of Regents,
RB, ETM,
495,000 6.00%, 4/1/04 ............. 504,172
Wheeling, West Virginia, Parking
Revenue, RB, ETM,
65,000 7.125%, 3/1/02 ............ 66,327
Wood County, West Virginia, Building
Community, Saint Joseph's Hospital
Parkersburg, RB, AMBAC, ETM,
800,000 6.625%, 1/1/06 ............ 832,480
-----------
1,888,681
-----------
WISCONSIN -- 0.05%
New London, Wisconsin, Sewer
Systems, Waterworks & Electric
Systems Mortgage Revenue, RB,
Pre-Refunded @ 103,4
100,000 7.80%, 12/1/00 ............ 103,259
-----------
WYOMING-- 0.32%
Green River-Sweetwater County,
Wyoming, Joint Powers Revenue
Board, RB, Series B, FSA,
565,000 4.50%, 3/1/14 ............. 563,288
Wyoming State Community Development
Authority, Single Family Mortgage,
RB, Series B, AMT,
45,000 8.00%, 6/1/08 ............. 45,714
-----------
609,002
-----------
TOTAL MUNICIPAL BONDS
(Cost $182,422,069) .................. 182,200,290
-----------
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
TAX-EXEMPT
ASSET-BACKED SECURITY -- 0.17%
FHA Insured Trust, Series 1996-1,
Class A-1,
$ 334,894 6.10%, 11/1/06
(Cost $334,894) ........... $ 337,660
-----------
CASH EQUIVALENT -- 3.19%
6,142,913 Provident Institutional
Municipal Cash Fund ....... 6,142,913
-----------
TOTAL INVESTMENTS
(Cost $188,899,876) .......... 97.99% 188,680,863
OTHER ASSETS IN EXCESS
OF LIABILITIES ............... 2.01 3,868,148
------ -----------
NET ASSETS ...................... 100.00% $192,549,011
====== ===========
--------------------------------------------------------------------------------
1 Zero Coupon Security.
2 Mandatory Put/Tender Security. The mandatory put/tender date is shown as the
maturity date on the Schedule of Investments.
3 Variable Rate Security. The rate reported on the Schedule of Investments is
the rate in effect as of October 31, 2000.
4 Pre-Refunded Security. The pre-refunded date is shown as the maturity date on
the Schedule of Investments.
Abbreviations
AMT -- Income from security may be subject to alternative minimum tax.
CMO -- Collaterized Mortgage Obligation
COP -- Certificate of Participation
ETM -- Escrowed to Maturity
GO -- General Obligation
LOC -- Securities are held in connection with a letter of credit by a major
commercial bank.
RB -- Revenue Bond
The following organizations have provided underlying credit support for the
securities as defined in the Schedule of Investments.
ACA -- American Capital Access
AMBAC -- American Municipal Bond Assurance Corporation
Asset Guaranty -- Asset Guaranty
BIGI -- Bond Investors Guaranty Insurance
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
HUD -- Housing & Urban Development
MBIA -- Municipal Bond Investors Assurance
See Notes to Financial Statements.
--------------------------------------------------------------------------------
59
<PAGE>
Fixed Income
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
ASSET-BACKED SECURITIES -- 15.50%
Aames Mortgage Trust, Series 1998-C,
Class A4F,
$8,120,000 6.268%, 1/15/27 .......... $ 7,903,905
Access Financial Manufacturing Housing
Contract Trust, Series 1995-1, Class A3,
607,000 7.10%, 5/15/21 ........... 604,821
Americredit Automobile Receivables
Trust, Series 1999-B, Class A4,
19,706,000 5.96%, 3/12/06 ........... 19,465,981
Capital Auto Receivables Trust, Series
2000-1, Class A5,
3,371,000 7.07%, 9/15/05 ........... 3,403,530
CNH Equipment Trust, Series 2000-A,
Class A4,
771,000 7.34%, 2/15/07 ........... 780,799
Comed Transitional Funding Trust,
Series 1998-1, Class A6,
12,918,000 5.63%, 6/25/09 ........... 12,148,087
Copelco Capital Funding Corp.,
Series 2000-A, Class A4,
4,343,000 7.22%, 8/18/05 ........... 4,383,439
Copelco Capital Funding, Series 1999-B,
Class A4,
2,534,000 6.90%, 12/18/04 .......... 2,539,879
Ford Credit Auto Owner Trust,
Series 2000-F, Class A2,
2,740,000 6.56%, 5/17/04 ........... 2,745,138
Green Tree Home Improvement Loan
Trust, Series 1998-D, Class HIB1,
7,505,000 7.70%, 6/15/29 ........... 7,304,842
Green Tree Home Improvement Loan
Trust, Series 1998-E, Class HIB1,
3,560,000 7.79%, 2/15/15 ........... 3,508,097
Green Tree Home Improvement Loan
Trust, Series 1999-E, Class B1,
5,938,000 10.34%, 3/15/15 .......... 5,992,333
Heller Equipment Asset Receivables
Trust, Series 1999-2, Class A4,
488,000 6.79%, 3/14/07 ........... 487,444
Household Automotive Trust,
Series 2000-1 Class A4,
6,370,000 7.48%, 12/18/06 .......... 6,501,349
Household Automotive Trust,
Series 2000-2, Class A4,
7,825,000 7.43%, 4/17/07 ........... 7,993,316
MBNA Master Credit Card Trust,
Series 1999-B, Class A,
4,818,000 5.90%, 8/15/11 ........... 4,511,623
Nissan Auto Receivables Owner Trust,
Series 2000-A, Class A4,
5,520,000 7.17%, 8/16/04 ........... 5,583,314
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Residential Asset Securities, REMIC,
Series 1998-KS2, Class AI3,
$ 537,517 6.24%, 2/25/17 ........... $ 534,109
Residential Asset Securities, REMIC,
Series 2000-Ks1, Class AI6,
1,985,000 7.905%, 2/25/31 .......... 2,049,076
Ryder Vehicle Lease Trust,
Series 1999-A,
Class A5,
7,791,000 7.13%, 10/15/06 .......... 7,792,324
Southern Pacific Secured Assets,
Series 1997-4, Class A4,
7,955,817 6.63%, 11/25/25 .......... 7,883,260
The Money Store Home Equity Trust,
Series 1997-A, Class A9,
7,901,767 7.235%, 5/15/28 .......... 7,894,339
UCFC Home Equity Loan, Series 1994-D1,
Class A4,
217,600 8.775%, 2/10/16 .......... 217,228
Vanderbilt Mortgage Finance
Series 2000-C, Class A3,
4,426,000 7.55%, 7/7/17 ............ 4,468,418
-----------
TOTAL ASSET-BACKED SECURITIES
(Cost $125,802,131) ................. 126,696,651
-----------
CORPORATE OBLIGATIONS -- 33.34%
Air 2 US, 144A,
24,548,613 8.027%, 10/1/19 .......... 24,832,395
American United Life Insurance, 144A,
6,172,000 7.75%, 3/30/26 ........... 5,342,384
America West Airlines,
14,963,856 7.93%, 1/2/19 ............ 15,086,559
Archstone Community Trust,
20,095,000 7.20%, 4/15/03 ........... 19,963,880
Barclays Bank Plc 144A,
5,211,000 8.55%, 6/15/49 ........... 5,242,688
Cleveland Electric Illuminating,
7,587,000 7.43%, 11/1/09 ........... 7,434,744
Colonial Realty, LP,
5,262,000 7.93%, 8/9/02 ............ 5,240,878
Columbus Southern Power, MTN,
12,008,000 6.55%, 6/26/08 ........... 11,356,170
Dynex Capital,
2,317,000 7.875%, 7/15/02 .......... 2,105,991
Eastern Energy, 144A,
8,060,000 6.75%, 12/1/06 ........... 7,862,957
Erac USA Finance Co., 144A,
700,000 6.625%, 2/15/05 .......... 670,357
Farmers Insurance Exchange, 144A,
7,570,000 8.625%, 5/1/24 ........... 7,427,525
First American Financial,
4,753,000 7.55%, 4/1/28 ............ 3,624,662
See Notes to Financial Statements.
--------------------------------------------------------------------------------
60
<PAGE>
Fixed Income
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Ford Motor Credit,
$8,491,000 6.70%, 7/16/04 ........... $ 8,290,400
HSBC America Capital Trust, 144A,
7,439,000 7.808%, 12/15/26 ......... 6,474,504
HSBC USA, Inc.,
566,000 7.00%, 11/1/06 ........... 557,972
International Paper Co., 144A,
8,809,000 8.125%, 7/8/05 ........... 9,015,941
Jackson National Life Insurance, 144A,
4,749,000 8.15%, 3/15/27 ........... 4,542,841
Liberty Mutual Insurance Co. 144A,
303,000 7.697%, 10/15/97 ......... 219,891
Lumbermens Mutual Casualty, 144A,
3,025,000 8.45%, 12/1/97 ........... 2,373,838
National Australia Bank,
9,666,000 8.60%, 5/19/10 ........... 10,280,120
Norwest Corp., MTN,
2,808,000 6.875%, 8/8/06 ........... 2,760,522
Ohio National Life Insurance, 144A,
3,055,000 8.50%, 5/15/26 ........... 2,942,475
Paine Webber Group, Inc.,
8,614,000 7.30%, 10/15/03 .......... 8,699,020
Pemex Finance Ltd.:
5,460,000 8.02%, 5/15/07 ........... 5,374,496
16,929,000 6.55%, 2/15/08 ........... 16,427,394
Petroleos Mexicanos, Series P,
5,420,000 9.50%, 9/15/27 ........... 5,474,200
PP&L Capital Funding, Inc.
Series MBIA,
21,001,000 6.79%, 11/22/04 .......... 20,402,997
Puget Sound Energy,
599,000 6.74%, 6/15/18 ........... 542,821
Republic New York Corp.,
4,122,000 7.53%, 12/4/26 ........... 3,528,321
Security Benefit Life, 144A,
934,000 8.75%, 5/15/16 ........... 905,831
Security Capital Industrial:
7,525,000 8.72%, 3/1/09 ............ 7,560,894
8,521,000 7.625%, 7/1/17 ........... 7,679,372
Telefonica Europe BV,
10,827,000 7.75%, 9/15/10 ........... 10,876,815
UBS Preferred Funding Trust I,
9,445,000 8.622%, 10/1/10 .......... 9,544,446
Union Center Life, 144A,
1,845,000 8.20%, 11/1/26 ........... 1,636,570
United Mexican States,
5,285,000 9.875%, 1/15/07 .......... 5,477,903
Washington Mutual Financial,
4,590,000 8.25%, 6/15/05 ........... 4,755,906
-----------
TOTAL CORPORATE OBLIGATIONS
(Cost $277,944,779) ................. 272,536,680
-----------
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
MORTGAGE-BACKED SECURITIES-- 9.60%
Associates Manufactured Housing,
Series 1997-2, Class A5,
$8,230,000 6.675%, 3/15/28 ........... $ 8,154,202
Chase Mortgage Finance, REMIC,
Series 1994-B, Class A1,
336,600 6.75%, 2/25/25 ............ 333,513
Conseco Finance Securitizations
Corporation, Series 1999-6, Class B1,
2,608,000 9.20%, 6/1/30 ............. 2,490,379
GE Capital Mortgage Services, CMO,
Series 1999-18, Class A12,
15,116,000 7.00%, 9/25/29 ............ 14,492,767
GE Capital Mortgage Services, Inc.,
CMO, Series 1999-14, Class A8,
4,413,000 6.50%, 8/25/29 ............ 3,822,364
General Electric Capital Mortgage
Services, REMIC, Series 1994-10,
Class A10,
2,095,650 6.50%, 3/25/24 ............ 2,005,872
Green Tree Financial Corp.,
Series 1999-2, Class B1,
1,641,000 8.41%, 12/1/30 ............ 1,519,074
Green Tree Financial, Series 1994-6,
Class A5,
2,908,867 8.25%, 1/15/20 ............ 2,923,411
Green Tree Financial, Series 1996-2,
Class A4,
5,348,000 7.20%, 4/15/27 ............ 5,336,074
Green Tree Financial, Series 1996-5,
Class A5,
3,393,671 7.45%, 7/15/27 ............ 3,410,266
Green Tree Financial, Series 1997-6,
Class B1,
2,292,000 7.17%, 1/15/29 ............ 2,073,435
Green Tree Financial, Series 1998-4,
Class B1,
8,669,000 7.26%, 2/1/30 ............. 7,806,521
Merrill Lynch Mortgage Investors,
Series 1990-C, Class B, 144A,
6,600,405 9.70%, 6/15/10 ............ 6,711,787
Merrill Lynch Mortgage Investors,
Series 1995-C1, Class A,
616,417 7.07%, 5/25/15 ............ 613,272
NYC Mortgage Loan Trust, Series 1996,
Class A3, 144A,
7,065,000 6.75%, 9/25/19 ............ 6,462,053
Oakwood Mortgage Investors,
Series 1996-B, Class A3,
801,271 7.10%, 10/15/26 ........... 799,308
Oakwood Mortgage Investors,
Series 1999-E, Class M2,
2,772,000 8.40%, 3/15/30 ............ 2,675,645
Oakwood Mortgage Investors,
Series 2000-A, Class M1,
1,501,000 8.30%, 4/15/30 ............ 1,506,539
See Notes to Financial Statements.
--------------------------------------------------------------------------------
61
<PAGE>
Fixed Income
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Oakwood Mortgage Investors,
Series 2000-A, Class M2,
$2,138,000 8.25%, 4/15/30 ............ $ 2,041,704
Prudential Home Mortgage Securities,
CMO, Series 1993-27, Class A3,
179,996 7.50%, 7/25/23 ............ 179,114
Prudential Home Mortgage Securities,
REMIC, Series 1994-12, Class A7,
3,054,000 6.05%, 4/25/24 ............ 2,596,389
Residential Funding, CMO,
Series 1995-S15, Class A2,
518,029 7.00%, 10/25/10 ........... 515,082
-----------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $79,383,019) ................... 78,468,771
-----------
TAXABLE MUNICIPAL BONDS-- 8.58%
Allegheny County, Pennsylvania,
Residential Finance Authority, RB,
FHA,1
5,485,000 0.00%, 8/1/28 ............. 624,303
Arkansas State, Financial Development
Authority, CMO, Series A, Class 4, FSA,1
410,000 0.00%, 7/10/14 ............ 139,888
Atlanta, Georgia, Urban Residential
Finance Authority, RB, FNMA,1
3,735,000 0.00%, 10/1/16 ............ 1,041,393
Atlanta, Georgia, Urban Residential
Finance Authority,1
929,123 0.00%, 4/1/22 ............. 926,205
Baltimore, Maryland, Public
Improvements, Series B, GO, FGIC,
1,535,000 8.70%, 10/15/15 ........... 1,637,200
Belmont, California, Redevelopment
Agency, Tax Allocation Bond, MBIA,
735,000 7.55%, 8/1/11 ............. 741,527
Berwyn, Illinois, GO, AMBAC,
1,235,000 5.375%, 11/15/10 .......... 1,251,673
BFC Finance, Series 1996-A,
6,500,000 7.375%, 12/1/17 ........... 6,388,655
California State, Housing Finance
Agency, Single Family Mortgage,
Issue A-1, RB, AMBAC,
3,510,000 7.90%, 8/1/07 ............. 3,544,714
California State, Housing Finance
Authority, Single Family Mortgage,
Mezzanine-Issue A-1, RB, AMBAC/FHA,
1,240,000 8.24%, 8/1/14 ............. 1,275,836
Cameron County, Texas, Housing Finance
Corp., RB, Series A, Class 1B, FGIC,
483,444 10.21%, 9/1/10 ............ 484,179
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Cameron County, Texas, Housing Finance
Corp., Series A, Class 1C, FGIC,
$ 775,000 10.45%, 9/1/11 ............ $ 809,813
Chattahoochee Valley, Alabama, Water
Supply, RB, Asset Guaranty,
165,000 8.60%, 10/1/07 ............ 175,712
Connecticut State, Health & Education
Authority, Sheriden Woods Center
Project, RB:
1,440,000 7.95%, 11/1/05 ............ 1,473,437
945,000 8.73%, 11/1/17 ............ 1,025,297
Contra Costa County, California, Multi-
Family Housing Revenue, Willow Pass
Apartments, RB, Series D-T, FNMA,
1,955,000 6.80%, 12/1/15 ............ 1,864,484
Dade County, Florida, Aviation Revenue,
RB, Series C, AMBAC,
760,000 8.65%, 10/1/03 ............ 796,769
Fulton, Missouri, GO, MBIA,
765,000 7.50%, 7/1/07 ............. 778,801
Harrisburg, Pennsylvania, Resource
Recovery Authority, RB, Series B, ETM,
265,000 6.875%, 9/1/03 ............ 264,788
Idaho State, Sand Creek Associates Ltd.
Partnership, Multi-Family Housing
Revenue, RB, Hud Section 8,
3,385,000 8.25%, 12/1/18 ............ 3,259,857
Idaho State, Water Reserves Board,
Fall River Rural Electric,
5,135,000 9.50%, 4/1/13 ............. 5,550,370
Kanawha & Putnam County, West
Virginia, RB, AMBAC,1
1,080,000 0.00%, 12/1/16 ............ 357,037
Lake Mills, Iowa, Investors Ltd., RB,
Series 1995, 144A:
280,000 7.60%, 11/1/00 ............ 280,000
360,000 7.60%, 11/1/01 ............ 360,169
385,000 7.75%, 11/1/02 ............ 386,263
410,000 7.85%, 11/1/03 ............ 412,157
410,000 7.85%, 11/1/04 ............ 411,246
450,000 7.90%, 11/1/05 ............ 450,891
590,000 8.00%, 11/1/06 ............ 590,679
610,000 8.00%, 11/1/07 ............ 606,224
Long Beach, California, RB, Series A,
4,185,000 9.50%, 1/1/23 ............. 4,241,665
Manatee County, Florida, Housing
Finance Authority, RB, GNMA,
605,000 7.30%, 11/1/12 ............ 605,182
Mississippi State, Residual Home
Corp., RB, FHA,1
1,915,000 0.00%, 12/1/12 ............ 805,219
See Notes to Financial Statements.
--------------------------------------------------------------------------------
62
<PAGE>
Fixed Income
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Mississippi State, Single Family Home
Corp., RB, Series D, Class 3,
GNMA/FNMA,
$2,127,892 7.75%, 7/1/24 ............. $ 2,170,237
New Mexico State, Mortgage Finance
Authority, Single Family Mortgage
Program, RB, GNMA/FNMA/FHLMC,
2,645,000 7.43%, 7/1/29 ............. 2,672,111
New Orleans, Louisiana, Home
Mortgage Authority, Single Family
Mortgage, RB, Series A, MBIA,1
1,265,000 0.00%, 10/1/15 ............ 329,406
New York City, New York, GO,
Pre-Refunded @ 102,1,2
195,000 0.00%, 11/15/13 ........... 186,077
New York City, New York, GO, Series F,
Pre-Refunded @ 102,2
470,000 10.50%, 11/15/12 .......... 495,408
New York City, New York, Industrial
Development Agency, Civic Facilities
Revenue, RB, Series B, MBIA,
1,060,000 8.10%, 9/1/06 ............. 1,093,772
New York State, Housing Finance Agency,
Multi-Family Housing, RB, FHA,
2,435,000 8.11%, 11/15/38 ........... 2,490,445
North Miami, Florida, Pension Funding
Project, RB, FSA:
210,000 6.85%, 7/1/05 ............. 209,395
135,000 7.00%, 1/1/08 ............. 134,159
Oklahoma City, Oklahoma, Airport
Trust, RB, 17th Series,
820,000 8.30%, 10/1/12 ............ 842,566
Oklahoma City, Oklahoma, Airport Trusts,
Federal Bureau Prisons Project, RB,
2,174,000 9.80%, 11/1/14 ............ 2,531,471
Oklahoma County, Oklahoma, Single
Family Home Finance Authority, RB,
Series B,1
2,830,000 0.00%, 7/1/12 ............. 954,248
Panhandle, Texas, Regional Housing
Finance Corp., Single Family
Mortgage Revenue, RB,1
895,000 0.00%, 10/1/11 ............ 351,762
Pima & Maricopa Counties, Arizona,
Industrial Development Authority,
Bulk Sale Program, RB, FNMA,
360,000 6.50%, 1/1/06 ............. 357,638
Sedwick & Shawnee Counties, Kansas,
Single Family Revenue, Mortgage
Backed Second Program, RB,
Series A-3, GNMA:
2,645,000 6.52%, 12/1/12 ............ 2,643,307
4,365,000 8.375%, 6/1/18 ............ 4,503,414
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Southwestern Illinois, Development
Authority, Solid Waste Disposal,
RB, 144A,
$ 445,000 6.90%, 2/1/03 ............. $ 442,864
Southwestern Illinois, Developmental
Sports Authority, Gateway
International Motorsports, RB, 144A:
1,844,000 9.20%, 2/1/13 ............. 2,059,269
1,639,000 9.25%, 2/1/17 ............. 1,859,724
Tarrant County, Texas, Housing Finance
Corp., RB, MBIA,
180,000 6.65%, 7/15/16 ............ 179,951
Utah State, Housing Finance Agency,
Single Family Mortgage, Series D-1,
RB, FHA,
75,000 9.85%, 7/1/10 ............. 75,311
-----------
TOTAL TAXABLE MUNICIPAL BONDS
(Cost $69,947,981) ................... 70,144,168
-----------
US GOVERNMENT MORTGAGE BACKED
OBLIGATIONS -- 16.94%
Federal Home Loan Mortgage
Corp., Gold, Pool E81548,
4,501,000 7.00%, 2/1/09 ............. 4,506,473
Federal Home Loan Mortgage
Corp., CMO, Series 2071,
Class EV,
4,153,281 6.50%, 4/15/09 ............ 4,100,326
Federal Home Loan Mortgage
Corp., Gold, Pool E62107,
1,471,247 7.50%, 2/1/10 ............. 1,488,703
Federal Home Loan Mortgage
Corp., Gold, Pool E64408,
1,705,180 7.50%, 12/1/10 ............ 1,725,412
Federal Home Loan Mortgage
Corp., Gold, Pool C00742,
8,761,466 6.50%, 4/1/29 ............. 8,430,650
Federal Home Loan Mortgage
Corp., Gold, Pool C00785,
2,155,167 6.50%, 6/1/29 ............. 2,073,792
Federal Home Loan Mortgage
Corp., Gold, Pool C29108,
10,976,659 6.50%, 7/1/29 ............. 10,562,201
Federal Home Loan Mortgage
Corp., Gold, Pool C31226,
113,522 6.50%, 9/1/29 ............. 109,235
Federal Home Loan Mortgage
Corp., REMIC, Series 1496,
Class KB,
1,603,000 6.50%, 5/15/08 ............ 1,560,360
Federal Home Loan Mortgage
Corp., REMIC, Series 1562,
Class J,
7,915,000 7.00%, 5/15/10 ............ 7,822,869
See Notes to Financial Statements.
--------------------------------------------------------------------------------
63
<PAGE>
Fixed Income
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
Federal Home Loan Mortgage
Corp., REMIC, Series 1633,
Class PE,
$ 135,250 5.75%, 10/15/17 ........... $ 134,739
Federal Home Loan Mortgage
Corp., REMIC, Series 2136,
Class BD,
7,195,789 6.50%, 12/15/26 ........... 7,013,088
Federal National Mortgage Association,
Pool #535468,
4,454,552 7.00%, 12/1/09 ............ 4,465,799
Federal National Mortgage Association,
CMO, Series 1998-36, Class J,
11,798,000 6.00%, 7/18/28 ............ 10,867,605
Federal National Mortgage Association,
CMO, Series 1998-46, Class GV,
7,845,105 6.50%, 5/18/09 ............ 7,666,708
Federal National Mortgage Association,
Pool #303387,
383,743 8.00%, 7/1/02 ............. 383,397
Federal National Mortgage Association,
Pool #323692,
4,522,304 6.00%, 5/1/29 ............. 4,249,912
Federal National Mortgage Association,
Pool #419597,
542,084 6.00%, 8/1/28 ............. 509,433
Federal National Mortgage Association,
REMIC, Series 1994-92, Class DE,
4,787,556 7.50%, 7/25/07 ............ 4,815,994
Federal National Mortgage Association,
REMIC, Series 1998-M1 Class A 2,
8,202,000 6.25%, 1/25/08 ............ 7,835,837
Federal National Mortgage Association,
REMIC, Series 1995-2, Class H,
12,983,759 8.50%, 6/25/10 ............ 13,088,730
Federal National Mortgage Association,
REMIC, Series G93-31, Class G,
1,654,530 7.00%, 1/25/03 ............ 1,648,409
Federal National Mortgage Association,
Series 1995-M2, Class C,
546,278 6.80%, 5/25/28 ............ 544,973
Federal National Mortgage Association,
Series 1997-M2, Class B,
10,408,484 7.413%, 2/17/08 ........... 10,406,957
Government National Mortgage
Association, CMO, Series 1999-4,
Class VA,
18,336,924 6.00%, 12/20/09 ........... 17,733,272
Government National Mortgage
Association, Pool #506242,
4,683,435 8.00%, 6/15/30 ............ 4,761,257
------------
TOTAL US GOVERNMENT MORTGAGE BACKED OBLIGATIONS
(Cost $139,368,704) .................. 138,506,131
------------
PRINCIPAL
AMOUNT SECURITY VALUE
------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 12.55%
US Treasury Bonds:
$46,874,000 8.125%, 8/15/19 ........... $ 57,904,155
11,597,000 6.125%, 8/15/29 ........... 12,010,172
US Treasury Notes:
11,282,000 6.625%, 3/31/02 ........... 11,352,535
21,066,000 6.125%, 8/15/07 ........... 21,364,943
5,000 5.75%, 8/15/10 ............ 4,995
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $100,596,420) .................. 102,636,800
------------
REPURCHASE AGREEMENTS -- 1.99%
Tri Party Repurchase Agreement with
SEI, dated 10/31/00, 6.55%,
principal and interest in the
amount of $16,257,047, due
11/1/00, (collateralized by FMAC
FMNT, par value of $16,498,000,
coupon rate of 6.25%, due 7/15/04,
with a market value of
16,254,090 $16,650,728) .............. 16,254,090
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $16,254,090) ................... 16,254,090
-----------
TOTAL INVESTMENTS
(Cost $809,297,124) ......... 98.50% 805,243,291
OTHER ASSETS IN EXCESS
OF LIABILITIES .............. 1.50 12,314,693
------ ------------
NET ASSETS ..................... 100.00% $817,557,984
====== ============
--------------------------------------------------------------------------------
1 Zero Coupon Bond.
2 Pre-Refunded Security. The pre-refunded date is shown as the maturity date on
the Schedule of Investments.
Abbreviations
CMO -- Collateralized Mortgage Obligation
ETM -- Escrowed to Maturity
GO -- General Obligation
MTN -- Medium Term Note
RB -- Revenue Bond
REMIC -- Real Estate Mortgage Investment Conduit
The following organizations have provided underlying credit support for the
securities as defined in the Schedule of Investments
AMBAC -- American Municipal Bond Assurance Corporation
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage Corporation
144A -- Security exempt from registration under Rule 144A of the Security Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional shares.
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
NMA -- Government National Mortgage Association
MBIA -- Municipal Bond Investors Assurance
See Notes to Financial Statements.
--------------------------------------------------------------------------------
64
<PAGE>
Short-Term Fixed Income
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES-- 27.41%
Advanta Mortgage Loan Trust,
Series 1993-4, Class A-1,
$ 66,442 5.50%, 3/25/10 ............ $ 64,114
Amresco Residential Securities,
Series 1996-3, Class A5,
302,610 7.55%, 2/25/23 ............ 301,388
Centex Home Equity Series 1999-2,
Class A1,
70,842 5.91%, 4/25/19 ............ 70,222
Contimortgage Home Equity Loan Trust
1994-4, Class A4,
272,236 8.39%, 11/15/18 ........... 273,559
Contimortgage Home Equity Loan Trust
1996-4, Class A7,
1,990,000 6.99%, 3/15/21 ............ 1,983,066
Contimortgage Home Equity Loan Trust
1998-1, Class A4,
1,875,000 6.28%, 1/15/13 ............ 1,862,700
Discover Card Master Trust I 1998-6
Class A,
2,000,000 5.85%, 1/17/06 ............ 1,955,763
First Sierra Receivables, Series 1996-2,
Class A,
629,640 6.29%, 11/10/04 ........... 627,689
First Union Residential Securitization
1996-1, Class A3,
370,235 7.29%, 5/25/11 ............ 368,869
Green Tree Home Improvement Loan
Trust 1996-F, Class HEA4,
514,626 7.30%, 1/15/28 ............ 515,218
Saxon Asset Securities Trust, Series
1999-2, Class BF1A,
166,657 7.925%, 8/25/01 ........... 166,116
The Money Store Home Equity Trust,
Series 1996-D, Class A13,
312,020 6.635%, 9/15/14 ........... 310,778
UCFC Home Equity Loan, Series
1995-A1, Class A5,
547,785 8.55%, 1/10/20 ............ 546,827
UCFC Home Equity Loan, Series
1996-A1, Class A6,
396,136 6.70%, 11/15/19 ........... 394,080
World Omni Auto Lease Securitization
1997-B, Class A4,
10,538 6.20%, 11/25/03 ........... 10,529
-----------
TOTAL ASSET-BACKED SECURITIES
(Cost $9,386,412) .................... 9,450,918
-----------
PRINCIPAL
AMOUNT SECURITY VALUE
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS -- 10.94%
Appalachian Power Co.,
$1,000,000 7.38%, 8/15/02 ............ $ 1,000,241
Archstone Communities Trust,
400,000 6.37%, 10/15/01 ........... 396,790
Bear Stearns Co., Inc.,
250,000 6.70%, 8/1/03 ............. 246,369
Colonial Realty LP,
350,000 7.50%, 7/15/01 ............ 348,652
Colonial Realty, LP,
180,000 7.93%, 8/9/02 ............. 179,277
Erac USA Finance, 144A,
350,000 6.375%, 5/15/03 ........... 340,940
Florida Residential Property &
Casualty Insurance, 144A,
100,000 7.375%, 7/1/03 ............ 99,986
Lehman Brothers, Inc.,
250,000 7.50%, 8/1/26 ............. 250,299
Midland Funding I,
350,815 10.33%, 7/23/02 ........... 356,934
Summit Properties Partnership,
500,000 6.75%, 7/30/01 ............ 499,471
Wellsford Residential,
50,000 9.375%, 2/1/02 ............ 51,041
-----------
TOTAL CORPORATE OBLIGATIONS
(Cost $3,768,594) .................... 3,770,000
-----------
MORTGAGE-BACKED SECURITIES -- 7.98%
General Electric Capital Mortgage
Services, CMO, Series 1998-12,
Class 1A1,
375,000 6.50%, 7/25/28 ............ 371,175
Green Tree Financial, Series 1994-6,
Class A5,
66,284 8.25%, 1/15/20 ............ 66,615
Merrill Lynch Mortgage Investors,
Series 1995-C3, Class A1,
54,114 6.769%, 12/26/25 .......... 53,802
Oakwood Mortgage Investors,
Series 1996-B, Class A3,
57,473 7.10%, 10/15/26 ........... 57,332
Oakwood Mortgage Investors,
Series 1997-C, Class A2,
220,442 6.45%, 11/15/27 ........... 219,737
Prudential Securities Financial Asset
Funding Corp., Series 1993-4,
Class A4,
600,000 6.83%, 9/25/09 ............ 595,656
See Notes to Financial Statements.
--------------------------------------------------------------------------------
65
<PAGE>
Short-Term Fixed Income
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
--------------------------------------------------------------------------------
Residential Accredit Loans, CMO,
Series 1997-QS6, Class A4,
$ 500,000 7.50%, 6/25/12 ............ $ 497,805
Residential Accredit Loans, CMO,
Series 1998-QS1, Class A2,
895,971 7.00%, 1/25/28 ............ 889,403
-----------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $2,771,838) .................... 2,751,525
-----------
TAXABLE MUNICIPAL BONDS-- 33.17%
Alaska State Financial Corp., RB,
Series C, MBIA / FHA,
85,000 7.40%, 1/1/02 ............. 85,220
Comanche County, Oklahoma, Home
Finance Authority, RB, FNMA/FHA,
5,000 6.15%, 12/1/00 ............ 4,996
Costa Rica Ministry Finance,
440,000 7.36%, 8/1/01 ............. 440,000
Denver, Colorado, City And County
Multi-Family Housing, Buerger
Brothers, RB, Series B, FHA,
35,000 6.75%, 5/1/01 ............. 34,952
Erie County, New York, Water Authority,
RB, AMBAC:
45,000 5.875%, 12/1/03 ........... 43,950
95,000 5.875%, 12/1/03 ........... 92,660
Florida State, Housing Finance Agency,
RB, Series S-2,
40,000 6.65%, 6/1/01 ............. 39,944
Fresno, California, Multi-Family
Housing Authority, Woodlands
Apartments Project, RB, GNMA,
175,000 7.25%, 11/20/02 ........... 175,525
Halifax Hospital Medical Center,
Florida Health Care Facilities,
RB, ACA,
920,000 6.375%, 4/1/01 ............ 916,780
Harris County, Texas, Housing Finance
Corp., Single Family Mortgage
Revenue, Series A,
1,250,000 7.75%, 9/1/14 ............. 1,255,437
Illinois State Health Facilities
Authority, RB, Series C, MBIA,
417,000 10.30%, 8/15/03 ........... 418,022
Indianapolis, Indiana, Economic
Development Authority, Castle Dore,
RB, Series B, FHA,
10,000 6.75%, 12/1/00 ............ 9,996
Kansas City, Missouri, Industrial
Development Authority, Hilltop Village
Apartments, RB, Series B, FNMA,
75,000 6.70%, 10/1/02 ............ 74,805
PRINCIPAL
AMOUNT SECURITY VALUE
--------------------------------------------------------------------------------
Massachusetts State, Industrial Finance
Agency, Briscoe Housing Assistance,
Series B, FHA,
$ 750,000 7.10%, 2/1/12 ............. $ 747,337
New Hampshire State Industrial
Development Authority Revenue,
RB, FGIC,
1,000,000 9.875%, 12/1/20 ........... 1,021,850
North Slope Borough Alaska, General
Obligation Unlimited, MBIA,1
911,988 0.00%, 6/30/01 ............ 869,052
Oak Ridge, Tennessee, Industrial
Development Board, The Gardens,
Series B, RB, GNMA,
440,000 6.15%, 8/20/03 ............ 434,764
Ohio Capital Housing Mortgage
Corp., Bella Vista, RB, FHA,
230,000 6.30%, 2/1/03 ............. 227,523
Ohio Housing Financial Agency,
Ravenwood Project, RB, FHA,
125,000 6.125%, 3/1/04 ............ 122,926
Oklahoma Housing Finance Agency,
Single Family Mortgage, RB, MBIA,
90,000 8.70%, 9/1/13 ............. 90,203
Pima County, Arizona, Industrial
Development Authority, Western
Winds, RB, Series B, HUD,
70,000 6.55%, 6/1/01 ............. 69,739
Polk County, Florida, Housing Finance
Authority, REMIC, Series 1, MBIA,
14,798 9.55%, 1/15/11 ............ 14,813
Prince Georges County, Maryland,
Housing Authority, Foxglenn Project,
RB, GNMA,
220,000 6.25%, 11/20/04 ........... 218,319
Rensselaer County, New York COP
1,724,881 7.90%, 3/15/01 ............ 1,725,347
Rockford, Illinois, RB, Series B, MBIA,
150,000 7.45%, 1/1/03 ............. 150,273
Sedgwick & Shawnee Counties, Kansas,
Single Family Mortgage, RB, GNMA,
305,000 8.375%, 6/1/18 ............ 314,672
Shawnee, Kansas, Multi-Family Housing,
Haverford West Apartments, RB,
Series B, FNMA,
50,000 6.75%, 6/1/02 ............. 49,864
Southeast Texas, Housing Finance
Corp., RB,1
2,625,000 0.00%, 9/1/17 ............. 668,797
See Notes to Financial Statements.
--------------------------------------------------------------------------------
66
<PAGE>
Short-Term Fixed Income
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT SECURITY VALUE
--------------------------------------------------------------------------------
Spokane, Washington, Elderly Housing
Authority, Cheney Care Center, RB,
Series B, GNMA,
$ 125,000 6.125%, 2/20/04 ........... $ 123,297
State Development Finance Authority,
Series D, Class D,1
1,720,000 0.00%, 2/15/14 ............ 535,952
Tarrant County, Texas, Health Facilities
Development Corp., South Central
Project, RB, MBIA / FHA,
225,000 6.75%, 1/1/37 ............. 224,289
Tarrant County, Texas, Housing Financial
Corp., Series B, RB, FNMA,
130,000 6.55%, 9/1/02 ............. 129,420
Wilmington, Delaware, Multi-Family
Rent, Prestwyck Apartments, RB,
Series B, FHA,
105,000 6.625%, 11/1/03 ........... 104,202
-----------
TOTAL TAXABLE MUNICIPAL BONDS
(Cost $11,531,719) ................... 11,434,926
-----------
US TREASURY OBLIGATIONS -- 13.51%
US Treasury Notes:
1,000,000 4.625%, 12/31/00 .......... 996,367
3,260,000 6.50%, 5/31/01 ............ 3,261,656
203,000 6.625%, 3/31/02 ........... 204,269
193,000 6.125%, 8/15/07 ........... 195,805
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $4,657,764) .................... 4,658,097
-----------
US GOVERNMENT MORTGAGE BACKED
OBLIGATIONS -- 3.46%
FannieMae Whole Loan 1996-W1,
Class A4,
87,692 6.95%, 3/25/26 ............ 87,215
Federal Home Loan Mortgage
Corp., Series 128, Class I,
121,493 6.50%, 2/15/21 ............ 118,629
Federal National Mortgage Association,
REMIC, Series 1995-23, Class M,
11,040 6.50%, 10/25/22 ........... 10,973
Federal National Mortgage Association,
Series 1995-M2, Class C,
696,721 6.80%, 5/25/28 ............ 695,056
Federal National Mortgage Association,
Series 1997-27, Class B,
158,014 7.00%, 2/18/25 ............ 157,299
PRINCIPAL
AMOUNT SECURITY VALUE
--------------------------------------------------------------------------------
Government National Mortgage
Association, CMO, Series 1998-23,
Class DA,
$ 124,601 8.50%, 10/20/12 ........... $ 124,865
-----------
TOTAL US GOVERNMENT MORTGAGE BACKED OBLIGATIONS
(Cost $1,195,417) .................... 1,194,037
-----------
REPURCHASE AGREEMENTS -- 3.45%
Tri Party Repurchase Agreement with
SEI, dated 10/31/00, 6.55%,
principal and interest in the
amount of $1,189,472, due 11/1/00,
(collateralized by US Treasury Note
with a par value of $1,223,000,
coupon rate of 5.50%, due
8/31/01, with a market
1,189,259 value of $1,225,831) ...... 1,189,259
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $1,189,259) .................... 1,189,259
----------
TOTAL INVESTMENTS
(Cost $34,501,003) ........... 99.92% 34,448,762
OTHER ASSETS IN EXCESS
OF LIABILITIES ............... 0.08 27,201
------ -----------
NET ASSETS ...................... 100.00% $34,475,963
====== ===========
--------------------------------------------------------------------------------
1 Zero Coupon Security.
2 Variable Rate Security. The rate reported on the Schedule of Investments is
the rate in effect as of October 31, 2000.
Abbreviations
CMO -- Collaterized Mortgage Obligation
COP -- Certificate of Participation
RB -- Revenue Bond
REMIC -- Real Estate MortgageInvestment Conduit
The following organizations have provided underlying credit support for the
securities as defined in the Schedule of Investments.
ACA -- American Capital Access
AMBAC -- American Municipal Bond Assurance Corporation
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
HUD -- Housing & Urban Development
MBIA -- Municipal Bond Investors Assurance
144A -- Security exempt from registration under Rule 144A of the Security Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional shares.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
67
<PAGE>
High Yield Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT3 SECURITY VALUE
--------------------------------------------------------------------------------
CORPORATE BONDS -- 87.33%
AUTO -- 1.20%
Astra, Reg S, 144A,
2,813,376 12.19%, 6/30/05 ........... $ 1,603,624
RJ Tower Corp.,
e2,775,000 9.25%, 8/1/10 ............. 2,048,974
-----------
3,652,598
-----------
CABLE-- 9.94%
@Entertainment, Series B,2
12,510,000 14.50%, 2/1/09 ............ 6,880,500
Adelphia Communications,
5,260,000 7.875%, 5/1/09 ............ 4,129,100
At Home Corp.,
2,300,000 4.75%, 12/15/06 ........... 1,420,250
Cable Satisfaction International,
1,200,000 12.75%, 3/1/10 ............ 960,000
Cablevision SA,
4,795,000 13.75%, 4/30/07 ........... 3,788,050
Callahan NRW, 144A:
2,425,000 14.00%, 7/15/10 ........... 2,315,875
e 690,000 14.00%, 7/15/10 ........... 572,427
Echostar DBS Corp.,
1,130,000 9.375%, 2/1/09 ............ 1,110,225
Ekabel Hessen, 144A,
3,285,000 14.50%, 9/1/10 ............ 3,104,325
James Cable Partners, Series B,
3,423,000 10.75%, 8/15/04 ........... 2,738,400
NTLCommunications:
e 750,000 9.25%, 11/15/06 ........... 566,507
e1,115,000 9.875%, 11/15/09 .......... 813,818
Ono Finance Plc,
e1,200,000 13.00%, 5/1/09 ............ 768,922
Supercanal Holdings SA, Reg S,4
2,550,000 11.50%, 5/15/05 ........... 1,160,431
-----------
30,328,830
-----------
CHEMICALS -- 0.96%
Equistar Chemicals LP,
700,000 8.75%, 2/15/09 ............ 659,041
Lyondell Chemical, Series A,
2,350,000 9.625%, 5/1/07 ............ 2,279,500
-----------
2,938,541
-----------
ENERGY -- 5.15%
Belco Oil & Gas, Series B,
750,000 8.875%, 9/15/07 ........... 705,000
Ocean Energy Inc., Series B,
1,970,000 7.625%, 7/1/05 ............ 1,905,975
PRINCIPAL
AMOUNT3 SECURITY VALUE
--------------------------------------------------------------------------------
Parker & Parsley,
3,370,000 8.25%, 8/15/07 ............ $ 3,298,310
Pioneer Natural Resources:
1,335,000 6.50%, 1/15/08 ............ 1,181,894
1,225,000 9.625%, 4/1/10 ............ 1,287,220
Pride International Inc.,
2,640,000 10.00%, 6/1/09 ............ 2,732,400
Ram Energy,
1,935,000 11.50%, 2/15/08 ........... 1,470,600
RBF Finance Company,
2,250,000 11.00%, 3/15/06 ........... 2,559,375
Triton Energy Ltd., 144A,
565,000 8.875%, 10/1/07 ........... 565,706
-----------
15,706,480
-----------
FINANCIAL -- 0.63%
Conseco Finance,
500,000 10.70%, 12/1/30 ........... 508,730
Labranche & Company,
1,340,000 12.00%, 3/2/07 ............ 1,427,100
-----------
1,935,830
-----------
FIXED COMMUNICATIONS-- 9.43%
Caprock Communications, Series B,
1,625,000 12.00%, 7/15/08 ........... 1,580,313
Covad Communications Group, Series B,2
3,875,000 13.50%, 3/15/08 ........... 1,085,000
Exodus, 144A,
e3,285,000 11.375%, 7/15/08 .......... 2,537,061
Fairpoint Communications,
1,505,000 12.50%, 5/1/10 ............ 1,354,500
Globix Corp.,
1,795,000 12.50%, 2/1/10 ............ 987,250
Intermedia Communications,2
2,700,000 12.50%, 5/15/06 ........... 2,551,500
Intermedia Communications, Series B,
2,875,000 8.60%, 6/1/08 ............. 2,709,688
Metromedia Fiber Network:
2,800,000 10.00%, 12/15/09 .......... 2,485,000
e1,375,000 10.00%, 12/15/09 .......... 1,038,597
Northpoint Communications Group Inc.,
5,815,000 12.875%, 2/15/10 .......... 5,407,950
PSINet,
4,275,000 10.50%, 12/1/06 ........... 2,041,313
WAM!Net, Series B,2
2,355,000 13.25%, 3/1/05 ............ 1,059,750
Williams Communications Group,
1,055,000 10.70%, 10/1/07 ........... 904,662
See Notes to Financial Statements.
--------------------------------------------------------------------------------
68
<PAGE>
High Yield Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT3 SECURITY VALUE
--------------------------------------------------------------------------------
Williams Communications Group, 144A,
3,400,000 11.70%, 8/1/08 ............ $ 3,034,500
-----------
28,777,084
-----------
FIXED COMMUNICATIONS --
INTERNATIONAL -- 7.29%
360 Networks Inc.,
700,000 13.00%, 5/1/08 ............ 560,000
Asia Global Crossing, 144A,
1,500,000 13.375%, 10/15/10 ......... 1,387,500
Alestra SA,
3,665,000 12.125%, 5/15/06 .......... 3,170,225
Bestel SA,2
2,410,000 12.75%, 5/15/05 ........... 1,421,900
Call-Net Enterprises Inc.:
1,555,000 8.00%, 8/15/08 ............ 622,000
3,250,000 8.94%, 8/15/082 ........... 910,000
GT Group Telecom,2
2,500,000 13.25%, 2/1/10 ............ 912,500
Maxcom Telecomunicacione, Series B,
2,365,000 13.75%, 4/1/07 ............ 1,064,250
Netia Holdings II BV, Series B,
1,370,000 13.125%, 6/15/09 .......... 1,150,800
Netia Holdings, Series B,2
15,140,000 11.25%, 11/1/07 ........... 9,386,800
Versatel Telecom, 144A,
e 1,215,000 4.00%, 3/30/05 ............ 737,287
Viatel,2
3,100,000 12.50%, 4/15/08 ........... 914,500
-----------
22,237,762
-----------
FOODS & BEVERAGES -- 4.71%
Agrilink Foods,
2,220,000 11.875%, 11/1/08 .......... 1,587,300
Bepensa SA, Reg S,
2,530,000 9.75%, 9/30/04 ............ 2,327,600
Doane Pet Care Company,
2,410,000 9.75%, 5/15/07 ............ 2,012,350
Fage Dairy Industries,
11,280,000 9.00%, 2/1/07 ............. 8,460,000
-----------
14,387,250
-----------
GAMING -- 1.43%
Anchor Gaming, 144A,
700,000 9.875%, 10/15/08 .......... 707,875
Autotote Corp., 144A,
645,000 12.50%, 8/15/10 ........... 635,325
Park Place Entertainment, 144A,
1,665,000 8.875%, 9/15/08 ........... 1,631,700
PRINCIPAL
AMOUNT3 SECURITY VALUE
--------------------------------------------------------------------------------
Station Casinos Inc.,
355,000 9.75%, 4/15/07 ............ $ 355,000
Station Casinos Inc., 144A,
1,020,000 9.875%, 7/1/10 ............ 1,022,550
-----------
4,352,450
-----------
GENERAL INDUSTRIALS-- 3.59%
Alliance Laundry Systems,
Series B,
2,930,000 9.625%, 5/1/08 ............ 2,314,700
Allied Waste, North America,
Series B:
3,185,000 7.625%, 1/1/06 ............ 2,834,650
1,350,000 10.00%, 8/1/09 ............ 1,154,250
American Plumbing & Mechanical,
Series B,
2,415,000 11.625%, 10/15/08 ......... 2,354,625
Dayton Superior Corp.,
2,410,000 13.00%, 6/15/09 ........... 2,289,500
-----------
10,947,725
-----------
HEALTH CARE -- 1.46%
DJ Orthopedics,
2,325,000 12.625%, 6/15/09 .......... 2,208,750
Healthsouth Corp. 144A,
340,000 6.875%, 6/15/05 ........... 301,488
2,300,000 7.00%, 6/15/08 ............ 1,960,403
-----------
4,470,641
-----------
MEDIA -- 7.67%
Antenna TV SA,
7,780,000 9.00%, 8/1/07 ............. 7,079,800
Fox Family Worldwide,2
13,995,000 10.25%, 11/1/07 ........... 10,076,400
Imasac SA, Reg S, RBS
Panticipacoes
2,415,000 11.00%, 5/2/05 ............ 1,631,243
RBS Participacoes SA, Reg S,
5,510,000 11.00%, 4/1/07 ............ 4,627,408
-----------
23,414,851
-----------
METALS & MINING-- 0.99%
Acindar Industry Argentina,
710,000 11.25%, 2/15/04 ........... 461,500
AEI Resources, 144A,
4,410,000 10.50%, 12/15/05 .......... 352,800
AK Steel Corp.,
665,000 7.875%, 2/15/09 ........... 601,825
Grupo Minero Mexico, Series B,
2,070,000 9.25%, 4/1/28 ............. 1,614,600
-----------
3,030,725
-----------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
69
<PAGE>
High Yield Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
PRINCIPAL
AMOUNT3 SECURITY VALUE
--------------------------------------------------------------------------------
MOBILE COMMUNICATIONS -- 21.16%
Airgate PCS,2
1,445,000 13.50%, 10/1/09 ........... $ 827,262
Alamosa PCS,2
2,050,000 12.875%, 2/15/10 .......... 984,000
Celcaribe SA,2
1,445,000 14.50%, 3/15/04 ........... 1,156,000
Comunicacion Cellular, 144A,2
15,270,000 14.125%, 3/1/05 ........... 11,605,200
CTI,2
2,680,000 11.50%, 4/15/08 ........... 1,152,400
Dobson Communications,
1,575,000 10.875%, 7/1/10 ........... 1,512,000
Horizon Pcs Inc.,2
1,950,000 16.00%, 10/1/10 ........... 926,250
Grupo Iusacell,
10,775,000 14.25%, 12/1/06 ........... 10,855,813
Grupo Iusacell, SA, Series B,
3,150,000 10.00%, 7/15/04 ........... 3,063,375
Leap Wireless International Inc.,2
1,245,000 14.50%, 4/15/10 ........... 348,600
Occidente Y Caribe Cellular,
Series B,2
9,435,000 14.00%, 3/15/04 ........... 6,604,500
Partner Communications,
515,000 13.00%, 8/15/10 ........... 422,300
PTC International Finance BV,2
14,110,000 10.75%, 7/1/07 ............ 9,453,700
Slovak Wireless Finance Co.,
e 2,775,000 11.25%, 3/30/07 ........... 2,192,520
Telecorp Pcs Inc.,
1,560,000 10.625%, 7/15/10 .......... 1,556,100
Tritel PCS,2 144A,
8,660,000 12.75%, 5/15/09 ........... 5,607,350
Ubiquitel Operating Co.,2
790,000 14.00%, 4/15/10 ........... 355,500
US Unwired Inc., Series B,2
1,510,000 13.375%, 11/1/09 .......... 736,125
Voicestream Wire Co.,2
3,295,000 11.875%, 11/15/09 ......... 2,380,638
Voicestream Wire Co.,
2,650,000 10.375%, 11/15/09 ......... 2,835,500
-----------
64,575,133
-----------
PRINCIPAL
AMOUNT3 SECURITY VALUE
--------------------------------------------------------------------------------
MOBILE COMMUNICATIONS TOWERS &
PAGING -- 3.44%
Pinnacle Holdings,2
8,010,000 0.00%, 3/15/08 ............ $ 4,565,700
SBA Communications Corp.,2
8,030,000 12.00%, 3/1/08 ............ 5,942,200
-----------
10,507,900
-----------
PAPER & PACKAGING -- 1.65%
APP China Group Ltd.144A,
1,880,000 14.00%, 3/15/10 ........... 789,600
APP Finance IX Ltd.,
2,600,000 10.526%, 10/4/01 .......... 1,560,000
APP Global Finance III,
2,500,000 10.96%, 4/17/02 ........... 956,250
Sweetheart Cup,
1,915,000 10.50%, 9/1/03 ............ 1,742,650
-----------
5,048,500
-----------
TRANSPORTATION-- 3.66%
Cenargo International PLC,
1,730,000 9.75%, 6/15/08 ............ 1,349,400
Eletson Holdings,
925,000 9.25%, 11/15/03 ........... 885,688
Kansas City Southern, 144A,
655,000 9.50%, 10/1/08 ............ 664,825
Railamerica Transportation, 144A,
1,685,000 12.875%, 8/15/10 .......... 1,567,050
Stena AB:
2,195,000 10.50%, 12/15/05 .......... 2,063,300
5,580,000 8.75%, 6/15/07 ............ 4,631,400
-----------
11,161,663
-----------
UTILITIES-- 2.97%
AES Drax Energy Ltd., 144A,2
335,000 11.50%, 8/30/10 ........... 351,750
AES Drax Holdings Ltd., 144A,
1,500,000 10.41%, 12/31/20 .......... 1,580,475
Calpine Corp.,
1,500,000 8.625%, 8/15/10 ........... 1,481,381
CMS Energy Corp.:
5,030,000 9.875%, 10/15/07 .......... 5,076,351
670,000 7.50%, 1/15/09 ............ 583,985
-----------
9,073,942
-----------
TOTAL CORPORATE BONDS
(Cost $296,238,702) .................. 266,547,905
-----------
See Notes to Financial Statements.
--------------------------------------------------------------------------------
70
<PAGE>
High Yield Bond
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS October 31, 2000
SHARES SECURITY VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- 0.25%
30,000 AT&T Latin America Corp.
Class A 1 ................. $ 213,750
4,441 Airgate PCS Inc.1 ........... 172,644
10,896 Jazztel Plc. ADR 1 .......... 192,723
24,175 Tele1 Europe Holding AB
ADR 1 ..................... 190,378
-----------
TOTAL COMMON STOCK
(Cost $298,776) ...................... 769,495
-----------
PREFERRED EQUITIES -- 8.43%
Crown Castle International Corp., PIK,
8,225 12.75%, 12/15/10 .......... 8,183,875
Dobson Communications, PIK,
27 12.25%, 11/15/08 .......... 2,390
92,350 Global Crossing Holdings,
PIK 1 ..................... 8,865,600
Intermedia Communications, Series B,
PIK,
6,624 13.50%, 3/31/09 ........... 5,630,400
TNP Enterprises Inc., 144A, PIK:
147 14.50% .................... 147,000
2,900 14.50% .................... 2,900,000
-----------
TOTAL PREFERRED EQUITIES
(Cost $27,973,679) ................... 25,729,265
-----------
WARRANTS -- 0.19%
1,880 APP China Group 1 ........... 19
e 2,050 Atlantic Telecom 1 .......... 17,398
1,200 Cable Satisfaction
International 1 ........... 12
2,410 Dayton Superior Corp.1 ...... 48,200
e 1,055 Enitel ASA, 144A ............ 2,238
2,500 GT Group Telecom1 ........... 150,000
1,245 Leap Wireless International
Inc.1 ..................... 1,868
2,365 Maxcom Telecomunicacione 1 .. 591
Ono Finance PLC,1
5,000 0.00%, 5/31/09 ............ 360,000
1,685 Railamerica Transport 1 ..... 1,685
-----------
TOTAL WARRANTS
(Cost $495,011) ...................... 582,011
-----------
TOTAL INVESTMENTS -- 96.20%
(Cost $325,006,168) .................. 293,628,676
-----------
SHARES SECURITY VALUE
--------------------------------------------------------------------------------
SECURITIES SOLD SHORT -- (0.07)%
(10,000) Versatel Telecom International
ADR 1 .................... $ (200,000)
------------
TOTAL SECURITIES SOLD SHORT
(Proceeds $120,260) ................. (200,000)
-----------
OTHER ASSETS IN EXCESS
OF LIABILITIES ............... 3.87 11,805,690
------ ------------
NET ASSETS ...................... 100.00% $305,234,366
====== ============
--------------------------------------------------------------------------------
1 Non-income producing security.
2 Step Up Bond -- The rate reflected on the Schedule of Investments is the rate
in effect on October 31, 2000. The initial coupon on a step up bond changes on
a specific date, to a predetermine higher rate.
3 Principal amount is denominated in US Dollars unless otherwise indicated.
4 Defaulted security.
Abbreviations
ADR -- American Depository Receipt
e -- Security's principal amount is denominated in euros.
PIK -- Payment-In-Kind Security
144A Security exempt from registration under Rule 144A of the Security Act of
1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
71
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
OCTOBER 31, 2000 OCTOBER 31, 2000
MUNICIPAL SHORT-TERM FIXED SHORT-TERM HIGH YIELD
BOND MUNICIPAL BOND INCOME FIXED INCOME BOND
------------- -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment at value 1 ................................ $ 519,544,570 $ 188,680,863 $ 805,243,291 $ 34,448,762 $ 293,628,676
Cash ................................................. -- -- -- -- 9,926,126
Collateral for securities sold short ................. -- -- -- -- 200,000
Receivable for securities sold ....................... -- 1,450,911 6,076,882 -- 4,910,660
Receivable for capital shares sold ................... 436,619 274,964 6,644,929 -- 273,122,314
Interest receivable .................................. 8,852,704 3,669,874 9,950,572 478,655 6,379,074
Receivable for foreign taxes withheld ................ -- -- -- -- 25,353
Net unrealized appreciation on forward
currency contracts -- -- -- -- 143,099
Prepaid expenses and other assets .................... -- 2,645 -- -- --
------------- ------------- ------------- ------------- -------------
Total assets ............................................ 528,833,893 194,079,257 827,915,674 34,927,417 588,335,302
------------- ------------- ------------- ------------- -------------
LIABILITIES
Due to advisor ....................................... 112,254 79,117 269,361 30,456 78,926
Due to administrator ................................. 53,499 20,579 85,193 3,157 30,971
Due to custodian ..................................... 36,430 18,106 20,372 6,593 36,417
Payable for securities purchased ..................... 37,661 1,164,906 8,139,622 -- 6,886,214
Securities sold short at value (proceeds $120,260) ... -- -- -- -- 200,000
Payable for capital shares redeemed .................. 914,934 149,994 513,915 250,465 272,357,353
Dividends payable .................................... 329,993 73,729 1,110,256 139,924 3,453,758
Net unrealized depreciation on forward
currency contracts -- -- -- -- 19,631
Accrued expenses and other ........................... 96,851 23,815 218,971 20,859 37,666
------------- ------------- ------------- ------------- -------------
Total liabilities ....................................... 1,581,622 1,530,246 10,357,690 451,454 283,100,936
------------- ------------- ------------- ------------- -------------
NET ASSETS .............................................. $ 527,252,271 $ 192,549,011 $ 817,557,984 $ 34,475,963 $ 305,234,366
============= ============= ============= ============= =============
COMPOSITION OF NET ASSETS
Paid-in capital ...................................... $ 543,836,869 $ 194,464,329 $ 850,218,264 $ 34,591,863 $ 351,476,829
Undistributed (overdistributed) net investment
income ........................................... (35,993) (3,309) (140,082) (2,895) 1,483,412
Accumulated net realized loss from investments and
foreign currency transactions ..................... (11,955,937) (1,692,996) (28,466,365) (60,764) (16,397,062)
Net unrealized depreciation on investments and
foreign currencies ................................ (4,592,668) (219,013) (4,053,833) (52,241) (31,328,813)
------------- ------------- ------------- ------------- -------------
NET ASSETS .............................................. $ 527,252,271 $ 192,549,011 $ 817,557,984 $ 34,475,963 $ 305,234,366
============= ============= ============= ============= =============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
(net assets divided by shares outstanding)
Institutional Class 2 ................................ $ 10.77 $ 10.16 $ 10.24 $ 9.97 $ 8.23
============= ============= ============= ============= =============
Investment Class 3 ................................... $ 10.77 $ 10.16 $ 10.24 $ -- $ 8.23
============= ============= ============= ============= =============
Premier Class 4 ...................................... $ -- $ -- $ -- $ -- $ 8.23
============= ============= ============= ============= =============
<FN>
--------------------------------------------------------------------------------
1 Cost of Investments: Municipal Bond Fund $524,137,238, Short-Term Municipal
Bond, $188,899,876, Fixed Income, $809,297,124, Short-Term Fixed Income,
$34,501,003, High Yield Bond $325,006,168.
2 Net asset value, offering and redemption price per share (based on net assets
of $514,784,460, $192,356,585, $804,089,336, $34,475,963, $29,579,801 and
47,809,686, 18,927,188, 78,532,080, 3,458,854, 3,595,124 shares of beneficial
interest outstanding; $.001 par value, unlimited number of shares of
beneficial interest authorized for Municipal Bond, Short-Term Municipal Bond,
Fixed Income, Short-Term Fixed Income and High Yield Bond, respectively). On
February 28, 2000 the Institutional Shares were renamed the Institutional
Class.
3 Net asset value, offering and redemption price per share (based on net assets
of $12,467,811, $192,426, $13,468,648, $3,128,145 and 1,157,681, 18,944,
1,315,910, 380,158 shares of beneficial interest outstanding; $.001 par value,
unlimited number of shares of beneficial interest authorized for Municipal
Bond, Short-Term Municipal Bond, Fixed Income and High Yield Bond,
respectively). On February 28, 2000 the Service Shares were renamed the
Investment Class.
4 Net asset value, offering and redemption price per share (based on net assets
of $272,526,420 and 33,128,694 shares of beneficial interest outstanding;
$.001 par value, unlimited number of shares of beneficial interest authorized
for High Yield Bond). The High Yield Bond -- Premier Class began operations on
October 31, 2000.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
72-73
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
OCTOBER 31, 2000
MUNICIPAL SHORT-TERM FIXED SHORT-TERM HIGH YIELD
BOND MUNICIPAL BOND INCOME FIXED INCOME BOND
------------- -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest ............................................. $ 30,557,145 $ 7,566,396 $ 79,086,426 $ 2,201,101 $ 43,856,249
Dividends ............................................ -- -- -- -- 673,666
Less: foreign taxes withheld ......................... -- -- -- -- (40,670)
------------ ------------ ------------ ------------ ------------
Total investment income ................................. 30,557,145 7,566,396 79,086,426 2,201,101 44,489,245
------------ ------------ ------------ ------------ ------------
EXPENSES
Investment advisory fee .............................. 2,107,627 520,523 4,431,798 127,768 1,706,553
Administration fees .................................. 632,288 156,160 1,329,539 38,330 409,578
Custody fee .......................................... 217,828 94,481 156,362 29,776 149,565
Registration and filing fees ......................... -- 54,559 33,505 1,818 --
Professional fees .................................... 78,573 63,277 21,612 54,335 77,114
Printing fees ........................................ 27,155 17,627 19,858 17,803 19,518
Servicing plan fees .................................. 31,042 688 25,902 -- 10,860
Trustees' fees ....................................... 3,911 6,968 -- 6,070 6,699
Interest expense ..................................... 3,945 539 3,097 -- 101,784
Miscellaneous ........................................ 24,131 3,421 7,056 1,733 --
------------ ------------ ------------ ------------ ------------
Total expenses .......................................... 3,126,500 918,243 6,028,729 277,633 2,481,671
Less: fee waivers or expense reimbursements ............. (191,850) (201,351) -- (101,952) (151,954)
------------ ------------ ------------ ------------ ------------
Net expenses ............................................ 2,934,650 716,892 6,028,729 175,681 2,329,717
------------ ------------ ------------ ------------ ------------
NET INVESTMENT INCOME ................................... 27,622,495 6,849,504 73,057,697 2,025,420 42,159,528
------------ ------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Investment transactions ............................ (11,762,662) (1,542,763) (15,137,821) (45,515) (11,098,613)
Foreign currency transactions ...................... -- -- -- -- 1,286,762
Net change in unrealized appreciation/depreciation on
investments and foreign currencies ................. 15,718,846 1,469,081 18,198,929 136,254 (20,633,760)
------------ ------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES ............................... 3,956,184 (73,682) 3,061,108 90,739 (30,445,611)
------------ ------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS FROM OPERATIONS .............. $ 31,578,679 $ 6,775,822 $ 76,118,805 $ 2,116,159 $ 11,713,917
============ ============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
74-75
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED OCTOBER 31,
2000 1999 2000 1999 2000 1999
MUNICIPAL SHORT-TERM FIXED
BOND MUNICIPAL BOND INCOME
----------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income ................. $ 27,622,495 $ 30,016,002 $ 6,849,504 $ 3,369,059 $ 73,057,697 $ 76,020,850
Net realized gain (loss) on investment
and foreign currency transactions .. (11,762,662) (146,778) (1,542,763) (63,978) (15,137,821) (11,245,563)
Net change in unrealized appreciation/
depreciation on investments
and foreign currencies .............. 15,718,846 (35,969,285) 1,469,081 (2,369,647) 18,198,929 (53,489,063)
------------- ------------ ------------ ------------ -------------- --------------
Net increase (decrease) in net assets
from operations ........................ 31,578,679 (6,100,061) 6,775,822 935,434 76,118,805 11,286,224
------------- ------------ ------------ ------------ -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Institutional Class 1 ............... (27,000,743) (29,835,658) (6,836,251) (3,359,152) (72,394,274) (75,910,823)
Investment Class 2 .................. (621,752) (193,521) (13,145) (12,249) (663,423) (177,781)
Net realized gain from investment
transactions
Institutional Class 1 ............... -- (2,515,971) -- -- -- (19,756,357)
Investment Class 2 .................. -- (22,717) -- -- -- (39,013)
------------- ------------ ------------ ------------ -------------- --------------
Total distributions ...................... (27,622,495) (32,567,867) (6,849,396) (3,371,401) (73,057,697) (95,883,974)
------------- ------------ ------------ ------------ -------------- --------------
CAPITAL SHARE TRANSACTIONS:
Institutional Class:1
Proceeds from sales of shares ....... 307,700,344 272,801,653 205,663,032 101,367,709 180,896,990 311,505,932
Dividend reinvestments .............. 23,054,790 26,526,583 5,233,132 2,998,349 52,858,974 77,243,309
Cost of shares redeemed ............. (442,751,352) (208,734,293) (125,891,365) (48,879,321) (691,441,964) (308,695,051)
------------- ------------ ------------ ------------ -------------- --------------
Increase (decrease) in net assets from
Institutional Class transactions ....... (111,996,218) 90,593,943 85,004,799 55,486,737 (457,686,000) 80,054,190
------------- ------------ ------------ ------------ -------------- --------------
Investment Class:2
Proceeds from sales of shares ....... 15,767,665 6,686,001 223,437 273,958 12,376,239 7,637,574
Dividend reinvestments .............. 601,043 193,256 12,034 9,200 591,381 212,423
Cost of shares redeemed ............. (11,145,258) (4,605,682) (312,579) (444,705) (7,042,548) (1,796,349)
------------- ------------ ------------ ------------ -------------- --------------
Increase (decrease) in net assets from
Investment Class transactions .......... 5,223,450 2,273,575 (77,108) (161,547) 5,925,072 6,053,648
------------- ------------ ------------ ------------ -------------- --------------
Premier Class:3
Proceeds from sales of shares ....... -- -- -- -- -- --
Dividend reinvestments .............. -- -- -- -- -- --
Cost of shares redeemed ............. -- -- -- -- -- --
------------- ------------ ------------ ------------ -------------- --------------
Increase in net assets from Premier
Class transactions .................... -- -- -- -- -- --
------------- ------------ ------------ ------------ -------------- --------------
Net increase (decrease) in net assets
from capital transactions .............. (106,772,768) 92,867,518 84,927,691 55,325,190 (451,760,928) 86,107,838
------------- ------------ ------------ ------------ -------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .. (102,816,584) 54,199,590 84,854,117 52,889,223 (448,699,820) 1,510,088
------------- ------------ ------------ ------------ -------------- --------------
NET ASSETS
Beginning of year ..................... 630,068,855 575,869,265 107,694,894 54,805,671 1,266,257,804 1,264,747,716
------------- ------------ ------------ ------------ -------------- --------------
End of year ........................... $ 527,252,271 $630,068,855 $192,549,011 $107,694,894 $ 817,557,984 $1,266,257,804
============= ============ ============ ============ ============== ==============
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEARS ENDED OCTOBER 31,
2000 1999 2000 1999
SHORT-TERM HIGH YIELD
FIXED INCOME BOND
------------ ----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income ................. $ 2,025,420 $ 1,461,521 $ 42,159,528 $ 28,129,258
Net realized gain (loss) on investment
and foreign currency transactions .. (45,515) (15,249) (9,811,851) (1,263,178)
Net change in unrealized appreciation/
depreciation on investments
and foreign currencies .............. 136,254 (376,966) (20,633,760) (2,941,646)
------------ ------------ ------------- ------------
Net increase (decrease) in net assets
from operations ........................ 2,116,159 1,069,306 11,713,917 23,924,434
------------ ------------ ------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Institutional Class 1 ............... (2,025,420) (1,459,090) (41,654,085) (27,807,069)
Investment Class 2 .................. -- -- (529,789) (293,643)
Net realized gain from investment
transactions
Institutional Class 1 ............... -- (37,118) -- --
Investment Class 2 .................. -- -- -- --
------------ ------------ ------------- ------------
Total distributions ...................... (2,025,420) (1,496,208) (42,183,874) (28,100,712)
------------ ------------ ------------- ------------
CAPITAL SHARE TRANSACTIONS:
Institutional Class:1
Proceeds from sales of shares ....... 68,270,962 17,885,934 97,331,373 239,156,171
Dividend reinvestments .............. 395,880 305,266 37,846,981 27,632,128
Cost of shares redeemed ............. (61,034,540) (11,212,834) (393,600,057) (37,397,182)
------------ ------------ ------------- ------------
Increase (decrease) in net assets from
Institutional Class transactions ....... 7,632,302 6,978,366 (258,421,703) 229,391,117
------------ ------------ ------------- ------------
Investment Class:2
Proceeds from sales of shares ....... -- -- 10,304,730 7,699,239
Dividend reinvestments .............. -- -- 493,135 292,542
Cost of shares redeemed ............. -- -- (10,250,705) (4,852,943)
------------ ------------ ------------- ------------
Increase (decrease) in net assets from
Investment Class transactions .......... -- -- 547,160 3,138,838
------------ ------------ ------------- ------------
Premier Class:3
Proceeds from sales of shares ....... -- -- 272,456,160 --
Dividend reinvestments .............. -- -- -- --
Cost of shares redeemed ............. -- -- -- --
------------ ------------ ------------- ------------
Increase in net assets from Premier
Class transactions .................... -- -- 272,456,160 --
------------ ------------ ------------- ------------
Net increase (decrease) in net assets
from capital transactions .............. 7,632,302 6,978,366 14,581,617 232,529,955
------------ ------------ ------------- ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .. 7,723,041 6,551,464 (15,888,340) 228,353,677
------------ ------------ ------------- ------------
NET ASSETS
Beginning of year ..................... 26,752,922 20,201,458 321,122,706 92,769,029
------------ ------------ ------------- ------------
End of year ........................... $ 34,475,963 $ 26,752,922 $ 305,234,366 $321,122,706
============ ============ ============= ============
<FN>
--------------------------------------------------------------------------------
1 On February 28, 2000 the Institutional Shares were renamed the Institutional
Class.
2 On February 28, 2000 the Service Shares were renamed the Investment Class.
3 The High Yield Bond -- Premier Class began operations on October 31, 2000.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
76-77
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
MUNICIPAL BOND -- INSTITUTIONAL CLASS 1
<TABLE>
<CAPTION>
FOR THE YEARS ENDED OCTOBER 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR .................... $10.66 $11.30 $11.12 $10.99 $10.86
------ ------ ------ ------ ------
INCOME FROMINVESTMENT OPERATIONS
Net investment income .............................. 0.56 0.51 0.53 0.57 0.60
Net realized and unrealized gain (loss)
on investment transactions ....................... 0.11 (0.59) 0.18 0.22 0.13
------ ------ ------ ------ ------
Total from investment operations ...................... 0.67 (0.08) 0.71 0.79 0.73
------ ------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .............................. (0.56) (0.51) (0.53) (0.57) (0.60)
Net realized gain from investment
transactions ..................................... -- (0.05) -- (0.09) --
------ ------ ------ ------ ------
Total distributions ................................... (0.56) (0.56) (0.53) (0.66) (0.60)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR .......................... $10.77 $10.66 $11.30 $11.12 $10.99
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN ............................... 6.45% (0.78)% 6.58% 7.49% 6.90%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of year
(000s omitted) ................................... $514,784 $622,896 $570,743 $361,461 $252,152
Ratio of expenses to average net assets
(including expense limitations and
including interest expense) ...................... 0.59% -- -- -- --
Ratio of expenses to average net assets
(excluding expense limitations and
including interest expense) ...................... 0.59% 0.58% 0.58% 0.61% 0.61%
Ratio of expenses to average net assets
(including expense limitations and
excluding interest expense) ...................... 0.55% 0.55% 0.54% 0.54% 0.55%
Ratio of net investment income to
average net assets ............................... 5.25% 4.62% 4.71% 5.19% 5.50%
Ratio of net investment income to
average net assets (excluding expense
limitations) ..................................... 5.21% 4.59% 4.68% 5.12% 5.44%
Portfolio turnover rate ............................ 29% 27% 42% 67% 66%
<FN>
--------------------------------------------------------------------------------
1 On February 28, 2000 the Institutional Shares were renamed the Institutional
Class.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
78
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MUNICIPAL BOND -- INVESTMENT CLASS 1 FOR THE PERIOD
FOR THE YEARS ENDED JULY 30, 1997 2
OCTOBER 31, THROUGH
2000 1999 1998 OCTOBER 31, 1997
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ....................... $10.66 $11.30 $11.11 $11.11
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ................................... 0.53 0.49 0.50 0.14
Net realized and unrealized gain (loss)
on investment transactions ............................ 0.11 (0.59) 0.19 --3
------ ------ ------ ------
Total from investment operations ........................... 0.64 (0.10) 0.69 0.14
------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ................................... (0.53) (0.49) (0.50) (0.14)
Net realized gain from investment
transactions .......................................... -- (0.05) -- --
------ ------ ------ ------
Total distributions ........................................ (0.53) (0.54) (0.50) (0.14)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ............................. $10.77 $10.66 $11.30 $11.11
====== ====== ====== ======
TOTAL INVESTMENT RETURN .................................... 6.21% (1.01)% 6.42% 1.22%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (000s omitted) ................ $12,468 $7,172 $5,126 $192
Ratio of expenses to average net assets
(including expense limitations and
including interest expense) ........................... 0.83% -- -- --
Ratio of expenses to average net assets
(excluding expense limitations and
including interest expense) ........................... 0.83% 0.82% 0.85% 0.85%4
Ratio of expenses to average net assets
(including expense limitations and
excluding interest expense) ........................... 0.80% 0.80% 0.79% 0.79%4
Ratio of net investment income to
average net assets .................................... 5.01% 4.33% 4.41% 4.95%4
Ratio of net investment income to
average net assets (excluding expense
limitations) .......................................... 4.98% 4.31% 4.35% 4.89%4
Portfolio turnover rate ................................. 29% 27% 42% 67%
<FN>
--------------------------------------------------------------------------------
1 On February 28, 2000 the Service Shares were renamed the Investment Class.
2 Commencement of operations.
3 Less than $0.01.
4 Annualized.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
79
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SHORT-TERM MUNICIPAL BOND -- INSTITUTIONAL CLASS 1
FOR THE YEARS ENDED OCTOBER 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ................... $10.11 $10.37 $10.28 $10.13 $10.13
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ............................. 0.50 0.40 0.46 0.52 0.54
Net realized and unrealized gain (loss)
on investment transactions ...................... 0.05 (0.26) 0.09 0.16 0.04
------ ------ ------ ------ ------
Total from investment operations ..................... 0.55 0.14 0.55 0.68 0.58
------ ------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ............................. (0.50) (0.40) (0.46) (0.52) (0.54)
Net realized gain from investment
transactions .................................... -- -- -- (0.01) (0.04)
------ ------ ------ ------ ------
Total distributions .................................. (0.50) (0.40) (0.46) (0.53) (0.58)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR ......................... $10.16 $10.11 $10.37 $10.28 $10.13
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN .............................. 5.52% 1.33% 5.51% 6.93% 5.90%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of year
(000s omitted) .................................. $192,357 $107,427 $54,369 $19,950 $9,132
Ratio of expenses to average net assets
(including expense limitations and
including interest expense) ..................... 0.71% -- -- -- --
Ratio of expenses to average net assets
(excluding expense limitations and
including interest expense) ..................... 0.71% 0.80% 0.82% 1.02% 1.58%
Ratio of expenses to average net assets
(including expense limitations and
excluding interest expense) ..................... 0.55% 0.55% 0.55% 0.53% 0.53%
Ratio of net investment income to
average net assets .............................. 5.26% 3.92% 4.46% 5.14% 5.34%
Ratio of net investment income to
average net assets (excluding expense
limitations) .................................... 5.10% 3.67% 4.19% 4.65% 4.29%
Portfolio turnover rate ........................... 52% 64% 28% 95% 129%
<FN>
--------------------------------------------------------------------------------
1 On February 28, 2000 the Institutional Shares were renamed the Institutional
Class.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
80
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SHORT-TERM MUNICIPAL BOND -- INVESTMENT CLASS 1 FOR THE PERIOD
FOR THE YEARS DECEMBER 3, 1997 2
ENDED OCTOBER 31, THROUGH
2000 1999 OCTOBER 31, 1998
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ........................... $10.11 $10.37 $10.28
------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ....................................... 0.47 0.37 0.39
Net realized and unrealized gain (loss)
on investment transactions ................................ 0.05 (0.26) 0.09
------ ------ ------
Total from investment operations ............................... 0.52 0.11 0.48
------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ....................................... (0.47) (0.37) (0.39)
Net realized gain from investment
transactions .............................................. -- -- --
------ ------ ------
Total distributions ............................................ (0.47) (0.37) (0.39)
------ ------ ------
NET ASSET VALUE, END OF PERIOD ................................. $10.16 $10.11 $10.37
====== ====== ======
TOTAL INVESTMENT RETURN ........................................ 5.24% 1.08% 4.81%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period
(000s omitted) ............................................ $192 $268 $436
Ratio of expenses to average net assets
(including expense limitations and
including interest expense) ............................... 0.96% -- --
Ratio of expenses to average net assets
(excluding expense limitations and
including interest expense) ............................... 0.96% 1.00% 1.02%3
Ratio of expenses to average net assets
(including expense limitations and
excluding interest expense) ............................... 0.80% 0.80% 0.80%3
Ratio of net investment income to
average net assets ........................................ 4.78% 3.91% 4.20%3
Ratio of net investment income to
average net assets (excluding expense
limitations) .............................................. 4.62% 3.71% 3.98%3
Portfolio turnover rate ..................................... 52% 64% 26%
<FN>
--------------------------------------------------------------------------------
1 On February 28, 2000 the Service Shares were renamed the Investment Class.
2 Commencement of operations.
3 Annualized.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
81
<PAGE>
Domestic Fixed IncomeFunds
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED INCOME -- INSTITUTIONAL CLASS 1
FOR THE YEARS ENDED OCTOBER 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ................... $10.17 $10.88 $10.76 $10.51 $10.62
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ............................. 0.67 0.64 0.65 0.68 0.68
Net realized and unrealized gain (loss)
on investment transactions ...................... 0.07 (0.54) 0.20 0.25 (0.04)
------ ------ ------ ------ ------
Total from investment operations ..................... 0.74 0.10 0.85 0.93 0.64
------ ------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ............................. (0.67) (0.64) (0.65) (0.68) (0.68)
Net realized gain from investment
transactions .................................... -- (0.17) (0.08) -- (0.07)
------ ------ ------ ------ ------
Total distributions .................................. (0.67) (0.81) (0.73) (0.68) (0.75)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR ......................... $10.24 $10.17 $10.88 $10.76 $10.51
====== ====== ====== ====== ======
Total investment return .............................. 7.55% 0.86% 8.25% 9.22% 6.27%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of year
(000s omitted) .................................. $804,089 $1,258,869 $1,263,215 $1,103,121 $758,003
Ratio of expenses to average net assets
(including expense limitations and
including interest expense) ..................... 0.54% -- -- -- --
Ratio of expenses to average net assets
(excluding expense limitations
and including interest expense) ................. 0.54% 0.55% 0.56% 0.60% 0.61%
Ratio of expenses to average net assets
(including expense limitations and
excluding interest expense) ..................... 0.54% 0.55% 0.55% 0.55% 0.55%
Ratio of net investment income to
average net assets .............................. 6.60% 6.08% 6.01% 6.50% 6.52%
Ratio of net investment income to
average net assets (excluding expense
limitations) .................................... 6.60% 6.08% 6.00% 6.45% 6.46%
Portfolio turnover rate ........................... 116% 157% 122% 178% 176%
<FN>
--------------------------------------------------------------------------------
1 On February 28, 2000 the Institutional Shares were renamed the Institutional
Class.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
82
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FIXED INCOME -- INVESTMENT CLASS 1 FOR THE PERIOD
FOR THE YEARS FEBRUARY 11, 1998 2
ENDED OCTOBER 31, THROUGH
2000 1999 OCTOBER 31, 1998
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ............................... $10.17 $10.88 $10.75
------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ........................................... 0.59 0.61 0.45
Net realized and unrealized gain (loss)
on investment transactions .................................... 0.07 (0.54) 0.13
------ ------ ------
Total from investment operations ................................... 0.66 0.07 0.58
------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ........................................... (0.59) (0.61) (0.45)
Net realized gain from investment
transactions .................................................. -- (0.17) --
------ ------ ------
Total distributions ................................................ (0.59) (0.78) (0.45)
------ ------ ------
NET ASSET VALUE, END OF PERIOD ..................................... $10.24 $10.17 $10.88
====== ====== ======
TOTAL INVESTMENT RETURN ............................................ 7.19% 0.65% 5.28%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period
(000s omitted) ................................................ $13,469 $7,389 $1,533
Ratio of expenses to average net assets
(including expense limitations and
including interest expense) ................................... 0.79% -- --
Ratio of expenses to average net assets
(excluding expense limitations
and including interest expense) ............................... 0.79% 0.80% 0.87%3
Ratio of expenses to average net assets
(including expense limitations and
excluding interest expense) ................................... 0.79% 0.80% 0.80%3
Ratio of net investment income to
average net assets ............................................ 6.40% 5.86% 5.77%3
Ratio of net investment income to
average net assets (excluding expense
limitations) .................................................. 6.40% 5.86% 5.70%3
Portfolio turnover rate ......................................... 116% 157% 122%
<FN>
--------------------------------------------------------------------------------
1 On February 28, 2000 the Service Shares were renamed the Investment Class.
2 Commencement of operations.
3 Annualized.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
83
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SHORT-TERM FIXED INCOME -- INSTITUTIONAL CLASS 1
FOR THE YEARS ENDED OCTOBER 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR .................... $ 9.96 $10.13 $10.06 $10.00 $10.01
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income .............................. 0.63 0.59 0.60 0.58 0.60
Net realized and unrealized gain (loss)
on investment transactions ....................... 0.01 (0.14) 0.07 0.06 (0.01)
------ ------ ------ ------ ------
Total from investment operations ...................... 0.64 0.45 0.67 0.64 0.59
------ ------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .............................. (0.63) (0.60) (0.60) (0.58) (0.60)
Net realized gain from investment
transactions ..................................... -- (0.02) -- -- --
------ ------ ------ ------ ------
Total distributions ................................... (0.63) (0.62) (0.60) (0.58) (0.60)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR .......................... $ 9.97 $ 9.96 $10.13 $10.06 $10.00
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN ............................... 6.63% 4.49% 6.85% 6.61% 6.09%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of year
(000s omitted) ................................... $34,476 $26,753 $20,201 $17,083 $6,751
Ratio of expenses to average net assets
(including expense limitations and
including interest expense) ...................... 0.87% -- -- -- --
Ratio of expenses to average net assets
(excluding expense limitations
and including interest expense) .................. 0.87% 1.29% 0.93% 1.09% 1.29%
Ratio of expenses to average net assets
(including expense limitations and
excluding interest expense) ...................... 0.55% 0.55% 0.55% 0.53% 0.53%
Ratio of net investment income to
average net assets ............................... 6.35% 6.03% 5.92% 5.77% 6.00%
Ratio of net investment income to
average net assets (excluding expense
limitations) ..................................... 6.03% 5.29% 5.54% 5.21% 5.24%
Portfolio turnover rate ............................ 89% 142% 98% 186% 124%
<FN>
--------------------------------------------------------------------------------
1 On February 28, 2000 the Institutional Shares were renamed the Institutional
Class.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
84
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
HIGH YIELD BOND -- INSTITUTIONAL CLASS 1 FOR THE PERIOD
FOR THE YEARS MARCH 16, 1998 2
ENDED OCTOBER 31, THROUGH
2000 1999 OCTOBER 31, 1998
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ............................... $ 9.08 $ 8.71 $10.00
------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ........................................... 1.12 1.03 0.54
Net realized and unrealized gain (loss)
on investments and foreign currencies ......................... (0.85) 0.37 (1.29)
------ ------ ------
Total from investment operations ................................... 0.27 1.40 (0.75)
------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ........................................... (1.12) (1.03) (0.54)
Net realized gain from investment
transactions .................................................. -- -- --
------ ------ ------
Total distributions ................................................ (1.12) (1.03) (0.54)
------ ------ ------
NET ASSET VALUE, END OF PERIOD ..................................... $ 8.23 $ 9.08 $ 8.71
====== ====== ======
Total investment return ............................................ 2.45% 16.54% (7.84)%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period
(000s omitted) ................................................ $29,580 $318,247 $92,668
Ratio of expenses to average net assets
(including expense limitations and
including interest expense) ................................... 0.68% -- --
Ratio of expenses to average net assets
(excluding expense limitations
and including interest expense) ............................... 0.72% 0.75% 0.82%3
Ratio of expenses to average net assets
(including expense limitations and
excluding interest expense) ................................... 0.65% 0.65% 0.65%3
Ratio of net investment income to
average net assets ............................................ 12.29% 11.37% 9.34%3
Ratio of net investment income to
average net assets (excluding expense
limitations) .................................................. 12.25% 11.27% 9.17%3
Portfolio turnover rate ......................................... 151% 180% 131%
<FN>
--------------------------------------------------------------------------------
1 On February 28, 2000 the Institutional Shares were renamed the Institutional
Class.
2 Commencement of operations.
3 Annualized.
THE HIGH YIELD BOND -- PREMIER CLASS COMMENCED OPERATIONS ON OCTOBER 31, 2000.
THEREFORE, NO FINANCIAL HIGHLIGHTS ARE PRESENTED.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
85
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
HIGH YIELD BOND -- INVESTMENT CLASS 1 FOR THE PERIOD
FOR THE YEARS SEPTEMBER 15, 1998 2
ENDED OCTOBER 31, THROUGH
2000 1999 OCTOBER 31, 1998
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ............................. $ 9.07 $ 8.71 $10.28
------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income ......................................... 1.10 1.00 0.11
Net realized and unrealized gain (loss)
on investments and foreign currencies ....................... (0.84) 0.36 (1.57)
------ ------ ------
Total from investment operations ................................. 0.26 1.36 (1.46)
------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ......................................... (1.10) (1.00) (0.11)
Net realized gain from investment
transactions ................................................ -- -- --
------ ------ ------
Total distributions .............................................. (1.10) (1.00) (0.11)
------ ------ ------
NET ASSET VALUE, END OF PERIOD ................................... $ 8.23 $ 9.07 $ 8.71
====== ====== ======
Total investment return .......................................... 2.34% 16.07% 0.27%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period
(000s omitted) .............................................. $3,128 $2,875 $81
Ratio of expenses to average net assets
(including expense limitations and
including interest expense) ................................. 0.91% -- --
Ratio of expenses to average net assets
(excluding expense limitations
and including interest expense) ............................. 0.96% 1.00% 1.05%3
Ratio of expenses to average net assets
(including expense limitations and
excluding interest expense) ................................. 0.90% 0.90% 0.90%3
Ratio of net investment income to
average net assets .......................................... 12.96% 11.24% 11.89%3
Ratio of net investment income to
average net assets (excluding expense
limitations) ................................................ 12.91% 11.14% 11.74%3
Portfolio turnover rate ....................................... 151% 180% 131%
<FN>
--------------------------------------------------------------------------------
1 On February 28, 2000 the Service Shares were renamed the Investment Class.
2 Commencement of operations.
3 Annualized.
THE HIGH YIELD BOND -- PREMIER CLASS COMMENCED OPERATIONS ON OCTOBER 31, 2000.
THEREFORE, NO FINANCIAL HIGHLIGHTS ARE PRESENTED.
</FN>
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
86
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. ORGANIZATION
Morgan Grenfell Investment Trust (the "Trust") was organized as a Delaware
business trust on September 13, 1993. The Trust is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. The Trust currently consists of fifteen separate investment portfolios
(collectively, the "Funds"). The accompanying financial statements and notes
thereto relate to Municipal Bond, Short-Term Municipal Bond, Fixed Income,
Short-Term Fixed Income and High Yield Bond (the "Funds"), each formerly Morgan
Grenfell Funds. The Funds' prospectuses provide a description of each Fund's
investment objectives, policies and strategies. The Domestic Funds began
operations and offering shares of beneficial interest in securities on the
following dates:
COMMENCEMENT
FUND OF OPERATIONS
---- -------------
Municipal Bond December 13, 1991
Short-Term Municipal Bond March 6, 1995
Fixed Income September 18, 1992
Short-Term Fixed Income March 13, 1995
High Yield Bond March 16, 1998
B. VALUATION OF SECURITIES
The Funds' investments are valued each business day by independent pricing
services approved by the Trustees. Other investments in High Yield Bond listed
or traded on national stock exchanges or other domestic or foreign exchanges are
valued based on the closing price of the securities traded on that exchange
prior to the time when the Fund's assets are valued. Short-term obligations with
remaining maturities of 60 days or less are valued at amortized cost which, with
accrued interest, approximates fair market value. Securities for which
quotations are not readily available are stated at fair value as determined in
good faith under procedures established by and under the general supervision of
the Board of Trustees.
C. SECURITIES TRANSACTIONS AND INTEREST INCOME
Each of the Funds earns income, net of expenses, daily on its investment.
Securities transactions are accounted for on a trade date basis. Dividend
income, less foreign taxes withheld, if any, is recorded on the ex-dividend date
or upon receipt of ex-dividend notification in the case of certain foreign
securities. Interest income is recorded on the accrual basis and includes
amortization of premium and accretion of discount on investments. Expenses are
recorded as incurred. Realized gains and losses from the securities transactions
are recorded on the identified cost basis.
D. DISTRIBUTIONS
It is each Fund's policy to declare dividends daily and pay them monthly to
shareholders from net investment income. Dividends and distributions payable to
shareholders are recorded by the Fund on the ex-dividend date. Distributions of
net realized short-term and long-term capital gains, if any, earned by the Fund
are made at least annually to the extent they exceed any capital loss
carryforwards.
E. REPURCHASE AGREEMENTS
Each of the Funds may enter into repurchase agreements with financial
institutions deemed to be creditworthy by the Funds' investment advisor, subject
to the seller's agreement to repurchase such securities at a mutually agreed
upon price. Securities purchased subject to repurchase agreements are deposited
with the Funds' custodian, and, pursuant to the terms of the repurchase
agreement, must have an aggregate market value greater than or equal to the
repurchase price plus accrued interest at all times. If the value of the
underlying securities falls below the value of the repurchase price plus accrued
interest, the Fund will require the seller to deposit additional collateral by
the next business day. If the request for additional collateral is not met, or
the seller defaults on its repurchase obligation, the Funds maintain the right
to sell the underlying securities at market value and may claim any resulting
loss against the seller. However, in the event of default or bankruptcy by the
seller, realization and/or retention of the collateral may be subject to legal
proceedings.
Each Fund may enter into tri-party repurchase agreements with broker-dealers and
domestic banks. The third party, which is the broker's custodial bank, holds the
collateral in a separate account until the repurchase agreement matures. The
agreement ensures that the collateral's market value, including any accrued
interest, is adequate to cover the agreement if the broker defaults.
--------------------------------------------------------------------------------
87
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
F. FORWARD FOREIGN CURRENCY CONTRACTS
The High Yield Bond Fund may enter into forward foreign currency contracts for
the purpose of settling specific purchases or sales of securities denominated in
a foreign currency or with respect to the Fund's investments. The net US dollar
value of foreign currency underlying all contractual commitments held by the
Fund and the resulting unrealized appreciation or depreciation are determined
using prevailing exchange rates. With respect to forward foreign currency
contracts, losses in excess of amounts recognized in the Statement of Assets
andLiabilities may arise due to changes in the value of the foreign currency or
if the counterparty does not perform under the contract.
G. SHORT SALE NOTE
The High Yield Bond Fund may engage in short sales in order to profit from an
anticipated decline in the value of a security. The Fund may also engage in
short sales to attempt to limit its exposure to a possible market decline in the
value of its portfolio securities through short sales of securities which the
investment advisor believes possess volatility characteristics similar to those
being hedged. This obligates the Fund to replace the security borrowed by
purchasing the security at current market value sometime in the future. The Fund
will incur a loss if the price of the security increases between the date of the
short sale and the date on which the Fund replaces the borrowed security. The
Fund will realize a gain if the price of the security declines between those
dates. Until the Fund replaces the borrowed security, the Fund will maintain a
segregated account with cash and/or liquid securities sufficient to cover its
short position on a daily basis.At October 31, 2000, the value of securities
sold short amounted to $200,000, against which collateral of $658,531 was held.
H. FEDERAL INCOME TAXES
It is each Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and distribute substantially
all of its taxable income to shareholders. Therefore, no federal income tax
provision is required.
The Fund may periodically make reclassifications among certain of its capital
accounts as a result of differences in the characterization and allocation of
certain income and capital gain distributions determined annually in accord-
ance with federal tax regulations which may differ from accounting principles
generally accepted in the United States.
I. CASH
Deposits held at Brown Brother's Harriman ("BBH"), the Fund's custodian, in a
variable rate account are classified as cash. At October 31, 2000 the interest
rate was 6.03%, which resets on a periodic basis. Amounts on deposit are
generally available on the same business day.
J. EXPENSES
Expenses that are directly related to a Fund are charged directly to that Fund.
Other operating expenses of the Trust are prorated to the Funds on the basis of
relative net assets. DeAM absorbed all expenses of organizing the Trust.
K. NET ASSET VALUE PER SHARE
The net asset value per share is calculated on a daily basis by dividing the
assets of each Fund or Class, less its liabilities, by the number of outstanding
shares, of the Fund or Class.
L. CLASSES
Class-specific expenses, such as service plan fees, are borne by that class.
Income, expenses and realized and unrealized gains/losses are allocated to the
respective classes on the basis of relative daily net assets.
M. ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect reported amounts in the financial statements. Actual
results could differ from those estimates.
NOTE 2 -- FEES AND TRANSACTIONS WITH AFFILIATES
By an agreement dated August 27, 1998, the Trust entered into an administration
agreement with Deutsche Asset Management Inc. ("DeAM, Inc."), formerly Morgan
Grenfell Inc. (the "Administrator"), an affiliate of Deutsche Bank AG, pursuant
to which the Administrator will receive, on a monthly basis, a fee at an annual
rate of 0.12% based upon the average daily net assets of each Fund.
The Administrator generally assists in all matters relating to the
administration of the Fund, including the coordination and monitoring of any
third parties furnishing services to the Fund, preparation and maintenance of
financial accounting records, and the provision of necessary office space,
equipment and personnel to perform administrative and clerical functions. The
Administrator is also responsible for engaging an accounting agent, custodian
and transfer agent for the Fund's operations. Fees for services rendered by the
accounting agent and the transfer
--------------------------------------------------------------------------------
88
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
agent are paid by the Administrator and not the Fund. Effective November 22,
1999, the Trust has entered into an agreement with Investment Company Capital
Corp., an indirect wholly owned subsidiary of Deutsche Bank AG, to provide
transfer agency services to the Trust, replacing DST Systems,Inc.
Under the Advisory agreement with the Trust, DeAM, Inc. serves as the Investment
Advisor ("Advisor") for each Fund. Under the agreement, DeAM, Inc. receives on a
monthly basis, a fee at an annual rate based on the average daily net assets of
each Fund as follows:
ANNUAL
FUND FEES
---- ------
Municipal Bond 0.40%
Short-Term Municipal Bond 0.40%
Fixed Income 0.40%
Short-Term Fixed Income 0.40%
High Yield Bond 0.50%
The Investment Advisor has contractually agreed to reduce its advisory fees and
reimburse each Fund through February 28, 2002, to the extent necessary, to limit
each Fund's operating expenses to a specified percentage of its average daily
net assets as follows:
INSTITUTIONAL INVESTMENT PREMIER
FUND SHARES SHARES SHARES
---- ------------- ---------- -------
Municipal Bond 0.55% 0.80% --
Short-Term
Municipal Bond 0.55% 0.80% --
Fixed Income 0.55% 0.80% --
Short-Term
Fixed Income 0.55% 0.80% --
High Yield Bond 0.65% 0.90% 0.50%
Certain officers and/or Trustees of the Trust are affiliated with the
Administrator or the Advisor.
ICC Distributors, Inc. provides distribution services to the Fund.
The Trust, on behalf of each Fund, has adopted a service plan pursuant to which
each fund that offers an Investment Class pays service fees at an aggregate
annual rate of up to 0.25% of the Investment Class average daily net assets.
Service plan fees are payable to Service Organizations that have agreements with
the Trust, and are intended to compensate Service Organizations for providing
personal services and/or account maintenance services to their customers who
invest in the Investment Class.
At October 31, 2000 the Funds were participants in a revolving credit facility
with Fleet National Bank in the amount of $50,000,000, which expires on February
27, 2001. A commitment fee on the average daily amount of the available
commitment is payable on a quarterly basis and apportioned among all
participants based on net assets. During the year ended October 31, 2000, the
participating Funds incurred commitment fees under the agreement which have been
allocated to the participating funds based on their relative net assets. No
amounts were drawn down or outstanding for these Funds under the credit facility
for the year ended October 31, 2000. The following is a summary of borrowings
made during the year ended October 31, 2000:
WEIGHTED WEIGHTED
MAXIMUM AVERAGE AVERAGE
AMOUNT BALANCE INTEREST INTEREST
FUND BORROWED OUTSTANDING PAID RATE
---- -------- ----------- -------- --------
Municipal Bond $18,733,600 $13,683,600 $ 3,945 5.28%
Short-Term
Municipal Bond 3,800,000 3,800,000 539 5.20%
Fixed Income 14,620,000 14,620,000 3,097 7.75%
High Yield Bond 18,270,000 8,588,400 33,168 5.65%
NOTE 3 -- PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments, other
than short-term obligations, for the year ended October 31, 2000, were as
follows:
FUND PURCHASES SALES
---- --------- --------
Municipal Bond $ 151,488,641 $ 266,766,772
Short-Term Municipal Bond 146,256,712 58,521,250
Fixed Income 1,259,962,283 1,622,873,266
Short-Term Fixed Income 44,395,026 26,813,040
High Yield Bond 499,854,728 510,682,513
For federal income tax purposes, the tax basis of investments held, aggregate
gross unrealized appreciation and aggregate gross unrealized depreciation were
as follows on October 31, 2000:
TAX UNREALIZED UNREALIZED
FUND COST APPRECIATION DEPRECIATION
---- ------ ------------ ------------
Municipal Bond $524,337,785 $4,406,364 $ 9,199,579
Short-Term
Municipal Bond 188,921,868 556,292 797,297
Fixed Income 810,229,328 8,184,060 13,170,097
Short-Term
Fixed Income 34,511,653 115,166 178,057
High Yield Bond 326,039,715 3,286,159 35,897,198
--------------------------------------------------------------------------------
89
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 4 -- SHARES OF BENEFICIAL INTEREST
At October 31, 2000, there were an unlimited number of shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
MUNICIPAL BOND
-----------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES INVESTMENT CLASS SHARES
------------------------------------------------------- -----------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000 OCTOBER 31, 1999
----------- ------------- ----------- ------------- ---------- ------------ -------- -----------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- ------------- ---------- ------------ -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sold 28,906,674 $307,700,344 24,412,161 $ 272,801,653 1,479,501 $ 15,767,665 618,354 $ 6,686,001
Reinvested 2,163,359 23,054,790 2,397,143 26,526,583 56,444 601,043 17,429 193,256
Redeemed (41,680,031) (442,751,352) (18,898,905) (208,734,293) (1,051,099) (11,145,258) (416,594) (4,605,682)
----------- ------------- ----------- ------------- ---------- ------------ -------- -----------
Net increase
(decrease) (10,609,998) $(111,996,218) 7,910,399 $ 90,593,943 484,846 $ 5,223,450 219,189 $ 2,273,575
=========== ============= =========== ============= ========== ============ ======== ===========
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM MUNICIPAL BOND
-----------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES INVESTMENT CLASS SHARES
------------------------------------------------------- -----------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000 OCTOBER 31, 1999
----------- ------------- ----------- ------------- ---------- ------------ -------- -----------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- ------------- ---------- ------------ -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sold 20,219,776 $ 205,663,032 9,833,188 $ 101,367,709 22,056 $ 223,437 26,418 $ 273,958
Reinvested 516,174 5,233,132 291,963 2,998,349 1,187 12,034 894 9,200
Redeemed (12,431,358) (125,891,365) (4,747,479) (48,879,321) (30,798) (312,579) (42,899) (444,705)
----------- ------------- ----------- ------------- ---------- ------------ -------- -----------
Net increase
(decrease) 8,304,592 $ 85,004,799 5,377,672 $ 55,486,737 (7,555) $ (77,108) (15,587) $(161,547)
=========== ============= =========== ============= ========== ============ ======== ===========
</TABLE>
<TABLE>
<CAPTION>
FIXED INCOME
-----------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES INVESTMENT CLASS SHARES
------------------------------------------------------- -----------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000 OCTOBER 31, 1999
----------- ------------- ----------- ------------- ---------- ------------ -------- -----------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- ------------- ---------- ------------ -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sold 17,889,596 $ 180,896,990 29,729,916 $ 311,505,932 1,230,749 $12,376,239 738,879 $ 7,637,574
Reinvested 5,243,652 52,858,974 7,332,710 77,243,309 58,579 591,381 19,205 212,423
Redeemed (68,353,201) (691,441,964) (29,391,506) (308,695,051) (699,840) (7,042,548) (172,515) (1,796,349)
----------- ------------- ----------- ------------- ---------- ------------ -------- -----------
Net increase
(decrease) (45,219,953) $(457,686,000) 7,671,120 $ 80,054,190 589,488 $ 5,925,072 585,569 $ 6,053,648
=========== ============= =========== ============= ========== ============ ======== ===========
</TABLE>
--------------------------------------------------------------------------------
90
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
SHORT-TERM FIXED INCOME
-----------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES INVESTMENT CLASS SHARES
------------------------------------------------------- -----------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000 OCTOBER 31, 1999
----------- ------------- ----------- ------------- ---------- ------------ -------- -----------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- ------------- ---------- ------------ -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sold 6,881,989 $ 68,270,962 1,781,956 $ 17,885,934 -- $ -- -- $ --
Reinvested 39,870 395,880 30,765 305,266 -- -- -- --
Redeemed (6,149,782) (61,034,540) (1,119,284) (11,212,834) -- -- -- --
----------- ------------- ----------- ------------- ---------- ----------- -------- --------
Net increase 772,077 $ 7,632,302 693,437 $ 6,978,366 -- $ -- -- $ --
=========== ============= =========== ============= ========== =========== ======== ========
</TABLE>
<TABLE>
<CAPTION>
HIGH YIELD BOND
-----------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES INVESTMENT CLASS SHARES
------------------------------------------------------- -----------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999 OCTOBER 31, 2000 OCTOBER 31, 1999
----------- ------------- ----------- ------------- ---------- ------------ -------- -----------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- ------------- ---------- ------------ -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sold 10,717,231 $ 97,331,373 25,505,970 $ 239,156,171 1,106,735 $ 10,304,730 806,586 $ 7,699,239
Reinvested 4,155,518 37,846,981 2,991,875 27,632,128 53,871 493,135 31,716 292,542
Redeemed (46,330,540) (393,600,057) (4,080,947) (37,397,182) (1,097,345) (10,250,705) (530,749) (4,852,943)
----------- ------------- ----------- ------------- ---------- ----------- -------- -----------
Net increase
(decrease) (31,457,791) $(258,421,703) 24,416,898 $ 229,391,117 63,261 $ 547,160 307,553 $ 3,138,838
=========== ============= =========== ============= ========== =========== ======== ===========
</TABLE>
HIGH YIELD BOND
----------------------
PREMIER CLASS SHARES 1
----------------------
FOR THE
YEAR ENDED
OCTOBER 31, 1999
-------- -----------
SHARES AMOUNT
-------- -----------
Sold 33,128,694 $272,456,160
Reinvested -- --
Redeemed -- --
---------- ------------
Net increase 33,128,694 $272,456,160
========== ============
--------------------------------------------------------------------------------
1 The High Yield Bond -- Premier Class began operations on October 31, 2000.
--------------------------------------------------------------------------------
91
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 5 -- FORWARD FOREIGN CURRENCY CONTRACTS
High Yield may enter into forward foreign currency contracts for hedging against
portfolio positions denominated in foreign currencies as well as for non-hedging
purposes. Such contracts, which protect the value of the Fund's investment
securities against a decline in the value of the hedged currency, do not
eliminate fluctuations in the underlying prices of the securities. They simply
establish an exchange rate at a future date. Also, although such contracts tend
to minimize the risk of loss due to a decline in the value of a hedged currency,
at the same time they tend to limit any potential gain that might be realized
should the value of such foreign currency increase.
As of October 31, 2000, High Yield Bond Portfolio had the following open forward
foreign currency contracts:
<TABLE>
<CAPTION>
NET UNREALIZED
APPRECIATION
CONTRACT (DEPRECIATION)
CONTRACTS IN EXCHANGE FOR SETTLEMENT DATE VALUE (US$) (US$)
-------------------------------------------------------------------------------------------------------------------
CONTRACTS TO DELIVER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Euro 210,654 US Dollar $ 181,773 11/1/00 $ 178,782 $ 2,991
Euro 1,743,089 US Dollar 1,542,582 11/14/00 1,480,183 62,399
Euro 8,653,827 US Dollar 7,473,445 11/16/00 7,349,289 124,156
Euro 48,300 US Dollar 40,727 12/15/00 41,075 (348)
Euro 1,219,611 US Dollar 1,071,794 1/11/01 1,038,458 33,336
Euro 282,922 US Dollar 245,407 1/11/01 240,899 4,508
Euro 586,950 US Dollar 496,489 1/11/01 499,768 (3,279)
Euro 2,080,214 US Dollar 1,757,781 1/11/01 1,771,233 (13,452)
Euro 258,501 US Dollar 217,089 1/11/01 220,105 (3,016)
Euro 195,138 US Dollar 162,492 1/15/01 166,182 (3,690)
Euro 3,058,162 US Dollar 2,546,837 1/19/01 2,604,820 (57,983)
Euro 345,000 US Dollar 291,335 1/19/01 293,858 (2,523)
-------------------------------------------------------------------------------------------------------------------
Total $143,099
-------------------------------------------------------------------------------------------------------------------
CONTRACTS TO RECEIVE
-------------------------------------------------------------------------------------------------------------------
Euro 65,394 US Dollar $ 56,808 11/1/00 $ 55,500 $ (1,308)
Euro 944,854 US Dollar 808,512 11/16/00 802,420 (6,092)
Euro 665,463 US Dollar 588,363 11/16/00 565,147 (23,216)
Euro 291,590 US Dollar 253,496 11/16/00 247,633 (5,863)
Euro 819,279 US Dollar 687,375 11/16/00 695,775 8,400
Euro 669,518 US Dollar 561,625 1/11/01 570,073 8,448
-------------------------------------------------------------------------------------------------------------------
Total $ (19,631)
-------------------------------------------------------------------------------------------------------------------
Total Unrealized Appreciation $ 123,468
-------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
92
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 6 -- CAPITAL LOSS CARRYFORWARDS
At October 31, 2000, capital loss carryforwards available as a reduction against
future net realized capital gains aggregate as follows in the chart below:
<TABLE>
<CAPTION>
CAPITAL LOSS CARRYFORWARD
NET EXPIRATION YEAR
CAPITAL LOSS ---------------------------------------------
FUND CARRYFORWARD 2005 2006 2007 2008
---- ------------ ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Municipal Bond $11,755,390 $ -- $ -- $ 184,016 $11,571,374
Short-Term Municipal Bond 1,671,004 8,890 72,906 62,787 1,526,421
Fixed Income 27,632,788 -- -- 7,165,294 20,467,494
Short-Term Fixed Income 51,733 -- -- 15,249 36,484
High Yield Bond 15,243,255 -- 3,828,198 1,032,638 10,382,419
</TABLE>
NOTE 7 -- CONCENTRATION OF RISKS
Municipal Bond and Short-Term Municipal Bond invest primarily in diversified
portfolios of municipal securities, including municipal bonds and debentures.
Although Municipal Bond and Short-Term Municipal Bond maintain diversified
portfolios, the municipal bond issuers' abilities to meet their obligations may
be affected by economic developments in a specific state or region.
Fixed Income, Short-Term Fixed Income and High Yield Bond invest primarily in
fixed income securities, the market value of which may change in response to
interest rate changes. Although Fixed Income, Short-Term Fixed Income and High
Yield Bond maintain diversified portfolios, the ability of the issuers of the
Fund's portfolio securities to meet their obligations may be affected by
changing business and economic conditions in a specific industry or region.
Fixed Income, Short-Term Fixed Income and High Yield Bond may have a
concentration of their investments in financial companies.
High Yield Bond invests in securities rated below investment grade, which
typically involve risks not associated with higher rated securities. Yield on
high yield debt securities reflect, among other things, perceived credit risk.
NOTE 8 -- FUND REORGANIZATION
On August 19, 1999, the Board of Trustees adopted the following resolutions:
Approval of the tax-free transfer of substantially all of the assets of the
Intermediate Tax-Free ("Tax-Free Fund"), an affiliate of the Trust, to Municipal
Bond in exchange solely for the Institutional Class shares of beneficial
interest of Municipal Bond and the assumption by Municipal Bond of all of the
liabilities of Tax-Free Fund and the distribution of such shares of Municipal
Bond to the shareholders of the Tax-Free Fund in liquidation of the Tax-Free
Fund. The transfer took place on August 31, 2000 as a tax-free reorganization
under the provisions of the Internal Revenue Code of 1986, as amended. Prior to
the transfer, the Tax-Free Fund had net assets of $18,617,669, shares
outstanding of 1,768,059, and a net asset value of $10.53. Municipal Bond Shares
were issued at a conversion factor of 0.9741 shares for each Tax-Free Fund
Share.
NOTE 9 -- NEW CLASS
On October 31, 2000 High Yield Bond launched a new share class, the Premier
Class. The minimum initial investment for this Class is $5,000,000. The High
Yield Bond Institutional Class transferred $272,365,853 and 33,128,694 shares
into the High Yield Bond Premier Class at a net asset value of $8.22.
NOTE 10 -- SUBSEQUENT EVENTS
Effective December 1, 2000, High Yield Investment and High Yield Institutional
Classes implemented a redemption fee of 2%, whereby shareholders in these two
classes are charged a redemption fee of 2% if they subscribe to the class and
redeem or transfer their shares within 180 days.
On December 8, 2000, High Yield Bond Premier Class had a redemption in kind take
place for $101,000,000.
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93
<PAGE>
Domestic Fixed Income Funds
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Morgan Grenfell Investment
Trust and Shareholders of Fixed Income,
Short-Term Fixed Income, Municipal Bond,
Short-Term Municipa Bond, and High Yield Bond:
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Fixed Income, Short-Term Fixed
Income, Municipal Bond, Short-Term Municipal Bond, and High Yield Bond (five of
the funds comprising Morgan Grenfell Investment Trust, hereafter referred to as
the "Funds") at October 31, 2000, the results of each of their operations, the
changes in each of their net assets and the financial highlights for each of the
periods indicated, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at October
31, 2000 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
December 20, 2000
--------------------------------------------------------------------------------
TAX INFORMATION (Unaudited) For theYear Ended October 31, 2000
For the fiscal year ended October 31, 2000, 90.3% and 85.0% of the income
distribution paid by MunicipalBond and Short-TermMunicipalBond, respectively,
was derived from federal tax-exempt interest obligations.
TAXPAYERS FILING ON A CALENDAR YEAR BASIS WILL RECEIVE TAX INFORMATION FOR THE
2000 CALENDAR YEAR AFTER YEAR END.
Of the ordinary distributions made during the year ended October 31, 2000 the
following percentages have been derived from investments in US Government
and Agency Obligations. All or a portion of the distributions from this income
may be exempt from taxation at the state level. Consult your tax advisor for
state specific information.
Short-Term Fixed Income 13.410%
Fixed Income 14.610%
--------------------------------------------------------------------------------
94
<PAGE>
<PAGE>
For information on how to invest, shareholder account information and current
price and yield information, please contact your relationship manager or write
to us at:
DEUTSCHE ASSET MANAGEMENT SERVICE CENTER
P.O. BOX 219210
KANSAS CITY, MO 64121-9210
or call our toll-free number: 1-800-730-1313
This report must be preceded or accompanied by a current prospectus for the
Fund.
Deutsche Asset Management is the marketing name for the asset management
activities of Deutsche Bank AG, Deutsche Fund Management, Inc., Bankers Trust
Company, DB Alex. Brown LLC, Deutsche Asset Management,Inc., and Deutsche Asset
Management Investment Services Limited.
Municipal Bond CUSIP #61735K810
Short-Term Municipal Bond CUSIP #61735K836
Fixed Income CUSIP #61735K794
Short-Term Fixed Income CUSIP #61735K828
HighYield Bond CUSIP #61735K646
DOMFIANN (10/00)
Distributed by:
ICC Distributors, Inc.
