<PAGE>
DEAR SHAREHOLDERS:
We are pleased to provide this initial report for Charter Small Company Stock
Growth Fund (the "Fund"), sub-advised by Fiduciary International, Inc., covering
the period ended June 30, 2000.
Please read our sub-adviser's update below.
Sincerely,
/s/ Richard H. Forde
Richard H. Forde
CHAIRMAN OF THE BOARD AND PRESIDENT
CHARTER SMALL COMPANY STOCK GROWTH FUND
SUB-ADVISER'S UPDATE
THE MARKET ENVIRONMENT
The U.S. small cap market had a challenging start, but finished off the second
quarter strong. One factor negatively impacting investor sentiment during the
period was interest rates. Since June 1999, the Federal Reserve (Fed) has been
raising rates. The Federal Open Market Committee shifted from a gradualist to an
aggressive position by raising rates 50 basis points on May 16, versus only 25
basis points for each of the other increases within the past year. This was
another effort by the Fed to slow down the U.S. economy and to preempt inflation
from feared economic overheating. Rising interest rates generally have a greater
impact on longer-duration growth stocks and their valuations, and that certainly
contributed to the volatile environment for growth stocks.
Another factor that influenced investor sentiment was the culmination of the
anti-trust suit against Microsoft. According to the judge's ruling, Microsoft's
violation of anti-trust laws would subject the company to further legal action,
including the possible breakup of the company. This high-
_
1
<PAGE>
profile event created concern in the market that renewed Government activism
could interfere with rapid developments occurring in technology and the
Internet.
Volatility is something investors are starting to get used to, as price swings
of greater than 1% have become an everyday occurrence on the NASDAQ Composite
this year. Investors started the quarter by returning to the perceived safer
haven of the large cap market based on fears of higher interest rates, rising
oil prices and the potential of a slowing economy -- and concerns over the
extreme valuations of many small cap technology issues.
STRATEGY
Energy and health care were the strongest performers among the emerging growth
sectors for the second quarter. Health care led all sectors, gaining 19.5%.
Within that sector, biotechnology was the biggest contributor, with a 54.1%
increase. Our stock selection in biotechnology and oil service stocks added
value to the Fund's returns over the period.
During the volatile months of April and May, the Fund was well served by its
exposure to the business service, financial and health care service sectors.
Performance of stocks with strong fundamentals that had struggled during the
peak of the technology sector dominance reversed and added value in April and
May. June was characterized by the return of the technology sector, which rose
16.2% within the Russell 2000 Index. Our slight overweight positions and stock
selection within this sector added value in June.
PERFORMANCE
For the second quarter and since its inception (01/21/00), the Fund's
Institutional Class returned -2.99% and 6.90%, respectively. . The Russell 2000
Index returned -3.78% and 3.04%, respectively for the quarter and year-to-date.
The Fund's Premier and Retail Classes returned -3.00% and -3.09%, respectively,
for the second quarter and 6.80% and 6.70%, respectively, since inception.
_
2
OUTLOOK
We believe that the shakeout in the technology sector earlier in the year was
healthy -- and served to remove the speculative fever and bring a dose of
reality back to the market. Looking ahead, we believe that the following factors
continue to support the case for small capitalization stocks:
o Merger activity that started in the first quarter continues to be
strong. Over 100 small company mergers were announced in the first quarter
and approximately 500 are projected for the year. The consolidation of
companies is likely to increase due to the valuation disparity that exists
between small- and large capitalization firms. Approximately 22% of the
companies in the small cap universe currently trade below 10 times trailing
one-year earnings.
o With earnings still robust, earnings preannouncement seasons have
been weathered with few surprises. So far in the first quarter, small cap
universe positive surprises have outshined the negative surprises. Actual
profits for both the small cap universe and the technology sector have
exceeded expected profits by more than 50%. We believe that investors will
continue to look to well-managed, well-capitalized growth stocks, such as
business services and technology stocks, while moving away from
unprofitable companies.
o We believe that the Fed has done a good job in slowing the
economy. Inflation remains relatively subdued and interest rates should
behave. In a slower growth economy, investors will likely seek superior
earnings growth companies in the small- and mid-cap universe.
Overall, we believe that small cap stocks continue to be compellingly attractive
relative to their large cap counterparts.
_
3
<PAGE>
CHARTER SMALL COMPANY STOCK
GROWTH FUND
INVESTMENTS IN SECURITIES
June 30, 2000 (Unaudited)
MARKET
NUMBER OF VALUE
SHARES (000)
-----------------------------------------------------------------
COMMON STOCKS - 79.5%
ADVERTISING- 2.8%
Lamar Advertising, Class A* 4,500 $ 195
Plexus Corp* 200 23
Titan Corp* 2,500 111
----------
329
----------
COMMUNICATIONS- 7.2%
Actuate Corp.* 2,000 107
Audio Codes Ltd.* 800 96
Bindview Development Corp.* 5,000 60
Biopure Corp., Class A * 2,500 47
Emmis Communications Corp., Class A* 3,000 124
ICG Communications, Inc. 4,000 88
Mediacom Communications Co., Class A* 4,000 62
Primus Telecommun. Group, Inc.* 4,500 112
RSL Communications Ltd.* 4,100 47
XM Satellite Radio, Class A* 3,000 112
----------
855
----------
DATA PROCESSING- 3.4%
BISYS Group, Inc.* 3,000 185
DeVry, Inc. * 5,500 145
SunGuard Data Systems, Inc.* 2,500 78
----------
408
----------
ENTERTAINMENT- 2.4%
Premier Parks, Inc.* 5,500 125
World Wrestling Federation* 7,500 156
----------
281
----------
FINANCIAL- 9.2%
ChoicePoint, Inc.* 4,500 200
City National Corp. 5,000 174
_
4
MARKET
NUMBER OF VALUE
SHARES (000)
-----------------------------------------------------------------
Federated Investors, Inc., Class B 5,000 $ 175
IndyMac Mortgage Holdings, Inc. 5,000 68
Investment Tech Group 4,000 170
Legg Mason, Inc. 4,000 200
Radian Group, Inc. 2,000 104
----------
1,091
----------
ELECTRONICS- 1.9%
Electroglas, Inc. 900 19
Exar Corp.* 1,000 87
Plantronics, Inc. 1,000 116
----------
222
----------
MANUFACTURING- 11.2%
Alpha Industries, Inc. 2,000 88
Aptargroup, Inc. 5,000 135
Elcor Corp. 2,300 53
Furniture Brands International, Inc. 5,000 76
International Home Foods, Inc.* 7,000 147
Matrixone, Inc. * 2,500 102
Mineral Technologies, Inc. 5,000 230
Natural Microsystems Corp.* 1,500 169
Photronic Labs, Inc.* 1,300 37
Scotts Co., Class A* 1,500 55
Smith International Inc. 1,500 108
TETRA Tech, Inc.* 3,600 82
Visual Networks, Inc.* 1,800 51
----------
1,333
----------
MEDICAL- 8.2%
Alexion Pharmaceuticals, Inc.* 800 57
American Dental Partners, Inc. * 15,000 104
Cor Therapeutics, Inc.* 1,500 128
Gel Tex Pharmaceuticals, Inc.* 2,500 51
The Notes to Financial Statements are an integral part of these statements.
_
5
<PAGE>
CHARTER SMALL COMPANY STOCK
GROWTH FUND
INVESTMENTS IN SECURITIES CONTINUED
June 30, 2000 (UNAUDITED)
MARKET
NUMBER OF VALUE
SHARES (000)
-----------------------------------------------------------------
Ilex Oncology, Inc.* 2,200 $ 78
Lincare Holdings, Inc.* 8,000 197
Medquist, Inc.* 500 17
Renal Care Group, Inc.* 7,000 171
Scott Technologies, Inc. 10,000 172
----------
975
----------
PUBLISHING- 1.0%
Information Holdings, Inc.* 2,000 74
Macromedia, Inc. * 500 48
----------
122
----------
REAL ESTATE- 1.4%
Carey International, Inc. * 3,000 42
Manhattan Associates, Inc.* 5,000 125
----------
167
----------
RESEARCH AND DEVELOPMENT- 1.9%
Affymetrix, Inc. * 500 83
Alkermes, Inc.* 3,000 141
----------
224
----------
RETAIL- 2.7%
Rent A Center, Inc.* 5,000 113
SCP Pool Corp.* 3,000 71
Tootsie Roll Industries, Inc. 2,000 70
----------
254
----------
SERVICES- 7.5%
BJ Services Co.* 2,000 125
Braun Consulting, Inc. * 3,000 63
Information Resource Engr. Inc. 2,000 51
Interim Services, Inc.* 5,000 89
Investors Financial Services Co. 4,500 179
MAXIMUS, Inc.* 1,000 22
Nabors Industries, Inc. 4,000 166
The Notes to Financial Statements are an integral part of these statements.
_
6
MARKET
NUMBER OF VALUE
SHARES (000)
-----------------------------------------------------------------
On Assignment, Inc.* 3,500 $ 107
Ritchie Bros. Auctioneers, Inc. 2,000 48
SangStat Med. Corp. * 1,500 43
----------
893
----------
TECHNOLOGY- 15.9%
Allaire Corp. * 1,000 37
American Mgmt. Systems, Inc. 5,000 164
Art Technology Group, Inc.* 800 81
Business Objects SA ADR * 2,000 176
Caliper Technologies Corp.* 2,000 92
Clarent Corp.* 1,000 72
Digital Microwave Corp.* 4,000 153
DST Systems, Inc.* 2,500 190
Exchange Applications, Inc.* 2,000 53
Henry (Jack) & Assoc. 2,500 125
i2 Technologies, Inc.* 500 52
Informatica Corp* 1,400 115
ISS Group, Inc. * 600 59
Media Metrix, Inc.* 1,500 38
Mercury Interactive Corp. 1,200 116
Micromuse, Inc. 500 83
Onyx Software Corp. * 3,000 89
Valuevision International, Inc., Class A* 4,000 96
Vignette Corp. * 1,000 52
Voyager.net, Inc.* 5,000 40
----------
1,883
----------
UTILITIES 2.2%
Barret Resource Corp.* 2,500 75
Hain Celestial Group, Inc.* 5,000 183
----------
258
----------
The Notes to Financial Statements are an integral part of these statements.
_
7
<PAGE>
CHARTER SMALL COMPANY STOCK
GROWTH FUND
INVESTMENTS IN SECURITIES CONTINUED
JUNE 30, 2000 (UNAUDITED)
NUMBER OF MARKET
SHARES VALUE
(000) (000)
-----------------------------------------------------------------
WIRELESS COMMUNICATIONS- 1.2%
Aether System, Inc. * 200 $ 41
Triton PCS Holdings, Class A * 1,800 104
----------
145
----------
TOTAL COMMON STOCKS - 79.5%
(Cost $9,100) 9,440
----------
SHORT-TERM OBLIGATIONS - 21.2%
MONEY MARKET FUND
Charter Money Market Fund 2,523 $ 2,523
----------
TOTAL SHORT-TERM OBLIGATIONS
(Cost $2,523) 2,523
----------
TOTAL INVESTMENT IN SECURITIES - 100.7%
(Total Cost $11,623) 11,963
Cash and Other Assets Less Liabilities - (0.7)% (84)
----------
NET ASSETS - 100.0% $ 11,879
==========
* Non-income producing securities.
-------------------------------------------------------------
CHARTER SMALL COMPANY STOCK GROWTH FUND
TEN LARGEST POSITIONS (UNAUDITED)
(000)
Mineral Technology $ 230 1.9%
ChoicePoint, Inc. 200 1.7%
Legg Mason, Inc. 200 1.7%
Lincare Holdings, Inc. 197 1.7%
Lamar Advertising, Class A 195 1.6%
DST Systems, Inc. 190 1.6%
BISYS Group, Inc. 185 1.6%
Hain Celestial Group, Inc. 183 1.5%
Investors Financial Services Co. 179 1.5%
Business Objects SA ADR 176 1.5%
-------------------------------------------------------------
The Notes to Financial Statements are an integral part of these statements.
_
8
CHARTER SMALL COMPANY STOCK
GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
(IN THOUSANDS)
---------------------------------------------------------------------------
ASSETS:
Investments in securities at value (Cost - $11,623) $ 11,963
Cash 1
Receivable for investments sold 285
Interest and dividends receivable 2
Other 13
--------------
Total assets 12,264
--------------
LIABILITIES:
Payable for investments purchased 347
Accrued advisory fees payable 9
Custodian fees payable 7
Accrued audit and legal fees payable 7
Administrative services payable 6
12b-1 and sub-accounting fees payable to Distributor 4
Other accrued expenses 5
--------------
Total liabilities 385
--------------
NET ASSETS $ 11,879
==============
SHARES OUTSTANDING
Institutional Class ($10.69 net asset value per share) 450
==============
Premier Class ($10.68 net asset value per share) 486
==============
Retail Class ($10.67 net asset value per share) 176
==============
COMPONENTS OF NET ASSETS:
Paid in capital $ 11,227
Overdistributed net investment income (24)
Accumulated net realized gain on investments 336
Unrealized appreciation of investments and futures 340
--------------
NET ASSETS $ 11,879
==============
The Notes to Financial Statements are an integral part of these statements.
_
9
<PAGE>
CHARTER SMALL COMPANY STOCK
GROWTH FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 21, 2000 * TO
JUNE 30, 2000 (UNAUDITED)
(IN THOUSANDS)
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 4
Interest 30
-------------------
34
EXPENSES:
Investment advisory fees 49
Custodian fees and expenses 15
Registration fees 16
Administrative services 9
Auditing and legal fees 8
Sub-accounting fees 6
Shareholder reports 3
12b-1 fees 2
-------------------
Total expenses 108
Less expenses waived by adviser or distributor (50)
-------------------
Net expenses 58
-------------------
NET INVESTMENT INCOME (LOSS) (24)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain from securities transactions 336
Unrealized appreciation of investments 340
-------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS 676
-------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 652
===================
* Commencement of operations
The Notes to Financial Statements are an integral part of these statements.
__
10
CHARTER SMALL COMPANY STOCK
GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD JANUARY 21, 2000 * TO
JUNE 30, 2000 (UNAUDITED)
(IN THOUSANDS)
--------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $ (24)
Net realized gain from securities transactions 336
Net realized gain from futures contracts -
Unrealized gain from futures contracts -
Unrealized appreciation of investments 340
-------------
Net increase in net assets from operations 652
-------------
DISTRIBUTIONS FROM NET INVESTMENT INCOME:
Institutional Class -
Premier Class -
Retail Class -
-------------
Total distributions to shareholders -
-------------
CAPITAL SHARE TRANSACTIONS:
Institutional Class
Net proceeds from sales of shares 4,502
Net asset value of shares issued to shareholders
in reinvestment of dividends and distributions -
-------------
4,502
Cost of shares redeemed -
-------------
4,503
-------------
Premier Class
Net proceeds from sales of shares 4,912
Net asset value of shares issued to shareholders
in reinvestment of dividends and distributions -
-------------
4,912
Cost of shares redeemed -
-------------
4,912
-------------
Retail Class
Net proceeds from sales of shares 1,868
Net asset value of shares issued to shareholders
in reinvestment of dividends and distributions -
-------------
1,868
Cost of shares redeemed (56)
-------------
1,812
-------------
Net increase from Fund share transactions 11,227
-------------
NET INCREASE IN NET ASSETS 11,879
NET ASSETS:
Beginning of period -
-------------
End of period (including accumulated net investment
loss of $24) $ 11,879
=============
* Commencement of operations
The Notes to Financial Statements are an integral part of these statements.
__
11
<PAGE>
CHARTER SMALL COMPANY STOCK
GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS CONTINUED
FOR THE PERIOD JANUARY 21, 2000 * TO
JUNE 30, 2000 (UNAUDITED)
(IN THOUSANDS)
--------------------------------------------------------------------------------
TRANSACTIONS IN CAPITAL STOCK
INSTITUTIONAL CLASS
Shares sold 450
Shares issued in reinvestment of dividends and
distributions -
-------------------
450
Shares redeemed -
-------------------
Net increase in shares outstanding 450
===================
PREMIER CLASS
Shares sold 486
Shares issued in reinvestment of dividends and
distributions -
-------------------
486
Shares redeemed -
-------------------
Net increase in shares outstanding 486
===================
RETAIL CLASS
Shares sold 181
Shares issued in reinvestment of dividends and
distributions -
-------------------
181
Shares redeemed (5)
-------------------
Net increase in shares outstanding 176
===================
* Commencement of operations
The Notes to Financial Statements are an integral part of these statements.
__
12
CHARTER SMALL COMPANY STOCK
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES. Charter Small Company Stock Growth Fund is
separate series of CIGNA Funds Group, a Massachusetts business trust (the
"Trust"). The Trust is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. The objective
of the Charter Small Company Growth Fund is to seek long-term capital
appreciation by investing principally in common and preferred stocks of U.S.
companies with market capitalizations between $30 million and $2 billion, with a
focus on growing companies involved in new product development and technological
breakthroughs. The Trust offers three classes of shares: Institutional Class,
Premier Class and Retail Class. Expenses of the Fund are borne pro rata by the
holders of each class of shares, except that each class bears expenses unique to
that class (including any applicable sub-accounting or 12b-1 distribution fee).
Shares of each class would receive their pro rata share of net assets of the
Fund if the Fund were liquidated. In addition, the Trustees approve separate
dividends on each class of shares. Institutional Class Shares have a separate
transfer agent charge and no distribution fee or sub-accounting fee. The Premier
Class Shares have a sub-accounting fee. The Retail Class Shares have a 12b-1 fee
and a sub-accounting fee.
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements.
A. SECURITY VALUATION - Equity securities, including warrants, that are listed
on a national securities exchange or
__
13
<PAGE>
CHARTER SMALL COMPANY STOCK
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) CONTINUED
part of the NASDAQ National Market System are valued at the last sale price
or, if there has been no sale that day, at the last bid price. Short-term
investments with remaining maturities of up to and including 60 days are valued
at amortized cost, which approximates market. Short-term investments that mature
in more than 60 days are valued at current market quotations. Other securities
and assets of the Fund are appraised at fair value as determined in good faith
by, or under the authority of, the Board of Trustees.
B. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions
are accounted for on the trade date (date the order to buy or sell is executed).
Dividend income is recorded on the ex-date, and interest income is recorded on
the accrual basis. Securities gains and losses are determined on the basis of
identified cost.
C. FEDERAL TAXES - For federal income tax purposes, each fund in the Trust is
taxed as a separate entity. It is the Fund's policy to continue to comply with
the requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income and capital gains to its
shareholders. Therefore, no federal income or excise taxes on realized income or
net capital gains have been accrued.
D. DIVIDENDS - Dividends from net investment income and net capital gains, to
the extent such gains would otherwise be taxable to the Fund, are declared and
distributed annually.
Dividends and distributions are recorded by the Fund on the ex-dividend date.
The timing and characterization of certain income and capital gains
distributions are determined in accordance with federal tax regulations which
may differ from generally accepted accounting
__
14
principles. To the extent that such differences are permanent, a
re-classification to paid in capital may be required.
2. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES. Investment
advisory fees are paid or accrued to TimesSquare Capital Management, Inc.
("TimesSquare"), certain officers and directors of which are affiliated with the
Fund. Such advisory fees are based on an annual rate of 1.00% applied to the
average daily net assets of the Fund. TimesSquare has voluntarily agreed to
reimburse the Fund for any amount by which its expenses (including the advisory
fee but excluding interest, taxes, transaction costs incurred in acquiring and
disposing of portfolio securities, and extraordinary expenses) exceed 1.05%
annually of average daily net assets for the Institutional Class, 1.25% annually
of average daily net assets for the Premier Class, and 1.50% annually for the
Retail Class, until April 30, 2001 and thereafter to the extent described in the
Fund's then current prospectus. TimesSquare retains the ability to be repaid by
the Fund if the Fund's expenses fall below the specified limit prior to the end
of the fiscal year or within three years after TimesSquare waives management
fees or reimburses Fund operating expenses.
For administrative services, the Fund reimburses TimesSquare for a portion of
the compensation and related expenses of the Trust's Treasurer and Secretary and
certain persons who assist in carrying out the responsibilities of those
offices. For the six months ended June 30, 2000, the Fund paid or accrued
$9,385.
With respect to Retail Class shares, the Fund has adopted a 12b-1 plan which
requires the payment of 0.25% annually ($1,566 through 6/30/00) to CIGNA
Financial Services, Inc. ("CFS"), the Fund's distributor. The fees received from
the 12b-1 plan are used for services provided to the Retail Class and expenses
primarily intended to result in
__
15
<PAGE>
CHARTER SMALL COMPANY STOCK
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) CONTINUED
the sale of such shares. Premier and Retail Class shares are also subject to a
sub-accounting fee payable to CFS equal to 0.20% annually ($4,456 and $1,252,
respectively, through 6/30/00). The sub-accounting and 12b-1 fees will be waived
as necessary to limit Premier and Retail Class expenses, as a percentage of
average net assets, to the amounts described above until April 30, 2001 and
thereafter to the extent described in the Fund's then current prospectus.
TimesSquare and CFS are indirect, wholly-owned subsidiaries of CIGNA
Corporation.
3. TRUSTEES' FEES. Trustees' fees represent remuneration paid or accrued to
trustees who are not employees of CIGNA Corporation or any of its affiliates.
Trustees may elect to defer all or a portion of their fees which are invested in
mutual fund shares in accordance with a deferred compensation plan.
4. PURCHASES AND SALES OF SECURITIES. Purchases and sales of securities,
excluding short-term obligations, for the six months ended June 30, 2000 were
$15,556,713 and $6,793,437, respectively.
At June 30, 2000, the cost of securities for federal income tax purposes was
$11,315,879. The Fund had net unrealized appreciation of investment of $647,501,
consisting of gross unrealized appreciation of $986,400 and gross unrealized
depreciation of $338,899 for federal income tax purposes.
5. CAPITAL STOCK. The Fund is a separate series of the Trust which offers an
unlimited number of shares of beneficial interest, without par value. At June
30, 2000, Life Insurance Company of North America, an indirect, wholly-owned
subsidiary of CIGNA Corporation, owned 90% of the Fund.
__
16
CHARTER SMALL COMPANY STOCK
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
6. FINANCIAL HIGHLIGHTS. The following per share data is computed on the basis
of a share outstanding throughout the period:
<TABLE>
<CAPTION>
INSTITUTIONAL PREMIER RETAIL
CLASS CLASS CLASS
------------------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE
PERIOD PERIOD PERIOD
1/21/00(4) 1/21/00(4) 1/21/00(4)
TO TO TO
(UNAUDITED) 6/30/00 6/30/00 6/30/00
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00 $ 10.00 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income
(loss) (0.02) (0.03) (0.03)
Net realized and
unrealized gain on
securities 0.71 0.71 0.70
----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.69 0.68 0.67
----- ----- -----
LESS DISTRIBUTIONS:
Dividends from net
investment income - - -
Distributions from capital
gains - - -
----- ----- -----
TOTAL DISTRIBUTIONS - - -
----- ----- -----
NET ASSET VALUE, END OF
PERIOD $ 10.69 $ 10.68 $ 10.67
======== ======== =======
TOTAL RETURN (1) 6.90% (2) 6.80% (2) 6.70% (2)
RATIOS TO AVERAGE NET
ASSETS
Expenses 1.05% (3) 1.25% (3) 1.50% (3)
Net investment income
(loss) (0.36)%(3) (0.56) (3) (0.80)%(3)
Fees and expenses waived
or borne by the Adviser
or Distributor 0.90% (3) 0.90% (3) 0.96% (3)
Portfolio turnover 89% (2) 89% (2) 89% (2)
Net assets, end of period
(000 omitted) $ 4,815 $ 5,188 $ 1,876
</TABLE>
(1) Had the Adviser or Distributor not waived or reimbursed a portion of
expenses, total return would have been reduced.
(2) Not annualized.
(3) Annualized.
(4) Commencement of operations.
__
17
<PAGE>
CHARTER SMALL COMPANY STOCK
GROWTH FUND
Charter Small Company Stock Growth Fund is an open-end, diversified management
investment company that invests primarily in common and preferred stocks of U.S.
companies with market capitalizations between $30 million and $2 billion, with a
focus on growing companies involved in new product development and technological
breakthroughs. The investment adviser is TimesSquare Capital Management, Inc.,
900 Cottage Grove Road, Hartford, Connecticut 06152. The Fund is distributed by
CIGNA Financial Services, Inc., P.O. Box 150476, Hartford, CT 06115-0476
(telephone: 1.888.CIGNA.FS or 1.888.244.6237).
TRUSTEES
Hugh R. Beath
ADVISORY DIRECTOR, ADMEDIA CORPORATE ADVISORS, INC.
Richard H. Forde
SENIOR MANAGING DIRECTOR, TIMESSQUARE CAPITAL MANAGEMENT, INC.
Russell H. Jones
VICE PRESIDENT AND TREASURER, KAMAN CORPORATION
Thomas C. Jones
PRESIDENT, CIGNA RETIREMENT AND INVESTMENT SERVICES &
CHAIRMAN OF THE BOARD, TIMESSQUARE CAPITAL MANAGEMENT, INC.
Paul J. McDonald
SPECIAL ADVISOR TO THE BOARD OF DIRECTORS,
FRIENDLY ICE CREAM CORPORATION
OFFICERS
Richard H. Forde
CHAIRMAN OF THE BOARD AND PRESIDENT
Alfred A. Bingham III
VICE PRESIDENT AND TREASURER
Jeffrey S. Winer
VICE PRESIDENT AND SECRETARY
[CIGNA TREE LOGO GRAPHIC APPEARS HERE]
CIGNA FINANCIAL SERVICES, INC.
P.O. Box 150476 . Hartford, CT 06115-0476
www.cigna.com . Member NASD/SIPC
545723
________________________________________________________________________________
CIGNA FUNDS GROUP
________________________________________________________________________________
[A BUILDING GRAPHIC APPEARS IN THE BACKGROUND OF THIS PAGE]
CHARTER FUNDS/SM/
CHARTER
SMALL
COMPANY
STOCK
GROWTH
FUND
Semiannual Report
June 30, 2000
[CIGNA TREE LOGO GRAPHIC APPEARS HERE]
CIGNA Financial Services, Inc.
