<PAGE>
________________________________________________________________________________
CIGNA FUNDS GROUP
________________________________________________________________________________
CHARTER FUNDS(SM)
MONEY
MARKET
FUND
[A DOLLAR BILL GRAPHIC APPEARS IN THE BACKGROUND OF THIS PAGE]
[CIGNA TREE LOGO GRAPHIC APPEARS HERE] Annual Report
CIGNA Financial Services, Inc. December 31, 1999
________________________________________________________________________________
<PAGE>
CHARTER FUNDS(SM) MONEY MARKET FUND
TIMESSQUARE CAPITAL MANAGEMENT
In January 2000, CIGNA Investments, Inc, the Fund's manager, changed its name to
TimesSquare Capital Management, Inc. The new name underscores the critical
importance of investment management as a core CIGNA strength.
The TimesSquare Capital Management brand, like its namesake, symbolizes energy
and renaissance, and accurately reflects our intention to be at the center of
world commerce. It is also an expression of our ability to recognize and take
advantage of global economic and market themes that can be integrated across
investment disciplines.
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 INVESTMENT MANAGEMENT AND
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
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Charter Funds(sm) Money Market Fund is an open-end, diversified management
investment company that invests exclusively in money market instruments. The
investment adviser is TimesSquare Capital Management, Inc., 900 Cottage Grove
Road, Hartford, Connecticut 06152.
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DEAR SHAREHOLDERS:
We are pleased to provide this report for Charter Funds (sm) Money Market Fund
(the "Fund") (formerly known as CIGNA Money Market Fund), covering the year
ended December 31, 1999.
NEW NAME
Effective January 1, 2000, the Fund's new name is Money Market Fund. The Fund is
now a member of the Charter Funds(sm) series of CIGNA Funds Group, a flexible,
disciplined, no-load mutual fund family for employee retirement and investment
plans. Charter Funds offer nine investment styles and are available in three
fund classes: institutional, premier and retail. The funds feature some of the
industry's most respected institutional portfolio managers including Morgan
Stanley Dean Witter Investment Management Inc., John A. Levin & Co, Fiduciary
International, Berger LLC, INVESCO, Bank of Ireland Asset Management (U.S.)
Limited and TimesSquare Capital Management, Inc.
MARKET REVIEW
1999 was another record setting year for the U.S. economy, and U.S. consumers
were both the benefactors and the beneficiaries. During the past three years,
consumer spending increased at an estimated 5% rate, but real wage income has
increased at an estimated 6% rate. When you include capital gains in the
calculation with income and savings, the U.S. savings rate was approximately
10%. For the economy, this translated into a fourth consecutive year of
approximately 4% real GDP growth. The current economic expansion, which is
entering its ninth year, is the longest business cycle expansion in American
history. The 1990s will be remembered as a period of healthy economic growth,
low inflation, rising corporate profitability, strong job creation, and rising
productivity.
During 1999, global fixed income markets reacted adversely to the continued
strong momentum in the domestic economy and revival in economic growth
worldwide. The continued robust growth in private credit demands and rise in
private debt ratios also has put upward pressure on global interest
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rates and downward pressure on bond prices. The surge in world oil prices and
industrial commodity prices has led to an uptick in consumer inflation, as did
increases in interest rates announced by the Federal Reserve (the"Fed"), the
Bank of England, and the European Central Bank.
Continued inflationary concerns in the fourth quarter resulted in the Fed
raising rates in November. The increase by the Federal Reserve on November 16
marked the third tightening move for 1999, which completely reversed the 75
basis point easing from the 1998 market crisis.
FUND ACTIVITY AND PERFORMANCE
On December 31, 1999, the portfolio composition was as follows: top-tier
domestic commercial paper, 65%; top tier foreign commercial paper, 9%; and U.S.
Government and Agencies, 26%. The Fund is well diversified.
Institutional Class total return for the year ended December 31, 1999 was 4.87%.
By comparison, the Lipper Money Market Instrument Fund Average and three-month
Treasury bills, as reported by Lehman Brothers (which does not include
investment expenses), returned 4.49% and 4.74%, respectively, for the year ended
December 31, 1999. As of December 31, 1999, the Institutional Class's annualized
7-day yield was 5.40%. Retail Class total return for the period April 29
(commencement of operations) to December 31, 1999 was 2.97%. As of December 31,
1999, the Retail Class's annualized 7-day yield was 4.86%. The Fund's weighted
average portfolio maturity was 14 days as of December 31, 1999.
OUTLOOK
The U.S. economy shows virtually no signs of slowdown, with the possible
exception of housing, despite the steep rise in interest rates and the
increasing monetary restraint by the Federal Reserve. For fiscal-year 2000, we
expect GDP growth to slow only modestly from the nearly 4% growth
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achieved in 1999 and the 4% average annual growth of the 1996-99 period. It is
our view that interest rates have not risen to levels sufficient to choke off
the strong momentum in domestic demand from households and businesses. Our basic
conclusion is that a variety of existing powerful economic forces will continue
to overwhelm the restraining effects of the current level of interest rates
until they rise to higher levels and remain at those levels for an extended
period. Within the household sector, these forces include a strong labor market,
continued ample availability of consumer credit, and the powerful influence of
the "wealth effect", resulting from large equity market gains.
Similarly, within the business sector, it is our view that the current level of
interest rates is not sufficient to obstruct the current strong momentum in
capital and inventory investment, and the production of exported goods. Capital
expenditures should continue to benefit from the boom in technology and, in
general, the high rates of return on new investment relative to the cost of
capital. In addition, basic manufacturing will also benefit from inventory
rebuilding and a recovery in demand for U.S. goods for export, as a result of
the recovery in global economies.
The Fund is structured to take advantage of the rising interest rate environment
we anticipate continuing in 2000. The Fund has exposure in both fixed and
floating rate securities, with the emphasis on floaters tied to libor, treasury
bills and prime indices. We will continue to focus on the developing trends in
the U.S. economy as keys to further Federal Reserve action and adjust our
portfolio strategy accordingly.
Sincerely,
/s/ Richard H. Forde
Richard H. Forde
CHAIRMAN OF THE BOARD AND PRESIDENT
CHARTER FUNDS (SM) MONEY MARKET FUND
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CHARTER FUNDS(SM) MONEY MARKET FUND
INVESTMENTS IN SECURITIES
DECEMBER 31, 1999
(IN THOUSANDS) PRINCIPAL VALUE
- ----------------------------------------------------------------
COMMERCIAL PAPER - 74.2%
DOMESTIC - 65.6%
American Express Credit Corp.,
5.70%, 1/4/00 $ 2,156 $2,155
6.35%, 1/4/00 818 818
5.15%, 1/18/00 6,660 6,644
Associates First Capital Corp.,
4.00%, 1/3/00 608 608
AT&T Corp., 4.10%, 1/11/00 9,328 9,317
Bell Atlantic Financial Services, Inc.,
5.20%, 1/7/00 10,000 9,991
Campbell Soup Co., 4.90%, 1/11/00 3,203 3,199
Edison International, 6.50%, 1/13/00 9,000 8,981
Ford Credit Auto Owner Trust,
5.351%, 7/17/00 1,972 1,972
Ford Motor Credit Co.,
6.01%, 1/3/00 3,645 3,644
5.74%, 8/18/00* 6,250 6,247
Fortune Brands, Inc., 5.65%, 1/5/00 10,420 10,413
General Electric Capital Corp.,
5.93%, 1/26/00 1,283 1,278
General Mills, Inc., 5.85%, 1/4/00 4,317 4,315
General Motors Corp., 5.84%, 1/14/00 7,400 7,384
Gillette Co., 6.65%, 1/4/00 4,666 4,663
Great Lakes Chemical Corp.,
6.20%, 1/4/00 3,716 3,714
Hasbro, Inc., 5.25%, 1/11/00 10,575 10,560
Heinz (H. J.) Co., 5.55%, 1/3/00 3,000 2,999
The Notes to Financial Statements are an integral part of these statements.
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(IN THOUSANDS) PRINCIPAL VALUE
- ----------------------------------------------------------------
Household Finance Corp., 5.95%, 1/10/00 $ 6,958 $ 6,948
Hubbell Inc., 5.30%, 1/3/00 10,000 9,997
Indiana Gas Co., 6.45%, 1/4/00 4,000 3,998
Johnson & Johnson, 5.00%,1/6/00 8,000 7,994
Laclede Gas Co., 6.65%, 1/7/00 2,500 2,497
Merck & Co. Inc., 4.25%, 1/6/00 671 671
Morgan (J. P.) & Co. Inc.,
6.15%, 1/10/00 10,000 9,985
Navistar Financial Owner Trust,
5.0025%, 6/15/00 702 702
Nestle Capital Corp., 5.00%, 1/4/00 10,020 10,016
Newell Rubbermaid, Inc., 5.45%, 1/10/00 3,558 3,553
Paccar Financial Corp., 6.30%, 1/25/00 4,000 3,983
Pitney-Bowes Inc.,
6.60%, 1/4/00 3,443 3,441
6.40%, 1/6/00 6,960 6,954
SBC Communications, Inc.,
6.25%, 1/5/00 7,500 7,495
6.25%, 1/18/00 2,092 2,086
Wal-Mart Stores, Inc., 6.55%, 1/5/00 8,950 8,943
Warner Lambert Co., 5.0%, 1/12/00 9,970 9,955
-----------
198,120
-----------
FOREIGN - 8.6%
ANZ (Delaware), Inc., 6.42%, 1/10/00 9,200 9,185
BBV Finance (Delaware), Inc.,
6.22%, 1/10/00 9,000 8,986
BP Amoco Capital Plc, 6.53%, 1/6/00 7,818 7,811
-----------
25,982
-----------
TOTAL COMMERCIAL PAPER 224,102
===========
The Notes to Financial Statements are an integral part of these statements.
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<PAGE>
CHARTER FUNDS(SM) MONEY MARKET FUND
INVESTMENTS IN SECURITIES CONTINUED
DECEMBER 31, 1999
(IN THOUSANDS) PRINCIPAL VALUE
- ------------------------------------------------------------------
U.S. GOVERNMENT & AGENCIES - 26.0%
Federal Farm Credit Bank,
6.29%, 3/23/00* $ 4,000 $ 4,000
Federal Home Loan Banks,
4.90%, 1/14/00 5,450 5,450
5.913%, 3/24/00* 5,000 5,000
5.04%, 3/29/00 5,250 5,250
5.07%, 4/7/00 5,000 5,001
5.08%, 4/10/00 4,500 4,501
5.873%, 6/9/00* 5,000 5,000
5.924%, 10/4/00* 8,400 8,396
Federal National Mortgage Association,
5.923%, 4/12/00* 7,000 6,999
Student Loan Marketing Association,
6.113%, 1/12/00* 5,500 5,500
6.113%, 1/20/00* 5,000 5,000
6.053%, 3/8/00* 4,200 4,201
6.063%, 9/29/00* 10,000 10,003
6.266%, 10/4/00* 4,000 3,999
-----------
TOTAL U.S. GOVERNMENT & AGENCIES 78,300
-----------
TOTAL INVESTMENTS IN SECURITIES - 100.2%
(Total Cost - $302,401,619) 302,402
Liabilities, Less Cash and Other Assets - (0.2)% (513)
-----------
NET ASSETS - 100.0% $ 301,889
===========
*Variable rate security. Rate is as of December 31, 1999.
The Notes to Financial Statements are an integral part of these statements.
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<PAGE>
CHARTER FUNDS(SM) MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
(IN THOUSANDS)
- ----------------------------------------------------------------------
ASSETS:
Investments in securities at value
(Cost - $302,401,619) $ 302,402
Cash on deposit with custodian 19
Interest receivable 763
Investment for trustees' deferred compensation plan 24
------------------
TOTAL ASSETS 303,208
------------------
LIABILITIES:
Dividends payable 1,085
Accrued advisory fees payable 64
Payable for trustees' deferred compensation plan 24
Registration fees payable 20
Custodian fees payable 18
Transfer agent fees payable 13
Accrued audit and legal fees payable 12
Other accrued expenses (including $19,535
due to affiliate) 83
------------------
TOTAL LIABILITIES 1,319
------------------
NET ASSETS (Equivalent to $1.00 per share
based on 178,234,369 shares of Institutional
Class and 123,654,503 shares of Retail Class) $ 301,889
==================
COMPONENTS OF NET ASSETS:
Paid in capital $ 301,889
------------------
NET ASSETS $ 301,889
==================
The Notes to Financial Statements are an integral part of these statements.
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CHARTER FUNDS(SM) MONEY MARKET FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
DECEMBER 31, 1999
(IN THOUSANDS)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Income:
Interest $ 9,762
--------
Expenses:
Investment advisory fees 656
Custodian fees 109
Administrative services 100
12b-1 fees 55
Sub-accounting fee 20
Reports to shareholders 42
Auditing and legal fees 24
Transfer Agent fees 19
Registration fees 30
Trustees' fees 2
--------
Total expenses 1,057
Less expenses waived by investment adviser (138)
--------
Net expenses 919
--------
Net Investment Income 8,843
--------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from investments 1
--------
Net Realized and Unrealized Gain On Investments 1
--------
Net Increase in Net Assets Resulting From Operations $ 8,844
=========
The Notes to Financial Statements are an integral part of these statements.
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CHARTER FUNDS(SM) MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED
DECEMBER 31
(IN THOUSANDS)
---------------------
1999 1998
- --------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 8,843 $ 12,800
Net realized gain from investments 1 8
-------------- -------------
Net increase in net assets from operations 8,844 12,808
-------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Institutional Class (8,124) (12,800)
Retail Class (719) -
From net realized gains:
Institutional Class (1) (8)
-------------- -------------
Total distributions to shareholders (8,844) (12,808)
-------------- -------------
CAPITAL SHARE TRANSACTIONS:
Institutional Class
Net proceeds from shares sold 1,787,204 2,314,708
Value of distributions reinvested 8,356 12,599
Cost of shares redeemed (1,846,945) (2,268,753)
-------------- -------------
(51,385) 58,554
-------------- -------------
Retail Class
Net proceeds from shares sold 139,191 -
Value of distributions reinvested 300 -
Cost of shares redeemed (15,836) -
-------------- -------------
123,655 -
-------------- -------------
Net increase from fund
share transactions 72,270 58,554
-------------- -------------
Net Increase in Net Assets 72,270 58,554
NET ASSETS:
Beginning of period 229,619 171,065
-------------- -------------
End of period $ 301,889 $ 229,619
============== =============
The Notes to Financial Statements are an integral part of these statements.
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<PAGE>
CHARTER FUNDS(SM)
MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES. Charter Funds(sm) Money Market Fund (the
"Fund") is a 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 Fund is to provide as high a level of current income as is
consistent with the preservation of capital and liquidity and the maintenance of
a stable $1.00 per share net asset value. The Fund invests exclusively in
short-term money market instruments. The Trust offers three classes of shares:
Institutional Class, Premier Class and Retail Class. As of December 31, 1999,
only the Institutional and Retail Classes were active. 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, which will be made available after 1999 year-end,
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 generally accepted
accounting principles 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 - The Fund's investments are valued at amortized cost,
which the Board of Trustees has determined constitutes fair value and which at
December 31, 1999 approximates cost for federal income tax purposes.
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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).
Interest income, which includes accretion of discount, is recorded on the
accrual basis. Securities gains and losses are recognized on the specific cost
identification basis.
C. FEDERAL TAXES - For Federal income tax purposes, the Fund is taxed as a
separate entity. Its policy is 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 realized gains are
declared and reinvested daily. 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 principles. To
the extent that such differences are permanent, a reclassification 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 0.35% 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 0.45% of
average daily net assets for the Institutional Class, 0.70% of average daily net
assets for the Premier Class, and 0.95% for the Retail Class (1.00% prior to
January 1, 2000), until April 30, 2001 and thereafter to the extent described in
the Fund's then current prospectus.
The Fund reimburses TimesSquare Capital Management, Inc. for a portion of the
compensation and related expenses of the Trust's Treasurer and Secretary and
certain persons
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<PAGE>
CHARTER FUNDS(SM) MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS continued
who assist in carrying out the responsibilities of those offices. For the period
ended December 31, 1999, the Fund paid or accrued $100,285.
With respect to Retail Service Class shares, the Fund has adopted a 12b-1 plan
which requires the payment of 0.35% annually of average daily net assets (0.25%
after January 1, 2000) 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 the
sale of such shares. Premier and Retail Class shares are also subject to a sub
accounting fee payable to CFS equal to 0.25% annually (prior to January 1, 2000,
the Retail Class had a sub accounting fee of 0.125% annually). 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
[THE FOLLOWING TABLE APPEARS ACROSS THE BOTTOM OF PAGES 14-15]
<TABLE>
<CAPTION>
Transactions in capital stock were as follows:
Year Ended Year Ended
December 31, 1999 December 31, 1998
(In Thousands) (In Thousands)
- ----------------------------------------------------------------------------------------------------------------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
INSTITUTIONAL CLASS
Subscription 1,787,204 $ 1,787,204 2,314,709 $ 2,314,709
Issued to shareholders
in reinvestment of dividends
and distributions 8,356 8,356 12,599 12,599
---------------------- -------------------- ---------------------- ---------------------
1,795,560 1,795,560 2,327,308 2,327,308
Redemption (1,846,945) (1,846,945) (2,268,753) (2,268,753)
---------------------- -------------------- ---------------------- ---------------------
Net increase (51,385) $ (51,385) 58,555 $ 58,555
====================== ==================== ====================== =====================
RETAIL CLASS
Subscription 139,191 $ 139,191
Issued to shareholders
in reinvestment of dividends
and distributions 300 300
---------------------- --------------------
139,491 139,491
Redemption (15,836) (15,836)
---------------------- --------------------
Net increase 123,655 $ 123,655
====================== ====================
</TABLE>
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<PAGE>
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. CAPITAL STOCK. The Fund is a separate series of the Trust which offers an
unlimited number of shares of beneficial interest, without par value.
Affiliates of CIGNA Corporation were the majority shareholders of the
Institutional Class.
__
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<PAGE>
CHARTER FUNDS(SM) MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS Continued
5. FINANCIAL HIGHLIGHTS. The following selected per share data is computed on
the basis of a share outstanding throughout the period:
[THE FOLLOWING TABLE SPANS ACROSS PAGES 16-17]
<TABLE>
<CAPTION>
RETAIL CLASS INSTITUTIONAL CLASS
- ------------------------------------------------------------------------------------------------------------------------------
1999* 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05 0.05 0.05 0.05
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS 0.03 0.05 0.05 0.05 0.05 0.05
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
Distributions from capital gains - - - - - -
------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ========= ======== ======== ========
TOTAL RETURN /a,b/ 2.97% ** 4.87% 5.18% 5.27% 4.91% 5.33%
RATIOS TO AVERAGE NET ASSETS:
Net expenses 0.93% + 0.45% 0.45% 0.44% 0.45% 0.80%
Net investment income 4.29% + 4.76% 5.06% 5.14% 4.95% 5.38%
Fees and expenses waived or borne by the 0.07% + 0.07% 0.02% 0.07% 0.24% 0.41%
Advisor
Net assets, end of period (000 omitted) $ 123,655 $ 178,234 $ 229,619 $ 171,065 $ 120,505 $ 1,034
</TABLE>
/a/ Had the Advisor not waived or reimbursed a portion of the expenses, total
return would have been reduced.
/b/ Total return of net asset value assumes all dividends reinvested.
* For the period April 29, 1999 (commencement of operations) to December 31,
1999.
** Not Annualized
+ Annualized
__ __
16 17
<PAGE>
________________________________________________________________________________
________________________________________________________________________________
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES AND SHAREHOLDERS OF CHARTER FUNDS(SM) MONEY MARKET FUND
In our opinion, the accompanying statement of assets and liabilities, including
the schedule 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 Charter Funds(sm) Money Market Fund
(formerly CIGNA Money Market Fund) (the "Fund") at December 31, 1999, the
results of its operations, the changes in its net assets and the financial
highlights for the periods indicated, in conformity with accounting principles
generally accepted in the United States. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's 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 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 December
31, 1999 by correspondence with the custodian, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 18, 2000
576971
