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FORTIS
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Fortis Money Fund
Annual Report
SEPTEMBER 30, 1998
FORTIS FINANCIAL GROUP
[GRAPHIC]
<PAGE>
FORTIS MONEY FUND ANNUAL REPORT
CONTENTS
LETTER TO SHAREHOLDERS 1
SCHEDULE OF INVESTMENTS 2
STATEMENT OF ASSETS AND LIABILITIES 4
STATEMENT OF OPERATIONS 4
STATEMENTS OF CHANGES IN NET ASSETS 5
NOTES TO FINANCIAL STATEMENTS 6
INDEPENDENT AUDITORS' REPORT 8
BOARD OF DIRECTORS AND OFFICERS 9
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- - TOLL-FREE INFORMATION LINE
- For daily account balances,
transaction activity or net asset
value information
- (800) 800-2000, Ext. 4344
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FOR MORE INFORMATION ABOUT FORTIS FINANCIAL GROUP'S FAMILY OF PRODUCTS, CALL
YOUR INVESTMENT REPRESENTATIVE OR THE HOME OFFICE AT (800) 800-2000.
TO ORDER PROSPECTUSES OR SALES LITERATURE FOR ANY FORTIS PRODUCT, CALL (800)
800-2000, EXT. 4579.
HOW TO USE THIS REPORT
The letter from the portfolio manager and president provides a detailed analysis
of the fund and financial markets. The pie chart shows a breakdown of the fund's
assets by industry.
This report is just one of several tools you can use to learn more about your
investment in the Fortis Family of Mutual Funds. Your investment representative,
who understands your personal financial situation, can best explain the features
of your investment and how it's designed to help you meet your financial goals.
<PAGE>
[PHOTO]
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 9/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Banks 23.0%
Diversified Finance 14.9%
Consumer Finance 12.8%
Captive Equipment Finance 11.3%
Captive Auto Finance 8.9%
Utilities-Electric 8.5%
Brokerage and Investment 5.3%
Oil-Refining 4.7%
Industrial 4.4%
Food-Grocery, Miscellaneous 3.2%
Beverage 3.0%
</TABLE>
DEAR FORTIS SHAREHOLDER,
REVIEW
The U.S. economy grew at an impressive 3.5% pace over the past year. The primary
source of the economy's strength has been consumer spending, which has
benefitted from rising equity prices, low unemployment and inflation. While the
U.S. was enjoying strong growth, Asia's economies significantly weakened,
threatening to derail the U.S. economic expansion. The effects of Asia's
problems on the U.S. have been slow to materialize. However, there is mounting
evidence that the global slowdown is impacting the U.S. Recognizing this
evidence the Federal Reserve Bank lowered the federal funds rate from 5.50% to
5.25% in September 1998 and to 5.00% in October 1998.
For the year ending September 30, 1998 the fund yielded 4.88% (class A before
sales charge). In a period of stable short term rates the yield was little
changed from last year when the fund's yield was 4.74% (class A before sales
charge). The fund continues to place great emphasis on high quality and
liquidity while looking to target the fund's average maturity at an optimal
length. (Maturity is the length of time between now and the date a security is
repaid. We consider 45-50 days to be a neutral target for the portfolio).
During the past year, the fund's average maturity has fluctuated between 35-60
days with most of the fluctuation occurring between December and March. During
those months we felt that shorter maturities were offering more value and we
kept the average maturity of the fund between 35-50 days. By the end of March we
moved the average maturity of the fund to 60 days to take advantage of the
slightly higher yields on longer maturities during a period in which we did not
expect interest rates to rise. The fund's average maturity stayed near 60 days
until the end of September when it became apparent that short-term interest
rates would be declining over the next few months. We now feel that the market
has fairly priced future interest rate declines and have lowered the average
maturity to 45-50 days.
OUTLOOK
Looking forward, we expect economic growth to moderate further over the next
year. The risk of a recession in 1999 has grown considerably as Asia has done
little to cure their economic ills while Latin America is also beginning to show
signs of economic weakness. The Fed is likely to lower the federal funds rate a
few more times in an effort to stave off a recession. Currently, market prices
indicate that the market is expecting another 0.50% cut in rates over the next
three months. The fund's average maturity will be maintained at our neutral
target for the near future.
Sincerely,
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
Dean C. Kopperud Howard G. Hudson
President Vice President
October 16, 1998
</TABLE>
1
<PAGE>
FORTIS MONEY FUND
Schedule of Investments
September 30, 1998
SHORT-TERM INVESTMENTS-100.05%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Maturity Rating
Amount Yield Date (Unaudited) Value (a)
----------- --------- ------------ ------------- -------------
<C> <S> <C> <C> <C> <C>
BANKS-23.01%
$6,500,000 Banc One Funding Corp.(d).................... 5.66% 10/30/98 A1 $ 6,471,201
3,000,000 Deutsche Bank AG............................. 5.60% 11/09/98 A1 2,982,286
3,000,000 Deutsche Bank AG............................. 5.60% 10/08/98 A1 2,996,792
5,000,000 NationsBank Corp............................. 5.74% 01/06/99 A1 4,925,903
7,000,000 Norwest Corp................................. 5.27% 12/22/98 A1 6,918,205
6,100,000 Toronto-Dominion Holdings USA, Inc........... 5.61% 11/23/98 A1 6,050,966
6,060,000 U.S. Bank N.A. Money Market Variable Rate
Time Desposit.............................. 5.36% 10/01/98 A1+ 6,060,000
-------------
36,405,353
-------------
BEVERAGE-3.13%
5,000,000 Pepsico, Inc. (e)............................ 5.56% 12/14/98 A1 4,944,500
-------------
BROKERAGE AND INVESTMENT-5.36%
2,500,000 Merrill Lynch & Co., Inc..................... 5.67% 10/16/98 A1+ 2,494,354
6,000,000 Morgan Stanley Dean Witter Discover & Co..... 5.65% 10/13/98 A1 5,989,020
-------------
8,483,374
-------------
CAPTIVE AUTO FINANCE-8.67%
4,100,000 Ford Motor Credit Corp....................... 5.67% 12/04/98 A1 4,060,057
2,700,000 Ford Motor Credit Corp....................... 5.69% 01/11/99 A1 2,658,078
6,000,000 General Motors Acceptance Corp............... 5.54% 10/02/98 A1 5,999,090
1,000,000 General Motors Acceptance Corp............... 5.62% 10/26/98 A1 996,174
-------------
13,713,399
-------------
CAPTIVE EQUIPMENT FINANCE-11.37%
6,500,000 IBM Credit Corp.............................. 5.65% 11/20/98 A1 6,450,618
7,000,000 John Deere Capital Corp...................... 5.63% 01/15/99 A1 6,888,082
2,500,000 PACCAR Financial Corp........................ 5.71% 11/24/98 A1 2,479,713
2,200,000 PACCAR Financial Corp........................ 5.68% 01/13/99 A1+ 2,165,362
-------------
17,983,775
-------------
CONSUMER FINANCING-12.86%
6,800,000 American Express Credit Corp................. 5.65% 12/07/98 A1 6,730,774
2,700,000 American General Finance Corp................ 5.63% 10/20/98 A1 2,692,176
4,000,000 American General Finance Corp................ 5.66% 11/18/98 A1 3,970,666
7,000,000 Commercial Credit Corp....................... 5.60% 11/20/98 A1 6,947,013
-------------
20,340,629
-------------
DIVERSIFIED FINANCE-14.89%
3,003,000 Associates Corp. Master Variable Rate Note... 5.42% 10/01/98 A1+ 3,003,000
7,000,000 CIT Group Holdings, Inc...................... 5.58% 12/08/98 A1 6,928,203
3,400,000 General Electric Capital Corp................ 5.45% 01/14/99 A1+ 3,347,640
3,400,000 General Electric Capital Corp................ 5.68% 10/21/98 A1+ 3,389,611
7,000,000 Prudential Funding Corp...................... 5.64% 01/20/99 A1 6,882,587
-------------
23,551,041
-------------
FOOD-GROCERY, MISCELLANEOUS-3.22%
5,100,000 Nestle Capital Corp.......................... 5.55% 10/19/98 A1 5,086,230
-------------
INDUSTRIAL-4.38%
5,000,000 Xerox Credit Corp............................ 5.58% 11/05/98 A1 4,973,507
2,000,000 Xerox Credit Corp............................ 5.78% 02/05/99 A1 1,961,406
-------------
6,934,913
-------------
OIL-REFINING-4.69%
3,500,000 Texaco, Inc.................................. 5.45% 01/12/99 A1 3,447,127
4,000,000 Texaco, Inc.................................. 5.65% 11/12/98 A1 3,974,473
-------------
7,421,600
-------------
</TABLE>
2
<PAGE>
SHORT-TERM INVESTMENTS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Maturity Rating
Amount Yield Date (Unaudited) Value (a)
----------- --------- ------------ ------------- -------------
<C> <S> <C> <C> <C> <C>
UTILITIES-ELECTRIC-8.47%
$6,500,000 CSW Credit, Inc.............................. 5.47% 12/17/98 A1+ $ 6,426,037
7,000,000 Duke Power Co................................ 5.59% 10/23/98 A1 6,976,729
-------------
13,402,766
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$158,267,580) (B).......................... $ 158,267,580
-------------
-------------
</TABLE>
(a) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(b) Also represents cost for federal income tax purposes.
(c) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets.
(d) Commercial paper sold within the terms of a private placement memorandum,
exempt from registration under Section 4(2) of the Securities Act of 1933,
as amended, and may be sold only to dealers in that program or to other
"accredited investors". This security has been determined to be liquid
under guidelines established by the Board of Directors.
(e) Commercial paper sold within the terms of a private placement memorandum,
exempt from registration under Section 4(2) of the Securities Act of 1933,
as amended, and may be sold only to dealers in that program or to other
"accredited investors". This security has been identified by portfolio
management as illiquid. The portfolio entered into the following Section
4(2) transaction, September 1, 1998 the portfolio acquired $5,000,000 par
Pepsico, Inc. due December 14, 1998 with a cost basis on September 30, 1998
of $4,944,500. The value of this security at September 30, 1998 is
$4,944,500 which represents 3.13% of total net assets.
3
<PAGE>
FORTIS MONEY FUND
Statement of Assets and Liabilities
September 30, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C>
ASSETS
Short-term investments, as detailed in the accompanying
schedule, at amortized cost (approximates market) (Note 1).... $158,267,580
Cash on deposit with custodian.................................. 755
Receivables:
Interest and dividends........................................ 34,005
Deferred registration costs (Note 1)............................ 52,038
------------
TOTAL ASSETS...................................................... 158,354,378
------------
LIABILITIES
Cash portion of dividends payable............................... 25,260
Payable for investment advisory and management fees (Note 2).... 78,037
Payable for distribution fees (Note 2).......................... 57
Accounts payable and accrued expenses........................... 59,690
------------
TOTAL LIABILITIES................................................. 163,044
------------
NET ASSETS
Net proceeds of capital stock, par value $.01 per
share-authorized 50,000,000,000 shares........................ $158,191,334
------------
------------
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE:
Class A shares (based on net assets of $156,622,549 and
156,622,549 shares outstanding)............................... $1.00
------------
Class B shares (based on net assets of $304,510 and 304,510
shares outstanding)........................................... $1.00
------------
Class C shares (based on net assets of $714,291 and 714,291
shares outstanding)........................................... $1.00
------------
Class H shares (based on net assets of $549,984 and 549,984
shares outstanding)........................................... $1.00
------------
</TABLE>
FORTIS MONEY FUND
Statement of Operations
For the Year Ended September 30, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C>
NET INVESTMENT INCOME:
Income
Interest income................................................ $8,013,548
-----------
Expenses:
Investment advisory and management fees (Note 2)............... 853,729
Distribution fees (Class B) (Note 2)........................... 859
Distribution fees (Class C) (Note 2)........................... 849
Distribution fees (Class H) (Note 2)........................... 5,160
Legal and auditing fees (Note 2)............................... 38,194
Custodian fees................................................. 13,041
Shareholders' notices and reports.............................. 45,435
Registration fees (Note 1)..................................... 118,882
Directors' fees and expenses................................... 17,159
Transfer agent expenses (Note 2)............................... 134,597
Other.......................................................... 6,506
-----------
Total expenses................................................... 1,234,411
-----------
NET INVESTMENT INCOME.............................................. 6,779,137
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... $6,779,137
-----------
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
FORTIS MONEY FUND
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997
-------------- --------------
<S> <C> <C>
OPERATIONS
Net investment income......................... $ 6,779,137 $ 5,982,346
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A..................................... (6,744,943) (5,968,459)
Class B..................................... (4,300) (2,997)
Class C..................................... (4,329) (320)
Class H..................................... (25,565) (10,570)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............. (6,779,137) (5,982,346)
-------------- --------------
CAPITAL STOCK TRANSACTIONS (AT CONSTANT $1.00
NET ASSET VALUE PER SHARE):
Proceeds from sale of shares
Class A..................................... 661,898,113 402,804,393
Class B..................................... 685,158 338,532
Class C..................................... 5,185,184 93,504
Class H..................................... 1,451,437 1,439,348
Proceeds from shares issued as a result of
reinvested dividends
Class A..................................... 6,172,248 5,416,791
Class B..................................... 3,256 1,582
Class C..................................... 2,773 161
Class H..................................... 23,161 7,531
Less cost of repurchase of shares
Class A..................................... (637,994,732) (402,049,686)
Class B..................................... (439,399) (312,470)
Class C..................................... (4,483,885) (83,904)
Class H..................................... (1,551,779) (880,123)
-------------- --------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.................................. 30,951,535 6,775,659
-------------- --------------
TOTAL INCREASE IN NET ASSETS.................... 30,951,535 6,775,659
NET ASSETS:
Beginning of year............................. 127,239,799 120,464,140
-------------- --------------
End of year................................... $ 158,191,334 $ 127,239,799
-------------- --------------
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
FORTIS MONEY FUND
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The fund is a diversified series
of Fortis Money Portfolios, Inc., an open-end management investment company.
The primary investment objective of the fund is maximum current income to the
extent consistent with stability of principal. The Articles of Incorporation
of Fortis Money Portfolios, Inc. permits the Board of Directors to create
additional portfolios in the future.
The fund offers Class A, Class B, Class C and Class H shares. The fund began
to issue multiple class shares effective November 14, 1994. Class B and H
shares may be subject to a contingent deferred sales charge for six years,
and such shares automatically convert to Class A after eight years. Class C
shares may be subject to a contingent deferred sales charge for one year.
Class A shares of the fund will be offered to investors generally, while
Class B, C and H will be available only for exchange from the corresponding
class of any other fund. All classes of shares have identical voting,
dividend, liquidation and other rights and the same terms and conditions,
except that the level of distribution fees charged differs between classes.
Income, expenses (other than expenses incurred under each class's
distribution agreement) and realized and unrealized gains or losses on
investments are allocated to each class of shares based on its relative net
assets.
SECURITY VALUATION: Pursuant to Rule 2a-7 under the Investment Company Act of
1940, investments are valued at amortized cost which assumes a constant
amortization to maturity of discount or premium. The use of this method
results in a constant net asset value of $1.00.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions
are accounted for on trade date. Interest income including amortization of
premium and discount, is recorded on the accrual basis. For the year ended
September 30, 1998, the cost of purchases and proceeds from sales of
short-term securities aggregated $922,392,060 and $891,436,618 respectively.
INCOME TAXES: The fund intends to qualify, under the Internal Revenue Code,
as a regulated investment company and if so qualified, will not have to pay
federal income taxes to the extent its taxable net income is distributed. On
a calendar year basis, the fund intends to distribute substantially all of
its net investment income and realized gains, if any, to avoid the payment of
federal excise taxes.
DEFERRED COSTS: Registration costs are deferred and charged to income over
the registration period.
INCOME DISTRIBUTIONS: It is the policy of the fund to declare a distribution
of all its net investment income each day the New York Stock Exchange is
open, to shareholders of record the previous day, to be paid on the last
business day of each month.
ILLIQUID SECURITIES: At October 31, 1998, investments in securities for the
fund included an issue that is illiquid. Fortis Money Fund currently limit
investments in illiquid securities to 5% of total net asset, at market value,
at date of purchase. The aggregate value of such security at October 31, 1998
was $4,944,500 which represents 3.13% of total net assets. Pursuant to
guidelines adopted by the Board of Directors, certain unregistered securities
are determined to be liquid and are not included within the percent
limitations specified above.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of increase and decrease
in net assets from operations during the reporting period. Actual results
could differ from those estimates.
2. PAYMENTS TO RELATED PARTIES: Fortis Advisers, Inc. is the investment adviser
for the fund. Investment advisory and management fees are computed at an
annual rate of .6% of the first $500 million of average daily net assets and
.55% of average daily net assets in excess of $500 million.
Pursuant to a plan adopted under Rule 12b-1 of the Investment Company Act of
1940, Fortis Advisers uses .2% of its advisory and management fee to pay for
distribution expenses. Classes B, C and H pay Fortis Investors, Inc. (the
fund's principal underwriter) additional distribution fees equal to .8% of
average daily net assets (of the respective classes) on an annual basis.
Fortis Investors, Inc. also received sales charges (paid by redeemers of the
funds' shares) aggregating $184 for Class A, $3,942 for Class B, $22 for
Class C and $24,591 for Class H.
The fund also reimburses Fortis Advisers, Inc. for direct transfer agent
expenses such as postage.
Legal fees and expenses aggregating $12,300 for the year ended September 30,
1998, were paid to a law firm of which the secretary of the fund is a
partner.
6
<PAGE>
- --------------------------------------------------------------------------------
3. FINANCIAL HIGHLIGHTS: Selected per share historical data was as follows:
<TABLE>
<CAPTION>
Class B
Class A ----------------
------------------------------------------------------------- Year Ended
Year Ended September 30, September 30,
------------------------------------------------------------- ----------------
1998 1997 1996 1995 1994 1998 1997
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- ------ ------
Operations:
Investment income - net............... .05 .05 .05 .05 .03 .04 .04
--------- --------- --------- --------- --------- ------ ------
Distributions to shareholders:
From investment income - net.......... (.05) (.05) (.05) (.05) (.03) (.04) (.04)
--------- --------- --------- --------- --------- ------ ------
Net asset value, end of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- ------ ------
Total return @.......................... 4.88% 4.74% 4.74% 5.03% 2.92% 4.06% 3.97%
Net assets end of period (000s
omitted).............................. $ 156,623 $ 126,547 $ 120,375 $ 105,472 $ 105,659 $ 305 $ 55
Ratio of expenses to average daily net
assets................................ .86% .88% .91% .91% .88% 1.66% 1.68%
Ratio of net investment income to
average daily net assets.............. 4.77% 4.64% 4.67% 4.91% 2.92% 4.00% 3.94%
<CAPTION>
1996+++
<S> <C>
- --------------------------------------------------------
Net asset value, beginning of period.... $1.00
------
Operations:
Investment income - net............... .04
------
Distributions to shareholders:
From investment income - net.......... (.04)
------
Net asset value, end of period.......... $1.00
------
Total return @.......................... 4.11%
Net assets end of period (000s
omitted).............................. $ 28
Ratio of expenses to average daily net
assets................................ 1.71%*
Ratio of net investment income to
average daily net assets.............. 3.99%*
</TABLE>
<TABLE>
<CAPTION>
Class C Class H
-------------------------------------------- --------------------------------
Year Ended September 30, Year Ended September 30,
-------------------------------------------- --------------------------------
1998 1997 1996 1995++ 1998 1997 1996
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- --------
Operations:
Investment income - net............... .04 .04 .05 .01 .04 .04 .04
-------- -------- -------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.04) (.04) (.05) (.01) (.04) (.04) (.04)
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- --------
Total return @.......................... 4.12% 4.45% 4.97% 1.33% 4.07% 4.06% 4.04%
Net assets end of period (000s
omitted).............................. $ 714 $ 10 $ 1 $ 9 $ 550 $ 627 $ 60
Ratio of expenses to average daily net
assets................................ 1.66% 1.68% 1.46%(a) 1.71%* 1.66% 1.68% 1.71%
Ratio of net investment income to
average daily net assets.............. 4.08% 3.98% 4.33%(a) 4.46%* 3.96% 4.02% 4.03%
<CAPTION>
1995+
<S> <C>
- ---------------------------------------------------------------
Net asset value, beginning of period.... $ 1.00
--------
Operations:
Investment income - net............... .02
--------
Distributions to shareholders:
From investment income - net.......... (.02)
--------
Net asset value, end of period.......... $ 1.00
--------
Total return @.......................... 2.52%
Net assets end of period (000s
omitted).............................. $ 122
Ratio of expenses to average daily net
assets................................ 1.71%*
Ratio of net investment income to
average daily net assets.............. 4.43%*
</TABLE>
* Annualized.
+ For the period from March 16, 1995 (date of first investment) to
September 30, 1995.
++ For the period from June 14, 1995 (date of first investment) to
September 30, 1995.
+++ For the perod from October 9, 1995 (date of first investment) to
September 30, 1996.
@ These are the portfolio's total returns during the periods, including
reinvestment of all distributions.
(a) Advisers has reimbured expenses for 12b-1 fees charged in excess of
National Association of Securities Dealers limitations. For the year
ending September 30, 1996, had the reimbursement not been made, ratios
of expenses and net investment income to average daily net assets
would have been 1.71% and 4.08% respectively, for Class C.
7
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Fortis Money Portfolios, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of Fortis Money Fund (a series of
Fortis Money Portfolios, Inc.) as of September 30, 1998, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the years in the two-year period ended September 30,
1998, and the financial highlights for the periods presented. These financial
statements and the financial highlights are the responsibility of fund
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Investment securities held in custody are confirmed to us by the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of
Fortis Money Fund at September 30, 1998 and the results of its operations for
the year then ended, the changes in its net assets for each of the years in the
two-year period ended September 30, 1998, and the financial highlights for each
of the periods presented, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
November 6, 1998
8
<PAGE>
DIRECTORS AND OFFICERS
DIRECTORS Richard W. Cutting CPA AND FINANCIAL CONSULTANT
Allen R. Freedman CHAIRMAN AND CHIEF EXECUTIVE OFFICER,
FORTIS, INC. MANAGING DIRECTOR OF
FORTIS INTERNATIONAL, N.V.
Dr. Robert M. Gavin PRESIDENT, CRANBROOK EDUCATION
COMMUNITY. PRIOR TO JULY 1996,
PRESIDENT MACALESTER COLLEGE
Benjamin S. Jaffray CHAIRMAN, SHEFFIELD GROUP, LTD.
Jean L. King PRESIDENT, COMMUNI-KING
Dean C. Kopperud CHIEF EXECUTIVE OFFICER AND DIRECTOR,
FORTIS ADVISERS, INC. PRESIDENT AND
DIRECTOR, FORTIS INVESTORS, INC.
SENIOR VICE PRESIDENT AND DIRECTOR,
FORTIS BENEFITS INSURANCE COMPANY AND
TIME INSURANCE COMPANY
Edward M. Mahoney PRIOR TO JANUARY 1995, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER, FORTIS
ADVISERS, INC., FORTIS INVESTORS,
INC.
Robb L. Prince FINANCIAL AND EMPLOYEE BENEFIT
CONSULTANT. PRIOR TO JULY 1995, VICE
PRESIDENT AND TREASURER, JOSTENS,
INC.
Leonard J. Santow PRINCIPAL, GRIGGS & SANTOW, INC.
Noel Shadko MARKETING CONSULTANT. PRIOR TO MAY
1996, SENIOR VICE PRESIDENT OF
MARKETING & STRATEGIC PLANNING,
ROLLERBLADE, INC.
Joseph M. Wikler INVESTMENT CONSULTANT AND PRIVATE
INVESTOR. PRIOR TO JANUARY 1994,
DIRECTOR OF RESEARCH, CHIEF
INVESTMENT OFFICER, PRINCIPAL, AND
DIRECTOR, THE ROTHSCHILD CO.
OFFICERS
Dean C. Kopperud
PRESIDENT AND DIRECTOR
Robert W. Beltz, Jr.
VICE PRESIDENT
James S. Byrd
VICE PRESIDENT
Peggy L. Ettestad
VICE PRESIDENT
Tamara L. Fagely
VICE PRESIDENT AND TREASURER
Howard G. Hudson
VICE PRESIDENT
Dickson W. Lewis
VICE PRESIDENT
Lucinda S. Mezey
VICE PRESIDENT
David A. Peterson
VICE PRESIDENT
Scott R. Plummer
VICE PRESIDENT
Rhonda J. Schwartz
VICE PRESIDENT
Melinda S. Urion
VICE PRESIDENT
Gary N. Yalen
VICE PRESIDENT
Michael J. Radmer
SECRETARY
INVESTMENT MANAGER, REGISTRAR Fortis Advisers, Inc.
AND TRANSFER AGENT BOX 64284, ST. PAUL, MINNESOTA 55164
PRINCIPAL UNDERWRITER Fortis Investors, Inc.
BOX 64284, ST. PAUL, MINNESOTA 55164
CUSTODIAN U.S. Bank National Association
MINNEAPOLIS, MINNESOTA
GENERAL COUNSEL Dorsey & Whitney LLP
MINNEAPOLIS, MINNESOTA
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
MINNEAPOLIS, MINNESOTA
The use of this material is authorized only when preceded or accompanied by a
prospectus.
9
<PAGE>
[LOGO]
FORTIS
Solid partners, flexible solutions-SM-
- --------------------------------------------------------------------------------
FORTIS MEANS STEADFAST
Fortis means "steadfast" in Latin. The worldwide Fortis family of companies
lives up to the name, and has each day since the 1800s, with flexible
solutions tailored to our customers' individual needs. We deliver the
stability you require today ... and tomorrow. You can count on it.
Fortis Financial Group offers mutual funds, annuities and life insurance
through its broker/dealer Fortis Investors, Inc. We're part of Fortis, Inc.,
a financial services company that provides speciality insurance and
investment products to individuals, businesses, associations and other
financial services organizations throughout the United States.
Fortis, Inc. is part of Fortis, a worldwide group of companies active in the
fields of insurance, banking and investments. Fortis is jointly owned by
Fortis AMEV of The Netherlands and Fortis AG of Belgium.
Fortis: Steadfast for YOU!
FORTIS FINANCIAL GROUP
Fortis Advisers, Inc.
(fund management since 1949)
Fortis Investors, Inc.
(principal underwriter; member NASD, SIPC)
Fortis Benefits Insurance Company
& Fortis Insurance Company
(issuers of FFG's insurance products)
P.O. Box 64284, St. Paul, MN 55164
Telephone (800) 800-2000
http://www.ffg.us.fortis.com
- --------------------------------------------------------------------------------
FORTIS FINANCIAL GROUP ---------------
P.O. Box 64284 Bulk Rate
St. Paul, MN 55164 U.S. Postage
PAID
Permit No. 3794
FORTIS MONEY FUND Minneapolis, MN
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[LOGO] Printed on recycled paper with
40% preconsumer waste and 10%
post consumer waste. Please recycle.
The Fortis logo and Fortis-SM- are servicemarks
of Fortis AMEV and Fortis AG.
95221-C- Fortis 11/98
