<PAGE>
FORTIS FIDUCIARY FUND, INC.
Semi-Annual Report
February 28, 1995
HIGHLIGHTS
FOR THE SIX-MONTH PERIOD ENDED FEBRUARY 28, 1995:
<TABLE>
<CAPTION>
S & P 500
CLASS A CLASS B* CLASS C* CLASS H* STOCK INDEX
<S> <C> <C> <C>
NET ASSET VALUE PER SHARE:
Beginning of period $30.23 $30.15 $30.15 $30.15 475.50
End of period $29.31 $29.26 $29.28 $29.27 487.38
DISTRIBUTIONS PER SHARE:
From net investment income $01.21 $01.21 $01.21 $01.21 --
<FN>
* Period from November 14, 1994 (commencement of operations) to February 28,
1995.
</TABLE>
CONTENTS
LETTER TO SHAREHOLDERS 1
SCHEDULE OF INVESTMENTS 3
STATEMENT OF ASSETS AND LIABILITIES 4
STATEMENT OF OPERATIONS 5
STATEMENTS OF CHANGES IN NET ASSETS 6
NOTES TO FINANCIAL STATEMENTS 7
BOARD OF DIRECTORS AND OFFICERS 9
HOW TO USE THIS REPORT
For a quick overview of the fund's performance during the past six months,
refer to the Highlights box below. The letter from the portfolio manager and
president provides a more detailed analysis of the fund and financial markets.
The charts alongside the letter are useful because they provide more information
about your investments. The top holdings chart shows the types of securities in
which the fund invests, and the pie chart shows a breakdown of the fund's assets
by sector. The portfolio changes show the investment decisions your fund manager
has made over the period in response to changing market conditions.
The performance chart graphically compares the fund's total return performance
with a selected investment index. Remember, however, that an index may reflect
the performance of securities the fund may not hold. Also, the index does not
deduct sales charges, investment advisory fees and other fund expenses, whereas
your fund does. Individuals cannot buy an unmanaged index fund without incurring
some charges and expenses. Sales charges pay for your investment
representative's advice.
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.
TOLL-FREE PERSONAL ASSISTANCE
Shareholder Services
(800) 800-2638, Ext. 3012 or 3014
7:30 a.m. to 5:30 p.m. CST, M-Th
7:30 a.m. to 5:00 p.m. CST, F
TOLL-FREE INFORMATION LINE
For daily account balances, transaction activity or net asset value information
(800) 800-2638, Ext. 4344 24 hours a day
FOR MORE INFORMATION ABOUT FORTIS FINANCIAL GROUP'S FAMILY OF PRODUCTS, CALL
YOUR INVESTMENT REPRESENTATIVE OR THE HOME OFFICE AT (800) 800-2638. TO ORDER
PROSPECTUSES OR SALES LITERATURE FOR ANY FORTIS PRODUCT, CALL (800) 800-2638
EXT. 4579.
<PAGE>
DEAR SHAREHOLDER,
We're pleased to present the Fortis Fiduciary Fund semi-annual report for the
period ended February 28, 1995.
ECONOMIC REVIEW AND INVESTMENT STRATEGIES
For the third consecutive year, stock price indices traded within an extremely
narrow range, producing modest returns at best. The main reason for last year's
lackluster market was the sharp rise in interest rates, reversing more than a
decade of rate declines. Although 1994 corporate profits realized strong
increases, price/earnings ratios applied to those profits were compressed by
rising interest rates. Looking forward, the three-year sideways correction in a
period of rising earnings produced attractive equity valuations as we entered
1995.
Thus far in 1995, stock prices have moved irregularly upward to new all-time
highs. Investors currently feel the Federal Reserve has completed its tight
monetary policy, initiated in February 1994 in an effort to control inflation.
Further, the belief is that the Federal Reserve has accomplished its objective
of slowing economic activity to a non-inflationary growth level. This outcome
would be ideal, but its reality is currently far from certain.
In the meantime, continued strength in corporate earnings provides a strong
underpinning for stock prices. The surge in cash flows, which has not been well
publicized, has strengthened corporate financial positions and led to a major
trend in stock buy/back programs, rivaling the huge equity retirement of the
1980s.
Mutual funds continue to see an inflow into equity funds. Some of which may be
redemptions from nondomestic funds returning to safer havens, considering the
problems in Mexico and the poor experience in emerging market investments in the
past year.
Additionally, there are expectations for Congressional actions that could be
favorable to our markets, including a reduction in the capital gains tax rate,
various plans to stimulate savings, and real action to limit government
spending. While these are some of the factors currently supporting stock prices,
ultimately the inter-relationships of economic activity, inflation and interest
rates will dictate the stock market's direction and magnitude of change.
PORTFOLIO REVIEW
The portfolio continues to include a large exposure to several widely diverse
areas of technology. The motivation behind capital spending for some time has
been the need to improve productivity to compete more effectively in one's
domestic and global markets. Much of this corporate spending has been in the
technological area in an effort to improve processes and products, as well as to
lower costs of production.
Simultaneously, sales of personal computers for home use have been exploding as
individuals attempt to gain better control of their lives and time.
Another highly publicized activity, but whose promise is just dawning, is the
information highway. The beneficiaries of all this activity include software
companies, managers of large data bases, companies that facilitate computer
networks -- intraoffice, as well as across the entire enterprise -- and a wide
range of producers of products and services that provide the implementation and
use of all these technologies. The need is worldwide, and U.S. companies are the
clear leaders in nearly all of these areas.
IN CLOSING
We're pleased to announce the addition of class share pricing, which offers
investors a choice of purchasing plans. Each class of shares represents the same
investment portfolio, the same fund philosophy and the same professional money
management you've come to associate with Fortis Financial Group.
As you invest, consider the amount of your investment, the length of time you
plan to hold it, your current financial needs and the expenses of each class of
shares. Then talk with your financial advisor to determine the class of shares
that best meets your financial needs and goals.
We appreciate your investment in the Fortis Fiduciary Fund. If you have any
questions, please call us or talk with your investment professional.
Sincerely,
Dean C. Kopperud
President
Stephen M. Poling
Vice President
March 23, 1995
<PAGE>
<TABLE>
<CAPTION>
TOP TEN HOLDINGS AS OF 2/28/95
Percent of
Stocks net assets
<S> <C>
1. Oracle Systems Corp. 4.6%
2. Silicon Graphics, Inc. 4.6%
3. Motorola, Inc. 4.3%
4. Mattel, Inc. 4.0%
5. Microsoft Corp. 3.1%
6. General Instrument Corp. 2.7%
7. Home Depot, Inc. 2.7%
8. Sterling Software, Inc. 2.5%
9. Lowe's Companies, Inc. 2.4%
10. LDDs Communications, Inc. 2.3%
</TABLE>
PORTFOLIO CHANGES FOR THE SIX-MONTH PERIOD ENDED FEBRUARY 28, 1995
Additions:
Computer Associates International, Inc.
E M C Corp.
Viacom, Inc. Non-Voting
ELIMINATIONS:
Blockbuster Entertainment Corp.
Grupo Televisa, S.A. de C.V. ADR
Telefonos de Mexico, S.A. de C.V. ADR
FORTIS FIDUCIARY FUND CLASS B, C, AND H TOTAL RETURNS SINCE INCEPTION 11/14/94
<TABLE>
<CAPTION>
Without With
CDSC CDSC
<S> <C> <C>
Class B Shares +1.29% -2.20%
Class C Shares +1.36% +0.39%
Class H Shares +1.33% -2.17%
</TABLE>
The performance of the separate classes will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Past performance is not indicative of future performance.
Total returns include investment of all dividend and capital gains
distributions. Date shares were first offered to the public.
Assumes redemption on February 28, 1995.
SCHEDULE OF INVESTMENTS
(Unaudited)
February 28, 1995
<TABLE>
<CAPTION>
COMMON STOCKS -- 87.53%
Market
Shares Cost (b) Value (c)
<S> <C> <C>
BROADCASTING -- 1.92%
30,000 The News Corp., Ltd. ADS (d) $ 568,584 $ 543,750
9,698 Viacom, Inc. Non-Voting (a) 374,377 433,986
942,961 977,736
BUSINESS SERVICES AND SUPPLIES -- 6.08%
19,200 First Data Corp. 642,885 1,032,000
2,860 First Financial Management Corp. 151,284 197,697
37,000 MBNA Corp. 805,564 975,875
31,300 Sensormatic Electronics Corp. 915,309 888,138
2,515,042 3,093,710
COMPUTER -- SOFTWARE -- 12.77%
15,900 BMC Software, Inc. (a) 877,274 1,021,575
5,400 Computer Associates International, Inc. 270,259 307,800
35,000 E M C Corp. (a) 702,100 599,375
15,300 Lotus Development Corp. (a) 776,271 638,775
24,900 Microsoft Corp. (a) 315,565 1,568,700
75,000 Oracle Systems Corp. (a) 396,900 2,362,500
3,338,369 6,498,725
ELECTRONIC -- CONTROLS AND EQUIPMENT -- 1.51%
16,700 Applied Materials, Inc. (a) 665,585 770,287
ELECTRONIC -- SEMICONDUCTOR AND CAPACITOR -- 5.63%
8,500 Intel Corp. 169,647 677,875
38,000 Motorola, Inc. 921,452 2,185,000
1,091,099 2,862,875
<PAGE>
FINANCE COMPANIES MISCELLANEOUS -- 4.16%
14,800 Federal National Mortgage Association 518,000 1,141,450
25,472 Green Tree Financial Corp. 669,081 974,304
1,187,081 2,115,754
HEALTH CARE SERVICES -- 7.02%
15,600 Columbia/HCA Healthcare Corp. 580,273 645,450
10,800 PacifiCare Health Systems, Inc., Class B (a) 499,670 758,700
16,800 United Healthcare Corp. 444,998 722,400
20,150 U.S. HealthCare, Inc. 579,609 866,450
15,600 Value Health, Inc. (a) 662,576 581,100
2,767,126 3,574,100
HOTEL AND MOTEL -- 2.12%
24,250 Mirage Resorts, Inc. (a) 546,510 578,969
14,000 Promus Companies, Inc. (a) 694,400 500,500
1,240,910 1,079,469
MEDICAL SUPPLIES -- 1.65%
14,000 Medtronic, Inc. (and rights) 334,290 840,000
MISCELLANEOUS -- 1.99%
28,700 CUC International, Inc. (a) 715,911 1,011,675
OFFICE EQUIPMENT AND SUPPLIES -- 8.66%
68,000 Silicon Graphics, Inc. (a) 883,616 2,354,500
35,600 Sterling Software, Inc. (a) 650,231 1,286,050
17,100 Tandy Corp. 745,927 765,225
2,279,774 4,405,775
PUBLISHING -- 0.95%
9,600 Scholastic Corp. (a) 489,198 484,800
RESTAURANTS AND FRANCHISING -- 0.62%
16,000 Brinker International, Inc. (a) 287,136 318,000
RETAIL -- DEPARTMENT STORES -- 2.76%
18,500 Kohl's Corp. (a) 722,598 758,500
27,200 Wal-Mart Stores, Inc. 206,975 646,000
929,573 1,404,500
RETAIL -- MISCELLANEOUS -- 13.80%
25,000 AutoZone, Inc. (a) $ 482,350 $ 662,500
30,833 Home Depot, Inc. 436,457 1,383,631
36,000 Lowe's Companies, Inc.(d) 727,171 1,210,500
46,350 Office Depot, Inc. (a) 351,521 1,083,431
31,900 Pep Boys Manny Moe & Jack 589,736 1,044,725
28,000 Price/Costco, Inc. (a) 560,434 381,500
20,800 Talbots (The), Inc. 533,295 657,800
21,475 Toys 'R' Us, Inc. (a) 317,733 598,616
3,998,697 7,022,703
TELECOMMUNICATIONS -- 5.95%
21,600 Cisco Systems, Inc. (a) 535,865 729,000
16,000 Ericsson (L.M.) Telephone Co., Class B ADR 765,326 910,000
43,800 General Instrument Corp. (a) 1,122,803 1,390,650
2,423,994 3,029,650
TELEPHONE SERVICES -- 2.31%
50,054 LDDS Communications, Inc. (a) 526,189 1,173,140
TOYS -- 4.01%
91,406 Mattel, Inc. 734,778 2,045,209
UTILITIES -- TELEPHONE -- 3.62%
16,251 ALC Communications Corp. (a) 415,501 479,405
26,500 Air Touch Communications, Inc. (a) 678,290 722,125
14,000 Telephone & Data Systems, Inc. 743,400 638,750
1,837,191 1,840,280
Total Common Stocks $28,304,904 $44,548,388
PREFERRED STOCKS 1.67%
BROADCASTING -- 0.47%
15,000 The News Corp., Preferred ADS (a)(d) $ 246,006 $ 241,875
TELECOMMUNICATIONS -- 1.20%
8,100 Nokia ADS (NOK) (a) 331,126 609,525
Total Preferred Stocks 577,132 851,400
<PAGE>
Total Equity Investments $28,882,036 $45,399,788
SHORT-TERM INVESTMENTS -- 10.14%
MASTER NOTES:
$2,250,000 Associates Corp. Master Variable Rate Note,
Current Rate -- 5.95% $ 2,250,000
737,000 Goldman Sachs Master Variable Rate Note,
Current Rate -- 6.18% 737,000
2,987,000
TIME DEPOSIT:
2,172,941 First Trust Money Market Variable Rate
Time Deposit Account, Current Rate -- 5.94% 2,172,941
Total Short-Term Investments 5,159,941
TOTAL INVESTMENTS IN SECURITIES (COST: $34,041,977) (b) $50,559,729
<FN>
(a) Presently not paying dividend income.
(b) At February 28, 1995, the cost of securities for federal income tax
purposes was $34,041,977, and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
Unrealized appreciation $17,377,467
Unrealized depreciation (859,715)
Net unrealized appreciation $16,517,752
(c) See Note A of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Security is fully or partially on loan at February 28, 1995. See Note
A of accompanying Notes to Financial Statements.
(e) Note: Percentage of investments as shown is the ratio of the total
market value to total net assets. Market value of investments in foreign
securities represents 4.53% of net assets as of February 28, 1995.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
(Unaudited)
February 28, 1995
<TABLE>
<S> <C>
ASSETS:
Investments in securities, as detailed in the accompanying
schedule, at market (cost $34,041,977) (Note A) $50,559,729
Cash on deposit with custodian 76,283
Collateral for securities lending transactions (Note A) 1,013,700
Receivables:
Investment securities sold 139,405
Subscriptions of capital stock 52,670
Dividends and interest 22,768
Prepaid Expenses 107,618
TOTAL ASSETS 51,972,173
LIABILITIES:
Payable upon return of securities loaned (Note A) 1,013,700
Redemptions of capital stock 9,969
Payable for investment advisory and management fees 38,971
Payable for distribution fees 1,434
Accounts payable and accrued expenses 14,281
TOTAL LIABILITIES 1,078,355
NET ASSETS:
Net proceeds of capital stock, par value $.01 per share -- authorized
100,000,000,000 shares; 34,810,327
Unrealized appreciation of investments 16,517,752
Accumulated net realized loss from sale of investments (308,350)
Net investment loss (125,911)
TOTAL NET ASSETS $50,893,818
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE:
Class A shares (based on net assets of $50,320,171 and 1,716,719 shares
outstanding) $ 29.31
Class B shares (based on net assets of $88,302 and 3,018 shares outstanding) $ 29.26
Class C shares (based on net assets of $21,758 and 743 shares outstanding) $ 29.28
Class H shares (based on net assets of $463,587 and 15,841 shares outstanding) $ 29.27
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
STATEMENT OF OPERATIONS
(Unaudited)
For the Six-Month Period Ended February 28, 1995
<TABLE>
<S> <C>
NET INVESTMENT LOSS:
Income:
Dividends $ 91,718
Interest 139,792
Fee income (Note A) 185
Total income 231,695
Expenses:
Investment advisory and management fees (Note B) 244,127
Distribution fees (Class A) (Note B) 60,857
Distribution fees (Class B) (Note B) 141
Distribution fees (Class C) (Note B) 24
Distribution fees (Class H) (Note B) 534
Legal and auditing fees (Note B) 13,439
Registration fees 12,000
Custodian fees 9,620
Shareholders' notices and reports 8,232
Directors' fees and expenses 6,584
Other 2,048
Total expenses 357,606
NET INVESTMENT LOSS (125,911)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE A):
Net realized gain from security transactions 111,999
Net change in unrealized appreciation of investments 600,025
NET GAIN ON INVESTMENTS 712,024
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 586,113
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six-Month
Period Ended For the
February 28, 1995 Year Ended
(Unaudited) August 31, 1994
<S> <C> <C>
OPERATIONS:
Net investment loss $ (125,911) $ (230,294)
Net realized gain from security transactions 111,999 1,569,831
Net change in unrealized appreciation (depreciation) of investments 600,025 2,723,976
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 586,113 4,063,513
DISTRIBUTIONS TO SHAREHOLDERS:
From realized gains on investments
Class A (1,980,840) (4,856,194)
Class B (1,323) --
Class C (215) --
Class H (4,405) --
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (1,986,783) (4,856,194)
CAPITAL STOCK SOLD AND REPURCHASED:
Proceeds from sale of shares (Note B)
Class A (224,677 and 515,441 shares) 6,630,981 15,607,235
Class B (2,988 shares) 86,040 --
Class C (736 shares) 21,134 --
Class H (15,709 shares) 452,060 --
Proceeds of shares issued as a result of reinvested dividends
Class A (69,857 and 168,978 shares) 1,932,254 4,743,211
<PAGE>
Class B (44 shares) 1,202 --
Class C (8 shares) 215 --
Class H (163 shares) 4,499 --
Less cost of repurchase of shares
Class A (193,154 and 650,116 shares) (5,665,910) (18,268,198)
Class B (14 shares) (395) --
Class C (1 share) (29) --
Class H (31 shares) (284) --
NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 3,461,767 2,082,248
TOTAL INCREASE IN NET ASSETS 2,061,097 1,289,567
Net Assets:
Beginning of period 48,832,721 47,543,154
End of period (includes net investment loss
of $125,911 and $0, respectively) $50,893,818 $48,832,721
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The fund is an open-end
diversified management investment company. The primary investment objective
of the fund is short and long-term capital appreciation. The fund offers
Class A, Class B, Class C and Class H shares. Class A shares are sold with
a front-end sales charge. Class B and H shares are sold without a front-end
sales charge and may be subject to a contingent deferred sales charge, and
such shares automatically convert to Class A after eight years. Class C
shares are sold without a front-end sales charge and may be subject to a
contingent deferred sales charge. 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: Investments in securities traded on a national
securities exchange or on the NASDAQ National Market System are valued at
the last reported sales price; listed securities for which no sale was
reported are valued at the previous day's last sale price on that exchange;
and over-the-counter securities for which no sale was reported are valued
at the last reported bid price. Short-term investments with maturities of
less than 60 days when acquired, or which subsequently are within 60 days
of maturity, are valued at amortized cost.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security
transactions are accounted for on the trade date and dividend income is
recorded on the ex-dividend date. Interest income is recorded on the
accrual basis. Realized security gains and losses are determined using the
identified cost method.
For the six-month period ended February 28, 1995, the cost of purchases
and proceeds from sales of securities (other than short-term securities)
aggregated $1,324,280 and $1,710,804, respectively.
LENDING OF PORTFOLIO SECURITIES: At February 28, 1995 securities valued
at $957,113 were on loan to brokers from the Fund. For collateral, the Fund's
custodian received $1,013,700 in cash which is maintained in a separate
account and invested by the custodian in short term investment vehicles.
Fee income from securities lending amounted to $185 for the six-month
period ended February 28, 1995. The risks to the Fund in security lending
transactions are that the borrower may not provide additional collateral
when required or return the securities when due and that the proceeds from
the sale of investments made with cash collateral received will be less
than amounts required to be returned to the borrowers.
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 is subject to a 4% federal
excise tax to the extent it does not distribute substantially all of its
net investment income and realized gains, if any.
Net investment income and net realized gains may differ for financial
statement and tax purposes because of wash sale transactions and other
book-to-tax differences. The character of distributions made during the
year from net investment income or net realized gains may therefore differ
from their ultimate characterization for federal income tax purposes. Also,
due to the timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that the income or
realized gains (losses) were recorded by the fund.
INCOME AND CAPITAL GAINS DISTRIBUTIONS: It is the policy of the fund to
generally pay annual distributions from net investment income and make
distributions of any realized capital gains as required by law. These
income and capital gains distributions are distributed on the record date
and are reinvested in additional shares of the fund at net asset value or
payable in cash without any charge to the shareholder.
<PAGE>
B. 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 1% of the first $100 million of average daily net
assets, .8% for the next $150 million and .7% of net assets in excess of
$250 million.
In addition to the investment advisory and management fee, Classes A, B,
C and H pay Fortis Investors, Inc. (the fund's principal underwriter)
distribution fees equal to .25% (Class A) and 1.00% (Class B, C and H) of
average daily net assets (of the respective classes) on an annual basis, to
be used to compensate those who sell shares of the fund and to pay certain
other expenses of selling fund shares. Fortis Investors, Inc., also
received sales charges (paid by purchasers of the fund's shares)
aggregating $59,516 for Class A for the six-month period ended February 28,
1995.
Legal fees and expenses aggregating $5,256 for the six-month period
ended February 28, 1995, were paid to a law firm of which the secretary of
the fund is a partner.
C. CAPITAL CHANGES: At the special shareholders' meeting of August 23,
1994, the Amended and Restated Articles of Incorporation were approved,
which increased the number of authorized shares from 10 billion to 100
billion and allows the fund to issue multiple classes of shares.
D. FINANCIAL HIGHLIGHTS: Selected per share historical data was as follows:
<TABLE>
<CAPTION>
CLASS A
Year Ended
Year Ended August 31, August 31 December 31,
1995*** 1994 1993 1992 1991** 1990
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 30.23 $ 30.07 $ 28.74 $ 26.77 $ 20.27 $ 25.96
Operations:
Investment income (loss) -- net (.07) (.14) (.09) .04 .06 22
Net realized and unrealized gains (losses) on investments .36 2.99 3.11 2.68 6.48 (3.09)
Total from operations .29 2.85 3.02 2.72 6.54 (2.87)
Distributions to shareholders:
From investment income -- net -- -- -- (.11) (.02) (.24)
From net realized gains (1.21) (2.69) (1.69) (.64) (.02) (2.58)
Total distributions to shareholders (1.21) (2.69) (1.69) (.75) (.04) (2.82)
Net asset value, end of period $ 29.31 $ 30.23 $ 30.07 $ 28.74 $ 26.77 $ 20.27
Total return@ 1.20% 10.17% 10.58% 10.28% 32.23% (11.07%)
Net assets end of period (000s omitted) $ 50,320 $ 48,833 $ 47,543 $ 43,504 $39,367 $30,517
Ratio of expenses to average daily net assets 1.45%* 1.45% 1.45% 1.47% 1.46%* 1.44%
Ratio of net investment income to average daily net assets (.51%)* (.45%) (.31%) 14% .42%* 1.00%
Portfolio turnover rate 3% 25% 53% 26% 34% 68%
</TABLE>
<TABLE>
<CAPTION>
Class B Class C Class H
1995+ 1995+ 1995+
<S> <C> <C> <C>
Net asset value, beginning of period $ 30.15 $ 30.15 $ 30.15
Operations:
Investment income (loss) -- net (.06) (.05) (.05)
Net realized and unrealized gains (losses) on investments .38 .39 .38
Total from operations .32 .34 .33
Distribution to shareholders:
From investment income -- net -- -- --
From net realized gains (1.21) (1.21) (1.21)
Total distributions to shareholders (1.21) (1.21) (1.21)
Net asset value, end of period $ 29.26 $ 29.28 $ 29.27
Total Return@ 1.29% 1.36% 1.33%
Net assets end of period (000s omitted) $ 88 $ 22 $ 464
Ratio of expenses to average daily net assets 2.20%* 2.20%* 2.20%*
Ratio of net investment loss to average daily net assets (1.25%)* (1.38%)* (1.34%)*
Portfolio turnover rate 3% 3% 3%
<FN>
@ These are the Fund's total returns during the periods, including
reinvestment of all dividend and capital gains distributions without adjustments
for sales charge.
* Annualized.
** Eight-month period ended August 31, 1991.
*** For the six-month period ended February 28, 1995.
+ For the period from November 14, 1994 (commencement of operations) to
February 28, 1995.
</TABLE>
<PAGE>
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, Macalester College
BENJAMIN S. JAFFRAY, Chairman, Sheffield Group, Ltd.
JEAN L. KING, President, Communi-King
DEAN C. KOPPERUD, President and Director, Fortis Advisers, Inc., Fortis
Investors Inc., Senior Vice President and Director of Fortis Benefits Insurance
Company, Senior Vice President of Time Insurance
EDWARD M. MAHONEY, prior to January, 1995, Chairman and Chief Executive Officer,
Fortis Advisers, Inc., Fortis Investors, Inc.
THOMAS R. PELLETT, Prior to January, 1991, Senior Vice President --
Administration and Corporate Affairs and Director, Pet Incorporated
ROBB L. PRINCE, Vice President and Treasurer, Jostens, Inc.
LEONARD J. SANTOW, Principal, Griggs & Santow, Inc.
JOSEPH M. WIKLER, Prior to January, 1994, Director of Research, Chief Investment
Officer, Principal and Director, The Rothschild Co.
OFFICERS
DEAN C. KOPPERUD, President and Director
STEPHEN M. POLING, Vice President
DENNIS M. OTT, Vice President
JAMES S. BYRD, Vice President
ROBERT C. LINDBERG, Vice President
KEITH R. THOMSON, Vice President
ROBERT W. BELTZ, JR., Vice President
ROBERT J. CLANCY, Vice President
THOMAS D. GUALDONI, Vice President
LARRY A. MEDIN, Vice President
JON H. NICHOLSON, Vice President
JOHN W. NORTON, Vice President
DAVID A. PETERSON, Vice President
MICHAEL J. RADMER, Secretary
TAMARA L. FAGELY, Treasurer
DAVID G. CARROLL, 2nd Vice President
CHRIS J. NEUHARTH, 2nd Vice President
INVESTMENT MANAGER, REGISTRAR AND TRANSFER AGENT, Fortis Advisers, Inc., Box
64284, St. Paul, Minnesota 55164
PRINCIPAL UNDERWRITER, Fortis Investors, Inc., Box 64284, St. Paul, Minnesota
55164
CUSTODIAN, Norwest Bank, Minnesota, N.A., Minneapolis, Minnesota
GENERAL COUNSEL, Dorsey & Whitney, 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.
