<PAGE>
[FORTIS LOGO]
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Asset Allocation Portfolio
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Value Fund
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Growth & Income Fund
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Capital Fund
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Fiduciary Fund
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Growth Fund
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Capital Appreciation Portfolio
FORTIS STOCK FUNDS
Semi-Annual Report
February 29, 1996
[LOGO]
<PAGE>
CONTENTS
LETTER TO SHAREHOLDERS 2
SCHEDULE OF INVESTMENTS
FORTIS ASSET ALLOCATION PORTFOLIO 10
FORTIS VALUE FUND 15
FORTIS GROWTH AND INCOME FUND 17
FORTIS CAPITAL FUND 18
FORTIS FIDUCIARY FUND 20
FORTIS GROWTH FUND 22
FORTIS CAPITAL APPRECIATION PORTFOLIO 24
STATEMENTS OF ASSETS AND LIABILITIES 26
STATEMENTS OF OPERATIONS 28
STATEMENTS OF CHANGES IN NET ASSETS
FORTIS ASSET ALLOCATION PORTFOLIO 30
FORTIS VALUE FUND 31
FORTIS GROWTH AND INCOME FUND 32
FORTIS CAPITAL FUND 33
FORTIS FIDUCIARY FUND 34
FORTIS GROWTH FUND 35
FORTIS CAPITAL APPRECIATION PORTFOLIO 36
NOTES TO FINANCIAL STATEMENTS 37
BOARD OF DIRECTORS AND OFFICERS 45
TOLL-FREE PERSONAL ASSISTANCE
- Shareholder Services
- (800) 800-2638, Ext. 3012
- 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.
HIGHLIGHTS
FOR THE SIX-MONTH PERIOD ENDED FEBRUARY 29, 1996
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS H
-------- -------- -------- --------
<S> <C> <C> <C> <C>
FORTIS ASSET ALLOCATION PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period............................. $ 16.52 $ 16.46 $ 16.41 $ 16.44
End of period................................... $ 16.62 $ 16.55 $ 16.50 $ 16.54
TOTAL RETURN@ 4.21% 3.90% 3.92% 3.97%
DISTRIBUTIONS PER SHARE:
From net investment income...................... $ 0.250 $ 0.210 $ 0.210 $ 0.210
From net realized gains on investments.......... $ 0.324 $ 0.324 $ 0.324 $ 0.324
FORTIS VALUE FUND*
NET ASSET VALUE PER SHARE:
Beginning of period............................. $ 10.00 $ 10.00 $ 10.00 $ 10.00
End of period................................... $ 10.17 $ 10.15 $ 10.15 $ 10.16
TOTAL RETURN@ 1.70% 1.50% 1.50% 1.60%
DISTRIBUTIONS PER SHARE:.......................... -- -- -- --
FORTIS GROWTH AND INCOME FUND*
NET ASSET VALUE PER SHARE:
Beginning of period............................. $ 10.00 $ 10.00 $ 10.00 $ 10.00
End of period................................... $ 10.16 $ 10.14 $ 10.14 $ 10.15
TOTAL RETURN@ 1.60% 1.40% 1.40% 1.50%
DISTRIBUTIONS PER SHARE:.......................... -- -- -- --
FORTIS CAPITAL FUND
NET ASSET VALUE PER SHARE:
Beginning of period............................. $ 21.22 $ 21.14 $ 21.13 $ 21.14
End of period................................... $ 21.56 $ 21.45 $ 21.43 $ 21.44
TOTAL RETURN@ 1.80% 1.47% 1.42% 1.42%
DISTRIBUTIONS PER SHARE:
From net investment income...................... $ 0.042 -- -- --
FORTIS FIDUCIARY FUND
NET ASSET VALUE PER SHARE:
Beginning of period............................. $ 35.54 $ 35.35 $ 35.40 $ 35.35
End of period................................... $ 36.01 $ 35.68 $ 35.74 $ 35.69
TOTAL RETURN@ 2.09% 1.70% 1.73% 1.73%
DISTRIBUTIONS PER SHARE:
From net realized gains on investments.......... $ 0.255 $ 0.255 $ 0.255 $ 0.255
FORTIS GROWTH FUND
NET ASSET VALUE PER SHARE:
Beginning of period............................. $ 32.66 $ 32.48 $ 32.49 $ 32.49
End of period................................... $ 32.23 $ 31.95 $ 31.95 $ 31.95
TOTAL RETURN@ 4.38% 4.10% 4.06% 4.06%
DISTRIBUTIONS PER SHARE:
From net realized gains on investments.......... $ 1.706 $ 1.706 $ 1.706 $ 1.706
FORTIS CAPITAL APPRECIATION PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period............................. $ 30.67 $ 30.57 $ 30.58 $ 30.58
End of period................................... $ 32.47 $ 32.28 $ 32.29 $ 32.29
TOTAL RETURN@ 6.68% 6.41% 6.41% 6.41%
DISTRIBUTIONS PER SHARE:
From net realized gains on investments.......... 0.226 0.226 0.226 0.226
</TABLE>
* Period from January 2, 1996 (initial offering of shares) to February 29,
1996.
@ These are the fund's total returns during the period, including
reinvestment of all dividend and capital gains distributions, without
adjustments for sales charges.
<PAGE>
HOW TO USE THIS REPORT
For a quick overview of the fund's performance during the past six months, refer
to the Highlights box. 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 funds' 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.
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.
<TABLE>
<C> <S>
ASSET ALLOCATION PORTFOLIO
Photo Stocks, bonds and cash blended to smooth out the highs and lows.
VALUE FUND
Photo Quality stocks, inexpensively priced.
GROWTH & INCOME FUND
Photo Conservative growth with quarterly dividends.
CAPITAL FUND
Photo Long-term growth through larger, established companies.
FIDUCIARY FUND
Photo A medley of growth stocks.
GROWTH FUND
Photo Medium-sized companies poised to be tomorrow's leaders.
CAPITAL APPRECIATION PORTFOLIO
Photo Opportunity through America's entrepreneurs.
</TABLE>
1
<PAGE>
Photo
DEAR SHAREHOLDER,
We are pleased to present the semi-annual report for the Fortis Stock Funds,
which includes the Fortis Asset Allocation Portfolio, Fortis Value Fund, Fortis
Growth and Income Fund, Fortis Capital Fund, Fortis Fiduciary Fund, Fortis
Growth Fund and Fortis Capital Appreciation Portfolio, for the period ended
February 29, 1996.
MARKET REVIEW AND OUTLOOK
During the initial six months of fiscal 1996, financial markets benefited from a
moderately growing global economy, low inflation, favorable global liquidity and
a lower interest rate environment. This has been an ideal environment for equity
investors, especially considering the strong growth in corporate earnings over
the past several years. We anticipate that this positive environment will remain
in place for the foreseeable future, however, the financial markets are
beginning to anticipate stronger economic activity in the year ahead. This could
result in greater market fluctuations as both interest rates and equity
valuation levels adjust to any changes in the economic expectation. Longer term
the outlook for equity investors of companies in strong growth segments of the
economy remains favorable.
Although the general outlook for corporate earnings in 1996 has declined
substantially, the performance of the Standard and Poor's 500 Index (S&P 500)
has been quite impressive. A great deal of investor attention has been placed on
the larger capitalization stocks that make up indices such as the Dow Jones
Industrial Average and the S&P 500. These stocks have benefited by the trend
toward greater investor interest in index funds and by foreign investment in the
United States stock market. A correction in the equity markets would not be
unusual during the months ahead given the strong performance of the major
averages over the past several years.
Our outlook for the remainder of calendar 1996 is cautiously optimistic. Our
primary areas of concern are the slowing trend of corporate earnings and the
potential increase in interest rates later in the year. These two variables have
been key drivers of the recent bull market and must be closely monitored given
the current high level of the general equity markets. Financial markets may
experience a greater degree of price fluctuation; however, longer term the
outlook remains favorable, especially for companies with strong market positions
in growth segments of the world's economy.
The following pages take a closer look at each Fortis stock fund. As always, we
appreciate your investment with Fortis and thank you for your past support. If
you have any questions about the various funds, please consult your financial
professional or your Fortis shareholder representative.
Sincerely,
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
Dean C. Kopperud James S. Byrd
President Vice President
[SIGNATURE] [SIGNATURE]
Stephen M. Poling Howard G. Hudson
Vice President Vice President
</TABLE>
2
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/29/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Long-Term Debt Securities 52.7%
Equity Investments 45.0%
Cash Equivalents/Reveivables 2.3%
</TABLE>
TOP HOLDINGS AS OF 2/29/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Sterling Software, Inc. 1.8%
2. Green Tree Financial Corp. 1.7%
3. First Data Corp. 1.7%
4. 3Com Corp. 1.6%
5. WorldCom, Inc. 1.6%
<CAPTION>
Bonds
- -------------------------------------------------------------------
<C> <S> <C>
1. U.S. Treasury Bond (8.125%) 2021 5.0%
2. FNMA (7.00%) 2025 2.0%
3. FNMA (6.50%) 2010 1.9%
4. GNMA (9.00%) 2023 1.8%
5. FHLB Note (7.31%) 2004 1.8%
</TABLE>
PORTFOLIO CHANGES FOR THE SIX-MONTH PERIOD ENDED 2/29/96
STOCK ADDITIONS: STOCK ELIMINATIONS:
Adobe Systems, Inc. Applied Materials, Inc.
Bay Networks, Inc. First Financial Management
Boston Scientific Corp. Corp.
Oxford Health Plans, Inc. General Instrument Corp.
Price/Costco, Inc. News Corp., Ltd. ADR (The)
Solectron Corp. News Corp., Ltd. (The)
Tellabs, Inc. Preferred ADR
Nokia Corp. ADR
Sensormatic Electronics Corp.
Tandy Corp.
CLASS B, C AND H TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +18.95% +17.28%
Class B sharesDiamond Diamond +15.35% +13.68%
Class C sharesDiamond +18.94% +17.03%
Class C sharesDiamond Diamond +17.94% +16.03%
Class H sharesDiamond +19.05% +17.23%
Class H sharesDiamond Diamond +15.45% +13.63%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% (with a waiver of 10% of the amount invested) if redeemed
within two years of purchase, and Class C has a CDSC of 1.00% if redeemed within
one year of purchase.
Diamond Without CDSC.
Diamond With CDSC. Assumes redemption on February 29, 1996.
Diamond
+ Since November 14, 1994 -- Date shares were first offered to the public.
FORTIS ASSET ALLOCATION PORTFOLIO
The Asset Allocation Portfolio invests in equities, bonds and cash equivalents
in a proportion determined by Fortis fixed income and equity managers. The asset
mix at the closing of this reporting period was 55 percent bonds and 45 percent
equity investments. This ratio has changed marginally in recent months after a
strong performance in the equity market. A slow growth economy in the United
States led us to reduce our exposure to lower-rated corporate securities.
Recently, however, some signs of acceleration in economic activity has led us to
increase our holdings of asset-backed securities and to slightly reduce the
duration of the fixed income portion.
The portfolio's performance was impacted during the last six months by the
fluctuation of interest rates and the subsequent impact on the equity market.
The equity portion of the portfolio is well-positioned in solid growth-oriented
companies that have the potential to grow both revenues and earnings at a rate
that is substantially greater than the average in the stock market. Looking
forward, the primary uncertainties are the direction of long-term interest rates
and Federal Reserve policy. Our outlook for the remainder of 1996 is cautious,
however optimistic, as the strength of the economy remains moderate and
growth-oriented companies should continue to demonstrate strong relative
earnings gains. Overall, the portfolio's diverse investment approach should help
mitigate some of the risks of fluctuating financial markets.
VALUE OF $10,000 INVESTED JANUARY 4, 1988
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS ASSET ALLOCATION PORTFOLIO
AGGREGATE BOND INDEX# S&P 500## CLASS A
<S> <C> <C> <C>
1/4/88 10,000 10,000 9,525
88 10,474 10,917 9,697
89 10,864 12,214 10,010
90 12,249 14,514 11,533
91 13,746 16,641 12,898
92 15,506 19,298 15,378
93 17,395 21,341 16,451
94 18,333 23,122 18,454
95 18,676 24,829 18,865
96 20,961 33,446 22,577
</TABLE>
Annual period ended February 29
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1996, the portfolio had a sales charge
of 4.50%, and therefore, these figures do not represent actual performance
that would have been achieved by investing as described above.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
# An unmanaged index of government, corporate, and mortgage-backed securities
with an average maturity of approximately nine years.
## This is an unmanaged index of 500 common stocks.
@ Date shares were first offered to the public.
3
<PAGE>
COMPOSITION BY INDUSTRY
AS OF 2/29/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 45.1%
Cash Equivalents/Reveivables 13.2%
Retail-Miscellaneous 4.9%
Miscellaneous 4.6%
Banks 4.2%
Computer-Software 4.2%
Real Estate-Investment Trust 4.1%
Building Materials 4.0%
Retail-Department Stores 4.0%
Aerospace and Equipment 3.9%
Drugs 3.9%
Oil-Crude Petroleum and Gas 3.9%
</TABLE>
TOP TEN HOLDINGS AS OF 2/29/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. AT & T Corp. 2.7%
2. Xerox Corp. 2.6%
3. General Electric Co. 2.5%
4. Atlantic Richfield $2.25 Preferred Exchangeable
Notes 2.4%
5. Federated Department Stores, Inc. 2.3%
6. Citicorp 2.3%
7. Union Texas Petroleum Holdings, Inc. 2.3%
8. Federal Express Corp. 2.3%
9. Procter & Gamble Co. 2.2%
10. Cooper Industries, Inc. 2.2%
</TABLE>
CLASS B, C AND H TOTAL RETURNS
<TABLE>
<CAPTION>
Since
Inception+
- --------------------------------------------------
<S> <C>
Class B sharesDiamond +1.50%
Class B sharesDiamond Diamond -2.10%
Class C sharesDiamond +1.50%
Class C sharesDiamond Diamond +0.50%
Class H sharesDiamond +1.60%
Class H sharesDiamond Diamond -2.00%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% (with a waiver of 10% of the amount invested) if redeemed
within two years of purchase, and Class C has a CDSC of 1.00% if redeemed within
one year of purchase.
Diamond Without CDSC.
Diamond With CDSC. Assumes redemption on February 29, 1996.
Diamond
+ Shares were first offered to the public January 2, 1996.
FORTIS VALUE FUND
The Value Fund was added to the Fortis family of funds in January 1996. The fund
focuses on under-valued, medium to large-sized companies with accelerating
earnings growth or companies that are cheaply priced in relation to sustainable
growth rates. Current income is a secondary consideration. The goal is to
provide a total return that is competitive with the general stock market over
the long term.
The portfolio is well diversified across a variety of sectors, including energy,
healthcare, financial services, transportation, utilities, and consumer products
and services. The volatility of the portfolio should be below average by virtue
of its diversification and investment style.
VALUE OF $10,000 INVESTED JANUARY 2, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FORTIS VALUE FUND
S&P 500*** CLASS A
<S> <C> <C>
1/2/96 10,000 9,525
96 10,442 9,687
</TABLE>
Annual period ended February 29
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** An unmanaged index of 500 common stocks.
@ Date shares were first offered to the public.
4
<PAGE>
COMPOSITION BY INDUSTRY
AS OF 2/29/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash Equivalents/Receivables 41.4%
Other 16.6%
Utilities-Telephone 8.2%
Finance Companies 6.4%
Drugs 6.2%
Natural Gas Transmissions 3.4%
Publishing 3.2%
Machinery-Oil and Well 3.0%
Medical Supplies 3.0%
Miscellaneous 2.9%
Telecommunications 2.9%
Oil-Crude Petroleum and Gas 2.8%
</TABLE>
TOP TEN HOLDINGS AS OF 2/29/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Student Loan Marketing Association 2.1%
2. Lilly Eli & Co., Inc. 1.9%
3. Intimate Brands, Inc. 1.9%
4. United Technologies Corp. 1.8%
5. Telecom Corp. of New Zealand Ltd. ADR 1.8%
6. Sears Roebuck & Co. 1.8%
7. Snap-On, Inc. 1.8%
8. Beneficial Corp. 1.8%
9. El Paso Natural Gas Co. 1.7%
10. Household International, Inc. 1.7%
</TABLE>
CLASS B, C AND H TOTAL RETURNS
<TABLE>
<CAPTION>
Since
Inception+
- --------------------------------------------------
<S> <C>
Class B sharesDiamond +1.40%
Class B sharesDiamond Diamond -2.20%
Class C sharesDiamond +1.40%
Class C sharesDiamond Diamond +0.40%
Class H sharesDiamond +1.50%
Class H sharesDiamond Diamond -2.10%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% (with a waiver of 10% of the amount invested) if redeemed
within two years of purchase, and Class C has a CDSC of 1.00% if redeemed within
one year of purchase.
Diamond Without CDSC.
Diamond With CDSC. Assumes redemption on February 29, 1996.
Diamond
+ Shares were first offered to the public January 2, 1996.
FORTIS GROWTH & INCOME FUND
The Growth & Income Fund joined the Fortis family of funds at the beginning of
1996. The fund focuses on dividend-paying companies with solid earnings growth
potential. We invest in companies that we believe can grow their dividend stream
over the longer term, yet provide shareholders with a reasonable current yield
relative to the Standard & Poor's 500 Stock Index. The goal is to provide a
total return that will be competitive with the general stock market over the
longer term.
The portfolio is well diversified with exposure to a number of economic sectors,
including financial services, energy, healthcare, telephone utilities and
consumer products and services. The volatility of the portfolio should be below
average because of its diversification across a wide variety of large, more
mature, dividend-paying companies.
VALUE OF $10,000 INVESTED JANUARY 2, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FORTIS GROWTH & INCOME FUND
S&P 500*** CLASS A
<S> <C> <C>
1/2/96 10,000 9,525
96 10,442 9,677
</TABLE>
Annual period ended February 29
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** An unmanaged index of 500 common stocks.
@ Date shares were first offered to the public.
5
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/29/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash Equivalents/Receivables 18.6%
Other 18.2%
Computer-Software 9.6%
Telecommunications 9.5%
Health Care Services 9.4%
Retail-Miscellaneous 9.3%
Business Services and Supplies 6.0%
Finance Companies 5.6%
Toys 4.9%
Office Equipment and Supplies 3.0%
Retail-Department Stores 3.0%
Telephone Services 2.9%
</TABLE>
TOP TEN HOLDINGS AS OF 2/29/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Mattel, Inc. 4.9%
2. Oracle Corp. 3.7%
3. First Data Corp. 3.6%
4. Cisco Systems, Inc. 3.1%
5. Silicon Graphics, Inc. 3.0%
6. WorldCom, Inc. 2.9%
7. Microsoft Corp. 2.9%
8. Federal National Mortgage Association 2.8%
9. Medtronic, Inc. (and Rights) 2.8%
10. Green Tree Financial Corp. 2.8%
</TABLE>
PORTFOLIO CHANGES FOR THE SIX-MONTH PERIOD ENDED 2/29/96
ADDITIONS: ELIMINATIONS:
Adobe Systems, Inc. Applied Materials, Inc.
Bay Networks, Inc. First Financial Management
Boston Scientific Corp. Corp.
Oxford Health Plans, Inc. General Instrument Corp.
Nokia Corp. ADR
Sensormatic Electronics Corp.
Tandy Corp.
Vodafone Group plc ADR
FORTIS CAPITAL FUND
The Capital Fund consists of large-sized companies that are growing their
revenues and earnings at rates in excess of the corporate average. The fund's
performance has been affected by the fluctuation of growth stocks, with the
technology sector experiencing greater than normal volatility. Longer term,
technology related will continue to gain market share of the world's economy and
the Capital Fund will have a substantial exposure in this area. Overall the
Capital Fund is well diversified among various growth sectors of the economy,
including communication, retailing, business services, healthcare services and
finance.
As always there are uncertainties with the outlook. At present, the main
variables to watch closely are the strength of the overall economy and its
impact on interest rates. A stronger than expected economic outlook could focus
investors' attention away from growth-oriented companies and could also result
in rising levels of interest rates that would impact growth stock valuations.
Our outlook is for a moderately growing economy and a continuation of investor
focus on companies that can deliver strong relative earnings growth over the
longer term. The Capital Fund is well-positioned in these types of companies,
which appear attractive especially if corporate earnings growth slows in 1996.
VALUE OF $10,000 INVESTED SEPTEMBER 1, 1970
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** CAPITAL FUND CLASS A
<S> <C> <C>
9/1/70 10,000 9,525
71 11,215 10,135
72 12,379 12,351
73 13,733 12,645
74 12,237 10,797
75 10,880 9,754
76 13,839 11,735
77 14,418 11,739
78 13,218 10,897
79 15,415 13,198
80 19,190 18,954
81 23,306 26,240
82 21,191 26,828
83 29,266 40,291
84 32,451 41,993
85 39,173 48,917
86 51,262 66,582
87 66,367 87,190
88 64,550 77,709
89 72,216 82,032
90 85,816 99,271
91 98,396 114,297
92 114,106 145,748
93 126,187 147,106
94 136,713 163,653
95 146,808 170,397
96 197,759 210,203
</TABLE>
Annual period ended February 29
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1990, the portfolio had a sales charge
of 8.50%, and therefore, these figures do not represent actual performance
that would have been achieved by investing as described above.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** This is an unmanaged index of 500 common stocks.
CLASS B, C AND H TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +22.47% +16.47%
Class B sharesDiamond Diamond +18.87% +12.87%
Class C sharesDiamond +22.42% +16.39%
Class C sharesDiamond Diamond +21.42% +15.39%
Class H sharesDiamond +22.48% +16.43%
Class H sharesDiamond Diamond +18.88% +12.83%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% (with a waiver of 10% of the amount
invested) if redeemed within two years of purchase, and Class C has a CDSC of
1.00% if redeemed within one year of purchase.
Diamond Without CDSC.
Diamond With CDSC. Assumes redemption on February 29, 1996.
Diamond
+ Since November 14, 1994 -- Date shares were first offered to the public.
6
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/29/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash Equivalents/Receivables 22.5%
Other 17.9%
Computer-Software 11.0%
Telecommunications 8.4%
Retail-Miscellaneous 7.6%
Health Care Services 7.0%
Office Equipment and Supplies 6.5%
Business Services and Supplies 5.1%
Finance Companies 4.8%
Toys 4.1%
Telephone Services 2.7%
Retail-Department Stores 2.4%
</TABLE>
TOP TEN HOLDINGS AS OF 2/29/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Mattel, Inc. 4.1%
2. Oracle Corp. 3.6%
3. Sterling Software, Inc. 3.2%
4. First Data Corp. 3.0%
5. Cisco Systems, Inc. 2.8%
6. Microsoft Corp. 2.7%
7. WorldCom, Inc. 2.7%
8. Federal National Mortgage Association 2.6%
9. Silicon Graphics, Inc. 2.3%
10. Green Tree Financial Corp. 2.2%
</TABLE>
PORTFOLIO CHANGES FOR THE SIX-MONTH PERIOD ENDED 2/29/96
ADDITIONS: ELIMINATIONS:
Adobe Systems, Inc. Applied Materials, Inc.
Bay Networks, Inc. EMC Corp.
Boston Chicken, Inc. First Financial Management
Boston Scientific Corp. Corp.
LSI Logic Corp. General Instrument Corp.
Oxford Health Plans, Inc. Nokia Corp. ADR
Sensormatic Electronics Corp.
Tandy Corp.
FORTIS FIDUCIARY FUND
The Fiduciary Fund invests in medium and larger-sized growth companies. It
represents a mix of the larger holdings of the Fortis Capital Fund and the
medium-sized companies in the Fortis Growth Fund. Performance during this
reporting period was influenced by the fluctuation of growth stocks and concerns
about the technology sector. This fund is well diversified in areas outside of
technology and, over the longer term, should perform well as the relative
earnings growth of its portfolio holdings remains strong. Looking forward, the
main uncertainties remain the level of interest rates and the impact of economic
changes on valuation for equity holdings. We continue to feel that the moderate
economic activity that has been experienced in recent years will persist and
that growth stocks will continue to remain an important area for investors. This
fund is well represented in growth-oriented investments and should benefit from
these trends.
VALUE OF $10,000 INVESTED JANUARY 2, 1982
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** FIDUCIARY FUND
CLASS A
<S> <C> <C>
1/2/82 10,000 9,525
82 9,333 9,572
83 12,890 13,954
84 14,293 14,725
85 17,254 17,480
86 22,578 25,317
87 29,231 33,400
88 28,431 28,197
89 31,807 29,962
90 39,797 36,405
91 43,338 42,044
92 50,257 54,891
93 55,579 54,867
94 60,214 61,911
95 64,661 64,290
96 87,102 79,582
</TABLE>
Annual period ended February 29
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to March 1, 1992, the portfolio had a sales charge
of 4.50%, and therefore, these figures do not represent actual performance
that would have been achieved by investing as described above.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** This is an unmanaged index of 500 common stocks.
CLASS B, C AND H TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +22.87% +17.86%
Class B sharesDiamond Diamond +19.27% +14.26%
Class C sharesDiamond +22.99% +18.00%
Class C sharesDiamond Diamond +21.99% +17.00%
Class H sharesDiamond +22.86% +17.88%
Class H sharesDiamond Diamond +19.26% +14.28%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% (with a waiver of 10% of the amount invested) if redeemed
within two years of purchase, and Class C has a CDSC of 1.00% if redeemed within
one year of purchase.
Diamond Without CDSC.
Diamond With CDSC. Assumes redemption on February 29, 1996.
Diamond
+ Since November 14, 1994 -- Date shares were first offered to the public.
7
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/29/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash Equivalents/Receivables 20.0%
Computer-Software 17.8%
Telecommunications 13.2%
Other 12.6%
Retail-Miscellaneous 8.5%
Health Care Services 7.6%
Restaurants and Franchising 4.4%
Electronic-Communication Security 4.1%
Telephone Services 4.1%
Finance Companies 3.3%
Electronic-Controls and Equipment 2.3%
Miscellaneous 2.1%
</TABLE>
TOP TEN HOLDINGS AS OF 2/29/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Cisco Systems, Inc. 4.1%
2. Informix Corp. 3.8%
3. 3Com Corp. 3.7%
4. Oracle Corp. 3.6%
5. Tellabs, Inc. 3.1%
6. Microsoft Corp. 2.9%
7. WorldCom, Inc. 2.5%
8. Parametric Technology Corp. 2.3%
9. Solectron Corp. 2.3%
10. BMC Software, Inc. 2.2%
</TABLE>
PORTFOLIO CHANGES FOR THE SIX-MONTH PERIOD ENDED 2/29/96
ADDITIONS: ELIMINATIONS:
Andrew Corp. American Power Conversion
Ascend Communications, Inc. Corp.
Bay Networks, Inc. Applied Materials, Inc.
Boston Chicken, Inc. Cypress Semiconductor Corp.
First Data Corp. EMC Corp.
FORE Systems, Inc. First Financial Management
General Nutrition Companies, Corp.
Inc. Forest Laboratories, Inc.
Genzyme Corp. Lam Research Corp.
Input/Output, Inc. Micron Technology, Inc.
LSI Logic Corp. Nokia Corp. ADR
PhyCor, Inc. Sensormatic Electronics Corp.
Starbucks Corp.
Sunglass Hut International,
Inc.
CLASS B, C AND H TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +31.00% +24.18%
Class B sharesDiamond Diamond +27.40% +20.58%
Class C sharesDiamond +31.05% +24.18%
Class C sharesDiamond Diamond +30.05% +23.18%
Class H sharesDiamond +30.99% +24.18%
Class H sharesDiamond Diamond +27.39% +20.58%
</TABLE>
Past performance is not indicative of future
performance. Total returns include reinvestment of all dividend and capital
gains distributions. The performance of the separate classes (A, B, C, and H)
will vary based on the differences in sales loads and distribution fees paid by
shareholders investing in the different classes. Class A has a maximum sales
charge of 4.75%, Class B and H have a CDSC of 4.00% (with a waiver of 10% of the
amount
invested) if redeemed within two years of purchase, and Class C has a CDSC of
1.00% if redeemed within one year of purchase.
Diamond Without CDSC.
Diamond With CDSC. Assumes redemption on February 29, 1996.
Diamond
+ Since November 14, 1994 -- Date shares were first offered to the public.
FORTIS GROWTH FUND
Performance by the Fortis Growth Fund during the reporting period was impacted
by wide swings in the prices for many growth-oriented companies. Because of the
strong earnings growth they've offered, technology-related investments have
become a substantial and growing portion of many growth-oriented mutual fund
portfolios over the past several years. This has occurred because the products
and services provided by leading technology companies can significantly increase
the productivity of the corporate sector. Companies worldwide have increased
their budgets for technological enhancements to improve their competitive cost
positions.
The Fortis Growth Fund in recent years has focused a good deal of its attention
on companies related to these significant and powerful trends. Our focus has
been on companies with proprietary software-based technology which is difficult
to duplicate. Looking forward, we expect that technology investments will
continue to play an important role in our growth strategy.
The Growth Fund focuses on medium-sized revenue companies that have well above
average growth potential for both revenues and earnings. The growth areas of the
portfolio outside of technology include healthcare-related companies, financial
services companies and consumer-related companies with dominant market shares.
Over the past several years, it has become more of a challenge to find companies
that can sustain extraordinary growth rates in their revenues. This is due to a
lower inflationary environment and a lack of pricing power in many industries.
Looking forward, we anticipate that we will further diversify the portfolio into
areas outside technology. We have recently reduced our holdings in
technology-related investments and will allocate the proceeds when favorable
market opportunities are present. We feel that companies with extraordinary
growth prospects should prosper in the years ahead, especially during the
periods of sluggish corporate earnings growth anticipated in the near future.
The primary risks with our high growth focus would be a general correction in
financial markets and an increasing interest rate environment. We do not expect
a long lasting correction as long as inflation remains under control.
VALUE OF $10,000 INVESTED MARCH 31, 1963
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** GROWTH FUND CLASS A
<S> <C> <C>
4/63 10,000 9,525
64 12,048 10,615
65 13,957 12,687
66 15,019 16,579
67 14,794 17,966
68 15,726 22,174
69 17,810 25,379
70 16,793 22,538
71 18,832 22,998
72 21,392 29,659
73 23,062 26,606
74 20,550 22,328
75 18,270 20,843
76 23,239 27,002
77 24,211 26,862
78 22,196 28,003
79 25,886 38,280
80 32,225 58,858
81 39,136 80,521
82 35,585 85,299
83 49,146 131,529
84 54,494 131,701
85 65,783 150,872
86 86,083 203,675
87 111,448 279,484
88 108,397 229,408
89 121,271 253,411
90 144,108 311,839
91 165,234 380,050
92 191,614 524,960
93 211,903 502,738
94 229,578 608,458
95 246,531 548,375
96 332,091 722,953
</TABLE>
Annual period ended February 29
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1990, the portfolio had a sales charge
of 8.50%, and therefore, these figures do not represent actual performance
that would have been achieved by investing as described above.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** This is an unmanaged index of 500 common stocks.
8
<PAGE>
COMPOSITION BY INDUSTRY
AS OF 2/29/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Computer-Software 20.1%
Other 16.2%
Cash Equivalents/Receivables 13.4%
Retail-Miscellaneous 12.0%
Health Care Services 8.2%
Restaurants and Franchising 6.9%
Business Services and Supplies 4.8%
Telecommunications 4.6%
Electronic-Semiconductor and Capacitor 4.1%
Utilities-Telephone 3.7%
Electronics-Controls and Equipment 3.1%
Office Equipment and Supplies 2.9%
</TABLE>
TOP TEN HOLDINGS AS OF 2/29/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Input/Output, Inc. 5.2%
2. Cisco Systems, Inc. 3.2%
3. Informix Corp. 3.2%
4. Acxiom Corp. 2.7%
5. Xilinx, Inc. 2.7%
6. StrataCom, Inc. 2.3%
7. Lone Star Steakhouse & Saloon, Inc. 2.3%
8. LCI International, Inc. 2.2%
9. America Online, Inc. 2.1%
10. APAC TeleServices, Inc. 2.1%
</TABLE>
PORTFOLIO CHANGES FOR THE SIX-MONTH PERIOD ENDED 2/29/96
ADDITIONS: ELIMINATIONS:
APAC TeleServices, Inc. Alliance Semiconductor Corp.
Boston Chicken, Inc. American Freightways Corp.
Cascade Communications Corp. Avid Technology, Inc.
CKS Group, Inc. Benchmark Electronics, Inc.
Cybercash, Inc. Callaway Golf Co.
Davidson and Associates, Inc. FSI International, Inc.
Gadzooks, Inc. Hollywood Entertainment Corp.
Indexx Laboratories, Inc. Indigo NV
Intermedia Communications of Integrated Device Technology,
Florida Inc.
Isolyser Co., Inc. Integrated Silicon Solutions,
Mecon, Inc. Inc.
MedPartners/Mullikin, Inc. Landmark Graphics Corp.
Mossimo, Inc. Medpartners, Inc.
Myriad Genetics, Inc. Paradigm Technology, Inc.
Netscape Communications Corp. System Software Associates,
Pharmaceutical Products Inc.
Development, Inc.
Quarterdeck Corp.
Scopus Technology, Inc.
Shiva Corp.
Spyglass, Inc.
FORTIS CAPITAL APPRECIATION PORTFOLIO
The Capital Appreciation Portfolio is an aggressive growth fund that focuses on
smaller-size companies that have superior expected growth rates in both revenues
and earnings. These companies tend to be innovators in their respective
industries and have the potential to develop into tomorrow's growth leaders. The
fund's performance was influenced by the wide fluctuation in share price levels
for aggressive growth companies, especially those in technology-related areas.
The fund is well diversified outside of technology with significant exposure to
areas such as business services, specialty retailing, restaurants, healthcare
services and telecommunication.
Investing in emerging growth companies can prove rewarding in a favorable market
environment such as calendar 1995. Companies with superior growth rates tend to
have higher valuation levels and at times experience a degree of volatility. The
primary uncertainties going forward will be the direction and level of interest
rates and their impact on the equity market. Longer term, however, patient
investors can be rewarded by taking the additional risk of investing in the
premier growth companies of the future, which the Capital Appreciation Portfolio
focuses on. For 1996, we remain cautiously optimistic on the prospects for
companies that are demonstrating relatively strong earnings gains in a sluggish
corporate earnings environment. The portfolio is well positioned in that regard,
allowing investors to participate in the most rapidly growing segments of the
economy.
VALUE OF $10,000 INVESTED JANUARY 4, 1988
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** CAPITAL APPRECIATION
PORTFOLIO CLASS A
<S> <C> <C>
1/4/88 10,000 9,525
88 10,917 9,792
89 12,214 11,227
90 14,514 14,481
91 16,641 15,714
92 19,298 21,908
93 21,341 21,352
94 23,122 26,857
95 24,829 25,782
96 33,446 35,519
</TABLE>
Annual period ended February 29
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1996, the portfolio had a sales charge
of 4.50%, and therefore, these figures do not represent actual performance
that would have been achieved by investing as described above.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** This is an unmanaged index of 500 common stocks.
@ Date shares were first offered to the public.
CLASS B, C AND H TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +37.14% +32.12%
Class B sharesDiamond Diamond +33.54% +28.52%
Class C sharesDiamond +37.12% +32.15%
Class C sharesDiamond Diamond +36.12% +31.15%
Class H sharesDiamond +37.12% +32.15%
Class H sharesDiamond Diamond +33.52% +28.55%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% (with a waiver of 10% of the amount
invested) if redeemed within two years of purchase, and Class C has a CDSC of
1.00% if redeemed within one year of purchase.
Diamond Without CDSC.
Diamond With CDSC. Assumes redemption on February 29, 1996.
Diamond
+ Since November 14, 1994 -- Date shares were first offered to the public.
9
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO
Schedule of Investments
February 29, 1996 (Unaudited)
COMMON STOCKS-45.01%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost(b) Value(c)
-------- ------------ -------------
<C> <S> <C> <C>
BUSINESS SERVICES AND SUPPLIES-3.03%
36,567 First Data Corp.............................. $ 1,473,359 $ 2,532,265
72,000 MBNA Corp.................................... 1,033,494 2,034,000
------------ -------------
2,506,853 4,566,265
------------ -------------
COMPUTER-HARDWARE-0.94%
33,000 Ceridian Corp. (a)(g)........................ 1,469,883 1,419,000
------------ -------------
COMPUTER-SOFTWARE-4.51%
22,000 Adobe Systems, Inc. (g)...................... 1,518,878 737,000
27,000 Computer Associates International, Inc....... 976,006 1,856,250
20,100 Microsoft Corp. (a).......................... 856,421 1,983,619
42,400 Oracle Corp. (a)(g).......................... 311,130 2,204,800
------------ -------------
3,662,435 6,781,669
------------ -------------
ELECTRONIC-COMMUNICATION SECURITY-0.81%
30,000 Bay Networks, Inc. (a)(g).................... 1,256,625 1,218,750
------------ -------------
ELECTRONIC-CONTROLS AND EQUIPMENT-0.71%
22,000 Solectron Corp. (a).......................... 839,200 1,067,000
------------ -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-0.55%
14,000 Intel Corp................................... 266,798 823,375
------------ -------------
FINANCE COMPANIES-3.79%
54,000 Federal National Mortgage Association........ 1,203,290 1,707,750
24,100 Franklin Resources, Inc...................... 283,777 1,388,762
82,384 Green Tree Financial Corp.................... 1,036,226 2,605,394
------------ -------------
2,523,293 5,701,906
------------ -------------
HEALTH CARE SERVICES-5.28%
33,000 Columbia/HCA Healthcare Corp. (g)............ 1,352,592 1,806,750
21,000 Oxford Health Plans, Inc. (a)(g)............. 1,543,156 1,728,562
12,500 PacifiCare Health Systems, Inc. Class B
(a)(g)..................................... 594,808 1,175,000
35,500 U.S. HealthCare, Inc......................... 1,074,317 1,730,625
23,100 United Healthcare Corp....................... 906,389 1,507,275
------------ -------------
5,471,262 7,948,212
------------ -------------
HOTEL AND MOTEL-1.53%
49,500 Mirage Resorts, Inc. (a)..................... 1,115,820 2,295,562
------------ -------------
LEISURE TIME-AMUSEMENTS-0.72%
16,500 Disney (Walt) Co. (g)........................ 910,134 1,080,750
------------ -------------
MEDICAL SUPPLIES-1.11%
29,000 Medtronic, Inc. (and rights)................. 569,383 1,663,875
------------ -------------
<CAPTION>
Market
Shares Cost(b) Value(c)
-------- ------------ -------------
<C> <S> <C> <C>
MEDICAL TECHNOLOGY-1.03%
32,300 Boston Scientific Corp. (a).................. $ 1,319,049 $ 1,550,400
------------ -------------
MISCELLANEOUS-1.34%
62,250 CUC International, Inc. (a).................. 1,019,365 2,015,344
------------ -------------
OFFICE EQUIPMENT AND SUPPLIES-2.54%
46,000 Silicon Graphics, Inc. (a)................... 591,093 1,150,000
40,000 Sterling Software, Inc. (a).................. 772,400 2,665,000
------------ -------------
1,363,493 3,815,000
------------ -------------
PUBLISHING-0.73%
15,700 Scholastic Corp. (a)......................... 810,604 1,095,075
------------ -------------
RETAIL-DEPARTMENT STORES-1.63%
24,500 Kohl's Corp. (a)............................. 957,074 1,515,937
44,000 Wal-Mart Stores, Inc. (g).................... 991,910 935,000
------------ -------------
1,948,984 2,450,937
------------ -------------
RETAIL-MISCELLANEOUS-4.33%
40,800 AutoZone, Inc. (a)(g)........................ 783,087 1,050,600
19,200 Home Depot, Inc.............................. 222,400 830,400
39,000 Lowe's Companies, Inc. (g)................... 791,743 1,209,000
50,700 Office Depot, Inc. (a)(g).................... 477,429 1,058,362
27,400 Pep Boys Manny-Moe & Jack.................... 608,270 822,000
80,000 Price/Costco, Inc. (a)....................... 1,190,000 1,380,000
5,300 Talbots, Inc................................. 106,104 160,325
------------ -------------
4,179,033 6,510,687
------------ -------------
TELECOMMUNICATIONS-6.51%
49,300 3Com Corp. (a)(g)............................ 388,592 2,409,538
49,700 Cisco Systems, Inc. (a)...................... 619,684 2,360,750
94,400 Ericsson (L.M.) Telephone Co. Class B ADR
(g)........................................ 1,146,993 2,065,000
24,000 Motorola, Inc................................ 578,050 1,302,000
35,000 Tellabs, Inc. (a)............................ 1,416,900 1,653,750
------------ -------------
4,150,219 9,791,038
------------ -------------
TELEPHONE SERVICES-1.58%
60,508 WorldCom, Inc. (a)(g)........................ 657,407 2,382,503
------------ -------------
TOYS-1.39%
62,791 Mattel, Inc.................................. 694,622 2,087,801
------------ -------------
UTILITIES-TELEPHONE-0.97%
47,000 AirTouch Communications, Inc. (a)............ 1,186,660 1,457,000
------------ -------------
TOTAL COMMON STOCKS.......................... $ 37,921,122 $ 67,722,149
------------ -------------
------------ -------------
</TABLE>
ASSET BACKED SECURITIES-9.01%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost(b) Value(c)
----------- ------------- ------------ -------------
<C> <S> <C> <C> <C>
COMMERCIAL LOANS-3.28%
$ 599,174 J.P. Morgan Commercial Mtg., 6.47% 1996-C2
Class A 10-25-2006......................... N/A $ 603,499 $ 589,857
1,361,954 Merrill Lynch Mortgage Investors, Inc.,
7.2903% Variable Rate Ser 1995-C2 Cl A1
6-15-2021.................................. Aaa* 1,382,286 1,387,704
944,934 Resolution Trust Corp., 7.15% Mtg Pass Thru
Certificate Ser 1995-2 Cl M1 5-25-2029..... N/A 942,464 944,786
1,000,000 Resolution Trust Corp., 7.45% Mtg Pass Thru
Certificate Ser 1994-C1 Cl A2C 6-25-2026... AAA 1,026,849 1,012,656
1,000,000 Resolution Trust Corp., 7.45% Mtg Pass Thru
Certificate Ser 1995-2 Cl A1C 5-25-2029.... AAA 994,789 993,281
------------ -------------
4,949,887 4,928,284
------------ -------------
MANUFACTURED HOMES-3.37%
1,500,000 Green Tree Financial Corp., 7.65% Sr Sub Pass
Thru Certificate Ser 1994-1 Cl A5
4-15-2019.................................. Aa2* 1,494,141 1,532,342
1,000,000 Green Tree Financial Corp., 8.35% Sr Sub Pass
Thru Certificate Ser 1994-7 Cl A4
3-15-2020.................................. Aaa* 998,750 1,082,049
</TABLE>
10
<PAGE>
ASSET BACKED SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost(b) Value(c)
----------- ------------- ------------ -------------
<C> <S> <C> <C> <C>
$2,500,000 Oakwood Mortgage Investors, Inc., 7.10% Ser
1995-A Cl A3 9-15-2020..................... AAA $ 2,497,656 $ 2,459,875
------------ -------------
4,990,547 5,074,266
------------ -------------
MISCELLANEOUS-0.80%
1,193,313 Vanderbilt Mortgage & Finance, Inc., 7.00%
Mfg Housing Contract Ser 1994-A Cl A1
7-10-2019.................................. AA 1,192,567 1,207,870
------------ -------------
MULTI-FAMILY LOANS-1.56%
1,000,000 DLJ Mortgage Acceptance Corp., 8.80%
Multifamily Mortgage Pass Thru Certificate
Ser 1993-12 C1 B1 9-18-2003................ NR* 982,500 1,038,051
1,300,000 Paine Webber Mortgage Acceptance Corp. IV,
6.70% Ser 1995-M1 1-15-2007 (f)............ AAA 1,300,790 1,308,734
------------ -------------
2,283,290 2,346,785
------------ -------------
TOTAL ASSET BACKED SECURITIES................ $13,416,291 $ 13,557,205
------------ -------------
------------ -------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-11.27%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost(b) Value(c)
----------- ------------- ------------ -------------
<C> <S> <C> <C> <C>
BANKS-2.35%
$1,000,000 Advanta National Bank, 6.45% Note
10-30-2000................................. BBB $ 998,815 $ 997,909
2,500,000 Capital One Bank, 6.83% Med Term Note
8-16-1999.................................. Baa3 2,500,000 2,539,022
------------ -------------
3,498,815 3,536,931
------------ -------------
BROKERAGE AND INVESTMENT-0.96%
1,000,000 Donalson Lufkin Jenrette, 5.625% 2-15-2016... A- 998,062 965,693
500,000 Salomon, Inc., 6.75% Sr Notes 2-15-2003...... BBB 498,993 481,353
------------ -------------
1,497,055 1,447,046
------------ -------------
CHEMICALS-0.51%
750,000 Methanex Corp., 7.40% Note 8-15-2002......... BBB+ 746,660 763,556
------------ -------------
COMMERICAL LOANS-0.66%
988,564 Merrill Lynch Mortgage Investors, Inc.,
6.7889% Variable Rate Ser 1995-C3 Cl A1
6-25-2015.................................. AAA 998,159 991,808
------------ -------------
FOREIGN-GOVERNMENT AGENCIES-1.46%
2,000,000 Hydro-Quebec, 8.05% 7-7-2024................. A+ 2,198,498 2,196,798
------------ -------------
FOREST PRODUCTS-0.43%
600,000 Georgia-Pacific Corp., 9.625% Deb
3-15-2022.................................. BBB- 616,932 647,274
------------ -------------
HOTEL AND MOTEL-0.70%
1,000,000 Renaissance Hotel Group Finance Corp., 8.875%
10-1-2005.................................. BBB 999,052 1,060,000
------------ -------------
MANUFACTURED HOMES-0.65%
1,000,000 Structured Asset Securities Corp., 5.944% Ser
96-CFL Cl A1C 2-25-2028.................... N/A 1,000,020 983,125
------------ -------------
MEDIA-0.83%
600,000 News America Holdings, Inc., 10.125% Sr Note
10-15-2012................................. BBB 600,000 705,136
500,000 News America Holdings, Inc., 8.875% Sr Note
4-26-2023.................................. BBB 495,876 549,164
------------ -------------
1,095,876 1,254,300
------------ -------------
MISCELLANEOUS-0.38%
500,000 New York (City of), 10.00% General Obligation
Taxable Bond Fiscal 1991 Ser D 8-1-2005.... BBB+ 472,448 573,294
------------ -------------
SUPRANATIONAL-0.65%
1,000,000 Corp Andina De Formento, 7.10% Yankee Bond
2-1-2003................................... BBB 999,346 980,743
------------ -------------
WASTE DISPOSAL-1.67%
2,500,000 Browning-Ferris, 7.40% Secured Note
9-15-2035.................................. A2 2,486,782 2,516,580
------------ -------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE..... 16,609,643 16,951,455
------------ -------------
TOTAL ASSET BACKED & INVESTMENT GRADE CORP.
DEBT SECURITIES............................ $30,025,934 $ 30,508,660
------------ -------------
------------ -------------
</TABLE>
11
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 29, 1996 (Unaudited)
CORPORATE BONDS-NON-INVESTMENT GRADE-9.41%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost(b) Value(c)
--------- ------------- ------------ -------------
<C> <S> <C> <C> <C>
BROADCASTING-0.34%
$500,000 Sinclair Broadcasting, Inc., 10.00% Sr Sub
Note 9-30-2005............................. B+ $ 500,000 $ 510,000
------------ -------------
CABLE TELEVISION-2.06%
500,000 Century Communications, Inc., 9.50% Sr Note
3-1-2005................................... BB- 521,250 516,250
500,000 Comcast Corp., 9.125% Sr Sub Note
10-15-2006................................. B+ 516,701 516,250
500,000 Continental Cablevision, Inc., 8.30% Sr Deb
5-15-2006 (f).............................. BB+ 504,346 540,000
587,121 Falcon Holding Group, L.P., 11.00% Sr Sub
Note Ser B 9-15-2003 (Interest is
Payable-in-Kind)........................... NR 479,606 563,154
750,000 Telewest plc, 0/11.00% Sr Disc Deb 10-1-2007
(Zero coupon until 10-1-2000) (e).......... BB 460,592 457,500
500,000 Telewest plc, 9.625% Sr Deb 10-1-2006........ BB 501,502 510,000
------------ -------------
2,983,997 3,103,154
------------ -------------
CHEMICALS-1.18%
500,000 Arcadian Partners L.P., 10.75% Sr Note Ser B
5-1-2005................................... BB- 493,649 551,250
250,000 Indspec Chemical Corp., 11.50% Sr Sub Disc
Note Ser B 12-1-2003 (Zero coupon until
12-1-1998) (e)............................. B- 166,478 216,875
500,000 Lyondell Petrochemical, 6.50% 2-15-2006...... BBB 498,812 480,540
500,000 NL Industries, Inc., 11.75% Sr Secured Note
10-15-2003................................. B 475,000 532,500
------------ -------------
1,633,939 1,781,165
------------ -------------
COSMETICS AND SUNDRIES-0.35%
500,000 Revlon Consumer Products, 10.50% Sr Sub Notes
2-15-2003.................................. B- 507,599 520,000
------------ -------------
ENERGY-0.23%
500,000 Clark R & M Holdings, Inc., 9.97% Sr Note
2-15-2000 (e).............................. B+ 340,926 338,750
------------ -------------
FOOD-GROCERY, MISCELLANEOUS-0.29%
500,000 Specialty Foods Corp., 10.25% Sr Note Ser B
8-15-2001.................................. B 482,500 441,250
------------ -------------
FOOD-MISCELLANEOUS-0.33%
500,000 Envirodyne Industries, Inc., 12.00% First
Priority Sr Secured Note 6-15-2000......... B+ 500,000 495,000
------------ -------------
HEALTH CARE SERVICES-0.35%
500,000 Tenet Healthcare Corp., 8.625% Sr Note
12-1-2003.................................. BB- 498,384 525,000
------------ -------------
HOTEL AND MOTEL-0.34%
500,000 HMC Acquistion Properties, Inc., 9.00% Sr
Note 12-15-2007 (f)........................ BB- 500,000 505,000
------------ -------------
INDUSTRIAL-0.29%
500,000 American Standard, Inc., 9.45% Sr Sub Deb
6-1-2005 (Zero coupon until 6-1-1998,
thereafter 10.50%) (e)..................... B+ 435,172 435,625
------------ -------------
LEISURE TIME-AMUSEMENTS-0.67%
500,000 Bally's Park Place, Inc., 9.25% First Mtg
Bond 3-15-2004 (g)......................... BB 472,929 515,000
500,000 GNF Corp., 10.625% First Mtg Note 4-1-2003... BB 499,927 498,750
------------ -------------
972,856 1,013,750
------------ -------------
MACHINERY-0.17%
250,000 Spreckels Industries, Inc., 11.50% Sr Secured
Note 9-1-2000 (g).......................... B 242,812 256,250
------------ -------------
METALS-MINING AND MISCELLANEOUS-0.36%
500,000 Renco Metals, Inc., 12.00% Sr Note
7-15-2000.................................. B+ 537,648 545,000
------------ -------------
OFFICE EQUIPMENT AND SUPPLIES-0.32%
500,000 Mail-Well Corp., 10.50% Sr Sub Note
2-15-2004.................................. B 443,750 480,000
------------ -------------
RESTAURANTS AND FRANCHISING-0.11%
250,000 Flagstar Corp., 11.25% Sr Sub Deb
11-1-2004.................................. CCC+ 260,625 168,750
------------ -------------
RETAIL-GROCERY-0.68%
600,000 Farm Fresh, Inc., 12.25% Sr Note 10-1-2000... B- 600,000 522,000
500,000 Ralph's Grocery Co., 10.45% Sr Note
6-15-2004.................................. B 497,504 495,000
------------ -------------
1,097,504 1,017,000
------------ -------------
</TABLE>
12
<PAGE>
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost(b) Value(c)
--------- ------------- ------------ -------------
<C> <S> <C> <C> <C>
STEEL AND IRON-0.37%
$500,000 AK Steel Corp., 10.75% Sr Note 4-1-2004...... BB- $ 547,216 $ 562,500
------------ -------------
TECHNOLOGY-0.35%
500,000 Computervision Corp., 11.375% Sr Sub Note
8-15-1999.................................. CCC+ 515,476 531,250
------------ -------------
TELECOMMUNICATIONS-0.35%
250,000 A+ Network Inc., 11.875% 11-1-2005........... CCC+ 254,959 261,563
250,000 Paging Network, Inc., 10.125% Sr Sub Note
8-1-2007................................... B 252,812 271,875
------------ -------------
507,771 533,438
------------ -------------
TOBACCO-0.26%
500,000 Liggett Group, Inc., 11.50% Secured Note Ser
B 2-1-1999................................. NR* 361,250 397,500
------------ -------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... 13,869,425 14,160,382
------------ -------------
TOTAL ASSET BACKED & CORPORATE DEBT
SECURITIES................................. $43,895,359 $ 44,669,042
------------ -------------
------------ -------------
</TABLE>
U.S. GOVERNMENT SECURITIES-22.99%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost(b) Value(c)
----------- --------------- -------------
<C> <S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION-11.17%
MORTGAGE BACKED SECURITIES:
$1,600,000 6.00% 2011................................... $ 1,567,248 $ 1,552,486
2,946,498 6.50% 2010................................... 2,920,641 2,917,929
4,027,371 7.00% 2025................................... 3,962,879 3,983,319
1,867,123 8.00% 2025................................... 1,895,422 1,916,135
241,968 9.00% 2016-2021.............................. 239,046 254,520
--------------- -------------
10,585,236 10,624,389
--------------- -------------
NOTES:
2,000,000 6.85% 2000 (g)............................... 2,000,000 2,032,286
2,000,000 7.40% 2004 (g)............................... 2,111,050 2,129,422
--------------- -------------
4,111,050 4,161,708
--------------- -------------
REMIC-PAC'S:
2,000,000 7.00% 2020................................... 1,937,969 2,013,038
--------------- -------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 16,634,255 16,799,135
--------------- -------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION-3.06%
MORTGAGE BACKED SECURITIES:
1,805,432 7.50% 2022................................... 1,808,818 1,826,307
2,562,847 9.00% 2023................................... 2,646,140 2,700,600
75,505 9.50% 2019................................... 74,891 81,026
--------------- -------------
4,529,849 4,607,933
--------------- -------------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION................................ 4,529,849 4,607,933
--------------- -------------
OTHER DIRECT FEDERAL OBLIGATIONS-2.92%
FEDERAL HOME LOAN BANK:
1,750,000 6.125% 1996.................................. 1,747,813 1,755,656
2,500,000 7.31% 2004................................... 2,508,984 2,635,620
--------------- -------------
4,256,797 4,391,276
--------------- -------------
</TABLE>
13
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 29, 1996 (Unaudited)
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost(b) Value(c)
----------- --------------- -------------
<C> <S> <C> <C>
U.S. TREASURY SECURITIES-5.85%
BONDS:
$1,250,000 6.50% 2005 (g)............................... $ 1,315,087 $ 1,280,076
6,385,000 8.125% 2021.................................. 7,848,722 7,518,338
--------------- -------------
9,163,809 8,798,414
--------------- -------------
TOTAL U.S. GOVERNMENT SECURITIES............. 34,584,710 34,596,758
--------------- -------------
TOTAL LONG-TERM DEBT SECURITIES.............. 78,480,069 79,265,800
--------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 116,401,191 $ 146,987,949
--------------- -------------
--------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-1.07%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value(c)
----------- -------------
<C> <S> <C>
BANKS-1.07%
$1,605,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.22%............. $ 1,605,000
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$118,006,191) (B).......................... $ 148,592,949
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 29, 1996, the cost of securities for federal income tax
purposes was $118,006,191 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $32,491,040
Unrealized depreciation..................................... (1,904,282)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $30,586,758
- -------------------------------------------------------------------------
</TABLE>
(c) See Note A of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) 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 4.13% of net assets as of February 29, 1996.
(e) The interest rate disclosed for these securities represents the original
issue discount yields on the date of acquisition.
(f) Securities sold within terms of a private placement memorandum, exempt from
registration under Section 144A of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or to other "accredited
investors". These investments have been identified by portfolio management
as illiquid securities. The portfolio entered into the following Section
144A security transactions: On December 15, 1995 the portfolio acquired
$500,000 par of HMC Acquisition Properties, Inc. due 2007 with a cost basis
of $500,000, on September 13, 1995, the portfolio acquired $1,300,000 par
of Paine Webber Mortgage Acceptance Corp. due 2007 with a cost basis of
$1,300,813, and on January 17, 1996, the portfolio acquired $500,000 par of
Continental Cablevision, Inc. due 2006 with a cost basis of $504,375. The
value of these securities at February 29, 1996 is $2,353,734 which
represents 1.56% of net assets.
(g) Security is fully or partially on loan at February 29, 1996. See Note A of
accompanying Notes to Financial Statements.
* Moody's Rating.
14
<PAGE>
FORTIS STOCK FUNDS
VALUE FUND
Schedule of Investments
February 29, 1996 (Unaudited)
COMMON STOCKS-84.41%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost(b) Value(c)
------- ----------- -----------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-3.86%
1,500 Boeing Co.................................... $ 118,335 $ 121,687
1,500 McDonnell Douglas Corp....................... 136,047 132,375
----------- -----------
254,382 254,062
----------- -----------
AIR FREIGHT-2.25%
2,000 Federal Express Corp. (a).................... 144,646 148,000
----------- -----------
AUTOMOBILE AND MOTOR VEHICLE PARTS-2.22%
4,300 Echlin, Inc.................................. 157,524 145,662
----------- -----------
BANKS-4.23%
2,500 Bank of New York Co., Inc.................... 121,473 129,687
1,900 Citicorp..................................... 133,588 148,200
----------- -----------
255,061 277,887
----------- -----------
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT-1.85%
3,100 Mallinckrodt Group, Inc...................... 114,277 121,675
----------- -----------
BROADCASTING-1.79%
3,000 Viacom, Inc. Class B (a)..................... 122,595 117,750
----------- -----------
BROKERAGE AND INVESTMENT-2.19%
2,500 Merrill Lynch & Co., Inc..................... 130,157 144,062
----------- -----------
BUILDING MATERIALS-4.01%
4,700 Masco Corp................................... 143,421 133,950
3,200 Owens-Corning Fiberglas Corp. (a)............ 141,952 130,000
----------- -----------
285,373 263,950
----------- -----------
BUSINESS SERVICES AND SUPPLIES-2.00%
8,900 ADT, Ltd. (a)................................ 135,201 131,275
----------- -----------
COMPUTER-SOFTWARE-4.17%
2,800 Avnet, Inc................................... 124,740 139,650
3,400 Continuum, Inc. (a).......................... 133,384 134,725
----------- -----------
258,124 274,375
----------- -----------
DRUGS-3.95%
6,400 Mylan Laboratories, Inc...................... 128,456 124,800
2,400 Schering-Plough Corp......................... 130,989 134,700
----------- -----------
259,445 259,500
----------- -----------
ELECTRONIC-CONTROLS AND EQUIPMENT-2.23%
3,800 Cooper Industries, Inc....................... 139,580 146,775
----------- -----------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.02%
4,300 National Semiconductor Corp. (a)............. 97,915 67,187
----------- -----------
FOOD-GROCERY, MISCELLANEOUS-2.10%
4,200 Sysco Corp................................... 133,361 138,075
----------- -----------
HOUSEHOLD PRODUCTS-2.24%
1,800 Procter & Gamble Co.......................... 149,134 147,600
----------- -----------
LEISURE TIME-AMUSEMENTS-1.99%
4,100 Circus Circus Enterprises, Inc. (a).......... 113,980 130,688
----------- -----------
<CAPTION>
Market
Shares Cost(b) Value(c)
------- ----------- -----------
<C> <S> <C> <C>
MISCELLANEOUS-4.57%
2,200 General Electric Co.......................... $ 161,642 $ 166,100
3,800 H & R Block, Inc............................. 148,180 134,425
----------- -----------
309,822 300,525
----------- -----------
NATURAL GAS TRANSMISSIONS-2.17%
3,000 Williams Companies, Inc...................... 131,530 142,500
----------- -----------
OFFICE EQUIPMENT AND SUPPLIES-2.05%
1,100 International Business Machines Corp......... 100,430 134,888
----------- -----------
OIL AND GAS FIELD SERVICES-1.77%
1,600 Schlumberger Ltd............................. 111,353 116,600
----------- -----------
OIL-CRUDE PETROLEUM AND GAS-3.91%
2,000 Anadarko Petroleum Corp...................... 107,100 109,000
7,500 Union Texas Petroleum Holdings, Inc.......... 143,679 148,125
----------- -----------
250,779 257,125
----------- -----------
OIL-REFINING-3.36%
1,000 Atlantic Richfield Co........................ 110,675 109,500
3,900 Ultramar Corp................................ 100,132 111,638
----------- -----------
210,807 221,138
----------- -----------
PAPER-2.06%
5,200 James River Corp. of Virginia................ 125,575 135,200
----------- -----------
PHOTOGRAPHIC-2.58%
1,300 Xerox Corp................................... 171,610 169,325
----------- -----------
RAILROAD AND RAILROAD EQUIPMENT-2.07%
1,700 Burlington Northern -- Santa Fe Railway
Co......................................... 132,544 136,000
----------- -----------
REAL ESTATE-INVESTMENT TRUST-4.06%
4,400 Developers Diversified Realty Corp........... 130,610 128,150
5,100 Kimco Realty Corp............................ 138,965 138,975
----------- -----------
269,575 267,125
----------- -----------
RETAIL-DEPARTMENT STORES-4.03%
4,900 Federated Department Stores, Inc. (a)........ 135,228 148,225
2,500 May Department Stores Co..................... 104,813 116,563
----------- -----------
240,041 264,788
----------- -----------
RETAIL-MISCELLANEOUS-4.87%
5,300 AutoZone, Inc. (a)........................... 132,900 136,475
2,100 Home Depot, Inc.............................. 98,543 90,825
3,000 Lowe's Companies, Inc........................ 101,025 93,000
----------- -----------
332,468 320,300
----------- -----------
RUBBER AND PLASTIC-2.10%
5,700 Unifi, Inc................................... 129,335 138,225
----------- -----------
TELECOMMUNICATIONS-2.71%
2,800 AT & T Corp.................................. 185,467 178,150
----------- -----------
TOTAL COMMON STOCKS.......................... $ 5,452,091 $ 5,550,412
----------- -----------
----------- -----------
</TABLE>
PREFERRED STOCKS-2.38%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost(b) Value(c)
------- ----------- -----------
<C> <S> <C> <C>
OIL-REFINING-2.38%
5,800 Atlantic Richfield Co. $2.25 Convertible
Pfd........................................ $ 138,400 $ 156,600
----------- -----------
TOTAL EQUITY INVESTMENTS..................... $5,590,491 $5,707,012
----------- -----------
----------- -----------
</TABLE>
15
<PAGE>
FORTIS STOCK FUNDS
VALUE FUND (CONTINUED)
Schedule of Investments
February 29, 1996 (Unaudited)
SHORT-TERM INVESTMENTS-16.13%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value(c)
--------- -----------
<C> <S> <C>
BANKS-2.45%
$161,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.22%............. $ 161,000
-----------
U.S. GOVERNMENT AGENCY-10.65%
700,000 Federal Home Loan Mortgage Corp., 5.40%
3-1-1996.................................. 699,896
-----------
U.S. OTHER DIRECT FEDERAL OBLIGATIONS-3.03%
200,000 Federal Farm Credit Bank, 5.19% 3-28-1996... 199,462
-----------
TOTAL SHORT-TERM INVESTMENTS................. 1,060,358
-----------
TOTAL INVESTMENTS IN SECURITIES (COST:
$6,650,849) (B)............................ $6,767,370
-----------
-----------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 29, 1996, the cost of securities for federal income tax
purposes was $6,650,849 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 240,902
Unrealized depreciation..................................... (124,381)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 116,521
- -------------------------------------------------------------------------
</TABLE>
(c) See Note A of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) 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 1.77% of net assets as of February 29, 1996.
16
<PAGE>
FORTIS STOCK FUNDS
GROWTH AND INCOME FUND
Schedule of Investments
February 29, 1996 (Unaudited)
COMMON STOCKS-58.62%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost(a) Value(b)
------- --------- -----------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-1.85%
300 United Technologies Corp..................... $ 32,487 $ 32,250
--------- -----------
BUSINESS SERVICES AND SUPPLIES-0.61%
375 MBNA Corp.................................... 9,354 10,594
--------- -----------
CHEMICALS-0.89%
1,450 Ethyl Corp................................... 18,452 15,587
--------- -----------
DRUGS-6.23%
700 Abbott Laboratories.......................... 29,799 29,225
200 American Home Products Corp.................. 19,308 19,700
550 Lilly Eli & Co., Inc......................... 29,228 33,275
400 Merck & Co., Inc............................. 26,260 26,500
--------- -----------
104,595 108,700
--------- -----------
FINANCE COMPANIES-6.40%
200 American Express Co.......................... 8,408 9,200
800 Federal National Mortgage Association........ 24,945 25,300
450 Household International, Inc................. 28,987 30,262
700 Mercury Finance Co........................... 9,215 9,625
450 Student Loan Marketing Association........... 31,624 37,181
--------- -----------
103,179 111,568
--------- -----------
HAND TOOLS AND GENERAL HARDWARE-1.80%
700 Snap-On, Inc................................. 31,162 31,325
--------- -----------
HEALTH CARE SERVICES-0.56%
200 U.S. HealthCare, Inc......................... 9,175 9,750
--------- -----------
INSURANCE-1.56%
600 American Brands, Inc......................... 26,874 27,225
--------- -----------
MACHINERY-1.69%
1,050 Dresser Industries, Inc...................... 25,992 29,531
--------- -----------
MACHINERY-OIL AND WELL-3.00%
400 Kerr-McGee Corp.............................. 25,078 23,850
850 Sonat, Inc................................... 29,146 28,475
--------- -----------
54,224 52,325
--------- -----------
MEDICAL SUPPLIES-3.01%
600 Baxter International, Inc.................... 25,749 27,450
600 Pharmacia and UpJohn, Inc.................... 23,523 25,125
--------- -----------
49,272 52,575
--------- -----------
MISCELLANEOUS-2.93%
350 General Electric Co.......................... 25,224 26,425
700 H & R Block, Inc............................. 24,509 24,762
--------- -----------
49,733 51,187
--------- -----------
<CAPTION>
Market
Shares Cost(a) Value(b)
------- --------- -----------
<C> <S> <C> <C>
NATURAL GAS TRANSMISSIONS-3.38%
900 El Paso Natural Gas Co....................... $ 27,907 $ 30,375
600 Williams Companies, Inc...................... 27,176 28,500
--------- -----------
55,083 58,875
--------- -----------
NATURAL RESOURCES-1.26%
600 Enron Corp................................... 22,092 21,975
--------- -----------
OIL-CRUDE PETROLEUM AND GAS-2.84%
300 Amoco Corp................................... 20,758 20,850
1,000 Panhandle Eastern Corp....................... 28,202 28,625
--------- -----------
48,960 49,475
--------- -----------
PRINTING-0.93%
900 New England Business Service, Inc............ 18,751 16,200
--------- -----------
PUBLISHING-3.15%
300 McGraw-Hill Companies, Inc................... 26,237 26,213
600 Readers Digest Association, Inc. Class A Non-
Voting..................................... 29,442 28,725
--------- -----------
55,679 54,938
--------- -----------
RETAIL-DEPARTMENT STORES-1.82%
700 Sears Roebuck & Co........................... 31,103 31,763
--------- -----------
RETAIL-SPECIALTY AND SPECIALTY MAIL ORDER-1.91%
2,000 Intimate Brands, Inc......................... 29,560 33,250
--------- -----------
TELECOMMUNICATIONS-2.88%
300 AT & T Corp.................................. 19,483 19,088
600 Beneficial Corp.............................. 29,367 31,200
--------- -----------
48,850 50,288
--------- -----------
TOBACCO-1.70%
300 Philip Morris Companies, Inc................. 27,562 29,700
--------- -----------
UTILITIES-TELEPHONE-8.22%
450 Bell Atlantic Corp........................... 31,137 29,756
1,000 Frontier Corp................................ 30,003 30,000
700 GTE Corp..................................... 31,650 30,013
500 Sprint Corp.................................. 20,415 21,500
450 Telecom Corp. of New Zealand Ltd. ADS........ 31,162 32,006
--------- -----------
144,367 143,275
--------- -----------
TOTAL COMMON STOCKS.......................... $ 996,506 $ 1,022,356
--------- -----------
--------- -----------
</TABLE>
SHORT-TERM INVESTMENTS-40.13%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value(b)
--------- -----------
<C> <S> <C>
U.S. GOVERNMENT AGENCY-40.13%
$700,000 Federal Home Loan Mortgage Corp., 5.40%
3-1-1996................................... $ 699,897
-----------
TOTAL INVESTMENTS IN SECURITIES (COST:
$1,696,403) (A)............................ $1,722,253
-----------
-----------
</TABLE>
(a) At February 29, 1996, the cost of securities for federal income tax
purposes was $1,696,403 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 40,480
Unrealized depreciation..................................... (14,630)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 25,850
- -------------------------------------------------------------------------
</TABLE>
(b) See Note A of accompanying Notes to Financial Statements regarding
valuation of securities.
(c) 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 1.84% of net assets as of February 29, 1996.
17
<PAGE>
FORTIS STOCK FUNDS
CAPITAL FUND
Schedule of Investments
February 29, 1996 (Unaudited)
COMMON STOCKS-80.91%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost(b) Value(c)
--------- ------------- -------------
<C> <S> <C> <C>
BROADCASTING-1.08%
142,100 News Corp., Ltd. ADR (e)..................... $ 2,524,632 $ 3,215,012
------------- -------------
BUSINESS SERVICES AND SUPPLIES-5.96%
153,406 First Data Corp. (e)......................... 5,538,062 10,623,365
252,000 MBNA Corp.................................... 3,617,255 7,119,000
------------- -------------
9,155,317 17,742,365
------------- -------------
COMPUTER-HARDWARE-1.50%
104,000 Ceridian Corp. (a)(e)........................ 4,571,672 4,472,000
------------- -------------
COMPUTER-SOFTWARE-9.59%
57,000 Adobe Systems, Inc. (e)...................... 3,973,987 1,909,500
102,000 Computer Associates International, Inc....... 3,960,381 7,012,500
87,400 Microsoft Corp. (a).......................... 1,156,797 8,625,287
211,800 Oracle Corp. (a)(e).......................... 1,554,007 11,013,600
------------- -------------
10,645,172 28,560,887
------------- -------------
ELECTRONIC-COMMUNICATION SECURITY-1.30%
95,000 Bay Networks, Inc. (a)(e).................... 3,828,416 3,859,375
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.19%
60,100 Intel Corp................................... 1,459,469 3,534,631
------------- -------------
FINANCE COMPANIES-5.63%
266,000 Federal National Mortgage Association........ 2,327,500 8,412,250
264,576 Green Tree Financial Corp.................... 3,472,611 8,367,216
------------- -------------
5,800,111 16,779,466
------------- -------------
HEALTH CARE SERVICES-9.38%
115,400 Columbia/HCA Healthcare Corp................. 4,863,111 6,318,150
44,000 Oxford Health Plans, Inc. (a)(e)............. 3,236,062 3,621,750
45,700 PacifiCare Health Systems, Inc. Class B
(a)(e)..................................... 2,200,047 4,295,800
169,000 U.S. HealthCare, Inc......................... 5,770,188 8,238,750
83,600 United Healthcare Corp. (e).................. 3,609,033 5,454,900
------------- -------------
19,678,441 27,929,350
------------- -------------
HOTEL AND MOTEL-1.80%
115,500 Mirage Resorts, Inc. (a)..................... 2,603,580 5,356,313
------------- -------------
LEISURE TIME-AMUSEMENTS-1.52%
69,000 Disney (Walt) Co. (e)........................ 3,808,155 4,519,500
------------- -------------
MEDICAL SUPPLIES-2.82%
146,400 Medtronic, Inc. (and rights)................. 1,699,325 8,399,700
------------- -------------
<CAPTION>
Market
Shares Cost(b) Value(c)
--------- ------------- -------------
<C> <S> <C> <C>
MEDICAL TECHNOLOGY-1.65%
102,500 Boston Scientific Corp. (a).................. $ 4,200,989 $ 4,920,000
------------- -------------
MISCELLANEOUS-2.40%
221,100 CUC International, Inc. (a).................. 3,676,989 7,158,113
------------- -------------
OFFICE EQUIPMENT AND SUPPLIES-2.98%
355,000 Silicon Graphics, Inc. (a)................... 4,616,121 8,875,000
------------- -------------
PUBLISHING-1.17%
49,800 Scholastic Corp. (a)......................... 2,539,082 3,473,550
------------- -------------
RETAIL-DEPARTMENT STORES-2.97%
95,200 Kohl's Corp. (a)(e).......................... 3,718,455 5,890,500
139,600 Wal-Mart Stores, Inc. (e).................... 978,984 2,966,500
------------- -------------
4,697,439 8,857,000
------------- -------------
RETAIL-MISCELLANEOUS-9.29%
128,200 AutoZone, Inc. (a)(e)........................ 2,473,408 3,301,150
167,166 Home Depot, Inc.............................. 2,307,584 7,229,930
86,000 Lowe's Companies, Inc. (e)................... 1,719,275 2,666,000
236,025 Office Depot, Inc. (a)(e).................... 1,806,806 4,927,022
141,000 Pep Boys Manny-Moe & Jack.................... 2,606,629 4,230,000
148,000 Price/Costco, Inc. (a)....................... 2,840,050 2,553,000
90,700 Talbots, Inc................................. 2,322,008 2,743,675
------------- -------------
16,075,760 27,650,777
------------- -------------
TELECOMMUNICATIONS-9.50%
192,600 Cisco Systems, Inc. (a)...................... 2,387,013 9,148,500
284,000 Ericsson (L.M.) Telephone Co. Class B ADR.... 3,485,342 6,212,500
107,000 Motorola, Inc. (e)........................... 2,606,359 5,804,750
151,000 Tellabs, Inc. (a)............................ 4,569,687 7,134,750
------------- -------------
13,048,401 28,300,500
------------- -------------
TELEPHONE SERVICES-2.91%
220,450 WorldCom, Inc. (a)(e)........................ 2,346,825 8,680,219
------------- -------------
TOYS-4.94%
442,675 Mattel, Inc.................................. 3,496,886 14,718,944
------------- -------------
UTILITIES-TELEPHONE-1.33%
128,000 AirTouch Communications, Inc. (a)............ 3,299,050 3,968,000
------------- -------------
TOTAL COMMON STOCKS.......................... $ 123,771,832 $ 240,970,702
------------- -------------
------------- -------------
</TABLE>
PREFERRED STOCKS-0.44%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost(b) Value(c)
-------- ------------- -------------
<C> <S> <C> <C>
BROADCASTING-0.44%
64,800 News Corp., Ltd.(The) Preferred ADR (e)...... $ 989,913 $ 1,296,000
------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 124,761,745 $ 242,266,702
------------- -------------
------------- -------------
</TABLE>
18
<PAGE>
SHORT-TERM INVESTMENTS-17.06%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value(c)
------------ -------------
<C> <S> <C>
BANKS-4.18%
$12,448,802 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.22%............. $ 12,448,802
-------------
DIVERSIFIED FINANCE-0.82%
2,450,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.24%...................... 2,450,000
-------------
U.S. GOVERNMENT AGENCY-8.31%
16,000,000 Federal Home Loan Mortgage Corp., 5.18%
3-13-1996.................................. 15,970,649
2,800,000 Federal Home Loan Mortgage Corp., 5.19%
3-21-1996.................................. 2,791,670
6,000,000 Federal National Mortgage Assoc., 5.22%
3-22-1996.................................. 5,981,190
-------------
24,743,509
-------------
U.S. OTHER DIRECT FEDERAL OBLIGATIONS-3.75%
11,200,000 Federal Farm Credit Bank, 5.19% 3-19-1996.... 11,166,453
-------------
TOTAL SHORT-TERM INVESTMENTS................. 50,808,764
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$175,570,509) (B).......................... $ 293,075,466
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 29, 1996, the cost of securities for federal income tax
purposes was $175,570,509 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $120,227,085
Unrealized depreciation..................................... (2,722,128)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $117,504,957
- --------------------------------------------------------------------------
</TABLE>
(c) See Note A of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) 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 3.60% of net assets as of February 29, 1996.
(e) Security is fully or partially on loan at February 29, 1996. See Note A of
accompanying Notes to Financial Statements.
19
<PAGE>
FORTIS STOCK FUNDS
FIDUCIARY FUND
Schedule of Investments
February 29, 1996 (Unaudited)
COMMON STOCKS-77.06%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost(b) Value(c)
-------- ------------ ------------
<C> <S> <C> <C>
BROADCASTING-0.93%
30,000 News Corp., Ltd. ADR (d)..................... $ 568,584 $ 678,750
------------ ------------
BUSINESS SERVICES AND SUPPLIES-5.11%
31,411 First Data Corp. (d)......................... 1,142,960 2,175,212
55,500 MBNA Corp.................................... 805,564 1,567,875
------------ ------------
1,948,524 3,743,087
------------ ------------
COMPUTER-HARDWARE-1.35%
23,000 Ceridian Corp. (a)........................... 1,008,216 989,000
------------ ------------
COMPUTER-SOFTWARE-11.04%
13,000 Adobe Systems, Inc. (d)...................... 907,186 435,500
27,800 BMC Software, Inc. (a)....................... 770,472 1,549,850
21,450 Computer Associates International, Inc....... 838,898 1,474,687
20,400 Microsoft Corp. (a).......................... 287,042 2,013,225
50,200 Oracle Corp. (a)............................. 287,175 2,610,400
------------ ------------
3,090,773 8,083,662
------------ ------------
ELECTRONIC-COMMUNICATION SECURITY-1.14%
20,500 Bay Networks, Inc. (a)....................... 828,365 832,812
------------ ------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.69%
14,000 Intel Corp................................... 139,710 823,375
15,000 LSI Logic Corp. (a).......................... 817,470 414,375
------------ ------------
957,180 1,237,750
------------ ------------
FINANCE COMPANIES-4.75%
59,200 Federal National Mortgage Association........ 518,000 1,872,200
50,944 Green Tree Financial Corp.................... 669,081 1,611,104
------------ ------------
1,187,081 3,483,304
------------ ------------
HEALTH CARE SERVICES-6.98%
25,200 Columbia/HCA Healthcare Corp. (d)............ 1,063,738 1,379,700
10,000 Oxford Health Plans, Inc. (a)................ 736,812 823,125
9,300 PacifiCare Health Systems, Inc. Class B
(a)(d)..................................... 437,120 874,200
18,000 U.S. HealthCare, Inc......................... 662,892 877,500
17,800 United Healthcare Corp....................... 737,116 1,161,450
------------ ------------
3,637,678 5,115,975
------------ ------------
HOTEL AND MOTEL-2.30%
14,000 Harrah's Entertainment, Inc. (a)............. 490,295 379,750
24,250 Mirage Resorts, Inc. (a)..................... 546,510 1,124,594
7,000 Promus Hotel Corp. (a)....................... 204,105 182,000
------------ ------------
1,240,910 1,686,344
------------ ------------
LEISURE TIME-AMUSEMENTS-1.30%
14,500 Disney (Walt) Co............................. 800,040 949,750
------------ ------------
MEDICAL SUPPLIES-2.19%
28,000 Medtronic, Inc. (and rights)................. 334,290 1,606,500
------------ ------------
<CAPTION>
Market
Shares Cost(b) Value(c)
-------- ------------ ------------
<C> <S> <C> <C>
MEDICAL TECHNOLOGY-1.62%
24,800 Boston Scientific Corp. (a).................. $ 1,017,287 $ 1,190,400
------------ ------------
MISCELLANEOUS-1.90%
43,050 CUC International, Inc. (a).................. 715,911 1,393,744
------------ ------------
OFFICE EQUIPMENT AND SUPPLIES-6.52%
14,000 Compaq Computer Corp. (a).................... 540,120 708,750
68,000 Silicon Graphics, Inc. (a)(d)................ 883,615 1,700,000
35,600 Sterling Software, Inc. (a).................. 650,231 2,371,850
------------ ------------
2,073,966 4,780,600
------------ ------------
PUBLISHING-0.91%
9,600 Scholastic Corp. (a)......................... 489,198 669,600
------------ ------------
RESTAURANTS AND FRANCHISING-0.98%
20,000 Boston Chicken, Inc. (a)(d).................. 695,533 717,500
------------ ------------
RETAIL-DEPARTMENT STORES-2.35%
18,500 Kohl's Corp. (a)............................. 722,598 1,144,688
27,200 Wal-Mart Stores, Inc......................... 206,975 578,000
------------ ------------
929,573 1,722,688
------------ ------------
RETAIL-MISCELLANEOUS-7.60%
25,000 AutoZone, Inc. (a)(d)........................ 482,350 643,750
30,833 Home Depot, Inc.............................. 436,457 1,333,527
18,000 Lowe's Companies, Inc. (d)................... 360,214 558,000
46,350 Office Depot, Inc. (a)(d).................... 351,521 967,556
31,900 Pep Boys Manny-Moe & Jack.................... 589,736 957,000
28,000 Price/Costco, Inc. (a)....................... 560,434 483,000
20,800 Talbots, Inc................................. 533,296 629,200
------------ ------------
3,314,008 5,572,033
------------ ------------
TELECOMMUNICATIONS-8.44%
43,200 Cisco Systems, Inc. (a)...................... 535,865 2,052,000
64,000 Ericsson (L.M.) Telephone Co. Class B ADR
(d)........................................ 765,326 1,400,000
25,000 Motorola, Inc................................ 606,374 1,356,250
29,000 Tellabs, Inc. (a)............................ 900,919 1,370,250
------------ ------------
2,808,484 6,178,500
------------ ------------
TELEPHONE SERVICES-2.69%
50,054 WorldCom, Inc. (a)(d)........................ 526,188 1,970,876
------------ ------------
TOYS-4.15%
91,406 Mattel, Inc.................................. 734,778 3,039,250
------------ ------------
UTILITIES-TELEPHONE-1.12%
26,500 AirTouch Communications, Inc. (a)............ 678,290 821,500
------------ ------------
TOTAL COMMON STOCKS.......................... $ 29,584,857 $ 56,463,625
------------ ------------
------------ ------------
</TABLE>
PREFERRED STOCKS-0.41%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost(b) Value(c)
-------- ------------ ------------
<C> <S> <C> <C>
BROADCASTING-0.41%
15,000 News Corp., Ltd.(The) Preferred ADR.......... $ 246,006 $ 300,000
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $29,830,863 $56,763,625
------------ ------------
------------ ------------
</TABLE>
20
<PAGE>
SHORT-TERM INVESTMENTS-21.54%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value(c)
----------- ------------
<C> <S> <C>
BANKS-4.93%
$3,610,941 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.22%............. $ 3,610,941
------------
DIVERSIFIED FINANCE-1.24%
905,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.24%...................... 905,000
------------
U.S. GOVERNMENT AGENCY-9.25%
1,100,000 Federal Home Loan Mortgage Corp., 5.19%
3-21-1996................................. 1,096,727
5,700,000 Federal Home Loan Mortgage Corp., 5.23%
3-19-1996................................. 5,684,537
------------
6,781,264
------------
U.S. OTHER DIRECT FEDERAL OBLIGATIONS-6.12%
4,500,000 Federal Farm Credit Bank, 5.19% 3-19-1996... 4,487,889
------------
TOTAL SHORT-TERM INVESTMENTS................. 15,785,094
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$45,615,956) (B)........................... $72,548,719
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 29, 1996, the cost of securities for federal income tax
purposes was $45,615,956 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $28,036,844
Unrealized depreciation..................................... (1,104,081)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $26,932,763
- -------------------------------------------------------------------------
</TABLE>
(c) See Note A of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Security is fully or partially on loan at February 29, 1996. 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 3.25% of net assets as of February 29, 1996.
21
<PAGE>
FORTIS STOCK FUNDS
GROWTH FUND
Schedule of Investments
February 29, 1996 (Unaudited)
COMMON STOCKS-80.01%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost(b) Value(c)
--------- ------------- -------------
<C> <S> <C> <C>
APPAREL-0.96%
167,000 Tommy Hilfiger Corp. (a)..................... $ 5,625,266 $ 6,617,375
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT-1.14%
121,000 Biogen, Inc. (a)............................. 6,468,954 7,910,375
------------- -------------
BROADCASTING-0.77%
108,000 America Online, Inc. (a)..................... 3,525,850 5,305,500
------------- -------------
BUSINESS SERVICES AND SUPPLIES-1.25%
125,286 First Data Corp.............................. 5,072,954 8,676,055
------------- -------------
COMPUTER-SOFTWARE-17.84%
102,000 Ascend Communications, Inc. (a).............. 3,409,570 4,615,500
267,400 BMC Software, Inc. (a)....................... 5,320,370 14,907,550
59,000 FORE Systems, Inc. (a)....................... 3,215,912 3,894,000
74,000 HBO & Co..................................... 2,726,840 7,326,000
751,900 Informix Corp. (a)........................... 8,109,545 26,504,475
178,000 Input/Output, Inc. (a)....................... 3,916,000 5,295,500
203,850 Microsoft Corp. (a).......................... 6,816,230 20,117,447
476,400 Oracle Corp. (a)............................. 2,873,625 24,772,800
216,500 Parametric Technology Corp. (a).............. 6,327,022 16,102,187
------------- -------------
42,715,114 123,535,459
------------- -------------
ELECTRONIC-COMMUNICATION SECURITY-4.09%
204,000 ADC Telecommunications, Inc. (a)............. 6,637,777 8,109,000
117,200 Andrew Corp. (a)............................. 5,659,274 6,094,400
144,000 Bay Networks, Inc. (a)....................... 5,326,877 5,850,000
210,000 QUALCOMM, Inc. (a)........................... 8,068,746 8,281,875
------------- -------------
25,692,674 28,335,275
------------- -------------
ELECTRONIC-CONTROLS AND EQUIPMENT-2.32%
331,100 Solectron Corp. (a).......................... 9,085,495 16,058,350
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.68%
136,400 Intel Corp................................... 3,167,965 8,022,025
130,000 LSI Logic Corp. (a).......................... 7,085,978 3,591,250
------------- -------------
10,253,943 11,613,275
------------- -------------
FINANCE COMPANIES-3.33%
213,000 Franklin Resources, Inc...................... 2,787,446 12,274,125
785,550 Mercury Finance Co........................... 8,620,416 10,801,312
------------- -------------
11,407,862 23,075,437
------------- -------------
HEALTH CARE SERVICES-7.57%
116,000 Medaphis Corp. (a)........................... 3,306,728 4,509,500
130,000 Oxford Health Plans, Inc. (a)................ 5,739,244 10,700,625
104,900 PacifiCare Health Systems, Inc. Class B
(a)........................................ 4,548,720 9,860,600
85,000 PhyCor, Inc. (a)............................. 4,064,604 3,867,500
188,000 U.S. HealthCare, Inc......................... 6,731,514 9,165,000
142,000 United Healthcare Corp....................... 5,157,262 9,265,500
134,000 Vencor, Inc. (a)............................. 4,199,635 5,008,250
------------- -------------
33,747,707 52,376,975
------------- -------------
HOTEL AND MOTEL-0.84%
144,200 Harrah's Entertainment, Inc. (a)............. 3,025,850 3,911,425
72,100 Promus Hotel Corp. (a)....................... 1,259,630 1,874,600
------------- -------------
4,285,480 5,786,025
------------- -------------
<CAPTION>
Market
Shares Cost(b) Value(c)
--------- ------------- -------------
<C> <S> <C> <C>
MACHINERY-OIL AND WELL-0.91%
290,000 Petroleum Geo-Services A/S ADS (a) $ 6,961,011 $ 6,307,500
------------- -------------
MEDICAL TECHNOLOGY-0.74%
74,000 Genzyme Corp. (a)............................ 5,535,327 5,106,000
------------- -------------
MISCELLANEOUS-2.11%
452,100 CUC International, Inc. (a).................. 7,844,614 14,636,737
------------- -------------
OFFICE EQUIPMENT AND SUPPLIES-1.35%
185,000 Compaq Computer Corp. (a).................... 6,907,330 9,365,625
------------- -------------
PUBLISHING-1.20%
118,800 Scholastic Corp. (a)......................... 6,053,565 8,286,300
------------- -------------
RESTAURANTS AND FRANCHISING-4.45%
190,000 Boston Chicken, Inc. (a)..................... 6,607,787 6,816,250
443,300 Lone Star Steakhouse & Saloon, Inc. (a)...... 6,776,715 14,130,188
277,800 Outback Steakhouse, Inc. (a)................. 4,236,044 9,861,900
------------- -------------
17,620,546 30,808,338
------------- -------------
RETAIL-DEPARTMENT STORES-1.70%
117,600 Kohl's Corp. (a)............................. 3,779,664 7,276,500
210,800 Wal-Mart Stores, Inc......................... 1,494,008 4,479,500
------------- -------------
5,273,672 11,756,000
------------- -------------
RETAIL-MISCELLANEOUS-8.48%
197,300 Barnes & Noble, Inc. (a)..................... 4,940,859 5,697,038
225,800 General Nutrition Companies, Inc. (a)........ 4,882,711 5,108,725
273,749 Home Depot, Inc.............................. 1,678,473 11,839,644
190,000 Lowe's Companies, Inc........................ 7,121,922 5,890,000
497,850 Office Depot, Inc. (a)....................... 4,497,152 10,392,619
363,000 Staples, Inc. (a)............................ 6,644,860 9,392,625
430,000 Starbucks Corp. (a).......................... 7,274,791 7,578,750
102,400 Sunglass Hut International, Inc. (a)......... 2,856,362 2,841,600
------------- -------------
39,897,130 58,741,001
------------- -------------
TELECOMMUNICATIONS-13.16%
518,700 3Com Corp. (a)............................... 2,280,969 25,351,463
595,500 Cisco Systems, Inc. (a)...................... 1,056,082 28,286,250
83,300 DSC Communications Corp. (a)................. 2,138,875 2,540,650
107,000 MFS Communications Co., Inc. (a)............. 4,581,250 6,473,500
131,000 Motorola, Inc................................ 7,164,790 7,106,750
452,500 Tellabs, Inc. (a)............................ 5,199,009 21,380,625
------------- -------------
22,420,975 91,139,238
------------- -------------
TELEPHONE SERVICES-4.12%
87,400 Mobile Telecommunications Technologies Corp.
(a)........................................ 1,927,374 1,256,375
374,000 Paging Network, Inc. (a)..................... 5,656,750 9,911,000
440,000 WorldCom, Inc. (a)........................... 10,109,381 17,325,000
------------- -------------
17,693,505 28,492,375
------------- -------------
TOTAL COMMON STOCKS.......................... $ 294,088,974 $ 553,929,215
------------- -------------
------------- -------------
</TABLE>
22
<PAGE>
SHORT-TERM INVESTMENTS-18.67%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value(c)
------------ -------------
<C> <S> <C>
BANKS-3.74%
$25,879,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.22%............. $ 25,879,000
-------------
DIVERSIFIED FINANCE-0.07%
463,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.24%...................... 463,000
-------------
U.S. GOVERNMENT AGENCY-10.23%
25,000,000 Federal Home Loan Mortgage Corp., 5.12%
5-13-1996.................................. 24,737,401
10,100,000 Federal Home Loan Mortgage Corp., 5.18%
3-13-1996.................................. 10,081,472
16,200,000 Federal National Mortgage Assoc., 5.22%
3-22-1996.................................. 16,149,213
19,900,000 Federal Home Loan Mortgage Corp., 5.41%
3-5-1996................................... 19,885,351
-------------
70,853,437
-------------
U.S. OTHER DIRECT FEDERAL OBLIGATIONS-4.63%
9,300,000 Federal Home Loan Bank, 5.19% 3-15-1996...... 9,280,238
22,900,000 Federal Farm Credit Bank, 5.19% 3-28-1996.... 22,809,163
-------------
32,089,401
-------------
TOTAL SHORT-TERM INVESTMENTS................. 129,284,838
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$423,359,189) (B).......................... $ 683,214,053
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 29, 1996, the cost of securities for federal income tax
purposes was $423,359,189 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $266,605,258
Unrealized depreciation..................................... 6,750,394
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $259,854,864
- --------------------------------------------------------------------------
</TABLE>
Due to the length of maturity of the FHLMC 5.12% short-term investment, the
security is being mark to market, the cost of the security is $24,722,778.
(c) See Note A of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) 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 0.91% of net assets as of February 29, 1996.
23
<PAGE>
FORTIS STOCK FUNDS
CAPITAL APPRECIATION PORTFOLIO
Schedule of Investments
February 29, 1996 (Unaudited)
COMMON STOCKS-86.59%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost(b) Value(c)
--------- ------------ -------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-0.14%
5,000 CKS Group, Inc. (a)(e)....................... $ 85,000 $ 166,250
------------ -------------
APPAREL-0.10%
4,900 Mossimo, Inc. (a)(e)......................... 88,200 120,050
------------ -------------
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT-0.05%
2,000 Myriad Genetics, Inc. (a).................... 36,000 57,500
------------ -------------
BROADCASTING-2.14%
50,000 America Online, Inc. (a)(e).................. 214,062 2,456,250
------------ -------------
BUSINESS SERVICES AND SUPPLIES-4.79%
120,000 Acxiom Corp. (a)............................. 738,750 3,060,000
54,000 APAC TeleServices, Inc. (a).................. 985,242 2,450,250
------------ -------------
1,723,992 5,510,250
------------ -------------
COMPUTER-SOFTWARE-20.11%
9,000 Cascade Communications Corp. (a)(e) 518,250 610,875
16,000 Cerner Corp. (a)............................. 378,000 376,000
5,400 Cybercash, Inc. (a).......................... 91,800 271,350
45,000 FTP Software, Inc. (a)(e).................... 1,463,343 658,125
14,000 Idexx Laboratories, Inc. (a)................. 491,375 672,000
104,000 Informix Corp. (a)........................... 604,875 3,666,000
200,000 Input/Output, Inc. (a)....................... 556,250 5,950,000
36,000 Legato Systems, Inc. (a)..................... 898,500 1,332,000
40,000 Macromedia, Inc. (a)......................... 768,798 1,602,500
3,500 Mecon, Inc................................... 45,500 69,125
15,000 Medic Computer Systems, Inc. (a)............. 721,680 1,012,500
4,000 Netscape Communications Corp. (a)(e) 269,500 204,000
25,000 Network General Corp. (a).................... 730,268 1,006,250
31,000 Parametric Technology Corp. (a)(e)........... 304,238 2,305,625
47,000 Quarterdeck Corp. (a)........................ 1,118,517 875,375
26,000 Scopus Technology, Inc. (a).................. 515,091 445,250
3,500 Shiva Corp. (a).............................. 258,562 293,125
5,000 Spyglass, Inc. (a)(e)........................ 256,250 115,625
49,800 Synopsys, Inc. (a)........................... 857,600 1,630,950
------------ -------------
10,848,397 23,096,675
------------ -------------
CONSTRUCTION-1.87%
60,000 Fastenal Co. (e)............................. 356,876 2,152,500
------------ -------------
ELECTRONIC-COMMUNICATION SECURITY-1.05%
30,500 ADC Telecommunications, Inc. (a)............. 980,237 1,212,375
------------ -------------
ELECTRONIC-CONTROLS AND EQUIPMENT-3.08%
66,000 StrataCom, Inc. (a).......................... 820,875 2,640,000
38,000 Ultratech Stepper, Inc. (a).................. 532,125 902,500
------------ -------------
1,353,000 3,542,500
------------ -------------
ELECTRONIC-DEFENSE-0.53%
30,000 Trimble Navigation Ltd. (a).................. 876,000 611,250
------------ -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-4.08%
59,000 Unitrode Corp. (a)(e)........................ 1,129,256 1,644,625
79,000 Xilinx, Inc. (a)(e).......................... 1,006,879 3,051,375
------------ -------------
2,136,135 4,696,000
------------ -------------
HEALTH CARE SERVICES-8.18%
29,000 American Oncology Resources, Inc. (a) 898,432 1,167,250
43,000 Genesis Health Ventures, Inc. (a)(e)......... 773,603 1,875,875
40,000 Health Care & Retirement Corp. (a)........... 340,000 1,625,000
34,800 Healthsource, Inc. (a)(e).................... 698,436 1,318,050
14,000 Medaphis Corp. (a)........................... 399,324 544,250
30,000 Omnicare, Inc. (e)........................... 592,500 1,447,500
<CAPTION>
Market
Shares Cost(b) Value(c)
--------- ------------ -------------
<C> <S> <C> <C>
40,000 Pharmaceutical Products Development, Inc.
(a)........................................ $ 993,206 $ 1,085,000
17,000 Summit Medical Systems, Inc. (a)............. 153,000 344,250
------------ -------------
4,848,501 9,407,175
------------ -------------
MACHINERY-OIL AND WELL-1.14%
60,000 Petroleum Geo-Services A/S ADS (a)(e) 1,003,250 1,305,000
------------ -------------
MEDICAL SUPPLIES-2.51%
49,000 Isolyser Co., Inc. (a)(e).................... 761,500 833,000
60,000 Steris Corp. (a)............................. 1,067,130 2,055,000
------------ -------------
1,828,630 2,888,000
------------ -------------
OFFICE EQUIPMENT AND SUPPLIES-2.90%
40,000 Franklin Electronic Publishers, Inc. (a) 977,760 1,185,000
32,200 Sterling Software, Inc. (a).................. 604,985 2,145,325
------------ -------------
1,582,745 3,330,325
------------ -------------
OIL-CANADIAN-1.38%
53,000 MedPartners/Mullikin, Inc. (a)(e)............ 1,109,284 1,590,000
------------ -------------
PUBLISHING-0.88%
37,000 Davidson and Associates, Inc. (a)............ 1,100,750 1,008,250
------------ -------------
RESTAURANTS AND FRANCHISING-6.87%
67,300 Applebees International, Inc................. 1,201,960 1,413,300
29,000 Boston Chicken, Inc. (a)(e).................. 1,013,959 1,040,375
63,000 Cheesecake Factory, Inc. (a)................. 1,756,387 1,567,125
81,200 Lone Star Steakhouse & Saloon, Inc. (a)(e)... 356,925 2,588,250
25,000 Papa John's International, Inc. (a)(e)....... 720,625 1,287,500
------------ -------------
5,049,856 7,896,550
------------ -------------
RETAIL-MISCELLANEOUS-11.99%
76,500 Authentic Fitness Corp....................... 938,620 2,132,438
40,000 Bed, Bath & Beyond, Inc. (a)(e).............. 455,000 1,785,000
72,000 Books-A-Million, Inc. (a).................... 991,814 738,000
72,900 Corporate Express, Inc. (a)(e)............... 777,600 2,168,775
42,000 Gymboree Corp. (a)........................... 993,000 1,092,000
50,000 Micro Warehouse, Inc. (a).................... 512,500 2,375,000
66,000 Sunglass Hut International, Inc. (a)(e)...... 941,203 1,831,500
38,000 West Marine, Inc. (a)........................ 732,813 1,662,500
------------ -------------
6,342,550 13,785,213
------------ -------------
RETAIL-SPECIALTY AND SPECIALTY MAIL ORDER-1.32%
55,600 Gadzooks, Inc. (a)(e)........................ 1,117,030 1,515,100
------------ -------------
TELECOMMUNICATIONS-4.60%
77,600 Cisco Systems, Inc. (a)...................... 327,552 3,686,000
26,500 MFS Communications Co., Inc. (a)(e).......... 1,039,978 1,603,250
------------ -------------
1,367,530 5,289,250
------------ -------------
TELEPHONE SERVICES-1.06%
65,000 Intermedia Communications of Florida (a)..... 1,096,875 1,218,750
------------ -------------
UTILITIES-TELEPHONE-3.73%
45,000 IntelCom Group, Inc. (a)..................... 644,000 725,625
110,000 LCI International, Inc. (a)(e)............... 894,300 2,502,500
77,000 MIDCOM Communications, Inc. (a)(e) 1,110,141 1,058,750
------------ -------------
2,648,441 4,286,875
------------ -------------
WASTE DISPOSAL-2.09%
51,700 United Waste System, Inc. (a)................ 1,158,950 2,404,050
------------ -------------
TOTAL COMMON STOCKS.......................... $ 48,952,291 $ 99,546,138
------------ -------------
------------ -------------
</TABLE>
24
<PAGE>
SHORT-TERM INVESTMENTS-13.29%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value(c)
----------- -------------
<C> <S> <C>
BANKS-3.59%
$4,128,064 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.22%............. $ 4,128,064
-------------
BROKERAGE AND INVESTMENT-0.17%
191,000 Goldman Sachs Master Variable Rate Note,
Current rate -- 5.36%...................... 191,000
-------------
DIVERSIFIED FINANCE-2.76%
3,172,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.24%...................... 3,172,000
-------------
U.S. GOVERNMENT AGENCY-5.55%
6,400,000 Federal National Mortgage Assoc., 5.19%
3-4-1996................................... 6,396,373
-------------
U.S. OTHER DIRECT FEDERAL OBLIGATIONS-1.22%
1,400,000 Federal Home Loan Bank, 5.19% 3-15-1996...... 1,397,025
-------------
TOTAL SHORT-TERM INVESTMENTS................. 15,284,462
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$64,236,753) (B)........................... $ 114,830,600
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 29, 1996, the cost of securities for federal income tax
purposes was $64,236,753 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $52,860,279
Unrealized depreciation..................................... (2,266,432)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $50,593,847
- -------------------------------------------------------------------------
</TABLE>
(c) See Note A of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) 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 1.14% of net assets as of February 29, 1996.
(e) Security is fully or partially on loan at February 29, 1996. See Note A of
accompanying Notes to Financial Statements.
25
<PAGE>
FORTIS STOCK FUNDS
Statements of Assets and Liabilities
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET
ALLOCATION VALUE
PORTFOLIO FUND
------------- -----------
<S> <C> <C>
ASSETS:
Investments in securities,
as detailed in the
accompanying schedules, at
market (cost $118,006,191;
$6,650,849; $1,696,403;
$175,570,509; $45,615,956;
$423,359,189; and
$64,236,753 respectively)
(Note A).................. $148,592,949 $6,767,370
Cash on deposit with
custodian................. 43 4,581
Collateral for securities
lending transactions (Note
A)........................ 23,938,207 0
Receivables:
Investment securities
sold.................... 4,630,439 0
Interest and dividends.... 1,012,382 12,213
Subscriptions of capital
stock................... 58,147 0
Deferred registration costs
(Note A).................. 43,954 551
Prepaid expenses............ 14,639 4,456
------------- -----------
TOTAL ASSETS.................. 178,290,760 6,789,171
------------- -----------
LIABILITIES:
Payable upon return of
securities loaned (Note
A)........................ 23,938,207 0
Payable for investment
securities purchased...... 3,708,156 193,190
Redemptions of capital
stock..................... 43,566 2,695
Payable for investment
advisory and management
fees...................... 111,956 9,083
Payable for distribution
fees...................... 4,090 2,589
Accounts payable and accrued
expenses.................. 30,580 6,053
------------- -----------
TOTAL LIABILITIES............. 27,836,555 213,610
------------- -----------
NET ASSETS:
Net proceeds of capital
stock, par value $.01 per
share-authorized
10,000,000,000;
10,000,000,000;
10,000,000,000;
10,000,000,000;
100,000,000,000;
100,000,000,000;
10,000,000,000 shares;
respectively.............. 116,203,123 6,464,499
Unrealized appreciation of
investments............... 30,586,758 116,521
Undistributed net investment
income (loss)............. 576,857 8,251
Accumulated net realized
gain (loss) from the sale
of investments............ 3,087,467 (13,710)
------------- -----------
TOTAL NET ASSETS.............. $150,454,205 $6,575,561
------------- -----------
SHARES OUTSTANDING AND NET
ASSET VALUE PER SHARE:
Class A shares (based on net
assets of $137,808,314;
$6,091,695; $1,178,905;
$287,770,964; $69,442,000;
$673,519,815; and
$107,522,169; respectively
and 8,290,475; 599,231;
116,037; 13,348,304;
1,928,302; 20,899,695;
3,311,718 shares
outstanding;
respectively)............... $16.62 $10.17
------------- -----------
Class B shares (based on net
assets of $2,346,574;
$98,296; $82,769;
$3,083,180; $965,807;
$4,392,973; and $2,307,322
respectively and 141,765;
9,681; 8,161; 143,757;
27,065; 137,478; and 71,485
shares outstanding;
respectively)............... $16.55 $10.15
------------- -----------
Class C shares (based on net
assets of $1,844,467;
$105,215; $123,914;
$644,085; $428,819;
$697,677; and $483,065;
respectively and 111,776;
10,362; 12,215; 30,049;
11,998; 21,837; and 14,960
shares outstanding;
respectively)............... $16.50 $10.15
------------- -----------
Class H shares (based on net
assets of $8,454,850;
$280,355; $358,315;
$6,302,024; $2,435,133;
$13,733,607; $4,656,293;
respectively and 511,251;
27,603; 35,319; 293,890;
68,239; 429,900; and 144,180
shares outstanding;
respectively)............... $16.54 $10.16
------------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH & CAPITAL
INCOME CAPITAL FIDUCIARY GROWTH APPRECIATION
FUND FUND FUND FUND PORTFOLIO
----------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, as
detailed in the accompanying
schedules, at market (cost
$118,006,191; $6,650,849;
$1,696,403; $175,570,509;
$45,615,956; $423,359,189;
and $64,236,753
respectively) (Note A)...... $1,722,253 $293,075,466 $72,548,719 $683,214,053 $114,830,600
Cash on deposit with
custodian................... 54,923 46,863 298 323 101,778
Collateral for securities
lending transactions (Note
A).......................... 0 71,365,343 10,813,358 0 31,556,851
Receivables:
Investment securities
sold...................... 0 4,652,754 705,148 10,384,091 0
Interest and dividends...... 3,701 71,028 14,717 171,128 31,201
Subscriptions of capital
stock..................... 25,270 88,633 76,201 138,111 82,953
Deferred registration costs
(Note A).................... 1,584 141,428 28,856 34,135 38,894
Prepaid expenses.............. 4,892 17,685 8,907 38,861 6,985
----------- ------------- ------------ ------------- -------------
TOTAL ASSETS.................. 1,812,623 369,459,200 84,196,204 693,980,702 146,649,262
----------- ------------- ------------ ------------- -------------
LIABILITIES:
Payable upon return of
securities loaned (Note
A)........................ 0 71,365,343 10,813,358 0 31,556,851
Payable for investment
securities purchased...... 66,561 0 0 928,704 0
Redemptions of capital
stock..................... 0 50,252 7,286 205,010 13,654
Payable for investment
advisory and management
fees...................... 1,428 202,418 57,977 419,672 86,239
Payable for distribution
fees...................... 686 4,508 1,166 10,272 3,073
Accounts payable and accrued
expenses.................. 45 36,426 44,658 72,972 20,596
----------- ------------- ------------ ------------- -------------
TOTAL LIABILITIES............. 68,720 71,658,947 10,924,445 1,636,630 31,680,413
----------- ------------- ------------ ------------- -------------
NET ASSETS:
Net proceeds of capital
stock, par value $.01 per
share-authorized
10,000,000,000;
10,000,000,000;
10,000,000,000;
10,000,000,000;
100,000,000,000;
100,000,000,000;
10,000,000,000 shares;
respectively.............. 1,714,445 168,598,655 44,761,515 370,382,813 66,383,296
Unrealized appreciation of
investments............... 25,850 117,504,957 26,932,763 259,854,864 50,593,847
Undistributed net investment
income (loss)............. 3,608 (137,049) (95,929) (1,423,973) (541,628)
Accumulated net realized
gain (loss) from the sale
of investments............ 0 11,833,690 1,673,410 63,530,368 (1,466,666)
----------- ------------- ------------ ------------- -------------
TOTAL NET ASSETS.............. $1,743,903 $297,800,253 $73,271,759 $692,344,072 $114,968,849
----------- ------------- ------------ ------------- -------------
SHARES OUTSTANDING AND NET
ASSET VALUE PER SHARE:
Class A shares (based on net
assets of $137,808,314;
$6,091,695; $1,178,905;
$287,770,964; $69,442,000;
$673,519,815; and
$107,522,169; respectively
and 8,290,475; 599,231;
116,037; 13,348,304;
1,928,302; 20,899,695;
3,311,718 shares
outstanding;
respectively)............... $10.16 $21.56 $36.01 $32.23 $32.47
----------- ------------- ------------ ------------- -------------
Class B shares (based on net
assets of $2,346,574;
$98,296; $82,769;
$3,083,180; $965,807;
$4,392,973; and $2,307,322
respectively and 141,765;
9,681; 8,161; 143,757;
27,065; 137,478; and 71,485
shares outstanding;
respectively)............... $10.14 $21.45 $35.68 $31.95 $32.28
----------- ------------- ------------ ------------- -------------
Class C shares (based on net
assets of $1,844,467;
$105,215; $123,914;
$644,085; $428,819;
$697,677; and $483,065;
respectively and 111,776;
10,362; 12,215; 30,049;
11,998; 21,837; and 14,960
shares outstanding;
respectively)............... $10.14 $21.43 $35.74 $31.95 $32.29
----------- ------------- ------------ ------------- -------------
Class H shares (based on net
assets of $8,454,850;
$280,355; $358,315;
$6,302,024; $2,435,133;
$13,733,607; $4,656,293;
respectively and 511,251;
27,603; 35,319; 293,890;
68,239; 429,900; and 144,180
shares outstanding;
respectively)............... $10.15 $21.44 $35.69 $31.95 $32.29
----------- ------------- ------------ ------------- -------------
</TABLE>
27
<PAGE>
FORTIS STOCK FUNDS
Statements of Operations
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET
ALLOCATION VALUE
PORTFOLIO FUND*
----------- ---------
<S> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income........... $2,892,384 $ 10,274
Dividend income........... 123,355 17,351
Fee income (Note A)....... 10,188 0
----------- ---------
Total income................ 3,025,927 27,625
----------- ---------
Expenses:
Investment advisory and
management fees (Note
B)...................... 679,625 9,083
Distribution fees (Class
A) (Note B)............. 303,313 2,164
Distribution fees (Class
B) (Note B)............. 7,813 89
Distribution fees (Class
C) (Note B)............. 6,411 127
Distribution fees (Class
H) (Note B)............. 32,297 209
Registration fees......... 16,534 1,142
Shareholders' notices and
reports................. 17,802 550
Legal and auditing fees... 14,421 4,767
Custodian fees............ 9,572 834
Directors' fees and
expenses................ 2,984 267
Other..................... 7,340 142
----------- ---------
Total expenses.............. 1,098,112 19,374
----------- ---------
NET INVESTMENT INCOME
(LOSS)........................ 1,927,815 8,251
----------- ---------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE
A):
Net realized gain (loss)
from security
transactions.............. 3,094,946 (13,710)
Net change in unrealized
appreciation
(depreciation) of
investments............... 1,021,808 116,521
----------- ---------
NET GAIN ON INVESTMENTS....... 4,116,754 102,811
----------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS..... $6,044,569 $111,062
----------- ---------
</TABLE>
*FOR PERIOD JANUARY 2, 1996 (COMMENCEMENT OF OPERATIONS) TO FEBRUARY 29, 1996.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH & CAPITAL
INCOME CAPITAL FIDUCIARY GROWTH APPRECIATION
FUND* FUND FUND FUND PORTFOLIO
-------- ------------ ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income............. $ 1,843 $ 1,340,432 $ 316,760 $ 1,869,837 $ 213,709
Dividend income............. 4,104 550,798 103,871 386,336 8,801
Fee income (Note A)......... 0 25,458 3,876 0 39,353
-------- ------------ ----------- ------------- -------------
Total income.................. 5,947 1,916,688 424,507 2,256,173 261,863
-------- ------------ ----------- ------------- -------------
Expenses:
Investment advisory and
management fees (Note
B)........................ 1,428 1,242,451 337,985 2,545,282 494,556
Distribution fees (Class A)
(Note B).................. 247 353,995 80,844 812,290 212,366
Distribution fees (Class B)
(Note B).................. 38 11,192 3,228 14,447 7,376
Distribution fees (Class C)
(Note B).................. 115 2,525 1,864 2,346 1,488
Distribution fees (Class H)
(Note B).................. 286 24,969 9,515 49,895 15,665
Registration fees........... 109 34,809 26,017 53,208 18,399
Shareholders' notices and
reports................... 0 18,722 16,537 61,299 19,429
Legal and auditing fees..... 70 32,184 24,154 42,653 13,476
Custodian fees.............. 0 18,150 9,370 44,898 12,432
Directors' fees and
expenses.................. 0 14,048 8,136 24,639 4,326
Other....................... 46 11,273 2,786 29,189 3,978
-------- ------------ ----------- ------------- -------------
Total expenses................ 2,339 1,764,318 520,436 3,680,146 803,491
-------- ------------ ----------- ------------- -------------
NET INVESTMENT INCOME
(LOSS)........................ 3,608 152,370 (95,929) (1,423,973) (541,628)
-------- ------------ ----------- ------------- -------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE
A):
Net realized gain (loss)
from security
transactions.............. 0 11,833,690 1,675,447 63,546,984 (1,464,849)
Net change in unrealized
appreciation
(depreciation) of
investments............... 25,850 (6,636,194) (216,826) (32,803,176) 9,074,501
-------- ------------ ----------- ------------- -------------
NET GAIN ON INVESTMENTS....... 25,850 5,197,496 1,458,621 30,743,808 7,609,652
-------- ------------ ----------- ------------- -------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS..... $29,458 $ 5,349,866 $1,362,692 $ 29,319,835 $ 7,068,024
-------- ------------ ----------- ------------- -------------
</TABLE>
29
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
ASSET ALLOCATION PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE SIX
MONTH
PERIOD ENDED FOR THE
FEBRUARY 29, YEAR ENDED
1996 AUGUST 31,
(UNAUDITED) 1995
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income........................... $ 1,927,815 $ 3,425,089
Net realized gain from security transacations... 3,094,946 2,925,495
Net change in unrealized appreciation of
investments in securities..................... 1,021,808 14,902,688
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS........................................ 6,044,569 21,253,272
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A....................................... (2,016,818) (3,216,965)
Class B....................................... (14,753) (4,269)
Class C....................................... (16,260) (6,010)
Class H....................................... (75,714) (32,044)
From net realized gains on investments
Class A....................................... (2,624,984) (736,358)
Class B....................................... (29,353) (258)
Class C....................................... (27,342) (158)
Class H....................................... (136,849) (1,337)
------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............... (4,942,073) (3,997,399)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (740,262 and 934,550 shares).......... 12,199,288 14,063,680
Class B (127,402 and 42,825 shares)........... 2,088,149 660,329
Class C (71,139 and 50,730 shares)............ 1,180,409 771,696
Class H (237,346 and 290,527 shares).......... 3,911,100 4,432,310
Proceeds from shares issued as a result of
reinvested dividends
Class A (266,961 and 247,207 shares).......... 4,308,686 3,599,514
Class B (2,696 and 292 shares)................ 43,461 4,448
Class C (2,584 and 402 shares)................ 41,370 6,160
Class H (12,267 and 1,905 shares)............. 196,586 29,064
Less cost of repurchase of shares
Class A (765,915 and 1,398,564 shares)........ (12,668,253) (20,935,112)
Class B (30,410 and 1,040 shares)............. (507,038) (15,962)
Class C (9,302 and 3,777 shares).............. (151,511) (59,287)
Class H (22,778 and 8,016 shares)............. (374,457) (123,666)
------------- -------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS...................................... 10,267,790 2,433,174
------------- -------------
TOTAL INCREASE IN NET ASSETS...................... 11,370,286 19,689,047
NET ASSETS:
Beginning of period............................. 139,083,919 119,394,872
------------- -------------
End of period (includes undistributed net
investment income of $576,857 and $772,587,
respectively)................................. $ 150,454,205 $ 139,083,919
------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
VALUE FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
PERIOD FROM
JANUARY 2,
1996
TO FEBRUARY
29, 1996
(UNAUDITED)
-----------
<S> <C>
OPERATIONS:
Net investment income........................... $ 8,251
Net realized gain (loss) from security
transacations................................. (13,710)
Net change in unrealized appreciation of
investments in securities..................... 116,521
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS........................................ 111,062
-----------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (599,340 shares)...................... 5,991,757
Class B (9,691 shares)........................ 95,985
Class C (10,372 shares)....................... 102,587
Class H (27,613 shares)....................... 275,565
Less cost of repurchase of shares
Class A (109 shares).......................... (1,095)
Class B (10 shares)........................... (100)
Class C (10 shares)........................... (100)
Class H (10 shares)........................... (100)
-----------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS...................................... 6,464,499
-----------
TOTAL INCREASE IN NET ASSETS...................... 6,575,561
NET ASSETS:
Beginning of period............................. --
-----------
End of period (includes undistributed net
investment income of $8,251).................. $6,575,561
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
GROWTH & INCOME FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
PERIOD FROM
JANUARY 2,
1996
TO FEBRUARY
29, 1996
(UNAUDITED)
-----------
<S> <C>
OPERATIONS:
Net investment income........................... $ 3,608
Net change in unrealized appreciation of
investments in securities..................... 25,850
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS........................................ 29,458
-----------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (116,047 shares)...................... 1,160,334
Class B (8,171 shares)........................ 82,225
Class C (12,225 shares)....................... 122,035
Class H (35,601 shares)....................... 353,045
Less cost of repurchase of shares
Class A (10 shares)........................... (95)
Class B (10 shares)........................... (100)
Class C (10 shares)........................... (100)
Class H (282 shares).......................... (2,899)
-----------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS...................................... 1,714,445
-----------
TOTAL INCREASE IN NET ASSETS...................... 1,743,903
NET ASSETS:
Beginning of period............................. --
-----------
End of period (includes undistributed net
investment income of $3,608).................. $1,743,903
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
CAPITAL FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE SIX
MONTH
PERIOD ENDED
FEBRUARY 29, FOR THE
1996 YEAR ENDED
(UNAUDITED) AUGUST 31, 1995
---------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income........................... $ 152,370 $ 1,067,881
Net realized gain from security transacations... 11,833,690 24,924
Net change in unrealized appreciation
(depreciation) of investments in securities... (6,636,194) 51,715,498
---------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS........................................ 5,349,866 52,808,303
---------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A....................................... (570,880) (1,091,491)
Class B....................................... -- (147)
Class C....................................... -- (24)
Class H....................................... -- (324)
From net realized gains on investments
Class A....................................... -- (10,244,029)
Class B....................................... -- (2,531)
Class C....................................... -- (68)
Class H....................................... -- (2,368)
---------------- ---------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............... (570,880) (11,340,982)
---------------- ---------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (510,048 and 1,643,037 shares)........ 10,718,640 30,014,520
Class B (79,575 and 75,949 shares)............ 1,667,937 1,426,190
Class C (15,989 and 16,667 shares)............ 339,444 315,873
Class H (119,449 and 194,028 shares).......... 2,498,868 3,659,178
Proceeds from shares issued as a result of
reinvested dividends
Class A (24,910 and 639,451 shares)........... 530,056 10,561,400
Class B (0 and 163 shares).................... -- 2,678
Class C (0 and 6 shares)...................... -- 91
Class H (0 and 138 shares).................... -- 2,724
Less cost of repurchase of shares
Class A (915,518 and 1,940,448 shares)........ (19,340,595) (35,907,590)
Class B (8,044 and 3,886 shares).............. (167,547) (77,466)
Class C (2,211 and 402 shares)................ (46,698) (8,239)
Class H (17,255 and 2,470 shares)............. (364,803) (47,144)
---------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE
TRANSACTIONS...................................... (4,164,698) 9,942,215
---------------- ---------------
TOTAL INCREASE IN NET ASSETS...................... 614,288 51,409,536
NET ASSETS:
Beginning of period............................. 297,185,965 245,776,429
---------------- ---------------
End of period (includes undistributed net
investment income (loss) of ($137,049) and
$281,461, respectively)....................... $ 297,800,253 $ 297,185,965
---------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
FIDUCIARY FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE SIX
MONTH
PERIOD ENDED
FEBRUARY 29, FOR THE
1996 YEAR ENDED
(UNAUDITED) AUGUST 31, 1995
---------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment loss............................. $ (95,929) $ (288,486)
Net realized gain from security transacations... 1,675,447 928,972
Net change in unrealized appreciation
(depreciation) of investments in securities... (216,826) 11,231,862
---------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS........................................ 1,362,692 11,872,348
---------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments
Class A....................................... (488,673) (1,980,907)
Class B....................................... (4,655) (1,202)
Class C....................................... (2,896) (214)
Class H....................................... (14,397) (4,499)
---------------- ---------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............... (510,621) (1,986,822)
---------------- ---------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (350,148 and 429,389 shares).......... 12,439,894 13,255,649
Class B (14,901 and 13,622 shares)............ 518,637 435,257
Class C (5,383 and 8,195 shares).............. 190,309 261,396
Class H (29,037 and 46,909 shares)............ 1,017,647 1,433,120
Proceeds from shares issued as a result of
reinvested dividends
Class A (14,134 and 69,865 shares)............ 478,289 1,932,493
Class B (138 and 44 shares)................... 4,646 1,202
Class C (86 and 8 shares)..................... 2,894 215
Class H (418 and 163 shares).................. 14,047 4,499
Less cost of repurchase of shares
Class A (213,906 and 336,667 shares).......... (7,474,522) (10,434,831)
Class B (1,355 and 285 shares)................ (46,490) (9,491)
Class C (1,155 and 519 shares)................ (40,332) (16,128)
Class H (3,102 and 5,186 shares).............. (105,980) (160,979)
---------------- ---------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS...................................... 6,999,039 6,702,402
---------------- ---------------
TOTAL INCREASE IN NET ASSETS...................... 7,851,110 16,587,928
NET ASSETS:
Beginning of period............................. 65,420,649 48,832,721
---------------- ---------------
End of period (includes undistributed net
investment loss of $95,929 and $0,
respectively)................................. $73,271,759 $ 65,420,649
---------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
GROWTH FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE SIX
MONTH
PERIOD ENDED FOR THE
FEBRUARY 29, YEAR ENDED
1996 AUGUST 31,
(UNAUDITED) 1995
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment loss............................. $ (1,423,973) $ (811,913)
Net realized gain from security transacations... 63,546,984 38,024,044
Net change in unrealized appreciation
(depreciation) of investments in securities... (32,803,176) 108,759,948
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS........................................ 29,319,835 145,972,079
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments
Class A....................................... (34,150,383) (10,376,803)
Class B....................................... (156,787) (2,186)
Class C....................................... (26,843) (227)
Class H....................................... (562,732) (4,517)
------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............... (34,896,745) (10,383,733)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (1,316,628 and 3,595,502 shares)...... 41,992,194 97,595,401
Class B (70,053 and 69,263 shares)............ 2,195,702 1,891,029
Class C (13,612 and 8,239 shares)............. 432,109 233,665
Class H (224,925 and 221,567 shares).......... 7,113,013 6,230,792
Proceeds from shares issued as a result of
reinvested dividends
Class A (1,117,477 and 401,424 shares)........ 32,987,977 9,887,238
Class B (5,300 and 89 shares)................. 155,289 2,186
Class C (915 and 9 shares).................... 26,803 227
Class H (18,920 and 174 shares)............... 554,531 4,276
Less cost of repurchase of shares
Class A (2,072,314 and 4,738,197 shares)...... (66,609,283) (129,577,320)
Class B (4,954 and 2,273 shares).............. (155,189) (70,358)
Class C (810 and 128 shares).................. (25,511) (3,645)
Class H (25,304 and 10,382 shares)............ (808,657) (309,141)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE
TRANSACTIONS...................................... 17,858,978 (14,115,650)
------------- -------------
TOTAL INCREASE IN NET ASSETS...................... 12,282,068 121,472,696
NET ASSETS:
Beginning of period............................. 680,062,004 558,589,308
------------- -------------
End of period (includes undistributed net
investment loss of $1,423,973 and $0,
respectively)................................. $ 692,344,072 $ 680,062,004
------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE SIX
MONTH
PERIOD ENDED FOR THE
FEBRUARY 29, YEAR ENDED
1996 AUGUST 31,
(UNAUDITED) 1996
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment loss............................. $ (541,628) $ (521,120)
Net realized gain (loss) from security
transacations................................. (1,464,849) 1,148,184
Net change in unrealized appreciation of
investments in securities..................... 9,074,501 22,420,087
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS........................................ 7,068,024 23,047,151
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments
Class A....................................... (684,688) --
Class B....................................... (11,074) --
Class C....................................... (2,391) --
Class H....................................... (25,057) --
------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............... (723,210) --
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (776,133 and 695,629 shares).......... 24,012,862 17,177,636
Class B (46,397 and 27,699 shares)............ 1,408,625 727,381
Class C (8,448 and 7,466 shares).............. 265,435 195,229
Class H (78,498 and 74,376 shares)............ 2,423,897 1,892,069
Proceeds from shares issued as a result of
reinvested dividends
Class A (22,689 and 160,390 shares)........... 667,213 --
Class B (371 shares).......................... 10,838 --
Class C (80 shares)........................... 2,391 --
Class H (852 shares).......................... 24,946 --
Less cost of repurchase of shares
Class A (451,294 and 696,664 shares).......... (14,042,804) (17,143,294)
Class B (2,805 and 177 shares)................ (85,146) (4,692)
Class C (999 and 35 shares)................... (31,154) (959)
Class H (4,326 and 5,220 shares).............. (134,704) (140,589)
------------- -------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS...................................... 14,522,399 2,702,781
------------- -------------
TOTAL INCREASE IN NET ASSETS...................... 20,867,213 25,749,932
NET ASSETS:
Beginning of period............................. 94,101,636 68,351,704
------------- -------------
End of period (includes undistributed net
investment loss of $541,628 and $0,
respectively)................................. $ 114,968,849 $ 94,101,636
------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements
(Unaudited)
- --------------------------------------------------------------------------------
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The funds are open-end,
diversified management investment companies, each of which has different
investment objectives and their own investment portfolios and net asset
values. Asset Allocation and Capital Appreciation Portfolios are series of
Fortis Advantage Portfolios, Inc. ("Fortis Advantage") and Fortis Value Fund,
Fortis Growth & Income Fund, and Fortis Capital Fund are series of Fortis
Equity Portfolios, Inc. ("Fortis Equity"). The investment objectives of each
portfolio are as follows:
- The objective of Fortis Asset Allocation Portfolio is maximum total return
on invested capital, to be derived mainly from capital appreciation,
dividends and interest.
- The objective of Fortis Value Fund is short and long-term capital
appreciation. The portfolio invests primarily in equity securities and
selects stocks based on the "value" philosophy.
- The objective of the Fortis Growth & Income Fund is capital appreciation
and current income. It is the intention of the portfolio to maintain a
median market capitalization of over $5 billion, making it a "large cap
fund".
- The objective of the Fortis Capital Fund is short and long-term capital
appreciation. Current income is only a secondary objective.
- The objective of Fortis Fiduciary Fund is short and long-term capital
appreciation. Current income is only a secondary objective.
- The objective of Fortis Growth Fund is short and long-term capital
appreciation. Current income is only a secondary objective.
- The objective of Capital Appreciation Portfolio is maximum long-term
capital appreciation. Dividend and interest income from investments, if
any, is incidental.
The Articles of Incorporation of Fortis Advantage and Fortis Equity permits
the Board of Directors to create additional portfolios in the future.
The Advantage Portfolios, Equity Portfolios, Fortis Growth Fund and Fortis
Fiduciary Fund offer Class A, Class B, Class C and Class H shares.
The Advantage Portfolios, Fortis Capital Fund, Fortis Growth Fund and Fortis
Fiduciary Fund began to issue multiple class shares effective November 14,
1994. The inception of Fortis Value Fund and Fortis Growth & Income Fund was
December 15, 1995, and the commencement of operations was January 2, 1996.
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 for six years, 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 contingent deferred sales charge for one year.
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.
The significant accounting policies followed by the Funds are summarized as
follows:
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 and over-the-counter securities for
which no sale was reported are valued at the last reported bid price.
Long-term debt securities are valued at current market prices on the basis of
valuations furnished by an independent pricing service. 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.
Prior to August 31, 1995, for financial reporting purposes, except for
original issue discount, the Asset Allocation portfolio did not amortize bond
premium and discount. Since August 31, 1995, the fund amortizes bond premium
and discount.
For the six-month period ended February 29, 1996, the cost of purchases and
proceeds from sales of securities (other than short-term securities) were as
follows:
<TABLE>
<CAPTION>
Cost of Proceeds
Purchases from Sales
<S> <C> <C>
- -------------------------------------------------------------------------------
Asset Allocation Portfolio......................... $ 62,389,914 $ 51,414,463
Fortis Value Fund.................................. 5,885,567 281,366
Fortis Growth & Income Fund........................ 996,506 0
Fortis Capital Fund................................ 22,067,248 61,573,787
Fortis Fiduciary Fund.............................. 7,512,825 7,428,455
Fortis Growth Fund................................. 70,068,699 148,622,504
Capital Appreciation Portfolio..................... 15,090,465 11,416,160
</TABLE>
LENDING OF PORTFOLIO SECURITIES: At February 29, 1996 securities were on loan
to brokers from the Funds. For collateral, the Funds' custodian received cash
which is maintained in a separate account and invested by the custodian in
short term investment vehicles. The risks to the Funds 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. Value of securities on loan
at February 29, 1996 and fee income from securities lending was as follows
for the six-month period ended February 29, 1996:
<TABLE>
<CAPTION>
Fee Income
For Period
Ended
Securities August 31,
On Loan Collateral 1995
<S> <C> <C> <C>
- ------------------------------------------------------------------------------
Asset Allocation Portfolio.............. $19,057,632 $23,938,207 $ 10,188
Fortis Capital Fund..................... 64,986,750 71,365,343 25,458
Fortis Fiduciary Fund................... 10,429,934 10,813,358 3,876
Capital Appreciation Portfolio.......... 30,227,007 31,556,851 39,353
</TABLE>
INCOME TAXES: The portfolios intend to qualify, under the Internal Revenue
Code, as regulated investment companies and if so qualified, will not have to
pay federal income taxes to the extent their taxable net income is
distributed. For tax purposes, each portfolio is a single taxable entity.
On a calendar year basis, each portfolio intends to distribute substantially
all of its net investment income and realized gains, if any, to avoid payment
of federal excise taxes.
37
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
Net investment income and net realized gains differ for financial statement
and tax purposes primarily because of the recognition of market discount as
ordinary income for tax purposes for Asset Allocation Portfolio and wash sale
transactions. 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.
DEFERRED COSTS: Registration costs are deferred and charged to income over
the registration period.
INCOME AND CAPITAL GAINS DISTRIBUTIONS: It is the policy of Asset Allocation
Portfolio, and Fortis Value Fund to pay quarterly distributions from net
investment income; Capital Appreciation Portfolio, Fortis Growth & Income
Fund, Fortis Capital Fund, Fortis Fiduciary Fund and Fortis Growth Fund to
pay annual distributions from net investment income. Distributions of net
realized capital gains, if any, are made annually by each Fund. The
distributions are recorded on the record date and are payable in cash or
reinvested in additional shares of the portfolio at net asset value without
any charge to the shareholder.
ILLIQUID SECURITIES: At February 29, 1996, investments in securities for the
Asset Allocation Portfolio included issues that are illiquid. The fund
currently limits investments in illiquid securities to 15% of net assets, at
market value, at the date of purchase. The aggregate value of such securities
at February 29, 1996, was $505,000 which represents 1.56% of 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 15% limitation 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.
B. PAYMENTS TO RELATED PARTIES: Fortis Advisers, Inc., is the investment adviser
for each Fund. Investment advisory and management fees are computed for
Fortis Asset Allocation Portfolio, Fortis Value Fund, Fortis Growth & Income
Fund, Fortis Capital Fund, Fortis Fiduciary Fund, Fortis Growth Fund and
Fortis Capital Appreciation Portfolio at an annual rate of 1% of the first
$100 million of average daily net assets, .80% for the next $150 million, and
.70% for average assets over $250 million of each portfolio.
In addition to the investment advisory and management fee, Classes A, B, C
and H pay Fortis Investors, Inc. (the funds' principal underwriter)
distribution fees equal to .45% of average daily net assets for Class A for
each of Asset Allocation and Capital Appreciation Portfolios and .25% of
average daily net assets for Class A for each of Value Fund, Growth & Income
Fund, Capital Fund, Fiduciary Fund and Growth Fund and 1.00% of average daily
net assets for Classes B, C and H for each fund 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 or redeemers of the funds' shares) as follows:
<TABLE>
<CAPTION>
Class A Class B Class C Class H
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------
Asset Allocation Portfolio.............. $303,313 $ 7,813 $6,411 $32,297
Value Fund.............................. $ 7,499 -- -- --
Growth & Income Fund.................... $ 12,308 -- -- $ 2,899
Capital Fund............................ $353,995 $11,192 $2,525 $24,969
Fiduciary Fund.......................... $ 87,221 $ 9 $ 144 $ 1,197
Growth Fund............................. $811,240 $ 272 $ 190 $ 9,682
Capital Appreciation Portfolio.......... $242,217 $ 481 $ 105 $ 895
</TABLE>
Legal fees and expenses aggregating $5,221; $378; $63, $7,468 $15,800,
$29,136 and $4,028 for Fortis Asset Allocation Portfolio, Fortis Value Fund,
Fortis Growth & Income Fund, Fortis Capital Fund, Fortis Fiduciary Fund,
Fortis Growth Fund, and Fortis Capital Appreciation Portfolio, respectively,
for the six-month period ended February 29, 1996, were paid to a law firm of
which the secretary of the funds is a partner.
C. CHANGE IN ACCOUNTING PERIOD: Effective August 31, 1995, Fortis Asset
Allocation and Capital Appreciation Portfolios changed their fiscal
accounting and tax year-end to August 31 (previously October 31).
38
<PAGE>
- --------------------------------------------------------------------------------
D. FINANCIAL HIGHLIGHTS Selected per share historical data for each of the
Portfolios was as follows:
<TABLE>
<CAPTION>
Class A
--------------------------------------------------------------------------
Year Ended August 31 For the Year Ended October 31,
---------------------- ------------------------------------------------
ASSET ALLOCATION PORTFOLIO 1996*** 1995** 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 16.52 $ 14.44 $ 15.43 $ 14.00 $ 13.34 $ 10.72
--------- --------- --------- --------- --------- ---------
Operations:
Investment income - net............... .22 .43 .37 .42 .53 .50
Net realized and unrealized gain
(loss) on investments............... .45 2.14 (.31) 1.52 .96 2.37
--------- --------- --------- --------- --------- ---------
Total from operations................... .67 2.57 .06 1.94 1.49 2.87
--------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.25) (.40) (.33) (.51) (.82) (.25)
From net realized gains............... (.32) (.09) (.72) -- -- --
Excess distributions of net realized
gains............................... -- -- -- -- (.01) --
--------- --------- --------- --------- --------- ---------
Total distributions to shareholders..... (.57) (.49) (1.05) (.51) (.83) (.25)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 16.62 $ 16.52 $ 14.44 $ 15.43 $ 14.00 $ 13.34
--------- --------- --------- --------- --------- ---------
Total return @.......................... 4.21% 18.25% .48% 14.20% 11.55% 27.25%
Net assets end of period (000s
omitted).............................. $ 137,808 $ 132,939 $ 119,395 $ 108,488 $ 89,674 $ 27,270
Ratio of expenses to average daily net
assets................................ 1.49%* 1.57%* 1.55% 1.58% 1.58% 1.83%
Ratio of net investment income to
average daily net assets.............. 2.72%* 3.31%* 2.60% 2.90% 4.05% 4.11%
Portfolio turnover rate................. 37% 94% 94% 103% 45% 64%
Average commission rate paid............ $ 0.0731{::} -- -- -- -- --
</TABLE>
* Annualized
** Ten-month period ended August 31, 1995.
*** Six-month period ended February 29, 1996.
@ These are the total returns during the period, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
+ For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995
{::} In accordance with new SEC guidelines under the 1934 Act, beginning in
1996 average commission rate during a funds' fiscal year must be
disclosed.
<TABLE>
<CAPTION>
Class B Class C Class H
--------------------- --------------------- ---------------------
ASSET ALLOCATION PORTFOLIO 1996*** 1995+ 1996*** 1995+ 1996*** 1995+
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 16.46 $ 14.27 $ 16.41 $ 14.27 $ 16.44 $ 14.27
-------- --------- -------- --------- -------- ---------
Operations:
Investment income - net............... -- .39 -- .39 -- .39
Net realized and unrealized gain
(loss) on investments............... -- 2.26 -- 2.21 -- 2.24
-------- --------- -------- --------- -------- ---------
Total from operations................... -- 2.65 -- 2.60 -- 2.63
-------- --------- -------- --------- -------- ---------
Distributions to shareholders:
From investment income - net.......... (.21) (.37) (.21) (.37) (.21) (.37)
From net realized gains............... (.32) (.09) (.32) (.09) (.32) (.09)
Excess distributions of net realized
gains............................... -- -- -- -- -- --
-------- --------- -------- --------- -------- ---------
Total distributions to shareholders..... (.53) (.46) (.53) (.46) (.53) (.46)
-------- --------- -------- --------- -------- ---------
Net asset value, end of period.......... $ 16.55 $ 16.46 $ 16.50 $ 16.41 $ 16.54 $ 16.44
-------- --------- -------- --------- -------- ---------
Total return @.......................... 3.90% 19.00% 3.92% 18.64% 3.97% 18.86%
Net assets end of period (000s
omitted).............................. $ 2,347 $ 692 $ 1,844 $ 777 $ 8,455 $ 4,676
Ratio of expenses to average daily net
assets................................ 2.04%* 2.12%* 2.04%* 2.12%* 2.04%* 2.12%*
Ratio of net investment income to
average daily net assets.............. 2.13%* 2.51%* 2.15%* 2.52%* 2.15%* 2.54%*
Portfolio turnover rate................. 37% 94% 37% 94% 37% 94%
Average commission rate paid............ $0.0731{::} -- $0.0731{::} -- $0.0731{::} --
</TABLE>
* Annualized
** Ten-month period ended August 31, 1995.
*** Six-month period ended February 29, 1996.
@ These are the total returns during the period, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
+ For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995
{::} In accordance with new SEC guidelines under the 1934 Act, beginning in
1996 average commission rate during a funds' fiscal year must be
disclosed.
39
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
D. FINANCIAL HIGHLIGHTS (continued):
CLASS A CLASS B CLASS C CLASS H
-------- -------- -------- --------
FOR THE PERIOD FROM JANUARY 2, 1996
(COMMENCEMENT OF OPERATIONS) TO FEBRUARY 29,
1996.
--------------------------------------------
VALUE FUND 1996 1996 1996 1996
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 10.00 $ 10.00 $ 10.00 $ 10.00
-------- -------- -------- --------
Operations:
Investment income - net............... .01 .01 .01 .01
Net realized and unrealized gain
(loss) on investments............... .16 .14 .14 .15
-------- -------- -------- --------
Total from operations................... .17 .15 .15 .16
-------- -------- -------- --------
Net asset value, end of period.......... $ 10.17 $ 10.15 $ 10.15 $ 10.16
-------- -------- -------- --------
Total return @.......................... 1.70% 1.50% 1.50% 1.60%
Net assets end of period (000s
omitted).............................. $ 6,092 $ 98 $ 105 $ 280
Ratio of expenses to average daily net
assets................................ 2.11%* 2.86%* 2.86%* 2.86%*
Ratio of net investment income to
average daily net assets.............. .92%* .17%* .17%* .17%*
Portfolio turnover rate................. 18% 18% 18% 18%
Average commission rate paid............ $ 0.0469{::} $ 0.0469{::} $ 0.0469{::} $ 0.0469{::}
</TABLE>
* Annualized.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distribution without adjustment for
sales charge.
{::} In accordance with new SEC guidelines under the 1934 Act, beginning in
1996 average commission rate during a funds' fiscal year must be
disclosed.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS H
-------- -------- -------- --------
FOR THE PERIOD FROM JANUARY 2, 1996
(COMMENCEMENT OF OPERATIONS) TO FEBRUARY 29,
1996.
--------------------------------------------
GROWTH & INCOME FUND 1996 1996 1996 1996
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 10.00 $ 10.00 $ 10.00 $ 10.00
-------- -------- -------- --------
Operations:
Investment income - net............... .02 .02 .02 .02
Net realized and unrealized gain
(loss) on investments............... .14 .12 .12 .13
-------- -------- -------- --------
Total from operations................... .16 .14 .14 .15
-------- -------- -------- --------
Net asset value, end of period.......... $ 10.16 $ 10.14 $ 10.14 $ 10.15
-------- -------- -------- --------
Total return @.......................... 1.60% 1.40% 1.40% 1.50%
Net assets end of period (000s
omitted).............................. $ 1,179 $ 83 $ 124 $ 358
Ratio of expenses to average daily net
assets................................ 1.83%* 2.58%* 2.58%* 2.58%*
Ratio of net investment income to
average daily net assets.............. 2.30%* 1.55%* 1.55%* 1.55%*
Portfolio turnover rate................. 0% 0% 0% 0%
Average commission rate paid............ $ 0.0506{::} $ 0.0506{::} $ 0.0506{::} $ 0.0506{::}
</TABLE>
* Annualized.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
{::} In accordance with new SEC guidelines under the 1934 Act, beginning in
1996 average commission rate during a funds' fiscal year must be
disclosed.
40
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
D. FINANCIAL HIGHLIGHTS (continued):
Class A
--------------------------------------------------------------------------
Year Ended August 31,
--------------------------------------------------------------------------
CAPITAL FUND 1996** 1995 1994 1993 1992 1991+
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 21.22 $ 18.36 $ 18.12 $ 17.86 $ 16.50 $ 13.55
--------- --------- --------- --------- --------- ---------
Operations:
Investment income - net............... .01 .08 .07 .14 .13 .13
Net realized and unrealized gain
(loss) on investments............... .37 3.62 1.73 1.25 1.63 4.03
--------- --------- --------- --------- --------- ---------
Total from operations................... .38 3.70 1.80 1.39 1.76 4.16
--------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.04) (.08) (.12) (.09) (.11) (.18)
From net realized gains............... -- (.76) (1.44) (1.04) (.29) (1.03)
--------- --------- --------- --------- --------- ---------
Total distributions to shareholders..... (.04) (.84) (1.56) (1.13) (.40) (1.21)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 21.56 $ 21.22 $ 18.36 $ 18.12 $ 17.86 $ 16.50
--------- --------- --------- --------- --------- ---------
Total return @.......................... 1.80% 21.49% 10.56% 7.88% 10.77% 33.36%
Net assets end of period (000s
omitted).............................. $ 287,771 $ 291,263 $ 245,776 $ 246,369 $ 223,865 $ 191,390
Ratio of expenses to average daily net
assets................................ 1.20%* 1.24% 1.21% 1.22% 1.23% 1.28%*
Ratio of net investment income to
average daily net assets.............. .13%* .42% .41% .77% .72% 1.19%*
Portfolio turnover rate................. 9% 14% 41% 68% 18% 34%
Average commission rate paid............ $ 0.0682{::} -- -- -- -- --
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
* Annualized.
** Six-month period ended February 29, 1996.
*** For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
+ Nine-month period ended August 31, 1991.
{::} In accordance with new SEC guidelines under the 1934 Act, beginning in
1996 average commission rate during a funds' fiscal year must be
disclosed.
<TABLE>
<CAPTION>
Class B Class C Class H
---------------------- ---------------------- ----------------------
CAPITAL FUND 1996** 1995*** 1996** 1995*** 1996** 1995***
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 21.14 $ 18.35 $ 21.13 $ 18.35 $ 21.14 $ 18.35
--------- --------- --------- --------- --------- ---------
Operations:
Investment income - net............... .01 -- .01 -- .02 --
Net realized and unrealized gain
(loss) on investments............... .30 3.58 .29 3.57 .28 3.58
--------- --------- --------- --------- --------- ---------
Total from operations................... .31 3.58 .30 3.57 .30 3.58
--------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... -- (.03) -- (.03) -- (.03)
From net realized gains............... -- (.76) -- (.76) -- (.76)
--------- --------- --------- --------- --------- ---------
Total distributions to shareholders..... -- (.79) -- (.79) -- (.79)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 21.45 $ 21.14 $ 21.43 $ 21.13 $ 21.44 $ 21.14
--------- --------- --------- --------- --------- ---------
Total return @.......................... 1.47% 20.74% 1.42% 20.68% 1.42% 20.74%
Net assets end of period (000s
omitted).............................. $ 3,083 $ 1,527 $ 644 $ 344 $ 6,302 $ 4,052
Ratio of expenses to average daily net
assets................................ 1.95%* 1.99%* 1.95%* 1.99%* 1.95%* 1.99%*
Ratio of net investment income to
average daily net assets.............. .68%* (.36%)* .66%* (.36%)* .66%* (.37%)*
Portfolio turnover rate................. 9% 14% 9% 14% 9% 14%
Average commission rate paid............ $ 0.0682{::} -- $ 0.0682{::} -- $ 0.0682{::} --
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
* Annualized.
** Six-month period ended February 29, 1996.
*** For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
+ Nine-month period ended August 31, 1991.
{::} In accordance with new SEC guidelines under the 1934 Act, beginning in
1996 average commission rate during a funds' fiscal year must be
disclosed.
41
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
D. FINANCIAL HIGHLIGHTS (continued):
Class A
--------------------------------------------------------------------------
Year Ended August 31
--------------------------------------------------------------------------
FORTIS FIDUCIARY FUND 1996** 1995 1994 1993 1992 1991+
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period........................... $ 35.54 $ 30.23 $ 30.07 $ 28.74 $ 26.77 $ 20.27
--------- --------- --------- --------- --------- ---------
Operations:
Investment income - net.......... (.04) (.16) (.14) (.09) .04 .06
Net realized and unrealized gain
(loss) on investments.......... .77 6.68 2.99 3.11 2.68 6.48
--------- --------- --------- --------- --------- ---------
Total from operations.............. .73 6.52 2.85 3.02 2.72 6.54
--------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net..... -- -- -- -- (.11) (.02)
From net realized gains.......... (.26) (1.21) (2.69) (1.69) (.64) (.02)
--------- --------- --------- --------- --------- ---------
Total distributions to
shareholders...................... (.26) (1.21) (2.69) (1.69) (.75) (.04)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period..... $ 36.01 $ 35.54 $ 30.23 $ 30.07 $ 28.74 $ 26.77
--------- --------- --------- --------- --------- ---------
Total return @..................... 2.09% 22.71% 10.17% 10.58% 10.28% 32.23%
Net assets end of period (000s
omitted)......................... $ 69,442 $ 63,195 $ 48,833 $ 47,543 $ 43,504 $ 39,367
Ratio of expenses to average daily
net assets....................... 1.51%* 1.62% 1.45% 1.45% 1.47% 1.46%*
Ratio of net investment income to
average daily net assets......... (.25%)* (.53%) (.45%) (.31%) .14% .42%*
Portfolio turnover rate............ 13% 12% 25% 53% 26% 34%
Average commission rate paid....... $ 0.0687{::} -- -- -- -- --
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
* Annualized.
** Six-month period ended February 29, 1996.
*** For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
+ Eight-month period ended August 31, 1991
{::} In accordance with new SEC guidelines under the 1934 Act, beginning in
1996 average commission rate during a funds' fiscal year must be
disclosed.
<TABLE>
<CAPTION>
Class B Class C Class H
-------------------------- -------------------------- --------------------------
FORTIS FIDUCIARY FUND 1996** 1995*** 1996** 1995*** 1996** 1995***
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period........................... $ 35.35 $ 30.15 $ 35.40 $ 30.15 $ 35.35 $ 30.15
----------- ----------- ----------- ----------- ----------- -----------
Operations:
Investment income - net.......... (.12) (.13) (.16) (.12) (.14) (.17)
Net realized and unrealized gain
(loss) on investments.......... .71 6.54 .76 6.58 .74 6.58
----------- ----------- ----------- ----------- ----------- -----------
Total from operations.............. .59 6.41 .60 6.46 .60 6.41
----------- ----------- ----------- ----------- ----------- -----------
Distributions to shareholders:
From investment income - net..... -- -- -- -- -- --
From net realized gains.......... (.26) (1.21) (.26) (1.21) (.26) (1.21)
----------- ----------- ----------- ----------- ----------- -----------
Total distributions to
shareholders...................... (.26) (1.21) (.26) (1.21) (.26) (1.21)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period..... $ 35.68 $ 35.35 $ 35.74 $ 35.40 $ 35.69 $ 35.35
----------- ----------- ----------- ----------- ----------- -----------
Total return @..................... 1.70% 22.38% 1.73% 22.55% 1.73% 22.38%
Net assets end of period (000s
omitted)......................... $ 966 $ 473 $ 429 $ 272 $ 2,435 $ 1,481
Ratio of expenses to average daily
net assets....................... 2.26%* 2.37%* 2.26%* 2.37%* 2.26%* 2.37%*
Ratio of net investment income to
average daily net assets......... (1.01%)* (1.31%)* (1.01%)* (1.31%)* (1.01%)* (1.29%)*
Portfolio turnover rate............ 13% 12% 13% 12% 13% 12%
Average commission rate paid....... $ 0.0687{::} -- $ 0.0687{::} -- $ 0.0687{::} --
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
* Annualized.
** Six-month period ended February 29, 1996.
*** For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
+ Eight-month period ended August 31, 1991
{::} In accordance with new SEC guidelines under the 1934 Act, beginning in
1996 average commission rate during a funds' fiscal year must be
disclosed.
42
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
D. FINANCIAL HIGHLIGHTS (continued):
Class A
----------------------------------------------------------------------------
Year Ended August 31
----------------------------------------------------------------------------
GROWTH FUND 1996** 1995 1994 1993 1992 1991+
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period........................... $ 32.66 $ 26.25 $ 29.09 $ 24.31 $ 24.40 $ 17.47
--------- --------- ----------- --------- --------- ---------
Operations:
Investment income - net.......... (.06) (.04) (.10) (.06) .05 --
Net realized and unrealized gain
(loss) on investments.......... 1.34 6.95 (.88) 5.52 1.16 6.93
--------- --------- ----------- --------- --------- ---------
Total from operations.............. 1.28 6.91 (.98) 5.46 1.21 6.93
--------- --------- ----------- --------- --------- ---------
Distributions to shareholders:
From investment income - net..... -- -- -- (.04) (.02) --
From net realized gains.......... (1.71) (.50) (1.86) (.64) (1.28) --
--------- --------- ----------- --------- --------- ---------
Total distributions to
shareholders...................... (1.71) (.50) (1.86) (.68) (1.30) --
--------- --------- ----------- --------- --------- ---------
Net asset value, end of period..... $ 32.23 $ 32.66 $ 26.25 $ 29.09 $ 24.31 $ 24.40
--------- --------- ----------- --------- --------- ---------
Total return @..................... 4.38% 26.92% (3.77%) 22.69% 4.72% 39.67%
Net assets end of period (000s
omitted)......................... $ 673,520 $ 670,753 $ 558,589 $ 585,117 $ 473,258 $ 325,901
Ratio of expenses to average daily
net assets....................... 1.10%* 1.13% 1.09% 1.10% 1.13% 1.20%*
Ratio of net investment income to
average daily net assets......... (.42%)* (.13%) (.36%) (.20%) .24% (.03%)*
Portfolio turnover rate............ 12% 27% 23% 49% 33% 33%
Average commission rate paid....... $ 0.0704{::} -- -- -- -- --
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
* Annualized.
** Six-month period ended February 29, 1996.
*** For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
+ Eight-month period ended August 31, 1991.
{::} In accordance with new SEC guidelines under the 1934 Act, beginning in
1996 average commission rate during a funds' fiscal year must be
disclosed.
<TABLE>
<CAPTION>
Class B Class C Class H
-------------------------- -------------------------- --------------------------
GROWTH FUND 1996** 1995*** 1996** 1995*** 1996** 1995***
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period........................... $ 32.48 $ 25.85 $ 32.49 $ 25.85 $ 32.49 $ 25.85
----------- ----------- ----------- ----------- ----------- -----------
Operations:
Investment income - net.......... (.13) (.13) (.13) (.10) (.14) (.11)
Net realized and unrealized gain
(loss) on investments.......... 1.31 7.26 1.30 7.24 1.31 7.25
----------- ----------- ----------- ----------- ----------- -----------
Total from operations.............. 1.18 7.13 1.17 7.14 1.17 7.14
----------- ----------- ----------- ----------- ----------- -----------
Distributions to shareholders:
From investment income - net..... -- -- -- -- -- --
From net realized gains.......... (1.71) (.50) (1.71) (.50) (1.71) (.50)
----------- ----------- ----------- ----------- ----------- -----------
Total distributions to
shareholders...................... (1.71) (.50) (1.71) (.50) (1.71) (.50)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period..... $ 31.95 $ 32.48 $ 31.95 $ 32.49 $ 31.95 $ 32.49
----------- ----------- ----------- ----------- ----------- -----------
Total return @..................... 4.10% 28.17% 4.06% 28.21% 4.06% 28.21%
Net assets end of period (000s
omitted)......................... $ 4,393 $ 2,179 $ 698 $ 264 $ 13,734 $ 6,867
Ratio of expenses to average daily
net assets....................... 1.85%* 1.88%* 1.85%* 1.88%* 1.85%* 1.88%*
Ratio of net investment income to
average daily net assets......... (1.16%)* (1.09%)* (1.16%)* (1.10%)* (1.16%)* (1.10%)*
Portfolio turnover rate............ 12% 27% 12% 27% 12% 27%
Average commission rate paid....... $ 0.0704{::} -- $ 0.0704{::} -- $ 0.0704{::} --
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
* Annualized.
** Six-month period ended February 29, 1996.
*** For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
+ Eight-month period ended August 31, 1991.
{::} In accordance with new SEC guidelines under the 1934 Act, beginning in
1996 average commission rate during a funds' fiscal year must be
disclosed.
43
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
D. FINANCIAL HIGHLIGHTS (continued):
Class A
--------------------------------------------------------------------------------------
Year Ended August 31, For the Year Ended October 31,
-------------------------- --------------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO 1996*** 1995+ 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period........................... $ 30.67 $ 23.05 $ 27.38 $ 19.85 $ 19.80 $ 11.58
----------- ----------- ----------- ----------- ----------- -----------
Operations:
Investment income - net.......... (.15) (.17) (.12) (.30) (.17) (.14)
Net realized and unrealized gain
(loss) on investments.......... 2.18 7.79 (2.45) 7.83 .22 8.36
----------- ----------- ----------- ----------- ----------- -----------
Total from operations.............. 2.03 7.62 (2.57) 7.53 .05 8.22
----------- ----------- ----------- ----------- ----------- -----------
Distributions to shareholders:
From net realized gains.......... (.23) -- (1.76) -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period..... $ 32.47 $ 30.67 $ 23.05 $ 27.38 $ 19.85 $ 19.80
----------- ----------- ----------- ----------- ----------- -----------
Total return @..................... 6.68% 33.06% (9.56%) 37.93% .25% 70.98%
Net assets end of period (000s
omitted)......................... $ 107,522 $ 90,918 $ 68,352 $ 58,434 $ 43,207 $ 29,992
Ratio of expenses to average daily
net assets....................... 1.58%* 1.69%* 1.62% 1.62% 1.68% 1.82%
Ratio of net investment income to
average daily net assets......... (1.06%)* (.82%)* (.61%) (1.23%) (.88%) (.97%)
Portfolio turnover rate............ 12% 21% 36% 60% 43% 93%
Average commission rate paid....... $ 0.0634{::} -- -- -- -- --
</TABLE>
* Annualized.
** For the period from November 14, 1994 (intial offering of shares) to
August 31, 1995.
*** Six-month period ended February 29,1996.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
+ Ten-month period ended August 31, 1995.
{::} In accordance with new SEC guidelines under the 1934 Act, beginning in
1996 average commission rate during a funds' fiscal year must be
disclosed.
<TABLE>
<CAPTION>
Class B Class C Class H
------------------------ ------------------------ --------------------------
CAPITAL APPRECIATION PORTFOLIO 1996*** 1995** 1996*** 1995** 1996*** 1995**
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period........................... $ 30.57 $ 22.45 $ 30.58 $ 22.45 $ 30.58 $ 22.45
----------- --------- --------- ----------- ----------- -----------
Operations:
Investment income - net.......... (.15) (.35) (.15) (.36) (.16) (.36)
Net realized and unrealized gain
(loss) on investments.......... 2.09 8.47 2.09 8.49 2.10 8.49
----------- --------- --------- ----------- ----------- -----------
Total from operations.............. 1.94 8.12 1.94 8.13 1.94 8.13
----------- --------- --------- ----------- ----------- -----------
Distributions to shareholders:
From net realized gains.......... (.23) -- (.23) -- (.23) --
----------- --------- --------- ----------- ----------- -----------
Net asset value, end of period..... $ 32.28 $ 30.57 $ 32.29 $ 30.58 $ 32.29 $ 30.58
----------- --------- --------- ----------- ----------- -----------
Total return @..................... 6.41% 36.17% 6.41% 36.21% 6.41% 36.21%
Net assets end of period (000s
omitted)......................... $ 2,307 $ 841 $ 483 $ 227 $ 4,656 $ 2,115
Ratio of expenses to average daily
net assets....................... 2.13%* 2.24%* 2.13%* 2.24%* 2.13%* 2.24%*
Ratio of net investment income to
average daily net assets......... (1.56%)* (1.61%)* (1.58%)* (1.62%)* (1.57%)* (1.62%)*
Portfolio turnover rate............ 12% 21% 12% 21% 12% 21%
Average commission rate paid....... $ 0.0634{::} -- $ 0.0634{::} -- $ 0.0634{::} --
</TABLE>
* Annualized.
** For the period from November 14, 1994 (intial offering of shares) to
August 31, 1995.
*** Six-month period ended February 29,1996.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
+ Ten-month period ended August 31, 1995.
{::} In accordance with new SEC guidelines under the 1934 Act, beginning in
1996 average commission rate during a funds' fiscal year must be
disclosed.
44
<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, 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,
TIME INSURANCE COMPANY
Edward M. Mahoney PRIOR TO JANUARY, 1995, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER, FORTIS
ADVISERS, INC. AND
FORTIS INVESTORS, INC.
Robb L. Prince PRIOR TO JULY, 1995, VICE PRESIDENT AND
TREASURER,
JOSTENS, INC.
Leonard J. Santow PRINCIPAL, GRIGGS & SANTOW, 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
Charles J. Dudley
VICE PRESIDENT
Thomas D. Gualdoni
VICE PRESIDENT
Maroun M. Hayek
VICE PRESIDENT
Howard G. Hudson
VICE PRESIDENT
Robert C. Lindberg
VICE PRESIDENT
Larry A.Medin
VICE PRESIDENT
Kevin J. Michels
VICE PRESIDENT
Jon H. Nicholson
VICE PRESIDENT
Fred Obser
VICE PRESIDENT
Dennis M. Ott
VICE PRESIDENT
David A. Peterson
VICE PRESIDENT
Nicholas L. M. de Peyster
VICE PRESIDENT
Stephen M. Poling
VICE PRESIDENT
Stephen M. Rickert
VICE PRESIDENT
Richard P. Roche
VICE PRESIDENT
Anthony J. Rotondi
VICE PRESIDENT
Rhonda J. Schwartz
VICE PRESIDENT
Keith R. Thomson
VICE PRESIDENT
Christopher J. Woods
VICE PRESIDENT
Gary N. Yalen
VICE PRESIDENT
Michael J. Radmer
SECRETARY
Tamara L. Fagely
TREASURER
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 Norwest Bank Minnesota, N.A.
MINNEAPOLIS, MINNESOTA
GENERAL COUNSEL Dorsey & Whitney P.L.L.P.
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.
45
<PAGE>
FORTIS FINANCIAL GROUP
Fortis Financial Group (FFG) is a premier provider of insurance and
investment portfolios whose fund manager, Fortis Advisers, Inc. has
established a nationwide reputation for money management. Through Fortis
Investors, Inc., FFG offers mutual funds, annuities and life insurance. Life
insurance products are issued and underwritten by Fortis Benefits Insurance
Company and Time Insurance Company.
FFG is part of Fortis, Inc., a financial services company that owns or
manages approximately $11 billion* in assets. Fortis, Inc. is part of Fortis,
a wordwide group of companies active in the fields of insurance, banking and
investments with assets in excess of $140 billion.* Fortis is jointly owned
by Fortis AMEV of The Netherlands and Fortis AG of Belgium.
Like the Fortis name, which comes from the Latin for steadfast, our focus is
on the long-term in all we do: the relationships we build, the performance we
seek, the service we provide and the products we offer.
*Assets as of 12/31/95
[LOGO]
Fortis Financial Group
P.O. Box 64284
St. Paul, MN 55164
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Bulk Rate
US Postage
PAID
Permit No. 3794
Minneapolis, MN
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PRINTED ON RECYCLED PAPER WITH
[LOGO] 40% PRECONSUMER WASTE AND
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PLEASE RECYCLE.
98356 (Ed. 4/96)
