<PAGE>
[LOGO]
[PHOTO]
INVEST FOR GROWTH
OPPORTUNITIES . . .
FORTIS
STOCK FUNDS
SEMI-ANNUAL REPORT
FEBRUARY 28, 1997
<PAGE>
CONTENTS
LETTER TO SHAREHOLDERS 1
SCHEDULE OF INVESTMENTS
FORTIS ASSET ALLOCATION PORTFOLIO 10
FORTIS VALUE FUND 16
FORTIS GROWTH AND INCOME FUND 18
FORTIS CAPITAL FUND 20
FORTIS FIDUCIARY FUND 22
FORTIS GROWTH FUND 24
FORTIS CAPITAL APPRECIATION PORTFOLIO 26
STATEMENTS OF ASSETS AND LIABILITIES 28
STATEMENTS OF OPERATIONS 30
STATEMENTS OF CHANGES IN NET ASSETS
FORTIS ASSET ALLOCATION PORTFOLIO 32
FORTIS VALUE FUND 33
FORTIS GROWTH AND INCOME FUND 34
FORTIS CAPITAL FUND 35
FORTIS FIDUCIARY FUND 36
FORTIS GROWTH FUND 37
FORTIS CAPITAL APPRECIATION PORTFOLIO 38
NOTES TO FINANCIAL STATEMENTS 39
BOARD OF DIRECTORS & OFFICERS 47
PRODUCTS & SERVICES 48
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 28, 1997
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS H CLASS Z
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
FORTIS ASSET ALLOCATION
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 16.48 $ 16.40 $ 16.35 $ 16.39 $ --
End of period.............................. $ 17.14 $ 17.05 $ 16.99 $ 17.04 $ --
TOTAL RETURN 11.39% 11.11% 11.08% 11.12% --
DISTRIBUTIONS PER SHARE
From net investment income................. $ 0.23 $ 0.188 $ 0.188 $ 0.188 $ --
From net realized gains on investments..... $ 0.95 $ 0.95 $ 0.95 $ 0.95 $ --
FORTIS VALUE FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 10.75 $ 10.70 $ 10.70 $ 10.70 $ --
End of period.............................. $ 12.26 $ 12.20 $ 12.20 $ 12.20 $ --
TOTAL RETURN 16.76% 16.40% 16.40% 16.40% --
DISTRIBUTIONS PER SHARE
From net investment income................. $ 0.059 $ 0.025 $ 0.025 $ 0.025 $ --
From net realized gains on investments..... $ 0.214 $ 0.214 $ 0.214 $ 0.214 $ --
FORTIS GROWTH AND INCOME FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 10.35 $ 10.32 $ 10.33 $ 10.33 $ --
End of period.............................. $ 12.09 $ 12.05 $ 12.06 $ 12.06 $ --
TOTAL RETURN 18.44% 18.04% 18.03% 18.03% --
DISTRIBUTIONS PER SHARE
From net investment income................. $ 0.053 $ 0.02 $ 0.02 $ 0.02 $ --
From net realized gains on investments..... $ 0.103 $ 0.103 $ 0.103 $ 0.103 $ --
FORTIS CAPITAL FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 21.89 $ 21.69 $ 21.68 $ 21.69 $ --
End of period.............................. $ 22.03 $ 21.73 $ 21.72 $ 21.73 $ --
TOTAL RETURN 13.46% 13.05% 13.06% 13.06% --
DISTRIBUTIONS PER SHARE
From net investment income................. $ 0.0114 $ -- $ -- $ -- $ --
From net realized gains on investments..... $ 2.73 $ 2.73 $ 2.73 $ 2.73 $ --
FORTIS FIDUCIARY FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 36.75 $ 36.26 $ 36.32 $ 36.26 $ --
End of period.............................. $ 38.56 $ 37.87 $ 37.88 $ 37.87 $ --
TOTAL RETURN 12.86% 12.48% 12.31% 12.48% --
DISTRIBUTIONS PER SHARE
From net realized gains on investments..... $ 2.88 $ 2.88 $ 2.88 $ 2.88 $ --
FORTIS GROWTH FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 32.14 $ 31.75 $ 31.75 $ 31.75 $ 32.18
End of period.............................. $ 32.19 $ 31.63 $ 31.63 $ 31.63 $ 32.27
TOTAL RETURN 9.55% 9.11% 9.11% 9.11% 9.66%
DISTRIBUTIONS PER SHARE
From net realized gains on investments..... $ 3.07 $ 3.07 $ 3.07 $ 3.07 $ 3.07
FORTIS CAPITAL APPRECIATION
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 34.76 $ 34.46 $ 34.48 $ 34.48 $ --
End of period.............................. $ 27.41 $ 27.09 $ 27.11 $ 27.11 $ --
TOTAL RETURN (17.49%) (17.71%) (17.70%) (17.70%) --
DISTRIBUTIONS PER SHARE
From net realized gains on investments..... $ 1.45 $ 1.45 $ 1.45 $ 1.45 $ --
</TABLE>
<PAGE>
Photo
DEAR SHAREHOLDER:
We are pleased to present to you the semi-annual reports for the Fortis Stock
Funds. These include the Asset Allocation Portfolio, Value Fund, Growth & Income
Fund, Capital Fund, Fiduciary Fund, Growth Fund, and Capital Appreciation
Portfolio, for the period ended February 28, 1997.
MARKET REVIEW AND OUTLOOK
After a market correction in mid-1996, the stock market has moved steadily
higher, reflecting the environment of low inflation and a moderately growing
economy. The market gained momentum from last fall's election results (which
continued the divided government rule) and from generally robust earnings
reports. Only a note of caution from Federal Reserve Chairman Alan Greenspan, as
he warned of potential rate increases, seemed to temper investors who poured
assets into the stock market at a record pace.
Indeed, the Federal Reserve did increase interest rates at their March meeting.
The stock market could experience corrections in the period ahead if the Federal
Reserve makes further proactive moves on interest rates and/or the pace of
economic activity slows. Interest rates have edged higher on the expectation
that Mr. Greenspan's comments could produce a series of rate hikes. The pace of
future economic growth will likely set the Federal Reserve's course, signs of a
slowing economy may preclude the shift to an overly restrictive stance.
MARKET VALUATIONS
By most traditional measures, the stock market is on the high side of historical
valuations. However, in comparison to other low inflationary periods, current
market valuations of earnings are well within historical parameters. This
explains why inflation trends are important to the market's valuation of
earnings; low inflation is a key underpin of the market's lofty valuation level.
Strength in the U.S. dollar has perhaps helped the stock market as well.
However, persistent strength could lead to weakening exports and a possible slow
down in earnings. The market's valuation may also be benefiting from an expected
capital gains tax reduction. Prospects of this year's tax bill will undoubtedly
be watched closely by investors.
U.S. ECONOMY -- STRONG AND COMPETITIVE
The American economy has returned to a position of dominance compared to others
around the world. A long period of cost reductions and restructuring has allowed
American business to again be a powerful world competitor. The widespread
application of technology throughout U.S. industry has only enhanced this
position.
Globally, economies are increasingly integrated and this trend rewards low-cost
producers. This globalization has had a powerful influence on world-wide
inflationary trends, keeping price inflation at bay. Continued progress in
globalization and the penetration of the benefits of technology should produce
further benefits for economies world-wide.
CONTINUED VOLATILITY LIKELY
Despite this optimistic long-term outlook, current market valuations may
contribute to continued volatility. Recent market returns have been
substantially above long-term averages. History would dictate that there will be
some return toward the mean.
Investors' interest in market indices (such as the S & P 500 and the Dow Jones
Industrial Average) has driven these popular market averages up significantly.
Unfortunately, this leaves individually promising stocks behind. Going forward,
the market seems more likely to reward specific companies with good growth
prospects, increasing the value of stock selection.
1
<PAGE>
We at Fortis specialize in finding just such
companies: companies with exceptional growth
prospects and management teams who can realize those
prospects. Growth companies should perform well in a
moderately growing economy, particularly as
valuations for growth stocks have remained favorable
compared to overall market valuations.
The following pages give you a closer look at each of
the Fortis Stock Funds. As always, we appreciate your
investment with Fortis, and thank you for your
continued support. If we can help you further
simplify your financial life, please contact your
financial professional or your Fortis shareholder
services representative.
Sincerely,
<TABLE>
<S> <C> <C>
[SIGNATURE] [SIGNATURE] [SIGNATURE]
Dean C. Kopperud James S. Byrd Howard H. Hudson
President Vice President Vice President
</TABLE>
March 28, 1997
2
<PAGE>
PORTFOLIO ALLOCATION AS OF 2/28/97
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Common Stocks 59.3%
U.S. Government Securities 11.4%
Asset Backed Securities 10.7%
Corporate Bonds-Investment Grade 8.8%
Corporate Bonds-Non-Investment Grade 6.1%
Cash Equivalents/Receivables 3.7%
</TABLE>
TOP 10 HOLDINGS AS OF 2/28/97
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. MBNA Corp. 2.0%
2. Microsoft Corp. 1.9%
3. American International Group, Inc. 1.9%
4. WorldCom, Inc. 1.8%
5. Federal National Mortgage Association 1.7%
6. Green Tree Financial Corp. 1.5%
7. Philip Morris Companies, Inc. 1.4%
<CAPTION>
Bonds
- -------------------------------------------------------------------
<C> <S> <C>
1. FNMA (7.00%) 2025 2.2%
2. FNMA (6.50%) 2010 1.5%
3. Oakwood Mtg (7.10%) 2020 1.4%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +11.34% +14.96%
Class B sharesDiamond Diamond +7.74% +12.26%
Class C sharesDiamond +11.31% +14.80%
Class C sharesDiamond Diamond +10.31% +14.80%
Class H sharesDiamond +11.35% +14.93%
Class H sharesDiamond Diamond +7.75% +12.23%
</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% if redeemed within two years or 3.00% if redeemed in year
three or four (with a waiver of 10% of the amount invested). Class C has a CDSC
of 1.00% if redeemed within one year of purchase.
Diamond Without CDSC.
Diamond Diamond With CDSC. Assumes redemption on February 28, 1997.
+ Since November 14, 1994 -- Date shares were first offered to
the public
FORTIS ASSET ALLOCATION PORTFOLIO
YOUR ASSET ALLOCATION PORTFOLIO
STOCKS, BONDS AND CASH BLENDED TO SMOOTH OUT THE HIGHS AND LOWS
The Asset Allocation Portfolio adjusts its weightings between stocks and bonds
as economic and market conditions warrant. For the first half of the fiscal year
ended February 28, 1997, the assets in stock were increased from a 50% to 60%
weighting. Also during this period, the portfolio had a total return of 11.39%,
which compares to an S&P 500 Index return of 22.58% and a 5.38% return for the
Lehman Brothers Aggregate Bond Index.
EQUITY STOCK DIVERSIFICATION CONTINUES
Our equity focus in the Asset Allocation Portfolio continues to be on
diversification. Throughout 1996 this was achieved primarily through the
addition of new holdings. The technology sector was reduced in favor of
additions to the financial, health care and energy holdings.
While valuations appear high, the strength and versatility of the American
economy continues to provide tremendous support for the stock market. Favorable
inflationary numbers have kept interest rates moderately low.
BOND MARKET A CYCLICAL STORY
The bond portion of the fund started 1996 with a positive outlook for interest
rates. This view was based on weak economic numbers and the Federal Reserve's
apparent willingness to lower short-term interest rates. These favorable views
vanished quickly, however, when little progress was made on the deficit and
February employment statistics were released.
Bonds continued to trend lower throughout the first half of 1996. Early in the
fourth quarter, however, economic indicators suggested that the economy was
slowing and the bond market rallied, only to reverse course once again to end
the year with slightly higher yields. In general, the market ended the year up
just a bit from where it began.
With preemptive action by the Federal Reserve always a possibility, we will
continue to be alert to trends in the U.S. economy and their impact on the fixed
income and equity markets. If moderate economic growth and subdued inflation
continues, a higher stock to bond relationship in the portfolio will also
remain.
VALUE OF $10,000 INVESTED JANUARY 4, 1988
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Lehman Brothers Asset Allocation Portfolio
<S> <C> <C> <C>
Aggregate Bond Index# S&P 500## Class A
1/4/88 10,000 10,000 9,534
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
97 21,951 42,007 25,277
Fortis Advantage Asset Allocation Portfolio
Average Annual Total Return
Since
1 Year 5 Year 1/4/1988@
Class A* +6.64% +9.38% +10.66%
Class A** +11.96% +10.45% +11.25%
</TABLE>
Annual period ended February 28
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, those figures do not represent actual
performance that would have been acheived 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.
PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/28/97
<TABLE>
<S> <C> <C>
STOCK ADDITIONS: Lily (Eli) & Co., Inc. Union Planters Corp.
AES Corp. Lowe's Companies, Inc. U.S. Filter Corp.
Camco International, Inc. MGIC Investment Corp. U.S.A. Waste Services,
Centocor, Inc. Monsanto Co. Inc.
Crown Cork & Seal Company, Noble Affiliates, Inc. Warner-Lambert Co.
Inc. Precision Drilling Corp. STOCK ELIMINATIONS:
Depuy, Inc. Santa Fe Energy Resources, Boatmens Bancshares, Inc.
Deutsche Telekom Inc. Computer Associates
Fiserv, Inc. Staples, Inc. International, Inc.
Fluor Corp. Sterling Commerce, Inc. Scholastic Corp.
Forest Laboratories, Inc. Telebras Solectron Corp.
Ingram Micro, Inc. Teva Pharmaceutical Industries Wal-Mart Stores, Inc.
Ltd.
</TABLE>
3
<PAGE>
COMPOSITION BY INDUSTRY AS OF 2/28/97
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 40.2%
Cash Equivalents/Receivables 7.1%
Retail-Specialty 4.0%
Food 6.0%
Banks 7.7%
Utilities-Telephone 3.9%
Chemicals-Specialty 3.9%
Office Equipment and Supplies 4.9%
Oil-Refining 5.2%
Electronic-Semiconductor 4.4%
Drugs 5.3%
Oil-Crude Petroleum and Gas 3.6%
Telecommunications 3.8%
</TABLE>
TOP 10 HOLDINGS AS OF 2/28/97
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Atlantic Richfield Co. 2.4%
2. General Electric Co. 2.2%
3. Pitney Bowes, Inc. 2.1%
4. SBC Communications, Inc. 2.1%
5. Lowe's Companies, Inc. 2.1%
6. Johnson & Johnson 2.1%
7. ConAgra, Inc. 2.1%
8. Philip Morris Companies, Inc. 2.0%
9. Finova Group, Inc. 2.0%
10. Sysco Corp. 2.0%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +22.71% +20.80%
Class B sharesDiamond Diamond +19.11% +17.20%
Class C sharesDiamond +22.71% +20.80%
Class C sharesDiamond Diamond +21.71% +20.80%
Class H sharesDiamond +22.59% +20.80%
Class H sharesDiamond Diamond +18.99% +17.20%
</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% if redeemed within two years of purchase, or 3.00% if
redeemed in year three or four (with a waiver of 10% of the amount invested).
Class C has a CDSC of 1.00% if redeemed within one year of purchase.
Diamond Without CDSC.
Diamond Diamond With CDSC. Assumes redemption on February 28, 1997.
+ Shares were first offered to the public January 2, 1996.
FORTIS VALUE FUND
YOUR VALUE FUND
QUALITY STOCKS, INEXPENSIVELY PRICED
For the first half of the fiscal year ended February 28, 1997, the Fortis Value
Fund showed a total return of 16.76%. This performance trailed slightly the
Lipper Growth & Income Index, which returned 18.65% and the S&P 500 Index which
had a return of 22.58%.
AN ALTERNATIVE TO THE TREND
In the last six months, the common shares of financial, "blue chip" growth, and
technology companies dominated the performance of the stock market. The stocks
performed well for reasons unique to each of the three groups:
- -Financials because they have relatively low valuations;
- -"Blue chip" growth because investors prefer a track record of consistent growth
of earnings;
- -Technology because they have the highest growth rates.
In contrast, cyclical stocks (retail, chemicals and capital goods) and smaller
capitalization common shares (companies under $1 billion in net worth) performed
poorly because investors have become concerned that the business cycle is
maturing.
Your fund has adopted an alternative course with respect to the trends in the
stock market. We have maintained below average weighting in financial stocks
because we believe that their corporate profits are probably close to a peak
compared to other alternatives. Similarly, we have been cautious in our
investments in the very popular technology sector. We feel that some technology
companies, after so many years of strong corporate profitability and stock price
performance, probably will face an increasingly difficult environment in the
years ahead. Of course, not all technology companies will suffer. Technology
companies with niche products could prosper. Our reluctance to join in the
"hoopla" in financials and technology hurt the fund's performance somewhat, but
we feel strongly that our decision will prove wise over the next few years.
FOCUS ON CONSISTENT EARNINGS GROWTH
Looking forward, our main concern is that profit margins are near their peak for
the business cycle. With profit margins in the next few years more likely to
decline than to rise, growing companies will probably become scarce. In this
environment, we are finding it increasingly difficult to identify companies that
satisfy our primary "buy criteria" of having accelerated earnings growth over
the next few years. This will force us to rely more heavily on our secondary
criteria of finding companies that are priced reasonably in relation to their
long-term growth rates. As a result, our disciplines have led us to invest more
heavily in companies with track records of growing earnings consistently.
VALUE OF $10,000 INVESTED JANUARY 2, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FORTIS VALUE FUND
<S> <C> <C>
S&P 500*** Class A
1/2/96 10,000 9,525
96 10,442 9,687
97 13,115 11,955
Fortis Value Fund
Average Annual Total Return
Since
1 Year January 2, 1996@
Class A* +17.55% +16.62%
Class A** +23.41% +21.61%
</TABLE>
Annual period ended February 28
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.
PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/28/97
<TABLE>
<S> <C> <C>
ADDITIONS: IMC Global, Inc. ELIMINATIONS:
Abbott Laboratories Intel Corp. AT & T Corp.
Ameritech Corp. International Game Technology Developers Diversified Realty Corp.
Archer-Daniels-Midland Co. Johnson & Johnson Federal Express Corp.
Automatic Data Processing, Inc. Kimberly-Clark Corp. Flightsaftey International, Inc.
AutoZone, Inc. McGraw Hill Companies, Inc. Home Depot, Inc.
Baxter International, Inc. Mobil Corp. H&R Block, Inc.
Cabot Corp. Nynex Corp. Kimco Realty Corp.
Chase Manhattan Corp. Pall Corp. Lyondell Petrochemical Co.
Corning, Inc. Pfizer, Inc. May Department Stores Co.
Crown Cork & Seal Company, Inc. Phillip Morris Companies, Inc. McDonnell Douglas Corp.
Dun & Bradstreet Corp. Royal Dutch Petroleum Co. Mylan Laboratories, Inc.
Enron Corp. Santa Fe Energy Resources, Inc. Payless ShoeSource, Inc.
Exxon Corp. SBC Communications, Inc. Solectron Corp.
Finova Group, Inc. Sherwin-Williams Co. Tele-Communications, Inc.
First Bank System, Inc. Sprint Corp. Unifi, Inc.
Fiserv, Inc. Sterling Software, Inc.
Grainger (W.W.), Inc. Unisource Worldwide, Inc.
</TABLE>
4
<PAGE>
COMPOSITION BY INDUSTRY AS OF 2/28/97
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 23.9%
Cash Equivalents/Receivables 19.9%
Drugs 8.7%
Finance Services 8.2%
Natural Gas Transmissions 7.2%
Utilities-Telephone 6.8%
Oil-Crude Petroleum and Gas 5.8%
Real Estate Investment Trust 5.6%
Banks 4.3%
Food 3.4%
Insurance 3.3%
Tobacco 2.9%
</TABLE>
TOP 10 HOLDINGS AS OF 2/28/97
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Sunamerica, Inc. 2.2%
2. Lilly (Eli) & Co., Inc. 2.0%
3. Beacon Properties Corp. 1.9%
4. Banc One Corp. 1.8%
5. United Technologies Corp. 1.8%
6. El Paso Natural Gas Co. 1.8%
7. Merck & Co., Inc. 1.8%
8. Chase Manhattan Corp. 1.7%
9. Heinz (H.J.) 1.7%
<CAPTION>
Bonds
- -------------------------------------------------------------------
<C> <S> <C>
1. USA Waste Services, Inc. (4.00%) 2002 1.8%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +20.55% +18.87%
Class B sharesDiamond Diamond +16.95% +15.27%
Class C sharesDiamond +20.65% +18.95%
Class C sharesDiamond Diamond +19.65% +18.95%
Class H sharesDiamond +20.53% +18.95%
Class H sharesDiamond Diamond +16.93% +15.35%
</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% if redeemed within two years of purchase, or 3.00% if
redeemed in year three or four (with a waiver of 10% of the amount invested).
Class C has a CDSC of 1.00% if redeemed within one year of purchase.
Diamond Without CDSC.
Diamond Diamond With CDSC. Assumes redemption on February 28, 1997.
+ Shares were first offered to the public January 2, 1996.
FORTIS GROWTH & INCOME FUND
YOUR GROWTH & INCOME FUND
CONSERVATIVE GROWTH WITH QUARTERLY DIVIDENDS
The Growth & Income Fund, which focuses on dividend-paying companies with
earnings growth potential, is well diversified with exposure to most economic
sectors. The portfolio is comprised of more mature companies, which generally
share their earnings growth with shareholders through dividend increases.
Currently, larger concentrations may be found in the energy, financial and
healthcare sectors.
For the first half of the fiscal year ended February 28, 1997, the Fortis Growth
& Income Fund had a total return of 18.44%. This compares to the S&P 500 Index
return of 22.58% during the same period. The Index's strength can in part be
attributed to a strong rebound in technology stocks from summer lows. The Growth
& Income Fund is basically precluded from this sector due to the general lack of
yields available on technology stocks.
Concerns about the U.S. economy and the Federal Reserve's response to it have
raised investor caution levels. Due to a robust market over the past several
years, yields have fallen to near historic lows. The challenge in the period
ahead is to identify growth situations with current yields meeting our criteria.
VALUE OF $10,000 INVESTED JANUARY 2, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FORTIS GROWTH & INCOME FUND
<S> <C> <C>
S&P 500*** Class A
1/2/96 10,000 9,525
96 10,442 9,677
97 13,115 11,745
Fortis Growth & Income Fund
Average Annual Total Return
Since
1 Year January 2, 1996@
Class A* +15.60% +14.85%
Class A** +21.36% +19.76%
</TABLE>
Annual period ended February 28
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.
PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/28/97
<TABLE>
<S> <C> <C>
ADDITIONS: Excel Realty Trust, Inc. ELIMINATIONS:
Baker Hughes, Inc. Genuine Parts Co. AT & T Corp.
Beacon Properties Corp. Highwoods Properties, Inc. Boatmens Bancshares, Inc.
Chase Manhattan Corp. Knightsbridge Tankers Ltd. H&R Block, Inc.
Crescent Real Estate Equities Trust Monterey Resources, Inc. Mercury Finance Co.
Crown Cork & Seal Company, Inc. Nuevo Energy Co. New England Business Service, Inc.
Deutsche Telekom Spieker Properties, Inc.
SunAmerica, Inc.
Union Planters corp.
</TABLE>
5
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/28/97
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 37.9%
Finance Services 10.9%
Retail-Specialty 10.4%
Computer-Software 7.8%
Cash Equivalents/Receivables 7.2%
Health Care Services 6.5%
Medical Technology 5.1%
Telephone Services 5.9%
Business Services 4.2%
Telecommunication Equipment 4.1%
</TABLE>
TOP 10 HOLDINGS AS OF 2/28/97
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Federal National Mortgage Association 3.3%
2. WorldCom, Inc. 3.3%
3. MBNA Corp. 3.3%
4. Microsoft Corp. 3.2%
5. American International Group, Inc. 3.2%
6. Kohl's Corp. 2.8%
7. Home Depot, Inc. 2.7%
8. Green Tree Financial Corp. 2.6%
9. Tellabs, Inc. 2.5%
10. Medtronic, Inc. 2.2%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +14.31% +15.82%
Class B sharesDiamond Diamond +10.71% +13.12%
Class C sharesDiamond +14.38% +15.80%
Class C sharesDiamond Diamond +13.38% +15.80%
Class H sharesDiamond +14.37% +15.82%
Class H sharesDiamond Diamond +10.77% +13.12%
</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% if redeemed within two years of purchase, or 3.00% if
redeemed in year three or four (with a waiver of 10% of the amount invested).
Class C has a CDSC of 1.00% if redeemed within one year of purchase.
Diamond Without CDSC.
Diamond Diamond With CDSC. Assumes redemption on February 28, 1997.
+ Since November 14, 1994 -- Date shares were first offered to
the public
FORTIS CAPITAL FUND
YOUR CAPITAL FUND
LONG-TERM GROWTH THROUGH LARGER, ESTABLISHED COMPANIES
The Capital Fund continues to focus on rapidly growing companies with
established positions within their business sector. In an effort to moderate the
risk level of the portfolio, our investment emphasis has shifted toward a
broader diversification of the large capitalization companies. As a result, a
number of new names have been added, and several new sector concentrations
established. New purchases include the energy, healthcare and financial sectors.
We've reduced our technology holdings significantly. Despite the reduction,
however, technology stocks are still well represented within the portfolio.
U.S. ECONOMY REMAINS STRONG
While valuations appear high, the strength and versatility of the American
economy continues to provide tremendous support for the stock market.
Productivity remains high, enhanced by the increasing use of technology across
all industries.
For the first half of the fiscal year ended February 28, 1997, the Capital Fund
provided a total return of 13.46%. The S&P 500 Index returned 22.58%. Very large
capitalization companies (that are larger than the fund's target companies)
positively influenced the Index's performance throughout the past year. We
anticipate a broadening of the market's leadership, however, as currently
underappreciated growth opportunities are uncovered by investors.
VALUE OF $10,000 INVESTED MARCH 1, 1972
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** CAPITAL FUND CLASS A
<S> <C> <C> <C> <C>
03/01/72 10,000 8,659
73 10,781 9,752
74 9,606 8,327
75 8,540 7,522
76 10,863 9,050
77 11,318 9,053
78 10,376 8,404
79 12,101 10,178
80 15,064 14,618
81 18,295 20,236
82 16,635 20,690
83 22,974 31,073
84 25,474 32,385
85 30,751 37,725
86 40,241 51,349
87 52,098 67,242
88 50,672 59,930
89 56,690 63,264
90 67,365 76,559
91 77,241 88,147
92 89,573 112,401
93 99,057 113,449
94 107,320 126,210
95 115,245 131,411
96 155,241 162,100
97 194,977 186,745
Fortis Capital Fund
Average Annual Total Return
1 Year 5 Year 10 Year 25 Years
Class A* +9.73% +9.61% +10.22% +12.42%
Class A** +15.20% +10.69% +10.75% +12.64%
</TABLE>
Annual period ended February 28
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, those figures do not represent actual
performance that would have been acheived 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 500 common stocks.
PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/28/97
<TABLE>
<S> <C> <C>
ADDITIONS: MGIC Investments Corp. ELIMINATIONS:
AES Corp. Monsanto Co. Computer Associates International,
Camco International, Inc. Noble Affiliates, Inc. Inc.
Centocor, Inc. Precision Drilling Corp. News Corp., Ltd.
Crown Cork & Seal Company, Inc. Santa Fe Energy Resources, Inc. Scholastic Corp.
Depuy, Inc. Staples, Inc. Wal-Mart Stores, Inc.
Fiserv, Inc. Sterling Commerce, Inc.
Fluor Corp. Telebras
Forest Laboratories, Inc. Teva Pharmaceutical Industries Ltd.
Ingram Micro, Inc. U.S. Filter Corp.
Lowe's Companies, Inc. U.S.A. Waste Servies, Inc.
Warner-Lambert Co.
</TABLE>
6
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/28/97
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 33.2%
Finance Services 11.1%
Retail-Specialty 9.9%
Computer-Software 8.9%
Cash Equivalents/Receivables 4.2%
Health Care Services 6.2%
Telephone Services 6.0%
Medical Technology 4.9%
Business Services 4.1%
Telecommunication Equipment 3.9%
Electronic-Semiconductor 3.8%
Hotel and Gaming 3.8%
</TABLE>
TOP 10 HOLDINGS AS OF 2/28/97
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. MBNA Corp. 3.3%
2. WorldCom, Inc. 3.2%
3. American International Group, Inc. 3.2%
4. Microsoft Corp. 3.2%
5. Federal National Mortgage Association 3.0%
6. Home Depot, Inc. 2.7%
7. Green Tree Financial Corp. 2.4%
8. Tellabs, Inc. 2.3%
9. Medtronic, Inc. 2.2%
10. Intel Corp. 2.1%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +14.30% +16.62%
Class B sharesDiamond Diamond +10.70% +13.92%
Class C SharesDiamond +14.13% +16.62%
Class C SharesDiamond Diamond +13.13% +16.62%
Class H sharesDiamond +14.27% +16.62%
Class H sharesDiamond Diamond +10.67% +13.92%
</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% if redeemed within two years of purchase or or 3.00% if
redeemed inyear three or four (with a waiver of 10% of the amount invested).
Class C has a CDSC of 1.00% if redeemed within one year of purchase.
Diamond Without CDSC.
Diamond Diamond With CDSC. Assumes redemption on February 28, 1997.
+ Since November 14, 1994 -- Date shares were first offered to
the public
FORTIS FIDUCIARY FUND
YOUR FIDUCIARY FUND
A MEDLEY OF GROWTH STOCKS
The Fiduciary Fund invests in a mix of medium and large capitalization growth
companies. Companies selected for this portfolio have leading positions in their
respective field and earnings growth rates substantially above average. While we
have emphasized somewhat larger capitalization companies in our recent
purchases, we continue to diversify across many economic sectors. Over the
period in review, our holdings within the technology sector have been reduced.
High valuations and concerns over persistency in the growth rate makes this
sector somewhat vulnerable to profit taking. Currently, larger concentrations
may be found in the energy, financial and healthcare sectors.
U.S. ECONOMY REMAINS STRONG
While valuations appear high, the strength and versatility of the American
economy continues to provide tremendous support for the stock market. Favorable
inflationary numbers have kept interest rates moderately low. Productivity
remains high, enhanced by the increasing use of technology across all
industries. For the first half of the fiscal year ended February 28, 1997, the
Fiduciary Fund provided a return of 12.86%. The S&P 500 Index return was 22.58%
during the same period. Very large capitalization stocks (that are larger than
the fund's target companies) continued to positively influence the Index's
performance throughout the past year. We anticipate a broadening of the market's
leadership, however, as currently underappreciated growth opportunities are
uncovered by investors.
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> <C> <C>
1/2/82 10,000 9,430
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 37,797 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
97 109,397 91,666
Fortis Fiduciary Fund
Average Annual Total Return
Since
1 Year 5 Year 10 Year Inception
Class A* +9.71% +9.73% +10.09% +15.74%
Class A** +15.18% +10.80% +10.62% +16.11%
</TABLE>
Annual period ended February 28
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, those figures do not represent actual
performance that would have been acheived 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 500 common stocks.
PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/28/97
<TABLE>
<S> <C> <C>
ADDITIONS: Ingram Micro, Inc. ELIMINATIONS:
AES Corp. Lowe's Companies, Inc. Cascade Communications Corp.
Camco International, Inc. MGIC Investment Corp. Computer Associates International,
Centocor, Inc. Monsanto Co. Inc.
Central European Media Enterprises Noble Affiliates, Inc. News Corp., Ltd.
Ltd. Percision Drilling Corp. Promus Hotel Corp.
Crown Cork & Seal Company, Inc. Santa Fe Energy Resources, Inc. Scholastic Corp.
Depuy, Inc. Sterling Commerce, Inc. Wal-Mart Stores, Inc.
Emergent Group, Inc. Telebras
Falcon Drilling Co. Ultrafem, Inc.
Fiserv, Inc. U.S. Filter Corp.
Fluor Corp. U.S.A. Waste Services, Inc.
Forest Laboratories, Inc. Warner-Lambert Co.
</TABLE>
7
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/28/97
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 23.0%
Computer-Software 14.2%
Finance Services 11.8%
Retail-Specialty 8.0%
Computer-Communications Equipment 7.8%
Health Care Services 7.8%
Telecommunication-Equipment 7.4%
Cash Equivalents/Receivables 6.4%
Telephone Services 5.6%
Machinery-Oil and Well 4.4%
Restaurants and Franchising 3.6%
</TABLE>
TOP 10 HOLDINGS AS OF 2/28/97
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. WorldCom, Inc. 5.1%
2. Cisco Systems, Inc. 3.3%
3. Tellabs, Inc. 3.1%
4. Microsoft Corp. 3.1%
5. Oracle Corp. 3.0%
6. Parametric Technology Corp. 2.8%
7. BMC Software, Inc. 2.7%
8. Franklin Resources, Inc. 2.5%
9. Petroluem Geo-Services ADR 2.3%
10. CUC International, Inc. 2.1%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +8.43% +17.47%
Class B sharesDiamond Diamond +4.83% +14.77%
Class C SharesDiamond +8.43% +17.47%
Class C SharesDiamond Diamond +7.43% +17.47%
Class H sharesDiamond +8.43% +17.47%
Class H sharesDiamond Diamond +4.83% +14.77%
</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% if redeemed within two years of purchase, or 3.00% if
redeemed in year three or four (with a waiver of 10% of the amount invested).
Class C has a CDSC of 1.00% if redeemed within one year of purchase.
Diamond Without CDSC.
Diamond Diamond With CDSC. Assumes redemption on February 28, 1997.
+ Since November 14, 1994 -- Date shares were first offered to
the public
FORTIS GROWTH FUND
YOUR GROWTH FUND
MEDIUM-SIZED COMPANIES POISED TO BE TOMORROW'S LEADERS
Technology stocks contributed to the positive performance of the Growth Fund
during the first half of the fiscal year. These holdings represented more than
one-third of the portfolio's assets during this period. Other holdings included
the health care, financial services and energy areas.
MARKET PERFORMS WELL
For the first half of the fiscal year ended February 28, 1997, the Fortis Growth
Fund had a total return of 9.55%. Overall the stock market itself performed
quite well. The S&P 500 Index showed a return of 22.58% during the same period.
The Dow Jones Industrial Average was 18.61% during the same period. The market
was driven primarily by large, multi-national companies. Alternatively, the
Gowth Fund invests mainly in mid-sized companies.
CONTINUING GROWTH PREDICTED
We believe that 1997 will bring economic and financial market indicators similar
to those experienced in 1996. Specifically, that means that the economy is
growing, inflation is benign, and interest rates should remain within the range
traced over the past year.
We concentrate on companies that are able to sustain the growth of their
revenues, regardless of the relative strength of the economy. As a result, the
Fund continues to contain many companies which represent a wide range of
technologies. Surveys state that U.S. companies intend to expand technology
spending, and the increase in such spending by foreign corporations is even
greater.
VALUE OF $10,000 INVESTED MARCH 1, 1972
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** GROWTH FUND CLASS A
<S> <C> <C> <C> <C>
3/72 10,000 10,387
73 10,781 8,544
74 9,606 7,171
75 8,540 6,694
76 10,863 8,672
77 11,318 8,627
78 10,376 8,993
79 12,101 12,294
80 15,064 18,902
81 18,295 25,859
82 16,635 27,394
83 22,974 42,241
84 25,474 42,296
85 30,751 48,453
86 40,241 65,410
87 52,098 89,757
88 50,672 73,675
89 56,690 81,383
90 67,365 100,148
91 77,241 122,054
92 89,573 168,592
93 99,057 161,455
94 107,320 195,407
95 115,245 176,112
96 155,241 232,177
97 194,977 253,633
Fortis Growth Fund
Average Annual Total Return
1 Year 5 Year 10 Year 25 Year
Class A* +4.05% +7.46% +10.41% +13.81%
Class A** +9.24% +8.51% +10.95% +14.03%
</TABLE>
Annual period ended February 28
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 higher
sales charge of 8.50%, and therefore, those figures do not represent
actual performance that would have been acheived 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 500 common stocks.
PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/28/97
<TABLE>
<S> <C> <C>
ADDITIONS: Noble Drilling Corp. ELIMINATIONS:
American Express Co. Pacific Gateway Exchange, Inc. America Online, Inc.
Anadarko Petroleum Corp. Republic Industries, Inc. Mercury Finance Co.
BioChem Pharma, Inc. Schlumberger, Ltd. MFS Communications Co., Inc.
Chicago Miniature Lamp, Inc. Smith International, Inc. Scholastic Corp.
Cooper Cameron Corp. Sterling Commerce, Inc. Sunglass Hut International, Inc.
Danka Business Systems Tidewater, Inc. Wal-Mart Stores, Inc.
Dresser Industries, Inc. Transocean Offshore, Inc.
ENSCO International, Inc. Vertas Software Corp.
Falcon Drilling Co. Viasoft, Inc.
MBNA Corp. West Marine, Inc.
Medtronic, Inc. Wisconsin Central Transportation
Nike, Inc. Corp.
</TABLE>
8
<PAGE>
COMPOSITION BY INDUSTRY AS OF 2/28/97
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 19.6%
Computer-Software 16.4%
Business Services 14.9%
Health Care Services 8.5%
Cash Equivalents/Receivables 8.6%
Retail-Specialty 7.5%
Computer-Communications Equipment 7.1%
Telephone Services 6.6%
Machinery-Oil and Well 5.6%
Restaurants and Franchising 5.2%
</TABLE>
TOP 10 HOLDINGS AS OF 2/28/97
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Cisco Systems, Inc. 3.4%
2. United Waste System, Inc. 3.4%
3. Input/Output, Inc. 3.2%
4. Acxiom Corp. 3.2%
5. Parametric Technology Corp. 3.2%
6. Petroleum Geo-Services ADR 2.4%
7. APAC TeleServices, Inc. 2.0%
8. West Marine, Inc. 2.0%
9. Fastenal Co. 2.0%
10. LCI International, Inc. 1.9%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond (12.15%) +11.10%
Class B sharesDiamond Diamond (15.75%) +8.40%
Class C sharesDiamond (12.11%) +11.13%
Class C sharesDiamond Diamond (13.11%) +11.13%
Class H sharesDiamond (12.11%) +11.13%
Class H sharesDiamond Diamond (15.71%) +8.43%
</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% if redeemed within two years of purchase, or 3.00% if
redeemed in year three or four (with a waiver of 10% of the amount invested).
Class C has a CDSC of 1.00% if redeemed within one year of purchase.
Diamond Without CDSC.
Diamond Diamond With CDSC. Assumes redemption on February 28, 1997.
+ Since November 14, 1994 -- Date shares were first offered to
the public.
FORTIS CAPITAL APPRECIATION PORTFOLIO
YOUR CAPITAL APPRECIATION PORTFOLIO
OPPORTUNITY THROUGH AMERICA'S ENTREPRENEURS
The past six months have been difficult for funds primarily investing in
smaller, emerging high growth companies. Market focus moved dramatically away
from smaller companies and toward large, well-known moderate growers.
MORE DIVERSITY ADDED
While the portfolio became even more diversified, across wider areas of business
and a larger number of names, performance has been below plan in this small
company, high growth area. Because the portfolio retained a sufficient level of
cash, we could take advantage of price opportunities created in companies with
the potential for strong corporate profitability.
The portfolio primarily searches for individual companies with the potential for
substantial long term growth. Industries represented in the fund include
specialty retail, employee outsourcing, teleservice outsourcing, emerging
telephone companies, telecom equipment manufacturing, computer software, health
care, business services, and energy services.
VOLATILITY IS PART OF SMALL-COMPANY MARKET
We want shareholders to understand that investing in smaller companies can be
more volatile over the short term. This is often a result of these companies'
higher relative valuations. It appears that a substantial portion of this higher
relative valuation has been removed over the past nine or 10 months. We continue
to believe that investors with patience and a longer term horizon should be
rewarded by the capital appreciation of some of the leading growth companies of
the future.
VALUE OF $10,000 INVESTED JANUARY 4, 1988
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CAPITAL APPRECIATION PORTFOLIO
<S> <C> <C> <C> <C> <C>
S&P 500*** Class A
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
97 42,007 31,372
Fortis Capital Appreciation Portfolio
Average Annual Total Return
Since
1 Year 5 Year January 4, 1988@
Class A* -15.87% +6.40% +13.30%
Class A** -11.67% +7.45% +13.91%
<CAPTION>
<S> <C> <C> <C>
1/4/88
88
89
90
91
92
93
94
95
96
97
Fortis Capital Appreciation Portfolio
Average Annual Total Return
Class A*
Class A**
</TABLE>
Annual period ended February 28
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, those figures do not represent actual
performance that would have been acheived 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 500 common stocks.
@ Date shares were first offered to the public.
PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/28/97
<TABLE>
<S> <C> <C>
ADDITIONS: Marine Drilling Companies, Inc. ELIMINATIONS:
Advanced Fibre Communications Platinum Technology, Inc. America Online, Inc.
Camco International, Inc. Pure Atria Corp. Career Horizons, Inc.
Chicago Miniature Lamp, Inc. Rational Software Corp. Gymboree Corp.
COREstaff, Inc. Siebel Systems, Inc. Healthsource, Inc.
Correctional Services Corp. Snyder Communications, Inc. Mecon, Inc.
Covance, Inc. Sykes Enterprises, Inc. MFS Communications Co., Inc.
Envoy Corp. Trico Marine Services, Inc. Mossimo, Inc.
Falcon Drilling Co. Vantive Corp. Quality Dining, Inc.
Famous Dave's of America, Inc. Veritas Software Corp. Quicksilver, Inc.
HCIA, Inc. Verity, Inc. Shiva Corp.
Infinity Financial Technology, Inc. Viasoft, Inc. Summit Medical Systems, Inc.
INSO Corp. WorldCom. Inc. Sunglass Hut International, Inc.
</TABLE>
9
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO
Schedule of Investments
February 28, 1997 (Unaudited)
COMMON STOCKS-59.30%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------ -------------
<C> <S> <C> <C>
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.67%
22,000 Magna International, Inc. Class A............ $ 990,844 $ 1,155,000
------------ -------------
BANKS-1.86%
49,000 Banc One Corp. (h)........................... 1,822,770 2,162,125
23,000 Union Planters Corp. (h)..................... 798,322 1,029,250
------------ -------------
2,621,092 3,191,375
------------ -------------
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT-1.08%
13,000 Amgen, Inc. (a).............................. 723,458 794,625
28,000 Centocor, Inc. (a) (h)....................... 984,374 1,060,500
------------ -------------
1,707,832 1,855,125
------------ -------------
BUSINESS SERVICES AND SUPPLIES-2.18%
24,000 Ceridian Corp. (a) (h)....................... 1,063,507 939,000
55,134 First Data Corp. (h)......................... 1,175,630 2,019,283
19,000 Ingram Micro, Inc. Class A (a)............... 377,028 432,250
24,000 Wackenhut Corp. Class B...................... 575,984 348,000
------------ -------------
3,192,149 3,738,533
------------ -------------
CHEMICALS-0.57%
27,000 Monsanto Co.................................. 1,116,294 982,125
------------ -------------
COMPUTER-COMMUNICATIONS EQUIPMENT-1.07%
33,000 Cisco Systems, Inc. (a)...................... 404,832 1,835,625
------------ -------------
COMPUTER-SOFTWARE-4.74%
28,600 Fiserv, Inc. (a)............................. 1,060,073 936,650
34,000 Microsoft Corp. (a) (h)...................... 724,336 3,315,000
34,600 Oracle Corp. (a)............................. 153,712 1,358,050
59,978 Sterling Commerce, Inc. (a).................. 813,216 1,739,362
27,100 Sterling Software, Inc. (a).................. 193,186 775,737
------------ -------------
2,944,523 8,124,799
------------ -------------
CONSTRUCTION-0.50%
14,000 Fluor Corp. (h).............................. 1,037,535 848,750
------------ -------------
CONTAINERS AND PACKAGING-0.55%
17,100 Crown Cork & Seal Company, Inc. (h).......... 791,714 949,050
------------ -------------
DRUGS-3.20%
16,000 Abbott Laboratories.......................... 727,120 900,000
18,000 Biovail Corp. International (a) (h).......... 554,125 434,250
31,200 Forest Laboratories, Inc. (a)................ 1,174,069 1,189,500
18,500 Lilly (Eli) & Co., Inc....................... 1,140,461 1,616,437
13,400 Teva Pharmaceutical Industries Ltd. ADR
(h)........................................ 663,006 828,287
6,000 Warner-Lambert Co............................ 505,570 504,000
------------ -------------
4,764,351 5,472,474
------------ -------------
ELECTRICAL EQUIPMENT-1.26%
21,000 General Electric Co.......................... 1,832,692 2,160,375
------------ -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-2.01%
13,500 Intel Corp................................... 526,451 1,915,312
27,300 Motorola, Inc................................ 1,128,863 1,525,388
------------ -------------
1,655,314 3,440,700
------------ -------------
FINANCE SERVICES-6.92%
71,000 Federal National Mortgage Association 1,847,316 2,840,000
24,150 Franklin Resources, Inc. (h)................. 189,578 1,412,775
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ -------------
<C> <S> <C> <C>
70,384 Green Tree Financial Corp. (h)............... $ 885,851 $ 2,639,400
105,000 MBNA Corp.................................... 1,004,733 3,360,000
20,000 MGIC Investment Corp. (h).................... 1,348,608 1,572,500
------------ -------------
5,276,086 11,824,675
------------ -------------
FOOD-1.57%
32,000 ConAgra, Inc. (h)............................ 1,387,673 1,696,000
24,000 Heinz (H.J.) Co.............................. 766,680 999,000
------------ -------------
2,154,353 2,695,000
------------ -------------
HEALTH CARE SERVICES-3.00%
16,500 Cardinal Health, Inc. (h).................... 781,880 1,014,750
50,500 Columbia/HCA Healthcare Corp. (h)............ 1,557,076 2,121,000
14,000 Oxford Health Plans, Inc. (a)................ 523,875 780,500
7,700 PacifiCare Health Systems, Inc. (a) (h) 595,353 644,875
11,700 United Healthcare Corp. (h).................. 580,166 583,538
------------ -------------
4,038,350 5,144,663
------------ -------------
HOTEL AND GAMING-1.88%
90,000 Mirage Resorts, Inc. (a)..................... 1,015,776 2,238,750
26,000 Sun International Hotels Ltd. (a) (h)........ 1,253,604 988,000
------------ -------------
2,269,380 3,226,750
------------ -------------
INSURANCE-1.91%
27,000 American International Group, Inc............ 2,741,083 3,267,000
------------ -------------
MEDICAL TECHNOLOGY-2.36%
29,000 Boston Scientific Corp. (a) (h).............. 1,229,337 1,921,250
32,300 Depuy, Inc. (a).............................. 565,250 694,450
22,000 Medtronic, Inc. (and rights)................. 492,656 1,424,500
------------ -------------
2,287,243 4,040,200
------------ -------------
OIL AND GAS FIELD SERVICES-1.90%
12,000 Camco International, Inc..................... 513,592 463,500
24,500 Precision Drilling Corp. (a)................. 900,863 980,000
18,000 Schlumberger Ltd............................. 1,672,011 1,811,250
------------ -------------
3,086,466 3,254,750
------------ -------------
OIL-CRUDE PETROLEUM AND GAS-1.75%
13,000 Noble Affiliates, Inc........................ 575,309 507,000
40,600 Nuevo Energy Co. (a)......................... 1,590,500 1,684,900
62,000 Santa Fe Energy Resources, Inc. (a).......... 900,691 798,250
------------ -------------
3,066,500 2,990,150
------------ -------------
PAPER-0.53%
26,000 U.S. Filter Corp. (a) (h).................... 823,578 910,000
------------ -------------
RETAIL-DEPARTMENT STORES-1.32%
49,000 Kohl's Corp. (a) (h)......................... 957,074 2,254,000
------------ -------------
RETAIL-SPECIALTY-5.61%
22,800 AutoZone, Inc. (a) (h)....................... 433,884 564,300
81,000 Costco Companies, Inc. (a) (h)............... 1,211,625 2,075,625
87,000 CUC International, Inc. (a) (h).............. 1,001,285 2,077,125
23,200 Home Depot, Inc.............................. 440,720 1,264,400
24,000 Lowe's Companies, Inc........................ 956,624 876,000
25,700 Office Depot, Inc. (a)....................... 307,633 488,300
56,000 Pep Boys-Manny Moe & Jack.................... 1,520,663 1,827,000
20,000 Staples, Inc. (a) (h)........................ 442,891 432,500
------------ -------------
6,315,325 9,605,250
------------ -------------
</TABLE>
10
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ -------------
<C> <S> <C> <C>
TELECOMMUNICATION EQUIPMENT-1.90%
52,400 Ericsson (L.M.) Telephone Co. Class B ADR.... $ 614,118 $ 1,653,056
40,000 Tellabs, Inc.(a)............................. 808,395 1,595,000
------------ -------------
1,422,513 3,248,056
------------ -------------
TELEPHONE SERVICES-3.21%
31,000 360 Communications Co. (a)................... 746,303 670,375
65,000 AirTouch Communications, Inc. (a)............ 1,685,363 1,771,250
114,016 WorldCom, Inc. (a) (h)....................... 622,970 3,035,676
------------ -------------
3,054,636 5,477,301
------------ -------------
TOBACCO-1.42%
18,000 Philip Morris Companies, Inc................. 1,936,964 2,432,250
------------ -------------
TOYS-1.14%
78,488 Mattel, Inc.................................. 694,617 1,952,389
------------ -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ -------------
<C> <S> <C> <C>
UTILITIES-ELECTRIC-1.57%
31,900 AES Corp. (a)................................ $ 1,543,256 $ 2,085,463
40,100 Tucson Electric Power Co. (a) (h)............ 669,426 601,500
------------ -------------
2,212,682 2,686,963
------------ -------------
UTILITIES-TELEPHONE-1.01%
29,000 Deutsche Telekom AG ADR (a) (h).............. 547,810 561,875
12,000 Telebras ADR (h)............................. 1,034,460 1,164,000
------------ -------------
1,582,270 1,725,875
------------ -------------
WASTE DISPOSAL-0.61%
29,000 U.S.A. Waste Services, Inc. (a) (h).......... 1,036,088 1,044,000
------------ -------------
TOTAL COMMON STOCKS.......................... $ 68,014,380 $ 101,533,203
------------ -------------
------------ -------------
</TABLE>
ASSET BACKED SECURITIES-10.67%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------ -------------
<C> <S> <C> <C> <C>
COMMERCIAL LOANS-6.67%
$1,477,736 Chase Commercial Mortgage Securities Corp.,
7.60% Ser 1996-1 Class A-1 12-18-2005...... AAA $ 1,493,876 $ 1,511,447
951,693 DLJ Mortgage Acceptance Corp., 7.28% Ser
1996-CF1 Class A1A 3-13-2028 (f)........... AAA 958,786 965,373
706,800 GS MSC II, 7.02% Protective Life Ser 1996 PL
3-1-2026................................... Aaa* 706,755 708,457
2,060,229 J.P. Morgan Commerical Mortgage Corp., 6.47%
1996-C2 Class A 11-25-2027................. AAA 1,983,954 2,002,290
939,485 Merrill Lynch Mortgage Investors, Inc.,
6.7887% Variable Rate Ser 1995-C3 Class A1
12-26-2025................................. AAA 948,342 933,294
700,000 Midland Realty Acceptance Corp., 7.76% Ser
1996-C1 Class B 7-25-2008.................. AA 706,830 720,125
850,000 Morgan Stanley Capital, Inc., 6.586% Ser
1996-WF1 B Tranche Class B 11-15-2028...... AA 814,658 807,234
1,750,000 Mortgage Capital Funding, Inc., 7.90% Ser
1996-MC1 Class B 2-15-2006................. AA+ 1,767,212 1,816,172
470,000 Nationslink Funding Corp., 7.515% Ser 1996-1
Class A2 7-20-2005......................... AAA 470,554 479,694
1,447,281 Nationslink Funding Corp., 7.533% Ser 1996-1
Class A1 9-20-2002......................... AAA 1,460,263 1,480,297
------------ -------------
11,311,230 11,424,383
------------ -------------
MANUFACTURED HOMES-2.32%
1,500,000 Green Tree Financial Corp., 7.65% Sr Sub Pass
Thru Certificate Ser 1994-1 Class A5
4-15-2019.................................. Aa2* 1,494,141 1,525,737
2,500,000 Oakwood Mortgage Investors, Inc., 7.10% Ser
1995-A Class A3 9-15-2020.................. AAA 2,497,656 2,459,350
------------ -------------
3,991,797 3,985,087
------------ -------------
MULTI-FAMILY LOANS-1.68%
1,500,000 DLJ Mortgage Acceptance Corp., 8.50%
Multifamily Mtg Pass Thru Certificate Ser
1994-4 Class A2 4-18-2001.................. A 1,525,816 1,540,750
1,000,000 DLJ Mortgage Acceptance Corp., 8.80%
Multifamily Mtg Pass Thru Certificate Ser
1993-MF12 Class B1 9-18-2003............... NR 982,500 1,016,007
427,257 Fund America Structured Transactions, L.P.
Collateralized Note, 8.231% Ser 1996-1
Class A Principal Only 1-1-2033 (f) (g).... Baa* 310,124 311,898
------------ -------------
2,818,440 2,868,655
------------ -------------
TOTAL ASSET BACKED SECURITIES................ $18,121,467 $ 18,278,125
------------ -------------
------------ -------------
</TABLE>
11
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 28, 1997 (Unaudited)
CORPORATE BONDS-INVESTMENT GRADE-8.82%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------ -------------
<C> <S> <C> <C> <C>
AEROSPACE AND EQUIPMENT-0.46%
$ 750,000 Lockheed Martin Corp., 7.70% 6-15-2008....... BBB $ 791,615 $ 781,741
------------ -------------
BANKS-1.01%
750,000 Bank Austria AG, 7.25% Sub Note 2-15-2017
(i)........................................ AAA 748,577 741,375
500,000 Citicorp Capital II, 8.015% Bond 2-15-2027... A- 500,000 504,798
500,000 St. Paul Bancorp, Inc., 7.125% Sr Note
2-15-2004.................................. BBB- 497,698 491,740
------------ -------------
1,746,275 1,737,913
------------ -------------
BROKERAGE AND INVESTMENT-1.22%
500,000 Bear Stearns Capital Trust I, 7.00% 1-15-2027
(i)........................................ A3* 499,710 498,119
1,000,000 Lehman Brothers Holdings, 8.50% Note
5-1-2007................................... A 1,058,914 1,079,486
500,000 Salomon, Inc., 6.75% Sr Note 2-15-2003....... BBB 499,110 490,780
------------ -------------
2,057,734 2,068,385
------------ -------------
CHEMICALS-0.56%
1,000,000 Lyondell Petrochemical, 7.55% Note
2-15-2026.................................. BBB- 945,998 953,404
------------ -------------
CONSUMER FINANCE-0.43%
750,000 Beneficial Corp., 6.33% Medium Term Note
12-18-2000................................. A 742,680 740,098
------------ -------------
CONTAINERS AND PACKAGING-0.57%
1,000,000 Crown Cork & Seal Financial plc, 7.00%
12-15-2006 (h)............................. BBB+ 996,720 981,865
------------ -------------
ENERGY-0.58%
1,000,000 NGC Corp., 7.625% Deb 10-15-2026............. BBB+ 995,237 997,015
------------ -------------
FOREIGN-GOVERNMENT AGENCIES-0.45%
750,000 Quebec (Province of), 7.50% Yankee Bond
7-15-2002.................................. A+ 774,984 772,118
------------ -------------
FOREST PRODUCTS-0.38%
600,000 Georgia-Pacific Corp., 9.625% Deb
3-15-2022.................................. BBB- 616,932 657,145
------------ -------------
MEDIA-0.63%
1,000,000 News America Holdings, Inc., 8.875% Deb
4-26-2023.................................. BBB 1,027,748 1,080,669
------------ -------------
MISCELLANEOUS-0.33%
500,000 New York (City of), 10.00% General Obligation
Taxable Bond Fiscal 1991 Ser D 8-1-2005.... BBB+ 474,235 564,364
------------ -------------
REAL ESTATE-INVESTMENT TRUST-0.30%
500,000 Meditrust, 7.82% Note 9-10-2026.............. BBB- 523,503 515,103
------------ -------------
SUPRANATIONAL-0.59%
1,000,000 Corp Andina De Fomento, 7.10% Yankee Bond
2-1-2003................................... BBB+ 999,422 1,003,241
------------ -------------
TELECOMMUNICATIONS-0.87%
1,000,000 360 Communications Co., 7.50% Sr Note
3-1-2006................................... BBB- 997,850 997,283
500,000 U.S. West Capital Funding, Inc., 7.30%
1-15-2007.................................. BBB+ 499,250 498,113
------------ -------------
1,497,100 1,495,396
------------ -------------
UTILITIES-ELECTRIC-0.44%
750,000 Texas Electric Capital V, 8.175% 1-30-2037
(h)........................................ BBB 750,000 752,110
------------ -------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE..... $14,940,183 $ 15,100,567
------------ -------------
------------ -------------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-6.10%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
--------- ------------- ------------ -------------
<C> <S> <C> <C> <C>
BROADCASTING-0.30%
$500,000 Sinclair Broadcasting Group, Inc., 10.00% Sr
Sub Note 9-30-2005......................... B $ 500,000 $ 520,000
------------ -------------
</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>
CABLE TELEVISION-1.47%
$500,000 Cablevision Systems Corp., 10.50% Sr Sub Deb
5-15-2016.................................. B $ 507,475 $ 530,000
500,000 Century Communications, Inc., 9.50% Sr Note
3-1-2005................................... BB- 519,618 521,250
500,000 International Cabletel, 10.00% Sr Note
2-15-2007 (h)(i)........................... B 500,000 507,500
500,000 Telewest plc, 9.625% Deb 10-1-2006 (h)....... BB 516,139 510,000
500,000 Wireless One, Inc., 13.00% Sr Note
10-15-2003................................. B- 489,001 450,000
------------ -------------
2,532,233 2,518,750
------------ -------------
COMPUTER-HARDWARE-0.32%
500,000 Unisys Corp., 11.75% Sr Note 10-15-2004...... B+ 545,000 543,750
------------ -------------
ENERGY-0.32%
500,000 Mesa Operating Co., 10.625% Sr Note
7-1-2006................................... B 504,803 552,500
------------ -------------
FOOD-MISCELLANEOUS-0.32%
500,000 Envirodyne Industries, Inc., 12.00% First
Priority Sr Secured Note 6-15-2000......... B+ 500,000 540,000
------------ -------------
HEALTH CARE SERVICES-0.32%
500,000 Tenet Healthcare Corp., 10.125% Sr Sub Note
3-1-2005................................... B+ 532,793 551,250
------------ -------------
HOTEL AND MOTEL-0.31%
500,000 HMH Properties, Inc., 9.50% Sr Note
5-15-2005.................................. BB- 523,362 525,625
------------ -------------
LEISURE TIME-AMUSEMENTS-0.29%
500,000 Trump Atlantic City Associates Funding, Inc.,
11.25% First Mtg Bond 5-1-2006 (h)......... BB- 500,000 490,000
------------ -------------
STEEL AND IRON-0.65%
500,000 AK Steel Corp., 10.75% Sr Note 4-1-2004...... BB- 547,374 545,000
500,000 Algoma Steel, Inc., 12.375% First Mortgage
Note 7-15-2005 (h)......................... B 525,801 562,500
------------ -------------
1,073,175 1,107,500
------------ -------------
TECHNOLOGY-0.30%
500,000 Computervision Corp., 11.375% Sr Sub Note
8-15-1999.................................. B- 511,550 520,000
------------ -------------
TELECOMMUNICATIONS-1.50%
500,000 American Communications Services, Inc.,
13.00% Sr Disc Note 11-1-2005 (Zero coupon
until 11-1-2000, thereafter 13.00%) (e).... NR 306,339 327,500
500,000 Nextlink Communications, L.L.C., 12.50% Sr
Note 4-15-2006............................. NR 500,000 545,000
500,000 Omnipoint Corp., 11.625% Sr Note 8-15-2006
(f)........................................ CCC+ 508,727 502,500
500,000 Paging Network, Inc., 10.125% Sr Sub Note
8-1-2007................................... B 520,893 501,250
500,000 Sprint Spectrum L.P., 12.50% Sr Disc Note
8-15-2006 (Zero coupon through 8-15-2001,
12.50% thereafter) (e) (h)................. B+ 326,873 341,250
500,000 Teleport Communications, 11.125% Sr Disc Note
7-1-2007 (Zero coupon until 7-1-2001,
thereafter 11.125%) (e).................... B 315,243 353,750
------------ -------------
2,478,075 2,571,250
------------ -------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... $10,200,991 $ 10,440,625
------------ -------------
------------ -------------
</TABLE>
U.S. GOVERNMENT SECURITIES-11.38%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION-7.84%
MORTGAGE BACKED SECURITIES:
$ 757,784 6.00% 2011................................... $ 739,621 $ 725,105
2,672,261 6.50% 2010................................... 2,649,801 2,612,969
3,858,454 7.00% 2025................................... 3,796,603 3,758,373
490,144 7.50% 2026................................... 486,266 488,765
1,575,783 8.00% 2025................................... 1,599,666 1,602,867
215,994 9.00% 2016-2021.............................. 213,378 227,401
------------- -------------
9,485,335 9,415,480
------------- -------------
</TABLE>
13
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 28, 1997 (Unaudited)
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
NOTES:
$2,000,000 6.85% 2000................................... $ 2,000,000 $ 2,014,294
------------- -------------
REMIC-PAC'S:
2,000,000 7.00% Trust #1192-49H Busted PAC 2020........ 1,937,969 1,998,860
------------- -------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 13,423,304 13,428,634
------------- -------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION-1.29%
MORTGAGE BACKED SECURITIES:
2,052,874 9.00% 2023................................... 2,119,593 2,165,140
41,491 9.50% 2019................................... 41,154 44,784
------------- -------------
2,160,747 2,209,924
------------- -------------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION................................ 2,160,747 2,209,924
------------- -------------
U.S. TREASURY SECURITIES-2.25%
BONDS:
315,000 6.75% 2026................................... 313,096 310,570
200,000 8.125% 2021.................................. 226,955 227,312
------------- -------------
540,051 537,882
------------- -------------
NOTES:
1,050,000 6.25% 2007................................... 1,034,090 1,027,031
1,290,000 7.125% 1999.................................. 1,310,749 1,319,025
930,000 7.50% 1999................................... 957,975 959,352
------------- -------------
3,302,814 3,305,408
------------- -------------
TOTAL U.S. TREASURY SECURITIES............... 3,842,865 3,843,290
------------- -------------
TOTAL U.S. GOVERNMENT SECURITIES............. 19,426,916 19,481,848
------------- -------------
TOTAL LONG TERM SECURITIES................... $ 130,703,937 $ 164,834,368
------------- -------------
------------- -------------
</TABLE>
14
<PAGE>
SHORT-TERM INVESTMENTS-3.41%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-3.32%
$5,678,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.19%............. $ 5,678,000
-------------
DIVERSIFIED FINANCE-0.09%
162,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.31%...................... 162,000
-------------
TOTAL SHORT-TERM INVESTMENTS................. 5,840,000
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$136,543,937) (b).......................... $ 170,674,368
-------------
-------------
</TABLE>
(a) Presently non-income producing. For long-term debt securities, items
identified are in default as to payment of interest and/or principal.
(b) At February 28, 1997, the cost of securities for federal income tax
purposes was $136,544,476, and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $36,539,391
Unrealized depreciation..................................... (2,409,499)
- -------------------------------------------------------------------------
Net Unrealized appreciation................................. $34,129,892
- -------------------------------------------------------------------------
</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 7.69% of net assets as of February 28, 1997.
(e) The interest rates disclosed for these securities represent 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.
<TABLE>
<CAPTION>
Date Acquired Shares/Par Security Cost Basis
- ------------------ ----------- ------------------------------------------------------------------------------ -----------
<S> <C> <C> <C>
May 17, 1996 951,693 DLJ Mortgage Acceptance Corp., 7.28% 3-13-2028 $ 958,786
March 7, 1996 427,257 Fund America Structured Transactions, L.P., 8.231% 1-1-2033 310,124
February 13, 1997 500,000 Omnipoint Corp., 11.625% 8-15-2006 508,727
</TABLE>
The value of these securities at February 28, 1997, was $1,779,771, which
represents 1.04% of net assets.
(g) The interest rates disclosed for principal only strips represent effective
yields at February 28, 1997. These investments have been identified by
portfolio management as illiquid securities. The aggregate value of these
securities at February 28, 1997, was $311,898, which represents 0.18% of
net assets.
(h) Security is fully or partially on loan at February 28, 1997. See Note A of
accompanying Notes to Financial Statements.
(i) 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 other "accredited
investors". Pursuant to guidelines adopted by the Board of Directors, these
issues are determined to be liquid. The aggregate value of these securities
at February 28, 1997 was $1,746,994 which represents 1.02% of total net
assets.
* Moody's
15
<PAGE>
FORTIS STOCK FUNDS
VALUE FUND
Schedule of Investments
February 28, 1997 (Unaudited)
COMMON STOCKS-90.94%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-1.38%
5,500 Interpublic Group of Companies, Inc.......... $ 250,008 $ 275,688
------------ ------------
AEROSPACE AND EQUIPMENT-0.41%
800 Boeing Co.................................... 63,719 81,400
------------ ------------
BANKS-7.69%
10,000 Bank of New York Co., Inc.................... 263,374 387,500
3,800 Chase Manhattan Corp......................... 342,654 380,475
3,300 Citicorp..................................... 263,644 385,275
4,800 First Bank System, Inc....................... 336,647 376,800
------------ ------------
1,206,319 1,530,050
------------ ------------
BROADCASTING-1.65%
10,900 Comcast Corp., Special Class A............... 181,504 194,837
3,800 Viacom, Inc., Class B (a).................... 140,614 133,950
------------ ------------
322,118 328,787
------------ ------------
BROKERAGE AND INVESTMENT-0.48%
1,000 Merrill Lynch & Co., Inc..................... 59,167 96,000
------------ ------------
BUILDING MATERIALS-0.89%
4,200 Owens Corning................................ 163,468 177,975
------------ ------------
BUSINESS SERVICES AND SUPPLIES-1.49%
12,100 Dun & Bradstreet Corp........................ 293,100 296,450
------------ ------------
CHEMICALS-1.81%
10,300 IMC Global, Inc.............................. 388,092 359,212
------------ ------------
CHEMICALS-SPECIALTY-3.87%
12,000 Cabot Corp................................... 295,954 282,000
4,700 Mallinckrodt Group, Inc...................... 185,174 199,750
9,400 Sigma-Aldrich Corp........................... 253,081 287,875
------------ ------------
734,209 769,625
------------ ------------
COMPUTER-SOFTWARE-2.24%
2,200 Automatic Data Processing, Inc............... 92,317 93,775
8,400 Fiserv, Inc. (a)............................. 302,980 275,100
2,700 Sterling Software, Inc. (a).................. 84,160 77,287
------------ ------------
479,457 446,162
------------ ------------
CONTAINERS AND PACKAGING-0.89%
3,200 Crown Cork & Seal Company, Inc............... 164,411 177,600
------------ ------------
DRUGS-5.35%
4,900 Abbott Laboratories.......................... 264,552 275,625
7,200 Johnson & Johnson............................ 362,217 414,900
1,900 Pfizer, Inc.................................. 167,164 174,087
2,600 Schering-Plough Corp......................... 150,270 199,225
------------ ------------
944,203 1,063,837
------------ ------------
ELECTRICAL EQUIPMENT-2.22%
4,300 General Electric Co.......................... 340,863 442,362
------------ ------------
ELECTRONIC-CONTROLS AND EQUIPMENT-0.67%
3,000 Cooper Industries, Inc....................... 114,820 132,750
------------ ------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-4.44%
6,300 Avnet, Inc................................... 286,126 393,750
2,400 Intel Corp................................... 339,525 340,500
6,500 Vishay Intertechnology, Inc.................. 135,481 148,688
------------ ------------
761,132 882,938
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
FINANCE SERVICES-2.03%
5,300 Finova Group, Inc............................ $ 348,827 $ 404,788
------------ ------------
FOOD-6.02%
10,200 Archer-Daniels-Midland Co.................... 217,942 188,700
7,700 ConAgra, Inc................................. 342,107 408,100
5,300 Sara Lee Corp................................ 181,930 205,375
11,400 Sysco Corp................................... 357,391 396,150
------------ ------------
1,099,370 1,198,325
------------ ------------
GLASS AND GLASS PRODUCTS, POTTERY-0.95%
5,000 Corning, Inc................................. 179,515 188,125
------------ ------------
HEALTH CARE SERVICES-1.78%
8,450 Columbia/HCA Healthcare Corp................. 294,311 354,900
------------ ------------
HOUSEHOLD PRODUCTS-1.96%
1,300 Kimberly-Clark Corp.......................... 126,958 137,800
2,100 Procter & Gamble Co.......................... 189,122 252,263
------------ ------------
316,080 390,063
------------ ------------
MACHINERY-0.08%
700 Pall Corp.................................... 17,703 15,225
------------ ------------
MACHINERY-SPECIALTY-0.84%
2,100 Grainger (W.W.), Inc......................... 151,652 166,425
------------ ------------
MEDICAL SUPPLIES-1.80%
7,800 Baxter International, Inc.................... 316,479 358,800
------------ ------------
METALS-MINING AND MISCELLANEOUS-1.82%
8,400 Cleveland-Cliffs, Inc........................ 332,455 361,200
------------ ------------
MISCELLANEOUS-0.93%
3,300 Sherwin-Williams Co.......................... 185,564 185,213
------------ ------------
NATURAL GAS TRANSMISSIONS-2.29%
4,600 Enron Corp................................... 200,750 183,425
6,200 Williams Companies, Inc...................... 202,426 271,250
------------ ------------
403,176 454,675
------------ ------------
OFFICE EQUIPMENT AND SUPPLIES-4.89%
2,400 International Business Machines Corp......... 239,241 345,000
6,800 Pitney Bowes, Inc............................ 347,539 422,450
3,300 Xerox Corp................................... 175,140 206,250
------------ ------------
761,920 973,700
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-3.65%
6,700 Anadarko Petroleum Corp...................... 397,321 376,875
900 Exxon Corp................................... 77,099 89,888
13,800 Santa Fe Energy Resources, Inc. (a).......... 198,862 177,675
4,400 Union Texas Petroleum Holdings, Inc.......... 94,576 81,400
------------ ------------
767,858 725,838
------------ ------------
OIL-REFINING-5.21%
3,800 Atlantic Richfield Co........................ 476,630 475,000
2,600 Mobil Corp................................... 336,802 319,150
1,400 Royal Dutch Petroleum Co..................... 245,576 242,200
------------ ------------
1,059,008 1,036,350
------------ ------------
PRECISION INSTRUMENTS-TEST, RESEARCH-0.85%
1,700 Emerson Electric Co.......................... 145,568 168,300
------------ ------------
PRINTING-1.95%
18,000 Unisource Worldwide, Inc..................... 358,941 387,000
------------ ------------
</TABLE>
16
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
PUBLISHING-1.41%
5,400 McGraw Hill Companies, Inc................... $ 263,144 $ 280,125
------------ ------------
RAILROAD AND RAILROAD EQUIPMENT-0.88%
2,100 Burlington Northern Santa Fe Corp............ 173,791 174,825
------------ ------------
RECREATION EQUIPMENT-1.43%
16,200 International Game Technology................ 294,768 283,500
------------ ------------
RETAIL-DEPARTMENT STORES-0.94%
5,400 Federated Department Stores, Inc. (a)........ 168,500 187,650
------------ ------------
RETAIL-SPECIALTY-4.00%
15,300 AutoZone, Inc. (a)........................... 353,832 378,675
11,400 Lowe's Companies, Inc........................ 387,671 416,100
------------ ------------
741,503 794,775
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
TELECOMMUNICATIONS-3.77%
5,700 Ameritech Corp............................... $ 318,412 $ 363,375
7,500 Nynex Corp................................... 343,905 386,250
------------ ------------
662,317 749,625
------------ ------------
TOBACCO-2.04%
3,000 Philip Morris Companies, Inc................. 347,666 405,375
------------ ------------
UTILITIES-TELEPHONE-3.94%
7,300 SBC Communications, Inc...................... 371,016 419,750
8,000 Sprint Corp.................................. 322,640 364,000
------------ ------------
693,656 783,750
------------ ------------
TOTAL COMMON STOCKS.......................... $ 16,368,858 $ 18,089,388
------------ ------------
------------ ------------
</TABLE>
PREFERRED STOCKS-1.82%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
PAPER-1.82%
11,800 James River Corp. of Virginia Conv. Ser P.... $ 328,611 $ 361,375
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $16,697,469 $18,450,763
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-7.07%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
--------- ------------
<C> <S> <C>
BANKS-4.49%
$893,598 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.19%............. $ 893,598
------------
DIVERSIFIED FINANCE-0.57%
113,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.31%...................... 113,000
------------
U.S. GOVERNMENT AGENCY-2.01%
400,000 Federal Home Loan Mortgage Corp., 5.29%,
3-4-1997................................... 399,769
------------
TOTAL SHORT-TERM INVESTMENTS................. 1,406,367
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$18,103,836) (b)........................... $19,857,130
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 28, 1997, the cost of securities for federal income tax
purposes was $18,107,660 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $1,972,069
Unrealized depreciation..................................... (222,599)
- ------------------------------------------------------------------------
Net unrealized appreciation................................. $1,749,470
- ------------------------------------------------------------------------
</TABLE>
(c) See Note 1 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 1.22% of net assets as of February 28, 1997.
17
<PAGE>
FORTIS STOCK FUNDS
GROWTH & INCOME FUND
Schedule of Investments
February 28, 1997 (Unaudited)
COMMON STOCKS-74.58%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
------- ----------- ------------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-1.77%
2,700 United Technologies Corp..................... $ 161,743 $ 203,175
----------- ------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-1.77%
2,000 Genuine Parts Co............................. 89,495 93,500
2,800 Tenneco, Inc................................. 122,482 110,250
----------- ------------
211,977 203,750
----------- ------------
BANKS-4.33%
4,700 Banc One Corp................................ 189,101 207,387
2,000 Chase Manhattan Corp......................... 160,880 200,250
2,000 Union Planters Corp.......................... 69,432 89,500
----------- ------------
419,413 497,137
----------- ------------
BUSINESS SERVICES AND SUPPLIES-0.52%
1,200 Omnicom Group, Inc........................... 50,206 59,550
----------- ------------
DIVERSIFIED COMPANIES-1.99%
1,200 Chemed Corp.................................. 46,998 44,250
2,000 Minnesota Mining and Manufacturing Co........ 134,177 184,000
----------- ------------
181,175 228,250
----------- ------------
DRUGS-8.66%
1,900 Abbott Laboratories.......................... 85,562 106,875
3,000 American Home Products Corp.................. 172,518 192,000
2,600 Lilly (Eli) & Co., Inc....................... 170,432 227,175
2,200 Merck & Co., Inc............................. 160,731 202,400
1,300 Pfizer, Inc.................................. 96,406 119,112
4,000 Pharmacia and UpJohn, Inc.................... 162,872 147,500
----------- ------------
848,521 995,062
----------- ------------
ELECTRICAL EQUIPMENT-1.52%
1,700 General Electric Co.......................... 151,090 174,887
----------- ------------
FINANCE SERVICES-8.20%
2,000 American Express Co.......................... 98,542 130,750
2,400 Beneficial Corp.............................. 138,400 165,900
3,000 Federal National Mortgage Association........ 105,948 120,000
1,800 Green Tree Financial Corp.................... 61,517 67,500
2,000 Household International, Inc................. 149,233 193,750
4,312 MBNA Corp.................................... 93,145 137,984
1,200 Student Loan Marketing Association........... 88,482 127,050
----------- ------------
735,267 942,934
----------- ------------
FOOD-3.40%
3,600 ConAgra, Inc................................. 165,463 190,800
4,800 Heinz (H.J.) Co.............................. 163,457 199,800
----------- ------------
328,920 390,600
----------- ------------
HAND TOOLS AND GENERAL HARDWARE-1.69%
5,000 Snap-On, Inc................................. 163,434 194,375
----------- ------------
HOUSEHOLD PRODUCTS-0.94%
900 Clorox Co.................................... 78,879 107,550
----------- ------------
INSURANCE-1.09%
3,000 Safeco Corp.................................. 101,625 125,250
----------- ------------
MACHINERY-OIL AND WELL-1.43%
2,650 Dresser Industries, Inc...................... 75,656 80,494
1,300 Halliburton Co............................... 73,240 84,012
----------- ------------
148,896 164,506
----------- ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ----------- ------------
<C> <S> <C> <C>
MEDICAL SUPPLIES-1.60%
4,000 Baxter International, Inc.................... $ 172,090 $ 184,000
----------- ------------
NATURAL GAS TRANSMISSIONS-7.22%
3,786 El Paso Natural Gas Co....................... 153,996 203,024
2,500 Enron Corp................................... 97,732 99,687
4,600 PanEnergy Corp............................... 153,189 196,075
3,400 Sonat, Inc................................... 141,916 156,400
4,000 Williams Companies, Inc...................... 133,947 175,000
----------- ------------
680,780 830,186
----------- ------------
OIL-CRUDE PETROLEUM AND GAS-5.39%
1,700 Amoco Corp................................... 127,762 143,650
3,000 Baker Hughes, Inc............................ 108,183 106,500
1,300 Exxon Corp................................... 107,015 129,838
1,500 Kerr-McGee Corp.............................. 98,350 93,938
9,200 Monterey Resources, Inc. (a)................. 143,049 144,900
----------- ------------
584,359 618,826
----------- ------------
OIL-REFINING-1.07%
1,000 Mobil Corp................................... 129,318 122,750
----------- ------------
PUBLISHING-1.71%
2,500 McGraw Hill Companies, Inc................... 109,058 129,688
1,800 Readers Digest Association, Inc., Class A.... 80,215 67,275
----------- ------------
189,273 196,963
----------- ------------
RAILROAD AND RAILROAD EQUIPMENT-0.85%
5,500 Tranz Rail Holdings, Ltd. ADR (a)............ 74,375 97,625
----------- ------------
REAL ESTATE-INVESTMENT TRUST-5.59%
6,000 Beacon Properties Corp....................... 193,080 213,750
1,700 Crescent Real Estate Equities Trust.......... 89,828 93,075
5,000 Excel Realty Trust, Inc...................... 125,000 122,500
3,000 Highwoods Properties, Inc.................... 91,535 103,500
3,000 Spieker Properties, Inc...................... 105,040 109,125
----------- ------------
604,483 641,950
----------- ------------
RETAIL-DEPARTMENT STORES-0.99%
2,100 Sears Roebuck & Co........................... 104,177 113,926
----------- ------------
RETAIL-SPECIALTY-2.20%
5,400 Intimate Brands, Inc......................... 90,921 105,300
3,500 Rite Aid Corp................................ 130,393 147,438
----------- ------------
221,314 252,738
----------- ------------
TOBACCO-2.93%
2,800 American Brands, Inc......................... 133,754 147,350
1,400 Philip Morris Companies, Inc................. 137,718 189,175
----------- ------------
271,472 336,525
----------- ------------
TRANSPORTATION-0.96%
5,000 Knightsbridge Tankers Ltd. (a)............... 100,000 110,625
----------- ------------
UTILITIES-TELEPHONE-6.76%
8,000 Deutsche Telekom AG ADR (a).................. 151,120 155,000
5,000 Frontier Corp................................ 142,095 110,625
4,000 GTE Corp..................................... 180,648 187,000
2,200 Sprint Corp.................................. 82,114 100,100
1,300 Telecom Corp. of New Zealand Ltd. ADR........ 95,194 93,925
3,600 U.S. West Communications Group............... 111,834 129,600
----------- ------------
763,005 776,250
----------- ------------
TOTAL COMMON STOCKS.......................... $ 7,475,792 $ 8,569,390
----------- ------------
----------- ------------
</TABLE>
18
<PAGE>
PREFERRED STOCKS-3.75%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
------- --------- ------------
<C> <S> <C> <C>
CONTAINERS AND PACKAGING-1.13%
2,500 Crown Cork and Seal Co, Inc., Convertible Pfd
4.50%...................................... $113,241 $ 129,375
--------- ------------
INSURANCE-2.20%
6,000 Sunamerica, Inc., Convertible Preferred 8.50%
(a)........................................ 231,636 252,750
--------- ------------
OIL-CRUDE PETROLEUM AND GAS-0.42%
1,000 Nuevo Energy Co., Convertible Preferred Ser
A.......................................... 50,000 48,750
--------- ------------
TOTAL PREFERRED STOCKS....................... $394,877 $ 430,875
--------- ------------
--------- ------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-1.80%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
--------- ------------- ----------- ------------
<C> <S> <C> <C> <C>
WASTE DISPOSAL-1.80%
$200,000 USA Waste Services, Inc., 4.00% Convertibe
Sub Note 2-1-2002.......................... BBB- $ 203,875 $ 206,750
----------- ------------
TOTAL LONG-TERM INVESTMENTS.................. $8,074,544 $ 9,207,015
----------- ------------
----------- ------------
</TABLE>
SHORT-TERM INVESTMENTS-19.94%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
--------- ------------
<C> <S> <C>
BANKS-3.62%
$416,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.19%............. $ 416,000
------------
DIVERSIFIED FINANCE-4.15%
477,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.31%...................... 477,000
------------
U.S. GOVERNMENT AGENCY-9.55%
200,000 Federal Home Loan Mortgage Corp., 5.27%,
3-19-1997.................................. 199,453
900,000 Federal Home Loan Mortgage Corp., 5.30%,
3-13-1997.................................. 898,308
------------
1,097,761
------------
U.S. OTHER DIRECT FEDERAL OBLIGATIONS-2.61%
300,000 Federal Home Loan Bank, 5.38%, 3-3-1997...... 299,868
------------
TOTAL SHORT-TERM INVESTMENTS................. 2,290,629
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$10,365,173) (b)........................... $11,497,644
------------
------------
</TABLE>
(a) Presently non-income producing.
(b) At February 28, 1997, the cost of securities for federal income tax
purposes was $10,365,173, and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $1,257,346
Unrealized depreciation..................................... (124,875)
- ------------------------------------------------------------------------
Net unrealized appreciation................................. $1,132,471
- ------------------------------------------------------------------------
</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 3.98% of net assets as of February 28, 1997.
19
<PAGE>
FORTIS STOCK FUNDS
CAPITAL FUND
Schedule of Investments
February 28, 1997 (Unaudited)
COMMON STOCKS-92.85%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
AUTOMOBILE AND MOTOR VEHICLE PARTS-1.04%
63,000 Magna International, Inc. Class A............ $ 2,984,455 $ 3,307,500
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT-2.12%
53,000 Amgen, Inc. (a).............................. 2,949,608 3,239,625
93,000 Centocor, Inc. (a)........................... 3,262,209 3,522,375
------------- -------------
6,211,817 6,762,000
------------- -------------
BUSINESS SERVICES AND SUPPLIES-4.17%
96,000 Ceridian Corp. (a) (e)....................... 4,243,480 3,756,000
172,012 First Data Corp. (e)......................... 3,359,653 6,299,939
66,000 Ingram Micro, Inc. Class A (a)............... 1,310,320 1,501,500
118,000 Wackenhut Corp. Class B...................... 2,832,064 1,711,000
------------- -------------
11,745,517 13,268,439
------------- -------------
CHEMICALS-1.07%
94,000 Monsanto Co.................................. 3,887,255 3,419,250
------------- -------------
COMPUTER-COMMUNICATIONS EQUIPMENT-1.76%
101,000 Cisco Systems, Inc. (a)...................... 1,214,839 5,618,126
------------- -------------
COMPUTER-SOFTWARE-7.80%
93,000 Fiserv, Inc. (a)............................. 3,526,575 3,045,750
106,000 Microsoft Corp. (a) (e)...................... 940,229 10,335,000
112,000 Oracle Corp. (a)............................. 497,564 4,396,000
189,956 Sterling Commerce, Inc. (a).................. 6,175,479 5,508,724
54,300 Sterling Software, Inc. (a).................. 1,538,441 1,554,337
------------- -------------
12,678,288 24,839,811
------------- -------------
CONSTRUCTION-0.83%
44,000 Fluor Corp................................... 3,260,826 2,667,500
------------- -------------
CONTAINERS AND PACKAGING-1.04%
59,400 Crown Cork & Seal Company, Inc. (e) 2,750,088 3,296,700
------------- -------------
DRUGS-3.00%
64,000 Biovail Corp. International (a) (e).......... 1,944,765 1,544,000
95,800 Forest Laboratories, Inc. (a)................ 3,587,967 3,652,375
44,600 Teva Pharmaceutical Industries Ltd. ADR
(e)........................................ 2,214,162 2,756,837
19,000 Warner-Lambert Co............................ 1,600,972 1,596,000
------------- -------------
9,347,866 9,549,212
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-3.82%
48,000 Intel Corp................................... 3,208,446 6,810,000
95,700 Motorola, Inc................................ 3,871,447 5,347,238
------------- -------------
7,079,893 12,157,238
------------- -------------
FINANCE SERVICES-10.94%
266,000 Federal National Mortgage Association........ 2,327,500 10,640,000
220,076 Green Tree Financial Corp.................... 2,914,970 8,252,850
331,000 MBNA Corp.................................... 3,166,667 10,592,000
68,000 MGIC Investment Corp. (e).................... 4,567,635 5,346,500
------------- -------------
12,976,772 34,831,350
------------- -------------
HEALTH CARE SERVICES-6.51%
60,000 Cardinal Health, Inc. (e).................... 3,060,700 3,690,000
160,500 Columbia/HCA Healthcare Corp. (e)............ 4,550,799 6,741,000
62,500 Oxford Health Plans, Inc. (a)................ 2,768,578 3,484,375
48,800 PacifiCare Health Systems, Inc. (a) (e) 3,430,660 4,087,000
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
54,500 United Healthcare Corp. (e).................. $ 2,775,129 $ 2,718,188
------------- -------------
16,585,866 20,720,563
------------- -------------
HOTEL AND GAMING-2.89%
231,000 Mirage Resorts, Inc. (a)..................... 2,603,580 5,746,125
91,000 Sun International Hotels, Ltd. (a) (e)....... 4,349,186 3,458,000
------------- -------------
6,952,766 9,204,125
------------- -------------
INSURANCE-3.23%
85,000 American International Group, Inc............ 8,384,934 10,285,000
------------- -------------
MEDICAL TECHNOLOGY-5.12%
102,500 Boston Scientific Corp. (a) (e).............. 4,200,989 6,790,625
110,900 Depuy, Inc. (a).............................. 1,940,750 2,384,350
110,000 Medtronic, Inc. (and rights)................. 1,296,332 7,122,500
------------- -------------
7,438,071 16,297,475
------------- -------------
OIL AND GAS FIELD SERVICES-3.25%
38,000 Camco International, Inc. (e)................ 1,626,450 1,467,750
78,400 Precision Drilling Corp. (a)................. 2,825,513 3,136,000
57,000 Schlumberger, Ltd............................ 5,063,906 5,735,625
------------- -------------
9,515,869 10,339,375
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-3.06%
46,200 Noble Affiliates, Inc........................ 2,044,557 1,801,800
123,600 Nuevo Energy Co. (a)......................... 4,492,200 5,129,400
219,000 Santa Fe Energy Resources, Inc. (a).......... 3,180,820 2,819,625
------------- -------------
9,717,577 9,750,825
------------- -------------
PAPER-1.08%
98,000 U.S. Filter Corp. (a) (e).................... 3,084,224 3,430,000
------------- -------------
RETAIL-DEPARTMENT STORES-2.75%
190,400 Kohl's Corp. (a)............................. 3,718,455 8,758,400
------------- -------------
RETAIL-SPECIALTY-10.38%
73,200 AutoZone, Inc. (a) (e)....................... 1,392,996 1,811,700
187,000 Costco Companies, Inc. (a)................... 3,860,497 4,791,875
271,050 CUC International, Inc. (a) (e).............. 3,015,426 6,471,319
157,066 Home Depot, Inc. (e)......................... 2,190,591 8,560,097
84,000 Lowe's Companies, Inc........................ 3,350,997 3,066,000
116,025 Office Depot, Inc. (a)....................... 1,053,264 2,204,475
141,000 Pep Boys-Manny Moe & Jack.................... 2,606,629 4,600,125
71,000 Staples, Inc. (a) (e)........................ 1,572,265 1,535,375
------------- -------------
19,042,665 33,040,966
------------- -------------
TELECOMMUNICATION EQUIPMENT-4.15%
166,000 Ericsson (L.M.) Telephone Co. Class B ADR.... 1,988,217 5,236,781
200,000 Tellabs, Inc.(a)............................. 3,223,783 7,975,000
------------- -------------
5,212,000 13,211,781
------------- -------------
TELEPHONE SERVICES-5.92%
125,000 360 Communications Co. (a)................... 3,009,288 2,703,125
204,000 AirTouch Communications, Inc. (a)............ 5,406,392 5,559,000
398,000 WorldCom, Inc. (a) (e)....................... 2,141,240 10,596,750
------------- -------------
10,556,920 18,858,875
------------- -------------
TOYS-2.02%
258,043 Mattel, Inc. (e)............................. 1,407,005 6,418,820
------------- -------------
</TABLE>
20
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
UTILITIES-ELECTRIC-2.71%
94,000 AES Corp. (a)................................ $ 4,379,888 $ 6,145,250
166,000 Tucson Electric Power Co. (a) (e)............ 2,771,223 2,490,000
------------- -------------
7,151,111 8,635,250
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
UTILITIES-TELEPHONE-1.16%
38,000 Telebras ADR (e)............................. $ 3,275,790 $ 3,686,000
------------- -------------
WASTE DISPOSAL-1.03%
91,000 U.S.A. Waste Services, Inc. (a) (e).......... 3,250,984 3,276,000
------------- -------------
TOTAL COMMON STOCKS.......................... $ 189,431,853 $ 295,630,581
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-7.21%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
------------ -------------
<C> <S> <C>
BANKS-4.22%
$13,433,802 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.19%............. $ 13,433,802
-------------
DIVERSIFIED FINANCE-0.61%
1,926,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.31%...................... 1,926,000
-------------
U.S. GOVERNMENT AGENCY-2.38%
5,900,000 Federal Home Loan Mortgage Corp., 5.24%,
3-17-1997.................................. 5,885,651
1,700,000 Federal Home Loan Mortgage Corp., 5.28%,
3-19-1997.................................. 1,699,018
-------------
7,584,669
-------------
TOTAL SHORT-TERM INVESTMENTS................. 22,944,471
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$212,376,324) (b).......................... $ 318,575,052
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 28, 1996, the cost of securities for federal income tax
purposes was $212,376,324 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $113,041,972
Unrealized depreciation..................................... (6,843,244)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $106,198,728
- --------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuations 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 9.06% of net assets as of February 28, 1997.
(e) Security is fully or partially on loan at February 28, 1997. See Note 1 of
accompanying Notes to Financial Statements.
21
<PAGE>
FORTIS STOCK FUNDS
FIDUCIARY FUND, INC.
Schedule of Investments
February 28, 1997 (Unaudited)
COMMON STOCKS-95.79%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
AUTOMOBILE AND MOTOR VEHICLE PARTS-1.05%
16,000 Magna International, Inc. Class A............ $ 757,466 $ 840,000
------------ ------------
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT-2.04%
13,000 Amgen, Inc. (a).............................. 723,457 794,625
22,000 Centocor, Inc. (a)........................... 771,685 833,250
------------ ------------
1,495,142 1,627,875
------------ ------------
BROADCASTING-1.41%
33,300 Central European Media Enterprises Ltd.,
Class A (a)................................ 915,750 1,123,875
------------ ------------
BUSINESS SERVICES AND SUPPLIES-4.13%
24,000 Ceridian Corp. (a) (d)....................... 1,065,952 939,000
43,000 First Data Corp. (d)......................... 825,030 1,574,875
16,000 Ingram Micro, Inc., Class A (a).............. 318,024 364,000
29,000 Wackenhut Corp., Class B..................... 696,052 420,500
------------ ------------
2,905,058 3,298,375
------------ ------------
CHEMICALS-1.05%
23,000 Monsanto Co.................................. 950,525 836,625
------------ ------------
COMPUTER-COMMUNICATIONS EQUIPMENT-1.81%
26,000 Cisco Systems, Inc. (a)...................... 315,255 1,446,250
------------ ------------
COMPUTER-SOFTWARE-8.91%
20,000 BMC Software, Inc. (a) (d)................... 295,203 856,250
23,000 Fiserv, Inc. (a)............................. 872,119 753,250
26,000 Microsoft Corp. (a) (d)...................... 240,741 2,535,000
28,000 Oracle Corp. (a)............................. 112,000 1,099,000
47,000 Sterling Commerce, Inc. (a).................. 554,543 1,363,000
18,100 Sterling Software, Inc. (a).................. 123,557 518,112
------------ ------------
2,198,163 7,124,612
------------ ------------
CONSTRUCTION-0.83%
11,000 Fluor Corp. (d).............................. 815,209 666,875
------------ ------------
CONTAINERS AND PACKAGING-1.00%
14,400 Crown Cork & Seal Company, Inc. (d).......... 666,688 799,200
------------ ------------
COSMETICS AND SUNDRIES-1.03%
50,000 Ultrafem, Inc. (a) (d)....................... 979,375 825,000
------------ ------------
DRUGS-2.21%
16,000 Biovail Corp. International (a) (d).......... 488,168 386,000
25,300 Forest Laboratories, Inc. (a)................ 947,014 964,562
5,000 Warner-Lambert Co............................ 421,309 420,000
------------ ------------
1,856,491 1,770,562
------------ ------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-3.77%
12,000 Intel Corp................................... 594,122 1,702,500
23,400 Motorola, Inc................................ 943,794 1,307,475
------------ ------------
1,537,916 3,009,975
------------ ------------
FINANCE SERVICES-11.08%
40,000 Emergent Group, Inc. (a)..................... 460,000 580,000
59,200 Federal National Mortgage Association........ 518,000 2,368,000
50,944 Green Tree Financial Corp.................... 669,081 1,910,400
83,250 MBNA Corp.................................... 805,564 2,664,000
17,000 MGIC Investment Corp. (d).................... 1,146,710 1,336,625
------------ ------------
3,599,355 8,859,025
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
HEALTH CARE SERVICES-6.22%
15,000 Cardinal Health, Inc......................... $ 765,175 $ 922,500
37,800 Columbia/HCA Healthcare Corp. (d)............ 1,063,738 1,587,600
15,500 Oxford Health Plans, Inc. (a)................ 707,813 864,125
12,200 PacifiCare Health Systems, Inc. (a) (d)...... 941,410 1,021,750
11,600 United Healthcare Corp....................... 605,989 578,550
------------ ------------
4,084,125 4,974,525
------------ ------------
HOTEL AND GAMING-3.75%
14,000 HFS, Inc. (a) (d)............................ 818,976 959,000
48,500 Mirage Resorts, Inc. (a)..................... 546,510 1,206,437
22,000 Sun International Hotels Ltd. (a)............ 1,052,175 836,000
------------ ------------
2,417,661 3,001,437
------------ ------------
INSURANCE-3.18%
21,000 American International Group, Inc. (d)....... 2,079,064 2,541,000
------------ ------------
MEDICAL SUPPLIES-0.63%
20,000 Steris Corp. (a)............................. 678,268 505,000
------------ ------------
MEDICAL TECHNOLOGY-4.95%
24,800 Boston Scientific Corp. (a) (d).............. 1,017,287 1,643,000
26,200 Depuy, Inc. (a).............................. 458,500 563,300
27,000 Medtronic, Inc. (and rights)................. 323,219 1,748,250
------------ ------------
1,799,006 3,954,550
------------ ------------
OIL AND GAS FIELD SERVICES-2.79%
9,000 Camco International, Inc..................... 385,221 347,625
19,400 Precision Drilling Corp. (a)................. 703,289 776,000
11,000 Schlumberger, Ltd............................ 1,027,851 1,106,875
------------ ------------
2,116,361 2,230,500
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-2.96%
11,100 Noble Affiliates, Inc. (d)................... 491,220 432,900
29,800 Nuevo Energy Co. (a)......................... 1,082,036 1,236,700
54,000 Santa Fe Energy Resources, Inc. (a) (d)...... 785,111 695,250
------------ ------------
2,358,367 2,364,850
------------ ------------
OIL-OFFSHORE DRILLING-1.14%
27,000 Falcon Drilling Co. (a) (d).................. 791,974 914,625
------------ ------------
PAPER-1.05%
24,000 U.S. Filter Corp. (a) (d).................... 755,282 840,000
------------ ------------
RETAIL-DEPARTMENT STORES-2.13%
37,000 Kohl's Corp. (a)............................. 722,598 1,702,000
------------ ------------
RETAIL-SPECIALTY-9.90%
15,000 AutoZone, Inc. (a) (d)....................... 285,450 371,250
47,000 Costco Companies, Inc. (a)................... 1,057,575 1,204,375
68,075 CUC International, Inc. (a) (d).............. 825,956 1,625,291
39,033 Home Depot, Inc.............................. 962,755 2,127,299
20,000 Lowe's Companies, Inc........................ 799,036 730,000
23,350 Office Depot, Inc. (a)....................... 207,202 443,650
31,900 Pep Boys-Manny Moe & Jack.................... 589,736 1,040,738
17,000 Staples, Inc. (a) (d)........................ 376,457 367,625
------------ ------------
5,104,167 7,910,228
------------ ------------
TELECOMMUNICATION EQUIPMENT-3.91%
41,000 Ericsson (L.M.) Telephone Co., Class B ADR... 473,513 1,293,422
46,000 Tellabs, Inc. (a)............................ 745,576 1,834,250
------------ ------------
1,219,089 3,127,672
------------ ------------
</TABLE>
22
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
TELEPHONE SERVICES-6.02%
30,000 360 Communications Co. (a)................... $ 722,229 $ 648,750
51,000 Air Touch Communications, Inc. (a) (d)....... 1,361,108 1,389,750
10,000 LCI International, Inc. (a) (d).............. 290,717 190,000
97,008 WorldCom, Inc. (a) (d)....................... 511,254 2,582,838
------------ ------------
2,885,308 4,811,338
------------ ------------
TOYS-1.99%
64,057 Mattel, Inc.................................. 377,073 1,593,418
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
UTILITIES-ELECTRIC-2.72%
24,000 AES Corp. (a)................................ $ 1,122,352 $ 1,569,000
40,100 Tucson Electric Power Co. (a) (d)............ 669,426 601,500
------------ ------------
1,791,778 2,170,500
------------ ------------
UTILITIES-TELEPHONE-1.09%
9,000 Telebras ADR (d)............................. 775,845 873,000
------------ ------------
WASTE DISPOSAL-1.04%
23,000 U.S.A. Waste Services, Inc. (a) (d).......... 821,698 828,000
------------ ------------
TOTAL COMMON STOCKS.......................... $ 49,770,057 $ 76,570,892
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-4.25%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
BANKS-4.25%
$3,394,941 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.19%............. $ 3,394,941
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$53,164,998) (b)........................... $79,965,833
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 28, 1997, the cost of securities for federal income tax
purposes was $53,164,998 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $29,091,887
Unrealized depreciation..................................... (2,291,052)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $26,800,835
- -------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Security is fully or partially on loan at February 28, 1997 See Note 1 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 9.05% of net assets as of February 28, 1997.
23
<PAGE>
FORTIS STOCK FUNDS
GROWTH FUND, INC.
Schedule of Investments
February 28, 1997 (Unaudited)
COMMON STOCKS-93.37%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
APPAREL-1.27%
190,000 Tommy Hilfiger Corp. (a)..................... $ 6,413,521 $ 10,378,750
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT-3.19%
100,400 BioChem Pharma, Inc. (a)..................... 4,220,542 5,321,200
275,000 Biogen, Inc. (a)............................. 7,347,563 13,543,750
281,600 Genzyme Corp. (a)............................ 8,570,619 7,251,200
------------- -------------
20,138,724 26,116,150
------------- -------------
BUSINESS SERVICES AND SUPPLIES-3.37%
392,400 AccuStaff, Inc. (a).......................... 10,058,822 8,142,300
215,000 Danka Business Systems plc ADR............... 9,155,328 9,003,125
285,460 First Data Corp.............................. 5,788,380 10,454,972
------------- -------------
25,002,530 27,600,397
------------- -------------
COMPUTER-COMMUNICATIONS EQUIPMENT-7.83%
430,200 3Com Corp. (a)............................... 2,003,957 14,243,653
148,500 Ascend Communications, Inc. (a).............. 5,659,780 7,759,125
163,800 Cascade Communications Corp. (a) 7,828,419 5,057,325
479,100 Cisco Systems, Inc. (a)...................... 849,654 26,649,937
212,000 FORE Systems, Inc. (a)....................... 6,736,953 7,102,000
59,600 U.S. Robotics Corp. (a)...................... 3,843,921 3,326,425
------------- -------------
26,922,684 64,138,465
------------- -------------
COMPUTER-SOFTWARE-14.25%
508,400 BMC Software, Inc. (a)....................... 5,492,697 21,765,875
471,300 Informix Corp. (a)........................... 5,216,588 8,188,837
256,400 Microsoft Corp. (a).......................... 5,382,651 24,999,000
628,850 Oracle Corp. (a)............................. 2,530,625 24,682,362
413,000 Parametric Technology Corp. (a).............. 5,983,603 23,282,875
259,435 Sterling Commerce, Inc. (a).................. 5,868,577 7,523,602
122,300 Sterling Software, Inc. (a).................. 3,164,478 3,500,837
48,350 Veritas Software Corp. (a)................... 2,213,287 1,535,112
35,500 Viasoft, Inc. (a)............................ 2,131,243 1,278,000
------------- -------------
37,983,749 116,756,500
------------- -------------
ELECTRONIC COMPONENTS-1.85%
287,100 Solectron Corp. (a).......................... 7,702,224 15,180,412
------------- -------------
ELECTRICAL EQUIPMENT-0.13%
62,000 Chicago Miniature Lamp, Inc. (a)............. 2,071,716 1,054,000
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.64%
94,900 Intel Corp................................... 2,490,817 13,463,937
------------- -------------
FINANCE SERVICES-11.79%
79,300 Advanta Corp., Class B....................... 3,935,263 3,181,912
75,000 American Express Co.......................... 4,327,568 4,903,125
330,200 Capital One Financial Corp................... 10,009,655 13,125,450
370,000 Federal National Mortgage Association........ 13,903,689 14,800,000
290,000 First USA, Inc............................... 8,397,580 14,101,250
357,000 Franklin Resources, Inc...................... 3,567,571 20,884,500
401,000 Green Tree Financial Corp.................... 13,255,860 15,037,500
331,500 MBNA Corp.................................... 8,309,637 10,608,000
------------- -------------
65,706,823 96,641,737
------------- -------------
HEALTH CARE SERVICES-7.76%
203,000 HBO & Co..................................... 4,945,695 11,697,875
534,000 Medpartners, Inc. (a)........................ 13,923,756 11,748,000
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
298,000 Oxford Health Plans, Inc. (a)................ $ 6,578,590 $ 16,613,500
110,000 PacifiCare Health Systems, Inc. (a) 6,356,484 9,212,500
205,100 PhyCor, Inc. (a)............................. 6,369,298 6,229,912
162,500 United Healthcare Corp....................... 5,954,993 8,104,688
------------- -------------
44,128,816 63,606,475
------------- -------------
HOTEL AND GAMING-1.74%
166,000 HFS, Inc. (a)................................ 9,796,395 11,371,000
82,500 Promus Hotel Corp. (a)....................... 1,449,428 2,918,438
------------- -------------
11,245,823 14,289,438
------------- -------------
MACHINERY-OIL AND WELL-4.35%
65,000 Cooper Cameron Corp. (a)..................... 4,789,876 4,257,500
130,000 Dresser Industries, Inc...................... 4,571,736 3,948,750
397,000 Input/Output, Inc. (a)....................... 8,968,629 8,485,875
451,700 Petroleum Geo-Services ADR (a)............... 11,492,122 18,971,400
------------- -------------
29,822,363 35,663,525
------------- -------------
MEDICAL SUPPLIES-0.69%
223,000 Steris Corp. (a)............................. 7,598,388 5,630,750
------------- -------------
MEDICAL TECHNOLOGY-1.46%
185,000 Medtronic, Inc. (and rights)................. 11,106,303 11,978,750
------------- -------------
OIL AND GAS FIELD SERVICES-1.37%
80,000 Schlumberger, Ltd............................ 7,819,893 8,050,000
78,300 Smith International, Inc. (a)................ 2,985,057 3,180,938
------------- -------------
10,804,950 11,230,938
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-0.24%
35,000 Anadarko Petroleum Corp...................... 2,087,817 1,968,750
------------- -------------
OIL-OFFSHORE DRILLING-2.20%
56,000 ENSCO International, Inc. (a)................ 2,379,986 2,429,000
229,000 Falcon Drilling Co. (a)...................... 7,260,156 7,757,375
234,000 Noble Drilling Corp. (a)..................... 4,121,568 4,153,500
66,700 Transocean Offshore, Inc..................... 3,849,044 3,726,863
------------- -------------
17,610,754 18,066,738
------------- -------------
RESTAURANTS AND FRANCHISING-3.56%
333,600 Lone Star Steakhouse & Saloon, Inc. (a)...... 5,339,250 8,840,400
314,700 Outback Steakhouse, Inc. (a)................. 4,826,413 7,513,463
380,300 Starbucks Corp. (a).......................... 6,435,158 12,787,588
------------- -------------
16,600,821 29,141,451
------------- -------------
RETAIL-DEPARTMENT STORES-1.49%
264,600 Kohl's Corp. (a)............................. 4,252,122 12,171,600
------------- -------------
RETAIL-SPECIALTY-7.96%
99,400 Barnes & Noble, Inc. (a)..................... 2,604,572 3,280,200
720,675 CUC International, Inc. (a).................. 8,348,471 17,206,116
208,715 Home Depot, Inc.............................. 1,650,759 11,374,968
467,375 Office Depot, Inc. (a)....................... 4,470,750 8,880,125
217,000 Republic Industries, Inc. (a)................ 7,412,510 7,703,500
624,375 Staples, Inc. (a)............................ 7,615,944 13,502,109
114,100 West Marine, Inc. (a)........................ 4,054,329 3,308,900
------------- -------------
36,157,335 65,255,918
------------- -------------
SHIP BUILDING, SHIPPING-0.48%
91,000 Tidewater, Inc............................... 3,971,428 3,913,000
------------- -------------
</TABLE>
24
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
SHOES AND LEATHER-1.01%
115,000 Nike, Inc., Class B.......................... $ 6,753,739 $ 8,265,625
------------- -------------
TELECOMMUNICATION EQUIPMENT-7.39%
466,000 ADC Telecommunications, Inc. (a)............. 7,581,716 12,582,000
199,500 Andrew Corp. (a)............................. 6,423,092 10,972,500
215,000 QUALCOMM, Inc. (a)........................... 8,515,753 11,972,813
628,000 Tellabs, Inc.(a)............................. 3,653,570 25,041,500
------------- -------------
26,174,131 60,568,813
------------- -------------
TELEPHONE SERVICES-5.58%
79,400 LCI International, Inc. (a).................. 2,398,421 1,508,600
77,000 Pacific Gateway Exchange, Inc. (a) 2,168,969 2,107,875
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
1,582,900 WorldCom, Inc. (a)........................... $ 18,728,624 $ 42,144,713
------------- -------------
23,296,014 45,761,188
------------- -------------
TRANSPORTATION-0.77%
176,400 Wisconsin Central Transportation Corp. (a)... 6,340,203 6,328,350
------------- -------------
TOTAL COMMON STOCKS.......................... $ 452,383,795 $ 765,171,657
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-6.39%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
------------ -------------
<C> <S> <C>
BANKS-4.19%
$34,333,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.19%............. $ 34,333,000
-------------
DIVERSIFIED FINANCE-0.23%
1,857,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.31%...................... 1,857,000
-------------
U.S. GOVERNMENT AGENCY-1.97%
10,000,000 Federal Home Loan Mortgage Corp., 5.24%,
3-4-1997................................... 9,994,267
6,200,000 Federal Home Loan Mortgage Corp., 5.28%,
3-4-1997................................... 6,196,418
-------------
16,190,685
-------------
TOTAL SHORT-TERM INVESTMENTS................. 52,380,685
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$504,764,480) (b).......................... $ 817,552,342
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 28, 1997, the cost of securities for federal income tax
purposes was $504,764,480 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $332,820,883
Unrealized depreciation..................................... (20,033,021)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $312,787,862
- --------------------------------------------------------------------------
</TABLE>
(c) See Note 1 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 4.40% of net assets as of February 28, 1997.
25
<PAGE>
FORTIS STOCK FUNDS
CAPITAL APPRECIATION PORTFOLIO
Schedule of Investments
February 28, 1997 (Unaudited)
COMMON STOCKS-91.43%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------ -------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-0.15%
5,000 CKS Group, Inc. (a).......................... $ 85,000 $ 167,500
------------ -------------
BEVERAGE-0.50%
59,700 Boston Beer Co. (The), Inc., Class A (a) 1,307,678 552,225
------------ -------------
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT-1.68%
35,000 BioChem Pharma, Inc. (a) (e)................. 1,500,025 1,855,000
------------ -------------
BUSINESS SERVICES AND SUPPLIES-14.88%
33,080 Accustaff, Inc, (a) (e)...................... 801,466 686,410
230,000 Acxiom Corp. (a)............................. 715,312 3,507,500
76,000 APAC TeleServices, Inc. (a) (e).............. 698,337 2,261,000
31,000 COREstaff, Inc. (a).......................... 826,888 732,375
73,000 Correctional Services Corp. (a).............. 996,894 757,375
20,000 Corrections Corp of America (a) (e).......... 598,721 570,000
60,000 Fastenal Co. (e)............................. 356,875 2,175,000
39,800 Indus Group, Inc. (a)........................ 786,523 855,700
24,300 Infinity Financial Technology, Inc. (a)...... 431,376 461,700
35,000 Precision Response Corp. (a) (e)............. 986,875 1,015,000
38,500 Romac International, Inc. (a)................ 993,050 991,375
29,400 Snyder Communications, Inc. (a).............. 591,307 793,800
15,000 Sykes Enterprises, Inc. (a).................. 681,137 485,625
47,500 TeleTech Holdings, Inc. (a) (e).............. 707,500 1,160,781
------------ -------------
10,172,261 16,453,641
------------ -------------
COMPUTER-COMMUNICATIONS EQUIPMENT-7.10%
28,000 Ascend Communications, Inc. (a) (e).......... 1,598,081 1,463,000
42,000 Cascade Communications Corp. (a)............. 1,824,686 1,296,750
67,600 Cisco Systems, Inc. (a)...................... 310,507 3,760,250
50,000 Network General Corp. (a).................... 730,268 1,106,250
12,500 Xylan Corp. (a) (e).......................... 743,750 221,875
------------ -------------
5,207,292 7,848,125
------------ -------------
COMPUTER-SOFTWARE-16.42%
15,000 Aspen Technology, Inc. (a)................... 766,517 924,375
2,400 CyberMedia, Inc. (a)......................... 38,400 33,600
34,000 HNC Software, Inc. (a) (e)................... 1,125,440 850,000
32,000 Informix Corp. (a)........................... 282,000 556,000
12,000 INSO Corp. (a) (e)........................... 597,000 415,500
72,000 Legato Systems, Inc. (a)..................... 898,500 1,458,000
25,000 Lernout and Hauspie Speech Products N.V. (a)
(e)........................................ 952,081 528,125
18,000 Netscape Communications Corp. (a) (e)........ 906,364 524,250
62,000 Parametric Technology Corp. (a).............. 304,238 3,495,250
23,200 Platinum Technology, Inc. (a)................ 326,517 345,100
28,000 Pure Atria Corp. (a) (e)..................... 1,015,064 537,250
17,000 Rational Software Corp. (a) (e).............. 641,750 439,875
39,000 Scopus Technology, Inc. (a).................. 515,091 853,125
33,800 Siebel Systems, Inc. (a) (e)................. 817,869 599,950
66,282 Sterling Commerce, Inc. (a).................. 741,645 1,922,170
32,200 Sterling Software, Inc. (a).................. 223,341 921,725
49,800 Synopsys, Inc. (a) (e)....................... 857,600 1,777,237
28,000 Vantive Corp. (a) (e)........................ 850,041 623,000
18,150 Veritas Software Corp. (a)................... 830,601 576,262
70,200 Verity, Inc. (a)............................. 870,845 688,837
2,300 Viasoft, Inc. (a)............................ 91,712 82,800
------------ -------------
13,652,616 18,152,431
------------ -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ -------------
<C> <S> <C> <C>
CONSUMER GOODS-0.71%
46,000 Seattle Film Works, Inc. (a)................. $ 736,000 $ 782,000
------------ -------------
EDUCATIONAL SERVICES-2.43%
60,000 Apollo Group, Inc., Class A (a) (e).......... 1,163,187 1,620,000
83,000 National Education Corp. (a)................. 1,391,699 1,068,625
------------ -------------
2,554,886 2,688,625
------------ -------------
ELECTRICAL EQUIPMENT-0.71%
46,500 Chicago Miniature Lamp, Inc. (a)............. 1,317,750 790,500
------------ -------------
HEALTH CARE SERVICES-8.49%
61,800 ABR Information Services, Inc. (a) (e)....... 1,397,059 1,444,575
106,000 American Oncology Resources, Inc. (a) 1,380,191 967,250
29,000 HCIA, Inc. (a)............................... 1,024,970 993,250
30,000 Medic Computer Systems, Inc. (a) (e)......... 721,680 1,080,000
53,000 Medpartners, Inc. (a) (e).................... 1,109,284 1,166,000
60,000 Omnicare, Inc................................ 592,500 1,590,000
30,000 Parexel International Corp. (a).............. 506,250 840,000
40,000 Pharmaceutical Products Development, Inc.
(a)........................................ 993,206 940,000
27,700 Transition Systems, Inc. (a)................. 598,130 370,487
------------ -------------
8,323,270 9,391,562
------------ -------------
MACHINERY-OIL AND WELL-5.62%
165,000 Input/Output, Inc. (a)....................... 486,250 3,526,875
64,000 Petroleum Geo-Services ADR (a)............... 1,127,444 2,688,000
------------ -------------
1,613,694 6,214,875
------------ -------------
MEDICAL SUPPLIES-1.84%
14,000 Idexx Laboratories, Inc. (a)................. 491,375 521,500
60,000 Steris Corp. (a)............................. 1,067,130 1,515,000
------------ -------------
1,558,505 2,036,500
------------ -------------
MISCELLANEOUS-0.56%
25,600 Envoy Corp. (a) (e).......................... 878,080 614,400
------------ -------------
OIL AND GAS FIELD SERVICES-1.11%
13,500 Camco International, Inc. (e)................ 580,962 521,437
17,500 Trico Marine Services, Inc. (a).............. 689,896 708,750
------------ -------------
1,270,858 1,230,187
------------ -------------
OIL-OFFSHORE DRILLING-1.16%
21,000 Falcon Drilling Co. (a)...................... 731,844 711,375
38,000 Marine Drilling Companies, Inc. (a).......... 612,750 574,750
------------ -------------
1,344,594 1,286,125
------------ -------------
PHARMACEUTICALS-0.82%
48,000 Covance, Inc. (a)............................ 922,349 912,000
------------ -------------
RESTAURANTS AND FRANCHISING-5.20%
67,300 Applebees International, Inc. (e)............ 1,201,960 1,699,325
24,500 Famous Dave's of America, Inc. (a)........... 194,865 171,500
24,500 Famous Dave's of America, Inc., Warrants
(a)........................................ 66,985 47,469
56,200 Lone Star Steakhouse & Saloon, Inc. (a)
(e)........................................ 258,169 1,489,300
56,250 Papa John's International, Inc. (a) (e)...... 720,625 1,371,094
47,500 Rainforest Cafe, Inc. (a) (e)................ 1,432,501 967,813
------------ -------------
3,875,105 5,746,501
------------ -------------
RETAIL-MISCELLANEOUS-1.85%
109,350 Corporate Express, Inc. (a) (e).............. 777,600 2,050,313
------------ -------------
</TABLE>
26
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ -------------
<C> <S> <C> <C>
RETAIL-SPECIALTY-7.50%
80,000 Bed, Bath & Beyond, Inc. (a)................. $ 455,000 $ 2,080,000
47,175 CUC International, Inc. (a) (e).............. 1,100,750 1,126,303
83,400 Gadzooks, Inc. (a)........................... 1,117,030 2,043,300
39,000 Just for Feet, Inc. (a) (e).................. 1,356,875 843,375
76,000 West Marine, Inc. (a) (e).................... 732,813 2,204,000
------------ -------------
4,762,468 8,296,978
------------ -------------
TELECOMMUNICATION EQUIPMENT-2.68%
61,000 ADC Telecommunications, Inc. (a)............. 980,237 1,647,000
10,500 Advanced Fibre Communications (a)............ 586,694 341,250
26,000 Pairgain Technologies, Inc. (a) (e).......... 853,776 768,625
19,700 Westell Technologies, Inc., Class A (a)
(e)........................................ 720,943 201,925
------------ -------------
3,141,650 2,958,800
------------ -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ -------------
<C> <S> <C> <C>
TELEPHONE SERVICES-6.65%
37,750 Brooks Fiber Properties, Inc. (a) (e)........ $ 1,096,750 $ 802,188
52,300 ICG Communications, Inc. (a)................. 759,413 673,363
65,000 Intermedia Communications, Inc. (a).......... 1,096,875 1,161,875
110,000 LCI International, Inc. (a) (e).............. 894,300 2,090,000
53,000 McLeod, Inc. Class A (a)..................... 1,262,301 947,375
63,000 WorldCom, Inc. (a) (e)....................... 521,933 1,677,375
------------ -------------
5,631,572 7,352,176
------------ -------------
WASTE DISPOSAL-3.37%
103,400 United Waste Systems, Inc. (a) (e)........... 1,158,950 3,722,400
------------ -------------
TOTAL COMMON STOCKS.......................... $ 71,792,203 $ 101,102,864
------------ -------------
------------ -------------
</TABLE>
SHORT-TERM INVESTMENTS-6.92%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-4.40%
$4,858,064 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.19%............. $ 4,858,064
-------------
DIVERSIFIED FINANCE-2.52%
2,790,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.31%...................... 2,790,000
-------------
TOTAL SHORT-TERM INVESTMENTS................. 7,648,064
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$79,440,267) (b)........................... $ 108,750,928
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 28, 1997, the cost of securities for federal income tax
purposes was $79,440,267 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $39,297,797
Unrealized depreciation..................................... (9,987,136)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $29,310,661
- -------------------------------------------------------------------------
</TABLE>
(c) See Note 1 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 2.91% of net assets as of February 28, 1997.
(e) Security is fully or partially on loan at February 28, 1997. See Note 1 of
accompanying Notes to Financial Statements.
27
<PAGE>
FORTIS STOCK FUNDS
Statements of Assets and Liabilities
(Unaudited)
February 28, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET
ALLOCATION VALUE
PORTFOLIO FUND
------------- ------------
<S> <C> <C>
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market (cost $136,543,937;
$18,103,836; $10,365,173;
$212,376,324; $53,164,998;
$504,764,480; and $79,440,267
respectively) (Note 1).............. $170,674,368 $19,857,130
Cash on deposit with custodian........ -- 490
Collateral for securities lending
transactions (Note 1)............... 34,467,752 --
Receivables:
Investment securities sold.......... 367,328 --
Interest and dividends.............. 830,446 44,407
Subscriptions of capital stock...... 71,722 19,382
Deferred registration costs (Note
1).................................. 42,701 30,108
Prepaid expenses...................... 14,401 7,020
------------- ------------
TOTAL ASSETS............................ 206,468,718 19,958,537
------------- ------------
LIABILITIES:
Bank overdraft........................ 17,200 --
Payable upon return of securities
loaned (Note 1)..................... 34,467,752 --
Payable for investment securities
purchased........................... 545,000 43,376
Redemptions of capital stock.......... 67,983 --
Payable for investment advisory and
management fees..................... 126,801 14,801
Payable for distribution fees......... -- 474
Accounts payable and accrued
expenses............................ 14,238 7,682
------------- ------------
TOTAL LIABILITIES....................... 35,238,974 66,333
------------- ------------
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;
and 10,000,000,000 shares;
respectively........................ 131,821,380 17,344,919
Unrealized appreciation of
investments......................... 34,130,431 1,753,294
Undistributed net investment income
(loss).............................. 499,086 20,795
Accumulated net realized gain (loss)
from the sale of investments........ 4,778,847 773,196
------------- ------------
TOTAL NET ASSETS........................ $171,229,744 $19,892,204
------------- ------------
SHARES OUTSTANDING AND NET ASSET VALUE
PER SHARE:
Class A shares (based on net assets of
$147,911,201; $15,029,011; $6,804,162;
$301,175,472; $72,985,900;
$679,453,428; and $94,392,166;
respectively and 8,628,980; 1,225,573;
562,732; 13,672,622; 1,892,641;
21,109,434; 3,443,458 shares
outstanding; respectively)............ $17.14 $12.26
------------- ------------
Class B shares (based on net assets of
$5,856,194; $1,434,642; $1,161,018;
$5,475,573; $1,998,926; $9,408,032;
and $4,934,648 respectively and
343,558; 117,626; 96,329; 251,964;
52,790; 297,439; and 182,148 shares
outstanding; respectively)............ $17.05 $12.20
------------- ------------
Class C shares (based on net assets of
$3,557,093; $531,628; $731,502;
$1,138,313; $560,066; $1,730,203; and
$1,230,824; respectively and 209,377;
43,585; 60,680; 52,418; 14,787;
54,706; and 45,409 shares outstanding;
respectively)......................... $16.99 $12.20
------------- ------------
Class H shares (based on net assets of
$13,905,256; $2,896,923; $2,792,935;
$10,618,142; $4,394,550; $26,903,745;
$10,025,240; respectively and 816,251;
237,441; 231,659; 488,565; 116,048;
850,552; and 369,794 shares
outstanding; respectively)............ $17.04 $12.20
------------- ------------
Class Z shares (based on net assets of
$0; $; $0; $; $0; $102,036,972; $0;
respectively and 0; 0; 0; 0; 0;
3,161,536; and 0 shares outstanding;
respectively)......................... -- --
------------- ------------
</TABLE>
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>
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market (cost $136,543,937;
$18,103,836; $10,365,173;
$212,376,324; $53,164,998;
$504,764,480; and $79,440,267
respectively) (Note 1)................ $11,497,644 $318,575,052 $ 79,965,833 $817,552,342 $108,750,928
Cash on deposit with custodian.......... -- -- -- 818 --
Collateral for securities lending
transactions (Note 1)................. -- 74,234,469 25,417,055 -- 36,396,785
Receivables:
Investment securities sold............ -- 146,051 48,679 2,539,072 1,931,169
Interest and dividends................ 24,323 119,708 25,681 227,651 40,529
Subscriptions of capital stock........ 30,302 35,018 4,130 32,931 --
Deferred registration costs (Note 1).... 26,066 65,109 30,153 89,488 51,096
Prepaid expenses........................ 5,582 24,914 10,106 63,984 14,405
------------ ------------- ------------- ------------- -------------
TOTAL ASSETS............................ 11,583,917 393,200,321 105,501,637 820,506,286 147,184,912
------------ ------------- ------------- ------------- -------------
LIABILITIES:
Bank overdraft........................ 19,894 27,488 7,197 -- 14,056
Payable upon return of securities
loaned (Note 1)..................... -- 74,234,469 25,417,055 -- 36,396,785
Payable for investment securities
purchased........................... 61,743 -- -- 222,274 --
Redemptions of capital stock.......... -- 273,613 59,049 176,944 82,647
Payable for investment advisory and
management fees..................... 8,623 210,146 62,707 494,160 89,780
Payable for distribution fees......... -- 5,135 1,395 11,609 3,314
Accounts payable and accrued
expenses............................ 4,040 41,970 14,792 68,919 15,452
------------ ------------- ------------- ------------- -------------
TOTAL LIABILITIES....................... 94,300 74,792,821 25,562,195 973,906 36,602,034
------------ ------------- ------------- ------------- -------------
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;
and 10,000,000,000 shares;
respectively........................ 10,332,633 181,848,437 46,498,771 459,845,748 82,683,699
Unrealized appreciation of
investments......................... 1,132,471 106,198,728 26,800,835 312,787,862 29,310,661
Undistributed net investment income
(loss).............................. 21,089 (678,130) (335,110) (2,497,665) (673,783)
Accumulated net realized gain (loss)
from the sale of investments........ 3,424 31,038,465 6,974,946 49,396,435 (737,699)
------------ ------------- ------------- ------------- -------------
TOTAL NET ASSETS........................ $11,489,617 $318,407,500 $ 79,939,442 $819,532,380 $110,582,878
------------ ------------- ------------- ------------- -------------
SHARES OUTSTANDING AND NET ASSET VALUE
PER SHARE:
Class A shares (based on net assets of
$147,911,201; $15,029,011; $6,804,162;
$301,175,472; $72,985,900;
$679,453,428; and $94,392,166;
respectively and 8,628,980; 1,225,573;
562,732; 13,672,622; 1,892,641;
21,109,434; 3,443,458 shares
outstanding; respectively)............ $12.09 $22.03 $38.56 $32.19 $27.41
------------ ------------- ------------- ------------- -------------
Class B shares (based on net assets of
$5,856,194; $1,434,642; $1,161,018;
$5,475,573; $1,998,926; $9,408,032;
and $4,934,648 respectively and
343,558; 117,626; 96,329; 251,964;
52,790; 297,439; and 182,148 shares
outstanding; respectively)............ $12.05 $21.73 $37.87 $31.63 $27.09
------------ ------------- ------------- ------------- -------------
Class C shares (based on net assets of
$3,557,093; $531,628; $731,502;
$1,138,313; $560,066; $1,730,203; and
$1,230,824; respectively and 209,377;
43,585; 60,680; 52,418; 14,787;
54,706; and 45,409 shares outstanding;
respectively)......................... $12.06 $21.72 $37.88 $31.63 $27.11
------------ ------------- ------------- ------------- -------------
Class H shares (based on net assets of
$13,905,256; $2,896,923; $2,792,935;
$10,618,142; $4,394,550; $26,903,745;
$10,025,240; respectively and 816,251;
237,441; 231,659; 488,565; 116,048;
850,552; and 369,794 shares
outstanding; respectively)............ $12.06 $21.73 $37.87 $31.63 $27.11
------------ ------------- ------------- ------------- -------------
Class Z shares (based on net assets of
$0; $; $0; $; $0; $102,036,972; $0;
respectively and 0; 0; 0; 0; 0;
3,161,536; and 0 shares outstanding;
respectively)......................... -- -- -- $32.27 --
------------ ------------- ------------- ------------- -------------
</TABLE>
29
<PAGE>
FORTIS STOCK FUNDS
Statements of Operations
(Unaudited)
For the Six-Month Period Ended February 28, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET
ALLOCATION VALUE
PORTFOLIO FUND
------------ -----------
<S> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income..................... $ 2,741,550 $ 33,658
Dividend income..................... 295,153 149,479
Fee income (Note 1)................. 33,148 --
------------ -----------
Total income.......................... 3,069,851 183,137
------------ -----------
Expenses:
Investment advisory and management
fees (Note 2)..................... 761,105 78,692
Distribution fees (Class A) (Note
2)................................ 325,773 15,204
Distribution fees (Class B) (Note
2)................................ 26,199 4,962
Distribution fees (Class C) (Note
2)................................ 15,735 1,687
Distribution fees (Class H) (Note
2)................................ 61,764 11,225
Registration fees................... 25,786 4,959
Shareholders' notices and reports... 17,753 844
Legal and auditing fees (Note 2).... 12,596 4,463
Custodian fees...................... 17,852 5,951
Directors' fees and expenses........ 4,661 595
Other............................... 6,455 694
------------ -----------
Total expenses........................ 1,275,679 129,276
------------ -----------
NET INVESTMENT INCOME (LOSS)............ 1,794,172 53,861
------------ -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 1):
Net realized gain from security
transactions........................ 6,802,854 774,275
Net change in unrealized appreciation
(depreciation) of investments....... 8,910,963 1,543,997
------------ -----------
NET GAIN (LOSS) ON INVESTMENTS.......... 15,713,817 2,318,272
------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............... $17,507,989 $2,372,133
------------ -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30
<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....................... $ 35,827 $ 540,964 $ 73,128 $ 1,303,162 $ 255,888
Dividend income....................... 82,857 573,858 129,883 631,138 8,536
Fee income (Note 1)................... -- 121,610 33,127 -- 88,148
----------- ------------ ------------ ------------ -------------
Total income............................ 118,684 1,236,432 236,138 1,934,300 352,572
----------- ------------ ------------ ------------ -------------
Expenses:
Investment advisory and management
fees (Note 2)....................... 38,148 1,325,305 387,682 3,149,086 616,253
Distribution fees (Class A) (Note
2).................................. 5,663 374,507 89,310 873,810 252,720
Distribution fees (Class B) (Note
2).................................. 3,978 24,353 8,302 42,303 25,718
Distribution fees (Class C) (Note
2).................................. 2,064 5,139 2,691 7,487 6,253
Distribution fees (Class H) (Note
2).................................. 9,436 47,570 19,450 127,043 53,002
Registration fees..................... 7,970 38,749 21,323 44,102 22,662
Shareholders' notices and reports..... 279 33,632 6,447 57,326 16,662
Legal and auditing fees (Note 2)...... 4,967 18,114 15,373 37,784 11,406
Custodian fees........................ 3,787 22,076 8,926 41,488 12,893
Directors' fees and expenses.......... 376 10,571 8,273 23,068 5,018
Other................................. 334 13,992 3,471 28,468 3,768
----------- ------------ ------------ ------------ -------------
Total expenses.......................... 77,002 1,914,008 571,248 4,431,965 1,026,355
----------- ------------ ------------ ------------ -------------
NET INVESTMENT INCOME (LOSS)............ 41,682 (677,576) (335,110) (2,497,665) (673,783)
----------- ------------ ------------ ------------ -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 1):
Net realized gain from security
transactions........................ 75,607 42,455,031 10,278,228 65,817,282 2,143,861
Net change in unrealized appreciation
(depreciation) of investments....... 1,057,425 (2,972,640) (987,458) 10,028,459 (25,111,479)
----------- ------------ ------------ ------------ -------------
NET GAIN (LOSS) ON INVESTMENTS.......... 1,133,032 39,482,391 9,290,770 75,845,741 (22,967,618)
----------- ------------ ------------ ------------ -------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............... $1,174,714 $38,804,815 $ 8,955,660 $73,348,076 $(23,641,401)
----------- ------------ ------------ ------------ -------------
</TABLE>
31
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
ASSET ALLOCATION PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED FOR THE
FEBRUARY 28, YEAR ENDED
1997 AUGUST 31,
(UNAUDITED) 1996
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income................. $ 1,794,172 $ 4,138,153
Net realized gain from security
transacations....................... 6,802,854 6,979,691
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... 8,910,963 (4,345,482)
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... 17,507,989 6,772,362
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A............................. (1,895,848) (3,826,272)
Class B............................. (54,166) (49,452)
Class C............................. (32,973) (39,801)
Class H............................. (129,182) (178,132)
From net realized gains on investments
Class A............................. (7,793,208) (2,624,363)
Class B............................. (290,387) (29,773)
Class C............................. (175,808) (27,550)
Class H............................. (669,309) (136,849)
Excess distributions of net realized
gains
Class A............................. -- (62,850)
Class B............................. -- (713)
Class C............................. -- (660)
Class H............................. -- (3,277)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (11,040,881) (6,979,692)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (592,932 and 1,434,734
shares)............................ 10,267,404 23,714,022
Class B (89,614 and 271,822
shares)............................ 1,545,295 4,477,846
Class C (60,806 and 135,425
shares)............................ 1,047,458 2,240,957
Class H (186,296 and 455,625
shares)............................ 3,205,402 7,521,002
Proceeds from shares issued as a
result of reinvested dividends
Class A (543,229 and 371,458
shares)............................ 9,080,589 6,040,653
Class B (20,425 and 4,825 shares)... 339,886 78,602
Class C (12,237 and 4,013 shares)... 202,904 64,896
Class H (45,269 and 18,172
shares)............................ 752,471 294,034
Less cost of repurchase of shares
Class A (797,780 and 1,564,760
shares)............................ (13,858,589) (25,920,903)
Class B (35,379 and 49,827
shares)............................ (612,663) (827,910)
Class C (25,152 and 25,306
shares)............................ (433,180) (415,028)
Class H (80,544 and 92,983
shares)............................ (1,386,397) (1,532,704)
-------------- --------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS............................ 10,150,580 15,735,467
-------------- --------------
TOTAL INCREASE IN NET ASSETS............ 16,617,688 15,528,137
NET ASSETS:
Beginning of period................... 154,612,056 139,083,919
-------------- --------------
End of period (includes undistributed
net investment income of $499,086
and $817,083, respectively)......... $ 171,229,744 $ 154,612,056
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
VALUE FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH FOR THE
PERIOD ENDED EIGHT-MONTH
FEBRUARY 28, PERIOD ENDED
1997 AUGUST 31,
(UNAUDITED) 1996
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income................. $ 53,861 $ 37,806
Net realized gain from security
transacations....................... 774,275 295,009
Net change in unrealized appreciation
of investments in securities........ 1,543,997 209,297
------------- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... 2,372,133 542,112
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A............................. (62,961) --
Class B............................. (2,233) --
Class C............................. (680) --
Class H............................. (4,998) --
From net realized gains on investments
Class A............................. (228,369) --
Class B............................. (19,112) --
Class C............................. (5,824) --
Class H............................. (42,783) --
------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (366,960) --
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (332,137 and 942,985
shares)............................ 3,897,577 9,635,095
Class B (59,483 and 62,863
shares)............................ 693,182 663,710
Class C (24,452 and 21,112
shares)............................ 287,235 216,052
Class H (120,446 and 156,479
shares)............................ 1,401,344 1,645,537
Proceeds from shares issued as a
result of reinvested dividends
Class A (25,044 and 0 shares)....... 287,752 --
Class B (1,855 and 0 shares)........ 21,220 --
Class C (562 and 0 shares).......... 6,429 --
Class H (4,125 and 0 shares)........ 47,188 --
Less cost of repurchase of shares
Class A (47,985 and 26,608
shares)............................ (562,475) (282,982)
Class B (3,704 and 2,871 shares).... (43,730) (31,367)
Class C (2,278 and 262 shares)...... (26,712) (2,836)
Class H (37,182 and 6,427 shares)... (439,294) (68,006)
------------- -------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS............................ 5,569,716 11,775,203
------------- -------------
TOTAL INCREASE IN NET ASSETS............ 7,574,889 12,317,315
NET ASSETS:
Beginning of period................... 12,317,315 --
------------- -------------
End of period (includes undistributed
net investment income of $20,795 and
$37,806, respectively).............. $ 19,892,204 $ 12,317,315
------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
GROWTH & INCOME FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH FOR THE
PERIOD ENDED EIGHT-MONTH
FEBRUARY 28, PERIOD ENDED
1997 AUGUST 31,
(UNAUDITED) 1996
------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income................. $ 41,682 $ 17,599
Net realized gain (loss) from security
transacations....................... 75,607 (340)
Net change in unrealized appreciation
of investments in securities........ 1,057,425 75,046
------------- ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... 1,174,714 92,305
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A............................. (18,834) (11,470)
Class B............................. (1,140) (731)
Class C............................. (633) (571)
Class H............................. (2,858) (1,955)
From net realized gains on investments
Class A............................. (42,548) --
Class B............................. (7,753) --
Class C............................. (3,591) --
Class H............................. (17,951) --
------------- ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (95,308) (14,727)
------------- ------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (291,090 and 333,814
shares)............................ 3,384,436 3,399,044
Class B (47,744 and 49,494
shares)............................ 548,275 507,825
Class C (34,787 and 31,937
shares)............................ 413,070 323,749
Class H (122,247 and 131,281
shares)............................ 1,416,122 1,342,093
Proceeds from shares issued as a
result of reinvested dividends
Class A (5,214 and 1,046 shares).... 58,551 10,774
Class B (786 and 69 shares)......... 8,854 714
Class C (367 and 55 shares)......... 4,129 561
Class H (1,794 and 189 shares)...... 20,199 1,945
Less cost of repurchase of shares
Class A (34,641 and 33,791
shares)............................ (401,525) (348,113)
Class B (1,396 and 369 shares)...... (16,319) (3,813)
Class C (3,741 and 2,725 shares).... (43,479) (28,214)
Class H (16,960 and 6,893 shares)... (195,306) (70,939)
------------- ------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS............................ 5,197,007 5,135,626
------------- ------------
TOTAL INCREASE IN NET ASSETS............ 6,276,413 5,213,204
NET ASSETS:
Beginning of period................... 5,213,204 --
------------- ------------
End of period (includes undistributed
net investment income of $21,089 and
$2,872, respectively)............... $ 11,489,617 $ 5,213,204
------------- ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
CAPITAL FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED FOR THE
FEBRUARY 28, YEAR ENDED
1997 AUGUST 31,
(UNAUDITED) 1996
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ (677,576) $ 430,785
Net realized gain from security
transacations....................... 42,455,031 24,390,863
Net change in unrealized depreciation
of investments in securities........ (2,972,640) (14,969,783)
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... 38,804,815 9,851,865
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A............................. (141,853) (570,947)
From net realized gains on investments
Class A............................. (33,985,654) --
Class B............................. (569,710) --
Class C............................. (127,620) --
Class H............................. (1,124,445) --
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (35,949,282) (570,947)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (462,775 and 987,510
shares)............................ 10,768,569 21,255,811
Class B (50,252 and 129,679
shares)............................ 1,160,071 2,771,889
Class C (14,558 and 26,449
shares)............................ 331,976 569,431
Class H (103,118 and 228,130
shares)............................ 2,405,755 4,884,573
Proceeds from shares issued as a
result of reinvested dividends
Class A (1,473,678 and 24,756
shares)............................ 31,713,557 527,539
Class B (26,674 and 0 shares)....... 567,088 --
Class C (5,891 and 0 shares)........ 125,111 --
Class H (49,765 and 0 shares)....... 1,057,495 --
Less cost of repurchase of shares
Class A (946,041 and 2,058,920
shares)............................ (21,858,787) (44,492,325)
Class B (13,837 and 13,030
shares)............................ (318,964) (276,422)
Class C (6,032 and 4,719 shares).... (134,037) (101,450)
Class H (35,578 and 48,566
shares)............................ (825,440) (1,046,356)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARE TRANSACTIONS................. 24,992,394 (15,907,310)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS.................................. 27,847,927 (6,626,392)
NET ASSETS:
Beginning of period................... 290,559,573 297,185,965
-------------- --------------
End of period (includes undistributed
net investment income (loss) of
($678,130) and $141,299,
respectively)....................... $ 318,407,500 $ 290,559,573
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
FIDUCIARY FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED FOR THE
FEBRUARY 28, YEAR ENDED
1997 AUGUST 31,
(UNAUDITED) 1996
------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment loss................... $ (335,110) $ (76,203)
Net realized gain from security
transacations....................... 10,278,228 2,132,194
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... (987,458) 638,704
------------- --------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... 8,955,660 2,694,695
------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From realized gains on investments
Class A............................. (4,977,804) (488,777)
Class B............................. (124,877) (4,787)
Class C............................. (39,354) (2,895)
Class H............................. (291,166) (14,400)
------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (5,433,201) (510,859)
------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (137,553 and 465,331
shares)............................ 5,431,280 16,670,657
Class B (15,557 and 26,078
shares)............................ 615,037 928,152
Class C (1,446 and 8,014 shares).... 56,200 287,310
Class H (34,399 and 54,592
shares)............................ 1,356,040 1,949,490
Proceeds from shares issued as a
result of reinvested dividends
Class A (127,745 and 14,130
shares)............................ 4,861,988 478,153
Class B (3,310 and 142 shares)...... 123,884 4,778
Class C (1,049 and 86 shares)....... 39,323 2,894
Class H (7,734 and 418 shares)...... 289,482 14,050
Less cost of repurchase of shares
Class A (158,936 and 471,108
shares)............................ (6,306,421) (16,785,992)
Class B (3,581 and 2,097 shares).... (139,116) (73,634)
Class C (1,228 and 2,264 shares).... (47,841) (80,818)
Class H (13,345 and 9,636 shares)... (519,531) (342,867)
------------- --------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS............................ 5,760,325 3,052,173
------------- --------------
TOTAL INCREASE IN NET ASSETS............ 9,282,784 5,236,009
NET ASSETS:
Beginning of period................... 70,656,658 65,420,649
------------- --------------
End of period (includes undistributed
net investment loss of $335,110 and
$0, respectively)................... $ 79,939,442 $ 70,656,658
------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
GROWTH FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED
FEBRUARY 28, FOR THE
1997 YEAR ENDED
(UNAUDITED) AUGUST 31, 1996
-------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment loss................... $ (2,497,665) $ (2,359,335)
Net realized gain from security
transacations....................... 65,817,282 55,740,132
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... 10,028,459 (25,027,460)
-------------- ----------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... 73,348,076 28,353,337
-------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS:
From realized gains on investments
Class A............................. (60,255,481) (34,148,693)
Class B............................. (772,004) (157,748)
Class C............................. (138,354) (26,843)
Class H............................. (2,281,779) (562,160)
Class Z............................. (8,698,046) --
-------------- ----------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (72,145,664) (34,895,444)
-------------- ----------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (1,454,951 and 2,983,653
shares)............................ 49,982,497 97,098,524
Class B (72,843 and 149,065
shares)............................ 2,490,084 4,751,941
Class C (19,353 and 26,985
shares)............................ 656,613 869,294
Class H (194,165 and 509,051
shares)............................ 6,602,536 16,308,761
Class Z (201,071 and 141,406
shares)............................ 6,806,656 4,652,413
Proceeds from shares issued as a
result of reinvested dividends
Class A (1,768,264 and 1,117,514
shares)............................ 57,892,939 32,989,062
Class B (23,892 and 5,331 shares)... 769,825 156,195
Class C (4,281 and 914 shares)...... 137,940 26,803
Class H (69,527 and 18,900
shares)............................ 2,240,092 553,959
Class Z (260,207 shares)............ 8,537,395 --
Less cost of repurchase of shares
Class A (2,058,691 and 4,694,161
shares)............................ (71,092,074) (151,752,427)
Class B (10,641 and 10,130
shares)............................ (364,756) (322,261)
Class C (2,842 and 2,105 shares).... (95,442) (67,561)
Class H (80,184 and 72,266
shares)............................ (2,715,624) (2,334,633)
Class Z (189,756 and 265,798
shares)............................ (6,547,920) (8,705,185)
Issuance of shares in connection with
fund merger (Note 3)
Class Z (0 and 3,014,406 shares).... -- 95,284,425
-------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARE TRANSACTIONS................. 55,300,761 (89,509,310)
-------------- ----------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS.................................. 56,503,173 (82,967,203)
NET ASSETS:
Beginning of period................... 763,029,207 680,062,004
-------------- ----------------
End of period (includes undistributed
net investment loss of $2,497,665
and $0, respectively)............... $ 819,532,380 $ 763,029,207
-------------- ----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED FOR THE
FEBRUARY 28, YEAR ENDED
1997 AUGUST 31,
(UNAUDITED) 1996
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment loss................... $ (673,783) $ (1,106,060)
Net realized gain from security
transacations....................... 2,143,861 2,740,699
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... (25,111,479) 12,902,794
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............... (23,641,401) 14,537,433
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From realized gains on investments
Class A............................. (4,859,553) (684,572)
Class B............................. (233,211) (11,199)
Class C............................. (58,729) (2,392)
Class H............................. (468,939) (25,057)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (5,620,432) (723,220)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (775,734 and 1,325,665
shares)............................ 25,512,382 42,940,126
Class B (54,126 and 110,699
shares)............................ 1,810,640 3,619,138
Class C (18,100 and 24,894
shares)............................ 607,454 830,232
Class H (114,004 and 222,036
shares)............................ 3,790,928 7,344,125
Proceeds from shares issued as a
result of reinvested dividends
Class A (151,622 and 22,686
shares)............................ 4,748,793 667,142
Class B (7,441 and 375 shares)...... 230,527 10,963
Class C (1,877 and 80 shares)....... 58,194 2,392
Class H (15,015 and 852 shares)..... 465,470 24,947
Less cost of repurchase of shares
Class A (772,525 and 1,023,915
shares)............................ (25,103,712) (33,115,734)
Class B (10,622 and 7,394 shares)... (346,056) (238,700)
Class C (3,685 and 3,288 shares).... (120,192) (108,889)
Class H (36,905 and 14,364
shares)............................ (1,220,808) (480,500)
-------------- --------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS............................ 10,433,620 21,495,242
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS.................................. (18,828,213) 35,309,455
NET ASSETS:
Beginning of period................... 129,411,091 94,101,636
-------------- --------------
End of period (includes undistributed
net investment loss of $673,783 and
$0, respectively)................... $ 110,582,878 $ 129,411,091
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
1. 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 funds of Fortis
Equity Portfolios, Inc. ("Fortis Equity"). The investment objectives of each
portfolio are as follows:
- The objectives of the 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. Current income is only a secondary objective. 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. The fund invests primarily in equity securities that
provide an income component.
- The objective of the Fortis Capital Fund is short and long-term capital
appreciation. Current income is only a secondary objective.
- The objective of the 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. Fortis
Growth Fund also offers Class Z 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.
Class Z shares are sold without a front-end sales charge, a contingent
deferred sales charge and has no distribution fees. Only Fortis Growth Fund
issues Class Z shares. 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. Securities for which over-the-counter market quotations
are readily available are valued on the basis of the last current bid price.
An outside pricing service may be utilized to provide such valuations. The
pricing service may employ electronic data processing techniques and/or a
matrix system to determine valuations using methods which include
consideration of yields or prices of bonds of comparable quality, type of
issue, coupon, maturity and rating indications as to value from dealers, and
general market conditions. Securities for which quotations are not readily
available are valued at fair value as determined in good faith by management
under supervision of the Board of Directors. 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.
The Asset Allocation Portfolio amortizes original issue discount, long term
bond premium, and market discount.
For the period ended February 28, 1997, 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................... $ 85,527,960 $ 86,234,721
Fortis Value Fund............................ 15,246,577 9,944,523
Fortis Growth & Income Fund.................. 4,632,847 721,242
Fortis Capital Fund.......................... 77,736,552 66,031,789
Fortis Fiduciary Fund........................ 21,584,788 16,543,803
Fortis Growth Fund........................... 149,614,430 130,596,523
Capital Appreciation Portfolio............... 24,234,686 12,842,517
</TABLE>
LENDING OF PORTFOLIO SECURITIES: At February 28, 1997, securities were on
loan to brokers from the Funds. For collateral, the Fund's 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 28, 1997 and fee income from securities lending was as follows
for the period ended February 28, 1997:
<TABLE>
<CAPTION>
Fee
Income
For the
Six-Month
Period
Ended
February
Securities 28,
On Loan Collateral 1997
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
Asset Allocation Portfolio................... $ 32,613,565 $ 34,467,752 $ 33,148
Fortis Capital Fund.......................... 70,271,570 74,234,469 121,610
Fortis Fiduciary Fund........................ 24,159,768 25,417,055 33,127
Capital Appreciation Portfolio............... 33,596,257 36,396,785 88,148
</TABLE>
39
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
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.
Net investment income and net realized gains differ for financial statement
and tax purposes primarily because of market discount recognition policies
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 Growth & Income Fund to pay quarterly distributions
from net investment income; Capital Appreciation Portfolio, Fortis Value
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 28, 1997, 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 28, 1997, was $1,779,771 which represents 1.04% 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 percent limitations specified above.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of increase and decrease
in net assets from operations during the reporting period. Actual results
could differ from those estimates.
2. PAYMENTS TO RELATED PARTIES: Fortis Advisers, Inc., (Advisers), 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, 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 daily net 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................... $ 216,531 $5,754 $1,068 $ 15,927
Value Fund................................... 60,004 316 76 1,598
Growth & Income Fund......................... 53,961 158 80 1,752
Capital Fund................................. 216,994 5,643 163 13,128
Fiduciary Fund............................... 67,964 830 18 5,002
Growth Fund.................................. 690,733 7,535 420 40,914
Capital Appreciation Portfolio............... 249,932 5,616 448 15,989
</TABLE>
For the period ended February 28, 1997, legal fees and expenses were paid as
follows to a law firm of which the secretary of the fund is a partner.
<TABLE>
<CAPTION>
Amount
<S> <C>
- ---------------------------------------------------------
Asset Allocation Portfolio................... $ 2,182
Value Fund................................... 2,479
Growth & Income Fund......................... 1,964
Capital Fund................................. 6,135
Fiduciary Fund............................... 5,951
Growth Fund.................................. 23,156
Capital Appreciation Portfolio............... 1,984
</TABLE>
3. FUND MERGER: Effective with the close of business on March 1, 1996 the
Special Portfolios, Inc.-- Stock Portfolio was merged into Fortis Growth Fund
as Class Z. The merger was approved by the shareholders of the Stock
Portfolio on February 9, 1996. Fortis Growth Fund is the surviving entity for
financial reporting and income tax purposes. The merger was accomplished by a
tax-free exchange of ; net assets of Stock Portfolio on March 1, 1996, of
$95,284,425, Stock Portfolio shares exchanged of 2,526,771 with shares issued
by Fortis Growth Z of 3,014,406; Stock Portfolio's net assets at March 1,
1996 included unrealized appreciation of $35,128,823 and capital stock of
$60,155,602. There were no net assets of Fortis Growth Fund -- Class Z prior
to this merger.
40
<PAGE>
- --------------------------------------------------------------------------------
4. 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 1997 1996 1995+ 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Net asset value, beginning of
period...................... $ 16.48 $ 16.52 $ 14.44 $ 15.43 $ 14.00 $ 13.34
--------- --------- --------- --------- --------- --------
Operations:
Investment income - net..... .19 .47 .43 .37 .42 .53
Net realized and unrealized
gain (loss) on
investments............... 1.65 .29 2.14 (.31) 1.52 .96
--------- --------- --------- --------- --------- --------
Total from operations......... 1.84 .76 2.57 .06 1.94 1.49
--------- --------- --------- --------- --------- --------
Distributions to shareholders:
From investment income -
net....................... (.23) (.47) (.40) (.33) (.51) (.82)
From net realized gains..... (.95) (.32) (.09) (.72) -- --
Excess distributions of net
realized gains............ -- (.01) -- -- -- (.01)
--------- --------- --------- --------- --------- --------
Total distributions to
shareholders................. (1.18) (.80) (.49) (1.05) (.51) (.83)
--------- --------- --------- --------- --------- --------
Net asset value, end of
period....................... $ 17.14 $ 16.48 $ 16.52 $ 14.44 $ 15.43 $ 14.00
--------- --------- --------- --------- --------- --------
Total return @................ 11.39% 4.73% 18.25% .48% 14.20% 11.55%
Net assets end of period (000s
omitted).................... $ 147,911 $ 136,656 $ 132,939 $ 119,395 $ 108,488 $ 89,674
Ratio of expenses to average
daily net assets............ 1.47%* 1.50% 1.57%* 1.55% 1.58% 1.58%
Ratio of net investment income
to average daily net
assets...................... 2.23%* 2.85% 3.31%* 2.60% 2.90% 4.05%
Portfolio turnover rate....... 53% 89% 94% 94% 103% 45%
Average Commission Paid....... $ 0.0749 $ 0.0743 $ -- $ -- $ -- $ --
</TABLE>
<TABLE>
<CAPTION>
Class B Class C Class H
------------------------------- ------------------------------ ------------------------------
ASSET ALLOCATION PORTFOLIO 1997*** 1996 1995** 1997*** 1996 1995** 1997*** 1996 1995**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period...................... $ 16.40 $ 16.46 $ 14.27 $ 16.35 $ 16.41 $ 14.27 $ 16.39 $ 16.44 $ 14.27
--------- -------- -------- -------- -------- -------- -------- -------- --------
Operations:
Investment income - net..... .14 .37 .39 .15 .37 .39 .15 .38 .39
Net realized and unrealized
gain (loss) on
investments............... 1.65 .29 2.26 1.63 .29 2.21 1.64 .29 2.24
--------- -------- -------- -------- -------- -------- -------- -------- --------
Total from operations......... 1.79 .65 2.65 1.78 .66 2.60 1.79 .67 2.63
--------- -------- -------- -------- -------- -------- -------- -------- --------
Distributions to shareholders:
From investment income -
net....................... (.19) (.39) (.37) (.19) (.39) (.37) (.19) (.39) (.37)
From net realized gains..... (.95) (.32) (.09) (.95) (.32) (.09) (.95) (.32) (.09)
Excess distributions of net
realized gains............ -- (.01) -- -- (.01) -- -- (.01) --
--------- -------- -------- -------- -------- -------- -------- -------- --------
Total distributions to
shareholders................. (1.14) (.72) (.46) (1.14) (.72) (.46) (1.14) (.72) (.46)
--------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period....................... $ 17.05 $ 16.40 $ 16.46 $ 16.99 $ 16.35 $ 16.41 $ 17.04 $ 16.39 $ 16.44
--------- -------- -------- -------- -------- -------- -------- -------- --------
Total return @................ 11.11% 4.12% 19.00% 11.08% 4.13% 18.64% 11.12% 4.19% 18.86%
Net assets end of period (000s
omitted).................... $ 5,856 $ 4,411 $ 692 $ 3,557 $ 2,641 $ 777 $13,905 $ 10,904 $ 4,676
Ratio of expenses to average
daily net assets............ 2.02%* 2.05% 2.12%* 2.02%* 2.05% 2.12%* 2.02%* 2.05% 2.12%*
Ratio of net investment income
to average daily net
assets...................... 1.67%* 2.34% 2.51%* 1.67%* 2.33% 2.52%* 1.68%* 2.32% 2.54%*
Portfolio turnover rate....... 53% 89% 94% 53% 89% 94% 53% 89% 94%
Average Commission Paid{.:}... $ 0.0749 $ 0.0743 $ -- $0.0749 $ 0.0743 $ -- $0.0749 $ 0.0743 $ --
</TABLE>
* Annualized.
** For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
*** Six-month period ended February 28, 1997.
@ These are the total returns during the period, 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.
41
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class A Class B Class C Class H
--------------------- --------------------- --------------------- ---------------------
Year Ended August 31
---------------------------------------------------------------------------------------------
VALUE FUND 1997*** 1996** 1997*** 1996** 1997*** 1996** 1997*** 1996**
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period...................... $ 10.75 $ 10.00 $ 10.70 $ 10.00 $ 10.70 $ 10.00 $ 10.70 $ 10.00
--------- --------- --------- --------- --------- --------- --------- ---------
Operations:
Investment income - net..... .05 .05 .01 -- .01 -- .01 --
Net realized and unrealized
gain (loss) on
investments............... 1.73 .70 1.73 .70 1.73 .70 1.73 .70
--------- --------- --------- --------- --------- --------- --------- ---------
Total from operations......... 1.78 .75 1.74 .70 1.74 .70 1.74 .70
--------- --------- --------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income -
net....................... (.06) -- (.03) -- (.03) -- (.03) --
From net realized gains..... (.21) -- (.21) -- (.21) -- (.21) --
--------- --------- --------- --------- --------- --------- --------- ---------
Total distributions to
shareholders................. (.27) -- (.24) -- (.24) -- (.24) --
--------- --------- --------- --------- --------- --------- --------- ---------
Net asset value, end of
period....................... $ 12.26 $ 10.75 $ 12.20 $ 10.70 $ 12.20 $ 10.70 $ 12.20 $ 10.70
--------- --------- --------- --------- --------- --------- --------- ---------
Total return@................. 16.76% 7.50% 16.40% 7.00% 16.40% 7.00% 16.40% 7.00%
Net assets end of period (000s
omitted).................... $ 15,029 $ 9,847 $ 1,434 $ 642 $ 532 $ 223 $ 2,897 $ 1,605
Ratio of expenses to average
daily net assets............ 1.47%* 1.65%* 2.22%* 2.40%* 2.22%* 2.40%* 2.22%* 2.40%*
Ratio of net investment income
to average daily net
assets...................... .85%* .75%* .11%* --%* .11%* --%* .11%* --%*
Portfolio turnover rate....... 67% 41% 67% 41% 67% 41% 67% 41%
Average commission rate
paid{.:}.................... $ 0.0667 $ 0.0521 $ 0.0667 $ 0.0521 $ 0.0667 $ 0.0521 $ 0.0667 $ 0.0521
</TABLE>
* Annualized.
** For the period from January 2, 1996 (commencement of operations) to
August 31, 1996.
*** Six-month period ended February 28, 1997.
@ 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.
<TABLE>
<CAPTION>
Class A Class B Class C Class H
------------------- --------------------- ----------------------- -----------------------
Year Ended August 31
-----------------------------------------------------------------------------------------------------
GROWTH & INCOME FUND 1997*** 1996* 1997*** 1996* 1997*** 1996* 1997*** 1996*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period.... $ 10.35 $ 10.00 $ 10.32 $ 10.00 $ 10.33 $ 10.00 $ 10.33 $ 10.00
-------- -------- -------- -------- ---------- -------- ---------- --------
Operations:
Investment income -
net.................. .07 .07 .03 .04 .03 .04 .03 .04
Net realized and
unrealized gain
(loss) on
investments.......... 1.81 .34 1.82 .32 1.82 .33 1.82 .33
-------- -------- -------- -------- ---------- -------- ---------- --------
Total from operations.... 1.88 .41 1.85 .36 1.85 .37 1.85 .37
-------- -------- -------- -------- ---------- -------- ---------- --------
Distributions to
shareholders:
From investment income
- net................ (.05) (.06) (.02) (.04) (.02) (.04) (.02) (.04)
From net realized
gains................ (.10) -- (.10) -- (.10) -- (.10) --
-------- -------- -------- -------- ---------- -------- ---------- --------
Total distributions to
shareholders............ (.15) (.06) (.04) (.04) (.04) (.04) (.04) (.04)
-------- -------- -------- -------- ---------- -------- ---------- --------
Net asset value, end of
period.................. $ 12.09 $ 10.35 $ 12.05 $ 10.32 $ 12.06 $ 10.33 $ 12.06 $ 10.33
-------- -------- -------- -------- ---------- -------- ---------- --------
Total return@............ 18.44% 4.11% 18.04% 3.55% 18.03% 3.65% 18.03% 3.65%
Net assets end of period
(000s omitted)......... $ 6,804 $ 3,117 $ 1,161 $ 508 $ 732 $ 302 $ 2,793 $ 1,286
Ratio of expenses to
average daily net
assets................. 1.71%** 2.33%** 2.46%** 3.08%** 2.46%** 3.08%** 2.46%** 3.08%
Ratio of net investment
income to average daily
net assets............. 1.39%** 1.16%** .65%** .35%** .66%** .54%** .65%** .44%
Portfolio turnover
rate................... 11% 5% 11% 5% 11% 5% 11% 5%
Average commission rate
paid{.:}............... $0.0587 $ 0.0597 $0.0587 $ 0.0597 $0.0587 $ 0.0597 $0.0587 $ 0.0597
</TABLE>
* For the period from January 2, 1996 (commencement of operations) to
August 31, 1996.
** Annualized.
*** Six-month period ended February 28, 1997.
@ 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.
42
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class A
-----------------------------------------------------------------------
Year Ended August 31
-----------------------------------------------------------------------
CAPITAL FUND 1997 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning
of period............... $ 21.89 $ 21.22 $ 18.36 $ 18.12 $ 17.86 $ 16.50
--------- --------- --------- --------- --------- ---------
Operations:
Investment income -
net................... (.04) .04 .08 .07 .14 .13
Net realized and
unrealized gain (loss)
on investments........ 2.92 .67 3.62 1.73 1.25 1.63
--------- --------- --------- --------- --------- ---------
Total from operations..... 2.88 .71 3.70 1.80 1.39 1.76
--------- --------- --------- --------- --------- ---------
Distributions to
shareholders:
From investment income -
net................... (.01) (.04) (.08) (.12) (.09) (.11)
From net realized
gains................. (2.73) -- (.76) (1.44) (1.04) (.29)
--------- --------- --------- --------- --------- ---------
Total distributions to
shareholders............. (2.74) (.04) (.84) (1.56) (1.13) (.40)
--------- --------- --------- --------- --------- ---------
Net asset value, end of
period................... $ 22.03 $ 21.89 $ 21.22 $ 18.36 $ 18.12 $ 17.86
--------- --------- --------- --------- --------- ---------
Total return.............. 13.46% 3.36% 21.49% 10.56% 7.88% 10.77%
Net assets end of period
(000s omitted).......... $ 301,175 $ 277,587 $ 291,263 $ 245,776 $ 246,369 $ 223,865
Ratio of expenses to
average daily net
assets.................. 1.17%* 1.21% 1.24% 1.21% 1.22% 1.23%
Ratio of net investment
income to average daily
net assets.............. (.39%)* .17% .42% .41% .77% .72%
Portfolio turnover rate... 23% 28% 14% 41% 68% 18%
Average Commission Paid... $ 0.0720 $ 0.0718 $ -- $ -- $ -- $ --
</TABLE>
<TABLE>
<CAPTION>
Class B Class C Class H
------------------------------ ------------------------------- ------------------------------
CAPITAL FUND 1997*** 1996 1995** 1997*** 1996 1995** 1997*** 1996 1995**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period............... $ 21.69 $ 21.14 $ 18.35 $ 21.68 $ 21.13 $ 18.35 $ 21.69 $ 21.14 $ 18.35
-------- -------- -------- -------- -------- -------- -------- -------- --------
Operations:
Investment income -
net................... (.09) (.12) -- (.09) (.12) -- (.09) (.12) --
Net realized and
unrealized gain (loss)
on investments........ 2.86 .67 3.58 2.86 .67 3.57 2.86 .67 3.58
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total from operations..... 2.77 .55 3.58 2.77 .55 3.57 2.77 .55 3.58
-------- -------- -------- -------- -------- -------- -------- -------- --------
Distributions to
shareholders:
From investment income -
net................... -- -- (.03) -- -- (.03) -- -- (.03)
From net realized
gains................. (2.73) -- (.76) (2.73) -- (.76) (2.73) -- (.76)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total distributions to
shareholders............. (2.73) -- (.79) (2.73) -- (.79) (2.73) -- (.79)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period................... $ 21.73 $ 21.69 $ 21.14 $ 21.72 $ 21.68 $ 21.13 $ 21.73 $ 21.69 $ 21.14
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total return@............. 13.05% 2.60% 20.74% 13.06% 2.60% 20.68% 13.06% 2.60% 20.74%
Net assets end of period
(000s omitted).......... $ 5,476 $ 4,097 $ 1,527 $ 1,138 $ 824 $ 344 $10,618 $ 8,052 $ 4,052
Ratio of expenses to
average daily net
assets.................. 1.92%* 1.96% 1.99%* 1.92%* 1.96% 1.99%* 1.92%* 1.96% 1.99%*
Ratio of net investment
income to average daily
net assets.............. (1.16%)* (.60%) (.36%)* (1.18%)* (.60%) (.36%)* (1.15%)* (.60%) (.37%)*
Portfolio turnover rate... 23% 28% 14% 23% 28% 14% 23% 28% 14%
Average Commission
Paid{.:}................ $0.0720 $ 0.0718 $ -- $0.0720 $ 0.0718 $ -- $0.0720 $ 0.0718 $ --
</TABLE>
* Annualized.
** For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
*** Six-month period ended February 28, 1997.
@ These are the total returns during the period, 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.
43
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class A
---------------------------------------------------------------
Year Ended August 31
---------------------------------------------------------------
FIDUCIARY FUND, INC. 1997 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
Net asset value,
beginning of
period............ $ 36.75 $ 35.54 $ 30.23 $ 30.07 $ 28.74 $ 26.77
-------- -------- -------- -------- -------- --------
Operations:
Investment income
- net........... (.15) (.03) (.16) (.14) (.09) .04
Net realized and
unrealized gain
(loss) on
investments..... 4.84 1.50 6.68 2.99 3.11 2.68
-------- -------- -------- -------- -------- --------
Total from
operations......... 4.69 1.47 6.52 2.85 3.02 2.72
-------- -------- -------- -------- -------- --------
Distributions to
shareholders:
From investment
income - net.... -- -- -- -- -- (.11)
From net realized
gains........... (2.88) (.26) (1.21) (2.69) (1.69) (.64)
-------- -------- -------- -------- -------- --------
Total distributions
to shareholders.... (2.88) (.26) (1.21) (2.69) (1.69) (.75)
-------- -------- -------- -------- -------- --------
Net asset value, end
of period.......... $ 38.56 $ 36.75 $ 35.54 $ 30.23 $ 30.07 $ 28.74
-------- -------- -------- -------- -------- --------
Total return........ 12.86% 4.18% 22.71% 10.17% 10.58% 10.28%
Net assets end of
period (000s
omitted).......... $ 72,986 $ 65,641 $ 63,195 $ 48,833 $ 47,543 $ 43,504
Ratio of expenses to
average daily net
assets............ 1.41%* 1.42% 1.62% 1.45% 1.45% 1.47%
Ratio of net
investment income
to average daily
net assets........ (.80%)* (.07%) (.53%) (.45%) (.31%) .14%
Portfolio turnover
rate.............. 22% 30% 12% 25% 53% 26%
Average Commission
Paid.............. $ 0.0711 $ 0.0715 $ -- $ -- $ -- $ --
</TABLE>
<TABLE>
<CAPTION>
Class B Class C Class H
------------------------------- -------------------------------- --------------------------------
FIDUCIARY FUND, INC. 1997*** 1996 1995* 1997*** 1996 1995* 1997*** 1996 1995*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of
period............ $ 36.26 $ 35.35 $ 30.15 $ 36.32 $ 35.40 $ 30.15 $ 36.26 $ 35.35 $ 30.15
-------- -------- -------- -------- -------- -------- -------- -------- --------
Operations:
Investment income
- net........... (.35) (.33) (.13) (.40) (.32) (.12) (.35) (.33) (.17)
Net realized and
unrealized gain
(loss) on
investments..... 4.84 1.50 6.54 4.84 1.50 6.58 4.84 1.50 6.58
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total from
operations......... 4.49 1.17 6.41 4.44 1.18 6.46 4.49 1.17 6.41
-------- -------- -------- -------- -------- -------- -------- -------- --------
Distributions to
shareholders:
From net realized
gains........... (2.88) (.26) (1.21) (2.88) (.26) (1.21) (2.88) (.26) (1.21)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total distributions
to shareholders.... (2.88) (.26) (1.21) (2.88) (.26) (1.21) (2.88) (.26) (1.21)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end
of period.......... $ 37.87 $ 36.26 $ 35.35 $ 37.88 $ 36.32 $ 35.40 $ 37.87 $ 36.26 $ 35.35
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total return@....... 12.48% 3.35% 22.38% 12.31% 3.38% 22.55% 12.48% 3.35% 22.38%
Net assets end of
period (000s
omitted).......... $ 1,999 $ 1,360 $ 473 $ 560 $ 491 $ 272 $ 4,395 $ 3,164 $ 1,481
Ratio of expenses to
average daily net
assets............ 2.16%** 2.17% 2.37%** 2.16%** 2.17% 2.37%** 2.16%** 2.17% 2.37%*
Ratio of net
investment income
to average daily
net assets........ (1.56%)** (.78%) (1.31%)** (1.55%)** (.82%) (1.31%)** (1.56%)** (.80%) (1.29%)*
Portfolio turnover
rate.............. 22% 30% 12% 22% 30% 12% 22% 30% 12%
Average Commission
Paid{.:}.......... $0.0711 $ 0.0715 $ -- $0.0711 $ 0.0715 $ -- $0.0711 $ 0.0715 $ --
</TABLE>
* For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
@ These are the total returns during the period, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
** Annualized.
*** Six-month period ended February 28, 1997.
{.:} 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>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class A
---------------------------------------------------------------------
Year Ended August 31 Class B
--------------------------------------------------------------------- ------------------------------
GROWTH FUND 1997**** 1996 1995 1994 1993 1992 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period.... $ 32.14 $ 32.66 $ 26.25 $ 29.09 $ 24.31 $ 24.40 $ 31.75 $ 32.48 $ 25.85
--------- --------- --------- --------- --------- --------- -------- -------- --------
Operations:
Investment income -
net.................. (.10) (.11) (.04) (.10) (.06) .05 (.27) (.32) (.13)
Net realized and
unrealized gain
(loss) on
investments.......... 3.22 1.30 6.95 (.88) 5.52 1.16 3.22 1.30 7.26
--------- --------- --------- --------- --------- --------- -------- -------- --------
Total from operations.... 3.12 1.19 6.91 (.98) 5.46 1.21 2.95 .98 7.13
--------- --------- --------- --------- --------- --------- -------- -------- --------
Distributions to
shareholders:
From investment income
- net................ -- -- -- -- (.04) (.02) -- -- --
From net realized
gains................ (3.07) (1.71) (.50) (1.86) (.64) (1.28) (3.07) (1.71) (.50)
--------- --------- --------- --------- --------- --------- -------- -------- --------
Total distributions to
shareholders............ (3.07) (1.71) (.50) (1.86) (.68) (1.30) (3.07) (1.71) (.50)
--------- --------- --------- --------- --------- --------- -------- -------- --------
Net asset value, end of
period.................. $ 32.19 $ 32.14 $ 32.66 $ 26.25 $ 29.09 $ 24.31 $ 31.63 $ 31.75 $ 32.48
--------- --------- --------- --------- --------- --------- -------- -------- --------
Total return............. 9.55% 4.09% 26.92% (3.77%) 22.69% 4.72% 9.11% 3.45% 28.17%
Net assets end of period
(000s omitted)......... $679,453 $ 641,061 $ 670,753 $ 558,589 $ 585,117 $ 473,258 $ 9,408 $ 6,710 $ 2,179
Ratio of expenses to
average daily net
assets................. 1.06%* 1.09% 1.13% 1.09% 1.10% 1.13% 1.81% 1.84% 1.88%*
Ratio of net investment
income to average daily
net assets............. (.59%)* (.33%) (.13%) (.36%) (.20%) .24% (1.34%) (1.07%) (1.09%)*
Portfolio turnover
rate................... 17% 32% 27% 23% 49% 33% 17% 32% 27%
Average Commission
Paid................... $ 0.0680 $ 0.0709 $ -- $ -- $ -- $ -- $ 0.0680 $ 0.0709 $ --
</TABLE>
<TABLE>
<CAPTION>
Class C Class H Class Z
------------------------------ -------------------------------- ----------------------
GROWTH FUND 1997**** 1996 1995** 1997**** 1996 1995** 1997**** 1996***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period.... $ 31.75 $ 32.49 $ 25.85 $ 31.75 $ 32.49 $ 25.85 $ 32.18 $ 31.61
-------- -------- -------- -------- -------- -------- --------- --------
Operations:
Investment income -
net.................. (.27) (.33) (.10) (.27) (.33) (.11) (.06) --
Net realized and
unrealized gain
(loss) on
investments.......... 3.22 1.30 7.24 3.22 1.30 7.25 3.22 .57
-------- -------- -------- -------- -------- -------- --------- --------
Total from operations.... 2.95 .97 7.14 2.95 .97 7.14 3.16 .57
-------- -------- -------- -------- -------- -------- --------- --------
Distributions to
shareholders:
From net realized
gains................ (3.07) (1.71) (.50) (3.07) (1.71) (.50) (3.07) --
-------- -------- -------- -------- -------- -------- --------- --------
Total distributions to
shareholders............ (3.07) (1.71) (.50) (3.07) (1.71) (.50) (3.07) --
-------- -------- -------- -------- -------- -------- --------- --------
Net asset value, end of
period.................. $ 31.63 $ 31.75 $ 32.49 $ 31.63 $ 31.75 $ 32.49 $ 32.27 $ 32.18
-------- -------- -------- -------- -------- -------- --------- --------
Total return@............ 9.11% 3.41% 28.21% 9.11% 3.41% 28.21% 9.66% 1.80%
Net assets end of period
(000s omitted)......... $ 1,730 $ 1,077 $ 264 $26,904 $ 21,176 $ 6,867 $102,037 $93,006
Ratio of expenses to
average daily net
assets................. 1.81% 1.84% 1.88%* 1.81% 1.84%* 1.88%* .81%* .84%*
Ratio of net investment
income to average daily
net assets............. (1.34%) (1.07%) (1.10%)* (1.34%) (1.07%)* (1.10%)* (.34%)* .01%*
Portfolio turnover
rate................... 17% 32% 27% 17% 32% 27% 17% 32%
Average Commission
Paid{.:}............... $0.0680 $ 0.0709 $ -- $0.0680 $ 0.0709 $ -- $ 0.0680 $0.0709
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
* Annualized.
** For the period from November 14, 1994 to August 1995.
*** For the period from March 1, 1996 (commencement of operations) to
August 31, 1996.
**** Six-month period ended February 28, 1997.
{.:} In accordance with new SEC guidelines under the 1934 Act, beginning in
1996 average commission rate during a funds' fiscal year must be
disclosed.
45
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class A
----------------------------------------------------------------
Year Ended August 31 For the Year Ended October 31,
CAPITAL APPRECIATION ------------------------------- ------------------------------
PORTFOLIO 1997*** 1996 1995+ 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------
Net asset value,
beginning of period.... $ 34.76 $ 30.67 $ 23.05 $ 27.38 $ 19.85 $ 19.80
-------- --------- -------- -------- -------- --------
Operations:
Investment income -
net.................. (.16) (.29) (.17) (.12) (.30) (.17)
Net realized and
unrealized gain
(loss) on
investments.......... (5.74) 4.61 7.79 (2.45) 7.83 .22
-------- --------- -------- -------- -------- --------
Total from operations.... (5.90) 4.32 7.62 (2.57) 7.53 .05
-------- --------- -------- -------- -------- --------
Distributions to
shareholders:
From net realized
gains................ (1.45) (.23) -- (1.76) -- --
-------- --------- -------- -------- -------- --------
Net asset value, end of
period.................. $ 27.41 $ 34.76 $ 30.67 $ 23.05 $ 27.38 $ 19.85
-------- --------- -------- -------- -------- --------
Total return............. (17.49%) 14.21% 33.06% (9.56%) 37.93% .25%
Net assets end of period
(000s omitted)......... $94,392 $ 114,310 $ 90,918 $ 68,352 $ 58,434 $ 43,207
Ratio of expenses to
average daily net
assets................. 1.51%* 1.56% 1.69%* 1.62% 1.62% 1.68%
Ratio of net investment
income to average daily
net assets............. (.97%)* (.96%) (.82%)* (.61%) (1.23%) (.88%)
Portfolio turnover
rate................... 11% 34% 21% 36% 60% 43%
Average Commission
Paid................... $0.0605 $ 0.0691 $ -- $ -- $ -- $ --
</TABLE>
<TABLE>
<CAPTION>
Class B Class C Class H
CAPITAL APPRECIATION ------------------------------ ------------------------------ ------------------------------
PORTFOLIO 1997*** 1996 1995** 1997*** 1996 1995** 1997*** 1996 1995**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period.... $ 34.46 $ 30.57 $ 22.45 $ 34.48 $ 30.58 $ 22.45 $ 34.48 $ 30.58 $ 22.45
-------- -------- -------- -------- -------- -------- -------- -------- --------
Operations:
Investment income -
net.................. (.23) (.49) (.35) (.23) (.48) (.36) (.23) (.48) (.36)
Net realized and
unrealized gain
(loss) on
investments.......... (5.69) 4.61 8.47 (5.69) 4.61 8.49 (5.69) 4.61 8.49
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total from operations.... (5.92) 4.12 8.12 (5.92) 4.13 8.13 (5.92) 4.13 8.13
-------- -------- -------- -------- -------- -------- -------- -------- --------
Distributions to
shareholders:
From net realized
gains................ (1.45) (.23) -- (1.45) (.23) -- (1.45) (.23) --
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period.................. $ 27.09 $ 34.46 $ 30.57 $ 27.11 $ 34.48 $ 30.58 $ 27.11 $ 34.48 $ 30.58
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total return@............ (17.71%) 13.60% 36.17% (17.70%) 13.62% 36.21% (17.70%) 13.62% 36.21%
Net assets end of period
(000s omitted)......... $ 4,935 $ 4,522 $ 841 $ 1,231 $ 1,004 $ 227 $10,025 $ 9,575 $ 2,115
Ratio of expenses to
average daily net
assets................. 2.06%* 2.11% 2.24%* 2.06%* 2.11% 2.24%* 2.06%* 2.11% 2.24%*
Ratio of net investment
income to average daily
net assets............. (1.53%)* (1.47%) (1.61%)* (1.54%)* (1.46%) (1.62%)* (1.52%)* (1.46%) (1.62%)*
Portfolio turnover
rate................... 11% 34% 21% 11% 34% 21% 11% 34% 21%
Average Commission
Paid{.:}............... $0.0605 $ 0.0691 $ -- $0.0605 $ 0.0691 $ -- $0.0605 $ 0.0691 $ --
</TABLE>
* Annualized.
** For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
*** Six-month period ended February 28, 1997.
@ These are the total returns during the period, 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.
46
<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 INTERIM PRESIDENT, HAVERFORD COLLEGE.
PRIOR TO JULY 1996, PRESIDENT
MACALESTER COLLEGE
Benjamin S. Jaffray CHAIRMAN, SHEFFIELD GROUP, LTD.
Jean L. King PRESIDENT, COMMUNI-KING
Dean C. Kopperud CHIEF EXECUTIVE OFFICER AND DIRECTOR,
FORTIS ADVISERS, INC. PRESIDENT AND
DIRECTOR, FORTIS INVESTORS, INC.
SENIOR VICE PRESIDENT AND DIRECTOR,
FORTIS BENEFITS INSURANCE COMPANY AND
TIME INSURANCE COMPANY
Edward M. Mahoney PRIOR TO JANUARY, 1995, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER, FORTIS
ADVISERS, INC., FORTIS INVESTORS,
INC.
Robb L. Prince FINANCIAL AND EMPLOYEE BENEFIT
CONSULTANT PRIOR TO JULY, 1995, VICE
PRESIDENT AND TREASURER, JOSTENS,
INC.
Leonard J. Santow PRINCIPAL, GRIGGS & SANTOW, INC.
Noel Shadko MARKETING CONSULTANT PRIOR TO MAY,
1996, SENIOR VICE PRESIDENT OF
MARKETING & STRATEGIC PLANNING,
ROLLERBLADE, INC.
Joseph M. Wikler INVESTMENT CONSULTANT AND PRIVATE
INVESTOR PRIOR TO JANUARY, 1994,
DIRECTOR OF RESEARCH, CHIEF
INVESTMENT OFFICER, PRINCIPAL, AND
DIRECTOR, THE ROTHSCHILD CO.
OFFICERS
Dean C. Kopperud
PRESIDENT AND DIRECTOR
Robert W. Beltz, Jr.
VICE PRESIDENT
James S. Byrd
VICE PRESIDENT
Tamara L. Fagely
VICE PRESIDENT AND TREASURER
Howard G. Hudson
VICE PRESIDENT
David A. Peterson
VICE PRESIDENT
Scott R. Plummer
VICE PRESIDENT
Rhonda J. Schwartz
VICE PRESIDENT
Gary N. Yalen
VICE PRESIDENT
Michael J. Radmer
SECRETARY
INVESTMENT MANAGER, REGISTRAR Fortis Advisers, Inc.
AND TRANSFER AGENT BOX 64284, ST. PAUL, MINNESOTA 55164
PRINCIPAL UNDERWRITER Fortis Investors, Inc.
BOX 64284, ST. PAUL, MINNESOTA 55164
CUSTODIAN Norwest Bank Minnesota, N.A.
MINNEAPOLIS, MINNESOTA
GENERAL COUNSEL Dorsey & Whitney LLP
MINNEAPOLIS, MINNESOTA
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
MINNEAPOLIS, MINNESOTA
The use of this material is authorized only when preceded or accompanied by a
prospectus.
47
<PAGE>
FORTIS FINANCIAL GROUP'S OTHER PRODUCTS AND SERVICES
MUTUAL Fortis Bond Funds MONEY FUND
FUNDS/PORTFOLIOS U.S. GOVERNMENT
CONVENIENT ACCESS TO SECURITIES FUND
A BROAD RANGE OF TAX-FREE MINNESOTA
SECURITIES PORTFOLIO
TAX-FREE NATIONAL
PORTFOLIO
HIGH YIELD PORTFOLIO
Fortis Stock Funds ASSET ALLOCATION
PORTFOLIO
VALUE FUND
GROWTH & INCOME FUND
CAPITAL FUND
FIDUCIARY FUND
GLOBAL GROWTH PORTFOLIO
GROWTH FUND
CAPITAL APPRECIATION
PORTFOLIO
FIXED AND VARIABLE Fortis Opportunity Fixed FIXED ACCOUNT
ANNUITIES & Variable Annuity MONEY MARKET SUBACCOUNT
TAX-DEFERRED Masters Variable Annuity U.S. GOVERNMENT
INVESTING SECURITIES SUBACCOUNT
DIVERSIFIED INCOME
SUBACCOUNT
GLOBAL BOND SUBACCOUNT
HIGH YIELD SUBACCOUNT
ASSET ALLOCATION
SUBACCOUNT
GLOBAL ASSET ALLOCATION
SUBACCOUNT
VALUE SUBACCOUNT
GROWTH & INCOME
SUBACCOUNT
S&P 500 INDEX SUBACCOUNT
BLUE CHIP STOCK
SUBACCOUNT
GLOBAL GROWTH SUBACCOUNT
GROWTH STOCK SUBACCOUNT
INTERNATIONAL STOCK
SUBACCOUNT
AGGRESSIVE GROWTH
SUBACCOUNT
Fortune Fixed Annuities SINGLE PREMIUM ANNUITY
FLEXIBLE PREMIUM ANNUITY
Income Annuities GUARANTEED FOR LIFE
GUARANTEED FOR A
SPECIFIED PERIOD
LIFE Wall Street Series FIXED ACCOUNT
INSURANCE PROTECTION Variable Universal Life MONEY MARKET SUBACCOUNT
AND TAX-DEFERRED Insurance U.S. GOVERNMENT
INVESTMENT SECURITIES SUBACCOUNT
OPPORTUNITY DIVERSIFIED INCOME
SUBACCOUNT
GLOBAL BOND SUBACCOUNT
HIGH YIELD SUBACCOUNT
ASSET ALLOCATION
SUBACCOUNT
GLOBAL ASSET ALLOCATION
SUBACCOUNT
VALUE SUBACCOUNT
GROWTH & INCOME
SUBACCOUNT
S&P 500 INDEX SUBACCOUNT
BLUE CHIP STOCK
SUBACCOUNT
GLOBAL GROWTH SUBACCOUNT
GROWTH STOCK SUBACCOUNT
INTERNATIONAL STOCK
SUBACCOUNT
AGGRESSIVE GROWTH
SUBACCOUNT
Adaptable Life
Universal Life
FORTIS FINANCIAL GROUP manages and distributes mutual funds, annuities and life
insurance products. The mutual funds, variable life and variable annuity
products are distributed through FORTIS INVESTORS, INC. and managed by FORTIS
ADVISERS, INC. The insurance products are issued by FORTIS BENEFITS INSURANCE
COMPANY, FIRST FORTIS LIFE INSURANCE COMPANY and TIME INSURANCE COMPANY.
FOR MORE COMPLETE INFORMATION, INCLUDING CHARGES AND EXPENSES, SEND FOR A
PROSPECTUS. WRITE TO: FORTIS INVESTORS, INC., P.O. BOX 64284, ST. PAUL, MN
55164. READ IT CAREFULLY BEFORE INVESTING OR SENDING MONEY.
48
<PAGE>
Fortis Financial Group
Fortis Financial Group (FFG) provides solutions for customers' financial
needs using mutual funds, annuities and life insurance. Besides our own
array of quality products, we create and deliver customized products for
other financial service providers. Like the Fortis name, which comes from the
Latin for strong and steadfast, we concentrate on the customer relationships
we build, the services we provide, the solutions we offer and the performance
we seek.
FFG includes Fortis Advisers, Inc., an established money manager, as well as
Fortis Investors, Inc., a broker dealer with nationwide sales and market
influence. The guarantees in our insurance products are underwritten by
Fortis Benefits Insurance Company and Time Insurance Company.
[PHOTO]
Fortis Financial Group is part of Fortis, Inc., a financial services company
that provides specialty insurance and investment products to individuals,
businesses, associations and other financial services organizations in the
United States. Fortis, Inc. is part of Fortis, a worldwide group of companies
active in the fields of insurance, banking and investments. Fortis is jointly
owned by Fortis AMEV of The Netherlands and Fortis AG of Belgium.
For more information, call your investment representative or Fortis at
(800) 800-2638.
[LOGO] ---------------
FORTIS FINANCIAL GROUP Bulk Rate
P.O BOX 64284 U.S. Postage
ST. PAUL, MN 55164 Permit No. 3794
Minneapolis, MN
FORTIS STOCK FUNDS ---------------
[LOGO] Printed on recycled paper with
40% preconsumer waste and 10%
post consumer waste. Please recycle.
[LOGO] and Fortis-Registered Trademark- are registered servicemarks of Fortis
AMEV and Fortis AG.
98356 (4/97)
