<PAGE>
FORTIS-Registered Trademark-
INVEST FOR GROWTH
OPPORTUNITIES ...
FORTIS
STOCK FUNDS
ANNUAL REPORT
August 31, 1997
<PAGE>
CONTENTS
LETTER TO SHAREHOLDERS 2
SCHEDULE OF INVESTMENTS
FORTIS ASSET ALLOCATION PORTFOLIO 11
FORTIS VALUE FUND 17
FORTIS GROWTH & INCOME FUND 19
FORTIS CAPITAL FUND 22
FORTIS FIDUCIARY FUND 24
FORTIS GROWTH FUND 26
FORTIS CAPITAL APPRECIATION PORTFOLIO 28
STATEMENTS OF ASSETS AND LIABILITIES 30
STATEMENTS OF OPERATIONS 32
STATEMENTS OF CHANGES IN NET ASSETS
FORTIS ASSET ALLOCATION PORTFOLIO 34
FORTIS VALUE FUND 35
FORTIS GROWTH & INCOME FUND 36
FORTIS CAPITAL FUND 37
FORTIS FIDUCIARY FUND 38
FORTIS GROWTH FUND 39
FORTIS CAPITAL APPRECIATION PORTFOLIO 40
NOTES TO FINANCIAL STATEMENTS 41
INDEPENDENT AUDITORS' REPORT 49
FEDERAL TAX INFORMATION 50
BOARD OF DIRECTORS AND OFFICERS 51
OTHER PRODUCTS AND SERVICES 52
TOLL-FREE PERSONAL ASSISTANCE
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- (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 YEAR ENDED AUGUST 31, 1997
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS H CLASS Z
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
FORTIS ASSET ALLOCATION PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 16.48 $ 16.40 $ 16.35 $ 16.39
End of period.............................. $ 18.98 $ 18.87 $ 18.81 $ 18.86
TOTAL RETURN 24.62% 23.92% 23.93% 23.93%
DISTRIBUTIONS PER SHARE:
From net investment income................. $ 0.409 $ 0.321 $ 0.321 $ 0.321
From net realized gains on investments..... $ 0.950 $ 0.950 $ 0.950 $ 0.950
FORTIS VALUE FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 10.75 $ 10.70 $ 10.70 $ 10.70
End of period.............................. $ 13.51 $ 13.39 $ 13.39 $ 13.39
TOTAL RETURN 28.66% 27.75% 27.75% 27.75%
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 & INCOME FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 10.35 $ 10.32 $ 10.33 $ 10.33
End of period.............................. $ 13.06 $ 13.03 $ 13.03 $ 13.03
TOTAL RETURN 29.00% 28.16% 28.03% 28.03%
DISTRIBUTIONS PER SHARE:
From net investment income................. $ 0.156 $ 0.069 $ 0.069 $ 0.069
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.............................. $ 26.13 $ 25.67 $ 25.68 $ 25.68
TOTAL RETURN 34.57% 33.55% 33.68% 33.61%
DISTRIBUTIONS PER SHARE:
From net investment income................. $ 0.011 -- -- --
From net realized gains on investments..... $ 2.730 $ 2.730 $ 2.730 $ 2.730
FORTIS FIDUCIARY FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 36.75 $ 36.26 $ 36.32 $ 36.26
End of period.............................. $ 46.15 $ 45.15 $ 45.17 $ 45.16
TOTAL RETURN 35.08% 34.10% 33.92% 34.13%
DISTRIBUTIONS PER SHARE:
From net realized gains on investments..... $ 2.880 $ 2.880 $ 2.880 $ 2.880
FORTIS GROWTH FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 32.14 $ 31.75 $ 31.75 $ 31.75 $ 32.18
End of period.............................. $ 37.32 $ 36.53 $ 36.52 $ 36.54 $ 37.47
TOTAL RETURN 27.01% 26.02% 25.98% 26.05% 27.34%
DISTRIBUTIONS PER SHARE:
From net realized gains on investments..... $ 3.070 $ 3.070 $ 3.070 $ 3.070 $ 3.070
FORTIS CAPITAL APPRECIATION PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 34.76 $ 34.46 $ 34.48 $ 34.48
End of period.............................. $ 30.60 $ 30.16 $ 30.18 $ 30.18
TOTAL RETURN -7.89% -8.38% -8.38% -8.38%
DISTRIBUTIONS PER SHARE:
Total Distributions........................ $ 1.450 $ 1.450 $ 1.450 $ 1.450
</TABLE>
<PAGE>
HOW TO USE THIS REPORT
For a quick overview of the fund's performance during the past year, refer to
the Highlights box. The letters from the portfolio managers and president
provides a more detailed analysis of the funds and financial markets.
The charts alongside the letters are useful because they provide more
information about your investments. The top holdings chart shows the types of
securities in which the fund invests, and the pie chart shows a breakdown of the
fund's assets by sector. The portfolio changes show the investment decisions
your fund manager has made over the period in response to changing market
conditions.
The performance charts graphically compare the funds' total return performance
with a selected investment index. Remember, however, that an index may reflect
the performance of securities the fund may not hold. Also, the index does not
deduct sales charges, investment advisory fees and other fund expenses, whereas
your fund does. Individuals cannot buy an unmanaged index fund without incurring
some charges and expenses.
This report is just one of several tools you can use to learn more about your
investment in the Fortis Family of Mutual Funds. Your investment representative,
who understands your personal financial situation, can best explain the features
of your investment and how it's designed to help you meet your financial goals.
<TABLE>
<C> <S>
ASSET ALLOCATION PORTFOLIO
Photo Stocks, bonds and cash blended to smooth out the highs and lows.
VALUE FUND
Photo Quality stocks, inexpensively priced.
GROWTH & INCOME FUND
Photo Conservative growth with quarterly dividends.
CAPITAL FUND
Photo Long-term growth through larger, established companies.
FIDUCIARY FUND
Photo A medley of growth stocks.
GROWTH FUND
Photo Medium-sized companies poised to be tomorrow's leaders.
CAPITAL APPRECIATION PORTFOLIO
Photo Opportunity through America's entrepreneurs.
</TABLE>
1
<PAGE>
Photo
DEAR SHAREHOLDER:
The stock market continued its upward march during the second half of fiscal
1997 ending August 31. Despite several volatile periods when investors expressed
concern over inflationary prospects, the investment climate proved to be upbeat
overall. Continued low inflation, a moderate rate of economic growth and strong
inflows of cash into the market combined to push stock prices to historic highs.
Over the year under review, the S&P 500 rose 40.70 percent, which is a
remarkable feat after the strong gains registered in both 1995 and 1996.
MARKET PERFORMANCE VARIED
Not all sectors of the market participated equally, however. Very large
capitalization stocks performed exceedingly well, while smaller capitalization
stocks languished. The large global consumer-oriented stocks did particularly
well during the period, although the dollar's strength recently initiated some
concern about this group's future earnings prospects. Global equity funds turned
in very mixed results as many emerging Asian markets were forced to adjust to
steep declines in their currencies. At the same time, Latin American markets
performed quite strongly. Fixed income investments were periodically affected by
inflationary concerns and possible monetary tightening by the Federal Reserve.
The stock market's run up has left stock valuations at lofty levels, reflecting
the current generally benign investment environment. Investors have also been
encouraged by passage of the balanced budget agreement which included a
reduction in the capital gains tax. Adding to these positives is a powerful
demographic factor. As the baby boomers begin moving into their 50s, savings and
retirement concerns begin to replace buying habits, resulting in strong cash
flows into the financial markets. The argument can be made that these fund flows
will persist well into the next century.
CAUTIOUS OPTIMISM
Despite all these favorable factors, however, it would be beneficial to keep
one's feet firmly grounded in reality, particularly at these levels of
valuation. A prudent investment manager must keep watch for clouds on this blue
horizon. A few potential clouds could exist:
- - the dollar's strength may put pressure on earnings of companies with large
international or export components,
- - tight labor markets may spark upward pressure in wages,
- - turbulence may occur in foreign markets, and
- - potential political problems may face the current U.S. Administration as
campaign financing comes under increased scrutiny.
Unforeseen external shocks to the investment scene could also spoil the current
environment.
DIVERSIFICATION IMPORTANT FOR THE FUTURE
During a volatile period such as the one we have been experiencing, it is often
wise to dollar cost average your investments, as well as diversify your
investments. Two of our newer funds, the Value Fund and the Growth & Income
Fund, offer portfolios with lower average price-earnings ratios and less
volatility. The Asset Allocation Portfolio offers a balance between fixed income
and stock investments with assets allocated depending on market conditions by a
team of investment professionals. Our fixed income funds offer a variety of
choices for more conservative and income needs. Our growth funds continue to
offer portfolios of growth stocks generally differentiated by the size and
maturity of companies. Capital and Fiduciary Funds invest primarily in larger
capitalization companies, while the Growth Fund invests in mid-cap growth
2
<PAGE>
situations and the Capital Appreciation Portfolio concentrates on rapidly
growing smaller capitalization companies. Finally, the Global Growth Portfolio,
which is not included in this report, invests in growth companies around the
world, with a strong emphasis currently on the United States. All our funds
continue to stress strong solid fundamentals in the current investment
environment.
The following pages give you a closer look at each member of the Fortis Stock
Fund family. We appreciate your investment in our funds. As always, if you have
questions or need more information, please contact your financial professional
or your Fortis shareholder services representative.
Sincerely,
/s/ Dean C. Kopperud /s/ James S. Byrd
Dean C. Kopperud James S. Byrd
President Vice President
/s/ Howard G. Hudson
Howard G. Hudson
Vice President
September 12, 1997
3
<PAGE>
PORTFOLIO COMPOSITION BY SECTOR AS OF 8/31/97
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Common Stocks 49.8%
U.S. Government Securities 18.7%
Asset Backed Securities 11.2%
Corporate Bonds-Investment Grade 9.8%
Corporate Bonds-Non-Investment Grade 6.5%
Cash Equivalents/Receivables 4.0%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/97
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. American International Group, Inc. 2.1%
2. Kohl's Corp. 1.8%
3. Fannie Mae 1.7%
4. Costco Companies, Inc. 1.6%
5. Schlumberger Ltd. 1.5%
<CAPTION>
Bonds
- -------------------------------------------------------------------
<C> <S> <C>
1. U.S. Treasury Note (6.875%) 2006 4.0%
2. U.S. Treasury Bond (6.375%) 2027 2.3%
3. U.S. Treasury Note (6.375%) 2000 2.3%
4. FNMA (7.00%) 2025 2.0%
5. FNMA (6.50%) 2010 1.3%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +23.92% +16.56%
Class B sharesDiamond Diamond +20.32% +15.83%
Class C sharesDiamond +23.93% +16.45%
Class C sharesDiamond Diamond +22.93% +16.45%
Class H sharesDiamond +23.93% +16.55%
Class H sharesDiamond Diamond +20.33% +15.81%
</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 August 31, 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. During the second half of fiscal 1997
ending August 31, the stock portion was reduced in two steps from 60 percent to
50 percent. The latest change occurred in August 1997 when we reduced equities
by 5 percent to 50 percent of the portfolio. For fiscal 1997, the Asset
Allocation Portfolio posted a return of 24.62 percent for Class A before sales
charge, which compares to a S&P 500 Index return of 40.70 percent and a 10.02
percent return for the Lehman Brothers Aggregate Bond Index. Very large
capitalization stocks positively influenced the S & P return while the Asset
Allocation Portfolio was relatively underweighted in this group due to their
lesser future growth rates.
EQUITY HOLDINGS ADJUSTED
The portfolio's equity holdings are primarily in large capitalization companies
with superior earnings growth prospects. During the second fiscal period, we
added to pharmaceuticals and energy services while we reduced our holdings in
the health care services and retail sectors.
Over the period under review, the stock market as measured by the popular
indices climbed to record levels after an initial period of weakness in the
spring. This strength has reflected strong corporate profit growth coupled with
very low inflation numbers. While this rather ideal investment backdrop appears
likely to continue, we have tempered our weightings in equities because of
current high stock valuations.
GROWING ECONOMY IMPACTS BOND MARKET
By the end of August, the U.S. economy was well into its seventh consecutive
year of economic expansion, one of the longest expansions of the 20th century.
Typically, the latter stage of an economic expansion is a period in which
inflation begins to rise. This expansion has been different. Global competition,
lower deficits and rising productivity have contributed to the lowest inflation
levels in 30 years. This unprecedented scenario has had a favorable impact on
the bond market, causing yields to fall (and conversely, prices to rise),
evidenced by the 10-year Treasury note, whose yield fell 60 basis points in the
last 12 months.
There are three factors which primarily determine a fixed income portfolio's
relative performance:
1. Duration (a measure of a bond's sensitivity to interest rates) of the
portfolio,
2. Sector allocation, and
3. Individual security selection.
Our duration strategy has been to maintain a moderately long duration,
reflecting our belief that interest rates are trending lower. With the economic
environment over the past year generally favorable for non-treasury debt, our
sector allocation strategy has been to overweight investment grade corporate
debt and asset-backed securities. Both strategies were beneficial for us as
interest rates fell and non-treasury debt outperformed treasury debt for the
year ending August 31, 1997.
OUTLOOK
Looking forward, moderate economic growth and dampened inflationary pressures
should continue to offer support for the financial markets. We are cautious,
however, because of recent turmoil in Asian markets, current high equity
valuations, and extreme volatility in our markets. We will continue our balanced
weighting between stocks and bonds.
VALUE OF $10,000 INVESTED JANUARY 4, 1988
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
AGGREGATE BOND INDEX# S&P 500##
1/4/88 10,000 10,000
<S> <C> <C>
88 10,470 10,868
89 11,853 15,109
90 12,710 14,356
91 14,569 18,216
92 16,533 19,663
93 18,348 22,640
94 18,070 23,875
95 20,131 28,994
96 20,830 34,270
97 22,918 48,217
Fortis Asset Allocation Portfolio
Average Annual Total Return
1 Year 5 Year
Class A* +18.70% +11.34%
Class A** +24.62% +12.43%
<CAPTION>
FORTIS
ASSET ALLOCATION PORTFOLIO CLASS A
1/4/88 9,534
<S> <C>
88 9,554
89 11,885
90 11,564
91 14,078
92 15,742
93 17,526
94 18,182
95 21,666
96 22,692
97 28,280
Fortis Asset Allocation Portfolio
Average Annual Total Return
Since
January 4, 1988@
Class A* +11.36%
Class A** +11.93%
</TABLE>
Annual period ended August 31
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 YEAR ENDED 8/31/97
<TABLE>
<S> <C> <C>
STOCK ADDITIONS: MGIC Investment Corp. STOCK ELIMINATIONS:
AES Corp. Monsanto Co. AutoZone, Inc.
Archer-Daniels-Midland Co. Mylan Laboratories, Inc. Biovail Corp. International
Associated Group, Inc. Class A Perkin Elmer Corp. Boatmens Bancshares, Inc.
Baker Hughes, Inc. Precision Drilling Corp. Ceridian Corp.
Camco International, Inc. Santa Fe Energy Resources, Inc. Columbia/HCA Healthcare Corp.
Centocor, Inc. Santa Fe International Corp. Computer Associates International, Inc.
CMP Media, Inc. Class A Sterling Commerce, Inc. Franklin Resources, Inc.
Costco Companies, Inc. Teva Pharmaceutical Industries Ltd. ADR Office Depot, Inc.
Crown Cork & Seal Company, Inc. Time Warner, Inc. Oxford Health Plans, Inc.
Depuy, Inc. Tranz Rail Holdings Ltd. ADR PacifiCare Health Systems, Inc. Class B
Fiserv, Inc. Union Planters Corp. Pep Boys-Manny Moe & Jack
Forest Laboratories, Inc. U.S. Filter Corp. Costco Co., Inc.
Hartford Life, Inc. U.S.A. Waste Services, Inc. Scholastic Corp.
Ingram Micro, Inc. Class A Warner-Lambert Co. Solectron Corp.
Interpublic Group of Companies, Inc. Williams Companies, Inc. Sterling Software, Inc.
Lilly (Eli) & Co., Inc. 360 Communications Co.
United Healthcare Corp.
Wackenhut Corp., Class B
Wal-Mart Stores, Inc.
</TABLE>
4
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 8/31/97
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 38.4%
Cash Equivalents/Receivables 9.9%
Banks 7.8%
Food 6.5%
Finance Services 6.3%
Utilities-Telephone 5.0%
Office Equipment and Supplies 4.4%
Drugs 4.1%
Oil-Refining 3.9%
Natural Gas Transmissions 3.8%
Oil-Crude Petroleum and Gas 3.7%
Business Services 3.1%
Electronic-Semiconductor 3.1%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/97
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Anadarko Petroleum Corp. 2.1%
2. Pitney Bowes, Inc. 2.1%
3. Burlington Northern Santa Fe Corp. 2.0%
4. Citicorp 2.0%
5. Federated Department Stores, Inc. 2.0%
6. ConAgra, Inc. 2.0%
7. Williams Companies, Inc. 2.0%
8. Avnet, Inc. 1.9%
9. Hartford Financial Services Group 1.8%
10. BankBoston Corp. 1.8%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +27.75% +20.64%
Class B sharesDiamond Diamond +24.15% +18.72%
Class C sharesDiamond +27.75% +20.64%
Class C sharesDiamond Diamond +26.75% +20.64%
Class H sharesDiamond +27.75% +20.64%
Class H sharesDiamond Diamond +24.15% +18.72%
</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 August 31, 1997.
+ Shares were first offered to the public January 2, 1996.
FORTIS VALUE FUND
YOUR VALUE FUND
QUALITY STOCKS, INEXPENSIVELY PRICED
The Fortis Value Fund is relatively young, opening in January 1996. It was
well-positioned to take advantage of market conditions. The Value Fund's total
return was 28.66 percent for Class A before sales charge for the year ended
August 31, 1997. This performance was somewhat disappointing.
SMALL CAP PERFORMANCE AFFECTED FUND
The portfolio's return was influenced by two significant factors:
- -The portfolio had moderately above average exposure to smaller capitalization
stocks, which in general performed poorly during the period. These stocks
performed poorly because investors, concerned about both the advanced stage of
the economic recovery and the high valuations of the stock market, have tended
to avoid the riskier sectors of the market.
- -The portfolio had below average exposure to large capitalization stocks, which
in general performed well during the period. Large capitalization stocks have
performed well because investors feel that they appear to offer "safety" in a
volatile market.
OUTLOOK
We are cautious on the stock market, which has advanced far in little time.
Given the advanced stage of this economic expansion, the fund will focus on
companies that are relatively protected from cyclical earnings deceleration.
Additionally, the fund will focus on opportunities to invest in undervalued
companies that have the potential for increased earnings.
VALUE OF $10,000 INVESTED JANUARY 2, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FORTIS VALUE FUND
S&P 500*** CLASS A
<S> <C> <C>
1/2/96 10,000 9,525
96 10,700 10,239
97 15,054 13,174
Fortis Value Fund
Average Annual Total Return
Since
1 Year January 2, 1996@
Class A* +22.55% +18.00%
Class A** +28.66% +21.49%
</TABLE>
Annual period ended August 31
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 YEAR ENDED 8/31/97
<TABLE>
<S> <C> <C>
ADDITIONS: Intel Corp. ELIMINATIONS:
Abbott Laboratories Johnson & Johnson AT & T Corp.
American International Group, Inc. Kimberly-Clark Corp. H & R Block, Inc.
Ameritech Corp. Liberty Property Trust Boeing Co.
Archer-Daniels-Midland Co. Lockheed Martin Corp. Developers Diversified Realty Corp.
Automatic Data Processing, Inc. McGraw Hill Companies, Inc. Federal Express Corp.
AutoZone, Inc. Mercantile Bancorporation, Inc. Flightsafety International, Inc.
BankBoston Corp. Mobil Corp. Home Depot, Inc.
Baxter International, Inc. Monterey Resources, Inc. James River Corp. of Virginia Conv.
Bell Atlantic Corp. Pfizer, Inc. Series P Preferred
Cabot Corp. Philip Morris Companies, Inc. Lyondell Petrochemical Co.
Cali Realty Corp. Public Storage, Inc. Mallinckrodt Group, Inc.
Chase Manhattan Corp. Questar Corp. May Department Stores Co.
Crown Cork & Seal Company, Inc. Raytheon Co. McDonnell Douglas Corp.
Enron Corp. Royal Dutch Petroleum Co. NY Shares Merrill Lynch & Co., Inc.
Exxon Corp. SBC Communications, Inc. Mylan Laboratories, Inc.
Fannie Mae S & P 500 Depositary Receipt Owens Corning
Finova Group, Inc. Sabre Group Holdings, Inc. Payless ShoeSource, Inc.
First Data Corp. Santa Fe Energy Resources, Inc. Solectron Corp.
Fiserv, Inc. Sherwin-Williams Co. Tele-Communications, Inc.
Fort James Corp. Southtrust Corp. Unifi, Inc.
Fruit of the Loom, Inc., Class A Sprint Corp. Union Texas Petroleum Holdings, Inc.
GTE Corp. Summit Bancorp, Inc. Viacom, Inc. Class B
General Motors Corp. U.S. Bancorp Vishay Intertechnology, Inc.
Hartford Financial Services Group (HIG) Unisource Worldwide, Inc.
</TABLE>
5
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 8/31/97
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 29.6%
Cash Equivalents/Receivables 20.2%
Drugs 7.6%
Utilities-Telephone 6.5%
Real Estate Investment Trust 6.5%
Natural Gas Transmissions 6.0%
Finance Services 5.9%
Banks 5.7%
Oil-Crude Petroleum and Gas 4.5%
Insurance 4.2%
Utilities-Electric 3.3%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/97
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Tenneco, Inc. 2.1%
2. Sunamerica, Inc. 2.0%
3. Enron Corp. 1.9%
4. SBC Communications, Inc. 1.8%
5. Chase Manhattan Corp. 1.7%
6. Banc One Corp. 1.7%
7. Duke Energy Corp. 1.7%
8. Baxter International, Inc. 1.6%
9. AES Corp. 1.6%
10. Glaxo Wellcome plc ADR 1.6%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +28.16% +18.52%
Class B sharesDiamond Diamond +24.56% +16.61%
Class C sharesDiamond +28.03% +18.52%
Class C sharesDiamond Diamond +27.03% +18.52%
Class H sharesDiamond +28.03% +18.52%
Class H sharesDiamond Diamond +24.43% +16.61%
</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 August 31, 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 focuses on dividend paying companies with good earnings
growth prospects, allowing consistent dividend increases. The portfolio is well
diversified throughout the various economic sectors and is primarily
concentrated in large capitalization, well-established companies with long
histories of earnings and dividend increases.
PERFORMANCE RESULTS
For the fiscal year as a whole, the Fortis Growth & Income Fund posted a total
return of 29.00 percent for Class A before sales charge which compares to the
S&P 500 return of 40.70 percent over the similar period.
Currently, the largest sector weightings can be found in the energy, financial
and health care areas. The Growth & Income Fund underperformed the S&P Index
because of little exposure to technology stocks. The fund has maintained this
low exposure because of a general lack of yields available in this sector.
However, this group had a positive influence on the S&P Index returns over
recent periods resulting in the comparatively better performance.
AWAITING OPPORTUNITIES
Dividend yields on the popular market indices currently are near historic lows,
reflecting the high valuations of the present market environment. It is indeed a
challenge to identify growth situations meeting our yield criteria. We are
maintaining a higher level of cash reserves while we await opportunities in the
market.
VALUE OF $10,000 INVESTED JANUARY 2, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FORTIS VALUE FUND
S&P 500*** CLASS A
<S> <C> <C>
1/2/96 10,000 9,525
96 10,700 9,916
97 15,054 12,792
Fortis Growth & Income Fund
Average Annual Total Return
Since
1 Year January 2, 1996@
Class A* +22.88% +15.93%
Class A** +29.00% +19.37%
</TABLE>
Annual period ended August 31
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 YEAR ENDED 8/31/97
<TABLE>
<S> <C> <C>
ADDITIONS: LaSalle Re Holdings Ltd. ELIMINATIONS:
AES Corp. Conv. Preferred, Ser A Limited (The), Inc. American Brands, Inc.
Baker Hughes, Inc. Mobil Corp. H & R Block, Inc.
Beacon Properties Corp. Monterey Resources, Inc. Boatmens Bancshares, Inc.
Chase Manhattan Corp. Nuevo Energy Co., Conv. Preferred, Frontier Corp.
Cornerstone Properties, Inc. Ser A, 5.75% Green Tree Financial Corp.
Crescent Real Estate Equities Trust Quaker Oats Co. Kerr-McGee Corp.
Crown Cork and Seal Co, Inc., Conv. SBC Communications, Inc. Mercury Finance Co.
Preferred, 4.5% Shelby Williams Industries, Inc. New England Business Service, Inc.
Deutsche Telekom AG ADR SLM Holding Corp. PanEnergy Corp.
Duke Energy Corp. Spieker Properties, Inc. Readers Digest Association, Inc.
Excel Realty Trust, Inc. St. Paul Companies, Inc. Class A
Excel Realty Trust, Inc. Sunamerica, Inc., Conv. Preferred, Safeco Corp.
Fortune Brands, Inc. 8.50% Student Loan Marketing Association
Genuine Parts Co. Tenneco, Inc. Tenneco, Inc.
Glaxo Wellcome plc ADR Texaco, Inc.
Highwoods Properties, Inc. Union Planters Corp.
Knightsbridge Tankers Ltd. U.S. Bancorp
Washington Mutual, Inc.
</TABLE>
6
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 8/31/97
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 30.3%
Finance Services 10.8%
Cash Equivalents/Receivables 7.8%
Retail-Specialty 6.8%
Drugs 5.1%
Computer-Software 4.9%
Insurance 4.8%
Business Services 4.8%
Telecommunication Equipment 4.7%
Oil and Gas Field Services 4.5%
Medical Technology 4.3%
Telephone Services 4.1%
Retail-Department Stores 3.6%
Electronic-Semiconductor 3.5%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/97
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Kohl's Corp. 3.6%
2. American International Group, Inc. 3.3%
3. Fannie Mae 3.2%
4. Home Depot, Inc. 3.1%
5. MBNA Corp. 3.0%
6. Medtronic, Inc. 2.7%
7. Green Tree Financial Corp. 2.7%
8. Archer-Daniels-Midland Co. 2.4%
9. Schlumberger Ltd. 2.4%
10. Mattel, Inc. 2.4%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +33.55% +19.72%
Class B sharesDiamond Diamond +29.95% +19.02%
Class C sharesDiamond +33.68% +19.74%
Class C sharesDiamond Diamond +32.68% +19.74%
Class H sharesDiamond +33.61% +19.74%
Class H sharesDiamond Diamond +30.01% +19.04%
</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 August 31, 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 focuses on rapidly growing companies with well-established
positions of leadership in their respective industry sectors. We have also
broadened the diversification of industry sectors to moderate the risk level of
this portfolio. Larger industry weightings currently include health care,
technology and finance-related. We have increased the energy sector over the
most recent six month period, while we further reduced the technology sector.
Despite the reduction, technology remains well-represented in the portfolio.
For the second half of the fiscal year ended August 31, 1997, the Capital Fund
provided a total return of 18.61 percent for Class A before sales charge. This
compares to the S&P 500's return of 14.78 percent over the same period. For the
fiscal year, the Capital Fund returned 34.57 percent for Class A before sales
charge as compared to the 40.70 percent posted by the S&P 500. During the latest
six month period, the market began broadening out, allowing the Capital Fund to
outperform the Index. The Index was helped by the performance of the very large
capitalization companies that continue to outperform the overall market. The
Capital Fund is not as heavily weighted in these mega-capitalized stocks as they
do not offer the long-term growth prospects we require for inclusion in this
portfolio. We anticipate the market's leadership will continue to broaden in the
period ahead as investors search for undervalued growth opportunities.
VALUE OF $10,000 INVESTED SEPTEMBER 1, 1972
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** FORTIS CAPITAL FUND CLASS A
<S> <C> <C> <C> <C>
9/1/72 10,000 8,659
73 9,667 8,528
74 6,963 6,462
75 8,781 7,492
76 10,813 8,696
77 10,620 8,355
78 11,946 10,581
79 13,334 11,695
80 15,752 16,667
81 16,584 18,811
82 17,133 22,276
83 24,651 34,525
84 26,177 33,368
85 31,046 38,525
86 43,120 55,292
87 58,012 70,327
88 47,709 54,205
89 66,324 77,975
90 63,020 73,420
91 79,962 94,304
92 86,314 104,454
93 99,383 112,685
94 104,802 124,581
95 127,273 151,359
96 150,433 156,446
97 211,654 210,538
Fortis Capital Fund
Average Annual Total Return
1 Year 5 Year 10 Year 25 Years
Class A* +28.18% +13.93% +11.05% +12.96%
Class A** +34.57% +15.05% +11.59% +13.18%
</TABLE>
Annual period ended August 31
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 YEAR ENDED 8/31/97
<TABLE>
<S> <C> <C>
ADDITIONS: MGIC Investment Corp. ELIMINATIONS:
AES Corp. Monsanto Co. AutoZone, Inc.
Archer-Daniels-Midland Co. Monterey Resources, Inc. Ceridian Corp.
Associated Group, Inc. Class A Mylan Laboratories, Inc. Columbia/HCA Healthcare Corp.
Baker Hughes, Inc. Noble Drilling Corp. Computer Associates International,
Camco International, Inc. Perkin Elmer Corp. Inc.
Centocor, Inc. Precision Drilling Corp. News Corp., Ltd. ADR
CMP Media, Inc. Class A Santa Fe Energy Resources, Inc. News Corp. Ltd.(The) Preferred ADR
Cognizant Corp. Santa Fe International Corp. Office Depot, Inc.
Costco Companies, Inc. SmithKline Beecham plc ADR PacifiCare Health Systems, Inc.
Crown Cork & Seal Company, Inc. Sterling Commerce, Inc. Class B
Depuy, Inc. Teva Pharmaceutical Industries Ltd. Costco Co., Inc.
EVI, Inc. ADR Scholastic Corp.
Fiserv, Inc. Time Warner, Inc. Sterling Software, Inc.
Forest Laboratories, Inc. U.S. Filter Corp. 360 Communications Co.
Hartford Life, Inc. U.S.A. Waste Services, Inc. United Healthcare Corp.
Ingram Micro, Inc. Class A Warner-Lambert Co. Wal-Mart Stores, Inc.
Interpublic Group of Companies, Williams Companies, Inc.
Inc.
</TABLE>
7
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 8/31/97
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 31.5%
Finance Services 10.0%
Computer-Software 7.2%
Retail-Specialty 6.5%
Cash Equivalents/Receivables 6.3%
Drugs 6.0%
Business Services 4.8%
Insurance 4.6%
Telecommunication Equipment 4.6%
Medical Technology 4.1%
Telephone Services 4.0%
Oil and Gas Field Services 3.8%
Electronic-Semiconductor 3.4%
Hotel and Gaming 3.2%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/97
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. American International Group, Inc. 3.2%
2. MBNA Corp. 3.0
3. Microsoft Corp. 3.0
4. Home Depot, Inc. 2.8
5. Fannie Mae 2.8
6. Kohl's Corp. 2.7
7. Mylan Laboratories, Inc. 2.7
8. Medtronic, Inc. 2.6
9. Archer-Daniels-Midland Co. 2.4
10. Green Tree Financial Corp. 2.4
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +34.10% +20.79%
Class B sharesDiamond Diamond +30.50% +20.10%
Class C SharesDiamond +33.92% +20.80%
Class C SharesDiamond Diamond +32.92% +20.80%
Class H sharesDiamond +34.13% +20.80%
Class H sharesDiamond Diamond +30.53% +20.11%
</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 August 31, 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 large and medium capitalization growth
stocks. Companies selected for this portfolio have leading positions in their
respective fields with earnings growth rates significantly higher than the
average company. While we have concentrated our new purchases in the larger
capitalization sector, the fund is well-diversified across industries and
economic sectors. During the period under review, we increased the energy
weighting while we lightened technology. We continue to overweight financial and
health care stocks in the portfolio.
The stock market turned in a generally strong performance during the six months
ending August 31, 1997, gaining 14.78 percent as measured by the S&P 500. The
Fiduciary Fund provided a total return of 19.68 percent for Class A before sales
charge during the same period. For the fiscal year as a whole, the Fiduciary
Fund increased 35.08 percent for Class A before sales charge which compares to a
slightly larger gain of 40.70 percent for the S&P 500. Very large capitalization
stocks continued to lead in performance and are more heavily weighted in the
Index as compared to the Fund. In general, these mega-capitalizations stocks do
not offer the superior earning growth we are seeking. The general broadening of
performance to smaller sectors appears to be beginning to take place. This
helped the Fiduciary Fund to outpace the S&P 500 Index in the latest reporting
period. We anticipate this broadening to continue in the future, as investors
identify underappreciated growth opportunities available in the market.
VALUE OF $10,000 INVESTED JANUARY 2, 1982
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** FORTIS FIDUCIARY FUND CLASS A
<S> <C> <C> <C> <C>
1/2/82 10,000 9,430
82 10,165 10,328
83 14,625 16,236
84 15,530 16,073
85 18,418 19,081
86 25,582 28,211
87 34,417 35,819
88 28,304 27,359
89 39,348 39,138
90 37,388 36,786
91 47,439 47,291
92 51,208 52,151
93 58,961 57,667
94 62,176 63,529
95 75,507 77,956
96 89,247 81,217
97 125,569 109,709
Fortis Fiduciary Fund
Average Annual Total Return
Since
1 Year 5 Year 10 Year January 2, 1982@
Class A* +28.66% +14.91% +11.30% +16.52%
Class A** +35.08% +16.04% +11.84% +16.89%
</TABLE>
Annual period ended August 31
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.
@ Date shares were first offered to the public
PORTFOLIO CHANGES FOR THE YEAR ENDED 8/31/97
<TABLE>
<S> <C> <C> <C>
ADDITIONS: Interpublic Group of ELIMINATIONS: Promus Hotel Corp.
AES Corp. Companies, Inc. 360 Communications Co. Quality Dining, Inc.
Andrew Corp. (with rights) Marine Drilling America Online, Inc. Quicksilver, Inc.
Archer-Daniels-Midland Co. Companies, Inc. AutoZone, Inc. Rainforest Cafe, Inc.
Arterial Vascular McAfee Associates, Inc. Boston Beer Co. (The), Inc., Scholastic Corp.
Engineering, Inc. Medpartners, Inc. Class A Shiva Corp.
Associated Group, Inc. MGIC Investment Corp. Career Horizons, Inc. Steris Corp.
Class A Monsanto Co. Cascade Communications Sterling Software, Inc.
Baker Hughes, Inc. Monterey Resources, Inc. Corp. Summit Medical
Blyth Industries, Inc. Mylan Laboratories, Inc. Ceridian Corp. Systems, Inc.
BMC Industries, Inc. Noble Drilling Corp. Columbia/HCA Healthcare Sunglass Hut
Camco International, Inc. North Face, Inc. Corp. International, Inc.
CapStar Hotel Company Paychex, Inc. Computer Associates Transition Systems, Inc.
Centocor, Inc. Pegasus Systems, Inc. International, Inc. United Healthcare Corp.
Chicago Miniature Lamp, Inc. Perkin Elmer Corp. Costco Co., Inc. United Waste Systems, Inc.
CMP Media, Inc. Class A Platinum Technology, Inc. Cybercash, Inc. Wal-Mart Stores, Inc.
Cognizant Corp. Precision Drilling Corp. Gymboree Corp. Westell Technologies, Inc.,
COREstaff, Inc. Rational Software Corp. Healthsource, Inc. Class A
Costco Companies, Inc. Santa Fe Energy Resources, HFS, Inc. Xylan Corp.
Covance, Inc. Inc. Idexx Laboratories, Inc.
Cracker Barrel Old Country Santa Fe International Corp. Indus Group, Inc.
Store, Inc. Sawtek, Inc. Informix Corp.
Crown Cork & Seal Siebel Systems, Inc. LCI International, Inc.
Company, Inc. SmithKline Beecham plc ADR Lernout and Hauspie Speech
Depuy, Inc. Snyder Communications, Inc. Products N.V.
Dollar Tree Stores, Inc. Star Telecommunications, Lone Star Steakhouse &
DSP Communications, Inc. Inc. Saloon, Inc.
Envoy Corp. Sterling Commerce, Inc. Mecon, Inc.
EVI, Inc. Stolt Comex Seaway, S.A. MedPartners/Mullikin, Inc.
Falcon Drilling Co. Stryker Corp. MFS Communications
Fiserv, Inc. Sykes Enterprises, Inc. Co., Inc.
Forest Laboratories, Inc. Tellabs, Inc. Mossimo, Inc.
General Nutrition The Wet Seal, Inc. National Education Corp.
Companies, Inc. Time Warner, Inc. Network General Corp.
Hall, Kinion & U.S. Filter Corp. News Corp. Ltd. (The)
Associates, Inc. U.S.A. Waste Services, Inc. Preferred ADR
Hartford Life, Inc. Vantive Corp. News Corp., Ltd. ADR
HSN, Inc. Veritas Software Corp. Office Depot, Inc.
Indus International (IINT) Viking Office Products, Inc. PacifiCare Health
Ingram Micro, Inc. Class A Warner-Lambert Co. Systems, Inc. Class B
International Rectifier Corp. Williams Companies, Inc.
WorldCom, Inc.
</TABLE>
8
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 8/31/97
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 20.5%
Computer-Software 13.2%
Finance Services 10.1%
Cash Equivalents/Receivables 9.3%
Health Care Services 7.8%
Telecommunication-Equipment 6.3%
Machinery-Oil and Well 6.0%
Retail-Specialty 5.9%
Oil-Offshore Drilling 5.7%
Computer-Communications Equipment 5.4%
Telephone Services 4.2%
Business Services 3.6%
Banks 2.0%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/97
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. WorldCom, Inc. 4.2%
2. Tellabs, Inc. 3.7%
3. BMC Software, Inc. 3.6%
4. Oracle Corp. 3.3%
5. Franklin Resources, Inc. 3.1%
6. Petroluem Geo-Services ADR 3.1%
7. Cisco Systems, Inc. 3.0%
8. Microsoft Corp. 3.0%
9. Solectron Corp. 2.7%
10. Oxford Health Plans, Inc. 2.4%
</TABLE>
CLASS B, C, H AND Z AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +26.02% +20.14%
Class B sharesDiamond Diamond +22.42% +19.45%
Class C SharesDiamond +25.98% +20.13%
Class C SharesDiamond Diamond +24.98% +20.13%
Class H sharesDiamond +26.05% +20.15%
Class H sharesDiamond Diamond +22.45% +19.46%
Class Z shares +27.34% +18.87%++
</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, H and Z) 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. Class Z has
no sales charge or CDSC.
Diamond Without CDSC.
Diamond Diamond With CDSC. Assumes redemption on August 31, 1997.
+ Since November 14, 1994 -- Date shares were first offered to
the public
++ Since March 1, 1996 -- Date shares were first offered to the
public
FORTIS GROWTH FUND
YOUR GROWTH FUND
MEDIUM-SIZED COMPANIES POISED TO BE TOMORROW'S LEADERS
We are pleased to report that the Growth Fund produced a return of 27.01 percent
for Class A before sales charge for the fiscal year ended August 31, 1997.
Nevertheless, this return was disappointingly below that of the major stock
market indices. While the Growth Fund invests mainly in strongly growing
mid-sized companies, the market's leadership throughout most of the period under
review was among the very large, multi-national companies.
A wide range of holdings made positive contributions to portfolio performance
during the year, especially from the areas of technology, oil and gas services,
financial services and specialty retailing. Our largest number of holdings
remains in the broad area of technology. The inherent volatility of those stocks
played out on the downside in the mid-February to late May period and strongly
on the upside in the subsequent three months. Our holdings of companies serving
the oil and gas exploration and production business expanded significantly
during the year, much to the benefit of portfolio performance. On the negative
side, certain technology, health care and consumer spending-related company
stocks proved disappointing during the year.
OUTLOOK
Our outlook for the coming year continues to be based on very positive economic
fundamentals. The economy continues to grow without signs of overheating,
corporate profits remain strong, inflation remains benign and interest rates
seem to be contained within a fairly narrow range. The main wild card in our
outlook for stock prices is the market itself. The long upward move in the stock
market has pushed valuations toward, although still below, historically high
levels. Nevertheless, normal, periodic corrections should contain the downside
in the market as long as the favorable economic factors referred to above remain
intact.
VALUE OF $10,000 INVESTED SEPTEMBER 1, 1972
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** FORTIS GROWTH FUND CLASS A
<S> <C> <C> <C> <C>
9/1/72 10000 10198
73 9667 7723
74 6963 5915
75 8781 7283
76 10813 8419
77 10620 8880
78 11946 12968
79 13334 15378
80 15752 22172
81 16584 26530
82 17133 30213
83 24651 47584
84 26177 45445
85 31046 50793
86 43120 74090
87 58012 95381
88 47709 69569
89 66324 106205
90 63020 98305
91 79962 139166
92 86314 145738
93 99383 178798
94 104802 172055
95 127273 218371
96 150433 227313
97 211654 288699
Fortis Growth Fund
Average Annual Total Return
1 Year 5 Year 10 Year 25 Year
Class A* +20.97% +13.54% +11.17% +14.40%
Class A** +27.01% +14.65% +11.71% +14.62%
</TABLE>
Annual period ended August 31
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 YEAR ENDED 8/31/97
<TABLE>
<S> <C>
ADDITIONS: ELIMINATIONS:
American Express Co. Advanta Corp., Class B
Banc One Corp. America Online, Inc.
BioChem Pharma, Inc. Barnes & Noble, Inc.
Boston Scientific Corp. Cascade Communications Corp.
Callaway Golf Co. First USA, Inc.
Cooper Cameron Corp. FORE Systems, Inc.
Danka Business Systems plc ADR Informix Corp.
Diamond Offshore Drilling, Inc. LCI International, Inc.
Dollar Tree Stores, Inc. Lone Star Steakhouse & Saloon, Inc.
Dresser Industries, Inc. MFS Communications Co., Inc.
ENSCO International, Inc. MedPartners/Mullikin, Inc.
Falcon Drilling Co. Mercury Finance Co.
Fannie Mae Outback Steakhouse, Inc.
Genzyme Corp Tissue Corp. PacifiCare Health Systems, Inc. Class B
Healthsouth Corp. Paging Network, Inc.
MBNA Corp. Scholastic Corp.
Medpartners, Inc. Sterling Software, Inc.
Medtronic, Inc. (and rights) Sunglass Hut International, Inc.
Noble Drilling Corp. U.S. Robotics Corp.
Schlumberger Ltd. Wal-Mart Stores, Inc.
Smith International, Inc.
Sterling Commerce, Inc.
Transocean Offshore, Inc.
U.S. Filter Corp.
West Marine, Inc.
Wisconsin Central Transportation Corp.
</TABLE>
9
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 8/31/97
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 16.4%
Computer-Software 15.2%
Business Services 14.2%
Cash Equivalents/Receivables 9.7%
Retail-Specialty 8.6%
Telephone Services 8.1%
Health Care Services 7.4%
Machinery-Oil and Well 5.8%
Computer-Communications Equipment 3.9%
Telecommunication Equipment 3.9%
Waste Disposal 3.7%
Restaurants and Franchising 3.1%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/97
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. U.S.A. Waste System, Inc. 3.7%
2. Acxiom Corp. 3.2%
3. Petroleum Geo-Services ADR 3.1%
4. Input/Output, Inc. 2.7%
5. Fastenal Co. 2.7%
6. Parametric Technology Corp. 2.3%
7. Cisco Systems, Inc. 2.0%
8. Bed, Bath & Beyond, Inc. 1.9%
9. Ascend Communications, Inc. 1.9%
10. Intermedia Communications, Inc. 1.8%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- --------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond -8.38% +13.27%
Class B sharesDiamond Diamond -11.64% +12.50%
Class C sharesDiamond -8.38% +13.30%
Class C sharesDiamond Diamond -9.30% +13.30%
Class H sharesDiamond -8.38% +13.30%
Class H sharesDiamond Diamond -11.64% +12.53%
</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 August 31, 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 year has been very difficult for funds that invest primarily in
smaller, emerging high-growth companies. The overall market focus moved
dramatically away from smaller companies and almost solely toward large,
well-known moderate growth companies. This trend finally started to reverse in
May, when the fund appreciated 19 percent in one month versus a rise of only 6
percent in the major market index. The fund performance was -7.89 percent for
Class A before sales charge in the fiscal year ending August 31, 1997, compared
to the S & P 500 performance of 40.70 percent.
MORE DIVERSITY ADDED
While we continued the basic strategy of investing in smaller, high growth
companies, we attempted to minimize the market's negative impact by carrying a
reasonable amount of cash and later putting much of the excess back into the
shares of extremely depressed opportunities. We also broadened the fund through
the addition of more names, and a moderate upgrading in company size and
liquidity.
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>
FORTIS CAPITAL APPRECIATION
PORTFOLIO
S&P 500*** CLASS A
<S> <C> <C> <C>
1/4/88 10,000 9,525
88 10,868 10,373
89 15,109 14,853
90 14,356 14,329
91 18,216 18,634
92 19,663 18,685
93 22,640 25,415
94 23,875 23,730
95 28,994 33,294
96 34,270 38,024
97 48,217 35,023
Fortis Capital Appreciation
Portfolio
Average Annual Total Return
Since
1 Year 5 Year January 4, 1988@
Class A* -12.27% +12.29% +13.86%
Class A** -7.89% +13.39% +14.43%
</TABLE>
Annual period ended August 31
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 YEAR ENDED 8/31/97
<TABLE>
<S> <C> <C> <C>
ADDITIONS: Indus International (IINT) U.S.A. Waste Services, Inc. Lernout and Hauspie Speech
Andrew Corp. (with rights) International Rectifier Vantive Corp. Products N.V.
Arterial Vascular Corp. Veritas Software Corp. Lone Star Steakhouse &
Engineering, Inc. Marine Drilling Companies, Viking Office Products, Inc. Saloon, Inc.
BMC Industries, Inc. Inc. The Wet Seal, Inc. MFS Communications Co., Inc.
Blyth Industries, Inc. McAfee Associates, Inc. WorldCom, Inc. Mecon, Inc.
Camco International, Inc. Medpartners, Inc. MedPartners/Mullikin, Inc.
Chicago Miniature Lamp, Inc. North Face, Inc. ELIMINATIONS: Mossimo, Inc.
COREstaff, Inc. Paychex, Inc. America Online, Inc. National Education Corp.
Covance, Inc. Pegasus Systems, Inc. Boston Beer Co. (The), Inc., Network General Corp.
Cracker Barrel Old Country Platinum Technology, Inc. Class A Quality Dining, Inc.
Store, Inc. Rational Software Corp. Career Horizons, Inc. Quicksilver, Inc.
DSP Communications, Inc. Sawtek, Inc. Cascade Communications Corp. Rainforest Cafe, Inc.
Dollar Tree Stores, Inc. Siebel Systems, Inc. Cybercash, Inc. Shiva Corp.
Envoy Corp. Snyder Communications, Inc. Gymboree Corp. Summit Medical Systems, Inc.
Falcon Drilling Co. Star Telecommunications, Healthsource, Inc. Sunglass Hut International,
Fiserv, Inc. Inc. Idexx Laboratories, Inc. Inc.
General Nutrition Companies, Stolt Comex Seaway, S.A. Indus Group, Inc. Transition Systems, Inc.
Inc. Stryker Corp. Informix Corp. United Waste Systems, Inc.
HSN, Inc. Sykes Enterprises, Inc. Westell Technologies, Inc.,
Hall, Kinion & Associates, Tellabs, Inc. Class A
Inc.
</TABLE>
10
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO
Schedule of Investments
August 31, 1997
COMMON STOCKS-49.75%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
------- ------------- -------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-0.11%
4,100 Interpublic Group of Companies, Inc.............................. $ 196,062 $ 199,875
------------- -------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.68%
19,000 Magna International, Inc. Class A (h)............................ 859,729 1,258,750
------------- -------------
BANKS-1.27%
22,000 Banc One Corp.................................................... 848,687 1,179,750
23,000 Union Planters Corp. (h)......................................... 798,322 1,178,750
------------- -------------
1,647,009 2,358,500
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT-1.02%
13,000 Amgen, Inc. (a).................................................. 723,457 644,312
28,000 Centocor, Inc. (a)............................................... 984,374 1,256,500
------------- -------------
1,707,831 1,900,812
------------- -------------
BUSINESS SERVICES AND SUPPLIES-1.59%
22,134 First Data Corp.................................................. 500,041 908,877
33,600 Fiserv, Inc. (a)................................................. 1,287,473 1,512,000
19,000 Ingram Micro, Inc. Class A (a) (h)............................... 377,028 546,250
------------- -------------
2,164,542 2,967,127
------------- -------------
CHEMICALS-0.64%
27,000 Monsanto Co...................................................... 1,116,294 1,186,312
------------- -------------
COMPUTER-COMMUNICATIONS EQUIPMENT-0.65%
16,000 Cisco Systems, Inc. (a).......................................... 191,397 1,206,000
------------- -------------
COMPUTER-SOFTWARE-2.71%
11,700 Microsoft Corp. (a).............................................. 249,257 1,546,594
39,900 Oracle Corp. (a) (h)............................................. 118,171 1,521,187
59,978 Sterling Commerce, Inc. (a)...................................... 813,216 1,983,023
------------- -------------
1,180,644 5,050,804
------------- -------------
CONTAINERS AND PACKAGING-0.47%
17,100 Crown Cork & Seal Company, Inc. (h).............................. 791,714 869,962
------------- -------------
DRUGS-3.33%
16,000 Abbott Laboratories.............................................. 727,120 959,000
31,200 Forest Laboratories, Inc. (a) (h)................................ 1,174,069 1,281,150
10,000 Lilly (Eli) & Co., Inc........................................... 640,344 1,046,250
56,000 Mylan Laboratories, Inc. (h)..................................... 1,022,978 1,190,000
13,400 Teva Pharmaceutical Industries Ltd.
ADR (h)........................................................ 663,006 701,825
8,000 Warner-Lambert Co................................................ 813,956 1,016,500
------------- -------------
5,041,473 6,194,725
------------- -------------
ELECTRICAL EQUIPMENT-0.71%
21,200 General Electric Co.............................................. 936,634 1,325,000
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-2.02%
19,000 Intel Corp....................................................... 450,223 1,750,375
27,300 Motorola, Inc.................................................... 1,128,863 2,003,137
------------- -------------
1,579,086 3,753,512
------------- -------------
FINANCE SERVICES-4.38%
71,000 Fannie Mae....................................................... 1,847,316 3,124,000
32,000 Green Tree Financial Corp. (h)................................... 404,480 1,406,000
42,000 MBNA Corp........................................................ 401,035 1,614,375
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------- -------------
<C> <S> <C> <C>
40,000 MGIC Investment Corp. (h)........................................ $ 1,348,608 $ 2,012,500
------------- -------------
4,001,439 8,156,875
------------- -------------
FOOD-1.88%
58,550 Archer-Daniels-Midland Co........................................ 1,220,801 1,266,144
19,200 ConAgra, Inc. (h)................................................ 835,149 1,234,800
24,000 Heinz (H.J.) Co.................................................. 766,680 999,000
------------- -------------
2,822,630 3,499,944
------------- -------------
HEALTH CARE SERVICES-0.59%
16,500 Cardinal Health, Inc. (h)........................................ 781,880 1,093,125
------------- -------------
HOTEL AND GAMING-0.94%
44,000 Mirage Resorts, Inc. (a)......................................... 501,600 1,179,750
17,000 Sun International Hotels Ltd. (a) (h)............................ 843,144 571,625
------------- -------------
1,344,744 1,751,375
------------- -------------
INSURANCE-2.92%
40,500 American International Group, Inc................................ 2,741,083 3,822,187
43,000 Hartford Life, Inc............................................... 1,400,569 1,604,437
------------- -------------
4,141,652 5,426,624
------------- -------------
MACHINERY-OIL AND WELL-0.57%
25,000 Baker Hughes, Inc................................................ 1,076,413 1,059,375
------------- -------------
MEDICAL TECHNOLOGY-1.97%
19,000 Boston Scientific Corp. (a) (h).................................. 821,898 1,339,500
14,700 Depuy, Inc. (a).................................................. 257,250 339,937
22,000 Medtronic, Inc. (and rights)..................................... 492,656 1,988,250
------------- -------------
1,571,804 3,667,687
------------- -------------
NATURAL GAS TRANSMISSIONS-0.30%
12,000 Williams Companies, Inc. (h)..................................... 558,986 558,750
------------- -------------
OIL AND GAS FIELD SERVICES-2.80%
16,500 Camco International, Inc......................................... 716,862 1,136,437
24,500 Precision Drilling Corp. (a) (h)................................. 900,863 1,341,375
36,000 Schlumberger Ltd................................................. 1,672,011 2,742,750
------------- -------------
3,289,736 5,220,562
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-1.48%
40,600 Nuevo Energy Co. (a)............................................. 1,590,500 2,062,988
62,000 Santa Fe Energy Resources, Inc. (a).............................. 513,002 685,875
------------- -------------
2,103,502 2,748,863
------------- -------------
OIL-OFFSHORE DRILLING-0.36%
15,000 Santa Fe International Corp. (a)................................. 445,350 671,250
------------- -------------
POLLUTION CONTROL-0.99%
51,000 U.S. Filter Corp. (a) (h)........................................ 1,579,200 1,836,000
------------- -------------
PRECISION INSTRUMENTS-TEST, RESEARCH-0.30%
7,500 Perkin Elmer Corp................................................ 593,047 555,000
------------- -------------
PUBLISHING-0.65%
5,100 CMP Media, Inc. Class A (a) (h).................................. 112,200 136,425
21,000 Time Warner, Inc................................................. 981,750 1,081,500
------------- -------------
1,093,950 1,217,925
------------- -------------
RAILROAD AND RAILROAD EQUIPMENT-0.43%
48,000 Tranz Rail Holdings Ltd. ADR (h)................................. 864,000 807,000
------------- -------------
</TABLE>
11
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
August 31, 1997
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------- -------------
<C> <S> <C> <C>
RETAIL-DEPARTMENT STORES-1.81%
49,000 Kohl's Corp. (a)................................................. $ 957,074 $ 3,377,938
------------- -------------
RETAIL-SPECIALTY-3.21%
81,000 Costco Companies, Inc. (a)....................................... 1,211,625 2,921,063
59,800 CUC International, Inc. (a) (h).................................. 704,345 1,405,300
34,800 Home Depot, Inc.................................................. 440,720 1,642,125
------------- -------------
2,356,690 5,968,488
------------- -------------
TELECOMMUNICATION EQUIPMENT-2.28%
7,200 Associated Group, Inc. Class A (a)............................... 403,200 523,800
43,400 Ericsson (L.M.) Telephone Co. Class B ADR........................ 499,931 1,809,238
32,000 Tellabs, Inc.(a)................................................. 646,592 1,910,000
------------- -------------
1,549,723 4,243,038
------------- -------------
TELEPHONE SERVICES-2.13%
65,000 AirTouch Communications, Inc. (a)................................ 1,685,363 2,197,813
59,016 WorldCom, Inc. (a) (h)........................................... 347,181 1,766,792
------------- -------------
2,032,544 3,964,605
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------- -------------
<C> <S> <C> <C>
TOBACCO-1.27%
54,000 Philip Morris Companies, Inc..................................... $ 1,936,964 $ 2,355,750
------------- -------------
TOYS-1.23%
68,488 Mattel, Inc. (h)................................................. 643,894 2,290,068
------------- -------------
UTILITIES-ELECTRIC-1.41%
53,800 AES Corp. (a) (h)................................................ 1,348,326 1,990,600
40,100 Tucson Electric Power Co. (a) (h)................................ 669,426 639,094
------------- -------------
2,017,752 2,629,694
------------- -------------
WASTE DISPOSAL-0.65%
29,000 U.S.A. Waste Services, Inc. (a)(h)............................... 1,036,088 1,218,000
------------- -------------
TOTAL COMMON STOCKS.............................................. $ 56,211,477 $ 92,589,315
------------- -------------
------------- -------------
</TABLE>
ASSET BACKED SECURITIES-11.21%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
COMMERCIAL LOANS-6.48%
$ 917,745 DLJ Mortgage Acceptance Corp., 7.28% Ser 1996-CF1
Class A-1A 3-13-2028 (f)........................ AAA $ 924,555 $ 936,853
1,250,000 First Union Lehman Brothers Commercial Mortgage,
7.30% Ser 1997-C1 Class A2 12-18-2006........... Aaa* 1,262,869 1,284,180
650,068 GS Mortgage Securities Corp. II Protective Life,
7.02% Ser 1996-PL Class A1 3-1-2026............. Aaa* 650,027 655,680
1,932,837 J.P. Morgan Commercial Mortgage Finance Corp.,
6.47% Ser 1996-C2 Class A 11-25-2027............ AAA 1,856,017 1,911,924
913,286 Merrill Lynch Mortgage Investors, Inc., 6.7887%
Variable Rate Ser 1995-C3 Class A1 12-26-2025... AAA 921,746 921,387
700,000 Midland Realty Acceptance Corp., 7.76% Ser 1996-C1
Class B 7-25-2008............................... AA 706,638 734,918
1,000,000 Morgan Stanley Capital I, Inc., 7.27% Ser
1997-HF1Class A2 1-15-2007 (f).................. Aaa* 1,017,596 1,016,250
850,000 Morgan Stanley Capital I, Inc., 7.3773% Ser
1996-WF1 Class A3 8-15-2006 (f)................. Aaa* 866,723 878,023
1,750,000 Mortgage Capital Funding, Inc., 7.90% Ser 1996-MC1
Class B 2-15-2006............................... AA+ 1,766,532 1,853,862
470,000 Nationslink Funding Corp., 7.515% Ser 1996-1 Class
A2 7-20-2005.................................... AAA 470,529 486,230
1,336,589 Nationslink Funding Corp., 7.533% Ser 1996-1 Class
A1 9-20-2002.................................... AAA 1,347,686 1,378,827
------------- -------------
11,790,918 12,058,134
------------- -------------
HOUSING-0.41%
750,000 Money Store (The) Home Improvement Trust, 7.41%
Ser 1997-1 Class M1 5-15-2017................... AA 753,037 759,967
------------- -------------
MANUFACTURED HOMES-0.82%
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 1,530,450
------------- -------------
MULTI-FAMILY LOANS-1.65%
1,500,000 DLJ Mortgage Acceptance Corp., 8.50% Multifamily
Mtg Pass Thru Certificate Ser 1994-MF4 Class A2
4-18-2001....................................... A 1,523,124 1,564,995
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 1,060,190
397,690 Fund America Structured Transactions, L.P.,
Collateralized Note, 8.231% Ser 1996-1 Class A
Principal Only 1-1-2033 (g) (i)................. Baa3* 292,939 299,635
198,845 Fund America Structured Transactions, L.P.,
Collateralized Note, 8.7625% Ser 1996-1 Class A
Principal Only 1-1-2033 (g) (i)................. Baa3* 150,538 149,817
------------- -------------
2,949,101 3,074,637
------------- -------------
</TABLE>
12
<PAGE>
ASSET BACKED SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
RAILROAD AND RAILROAD EQUIPMENT-0.50%
$ 910,000 Railcar Leasing L.L.C., 7.125% Ser 1997-1 Class A2
1-15-2013 (f)................................... AAA $ 908,164 $ 919,356
------------- -------------
WHOLE LOAN RESIDENTIAL-1.35%
984,032 Mid-State Trust 7.54% Ser 6 Class A3 7-1-2035..... AA 983,418 1,004,894
1,495,251 PNC Mortgage Securities Corp., 7.50% Ser 1997
Class 2PP1 7-25-2027............................ AAA 1,491,752 1,509,567
------------- -------------
2,475,170 2,514,461
------------- -------------
TOTAL ASSET BACKED SECURITIES..................... $ 20,370,531 $ 20,857,005
------------- -------------
------------- -------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-9.75%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
AEROSPACE AND EQUIPMENT-0.28%
$ 500,000 Lockheed Martin Corp., 7.65% Deb 5-1-2016........................ BBB+ $ 502,877 $ 516,741
------------- -------------
AIRLINES-0.27%
500,000 Federal Express Corp., 7.50% 1997-A Pass Thru Certificate
1-15-2018...................................................... AAA 500,000 506,010
------------- -------------
BANKS-0.94%
750,000 Bank Austria AG, 7.25% Sub Note 2-15-2017 (i).................... AAA 748,593 749,695
500,000 Republic NY Capital I, 7.75% 11-15-2026.......................... NR 487,553 501,642
500,000 St. Paul Bancorp, Inc., 7.125% Sr Note 2-15-2004................. BBB- 497,830 496,452
------------- -------------
1,733,976 1,747,789
------------- -------------
BROKERAGE AND INVESTMENT-1.08%
500,000 Bear Stearns Capital Trust I, 7.00% Variable Rate Bond
1-15-2027...................................................... NR 499,711 500,311
1,000,000 Lehman Brothers Holdings, 7.375% Sr Note 5-15-2004............... Baa1* 996,191 1,015,236
500,000 Salomon, Inc., 6.75% Sr Note 2-15-2003........................... BBB 499,173 493,266
------------- -------------
1,995,075 2,008,813
------------- -------------
BUILDING MATERIALS-0.27%
500,000 Owens-Corning, 7.00% Medium Term Note 5-15-2000.................. BBB- 500,000 504,318
------------- -------------
CHEMICALS-0.52%
1,000,000 Lyondell Petrochemical, 7.55% Deb 2-15-2026...................... BBB- 946,247 978,702
------------- -------------
CONSUMER FINANCE-0.40%
750,000 Beneficial Corp., 6.33% Medium Term Note 12-18-2000.............. A 743,551 745,730
------------- -------------
ENERGY-0.56%
500,000 NGC Corp. Capital Trust, 8.316% 6-1-2027 (i)..................... BBB 500,000 527,773
500,000 NGC Corp., 7.625% Deb 10-15-2026................................. BBB+ 497,629 508,113
------------- -------------
997,629 1,035,886
------------- -------------
FINANCE COMPANIES-0.27%
500,000 Homeside Lending, Inc., 6.875% Medium Term Note 6-30-2002........ Baa2* 499,840 500,329
------------- -------------
FOREIGN-GOVERNMENT-0.27%
500,000 Poland (Republic of), 7.125% Yankee Bond 7-1-2004................ Baa3* 497,501 501,934
------------- -------------
FOREIGN-GOVERNMENT AGENCIES-0.42%
750,000 Quebec (Province of), 7.50% Yankee Bond 7-15-2002................ A+ 772,993 774,502
------------- -------------
FOREST PRODUCTS-0.36%
600,000 Georgia-Pacific Corp., 9.625% Deb 3-15-2022...................... BBB- 616,932 670,051
------------- -------------
</TABLE>
13
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
August 31, 1997
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
MEDIA-0.87%
$ 500,000 News America Holdings, 7.50% Sr Note 3-1-2000.................... BBB $ 506,102 $ 512,654
1,000,000 News America Holdings, 8.875% Deb 4-26-2023...................... BBB 1,027,214 1,106,554
------------- -------------
1,533,316 1,619,208
------------- -------------
MISCELLANEOUS-0.30%
500,000 New York (City of), 10.00% General Obligation Taxable Bond Fiscal
1991 Ser D 8-1-2005............................................ BBB+ 475,218 563,121
------------- -------------
NATURAL GAS TRANSMISSIONS-0.41%
750,000 Tennessee Gas Pipeline, 7.50% Bond 4-1-2017...................... BBB 738,133 763,322
------------- -------------
RAILROAD AND RAILROAD EQUIPMENT-0.48%
850,000 CSX Corp., 7.90% Deb 5-1-2017 (i)................................ BBB 849,510 898,291
------------- -------------
REAL ESTATE-INVESTMENT TRUST-0.28%
500,000 Meditrust, 7.82% Note 9-10-2026.................................. BBB- 523,388 520,836
------------- -------------
SUPRANATIONAL-0.54%
1,000,000 Corp Andina De Fomento, 7.10% Yankee Bond 2-1-2003............... BBB+ 999,463 1,009,707
------------- -------------
TELECOMMUNICATIONS-0.54%
1,000,000 360 Communications Co., 7.50% Sr Note 3-1-2006................... BBB- 997,935 1,012,015
------------- -------------
TELEPHONE SERVICES-0.28%
500,000 GTE Corp., 7.51% Note 4-1-2009................................... A 496,029 521,657
------------- -------------
UTILITIES-ELECTRIC-0.41%
750,000 Texas Utilities Electric Capital V, 8.175% 1-30-2037............. BBB 750,000 755,655
------------- -------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE......................... $ 17,669,613 $ 18,154,617
------------- -------------
------------- -------------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-6.48%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
--------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
BROADCASTING-0.28%
$500,000 Sinclair Broadcasting Group, Inc., 10.00% Sr
Sub Note 9-30-2005......................... B $ 500,000 $ 520,000
------------- -------------
CABLE TELEVISION-1.25%
500,000 Australis Media Ltd., 14.00% Sr Sub Disc Note
5-15-2003 (Zero coupon through 5-15-2000,
thereafter 15.75%) (e)..................... CCC- 364,215 412,500
500,000 Cablevision Systems Corp., 10.50% Sr Sub Deb
5-15-2016.................................. BB- 507,410 562,500
527,500 Falcon Holding Group, L.P., 11.00% Sr Sub
Note Ser B 9-15-2003 (Interest is
Payable-in-Kind)........................... NR 524,346 521,289
500,000 Telewest Communications plc, 9.625% Yankee
Deb 10-1-2006.............................. B+ 515,591 517,500
500,000 Wireless One, Inc., 13.00% Sr Note
10-15-2003................................. B- 489,545 306,875
------------- -------------
2,401,107 2,320,664
------------- -------------
COMPUTER-HARDWARE-0.30%
500,000 Unisys Corp., 11.75% Sr Note 10-15-2004...... B+ 542,992 550,625
------------- -------------
ENERGY-0.27%
500,000 Energy Corp. of America, 9.50% Sr Sub Note
5-15-2007 (i).............................. B 500,000 495,000
------------- -------------
FOOD-MISCELLANEOUS-0.29%
500,000 Envirodyne Industries, Inc., 12.00% First
Priority Sr Secured Note 6-15-2000......... B+ 500,000 546,250
------------- -------------
HEALTH CARE SERVICES-0.29%
500,000 Tenet Healthcare Corp., 10.125% Sr Sub Note
3-1-2005................................... B+ 531,347 547,500
------------- -------------
HOTEL AND MOTEL-0.28%
500,000 HMH Properties, Inc., 9.50% Sr Note
5-15-2005.................................. BB- 522,350 520,000
------------- -------------
</TABLE>
14
<PAGE>
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
--------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
HOUSING-0.29%
$500,000 MDC Holdings, Inc., 11.125% Note
12-15-2003................................. B+ $ 526,582 $ 542,500
------------- -------------
LEISURE TIME-AMUSEMENTS-0.80%
500,000 Speedway Motorsports, Inc., 8.50% Sr Sub Note
8-15-2007 (f).............................. B+ 504,362 501,250
500,000 Station Casinos, Inc., 10.125% Sr Sub Note
3-15-2006.................................. B+ 504,302 498,750
500,000 Trump Atlantic City Associates Funding, Inc.,
11.25% First Mtg Bond 5-1-2006............. BB- 500,000 487,500
------------- -------------
1,508,664 1,487,500
------------- -------------
PUBLISING-0.30%
500,000 Petersen Publishing Co. LLC, 11.125% Sr Sub
Note 11-15-2006............................ NR 562,089 561,250
------------- -------------
STEEL AND IRON-0.29%
500,000 AK Steel Corp., 10.75% Sr Note 4-1-2004...... BB- 544,888 541,250
------------- -------------
TELECOMMUNICATIONS-1.27%
500,000 Dobson Communications Corp., 11.75% Sr Note
4-15-2007.................................. NR 475,419 487,500
500,000 Omnipoint Corp., 11.625% Sr Note 8-15-2006... NR 488,178 485,000
500,000 Paging Network, Inc., 10.125% Sr Sub Note
8-1-2007................................... B 520,345 506,250
500,000 Phonetel Technologies, 12.00% Sr Note
12-15-2006................................. B- 501,229 507,500
500,000 Teleport Communications, 9.21% Sr Disc Note
7-1-2007 (Zero coupon until 7-1-2001,
thereafter 11.125%) (e).................... B 335,008 372,500
------------- -------------
2,320,179 2,358,750
------------- -------------
TEXTILE MANUFACTURING-0.28%
500,000 Pillowtex Corp., 10.00% Sr Sub Note
11-15-2006................................. NR 526,698 530,000
------------- -------------
TRANSPORTATION-0.29%
500,000 Greyhound Lines, Inc., 11.50% Sr Note
4-15-2007.................................. NR 541,069 536,250
------------- -------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... $ 12,027,965 $ 12,057,539
------------- -------------
------------- -------------
</TABLE>
U.S. GOVERNMENT SECURITIES-18.68%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION-5.96%
MORTGAGE BACKED SECURITIES:
$ 700,370 6.50% 1998 (j)................................................... $ 691,615 $ 690,302
2,535,296 6.50% 2010....................................................... 2,514,480 2,498,851
3,717,623 7.00% 2025....................................................... 3,658,009 3,669,989
474,006 7.50% 2026....................................................... 470,274 478,450
1,489,405 8.00% 2025....................................................... 1,511,979 1,530,364
194,537 9.00% 2016-2021.................................................. 191,996 206,331
------------- -------------
9,038,353 9,074,287
------------- -------------
NOTES:
2,000,000 6.85% 2000....................................................... 2,000,000 2,011,462
------------- -------------
TOTAL FEDERAL NATIONAL MORTGAGE ASSOCIATION...................... 11,038,353 11,085,749
------------- -------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION-1.13%
MORTGAGE BACKED SECURITIES:
1,952,200 9.00% 2023....................................................... 2,015,646 2,070,552
41,241 9.50% 2019....................................................... 40,906 44,566
------------- -------------
2,056,552 2,115,118
------------- -------------
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION................... 2,056,552 2,115,118
------------- -------------
</TABLE>
15
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
August 31, 1997
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
U.S. TREASURY SECURITIES-11.59%
BONDS:
$4,450,000 6.375% 2027 (h).................................................. $ 4,339,212 $ 4,315,107
------------- -------------
NOTES:
2,815,000 6.25% 2002-2007 (h).............................................. 2,818,832 2,807,037
4,185,000 6.375% 2000 (h).................................................. 4,180,981 4,216,387
400,000 6.50% 2005....................................................... 395,434 403,000
2,330,000 6.625% 2002 (h).................................................. 2,339,091 2,365,677
7,240,000 6.875% 2006 (h).................................................. 7,455,180 7,461,725
------------- -------------
17,189,518 17,253,826
------------- -------------
TOTAL U.S. TREASURY SECURITIES................................... 21,528,730 21,568,933
------------- -------------
TOTAL U.S. GOVERNMENT SECURITIES................................. 34,623,635 34,769,800
------------- -------------
------------- -------------
TOTAL LONG-TERM INVESTMENTS...................................... $ 140,903,221 $ 178,428,276
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-3.96%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-3.37%
$6,271,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.46%.................. $ 6,271,000
-------------
DIVERSIFIED FINANCE-0.59%
1,106,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.56%........................... 1,106,000
-------------
TOTAL SHORT-TERM INVESTMENTS...................... 7,377,000
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$148,280,221) (b)............................... $ 185,805,276
-------------
-------------
</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 August 31, 1997, the cost of securities for federal income tax purposes
was $148,293,834 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation........................... $38,422,524
Unrealized depreciation........................... (911,082)
---------------------------------------------------------------
Net unrealized appreciation....................... $37,511,442
---------------------------------------------------------------
</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 7.09% of net assets as of August 31, 1997.
(e) The interest rates disclosed for these securities represent the effective
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 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 917,745 DLJ Mortgage Acceptance Corp. due 2028 $ 924,555
June 11, 1997 850,000 Morgan Stanley Capital I, Inc. due 2006 866,723
August 12, 1997 1,000,000 Morgan Stanley Capital I, Inc. due 2007 1,017,596
March 4, 1997 910,000 Railcar Leasing L.L.C. due 2013 908,164
August 12, 1997 500,000 Speedway Mortorsports, Inc. due 2007 504,362
</TABLE>
The value of these securities at August 31, 1997, was $4,251,732, which
represents 2.28% of net assets.
(g) The interest rates disclosed for principal only strips represent effective
yields at August 31, 1997. These investments have been identified by
portfolio management as liquid securities. The aggregate value of these
securities at August 31, 1997, was $449,452, which represents 0.24% of net
assets.
(h) Security is fully or partially on loan at August 31, 1997. See Note 1 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 vlaue of these securities
at August 31, 1997, was $3,120,211, which represents 1.68% of net assets.
(j) The cost of securities purchased on a when-issued basis at August 31, 1997,
was $691,615.
* Moody's Rating
16
<PAGE>
FORTIS STOCK FUNDS
VALUE FUND
Schedule of Investments
August 31, 1997
COMMON STOCKS-90.12%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-0.41%
2,550 Interpublic Group of Companies, Inc. (d)......................... $ 80,668 $ 124,312
------------ ------------
AEROSPACE AND EQUIPMENT-2.33%
3,500 Lockheed Martin Corp............................................. 365,661 362,906
6,200 Raytheon Co. (d)................................................. 337,118 341,000
------------ ------------
702,779 703,906
------------ ------------
APPAREL-0.63%
7,100 Fruit of the Loom, Inc., Class A (a) (d)......................... 258,517 189,925
------------ ------------
AUTOMOBILE MANUFACTURERS-1.29%
6,200 General Motors Corp.............................................. 370,547 389,050
------------ ------------
BANKS-7.79%
11,000 Bank of New York Co., Inc........................................ 299,790 490,875
4,700 Chase Manhattan Corp............................................. 420,090 522,581
4,800 Citicorp......................................................... 437,402 612,600
6,100 Summit Bancorp, Inc. (d)......................................... 324,582 362,187
4,200 U.S. Bancorp..................................................... 299,592 367,762
------------ ------------
1,781,456 2,356,005
------------ ------------
BASIC INDUSTRY-3.52%
12,243 Fort James Corp. (d)............................................. 369,483 514,206
6,900 Hartford Financial Services Group................................ 597,435 550,275
------------ ------------
966,918 1,064,481
------------ ------------
BROADCASTING-0.38%
4,900 Comcast Corp., Special Class A................................... 79,488 114,844
------------ ------------
BUSINESS SERVICES AND SUPPLIES-3.06%
6,300 First Data Corp.................................................. 208,647 258,694
9,100 Fiserv, Inc. (a)................................................. 329,108 409,500
8,400 Sabre Group Holdings, Inc. (a)................................... 228,095 258,300
------------ ------------
765,850 926,494
------------ ------------
CHEMICALS-SPECIALTY-2.24%
10,600 Cabot Corp....................................................... 270,413 290,175
11,900 Sigma-Aldrich Corp............................................... 327,218 388,237
------------ ------------
597,631 678,412
------------ ------------
COMPUTER-SOFTWARE-1.00%
6,600 Automatic Data Processing, Inc. (d).............................. 291,840 300,712
------------ ------------
CONTAINERS AND PACKAGING-1.30%
7,700 Crown Cork & Seal Company, Inc. (d).............................. 408,488 391,737
------------ ------------
DRUGS-4.12%
3,400 Abbott Laboratories.............................................. 194,939 203,787
6,700 Johnson & Johnson................................................ 368,883 379,806
5,900 Pfizer, Inc...................................................... 275,693 326,713
7,000 Schering-Plough Corp............................................. 240,675 336,000
------------ ------------
1,080,190 1,246,306
------------ ------------
ELECTRICAL EQUIPMENT-1.70%
8,200 General Electric Co.............................................. 358,212 512,500
------------ ------------
ELECTRONIC-CONTROLS AND EQUIPMENT-1.16%
6,600 Cooper Industries, Inc........................................... 320,591 351,863
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-3.08%
8,400 Avnet, Inc....................................................... $ 456,067 $ 581,175
3,800 Intel Corp....................................................... 268,838 350,075
------------ ------------
724,905 931,250
------------ ------------
FINANCE SERVICES-6.28%
6,600 BankBoston Corp. (d)............................................. 519,446 548,625
8,900 Fannie Mae....................................................... 366,101 391,600
6,100 Finova Group, Inc................................................ 402,040 515,831
4,800 Mercantile Bancorporation, Inc................................... 330,036 330,900
2,500 Southtrust Corp.................................................. 111,719 111,875
------------ ------------
1,729,342 1,898,831
------------ ------------
FOOD-6.55%
15,540 Archer-Daniels-Midland Co........................................ 303,321 336,053
9,400 ConAgra, Inc. (d)................................................ 452,863 604,538
12,400 Sara Lee Corp.................................................... 475,882 499,100
15,200 Sysco Corp....................................................... 490,468 539,600
------------ ------------
1,722,534 1,979,291
------------ ------------
HEALTH CARE SERVICES-1.11%
10,650 Columbia/HCA Healthcare Corp..................................... 392,711 336,141
------------ ------------
HOUSEHOLD PRODUCTS-1.38%
4,300 Kimberly-Clark Corp.............................................. 213,626 203,981
1,600 Procter & Gamble Co.............................................. 170,567 212,900
------------ ------------
384,193 416,881
------------ ------------
INSURANCE-1.28%
4,100 American International Group, Inc................................ 412,122 386,938
------------ ------------
MEDICAL SUPPLIES-1.62%
9,200 Baxter International, Inc........................................ 382,947 489,325
------------ ------------
METALS-MINING AND MISCELLANEOUS-0.83%
6,000 Cleveland-Cliffs, Inc............................................ 236,186 250,125
------------ ------------
MISCELLANEOUS-0.98%
10,800 Sherwin-Williams Co.............................................. 316,074 296,325
------------ ------------
NATURAL GAS TRANSMISSIONS-3.80%
7,300 Enron Corp....................................................... 306,978 281,506
6,700 Questar Corp..................................................... 253,005 268,000
12,900 Williams Companies, Inc. (d)..................................... 513,798 600,656
------------ ------------
1,073,781 1,150,162
------------ ------------
OFFICE EQUIPMENT AND SUPPLIES-4.36%
4,300 International Business Machines Corp............................. 226,908 433,763
8,300 Pitney Bowes, Inc................................................ 458,457 633,913
3,300 Xerox Corp....................................................... 175,140 249,150
------------ ------------
860,505 1,316,826
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-3.70%
8,700 Anadarko Petroleum Corp.......................................... 510,128 638,906
2,800 Exxon Corp....................................................... 140,370 171,325
6,748 Monterey Resources, Inc.......................................... 94,468 139,178
15,300 Santa Fe Energy Resources, Inc. (a).............................. 125,011 169,256
------------ ------------
869,977 1,118,665
------------ ------------
</TABLE>
17
<PAGE>
FORTIS STOCK FUNDS
VALUE FUND (CONTINUED)
Schedule of Investments
August 31, 1997
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
OIL-REFINING-3.87%
4,900 Atlantic Richfield Co............................................ $ 325,593 $ 367,500
6,000 Mobil Corp....................................................... 389,780 436,500
7,200 Royal Dutch Petroleum Co. NY Shares.............................. 319,803 365,400
------------ ------------
1,035,176 1,169,400
------------ ------------
PRECISION INSTRUMENTS-TEST, RESEARCH-1.16%
6,400 Emerson Electric Co.............................................. 292,026 350,000
------------ ------------
PRINTING-1.25%
20,900 Unisource Worldwide, Inc......................................... 411,659 378,813
------------ ------------
PUBLISHING-1.44%
7,100 McGraw Hill Companies, Inc....................................... 366,299 435,319
------------ ------------
RAILROAD AND RAILROAD EQUIPMENT-2.03%
6,700 Burlington Northern Santa Fe Corp................................ 585,622 614,306
------------ ------------
REAL ESTATE-INVESTMENT TRUST-1.95%
5,800 Cali Realty Corp................................................. 196,350 216,050
3,600 Kimco Realty Corp................................................ 114,102 121,275
5,000 Liberty Property Trust........................................... 121,761 128,438
4,400 Public Storage, Inc.............................................. 123,918 123,475
------------ ------------
556,131 589,238
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
RETAIL-DEPARTMENT STORES-2.01%
14,500 Federated Department Stores, Inc. (a)............................ $ 499,270 $ 609,000
------------ ------------
RETAIL-SPECIALTY-2.35%
9,400 AutoZone, Inc. (a) (d)........................................... 228,694 265,550
12,900 Lowe's Companies, Inc. (d)....................................... 444,168 445,856
------------ ------------
672,862 711,406
------------ ------------
TELECOMMUNICATIONS-1.24%
6,000 Ameritech Corp................................................... 340,233 376,125
------------ ------------
TOBACCO-1.02%
7,100 Philip Morris Companies, Inc..................................... 291,038 309,738
------------ ------------
UTILITIES-TELEPHONE-5.00%
6,451 Bell Atlantic Corp............................................... 396,924 466,891
5,600 GTE Corp......................................................... 234,892 249,550
7,100 SBC Communications, Inc.......................................... 361,445 386,063
8,700 Sprint Corp...................................................... 354,868 408,900
------------ ------------
1,348,129 1,511,404
------------ ------------
UNIT INVESTMENT TRUST-0.90%
3,000 S & P 500 Depository Receipt (d)................................. 278,593 271,078
------------ ------------
TOTAL COMMON STOCKS.............................................. $ 23,845,490 $ 27,247,134
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-9.45%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
BANKS-2.76%
$ 833,598 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.46%............. $ 833,598
------------
DIVERSIFIED FINANCE-4.71%
1,424,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.56%...................... 1,424,000
------------
U.S. GOVERNMENT AGENCY-1.98%
600,000 Federal Home Loan Mortgage Corp., 5.52%,
9-2-1997................................... 599,819
------------
TOTAL SHORT-TERM INVESTMENTS................. 2,857,417
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$26,702,907) (B)........................... $30,104,551
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At August 31, 1997, the cost of securities for federal income tax purposes
was $26,711,184, and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation........................... $3,803,316
Unrealized depreciation........................... (409,949)
--------------------------------------------------------------
Net unrealized appreciation....................... $3,393,367
--------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Security is fully or partially on loan at August 31, 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 1.21% of net assets as of August 31, 1997.
18
<PAGE>
FORTIS STOCK FUNDS
GROWTH & INCOME FUND
Schedule of Investments
August 31, 1997
COMMON STOCKS-73.32%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (a) Value (b)
------- ------------ ------------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-1.49%
4,300 United Technologies Corp......................................... $ 293,044 $ 335,669
------------ ------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-2.77%
5,200 Genuine Parts Co................................................. 160,407 160,550
9,600 Tenneco, Inc..................................................... 425,653 466,200
------------ ------------
586,060 626,750
------------ ------------
BANKS-5.65%
7,200 Banc One Corp.................................................... 317,521 386,100
3,500 Chase Manhattan Corp............................................. 314,151 389,156
755 U.S. Bancorp..................................................... 56,223 66,110
3,000 Union Planters Corp. (d)......................................... 113,512 153,750
4,700 Washington Mutual, Inc. (d)...................................... 257,658 281,412
------------ ------------
1,059,065 1,276,528
------------ ------------
BUSINESS SERVICES AND SUPPLIES-0.75%
2,500 Omnicom Group, Inc............................................... 114,823 169,375
------------ ------------
CONSUMER GOODS-0.64%
4,200 Fortune Brands, Inc.............................................. 133,401 144,375
------------ ------------
DIVERSIFIED COMPANIES-1.79%
1,200 Chemed Corp...................................................... 46,998 45,150
4,000 Minnesota Mining and Manufacturing Co. 320,538 359,500
------------ ------------
367,536 404,650
------------ ------------
DRUGS-7.64%
3,600 Abbott Laboratories.............................................. 192,143 215,775
3,300 American Home Products Corp...................................... 193,883 237,600
9,200 Glaxo Wellcome plc ADR (d)....................................... 344,379 366,850
3,100 Lilly (Eli) & Co., Inc........................................... 216,897 324,337
3,100 Merck & Co., Inc................................................. 244,633 284,619
1,800 Pfizer, Inc...................................................... 80,615 99,675
5,800 Pharmacia and UpJohn, Inc........................................ 230,269 197,562
------------ ------------
1,502,819 1,726,418
------------ ------------
ELECTRICAL EQUIPMENT-1.60%
5,800 General Electric Co.............................................. 289,951 362,500
------------ ------------
FINANCE SERVICES-5.87%
3,300 American Express Co.............................................. 203,239 256,575
3,300 Beneficial Corp.................................................. 198,304 236,156
3,900 Fannie Mae....................................................... 144,347 171,600
3,000 Household International, Inc..................................... 244,148 332,812
4,312 MBNA Corp. (d)................................................... 93,145 165,742
1,200 SLM Holding Corp................................................. 88,482 162,600
------------ ------------
971,665 1,325,485
------------ ------------
FOOD-2.60%
2,200 ConAgra, Inc. (d)................................................ 105,007 141,487
6,200 Heinz (H.J.) Co.................................................. 222,138 258,075
4,000 Quaker Oats Co. (d).............................................. 169,070 188,000
------------ ------------
496,215 587,562
------------ ------------
FURNITURE-0.63%
9,000 Shelby Williams Industries, Inc.................................. 123,750 143,437
------------ ------------
HAND TOOLS AND GENERAL HARDWARE-1.39%
7,500 Snap-On, Inc..................................................... 264,078 315,000
------------ ------------
HOUSEHOLD PRODUCTS-0.93%
1,600 Clorox Co........................................................ 172,357 210,000
------------ ------------
<CAPTION>
Market
Shares Cost (a) Value (b)
------- ------------ ------------
<C> <S> <C> <C>
INSURANCE-2.26%
7,000 LaSalle Re Holdings Ltd.......................................... $ 203,601 $ 245,875
3,600 St. Paul Companies, Inc.......................................... 262,626 264,150
------------ ------------
466,227 510,025
------------ ------------
MACHINERY-OIL AND WELL-2.92%
4,800 Baker Hughes, Inc................................................ 181,883 203,400
4,500 Dresser Industries, Inc.......................................... 136,780 187,875
5,600 Halliburton Co................................................... 186,444 267,400
------------ ------------
505,107 658,675
------------ ------------
MEDICAL SUPPLIES-1.65%
7,000 Baxter International, Inc........................................ 325,992 372,312
------------ ------------
NATURAL GAS TRANSMISSIONS-5.99%
5,286 El Paso Natural Gas Co........................................... 241,659 297,338
11,112 Enron Corp....................................................... 443,282 428,507
5,600 Sonat, Inc....................................................... 262,397 278,950
7,500 Williams Companies, Inc. (d)..................................... 293,996 349,219
------------ ------------
1,241,334 1,354,014
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-4.24%
2,600 Amoco Corp....................................................... 204,917 245,863
4,800 Exxon Corp....................................................... 234,027 293,700
13,000 Monterey Resources, Inc.......................................... 201,001 268,125
1,300 Texaco, Inc...................................................... 133,246 149,825
------------ ------------
773,191 957,513
------------ ------------
OIL-REFINING-0.97%
3,000 Mobil Corp....................................................... 195,848 218,250
------------ ------------
PUBLISHING-1.28%
4,700 McGraw Hill Companies, Inc....................................... 227,941 288,169
------------ ------------
RAILROAD AND RAILROAD EQUIPMENT-0.67%
9,000 Tranz Rail Holdings Ltd. ADR..................................... 136,375 151,313
------------ ------------
REAL ESTATE-INVESTMENT TRUST-5.72%
6,500 Beacon Properties Corp........................................... 208,545 234,000
12,400 Cornerstone Properties, Inc...................................... 174,706 220,100
6,600 Crescent Real Estate Equities Trust.............................. 178,627 208,725
12,000 Excel Realty Trust, Inc.......................................... 328,180 355,500
4,400 Highwoods Properties, Inc........................................ 134,466 143,000
3,500 Spieker Properties, Inc.......................................... 122,880 130,156
------------ ------------
1,147,404 1,291,481
------------ ------------
RETAIL-CLOTHING-0.86%
8,500 Limited (The), Inc............................................... 160,498 193,375
------------ ------------
RETAIL-DEPARTMENT STORES-1.00%
4,000 Sears Roebuck & Co............................................... 215,872 227,000
------------ ------------
RETAIL-SPECIALTY-1.57%
8,200 Intimate Brands, Inc. (d)........................................ 147,733 180,400
3,500 Rite Aid Corp. (d)............................................... 130,393 175,219
------------ ------------
278,126 355,619
------------ ------------
SHIP BUILDING, SHIPPING-0.69%
6,000 Knightsbridge Tankers Ltd........................................ 123,000 156,750
------------ ------------
TOBACCO-1.58%
8,200 Philip Morris Companies, Inc..................................... 316,793 357,725
------------ ------------
UTILITIES-ELECTRIC-1.66%
7,728 Duke Energy Corp. (d)............................................ 282,787 374,325
------------ ------------
</TABLE>
19
<PAGE>
FORTIS STOCK FUNDS
GROWTH & INCOME FUND (CONTINUED)
Schedule of Investments
August 31, 1997
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (a) Value (b)
------- ------------ ------------
<C> <S> <C> <C>
UTILITIES-TELEPHONE-6.51%
6,000 AT & T Corp...................................................... $ 235,920 $ 234,000
8,000 Deutsche Telekom AG ADR.......................................... 151,120 160,500
5,000 GTE Corp......................................................... 225,313 222,813
7,500 SBC Communications, Inc.......................................... 452,890 407,813
3,500 Sprint Corp...................................................... 142,607 164,500
<CAPTION>
Market
Shares Cost (a) Value (b)
------- ------------ ------------
<C> <S> <C> <C>
2,000 Telecom Corp. of New Zealand Ltd. ADR (d)........................ $ 74,482 $ 78,500
5,600 U.S. West Communications Group................................... 181,814 200,550
------------ ------------
1,464,146 1,468,676
------------ ------------
TOTAL COMMON STOCKS.............................................. $ 14,235,405 $ 16,562,971
------------ ------------
------------ ------------
</TABLE>
PREFERRED STOCKS-5.40%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (a) Value (b)
------- ------------ ------------
<C> <S> <C> <C>
CONTAINERS AND PACKAGING-0.79%
3,700 Crown Cork and Seal Co, Inc., Convertible Preferred, 4.50%....... $ 178,539 $ 179,219
------------ ------------
INSURANCE-1.96%
10,000 Sunamerica, Inc., Convertible Preferred, 8.50%................... 415,109 443,125
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-0.24%
1,000 Nuevo Energy Co., Convertible Preferred, Ser A, 5.75% (d)........ 50,000 54,500
------------ ------------
REAL ESTATE-INVESTMENT TRUST-0.76%
6,000 Excel Realty Trust, Inc.......................................... 152,040 171,000
------------ ------------
UTILITIES-ELECTRIC-1.65%
6,000 AES Corp., Convertible Preferred, Ser A "Tecons", 5.375%......... 305,415 372,000
------------ ------------
TOTAL PREFERRED STOCKS........................................... $ 1,101,103 $ 1,219,844
------------ ------------
------------ ------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-1.00%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (a) Value (b)
--------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
WASTE DISPOSAL-1.00%
$200,000 USA Waste Services, Inc. -- 4.00% Sub Note 2-1-2002.............. NR $ 203,874 $ 226,750
------------ ------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE......................... 203,874 226,750
------------ ------------
TOTAL LONG-TERM INVESTMENTS...................................... $15,540,382 $18,009,565
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-20.14%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (b)
----------- ------------
<C> <S> <C>
BANKS-2.85%
$ 643,000 First Trust Money Market Variable Rate Time Deposit, Current
rate -- 5.46%.................................................. $ 643,000
------------
DIVERSIFIED FINANCE-3.15%
712,000 Associates Corp. Master Variable Rate Note, Current
rate -- 5.56%.................................................. 712,000
------------
U.S. GOVERNMENT AGENCY-14.14%
700,000 Federal National Mortgage Assoc., 5.49%, 9-10-1997............... 698,950
500,000 Federal National Mortgage Assoc., 5.55%, 9-15-1997............... 498,865
1,000,000 Federal Home Loan Mortgage Corp., 5.50%, 9-4-1997................ 999,400
500,000 Federal Home Loan Mortgage Corp., 5.51%, 9-18-1997............... 498,647
500,000 Federal Home Loan Mortgage Corp., 5.56%, 9-19-1997............... 498,557
------------
3,194,419
------------
TOTAL SHORT-TERM INVESTMENTS..................................... 4,549,419
------------
TOTAL INVESTMENTS IN SECURITIES (COST: $20,089,802)(a)........... $22,558,984
------------
------------
</TABLE>
20
<PAGE>
SHORT-TERM INVESTMENTS-CONTINUED
- --------------------------------------------------------------------------------
(a) At August 31, 1997, the cost of securities for federal income tax purposes
was $20,089,802, and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation........................... $ 2,671,162
Unrealized depreciation........................... (201,980)
---------------------------------------------------------------
Net unrealized appreciation....................... $ 2,469,182
---------------------------------------------------------------
</TABLE>
(b) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(c) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets. Market value of investments in foreign
securities represents 5.13% of net assets as of August 31, 1997.
(d) Security is fully or partially on loan at August 31, 1997. See Note 1 of
accompanying Notes to Financial Statements.
21
<PAGE>
FORTIS STOCK FUNDS
CAPITAL FUND
Schedule of Investments
August 31, 1997
COMMON STOCKS-92.31%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-1.38%
103,500 Interpublic Group of Companies,
Inc. (e)................................... $ 4,201,434 $ 5,045,625
------------- -------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-1.14%
63,000 Magna International, Inc. Class A (e)........ 2,984,455 4,173,750
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-1.95%
59,000 Amgen, Inc. (a).............................. 3,356,803 2,924,187
93,000 Centocor, Inc. (a)........................... 3,262,209 4,173,375
------------- -------------
6,619,012 7,097,562
------------- -------------
BUSINESS SERVICES AND SUPPLIES-4.83%
130,400 Cognizant Corp............................... 4,906,515 5,476,800
116,012 First Data Corp. (e)......................... 2,431,676 4,763,743
118,000 Fiserv, Inc. (a)............................. 4,663,574 5,310,000
66,000 Ingram Micro, Inc. Class A (a) (e)........... 1,310,320 1,897,500
7,500 Wackenhut Corp., Class B..................... 184,275 131,719
------------- -------------
13,496,360 17,579,762
------------- -------------
CHEMICALS-1.32%
109,000 Monsanto Co.................................. 4,558,617 4,789,187
------------- -------------
COMPUTER-COMMUNICATIONS EQUIPMENT-1.18%
57,000 Cisco Systems, Inc. (a) (e).................. 676,438 4,296,375
------------- -------------
COMPUTER-SOFTWARE-4.92%
53,800 Microsoft Corp. (a).......................... 776,923 7,111,687
118,500 Oracle Corp. (a) (e)......................... 350,960 4,517,812
189,956 Sterling Commerce, Inc. (a) (e).............. 6,175,479 6,280,420
------------- -------------
7,303,362 17,909,919
------------- -------------
CONTAINERS AND PACKAGING-0.83%
59,400 Crown Cork & Seal Company, Inc. (e).......... 2,750,088 3,021,975
------------- -------------
DRUGS-5.10%
45,700 Biovail Corp. International (a) (e).......... 1,409,020 1,299,594
100,800 Forest Laboratories, Inc. (a) (e)............ 3,789,510 4,139,100
191,000 Mylan Laboratories, Inc. (e)................. 3,486,385 4,058,750
38,000 SmithKline Beecham plc ADR (e)............... 1,652,145 1,645,875
44,600 Teva Pharmaceutical Industries Ltd. ADR
(e)........................................ 2,214,162 2,335,925
40,000 Warner-Lambert Co............................ 3,911,127 5,082,500
------------- -------------
16,462,349 18,561,744
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-3.50%
62,000 Intel Corp................................... 2,660,832 5,711,750
95,700 Motorola, Inc................................ 3,871,447 7,021,987
------------- -------------
6,532,279 12,733,737
------------- -------------
FINANCE SERVICES-10.77%
266,000 Fannie Mae................................... 2,327,500 11,704,000
220,076 Green Tree Financial Corp. (e)............... 2,914,970 9,669,589
286,000 MBNA Corp. (e)............................... 2,735,252 10,993,125
136,000 MGIC Investment Corp. (e).................... 4,567,635 6,842,500
------------- -------------
12,545,357 39,209,214
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
FOOD-2.43%
409,500 Archer-Daniels-Midland Co.................... $ 8,365,727 $ 8,855,437
------------- -------------
HEALTH CARE SERVICES-2.35%
60,000 Cardinal Health, Inc. (e).................... 3,060,700 3,975,000
62,500 Oxford Health Plans, Inc. (a) (e)............ 2,768,578 4,570,312
------------- -------------
5,829,278 8,545,312
------------- -------------
HOTEL AND GAMING-2.54%
231,000 Mirage Resorts, Inc. (a) (e)................. 2,603,580 6,193,687
91,000 Sun International Hotels Ltd. (a) (e)........ 4,349,186 3,059,875
------------- -------------
6,952,766 9,253,562
------------- -------------
INSURANCE-4.80%
127,500 American International Group, Inc............ 8,384,934 12,032,812
146,000 Hartford Life, Inc........................... 4,758,192 5,447,625
------------- -------------
13,143,126 17,480,437
------------- -------------
MACHINERY-OIL AND WELL-1.01%
87,000 Baker Hughes, Inc............................ 3,745,465 3,686,625
------------- -------------
MEDICAL TECHNOLOGY-4.28%
63,500 Boston Scientific Corp. (a) (e).............. 2,620,470 4,476,750
50,300 Depuy, Inc. (a).............................. 880,250 1,163,188
110,000 Medtronic, Inc. (and rights)................. 1,296,332 9,941,250
------------- -------------
4,797,052 15,581,188
------------- -------------
NATURAL GAS TRANSMISSIONS-0.58%
45,000 Williams Companies, Inc. (e)................. 2,096,229 2,095,313
------------- -------------
OIL AND GAS FIELD SERVICES-4.52%
50,500 Camco International, Inc..................... 2,191,614 3,478,188
78,400 Precision Drilling Corp. (a) (e)............. 2,825,513 4,292,400
114,000 Schlumberger Ltd............................. 5,063,906 8,685,375
------------- -------------
10,081,033 16,455,963
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-3.27%
23,000 EVI, Inc. (a)................................ 820,477 1,208,938
96,595 Monterey Resources, Inc...................... 1,369,136 1,992,276
123,600 Nuevo Energy Co. (a)......................... 4,492,200 6,280,425
219,000 Santa Fe Energy Resources, Inc. (a).......... 1,811,683 2,422,688
------------- -------------
8,493,496 11,904,327
------------- -------------
OIL-OFFSHORE DRILLING-0.79%
19,700 Noble Drilling Corp. (a)..................... 568,673 560,219
52,000 Santa Fe International Corp. (a)............. 1,546,260 2,327,000
------------- -------------
2,114,933 2,887,219
------------- -------------
POLLUTION CONTROL-1.79%
181,000 U.S. Filter Corp. (a) (e).................... 5,553,962 6,516,000
------------- -------------
PRECISION INSTRUMENTS-TEST, RESEARCH-0.58%
28,700 Perkin Elmer Corp. (e)....................... 2,269,360 2,123,800
------------- -------------
PUBLISHING-1.14%
18,300 CMP Media, Inc. Class A (a) (e).............. 402,600 489,525
71,000 Time Warner, Inc. (e)........................ 3,319,250 3,656,500
------------- -------------
3,721,850 4,146,025
------------- -------------
RETAIL-DEPARTMENT STORES-3.60%
190,400 Kohl's Corp. (a) (e)......................... 3,718,455 13,125,700
------------- -------------
</TABLE>
22
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
RETAIL-SPECIALTY-6.82%
187,000 Costco Companies, Inc. (a)................... $ 3,860,497 $ 6,743,688
210,950 CUC International, Inc. (a) (e).............. 2,359,321 4,957,325
235,599 Home Depot, Inc.............................. 2,190,591 11,117,328
75,400 Pep Boys-Manny Moe & Jack.................... 1,393,357 1,998,100
------------- -------------
9,803,766 24,816,441
------------- -------------
TELECOMMUNICATION EQUIPMENT-4.71%
27,600 Associated Group, Inc. Class A (a)........... 1,545,600 2,007,900
166,000 Ericsson (L.M.) Telephone Co. Class B ADR.... 1,988,217 6,920,125
138,000 Tellabs, Inc. (a)............................ 2,379,591 8,236,875
------------- -------------
5,913,408 17,164,900
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
TELEPHONE SERVICES-4.12%
204,000 AirTouch Communications, Inc. (a)............ $ 5,406,392 $ 6,897,750
271,000 WorldCom, Inc. (a) (e)....................... 1,450,567 8,113,063
------------- -------------
6,856,959 15,010,813
------------- -------------
TOYS-2.37%
258,043 Mattel, Inc. (e)............................. 1,407,005 8,628,313
------------- -------------
UTILITIES-ELECTRIC-2.64%
188,000 AES Corp. (a)................................ 4,379,888 6,956,000
166,000 Tucson Electric Power Co. (a) (e)............ 2,771,223 2,645,625
------------- -------------
7,151,111 9,601,625
------------- -------------
WASTE DISPOSAL-1.05%
91,000 U.S.A. Waste Services, Inc. (a) (e).......... 3,250,984 3,822,000
------------- -------------
TOTAL COMMON STOCKS.......................... $ 193,395,716 $ 336,119,850
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-6.68%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
------------ -------------
<C> <S> <C>
BANKS-4.20%
$15,302,802 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.46%............. $ 15,302,802
-------------
DIVERSIFIED FINANCE-0.45%
1,635,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.56%...................... 1,635,000
-------------
U.S. GOVERNMENT AGENCY-2.03%
7,400,000 Federal Home Loan Mortgage Corp., 5.54%,
9-24-1997.................................. 7,373,212
-------------
TOTAL SHORT-TERM INVESTMENTS................. 24,311,014
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$217,706,730) (b).......................... $ 360,430,864
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At August 31, 1997, the cost of securities for federal income tax purposes
was $217,706,730 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation........................... $ 145,248,387
Unrealized depreciation........................... (2,524,253)
-----------------------------------------------------------------
Net unrealized appreciation....................... $ 142,724,134
-----------------------------------------------------------------
</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 8.90% of net assets as of August 31, 1997.
(e) Security is fully or partially on loan at August 31, 1997. See Note 1 of
accompanying Notes to Financial Statements.
23
<PAGE>
FORTIS STOCK FUNDS
FIDUCIARY FUND, INC.
Schedule of Investments
August 31, 1997
COMMON STOCKS-93.84%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-1.39%
26,800 Interpublic Group of Companies, Inc. (d) $ 1,089,434 $ 1,306,500
------------ ------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-1.13%
16,000 Magna International, Inc. Class A (d)........ 757,466 1,060,000
------------ ------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-1.84%
15,000 Amgen, Inc. (a).............................. 859,207 743,437
22,000 Centocor, Inc. (a)........................... 771,685 987,250
------------ ------------
1,630,892 1,730,687
------------ ------------
BUSINESS SERVICES AND SUPPLIES-4.76%
34,100 Cognizant Corp............................... 1,290,709 1,432,200
29,000 First Data Corp.............................. 594,197 1,190,812
30,000 Fiserv, Inc. (a)............................. 1,190,478 1,350,000
16,000 Ingram Micro, Inc. Class A (a)............... 318,024 460,000
1,900 Wackenhut Corp. Class B...................... 46,683 33,369
------------ ------------
3,440,091 4,466,381
------------ ------------
CHEMICALS-1.26%
27,000 Monsanto Co.................................. 1,129,555 1,186,312
------------ ------------
COMPUTER-COMMUNICATIONS EQUIPMENT-1.12%
14,000 Cisco Systems, Inc. (a)...................... 166,690 1,055,250
------------ ------------
COMPUTER-SOFTWARE-7.18%
20,000 BMC Software, Inc. (a) (d)................... 295,203 1,252,500
21,100 Microsoft Corp. (a).......................... 225,411 2,789,156
30,000 Oracle Corp. (a) (d)......................... 80,000 1,143,750
47,000 Sterling Commerce, Inc. (a).................. 554,543 1,553,937
------------ ------------
1,155,157 6,739,343
------------ ------------
CONTAINERS AND PACKAGING-0.78%
14,400 Crown Cork & Seal Company, Inc. (d).......... 666,688 732,600
------------ ------------
DRUGS-6.03%
11,400 Biovail Corp. International (a) (d).......... 353,500 324,187
26,300 Forest Laboratories, Inc. (a) (d)............ 987,323 1,079,944
120,000 Mylan Laboratories, Inc. (d)................. 1,672,976 2,550,000
10,000 SmithKline Beecham plc ADR................... 434,775 433,125
10,000 Warner-Lambert Co............................ 967,692 1,270,625
------------ ------------
4,416,266 5,657,881
------------ ------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-3.40%
16,000 Intel Corp................................... 554,205 1,474,000
23,400 Motorola, Inc................................ 943,794 1,716,975
------------ ------------
1,497,999 3,190,975
------------ ------------
FINANCE SERVICES-10.03%
59,200 Fannie Mae................................... 518,000 2,604,800
50,944 Green Tree Financial Corp. (d)............... 669,081 2,238,352
74,250 MBNA Corp. (d)............................... 719,281 2,853,984
34,000 MGIC Investment Corp. (d).................... 1,146,710 1,710,625
------------ ------------
3,053,072 9,407,761
------------ ------------
FOOD-2.42%
105,000 Archer-Daniels-Midland Co.................... 2,146,448 2,270,625
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
HEALTH CARE SERVICES-2.27%
15,000 Cardinal Health, Inc. (d).................... $ 765,175 $ 993,750
15,500 Oxford Health Plans, Inc. (a)................ 707,813 1,133,437
------------ ------------
1,472,988 2,127,187
------------ ------------
HOTEL AND GAMING-3.22%
30,000 CapStar Hotel Company (a).................... 742,500 982,500
48,500 Mirage Resorts, Inc. (a)..................... 546,510 1,300,406
22,000 Sun International Hotels Ltd. (a) (d)........ 1,052,175 739,750
------------ ------------
2,341,185 3,022,656
------------ ------------
INSURANCE-4.64%
31,500 American International Group, Inc............ 2,079,064 2,972,812
37,000 Hartford Life, Inc........................... 1,207,246 1,380,562
------------ ------------
3,286,310 4,353,374
------------ ------------
MACHINERY-OIL AND WELL-1.04%
23,000 Baker Hughes, Inc............................ 990,106 974,625
------------ ------------
MEDICAL TECHNOLOGY-4.08%
15,800 Boston Scientific Corp. (a) (d).............. 652,040 1,113,900
11,900 Depuy, Inc. (a).............................. 208,250 275,187
27,000 Medtronic, Inc. (and rights)................. 323,219 2,440,125
------------ ------------
1,183,509 3,829,212
------------ ------------
NATURAL GAS TRANSMISSIONS-0.60%
12,000 Williams Companies, Inc. (d)................. 558,986 558,750
------------ ------------
OIL AND GAS FIELD SERVICES-3.81%
12,200 Camco International, Inc..................... 529,567 840,275
19,400 Precision Drilling Corp. (a) (d)............. 703,290 1,062,150
22,000 Schlumberger Ltd............................. 1,027,851 1,676,125
------------ ------------
2,260,708 3,578,550
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-3.11%
6,000 EVI, Inc. (a)................................ 214,030 315,375
23,817 Monterey Resources, Inc...................... 337,925 491,226
29,800 Nuevo Energy Co. (a)......................... 1,082,036 1,514,213
54,000 Santa Fe Energy Resources, Inc. (a).......... 447,172 597,375
------------ ------------
2,081,163 2,918,189
------------ ------------
OIL-OFFSHORE DRILLING-2.59%
54,000 Falcon Drilling Co. (a) (d).................. 791,974 1,701,000
5,100 Noble Drilling Corp. (a)..................... 147,220 145,031
13,000 Santa Fe International Corp. (a)............. 386,565 581,750
------------ ------------
1,325,759 2,427,781
------------ ------------
POLLUTION CONTROL-1.77%
46,000 U.S. Filter Corp. (a) (d).................... 1,409,663 1,656,000
------------ ------------
PRECISION INSTRUMENTS-TEST, RESEARCH-0.54%
6,900 Perkin Elmer Corp............................ 545,781 510,600
------------ ------------
PUBLISHING-1.12%
4,600 CMP Media, Inc. Class A (a).................. 101,200 123,050
18,000 Time Warner, Inc. (d)........................ 841,500 927,000
------------ ------------
942,700 1,050,050
------------ ------------
RETAIL-DEPARTMENT STORES-2.72%
37,000 Kohl's Corp. (a)............................. 722,598 2,550,688
------------ ------------
</TABLE>
24
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
RETAIL-SPECIALTY-6.51%
47,000 Costco Companies, Inc. (a)................... $ 1,057,575 $ 1,694,938
54,375 CUC International, Inc. (a) (d).............. 676,394 1,277,813
55,849 Home Depot, Inc.............................. 941,900 2,635,375
18,900 Pep Boys-Manny Moe & Jack.................... 349,301 500,850
------------ ------------
3,025,170 6,108,976
------------ ------------
TELECOMMUNICATION EQUIPMENT-4.56%
6,600 Associated Group, Inc. Class A (a)........... 369,600 480,150
41,000 Ericsson (L.M.) Telephone Co. Class B ADR.... 473,513 1,709,188
35,000 Tellabs, Inc. (a)............................ 595,800 2,089,063
------------ ------------
1,438,913 4,278,401
------------ ------------
TELEPHONE SERVICES-4.04%
51,000 AirTouch Communications, Inc. (a)............ 1,361,108 1,724,438
69,008 WorldCom, Inc. (a) (d)....................... 373,035 2,065,927
------------ ------------
1,734,143 3,790,365
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
TOYS-2.28%
64,057 Mattel, Inc. (d)............................. $ 377,073 $ 2,141,906
------------ ------------
UTILITIES-ELECTRIC-2.57%
48,000 AES Corp. (a) (d)............................ 1,122,352 1,776,000
40,100 Tucson Electric Power Co. (a) (d)............ 669,426 639,094
------------ ------------
1,791,778 2,415,094
------------ ------------
WASTE DISPOSAL-1.03%
23,000 U.S.A. Waste Services, Inc. (a) (d).......... 821,698 966,000
------------ ------------
TOTAL COMMON STOCKS.......................... $ 49,459,989 $ 88,062,719
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-5.42%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
BANKS-2.20%
$2,066,941 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.46%............. $ 2,066,941
------------
DIVERSIFIED FINANCE-0.77%
727,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.56%...................... 727,000
------------
U.S. GOVERNMENT AGENCY-2.45%
2,300,000 Federal National Mortgage Assoc., 5.53%,
9-9-1997................................... 2,296,878
------------
TOTAL SHORT-TERM INVESTMENTS................. 5,090,819
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$54,550,808) (b)........................... $93,153,538
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At August 31, 1997, the cost of securities for federal income tax purposes
was $54,550,808, and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation........................... $39,227,884
Unrealized depreciation........................... (625,154)
---------------------------------------------------------------
Net unrealized appreciation....................... $38,602,730
---------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Security is fully or partially on loan at August 31, 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 7.46% of net assets as of August 31, 1997.
25
<PAGE>
FORTIS STOCK FUNDS
GROWTH FUND, INC.
Schedule of Investments
August 31, 1997
COMMON STOCKS-90.61%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
---------- ------------- -------------
<C> <S> <C> <C>
APPAREL-1.27%
258,000 Tommy Hilfiger Corp. (a)..................... $ 9,273,765 $ 11,255,250
------------- -------------
BANKS-2.02%
338,111 Banc One Corp................................ 8,397,580 18,131,202
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-3.01%
329,800 BioChem Pharma, Inc. (a)..................... 7,316,542 8,554,187
265,000 Biogen, Inc. (a)............................. 7,083,083 10,434,375
8,448 Genzyme Corp Tissue Corp. (a)................ 103,267 90,816
281,600 Genzyme Corp. (a)............................ 8,467,352 7,920,000
------------- -------------
22,970,244 26,999,378
------------- -------------
BUSINESS SERVICES AND SUPPLIES-3.62%
402,800 AccuStaff, Inc. (a).......................... 10,277,196 10,699,375
215,000 Danka Business Systems plc ADR............... 9,155,328 10,051,250
285,460 First Data Corp.............................. 5,788,380 11,721,701
------------- -------------
25,220,904 32,472,326
------------- -------------
COMPUTER-COMMUNICATIONS EQUIPMENT-5.36%
230,200 3Com Corp. (a)............................... 1,275,207 11,495,612
218,760 Ascend Communications, Inc. (a).............. 12,073,337 9,283,627
362,100 Cisco Systems, Inc. (a)...................... 642,162 27,293,287
------------- -------------
13,990,706 48,072,526
------------- -------------
COMPUTER-SOFTWARE-13.23%
508,400 BMC Software, Inc. (a)....................... 5,492,697 31,838,550
200,400 Microsoft Corp. (a).......................... 4,401,912 26,490,375
766,275 Oracle Corp. (a)............................. 2,058,625 29,214,234
413,000 Parametric Technology Corp. (a).............. 5,983,603 19,178,688
359,435 Sterling Commerce, Inc. (a).................. 8,943,707 11,883,804
------------- -------------
26,880,544 118,605,651
------------- -------------
ELECTRONIC COMPONENTS-2.68%
574,200 Solectron Corp. (a).......................... 7,702,224 24,044,625
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.95%
189,800 Intel Corp................................... 2,490,817 17,485,325
------------- -------------
FINANCE SERVICES-10.13%
75,000 American Express Co.......................... 4,327,567 5,831,250
262,200 Capital One Financial Corp................... 7,902,045 10,094,700
370,000 Fannie Mae................................... 13,903,689 16,280,000
357,000 Franklin Resources, Inc...................... 3,567,571 27,622,875
416,000 Green Tree Financial Corp.................... 13,789,194 18,278,000
331,500 MBNA Corp.................................... 8,309,637 12,742,031
------------- -------------
51,799,703 90,848,856
------------- -------------
HEALTH CARE SERVICES-7.79%
228,000 HBO & Co..................................... 6,217,977 16,330,500
254,700 Healthsouth Corp. (a)........................ 6,753,716 6,351,581
534,000 Medpartners, Inc. (a)........................ 13,923,756 11,414,250
298,000 Oxford Health Plans, Inc. (a)................ 6,578,590 21,791,250
205,100 PhyCor, Inc. (a)............................. 6,369,298 6,037,631
162,500 United Healthcare Corp....................... 5,954,993 7,901,563
------------- -------------
45,798,330 69,826,775
------------- -------------
HOTEL AND GAMING-1.39%
166,000 HFS, Inc. (a)................................ 9,796,395 9,244,125
82,500 Promus Hotel Corp. (a)....................... 1,449,428 3,202,031
------------- -------------
11,245,823 12,446,156
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ------------- -------------
<C> <S> <C> <C>
MACHINERY-OIL AND WELL-6.03%
198,100 Cooper Cameron Corp. (a)..................... $ 7,951,439 $ 12,851,738
130,000 Dresser Industries, Inc...................... 4,571,736 5,427,500
397,000 Input/Output, Inc. (a)....................... 8,968,629 8,337,000
451,700 Petroleum Geo-Services ADR (a)............... 11,492,122 27,412,544
------------- -------------
32,983,926 54,028,782
------------- -------------
MEDICAL SUPPLIES-0.93%
223,000 Steris Corp. (a)............................. 7,598,388 8,362,500
------------- -------------
MEDICAL TECHNOLOGY-2.56%
60,000 Boston Scientific Corp. (a).................. 4,376,021 4,230,000
207,500 Medtronic, Inc. (and rights)................. 12,460,860 18,752,813
------------- -------------
16,836,881 22,982,813
------------- -------------
OIL AND GAS FIELD SERVICES-2.00%
160,000 Schlumberger Ltd............................. 7,819,893 12,190,000
78,300 Smith International, Inc. (a)................ 2,985,057 5,696,325
------------- -------------
10,804,950 17,886,325
------------- -------------
OIL-OFFSHORE DRILLING-5.70%
8,000 Diamond Offshore Drilling, Inc............... 353,588 437,000
210,700 ENSCO International, Inc..................... 11,621,810 13,379,450
554,600 Falcon Drilling Co. (a)...................... 9,853,733 17,469,900
364,000 Noble Drilling Corp. (a)..................... 7,262,818 10,351,250
99,700 Transocean Offshore, Inc..................... 6,227,789 9,477,731
------------- -------------
35,319,738 51,115,331
------------- -------------
POLLUTION CONTROL-0.49%
121,000 U.S. Filter Corp. (a)........................ 4,389,199 4,356,000
------------- -------------
RECREATION EQUIPMENT-0.49%
130,000 Callaway Golf Co............................. 4,649,784 4,379,375
------------- -------------
RESTAURANTS AND FRANCHISING-1.33%
290,300 Starbucks Corp. (a).......................... 4,913,519 11,902,300
------------- -------------
RETAIL-DEPARTMENT STORES-2.03%
264,600 Kohl's Corp. (a)............................. 4,252,122 18,240,863
------------- -------------
RETAIL-SPECIALTY-5.85%
365,675 CUC International, Inc. (a).................. 4,319,837 8,593,363
204,000 Dollar Tree Stores, Inc. (a)................. 6,596,000 7,930,500
313,072 Home Depot, Inc.............................. 1,650,758 14,773,085
292,175 Office Depot, Inc. (a)....................... 3,360,111 5,386,977
646,375 Staples, Inc. (a)............................ 8,170,751 15,189,813
30,900 West Marine, Inc. (a)........................ 982,729 587,100
------------- -------------
25,080,186 52,460,838
------------- -------------
TELECOMMUNICATION EQUIPMENT-6.30%
420,200 ADC Telecommunications, Inc. (a)............. 6,831,763 15,599,925
299,250 Andrew Corp. (with rights) (a)............... 6,423,092 7,443,844
12,000 Qualcomm, Inc. (a)........................... 525,000 555,000
551,000 Tellabs, Inc. (a)............................ 3,219,364 32,887,813
------------- -------------
16,999,219 56,486,582
------------- -------------
TELEPHONE SERVICES-4.18%
1,250,700 WorldCom, Inc. (a)........................... 15,029,987 37,442,831
------------- -------------
TRANSPORTATION-0.27%
78,500 Wisconsin Central Transportation Corp. (a)... 2,850,219 2,433,500
------------- -------------
TOTAL COMMON STOCKS.......................... $ 407,478,758 $ 812,266,110
------------- -------------
------------- -------------
</TABLE>
26
<PAGE>
SHORT-TERM INVESTMENTS-9.40%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
------------ -------------
<C> <S> <C>
BANKS-3.75%
$33,659,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.46%............. $ 33,659,000
-------------
DIVERSIFIED FINANCE-0.34%
3,032,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.56%...................... 3,032,000
-------------
U.S. GOVERNMENT AGENCY-5.31%
26,300,000 Federal Home Loan Mortgage Corp., 5.56%,
9-26-1997.................................. 26,204,794
11,000,000 Federal Home Loan Mortgage Corp., 5.52%,
9-2-1997................................... 10,996,688
10,400,000 Federal National Mortgage Assoc., 5.53%,
9-9-1997................................... 10,385,882
-------------
47,587,364
-------------
TOTAL SHORT-TERM INVESTMENTS................. 84,278,364
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$491,757,122) (b).......................... $ 896,544,474
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At August 31, 1997, the cost of securities for federal income tax purposes
was $491,757,122 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation........................... $415,567,675
Unrealized depreciation........................... (10,780,323)
----------------------------------------------------------------
Net unrealized appreciation....................... $404,787,352
----------------------------------------------------------------
</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 5.54% of net assets as of August 31, 1997.
27
<PAGE>
FORTIS STOCK FUNDS
CAPITAL APPRECIATION PORTFOLIO
Schedule of Investments
August 31, 1997
COMMON STOCKS-90.28%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------ -------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-0.13%
5,000 CKS Group, Inc. (a) (e)...................... $ 85,000 $ 166,875
------------ -------------
APPAREL-0.70%
40,000 North Face, Inc. (a) (e)..................... 925,589 887,500
------------ -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-1.43%
70,000 BioChem Pharma, Inc. (a) (e)................. 1,500,025 1,815,625
------------ -------------
BROADCASTING-0.52%
20,000 HSN, Inc. (a)................................ 697,250 660,000
------------ -------------
BUSINESS SERVICES AND SUPPLIES-14.19%
33,080 AccuStaff, Inc. (a) (e)...................... 801,466 878,687
230,000 Acxiom Corp. (a) (e)......................... 715,312 4,082,500
76,000 APAC TeleServices, Inc. (a) (e).............. 698,337 1,254,000
31,000 COREstaff, Inc. (a) (e)...................... 826,888 922,250
20,000 Corrections Corp. of America (a)............. 598,721 740,000
48,000 Covance, Inc. (a)............................ 922,349 876,000
25,600 Envoy Corp. (a) (e).......................... 878,080 691,200
60,000 Fastenal Co. (e)............................. 356,875 3,457,500
15,000 Fiserv, Inc. (a)............................. 560,579 675,000
1,000 Hall, Kinion & Associates, Inc. (a).......... 15,000 21,375
10,350 Paychex, Inc................................. 296,427 354,487
35,000 Precision Response Corp. (a) (e)............. 986,875 411,250
38,500 Romac International, Inc. (a)................ 993,050 1,463,000
29,400 Snyder Communications, Inc. (a) (e).......... 591,307 841,575
22,500 Sykes Enterprises, Inc. (a) (e).............. 681,137 601,875
47,500 TeleTech Holdings, Inc. (a) (e).............. 707,500 777,812
------------ -------------
10,629,903 18,048,511
------------ -------------
COMPUTER-COMMUNICATIONS EQUIPMENT-3.90%
57,400 Ascend Communications, Inc. (a).............. 3,422,767 2,435,912
33,600 Cisco Systems, Inc. (a)...................... 252,552 2,532,600
------------ -------------
3,675,319 4,968,512
------------ -------------
COMPUTER-SOFTWARE-15.23%
30,000 Aspen Technology, Inc. (a) (e)............... 766,517 1,023,750
34,000 HNC Software, Inc. (a) (e)................... 1,125,440 1,236,750
39,800 Indus International, Inc. (a)................ 786,523 636,800
50,800 Legato Systems, Inc. (a)..................... 642,650 1,447,800
9,000 McAfee Associates, Inc. (a) (e).............. 568,407 509,625
18,000 Netscape Communications Corp. (a) (e) 906,364 716,625
62,000 Parametric Technology Corp. (a).............. 304,238 2,879,125
1,300 Pegasus Systems, Inc. (a).................... 16,900 23,237
42,000 Platinum Technology, Inc. (a) (e)............ 588,736 997,500
42,200 Rational Software Corp. (a).................. 1,656,814 696,300
39,000 Scopus Technology, Inc. (a) (e).............. 515,091 965,250
33,800 Siebel Systems, Inc. (a) (e)................. 817,869 1,221,025
66,281 Sterling Commerce, Inc. (a).................. 741,640 2,191,416
32,200 Sterling Software, Inc. (a).................. 223,341 1,104,862
49,800 Synopsys, Inc. (a) (e)....................... 857,600 1,724,325
28,000 Vantive Corp. (a) (e)........................ 850,041 854,000
18,150 Veritas Software Corp. (a) (e)............... 830,601 1,145,719
------------ -------------
12,198,772 19,374,109
------------ -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ -------------
<C> <S> <C> <C>
CONSUMER GOODS-1.83%
40,500 Blyth Industries, Inc. (a) (e)............... $ 979,390 $ 1,495,969
69,000 Seattle Film Works, Inc. (a)................. 736,000 832,312
------------ -------------
1,715,390 2,328,281
------------ -------------
EDUCATIONAL SERVICES-1.68%
60,000 Apollo Group, Inc., Class A (a).............. 1,163,187 2,141,250
------------ -------------
ELECTRONIC COMPONENTS-0.07%
2,200 DSP Communications, Inc. (a)................. 31,625 42,350
1,200 Sawtek, Inc. (a)............................. 40,200 47,250
------------ -------------
71,825 89,600
------------ -------------
ELECTRICAL EQUIPMENT-1.19%
46,500 Chicago Miniature Lamp, Inc. (a) (e)......... 1,317,750 1,519,969
------------ -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-0.54%
30,000 International Rectifier Corp. (a)............ 640,571 684,375
------------ -------------
HEALTH CARE SERVICES-7.37%
61,800 ABR Information Services, Inc. (a) (e)....... 1,397,059 1,660,875
106,000 American Oncology Resources, Inc. (a) 1,380,191 1,450,875
47,000 Medic Computer Systems, Inc. (a)............. 959,680 1,468,750
53,000 Medpartners, Inc. (a) (e).................... 1,109,284 1,132,875
60,000 Omnicare, Inc................................ 592,500 1,736,250
30,000 Parexel International Corp. (a).............. 506,250 1,061,250
40,000 Pharmaceutical Products Development, Inc.
(a)........................................ 993,206 870,000
------------ -------------
6,938,170 9,380,875
------------ -------------
MACHINERY-OIL AND WELL-5.78%
165,000 Input/Output, Inc. (a) (e)................... 486,250 3,465,000
64,000 Petroleum Geo-Services ADR (a) (e)........... 1,127,444 3,884,000
------------ -------------
1,613,694 7,349,000
------------ -------------
MEDICAL SUPPLIES-2.41%
22,000 Arterial Vascular Engineering, Inc. (a)...... 593,589 814,000
60,000 Steris Corp. (a) (e)......................... 1,067,130 2,250,000
------------ -------------
1,660,719 3,064,000
------------ -------------
MEDICAL TECHNOLOGY-0.25%
8,000 Stryker Corp. (e)............................ 243,000 319,500
------------ -------------
MISCELLANEOUS-1.05%
43,000 BMC Industries, Inc. (e)..................... 1,334,057 1,338,375
------------ -------------
OIL AND GAS FIELD SERVICES-0.73%
13,500 Camco International, Inc..................... 580,962 929,813
------------ -------------
OIL-OFFSHORE DRILLING-2.85%
42,000 Falcon Drilling Co. (a) (e).................. 731,844 1,323,000
38,000 Marine Drilling Companies, Inc. (a).......... 612,750 912,000
26,000 Stolt Comex Seaway, S.A. (a) (e)............. 457,200 1,387,751
------------ -------------
1,801,794 3,622,751
------------ -------------
RESTAURANTS AND FRANCHISING-3.09%
67,300 Applebees International, Inc. (e)............ 1,201,960 1,716,150
9,500 Cracker Barrel Old Country Store, Inc........ 246,011 292,125
56,250 Papa John's International, Inc. (a) (e)...... 720,625 1,919,531
------------ -------------
2,168,596 3,927,806
------------ -------------
</TABLE>
28
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ -------------
<C> <S> <C> <C>
RETAIL-MISCELLANEOUS-1.10%
82,050 Corporate Express, Inc. (a).................. $ 583,467 $ 1,399,978
------------ -------------
RETAIL-SPECIALTY-8.57%
80,000 Bed, Bath & Beyond, Inc. (a)................. 455,000 2,480,000
47,175 CUC International, Inc. (a) (e).............. 1,100,750 1,108,613
39,000 Dollar Tree Stores, Inc. (a)................. 1,261,000 1,516,125
83,400 Gadzooks, Inc. (a) (e)....................... 1,117,030 1,584,600
24,000 General Nutrition Companies, Inc. (a)........ 535,993 666,000
39,000 Just for Feet, Inc. (a)...................... 1,356,875 511,875
26,000 The Wet Seal, Inc. (a)....................... 542,750 565,500
34,000 Viking Office Products, Inc. (a) (e)......... 534,352 718,250
92,000 West Marine, Inc. (a) (e).................... 1,030,589 1,748,000
------------ -------------
7,934,339 10,898,963
------------ -------------
TELECOMMUNICATION EQUIPMENT-3.90%
61,000 ADC Telecommunications, Inc. (a)............. 980,237 2,264,625
15,700 Andrew Corp. (with rights) (a)............... 367,677 390,538
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ -------------
<C> <S> <C> <C>
48,000 Pairgain Technologies, Inc. (a).............. $ 1,247,726 $ 1,236,000
18,000 Tellabs, Inc. (a)............................ 805,500 1,074,375
------------ -------------
3,401,140 4,965,538
------------ -------------
TELEPHONE SERVICES-8.11%
37,750 Brooks Fiber Properties, Inc. (a)............ 1,096,750 1,269,344
52,300 ICG Communications, Inc. (a)................. 759,413 954,475
65,000 Intermedia Communications, Inc. (a) (e) 1,096,875 2,323,750
74,000 LCI International, Inc. (a) (e).............. 601,620 1,776,000
53,000 McLeod, Inc. Class A (a)..................... 1,262,301 1,795,375
18,000 Star Telecommunications, Inc. (a)............ 331,000 308,250
63,000 WorldCom, Inc. (a) (e)....................... 521,933 1,886,063
------------ -------------
5,669,892 10,313,257
------------ -------------
WASTE DISPOSAL-3.66%
111,155 U.S.A. Waste Services, Inc. (a).............. 1,158,950 4,668,510
------------ -------------
TOTAL COMMON STOCKS.......................... $ 69,709,361 $ 114,862,973
------------ -------------
------------ -------------
</TABLE>
SHORT-TERM INVESTMENTS-9.79%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-2.15%
$2,733,064 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.46%............. $ 2,733,064
-------------
DIVERSIFIED FINANCE-4.58%
5,827,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.56%...................... 5,827,000
-------------
U.S. GOVERNMENT AGENCY-3.06%
3,900,000 Federal Home Loan Mortgage Corp., 5.50%,
9-8-1997................................... 3,895,320
-------------
TOTAL SHORT-TERM INVESTMENTS................. 12,455,384
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$82,164,745) (b)........................... $ 127,318,357
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At August 31, 1997, the cost of securities for federal income tax purposes
was $82,164,745 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation........................... $49,954,453
Unrealized depreciation........................... (4,800,841)
---------------------------------------------------------------
Net unrealized appreciation....................... $45,153,612
---------------------------------------------------------------
</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 4.14% of net assets as of August 31, 1997.
(e) Security is fully or partially on loan at August 31, 1997. See Note 1 of
accompanying Notes to Financial Statements.
29
<PAGE>
FORTIS STOCK FUNDS
Statements of Assets and Liabilities
August 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET
ALLOCATION VALUE
PORTFOLIO FUND
------------- ------------
<S> <C> <C>
ASSETS:
Investments in securities, as detailed in the accompanying schedules, at
market (cost $148,280,221; $26,702,907; $20,089,802; $217,706,730;
$54,550,808; $491,757,122; and $82,164,745; respectively) (Note 1).......... $185,805,276 $30,104,551
Cash on deposit with custodian................................................ 910 76,232
Collateral for securities lending transactions (Note 1)....................... 36,726,424 4,460,006
Receivables:
Investment securities sold.................................................. -- --
Interest and dividends...................................................... 1,302,322 66,585
Subscriptions of capital stock.............................................. 22,415 5,910
Deferred registration costs (Note 1).......................................... 23,156 19,466
------------- ------------
TOTAL ASSETS.................................................................... 223,880,503 34,732,750
------------- ------------
LIABILITIES:
Payable upon return of securities loaned (Note 1)............................. 36,726,424 4,460,006
Payable for investment securities purchased................................... 691,615 --
Redemptions of capital stock.................................................. 142,706 --
Payable for investment advisory and management fees........................... 144,757 25,808
Payable for distribution fees................................................. 10,962 1,520
Accounts payable and accrued expenses......................................... 36,766 11,954
------------- ------------
TOTAL LIABILITIES............................................................... 37,753,230 4,499,288
------------- ------------
NET ASSETS:
Net proceeds of capital stock, par value $.01 per share-authorized
10,000,000,000; 10,000,000,000; 10,000,000,000; 10,000,000,000;
100,000,000,000; 100,000,000,000; 10,000,000,000 shares respectively........ 128,414,234 25,232,146
Unrealized appreciation of investments........................................ 37,525,055 3,401,644
Undistributed net investment income........................................... 720,599 76,496
Accumulated net realized gain (loss) from the sale of investments............. 19,467,385 1,523,176
------------- ------------
TOTAL NET ASSETS................................................................ $186,127,273 $30,233,462
------------- ------------
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE:
Class A shares (based on net assets of $156,734,333; $21,855,384; $13,907,096;
$340,949,145; $83,847,376; $734,654,387; and $105,421,967; respectively and
8,256,735; 1,617,645; 1,064,915; 13,047,974; 1,816,855; 19,687,321; and
3,444,948 shares outstanding; respectively)................................... $18.98 $13.51
------------- ------------
Class B shares (based on net assets of $7,462,289; $2,479,971; $2,306,360;
$7,283,691; $2,663,422; $12,148,679; and $6,560,806; respectively and 395,411;
185,261; 177,069; 283,746; 58,988; 332,607; and 217,519 shares outstanding;
respectively)................................................................. $18.87 $13.39
------------- ------------
Class C shares (based on net assets of $4,788,716; $1,002,402; $1,289,697;
$1,432,148; $827,541; $2,366,917; and $1,874,684; respectively and 254,567;
74,879; 98,998; 55,777; 18,321; 64,816; and 62,116 shares outstanding;
respectively)................................................................. $18.81 $13.39
------------- ------------
Class H shares (based on net assets of $17,141,935; $4,895,705; $5,085,448;
$14,468,046; $6,508,206; $34,941,204 and $13,379,082; respectively and
908,812; 365,626; 390,337; 563,335; 144,129; 956,183; and 443,288 shares
outstanding; respectively).................................................... $18.86 $13.39
------------- ------------
Class Z shares (based on net assets of $0; $0; $0; $0; $0; $112,355,929; and $0;
respectively and 0; 0; 0; 0; 0; 2,998,889; and 0 shares outstanding;
respectively)................................................................. -- --
------------- ------------
</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>
ASSETS:
Investments in securities, as detailed in the
accompanying schedules, at market (cost
$148,280,221; $26,702,907; $20,089,802;
$217,706,730; $54,550,808; $491,757,122; and
$82,164,745; respectively) (Note 1)............. $22,558,984 $360,430,864 $ 93,153,538 $896,544,474 $127,318,357
Cash on deposit with custodian.................... 47,222 64 863 901 463
Collateral for securities lending transactions
(Note 1)........................................ 2,063,051 97,134,145 26,992,178 -- 40,589,304
Receivables:
Investment securities sold...................... -- 4,495,283 1,006,940 3,636,629 --
Interest and dividends.......................... 49,715 202,761 46,817 224,036 47,575
Subscriptions of capital stock.................. 9,562 11,101 41 977 26,490
Deferred registration costs (Note 1).............. 19,499 19,978 23,595 39,579 22,335
------------ ------------- ------------- ------------- -------------
TOTAL ASSETS...................................... 24,748,033 462,294,196 121,223,972 900,446,596 168,004,524
------------ ------------- ------------- ------------- -------------
LIABILITIES:
Payable upon return of securities loaned (Note
1)............................................ 2,063,051 97,134,145 26,992,178 -- 40,589,304
Payable for investment securities purchased..... 65,862 568,673 147,219 3,075,130 --
Redemptions of capital stock.................... -- 138,549 128,834 173,643 37,810
Payable for investment advisory and management
fees.......................................... 18,947 257,687 80,701 580,147 103,933
Payable for distribution fees................... 1,331 11,911 3,401 25,618 7,583
Accounts payable and accrued expenses........... 10,241 50,201 25,094 124,942 29,355
------------ ------------- ------------- ------------- -------------
TOTAL LIABILITIES................................. 2,159,432 98,161,166 27,377,427 3,979,480 40,767,985
------------ ------------- ------------- ------------- -------------
NET ASSETS:
Net proceeds of capital stock, par value $.01
per share-authorized 10,000,000,000;
10,000,000,000; 10,000,000,000;
10,000,000,000; 100,000,000,000;
100,000,000,000; 10,000,000,000 shares
respectively.................................. 20,059,530 169,290,148 44,289,585 406,855,022 84,596,781
Unrealized appreciation of investments.......... 2,469,182 142,724,134 38,602,730 404,787,352 45,153,612
Undistributed net investment income............. 52,649 -- -- -- --
Accumulated net realized gain (loss) from the
sale of investments........................... 7,240 52,118,748 10,954,230 84,824,742 (2,513,854)
------------ ------------- ------------- ------------- -------------
TOTAL NET ASSETS.................................. $22,588,601 $364,133,030 $ 93,846,545 $896,467,116 $127,236,539
------------ ------------- ------------- ------------- -------------
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE:
Class A shares (based on net assets of
$156,734,333; $21,855,384; $13,907,096;
$340,949,145; $83,847,376; $734,654,387; and
$105,421,967; respectively and 8,256,735;
1,617,645; 1,064,915; 13,047,974; 1,816,855;.
19,687,321; and 3,444,948 shares outstanding;
respectively) $13.06 $26.13 $46.15 $37.32 $30.60
------------ ------------- ------------- ------------- -------------
Class B shares (based on net assets of $7,462,289;
$2,479,971; $2,306,360; $7,283,691; $2,663,422;
$12,148,679; and $6,560,806; respectively and
395,411; 185,261; 177,069; 283,746; 58,988;
332,607; and 217,519 shares. outstanding;
respectively) $13.03 $25.67 $45.15 $36.53 $30.16
------------ ------------- ------------- ------------- -------------
Class C shares (based on net assets of $4,788,716;
$1,002,402; $1,289,697; $1,432,148; $827,541;
$2,366,917; and $1,874,684; respectively and
254,567; 74,879; 98,998; 55,777; 18,321; 64,816;
and 62,116 shares. outstanding; respectively) $13.03 $25.68 $45.17 $36.52 $30.18
------------ ------------- ------------- ------------- -------------
Class H shares (based on net assets of
$17,141,935; $4,895,705; $5,085,448;
$14,468,046; $6,508,206; $34,941,204 and
$13,379,082; respectively and 908,812; 365,626;
390,337; 563,335; 144,129; 956,183; and 443,288
shares. outstanding; respectively) $13.03 $25.68 $45.16 $36.54 $30.18
------------ ------------- ------------- ------------- -------------
Class Z shares (based on net assets of $0; $0; $0;
$0; $0; $112,355,929; and $0; respectively and
0; 0; 0; 0; 0; 2,998,889; and 0 shares
outstanding;. respectively) -- -- -- $37.47 --
------------ ------------- ------------- ------------- -------------
</TABLE>
31
<PAGE>
FORTIS STOCK FUNDS
Statements of Operations
For the Year Ended August 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET
ALLOCATION VALUE
PORTFOLIO FUND
------------ -----------
<S> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income............................................................. $ 5,624,497 $ 109,564
Dividend income............................................................. 679,996 369,144
Fee income (Note 1)......................................................... 75,353 875
------------ -----------
Total income.................................................................. 6,379,846 479,583
------------ -----------
Expenses:
Investment advisory and management fees (Note 2)............................ 1,577,254 207,623
Distribution fees (Class A) (Note 2)........................................ 669,139 38,914
Distribution fees (Class B) (Note 2)........................................ 59,645 15,015
Distribution fees (Class C) (Note 2)........................................ 36,232 5,508
Distribution fees (Class H) (Note 2)........................................ 138,947 31,443
Registration fees........................................................... 54,997 30,631
Shareholders' notices and reports........................................... 42,620 3,800
Legal and auditing fees (Note 2)............................................ 35,243 14,887
Custodian fees.............................................................. 35,515 18,805
Directors' fees and expenses................................................ 11,831 1,563
Other....................................................................... 15,654 1,850
------------ -----------
Total expenses................................................................ 2,677,077 370,039
------------ -----------
NET INVESTMENT INCOME (LOSS).................................................... 3,702,769 109,544
------------ -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1):
Net realized gain from security transactions.................................. 21,517,162 1,524,189
Net change in unrealized appreciation (depreciation) of investments........... 12,305,587 3,192,347
------------ -----------
NET GAIN (LOSS) ON INVESTMENTS.................................................. 33,822,749 4,716,536
------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................. $37,525,518 $4,826,080
------------ -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32
<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................................. $ 130,279 $ 1,226,409 $ 199,702 $ 3,884,282 $ 674,617
Dividend income................................. 298,248 1,324,032 312,082 1,331,162 13,275
Fee income (Note 1)............................. 1,094 231,943 73,623 -- 179,119
----------- ------------ ------------ ------------- ------------
Total income...................................... 429,621 2,782,384 585,407 5,215,444 867,011
----------- ------------ ------------ ------------- ------------
Expenses:
Investment advisory and management fees (Note
2)............................................ 125,226 2,735,421 818,135 6,323,998 1,190,025
Distribution fees (Class A) (Note 2)............ 18,936 771,885 186,349 1,740,336 476,537
Distribution fees (Class B) (Note 2)............ 12,913 56,490 19,976 96,102 54,238
Distribution fees (Class C) (Note 2)............ 7,347 11,607 6,193 17,707 13,798
Distribution fees (Class H) (Note 2)............ 29,202 109,831 46,569 279,954 110,874
Registration fees............................... 28,700 95,973 38,927 115,600 61,097
Shareholders' notices and reports............... 1,994 75,373 19,688 206,321 33,726
Legal and auditing fees (Note 2)................ 15,823 41,401 28,713 60,654 32,800
Custodian fees.................................. 14,522 46,010 22,567 95,859 24,608
Directors' fees and expenses.................... 955 17,807 17,217 51,742 6,913
Other........................................... 965 29,848 7,828 76,414 12,662
----------- ------------ ------------ ------------- ------------
Total expenses.................................... 256,583 3,991,646 1,212,162 9,064,687 2,017,278
----------- ------------ ------------ ------------- ------------
NET INVESTMENT INCOME (LOSS)...................... 173,038 (1,209,262) (626,755) (3,849,243) (1,150,267)
----------- ------------ ------------ ------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTE 1):
Net realized gain from security transactions.... 79,211 63,878,182 14,259,204 101,212,746 470,737
Net change in unrealized appreciation
(depreciation) of investments................. 2,394,136 33,552,766 10,814,437 102,027,949 (9,268,528)
----------- ------------ ------------ ------------- ------------
NET GAIN (LOSS) ON INVESTMENTS.................... 2,473,347 97,430,948 25,073,641 203,240,695 (8,797,791)
----------- ------------ ------------ ------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................. $2,646,385 $96,221,686 $24,446,886 $199,391,452 $(9,948,058)
----------- ------------ ------------ ------------- ------------
</TABLE>
33
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
ASSET ALLOCATION PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31,
1997 1996
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income......................................................... $ 3,702,769 $ 4,138,153
Net realized gain from security transactions.................................. 21,517,162 6,979,691
Net change in unrealized appreciation (depreciation) of investments in
securities.................................................................. 12,305,587 (4,345,482)
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ 37,525,518 6,772,362
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A..................................................................... (3,394,288) (3,826,272)
Class B..................................................................... (102,347) (49,452)
Class C..................................................................... (62,513) (39,801)
Class H..................................................................... (240,105) (178,132)
From net realized gains on investments
Class A..................................................................... (7,790,082) (2,624,363)
Class B..................................................................... (290,516) (29,773)
Class C..................................................................... (175,535) (27,550)
Class H..................................................................... (668,944) (136,849)
Excess distributions of net realized gains
Class A..................................................................... (26,271) (62,850)
Class B..................................................................... (792) (713)
Class C..................................................................... (484) (660)
Class H..................................................................... (1,858) (3,277)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............................................. (12,753,735) (6,979,692)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (1,049,780 and 1,434,734 shares).................................... 18,325,244 23,714,022
Class B (172,571 and 271,822 shares)........................................ 2,998,989 4,477,846
Class C (123,842 and 135,425 shares)........................................ 2,158,427 2,240,957
Class H (356,375 and 455,625 shares)........................................ 6,214,436 7,521,002
Proceeds from shares issued as a result of reinvested dividends
Class A (623,301 and 371,458 shares)........................................ 10,494,510 6,040,653
Class B (23,140 and 4,825 shares)........................................... 387,752 78,602
Class C (13,876 and 4,013 shares)........................................... 231,768 64,896
Class H (51,275 and 18,172 shares).......................................... 858,303 294,034
Less cost of repurchase of shares
Class A (1,706,945 and 1,564,760 shares).................................... (30,091,087) (25,920,903)
Class B (69,197 and 49,827 shares).......................................... (1,205,507) (827,910)
Class C (44,638 and 25,306 shares).......................................... (768,795) (415,028)
Class H (164,068 and 92,983 shares)......................................... (2,860,606) (1,532,704)
-------------- --------------
NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS.............................. 6,743,434 15,735,467
-------------- --------------
TOTAL INCREASE IN NET ASSETS.................................................... 31,515,217 15,528,137
NET ASSETS:
Beginning of year............................................................. 154,612,056 139,083,919
-------------- --------------
End of year (includes undistributed net investment income of $720,599 and
$817,083, respectively)..................................................... $ 186,127,273 $ 154,612,056
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
VALUE FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
FOR THE EIGHT MONTH
YEAR ENDED PERIOD ENDED
AUGUST 31, AUGUST 31,
1997 1996
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income......................................................... $ 109,544 $ 37,806
Net realized gain from security transactions.................................. 1,524,189 295,009
Net change in unrealized appreciation of investments in securities............ 3,192,347 209,297
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ 4,826,080 542,112
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A..................................................................... (62,943) --
Class B..................................................................... (2,233) --
Class C..................................................................... (680) --
Class H..................................................................... (4,998) --
From net realized gains on investments
Class A..................................................................... (228,302) --
Class B..................................................................... (19,112) --
Class C..................................................................... (5,825) --
Class H..................................................................... (42,783) --
------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............................................. (366,876) --
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (816,622 and 942,985 shares)........................................ 10,071,023 9,635,095
Class B (134,156 and 62,863 shares)......................................... 1,639,623 663,710
Class C (59,914 and 21,113 shares).......................................... 740,650 216,052
Class H (285,757 and 156,479 shares)........................................ 3,504,117 1,645,537
Proceeds from shares issued as a result of reinvested dividends
Class A (25,047 shares and 0 shares)........................................ 287,791 --
Class B (1,855 shares and 0 shares)......................................... 21,220 --
Class C (562 shares and 0 shares)........................................... 6,429 --
Class H (4,125 shares and 0 shares)......................................... 47,188 --
Less cost of repurchase of shares
Class A (140,400 and 26,608 shares)......................................... (1,735,918) (282,982)
Class B (10,742 and 2,871 shares)........................................... (133,427) (31,367)
Class C (6,447 and 262 shares).............................................. (79,920) (2,836)
Class H (74,308 and 6,427 shares)........................................... (911,833) (68,006)
------------- -------------
NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS.............................. 13,456,943 11,775,203
------------- -------------
TOTAL INCREASE IN NET ASSETS.................................................... 17,916,147 12,317,315
NET ASSETS:
Beginning of period........................................................... 12,317,315 --
------------- -------------
End of period (includes undistributed net investment income of $76,496 and
$37,806, respectively)...................................................... $ 30,233,462 $ 12,317,315
------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
GROWTH & INCOME FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
FOR THE EIGHT MONTH
YEAR ENDED PERIOD ENDED
AUGUST 31, AUGUST 31,
1997 1996
------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income......................................................... $ 173,038 $ 17,599
Net realized gain (loss) from security transactions........................... 79,211 (340)
Net change in unrealized appreciation of investments in securities............ 2,394,136 75,046
------------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ 2,646,385 92,305
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A..................................................................... (95,456) (11,470)
Class B..................................................................... (7,150) (731)
Class C..................................................................... (4,240) (571)
Class H..................................................................... (16,440) (1,955)
From net realized gains on investments
Class A..................................................................... (42,381) --
Class B..................................................................... (7,753) --
Class C..................................................................... (3,546) --
Class H..................................................................... (17,951) --
------------- ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............................................. (194,917) (14,727)
------------- ------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (913,354 and 333,815 shares)........................................ 11,139,324 3,399,044
Class B (134,438 and 49,494 shares)......................................... 1,627,226 507,825
Class C (75,761 and 31,937 shares).......................................... 917,962 323,749
Class H (311,309 and 131,281 shares)........................................ 3,801,926 1,342,093
Proceeds from shares issued as a result of reinvested dividends
Class A (10,741 and 1,046 shares)........................................... 127,797 10,774
Class B (1,263 and 69 shares)............................................... 14,789 714
Class C (625 and 55 shares)................................................. 7,348 561
Class H (2,865 and 189 shares).............................................. 33,503 1,945
Less cost of repurchase of shares
Class A (160,250 and 33,791 shares)......................................... (1,974,529) (348,113)
Class B (7,826 and 369 shares).............................................. (97,559) (3,813)
Class C (6,655 and 2,725 shares)............................................ (79,312) (28,214)
Class H (48,414 and 6,893 shares)........................................... (594,546) (70,939)
------------- ------------
NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS.............................. 14,923,929 5,135,626
------------- ------------
TOTAL INCREASE IN NET ASSETS.................................................... 17,375,397 5,213,204
NET ASSETS:
Beginning of period........................................................... 5,213,204 --
------------- ------------
End of period (includes undistributed net investment income of $52,624 and
$2,872, respectively)....................................................... $ 22,588,601 $ 5,213,204
------------- ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
CAPITAL FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31,
1997 1996
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss).................................................. $ (1,209,262) $ 430,785
Net realized gain from security transactions.................................. 63,878,182 24,390,863
Net change in unrealized appreciation (depreciation) of investments in
securities.................................................................. 33,552,766 (14,969,783)
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ 96,221,686 9,851,865
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A..................................................................... (141,299) (570,947)
From net realized gains on investments
Class A..................................................................... (33,970,839) --
Class B..................................................................... (572,462) --
Class C..................................................................... (126,988) --
Class H..................................................................... (1,124,462) --
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............................................. (35,936,050) (570,947)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (967,481 and 987,510 shares)........................................ 22,693,862 21,255,811
Class B (99,817 and 129,679 shares)......................................... 2,280,963 2,771,889
Class C (26,028 and 26,449 shares).......................................... 592,828 569,431
Class H (215,855 and 228,130 shares)........................................ 5,025,197 4,884,573
Proceeds from shares issued as a result of reinvested dividends
Class A (1,473,677 and 24,756 shares)....................................... 31,713,534 527,539
Class B (26,803 shares and 0 shares)........................................ 569,830 --
Class C (5,860 shares and 0 shares)......................................... 124,476 --
Class H (49,765 shares and 0 shares)........................................ 1,057,494 --
Less cost of repurchase of shares
Class A (2,075,394 and 2,058,920 shares).................................... (48,029,755) (44,492,325)
Class B (31,749 and 13,030 shares).......................................... (719,644) (276,422)
Class C (14,112 and 4,719 shares)........................................... (319,497) (101,450)
Class H (73,545 and 48,566 shares).......................................... (1,701,467) (1,046,356)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS................... 13,287,821 (15,907,310)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS......................................... 73,573,457 (6,626,392)
NET ASSETS:
Beginning of year............................................................. 290,559,573 297,185,965
-------------- --------------
End of year (includes undistributed net investment income of $0 and $141,299,
respectively)............................................................... $ 364,133,030 $ 290,559,573
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
FIDUCIARY FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31,
1997 1996
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment loss........................................................... $ (626,755) $ (76,203)
Net realized gain from security transactions.................................. 14,259,204 2,132,194
Net change in unrealized appreciation of investments in securities............ 10,814,437 638,704
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ 24,446,886 2,694,695
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From realized gains on investments
Class A..................................................................... (4,979,555) (488,777)
Class B..................................................................... (124,877) (4,787)
Class C..................................................................... (39,295) (2,895)
Class H..................................................................... (291,166) (14,400)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............................................. (5,434,893) (510,859)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (264,554 and 465,331 shares)........................................ 10,695,362 16,670,657
Class B (32,851 and 26,078 shares).......................................... 1,306,041 928,152
Class C (6,194 and 8,014 shares)............................................ 241,373 287,310
Class H (72,797 and 54,592 shares).......................................... 2,906,990 1,949,490
Proceeds from shares issued as a result of reinvested dividends
Class A (127,747 and 14,130 shares)......................................... 4,862,050 478,153
Class B (3,357 and 142 shares).............................................. 125,643 4,778
Class C (1,047 and 86 shares)............................................... 39,264 2,894
Class H (7,734 and 418 shares).............................................. 289,482 14,050
Less cost of repurchase of shares
Class A (361,725 and 471,108 shares)........................................ (14,656,981) (16,785,992)
Class B (14,724 and 2,097 shares)........................................... (592,169) (73,634)
Class C (2,440 and 2,264 shares)............................................ (95,382) (80,818)
Class H (23,662 and 9,636 shares)........................................... (943,779) (342,867)
-------------- --------------
NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS.............................. 4,177,894 3,052,173
-------------- --------------
TOTAL INCREASE IN NET ASSETS.................................................... 23,189,887 5,236,009
NET ASSETS:
Beginning of year............................................................. 70,656,658 65,420,649
-------------- --------------
End of year................................................................... $ 93,846,545 $ 70,656,658
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
GROWTH FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 1997 AUGUST 31, 1996
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment loss........................................................... $ (3,849,243) $ (2,359,335)
Net realized gain from security transactions.................................. 101,212,746 55,740,132
Net change in unrealized appreciation (depreciation) of investments in
securities.................................................................. 102,027,949 (25,027,460)
---------------- ----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ 199,391,452 28,353,337
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS:
From realized gains on investments
Class A..................................................................... (60,229,768) (34,148,693)
Class B..................................................................... (773,234) (157,748)
Class C..................................................................... (138,820) (26,843)
Class H..................................................................... (2,272,953) (562,160)
Class Z..................................................................... (8,698,046) --
---------------- ----------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............................................. (72,112,821) (34,895,444)
---------------- ----------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (5,049,377 and 2,983,653 shares).................................... 171,053,540 97,098,524
Class B (142,718 and 149,065 shares)........................................ 4,747,591 4,751,941
Class C (36,673 and 26,985 shares).......................................... 1,214,910 869,294
Class H (382,332 and 509,051 shares)........................................ 12,751,164 16,308,761
Class Z (421,091 and 141,406 shares)........................................ 14,099,862 4,652,413
Proceeds from shares issued as a result of reinvested dividends
Class A (1,768,394 and 1,117,514 shares).................................... 57,897,492 32,989,062
Class B (23,932 and 5,331 shares)........................................... 771,073 156,195
Class C (4,296 and 914 shares).............................................. 138,406 26,803
Class H (69,264 and 18,900 shares).......................................... 2,231,699 553,959
Class Z (260,207 shares and 0 shares)....................................... 8,537,395 --
Less cost of repurchase of shares
Class A (7,075,360 and 4,694,161 shares).................................... (240,578,784) (151,752,427)
Class B (45,388 and 10,130 shares).......................................... (1,512,337) (322,261)
Class C (10,067 and 2,105 shares)........................................... (336,196) (67,561)
Class H (162,457 and 72,266 shares)......................................... (5,434,477) (2,334,633)
Class Z (572,423 and 265,798 shares)........................................ (19,422,060) (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 IN NET ASSETS FROM SHARE TRANSACTIONS.............................. 6,159,278 89,509,310
---------------- ----------------
TOTAL INCREASE IN NET ASSETS.................................................... 133,437,909 82,967,203
NET ASSETS:
Beginning of year............................................................. 763,029,207 680,062,004
---------------- ----------------
End of year................................................................... $ 896,467,116 $ 763,029,207
---------------- ----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31,
1997 1996
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment loss........................................................... $ (1,150,267) $ (1,106,060)
Net realized gain from security transactions.................................. 470,737 2,740,699
Net change in unrealized appreciation (depreciation) of investments in
securities.................................................................. (9,268,528) 12,902,794
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................. (9,948,058) 14,537,433
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From realized gains on investments
Class A..................................................................... (3,954,147) (684,572)
Class B..................................................................... (189,757) (11,199)
Class C..................................................................... (47,703) (2,392)
Class H..................................................................... (381,589) (25,057)
Tax Return of Capital
Class A..................................................................... (905,283) --
Class B..................................................................... (43,444) --
Class C..................................................................... (10,921) --
Class H..................................................................... (87,363) --
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............................................. (5,620,207) (723,220)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (1,798,460 and 1,325,665 shares).................................... 54,031,052 42,940,126
Class B (118,162 and 110,699 shares)........................................ 3,552,423 3,619,138
Class C (43,602 and 24,894 shares).......................................... 1,297,540 830,232
Class H (236,178 and 222,036 shares)........................................ 7,111,058 7,344,125
Proceeds from shares issued as a result of reinvested dividends
Class A (151,618 and 22,686 shares)......................................... 4,748,671 667,142
Class B (7,441 and 375 shares).............................................. 230,517 10,963
Class C (1,874 and 80 shares)............................................... 58,089 2,392
Class H (15,016 and 852 shares)............................................. 465,003 24,947
Less cost of repurchase of shares
Class A (1,793,757 and 1,023,915 shares).................................... (54,047,060) (33,115,734)
Class B (39,286 and 7,394 shares)........................................... (1,159,231) (238,700)
Class C (12,477 and 3,288 shares)........................................... (353,713) (108,889)
Class H (85,586 and 14,364 shares).......................................... (2,540,636) (480,500)
-------------- --------------
NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS.............................. 13,393,713 21,495,242
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS......................................... (2,174,552) 35,309,455
NET ASSETS:
Beginning of year............................................................. 129,411,091 94,101,636
-------------- --------------
End of year................................................................... $ 127,236,539 $ 129,411,091
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements
- --------------------------------------------------------------------------------
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.
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. For
fixed income securities, 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.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS: Delivery and payment for
securities that have been purchased by the Asset Allocation Portfolio on a
forward commitment or when-issued basis can take place a month or more after
the transaction date. During this period, such securities are subject to
market fluctuations and the portfolio maintains, in a segregated account with
its custodian, assets with a market value equal to the amount of its purchase
commitments. At August 31, 1997, the Asset Allocation Portfolio had entered
into outstanding when-issued or forward commitments of $691,615.
Consistent with its ability to purchase securities on a when-issued basis,
the Asset Allocation Portfolio may enter into transactions to defer
settlement of its purchase commitments. As an inducement to defer settlement,
the portfolio repurchases a similar security for settlement at a later date
at a lower purchase price relative to the current market. This transaction is
referred to as a Dollar Roll.
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 Advantage Asset Allocation Portfolio amortizes original issue discount,
long term bond premium, and market discount.
For the year ended August 31, 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................... $ 180,555,701 $ 185,777,485
Value Fund................................... 29,138,597 17,438,436
Growth & Income Fund......................... 12,956,926 1,583,087
Capital Fund................................. 130,074,073 135,828,598
Fiduciary Fund............................... 36,811,923 36,061,982
Growth Fund.................................. 211,602,836 272,885,430
Capital Appreciation Portfolio............... 38,406,074 27,423,623
</TABLE>
LENDING OF PORTFOLIO SECURITIES: At August 31, 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
41
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
collateral received will be less than amounts required to be returned to the
borrowers. Value of securities on loan and fee income from securities lending
was as follows for the year ended August 31, 1997:
<TABLE>
<CAPTION>
Fee Income
For the Year
Ended
Securities August 31,
On Loan Collateral 1997
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Asset Allocation Portfolio................... $ 34,126,665 $ 36,726,424 $ 75,353
Value Fund................................... 4,286,972 4,460,006 875
Growth & Income Fund......................... 1,968,188 2,063,051 1,094
Capital Fund................................. 91,839,499 97,134,145 231,943
Fiduciary Fund............................... 24,884,260 26,992,178 73,623
Capital Appreciation Portfolio............... 38,846,369 40,589,304 179,119
</TABLE>
INCOME TAXES: The portfolios intend to qualify, under the Internal Revenue
Code, as regulated investment companies and if so qualified, will not have to
pay federal income taxes to the extent their taxable net income is
distributed. For tax purposes, each portfolio is a single taxable entity. On
a calendar year basis, each portfolio intends to distribute substantially all
of its net investment income and realized gains, if any, to avoid payment of
federal excise taxes.
Net investment income and net realized gains may differ for financial
statement and tax purposes. 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.
On the Statements of Assets and Liabilities, due to permanent book-to-tax
differences, accumulated net realized gain (loss) and undistributed net
investment income have been increased (decreased), resulting in a net
reclassification adjustment to reduce paid-in-capital by the following:
<TABLE>
<CAPTION>
Undistributed
Net Investment Paid-in- Accumulated
Income Capital Gains
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Growth & Income Fund......................... 25 (25) --
Capital Fund................................. 1,209,262 (853,716) (355,546)
Fiduciary Fund............................... 626,755 (626,755) --
Growth Fund.................................. 3,849,243 (3,849,243) --
Capital Appreciation Portfolio............... 1,150,267 -- (1,150,267)
</TABLE>
For federal income tax purposes Capital Appreciation Portfolio had a capital
loss carryover of $2,513,854 at August 31, 1997, which, if not offset by
subsequent capital gains, will expire in 2006. It is unlikely the Board of
Directors will authorize a distribution of any net realized gains until the
available capital loss carryover has been offset or expired.
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 August 31, 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 asset; at
market value, at the date of purchase. The aggregate value of such securities
at August 31, 1997, was $4,251,732 which represents 2.28% 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................... $ 391,336 $ 12,257 $1,496 $ 33,219
Value Fund................................... 142,183 2,416 355 4,060
Growth & Income Fund......................... 138,392 1,955 187 4,471
Capital Fund................................. 420,852 12,929 359 27,514
Fiduciary Fund............................... 142,155 3,326 93 8,506
Growth Fund.................................. 1,318,022 24,908 907 95,466
Capital Appreciation Portfolio............... 468,044 13,039 1,203 44,146
</TABLE>
For the year ended August 31, 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>
Series Amount
<S> <C>
- ---------------------------------------------------------
Asset Allocation Portfolio................... $ 4,247
Value Fund................................... 455
Growth & Income Fund......................... 737
Capital Fund................................. 3,925
Fiduciary Fund............................... 651
Growth Fund.................................. 20,397
Capital Appreciation Portfolio............... 2,820
</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.
42
<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 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............... .39 .47 .43 .37 .42 .53
Net realized and unrealized gain
(loss) on investments............... 3.47 .29 2.14 (.31) 1.52 .96
--------- --------- --------- --------- --------- ---------
Total from operations................... 3.86 .76 2.57 .06 1.94 1.49
--------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.41) (.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..... (1.36) (.80) (.49) (1.05) (.51) (.83)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 18.98 $ 16.48 $ 16.52 $ 14.44 $ 15.43 $ 14.00
--------- --------- --------- --------- --------- ---------
Total return @.......................... 24.62% 4.73% 18.25% .48% 14.20% 11.55%
Net assets end of period (000s
omitted).............................. $ 156,734 $ 136,656 $ 132,939 $ 119,395 $ 108,488 $ 89,674
Ratio of expenses to average daily net
assets................................ 1.48% 1.50% 1.57% 1.55% 1.58% 1.58%
Ratio of net investment income to
average daily net assets.............. 2.22% 2.85% 3.31% 2.60% 2.90% 4.05%
Portfolio turnover rate................. 109% 89% 94% 94% 103% 45%
Average commission rate paid {::}....... $ 0.0701 $ 0.0743 -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
Class B Class C
----------------------------------- -----------------------------------
Year Ended August 31
--------------------------------------------------------------------------
ASSET ALLOCATION PORTFOLIO 1997 1996 1995** 1997 1996 1995**
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 16.40 $ 16.46 $ 14.27 $ 16.35 $ 16.41 $ 14.27
--------- --------- --------- --------- --------- ---------
Operations:
Investment income - net............... .27 .37 .39 .26 .37 .39
Net realized and unrealized gain
(loss) on investments............... 3.47 .29 2.26 3.47 .29 2.21
--------- --------- --------- --------- --------- ---------
Total from operations................... 3.74 .66 2.65 3.73 .66 2.60
--------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.32) (.39) (.37) (.32) (.39) (.37)
From net realized gains............... (.95) (.32) (.09) (.95) (.32) (.09)
Excess distributions of net realized
gains............................... -- (.01) -- -- (.01) --
--------- --------- --------- --------- --------- ---------
Total distributions to shareholders..... (1.27) (.72) (.46) (1.27) (.72) (.46)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 18.87 $ 16.40 $ 16.46 $ 18.81 $ 16.35 $ 16.41
--------- --------- --------- --------- --------- ---------
Total return @.......................... 23.92% 4.12% 19.00% 23.93% 4.13% 18.64%
Net assets end of period (000s
omitted).............................. $ 7,462 $ 4,411 $ 692 $ 4,789 $ 2,641 $ 777
Ratio of expenses to average daily net
assets................................ 2.03% 2.05% 2.12%* 2.03% 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%*
Portfolio turnover rate................. 109% 89% 94% 109% 89% 94%
Average commission rate paid {::}....... $ 0.0701 $ 0.0743 -- $ 0.0701 $ 0.0743 --
<CAPTION>
Class H
-----------------------------------
Year Ended August 31
-----------------------------------
ASSET ALLOCATION PORTFOLIO 1997 1996 1995**
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 16.39 $ 16.44 $ 14.27
--------- --------- ---------
Operations:
Investment income - net............... .27 .38 .39
Net realized and unrealized gain
(loss) on investments............... 3.47 .29 2.24
--------- --------- ---------
Total from operations................... 3.74 .67 2.63
--------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.32) (.39) (.37)
From net realized gains............... (.95) (.32) (.09)
Excess distributions of net realized
gains............................... -- (.01) --
--------- --------- ---------
Total distributions to shareholders..... (1.27) (.72) (.46)
--------- --------- ---------
Net asset value, end of period.......... $ 18.86 $ 16.39 $ 16.44
--------- --------- ---------
Total return @.......................... 23.93% 4.19% 18.86%
Net assets end of period (000s
omitted).............................. $ 17,142 $ 10,904 $ 4,676
Ratio of expenses to average daily net
assets................................ 2.03% 2.05% 2.12%*
Ratio of net investment income to
average daily net assets.............. 1.67% 2.32% 2.54%*
Portfolio turnover rate................. 109% 89% 94%
Average commission rate paid {::}....... $ 0.0701 $ 0.0743 --
</TABLE>
* Annualized.
** 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.
+ Ten-month period ended August 31, 1995.
{::} In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period, divided by the total number of related shares purchased
and sold.
43
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class A Class B
-------------------------- --------------------------
Year Ended August 31
--------------------------------------------------------
VALUE FUND 1997 1996** 1997 1996**
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 10.75 $ 10.00 $ 10.70 $ 10.00
----------- ----------- ----------- -----------
Operations:
Investment income (loss) - net........ .09 .05 (.01) --
Net realized and unrealized gain on
investments......................... 2.94 .70 2.94 .70
----------- ----------- ----------- -----------
Total from operations................... 3.03 .75 2.93 .70
----------- ----------- ----------- -----------
Distributions to shareholders:
From investment income - net.......... (.06) -- (.03) --
From net realized gains............... (.21) -- (.21) --
----------- ----------- ----------- -----------
Total distributions to shareholders..... (.27) -- (.24) --
----------- ----------- ----------- -----------
Net asset value, end of period.......... $ 13.51 $ 10.75 $ 13.39 $ 10.70
----------- ----------- ----------- -----------
Total return @.......................... 28.66% 7.50% 27.75% 7.00%
Net assets end of period (000s
omitted).............................. $ 21,855 $ 9,847 $ 2,480 $ 642
Ratio of expenses to average daily net
assets................................ 1.59% 1.65%* 2.34% 2.40%*
Ratio of net investment income (loss) to
average daily net assets.............. .72% .75%* (.04%) .00%*
Portfolio turnover rate................. 93% 41% 93% 41%
Average commission rate paid{::}........ $ 0.0657 $ 0.0521 $ 0.0657 $ 0.0521
<CAPTION>
Class C Class H
-------------------------- --------------------------
Year Ended August 31
--------------------------------------------------------
VALUE FUND 1997 1996** 1997 1996**
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 10.70 $ 10.00 $ 10.70 $ 10.00
----------- ----------- ----------- -----------
Operations:
Investment income (loss) - net........ (.01) -- (.01) --
Net realized and unrealized gain on
investments......................... 2.94 .70 2.94 .70
----------- ----------- ----------- -----------
Total from operations................... 2.93 .70 2.93 .70
----------- ----------- ----------- -----------
Distributions to shareholders:
From investment income - net.......... (.03) -- (.03) --
From net realized gains............... (.21) -- (.21) --
----------- ----------- ----------- -----------
Total distributions to shareholders..... (.24) -- (.24) --
----------- ----------- ----------- -----------
Net asset value, end of period.......... $ 13.39 $ 10.70 $ 13.39 $ 10.70
----------- ----------- ----------- -----------
Total return @.......................... 27.75% 7.00% 27.75% 7.00%
Net assets end of period (000s
omitted).............................. $ 1,002 $ 223 $ 4,896 $ 1,605
Ratio of expenses to average daily net
assets................................ 2.34% 2.40%* 2.34% 2.40%*
Ratio of net investment income (loss) to
average daily net assets.............. (.04%) .00%* (.04%) .00%*
Portfolio turnover rate................. 93% 41% 93% 41%
Average commission rate paid{::}........ $ 0.0657 $ 0.0521 $ 0.0657 $ 0.0521
</TABLE>
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------ ---------------------- ----------------------
Year Ended August 31
----------------------------------------------------------------------------
GROWTH & INCOME FUND 1997 1996** 1997 1996** 1997 1996**
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 10.35 $ 10.00 $ 10.32 $ 10.00 $ 10.33 $ 10.00
----------- --------- --------- --------- --------- ---------
Operations:
Investment income - net............... .20 .07 .11 .02 .10 .03
Net realized and unrealized gain on
investments......................... 2.77 .34 2.77 .34 2.77 .34
----------- --------- --------- --------- --------- ---------
Total from operations................... 2.97 .41 2.88 .36 2.87 .37
----------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.16) (.06) (.07) (.04) (.07) (.04)
From net realized gains............... (.10) -- (.10) -- (.10) --
----------- --------- --------- --------- --------- ---------
Total distributions to shareholders..... (.26) (.06) (.17) (.04) (.17) (.04)
----------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 13.06 $ 10.35 $ 13.03 $ 10.32 $ 13.03 $ 10.33
----------- --------- --------- --------- --------- ---------
Total return @.......................... 29.00% 4.11% 28.16% 3.55% 28.03% 3.65%
Net assets end of period (000s
omitted).............................. $ 13,907 $ 3,117 $ 2,306 $ 508 $ 1,290 $ 302
Ratio of expenses to average daily net
assets................................ 1.75% 2.33%* 2.50% 3.08%* 2.50% 3.08%*
Ratio of net investment income to
average daily net assets.............. 1.68% 1.16%* .92% .35%* .94% .54%*
Portfolio turnover rate................. 15% 5% 15% 5% 15% 5%
Average commission rate paid {::}....... $ 0.0592 $ 0.0597 $ 0.0592 $ 0.0597 $ 0.0592 $ 0.0597
<CAPTION>
Class H
----------------------
Year Ended August 31
----------------------
GROWTH & INCOME FUND 1997 1996**
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 10.33 $ 10.00
--------- ---------
Operations:
Investment income - net............... .10 .03
Net realized and unrealized gain on
investments......................... 2.77 .34
--------- ---------
Total from operations................... 2.87 .37
--------- ---------
Distributions to shareholders:
From investment income - net.......... (.07) (.04)
From net realized gains............... (.10) --
--------- ---------
Total distributions to shareholders..... (.17) (.04)
--------- ---------
Net asset value, end of period.......... $ 13.03 $ 10.33
--------- ---------
Total return @.......................... 28.03% 3.65%
Net assets end of period (000s
omitted).............................. $ 5,085 $ 1,286
Ratio of expenses to average daily net
assets................................ 2.50% 3.08%*
Ratio of net investment income to
average daily net assets.............. .93% .44%*
Portfolio turnover rate................. 15% 5%
Average commission rate paid {::}....... $ 0.0592 $ 0.0597
</TABLE>
* Annualized.
** For the period from January 2, 1996 (commencement of operations) to
August 31, 1996.
@ 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 rules adopted by the Securities and Exchange
Commission, disclosure of average commission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period, divided by the total number of related shares purchased
and sold.
44
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class A
---------------------------------------------------------------
Year Ended August 31
---------------------------------------------------------------
CAPITAL FUND 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 21.89 $ 21.22 $ 18.36 $ 18.12 $ 17.86
----------- --------- --------- --------- ---------
Operations:
Investment income (loss) - net........ (.08) .04 .08 .07 .14
Net realized and unrealized gain on
investments......................... 7.06 .67 3.62 1.73 1.25
----------- --------- --------- --------- ---------
Total from operations................... 6.98 .71 3.70 1.80 1.39
----------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.01) (.04) (.08) (.12) (.09)
From net realized gains............... (2.73) -- (.76) (1.44) (1.04)
----------- --------- --------- --------- ---------
Total distributions to shareholders..... (2.74) (.04) (.84) (1.56) (1.13)
----------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 26.13 $ 21.89 $ 21.22 $ 18.36 $ 18.12
----------- --------- --------- --------- ---------
Total return @.......................... 34.57% 3.36% 21.49% 10.56% 7.88%
Net assets end of period (000s
omitted).............................. $ 340,949 $ 277,587 $ 291,263 $ 245,776 $ 246,369
Ratio of expenses to average daily net
assets................................ 1.18% 1.21% 1.24% 1.21% 1.22%
Ratio of net investment income (loss) to
average daily net assets.............. (.33%) .17% .42% .41% .77%
Portfolio turnover rate................. 43% 28% 14% 41% 68%
Average commission rate paid {::}....... $ 0.0693 $ 0.0718 -- -- --
</TABLE>
<TABLE>
<CAPTION>
Class B Class C
------------------------------------- -------------------------------------
Year Ended August 31
------------------------------------------------------------------------------
CAPITAL FUND 1997 1996 1995** 1997 1996 1995**
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 21.69 $ 21.14 $ 18.35 $ 21.68 $ 21.13 $ 18.35
----------- --------- --------- ----------- --------- ---------
Operations:
Investment loss - net................. (.35) (.12) -- (.33) (.12) --
Net realized and unrealized gain on
investments......................... 7.06 .67 3.58 7.06 .67 3.57
----------- --------- --------- ----------- --------- ---------
Total from operations................... 6.71 .55 3.58 6.73 .55 3.57
----------- --------- --------- ----------- --------- ---------
Distributions to shareholders:
From investment income - net.......... -- -- (.03) -- -- (.03)
From net realized gains............... (2.73) -- (.76) (2.73) -- (.76)
----------- --------- --------- ----------- --------- ---------
Total distributions to shareholders..... (2.73) -- (.79) (2.73) -- (.79)
----------- --------- --------- ----------- --------- ---------
Net asset value, end of period.......... $ 25.67 $ 21.69 $ 21.14 $ 25.68 $ 21.68 $ 21.13
----------- --------- --------- ----------- --------- ---------
Total return @.......................... 33.55% 2.60% 20.74% 33.68% 2.60% 20.68%
Net assets end of period (000s
omitted).............................. $ 7,284 $ 4,097 $ 1,527 $ 1,432 $ 824 $ 344
Ratio of expenses to average daily net
assets................................ 1.93% 1.96% 1.99%* 1.93% 1.96% 1.99%*
Ratio of net investment loss to average
daily net assets...................... (1.08%) (.60%) (.36%)* (1.08%) (.60%) (.36%)*
Portfolio turnover rate................. 43% 28% 14% 43% 28% 14%
Average commission rate paid {::}....... $ 0.0693 $ 0.0718 -- $ 0.0693 $ 0.0718 --
<CAPTION>
Class H
-------------------------------------
Year Ended August 31
-------------------------------------
CAPITAL FUND 1997 1996 1995**
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 21.69 $ 21.14 $ 18.35
----------- --------- ---------
Operations:
Investment loss - net................. (.34) (.12) --
Net realized and unrealized gain on
investments......................... 7.06 .67 3.58
----------- --------- ---------
Total from operations................... 6.72 .55 3.58
----------- --------- ---------
Distributions to shareholders:
From investment income - net.......... -- -- (.03)
From net realized gains............... (2.73) -- (.76)
----------- --------- ---------
Total distributions to shareholders..... (2.73) -- (.79)
----------- --------- ---------
Net asset value, end of period.......... $ 25.68 $ 21.69 $ 21.14
----------- --------- ---------
Total return @.......................... 33.61% 2.60% 20.74%
Net assets end of period (000s
omitted).............................. $ 14,468 $ 8,052 $ 4,052
Ratio of expenses to average daily net
assets................................ 1.93% 1.96% 1.99%*
Ratio of net investment loss to average
daily net assets...................... (1.08%) (.60%) (.37%)*
Portfolio turnover rate................. 43% 28% 14%
Average commission rate paid {::}....... $ 0.0693 $ 0.0718 --
</TABLE>
* Annualized.
** 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.
{::} In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period, divided by the total number of related shares purchased
and sold.
45
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class A
-------------------------------------------------------------
Year Ended August 31
-------------------------------------------------------------
FIDUCIARY FUND, INC. 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 36.75 $ 35.54 $ 30.23 $ 30.07 $ 28.74
--------- --------- --------- --------- ---------
Operations:
Investment loss - net................. (.28) (.03) (.16) (.14) (.09)
Net realized and unrealized gain
(loss) on investments............... 12.56 1.50 6.68 2.99 3.11
--------- --------- --------- --------- ---------
Total from operations................... 12.28 1.47 6.52 2.85 3.02
--------- --------- --------- --------- ---------
Distributions to shareholders:
From net realized gains............... (2.88) (.26) (1.21) (2.69) (1.69)
--------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 46.15 $ 36.75 $ 35.54 $ 30.23 $ 30.07
--------- --------- --------- --------- ---------
Total return @.......................... 35.08% 4.18% 22.71% 10.17% 10.58%
Net assets end of period (000s
omitted).............................. $ 83,847 $ 65,641 $ 63,195 $ 48,833 $ 47,543
Ratio of expenses to average daily net
assets................................ 1.41% 1.42% 1.62% 1.45% 1.45%
Ratio of net investment loss to average
daily net assets...................... (.70%) (.07%) (.53%) (.45%) (.31%)
Portfolio turnover rate................. 46% 30% 12% 25% 53%
Average commission rate paid {::}....... $ 0.0684 $ 0.0715 -- -- --
</TABLE>
<TABLE>
<CAPTION>
Class B Class C
--------------------------------------- ---------------------------------------
Year Ended August 31
----------------------------------------------------------------------------------
FIDUCIARY FUND, INC. 1997 1996 1995** 1997 1996 1995**
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 36.26 $ 35.35 $ 30.15 $ 36.32 $ 35.40 $ 30.15
----------- --------- ----------- ----------- --------- -----------
Operations:
Investment loss - net................. (.79) (.33) (.13) (.83) (.32) (.12)
Net realized and unrealized gain on
investments......................... 12.56 1.50 6.54 12.56 1.50 6.58
----------- --------- ----------- ----------- --------- -----------
Total from operations................... 11.77 1.17 6.41 11.73 1.18 6.46
----------- --------- ----------- ----------- --------- -----------
Distributions to shareholders:
From net realized gains............... (2.88) (.26) (1.21) (2.88) (.26) (1.21)
----------- --------- ----------- ----------- --------- -----------
Net asset value, end of period.......... $ 45.15 $ 36.26 $ 35.35 $ 45.17 $ 36.32 $ 35.40
----------- --------- ----------- ----------- --------- -----------
Total return @.......................... 34.10% 3.35% 22.38% 33.92% 3.38% 22.55%
Net assets end of period (000s
omitted).............................. $ 2,663 $ 1,360 $ 473 $ 828 $ 491 $ 272
Ratio of expenses to average daily net
assets................................ 2.16% 2.17% 2.37%* 2.16% 2.17% 2.37%*
Ratio of net investment loss to average
daily net assets...................... (1.44%) (.78%) (1.31%)* (1.44%) (.82%) (1.31%)*
Portfolio turnover rate................. 46% 30% 12% 46% 30% 12%
Average commission rate paid {::}....... $ 0.0684 $ 0.0715 -- $ 0.0684 $ 0.0715 --
<CAPTION>
Class H
---------------------------------------
Year Ended August 31
---------------------------------------
FIDUCIARY FUND, INC. 1997 1996 1995**
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 36.26 $ 35.35 $ 30.15
----------- --------- -----------
Operations:
Investment loss - net................. (.78) (.33) (.17)
Net realized and unrealized gain on
investments......................... 12.56 1.50 6.58
----------- --------- -----------
Total from operations................... 11.78 1.17 6.41
----------- --------- -----------
Distributions to shareholders:
From net realized gains............... (2.88) (.26) (1.21)
----------- --------- -----------
Net asset value, end of period.......... $ 45.16 $ 36.26 $ 35.35
----------- --------- -----------
Total return @.......................... 34.13% 3.35% 22.38%
Net assets end of period (000s
omitted).............................. $ 6,508 $ 3,164 $ 1,481
Ratio of expenses to average daily net
assets................................ 2.16% 2.17% 2.37%*
Ratio of net investment loss to average
daily net assets...................... (1.44%) (.80%) (1.29%)*
Portfolio turnover rate................. 46% 30% 12%
Average commission rate paid {::}....... $ 0.0684 $ 0.0715 --
</TABLE>
* Annualized.
** 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.
{::} In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period, divided by the total number of related shares purchased
and sold.
46
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class A
------------------------------------------------------------------
Year Ended August 31
------------------------------------------------------------------
GROWTH FUND 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 32.14 $ 32.66 $ 26.25 $ 29.09 $ 24.31
------------ --------- --------- ----------- ---------
Operations:
Investment loss - net................. (.16) (.11) (.04) (.10) (.06)
Net realized and unrealized gain
(loss) on investments............... 8.41 1.30 6.95 (.88) 5.52
------------ --------- --------- ----------- ---------
Total from operations................... 8.25 1.19 6.91 (.98) 5.46
------------ --------- --------- ----------- ---------
Distributions to shareholders:
From investment income - net.......... -- -- -- -- (.04)
From net realized gains............... (3.07) (1.71) (.50) (1.86) (.64)
------------ --------- --------- ----------- ---------
Total distributions to shareholders..... (3.07) (1.71) (.50) (1.86) (.68)
------------ --------- --------- ----------- ---------
Net asset value, end of period.......... $ 37.32 $ 32.14 $ 32.66 $ 26.25 $ 29.09
------------ --------- --------- ----------- ---------
Total return @.......................... 27.01% 4.09% 26.92% (3.77%) 22.69%
Net assets end of period (000s
omitted).............................. $ 734,654 $ 641,061 $ 670,753 $ 558,589 $ 585,117
Ratio of expenses to average daily net
assets................................ 1.07% 1.09% 1.13% 1.09% 1.10%
Ratio of net investment loss to average
daily net assets...................... (.45%) (.33%) (.13%) (.36%) (.20%)
Portfolio turnover rate................. 28% 32% 27% 23% 49%
Average commission rate paid {::}....... $ 0.0679 $ 0.0709 -- -- --
</TABLE>
<TABLE>
<CAPTION>
Class B Class C
---------------------------------------- ------------------------------------------
Year Ended August 31
--------------------------------------------------------------------------------------
GROWTH FUND 1997 1996 1995** 1997 1996 1995**
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 31.75 $ 32.48 $ 25.85 $ 31.75 $ 32.49 $ 25.85
--------- ------------ ----------- ----------- ------------ -----------
Operations:
Investment loss - net................. (.56) (.32) (.13) (.57) (.33) (.10)
Net realized and unrealized gain on
investments......................... 8.41 1.30 7.26 8.41 1.30 7.24
--------- ------------ ----------- ----------- ------------ -----------
Total from operations................... 7.85 .98 7.13 7.84 .97 7.14
--------- ------------ ----------- ----------- ------------ -----------
Distributions to shareholders:
From net realized gains............... (3.07) (1.71) (.50) (3.07) (1.71) (.50)
--------- ------------ ----------- ----------- ------------ -----------
Net asset value, end of period.......... $ 36.53 $ 31.75 $ 32.48 $ 36.52 $ 31.75 $ 32.49
--------- ------------ ----------- ----------- ------------ -----------
Total return @.......................... 26.02% 3.45% 28.17% 25.98% 3.41% 28.21%
Net assets end of period (000s
omitted).............................. $ 12,149 $ 6,710 $ 2,179 $ 2,367 $ 1,077 $ 264
Ratio of expenses to average daily net
assets................................ 1.82% 1.84% 1.88%* 1.82% 1.84% 1.88%*
Ratio of net investment income (loss) to
average daily net assets.............. (1.19%) (1.07%) (1.09%)* (1.19%) (1.07%) (1.10%)*
Portfolio turnover rate................. 28% 32% 27% 28% 32% 27%
Average commission rate paid {::}....... $ 0.0679 $ 0.0709 -- $ 0.0679 $ 0.0709 --
<CAPTION>
Class H Class Z
------------------------------------------ ---------------------------
Year Ended August 31
-------------------------------------------------------------------------
GROWTH FUND 1997 1996 1995** 1997 1996***
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 31.75 $ 32.49 $ 25.85 $ 32.18 $ 31.61
----------- ------------ ----------- ----------- ------------
Operations:
Investment loss - net................. (.55) (.33) (.11) (.05) --
Net realized and unrealized gain on
investments......................... 8.41 1.30 7.25 8.41 .57
----------- ------------ ----------- ----------- ------------
Total from operations................... 7.86 .97 7.14 8.36 .57
----------- ------------ ----------- ----------- ------------
Distributions to shareholders:
From net realized gains............... (3.07) (1.71) (.50) (3.07) --
----------- ------------ ----------- ----------- ------------
Net asset value, end of period.......... $ 36.54 $ 31.75 $ 32.49 $ 37.47 $ 32.18
----------- ------------ ----------- ----------- ------------
Total return @.......................... 26.05% 3.41% 28.21% 27.34% 1.80%
Net assets end of period (000s
omitted).............................. $ 34,941 $ 21,176 $ 6,867 $ 112,356 $ 93,006
Ratio of expenses to average daily net
assets................................ 1.82% 1.84% 1.88%* .82% .84%
Ratio of net investment income (loss) to
average daily net assets.............. (1.19%) (1.07%) (1.10%)* (.20%) .01%*
Portfolio turnover rate................. 28% 32% 27% 28% 32%
Average commission rate paid {::}....... $ 0.0679 $ 0.0709 -- $ 0.0679 $ 0.0709
</TABLE>
* Annualized.
** For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
*** For the period from March 1,1996 (commencement of operations) to
August 31, 1996.
{::} In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period, divided by the total number of related shares purchased
and sold.
47
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class A
-------------------------------------------------------------------
Year Ended
Year Ended August 31 October 31,
------------------------------------- --------------------------
CAPITAL APPRECIATION PORTFOLIO 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 34.76 $ 30.67 $ 23.05 $ 27.38 $ 19.85
----------- --------- --------- ----------- -----------
Operations:
Investment income (loss) - net........ (.26) (.29) (.17) (.12) (.30)
Net realized and unrealized gain
(loss) on investments............... (2.45) 4.61 7.79 (2.45) 7.83
----------- --------- --------- ----------- -----------
Total from operations................... (2.71) 4.32 7.62 (2.57) 7.53
----------- --------- --------- ----------- -----------
Distributions to shareholders:
From net realized gains............... (1.18) (.23) -- (1.76) --
Tax return of capital................. (.27) -- -- -- --
----------- --------- --------- ----------- -----------
Total distributions to shareholders..... (1.45) (.23) -- (1.76) --
----------- --------- --------- ----------- -----------
Net asset value, end of period.......... $ 30.60 $ 34.76 $ 30.67 $ 23.05 $ 27.38
----------- --------- --------- ----------- -----------
Total return @.......................... (7.89%) 14.21% 33.06% (9.56%) 37.93%
Net assets end of period (000s
omitted).............................. $ 105,422 $ 114,310 $ 90,918 $ 68,352 $ 58,434
Ratio of expenses to average daily net
assets................................ 1.55% 1.56% 1.69% 1.62% 1.62%
Ratio of net investment income to
average daily net assets.............. (.84%) (.96%) (.82%) (.61%) (1.23%)
Portfolio turnover rate................. 25% 34% 21% 36% 60%
Average commission rate paid {::}....... $ 0.0611 $ 0.0691 -- -- --
</TABLE>
<TABLE>
<CAPTION>
Class B Class C
----------------------------------------- -----------------------------------------
Year Ended August 31
--------------------------------------------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO 1997 1996 1995** 1997 1996 1995**
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 34.46 $ 30.57 $ 22.45 $ 34.48 $ 30.58 $ 22.45
----------- ----------- ----------- ----------- ----------- -----------
Operations:
Investment income (loss) - net........ (.40) (.49) (.35) (.40) (.48) (.36)
Net realized and unrealized gain
(loss) on investments............... (2.45) 4.61 8.47 (2.45) 4.61 8.49
----------- ----------- ----------- ----------- ----------- -----------
Total from operations................... (2.85) 4.12 8.12 (2.85) 4.13 8.13
----------- ----------- ----------- ----------- ----------- -----------
Distributions to shareholders:
From net realized gains............... (1.18) (.23) -- (1.18) (.23) --
Tax return of capital................. (.27) -- -- (.27) -- --
----------- ----------- ----------- ----------- ----------- -----------
Total distributions to shareholders..... (1.45) (.23) -- (1.45) (.23) --
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period.......... $ 30.16 $ 34.46 $ 30.57 $ 30.18 $ 34.48 $ 30.58
----------- ----------- ----------- ----------- ----------- -----------
Total return @.......................... (8.38%) 13.60% 36.17% (8.38%) 13.62% 36.21%
Net assets end of period (000s
omitted).............................. $ 6,561 $ 4,522 $ 841 $ 1,875 $ 1,004 $ 227
Ratio of expenses to average daily net
assets................................ 2.10% 2.11% 2.24%* 2.10% 2.11% 2.24%*
Ratio of net investment income to
average daily net assets.............. (1.39%) (1.47%) (1.61%)* (1.39%) (1.46%) (1.62%)*
Portfolio turnover rate................. 25% 34% 21% 25% 34% 21%
Average commission rate paid {::}....... $ 0.0611 $ 0.0691 -- $ 0.0611 $ 0.0691 --
<CAPTION>
Class H
-----------------------------------------
Year Ended August 31
-----------------------------------------
CAPITAL APPRECIATION PORTFOLIO 1997 1996 1995**
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 34.48 $ 30.58 $ 22.45
----------- ----------- -----------
Operations:
Investment income (loss) - net........ (.40) (.48) (.36)
Net realized and unrealized gain
(loss) on investments............... (2.45) 4.61 8.49
----------- ----------- -----------
Total from operations................... (2.85) 4.13 8.13
----------- ----------- -----------
Distributions to shareholders:
From net realized gains............... (1.18) (.23) --
Tax return of capital................. (.27) -- --
----------- ----------- -----------
Total distributions to shareholders..... (1.45) (.23) --
----------- ----------- -----------
Net asset value, end of period.......... $ 30.18 $ 34.48 $ 30.58
----------- ----------- -----------
Total return @.......................... (8.38%) 13.62% 36.21%
Net assets end of period (000s
omitted).............................. $ 13,379 $ 9,575 $ 2,115
Ratio of expenses to average daily net
assets................................ 2.10% 2.11% 2.24%*
Ratio of net investment income to
average daily net assets.............. (1.39%) (1.46%) (1.62%)*
Portfolio turnover rate................. 25% 34% 21%
Average commission rate paid {::}....... $ 0.0611 $ 0.0691 --
</TABLE>
* Annualized.
** 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.
+ Ten-month period ended August 31, 1995.
{::} In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period, divided by the total number of related shares purchased
and sold.
48
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Fortis Advantage Portfolios, Inc.
Fortis Equity Portfolios, Inc.
Fortis Fiduciary Fund, Inc.
Fortis Growth Fund, Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments in securities, of Asset Allocation Portfolio and
Capital Appreciation Portfolio (portfolios within Fortis Advantage Portfolios,
Inc.), Fortis Capital Fund, Fortis Value Fund, and Fortis Growth & Income Fund
(portfolios within Fortis Equity Portfolios, Inc.), Fortis Fiduciary Fund, Inc.,
and Fortis Growth Fund, Inc. as of August 31, 1997 and the related statements of
operations for the year then ended, and the statements of changes in net assets
and the financial highlights for each of the periods presented. These financial
statements and the financial highlights are the responsibility of management.
Our responsibility is to express an opinion on these financial statements and
the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Investment securities held in custody are confirmed to us by the
custodian. As to securities purchased and sold but not received or delivered,
and securities on loan, we request confirmations from brokers and the custodian,
and where replies are not received, we carry out other appropriate auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of
Asset Allocation Portfolio, Capital Appreciation Portfolio, Fortis Capital Fund,
Fortis Value Fund, Fortis Growth & Income Fund, Fortis Fiduciary Fund, Inc., and
Fortis Growth Fund, Inc. as of August 31, 1997 and the results of their
operations for the year then ended, and the changes in their net assets and the
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
October 10, 1997
49
<PAGE>
FEDERAL INCOME TAX INFORMATION
The information set forth below is for the funds' fiscal year as required by
federal tax law. Shareholders, however, must report distributions on a calendar
year basis for income tax purposes which may include distributions for portions
of two fiscal years of the fund. Accordingly, the information needed by
shareholders for income tax purposes will be sent to them in early 1998.
Shareholders may wish to consult a tax advisor on how to report distribution for
state and local purposes.
Fortis Asset Allocation Portfolio, Fortis Value Fund, Fortis Growth & Income
Fund, and Fortis Capital Appreciation Portfolio paid income distributions,
taxable as dividend income, of which 5.59%, 34.33%, 100%, and 4.90% and
qualified for deduction by corporations. Detailed below are the per share
distributions made for the fiscal year ended August 31, 1997.
ASSET ALLOCATION PORTFOLIO
<TABLE>
<CAPTION>
RECORD DATE Class A Class B Class C Class H Class Z
<S> <C> <C> <C> <C> <C>
----------------------------------------------------
Net Investment Income Per Share
September 18, 1996................................ $ 0.120 $ 0.100 $ 0.100 $ 0.100
December 18, 1996................................. 0.110 0.088 0.088 0.088
March 18, 1997.................................... 0.080 0.057 0.057 0.057
June 18, 1997..................................... 0.099 0.076 0.076 0.076
-------- -------- -------- --------
Total Distributions............................... 0.409 0.321 0.321 0.321
-------- -------- -------- --------
Long-Term Capital Gain Per Share
December 18, 1996................................. $ 0.950 $ 0.950 $ 0.950 $ 0.950
-------- -------- -------- --------
VALUE FUND
RECORD DATE
Net Investment Income Per Share
December 18, 1996................................. $ 0.059 $ 0.025 $ 0.025 $ 0.025
Short-Term Capital Gain Per Share
December 18, 1996................................. $ 0.214 $ 0.214 $ 0.214 $ 0.214
-------- -------- -------- --------
GROWTH & INCOME FUND
RECORD DATE
Net Investment Income Per Share
September 18, 1996................................ $ 0.030 $ 0.015 $ 0.015 $ 0.015
December 18, 1996................................. 0.023 0.005 0.005 0.005
March 18, 1997.................................... 0.052 0.030 0.030 0.030
June 18, 1997..................................... 0.051 0.019 0.019 0.019
-------- -------- -------- --------
Total Distributions............................... 0.156 0.069 0.069 0.069
-------- -------- -------- --------
Short-Term Capital Gain Per Share
December 18, 1996................................. $ 0.103 $ 0.103 $ 0.103 $ 0.103
-------- -------- -------- --------
CAPITAL FUND
RECORD DATE
Net Investment Income Per Share
December 18, 1996................................. $ 0.011 -- -- --
Long-Term Capital Gain Per Share
December 18, 1996................................. $ 2.730 $ 2.730 $ 2.730 $ 2.730
-------- -------- -------- --------
FIDUCIARY FUND, INC
RECORD DATE
Long-Term Capital Gain Per Share
December 18, 1996................................. $ 2.880 $ 2.880 $ 2.880 $ 2.880
-------- -------- -------- --------
GROWTH FUND, INC.
RECORD DATE
Long-Term Capital Gain Per Share
December 18, 1996................................. $ 3.070 $ 3.070 $ 3.070 $ 3.070 $ 3.070
-------- -------- -------- -------- --------
CAPITAL APPRECIATION PORTFOLIO
RECORD DATE
Total Distributions Per Share*
December 18, 1996................................. $ 1.450 $ 1.450 $ 1.450 $ 1.450
-------- -------- -------- --------
</TABLE>
* Of this amount $1.18 was Long-Term Capital Gains.
50
<PAGE>
DIRECTORS AND OFFICERS
DIRECTORS Richard W. Cutting CPA AND FINANCIAL CONSULTANT
Allen R. Freedman CHAIRMAN AND CHIEF EXECUTIVE OFFICER,
FORTIS, INC. MANAGING DIRECTOR OF
FORTIS INTERNATIONAL, N.V.
Dr. Robert M. Gavin PRESIDENT, CRANBROOK EDUCATION
COMMUNITY. PRIOR TO JULY 1996,
PRESIDENT MACALESTER COLLEGE
Benjamin S. Jaffray CHAIRMAN, SHEFFIELD GROUP, LTD.
Jean L. King PRESIDENT, COMMUNI-KING
Dean C. Kopperud CHIEF EXECUTIVE OFFICER AND DIRECTOR,
FORTIS ADVISERS, INC. PRESIDENT AND
DIRECTOR, FORTIS INVESTORS, INC.
SENIOR VICE PRESIDENT AND DIRECTOR,
FORTIS BENEFITS INSURANCE COMPANY AND
TIME INSURANCE COMPANY
Edward M. Mahoney PRIOR TO JANUARY, 1995, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER, FORTIS
ADVISERS, INC., FORTIS INVESTORS,
INC.
Robb L. Prince FINANCIAL AND EMPLOYEE BENEFIT
CONSULTANT. PRIOR TO JULY, 1995, VICE
PRESIDENT AND TREASURER, JOSTENS,
INC.
Leonard J. Santow PRINCIPAL, GRIGGS & SANTOW, INC.
Noel Shadko MARKETING CONSULTANT. PRIOR TO MAY,
1996, SENIOR VICE PRESIDENT OF
MARKETING & STRATEGIC PLANNING,
ROLLERBLADE, INC.
Joseph M. Wikler INVESTMENT CONSULTANT AND PRIVATE
INVESTOR. PRIOR TO JANUARY, 1994,
DIRECTOR OF RESEARCH, CHIEF
INVESTMENT OFFICER, PRINCIPAL, AND
DIRECTOR, THE ROTHSCHILD CO.
OFFICERS
Dean C. Kopperud
PRESIDENT AND DIRECTOR
Robert W. Beltz, Jr.
VICE PRESIDENT
James S. Byrd
VICE PRESIDENT
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.
51
<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 TAX-FREE MINNESOTA
RANGE OF 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- Insurance U.S. GOVERNMENT
DEFERRED 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.
52
<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 marketing
influence. The guarantees in our insurance products are underwritten by
Fortis Benefits Insurance Company and Time Insurance Company.
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.
[LOGO] For more information, call your investment representative or Fortis at
(800) 800-2638.
FORTIS-Registered Trademark- ---------------
FORTIS FINANCIAL GROUP Bulk Rate
P.O. Box 64284 U.S. Postage
St. Paul, MN 55164 PAID
Permit No. 3794
Minneapolis, MN
FORTIS STOCK FUNDS ---------------
[RECYCLE LOGO] Printed on recycled paper with
40% preconsumer waste and 10%
post consumer waste. Please recycle.
FORTIS-Registered Trademark- and Fortis-Registered Trademark- are registered
servicemarks of Fortis AMEV and Fortis AG.
98144 (10/97)
