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Take stock of our family of funds
[logo]
Fortis stock funds
annual report
August 31, 1999
FORTIS FINANCIAL GROUP
[PICTURE]
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CONTENTS
LETTER TO SHAREHOLDERS 2
SCHEDULE OF INVESTMENTS
FORTIS ASSET ALLOCATION
PORTFOLIO 9
FORTIS VALUE FUND 18
FORTIS GROWTH AND INCOME
FUND 21
FORTIS CAPITAL FUND 24
FORTIS GROWTH FUND 27
FORTIS CAPITAL APPRECIATION
PORTFOLIO 29
STATEMENTS OF ASSETS AND
LIABILITIES 32
STATEMENTS OF OPERATIONS 34
STATEMENTS OF CHANGES IN
NET ASSETS
FORTIS ASSET ALLOCATION
PORTFOLIO 36
FORTIS VALUE FUND 37
FORTIS GROWTH AND INCOME
FUND 38
FORTIS CAPITAL FUND 39
FORTIS GROWTH FUND 40
FORTIS CAPITAL APPRECIATION
PORTFOLIO 41
NOTES TO FINANCIAL STATEMENTS 42
BOARD OF DIRECTORS AND OFFICERS 60
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(800) 800-2000, EXT. 4579.
HIGHLIGHTS
FOR THE YEAR ENDED AUGUST 31, 1999
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<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.............. $16.91 $16.80 $16.74 $16.79 $19.05*
End of period.................... $18.43 $18.30 $18.22 $18.29 $18.44*
TOTAL RETURN 22.96% 22.32% 22.27% 22.32% -3.20%*
DISTRIBUTIONS PER SHARE:
From net investment income....... $0.290 $0.189 $0.189 $0.189 --
From net realized gains on
investments.................... $1.960 $1.960 $1.960 $1.960 --
FORTIS VALUE FUND
NET ASSET VALUE PER SHARE:
Beginning of year................ $11.85 $11.71 $11.72 $11.72
End of year...................... $13.28 $13.06 $13.07 $13.07
TOTAL RETURN 24.10% 23.20% 23.18% 23.18%
DISTRIBUTIONS PER SHARE:
From net investment income....... $0.049 -- -- --
From net realized gains on
investments.................... $1.302 $1.302 $1.302 $1.302
FORTIS GROWTH & INCOME FUND
NET ASSET VALUE PER SHARE:
Beginning of year................ $13.20 $13.16 $13.16 $13.16
End of year...................... $14.83 $14.77 $14.76 $14.76
TOTAL RETURN 16.84% 16.08% 16.00% 16.00%
DISTRIBUTIONS PER SHARE:
From net investment income......... $0.184 $0.101 $0.101 $0.101
From net realized gains on
investments...................... $0.390 $0.390 $0.390 $0.390
FORTIS CAPITAL FUND
NET ASSET VALUE PER SHARE:
Beginning of year................ $22.37 $21.73 $21.73 $21.74
End of year...................... $22.81 $21.77 $21.76 $21.78
TOTAL RETURN 37.88% 36.94% 36.87% 36.91%
DISTRIBUTIONS PER SHARE:
From net realized gains on
investments...................... $6.262 $6.262 $6.262 $6.262
FORTIS GROWTH FUND
NET ASSET VALUE PER SHARE:
Beginning of year................ $29.78 $28.85 $28.85 $28.86 $30.00
End of year...................... $30.80 $29.26 $29.26 $29.28 $31.23
TOTAL RETURN 40.00% 38.98% 38.98% 39.00% 40.49%
DISTRIBUTIONS PER SHARE:
From net realized gains on
investments...................... $9.570 $9.570 $9.570 $9.570 $9.570
FORTIS CAPITAL APPRECIATION
PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of year................ $26.42 $25.90 $25.92 $25.92
End of year...................... $36.04 $34.91 $34.94 $34.94
TOTAL RETURN 80.27% 79.35% 79.33% 79.33%
DISTRIBUTIONS PER SHARE:
From net realized gains on
investments...................... $8.500 $8.500 $8.500 $8.500
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* For the period July 27,1999 (inception of class) to
August 31, 1999.
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HOW TO USE THIS REPORT
For a quick overview of each fund's performance during the past year, refer to
the Financial Highlights. The letters from the portfolio managers and president
provide 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.
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FORTIS ASSET ALLOCATION FUND
This is Fortis' most conservative fund choice that includes
stocks; it merges three major categories of assets --
stocks, bonds and money markets -- into one fund to reduce
[PHOTO] risk and maximize return.
FORTIS VALUE FUND
This fund invests in large, established companies whose
stocks are currently offered at a price fund managers
[PHOTO] consider low but that they expect to appreciate.
FORTIS GROWTH & INCOME FUND
This fund invests in some of the world's biggest, most
established companies and is Fortis' most conservative
large-cap offering. The fund seeks both capital appreciation
[PHOTO] and income.
FORTIS CAPITAL FUND
This fund has the distinction of being Fortis' oldest and
one of our most popular large-cap stock fund offerings. The
[PHOTO] primary goal of the fund is long-term growth.
FORTIS GROWTH FUND
This fund has been a favorite of generations of Fortis
investors. It invests in established, medium-size companies
which fund managers believe to have the potential for
[PHOTO] above-average earnings growth.
FORTIS CAPITAL APPRECIATION FUND
Our small-cap stock fund offers the potential for high total
returns. It's the most volatile of the Fortis stock funds
because investing in small companies generally involves more
[PHOTO] risk.
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1
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[LOGO]
DEAR SHAREHOLDER:
The stock market recorded very strong gains for the year ended August 31, 1999.
The S&P 500 rose 39.80%, the DJIA was up 46.08%, the S&P Mid Cap index advanced
41.55% and the Russell 2000 small cap index rose 28.37%. Your Fortis funds also
recorded very strong performance for the year. Clearly all of these results are
substantially above norms and reflect in part the fact that the low of the
equity market for the last two years was reached on August 31, 1998, exactly one
year ago. The lows of last fall accompanied investor concern over a continuing
weakening of Asian economies and the potential for huge losses in the bond and
currency markets stemming from poor investment decisions on the part of a very
large hedge fund, Long Term Capital.
The Federal Reserve acted promptly to shore up confidence by brokering a
recovery plan for Long Term Capital and also by instigating a series of interest
rate declines. By the fourth quarter of last year, the outlook was considerably
better. Long Term Capital did not fail, lower interest rates stimulated the
economy and consumer spending. Corporations continued to spend heavily on
technology and corporate profits began to climb. The stock market began to rise
again.
Fueled by strong domestic economic growth, particularly among consumers,
corporate profits and revenue growth have continued to expand in 1999.
Additionally, international markets appear to be in the bottoming process with
some showing strength that is leading to better demand around the globe. Buoyed
by significant tax refunds and positive consumer attitudes stemming from rising
real wages and confidence in employment, consumer spending on autos, housing,
and related items help to generate GDP growth in the area of 5% in the first
half.
Strong economies are good environments for stocks. One of the by-products of
this strength is that a broad range of industries and companies are
participating in the economic recovery. As a result, investors who had flocked
to very large, secure growth companies for most of 1998, found that good growth
could be found, at much lower prices, in industries which had been ignored. As a
result, early in the second quarter, value stocks abruptly started to outperform
growth stocks for the first time in over two years, resulting in strong
performance of value and small cap stocks. Sectors, which are sensitive to
economic activity, trade, and raw materials including capital equipment, energy,
and basic materials, are up more than twice the rate of the overall market. Many
growth-oriented styles have not fared as well in the most recent reporting
period.
Given that inventories were very low, this growth surge has resulted in strong
demand for commodities, such as oil and paper, which has led to a firming in
prices and resulted in somewhat higher inflation than we experienced in the
previous 18 months. The bond market has reacted swiftly to the scent of
inflation and the Federal Reserve Board has echoed with a 50 basis point
increase in interest rates this summer. The stock market improvement that
commenced a year ago has stalled and equities have been locked in a trading
range for the last several months, which we expect to continue a while longer.
However, over the next year, we continue to anticipate that stocks will move
higher, albeit at a more normal pace, as the economy continues to expand and
corporate profits move higher.
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/s/ Dean C. Kopperud /s/ Lucinda S. Mezey /s/ Howard H. Hudson
Dean C. Kopperud Lucinda S. Mezey Howard H. Hudson
President Vice President, Equities Vice President
Fixed Income
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2
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PORTFOLIO ALLOCATION AS OF 8/31/99
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
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Common Stocks 59.3%
Corporate Bonds-Investment Grade 16.4%
U.S. Government Securities 12.2%
Corporate Bonds-Non-Investment Grade 6.1%
Asset Backed Securities 3.3%
Cash Equivalents/Receivables 2.7%
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TOP 10 HOLDINGS AS OF 8/31/99
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
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<C> <S> <C>
1. U.S. Treasury Note (6.125%) 2007 3.9%
2. U.S. Treasury Strip (6.10%) 2019 2.4%
3. U.S. Treasury Note (5.50%) 2003 2.2%
4. Interpublic Group of Companies, Inc. 1.6%
5. AES Corp. 1.4%
6. American International Group, Inc. 1.4%
7. Motorola, Inc. 1.2%
8. General Electric Co. 1.2%
9. Tyco International Ltd. 1.2%
10. Williams Companies, Inc. 1.2%
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CLASS B, C, H AND Z AVERAGE ANNUAL TOTAL RETURNS
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<CAPTION>
Since
1 Year Inception
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<S> <C> <C>
Class B sharesDiamond +22.32% +14.54%+
Class B sharesDiamond Diamond +18.72% +14.32%+
Class C sharesDiamond +22.27% +14.47%+
Class C sharesDiamond Diamond +21.27% +14.47%+
Class H sharesDiamond +22.32% +14.54%+
Class H sharesDiamond Diamond +18.72% +14.31%+
Class Z shares -- -3.20%++
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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 or
3.00% if redeemed in year three or four, 2.00% if redeemed in year five and
1.00% if redeemed in year six (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, 1999.
+ Since November 14, 1994 -- Date shares were first offered to
the public.
++ Total return since July 27, 1999 -- Date shares were first
offered to the public.
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FORTIS ASSET ALLOCATION PORTFOLIO
STOCKS, BONDS AND CASH BLENDED TO SMOOTH OUT THE HIGHS AND LOWS
The Fortis Asset Allocation Fund at fiscal year end was targeted at 60% equities
with remaining assets in fixed income instruments. The asset balance is adjusted
as the investment outlook changes. For most of the fiscal year, equities
represented 65% of the total portfolio, but the equity ratio was reduced in
August 1999. In the view of the Asset Allocation committee, the outlook for
bonds has become somewhat more attractive given the back up in interest rates
and the expectation that equities could see more vulnerability to the higher
interest rate levels.
During the year, the portfolio posted a return of 22.96% for Class A before
sales charge. Over the same period, the S&P 500 Index returned 39.80% and the
Lehman Brothers Aggregate Bond Index returned 0.80%. Within the equity portion
of the portfolio, the technology and service sectors represent the largest
weightings. Utilities, primarily telecommunications companies, and energy
holdings represent other overweightings in the portfolio. Larger capitalization
growth stocks with leading or dominant market positions are mainly utilized in
the equity portion of this account.
On the fixed income side, improvement in global economies in the beginning of
1999 contributed to the improved liquidity in non-Treasury securities,
particularly in the corporate market. Stronger demand for debt obligations that
command a yield premium to U.S. Treasuries, along with Korea's upgrade by the
rating agencies, generated good momentum that caused the yield premium, or
spread, to tighten. As concerns about inflation developed, Treasury yields rose
more than 1% in some maturities reflecting anticipation of a tighter monetary
policy. The 30-year yields increased 0.88% to 5.97% and non-government yield
spread widened as a result.
In the beginning of the year we lengthened the duration of the fixed income
portion of the portfolio in relation to the benchmark and increased our exposure
to corporate bonds at the expense of U.S. Treasuries and Mortgage backed
securities. Once it became apparent that the Federal Reserve was reevaluating
last fall's easing, we reduced our portfolio duration to that of the benchmark
and reduced our overweighting in corporate bonds to a neutral position.
Looking forward, the Federal Reserve is likely to significantly affect the
outlook for the economy and corporate profits as well as the outlook for various
asset classes. Recent Federal Reserve tightenings have spawned a cautionary
atmosphere. While further Federal Reserve tightenings may reduce growth
expectations, it would also reduce inflationary expectations. On the equity side
of the equation, a focus on solid growth opportunities appears to be a rewarding
strategy in the period ahead.
VALUE OF $10,000 INVESTED SEPTEMBER 1, 1989
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
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<CAPTION>
LEHMAN BROTHERS ASSET ALLOCATION PORTFOLIO
<S> <C> <C> <C>
Aggregate Bond Index*** S&P 500**** Class A
9/1/89 $10,000 $10,000 $9,525
90 $10,723 $9,502 $9,268
91 $12,291 $12,056 $11,283
92 $13,949 $13,015 $12,616
93 $15,480 $14,985 $14,046
94 $15,246 $15,802 $14,572
95 $16,969 $19,192 $17,364
96 $17,666 $22,781 $18,186
97 $19,433 $32,049 $22,664
98 $21,486 $34,645 $23,278
99 $21,657 $48,441 $28,621
Asset Allocation Portfolio
Average Annual Total Return
1 Year 5 Year 10 Year
Class A* +17.12% +13.35% +11.09%
Class A** +22.96% +14.46% +11.63%
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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, these figures do not represent actual
performance that would have been achieved by investing as
described above.
** These are the portfolio's 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.
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TEN LARGEST STOCK PORTFOLIO CHANGES FOR THE PERIOD ENDED 8/31/99
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ADDITIONS: Potomac Electric Power Co. Hartford Life, Inc.
Cabletron Systems, Inc. Royal Dutch Petroleum Co. Class A
CBS Corp. NY Shares MCI Worldcom, Inc.
JDS Uniphase Corp. Tyco International Ltd. Monsanto Co.
Marsh & McLennan Companies, Inc. ELIMINATIONS: Mylan Laboratories, Inc.
Merrill Lynch & Co., Inc. Costco Companies, Inc. Pharmacia & Upjohn, Inc.
NCR Corp. Eli Lilly & Co. Philip Morris
PE Corp - PE Biosystems Group Fannie Mae Companies, Inc.
Warner-Lambert Co.
</TABLE>
3
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PORTFOLIO COMPOSITION BY INDUSTRY AS OF 8/31/99
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
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Other 38.1%
Financial Services 14.0%
Oil-Crude Petroleum and Gas 10.6%
Insurance 5.9%
Telephone Services 5.4%
Business Services 5.3%
Computer-Software 4.9%
Banks 4.6%
Office Equipment and Supplies 3.3%
Automobile Manufacturers 3.1%
Telecommunication Equipment 3.0%
Cash Equivalents/Receivables 1.8%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/99
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<CAPTION>
Percent of
Stocks Net Assets
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<C> <S> <C>
1. Citigroup, Inc. 3.6%
2. Exxon Corp. 3.6%
3. American International Group, Inc. 2.6%
4. Fannie Mae 2.3%
5. Hewlett-Packard Co. 2.2%
6. Bank of America Corp. 2.1%
7. Chase Manhattan Corp. 2.0%
8. Phillips Petroleum Co. 2.0%
9. Ford Motor Co. 1.8%
10. Baxter International, Inc. (with rights) 1.7%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +23.20% +14.22%
Class B sharesDiamond Diamond +19.60% +13.71%
Class C sharesDiamond +23.18% +14.24%
Class C sharesDiamond Diamond +22.18% +14.24%
Class H sharesDiamond +23.18% +14.24%
Class H sharesDiamond Diamond +19.58% +13.73%
</TABLE>
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<C> <S>
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, 3.00% if redeemed in year three or four, 2.00% if redeemed in year
five and 1.00% if redeemed in year six (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, 1999.
+ Shares were first offered to the public January 2, 1996.
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FORTIS VALUE FUND
QUALITY STOCKS, INEXPENSIVELY PRICED
For the twelve months ended August 31, 1999, the Barra Value Index advanced
34.04% while the Fortis Value Fund portfolio returned 24.10% for Class A before
sales charge.
The fund's primary strategy is to invest in undervalued companies with
accelerating growth, where we anticipate a company's growth rate to rise over
time. To the extent that we cannot find undervalued companies with accelerating
earnings, we focus on our secondary criteria, inexpensively valued growth. We
continue to maintain adequate diversification across market sectors and remain
focused on stock selection.
Texas Instruments was one of the fund's better performing stocks during the past
year. Recently we have added Pepsi Bottling Group to the portfolio, a company
which we feel has relatively attractive prospects at a reasonable valuation.
Looking ahead, we see the economy in the late stages of the current expansion
and we expect to see slower economic growth. We believe that the health care
sector is a logical place for us to invest in this kind of environment because
companies in the business of providing goods and services used in the delivery
of health care tend to enjoy relatively stable demand.
Rising interest rates or slowing global growth could negatively affect the
fund's performance. We continue to monitor the effects of interest rates and the
economy on the fund's holdings.
We remain focused on investing in undervalued companies with accelerating growth
or inexpensively valued growth. We believe that this investment philosophy will
provide good returns to shareholders for the long term.
VALUE OF $10,000 INVESTED JANUARY 2, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** VALUE FUND CLASS A BARRA VALUE****
<S> <C> <C> <C>
1/2/96 $10,000 $9,525 $10,000
96 $10,752 $10,239 $10,686
97 $15,126 $13,174 $14,946
98 $16,352 $12,843 $14,889
99 $22,863 $15,938 $19,957
VALUE FUND
AVERAGE ANNUAL TOTAL RETURN
SINCE
1 YEAR JANUARY 2, 1996@
CLASS A* +18.21% +13.56%
CLASS A** +24.10% +15.08%
</TABLE>
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<C> <S>
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 portfolio's 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.
**** The Barra Value Index is a capitalization-weighted index of
all the stocks in the Standard & Poor's 500 that have low
price-to-book ratios. It is designed so that approximately
50% of the S&P 500 market capitalization is in the Value
Index. Going forward, the fund will use the S & P Barra
Value Index because it is better suited for the investment
strategy of the fund.
@ Date shares were first offered to the public.
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 8/31/99
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<S> <C>
ADDITIONS: ELIMINATIONS:
Bank of America Corp. CMS Energy Corp.
Citigroup, Inc. Cooper Industries, Inc.
Exxon Corp. Fort James Corp.
Ford Motor Co. Hubbell, Inc. Class B
Freddie Mac McGraw-Hill Companies, Inc.
Hewlett-Packard Co. Mead Corp.
MCI WorldCom, Inc. Newell Co.
Philip Morris Companies, Inc. S & P 500 Depositary Receipt
Phillips Petroleum Co. Tenet Healthcare Corp.
Raytheon Co. Class B Wang Labs, Conv., Ser B 6.50%
</TABLE>
4
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COMPOSITION BY INDUSTRY AS OF 8/31/99
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 36.7%
Oil-Crude Petroleum and Gas 11.5%
Telephone Services 10.2%
Natural Gas Transmissions 6.5%
Food 6.3%
Drugs 5.6%
Utilities-Electric 5.1%
Insurance 5.0%
Financial Services 3.4%
Banks 3.3%
Publishing 3.3%
Cash Equivalents/Receivables 3.1%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/99
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- ------------------------------------------------------------------------------------------------
<C> <S> <C>
1. Enron Corp. 3.3%
2. Mobil Corp. 2.5%
3. SBC Communications, Inc. 2.3%
4. McGraw Hill Companies, Inc. 2.2%
5. Ameritech Corp. 2.1%
6. American International Group, Inc. 2.0%
7. Quaker Oats Co. 2.0%
8. American Home Products Corp. 2.0%
9. General Electric Co. 2.0%
10. Pharmacia and UpJohn, Inc. 1.9%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +16.08% +13.12%
Class B sharesDiamond Diamond +12.48% +12.59%
Class C sharesDiamond +16.00% +13.10%
Class C sharesDiamond Diamond +15.00% +13.10%
Class H sharesDiamond +16.00% +13.10%
Class H sharesDiamond Diamond +12.40% +12.57%
</TABLE>
<TABLE>
<C> <S>
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, 3.00% if redeemed in year three or four, 2.00% if redeemed in year
five and 1.00% if redeemed in year six (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, 1999.
+ Shares were first offered to the public January 2, 1996.
</TABLE>
FORTIS GROWTH & INCOME FUND
CONSERVATIVE GROWTH WITH PERIODIC DIVIDENDS
The year ended August 31, 1999, proved to be a volatile year in the equity
markets. Asian economic problems and domestic liquidity problems triggered three
rate cuts by the Federal Reserve last fall. This easier monetary environment
produced a surge in the US stock market from last autumn's depressed levels.
However, concerns continued to build that a strong economy would unleash
inflationary forces that could undermine the market's lofty valuations. The
Federal Reserve responded to the inflationary concerns by raising rates twice
over the summer, with some fearing further increases in the future.
Over this period, the Growth and Income Class A shares with no sales charge
registered a gain of 16.84% which compares to a 39.80% rise in the S&P 500
Index. This Index is comprised of the weighted average of 500 of the largest US
companies as calculated by Standard & Poors. The fund's under performance is due
primarily to its more conservative investment stance and to a significantly
below market weighting in the technology sector. Technology has been a market
leader during this fiscal year, but this sector provides virtually no income
growth.
We continue our strategy to invest in companies with above average dividend
yields so as to produce current yield above the S&P 500. In light of the fund's
under performance, it seems prudent to place more emphasis on the growth of
dividends over time as opposed to current yields. Such a strategy should allow
greater representation in the growth sectors of the economy. The Growth and
Income Fund, however, will continue to retain a somewhat more conservative
stance than the overall market.
At fiscal year end, the fund's largest concentrations are in the utility,
financial and energy sectors. The technology sector is likely to increase its
weighting in future periods as dividend growth receives greater emphasis.
Looking forward, one must recognize the high valuations being placed on the
stock market and therefore should be cautious towards factors that could
negatively affect these valuations. However, we remain positive on the US
economy's long term outlook in a rapidly changing world. An investment strategy
dedicated to consistent earnings and dividend growth should prove rewarding in
the periods ahead.
VALUE OF $10,000 INVESTED JANUARY 2, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** GROWTH & INCOME FUND CLASS A
<S> <C> <C>
1/2/96 $10,000 $9,525
96 $10,752 $9,916
97 $15,126 $12,792
98 $16,352 $13,151
99 $22,863 $15,366
GROWTH & INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
SINCE
1 YEAR JANUARY 2, 1996@
CLASS A* +11.29% +12.43%
CLASS A** +16.84% +13.94%
</TABLE>
<TABLE>
<C> <S>
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 portfolio's 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.
</TABLE>
TEN LARGEST STOCK PORTFOLIO CHANGES FOR THE PERIOD ENDED 8/31/99
<TABLE>
<S> <C>
ADDITIONS: ELIMINATIONS:
Aon Corp. Clorox Co.
AT&T Corp. Duke Energy Corp.
Baker Hughes, Inc. Eastman Kodak Co.
Conoco, Inc. Class B Endesa S.A. ADR
Illinova Corp. New Plan Excel Realty Trust
J.P. Morgan & Co., Inc. Glaxo Wellcome plc ADR
Potomac Electric Power Co. Heinz (H.J.) Co.
Qwest Trends Trust, Conv. 5.75% Household International, Inc.
SYSCO Corp. Merck & Co., Inc.
Tribune Co., Conv. 2.00% Rite Aid Corp.
</TABLE>
5
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 8/31/99
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 46.6%
Oil-Crude Petroleum and Gas 8.2%
Computer-Communication Equipment 6.6%
Electronic-Semiconductor and Capacitor 5.3%
Drugs 5.3%
Broadcasting 4.7%
Business Services 4.7%
Utilities-Electric 4.5%
Telecommunication Equipment 4.1%
Telephone Services 3.9%
Natural Gas Transmissions 3.8%
Cash Equivalents/Receivables 2.3%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/99
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- ------------------------------------------------------------------------------------------------
<C> <S> <C>
1. American International Group, Inc. 2.4%
2. AES Corp. 2.3%
3. Interpublic Group of Companies, Inc. 2.3%
4. General Electric Co. 2.1%
5. Motorola, Inc. 2.0%
6. Tyco International Ltd. 2.0%
7. Williams Companies, Inc. 2.0%
8. NCR Corp. 1.9%
9. Enron Corp. 1.9%
10. JDS Uniphase 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 +36.94% +18.78%
Class B sharesDiamond Diamond +33.34% +18.59%
Class C sharesDiamond +36.87% +18.77%
Class C sharesDiamond Diamond +35.87% +18.77%
Class H sharesDiamond +36.91% +18.79%
Class H sharesDiamond Diamond +33.31% +18.60%
</TABLE>
<TABLE>
<C> <S>
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, 3.00% if redeemed in year three or four, 2.00% if redeemed in year
fiive and 1.00% if redeemed in year six (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, 1999.
+ Since November 14, 1994 -- Date shares were first offered to
the public.
</TABLE>
FORTIS CAPITAL FUND
LONG-TERM GROWTH THROUGH LARGER, ESTABLISHED COMPANIES
The year ended August 31, 1999, proved to be quite a volatile period for
equities. Buffeted by world economic problems centered in Asia and domestic
liquidity problems, equities declined during the first part of the fiscal year.
However, as the Federal Reserve responded with a significantly easier monetary
policy, equities surged for much of the rest of the period. Recent concerns over
rekindled inflationary expectations, underlined by two recent rate hikes by the
Federal Reserve, caused equities to retreat. Further interest rate increases
appear possible given the Federal Reserve's resolve to dampen any inflationary
signs. The capital markets will have to grapple with those concerns in the
period ahead. During the fiscal year, the Class A shares with no sales charge
reported a gain of 37.88% which compares to an increase of 39.80% for the S&P
500 Index.
Fortis Capital Fund continues to emphasize large capitalization growth stocks,
and is well diversified among industry sectors. Companies included in the
portfolio typically hold leading or dominant positions in their respective
industry. The portfolio is closely monitored as to the continued forward
progress of its holdings and changes are made accordingly, if necessary.
Currently, the technology and services sectors have the largest weightings in
the portfolio, as the outlook for the companies held in these sectors continue
to be promising. Energy holdings are also above market weightings in view of the
positive outlook for energy demand and pricing. The financial sector has been
reduced in view of the recent rise in interest rates.
Looking ahead, further moves if made by the Federal Reserve will likely affect
the outlook for the economy and corporate profits. While Federal Reserve action
could dampen growth expectations it would also reduce inflationary expectations.
In this environment, we feel a rewarding investment strategy will be to focus on
solid above-average growth opportunities.
VALUE OF $10,000 INVESTED SEPTEMBER 1, 1974
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500 *** CAPITAL FUND CLASS A
<S> <C> <C> <C> <C>
9/1/74 $10,000 $9,525
75 $12,611 $11,043
76 $15,529 $12,818
77 $15,252 $12,315
78 $17,156 $15,598
79 $19,150 $17,240
80 $22,622 $24,569
81 $23,817 $27,730
82 $24,606 $32,837
83 $35,402 $50,894
84 $37,594 $49,188
85 $44,585 $56,790
86 $61,926 $81,506
87 $83,313 $103,670
88 $68,516 $79,904
89 $95,249 $114,944
90 $90,505 $108,230
91 $114,836 $139,014
92 $123,963 $153,977
93 $142,727 $166,111
94 $150,510 $183,646
95 $182,798 $223,120
96 $216,992 $230,619
97 $305,261 $310,357
98 $329,993 $315,204
99 $461,395 $434,598
CAPITAL FUND
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR 25 YEARS
CLASS A* + 31.33% + 17.65% + 13.67% + 16.28%
CLASS A** + 37.88% + 18.80% + 14.22% + 16.51%
</TABLE>
<TABLE>
<C> <S>
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, these figures do not represent actual
performance that would have been achieved by investing as
described above.
** These are the portfolio's 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.
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 8/31/99
<TABLE>
<S> <C>
ADDITIONS: ELIMINATIONS:
Cabletron Systems, Inc. Cardinal Health, Inc.
CBS Corp. Costco Companies, Inc.
JDS Uniphase Corp. Eli Lilly & Co.
Marsh & McLennan Companies, Inc. Fannie Mae
Merrill Lynch & Co., Inc. Hartford Life, Inc. Class A
NCR Corp. MCI Worldcom, Inc.
PE Corp - PE Biosystems Group Monsanto Co.
Potomac Electric Power Co. Mylan Laboratories, Inc.
Royal Dutch Petroleum Co. NY Shares Unisys Corp.
Tyco International Ltd. Warner-Lambert Co.
</TABLE>
6
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 8/31/99
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 40.8%
Electronic-Semiconductor and Capacitor 11.4%
Computer-Software 11.2%
Cash Equivalents/Receivables 7.0%
Medical Supplies 4.9%
Advertising-Public Relations 4.4%
Telecommunication Equipment 4.0%
Drugs 3.9%
Broadcasting 3.5%
Financial Services 3.2%
Printing 2.9%
Oil-Crude Petroleum and Gas 2.8%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/99
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- ------------------------------------------------------------------------------------------------
<C> <S> <C>
1. Waters Corp. 2.7%
2. MedImmune, Inc. 2.4%
3. Univision Communications, Inc. 2.2%
4. National Instruments Corp. 1.9%
5. Young & Rubicam, Inc. 1.7%
6. LSI Logic Corp. 1.7%
7. Xilinx, Inc. 1.7%
8. MiniMed, Inc. 1.6%
9. SDL, Inc. 1.6%
10. Valassis Communications, Inc. 1.6%
</TABLE>
CLASS B, C, H AND Z AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +38.98% +16.27%+
Class B sharesDiamond Diamond +35.38% +16.06%+
Class C SharesDiamond +38.98% +16.27%+
Class C SharesDiamond Diamond +37.98% +16.27%+
Class H sharesDiamond +39.00% +16.28%+
Class H sharesDiamond Diamond +35.40% +16.07%+
Class Z shares +40.49% +15.03%++
</TABLE>
<TABLE>
<C> <S>
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, 3.00% if redeemed in year three or four, 2.00% if redeemed in year
five and 1.00% if redeemed in year six (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, 1999.
+ Since November 14, 1994 -- Date shares were first offered to
the public.
++ Since March 1, 1996 -- Date shares were first offered to the
public.
</TABLE>
FORTIS GROWTH FUND
MEDIUM-SIZED COMPANIES POISED TO BE TOMORROW'S LEADERS
During the year ended August 31, 1999, the Fortis Growth Fund posted a 40.00%
return for Class A before sales charge, versus the S&P Midcap 400 which posted a
41.55% return. This index is the most relevant comparison for the Growth Fund,
as the Funds primary investment focus is mid capitalization stocks, typically
those with a market capitalization between $1 billion and $8 billion.
During the period under review the funds modest underperformance was
attributable to its underweight position in cyclical stocks which significantly
outperformed during the second quarter. The Morgan Stanley Cyclical index rose
19.6% during the second quarter versus the S&P Midcap index return of 13.6%. In
addition to cyclical stocks the fund continues to be underweight utilities and
financial stocks. The fund currently has a slightly overweight position in
technology, where we continue to find new and innovative companies especially in
telecommunications and semiconductors. Stocks such as Xilinx and Comverse
Technology are two stocks we currently favor. Additionally, we see the recent
rebound in energy prices as a positive catalyst for many of the mid cap energy
stocks. Within energy we favor Transocean Offshore which is a global contract
driller for oil and gas and Apache Corp which is an independent exploration and
production company. We continue to maintain a market weighting in health care
favoring names such as Minimed and Medimune.
Going forward, we expect steady domestic economic growth, moderate inflation,
and stable interest rates to provide a positive backdrop for U.S. stock prices.
U.S. corporate profits should also see an added benefit from an economic rebound
in Asia. On a relative basis, be believe that mid cap growth stocks are
currently more attractive than their larger cap brethren and we expect the
valuation gap that has developed over the past three years to narrow.
VALUE OF $10,000 INVESTED SEPTEMBER 1, 1989
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** GROWTH FUND S&P 400 MIDCAP****
CLASS A
<S> <C> <C> <C>
9/1/89 10,000 9,525 10,000
90 9,502 8,816 8,943
91 12,056 12,481 12,331
92 13,015 13,071 13,337
93 14,985 16,035 16,476
94 15,802 15,431 17,233
95 19,192 19,584 20,767
96 22,781 20,386 23,236
97 32,049 25,892 31,894
98 34,645 23,150 28,902
99 48,441 32,410 40,909
GROWTH FUND
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR
CLASS A* + 33.35% +14.88% +12.48%
CLASS AA** + 40.00% +16.00% +13.03%
</TABLE>
<TABLE>
<C> <S>
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, these figures do not represent actual
performance that would have been achieved by investing as
described above.
** These are the portfolio's 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.
**** An unmanaged index of common stocks that measures the
performance of the mid-range sector of the U.S. stock
market. Going forward the fund will use the S&P 400 Midcap
Index because it is better suited for the investment
strategy of the fund.
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 8/31/99
<TABLE>
<S> <C>
ADDITIONS: ELIMINATIONS:
CIENA Corp. BMC Software, Inc.
Electronics for Imaging, Inc. Cisco Systems, Inc.
Exodus Communications, Inc. HBO & Co.
LSI Logic Corp. Life Re Corp.
MedImmune, Inc. Medtronic, Inc.
MiniMed, Inc. Microsoft Corp.
QLT PhotoTherapeutics, Inc. Solectron Corp.
SDL, Inc. Staples, Inc.
Valassis Communications, Inc. Uniphase Corp.
Xilinx, Inc. Watson Pharmaceuticals, Inc.
</TABLE>
7
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 8/31/99
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 41.4%
Computer-Software 13.8%
Electronic-Semiconductor and Capacitor 6.4%
Drugs 6.2%
Electronic Components 6.1%
Cash Equivalents/Receivables 6.1%
Broadcasting 4.1%
Business Services 4.0%
Medical Supplies 4.0%
Telecommuncation Equipment 2.9%
Financial Services 2.5%
Computer-Hardware 2.5%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/99
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- ------------------------------------------------------------------------------------------------
<C> <S> <C>
1. TriQuint Semiconductor, Inc. 1.9%
2. Harmonic, Inc. 1.9%
3. Mercury Interactive Corp. 1.7%
4. MiniMed, Inc. 1.5%
5. JAKKS Pacific, Inc. 1.5%
6. Macrovision Corp. 1.5%
7. Galileo Technology Ltd. 1.4%
8. Emulex Corp. 1.2%
9. Advanced Digital Information Corp. 1.2%
10. Insight Enterprises, Inc. 1.2%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +79.35% +17.67%
Class B sharesDiamond Diamond +75.75% +17.47%
Class C sharesDiamond +79.33% +17.69%
Class C sharesDiamond Diamond +78.33% +17.69%
Class H sharesDiamond +79.33% +17.69%
Class H sharesDiamond Diamond +75.73% +17.48%
</TABLE>
<TABLE>
<C> <S>
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, 2.00% if
redeemed in year five and 1.00% if redeemed in year six (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 With CDSC. Assumes redemption on August 31, 1999.
Diamond
+ Since November 14, 1994 -- Date shares were first offered to
the public.
</TABLE>
FORTIS CAPITAL APPRECIATION PORTFOLIO
OPPORTUNITY THROUGH AMERICA'S ENTREPRENEURS
During the 12 month period ending August 31, 1999, the fund significantly
outperformed both the Russell 2000 and the Russell 2000 growth indices -- the
widely used benchmark for small capitalization portfolios. The Fund posted an
80.27% return for Class A before sales charge during the period versus a 28.37%
return for the Russell 2000 and a 43.33% return for the Russell 2000 growth
index. One fifth of the fund's total return was a result of investments in
Initial Public Offerings. The fund was ranked in the top 4 percentile of all
small cap growth funds for the trailing 12 month period.
The outperformance of the fund versus its benchmark is attributable to superior
stock selection, especially in technology. Within technology, we continue to
favor the telecommunications stocks whose products and services are critical to
the transmission of voice and data over the Internet. Stocks we see benefiting
from the build-out of the Internet infrastructure are Galileo Technology, which
designs and manufactures digital semiconductors devices that perform critical
functions for network systems and Harmonic, Inc., which manufactures digital and
fiber optic systems for delivering video, audio and data services over cable and
wireless networks. Additionally, we continue to favor wireless component
companies such as R. F. Micro Devices and Alpha Industries, which should benefit
from the increased use of wireless communication devices.
Going forward we expect small cap stocks to perform well, given the current
attractive relative valuations. We continue to expect moderate economic growth
and stable interest rates to support solid earnings growth for small cap stocks.
We are confident the fund is positioned to continue to perform well going
forward.
VALUE OF $10,000 INVESTED SEPTEMBER 1, 1989
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
9/1/89 RUSSEL 2000 INDEX*** S&P 500**** CAPITAL APPRECIATION PORTFOLIO CLASS A
$10,000 $10,000 $9,525
<S> <C> <C> <C>
90 $7,854 $9,502 $9,189
91 $9,807 $12,056 $11,950
92 $10,926 $13,015 $11,983
93 $14,432 $14,985 $16,299
94 $16,278 $15,802 $15,218
95 $19,884 $19,192 $21,351
96 $22,043 $22,781 $24,385
97 $28,416 $32,049 $22,460
98 $22,954 $34,645 $19,392
99 $29,466 $48,441 $34,958
CAPITAL APPRECITATION PORTFOLIO
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR
CLASS A* + 71.70% + 16.95% + 13.33%
CLASS A** + 80.27% + 18.10% + 13.89%
</TABLE>
<TABLE>
<C> <S>
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, these figures do not represent actual
performance that would have been achieved by investing as
described above.
** These are the portfolio's total returns during the period,
including reinvestment of all dividend and capital gains
distributions without adjustment for sales charge.
*** An unmanaged index of common stocks of the smallest 2000
companies in the Russell 3000 index, which represents
approximately 11% of the Russell 3000 Index. Going forward
the portfolio will use the Russell 2000 Index because it is
better suited for the investment strategy of the portfolio.
**** This is an unmanaged index of 500 common stocks.
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 8/31/99
<TABLE>
<S> <C>
ADDITIONS: ELIMINATIONS:
Advanced Digital Information Acxiom Corp.
Corp. Apollo Group, Inc. Class A
Emulex Corp. Cisco Systems, Inc.
Galileo Technology Ltd. Dollar Tree Stores, Inc.
Harmonic, Inc. Intermedia
JAKKS Pacific, Inc. Communications, Inc.
Jones Pharma, Inc. Legato Systems, Inc.
Macrovision Corp. McLeodUSA, Inc. Class A
MiniMed, Inc. STERIS Corp.
TriQuint Semiconductor, Inc. Sterling Commerce, Inc.
Young Broadcasting, Inc. VERITAS Software Corp.
</TABLE>
8
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO
Schedule of Investments
August 31, 1999
COMMON STOCKS-59.27%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- -------- ------------ ------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-1.58%
96,000 Interpublic Group of Companies,
Inc............................. $ 2,618,884 $ 3,804,000
------------ ------------
AEROSPACE AND EQUIPMENT-0.57%
30,000 Boeing Co......................... 1,427,166 1,359,375
------------ ------------
AUTOMOBILE AND MOTOR VEHICLE
PARTS-0.00%
250 Highwaymaster Communications,
Inc. (Warrants) (a) (e)......... 4,547 62
------------ ------------
BANKS-0.72%
52,000 Mellon Bank Corp.................. 1,748,200 1,735,500
------------ ------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-0.41%
11,700 Amgen, Inc. (a) (with rights)..... 963,189 973,294
------------ ------------
BROADCASTING-2.91%
41,000 AMFM, Inc. (a).................... 2,157,220 2,019,250
42,000 AT&T Corp. - Liberty Media
Group (a)....................... 1,331,744 1,344,000
78,000 Sinclair Broadcasting
Group (a)....................... 1,617,481 1,267,500
31,000 USA Networks, Inc. (a)............ 1,239,781 1,391,125
23,000 Viacom, Inc. Class B (a).......... 679,765 967,437
------------ ------------
7,025,991 6,989,312
------------ ------------
BROKERAGE AND INVESTMENT-0.99%
32,000 Merrill Lynch & Co., Inc.......... 2,277,818 2,388,000
------------ ------------
BUILDING MATERIALS-0.82%
70,000 Masco Corp........................ 1,931,776 1,981,875
------------ ------------
BUSINESS SERVICES-2.95%
25,000 Automatic Data Processing, Inc.... 1,159,548 982,812
42,000 Ecolab, Inc....................... 1,845,022 1,577,625
24,000 First Data Corp................... 1,091,083 1,056,000
18,500 Fiserv, Inc. (a).................. 398,514 570,031
28,800 Tyco International Ltd............ 2,386,133 2,917,806
------------ ------------
6,880,300 7,104,274
------------ ------------
CABLE TELEVISION-0.40%
14,500 MediaOne Group, Inc. (a).......... 1,099,207 953,375
------------ ------------
CHEMICALS-0.29%
11,000 Du Pont (E.I.) de Nemours & Co.... 668,125 697,102
------------ ------------
CHEMICALS-SPECIALTY-0.19%
9,300 Minerals Technologies, Inc........ 353,966 460,350
------------ ------------
COMPUTER-COMMUNICATION
EQUIPMENT-3.96%
131,500 Cabletron Systems, Inc. (a)....... 1,878,081 2,210,844
23,000 Cisco Systems, Inc. (a)........... 513,236 1,559,687
9,100 Dell Computer Corp. (a)........... 406,685 444,194
16,000 Equant NV NY Shares (a)........... 1,184,000 1,409,000
61,000 NCR Corp. (a)..................... 2,945,939 2,668,750
15,600 Sun Microsystems, Inc. (a)........ 1,228,419 1,240,200
------------ ------------
8,156,360 9,532,675
------------ ------------
COMPUTER-HARDWARE-0.13%
3,300 Gateway, Inc. (a)................. 273,993 319,894
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- -------- ------------ ------------
<C> <S> <C> <C>
COMPUTER-SOFTWARE-1.37%
17,500 Legato Systems, Inc. (a).......... $ 710,713 $ 753,594
27,500 Microsoft Corp. (a)............... 1,134,047 2,545,469
------------ ------------
1,844,760 3,299,063
------------ ------------
CONSUMER GOODS-1.23%
36,000 Colgate-Palmolive Co.............. 1,555,064 1,926,000
18,000 Kimberly-Clark Corp............... 941,968 1,024,875
------------ ------------
2,497,032 2,950,875
------------ ------------
COSMETICS AND SUNDRIES-0.35%
20,400 International Flavors &
Fragrances, Inc................. 968,955 831,300
------------ ------------
DIVERSIFIED COMPANIES-0.69%
17,500 Minnesota Mining and Manufacturing
Co.............................. 1,511,618 1,653,750
------------ ------------
DRUGS-3.57%
42,900 American Home Products Corp....... 1,947,793 1,780,350
32,900 Biovail Corp.
International (a)............... 1,585,565 1,902,031
28,000 Bristol-Myers Squibb Co........... 1,931,297 1,970,500
43,000 Forest Laboratories, Inc. (a)..... 1,897,387 2,082,812
8,300 Johnson & Johnson................. 843,347 848,675
------------ ------------
8,205,389 8,584,368
------------ ------------
ELECTRIC-PRODUCTS-0.71%
11,600 Honeywell, Inc.................... 1,100,751 1,316,600
14,000 Molex, Inc. Class A............... 383,250 393,750
------------ ------------
1,484,001 1,710,350
------------ ------------
ELECTRICAL EQUIPMENT-1.22%
26,200 General Electric Co............... 2,061,259 2,942,587
------------ ------------
ELECTRONIC-CONTROLS AND
EQUIPMENT-0.39%
9,000 Hewlett-Packard Co................ 842,972 948,375
------------ ------------
ELECTRONIC-SEMICONDUCTOR AND
CAPACITOR-3.27%
12,000 Intel Corp........................ 881,000 986,250
25,000 JDS Uniphase Corp................. 1,895,675 2,651,562
32,000 Motorola, Inc..................... 2,425,849 2,952,000
15,600 Texas Instruments, Inc............ 423,001 1,280,175
------------ ------------
5,625,525 7,869,987
------------ ------------
FINANCIAL SERVICES-1.71%
9,800 American Express Co............... 1,238,139 1,347,500
5,700 J.P. Morgan & Co., Inc............ 816,587 736,369
28,000 Marsh & McLennan Companies,
Inc............................. 2,088,889 2,038,750
------------ ------------
4,143,615 4,122,619
------------ ------------
FOOD-0.73%
24,000 Campbell Soup Co.................. 1,077,458 1,060,500
14,000 Groupe Danone ADR................. 434,000 694,750
------------ ------------
1,511,458 1,755,250
------------ ------------
HEALTH CARE SERVICES-1.86%
48,000 Columbia/HCA Healthcare Corp...... 1,150,669 1,182,000
58,000 Foundation Health Systems,
Inc. (a)........................ 1,009,495 739,500
140,000 MedPartners, Inc. (a)............. 986,118 980,000
</TABLE>
9
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
August 31, 1999
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- -------- ------------ ------------
<C> <S> <C> <C>
26,000 United HealthCare Corp............ $ 1,414,947 $ 1,581,125
------------ ------------
4,561,229 4,482,625
------------ ------------
HOTEL AND GAMING-0.50%
41,600 Sun International Hotels
Ltd. (a)........................ 1,683,879 1,211,600
------------ ------------
INSURANCE-1.92%
25,000 Ace Ltd........................... 829,484 535,937
37,000 American International Group,
Inc............................. 1,466,661 3,429,437
19,500 Aon Corp.......................... 890,910 650,812
------------ ------------
3,187,055 4,616,186
------------ ------------
MACHINERY-OIL AND WELL-0.92%
32,000 Baker Hughes, Inc................. 1,105,186 1,088,000
24,000 Halliburton Co.................... 1,176,150 1,113,000
------------ ------------
2,281,336 2,201,000
------------ ------------
MEDIA-2.27%
50,000 CBS Corp. (a)..................... 2,153,305 2,350,000
21,500 Gannett Co., Inc.................. 1,484,615 1,460,656
27,800 Time Warner, Inc.................. 845,819 1,648,888
------------ ------------
4,483,739 5,459,544
------------ ------------
MEDICAL TECHNOLOGY-0.26%
8,100 Medtronic, Inc. (with rights)..... 223,187 633,825
------------ ------------
NATURAL GAS TRANSMISSIONS-2.25%
62,000 Enron Corp........................ 1,706,168 2,596,250
68,000 Williams Companies, Inc........... 2,474,702 2,805,000
------------ ------------
4,180,870 5,401,250
------------ ------------
OIL AND GAS FIELD SERVICES-0.72%
12,000 Devon Energy Corp. (a)............ 483,184 463,500
19,000 Schlumberger Ltd.................. 984,018 1,268,250
------------ ------------
1,467,202 1,731,750
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-5.09%
40,000 Burlington Resources, Inc......... 1,831,967 1,672,500
30,000 Conoco, Inc. Class A.............. 775,030 802,500
60,711 Conoco, Inc. Class B.............. 1,438,284 1,631,596
78,500 Enron Oil and Gas Co.............. 1,639,186 1,874,188
21,000 Exxon Corp........................ 1,534,032 1,656,375
27,500 Phillips Petroleum Co............. 1,452,219 1,402,500
37,000 Royal Dutch Petroleum Co. NY
Shares 1,908,577 2,289,375
14,500 Texaco, Inc....................... 851,414 920,750
------------ ------------
11,430,709 12,249,784
------------ ------------
PAPER-0.29%
12,600 Champion International Corp....... 787,060 693,000
------------ ------------
PRECISION INSTRUMENTS-TEST,
RESEARCH-0.86%
30,000 PE Corp. - PE Biosystems Group.... 1,475,465 2,064,375
------------ ------------
PUBLISHING-0.52%
39,600 Reader's Digest Association, Inc.
Class A......................... 1,139,223 1,237,500
------------ ------------
RESTAURANTS AND FRANCHISING-0.28%
16,000 McDonald's Corp................... 577,085 662,000
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- -------- ------------ ------------
<C> <S> <C> <C>
RETAIL-DEPARTMENT STORES-0.43%
14,500 Kohl's Corp. (a).................. $ 142,038 $ 1,033,125
------------ ------------
RETAIL-DISCOUNT STORES-0.57%
31,000 Wal-Mart Stores, Inc.............. 833,917 1,373,688
------------ ------------
RETAIL-MISCELLANEOUS-0.22%
7,800 Electronic Arts, Inc. (a)......... 501,977 535,275
------------ ------------
RETAIL-SPECIALTY-1.13%
15,100 Home Depot, Inc................... 230,289 922,988
38,000 Tandy Corp. (with rights)......... 1,523,364 1,795,500
------------ ------------
1,753,653 2,718,488
------------ ------------
TELECOMMUNICATION EQUIPMENT-2.34%
12,000 Associated Group, Inc.
Class A (a)..................... 748,278 673,500
44,500 CIENA Corp. (a)................... 1,172,379 1,563,063
17,000 General Instrument Corp. (a)...... 801,220 836,188
24,000 Nextel Communications,
Inc. (a)........................ 1,272,506 1,387,500
14,000 Nokia Corp. Class A ADR........... 1,228,026 1,167,250
------------ ------------
5,222,409 5,627,501
------------ ------------
TELECOMMUNICATIONS-0.78%
14,500 Ameritech Corp.................... 1,095,175 915,313
23,000 Voicestream Wireless Corp. (a).... 1,000,762 948,750
------------ ------------
2,095,937 1,864,063
------------ ------------
TELEPHONE SERVICES-2.16%
20,000 ALLTEL Corp....................... 1,127,256 1,352,500
15,700 AT&T Corp......................... 722,285 706,500
12,800 Bell Atlantic Corp................ 746,904 784,000
22,400 Frontier Corp..................... 742,968 939,400
4,000 NEXTLINK Communications, Inc. (a) 197,605 201,500
6,000 Vodafone AirTouch plc ADR......... 308,401 1,203,375
------------ ------------
3,845,419 5,187,275
------------ ------------
UTILITIES-ELECTRIC-2.74%
57,000 AES Corp. (a)..................... 2,410,066 3,459,188
23,200 Illinova Corp..................... 742,052 739,500
11,000 Montana Power Co.................. 407,923 340,313
77,000 Potomac Electric Power Co......... 2,313,316 2,040,500
------------ ------------
5,873,357 6,579,501
------------ ------------
TOTAL COMMON STOCKS............... $123,872,852 $142,530,967
============ ============
</TABLE>
10
<PAGE>
ASSET BACKED SECURITIES-3.31%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
- ----------- ----------- ----------- ------------
<C> <S> <C> <C> <C>
COMMERCIAL LOANS-1.62%
$ 355,000 GMAC Commercial Mortgage Securities, Inc., 7.085% Ser
1997-C1 Class E 12-15-2010................................ Baa2* $ 356,594 $ 328,797
404,647 GS Mortgage Securities Corp. II Protective Life, 7.02% Ser
1996-PL Class A1 2-15-2027................................ Aaa* 404,622 399,115
641,702 Merrill Lynch Mortgage Investors, Inc., 6.76% Variable Rate
Ser 1995-C3 Class A1 12-26-2025........................... AAA 647,223 640,104
700,000 Midland Realty Acceptance Corp., 7.73% Variable Rate Ser
1996-C1 Class B 8-25-2028................................. AA 706,830 727,174
1,750,000 Mortgage Capital Funding, Inc., 7.90% Ser 1996-MC1 Class B
2-15-2006................................................. AA+ 1,763,536 1,798,107
---------- ------------
3,878,805 3,893,297
---------- ------------
HOUSING-0.83%
771,245 Green Tree Recreational, Equipment & Consumer Trust, 6.71%
Ser 1998-A Class A1H 5-15-2029............................ AAA 768,038 766,294
750,000 Money Store Home Improvement Trust, 7.41% Ser 1997-1
Class M1 5-15-2017........................................ AA 752,889 743,543
500,000 Money Store Residential Trust, 7.085% Ser 1997-I Class M1
7-15-2016................................................. AA 499,926 477,600
---------- ------------
2,020,853 1,987,437
---------- ------------
MULTI-FAMILY LOANS-0.54%
1,000,000 DLJ Mtg Acceptance Corp., 8.80% Multifamily Mtg Pass Thru
Certificate Ser 1993-12 Class B1 9-18-2003 NR 982,500 997,780
366,967 Fund America Structured Transactions, L.P., Collateralized
Note, 8.76% Ser 1996-1 Class A Principal Only (f)(h)...... Baa3* 273,989 297,931
---------- ------------
1,256,489 1,295,711
---------- ------------
WHOLE LOAN RESIDENTIAL-0.32%
790,561 Mid-State Trust, 7.54% Ser 6 Class A3 7-1-2035.............. AA 790,072 777,011
---------- ------------
TOTAL ASSET BACKED SECURITIES............................... $7,946,219 $ 7,953,456
========== ============
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-16.43%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
- ----------- ----------- --------------- ------------
<C> <S> <C> <C> <C>
AEROSPACE AND EQUIPMENT-0.40%
$ 500,000 Lockheed Martin Corp., 7.65% Deb 5-1-2016................... BBB+ $ 502,723 $ 484,184
500,000 Raytheon Co., 5.70% Note 11-1-2003.......................... BBB 501,874 476,454
--------------- ------------
1,004,597 960,638
--------------- ------------
AGRICULTURE-0.18%
500,000 Archer-Daniels-Midland, 6.625% Deb 5-1-2029................. AA- 497,609 442,345
--------------- ------------
AIR FREIGHT-0.19%
482,172 Federal Express, 7.50% Pass Thru Certificate Ser 1997-A
1-15-2018................................................. AAA 482,172 464,766
--------------- ------------
AIRLINES-0.20%
500,000 Delta Air Lines, 6.65% Medium Term Note 3-15-2004........... BBB- 499,652 482,770
--------------- ------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.19%
500,000 Dana Corp., 7.00% Note 3-1-2029............................. A- 494,071 450,050
--------------- ------------
AUTOMOBILE MANUFACTURERS-0.09%
250,000 Ford Motor Co., 6.375% Deb 2-1-2029......................... A 247,061 212,255
--------------- ------------
BANKS-1.86%
500,000 Bank Austria AG, 7.25% Sub Note 2-15-2017 (f)............... AA+ 499,110 479,351
250,000 Bank One Corp., 6.00% Sub Note 2-17-2009.................... A 249,091 227,292
500,000 Bankamerica Corp., 5.75% Sr Note 3-1-2004................... A+ 498,654 473,848
500,000 Citigroup, Inc., 6.20% Sr Note 3-15-2009.................... AA- 498,537 460,749
500,000 Keycorp Capital II, 6.875% Bond 3-17-2029................... BBB 493,779 424,821
250,000 LB Baden-Wuerttemberg, 7.625% Yankee Sub Note 2-1-2023...... AAA 282,081 253,952
500,000 Mellon Financial Co., 6.375% Sub Note 2-15-2010............. A 502,023 463,030
500,000 National City Corp., 6.875% Sub Note 5-15-2019.............. A- 499,127 456,228
</TABLE>
11
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
August 31, 1999
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
- ----------- ----------- --------------- ------------
<C> <S> <C> <C> <C>
$ 500,000 Providian National Bank, 6.75% Sr Note 3-15-2002............ BBB- $ 499,718 $ 493,381
500,000 St. Paul Bancorp, Inc., 7.125% Sr Note 2-15-2004............ BBB- 498,400 495,691
250,000 Swiss Bank Corp., 7.375% Sub Note 6-15-2017................. AA 262,557 244,537
--------------- ------------
4,783,077 4,472,880
--------------- ------------
BEVERAGE-0.38%
500,000 Coca-Cola Bottling Co., 6.375% Deb 5-1-2009................. BBB 496,812 459,274
500,000 Pepsi Bottling Group, Inc., 7.00% Note 3-1-2029............. A- 496,617 454,389
--------------- ------------
993,429 913,663
--------------- ------------
BROKERAGE AND INVESTMENT-1.01%
500,000 Bear Stearns Capital Trust, 7.00% Variable Rate 1-15-2027... BBB 499,717 493,802
250,000 Goldman Sachs Group, 6.50% Note 2-25-2009 (e)............... A+ 250,000 234,006
500,000 Goldman Sachs Group, 6.65% Note 5-15-2009................... A+ 499,016 469,658
750,000 Lehman Brothers Holdings, Inc., 7.375% Note 5-15-2004....... A 747,855 745,027
500,000 Merrill Lynch & Co., 6.07% Medium Term Note 10-15-2001...... AA- 504,277 495,298
--------------- ------------
2,500,865 2,437,791
--------------- ------------
CABLE TELEVISION-0.91%
750,000 Comcast Cable Communications, 8.375% Note 5-1-2007.......... BBB- 843,696 780,276
500,000 Cox Communications, Inc., 6.40% Note 8-1-2008............... A- 511,863 459,218
500,000 Time Warner, Inc., 6.875% Deb 6-15-2018..................... BBB 506,484 457,823
500,000 Viacom, Inc., 7.625% Deb 1-15-2016.......................... BBB- 542,721 485,970
--------------- ------------
2,404,764 2,183,287
--------------- ------------
CAPTIVE AUTO FINANCE-0.30%
500,000 General Motors Acceptance Corp., 6.15% Bond 4-5-2007........ A 498,381 471,379
250,000 Toyota Motor Credit, 5.625% Global Note 11-13-2003.......... AAA 249,650 239,343
--------------- ------------
748,031 710,722
--------------- ------------
CHEMICALS-0.10%
250,000 Equistar Chemicals, L.P., 8.75% Sr Note 2-15-2009 (f)....... BBB- 262,219 245,625
--------------- ------------
CONSUMER FINANCE-0.39%
1,000,000 Household Finance Corp., 6.00% Note 5-1-2004................ A 999,793 950,114
--------------- ------------
CONSUMER GOODS-0.06%
150,000 Pennzoil-Quaker State, 7.375% Deb 4-1-2029.................. BBB- 149,248 137,121
--------------- ------------
DIVERSIFIED FINANCE-0.51%
750,000 AT&T Capital Corp., 7.50% Medium Term Note 11-15-2000....... BBB 749,569 755,783
500,000 Finova Capital Corp., 6.75% Sr Note 3-9-2009................ A- 498,923 470,650
--------------- ------------
1,248,492 1,226,433
--------------- ------------
ENERGY-0.19%
500,000 NGC Corp. Capital Trust, 8.316% Deb 6-1-2027................ BBB- 500,000 459,564
--------------- ------------
FINANCIAL SERVICES-0.19%
500,000 Prudential Insurance Co., 6.375% Sr Note 7-23-2006 (e)...... A+ 498,030 465,456
--------------- ------------
FOOD-0.69%
750,000 Ahold Finance USA, Inc., 6.25% Deb 5-1-2009................. A 744,002 692,158
500,000 Fred Meyer, Inc., 7.45% Sr Note 3-1-2008.................... BBB- 530,586 490,760
500,000 Safeway, Inc., 6.05% Note 11-15-2003........................ BBB 499,262 481,196
--------------- ------------
1,773,850 1,664,114
--------------- ------------
FOOD SERVICE-0.09%
250,000 Sysco Corp., 6.50% Deb 8-1-2028............................. AA- 251,243 223,489
--------------- ------------
FOREIGN-GOVERNMENT-0.81%
250,000 British Columbia (Province of), 6.50% Yankee Bond
1-15-2026................................................. AA- 255,837 231,088
250,000 Korea (Republic of), 8.875% Global Bond 4-15-2008........... BBB- 263,240 257,910
</TABLE>
12
<PAGE>
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
- ----------- ----------- --------------- ------------
<C> <S> <C> <C> <C>
$ 250,000 Korea Development Bank, 7.125% Global Note 4-22-2004........ BBB- $ 248,286 $ 240,900
500,000 Ontario (Province of), 5.50% 10-1-2008...................... AA- 497,249 451,070
500,000 Ontario (Province of), 7.375% 1-27-2003..................... AA- 531,206 511,430
250,000 Poland (Republic of), 7.125% Yankee Note 7-1-2004........... BBB 249,056 252,188
--------------- ------------
2,044,874 1,944,586
--------------- ------------
FOREST PRODUCTS-0.47%
500,000 Fort James Corp., 6.50% Sr Note 9-15-2002................... BBB- 499,604 492,880
600,000 Georgia-Pacific Corp., 9.625% Deb 3-15-2022................. BBB- 616,932 636,234
--------------- ------------
1,116,536 1,129,114
--------------- ------------
INDUSTRIAL-0.28%
750,000 Tyco International Group S.A., 6.875% Yankee Bond
1-15-2029................................................. A- 756,706 664,343
--------------- ------------
INSURANCE-0.29%
250,000 American General Corp., 6.625% Sr Note 2-15-2029............ AA- 238,339 217,084
500,000 Reliastar Financial Corp., 6.625% Note 9-15-2003............ A 514,628 491,109
--------------- ------------
752,967 708,193
--------------- ------------
LEASING-0.40%
500,000 Comdisco, Inc., 5.95% Note 4-30-2002........................ BBB+ 499,955 488,496
500,000 Ryder System, Inc., 6.60% Note 11-15-2005................... BBB+ 499,846 469,913
--------------- ------------
999,801 958,409
--------------- ------------
MISCELLANEOUS-0.23%
400,000 New York (City of), 10.00% General Obligation Taxable Bond
Ser D 8-1-2005............................................ A- 397,513 439,932
100,000 New York (City of), 10.00% General Obligation Taxable Bond
Ser D 8-1-2005 (Prerefunded 8-1-2001 @ 103)............... A- 100,270 108,383
--------------- ------------
497,783 548,315
--------------- ------------
NATURAL GAS TRANSMISSIONS-0.59%
500,000 CMS Panhandle Holding Co., 7.00% Sr Note 7-15-2029 (f)...... BBB- 495,743 450,038
750,000 Tennessee Gas Pipeline, 7.50% Deb 4-1-2017.................. BBB 738,706 727,259
250,000 Trans-Canada Pipelines Ltd., 6.49% Yankee Bond 1-21-2009.... A- 251,718 233,178
--------------- ------------
1,486,167 1,410,475
--------------- ------------
NUCLEAR FUEL-0.10%
250,000 USEC, Inc., 6.625% Sr Note 1-20-2006........................ BBB+ 249,410 235,152
--------------- ------------
OIL-CRUDE PETROLEUM AND GAS-0.20%
500,000 Conoco, Inc., 6.35% Sr Note 4-15-2009....................... A- 500,000 470,256
--------------- ------------
OIL-EQUIPMENT WELLS AND SERVICES-0.20%
500,000 Petroleum Geo-Services, 6.25% Bond 11-19-2003............... BBB 498,108 476,160
--------------- ------------
PRINTING-0.18%
500,000 Donnelley (R.R.) & Sons, 6.625% Deb 4-15-2029............... A+ 494,946 443,100
--------------- ------------
RETAIL-DEPARTMENT STORES-0.75%
1,000,000 Dayton Hudson Corp., 5.875% Note 11-1-2008.................. A- 972,094 911,433
500,000 Federated Department Stores, 6.30% Note 4-1-2009............ BBB+ 498,680 458,049
500,000 Saks, Inc., 7.375% Deb 2-15-2019............................ Baa3* 457,379 436,591
--------------- ------------
1,928,153 1,806,073
--------------- ------------
RETAIL-DISCOUNT STORES-0.41%
1,000,000 Wal-Mart Stores, 6.875% Bond 8-10-2009...................... AA 996,096 988,223
--------------- ------------
SUPRA-NATIONAL-0.30%
750,000 Corp Andina de Fomento, 7.10% Yankee Bond 2-1-2003.......... A 749,728 727,954
--------------- ------------
TECHNOLOGY-0.19%
500,000 Lucent Technologies, Inc., 6.45% Bond 3-15-2029............. A 497,319 446,221
--------------- ------------
</TABLE>
13
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
August 31, 1999
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
- ----------- ----------- --------------- ------------
<C> <S> <C> <C> <C>
TELECOMMUNICATIONS-1.32%
$ 500,000 360 Communications Alltel Corp., 7.50% Sr Note 3-1-2006..... A $ 499,156 $ 508,318
250,000 AirTouch Communications, 6.65% Note 5-1-2008................ A 254,106 239,471
500,000 ALLTEL Corp., 6.80% Deb 5-1-2029............................ A- 496,901 439,324
750,000 AT&T Corp., 6.00% Note 3-15-2009............................ AA- 748,294 693,799
500,000 Metronet Communications, 8.16% Sr Disc Note 6-15-2008 (Zero
coupon through 6-15-2003, thereafter 9.95%) (g)........... BBB 392,962 380,000
500,000 Sprint Capital Corp., 5.875% Deb 5-1-2004................... BBB+ 497,654 474,693
500,000 U S West Communications, 5.625% Note 11-15-2008............. A+ 498,337 438,753
--------------- ------------
3,387,410 3,174,358
--------------- ------------
TELEPHONE SERVICES-0.51%
500,000 Century Telephone Enterprises, Inc., 6.15% Sr Note
1-15-2005................................................. BBB+ 499,389 475,630
500,000 GTE Corp., 7.51% Note 4-1-2009.............................. A 496,494 511,740
250,000 Telecommunicaciones de Puerto Rico, 6.65% Note 5-15-2006
(f)....................................................... BBB 249,910 241,473
--------------- ------------
1,245,793 1,228,843
--------------- ------------
UTILITIES-ELECTRIC-1.27%
500,000 Detroit Edison Co., 5.90% Medium Term Note 4-16-2001........ A- 502,755 494,050
500,000 Duke Energy Corp., 6.00% Sr Note 12-1-2028.................. A+ 488,161 404,100
500,000 Madison Gas & Electric, 6.02% Sr Note 9-15-2008............. AA- 500,000 456,187
500,000 Niagara Mohawk Power, 7.25% Sr Note 10-1-2002............... BBB- 497,842 499,062
500,000 Pennsylvania Electric Co., 6.125% Sr Note 4-1-2009.......... A 499,776 464,188
750,000 TXU Electric Capital V, 8.175% Deb 1-30-2037................ BBB- 755,721 731,659
--------------- ------------
3,244,255 3,049,246
--------------- ------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE.................... $ 41,784,255 $ 39,512,104
=============== ============
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-6.06%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
- ----------- ----------- ----------- ------------
<C> <S> <C> <C> <C>
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.19%
$ 500,000 Federal-Mogul Co., 7.375% Note 1-15-2006 (f)................ BB+ $ 498,059 $ 465,420
----------- ------------
BROADCASTING-0.31%
250,000 Chancellor Media Corp., 9.00% Sr Sub 10-1-2008.............. B 275,193 248,750
500,000 Sinclair Broadcasting Group, Inc., 10.00% Sr Sub Note
9-30-2005................................................. B 500,000 503,750
----------- ------------
775,193 752,500
----------- ------------
BUSINESS SERVICES-0.10%
250,000 Iron Mountain, Inc., 8.75% Deb 9-30-2009.................... B- 251,414 238,125
----------- ------------
CABLE TELEVISION-1.27%
500,000 Adelphia Communications, Inc., 9.25% Sr Note 10-1-2002...... B+ 506,933 501,255
504,088 Australis Media Ltd., 14.00% Sr Sub Disc Note
5-15-2003 (Zero coupon through 5-15-2000, thereafter
15.75%)(a) (e)(g)......................................... NR 401,365 --
1,000,000 Charter Communications Holdings LLC, 9.92% Sr Disc Note
4-1-2011 (Zero coupon through 4-1-2004, thereafter 9.92%)
(g)(f).................................................... B+ 641,689 600,000
500,000 CSC Holdings, Inc., 10.50% Sr Sub Deb 5-15-2016............. BB- 507,112 543,750
500,000 Lenfest Communications, 8.25% Sr Sub Note 2-15-2008......... BB- 498,780 505,000
500,000 Mediacom LLC/Capital Corp., 7.875% Sr Note 2-15-2011 (f).... B+ 493,146 443,750
500,000 Telewest Communication plc, 8.62% Sr Disc Note 4-
15-2009 (Zero coupon until 4-15-2004, thereafter 9.25%)
(g)(f).................................................... B+ 346,480 305,625
</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>
$ 250,000 United International Holdings, 10.53% Sr Disc Note
2-15-2008 (Zero coupon through 2-15-2003, thereafter
10.75%) (g)............................................... B $ 176,643 $ 145,000
----------- ------------
3,572,148 3,044,380
----------- ------------
CHEMICALS-0.21%
500,000 Lyondell Chemical Co., 9.875% Sr Secured 5-1-2007 (e)....... BB 501,125 500,000
----------- ------------
ENERGY-0.18%
500,000 Energy Corp. of America, 9.50% Sr Sub Note 5-15-2007........ B 500,000 443,750
----------- ------------
ENTERTAINMENT-0.10%
250,000 Speedway Motorsports, Inc., 8.50% Sr Sub Deb Ser D
8-15-2007................................................. B+ 255,208 247,500
----------- ------------
FOOD-MISCELLANEOUS-0.10%
250,000 Luigino's, Inc., 10.00% Sr Sub Note 2-1-2006 (f)............ B- 251,490 237,500
----------- ------------
FOREIGN-GOVERNMENT-0.40%
400,000 Brazil (Republic of), 11.625% Global Bond 4-15-2004......... B+ 396,472 361,000
250,000 Philippines (Republic of), 8.875% Global Bond 4-15-2008..... BB+ 243,968 241,250
500,000 United Mexican States, 6.25% Secured Bond Ser W-B
12-31-2019................................................ BB 378,796 358,967
----------- ------------
1,019,236 961,217
----------- ------------
HEALTH CARE SERVICES-0.31%
500,000 Concentra Operating Corp., 13.00% Sr Sub Note 8-15-2009
(e)....................................................... B- 500,186 502,500
250,000 Triad Hospitals Hldgs, 11.00% Sr Sub Note 5-15-2009 (e)..... B- 251,568 250,000
----------- ------------
751,754 752,500
----------- ------------
OIL-CRUDE PETROLEUM AND GAS-0.17%
250,000 Ocean Energy, Inc., 8.875% Sr Sub Note 7-15-2007............ BB- 254,502 250,625
150,000 Swift Energy Co., 10.25% Sr Note 8-1-2009................... B- 148,956 149,438
----------- ------------
403,458 400,063
----------- ------------
PAPER-0.21%
500,000 Packaging Corp. of America, 9.625% Sr Sub Note 4-1-2009
(f)....................................................... B 512,877 505,000
----------- ------------
RETAIL-GROCERY-0.11%
250,000 Stater Brothers Holdings, 10.75% Sr Note 8-15-2006 (e)...... B+ 250,187 255,000
----------- ------------
STEEL AND IRON-0.10%
250,000 Weirton Steel Corp., 10.875% Sr Note 10-15-1999............. B 250,212 248,750
----------- ------------
TELECOMMUNICATIONS-1.76%
500,000 Hyperion Telecommunications, 12.25% Sr Note 9-1-2004........ BB- 538,892 525,000
250,000 Intermedia Communications, Inc., 8.50% Sr Note 1-15-2008.... B 255,813 221,250
250,000 McLeodUSA, Inc., 8.125% Sr Note 2-15-2009................... B+ 249,144 230,000
500,000 Nextel Communications, Inc., 10.32% Sr Disc Note
9-15-2007 (Zero coupon through 9-15-2002, thereafter
10.65%) (g)............................................... B- 371,091 365,000
250,000 Orange plc, 9.00% Sr Sub Deb 6-1-2009 (e)................... BB- 250,000 254,375
500,000 Qwest Communications International, Inc., 7.25% Sr Note Ser
B 11-1-2008............................................... BB+ 500,000 485,000
750,000 RCN Corp., 10.00% Sr Note 10-15-2007........................ NR 768,319 733,125
500,000 Rogers Cantel, Inc., 9.375% Sr Secured Deb 6-1-2008......... BB+ 528,241 527,500
500,000 Splitrock Services, Inc., 11.75% Sr Note 7-15-2008.......... NR 503,660 450,000
500,000 Winstar Communications, Inc., 11.15% Sr Disc Note
10-15-2005 (Zero coupon until 10-15-2000, thereafter
14.00%) (g)............................................... CCC+ 461,816 430,000
----------- ------------
4,426,976 4,221,250
----------- ------------
TELEPHONE SERVICES-0.39%
500,000 Alaska Communications SY, 9.375% Sr Sub Note 5-15-2009
(e)....................................................... B+ 501,100 471,250
500,000 Level 3 Communications, Inc., 9.125% Sr Note 5-1-2008....... B 498,777 465,000
----------- ------------
999,877 936,250
----------- ------------
</TABLE>
15
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
August 31, 1999
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>
TEXTILE MANUFACTURING-0.15%
$ 375,000 Pillowtex Corp., 10.00% Sr Sub Note 11-15-2006.............. B+ $ 391,952 $ 356,250
----------- ------------
TOTAL CORPORATE BONDS - NON-INVESTMENT GRADE................ $15,611,166 $ 14,565,455
=========== ============
</TABLE>
U.S. GOVERNMENT SECURITIES-12.23%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
- ----------- -------------- ------------
<C> <S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.28%
MORTGAGE BACKED SECURITIES:
$3,101,143 6.00% 2013-2014............................................. $ 3,000,215 $ 2,953,475
274,265 6.30% 2008.................................................. 274,592 260,410
1,443,040 6.63% 2005.................................................. 1,479,379 1,414,774
267,324 7.50% 2027.................................................. 274,580 265,674
484,618 8.00% 2025.................................................. 491,963 491,258
105,917 9.00% 2016-2021............................................. 104,049 110,910
-------------- ------------
TOTAL FEDERAL NATIONAL MORTGAGE ASSOCIATION................. 5,624,778 5,496,501
-------------- ------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 0.45%
MORTGAGE BACKED SECURITIES:
1,023,470 9.00% 2023.................................................. 1,056,733 1,074,274
16,249 9.50% 2019.................................................. 16,117 17,419
-------------- ------------
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION.............. 1,072,850 1,091,693
-------------- ------------
U.S. TREASURY SECURITIES - 9.50%
BONDS:
1,475,000 5.25% 2028.................................................. 1,265,641 1,275,875
-------------- ------------
NOTES:
1,000,000 4.625% 2000................................................. 994,216 987,188
5,460,000 5.50% 2003.................................................. 5,374,127 5,381,512
9,500,000 6.125% 2007................................................. 9,462,579 9,464,375
-------------- ------------
15,830,922 15,833,075
-------------- ------------
STRIPS:
20,300,000 6.10% 2019(g)............................................... 6,101,121 5,728,843
-------------- ------------
TOTAL U.S. TREASURY SECURITIES.............................. 23,197,684 22,837,793
-------------- ------------
TOTAL U.S. GOVERNMENT SECURITIES............................ 29,895,312 29,425,987
-------------- ------------
TOTAL LONG-TERM INVESTMENTS................................. $ 219,109,804 $233,987,969
============== ============
</TABLE>
16
<PAGE>
SHORT-TERM INVESTMENTS-1.69%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
- ----------- ------------
<C> <S> <C>
BANKS-0.00%
$ 7,234 U.S. Bank N.A. Money Market Variable Rate Time Deposit,
Current rate -- 5.05%..................................... $ 7,234
------------
DIVERSIFIED FINANCE-0.05%
108,000 Norwest Bank Associates Corp., Master Variable Rate Note,
Current rate -- 4.97%..................................... 108,000
------------
INVESTMENT COMPANY-1.64%
3,943,637 Norwest Advantage Cash Investment Fund, Current
rate -- 4.93%............................................. 3,943,637
------------
TOTAL SHORT-TERM INVESTMENTS................................ 4,058,871
------------
TOTAL INVESTMENTS IN SECURITIES (COST: $223,168,675)(b)..... $238,046,840
============
</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, 1999, the cost of securities for federal income tax purposes
was $223,469,814 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $23,491,333
Unrealized depreciation..................................... (8,914,307)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $14,577,026
- -------------------------------------------------------------------------
</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 7.10% of total net assets as of August 31, 1999.
(e) Securities sold within the terms of a private placement memorandum, exempt
from registration under Section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or to other
"accredited investors". These investments have been identified by portfolio
management as illiquid securities:
<TABLE>
<CAPTION>
Period Acquired Shares/Par Security Cost Basis
- --------------- ---------- -------- ----------
<S> <C> <C> <C>
1999 500,000 Alaska Communications SY due 2009 - 144A $501,100
1997 504,088 Australis Media Ltd. due 2000 401,365
1999 500,000 Concentra Operating Corp. due 2009 - 144A 500,186
1999 250,000 Goldman Sachs Group due 2009 - 144A 250,000
1998 250 Highwaymaster Communications, Inc. (Warrants) - 144A 4,547
1999 500,000 Lyondell Chemical Co. due 2007 - 144A 501,125
1999 250,000 Orange plc due 2009 - 144A 250,000
1999 500,000 Prudential Insurance Co. due 2006 - 144A 498,030
1999 250,000 Stater Brothers Holdings due 2006 - 144A 250,187
1999 250,000 Triad Hospitals Holdings due 2009 - 144A 251,568
</TABLE>
The aggregate value of these securities at August 31, 1999, was $2,932,654,
which represents 1.22% of total net assets.
(f) Securities sold within the terms of a private placement memorandum, exempt
from registration under Section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or to other
"accredited investors". Pursuant to guidelines adopted by the Board of
Directors, these issues are deemed to be liquid. The aggregate value of
these securities at August 31, 1999, was $4,271,713, which represents 1.78%
of total net assets.
(g) The interest rate disclosed for these securities represents the effective
yield on the date of acquisition.
(h) The interest rate disclosed for principal only strips represents the
effective yield at August 31, 1999, based upon the estimated timing and
amount of future cash flows. These investments have been identified by
portfolio management as liquid securities. The aggregate value of these
securities at August 31, 1999, was $297,931, which represents .12% of total
net assets.
* Moody's Rating
17
<PAGE>
FORTIS STOCK FUNDS
VALUE FUND
Schedule of Investments
August 31, 1999
COMMON STOCKS-98.15%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- ------- ----------- -----------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT - 2.03%
11,000 Raytheon Co. Class B................. $ 777,251 $ 749,375
4,500 United Technologies Corp............. 274,907 297,562
----------- -----------
1,052,158 1,046,937
----------- -----------
AUTOMOBILE AND MOTOR VEHICLE
PARTS - 0.15%
4,193 Delphi Automotive Systems Corp....... 56,247 78,619
----------- -----------
AUTOMOBILE MANUFACTURERS - 3.11%
18,000 Ford Motor Co........................ 1,018,853 938,250
10,000 General Motors Corp.................. 546,307 661,250
----------- -----------
1,565,160 1,599,500
----------- -----------
BANKS - 4.64%
17,700 Bank of America Corp................. 1,048,167 1,070,850
7,800 Bank of New York Company, Inc........ 248,104 278,850
12,400 Chase Manhattan Corp................. 900,841 1,037,725
----------- -----------
2,197,112 2,387,425
----------- -----------
BEVERAGE - 2.21%
7,000 Anheuser-Busch Companies, Inc........ 517,027 539,000
3,000 Canandaigua Brands, Inc.
Class A (a)........................ 164,120 173,625
22,500 Pepsi Bottling Group, Inc............ 488,293 426,094
----------- -----------
1,169,440 1,138,719
----------- -----------
BROADCASTING - 0.44%
7,000 Comcast Corp. Special
Class A (a)........................ 278,608 228,375
----------- -----------
BUILDING MATERIALS - 0.38%
7,000 Owens Corning........................ 256,395 196,875
----------- -----------
BUSINESS SERVICES - 5.34%
13,500 American Management Systems,
Inc. (a) 397,408 386,437
9,000 Avis Rent A Car, Inc. (a)............ 261,015 198,000
10,500 First Data Corp...................... 472,882 462,000
8,500 Fiserv, Inc. (a)..................... 270,782 261,906
14,000 Modis Professional Services,
Inc. (a)........................... 205,939 221,375
9,000 National Data Corp................... 406,431 344,250
9,000 Policy Management Systems
Corp. (a).......................... 267,940 275,062
15,000 United Rentals, Inc. (a)............. 403,580 366,562
11,000 Wallace Computer Services, Inc....... 269,827 235,125
----------- -----------
2,955,804 2,750,717
----------- -----------
CHEMICALS - 0.44%
2,000 Dow Chemical Co...................... 244,861 227,250
----------- -----------
CHEMICALS-SPECIALTY - 0.49%
4,000 Geon Co.............................. 129,080 119,500
6,000 NOVA Chemicals Corp.................. 128,919 131,250
----------- -----------
257,999 250,750
----------- -----------
COMPUTER-COMMUNICATION
EQUIPMENT - 0.76%
9,000 NCR Corp. (a)........................ 408,022 393,750
----------- -----------
COMPUTER-HARDWARE - 1.20%
9,500 Apple Computer, Inc. (a)............. 410,836 619,875
----------- -----------
COMPUTER-SOFTWARE - 4.90%
4,000 Adaptec, Inc. (a).................... 100,679 156,000
6,500 Affiliated Computer Services,
Inc. (a)........................... 276,160 277,875
7,000 BISYS Group, Inc. (a)................ 384,579 332,500
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- ------- ----------- -----------
<C> <S> <C> <C>
5,000 Check Point Software Technologies
Ltd. (a)........................... $ 221,825 $ 385,625
5,500 Computer Associates International,
Inc................................ 269,041 310,750
9,000 Compuware Corp. (a).................. 262,896 271,687
22,500 CSG Systems International,
Inc. (a)........................... 567,671 507,656
5,000 Electronic Data Systems Corp......... 203,431 280,625
----------- -----------
2,286,282 2,522,718
----------- -----------
CONSTRUCTION - 0.92%
7,500 Centex Corp.......................... 263,358 210,937
4,700 Kaufman & Broad Home Corp............ 113,388 96,056
7,300 Pulte Corp........................... 165,283 168,812
----------- -----------
542,029 475,805
----------- -----------
ELECTRONIC-CONTROLS AND
EQUIPMENT - 2.54%
4,300 Dionex Corp. (a)..................... 194,042 171,194
10,800 Hewlett-Packard Co................... 569,858 1,138,050
----------- -----------
763,900 1,309,244
----------- -----------
ELECTRONIC-DEFENSE - 1.38%
11,500 L-3 Communications Holdings,
Inc. (a)........................... 547,638 456,406
4,000 Litton Industries, Inc. (a).......... 251,548 256,000
----------- -----------
799,186 712,406
----------- -----------
ELECTRONIC-SEMICONDUCTOR AND
CAPACITOR - 1.05%
7,500 Altera Corp. (a)..................... 259,322 315,937
3,000 Micron Technology, Inc. (a).......... 129,574 223,687
----------- -----------
388,896 539,624
----------- -----------
FINANCIAL SERVICES - 13.99%
4,500 Ambac Financial Group, Inc........... 268,509 237,656
4,000 American Express Co.................. 551,462 550,000
17,500 C.I.T. Group, Inc.................... 513,191 416,719
7,500 Capital One Financial Corp........... 408,893 283,125
41,625 Citigroup, Inc....................... 1,365,803 1,849,711
3,000 Conseco, Inc......................... 104,707 72,000
13,000 Countrywide Credit Industries,
Inc................................ 525,135 417,625
18,700 Fannie Mae........................... 1,219,716 1,161,737
15,000 Freddie Mac.......................... 828,836 772,500
17,500 Heller Financial, Inc................ 463,720 400,312
3,500 J.P. Morgan & Co., Inc............... 440,179 452,156
4,000 Marsh & McLennan Companies, Inc...... 216,657 291,250
3,500 Morgan Stanley Dean Witter & Co...... 231,772 300,344
----------- -----------
7,138,580 7,205,135
----------- -----------
FOOD - 0.77%
19,000 U.S. Foodservice (a)................. 431,190 395,437
----------- -----------
FURNITURE - 0.58%
15,000 Furniture Brands International,
Inc. (a)........................... 387,928 300,937
----------- -----------
HEALTH CARE SERVICES - 2.12%
3,500 Bausch & Lomb, Inc................... 257,937 231,219
6,500 C.R. Bard, Inc....................... 278,154 303,062
3,500 MedQuist, Inc. (a)................... 129,023 121,844
6,000 Wellpoint Health Networks,
Inc. (a)........................... 467,869 437,250
----------- -----------
1,132,983 1,093,375
----------- -----------
HOTEL AND GAMING - 0.31%
14,000 Park Place Entertainment
Corp. (a).......................... 138,043 158,375
----------- -----------
</TABLE>
18
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- ------- ----------- -----------
<C> <S> <C> <C>
INSURANCE - 5.94%
6,000 Aetna, Inc........................... $ 547,321 $ 466,500
7,500 American General Corp................ 541,428 532,500
14,375 American International Group, Inc.... 1,404,949 1,332,383
4,300 Hartford Financial Services Group,
Inc................................ 224,159 195,381
19,000 MONY Group, Inc...................... 546,618 532,000
----------- -----------
3,264,475 3,058,764
----------- -----------
LEISURE TIME-AMUSEMENTS - 1.46%
22,000 Hollywood Entertainment Corp. (a).... 496,713 298,375
22,000 Mandalay Resort Group (a)............ 440,168 451,000
----------- -----------
936,881 749,375
----------- -----------
MACHINERY-SPECIALTY - 0.49%
4,000 Ingersoll-Rand Co.................... 209,890 254,500
----------- -----------
MACHINERY-TOOLS - 0.40%
3,500 Danaher Corp......................... 220,509 205,625
----------- -----------
MEDICAL SUPPLIES - 2.79%
13,000 Baxter International, Inc. (with
rights)............................ 793,801 871,812
12,500 IDEXX Laboratories, Inc. (a)......... 269,861 212,500
11,000 Mallinckrodt Group, Inc.............. 359,166 352,688
----------- -----------
1,422,828 1,437,000
----------- -----------
METALS-FABRICATING - 0.64%
5,000 Waters Corp. (a)..................... 249,158 329,688
----------- -----------
METALS-MINING AND
MISCELLANEOUS - 0.56%
4,500 Alcoa, Inc........................... 192,953 290,531
----------- -----------
NATURAL GAS TRANSMISSIONS - 0.50%
7,000 El Paso Energy Corp.................. 259,693 255,938
----------- -----------
OFFICE EQUIPMENT AND SUPPLIES - 3.26%
20,000 IKON Office Solutions, Inc........... 264,333 222,500
12,500 Pitney Bowes, Inc.................... 821,594 737,500
15,000 Xerox Corp........................... 896,906 716,250
----------- -----------
1,982,833 1,676,250
----------- -----------
OIL AND GAS FIELD SERVICES - 0.65%
5,000 Schlumberger Ltd..................... 252,339 333,750
----------- -----------
OIL-CRUDE PETROLEUM AND GAS - 10.63%
3,500 Chevron Corp......................... 296,590 322,875
20,000 Conoco, Inc. Class A................. 548,386 535,000
23,400 Exxon Corp........................... 1,726,153 1,845,675
5,300 Mobil Corp........................... 417,740 542,588
20,000 Phillips Petroleum Co................ 1,022,221 1,020,000
11,500 Royal Dutch Petroleum Co. NY
Shares............................. 584,777 711,563
16,000 USX-Marathon Group................... 493,395 498,000
----------- -----------
5,089,262 5,475,701
----------- -----------
PAPER - 1.09%
17,000 Louisiana-Pacific Corp............... 367,450 314,500
4,000 Temple-Inland, Inc................... 278,347 248,000
----------- -----------
645,797 562,500
----------- -----------
PRINTING - 1.82%
5,500 Electronics for Imaging, Inc. (a).... 255,402 322,438
14,000 Valassis Communications, Inc. (a).... 522,002 612,500
----------- -----------
777,404 934,938
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- ------- ----------- -----------
<C> <S> <C> <C>
PUBLISHING - 0.72%
8,000 McClatchy Co. Class A................ $ 271,046 $ 276,500
5,700 Wiley (John) & Sons, Inc. Class A.... 121,198 92,625
----------- -----------
392,244 369,125
----------- -----------
RESTAURANTS AND FRANCHISING - 0.44%
14,500 Darden Restaurants, Inc.............. 311,153 226,563
----------- -----------
RETAIL-CLOTHING - 1.38%
10,000 AnnTaylor Stores Corp. (a)........... 411,661 331,250
8,000 Talbots, Inc......................... 262,591 247,500
4,500 TJX Companies, Inc................... 140,404 129,938
----------- -----------
814,656 708,688
----------- -----------
RETAIL-DEPARTMENT STORES - 1.15%
5,000 Harcourt General, Inc................ 261,615 219,063
9,500 May Department Stores Co............. 414,757 371,094
----------- -----------
676,372 590,157
----------- -----------
RETAIL-DISCOUNT STORES - 0.40%
16,500 Kmart Corp. (a)...................... 271,191 207,281
----------- -----------
RETAIL-MISCELLANEOUS - 0.75%
6,500 Regis Corp........................... 168,168 124,313
11,500 Tupperware Corp...................... 264,722 259,469
----------- -----------
432,890 383,782
----------- -----------
SHIP BUILDING, SHIPPING - 0.51%
8,000 Tidewater, Inc....................... 210,979 260,000
----------- -----------
TELECOMMUNICATION EQUIPMENT - 3.05%
12,500 ECI Telecommunications Ltd........... 455,343 354,688
10,500 General Instrument Corp. (a)......... 369,757 516,469
12,000 Nortel Networks Corp................. 542,915 492,750
4,000 Scientific-Atlanta, Inc.............. 142,744 205,000
----------- -----------
1,510,759 1,568,907
----------- -----------
TELEPHONE SERVICES - 5.42%
8,000 Bell Atlantic Corp................... 443,796 490,000
11,900 BellSouth Corp....................... 512,573 538,475
13,500 CenturyTel, Inc...................... 533,272 530,719
2,500 GTE Corp............................. 159,472 171,563
10,000 MCI WorldCom, Inc. (a)............... 881,474 757,500
6,800 Sprint Corp.......................... 133,059 301,750
----------- -----------
2,663,646 2,790,007
----------- -----------
TOBACCO - 1.67%
23,000 Philip Morris Companies, Inc......... 943,714 861,063
----------- -----------
UTILITIES-ELECTRIC - 2.68%
5,500 Consolidated Edison, Inc............. 281,883 242,000
11,500 Edison International................. 300,765 291,813
5,500 Public Service Enterprise Group,
Inc................................ 220,674 225,500
10,500 Reliant Energy, Inc.................. 321,230 290,719
6,500 Southern Co.......................... 193,629 175,906
4,000 Unicom Corp.......................... 154,684 154,500
----------- -----------
1,472,865 1,380,438
----------- -----------
TOTAL COMMON STOCKS.................. $50,066,150 $50,542,419
=========== ===========
</TABLE>
19
<PAGE>
FORTIS STOCK FUNDS
VALUE FUND (CONTINUED)
Schedule of Investments
August 31, 1999
SHORT-TERM INVESTMENTS - 1.79%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
- ----------- -----------
<C> <S> <C>
BANKS - 0.00%
$ 1,158 U.S. Bank N.A. Money Market Variable Rate Time Deposit,
Current rate -- 5.05%..................................... $ 1,158
-----------
DIVERSIFIED FINANCE - 0.38%
196,000 Norwest Bank Associates Corp., Master Variable Rate Note,
Current rate -- 4.97%..................................... 196,000
-----------
INVESTMENT COMPANY - 1.41%
727,642 Norwest Advantage Cash Investment Fund, Current
rate -- 4.93%............................................. 727,642
-----------
TOTAL SHORT-TERM INVESTMENTS................................ 924,800
-----------
TOTAL INVESTMENTS IN SECURITIES (COST: $50,990,950)(b)...... $51,467,219
===========
</TABLE>
(a) Presently not paying dividend income.
(b) At August 31, 1999, the cost of securities for federal income tax purposes
was $51,131,716 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 4,058,367
Unrealized depreciation..................................... (3,722,864)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 335,503
- -------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements.
(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 .68% of total net assets as of August 31, 1999.
20
<PAGE>
FORTIS STOCK FUNDS
GROWTH & INCOME FUND
Schedule of Investments
August 31, 1999
COMMON STOCKS-88.38%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- ------- ----------- -----------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-1.11%
12,000 Interpublic Group of Companies,
Inc................................ $ 463,110 $ 475,500
----------- -----------
AEROSPACE AND EQUIPMENT-2.92%
7,500 Boeing Co............................ 356,791 339,844
3,500 Northrop Grumman Corp................ 235,585 253,750
10,000 United Technologies Corp............. 359,512 661,250
----------- -----------
951,888 1,254,844
----------- -----------
BANKS-3.30%
6,000 Chase Manhattan Corp................. 469,110 502,125
12,000 Fleet Financial Group, Inc........... 459,926 477,750
7,500 Marshall & Ilsley Corp............... 433,200 439,219
----------- -----------
1,362,236 1,419,094
----------- -----------
BEVERAGE-1.26%
7,000 Anheuser-Busch Companies, Inc........ 461,654 539,000
----------- -----------
BROKERAGE AND INVESTMENT-0.78%
4,500 Merrill Lynch & Co., Inc............. 367,770 335,812
----------- -----------
BUSINESS SERVICES-2.58%
10,000 Automatic Data Processing, Inc....... 463,819 393,125
9,500 Omnicom Group, Inc................... 389,635 716,062
----------- -----------
853,454 1,109,187
----------- -----------
CHEMICALS-2.00%
3,793 Du Pont (E.I.) de Nemours & Co....... 281,211 240,401
12,000 Hercules, Inc........................ 420,000 390,750
4,000 Union Carbide Corp................... 220,654 227,500
----------- -----------
921,865 858,651
----------- -----------
COMPUTER-SOFTWARE-0.98%
7,500 Electronic Data Systems Corp......... 393,133 420,937
----------- -----------
CONSUMER GOODS-0.85%
6,800 Colgate-Palmolive Co................. 368,264 363,800
----------- -----------
COSMETICS AND SUNDRIES-0.52%
5,500 International Flavors & Fragrances,
Inc................................ 260,600 224,125
----------- -----------
DIVERSIFIED COMPANIES-1.21%
5,500 Minnesota Mining and Manufacturing
Co. 511,665 519,750
----------- -----------
DRUGS-5.57%
20,800 American Home Products Corp.......... 1,050,727 863,200
6,500 Bristol-Myers Squibb Co.............. 449,260 457,437
2,300 Johnson & Johnson.................... 233,699 235,175
16,000 Pharmacia & Upjohn, Inc.............. 631,339 836,000
----------- -----------
2,365,025 2,391,812
----------- -----------
ELECTRICAL EQUIPMENT-1.96%
7,500 General Electric Co.................. 421,048 842,344
----------- -----------
FINANCIAL SERVICES-3.43%
5,500 J.P. Morgan & Co., Inc............... 787,935 710,531
10,500 Marsh & McLennan Companies, Inc...... 648,972 764,531
----------- -----------
1,436,907 1,475,062
----------- -----------
FOOD-6.34%
12,400 Campbell Soup Co..................... 558,368 547,925
8,000 Groupe Danone ADR.................... 307,347 397,000
20,000 Nabisco Group Holdings Corp.......... 451,542 355,000
13,000 Quaker Oats Co....................... 693,000 868,562
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- ------- ----------- -----------
<C> <S> <C> <C>
17,000 SYSCO Corp........................... $ 561,199 $ 554,625
----------- -----------
2,571,456 2,723,112
----------- -----------
HEALTH CARE SERVICES-0.57%
10,000 Columbia/HCA Healthcare Corp......... 256,120 246,250
----------- -----------
INSURANCE-5.03%
8,700 Allstate Corp........................ 336,533 285,469
9,392 American International Group, Inc.... 408,504 870,521
18,500 Aon Corp............................. 815,902 617,437
24,500 LaSalle Re Holdings Ltd.............. 677,857 388,937
----------- -----------
2,238,796 2,162,364
----------- -----------
LEISURE TIME-AMUSEMENTS-1.09%
10,000 Royal Caribbean Cruises Ltd.......... 203,125 468,125
----------- -----------
MACHINERY-OIL AND WELL-2.02%
20,000 Baker Hughes, Inc.................... 462,463 680,000
4,000 Halliburton Co....................... 203,270 185,500
----------- -----------
665,733 865,500
----------- -----------
MEDIA-1.09%
10,000 CBS Corp. (a)........................ 493,586 470,000
----------- -----------
MEDICAL SUPPLIES-1.25%
8,000 Baxter International, Inc. (with
rights)............................ 395,927 536,500
----------- -----------
NATURAL GAS TRANSMISSIONS-6.50%
15,072 El Paso Energy Corp.................. 402,835 551,070
33,800 Enron Corp........................... 706,722 1,415,375
20,000 Williams Companies, Inc.............. 625,969 825,000
----------- -----------
1,735,526 2,791,445
----------- -----------
OIL AND GAS FIELD SERVICES-1.24%
8,000 Schlumberger Ltd..................... 414,764 534,000
----------- -----------
OIL-CRUDE PETROLEUM AND GAS-11.47%
2,999 BP Amoco plc ADR..................... 186,015 336,263
5,000 Chevron Corp......................... 434,637 461,250
15,000 Conoco, Inc. Class A................. 345,000 401,250
22,985 Conoco, Inc. Class B................. 608,702 617,715
6,000 Exxon Corp........................... 318,656 473,250
10,500 Mobil Corp........................... 780,215 1,074,938
8,500 Phillips Petroleum Co................ 448,014 433,500
8,000 Royal Dutch Petroleum Co. NY
Shares............................. 384,417 495,000
10,000 Texaco, Inc.......................... 500,373 635,000
----------- -----------
4,006,029 4,928,166
----------- -----------
PUBLISHING-3.30%
18,000 McGraw-Hill Companies, Inc........... 689,488 930,375
15,600 Reader's Digest Association, Inc.
Class A 445,377 487,500
----------- -----------
1,134,865 1,417,875
----------- -----------
REAL ESTATE-INVESTMENT TRUST-1.33%
18,000 Cornerstone Properties, Inc.......... 274,164 286,875
11,140 Equity Office Properties Trust....... 257,954 284,766
----------- -----------
532,118 571,641
----------- -----------
RETAIL-DEPARTMENT STORES-0.44%
5,000 Sears, Roebuck & Co.................. 273,119 187,500
----------- -----------
RETAIL-SPECIALTY-0.45%
5,000 Intimate Brands, Inc................. 143,143 192,813
----------- -----------
</TABLE>
21
<PAGE>
FORTIS STOCK FUNDS
GROWTH & INCOME FUND (CONTINUED)
Schedule of Investments
August 31, 1999
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- ------- ----------- -----------
<C> <S> <C> <C>
STEEL AND IRON-1.21%
20,000 British Steel plc ADR................ $ 504,423 $ 518,750
----------- -----------
TELECOMMUNICATIONS-2.06%
14,000 Ameritech Corp....................... 600,664 883,750
----------- -----------
TELEPHONE SERVICES-9.36%
10,000 ALLTEL Corp.......................... 432,195 676,250
14,000 AT&T Corp............................ 614,128 630,000
10,200 Frontier Corp........................ 351,867 427,763
11,500 GTE Corp............................. 587,838 789,188
21,000 SBC Communications, Inc.............. 754,920 1,008,000
9,400 U S West, Inc........................ 372,996 491,150
----------- -----------
3,113,944 4,022,351
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- ------- ----------- -----------
<C> <S> <C> <C>
TOBACCO-1.17%
8,500 Philip Morris Companies, Inc......... $ 382,589 $ 318,219
6,667 R.J. Reynolds Tobacco Holdings,
Inc................................ 151,076 182,917
----------- -----------
533,665 501,136
----------- -----------
TOYS-0.40%
7,000 Hasbro, Inc.......................... 213,474 171,063
----------- -----------
UTILITIES-ELECTRIC-3.59%
20,000 Illinova Corp........................ 621,740 637,500
6,600 Montana Power Co..................... 236,061 204,187
26,500 Potomac Electric Power Co............ 790,532 702,250
----------- -----------
1,648,333 1,543,937
----------- -----------
TOTAL COMMON STOCKS.................. $32,817,429 $37,966,196
=========== ===========
</TABLE>
PREFERRED STOCKS-4.40%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- ------- ----------- -----------
<C> <S> <C> <C>
CABLE TELEVISION-0.51%
1,200 Adelphia Communications Corp. Class A, Conv. Ser D 5.50%.... $ 240,000 $ 220,800
----------- -----------
MISCELLANEOUS-1.32%
12,000 Qwest Trends Trust, Conv. 5.75% (e)......................... 501,000 567,000
----------- -----------
TELECOMMUNICATIONS-1.09%
6,300 Global TeleSystems Group, Inc., Conv. 7.25% (e)............. 315,000 352,800
2,400 Verio, Inc., Conv. 6.75% (e)................................ 120,000 114,000
----------- -----------
435,000 466,800
----------- -----------
UTILITIES-ELECTRIC-1.48%
7,500 AES Corp., Conv. Ser A 'Tecons', 5.375%..................... 425,599 633,750
----------- -----------
TOTAL PREFERRED STOCKS...................................... $1,601,599 $ 1,888,350
=========== ===========
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-4.09%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
- ----------- ----------- ----------- -----------
<C> <S> <C> <C> <C>
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.09%
$400,000 Cypress Semiconductor Corp., 6.00% Conv. 10-1-2002 (e)...... B $ 400,000 $ 469,500
----------- -----------
HEALTH CARE SERVICES-0.38%
300,000 Assisted Living Concepts, Inc., 5.625% Conv. 5-1-2003 (e)... NR 300,000 161,625
----------- -----------
MEDIA-1.52%
942,000 Tribune Co., Conv. 2.00% (PHONES - America Online) (f)...... A- 942,000 654,750
----------- -----------
MEDICAL TECHNOLOGY-0.31%
100,000 Centocor, Inc., 4.75% Conv. 2-15-2005....................... B+ 100,000 132,750
----------- -----------
TELEPHONE SERVICES-0.79%
350,000 Telefonos de Mexico, S.A., 4.25% Conv. Ser A 6-15-2004...... BB 350,000 340,375
----------- -----------
TOTAL CORPORATE BONDS - NON-INVESTMENT GRADE................ 2,092,000 1,759,000
=========== ===========
TOTAL LONG-TERM INVESTMENTS................................. $36,511,028 $41,613,546
=========== ===========
</TABLE>
22
<PAGE>
SHORT-TERM INVESTMENTS-1.70%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
- ----------- -----------
<C> <S> <C>
BANKS-0.00%
$ 1,028 U.S. Bank N.A. Money Market Variable Rate Time Deposit,
Current rate -- 5.05%..................................... $ 1,028
-----------
DIVERSIFIED FINANCE-1.05%
450,000 Norwest Bank Associates Corp., Master Variable Rate Note,
Current rate -- 4.97%..................................... 450,000
-----------
INVESTMENT COMPANY-0.65%
277,996 Norwest Advantage Cash Investment Fund, Current
rate -- 4.93%............................................. 277,997
-----------
TOTAL SHORT-TERM INVESTMENTS................................ 729,025
-----------
TOTAL INVESTMENTS IN SECURITIES (COST: $37,240,053)(b)...... $42,342,571
===========
</TABLE>
(a) Not presently income producing.
(b) At August 31, 1999, the cost of securities for federal income tax purposes
was $37,240,053, and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 7,298,581
Unrealized depreciation..................................... (2,196,063)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 5,102,518
- -------------------------------------------------------------------------
</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 5.76% of total net assets as of August 31, 1999.
(e) Securities sold within the terms of a private placement memorandum, exempt
from registration under Section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or to other
"accredited investors". These investment have been identified by portfolio
management as illiquid securities:
<TABLE>
<CAPTION>
Period Acquired Shares/Par Security Cost Basis
- --------------- ---------- -------- ----------
<S> <C> <C> <C>
1998 300,000 Assisted Living Concepts, Inc. due 2003 -
144A $300,000
1997 400,000 Cypress Semiconductor Corp. due 2002 - 144A 400,000
1999 6,300 Global TeleSystems Group, Inc., Conv. -
144A 315,000
1998 12,000 Qwest Trends Trust, Conv. - 144A 501,000
1999 2,400 Verio, Inc., Conv. - 144A 120,000
</TABLE>
The aggregate value of these securities at August 31, 1999, was $1,664,925,
which represents 3.88% of total net assets.
(f) PHONES (Participation Hybrid Option Note Exchangeable Securities) are debt
securities which entitle the holder to the principal value or an amount
based upon the market value of the referenced security.
23
<PAGE>
FORTIS STOCK FUNDS
CAPITAL FUND
Schedule of Investments
August 31, 1999
COMMON STOCKS-97.69%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- -------- ------------ ------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS -
2.29%
360,000 Interpublic Group of Companies,
Inc. $ 8,825,142 $ 14,265,000
------------ ------------
AEROSPACE AND EQUIPMENT - 0.97%
133,000 Boeing Co......................... 6,296,356 6,026,562
------------ ------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT - 1.58%
46,000 Amgen, Inc. (a) (with rights)..... 3,786,485 3,826,625
100,000 Centocor, Inc. (a)................ 5,085,000 5,987,500
------------ ------------
8,871,485 9,814,125
------------ ------------
BROADCASTING - 4.66%
180,000 AMFM, Inc. (a).................... 9,565,152 8,865,000
150,000 AT&T Corp. - Liberty Media
Group (a) 4,756,227 4,800,000
310,000 Sinclair Broadcasting
Group (a)....................... 6,431,931 5,037,500
137,000 USA Networks, Inc. (a)............ 5,601,715 6,147,875
100,000 Viacom, Inc. Class B (a).......... 3,411,951 4,206,250
------------ ------------
29,766,976 29,056,625
------------ ------------
BROKERAGE AND INVESTMENT - 1.68%
140,000 Merrill Lynch & Co., Inc.......... 9,965,452 10,447,500
------------ ------------
BUILDING MATERIALS - 1.25%
275,000 Masco Corp........................ 7,601,911 7,785,937
------------ ------------
BUSINESS SERVICES - 4.69%
100,000 Automatic Data Processing, Inc.... 4,638,190 3,931,250
150,000 Ecolab, Inc....................... 6,589,377 5,634,375
105,000 First Data Corp................... 4,768,869 4,620,000
80,500 Fiserv, Inc. (a).................. 1,586,417 2,480,406
124,000 Tyco International Ltd............ 10,542,794 12,562,750
------------ ------------
28,125,647 29,228,781
------------ ------------
CABLE TELEVISION - 0.71%
67,000 MediaOne Group, Inc. (a).......... 5,017,533 4,405,250
------------ ------------
CHEMICALS - 0.48%
47,000 du Pont (E.I.) de Nemours & Co.... 2,852,328 2,978,631
------------ ------------
CHEMICALS-SPECIALTY - 0.30%
38,200 Minerals Technologies, Inc........ 1,951,863 1,890,900
------------ ------------
COMPUTER-COMMUNICATION EQUIPMENT -
6.56%
568,000 Cabletron Systems, Inc. (a)....... 8,121,801 9,549,500
100,000 Cisco Systems, Inc. (a)........... 2,669,914 6,781,250
35,000 Dell Computer Corp. (a)........... 1,564,171 1,708,437
70,000 Equant NV NY Shares (a)........... 5,180,000 6,164,375
272,000 NCR Corp. (a)..................... 13,051,200 11,900,000
60,000 Sun Microsystems, Inc. (a)........ 4,724,688 4,770,000
------------ ------------
35,311,774 40,873,562
------------ ------------
COMPUTER-HARDWARE - 0.18%
11,800 Gateway, Inc. (a)................. 979,732 1,143,862
------------ ------------
COMPUTER-SOFTWARE - 2.28%
76,000 Legato Systems, Inc. (a).......... 3,114,923 3,272,750
118,000 Microsoft Corp. (a)............... 4,787,929 10,922,375
------------ ------------
7,902,852 14,195,125
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- -------- ------------ ------------
<C> <S> <C> <C>
CONSUMER GOODS - 1.92%
155,000 Colgate-Palmolive Co.............. $ 7,987,153 $ 8,292,500
64,000 Kimberly-Clark Corp............... 3,349,463 3,644,000
------------ ------------
11,336,616 11,936,500
------------ ------------
COSMETICS AND SUNDRIES - 0.48%
72,900 International Flavors &
Fragrances, Inc................. 3,462,744 2,970,675
------------ ------------
DIVERSIFIED COMPANIES - 1.17%
77,000 Minnesota Mining and Manufacturing
Co.............................. 6,748,988 7,276,500
------------ ------------
DRUGS - 5.29%
162,500 American Home Products Corp....... 7,378,002 6,743,750
124,000 Biovail Corp.
International (a)............... 6,289,320 7,168,750
95,000 Bristol-Myers Squibb Co........... 6,565,939 6,685,625
188,000 Forest Laboratories, Inc. (a)..... 7,019,618 9,106,250
32,000 Johnson & Johnson................. 3,251,459 3,272,000
------------ ------------
30,504,338 32,976,375
------------ ------------
ELECTRIC-PRODUCTS - 1.34%
49,000 Honeywell, Inc.................... 4,659,198 5,561,500
100,000 Molex, Inc. Class A............... 2,737,500 2,812,500
------------ ------------
7,396,698 8,374,000
------------ ------------
ELECTRICAL EQUIPMENT - 2.09%
116,000 General Electric Co............... 11,209,853 13,028,250
------------ ------------
ELECTRONIC-CONTROLS AND EQUIPMENT
- 0.59%
35,000 Hewlett-Packard Co................ 3,278,226 3,688,125
------------ ------------
ELECTRONIC-SEMICONDUCTOR AND
CAPACITOR - 5.25%
45,000 Intel Corp........................ 3,303,751 3,698,437
105,000 JDS Uniphase Corp................. 8,014,376 11,136,562
137,000 Motorola, Inc..................... 10,380,031 12,638,250
64,000 Texas Instruments, Inc............ 1,763,213 5,252,000
------------ ------------
23,461,371 32,725,249
------------ ------------
FINANCIAL SERVICES - 3.08%
51,100 American Express Co............... 6,603,203 7,026,250
25,000 J.P. Morgan & Co., Inc............ 3,581,523 3,229,687
123,000 Marsh & McLennan Companies, Inc. 9,232,480 8,955,937
------------ ------------
19,417,206 19,211,874
------------ ------------
FOOD - 1.21%
103,000 Campbell Soup Co.................. 4,632,881 4,551,313
60,000 Groupe Danone ADR................. 2,234,185 2,977,500
------------ ------------
6,867,066 7,528,813
------------ ------------
HEALTH CARE SERVICES - 3.35%
225,000 Columbia/HCA Healthcare Corp...... 5,393,760 5,540,625
255,000 Foundation Health Systems,
Inc. (a)........................ 4,523,753 3,251,250
750,000 MedPartners, Inc. (a)............. 5,607,600 5,250,000
112,000 United HealthCare Corp............ 6,214,741 6,811,000
------------ ------------
21,739,854 20,852,875
------------ ------------
HOTEL AND GAMING - 0.80%
171,300 Sun International Hotels
Ltd. (a)........................ 7,162,376 4,989,113
------------ ------------
</TABLE>
24
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- -------- ------------ ------------
<C> <S> <C> <C>
INSURANCE - 3.07%
106,000 Ace Ltd........................... $ 3,419,403 $ 2,272,375
160,000 American International Group,
Inc............................. 7,214,876 14,830,000
60,000 Aon Corp.......................... 2,741,260 2,002,500
------------ ------------
13,375,539 19,104,875
------------ ------------
MACHINERY-OIL AND WELL - 1.43%
140,000 Baker Hughes, Inc................. 4,868,447 4,760,000
90,000 Halliburton Co.................... 4,407,784 4,173,750
------------ ------------
9,276,231 8,933,750
------------ ------------
MEDIA - 3.38%
215,000 CBS Corp. (a)..................... 9,420,221 10,105,000
93,000 Gannett Co., Inc.................. 6,427,963 6,318,188
78,000 Time Warner, Inc.................. 1,897,750 4,626,375
------------ ------------
17,745,934 21,049,563
------------ ------------
MEDICAL TECHNOLOGY - 0.46%
37,000 Medtronic, Inc. (with rights)..... 334,507 2,895,250
------------ ------------
MOTION PICTURES - 0.57%
142,000 Cinar Corporation Class B (a)..... 2,391,250 3,550,000
------------ ------------
NATURAL GAS TRANSMISSIONS - 3.85%
276,000 Enron Corp........................ 7,781,233 11,557,500
301,000 Williams Companies, Inc........... 11,200,164 12,416,250
------------ ------------
18,981,397 23,973,750
------------ ------------
OIL AND GAS FIELD SERVICES - 1.22%
50,000 Devon Energy Corp. (a)............ 2,013,265 1,931,250
85,000 Schlumberger Ltd.................. 4,399,543 5,673,750
------------ ------------
6,412,808 7,605,000
------------ ------------
OIL-CRUDE PETROLEUM AND GAS -
8.21%
145,000 Burlington Resources, Inc......... 6,617,785 6,062,813
130,000 Conoco, Inc. Class A.............. 3,395,351 3,477,500
257,142 Conoco, Inc. Class B.............. 6,114,628 6,910,685
350,000 Enron Oil and Gas Co.............. 7,342,712 8,356,250
92,000 Exxon Corp........................ 6,644,213 7,256,500
120,000 Phillips Petroleum Co............. 6,347,925 6,120,000
149,000 Royal Dutch Petroleum Co. NY
Shares 7,229,879 9,219,375
59,000 Texaco, Inc....................... 3,456,956 3,746,500
------------ ------------
47,149,449 51,149,623
------------ ------------
PAPER - 0.48%
54,000 Champion International Corp....... 3,373,383 2,970,000
------------ ------------
PRECISION INSTRUMENTS-TEST,
RESEARCH - 1.57%
142,000 PE Corp. - PE Biosystems Group.... 6,013,607 9,771,375
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- -------- ------------ ------------
<C> <S> <C> <C>
PUBLISHING - 0.87%
172,400 Reader's Digest Association, Inc.
Class A......................... $ 5,331,544 $ 5,387,500
------------ ------------
RESTAURANTS AND FRANCHISING -
0.44%
66,000 McDonald's Corp................... 2,369,556 2,730,750
------------ ------------
RETAIL-DEPARTMENT STORES - 0.72%
63,000 Kohl's Corp. (a).................. 617,041 4,488,750
------------ ------------
RETAIL-DISCOUNT STORES - 1.14%
160,000 Wal-Mart Stores, Inc.............. 4,866,866 7,090,000
------------ ------------
RETAIL-MISCELLANEOUS - 0.62%
30,000 Electronic Arts, Inc. (a)......... 1,930,513 2,058,750
150,000 Musicmaker.com, Inc. (a).......... 2,100,000 1,776,563
------------ ------------
4,030,513 3,835,313
------------ ------------
RETAIL-SPECIALTY - 1.90%
65,500 Home Depot, Inc................... 659,723 4,003,688
166,000 Tandy Corp. (with rights)......... 6,625,240 7,843,500
------------ ------------
7,284,963 11,847,188
------------ ------------
TELECOMMUNICATION EQUIPMENT -
4.07%
52,000 Associated Group, Inc.
Class A (a)..................... 3,242,644 2,918,500
193,000 CIENA Corp. (a)................... 5,426,979 6,779,125
65,000 General Instrument Corp. (a)...... 3,063,488 3,197,188
100,000 Nextel Communications,
Inc. (a)........................ 5,302,110 5,781,250
80,000 Nokia Corp. Class A ADR........... 6,134,312 6,670,000
------------ ------------
23,169,533 25,346,063
------------ ------------
TELECOMMUNICATIONS - 1.13%
62,000 Ameritech Corp.................... 4,675,706 3,913,750
75,000 Voicestream Wireless Corp. (a).... 3,263,315 3,093,750
------------ ------------
7,939,021 7,007,500
------------ ------------
TELEPHONE SERVICES - 3.89%
90,000 ALLTEL Corp....................... 4,526,399 6,086,250
67,000 AT&T Corp......................... 3,044,778 3,015,000
47,900 Bell Atlantic Corp................ 2,785,061 2,933,875
89,600 Frontier Corp..................... 3,285,025 3,757,600
60,000 NEXTLINK Communications, Inc. (a) 3,007,941 3,022,500
27,000 Vodafone AirTouch plc ADR......... 1,358,731 5,415,188
------------ ------------
18,007,935 24,230,413
------------ ------------
UTILITIES-ELECTRIC - 4.47%
240,000 AES Corp. (a)..................... 10,581,007 14,565,000
89,400 Illinova Corp..................... 2,859,459 2,849,625
50,000 Montana Power Co.................. 1,908,102 1,546,875
335,000 Potomac Electric Power Co......... 10,004,900 8,877,500
------------ ------------
25,353,468 27,839,000
------------ ------------
TOTAL COMMON STOCKS............... $530,078,932 $608,475,872
============ ============
</TABLE>
25
<PAGE>
FORTIS STOCK FUNDS
CAPITAL FUND (CONTINUED)
Schedule of Investments
August 31, 1999
SHORT-TERM INVESTMENTS - 2.37%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
- ----------- ------------
<C> <S> <C>
BANKS - 0.00%
$ 16,975 U.S. Bank N.A. Money Market Variable Rate Time Deposit,
Current rate -- 5.05%..................................... $ 16,975
------------
INVESTMENT COMPANY - 2.37%
14,729,038 Norwest Advantage Cash Investment Fund, Current
rate -- 4.93%............................................. 14,729,038
------------
TOTAL SHORT-TERM INVESTMENTS................................ 14,746,013
------------
TOTAL INVESTMENTS IN SECURITIES (COST: $544,824,945) (b).... $623,221,885
============
</TABLE>
(a) Presently not paying dividend income.
(b) At August 31, 1999, the cost of securities for federal income tax purposes
was $545,283,018 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation $ 98,497,032
Unrealized depreciation (20,558,165)
- --------------------------------------------------------------------------
Net unrealized appreciation $ 77,938,867
- --------------------------------------------------------------------------
</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 7.41% of total net assets as of August 31, 1999.
26
<PAGE>
FORTIS STOCK FUNDS
GROWTH FUND, INC.
Schedule of Investments
August 31, 1999
COMMON STOCKS-92.95%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- ----------- ------------ ------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC
RELATIONS-4.36%
228,200 Cox Radio, Inc. (a)............ $ 9,830,789 $ 12,094,600
385,000 Outdoor Systems, Inc. (a)...... 8,726,707 12,440,312
357,500 Young & Rubicam, Inc........... 10,261,412 15,953,437
------------ ------------
28,818,908 40,488,349
------------ ------------
AIR FREIGHT-0.59%
200,500 Atlas Air, Inc. (a)............ 6,366,139 5,463,625
------------ ------------
AUTOMOBILE AND MOTOR VEHICLE
PARTS-1.01%
137,500 Johnson Controls, Inc.......... 9,889,515 9,401,562
------------ ------------
BANKS-0.99%
184,200 Zions Bancorporation........... 9,523,208 9,163,950
------------ ------------
BIOMEDICS, GENETICS RESEARCH
AND DEVELOPMENT-1.00%
165,000 Genzyme Corp. (a).............. 9,736,168 9,312,187
------------ ------------
BROADCASTING-3.51%
165,000 Hispanic Broadcasting
Corp. (a).................... 9,399,442 12,333,750
275,000 Univision Communications,
Inc. (a) 8,513,406 20,281,250
------------ ------------
17,912,848 32,615,000
------------ ------------
BUSINESS SERVICES-2.33%
77,000 ACNielsen Corp. (a)............ 2,141,693 1,925,000
90,900 C.H. Robinson Worldwide,
Inc.......................... 2,345,466 2,863,350
165,000 Microchip Technology,
Inc. (a)..................... 7,972,939 9,033,750
261,300 Viad Corp...................... 6,702,390 7,822,669
------------ ------------
19,162,488 21,644,769
------------ ------------
CABLE TELEVISION-0.27%
330,000 Insight Communications,
Inc. (a)..................... 8,839,907 8,992,500
------------ ------------
CHEMICALS-SPECIALTY-0.69%
130,400 Minerals Technologies, Inc..... 7,120,801 6,454,800
------------ ------------
COMPUTER-COMMUNICATION
EQUIPMENT-1.19%
363,000 Cabletron Systems, Inc. (a).... 5,497,068 6,102,937
165,000 Research in Motion Ltd. (a).... 4,631,258 4,908,750
------------ ------------
10,128,326 11,011,687
------------ ------------
COMPUTER-SOFTWARE-11.15%
220,000 Adaptec, Inc. (a).............. 6,727,270 8,580,000
214,500 Affiliated Computer Services,
Inc. (a)..................... 7,895,613 9,169,875
130,600 BEA Systems, Inc. (a).......... 3,074,191 3,150,725
165,000 Check Point Software
Technologies Ltd. (a)........ 8,868,059 12,725,625
165,000 Comverse Technology,
Inc. (a)..................... 7,784,989 12,870,000
165,000 Exodus Communications,
Inc. (a) 10,605,941 13,261,875
220,000 ISS Group, Inc. (a)............ 6,277,582 5,431,250
165,000 Mercury Interactive
Corp. (a).................... 5,885,257 7,878,750
577,500 National Instruments
Corp. (a).................... 11,637,463 17,288,906
173,300 Peregrine Systems, Inc. (a).... 4,683,610 5,718,900
110,000 Siebel Systems, Inc. (a)....... 5,393,930 7,555,625
------------ ------------
78,833,905 103,631,531
------------ ------------
CONSUMER CYCLICAL-0.67%
93,100 Vastar Resources, Inc.......... 6,085,218 6,202,787
------------ ------------
CONTAINERS AND PACKAGING-0.85%
135,300 Sealed Air Corp. (a)........... 8,155,975 7,948,875
------------ ------------
DRUGS-3.86%
220,000 MedImmune, Inc. (a)............ 9,545,937 22,701,250
160,400 QLT PhotoTherapeutics,
Inc. (a)..................... 8,577,148 13,132,750
------------ ------------
18,123,085 35,834,000
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- ----------- ------------ ------------
<C> <S> <C> <C>
ELECTRICAL-COMPONENTS AND
PARTS-2.24%
220,000 Analog Devices (a)............. $ 9,782,221 $ 11,330,000
220,000 Celestica, Inc. (a)............ 9,085,901 9,515,000
------------ ------------
18,868,122 20,845,000
------------ ------------
ELECTRONIC COMPONENTS-1.15%
115,500 Applied Micro Circuits
Corp. (a).................... 7,864,350 10,654,875
------------ ------------
ELECTRONIC-COMMUNICATION
SECURITY-0.42%
35,800 VeriSign, Inc. (a)............. 1,846,644 3,877,587
------------ ------------
ELECTRONIC-CONTROLS AND
EQUIPMENT-0.75%
55,000 Harmonic, Inc. (a)............. 6,605,846 6,930,000
------------ ------------
ELECTRONIC-SEMICONDUCTOR AND
CAPACITOR-11.42%
110,000 Altera Corp. (a)............... 4,848,974 4,633,750
440,000 Amkor Technology, Inc. (a)..... 6,435,623 7,755,000
310,800 Atmel Corp. (a)................ 9,480,019 12,218,325
550,000 Cypress Semiconductor
Corp. (a) 10,253,783 12,718,750
660,000 Integrated Device Technology,
Inc. (a)..................... 9,179,623 12,870,000
275,000 LSI Logic Corp. (a)............ 10,207,487 15,606,250
181,600 SDL, Inc. (a).................. 9,444,631 14,868,500
467,500 Vishay Intertechnology,
Inc. (a)..................... 7,892,539 10,022,031
220,000 Xilinx, Inc. (a)............... 7,763,247 15,386,250
------------ ------------
75,505,926 106,078,856
------------ ------------
FINANCIAL SERVICES-3.21%
142,600 Ambac Financial Group, Inc..... 8,738,363 7,531,062
137,500 Americredit Corp. (a).......... 1,761,719 1,761,719
214,600 Capital One Financial Corp..... 2,061,368 8,101,150
220,000 Concord EFS, Inc. (a).......... 7,778,165 8,167,500
54,100 Donaldon, Lufkin & Jenrette,
Inc. -- DLJ direct (a)....... 2,210,099 923,081
4,400 Franklin Resources, Inc........ 62,333 158,125
210,000 TD Waterhouse Group,
Inc. (a)..................... 5,006,304 3,163,125
------------ ------------
27,618,351 29,805,762
------------ ------------
FOOD-0.30%
86,200 Suiza Foods Corp. (a).......... 3,266,776 2,747,625
------------ ------------
FREIGHT CARRIERS-1.15%
330,000 Expeditors International of
Washington, Inc.............. 10,336,303 10,663,125
------------ ------------
HOTEL AND GAMING-1.98%
220,000 Harrah's Entertainment,
Inc. (a)..................... 5,229,602 4,950,000
110,000 MGM Grand, Inc. (a)............ 5,672,711 5,403,750
715,000 Park Place Entertainment
Corp. (a) 8,132,204 8,088,437
------------ ------------
19,034,517 18,442,187
------------ ------------
INSURANCE-0.89%
385,000 Ace Ltd........................ 11,181,879 8,253,437
------------ ------------
LEISURE TIME-AMUSEMENTS-1.39%
276,800 Royal Caribbean Cruises Ltd.... 9,743,121 12,957,700
------------ ------------
MACHINERY-1.10%
220,000 Teleflex, Inc.................. 10,127,981 10,230,000
------------ ------------
MEDICAL SUPPLIES-4.89%
385,000 Mallinckrodt Group, Inc........ 11,406,009 12,344,063
167,100 MiniMed, Inc. (a).............. 8,566,261 15,195,656
220,000 St. Jude Medical, Inc.......... 7,772,625 7,975,000
385,000 Sybron International
Corp. (a).................... 9,196,415 9,913,750
------------ ------------
36,941,310 45,428,469
------------ ------------
</TABLE>
27
<PAGE>
FORTIS STOCK FUNDS
GROWTH FUND, INC. (CONTINUED)
Schedule of Investments
August 31, 1999
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- ----------- ------------ ------------
<C> <S> <C> <C>
METALS-FABRICATING - 2.65%
373,800 Waters Corp. (a)............... $ 11,221,477 $ 24,647,438
------------ ------------
OIL AND GAS FIELD
SERVICES-2.23%
165,000 Murphy Oil Corp................ 8,510,314 8,373,750
458,200 Petroleum Geo-Services
ADR (a)...................... 7,223,255 9,364,463
165,000 Union Pacific Resources
Group (a) 3,008,429 2,959,688
------------ ------------
18,741,998 20,697,901
------------ ------------
OIL-CRUDE PETROLEUM AND
GAS-2.84%
110,000 Anadarko Petroleum Corp........ 4,045,698 3,740,000
220,000 Apache Corp.................... 8,349,818 10,010,000
158,100 Barrett Resources Corp. (a).... 5,791,483 5,701,481
290,200 Enron Oil and Gas Co........... 6,993,324 6,928,525
------------ ------------
25,180,323 26,380,006
------------ ------------
OIL-OFFSHORE DRILLING-1.23%
336,900 Transocean Offshore, Inc....... 10,658,421 11,454,600
------------ ------------
PAPER-0.35%
82,500 Williamette Industries, Inc.... 3,550,050 3,269,063
------------ ------------
PRECISION INSTRUMENTS-TEST,
RESEARCH-2.11%
220,000 Millipore Corp................. 8,942,082 8,305,000
165,000 PE Corp. --PE Biosystems Group 10,286,692 11,354,063
------------ ------------
19,228,774 19,659,063
------------ ------------
PRINTING-2.94%
220,000 Electronics for Imaging,
Inc. (a)..................... 9,229,381 12,897,500
330,000 Valassis Communications,
Inc. (a) 11,240,848 14,437,500
------------ ------------
20,470,229 27,335,000
------------ ------------
PUBLISHING-0.96%
165,000 Knight Ridder, Inc............. 8,598,779 8,899,688
------------ ------------
RETAIL-CLOTHING-0.51%
660,000 Venator Group, Inc............. 7,333,447 4,702,500
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- ----------- ------------ ------------
<C> <S> <C> <C>
RETAIL-DEPARTMENT STORES-0.75%
98,400 Kohl's Corp. (a)............... $ 798,960 $ 7,011,000
------------ ------------
RETAIL-MISCELLANEOUS-2.06%
165,000 Best Buy Co., Inc. (a)......... 4,280,537 11,591,250
110,000 Electronic Arts, Inc. (a)...... 7,078,362 7,548,750
------------ ------------
11,358,899 19,140,000
------------ ------------
RETAIL-SPECIALTY-1.49%
33,100 Bed Bath & Beyond, Inc. (a).... 1,276,885 910,250
211,144 Home Depot, Inc................ 1,008,003 12,906,177
------------ ------------
2,284,888 13,816,427
------------ ------------
TELECOMMUNICATION
EQUIPMENT-3.96%
385,000 CIENA Corp. (a)................ 11,703,747 13,523,125
56,100 E-Tek Dynamics, Inc. (a)....... 2,159,850 3,180,169
165,000 Nextel Communications,
Inc. (a)..................... 6,576,625 9,539,063
55,000 QUALCOMM, Inc. (a)............. 8,656,143 10,570,313
------------ ------------
29,096,365 36,812,670
------------ ------------
TELECOMMUNICATIONS-2.14%
468,600 Amdocs Ltd. (a)................ 10,999,394 12,300,750
220,000 CommScope, Inc. (a)............ 5,792,201 7,576,250
------------ ------------
16,791,595 19,877,000
------------ ------------
TELEPHONE SERVICES-0.66%
80,500 MCI WorldCom, Inc. (a)......... 1,316,458 6,097,875
------------ ------------
UTILITIES-ELECTRIC-1.70%
110,000 Calpine Corp. (a).............. 7,574,506 9,968,750
189,400 Montana Power Co............... 6,922,766 5,859,563
------------ ------------
14,497,272 15,828,313
------------ ------------
WASTE DISPOSAL-0.32%
275,000 Republic Services, Inc. (a).... 6,019,349 2,990,625
------------ ------------
TOTAL COMMON STOCKS............ $684,784,901 $863,699,414
============ ============
</TABLE>
SHORT-TERM INVESTMENTS-2.93%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
- ----------- ------------
<C> <S> <C>
BANKS-0.00%
$ 32,512 U.S. Bank N.A. Money Market Variable Rate Time Deposit,
Current rate -- 5.05%..................................... $ 32,512
------------
DIVERSIFIED FINANCE-0.80%
7,401,000 Norwest Bank Associates Corp., Master Variable Rate Note,
Current rate -- 4.97%..................................... 7,401,000
------------
INVESTMENT COMPANY-2.18%
19,805,333 Norwest Advantage Cash Investment Fund, Current
rate -- 4.93%............................................. 19,805,333
------------
TOTAL SHORT-TERM INVESTMENTS................................ 27,238,845
------------
TOTAL INVESTMENTS IN SECURITIES (COST: $712,023,746) (b).... $890,938,259
============
</TABLE>
(a) Presently not paying dividend income.
(b) At August 31, 1999, the cost of securities for federal income tax purposes
was $712,622,841 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $201,032,457
Unrealized depreciation..................................... (22,717,039)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $178,315,418
- --------------------------------------------------------------------------
</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 5.34% of total net assets as of August 31, 1999.
28
<PAGE>
FORTIS STOCK FUNDS
CAPITAL APPRECIATION PORTFOLIO
Schedule of Investments
August 31, 1999
COMMON STOCKS-93.86%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- -------- ------------ ------------
<C> <S> <C> <C>
AIR FREIGHT-1.62%
67,500 Eagle USA Airfreight, Inc. (a).... $ 1,596,407 $ 1,890,000
47,500 Forward Air Corp. (a)............. 1,021,252 1,068,750
------------ ------------
2,617,659 2,958,750
------------ ------------
APPAREL-1.40%
35,000 Bebe Stores, Inc. (a)............. 1,207,657 840,000
50,200 Kenneth Cole Productions, Inc.
Class B (a)..................... 1,334,702 1,716,212
------------ ------------
2,542,359 2,556,212
------------ ------------
BEVERAGE-0.82%
36,000 Beringer Wine Estates Holdings,
Inc. Class B (a)................ 1,358,092 1,498,500
------------ ------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-0.74%
40,000 Enzon, Inc. (a)................... 1,046,952 1,350,000
------------ ------------
BROADCASTING-4.12%
40,000 Citadel Communications
Corp. (a)....................... 1,172,688 1,485,000
23,000 Emmis Communications, Inc.
Class A (a)..................... 1,266,938 1,299,500
27,000 Pixar, Inc. (a)................... 1,299,875 919,687
38,750 Radio One, Inc. (a)............... 1,177,845 1,615,391
37,000 Young Broadcasting, Inc. (a)...... 2,085,656 2,226,937
------------ ------------
7,003,002 7,546,515
------------ ------------
BROKERAGE AND INVESTMENT-1.49%
48,000 Eaton Vance Corp.................. 1,240,198 1,464,000
33,000 Hambrecht & Quist Group (a)....... 1,271,695 1,260,187
------------ ------------
2,511,893 2,724,187
------------ ------------
BUILDING MATERIALS-0.44%
90,000 Dal-Tile International,
Inc. (a)........................ 1,049,400 798,750
------------ ------------
BUSINESS SERVICES-4.04%
25,000 Cheap Tickets, Inc. (a)........... 950,000 925,000
53,500 ChiRex, Inc. (a).................. 1,236,031 1,618,375
65,000 MessageMedia, Inc. (a)............ 1,100,781 865,312
20,000 Micrel, Inc. (a).................. 1,378,750 1,532,500
37,500 Mypoints.com, Inc. (a)............ 300,000 520,312
37,500 Student Advantage, Inc. (a)....... 300,000 450,000
40,000 Verio, Inc. (a)................... 905,624 1,487,500
------------ ------------
6,171,186 7,398,999
------------ ------------
CHEMICALS-SPECIALTY-0.87%
150,000 U.S. Plastic Lumber Co. (a)....... 1,453,125 1,593,750
------------ ------------
COMPUTER-COMMUNICATION
EQUIPMENT-0.99%
35,000 Ancor Communications, Inc. (a).... 1,002,719 927,500
30,000 Research in Motion Ltd. (a)....... 654,063 892,500
------------ ------------
1,656,782 1,820,000
------------ ------------
COMPUTER-HARDWARE-2.54%
70,000 Advanced Digital Information
Corp. (a)....................... 1,360,936 2,257,500
15,000 Gadzoox Networks, Inc. (a)........ 874,237 1,355,625
40,000 Mercury Computer Systems,
Inc. (a)........................ 1,186,564 1,040,000
------------ ------------
3,421,737 4,653,125
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- -------- ------------ ------------
<C> <S> <C> <C>
COMPUTER-SOFTWARE-13.77%
50,000 Advantage Learning Systems,
Inc. (a) $ 1,292,815 $ 1,121,875
28,000 Apex, Inc. (a).................... 362,838 929,250
40,000 Ardent Software, Inc. (a)......... 918,670 950,000
40,000 AVT Corp. (a)..................... 1,148,749 1,130,000
48,000 Business Objects S.A. ADR (a)..... 1,350,778 2,142,000
21,000 Citrix Systems, Inc. (a).......... 596,812 1,197,000
35,000 Clarify, Inc. (a)................. 933,595 1,540,000
11,000 CMGI, Inc. (a).................... 1,012,000 923,312
41,000 Cognizant Technology Solutions
Corp. (a)....................... 1,313,415 989,125
36,000 Deltek Systems, Inc. (a).......... 571,391 544,500
33,000 Emulex Corp. (a).................. 1,201,812 2,274,937
27,500 Information Resource Engineering,
Inc. (a)........................ 856,954 656,562
18,000 InfoSpace.com, Inc. (a)........... 869,251 829,125
37,500 Interliant, Inc. (a).............. 375,000 475,781
67,000 Mercury Interactive Corp. (a)..... 1,184,025 3,199,250
38,000 Micromuse, Inc. (a)............... 1,624,750 2,170,750
55,000 Packeteer, Inc. (a)............... 1,556,171 2,028,125
5,500 Quest Software, Inc. (a).......... 77,000 230,312
15,500 SanDisk Corp. (a)................. 416,500 1,307,812
19,000 WebTrends Corp. (a)............... 627,000 584,250
------------ ------------
18,289,526 25,223,966
------------ ------------
CONSTRUCTION-0.65%
35,000 Astec Industries, Inc. (a)........ 1,271,966 1,185,625
------------ ------------
DRUGS-6.16%
50,000 Accredo Health, Inc. (a).......... 939,062 1,734,375
31,000 Advance Paradigm, Inc. (a)........ 1,881,397 1,643,000
44,000 Alkermes, Inc. (a)................ 1,393,738 1,633,500
25,000 Biovail Corp.
International (a)............... 1,442,204 1,445,312
70,000 Cephalon, Inc. (a)................ 1,162,497 1,325,625
82,500 Jones Pharma, Inc................. 2,152,969 2,232,656
45,000 Pharmacyclics, Inc. (a)........... 1,428,281 1,271,250
------------ ------------
10,400,148 11,285,718
------------ ------------
EDUCATIONAL SERVICES-1.72%
22,500 Career Education Corp. (a)........ 345,000 585,000
45,000 CBT Group plc ADR (a)............. 1,108,125 945,000
37,500 Corinthian Colleges, Inc. (a)..... 659,687 771,094
51,500 National Information Consortium,
Inc. (a)........................ 624,000 849,750
------------ ------------
2,736,812 3,150,844
------------ ------------
ELECTRIC-PRODUCTS-0.44%
100,000 Identix, Inc. (a)................. 1,029,312 800,000
------------ ------------
ELECTRICAL EQUIPMENT-0.80%
30,000 Proxim, Inc. (a).................. 1,355,187 1,462,500
------------ ------------
ELECTRICAL-COMPONENTS AND
PARTS-0.40%
28,000 Power-One, Inc. (a)............... 939,005 740,250
------------ ------------
ELECTRONIC COMPONENTS-6.13%
37,650 Alpha Industries, Inc. (a)........ 831,957 2,143,697
18,000 Applied Micro Circuits
Corp. (a)....................... 740,844 1,660,500
49,500 Genesis Microchip, Inc. (a)....... 1,302,787 1,228,219
20,000 GlobeSpan, Inc. (a)............... 492,625 1,210,000
28,500 MKS Instruments, Inc. (a)......... 399,000 523,687
</TABLE>
29
<PAGE>
FORTIS STOCK FUNDS
CAPITAL APPRECIATION PORTFOLIO (CONTINUED)
Schedule of Investments
August 31, 1999
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- -------- ------------ ------------
<C> <S> <C> <C>
15,000 PMC-Sierra, Inc. (a).............. $ 802,624 $ 1,395,000
15,000 QLogic Corp. (a).................. 1,155,156 1,305,938
25,000 Semtech Corp. (a)................. 1,181,093 1,751,563
------------ ------------
6,906,086 11,218,604
------------ ------------
ELECTRONIC-COMMUNICATION
SECURITY-0.99%
16,800 VeriSign, Inc. (a)................ 1,143,352 1,819,650
------------ ------------
ELECTRONIC-CONTROLS AND
EQUIPMENT-1.86%
27,000 Harmonic, Inc. (a)................ 852,577 3,402,000
------------ ------------
ELECTRONIC-SEMICONDUCTOR AND
CAPACITOR-6.42%
60,000 Exar Corp. (a).................... 1,731,877 2,190,000
50,000 Galileo Technology Ltd. (a)....... 1,977,655 2,606,250
46,000 Kopin Corp. (a)................... 1,337,124 1,658,875
25,000 TranSwitch Corp. (a).............. 1,019,999 1,242,188
67,500 TriQuint Semiconductor,
Inc. (a)........................ 1,960,625 3,569,063
15,000 Zoran Corp (a).................... 510,766 498,750
------------ ------------
8,538,046 11,765,126
------------ ------------
FINANCIAL SERVICES-2.53%
50,000 Advanta Corp. Class A............. 1,075,627 984,375
75,000 American Capital Strategies
Ltd............................. 1,275,000 1,298,438
30,000 NCO Group, Inc. (a)............... 1,312,313 1,365,000
50,000 Prism Financial Corp. (a)......... 1,087,500 987,500
------------ ------------
4,750,440 4,635,313
------------ ------------
FOOD-0.09%
32,500 Diedrich Coffee, Inc. (a)......... 195,000 160,469
------------ ------------
FREIGHT CARRIERS-0.40%
35,000 American Freightways Corp. (a).... 784,923 735,000
------------ ------------
HEALTH CARE SERVICES-1.82%
60,000 Hooper Holmes, Inc................ 1,271,100 1,372,500
40,000 Renal Care Group, Inc. (a)........ 896,329 765,000
40,000 TLC The Laser Center, Inc. (a).... 1,353,438 1,195,000
------------ ------------
3,520,867 3,332,500
------------ ------------
HOTEL AND GAMING-1.59%
32,700 Hollywood Park, Inc. (a).......... 557,862 553,856
80,000 Station Casinos, Inc. (a)......... 1,465,072 1,620,000
45,000 U.S. Franchise Systems, Inc.
Class A (a)..................... 864,689 748,125
------------ ------------
2,887,623 2,921,981
------------ ------------
INSURANCE-0.90%
25,000 E.W. Blanch Holdings, Inc......... 1,522,017 1,656,250
------------ ------------
LEISURE TIME-AMUSEMENTS-0.57%
28,000 Speedway Motorsports, Inc. (a).... 1,208,233 1,044,750
------------ ------------
MACHINERY-0.75%
40,000 Advanced Energy Industries,
Inc. (a)........................ 859,261 1,375,000
------------ ------------
MEDICAL SUPPLIES-3.97%
55,000 Abgenix, Inc. (a)................. 1,254,687 1,766,875
20,000 Gilead Sciences, Inc. (a)......... 1,217,968 1,558,750
31,000 MiniMed, Inc. (a)................. 2,162,612 2,819,063
42,500 PolyMedica Corp. (a).............. 665,938 1,120,938
------------ ------------
5,301,205 7,265,626
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- -------- ------------ ------------
<C> <S> <C> <C>
MEDICAL TECHNOLOGY-2.13%
60,000 ArthoCare Corp. (a)............... $ 1,586,485 $ 2,148,750
41,300 Colorado MEDtech, Inc. (a)........ 772,064 789,863
40,000 Laser Vision Centers, Inc. (a).... 1,300,938 957,500
------------ ------------
3,659,487 3,896,113
------------ ------------
MOTION PICTURES-1.46%
80,000 Macrovision Corp. (a)............. 1,531,495 2,675,000
------------ ------------
OIL AND GAS FIELD SERVICES-0.43%
22,000 Weatherford International,
Inc. (a)........................ 867,629 783,750
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-0.57%
34,000 Noble Affiliates, Inc............. 1,053,079 1,054,000
------------ ------------
PRINTING-0.51%
20,000 Zebra Technologies Corp.
Class A (a) 976,516 940,000
------------ ------------
REAL ESTATE-INVESTMENT TRUST-0.70%
95,000 IndyMac Mortgage Holdings, Inc.... 1,482,523 1,276,563
------------ ------------
RETAIL-CLOTHING-2.09%
25,000 AnnTaylor Stores Corp. (a)........ 1,309,975 828,125
32,000 Children's Place Retail Stores,
Inc. (a) 969,969 1,012,000
47,400 Pacific Sunwear of California,
Inc. (a) 800,235 1,102,050
50,000 Too, Inc. (a)..................... 843,625 878,125
------------ ------------
3,923,804 3,820,300
------------ ------------
RETAIL-DISCOUNT STORES-0.54%
34,000 Ames Department Stores,
Inc. (a)........................ 1,176,132 998,750
------------ ------------
RETAIL-HOUSEHOLD FURNITURE-0.85%
35,000 Cost Plus, Inc. (a)............... 1,252,095 1,557,500
------------ ------------
RETAIL-MISCELLANEOUS-2.44%
47,500 Action Performance Companies,
Inc. (a)........................ 1,295,313 1,172,656
74,300 Insight Enterprises, Inc. (a)..... 1,627,885 2,247,575
30,000 Zale Corp. (a).................... 1,149,015 1,040,625
------------ ------------
4,072,213 4,460,856
------------ ------------
RETAIL-SPECIALTY-0.43%
23,000 Linens 'n Things, Inc. (a)........ 1,099,614 787,750
------------ ------------
RETAIL-VARIETY AND VARIETY MAIL
ORDER-0.63%
69,300 J. Jill Group, Inc. (a)........... 573,058 1,160,775
------------ ------------
TELECOMMUNICATION EQUIPMENT-2.86%
45,000 Genesys Telecommunications
Laboratories, Inc. (a).......... 1,380,312 1,316,250
95,000 Microwave Power Devices,
Inc. (a)........................ 848,519 801,563
30,000 Polycom, Inc. (a)................. 1,189,530 1,096,875
46,000 RF Micro Devices, Inc. (a)........ 1,182,884 2,021,125
------------ ------------
4,601,245 5,235,813
------------ ------------
TELECOMMUNICATIONS-2.48%
50,000 CommScope, Inc. (a)............... 788,075 1,721,875
50,000 Gilat Communications Ltd. (a)..... 699,220 750,000
60,000 Metro One Telecommunications,
Inc. (a)........................ 929,622 840,000
14,500 Net2phone, Inc. (a)............... 217,500 1,232,500
------------ ------------
2,634,417 4,544,375
------------ ------------
</TABLE>
30
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- -------- ------------ ------------
<C> <S> <C> <C>
TELEPHONE SERVICES-2.22%
62,500 Aironet Wireless Communications,
Inc. (a)........................ $ 687,500 $ 781,250
110,000 Digital Microwave Corp. (a)....... 1,627,471 1,505,625
35,000 WinStar Communications,
Inc. (a)........................ 1,168,595 1,778,438
------------ ------------
3,483,566 4,065,313
------------ ------------
TOYS-1.49%
90,000 JAKKS Pacific, Inc. (a)........... 2,013,297 2,722,500
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
- -------- ------------ ------------
<C> <S> <C> <C>
UTILITIES-ELECTRIC-0.49%
10,000 Calpine Corp. (a)................. $ 804,756 $ 906,250
------------ ------------
WASTE DISPOSAL-0.51%
43,000 Waste Connections, Inc. (a)....... 777,109 927,188
------------ ------------
TOTAL COMMON STOCKS............... $141,305,808 $171,892,756
============ ============
</TABLE>
SHORT-TERM INVESTMENTS-3.50%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
- ----------- ------------
<C> <S> <C>
BANKS-0.00%
$ 4,876 U.S. Bank N.A. Money Market Variable Rate Time Deposit,
Current rate -- 5.05%..................................... $ 4,876
INVESTMENT COMPANY-3.50%
6,413,036 Norwest Advantage Cash Investment Fund, Current
rate -- 4.93%............................................. 6,413,036
------------
TOTAL SHORT-TERM INVESTMENTS................................ 6,417,912
------------
TOTAL INVESTMENTS IN SECURITIES (COST: $147,723,720)(b)..... $178,310,668
============
</TABLE>
(a) Presently not paying dividend income.
(b) At August 31, 1999, the cost of securities for federal income tax purposes
was $147,808,835 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $37,785,470
Unrealized depreciation..................................... (7,286,637)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $30,498,833
- -------------------------------------------------------------------------
</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 6.18 % of total net assets as of August 31, 1999.
31
<PAGE>
FORTIS STOCK FUNDS
Statements of Assets and Liabilities
August 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
ASSET
ALLOCATION
PORTFOLIO
------------
<S> <C>
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market (cost $223,168,675;
$50,990,950; $37,240,053;
$544,824,945; $712,023,746; and
$147,723,720
respectively)(Note 1)............... $238,046,840
Collateral for securities lending
transactions (Note 1)............... 21,435,579
Receivables:
Investment securities sold.......... 4,468,993
Interest and dividends.............. 1,515,833
Subscriptions of capital stock...... 49,431
Deferred registration costs
(Note 1)............................ 30,268
------------
TOTAL ASSETS............................ 265,546,944
------------
LIABILITIES:
Payable upon return of securities
loaned (Note 1)..................... 21,435,579
Payable for investment securities
purchased........................... 3,315,696
Redemptions of capital stock.......... 74,084
Payable for investment advisory and
management fees (Note 2)............ 181,201
Payable for distribution fees
(Note 2)............................ 7,828
Accounts payable and accrued
expenses............................ 47,629
------------
TOTAL LIABILITIES....................... 25,062,017
------------
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; 10,000,000,000
shares; respectively................ 185,828,876
Unrealized appreciation (depreciation)
on investments...................... 14,878,165
Undistributed net investment income... 770,223
Accumulated net realized gain from
sale of investments................. 39,007,663
------------
TOTAL NET ASSETS........................ $240,484,927
============
SHARES OUTSTANDING AND NET ASSET VALUE
PER SHARE:
Class A shares (based on net assets of
$177,793,667; $34,302,089;
$26,099,776; $551,550,800;
$734,282,117; and $147,345,824;
respectively and 9,646,484; 2,583,378;
1,759,385; 24,175,177; 23,836,754;
and, 4,088,006 shares outstanding;
respectively)......................... $18.43
------------
Class B shares (based on net assets of
$17,408,201; $6,662,167; $7,167,954;
$24,847,124; $20,235,687; and
$11,425,718; respectively and 951,327;
509,979; 485,448; 1,141,604; 691,524;
and, 327,326 shares outstanding;
respectively)......................... $18.30
------------
Class C shares (based on net assets of
$10,259,001; $2,486,439; $2,444,686;
$5,714,566; $4,629,236; and
$3,611,646; respectively and 563,035;
190,251; 165,576; 262,599; 158,203;
and, 103,370 shares outstanding;
respectively)......................... $18.22
------------
Class H shares (based on net assets of
$34,207,453; $8,045,237; $7,245,386;
$40,759,521; $50,546,890; and
$20,754,718; respectively and
1,870,147; 615,495; 490,737;
1,871,406; 1,726,138; and, 594,017
shares outstanding; respectively)..... $18.29
------------
Class Z shares (based on net assets of
$816,605; $0; $0; $0; $119,547,976;
and $0; respectively and 44,279; 0; 0;
0; 3,828,249; and, 0 shares
outstanding; respectively)............ $18.44
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
GROWTH & CAPITAL
VALUE INCOME CAPITAL 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 $223,168,675;
$50,990,950; $37,240,053;
$544,824,945; $712,023,746; and
$147,723,720 respectively)(Note 1).... $51,467,219 $42,342,571 $623,221,885 $890,938,259 $178,310,668
Collateral for securities lending
transactions (Note 1)................. 2,565,843 1,223,183 60,191,675 -- 33,098,690
Receivables:
Investment securities sold............ -- 883,116 15,164,020 47,771,861 6,665,334
Interest and dividends................ 86,425 104,422 636,429 266,361 106,092
Subscriptions of capital stock........ -- 2,359 7,649 9,929 --
Deferred registration costs (Note 1).... 15,744 15,719 26,299 27,965 17,031
----------- ----------- ------------ ------------ ------------
TOTAL ASSETS............................ 54,135,231 44,571,370 699,247,957 939,014,375 218,197,815
----------- ----------- ------------ ------------ ------------
LIABILITIES:
Payable upon return of securities
loaned (Note 1)..................... 2,565,843 1,223,183 60,191,675 -- 33,098,690
Payable for investment securities
purchased........................... -- 331,569 15,638,116 8,309,030 1,746,063
Redemptions of capital stock.......... 77 -- 45,519 667,654 35,186
Payable for investment advisory and
management fees (Note 2)............ 44,501 37,487 411,595 588,155 137,412
Payable for distribution fees
(Note 2)............................ 1,426 1,299 11,546 14,238 5,566
Accounts payable and accrued
expenses............................ 27,452 20,030 77,495 193,392 36,992
----------- ----------- ------------ ------------ ------------
TOTAL LIABILITIES....................... 2,639,299 1,613,568 76,375,946 9,772,469 35,059,909
----------- ----------- ------------ ------------ ------------
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; 10,000,000,000
shares; respectively................ 47,250,405 37,078,907 399,566,281 548,236,749 101,051,082
Unrealized appreciation (depreciation)
on investments...................... 476,269 5,102,518 78,396,940 178,914,513 30,586,948
Undistributed net investment income... -- 86,036 -- -- --
Accumulated net realized gain from
sale of investments................. 3,769,258 690,341 144,908,790 202,090,644 51,499,876
----------- ----------- ------------ ------------ ------------
TOTAL NET ASSETS........................ $51,495,932 $42,957,802 $622,872,011 $929,241,906 $183,137,906
=========== =========== ============ ============ ============
SHARES OUTSTANDING AND NET ASSET VALUE
PER SHARE:
Class A shares (based on net assets of
$177,793,667; $34,302,089;
$26,099,776; $551,550,800;
$734,282,117; and $147,345,824;
respectively and 9,646,484; 2,583,378;
1,759,385; 24,175,177; 23,836,754;
and, 4,088,006 shares outstanding;
respectively)......................... $13.28 $14.83 $22.81 $30.80 $36.04
----------- ----------- ------------ ------------ ------------
Class B shares (based on net assets of
$17,408,201; $6,662,167; $7,167,954;
$24,847,124; $20,235,687; and
$11,425,718; respectively and 951,327;
509,979; 485,448; 1,141,604; 691,524;
and, 327,326 shares outstanding;
respectively)......................... $13.06 $14.77 $21.77 $29.26 $34.91
----------- ----------- ------------ ------------ ------------
Class C shares (based on net assets of
$10,259,001; $2,486,439; $2,444,686;
$5,714,566; $4,629,236; and
$3,611,646; respectively and 563,035;
190,251; 165,576; 262,599; 158,203;
and, 103,370 shares outstanding;
respectively)......................... $13.07 $14.76 $21.76 $29.26 $34.94
----------- ----------- ------------ ------------ ------------
Class H shares (based on net assets of
$34,207,453; $8,045,237; $7,245,386;
$40,759,521; $50,546,890; and
$20,754,718; respectively and
1,870,147; 615,495; 490,737;
1,871,406; 1,726,138; and, 594,017
shares outstanding; respectively)..... $13.07 $14.76 $21.78 $29.28 $34.94
----------- ----------- ------------ ------------ ------------
Class Z shares (based on net assets of
$816,605; $0; $0; $0; $119,547,976;
and $0; respectively and 44,279; 0; 0;
0; 3,828,249; and, 0 shares
outstanding; respectively)............ -- -- -- $31.23 --
----------- ----------- ------------ ------------ ------------
</TABLE>
33
<PAGE>
FORTIS STOCK FUNDS
Statements of Operations
For the Year Ended August 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
ASSET
ALLOCATION
PORTFOLIO
-----------
<S> <C>
NET INVESTMENT INCOME:
Income:
Interest income..................... $ 5,550,099
Dividend income..................... 1,298,344
Fee income (Note 1)................. 33,957
-----------
Total income.......................... 6,882,400
-----------
Expenses:
Investment advisory and management
fees (Note 2)...................... 2,027,378
Distribution fees (Class A)
(Note 2)........................... 793,378
Distribution fees (Class B)
(Note 2)........................... 139,127
Distribution fees (Class C)
(Note 2)........................... 82,431
Distribution fees (Class H)
(Note 2)........................... 299,261
Registration fees................... 49,252
Shareholders' notices and reports... 47,120
Legal and auditing fees (Note 2).... 31,737
Custodian fees...................... 33,277
Directors' fees and expenses........ 12,312
Other............................... 16,008
-----------
Total expenses........................ 3,531,281
-----------
NET INVESTMENT INCOME (LOSS)............ 3,351,119
-----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS (NOTE 1):
Net realized gain from security
transactions....................... 39,010,869
Net changes in unrealized
appreciation of investments in
securities......................... 694,492
-----------
NET GAIN ON INVESTMENTS................. 39,705,361
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... $43,056,480
===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
GROWTH & CAPITAL
VALUE INCOME CAPITAL GROWTH APPRECIATION
FUND FUND FUND FUND PORTFOLIO
---------- ---------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income....................... $ 70,368 $ 204,343 $ 1,116,137 $ 3,717,619 $ 296,742
Dividend income....................... 749,628 890,669 4,390,536 1,756,103 149,192
Fee income (Note 1)................... 5,023 10,427 141,353 -- 157,736
---------- ---------- ------------ ------------ -----------
Total income............................ 825,019 1,105,439 5,648,026 5,473,722 603,670
---------- ---------- ------------ ------------ -----------
Expenses:
Investment advisory and management
fees (Note 2)....................... 458,155 422,452 4,317,951 6,608,804 1,342,008
Distribution fees (Class A)
(Note 2)............................ 73,006 64,053 1,232,500 1,743,891 516,905
Distribution fees (Class B)
(Note 2)............................ 61,446 66,522 199,594 170,267 86,700
Distribution fees (Class C)
(Note 2)............................ 24,157 25,667 47,194 38,171 29,009
Distribution fees (Class H)
(Note 2)............................ 80,526 74,051 348,841 449,912 163,664
Registration fees..................... 42,300 44,580 70,816 70,000 44,300
Shareholders' notices and reports..... 10,030 9,904 162,237 261,637 29,600
Legal and auditing fees (Note 2)...... 20,801 15,737 56,600 64,491 18,653
Custodian fees........................ 26,256 5,469 43,900 48,815 52,842
Directors' fees and expenses.......... 2,425 1,945 33,833 43,399 7,506
Other................................. 3,202 2,798 37,189 65,696 10,179
---------- ---------- ------------ ------------ -----------
Total expenses.......................... 802,304 733,178 6,550,655 9,565,083 2,301,366
---------- ---------- ------------ ------------ -----------
NET INVESTMENT INCOME (LOSS)............ 22,715 372,261 (902,629) (4,091,361) (1,697,696)
---------- ---------- ------------ ------------ -----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS (NOTE 1):
Net realized gain from security
transactions....................... 4,641,417 697,531 146,221,226 246,700,072 64,284,638
Net changes in unrealized
appreciation of investments in
securities......................... 3,785,706 4,739,460 5,652,886 43,202,949 20,500,923
---------- ---------- ------------ ------------ -----------
NET GAIN ON INVESTMENTS................. 8,427,123 5,436,991 151,874,112 289,903,021 84,785,561
---------- ---------- ------------ ------------ -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... $8,449,838 $5,809,252 $150,971,483 $285,811,660 $83,087,865
========== ========== ============ ============ ===========
</TABLE>
35
<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, 1999 AUGUST 31, 1998
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income................. $ 3,351,119 $ 3,947,032
Net realized gain from security
transactions........................ 39,010,869 24,129,373
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... 694,492 (23,341,382)
------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 43,056,480 4,735,023
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A............................. (2,706,452) (3,530,865)
Class B............................. (134,831) (143,082)
Class C............................. (80,197) (89,621)
Class H............................. (295,334) (329,951)
From net realized gains on investments
Class A............................. (17,281,875) (17,863,647)
Class B............................. (1,236,960) (930,570)
Class C............................. (718,270) (594,047)
Class H............................. (2,773,052) (2,139,737)
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (25,226,971) (25,621,520)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (1,577,016 and 1,109,799
shares)............................ 29,377,979 20,793,396
Class B (399,109 and 206,273
shares)............................ 7,397,117 3,816,059
Class C (279,948 and 140,714
shares)............................ 5,089,730 2,591,158
Class H (668,742 and 550,316
shares)............................ 12,347,244 10,208,415
Class Z (44,279 and 0 shares)....... 825,685 --
Proceeds from shares issued as a
result of reinvested dividends
Class A (1,057,067 and 1,160,677
shares)............................ 18,789,494 19,984,798
Class B (75,874 and 61,525
shares)............................ 1,338,956 1,051,151
Class C (44,382 and 39,182
shares)............................ 780,177 666,985
Class H (168,973 and 138,497
shares)............................ 2,980,951 2,364,813
Less cost of repurchase of shares
Class A (1,971,301 and 1,543,509
shares)............................ (36,665,720) (28,876,194)
Class B (114,596 and 72,269
shares)............................ (2,123,372) (1,344,891)
Class C (103,696 and 86,062
shares)............................ (1,910,835) (1,563,619)
Class H (335,905 and 229,288
shares)............................ (6,230,286) (4,274,549)
------------ ------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.......................... 31,997,120 25,417,522
------------ ------------
TOTAL INCREASE IN NET ASSETS............ 49,826,629 4,531,025
NET ASSETS:
Beginning of year..................... 190,658,298 186,127,273
------------ ------------
End of year (includes undistributed
net investment income of $770,223
and $635,918, respectively)......... $240,484,927 $190,658,298
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 1999 AUGUST 31, 1998
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income................. $ 22,715 $ 103,235
Net realized gain from security
transactions........................ 4,641,417 4,405,530
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... 3,785,706 (6,711,081)
----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. 8,449,838 (2,202,316)
----------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A............................. (90,265) (116,019)
From net realized gains on investments
Class A............................. (2,398,431) (1,834,718)
Class B............................. (554,270) (316,546)
Class C............................. (228,122) (128,889)
Class H............................. (753,192) (582,859)
----------- ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (4,024,280) (2,979,031)
----------- ------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (1,189,789 and 874,678
shares)............................ 15,808,648 12,265,360
Class B (148,047 and 247,000
shares)............................ 1,931,875 3,441,440
Class C (59,026 and 102,283
shares)............................ 769,872 1,427,509
Class H (134,878 and 319,681
shares)............................ 1,761,525 4,443,733
Proceeds from shares issued as a
result of reinvested dividends
Class A (189,376 and 147,749
shares)............................ 2,382,340 1,917,777
Class B (43,123 and 24,075
shares)............................ 536,455 310,563
Class C (17,988 and 9,863 shares)... 223,950 127,233
Class H (59,339 and 44,057
shares)............................ 738,771 568,335
Less cost of repurchase of shares
Class A (690,036 and 745,823
shares)............................ (9,083,209) (10,582,157)
Class B (90,451 and 47,076
shares)............................ (1,189,002) (652,071)
Class C (56,624 and 17,164
shares)............................ (743,072) (243,534)
Class H (177,439 and 130,647
shares)............................ (2,317,578) (1,826,504)
----------- ------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.......................... 10,820,575 11,197,684
----------- ------------
TOTAL INCREASE IN NET ASSETS............ 15,246,133 6,016,337
NET ASSETS:
Beginning of year..................... 36,249,799 30,233,462
----------- ------------
End of year (includes undistributed
net investment income of $0 and
$63,712, respectively).............. $51,495,932 $ 36,249,799
=========== ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
GROWTH & INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 1999 AUGUST 31, 1998
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income................. $ 372,261 $ 450,371
Net realized gain from security
transactions........................ 697,531 1,099,245
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... 4,739,460 (2,106,124)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. 5,809,252 (556,508)
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A............................. (303,045) (301,319)
Class B............................. (41,733) (34,770)
Class C............................. (17,399) (16,440)
Class H............................. (49,939) (57,011)
From net realized gains on investments
Class A............................. (643,674) (10,124)
Class B............................. (159,781) (2,098)
Class C............................. (67,580) (1,029)
Class H............................. (193,318) (3,660)
----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (1,476,469) (426,451)
----------- -----------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (566,946 and 884,571
shares)............................ 8,501,033 12,851,409
Class B (161,596 and 259,849
shares)............................ 2,427,125 3,766,301
Class C (48,678 and 101,311
shares)............................ 718,618 1,476,183
Class H (159,572 and 235,030
shares)............................ 2,374,853 3,401,436
Proceeds from shares issued as a
result of reinvested dividends
Class A (63,617 and 20,537
shares)............................ 919,640 295,600
Class B (13,800 and 2,527 shares)... 198,917 36,284
Class C (5,772 and 1,174 shares).... 83,171 16,824
Class H (16,192 and 4,142 shares)... 233,312 59,106
Less cost of repurchase of shares
Class A (462,252 and 378,949
shares)............................ (6,967,771) (5,467,953)
Class B (81,905 and 47,488
shares)............................ (1,227,313) (680,889)
Class C (57,345 and 33,012
shares)............................ (853,460) (477,648)
Class H (164,161 and 150,375
shares)............................ (2,458,927) (2,206,474)
----------- -----------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.......................... 3,949,198 13,070,179
----------- -----------
TOTAL INCREASE IN NET ASSETS............ 8,281,981 12,087,220
NET ASSETS:
Beginning of year..................... 34,675,821 22,588,601
----------- -----------
End of year (includes undistributed
net investment income of $86,036 and
$125,891, respectively)............. $42,957,802 $34,675,821
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
CAPITAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 1999 AUGUST 31, 1998
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment loss................... $ (902,629) $ (1,275,290)
Net realized gain from security
transactions........................ 146,221,226 99,276,929
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... 5,652,886 (90,739,760)
-------------- ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 150,971,483 7,261,879
-------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments
Class A............................. (87,040,747) (51,765,513)
Class B............................. (2,796,230) (1,230,974)
Class C............................. (665,336) (528,829)
Class H............................. (5,017,579) (2,412,647)
-------------- ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (95,519,892) (55,937,963)
-------------- ------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (10,587,633 and 1,862,268
shares)............................ 236,382,465 47,595,909
Class B (389,224 and 147,489
shares)............................ 8,333,221 3,672,027
Class C (90,310 and 139,698
shares)............................ 1,911,035 3,497,435
Class H (632,945 and 241,584
shares)............................ 13,448,386 6,064,134
Proceeds from shares issued as a
result of reinvested dividends
Class A (4,497,809 and 2,201,521
shares)............................ 79,971,053 47,971,130
Class B (159,215 and 57,622
shares)............................ 2,718,124 1,226,194
Class C (38,657 and 11,228
shares)............................ 659,875 238,938
Class H (280,596 and 107,308
shares)............................ 4,792,688 2,284,583
Less cost of repurchase of shares
Class A (9,187,334 and 3,138,422
shares)............................ (203,714,963) (79,897,413)
Class B (134,973 and 59,107
shares)............................ (2,875,169) (1,460,979)
Class C (62,180 and 93,825
shares)............................ (1,330,943) (2,064,335)
Class H (410,031 and 130,973
shares)............................ (8,719,318) (3,224,275)
Issuance of shares in connection with
fund merger (Note 3)
Class A (4,303,728 and 0 shares).... 77,701,653 --
Class B (298,388 and 0 shares)...... 5,171,124 --
Class C (82,934 and 0 shares)....... 1,437,049 --
Class H (586,642 and 0 shares)...... 10,173,846 --
-------------- ------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.......................... 226,060,126 25,903,348
-------------- ------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 281,511,717 (22,772,736)
NET ASSETS:
Beginning of year..................... 341,360,294 364,133,030
-------------- ------------
End of year........................... $ 622,872,011 $341,360,294
============== ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 1999 AUGUST 31, 1998
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment loss................... $ (4,091,361) $ (2,778,444)
Net realized gain from security
transactions........................ 246,700,072 192,064,434
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... 43,202,949 (269,075,788)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. 285,811,660 (79,789,798)
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From realized gains on investments
Class A............................. (184,308,860) (73,567,568)
Class B............................. (4,328,601) (1,380,595)
Class C............................. (982,671) (263,230)
Class H............................. (11,797,065) (3,821,196)
Class Z............................. (29,609,385) (11,439,433)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (231,026,582) (90,472,022)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (20,454,621 and 8,712,019
shares)............................ 608,315,710 316,513,028
Class B (195,729 and 137,137
shares)............................ 5,568,918 4,825,473
Class C (51,195 and 39,174
shares)............................ 1,488,735 1,368,169
Class H (446,438 and 334,801
shares)............................ 12,868,880 11,860,557
Class Z (573,572 and 633,162
shares)............................ 17,237,982 22,701,753
Proceeds from shares issued as a
result of reinvested dividends
Class A (6,493,303 and 2,215,552
shares)............................ 175,708,779 70,609,674
Class B (165,721 and 44,166
shares)............................ 4,282,243 1,370,898
Class C (37,976 and 8,466 shares)... 981,304 262,702
Class H (452,647 and 121,751
shares)............................ 11,705,442 3,780,372
Class Z (1,045,590 and 344,351
shares)............................ 28,628,247 11,036,437
Less cost of repurchase of shares
Class A (22,649,562 and 11,076,500
shares)............................ (675,171,668) (403,375,496)
Class B (100,305 and 83,531
shares)............................ (2,869,629) (2,961,085)
Class C (25,873 and 17,551
shares)............................ (742,673) (618,203)
Class H (366,624 and 219,058
shares)............................ (10,603,511) (7,761,611)
Class Z (970,240 and 797,075
shares)............................ (29,737,905) (29,021,990)
-------------- --------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.......................... 147,660,854 590,678
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 202,445,932 (169,671,142)
NET ASSETS:
Beginning of year..................... 726,795,974 896,467,116
-------------- --------------
End of year........................... $ 929,241,906 $ 726,795,974
============== ==============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40
<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, 1999 AUGUST 31, 1998
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment loss................... $ (1,697,696) $ (1,429,668)
Net realized gain from security
transactions........................ 64,284,638 21,798,973
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... 20,500,923 (35,067,587)
-------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. 83,087,865 (14,698,282)
-------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From realized gains on investments
Class A............................. (25,279,675) --
Class B............................. (1,974,092) --
Class C............................. (717,375) --
Class H............................. (3,822,075) --
-------------- ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (31,793,217) --
-------------- ------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (4,148,860 and 1,784,435
shares)............................ 120,742,519 60,422,475
Class B (94,645 and 67,943
shares)............................ 2,801,141 2,245,080
Class C (464,149 and 69,065
shares)............................ 13,807,732 2,233,307
Class H (156,855 and 143,196
shares)............................ 4,661,652 4,725,103
Proceeds from shares issued as a
result of reinvested dividends
Class A (934,539 and 0 shares)...... 24,709,211 --
Class B (75,995 and 0 shares)....... 1,953,810 --
Class C (27,678 and 0 shares)....... 712,165 --
Class H (147,544 and 0 shares)...... 3,796,302 --
Less cost of repurchase of shares
Class A (4,016,217 and 2,208,559
shares)............................ (119,898,749) (74,574,459)
Class B (69,099 and 59,677
shares)............................ (2,024,359) (1,999,115)
Class C (457,661 and 61,977
shares)............................ (13,737,717) (1,979,707)
Class H (170,725 and 126,141
shares)............................ (5,069,238) (4,222,152)
-------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARE TRANSACTIONS............... 32,454,469 (13,149,468)
-------------- ------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 83,749,117 (27,847,750)
NET ASSETS:
Beginning of year..................... 99,388,789 127,236,539
-------------- ------------
End of year........................... $ 183,137,906 $ 99,388,789
============== ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
41
<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
fund are as follows:
- The objective 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 a
concept of fundamental value.
- 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 Fortis Growth Fund is short and long-term capital
appreciation. Current income is only a secondary objective.
- The objective of Fortis 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 Fortis Advantage Portfolios, Fortis Equity Portfolios and Fortis Growth
Fund offer Class A, Class B, Class C and Class H shares. Fortis Growth Fund
and Advantage Asset Allocation also issue Class Z shares.
Class A shares are sold with a front-end sales charge. Class B and H shares
are sold without a front-end sales charge and may be subject to a contingent
deferred sales charge 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 or a contingent
deferred sales charge and have no distribution fees. 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.
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, 1999, 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............ $ 358,827,314 $ 345,181,436
Value Fund............................ 126,722,974 117,357,293
Growth & Income Fund.................. 30,986,328 25,613,968
Capital Fund.......................... 1,087,102,044 934,852,135
Growth Fund........................... 1,332,253,162 1,393,648,746
Capital Appreciation Portfolio........ 388,442,393 372,884,100
</TABLE>
The amount included in the cost of purchases for Capital Fund that was
associated with the fund merger as described in Note 3 is $73,752,769.
42
<PAGE>
- --------------------------------------------------------------------------------
LENDING OF PORTFOLIO SECURITIES: At August 31, 1999, securities were on loan
to brokers from the funds. For collateral, the fund's custodian received cash
which is maintained in a separate account and invested by the custodian in
short-term investment vehicles. The risks to the funds in security lending
transactions are that the borrower may not provide additional collateral when
required or return the securities when due and that the proceeds from the
sale of investments made with cash collateral received will be less than
amounts required to be returned to the borrowers. Value of securities on loan
and fee income from securities lending was as follows for the year ended
August 31, 1999:
<TABLE>
<CAPTION>
Fee Income
For the Year
Ended
Securities August 31,
On Loan Collateral 1999
<S> <C> <C> <C>
--------------------------------------------------------------------
Asset Allocation Portfolio..... $19,671,619 $21,435,579 $ 33,957
Value Fund..................... 2,346,125 2,565,843 5,023
Growth & Income Fund........... 1,112,813 1,223,183 10,427
Capital Fund................... 54,168,302 60,191,675 141,353
Capital Appreciation
Portfolio.................... 30,086,341 33,098,690 157,736
</TABLE>
FEDERAL 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 Accumulated
Income Paid-in-Capital Gains
<S> <C> <C> <C>
---------------------------------------------------------------------
Value Fund................ $ 3,838 -- $ (3,838)
Capital Fund.............. $ 902,629 -- $ (902,629)
Growth Fund............... $4,091,361 $(4,091,361) --
Capital Appreciation
Portfolio............... $1,697,696 -- $(1,697,696)
</TABLE>
DEFERRED COSTS: Registration costs are deferred and charged to income over
the registration period.
INCOME AND CAPITAL GAINS DISTRIBUTIONS: It is the policy of Fortis Asset
Allocation Portfolio, and Fortis Growth & Income Fund to pay quarterly
distributions from net investment income; Fortis Capital Appreciation
Portfolio, Fortis Value Fund, Fortis Capital 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, 1999 investments in securities for the
Asset Allocation Portfolio and the Growth & Income Fund included issues that
have been determined by fund management to be illiquid. The funds currently
limit investments in illiquid securities to 15% of net assets; at market
value, at the date of purchase. The aggregate value of such securities at
August 31, 1999, was $2,932,654 in the Asset Allocation Portfolio; $1,664,925
in the Growth & Income Fund, which represents 1.22% and 3.88% of net assets,
respectively. 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.
BANK BORROWINGS: Several Fortis Funds, including Asset Allocation Portfolio,
Value Fund, Growth & Income Fund, Capital Fund and Capital Appreciation
Portfolio, have a revolving credit agreement with Norwest Bank Minnesota
N.A., whereby the funds are permitted to have a bank borrowing for temporary
and emergency purposes to meet large redemption requests by shareholders; and
cover securities purchased when matched or when earlier trades have failed.
The agreement, which enables the funds to participate with other Fortis
Funds, permits borrowings up to $25 million, collectively. Interest is
expensed to each participating fund based on its borrowings and will be
calculated at the borrowers option of: 1) the Prime Index; 2) the Federal
Funds rate plus a "Margin" of 37.5 basis points, or; 3) the Libor rate plus a
"Margin" of 37.5 basis points. The Prime Index is defined as the higher of:
A) the rate that Norwest Bank Minnesota N.A. announces from time to time as
its prime rate or B) the Federal Funds rate plus 50 basis points. Each fund
pays a commitment fee equal to its pro rata share of the amount of the credit
facility at a rate of 0.08% per annum. The funds had no borrowings during the
year ended August 31, 1999.
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 Growth Fund, and Fortis
Capital
43
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
Appreciation Portfolio at an annual rate of 1.00% 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, 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...... $560,091 $26,495 $4,397 $ 75,322
Value Fund...................... 119,797 16,765 1,396 29,900
Growth & Income Fund............ 154,643 19,395 1,422 39,061
Capital Fund.................... 817,382 30,726 2,747 116,145
Growth Fund..................... 977,891 35,925 1,152 133,254
Capital Appreciation
Portfolio..................... 317,396 20,757 741 77,215
</TABLE>
For the year ended August 31, 1999, legal fees and expenses were paid as
follows to a law firm of which the secretary of the fund is a partner.
<TABLE>
<CAPTION>
Amount
<S> <C>
--------------------------------------------------------------------
Asset Allocation Portfolio.................................. $ 9,362
Value Fund.................................................. 1,986
Growth & Income Fund........................................ 1,837
Capital Fund................................................ 28,000
Growth Fund................................................. 43,861
Capital Appreciation Portfolio.............................. 5,651
</TABLE>
3. FUND MERGER: Effective with the close of business on October 23, 1998 the
Fortis Fiduciary Fund was merged into Fortis Capital Fund. The merger was
approved by the shareholders of the Fortis Fiduciary Fund. Fortis Capital
Fund will be the surviving entity for financial reporting and income tax
purposes. The merger was accomplished by a tax free exchange as detailed
below:
<TABLE>
<CAPTION>
Net Assets of
Fiduciary Fund on Fiduciary Fund Capital Fund
October 23, 1998 Shares Exchanged Shares Issued
<S> <C> <C> <C>
----------------------------------------------------------------------
Class A.............. $77,701,653 2,451,978 4,303,728
Class B.............. 5,171,124 171,119 298,388
Class C.............. 1,437,049 47,523 82,934
Class H.............. 10,173,846 336,674 586,642
</TABLE>
Fortis Fiduciary Fund's net assets at October 23, 1998 included unrealized
appreciation of $20,759,680, accumulated net realized losses of ($347,629)
and capital stock of $74,071,621.
The net assets of Fortis Capital Funds classes immediately before the merger
were as follows:
<TABLE>
<CAPTION>
Capital Fund Net Assets
<S> <C>
--------------------------------------------------------------------
Class A................................................ $332,341,920
Class B................................................ 10,427,170
Class C................................................ 2,509,913
Class H................................................ 18,726,666
</TABLE>
44
<PAGE>
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS: Selected per share historical data for each of the
Funds was as follows:
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------
Year Ended August 31,
---------------------------------------------------------------
ASSET ALLOCATION 1999 1998 1997 1996 1995++
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Net asset value, beginning of
year............................. $ 16.91 $ 18.98 $ 16.48 $ 16.52 $ 14.44
-------- -------- -------- -------- --------
Operations:
Investment income - net.......... .30 .39 .39 .47 .43
Net realized and unrealized gain
on investments................. 3.47 .13 3.47 .29 2.14
-------- -------- -------- -------- --------
Total from operations.............. 3.77 .52 3.86 .76 2.57
-------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net..... (.29) (.41) (.41) (.47) (.40)
From net realized gains.......... (1.96) (2.18) (.95) (.32) (.09)
Excess distributions of net
realized gains................. -- -- -- (.01) --
-------- -------- -------- -------- --------
Total distributions to
shareholders...................... (2.25) $ (2.59) $ (1.36) $ (.80) $ (.49)
-------- -------- -------- -------- --------
Net asset value, end of year....... $ 18.43 $ 16.91 $ 18.98 $ 16.48 $ 16.52
-------- -------- -------- -------- --------
Total return @..................... 22.96% 2.71% 24.62% 4.73% 18.25%
Net assets end of year (000s
omitted)......................... $177,794 $151,920 $156,734 $136,656 $132,939
Ratio of expenses to average daily
net assets....................... 1.42% 1.44% 1.48% 1.50% 1.57%*
Ratio of net investment income to
average daily net assets......... 1.60% 2.07% 2.22% 2.85% 3.31%*
Portfolio turnover rate............ 159% 104% 109% 89% 94%
<CAPTION>
Class A
-----------------------------------
Year Ended August 31,
-----------------------------------
ASSET ALLOCATION 1994+++
<S> <C>
Net asset value, beginning of
year............................. $ 15.43
--------
Operations:
Investment income - net.......... .37
Net realized and unrealized gain
on investments................. (.31)
--------
Total from operations.............. .06
--------
Distributions to shareholders:
From investment income - net..... (.33)
From net realized gains.......... (.72)
Excess distributions of net
realized gains................. --
--------
Total distributions to
shareholders...................... $ (1.05)
--------
Net asset value, end of year....... $ 14.44
--------
Total return @..................... .48%
Net assets end of year (000s
omitted)......................... $119,395
Ratio of expenses to average daily
net assets....................... 1.55%
Ratio of net investment income to
average daily net assets......... 2.60%
Portfolio turnover rate............ 94%
</TABLE>
<TABLE>
<CAPTION>
Class B
---------------------------------------------------
Year Ended August 31,
---------------------------------------------------
ASSET ALLOCATION 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 16.80 $18.87 $16.40 $16.46 $14.27
------- ------ ------ ------ ------
Operations:
Investment income - net................................... .19 .29 .27 .37 .39
Net realized and unrealized gain on investments........... 3.46 .13 3.47 .29 2.26
------- ------ ------ ------ ------
Total from operations....................................... 3.65 .42 3.74 .66 2.65
------- ------ ------ ------ ------
Distributions to shareholders:
From investment income - net.............................. (.19) (.31) (.32) (.39) (.37)
From net realized gains................................... (1.96) (2.18) (.95) (.32) (.09)
Excess distributions of net realized gains................ -- -- -- (.01) --
------- ------ ------ ------ ------
Total distributions to shareholders......................... (2.15) (2.49) (1.27) (.72) (.46)
------- ------ ------ ------ ------
Net asset value, end of year................................ $ 18.30 $16.80 $18.87 $16.40 $16.46
------- ------ ------ ------ ------
Total return @.............................................. 22.32% 2.14% 23.92% 4.12% 19.00%
Net assets end of year (000s omitted)....................... $17,408 $9,928 $7,462 $4,411 $ 692
Ratio of expenses to average daily net assets............... 1.97% 1.99% 2.03% 2.05% 2.12%*
Ratio of net investment income to average daily net
assets.................................................... 1.05% 1.50% 1.67% 2.34% 2.51%*
Portfolio turnover rate..................................... 159% 104% 109% 89% 94%
</TABLE>
<TABLE>
<S> <C>
* Annualized.
+ For the period from November 14, 1994 (initial offering of
shares) to August 31, 1995.
++ Ten-month period ended August 31, 1995.
+++ For the year ended October 31, 1994.
@ These are the total returns during the periods, including
reinvestment of all dividend and capital gains distributions
without adjustments for sales charge.
</TABLE>
45
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
---------------------------------------------------
Year Ended August 31,
---------------------------------------------------
ASSET ALLOCATION 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 16.74 $18.81 $16.35 $16.41 $14.27
------- ------ ------ ------ ------
Operations:
Investment income - net................................... .19 .29 .26 .37 .39
Net realized and unrealized gain on investments........... 3.44 .13 3.47 .29 2.21
------- ------ ------ ------ ------
Total from operations....................................... 3.63 .42 3.73 .66 2.60
------- ------ ------ ------ ------
Distributions to shareholders:
From investment income - net.............................. (.19) (.31) (.32) (.39) (.37)
From net realized gains................................... (1.96) (2.18) (.95) (.32) (.09)
Excess distributions of net realized gains................ -- -- -- (.01) --
------- ------ ------ ------ ------
Total distributions to shareholders......................... (2.15) (2.49) (1.27) (.72) (.46)
------- ------ ------ ------ ------
Net asset value, end of year................................ $ 18.22 $16.74 $18.81 $16.35 $16.41
------- ------ ------ ------ ------
Total return @.............................................. 22.27% 2.15% 23.93% 4.13% 18.64%
Net assets end of year (000s omitted)....................... $10,259 $5,831 $4,789 $2,641 $ 777
Ratio of expenses to average daily net assets............... 1.97% 1.99% 2.03% 2.05% 2.12%*
Ratio of net investment income to average daily net
assets.................................................... 1.05% 1.51% 1.67% 2.33% 2.52%*
Portfolio turnover rate..................................... 159% 104% 109% 89% 94%
</TABLE>
<TABLE>
<CAPTION>
CLASS H CLASS Z
------------------------------------------------------ ---------
YEAR ENDED AUGUST 31,
------------------------------------------------------
ASSET ALLOCATION 1999 1998 1997 1996 1995+ 1999++++
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year........................ $ 16.79 $ 18.86 $ 16.39 $ 16.44 $14.27 $19.05
------- ------- ------- ------- ------ ------
Operations:
Investment income - net................................. .19 .29 .27 .38 .39 .07
Net realized and unrealized gain on investments......... 3.46 .13 3.47 .29 2.24 (.68)
------- ------- ------- ------- ------ ------
Total from operations..................................... 3.65 .42 3.74 .67 2.63 (.61)
------- ------- ------- ------- ------ ------
Distributions to shareholders:
From investment income - net............................ (.19) (.31) (.32) (.39) (.37) --
From net realized gains................................. (1.96) (2.18) (.95) (.32) (.09) --
Excess distributions of net realized gains.............. -- -- -- (.01) -- --
------- ------- ------- ------- ------ ------
Total distributions to shareholders....................... (2.15) (2.49) (1.27) (.72) (.46) --
------- ------- ------- ------- ------ ------
Net asset value, end of year.............................. $ 18.29 $ 16.79 $ 18.86 $ 16.39 $16.44 $18.44
------- ------- ------- ------- ------ ------
Total return @............................................ 22.32% 2.15% 23.93% 4.19% 18.86% (3.20%)
Net assets end of year (000s omitted)..................... $34,207 $22,979 $17,142 $10,904 $4,676 $ 817
Ratio of expenses to average daily net assets............. 1.97% 1.99% 2.03% 2.05% 2.12%* .97%*
Ratio of net investment income to average daily net
assets.................................................. 1.05% 1.50% 1.67% 2.32% 2.54%* 2.05%*
Portfolio turnover rate................................... 159% 104% 109% 89% 94% 159%
</TABLE>
<TABLE>
<S> <C>
* Annualized.
+ For the period from November 14, 1994 (initial offering of
shares) to August 31, 1995.
++++ For the period from July 27, 1999 (initial offering of
shares) to August 31, 1999.
@ These are the total returns during the periods, including
reinvestment of all dividend and capital gains distributions
without adjustments for sales charge.
</TABLE>
46
<PAGE>
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
-------------------------------------------
Year Ended August 31,
-------------------------------------------
VALUE 1999 1998 1997 1996+
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 11.85 $ 13.51 $ 10.75 $10.00
------- ------- ------- ------
Operations:
Investment income (loss) - net............................ .05 .09 .09 .05
Net realized and unrealized gain (loss) on investments.... 2.73 (.30) 2.94 .70
------- ------- ------- ------
Total from operations....................................... 2.78 (.21) 3.03 .75
------- ------- ------- ------
Distributions to shareholders:
From investment income - net.............................. (.05) (.09) (.06) --
From net realized gains on investments.................... (1.30) (1.36) (.21) --
------- ------- ------- ------
Total distributions to shareholders......................... (1.35) (1.45) (.27) --
------- ------- ------- ------
Net asset value, end of year................................ $ 13.28 $ 11.85 $ 13.51 $10.75
------- ------- ------- ------
Total return @.............................................. 24.10% (2.52%) 28.66% 7.50%
Net assets end of year (000s omitted)....................... $34,302 $22,449 $21,855 $9,847
Ratio of expenses to average daily net assets............... 1.48% 1.52% 1.59% 1.65%*
Ratio of net investment income (loss) to average daily net
assets.................................................... .32% .55% .72% .75%*
Portfolio turnover rate..................................... 266% 260% 93% 41%
</TABLE>
<TABLE>
<CAPTION>
Class B
-----------------------------------------
Year Ended August 31,
-----------------------------------------
VALUE 1999 1998 1997 1996+
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $11.71 $13.39 $10.70 $10.00
------ ------ ------ ------
Operations:
Investment income (loss) - net............................ (.08) (.02) (.01) --
Net realized and unrealized gain (loss) on investments.... 2.73 (.30) 2.94 .70
------ ------ ------ ------
Total from operations....................................... 2.65 (.32) 2.93 .70
------ ------ ------ ------
Distributions to shareholders:
From investment income - net.............................. -- -- (.03) --
From net realized gains on investments.................... (1.30) (1.36) (.21) --
------ ------ ------ ------
Total distributions to shareholders......................... (1.30) (1.36) (.24) --
------ ------ ------ ------
Net asset value, end of year................................ $13.06 $11.71 $13.39 $10.70
------ ------ ------ ------
Total return @.............................................. 23.20% (3.33%) 27.75% 7.00%
Net assets end of year (000s omitted)....................... $6,662 $4,794 $2,480 $ 642
Ratio of expenses to average daily net assets............... 2.23% 2.27% 2.34% 2.40%*
Ratio of net investment income (loss) to average daily net
assets.................................................... (.43%) (.20%) (.04%) --
Portfolio turnover rate..................................... 266% 260% 93% 41%
</TABLE>
<TABLE>
<S> <C>
* 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 adjustment for sales charge.
</TABLE>
47
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
-----------------------------------------
Year Ended August 31,
-----------------------------------------
VALUE 1999 1998 1997 1996+
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $11.72 $13.39 $10.70 $10.00
------ ------ ------ ------
Operations:
Investment income (loss) - net............................ (.08) (.01) (.01) --
Net realized and unrealized gain (loss) on investments.... 2.73 (.30) 2.94 .70
------ ------ ------ ------
Total from operations....................................... 2.65 (.31) 2.93 .70
------ ------ ------ ------
Distributions to shareholders:
From investment income - net.............................. -- -- (.03) --
From net realized gains on investments.................... (1.30) (1.36) (.21) --
------ ------ ------ ------
Total distributions to shareholders......................... (1.30) (1.36) (.24) --
------ ------ ------ ------
Net asset value, end of year................................ $13.07 $11.72 $13.39 $10.70
------ ------ ------ ------
Total return @.............................................. 23.18% (3.24%) 27.75% 7.00%
Net assets end of year (000s omitted)....................... $2,486 $1,991 $1,002 $ 223
Ratio of expenses to average daily net assets............... 2.23% 2.27% 2.34% 2.40%*
Ratio of net investment income (loss) to average daily net
assets.................................................... (.43%) (.20%) (.04%) --
Portfolio turnover rate..................................... 266% 260% 93% 41%
</TABLE>
<TABLE>
<CAPTION>
Class H
-----------------------------------------
Year Ended August 31,
-----------------------------------------
VALUE 1999 1998 1997 1996+
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $11.72 $13.39 $10.70 $10.00
------ ------ ------ ------
Operations:
Investment income (loss) - net............................ (.08) (.01) (.01) --
Net realized and unrealized gain (loss) on investments.... 2.73 (.30) 2.94 .70
------ ------ ------ ------
Total from operations....................................... 2.65 (.31) 2.93 .70
------ ------ ------ ------
Distributions to shareholders:
From investment income - net.............................. -- -- (.03) --
From net realized gains on investments.................... (1.30) (1.36) (.21) --
------ ------ ------ ------
Total distributions to shareholders......................... (1.30) (1.36) (.24) --
------ ------ ------ ------
Net asset value, end of year................................ $13.07 $11.72 $13.39 $10.70
------ ------ ------ ------
Total return @.............................................. 23.18% (3.24%) 27.75% 7.00%
Net assets end of year (000s omitted)....................... $8,045 $7,016 $4,896 $1,605
Ratio of expenses to average daily net assets............... 2.23% 2.27% 2.34% 2.40%*
Ratio of net investment income (loss) to average daily net
assets.................................................... (.43%) (.20%) (.04%) --
Portfolio turnover rate..................................... 266% 260% 93% 41%
</TABLE>
<TABLE>
<S> <C>
* 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 adjustment for sales charge.
</TABLE>
48
<PAGE>
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
-------------------------------------------
Year Ended August 31,
-------------------------------------------
GROWTH & INCOME 1999 1998 1997 1996+
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 13.20 $ 13.06 $ 10.35 $10.00
------- ------- ------- ------
Operations:
Investment income - net................................... .17 .32 .20 .07
Net realized and unrealized gain on investments........... 2.03 .07 2.77 .34
------- ------- ------- ------
Total from operations....................................... 2.20 .39 2.97 .41
------- ------- ------- ------
Distributions to shareholders:
From investment income - net.............................. (.18) (.24) (.16) (.06)
From net realized gains on investments.................... (.39) (.01) (.10) --
------- ------- ------- ------
Total distributions to shareholders......................... (.57) (.25) (.26) (.06)
------- ------- ------- ------
Net asset value, end of year................................ $ 14.83 $ 13.20 $ 13.06 $10.35
------- ------- ------- ------
Total return @.............................................. 16.84% 2.81% 29.00% 4.11%
Net assets end of year (000s omitted)....................... $26,100 $20,994 $13,907 $3,117
Ratio of expenses to average daily net assets............... 1.44% 1.55% 1.75% 2.33%*
Ratio of net investment income to average daily net
assets.................................................... 1.18% 1.71% 1.68% 1.16%*
Portfolio turnover rate..................................... 65% 20% 15% 5%
</TABLE>
<TABLE>
<CAPTION>
Class B
-----------------------------------------
Year Ended August 31,
-----------------------------------------
GROWTH & INCOME 1999 1998 1997 1996+
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $13.16 $13.03 $10.32 $10.00
------ ------ ------ ------
Operations:
Investment income - net................................... .07 .20 .11 .02
Net realized and unrealized gain on investments........... 2.03 .07 2.77 .34
------ ------ ------ ------
Total from operations....................................... 2.10 .27 2.88 .36
------ ------ ------ ------
Distributions to shareholders:
From investment income - net.............................. (.10) (.13) (.07) (.04)
From net realized gains on investments.................... (.39) (.01) (.10) --
------ ------ ------ ------
Total distributions to shareholders......................... (.49) (.14) (.17) (.04)
------ ------ ------ ------
Net asset value, end of year................................ $14.77 $13.16 $13.03 $10.32
------ ------ ------ ------
Total return @.............................................. 16.08% 1.99% 28.16% 3.55%
Net assets end of year (000s omitted)....................... $7,168 $5,159 $2,306 $ 508
Ratio of expenses to average daily net assets............... 2.19% 2.30% 2.50% 3.08%*
Ratio of net investment income to average daily net
assets.................................................... .41% .96% .92% .35%*
Portfolio turnover rate..................................... 65% 20% 15% 5%
</TABLE>
<TABLE>
<S> <C>
* 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.
</TABLE>
49
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
-----------------------------------------
Year Ended August 31,
-----------------------------------------
GROWTH & INCOME 1999 1998 1997 1996+
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $13.16 $13.03 $10.33 $10.00
------ ------ ------ ------
Operations:
Investment income - net................................... .06 .20 .10 .03
Net realized and unrealized gain on investments........... 2.03 .07 2.77 .34
------ ------ ------ ------
Total from operations....................................... 2.09 .27 2.87 .37
------ ------ ------ ------
Distributions to shareholders:
From investment income - net.............................. (.10) (.13) (.07) (.04)
From net realized gains on investments.................... (.39) (.01) (.10) --
------ ------ ------ ------
Total distributions to shareholders......................... (.49) (.14) (.17) (.04)
------ ------ ------ ------
Net asset value, end of year................................ $14.76 $13.16 $13.03 $10.33
------ ------ ------ ------
Total return @.............................................. 16.00% 1.99% 28.03% 3.65%
Net assets end of year (000s omitted)....................... $2,445 $2,217 $1,290 $ 302
Ratio of expenses to average daily net assets............... 2.19% 2.30% 2.50% 3.08%*
Ratio of net investment income to average daily net
assets.................................................... .41% .96% .94% .54%*
Portfolio turnover rate..................................... 65% 20% 15% 5%
</TABLE>
<TABLE>
<CAPTION>
Class H
-----------------------------------------
Year Ended August 31,
-----------------------------------------
GROWTH & INCOME 1999 1998 1997 1996+
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $13.16 $13.03 $10.33 $10.00
------ ------ ------ ------
Operations:
Investment income - net................................... .06 .20 .10 .03
Net realized and unrealized gain on investments........... 2.03 .07 2.77 .34
------ ------ ------ ------
Total from operations....................................... 2.09 .27 2.87 .37
------ ------ ------ ------
Distributions to shareholders:
From investment income - net.............................. (.10) (.13) (.07) (.04)
From net realized gains on investments.................... (.39) (.01) (.10) --
------ ------ ------ ------
Total distributions to shareholders......................... (.49) (.14) (.17) (.04)
------ ------ ------ ------
Net asset value, end of year................................ $14.76 $13.16 $13.03 $10.33
------ ------ ------ ------
Total return @.............................................. 16.00% 1.99% 28.03% 3.65%
Net assets end of year (000s omitted)....................... $7,245 $6,306 $5,085 $1,286
Ratio of expenses to average daily net assets............... 2.19% 2.30% 2.50% 3.08%*
Ratio of net investment income to average daily net
assets.................................................... .41% .96% .93% .44%*
Portfolio turnover rate..................................... 65% 20% 15% 5%
</TABLE>
<TABLE>
<S> <C>
* 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.
</TABLE>
50
<PAGE>
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------
Year Ended August 31,
---------------------------------------------------------
CAPITAL 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 22.37 $ 26.13 $ 21.89 $ 21.22 $ 18.36
-------- -------- -------- -------- --------
Operations:
Investment income (loss) - net............................ (.03) (.08) (.08) .04 .08
Net realized and unrealized gain on investments........... 6.73 .38 7.06 .67 3.62
-------- -------- -------- -------- --------
Total from operations....................................... 6.70 .30 6.98 .71 3.70
-------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net.............................. -- -- (.01) (.04) (.08)
From net realized gains on investments.................... (6.26) (4.06) (2.73) -- (.76)
-------- -------- -------- -------- --------
Total distributions to shareholders......................... (6.26) (4.06) (2.74) (.04) (.84)
-------- -------- -------- -------- --------
Net asset value, end of year................................ $ 22.81 $ 22.37 $ 26.13 $ 21.89 $ 21.22
-------- -------- -------- -------- --------
Total return @.............................................. 37.88% 1.56% 34.57% 3.36% 21.49%
Net assets end of year (000s omitted)....................... $551,551 $312,582 $340,949 $277,587 $291,263
Ratio of expenses to average daily net assets............... 1.10% 1.13% 1.18% 1.21% 1.24%
Ratio of net investment income (loss) to average daily net
assets.................................................... (.08%) (.28%) (.33%) .17% .42%
Portfolio turnover rate..................................... 177% 71% 43% 28% 14%
</TABLE>
<TABLE>
<CAPTION>
Class B
----------------------------------------------------------
Year Ended August 31,
----------------------------------------------------------
CAPITAL 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 21.73 $ 25.67 $ 21.69 $ 21.14 $ 18.35
-------- -------- -------- -------- --------
Operations:
Investment income (loss) - net............................ (.43) (.26) (.35) (.12) --
Net realized and unrealized gain on investments........... 6.73 .38 7.06 .67 3.58
-------- -------- -------- -------- --------
Total from operations....................................... 6.30 .12 6.71 .55 3.58
-------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net.............................. -- -- -- -- (.03)
From net realized gains on investments.................... (6.26) (4.06) (2.73) -- (.76)
-------- -------- -------- -------- --------
Total distributions to shareholders......................... (6.26) (4.06) (2.73) -- (.79)
-------- -------- -------- -------- --------
Net asset value, end of year................................ $ 21.77 $ 21.73 $ 25.67 $ 21.69 $ 21.14
-------- -------- -------- -------- --------
Total return @.............................................. 36.94% .80% 33.55% 2.60% 20.74%
Net assets end of year (000s omitted)....................... $ 24,847 $ 9,339 $ 7,284 $ 4,097 $ 1,527
Ratio of expenses to average daily net assets............... 1.85% 1.88% 1.93% 1.96% 1.99%*
Ratio of net investment income (loss) to average daily net
assets.................................................... (.83%) (1.03%) (1.08%) (.60%) (.36%)*
Portfolio turnover rate..................................... 177% 71% 43% 28% 14%
</TABLE>
<TABLE>
<S> <C>
* 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.
</TABLE>
51
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
----------------------------------------------------------
Year Ended August 31,
----------------------------------------------------------
CAPITAL 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 21.73 $ 25.68 $ 21.68 $ 21.13 $ 18.35
-------- -------- -------- -------- --------
Operations:
Investment income (loss) - net............................ (.44) (.27) (.33) (.12) --
Net realized and unrealized gain on investments........... 6.73 .38 7.06 .67 3.57
-------- -------- -------- -------- --------
Total from operations....................................... 6.29 .11 6.73 .55 3.57
-------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net.............................. -- -- -- -- (.03)
From net realized gains on investments.................... (6.26) (4.06) (2.73) -- (.76)
-------- -------- -------- -------- --------
Total distributions to shareholders......................... (6.26) (4.06) (2.73) -- (.79)
-------- -------- -------- -------- --------
Net asset value, end of year................................ $ 21.76 $ 21.73 $ 25.68 $ 21.68 $ 21.13
-------- -------- -------- -------- --------
Total return @.............................................. 36.87% .76% 33.68% 2.60% 20.68%
Net assets end of year (000s omitted)....................... $ 5,715 $ 2,453 $ 1,432 $ 824 $ 344
Ratio of expenses to average daily net assets............... 1.85% 1.88% 1.93% 1.96% 1.99%*
Ratio of net investment income (loss) to average daily net
assets.................................................... (.83%) (1.03%) (1.08%) (.60%) (.36%)*
Portfolio turnover rate..................................... 177% 71% 43% 28% 14%
</TABLE>
<TABLE>
<CAPTION>
Class H
----------------------------------------------------------
Year Ended August 31,
----------------------------------------------------------
CAPITAL 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 21.74 $ 25.68 $ 21.69 $ 21.14 $ 18.35
-------- -------- -------- -------- --------
Operations:
Investment income (loss) - net............................ (.43) (.26) (.34) (.12) --
Net realized and unrealized gain on investments........... 6.73 .38 7.06 .67 3.58
-------- -------- -------- -------- --------
Total from operations....................................... 6.30 .12 6.72 .55 3.58
-------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net.............................. -- -- -- -- (.03)
From net realized gains on investments.................... (6.26) (4.06) (2.73) -- (.76)
-------- -------- -------- -------- --------
Total distributions to shareholders......................... (6.26) (4.06) (2.73) -- (.79)
-------- -------- -------- -------- --------
Net asset value, end of year................................ $ 21.78 $ 21.74 $ 25.68 $ 21.69 $ 21.14
-------- -------- -------- -------- --------
Total return @.............................................. 36.91% .80% 33.61% 2.60% 20.74%
Net assets end of year (000s omitted)....................... $ 40,760 $ 16,987 $ 14,468 $ 8,052 $ 4,052
Ratio of expenses to average daily net assets............... 1.85% 1.88% 1.93% 1.96% 1.99%*
Ratio of net investment income (loss) to average daily net
assets.................................................... (.83%) (1.03%) (1.06%) (.60%) (.37%)*
Portfolio turnover rate..................................... 177% 71% 43% 28% 14%
</TABLE>
<TABLE>
<S> <C>
* 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.
</TABLE>
52
<PAGE>
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------
Year Ended August 31,
---------------------------------------------------------
GROWTH 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 29.78 $ 37.32 $ 32.14 $ 32.66 $ 26.25
-------- -------- -------- -------- --------
Operations:
Investment income (loss) - net............................ (.13) (.11) (.16) (.11) (.04)
Net realized and unrealized gain (losses) on
investments............................................. 10.72 (3.59) 8.41 1.30 6.95
-------- -------- -------- -------- --------
Total from operations....................................... 10.59 (3.70) 8.25 1.19 6.91
-------- -------- -------- -------- --------
Distributions to shareholders:
From net realized gains................................... (9.57) (3.84) (3.07) (1.71) (.50)
-------- -------- -------- -------- --------
Net asset value, end of period.............................. $ 30.80 $ 29.78 $ 37.32 $ 32.14 $ 32.66
-------- -------- -------- -------- --------
Total return @.............................................. 40.00% (10.59%) 27.01% 4.09% 26.92%
Net assets end of period (000s omitted)..................... $734,282 $581,819 $734,654 $641,061 $670,753
Ratio of expenses to average daily net assets............... 1.06% 1.05% 1.07% 1.09% 1.13%
Ratio of net investment income (loss) to average daily net
assets.................................................... (.44%) (.29%) (.45%) (.33%) (.13%)
Portfolio turnover rate..................................... 166% 61% 28% 32% 27%
</TABLE>
<TABLE>
<CAPTION>
Class B
----------------------------------------------------------
Year Ended August 31,
----------------------------------------------------------
GROWTH 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 28.85 $ 36.53 $ 31.75 $ 32.48 $ 25.85
-------- -------- -------- -------- --------
Operations:
Investment income (loss) - net............................ (.74) (.25) (.56) (.32) (.13)
Net realized and unrealized gain (losses) on
investments............................................. 10.72 (3.59) 8.41 1.30 7.26
-------- -------- -------- -------- --------
Total from operations....................................... 9.98 (3.84) 7.85 .98 7.13
-------- -------- -------- -------- --------
Distributions to shareholders:
From net realized gains................................... (9.57) (3.84) (3.07) (1.71) (.50)
-------- -------- -------- -------- --------
Net asset value, end of period.............................. $ 29.26 $ 28.85 $ 36.53 $ 31.75 $ 32.48
-------- -------- -------- -------- --------
Total return @.............................................. 38.98% (11.25%) 26.02% 3.45% 28.17%
Net assets end of period (000s omitted)..................... $ 20,236 $ 12,417 $ 12,149 $ 6,710 $ 2,179
Ratio of expenses to average daily net assets............... 1.81% 1.80% 1.82% 1.84% 1.88%*
Ratio of net investment income (loss) to average daily net
assets.................................................... (1.19%) (1.04%) (1.19%) (1.07%) (1.09%)*
Portfolio turnover rate..................................... 166% 61% 28% 32% 27%
</TABLE>
<TABLE>
<S> <C>
* 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.
</TABLE>
53
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
----------------------------------------------------------
Year Ended August 31,
----------------------------------------------------------
GROWTH 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 28.85 $ 36.52 $ 31.75 $ 32.49 $ 25.85
-------- -------- -------- -------- --------
Operations:
Investment income (loss) - net............................ (.74) (.24) (.57) (.33) (.10)
Net realized and unrealized gain (losses) on
investments............................................. 10.72 (3.59) 8.41 1.30 7.24
-------- -------- -------- -------- --------
Total from operations....................................... 9.98 (3.83) 7.84 .97 7.14
-------- -------- -------- -------- --------
Distributions to shareholders:
From net realized gains................................... (9.57) (3.84) (3.07) (1.71) (.50)
-------- -------- -------- -------- --------
Net asset value, end of period.............................. $ 29.26 $ 28.85 $ 36.52 $ 31.75 $ 32.49
-------- -------- -------- -------- --------
Total return @.............................................. 38.98% (11.22%) 25.98% 3.41% 28.21%
Net assets end of period (000s omitted)..................... $ 4,629 $ 2,738 $ 2,367 $ 1,077 $ 264
Ratio of expenses to average daily net assets............... 1.81% 1.80% 1.82% 1.84% 1.88%*
Ratio of net investment income to average daily net
assets.................................................... (1.19%) (1.04%) (1.19%) (1.07%) (1.10%)*
Portfolio turnover rate..................................... 166% 61% 28% 32% 27%
</TABLE>
<TABLE>
<CAPTION>
Class H
----------------------------------------------------------
Year Ended August 31,
----------------------------------------------------------
GROWTH 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 28.86 $ 36.54 $ 31.75 $ 32.49 $ 25.85
-------- -------- -------- -------- --------
Operations:
Investment income (loss) - net............................ (.73) (.25) (.55) (.33) (.11)
Net realized and unrealized gain (losses) on
investments............................................. 10.72 (3.59) 8.41 1.30 7.25
-------- -------- -------- -------- --------
Total from operations....................................... 9.99 (3.84) 7.86 .97 7.14
-------- -------- -------- -------- --------
Distributions to shareholders:
From net realized gains................................... (9.57) (3.84) (3.07) (1.71) (.50)
-------- -------- -------- -------- --------
Net asset value, end of period.............................. $ 29.28 $ 28.86 $ 36.54 $ 31.75 $ 32.49
-------- -------- -------- -------- --------
Total return @.............................................. 39.00% (11.25%) 26.05% 3.41% 28.21%
Net assets end of period (000s omitted)..................... $ 50,547 $ 34,453 $ 34,941 $ 21,176 $ 6,867
Ratio of expenses to average daily net assets............... 1.81% 1.80% 1.82% 1.84% 1.88%*
Ratio of net investment income to average daily net
assets.................................................... (1.19%) (1.04%) (1.19%) (1.07%) (1.10%)*
Portfolio turnover rate..................................... 166% 61% 28% 32% 27%
</TABLE>
<TABLE>
<S> <C>
* 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.
</TABLE>
54
<PAGE>
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class Z
---------------------------------------------------
Year Ended August 31,
---------------------------------------------------
GROWTH 1999 1998 1997 1996++
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 30.00 $ 37.47 $ 32.18 $ 31.61
-------- -------- -------- --------
Operations:
Investment income (loss) - net............................ (.06) (.04) (.05) --
Net realized and unrealized gain (losses) on
investments............................................. 10.86 (3.59) 8.41 .57
-------- -------- -------- --------
Total from operations....................................... 10.80 (3.63) 8.36 .57
-------- -------- -------- --------
Distributions to shareholders:
From net realized gains................................... (9.57) (3.84) (3.07) --
-------- -------- -------- --------
Net asset value, end of period.............................. $ 31.23 $ 30.00 $ 37.47 $ 32.18
-------- -------- -------- --------
Total return @.............................................. 40.49% (10.34%) 27.34% 1.80%
Net assets end of period (000s omitted)..................... $119,548 $ 95,370 $112,356 $ 93,006
Ratio of expenses to average daily net assets............... .81% .80% .82% .84%*
Ratio of net investment income to average daily net
assets.................................................... (.19%) (.04%) (.20%) .01%*
Portfolio turnover rate..................................... 166% 61% 28% 32%
</TABLE>
<TABLE>
<S> <C>
* Annualized.
++ For the period from March 1, 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.
</TABLE>
55
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
--------------------------------------------------------------------------------------
Year Ended August 31,
--------------------------------------------------------------------------------------
CAPITAL APPRECIATION 1999 1998 1997 1996 1995++ 1994+++
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year....... $ 26.42 $ 30.60 $ 34.76 $ 30.67 $ 23.05 $ 27.38
-------- -------- -------- -------- -------- --------
Operations:
Investment income (loss) - net......... (.30) (.35) (.26) (.29) (.17) (.12)
Net realized and unrealized gain (loss)
on investments....................... 18.42 (3.83) (2.45) 4.61 7.79 (2.45)
-------- -------- -------- -------- -------- --------
Total from operations.................... 18.12 (4.18) (2.71) 4.32 7.62 (2.57)
-------- -------- -------- -------- -------- --------
Distributions to shareholders:
From net realized gains on
investments.......................... (8.50) -- (1.18) (.23) -- (1.76)
Tax return of capital.................. -- -- (.27) -- -- --
-------- -------- -------- -------- -------- --------
Total distributions to shareholders...... (8.50) -- (1.45) (.23) -- (1.76)
-------- -------- -------- -------- -------- --------
Net asset value, end of year............. $ 36.04 $ 26.42 $ 30.60 $ 34.76 $ 30.67 $ 23.05
-------- -------- -------- -------- -------- --------
Total return @........................... 80.27% (13.66%) (7.89%) 14.21% 33.06% (9.56%)
Net assets end of year (000s omitted).... $147,346 $ 79,813 $105,422 $114,310 $ 90,918 $ 68,352
Ratio of expenses to average daily net
assets................................. 1.50% 1.52% 1.55% 1.56% 1.69%* 1.62%
Ratio of net investment income (loss) to
average daily net assets............... (1.08%) (.97%) (.84%) (.96%) (.82%)* (.61%)
Portfolio turnover rate.................. 271% 47% 25% 34% 21% 36%
</TABLE>
<TABLE>
<CAPTION>
Class B
----------------------------------------------
Year Ended August 31,
----------------------------------------------
CAPITAL APPRECIATION 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 25.90 $ 30.16 $ 34.46 $ 30.57 $ 22.45
-------- -------- -------- -------- --------
Operations:
Investment income (loss) - net............................ (.91) (.43) (.40) (.49) (.35)
Net realized and unrealized gain (loss) on investments.... 18.42 (3.83) (2.45) 4.61 8.47
-------- -------- -------- -------- --------
Total from operations....................................... 17.51 (4.26) (2.85) 4.12 8.12
-------- -------- -------- -------- --------
Distributions to shareholders:
From net realized gains on investments.................... (8.50) -- (1.18) (.23) --
Tax return of capital..................................... -- -- (.27) -- --
-------- -------- -------- -------- --------
Total distributions to shareholders......................... (8.50) -- (1.45) (.23) --
-------- -------- -------- -------- --------
Net asset value, end of year................................ $ 34.91 $ 25.90 $ 30.16 $ 34.46 $ 30.57
-------- -------- -------- -------- --------
Total return @.............................................. 79.35% (14.12%) (8.38%) 13.60% 36.17%
Net assets end of year (000s omitted)....................... $ 11,426 $ 5,849 $ 6,561 $ 4,522 $ 841
Ratio of expenses to average daily net assets............... 2.05% 2.07% 2.10% 2.11% 2.24%*
Ratio of net investment income (loss) to average daily net
assets.................................................... (1.63%) (1.52%) (1.39%) (1.47%) (1.61%)*
Portfolio turnover rate..................................... 271% 47% 25% 34% 21%
</TABLE>
<TABLE>
<S> <C>
* Annualized.
+ For the period from November 14, 1994 (initial offering of
shares) to August 31, 1995.
++ Ten-month period ended August 31, 1995.
+++ For the year ended October 31, 1994.
@ These are the total returns during the period, including
reinvestment of all dividend and capital gains distributions
without adjustments for sales charge.
</TABLE>
56
<PAGE>
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
----------------------------------------------------------
Year Ended August 31,
----------------------------------------------------------
CAPITAL APPRECIATION 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 25.92 $ 30.18 $ 34.48 $ 30.58 $ 22.45
-------- -------- -------- -------- --------
Operations:
Investment income (loss) - net............................ (.90) (.43) (.40) (.48) (.36)
Net realized and unrealized gain (loss) on investments.... 18.42 (3.83) (2.45) 4.61 8.49
-------- -------- -------- -------- --------
Total from operations....................................... 17.52 (4.26) (2.85) 4.13 8.13
-------- -------- -------- -------- --------
Distributions to shareholders:
From net realized gains on investments.................... (8.50) -- (1.18) (.23) --
Tax return of capital..................................... -- -- (.27) -- --
-------- -------- -------- -------- --------
Total distributions to shareholders......................... (8.50) -- (1.45) (.23) --
-------- -------- -------- -------- --------
Net asset value, end of year................................ $ 34.94 $ 25.92 $ 30.18 $ 34.48 $ 30.58
-------- -------- -------- -------- --------
Total return @.............................................. 79.33% (14.12%) (8.38%) 13.62% 36.21%
Net assets end of year (000s omitted)....................... $ 3,612 $ 1,794 $ 1,875 $ 1,004 $ 227
Ratio of expenses to average daily net assets............... 2.05% 2.07% 2.10% 2.11% 2.24%*
Ratio of net investment income (loss) to average daily net
assets.................................................... (1.63%) (1.52%) (1.39%) (1.46%) (1.62%)*
Portfolio turnover rate..................................... 271% 47% 25% 34% 21%
</TABLE>
<TABLE>
<CAPTION>
Class H
----------------------------------------------------------
Year Ended August 31,
----------------------------------------------------------
CAPITAL APPRECIATION 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......................... $ 25.92 $ 30.18 $ 34.48 $ 30.58 $ 22.45
-------- -------- -------- -------- --------
Operations:
Investment income (loss) - net............................ (.90) (.43) (.40) (.48) (.36)
Net realized and unrealized gain (loss) on investments.... 18.42 (3.83) (2.45) 4.61 8.49
-------- -------- -------- -------- --------
Total from operations....................................... 17.52 (4.26) (2.85) 4.13 8.13
-------- -------- -------- -------- --------
Distributions to shareholders:
From net realized gains on investments.................... (8.50) -- (1.18) (.23) --
Tax return of capital..................................... -- -- (.27) -- --
-------- -------- -------- -------- --------
Total distributions to shareholders......................... (8.50) -- (1.45) (.23) --
-------- -------- -------- -------- --------
Net asset value, end of year................................ $ 34.94 $ 25.92 $ 30.18 $ 34.48 $ 30.58
-------- -------- -------- -------- --------
Total return @.............................................. 79.33% (14.12%) (8.38%) 13.62% 36.21%
Net assets end of year (000s omitted)....................... $ 20,755 $ 11,933 $ 13,379 $ 9,575 $ 2,115
Ratio of expenses to average daily net assets............... 2.05% 2.07% 2.10% 2.11% 2.24%*
Ratio of net investment income (loss) to average daily net
assets.................................................... (1.63%) (1.52%) (1.39%) (1.46%) (1.62%)*
Portfolio turnover rate..................................... 271% 47% 25% 34% 21%
</TABLE>
<TABLE>
<S> <C>
* 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.
</TABLE>
57
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Fortis Advantage Portfolios, Inc.
Fortis Equity Portfolios, 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.), and Fortis Growth Fund, Inc.
as of August 31, 1999 and the related statements of operations for the year then
ended, and the statements of changes in net assets for each of the years in the
two-year period ended August 31, 1999 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 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, and Fortis Growth Fund, Inc. as
of August 31, 1999 and the results of their operations for the year then ended,
and the changes in their net assets for each of the years in the two-year period
ended August 31, 1999 and the financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
KPMG LLP
Minneapolis, Minnesota
October 8, 1999
58
<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 of two fiscal
years of the fund. Accordingly, the information needed by shareholders for
income tax purposes will be sent to them in early 2000. Shareholders may wish to
consult a tax advisor on how to report distributions for state and local
purposes.
Fortis Asset Allocation Portfolio, Fortis Value Fund and Fortis Growth & Income
Fund paid income distributions, taxable as dividend income, of which 15.36%,
11.62% and 100% and qualified for deduction by corporations. Detailed below are
the per share distributions made for the fiscal year ended August 31, 1999.
ASSET ALLOCATION
<TABLE>
<CAPTION>
RECORD DATES Class A Class B Class C Class H Class Z
<S> <C> <C> <C> <C> <C>
--------------------------------------------
Ordinary Income Per Share
Net Investment Income Per Share
September 23, 1998.......................................... $0.087 $0.062 $0.062 $0.062 -
December 23, 1998........................................... 0.052 0.026 0.026 0.026 -
March 23, 1998.............................................. 0.080 0.055 0.055 0.055 -
June 23, 1999............................................... 0.071 0.046 0.046 0.046 -
------ ------ ------ ------ ------
Total Distributions......................................... 0.290 0.189 0.189 0.189 -
------ ------ ------ ------ ------
Short-Term Capital Gain Per Share
December 23, 1999........................................... 0.0621 0.0621 0.0621 0.0621 -
------ ------ ------ ------ ------
Long-Term Capital Gain Per Share
December 23, 1999........................................... 1.8979 1.8979 1.8979 1.8979 -
------ ------ ------ ------ ------
VALUE
RECORD DATE
Ordinary Income Per Share
Net Investment Income Per Share
December 18, 1998........................................... $0.049 $ - $ - $ -
------ ------ ------ ------
Total Distributions......................................... 0.049 - - -
------ ------ ------ ------
Short-Term Capital Gain Per Share
December 18, 1998........................................... 0.2455 0.2455 0.2455 0.2455
------ ------ ------ ------
Long-Term Capital Gain Per Share
December 18, 1998........................................... 1.0565 1.0565 1.0565 1.0565
------ ------ ------ ------
GROWTH & INCOME
RECORD DATE
Ordinary Income Per Share
Net Investment Income Per Share
September 23, 1998.......................................... $0.073 $0.046 $0.046 $0.046
December 23, 1998........................................... 0.062 0.034 0.034 0.034
March 23, 1999.............................................. 0.049 0.021 0.021 0.021
------ ------ ------ ------
Total Distributions......................................... 0.184 0.101 0.101 0.101
------ ------ ------ ------
Short-Term Capital Gain Per Share
December 23, 1998........................................... 0.0865 0.0865 0.0865 0.0865
------ ------ ------ ------
Long-Term Capital Gain Per Share
December 23, 1998........................................... 0.3035 0.3035 0.3035 0.3035
------ ------ ------ ------
CAPITAL
RECORD DATE
Ordinary Income Per Share
Net Investment Income Per Share
Total Distributions......................................... $ - $ - $ - $ -
------ ------ ------ ------
Long-Term Capital Gain Per Share
October 19, 1998............................................ 6.2620 6.2620 6.2620 6.2620
------ ------ ------ ------
GROWTH
RECORD DATE
Ordinary Income Per Share
Net Investment Income Per Share
Total Distributions......................................... $ - $ - $ - $ - $ -
------ ------ ------ ------ ------
Long-Term Capital Gain Per Share
December 18, 1998........................................... 9.5700 9.5700 9.5700 9.5700 9.5700
------ ------ ------ ------ ------
CAPITAL APPRECIATION
RECORD DATE
Ordinary Income Per Share
Net Investment Income Per Share
Total Distributions......................................... $ - $ - $ - $ -
------ ------ ------ ------
Long-Term Capital Gain Per Share
December 18,1998............................................ 8.5000 8.5000 8.5000 8.5000
------ ------ ------ ------
</TABLE>
59
<PAGE>
DIRECTORS AND OFFICERS
<TABLE>
<S> <C> <C>
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. PRESIDENT - FORTIS FINANCIAL GROUP,
FORTIS BENEFITS INSURANCE COMPANY AND SENIOR VICE
PRESIDENT, FORTIS 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.
</TABLE>
OFFICERS
Dean C. Kopperud
PRESIDENT AND DIRECTOR
Robert W. Beltz, Jr.
VICE PRESIDENT
James S. Byrd
VICE PRESIDENT
Peggy L. Ettestad
VICE PRESIDENT
Tamara L. Fagely
VICE PRESIDENT AND TREASURER
Howard G. Hudson
VICE PRESIDENT
Dickson W. Lewis
VICE PRESIDENT
Lucinda S. Mezey
VICE PRESIDENT
David A. Peterson
VICE PRESIDENT
Scott R. Plummer
VICE PRESIDENT
Rhonda J. Schwartz
VICE PRESIDENT
Melinda S. Urion
VICE PRESIDENT
Gary N. Yalen
VICE PRESIDENT
Michael J. Radmer
SECRETARY
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INVESTMENT MANAGER, REGISTRAR AND Fortis Advisers, Inc.
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 LLP
MINNEAPOLIS, MINNESOTA
</TABLE>
The use of this material is authorized only when preceded or accompanied by a
prospectus.
60
<PAGE>
FORTIS FINANCIAL GROUP'S OTHER PRODUCTS AND SERVICES
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MUTUAL FUNDS/PORTFOLIOS Fortis Bond Funds MONEY FUND
CONVENIENT ACCESS TO A BROAD U.S. GOVERNMENT SECURITIES FUND
RANGE OF SECURITIES TAX-FREE NATIONAL PORTFOLIO
TAX-FREE MINNESOTA PORTFOLIO
STRATEGIC INCOME FUND
HIGH YIELD PORTFOLIO
Fortis Stock Funds ASSET ALLOCATION PORTFOLIO
VALUE FUND
GROWTH & INCOME FUND
CAPITAL FUND
GLOBAL GROWTH PORTFOLIO
GROWTH FUND
INTERNATIONAL EQUITY PORTFOLIO
CAPITAL APPRECIATION PORTFOLIO
FIXED AND VARIABLE ANNUITIES Fortis Opportunity Fixed FIXED ACCOUNT
TAX-DEFERRED INVESTING & Variable Annuity MONEY MARKET SUBACCOUNT
Masters Variable Annuity U.S. GOVERNMENT SECURITIES SUBACCOUNT
DIVERSIFIED INCOME SUBACCOUNT
Empower Variable GLOBAL BOND SUBACCOUNT
Annuity HIGH YIELD SUBACCOUNT
Income Preferred GLOBAL ASSET ALLOCATION SUBACCOUNT
Variable Annuity ASSET ALLOCATION SUBACCOUNT
VALUE SUBACCOUNT
GROWTH & INCOME SUBACCOUNT
S&P 500 INDEX SUBACCOUNT
BLUE CHIP STOCK SUBACCOUNT
INTERNATIONAL STOCK SUBACCOUNT
MID CAP STOCK SUBACCOUNT
SMALL CAP VALUE SUBACCOUNT
GLOBAL GROWTH SUBACCOUNT
LARGE CAP GROWTH SUBACCOUNT
GROWTH 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 AND Variable Universal Life MONEY MARKET SUBACCOUNT
TAX-DEFERRED INVESTMENT Insurance U.S. GOVERNMENT SECURITIES SUBACCOUNT
OPPORTUNITY DIVERSIFIED INCOME SUBACCOUNT
GLOBAL BOND SUBACCOUNT
HIGH YIELD SUBACCOUNT
GLOBAL ASSET ALLOCATION SUBACCOUNT
ASSET ALLOCATION SUBACCOUNT
VALUE SUBACCOUNT
GROWTH & INCOME SUBACCOUNT
S&P 500 INDEX SUBACCOUNT
BLUE CHIP STOCK SUBACCOUNT
INTERNATIONAL STOCK SUBACCOUNT
MID CAP STOCK SUBACCOUNT
SMALL CAP VALUE SUBACCOUNT
GLOBAL GROWTH SUBACCOUNT
LARGE CAP GROWTH SUBACCOUNT
GROWTH STOCK SUBACCOUNT
AGGRESSIVE GROWTH SUBACCOUNT
Adaptable Life
Universal Life
</TABLE>
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 FORTIS 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.
<PAGE>
[logo]
FORTIS MEANS STEADFAST
Fortis means "steadfast" in Latin. The worldwide Fortis family of companies
lives up to the name, and has each day since the 1800s, with flexible
solutions tailored to our customers' individual needs. We deliver the
stability you require today ... and tomorrow. You can count on it.
Fortis Financial Group offers annuities, life insurance and mutual funds
through its broker/dealer Fortis Investors, Inc. We're part of Fortis, Inc.,
a financial services company that provides specialty insurance and investment
products to individuals, businesses, associations and other financial services
organizations throughout the United States.
Fortis, Inc. is part of Fortis, Inc. is part of the international Fortis
group, which operates in the fields of insurance, banking and investments.
Fortis' listed companies are Fortis (B) of Belgium and Fortis (NL) of the
Netherlands.
Fortis: steadfast for YOU!
FORTIS FINANCIAL GROUP
Fund management offered
through Fortis Advisers, Inc. since 1949
Securities offered through Fortis
Investors, Inc., member NASD, SIPC
Insurance products offered through
Fortis Benefits Insurance Company &
Fortis Insurance Company
P.O. Box 64284, St. Paul, MN 55164-0284
Telephone (800) 800-2000
http://www.ffg.us.fortis.com
FORTIS FINANCIAL GROUP
P.O. Box 64284
St. Paul, MN 55164-0284
Fortis Stock Funds
Bulk Rate
U.S. Postage
PAID
Permit No. 3794
Minneapolis, MN
[logo]
Printed on recycled paper with forty percent preconsumer waste and ten percent
post consumer waste. Please recycle.
The Fortis brandmark and Fortis-Registered Trademark- are servicemarks of
Fortis (B) and Fortis (NL).
98144 -C- Fortis, Inc. 10/99
