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Invest for growth opportunities
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Fortis Stock Funds
Semiannual Report
FEBRUARY 28, 1999
FORTIS FINANCIAL GROUP
[PICTURE]
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FORTIS FINANCIAL GROUP'S OTHER PRODUCTS AND SERVICES
MUTUAL Fortis Bond Funds MONEY FUND
FUNDS/PORTFOLIOS U.S. GOVERNMENT
CONVENIENT ACCESS TO SECURITIES FUND
A BROAD RANGE OF TAX-FREE NATIONAL
SECURITIES 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 Fortis Opportunity Fixed FIXED ACCOUNT
ANNUITIES & Variable Annuity MONEY MARKET SUBACCOUNT
TAX-DEFERRED Masters Variable Annuity U.S. GOVERNMENT
INVESTING SECURITIES SUBACCOUNT
Empower Variable DIVERSIFIED INCOME
Annuity 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
Fortune Fixed Annuities SINGLE PREMIUM ANNUITY
FLEXIBLE PREMIUM ANNUITY
Income Annuities GUARANTEED FOR LIFE
GUARANTEED FOR A
SPECIFIED PERIOD
LIFE Wall Street Series FIXED ACCOUNT
INSURANCE PROTECTION Variable Universal Life MONEY MARKET SUBACCOUNT
AND TAX-DEFERRED Insurance U.S. GOVERNMENT
INVESTMENT SECURITIES SUBACCOUNT
OPPORTUNITY DIVERSIFIED INCOME
SUBACCOUNT
GLOBAL BOND SUBACCOUNT
HIGH YIELD SUBACCOUNT
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
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.
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HOW TO USE THIS REPORT
For a quick overview of the fund's performance during the past year, refer to
the Highlights box. The letters from the portfolio managers provide a more
detailed analysis of the fund 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 portfolios invests, and the pie chart shows a breakdown
of the portfolios' assets by sector. The portfolio changes show the largest
investment decisions your portfolio manager has made over the period in response
to changing market conditions.
The performance charts graphically compare the portfolios' total return
performance with a selected investment index. Remember, however, that an index
may reflect the performance of securities the portfolio may not hold. Also, the
index does not deduct investment advisory fees and other fund expenses, whereas
your portfolio 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 Products and Services. Your investment
representative, who understands your personal financial situation, can best
explain the features of your investment and how it's designed to help you meet
your financial goals.
<TABLE>
<S> <C>
CONTENTS
Schedules of Investments
Fortis Asset Allocation Portfolio 9
Fortis Value Fund 17
Fortis Growth & Income Fund 20
Fortis Capital Fund 23
Fortis Growth Fund 25
Fortis Capital Appreciation Portfolio 27
Statements of Assets and Liabilities 30
Statements of Operations 32
Statements of Changes in Net Assets
Fortis Asset Allocation Portfolio 34
Fortis Value Fund 35
Fortis Growth & Income Fund 36
Fortis Capital Fund 37
Fortis Growth Fund 38
Fortis Capital Appreciation Portfolio 39
Notes to Financial Statements 40
Board of Directors and Officers 53
</TABLE>
TOLL-FREE PERSONAL ASSISTANCE
- Shareholder Services
- (800) 800-2000, Ext. 3012
- 7:30 a.m. to 5:30 p.m. CST, M-Th
- 7:30 a.m. to 5:00 p.m. CST, F
TOLL-FREE INFORMATION LINE
- For daily account balances,
transaction activity or net asset
value information
- (800) 800-2000, Ext. 4344
- 24 hours a day
FOR MORE INFORMATION ABOUT FORTIS FINANCIAL GROUP'S FAMILY OF PRODUCTS, CALL
YOUR INVESTMENT REPRESENTATIVE OR THE HOME OFFICE AT (800) 800-2000.
TO ORDER PROSPECTUSES OR SALES LITERATURE FOR ANY FORTIS PRODUCT, CALL (800)
800-2000, EXT. 4579.
1
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HIGHLIGHTS
FOR THE SIX-MONTH PERIOD ENDED FEBRUARY 28, 1999
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS H CLASS Z
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
FORTIS ASSET ALLOCATION PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 16.91 $ 16.80 $ 16.74 $ 16.79 --
End of period.............................. $ 18.22 $ 18.10 $ 18.02 $ 18.09 --
TOTAL RETURN 20.60% 20.33% 20.28% 20.34% --
DISTRIBUTIONS PER SHARE:
From net investment income................. $ 0.139 $ 0.088 $ 0.088 $ 0.088 --
From net realized gains on investments..... $ 1.960 $ 1.960 $ 1.960 $ 1.960 --
FORTIS VALUE FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 11.85 $ 11.71 $ 11.72 $ 11.72 --
End of period.............................. $ 12.70 $ 12.55 $ 12.55 $ 12.55 --
TOTAL RETURN 18.68% 18.39% 18.28% 18.28% --
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 period........................ $ 13.20 $ 13.16 $ 13.16 $ 13.16 --
End of period.............................. $ 14.80 $ 14.76 $ 14.76 $ 14.76 --
TOTAL RETURN 16.24% 15.84% 15.84% 15.84% --
DISTRIBUTIONS PER SHARE:
From net investment income................. $ 0.135 $ 0.080 $ 0.080 $ 0.080 --
From net realized gains on investments..... $ 0.390 $ 0.390 $ 0.390 $ 0.390 --
FORTIS CAPITAL FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 22.37 $ 21.73 $ 21.73 $ 21.74 --
End of period.............................. $ 21.78 $ 20.86 $ 20.86 $ 20.88 --
TOTAL RETURN 31.65% 31.21% 31.21% 31.26% --
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 period........................ $ 29.78 $ 28.85 $ 28.85 $ 28.86 $ 30.00
End of period.............................. $ 27.55 $ 26.27 $ 26.27 $ 26.28 $ 27.89
TOTAL RETURN 25.23% 24.78% 24.78% 24.76% 25.46%
DISTRIBUTIONS PER SHARE:
From net investment income.................
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 period........................ $ 26.42 $ 25.90 $ 25.92 $ 25.92 --
End of period.............................. $ 27.26 $ 26.48 $ 26.50 $ 26.50 --
TOTAL RETURN 36.35% 36.04% 36.01% 36.01% --
DISTRIBUTIONS PER SHARE:
From net realized gains on investments..... $ 8.500 $ 8.500 $ 8.500 $ 8.500 --
</TABLE>
2
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PORTFOLIO COMPOSITION BY SECTOR AS OF 2/28/99
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Common Stocks 62.6%
Corporate Bonds-Investment Grade 12.1%
Asset Backed Securities 7.3%
Cash Equivalents/Receivables 7.0%
U.S. Government Securities 6.4%
Corporate Bonds-Non-Investment Grade 4.6%
</TABLE>
TOP 10 HOLDINGS AS OF 2/28/99
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. American International Group, Inc. 1.8%
2. Microsoft Corp. 1.4%
3. MCI Worldcom, Inc. 1.4%
4. Frontier Corp. 1.4%
5. Equant NV 1.4%
6. Time Warner, Inc. 1.4%
7. Interpublic Group of Companies, Inc. 1.3%
8. General Electric Co. 1.3%
9. Amgen, Inc. 1.3%
10. Viacom Class B 1.2%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B shares Diamond +12.89% +15.94%
Class B shares Diamond Diamond +9.29% +15.68%
Class C shares Diamond +12.82% +15.86%
Class C shares Diamond Diamond +11.82% +15.86%
Class H shares Diamond +12.83% +15.93%
Class H shares Diamond Diamond +9.23% +15.67%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% if redeemed within two years, 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 February 28, 1999.
+ Since November 14, 1994 -- Date shares were first offered to
the public
FORTIS ASSET ALLOCATION PORTFOLIO
YOUR ASSET ALLOCATION PORTFOLIO
STOCKS, BONDS AND CASH BLENDED TO SMOOTH OUT THE HIGHS AND LOWS
During the six-month period ended February 28, 1999, the capital markets
recovered from the lows registered in late August 1998. Our asset allocation mix
was last changed in August 1998 to 65% equities, 30% fixed income and 5% cash
which represented an increase of 5% for equities. This was done to take
advantage of the stock market's weakness due to international economic concerns
and liquidity problems in several large domestic hedge funds. The Federal
Reserve responded to these pressures quite decisively by lowering interest rates
three times which allowed the recovery in the capital markets. During this
period, the Asset Allocation Class A shares with no sales charge produced a
total return of 20.60%. The S&P 500 returned 30.27% over the same time period.
The S&P 500 is the weighted average of 500 of the largest U.S. companies as
calculated by S&P. The S&P contains no bonds while the fund's assets include 30%
in fixed income, which causes the fund to have lower returns than the S&P 500.
Presently, the equity portion of the fund is most heavily weighted in the
service, technology and health care sectors. Telecommunications is also a large
weighting in the portfolio. During the six-month period ended February 28, 1999,
the service and technology sectors were increased in weighting while the
consumer cyclical sector was reduced.
Within the fixed income portion of the portfolio, we increased our exposure to
corporate bonds during this period from 38.5% to 55%, as this sector fell
precipitously out of favor at the end of August. "Flight to quality" (expressed
as a greater demand for safety and liquidity) became the dominant behavior among
fixed income investors due to their concerns about international economies and
the potential effects on the U.S. economy. Liquidity in this sector dried up and
investors required a higher premium on corporate bond yields. That yield premium
(called spread) hit a historic high in October as hedge funds and some brokerage
firms felt the pinch of the lack of liquidity in the fixed income markets. The
portfolio benefited from this addition, since the liquidity crisis eased and the
sector appreciated as investors view it now more favorably.
VALUE OF $10,000 INVESTED MARCH 1, 1989
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS FORTIS ASSET ALLOCATION PORTFOLIO
AGGREGATE BOND INDEX*** S&P 500**** CLASS A
<S> <C> <C> <C>
3/1/89 $10,000 $10,000 $9,525
90 $11,274 $11,887 $10,974
91 $12,139 $13,626 $12,273
92 $13,914 $15,800 $14,632
93 $15,791 $17,481 $15,654
94 $17,524 $18,932 $17,559
95 $17,258 $20,323 $17,950
96 $19,227 $27,369 $21,482
97 $19,894 $34,524 $24,051
98 $21,889 $46,605 $29,388
99 $24,201 $55,804 $33,328
Fortis Asset Allocation Portfolio
Average Annual Total Return
1 Year 5 Year 10 Year
Class A* +8.02% +12.57% +12.79%
Class A** +13.41% +13.67% +13.34%
</TABLE>
Annual period ended February 28
Past performance is not indicative of future performance. Investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1996, the portfolio had a sales
charge of 4.50%, and therefore, 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.
TEN LARGEST STOCK PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/28/99
<TABLE>
<S> <C>
ADDITIONS: ELIMINATIONS:
AT&T Corp. American Express Co.
Baxter International, Inc. AutoZone, Inc.
Bell Atlantic Corp. Cardinal Health, Inc.
Chancellor Media Corp. Ingram Micro, Inc. Class A
Comcast Corp. Special Class A Kmart Corp.
Equant NV NY Shares Magna International, Inc.
Nabisco Holdings Corp. Class A Class A
Perkin-Elmer Corp. Monsanto Co.
Royal Dutch Petroleum Co. NY Proffitt's, Inc.
Shares St. Joe Company (The)
Tele-Communications, Inc. Warner-Lambert Co.
</TABLE>
3
<PAGE>
COMPOSITION BY INDUSTRY AS OF 2/28/99
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 37.7%
Banks 10.6%
Financial Services 10.6%
Oil - Crude Petroleum and Gas 10.2%
Telephone Services 9.8%
Utilities-Electric 4.7%
Aerospace and Equipment 3.8%
Cash Equivalents/Receivables 3.1%
Automobile Manufacturers 2.7%
Chemicals 2.4%
Insurance 2.3%
Leisure Time-Amusements 2.1%
</TABLE>
TOP 10 HOLDINGS AS OF 2/28/99
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Exxon Corp. 3.6%
2. Citigroup, Inc. 3.5%
3. AT & T Corp. 3.1%
4. Bell Atlantic Corp. 2.9%
5. BankAmerica Corp. 2.5%
6. Royal Dutch Petroleum Co. NY Shares 2.1%
7. S & P 500 Depositary Receipt 1.9%
8. Time Warner, Inc. 1.8%
9. Morgan Stanley Dean Witter & Co. 1.6%
10. Disney (Walt) Co. 1.6%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B shares Diamond -0.26% +15.21%
Class B shares Diamond Diamond -3.48% +14.42%
Class C shares Diamond -0.27% +15.21%
Class C shares Diamond Diamond -1.07% +15.21%
Class H shares Diamond -0.27% +15.21%
Class H shares Diamond Diamond -3.48% +14.42%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% if redeemed within two years, 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 February 28, 1999.
+ Shares were first offered to the public January 2, 1996.
FORTIS VALUE FUND
YOUR VALUE FUND
QUALITY STOCKS, INEXPENSIVELY PRICED
For the six-month period ended February 28, 1999, the S&P 500 Index increased
30.27% while the Fortis Value Fund returned 18.68% for Class A before sales
charge. While we were disappointed in this performance, the average six-month
return for value funds was 15.28% per Morningstar Principia. Therefore, the
performance is comparable to other value funds.
The fund's primary strategy is to invest in companies with accelerating growth,
where we anticipate a company's growth rate to rise over time. To the extent
that we cannot find 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
few months. We've also recently added Sungard Data Systems and Suiza Foods, two
companies we feel have relatively attractive prospects at reasonable valuations.
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
future performance of the fund. We continue to monitor the effects of interest
rates and the economy on the portfolio's holdings.
We remain focused on investing in 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>
FORTIS VALUE FUND
S&P 500*** CLASS A
<S> <C> <C>
1/2/96 $10,000 $9,525
96 $10,436 $9,687
97 $13,165 $11,955
98 $17,771 $15,173
99 $21,279 $15,242
Fortis Value Fund
Average Annual Total Return
Since
1 Year January 2, 1996@
Class A* -4.32% +14.26%
Class A** +0.46% +16.03%
</TABLE>
Annual period ended February 28
Past performance is not indicative of future performance. Investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%.
** 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.
PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/28/99
<TABLE>
<S> <C> <C>
ADDITIONS: ELIMINATIONS:
AT&T Corp. Cooper Industries, Inc.
BankAmerica Corp. Fort James Corp.
Citigroup, Inc. Hubbell, Inc. Class B
Disney (Walt) Co. McGraw-Hill Companies, Inc.
Exxon Corp. Newell Co.
Ford Motor Co. Owens Corning
Hewlett-Packard Co. Sonoco Products Co.
McDonald's Corp. Temple-Inland, Inc.
Morgan Stanley Dean Witter & Co. Tenet Healthcare Corp.
Time Warner, Inc. Wang Labs, Conv., Ser B 6.50%
</TABLE>
4
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/28/99
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 34.5%
Telephone Services 11.9%
Drugs 7.6%
Oil-Crude Petroleum and Gas 6.6%
Natural Gas Transmissions 6.1%
Cash Equivalents/Receivables 5.4%
Food 5.2%
Banks 5.2%
Publishing 5.0%
Financial Services 4.5%
Utilities - Electric 4.1%
Telecommunications 3.9%
</TABLE>
TOP 10 HOLDINGS AS OF 2/28/99
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. McGraw Hill Companies, Inc. 3.5%
2. Enron Corp. 2.7%
3. SBC Communications, Inc. 2.6%
4. Household International, Inc. 2.4%
5. AT&T Corp. 2.3%
6. Frontier Corp. 2.3%
7. Omnicom Group, Inc. 2.2%
8. Mobil Corp. 2.1%
9. Pharmacia and UpJohn, Inc. 2.1%
10. American International Group, Inc. 2.0%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B shares Diamond +4.18% +15.29%
Class B shares Diamond Diamond +0.58% +14.67%
Class C shares Diamond +4.18% +15.29%
Class C shares Diamond Diamond +3.18% +15.29%
Class H shares Diamond +4.18% +15.29%
Class H shares Diamond Diamond +0.58% +14.67%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% if redeemed within two years, 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 February 28, 1999.
+ Shares were first offered to the public January 2, 1996.
FORTIS GROWTH & INCOME FUND
YOUR GROWTH & INCOME FUND
CONSERVATIVE GROWTH WITH QUARTERLY DIVIDENDS
During the six-month period ended February 28, 1999, the stock market recovered
strongly from last autumn's market lows. An accommodative Federal Reserve
lowered interest rates three times in response to international recessionary
conditions and domestic liquidity problems of several hedge funds. This support
ignited confidence in the capital markets, allowing the stock market to surge.
International economic conditions remain under pressure, however, and the
problem appears to be spreading to more countries. The US economy's growth has
remained surprisingly strong, a condition that deserves close monitoring in the
period ahead.
Over the past six months, the Growth & Income Fund Class A shares with no sales
charge registered an increase of 16.24% which compares to a 30.27% rise in the
S&P 500 Index. The index is the weighted average of 500 of the largest U.S.
companies as calculated by Standard and Poor's. The Growth and Income Fund is a
more conservative portfolio of stocks concentrating on a balance between future
growth prospects and current income. During strong market advances, the fund is
likely to underperform the index while during weaker market environments, the
fund should outperform.
Emphasis continues on well-established companies with consistent growth
prospects and regular dividend increases. The overall yield on the portfolio
should be somewhat higher than that offered by the S&P 500. Currently, we favor
the telecommunications, health care and service sectors of the economy. These
sectors represent the heaviest weights in the portfolio at this time. Recent
additions to the portfolio were made in the consumer staples sector while
reductions were effected in the capital goods and consumer cyclical sectors.
Looking forward, a potentially slowing economy with continued low inflation
prospects appears probable which should favor the consistent growing sectors
that dominate this fund. Stock selection will remain focused on quality and
consistency of earnings in the period ahead.
VALUE OF $10,000 INVESTED JANUARY 2, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FORTIS GROWTH & INCOME FUND
S&P 500*** CLASS A
<S> <C> <C>
1/2/96 $10,000 $9,525
96 $10,436 $9,677
97 $13,165 $11,745
98 $17,771 $14,565
99 $21,279 $15,287
Fortis Growth & Income Fund
Average Annual Total Return
Since
1 Year January 2, 1996@
Class A* -0.03% +14.37%
Class A** +4.95% +16.14%
</TABLE>
Annual period ended February 28
Past performance is not indicative of future performance. Investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%.
** These are the 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.
TEN LARGEST STOCK PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/28/99
<TABLE>
<S> <C>
ADDITIONS: ELIMINATIONS:
Anheuser-Busch Companies, Inc. American Express Co.
AT&T Corp. Crescent Real Estate Equities Co.
BankAmerica Corp. Fortune Brands, Inc.
Chevron Corp. Glaxo Wellcome plc ADR
France Telecom S.A. ADR Lincoln National Corp.
Nabisco Holdings Corp. Class A Minnesota Mining and Manufacturing
New Plan Excel Realty Trust Co.
Pall Corp. Nuevo Energy Co., Conv., Ser A,
Royal Dutch Petroleum Co. NY Shares 5.75%
Schlumberger Ltd. Starwood Hotels & Resorts
Teekay Shipping Corp.
Tenneco, Inc. (with rights)
</TABLE>
5
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/28/99
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 43.1%
Telephone Services 11.0%
Computer - Communication Equipment 7.1%
Broadcasting 6.6%
Computer - Software 5.9%
Drugs 5.9%
Insurance 4.4%
Business Services 3.7%
Biomedics, Genetics Research and Development 3.5%
Publishing 3.1%
Oil-Crude Petroleum and Gas 3.0%
Cash Equivalents/Receivables 2.7%
</TABLE>
TOP 10 HOLDINGS AS OF 2/28/99
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Equant NV NY Shares 3.1%
2. American International Group, Inc. 3.0%
3. Microsoft Corp. 2.5%
4. Frontier Corp. 2.3%
5. Amgen, Inc. 2.3%
6. MCI Worldcom, Inc. 2.2%
7. Interpublic Group of Companies, Inc. 2.1%
8. General Electric Co. 2.1%
9. Viacom, Inc. Class B 2.1%
10. America Online, Inc. 2.0%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B shares Diamond +19.75% +20.01%
Class B shares Diamond Diamond +16.15% +19.78%
Class C shares Diamond +19.75% +20.01%
Class C shares Diamond Diamond +18.75% +20.01%
Class H shares Diamond +19.74% +20.03%
Class H shares Diamond Diamond +16.14% +19.80%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% if redeemed within two years, 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 February 28, 1999.
+ Since November 14, 1994 -- Date shares were first offered to
the public
FORTIS CAPITAL FUND
YOUR CAPITAL FUND
LONG-TERM GROWTH THROUGH LARGER, ESTABLISHED COMPANIES
The six-month period ended February 28, 1999, the Fortis Capital Fund
essentially witnessed a recovery from last autumn's market lows. Significantly
easier monetary policy by the Federal Reserve in response to deteriorating
international economies and hedge fund liquidity problems allowed the equity
markets to recover strongly. While concerns over liquidity problems in the
market have faded, recessionary conditions abroad have actually spread further
around the globe. The economy in the U.S., however, has remained surprisingly
robust, spurred by low inflation and an accommodative Federal Reserve. The
ability of the U.S. to remain a prosperous island in the recessionary world
economy needs to be closely monitored in the months ahead.
The Capital Fund emphasizes large capitalization growth companies that are
dominant in their field of business. These types of companies have led the
market's advance over the past several years and it appears likely that this
outperformance will continue given the potential uncertainties in the economy.
For the six-months ended the fund was up 31.65%, for Class A with no sales
charge, compared with 30.27% in the S&P 500 Index. Over the past six months, we
have increased holdings in technology, telecommunications and the service
sectors. Decreases in weightings were primarily in the consumer cyclical sector.
Looking ahead, earnings growth for the S&P 500 likely will be somewhat sluggish
as the economy slows from the strong growth of late 1998. Inflation and interest
rates will likely remain constrained over the intermediate term. Good stock
selection among quality companies should prove to be a rewarding strategy in the
period ahead.
VALUE OF $10,000 INVESTED MARCH 1, 1974
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FORTIS CAPITAL FUND CLASS
S&P 500 *** A
<S> <C> <C> <C> <C>
3/1/74 $10,000 $9,525
75 $8,890 $8,605
76 $11,309 $10,352
77 $11,782 $10,356
78 $10,801 $9,613
79 $12,596 $11,642
80 $15,681 $16,721
81 $19,045 $23,147
82 $17,316 $23,667
83 $23,915 $35,543
84 $26,518 $37,044
85 $32,011 $43,152
86 $41,890 $58,735
87 $54,233 $76,915
88 $52,749 $68,551
89 $59,013 $72,365
90 $70,126 $87,572
91 $80,406 $100,827
92 $93,244 $128,572
93 $103,116 $129,770
94 $111,717 $144,368
95 $119,967 $150,317
96 $161,602 $185,432
97 $202,967 $213,611
98 $273,999 $280,904
99 $331,264 $338,772
Fortis Capital Fund
Average Annual Total Return
1 Year 5 Year 10 Year 25 Years
Class A* +14.87% +17.45% +16.12% +15.13%
Class A** +20.60% +18.60% +16.69% +15.36%
</TABLE>
Annual period ended February 28
Past performance is not indicative of future performance. Investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1990, the portfolio had a sales
charge of 8.50%, and therefore, 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.
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/28/99
<TABLE>
<S> <C>
ADDITIONS: ELIMINATIONS:
AT&T Corp. American Express Co.
Baxter International, Inc. Cardinal Health, Inc.
Comcast Corp. Special Class A Colgate-Palmolive Co.
Equant NV NY Shares Ingram Micro, Inc. Class A
Nabisco Holdings Corp. Class A Kmart Corp.
Perkin-Elmer Corp. Magna International, Inc. Class A
Philip Morris Companies, Inc. Monsanto Co.
Reader's Digest Association, Inc. SmithKline Beecham plc ADR
Class A Tiffany & Co.
Royal Dutch Petroleum Co. NY Shares Warner-Lambert Co.
Tele-Communications, Inc.
</TABLE>
6
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/28/99
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 37.5%
Computer-Software 13.2%
Cash Equivalents/Receivables 8.1%
Drugs 6.6%
Retail - Specialty 5.9%
Business Services 5.3%
Advertising-Public Relations 4.9%
Financial Services 4.0%
Telephone Services 3.9%
Medical Supplies 3.7%
Electronic-Semiconductor and
Capacitor 3.6%
Electronic Components 3.3%
</TABLE>
TOP 10 HOLDINGS AS OF 2/28/99
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Home Depot, Inc. 2.6%
2. Waters Corp. 2.4%
3. MCI Worldcom, Inc. 2.3%
4. Kohl's Corp. 2.1%
5. Cisco Systems, Inc. 2.1%
6. Staples, Inc. 1.9%
7. Capital One Financial Corp. 1.8%
8. Solectron Corp. 1.8%
9. Comverse Technology, Inc. 1.8%
10. Univision Communications, Inc. 1.8%
</TABLE>
CLASS B, C, H AND Z AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception
- -------------------------------------------------------------
<S> <C> <C>
Class B shares Diamond +4.74% +15.41%+
Class B shares Diamond Diamond +1.14% +15.15%+
Class C Shares Diamond +4.77% +15.41%+
Class C Shares Diamond Diamond +3.77% +15.41%+
Class H shares Diamond +4.73% +15.41%+
Class H shares Diamond Diamond +1.13% +15.15%+
Class Z shares +5.87% +13.41%++
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, H and Z) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% if redeemed within two years, 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 February 28, 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.
FORTIS GROWTH FUND
YOUR GROWTH FUND
MEDIUM-SIZED COMPANIES POISED TO BE TOMORROW'S LEADERS
For the six-month period ended February 28, 1999, the Fortis Growth Fund had a
total return of 25.23% for Class A without sales charge. This compares to a
27.61% return for the S&P 400 MidCap Index. This index is the most relevant
comparison for the Growth Fund, as the fund's primary investment focus is
mid-capitalization stocks, typically with market capitalizations between $1
billion and $6 billion.
The primary reason for the fund's under-performance versus the Index was the
presence of America Online in the MidCap Index. AOL rose 400% from September 1,
1998, until the end of the year, and contributed 6.7% of the Index's 27.40%
total return. This was an unusually large impact from one stock. The fund had no
position in AOL because we viewed it as a large capitalization stock. Indeed,
AOL was added to the S&P 500 index at the end of the year. On the positive side,
the fund had a material overweighting in technology, and this sector performed
extremely well during this period. Many technology stocks increased more than
100% from their October lows to the February highs. In addition, the fund was
overweighted in consumer cyclical stocks, mainly retailers. These sectors also
performed extremely well with consumers seeing strong gains in personal income
and with confidence levels high. The Fund was also very strong in commercial
services. This sector was strong because it benefitted from outsourcing trends.
Finally, the fund was underweighted in the two worst performing sectors, energy
and basic materials. These sectors suffered from weak demand and excess supply.
During the course of the last year, the fund became more of a true mid-cap
portfolio, as a number of large capitalization holdings were sold and replaced
by holdings in companies with market capitalizations between $1 and $6 billion.
The average market capitalization of the stocks in the portfolio at the end of
1998 was approximately $3 billion, and is expected to stay in that range for the
foreseeable future. While large cap-stocks have outperformed mid-cap stocks over
the past several years, we believe mid-cap stocks have provided superior returns
to large-cap stocks without significantly greater risk over the long term.
Going forward, the fund will maintain a disciplined investment process by
investing in a well diversified portfolio, with an emphasis on companies with
strong earnings growth, upside earnings momentum, and reasonable valuation. We
believe this approach offers the best potential for competitive performance.
The stock market outlook for 1999 is somewhat mixed. The U.S. economy remains
healthy, as demonstrated by the 6.1% GDP growth in the fourth quarter of last
year, subdued inflation, and low interest rates. The financial crisis in Asia
and Latin America appears to have stabilized, although Japan still shows no
signs of improvement. Corporate profit growth looks to be up mid to high single
digits, and the Federal Reserve has demonstrated its willingness to ease
interest rates in the face of emerging financial problems. Liquidity remains
strong with no reduction in the flow of money into stock funds. However,
offsetting this good news is the market's high valuation level. The strong stock
market rally at the end of 1998 has returned most of the major indices to new
highs, and the price/earnings ratio for the S&P 500 is at an all time high. All
of these factors suggest that investors in 1999 may see more traditional equity
returns of 10% to 12%, rather than the abnormally high returns experienced over
the last four years.
VALUE OF $10,000 INVESTED MARCH 1, 1974
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FORTIS GROWTH FUND
S&P 500*** CLASS A
<S> <C> <C> <C> <C>
3/1/74 $10,000 $9,525
75 $8,890 $8,891
76 $11,309 $11,519
77 $11,782 $11,459
78 $10,801 $11,946
79 $12,596 $16,330
80 $15,681 $25,108
81 $19,045 $34,349
82 $17,316 $36,388
83 $23,915 $56,109
84 $26,518 $56,182
85 $32,011 $64,361
86 $41,890 $86,885
87 $54,233 $119,225
88 $52,749 $97,863
89 $59,013 $108,102
90 $70,126 $133,027
91 $80,406 $162,125
92 $93,244 $223,942
93 $103,116 $214,463
94 $111,717 $259,562
95 $119,967 $233,931
96 $161,602 $308,404
97 $202,967 $336,904
98 $273,999 $414,437
99 $331,264 $437,344
Fortis Growth Fund
Average Annual Total Return
1 Year 5 Year 10 Year 25 Year
Class A* +0.51% +9.92% +14.44% +16.31%
Class AA** +5.53% +11.00% +15.00% +16.54%
</TABLE>
Annual period ended February 28
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1990, the portfolio had a higher sales
charge of 8.50%, and therefore, 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.
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/28/99
ADDITIONS: ELIMINATIONS:
Best Buy Co., Inc. Alaska Air Group, Inc.
Comverse Technology, Inc. BMC Software, Inc.
Intuit, Inc. Concord EFS, Inc.
Keebler Foods Co. HBO & Co.
Mallinckrodt Group, Inc. Life Re Corp.
MedImmune, Inc. Microsoft Corp.
MindSpring Enterprises, Inc. Platinum Technology, Inc.
Quintiles Transnational Corp. Medtronic, Inc.
Teradyne, Inc. Uniphase Corp.
Xilinx, Inc. Waste Management, Inc.
7
<PAGE>
COMPOSITION BY INDUSTRY
AS OF 2/28/99
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 21.3%
Computer - Software 22.0%
Business Services and Supplies 9.2%
Electronic Components 8.5%
Health Care Services 8.2%
Telecommunication Equipment 6.3%
Educational Services 5.5%
Drugs 5.2%
Financial Services 4.8%
Retail - Variety and Variety Mail Order 3.1%
Electronic - Semiconductor and
Capacitor 2.5%
Retail - Clothing 1.9%
</TABLE>
TOP 10 HOLDINGS AS OF 2/28/99
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Mercury Interactive Corp. 2.6%
2. Sunrise Assisted Living, Inc. 1.8%
3. Insight Enterprises, Inc. 1.7%
4. Gilat Satellite Networks Ltd. 1.7%
5. Macrovision Corp. 1.6%
6. RF Micro Devices, Inc. 1.6%
7. Business Objects S.A. ADR 1.5%
8. Abacus Direct Corp. 1.5%
9. Cognizant Technology
Solutions Corp. 1.5%
10. Flextronics International Ltd. 1.5%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- -------------------------------------------------------------
<S> <C> <C>
Class B shares Diamond +3.18% +12.46%
Class B shares Diamond Diamond -0.42% +12.17%
Class C shares Diamond +3.17% +12.48%
Class C shares Diamond Diamond +2.17% +12.48%
Class H shares Diamond +3.14% +12.48%
Class H shares Diamond Diamond -0.46% +12.19%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% if redeemed within two years, 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 February 28, 1999.
+ Since November 14, 1994 -- Date shares were first offered to
the public.
FORTIS CAPITAL APPRECIATION PORTFOLIO
YOUR CAPITAL APPRECIATION PORTFOLIO
OPPORTUNITY THROUGH AMERICA'S ENTREPRENEURS
During the six-month period ended February 28, 1999, the Fortis Capital
Appreciation Fund significantly outperformed both the Russell 2000 and Russell
2000 Growth Indices -- the widely used benchmarks for small capitalization
portfolios. The fund was up 36.35%, for Class A with no sales charge, during the
period vs. 13.20% for the Russell 2000, 24.20% for the Russell 2000 Growth Index
and 30.27% for the S&P 500 Index. Most of the fund's outperformance occurred
during the fourth quarter, when the fund gained 36.31% vs. 16.31% for the
Russell 2000 and 23.64% for the Russell 2000 Growth Index. The fund was ranked
in the top 5 percentile for 1998 in its Lipper category, small cap funds.
The year of 1998 was an extremely volatile year in the market and was especially
tough for small cap stocks. The small cap indices significantly underperformed
large cap with the Russell 2000 declining 2.55% vs. 21.88% increase for the
Russell 1000, and a 28.6% gain for the S&P 500 Index. Small cap stocks were
particularly weak during the great market sell-off this fall as investors
flocked to large cap names in search of liquidity and a perceived "flight to
quality". The sell-off created an opportunity for the fund to purchase quality
growth companies at very attractive valuations. The performance of small cap
stocks turned significantly after the first Federal Reserve easing of interest
rates this fall. In addition, third quarter earnings demonstrated an
acceleration earnings per share growth for small companies and a decline in
growth rates for larger companies, making small stocks even more attractive.
The outperformance of the fund vs. its benchmark during the period is
attributable to good stock selection, especially in the technology area.
Flextronics Inc., a contract manufacturer for various technology companies, was
up 141%, and Applied Microcircuits, a semi-conductor company which supplies to
the telecommunications sector, was up 128%.
Going forward, we expect small cap stocks to perform well, given the current
attractive relative valuations. We expect performance to be driven by continued
strong earnings reports and a favorable interest rate environment. We are
confident that the market will begin to recognize the relative superior earnings
growth of small cap stocks by rewarding them with higher valuations.
The fund will maintain its disciplined investment process, investing in
companies of below $1.5 billion market cap, with consistently higher than
average earnings and revenue growth.
VALUE OF $10,000 INVESTED MARCH 1, 1989
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FORTIS CAPITAL APPRECIATION PORTFOLIO
S&P 500*** CLASS A
<S> <C> <C> <C>
3/1/89 $10,000 $9,525
90 $11,887 $12,286
91 $13,626 $13,332
92 $15,800 $18,588
93 $17,481 $18,116
94 $18,932 $22,786
95 $20,323 $21,874
96 $27,369 $30,135
97 $34,524 $26,617
98 $46,605 $33,744
99 $55,804 $34,981
Fortis Capital Appreciation Portfolio
Average Annual Total Return
1 Year 5 Year 10 Year
Class A* -1.26% +7.90% +13.34%
Class A** +3.66% +8.95% +13.89%
</TABLE>
Annual period ended February 28
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1996, the portfolio had a sales charge
of 4.50%, and therefore, those figures do not represent actual performance
that would have been 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.
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/28/99
ADDITIONS: ELIMINATIONS:
Business Objects S.A. ADR Acxiom Corp.
CheckFree Holdings Corp. Apollo Group, Inc. Class A
Cognizant Technology Solutions Cisco Systems, Inc.
Corp. Dollar Tree Stores, Inc.
Gilat Satellite Networks Ltd. Intermedia Communications,
GP Strategies Corp. Inc.
Macrovision Corp. Legato Systems, Inc.
RF Micro Devices, Inc. McLeodUSA, Inc. Class A
Sunrise Assisted Living, Inc. STERIS Corp.
Tetra Tech, Inc. Sterling Commerce, Inc.
Verity, Inc. VERITAS Software Corp.
8
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO
Schedule of Investments
February 28, 1999 (Unaudited)
COMMON STOCKS-62.60%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-1.35%
41,000 Interpublic Group of Companies, Inc.......... $ 2,056,909 $ 3,067,312
------------- -------------
AIR FREIGHT-0.33%
8,000 FDX Corp. (a)................................ 764,840 764,000
------------- -------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.00%
250 Highwaymaster Communications, Inc. (Warrants)
(a) (e).................................... 4,547 219
------------- -------------
BANKS-1.66%
24,200 Bank One Corp................................ 848,687 1,300,750
11,000 BankAmerica Corp............................. 753,414 718,437
26,000 Mellon Bank Corp............................. 1,748,199 1,758,250
------------- -------------
3,350,300 3,777,437
------------- -------------
BEVERAGE-0.98%
12,000 Anheuser-Busch Companies, Inc................ 844,906 920,250
35,000 PepsiCo, Inc................................. 1,430,887 1,316,875
------------- -------------
2,275,793 2,237,125
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-1.96%
24,000 Amgen, Inc. (a).............................. 1,468,882 2,997,000
16,000 Centocor, Inc. (a)........................... 659,698 665,000
10,000 Genentech, Inc. (a).......................... 768,297 798,125
------------- -------------
2,896,877 4,460,125
------------- -------------
BROADCASTING-3.94%
31,000 Chancellor Media Corp. (a)................... 1,694,384 1,356,250
30,000 Comcast Corp. Special Class A................ 1,760,440 2,128,125
30,000 Tele-Communications, Inc. (a)................ 1,132,692 1,884,375
20,000 USA Networks, Inc. (a)....................... 736,706 795,000
32,000 Viacom, Inc. Class B (a)..................... 1,585,042 2,828,000
------------- -------------
6,909,264 8,991,750
------------- -------------
BROKERAGE AND INVESTMENT-0.30%
9,000 Merrill Lynch & Co., Inc..................... 707,602 690,750
------------- -------------
BUILDING MATERIALS-1.20%
32,000 Dayton Superior Corp. (a).................... 673,920 672,000
79,000 Masco Corp................................... 2,167,573 2,073,750
------------- -------------
2,841,493 2,745,750
------------- -------------
BUSINESS SERVICES-1.96%
25,500 Computer Sciences Corp. (a).................. 1,357,984 1,698,937
48,000 Fiserv, Inc. (a)............................. 1,276,473 2,256,000
7,000 Tyco International Ltd....................... 551,725 521,062
------------- -------------
3,186,182 4,475,999
------------- -------------
CHEMICALS-SPECIALTY-0.53%
28,000 Minerals Technologies, Inc................... 1,282,838 1,202,250
------------- -------------
COMPUTER-COMMUNICATION EQUIPMENT-3.86%
17,000 Cisco Systems, Inc. (a)...................... 542,176 1,662,812
43,000 Equant NV NY Shares (a)...................... 3,215,131 3,096,000
32,000 NCR Corp. (a)................................ 1,519,524 1,310,000
11,500 Sun Microsystems, Inc. (a)................... 550,002 1,119,094
54,000 Unisys Corp. (a)............................. 1,326,033 1,609,875
------------- -------------
7,152,866 8,797,781
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
COMPUTER-SOFTWARE-3.39%
31,000 America Online, Inc. (a)..................... $ 584,275 $ 2,757,062
10,000 Intuit, Inc. (a)............................. 643,645 989,375
22,000 Microsoft Corp. (a).......................... 873,980 3,302,750
12,000 Oracle Corp. (a)............................. 713,518 670,500
------------- -------------
2,815,418 7,719,687
------------- -------------
CONSUMER GOODS-0.56%
15,000 Colgate-Palmolive Co......................... 1,256,150 1,273,125
------------- -------------
DRUGS-4.66%
48,000 Abbott Laboratories.......................... 1,350,637 2,229,000
20,000 Eli Lilly & Co............................... 1,523,355 1,893,750
31,500 Forest Laboratories, Inc. (a)................ 1,163,929 1,557,281
9,000 Johnson & Johnson............................ 683,474 768,375
45,000 Mylan Laboratories, Inc...................... 1,101,241 1,229,062
5,000 Pfizer, Inc.................................. 480,043 659,687
42,000 Pharmacia & Upjohn, Inc...................... 2,036,445 2,286,375
------------- -------------
8,339,124 10,623,530
------------- -------------
ELECTRICAL EQUIPMENT-1.32%
30,000 General Electric Co.......................... 1,823,084 3,009,375
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.23%
5,000 Intel Corp................................... 680,938 599,687
16,000 Motorola, Inc................................ 1,106,583 1,124,000
12,000 Texas Instruments, Inc....................... 658,494 1,070,250
------------- -------------
2,446,015 2,793,937
------------- -------------
FINANCIAL SERVICES-1.04%
27,000 Fannie Mae................................... 929,924 1,890,000
14,200 MGIC Investment Corp......................... 484,010 483,688
------------- -------------
1,413,934 2,373,688
------------- -------------
FOOD-1.80%
50,000 Groupe Danone ADR............................ 1,550,000 2,496,875
36,000 Nabisco Holdings Corp. Class A............... 1,595,030 1,597,500
------------- -------------
3,145,030 4,094,375
------------- -------------
HOTEL AND GAMING-1.04%
67,000 Sun International Hotels Ltd. (a)............ 2,909,645 2,382,688
------------- -------------
HOUSEHOLD PRODUCTS-0.41%
8,000 Clorox Co.................................... 801,476 946,500
------------- -------------
INSURANCE-2.63%
36,000 American International Group, Inc............ 1,728,250 4,101,750
32,700 Hartford Life, Inc. Class A.................. 1,156,666 1,896,600
------------- -------------
2,884,916 5,998,350
------------- -------------
MACHINERY-0.46%
49,000 Pall Corp.................................... 1,088,625 1,038,188
------------- -------------
MEDIA-0.24%
23,000 Infinity Broadcasting Corp. (a).............. 471,500 546,250
------------- -------------
MEDICAL SUPPLIES-0.99%
32,000 Baxter International, Inc.................... 2,009,400 2,252,000
------------- -------------
MEDICAL TECHNOLOGY-0.74%
24,000 Medtronic, Inc. (with rights)................ 383,046 1,695,000
------------- -------------
</TABLE>
9
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 28, 1999 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
NATURAL GAS TRANSMISSIONS-1.52%
27,000 Enron Corp................................... $ 1,426,928 $ 1,755,000
46,000 Williams Companies, Inc...................... 1,511,312 1,702,000
------------- -------------
2,938,240 3,457,000
------------- -------------
OFFICE EQUIPMENT AND SUPPLIES-0.83%
16,000 Compaq Computer Corp......................... 761,234 564,000
13,000 EMC Corp. (a)................................ 656,773 1,330,875
------------- -------------
1,418,007 1,894,875
------------- -------------
OIL AND GAS FIELD SERVICES-0.64%
30,000 Schlumberger Ltd............................. 1,555,365 1,456,875
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-1.43%
7,000 Chevron Corp................................. 596,644 538,125
21,000 Exxon Corp................................... 1,534,032 1,397,813
30,000 Royal Dutch Petroleum Co. NY Shares 1,441,563 1,316,250
------------- -------------
3,572,239 3,252,188
------------- -------------
PERSONAL SERVICES-0.13%
20,000 Service Corp. International.................. 653,557 307,500
------------- -------------
PHOTOGRAPHIC-0.41%
14,000 Eastman Kodak Co............................. 1,174,433 926,625
------------- -------------
PRECISION INSTRUMENTS-TEST, RESEARCH-0.62%
15,000 Perkin-Elmer Corp............................ 1,535,372 1,421,250
------------- -------------
PUBLISHING-2.39%
21,000 New York Times Co. Class A................... 740,880 651,000
50,000 Reader's Digest Association, Inc. Class A.... 1,407,820 1,700,000
48,000 Time Warner, Inc............................. 1,333,425 3,096,000
------------- -------------
3,482,125 5,447,000
------------- -------------
RESTAURANTS AND FRANCHISING-1.01%
27,200 McDonald's Corp.............................. 1,692,634 2,312,000
------------- -------------
RETAIL-DEPARTMENT STORES-0.99%
13,000 Dayton Hudson Corp........................... 732,030 813,313
21,000 Kohl's Corp. (a)............................. 205,711 1,449,000
------------- -------------
937,741 2,262,313
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
RETAIL-DISCOUNT STORES-1.67%
15,000 Costco Companies, Inc. (a)................... $ 229,875 $ 1,204,688
30,000 Wal-Mart Stores, Inc......................... 1,576,984 2,591,250
------------- -------------
1,806,859 3,795,938
------------- -------------
RETAIL-GROCERY-0.74%
26,000 Kroger Co. (a)............................... 1,379,102 1,681,875
------------- -------------
RETAIL-SPECIALTY-2.57%
36,000 Home Depot, Inc.............................. 310,987 2,148,750
15,000 Rite Aid Corp................................ 698,016 620,625
16,000 Tiffany & Co................................. 769,858 915,000
68,000 Walgreen Co.................................. 1,111,580 2,176,000
------------- -------------
2,890,441 5,860,375
------------- -------------
TELECOMMUNICATIONS-0.27%
10,000 Qwest Communications International, Inc.
(a)........................................ 559,653 614,375
------------- -------------
TELEPHONE SERVICES-6.80%
25,000 AirTouch Communications, Inc. (a)............ 680,248 2,276,563
14,000 ALLTEL Corp.................................. 697,525 838,250
32,000 AT&T Corp.................................... 2,117,136 2,628,000
25,500 Bell Atlantic Corp........................... 1,372,923 1,464,656
87,000 Frontier Corp................................ 2,399,359 3,126,563
38,500 MCI WorldCom, Inc. (a)....................... 798,954 3,176,250
7,000 NEXTLINK Communications, Inc. (a)............ 307,678 320,250
60,000 Vanguard Cellular Systems, Inc. Class A
(a)........................................ 1,378,627 1,672,500
------------- -------------
9,752,450 15,503,032
------------- -------------
TOBACCO-0.74%
43,000 Philip Morris Companies, Inc................. 1,626,315 1,682,375
------------- -------------
UTILITIES-ELECTRIC-1.02%
45,000 AES Corp. (a)................................ 1,229,883 1,673,438
25,000 Endesa S.A. ADR.............................. 562,950 659,375
------------- -------------
1,792,833 2,332,813
------------- -------------
WASTE DISPOSAL-0.24%
11,000 Waste Management, Inc........................ 423,306 537,625
------------- -------------
TOTAL COMMON STOCKS.......................... $ 104,407,546 $ 142,703,225
------------- -------------
------------- -------------
</TABLE>
ASSET BACKED SECURITIES-7.30%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
COMMERCIAL LOANS-4.04%
$ 806,798 DLJ Mortgage Acceptance Corp., 7.28% Ser
1996-CF1 Class A-1A 3-13-2028 (e).......... AAA $ 812,699 $ 824,919
1,250,000 First Union-Lehman Brothers Commercial
Mortgage, 7.30% Ser 1997-C1 Class A2
12-18-2006................................. Aaa* 1,261,323 1,298,562
355,000 GMAC Commercial Mortgage Securities, Inc.,
7.085% Ser 1997-C1 Class E 12-15-2010...... Baa2* 356,639 343,622
459,089 GS Mortgage Securities Corp. II Protective
Life, 7.02% Ser 1996-PL Class A1
3-1-2026................................... Aaa* 459,060 458,010
1,446,450 J.P. Morgan Commercial Mortgage Finance
Corp., 6.47% Ser 1996-C2 Class A
11-25-2027................................. AAA 1,369,974 1,447,665
755,990 Merrill Lynch Mortgage Investors, Inc., 6.76%
Variable Rate Ser 1995-C3 Class A1
12-26-2025................................. AAA 762,620 766,499
700,000 Midland Realty Acceptance Corp., 7.76% Ser
1996-C1 Class B 7-25-2008.................. AA 706,017 751,163
1,750,000 Mortgage Capital Funding, Inc., 7.90% Ser
1996-MC1 Class B 2-15-2006................. AA+ 1,764,329 1,869,700
470,000 Nationslink Funding Corp., 7.52% Ser 1996-1
Class A2 7-20-2005......................... AAA 470,451 482,685
</TABLE>
10
<PAGE>
ASSET BACKED SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
$ 951,527 Nationslink Funding Corp., 7.53% Ser 1996-1
Class A1 9-20-2002......................... AAA $ 957,379 $ 969,616
------------- -------------
8,920,491 9,212,441
------------- -------------
HOUSING-0.96%
914,857 Green Tree Recreational, Equipment & Consumer
Trust, 6.71% Ser 1998-A Class A1H
5-15-2029.................................. AAA 911,033 910,466
750,000 Money Store Home Improvement Trust, 7.41% Ser
1997-1 Class M1 5-15-2017.................. AA 752,928 766,410
500,000 Money Store Residential Trust, 7.09%
1997-I-M1 7-15-2016........................ AA 499,925 499,200
------------- -------------
2,163,886 2,176,076
------------- -------------
MANUFACTURED HOMES-0.66%
1,500,000 Green Tree Financial Corp., 7.65% Ser 1994-1
Class A5 4-15-2019......................... Aa2* 1,494,141 1,512,075
------------- -------------
MULTI-FAMILY LOANS-1.27%
1,500,000 DLJ Mortgage Acceptance Corp., 8.50%
Multifamily Mtg Pass Thru Certificate Ser
1994-MF4 Class A2 4-18-2001................ A 1,514,375 1,523,925
1,000,000 DLJ Mortgage Acceptance Corp., 8.80%
Multifamily Mtg Pass Thru Certificate Ser
1993-12 Class B1 9-18-2003................. NR 982,500 1,012,860
431,445 Fund America Structured Transactions, L.P.,
Collateralized Note, 8.76% Ser 1996-1 Class
A Principal Only 1-1-2033 (f)(h)........... Baa3* 326,100 344,078
------------- -------------
2,822,975 2,880,863
------------- -------------
WHOLE LOAN RESIDENTIAL-0.37%
841,660 Mid-State Trust, 7.54% Ser 6 Class A3
7-1-2035................................... AA 841,138 849,857
------------- -------------
TOTAL ASSET BACKED SECURITIES................ $ 16,242,631 $ 16,631,312
------------- -------------
------------- -------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-12.06%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
--------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
AEROSPACE AND EQUIPMENT-0.45%
$500,000 Lockheed Martin Corp., 7.65% Deb 5-1-2016.... BBB+ $ 502,764 $ 542,031
500,000 Raytheon Co., 5.70% Note 11-1-2003........... BBB 502,072 490,877
------------- -------------
1,004,836 1,032,908
------------- -------------
AIR FREIGHT-0.22%
486,311 Federal Express, 7.50% Pass Thru Certificate
Ser 1997-A 1-15-2018....................... AAA 486,310 502,349
------------- -------------
AIRLINES-0.22%
500,000 Delta Airlines, 6.65% Note 3-15-2004 (i)..... BBB- 499,620 499,620
------------- -------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.22%
500,000 Dana Corp., 6.50% Note 3-1-2009 (i).......... A- 497,145 497,145
------------- -------------
AUTOMOBILE MANUFACTURERS-0.10%
250,000 Ford Motor Co., 6.375% Deb 2-1-2029.......... A 247,044 237,816
------------- -------------
BANKS-0.66%
500,000 Bank Austria AG, 7.25% Sub Note 2-15-2017
(f)........................................ AA+ 499,097 495,668
250,000 Bank One Corp., 6.00% Sub Note 2-17-2009..... NR 249,055 244,493
250,000 CoreStates Capital Corp., 6.75% Medium Term
Note 11-15-2006............................ A- 251,648 251,438
500,000 St. Paul Bancorp, Inc., 7.125% Sr Note
2-15-2004.................................. BBB- 498,247 509,013
------------- -------------
1,498,047 1,500,612
------------- -------------
BEVERAGE-0.11%
250,000 Pepsi Bottling Holdings, Inc., 5.375% Deb
2-17-2004 (e).............................. A 249,039 243,964
------------- -------------
BROKERAGE AND INVESTMENT-0.66%
500,000 Bear Stearns Capital Trust, 7.00% Variable
Rate Bond 1-15-2027........................ BBB 499,716 494,401
250,000 Goldman Sachs Group, 6.50% Note 2-25-2009
(e)........................................ A+ 250,000 245,850
</TABLE>
11
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 28, 1999 (Unaudited)
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
--------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
$750,000 Lehman Brothers Holdings, Inc., 7.375% Note
5-15-2004.................................. A $ 747,666 $ 759,547
------------- -------------
1,497,382 1,499,798
------------- -------------
CABLE TELEVISION-0.83%
750,000 Comcast Cable Communications, 8.375% Note
5-1-2007................................... BBB- 848,422 844,237
500,000 Cox Communications, Inc., 6.40% Note
8-1-2008................................... A- 512,366 505,540
500,000 Viacom, Inc., 7.75% Sr Note 6-1-2005......... BBB- 533,757 532,447
------------- -------------
1,894,545 1,882,224
------------- -------------
CAPTIVE AUTO FINANCE-0.11%
250,000 Toyota Motor Credit, 5.625% Note
11-13-2003................................. AAA 249,614 247,276
------------- -------------
CHEMICALS-0.19%
500,000 Equistar Chemical, 7.55% Deb 2-15-2026....... BBB- 481,232 437,600
------------- -------------
CONSUMER FINANCE-0.22%
500,000 Beneficial Corp., 6.33% Medium Term Note
12-18-2000................................. A 497,538 500,431
------------- -------------
DIVERSIFIED FINANCE-0.55%
500,000 Associates Corp. N.A., 5.50% Sr Note
2-15-2002.................................. AA- 499,454 496,191
750,000 AT&T Capital Corp., 7.50% Medium Term Note
11-15-2000................................. BBB 749,401 760,939
------------- -------------
1,248,855 1,257,130
------------- -------------
ENERGY-0.21%
500,000 NGC Corp. Capital Trust, 8.32% Deb
6-1-2027................................... BBB 500,000 486,405
------------- -------------
FINANCIAL SERVICES-0.44%
500,000 Homeside Lending, Inc., 6.875% Medium Term
Note 6-30-2002............................. A+ 499,884 504,120
500,000 Prudential Insurance Co., 6.375% Sr Note
7-23-2006 (e).............................. A+ 497,916 496,762
------------- -------------
997,800 1,000,882
------------- -------------
FOOD-0.22%
500,000 Safeway, Inc., 6.05% Note 11-15-2003......... BBB 499,186 498,118
------------- -------------
FOREIGN-GOVERNMENT AGENCIES-0.23%
500,000 Quebec (Province of), 7.50% Yankee Bond
7-15-2002.................................. A+ 511,141 522,735
------------- -------------
FOREIGN-GOVERNMENT-1.30%
750,000 Alberta (Province of), 4.875% 10-29-2003..... AA+ 747,561 724,807
500,000 Canada (Government of), 5.25% 11-5-2008...... AA+ 499,888 480,675
500,000 Manitoba (Province of), 5.50% 10-1-2008...... AA- 496,912 484,750
500,000 Ontario (Province of), 5.50% 10-1-2008....... AA- 497,133 482,980
500,000 Ontario (Province of), 7.375% 1-27-2003...... AA- 535,392 526,720
250,000 Poland (Republic of), 7.125% Yankee Bond
7-1-2004................................... BBB- 248,975 259,687
------------- -------------
3,025,861 2,959,619
------------- -------------
FOREST PRODUCTS-0.51%
500,000 Fort James Corp., 6.50% Sr Note 9-15-2002.... BBB- 499,546 503,068
600,000 Georgia-Pacific Corp., 9.625% Deb
3-15-2022.................................. BBB- 616,932 670,862
------------- -------------
1,116,478 1,173,930
------------- -------------
HOUSING-0.21%
500,000 Masco Corp., 6.625% Deb 4-15-2018............ A- 499,310 486,928
------------- -------------
INDUSTRIAL-0.32%
750,000 Tyco International Group, 6.875% Yankee Bond
1-15-2029.................................. A- 756,742 740,340
------------- -------------
INSURANCE-0.22%
500,000 Reliastar Financial Corp., 6.625% Note
9-15-2003.................................. A 516,218 503,375
------------- -------------
LEASING-0.22%
500,000 Ryder System, Inc., 6.60% Note 11-15-2005.... BBB+ 499,836 493,080
------------- -------------
</TABLE>
12
<PAGE>
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
--------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
MISCELLANEOUS-0.25%
$100,000 New York (City of), 10.00% General Obligation
Taxable Bond Ser D 8-1-2005................ A- $ 99,639 $ 111,609
400,000 New York (City of), 10.00% General Obligation
Taxable Bond Ser D 8-1-2005
(Prerefunded 8-1-2001 @ 103)............... A- 394,197 454,765
------------- -------------
493,836 566,374
------------- -------------
NATURAL GAS TRANSMISSIONS-0.46%
750,000 Tennessee Gas Pipeline, 7.50% Deb 4-1-2017... BBB 738,554 781,167
250,000 Trans-Canada Pipelines Ltd., 7.06% Note
10-14-2025................................. A- 250,000 256,331
------------- -------------
988,554 1,037,498
------------- -------------
NUCLEAR FUEL-0.11%
250,000 USEC, Inc., 6.625% Sr Note 1-20-2006......... BBB+ 249,373 245,823
------------- -------------
OIL-EQUIPMENT WELLS AND SERVICES-0.21%
500,000 Petroleum Geo-Services, 6.25% Bond 11-19-2003
(e)........................................ BBB 497,907 487,888
------------- -------------
REAL ESTATE-INVESTMENT TRUST-0.20%
500,000 Meditrust, 7.82% Note 9-10-2026.............. Baa3* 523,018 452,874
------------- -------------
SUPRA-NATIONAL-0.32%
750,000 Corp Andina de Fomento, 7.10% Yankee Bond
2-1-2003................................... BBB+ 749,693 737,863
------------- -------------
TELECOMMUNICATIONS-0.67%
500,000 360 Communications Co., 7.50% Sr Note
3-1-2006................................... A 499,106 539,912
500,000 Sprint Capital Corp., 6.125% Deb
11-15-2008................................. A- 499,638 492,236
500,000 U.S. West Communications, 5.625% Note
11-15-2008................................. A+ 498,268 485,529
------------- -------------
1,497,012 1,517,677
------------- -------------
TELEPHONE SERVICES-0.46%
500,000 Century Telephone Enterprises, Inc., 6.15% Sr
Note1-15-2005.............................. BBB+ 499,341 500,176
500,000 GTE Corp., 7.51% Note 4-1-2009............... A 496,371 549,656
------------- -------------
995,712 1,049,832
------------- -------------
UTILITIES-ELECTRIC-0.96%
500,000 Detroit Edison Co., 5.90% Medium Term Note
4-16-2001.................................. A- 503,561 499,150
500,000 Duke Energy Corp., 6.00% Sr Note 12-1-2028... A 488,089 460,585
500,000 Madison Gas & Electric, 6.02% Sr Note
09-15-2008................................. AA- 500,000 485,139
750,000 Texas Utilities Electric Capital, 8.175% Deb
1-30-2037.................................. BBB 750,000 745,910
------------- -------------
2,241,650 2,190,784
------------- -------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE..... $ 27,510,534 $ 27,490,898
------------- -------------
------------- -------------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-4.56%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
--------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.22%
$500,000 Federal-Mogul Co., 7.375% Note 1-15-2006
(f)........................................ BB+ $ 497,940 $ 490,415
------------- -------------
BROADCASTING-0.35%
250,000 Chancellor Media Corp., 9.00% Deb
10-1-2008.................................. B 276,121 270,625
500,000 Sinclair Broadcasting Group, Inc., 10.00% Sr
Sub Note 9-30-2005......................... B 500,000 526,250
------------- -------------
776,121 796,875
------------- -------------
CABLE TELEVISION-1.05%
500,000 Adelphia Communications, Inc., 9.25% Sr Note
10-1-2002.................................. B+ 507,902 529,375
504,088 Australis Media Ltd., Sr Sub Disc Note
5-15-2003
(Zero coupon through 5-15-2000, thereafter
15.75%) (a)(e)............................. D 401,365 5
500,000 CSC Holdings, Inc., 10.50% Sr Sub Deb
5-15-2016.................................. BB- 507,192 605,000
</TABLE>
13
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 28, 1999 (Unaudited)
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
--------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
$500,000 Lenfest Communications, 8.25% Sr Sub Note
2-15-2008.................................. BB- $ 498,730 $ 522,500
500,000 Mediacom LLC/Capital Corp, 7.875% Sr Note
2-15-2011 (e).............................. NR 492,963 491,250
250,000 United International Holdings, 10.53% Sr Disc
Note 2-15-2008 (Zero coupon through
2-15-2003, thereafter 10.75%) (g).......... B 167,847 165,000
500,000 Wireless One, Inc., 13.00% Sr Note 10-15-2003
(a)........................................ CC 491,388 75,000
------------- -------------
3,067,387 2,388,130
------------- -------------
COMPUTER-HARDWARE-0.25%
500,000 Unisys Corp., 11.75% Sr Note 10-15-2004...... BB- 536,261 570,625
------------- -------------
ENERGY-0.20%
500,000 Energy Corp. of America, 9.50% Sr Sub Note
5-15-2007.................................. B 500,000 462,500
------------- -------------
ENTERTAINMENT-0.12%
250,000 Speedway Motorsports, Inc., 8.50% Sr Sub Deb
8-15-2007.................................. B+ 251,955 261,250
------------- -------------
FOOD-MISCELLANEOUS-0.11%
250,000 Luigino's, Inc., 10.00% Sr Sub Note 2-1-2006
(e)........................................ B- 250,174 250,625
------------- -------------
FOREIGN-GOVERNMENT-0.16%
500,000 United Mexican States, 6.25% Secured Note Ser
W-B 12-31-2019............................. BB 377,725 373,750
------------- -------------
TELECOMMUNICATIONS-1.29%
500,000 Hyperion Telecommunication, 12.25% Sr Note
9-1-2004................................... B+ 541,818 532,500
250,000 Intermedia Communications, Inc., 8.50% Sr
Note 1-15-2008............................. B 256,055 235,937
500,000 Iridium LLC/Capital Corp., 14.00% Deb
7-15-2005.................................. CCC+ 555,507 420,000
500,000 Nextel Communications, Inc., 10.33% Sr Disc
Note 9-15-2007 (Zero coupon through
9-15-2002, thereafter 10.65%) (g).......... CCC+ 353,283 341,250
500,000 Qwest Communications International, Inc.,
7.25% Sr Note 11-1-2008 (e)................ BB+ 500,000 507,500
500,000 Rogers Cantel, Inc., 9.375% Deb 6-1-2008..... BB+ 529,327 531,250
500,000 Winstar Communications, Inc., 11.15% Sr Disc
Note 10-15-2005 (Zero coupon until
10-15-2000, thereafter 14.00%) (g)......... CCC+ 445,581 368,750
------------- -------------
3,181,571 2,937,187
------------- -------------
TELEPHONE SERVICES-0.11%
250,000 McLeod USA, Inc., 8.125% Sr Note 2-15-2009
(e)........................................ B+ 248,125 248,438
------------- -------------
TEXTILE MANUFACTURING-0.23%
500,000 Pillowtex Corp., 10.00% Deb 11-15-2006....... B+ 523,703 525,000
------------- -------------
TRANSPORTATION-0.25%
500,000 Greyhound Lines, Inc., 11.50% Deb
4-15-2007.................................. B- 536,948 573,750
------------- -------------
UTILITIES-ELECTRIC-0.22%
500,000 Niagara Mohawk Power, 7.25% Sr Note
10-1-2002.................................. BB+ 497,533 508,060
------------- -------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... $ 11,245,443 $ 10,386,605
------------- -------------
------------- -------------
</TABLE>
U.S. GOVERNMENT SECURITIES-6.42%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION-1.55%
MORTGAGE BACKED SECURITIES:
$ 641,833 6.00% 2013................................... $ 643,616 $ 635,708
276,479 6.30% 2008................................... 276,823 278,868
1,451,454 6.63% 2005................................... 1,490,448 1,485,579
320,641 7.50% 2027................................... 329,392 329,305
653,892 8.00% 2025................................... 663,803 680,273
119,960 9.00% 2016-2021.............................. 118,031 127,238
------------- -------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 3,522,113 3,536,971
------------- -------------
</TABLE>
14
<PAGE>
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION --
0.54%
MORTGAGE BACKED SECURITIES:
$1,144,967 9.00% 2023................................... $ 1,182,178 $ 1,221,601
16,373 9.50% 2019................................... 16,240 17,651
------------- -------------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION................................ 1,198,418 1,239,252
------------- -------------
U.S. TREASURY SECURITIES -- 4.33%
BONDS:
1,065,000 8.125% 2021.................................. 1,420,212 1,363,750
------------- -------------
1,420,212 1,363,750
------------- -------------
NOTES:
300,000 5.50% 2028................................... 301,874 290,719
2,150,000 6.125% 2007.................................. 2,320,904 2,250,110
2,000,000 6.625% 2007.................................. 2,224,541 2,156,876
------------- -------------
4,847,319 4,697,705
------------- -------------
STRIPS:
4,550,000 5.59% zero coupon 2022(g).................... 1,231,526 1,130,670
1,620,000 5.61% zero coupon 2018(g).................... 544,480 503,365
7,100,000 5.68% zero coupon 2019(g).................... 2,319,901 2,173,090
------------- -------------
4,095,907 3,807,125
------------- -------------
TOTAL U.S. TREASURY SECURITIES............... 10,363,438 9,868,580
------------- -------------
TOTAL U.S. GOVERNMENT SECURITIES............. 15,083,969 14,644,803
------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 174,490,123 $ 211,856,843
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-6.91%
<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 -- 4.79%........ $ 7,234
-------------
DIVERSIFIED FINANCE-3.26%
7,427,000 Norwest Bank Associates Corp., Master
Variable Rate Note, Current
rate -- 4.70%.............................. 7,427,000
-------------
INVESTMENT COMPANY-1.46%
3,322,725 Norwest Advantage Cash Investment Fund,
Current rate -- 4.71%...................... 3,322,725
-------------
U.S. GOVERNMENT AGENCY-2.19%
5,000,000 Federal National Mortgage Association, 4.84%,
3-15-1999.................................. 4,990,104
-------------
TOTAL SHORT-TERM INVESTMENTS................. 15,747,063
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$190,237,186) (B).......................... $ 227,603,906
-------------
-------------
</TABLE>
(a) Presently non-income producing. For long-term debt securities, items
identified are in default as to payment of interest and/or principal.
(b) At February 28, 1999, the cost of securities for federal income tax
purposes was $190,309,585 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $42,908,319
Unrealized depreciation..................................... (5,613,998)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $37,294,321
- -------------------------------------------------------------------------
</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 7.48% of total net assets as of February 28, 1999.
15
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
(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>
1997 504,088 Australis Media Ltd. due 2000 $ 401,365
1996 806,798 DLJ Mortgage Acceptance Corp. due 2028 - 144A 812,699
1999 250,000 Goldman Sachs Group due 2009 - 144A 250,000
1998 250 Highwaymaster Communications, Inc. (Warrants) - 144A 4,547
1999 250,000 Luigino's, Inc. due 2006 - 144A 250,174
1999 250,000 McLeod USA, Inc. due 2009 - 144A 248,125
1999 500,000 Mediacom LLC/Capital Corp. due 2011 - 144A 492,963
1999 250,000 Pepsi Bottling Holdings, Inc. due 2004 - 144A 249,039
1998 500,000 Petroleum Geo-Services due 2003 - 144A 497,907
1998 500,000 Prudential Insurance Co. due 2006 - 144A 497,916
1998 500,000 Qwest Communications International, Inc. due 2008 - 144A 500,000
</TABLE>
The aggregate value of these securities at February 28, 1999, was
$3,797,420, which represents 1.67% 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 February 28, 1999, was $1,330,161, which represents
.58% 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 February 28, 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 February 28, 1999, was $344,078, which represents .15% of
total net assets.
(i) The cost of securities purchased on a when-issued basis at February 28,
1999, was $996,765.
* Moody's Rating
16
<PAGE>
FORTIS STOCK FUNDS
VALUE FUND
Schedule of Investments
February 28, 1999 (Unaudited)
COMMON STOCKS-96.93%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-3.83%
5,500 AlliedSignal, Inc............................ $ 193,846 $ 227,563
10,000 Boeing Co.................................... 319,360 355,625
6,500 Goodrich (B.F.) Co........................... 225,805 221,812
4,000 Lockheed Martin Corp......................... 210,636 150,750
7,500 Raytheon Co. Class A......................... 405,075 396,562
2,000 United Technologies Corp..................... 218,253 247,750
------------ ------------
1,572,975 1,600,062
------------ ------------
AUTOMOBILE MANUFACTURERS-2.68%
10,500 Ford Motor Co................................ 480,313 622,781
6,000 General Motors Corp.......................... 352,179 495,375
------------ ------------
832,492 1,118,156
------------ ------------
BANKS-10.59%
6,300 Bank of New York Company, Inc................ 173,480 220,106
11,000 Bank One Corp................................ 422,914 591,250
16,200 BankAmerica Corp............................. 909,880 1,058,062
7,400 Chase Manhattan Corp......................... 434,287 589,225
9,000 First Union Corp............................. 462,084 479,812
4,500 Fleet Financial Group, Inc................... 169,368 193,219
3,500 Mellon Bank Corp............................. 197,913 236,687
3,000 National City Corp........................... 221,258 209,625
4,000 PNC Bank Corp................................ 190,970 208,250
3,000 State Street Corp............................ 216,761 230,062
2,000 Wachovia Corp................................ 174,850 170,125
6,000 Washington Mutual, Inc....................... 220,533 240,000
------------ ------------
3,794,298 4,426,423
------------ ------------
BROADCASTING-0.74%
3,500 Viacom, Inc. Class B (a)..................... 221,888 309,312
------------ ------------
BROKERAGE AND INVESTMENT-0.55%
3,000 Merrill Lynch & Co., Inc..................... 149,883 230,250
------------ ------------
BUILDING MATERIALS-0.88%
14,000 Masco Corp................................... 403,928 367,500
------------ ------------
BUSINESS SERVICES-1.33%
3,500 Computer Sciences Corp. (a).................. 203,189 233,187
8,000 Harte-Hanks, Inc............................. 204,548 207,000
4,300 Viad Corp.................................... 124,621 113,681
------------ ------------
532,358 553,868
------------ ------------
CABLE TELEVISION-0.85%
6,500 Media One Group, Inc. (a).................... 244,597 354,250
------------ ------------
CHEMICALS-2.42%
2,500 Dow Chemical Co.............................. 226,401 245,937
10,000 Du Pont (E.I.) de Nemours & Co............... 565,838 513,125
5,500 Monsanto Co.................................. 267,928 250,594
------------ ------------
1,060,167 1,009,656
------------ ------------
CHEMICALS-SPECIALTY-1.22%
6,300 Air Products and Chemicals, Inc.............. 242,764 202,387
8,500 Morton International, Inc. (with rights)..... 217,980 307,062
------------ ------------
460,744 509,449
------------ ------------
COMPUTER-COMMUNICATION EQUIPMENT-0.59%
10,400 Wang Laboratories, Inc. (a).................. 243,279 248,300
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
COMPUTER-SOFTWARE-1.56%
5,000 Electronic Data Systems Corp................. $ 203,431 $ 232,500
10,600 SunGard Data Systems, Inc. (a)............... 383,594 420,025
------------ ------------
587,025 652,525
------------ ------------
DIVERSIFIED COMPANIES-1.61%
7,000 CBS Corp. (a)................................ 194,803 258,125
3,500 Minnesota Mining and Manufacturing Co. 259,218 259,219
3,000 PPG Industries, Inc.......................... 176,145 156,187
------------ ------------
630,166 673,531
------------ ------------
DRUGS-1.27%
2,500 Johnson & Johnson............................ 201,213 213,437
5,800 Pharmacia & Upjohn, Inc...................... 270,015 315,737
------------ ------------
471,228 529,174
------------ ------------
ELECTRONIC-CONTROLS AND EQUIPMENT-1.48%
9,300 Hewlett-Packard Co........................... 464,843 617,869
------------ ------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.57%
5,500 Motorola, Inc................................ 287,438 386,375
3,000 Texas Instruments, Inc....................... 142,047 267,563
------------ ------------
429,485 653,938
------------ ------------
FASTENERS AND BEARINGS-0.58%
3,500 Illinois Tool Works, Inc..................... 218,365 240,625
------------ ------------
FINANCIAL SERVICES-10.62%
6,500 Associates First Capital Corp. Class A....... 250,123 264,063
24,750 Citigroup, Inc............................... 1,037,217 1,454,063
3,000 Conseco, Inc................................. 104,707 89,813
9,200 Fannie Mae................................... 580,119 644,000
8,100 Finova Group, Inc............................ 435,794 411,581
9,600 Household International, Inc................. 395,933 390,000
2,000 J.P. Morgan & Company, Inc................... 174,356 222,875
4,000 Marsh & McLennan Companies, Inc.............. 216,656 283,250
7,500 Morgan Stanley Dean Witter & Co.............. 451,027 678,750
------------ ------------
3,645,932 4,438,395
------------ ------------
FOOD-1.02%
8,000 ConAgra, Inc................................. 260,521 241,000
5,000 Suiza Foods Corp. (a)........................ 198,873 185,000
------------ ------------
459,394 426,000
------------ ------------
HEALTH CARE SERVICES-0.53%
15,000 HEALTHSOUTH Corp. (a)........................ 203,421 174,375
5,100 Total Renal Care Holdings, Inc. (a).......... 139,460 45,263
------------ ------------
342,881 219,638
------------ ------------
HOTEL AND GAMING-0.55%
6,500 Promus Hotel Corp. (with rights)(a).......... 206,926 228,719
------------ ------------
INSURANCE-2.32%
6,500 Allstate Corp................................ 263,036 243,750
3,000 American General Corp........................ 208,723 219,750
3,500 CIGNA Corp................................... 243,679 274,750
4,300 Hartford Financial Services Group, Inc....... 224,159 232,469
------------ ------------
939,597 970,719
------------ ------------
</TABLE>
17
<PAGE>
FORTIS STOCK FUNDS
VALUE FUND (CONTINUED)
Schedule of Investments
February 28, 1999 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
LEISURE TIME-AMUSEMENTS-2.14%
5,500 Carnival Corp................................ $ 238,460 $ 244,750
18,500 Disney (Walt) Co............................. 467,430 650,969
------------ ------------
705,890 895,719
------------ ------------
MACHINERY-0.43%
8,500 Pall Corp.................................... 203,527 180,094
------------ ------------
MACHINERY-OIL AND WELL-0.37%
5,500 Halliburton Co............................... 189,660 155,375
------------ ------------
MACHINERY-SPECIALTY-1.08%
9,500 Ingersoll-Rand Co............................ 429,715 451,250
------------ ------------
MEDIA-0.88%
3,500 Clear Channel Communications, Inc. (a)....... 204,711 210,000
2,500 Gannett Co., Inc............................. 167,330 158,750
------------ ------------
372,041 368,750
------------ ------------
MEDICAL SUPPLIES-1.18%
7,000 Baxter International, Inc.................... 455,531 492,625
------------ ------------
METALS-MINING AND MISCELLANEOUS-0.58%
6,000 Alcoa, Inc................................... 240,603 243,000
------------ ------------
NATURAL GAS TRANSMISSIONS-1.14%
6,500 Coastal Corp................................. 212,646 208,000
4,100 Enron Corp................................... 201,439 266,500
------------ ------------
414,085 474,500
------------ ------------
OFFICE EQUIPMENT AND SUPPLIES-2.06%
15,000 Compaq Computer Corp......................... 461,032 528,750
6,000 Xerox Corp................................... 359,416 331,125
------------ ------------
820,448 859,875
------------ ------------
OIL AND GAS FIELD SERVICES-0.58%
5,000 Schlumberger Ltd............................. 239,246 242,813
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-10.17%
7,000 Anadarko Petroleum Corp...................... 215,151 192,500
6,000 Chevron Corp................................. 513,869 461,250
20,000 Conoco, Inc. Class A......................... 448,545 406,250
22,400 Exxon Corp................................... 1,628,509 1,491,000
6,800 Mobil Corp................................... 533,492 565,675
20,000 Royal Dutch Petroleum Co. NY Shares.......... 998,354 877,500
5,500 Texaco, Inc.................................. 329,592 256,094
------------ ------------
4,667,512 4,250,269
------------ ------------
PAPER-0.83%
3,500 International Paper Co....................... 156,471 147,000
6,500 Mead Corp.................................... 200,225 197,844
------------ ------------
356,696 344,844
------------ ------------
PHOTOGRAPHIC-0.55%
3,500 Eastman Kodak Co............................. 276,131 231,656
------------ ------------
PRECISION INSTRUMENTS-TEST, RESEARCH-0.55%
4,000 Emerson Electric Co.......................... 247,996 229,750
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
PUBLISHING-1.78%
11,500 Time Warner, Inc............................. $ 718,001 $ 741,750
------------ ------------
RAILROAD AND RAILROAD EQUIPMENT-1.01%
5,000 Burlington Northern Santa Fe Corp............ 149,405 165,625
5,500 Union Pacific Corp........................... 250,306 257,813
------------ ------------
399,711 423,438
------------ ------------
RESTAURANTS AND FRANCHISING-1.42%
7,000 McDonald's Corp.............................. 406,047 595,000
------------ ------------
RETAIL-DEPARTMENT STORES-2.04%
2,500 May Department Stores Co..................... 149,860 148,125
14,500 Saks, Inc. (a)............................... 384,840 521,094
4,500 Sears, Roebuck & Co.......................... 200,244 182,813
------------ ------------
734,944 852,032
------------ ------------
RETAIL-DISCOUNT STORES-0.54%
7,500 Dollar General Corp.......................... 197,917 224,531
------------ ------------
RETAIL-GROCERY-0.34%
2,500 Albertson's, Inc............................. 150,254 142,500
------------ ------------
RETAIL-SPECIALTY-1.53%
7,400 AutoZone, Inc. (a)........................... 188,512 259,000
10,500 Cendant Corp. (a)............................ 212,114 173,906
3,500 Lowe's Companies, Inc........................ 132,952 207,594
------------ ------------
533,578 640,500
------------ ------------
TELEPHONE SERVICES-9.81%
16,000 AT&T Corp.................................... 964,876 1,314,000
21,000 Bell Atlantic Corp........................... 1,152,890 1,206,188
9,000 BellSouth Corp............................... 355,193 416,250
8,500 GTE Corp..................................... 580,958 551,438
3,400 Sprint Corp.................................. 133,059 291,763
6,000 U S West, Inc................................ 346,103 319,875
------------ ------------
3,533,079 4,099,514
------------ ------------
TOYS-0.53%
6,000 Hasbro, Inc.................................. 226,708 222,000
------------ ------------
UNIT INVESTMENT TRUST-1.92%
6,500 S & P 500 Depositary Receipt................. 804,359 803,969
------------ ------------
UTILITIES-ELECTRIC-4.68%
8,900 CMS Energy Corp.............................. 412,785 368,238
5,500 Consolidated Edison, Inc..................... 281,883 257,125
3,500 Duke Energy Corp............................. 236,832 199,063
7,500 Edison International......................... 204,406 191,250
3,500 FPL Group, Inc............................... 229,949 180,031
5,500 Public Service Enterprise.................... 220,674 209,000
6,500 Reliant Energy, Inc.......................... 210,673 174,281
6,500 Southern Co.................................. 193,629 162,906
6,000 Unicom Corp.................................. 232,304 213,375
------------ ------------
2,223,135 1,955,269
------------ ------------
TOTAL COMMON STOCKS.......................... $ 37,459,265 $ 40,499,382
------------ ------------
------------ ------------
</TABLE>
18
<PAGE>
SHORT-TERM INVESTMENTS-2.89%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
--------- ------------
<C> <S> <C>
BANKS-0.00%
$ 1,157 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 4.79%........ $ 1,157
------------
DIVERSIFIED FINANCE-1.08%
449,000 Norwest Bank Associates Corp., Master
Variable Rate Note, Current
rate -- 4.70%.............................. 449,000
------------
INVESTMENT COMPANY-1.81%
757,751 Norwest Advantage Cash Investment Fund,
Current rate -- 4.71%...................... 757,751
------------
TOTAL SHORT-TERM INVESTMENTS................. 1,207,908
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$38,667,173) (b)........................... $41,707,290
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 28, 1999, the cost of securities for federal income tax
purposes was $38,937,084 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 4,581,184
Unrealized depreciation..................................... (1,810,978)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $ 2,770,206
- --------------------------------------------------------------------------
</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 2.10% of total net assets as of February 28, 1999.
19
<PAGE>
FORTIS STOCK FUNDS
GROWTH & INCOME FUND
Schedule of Investments
February 28, 1999 (Unaudited)
COMMON STOCKS-88.86%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (a) Value (b)
-------- ------------ ------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-0.53%
3,000 Interpublic Group of Companies, Inc.......... $ 226,098 $ 224,437
------------ ------------
AEROSPACE AND EQUIPMENT-1.46%
5,000 United Technologies Corp..................... 359,512 619,375
------------ ------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.96%
13,500 Genuine Parts Co............................. 441,333 404,156
------------ ------------
BANKS-5.15%
11,350 Bank One Corp................................ 510,589 610,062
6,000 BankAmerica Corp............................. 410,953 391,875
3,000 Chase Manhattan Corp......................... 225,555 238,875
8,000 Fleet Financial Group, Inc................... 284,240 343,500
11,000 Valley National Bancorp...................... 385,999 281,875
7,800 Washington Mutual, Inc....................... 295,151 312,000
------------ ------------
2,112,487 2,178,187
------------ ------------
BASIC INDUSTRY-0.36%
4,000 Autoliv, Inc................................. 162,970 152,000
------------ ------------
BEVERAGE-0.91%
5,000 Anheuser-Busch Companies, Inc................ 303,909 383,437
------------ ------------
BROKERAGE AND INVESTMENT-0.54%
3,000 Merrill Lynch & Co., Inc..................... 235,867 230,250
------------ ------------
BUSINESS SERVICES-2.59%
5,000 Deluxe Corp.................................. 189,509 169,375
14,000 Omnicom Group, Inc........................... 492,032 927,500
------------ ------------
681,541 1,096,875
------------ ------------
CHEMICALS-0.79%
6,500 Du Pont (E.I.) de Nemours & Co............... 481,867 333,531
------------ ------------
DRUGS-7.61%
11,500 Abbott Laboratories.......................... 355,528 534,031
8,000 American Home Products Corp.................. 445,164 476,000
5,400 Johnson & Johnson............................ 374,857 461,025
8,000 Merck & Co., Inc............................. 348,981 654,000
16,000 Pharmacia & Upjohn, Inc...................... 631,339 871,000
4,000 Schering-Plough Corp......................... 224,953 223,750
------------ ------------
2,380,822 3,219,806
------------ ------------
ELECTRICAL EQUIPMENT-1.78%
7,500 General Electric Co.......................... 421,048 752,344
------------ ------------
FINANCIAL SERVICES-4.51%
3,000 Fannie Mae................................... 116,010 210,000
25,000 Household International, Inc................. 1,087,822 1,015,625
6,300 Marsh & McLennan Companies, Inc.............. 328,037 446,119
9,702 MBNA Corp.................................... 93,145 235,273
------------ ------------
1,625,014 1,907,017
------------ ------------
FOOD-5.23%
12,000 Groupe Danone ADR............................ 431,348 599,250
8,400 Heinz (H.J.) Co.............................. 347,913 457,275
10,000 Nabisco Holdings Corp. Class A............... 443,064 443,750
13,000 Quaker Oats Co............................... 693,000 710,125
------------ ------------
1,915,325 2,210,400
------------ ------------
<CAPTION>
Market
Shares Cost (a) Value (b)
-------- ------------ ------------
<C> <S> <C> <C>
HAND TOOLS AND GENERAL HARDWARE-0.57%
8,500 Snap-On, Inc................................. $ 307,430 $ 240,125
------------ ------------
HOUSEHOLD PRODUCTS-1.40%
5,000 Clorox Co.................................... 329,895 591,562
------------ ------------
INSURANCE-3.51%
7,514 American International Group, Inc............ 408,524 856,126
32,800 LaSalle Re Holdings Ltd...................... 962,598 627,300
------------ ------------
1,371,122 1,483,426
------------ ------------
LEISURE TIME-AMUSEMENTS-1.30%
6,300 Disney (Walt) Co............................. 217,334 221,681
10,000 Royal Caribbean Cruises Ltd.................. 203,125 330,000
------------ ------------
420,459 551,681
------------ ------------
MACHINERY-0.90%
18,000 Pall Corp.................................... 432,759 381,375
------------ ------------
MEDICAL SUPPLIES-1.16%
7,000 Baxter International, Inc.................... 325,992 492,625
------------ ------------
NATURAL GAS TRANSMISSIONS-6.10%
6,900 Columbia Energy Group........................ 393,583 348,450
15,072 El Paso Energy Corp.......................... 402,835 549,186
17,712 Enron Corp................................... 737,108 1,151,280
14,400 Williams Companies, Inc...................... 346,937 532,800
------------ ------------
1,880,463 2,581,716
------------ ------------
OIL AND GAS FIELD SERVICES-0.92%
8,000 Schlumberger Ltd............................. 414,764 388,500
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-6.57%
5,000 Chevron Corp................................. 434,637 384,375
15,000 Conoco, Inc. Class A......................... 345,000 304,688
6,000 Exxon Corp................................... 318,656 399,375
10,500 Mobil Corp................................... 780,215 873,469
8,000 Royal Dutch Petroleum Co. NY Shares.......... 384,417 351,000
10,000 Texaco, Inc.................................. 500,373 465,625
------------ ------------
2,763,298 2,778,532
------------ ------------
OIL-MISCELLANEOUS-0.60%
2,999 BP Amoco Plc ADR............................. 186,015 254,915
------------ ------------
PHOTOGRAPHIC-1.25%
8,000 Eastman Kodak Co............................. 550,478 529,500
------------ ------------
PUBLISHING-4.96%
13,500 McGraw-Hill Companies, Inc................... 906,467 1,477,406
18,200 Reader's Digest Association, Inc. Class A.... 515,853 618,800
------------ ------------
1,422,320 2,096,206
------------ ------------
REAL ESTATE-INVESTMENT TRUST-3.23%
18,000 Cornerstone Properties, Inc.................. 279,084 272,250
11,140 Equity Office Properties Trust............... 258,587 286,855
8,000 Manufactured Home Communities, Inc........... 208,480 186,000
23,082 New Plan Excel Realty Trust.................. 502,263 478,952
4,000 Spieker Properties, Inc...................... 143,869 143,000
------------ ------------
1,392,283 1,367,057
------------ ------------
RETAIL-DEPARTMENT STORES-0.48%
5,000 Sears, Roebuck & Co.......................... 273,120 203,125
------------ ------------
</TABLE>
20
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (a) Value (b)
-------- ------------ ------------
<C> <S> <C> <C>
RETAIL-SPECIALTY-2.64%
14,200 Intimate Brands, Inc......................... $ 328,093 $ 558,238
13,500 Rite Aid Corp................................ 344,341 558,563
------------ ------------
672,434 1,116,801
------------ ------------
SHIP BUILDING, SHIPPING-0.52%
10,000 Sea Containers Ltd. Class A.................. 433,616 218,750
------------ ------------
TELECOMMUNICATIONS-3.88%
12,400 Ameritech Corp............................... 481,297 810,650
9,100 France Telecom S.A. ADR...................... 635,792 830,944
------------ ------------
1,117,089 1,641,594
------------ ------------
TELEPHONE SERVICES-11.87%
10,000 ALLTEL Corp.................................. 432,195 598,750
12,000 AT&T Corp.................................... 786,576 985,500
3,400 Bell Atlantic Corp........................... 199,136 195,288
<CAPTION>
Market
Shares Cost (a) Value (b)
-------- ------------ ------------
<C> <S> <C> <C>
26,500 Frontier Corp................................ $ 782,851 $ 952,344
10,400 GTE Corp..................................... 505,272 674,700
21,000 SBC Communications, Inc...................... 754,920 1,110,375
9,400 U S West, Inc................................ 372,996 501,138
------------ ------------
3,833,946 5,018,095
------------ ------------
TOBACCO-1.53%
16,500 Philip Morris Companies, Inc................. 690,124 645,563
------------ ------------
UTILITIES-ELECTRIC-3.05%
10,128 Duke Energy Corp............................. 420,128 576,030
27,000 Endesa S.A. ADR.............................. 507,710 712,125
------------ ------------
927,838 1,288,155
------------ ------------
TOTAL COMMON STOCKS.......................... $ 31,093,238 $ 37,581,118
------------ ------------
------------ ------------
</TABLE>
PREFERRED STOCKS-3.25%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (a) Value (b)
-------- ------------ ------------
<C> <S> <C> <C>
CONSTRUCTION-0.67%
5,500 Sealed Air Corp., Conv. Ser A................ $ 354,052 $ 283,250
------------ ------------
MISCELLANEOUS-1.54%
12,000 Qwest Trends Trust, Conv. 5.75% (d).......... 501,000 654,000
------------ ------------
UTILITIES-ELECTRIC-1.04%
7,500 AES Corp., Conv. Ser A "Tecons" 5.375%....... 425,599 438,750
------------ ------------
TOTAL PREFERRED STOCKS....................... $ 1,280,651 $ 1,376,000
------------ ------------
------------ ------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-0.59%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (a) Value (b)
--------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
WASTE DISPOSAL-0.59%
$200,000 Waste Management, Inc., 4.00% Conv. Sub Note
2-1-2002................................... BBB $ 203,875 $ 249,000
------------ ------------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-1.92%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (a) Value (b)
--------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.55%
$300,000 Assisted Living Concepts, Inc., 5.625% Conv.
5-1-2003 (d)............................... NR $ 300,000 $ 191,625
100,000 Centocor, Inc., 4.75% Conv. 2-15-2005 (d).... NR 100,000 104,250
400,000 Cypress Semiconductor Corp., 6.00% Conv.
10-1-2002 (d).............................. B 400,000 359,500
------------ ------------
800,000 655,375
------------ ------------
METALS-MINING AND MISCELLANEOUS-0.37%
250,000 Coeur D'Alene Mines Corp., 7.25% Conv. Sub
Note 10-31-2005 (d)........................ CCC+ 250,000 155,000
------------ ------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... 1,050,000 810,375
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $33,627,764 $40,016,493
------------ ------------
------------ ------------
</TABLE>
21
<PAGE>
FORTIS STOCK FUNDS
GROWTH & INCOME FUND (CONTINUED)
Schedule of Investments
February 28, 1999 (Unaudited)
SHORT-TERM INVESTMENTS-5.39%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (b)
----------- ------------
<C> <S> <C>
BANKS-0.00%
$ 1,028 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 4.79%........ $ 1,028
------------
DIVERSIFIED FINANCE-3.73%
1,579,000 Norwest Bank Associates Corp., Master
Variable Rate Note, Current
rate -- 4.70%.............................. 1,579,000
------------
INVESTMENT COMPANY-1.66%
699,611 Norwest Advantage Cash Investment Fund,
Current rate, 4.71%........................ 699,611
------------
TOTAL SHORT-TERM INVESTMENTS................. 2,279,639
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$35,907,403)(a)............................ $42,296,132
------------
------------
</TABLE>
(a) At February 28, 1999, the cost of securities for federal income tax
purposes was $35,907,403 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 8,439,519
Unrealized depreciation..................................... (2,050,790)
- -------------------------------------------------------------------------
Net Unrealized appreciation................................. $ 6,388,729
- -------------------------------------------------------------------------
</TABLE>
(b) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(c) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets. Market value of investments in foreign
securities represents 8.34% of total net assets as of February 28, 1999.
(d) 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>
1998 300,000 Assisted LIving Concepts, Inc. due 2003 - 144A $ 300,000
1998 100,000 Centocor, Inc. due 2005 - 144A 100,000
1997 250,000 Coeur D'Alene Mines Corp. due 2005 - 144A 250,000
1997 400,000 Cypress Semiconductor Corp. due 2002 - 144A 400,000
1998 12,000 Qwest Trends Trust, Conv. - 144A 501,000
</TABLE>
The aggregate value of these securities at February 28, 1999, was
$1,464,375, which represents 3.46% of total net assets.
22
<PAGE>
FORTIS STOCK FUNDS
CAPITAL FUND
Schedule of Investments
February 28, 1999 (Unaudited)
COMMON STOCKS-97.31%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-2.14%
155,000 Interpublic Group of Companies, Inc. $ 6,818,082 $ 11,595,937
------------- -------------
AIR FREIGHT-0.88%
50,000 FDX Corp. (a)................................ 4,325,795 4,775,000
------------- -------------
BANKS-0.48%
40,000 BankAmerica Corp............................. 2,739,688 2,612,500
------------- -------------
BEVERAGE-1.02%
40,000 Anheuser-Busch Companies, Inc................ 2,816,352 3,067,500
65,000 PepsiCo, Inc................................. 2,548,273 2,445,625
------------- -------------
5,364,625 5,513,125
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-3.51%
100,000 Amgen, Inc. (a).............................. 6,252,468 12,487,500
61,000 Centocor, Inc. (a)........................... 2,515,139 2,535,312
50,000 Genentech, Inc. (a).......................... 3,927,439 3,990,625
------------- -------------
12,695,046 19,013,437
------------- -------------
BROADCASTING-6.61%
125,000 Chancellor Media Corp. (a)................... 6,857,682 5,468,750
118,000 Comcast Corp. Special Class A................ 7,054,685 8,370,625
125,000 Tele-Communications, Inc. (a)................ 4,719,550 7,851,562
75,000 USA Networks, Inc. (a)....................... 2,762,647 2,981,250
126,000 Viacom, Inc. Class B (a)..................... 7,142,523 11,135,250
------------- -------------
28,537,087 35,807,437
------------- -------------
BROKERAGE AND INVESTMENT-0.50%
35,000 Merrill Lynch & Co., Inc..................... 2,751,787 2,686,250
------------- -------------
BUILDING MATERIALS-1.86%
91,500 Dayton Superior Corp. (a).................... 1,926,990 1,921,500
310,000 Masco Corp................................... 8,520,474 8,137,500
------------- -------------
10,447,464 10,059,000
------------- -------------
BUSINESS SERVICES-3.65%
106,000 Computer Sciences Corp. (a).................. 6,014,016 7,062,250
192,000 Fiserv, Inc. (a)............................. 5,077,266 9,024,000
50,000 Tyco International Ltd....................... 3,851,255 3,721,875
------------- -------------
14,942,537 19,808,125
------------- -------------
CHEMICALS-SPECIALTY-0.51%
65,000 Minerals Technologies, Inc................... 3,319,435 2,790,937
------------- -------------
COMPUTER-COMMUNICATION EQUIPMENT-7.11%
70,000 Cisco Systems, Inc. (a)...................... 1,092,696 6,846,875
230,000 Equant NV NY Shares (a)...................... 17,126,654 16,560,000
115,000 NCR Corp. (a)................................ 5,460,747 4,707,812
39,500 Sun Microsystems, Inc. (a)................... 1,887,889 3,843,844
220,000 Unisys Corp. (a)............................. 5,379,143 6,558,750
------------- -------------
30,947,129 38,517,281
------------- -------------
COMPUTER-SOFTWARE-5.88%
122,000 America Online, Inc. (a)..................... 2,638,566 10,850,375
35,000 Intuit, Inc. (a)............................. 2,252,759 3,462,812
89,000 Microsoft Corp. (a).......................... 3,105,699 13,361,125
75,000 Oracle Corp. (a)............................. 4,399,243 4,190,625
------------- -------------
12,396,267 31,864,937
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
DRUGS-5.91%
80,000 Eli Lilly & Co............................... $ 6,338,862 $ 7,575,000
130,000 Forest Laboratories, Inc. (a)................ 3,184,774 6,426,875
35,000 Johnson & Johnson............................ 2,766,845 2,988,125
180,000 Mylan Laboratories, Inc...................... 3,632,545 4,916,250
30,000 Pfizer, Inc.................................. 2,880,261 3,958,125
113,000 Pharmacia & Upjohn, Inc...................... 5,460,818 6,151,437
------------- -------------
24,264,105 32,015,812
------------- -------------
ELECTRICAL EQUIPMENT-2.12%
114,500 General Electric Co.......................... 9,562,975 11,485,781
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-2.01%
20,000 Intel Corp................................... 2,568,125 2,398,750
70,000 Motorola, Inc................................ 4,809,015 4,917,500
40,000 Texas Instruments, Inc....................... 2,204,016 3,567,500
------------- -------------
9,581,156 10,883,750
------------- -------------
FINANCIAL SERVICES-1.01%
78,000 Fannie Mae................................... 682,500 5,460,000
------------- -------------
FOOD-2.19%
122,400 Groupe Danone ADR............................ 4,168,585 6,112,350
130,000 Nabisco Holdings Corp. Class A............... 5,759,832 5,768,750
------------- -------------
9,928,417 11,881,100
------------- -------------
HOTEL AND GAMING-1.65%
252,000 Sun International Hotels Ltd. (a)............ 10,921,587 8,961,750
------------- -------------
HOUSEHOLD PRODUCTS-0.72%
33,000 Clorox Co.................................... 3,161,700 3,904,312
------------- -------------
INSURANCE-4.37%
144,000 American International Group, Inc............ 6,462,775 16,407,000
125,300 Hartford Life, Inc. Class A.................. 4,372,070 7,267,400
------------- -------------
10,834,845 23,674,400
------------- -------------
MACHINERY-0.72%
184,000 Pall Corp.................................... 4,354,446 3,898,500
------------- -------------
MEDIA-0.36%
82,000 Infinity Broadcasting Corp. (a).............. 1,681,000 1,947,500
------------- -------------
MEDICAL SUPPLIES-1.88%
145,000 Baxter International, Inc.................... 9,022,615 10,204,375
------------- -------------
MEDICAL TECHNOLOGY-1.07%
82,000 Medtronic, Inc. (with rights)................ 570,389 5,791,250
------------- -------------
MISCELLANEOUS-0.59%
50,000 Gemstar International Group Ltd. (a)......... 3,283,125 3,200,000
------------- -------------
MOTION PICTURES-0.54%
142,000 Cinar Corp. Class B (a)...................... 2,391,250 2,946,500
------------- -------------
NATURAL GAS TRANSMISSIONS-2.69%
117,000 Enron Corp................................... 6,315,223 7,605,000
188,000 Williams Companies, Inc...................... 6,111,262 6,956,000
------------- -------------
12,426,485 14,561,000
------------- -------------
OFFICE EQUIPMENT AND SUPPLIES-1.41%
65,000 Compaq Computer Corp......................... 3,086,506 2,291,250
52,000 EMC Corp. (a)................................ 2,678,475 5,323,500
------------- -------------
5,764,981 7,614,750
------------- -------------
</TABLE>
23
<PAGE>
FORTIS STOCK FUNDS
CAPITAL FUND (CONTINUED)
Schedule of Investments
February 28, 1999 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
OIL AND GAS FIELD SERVICES-0.96%
107,000 Schlumberger Ltd............................. $ 5,547,469 $ 5,196,188
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-3.03%
30,000 Chevron Corp................................. 2,557,047 2,306,250
113,500 Exxon Corp................................... 8,229,331 7,554,844
149,000 Royal Dutch Petroleum Co. NY Shares 7,229,879 6,537,375
------------- -------------
18,016,257 16,398,469
------------- -------------
PERSONAL SERVICES-0.55%
195,000 Service Corp. International.................. 3,703,245 2,998,125
------------- -------------
PRECISION INSTRUMENTS-TEST, RESEARCH-1.54%
88,000 Perkin-Elmer Corp............................ 7,836,739 8,338,000
------------- -------------
PUBLISHING-3.09%
200,000 Reader's Digest Association, Inc. Class A.... 5,919,660 6,800,000
154,000 Time Warner, Inc............................. 3,674,250 9,933,000
------------- -------------
9,593,910 16,733,000
------------- -------------
RESTAURANTS AND FRANCHISING-1.66%
106,000 McDonald's Corp.............................. 6,918,835 9,010,000
------------- -------------
RETAIL-DEPARTMENT STORES-1.60%
45,000 Dayton Hudson Corp........................... 2,533,950 2,815,313
85,000 Kohl's Corp. (a)............................. 832,547 5,865,000
------------- -------------
3,366,497 8,680,313
------------- -------------
RETAIL-DISCOUNT STORES-2.40%
59,000 Costco Companies, Inc. (a)................... 1,466,471 4,738,438
96,000 Wal-Mart Stores, Inc......................... 5,002,546 8,292,000
------------- -------------
6,469,017 13,030,438
------------- -------------
RETAIL-GROCERY-1.13%
95,000 Kroger Co. (a)............................... 5,039,028 6,145,313
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
RETAIL-SPECIALTY-2.85%
97,000 Home Depot, Inc.............................. $ 828,248 $ 5,789,688
55,000 Rite Aid Corp................................ 2,559,392 2,275,625
230,000 Walgreen Co.................................. 3,493,853 7,360,000
------------- -------------
6,881,493 15,425,313
------------- -------------
TELECOMMUNICATIONS-0.90%
20,000 Nokia Oyj Corp., ADR Class A................. 1,824,662 2,712,500
35,000 Qwest Communications International, Inc.
(a)........................................ 1,958,786 2,150,313
------------- -------------
3,783,448 4,862,813
------------- -------------
TELEPHONE SERVICES-11.03%
91,000 AirTouch Communications, Inc. (a)............ 2,517,557 8,286,688
75,000 ALLTEL Corp.................................. 3,452,070 4,490,625
108,000 AT&T Corp.................................... 7,140,449 8,869,500
95,700 Bell Atlantic Corp........................... 5,141,257 5,496,769
350,000 Frontier Corp................................ 10,665,547 12,578,125
142,000 MCI WorldCom, Inc. (a)....................... 2,522,328 11,715,000
30,000 NEXTLINK Communications, Inc. (a)............ 1,319,593 1,372,500
250,000 Vanguard Cellular Systems, Inc. Class A
(a)........................................ 5,744,078 6,968,750
------------- -------------
38,502,879 59,777,957
------------- -------------
TOBACCO-1.08%
150,000 Philip Morris Companies, Inc................. 7,125,802 5,868,750
------------- -------------
UTILITIES-ELECTRIC-1.65%
170,000 AES Corp. (a)................................ 4,215,565 6,321,875
100,000 Endesa S.A. ADR.............................. 2,446,916 2,637,500
------------- -------------
6,662,481 8,959,375
------------- -------------
WASTE DISPOSAL-0.45%
50,000 Waste Management, Inc........................ 1,897,708 2,443,750
------------- -------------
TOTAL COMMON STOCKS.......................... $ 385,061,326 $ 527,342,550
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-3.82%
<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 -- 4.79%........ $ 16,975
-------------
DIVERSIFIED FINANCE-2.63%
14,257,000 Norwest Bank Associates Corp., Master
Variable Rate Note, Current
rate -- 4.70%.............................. 14,257,000
-------------
INVESTMENT COMPANY-1.19%
6,430,729 Norwest Advantage Cash Investment Fund,
Current rate -- 4.71%...................... 6,430,730
-------------
TOTAL SHORT-TERM INVESTMENTS................. 20,704,705
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$405,766,031)(b)........................... $ 548,047,255
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 28, 1999, the cost of securities for federal income tax
purposes was $406,028,039 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $154,250,610
Unrealized depreciation..................................... (12,231,394)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $142,019,216
- --------------------------------------------------------------------------
</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 8.57% of total net assets as of February 28, 1999.
24
<PAGE>
FORTIS STOCK FUNDS
GROWTH FUND, INC.
Schedule of Investments
February 28, 1999 (Unaudited)
COMMON STOCKS-91.85%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-4.85%
220,000 Cox Radio, Inc. (a).......................... $ 9,453,097 $ 9,707,500
55,000 DoubleClick, Inc. (a)........................ 5,904,706 4,943,125
495,000 Outdoor Systems, Inc. (a).................... 11,372,317 13,829,062
357,500 Young & Rubicam, Inc. (a).................... 10,261,412 13,495,625
------------- -------------
36,991,532 41,975,312
------------- -------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.74%
130,000 Federal-Mogul Corp........................... 8,167,785 6,394,375
------------- -------------
BANKS-3.11%
165,000 AmSouth Bancorporation....................... 7,138,435 7,755,000
356,400 Imperial Bancorp (a)......................... 10,100,066 6,504,300
198,000 Zions Bancorporation......................... 10,170,429 12,672,000
------------- -------------
27,408,930 26,931,300
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-0.71%
148,500 Centocor, Inc. (a)........................... 6,802,299 6,172,031
------------- -------------
BROADCASTING-1.81%
385,000 Univision Communications, Inc. (a)........... 11,960,403 15,688,750
------------- -------------
BROKERAGE AND INVESTMENT-0.26%
55,000 Investment Technology Group, Inc. (a) 2,879,327 2,251,562
------------- -------------
BUSINESS SERVICES-5.32%
220,000 ACNielsen Corp. (a).......................... 6,098,679 5,720,000
90,900 C.H. Robinson Worldwide, Inc................. 2,345,466 2,386,125
256,600 Central Parking Corp......................... 10,295,824 8,756,475
110,000 Ceridian Corp. (a)........................... 7,042,521 7,878,750
261,300 Quintiles Transnational Corp. (a)............ 11,813,580 11,268,562
110,000 Stewart Enterprises, Inc..................... 1,833,134 1,650,000
316,300 Viad Corp.................................... 8,183,964 8,362,181
------------- -------------
47,613,168 46,022,093
------------- -------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION-0.62%
165,000 Scientific Atlanta, Inc...................... 5,550,157 5,352,187
------------- -------------
CHEMICALS-1.00%
467,500 Crompton & Knowles Corp...................... 11,351,972 8,648,750
------------- -------------
CHEMICALS-SPECIALTY-1.18%
330,000 Mallinckrodt Group, Inc...................... 9,822,080 10,209,375
------------- -------------
COMPUTER-COMMUNICATION EQUIPMENT-2.27%
182,225 Cisco Systems, Inc. (a)...................... 143,629 17,823,883
55,000 USWeb Corp. (a).............................. 1,434,114 1,852,812
------------- -------------
1,577,743 19,676,695
------------- -------------
COMPUTER-SOFTWARE-13.23%
330,000 Affiliated Computer Services, Inc. (a) 12,278,638 15,262,500
220,000 Comverse Technology, Inc. (a)................ 14,852,220 15,785,000
110,000 CSG Systems International, Inc. (a).......... 7,845,396 7,837,500
152,300 DST Systems, Inc. (a)........................ 9,024,380 8,262,275
99,000 Intuit, Inc. (a)............................. 5,947,433 9,794,812
165,000 Macromedia, Inc. (a)......................... 6,043,298 5,042,812
137,500 MindSpring Enterprises, Inc. (a)............. 7,914,502 11,756,250
330,000 National Instruments Corp. (a)............... 9,806,306 9,611,250
110,000 Netscape Communications Corp. (a) 7,137,449 8,518,125
82,500 Sapient Corp. (a)............................ 3,581,014 5,517,187
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
330,000 SunGard Data Systems, Inc. (a)............... $ 12,050,777 $ 13,076,250
225,000 Symantec Corp. (a)........................... 5,203,125 4,064,062
------------- -------------
101,684,538 114,528,023
------------- -------------
CONSTRUCTION-0.70%
165,000 Centex Corp.................................. 6,319,174 6,074,063
------------- -------------
CONSUMER CYCLICAL-1.18%
110,000 Best Buy Co., Inc. (a)....................... 5,707,383 10,202,500
------------- -------------
DRUGS-6.60%
110,000 AmeriSource Health Corp. (a)................. 8,415,828 8,208,750
110,000 Forest Laboratories, Inc. (a)................ 4,391,846 5,438,125
165,000 Medicis Pharmaceutical Corp. (a)............. 7,373,571 6,228,750
275,000 MedImmune, Inc. (a).......................... 11,686,125 15,125,000
275,000 Mylan Laboratories, Inc...................... 8,522,058 7,510,938
302,500 Watson Pharmaceuticals, Inc. (a)............. 12,763,646 14,614,531
------------- -------------
53,153,074 57,126,094
------------- -------------
EDUCATIONAL SERVICES-0.63%
165,000 Sylvan Learning Systems, Inc. (a)............ 4,358,229 5,486,250
------------- -------------
ELECTRONIC COMPONENTS-3.29%
220,000 Gentex Corp. (a)............................. 4,026,942 4,771,250
165,000 Jabil Circuit, Inc. (a)...................... 5,336,945 5,383,125
353,400 Solectron Corp. (a).......................... 2,167,957 15,792,563
55,000 Vitesse Semiconductor Corp................... 1,891,225 2,526,563
------------- -------------
13,423,069 28,473,501
------------- -------------
ELECTRONIC-CONTROLS AND EQUIPMENT-2.64%
220,000 American Power Conversion Corp. (a) 9,482,506 7,892,500
83,900 Symbol Technologies, Inc..................... 4,260,139 4,446,700
220,000 Teradyne, Inc. (a)........................... 10,693,716 10,477,500
------------- -------------
24,436,361 22,816,700
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-3.62%
165,000 Altera Corp. (a)............................. 10,037,503 8,023,125
165,000 Atmel Corp. (a).............................. 3,061,273 2,835,938
151,200 Novellus Systems, Inc. (a)................... 6,499,234 8,930,250
165,000 Xilinx, Inc. (a)............................. 11,511,497 11,508,750
------------- -------------
31,109,507 31,298,063
------------- -------------
FINANCIAL SERVICES-4.04%
220,000 Ambac Financial Group, Inc................... 14,050,666 12,320,000
124,700 Capital One Financial Corp................... 3,643,198 15,914,838
4,400 Franklin Resources, Inc...................... 62,333 139,975
168,375 MBNA Corp.................................... 2,002,537 4,083,094
119,600 National Commerce Bancorporation 2,448,034 2,481,700
------------- -------------
22,206,768 34,939,607
------------- -------------
FOOD-3.05%
275,000 Keebler Foods Co. (a)........................ 9,362,227 10,725,000
215,900 Suiza Foods Corp. (a)........................ 9,312,409 7,988,300
165,000 U.S. Foodservice (a)......................... 7,989,625 7,662,188
------------- -------------
26,664,261 26,375,488
------------- -------------
FURNITURE-1.49%
385,000 Furniture Brands International, Inc. (a) 9,241,748 8,229,375
275,000 Herman Miller, Inc........................... 8,136,816 4,675,000
------------- -------------
17,378,564 12,904,375
------------- -------------
</TABLE>
25
<PAGE>
FORTIS STOCK FUNDS
GROWTH FUND, INC. (CONTINUED)
Schedule of Investments
February 28, 1999 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
HEALTH CARE SERVICES-1.68%
237,900 MedQuist, Inc. (a)........................... $ 8,260,225 $ 8,133,206
165,000 Sunrise Assisted Living, Inc. (a)............ 7,123,457 6,373,125
------------- -------------
15,383,682 14,506,331
------------- -------------
LEISURE TIME-AMUSEMENTS-1.06%
276,800 Royal Caribbean Cruises Ltd.................. 9,743,121 9,134,400
------------- -------------
MEDIA-0.43%
110,000 Meredith Corporation......................... 3,699,908 3,712,500
------------- -------------
MEDICAL SUPPLIES-3.70%
137,500 Bergen Brunswig Corp. Class A................ 3,939,016 3,360,156
55,000 MiniMed, Inc. (a)............................ 4,547,683 4,688,750
401,400 STERIS Corp. (a)............................. 6,829,038 13,196,025
440,000 Sybron International Corp. (a)............... 10,520,952 10,807,500
------------- -------------
25,836,689 32,052,431
------------- -------------
METALS-FABRICATING-2.36%
219,900 Waters Corp. (a)............................. 13,137,310 20,464,444
------------- -------------
OIL AND GAS FIELD SERVICES-0.42%
320,700 Petroleum Geo-Services ADR (a)............... 4,481,848 3,668,006
------------- -------------
OIL-OFFSHORE DRILLING-0.28%
116,900 Transocean Offshore, Inc..................... 3,873,848 2,411,063
------------- -------------
POLLUTION CONTROL-0.45%
275,000 Catalytica, Inc. (a)......................... 4,622,362 3,918,750
------------- -------------
PRINTING-0.92%
165,000 Valassis Communications, Inc. (a)............ 8,087,379 7,920,000
------------- -------------
PUBLISHING-0.64%
110,000 Knight Ridder, Inc........................... 5,531,292 5,520,625
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
RESTAURANTS AND FRANCHISING-1.77%
290,300 Starbucks Corp. (a).......................... $ 6,313,049 $ 15,349,613
------------- -------------
RETAIL-DEPARTMENT STORES-2.10%
263,400 Kohl's Corp. (a)............................. 2,125,722 18,174,600
------------- -------------
RETAIL-ELECTRIC PRODUCTS, RADIO, TV,
AUDIO-0.69%
110,000 Circuit City Stores, Inc..................... 6,442,966 5,967,500
------------- -------------
RETAIL-SPECIALTY-5.91%
306,000 Dollar Tree Stores, Inc. (a)................. 6,596,000 12,240,000
376,144 Home Depot, Inc.............................. 1,284,943 22,451,095
560,593 Staples, Inc. (a)............................ 3,157,251 16,484,938
------------- -------------
11,038,194 51,176,033
------------- -------------
TELECOMMUNICATION EQUIPMENT-2.19%
96,300 ADC Telecommunications, Inc. (a)............. 3,576,688 3,900,150
220,000 ANTEC Corp. (a).............................. 5,933,064 6,132,500
110,000 International Network Services (a)........... 4,417,480 5,623,750
55,000 Plantronics, Inc. (a)........................ 3,891,968 3,327,500
------------- -------------
17,819,200 18,983,900
------------- -------------
TELEPHONE SERVICES-3.91%
220,000 Century Telephone Enterprises, Inc........... 10,539,430 13,585,000
245,500 MCI WorldCom, Inc. (a)....................... 4,130,713 20,253,750
------------- -------------
14,670,143 33,838,750
------------- -------------
WASTE DISPOSAL-1.00%
495,000 Republic Services, Inc. (a).................. 11,689,907 8,631,563
------------- -------------
TOTAL COMMON STOCKS.......................... $ 641,062,944 $ 794,977,603
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-7.93%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
------------ -------------
<C> <S> <C>
BANKS-0.01%
$ 37,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 4.79%........ $ 37,000
-------------
DIVERSIFIED FINANCE-4.43%
38,373,000 Norwest Bank Associates Corp., Master
Variable Rate Note, Current
rate -- 4.70%.............................. 38,373,000
-------------
INVESTMENT COMPANY-2.17%
18,774,683 Norwest Advantage Cash Investment Fund,
Current rate -- 4.71%...................... 18,774,683
-------------
U.S. GOVERNMENT AGENCY-1.32%
11,500,000 Federal Home Loan Mortgage Corp., 4.86%,
4-14-1999.................................. 11,431,647
-------------
TOTAL SHORT-TERM INVESTMENTS................. 68,616,330
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$709,679,274) (b).......................... $ 863,593,933
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 28, 1999, the cost of securities for federal income tax
purposes was $709,907,216 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $196,622,183
Unrealized depreciation..................................... (42,935,466)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $153,686,717
- -------------------------------------------------------------------------
</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 0.42% of total net assets as of February 28, 1999.
26
<PAGE>
FORTIS STOCK FUNDS
CAPITAL APPRECIATION PORTFOLIO
Schedule of Investments
February 28, 1999 (Unaudited)
COMMON STOCKS-101.89%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS - 0.42%
6,000 DoubleClick, Inc. (a)........................ $ 123,375 $ 539,250
------------- -------------
AEROSPACE AND EQUIPMENT-0.78%
62,000 Kellstrom Industries, Inc. (a)............... 1,246,216 1,003,625
------------- -------------
AIR FREIGHT-0.56%
25,000 Eagle USA Airfreight, Inc. (a)............... 740,625 721,875
------------- -------------
AIRLINES-0.61%
25,000 SkyWest, Inc................................. 852,468 785,937
------------- -------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.60%
27,000 Dura Automotive Systems, Inc. (a)............ 904,500 767,812
------------- -------------
BANKS-0.62%
40,000 Bay View Capital Corp........................ 626,720 797,500
------------- -------------
BEVERAGE-0.78%
25,000 Beringer Wine Estates Holdings, Inc. Class B
(a)........................................ 977,483 1,007,812
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-0.78%
36,000 Incyte Pharmaceuticals, Inc. (a)............. 750,345 1,010,250
------------- -------------
BUSINESS SERVICES-9.17%
28,500 Abacus Direct Corp. (a)...................... 1,290,140 1,930,875
11,000 Corporate Executive Board Co. (a)............ 209,000 269,500
100,000 GP Strategies Corp. (a)...................... 1,567,332 1,643,750
37,500 Korn/Ferry International (a)................. 525,000 426,562
23,000 Metzler Group, Inc. (a)...................... 876,750 977,500
32,500 MicroFinancial, Inc. (a)..................... 488,700 398,125
7,500 Modem Media.Poppe Tyson, Inc. (a) ........... 120,000 201,562
50,000 Nielsen Media Research, Inc.................. 1,027,275 981,250
40,000 Quanta Services, Inc. (a).................... 930,000 1,080,000
37,000 RCM Technologies, Inc. (a)................... 882,676 684,500
40,000 Remedy Corp. (a)............................. 835,936 822,500
115,000 Renaissance Worldwide, Inc. (a).............. 1,365,098 718,750
87,500 Tetra Tech, Inc. (a)......................... 2,100,000 1,667,969
------------- -------------
12,217,907 11,802,843
------------- -------------
COMPUTER-COMMUNICATION EQUIPMENT-1.70%
16,000 Network Appliance, Inc. (a).................. 377,884 672,000
45,000 USWeb Corp. (a).............................. 1,192,433 1,515,937
------------- -------------
1,570,317 2,187,937
------------- -------------
COMPUTER-HARDWARE-0.95%
108,000 Komag, Inc. (a).............................. 1,102,163 756,000
55,000 Read-Rite Corp. (a).......................... 836,592 467,500
------------- -------------
1,938,755 1,223,500
------------- -------------
COMPUTER-SOFTWARE-21.98%
50,000 Apex PC Solutions, Inc. (a).................. 983,504 1,225,000
80,000 Ardent Software, Inc. (a).................... 1,577,372 1,520,000
30,000 Bottomline Technologies, Inc. (a)............ 554,937 630,000
55,000 Business Objects S.A. ADR (a)................ 952,208 1,993,750
50,000 CheckFree Holdings Corp. (a)................. 1,095,820 1,712,500
15,000 Citrix Systems, Inc. (a)..................... 919,479 1,156,875
43,500 Cognizant Technology Solutions Corp. (a)..... 1,611,485 1,870,500
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
73,000 Computer Network Technology Corp. (a)........ $ 1,200,968 $ 866,875
28,000 Concentric Network Corp. (a)................. 1,064,175 1,228,500
20,000 Concord Communications, Inc. (a)............. 758,451 1,132,500
20,000 Dendrite International, Inc. (a)............. 614,048 562,500
38,300 Exchange Applications, Inc. (a).............. 520,237 631,950
50,000 Fundtech Ltd. (a)............................ 1,214,689 1,043,750
14,000 Infoseek Corp. (a)........................... 701,459 1,001,875
12,000 InfoSpace.com, Inc. (a)...................... 180,000 654,000
27,000 IONA Technologies plc ADR (a)................ 911,240 1,026,000
22,000 ISS Group, Inc. (a).......................... 928,297 1,344,062
51,000 Mercury Interactive Corp. (a)................ 1,787,248 3,305,437
14,000 New Dimension Software Ltd. (a).............. 438,180 654,500
25,000 Peregrine Systems, Inc. (a).................. 645,000 640,625
35,000 Preview Travel, Inc. (a)..................... 656,796 713,125
35,300 SERENA Software, Inc. (a).................... 533,900 463,312
11,500 Smith-Gardner & Associates, Inc. (a) ........ 138,000 146,625
18,500 TSI International Software Ltd. (a).......... 470,813 928,469
43,900 Verity, Inc. (a)............................. 724,230 1,695,637
1,500 Vignette Corp. (a)........................... 28,500 81,375
3,000 WebTrends Corp. (a).......................... 39,000 75,375
------------- -------------
21,250,036 28,305,117
------------- -------------
DRUGS-5.20%
33,000 Alkermes, Inc. (a)........................... 1,025,548 926,062
41,000 Anesta Corp. (a)............................. 965,368 812,312
38,000 Coulter Pharmaceutical, Inc. (a)............. 1,069,259 774,250
205,000 Cubist Pharmaceuticals, Inc. (a)............. 935,546 781,562
43,500 Medicis Pharmaceutical Corp. (a)............. 1,204,132 1,642,125
26,000 PathoGenesis Corp. (a)....................... 987,187 1,191,125
30,000 Pharmacyclics, Inc. (a)...................... 732,861 570,000
------------- -------------
6,919,901 6,697,436
------------- -------------
EDUCATIONAL SERVICES-5.51%
61,300 Bright Horizons Family Solutions, Inc. (a)... 1,368,346 1,294,962
35,000 Career Education Corp. (a)................... 620,000 984,375
20,000 Corinthian Colleges, Inc. (a)................ 360,000 447,500
44,000 Education Management Corp. (a)............... 756,250 1,182,500
39,900 ITT Educational Services, Inc. (a)........... 1,176,847 1,453,856
52,000 Sylvan Learning Systems, Inc. (a)............ 1,225,344 1,729,000
------------- -------------
5,506,787 7,092,193
------------- -------------
ELECTRICAL-COMPONENTS AND PARTS-0.76%
30,000 Cree Research, Inc. (a)...................... 1,181,250 980,625
------------- -------------
ELECTRONIC-COMMUNICATION SECURITY-0.77%
29,000 AXENT Technologies, Inc. (a)................. 498,058 995,063
------------- -------------
ELECTRONIC COMPONENTS-8.49%
57,750 Alpha Industries, Inc. (a)................... 1,331,225 1,176,656
90,000 American Xtal Technology, Inc. (a)........... 1,566,033 1,338,750
50,000 Anaren Microwave, Inc. (a)................... 1,231,081 1,203,125
20,000 Applied Micro Circuits Corp. (a)............. 915,782 785,000
20,000 ATMI, Inc. (a)............................... 560,468 455,000
49,600 Flextronics International Ltd. (a)........... 825,249 1,869,300
20,000 Genesis Microchip, Inc. (a).................. 585,782 630,000
44,000 Level One Communications, Inc. (a) .......... 891,000 1,474,000
11,000 PMC-Sierra, Inc. (a)......................... 298,679 779,625
</TABLE>
27
<PAGE>
FORTIS STOCK FUNDS
CAPITAL APPRECIATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 28, 1999 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
25,000 Power Integrations, Inc. (a)................. $ 643,750 $ 603,125
36,000 REMEC, Inc. (a).............................. 725,975 618,750
------------- -------------
9,575,024 10,933,331
------------- -------------
ELECTRONIC-CONTROLS AND EQUIPMENT-1.20%
40,500 Veeco Instruments, Inc. (a).................. 2,069,594 1,549,125
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-2.49%
40,000 Cymer, Inc. (a).............................. 1,052,858 915,000
40,000 hi/fn, Inc. (a).............................. 1,182,250 1,070,000
35,000 TranSwitch Corp. (a)......................... 761,407 1,216,250
------------- -------------
2,996,515 3,201,250
------------- -------------
FINANCIAL SERVICES-4.83%
65,000 Financial Federal Corp. (a).................. 1,484,557 1,279,688
138,100 Franchise Mortgage Acceptance Co. (a)........ 1,276,617 1,156,588
42,300 HealthCare Financial Partners, Inc. (a)...... 1,437,395 1,105,088
25,000 Metris Companies, Inc........................ 706,909 1,075,000
50,000 National Commerce Bancorporation ............ 917,032 1,037,500
18,000 NCO Group, Inc. (a).......................... 487,420 562,500
------------- -------------
6,309,930 6,216,364
------------- -------------
FURNITURE-0.73%
39,500 Select Comfort Corp. (a)..................... 767,800 943,063
------------- -------------
HEALTH CARE SERVICES-8.23%
35,000 Alternative Living Services, Inc. (a)........ 1,109,713 717,500
40,000 CareMatrix Corp. (a)......................... 771,763 880,000
49,000 Eclipsys Corp. (a)........................... 1,205,969 1,509,813
45,300 Kendle International, Inc. (a)............... 1,220,754 1,092,863
65,000 Orthodontic Centers of America, Inc. (a)..... 1,218,312 975,000
45,000 Province Healthcare Co. (a).................. 1,248,749 683,438
80,000 Renal Care Group, Inc. (a)................... 2,441,253 1,585,000
60,000 Sunrise Assisted Living, Inc. (a)............ 2,321,652 2,317,500
45,000 TLC The Laser Center, Inc. (a)............... 886,483 838,125
------------- -------------
12,424,648 10,599,239
------------- -------------
LEISURE TIME-AMUSEMENTS-0.53%
25,000 Hollywood Entertainment Corp. (a)............ 673,618 685,938
------------- -------------
MACHINERY-1.12%
75,000 Advanced Energy Industries, Inc. (a) ........ 1,872,604 1,443,750
------------- -------------
MACHINERY-TOOLS-0.79%
69,000 White Cap Industries, Inc. (a)............... 1,006,062 1,017,750
------------- -------------
MEDICAL TECHNOLOGY-1.83%
30,000 IGEN International, Inc. (a)................. 852,891 907,500
22,900 InfoCure Corp. (a)........................... 688,103 622,594
1,500 Osteotech, Inc. (a).......................... 75,938 81,188
48,000 QuadraMed Corp. (a).......................... 1,026,264 744,000
------------- -------------
2,643,196 2,355,282
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
MISCELLANEOUS-0.66%
100,000 Packaged Ice, Inc. (a)....................... $ 850,000 $ 850,000
------------- -------------
MOTION PICTURES-1.63%
61,000 Macrovision Corp. (a)........................ 1,776,625 2,104,500
------------- -------------
RETAIL-CLOTHING-1.93%
35,000 Children's Place Retail Stores, Inc. (a) .... 1,063,006 1,006,250
52,000 Pacific Sunwear of California, Inc. (a) ..... 1,166,466 1,482,000
------------- -------------
2,229,472 2,488,250
------------- -------------
RETAIL-ELECTRIC PRODUCTS, RADIO, TV,
AUDIO-0.74%
25,000 Tweeter Home Entertainment Group, Inc. (a)... 779,376 946,875
------------- -------------
RETAIL-MISCELLANEOUS-3.38%
42,500 Action Performance Companies, Inc. (a)....... 1,035,157 1,524,688
96,000 Insight Enterprises, Inc. (a)................ 2,099,745 2,232,000
16,500 Ticketmaster Online-CitySearch, Inc. Class B
(a)........................................ 406,000 596,063
------------- -------------
3,540,902 4,352,751
------------- -------------
RETAIL-SPECIALTY-1.01%
95,000 Media Arts Group, Inc. (a)................... 1,136,187 1,294,375
------------- -------------
RETAIL-VARIETY AND VARIETY MAIL ORDER-3.06%
25,000 99 Cents Only Stores (a)..................... 1,179,625 1,182,813
130,500 DM Management Co. (a)........................ 1,677,306 1,696,500
75,000 Shop at Home, Inc. (a)....................... 743,205 1,059,375
------------- -------------
3,600,136 3,938,688
------------- -------------
TELECOMMUNICATION EQUIPMENT-6.34%
43,000 ANTEC Corp. (a).............................. 746,275 1,198,625
50,000 CommScope, Inc. (a).......................... 788,075 928,125
12,500 Genesys Telecommunications Laboratories, Inc.
(a)........................................ 212,344 210,938
37,000 Gilat Satellite Networks Ltd. (a)............ 2,178,188 2,192,250
95,000 Microwave Power Devices, Inc. (a)............ 848,519 950,000
95,000 P-Com, Inc. (a).............................. 660,934 602,656
27,000 RF Micro Devices, Inc. (a)................... 863,179 2,079,000
------------- -------------
6,297,514 8,161,594
------------- -------------
TELEPHONE SERVICES-0.98%
40,000 WinStar Communications, Inc. (a)............. 1,291,876 1,260,000
------------- -------------
WASTE DISPOSAL-0.73%
47,000 Waste Connections, Inc. (a).................. 847,109 940,000
------------- -------------
TOTAL COMMON STOCKS.......................... $ 119,992,931 $ 131,200,900
------------- -------------
------------- -------------
</TABLE>
28
<PAGE>
SHORT-TERM INVESTMENTS-0.00%
<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 -- 4.79%........ $ 4,876
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$119,997,807)(b)........................... $ 131,205,776
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At February 28, 1999, the cost of securities for federal income tax
purposes was $120,019,750 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 22,232,693
Unrealized depreciation..................................... (11,046,667)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $ 11,186,026
- --------------------------------------------------------------------------
</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 5.70 % of total net assets as of February 28, 1999.
29
<PAGE>
FORTIS STOCK FUNDS
Statements of Assets and Liabilities
(Unaudited)
February 28, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET
ALLOCATION
PORTFOLIO
-------------
<S> <C>
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market (cost $190,237,186;
$38,667,173; $35,907,403;
$405,766,031; $709,679,274; and
$119,997,807 respectively) (Note
1).................................. $227,603,906
Collateral for securities lending
transactions (Note 1)............... 30,764,487
Receivables:
Investment securities sold.......... 1,887,089
Interest and dividends.............. 1,017,175
Subscriptions of capital stock...... 236,688
Deferred registration costs (Note
1).................................. 25,875
Prepaid expenses...................... 6,650
-------------
TOTAL ASSETS............................ 261,541,870
-------------
LIABILITIES:
Bank overdraft........................ 165,753
Payable upon return of securities
loaned (Note 1)..................... 30,764,487
Payable for investment securities
purchased........................... 2,450,941
Redemptions of capital stock.......... 8,736
Payable for investment advisory and
management fees (Note 2)............ 155,875
Payable for distribution fees (Note
2).................................. 17,938
Accounts payable and accrued
expenses............................ 35,238
-------------
TOTAL LIABILITIES....................... 33,598,968
-------------
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................ 175,549,139
Unrealized appreciation of
investments......................... 37,366,720
Undistributed net investment income
(loss).............................. 539,949
Accumulated net realized gain (loss)
from the sale of investments........ 14,487,094
-------------
TOTAL NET ASSETS........................ $227,942,902
-------------
-------------
SHARES OUTSTANDING AND NET ASSET VALUE
PER SHARE:
Class A shares (based on net assets of
$177,239,766; $25,507,258;
$25,579,846; $480,132,759;
$681,717,336; and $102,380,432;
respectively and 9,725,115; 2,008,450;
1,727,790; 22,041,282; 24,747,891;
and, 3,755,927 shares outstanding;
respectively)......................... $18.22
-------------
Class B shares (based on net assets of
$13,454,700; $6,014,308; $6,586,723;
$20,654,268; $16,988,365; and
$8,359,582; respectively and 743,493;
479,413; 446,109; 990,139; 646,781;
and, 315,752 shares outstanding;
respectively)......................... $18.10
-------------
Class C shares (based on net assets of
$7,490,526; $2,327,328; $2,547,254;
$4,991,249; $3,790,251; and
$2,549,322; respectively and 415,673;
185,455; 172,531; 239,309; 144,307;
and, 96,215 shares outstanding;
respectively)......................... $18.02
-------------
Class H shares (based on net assets of
$29,757,910; $7,932,414; $7,578,190;
$36,160,937; $44,941,285; and
$15,479,657; respectively and
1,645,030; 632,001; 513,302;
1,732,250; 1,709,922; and, 584,208
shares outstanding; respectively)..... $18.09
-------------
Class Z shares (based on net assets of
$0; $0; $0; $0; $118,064,010; and $0;
respectively and 0; 0; 0; 0;
4,233,574; and, 0 shares outstanding;
respectively)......................... --
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
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 $190,237,186;
$38,667,173; $35,907,403;
$405,766,031; $709,679,274; and
$119,997,807 respectively) (Note 1)... $41,707,290 $42,296,132 $548,047,255 $863,593,933 $131,205,776
Collateral for securities lending
transactions (Note 1)................. 3,697,868 2,173,248 88,860,548 -- 32,509,485
Receivables:
Investment securities sold............ -- -- 655,775 14,624,861 105,121
Interest and dividends................ 83,496 93,625 342,507 326,671 6,794
Subscriptions of capital stock........ 7,826 49,493 -- 114,204 --
Deferred registration costs (Note 1).... 34,901 28,547 47,261 34,146 25,367
Prepaid expenses........................ 1,161 1,173 48,007 18,566 2,584
------------ ------------ ------------- ------------- -------------
TOTAL ASSETS............................ 45,532,542 44,642,218 638,001,353 878,712,381 163,855,127
------------ ------------ ------------- ------------- -------------
LIABILITIES:
Bank overdraft........................ -- -- -- -- 1,454,798
Payable upon return of securities
loaned (Note 1)..................... 3,697,868 2,173,248 88,860,548 -- 32,509,485
Payable for investment securities
purchased........................... -- 124,915 6,708,745 12,466,169 893,500
Redemptions of capital stock.......... -- -- 52,831 71,851 85,090
Payable for investment advisory and
management fees (Note 2)............ 32,329 32,156 329,192 513,299 99,175
Payable for distribution fees (Note
2).................................. 3,125 3,171 25,144 32,779 10,139
Accounts payable and accrued
expenses............................ 17,912 16,715 85,680 127,036 33,947
------------ ------------ ------------- ------------- -------------
TOTAL LIABILITIES....................... 3,751,234 2,350,205 96,062,140 13,211,134 35,086,134
------------ ------------ ------------- ------------- -------------
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................ 39,284,399 36,431,122 344,458,454 591,880,282 92,673,033
Unrealized appreciation of
investments......................... 3,040,117 6,388,729 142,281,224 153,914,659 11,207,969
Undistributed net investment income
(loss).............................. 27,902 39,600 (487,144) (1,735,735) (705,450)
Accumulated net realized gain (loss)
from the sale of investments........ (571,110) (567,438) 55,686,679 121,442,041 25,593,441
------------ ------------ ------------- ------------- -------------
TOTAL NET ASSETS........................ $41,781,308 $42,292,013 $541,939,213 $865,501,247 $128,768,993
------------ ------------ ------------- ------------- -------------
------------ ------------ ------------- ------------- -------------
SHARES OUTSTANDING AND NET ASSET VALUE
PER SHARE:
Class A shares (based on net assets of
$177,239,766; $25,507,258;
$25,579,846; $480,132,759;
$681,717,336; and $102,380,432;
respectively and 9,725,115; 2,008,450;
1,727,790; 22,041,282; 24,747,891;
and, 3,755,927 shares outstanding;
respectively)......................... $12.70 $14.80 $21.78 $27.55 $27.26
------------ ------------ ------------- ------------- -------------
Class B shares (based on net assets of
$13,454,700; $6,014,308; $6,586,723;
$20,654,268; $16,988,365; and
$8,359,582; respectively and 743,493;
479,413; 446,109; 990,139; 646,781;
and, 315,752 shares outstanding;
respectively)......................... $12.55 $14.76 $20.86 $26.27 $26.48
------------ ------------ ------------- ------------- -------------
Class C shares (based on net assets of
$7,490,526; $2,327,328; $2,547,254;
$4,991,249; $3,790,251; and
$2,549,322; respectively and 415,673;
185,455; 172,531; 239,309; 144,307;
and, 96,215 shares outstanding;
respectively)......................... $12.55 $14.76 $20.86 $26.27 $26.50
------------ ------------ ------------- ------------- -------------
Class H shares (based on net assets of
$29,757,910; $7,932,414; $7,578,190;
$36,160,937; $44,941,285; and
$15,479,657; respectively and
1,645,030; 632,001; 513,302;
1,732,250; 1,709,922; and, 584,208
shares outstanding; respectively)..... $12.55 $14.76 $20.88 $26.28 $26.50
------------ ------------ ------------- ------------- -------------
Class Z shares (based on net assets of
$0; $0; $0; $0; $118,064,010; and $0;
respectively and 0; 0; 0; 0;
4,233,574; and, 0 shares outstanding;
respectively)......................... -- -- -- $27.89 --
------------ ------------ ------------- ------------- -------------
</TABLE>
31
<PAGE>
FORTIS STOCK FUNDS
Statements of Operations
(Unaudited)
For The Six-Month Period Ended February 28, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET
ALLOCATION
PORTFOLIO
------------
<S> <C>
NET INVESTMENT INCOME:
Income:
Interest income..................... $ 2,386,171
Dividend income..................... 577,197
Fee income (Note 1)................. 17,169
------------
Total income.......................... 2,980,537
------------
Expenses:
Investment advisory and management
fees (Note 2)...................... 950,232
Distribution fees (Class A) (Note
2)................................. 376,522
Distribution fees (Class B) (Note
2)................................. 59,107
Distribution fees (Class C) (Note
2)................................. 34,098
Distribution fees (Class H) (Note
2)................................. 133,900
Registration fees................... 26,034
Shareholders' notices and reports... 14,381
Legal and auditing fees (Note 2).... 13,178
Custodian fees...................... 12,397
Directors' fees and expenses........ 6,045
Other............................... 5,505
------------
Total expenses........................ 1,631,399
------------
NET INVESTMENT INCOME (LOSS)............ 1,349,138
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS (NOTE 1):
Net realized gain (loss) from security
transactions........................ 14,478,368
Net change in unrealized appreciation
of investments in securities........ 23,183,047
------------
NET GAIN ON INVESTMENTS................. 37,661,415
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... $39,010,553
------------
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH & CAPITAL
VALUE INCOME CAPITAL GROWTH APPRECIATION
FUND FUND FUND FUND PORTFOLIO
----------- ----------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income....................... $ 37,067 $ 116,045 $ 692,070 $ 2,181,944 $ 184,287
Dividend income....................... 364,620 439,969 1,566,448 569,059 20,239
Fee income (Note 1)................... 1,679 3,047 60,823 -- 86,405
----------- ----------- ------------- ------------- ------------
Total income............................ 403,366 559,061 2,319,341 2,751,003 290,931
----------- ----------- ------------- ------------- ------------
Expenses:
Investment advisory and management
fees (Note 2)....................... 201,296 197,047 1,863,943 3,131,654 589,393
Distribution fees (Class A) (Note
2).................................. 30,729 29,823 525,054 828,124 220,376
Distribution fees (Class B) (Note
2).................................. 27,973 29,767 79,904 75,770 37,609
Distribution fees (Class C) (Note
2).................................. 11,598 12,321 19,649 16,972 12,711
Distribution fees (Class H) (Note
2).................................. 38,808 35,665 144,216 206,189 73,264
Registration fees..................... 14,877 22,315 34,490 41,456 21,727
Shareholders' notices and reports..... 4,364 3,868 76,942 78,320 12,893
Legal and auditing fees (Note 2)...... 7,190 5,339 21,918 26,629 7,387
Custodian fees........................ 9,918 3,447 14,877 24,795 12,442
Directors' fees and expenses.......... 1,042 867 10,116 24,100 3,620
Other................................. 1,141 976 15,376 32,729 4,959
----------- ----------- ------------- ------------- ------------
Total expenses.......................... 348,936 341,435 2,806,485 4,486,738 996,381
----------- ----------- ------------- ------------- ------------
NET INVESTMENT INCOME (LOSS)............ 54,430 217,626 (487,144) (1,735,735) (705,450)
----------- ----------- ------------- ------------- ------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS (NOTE 1):
Net realized gain (loss) from security
transactions........................ 298,690 (560,801) 55,746,465 166,055,197 36,679,927
Net change in unrealized appreciation
of investments in securities........ 6,349,554 6,025,671 90,296,850 18,203,095 1,121,944
----------- ----------- ------------- ------------- ------------
NET GAIN ON INVESTMENTS................. 6,648,244 5,464,870 146,043,315 184,258,292 37,801,871
----------- ----------- ------------- ------------- ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... $6,702,674 $5,682,496 $145,556,171 $182,522,557 $37,096,421
----------- ----------- ------------- ------------- ------------
----------- ----------- ------------- ------------- ------------
</TABLE>
33
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
ASSET ALLOCATION PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED FOR THE
FEBRUARY 28, YEAR ENDED
1999 AUGUST 31,
(UNAUDITED) 1998
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income................. $ 1,349,138 $ 3,947,032
Net realized gain from security
transactions........................ 14,478,368 24,129,373
Net change in unrealized appreciation
(depreciation) on investments in
securities.......................... 23,183,047 (23,341,382)
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 39,010,553 4,735,023
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A............................. (1,236,914) (3,530,865)
Class B............................. (53,528) (143,082)
Class C............................. (31,624) (89,621)
Class H............................. (123,041) (329,951)
From net realized gains on investments
Class A............................. (17,270,217) (17,863,647)
Class B............................. (1,236,973) (930,570)
Class C............................. (718,168) (594,047)
Class H............................. (2,772,867) (2,139,737)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (23,443,332) (25,621,520)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (744,937 and 1,109,799
shares)............................ 13,625,756 20,793,396
Class B (140,296 and 206,273
shares)............................ 2,543,572 3,816,059
Class C (73,209 and 140,714
shares)............................ 1,321,229 2,591,158
Class H (293,179 and 550,316
shares)............................ 5,303,713 10,208,415
Proceeds from shares issued as a
result of reinvested dividends
Class A (984,248 and 1,160,677
shares)............................ 17,407,228 19,984,798
Class B (71,655 and 61,525
shares)............................ 1,259,311 1,051,151
Class C (41,840 and 39,182
shares)............................ 732,402 666,985
Class H (160,204 and 138,497
shares)............................ 2,815,479 2,364,813
Less cost of repurchase of shares
Class A (987,772 and 1,543,509
shares)............................ (18,094,503) (28,876,194)
Class B (59,398 and 72,269
shares)............................ (1,086,720) (1,344,891)
Class C (47,777 and 86,062
shares)............................ (864,573) (1,563,619)
Class H (176,690 and 229,288
shares)............................ (3,245,511) (4,274,549)
-------------- --------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.......................... 21,717,383 25,417,522
-------------- --------------
TOTAL INCREASE IN NET ASSETS............ 37,284,604 4,531,025
NET ASSETS:
Beginning of period................... 190,658,298 186,127,273
-------------- --------------
End of period (includes undistributed
net investment income of $539,949
and $635,918, respectively)......... $ 227,942,902 $ 190,658,298
-------------- --------------
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
VALUE FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED FOR THE
FEBRUARY 28, YEAR ENDED
1999 AUGUST 31,
(UNAUDITED) 1998
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income................. $ 54,430 $ 103,235
Net realized gain from security
transacations....................... 298,690 4,405,530
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... 6,349,554 (6,711,081)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. 6,702,674 (2,202,316)
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A............................. (90,240) (116,019)
From net realized gains on investments
Class A............................. (2,397,760) (1,834,718)
Class B............................. (554,315) (316,546)
Class C............................. (230,232) (128,889)
Class H............................. (753,187) (582,859)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (4,025,734) (2,979,031)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (251,837 and 874,678
shares)............................ 3,215,371 12,265,360
Class B (76,351 and 247,000
shares)............................ 974,543 3,441,440
Class C (35,024 and 102,283
shares)............................ 446,674 1,427,509
Class H (71,283 and 319,681
shares)............................ 902,180 4,443,733
Proceeds from shares issued as a
result of reinvested dividends
Class A (189,320 and 147,749
shares)............................ 2,381,643 1,917,777
Class B (43,127 and 24,075
shares)............................ 536,500 310,563
Class C (18,157 and 9,863 shares)... 226,060 127,233
Class H (59,339 and 44,057
shares)............................ 738,766 568,335
Less cost of repurchase of shares
Class A (326,956 and 745,823
shares)............................ (4,196,700) (10,582,157)
Class B (49,325 and 47,076
shares)............................ (638,391) (652,071)
Class C (37,587 and 17,164
shares)............................ (484,054) (243,534)
Class H (97,338 and 130,647
shares)............................ (1,248,023) (1,826,504)
-------------- --------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.......................... 2,854,569 11,197,684
-------------- --------------
TOTAL INCREASE IN NET ASSETS............ 5,531,509 6,016,337
NET ASSETS:
Beginning of period................... 36,249,799 30,233,462
-------------- --------------
End of period (includes undistributed
net investment income of $27,902 and
$63,712, respectively).............. $ 41,781,308 $ 36,249,799
-------------- --------------
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
GROWTH & INCOME FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED FOR THE
FEBRUARY 28, YEAR ENDED
1999 AUGUST 31,
(UNAUDITED) 1998
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income................. $ 217,626 $ 450,371
Net realized gain (loss) from security
transacations....................... (560,801) 1,099,245
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... 6,025,671 (2,106,124)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. 5,682,496 (556,508)
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A............................. (218,650) (301,319)
Class B............................. (32,271) (34,770)
Class C............................. (13,598) (16,440)
Class H............................. (39,398) (57,011)
From net realized gains on investments
Class A............................. (643,717) (10,124)
Class B............................. (159,781) (2,098)
Class C............................. (66,984) (1,029)
Class H............................. (193,318) (3,660)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (1,367,717) (426,451)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (309,535 and 884,571
shares)............................ 4,497,968 12,851,409
Class B (83,047 and 259,849
shares)............................ 1,211,869 3,766,301
Class C (28,478 and 101,311
shares)............................ 407,163 1,476,183
Class H (94,911 and 235,030
shares)............................ 1,375,171 3,401,436
Proceeds from shares issued as a
result of reinvested dividends
Class A (58,348 and 20,537
shares)............................ 838,062 295,600
Class B (13,200 and 2,527 shares)... 189,635 36,284
Class C (5,486 and 1,174 shares).... 78,816 16,824
Class H (15,545 and 4,142 shares)... 223,313 59,106
Less cost of repurchase of shares
Class A (231,167 and 378,949
shares)............................ (3,377,449) (5,467,953)
Class B (42,095 and 47,488
shares)............................ (614,372) (680,889)
Class C (29,904 and 33,012
shares)............................ (426,306) (477,648)
Class H (76,288 and 150,375
shares)............................ (1,102,457) (2,206,474)
-------------- --------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.......................... 3,301,413 13,070,179
-------------- --------------
TOTAL INCREASE IN NET ASSETS............ 7,616,192 12,087,220
NET ASSETS:
Beginning of period................... 34,675,821 22,588,601
-------------- --------------
End of period (includes undistributed
net investment income of $39,600 and
$125,891, respectively)............. $ 42,292,013 $ 34,675,821
-------------- --------------
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
CAPITAL FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED FOR THE
FEBRUARY 28, YEAR ENDED
1999 AUGUST 31,
(UNAUDITED) 1998
--------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment loss................... $ (487,144) $ (1,275,290)
Net realized gain from security
transacations....................... 55,746,465 99,276,929
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... 90,296,850 (90,739,760)
--------------- --------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 145,556,171 7,261,879
--------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments
Class A............................. (87,038,147) (51,765,513)
Class B............................. (2,796,670) (1,230,974)
Class C............................. (665,336) (528,829)
Class H............................. (5,017,347) (2,412,647)
--------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (95,517,500) (55,937,963)
--------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (4,677,986 and 1,862,268
shares)............................ 77,254,785 47,595,909
Class B (159,679 and 147,489
shares)............................ 4,304,597 3,672,027
Class C (34,481 and 139,698
shares)............................ 938,984 3,497,435
Class H (286,544 and 241,584
shares)............................ 7,582,939 6,064,134
Proceeds from shares issued as a
result of reinvested dividends
Class A (4,497,557 and 2,201,521
shares)............................ 79,966,564 47,971,130
Class B (159,241 and 57,622
shares)............................ 2,718,565 1,226,194
Class C (38,657 and 11,228
shares)............................ 659,875 238,938
Class H (280,582 and 107,308
shares)............................ 4,792,456 2,284,583
Less cost of repurchase of shares
Class A (5,411,330 and 3,138,422
shares)............................ (116,308,716) (79,897,413)
Class B (56,919 and 59,107
shares)............................ (1,139,906) (1,460,979)
Class C (29,641 and 93,825
shares)............................ (610,355) (2,064,335)
Class H (202,772 and 130,973
shares)............................ (4,103,212) (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.......................... 150,540,248 25,903,348
--------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 200,578,919 (22,772,736)
NET ASSETS:
Beginning of period................... 341,360,294 364,133,030
--------------- --------------
End of period (includes undistributed
net investment loss of $487,144 and
$0, respectively)................... $ 541,939,213 $ 341,360,294
--------------- --------------
--------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
GROWTH FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED
FEBRUARY 28, FOR THE
1999 YEAR ENDED
(UNAUDITED) AUGUST 31, 1998
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment loss................... $ (1,735,735) $ (2,778,444)
Net realized gain from security
transacations....................... 166,055,197 192,064,434
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... 18,203,095 (269,075,788)
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. 182,522,557 (79,789,798)
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments
Class A............................. (184,308,445) (73,567,568)
Class B............................. (4,328,600) (1,380,595)
Class C............................. (982,653) (263,230)
Class H............................. (11,801,227) (3,821,196)
Class Z............................. (29,609,385) (11,439,433)
--------------- ---------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (231,030,310) (90,472,022)
--------------- ---------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (8,414,372 and 8,712,019
shares)............................ 258,036,328 316,513,028
Class B (91,135 and 137,137
shares)............................ 2,661,762 4,825,473
Class C (22,802 and 39,174
shares)............................ 695,182 1,368,169
Class H (235,153 and 334,801
shares)............................ 6,963,461 11,860,557
Class Z (342,658 and 633,162
shares)............................ 10,445,883 22,701,753
Proceeds from shares issued as a
result of reinvested dividends
Class A (6,493,288 and 2,215,552
shares)............................ 175,708,363 70,609,674
Class B (165,721 and 44,166
shares)............................ 4,282,240 1,370,898
Class C (37,975 and 8,466 shares)... 981,286 262,702
Class H (452,808 and 121,751
shares)............................ 11,709,603 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 (9,698,161 and 11,076,500
shares)............................ (295,752,709) (403,375,496)
Class B (40,454 and 83,531
shares)............................ (1,205,977) (2,961,085)
Class C (11,375 and 17,551
shares)............................ (336,511) (618,203)
Class H (171,716 and 219,058
shares)............................ (5,128,755) (7,761,611)
Class Z (334,001 and 797,075
shares)............................ (10,475,377) (29,021,990)
--------------- ---------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.......................... 187,213,026 590,678
--------------- ---------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 138,705,273 (169,671,142)
NET ASSETS:
Beginning of period................... 726,795,974 896,467,116
--------------- ---------------
End of period (includes net investment
loss of $1,735,735 and $0,
respectively)....................... $ 865,501,247 $ 726,795,974
--------------- ---------------
--------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED FOR THE
FEBRUARY 28, YEAR ENDED
1999 AUGUST 31,
(UNAUDITED) 1998
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment loss................... $ (705,450) $ (1,429,668)
Net realized gain from security
transacations....................... 36,679,927 21,798,973
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... 1,121,944 (35,067,587)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. 37,096,421 (14,698,282)
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments
Class A............................. (25,279,823) --
Class B............................. (1,973,639) --
Class C............................. (717,382) --
Class H............................. (3,821,793) --
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (31,792,637) --
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (2,160,383 and 1,784,435
shares)............................ 64,171,676 60,422,475
Class B (47,881 and 67,943
shares)............................ 1,358,697 2,245,080
Class C (301,234 and 69,065
shares)............................ 8,821,750 2,233,307
Class H (75,009 and 143,196
shares)............................ 2,131,152 4,725,103
Proceeds from shares issued as a
result of reinvested dividends
Class A (934,544 and 0 shares)...... 24,709,359 --
Class B (75,977 and 0 shares)....... 1,953,357 --
Class C (27,679 and 0 shares)....... 712,172 --
Class H (147,498 and 0 shares)...... 3,795,119 --
Less cost of repurchase of shares
Class A (2,359,824 and 2,208,559
shares)............................ (70,827,659) (74,574,459)
Class B (33,891 and 59,677
shares)............................ (980,274) (1,999,115)
Class C (301,902 and 61,977
shares)............................ (8,881,985) (1,979,707)
Class H (98,642 and 126,141
shares)............................ (2,886,944) (4,222,152)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARE TRANSACTIONS............... 24,076,420 (13,149,468)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 29,380,204 (27,847,750)
NET ASSETS:
Beginning of period................... 99,388,789 127,236,539
-------------- --------------
End of period (includes net investment
loss of $705,450 and $0,
respectively)....................... $ 128,768,993 $ 99,388,789
-------------- --------------
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements
(Unaudited)
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The funds are open-end,
diversified management investment companies, each of which has different
investment objectives and their own investment portfolios and net asset
values. Asset Allocation and Capital Appreciation Portfolios are series of
Fortis Advantage Portfolios, Inc. ("Fortis Advantage") and Fortis Value Fund,
Fortis Growth & Income Fund and Fortis Capital Fund are funds of Fortis
Equity Portfolios, Inc. ("Fortis Equity"). The investment objectives of each
portfolio are as follows:
- The 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.
The Fortis Advantage Portfolios, Fortis Capital Fund and Fortis Growth Fund
began to issue multiple class shares effective November 14, 1994. The
inception of Fortis Value Fund and Fortis Growth & Income Fund was December
15, 1995, and the commencement of operations was January 2, 1996. Class A
shares are sold with a front-end sales charge. Class B and H shares are sold
without a front-end sales charge and may be subject to a contingent deferred
sales charge for six years, and such shares automatically convert to Class A
after eight years. Class C shares are sold without a front-end sales charge
and may be subject to contingent deferred sales charge for one year. Class Z
shares are sold without a front-end sales charge or a contingent deferred
sales charge and has no distribution fees. Only Fortis Growth Fund issues
Class Z shares. All classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except that
the level of distribution fees charged differs between classes. Income,
expenses (other than expenses incurred under each class's distribution
agreement) and realized and unrealized gains or losses on investments are
allocated to each class of shares based on its relative net assets.
The significant accounting policies followed by the Funds are summarized as
follows:
SECURITY VALUATION: Investments in securities traded on a national securities
exchange or on the NASDAQ National Market System are valued at the last
reported sales price. Securities for which over-the-counter market quotations
are readily available are valued on the basis of the last current bid price.
An outside pricing service may be utilized to provide such valuations. For
fixed income securities, the pricing service may employ electronic data
processing techniques and/or a matrix system to determine valuations using
methods which include consideration of yields or prices of bonds of
comparable quality, type of issue, coupon, maturity and rating indications as
to value from dealers, and general market conditions. Securities for which
quotations are not readily available are valued at fair value as determined
in good faith by management under supervision of the Board of Directors.
Short-term investments, with maturities of less than 60 days when acquired,
or which subsequently are within 60 days of maturity, are valued at amortized
cost.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS: Delivery and payment for
securities that have been purchased by the Asset Allocation Portfolio on a
forward commitment or when-issued basis can take place a month or more after
the transaction date. During this period, such securities are subject to
market fluctuations and the portfolio maintains, in a segregated account with
its custodian, assets with a market value equal to the amount of its purchase
commitments. At February 28, 1999, the Asset Allocation Portfolio had entered
into outstanding when-issued or forward commitments of $996,765.
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 Asset Allocation Portfolio amortizes original issue discount, long term
bond premium, and market discount.
For the six-month period ended February 28, 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................... $ 119,814,416 $ 126,255,718
Value Fund................................... 68,216,331 67,114,808
Growth & Income Fund......................... 11,118,600 7,371,172
Capital Fund................................. 401,850,331 304,490,896
Growth Fund.................................. 494,854,755 519,327,421
Capital Appreciation Portfolio............... 167,588,750 145,738,623
</TABLE>
40
<PAGE>
- --------------------------------------------------------------------------------
LENDING OF PORTFOLIO SECURITIES: At February 28, 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 six-month
period ended February 28, 1999:
<TABLE>
<CAPTION>
Fee
Income
For the
Period
Ended
February
Securities 28,
On Loan Collateral 1999
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
Asset Allocation Portfolio................... $ 28,901,163 $ 30,764,487 $17,169
Value Fund................................... 3,267,505 3,697,868 1,679
Growth & Income Fund......................... 2,054,425 2,173,248 3,047
Capital Fund................................. 83,093,236 88,860,548 60,823
Capital Appreciation Portfolio............... 29,796,556 32,509,485 86,405
</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.
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 February 28, 1999, investments in securities for the
Asset Allocation Portfolio and the Growth & Income Fund included issues that
are 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 February 28, 1999, was $3,797,420 in the Asset
Allocation Portfolio; $1,464,375 in the Growth & Income Fund, which
represents 1.67% and 3.46 % 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.
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 Appreciation Portfolio at an annual rate of 1% of the first $100
million of average daily net assets, .80% for the next $150 million, and .70%
for average daily net assets over $250 million of each portfolio.
In addition to the investment advisory and management fee, Classes A, B, C,
and H pay Fortis Investors, Inc. (the funds' principal underwriter)
distribution fees equal to .45% of average daily net assets for Class A for
each of Asset Allocation and Capital Appreciation Portfolios and .25% of
average daily net assets for Class A for each of Value Fund, Growth & Income
Fund, Capital Fund, 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................... $ 235,819 $ 11,160 $1,103 $ 28,982
Value Fund................................... 59,322 8,330 1,004 15,980
Growth & Income Fund......................... 73,461 8,485 970 16,335
Capital Fund................................. 348,611 10,155 1,379 53,222
Growth Fund.................................. 520,674 14,382 627 67,277
Capital Appreciation Portfolio............... 132,384 11,089 329 42,155
</TABLE>
For the period ended February 28, 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................... $2,876
Value Fund................................... 496
Growth & Income Fund......................... 397
Capital Fund................................. 10,017
Growth Fund.................................. 13,240
Capital Appreciation......................... 984
</TABLE>
41
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
3. FUND MERGER: Effective with the close of business on October 23, 1998, Fortis
Fiduciary Fund was merged into Fortis Capital Fund. The merger was approved
by the shareholders of 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 Fiduciary Capital
Fund on Fund Fund
October 23, Shares Shares
1998 Exchanged 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 Fund's 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>
4. FINANCIAL HIGHLIGHTS: Selected per share historical data for each of the
Stock Funds is presented based upon average fund shares outstanding:
<TABLE>
<CAPTION>
Class A
--------------------------------------------------------------------------
Year Ended August 31,
--------------------------------------------------------------------------
ASSET ALLOCATION PORTFOLIO 1999** 1998 1997 1996 1995++ 1994+++
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 16.91 $ 18.98 $ 16.48 $ 16.52 $ 14.44 $ 15.43
--------- --------- --------- --------- --------- ---------
Operations:
Investment gain - net................. .13 .39 .39 .47 .43 .37
Net realized and unrealized gain
(loss) on investments............... 3.28 .13 3.47 .29 2.14 (.31)
--------- --------- --------- --------- --------- ---------
Total from Operations................... 3.41 .52 3.86 .76 2.57 .06
--------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.14) (.41) (.41) (.47) (.40) (.33)
From net realized gains on
investments......................... (1.96) (2.18) (.95) (.32) (.09) (.72)
Excess distributions of net realized
gains............................... -- -- -- (.01) -- --
--------- --------- --------- --------- --------- ---------
Total distributions to shareholders..... (2.10) (2.59) (1.36) (.80) (.49) (1.05)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 18.22 $ 16.91 $ 18.98 $ 16.48 $ 16.52 $ 14.44
--------- --------- --------- --------- --------- ---------
Total Return @.......................... 20.60% 2.71% 24.62% 4.73% 18.25% 48%
Net assets end of period (000s
omitted).............................. $ 177,240 $ 151,920 $ 156,734 $ 136,656 $ 132,939 $ 119,395
Ratio of expenses to average daily net
assets................................ 1.42%* 1.44% 1.48% 1.50% 1.57%* 1.55%
Ratio of net investment income to
average daily net assets.............. 1.39%* 2.07% 2.22% 2.85% 3.31%* 2.60%
Portfolio turnover rate................. 59% 104% 109% 89% 94% 94%
</TABLE>
* Annualized.
** Six-month period ended February 28, 1999.
++ Ten-month period ended August 31, 1995.
+++ For the year ended October 31, 1994.
@ These are the total returns durning the periods, including
reinvestment of all dividend and capital gains distributions without
adjustments for sales charge.
42
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class B
----------------------------------------------------
Year Ended August 31,
----------------------------------------------------
ASSET ALLOCATION PORTFOLIO 1999** 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 16.80 $ 18.87 $ 16.40 $ 16.46 $ 14.27
-------- ------- ------- ------- -------
Operations:
Investment gain - net................. .07 .29 .27 .37 .39
Net realized and unrealized gain
(loss) on investments............... 3.28 .13 3.47 .29 2.26
-------- ------- ------- ------- -------
Total from Operations................... 3.35 .42 3.74 .66 2.65
-------- ------- ------- ------- -------
Distributions to shareholders:
From investment income - net.......... (.09) (.31) (.32) (.39) (.37)
From net realized gains on
investments......................... (1.96) (2.18) (.95) (.32) (.09)
Excess distributions of net realized
gains............................... -- -- -- (.01) --
-------- ------- ------- ------- -------
Total distributions to shareholders..... (2.05) (2.49) (1.27) (.72) (.46)
-------- ------- ------- ------- -------
Net asset value, end of period.......... $ 18.10 $ 16.80 $ 18.87 $ 16.40 $ 16.46
-------- ------- ------- ------- -------
Total Return @.......................... 20.33% 2.14% 23.92% 4.12% 19.00%
Net assets end of period (000s
omitted).............................. $ 13,455 $ 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.............. .84%* 1.50% 1.67% 2.34% 2.51%*
Portfolio turnover rate................. 59% 104% 109% 89% 94%
</TABLE>
<TABLE>
<CAPTION>
Class C
-------------------------------------------------------------
Year Ended August 31,
-------------------------------------------------------------
ASSET ALLOCATION PORTFOLIO 1999** 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 16.74 $ 18.81 $ 16.35 $ 16.41 $ 14.27
--------- --------- --------- --------- ---------
Operations:
Investment gain - net................. .05 .29 .26 .37 .39
Net realized and unrealized gain
(loss) on investments............... 3.28 .13 3.47 .29 2.21
--------- --------- --------- --------- ---------
Total from Operations................... 3.33 .42 3.73 .66 2.60
--------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.09) (.31) (.32) (.39) (.37)
From net realized gains on
investments......................... (1.96) (2.18) (.95) (.32) (.09)
Excess distributions of net realized
gains............................... -- -- -- (.01) --
--------- --------- --------- --------- ---------
Total distributions to shareholders..... (2.05) (2.49) (1.27) (.72) (.46)
--------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 18.02 $ 16.74 $ 18.81 $ 16.35 $ 16.41
--------- --------- --------- --------- ---------
Total Return @.......................... 20.28% 2.15% 23.93% 4.13% 18.64%
Net assets end of period (000s
omitted).............................. $ 7,491 $ 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.............. .84%* 1.51% 1.67% 2.33% 2.52%*
Portfolio turnover rate................. 59% 104% 109% 89% 94%
</TABLE>
* Annualized.
** Six-month period ended February 28, 1999.
+ For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
@ These are the total returns durning the periods, including
reinvestment of all dividend and capital gains distributions without
adjustments for sales charge.
43
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class H
-------------------------------------------------------------
Year Ended August 31,
-------------------------------------------------------------
ASSET ALLOCATION PORTFOLIO 1999** 1998 1997 1996 1995++
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 16.79 $ 18.86 $ 16.39 $ 16.44 $ 14.27
--------- --------- --------- --------- ---------
Operations:
Investment gain - net................. .07 .29 .27 .38 .39
Net realized and unrealized gain
(loss) on investments............... 3.28 .13 3.47 .29 2.24
--------- --------- --------- --------- ---------
Total from Operations................... 3.35 .42 3.74 .67 2.63
--------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.09) (.31) (.32) (.39) (.37)
From net realized gains on
investments......................... (1.96) (2.18) (.95) (.32) (.09)
Excess distributions of net realized
gains............................... -- -- -- (.01) --
--------- --------- --------- --------- ---------
Total distributions to shareholders..... (2.05) (2.49) (1.27) (.72) (.46)
--------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 18.09 $ 16.79 $ 18.86 $ 16.39 $ 16.44
--------- --------- --------- --------- ---------
Total Return @.......................... 20.34% 2.15% 23.93% 4.19% 18.86%
Net assets end of period (000s
omitted).............................. $ 29,758 $ 22,979 $ 17,142 $ 10,904 $ 4,676
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.............. .84%* 1.50% 1.67% 2.32% 2.54%*
Portfolio turnover rate................. 59% 104% 109% 89% 94%
</TABLE>
<TABLE>
<CAPTION>
Class A Class B
------------------------------------------- ----------------------------------------
Year Ended August 31, Year Ended August 31,
------------------------------------------- ----------------------------------------
VALUE PORTFOLIO 1999** 1998 1997 1996+ 1999** 1998 1997 1996+
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 11.85 $ 13.51 $ 10.75 $ 10.00 $11.71 $ 13.39 $ 10.70 $ 10.00
-------- -------- -------- ------- ------- ------- ------- -------
Operations:
Investment gain (loss) - net.......... .04 .09 .09 .05 (.02) (.02) (.01) --
Net realized and unrealized gain
(loss) on investments............... 2.16 (.30) 2.94 .70 2.16 (.30) 2.94 .70
-------- -------- -------- ------- ------- ------- ------- -------
Total from Operations................... 2.20 (.21) 3.03 .75 2.14 (.32) 2.93 .70
-------- -------- -------- ------- ------- ------- ------- -------
Distributions to shareholders:
From investment income - net.......... (.05) (.09) (.06) -- -- -- (.03) --
From net realized gains on
investments......................... (1.30) (1.36) (.21) -- (1.30) (1.36) (.21) --
-------- -------- -------- ------- ------- ------- ------- -------
Total distributions to shareholders..... (1.35) (1.45) (.27) -- (1.30) (1.36) (.24) --
-------- -------- -------- ------- ------- ------- ------- -------
Net asset value, end of period.......... $ 12.70 $ 11.85 $ 13.51 $ 10.75 $12.55 $ 11.71 $ 13.39 $ 10.70
-------- -------- -------- ------- ------- ------- ------- -------
Total Return @.......................... 18.68% (2.52)% 28.66% 7.50% 18.39% (3.33)% 27.75% 7.00%
Net assets end of period (000s
omitted).............................. $ 25,507 $ 22,449 $ 21,855 $ 9,847 $6,014 $ 4,794 $ 2,480 $ 642
Ratio of expenses to average daily net
assets................................ 1.44%* 1.52% 1.59% 1.65%* 2.19%* 2.27% 2.34% 2.40%*
Ratio of net investment income to
average daily net assets.............. .56%* .55% .72% .75%* (.19%)* (.20%) (.04%) --
Portfolio turnover rate................. 174% 260% 93% 41% 174% 260% 93% 41%
</TABLE>
* Annualized.
** Six-month period ended February 28, 1999.
+ 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.
++ For the period from November 14, (initial offering of shares) to
August 31, 1995.
44
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class C Class H
------------------------------------------- ----------------------------------------
Year Ended August 31, Year Ended August 31,
------------------------------------------- ----------------------------------------
VALUE PORTFOLIO 1999** 1998 1997 1996+ 1999** 1998 1997 1996+
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 11.72 $ 13.39 $ 10.70 $ 10.00 $11.72 $ 13.39 $ 10.70 $ 10.00
-------- -------- -------- ------- ------- ------- ------- -------
Operations:
Investment gain (loss) - net.......... (.03) (.01) (.01) -- (.03) (.01) (.01) --
Net realized and unrealized gain
(loss) on investments............... 2.16 (.30) 2.94 .70 2.16 (.30) 2.94 .70
-------- -------- -------- ------- ------- ------- ------- -------
Total from Operations................... 2.13 (.31) 2.93 .70 2.13 (.31) 2.93 .70
-------- -------- -------- ------- ------- ------- ------- -------
Distributions to shareholders:
From investment income - net.......... -- -- (.03) -- -- -- (.03) --
From net realized gains on
investments......................... (1.30) (1.36) (.21) -- (1.30) (1.36) (.21) --
-------- -------- -------- ------- ------- ------- ------- -------
Total distributions to shareholders..... (1.30) (1.36) (.24) -- (1.30) (1.36) (.24) --
-------- -------- -------- ------- ------- ------- ------- -------
Net asset value, end of period.......... $ 12.55 $ 11.72 $ 13.39 $ 10.70 $12.55 $ 11.72 $ 13.39 $ 10.70
-------- -------- -------- ------- ------- ------- ------- -------
Total Return @.......................... 18.28% (3.24)% 27.75% 7.00% 18.28% (3.24)% 27.75% 7.00%
Net assets end of period (000s
omitted).............................. $ 2,327 $ 1,991 $ 1,002 $ 223 $7,932 $ 7,016 $ 4,896 $ 1,605
Ratio of expenses to average daily net
assets................................ 2.19%* 2.27% 2.34% 2.40%* 2.19%* 2.27% 2.34% 2.40%*
Ratio of net investment income to
average daily net assets.............. (.19%)* (.20%) (.04%) -- (.19%)* (.20%) (.04%) --
Portfolio turnover rate................. 174% 260% 93% 41% 174% 260% 93% 41%
</TABLE>
<TABLE>
<CAPTION>
Class A Class B
------------------------------------------- ----------------------------------------
Year Ended August 31, Year Ended August 31,
------------------------------------------- ----------------------------------------
GROWTH & INCOME PORTFOLIO 1999** 1998 1997 1996+ 1999** 1998 1997 1996+
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 13.20 $ 13.06 $ 10.35 $ 10.00 $13.16 $ 13.03 $ 10.32 $ 10.00
-------- -------- -------- ------- ------- ------- ------- -------
Operations:
Investment gain - net................. .11 .32 .20 .07 .06 .20 .11 .02
Net realized and unrealized gain on
investments......................... 2.01 .07 2.77 .34 2.01 .07 2.77 .34
-------- -------- -------- ------- ------- ------- ------- -------
Total from Operations................... 2.12 .39 2.97 .41 2.07 .27 2.88 .36
-------- -------- -------- ------- ------- ------- ------- -------
Distributions to shareholders:
From investment income - net.......... (.13) (.24) (.16) (.06) (.08) (.13) (.07) (.04)
From net realized gains on
investments......................... (.39) (.01) (.10) -- (.39) (.01) (.10) --
-------- -------- -------- ------- ------- ------- ------- -------
Total distributions to shareholders..... (.52) (.25) (.26) (.06) (.47) (.14) (.17) (.04)
-------- -------- -------- ------- ------- ------- ------- -------
Net asset value, end of period.......... $ 14.80 $ 13.20 $ 13.06 $ 10.35 $14.76 $ 13.16 $ 13.03 $ 10.32
-------- -------- -------- ------- ------- ------- ------- -------
Total Return @.......................... 16.24% 2.81% 29.00% 4.11% 15.84% 1.99% 28.16% 3.55%
Net assets end of period (000s
omitted).............................. $ 25,580 $ 20,994 $ 13,907 $ 3,117 $6,587 $ 5,159 $ 2,306 $ 508
Ratio of expenses to average daily net
assets................................ 1.44%* 1.55% 1.75% 2.33%* 2.19%* 2.30% 2.50% 3.08%*
Ratio of net investment income to
average daily net assets.............. 1.40%* 1.71% 1.68% 1.16%* .65%* .96% .92% .35%*
Portfolio turnover rate................. 20% 20% 15% 5% 20% 20% 15% 5%
</TABLE>
* Annualized.
** Six-month period ended February 28, 1999.
+ 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.
45
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class C Class H
---------------------------------------- ----------------------------------------
Year Ended August 31, Year Ended August 31,
---------------------------------------- ----------------------------------------
GROWTH & INCOME PORTFOLIO 1999** 1998 1997 1996+ 1999** 1998 1997 1996+
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $13.16 $ 13.03 $ 10.33 $ 10.00 $13.16 $ 13.03 $ 10.33 $ 10.00
------- ------- ------- ------- ------- ------- ------- -------
Operations:
Investment gain - net................. .06 .20 .10 .03 .06 .20 .10 .03
Net realized and unrealized gain on
investments......................... 2.01 .07 2.77 .34 2.01 .07 2.77 .34
------- ------- ------- ------- ------- ------- ------- -------
Total from Operations................... 2.07 .27 2.87 .37 2.07 .27 2.87 .37
------- ------- ------- ------- ------- ------- ------- -------
Distributions to shareholders:
From investment income - net.......... (.08) (.13) (.07) (.04) (.08) (.13) (.07) (.04)
From net realized gains on
investments......................... (.39) (.01) (.10) -- (.39) (.01) (.10) --
------- ------- ------- ------- ------- ------- ------- -------
Total distributions to shareholders..... (.47) (.14) (.17) (.04) (.47) (.14) (.17) (.04)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period.......... $14.76 $ 13.16 $ 13.03 $ 10.33 $14.76 $ 13.16 $ 13.03 $ 10.33
------- ------- ------- ------- ------- ------- ------- -------
Total Return @.......................... 15.84% 1.99% 28.03% 3.65% 15.84% 1.99% 28.03% 3.65%
Net assets end of period (000s
omitted).............................. $2,547 $ 2,217 $ 1,290 $ 302 $7,578 $ 6,306 $ 5,085 $ 1,286
Ratio of expenses to average daily net
assets................................ 2.19%* 2.30% 2.50% 3.08%* 2.19%* 2.30% 2.50% 3.08%*
Ratio of net investment income to
average daily net assets.............. .65%* .96% .94% .54%* .65%* .96% .93% .44%*
Portfolio turnover rate................. 20% 20% 15% 5% 20% 20% 15% 5%
</TABLE>
<TABLE>
<CAPTION>
Class A
--------------------------------------------------------------------------
Year Ended August 31,
--------------------------------------------------------------------------
CAPITAL FUND 1999** 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 22.37 $ 26.13 $ 21.89 $ 21.22 $ 18.36 $ 18.12
--------- --------- --------- --------- --------- ---------
Operations:
Investment gain (loss) - net.......... (.03) (.08) (.08) .04 .08 .07
Net realized and unrealized gain on
investments......................... 5.70 .38 7.06 .67 3.62 1.73
--------- --------- --------- --------- --------- ---------
Total from Operations................... 5.67 .30 6.98 .71 3.70 1.80
--------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... -- -- (.01) (.04) (.08) (.12)
From net realized gains on
investments......................... (6.26) (4.06) (2.73) -- (.76) (1.44)
--------- --------- --------- --------- --------- ---------
Total distributions to shareholders..... (6.26) (4.06) (2.74) (.04) (.84) (1.56)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 21.78 $ 22.37 $ 26.13 $ 21.89 $ 21.22 $ 18.36
--------- --------- --------- --------- --------- ---------
Total Return @.......................... 31.65% 1.56% 34.57% 3.36% 21.49% 10.56%
Net assets end of period (000s
omitted).............................. $ 480,133 $ 312,582 $ 340,949 $ 277,587 $ 291,263 $ 245,776
Ratio of expenses to average daily net
assets................................ 1.12%* 1.13% 1.18% 1.21% 1.24% 1.21%
Ratio of net investment income to
average daily net assets.............. (.13%)* (.28%) (.33%) .17% .42% .41%
Portfolio turnover rate................. 68% 71% 43% 28% 14% 41%
</TABLE>
* Anualized.
** Six-month period ended February 28, 1999.
+ 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.
46
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class B
----------------------------------------------------
Year Ended August 31,
----------------------------------------------------
CAPITAL FUND 1999** 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 21.73 $ 25.67 $ 21.69 $ 21.14 $ 18.35
-------- ------- ------- ------- -------
Operations:
Investment gain (loss) - net.......... (.31) (.26) (.35) (.12) --
Net realized and unrealized gain on
investments......................... 5.70 .38 7.06 .67 3.58
-------- ------- ------- ------- -------
Total from Operations................... 5.39 .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 period.......... $ 20.86 $ 21.73 $ 25.67 $ 21.69 $ 21.14
-------- ------- ------- ------- -------
Total Return @.......................... 31.21% .80% 33.55% 2.60% 20.74%
Net assets end of period (000s
omitted).............................. $ 20,654 $ 9,339 $ 7,284 $ 4,097 $ 1,527
Ratio of expenses to average daily net
assets................................ 1.87%* 1.88% 1.93% 1.96% 1.99%*
Ratio of net investment income to
average daily net assets.............. (.88%)* (1.03%) (1.08%) (.60%) (.36%)*
Portfolio turnover rate................. 68% 71% 43% 28% 14%
</TABLE>
<TABLE>
<CAPTION>
Class C
---------------------------------------------------
Year Ended August 31,
---------------------------------------------------
CAPITAL FUND 1999** 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $21.73 $ 25.68 $ 21.68 $ 21.13 $ 18.35
------- ------- ------- ------- -------
Operations:
Investment gain (loss) - net.......... (.31) (.27) (.33) (.12) --
Net realized and unrealized gain on
investments......................... 5.70 .38 7.06 .67 3.57
------- ------- ------- ------- -------
Total from Operations................... 5.39 .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 period.......... $20.86 $ 21.73 $ 25.68 $ 21.68 $ 21.13
------- ------- ------- ------- -------
Total Return @.......................... 31.21% .76% 33.68% 2.60% 20.68%
Net assets end of period (000s
omitted).............................. $4,991 $ 2,453 $ 1,432 $ 824 $ 344
Ratio of expenses to average daily net
assets................................ 1.87%* 1.88% 1.93% 1.96% 1.99%*
Ratio of net investment income to
average daily net assets.............. (.88%)* (1.03%) (1.08%) (.60%) (.36%)*
Portfolio turnover rate................. 68% 71% 43% 28% 14%
</TABLE>
* Anualized.
** Six-month period ended February 28, 1999.
+ 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.
47
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class H
------------------------------------------------------
Year Ended August 31,
------------------------------------------------------
CAPITAL FUND 1999** 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 21.74 $ 25.68 $ 21.69 $ 21.14 $ 18.35
-------- -------- -------- ------- -------
Operations:
Investment gain (loss) - net.......... (.30) (.26) (.34) (.12) --
Net realized and unrealized gain on
investments......................... 5.70 .38 7.06 .67 3.58
-------- -------- -------- ------- -------
Total from Operations................... 5.40 .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 period.......... $ 20.88 $ 21.74 $ 25.68 $ 21.69 $ 21.14
-------- -------- -------- ------- -------
Total Return @.......................... 31.26% .80% 33.61% 2.60% 20.74%
Net assets end of period (000s
omitted).............................. $ 36,161 $ 16,987 $ 14,468 $ 8,052 $ 4,052
Ratio of expenses to average daily net
assets................................ 1.87%* 1.88% 1.93% 1.96% 1.99%*
Ratio of net investment income to
average daily net assets.............. (.88%)* (1.03%) (1.06%) (.60%) (.37%)*
Portfolio turnover rate................. 68% 71% 43% 28% 14%
</TABLE>
<TABLE>
<CAPTION>
Class A
--------------------------------------------------------------------------
Year Ended August 31,
--------------------------------------------------------------------------
GROWTH FUND 1999** 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 29.78 $ 37.32 $ 32.14 $ 32.66 $ 26.25 $ 29.09
--------- --------- --------- --------- --------- ---------
Operations:
Investment income (loss) - net........ (.14) (.11) (.16) (.11) (.04) (.10)
Net realized and unrealized gains
(losses) on investments............. 7.48 (3.59) 8.41 1.30 6.95 (.88)
--------- --------- --------- --------- --------- ---------
Total from operations................... 7.34 (3.70) 8.25 1.19 6.91 (.98)
--------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From net realized gains............... (9.57) (3.84) (3.07) (1.71) (.50) (1.86)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 27.55 $ 29.78 $ 37.32 $ 32.14 $ 32.66 $ 26.25
--------- --------- --------- --------- --------- ---------
Total Return @.......................... 25.23% (10.59)% 27.01% 4.09% 26.92% (3.77)%
Net assets end of period (000s
omitted).............................. $ 681,717 $ 581,819 $ 734,654 $ 641,061 $ 670,753 $ 558,589
Ratio of expenses to average daily net
assets................................ 1.06%* 1.05% 1.07% 1.09% 1.13% 1.09%
Ratio of net investment income to
average daily net assets.............. (.40%)* (.29%) (.45%) (.33%) (.13%) (.36%)
Portfolio turnover rate................. 65% 61% 28% 32% 27% 23%
</TABLE>
* Annualized.
** Six-month period ended February 28, 1999.
+ 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.
48
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class B
------------------------------------------------------
Year Ended August 31,
------------------------------------------------------
GROWTH FUND 1999** 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 28.85 $ 36.53 $ 31.75 $ 32.48 $ 25.85
-------- -------- -------- ------- -------
Operations:
Investment income (loss) - net........ (.49) (.25) (.56) (.32) (.13)
Net realized and unrealized gains
(losses) on investments............. 7.48 (3.59) 8.41 1.30 7.26
-------- -------- -------- ------- -------
Total from operations................... 6.99 (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.......... $ 26.27 $ 28.85 $ 36.53 $ 31.75 $ 32.48
-------- -------- -------- ------- -------
Total Return @.......................... 24.78% (11.25)% 26.02% 3.45% 28.17%
Net assets end of period (000s
omitted).............................. $ 16,988 $ 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 to
average daily net assets.............. (1.55%)* (1.04%) (1.19%) (1.07%) (1.09%)*
Portfolio turnover rate................. 65% 61% 28% 32% 27%
</TABLE>
<TABLE>
<CAPTION>
Class C
---------------------------------------------------
Year Ended August 31,
---------------------------------------------------
GROWTH FUND 1999** 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $28.85 $ 36.52 $ 31.75 $ 32.49 $ 25.85
------- ------- ------- ------- -------
Operations:
Investment income (loss) - net........ (.49) (.24) (.57) (.33) (.10)
Net realized and unrealized gains
(losses) on investments............. 7.48 (3.59) 8.41 1.30 7.24
------- ------- ------- ------- -------
Total from operations................... 6.99 (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.......... $26.27 $ 28.85 $ 36.52 $ 31.75 $ 32.49
------- ------- ------- ------- -------
Total Return @.......................... 24.78% (11.22)% 25.98% 3.41% 28.21%
Net assets end of period (000s
omitted).............................. $3,790 $ 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.............. (1.15%)* (1.04%) (1.19%) (1.07%) (1.10%)*
Portfolio turnover rate................. 65% 61% 28% 32% 27%
</TABLE>
* Annualized.
** Six-month period ended February 28, 1999.
+ 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.
49
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class H
-------------------------------------------------------
Year Ended August 31,
-------------------------------------------------------
GROWTH FUND 1999** 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 28.86 $ 36.54 $ 31.75 $ 32.49 $ 25.85
-------- -------- -------- -------- -------
Operations:
Investment income (loss) - net........ (.49) (.25) (.55) (.33) (.11)
Net realized and unrealized gains
(losses) on investments............. 7.48 (3.59) 8.41 1.30 7.25
-------- -------- -------- -------- -------
Total from operations................... 6.99 (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.......... $ 26.28 $ 28.86 $ 36.54 $ 31.75 $ 32.49
-------- -------- -------- -------- -------
Total Return @.......................... 24.76% (11.25)% 26.05% 3.41% 28.21%
Net assets end of period (000s
omitted).............................. $ 44,941 $ 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.............. (1.15%)* (1.04%) (1.19%) (1.07%) (1.10%)*
Portfolio turnover rate................. 65% 61% 28% 32% 27%
</TABLE>
<TABLE>
<CAPTION>
Class Z
----------------------------------------------
Year Ended August 31,
----------------------------------------------
GROWTH FUND 1999** 1998 1997 1996++
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 30.00 $ 37.47 $ 32.18 $ 31.61
--------- -------- --------- --------
Operations:
Investment income (loss) - net........ (.02) (.04) (.05) --
Net realized and unrealized gains
(losses) on investments............. 7.48 (3.59) 8.41 .57
--------- -------- --------- --------
Total from operations................... 7.46 (3.63) 8.36 .57
--------- -------- --------- --------
Distributions to shareholders:
From net realized gains............... (9.57) (3.84) (3.07) --
--------- -------- --------- --------
Net asset value, end of period.......... $ 27.89 $ 30.00 $ 37.47 $ 32.18
--------- -------- --------- --------
Total Return @.......................... 25.46% (10.34)% 27.34% 1.80%
Net assets end of period (000s
omitted).............................. $ 118,064 $ 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.............. (.15%)* (.04%) (.20%) .01%*
Portfolio turnover rate................. 65% 61% 28% 32%
</TABLE>
* Annualized.
** Six-month period ended February 28, 1999.
+ For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
++ 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.
50
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class A
-----------------------------------------------------------------------
Year Ended August 31,
-----------------------------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO 1999** 1998 1997 1996 1995++ 1994+++
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 26.42 $ 30.60 $ 34.76 $ 30.67 $ 23.05 $ 27.38
--------- -------- --------- --------- -------- --------
Operations:
Investment gain (loss) - net.......... (.15) (.35) (.26) (.29) (.17) (.12)
Net realized and unrealized gain
(loss) on investments............... 9.49 (3.83) (2.45) 4.61 7.79 (2.45)
--------- -------- --------- --------- -------- --------
Total from Operations................... 9.34 (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 period.......... $ 27.26 $ 26.42 $ 30.60 $ 34.76 $ 30.67 $ 23.05
--------- -------- --------- --------- -------- --------
Total Return @.......................... 36.35% (13.66)% (7.89)% 14.21% 33.06% (9.56)%
Net assets end of period (000s
omitted).............................. $ 102,380 $ 79,813 $ 105,422 $ 114,310 $ 90,918 $68,352
Ratio of expenses to average daily net
assets................................ 1.51%* 1.52% 1.55% 1.56% 1.69%* 1.62%
Ratio of net investment income to
average daily net assets.............. (1.04%)* (.97%) (.84%) (.96%) (.82%)* (.61%)
Portfolio turnover rate................. 124% 47% 25% 34% 21% 36%
</TABLE>
<TABLE>
<CAPTION>
Class B
----------------------------------------------------
Year Ended August 31,
----------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO 1998** 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 25.90 $ 30.16 $ 34.46 $ 30.57 $ 22.45
-------- ------- ------- ------- -------
Operations:
Investment gain (loss) - net.......... (.41) (.43) (.40) (.49) (.35)
Net realized and unrealized gain
(loss) on investments............... 9.49 (3.83) (2.45) 4.61 8.47
-------- ------- ------- ------- -------
Total from Operations................... 9.08 (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 period.......... $ 26.48 $ 25.90 $ 30.16 $ 34.46 $ 30.57
-------- ------- ------- ------- -------
Total Return @.......................... 36.04% (14.12)% (8.38)% 13.60% 36.17%
Net assets end of period (000s
omitted).............................. $ 8,360 $ 5,849 $ 6,561 $ 4,522 $ 841
Ratio of expenses to average daily net
assets................................ 2.06%* 2.07% 2.10% 2.11% 2.24%*
Ratio of net investment income to
average daily net assets.............. (1.59%)* (1.52%) (1.39%) (1.47%) (1.61%)*
Portfolio turnover rate................. 124% 47% 25% 34% 21%
</TABLE>
* Annualized.
** Six-month period ended February 28, 1999.
+ For the period from Novemver 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.
51
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
4. FINANCIAL HIGHLIGHTS (continued):
Class C
---------------------------------------------------
Year Ended August 31,
---------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO 1998** 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $25.92 $ 30.18 $ 34.48 $ 30.58 $ 22.45
------- ------- ------- ------- -------
Operations:
Investment gain (loss) - net.......... (.41) (.43) (.40) (.48) (.36)
Net realized and unrealized gain
(loss) on investments............... 9.49 (3.83) (2.45) 4.61 8.49
------- ------- ------- ------- -------
Total from Operations................... 9.08 (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 period.......... $26.50 $ 25.92 $ 30.18 $ 34.48 $ 30.58
------- ------- ------- ------- -------
Total Return @.......................... 36.01% (14.12)% (8.38)% 13.62% 36.21%
Net assets end of period (000s
omitted).............................. $2,549 $ 1,794 $ 1,875 $ 1,004 $ 227
Ratio of expenses to average daily net
assets................................ 2.06%* 2.07% 2.10% 2.11% 2.24%*
Ratio of net investment income to
average daily net assets.............. (1.59%)* (1.52%) (1.39%) (1.46%) (1.62%)*
Portfolio turnover rate................. 124% 47% 25% 34% 21%
</TABLE>
<TABLE>
<CAPTION>
Class H
-------------------------------------------------------
Year Ended August 31,
-------------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO 1998** 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 25.92 $ 30.18 $ 34.48 $ 30.58 $ 22.45
-------- -------- -------- -------- -------
Operations:
Investment gain (loss) - net.......... (.41) (.43) (.40) (.48) (.36)
Net realized and unrealized gain
(loss) on investments............... 9.49 (3.83) (2.45) 4.61 8.49
-------- -------- -------- -------- -------
Total from Operations................... 9.08 (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 period.......... $ 26.50 $ 25.92 $ 30.18 $ 34.48 $ 30.58
-------- -------- -------- -------- -------
Total Return @.......................... 36.01% (14.12)% (8.38)% 13.62% 36.21%
Net assets end of period (000s
omitted).............................. $ 15,480 $ 11,933 $ 13,379 $ 9,575 $ 2,115
Ratio of expenses to average daily net
assets................................ 2.06%* 2.07% 2.10% 2.11% 2.24%*
Ratio of net investment income to
average daily net assets.............. (1.59%)* (1.52%) (1.39%) (1.46%) (1.62%)*
Portfolio turnover rate................. 124% 47% 25% 34% 21%
</TABLE>
* Annualized.
** Six-month period ended February 28, 1999.
+ For the period from Novemver 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.
52
<PAGE>
DIRECTORS AND OFFICERS
DIRECTORS Richard W. Cutting CPA AND FINANCIAL CONSULTANT
Allen R. Freedman CHAIRMAN AND CHIEF EXECUTIVE OFFICER,
FORTIS, INC. MANAGING DIRECTOR OF
FORTIS INTERNATIONAL, N.V.
Dr. Robert M. Gavin PRESIDENT, CRANBROOK EDUCATION
COMMUNITY. PRIOR TO JULY 1996,
PRESIDENT MACALESTER COLLEGE
Benjamin S. Jaffray CHAIRMAN, SHEFFIELD GROUP, LTD.
Jean L. King PRESIDENT, COMMUNI-KING
Dean C. Kopperud CHIEF EXECUTIVE OFFICER AND DIRECTOR,
FORTIS ADVISERS, INC. PRESIDENT AND
DIRECTOR, FORTIS INVESTORS, INC.
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.
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
INVESTMENT MANAGER, REGISTRAR Fortis Advisers, Inc.
AND TRANSFER AGENT BOX 64284, ST. PAUL, MINNESOTA 55164
PRINCIPAL UNDERWRITER Fortis Investors, Inc.
BOX 64284, ST. PAUL, MINNESOTA 55164
CUSTODIAN Norwest Bank Minnesota N.A.
MINNEAPOLIS, MINNESOTA
GENERAL COUNSEL Dorsey & Whitney LLP
MINNEAPOLIS, MINNESOTA
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
MINNEAPOLIS, MINNESOTA
The use of this material is authorized only when preceded or accompanied by a
prospectus.
53
<PAGE>
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