<PAGE>
A "DISCIPLINED GROWTH" approach to mutual fund investing
[logo]
Fortis stock funds
semiannual report
February 29, 2000
FORTIS FINANCIAL GROUP
[PICTURE]
Fortis Asset Allocation Fund
Fortis Value Fund
Fortis Growth & Income Fund
Fortis Capital Fund
Fortis Growth Fund
Fortis Capital Appreciation Fund
<PAGE>
CONTENTS
LETTER TO SHAREHOLDERS 2
SCHEDULE OF INVESTMENTS
FORTIS ASSET ALLOCATION PORTFOLIO 9
FORTIS VALUE FUND 19
FORTIS GROWTH AND INCOME FUND 21
FORTIS CAPITAL FUND 24
FORTIS GROWTH FUND 26
FORTIS CAPITAL APPRECIATION PORTFOLIO 29
STATEMENTS OF ASSETS AND LIABILITIES 32
STATEMENTS OF OPERATIONS 34
STATEMENTS OF CHANGES IN NET ASSETS
FORTIS ASSET ALLOCATION PORTFOLIO 36
FORTIS VALUE FUND 37
FORTIS GROWTH AND INCOME FUND 38
FORTIS CAPITAL FUND 39
FORTIS GROWTH FUND 40
FORTIS CAPITAL APPRECIATION PORTFOLIO 41
NOTES TO FINANCIAL STATEMENTS 42
BOARD OF DIRECTORS AND OFFICERS 59
OTHER PRODUCTS AND SERVICES 60
TOLL-FREE PERSONAL ASSISTANCE
- Shareholder Services
- (800) 800-2000, Ext. 3012
- 7:30 a.m. to 7:00 p.m. CST, M-Th
- 7:30 a.m. to 7:00 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.
HIGHLIGHTS
FOR THE SIX-MONTH PERIOD ENDED FEBRUARY 29, 2000
<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........................ $ 18.43 $ 18.30 $ 18.22 $ 18.29 $18.44
End of period.............................. $ 18.98 $ 18.82 $ 18.73 $ 18.81 $18.99
TOTAL RETURN 22.09% 21.75% 21.79% 21.76% 22.36%
DISTRIBUTIONS PER SHARE:
From net investment income................. $ 0.194 $ 0.143 $ 0.143 $ 0.143 $0.236
From net realized gains on investments..... $ 3.030 $ 3.030 $ 3.030 $ 3.030 $3.030
FORTIS VALUE FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 13.28 $ 13.06 $ 13.07 $ 13.07
End of period.............................. $ 11.80 $ 11.54 $ 11.55 $ 11.55
TOTAL RETURN -4.48% -4.88% -4.87% -4.87%
DISTRIBUTIONS PER SHARE:
From net realized gains on investments..... $ 0.925 $ 0.925 $ 0.925 $ 0.925
FORTIS GROWTH & INCOME FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 14.83 $ 14.77 $ 14.76 $ 14.76
End of period.............................. $ 15.89 $ 15.82 $ 15.82 $ 15.82
TOTAL RETURN 9.37% 8.91% 8.98% 8.98%
DISTRIBUTIONS PER SHARE:
From net investment income................. $ 0.067 $ 0.009 $ 0.009 $ 0.009
From net realized gains on investments..... $ 0.253 $ 0.253 $ 0.253 $ 0.253
FORTIS CAPITAL FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 22.81 $ 21.77 $ 21.76 $ 21.78
End of period.............................. $ 24.50 $ 22.97 $ 22.97 $ 22.99
TOTAL RETURN 36.31% 35.73% 35.79% 35.75%
DISTRIBUTIONS PER SHARE:
From net realized gains on investments..... $ 5.350 $ 5.350 $ 5.350 $ 5.350
FORTIS GROWTH FUND
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 30.80 $ 29.26 $ 29.26 $ 29.28 $31.23
End of period.............................. $ 46.05 $ 43.02 $ 43.03 $ 43.07 $46.90
TOTAL RETURN 84.59% 83.86% 83.90% 83.92% 84.79%
DISTRIBUTIONS PER SHARE:
From net realized gains on investments..... $ 6.845 $ 6.845 $ 6.845 $ 6.845 $6.845
FORTIS CAPITAL APPRECIATION PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period........................ $ 36.04 $ 34.91 $ 34.94 $ 34.94
End of period.............................. $ 68.14 $ 65.19 $ 65.26 $ 65.25
TOTAL RETURN 143.34% 142.69% 142.68% 142.64%
DISTRIBUTIONS PER SHARE:
From net realized gains on investments..... $10.580 $10.580 $10.580 $10.580
</TABLE>
<PAGE>
HOW TO USE THIS REPORT
For a quick overview of each fund's performance during the past year, refer to
the Financial Highlights. The letters from the portfolio managers and president
provide a more detailed analysis of the funds and financial markets.
The charts alongside the letters are useful because they provide more
information about your investments. The top holdings chart shows the types of
securities in which the fund invests, and the pie chart shows a breakdown of the
fund's assets by sector. The portfolio changes show the investment decisions
your fund manager has made over the period in response to changing market
conditions.
The performance charts graphically compare the funds' total return performance
with a selected investment index. Remember, however, that an index may reflect
the performance of securities the fund may not hold. Also, the index does not
deduct sales charges, investment advisory fees and other fund expenses, whereas
your fund does. Individuals cannot buy an unmanaged index fund without incurring
some charges and expenses.
This report is just one of several tools you can use to learn more about your
investment in the Fortis Family of Mutual Funds. Your investment representative,
who understands your personal financial situation, can best explain the features
of your investment and how it's designed to help you meet your financial goals.
<TABLE>
<C> <S>
FORTIS ASSET ALLOCATION FUND
This is Fortis' most conservative
fund choice that includes stocks;
it merges three major categories
of assets -- stocks, bonds and
money markets -- into one fund to
[PHOTO] reduce risk and maximize return.
FORTIS VALUE FUND
This fund invests in large,
established companies whose
stocks are currently offered at a
price fund managers consider low
but that they expect to
[PHOTO] appreciate.
FORTIS GROWTH & INCOME FUND
This fund invests in some of the
world's biggest, most established
companies and is Fortis' most
conservative large-cap offering.
The fund seeks both capital
[PHOTO] appreciation and income.
FORTIS CAPITAL FUND
This fund has the distinction of
being Fortis' oldest and one of
our most popular large-cap stock
fund offerings. The primary goal
[PHOTO] of the fund is long-term growth.
FORTIS GROWTH FUND
This fund has been a favorite of
generations of Fortis investors.
It invests in established,
medium-size companies which fund
managers believe to have the
potential for above-average
[PHOTO] earnings growth.
FORTIS CAPITAL APPRECIATION FUND
Our small-cap stock fund offers
the potential for high total
returns. It's the most volatile
of the Fortis stock funds because
investing in small companies
[PHOTO] generally involves more risk.
</TABLE>
1
<PAGE>
[LOGO]
DEAR SHAREHOLDER:
Over the six month period ended February 29, 2000, the growth of the U.S.
economy has continued and, in fact, has accelerated and is currently expanding
at a 6% annualized rate. We have now entered the ninth year of this expansion
which is unprecedented in the post World War II era. The growth has been fueled
by strong consumer spending, particularly on housing and related items, and
autos. Additionally, corporate spending on technology and telecommunications has
been very strong. Most impressively, this growth has been achieved without
generating significantly higher inflation that has remained in the 2-2.5% area.
Clearly, the decade-long trend of higher productivity has been extremely
important in mitigating a variety of cost pressures including higher wage and
energy costs. Corporations have been able to offset higher costs and earnings
which enabled the S&P 500 to continue to rise at a rate in excess of 15%.
Through the end of the calendar year, the equity markets responded
enthusiastically to the positive economic environment and higher corporate
profits. In the final quarter of the year, investors increasingly became
interested in small and mid cap domestic stocks as well as international stocks
that are benefiting from improved growth trends as well. As a result, these
areas of the stock market outperformed the large cap area for the first time in
over five years. Clearly, the growth prospects for many technology,
communications, and health care companies garnered the attention of investors at
the expense of all other sectors.
The first two months of 2000 have been extremely volatile. The S&P 500 declined
7% while the S&P Mid Cap Index and the Russell 2000 advanced 4% and 15%,
respectively. Within the large cap portion of the market, growth stocks soared
while "old economy" stocks declined significantly. Exacerbating this situation
is the fact that investors increasingly are changing their investment
allocations to exclude value stocks and bonds. Therefore, growth oriented funds
have fared extremely well and the dichotomy in the market is very wide. Many of
the Fortis equity mutual funds have benefited from this attraction to growth
stocks. However, it is unlikely that the current extremes between growth and
value will persist for long. Investors will eventually be attracted to the
compellingly low valuations awarded to many "old economy" stocks and the spread
will likely narrow.
Our outlook for the remainder of the year calls for continuing economic growth,
albeit at a reduced pace. We believe that the Federal Reserve will continue to
tighten several more times and that higher interest rates will effect consumer
spending as the year progresses. Nevertheless, Gross Domestic Product (GDP) is
expected to advance 4.5-5% and corporate profits should rise 10-12%. The U.S.
market will benefit this year from improving economic growth abroad. Given this
outlook, we continue to believe that equities should prove to be a rewarding
investment this year.
In the fixed income market, two forces dominated the price action over the last
six months. First, two more increases in the Federal Funds rate (and a virtual
promise of future increases by Federal Reserve Chairman Greenspan) put upward
pressure on interest rates. Shorter securities suffered most, as yields on
Treasury issues maturing in less than ten years rose by amounts ranging from
0.45% to 0.95%. Second, the Treasury announced a significant change to its plans
for managing its outstanding debt. Specifically, because of current and
anticipated budget surpluses, the Treasury plans to reduce future issuance of
30-Year debt and to begin a buy back program targeting outstanding securities
with more than ten years to maturity. This dramatic reduction in current and
future supply - as much as $45 billion in 2000 alone - enabled the long end of
the yield curve (20+ year maturities) to perform better on a relative basis. In
this sector, yields rose by 0.1% or less, with the yields on some securities
decreasing modestly. These divergent yield changes resulted in an inverted yield
curve as of February 29, 2000, with 2-Year Treasuries yielding 6.53% and 30-Year
Treasuries yielding 6.15%. However, the inverted yield curve was confined to the
U.S. Treasury market. Yields on non-Treasury products remained upward sloping,
with the interest rate premiums on long maturity issues rising by more than
short maturity issues. We view these yield premiums, some of which exceed their
peak reached at the height of the 1998 global financial crisis, as attractive
long term.
Going forward, we expect that these two forces will continue to drive interest
rates. We believe that the Federal Reserve will increase short term rates an
additional 0.50% in the first half of this year, and perhaps more if GDP growth
doesn't slow eventually to a 3.5% - 4.0% pace. We also expect that the favorable
supply/demand dynamics mentioned above and modest inflation will continue
through the year, providing support to the prices of longer maturity Treasuries.
Finally, we anticipate that the Federal Reserve will be successful in slowing
the economy to a more sustainable long-term growth rate, and that yields
currently available in both Treasury and non-Treasury securities will be lower
in the next six to twelve months.
<TABLE>
<S> <C> <C>
/s/ Howard H. Hudson
/s/ Dean C. Kopperud /s/ Lucinda S. Mezey Howard H. Hudson
Dean C. Kopperud Lucinda S. Mezey Vice President
President Vice President, Equities Fixed Income
</TABLE>
2
<PAGE>
PORTFOLIO COMPOSITION BY SECTOR AS OF 2/29/2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Common Stock 64.5%
Corporate Bonds-Investment Grade 15.7%
U.S. Government Securities 7.3%
Corporate Bonds-Non-Investment Grade 7.2%
Asset Backed Securities 3.4%
Cash Equivalents/Receivables 1.9%
</TABLE>
TOP 10 HOLDINGS AS OF 2/29/2000
<TABLE>
<CAPTION>
Percent of
Securities Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. CIENA Corp. 2.2%
2. Motorola, Inc. 2.1%
3. Cabletron Systems, Inc. 2.0%
4. Texas Instruments, Inc. 1.8%
5. i2 Technologies, Inc. 1.5%
6. Enron Corp. 1.5%
7. Genentech, Inc. 1.3%
8. PE Corp-PE Biosystems Group 1.3%
9. General Electric Co. 1.3%
10. JDS Uniphase Corp. 1.2%
</TABLE>
ADVANTAGE ASSET ALLOCATION PORTFOLIO CLASS B, C, H AND Z AVERAGE ANNUAL TOTAL
RETURNS
<TABLE>
<CAPTION>
Since
1 Year 5 Year Inception
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class B sharesDiamond +23.75% +17.57 +17.38%+
Class B sharesDiamond Diamond +20.15% +17.38% +17.29%+
Class C sharesDiamond +23.81% +17.58% +17.32%+
Class C sharesDiamond Diamond +22.81% +17.58% -17.32%+
Class H sharesDiamond +23.76% +17.60% +17.38%+
Class H sharesDiamond Diamond +20.16% +17.41% +17.29%+
Class Z shares -- -- +10.71%++
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% if redeemed within two years or 3.00% if redeemed in year
three or four, 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 29, 2000.
+ Since November 14, 1994--Date shares were first offered to the
public.
++ Total return since July 27, 1999--Date shares were first
offered to the public.
FORTIS ASSET ALLOCATION PORTFOLIO
STOCKS, BONDS AND CASH BLENDED TO SMOOTH OUT THE HIGHS AND LOWS.
The six-month period ended February 29, 2000, proved to be another strong period
for the equity market, as a combination of strong earnings growth and low
inflation ignited investor appetite for stocks. Higher valuation levels on
higher earnings may drive higher stock prices. The fixed income markets,
however, have had to contend with several rate increases by the Federal Reserve,
as concerns over inflationary prospects surfaced. An investment environment such
as this emphasizes the advantage of an asset allocation fund.
For the six-month period ended February 29, 2000, the Asset Allocation Portfolio
reported a return of 22.09% for Class A shares without adjustment for sales
charge. This compares quite favorably to a return of 4.11% for the S&P 500 Index
and a return of 1.92% for the Lehman Aggregate Bond Index. A combination of the
above stock and bond indices posted a gain of 3.34% for the same period. (Based
on a 65% equity, 35% bond allocation in the portfolio.)
The asset allocation between stocks and bonds was targeted at a neutral 65%
stocks, 35% bonds at mid-fiscal year. This ratio had been reduced by the Asset
Allocation Committee in late summer 1999 to 60% equities, and then increased in
November back to 65%. In the equity area, telecommunications and service sectors
are overweighted versus the market while basic materials and consumer-related
sectors have been underweighted. Telecommunication and technology holdings
contributed to performance while energy and financial holdings generally
detracted from overall performance.
In the Fixed Income market, interest rates continued their upward trend as
inflation concerns heightened. In anticipation of continued increases of
interest rates by the Federal Reserve, we kept the portfolio duration neutral to
the benchmark for the six-month period. As expected, the Federal Reserve (Fed)
increased short-term interest rates by another 0.50%, causing yields on two-to
ten-year maturity Treasuries to rise by a similar or higher percentage. The
yield on the 30-year Treasury, however, rose by only 0.08%, as the Treasury
announced a $30 billion debt buyback program that will focus on outstanding
long-maturity Treasuries. Spreads or yield premiums on non-Treasury securities
widened during the second half of 1999 on fears of increased issuance prior to
Y2K. We took advantage of these widened spreads or yield premiums to increase
our exposure to corporate investment grade and non-investment grade securities.
In February, we went back to a neutral weighting of non-Treasury sectors since
we expect yield premiums to widen as the Fed continues to be in a tightening
mode.
The capital markets face the prospect of rising interest rates by the Federal
Reserve as the economy continues its robust expansion. While earnings prospects
remain bright, rising interest rates could affect the valuation levels of
equities, which are near historic highs. In the equity area, we continue to
focus on companies with solid growth prospects at relatively attractive
valuation levels, and hence our neutral equity weighting.
The combination of slower growth and continued under-control inflation should
ultimately lead to a better overall interest rate environment and lower yield
premiums for non-Treasury securities over the next 12 months.
VALUE OF $10,000 INVESTED MARCH 1, 1990
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS ASSET ALLOCATION PORTFOLIO
AGGREGATE BOND INDEX*** S&P 500**** CLASS A
<S> <C> <C> <C>
3/1/1990 $10,000 $10,000 $9,525
91 $11,222 $11,466 $10,653
92 $12,659 $13,297 $12,701
93 $14,201 $14,704 $13,587
94 $14,968 $15,931 $15,241
95 $15,234 $17,106 $15,581
96 $17,099 $23,035 $18,647
97 $18,014 $29,065 $20,876
98 $19,881 $39,244 $25,508
99 $21,127 $46,990 $28,929
00 $21,361 $52,502 $36,011
ASSET ALLOCATION PORTFOLIO
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR
CLASS A* +18.57% +17.10% +13.67%
CLASS A** +24.48% +18.24% +14.22%
</TABLE>
Annual period ended February 29
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1996, the portfolio had a sales charge
of 4.50%, and therefore, these figures do not represent actual performance
that would have been achieved by investing as described above.
** These are the 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 2/29/2000
ADDITIONS: ELIMINATIONS:
Agilent Technologies, Inc. Biovail Corp. International
CMGI, Inc. Enron Oil and Gas Co.
Computer Associates Forest Laboratories, Inc.
International, Inc. Masco Corp.
Corning, Inc. Merrill Lynch & Co., Inc.
Genentech, Inc. NCR Corp.
i2 Technologies, Inc. Potomac Electric Power Co.
Safeway, Inc. Royal Dutch Petroleum Co. NY
Siebel Systems, Inc. Shares
Walt Disney Co. Tyco International Ltd.
Xilinx, Inc. Williams Companies, Inc.
3
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/29/2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 31.4%
Financial Services 12.8%
Oil and Gas Field Services 10.7%
Banks 7.8%
Health Care Services 7.7%
Business Services 5.8%
Insurance 5.3%
Computer-Hardware 4.8%
Paper 4.3%
Computer-Software 4.1%
Oil-offshore Drilling 3.6%
Cash Equivalents/Receivables 1.7%
</TABLE>
TOP 10 HOLDINGS AS OF 2/29/2000
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Citigroup, Inc. 4.8%
2. Schlumberger Ltd. 4.2%
3. Chase Manhattan Corp. 4.1%
4. Halliburton Co. 4.0%
5. Diamond Offshore Drilling, Inc. 3.6%
6. United HealthCare Corp. 3.4%
7. CIGNA Corp. 3.3%
8. Reader's Digest Association, Inc. Class A 3.2%
9. Federated Department Stores, Inc. 3.2%
10. Fannie Mae 3.2%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- ---------------------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond -1.01% +11.08%
Class B sharesDiamond Diamond -4.28% +10.77%
Class C sharesDiamond -0.93% +11.10%
Class C sharesDiamond Diamond -1.84% +11.10%
Class H sharesDiamond -0.93% +11.10%
Class H sharesDiamond Diamond -4.19% +10.79%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% if redeemed within two years of purchase, 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 29, 2000.
+ Shares were first offered to the public January 2, 1996.
FORTIS VALUE FUND
QUALITY STOCKS, INEXPENSIVELY PRICED
For the six-month period ended February 29, 2000, the Barra Value Index
returned -4.94% while the Fortis Value Fund portfolio returned -4.48% for
Class A shares without adjustment for sales charge.
The fund's primary strategy is to invest in undervalued companies with
accelerating growth, where we anticipate a company's growth rate to rise over
time. To the extent that we cannot find undervalued companies with accelerating
earnings, we focus on our secondary criteria, inexpensively valued growth. We
continue to maintain adequate diversification across market sectors and remain
focused on stock selection.
Apple Computer, Amkor Technology and National Semiconductor were among the
fund's better performing stocks during the past six months. Recently we have
added a substantial position in oilfield services. We believe that the oilfield
services stocks have excellent opportunities for earnings acceleration in the
coming months due to the high price of oil. Their customer, the oil industry,
now finds it profitable to drill for oil after a prolonged spell of relatively
low oil prices. To fund our new position in oilfield services stocks we have
sold many of our international integrated oil companies. While international
integrated oil companies have been enjoying substantial acceleration in earnings
growth over the past several months, it will become much more difficult for them
to sustain their recent growth into the future if only because the
year-over-year comparisons will become so much more difficult. As a result, we
believe adding oilfield service stocks are a better investment for the
portfolio.
Looking ahead, we see the economy continuing to expand but at a slower rate. In
this environment we believe that the health care sector is a logical place for
us to invest because companies in the business of providing goods and services
used in the delivery of health care tend to enjoy relatively stable demand. We
are maintaining a below-average exposure to financial stocks because we believe
that the business environment will become more challenging for them in the
coming years. Rising interest rates or slowing global growth could negatively
affect the fund's performance. We continue to monitor the effects of interest
rates and the economy on the portfolio's holdings.
We remain focused on investing in undervalued companies with accelerating growth
or inexpensively valued growth. We believe that this investment philosophy will
provide good returns to shareholders for the long term.
VALUE OF $10,000 INVESTED JANUARY 2, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
VALUE FUND CLASS A BARRA VALUE***
<S> <C> <C>
1/2/1996 $9,525 $10,000
96 $10,170 $10,396
97 $12,551 $13,119
98 $15,929 $17,168
99 $16,002 $18,512
00 $15,983 $18,971
VALUE FUND
AVERAGE ANNUAL TOTAL RETURN
SINCE
1 YEAR JANUARY 2, 1996@
CLASS A* -4.86% +10.63%
CLASS A** -0.12% +11.93%
</TABLE>
Annual period ended February 29
Past performance is not indicative of future performance. Investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%.
** These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** The Barra Value Index is a capitalization-weighted index of all the
stocks in the Standard & Poor's 500 that have low price-to-book ratios.
@ Date shares were first offered to the public.
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/29/2000
<TABLE>
<S> <C>
ADDITIONS: ELIMINATIONS:
CIGNA Corp. Bank of America Corp.
Diamond Offshore Drilling, Inc. Baxter International, Inc. (with rights)
Federated Department Stores, Inc. Exxon Corp.
Halliburton Co. Freddie Mac
International Paper Co. MCI WorldCom, Inc.
PNC Bank Corp. Phillips Petroleum Co.
Reader's Digest Association, Inc. Pitney Bowes, Inc.
Class A Raytheon Co. Class B
Tenet Healthcare Corp. Royal Dutch Petroleum Co. NY Shares
Coastal Corporation Xerox Corp.
United HealthCare Corp.
</TABLE>
4
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/29/2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 38.4%
Telecommunications 11.0%
Telephone Services 9.9%
Computer-Software 7.0%
Utilities-Electric 5.8%
Cash Equivalents/Receivables 5.1%
Electronic-Semiconductor 5.1%
Drugs 3.9%
Publishing 3.6%
Computer-Communication Equipment 3.5%
Banks 3.4%
Electronic-Miscellaneous 3.3%
</TABLE>
TOP 10 HOLDINGS AS OF 2/29/2000
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Global Crossing, Conv. Pref. 7.00% 3.8%
2. Corning, Inc. 3.6%
3. Echostar Communications Corp., 4.875% Conv. 2007 3.3%
4. Texas Instruments, Inc. 3.3%
5. Dynegy, Inc. Class A 3.1%
6. SBC Communications, Inc. 2.7%
7. General Electric Co. 2.5%
8. Cabletron Systems, Inc. 2.3%
9. Enron Corp. 2.2%
10. McGraw-Hill Companies, Inc. 2.2%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- ---------------------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +9.13% +13.78%
Class B sharesDiamond Diamond +5.53% +13.49%
Class C sharesDiamond +9.13% +13.78%
Class C sharesDiamond Diamond +8.13% +13.78%
Class H sharesDiamond +9.13% +13.78%
Class H sharesDiamond Diamond +5.53% +13.49%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% if redeemed within two years of purchase, 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 29, 2000.
+ Shares were first offered to the public January 2, 1996.
FORTIS GROWTH & INCOME FUND
CONSERVATIVE GROWTH WITH PERIODIC DIVIDENDS
The six-month period ended February 29, 2000, proved to be another strong period
for equities, as the market embraced the strong earnings growth stemming from
the robust economy. Inflation remained benign, which enabled valuations to
expand on top of the higher level of earnings. Economic recovery in
international markets added to the positive environment for the equity market.
Fearful of a revival of inflation, the Federal Reserve raised interest rates
several times during this period, which caused some momentary bumpiness, but did
not derail the bull market.
For the six-month period ended February 29, 2000, the Growth & Income Fund
returned 9.37% for Class A shares without adjustment for sales charge. This
compares to return of 4.11% for the S&P 500 Index. This portfolio is generally
less volatile than the S&P 500 and also produces a current yield above that of
the S&P 500 Index. The technology sector performed particularly well during this
period of time, a factor that hurt comparative performance. Technology stocks
generally pay little or no dividends, and, as a result, this sector was
significantly underweighted in the portfolio. The service and telecommunications
sectors were overweighted and contributed to performance results. The energy and
financial sectors were overweighted for most of this time frame, but were both
reduced to below market weights by the end of the reporting period.
The capital markets currently face the prospects of further Federal Reserve
tightening in the form of rate increases early in the new year. While the
economy remains robust and earnings prospects bright, higher interest rates will
likely cause some consolidation in the equity market after its recent strength.
Going forward, the investment approach for Growth & Income continues to be
somewhat shifted toward a greater emphasis on growth versus current income. As a
result, our technology weightings have risen and will likely continue to rise as
a percentage of assets. In this period of high valuation and rising interest
rates, great attention is being paid to growth prospects and relative
valuations.
VALUE OF $10,000 INVESTED JANUARY 2, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** GROWTH & INCOME FUND CLASS A
<S> <C> <C>
1/2/96 $10,000 $9,525
96 $10,443 $9,677
97 $13,178 $11,745
98 $17,792 $14,565
99 $21,304 $15,286
00 $23,803 $16,806
GROWTH & INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
SINCE
1 YEAR JANUARY 2, 1996@
CLASS A* +4.72% +13.29%
CLASS A** +9.94% +14.62%
</TABLE>
Annual period ended February 29
Past performance is not indicative of future performance. Investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%.
** These are the 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 2/29/2000
<TABLE>
<S> <C>
ADDITIONS: ELIMINATIONS:
Agilent Technologies, Inc. Aon Corp.
Cabletron Systems, Inc. Baker Hughes, Inc.
Corning, Inc. Conoco, Inc. Class B
Global Crossing, Conv. 7.00% El Paso Energy Corp.
Mediaone Group, Inc. Conv. 7.00% Potomac Electric Power Co.
Microsoft Corp. Quaker Oats Co.
PSInet Inc. Conv. 7.00% Qwest Trends Trust, Conv. 5.75%
Texas Instruments, Inc. Texaco, Inc.
UnitedGlobalCom, Inc., Conv. 7.00% United Technologies Corp.
Walt Disney Co. Williams Companies, Inc.
</TABLE>
5
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/29/2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 35.7%
Telecommunication Equipment 10.5%
Electronic-Semiconductor 9.0%
Computer-Software 8.6%
Telecommunications 8.3%
Computer-Communication Equipment 5.3%
Broadcasting 5.1%
Biomedics, Genetics Research and Development 4.1%
Telephone Services 4.1%
Business Services 3.7%
Utilities-Electric 3.4%
Cash Equivalents/Receivables 2.2%
</TABLE>
TOP 10 HOLDINGS AS OF 2/29/2000
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. CIENA Corp. 3.7%
2. Cabletron Systems, Inc. 3.2%
3. Texas Instruments, Inc. 2.9%
4. JDS Uniphase Corp. 2.7%
5. Motorola, Inc. 2.4%
6. Enron Corp. 2.3%
7. PE Corp-PE Biosystems Group 2.2%
8. General Electric Co. 2.1%
9. Genentech, Inc. 2.0%
10. i2 Technologies, Inc. 1.9%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year 5 Year Inception+
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class B sharesDiamond +41.65% +25.38% +23.83%
Class B sharesDiamond Diamond +38.05% +25.23% +23.76%
Class C sharesDiamond +41.65% +25.40% +23.83%
Class C sharesDiamond Diamond +40.65% +25.40% +23.83%
Class H sharesDiamond +41.61% +25.41% +23.84%
Class H sharesDiamond Diamond +38.01% +25.26% +23.77%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% if redeemed within two years of purchase, 3.00% if redeemed
in year three or four, 2.00% if redeemed in year fiive and 1.00% if redeemed in
year six (with a waiver of 10% of the amount invested). Class C has a CDSC of
1.00% if redeemed within one year of purchase.
Diamond Without CDSC.
Diamond Diamond With CDSC. Assumes redemption on February 29, 2000.
+ Since November 14, 1994 - Date shares were first offered to the
public
FORTIS CAPITAL FUND
LONG-TERM GROWTH THROUGH LARGER, ESTABLISHED COMPANIES
During the six-month period ended February 29, 2000, the equity market posted
another strong advance reflecting a potent combination of earnings growth
coupled with low inflation. The advance was not broad, however, as the higher
growth sectors of the economy received most of investor's attention. At the same
time, the broader market, comprising many of the slower growing sectors of the
economy, had to contend with the effects of several Federal Reserve rate hikes
during the period. The divergence between these market sectors was quite
pronounced.
The Capital Fund has been well positioned in the more rapidly growing sectors of
the economy which has measurably helped performance during this period. For the
six-month period ended February 29, 2000, the Capital Fund returned 36.31% for
Class A shares without adjustment for sales charge. This compares to a return of
4.11% for the S&P 500 Index. Technology and communications holdings contributed
to the performance of the fund while energy and financial holdings generally
underperformed during the period.
Looking forward, market investors are embracing the "new" economy emerging from
breakthroughs in technology, communications and biotechnology. While it is
normal to expect some corrective periods in these sectors, it appears that these
areas of the economy will continue to be in the forefront of market leadership
for an extended period of time. Our task is to continue to be well represented
in the faster growing sectors of the economy by focusing on the best companies
in their respective industries, but also to be mindful of valuations during this
rather extraordinary time in the stock market.
VALUE OF $10,000 INVESTED MARCH 1, 1975
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500 *** CAPITAL FUND CLASS A
<S> <C> <C> <C> <C>
3/1/1975 $10,000 $9,525
76 $12,720 $11,459
77 $13,252 $11,463
78 $12,149 $10,641
79 $14,169 $12,888
80 $17,639 $18,509
81 $21,421 $25,623
82 $19,478 $26,198
83 $26,900 $39,344
84 $29,828 $41,006
85 $36,006 $47,767
86 $47,118 $65,017
87 $61,002 $85,141
88 $59,332 $75,238
89 $66,378 $79,424
90 $78,878 $96,114
91 $90,442 $110,662
92 $104,881 $141,113
93 $115,986 $142,428
94 $125,661 $158,449
95 $134,926 $164,979
96 $181,692 $203,518
97 $229,263 $234,446
98 $309,552 $308,302
99 $370,648 $371,814
00 $414,125 $530,805
CAPITAL FUND
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR 25 YEARS
CLASS A* + 35.98% + 25.10% + 18.06% + 17.20%
CLASS A** + 42.76% + 26.33% + 18.64% + 17.43%
</TABLE>
Annual period ended February 29
Past performance is not indicative of future performance. Investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1990, the portfolio had a sales
charge of 8.50%, and therefore, these figures do not represent actual
performance that would have been achieved by investing as described
above.
** These are the 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 2/29/2000
<TABLE>
<CAPTION>
ADDITIONS: ELIMINATIONS:
<S> <C>
Agilent Technologies, Inc. EOG Resources, Inc.
Computer Associates Forest Laboratories, Inc.
International, Inc.
Corning, Inc. Masco Corp.
Genentech, Inc. Merrill Lynch & Co., Inc.
i2 Technologies, Inc. NCR Corp.
National Semiconductor Corp. Potomac Electric Power Co.
Siebel Systems, Inc. Royal Dutch Petroleum Co. NY Shares
Walt Disney Co. Tandy Corp. (with rights)
Warner-Lambert Co. Tyco International Ltd.
Xilinx, Inc. Williams Companies, Inc.
</TABLE>
6
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/29/2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 26.7%
Computer-Software 24.7%
Electronic-Semiconductor 10.2%
Telecommunication Equipment 6.3%
Drugs 5.9%
Advertising-Public Relations 2.9%
Oil-offshore Drilling 3.5%
Electric-Components and Parts 3.5%
Business Services 3.5%
Telecommunications 3.9%
Broadcasting 4.4%
Cash Equivalents/Receivables 4.5%
</TABLE>
TOP 10 HOLDINGS AS OF 2/29/2000
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. SDL, Inc. 2.9%
2. CIENA Corp. 2.7%
3. VeriSign, Inc. 2.3%
4. PE Corp-PE Biosystems Group 2.1%
5. Amdocs Ltd. 2.1%
6. Check Point Software Technologies Ltd. 2.1%
7. Applied Micro Circuits Corp. 2.1%
8. Peregrine Systems, Inc. 2.1%
9. BEA Systems, Inc. 2.0%
10. Mercury Interactive Corp. 2.0%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/29/2000
ADDITIONS: ELIMINATIONS:
Advanced Fibre Amdocs Ltd.
Communications, Inc. Best Buy Co., Inc.
Biovail Corp. International Cypress Semiconductor Corp.
BJ Services Co. Exodus Communications, Inc.
EMCORE Corp. Home Depot, Inc.
i2 Technologies, Inc. Integrated Device
Intertrust Technologies Corp. Technology, Inc.
Jones Pharma, Inc. MiniMed, Inc.
Portal Software, Inc. Royal Caribbean Cruises Ltd.
Redback Networks, Inc. Valassis Communications, Inc.
Vitria Technology, Inc. Xilinx, Inc.
CLASS B, C, H AND Z AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year 5 Year Inception
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class B sharesDiamond +104.64% +30.03% +28.60%+
Class B sharesDiamond Diamond +101.04% +29.91% +28.55%+
Class C SharesDiamond +104.69% +30.05% +28.61%+
Class C SharesDiamond Diamond +103.69% +30.05% +28.61%+
Class H sharesDiamond +104.77% +30.05% +28.62%+
Class H sharesDiamond Diamond +101.17% +29.93% +28.56%+
Class Z shares +106.79% -- +31.80%++
</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, H
and Z) will vary based on the differences in sales loads and
distribution fees paid by shareholders investing in the different
classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% if redeemed within two years of purchase, 3.00%
if redeemed in year three or four, 2.00% if redeemed in year five and
1.00% if redeemed in year six (with a waiver of 10% of the amount
invested). Class C has a CDSC of 1.00% if redeemed within one year of
purchase. Class Z has no sales charge or CDSC.
Diamond Without CDSC.
Diamond Diamond With CDSC. Assumes redemption on February 29,
2000.
+ 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
MEDIUM-SIZED COMPANIES POISED TO BE TOMORROW'S LEADERS
During the six-month period ended February 29, 2000, the Fortis Growth Fund
posted a 84.59% return for Class A shares without adjustment for sales charge,
versus the S&P Mid Cap 400 Index, which posted a return of 18.09%. This index is
the most relevant comparison for the Growth Fund, as the fund's primary
investment focus is mid capitalization stocks, typically those with a market
capitalization between $1 billion and $8 billion.
During the period under review the Fund's outperformance was attributable to its
modest overweight position in technology stocks which significantly
outperformed. The Morgan Stanley High Technology Index posted a 49.5% return in
the fourth quarter vs. a 16.8% return for the S&P Mid Cap 400. During the past 6
months, the fund benefited from holdings such as Siebel Systems +306%, PE
Biosystems +204%, and BEA Systems +954%. The fund currently has a slight
overweight position in technology, where we continue to find new and innovative
companies especially in telecommunications and business-to-business e-commerce.
We currently favor stocks such as SDL. Inc, which supplies optical components
for telecommunication networks and Peregrine Systems, which offers
infrastructure management software. Additionally, we see the recent rebound in
energy prices as a positive catalyst for many of the mid cap energy stocks.
Within energy we favor BJ Services, which is a global oil service company and
Nabors Industries, which is engaged in land drilling for oil and gas. We
continue to maintain a market weighting in health care favoring names such as
Biovail and Medimune. Lastly, we continue to be underweight in consumer cyclical
and financial stocks.
Going forward, we expect steady domestic economic growth, moderate inflation,
and stable interest rates to provide a positive backdrop for U.S. stock prices.
U.S. corporate profits should also see an added benefit from an economic rebound
in Asia. On a relative basis, we believe that mid cap growth stocks are
currently more attractive than their larger cap brethren and we expect the
valuation gap that has developed over the past three years to continue to
narrow. We believe the fund is well positioned going forward.
VALUE OF $10,000 INVESTED MARCH 1, 1990
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 400 MIDCAP*** GROWTH FUND CLASS A
3/1/1990 $10,000 $9,525
<S> <C> <C> <C>
91 $11,402 $12,187
92 $14,711 $16,834
93 $15,617 $16,122
94 $17,966 $19,512
95 $18,261 $17,585
96 $23,583 $23,183
97 $27,581 $25,326
98 $37,647 $31,154
99 $38,443 $32,876
00 $50,340 $67,800
GROWTH FUND
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR
CLASS A* +96.43% +29.71% +20.51%
CLASS AA** +106.23% +30.98% +21.09%
</TABLE>
Annual period ended February 29
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1990, the portfolio had a 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 common stocks that measures the performance of the
mid-range sector of the U.S. stock market.
7
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 2/29/00
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 24.8%
Computer-Software 22.5%
Business Services 11.9%
Electronic-Semiconductor 11.0%
Biomedics, Genetics Research and Development 5.1%
Cash Equivalents/Receivables 2.1%
Computer-Hardware 2.6%
Medical Supplies 3.3%
Electronic -Components 3.5%
Telecommunications 4.1%
Telecommunication Equipment 4.3%
Drugs 4.8%
</TABLE>
TOP 10 HOLDINGS AS OF 2/29/2000
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. ArthoCare Corp. 1.9%
2. Medarex, Inc. 1.7%
3. TranSwitch Corp. 1.6%
4. Micromuse, Inc. 1.6%
5. Mercury Interactive Corp. 1.5%
6. Macrovision Corp. 1.5%
7. TriQuint Semiconductor, Inc. 1.4%
8. Cell Genesys, Inc. 1.3%
9. Silicon Valley Bancshares 1.3%
10. PolyMedica Corp. 1.3%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year 5 Year Inception+
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class B sharesDiamond +219.95% +38.05% +37.03%
Class B sharesDiamond Diamond +216.35% +37.95% +36.98%
Class C sharesDiamond +219.97% +38.05% +37.04%
Class C sharesDiamond Diamond +218.97% +38.05% +37.04%
Class H sharesDiamond +219.92% +38.05% +37.04%
Class H sharesDiamond Diamond +216.32% +37.95% +36.99%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% if redeemed within two years or 3.00% if redeemed in year
three or four, 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 29, 2000.
+ Since November 14, 1994 -- Date shares were first offered to
the public.
FORTIS CAPITAL APPRECIATION PORTFOLIO
OPPORTUNITY THROUGH AMERICA'S ENTREPRENEURS
During the six-month period ended February 29, 2000, the fund significantly
outperformed both the Russell 2000 and the Russell 2000 Growth Indices -- the
widely used benchmarks for small capitalization portfolios. During the period
the fund returned 143.34% for Class A shares without adjustment for sales charge
versus a 35.95% return for the Russell 2000 Index and a 66.04% return for the
Russell 2000 Growth Index.
The outperformance of the fund versus its benchmark is attributable to superior
stock selection, and an overweight position in technology. Examples include
Emulex Corp, a designer, developer and supplier of fiber channel host adapters
and hubs, up 363%, Business Objects, a leading decision support software
company, up 416%, and Applied Micro Circuits, a semiconductor company which
supplies to the telecommunications sector up 490%. The fund also benefited from
an overweight position in healthcare, where Abgenix rose 902%. We continue to
favor technology stocks especially business-to-business e-commerce companies,
and internet infrastructure companies such as Art Technology Group and Micromuse
Inc. In healthcare we favor companies such as Arthrocare Corp, an emerging
orthopedic company and PolyMedica Corp, a leading provider of direct-to-consumer
specialty medical products and services. In addition, the performance of the
portfolio was enhanced by its investment in Initial Public Offerings.
Going forward we expect small cap stocks to perform well, given the superior
revenue and earnings growth rates. However, over the past six months the
valuation disparity between large and small cap stocks has narrowed, and we
therefore do not expect similar absolute performance during the next six months.
We continue to expect moderate economic growth and stable interest rates to
support solid earnings growth for small cap stocks. We are confident the fund is
well positioned going forward.
VALUE OF $10,000 INVESTED MARCH 1, 1990
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
RUSSELL 2000 INDEX*** CAPITAL APPRECIATION PORTFOLIO CLASS A
<S> <C> <C> <C>
3/1/1990 $10,000 $9,525
91 $10,044 $10,336
92 $14,025 $14,410
93 $15,399 $14,045
94 $19,062 $17,665
95 $19,081 $16,958
96 $24,545 $23,363
97 $27,636 $20,635
98 $35,935 $26,161
99 $30,906 $27,120
00 $46,164 $87,247
CAPITAL APPRECIATION PORTFOLIO
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR
CLASS A* + 206.43% + 37.42% + 24.19%
CLASS A** + 221.71% + 38.76% + 24.79%
</TABLE>
Annual period ended February 29
Past performance is not indicative of future performance. Investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1996, the portfolio had a sales
charge of 4.50%, and therefore, these figures do not represent actual
performance that would have been achieved by investing as described
above.
** These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** An unmanaged index of common stocks of the smallest 2000 companies in
the Russell 3000 index, which represents approximately 11% of the
Russell 3000 Index.
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 2/29/2000
ADDITIONS: ELIMINATIONS:
Art Technology Group, Inc. Eagle USA Airfreight, Inc.
Broadbase Software, Inc. Galileo Technology Ltd.
C-COR.net Corp. Harmonic, Inc.
Cell Genesys, Inc. Insight Enterprises, Inc.
FirePond, Inc. MiniMed, Inc.
Medarex, Inc. Packeteer, Inc.
Open Market, Inc. RF Micro Devices, Inc.
Protein Design Labs, Inc. VeriSign, Inc.
Silicon Image, Inc. WinStar Communications, Inc.
Silicon Valley Bancshares Young Broadcasting, Inc.
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO
Schedule of Investments
February 29, 2000 (Unaudited)
COMMON STOCKS-64.49%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS - 0.59%
42,500 Interpublic Group of Companies, Inc. $ 1,050,033 $ 1,707,969
------------ ------------
AUTOMOBILE MANUFACTURERS - 0.32%
12,000 General Motors Corp.......................... 952,608 912,750
------------ ------------
BANKS - 0.60%
22,000 Chase Manhattan Corp......................... 1,893,157 1,751,750
------------ ------------
BEVERAGE - 0.49%
24,000 Seagram Company Ltd.......................... 1,482,568 1,410,000
------------ ------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT - 2.70%
37,500 Amgen, Inc. (with rights) (a)................ 1,663,709 2,557,031
20,000 Genentech, Inc. (a).......................... 1,822,191 3,857,500
7,000 Immunex Corp. (a)............................ 881,443 1,382,062
------------ ------------
4,367,343 7,796,593
------------ ------------
BROADCASTING - 3.12%
41,000 AMFM, Inc. (a)............................... 2,157,220 2,516,375
48,000 AT&T Corp. - Liberty Media Group (a) 1,581,396 2,508,000
20,000 Grupo Televisa S.A. GDR (a).................. 1,350,093 1,536,250
53,000 USA Networks, Inc. (a)....................... 1,074,022 1,189,187
23,000 Viacom, Inc. Class B (a)..................... 679,765 1,282,250
------------ ------------
6,842,496 9,032,062
------------ ------------
BUSINESS SERVICES - 2.52%
5,000 Ariba, Inc. (a).............................. 961,737 1,322,500
27,000 Automatic Data Processing, Inc............... 1,381,626 1,176,187
14,100 CMGI, Inc. (a)............................... 955,451 1,826,831
4,000 Commerce One, Inc. (a)....................... 830,397 835,500
19,100 Equant N.V. NY Shares (a).................... 1,736,362 2,134,425
------------ ------------
5,865,573 7,295,443
------------ ------------
COMPUTER-COMMUNICATION EQUIPMENT - 3.51%
8,000 Broadcom Corp. Class A (a)................... 1,382,300 1,579,000
116,800 Cabletron Systems, Inc. (a).................. 2,081,504 5,723,200
21,500 Cisco Systems, Inc. (a)...................... 723,337 2,842,031
------------ ------------
4,187,141 10,144,231
------------ ------------
COMPUTER-HARDWARE - 1.71%
48,500 Compaq Computer Corp......................... 1,471,175 1,206,437
7,500 Hewlett-Packard Co........................... 958,963 1,008,750
28,600 Sun Microsystems, Inc. (a)................... 1,126,051 2,724,150
------------ ------------
3,556,189 4,939,337
------------ ------------
COMPUTER-SOFTWARE - 6.11%
10,000 BEA Systems, Inc. (a)........................ 1,013,118 1,265,625
41,500 Computer Associates International, Inc....... 2,632,786 2,668,969
18,400 Electronic Data Systems Corp................. 1,263,062 1,191,400
27,000 i2 Technologies, Inc. (a).................... 1,613,023 4,414,500
21,000 Intuit, Inc. (a)............................. 1,358,561 1,102,500
26,000 Legato Systems, Inc. (a)..................... 1,132,960 926,250
31,100 Microsoft Corp. (a).......................... 2,706,247 2,779,562
16,000 Peregrine Systems, Inc. (a).................. 590,909 874,000
17,600 Siebel Systems, Inc. (a)..................... 1,045,784 2,440,900
------------ ------------
13,356,450 17,663,706
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
CONSUMER GOODS - 0.72%
40,000 Colgate-Palmolive Co......................... $ 1,794,663 $ 2,087,500
------------ ------------
DIVERSIFIED COMPANIES - 0.17%
5,500 Minnesota Mining and Manufacturing Co........ 551,242 484,687
------------ ------------
DRUGS - 1.62%
32,000 American Home Products Corp.................. 1,468,412 1,392,000
12,000 Bristol-Myers Squibb Co...................... 824,537 681,750
20,000 Chiron Corp. (a)............................. 1,002,996 1,000,000
19,000 Warner-Lambert Co............................ 1,670,488 1,625,688
------------ ------------
4,966,433 4,699,438
------------ ------------
ELECTRIC-PRODUCTS - 0.28%
19,000 Molex, Inc. Class A.......................... 818,923 805,125
------------ ------------
ELECTRICAL EQUIPMENT - 1.28%
28,000 General Electric Co.......................... 2,927,716 3,701,250
------------ ------------
ELECTRICAL-COMPONENTS AND PARTS - 0.54%
10,000 Analog Devices, Inc. (a)..................... 804,888 1,570,000
------------ ------------
ELECTRONIC-COMMUNICATION SECURITY - 0.39%
4,500 VeriSign, Inc. (a)........................... 953,483 1,138,500
------------ ------------
ELECTRONIC-SEMICONDUCTOR - 5.22%
8,500 Intel Corp................................... 930,062 960,500
13,400 JDS Uniphase Corp. (a)....................... 753,263 3,534,250
17,000 LSI Logic Corp. (a).......................... 898,178 1,089,063
24,000 National Semiconductor Corp. (a)............. 1,327,330 1,803,000
31,000 Texas Instruments, Inc....................... 2,146,292 5,161,500
32,000 Xilinx, Inc. (a)............................. 1,450,912 2,552,000
------------ ------------
7,506,037 15,100,313
------------ ------------
FINANCIAL SERVICES - 1.61%
7,800 American Express Co.......................... 985,457 1,046,663
23,900 Citigroup, Inc............................... 1,216,851 1,235,331
9,000 Marsh & McLennan Companies, Inc. 683,193 696,375
24,000 Morgan Stanley Dean Witter & Co.............. 1,585,889 1,690,500
------------ ------------
4,471,390 4,668,869
------------ ------------
FOOD - 0.23%
20,000 Sysco Corp................................... 710,522 656,250
------------ ------------
HEALTH CARE SERVICES - 0.67%
100,000 Columbia/HCA Healthcare Corp................. 2,621,877 1,931,250
------------ ------------
HOUSEHOLD PRODUCTS - 0.21%
7,000 Procter & Gamble Co.......................... 808,732 616,000
------------ ------------
INSURANCE - 0.31%
10,000 American International Group, Inc............ 499,549 884,375
------------ ------------
LEISURE TIME-AMUSEMENTS - 0.85%
73,700 Walt Disney Co............................... 2,210,372 2,468,950
------------ ------------
MEDIA - 1.44%
44,300 CBS Corp. (a)................................ 1,888,876 2,638,619
23,000 Clear Channel Communications, Inc. (a)....... 1,831,258 1,532,375
------------ ------------
3,720,134 4,170,994
------------ ------------
</TABLE>
9
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 29, 2000 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
MEDICAL TECHNOLOGY - 1.87%
32,400 Medtronic, Inc. (with rights)................ $ 984,616 $ 1,569,375
36,400 PE Corp-PE Biosystems Group.................. 941,970 3,840,200
------------ ------------
1,926,586 5,409,575
------------ ------------
NATURAL GAS TRANSMISSIONS - 1.45%
60,800 Enron Corp................................... 1,725,177 4,195,200
------------ ------------
OIL AND GAS FIELD SERVICES - 0.87%
18,000 BJ Services Co. (a).......................... 890,707 1,027,125
20,000 Schlumberger Ltd............................. 1,326,944 1,477,500
------------ ------------
2,217,651 2,504,625
------------ ------------
OIL-CRUDE PETROLEUM AND GAS - 0.74%
17,000 Exxon Mobil Corp............................. 1,239,126 1,280,313
18,000 Texaco, Inc.................................. 1,147,270 853,875
------------ ------------
2,386,396 2,134,188
------------ ------------
OIL-OFFSHORE DRILLING - 0.14%
13,500 ENSCO International, Inc..................... 388,011 408,375
------------ ------------
OIL-REFINING - 0.63%
25,500 Atlantic Richfield Co........................ 2,187,109 1,810,500
------------ ------------
PRECISION INSTRUMENTS-TEST, RESEARCH - 0.79%
22,000 Agilent Technologies, Inc. (a)............... 853,303 2,281,125
------------ ------------
PUBLISHING - 0.70%
59,000 Reader's Digest Association, Inc.
Class A.................................... 1,732,817 2,028,125
------------ ------------
RETAIL-DEPARTMENT STORES - 0.38%
14,500 Kohl's Corp. (a)............................. 142,038 1,099,281
------------ ------------
RETAIL-DISCOUNT STORES - 0.72%
43,000 Wal-Mart Stores, Inc......................... 1,447,400 2,093,563
------------ ------------
RETAIL-GROCERY - 0.63%
47,000 Safeway, Inc. (a)............................ 1,800,716 1,812,438
------------ ------------
TELECOMMUNICATION EQUIPMENT - 7.98%
40,000 CIENA Corp. (a).............................. 2,302,376 6,392,500
11,000 General Motors Corp. Class H................. 786,721 1,325,500
35,938 Motorola, Inc................................ 2,888,810 6,127,344
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
17,500 Nextel Communications, Inc. (a).............. $ 1,032,750 $ 2,385,469
12,500 Nokia Corp. ADR.............................. 1,105,756 2,478,906
13,900 Nortel Networks Corp......................... 747,710 1,549,850
10,000 QUALCOMM, Inc. (a)........................... 964,860 1,424,375
10,000 RF Micro Devices, Inc. (a)................... 1,018,890 1,383,125
------------ ------------
10,847,873 23,067,069
------------ ------------
TELECOMMUNICATIONS - 5.23%
52,500 BroadWing, Inc. (a).......................... 1,493,595 1,558,594
21,000 Cable & Wireless plc ADR..................... 851,401 1,357,125
17,800 Corning, Inc................................. 1,856,338 3,346,400
48,000 Global Crossing Ltd. (a)..................... 899,450 2,238,000
250 Highwaymaster Communications, Inc.
(Warrants) (a) (e)......................... 4,547 3,750
7,200 Level 3 Communications, Inc. (a)............. 473,941 819,900
10,000 SAVVIS Communications Corp. (a).............. 240,000 200,000
21,300 Sonera Oyj Corp. ADR (a)..................... 566,889 1,672,050
37,500 Vodafone AirTouch plc ADR.................... 1,024,462 2,163,281
13,300 VoiceStream Wireless Corp. (a)............... 656,620 1,769,731
------------ ------------
8,067,243 15,128,831
------------ ------------
TELEPHONE SERVICES - 2.91%
13,000 Alltel Corp.................................. 931,812 754,000
34,500 AT&T Corp.................................... 1,912,289 1,705,594
46,300 Bell Atlantic Corp........................... 2,902,305 2,265,806
4,200 NEXTLINK Communications, Inc. (a) 429,104 462,788
15,134 SBC Communications, Inc...................... 867,383 575,092
10,000 Telefonica S.A. ADR.......................... 905,406 866,875
27,000 Telefonos de Mexico S.A. ADR Class L 1,753,468 1,775,250
------------ ------------
9,701,767 8,405,405
------------ ------------
TOYS - 0.13%
40,000 Mattel, Inc.................................. 491,608 385,000
------------ ------------
UTILITIES-ELECTRIC - 2.11%
40,000 AES Corp. (a)................................ 1,939,001 3,352,500
58,400 Dynegy, Inc. Class A......................... 1,945,380 2,737,500
------------ ------------
3,884,381 6,090,000
------------ ------------
TOTAL COMMON STOCKS.......................... $128,719,595 $186,490,642
============ ============
</TABLE>
ASSET BACKED SECURITIES-3.38%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
---------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
CAPTIVE RETAIL FINANCE - 0.67%
$2,000,000 Sears Credit Account Master Trust, 6.40% Ser
1997-1 Class B 7-16-2007................... A $ 1,941,457 $ 1,943,980
------------ ------------
COMMERCIAL LOANS - 0.98%
360,669 Merrill Lynch Mortgage Investors, Inc., 6.77%
Variable Rate Ser 1995-C3 Class A1
12-26-2025................................. AAA 363,713 355,952
700,000 Midland Realty Acceptance Corp., 7.73%
Variable Rate Ser 1996-C1 Class B
8-25-2028.................................. AA 706,798 696,045
1,750,000 Mortgage Capital Funding, Inc., 7.90% Ser
1996-MC1 Class B 2-15-2006................. AA+ 1,762,712 1,766,450
------------ ------------
2,833,223 2,818,447
------------ ------------
FINANCIAL SERVICES - 0.54%
1,500,000 Standard Credit Card Master Trust, 8.45% Ser
1995-1 Class B 1-7-2007.................... A 1,585,981 1,546,467
------------ ------------
</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>
HOUSING - 0.42%
$ 750,000 Money Store Home Improvement Trust, 7.41% Ser
1997-1 Class M1 5-15-2017.................. AA $ 752,848 $ 742,778
500,000 Money Store Residential Trust, 7.085% Ser
1997-I Class M1 7-15-2016.................. AA 499,927 482,245
------------ ------------
1,252,775 1,225,023
------------ ------------
MULTI-FAMILY LOANS - 0.53%
275,000 Bear Stearns Commercial Mortgage
Securities Inc., 7.78% Series 2000-WF1
Class A2 2-15-2010......................... AAA** 276,222 278,146
1,000,000 DLJ Mortgage Acceptance Corp., 8.80%
Multifamily Mtg Pass Thru Certificate Ser
1993-MF12 Class B1 9-18-2003............... NR 982,500 1,000,960
299,972 Fund America Structured Transactions, L.P.,
Collateralized Note, 8.76% Ser 1996-1
Class A Principal Only
10-25-2030 (f)(h).......................... NR 217,003 247,899
------------ ------------
1,475,725 1,527,005
------------ ------------
WHOLE LOAN RESIDENTIAL - 0.24%
749,329 Mid-State Trust, 7.54% Ser 6 Class A3
7-1-2035................................... AA 748,867 704,916
------------ ------------
TOTAL ASSET BACKED SECURITIES................ $ 9,838,028 $ 9,765,838
============ ============
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-15.75%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
---------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
AEROSPACE AND EQUIPMENT - 0.28%
$ 500,000 Lockheed Martin Corp., 7.65% Deb 5-1-2016.... BBB- $ 502,681 $ 461,043
400,000 Raytheon Co., 7.20% Deb 8-15-2027............ BBB- 352,591 348,040
------------ ------------
855,272 809,083
------------ ------------
AGRICULTURE - 0.07%
250,000 Archer-Daniels-Midland, 6.625% Deb
5-1-2029................................... A+ 248,811 212,316
------------ ------------
AIRLINES - 0.16%
250,000 Delta Air Lines, Inc., 6.65% Medium Term Note
3-15-2004.................................. BBB- 249,843 235,289
250,000 Delta Air Lines, Inc., 7.70% Note
12-15-2005 (f)............................. BBB- 249,436 240,750
------------ ------------
499,279 476,039
------------ ------------
AUTOMOBILE AND MOTOR VEHICLE PARTS - 0.33%
500,000 Dana Corp., 7.00% Note 3-1-2029.............. BBB+ 494,102 449,475
500,000 TRW, Inc., 6.50% Sr Note 6-1-2002............ BBB 495,863 489,589
------------ ------------
989,965 939,064
------------ ------------
AUTOMOBILE MANUFACTURERS - 0.49%
1,000,000 Daimler Chrysler N. A. Holdings, 7.40% Note
1-20-2005.................................. A+ 999,274 995,281
500,000 Ford Motor Co., 6.375% Deb 2-1-2029.......... A+ 464,323 412,921
------------ ------------
1,463,597 1,408,202
------------ ------------
BANKS - 1.77%
500,000 Bank Austria AG, 7.25% Sub Note
2-15-2017 (f).............................. AA+ 499,123 470,832
500,000 BankAmerica Corp., 6.20% Sub Note
2-15-2006.................................. A 475,759 462,232
500,000 Citigroup, Inc., 6.20% Sr Note 3-15-2009..... AA- 498,594 451,595
500,000 Keycorp Capital II, 6.875% Bond 3-17-2029.... BBB 493,812 415,852
250,000 LB Baden-Wuerttemberg, 7.625% Yankee Sub Note
2-1-2023................................... AAA 281,785 247,017
500,000 Mellon Financial Co., 6.375% Sub Note
2-15-2010.................................. A 501,954 449,173
500,000 National City Corp., 6.875% Sub Note
5-15-2019.................................. A- 499,137 439,306
500,000 NBD Bancorp, 7.125% Sub Note 5-15-2007....... A- 494,701 473,640
500,000 Providian National Bank, 6.75% Sr Note
3-15-2002.................................. BBB- 499,770 486,777
500,000 St. Paul Bancorp, Inc., 7.125% Sr Note
2-15-2004.................................. Baa1* 498,554 480,130
250,000 Swiss Bank Corp. New York, 7.375% Sub Note
6-15-2017.................................. AA 262,372 240,314
</TABLE>
11
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 29, 2000 (Unaudited)
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
---------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
$ 500,000 Textron Financial Corp., 7.125% Note
12-9-2004.................................. A- $ 497,576 $ 489,308
------------ ------------
5,503,137 5,106,176
------------ ------------
BEVERAGE - 0.31%
500,000 Coca-Cola Bottling Co., 6.375% Deb
5-1-2009................................... BBB 496,933 449,982
500,000 Pepsi Bottling Group, Inc., 7.00% Sr Note
3-1-2029................................... A- 496,635 446,887
------------ ------------
993,568 896,869
------------ ------------
BROKERAGE AND INVESTMENT - 0.74%
500,000 Bear Stearns Capital Trust, 7.00% Variable
Rate Note 1-15-2027........................ BBB 499,719 487,948
250,000 Goldman Sachs Group, Inc., 6.50% Medium Term
Note 2-25-2009 (e)......................... A+ 250,000 228,214
500,000 Goldman Sachs Group, Inc., 6.65% Note
5-15-2009.................................. A+ 499,052 457,151
500,000 Lehman Brothers Holdings, 7.875% Note
11-1-2009.................................. A 510,854 488,614
500,000 Paine Webber Group, Inc., 7.625% Note
12-1-2009.................................. BBB+ 498,235 478,929
------------ ------------
2,257,860 2,140,856
------------ ------------
CABLE TELEVISION - 0.57%
250,000 Comcast Cable Communications, 8.375% Note
5-1-2007................................... BBB 279,622 257,731
500,000 Cox Communications, Inc., 6.40% Note
8-1-2008................................... BBB+ 511,356 455,835
500,000 Time Warner, Inc., 6.875% Sr Deb 6-15-2018... BBB 506,396 444,142
500,000 Viacom, Inc., 7.625% Sr Deb 1-15-2016........ BBB- 541,993 483,297
------------ ------------
1,839,367 1,641,005
------------ ------------
CAPTIVE AUTO FINANCE - 0.24%
500,000 General Motors Acceptance Corp., 6.15% Bond
4-5-2007................................... A 498,466 453,581
250,000 Toyota Motor Credit, 5.625% Global Note
11-13-2003................................. AAA 249,688 235,674
------------ ------------
748,154 689,255
------------ ------------
CHEMICALS - 0.26%
250,000 Equistar Chemicals, L.P., 8.75% Sr Note
2-15-2009.................................. BBB- 261,768 247,423
500,000 Rohm & Haas Co., 7.85% Deb 07-15-2029........ A- 493,002 499,679
------------ ------------
754,770 747,102
------------ ------------
CONSUMER FINANCE - 0.49%
500,000 Aristar, Inc., 7.25% Sr Note 6-15-2006....... A- 498,203 480,123
1,000,000 Household Finance Corp., 6.00% Note
5-1-2004................................... A 999,812 941,805
------------ ------------
1,498,015 1,421,928
------------ ------------
CONSUMER GOODS - 0.58%
1,750,000 Proctor & Gamble Co., 6.875% Global Bond
9-15-2009.................................. AA 1,752,357 1,683,006
------------ ------------
DIVERSIFIED FINANCE - 0.34%
500,000 Finova Capital Corp., 7.625% Sr Note
9-21-2009.................................. A- 496,830 486,113
500,000 General Electric Capital Corp., 7.375% Medium
Term Note 1-19-2010........................ AAA 496,304 495,950
------------ ------------
993,134 982,063
------------ ------------
ENERGY - 0.16%
500,000 NGC Corp. Capital Trust, 8.316% Sub Deb
6-1-2027................................... BBB- 500,000 449,801
------------ ------------
ENERGY & RELATED - 0.08%
250,000 Liberty Media Group, 8.25% Note
2-1-2030 (f)............................... BBB- 247,999 244,596
------------ ------------
FOOD - 0.57%
750,000 Ahold Finance USA, Inc., 6.25% Sr Deb
5-1-2009................................... A 744,230 667,753
500,000 Fred Meyer, Inc., 7.45% Sub Note 3-1-2008.... BBB- 529,210 482,741
500,000 Kroger Co., 8.15% Sr Note 7-15-2006.......... BBB- 510,374 501,940
------------ ------------
1,783,814 1,652,434
------------ ------------
FOOD SERVICE - 0.08%
250,000 Sysco Corp., 6.50% Deb 8-1-2028.............. AA- 251,236 216,070
------------ ------------
</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>
FOREIGN - GOVERNMENT - 0.57%
$ 250,000 British Columbia (Province of), 6.50% Yankee
Bond 1-15-2026............................. AA- $ 255,793 $ 218,222
250,000 Korea (Republic of), 8.875% Global Bond
4-15-2008.................................. BBB 262,695 260,270
500,000 Ontario (Province of), 5.50% Sr Global Bond
10-1-2008.................................. AA- 497,367 437,920
500,000 Ontario (Province of), 7.375% Sr Global Bond
1-27-2003.................................. AA- 527,001 500,885
250,000 Poland (Republic of), 7.125% Yankee Note
7-1-2004................................... BBB 249,139 243,750
------------ ------------
1,791,995 1,661,047
------------ ------------
FOREIGN - GOVERNMENT AGENCIES - 0.08%
250,000 Korea Development Bank, 7.125% Global Note
4-22-2004.................................. BBB 248,443 241,541
------------ ------------
FOREST PRODUCTS - 0.38%
500,000 Fort James Corp., 6.50% Sr Note 9-15-2002.... BBB- 499,664 487,574
600,000 Georgia-Pacific Corp., 9.625% Deb
3-15-2022.................................. BBB- 616,932 624,937
------------ ------------
1,116,596 1,112,511
------------ ------------
INDUSTRIAL - 0.22%
750,000 Tyco International Group S.A., 6.875% Yankee
Bond 1-15-2029............................. A- 756,669 635,857
------------ ------------
INSURANCE - 0.74%
250,000 American General Corp., 6.625% Sr Note
2-15-2029.................................. AA- 238,400 211,730
250,000 Conseco, Inc., 8.75% Note 2-09-2004.......... BBB+ 249,867 251,794
500,000 Prudential Insurance Co., 6.375% Sr Note
7-23-2006 (e).............................. A+ 498,145 458,264
500,000 ReliaStar Financial Corp., 6.625% Note
9-15-2003.................................. A 512,996 479,514
750,000 ReliaStar Financial Corp., 8.00% Note
10-30-2006................................. A 747,408 746,183
------------ ------------
2,246,816 2,147,485
------------ ------------
LEASING - 0.33%
500,000 Comdisco, Inc., 5.95% Note 4-30-2002......... BBB+ 499,963 482,368
500,000 Ryder System, Inc., 6.60% Note 11-15-2005.... BBB+ 499,856 463,093
------------ ------------
999,819 945,461
------------ ------------
LEISURE TIME-AMUSEMENTS - 0.17%
500,000 Park Place Entertainment, 8.50% Sr Note
11-15-2006................................. BBB- 495,248 478,689
------------ ------------
MACHINERY - 0.25%
750,000 Caterpillar, Inc., 7.25% Deb 9-15-2009....... A+ 748,627 729,722
------------ ------------
MISCELLANEOUS - 0.19%
100,000 New York (City of), 10.00% General Obligation
Taxable Bond Ser D 8-1-2005................ A- 96,186 106,493
400,000 New York (City of), 10.00% General Obligation
Taxable Bond Ser D 8-1-2005
(Prerefunded 8-1-2001 @ 103)............... A- 400,951 427,718
------------ ------------
497,137 534,211
------------ ------------
NATURAL GAS TRANSMISSIONS - 0.55%
500,000 CMS Panhandle Holding Co., 7.00% Sr Note
7-15-2029.................................. BBB- 495,765 436,275
250,000 Enron Corp., 6.95% Note 7-15-2028............ BBB+ 225,943 218,205
750,000 Tennessee Gas Pipeline, 7.50% Deb 4-1-2017... BBB+ 738,863 720,147
250,000 Trans-Canada Pipelines Ltd., 6.49% Yankee
Bond 1-21-2009............................. A- 251,650 225,410
------------ ------------
1,712,221 1,600,037
------------ ------------
OIL-CRUDE PETROLEUM AND GAS - 0.41%
250,000 Apache Finance Canada, 7.75% Sr Deb
12-15-2029................................. BBB+ 247,447 238,283
500,000 Chevron Corp., 6.625% Note 10-1-2004......... AA 498,286 487,691
500,000 Conoco, Inc., 6.95% Sr Note 4-15-2029........ A- 467,114 449,201
------------ ------------
1,212,847 1,175,175
------------ ------------
OIL-EQUIPMENT WELLS AND SERVICES - 0.16%
500,000 Petroleum Geo-Services, 6.25% Yankee Bond
11-19-2003................................. BBB 498,306 473,371
------------ ------------
OIL-REFINING - 0.18%
500,000 Texaco Capital, Inc., 8.625% Deb 6-30-2010... A+ 551,298 530,466
------------ ------------
</TABLE>
13
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 29, 2000 (Unaudited)
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
---------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
RETAIL-DEPARTMENT STORES - 0.60%
$1,000,000 Dayton Hudson Corp., 5.875% Note 11-1-2008... A- $ 973,239 $ 883,219
500,000 Federated Department Stores, 6.30% Note
4-1-2009................................... BBB+ 498,731 449,188
500,000 Saks, Inc., 7.375% Sub Deb 2-15-2019......... Baa3* 457,834 411,942
------------ ------------
1,929,804 1,744,349
------------ ------------
SUPRA-NATIONAL - 0.60%
750,000 Corp Andina de Fomento, 7.10% Yankee Bond
2-1-2003................................... A 749,764 731,944
500,000 Inter-American Development Bank, 7.375% Bond
1-15-2010.................................. AAA 498,113 504,079
500,000 International Bank for Reconstruction &
Development, 7.00% Global Bond 1-27-2005... AAA 497,510 496,640
------------ ------------
1,745,387 1,732,663
------------ ------------
TECHNOLOGY - 0.15%
500,000 Lucent Technologies, Inc., 6.45% Deb
3-15-2029.................................. A 497,334 433,045
------------ ------------
TELECOMMUNICATIONS - 1.14%
500,000 360 Communications ALLTEL Corp., 7.50% Sr
Note 3-1-2006.............................. A 499,207 499,163
250,000 AirTouch Communications, 6.65% Note
5-1-2008................................... A 253,926 232,615
500,000 ALLTEL Corp., 6.80% Deb 5-1-2029............. A- 496,918 429,917
750,000 AT&T Corp., 6.00% Note 3-15-2009............. AA- 748,362 669,800
500,000 Sprint Capital Corp., 5.875% Deb 5-1-2004.... BBB+ 497,875 470,280
750,000 US West Communications, 7.20% Bond
11-1-2004 (f).............................. A 749,632 738,557
250,000 Vodafone Airtouch plc, 7.875% Deb
2-15-2030 (e).............................. A 246,741 246,858
------------ ------------
3,492,661 3,287,190
------------ ------------
TELEPHONE SERVICES - 0.41%
500,000 Century Telephone Enterprises, Inc., 6.15% Sr
Note 1-15-2005............................. BBB+ 499,438 463,245
500,000 GTE Corp., 7.51% Note 4-1-2009............... A 496,621 491,390
250,000 Telecomunicaciones de Puerto Rico, 6.65% Sub
Note 5-15-2006............................. BBB 249,916 236,366
------------ ------------
1,245,975 1,191,001
------------ ------------
UTILITIES-ELECTRIC - 1.10%
500,000 Alabama Power Co., 7.125% Sr Note
10-1-2007.................................. A 498,299 489,081
500,000 Detroit Edison Co., 7.50% Note 2-1-2005...... A- 499,218 498,762
250,000 Duke Capital Corp., 8.00% Sr Note
10-1-2019.................................. A 253,363 251,885
500,000 Duke Energy Corp., 6.00% Sr Note 12-1-2028... A+ 488,235 395,048
500,000 Madison Gas & Electric, 6.02% Sr Note
9-15-2008.................................. AA- 500,000 443,875
378,049 Niagara Mohawk Power, 7.25% Sr Note
10-1-2002.................................. BBB- 376,656 370,926
750,000 TXU Electric Capital V, 8.175% Deb
1-30-2037.................................. BBB- 750,000 720,770
------------ ------------
3,365,771 3,170,347
------------ ------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE..... $ 48,333,289 $ 45,540,033
============ ============
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-7.20%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
---------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
AUTOMOBILE AND MOTOR VEHICLE PARTS - 0.26%
$ 500,000 Holley Performance Products, Inc., 12.25% Sr
Note 9-15-2007 (f)......................... B+ $ 482,341 $ 485,000
250,000 Tenneco Automotive, Inc., 11.625% Sr Sub Note
10-15-2009 (f)............................. B+ 250,000 254,062
------------ ------------
732,341 739,062
------------ ------------
BROADCASTING - 0.25%
500,000 Sinclair Broadcasting Group, Inc., 10.00% Sr
Sub Note 9-30-2005......................... B 500,000 483,125
250,000 Spanish Broadcasting Systems, 9.625% Sr Sub
Note 11-1-2009............................. B- 245,346 245,625
------------ ------------
745,346 728,750
------------ ------------
</TABLE>
14
<PAGE>
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
---------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
BUILDING EQUIPMENT - 0.17%
$ 500,000 Better Minerals & Aggregates, 13.00% Sr Sub
Note 9-15-2009 (f)......................... B- $ 500,000 $ 500,000
------------ ------------
CABLE TELEVISION - 1.08%
500,000 Adelphia Communications, 9.375% Sr Note
11-15-2009................................. B+ 496,091 478,750
504,088 Australis Media Ltd., 14.00% Sr Sub Disc Note
5-15-2003 (Zero coupon through 5-15-2000,
thereafter 15.75%) (with
warrants) (a) (e)(g)....................... D 401,365 5
750,000 Charter Communications Holdings LLC, 9.92% Sr
Disc Note 4-1-2011 (Zero coupon through
4-1-2004, thereafter 9.92%) (g)............ B+ 508,532 431,250
500,000 CSC Holdings, Inc., 10.50% Sr Sub Deb
5-15-2016.................................. BB- 507,028 543,125
200,000 Insight Midwest, 9.75% Sr Note
10-1-2009 (f).............................. B+ 200,000 202,000
500,000 Mediacom LLC/Capital Corp., 7.875% Sr Note
2-15-2011.................................. B+ 493,338 431,250
750,000 United International Holdings, 12.42% Sr Disc
Note 2-15-2008 (Zero coupon through
2-15-2003, thereafter 10.75%) (g).......... B- 499,834 530,625
500,000 United Pan-Europe Communications, 11.25% Sr
Note 11-1-2009 (f)......................... B 496,380 499,375
------------ ------------
3,602,568 3,116,380
------------ ------------
CHEMICALS - 0.16%
500,000 Lyondell Chemical Co., 9.875% Secured Note
Ser B 5 -1-2007............................ BB 500,000 477,500
------------ ------------
ENTERTAINMENT - 0.30%
500,000 Circus Circus (Mandalay Resort Group), 7.625%
Sr Sub Deb 7-15-2013....................... BB+ 430,796 410,000
250,000 Isle of Capri Casinos, 8.75% Sub Note
4-15-2009.................................. B 223,914 221,562
250,000 Station Casinos, 8.875% Sr Sub Note
12-1-2008.................................. B+ 234,421 234,375
------------ ------------
889,131 865,937
------------ ------------
FOREIGN - GOVERNMENT - 0.28%
400,000 Brazil (Republic of), 11.625% Global Bond
4-15-2004.................................. B+ 396,768 396,000
500,000 United Mexican States, 6.25% Secured Note Ser
W-B 12-31-2019............................. BB 379,909 406,250
------------ ------------
776,677 802,250
------------ ------------
HEALTH CARE SERVICES - 0.12%
250,000 Triad Hospitals Holdings, 11.00% Sr Sub Note
5-15 -2009................................. B- 251,493 256,875
100,000 Unilab Finance Corp., 12.75% Sr Sub Note
10-1-2009.................................. B- 97,329 101,500
------------ ------------
348,822 358,375
------------ ------------
METALS-MINING AND MISCELLANEOUS - 0.08%
250,000 AK Steel Corp., 9.125% Sr Note 12-15-2006.... BB 249,395 245,000
------------ ------------
OIL-CRUDE PETROLEUM AND GAS - 0.17%
250,000 Ocean Energy, Inc., 8.875% Sr Sub Note Ser B
7-15-2007.................................. BB- 253,334 245,625
250,000 Swift Energy Co., 10.25% Sr Sub Note
8-1-2009................................... B- 250,855 243,750
------------ ------------
504,189 489,375
------------ ------------
PAPER - 0.17%
500,000 Packaging Corp. of America, 9.625% Sr Sub
Note 4-1-2009.............................. B 512,627 500,000
------------ ------------
RESTAURANTS AND FRANCHISING - 0.18%
500,000 Sbarro, Inc., 11.00% Sr Note
9-15-2009 (f).............................. BB- 493,712 508,750
------------ ------------
RETAIL-DISCOUNT STORES - 0.16%
500,000 Kmart Corp., 7.95% Deb 2-1-2023.............. BB+ 438,354 449,100
------------ ------------
RETAIL-GROCERY - 0.09%
250,000 Stater Brothers Holdings, 10.75% Sr Note
8-15-2006.................................. B+ 250,000 250,625
------------ ------------
TECHNOLOGY - 0.26%
500,000 Fairchild Semiconductor, 10.375% Sr Sub Note
10-1-2007.................................. B 507,994 495,000
250,000 Globix Corp., 12.50% Sr Note 2-1-2010 (e).... NR 251,868 248,750
------------ ------------
759,862 743,750
------------ ------------
TELECOMMUNICATIONS - 1.98%
500,000 Global Crossing Holdings Ltd., 9.50% Sr Note
11-15-2009 (f)............................. BB 488,815 483,750
500,000 Hyperion Telecommunications, 12.25% Sr Note
Ser B 9-1-2004............................. BB- 535,816 532,500
</TABLE>
15
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 29, 2000 (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 Intermedia Communications, Inc., 8.50% Sr
Note Ser B 1-15-2008....................... B $ 473,414 $ 460,000
250,000 McLeodUSA, Inc., 8.125% Sr Note 2-15-2009.... B+ 248,254 223,750
250,000 Metromedia Fiber Network, Inc., 10.00% Sr
Note 12-15-2009............................ B+ 248,036 246,250
500,000 Nextel Communications, Inc., 9.375% Sr Note
11-15-2009 (e)............................. NR 496,084 481,875
750,000 Nextlink Communications, 10.50% Sr Note
12-1-2009 (f).............................. B 750,000 738,750
500,000 Nextlink Communications, 12.125% Sr Disc Note
12-1-2009 (Zero coupon through 12-1-2004,
thereafter 12.125%) (f)(g)................. B 286,258 281,250
250,000 Nuevo Crupo Iusacell S.A. de C.V., 14.25% Sr
Note 12-1-2006 (e)......................... B+ 260,462 274,375
500,000 Psinet, Inc., 11.00% Sr Note 8-1-2009........ B- 490,265 501,250
250,000 RCN Corp., 10.125% Sr Note 1-15-2010......... B- 250,000 232,500
250,000 Rhythms Netconnections, 14.00% Sr Note
2-15-2010 (e).............................. CCC+ 250,000 246,875
500,000 Splitrock Services, Inc., 11.75% Sr Sub Note
Ser B 7-15-2008............................ NR 503,441 532,500
500,000 Winstar Communications, Inc., 11.15% Sr Disc
Note 10-15-2005 (Zero coupon through
10-15-2000, thereafter 14.00%) (g)......... CCC+ 503,945 505,000
------------ ------------
5,784,790 5,740,625
------------ ------------
TELEPHONE SERVICES - 1.06%
500,000 Alaska Communications SY, 9.375% Sr Sub Note
5-15-2009.................................. B+ 500,000 466,250
750,000 Impsat Fiber Networks, 13.75% Sr Note
2-15-2005 (e).............................. B 750,000 758,438
250,000 Level 3 Communications, 12.875% Sr Disc Note
3-15-2010 (Zero coupon through 3-15-2005,
thereafter 12.875%) (e)(g)................. B 133,293 133,125
750,000 Level 3 Communications, Inc., 9.125% Sr Note
5-1-2008................................... B 727,682 678,750
1,000,000 Williams Communications Group, Inc., 10.875%
Sr Note 10-1-2009.......................... BB- 992,662 1,020,000
------------ ------------
3,103,637 3,056,563
------------ ------------
UTILITIES-ELECTRIC - 0.17%
500,000 AES Corp., 9.50% Sr Note 6-1-2009............ BB 502,149 495,000
------------ ------------
UTILITIES-TELEPHONE - 0.17%
500,000 Madison River Communicatons, 13.25% Sr Note
3-1-2010 (e)............................... CCC+ 493,167 490,000
------------ ------------
UTILITIES-WATER AND SEWER - 0.09%
250,000 Azurix Corp., 10.75% Sr Note
2-15-2010 (e).............................. BB 250,935 251,250
------------ ------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... $ 21,437,702 $ 20,808,292
============ ============
</TABLE>
U.S. GOVERNMENT SECURITIES-7.29%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
---------- ------------ ------------
<C> <S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.81%
MORTGAGE BACKED SECURITIES:
$2,995,994 6.00% 2013-2014.............................. $ 2,899,837 $ 2,811,857
271,972 6.30% 2008................................... 272,281 255,068
2,987,333 6.50% 2015................................... 2,930,390 2,870,290
1,434,296 6.63% 2005................................... 1,467,927 1,381,423
253,028 7.50% 2027................................... 259,858 248,161
448,365 8.00% 2025................................... 455,160 449,240
92,217 9.00% 2016-2021.............................. 90,668 95,451
------------ ------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 8,376,121 8,111,490
------------ ------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -
0.34%
MORTGAGE BACKED SECURITIES:
937,335 9.00% 2023................................... 967,799 974,078
16,119 9.50% 2019................................... 15,988 16,966
------------ ------------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION................................ 983,787 991,044
------------ ------------
</TABLE>
16
<PAGE>
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
---------- ------------ ------------
<C> <S> <C> <C>
U.S. TREASURY SECURITIES - 4.14%
BONDS:
$ 500,000 5.25% 2029................................... $ 412,193 $ 431,250
9,500,000 6.40% 2021 Zero Coupon Strip(g).............. 2,421,233 2,471,700
8,250,000 7.00% 2019 Zero Coupon Strip(g).............. 2,239,612 2,508,074
2,000,000 10.375% 2012................................. 2,424,737 2,418,750
------------ ------------
7,497,775 7,829,774
------------ ------------
NOTES:
800,000 4.75% 2008................................... 696,940 702,750
3,550,000 5.875% 2004.................................. 3,487,119 3,446,830
------------ ------------
4,184,059 4,149,580
------------ ------------
TOTAL U.S. TREASURY SECURITIES............... 11,681,834 11,979,354
------------ ------------
TOTAL U.S. GOVERNMENT SECURITIES............. 21,041,742 21,081,888
============ ============
TOTAL LONG-TERM INVESTMENTS.................. $229,370,356 $283,686,693
============ ============
</TABLE>
SHORT-TERM INVESTMENTS-1.15%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
---------- ------------
<C> <S> <C>
BANKS - 0.00%
$ 7,234 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate - 5.70%......... $ 7,234
------------
DIVERSIFIED FINANCE - 0.98%
2,826,000 Norwest Bank Associates Corp., Master
Variable Rate Note, Current rate - 5.67%... 2,826,000
------------
INVESTMENT COMPANY - 0.17%
485,172 Wells Fargo Cash Investment Money Market
Fund, Current rate - 5.69%................. 485,172
------------
TOTAL SHORT-TERM INVESTMENTS................. 3,318,406
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$232,688,762)(B)........................... $287,005,099
============
</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 29, 2000, the cost of securities for federal income tax
purposes was $232,742,706 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $64,009,261
Unrealized depreciation..................................... (9,746,868)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $54,262,393
- -------------------------------------------------------------------------
</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 7.72% of total net assets as of February 29, 2000.
17
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 29, 2000 (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 2003 $ 401,365
2000 250,000 Azurix Corp. due 2010 - 144A 250,935
2000 250,000 Globix Corp. due 2010 - 144A 251,868
1999 250,000 Goldman Sachs Group due 2009 - 144A 250,000
1998 250 Highwaymaster Communications, Inc. (Warrants) - 144A 4,547
2000 750,000 Impsat Fiber Networks due 2005 - 144A 750,000
2000 250,000 Level 3 Communications due 2010 - 144A 133,293
2000 500,000 Madison River Communications due 2010 - 144A 493,167
1999 500,000 Nextel Communications due 2009 - 144A 496,084
2000 250,000 Nuevo Crupo Iusacell S.A. de C.V. due 2006 - 144A 260,462
1999 500,000 Prudential Insurance Co. due 2006 - 144A 498,145
2000 250,000 Rhythms Netconnections due 2010 - 144A 250,000
2000 250,000 Vodaphone Airtouch plc due 2030 - 144A 246,741
</TABLE>
The aggregate value of these securities at February 29, 2000, was
$3,821,779, which represents 1.32% 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 29, 2000, was $5,895,571, which represents
2.04% 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 29, 2000, 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 29, 2000, was $247,899, which represents .09% of
total net assets.
* Moodys Rating
** Duff & Phelps Rating
18
<PAGE>
FORTIS STOCK FUNDS
VALUE FUND
Schedule of Investments
February 29, 2000 (Unaudited)
COMMON STOCKS-98.32%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ----------- -----------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-1.48%
20,000 Boeing Co.................................... $ 908,266 $ 737,500
----------- -----------
APPAREL - 1.54%
34,000 Jones Apparel Group, Inc. (a)................ 937,540 769,250
----------- -----------
AUTOMOBILE MANUFACTURERS - 1.30%
15,500 Ford Motor Co................................ 896,872 645,187
----------- -----------
BANKS - 7.85%
25,400 Chase Manhattan Corp......................... 1,844,186 2,022,475
38,000 PNC Bank Corp................................ 1,666,144 1,470,125
19,000 Washington Mutual, Inc....................... 486,273 420,375
----------- -----------
3,996,603 3,912,975
----------- -----------
BROADCASTING - 1.78%
17,000 AT&T Corp. - Liberty Media Group (a)......... 776,443 888,250
----------- -----------
BUSINESS SERVICES - 5.79%
15,000 Cendant Corp. (a)............................ 274,828 267,187
32,800 First Data Corp.............................. 1,510,295 1,476,000
60,000 Sensormatic Electronics Corp. (a)............ 773,048 1,140,000
----------- -----------
2,558,171 2,883,187
----------- -----------
CHEMICALS - 1.96%
9,000 Dow Chemical Co.............................. 1,090,760 976,500
----------- -----------
COMPUTER-HARDWARE - 4.83%
9,500 Apple Computer, Inc. (a)..................... 553,467 1,088,937
9,800 Hewlett-Packard Co........................... 519,875 1,318,100
----------- -----------
1,073,342 2,407,037
----------- -----------
COMPUTER-SOFTWARE - 4.12%
39,500 Affiliated Computer Services, Inc. (a)....... 1,467,725 1,244,250
5,500 Computer Associates International, Inc....... 269,041 353,719
7,000 Electronic Data Systems Corp................. 464,775 453,250
----------- -----------
2,201,541 2,051,219
----------- -----------
CONSTRUCTION - 1.30%
22,800 Fluor Corp................................... 934,126 648,375
----------- -----------
CONSUMER GOODS - 1.56%
15,000 Kimberly-Clark Corp.......................... 969,862 775,312
----------- -----------
FINANCIAL SERVICES - 12.82%
46,125 Citigroup, Inc............................... 1,718,054 2,384,086
30,000 Fannie Mae................................... 1,586,211 1,590,000
14,000 Household International, Inc................. 495,155 447,125
12,000 J.P. Morgan & Co., Inc....................... 1,576,098 1,332,000
9,000 Morgan Stanley Dean Witter & Co.............. 423,176 633,937
----------- -----------
5,798,694 6,387,148
----------- -----------
HEALTH CARE SERVICES - 7.74%
49,000 Columbia/HCA Healthcare Corp................. 1,057,888 946,312
70,000 Tenet Healthcare Corp. (a)................... 1,385,122 1,225,000
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ----------- -----------
<C> <S> <C> <C>
33,000 United HealthCare Corp....................... $ 1,835,918 $ 1,687,125
----------- -----------
4,278,928 3,858,437
----------- -----------
INSURANCE - 5.28%
11,375 American International Group, Inc............ 1,111,742 1,005,977
22,000 CIGNA Corp................................... 1,728,737 1,623,875
----------- -----------
2,840,479 2,629,852
----------- -----------
MACHINERY - 1.93%
25,000 Dover Corp................................... 980,108 964,063
----------- -----------
MACHINERY-SPECIALTY - 1.93%
26,500 Parker-Hannifin Corp......................... 1,221,736 960,625
----------- -----------
METALS-MINING AND MISCELLANEOUS - 1.92%
14,000 Alcoa, Inc................................... 871,938 959,000
----------- -----------
NATURAL GAS TRANSMISSIONS - 2.70%
32,000 Coastal Corp................................. 1,279,827 1,346,000
----------- -----------
OIL AND GAS FIELD SERVICES - 10.75%
52,000 Halliburton Co............................... 1,943,027 1,985,750
28,000 Schlumberger Ltd............................. 1,520,851 2,068,500
46,000 Tidewater, Inc............................... 1,483,564 1,302,375
----------- -----------
4,947,442 5,356,625
----------- -----------
OIL-OFFSHORE DRILLING - 3.63%
57,000 Diamond Offshore Drilling, Inc............... 1,838,069 1,809,750
----------- -----------
PAPER - 4.26%
23,000 Georgia-Pacific Group........................ 1,008,225 797,813
36,000 International Paper Co....................... 1,527,560 1,325,250
----------- -----------
2,535,785 2,123,063
----------- -----------
PUBLISHING - 3.24%
47,000 Reader's Digest Association, Inc. Class A 1,408,802 1,615,625
----------- -----------
RETAIL-DEPARTMENT STORES - 3.20%
43,500 Federated Department Stores, Inc. (a)........ 1,766,622 1,595,906
----------- -----------
RETAIL-SPECIALTY - 2.22%
29,000 Tandy Corp. (with rights).................... 1,336,906 1,103,813
----------- -----------
TOBACCO - 0.93%
23,000 Philip Morris Companies, Inc................. 943,714 461,438
----------- -----------
UTILITIES-ELECTRIC - 2.26%
24,000 Dynegy, Inc. Class A......................... 711,217 1,125,000
----------- -----------
TOTAL COMMON STOCKS.......................... $49,103,793 $48,991,137
=========== ===========
</TABLE>
19
<PAGE>
FORTIS STOCK FUNDS
VALUE FUND (CONTINUED)
Schedule of Investments
February 29, 2000 (Unaudited)
SHORT-TERM INVESTMENTS - 4.08%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
---------- -----------
<C> <S> <C>
BANKS - 0.00%
$ 1,158 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate - 5.70%......... $ 1,158
-----------
DIVERSIFIED FINANCE - 2.99%
1,490,000 Norwest Bank Associates Corp., Master
Variable Rate Note, Current rate - 5.67%... 1,490,000
-----------
INVESTMENT COMPANY - 0.41%
201,799 Wells Fargo Cash Investment Money Market
Fund, Current rate - 5.69%................. 201,799
-----------
U.S. GOVERNMENT AGENCY - 0.68%
340,000 US Treasury Bill, 5.22% 3-23-2000 (e)........ 338,888
-----------
TOTAL SHORT-TERM INVESTMENTS................. 2,031,845
-----------
TOTAL INVESTMENTS IN SECURITIES (COST:
$51,135,638)(B)............................ $51,022,982
===========
</TABLE>
(a) Presently not paying dividend income.
(b) At February 29, 2000, the cost of securities for federal income tax
purposes was $51,164,452 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 4,428,360
Unrealized depreciation..................................... (4,569,830)
- -------------------------------------------------------------------------
Net unrealized depreciation................................. $ (141,470)
- -------------------------------------------------------------------------
</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.
(e) Security pledged as initial margin deposit for open financial futures
position detailed below:
<TABLE>
<CAPTION>
Unrealized
Market Value Appreciation/
Number of Covered by (Depreciation)
Issuer Contract(s) Contract(s) Expiration at 2/29/00
- ------ ----------- ------------ ---------- --------------
<S> <C> <C> <C> <C>
Standard & Poor's 500 4 $1,372,000 March 2000 $(75,500)
</TABLE>
20
<PAGE>
FORTIS STOCK FUNDS
GROWTH & INCOME FUND
Schedule of Investments
February 29, 2000 (Unaudited)
COMMON STOCKS-71.77%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------ ----------- -----------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-2.48%
11,000 Interpublic Group of Companies, Inc.......... $ 425,739 $ 442,062
6,500 Omnicom Group, Inc........................... 286,997 612,219
----------- -----------
712,736 1,054,281
----------- -----------
AUTOMOBILE MANUFACTURERS-0.54%
3,000 General Motors Corp.......................... 238,152 228,187
----------- -----------
BANKS-3.41%
7,500 Chase Manhattan Corp......................... 580,566 597,187
7,500 Marshall & Ilsley Corp....................... 433,200 344,531
9,000 Northern Trust Corp.......................... 451,085 508,500
----------- -----------
1,464,851 1,450,218
----------- -----------
BEVERAGE-1.68%
4,700 Anheuser-Busch Companies, Inc................ 327,501 301,387
7,000 Seagram Company Ltd.......................... 432,425 411,250
----------- -----------
759,926 712,637
----------- -----------
BUSINESS SERVICES-1.28%
12,500 Automatic Data Processing, Inc............... 585,513 544,531
----------- -----------
COMPUTER-COMMUNICATION EQUIPMENT-3.53%
19,800 Cabletron Systems, Inc. (a).................. 537,459 970,200
4,000 Cisco Systems, Inc. (a)...................... 387,500 528,750
----------- -----------
924,959 1,498,950
----------- -----------
COMPUTER-HARDWARE-0.81%
10,000 Compaq Computer Corp......................... 315,821 248,750
700 Hewlett-Packard Co........................... 89,503 94,150
----------- -----------
405,324 342,900
----------- -----------
COMPUTER-SOFTWARE-3.52%
6,000 Computer Associates International, Inc....... 434,261 385,875
8,300 Electronic Data Systems Corp................. 446,516 537,425
6,400 Microsoft Corp. (a).......................... 637,264 572,000
----------- -----------
1,518,041 1,495,300
----------- -----------
CONSTRUCTION-0.31%
4,600 Fluor Corp................................... 208,976 130,812
----------- -----------
CONSUMER GOODS-0.95%
7,700 Colgate-Palmolive Co......................... 422,174 401,844
----------- -----------
COSMETICS AND SUNDRIES-1.15%
18,000 Avon Products, Inc........................... 580,716 487,125
----------- -----------
DIVERSIFIED COMPANIES-0.68%
3,300 Minnesota Mining and
Manufacturing Co........................... 316,182 290,812
----------- -----------
DRUGS-3.91%
10,000 American Home Products Corp.................. 462,631 435,000
6,500 Bristol-Myers Squibb Co...................... 449,260 369,281
9,000 Pharmacia & Upjohn, Inc...................... 356,076 428,625
5,000 Warner-Lambert Co............................ 470,193 427,813
----------- -----------
1,738,160 1,660,719
----------- -----------
ELECTRIC-PRODUCTS-0.60%
6,000 Molex, Inc. Class A.......................... 258,607 254,250
----------- -----------
ELECTRICAL EQUIPMENT-2.46%
7,900 General Electric Co.......................... 654,218 1,044,281
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------ ----------- -----------
<C> <S> <C> <C>
ELECTRONIC-SEMICONDUCTOR-3.25%
8,300 Texas Instruments, Inc....................... $ 825,835 $ 1,381,950
----------- -----------
FINANCIAL SERVICES-2.79%
5,700 Citigroup, Inc............................... 284,148 294,619
3,500 J.P. Morgan & Co., Inc....................... 501,413 388,500
6,500 Marsh & McLennan Companies, Inc.............. 452,462 502,938
----------- -----------
1,238,023 1,186,057
----------- -----------
FOOD-0.66%
8,500 Sysco Corp................................... 283,904 278,906
----------- -----------
HEALTH CARE SERVICES-1.27%
28,000 Columbia/HCA Healthcare Corp................. 727,779 540,750
----------- -----------
HOUSEHOLD PRODUCTS-0.41%
2,000 Procter & Gamble Co.......................... 231,066 176,000
----------- -----------
INSURANCE-1.54%
4,400 American International Group, Inc............ 210,122 389,125
16,800 John Hancock Financial
Services, Inc. (a)......................... 285,600 266,700
----------- -----------
495,722 655,825
----------- -----------
LEISURE TIME-AMUSEMENTS-1.30%
16,500 Walt Disney Co............................... 482,974 552,750
----------- -----------
MEDIA-0.88%
6,300 CBS Corp. (a)................................ 310,959 375,244
----------- -----------
NATURAL GAS TRANSMISSIONS-2.19%
13,500 Enron Corp................................... 299,866 931,500
----------- -----------
OIL AND GAS FIELD SERVICES-2.21%
11,000 Halliburton Co............................... 421,118 420,063
7,000 Schlumberger Ltd............................. 464,430 517,125
----------- -----------
885,548 937,188
----------- -----------
OIL-CRUDE PETROLEUM AND GAS-2.26%
9,698 BP Amoco plc ADR............................. 410,231 455,806
6,700 Exxon Mobil Corp............................. 397,150 504,594
----------- -----------
807,381 960,400
----------- -----------
OIL-OFFSHORE DRILLING-0.32%
4,500 ENSCO International, Inc..................... 129,344 136,125
----------- -----------
OIL-REFINING-1.17%
7,000 Atlantic Richfield Co........................ 602,049 497,000
----------- -----------
PRECISION INSTRUMENTS-TEST, RESEARCH-1.71%
7,000 Agilent Technologies, Inc. (a)............... 260,868 725,813
----------- -----------
PUBLISHING-3.61%
18,000 McGraw-Hill Companies, Inc................... 689,488 915,750
18,000 Reader's Digest Association, Inc. Class A.... 561,540 618,750
----------- -----------
1,251,028 1,534,500
----------- -----------
RETAIL-DISCOUNT STORES-0.63%
5,500 Wal-Mart Stores, Inc......................... 323,111 267,782
----------- -----------
TELECOMMUNICATION EQUIPMENT-0.80%
2,000 Motorola, Inc................................ 209,844 341,000
----------- -----------
TELECOMMUNICATIONS-5.04%
6,000 BroadWing, Inc. (a).......................... 223,389 178,125
6,500 Cable & Wireless plc ADR..................... 263,826 420,063
</TABLE>
21
<PAGE>
FORTIS STOCK FUNDS
GROWTH & INCOME FUND (CONTINUED)
Schedule of Investments
February 29, 2000 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------ ----------- -----------
<C> <S> <C> <C>
8,200 Corning, Inc................................. $ 742,105 $ 1,541,600
----------- -----------
1,229,320 2,139,788
----------- -----------
TELEPHONE SERVICES-8.67%
6,000 Alltel Corp.................................. 314,669 348,000
8,500 AT&T Corp.................................... 480,252 420,219
8,500 Bell Atlantic Corp........................... 572,260 415,969
11,500 GTE Corp..................................... 587,838 678,500
30,000 SBC Communications, Inc...................... 1,071,048 1,140,000
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------ ----------- -----------
<C> <S> <C> <C>
9,400 US West, Inc................................. $ 372,996 $ 682,675
----------- -----------
3,399,063 3,685,363
----------- -----------
UTILITIES-ELECTRIC-3.75%
28,400 Dynegy, Inc. Class A......................... 900,435 1,331,250
6,600 Montana Power Co............................. 236,061 259,875
----------- -----------
1,136,496 1,591,125
----------- -----------
TOTAL COMMON STOCKS.......................... $25,918,715 $30,491,913
=========== ===========
</TABLE>
PREFERRED STOCKS-11.21%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------ ---------- -----------
<C> <S> <C> <C>
BROADCASTING-1.26%
6,000 UnitedGlobalCom, Inc., Conv. Ser D 7.00%..... $ 300,000 $ 537,000
---------- -----------
COMPUTER-SOFTWARE-1.93%
16,000 PSInet Inc., Conv. 7.00% (e)................. 800,000 818,000
---------- -----------
TELECOMMUNICATIONS-5.97%
6,000 Global Crossing, Conv. 7.00% (e)............. 1,500,000 1,602,000
13,500 Mediaone Group, Inc., Conv. 7.00%............ 586,406 736,594
2,400 Verio, Inc., Conv. 6.75% (e)................. 120,000 197,100
---------- -----------
2,206,406 2,535,694
---------- -----------
UTILITIES-ELECTRIC-2.05%
7,500 AES Corp., Conv. Ser A 5.375%................ 425,599 870,937
---------- -----------
TOTAL PREFERRED STOCKS....................... $3,732,005 $ 4,761,631
========== ===========
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-1.76%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
--------- ----------- -------- -----------
<C> <S> <C> <C> <C>
MEDIA-1.76%
$600,000 Tribune Co., 2.00% Conv. (PHONES-America
Online) 5-15-2029 (g)...................... A- $942,000 $ 748,875
-------- -----------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-10.13%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
--------- ----------- ------------ -----------
<C> <S> <C> <C> <C>
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-1.84%
$700,000 Invitrogen Corp., 5.50% Conv. 03-01-2007
(f)........................................ NR $ 700,000 $ 784,000
------------ -----------
COMPUTER-SOFTWARE-1.55%
150,000 BEA Systems, Inc., 4.00% Conv. 12-15-2006
(e)........................................ NR 150,000 288,375
35,000 Digital Island, Inc., 6.00% Conv.
2-15-2005.................................. NR 35,005 37,450
150,000 i2 Technologies, Inc., 5.25% Conv. 12-15-2006
(e)........................................ NR 150,000 332,250
------------ -----------
335,005 658,075
------------ -----------
ELECTRONIC-MISCELLANEOUS-3.26%
1,000,000 Echostar Communications Corp., 4.875% Conv.
1-1-2007 (e)............................... NR 1,002,179 1,386,250
------------ -----------
ELECTRONIC-SEMICONDUCTOR-1.84%
400,000 Cypress Semiconductor Corp., 6.00% Conv.
10-1-2002 (e).............................. B 400,000 780,500
------------ -----------
</TABLE>
22
<PAGE>
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
--------- ----------- ------------ -----------
<C> <S> <C> <C> <C>
HEALTH CARE SERVICES-0.42%
$300,000 Assisted Living Concepts, Inc., 5.625% Conv.
5-1-2003 (e)............................... NR $ 300,000 $ 177,375
------------ -----------
TELEPHONE SERVICES - 1.22%
350,000 Telefonos de Mexico, S.A., 4.25% Conv.
6-15-2004.................................. BB+ 350,000 518,000
------------ -----------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... 3,087,184 4,304,200
------------ -----------
TOTAL LONG-TERM INVESTMENTS.................. $ 33,679,904 $40,306,619
============ ===========
</TABLE>
SHORT-TERM INVESTMENTS - 6.39%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
---------- -----------
<C> <S> <C>
BANKS - 0.00%
$ 1,028 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.70%........ $ 1,028
-----------
DIVERSIFIED FINANCE - 4.29%
1,823,000 Norwest Bank Associates Corp., Master
Variable Rate Note, Current
rate -- 5.67%.............................. 1,823,000
-----------
INVESTMENT COMPANY - 0.92%
390,565 Wells Fargo Cash Investment Money Market
Fund, Current rate -- 5.69%................ 390,565
-----------
U.S. GOVERNMENT AGENCY - 1.18%
500,000 Federal National Mortgage Association 5.75%
3-10-2000.................................. 499,215
-----------
TOTAL SHORT-TERM INVESTMENTS................. 2,713,808
-----------
TOTAL INVESTMENTS IN SECURITIES (COST:
$36,393,712)(B)............................ $43,020,427
===========
</TABLE>
(a) Presently not paying dividend income.
(b) At February 29, 2000, the cost of securities for federal income tax
purposes was $36,393,712 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 8,718,524
Unrealized depreciation..................................... (2,091,809)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 6,626,715
- -------------------------------------------------------------------------
</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 3.26% of total net assets as of February 29, 2000.
(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>
1998 300,000 Assisted Living Concepts, Inc. due 2003 - 144A $ 300,000
1999 150,000 BEA Systems, Inc. due 2006 - 144A 150,000
1997 400,000 Cypress Semiconductor Corp. due 2002 - 144A 400,000
1999 1,000,000 Echostar Communications Corp. due 2007 - 144A 1,002,179
1999 6,000 Global Crossing , Conv. - 144A 1,500,000
1999 150,000 i2 Technologies, Inc. due 2006 - 144A 150,000
2000 16,000 PSInet, Inc., Conv. - 144A 800,000
1999 2,400 Verio, Inc., Conv. - 144A 120,000
</TABLE>
The aggregate value of these securities at February 29, 2000, was
$5,581,850, which represents 13.14% 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
this security at February 29, 2000, was $784,000, which represents 1.85% of
total net assets.
(g) PHONES (Participation Hybrid Option Note Exchangeable Securities) are debt
securities which entitle the holder to the principal value or an amount
based upon the market value of the referenced security.
23
<PAGE>
FORTIS STOCK FUNDS
CAPITAL FUND
Schedule of Investments
February 29, 2000 (Unaudited)
COMMON STOCKS-97.81%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-0.95%
183,000 Interpublic Group of Companies, Inc. $ 4,143,218 $ 7,354,312
------------ ------------
AUTOMOBILE MANUFACTURERS-0.49%
50,000 General Motors Corp.......................... 3,969,200 3,803,125
------------ ------------
BANKS-0.92%
90,000 Chase Manhattan Corp......................... 6,740,246 7,166,250
------------ ------------
BEVERAGE-0.76%
100,000 Seagram Company Ltd.......................... 6,177,434 5,875,000
------------ ------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-4.15%
160,000 Amgen, Inc. (with rights) (a)................ 7,073,905 10,910,000
80,000 Genentech, Inc. (a).......................... 7,288,764 15,430,000
30,000 Immunex Corp. (a)............................ 3,777,615 5,923,125
------------ ------------
18,140,284 32,263,125
------------ ------------
BROADCASTING-5.13%
180,000 AMFM, Inc. (a)............................... 9,565,152 11,047,500
230,000 AT&T Corp. -- LIBERTY MEDIA GROUP (A) 7,998,838 12,017,500
80,000 Grupo Televisa S.A. GDR (a).................. 5,400,407 6,145,000
228,000 USA Networks, Inc. (a)....................... 4,754,503 5,115,750
100,000 Viacom, Inc. Class B (a)..................... 3,411,951 5,575,000
------------ ------------
31,130,851 39,900,750
------------ ------------
BUSINESS SERVICES-3.68%
20,000 Ariba, Inc. (a).............................. 3,846,948 5,290,000
120,000 Automatic Data Processing, Inc............... 5,541,201 5,227,500
39,000 CMGI, Inc. (a)............................... 3,191,595 5,052,937
18,000 Commerce One, Inc. (a)....................... 3,736,787 3,759,750
83,000 Equant N.V. NY Shares (a).................... 7,545,447 9,275,250
------------ ------------
23,861,978 28,605,437
------------ ------------
COMPUTER-COMMUNICATION EQUIPMENT-5.32%
32,000 Broadcom Corp. Class A (a)................... 5,529,200 6,316,000
507,600 Cabletron Systems, Inc. (a).................. 8,945,786 24,872,400
77,000 Cisco Systems, Inc. (a)...................... 3,294,353 10,178,437
------------ ------------
17,769,339 41,366,837
------------ ------------
COMPUTER-HARDWARE-2.34%
210,400 Compaq Computer Corp......................... 6,444,651 5,233,700
30,000 Hewlett-Packard Co........................... 3,835,851 4,035,000
94,000 Sun Microsystems, Inc. (a)................... 3,701,006 8,953,500
------------ ------------
13,981,508 18,222,200
------------ ------------
COMPUTER-SOFTWARE-8.65%
40,000 BEA Systems, Inc. (a)........................ 4,052,470 5,062,500
182,000 Computer Associates International, Inc....... 11,663,587 11,704,875
79,800 Electronic Data Systems Corp................. 5,508,906 5,167,050
89,800 i2 Technologies, Inc. (a).................... 5,680,577 14,682,300
90,000 Intuit, Inc. (a)............................. 5,822,633 4,725,000
110,000 Legato Systems, Inc. (a)..................... 4,803,909 3,918,750
85,200 Microsoft Corp. (a).......................... 6,897,745 7,614,750
70,000 Peregrine Systems, Inc. (a).................. 2,585,226 3,823,750
76,000 Siebel Systems, Inc. (a)..................... 4,547,464 10,540,250
------------ ------------
51,562,517 67,239,225
------------ ------------
CONSUMER GOODS-1.17%
175,000 Colgate-Palmolive Co......................... 9,185,149 9,132,812
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
DIVERSIFIED COMPANIES-0.28%
25,000 Minnesota Mining and Manufacturing Co........ $ 2,346,382 $ 2,203,125
------------ ------------
DRUGS-2.75%
133,000 American Home Products Corp.................. 6,118,820 5,785,500
54,000 Bristol-Myers Squibb Co...................... 3,729,866 3,067,875
80,000 Chiron Corp. (a)............................. 4,011,984 4,000,000
100,000 Warner-Lambert Co............................ 9,403,850 8,556,250
------------ ------------
23,264,520 21,409,625
------------ ------------
ELECTRIC-PRODUCTS-0.44%
80,000 Molex, Inc. Class A.......................... 3,448,096 3,390,000
------------ ------------
ELECTRICAL EQUIPMENT-2.11%
124,000 General Electric Co.......................... 13,232,002 16,391,250
------------ ------------
ELECTRICAL-COMPONENTS AND PARTS-0.61%
30,000 Analog Devices, Inc. (a)..................... 2,038,464 4,710,000
------------ ------------
ELECTRONIC-COMMUNICATION SECURITY-0.59%
18,000 VeriSign, Inc. (a)........................... 3,813,932 4,554,000
------------ ------------
ELECTRONIC-SEMICONDUCTOR-9.01%
35,000 Intel Corp................................... 3,829,668 3,955,000
78,600 JDS Uniphase Corp. (a)....................... 4,315,200 20,730,750
70,000 LSI Logic Corp. (a).......................... 3,698,380 4,484,375
99,000 National Semiconductor Corp. (a)............. 5,475,235 7,437,375
135,000 Texas Instruments, Inc....................... 9,719,275 22,477,500
137,000 Xilinx, Inc. (a)............................. 6,214,015 10,925,750
------------ ------------
33,251,773 70,010,750
------------ ------------
FINANCIAL SERVICES-2.46%
34,000 American Express Co.......................... 4,442,777 4,562,375
85,400 Citigroup, Inc............................... 4,257,241 4,414,112
40,000 Marsh & McLennan Companies, Inc. 3,077,026 3,095,000
100,000 Morgan Stanley Dean Witter & Co.............. 6,607,870 7,043,750
------------ ------------
18,384,914 19,115,237
------------ ------------
FOOD-0.36%
85,000 Sysco Corp................................... 3,019,719 2,789,062
------------ ------------
HEALTH CARE SERVICES-1.09%
440,000 Columbia/HCA Healthcare Corp................. 11,807,898 8,497,500
------------ ------------
HOUSEHOLD PRODUCTS-0.34%
30,000 Procter & Gamble Co.......................... 3,465,996 2,640,000
------------ ------------
INSURANCE-0.49%
43,000 American International Group, Inc............ 3,089,584 3,802,812
------------ ------------
LEISURE TIME-AMUSEMENTS-1.40%
325,600 Walt Disney Co............................... 9,792,541 10,907,600
------------ ------------
MEDIA-1.85%
196,400 CBS Corp. (a)................................ 8,557,348 11,698,075
40,000 Clear Channel Communications, Inc. (a)....... 3,184,796 2,665,000
------------ ------------
11,742,144 14,363,075
------------ ------------
MEDICAL TECHNOLOGY-3.09%
148,000 Medtronic, Inc. (with rights)................ 3,812,641 7,168,750
160,000 PE Corp-PE Biosystems Group.................. 3,627,532 16,880,000
------------ ------------
7,440,173 24,048,750
------------ ------------
</TABLE>
24
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
NATURAL GAS TRANSMISSIONS-2.30%
259,400 Enron Corp................................... $ 7,455,617 $ 17,898,600
------------ ------------
OIL AND GAS FIELD SERVICES-1.36%
75,000 BJ Services Co. (a).......................... 3,711,277 4,279,688
85,000 Schlumberger Ltd............................. 5,639,512 6,279,375
------------ ------------
9,350,789 10,559,063
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-1.14%
68,000 Exxon Mobil Corp............................. 4,874,779 5,121,250
78,800 Texaco, Inc.................................. 5,022,491 3,738,075
------------ ------------
9,897,270 8,859,325
------------ ------------
OIL-OFFSHORE DRILLING-0.21%
55,000 ENSCO International, Inc..................... 1,580,765 1,663,750
------------ ------------
OIL-REFINING-0.64%
70,000 Atlantic Richfield Co........................ 6,020,490 4,970,000
------------ ------------
PRECISION INSTRUMENTS-TEST, RESEARCH-1.30%
97,600 Agilent Technologies, Inc. (a)............... 3,792,786 10,119,900
------------ ------------
PUBLISHING-1.15%
260,000 Reader's Digest Association, Inc. Class A.... 8,075,549 8,937,500
------------ ------------
RETAIL-DEPARTMENT STORES-0.61%
63,000 Kohl's Corp. (a)............................. 617,041 4,776,188
------------ ------------
RETAIL-DISCOUNT STORES-1.16%
186,000 Wal-Mart Stores, Inc......................... 6,196,080 9,055,875
------------ ------------
RETAIL-GROCERY-0.91%
182,500 Safeway, Inc. (a)............................ 6,992,141 7,037,656
------------ ------------
RETAIL-SPECIALTY-0.14%
75,000 BUY.COM, Inc. (a)............................ 1,279,220 1,050,000
------------ ------------
TELECOMMUNICATION EQUIPMENT-10.45%
180,000 CIENA Corp. (a).............................. 12,561,660 28,766,250
45,000 General Motors Corp. Class H................. 3,217,950 5,422,500
107,500 Motorola, Inc................................ 9,130,807 18,328,750
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
67,000 Nextel Communications, Inc. (a).............. $ 3,983,610 $ 9,132,938
17,000 Nokia Corp. ADR.............................. 1,509,783 3,371,313
45,000 Nortel Networks Corp......................... 2,470,884 5,017,500
40,000 QUALCOMM, Inc. (a)........................... 3,859,441 5,697,500
40,000 RF Micro Devices, Inc. (a)................... 4,075,560 5,532,500
------------ ------------
40,809,695 81,269,251
------------ ------------
TELECOMMUNICATIONS-8.25%
225,000 BroadWing, Inc. (a).......................... 6,401,123 6,679,688
90,000 Cable & Wireless plc ADR..................... 3,649,440 5,816,250
66,000 Corning, Inc................................. 6,882,380 12,408,000
75,000 FLAG Telecom Holdings Ltd. (a)............... 1,800,000 2,146,875
210,000 Global Crossing Ltd. (a)..................... 4,274,277 9,791,250
10,000 IMPSAT Fiber Networks, Inc. (a).............. 170,000 366,875
29,000 Level 3 Communications, Inc. (a)............. 1,909,011 3,302,375
42,000 SAVVIS Communications Corp. (a).............. 1,008,000 840,000
85,300 Sonera Oyj Corp. ADR (a)..................... 2,269,837 6,696,050
162,000 Vodafone AirTouch plc ADR.................... 5,347,690 9,345,375
51,000 VoiceStream Wireless Corp. (a)............... 2,775,122 6,786,188
------------ ------------
36,486,880 64,178,926
------------ ------------
TELEPHONE SERVICES-4.14%
56,000 Alltel Corp.................................. 3,654,350 3,248,000
151,000 AT&T Corp.................................... 8,328,727 7,465,063
130,400 Bell Atlantic Corp........................... 8,263,249 6,381,450
17,000 NEXTLINK Communications, Inc. (a) 1,736,904 1,873,188
65,800 SBC Communications, Inc...................... 3,764,539 2,500,400
40,000 Telefonica S.A. ADR.......................... 3,621,624 3,467,500
110,000 Telefonos de Mexico S.A. ADR Class L 7,143,758 7,232,500
------------ ------------
36,513,151 32,168,101
------------ ------------
TOYS-0.20%
160,000 Mattel, Inc.................................. 1,966,432 1,540,000
------------ ------------
UTILITIES-ELECTRIC-3.42%
174,000 AES Corp. (a)................................ 8,781,160 14,583,375
256,600 Dynegy, Inc. Class A......................... 8,449,188 12,028,125
------------ ------------
17,230,348 26,611,500
------------ ------------
TOTAL COMMON STOCKS.......................... $531,064,116 $760,457,494
============ ============
</TABLE>
SHORT-TERM INVESTMENTS-1.88%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
BANKS-0.01%
$ 16,975 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.70%........ $ 16,975
------------
DIVERSIFIED FINANCE-0.38%
2,967,000 Norwest Bank Associates Corp., Master
Variable Rate Note, Current
rate -- 5.67%.............................. 2,967,000
------------
INVESTMENT COMPANY-1.49%
11,581,459 Wells Fargo Cash Investment Money Market
Fund, Current rate -- 5.69%................ 11,581,458
------------
TOTAL SHORT-TERM INVESTMENTS................. 14,565,433
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$545,629,549)(B)........................... $775,022,927
============
</TABLE>
(a) Presently not paying dividend income.
(b) At February 29, 2000, the cost of securities for federal income tax
purposes was $545,817,471 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $251,007,463
Unrealized depreciation..................................... (21,802,007)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $229,205,456
- --------------------------------------------------------------------------
</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 7.26% of total net assets as of February 29, 2000.
25
<PAGE>
FORTIS STOCK FUNDS
GROWTH FUND, INC.
Schedule of Investments
February 29, 2000 (Unaudited)
COMMON STOCKS-95.53%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ --------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS - 2.89%
173,200 Cox Radio, Inc. (a).......................... $ 7,465,516 $ 13,856,000
110,000 TMP Worldwide, Inc. (a)...................... 8,302,562 14,953,125
357,500 Young & Rubicam, Inc......................... 10,261,412 18,053,750
------------ --------------
26,029,490 46,862,875
------------ --------------
AIR FREIGHT-0.40%
43,300 Atlas Air, Inc. (a).......................... 1,400,501 1,047,319
165,000 Biomet, Inc.................................. 6,391,125 5,445,000
------------ --------------
7,791,626 6,492,319
------------ --------------
BANKS-1.32%
110,000 Silicon Valley Bancshares (a)................ 7,060,273 8,717,500
239,200 Zions Bancorporation......................... 13,433,266 12,692,550
------------ --------------
20,493,539 21,410,050
------------ --------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-2.20%
55,000 Affymetrix, Inc. (a)......................... 5,789,094 15,929,375
2,800 Diversa Corp. (a)............................ 67,200 373,800
55,000 Incyte Pharmaceuticals, Inc. (a)............. 6,978,471 15,155,937
33,600 Sequenom, Inc. (a)........................... 2,224,537 4,200,000
------------ --------------
15,059,302 35,659,112
------------ --------------
BROADCASTING-4.38%
114,100 Cumulus Media, Inc. Class A (a).............. 5,639,707 3,408,737
228,400 Emmis Communications Corp. Class A (a)....... 8,834,176 8,336,600
137,500 Hispanic Broadcasting Corp. (a).............. 7,898,228 12,847,656
55,000 Pegasus Communications Corp. (a) 6,785,625 6,820,000
137,500 UnitedGlobalCom, Inc. (a).................... 7,946,073 14,368,750
247,500 Univision Communications, Inc.
Class A (a)................................ 7,646,221 25,214,062
------------ --------------
44,750,030 70,995,805
------------ --------------
BUSINESS SERVICES-3.52%
12,100 Caliper Technologies Corp. (a)............... 1,183,703 2,151,531
165,000 Healtheon/WebMD Corp. (a).................... 8,226,973 9,126,562
110,000 Netro Corp. (a).............................. 4,547,470 4,688,750
27,500 Official Payments Corp. (a).................. 412,500 986,562
82,500 Redback Networks, Inc. (a)................... 11,849,130 24,626,250
110,000 Verio, Inc. (a).............................. 5,832,233 8,256,875
27,500 VIA NET.WORKS, Inc. (a)...................... 577,500 1,815,000
41,300 Vicinity Corp. (a)........................... 1,348,350 1,672,650
55,000 Visual Networks, Inc. (a).................... 4,042,500 3,616,250
------------ --------------
38,020,359 56,940,430
------------ --------------
COMPUTER-COMMUNICATION EQUIPMENT-0.54%
55,000 Entrust Technologies, Inc. (a)............... 3,944,446 4,853,750
82,500 StarMedia Network, Inc. (a).................. 3,657,068 3,877,500
------------ --------------
7,601,514 8,731,250
------------ --------------
COMPUTER-SOFTWARE-24.74%
52,100 AppNet, Inc. (a)............................. 2,605,000 2,337,987
261,200 BEA Systems, Inc. (a)........................ 3,074,191 33,058,125
165,000 Check Point Software Technologies
Ltd. (a)................................... 4,420,435 33,649,687
137,500 Comverse Technology, Inc. (a)................ 6,579,572 27,070,312
11,000 Data Return Corp. (a)........................ 455,488 705,375
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ --------------
<C> <S> <C> <C>
55,000 DoubleClick, Inc. (a)........................ $ 4,869,392 $ 4,884,687
55,000 Extreme Networks, Inc. (a)................... 5,090,233 6,118,750
123,700 i2 Technologies, Inc. (a).................... 4,270,161 20,224,950
55,000 Inktomi Corp. (a)............................ 3,586,517 7,541,875
312,500 Intertrust Technologies Corp. (a)............ 9,168,964 26,542,969
55,000 IONA Technologies plc ADR (a)................ 3,848,444 4,661,250
110,000 ISS Group, Inc. (a).......................... 2,963,832 11,550,000
28,000 Keynote Systems, Inc. (a).................... 2,940,000 4,585,000
108,700 Mediaplex, Inc. (a).......................... 6,340,134 9,076,450
330,000 Mercury Interactive Corp. (a)................ 5,885,257 31,803,750
165,000 Open Market, Inc. (a)........................ 5,893,418 8,270,625
608,000 Peregrine Systems, Inc. (a).................. 12,646,364 33,212,000
286,000 Portal Software, Inc. (a).................... 9,090,144 21,485,750
118,100 SciQuest.com, Inc. (a)....................... 4,562,218 8,842,737
220,000 Siebel Systems, Inc. (a)..................... 5,393,930 30,511,250
151,200 TSI International Software Ltd. (a).......... 9,228,159 12,823,650
192,750 USinternetworking, Inc. (a).................. 7,700,029 12,866,062
55,000 VERITAS Software Corp. (a)................... 7,561,848 10,883,125
103,500 Vitria Technology, Inc. (a).................. 15,797,250 19,522,688
60,100 webMethods, Inc. (a)......................... 11,334,265 18,514,556
------------ --------------
155,305,245 400,743,610
------------ --------------
DRUGS-5.86%
374,200 Biovail Corp. International (a).............. 9,781,493 24,697,200
275,000 Jones Pharma, Inc............................ 9,299,415 19,731,250
86,650 King Pharmaceuticals, Inc. (a)............... 2,733,977 4,132,122
137,500 MedImmune, Inc. (a).......................... 5,943,438 27,293,750
144,800 QLT PhotoTherapeutics, Inc. (a).............. 4,398,181 10,335,100
220,000 Watson Pharmaceuticals, Inc. (a)............. 8,996,194 8,800,000
------------ --------------
41,152,698 94,989,422
------------ --------------
ELECTRICAL-COMPONENTS AND PARTS-3.47%
165,000 Analog Devices, Inc. (a)..................... 7,365,825 25,905,000
330,000 Celestica, Inc. (a).......................... 6,722,418 15,241,875
247,600 Flextronics International Ltd. (a)........... 8,379,713 15,072,650
------------ --------------
22,467,956 56,219,525
------------ --------------
ELECTRONIC-COMMUNICATION SECURITY-2.32%
148,700 VeriSign, Inc. (a)........................... 8,809,135 37,621,100
------------ --------------
ELECTRONIC-COMPONENTS-1.54%
275,000 Methode Electronics, Inc..................... 8,641,370 15,984,375
55,000 QLogic Corp. (a)............................. 5,559,076 8,610,938
7,400 ST Assembly Test Services Ltd. ADR (a)....... 155,400 355,200
------------ --------------
14,355,846 24,950,513
------------ --------------
ELECTRONIC-CONTROLS AND EQUIPMENT-1.54%
74,300 Credence Systems Corp. (a)................... 7,018,255 9,900,475
110,000 Harmonic, Inc. (a)........................... 7,817,323 15,063,125
------------ --------------
14,835,578 24,963,600
------------ --------------
ELECTRONIC-SEMICONDUCTOR-11.01%
55,000 Alpha Industries, Inc. (a)................... 6,150,205 7,985,313
121,000 Applied Micro Circuits Corp. (a)............. 4,038,756 33,282,563
200,800 Atmel Corp. (a).............................. 2,945,174 9,939,600
307,600 Dallas Semiconductor Corp.................... 10,058,290 12,419,350
173,300 EMCORE Corp. (a)............................. 23,836,411 22,529,000
</TABLE>
26
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ --------------
<C> <S> <C> <C>
19,300 Intersil Holding Corp. (a)................... $ 482,500 $ 1,145,938
58,000 KEMET Corp. (a).............................. 2,844,587 3,563,375
440,000 LSI Logic Corp. (a).......................... 8,123,251 28,187,500
112,850 SDL, Inc. (a)................................ 6,508,716 46,268,500
302,500 Vishay Intertechnology, Inc. (a)............. 5,206,314 13,007,500
------------ --------------
70,194,204 178,328,639
------------ --------------
FINANCIAL SERVICES-1.18%
165,000 Ambac Financial Group, Inc................... 9,566,831 7,249,688
302,500 AmeriCredit Corp. (a)........................ 4,749,658 4,197,188
385,000 Concord EFS, Inc. (a)........................ 9,031,307 7,531,563
4,400 Franklin Resources, Inc...................... 62,333 119,625
------------ --------------
23,410,129 19,098,064
------------ --------------
FOOD-0.14%
137,500 International Home Foods, Inc. (a)........... 2,129,606 2,328,906
------------ --------------
FREIGHT CARRIERS-0.77%
330,000 Expeditors International of Washington,
Inc........................................ 10,336,303 12,457,500
------------ --------------
HOTEL AND GAMING-0.77%
220,000 MGM Grand, Inc............................... 5,672,711 4,372,500
715,000 Park Place Entertainment Corp. (a)........... 8,132,204 8,088,438
------------ --------------
13,804,915 12,460,938
------------ --------------
LEISURE TIME-AMUSEMENTS-0.03%
16,500 Hotel Reservations Network, Inc.
Class A (a)................................ 264,000 429,000
------------ --------------
MEDIA-1.72%
481,250 Infinity Broadcasting Corp. Class A (a)...... 8,726,707 15,369,922
122,700 Liberate Technologies, Inc. (a).............. 9,381,164 12,500,063
------------ --------------
18,107,871 27,869,985
------------ --------------
MEDICAL SUPPLIES-1.09%
13,800 Abgenix, Inc. (a)............................ 2,898,000 4,445,325
110,000 ALZA Corp. (a)............................... 3,483,381 4,035,625
185,000 Mallinckrodt Group, Inc...................... 5,780,372 4,555,625
165,000 Sybron International Corp. (a)............... 3,898,265 4,620,000
------------ --------------
16,060,018 17,656,575
------------ --------------
MEDICAL TECHNOLOGY-2.15%
330,000 PE Corp-PE Biosystems Group.................. 10,286,692 34,815,000
------------ --------------
METALS-FABRICATING-1.93%
318,800 Waters Corp. (a)............................. 9,635,399 31,262,325
------------ --------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ --------------
<C> <S> <C> <C>
OIL AND GAS FIELD SERVICES-1.93%
330,000 BJ Services Co. (a).......................... $ 12,767,678 $ 18,830,625
275,000 Weatherford International, Inc. (a).......... 9,911,155 12,375,000
------------ --------------
22,678,833 31,205,625
------------ --------------
OIL-OFFSHORE DRILLING-3.49%
385,000 ENSCO International, Inc..................... 8,608,313 11,646,250
220,000 Marine Drilling Companies, Inc. (a).......... 4,799,513 5,018,750
495,000 Nabors Industries, Inc. (a).................. 12,277,892 17,758,125
440,000 Noble Drilling Corp. (a)..................... 10,929,580 15,840,000
220,000 Santa Fe International Corp.................. 5,669,333 6,311,250
------------ --------------
42,284,631 56,574,375
------------ --------------
PRECISION INSTRUMENTS-TEST, RESEARCH-1.22%
440,000 National Instruments Corp. (a)............... 8,531,228 19,758,750
------------ --------------
PRINTING-0.61%
165,000 Electronics for Imaging, Inc. (a)............ 6,610,949 9,796,875
------------ --------------
RETAIL-DEPARTMENT STORES-0.13%
27,300 Kohl's Corp. (a)............................. 220,458 2,069,681
------------ --------------
RETAIL-SPECIALTY-0.05%
26,800 Bed Bath & Beyond, Inc. (a).................. 1,033,853 760,450
------------ --------------
TELECOMMUNICATION EQUIPMENT-6.32%
330,000 Advanced Fibre Communications, Inc. (a)...... 10,087,586 22,481,250
275,000 CIENA Corp. (a).............................. 11,402,383 43,948,438
110,000 Digital Lightwave, Inc. (a).................. 7,649,301 9,157,500
110,000 Nextel Communications, Inc. (a).............. 4,343,625 14,994,375
82,500 QUALCOMM, Inc. (a)........................... 3,274,035 11,751,094
------------ --------------
36,756,930 102,332,657
------------ --------------
TELECOMMUNICATIONS-3.90%
468,600 Amdocs Ltd. (a).............................. 10,999,394 34,764,263
222,700 Aspect Communications Corp................... 10,271,471 14,350,231
166,800 Inet Technologies, Inc. (a).................. 6,994,608 7,234,950
113,000 Triton PCS Holdings, Inc. (a)................ 4,632,234 6,780,000
------------ --------------
32,897,707 63,129,444
------------ --------------
TELEPHONE SERVICES-0.51%
82,500 Rural Cellular Corp. (a)..................... 5,104,688 4,558,125
63,500 WatchGuard Technologies, Inc. (a)............ 3,436,938 3,746,500
------------ --------------
8,541,626 8,304,625
------------ --------------
UTILITIES-ELECTRIC-1.86%
330,000 Calpine Corp. (a)............................ 12,449,151 30,195,000
------------ --------------
TOTAL COMMON STOCKS.......................... $762,906,821 $1,547,414,025
============ ==============
</TABLE>
27
<PAGE>
FORTIS STOCK FUNDS
GROWTH FUND, INC. (CONTINUED)
Schedule of Investments
February 29, 2000 (Unaudited)
SHORT-TERM INVESTMENTS-3.79%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
- ----------- --------------
<C> <S> <C>
BANKS-0.00%
$ 32,512 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.70%........ $ 32,512
--------------
DIVERSIFIED FINANCE-1.50%
24,212,000 Norwest Bank Associates Corp., Master
Variable Rate Note, Current
rate -- 5.67%.............................. 24,212,000
--------------
INVESTMENT COMPANY-2.29%
37,108,704 Wells Fargo Cash Investment Money Market
Fund, Current rate -- 5.69%................ 37,108,704
--------------
TOTAL SHORT-TERM INVESTMENTS................. 61,353,216
--------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$824,260,037) (b).......................... $1,608,767,241
==============
</TABLE>
(a) Presently not paying dividend income.
(b) At February 29, 2000, the cost of securities for federal income tax
purposes was $825,421,923 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $800,141,810
Unrealized depreciation..................................... (16,796,492)
- --------------------------------------------------------------------------
Net unrealized appreciation $783,345,318
- --------------------------------------------------------------------------
</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 5.49% of total net assets as of February 29, 2000.
28
<PAGE>
FORTIS STOCK FUNDS
CAPITAL APPRECIATION PORTFOLIO
Schedule of Investments
February 29, 2000 (Unaudited)
COMMON STOCKS-97.94%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- --------------- ---------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS - 0.14%
62,500 Interep National Radio Sales, Inc.
Class A (a)................................ $ 760,703 $ 625,000
--------------- ---------------
AEROSPACE AND EQUIPMENT - 0.35%
40,000 Titan Corp. (a).............................. 1,595,316 1,500,000
--------------- ---------------
AIR FREIGHT - 0.32%
60,750 Forward Air Corp. (a)........................ 868,783 1,397,250
--------------- ---------------
APPAREL - 0.50%
42,700 Kenneth Cole Productions, Inc.
Class A (a)................................ 1,133,627 2,177,700
--------------- ---------------
BANKS - 1.32%
72,200 Silicon Valley Bancshares (a)................ 3,040,215 5,721,850
--------------- ---------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT - 5.12%
130,000 Bio-Technology General Corp. (a)............. 2,032,966 2,498,437
150,000 Cell Genesys, Inc. (a)....................... 2,079,375 5,831,250
75,000 Genzyme Transgenics Corp. (a) 1,651,250 3,337,500
45,000 Invitrogen Corp. (a)......................... 1,691,860 3,802,500
20,300 Protein Design Labs, Inc. (a)................ 935,573 5,078,806
13,000 Sequenom, Inc. (a)........................... 731,000 1,625,000
--------------- ---------------
9,122,024 22,173,493
--------------- ---------------
BROADCASTING - 1.77%
84,000 Citadel Communications Corp. (a)............. 3,702,971 2,845,500
60,000 Emmis Communications Corp. Class A (a)....... 1,869,510 2,190,000
40,250 Radio One, Inc. (a).......................... 1,428,651 2,646,437
--------------- ---------------
7,001,132 7,681,937
--------------- ---------------
BROKERAGE AND INVESTMENT - 0.58%
61,000 Eaton Vance Corp............................. 2,053,186 2,527,687
--------------- ---------------
BUILDING MATERIALS - 0.12%
77,000 Dal-Tile International, Inc. (a)............. 883,442 539,000
--------------- ---------------
BUSINESS SERVICES - 11.89%
31,000 C-bridge Internet Solutions, Inc. (a)........ 1,048,876 1,631,375
18,000 Caliper Technologies Corp. (a) 1,156,795 3,200,625
115,000 CCC Information Services Group, Inc. (a)..... 2,472,713 2,659,375
37,000 Cognizant Technology Solutions Corp. (a)..... 1,302,969 4,037,625
50,000 Delano Technology Corp. (a).................. 2,364,874 2,390,625
44,999 Diamond Technology Partners, Inc. (a)........ 1,151,491 3,076,807
32,500 EBENX, Inc. (a).............................. 1,209,793 1,824,062
62,500 El Sitio, Inc. (a)........................... 1,414,062 1,414,062
11,250 Lante Corporation (a)........................ 225,000 897,187
34,000 Micrel, Inc. (a)............................. 1,171,375 3,918,500
18,000 net.Genesis Corp. (a)........................ 324,000 1,022,625
200,000 Netplex Group, Inc. (a)...................... 1,590,630 2,650,000
55,000 Netro Corp. (a).............................. 2,163,817 2,344,375
24,850 OnDisplay, Inc. (a).......................... 1,556,660 2,236,500
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- --------------- ---------------
<C> <S> <C> <C>
65,000 Optimal Robotics Corp. (a)................... $ 2,328,387 $ 2,396,875
21,800 Preview Systems, Inc. (a).................... 908,050 1,155,400
69,000 Proxicom, Inc. (a)........................... 2,281,937 2,889,375
40,000 Reckson Service Industries, Inc. (a)......... 1,735,376 2,152,500
50,000 SkillSoft Corp. (a).......................... 763,404 890,625
57,000 Student Advantage, Inc. (a).................. 823,562 883,500
25,000 Tanning Technology Corp. (a)................. 1,251,962 1,078,125
35,000 Tumbleweed Communications Corp. (a).......... 2,693,222 2,660,000
55,000 Visual Networks, Inc. (a).................... 3,251,092 3,616,250
13,950 Witness Systems, Inc. (a).................... 279,000 512,662
--------------- ---------------
35,469,047 51,539,055
--------------- ---------------
CHEMICALS-SPECIALTY - 0.33%
177,000 U.S. Plastic Lumber Co. (a).................. 1,802,851 1,416,000
--------------- ---------------
COMPUTER-COMMUNICATION EQUIPMENT - 1.09%
29,500 Newport Corp................................. 1,658,273 4,720,000
--------------- ---------------
COMPUTER-HARDWARE - 2.64%
48,000 Advanced Digital Information Corp. (a)....... 997,495 4,350,000
68,000 Mercury Computer Systems, Inc. (a)........... 1,001,876 3,276,750
67,000 SmartDisk Corp. (a).......................... 2,433,045 3,810,625
--------------- ---------------
4,432,416 11,437,375
--------------- ---------------
COMPUTER-SOFTWARE - 22.47%
21,000 Active Software, Inc. (a).................... 524,951 2,205,000
56,000 Actuate Corp. (a)............................ 1,623,572 3,493,000
150,000 American Software, Inc. (a).................. 1,548,333 2,156,250
54,600 AppNet, Inc. (a)............................. 2,743,282 2,450,175
36,700 Art Technology Group, Inc. (a)............... 1,996,079 5,303,150
50,000 Backweb Technologies Ltd. (a) 1,921,796 1,875,000
45,000 BindView Development Corp. (a)............... 1,760,625 1,518,750
32,000 Broadbase Software, Inc. (a)................. 728,085 4,846,000
44,000 Business Objects S.A. ADR (a) 717,193 5,054,500
4,800 Chordiant Software, Inc. (a)................. 86,400 168,000
30,000 Cysive, Inc. (a)............................. 510,000 3,210,000
54,100 FirePond, Inc. (a)........................... 3,893,725 5,271,369
180,000 Information Architects Corp. (a) 2,908,647 3,870,000
50,000 IONA Technologies plc ADR (a) 3,543,330 4,237,500
19,000 Keynote Systems, Inc. (a).................... 677,000 3,111,250
86,500 Lifeminders.com, Inc. (a).................... 2,725,622 4,595,312
65,000 Macrovision Corp. (a)........................ 1,653,437 6,483,750
68,000 Mercury Interactive Corp. (a)................ 596,420 6,553,500
48,000 Micromuse, Inc. (a).......................... 1,312,031 6,807,000
40,000 Mission Critical Software, Inc. (a).......... 2,514,073 2,450,000
41,500 Netegrity, Inc. (a).......................... 1,823,595 3,548,250
5,100 Niku Corp. (a)............................... 122,400 351,900
110,000 Open Market, Inc. (a)........................ 2,010,188 5,513,750
15,100 webMethods, Inc. (a)......................... 3,062,765 4,651,744
50,300 WebTrends Corp. (a).......................... 2,651,155 4,778,500
50,000 Wind River Systems, Inc. (a)................. 1,815,155 2,903,125
--------------- ---------------
45,469,859 97,406,775
--------------- ---------------
</TABLE>
29
<PAGE>
FORTIS STOCK FUNDS
CAPITAL APPRECIATION PORTFOLIO (CONTINUED)
Schedule of Investments
February 29, 2000 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- --------------- ---------------
<C> <S> <C> <C>
DRUGS - 4.80%
75,000 Accredo Health, Inc. (a)..................... $ 939,062 $ 2,212,500
60,000 Cephalon, Inc. (a)........................... 996,426 3,988,125
60,000 Dusa Pharmaceuticals, Inc. (a) 1,393,046 2,148,750
53,000 Jones Pharma, Inc............................ 1,383,120 3,802,750
140,000 Noven Pharmaceuticals, Inc. (a) 2,056,015 2,021,250
50,200 Pharmacyclics, Inc. (a)...................... 1,629,781 4,006,587
55,000 Priority Healthcare Corp. Class B (a)........ 2,603,189 2,640,000
--------------- ---------------
11,000,639 20,819,962
--------------- ---------------
EDUCATIONAL SERVICES - 1.05%
59,500 Career Education Corp. (a)................... 1,564,154 2,231,250
44,000 National Information Consortium, Inc. (a).... 528,000 2,304,500
--------------- ---------------
2,092,154 4,535,750
--------------- ---------------
ELECTRONIC-COMPONENTS - 3.55%
56,000 Electro Scientific Industries, Inc. (a)...... 1,696,062 3,174,500
29,000 Emulex Corp. (a)............................. 536,651 4,640,000
52,500 Silicon Image, Inc. (a)...................... 3,164,532 5,145,000
12,550 Turnstone Systems, Inc. (a).................. 1,764,209 2,410,384
--------------- ---------------
7,161,454 15,369,884
--------------- ---------------
ELECTRONIC-CONTROLS AND EQUIPMENT - 1.96%
114,100 C-COR.net Corp. (a).......................... 3,757,072 5,102,409
25,500 Credence Systems Corp. (a)................... 1,237,813 3,397,875
--------------- ---------------
4,994,885 8,500,284
--------------- ---------------
ELECTRONIC-DEFENSE - 0.52%
50,000 Aeroflex, Inc. (a)........................... 1,431,301 2,275,000
--------------- ---------------
ELECTRONIC-SEMICONDUCTOR - 10.98%
85,000 Actel Corp. (a).............................. 2,553,713 2,767,813
37,150 Alpha Industries, Inc. (a)................... 820,405 5,393,716
17,000 Applied Micro Circuits Corp. (a) 318,351 4,676,063
69,000 Exar Corp. (a)............................... 2,041,090 4,791,188
180,000 General Semiconductor, Inc................... 3,291,935 3,003,750
52,000 Kopin Corp. (a).............................. 862,285 3,854,500
22,750 Quantum Effect Devices, Inc. (a)............. 1,420,854 2,192,531
56,000 Sandisk Corp. (a)............................ 1,904,000 4,984,000
59,000 TranSwitch Corp. (a)......................... 1,656,624 6,932,500
52,400 TriQuint Semiconductor, Inc. (a) 657,269 6,222,500
112,500 Xicor, Inc. (a).............................. 1,572,732 2,756,250
--------------- ---------------
17,099,258 47,574,811
--------------- ---------------
FINANCIAL SERVICES - 2.59%
23,000 724 Solutions, Inc. (a)...................... 2,530,150 4,329,750
94,000 American Capital Strategies Ltd.............. 1,713,041 2,256,000
80,000 IndyMac Mortgage Holdings, Inc............... 1,236,800 1,015,000
50,000 Multex.com, Inc. (a)......................... 1,180,042 1,525,000
100,000 SierraCites.com, Inc. (a).................... 1,993,906 2,112,500
--------------- ---------------
8,653,939 11,238,250
--------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- --------------- ---------------
<C> <S> <C> <C>
HEALTH CARE SERVICES - 2.09%
51,000 Hooper Holmes, Inc........................... $ 1,080,435 $ 1,568,250
46,000 Medarex, Inc. (a)............................ 843,783 7,475,000
--------------- ---------------
1,924,218 9,043,250
--------------- ---------------
MACHINERY - 2.14%
55,500 Advanced Energy Industries, Inc. (a)......... 2,119,234 4,037,625
59,000 Asyst Technologies, Inc. (a)................. 1,129,777 2,706,625
39,250 Photon Dynamics, Inc. (a).................... 2,194,750 2,551,250
--------------- ---------------
5,443,761 9,295,500
--------------- ---------------
MEDICAL SUPPLIES - 3.30%
17,200 Abgenix, Inc. (a)............................ 396,700 5,540,550
38,400 Biosite Diagnostics, Inc. (a)................ 1,258,264 1,344,000
45,000 INAMED Corp. (a)............................. 1,610,500 1,704,375
123,500 PolyMedica Corp. (a)......................... 2,464,477 5,719,594
--------------- ---------------
5,729,941 14,308,519
--------------- ---------------
MEDICAL TECHNOLOGY - 1.92%
67,500 ArthoCare Corp. (a).......................... 2,693,092 8,336,250
--------------- ---------------
OIL AND GAS FIELD SERVICES - 0.78%
33,500 Hanover Compressor Co. (a)................... 1,181,823 1,572,406
180,000 Key Energy Services, Inc. (a)................ 1,529,424 1,788,750
--------------- ---------------
2,711,247 3,361,156
--------------- ---------------
OIL-OFFSHORE DRILLING - 0.34%
100,000 Pride International, Inc. (a)................ 1,747,318 1,481,250
--------------- ---------------
PRINTING - 0.69%
123,800 ImageX.com, Inc. (a)......................... 2,847,400 2,986,675
--------------- ---------------
RETAIL-CLOTHING - 0.51%
82,500 Charlotte Russe Holding, Inc. (a)............ 1,051,381 969,375
52,500 Too, Inc. (a)................................ 893,463 1,260,000
--------------- ---------------
1,944,844 2,229,375
--------------- ---------------
RETAIL-MISCELLANEOUS - 0.23%
26,000 Zale Corp. (a)............................... 995,813 978,250
--------------- ---------------
RETAIL-SPECIALTY - 0.66%
40,000 Neoforma.com, Inc. (a)....................... 1,852,814 2,380,000
67,500 Pets.com, Inc. (a)........................... 742,500 472,500
--------------- ---------------
2,595,314 2,852,500
--------------- ---------------
TELECOMMUNICATION EQUIPMENT - 4.29%
67,500 Advanced Fibre Communications, Inc. (a)...... 1,768,732 4,598,438
46,600 AudioCodes Ltd. (a).......................... 2,563,667 3,599,850
29,600 Clarent Corp. (a)............................ 1,997,472 3,233,800
62,500 CommScope, Inc. (a).......................... 1,446,537 2,433,594
23,700 Digital Lightwave, Inc. (a).................. 1,345,034 1,973,025
80,000 Westell Technologies, Inc., Class A (a)...... 2,167,472 2,740,000
--------------- ---------------
11,288,914 18,578,707
--------------- ---------------
TELECOMMUNICATIONS - 4.12%
11,300 Apropos Technology, Inc. (a)................. 248,600 540,988
2,500 Avanex Corp. (a)............................. 90,000 520,938
</TABLE>
30
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- --------------- ---------------
<C> <S> <C> <C>
40,000 ECtel Ltd. (a)............................... $ 494,282 $ 1,360,000
29,000 Ibasis, Inc. (a)............................. 464,000 2,334,500
43,500 MCK Communications, Inc. (a) 899,094 3,148,313
37,500 Net2Phone, Inc. (a).......................... 2,062,500 2,170,313
25,500 Polycom, Inc. (a)............................ 1,011,101 2,965,969
30,000 Powerwave Technologies, Inc. (a)............. 2,041,356 4,796,250
--------------- ---------------
7,310,933 17,837,271
--------------- ---------------
TELEPHONE SERVICES - 0.78%
57,500 WatchGuard Technologies, Inc. (a)............ 2,964,651 3,392,500
--------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- --------------- ---------------
<C> <S> <C> <C>
TOYS - 0.91%
238,500 Jakks Pacific, Inc. (a)...................... $ 4,507,659 $ 3,935,250
--------------- ---------------
UTILITIES-ELECTRIC - 1.09%
17,000 Calpine Corp. (a)............................ 684,043 1,555,500
62,900 Independent Energy Holdings plc ADR (a)...... 1,656,390 3,148,931
--------------- ---------------
2,340,433 4,704,431
--------------- ---------------
TOTAL COMMON STOCKS.......................... $ 224,770,042 $ 424,497,947
=============== ===============
</TABLE>
SHORT-TERM INVESTMENTS - 2.69%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
----------- ---------------
<C> <S> <C>
BANKS - 0.00%
$ 4,876 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate - 5.70%......... $ 4,876
---------------
INVESTMENT COMPANY - 2.69%
11,656,047 Wells Fargo Cash Investment Money Market
Fund, Current rate - 5.69%................. 11,656,047
---------------
TOTAL SHORT-TERM INVESTMENTS................. 11,660,923
---------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$236,430,965)(b)........................... $ 436,158,870
===============
</TABLE>
(a) Presently not paying dividend income.
(b) At February 29, 2000, the cost of securities for federal income tax
purposes was $237,092,867 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $205,105,194
Unrealized depreciation..................................... (6,039,191)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $199,066,003
- --------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets. Market value of investments in foreign
securities represents 2.87 % of total net assets as of February 29, 2000.
31
<PAGE>
FORTIS STOCK FUNDS
Statements of Assets and Liabilities
(Unaudited)
February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
ASSET
ALLOCATION
PORTFOLIO
------------
<S> <C>
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market (cost $232,688,762;
$51,135,638; $36,393,712;
$545,629,549; $824,260,037; and
$236,430,965 respectively)
(Note 1)............................ $287,005,099
Collateral for securities lending
transactions (Note 1)............... 51,015,049
Receivables:
Investment securities sold.......... 570,144
Interest and dividends.............. 1,814,958
Subscriptions of capital stock...... 43,056
Deferred registration costs
(Note 1)............................ 50,326
Prepaid expenses...................... 10,150
------------
TOTAL ASSETS............................ 340,508,782
------------
LIABILITIES:
Payable upon return of securities
loaned (Note 1)..................... 51,015,049
Payable for investment securities
purchased........................... --
Redemptions of capital stock.......... 66,373
Payable for investment advisory and
management fees (Note 2)............ 191,686
Payable for distribution fees
(Note 2)............................ 4,673
Accounts payable and accrued
expenses............................ 36,502
------------
TOTAL LIABILITIES....................... 51,314,283
------------
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................ 223,856,439
Unrealized appreciation (depreciation)
of investments...................... 54,316,337
Undistributed net investment income
(loss).............................. 749,046
Accumulated net realized gain (loss)
from the sale of investments........ 10,272,677
------------
TOTAL NET ASSETS........................ $289,194,499
============
SHARES OUTSTANDING AND NET ASSET VALUE
PER SHARE:
Class A shares (based on net assets of
$208,556,026; $33,690,763;
$25,297,556; $673,860,874;
$1,244,168,970; and $337,961,630;
respectively and 10,987,635;
2,856,101; 1,592,040; 27,503,579;
27,017,883; and, 4,959,573 shares
outstanding; respectively)............ $18.98
------------
Class B shares (based on net assets of
$23,043,109; $6,353,071; $7,542,340;
$36,552,526; $38,456,624; and
$32,005,920; respectively and
1,224,258; 550,424; 476,818;
1,591,197; 893,822; and, 490,972
shares outstanding; respectively)..... $18.82
------------
Class C shares (based on net assets of
$14,072,816; $2,297,721; $2,576,557;
$10,429,860; $9,357,222; and
$11,476,200; respectively and 751,274;
198,968; 162,892; 454,023; 217,437;
and, 175,856 shares outstanding;
respectively)......................... $18.73
------------
Class H shares (based on net assets of
$41,743,056; $7,485,423; $7,067,148;
$56,614,925; $94,629,825; and
$51,990,572; respectively and
2,219,310; 648,154; 446,822;
2,462,246; 2,197,314; and, 796,775
shares outstanding; respectively)..... $18.81
------------
Class Z shares (based on net assets of
$1,779,492; $0; $0; $0; $233,135,991;
and $0; respectively and 93,729; 0; 0;
0; 4,971,059; and, 0 shares
outstanding; respectively)............ $18.99
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
GROWTH & CAPITAL
VALUE INCOME CAPITAL GROWTH APPRECIATION
FUND FUND FUND FUND PORTFOLIO
----------- ----------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market (cost $232,688,762;
$51,135,638; $36,393,712;
$545,629,549; $824,260,037; and
$236,430,965 respectively)
(Note 1).............................. $51,022,982 $43,020,427 $775,022,927 $1,608,767,241 $436,158,870
Collateral for securities lending
transactions (Note 1)................. 9,451,705 3,477,633 149,829,023 -- 93,055,573
Receivables:
Investment securities sold............ 1,896,160 96,606 2,478,099 25,714,059 4,872,265
Interest and dividends................ 86,496 90,031 464,568 342,190 52,955
Subscriptions of capital stock........ -- -- -- 61,993 202,151
Deferred registration costs (Note 1).... 28,746 25,926 92,121 77,660 33,313
Prepaid expenses........................ 3,330 3,794 13,071 19,437 4,385
----------- ----------- ------------ -------------- ------------
TOTAL ASSETS............................ 62,489,419 46,714,417 927,899,809 1,634,982,580 534,379,512
----------- ----------- ------------ -------------- ------------
LIABILITIES:
Payable upon return of securities
loaned (Note 1)..................... 9,451,705 3,477,633 149,829,023 -- 93,055,573
Payable for investment securities
purchased........................... 3,093,704 700,000 -- 13,902,770 7,348,221
Redemptions of capital stock.......... 38,801 4,054 96,892 199,603 273,612
Payable for investment advisory and
management fees (Note 2)............ 40,769 33,555 446,400 837,205 242,359
Payable for distribution fees
(Note 2)............................ 656 631 7,257 11,965 6,383
Accounts payable and accrued
expenses............................ 36,806 14,943 62,052 282,405 19,042
----------- ----------- ------------ -------------- ------------
TOTAL LIABILITIES....................... 12,662,441 4,230,816 150,441,624 15,233,948 100,945,190
----------- ----------- ------------ -------------- ------------
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................ 52,339,621 33,641,187 487,101,217 692,408,280 148,753,139
Unrealized appreciation (depreciation)
of investments...................... (188,156) 6,626,715 229,393,378 784,507,204 199,727,905
Undistributed net investment income
(loss).............................. (45,936) 34,332 (1,125,005) (3,466,038) (1,384,923)
Accumulated net realized gain (loss)
from the sale of investments........ (2,278,551) 2,181,367 62,088,595 146,299,186 86,338,201
----------- ----------- ------------ -------------- ------------
TOTAL NET ASSETS........................ $49,826,978 $42,483,601 $777,458,185 $1,619,748,632 $433,434,322
=========== =========== ============ ============== ============
SHARES OUTSTANDING AND NET ASSET VALUE
PER SHARE:
Class A shares (based on net assets of
$208,556,026; $33,690,763;
$25,297,556; $673,860,874;
$1,244,168,970; and $337,961,630;
respectively and 10,987,635;
2,856,101; 1,592,040; 27,503,579;
27,017,883; and, 4,959,573 shares
outstanding; respectively)............ $11.80 $15.89 $24.50 $46.05 $68.14
----------- ----------- ------------ -------------- ------------
Class B shares (based on net assets of
$23,043,109; $6,353,071; $7,542,340;
$36,552,526; $38,456,624; and
$32,005,920; respectively and
1,224,258; 550,424; 476,818;
1,591,197; 893,822; and, 490,972
shares outstanding; respectively)..... $11.54 $15.82 $22.97 $43.02 $65.19
----------- ----------- ------------ -------------- ------------
Class C shares (based on net assets of
$14,072,816; $2,297,721; $2,576,557;
$10,429,860; $9,357,222; and
$11,476,200; respectively and 751,274;
198,968; 162,892; 454,023; 217,437;
and, 175,856 shares outstanding;
respectively)......................... $11.55 $15.82 $22.97 $43.03 $65.26
----------- ----------- ------------ -------------- ------------
Class H shares (based on net assets of
$41,743,056; $7,485,423; $7,067,148;
$56,614,925; $94,629,825; and
$51,990,572; respectively and
2,219,310; 648,154; 446,822;
2,462,246; 2,197,314; and, 796,775
shares outstanding; respectively)..... $11.55 $15.82 $22.99 $43.07 $65.25
----------- ----------- ------------ -------------- ------------
Class Z shares (based on net assets of
$1,779,492; $0; $0; $0; $233,135,991;
and $0; respectively and 93,729; 0; 0;
0; 4,971,059; and, 0 shares
outstanding; respectively)............ -- -- -- $46.90 --
----------- ----------- ------------ -------------- ------------
</TABLE>
33
<PAGE>
FORTIS STOCK FUNDS
Statements of Operations
(Unaudited)
For The Six-Month Period Ended February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
ASSET
ALLOCATION
PORTFOLIO
-----------
<S> <C>
NET INVESTMENT INCOME:
Income:
Interest income..................... $ 3,756,489
Dividend income..................... 527,934
Fee income (Note 1)................. 24,353
-----------
Total income.......................... 4,308,776
-----------
Expenses:
Investment advisory and management
fees (Note 2)...................... 1,125,061
Distribution fees (Class A)
(Note 2)........................... 424,613
Distribution fees (Class B)
(Note 2)........................... 97,568
Distribution fees (Class C)
(Note 2)........................... 58,732
Distribution fees (Class H)
(Note 2)........................... 183,729
Registration fees................... 24,615
Shareholders' notices and reports... 17,406
Legal and auditing fees (Note 2).... 15,416
Custodian fees...................... 17,404
Directors' fees and expenses........ 6,116
Other............................... 6,340
-----------
Total expenses........................ 1,977,000
-----------
NET INVESTMENT GAIN (LOSS).............. 2,331,776
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 1):
NET REALIZED GAIN (LOSS) FROM:
Net realized gain (loss) from
security transactions.............. 10,623,329
Future contracts.................... --
-----------
NET REALIZED GAIN (LOSS) ON
INVESTMENTS........................... 10,623,329
-----------
Net change in unrealized appreciation
(depreciation) of investments in
securities............................ 39,438,172
-----------
NET GAIN (LOSS) ON INVESTMENTS.......... 50,061,501
===========
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $52,393,277
===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
GROWTH & CAPITAL
VALUE INCOME CAPITAL GROWTH APPRECIATION
FUND FUND FUND FUND PORTFOLIO
----------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income....................... $ 98,925 $ 96,917 $ 602,978 $ 1,806,887 $ 330,353
Dividend income....................... 310,477 346,273 2,065,666 838,281 110,988
Fee income (Note 1)................... 5,087 4,287 85,017 -- 113,355
----------- ---------- ------------ ------------ ------------
Total income............................ 414,489 447,477 2,753,661 2,645,168 554,696
----------- ---------- ------------ ------------ ------------
Expenses:
Investment advisory and management
fees (Note 2)....................... 267,676 213,945 2,570,500 4,178,989 1,135,073
Distribution fees (Class A)
(Note 2)............................ 45,643 32,135 733,267 1,118,431 470,186
Distribution fees (Class B)
(Note 2)............................ 33,232 36,982 145,550 128,836 87,771
Distribution fees (Class C)
(Note 2)............................ 12,279 12,707 39,697 30,165 30,004
Distribution fees (Class H)
(Note 2)............................ 39,592 35,715 233,562 320,430 152,001
Registration fees..................... 21,863 22,178 35,216 35,296 22,128
Shareholders' notices and reports..... 5,941 4,128 42,268 181,512 10,940
Legal and auditing fees (Note 2)...... 13,341 7,459 24,254 43,856 11,027
Custodian fees........................ 16,049 4,973 19,891 24,014 11,934
Directors' fees and expenses.......... 1,521 895 15,564 17,025 3,631
Other................................. 3,288 1,420 18,897 32,652 4,924
----------- ---------- ------------ ------------ ------------
Total expenses.......................... 460,425 372,537 3,878,666 6,111,206 1,939,619
----------- ---------- ------------ ------------ ------------
NET INVESTMENT GAIN (LOSS).............. (45,936) 74,940 (1,125,005) (3,466,038) (1,384,923)
----------- ---------- ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 1):
NET REALIZED GAIN (LOSS) FROM:
Net realized gain (loss) from
security transactions.............. (1,973,973) 2,186,094 62,691,832 147,011,216 89,692,967
Future contracts.................... (156,400) -- -- -- --
----------- ---------- ------------ ------------ ------------
NET REALIZED GAIN (LOSS) ON
INVESTMENTS........................... (2,130,373) 2,186,094 62,691,832 147,011,216 89,692,967
----------- ---------- ------------ ------------ ------------
Net change in unrealized appreciation
(depreciation) of investments in
securities............................ (664,425) 1,524,197 150,996,438 605,592,691 169,140,957
----------- ---------- ------------ ------------ ------------
NET GAIN (LOSS) ON INVESTMENTS.......... (2,794,798) 3,710,291 213,688,270 752,603,907 258,833,924
=========== ========== ============ ============ ============
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. ($2,840,734) $3,785,231 $212,563,265 $749,137,869 $257,449,001
=========== ========== ============ ============ ============
</TABLE>
35
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
ASSET ALLOCATION PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
SIX-MONTH PERIOD
ENDED FOR THE
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income................. $ 2,331,776 $ 3,351,119
Net realized gain from security
transactions........................ 10,623,329 39,010,869
Net change in unrealized appreciation
on investments in securities........ 39,438,172 694,492
------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 52,393,277 43,056,480
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A............................. (1,851,929) (2,706,452)
Class B............................. (139,474) (134,831)
Class C............................. (83,614) (80,197)
Class H............................. (265,616) (295,334)
Class Z............................. (12,320) --
From net realized gains on investments
Class A............................. (28,765,859) (17,281,875)
Class B............................. (2,995,056) (1,236,960)
Class C............................. (1,826,170) (718,270)
Class H............................. (5,604,580) (2,773,052)
Class Z............................. (166,650) --
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (41,711,268) (25,226,971)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (765,715 and 1,577,016
shares)............................ 14,193,131 29,377,979
Class B (198,073 and 399,109
shares)............................ 3,617,581 7,397,117
Class C (153,986 and 279,948
shares)............................ 2,824,840 5,089,730
Class H (314,889 and 668,742
shares)............................ 5,775,661 12,347,244
Class Z (50,630 and 44,279
shares)............................ 918,189 825,685
Proceeds from shares issued as a
result of reinvested dividends
Class A (1,666,749 and 1,057,067
shares)............................ 29,104,057 18,789,494
Class B (176,940 and 75,874
shares)............................ 3,065,223 1,338,956
Class C (108,568 and 44,382
shares)............................ 1,870,965 780,177
Class H (329,042 and 168,973
shares)............................ 5,697,077 2,980,951
Class Z (10,252 and 0 shares)....... 178,941 --
Less cost of repurchase of shares
Class A (1,091,313 and 1,971,301
shares)............................ (20,343,025) (36,665,720)
Class B (102,082 and 114,596
shares)............................ (1,872,963) (2,123,372)
Class C (74,315 and 103,696
shares)............................ (1,367,117) (1,910,835)
Class H (294,768 and 335,905
shares)............................ (5,425,504) (6,230,286)
Class Z (11,432 and 0 shares)....... (209,493) --
------------ ------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.......................... 38,027,563 31,997,120
------------ ------------
TOTAL INCREASE IN NET ASSETS............ 48,709,572 49,826,629
NET ASSETS:
Beginning of period................... 240,484,927 190,658,298
------------ ------------
End of period (includes undistributed
net investment income of $749,046
and $770,223, respectively)......... $289,194,499 $240,484,927
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
SIX-MONTH PERIOD
ENDED FOR THE
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ (45,936) $ 22,715
Net realized gain (loss) from security
transactions........................ (2,130,373) 4,641,417
Net change in unrealized appreciation
(depreciation) of investments in
securities.......................... (664,425) 3,785,706
------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. (2,840,734) 8,449,838
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A............................. -- (90,265)
From net realized gains on investments
Class A............................. (2,711,104) (2,398,431)
Class B............................. (474,656) (554,270)
Class C............................. (173,230) (228,122)
Class H............................. (558,446) (753,192)
------------ -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (3,917,436) (4,024,280)
------------ -----------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (1,741,091 and 1,189,789
shares)............................ 22,482,713 15,808,648
Class B (68,401 and 148,047
shares)............................ 857,455 1,931,875
Class C (24,488 and 59,026
shares)............................ 308,315 769,872
Class H (96,331 and 134,878
shares)............................ 1,219,104 1,761,525
Proceeds from shares issued as a
result of reinvested dividends
Class A (166,036 and 189,376
shares)............................ 2,047,218 2,382,340
Class B (37,988 and 43,123
shares)............................ 459,278 536,455
Class C (14,271 and 17,988
shares)............................ 172,532 223,950
Class H (45,844 and 59,339
shares)............................ 553,178 738,771
Less cost of repurchase of shares
Class A (1,634,404 and 690,036
shares)............................ (20,418,229) (9,083,209)
Class B (65,944 and 90,451
shares)............................ (830,936) (1,189,002)
Class C (30,042 and 56,624
shares)............................ (377,588) (743,072)
Class H (109,516 and 177,439
shares)............................ (1,383,824) (2,317,578)
------------ -----------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.......................... 5,089,216 10,820,575
------------ -----------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ (1,668,954) 15,246,133
NET ASSETS:
Beginning of period................... 51,495,932 36,249,799
------------ -----------
End of period (includes undistributed
net investment loss of $45,936 and
$0, respectively)................... $ 49,826,978 $51,495,932
============ ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
GROWTH & INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
SIX-MONTH PERIOD
ENDED FOR THE
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income................. $ 74,940 $ 372,261
Net realized gain from security
transactions........................ 2,186,094 697,531
Net change in unrealized appreciation
of investments in securities........ 1,524,197 4,739,460
----------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 3,785,231 5,809,252
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A............................. (116,466) (303,045)
Class B............................. (4,375) (41,733)
Class C............................. (1,481) (17,399)
Class H............................. (4,322) (49,939)
From net realized gains on investments
Class A............................. (415,026) (643,674)
Class B............................. (121,703) (159,781)
Class C............................. (42,036) (67,580)
Class H............................. (116,303) (193,318)
----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (821,712) (1,476,469)
----------- -----------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (180,464 and 566,946
shares)............................ 2,776,809 8,501,033
Class B (49,458 and 161,596
shares)............................ 762,717 2,427,125
Class C (17,562 and 48,678
shares)............................ 265,771 718,618
Class H (64,424 and 159,572
shares)............................ 995,491 2,374,853
Proceeds from shares issued as a
result of reinvested dividends
Class A (33,519 and 63,617
shares)............................ 518,878 919,640
Class B (7,959 and 13,800 shares)... 124,360 198,917
Class C (2,729 and 5,772 shares).... 42,638 83,171
Class H (7,390 and 16,192 shares)... 115,456 233,312
Less cost of repurchase of shares
Class A (381,328 and 462,252
shares)............................ (5,884,328) (6,967,771)
Class B (66,047 and 81,905
shares)............................ (1,022,553) (1,227,313)
Class C (22,975 and 57,345
shares)............................ (353,564) (853,460)
Class H (115,729 and 164,161
shares)............................ (1,779,395) (2,458,927)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARE TRANSACTIONS............... (3,437,720) 3,949,198
----------- -----------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ (474,201) 8,281,981
NET ASSETS:
Beginning of period................... 42,957,802 34,675,821
----------- -----------
End of period (includes undistributed
net investment income of $74,940 and
$86,036, respectively).............. $42,483,601 $42,957,802
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
CAPITAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
SIX-MONTH PERIOD
ENDED FOR THE
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment loss................... $ (1,125,005) $ (902,629)
Net realized gain from security
transactions........................ 62,691,832 146,221,226
Net change in unrealized appreciation
of investments in securities........ 150,996,438 5,652,886
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 212,563,265 150,971,483
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments
Class A............................. (127,577,588) (87,040,747)
Class B............................. (6,183,888) (2,796,230)
Class C............................. (1,747,331) (665,336)
Class H............................. (10,003,220) (5,017,579)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (145,512,027) (95,519,892)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (2,161,208 and 10,587,633
shares)............................ 48,858,563 236,382,465
Class B (243,697 and 389,224
shares)............................ 5,127,698 8,333,221
Class C (129,975 and 90,310
shares)............................ 2,762,887 1,911,035
Class H (327,856 and 632,945
shares)............................ 6,927,586 13,448,386
Proceeds from shares issued as a
result of reinvested dividends
Class A (5,519,764 and 4,497,809
shares)............................ 109,728,803 79,971,053
Class B (328,865 and 159,215
shares)............................ 6,143,029 2,718,124
Class C (93,006 and 38,657
shares)............................ 1,737,350 659,875
Class H (525,945 and 280,596
shares)............................ 9,835,175 4,792,688
Less cost of repurchase of shares
Class A (4,352,570 and 9,187,334
shares)............................ (94,576,722) (203,714,963)
Class B (122,969 and 134,973
shares)............................ (2,632,607) (2,875,169)
Class C (31,557 and 62,180
shares)............................ (668,944) (1,330,943)
Class H (262,961 and 410,031
shares)............................ (5,707,882) (8,719,318)
Issuance of shares in connection with
fund merger (Note 3)
Class A (0 and 4,303,728 shares).... -- 77,701,653
Class B (0 and 298,388 shares)...... -- 5,171,124
Class C (0 and 82,934 shares)....... -- 1,437,049
Class H (0 and 586,642 shares)...... -- 10,173,846
-------------- --------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.......................... 87,534,936 226,060,126
-------------- --------------
TOTAL INCREASE IN NET ASSETS............ 154,586,174 281,511,717
NET ASSETS:
Beginning of period................... 622,872,011 341,360,294
-------------- --------------
End of period (includes undistributed
net investment loss of $1,125,005
and $0, respectively)............... $ 777,458,185 $ 622,872,011
============== ==============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
SIX-MONTH PERIOD
ENDED FOR THE
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment loss................... $ (3,466,038) $ (4,091,361)
Net realized gain from security
transactions........................ 147,011,216 246,700,072
Net change in unrealized appreciation
of investments in securities........ 605,592,691 43,202,949
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 749,137,869 285,811,660
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From realized gains on investments
Class A............................. (161,513,241) (184,308,860)
Class B............................. (4,773,550) (4,328,601)
Class C............................. (1,113,135) (982,671)
Class H............................. (11,827,495) (11,797,065)
Class Z............................. (23,575,253) (29,609,385)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (202,802,674) (231,026,582)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (1,127,685 and 20,454,621
shares)............................ 38,885,460 608,315,710
Class B (97,348 and 195,729
shares)............................ 3,253,756 5,568,918
Class C (47,039 and 51,195
shares)............................ 1,557,180 1,488,735
Class H (218,190 and 446,438
shares)............................ 7,083,804 12,868,880
Class Z (1,008,107 and 573,572
shares)............................ 39,631,519 17,237,982
Proceeds from shares issued as a
result of reinvested dividends
Class A (5,122,579 and 6,493,303
shares)............................ 149,988,546 175,708,779
Class B (171,269 and 165,721
shares)............................ 4,696,198 4,282,243
Class C (40,027 and 37,976
shares)............................ 1,097,537 981,304
Class H (425,728 and 452,647
shares)............................ 11,681,919 11,705,442
Class Z (763,543 and 1,045,590
shares)............................ 22,753,587 28,628,247
Less cost of repurchase of shares
Class A (3,069,135 and 22,649,562
shares)............................ (107,074,039) (675,171,668)
Class B (66,319 and 100,305
shares)............................ (2,160,489) (2,869,629)
Class C (27,832 and 25,873
shares)............................ (884,845) (742,673)
Class H (172,742 and 366,624
shares)............................ (5,568,333) (10,603,511)
Class Z (628,840 and 970,240
shares)............................ (20,770,269) (29,737,905)
-------------- --------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.......................... 144,171,531 147,660,854
-------------- --------------
TOTAL INCREASE IN NET ASSETS............ 690,506,726 202,445,932
NET ASSETS:
Beginning of period................... 929,241,906 726,795,974
-------------- --------------
End of period (includes undistributed
net investment loss of $3,466,038
and $0, respectively)............... $1,619,748,632 $ 929,241,906
============== ==============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
CAPITAL APPRECIATION PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
SIX-MONTH PERIOD
ENDED FOR THE
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment loss................... $ (1,384,923) $ (1,697,696)
Net realized gain from security
transactions........................ 89,692,967 64,284,638
Net change in unrealized appreciation
of investments in securities........ 169,140,957 20,500,923
------------ --------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 257,449,001 83,087,865
------------ --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From realized gains on investments
Class A............................. (43,909,226) (25,279,675)
Class B............................. (3,479,912) (1,974,092)
Class C............................. (1,168,264) (717,375)
Class H............................. (6,297,240) (3,822,075)
------------ --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (54,854,642) (31,793,217)
------------ --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (852,567 and 4,148,860
shares)............................ 38,908,741 120,742,519
Class B (113,994 and 94,645
shares)............................ 5,167,271 2,801,141
Class C (104,596 and 464,149
shares)............................ 4,382,607 13,807,732
Class H (103,813 and 156,855
shares)............................ 4,655,325 4,661,652
Proceeds from shares issued as a
result of reinvested dividends
Class A (1,155,806 shares).......... 42,602,666 24,709,211
Class B (97,444 shares)............. 3,440,408 1,953,810
Class C (33,019 shares)............. 1,167,213 712,165
Class H (174,088 shares)............ 6,154,015 3,796,302
Less cost of repurchase of shares
Class A (1,136,806 and 4,016,217
shares)............................ (50,836,689) (119,898,749)
Class B (47,792 and 69,099
shares)............................ (2,101,595) (2,024,359)
Class C (65,129 and 457,661
shares)............................ (2,568,226) (13,737,717)
Class H (75,143 and 170,725
shares)............................ (3,269,679) (5,069,238)
------------ --------------
NET INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS.......................... 47,702,057 32,454,469
------------ --------------
TOTAL INCREASE IN NET ASSETS............ 250,296,416 83,749,117
NET ASSETS:
Beginning of period................... 183,137,906 99,388,789
------------ --------------
End of period (includes undistributed
net investment loss of $1,384,923
and $0, respectively)............... $433,434,322 $ 183,137,906
============ ==============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
41
<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. Fortis Growth Fund
and Advantage Asset Allocation also issue Class Z shares.
Class A shares are sold with a front-end sales charge. Class B and H shares
are sold without a front-end sales charge and may be subject to a contingent
deferred sales charge for six years, and such shares automatically convert to
Class A after eight years. Class C shares are sold without a front-end sales
charge and may be subject to contingent deferred sales charge for one year.
Class Z shares are sold without a front-end sales charge or a contingent
deferred sales charge and have no distribution fees. All classes of shares
have identical voting, dividend, liquidation and other rights and the same
terms and conditions, except that the level of distribution fees charged
differs between classes. Income, expenses (other than expenses incurred under
each class's distribution agreement) and realized and unrealized gains or
losses on investments are allocated to each class of shares based on its
relative net assets.
The significant accounting policies followed by the Funds are summarized as
follows:
SECURITY VALUATION: Investments in securities traded on a national securities
exchange or on the NASDAQ National Market System are valued at the last
reported sales price. Securities for which over-the-counter market quotations
are readily available are valued on the basis of the last current bid price.
An outside pricing service may be utilized to provide such valuations. For
fixed income securities, the pricing service may employ electronic data
processing techniques and/or a matrix system to determine valuations using
methods which include consideration of yields or prices of bonds of
comparable quality, type of issue, coupon, maturity and rating indications as
to value from dealers, and general market conditions. Securities for which
quotations are not readily available are valued at fair value as determined
in good faith by management under supervision of the Board of Directors.
Short-term investments, with maturities of less than 60 days when acquired,
or which subsequently are within 60 days of maturity, are valued at amortized
cost.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS: Delivery and payment for
securities that have been purchased by the Asset Allocation Portfolio on a
forward commitment or when-issued basis can take place a month or more after
the transaction date. During this period, such securities are subject to
market fluctuations and the portfolio maintains, in a segregated account with
its custodian, assets with a market value equal to the amount of its purchase
commitments.
Consistent with its ability to purchase securities on a when-issued basis,
the Asset Allocation Portfolio may enter into transactions to defer
settlement of its purchase commitments. As an inducement to defer settlement,
the portfolio repurchases a similar security for settlement at a later date
at a lower purchase price relative to the current market. This transaction is
referred to as a Dollar Roll.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions
are accounted for on the trade date and dividend income is recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Realized
security gains and losses are determined using the identified cost method.
The Advantage Asset Allocation Portfolio amortizes original issue discount,
long term bond premium, and market discount.
For the period ended February 29, 2000, 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................... $224,621,904 $224,984,681
Value Fund................................... 66,859,661 65,691,645
Growth & Income Fund......................... 25,819,337 30,836,555
Capital Fund................................. 562,370,562 624,077,210
Growth Fund.................................. 775,217,542 844,106,838
Capital Appreciation Portfolio............... 302,522,696 308,751,429
</TABLE>
LENDING OF PORTFOLIO SECURITIES: At February 29, 2000, 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.
42
<PAGE>
- --------------------------------------------------------------------------------
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 period ended February 29, 2000:
<TABLE>
<CAPTION>
Fee Income
For the Period
Ended
Securities February 29,
On Loan Collateral 2000
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------
Asset Allocation Portfolio................... $ 46,554,921 $ 51,015,049 $ 24,353
Value Fund................................... 8,800,849 9,451,705 5,087
Growth & Income Fund......................... 3,141,103 3,477,633 4,287
Capital Fund................................. 136,465,092 149,829,023 85,017
Capital Appreciation Portfolio............... 87,140,348 93,055,573 113,355
</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 to pay quarterly distributions and Fortis Growth &
Income to pay semiannual distributions from net investment income. Fortis
Capital Appreciation Portfolio, Fortis Value Fund, Fortis Capital Fund, and
Fortis Growth Fund pay annual distributions from net investment income.
Distributions of net realized capital gains, if any, are made annually by
each fund. The distributions are recorded on the record date and are payable
in cash or reinvested in additional shares of the portfolio at net asset
value without any charge to the shareholder.
ILLIQUID SECURITIES: At February 29, 2000, 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 29, 2000, was $3,821,779 in the Asset
Allocation Portfolio; $5,581,850 in the Growth & Income Fund, which
represents 1.32% , 13.14% of net assets, respectively. Pursuant to guidelines
adopted by the Board of Directors, certain unregistered securities are
determined to be liquid and are not included within the percent limitations
specified above.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of increase and decrease
in net assets from operations during the reporting period. Actual results
could differ from those estimates.
BANK BORROWINGS: Several Fortis Funds including Asset Allocation Portfolio,
Value Fund, Growth & Income Fund, Capital Fund and Capital Appreciation
Portfolio have a revolving credit agreement with Norwest Bank Minnesota N.A.,
whereby the funds are permitted to have a bank borrowing for temporary and
emergency purposes to meet large redemption requests by shareholders; and
cover securities purchased when matched or when earlier trades have failed.
The agreement, which enables the funds to participate with other Fortis
Funds, permits borrowings up to $25 million, collectively. Interest is
expensed to each participating fund based on its borrowings and will be
calculated at the borrowers option of: 1) the Prime Index; 2) the Federal
Funds rate plus a "Margin" of 37.5 basis points, or; 3) the Libor rate plus a
"Margin" of 37.5 basis points. The Prime Index is defined as the higher of:
A) the rate that Norwest Bank Minnesota N.A. announces from time to time as
its prime rate or B) the Federal Funds rate plus 50 basis points. Each fund
pays a commitment fee equal to its pro rata share of the amount of the credit
facility at a rate of 0.08% per annum. The funds had no borrowings during the
period ended February 29, 2000.
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
43
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
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................... $254,533 $17,352 $2,173 $51,343
Value Fund................................... 51,570 7,554 128 15,998
Growth & Income Fund......................... 44,014 10,917 99 19,550
Capital Fund................................. 451,598 19,889 705 51,213
Growth Fund.................................. 456,395 16,297 1,253 57,811
Capital Appreciation Portfolio............... 370,064 14,437 722 23,587
</TABLE>
For the period ended February 29, 2000, 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................... $ 4,227
Value Fund................................... 1,839
Growth & Income Fund......................... 497
Capital Fund................................. 12,432
Growth Fund.................................. 35,000
Capital Appreciation......................... 2,685
</TABLE>
3. FUND MERGER: Effective with the close of business on October 23, 1998, the
Fortis Fiduciary Fund was merged into Fortis Capital Fund. The merger was
approved by the shareholders of the Fortis Fiduciary Fund. Fortis Capital
Fund will be the surviving entity for financial reporting and income tax
purposes. The merger was accomplished by a tax free exchange as detailed
below:
<TABLE>
<CAPTION>
Net Assets of
Fiduciary Fund on Fiduciary Fund Capital Fund
October 23, 1998 Shares Exchanged Shares Issued
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
Class A...................................... $77,701,653 2,451,978 4,303,728
Class B...................................... 5,171,124 171,119 298,388
Class C...................................... 1,437,049 47,523 82,934
Class H...................................... 10,173,846 336,674 586,642
</TABLE>
Fortis Fiduciary Fund's net assets at October 23, 1998 included unrealized
appreciation of $20,759,680, accumulated net realized losses of ($347,629)
and capital stock of $74,071,621.
The net assets of Fortis Capital 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>
44
<PAGE>
- --------------------------------------------------------------------------------
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 2000** 1999 1998 1997 1996 1995++
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 18.43 $ 16.91 $ 18.98 $ 16.48 $ 16.52 $ 14.44
-------- -------- -------- -------- -------- --------
Operations:
Investment income - net............... .18 .30 .39 .39 .47 .43
Net realized and unrealized gain
(losses) on investments............. 3.59 3.47 .13 3.47 .29 2.14
-------- -------- -------- -------- -------- --------
Total from operations................... 3.77 3.77 .52 3.86 .76 2.57
-------- -------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.19) (.29) (.41) (.41) (.47) (.40)
From net realized gains............... (3.03) (1.96) (2.18) (.95) (.32) (.09)
Excess distributions of net realized
gains............................... -- -- -- -- (.01) --
-------- -------- -------- -------- -------- --------
Total distributions to shareholders..... (3.22) (2.25) (2.59) (1.36) (.80) (.49)
-------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 18.98 $ 18.43 $ 16.91 $ 18.98 $ 16.48 $ 16.52
-------- -------- -------- -------- -------- --------
Total return @.......................... 22.09% 22.96% 2.71% 24.62% 4.73% 18.25%
Net assets end of period (000s
omitted).............................. $208,556 $177,794 $151,920 $156,734 $136,656 $132,939
Ratio of expenses to average daily net
assets................................ 1.39%* 1.42% 1.44% 1.48% 1.50% 1.57%*
Ratio of net investment income to
average daily net assets.............. 1.96%* 1.60% 2.07% 2.22% 2.85% 3.31%*
Portfolio turnover rate................. 88% 159% 104% 109% 89% 94%
</TABLE>
<TABLE>
<CAPTION>
Class B
-----------------------------------------------------
Year Ended August 31,
-----------------------------------------------------
ASSET ALLOCATION 2000** 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 18.30 $ 16.80 $18.87 $16.40 $16.46 $14.27
------- ------- ------ ------ ------ ------
Operations:
Investment income - net............... .13 .19 .29 .27 .37 .39
Net realized and unrealized gain
(losses) on investments............. 3.56 3.46 .13 3.47 .29 2.26
------- ------- ------ ------ ------ ------
Total from operations................... 3.69 3.65 .42 3.74 .66 2.65
------- ------- ------ ------ ------ ------
Distributions to shareholders:
From investment income - net.......... (.14) (.19) (.31) (.32) (.39) (.37)
From net realized gains............... (3.03) (1.96) (2.18) (.95) (.32) (.09)
Excess distributions of net realized
gains............................... -- -- -- -- (.01) --
------- ------- ------ ------ ------ ------
Total distributions to shareholders..... (3.17) (2.15) (2.49) (1.27) (.72) (.46)
------- ------- ------ ------ ------ ------
Net asset value, end of period.......... $ 18.82 $ 18.30 $16.80 $18.87 $16.40 $16.46
------- ------- ------ ------ ------ ------
Total return @.......................... 21.75% 22.32% 2.14% 23.92% 4.12% 19.00%
Net assets end of period (000s
omitted).............................. $23,043 $17,408 $9,928 $7,462 $4,411 $ 692
Ratio of expenses to average daily net
assets................................ 1.94%* 1.97% 1.99% 2.03% 2.05% 2.12%*
Ratio of net investment income to
average daily net assets.............. 1.41%* 1.05% 1.50% 1.67% 2.34% 2.51%*
Portfolio turnover rate................. 88% 159% 104% 109% 89% 94%
</TABLE>
* Annualized.
** Six-month period ended February 29, 2000.
+ For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
++ Ten-month period ended 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.
45
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
-----------------------------------------------------
Year Ended August 31,
-----------------------------------------------------
ASSET ALLOCATION 2000** 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 18.22 $ 16.74 $18.81 $16.35 $16.41 $14.27
------- ------- ------ ------ ------ ------
Operations:
Investment income - net............... .13 .19 .29 .26 .37 .39
Net realized and unrealized gain
(losses) on investments............. 3.55 3.44 .13 3.47 .29 2.21
------- ------- ------ ------ ------ ------
Total from operations................... 3.68 3.63 .42 3.73 .66 2.60
------- ------- ------ ------ ------ ------
Distributions to shareholders:
From investment income - net.......... (.14) (.19) (.31) (.32) (.39) (.37)
From net realized gains............... (3.03) (1.96) (2.18) (.95) (.32) (.09)
Excess distributions of net realized
gains............................... -- -- -- -- (.01) --
------- ------- ------ ------ ------ ------
Total distributions to shareholders..... (3.17) (2.15) (2.49) (1.27) (.72) (.46)
------- ------- ------ ------ ------ ------
Net asset value, end of period.......... $ 18.73 $ 18.22 $16.74 $18.81 $16.35 $16.41
------- ------- ------ ------ ------ ------
Total return @.......................... 21.79% 22.27% 2.15% 23.93% 4.13% 18.64%
Net assets end of period (000s
omitted).............................. $14,073 $10,259 $5,831 $4,789 $2,641 $ 777
Ratio of expenses to average daily net
assets................................ 1.94%* 1.97% 1.99% 2.03% 2.05% 2.12%*
Ratio of net investment income to
average daily net assets.............. 1.41%* 1.05% 1.51% 1.67% 2.33% 2.52%*
Portfolio turnover rate................. 88% 159% 104% 109% 89% 94%
</TABLE>
<TABLE>
<CAPTION>
Class H
--------------------------------------------------------
Year Ended August 31,
--------------------------------------------------------
ASSET ALLOCATION 2000** 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 18.29 $ 16.79 $ 18.86 $ 16.39 $ 16.44 $14.27
------- ------- ------- ------- ------- ------
Operations:
Investment income - net............... .13 .19 .29 .27 .38 .39
Net realized and unrealized gain
(losses) on investments............. 3.56 3.46 .13 3.47 .29 2.24
------- ------- ------- ------- ------- ------
Total from operations................... 3.69 3.65 .42 3.74 .67 2.63
------- ------- ------- ------- ------- ------
Distributions to shareholders:
From investment income - net.......... (.14) (.19) (.31) (.32) (.39) (.37)
From net realized gains............... (3.03) (1.96) (2.18) (.95) (.32) (.09)
Excess distributions of net realized
gains............................... -- -- -- -- (.01) --
------- ------- ------- ------- ------- ------
Total distributions to shareholders..... (3.17) (2.15) (2.49) (1.27) (.72) (.46)
------- ------- ------- ------- ------- ------
Net asset value, end of period.......... $ 18.81 $ 18.29 $ 16.79 $ 18.86 $ 16.39 $16.44
------- ------- ------- ------- ------- ------
Total return @.......................... 21.76% 22.32% 2.15% 23.93% 4.19% 18.86%
Net assets end of period (000s
omitted).............................. $41,743 $34,207 $22,979 $17,142 $10,904 $4,676
Ratio of expenses to average daily net
assets................................ 1.94%* 1.97% 1.99% 2.03% 2.05% 2.12%*
Ratio of net investment income to
average daily net assets.............. 1.41%* 1.05% 1.50% 1.67% 2.32% 2.54%*
Portfolio turnover rate................. 88% 159% 104% 109% 89% 94%
</TABLE>
* Annualized.
** Six-month period ended February 29, 2000.
+ 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.
46
<PAGE>
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class Z
----------------
Year Ended
August 31,
----------------
ASSET ALLOCATION 2000** 1999+++
<S> <C> <C>
- -----------------------------------------------------------
Net asset value, beginning of period.... $18.44 $19.05
------ ------
Operations:
Investment income - net............... .23 .07
Net realized and unrealized gain
(losses) on investments............. 3.59 (.68)
------ ------
Total from operations................... 3.82 (.61)
------ ------
Distributions to shareholders:
From investment income - net.......... (.24) --
From net realized gains............... (3.03) --
Excess distributions of net realized
gains............................... -- --
------ ------
Total distributions to shareholders..... (3.27) --
------ ------
Net asset value, end of period.......... $18.99 $18.44
------ ------
Total return @.......................... 22.36% (3.20)%
Net assets end of period (000s
omitted).............................. $1,779 $ 817
Ratio of expenses to average daily net
assets................................ .94%* .97%*
Ratio of net investment income to
average daily net assets.............. 2.39%* 2.05%*
Portfolio turnover rate................. 88% 159%
</TABLE>
* Annualized.
** Six-month period ended February 29, 2000.
+++ For the period from July 27, 1999 (initial offering of shares) to
August 31, 1999.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
47
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
----------------------------------------------
Year Ended August 31,
----------------------------------------------
VALUE 2000** 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 13.28 $ 11.85 $ 13.51 $ 10.75 $10.00
------- ------- ------- ------- ------
Operations:
Investment income (loss) - net........ -- .05 .09 .09 .05
Net realized and unrealized gain
(loss) on investments............... (.55) 2.73 (.30) 2.94 .70
------- ------- ------- ------- ------
Total from operations................... (.55) 2.78 (.21) 3.03 .75
------- ------- ------- ------- ------
Distributions to shareholders:
From investment income - net.......... -- (.05) (.09) (.06) --
From net realized gains on
investments......................... (.93) (1.30) (1.36) (.21) --
------- ------- ------- ------- ------
Total distributions to shareholders..... (.93) (1.35) (1.45) (.27) --
------- ------- ------- ------- ------
Net asset value, end of period.......... $ 11.80 $ 13.28 $ 11.85 $ 13.51 $10.75
------- ------- ------- ------- ------
Total return @.......................... (4.48%) 24.10% (2.52%) 28.66% 7.50%
Net assets end of period (000s
omitted).............................. $33,691 $34,302 $22,449 $21,855 $9,847
Ratio of expenses to average daily net
assets................................ 1.48%* 1.48% 1.52% 1.59% 1.65%*
Ratio of net investment income (loss) to
average daily net assets.............. .07%* .32% .55% .72% .75%*
Portfolio turnover rate................. 131% 266% 260% 93% 41%
</TABLE>
<TABLE>
<CAPTION>
Class B
------------------------------------------
Year Ended August 31,
------------------------------------------
VALUE 2000** 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
Net asset value, beginning of period.... $13.06 $11.71 $13.39 $10.70 $10.00
------ ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.04) (.08) (.02) (.01) --
Net realized and unrealized gain
(loss) on investments............... (.55) 2.73 (.30) 2.94 .70
------ ------ ------ ------ ------
Total from operations................... (.59) 2.65 (.32) 2.93 .70
------ ------ ------ ------ ------
Distributions to shareholders:
From investment income - net.......... -- -- -- (.03) --
From net realized gains on
investments......................... (.93) (1.30) (1.36) (.21) --
------ ------ ------ ------ ------
Total distributions to shareholders..... (.93) (1.30) (1.36) (.24) --
------ ------ ------ ------ ------
Net asset value, end of period.......... $11.54 $13.06 $11.71 $13.39 $10.70
------ ------ ------ ------ ------
Total return @.......................... (4.88%) 23.20% (3.33%) 27.75% 7.00%
Net assets end of period (000s
omitted).............................. $6,353 $6,662 $4,794 $2,480 $ 642
Ratio of expenses to average daily net
assets................................ 2.23%* 2.23% 2.27% 2.34% 2.40%*
Ratio of net investment income (loss) to
average daily net assets.............. (.68%)* (.43%) (.20%) (.04%) --
Portfolio turnover rate................. 131% 266% 260% 93% 41%
</TABLE>
* Annualized.
** Six-month period ended February 29, 2000.
+ 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.
48
<PAGE>
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
------------------------------------------
Year Ended August 31,
------------------------------------------
VALUE 2000** 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
Net asset value, beginning of period.... $13.07 $11.72 $13.39 $10.70 $10.00
------ ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.04) (.08) (.01) (.01) --
Net realized and unrealized gain
(loss) on investments............... (.55) 2.73 (.30) 2.94 .70
------ ------ ------ ------ ------
Total from operations................... (.59) 2.65 (.31) 2.93 .70
------ ------ ------ ------ ------
Distributions to shareholders:
From investment income - net.......... -- -- -- (.03) --
From net realized gains on
investments......................... (.93) (1.30) (1.36) (.21) --
------ ------ ------ ------ ------
Total distributions to shareholders..... (.93) (1.30) (1.36) (.24) --
------ ------ ------ ------ ------
Net asset value, end of period.......... $11.55 $13.07 $11.72 $13.39 $10.70
------ ------ ------ ------ ------
Total return @.......................... (4.87%) 23.18% (3.24%) 27.75% 7.00%
Net assets end of period (000s
omitted).............................. $2,298 $2,486 $1,991 $1,002 $ 223
Ratio of expenses to average daily net
assets................................ 2.23%* 2.23% 2.27% 2.34% 2.40%*
Ratio of net investment income (loss) to
average daily net assets.............. (.68%)* (.43%) (.20%) (.04%) --
Portfolio turnover rate................. 131% 266% 260% 93% 41%
</TABLE>
<TABLE>
<CAPTION>
Class H
------------------------------------------
Year Ended August 31,
------------------------------------------
VALUE 2000** 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
Net asset value, beginning of period.... $13.07 $11.72 $13.39 $10.70 $10.00
------ ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.04) (.08) (.01) (.01) --
Net realized and unrealized gain
(loss) on investments............... (.55) 2.73 (.30) 2.94 .70
------ ------ ------ ------ ------
Total from operations................... (.59) 2.65 (.31) 2.93 .70
------ ------ ------ ------ ------
Distributions to shareholders:
From investment income - net.......... -- -- -- (.03) --
From net realized gains on
investments......................... (.93) (1.30) (1.36) (.21) --
------ ------ ------ ------ ------
Total distributions to shareholders..... (.93) (1.30) (1.36) (.24) --
------ ------ ------ ------ ------
Net asset value, end of period.......... $11.55 $13.07 $11.72 $13.39 $10.70
------ ------ ------ ------ ------
Total return @.......................... (4.87%) 23.18% (3.24%) 27.75% 7.00%
Net assets end of period (000s
omitted).............................. $7,485 $8,045 $7,016 $4,896 $1,605
Ratio of expenses to average daily net
assets................................ 2.23%* 2.23% 2.27% 2.34% 2.40%*
Ratio of net investment income (loss) to
average daily net assets.............. (.68%)* (.43%) (.20%) (.04%) --
Portfolio turnover rate................. 131% 266% 260% 93% 41%
</TABLE>
* Annualized.
** Six-month period ended February 29, 2000.
+ 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.
49
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
----------------------------------------------
Year Ended August 31,
----------------------------------------------
GROWTH & INCOME 2000** 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 14.83 $ 13.20 $ 13.06 $ 10.35 $10.00
------- ------- ------- ------- ------
Operations:
Investment income - net............... .07 .17 .32 .20 .07
Net realized and unrealized gain on
investments......................... 1.31 2.03 .07 2.77 .34
------- ------- ------- ------- ------
Total from operations................... 1.38 2.20 .39 2.97 .41
------- ------- ------- ------- ------
Distributions to shareholders:
From investment income - net.......... (.07) (.18) (.24) (.16) (.06)
From net realized gains on
investments......................... (.25) (.39) (.01) (.10) --
------- ------- ------- ------- ------
Total distributions to shareholders..... (.32) (.57) (.25) (.26) (.06)
------- ------- ------- ------- ------
Net asset value, end of period.......... $ 15.89 $ 14.83 $ 13.20 $ 13.06 $10.35
------- ------- ------- ------- ------
Total return @.......................... 9.37% 16.84% 2.81% 29.00% 4.11%
Net assets end of period (000s
omitted).............................. $25,298 $26,100 $20,994 $13,907 $3,117
Ratio of expenses to average daily net
assets................................ 1.44%* 1.44% 1.55% 1.75% 2.33%*
Ratio of net investment income to
average daily net assets.............. .65%* 1.18% 1.71% 1.68% 1.16%*
Portfolio turnover rate................. 63% 65% 20% 15% 5%
</TABLE>
<TABLE>
<CAPTION>
Class B
------------------------------------------
Year Ended August 31,
------------------------------------------
GROWTH & INCOME 2000** 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
Net asset value, beginning of period.... $14.77 $13.16 $13.03 $10.32 $10.00
------ ------ ------ ------ ------
Operations:
Investment income - net............... -- .07 .20 .11 .02
Net realized and unrealized gain on
investments......................... 1.31 2.03 .07 2.77 .34
------ ------ ------ ------ ------
Total from operations................... 1.31 2.10 .27 2.88 .36
------ ------ ------ ------ ------
Distributions to shareholders:
From investment income - net.......... (.01) (.10) (.13) (.07) (.04)
From net realized gains on
investments......................... (.25) (.39) (.01) (.10) --
------ ------ ------ ------ ------
Total distributions to shareholders..... (.26) (.49) (.14) (.17) (.04)
------ ------ ------ ------ ------
Net asset value, end of period.......... $15.82 $14.77 $13.16 $13.03 $10.32
------ ------ ------ ------ ------
Total return @.......................... 8.91% 16.08% 1.99% 28.16% 3.55%
Net assets end of period (000s
omitted).............................. $7,542 $7,168 $5,159 $2,306 $ 508
Ratio of expenses to average daily net
assets................................ 2.19%* 2.19% 2.30% 2.50% 3.08%*
Ratio of net investment income (loss) to
average daily net assets.............. (.10%)* .41% .96% .92% .35%*
Portfolio turnover rate................. 63% 65% 20% 15% 5%
</TABLE>
* Annualized.
** Six-month period ended February 29, 2000
+ 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.
50
<PAGE>
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
------------------------------------------
Year Ended August 31,
------------------------------------------
GROWTH & INCOME 2000** 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
Net asset value, beginning of period.... $14.76 $13.16 $13.03 $10.33 $10.00
------ ------ ------ ------ ------
Operations:
Investment income - net............... .01 .06 .20 .10 .03
Net realized and unrealized gain on
investments......................... 1.31 2.03 .07 2.77 .34
------ ------ ------ ------ ------
Total from operations................... 1.32 2.09 .27 2.87 .37
------ ------ ------ ------ ------
Distributions to shareholders:
From investment income - net.......... (.01) (.10) (.13) (.07) (.04)
From net realized gains on
investments......................... (.25) (.39) (.01) (.10) --
------ ------ ------ ------ ------
Total distributions to shareholders..... (.26) (.49) (.14) (.17) (.04)
------ ------ ------ ------ ------
Net asset value, end of period.......... $15.82 $14.76 $13.16 $13.03 $10.33
------ ------ ------ ------ ------
Total return @.......................... 8.98% 16.00% 1.99% 28.03% 3.65%
Net assets end of period (000s
omitted).............................. $2,577 $2,445 $2,217 $1,290 $ 302
Ratio of expenses to average daily net
assets................................ 2.19%* 2.19% 2.30% 2.50% 3.08%*
Ratio of net investment income (loss) to
average daily net assets.............. (.10%)* .41% .96% .94% .54%*
Portfolio turnover rate................. 63% 65% 20% 15% 5%
</TABLE>
<TABLE>
<CAPTION>
Class H
------------------------------------------
Year Ended August 31,
------------------------------------------
GROWTH & INCOME 2000** 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
Net asset value, beginning of period.... $14.76 $13.16 $13.03 $10.33 $10.00
------ ------ ------ ------ ------
Operations:
Investment income - net............... .01 .06 .20 .10 .03
Net realized and unrealized gain on
investments......................... 1.31 2.03 .07 2.77 .34
------ ------ ------ ------ ------
Total from operations................... 1.32 2.09 .27 2.87 .37
------ ------ ------ ------ ------
Distributions to shareholders:
From investment income - net.......... (.01) (.10) (.13) (.07) (.04)
From net realized gains on
investments......................... (.25) (.39) (.01) (.10) --
------ ------ ------ ------ ------
Total distributions to shareholders..... (.26) (.49) (.14) (.17) (.04)
------ ------ ------ ------ ------
Net asset value, end of period.......... $15.82 $14.76 $13.16 $13.03 $10.33
------ ------ ------ ------ ------
Total return @.......................... 8.98% 16.00% 1.99% 28.03% 3.65%
Net assets end of period (000s
omitted).............................. $7,067 $7,245 $6,306 $5,085 $1,286
Ratio of expenses to average daily net
assets................................ 2.19%* 2.19% 2.30% 2.50% 3.08%*
Ratio of net investment income (loss) to
average daily net assets.............. (.10%)* .41% .96% .93% .44%*
Portfolio turnover rate................. 63% 65% 20% 15% 5%
</TABLE>
* Annualized.
** Six-month period ended February 29, 2000
+ 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.
51
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------
Year Ended August 31,
---------------------------------------------------------------
CAPITAL 2000** 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 22.81 $ 22.37 $ 26.13 $ 21.89 $ 21.22 $ 18.36
-------- -------- -------- -------- -------- --------
Operations:
Investment income (loss) - net........ (.03) (.03) (.08) (.08) .04 .08
Net realized and unrealized gain on
investments......................... 7.07 6.73 .38 7.06 .67 3.62
-------- -------- -------- -------- -------- --------
Total from operations................... 7.04 6.70 .30 6.98 .71 3.70
-------- -------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... -- -- -- (.01) (.04) (.08)
From net realized gains on
investments......................... (5.35) (6.26) (4.06) (2.73) -- (.76)
-------- -------- -------- -------- -------- --------
Total distributions to shareholders..... (5.35) (6.26) (4.06) (2.74) (.04) (.84)
-------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 24.50 $ 22.81 $ 22.37 $ 26.13 $ 21.89 $ 21.22
-------- -------- -------- -------- -------- --------
Total return @.......................... 36.31% 37.88% 1.56% 34.57% 3.36% 21.49%
Net assets end of period (000s
omitted).............................. $673,861 $551,551 $312,582 $340,949 $277,587 $291,263
Ratio of expenses to average daily net
assets................................ 1.07%* 1.10% 1.13% 1.18% 1.21% 1.24%
Ratio of net investment income (loss) to
average daily net assets.............. (.24%)* (.08%) (.28%) (.33%) .17% .42%
Portfolio turnover rate................. 86% 177% 71% 43% 28% 14%
</TABLE>
<TABLE>
<CAPTION>
Class B
-----------------------------------------------------
Year Ended August 31,
-----------------------------------------------------
CAPITAL 2000** 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 21.77 $ 21.73 $25.67 $21.69 $21.14 $18.35
------- ------- ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.08) (.43) (.26) (.35) (.12) --
Net realized and unrealized gain on
investments......................... 6.63 6.73 .38 7.06 .67 3.58
------- ------- ------ ------ ------ ------
Total from operations................... 6.55 6.30 .12 6.71 .55 3.58
------- ------- ------ ------ ------ ------
Distributions to shareholders:
From investment income - net.......... -- -- -- -- -- (.03)
From net realized gains on
investments......................... (5.35) (6.26) (4.06) (2.73) -- (.76)
------- ------- ------ ------ ------ ------
Total distributions to shareholders..... (5.35) (6.26) (4.06) (2.73) -- (.79)
------- ------- ------ ------ ------ ------
Net asset value, end of period.......... $ 22.97 $ 21.77 $21.73 $25.67 $21.69 $21.14
------- ------- ------ ------ ------ ------
Total return @.......................... 35.73% 36.94% .80% 33.55% 2.60% 20.74%
Net assets end of period (000s
omitted).............................. $36,553 $24,847 $9,339 $7,284 $4,097 $1,527
Ratio of expenses to average daily net
assets................................ 1.82%* 1.85% 1.88% 1.93% 1.96% 1.99%*
Ratio of net investment income (loss) to
average daily net assets.............. (.99%)* (.83%) (1.03%) (1.08%) (.60%) (.36%)*
Portfolio turnover rate................. 86% 177% 71% 43% 28% 14%
</TABLE>
* Annualized.
** Six-month period ended February 29, 2000.
+ 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.
52
<PAGE>
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
----------------------------------------------------
Year Ended August 31,
----------------------------------------------------
CAPITAL 2000** 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 21.76 $21.73 $25.68 $21.68 $21.13 $18.35
------- ------ ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.07) (.44) (.27) (.33) (.12) --
Net realized and unrealized gain on
investments......................... 6.63 6.73 .38 7.06 .67 3.57
------- ------ ------ ------ ------ ------
Total from operations................... 6.56 6.29 .11 6.73 .55 3.57
------- ------ ------ ------ ------ ------
Distributions to shareholders:
From investment income - net.......... -- -- -- -- -- (.03)
From net realized gains on
investments......................... (5.35) (6.26) (4.06) (2.73) -- (.76)
------- ------ ------ ------ ------ ------
Total distributions to shareholders..... (5.35) (6.26) (4.06) (2.73) -- (.79)
------- ------ ------ ------ ------ ------
Net asset value, end of period.......... $ 22.97 $21.76 $21.73 $25.68 $21.68 $21.13
------- ------ ------ ------ ------ ------
Total return @.......................... 35.79% 36.87% .76% 33.68% 2.60% 20.68%
Net assets end of period (000s
omitted).............................. $10,430 $5,715 $2,453 $1,432 $ 824 $ 344
Ratio of expenses to average daily net
assets................................ 1.82%* 1.85% 1.88% 1.93% 1.96% 1.99%*
Ratio of net investment income (loss) to
average daily net assets.............. (.99%)* (.83%) (1.03%) (1.08%) (.60%) (.36%)*
Portfolio turnover rate................. 86% 177% 71% 43% 28% 14%
</TABLE>
<TABLE>
<CAPTION>
Class H
-------------------------------------------------------
Year Ended August 31,
-------------------------------------------------------
CAPITAL 2000** 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 21.78 $ 21.74 $ 25.68 $ 21.69 $21.14 $18.35
------- ------- ------- ------- ------ ------
Operations:
Investment income (loss) - net........ (.07) (.43) (.26) (.34) (.12) --
Net realized and unrealized gain on
investments......................... 6.63 6.73 .38 7.06 .67 3.58
------- ------- ------- ------- ------ ------
Total from operations................... 6.56 6.30 .12 6.72 .55 3.58
------- ------- ------- ------- ------ ------
Distributions to shareholders:
From investment income - net.......... -- -- -- -- -- (.03)
From net realized gains on
investments......................... (5.35) (6.26) (4.06) (2.73) -- (.76)
------- ------- ------- ------- ------ ------
Total distributions to shareholders..... (5.35) (6.26) (4.06) (2.73) -- (.79)
------- ------- ------- ------- ------ ------
Net asset value, end of period.......... $ 22.99 $ 21.78 $ 21.74 $ 25.68 $21.69 $21.14
------- ------- ------- ------- ------ ------
Total return @.......................... 35.75% 36.91% .80% 33.61% 2.60% 20.74%
Net assets end of period (000s
omitted).............................. $56,615 $40,760 $16,987 $14,468 $8,052 $4,052
Ratio of expenses to average daily net
assets................................ 1.82%* 1.85% 1.88% 1.93% 1.96% 1.99%*
Ratio of net investment income (loss) to
average daily net assets.............. (.99%)* (.83%) (1.03%) (1.06%) (.60%) (.37%)*
Portfolio turnover rate................. 86% 177% 71% 43% 28% 14%
</TABLE>
* Annualized.
** Six-month period ended February 29, 2000.
+ 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.
53
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
-----------------------------------------------------------------
Year Ended August 31,
-----------------------------------------------------------------
GROWTH 2000** 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 30.80 $ 29.78 $ 37.32 $ 32.14 $ 32.66 $ 26.25
---------- -------- -------- -------- -------- --------
Operations:
Investment income (loss) - net........ (.14) (.13) (.11) (.16) (.11) (.04)
Net realized and unrealized gain
(losses) on investments............. 22.24 10.72 (3.59) 8.41 1.30 6.95
---------- -------- -------- -------- -------- --------
Total from operations................... 22.10 10.59 (3.70) 8.25 1.19 6.91
---------- -------- -------- -------- -------- --------
Distributions to shareholders:
From net realized gains............... (6.85) (9.57) (3.84) (3.07) (1.71) (.50)
---------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 46.05 $ 30.80 $ 29.78 $ 37.32 $ 32.14 $ 32.66
---------- -------- -------- -------- -------- --------
Total return @.......................... 84.59% 40.00% (10.59%) 27.01% 4.09% 26.92%
Net assets end of period (000s
omitted).............................. $1,244,169 $734,282 $581,819 $734,654 $641,061 $670,753
Ratio of expenses to average daily net
assets................................ 1.05%* 1.06% 1.05% 1.07% 1.09% 1.13%
Ratio of net investment income (loss) to
average daily net assets.............. (.58%)* (.44%) (.29%) (.45%) (.33%) (.13%)
Portfolio turnover rate................. 71% 166% 61% 28% 32% 27%
</TABLE>
<TABLE>
<CAPTION>
Class B
-------------------------------------------------------
Year Ended August 31,
-------------------------------------------------------
GROWTH 2000** 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 29.26 $ 28.85 $ 36.53 $ 31.75 $32.48 $25.85
------- ------- ------- ------- ------ ------
Operations:
Investment income (loss) - net........ (.19) (.74) (.25) (.56) (.32) (.13)
Net realized and unrealized gain
(losses) on investments............. 20.80 10.72 (3.59) 8.41 1.30 7.26
------- ------- ------- ------- ------ ------
Total from operations................... 20.61 9.98 (3.84) 7.85 .98 7.13
------- ------- ------- ------- ------ ------
Distributions to shareholders:
From net realized gains............... (6.85) (9.57) (3.84) (3.07) (1.71) (.50)
------- ------- ------- ------- ------ ------
Net asset value, end of period.......... $ 43.02 $ 29.26 $ 28.85 $ 36.53 $31.75 $32.48
------- ------- ------- ------- ------ ------
Total return @.......................... 83.86% 38.98% (11.25%) 26.02% 3.45% 28.17%
Net assets end of period (000s
omitted).............................. $38,457 $20,236 $12,417 $12,149 $6,710 $2,179
Ratio of expenses to average daily net
assets................................ 1.80%* 1.81% 1.80% 1.82% 1.84% 1.88%*
Ratio of net investment income (loss) to
average daily net assets.............. (1.33%)* (1.19%) (1.04%) (1.19%) (1.07%) (1.09%)*
Portfolio turnover rate................. 71% 166% 61% 28% 32% 27%
</TABLE>
* Annualized.
** Six-month period ended February 29, 2000.
+ 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.
54
<PAGE>
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
----------------------------------------------------
Year Ended August 31,
----------------------------------------------------
GROWTH 2000** 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $29.26 $28.85 $ 36.52 $31.75 $32.49 $25.85
------ ------ ------- ------ ------ ------
Operations:
Investment income (loss) - net........ (.18) (.74) (.24) (.57) (.33) (.10)
Net realized and unrealized gain
(losses) on investments............. 20.80 10.72 (3.59) 8.41 1.30 7.24
------ ------ ------- ------ ------ ------
Total from operations................... 20.62 9.98 (3.83) 7.84 .97 7.14
------ ------ ------- ------ ------ ------
Distributions to shareholders:
From net realized gains............... (6.85) (9.57) (3.84) (3.07) (1.71) (.50)
------ ------ ------- ------ ------ ------
Net asset value, end of period.......... $43.03 $29.26 $ 28.85 $36.52 $31.75 $32.49
------ ------ ------- ------ ------ ------
Total return @.......................... 83.90% 38.98% (11.22%) 25.98% 3.41% 28.21%
Net assets end of period (000s
omitted).............................. $9,357 $4,629 $ 2,738 $2,367 $1,077 $ 264
Ratio of expenses to average daily net
assets................................ 1.80%* 1.81% 1.80% 1.82% 1.84% 1.88%*
Ratio of net investment income (loss) to
average daily net assets.............. (1.33%)* (1.19%) (1.04%) (1.19%) (1.07%) (1.10%)*
Portfolio turnover rate................. 71% 166% 61% 28% 32% 27%
</TABLE>
<TABLE>
<CAPTION>
Class H
--------------------------------------------------------
Year Ended August 31,
--------------------------------------------------------
GROWTH 2000** 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 29.28 $ 28.86 $ 36.54 $ 31.75 $ 32.49 $25.85
------- ------- ------- ------- ------- ------
Operations:
Investment income (loss) - net........ (.16) (.73) (.25) (.55) (.33) (.11)
Net realized and unrealized gain
(losses) on investments............. 20.80 10.72 (3.59) 8.41 1.30 7.25
------- ------- ------- ------- ------- ------
Total from operations................... 20.64 9.99 (3.84) 7.86 .97 7.14
------- ------- ------- ------- ------- ------
Distributions to shareholders:
From net realized gains............... (6.85) (9.57) (3.84) (3.07) (1.71) (.50)
------- ------- ------- ------- ------- ------
Net asset value, end of period.......... $ 43.07 $ 29.28 $ 28.86 $ 36.54 $ 31.75 $32.49
------- ------- ------- ------- ------- ------
Total return @.......................... 83.92% 39.00% (11.25%) 26.05% 3.41% 28.21%
Net assets end of period (000s
omitted).............................. $94,630 $50,547 $34,453 $34,941 $21,176 $6,867
Ratio of expenses to average daily net
assets................................ 1.80%* 1.81% 1.80% 1.82% 1.84% 1.88%*
Ratio of net investment income (loss) to
average daily net assets.............. (1.33%)* (1.19%) (1.04%) (1.19%) (1.07%) (1.10%)*
Portfolio turnover rate................. 71% 166% 61% 28% 32% 27%
</TABLE>
* Annualized.
** Six-month period ended February 29, 2000.
+ 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.
55
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class Z
--------------------------------------------------
Year Ended August 31,
--------------------------------------------------
GROWTH 2000** 1999 1998 1997 1996++
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 31.23 $ 30.00 $ 37.47 $ 32.18 $ 31.61
-------- -------- ------- -------- -------
Operations:
Investment income (loss) - net........ (.13) (.06) (.04) (.05) --
Net realized and unrealized gain
(losses) on investments............. 22.65 10.86 (3.59) 8.41 .57
-------- -------- ------- -------- -------
Total from operations................... 22.52 10.80 (3.63) 8.36 .57
-------- -------- ------- -------- -------
Distributions to shareholders:
From net realized gains............... (6.85) (9.57) (3.84) (3.07) --
-------- -------- ------- -------- -------
Net asset value, end of period.......... $ 46.90 $ 31.23 $ 30.00 $ 37.47 $ 32.18
-------- -------- ------- -------- -------
Total return @.......................... 84.79% 40.49% (10.34%) 27.34% 1.80%
Net assets end of period (000s
omitted).............................. $233,136 $119,548 $95,370 $112,356 $93,006
Ratio of expenses to average daily net
assets................................ .80%* .81% .80% .82% .84%*
Ratio of net investment income (loss) to
average daily net assets.............. (.33%)* (.19%) (.04%) (.20%) .01%*
Portfolio turnover rate................. 71% 166% 61% 28% 32%
</TABLE>
* Annualized.
** Six-month period ended February 29, 2000.
++ 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.
56
<PAGE>
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
-------------------------------------------------------------
Year Ended August 31,
-------------------------------------------------------------
CAPITAL APPRECIATION 2000** 1999 1998 1997 1996 1995++
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 36.04 $ 26.42 $ 30.60 $ 34.76 $ 30.67 $ 23.05
-------- -------- ------- -------- -------- -------
Operations:
Investment income (loss) - net........ (.21) (.30) (.35) (.26) (.29) (.17)
Net realized and unrealized gain
(loss) on investments............... 42.89 18.42 (3.83) (2.45) 4.61 7.79
-------- -------- ------- -------- -------- -------
Total from operations................... 42.68 18.12 (4.18) (2.71) 4.32 7.62
-------- -------- ------- -------- -------- -------
Distributions to shareholders:
From net realized gains on
investments......................... (10.58) (8.50) -- (1.18) (.23) --
Tax return of capital................. -- -- -- (.27) -- --
-------- -------- ------- -------- -------- -------
Total distributions to shareholders..... (10.58) (8.50) -- (1.45) (.23) --
-------- -------- ------- -------- -------- -------
Net asset value, end of period.......... $ 68.14 $ 36.04 $ 26.42 $ 30.60 $ 34.76 $ 30.67
-------- -------- ------- -------- -------- -------
Total return @.......................... 143.34% 80.27% (13.66%) (7.89%) 14.21% 33.06%
Net assets end of period (000s
omitted).............................. $337,962 $147,346 $79,813 $105,422 $114,310 $90,918
Ratio of expenses to average daily net
assets................................ 1.36%* 1.50% 1.52% 1.55% 1.56% 1.69%*
Ratio of net investment income (loss) to
average daily net assets.............. (.94%)* (1.08%) (.97%) (.84%) (.96%) (.82%)*
Portfolio turnover rate................. 117% 271% 47% 25% 34% 21%
</TABLE>
<TABLE>
<CAPTION>
Class B
------------------------------------------------------
Year Ended August 31,
------------------------------------------------------
CAPITAL APPRECIATION 2000** 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 34.91 $ 25.90 $ 30.16 $34.46 $30.57 $22.45
------- ------- ------- ------ ------ ------
Operations:
Investment income (loss) - net........ (.31) (.91) (.43) (.40) (.49) (.35)
Net realized and unrealized gain
(loss) on investments............... 41.17 18.42 (3.83) (2.45) 4.61 8.47
------- ------- ------- ------ ------ ------
Total from operations................... 40.86 17.51 (4.26) (2.85) 4.12 8.12
------- ------- ------- ------ ------ ------
Distributions to shareholders:
From net realized gains on
investments......................... (10.58) (8.50) -- (1.18) (.23) --
Tax return of capital................. -- -- -- (.27) -- --
------- ------- ------- ------ ------ ------
Total distributions to shareholders..... (10.58) (8.50) -- (1.45) (.23) --
------- ------- ------- ------ ------ ------
Net asset value, end of period.......... $ 65.19 $ 34.91 $ 25.90 $30.16 $34.46 $30.57
------- ------- ------- ------ ------ ------
Total return @.......................... 142.69% 79.35% (14.12%) (8.38%) 13.60% 36.17%
Net assets end of period (000s
omitted).............................. $32,006 $11,426 $ 5,849 $6,561 $4,522 $ 841
Ratio of expenses to average daily net
assets................................ 1.91%* 2.05% 2.07% 2.10% 2.11% 2.24%*
Ratio of net investment income (loss) to
average daily net assets.............. (1.49%)* (1.63%) (1.52%) (1.39%) (1.47%) (1.61%)*
Portfolio turnover rate................. 117% 271% 47% 25% 34% 21%
</TABLE>
* Annualized.
** Six-month period ended February 29, 2000.
+ For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
++ Ten-month period ended August 31, 1995.
@ These are the total returns during the period, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
57
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
----------------------------------------------------
Year Ended August 31,
----------------------------------------------------
CAPITAL APPRECIATION 2000** 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 34.94 $25.92 $30.18 $34.48 $30.58 $22.45
------- ------ ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.27) (.90) (.43) (.40) (.48) (.36)
Net realized and unrealized gain
(loss) on investments............... 41.17 18.42 (3.83) (2.45) 4.61 8.49
------- ------ ------ ------ ------ ------
Total from operations................... 40.90 17.52 (4.26) (2.85) 4.13 8.13
------- ------ ------ ------ ------ ------
Distributions to shareholders:
From net realized gains on
investments......................... (10.58) (8.50) -- (1.18) (.23) --
Tax return of capital................. -- -- -- (.27) -- --
------- ------ ------ ------ ------ ------
Total distributions to shareholders..... (10.58) (8.50) -- (1.45) (.23) --
------- ------ ------ ------ ------ ------
Net asset value, end of period.......... $ 65.26 $34.94 $25.92 $30.18 $34.48 $30.58
------- ------ ------ ------ ------ ------
Total return @.......................... 142.68% 79.33% (14.12%) (8.38%) 13.62% 36.21%
Net assets end of period (000s
omitted).............................. $11,476 $3,612 $1,794 $1,875 $1,004 $ 227
Ratio of expenses to average daily net
assets................................ 1.91%* 2.05% 2.07% 2.10% 2.11% 2.24%*
Ratio of net investment income (loss) to
average daily net assets.............. (1.49%)* (1.63%) (1.52%) (1.39%) (1.46%) (1.62%)*
Portfolio turnover rate................. 117% 271% 47% 25% 34% 21%
</TABLE>
<TABLE>
<CAPTION>
Class H
-------------------------------------------------------
Year Ended August 31,
-------------------------------------------------------
CAPITAL APPRECIATION 2000** 1999 1998 1997 1996 1995+
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 34.94 $ 25.92 $ 30.18 $ 34.48 $30.58 $22.45
------- ------- ------- ------- ------ ------
Operations:
Investment income (loss) - net........ (.28) (.90) (.43) (.40) (.48) (.36)
Net realized and unrealized gain
(loss) on investments............... 41.17 18.42 (3.83) (2.45) 4.61 8.49
------- ------- ------- ------- ------ ------
Total from operations................... 40.89 17.52 (4.26) (2.85) 4.13 8.13
------- ------- ------- ------- ------ ------
Distributions to shareholders:
From net realized gains on
investments......................... (10.58) (8.50) -- (1.18) (.23) --
Tax return of capital................. -- -- -- (.27) -- --
------- ------- ------- ------- ------ ------
Total distributions to shareholders..... (10.58) (8.50) -- (1.45) (.23) --
------- ------- ------- ------- ------ ------
Net asset value, end of period.......... $ 65.25 $ 34.94 $ 25.92 $ 30.18 $34.48 $30.58
------- ------- ------- ------- ------ ------
Total return @.......................... 142.64% 79.33% (14.12%) (8.38%) 13.62% 36.21%
Net assets end of period (000s
omitted).............................. $51,991 $20,755 $11,933 $13,379 $9,575 $2,115
Ratio of expenses to average daily net
assets................................ 1.91%* 2.05% 2.07% 2.10% 2.11% 2.24%*
Ratio of net investment income (loss) to
average daily net assets.............. (1.49%)* (1.63%) (1.52%) (1.39%) (1.46%) (1.62%)*
Portfolio turnover rate................. 117% 271% 47% 25% 34% 21%
</TABLE>
* Annualized.
** Six-month period ended February 29, 2000.
+ For the period from November 14, 1994 (initial offering of shares) to
August 31, 1995.
@ These are the total returns during the period, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
58
<PAGE>
DIRECTORS AND OFFICERS
<TABLE>
<S> <C> <C>
DIRECTORS Richard W. Cutting CPA AND FINANCIAL CONSULTANT
Allen R. Freedman CHAIRMAN AND CHIEF EXECUTIVE OFFICER, FORTIS, INC. MANAGING
DIRECTOR OF
FORTIS INTERNATIONAL, N.V.
Dr. Robert M. Gavin PRESIDENT, CRANBROOK EDUCATION COMMUNITY. PRIOR TO JULY
1996, PRESIDENT MACALESTER COLLEGE
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
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 Schenker Shadko MARKETING CONSULTANT. PRIOR TO MAY 1996, SENIOR VICE
PRESIDENT OF MARKETING & STRATEGIC PLANNING, ROLLERBLADE,
INC.
Joseph M. Wikler INVESTMENT CONSULTANT AND PRIVATE INVESTOR. PRIOR TO JANUARY
1994, DIRECTOR OF RESEARCH, CHIEF INVESTMENT OFFICER,
PRINCIPAL, AND DIRECTOR, THE ROTHSCHILD CO.
</TABLE>
OFFICERS
Dean C. Kopperud
PRESIDENT AND DIRECTOR
Robert W. Beltz, Jr.
VICE PRESIDENT
James S. Byrd
VICE PRESIDENT
Peggy L. Ettestad
VICE PRESIDENT
Tamara L. Fagely
VICE PRESIDENT AND TREASURER
Howard G. Hudson
VICE PRESIDENT
Dickson W. Lewis
VICE PRESIDENT
Lucinda S. Mezey
VICE PRESIDENT
David A. Peterson
VICE PRESIDENT
Scott R. Plummer
VICE PRESIDENT
Rhonda J. Schwartz
VICE PRESIDENT
Melinda S. Urion
VICE PRESIDENT
Gary N. Yalen
VICE PRESIDENT
Michael J. Radmer
SECRETARY
<TABLE>
<S> <C>
INVESTMENT MANAGER, REGISTRAR AND Fortis Advisers, Inc.
TRANSFER AGENT BOX 64284, ST. PAUL, MINNESOTA 55164
PRINCIPAL UNDERWRITER Fortis Investors, Inc.
BOX 64284, ST. PAUL, MINNESOTA 55164
CUSTODIAN Norwest Bank Minnesota N.A.
MINNEAPOLIS, MINNESOTA
GENERAL COUNSEL Dorsey & Whitney LLP
MINNEAPOLIS, MINNESOTA
INDEPENDENT AUDITORS KPMG LLP
MINNEAPOLIS, MINNESOTA
</TABLE>
The use of this material is authorized only when preceded or accompanied by a
prospectus.
59
<PAGE>
FORTIS FINANCIAL GROUP'S OTHER PRODUCTS AND SERVICES
MUTUAL Fortis Bond Funds MONEY FUND
FUNDS/PORTFOLIOS U.S. GOVERNMENT
CONVENIENT ACCESS TO SECURITIES FUND
A BROAD RANGE OF TAX-FREE 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.
60
<PAGE>
[logo]
FORTIS MEANS STEADFAST
Fortis means "steadfast" in Latin. The worldwide Fortis family of companies
lives up to the name, and has each day since the 1800s, with flexible
solutions tailored to our customers' individual needs. We deliver the
stability you require today ... and tomorrow. You can count on it.
Fortis Financial Group provides a wide selection of investment products
including annuities, life insurance and mutual funds. We're part of Fortis,
Inc., a financial services company that provides specialty insurance and
investment products to individuals, businesses, associations and other
financial services organizations throughout the United States.
Fortis, Inc. is part of the international Fortis group, which operates in the
fields of insurance, banking and investments. Fortis' listed companies are
Fortis (B) of Belgium and Fortis (NL) of the Netherlands.
Fortis: steadfast for YOU!
FORTIS FINANCIAL GROUP
Fund management offered
through Fortis Advisers, Inc. since 1949
Securities offered through Fortis
Investors, Inc., member NASD, SIPC
Insurance products issued by
Fortis Benefits Insurance Company &
Fortis Insurance Company
P.O. Box 64284, St. Paul, MN 55164-0284
Telephone (800) 800-2000
http://www.ffg.us.fortis.com
FORTIS FINANCIAL GROUP
P.O. Box 64284
St. Paul, MN 55164-0284
Fortis Stock Funds
Bulk Rate
U.S. Postage
PAID
Permit No. 3794
Minneapolis, MN
[logo]
Printed on recycled paper with forty percent preconsumer waste and ten percent
post consumer waste. Please recycle.
The Fortis brandmark and Fortis-Registered Trademark- are servicemarks of
Fortis (B) and Fortis (NL).
98356 -C- Fortis, Inc. 4/00
