<PAGE>
A "DISCIPLINED GROWTH" approach
to mutual fund investing
[logo]
Fortis stock funds
annual report
August 31, 2000
FORTIS FINANCIAL GROUP
[PICTURE]
Fortis Asset Allocation Fund
Fortis Growth & Income Fund
Fortis Value 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 27
FORTIS CAPITAL APPRECIATION PORTFOLIO 30
STATEMENTS OF ASSETS AND LIABILITIES 33
STATEMENTS OF OPERATIONS 34
STATEMENTS OF CHANGES IN NET ASSETS
FORTIS ASSET ALLOCATION PORTFOLIO 35
FORTIS VALUE FUND 36
FORTIS GROWTH AND INCOME FUND 37
FORTIS CAPITAL FUND 38
FORTIS GROWTH FUND 39
FORTIS CAPITAL APPRECIATION PORTFOLIO 40
NOTES TO FINANCIAL STATEMENTS 41
INDEPENDENT AUDITORS' REPORT 57
FEDERAL INCOME TAX INFORMATION 58
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, Monday thru Friday
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 YEAR ENDED AUGUST 31, 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 year.......................... $ 18.43 $ 18.30 $ 18.22 $ 18.29 $ 18.44
End of year................................ $ 18.70 $ 18.55 $ 18.45 $ 18.53 $ 18.71
TOTAL RETURN 21.45% 20.84% 20.81% 20.78% 21.99%
DISTRIBUTIONS PER SHARE:
From net investment income................. $ 0.372 $ 0.271 $ 0.271 $ 0.271 $ 0.455
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 year.......................... $ 13.28 $ 13.06 $ 13.07 $ 13.07 --
End of year................................ $ 14.30 $ 13.94 $ 13.95 $ 13.95 --
TOTAL RETURN 15.76% 14.90% 14.90% 14.90% --
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 year.......................... $ 14.83 $ 14.77 $ 14.76 $ 14.76 --
End of year................................ $ 16.96 $ 16.82 $ 16.82 $ 16.82 --
TOTAL RETURN 16.73% 15.79% 15.87% 15.87% --
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 year.......................... $ 22.81 $ 21.77 $ 21.76 $ 21.78 --
End of year................................ $ 23.85 $ 22.27 $ 22.27 $ 22.30 --
TOTAL RETURN 32.70% 31.59% 31.66% 31.68% --
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 year.......................... $ 30.80 $ 29.26 $ 29.26 $ 29.28 $ 31.23
End of year................................ $ 45.45 $ 42.31 $ 42.32 $ 42.35 $ 46.35
TOTAL RETURN 82.06% 80.70% 80.74% 80.72% 82.51%
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 year.......................... $ 36.04 $ 34.91 $ 34.94 $ 34.94 --
End of year................................ $ 60.44 $ 57.66 $ 57.71 $ 57.72 --
TOTAL RETURN 115.84% 114.66% 114.60% 114.64% --
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 fund merges three major categories
of assets -- stocks, bonds and money
markets -- into one fund to 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
appreciate.
- FORTIS GROWTH & INCOME FUND
This fund invests in some of the world's
biggest, most established companies and
is Fortis' most conservative
large-company stock fund offering. The
fund seeks both capital appreciation
and income.
- FORTIS CAPITAL FUND
This fund has the distinction of being
Fortis' oldest and one of our most
popular large-company stock fund
offerings. The primary goal of the fund
is long-term growth.
- FORTIS GROWTH FUND
This fund has been a favorite of
generations of Fortis investors. It
invests in established, medium-size
companies which fund managers believe to
have the potential for above-average
earnings growth.
- FORTIS CAPITAL APPRECIATION FUND
Our small-company stock fund offers the
potential for high total returns. It's
the most volatile of the Fortis stock
funds because investing in small
companies generally involves more risk.
</TABLE>
1
<PAGE>
[FORTIS LOGO]
DEAR SHAREHOLDER:
To date, the capital markets in 2000 have been the most volatile ever recorded.
The year started robustly in terms of economic activity, strong corporate
profits, and ebullient equity markets. Just seven months later, the economy is
slowing appreciably, corporate profit expectations are being lowered, valuations
are lower and the equity market as measured by the S&P 500 is up only 3% which
is a marked change from the past several years. It has been a very challenging
environment for investors causing behavior to shift from one of maximizing
return with little regard for risk to one of preserving capital.
Growth of the economy in the first half was a record 6% in real terms. This
growth reflected a confident consumer and very strong profit growth for
corporations. These two important parts of the economy went on a buying spree in
the first few months of the year. Consumers benefitted from record bonus and
stock option payments, full employment, and early tax refunds which culminated
in significant spending on houses, automobiles, and in retail stores.
Corporations, flush with solid cash flow, having successfully negotiated Y2K,
and with high stock prices, spent heavily on new technology and increased merger
activity. Stocks soared. As the economy gathered steam, pricing power improved
for old economy industries and even those stocks attracted investor attention.
By early March, this buoyancy also attracted the attention of the Federal
Reserve which clearly was concerned about potential for increased inflation and
redoubled its efforts to slow consumer spending by raising interest rates. As a
result, the heady valuations in the equity market crumbled in a severe
correction resulting in stocks declining as much as 60% in a few weeks. In the
past several months, we have indeed seen the economy slow burdened with higher
interest rates. Consumer spending on housing and autos has declined and retail
sales are very soft. In the corporate arena, IPO activity has been extremely
light and many young companies are experiencing severe difficulty in accessing
the capital necessary to remain viable. Additionally, we now see that inflation
has risen, largely owing to higher energy prices, but also reflecting higher
employment costs. Margins are beginning to deteriorate and earnings expectations
are declining.
We believe that the work of the Federal Reserve to slow economic activity and
dampen inflation prospects is now done. The economy is expected to post 5%
growth for the year, down from the 6% rate of the first half, which implies
growth of approximately 4% for the second half. It is unlikely that inflation
will likely rise much above the current 3.5% rate before the year is over. With
this forecast, we expect that corporate profits will rise about 15%; a solid
increase. Within this environment, we expect the equity market to show some
improvement in the second half as investors start to focus on slower, but more
sustainable growth and appreciate the improved valuation levels that are now
available. We expect the stock market by year-end to be +/- 5% of where we
started the year. During this difficult and challenging period, we were able to
unwind some of our overweight in technology relatively early and benefitted from
an early move into energy stocks which has helped performance. We are confident
that our disciplined investment processes will continue to help us provide good
returns for our shareholders.
<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 8/31/2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Common Stock 60.9%
Corporate Bonds-Investment Grade 17.4%
U.S. Government Securities 10.0%
Corporate Bonds-Non-Investment Grade 7.2%
Asset Backed Securities 3.0%
Cash Equivalents/Receivables 1.5%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/2000
<TABLE>
<CAPTION>
Percent of
Securities Net Assets
-------------------------------------------------------------------
<C> <S> <C>
1. AES Corp. 1.8%
2. U.S. Treasury Note (6.50%) 2010 1.8%
3. Enron Corp. 1.6%
4. Dynegy, Inc. Class A 1.5%
5. Viacom, Inc. Class B 1.5%
6. Clear Channel Communications, Inc. 1.4%
7. Tyco International Ltd. 1.4%
8. HCA -- The Healthcare Co. 1.3%
9. General Electric Co. 1.2%
10. U.S. Treasury Zero Coupon Strip (6.40%) 2021 1.1%
</TABLE>
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 +20.84% +14.26% +15.61%+
Class B sharesDiamond Diamond +17.24% +14.05% +15.53%+
Class C sharesDiamond +20.81% +14.26% +15.55%+
Class C sharesDiamond Diamond +19.81% +14.26% +15.55%+
Class H sharesDiamond +20.78% +14.27% +15.60%+
Class H sharesDiamond Diamond +17.18% +14.06% +15.52%+
Class Z shares +21.99% -- +16.36%++
</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 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 With CDSC.
Diamond Diamond With CDSC. Assumes redemption on August 31, 2000.
+ Since November 14, 1994 -- Date shares were first offered to
the public.
++ 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 fiscal year ended August 31, 2000, proved to be another strong period for
the equity market. The combination of strong earnings growth fueled by a robust
economy and benign core inflation provided good overall market strength.
However, the market's path was choppy, mostly due to the uncertainty caused by
the Federal Reserve's (the "Fed") efforts to slow down the economy and prevent
inflation from resurfacing. Indeed, the Fed raised interest rates several times
during the period. These interest rate hikes had the effect of keeping a lid on
equity market performance for some time, because, it was suspected that,
corporate earnings growth would begin to slow. Meanwhile, the fixed income
markets, having already seen signs of a slowing economy and anticipating that
the Fed could engineer a soft-landing scenario for the economy, registered a
positive performance for the period. An investment environment such as this
underscores the advantage of an asset allocation fund.
For the fiscal year ended August 31, 2000, the Fortis Asset Allocation portfolio
advanced 21.45% for Class A before sales charge. This compares quite favorably
to an increase of 16.31% for the S&P 500 index. The Lehman Aggregate Bond Index
registered an increase of 7.56%. A combination of the above stock and bond
indices posted a gain of 15.89% for the same period.
The asset allocation of the fund was targeted at 60% stocks and 40% bonds at
mid-year 2000. This represents a gradual cutback in the equity portion of the
fund, which had been at a 65% weighting since last November. In the equity area,
an overweight position in technology and telecommunications early in the period
helped comparative performance results. Later in the period, technology and
telecommunications holdings were pared back in favor of greater energy and
healthcare exposure. The energy and healthcare sectors are now overweighted
versus the market while basic materials and consumer-related sectors are
underweighted. Our relative underexposure in the basic materials sector, in the
face of Fed interest rate hikes, contributed positively to performance while our
holdings in the services sector generally detracted from overall performance.
In the fixed income market, the 1.25% increase in Fed funds rates over the past
12-month period, Y2k concerns in 1999 and the Treasury curve inversion
(short-term interest rates exceeding long term interest rates) in 2000, all
combined with a volatile equity market adversely affected the market for
corporate bonds. Fears of an extensive supply of corporate bonds at the end of
1999, flight to quality and increased demand for short-duration instruments in
May 2000, caused liquidity to suffer. As a result, corporate and other
non-Treasury spreads (i.e. yield premiums over Treasuries) moved wider than
their October 1999 levels. We took advantage of the spread widening to increase
our exposure to corporate investment grade securities at the expense of the
lower-yielding mortgage-backed and asset-backed securities.
As some signs of slowdown started to show in economic releases during the past
three months, liquidity was partially restored and spreads moved tighter, but
only to the October 1999 levels. As a result, the best performing sector during
this period was the Treasury market as it benefited the most from the yield
curve inversion.
The capital markets have probably seen the last of the Federal Reserve interest
rate hikes, as signs appear that the economy is finally slowing. While valuation
risks remain relatively low given current inflationary trends, the effect of a
slowing economy on corporate earnings is uncertain. On the equity side, we will
be closely monitoring the trend in corporate earnings in the period ahead,
attempting to avoid the inevitable disappointments arising from a slowing
economy. On the fixed income side, 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 SEPTEMBER 1, 1990
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ASSET ALLOCATION PORTFOLIO
AVERAGE ANNUAL TOTAL RETURN 1 YEAR 5 YEAR 10 YEAR
<S> <C> <C> <C>
CLASS A* +15.68% +13.78% +13.58%
CLASS A** +21.45% +14.89% +14.13%
</TABLE>
<TABLE>
<CAPTION>
LEHMAN BROTHERS ASSET ALLOCATION PORTFOLIO
AGGREGATE BOND INDEX*** S&P 500**** CLASS A
<S> <C> <C> <C>
9/1/90 $10,000 $10,000 $9,525
91 $11,463 $12,688 $11,596
92 $13,009 $13,697 $12,966
93 $14,436 $15,770 $14,435
94 $14,218 $16,630 $14,976
95 $15,825 $20,198 $17,846
96 $16,475 $23,976 $18,690
97 $18,123 $33,729 $23,293
98 $20,038 $36,461 $23,923
99 $20,198 $50,980 $29,415
00 $21,503 $59,298 $35,724
</TABLE>
Annual period ended August 31
Past performance is not indicative of future performance. Investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1996, the portfolio had a sales
charge of 4.50%, and therefore, 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 8/31/2000
<TABLE>
<CAPTION>
ADDITIONS: ELIMINATIONS:
<S> <C>
ALZA Corp. Bristol-Myers Squibb Co.
Baxter International, Inc. (with rights) Cabletron Systems, Inc.
Calpine Corp. Forest Laboratories, Inc.
Coastal Corp. Masco Corp.
Corning, Inc. Merrill Lynch & Co., Inc.
Lehman Brothers Holdings, Inc. NCR Corp.
Morgan Stanley Dean Witter & Co. Potomac Electric Power Co.
Nabisco Holdings Corp. Class A Royal Dutch Petroleum Co. NY Shares
Pharmacia Corp. Tandy Corp. (with rights)
Qwest Communications International, Inc. Williams Companies, Inc.
</TABLE>
3
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 8/31/2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 41.1%
Finance-Depository Credit Banking 11.0%
Petroleum and Coal-Mining Support Activities 8.5%
Paper (Converted) Product Manufacturing 5.7%
Finance-Insurance Carriers 4.9%
Cash Equivalents/Receivables 4.7%
Health Care-General Medical and Surgical Hospitals 4.6%
Entertainment-Data Processing, Hosting and Related Services 4.4%
Information-Wired Telecommunications Carriers 4.2%
Professional Services-Computer Sys Design & Related 4.2%
Finance-Nondepository Credit Banking 3.5%
Paper, Pulp, and Paperboard Mills 3.2%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/2000
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
-------------------------------------------------------------------
<C> <S> <C>
1. Citigroup, Inc. 5.6%
2. Diamond Offshore Drilling, Inc. 3.7%
3. AT&T Corp. 3.4%
4. J.P. Morgan & Co., Inc. 3.4%
5. International Paper Co. 3.2%
6. Honeywell International, Inc. 3.2%
7. Sensormatic Electronics Corp. 3.2%
8. Kimberly-Clark Corp. 3.0%
9. Waste Management, Inc. 2.7%
10. Interpublic Group of Companies, Inc. 2.7%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
---------------------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +14.90% +14.37%
Class B sharesDiamond Diamond +11.30% +14.14%
Class C sharesDiamond +14.90% +14.39%
Class C sharesDiamond Diamond +13.90% +14.39%
Class H sharesDiamond +14.90% +14.39%
Class H sharesDiamond Diamond +11.30% +14.15%
</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 August 31, 2000.
+ Shares were first offered to the public January 2, 1996.
FORTIS VALUE FUND
QUALITY STOCKS, INEXPENSIVELY PRICED
For the fiscal year ended August 31, 2000, the Fortis Value Fund advanced 15.76%
for Class A before sales charge while the S&P Barra Value Index returned 9.33%.
The portfolio outperformed the index due to its relative underexposure in the
technology and telecommunications sectors, and its timely investments in
undervalued stocks with accelerating earnings growth.
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.
Coastal Corporation, UnitedHealth Group, and HCA -- The Healthcare Company were
among the fund's better performing stocks during the past year. Recently we have
added companies like Waste Management Incorporated and UnumProvident
Corporation, while exiting names such as CIGNA Corporation that no longer fit
our investment criteria. We also have a substantial position in oilfield
services. It is our belief 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.
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
AVERAGE ANNUAL TOTAL RETURN
SINCE
1 YEAR JANUARY 2, 1996@
<S> <C> <C>
CLASS A* +10.26% +14.03%
CLASS A** +15.76% +15.23%
</TABLE>
<TABLE>
<CAPTION>
BARRA VALUE FUND
VALUE*** CLASS A
<S> <C> <C>
1/2/96 $10,000 $9,525
96 $10,686 $10,239
97 $14,946 $13,174
98 $14,889 $12,843
99 $19,957 $15,938
00 $21,825 $18,450
</TABLE>
Annual period ended August 31
Past performance is not indicative of future performance. Investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%.
** These are the 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 8/31/2000
<TABLE>
<CAPTION>
ADDITIONS: ELIMINATIONS:
<S> <C>
AT&T Corp. American International Group, Inc.
Diamond Offshore Drilling, Inc. Bank of America Corp.
HCA -- The Healthcare Co. Baxter International, Inc. (with rights)
Honeywell International, Inc. Exxon Corp.
International Paper Co. Ford Motor Co.
Interpublic Group of Companies, Inc. Hewlett-Packard Co.
Kimberly-Clark Corp. MCI WorldCom, Inc.
Sensormatic Electronics Corp. Phillips Petroleum Co.
UnumProvident Corp. Pitney Bowes, Inc.
Waste Management, Inc. Raytheon Co. Class B
</TABLE>
4
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 8/31/2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 39.6%
Health Care - Pharmaceutical & Medicine Manufacturing 10.2%
Information - Other Telecommunications 6.8%
Computer Manufacturing - Semiconductor, Electronic
Components 6.2%
Finance - Insurance Carriers 5.3%
Petroleum and Coal - Products Manufacturing 4.9%
Entertainment - Newspaper, Periodical, Book and Database
Publishers 6.4%
Finance - Depository Credit Banking 4.2%
Utilities - Electric Generation, Transmission and
Distribution 5.0%
Cash Equivalents/Receivables 3.9%
Petroleum and Coal - Mining Support Activities 3.9%
Beverage Manufacturing 3.6%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/2000
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
-------------------------------------------------------------------
<C> <S> <C>
1. Dynegy, Inc. Class A 3.6%
2. Qwest Communications International, Inc. 3.1%
3. Biovail Corp., Conv. 6.75% 3.1%
4. AES Corp. 3.0%
5. Enron Corp. 2.7%
6. BP Amoco plc ADR 2.7%
7. SBC Communications, Inc. 2.5%
8. Echostar Communications Corp., 4.875% Conv. 2007 2.3%
9. HCA -- The Healthcare Co. 2.2%
10. Tyco International Ltd. 2.2%
</TABLE>
CLASS B, C AND H AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
---------------------------------------------------------------------------
<S> <C> <C>
Class B sharesDiamond +15.79% +13.69%
Class B sharesDiamond Diamond +12.19% +13.45%
Class C sharesDiamond +15.87% +13.69%
Class C sharesDiamond Diamond +14.87% +13.69%
Class H sharesDiamond +15.87% +13.69%
Class H sharesDiamond Diamond +12.27% +13.45%
</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 August 31, 2000.
+ Shares were first offered to the public January 2, 1996.
FORTIS GROWTH & INCOME FUND
CONSERVATIVE GROWTH WITH PERIODIC DIVIDENDS
The fiscal year ended August 31, 2000, proved to be another strong period for
equities, as the market continued to embrace strong corporate earnings growth
stemming from the robust economy. However, the period was marked by increased
volatility, and therefore, market direction was choppy. Strength late last year
and early this year, particularly in technology stocks, gave way to the
uncertainty over the effect on the economy of continued interest rate increases
by the Federal Reserve. Late in the period, some signs of a weaker economy
signaled a possible end to further interest rate increases. In fact, the Fed did
indeed pass on rate increases in each of its last two policy meetings in June
and August. However, further evidence of a slower economy seems necessary to
validate the end of rising interest rates.
For the fiscal year ended August 31, 2000, the Fortis Growth & Income Fund
advanced 16.73% for Class A before sales charge, while the S&P 500 index
returned 16.31%. This portfolio is generally less volatile than the S&P 500. The
fund's overweight position in energy contributed positively to performance
results, benefiting nicely from a surge in oil and gas prices during the period.
The fund's largest position, Dynegy Incorporated, an oil and gas pipeline
company, was among the portfolio's top performers. Also aiding performance
results was the fund's relative underweight in consumer cyclicals, a sector that
really felt the brunt of the Federal Reserve's interest rate hikes. Meanwhile,
an overexposure in the telecommunications and services sectors relative to the
market hurt comparative performance. Technology stocks have been somewhat
underweighted in the portfolio because they generally pay little or no
dividends.
The pace of ongoing economic expansion is still the main question facing
investors going forward. Looking ahead, we see the economy continuing to expand
but at a slower rate. While the economy still remains robust and earnings
prospects bright, higher interest rates could affect the valuation levels of
equities. Going forward, the investment approach for the fund continues to shift
toward a greater emphasis on growth versus current income. In this period of
high valuation of equities, 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>
GROWTH & INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
SINCE
1 YEAR JANUARY 2, 1996@
<S> <C> <C>
CLASS A* +11.19% +13.35%
CLASS A** +16.73% +14.54%
</TABLE>
<TABLE>
<CAPTION>
GROWTH & INCOME FUND
S&P 500*** CLASS A
<S> <C> <C>
1/2/96 $10,000 $9,525
96 $10,752 $9,916
97 $15,126 $12,792
98 $16,352 $13,151
99 $22,863 $15,366
00 $26,593 $17,937
</TABLE>
Annual period ended August 31
Past performance is not indicative of future performance. Investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%.
** These are the 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 8/31/2000
<TABLE>
<CAPTION>
ADDITIONS: ELIMINATIONS:
<S> <C>
Avon Products, Inc. Alltel Corp.
Biovail Corp., Conv. 6.75% AT&T Corp.
Lehman Brothers Holdings, Inc. Baker Hughes, Inc.
MediaOne Group, Inc., Conv. 7.00% Conoco, Inc. Class B
MetLife, Inc. Potomac Electric Power Co.
Microsoft Corp. Quaker Oats Co.
Northern Trust Corp. Qwest Trends Trust, Conv. 5.75%
Pfizer, Inc. (with rights) Texaco, Inc.
Texas Instruments, Inc. United Technologies Corp.
Tyco International Ltd. Williams Companies, Inc.
</TABLE>
5
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 8/31/2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 45.1%
Health Care-Pharmaceutical & Medicine Manufacturing 9.7%
Computer Manufacturing-Semiconductor, Electronic Components 8.5%
Entertainment-Motion Picture and Video Industries 6.4%
Utilities-Electric Generation, Transmission and Distribution 5.5%
Information-Other Telecommunications 5.0%
Petroleum and Coal-Mining Support Activities 4.5%
Finance-Insurance Carriers 4.2%
Information-Software Publishers 4.1%
Computer Manufacturing-Communications Equipment 3.2%
Petroleum and Coal-Products Manufacturing 3.0%
Cash Equivalents/Receivables 0.8%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/2000
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
-------------------------------------------------------------------
<C> <S> <C>
1. AES Corp. 3.1%
2. Enron Corp. 2.7%
3. Dynegy, Inc. Class A 2.5%
4. Viacom, Inc. Class B 2.4%
5. Tyco International Ltd. 2.3%
6. HCA -- The Healthcare Co. 2.2%
7. General Electric Co. 2.0%
8. PE Corp. -- PE Biosystems Group 1.9%
9. American International Group, Inc. 1.8%
10. Texas Instruments, Inc. 1.7%
</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 +31.59% +20.01% +20.91%
Class B sharesDiamond Diamond +27.99% +19.83% +20.85%
Class C sharesDiamond +31.66% +20.02% +20.91%
Class C sharesDiamond Diamond +30.66% +20.02% +20.91%
Class H sharesDiamond +31.68% +20.03% +20.93%
Class H sharesDiamond Diamond +28.08% +19.85% +20.87%
</TABLE>
Past performance is not indicative of future performance. Total returns include
reinvestment of all dividend and capital gains distributions. The performance of
the separate classes (A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class A has a maximum sales charge of 4.75%, Class B and H
have a CDSC of 4.00% if redeemed within two years of purchase, 3.00% if redeemed
in year three or four, 2.00% if redeemed in year fiive and 1.00% if redeemed in
year six (with a waiver of 10% of the amount invested). Class C has a CDSC of
1.00% if redeemed within one year of purchase.
Diamond Without CDSC.
Diamond Diamond With CDSC. Assumes redemption on August 31, 2000.
+ Since November 14, 1994 -- Date shares were first offered to
the public.
FORTIS CAPITAL FUND
LONG-TERM GROWTH THROUGH LARGER, ESTABLISHED COMPANIES
The fiscal year ended August 31, 2000, proved to be another strong period for
the equity market. The potent combination of strong earnings growth fueled by a
robust economy and benign core inflation provided good overall market strength.
However, the market's path was choppy, mostly due to the uncertainty caused by
the Federal Reserve's efforts to slow down the economy and prevent inflation
from resurfacing. Indeed, the Fed raised interest rates several times during the
period. These interest rate hikes had the effect of keeping a lid on equity
market performance for some time, because it was suspected that corporate
earnings growth would begin to slow. The market's advance was not broad,
however, as the higher growth sectors of the economy received most attention
from investors. At the same time, the broader market, comprising many of the
slower growing sectors of the economy, had to contend with effects of several
Federal Reserve rate hikes during the period. The divergence between these
market sectors was quite pronounced, especially last fall, but much less so in
more recent months.
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
fiscal year ended August 31, 2000, the fund reported an increase of 32.70% for
Class A before sales charge compared very favorably to a gain of 16.31% for the
S&P 500 index. An overweight position in technology and telecommunications early
in the period helped comparative performance results. Later in the period,
technology and telecommunications holdings were pared back in favor of greater
energy and healthcare exposure. The energy and healthcare sectors are now
overweighted versus the market while basic materials and consumer-related
sectors are underweighted. Our relative underexposure in the basic materials
sector, in the face of Federal Reserve interest rate hikes, contributed
positively to performance while our holdings in the services sector generally
detracted from overall performance.
Looking forward, investors continue to embrace 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. The capital markets have probably seen the end
of Federal Reserve interest rate hikes, as signs appear that the economy is
finally slowing. While valuation risks remain relatively low given current
inflationary trends, the effect of a slowing economy on corporate earnings is
uncertain. We will be closely monitoring the trend in corporate earnings in the
period ahead, attempting to avoid the inevitable disappointments arising from a
slowing economy. 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.
VALUE OF $10,000 INVESTED SEPTEMBER 1, 1975
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CAPITAL FUND
AVERAGE ANNUAL TOTAL RETURN 1 YEAR 5 YEAR 10 YEAR 25 YEARS
<S> <C> <C> <C> <C>
CLASS A* +26.39% +19.74% +17.64% +16.86%
CLASS A** +32.70% +20.92% +18.21% +17.09%
</TABLE>
<TABLE>
<CAPTION>
S&P 500 *** CAPITAL FUND CLASS A
<S> <C> <C>
9/2/75 10,000 9,525
76 12,314 11,056
77 12,094 10,622
78 13,604 13,453
79 15,185 14,869
80 17,938 21,191
81 18,886 23,917
82 19,511 28,323
83 28,072 43,897
84 29,810 42,425
85 35,354 48,983
86 49,105 70,300
87 66,064 89,417
88 54,330 68,333
89 75,529 98,299
90 71,766 92,557
91 91,060 118,883
92 98,298 131,679
93 113,176 142,056
94 119,348 157,052
95 144,951 190,809
96 172,065 197,222
97 242,059 265,414
98 261,670 269,559
99 365,867 371,663
00 425,560 493,189
</TABLE>
Annual period ended August 31
Past performance is not indicative of future performance. Investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1990, the portfolio had a sales
charge of 8.50%, and therefore, 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 8/31/2000
<TABLE>
<CAPTION>
ADDITIONS: ELIMINATIONS:
<S> <C>
ALZA Corp. Cabletron Systems, Inc.
Baxter International, Inc. (with rights) Forest Laboratories, Inc.
Calpine Corp. Masco Corp.
Clear Channel Communications, Inc. Merrill Lynch & Co., Inc.
Coastal Corp. Minnesota Mining and Manufacturing Co.
Corning, Inc. NCR Corp.
Morgan Stanley Dean Witter & Co. Potomac Electric Power Co.
Pfizer, Inc. (with rights) Royal Dutch Petroleum Co. NY Shares
Pharmacia Corp. Tandy Corp. (with rights)
Qwest Communications International, Inc. Williams Companies, Inc.
</TABLE>
6
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 8/31/2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 22.8%
Computer Manufacturing-Semiconductor, Electronic Component 14.8%
Health Care-Pharmaceutical & Medicine Manufacturing 10.1%
Information-Software Publishers 9.6%
Computer Manufacturing-Communications Equipment 9.2%
Petroleum and Coal-Mining Support Activities 8.6%
Cash Equivalents/Receivables 5.4%
Computer Manufacturing-Navigational, Measuring and Control
Instruments 5.7%
Utilities-Electric Generation, Transmission and Distribution 3.9%
Electrical Equipment Manufacturing-Component Other 3.3%
Information-Wired Telecommunications Carriers 3.3%
Professional Service-Computer Systems Design and Related
Services 3.3%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/2000
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
-------------------------------------------------------------------
<C> <S> <C>
1. Calpine Corp. 3.1%
2. CIENA Corp. 2.3%
3. SDL, Inc. 2.2%
4. Extreme Networks, Inc. 2.2%
5. Mercury Interactive Corp. 2.1%
6. Check Point Software Technologies Ltd. 2.0%
7. Waters Corp. 1.8%
8. BEA Systems, Inc. 1.8%
9. Biovail Corp. 1.7%
10. Celestica, Inc. 1.6%
</TABLE>
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 +80.70% +23.78% +25.47%+
Class B sharesDiamond Diamond +77.10% +23.62% +25.41%+
Class C SharesDiamond +80.74% +23.78% +25.47%+
Class C SharesDiamond Diamond +79.74% +23.78% +25.47%+
Class H sharesDiamond +80.72% +23.78% +25.48%+
Class H sharesDiamond Diamond +77.12% +23.63% +25.43%+
Class Z shares +82.51% -- +27.46%++
</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 August 31, 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 LEADER
During the 12 month period ended August 31, 2000, the Fortis Growth Fund posted
a 82.06% return for Class A before sales charge versus the S&P Mid Cap 400 which
posted a 39.74% return. 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 $2 billion and
$10 billion.
During the period under review, the fund's outperformance was attributable to
its overweight position in technology and energy stocks which significantly
outperformed during the year. During the past 12 months the fund benefited from
holdings such as Siebel Systems +473%, PE Biosystems +186%, and BEA Systems
+1,021%. 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. Stocks such as SDL,
Inc., which supplies optical components for telecommunication networks and
Peregrine Systems, which offers infrastructure management software are two
stocks we currently favor. Additionally, we see the recent rebound in energy
prices as a positive catalyst for many of the mid cap energy stocks. Within
energy we favor 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 generic pharmaceutical names
such as Andrx and genomic equipment suppliers such as Waters Corp. Lastly, we
continue to be underweight in consumer cyclical stocks.
Looking forward, we expect a slowing of U.S. domestic economic growth, moderate
inflation, and low interest rates. This "soft landing" scenario for the economy
would provide a positive background for U.S. stock prices, providing corporate
earnings hold up. The fund will continue to look for high growth companies with
well positioned products and superior services.
VALUE OF $10,000 INVESTED SEPTEMBER 1, 1990
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GROWTH FUND
AVERAGE ANNUAL TOTAL RETURN 1 YEAR 5 YEAR 10 YEAR
<S> <C> <C> <C>
CLASS A* +73.41% +23.47% +20.35%
CLASS A** +82.06% +24.68% +20.94%
</TABLE>
<TABLE>
<CAPTION>
GROWTH FUND
S&P 400 MIDCAP*** CLASS A
<S> <C> <C>
9/1/90 $10,000 $9,525
91 $13,788 $13,484
92 $14,914 $14,121
93 $18,423 $17,324
94 $19,270 $16,671
95 $23,222 $21,159
96 $25,982 $22,025
97 $35,664 $27,973
98 $32,318 $25,011
99 $45,736 $34,993
00 $63,912 $63,750
</TABLE>
Annual period ended August 31
Past performance is not indicative of future performance. Investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%.
** These are the 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.
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 8/31/2000
<TABLE>
<CAPTION>
ADDITIONS: ELIMINATIONS:
<S> <C>
ALZA Corp. Cypress Semiconductor Corp.
Biovail Corp. Electronics for Imaging, Inc.
Extreme Networks, Inc. Exodus Communications, Inc.
Flextronics International Ltd. Home Depot, Inc.
Intersil Holding Corp. Integrated Device Technology, Inc.
Interwoven, Inc. LSI Logic Corp.
Nabors Industries, Inc. MiniMed, Inc.
PerkinElmer, Inc. Royal Caribbean Cruises Ltd.
Smith International, Inc. Valassis Communications, Inc.
Weatherford International, Inc. Xilinx, Inc.
</TABLE>
7
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 8/31/2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 32.9%
Computer Manufacturing - Semiconductor, Electronic
Components 19.5%
Health Care - Pharmaceutical & Medicine Manufacturing 9.0%
Information - Software Publishers 6.5%
Professional Services - Computer Systems Design and Related 5.9%
Computer Manufacturing - Communications Equipment 5.7%
Information - Other Information Services 4.4%
Computer Manufacturing - Navigational, Measuring and Control
Instruments 3.7%
Cash Equivalents/Receivables 3.7%
Health Care - Scientific Research and Development Services 3.1%
Health Care - Health and Personal Care Stores 2.9%
Machinery Manufacturing - Industrial Machinery 2.7%
</TABLE>
TOP 10 HOLDINGS AS OF 8/31/2000
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
-------------------------------------------------------------------
<C> <S> <C>
1. TriQuint Semiconductor, Inc. 2.7%
2. Macrovision Corp. 2.0%
3. ArthroCare Corp. 1.8%
4. Medarex, Inc. 1.7%
5. Elantec Semiconductor, Inc. 1.7%
6. Plexus Corp. 1.7%
7. Newport Corp. 1.7%
8. Art Technology Group, Inc. 1.6%
9. Adept Technology, Inc. 1.6%
10. Accredo Health, Inc. 1.6%
</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 +114.66% +28.04% +30.54%
Class B sharesDiamond Diamond +111.06% +27.90% +30.49%
Class C sharesDiamond +114.60% +28.04% +30.55%
Class C sharesDiamond Diamond +113.60% +28.04% +30.55%
Class H sharesDiamond +114.64% +28.04% +30.55%
Class H sharesDiamond Diamond +111.04% +27.91% +30.51%
</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 August 31, 2000.
+ Since November 14, 1994 -- Date shares were first offered to
the public
FORTIS CAPITAL APPRECIATION PORTFOLIO
OPPORTUNITY THROUGH AMERICA'S ENTREPRENEURS
During the 12-month period ended August 31, 2000, the Fortis Capital
Appreciation Portfolio significantly outperformed both the Russell 2000 and the
Russell 2000 growth indices-the widely used benchmark for small capitalization
portfolios. The Fund posted a 115.84% return for Class A before sales charge
during the period versus a 27.39% return for the Russell 2000 Index. The fund
was ranked in the top 5th percentile of all small cap growth funds for the
trailing 12-month period as determined by Lipper.
The outperformance in the fund versus its benchmark is attributable to superior
stock selection in several sectors including health care and technology. Accredo
Health, up 87% during the 12-month period, Silicon Valley Bancshares up 184%,
Noven Pharmaceuticals up 224% and Triquent Semiconductor up 318%, are just a
handful of stocks that contributed to the strong performance. Going forward, we
continue to focus on technology in particular, semiconductor companies who
supply components to the wireless and telecommunications equipment companies
such as Triquent Semiconductor, Alpha Industries and Transwitch. We are also
investing in companies involved with bandwith management and buildout such as
Packeteer, Netro, Vyyo and Turnstone. In healthcare, we are investing in
genomics, which is an industry that we believe will revolutionize the drug
discovery process. Companies that have proprietary technology that are
benefiting from this trend are Orchid Biosciences, Variagenics and Biosource.
The portfolio's performance was also enhanced by its investment in Initial
Public Offerings.
Given the current economic backdrop of moderate economic growth, low inflation
and stabilizing interest rates we would expect small cap stocks (typically those
with a market capitalization up to $2 billion) to perform well over the next 12
months. Small cap stocks are still displaying superior revenue and earnings
growth rates and are trading at more reasonable valuations than large cap.
However, over the past 6 months, the valuation disparity between large and small
cap stocks has narrowed, therefore we do not expect the same type of
outperformance over the next 12 months. We continue to emphasize that the small
cap market is extremely volatile and investors need to take a longer-term
perspective while investing in this fund. We are confident the fund is well
positioned and invested in companies with very strong fundamentals and
management teams.
As of October 9, 2000, Lucinda S. Mezey, Diane M. Gotham and Michael J.
Romanowski are primarily responsible for the day-to-day management of Capital
Appreciation Fund.
VALUE OF $10,000 INVESTED SEPTEMBER 1, 1990
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CAPITAL APPRECIATION PORTFOLIO
AVERAGE ANNUAL TOTAL RETURN 1 YEAR 5 YEAR 10 YEAR
<S> <C> <C> <C>
CLASS A* +105.59% +27.47% +22.84%
CLASS A** +115.84% +28.72% +23.43%
</TABLE>
<TABLE>
<CAPTION>
CAPITAL
RUSSELL 2000 APPRECIATION PORTFOLIO
INDEX*** CLASS A
<S> <C> <C>
9/1/90 10,000 9,525
91 12,486 12,387
92 13,912 12,420
93 18,375 16,894
94 20,725 15,774
95 25,316 22,131
96 28,065 25,275
97 36,180 23,280
98 29,225 20,100
99 37,517 36,234
00 47,792 78,207
</TABLE>
Annual period ended August 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.75%. Prior to January 1, 1996, the portfolio had a sales charge
of 4.50%, and therefore, 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 8/31/2000
<TABLE>
<CAPTION>
ADDITIONS: ELIMINATIONS:
<S> <C>
Adept Technology, Inc. Advanced Digital Information Corp.
Art Technology Group, Inc. Eagle USA Airfreight, Inc.
AudioCodes Ltd. Emulex Corp.
Elantec Semiconductor, Inc. Galileo Technology Ltd.
Medarex, Inc. Harmonic, Inc.
Merix Corp. Insight Enterprises, Inc.
Newport Corp. MiniMed, Inc.
Plexus Corp. RF Micro Devices, Inc.
Silicon Valley Bancshares VeriSign, Inc.
Tanox, Inc. Young Broadcasting, Inc.
</TABLE>
8
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO
Schedule of Investments
August 31, 2000
COMMON STOCKS-60.85%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------ ------------
<C> <S> <C> <C>
BEVERAGE MANUFACTURING-1.69%
64,000 Panamerican Beverages, Inc. Class A.......... $ 1,139,441 $ 1,188,000
46,000 PepsiCo, Inc................................. 1,955,071 1,960,750
30,000 Seagram Co. Ltd.............................. 1,838,891 1,805,625
------------ ------------
4,933,403 4,954,375
------------ ------------
COMPUTER MANUFACTURING-AUDIO AND VIDEO
EQUIPMENT-0.53%
17,300 Gemstar-TV Guide International, Inc. (a)..... 1,108,164 1,561,325
------------ ------------
COMPUTER MANUFACTURING- COMMUNICATIONS
EQUIPMENT - 1.90%
19,000 ADC Telecommunications,
Inc. (with rights) (a)..................... 699,638 777,812
22,000 Cisco Systems, Inc. (a)...................... 909,638 1,507,000
14,800 Extreme Networks, Inc. (a)................... 817,236 1,377,325
33,500 Lucent Technologies, Inc..................... 2,027,775 1,400,719
14,000 Motorola, Inc................................ 510,965 504,875
------------ ------------
4,965,252 5,567,731
------------ ------------
COMPUTER MANUFACTURING- COMPUTER AND
PERIPHERAL EQUIPMENT-1.36%
7,000 EMC Corp. (a)................................ 649,159 686,000
9,000 Hewlett-Packard Co........................... 1,008,822 1,086,750
11,400 Sun Microsystems, Inc. (a)................... 814,059 1,447,087
6,500 VERITAS Software Corp. (a)................... 880,846 783,656
------------ ------------
3,352,886 4,003,493
------------ ------------
COMPUTER MANUFACTURING- NAVIGATIONAL,
MEASURING AND CONTROL INSTRUMENTS-0.95%
28,300 PE Corp. - PE Biosystems Group 745,575 2,784,012
------------ ------------
COMPUTER MANUFACTURING- SEMICONDUCTOR,
ELECTRONIC COMPONENT-5.01%
2,800 Applied Micro Circuits Corp. (a)............. 494,479 568,225
9,200 Celestica, Inc. (a).......................... 652,303 718,750
29,500 Intel Corp................................... 1,853,581 2,208,812
21,000 JDS Uniphase Corp. (a)....................... 1,400,830 2,617,125
20,000 Micron Technology, Inc. (a).................. 1,758,313 1,635,000
44,400 Texas Instruments, Inc....................... 1,902,844 2,972,025
69,700 Tyco International Ltd....................... 3,741,200 3,972,900
------------ ------------
11,803,550 14,692,837
------------ ------------
ELECTRICAL EQUIPMENT MANUFACTURING-COMPONENT
OTHER-1.38%
3,500 CIENA Corp. (a).............................. 303,432 775,906
10,000 Corning, Inc................................. 1,044,817 3,279,375
------------ ------------
1,348,249 4,055,281
------------ ------------
ENTERTAINMENT-CABLE AND OTHER SUBSCRIPTION
PROGRAMMING - 0.30%
37,000 USA Networks, Inc. (a)....................... 861,515 890,312
------------ ------------
ENTERTAINMENT-MOTION PICTURE AND VIDEO
INDUSTRIES-4.23%
96,000 AT&T Corp. - Liberty Media Corp. (a)......... 1,581,396 2,052,000
58,380 Clear Channel Communications, Inc. (a)....... 3,939,898 4,225,252
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------ ------------
<C> <S> <C> <C>
64,065 Viacom, Inc. Class B (a)..................... $ 2,374,957 $ 4,312,375
46,900 Walt Disney Co............................... 1,467,728 1,826,169
------------ ------------
9,363,979 12,415,796
------------ ------------
ENTERTAINMENT-NEWSPAPER, PERIODICAL, BOOK AND
DATABASE PUBLISHERS-1.35%
30,000 PRIMEDIA, Inc. (a)........................... 838,730 536,250
62,600 Reader's Digest Association, Inc. Class A.... 1,921,530 2,410,100
11,800 Time Warner, Inc............................. 910,364 1,008,900
------------ ------------
3,670,624 3,955,250
------------ ------------
FINANCE-AGENCIES, BROKERAGE AND OTHER
INSURANCE ACTIVITIES - 1.14%
26,400 Aon Corp..................................... 940,251 985,050
19,800 Marsh & McLennan Companies, Inc.............. 1,915,550 2,351,250
------------ ------------
2,855,801 3,336,300
------------ ------------
FINANCE-DEPOSITORY CREDIT BANKING-1.04%
19,000 Bank of New York Company, Inc................ 892,953 996,312
35,333 Citigroup, Inc............................... 1,378,160 2,062,583
------------ ------------
2,271,113 3,058,895
------------ ------------
FINANCE-INSURANCE CARRIERS - 3.12%
85,000 ACE Ltd...................................... 1,926,521 2,985,625
35,100 American International Group, Inc. 2,081,132 3,128,287
16,500 Hartford Financial Services Group, Inc....... 916,740 1,099,312
42,000 MetLife, Inc. (a)............................ 674,520 1,021,125
42,000 UnumProvident Corp........................... 939,979 910,875
------------ ------------
6,538,892 9,145,224
------------ ------------
FINANCE-NONDEPOSITORY CREDIT BANKING-0.85%
23,400 American Express Co.......................... 985,458 1,383,525
40,000 Associates First Capital Corp. Class A....... 1,024,356 1,125,000
------------ ------------
2,009,814 2,508,525
------------ ------------
FINANCE-SECURITIES AND COMMODITY CONTRACTS
AND BROKERAGE-1.66%
14,400 Lehman Brothers Holdings, Inc................ 1,701,852 2,088,000
25,800 Morgan Stanley Dean Witter & Co. 1,777,359 2,775,112
------------ ------------
3,479,211 4,863,112
------------ ------------
FOOD MANUFACTURING- OTHER - 0.73%
40,000 Nabisco Holdings Corp. Class A............... 1,851,632 2,137,500
------------ ------------
HEALTH CARE-GENERAL MEDICAL AND SURGICAL
HOSPITALS-1.33%
113,500 HCA - The Healthcare Co...................... 3,064,727 3,915,750
------------ ------------
HEALTH CARE-MEDICAL EQUIPMENT AND SUPPLIES
MANUFACTURING - 1.40%
28,000 Baxter International, Inc. (with rights)..... 2,126,188 2,331,000
34,400 Medtronic, Inc. (with rights)................ 1,091,842 1,763,000
------------ ------------
3,218,030 4,094,000
------------ ------------
</TABLE>
9
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
August 31, 2000
COMMON STOCKS-CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------ ------------
<C> <S> <C> <C>
HEALTH CARE-PHARMACEUTICAL AND MEDICINE
MANUFACTURING-5.37%
22,000 Abbott Laboratories.......................... $ 951,444 $ 962,500
34,300 ALZA Corp. (a)............................... 1,488,380 2,593,937
50,800 American Home Products Corp.................. 2,549,363 2,752,725
17,200 Amgen, Inc. (with rights) (a)................ 899,720 1,303,975
20,000 AstraZeneca Group plc ADR.................... 941,539 911,250
39,000 Biovail Corp. (a)............................ 2,019,889 2,498,438
46,950 Pfizer, Inc. (with rights)................... 1,501,041 2,030,588
46,000 Pharmacia Corp. (with rights)................ 2,558,473 2,693,875
------------ ------------
12,909,849 15,747,288
------------ ------------
HEALTH CARE-SCIENTIFIC RESEARCH AND
DEVELOPMENT SERVICES - 1.07%
10,700 Genentech, Inc. (a).......................... 1,068,058 2,038,350
22,000 Immunex Corp. (a)............................ 1,034,735 1,105,500
------------ ------------
2,102,793 3,143,850
------------ ------------
INFORMATION-OTHER INFORMATION SERVICES-1.13%
16,000 America Online, Inc. (a)..................... 920,026 938,000
7,400 Juniper Networks, Inc. (a)................... 1,135,746 1,581,750
6,500 Yahoo!, Inc. (a)............................. 843,907 789,750
------------ ------------
2,899,679 3,309,500
------------ ------------
INFORMATION-OTHER TELECOMMUNICATIONS-3.04%
250 @Track Communications,
Inc. (Warrants) (a)(e)..................... 4,547 2,500
25,200 Nextel Communications, Inc. (a).............. 772,780 1,397,025
21,800 Nortel Networks Corp......................... 943,161 1,778,063
53,900 Qwest Communications International,
Inc. (a)................................... 2,703,119 2,782,588
38,700 Sprint Corp.................................. 1,334,095 1,296,450
14,900 VoiceStream Wireless Corp. (a)............... 796,715 1,677,181
------------ ------------
6,554,417 8,933,807
------------ ------------
INFORMATION-SOFTWARE PUBLISHERS-2.53%
12,000 Adobe Systems, Inc........................... 1,409,277 1,560,000
21,000 Equant N.V. NY Shares (a).................... 891,219 807,188
34,700 Microsoft Corp. (a).......................... 3,463,127 2,422,494
6,000 Phone.com, Inc. (with rights) (a)............ 599,702 554,625
10,500 Siebel Systems, Inc. (a)..................... 1,815,428 2,068,500
------------ ------------
8,178,753 7,412,807
------------ ------------
MACHINERY MANUFACTURING- AGRICULTURE,
CONSTRUCTION AND MINING-0.28%
24,000 National-Oilwell, Inc. (a)................... 863,020 832,500
------------ ------------
MANUFACTURING- MISCELLANEOUS - 1.20%
60,200 General Electric Co.......................... 2,939,742 3,532,988
------------ ------------
MANUFACTURING-SOAP, CLEANING COMPOUND,
TOILET-0.43%
25,000 Colgate-Palmolive Co......................... 1,119,226 1,273,438
------------ ------------
PETROLEUM AND COAL-MINING SUPPORT
ACTIVITIES-2.84%
9,000 BJ Services Co. (a).......................... 445,353 603,000
22,000 Cooper Cameron Corp. (a)..................... 1,630,164 1,711,875
32,000 ENSCO International, Inc..................... 1,076,300 1,276,000
29,000 Global Marine, Inc. (a)...................... 807,116 937,063
27,000 Halliburton Co............................... 1,292,542 1,431,000
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------ ------------
<C> <S> <C> <C>
28,000 Schlumberger Ltd............................. $ 1,951,142 $ 2,388,750
------------ ------------
7,202,617 8,347,688
------------ ------------
PETROLEUM AND COAL-NATURAL GAS
DISTRIBUTION-1.65%
57,000 Enron Corp................................... 1,783,350 4,837,875
------------ ------------
PETROLEUM AND COAL-OIL AND GAS
EXTRACTION-0.96%
43,000 EOG Resources, Inc........................... 1,191,908 1,644,750
78,000 Ocean Energy, Inc. (a)....................... 1,144,492 1,184,625
------------ ------------
2,336,400 2,829,375
------------ ------------
PETROLEUM AND COAL-PRODUCTS
MANUFACTURING-1.88%
31,000 BP Amoco plc ADR............................. 1,575,813 1,712,750
35,000 Coastal Corp................................. 1,940,085 2,410,625
17,000 Exxon Mobil Corp............................. 1,239,126 1,387,625
------------ ------------
4,755,024 5,511,000
------------ ------------
PIPELINE-TRANSPORTATION OF NATURAL GAS-1.50%
98,000 Dynegy, Inc. Class A......................... 1,644,721 4,410,000
------------ ------------
PROFESSIONAL SERVICES- ADVERTISING AND
RELATED SERVICES-0.59%
45,000 Interpublic Group of Companies, Inc.......... 1,718,891 1,721,250
------------ ------------
PROFESSIONAL SERVICES- COMPUTER SYSTEMS
DESIGN AND RELATED-1.19%
5,900 Ariba, Inc. (a).............................. 882,632 928,513
32,000 Automatic Data Processing, Inc............... 1,678,478 1,908,000
6,300 Corvis Corp. (a)............................. 263,630 654,019
------------ ------------
2,824,740 3,490,532
------------ ------------
RETAIL-DEPARTMENT STORES - 0.28%
14,600 Kohl's Corp. (a)............................. 71,509 817,600
------------ ------------
RETAIL-GROCERY STORES-0.43%
25,500 Safeway, Inc. (a)............................ 976,984 1,257,469
------------ ------------
RETAIL-OTHER GENERAL MERCHANDISE STORES-0.38%
23,600 Wal-Mart Stores, Inc......................... 934,685 1,119,525
------------ ------------
TOBACCO MANUFACTURING-0.51%
50,500 Philip Morris Companies, Inc................. 1,274,606 1,496,063
------------ ------------
TRANSPORTATION-AIR SCHEDULED - 0.40%
16,000 Continental Airlines, Inc. Class B (a)....... 820,200 770,000
13,000 Northwest Airlines Corp. (a)................. 469,433 407,063
------------ ------------
1,289,633 1,177,063
------------ ------------
UTILITIES-ELECTRIC GENERATION, TRANSMISSION
AND DISTRIBUTION - 3.22%
82,000 AES Corp. (a)................................ 2,045,808 5,227,500
28,000 Calpine Corp. (a)............................ 1,946,000 2,772,000
19,500 Duke Energy Corp............................. 1,320,920 1,458,844
------------ ------------
5,312,728 9,458,344
------------ ------------
TOTAL COMMON STOCKS.......................... $137,135,784 $178,599,680
============ ============
</TABLE>
10
<PAGE>
ASSET BACKED SECURITIES-2.99%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
CAPTIVE RETAIL FINANCE-1.54%
$1,000,000 Citibank Credit Card Master Trust I, 6.90%
Ser 1999-7 Class B 11-15-2006.............. A $ 985,235 $ 988,000
2,000,000 Sears Credit Account Master Trust, 6.40% Ser
1997-1 Class B 7-16-2007................... A 1,944,571 1,964,540
1,500,000 Standard Credit Card Master Trust, 8.45% Ser
1995-1 Class B 1-7-2007.................... A 1,581,993 1,563,357
------------ ------------
4,511,799 4,515,897
------------ ------------
FINANCE-COMMERCIAL BANKING-0.86%
700,000 Midland Realty Acceptance Corp., 7.73%
Variable Rate Ser 1996-C1 Class B
8-25-2028.................................. AA 706,764 712,115
1,750,000 Mortgage Capital Funding, Inc., 7.90% Ser
1996-MC1 Class B 2-15-2006................. AA+ 1,761,856 1,799,262
------------ ------------
2,468,620 2,511,377
------------ ------------
HOME IMPROVEMENT FINANCE-0.25%
750,000 Money Store Home Improvement Trust, 7.41% Ser
1997-1 Class M1 5-15-2017.................. AA 752,806 746,828
------------ ------------
MULTI-FAMILY LOANS-0.34%
1,000,000 DLJ Mortgage Acceptance Corp., 8.80%
Multifamily Mtg Pass Thru Certificate Ser
1993-12 Class B1 9-18-2003................. NR 982,500 996,688
------------ ------------
TOTAL ASSET BACKED SECURITIES................ $ 8,715,725 $ 8,770,790
============ ============
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-17.37%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
ACCOMMODATION AND FOOD SERVICE-TRAVELER-0.17%
$ 500,000 Park Place Entertainment Corp., 8.50% Sr Note
11-15-2006................................. BBB- $ 495,517 $ 504,347
------------ ------------
BEVERAGE MANUFACTURING-0.31%
500,000 Coca-Cola Bottling Co., 6.375% Deb
5-1-2009................................... BBB 497,058 453,053
500,000 Pepsi Bottling Group, Inc., 7.00% Sr Note Ser
B 3-1-2029................................. A- 496,653 454,849
------------ ------------
993,711 907,902
------------ ------------
CAPTIVE AUTO FINANCE-0.72%
1,000,000 DaimlerChrysler N.A. Holding Corp., 7.40%
Global Note 1-20-2005...................... A+ 999,337 1,004,520
500,000 Ford Motor Co., 6.375% Deb 2-1-2029.......... A 464,509 411,038
500,000 General Motors Acceptance Corp., 6.15% Global
Bond 4-5-2007.............................. A 498,554 465,560
250,000 Toyota Motor Credit Corp., 5.625% Global Note
11-13-2003................................. AAA 249,726 240,717
------------ ------------
2,212,126 2,121,835
------------ ------------
CHEMICAL MANUFACTURING-BASIC CHEMICAL
MANUFACTURING-0.08%
250,000 Equistar Chemicals, L.P., 8.75% Sr Note
2-15-2009.................................. BBB- 261,302 246,752
------------ ------------
COMPUTER MANUFACTURING-COMMUNICATIONS
EQUIPMENT-0.15%
500,000 Lucent Technologies, Inc., 6.45% Global Bond
3-15-2029.................................. A 497,351 431,168
------------ ------------
COMPUTER MANUFACTURING-COMPUTER AND
PERIPHERAL EQUIPMENT-0.17%
500,000 Hewlett-Packard Co., 7.15% Global Note
6-15-2005.................................. AA- 498,396 505,732
------------ ------------
COMPUTER MANUFACTURING-NAVIGATIONAL,
MEASURING AND CONTROL INSTRUMENTS-0.29%
500,000 Lockheed Martin Corp., 7.65% Deb 5-1-2016.... BBB- 502,638 483,328
400,000 Raytheon Co., 7.20% Deb 8-15-2027............ BBB- 352,830 364,150
------------ ------------
855,468 847,478
------------ ------------
COMPUTER MANUFACTURING-SEMICONDUCTOR,
ELECTRONIC COMPONENT-0.22%
750,000 Tyco International Group S.A., 6.875% Yankee
Bond 1-15-2029............................. A- 756,630 657,622
------------ ------------
</TABLE>
11
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
August 31, 2000
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
ENTERTAINMENT-CABLE AND OTHER SUBSCRIPTION
PROGRAMMING-0.25%
$ 250,000 Comcast Cable Communications, 8.375% Note
5-1-2007................................... BBB $ 277,949 $ 259,500
500,000 Cox Communications, Inc., 6.40% Note
8-1-2008................................... BBB+ 510,824 465,785
------------ ------------
788,773 725,285
------------ ------------
ENTERTAINMENT-MOTION PICTURE AND VIDEO
INDUSTRIES-0.33%
500,000 Seagram (Joseph) & Sons, Inc., 6.625% Sr Note
12-15-2005................................. BBB- 474,005 486,069
500,000 Viacom, Inc., 7.625% Sr Deb 1-15-2016........ BBB+ 541,229 497,475
------------ ------------
1,015,234 983,544
------------ ------------
ENTERTAINMENT-RADIO AND TELEVISION
BROADCASTING-0.08%
250,000 AT&T Corp. - Liberty Media, 8.25% Deb
2-1-2030................................... BBB- 248,007 235,739
------------ ------------
FINANCE-COMMERCIAL BANKING-0.95%
500,000 BankAmerica Corp., 6.20% Sub Note
2-15-2006.................................. A 477,439 476,519
255,000 Citicorp Capital I, 7.933% 2-15-2027......... A 238,525 240,998
250,000 Keycorp Capital II, 6.875% Bond 3-17-2029.... BBB 247,381 199,235
500,000 Mellon Financial Co., 6.375% Sub Note
2-15-2010.................................. A 501,881 463,439
500,000 National City Corp., 6.875% Sub Note
5-15-2019.................................. A- 499,149 442,577
500,000 NBD Bancorp, 7.125% Sub Note 5-15-2007....... A- 494,988 488,734
500,000 St. Paul Bancorp, Inc., 7.125% Sr Note
2-15-2004.................................. BBB 498,717 488,660
------------ ------------
2,958,080 2,800,162
------------ ------------
FINANCE-CONSUMER LENDING-0.75%
500,000 Aristar, Inc., 7.25% Sr Note 6-15-2006....... A- 498,319 485,511
750,000 CIT Group, Inc., 7.375% Global Note
3-15-2003.................................. A+ 749,316 750,778
1,000,000 Household Finance Corp., 6.00% Global Note
5-1-2004................................... A 999,833 954,401
------------ ------------
2,247,468 2,190,690
------------ ------------
FINANCE-CREDIT CARD ISSUING-0.17%
500,000 Providian National Bank, 6.75% Sr Note
3-15-2002.................................. BBB- 499,823 494,442
------------ ------------
FINANCE-DEPOSITORY CREDIT BANKING-0.44%
750,000 Bank One Corp., 7.625% Global Note
8-1-2005................................... A 748,520 757,541
600,000 Republic NY Capital I, 7.75% Deb
11-15-2026................................. A- 529,988 531,098
------------ ------------
1,278,508 1,288,639
------------ ------------
FINANCE-INSURANCE CARRIERS-0.66%
250,000 American General Corp., 6.625% Sr Note
2-15-2029.................................. AA- 238,465 218,082
500,000 Prudential Insurance Co., 6.375% Sr Note
7-23-2006 (e).............................. A+ 498,265 469,598
500,000 ReliaStar Financial Corp., 6.625% Note
9-15-2003.................................. A 511,314 489,981
750,000 ReliaStar Financial Corp., 8.00% Note
10-30-2006................................. A 747,559 767,522
------------ ------------
1,995,603 1,945,183
------------ ------------
FINANCE-INTERNATIONAL TRADE FINANCING-0.34%
500,000 BSCH Issuance Ltd., 7.625% 11-3-2009......... A 487,312 501,765
250,000 LB Baden-Wuerttemberg, 7.625% Yankee Sub Note
2-1-2023................................... AAA 281,474 251,849
250,000 Swiss Bank Corp. New York, 7.00% Sub Deb
10-15-2015................................. AA 235,135 235,226
------------ ------------
1,003,921 988,840
------------ ------------
FINANCE-SALES FINANCING-0.46%
500,000 Finova Capital Corp., 7.625% Sr Note
9-21-2009.................................. BBB+ 496,945 328,868
500,000 General Electric Capital Corp., 7.375% Medium
Term Note 1-19-2010........................ AAA 496,435 512,480
500,000 Textron Financial Corp., 7.125% Global Note
12-9-2004.................................. A- 497,794 499,640
------------ ------------
1,491,174 1,340,988
------------ ------------
FINANCE-SECURITIES AND COMMODITY CONTRACTS
AND BROKERAGE-0.84%
500,000 Bear Stearns Capital Trust I, 7.00% Variable
Rate Note 1-15-2027........................ BBB 499,721 488,009
250,000 Goldman Sachs Group, Inc., 6.50% Medium Term
Note Ser A 2-25-2009 (e)................... A+ 250,000 230,741
500,000 Goldman Sachs Group, Inc., 6.65% Note
5-15-2009.................................. A+ 499,090 470,345
500,000 Lehman Brothers Holdings, Inc., 7.875% Note
11-1-2009.................................. A 510,462 500,454
</TABLE>
12
<PAGE>
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
$ 750,000 Morgan Stanley Dean Witter & Co., 7.75%
Global Note 6-15-2005...................... AA- $ 757,481 $ 766,097
------------ ------------
2,516,754 2,455,646
------------ ------------
FOREIGN GOVERNMENTS-0.89%
250,000 British Columbia (Province of), 6.50% Yankee
Bond Ser BCUSD-2 1-15-2026................. AA- 255,747 230,116
250,000 Korea (Republic of), 8.875% Global Bond
4-15-2008.................................. BBB 262,122 265,000
340,000 Novia Scotia, 9.50% Yankee Deb 2-1-2019...... A- 404,989 409,666
500,000 Ontario (Province of), 5.50% Sr Global Bond
10-1-2008.................................. AA- 497,489 455,273
500,000 Ontario (Province of), 7.375% Sr Global Bond
1-27-2003.................................. AA- 522,607 505,376
250,000 Poland (Republic of), 7.125% Yankee Note
7-1-2004................................... BBB+ 249,226 247,500
500,000 Quebec (Province of), 7.50% Deb 9-15-2029.... A+ 499,001 506,821
------------ ------------
2,691,181 2,619,752
------------ ------------
FOREIGN GOVERNMENTS-AGENCIES-0.08%
250,000 Korea Development Bank, 7.125% Global Note
4-22-2004.................................. BBB 248,609 244,417
------------ ------------
FOREIGN GOVERNMENTS-SUPRA-NATIONAL-0.60%
750,000 Corp Andina de Fomento, 7.10% Yankee Bond
2-1-2003................................... A 749,801 737,417
500,000 Inter-American Development Bank, 7.375% Bond
1-15-2010.................................. AAA 498,180 515,995
500,000 International Bank for Reconstruction &
Development, 7.00% Global Note 1-27-2005... AAA 497,728 503,991
------------ ------------
1,745,709 1,757,403
------------ ------------
INFORMATION-CABLE AND OTHER PROGRAM
DISTRIBUTION-0.33%
500,000 Time Warner, Inc., 6.875% Sr Deb 6-15-2018... BBB 506,305 449,666
500,000 Time Warner, Inc., 8.11% Note 8-15-2006...... BBB 507,196 517,075
------------ ------------
1,013,501 966,741
------------ ------------
INFORMATION-OTHER TELECOMMUNICATIONS-0.44%
375,000 Impsat Fiber Networks, Inc., 13.75% Sr Note
2-15-2005.................................. B 375,000 322,500
250,000 Telecomunicaciones de Puerto Rico, 6.65% Sr
Sub Note 5-15-2006......................... BBB 249,922 237,091
750,000 WorldCom, Inc., 6.125% 4-15-2002............. A- 736,309 736,837
------------ ------------
1,361,231 1,296,428
------------ ------------
INFORMATION-TELECOMMUNICATIONS CARRIERS-0.32%
250,000 AirTouch Communications, 6.65% Note
5-1-2008................................... A- 253,738 235,610
500,000 Century Telephone Enterprises, Inc., 6.15% Sr
Note 1-15-2005............................. BBB+ 499,488 462,386
250,000 Vodafone Airtouch plc, 7.875% Deb
2-15-2030 (e).............................. A- 246,755 248,944
------------ ------------
999,981 946,940
------------ ------------
INFORMATION-WIRED TELECOMMUNICATIONS
CARRIERS-1.12%
500,000 360 Communications Co., 7.50% Sr Note
3-1-2006................................... A 499,261 499,290
500,000 ALLTEL Corp., 6.80% Deb 5-1-2029............. A- 496,935 420,355
750,000 AT&T Corp., 6.00% Note 3-15-2009............. AA- 748,431 666,103
500,000 GTE Corp., 7.51% Note 4-1-2009............... A+ 496,754 497,365
500,000 Sprint Capital Corp., 5.875% Global Note
5-1-2004................................... BBB+ 498,104 475,566
750,000 US West Communications, 7.20% Note
11-1-2004.................................. A 749,667 743,231
------------ ------------
3,489,152 3,301,910
------------ ------------
MACHINERY MANUFACTURING-AGRICULTURE,
CONSTRUCTION AND MINING-0.25%
750,000 Caterpillar, Inc., 7.25% Deb 9-15-2009....... A+ 748,679 735,614
------------ ------------
MANUFACTURING-MOTOR VEHICLE-0.16%
500,000 Ford Motor Co., 7.45% Global Note
7-16-2031.................................. A 471,903 464,750
------------ ------------
MANUFACTURING-MOTOR VEHICLE PARTS-0.17%
500,000 TRW, Inc., 6.50% Sr Note 6-1-2002............ BBB 496,733 491,164
------------ ------------
MANUFACTURING-SOAP, CLEANING COMPOUND,
TOILET-0.59%
1,750,000 Proctor & Gamble Co., 6.875% Global Bond
9-15-2009.................................. AA 1,752,266 1,729,275
------------ ------------
PAPER, PULP AND PAPERBOARD MILLS-0.17%
500,000 Fort James Corp., 6.50% Sr Note 9-15-2002.... BBB- 499,726 489,399
------------ ------------
</TABLE>
13
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
August 31, 2000
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
PETROLEUM AND COAL-MINING SUPPORT
ACTIVITIES-0.16%
$ 500,000 Petroleum Geo-Services ASA, 6.25% Yankee Bond
11-19-2003................................. BBB $ 498,513 $ 477,655
------------ ------------
PETROLEUM AND COAL-NATURAL GAS
DISTRIBUTION-0.08%
250,000 Enron Corp., 6.95% Note 7-15-2028............ BBB+ 226,065 226,185
------------ ------------
PETROLEUM AND COAL-OIL AND GAS
EXTRACTION-0.16%
500,000 Conoco, Inc., 6.95% Sr Note 4-15-2029........ A- 467,278 460,536
------------ ------------
PETROLEUM AND COAL-PRODUCTS
MANUFACTURING-0.36%
500,000 Chevron Corp., 6.625% Note 10-1-2004......... AA 498,450 495,837
500,000 Texaco Capital, Inc., 8.625% Deb 6-30-2010... A+ 549,573 549,504
------------ ------------
1,048,023 1,045,341
------------ ------------
PIPELINE-TRANSPORTATION OF NATURAL GAS-0.82%
500,000 CMS Panhandle Holding Co., 7.00% Sr Note
7-15-2029.................................. BBB- 495,787 431,998
500,000 NGC Corp. Capital Trust I, 8.316% Sub Deb Ser
B 6-1-2027................................. BBB- 500,000 428,580
600,000 PG&E Gas Transmission, 7.10% Sr Note
6-1-2005................................... A- 588,894 601,304
750,000 Tennessee Gas Pipeline Co., 7.50% Deb
4-1-2017................................... BBB+ 739,027 721,866
250,000 Trans-Canada Pipelines Ltd., 6.49% Yankee
Bond 1-21-2009............................. A- 251,579 231,958
------------ ------------
2,575,287 2,415,706
------------ ------------
PUBLIC-EXECUTIVE, LEGISLATIVE AND GOVERNMENT
SUPPORT-0.18%
400,000 New York (City of), 10.00% General Obligation
Taxable Bond Ser D 8-1-2005................ Aaa* 404,666 422,780
100,000 New York (City of), 10.00% General Obligation
Taxable Bond Ser D 8-1-2005................ A2* 96,456 105,695
------------ ------------
501,122 528,475
------------ ------------
REAL ESTATE, RENTAL AND LEASING-AUTOMOTIVE
EQUIPMENT RENTAL AND LEASING-0.16%
500,000 Ryder System, Inc., 6.60% Note Ser P
11-15-2005................................. BBB+ 499,867 466,881
------------ ------------
REAL ESTATE, RENTAL AND LEASING-INDUSTRIAL
MACHINERY AND EQUIPMENT-0.17%
500,000 Comdisco, Inc., 9.50% Sr Note 8-15-2003...... BBB+ 498,906 501,759
------------ ------------
RETAIL-DEPARTMENT STORES-0.46%
1,000,000 Dayton Hudson Corp., 5.875% Note 11-1-2008... A- 974,429 911,410
500,000 Federated Department Stores, 6.30% Note
4-1-2009................................... BBB+ 498,784 440,555
------------ ------------
1,473,213 1,351,965
------------ ------------
RETAIL-GROCERY STORES-0.23%
750,000 Ahold Finance USA, Inc., 6.25% Sr Deb
5-1-2009................................... A- 744,468 665,210
------------ ------------
RETAIL-OTHER GENERAL MERCHANDISE STORES-0.26%
750,000 Wal-Mart Stores, Inc., 6.875% Global Note
8-1-2002................................... AA 749,697 751,829
------------ ------------
TRANSPORTATION-AIR SCHEDULED-0.08%
250,000 Delta Air Lines, Inc., 6.65% Medium Term Note
3-15-2004.................................. BBB- 249,860 235,545
------------ ------------
TRANSPORTATION-RAIL-0.25%
750,000 CSX Corp., 7.90% Deb 5-1-2017................ BBB 732,787 733,533
------------ ------------
UTILITIES-ELECTRIC GENERATION, TRANSMISSION
AND DISTRIBUTION-0.96%
500,000 Alabama Power Co., 7.125% Sr Note
10-1-2007.................................. A 498,386 489,024
500,000 Detroit Edison Co., 7.50% First Mtg Ser A
2-1-2005................................... A- 499,285 502,142
500,000 Duke Energy Corp., 6.00% Sr Note Ser A
12-1-2028.................................. A+ 488,312 405,379
500,000 Madison Gas & Electric Co., 6.02% Sr Note
9-15-2008.................................. AA- 500,000 455,934
189,024 Niagara Mohawk Power Co., 7.625% Sr Note Ser
F 10-1-2005................................ BBB- 185,337 188,555
750,000 TXU Electric Capital V, 8.175% Deb
1-30-2037.................................. BBB- 750,000 775,838
------------ ------------
2,921,320 2,816,872
------------ ------------
WHOLESALERS-GROCERY AND RELATED
PRODUCTS-0.07%
250,000 Sysco Corp., 6.50% Deb 8-1-2028.............. AA- 251,228 222,126
------------ ------------
WHOLESALERS-LUMBER AND OTHER CONSTRUCTION
MATERIALS-0.21%
600,000 Georgia-Pacific Corp., 9.625% Deb
3-15-2022.................................. BBB- 616,932 613,889
------------ ------------
</TABLE>
14
<PAGE>
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
WHOLESALERS-PAPER AND PAPER PRODUCT-0.26%
$ 750,000 Kimberly Clark Corp., 7.10% Note 8-1-2007.... AA $ 749,993 $ 760,292
------------ ------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE..... $ 52,937,076 $ 50,989,586
============ ============
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-7.16%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
CHEMICAL MANUFACTURING-BASIC CHEMICAL
MANUFACTURING-0.17%
$ 500,000 Lyondell Chemical Co., 9.875% Sr Secured Note
Ser B 5-1-2007............................. BB $ 500,000 $ 508,125
------------ ------------
COMPUTER MANUFACTURING-SEMICONDUCTOR,
ELECTRONIC COMPONENT-0.18%
500,000 Fairchild Semiconductor Corp., 10.375% Sr Sub
Note 10-1-2007............................. B 507,499 515,000
------------ ------------
ENTERTAINMENT-CABLE AND OTHER SUBSCRIPTION
PROGRAMMING-0.51%
500,000 Adelphia Communications Corp., 9.375% Sr Note
11-15-2009................................. B+ 496,219 465,000
500,000 CSC Holdings, Inc., 10.50% Sr Sub Deb
5-15-2016.................................. BB- 506,940 537,500
500,000 Ekabel Hessen GMBH, 14.50% Sr Note
9-1-2010 (e)............................... B- 493,464 498,750
------------ ------------
1,496,623 1,501,250
------------ ------------
ENTERTAINMENT-RADIO AND TELEVISION
BROADCASTING-0.33%
250,000 Ackerley Group, Inc., 9.00% Sr Sub Note Ser B
1-15-2009.................................. B 232,918 236,250
504,088 Australis Media Ltd. Sr Disc Note
5-15-2003 (Zero coupon through 5-15-2000,
thereafter
15.75%) (with warrants) (a)(e)............. D 401,365 5
500,000 Sinclair Broadcast Group, Inc., 10.00% Sr Sub
Note 9-30-2005............................. B 493,188 491,250
250,000 Spanish Broadcasting System, Inc., 9.625% Sr
Sub 11-1-2009.............................. B- 245,495 248,750
------------ ------------
1,372,966 976,255
------------ ------------
FINANCE-INSURANCE CARRIERS-0.05%
250,000 Conseco, Inc., 8.75% Note 2-9-2004........... BB- 249,881 155,000
------------ ------------
FOOD SERVICE-LIMITED-SERVICE EATING
PLACES-0.18%
500,000 Sbarro, Inc., 11.00% Sr Note 9-15-2009....... BB- 493,909 521,250
------------ ------------
FOREIGN GOVERNMENTS-0.14%
400,000 Brazil (Republic of), 11.625% Global Bond
4-15-2004.................................. B+ 397,085 416,600
------------ ------------
HEALTH CARE-GENERAL MEDICAL AND SURGICAL
HOSPITALS-0.17%
250,000 HCA-The Healthcare Co., 8.75% Note
9-1-2010................................... BB+ 248,827 251,537
250,000 Triad Hospitals Holdings, Inc., 11.00% Sr Sub
Note Ser B 5-15-2009....................... B- 251,422 261,250
------------ ------------
500,249 512,787
------------ ------------
HEALTH CARE-MEDICAL AND DIAGNOSTIC
LABORATORIES-0.04%
100,000 Unilab Finance Corp., 12.75% Sr Sub Note
10-1-2009.................................. B- 97,402 108,000
------------ ------------
INFORMATION-CABLE AND OTHER PROGRAM
DISTRIBUTION-0.71%
600,000 Charter Communications Holdings LLC, 9.92% Sr
Disc Note 4-1-2011 (Zero coupon through
4-1-2004, thereafter 9.92%) (g)............ B+ 428,308 360,000
500,000 Mediacom LLC/Capital Corp., 7.875% Sr Note
2-15-2011.................................. B+ 493,535 437,500
500,000 NTL Communications Corp., 12.57% Sr Note Ser
B 10-1-2008 (Zero coupon through 10-1-2003,
thereafter 12.375%) (g).................... B- 342,182 323,125
750,000 United International Holdings, Inc., 12.42%
Sr Disc Note Ser B 2-15-2008 (Zero coupon
through 2-15-2003, thereafter
10.75%) (g)................................ B- 536,333 525,000
500,000 United Pan-Europe Communications N.V., 11.25%
Sr Note Ser B 11-1-2009.................... B 496,490 433,750
------------ ------------
2,296,848 2,079,375
------------ ------------
INFORMATION-OTHER INFORMATION SERVICES-0.55%
750,000 Exodus Communications, Inc., 11.625% Sr Note
7-15-2010 (e).............................. B 753,214 763,125
250,000 Globix Corp., 12.50% Sr Note 2-1-2010........ B- 251,793 190,000
</TABLE>
15
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
August 31, 2000
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
$ 750,000 PSINet, Inc., 11.00% Sr Note 8-1-2009........ B- $ 714,820 $ 647,812
------------ ------------
1,719,827 1,600,937
------------ ------------
INFORMATION-OTHER TELECOMMUNICATIONS-0.77%
250,000 Flag Telecom Holdings Ltd., 11.625% Sr Note
3-30-2010.................................. B 250,000 226,875
500,000 Global Crossing Holdings Ltd., 9.50% Sr
Yankee Note 11-15-2009..................... BB 489,181 501,250
250,000 Level 3 Communications, Inc., 12.875% Sr Disc
Note 3-15-2010 (Zero coupon through
3-15-2005, thereafter 12.875%) (g)......... B 143,035 141,875
750,000 Level 3 Communications, Inc., 9.125% Sr Note
5-1-2008................................... B 728,578 672,187
250,000 Metromedia Fiber Network, Inc., 10.00% Sr
Note 12-15-2009............................ B+ 248,097 246,875
500,000 Williams Communications Group, Inc., 10.875%
Sr Note 10-1-2009.......................... B+ 496,445 481,875
------------ ------------
2,355,336 2,270,937
------------ ------------
INFORMATION-TELECOMMUNICATIONS CARRIERS-0.51%
500,000 Dobson Communications, 10.875% Sr Note
7-1-2010 (e)............................... NR 496,264 496,875
250,000 Grupo Iusacell S.A. de C.V., 14.25% Sr Yankee
Note 12-1-2006............................. B+ 259,946 270,313
250,000 Nextel Communications, Inc., 11.65% Sr Disc
Note 9-15-2007 (Zero coupon through
9-15-2002, thereafter 10.65%) (g).......... B 192,265 203,750
750,000 Telecorp PCS, Inc., 11.41% Sr Sub Note
4-15-2009 (Zero coupon through 4-15-2004,
thereafter 11.625%) (g).................... B3* 506,465 517,500
------------ ------------
1,454,940 1,488,438
------------ ------------
INFORMATION-WIRED TELECOMMUNICATIONS
CARRIERS-1.02%
500,000 Alaska Communications SY, 9.375% Sr Sub Note
5-15-2009.................................. B+ 500,000 457,500
250,000 Focal Communications, Corp., 11.875% Sr Note
1-15-2010.................................. B- 244,455 227,500
500,000 Hyperion Telecommunications, 12.25% Sr Note
Ser B 9-1-2004............................. BB- 532,583 480,000
500,000 Intermedia Communications, Inc., 8.50% Sr
Note Ser B 1-15-2008....................... B 474,501 412,500
500,000 Madison River Capital LLC/Madison River
Finance Corp., 13.25% Sr Note 3-1-2010..... CCC+ 493,341 415,000
500,000 NEXTLINK Communications, 10.50% Sr Disc Note
12-1-2009 (Zero coupon through 12-1-2004,
thereafter 12.125%) (g).................... B 304,783 278,750
750,000 Nextlink Communications, 10.50% Sr Note
12-1-2009.................................. B 750,000 712,500
------------ ------------
3,299,663 2,983,750
------------ ------------
MACHINERY MANUFACTURING-INDUSTRIAL
MACHINERY-0.07%
200,000 Better Minerals & Aggregates, 13.00% Sr Sub
Note 9-15-2009............................. B- 200,000 194,000
------------ ------------
MANUFACTURING-MOTOR VEHICLE PARTS-0.15%
400,000 Holley Performance Products, 12.25% Sr Sub
Note Ser B 9-15-2007....................... B+ 386,467 240,000
250,000 Tenneco Automotive, Inc., 11.625% Sr Sub Note
Ser B 10-15-2009........................... B+ 250,000 215,000
------------ ------------
636,467 455,000
------------ ------------
PAPER, PULP AND PAPERBOARD MILLS-0.17%
500,000 Packaging Corp. of America, 9.625% Sr Sub
Note 4-1-2009.............................. B+ 511,970 512,500
------------ ------------
PETROLEUM AND COAL-OIL AND GAS
EXTRACTION-0.27%
250,000 Ocean Energy, Inc., 8.875% Sr Sub Note Ser B
7-15-2007.................................. BB- 253,081 255,000
250,000 Pioneer Natural Resources Co., 9.625% Sr Note
4-1-2010................................... BB+ 249,139 266,379
250,000 Swift Energy Co., 10.25% Sr Sub Note
8-1-2009................................... B- 250,798 258,438
------------ ------------
753,018 779,817
------------ ------------
PRIMARY METAL MANUFACTURING-PRODUCT FROM
PURCHASED STEEL-0.09%
250,000 AK Steel Corp., 9.125% Sr Note 12-15-2006.... BB 249,428 250,625
------------ ------------
RECEATION-AMUSEMENT PARKS AND ARCADES-0.11%
500,000 Six Flags, Inc., 11.67% Sr Disc Note
4-1-2008 (Zero coupon through 4-1-2003,
thereafter 10.00%) (g)..................... B- 352,456 336,250
------------ ------------
RECREATION-GAMBLING INDUSTRIES-0.65%
250,000 Isle of Capri Casinos, Inc., 8.75% Sub Note
4-15-2009.................................. B 224,804 234,375
500,000 Mandalay Resort Group, 7.625% Sr Sub Deb
7-15-2013.................................. BB- 432,146 412,500
750,000 Park Place Entertainment Corp., 9.375% Sr Sub
Note 2-15-2007............................. BB+ 763,031 769,688
250,000 Station Casinos, Inc., 8.875% Sr Sub Note
12-1-2008.................................. B+ 235,003 238,125
</TABLE>
16
<PAGE>
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
$ 250,000 Station Casinos, Inc., 9.875% Sr Sub Note
7-1-2010 (e)............................... B+ $ 249,024 $ 248,750
------------ ------------
1,904,008 1,903,438
------------ ------------
UTILITIES-ELECTRIC GENERATION, TRANSMISSION
AND DISTRIBUTION-0.17%
500,000 AES Corp., 9.50% Sr Note 6-1-2009............ BB 502,072 508,125
------------ ------------
UTILITIES-WATER, SEWAGE AND OTHER
SYSTEMS-0.06%
250,000 Azurix Corp., 10.75% Sr Note
2-15-2010 (f).............................. BB 250,896 191,250
------------ ------------
WOOD PRODUCT MANUFACTURING-ENGINEERED
WOOD-0.09%
250,000 Doman Industries, 12.00% Yankee Note
7-1-2004................................... B+ 258,653 255,000
------------ ------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... $ 22,361,196 $ 21,023,709
============ ============
</TABLE>
U.S. GOVERNMENT SECURITIES-10.00%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
----------- ------------ ------------
<C> <S> <C> <C>
FEDERAL HOME LOAN MORTGAGE CORPORATION -
0.33%
MORTGAGE BACKED SECURITIES:
$ 999,900 7.00% 2030................................... $ 967,260 $ 975,527
------------ ------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 3.50%
MORTGAGE BACKED SECURITIES:
2,863,383 6.00% 2013-2014.............................. 2,772,826 2,738,076
269,597 6.30% 2008................................... 269,888 258,878
2,830,324 6.50% 2015................................... 2,777,408 2,757,355
237,255 7.50% 2027................................... 243,620 235,661
422,777 8.00% 2025................................... 429,184 426,674
83,809 9.00% 2016-2021.............................. 82,299 86,271
------------ ------------
6,575,225 6,502,915
------------ ------------
NOTES:
500,000 7.125% 2030.................................. 520,233 516,260
3,125,000 7.25% 2010-2030.............................. 3,243,124 3,246,405
------------ ------------
3,763,357 3,762,665
------------ ------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 10,338,582 10,265,580
------------ ------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -
0.69%
MORTGAGE BACKED SECURITIES:
1,250,000 7.00% 2028................................... 1,217,587 1,226,953
757,641 9.00% 2023................................... 782,264 783,447
15,983 9.50% 2019................................... 15,853 16,602
------------ ------------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION................................ 2,015,704 2,027,002
------------ ------------
OTHER DIRECT FEDERAL OBLIGATIONS - 0.40%
TENNESSEE VALLEY AUTHORITY:
1,300,000 5.375% 2008.................................. 1,171,644 1,176,975
------------ ------------
U.S. TREASURY SECURITIES - 5.08%
BONDS:
6,100,000 6.16% 2019 Zero Coupon (g)................... 1,714,203 2,067,406
11,500,000 6.40% 2021 Zero Coupon (g)................... 3,051,828 3,344,649
2,000,000 10.375% 2012................................. 2,403,210 2,488,126
------------ ------------
7,169,241 7,900,181
------------ ------------
</TABLE>
17
<PAGE>
FORTIS STOCK FUNDS
ASSET ALLOCATION PORTFOLIO (CONTINUED)
Schedule of Investments
August 31, 2000
U.S. GOVERNMENT SECURITIES-CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
----------- ------------ ------------
<C> <S> <C> <C>
NOTES:
$ 800,000 4.75% 2008................................... $ 701,410 $ 739,500
365,000 5.75% 2010................................... 362,833 365,342
5,000,000 6.50% 2010................................... 5,156,183 5,218,750
670,000 6.75% 2005................................... 687,313 690,728
------------ ------------
6,907,739 7,014,320
------------ ------------
TOTAL U.S. TREASURY SECURITIES............... 14,076,980 14,914,501
------------ ------------
TOTAL U.S. GOVERNMENT SECURITIES............. 28,570,170 29,359,585
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $249,719,951 $288,743,350
============ ============
</TABLE>
SHORT-TERM INVESTMENTS-0.95%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
FINANCE-DEPOSITORY CREDIT BANKING-0.95%
$ 7,234 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate - 6.42%......... $ 7,234
1,749,000 Wells Fargo Associates Corp., Master Variable
Rate Note, Current rate - 6.49%............ 1,749,000
1,040,470 Wells Fargo Cash Investment Money Market
Fund, Current rate - 6.27%................. 1,040,470
------------
TOTAL SHORT-TERM INVESTMENTS................. 2,796,704
------------
TOTAL INVESTMENTS IN SECURITIES
(COST: $252,516,655) (b)................... $291,540,054
============
</TABLE>
(a) Presently non-income producing. For long-term debt securities, items
identified are in default as to payment of interest and/or principal.
(b) At August 31, 2000, the cost of securities for federal income tax purposes
was $252,579,508 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 46,143,741
Unrealized depreciation..................................... (7,183,195)
--------------------------------------------------------------------------
Net unrealized appreciation................................. $ 38,960,546
--------------------------------------------------------------------------
</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 9.36% of total net assets as of August 31, 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 secirities:
<TABLE>
<CAPTION>
Period Acquired Shares/Par Security Cost Basis
--------------- ---------- -------- ----------
<S> <C> <C> <C>
1997 250 @Track Communications, Inc. (Warrants) -
144A $ 4,547
1997 504,088 Australis Media Ltd. due 2003 401,365
2000 500,000 Dobson Communications due 2010 - 144A 496,264
2000 500,000 Ekabel Hessen GMBN due 2010 - 144A 493,464
2000 750,000 Exodus Communications, Inc. due 2010 -
144A 753,214
1999 250,000 Goldman Sachs Group, Inc., due 2009 -
144A 250,000
1998 500,000 Prudential Insurance Co. due 2006 - 144A 498,265
2000 250,000 Station Casinos, Inc. due 2010 - 144A 249,024
2000 250,000 Vodafone Airtouch plc due 2030 - 144A 246,755
</TABLE>
The aggregate value of these securities at August 31, 2000, was
$2,959,288, which represents 1.01% 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, this issue is deemed to be liquid. The aggregate value of this
security at August 31, 2000, was $191,250, which represents .07% of total
net assets.
(g) The interest rate disclosed for these securities represents the effective
yield on the date of acquisition.
* Moody's Rating
18
<PAGE>
FORTIS STOCK FUNDS
VALUE FUND
Schedule of Investments
August 31, 2000
COMMON STOCKS-95.33%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ----------- -----------
<C> <S> <C> <C>
AEROSPACE PRODUCT AND PARTS
MANUFACTURING-3.21%
49,200 Honeywell International, Inc................. $ 2,389,892 $ 1,897,275
----------- -----------
BEVERAGE MANUFACTURING-0.04%
1,300 Panamerican Beverages, Inc. Class A 22,417 24,131
----------- -----------
CHEMICAL MANUFACTURING-BASIC CHEMICAL
MANUFACTURING-2.09%
34,000 Air Products and Chemicals, Inc.............. 1,104,641 1,234,625
----------- -----------
COMPUTER MANUFACTURING-COMPUTER AND
PERIPHERAL EQUIPMENT-0.62%
6,000 Apple Computer, Inc. (a)..................... 272,312 365,625
----------- -----------
COMPUTER MANUFACTURING- SEMICONDUCTOR,
ELECTRONIC COMPONENT - 1.06%
11,000 Tyco International Ltd....................... 585,850 627,000
----------- -----------
COURIERS-2.39%
35,000 FedEx Corp. (a).............................. 1,402,982 1,412,250
----------- -----------
ENTERTAINMENT-CABLE AND OTHER SUBSCRIPTION
PROGRAMMING-2.40%
59,000 USA Networks, Inc. (a)....................... 1,360,972 1,419,687
----------- -----------
ENTERTAINMENT-DATA PROCESSING, HOSTING AND
RELATED SERVICES - 4.42%
23,500 Affiliated Computer Services, Inc. (a)....... 835,961 1,094,219
31,800 First Data Corp.............................. 1,424,261 1,516,462
----------- -----------
2,260,222 2,610,681
----------- -----------
FINANCE-CONSUMER LENDING - 1.14%
14,000 Household International, Inc................. 495,155 672,000
----------- -----------
FINANCE-DEPOSITORY CREDIT BANKING-11.03%
22,000 Chase Manhattan Corp......................... 1,127,245 1,229,250
56,167 Citigroup, Inc............................... 1,619,112 3,278,729
12,000 J.P. Morgan & Co., Inc....................... 1,576,098 2,006,250
----------- -----------
4,322,455 6,514,229
----------- -----------
FINANCE-INSURANCE CARRIERS-4.94%
19,000 ACE Ltd...................................... 420,582 667,375
11,000 MGIC Investment Corp......................... 386,184 646,937
74,000 UnumProvident Corp........................... 1,493,369 1,604,875
----------- -----------
2,300,135 2,919,187
----------- -----------
FINANCE-NONDEPOSITORY CREDIT BANKING-3.50%
15,000 Fannie Mae................................... 807,298 806,250
30,000 Freddie Mac.................................. 1,294,059 1,263,750
----------- -----------
2,101,357 2,070,000
----------- -----------
HEALTH CARE-GENERAL MEDICAL AND SURGICAL
HOSPITALS-4.62%
44,000 HCA - The Healthcare Co...................... 991,571 1,518,000
39,000 Tenet Healthcare Corp. (a)................... 881,809 1,209,000
----------- -----------
1,873,380 2,727,000
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ----------- -----------
<C> <S> <C> <C>
INFORMATION-SOFTWARE PUBLISHERS - 1.07%
20,000 Computer Associates International, Inc....... $ 1,050,682 $ 635,000
----------- -----------
INFORMATION-WIRED TELECOMMUNICATIONS
CARRIERS - 4.25%
64,400 AT&T Corp.................................... 2,218,886 2,028,600
11,000 Verizon Communications....................... 614,724 479,875
----------- -----------
2,833,610 2,508,475
----------- -----------
MACHINERY MANUFACTURING-OTHER GENERAL
PURPOSE-1.25%
21,200 Parker-Hannifin Corp......................... 919,265 738,025
----------- -----------
MANUFACTURING-MOTOR VEHICLE - 0.98%
8,000 General Motors Corp.......................... 566,393 577,500
----------- -----------
MANUFACTURING-MOTOR VEHICLE PARTS-1.39%
50,000 Delphi Automotive Systems Corp............... 832,826 821,875
----------- -----------
MANUFACTURING-SOAP, CLEANING COMPOUND,
TOILET-1.06%
16,000 Avon Products, Inc........................... 592,680 627,000
----------- -----------
PAPER (CONVERTED) PRODUCT MANUFACTURING-5.70%
14,800 Abitibi-Consolidated, Inc.................... 160,398 165,575
54,000 Georgia-Pacific Group........................ 1,596,713 1,444,500
30,000 Kimberly-Clark Corp.......................... 1,730,435 1,755,000
----------- -----------
3,487,546 3,365,075
----------- -----------
PAPER, PULP AND PAPERBOARD MILLS - 3.24%
60,000 International Paper Co....................... 2,206,815 1,912,500
----------- -----------
PETROLEUM AND COAL-MINING SUPPORT
ACTIVITIES-8.45%
49,000 Diamond Offshore Drilling, Inc............... 1,625,420 2,195,812
23,000 Halliburton Co............................... 849,888 1,219,000
39,000 Tidewater, Inc............................... 1,303,388 1,574,625
----------- -----------
3,778,696 4,989,437
----------- -----------
PETROLEUM AND COAL-PRODUCTS
MANUFACTURING-1.24%
29,000 Conoco, Inc. Class A......................... 648,918 730,438
----------- -----------
PRIMARY METAL MANUFACTURING- ALUMINA AND
ALUMINUM PRODUCTION - 2.65%
47,000 Alcoa, Inc................................... 1,461,307 1,562,750
----------- -----------
PROFESSIONAL SERVICES-ACCOUNTING, TAX
PREPARATION AND PAYROLL-0.47%
15,000 American Management Systems, Inc. (a)........ 585,064 280,313
----------- -----------
PROFESSIONAL SERVICES-ADVERTISING AND RELATED
SERVICES-2.72%
42,000 Interpublic Group of Companies, Inc.......... 1,719,871 1,606,500
----------- -----------
</TABLE>
19
<PAGE>
FORTIS STOCK FUNDS
VALUE FUND (CONTINUED)
Schedule of Investments
August 31, 2000
COMMON STOCKS-CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ----------- -----------
<C> <S> <C> <C>
PROFESSIONAL SERVICES- ARCHITECTURAL,
ENGINEERING AND RELATED-1.16%
22,800 Fluor Corp................................... $ 934,126 $ 682,575
----------- -----------
PROFESSIONAL SERVICES-COMPUTER SYSTEMS DESIGN
AND RELATED-4.18%
30,000 Convergys Corp. (a).......................... 1,220,187 1,173,750
26,000 Electronic Data Systems Corp................. 1,652,564 1,295,125
----------- -----------
2,872,751 2,468,875
----------- -----------
PUBLIC-ADMINISTRATION OF ENVIRONMENTAL
QUALITY PROGRAMS - 2.72%
85,000 Waste Management, Inc........................ 1,543,635 1,609,688
----------- -----------
RETAIL-DEPARTMENT STORES-2.41%
51,500 Federated Department Stores, Inc. (a) 2,043,703 1,422,688
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ----------- -----------
<C> <S> <C> <C>
RETAIL-ELECTRONICS AND APPLIANCE STORES-1.40%
14,000 RadioShack Corp. (with rights)............... $ 591,944 $ 826,000
----------- -----------
TOBACCO MANUFACTURING-1.15%
23,000 Philip Morris Companies, Inc................. 943,714 681,375
----------- -----------
UTILITIES-ELECTRIC GENERATION, TRANSMISSION
AND DISTRIBUTION - 3.23%
10,000 Duke Energy Corp............................. 579,957 748,125
56,000 Edison International......................... 1,198,367 1,158,500
----------- -----------
1,778,324 1,906,625
----------- -----------
WASTE MANAGEMENT,
ADMINISTRATIVE-INVESTIGATION AND SECURITY
SERVICES-3.15%
112,000 Sensormatic Electronics Corp. (a)............ 1,662,340 1,862,000
----------- -----------
TOTAL COMMON STOCKS.......................... $53,545,980 $56,308,404
=========== ===========
</TABLE>
SHORT-TERM INVESTMENTS-5.68%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
---------- -----------
<C> <S> <C>
FEDERAL HOME LOAN MORTGAGE CORPORATION-2.54%
$1,500,000 Federal Home Loan Mortgage Corp., 6.55%,
8-12-2000.................................. $ 1,496,780
-----------
FINANCE-DEPOSITORY CREDIT BANKING-2.57%
1,158 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate - 6.42%......... 1,158
876,000 Wells Fargo Associates Corp., Master Variable
Rate Note, Current rate - 6.49%............ 876,000
641,991 Wells Fargo Cash Investment Money Market
Fund, Current rate - 6.27%................. 641,992
-----------
1,519,150
-----------
U.S. TREASURY BILLS-0.57%
240,000 U.S. Treasury Bill, 6.01%, 10-5-2000 (e)..... 238,635
100,000 U.S. Treasury Bill, 6.17%, 10-12-2000........ 99,302
-----------
337,937
-----------
TOTAL SHORT-TERM INVESTMENTS................. 3,353,867
-----------
TOTAL INVESTMENTS IN SECURITIES
(COST: $56,899,847) (b).................... $59,662,271
===========
</TABLE>
(a) Presently not paying dividend income.
(b) At August 31, 2000, the cost of securities for federal income tax purposes
was $57,234,954 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 6,473,256
Unrealized depreciation..................................... (4,045,939)
--------------------------------------------------------------------------
Net unrealized appreciation................................. $ 2,427,317
--------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets. Market value of investments in foreign
securities represents 1.45% of total net assets as of August 31, 2000.
(e) Security pledged as initial margin deposit for open long financial futures
position detailed below:
<TABLE>
<CAPTION>
Market Value Unrealized
Number of Covered by Appreciation
Issuer Contract(s) Contract(s) Expiration at 8/31/00
------ ----------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Standard & 1 $380,300 September 2000 $2,300
Poor's 500
</TABLE>
20
<PAGE>
FORTIS STOCK FUNDS
GROWTH & INCOME FUND
Schedule of Investments
August 31, 2000
COMMON STOCKS-82.66%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ----------- -----------
<C> <S> <C> <C>
BEVERAGE MANUFACTURING-3.64%
4,700 Anheuser-Busch Companies, Inc................ $ 327,501 $ 370,419
19,000 Panamerican Beverages, Inc. Class A.......... 336,573 352,687
10,000 PepsiCo, Inc................................. 421,572 426,250
7,600 Seagram Co. Ltd.............................. 469,062 457,425
----------- -----------
1,554,708 1,606,781
----------- -----------
COMPUTER MANUFACTURING- COMMUNICATIONS
EQUIPMENT-1.62%
3,600 Cisco Systems, Inc. (a)...................... 176,738 246,600
8,200 Lucent Technologies, Inc..................... 494,994 342,862
3,500 Motorola, Inc................................ 127,741 126,219
----------- -----------
799,473 715,681
----------- -----------
COMPUTER MANUFACTURING-COMPUTER AND
PERIPHERAL EQUIPMENT-1.51%
1,800 EMC Corp. (a)................................ 166,927 176,400
1,600 International Business Machines Corp......... 203,196 211,200
2,200 Sun Microsystems, Inc. (a)................... 227,579 279,262
----------- -----------
597,702 666,862
----------- -----------
COMPUTER MANUFACTURING- SEMICONDUCTOR,
ELECTRONIC COMPONENT-5.45%
3,200 Celestica, Inc. (a).......................... 218,232 250,000
5,800 Intel Corp................................... 412,177 434,275
11,000 Texas Instruments, Inc....................... 574,236 736,312
17,200 Tyco International Ltd....................... 925,655 980,400
----------- -----------
2,130,300 2,400,987
----------- -----------
ELECTRICAL EQUIPMENT MANUFACTURING - 2.00%
15,000 General Electric Co.......................... 699,867 880,312
----------- -----------
ELECTRICAL EQUIPMENT MANUFACTURING- COMPONENT
OTHER-1.15%
1,550 Corning, Inc................................. 161,998 508,303
----------- -----------
ENTERTAINMENT-MOTION PICTURE AND VIDEO
INDUSTRIES-2.02%
6,835 Viacom, Inc. Class B (a)..................... 310,936 460,081
11,000 Walt Disney Co............................... 330,566 428,312
----------- -----------
641,502 888,393
----------- -----------
ENTERTAINMENT-NEWSPAPER, PERIODICAL, BOOK AND
DATABASE PUBLISHERS-4.58%
14,500 McGraw-Hill Companies, Inc................... 562,569 898,094
5,300 PRIMEDIA, Inc. (a)........................... 168,624 94,737
20,700 Reader's Digest Association, Inc. Class A.... 663,218 796,950
2,700 Time Warner, Inc............................. 208,304 230,850
----------- -----------
1,602,715 2,020,631
----------- -----------
FINANCE-AGENCIES, BROKERAGE AND OTHER
INSURANCE ACTIVITIES-2.23%
5,700 Aon Corp..................................... 202,128 212,681
6,500 Marsh & McLennan Companies, Inc.............. 452,462 771,875
----------- -----------
654,590 984,556
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ----------- -----------
<C> <S> <C> <C>
FINANCE-DEPOSITORY CREDIT BANKING - 4.20%
8,667 Citigroup, Inc............................... $ 333,782 $ 505,917
3,500 J.P. Morgan & Co., Inc....................... 501,413 585,156
9,000 Northern Trust Corp.......................... 451,085 758,812
----------- -----------
1,286,280 1,849,885
----------- -----------
FINANCE-INSURANCE CARRIERS-5.35%
8,700 American International Group, Inc............ 383,449 775,387
4,500 Hartford Financial Services Group, Inc....... 250,020 299,812
16,800 John Hancock Financial Services, Inc. (a).... 285,600 424,200
26,000 MetLife, Inc. (a)............................ 370,500 632,125
10,500 UnumProvident Corp........................... 218,382 227,719
----------- -----------
1,507,951 2,359,243
----------- -----------
FINANCE-NONDEPOSITORY CREDIT BANKING-0.57%
9,000 Associates First Capital Corp. Class A....... 228,920 253,125
----------- -----------
FINANCE-SECURITIES AND COMMODITY CONTRACTS
AND BROKERAGE-1.18%
3,600 Lehman Brothers Holdings, Inc................ 425,480 522,000
----------- -----------
FOOD MANUFACTURING-OTHER FOOD - 1.21%
10,000 Nabisco Holdings Corp. Class A............... 463,315 534,375
----------- -----------
HEALTH CARE-GENERAL MEDICAL AND SURGICAL
HOSPITALS-2.23%
28,500 HCA - The Healthcare Co...................... 744,174 983,250
----------- -----------
HEALTH CARE-MEDICAL EQUIPMENT AND SUPPLIES
MANUFACTURING-1.30%
6,900 Baxter International, Inc. (with rights)..... 523,448 574,425
----------- -----------
HEALTH CARE-PHARMACEUTICAL AND MEDICINE
MANUFACTURING-5.98%
5,000 Abbott Laboratories.......................... 218,529 218,750
17,900 American Home Products Corp.................. 963,848 969,956
4,500 AstraZeneca Group plc ADR.................... 212,730 205,031
12,350 Pfizer, Inc. (with rights)................... 422,318 534,138
12,100 Pharmacia Corp. (with rights)................ 434,495 708,606
----------- -----------
2,251,920 2,636,481
----------- -----------
INFORMATION-OTHER INFORMATION SERVICES-0.49%
3,700 America Online, Inc. (a)..................... 213,944 216,913
----------- -----------
INFORMATION-OTHER TELECOMMUNICATIONS-6.84%
2,500 Nortel Networks Corp......................... 196,626 203,906
26,856 Qwest Communications International,
Inc. (a)................................... 889,676 1,386,421
26,500 SBC Communications, Inc...................... 965,374 1,106,375
9,500 Sprint Corp.................................. 328,141 318,250
----------- -----------
2,379,817 3,014,952
----------- -----------
INFORMATION-SOFTWARE PUBLISHERS - 2.77%
2,100 Adobe Systems, Inc........................... 240,725 273,000
4,000 Equant N.V. NY Shares (a).................... 171,086 153,750
</TABLE>
21
<PAGE>
FORTIS STOCK FUNDS
GROWTH & INCOME FUND (CONTINUED)
Schedule of Investments
August 31, 2000
COMMON STOCKS-CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ----------- -----------
<C> <S> <C> <C>
11,400 Microsoft Corp. (a).......................... $ 1,034,250 $ 795,863
----------- -----------
1,446,061 1,222,613
----------- -----------
MANUFACTURING-SOAP, CLEANING COMPOUND,
TOILET-2.31%
18,000 Avon Products, Inc........................... 580,716 705,375
6,100 Colgate-Palmolive Co......................... 335,687 310,719
----------- -----------
916,403 1,016,094
----------- -----------
PETROLEUM AND COAL-MINING SUPPORT
ACTIVITIES-3.87%
6,800 ENSCO International, Inc..................... 216,547 271,150
14,500 Halliburton Co............................... 585,432 768,500
7,800 Schlumberger Ltd............................. 526,850 665,438
----------- -----------
1,328,829 1,705,088
----------- -----------
PETROLEUM AND COAL-NATURAL GAS
DISTRIBUTION-2.70%
14,000 Enron Corp................................... 415,579 1,188,250
----------- -----------
PETROLEUM AND COAL-PRODUCTS
MANUFACTURING-4.93%
21,178 BP Amoco plc ADR............................. 1,012,280 1,170,085
6,600 Coastal Corp................................. 368,042 454,575
6,700 Exxon Mobil Corp............................. 397,150 546,888
----------- -----------
1,777,472 2,171,548
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ----------- -----------
<C> <S> <C> <C>
PIPELINE-TRANSPORTATION OF NATURAL GAS-3.59%
35,200 Dynegy, Inc. Class A......................... $ 570,553 $ 1,584,000
----------- -----------
PROFESSIONAL SERVICES-ADVERTISING AND RELATED
SERVICES-1.88%
11,000 Interpublic Group of Companies, Inc.......... 425,739 420,750
4,900 Omnicom Group, Inc........................... 217,398 408,844
----------- -----------
643,137 829,594
----------- -----------
PROFESSIONAL SERVICES-COMPUTER SYSTEMS DESIGN
AND RELATED-1.69%
12,500 Automatic Data Processing, Inc............... 585,513 745,313
----------- -----------
RETAIL-OTHER GENERAL MERCHANDISE STORES-0.59%
5,500 Wal-Mart Stores, Inc......................... 323,111 260,906
----------- -----------
TOBACCO MANUFACTURING-0.77%
11,500 Philip Morris Companies, Inc................. 307,253 340,688
----------- -----------
UTILITIES-ELECTRIC GENERATION, TRANSMISSION
AND DISTRIBUTION-4.01%
20,718 AES Corp. (a)................................ 425,599 1,320,773
6,000 Duke Energy Corp............................. 402,933 448,875
----------- -----------
828,532 1,769,648
----------- -----------
TOTAL COMMON STOCKS.......................... $28,010,547 $36,450,897
=========== ===========
</TABLE>
PREFERRED STOCKS-6.01%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ----------- -----------
<C> <S> <C> <C>
ENTERTAINMENT-CABLE AND OTHER SUBSCRIPTION
PROGRAMMING-1.24%
13,500 MediaOne Group, Inc., Conv. 7.00%............ $ 586,406 $ 546,750
----------- -----------
HEALTH CARE-PHARMACEUTICAL AND MEDICINE
MANUFACTURING-3.11%
22,000 Biovail Corp., Conv. 6.75%................... 1,100,000 1,372,250
----------- -----------
INFORMATION-SOFTWARE PUBLISHERS-0.71%
12,000 PSInet Inc., Conv. 7.00% (f)................. 600,000 312,000
----------- -----------
UTILITIES-ELECTRIC GENERATION, TRANSMISSION
AND DISTRIBUTION-0.95%
6,500 Calpine Capital Trust III, Conv.
5.00% (e).................................. 325,000 419,250
----------- -----------
TOTAL PREFERRED STOCKS....................... $2,611,406 $ 2,650,250
=========== ===========
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-1.78%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
--------- ----------- ----------- -----------
<C> <S> <C> <C> <C>
ENTERTAINMENT-NEWSPAPER, PERIODICAL, BOOK AND
DATABASE PUBLISHERS-1.78%
$600,000 Tribune Co., 2.00% Conv. (PHONES - America
Online) 5-15-2029 (g)...................... A- $ 942,000 $ 783,000
----------- -----------
</TABLE>
22
<PAGE>
CORPORATE BONDS-NON-INVESTMENT GRADE-5.68%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
--------- ----------- ----------- -----------
<C> <S> <C> <C> <C>
COMPUTER MANUFACTURING-SEMICONDUCTOR,
ELECTRONIC COMPONENT-0.72%
$150,000 Cypress Semiconductor Corp., 6.00% Conv.
10-1-2002 (f).............................. B $ 150,000 $ 315,938
----------- -----------
ENTERTAINMENT-CABLE AND OTHER SUBSCRIPTION
PROGRAMMING-2.25%
800,000 Echostar Communications Corp., 4.875% Conv.
1-1-2007 (f)............................... NR 805,389 994,000
----------- -----------
HEALTH CARE-COMMUNITY CARE FACILITIES FOR THE
ELDERLY-0.31%
300,000 Assisted Living Concepts, Inc., 5.625% Conv.
5-1-2003 (f)............................... NR 300,000 135,375
----------- -----------
HEALTH CARE-PHARMACEUTICAL AND MEDICINE
MANUFACTURING-1.06%
500,000 Invitrogen Corp., 5.50% Conv.
3-1-2007 (f)............................... NR 500,000 466,250
----------- -----------
INFORMATION-WIRED TELECOMMUNICATIONS
CARRIERS-1.03%
350,000 Telefonos de Mexico, S.A., 4.25% Conv.
6-15-2004.................................. BB+ 350,000 453,250
----------- -----------
WHOLESALERS-ELECTRICAL GOODS-0.31%
200,000 Efficient Networks, Inc., 5.00% Conv.
3-15-2005 (f).............................. NR 200,411 139,250
----------- -----------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... 2,305,800 2,504,063
----------- -----------
TOTAL LONG-TERM INVESTMENTS.................. $33,869,753 $42,388,210
=========== ===========
</TABLE>
SHORT-TERM INVESTMENTS-2.50%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
--------- -----------
<C> <S> <C>
FINANCE-DEPOSITORY CREDIT BANKING-2.50%
$ 1,028 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate - 6.42%......... $ 1,028
671,000 Wells Fargo Associates Corp., Master Variable
Rate Note, Current rate - 6.49%............ 671,000
432,023 Wells Fargo Cash Investment Money Market
Fund, Current rate - 6.27%................. 432,023
-----------
TOTAL SHORT-TERM INVESTMENTS................. 1,104,051
-----------
TOTAL INVESTMENTS IN SECURITIES
(COST: $34,973,804) (b).................... $43,492,261
===========
</TABLE>
(a) Presently not paying dividend income.
(b) At August 31, 2000, the cost of securities for federal income tax purposes
was $34,973,804 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 10,048,969
Unrealized depreciation..................................... (1,530,512)
--------------------------------------------------------------------------
Net unrealized appreciation................................. $ 8,518,457
--------------------------------------------------------------------------
</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 10.47% of total net assets as of August 31, 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>
2000 6,500 Calpine Capital Trust III, Conv. - 144A $ 325,000
</TABLE>
The aggregate value of these securities at August 31, 2000, was
$419,250, which represents 0.95% of total net assets.
(f) Securities sold within the terms of a private placement memorandum, exempt
from registration under Section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or to other
"accredited investors". Pursuant to guidelines adopted by the Board of
Directors, these issues are deemed to be liquid. The aggregate value of
these securities at August 31, 2000, was $2,362,813, which represents 5.36%
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
August 31, 2000
COMMON STOCKS-99.23%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ------------ ------------
<C> <S> <C> <C>
BEVERAGE MANUFACTURING-2.88%
306,000 Panamerican Beverages, Inc. Class A.......... $ 5,420,914 $ 5,680,125
183,000 PepsiCo, Inc................................. 7,762,288 7,800,375
121,000 Seagram Co. Ltd.............................. 7,466,683 7,282,687
------------ ------------
20,649,885 20,763,187
------------ ------------
COMPUTER MANUFACTURING-AUDIO AND VIDEO
EQUIPMENT-0.86%
69,000 Gemstar-TV Guide International, Inc. (a)..... 4,420,430 6,227,250
------------ ------------
COMPUTER MANUFACTURING- COMMUNICATIONS
EQUIPMENT - 3.15%
72,000 ADC Telecommunications,
Inc. (with rights) (a)..................... 2,547,623 2,947,500
90,600 Cisco Systems, Inc. (a)...................... 5,721,320 6,206,100
60,000 Extreme Networks, Inc. (a)................... 3,313,500 5,583,750
137,000 Lucent Technologies, Inc..................... 8,288,750 5,728,312
63,000 Motorola, Inc................................ 2,299,342 2,271,937
------------ ------------
22,170,535 22,737,599
------------ ------------
COMPUTER MANUFACTURING- COMPUTER AND
PERIPHERAL EQUIPMENT-1.60%
30,000 EMC Corp. (a)................................ 2,782,110 2,940,000
43,000 Sun Microsystems, Inc. (a)................... 4,370,258 5,458,312
26,000 VERITAS Software Corp. (a)................... 3,523,382 3,134,625
------------ ------------
10,675,750 11,532,937
------------ ------------
COMPUTER MANUFACTURING- NAVIGATIONAL,
MEASURING AND CONTROL INSTRUMENTS-1.91%
140,000 PE Corp. - PE Biosystems Group............... 5,198,000 13,772,500
------------ ------------
COMPUTER MANUFACTURING- SEMICONDUCTOR,
ELECTRONIC COMPONENT-8.50%
12,000 Applied Micro Circuits Corp. (a)............. 2,119,194 2,435,250
50,000 Celestica, Inc. (a).......................... 3,409,880 3,906,250
128,000 Intel Corp................................... 8,077,606 9,584,000
85,000 JDS Uniphase Corp. (a)....................... 6,095,182 10,593,125
80,000 Micron Technology, Inc. (a).................. 7,033,252 6,540,000
180,000 Texas Instruments, Inc....................... 8,479,517 12,048,750
285,000 Tyco International Ltd....................... 15,335,361 16,245,000
------------ ------------
50,549,992 61,352,375
------------ ------------
ELECTRICAL EQUIPMENT MANUFACTURING-COMPONENT
OTHER-1.98%
14,000 CIENA Corp. (a).............................. 1,213,727 3,103,625
34,000 Corning, Inc................................. 3,553,062 11,149,875
------------ ------------
4,766,789 14,253,500
------------ ------------
ENTERTAINMENT-CABLE AND OTHER SUBSCRIPTION
PROGRAMMING - 0.50%
150,000 USA Networks, Inc. (a)....................... 3,492,630 3,609,375
------------ ------------
ENTERTAINMENT-MOTION PICTURE AND VIDEO
INDUSTRIES-6.37%
460,000 AT&T Corp. - Liberty Media Corp. (a)......... 7,998,839 9,832,500
156,520 Clear Channel Communications, Inc. (a)....... 9,894,324 11,328,135
256,479 Viacom, Inc. Class B (a)..................... 10,019,602 17,264,243
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ------------ ------------
<C> <S> <C> <C>
192,600 Walt Disney Co............................... $ 6,094,949 $ 7,499,362
------------ ------------
34,007,714 45,924,240
------------ ------------
ENTERTAINMENT-NEWSPAPER, PERIODICAL, BOOK AND
DATABASE PUBLISHERS-2.25%
125,300 PRIMEDIA, Inc. (a)........................... 3,520,734 2,239,737
253,000 Reader's Digest Association, Inc. Class A.... 7,975,862 9,740,500
50,000 Time Warner, Inc............................. 3,857,475 4,275,000
------------ ------------
15,354,071 16,255,237
------------ ------------
FINANCE-AGENCIES, BROKERAGE AND OTHER
INSURANCE ACTIVITIES - 1.83%
100,000 Aon Corp..................................... 3,546,549 3,731,250
80,000 Marsh & McLennan Companies, Inc. 7,616,362 9,500,000
------------ ------------
11,162,911 13,231,250
------------ ------------
FINANCE-DEPOSITORY CREDIT BANKING-1.17%
144,533 Citigroup, Inc............................... 5,684,200 8,437,133
------------ ------------
FINANCE-INSURANCE CARRIERS - 4.15%
150,000 ACE Ltd...................................... 3,593,958 5,268,750
144,000 American International Group, Inc............ 9,337,873 12,834,000
61,000 Hartford Financial Services Group, Inc....... 3,389,160 4,064,125
168,000 MetLife, Inc. (a)............................ 2,698,080 4,084,500
171,000 UnumProvident Corp........................... 3,776,282 3,708,562
------------ ------------
22,795,353 29,959,937
------------ ------------
FINANCE-NONDEPOSITORY CREDIT BANKING-1.42%
102,000 American Express Co.......................... 4,442,777 6,030,750
150,000 Associates First Capital Corp. Class A....... 3,815,325 4,218,750
------------ ------------
8,258,102 10,249,500
------------ ------------
FINANCE-SECURITIES AND COMMODITY CONTRACTS
AND BROKERAGE-2.66%
58,000 Lehman Brothers Holdings, Inc................ 6,854,677 8,410,000
100,000 Morgan Stanley Dean Witter & Co.............. 6,607,870 10,756,250
------------ ------------
13,462,547 19,166,250
------------ ------------
FOOD MANUFACTURING-OTHER FOOD-1.24%
167,000 Nabisco Holdings Corp. Class A............... 7,668,924 8,924,062
------------ ------------
HEALTH CARE-GENERAL MEDICAL AND SURGICAL
HOSPITALS-2.21%
463,000 HCA - The Healthcare Co...................... 12,562,362 15,973,500
------------ ------------
HEALTH CARE-MEDICAL EQUIPMENT AND SUPPLIES
MANUFACTURING - 1.30%
113,000 Baxter International, Inc. (with rights)..... 8,573,941 9,407,250
------------ ------------
HEALTH CARE-PHARMACEUTICAL AND MEDICINE
MANUFACTURING-9.71%
83,000 Abbott Laboratories.......................... 3,627,581 3,631,250
139,900 ALZA Corp. (a)............................... 6,071,130 10,579,937
215,200 American Home Products Corp.................. 10,676,697 11,661,150
75,000 Amgen, Inc. (with rights) (a)................ 4,006,482 5,685,938
</TABLE>
24
<PAGE>
COMMON STOCKS-CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ------------ ------------
<C> <S> <C> <C>
75,000 AstraZeneca Group plc ADR.................... $ 3,545,498 $ 3,417,188
168,000 Biovail Corp. (a)............................ 8,728,137 10,762,500
34,000 MedImmune, Inc. (a).......................... 2,827,124 2,860,250
247,500 Pfizer, Inc. (with rights)................... 8,463,465 10,704,375
183,000 Pharmacia Corp. (with rights)................ 10,193,686 10,716,938
------------ ------------
58,139,800 70,019,526
------------ ------------
HEALTH CARE-SCIENTIFIC RESEARCH AND
DEVELOPMENT SERVICES-2.17%
43,500 Genentech, Inc. (a).......................... 4,053,444 8,286,750
90,000 Immunex Corp. (a)............................ 3,777,615 4,522,500
20,000 Millennium Pharmaceuticals, Inc. (a) 2,853,126 2,862,500
------------ ------------
10,684,185 15,671,750
------------ ------------
INFORMATION-OTHER INFORMATION SERVICES-1.81%
60,000 America Online, Inc. (a)..................... 3,469,362 3,517,500
30,000 Juniper Networks, Inc. (a)................... 4,611,084 6,412,500
26,000 Yahoo!, Inc. (a)............................. 3,375,627 3,159,000
------------ ------------
11,456,073 13,089,000
------------ ------------
INFORMATION-OTHER TELECOMMUNICATIONS-5.00%
99,000 Nextel Communications, Inc. (a).............. 3,052,238 5,488,313
90,000 Nortel Networks Corp......................... 5,221,303 7,340,625
220,000 Qwest Communications International,
Inc. (a)................................... 11,026,167 11,357,500
150,000 Sprint Corp.................................. 5,181,180 5,025,000
61,000 VoiceStream Wireless Corp. (a)............... 3,650,720 6,866,313
------------ ------------
28,131,608 36,077,751
------------ ------------
INFORMATION-SOFTWARE PUBLISHERS-4.14%
45,000 Adobe Systems, Inc........................... 5,238,705 5,850,000
85,500 Equant N.V. NY Shares (a).................... 3,628,373 3,286,406
142,300 Microsoft Corp. (a).......................... 13,850,354 9,934,319
25,000 Phone.com, Inc. (with rights) (a)............ 2,498,758 2,310,938
43,000 Siebel Systems, Inc. (a)..................... 7,436,869 8,471,000
------------ ------------
32,653,059 29,852,663
------------ ------------
MACHINERY MANUFACTURING- AGRICULTURE,
CONSTRUCTION AND MINING-0.48%
99,900 National-Oilwell, Inc. (a)................... 3,592,327 3,465,281
------------ ------------
MANUFACTURING- ELECTROMEDICAL - 1.05%
148,000 Medtronic, Inc. (with rights)................ 3,812,641 7,585,000
------------ ------------
MANUFACTURING-SOAP, CLEANING COMPOUND,
TOILET-0.61%
87,000 Colgate-Palmolive Co......................... 4,801,077 4,431,563
------------ ------------
MISCELLANEOUS MANUFACTURING - 1.99%
245,000 General Electric Co.......................... 11,827,642 14,378,438
------------ ------------
PETROLEUM AND COAL-MINING SUPPORT
ACTIVITIES-4.52%
38,000 BJ Services Co. (a).......................... 1,880,381 2,546,000
72,000 Cooper Cameron Corp. (a)..................... 5,393,326 5,602,500
132,000 ENSCO International, Inc..................... 4,442,415 5,263,500
118,000 Global Marine, Inc. (a)...................... 3,284,129 3,812,875
108,000 Halliburton Co............................... 5,076,743 5,724,000
113,000 Schlumberger Ltd............................. 7,824,206 9,640,313
------------ ------------
27,901,200 32,589,188
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ------------ ------------
<C> <S> <C> <C>
PETROLEUM AND COAL-NATURAL GAS
DISTRIBUTION-2.71%
230,000 Enron Corp................................... $ 8,670,077 $ 19,521,250
------------ ------------
PETROLEUM AND COAL-OIL AND GAS
EXTRACTION-1.55%
173,000 EOG Resources, Inc........................... 4,651,973 6,617,250
300,000 Ocean Energy, Inc............................ 4,546,177 4,556,250
------------ ------------
9,198,150 11,173,500
------------ ------------
PETROLEUM AND COAL-PRODUCTS
MANUFACTURING-2.99%
114,800 BP Amoco plc ADR............................. 6,020,490 6,342,700
141,000 Coastal Corp................................. 8,057,615 9,711,375
68,000 Exxon Mobil Corp............................. 4,874,779 5,550,500
------------ ------------
18,952,884 21,604,575
------------ ------------
PIPELINE-TRANSPORTATION OF NATURAL GAS-2.50%
400,000 Dynegy, Inc. Class A......................... 6,638,837 18,000,000
------------ ------------
PROFESSIONAL SERVICES- ADVERTISING AND
RELATED SERVICES-0.98%
184,000 Interpublic Group of Companies, Inc.......... 7,531,740 7,038,000
------------ ------------
PROFESSIONAL SERVICES-COMPUTER SYSTEMS DESIGN
AND RELATED - 2.11%
25,000 Ariba, Inc. (a).............................. 3,739,968 3,934,375
132,000 Automatic Data Processing, Inc............... 6,253,644 7,870,500
33,100 Corvis Corp. (a)............................. 1,334,259 3,436,194
------------ ------------
11,327,871 15,241,069
------------ ------------
RETAIL-DEPARTMENT STORES-0.47%
60,000 Kohl's Corp. (a)............................. 293,781 3,360,000
------------ ------------
RETAIL-GROCERY STORES-0.71%
104,500 Safeway, Inc. (a)............................ 4,003,719 5,153,156
------------ ------------
RETAIL-OTHER GENERAL MERCHANDISE STORES-0.63%
95,000 Wal-Mart Stores, Inc......................... 3,858,696 4,506,563
------------ ------------
TOBACCO MANUFACTURING-0.77%
188,000 Philip Morris Companies, Inc................. 4,564,259 5,569,500
------------ ------------
TRANSPORTATION-AIR SCHEDULED - 0.87%
65,000 Continental Airlines, Inc. Class B (a) 3,332,063 3,128,125
100,000 Northwest Airlines Corp. (a)................. 3,611,434 3,131,250
------------ ------------
6,943,497 6,259,375
------------ ------------
UTILITIES-ELECTRIC GENERATION, TRANSMISSION
AND DISTRIBUTION - 5.48%
348,000 AES Corp. (a)................................ 8,781,160 22,185,000
118,000 Calpine Corp. (a)............................ 8,201,000 11,682,000
76,000 Duke Energy Corp............................. 5,103,818 5,685,750
------------ ------------
22,085,978 39,552,750
------------ ------------
TOTAL COMMON STOCKS.......................... $558,523,237 $715,916,980
============ ============
</TABLE>
25
<PAGE>
FORTIS STOCK FUNDS
CAPITAL FUND (CONTINUED)
Schedule of Investments
August 31, 2000
SHORT-TERM INVESTMENTS-0.94%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
---------- ------------
<C> <S> <C>
FINANCE-DEPOSITORY CREDIT BANKING-0.94%
$ 16,975 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate - 6.42%......... $ 16,975
4,347,000 Wells Fargo Associates Corp., Master Variable
Rate Note, Current rate - 6.49%............ 4,347,000
2,400,259 Wells Fargo Cash Investment Money Market
Fund, Current rate - 6.27%................. 2,400,259
------------
TOTAL SHORT-TERM INVESTMENTS................. 6,764,234
------------
TOTAL INVESTMENTS IN SECURITIES
(COST: $565,287,471) (b)................... $722,681,214
============
</TABLE>
(a) Presently not paying dividend income.
(b) At August 31, 2000, the cost of securities for federal income tax purposes
was $565,356,904 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $170,471,660
Unrealized depreciation..................................... (13,147,350)
--------------------------------------------------------------------------
Net unrealized appreciation................................. $157,324,310
--------------------------------------------------------------------------
</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 7.39% of total net assets as of August 31, 2000.
26
<PAGE>
FORTIS STOCK FUNDS
GROWTH FUND, INC.
Schedule of Investments
August 31, 2000
COMMON STOCKS-94.58%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------ --------------
<C> <S> <C> <C>
ACCOMMODATION AND FOOD SERVICE-TRAVELER-0.66%
715,000 Park Place Entertainment Corp. (a)........... $ 8,132,204 $ 10,501,562
------------ --------------
COMPUTER MANUFACTURING- COMMUNICATIONS
EQUIPMENT - 9.23%
220,000 Comverse Technology, Inc. (a)................ 5,343,514 20,226,250
122,900 Digital Lightwave, Inc. (a).................. 11,395,079 10,784,475
302,700 Efficient Networks, Inc. (a)................. 17,751,169 16,265,395
379,600 Extreme Networks, Inc. (a)................... 14,403,939 35,326,525
206,100 MRV Communications, Inc. (a)................. 12,897,886 15,882,581
222,800 Netro Corp. (a).............................. 13,346,793 18,408,850
137,400 Polycom, Inc. (a)............................ 14,319,076 15,440,325
275,000 Western Wireless Corp. (a)................... 16,376,041 14,059,375
------------ --------------
105,833,497 146,393,776
------------ --------------
COMPUTER MANUFACTURING- COMPUTER AND
PERIPHERAL EQUIPMENT-1.14%
63,900 Emulex Corp. (a)............................. 6,052,832 6,689,531
274,400 Symbol Technologies, Inc..................... 15,239,296 11,353,300
------------ --------------
21,292,128 18,042,831
------------ --------------
COMPUTER MANUFACTURING- NAVIGATIONAL,
MEASURING AND CONTROL INSTRUMENTS-5.70%
44,000 Bruker Daltonics, Inc. (a)................... 572,000 2,211,000
210,000 L-3 Communications Holdings, Inc. (a)........ 12,265,261 12,416,250
440,000 National Instruments Corp. (a)............... 8,531,228 19,002,500
96,800 Newport Corp................................. 10,841,600 15,391,200
228,200 PE Corp. - PE Biosystem Group 7,244,766 22,449,175
210,400 PerkinElmer, Inc............................. 14,626,169 18,922,850
------------ --------------
54,081,024 90,392,975
------------ --------------
COMPUTER MANUFACTURING- SEMICONDUCTOR,
ELECTRONIC COMPONENT-14.82%
165,000 Amphenol Corp. Class A (a)................... 8,105,625 10,560,000
330,000 Celestica, Inc. (a).......................... 6,722,418 25,781,250
61,300 EMCORE Corp. (a)............................. 8,336,800 6,834,950
385,000 Finisar Corp. (a)............................ 16,011,534 17,854,375
247,600 Flextronics International Ltd. (a) 8,379,712 20,628,175
110,000 GlobeSpan, Inc. (a).......................... 11,000,000 13,248,125
385,000 Intersil Holding Corp. (a)................... 18,243,257 20,790,000
73,900 Jabil Circuit, Inc. (a)...................... 3,578,901 4,715,744
137,400 Micrel, Inc. (a)............................. 8,629,326 10,502,512
55,000 QLogic Corp. (a)............................. 5,490,722 6,242,500
89,250 SDL, Inc. (a)................................ 3,088,682 35,460,141
145,800 Semtech Corp. (a)............................ 13,638,329 17,268,187
220,000 TranSwitch Corp. (a)......................... 11,285,566 13,241,250
330,000 TriQuint Semiconductor, Inc. (a) 15,157,698 18,253,125
198,600 Virata Corp. (a)............................. 10,914,244 13,653,750
------------ --------------
148,582,814 235,034,084
------------ --------------
CONSTRUCTION-UTILITY SYSTEM - 0.76%
256,800 Quanta Services, Inc. (a).................... 8,423,517 12,005,400
------------ --------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------ --------------
<C> <S> <C> <C>
ELECTRICAL EQUIPMENT MANUFACTURING-COMPONENT
OTHER-3.33%
308,000 Advanced Fibre Communications, Inc. (a)...... $ 10,335,427 $ 16,280,687
165,000 CIENA Corp. (a).............................. 7,845,571 36,578,437
------------ --------------
18,180,998 52,859,124
------------ --------------
ENTERTAINMENT-DATA PROCESSING, HOSTING AND
RELATED SERVICES-0.31%
550,000 Divine InterVentures, Inc. (a)............... 4,950,000 4,984,375
------------ --------------
ENTERTAINMENT-RADIO AND TELEVISION
BROADCASTING - 2.30%
203,500 Cox Radio, Inc. (a).......................... 2,938,049 4,235,344
523,100 Entravision Communications Corp. (a)......... 8,905,395 10,363,919
495,000 Univision Communications, Inc.
Class A (a)................................ 7,646,221 21,841,875
------------ --------------
19,489,665 36,441,138
------------ --------------
FINANCE-ACTIVITIES RELATED TO CREDIT
BANKING-1.34%
660,000 Concord EFS, Inc. (a)........................ 14,606,300 21,202,500
------------ --------------
FINANCE-AGENCIES, BROKERAGE AND OTHER
INSURANCE ACTIVITIES-0.65%
275,000 Aon Corp..................................... 9,987,912 10,260,938
------------ --------------
FINANCE-DEPOSITORY CREDIT BANKING-1.75%
316,300 Silicon Valley Bancshares (a)................ 11,122,929 18,226,787
211,700 Zions Bancorporation......................... 9,681,654 9,473,575
------------ --------------
20,804,583 27,700,362
------------ --------------
FINANCE-INSURANCE CARRIERS - 2.09%
440,000 ACE Ltd...................................... 11,194,673 15,455,000
275,000 Ambac Financial Group, Inc................... 14,546,183 17,771,875
------------ --------------
25,740,856 33,226,875
------------ --------------
FREIGHT TRUCKING- GENERAL - 1.02%
330,000 Expeditors International of Washington,
Inc........................................ 10,336,303 16,170,000
------------ --------------
HEALTH CARE-MEDICAL EQUIPMENT AND SUPPLIES
MANUFACTURING-1.71%
556,800 Biomet, Inc.................................. 14,627,927 18,826,800
55,000 Fresenius Medical Care AG ADR 728,750 838,750
165,000 Stryker Corp................................. 6,389,786 7,394,062
------------ --------------
21,746,463 27,059,612
------------ --------------
HEALTH CARE-PHARMACEUTICAL AND MEDICINE
MANUFACTURING - 10.11%
220,000 Alpharma, Inc................................ 8,360,000 12,457,500
330,000 ALZA Corp. (a)............................... 14,533,389 24,956,250
154,100 Andrx Corp. (a).............................. 12,961,396 13,406,700
429,200 Biovail Corp. (a)............................ 12,740,922 27,495,625
</TABLE>
27
<PAGE>
FORTIS STOCK FUNDS
GROWTH FUND, INC. (CONTINUED)
Schedule of Investments
August 31, 2000
COMMON STOCKS-CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------ --------------
<C> <S> <C> <C>
454,500 IVAX Corp. (a)............................... $ 15,679,291 $ 15,737,062
363,000 Jones Pharma, Inc............................ 8,939,969 12,977,250
377,475 King Pharmaceuticals, Inc. (a)............... 10,553,927 12,126,384
82,500 Medarex, Inc. (a)............................ 6,753,655 9,116,250
206,100 MedImmune, Inc. (a).......................... 3,086,838 17,338,163
199,800 QLT PhotoTherapeutics, Inc. (a) 13,140,475 14,797,688
------------ --------------
106,749,862 160,408,872
------------ --------------
HEALTH CARE-SCIENTIFIC RESEARCH AND
DEVELOPMENT SERVICES-0.55%
110,000 Affymetrix, Inc. (a)......................... 8,494,580 8,690,000
------------ --------------
INFORMATION-OTHER INFORMATION SERVICES-0.71%
110,000 Art Technology Group, Inc. (a)............... 9,877,390 11,213,125
------------ --------------
INFORMATION-OTHER TELECOMMUNICATIONS-0.13%
220,000 ViaSource Communications, Inc. (a)........... 1,760,000 2,090,000
------------ --------------
INFORMATION-SOFTWARE PUBLISHERS-9.62%
412,400 BEA Systems, Inc. (a)........................ 2,494,358 28,068,975
110,000 Informatica Corp. (a)........................ 9,442,037 11,000,000
220,000 Interwoven, Inc. (a)......................... 16,426,937 21,120,000
275,000 Mercury Interactive Corp. (a)................ 4,896,288 33,601,563
608,000 Peregrine Systems, Inc. (a).................. 12,646,364 19,418,000
68,750 Siebel Systems, Inc. (a)..................... 1,757,477 13,543,750
129,400 VeriSign, Inc. (a)........................... 8,057,245 25,734,425
------------ --------------
55,720,706 152,486,713
------------ --------------
INFORMATION-WIRED TELECOMMUNICATIONS
CARRIERS - 3.28%
303,600 Amdocs Ltd. (a).............................. 7,226,607 21,688,425
110,000 Copper Mountain Networks, Inc. (a)........... 9,464,301 6,593,125
199,800 Inet Technologies, Inc. (a).................. 8,845,701 8,066,925
104,450 Redback Networks, Inc. (a)................... 7,573,425 15,602,219
------------ --------------
33,110,034 51,950,694
------------ --------------
MACHINERY MANUFACTURING- AGRICULTURE,
CONSTRUCTION AND MINING-0.60%
274,700 National Oilwell, Inc. (a)................... 9,779,973 9,528,656
------------ --------------
MANAGEMENT, SCIENTIFIC AND TECH CONSULTING
SERVICES - 0.96%
220,000 TMP Worldwide, Inc. (a)...................... 10,388,321 15,221,250
------------ --------------
MANUFACTURING- ELECTROMEDICAL-1.82%
362,600 Waters Corp. (a)............................. 5,538,986 28,849,363
------------ --------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------ --------------
<C> <S> <C> <C>
PETROLEUM AND COAL-MINING SUPPORT
ACTIVITIES-8.61%
126,500 BJ Services Co. (a).......................... $ 5,045,951 $ 8,475,500
385,000 ENSCO International, Inc..................... 8,608,313 15,351,875
605,000 Grant Prideco, Inc. (a)...................... 10,185,431 14,217,500
495,000 Nabors Industries, Inc. (a).................. 12,277,892 23,543,438
357,500 Noble Drilling Corp. (a)..................... 9,093,337 17,338,750
385,000 Santa Fe International Corp.................. 11,388,845 15,135,313
275,000 Smith International, Inc. (a)................ 20,459,783 21,862,500
440,000 Weatherford International, Inc. (a).......... 12,386,749 20,652,500
------------ --------------
89,446,301 136,577,376
------------ --------------
PETROLEUM AND COAL-OIL AND GAS
EXTRACTION-0.93%
385,000 EOG Resources, Inc........................... 11,478,833 14,726,250
------------ --------------
PROFESSIONAL SERVICES- ADVERTISING AND
RELATED SERVICES-1.32%
357,500 Young & Rubicam, Inc......................... 11,762,745 20,913,750
------------ --------------
PROFESSIONAL SERVICES- COMPUTER SYSTEMS
DESIGN AND RELATED-3.26%
220,000 Check Point Software Technologies
Ltd. (a)................................... 2,933,045 32,078,750
165,000 EXE Technologies, Inc. (a)................... 1,320,000 2,959,688
275,000 Lantronix, Inc. (a).......................... 2,750,000 2,801,563
385,000 SunGard Data Systems, Inc. (a) 13,914,501 13,860,000
------------ --------------
20,917,546 51,700,001
------------ --------------
RETAIL-OTHER GENERAL MERCHANDISE STORES-1.45%
335,000 BJ's Wholesale Club, Inc. (a)................ 11,550,136 11,348,125
288,750 Dollar Tree Stores, Inc. (a)................. 9,500,389 11,712,422
------------ --------------
21,050,525 23,060,547
------------ --------------
RETAIL-SHOE STORES-0.53%
605,000 Venator Group, Inc. (a)...................... 8,511,333 8,470,000
------------ --------------
UTILITIES-ELECTRIC GENERATION, TRANSMISSION
AND DISTRIBUTION - 3.89%
495,000 Calpine Corp. (a)............................ 9,883,327 49,005,000
486,300 NRG Energy, Inc. (a)......................... 10,005,382 12,765,375
------------ --------------
19,888,709 61,770,375
------------ --------------
TOTAL COMMON STOCKS.......................... $916,664,108 $1,499,932,524
============ ==============
</TABLE>
28
<PAGE>
SHORT-TERM INVESTMENTS-5.71%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
----------- --------------
<C> <S> <C>
FEDERAL HOME LOAN MORTGAGE CORPORATION-0.95%
$15,000,000 Federal Home Loan Mortgage Corp., 6.53%
9-5-2000................................... $ 14,986,635
--------------
FINANCE-DEPOSITORY CREDIT BANKING-4.76%
32,512 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate - 6.42%......... 32,512
69,314,000 Wells Fargo Associates Corp., Master Variable
Rate Note, Current rate - 6.49%............ 69,314,000
6,206,761 Wells Fargo Cash Investment Money Market
Fund, Current rate - 6.27%................. 6,206,761
--------------
75,553,273
--------------
TOTAL SHORT-TERM INVESTMENTS................. 90,539,908
--------------
TOTAL INVESTMENTS IN SECURITIES
(COST: $1,007,204,016) (b)................. $1,590,472,432
==============
</TABLE>
(a) Presently not paying dividend income.
(b) At August 31, 2000, the cost of securities for federal income tax purposes
was $1,008,022,697 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $605,135,518
Unrealized depreciation..................................... (22,685,783)
--------------------------------------------------------------------------
Net unrealized appreciation................................. $582,449,735
--------------------------------------------------------------------------
</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 7.34% of total net assets as of August 31, 2000.
29
<PAGE>
FORTIS STOCK FUNDS
CAPITAL APPRECIATION PORTFOLIO
Schedule of Investments
August 31, 2000
COMMON STOCKS-96.26%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ------------ ------------
<C> <S> <C> <C>
COMPUTER MANUFACTURING- COMMUNICATIONS
EQUIPMENT - 5.68%
53,600 AudioCodes Ltd. (a).......................... $ 4,133,063 $ 6,023,300
65,000 Celeritek, Inc. (a).......................... 3,323,717 2,916,875
53,500 Netro Corp. (a).............................. 2,100,067 4,420,437
50,500 Polycom, Inc. (a)............................ 3,444,908 5,674,937
163,850 REMEC, Inc. (a).............................. 4,263,293 4,669,725
------------ ------------
17,265,048 23,705,274
------------ ------------
COMPUTER MANUFACTURING- COMPUTER AND
PERIPHERAL EQUIPMENT-1.52%
76,000 SanDisk Corp. (a)............................ 3,154,000 6,346,000
------------ ------------
COMPUTER MANUFACTURING- NAVIGATIONAL,
MEASURING AND CONTROL INSTRUMENTS-3.71%
66,000 Electro Scientific Industries, Inc. (a) 2,502,781 2,718,375
43,500 Newport Corp................................. 815,539 6,916,500
110,000 PhotoMedex, Inc. (a)......................... 1,711,719 1,430,000
90,000 Signal Technology Corp. (a).................. 1,687,500 1,710,000
65,000 Trimble Navigation Ltd. (a).................. 3,400,669 2,701,562
------------ ------------
10,118,208 15,476,437
------------ ------------
COMPUTER MANUFACTURING- SEMICONDUCTOR,
ELECTRONIC COMPONENT-19.47%
85,000 Actel Corp. (a).............................. 2,553,713 3,740,000
112,500 Aeroflex, Inc. (a)........................... 3,145,926 4,134,375
117,300 Alpha Industries, Inc. (a)................... 2,708,260 5,916,319
158,700 ASM International N.V. (a)................... 4,252,828 3,987,337
63,000 Caliper Technologies Corp. (a)............... 4,105,584 3,913,875
85,500 DDi Corp. (a)................................ 2,760,094 3,259,687
80,000 Elantec Semiconductor, Inc. (a).............. 3,435,175 7,080,000
55,900 Exar Corp. (a)............................... 2,703,429 6,742,937
120,000 Kopin Corp. (a).............................. 653,315 4,012,500
68,000 Micrel, Inc. (a)............................. 1,171,375 5,197,750
100,000 Microsemi Corp. (a).......................... 4,723,279 4,225,000
45,000 Pericom Semiconductor Corp. (a).............. 2,763,346 3,330,000
9,534 PMC-Sierra, Inc. (a)......................... 1,446,772 2,249,965
125,000 Silicon Image, Inc. (a)...................... 3,656,844 4,593,750
54,000 SMTC Corp. (a)............................... 1,149,318 1,296,000
108,000 TranSwitch Corp. (a)......................... 1,446,155 6,500,250
200,800 TriQuint Semiconductor, Inc. (a)............. 4,251,177 11,106,750
------------ ------------
46,926,590 81,286,495
------------ ------------
EDUCATION-COLLEGES, UNIVERSITIES AND
PROFESSIONAL SCHOOLS-1.49%
155,400 Career Education Corp. (a)................... 2,505,498 6,206,287
------------ ------------
ENTERTAINMENT-MOTION PICTURE AND VIDEO
INDUSTRIES-1.97%
77,200 Macrovision Corp. (a)........................ 1,274,256 8,231,450
------------ ------------
ENTERTAINMENT-RADIO AND TELEVISION
BROADCASTING-1.85%
120,000 Emmis Communications Corp. Class A (a)....... 4,279,200 3,937,500
67,550 Radio One, Inc. Class A (a).................. 1,784,277 1,422,772
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ------------ ------------
<C> <S> <C> <C>
135,100 Radio One, Inc. Class D (a).................. $ 3,348,693 $ 2,372,694
------------ ------------
9,412,170 7,732,966
------------ ------------
FINANCE-DEPOSITORY CREDIT BANKING-2.33%
60,000 Investors Financial Services Corp............ 2,775,024 3,693,750
104,400 Silicon Valley Bancshares (a)................ 2,193,009 6,016,050
------------ ------------
4,968,033 9,709,800
------------ ------------
FINANCE-OTHER FINANCIAL INVESTMENT
ACTIVITIES-0.94%
81,000 Eaton Vance Corp............................. 2,995,636 3,923,437
------------ ------------
FINANCE-OTHER INVESTMENT POOLS AND
FUNDS-1.49%
157,500 Allied Capital Corp.......................... 2,677,500 3,189,375
127,800 American Capital Strategies Ltd.............. 2,405,941 3,051,225
------------ ------------
5,083,441 6,240,600
------------ ------------
FINANCE-SECURITIES AND COMMODITY CONTRACTS
AND BROKERAGE-0.73%
38,000 Dain Rauscher Corp........................... 2,706,819 3,056,625
------------ ------------
FREIGHT TRUCKING-GENERAL-0.67%
60,750 Forward Air Corp. (a)........................ 868,783 2,786,906
------------ ------------
HEALTH CARE-HEALTH AND PERSONAL CARE
STORES-2.90%
157,100 Accredo Health, Inc. (a)..................... 3,258,330 6,804,394
149,200 PolyMedica Corp. (a)......................... 4,226,412 5,296,600
------------ ------------
7,484,742 12,100,994
------------ ------------
HEALTH CARE-MEDICAL AND DIAGNOSTIC
LABORATORIES-1.13%
40,000 Laboratory Corporation of America
Holdings (a)............................... 3,484,712 4,732,500
------------ ------------
HEALTH CARE-MEDICAL EQUIPMENT AND SUPPLIES
MANUFACTURING - 2.50%
166,000 ArthroCare Corp. (a)......................... 4,787,158 7,387,000
65,000 Cytyc Corp. (a).............................. 3,197,021 3,030,625
------------ ------------
7,984,179 10,417,625
------------ ------------
HEALTH CARE-PHARMACEUTICAL AND MEDICINE
MANUFACTURING-9.04%
58,800 Abgenix, Inc. (a)............................ 463,404 4,420,106
24,500 CIMA Labs, Inc. (a).......................... 923,354 1,013,687
120,000 DUSA Pharmaceuticals, Inc. (a)............... 2,933,201 3,517,500
97,400 First Horizon Pharmaceutical Corp. (a)....... 1,548,384 1,777,550
60,000 Invitrogen Corp. (a)......................... 2,547,610 3,787,500
79,500 Jones Pharma, Inc............................ 2,279,410 2,842,125
65,200 Medarex, Inc. (a)............................ 3,787,937 7,204,600
122,500 Noven Pharmaceuticals, Inc. (a).............. 1,827,504 5,145,000
64,000 PRAECIS Pharmaceuticals, Inc. (a) 2,559,208 2,804,000
112,500 Tanox, Inc. (a).............................. 3,223,827 5,231,250
------------ ------------
22,093,839 37,743,318
------------ ------------
</TABLE>
30
<PAGE>
COMMON STOCKS-CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ------------ ------------
<C> <S> <C> <C>
HEALTH CARE-SCIENTIFIC RESEARCH AND
DEVELOPMENT SERVICES-3.13%
22,500 Applied Molecular Evolution (a).............. $ 427,500 $ 724,219
113,200 Cell Genesys, Inc. (a)....................... 1,566,170 3,487,975
13,000 Discovery Partners International (a) 234,000 271,375
22,600 Gemini Genomics plc ADR (a).................. 316,400 395,500
19,800 Myriad Genetics, Inc. (a).................... 2,905,434 2,769,525
86,200 Orchid Biosciences, Inc. (a)................. 689,600 3,873,612
54,000 Variagenics, Inc. (a)........................ 991,438 1,525,500
------------ ------------
7,130,542 13,047,706
------------ ------------
INFORMATION-INTERNET SERVICE PROVIDERS AND
WEB SEARCH PORTALS-0.75%
45,200 Blue Martini Software, Inc. (a).............. 2,464,718 3,141,400
------------ ------------
INFORMATION-OTHER INFORMATION SERVICES-4.36%
67,400 Art Technology Group, Inc. (a)............... 2,336,956 6,870,587
90,000 DigitalThink, Inc. (a)....................... 3,668,841 3,065,625
75,000 Tumbleweed Communications Corp. (a).......... 4,164,375 4,696,875
72,500 WatchGuard Technologies, Inc. (a) 4,255,478 3,561,562
------------ ------------
14,425,650 18,194,649
------------ ------------
INFORMATION-OTHER TELECOMMUNICATIONS-1.23%
17,100 Exfo Electro-Optical Engineering,
Inc. (a)................................... 703,350 970,425
56,000 Peco II, Inc. (a)............................ 1,399,320 2,184,000
33,800 WJ Communications, Inc. (a).................. 540,800 1,992,088
------------ ------------
2,643,470 5,146,513
------------ ------------
INFORMATION-SOFTWARE PUBLISHERS-6.49%
137,000 Adept Technology, Inc. (a)................... 4,642,481 6,841,438
44,000 Business Objects S.A. ADR (a)................ 717,193 5,038,000
40,000 Interwoven, Inc. (a)......................... 1,694,118 3,840,000
27,000 Mercury Interactive Corp. (a)................ 420,552 3,299,063
17,000 Micromuse, Inc. (a).......................... 543,341 2,581,875
105,000 Packeteer, Inc. (a).......................... 3,922,598 5,053,125
15,800 TeleCommunication Systems, Inc. (a).......... 268,600 453,263
------------ ------------
12,208,883 27,106,764
------------ ------------
INFORMATION-TELECOMMUNICATIONS CARRIERS-1.53%
72,400 BreezeCom Ltd. (a)........................... 2,641,171 3,135,825
90,000 o2wireless Solutions, Inc. (a)............... 1,080,000 1,957,500
69,000 Triton Network Systems, Inc. (a)............. 2,012,274 1,298,063
------------ ------------
5,733,445 6,391,388
------------ ------------
MACHINERY MANUFACTURING- COMMERCIAL AND
SERVICE INDUSTRY-0.31%
135,000 Camtek Ltd. (a).............................. 945,000 1,282,500
------------ ------------
MACHINERY MANUFACTURING- ENGINE, TURBINE AND
POWER TRANSMISSION EQUIPMENT-0.05%
2,500 Capstone Turbine Corp. (a)................... 40,000 230,781
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ------------ ------------
<C> <S> <C> <C>
MACHINERY MANUFACTURING- HEATING,
AIR-CONDITIONING, COMMERCIAL
REFRIGERATION-1.48%
127,500 Merix Corp. (a).............................. $ 3,843,457 $ 6,183,750
------------ ------------
MACHINERY MANUFACTURING- INDUSTRIAL
MACHINERY-2.65%
163,800 ChipPAC, Inc. (a)............................ 1,990,832 2,989,350
33,700 CoorsTek, Inc. (a)........................... 1,348,000 1,579,688
128,000 GSI Lumonics, Inc. (a)....................... 3,823,842 3,352,000
55,000 Varian Semiconductor Equipment Associates,
Inc. (a)................................... 3,586,797 3,141,875
------------ ------------
10,749,471 11,062,913
------------ ------------
MANAGEMENT, SCIENTIFIC AND TECH CONSULTING
SERVICES-0.69%
44,999 Diamond Technology Partners, Inc. (a)........ 1,151,491 2,871,499
------------ ------------
NONMETALLIC MANUFACTURING-GLASS AND GLASS
PRODUCT-1.12%
135,000 Applied Films Corp. (a)...................... 3,172,500 4,691,250
------------ ------------
PROFESSIONAL SERVICES- ARCHITECTURAL,
ENGINEERING AND RELATED-1.67%
45,000 Plexus Corp (a).............................. 3,994,661 6,963,750
------------ ------------
PROFESSIONAL SERVICES-COMPUTER SYSTEMS DESIGN
AND RELATED - 5.88%
4,500 Avici Systems, Inc. (a)...................... 139,500 674,156
74,000 Cognizant Technology Solutions Corp. (a)..... 1,302,969 3,163,500
10,800 McDATA Corp. Class B (a)..................... 302,400 1,161,675
24,000 Network Engines, Inc. (a).................... 408,000 939,000
15,000 ONI Systems, Corp. (a)....................... 947,955 1,429,688
43,000 Procom Technology, Inc. (a).................. 2,507,863 2,074,750
13,500 SpeechWorks International, Inc. (a) 270,000 1,034,438
96,600 Titan Corp. (a).............................. 4,600,276 2,378,775
63,100 Turnstone Systems, Inc. (a).................. 3,378,755 3,715,013
93,800 Vyyo, Inc. (a)............................... 1,846,692 3,236,100
125,600 WebTrends Corp. (a).......................... 4,481,246 4,731,588
------------ ------------
20,185,656 24,538,683
------------ ------------
REAL ESTATE, RENTAL AND LEASING- CONSUMER
GOODS RENTAL-0.59%
75,000 Rent-A-Center, Inc. (a)...................... 2,424,098 2,470,313
------------ ------------
RETAIL-CLOTHING STORES-2.26%
120,000 Abercrombie & Fitch Co. Class A (a) 2,441,148 2,782,500
107,500 Charlotte Russe Holding, Inc. (a)............ 1,374,152 1,343,750
75,000 Children's Place Retail Stores, Inc. (a)..... 2,412,218 2,212,500
125,300 Too, Inc. (a)................................ 2,667,383 3,085,513
------------ ------------
8,894,901 9,424,263
------------ ------------
RETAIL-ELECTRONICS AND APPLIANCE STORES-0.19%
90,000 PeoplePC, Inc. (a)........................... 900,000 776,250
------------ ------------
TOY MANUFACTURING-1.18%
278,500 JAKKS Pacific, Inc. (a)...................... 5,315,471 4,943,375
------------ ------------
</TABLE>
31
<PAGE>
FORTIS STOCK FUNDS
CAPITAL APPRECIATION PORTFOLIO (CONTINUED)
Schedule of Investments
August 31, 2000
COMMON STOCKS-CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ------------ ------------
<C> <S> <C> <C>
WHOLESALERS-APPAREL, PIECE GOODS AND
NOTIONS-0.68%
64,050 Kenneth Cole Productions, Inc.
Class A (a)................................ $ 1,133,627 $ 2,822,203
------------ ------------
WHOLESALERS-DRUGS AND DRUGGISTS
SUNDRIES-0.83%
60,000 Priority Healthcare Corp. Class B (a) 2,811,751 3,465,000
------------ ------------
WHOLESALERS-ELECTRICAL GOODS - 0.26%
41,000 Nu Horizons Electronics Corp. (a)............ 1,150,038 1,076,250
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
---------- ------------ ------------
<C> <S> <C> <C>
WHOLESALERS-PROFESSIONAL AND COMMERCIAL
EQUIPMENT-1.51%
70,000 Bell Microproducts, Inc. (a)................. $ 2,325,890 $ 2,327,500
181,600 BioSource International, Inc. (a)............ 3,177,687 3,972,500
------------ ------------
5,503,577 6,300,000
------------ ------------
TOTAL COMMON STOCKS.......................... $265,148,361 $401,827,914
============ ============
</TABLE>
SHORT-TERM INVESTMENTS-2.33%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
---------- ------------
<C> <S> <C>
FINANCE-DEPOSITORY CREDIT BANKING-2.33%
$ 4,876 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate - 6.42%......... $ 4,876
3,292,000 Wells Fargo Associates Corp., Master Variable
Rate Note, Current rate - 6.49%............ 3,292,000
6,430,203 Wells Fargo Cash Investment Money Market
Fund, Current rate - 6.27%................. 6,430,203
------------
TOTAL SHORT-TERM INVESTMENTS................. 9,727,079
------------
TOTAL INVESTMENTS IN SECURITIES
(COST: $274,875,440) (b)................... $411,554,993
============
</TABLE>
(a) Presently not paying dividend income.
(b) At August 31, 2000, the cost of securities for federal income tax purposes
was $275,552,254 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $149,806,826
Unrealized depreciation..................................... (13,804,087)
--------------------------------------------------------------------------
Net unrealized appreciation................................. $136,002,739
--------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets. Market value of investments in foreign
securities represents 4.35% of total net assets as of August 31, 2000.
32
<PAGE>
FORTIS STOCK FUNDS
Statements of Assets and Liabilities
August 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET GROWTH & CAPITAL
ALLOCATION VALUE INCOME CAPITAL GROWTH APPRECIATION
PORTFOLIO FUND FUND FUND FUND PORTFOLIO
---------- ---- -------- ---- ---- ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, as
detailed in the accompanying
schedules, at market (cost
$252,516,655; $56,899,847;
$34,973,804; $565,287,471;
$1,007,204,016; and $274,875,440
respectively) (Note 1)............ $291,540,054 $59,662,271 $43,492,261 $722,681,214 $1,590,472,432 $411,554,993
Collateral for securities lending
transactions (Note 1)............. 42,726,115 5,460,012 3,225,013 149,230,473 -- 82,873,978
Receivables:
Investment securities sold........ 3,537,598 -- 553,186 11,252,390 4,700,882 7,692,984
Interest and dividends............ 1,952,646 69,769 85,419 460,096 711,896 89,080
Subscriptions of capital stock.... 53,622 -- 10,974 16,048 180,429 164,115
Deferred registration costs
(Note 1).......................... 27,739 17,581 16,337 44,472 42,388 30,003
------------ ----------- ----------- ------------ -------------- ------------
TOTAL ASSETS.......................... 339,837,774 65,209,633 47,383,190 883,684,693 1,596,108,027 502,405,153
------------ ----------- ----------- ------------ -------------- ------------
LIABILITIES:
Payable upon return of securities
loaned (Note 1)................... 42,726,115 5,460,012 3,225,013 149,230,473 -- 82,873,978
Payable for investment securities
purchased......................... 3,325,629 602,083 -- 12,469,308 8,959,692 1,792,774
Redemptions of capital stock........ 35,963 6,856 180 1,900 110,871 333
Payable for investment advisory and
management fees (Note 2).......... 208,112 48,894 36,283 453,360 909,947 254,635
Payable for distribution fees
(Note 2).......................... 4,830 785 668 7,027 12,088 6,511
Accounts payable and accrued
expenses.......................... 44,935 25,407 21,469 82,821 317,794 47,145
------------ ----------- ----------- ------------ -------------- ------------
TOTAL LIABILITIES..................... 46,345,584 6,144,037 3,283,613 162,244,889 10,310,392 84,975,376
------------ ----------- ----------- ------------ -------------- ------------
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.............. 234,643,349 51,870,778 32,793,870 463,840,271 704,574,772 190,730,187
Unrealized appreciation of
investments....................... 39,023,399 2,764,724 8,518,457 157,393,743 583,268,416 136,679,553
Undistributed net investment
income............................ 877,627 -- 64,366 -- -- --
Accumulated net realized gain from
the sale of investments........... 18,947,815 4,430,094 2,722,884 100,205,790 297,954,447 90,020,037
------------ ----------- ----------- ------------ -------------- ------------
TOTAL NET ASSETS...................... $293,492,190 $59,065,596 $44,099,577 $721,439,804 $1,585,797,635 $417,429,777
============ =========== =========== ============ ============== ============
SHARES OUTSTANDING AND NET ASSET VALUE
PER SHARE:
Class A shares (based on net assets of
$205,677,542; $39,974,559;
$25,902,590; $615,472,844;
$1,203,376,074; and $314,325,965;
respectively and 10,997,987;
2,794,909; 1,527,320; 25,811,004;
26,474,814; and, 5,200,705 shares
outstanding; respectively).......... $18.70 $14.30 $16.96 $23.85 $45.45 $60.44
------------ ----------- ----------- ------------ -------------- ------------
Class B shares (based on net assets of
$26,356,478; $7,632,989; $8,375,644;
$38,263,693; $43,249,972; and
$38,245,589; respectively and
1,421,079; 547,526; 498,093;
1,717,966; 1,022,223; and, 663,336
shares outstanding; respectively)... $18.55 $13.94 $16.82 $22.27 $42.31 $57.66
------------ ----------- ----------- ------------ -------------- ------------
Class C shares (based on net assets of
$14,939,719; $2,662,109; $2,582,694;
$10,932,409; $10,352,328; and
$14,300,362; respectively and
809,630; 190,844; 153,574; 490,824;
244,635; and, 247,779 shares
outstanding; respectively).......... $18.45 $13.95 $16.82 $22.27 $42.32 $57.71
------------ ----------- ----------- ------------ -------------- ------------
Class H shares (based on net assets of
$44,165,134; $8,795,939; $7,238,649;
$56,770,858; $97,409,761; and
$50,557,861; respectively and
2,383,612; 630,441; 430,452;
2,546,061; 2,299,911; and, 875,989
shares outstanding; respectively)... $18.53 $13.95 $16.82 $22.30 $42.35 $57.72
------------ ----------- ----------- ------------ -------------- ------------
Class Z shares (based on net assets of
$2,353,317; $0; $0; $0;
$231,409,500; and $0; respectively
and 125,804; 0; 0; 0; 4,992,229;
and, 0 shares outstanding;
respectively)....................... $18.71 -- -- -- $46.35 --
------------ ----------- ----------- ------------ -------------- ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33
<PAGE>
FORTIS STOCK FUNDS
Statements of Operations
For the Year Ended August 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET GROWTH & CAPITAL
ALLOCATION VALUE INCOME CAPITAL GROWTH APPRECIATION
PORTFOLIO FUND FUND FUND FUND PORTFOLIO
---------- ---- -------- ---- ---- ------------
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income..................... $ 8,023,703 $ 197,874 $ 229,795 $ 1,067,753 $ 4,989,291 $ 772,012
Dividend income..................... 1,074,945 654,383 621,442 4,071,747 1,412,533 297,951
Fee income (Note 1)................. 59,084 10,699 6,782 205,156 -- 210,869
----------- ---------- ---------- ------------ ------------ ------------
Total income.......................... 9,157,732 862,956 858,019 5,344,656 6,401,824 1,280,832
----------- ---------- ---------- ------------ ------------ ------------
Expenses:
Investment advisory and management
fees (Note 2)..................... 2,343,084 554,153 427,823 5,277,095 9,414,124 2,640,661
Distribution fees (Class A)
(Note 2).......................... 876,087 94,490 63,710 1,493,359 2,482,240 1,098,715
Distribution fees (Class B)
(Note 2).......................... 218,867 69,490 76,528 325,352 312,182 241,714
Distribution fees (Class C)
(Note 2).......................... 129,087 24,942 25,496 91,629 74,224 86,015
Distribution fees (Class H)
(Note 2).......................... 395,069 81,762 70,958 504,835 751,560 372,975
Registration fees................... 65,381 43,876 42,015 111,327 99,901 50,917
Shareholders' notices and reports... 43,498 5,500 5,517 89,000 276,000 36,700
Legal and auditing fees (Note 2).... 28,800 19,428 17,950 53,600 82,500 29,000
Custodian fees...................... 32,300 15,000 10,000 43,500 65,500 43,500
Directors' fees and expenses........ 12,450 5,350 6,545 35,200 45,300 15,400
Other............................... 14,650 4,213 2,572 37,233 60,004 12,827
----------- ---------- ---------- ------------ ------------ ------------
Total expenses........................ 4,159,273 918,204 749,114 8,062,130 13,663,535 4,628,424
----------- ---------- ---------- ------------ ------------ ------------
NET INVESTMENT INCOME (LOSS)............ 4,998,459 (55,248) 108,905 (2,717,474) (7,261,711) (3,347,592)
----------- ---------- ---------- ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS: (NOTE 1)
Net realized gain from security
transactions........................ 21,790,069 5,346,236 3,026,489 114,430,011 329,645,180 106,755,209
Futures contracts..................... -- (182,760) -- -- -- --
----------- ---------- ---------- ------------ ------------ ------------
NET REALIZED GAIN ON INVESTMENTS........ 21,790,069 5,163,476 3,026,489 114,430,011 329,645,180 106,755,209
NET CHANGE IN UNREALIZED APPRECIATION ON
INVESTMENTS........................... 24,145,234 2,288,455 3,415,939 78,996,803 404,353,903 106,092,605
----------- ---------- ---------- ------------ ------------ ------------
NET GAIN ON INVESTMENTS................. 45,935,303 7,451,931 6,442,428 193,426,814 733,999,083 212,847,814
----------- ---------- ---------- ------------ ------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... $50,933,762 $7,396,683 $6,551,333 $190,709,340 $726,737,372 $209,500,222
=========== ========== ========== ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
ASSET ALLOCATION PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2000 AUGUST 31, 1999
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income..................................... $ 4,998,459 $ 3,351,119
Net realized gain on investments.......................... 21,790,069 39,010,869
Net change in unrealized appreciation on investments...... 24,145,234 694,492
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ 50,933,762 43,056,480
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A................................................. (3,800,459) (2,706,452)
Class B................................................. (307,326) (134,831)
Class C................................................. (183,907) (80,197)
Class H................................................. (562,477) (295,334)
Class Z................................................. (36,886) --
From net realized gains on investments
Class A................................................. (28,765,666) (17,281,875)
Class B................................................. (2,989,221) (1,236,960)
Class C................................................. (1,826,079) (718,270)
Class H................................................. (5,604,557) (2,773,052)
Class Z................................................. (166,650) --
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS......................... (44,243,228) (25,226,971)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (1,709,624 and 1,577,016 shares)................ 31,414,506 29,377,979
Class B (480,559 and 399,109 shares).................... 8,741,124 7,397,117
Class C (314,472 and 279,948 shares).................... 5,707,969 5,089,730
Class H (741,888 and 668,742 shares).................... 13,470,043 12,347,244
Class Z (118,503 and 44,279 shares)..................... 2,138,112 825,685
Proceeds from shares issued as a result of reinvested
dividends
Class A (1,766,633 and 1,057,067 shares)................ 30,955,039 18,789,494
Class B (185,526 and 75,874 shares)..................... 3,223,195 1,338,956
Class C (113,942 and 44,382 shares)..................... 1,969,213 780,177
Class H (344,468 and 168,973 shares).................... 5,980,036 2,980,951
Class Z (11,580 and 0 shares)........................... 203,505 --
Less cost of repurchase of shares
Class A (2,124,754 and 1,971,301 shares)................ (39,245,402) (36,665,720)
Class B (196,333 and 114,596 shares).................... (3,578,176) (2,123,372)
Class C (181,819 and 103,696 shares).................... (3,292,139) (1,910,835)
Class H (572,891 and 335,905 shares).................... (10,496,186) (6,230,286)
Class Z (48,558 and 0 shares)........................... (874,110) --
------------ ------------
NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS.......... 46,316,729 31,997,120
------------ ------------
TOTAL INCREASE IN NET ASSETS................................ 53,007,263 49,826,629
NET ASSETS:
Beginning of year......................................... 240,484,927 190,658,298
------------ ------------
End of year (includes undistributed net investment income
of $877,627 and $770,223, respectively)................. $293,492,190 $240,484,927
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
VALUE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2000 AUGUST 31, 1999
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss).............................. $ (55,248) $ 22,715
Net realized gain on investments.......................... 5,163,476 4,641,417
Net change in unrealized appreciation of investments...... 2,288,455 3,785,706
------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ 7,396,683 8,449,838
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A................................................. -- (90,265)
From net realized gains on investments
Class A................................................. (2,711,156) (2,398,431)
Class B................................................. (475,111) (554,270)
Class C................................................. (173,230) (228,122)
Class H................................................. (558,428) (753,192)
------------ -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS......................... (3,917,925) (4,024,280)
------------ -----------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (2,280,356 and 1,189,789 shares)................ 29,790,191 15,808,648
Class B (145,708 and 148,047 shares).................... 1,863,577 1,931,875
Class C (43,191 and 59,026 shares)...................... 556,468 769,872
Class H (166,534 and 134,878 shares).................... 2,137,878 1,761,525
Proceeds from shares issued as a result of reinvested
dividends
Class A (166,040 and 189,376 shares).................... 2,047,270 2,382,340
Class B (38,026 and 43,123 shares)...................... 459,735 536,455
Class C (14,271 and 17,988 shares)...................... 172,534 223,950
Class H (45,843 and 59,339 shares)...................... 554,237 738,771
Less cost of repurchase of shares
Class A (2,234,865 and 690,036 shares).................. (28,397,043) (9,083,209)
Class B (146,187 and 90,451 shares)..................... (1,861,275) (1,189,002)
Class C (56,869 and 56,624 shares)...................... (726,966) (743,072)
Class H (197,431 and 177,439 shares).................... (2,505,700) (2,317,578)
------------ -----------
NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS.......... 4,090,906 10,820,575
------------ -----------
TOTAL INCREASE IN NET ASSETS................................ 7,569,664 15,246,133
NET ASSETS:
Beginning of year......................................... 51,495,932 36,249,799
------------ -----------
End of year............................................... $ 59,065,596 $51,495,932
============ ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
GROWTH & INCOME FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2000 AUGUST 31, 1999
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income..................................... $ 108,905 $ 372,261
Net realized gain on investments.......................... 3,026,489 697,531
Net change in unrealized appreciation of investments...... 3,415,939 4,739,460
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ 6,551,333 5,809,252
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A................................................. (118,784) (303,045)
Class B................................................. (5,120) (41,733)
Class C................................................. (1,709) (17,399)
Class H................................................. (4,962) (49,939)
From net realized gains on investments
Class A................................................. (412,864) (643,674)
Class B................................................. (121,067) (159,781)
Class C................................................. (41,807) (67,580)
Class H................................................. (115,665) (193,318)
----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS......................... (821,978) (1,476,469)
----------- -----------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (326,487 and 566,946 shares).................... 5,144,510 8,501,033
Class B (118,698 and 161,596 shares).................... 1,871,079 2,427,125
Class C (27,702 and 48,678 shares)...................... 429,027 718,618
Class H (109,133 and 159,572 shares).................... 1,720,055 2,374,853
Proceeds from shares issued as a result of reinvested
dividends
Class A (33,529 and 63,617 shares)...................... 519,035 919,640
Class B (7,966 and 13,800 shares)....................... 124,468 198,917
Class C (2,729 and 5,772 shares)........................ 42,638 83,171
Class H (7,390 and 16,192 shares)....................... 115,458 233,312
Less cost of repurchase of shares
Class A (592,081 and 462,252 shares).................... (9,321,415) (6,967,771)
Class B (114,019 and 81,905 shares)..................... (1,796,652) (1,227,313)
Class C (42,433 and 57,345 shares)...................... (668,686) (853,460)
Class H (176,808 and 164,161 shares).................... (2,767,097) (2,458,927)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE
TRANSACTIONS.............................................. (4,587,580) 3,949,198
----------- -----------
TOTAL INCREASE IN NET ASSETS................................ 1,141,775 8,281,981
NET ASSETS:
Beginning of year......................................... 42,957,802 34,675,821
----------- -----------
End of year (includes undistributed net investment income
of $64,366 and $86,036, respectively)................... $44,099,577 $42,957,802
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
CAPITAL FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2000 AUGUST 31, 1999
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment loss....................................... $ (2,717,474) $ (902,629)
Net realized gain on investments.......................... 114,430,011 146,221,226
Net change in unrealized appreciation of investments...... 78,996,803 5,652,886
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ 190,709,340 150,971,483
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments
Class A................................................. (127,601,625) (87,040,747)
Class B................................................. (6,184,590) (2,796,230)
Class C................................................. (1,747,450) (665,336)
Class H................................................. (9,997,297) (5,017,579)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS......................... (145,530,962) (95,519,892)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (3,116,868 and 10,587,633 shares)............... 70,937,477 236,382,465
Class B (504,569 and 389,224 shares).................... 10,725,463 8,333,221
Class C (204,551 and 90,310 shares)..................... 4,384,826 1,911,035
Class H (658,845 and 632,945 shares).................... 14,082,716 13,448,386
Proceeds from shares issued as a result of reinvested
dividends
Class A (5,521,194 and 4,497,809 shares)................ 109,761,564 79,971,053
Class B (328,954 and 159,215 shares).................... 6,144,862 2,718,124
Class C (93,012 and 38,657 shares)...................... 1,737,472 659,875
Class H (525,873 and 280,596 shares).................... 9,833,848 4,792,688
Less cost of repurchase of shares
Class A (7,002,235 and 9,187,334 shares)................ (156,163,722) (203,714,963)
Class B (257,162 and 134,973 shares).................... (5,519,205) (2,875,169)
Class C (69,338 and 62,180 shares)...................... (1,472,555) (1,330,943)
Class H (510,063 and 410,031 shares).................... (11,063,331) (8,719,318)
Issuance of shares in connection with fund merger
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.......... 53,389,415 226,060,126
-------------- --------------
TOTAL INCREASE IN NET ASSETS................................ 98,567,793 281,511,717
NET ASSETS:
Beginning of year......................................... 622,872,011 341,360,294
-------------- --------------
End of year............................................... $ 721,439,804 $ 622,872,011
============== ==============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2000 AUGUST 31, 1999
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment loss....................................... $ (7,261,711) $ (4,091,361)
Net realized gain on investments.......................... 329,645,180 246,700,072
Net change in unrealized appreciation of investments...... 404,353,903 43,202,949
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ 726,737,372 285,811,660
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From realized gains on investments
Class A................................................. (161,527,542) (184,308,860)
Class B................................................. (4,775,505) (4,328,601)
Class C................................................. (1,113,135) (982,671)
Class H................................................. (11,826,752) (11,797,065)
Class Z................................................. (23,575,253) (29,609,385)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS......................... (202,818,187) (231,026,582)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (2,190,248 and 20,454,621 shares)............... 81,678,696 608,315,710
Class B (291,506 and 195,729 shares).................... 10,512,447 5,568,918
Class C (95,125 and 51,195 shares)...................... 3,396,384 1,488,735
Class H (508,973 and 446,438 shares).................... 18,092,803 12,868,880
Class Z (1,406,751 and 573,572 shares).................. 56,652,942 17,237,982
Proceeds from shares issued as a result of reinvested
dividends
Class A (5,123,068 and 6,493,303 shares)................ 150,002,846 175,708,779
Class B (171,340 and 165,721 shares).................... 4,698,153 4,282,243
Class C (40,027 and 37,976 shares)...................... 1,097,537 981,304
Class H (425,701 and 452,647 shares).................... 11,681,176 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 (4,675,256 and 22,649,562 shares)............... (172,622,113) (675,171,668)
Class B (132,147 and 100,305 shares).................... (4,627,149) (2,869,629)
Class C (48,720 and 25,873 shares)...................... (1,623,319) (742,673)
Class H (360,901 and 366,624 shares).................... (12,695,963) (10,603,511)
Class Z (1,006,314 and 970,240 shares).................. (36,361,483) (29,737,905)
-------------- --------------
NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS.......... 132,636,544 147,660,854
-------------- --------------
TOTAL INCREASE IN NET ASSETS................................ 656,555,729 202,445,932
NET ASSETS:
Beginning of year......................................... 929,241,906 726,795,974
-------------- --------------
End of year............................................... $1,585,797,635 $ 929,241,906
============== ==============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39
<PAGE>
FORTIS STOCK FUNDS
Statements of Changes in Net Assets
CAPITAL APPRECIATION PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2000 AUGUST 31, 1999
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment loss....................................... $ (3,347,592) $ (1,697,696)
Net realized gain on investments.......................... 106,755,209 64,284,638
Net change in unrealized appreciation of investments...... 106,092,605 20,500,923
------------ --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ 209,500,222 83,087,865
------------ --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From realized gains on investments
Class A................................................. (43,866,932) (25,279,675)
Class B................................................. (3,478,903) (1,974,092)
Class C................................................. (1,168,415) (717,375)
Class H................................................. (6,295,778) (3,822,075)
------------ --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS......................... (54,810,028) (31,793,217)
------------ --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (1,707,007 and 4,148,860 shares)................ 87,494,320 120,742,519
Class B (337,973 and 94,645 shares)..................... 16,971,885 2,801,141
Class C (205,148 and 464,149 shares).................... 9,771,866 13,807,732
Class H (274,933 and 156,855 shares).................... 13,692,953 4,661,652
Proceeds from shares issued as a result of reinvested
dividends
Class A (1,155,915 shares).............................. 42,606,677 24,709,211
Class B (97,519 shares)................................. 3,443,402 1,953,810
Class C (33,023 shares)................................. 1,167,364 712,165
Class H (174,093 shares)................................ 6,154,196 3,796,302
Less cost of repurchase of shares
Class A (1,750,223 and 4,016,217 shares)................ (84,515,959) (119,898,749)
Class B (99,482 and 69,099 shares)...................... (4,957,119) (2,024,359)
Class C (93,762 and 457,661 shares)..................... (4,113,157) (13,737,717)
Class H (167,054 and 170,725 shares).................... (8,114,751) (5,069,238)
------------ --------------
NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS.......... 79,601,677 32,454,469
------------ --------------
TOTAL INCREASE IN NET ASSETS................................ 234,291,871 83,749,117
NET ASSETS:
Beginning of year......................................... 183,137,906 99,388,789
------------ --------------
End of year............................................... $417,429,777 $ 183,137,906
============ ==============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements
--------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The funds or portfolios (the
funds) are open-end, diversified management investment companies, each of
which have different investment objectives and their own investment
portfolios and net asset values. Asset Allocation and Capital Appreciation
Portfolios are funds within Fortis Advantage Portfolios, Inc. ("Fortis
Advantage"), Fortis Value Fund, Fortis Growth & Income Fund and Fortis
Capital Fund are funds within Fortis Equity Portfolios, Inc. ("Fortis
Equity") and Fortis Growth Fund is a fund within Fortis Growth Fund, Inc. The
investment objectives of each fund are as follows:
- The objective of the Fortis Asset Allocation Portfolio is maximum total
return on invested capital, to be derived mainly from capital appreciation,
dividends and interest.
- The objective of Fortis Value Fund is short and long-term capital
appreciation. Current income is only a secondary objective. The portfolio
invests primarily in equity securities and selects stocks based on a
concept of fundamental value.
- The objective of the Fortis Growth & Income Fund is capital appreciation
and current income. The fund invests primarily in equity securities that
provide an income component.
- The objective of the Fortis Capital Fund is short and long-term capital
appreciation. Current income is only a secondary objective.
- The objective of Fortis Growth Fund is short and long-term capital
appreciation. Current income is only a secondary objective.
- The objective of Fortis Capital Appreciation Portfolio is maximum long-term
capital appreciation. Dividend and interest income from investments, if
any, is incidental.
The Articles of Incorporation of Fortis Advantage and Fortis Equity permits
the Board of Directors to create additional funds 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 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 fund 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 fund 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 funds investing in fixed income securities amortize original issue
discount, long-term bond premium, and market discount.
For the year ended August 31, 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................... $ 407,431,994 $ 398,611,916
Value Fund................................... 119,269,722 121,136,128
Growth & Income Fund......................... 45,960,722 51,628,486
Capital Fund................................. 1,097,283,072 1,183,268,778
Growth Fund.................................. 1,672,075,567 1,769,841,540
Capital Appreciation Portfolio............... 647,154,516 630,067,172
</TABLE>
41
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
LENDING OF PORTFOLIO SECURITIES: At August 31, 2000, securities were on loan
to brokers from the funds. For collateral, the funds' custodian received cash
which is maintained in a separate account and invested by the custodian in
short-term investment vehicles. The risks to the funds in security lending
transactions are that the borrower may not provide additional collateral when
required or return the securities when due and that the proceeds from the
sale of investments made with cash collateral received will be less than
amounts required to be returned to the borrowers. Value of securities on loan
and fee income from securities lending was as follows for the year ended
August 31, 2000:
<TABLE>
<CAPTION>
Securities
On Loan Collateral Fee Income
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------
Asset Allocation Portfolio................... $ 41,331,706 $ 42,726,115 $ 59,084
Value Fund................................... 5,249,350 5,460,012 10,699
Growth & Income Fund......................... 3,142,606 3,225,013 6,782
Capital Fund................................. 145,509,055 149,230,473 205,156
Capital Appreciation Portfolio............... 81,738,288 82,873,978 210,869
</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 fund is a single taxable entity.
On a calendar year basis, each fund intends to distribute substantially all
of its net investment income and realized gains, if any, to avoid payment of
federal excise taxes.
Net investment income and net realized gains differ for financial statement
and tax purposes primarily because of wash sale transactions. The character
of distributions made during the year from net investment income or net
realized gains may, therefore, differ from their ultimate characterization
for federal income tax purposes. Also, due to the timing of dividend
distributions, the fiscal year in which amounts are distributed may differ
from the year that the income or realized gains (losses) were recorded by the
fund.
On the Statements of Assets and Liabilities, due to permanent book-to-tax
differences, such as distributions upon and net operating losses, accumulated
net realized gain (loss) and undistributed net investment income have been
increased (decreased), resulting in a net reclassification adjustment to
increase paid-in-capital by the following:
<TABLE>
<CAPTION>
Undistributed
Net Investment Accumulated
Income Paid-in-Capital Gains
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------
Asset Allocation Portfolio................... $ -- $2,497,744 $ (2,497,744)
Value Fund................................... 55,248 529,467 (584,715)
Growth & Income Fund......................... -- 302,543 (302,543)
Capital Fund................................. 2,717,474 10,884,575 (13,602,049)
Growth Fund.................................. 7,261,711 23,701,479 (30,963,190)
Capital Appreciation Portfolio............... 3,347,592 10,077,428 (13,425,020)
</TABLE>
DEFERRED COSTS: Registration costs are deferred and charged to income over
the registration period.
INCOME AND CAPITAL GAINS DISTRIBUTIONS: It is the policy of Fortis Asset
Allocation Portfolio to pay quarterly distributions from net investment
income and pay annual distributions from net investment income, if any, for
Fortis Value Fund, Fortis Growth & Income Fund, Fortis Capital Fund, Fortis
Growth Fund and Fortis Capital Appreciation Portfolio. 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.
For federal income tax purposes the funds may designate as capital gains
distributions the earnings and profits distributed to shareholders on the
redemption of fund shares during the year.
ILLIQUID SECURITIES: At August 31, 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 August 31, 2000, was $2,959,288 in the Asset
Allocation Portfolio and; $2,362,813 in the Growth & Income Fund, which
represents 1.01% and 5.36% 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
accounting principles generally accepted in the United States of America
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 Wells Fargo 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 Wells Fargo Bank Minnesota N.A. announces from time to time
as its prime rate or B) the Federal Funds rate plus 50 basis points. Each
participating fund pays a commitment fee equal to its pro rata share of the
amount of the credit facility at a rate of 0.08% per annum. The funds had no
borrowings during the year ended August 31, 2000.
42
<PAGE>
--------------------------------------------------------------------------------
FUTURES TRANSACTIONS: Certain funds may invest in financial futures contracts
in order to gain exposure to or protect against changes in the market. The
Value Fund is exposed to market risk as a result of changes in the value of
the underlying financial instruments (see the Notes to the Schedule of
Investments). Investment in financial futures require the funds to "mark to
market" on a daily basis, which reflects the change in the market value of
the contract at the close of each day's trading. Accordingly, variation
margin payments are received or made to reflect daily unrealized gain or
losses. When the contracts are closed, the funds recognize a realized gain or
loss. These investments require initial margin deposits with a custodian,
which consist of cash or cash equivalents. The amount of these deposits is
determined by the exchange or Board of Trade on which the contract is traded
and is subject to change. Contracts open as of August 31, 2000, and their
related unrealized market appreciation are set forth in the Notes to the
Schedule of Investments.
2. PAYMENTS TO RELATED PARTIES: Fortis Advisers, Inc., (Advisers), is the
investment adviser for each fund. Investment advisory and management fees are
computed for each of the funds at an annual rate of 1.00% of the first
$100 million of average daily net assets, .80% for the next $150 million, and
.70% for average daily net assets over $250 million.
In addition to the investment advisory and management fee, Classes A, B, C,
and H pay Fortis Investors, Inc. (the funds' principal underwriter)
distribution fees equal to .45% of average daily net assets for Class A for
each of Asset Allocation and Capital Appreciation Portfolios and .25% of
average daily net assets for Class A for each of Value Fund, Growth & Income
Fund, Capital Fund, and Growth Fund and 1.00% of average daily net assets for
Classes B, C, and H for each fund on an annual basis, to be used to
compensate those who sell shares of the fund and to pay certain other
expenses of selling fund shares. Fortis Investors, Inc. also received sales
charges (paid by purchasers or redeemers of the funds' shares) as follows:
<TABLE>
<CAPTION>
Class A Class B Class C Class H
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------
Asset Allocation Portfolio................... $ 635,013 $36,661 $8,928 $112,949
Value Fund................................... 112,071 17,178 621 24,718
Growth & Income Fund......................... 97,721 19,739 317 27,112
Capital Fund................................. 941,792 43,838 1,843 106,068
Growth Fund.................................. 1,234,877 40,004 2,173 115,520
Capital Appreciation Portfolio............... 1,065,848 36,926 5,814 50,876
</TABLE>
For the year ended August 31, 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................... $ 7,600
Value Fund................................... 1,500
Growth & Income Fund......................... 1,300
Capital Fund................................. 20,000
Growth Fund.................................. 45,000
Capital Appreciation......................... 7,500
</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 is the surviving entity for financial reporting and income tax purposes.
The merger was accomplished by a tax free exchange as detailed below:
<TABLE>
<CAPTION>
Net Assets of
Fiduciary Fund on Fiduciary Fund Capital Fund
October 23, 1998 Shares Exchanged Shares Issued
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
Class A...................................... $77,701,653 2,451,978 4,303,728
Class B...................................... 5,171,124 171,119 298,388
Class C...................................... 1,437,049 47,523 82,934
Class H...................................... 10,173,846 336,674 586,642
</TABLE>
Fortis Fiduciary Fund's net assets at October 23, 1998 included unrealized
appreciation of $20,759,680, accumulated net realized losses of ($347,629)
and capital stock of $74,071,621.
The net assets of Fortis Capital Funds classes immediately before the merger
were as follows:
<TABLE>
<CAPTION>
Capital Fund Net Assets
<S> <C>
-------------------------------------------------------------
Class A...................................... $332,341,920
Class B...................................... 10,427,170
Class C...................................... 2,509,913
Class H...................................... 18,726,666
</TABLE>
43
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS: Selected per share historical data for each of the
funds was as follows:
<TABLE>
<CAPTION>
Class A
----------------------------------------------------
Year Ended August 31,
----------------------------------------------------
ASSET ALLOCATION PORTFOLIO 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 18.43 $ 16.91 $ 18.98 $ 16.48 $ 16.52
-------- -------- -------- -------- --------
Operations:
Investment income - net............... .37 .30 .39 .39 .47
Net realized and unrealized gain on
investments......................... 3.30 3.47 .13 3.47 .29
-------- -------- -------- -------- --------
Total from operations................... 3.67 3.77 .52 3.86 .76
-------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.37) (.29) (.41) (.41) (.47)
From net realized gains on
investments......................... (3.03) (1.96) (2.18) (.95) (.32)
Excess distributions of net realized
gains............................... -- -- -- -- (.01)
-------- -------- -------- -------- --------
Total distributions to shareholders..... (3.40) (2.25) (2.59) (1.36) (.80)
-------- -------- -------- -------- --------
Net asset value, end of year............ $ 18.70 $ 18.43 $ 16.91 $ 18.98 $ 16.48
-------- -------- -------- -------- --------
Total Return @.......................... 21.45% 22.96% 2.71% 24.62% 4.73%
Net assets end of year (000s omitted)... $205,678 $177,794 $151,920 $156,734 $136,656
Ratio of expenses to average daily net
assets................................ 1.39% 1.42% 1.44% 1.48% 1.50%
Ratio of net investment income to
average daily net assets.............. 2.00% 1.60% 2.07% 2.22% 2.85%
Portfolio turnover rate................. 153% 159% 104% 109% 89%
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
<TABLE>
<CAPTION>
Class B
--------------------------------------------
Year Ended August 31,
--------------------------------------------
ASSET ALLOCATION PORTFOLIO 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 18.30 $ 16.80 $18.87 $16.40 $16.46
------- ------- ------ ------ ------
Operations:
Investment income - net............... .27 .19 .29 .27 .37
Net realized and unrealized gain on
investments......................... 3.28 3.46 .13 3.47 .29
------- ------- ------ ------ ------
Total from operations................... 3.55 3.65 .42 3.74 .66
------- ------- ------ ------ ------
Distributions to shareholders:
From investment income - net.......... (.27) (.19) (.31) (.32) (.39)
From net realized gains on
investments......................... (3.03) (1.96) (2.18) (.95) (.32)
Excess distributions of net realized
gains............................... -- -- -- -- (.01)
------- ------- ------ ------ ------
Total distributions to shareholders..... (3.30) (2.15) (2.49) (1.27) (.72)
------- ------- ------ ------ ------
Net asset value, end of year............ $ 18.55 $ 18.30 $16.80 $18.87 $16.40
------- ------- ------ ------ ------
Total Return @.......................... 20.84% 22.32% 2.14% 23.92% 4.12%
Net assets end of year (000s omitted)... $26,356 $17,408 $9,928 $7,462 $4,411
Ratio of expenses to average daily net
assets................................ 1.94% 1.97% 1.99% 2.03% 2.05%
Ratio of net investment income to
average daily net assets.............. 1.45% 1.05% 1.50% 1.67% 2.34%
Portfolio turnover rate................. 153% 159% 104% 109% 89%
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
44
<PAGE>
--------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
--------------------------------------------
Year Ended August 31,
--------------------------------------------
ASSET ALLOCATION PORTFOLIO 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 18.22 $ 16.74 $18.81 $16.35 $16.41
------- ------- ------ ------ ------
Operations:
Investment income - net............... .27 .19 .29 .26 .37
Net realized and unrealized gain on
investments......................... 3.26 3.44 .13 3.47 .29
------- ------- ------ ------ ------
Total from operations................... 3.53 3.63 .42 3.73 .66
------- ------- ------ ------ ------
Distributions to shareholders:
From investment income - net.......... (.27) (.19) (.31) (.32) (.39)
From net realized gains on
investments......................... (3.03) (1.96) (2.18) (.95) (.32)
Excess distributions of net realized
gains............................... -- -- -- -- (.01)
------- ------- ------ ------ ------
Total distributions to shareholders..... (3.30) (2.15) (2.49) (1.27) (.72)
------- ------- ------ ------ ------
Net asset value, end of year............ $ 18.45 $ 18.22 $16.74 $18.81 $16.35
------- ------- ------ ------ ------
Total Return @.......................... 20.81% 22.27% 2.15% 23.93% 4.13%
Net assets end of year (000s omitted)... $14,940 $10,259 $5,831 $4,789 $2,641
Ratio of expenses to average daily net
assets................................ 1.94% 1.97% 1.99% 2.03% 2.05%
Ratio of net investment income to
average daily net assets.............. 1.45% 1.05% 1.51% 1.67% 2.33%
Portfolio turnover rate................. 153% 159% 104% 109% 89%
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
<TABLE>
<CAPTION>
Class Z
Class H ---------------
----------------------------------------------- Year Ended
Year Ended August 31, August 31,
----------------------------------------------- ---------------
ASSET ALLOCATION PORTFOLIO 2000 1999 1998 1997 1996 2000 1999+
<S> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 18.29 $ 16.79 $ 18.86 $ 16.39 $ 16.44 $18.44 $19.05
------- ------- ------- ------- ------- ------ ------
Operations:
Investment income - net............... .27 .19 .29 .27 .38 .46 .07
Net realized and unrealized gain on
investments......................... 3.27 3.46 .13 3.47 .29 3.30 (.68)
------- ------- ------- ------- ------- ------ ------
Total from operations................... 3.54 3.65 .42 3.74 .67 3.76 (.61)
------- ------- ------- ------- ------- ------ ------
Distributions to shareholders:
From investment income - net.......... (.27) (.19) (.31) (.32) (.39) (.46) --
From net realized gains on
investments......................... (3.03) (1.96) (2.18) (.95) (.32) (3.03) --
Excess distributions of net realized
gains............................... -- -- -- -- (.01)
------- ------- ------- ------- ------- ------ ------
Total distributions to shareholders..... (3.30) (2.15) (2.49) (1.27) (.72) (3.49) --
------- ------- ------- ------- ------- ------ ------
Net asset value, end of year............ $ 18.53 $ 18.29 $ 16.79 $ 18.86 $ 16.39 $18.71 $18.44
------- ------- ------- ------- ------- ------ ------
Total Return @.......................... 20.78% 22.32% 2.15% 23.93% 4.19% 21.99% (3.20%)
Net assets end of year (000s omitted)... $44,165 $34,207 $22,979 $17,142 $10,904 $2,353 $ 817
Ratio of expenses to average daily net
assets................................ 1.94% 1.97% 1.99% 2.03% 2.05% .94% .97%*
Ratio of net investment income to
average daily net assets.............. 1.45% 1.05% 1.50% 1.67% 2.32% 2.45% 2.05%*
Portfolio turnover rate................. 153% 159% 104% 109% 89% 153% 159%
</TABLE>
* Annualized.
+ 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.
45
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
----------------------------------------------
Year Ended August 31,
----------------------------------------------
VALUE FUND 2000 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 13.28 $ 11.85 $ 13.51 $ 10.75 $10.00
------- ------- ------- ------- ------
Operations:
Investment income - net............... .01 .05 .09 .09 .05
Net realized and unrealized gain
(loss) on investments............... 1.94 2.73 (.30) 2.94 .70
------- ------- ------- ------- ------
Total from operations................... 1.95 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 year............ $ 14.30 $ 13.28 $ 11.85 $ 13.51 $10.75
------- ------- ------- ------- ------
Total Return @.......................... 15.76% 24.10% (2.52%) 28.66% 7.50%
Net assets end of year (000s omitted)... $39,975 $34,302 $22,449 $21,855 $9,847
Ratio of expenses to average daily net
assets................................ 1.42% 1.48% 1.52% 1.59% 1.65%*
Ratio of net investment income to
average daily net assets.............. .14% .32% .55% .72% .75%*
Portfolio turnover rate................. 228% 266% 260% 93% 41%
</TABLE>
* Annualized.
+ For the period from January 2, 1996 (commencement of operations) to
August 31, 1996.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
<TABLE>
<CAPTION>
Class B
------------------------------------------
Year Ended August 31,
------------------------------------------
VALUE FUND 2000 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
Net asset value, beginning of year...... $13.06 $11.71 $13.39 $10.70 $10.00
------ ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.08) (.08) (.02) (.01) --
Net realized and unrealized gain
(loss) on investments............... 1.89 2.73 (.30) 2.94 .70
------ ------ ------ ------ ------
Total from operations................... 1.81 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 year............ $13.94 $13.06 $11.71 $13.39 $10.70
------ ------ ------ ------ ------
Total Return @.......................... 14.90% 23.20% (3.33%) 27.75% 7.00%
Net assets end of year (000s omitted)... $7,633 $6,662 $4,794 $2,480 $ 642
Ratio of expenses to average daily net
assets................................ 2.17% 2.23% 2.27% 2.34% 2.40%*
Ratio of net investment income to
average daily net assets.............. (.61%) (.43%) (.20%) (.04%) --
Portfolio turnover rate................. 228% 266% 260% 93% 41%
</TABLE>
* Annualized.
+ For the period from January 2, 1996 (commencement of operations) to
August 31, 1996.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
46
<PAGE>
--------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
------------------------------------------
Year Ended August 31,
------------------------------------------
VALUE FUND 2000 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
Net asset value, beginning of year...... $13.07 $11.72 $13.39 $10.70 $10.00
------ ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.08) (.08) (.01) (.01) --
Net realized and unrealized gain
(loss) on investments............... 1.89 2.73 (.30) 2.94 .70
------ ------ ------ ------ ------
Total from operations................... 1.81 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 year............ $13.95 $13.07 $11.72 $13.39 $10.70
------ ------ ------ ------ ------
Total Return @.......................... 14.90% 23.18% (3.24%) 27.75% 7.00%
Net assets end of year (000s omitted)... $2,662 $2,486 $1,991 $1,002 $ 223
Ratio of expenses to average daily net
assets................................ 2.17% 2.23% 2.27% 2.34% 2.40%*
Ratio of net investment income to
average daily net assets.............. (.61%) (.43%) (.20%) (.04%) --
Portfolio turnover rate................. 228% 266% 260% 93% 41%
</TABLE>
* Annualized.
+ For the period from January 2, 1996 (commencement of operations) to
August 31, 1996.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
<TABLE>
<CAPTION>
Class H
------------------------------------------
Year Ended August 31,
------------------------------------------
VALUE FUND 2000 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
Net asset value, beginning of year...... $13.07 $11.72 $13.39 $10.70 $10.00
------ ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.08) (.08) (.01) (.01) --
Net realized and unrealized gain
(loss) on investments............... 1.89 2.73 (.30) 2.94 .70
------ ------ ------ ------ ------
Total from operations................... 1.81 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 year............ $13.95 $13.07 $11.72 $13.39 $10.70
------ ------ ------ ------ ------
Total Return @.......................... 14.90% 23.18% (3.24%) 27.75% 7.00%
Net assets end of year (000s omitted)... $8,796 $8,045 $7,016 $4,896 $1,605
Ratio of expenses to average daily net
assets................................ 2.17% 2.23% 2.27% 2.34% 2.40%*
Ratio of net investment income to
average daily net assets.............. (.61%) (.43%) (.20%) (.04%) --
Portfolio turnover rate................. 228% 266% 260% 93% 41%
</TABLE>
* Annualized.
+ For the period from January 2, 1996 (commencement of operations) to
August 31, 1996.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
47
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
----------------------------------------------
Year Ended August 31,
----------------------------------------------
GROWTH AND INCOME FUND 2000 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 14.83 $ 13.20 $ 13.06 $ 10.35 $10.00
------- ------- ------- ------- ------
Operations:
Investment income - net............... .08 .17 .32 .20 .07
Net realized and unrealized gain on
investments......................... 2.37 2.03 .07 2.77 .34
------- ------- ------- ------- ------
Total from operations................... 2.45 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 year............ $ 16.96 $ 14.83 $ 13.20 $ 13.06 $10.35
------- ------- ------- ------- ------
Total Return @.......................... 16.73% 16.84% 2.81% 29.00% 4.11%
Net assets end of year (000s omitted)... $25,903 $26,100 $20,994 $13,907 $3,117
Ratio of expenses to average daily net
assets................................ 1.45% 1.44% 1.55% 1.75% 2.33%*
Ratio of net investment income to
average daily net assets.............. .56% 1.18% 1.71% 1.68% 1.16%*
Portfolio turnover rate................. 112% 65% 20% 15% 5%
</TABLE>
* Annualized.
+ For the period from January 2, 1996 (commencement of operations) to
August 31, 1996.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
<TABLE>
<CAPTION>
Class B
------------------------------------------
Year Ended August 31,
------------------------------------------
GROWTH AND INCOME FUND 2000 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
Net asset value, beginning of year...... $14.77 $13.16 $13.03 $10.32 $10.00
------ ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.03) .07 .20 .11 .02
Net realized and unrealized gain on
investments......................... 2.34 2.03 .07 2.77 .34
------ ------ ------ ------ ------
Total from operations................... 2.31 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 year............ $16.82 $14.77 $13.16 $13.03 $10.32
------ ------ ------ ------ ------
Total Return @.......................... 15.79% 16.08% 1.99% 28.16% 3.55%
Net assets end of year (000s omitted)... $8,376 $7,168 $5,159 $2,306 $ 508
Ratio of expenses to average daily net
assets................................ 2.20% 2.19% 2.30% 2.50% 3.08%*
Ratio of net investment income to
average daily net assets.............. (.19%) .41% .96% .92% .35%*
Portfolio turnover rate................. 112% 65% 20% 15% 5%
</TABLE>
* Annualized.
+ For the period from January 2, 1996 (commencement of operations) to
August 31, 1996.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
48
<PAGE>
--------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class C
------------------------------------------
Year Ended August 31,
------------------------------------------
GROWTH AND INCOME FUND 2000 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
Net asset value, beginning of year...... $14.76 $13.16 $13.03 $10.33 $10.00
------ ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.03) .06 .20 .10 .03
Net realized and unrealized gain on
investments......................... 2.35 2.03 .07 2.77 .34
------ ------ ------ ------ ------
Total from operations................... 2.32 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 year............ $16.82 $14.76 $13.16 $13.03 $10.33
------ ------ ------ ------ ------
Total Return @.......................... 15.87% 16.00% 1.99% 28.03% 3.65%
Net assets end of year (000s omitted)... $2,583 $2,445 $2,217 $1,290 $ 302
Ratio of expenses to average daily net
assets................................ 2.20% 2.19% 2.30% 2.50% 3.08%*
Ratio of net investment income to
average daily net assets.............. (.19%) .41% .96% .94% .54%*
Portfolio turnover rate................. 112% 65% 20% 15% 5%
</TABLE>
* Annualized.
+ For the period from January 2, 1996 (commencement of operations) to
August 31, 1996.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
<TABLE>
<CAPTION>
Class H
------------------------------------------
Year Ended August 31,
------------------------------------------
GROWTH AND INCOME FUND 2000 1999 1998 1997 1996+
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
Net asset value, beginning of year...... $14.76 $13.16 $13.03 $10.33 $10.00
------ ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.03) .06 .20 .10 .03
Net realized and unrealized gain on
investments......................... 2.35 2.03 .07 2.77 .34
------ ------ ------ ------ ------
Total from operations................... 2.32 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 year............ $16.82 $14.76 $13.16 $13.03 $10.33
------ ------ ------ ------ ------
Total Return @.......................... 15.87% 16.00% 1.99% 28.03% 3.65%
Net assets end of year (000s omitted)... $7,239 $7,245 $6,306 $5,085 $1,286
Ratio of expenses to average daily net
assets................................ 2.20% 2.19% 2.30% 2.50% 3.08%*
Ratio of net investment income to
average daily net assets.............. (.19%) .41% .96% .93% .44%*
Portfolio turnover rate................. 112% 65% 20% 15% 5%
</TABLE>
* Annualized.
+ For the period from January 2, 1996 (commencement of operations) to
August 31, 1996.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
49
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
----------------------------------------------------
Year Ended August 31,
----------------------------------------------------
CAPITAL FUND 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 22.81 $ 22.37 $ 26.13 $ 21.89 $ 21.22
-------- -------- -------- -------- --------
Operations:
Investment income (loss) - net........ (.08) (.03) (.08) (.08) .04
Net realized and unrealized gain on
investments......................... 6.47 6.73 .38 7.06 .67
-------- -------- -------- -------- --------
Total from operations................... 6.39 6.70 .30 6.98 .71
-------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... -- -- -- (.01) (.04)
From net realized gains on
investments......................... (5.35) (6.26) (4.06) (2.73) --
-------- -------- -------- -------- --------
Total distributions to shareholders..... (5.35) (6.26) (4.06) (2.74) (.04)
-------- -------- -------- -------- --------
Net asset value, end of year............ $ 23.85 $ 22.81 $ 22.37 $ 26.13 $ 21.89
-------- -------- -------- -------- --------
Total Return @.......................... 32.70% 37.88% 1.56% 34.57% 3.36%
Net assets end of year (000s omitted)... $615,473 $551,551 $312,582 $340,949 $277,587
Ratio of expenses to average daily net
assets................................ 1.07% 1.10% 1.13% 1.18% 1.21%
Ratio of net investment income to
average daily net assets.............. (.29%) (.08%) (.28%) (.33%) .17%
Portfolio turnover rate................. 165% 177% 71% 43% 28%
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
<TABLE>
<CAPTION>
Class B
--------------------------------------------
Year Ended August 31,
--------------------------------------------
CAPITAL FUND 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 21.77 $ 21.73 $25.67 $21.69 $21.14
------- ------- ------ ------ ------
Operations:
Investment income (loss) - net........ (.62) (.43) (.26) (.35) (.12)
Net realized and unrealized gain on
investments......................... 6.47 6.73 .38 7.06 .67
------- ------- ------ ------ ------
Total from operations................... 5.85 6.30 .12 6.71 .55
------- ------- ------ ------ ------
Distributions to shareholders:
From net realized gains on
investments......................... (5.35) (6.26) (4.06) (2.73) --
------- ------- ------ ------ ------
Net asset value, end of year............ $ 22.27 $ 21.77 $21.73 $25.67 $21.69
------- ------- ------ ------ ------
Total Return @.......................... 31.59% 36.94% .80% 33.55% 2.60%
Net assets end of year (000s omitted)... $38,264 $24,847 $9,339 $7,284 $4,097
Ratio of expenses to average daily net
assets................................ 1.82% 1.85% 1.88% 1.93% 1.96%
Ratio of net investment income to
average daily net assets.............. (1.04%) (.83%) (1.03%) (1.08%) (.60%)
Portfolio turnover rate................. 165% 177% 71% 43% 28%
</TABLE>
@ 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,
-------------------------------------------
CAPITAL FUND 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 21.76 $21.73 $25.68 $21.68 $21.13
------- ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.62) (.44) (.27) (.33) (.12)
Net realized and unrealized gain on
investments......................... 6.48 6.73 .38 7.06 .67
------- ------ ------ ------ ------
Total from operations................... 5.86 6.29 .11 6.73 .55
------- ------ ------ ------ ------
Distributions to shareholders:
From net realized gains on
investments......................... (5.35) (6.26) (4.06) (2.73) --
------- ------ ------ ------ ------
Net asset value, end of year............ $ 22.27 $21.76 $21.73 $25.68 $21.68
------- ------ ------ ------ ------
Total Return @.......................... 31.66% 36.87% .76% 33.68% 2.60%
Net assets end of year (000s omitted)... $10,932 $5,715 $2,453 $1,432 $ 824
Ratio of expenses to average daily net
assets................................ 1.82% 1.85% 1.88% 1.93% 1.96%
Ratio of net investment income to
average daily net assets.............. (1.04%) (.83%) (1.03%) (1.08%) (.60%)
Portfolio turnover rate................. 165% 177% 71% 43% 28%
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
<TABLE>
<CAPTION>
Class H
----------------------------------------------
Year Ended August 31,
----------------------------------------------
CAPITAL FUND 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 21.78 $ 21.74 $ 25.68 $ 21.69 $21.14
------- ------- ------- ------- ------
Operations:
Investment income (loss) - net........ (.62) (.43) (.26) (.34) (.12)
Net realized and unrealized gain on
investments......................... 6.49 6.73 .38 7.06 .67
------- ------- ------- ------- ------
Total from operations................... 5.87 6.30 .12 6.72 .55
------- ------- ------- ------- ------
Distributions to shareholders:
From net realized gains on
investments......................... (5.35) (6.26) (4.06) (2.73) --
------- ------- ------- ------- ------
Net asset value, end of year............ $ 22.30 $ 21.78 $ 21.74 $ 25.68 $21.69
------- ------- ------- ------- ------
Total Return @.......................... 31.68% 36.91% .80% 33.61% 2.60%
Net assets end of year (000s omitted)... $56,771 $40,760 $16,987 $14,468 $8,052
Ratio of expenses to average daily net
assets................................ 1.82% 1.85% 1.88% 1.93% 1.96%
Ratio of net investment income to
average daily net assets.............. (1.04%) (.83%) (1.03%) (1.06%) (.60%)
Portfolio turnover rate................. 165% 177% 71% 43% 28%
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
51
<PAGE>
FORTIS STOCK FUNDS
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class A
------------------------------------------------------
Year Ended August 31,
------------------------------------------------------
GROWTH FUND 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 30.80 $ 29.78 $ 37.32 $ 32.14 $ 32.66
---------- -------- -------- -------- --------
Operations:
Investment income (loss) - net........ (.20) (.13) (.11) (.16) (.11)
Net realized and unrealized gain
(loss) on investments............... 21.70 10.72 (3.59) 8.41 1.30
---------- -------- -------- -------- --------
Total from operations................... 21.50 10.59 (3.70) 8.25 1.19
---------- -------- -------- -------- --------
Distributions to shareholders:
From net realized gains on
investments......................... (6.85) (9.57) (3.84) (3.07) (1.71)
---------- -------- -------- -------- --------
Net asset value, end of year............ $ 45.45 $ 30.80 $ 29.78 $ 37.32 $ 32.14
---------- -------- -------- -------- --------
Total Return @.......................... 82.06% 40.00% (10.59%) 27.01% 4.09%
Net assets end of year (000s omitted)... $1,203,376 $734,282 $581,819 $734,654 $641,061
Ratio of expenses to average daily net
assets................................ 1.04% 1.06% 1.05% 1.07% 1.09%
Ratio of net investment income to
average daily net assets.............. (.54%) (.44%) (.29%) (.45%) (.33%)
Portfolio turnover rate................. 140% 166% 61% 28% 32%
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
<TABLE>
<CAPTION>
Class B
----------------------------------------------
Year Ended August 31,
----------------------------------------------
GROWTH FUND 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 29.26 $ 28.85 $ 36.53 $ 31.75 $32.48
------- ------- ------- ------- ------
Operations:
Investment income (loss) - net........ (.30) (.74) (.25) (.56) (.32)
Net realized and unrealized gain
(loss) on investments............... 20.20 10.72 (3.59) 8.41 1.30
------- ------- ------- ------- ------
Total from operations................... 19.90 9.98 (3.84) 7.85 .98
------- ------- ------- ------- ------
Distributions to shareholders:
From net realized gains on
investments......................... (6.85) (9.57) (3.84) (3.07) (1.71)
------- ------- ------- ------- ------
Net asset value, end of year............ $ 42.31 $ 29.26 $ 28.85 $ 36.53 $31.75
------- ------- ------- ------- ------
Total Return @.......................... 80.70% 38.98% (11.25%) 26.02% 3.45%
Net assets end of year (000s omitted)... $43,250 $20,236 $12,417 $12,149 $6,710
Ratio of expenses to average daily net
assets................................ 1.79% 1.81% 1.80% 1.82% 1.84%
Ratio of net investment income to
average daily net assets.............. (1.29%) (1.19%) (1.04%) (1.19%) (1.07%)
Portfolio turnover rate................. 140% 166% 61% 28% 32%
</TABLE>
@ 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,
-------------------------------------------
GROWTH FUND 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 29.26 $28.85 $36.52 $31.75 $32.49
------- ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.30) (.74) (.24) (.57) (.33)
Net realized and unrealized gain
(loss) on investments............... 20.21 10.72 (3.59) 8.41 1.30
------- ------ ------ ------ ------
Total from operations................... 19.91 9.98 (3.83) 7.84 .97
------- ------ ------ ------ ------
Distributions to shareholders:
From net realized gains on
investments......................... (6.85) (9.57) (3.84) (3.07) (1.71)
------- ------ ------ ------ ------
Net asset value, end of year............ $ 42.32 $29.26 $28.85 $36.52 $31.75
------- ------ ------ ------ ------
Total Return @.......................... 80.74% 38.98% (11.22%) 25.98% 3.41%
Net assets end of year (000s omitted)... $10,352 $4,629 $2,738 $2,367 $1,077
Ratio of expenses to average daily net
assets................................ 1.79% 1.81% 1.80% 1.82% 1.84%
Ratio of net investment income to
average daily net assets.............. (1.29%) (1.19%) (1.04%) (1.19%) (1.07%)
Portfolio turnover rate................. 140% 166% 61% 28% 32%
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
<TABLE>
<CAPTION>
Class H
-----------------------------------------------
Year Ended August 31,
-----------------------------------------------
GROWTH FUND 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 29.28 $ 28.86 $ 36.54 $ 31.75 $ 32.49
------- ------- ------- ------- -------
Operations:
Investment income (loss) - net........ (.30) (.73) (.25) (.55) (.33)
Net realized and unrealized gain
(loss) on investments............... 20.22 10.72 (3.59) 8.41 1.30
------- ------- ------- ------- -------
Total from operations................... 19.92 9.99 (3.84) 7.86 .97
------- ------- ------- ------- -------
Distributions to shareholders:
From net realized gains on
investments......................... (6.85) (9.57) (3.84) (3.07) (1.71)
------- ------- ------- ------- -------
Net asset value, end of year............ $ 42.35 $ 29.28 $ 28.86 $ 36.54 $ 31.75
------- ------- ------- ------- -------
Total Return @.......................... 80.72% 39.00% (11.25%) 26.05% 3.41%
Net assets end of year (000s omitted)... $97,410 $50,547 $34,453 $34,941 $21,176
Ratio of expenses to average daily net
assets................................ 1.79% 1.81% 1.80% 1.82% 1.84%
Ratio of net investment income to
average daily net assets.............. (1.29%) (1.19%) (1.04%) (1.19%) (1.07%)
Portfolio turnover rate................. 140% 166% 61% 28% 32%
</TABLE>
@ 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 (continued)
--------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class Z
--------------------------------------------------
Year Ended August 31,
--------------------------------------------------
GROWTH FUND 2000 1999 1998 1997 1996++
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 31.23 $ 30.00 $ 37.47 $ 32.18 $ 31.61
-------- -------- ------- -------- -------
Operations:
Investment income (loss) - net........ (.16) (.06) (.04) (.05) --
Net realized and unrealized gain
(loss) on investments............... 22.13 10.86 (3.59) 8.41 .57
-------- -------- ------- -------- -------
Total from operations................... 21.97 10.80 (3.63) 8.36 .57
-------- -------- ------- -------- -------
Distributions to shareholders:
From net realized gains on
investments......................... (6.85) (9.57) (3.84) (3.07) --
-------- -------- ------- -------- -------
Net asset value, end of year............ $ 46.35 $ 31.23 $ 30.00 $ 37.47 $ 32.18
-------- -------- ------- -------- -------
Total Return @.......................... 82.51% 40.49% (10.34%) 27.34% 1.80%
Net assets end of year (000s omitted)... $231,410 $119,548 $95,370 $112,356 $93,006
Ratio of expenses to average daily net
assets................................ .79% .81% .80% .82% .84%*
Ratio of net investment income to
average daily net assets.............. (.29%) (.19%) (.04%) (.20%) .01%*
Portfolio turnover rate................. 140% 166% 61% 28% 32%
</TABLE>
* Annualized.
++ For the period from March 1, 1996 (commencement of operations) to
August 31, 1996.
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
<TABLE>
<CAPTION>
Class A
---------------------------------------------------
Year Ended August 31,
---------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 36.04 $ 26.42 $ 30.60 $ 34.76 $ 30.67
-------- -------- ------- -------- --------
Operations:
Investment income (loss) - net........ (.44) (.30) (.35) (.26) (.29)
Net realized and unrealized gain
(loss) on investments............... 35.42 18.42 (3.83) (2.45) 4.61
-------- -------- ------- -------- --------
Total from operations................... 34.98 18.12 (4.18) (2.71) 4.32
-------- -------- ------- -------- --------
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 year............ $ 60.44 $ 36.04 $ 26.42 $ 30.60 $ 34.76
-------- -------- ------- -------- --------
Total Return @.......................... 115.84% 80.27% (13.66%) (7.89%) 14.21%
Net assets end of year (000s omitted)... $314,326 $147,346 $79,813 $105,422 $114,310
Ratio of expenses to average daily net
assets................................ 1.35% 1.50% 1.52% 1.55% 1.56%
Ratio of net investment income to
average daily net assets.............. (.94%) (1.08%) (.97%) (.84%) (.96%)
Portfolio turnover rate................. 212% 271% 47% 25% 34%
</TABLE>
@ 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 B
--------------------------------------------
Year Ended August 31,
--------------------------------------------
CAPITAL APPRECIATION PORTFOLIO 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 34.91 $ 25.90 $30.16 $34.46 $30.57
------- ------- ------ ------ ------
Operations:
Investment income (loss) - net........ (.47) (.91) (.43) (.40) (.49)
Net realized and unrealized gain
(loss) on investments............... 33.80 18.42 (3.83) (2.45) 4.61
------- ------- ------ ------ ------
Total from operations................. 33.33 17.51 (4.26) (2.85) 4.12
------- ------- ------ ------ ------
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 year............ $ 57.66 $ 34.91 $25.90 $30.16 $34.46
------- ------- ------ ------ ------
Total Return @.......................... 114.66% 79.35% (14.12%) (8.38%) 13.60%
Net assets end of year (000s omitted)... $38,246 $11,426 $5,849 $6,561 $4,522
Ratio of expenses to average daily net
assets................................ 1.90% 2.05% 2.07% 2.10% 2.11%
Ratio of net investment income to
average daily net assets.............. (1.49%) (1.63%) (1.52%) (1.39%) (1.47%)
Portfolio turnover rate................. 212% 271% 47% 25% 34%
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
<TABLE>
<CAPTION>
Class C
-------------------------------------------
Year Ended August 31,
-------------------------------------------
CAPITAL APPRECIATION PORTFOLIO 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 34.94 $25.92 $30.18 $34.48 $30.58
------- ------ ------ ------ ------
Operations:
Investment income (loss) - net........ (.47) (.90) (.43) (.40) (.48)
Net realized and unrealized gain
(loss) on investments............... 33.82 18.42 (3.83) (2.45) 4.61
------- ------ ------ ------ ------
Total from operations................... 33.35 17.52 (4.26) (2.85) 4.13
------- ------ ------ ------ ------
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 year............ $ 57.71 $34.94 $25.92 $30.18 $34.48
------- ------ ------ ------ ------
Total Return @.......................... 114.60% 79.33% (14.12%) (8.38%) 13.62%
Net assets end of year (000s omitted)... $14,300 $3,612 $1,794 $1,875 $1,004
Ratio of expenses to average daily net
assets................................ 1.90% 2.05% 2.07% 2.10% 2.11%
Ratio of net investment income to
average daily net assets.............. (1.49%) (1.63%) (1.52%) (1.39%) (1.46%)
Portfolio turnover rate................. 212% 271% 47% 25% 34%
</TABLE>
@ 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 (continued)
--------------------------------------------------------------------------------
4. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
Class H
----------------------------------------------
Year Ended August 31,
----------------------------------------------
CAPITAL APPRECIATION PORTFOLIO 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 34.94 $ 25.92 $ 30.18 $ 34.48 $30.58
------- ------- ------- ------- ------
Operations:
Investment income (loss) - net........ (.47) (.90) (.43) (.40) (.48)
Net realized and unrealized gain
(loss) on investments............... 33.83 18.42 (3.83) (2.45) 4.61
------- ------- ------- ------- ------
Total from operations................... 33.36 17.52 (4.26) (2.85) 4.13
------- ------- ------- ------- ------
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 year............ $ 57.72 $ 34.94 $ 25.92 $ 30.18 $34.48
------- ------- ------- ------- ------
Total Return @.......................... 114.64% 79.33% (14.12%) (8.38%) 13.62%
Net assets end of year (000s omitted)... $50,558 $20,755 $11,933 $13,379 $9,575
Ratio of expenses to average daily net
assets................................ 1.90% 2.05% 2.07% 2.10% 2.11%
Ratio of net investment income to
average daily net assets.............. (1.49%) (1.63%) (1.52%) (1.39%) (1.46%)
Portfolio turnover rate................. 212% 271% 47% 25% 34%
</TABLE>
@ These are the total returns during the periods, including reinvestment
of all dividend and capital gains distributions without adjustments
for sales charge.
--------------------------------------------------------------------------------
NOTICE TO SHAREHOLDERS:
At a special meeting of shareholders of Fortis Growth Fund held on
September 14, 2000, the following individuals were elected as directors:
Richard W. Cutting, Allen R. Freedman, Dr. Robert M. Gavin, Jean L. King,
Dean C. Kopperud, Plillip O. Peterson, Robb L. Prince, Leonard J. Santow,
Noel F. Schenker, Dr. Lemma W. Senbet and Joseph M. Wikler.
Shareholders also approved the elimination or modification of certain
fundamental investment policies and ratified KPMG LLP as independent public
accountants for Fortis Growth Fund, Inc.
56
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Fortis Advantage Portfolios, Inc.
Fortis Equity Portfolios, Inc.
Fortis Growth Fund, Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments in securities, of Asset Allocation Portfolio and
Capital Appreciation Portfolio (funds within Fortis Advantage Portfolios, Inc.),
Fortis Capital Fund, Fortis Value Fund and Fortis Growth & Income Fund (funds
within Fortis Equity Portfolios, Inc.) and Fortis Growth Fund, Inc. as of
August 31, 2000 and related statements of operations for the year then ended and
the statements of changes in net assets for each of the years in the two-year
period ended August 31, 2000 and financial highlights for each of the periods
presented. These financial statements and financial highlights are the
responsibility of management. Our responsibility is to express an opinion on
these financial statements and the financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Investment securities held in custody
are confirmed to us by the custodian. As to securities purchased and sold but
not received or delivered and securities on loan, we perform other appropriate
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of
Asset Allocation Portfolio, Capital Appreciation Portfolio, Fortis Capital Fund,
Fortis Value Fund, Fortis Growth & Income Fund and Fortis Growth Fund, Inc. as
of August 31, 2000 and the results of their operations for the year then ended
and the changes in their net assets for each of the years in a two-year period
ended August 31, 2000 and the financial highlights for the periods presented, in
conformity with accounting principles generally accepted in the United States of
America.
KPMG LLP
Minneapolis, Minnesota
October 6, 2000
57
<PAGE>
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
The information set forth below is for the fund's fiscal year as required by
federal tax law. Shareholders, however, must report distributions on a calendar
year basis for income tax purposes which may include distributions of two fiscal
years of the fund. Accordingly, the information needed by shareholders for
income tax purposes will be sent to them in early 2001. Shareholders may wish to
consult a tax advisor on how to report distributions for state and local
purposes.
Fortis Asset Allocation Portfolio and Fortis Growth & Income Fund paid income
distributions, taxable as dividend income, of which 13.07% and 100.00% and
qualified for deduction by corporations. Detailed below are the per share
distributions made for the fiscal year ended August 31, 2000.
ASSET ALLOCATION
Ordinary Income Per Share
<TABLE>
<CAPTION>
RECORD DATES Class A Class B Class C Class H Class Z
<S> <C> <C> <C> <C> <C>
------------------------------------------------
Net Investment Income Per Share
September 20, 1999........................... $ 0.093 $ 0.068 $ 0.068 $ 0.068 $ 0.114
December 17, 1999............................ 0.101 0.075 0.075 0.075 0.122
March 20, 2000............................... 0.081 0.055 0.055 0.055 0.100
June 19, 2000................................ 0.097 0.073 0.073 0.073 0.119
------- ------- ------- ------- -------
Total Distributions.......................... 0.372 0.271 0.271 0.271 0.455
------- ------- ------- ------- -------
Short-Term Capital Gain Per Share
December 17, 1999............................ 0.0700 0.0700 0.0700 0.0700 0.0700
------- ------- ------- ------- -------
Long-Term Capital Gain Per Share
December 17, 1999............................ 2.9600 2.9600 2.9600 2.9600 2.9600
------- ------- ------- ------- -------
</TABLE>
VALUE
Ordinary Income Per Share
<TABLE>
<CAPTION>
RECORD DATES
<S> <C> <C> <C> <C> <C>
Net Investment Income Per Share
Total Distributions.......................... $ -- $ -- $ -- $ --
------- ------- ------- -------
Short-Term Capital Gain Per Share
December 17, 1999............................ 0.7630 0.7630 0.7630 0.7630
------- ------- ------- -------
Long-Term Capital Gain Per Share
December 17, 1999............................ 0.1620 0.1620 0.1620 0.1620
------- ------- ------- -------
</TABLE>
GROWTH AND INCOME
Ordinary Income Per Share
<TABLE>
<CAPTION>
RECORD DATES
<S> <C> <C> <C> <C> <C>
Net Investment Income Per Share
September 20, 1999........................... $ 0.067 $ 0.009 $ 0.009 $ 0.009
------- ------- ------- -------
Total Distributions.......................... 0.067 0.009 0.009 0.009
------- ------- ------- -------
Long-Term Capital Gain Per Share
December 17, 1999............................ 0.2530 0.2530 0.2530 0.2530
------- ------- ------- -------
</TABLE>
CAPITAL FUND
Ordinary Income Per Share
<TABLE>
<CAPTION>
RECORD DATES
<S> <C> <C> <C> <C> <C>
Net Investment Income Per Share
Total Distributions.......................... $ -- $ -- $ -- $ --
------- ------- ------- -------
Short-Term Capital Gain Per Share
November 15, 1999............................ 1.1800 1.1800 1.1800 1.1800
------- ------- ------- -------
Long-Term Capital Gain Per Share
November 15, 1999............................ 4.1700 4.1700 4.1700 4.1700
------- ------- ------- -------
</TABLE>
GROWTH
Ordinary Income Per Share
<TABLE>
<CAPTION>
RECORD DATES
<S> <C> <C> <C> <C> <C>
Net Investment Income Per Share
Total Distributions.......................... $ -- $ -- $ -- $ -- $ --
------- ------- ------- ------- -------
Long-Term Capital Gain Per Share
November 15, 1999............................ 6.8450 6.8450 6.8450 6.8450 6.8450
------- ------- ------- ------- -------
</TABLE>
CAPITAL APPRECIATION
Ordinary Income Per Share
<TABLE>
<CAPTION>
RECORD DATES
<S> <C> <C> <C> <C> <C>
Net Investment Income Per Share
Total Distributions.......................... $ -- $ -- $ -- $ --
------- ------- ------- -------
Short-Term Capital Gain Per Share
November 15, 1999............................ 9.6000 9.6000 9.6000 9.6000
------- ------- ------- -------
Long-Term Capital Gain Per Share
November 15, 1999............................ 0.9800 0.9800 0.9800 0.9800
------- ------- ------- -------
</TABLE>
58
<PAGE>
DIRECTORS AND OFFICERS
DIRECTORS Richard W. Cutting CPA AND FINANCIAL CONSULTANT
Allen R. Freedman CHAIRMAN AND CHIEF EXECUTIVE OFFICER,
FORTIS, INC. MANAGING DIRECTOR OF
FORTIS INTERNATIONAL, N.V.
Dr. Robert M. Gavin PRESIDENT, CRANBROOK EDUCATION
COMMUNITY. PRIOR TO JULY 1996,
PRESIDENT MACALESTER COLLEGE
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
Phillip O. Peterson MUTUAL FUND INDUSTRY CONSULTANT;
PARTNER OF KPMG LLP, THROUGH JUNE
1999
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 F. Schenker MARKETING CONSULTANT. PRIOR TO MAY
1996, SENIOR VICE PRESIDENT OF
MARKETING & STRATEGIC PLANNING,
ROLLERBLADE, INC.
Dr. Lemma W. Senbet CONSULTANT, INTERNATIONAL FINANCIAL
INSTITUTIONS, THE WILLIAM E. MAYER
PROFESSOR OF FINANCE AND CHAIR,
FINANCE DEPARTMENT, UNIVERSITY OF
MARYLAND, COLLEGE PARK, MD
Joseph M. Wikler INVESTMENT CONSULTANT AND PRIVATE
INVESTOR. PRIOR TO JANUARY 1994,
DIRECTOR OF RESEARCH, CHIEF
INVESTMENT OFFICER, PRINCIPAL, AND
DIRECTOR, THE ROTHSCHILD CO.
OFFICERS
Dean C. Kopperud
PRESIDENT AND DIRECTOR
Robert W. Beltz, Jr.
VICE PRESIDENT
James S. Byrd
VICE PRESIDENT
Peggy L. Ettestad
VICE PRESIDENT
Tamara L. Fagely
VICE PRESIDENT AND TREASURER
Howard G. Hudson
VICE PRESIDENT
Dickson W. Lewis
VICE PRESIDENT
Lucinda S. Mezey
VICE PRESIDENT
David A. Peterson
VICE PRESIDENT
Scott R. Plummer
VICE PRESIDENT
Rhonda J. Schwartz
VICE PRESIDENT
Melinda S. Urion
VICE PRESIDENT
Gary N. Yalen
VICE PRESIDENT
Michael J. Radmer
SECRETARY
INVESTMENT MANAGER, REGISTRAR Fortis Advisers, Inc.
AND TRANSFER AGENT BOX 64284, ST. PAUL, MINNESOTA 55164
PRINCIPAL UNDERWRITER Fortis Investors, Inc.
BOX 64284, ST. PAUL, MINNESOTA 55164
CUSTODIAN Wells Fargo Bank Minnesota N.A.
MINNEAPOLIS, MINNESOTA
GENERAL COUNSEL Dorsey & Whitney LLP
MINNEAPOLIS, MINNESOTA
INDEPENDENT AUDITORS KPMG LLP
MINNEAPOLIS, MINNESOTA
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
<TABLE>
<S> <C> <C>
MUTUAL FUNDS/PORTFOLIOS Fortis Bond Funds MONEY FUND
CONVENIENT ACCESS TO A BROAD U.S. GOVERNMENT SECURITIES FUND
RANGE OF SECURITIES TAX-FREE NATIONAL PORTFOLIO
TAX-FREE MINNESOTA PORTFOLIO
STRATEGIC INCOME FUND
HIGH YIELD PORTFOLIO
Fortis Stock Funds ASSET ALLOCATION PORTFOLIO
VALUE FUND
GROWTH & INCOME FUND
CAPITAL FUND
GLOBAL GROWTH PORTFOLIO
GROWTH FUND
INTERNATIONAL EQUITY PORTFOLIO
CAPITAL APPRECIATION PORTFOLIO
FIXED AND VARIABLE ANNUITIES Fortis Opportunity Fixed FIXED ACCOUNT
TAX-DEFERRED INVESTING & Variable Annuity MONEY MARKET SUBACCOUNT
Masters Variable Annuity U.S. GOVERNMENT SECURITIES SUBACCOUNT
DIVERSIFIED INCOME SUBACCOUNT
Empower Variable MULTISECTOR BOND SUBACCOUNT
Annuity HIGH YIELD SUBACCOUNT
GLOBAL ASSET ALLOCATION SUBACCOUNT
ASSET ALLOCATION SUBACCOUNT
AMERICAN LEADERS SUBACCOUNT
VALUE SUBACCOUNT
CAPITAL OPPORTUNITIES SUBACCOUNT
GROWTH & INCOME SUBACCOUNT
S&P 500 INDEX SUBACCOUNT
BLUE CHIP STOCK SUBACCOUNT
BLUE CHIP STOCK II SUBACCOUNT
INTERNATIONAL STOCK SUBACCOUNT
MID CAP STOCK SUBACCOUNT
SMALL CAP VALUE SUBACCOUNT
GLOBAL GROWTH SUBACCOUNT
GLOBAL EQUITY SUBACCOUNT
LARGE CAP GROWTH SUBACCOUNT
INVESTORS GROWTH SUBACCOUNT
GROWTH STOCK SUBACCOUNT
AGGRESSIVE GROWTH SUBACCOUNT
Fortune Fixed Annuities SINGLE PREMIUM ANNUITY
FLEXIBLE PREMIUM ANNUITY
Income Annuities GUARANTEED FOR LIFE
GUARANTEED FOR A SPECIFIED PERIOD
LIFE Wall Street Series FIXED ACCOUNT
INSURANCE PROTECTION AND Variable Universal Life MONEY MARKET SUBACCOUNT
TAX-DEFERRED INVESTMENT Insurance U.S. GOVERNMENT SECURITIES SUBACCOUNT
OPPORTUNITY DIVERSIFIED INCOME SUBACCOUNT
MULTISECTOR BOND SUBACCOUNT
HIGH YIELD SUBACCOUNT
GLOBAL ASSET ALLOCATION SUBACCOUNT
ASSET ALLOCATION SUBACCOUNT
AMERICAN LEADERS SUBACCOUNT
VALUE SUBACCOUNT
CAPITAL OPPORTUNITIES SUBACCOUNT
GROWTH & INCOME SUBACCOUNT
S&P 500 INDEX SUBACCOUNT
BLUE CHIP STOCK SUBACCOUNT
BLUE CHIP STOCK II SUBACCOUNT
INTERNATIONAL STOCK SUBACCOUNT
MID CAP STOCK SUBACCOUNT
SMALL CAP VALUE SUBACCOUNT
GLOBAL GROWTH SUBACCOUNT
GLOBAL EQUITY SUBACCOUNT
LARGE CAP GROWTH SUBACCOUNT
INVESTORS GROWTH SUBACCOUNT
GROWTH STOCK SUBACCOUNT
AGGRESSIVE GROWTH SUBACCOUNT
Adaptable Life
Universal Life
</TABLE>
FORTIS FINANCIAL GROUP manages and distributes mutual funds, annuities and life
insurance products. The mutual funds, variable life and variable annuity
products are distributed through FORTIS INVESTORS, INC. and managed by FORTIS
ADVISERS, INC. The insurance products are issued by FORTIS BENEFITS INSURANCE
COMPANY, FIRST FORTIS LIFE INSURANCE COMPANY and FORTIS INSURANCE COMPANY.
FOR MORE COMPLETE INFORMATION, INCLUDING CHARGES AND EXPENSES, SEND FOR A
PROSPECTUS. WRITE TO: FORTIS INVESTORS, INC., P.O. BOX 64284, ST. PAUL, MN
55164. READ IT CAREFULLY BEFORE INVESTING OR SENDING MONEY.
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 offered 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
PRSRT STD
U.S. Postage
PAID
Permit No. 3794
Minneapolis, MN
The Fortis brandmark and Fortis-Registered Trademark- are servicemarks of
Fortis (B) and Fortis (NL).
98144 -C- Fortis, Inc. 10/00
