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010 C010001 BOSTON
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010 C040001 5034
011 A000001 EVERGREEN KEYSTONE DISTRIBUTOR INC.
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011 C010001 NEW YORK
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011 C030001 10019
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012 C010001 CAMBRIDGE
<PAGE> PAGE 2
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020 B000005 13-5674085
020 C000005 96
020 A000006 JEFFERIES & CO.
020 B000006 95-2622900
020 C000006 85
020 A000007 LEHMAN BROTHERS, INC.
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020 C000007 67
020 A000008 BEAR, STEARNS SECURITIES CORP
020 B000008 13-3299429
020 C000008 64
020 A000009 COWEN & CO
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<PAGE> PAGE 3
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<PAGE> PAGE 7
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SIGNATURE J. KEVIN KENELY
TITLE V.P., FUND ADMIN.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> KEYSTONE SMALL COMPANY GROWTH FUND
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-START> JUN-01-1996
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 1,084,098,100
<INVESTMENTS-AT-VALUE> 1,395,075,129
<RECEIVABLES> 24,914,561
<ASSETS-OTHER> 211,118
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,420,200,808
<PAYABLE-FOR-SECURITIES> 8,028,277
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,403,912
<TOTAL-LIABILITIES> 13,432,189
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 983,582,840
<SHARES-COMMON-STOCK> 166,737,931
<SHARES-COMMON-PRIOR> 193,826,852
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (7,516)
<ACCUMULATED-NET-GAINS> 112,216,266
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 310,977,029
<NET-ASSETS> 1,406,768,619
<DIVIDEND-INCOME> 2,562,283
<INTEREST-INCOME> 4,364,898
<OTHER-INCOME> 0
<EXPENSES-NET> (29,066,983)
<NET-INVESTMENT-INCOME> (22,139,802)
<REALIZED-GAINS-CURRENT> 117,982,561
<APPREC-INCREASE-CURRENT> (279,047,661)
<NET-CHANGE-FROM-OPS> (183,204,902)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (200,508,632)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 121,645,715
<NUMBER-OF-SHARES-REDEEMED> (168,659,715)
<SHARES-REINVESTED> 19,925,079
<NET-CHANGE-IN-ASSETS> (599,033,958)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 195,155,626
<OVERDISTRIB-NII-PRIOR> (7,483)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (7,788,033)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (29,066,983)
<AVERAGE-NET-ASSETS> 1,677,940,540
<PER-SHARE-NAV-BEGIN> 10.35
<PER-SHARE-NII> (0.11)
<PER-SHARE-GAIN-APPREC> (0.78)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.02)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.44
<EXPENSE-RATIO> 1.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
The Trustees and Shareholders
Keystone Small Company Growth Fund (S-4)
In planning and performing our audit of the financial statements of Keystone
Small Company Growth Fund (S-4) for the year ended May 31, 1997, we considered
their internal control structure, including procedures for safeguarding
securities, in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to comply with the
requirements of Form N-SAR, not to provide assurance on the internal control
structure.
The management of Keystone Small Company Growth Fund (S-4) is responsible for
establishing and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any evaluation
of the structure to future periods is subject to the risks that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
May 31, 1997.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
KPMG Peat Marwick LLP
June 27, 1997
