<PAGE>
FORTIS-Registered Trademark-
[GRAPHIC]
FORTIS
TAX-FREE
PORTFOLIOS, INC.
Semi-Annual Report
March 31, 1996
[GRAPHICS]
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC. SEMI-ANNUAL REPORT
CONTENTS
LETTER TO SHAREHOLDERS 1
SCHEDULE OF INVESTMENTS
NATIONAL PORTFOLIO 5
MINNESOTA PORTFOLIO 8
NEW YORK PORTFOLIO 11
STATEMENTS OF ASSETS AND LIABILITIES 13
STATEMENTS OF OPERATIONS 14
STATEMENTS OF CHANGES IN NET ASSETS 15
NOTES TO FINANCIAL STATEMENTS 18
BOARD OF DIRECTORS AND OFFICERS 24
- - TOLL-FREE PERSONAL ASSISTANCE
- Shareholder Services
- (800) 800-2638, Ext. 3012
- 7:30 a.m. to 5:30 p.m. CST, M-Th
- 7:30 a.m. to 5:00 p.m. CST, F
- - TOLL-FREE INFORMATION LINE
- For daily account balances,
transaction activity or net asset
value information
- (800) 800-2638, 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) 800-2638. TO ORDER
PROSPECTUSES OR SALES LITERATURE FOR ANY FORTIS PRODUCT, CALL (800) 800-2638,
EXT. 4579.
HOW TO USE THIS REPORT
For a quick overview of the fund's performance during the past six months, refer
to the Highlights box below. The letter from the portfolio manager and president
provides a more detailed analysis of the fund and financial markets.
The charts alongside the letter are useful because they provide more information
about your investments. The top holdings chart shows the type of securities in
which the fund invests, and the pie chart shows a breakdown of the fund's assets
by industry.
The performance chart graphically compares the fund's 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.
HIGHLIGHTS
FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS E CLASS H
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NATIONAL PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period................... $ 10.71 10.70 10.70 10.72 10.71
End of period......................... 10.72 10.71 10.72 10.73 10.72
DISTRIBUTIONS PER SHARE:
From net investment income............ $ 0.27 $ 0.23 $ 0.23 $ 0.28 $ 0.23
MINNESOTA PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period................... $ 10.30 $ 10.27 $ 10.30 $ 10.32 $ 10.30
End of period......................... 10.25 10.23 10.25 10.28 10.26
DISTRIBUTIONS PER SHARE:
From net investment income............ $ 0.26 $ 0.22 $ 0.22 $ 0.28 $ 0.22
NEW YORK PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period................... $ 10.87 $ 10.84 $ 10.85 $ 10.87 $ 10.83
End of period......................... 10.76 10.73 10.74 10.76 10.72
DISTRIBUTIONS PER SHARE:
From net investment income............ $ 0.28 $ 0.24 $ 0.24 $ 0.30 $ 0.24
From net realized gains on
investments......................... 0.02 0.02 0.02 0.02 0.02
</TABLE>
<PAGE>
Photo
"Not only do the Fortis Tax-Free Portfolios help me reduce my tax bill now, they
let me help revitalize our country by investing in America."
DEAR SHAREHOLDER,
We are pleased to present the Fortis Tax-Free Portfolios, Inc., semi-annual
report for the period ended March 31, 1996.
ECONOMIC REVIEW AND INVESTMENT STRATEGIES
During the past six months, the bond and money markets have responded to a wide
variety of economic information. Late last year, the economy appeared quite weak
and the bond market responded favorably, reflecting the assumption that slow
growth would allow inflation to continue at the 2.5 to 3 percent pace
experienced over the past year. This scenario was upset during the first quarter
of 1996, as strong recovery was evidenced in several economic reports--most
notably the February employment numbers. Long interest rates, as represented by
the 30-year treasury bond, began the fourth quarter at about 6.5 percent, ended
the year at just under 6 percent, and then more than retraced their steps to end
the first quarter at 6.65 percent.
In contrast to long rates, money market rates benefited from a more
accommodative monetary policy, as the Federal Reserve moved the federal funds
rate downward by one-half of a percentage point, and treasury bills moved down
approximately one-quarter of a percentage point. However, earlier expectations
of further ease by the Federal Reserve have changed to reflect stable policy and
the possibility of future tightening.
Last fall, our investment strategy was based on the assumption that the economy
would continue to expand at a modest pace, with no upward inflationary pressure
until late 1996. Accordingly, we positioned the portfolios with durations or
effective maturities longer than their respective benchmarks to benefit from
price appreciation resulting from further rate declines. This strategy has been
changed recently to a more defensive position reflecting stronger economic
growth and the possibility of further rate increases.
PORTFOLIO REVIEW
To improve the performance of the Tax-Free Portfolios in a declining rate
environment, we increased the call protection, effectively lengthening the
maturity of the portfolios during the balance of 1995 and early 1996. Therefore,
the effective maturity or duration has improved by more than two years in the
National Portfolio, and by about nine months in the Minnesota Portfolio.
Transactions in the New York Portfolio were relatively few to limit taxable
gains.
When municipal interest yields fell by one-quarter to one-half of a percent
during the fourth quarter of 1995, this improvement in call protection resulted
in enhanced fund performance, particularly by the National Portfolio.
During the first quarter of 1996, the shifting market sentiment pushed municipal
interest rates back up by approximately the same amount. Because of the
uncertain rate environment in the immediate future, we have moved the National
Portfolio toward a more neutral profile, in comparison to its standard of
measure or benchmark. The New York Portfolio benefited from its shorter average
maturity and higher average coupon rate during this period of rising rates.
Looking forward, we will continue our efforts to improve the risk profile of the
portfolios, limiting their exposure to further interest rate increases by
maintaining or shortening the average maturities of the National and Minnesota
Portfolios.
IN CLOSING
We remain committed to our disciplined investment strategy, and we consider it a
privilege to help you invest for your future. Please call us or talk with your
investment professional if you have any questions or comments.
Sincerely,
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
Dean C. Kopperud Howard G. Hudson
President Vice President
[SIGNATURE]
Robert C. Lindberg
Vice President
</TABLE>
April 12, 1996
1
<PAGE>
COMPOSITION BY INDUSTRY
AS OF 3/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
General Obligation 32.3%
Health Care/Services 14.4%
Utilities - Electric 9.7%
Utilities - Water and Sewer 13.1%
Utilities - Gas 1.1%
Refunded with U.S. Gov't 6.4%
Transportation 9.3%
Public Facilities 1.1%
Cash Equivalents/Receivables 1.8%
Housing 3.7%
Pollution Control 2.5%
Higher Education 2.1%
Industrial 0.8%
Miscellaneous 1.7%
</TABLE>
NATIONAL PORTFOLIO
VALUE OF $10,000 INVESTED JUNE 2, 1986
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NATIONAL PORTFOLIO CLASS E
AVERAGE ANNUAL TOTAL RETURN
SINCE
<S> <C> <C> <C>
1 Year 5 Year June 2, 1986@
Class E* +2.07% +6.75% +6.92%
Class E** +6.88% +7.74% +7.42%
Lehman Bros. National Portfolio
Municipal Bond Index*** Class E
6/02/86 10,000 9,525
87 11,006 10,457
88 12,307 10,569
89 13,634 11,411
90 14,628 12,318
91 16,404 13,298
92 17,850 14,680
93 20,043 16,544
94 19,012 16,972
95 22,332 18,057
96 22,063 19,300
</TABLE>
Annual period ended March 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.
@ Date shares were first offered to the public.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.50%.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** An unmanaged index of municipal bonds with maturities greater than two
years.
TOP TEN HOLDINGS AS OF 3/31/96
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Massachusetts (5.875%) 2010 3.9%
2. Boston, MA (6.00%) 2014 3.4%
3. New York Triborough Bridge & Tunnel Auth (5.50%)
2017 3.3%
4. Metropolitan Transportation Auth, NY (5.75%) 2013 3.2%
5. Massachusetts Water Resources (6.25%) 2010 2.7%
6. Fairfax County Virginia Water Auth (6.00%) 2022 2.7%
7. Fulton County Georgia Water & Sewer (6.375%) 2014 2.6%
8. Honolulu, Hawaii City & County, (5.50%) 2011 2.6%
9. Maryland Industrial Dev Fin Auth Rev (5.50%) 2020 2.4%
10. Columbus, Ohio (5.50%) 2015 2.0%
</TABLE>
CLASS A, B, C AND H TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- ----------------------------------------------------------------
<S> <C> <C>
Class A shares** +6.55% +12.25%
Class A shares* +1.76% +8.66%
Class B shares# +9.35% +14.97%
Class B shares## +5.75% +11.37%
Class C shares# +6.84% +12.44%
Class C shares## +5.84% +11.44%
Class H shares# +9.44% +15.03%
Class H shares## +5.84% +11.43%
</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 4.50%, Class B and H
have a CDSC of 4.00% (with a waiver of 10% of the amount invested) if redeemed
within two years of purchase, and Class C has a CDSC of 1.00% if redeemed within
one year of purchase.
# Without CDSC.
## With CDSC. Assumes redemption on March 31, 1996.
+ Since November 14, 1994 -- Date shares were first offered to the public.
2
<PAGE>
COMPOSITION BY INDUSTRY
AS OF 3/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Health Care/Services 22.8%
Housing 19.1%
General Obligations 23.0%
Utilities - Electric 9.4%
Higher Education 1.9%
Public Facilities 4.1%
Refunded with U.S. Gov't 6.9%
Miscellaneous 4.6%
Pollution Control 4.2%
Cash Equivalents/Receivables 3.0%
Utility - Water & Sewer 1.0%
</TABLE>
MINNESOTA PORTFOLIO
VALUE OF $10,000 INVESTED JUNE 2, 1986
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MINNESOTA PORTFOLIO CLASS E
AVERAGE ANNUAL TOTAL RETURN
<S> <C> <C> <C>
Since
1 Year 5 Year June 2, 1986@
Class E* +1.50% +6.18% +6.36%
Class E** +6.28% +7.17% +6.86%
Lehman Bros. Minnesota Portfolio
Municipal Bond Index*** Class E
6/02/86 10,000 9,685
87 11,171 10,403
88 12,307 10,434
89 13,634 11,118
90 14,628 11,988
91 16,404 12,967
92 17,850 14,151
93 20,043 15,763
94 19,012 16,193
95 22,332 17,246
96 22,063 18,329
</TABLE>
Annual period ended March 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.
@ Date shares were first offered to the public.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.50%.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** An unmanaged index of municipal bonds with maturities greater than two
years.
TOP TEN HOLDINGS AS OF 3/31/96
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Robbinsdale, MN (5.45%) 2013 3.6%
2. Minneapolis & St. Paul, MN (5.70%) 2016 3.5%
3. Minneapolis, MN (5.20%) 2013 3.5%
4. Northern MN Municipal Power Agency (5.50%) 2018 3.4%
5. Southern MN Municipal Power Agency (5.75%) 2018 3.3%
6. Spring Lake Park, MN (5.25%) 2017 3.0%
7. Stillwater Independent School District #834, MN
(5.75%) 2015 2.9%
8. Minneapolis, MN (5.25%) 2019 2.9%
9. Brainerd, MN (6.65%) 2017 2.9%
10. Minneapolis, MN Spec School District (5.375%) 2014 2.6%
</TABLE>
CLASS A, B, C AND H TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- ----------------------------------------------------------------
<S> <C> <C>
Class A shares** +5.95% +10.70%
Class A shares* +1.18% +7.16%
Class B shares# +8.86% +13.04%
Class B shares## +5.26% +9.74%
Class C shares# +6.11% +10.86%
Class C shares## +5.11% +9.86%
Class H shares# +8.84% +13.56%
Class H shares## +5.24% +9.96%
</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 4.50%, Class B and H
have a CDSC of 4.00% (with a waiver of 10% of the amount invested) if redeemed
within two years of purchase, and Class C has a CDSC of 1.00% if redeemed within
one year of purchase.
# Without CDSC.
## With CDSC. Assumes redemption on March 31, 1996.
+ Since November 14, 1994 -- Date shares were first offered to the public.
3
<PAGE>
COMPOSITION BY INDUSTRY
AS OF 3/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Refunded with U.S. Gov't 37.8%
Housing 22.4%
Transportation 13.1%
Health Care/Services 7.2%
Miscellaneous 6.7%
General Obligation 4.3%
Cash Equivalents/Receivables 4.1%
Utilities - Electric 4.4%
</TABLE>
NEW YORK PORTFOLIO
VALUE OF $10,000 INVESTED NOVEMBER 6, 1987
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO CLASS E
AVERAGE ANNUAL TOTAL RETURN
<S> <C> <C> <C>
Since
1 Year 5 Year November, 6 1987@
Class E* +0.75% +6.39% +7.24%
Class E** +5.50% +7.37% +7.82%
Lehman Bros. New York Portfolio
Municipal Bond Index*** Class E
11/06/87 10,000 9,550
88 11,468 9,855
89 12,705 10,727
90 13,631 11,633
91 15,286 12,603
92 16,633 13,847
93 18,676 15,771
94 17,716 16,231
95 20,810 17,049
96 20,559 17,986
</TABLE>
Annual period ended March 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.
@ Date shares were first offered to the public.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.50%.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** An unmanaged index of municipal bonds with maturities greater than two
years.
TOP TEN HOLDINGS AS OF 3/31/96
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. New York State Dorm Auth (7.50%) 2011 7.6%
2. New York State Dorm Auth (7.80%) 2005 7.4%
3. New York City, NY (8.25%) 2017 7.1%
4. New York State Urban Development Corp (7.375%)
2018 5.9%
5. New York Local Government Assistance Corp (7.50%)
2020 5.9%
6. New York State Med Care (7.45%) 2029 5.8%
7. New York Triborough Bridge & Tunnel Auth (8.125%)
2012 4.6%
8. New York State Med Care (6.375%) 2029 4.4%
9. New York State Power Auth (5.25%) 2018 4.4%
10. United Nations Development Corp, NY (6.00%) 2012 4.3%
</TABLE>
CLASS A, B, C AND H TOTAL RETURNS
<TABLE>
<CAPTION>
Since
1 Year Inception+
- ----------------------------------------------------------------
<S> <C> <C>
Class A shares** +5.27% +8.26%
Class A shares* +.53% +5.14%
Class B shares# +7.98% +11.20%
Class B shares## +4.38% +7.60%
Class C shares# +5.47% +8.66%
Class C shares## +4.47% +7.66%
Class H shares# +7.50% +10.85%
Class H shares## +3.90% +7.25%
</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 4.50%, Class B and H
have a CDSC of 4.00% (with a waiver of 10% of the amount invested) if redeemed
within two years of purchase, and Class C has a CDSC of 1.00% if redeemed within
one year of purchase.
# Without CDSC.
## With CDSC. Assumes redemption on March 31, 1996.
+ Since November 14, 1994 -- Date shares were first offered to the public.
4
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
NATIONAL PORTFOLIO
Schedule of Investments
March 31, 1996 (Unaudited)
MUNICIPAL BONDS-98.21%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (a) Value (b)
----------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
ARIZONA-2.08%
$1,600,000 Tucson AZ, 5.50% Water Revenue Refunding
Bonds 7-1-2014............................. A+ $ 1,637,083 $ 1,574,512
------------ ------------
CALIFORNIA-5.24%
1,450,000 California State, 5.75% General Obligation
11-1-2012.................................. A 1,521,278 1,465,399
4,000,000 Southern California Public Power, 6.36% Zero
Coupon Bond 7-1-2013 (d)................... A+ 1,358,346 1,444,640
2,750,000 Sulphur Springs (City of) CA, 7.00% Zero
Coupon General Obligation Ser A MBIA
Insured 9-1-2012 (d)....................... AAA 888,755 1,060,042
------------ ------------
3,768,379 3,970,081
------------ ------------
CONNECTICUT-3.43%
1,500,000 Connecticut State, 6.125% Special Tax
Obligation Rev Transportation
Infrastructure Ser B Noncall Sinking Fund
9-1-2012................................... AA- 1,582,088 1,593,750
1,000,000 Connecticut, 5.50% General Obligation Ser B
3-15-2011.................................. AA- 1,047,312 1,004,030
------------ ------------
2,629,400 2,597,780
------------ ------------
DISTRICT OF COLUMBIA-4.01%
1,250,000 District of Columbia, 7.50% General
Obligation Ser1990B FSA Insured 6-1-2010
(Refunded 6-1-2000 @ 102).................. AAA 1,235,937 1,414,412
1,500,000 Georgetown University, 8.25% District of
Columbia Bond 4-1-2018
(Crossover Refunded 10-1-2001 @ 103)....... A+ 1,551,330 1,629,315
------------ ------------
2,787,267 3,043,727
------------ ------------
FLORIDA-2.33%
500,000 Florida (State of), 7.50% Mid-Bay Bridge Auth
Ser 1991A 10-1-2017
(Crossover Refunded 10-1-2001 @ 103)....... N/R 473,572 544,005
500,000 Leesburg (City of) FL, 7.50% Capital
Improvement Hosp Rev Bond (Leesburg
Regional Med Ctr)
Ser 1991A 7-1-2021 (Refunded 7-1-2002 @
102)....................................... A- 488,306 581,655
600,000 Tampa (City of) FL, 8.25% Cap Improvement
Program Rev Bond Ser A 10-1-2018........... AA 598,883 643,056
------------ ------------
1,560,761 1,768,716
------------ ------------
GEORGIA-3.97%
1,800,000 Fulton County Georgia Water & Sewer, 6.375%
Ref Bond FGIC Insured 1-1-2014............. AAA 1,785,021 1,940,670
1,000,000 Municipal Electric Auth of Georgia, 6.50% 5th
Crossover Ser Proj 1 1-1-2017.............. A 992,606 1,072,410
------------ ------------
2,777,627 3,013,080
------------ ------------
HAWAII-2.63%
2,000,000 Honolulu, Hawaii City & County, 5.50% Ref &
Impt Ser B 10-1-2011....................... AA 2,026,291 1,991,740
------------ ------------
ILLINOIS-4.63%
500,000 Channahon Park IL District, 7.50% General
Obligation 1-1-2011........................ N/R 499,375 531,005
750,000 Chicago Gas Supply, 7.50% Rev for Peoples Gas
Ser B 3-1-2015............................. AA- 759,718 811,313
1,000,000 Illinois Dev Fin Auth, 7.375% Power Co Proj
Ser 1991-A 7-1-2021........................ BBB 992,441 1,111,280
1,000,000 Illinois Housing Dev Auth, 7.55% Multi-family
Housing Ser 1990A 7-1-2014................. A+ 987,575 1,060,090
------------ ------------
3,239,109 3,513,688
------------ ------------
INDIANA-3.58%
1,200,000 Indiana Bond Bank, 8.50% Special Loan Program
Ser B 2-1-2018............................. A 1,212,954 1,306,248
1,250,000 Indianapolis (City of) IN Local Public
Improvement Bond Bank, 7.40% Ser 1990A
1-1-2020
(Refunded 7-1-2000 @ 102).................. Aaa* 1,247,245 1,412,138
------------ ------------
2,460,199 2,718,386
------------ ------------
KENTUCKY-1.44%
1,000,000 Louisville & Jefferson County KY, 6.75% Metro
Sewer Dist Rev Bond Ser A AMBAC Insured
5-15-2019.................................. AAA 996,277 1,093,050
------------ ------------
MAINE-2.13%
1,500,000 Regional Waste Sys, Inc. of ME, 7.95% Ser A-C
7-1-2010................................... AA 1,511,073 1,612,500
------------ ------------
MARYLAND-3.74%
1,940,000 Maryland Industrial Dev Fin Auth Rev Bonds,
5.50% Ser 1995 MBIA Insured Bon Secours
Health System Project 8-15-2020............ AAA 1,859,835 1,849,829
1,000,000 Maryland Water Quality Financing Authority,
5.50% Refunding Bonds Ser 1995A 9-1-2012... AA 997,536 987,190
------------ ------------
2,857,371 2,837,019
------------ ------------
</TABLE>
5
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
NATIONAL PORTFOLIO (CONTINUED)
Schedule of Investments
March 31, 1996 (Unaudited)
MUNICIPAL BONDS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (a) Value (b)
----------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
MASSACHUSETTS-12.34%
$2,500,000 Boston (City of) MA, 6.00% General Obligation
AMBAC Insured 8-1-2014..................... AAA $ 2,493,870 $ 2,577,075
500,000 Boston City Hospital MA, 7.625% Rev Bond Ser
A 2-15-2021 (Refunded 8-15-2000 @102)...... Aaa* 496,336 564,320
1,250,000 Massachusetts Water Resources Auth, 5.25%
1993 Ser C Rev Bond 12-1-2015.............. AAA 1,238,581 1,188,125
2,000,000 Massachusetts Water Resources, 6.25% Gen Rev
Ref Bond Ser 1992B 11-1-2010............... A 1,979,526 2,080,640
2,850,000 Massachusetts, 5.875% General Obligation Ser
B FGIC Insured 8-1-2010.................... AAA 2,825,284 2,946,815
------------ ------------
9,033,597 9,356,975
------------ ------------
MICHIGAN-3.23%
1,300,000 Lake Orion MI, 5.50% School District Ref
Bonds UT100 AMBAC Insured Q-SBLF
5-1-2020................................... AAA 1,251,192 1,249,651
1,200,000 University of Michigan, 5.75% Hospital
Revenue Bond Series A 12-1-2012............ AA 1,174,694 1,200,696
------------ ------------
2,425,886 2,450,347
------------ ------------
MINNESOTA-4.38%
1,140,000 Fergus Falls (City of) MN, 6.50% Health Care
Facility (Lake Regional Hospital) Ser A
9-1-2018................................... BBB+ 1,133,583 1,152,073
2,000,000 Minneapolis (City of) MN, 5.75% General
Obligation Zero Coupon Bond Ser 1993A
12-1-2013 (d).............................. AAA 749,454 724,400
670,000 Minneapolis (City of) MN, 7.00% Health Care
Fac Rev (St Olaf Residence) Ser 1993
10-1-2012.................................. N/R 670,000 694,917
690,000 St. Anthony (City of) MN, 6.75% Housing Dev
Rev Ref Bond 7-1-2007...................... AA 690,000 748,705
------------ ------------
3,243,037 3,320,095
------------ ------------
MISSOURI-1.75%
1,250,000 Missouri State Health & Educ, 7.70% Still
Regional Med Ctr 2-1-2013.................. BBB 1,299,684 1,327,450
------------ ------------
NEBRASKA-2.01%
1,500,000 Nebraska Public Power District, 6.125% Power
Supply Sys Rev 1-1-2015.................... A+ 1,475,745 1,524,705
------------ ------------
NEVADA-1.46%
1,000,000 Washoe County Nevada Hosp, 7.60% (Washoe Med
Ctr) Rev Bond Ser 1989A 6-1-2019........... A 971,310 1,104,830
------------ ------------
NEW YORK-13.31%
2,465,000 Metropolitan Transportation Authority NY
Commuter Facilities, 5.75% Ser O
7-1-2013................................... BBB 2,388,471 2,393,909
1,100,000 New York City, 5.75% General Obligation Ser G
2-1-2010................................... BBB+ 1,089,624 1,051,402
1,000,000 New York City, 8.25% General Obligation Ser B
6-1-2005................................... BBB+ 989,421 1,157,890
1,000,000 New York St Dorm Auth Revs Cons City Univ
System 2nd Gen A, 6.00% 7-1-2020........... BBB 1,019,233 991,060
730,000 New York State Med Care, 7.50% Mental Health
Ser A2-15-2021 (Refunded 2-15-2001 @
102)....................................... AAA 702,120 836,653
1,000,000 New York State, 7.75% UDC Correctional Fac
Ser 1 1-1-2014 (Refunded 1-1-2000 @ 102)... Aaa* 959,485 1,132,060
2,600,000 New York Triborough Bridge and Tunnel Auth,
5.50% General Purpose Ser Y 1-1-2017....... A+ 2,491,773 2,527,694
------------ ------------
9,640,127 10,090,668
------------ ------------
NORTH DAKOTA-1.58%
1,100,000 Ward County ND, 7.50% Health Care Fac Ser
1991B 7-1-2011............................. A- 1,131,693 1,196,690
------------ ------------
OHIO-3.31%
750,000 Cleveland (City of) OH Parking Fac, 8.10%
Improvement Rev Bond 9-15-2022............. N/R 760,694 820,095
1,720,000 Columbus (City of) OH, 5.50% General
Obligation Ser 2 5-15-2015................. AAA 1,715,952 1,691,912
------------ ------------
2,476,646 2,512,007
------------ ------------
PENNSYLVANIA-3.61%
750,000 Clarion County PA Hosp Auth, 8.50% Clarion
Hosp Proj Rev Bond 7-1-2021................ BBB- 733,339 810,450
890,000 Delaware County PA, 8.10% IDA Rev Res Recov
Ser A LOC Security Pacific: Proj Guar by
Westinghouse 12-1-2013..................... N/R 932,709 927,576
1,000,000 Pennsylvania State, 5.75% General Obligation
FGIC Insured 5-1-2015...................... AAA 1,013,118 1,002,530
------------ ------------
2,679,166 2,740,556
------------ ------------
PUERTO RICO-1.94%
500,000 Puerto Rico, 5.75% Public Building Auth Rev
Ref Bond Ser L 7-1-2016.................... A 475,041 479,750
900,000 Puerto Rico, 6.25% Public Building Auth Rev
GTD Gov't Facilities Ser A AMBAC Insured
7-1-2009................................... AAA 1,010,797 992,349
------------ ------------
1,485,838 1,472,099
------------ ------------
</TABLE>
6
<PAGE>
MUNICIPAL BONDS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (a) Value (b)
----------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
TENNESSEE-1.28%
$1,000,000 Shelby County TN, 5.50% Health, Education, &
Housing Fac Board Hosp Rev Methodist Health
System Inc. MBIA Insured 8-1-2012.......... AAA $ 1,006,701 $ 973,660
------------ ------------
VIRGINIA-4.74%
2,000,000 Fairfax County VA, 6.00% Authority Water Rev
4-1-2022................................... AA- 1,974,231 2,025,220
1,500,000 Virginia State Public School Auth, 6.20% Ser
A 8-1-2014................................. AA 1,491,689 1,571,940
------------ ------------
3,465,920 3,597,160
------------ ------------
WASHINGTON-2.91%
1,000,000 Washington Public Power Supply Sys, 7.00%
Nuclear Proj 2 Ref Rev Bond Ser 1990B
7-1-2012................................... AA 956,950 1,068,840
1,000,000 Washington Public Power Supply Sys, 7.625%
Proj 2 Rec Bond Ser 1990A 7-1-2008
(Refunded 7-1-2000 @ 102).................. AAA 986,875 1,138,340
------------ ------------
1,943,825 2,207,180
------------ ------------
WISCONSIN-1.15%
750,000 Wisconsin Health & Educ Fac Auth, 8.50% Rev
Bond Ser 1990 (Franciscan Health Sys)
3-1-2020 (Refunded 3-1-2000 @ 102)......... Aaa* 750,000 870,795
------------ ------------
TOTAL MUNICIPAL BONDS........................ $71,280,012 $74,479,496
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-0.38%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (b)
--------- ------------
<C> <S> <C>
INVESTMENT COMPANY-0.38%
$286,019 Federated Tax-Free Obligation Fund, Current
Rate -- 3.30%.............................. $ 286,019
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$71,566,031) (A)........................... $74,765,515
------------
------------
</TABLE>
(a) At March 31, 1996, the cost of securities for federal income tax
purposes was $71,568,928 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation........................... $3,654,439
Unrealized depreciation........................... (457,852)
--------------------------------------------------------------
Net unrealized appreciation....................... $3,196,587
--------------------------------------------------------------
</TABLE>
(b) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(c) Note:Percentage of investments as shown is the ratio of the total
market value to total net assets.
(d) The interest rate disclosed for these securities represents the
original issue discount yields on the date of acquisition.
* Moody's Rating
7
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
MINNESOTA PORTFOLIO
Schedule of Investments
March 31, 1996 (Unaudited)
MUNICIPAL BONDS-96.97%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (a) Value (b)
----------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
GENERAL OBLIGATIONS-23.04%
$ 450,000 Eagan (City of), MN, 7.25% General Obligation
Water Rev Sys Bond Ser 1990A 12-1-2008
(Crossover Refunded 12-1-1999 @ 100)....... AA- $ 445,500 $ 493,492
1,000,000 Eden Prairie (City of), MN Independent School
District #272, 5.125% General Obligation
State Enhancement Program 2-1-2013......... Aa* 987,908 954,760
500,000 Edina (City of) MN,7.30% General Obligation
2-1-2008 (Crossover Refunded 2-1-1998 @
100)....................................... Aa1* 502,716 526,570
1,500,000 Minneapolis (City of), MN Spec School
District, 5.375% Unlimited General
Obligation State Enhancement Program FGIC
Insured 2-1-2014........................... AAA 1,500,248 1,458,810
2,000,000 Minneapolis (City of), MN, 5.20% General
Obligation Ref Ser B 3-1-2013.............. AAA 1,986,499 1,921,180
1,000,000 Puerto Rico, 5.75% Public Building Auth Rev
Ref Bond Ser L 7-1-2016.................... A 963,297 959,500
900,000 Puerto Rico, 6.25% Public Building Auth Rev
GTD Gov't Facilities Ser A AMBAC Insured
7-1-2009................................... AAA 1,010,797 992,349
1,760,000 Spring Lake Park (City of), MN, 5.25%
Independent School District #16 General
Obligation MBIA Insured 2-1-2017........... AAA 1,701,641 1,661,933
1,200,000 St. Paul (City of), MN, 5.80% Independent
School District #625 Ser B 2-1-2012........ AA 1,191,518 1,223,820
1,600,000 Stillwater (City of), MN, 5.75% Independent
School District #834 MBIA Ins. Sch Dist
Enhancement Program 2-1-2015............... AAA 1,581,787 1,602,048
1,000,000 Wayzata (City of), MN, 5.95% Independent
School District #284-General Obligation Ser
1995B 2-1-2013............................. AAA 1,000,000 1,023,350
------------ ------------
12,871,911 12,817,812
------------ ------------
HEALTH CARE/SERVICES-22.79%
1,000,000 Duluth (City of), MN, 8.375% EDA Health Care
Fac Rev (St. Mary's Med Ctr) Ser 1990
2-15-2020 (Refunded 2-15-2000 @ 102)....... AAA 1,021,779 1,155,170
785,000 Duluth (City of), MN, 9.00% Hospital Fac Rev
Bond for St. Luke's Ser 1988 5-1-2018...... AAA 801,181 875,463
500,000 Hibbing (City of), MN, 5.50% Health Care Fac
Rev (Duluth Clinic) Ser 1996 FSA Insured
11-1-2016.................................. AAA 495,006 479,760
500,000 Minneapolis & St Paul (Cities of), MN, 6.75%
HRA Health Care Fac Rev Bond Group Health,
Inc.
Ser 1992-1 2-1-2013........................ A- 486,264 523,295
2,000,000 Minneapolis & St. Paul (Cities of), MN, 5.70%
HSG & Redev Auth Health Care System
Childrens Health Care Ser A FSA Insured
8-15-2016.................................. AAA 1,975,999 1,964,400
1,100,000 Minneapolis & St. Paul (Cities of), MN, 6.75%
HRA Health Care System HealthOne Obligated
Group MBIA Insured 8-15-2014............... AAA 1,098,799 1,174,547
1,750,000 Minneapolis (City of), MN, 5.25% Health Care
Fac Rev (Fairview Hosp) MBIA Insured
11-15-2019................................. AAA 1,676,814 1,607,970
2,100,000 Robbinsdale (City of), MN, 5.45% Hospital Rev
North Memorial Med Ctr Ser B AMBAC Insured
5-15-2013.................................. AAA 2,106,979 2,020,725
1,275,000 Rochester (City of), MN, 6.25% Health Care
Fac Rev Bond Mayo Foundation/Mayo Med Ctr
Ser 1992D 11-15-2014....................... AA+ 1,274,860 1,330,106
350,000 St. Louis Park (City of), MN, 7.25% Hospital
Fac Rev Methodist Ser 1990C AMBAC Insured
7-1-2015................................... AAA 352,952 393,386
1,180,000 St. Paul (City of), MN, 5.50% Housing and
Redevelopment Authority Hospital Revenue
St. Paul Ramsey Medical Ctr AMBAC Insured
5-15-2013.................................. AAA 1,134,909 1,151,798
------------ ------------
12,425,542 12,676,620
------------ ------------
HIGHER EDUCATION-1.92%
460,000 Minnesota Higher Education, 7.625% Mortgage
Rev Ser 3F for St. Mary's College 10-1-2016
(Refunded 10-1-2001 @ 100)................. BBB- 457,700 526,281
500,000 Northfield (City of), MN, 8.00% College
Facility Rev Bond for St. Olaf College
10-1-2018 (Refunded 10-1-1998 @ 100)....... N/R 500,739 543,870
------------ ------------
958,439 1,070,151
------------ ------------
HOUSING-19.08%
1,500,000 Brainerd (City of), MN, 6.65% Rev Ref Bond
Ser 1992B, Evangelical Lutheran-Good
Samaritan Project FSA Insured 3-1-2017..... AAA 1,514,325 1,599,585
325,000 Dakota County, MN, 8.10% HRA Single Family
Rev GNMA Backed 3-1-2016................... AAA 332,109 343,759
300,000 Eden Prairie (City of), MN, 7.40% Multifamily
Housing Ser 1990 FHA Insured 8-1-2025...... AAA 299,956 315,078
870,000 Eden Prairie (City of), MN, 8.00% Multifamily
Housing Ser A FHA Insured 7-1-2026......... AAA 870,000 936,094
585,000 Edina (City of), MN, 7.50% Housing Dev Ref
Rev Edina Park Plaza Ser 1989A 12-1-2009... Aa* 584,625 620,299
500,000 Edina (City of), MN, 7.70% Housing Dev Ref
Rev Edina Park Plaza Ser A FHA Insured
12-1-2028.................................. Aa* 500,000 527,330
525,000 Mankato (City of), MN, 8.25% Nursing Home Rev
Bond Board of Soc Ministry Mankato Lutheran
Ser 1991A 10-1-2021........................ N/R 520,000 562,742
1,070,000 Minneapolis (City of), MN, 7.10% HRA Mortgage
Rev Bond Riverplace Proj Ser A LOC Bank of
Tokyo 1-1-2020............................. Aa3* 1,082,605 1,102,400
600,000 Minneapolis (City of), MN, 7.875% CDA & HRA
Rev Bond 7-1-2017.......................... AA- 592,536 616,296
485,000 Minneapolis (City of), MN, 8.25% Health Care
Fac Rev Bond Jones-Harrison Residence Ser
1991 9-1-2011.............................. N/R 479,122 517,961
</TABLE>
8
<PAGE>
MUNICIPAL BONDS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (a) Value (b)
----------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
$ 350,000 Minneapolis (City of), MN, 8.25% Rev Bond
Trinity Housing Proj Ser 1991 2-1-2018..... N/R $ 350,000 $ 357,980
500,000 Minnesota Housing Finance Agency, 6.95%
Housing Dev Bond Ser 1992A 8-1-2017........ AA 500,000 524,530
205,000 Minnesota Housing Finance Agency, 7.70%
Single Family Mortgage Bond Ser C
7-1-2014................................... AA+ 206,167 216,954
440,000 Northfield (City of), MN, 7.00% Health Care
Facility Northfield Retirement Center
5-1-2015................................... N/R 436,138 447,194
735,000 Red Wing (City of), MN, 6.50% Elderly Housing
Fac Ref Rev River Region Obligated Group
Ser 1993C 9-1-2022......................... BBB+ 730,729 740,608
500,000 Spring Park (City of), MN, 8.25% Health Care
Fac Rev Bond Twin Birch Health Care Ctr
8-1-2011................................... N/R 500,000 541,010
660,000 Waconia (City of), MN HRA, 6.00% Ref Rev Bond
Evangelical Lutheran Good Samaritan Society
Ser 1993A 6-1-2014......................... A- 660,000 645,658
------------ ------------
10,158,312 10,615,478
------------ ------------
MISCELLANEOUS-4.56%
450,000 Dakota County, MN, 7.50% HRA Limited Annual
Appropriation Tax & Rev Supported Bond Ser
1991 1-1-2006.............................. BBB+ 450,000 472,221
400,000 Dawson (City of), MN, 7.30% IDR Ref Bond
Associated Milk Producers 9-1-2000......... N/R 396,426 418,020
1,000,000 Minneapolis (City of), MN, 7.375% CDA Limited
Tax Supported Dev Rev Common Bond Fund
Ser 1995-G3 12-1-2012...................... BBB+ 1,000,000 1,102,590
500,000 Minneapolis (City of), MN, 8.375% CDA Limited
Tax Supported Dev Rev Common Bond Fund Ser
1990-6A 6-1-2007........................... BBB+ 497,500 540,990
------------ ------------
2,343,926 2,533,821
------------ ------------
POLLUTION CONTROL-4.19%
650,000 East Grand Forks (City of), MN, 7.75%
Pollution Control Rev (American Crystal
Sugar) Ser 1991A 4-1-2018.................. BBB+ 650,509 682,858
1,000,000 Minnesota Public Fac Auth, 6.65% Zero Coupon
WaterPollution Rev Bond Ser 1992A 3-1-2007
(d)........................................ AAA 489,691 534,250
1,000,000 Minnesota Public Fac Auth, 7.10% Water
Pollution Rev Bond Ser 1990A 3-1-2012...... AAA 978,767 1,111,190
------------ ------------
2,118,967 2,328,298
------------ ------------
PUBLIC FACILITES-4.13%
400,000 Duluth (City of), MN, 6.75% Gross Rev
Recreation Fac Bond Spirit Mountain Ser
1992 2-1-2007.............................. N/R 400,000 412,056
325,000 Moorhead (City of), MN, 7.75% Golf Course Rev
Bond Ser 1992A 12-1-2015................... N/R 325,000 360,350
1,000,000 St. Paul (City of), MN, 5.45% HRA Sales Tax
Rev Bond Civic Ctr Proj Ser 1993
11-1-2013.................................. A 984,201 976,740
500,000 St. Paul (City of), MN, 6.45% HRA Parking Rev
Bond Ser 1992A 8-1-2007 (Refunded 8-1-2000
@ 102)..................................... A- 500,000 545,835
------------ ------------
2,209,201 2,294,981
------------ ------------
REFUNDED WITH U.S. GOVERNMENT SECURITIES-6.91%
400,000 Minneapolis (City of), MN, 8.00% HRA St. Paul
HealthOne Ser 1990B 8-15-2014
(Prefunded 8-15-2000 @ 102)................ AAA 412,289 462,488
1,100,000 Minneapolis (City of), MN, 9.125% Hospital
Fac Ref Rev Bond Ser B 12-1-2014
(Refunded 12-1-1997 @ 102)................. AAA 1,184,861 1,214,290
220,000 Minneapolis (City of), MN, 9.50% CDA for Mt.
Sinai Hospital Assoc Ser 1986 11-1-2006
(Refunded 11-1-1996 @ 102)................. AAA 232,120 231,992
925,000 St. Louis Park (City of), MN, 7.25% Hospital
Fac Rev Methodist Ser 1990C AMBAC Insured
7-1-2015 (Refunded 7-1-2000 @ 102)......... AAA 908,761 1,039,663
765,000 St. Louis Park (City of), MN, 8.50% Health
Care Fac (Park Nicollet Med Ctr) Ser A
1-1-2011 (Refunded 1-1-2001 @ 100)......... Aaa* 770,804 892,472
------------ ------------
3,508,835 3,840,905
------------ ------------
UTILITIES-ELECTRIC-9.37%
2,000,000 Northern MN Municipal Power Agency, 5.50%
Electric Sys Rev Bond Ser B AMBAC Insured
1-1-2018................................... AAA 1,931,654 1,911,900
1,295,000 Northern MN Municipal Power Agency, 7.102%
Zero Coupon Elec Sys Rev Ref Ser A AMBAC
Primary Insured 1-1-2011 (d)............... AAA 473,481 561,033
1,000,000 Southern MN Municipal Power Agency, 5.00%
Power Supply Sys Rev Bond Ser 1993A
1-1-2012................................... A+ 949,635 924,820
1,870,000 Southern MN Municipal Power Agency, 5.75%
Power Supply Sys Rev 1-1-2018.............. A+ 1,812,471 1,815,620
------------ ------------
5,167,241 5,213,373
------------ ------------
UTILITIES-WATER AND SEWER-0.98%
500,000 St. Paul (City of), MN, 8.00% Sewer Rev Bond
Ser 1988A 12-1-2008
(Crossover Refunded 12-1-1998 @ 101)....... BBB 500,000 546,535
------------ ------------
TOTAL MUNICIPAL BONDS........................ $52,262,374 $53,937,974
------------ ------------
------------ ------------
</TABLE>
9
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
MINNESOTA PORTFOLIO (CONTINUED)
Schedule of Investments
March 31, 1996 (Unaudited)
SHORT-TERM INVESTMENTS-1.74%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (b)
--------- ------------
<C> <S> <C>
INVESTMENT COMPANY-1.74%
$965,487 Federated Minnesota Municipal Cash Trust,
Current rate -- 3.32%...................... $ 965,487
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$53,227,861) (A)........................... $54,903,461
------------
------------
</TABLE>
(a) At March 31, 1996, the cost of securities for federal income tax
purposes was $53,241,496 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation........................... $2,159,936
Unrealized depreciation........................... (497,971)
--------------------------------------------------------------
Net unrealized appreciation....................... $1,661,965
--------------------------------------------------------------
</TABLE>
(b) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(c) Note:Percentage of investments as shown is the ratio of the total
market value to total net assets.
(d) The interest rate disclosed for these securities represents the
original issue discount yields on the date of acquisition.
* Moody's Rating.
10
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
NEW YORK PORTFOLIO
Schedule of Investments
March 31, 1996 (Unaudited)
MUNICIPAL BONDS-95.79%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (a) Value (b)
--------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
GENERAL OBLIGATIONS-4.26%
$250,000 North Hempstead (Town of) NY, 7.25% Public
Improvement Bond FGIC Insured Ser A
Unlimited Tax 4-1-2012 (Refunded 4-1-1999 @
102)....................................... AAA $ 249,375 $ 275,433
200,000 Puerto Rico, 6.25% Public Building Auth Rev
GTD Gov't Facilities Ser A AMBAC Insured
7-1-2009................................... AAA 224,622 220,522
------------ ------------
473,997 495,955
------------ ------------
HEALTH CARE/SERVICES-7.18%
305,000 New York State Med Care Fac Fin
Agency -- Mental Health, 7.70% Rev Bond
2-15-2018.................................. BBB+ 315,290 325,688
500,000 New York State Med Care Fac Fin Agency,
6.375% Mt. Sinai Hospital & Nursing Home
Rev Ref Mtg C
FHA Insured 8-15-2029...................... AAA 497,149 510,185
------------ ------------
812,439 835,873
------------ ------------
HOUSING-22.43%
410,000 New York State Mtg Agency, 7.85% Rev
Homeowner Mtg Ser BB-2 10-1-2008........... Aa* 409,133 433,497
770,000 New York State, 7.50% Dorm Auth Rev Ref State
Univ Educ Fac Ser B 5-15-2011.............. BBB+ 784,595 885,377
791,000 New York State, 7.80% Dorm Auth Rev Bond
Insd-Pooled Cap Prog, FGIC Insured
12-1-2005 (Partially Refunded 12-1-1998
@102)...................................... AAA 801,057 858,029
400,000 New York State, 8.125% Dorm Auth City Univ
Ref Bond Ser A 7-1-2007.................... BBB 401,628 434,264
------------ ------------
2,396,413 2,611,167
------------ ------------
MISCELLANEOUS-6.69%
250,000 New York (City of) Municipal Assistance
Corp., 7.625% Ser 67 Bond (Pub Benefit
Corp., of the State of NY) 7-1-2008........ AA- 252,576 275,390
500,000 United Nations Development Corp., of NY,
6.00% Rev Ref Sr Lien Ser 1992A 7-1-2012... A 484,160 503,475
------------ ------------
736,736 778,865
------------ ------------
REFUNDED WITH U.S. GOVERNMENT SECURITIES-37.76%
290,000 Babylon (Town of) NY, 8.10% Indusrtrial Dev
Agency Res Recov Rev Bond Ser 1985C (Ogden
Martin Systems, Inc.) 1-1-2000 (Refunded
7-1-1988 @ 103)............................ Aaa* 289,825 322,860
405,000 Babylon (Town of) NY, 8.50% Industrial Dev
Agency Res Recov Rev Bond Ser 1985C (Ogden
Martin Systems, Inc.) 1-1-2019 (Refunded
7-1-1998 @ 103)............................ Aaa* 420,568 454,345
350,000 New York (City of) Municipal Assistance
Corp., 8.25% Ser 56 Bond 7-1-2008
(Refunded 7-1-1996 @ 102).................. AA- 353,382 361,190
690,000 New York City, 8.25% General Obligation Ser
1991F 11-15-2017 (Refunded 11-15-2001 @
101.5)..................................... BBB+ 673,023 825,005
600,000 New York Local Government Assistance Corp.,
7.50% Ser 1991B Bond 4-1-2020
(Refunded 4-1-2001 @ 102).................. AAA 599,375 689,478
345,000 New York Med Care Fac Fin Agency -- Mental
Health, 7.70% 2-15-2018 (Refunded 2-15-1998
@ 102)..................................... AAA 354,128 374,649
600,000 New York State Med Care, 7.45% (St. Luke's
Hosp) FHA and Secondary MBIA Insured Ser B
2-15-2029 (Refunded 2-15-2000 @ 102)....... AAA 598,500 674,911
600,000 New York State Urban Development Corp.,
7.375% Rev Correctional Cap Fac FSA Insured
Ser 3 1-1-2018 (Refunded 1-1-2002 @102).... Aaa* 595,918 692,532
------------ ------------
3,884,719 4,394,970
------------ ------------
TRANSPORTATION-13.11%
500,000 Metropolitan Transportation Authority NY
Commuter Facilities, 5.75% Ser O
7-1-2013................................... BBB 483,952 485,580
500,000 New York State Thruway Auth, 6.25% Loc Hwy &
Bridge Svc Contract Ser 1995 4-1-2014...... BBB 490,000 500,390
500,000 New York Triborough Bridge and Tunnel Auth,
8.125% General Purpose Rev Ref Bond Ser L
1-1-2012................................... A+ 501,838 539,905
------------ ------------
1,475,790 1,525,875
------------ ------------
UTILITIES-ELECTRIC-4.36%
550,000 New York (State of), 5.25% Power Auth General
Purpose Ser CC 1-1-2018.................... AA- 540,698 507,089
------------ ------------
TOTAL MUNICIPAL BONDS........................ $10,320,792 $11,149,794
------------ ------------
------------ ------------
</TABLE>
11
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
NEW YORK PORTFOLIO (CONTINUED)
Schedule of Investments
March 31, 1996 (Unaudited)
SHORT-TERM INVESTMENTS-2.19%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (b)
--------- ------------
<C> <S> <C>
INVESTMENT COMPANY-2.19%
$254,725 Federated Tax-Free Obligation Fund, Current
Rate -- 3.30%.............................. $ 254,725
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$10,575,517) (A)........................... $11,404,519
------------
------------
</TABLE>
(a) At March 31, 1996, the cost of securities for federal income tax
purposes was $10,575,517 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized operations............................. $866,710
Unrealized depreciation........................... (37,708)
------------------------------------------------------------
Net unrealized appreciation....................... $829,002
------------------------------------------------------------
</TABLE>
(b) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(c) Note:Percentage of investments as shown is the ratio of the total
market value to total net assets.
* Moody's Rating
12
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Statements of Assets and Liabilities
(Unaudited)
March 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NATIONAL MINNESOTA NEW YORK
PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS:
Investments in securities, as detailed in the accompanying schedules, at
market (cost $71,566,031; $53,227,861; and $10,575,517; respectively) (Note
1).......................................................................... $74,765,515 $54,903,461 $11,404,519
Receivables:
Interest and dividends...................................................... 1,182,263 868,477 227,010
Subscriptions of capital stock.............................................. 26,200 592 --
Deferred registration costs (Note 1).......................................... 34,190 37,091 26,172
Prepaid expenses.............................................................. 8,359 8,100 7,992
----------- ----------- -----------
TOTAL ASSETS.................................................................... 76,016,527 55,817,721 11,665,693
----------- ----------- -----------
LIABILITIES:
Bank overdraft................................................................ -- 1,878 --
Cash portion of dividends payable............................................. 106,391 52,816 11,566
Redemptions of capital stock.................................................. 17 86,286 --
Payable for investment advisory and management fees (Note 2).................. 49,397 33,898 7,947
Payable for distribution fees (Note 2)........................................ 526 304 --
Accounts payable and accrued expenses......................................... 21,713 17,008 6,890
----------- ----------- -----------
TOTAL LIABILITIES............................................................... 178,044 192,190 26,403
----------- ----------- -----------
NET ASSETS:
Net proceeds of capital stock, par value $.01 per share-authorized
100,000,000,000; 100,000,000,000; 100,000,000,000 shares; respectively...... 72,674,925 53,995,787 10,791,652
Unrealized appreciation of investments........................................ 3,199,484 1,675,600 829,002
Distributions in excess of net investment income.............................. (42,758 ) (21,855 ) (3,571 )
Accumulated net realized gain (loss) from sale of investments................. 6,832 (24,001 ) 22,207
----------- ----------- -----------
TOTAL NET ASSETS................................................................ $75,838,483 $55,625,531 $11,639,290
----------- ----------- -----------
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE:
Class A shares (based on net assets of $3,903,163; $1,751,902; and $58,207;
respectively and 364,099; 170,836; and 5,409 shares outstanding;
respectively)................................................................. $10.72 $10.25 $10.76
----------- ----------- -----------
Class B shares (based on net assets of $682,258; $446,167; and $204,815;
respectively and 63,698; 43,610; and 19,083 shares outstanding;
respectively)................................................................. $10.71 $10.23 $10.73
----------- ----------- -----------
Class C shares (based on net assets of $181,021; $248,569; and $51,584;
respectively and 16,894; 24,239; and 4,803 shares outstanding;
respectively)................................................................. $10.72 $10.25 $10.74
----------- ----------- -----------
Class E shares (based on net assets of $68,055,235; $51,530,611; and
$11,236,171; respectively and 6,342,309; 5,013,945; and 1,044,019 shares
outstanding; respectively).................................................... $10.73 $10.28 $10.76
----------- ----------- -----------
Class H shares (based on net assets of $3,016,806; $1,648,282; and $88,513;
respectively and 281,300; 160,695; and 8,259 shares outstanding;
respectively)................................................................. $10.72 $10.26 $10.72
----------- ----------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Statements of Operations
(Unaudited)
March 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NATIONAL MINNESOTA NEW YORK
PORTFOLIO PORTFOLIO PORTFOLIO
----------- ---------- ---------
<S> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income............................................................. $2,336,686 $1,725,552 $390,271
----------- ---------- ---------
Expenses:
Investment advisory and management fees (Note 2)............................ 293,459 200,638 48,219
Distribution fees (Class A) (Note 2)........................................ 3,342 1,863 66
Distribution fees (Class B) (Note 2)........................................ 3,679 1,555 1,001
Distribution fees (Class C) (Note 2)........................................ 846 964 259
Distribution fees (Class H) (Note 2)........................................ 12,209 3,957 419
Registration fees (Note 1).................................................. 16,465 15,000 11,339
Legal and auditing fees (Note 2)............................................ 13,750 11,500 6,911
Shareholders' notices and reports........................................... 16,500 12,063 3,922
Custodian fees.............................................................. 6,500 5,500 1,850
Directors' fees and expenses................................................ 4,500 3,450 2,699
Other....................................................................... 8,100 6,232 1,800
----------- ---------- ---------
Total expenses................................................................ 379,350 262,722 78,485
Less reimbursable expenses (Note 2)......................................... -- -- (9,747 )
----------- ---------- ---------
Net Expenses.................................................................. 379,350 262,722 68,738
----------- ---------- ---------
NET INVESTMENT INCOME........................................................... 1,957,336 1,462,830 321,533
----------- ---------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1):
Net realized gain from security transactions.................................. 1,138,150 345,994 30,565
Net change in unrealized depreciation of investments.......................... (1,082,104 ) (586,896 ) (126,448 )
----------- ---------- ---------
NET GAIN (LOSS) ON INVESTMENTS.................................................. 56,046 (240,902 ) (95,883 )
----------- ---------- ---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $2,013,382 $1,221,928 $225,650
----------- ---------- ---------
</TABLE>
14
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Statements of Changes in Net Assets
NATIONAL PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH
PERIOD ENDED FOR THE
MARCH 31, 1996 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 1995
-------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income......................................................... $ 1,957,336 $ 4,004,364
Net realized gain (loss) from security transacations.......................... 1,138,150 (592,450)
Net change in unrealized appreciation (depreciation) of investments in
securities.................................................................. (1,082,104) 2,893,045
-------------- ------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ 2,013,382 6,304,959
-------------- ------------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A..................................................................... (65,913) (40,810)
Class B..................................................................... (15,367) (8,802)
Class C..................................................................... (3,535) (1,397)
Class E..................................................................... (1,825,799) (4,004,277)
Class H..................................................................... (50,850) (23,755)
From net realized gains on investments
Class A..................................................................... -- (158)
Class B..................................................................... -- (39)
Class E..................................................................... -- (35,741)
Class H..................................................................... -- (111)
-------------- ------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............................................. (1,961,464) (4,115,090)
-------------- ------------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (203,392 and 174,678 shares)........................................ 2,240,375 1,836,979
Class B (16,289 and 61,707 shares).......................................... 178,115 652,193
Class C (8,629 and 10,282 shares)........................................... 93,640 108,826
Class E (132,418 and 554,163 shares)........................................ 1,450,351 5,801,785
Class H (129,354 and 162,867 shares)........................................ 1,413,144 1,720,757
Proceeds from shares issued as a result of reinvested dividends
Class A (4,022 and 2,193 shares)............................................ 43,906 23,365
Class B (1,193 and 756 shares).............................................. 13,042 8,023
Class C (294 and 104 shares)................................................ 3,212 1,105
Class E (109,599 and 255,916 shares)........................................ 1,200,375 2,677,589
Class H (3,104 and 1,187 shares)............................................ 33,973 12,614
Less cost of repurchase of shares
Class A (12,085 and 8,101 shares)........................................... (131,702) (86,435)
Class B (16,247 shares)..................................................... (176,480) --
Class C (1,925 and 490 shares).............................................. (21,063) (5,246)
Class E (481,141 and 1,440,336 shares)...................................... (5,256,147) (14,948,936)
Class H (15,164 and 48 shares).............................................. (166,800) (514)
-------------- ------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS................... 917,941 (2,197,895)
-------------- ------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS......................................... 969,859 (8,026)
NET ASSETS:
Beginning of period........................................................... 74,868,624 74,876,650
-------------- ------------------
End of period (includes excess of distributions over net investment income of
$42,758 and $38,630, respectively).......................................... $75,838,483 $ 74,868,624
-------------- ------------------
</TABLE>
15
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Statement of Changes in Net Assets
MINNESOTA PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH FOR THE
PERIOD ENDED YEAR ENDED
MARCH 31, 1996 SEPTEMBER 30,
(UNAUDITED) 1995
-------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income......................................................... $ 1,462,830 $ 3,007,735
Net realized gain (loss) from security transacations.......................... 345,994 (208,947)
Net change in unrealized appreciation (depreciation) of investments in
securities.................................................................. (586,896) 1,525,922
-------------- -----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ 1,221,928 4,324,710
-------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A..................................................................... (38,072) (17,812)
Class B..................................................................... (6,566) (3,618)
Class C..................................................................... (4,069) (1,393)
Class E..................................................................... (1,398,304) (3,012,388)
Class H..................................................................... (16,460) (15,259)
-------------- -----------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............................................. (1,463,471) (3,050,470)
-------------- -----------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (101,560 and 87,978 shares)......................................... 1,061,862 892,384
Class B (27,415 and 17,169 shares).......................................... 287,772 173,312
Class C (10,029 and 13,795 shares).......................................... 105,022 140,806
Class E (101,999 and 236,250 shares)........................................ 1,066,421 2,367,394
Class H (97,466 and 60,955 shares).......................................... 1,004,071 614,862
Proceeds from shares issued as a result of reinvested dividends
Class A (2,465 and 665 shares).............................................. 25,754 6,825
Class B (601 and 355 shares)................................................ 6,246 3,618
Class C (334 and 103 shares)................................................ 3,484 1,058
Class E (104,047 and 228,148 shares)........................................ 1,089,694 2,306,428
Class H (1,258 and 1,016 shares)............................................ 13,102 10,395
Less cost of repurchase of shares
Class A (18,962 and 2,870 shares)........................................... (199,900) (28,715)
Class B (1,927 and 3 shares)................................................ (19,730) (25)
Class C (19 and 3 shares)................................................... (200) (25)
Class E (289,491 and 781,394 shares)........................................ (3,024,352) (7,875,096)
Class H (0 and 0 shares).................................................... -- --
-------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS................... 1,419,246 (1,386,779)
-------------- -----------------
TOTAL INCREASE (DECREASE) IN NET ASSETS......................................... 1,177,703 (112,539)
NET ASSETS:
Beginning of period........................................................... 54,447,828 54,560,367
-------------- -----------------
End of period (includes excess distributions over net investment income of
$21,855 and $21,214, respectively).......................................... $55,625,531 $ 54,447,828
-------------- -----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Statement of Changes in Net Assets
NEW YORK PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE
SIX-MONTH FOR THE
PERIOD ENDED YEAR ENDED
MARCH 31, 1996 SEPTEMBER 30,
(UNAUDITED) 1995
-------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income......................................................... $ 321,533 $ 704,534
Net realized gain from security transacations................................. 30,565 18,022
Net change in unrealized appreciation (depreciation) of investments in
securities.................................................................. (126,448) 158,431
-------------- -----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ 225,650 880,987
-------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A..................................................................... (1,340) (941)
Class B..................................................................... (4,433) (7,056)
Class C..................................................................... (1,145) (568)
Class E..................................................................... (314,710) (694,432)
Class H..................................................................... (1,857) (1,034)
From realized gains on investments
Class A..................................................................... (70) --
Class B..................................................................... (283) (287)
Class C..................................................................... (73) --
Class E..................................................................... (16,521) (21,850)
Class H..................................................................... (113) --
-------------- -----------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS............................................. (340,545) (726,168)
-------------- -----------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (790 and 4,869 shares).............................................. 8,664 51,726
Class B (788 and 17,184 shares)............................................. 8,603 178,351
Class C (0 and 4,640 shares)................................................ -- 50,125
Class E (10,193 and 26,693 shares).......................................... 111,663 287,441
Class H (1,527 and 6,604 shares)............................................ 16,691 72,245
Proceeds from shares issued as a result of reinvested dividends
Class A (129 and 86 shares)................................................. 1,410 929
Class B (432 and 679 shares)................................................ 4,716 7,285
Class C (112 and 53 shares)................................................. 1,219 571
Class E (23,663 and 52,417 shares).......................................... 259,105 561,495
Class H (48 and 82 shares).................................................. 521 881
Less cost of repurchase of shares
Class A (0 and 465 shares).................................................. -- (5,003)
Class B (0 and 0 shares).................................................... -- --
Class C (0 and 2 shares).................................................... -- (25)
Class E (82,792 and 178,182 shares)......................................... (906,164) (1,909,876)
Class H (0 and 2 shares).................................................... -- (25)
-------------- -----------------
NET DECREASE IN NET ASSETS FROM SHARE TRANSACTIONS.............................. (493,572) (703,880)
-------------- -----------------
TOTAL DECREASE IN NET ASSETS.................................................... (608,467) (549,061)
NET ASSETS:
Beginning of period........................................................... 12,247,757 12,796,818
-------------- -----------------
End of period (includes excess distributions over net investment income of
$3,571 and $1,619, respectively)............................................ $11,639,290 $ 12,247,757
-------------- -----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Notes to Financial Statements
(Unaudited)
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Fortis Tax-Free Portfolios, Inc.
(the fund) is an open-end management investment company which currently is
comprised of three separate investment portfolios and series of capital
stock: the National and Minnesota Portfolios, both of which are diversified
portfolios, and the New York Portfolio, which is a non-diversified portfolio,
each of which has different investment objectives and its own investment
portfolio and net asset values. The investment objective of National
Portfolio is to seek as high a level of current income exempt from federal
income tax as is believed to be consistent with preservation of capital. The
investment objective of Minnesota Portfolio is to seek as high a level of
current income exempt from federal and Minnesota income tax as is believed to
be consistent with preservation of capital. The investment objective of New
York Portfolio is to seek as high a level of current income exempt from
federal, New York State, and New York City income tax as is believed to be
consistent with the preservation of capital.
The Minnesota and New York Portfolios concentrate their investments in a
single state and, therefore, may have more credit risk related to the
economic conditions of the respective state than a portfolio with broader
geographical diversification.
The fund offers Class A, Class B, Class C, Class E and Class H shares. The
fund began to issue class shares effective November 14, 1994. Class E shares
are only available to existing shareholders on November 14, 1994. Class A and
E 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 a contingent deferred sales charge for one year.
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 fund are summarized as
follows:
SECURITY VALUATION: Tax exempt bonds for which quotations are not readily
available are valued at fair value as determined by a pricing system approved
by the Board of Directors. The pricing service may employ electronic data
processing techniques and/or a matrix system to determine valuations using
methods which include consideration of yields or prices of municipal bonds of
comparable quality, type of issue, coupon, maturity and rating; indications
as to value from dealers; and general market conditions. 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.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions
are accounted for on the trade date. Interest income is recorded on the
accrual basis. Realized security gains and losses are determined using the
identified cost method. For financial reporting purposes, the portfolios
amortize long-term bond premium and original issue discount.
For the six-month period ended March 31, 1996, the cost of purchases and
proceeds from sales of securities (other than short-term securities)
aggregated $16,998,747 and $15,251,728 for National Portfolio; $10,370,327
and $9,371,597 for Minnesota Portfolio; and $467,451 and $1,077,731 for New
York Portfolio; respectively.
INCOME 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. On a calendar year basis, the fund intends to distribute
substantially all of its taxable net investment income and realized gains, if
any, to avoid the payment of federal excise taxes.
Net realized gains may 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
also 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. The effect on dividend
distributions of certain book-to-tax differences are reflected as excess
distributions of net investment income in the statements of changes in net
assets and the financial highlights.
For federal income tax purposes the National and Minnesota Portfolios had the
following capital loss carryovers at September 30, 1995, which, if not offset
by subsequent capital gains, will expire in 2002 and 2003 for the National
Portfolio, and in 1997, 2002 and 2003 for the Minnesota Portfolio. It is
unlikely the Board of Directors will authorize a distribution of any net
realized gains until the available capital loss carryovers have been offset
or expired.
<TABLE>
<S> <C>
National Portfolio................................ $ 1,125,524
Minnesota Portfolio............................... $ 355,029
</TABLE>
DEFERRED COSTS: Registration costs are deferred and charged to income over
the registration period.
INCOME AND CAPITAL GAINS DISTRIBUTION: The portfolios declare income
distributions daily to be paid on the last business day of each month. The
portfolios will make annual distributions of any realized capital gains as
required by law. These income and capital gains distributions may be
reinvested in additional shares of the portfolio at net asset value on the
payable date or paid in cash five business days after month end without any
charge to the shareholder.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of increase and decrease in net assets from operations during the reporting
period. Actual results could differ from those estimates.
2. PAYMENTS TO RELATED PARTIES: Fortis Advisers, Inc. (Advisers), is the
investment adviser for the fund. Investment advisory fees paid by the
Minnesota and New York Portfolios are computed at an annual rate of .8% of
the first $50 million in average daily net assets, .7% of the next $50
million in average daily net assets and .625% of average daily net assets in
excess of $100 million. The National Portfolio's investment advisory fees are
computed at an annual rate of .8% of the first $50 million in average daily
net assets, and .7% of average daily net assets in excess of $50 million. The
fee percentage for the
18
<PAGE>
- --------------------------------------------------------------------------------
Minnesota Portfolio is based upon the aggregate average net assets of the
National and Minnesota Portfolios combined. The fee is then allocated to the
Minnesota Portfolio based upon proportionate net assets. The fee percentage
for National and New York Portfolio is based upon the average net assets of
each portfolio alone.
In addition to the investment advisory and management fee, Classes A, B, C
and H pay Fortis Investors, Inc. (the fund's principal underwriter)
distribution fees equal to .25% (Class A) and 1.00% (Class B, C, and H) of
average daily net assets (of the respective classes) 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 fund's shares)
aggregating
<TABLE>
<CAPTION>
Class E Class A Class B Class C Class H
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Tax Free National................................. $ 37,237 $ 62,458 $5,431 $121 $4,429
Tax Free Minnesota................................ $ 27,424 $ 19,181 $ 645 -- --
Tax Free New York................................. $ 2,702 $ 7 -- -- --
</TABLE>
Advisers has voluntarily undertaken to limit annual expenses for New York
Portfolio (exclusive of interest, taxes, brokerage commissions, 12b-1 fees
and non-recurring extraordinary charges and expenses) commencing November 1,
1994 to 1.09% of average net assets. During the six-month period ended March
31, 1996, Advisers waived $9,747 of its advisory fee.
Legal fees and expenses aggregating $6,250, $4,750 and $1,100 for the
National, Minnesota, and New York Portfolios, respectively, were paid to a
law firm of which the secretary of the fund is a partner.
19
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
3. FINANCIAL HIGHLIGHTS: Selected per share historical data for each of the
Portfolios were as follows:
<TABLE>
<CAPTION>
Class E
--------------------------------------------------------------------------
SIX-MONTH Three-Month
PERIOD ENDED Year Ended Period Ended Year Ended June 30,
MARCH 31, September 30, September 30, ---------------------------
NATIONAL PORTFOLIO 1996 1995 1994 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.............. $ 10.72 $ 10.38 $ 10.46 $ 11.13 $ 10.54 $ 9.99
------------ ------------- ------------- ------- ------- -------
Operations:
Investment income - net......................... .28 .58 .15 .60 .63 .66
Net realized and unrealized gains (losses) on
investments................................... .01 .36 (.09) (.64) .59 .55
------------ ------------- ------------- ------- ------- -------
Total from operations............................. .29 .94 .06 (.04) 1.22 1.21
------------ ------------- ------------- ------- ------- -------
Distributions to shareholders:
From investment income - net.................... (.28) (.59) (.14) (.59) (.62) (.66)
Excess distribution of net investment income.... -- -- -- -- (.01) --
From net realized gains......................... -- (.01) -- (.04) -- --
------------ ------------- ------------- ------- ------- -------
Total distributions to shareholders............... (.28) (.60) (.14) (.63) (.63) (.66)
------------ ------------- ------------- ------- ------- -------
Net asset value, end of period.................... $ 10.73 $ 10.72 $ 10.38 $ 10.46 $ 11.13 $ 10.54
------------ ------------- ------------- ------- ------- -------
Total Return @.................................... 2.71% 9.30% .59% (0.49%) 11.99% 12.46%
Net assets, end of period (000s omitted).......... $68,055 $70,531 $74,877 $76,746 $70,754 $54,189
Ratio of expenses to average daily net assets..... .94%* 1.03% .87%* .87% .94% .92%
Ratio of net investment income to average daily
net assets....................................... 5.16%* 5.54% 5.74%* 5.38% 5.80% 6.40%
Portfolio turnover rate........................... 20% 35% 17% 25% 29% 38%
</TABLE>
<TABLE>
<CAPTION>
Class A Class B Class C Class H
------------------ ------------------ ------------------ ------------------
NATIONAL PORTFOLIO 1996** 1995+ 1996** 1995+ 1996** 1995+ 1996** 1995+
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $10.71 $ 9.79 $10.70 $ 9.79 $10.70 $ 9.79 $10.71 $ 9.79
------- ------- ------- ------- ------- ------- ------- -------
Operations:
Investment income - net............... .27 .49 .23 .42 .23 .43 .23 .43
Net realized and unrealized gains
(losses) on investments............. .01 .94 .01 .93 .02 .92 .01 .93
------- ------- ------- ------- ------- ------- ------- -------
Total from operations................... .28 1.43 .24 1.35 .25 1.35 .24 1.36
------- ------- ------- ------- ------- ------- ------- -------
Distribution to shareholders:
From investment income - net.......... (.27) (.50) (.23) (.43) (.23) (.43) (.23) (.43)
From net realized gains............... -- (.01) -- (.01) -- (.01) -- (.01)
------- ------- ------- ------- ------- ------- ------- -------
Total distributions to shareholders..... (.27) (.51) (.23) (.44) (.23) (.44) (.23) (.44)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period.......... $10.72 $ 10.71 $10.71 $ 10.70 $10.72 $ 10.70 $10.72 $ 10.71
------- ------- ------- ------- ------- ------- ------- -------
Total Return @.......................... 2.60% 14.80% 2.21% 13.96% 2.30% 13.95% 2.21% 14.06%
Net assets end of period (000s
omitted)............................... $3,903 $ 1,807 $ 682 $ 668 $ 181 $ 106 $3,017 $ 1,757
Ratio of expenses to average daily net
assets................................. 1.19%* 1.28%* 1.94%* 2.03%* 1.94%* 2.03%* 1.94%* 2.03%*
Ratio of net investment income to
average daily net assets............... 4.93%* 5.03%* 4.16%* 4.04%* 4.16%* 4.14%* 4.17%* 4.24%*
Portfolio turnover rate................. 20% 35% 20% 35% 20% 35% 20% 35%
</TABLE>
* Annualized.
** Six-month period ended March 31, 1996.
+ For the period from November 14, 1994 (commencement of operations) to
September 30, 1995.
@ These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions, without
adjustment for sales charge.
20
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class E
------------------------------------------------------------------------
SIX-MONTH Three-Month
PERIOD ENDED Year Ended Period Ended Year Ended June 30,
MARCH 31, September 30, September 30, -------------------------
MINNESOTA PORTFOLIO 1996 1995 1994 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 10.32 $ 10.08 $ 10.15 $ 10.65 $ 10.16 $ 9.78
------------ ------------- ------------- ------- ------- -------
Operations:
Investment income - net............... .28 .57 .15 .59 .61 .64
Net realized and unrealized gains
(losses) on investments............. (.04) .24 .08 (.51) .49 .38
------------ ------------- ------------- ------- ------- -------
Total from operations................... .24 .81 .07 .08 1.10 1.02
------------ ------------- ------------- ------- ------- -------
Distributions to shareholders:
From investment income - net.......... (.28) (.57) (.14) (.58) (.61) (.64)
------------ ------------- ------------- ------- ------- -------
Net asset value, end of period.......... $ 10.28 $ 10.32 $ 10.08 $ 10.15 $ 10.65 $ 10.16
------------ ------------- ------------- ------- ------- -------
Total Return @.......................... 1.83% 8.35% .72% .64% 11.17% 10.71%
Net assets, end of period (000s
omitted)............................... $51,531 $52,603 $54,560 $54,854 $52,271 $38,586
Ratio of expenses to average daily net
assets................................. .91%* .98% .85%* .85% .89% .90%
Ratio of net investment income to
average daily net assets............... 5.25%* 5.60% 5.69%* 5.51% 5.82% 6.37%
Portfolio turnover rate................. 17% 27% 8% 11% 17% 10%
</TABLE>
<TABLE>
<CAPTION>
Class A Class B Class C Class H
----------------- ----------------- ----------------- -----------------
MINNESOTA PORTFOLIO 1996** 1995+ 1996** 1995+ 1996** 1995+ 1996** 1995+
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $10.30 $ 9.55 $10.27 $ 9.55 $10.30 $ 9.55 $10.30 $ 9.55
------- ------- ------- ------- ------- ------- ------- -------
Operations:
Investment income - net............... .27 .48 .22 .41 .22 .42 .22 .41
Net realized and unrealized gains
(losses) on investments............. (.06) .76 (.04) .73 (.05) .75 (.04) .76
------- ------- ------- ------- ------- ------- ------- -------
Total from operations................... .21 1.24 .18 1.14 .17 1.17 .18 1.17
------- ------- ------- ------- ------- ------- ------- -------
Distribution to shareholders:
From investment income - net.......... (.26) (.49) (.22) (.42) (.22) (.42) (.22) (.42)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period.......... $10.25 $ 10.30 $10.23 $ 10.27 $10.25 $ 10.30 $10.26 $ 10.30
------- ------- ------- ------- ------- ------- ------- -------
Total Return @.......................... 2.06% 13.15% 1.76% 12.10% 1.72% 12.31% 1.76% 12.42%
Net assets end of period (000s
omitted)............................... $1,752 $ 884 $ 446 $ 180 $ 249 $ 143 $1,648 $ 638
Ratio of expenses to average daily net
assets................................. 1.16%* 1.23%* 1.91%* 1.98%* 1.91%* 1.98%* 1.91%* 1.98%*
Ratio of net investment income to
average daily net assets............... 5.05%* 5.10%* 4.30%* 4.37%* 4.30%* 4.28%* 4.30%* 4.29%*
Portfolio turnover rate................. 17% 27% 17% 27% 17% 27% 17% 27%
</TABLE>
* Annualized.
** Six-month period ended March 31, 1996.
+ For the period from November 14, 1994 (commencement of operations) to
September 30, 1995.
@ These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions, without
adjustments for sales charge.
21
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class E
------------------------------------------------------------------------
SIX-MONTH Three-Month
PERIOD ENDED Year Ended Period Ended Year Ended June 30,
MARCH 31, September 30, September 30, -------------------------
NEW YORK PORTFOLIO 1996 1995 1994 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 10.87 $ 10.74 $ 10.81 $ 11.51 $ 11.03 $ 10.57
------------ ------------- ------------- ------- ------- -------
Operations:
Investment income - net............... .30 .61 .15 .62 .65 .66
Net realized and unrealized gains
(losses) on investments............. (.09) .15 (.06) (.54) .65 .62
------------ ------------- ------------- ------- ------- -------
Total from operations................... .21 .76 .09 .08 1.30 1.28
------------ ------------- ------------- ------- ------- -------
Distributions to shareholders:
From net investment income - net...... (.30) (.61) (.16) (.62) (.65) (.66)
Excess distribution of net investment
income.............................. -- -- -- -- (.01) --
From net realized gains............... (.02) (.02) -- (.16) (.16) (.16)
------------ ------------- ------------- ------- ------- -------
Total distributions to shareholders..... (.32) (.63) (.16) (.78) (.82) (.82)
------------ ------------- ------------- ------- ------- -------
Net asset value, end of period.......... $ 10.76 $ 10.87 $ 10.74 $ 10.81 $ 11.51 $ 11.03
------------ ------------- ------------- ------- ------- -------
Total Return @.......................... 1.84% 7.31% .79% .63% 12.19% 12.53%
Net assets, end of period (000s
omitted)............................... $11,236 $11,882 $12,797 $12,851 $13,915 $14,943
Ratio of expenses to average daily net
assets (a)............................. 1.09%* 1.09% 1.09%* .99% .99% 1.00%
Ratio of net investment income to
average daily net assets (a)........... 5.39%* 5.69% 5.74%* 5.55% 5.74% 6.15%
Portfolio turnover rate................. 5% 10% 0% 4% 17% 19%
</TABLE>
<TABLE>
<CAPTION>
Class A Class B Class C Class H
----------------- ----------------- ----------------- -----------------
NEW YORK PORTFOLIO 1996** 1995+ 1996** 1995+ 1996** 1995++ 1996** 1995+++
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $10.87 $ 10.34 $10.84 $ 10.34 $10.85 $10.79 $10.83 $10.89
------- ------- ------- ------- ------- ------- ------- -------
Operations:
Investment income - net............... .29 .50 .24 .43 .24 .21 .24 .16
Net realized and unrealized gains
(losses) on investments............. (.10) .57 (.09) .54 (.09) .06 (.09) (.05)
------- ------- ------- ------- ------- ------- ------- -------
Total from operations................... .19 1.07 .15 .97 .15 .27 .15 .11
------- ------- ------- ------- ------- ------- ------- -------
Distribution to shareholders:
From investment income - net.......... (.28) (.52) (.24) (.45) (.24) (.21) (.24) (.17)
From net realized gains............... (.02) (.02) (.02) (.02) (.02) -- (.02) --
------- ------- ------- ------- ------- ------- ------- -------
Total distributions to shareholders..... (.30) (.54) (.26) (.47) (.26) (.21) (.26) (.17)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period.......... $10.76 $ 10.87 $10.73 $ 10.84 $10.74 $10.85 $10.72 $10.83
------- ------- ------- ------- ------- ------- ------- -------
Total Return @.......................... 1.73% 10.51% 1.34% 9.46% 1.34% 2.54% .97% 1.00%
Net assets end of period (000s
omitted)............................... $ 58 $ 49 $ 205 $ 194 $ 52 $ 51 $ 89 $ 72
Ratio of expenses to average daily net
assets (a)............................. 1.34%* 1.34%* 2.09%* 2.09%* 2.09%* 2.09%* 2.09%* 2.09%*
Ratio of net investment income to
average daily net assets (a)........... 5.14%* 5.41%* 4.39%* 4.68%* 4.39%* 4.44%* 4.39%* 4.36%*
Portfolio turnover rate................. 5% 10% 5% 10% 5% 10% 5% 10%
</TABLE>
(a) Advisers has voluntarily undertaken to limit annual expenses for New York
Portfolio (exclusive of interest, taxes, brokerage commissions, 12b-1 fees
and non- recurring extraordinary charges and expenses) to 1.09% of average
net assets. From June 1, 1993 to June 30, 1994, Advisers agreed to limit
expenses to .99% of average net assets. Prior to June 1, 1993, Advisers
agreed to limit expenses to 1.00% of average assets. For each of the
periods presented, had the waivers and reimbursement of expenses not been
in effect, the ratios of expenses and net investment income to average net
assets would have been 1.27% and 5.21% for class E, 1.52% and 4.96% for
class A, 2.27% and 4.21% for classes B, C & H, for the six-month period
ended March 31, 1996; 1.60% and 5.18% for class E, 1.85% and 4.90% for
class A, 2.60% and 4.17% for class B, 2.60% and 3.93% for class C, 2.60%
and 3.85% for class H, for the year ending September 30, 1995; 1.09% and
5.45% for the year ended June 30, 1994; 1.05% and 5.68% for the year ended
June 30, 1993; and 1.26% and 5.89% for the year ended June 30, 1992.
* Annualized.
** For the six-month period ended March 31, 1996.
+ For the period from November 14, 1994 (commencement of operations) to
September 30, 1995.
++ For the period from April 26, 1995 (date of first investment) to September
30, 1995.
+++ For the period from May 31, 1995 (date of first investment) to September
30, 1995.
@ These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions, without
adjustment for sales charge.
22
<PAGE>
FORTIS FINANCIAL GROUP'S OTHER PRODUCTS AND SERVICES
MUTUAL Fortis Bond Funds MONEY FUND
FUNDS/PORTFOLIOS U.S. GOVERNMENT
CONVENIENT ACCESS TO SECURITIES FUND
A BROAD RANGE OF TAX-FREE MINNESOTA
SECURITIES PORTFOLIO
TAX-FREE NATIONAL
PORTFOLIO
TAX-FREE NEW YORK
PORTFOLIO
HIGH YIELD PORTFOLIO
Fortis Stock Funds ASSET ALLOCATION
PORTFOLIO
VALUE FUND
GROWTH & INCOME FUND
CAPITAL FUND
FIDUCIARY FUND
GLOBAL GROWTH PORTFOLIO
GROWTH FUND
CAPITAL APPRECIATION
PORTFOLIO
FIXED AND VARIABLE Fortis Opportunity Fixed FIXED ACCOUNT
ANNUITIES & Variable Annuity MONEY MARKET SUBACCOUNT
TAX-DEFERRED Masters Variable Annuity U.S. GOVERNMENT
INVESTING SECURITIES SUBACCOUNT
DIVERSIFIED INCOME
SUBACCOUNT
GLOBAL BOND SUBACCOUNT
HIGH YIELD SUBACCOUNT
ASSET ALLOCATION
SUBACCOUNT
GLOBAL ASSET ALLOCATION
SUBACCOUNT
VALUE SUBACCOUNT
GROWTH & INCOME
SUBACCOUNT
S&P 500 INDEX SUBACCOUNT
BLUE CHIP STOCK
SUBACCOUNT
GLOBAL GROWTH SUBACCOUNT
GROWTH STOCK SUBACCOUNT
INTERNATIONAL 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 AND DISABILITY Wall Street Series VUL FIXED ACCOUNT
INSURANCE PROTECTION 100, 220 & 500 MONEY MARKET SUBACCOUNT
AND TAX-DEFERRED U.S. GOVERNMENT
INVESTMENT SECURITIES SUBACCOUNT
OPPORTUNITY DIVERSIFIED INCOME
SUBACCOUNT
GLOBAL BOND SUBACCOUNT
HIGH YIELD SUBACCOUNT
ASSET ALLOCATION
SUBACCOUNT
GLOBAL ASSET ALLOCATION
SUBACCOUNT
VALUE SUBACCOUNT
GROWTH & INCOME
SUBACCOUNT
S&P 500 INDEX SUBACCOUNT
BLUE CHIP STOCK
SUBACCOUNT
GLOBAL GROWTH SUBACCOUNT
GROWTH STOCK SUBACCOUNT
INTERNATIONAL STOCK
SUBACCOUNT
AGGRESSIVE GROWTH
SUBACCOUNT
Adaptable Life
Universal Life
Disability
THE 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 and TIME 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.
23
<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, MACALESTER COLLEGE
Benjamin S. Jaffray CHAIRMAN, SHEFFIELD GROUP, LTD.
Jean L. King PRESIDENT, COMMUNI-KING
Dean C. Kopperud CHIEF EXECUTIVE OFFICER AND DIRECTOR,
FORTIS ADVISERS, INC. PRESIDENT AND
DIRECTOR, FORTIS INVESTORS, INC.
SENIOR VICE PRESIDENT OF FORTIS
BENEFITS INSURANCE COMPANY AND TIME
INSURANCE COMPANY
Edward M. Mahoney PRIOR TO JANUARY, 1995, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER, FORTIS
ADVISERS, INC., FORTIS INVESTORS,
INC.
Robb L. Prince FINANCIAL AND EMPLOYEE BENEFIT
CONSULTANT PRIOR TO JULY, 1995, VICE
PRESIDENT AND TREASURER,
JOSTENS, INC.
Leonard J. Santow PRINCIPAL, GRIGGS & SANTOW, INC.
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
Charles J. Dudley
VICE PRESIDENT
Thomas D. Gualdoni
VICE PRESIDENT
Maroun M. Hayek
VICE PRESIDENT
Howard G. Hudson
VICE PRESIDENT
Robert C. Lindberg
VICE PRESIDENT
Larry A. Medin
VICE PRESIDENT
Kevin J. Michels
VICE PRESIDENT
Jon H. Nicholson
VICE PRESIDENT
Fred Obser
VICE PRESIDENT
Dennis M. Ott
VICE PRESIDENT
David A. Peterson
VICE PRESIDENT
Nicholas L. M. de Peyster
VICE PRESIDENT
Stephen M. Poling
VICE PRESIDENT
Stephen M. Rickert
VICE PRESIDENT
Richard P. Roche
VICE PRESIDENT
Anthony J. Rotondi
VICE PRESIDENT
Keith R. Thomson
VICE PRESIDENT
Rhonda J. Schwartz
VICE PRESIDENT
Christopher J. Woods
VICE PRESIDENT
Gary N. Yalen
VICE PRESIDENT
Michael J. Radmer
SECRETARY
Tamara L. Fagely
TREASURER
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 First Bank National Association
MINNEAPOLIS, MINNESOTA
GENERAL COUNSEL Dorsey & Whitney LLP
MINNEAPOLIS, MINNESOTA
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
MINNEAPOLIS, MINNESOTA
The use of this material is authorized only when preceded or accompanied by a
prospectus.
24
<PAGE>
FORTIS FINANCIAL GROUP
Fortis Financial Group (FFG) is a premier provider of insurance and
investment portfolios whose fund manager, Fortis Advisers, Inc. has established
a nationwide reputation for money management. Through Fortis Investors, Inc.,
FFG offers mutual funds, annuities and life insurance. Life insurance products
are issued and underwritten by Fortis Benefits Insurance Company and Time
Insurance Company.
[PHOTO]
FFG is part of Fortis, Inc., a financial services company that owns or
manages approximately $11 billion* in assets. Fortis, Inc. is part of Fortis, a
wordwide group of companies active in the fields of insurance, banking and
investments with assets in excess of $140 billion.* Fortis is jointly owned by
Fortis AMEV of The Netherlands and Fortis AG of Belgium.
Like the Fortis name, which comes from the Latin for steadfast, our focus is
on the long-term in all we do: the relationships we build, the performance we
seek, the service we provide and the products we offer.
*Assets as of 12/31/95
-----------------
FORTIS-Registered Trademark Bulk Rate
FORTIS FINANCIAL GROUP US Postage
P.O. Box 64284 PAID
St. Paul, MN 55164 Permit No. 3794
Minneapolis, MN
-----------------
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PLEASE RECYCLE.
95380 (Ed. 6/96)
