[front cover]
[graphic image: globe] Great Companies
Great Investments
Greater Good
Great Year
1998 Annual Report
[logo: CITIZENS FUNDS]
<PAGE>
[inside front cover]
Socially and Environmentally Responsible
No Load Mutual Funds
[logo: CITIZENS FUNDS]
Performance data quoted represents past performance, which does not guarantee
future results. Investment return and principal value in the Citizens Funds will
fluctuate so that shares, when redeemed, may be worth more or less than their
original cost.
Please call us for a fund prospectus with complete details of fees and expenses.
Please read it carefully before you invest or send money.
<PAGE>
Citizens Funds
[photo: Sophia Collier, President]
Dear Shareholder:
You should be pretty proud of your funds this year. As your president and a
shareholder, I certainly am. The Citizens Index Fund, our largest, was ranked #1
in financial performance among 109 retail domestic equity index funds tracked by
Lipper Analytical Services for the one year ended 6/30/98. With a lot of my own
money invested in this Fund, you can bet I am happy with the Standard shares'
return of 36.50% in fiscal 1998 and its average annual return since inception on
3/3/95 of 31.76%.
Of course, the stock market, and our own special style of investing, will
not always have these great numbers. Inevitably, we also will endure periods
when performance is lower, and even negative. However, we are living in a very
unusual time and one that has special hope for socially responsible investors.
Long ago, someone said that a rising tide lifts every boat. It is so
encouraging to see how this current period of financial market success also has
led to high employment and lower crime. It is remarkable to see "help wanted"
advertising displayed in movie theatres and people from the poorest counties in
our nation going to work, in some cases for the first time in their lives.
While Asian markets have been much more volatile than our own, it also is
encouraging to see the growing recognition among investors that democracy is an
essential partner to market economics. Capitalism without the people's
participation is less strong. Investors who sustained large losses when
repressive regimes collapsed are now recognizing that an authoritarian military
can not guard their financial assets, which can disappear in the blip of a bit,
in a currency transaction traveling along the fiber optic cables under Wall
Street. It is better to bet on a stable country where wealth is shared.
In this environment, our Citizens Global Equity Fund's performance has been
excellent: 21.75% for the one year ended 6/30/98 and 14.23% average annual
return since inception on 2/8/94. As we invest in non-U.S. markets, it is
particularly rewarding to find companies where worker safety and environmental
responsibility are valued. We have more than 150 international companies on our
Approved List, and the number grows every day.
The Citizens Emerging Growth Fund, which invests in promising smaller
companies within the United States, also has had a great year. Those who kept
the faith in this Fund while it was "resting" (Wall Street euphemism for a
period of poor performance) have been more than vindicated. The strength of this
Fund is that its managers stick by their strategy. A well thought out strategy
that is temporarily out of favor can come roaring back. Results: 33.05% total
return for the one year ended 6/30/98 and 22.21% average annual return since
inception on 2/8/94.
For those who like to avoid the stock market -- and get a monthly check --
the Citizens Income Fund has been working well. Its assets grew significantly
this year as a result of the merger with the Muir California Tax-Free Portfolio
in September. Its returns were 10.49% for the one year and 7.12% for the five
years ended 6/30/98, and 7.67% average annual since inception on 6/10/92.
On a personal note, this is a particularly significant annual report for me
because it is my last as president of the Trust, Citizens Funds. On September 1,
I will be stepping down as president of Citizens
1
<PAGE>
1998 Annual Report
Funds and becoming chairman of our management company, Citizens Advisers. John
Shields, a 25-year industry veteran, will be taking over as president and Chief
Executive Officer of both the Trust and the management company. This is a change
for the Trust and for me, but it is also very natural and normal. As the Trust
has grown and prospered it has become more complex, and it seems wise to
strengthen our management team with additional experienced hands.
Over the last two years I have focused on building a highly capable
management team for the Trust. This has included much staff training and
development from within, as well as recruitment from the outside. Our staff now
includes people with experience at Fidelity, John Hancock, State Street Bank,
First Data, First NH Bank, Wellington Management and a number of other respected
firms.
Our new president, John Shields, is a CPA whose background includes 13 years
at a "big six" accounting firm and an almost equal number of years at Fidelity,
State Street Research and Cerulli Associates. John respects and values the
social mission of Citizens Funds and considers it a dream opportunity to join as
president. As chairman and as a trustee, I will still be here looking after your
assets (and mine), but I will be less active on a day-to-day basis.
In my action-packed seven years with Citizens, we moved from a single money
market with a little more than $200 million in assets to five funds with almost
$700 million in assets. Of the almost $500 million in growth, more than $275
million was earned through the investment strategies we pursued on behalf of our
shareholders, with the rest being new investments from shareholders.
At this point in my life I am ready to look away from the minute-by-minute
pace of Wall Street and spend some time in a simpler, more introspective mode.
My father recently died of cancer, and as his primary caregiver in his final
year, I have been vividly impressed with the fact that money is not everything,
and that it is essential for each of us to nourish our love for nature, friends
and the eternal side of life.
In closing, I want to thank you for the opportunity to serve you. When
shareholders voted to accept me and my partners as the new management company in
1991, I knew a great honor and responsibility had been given to me. Citizens is
a very special company and a work of many hands. I am very glad to have been
here for the last seven years and look forward to continuing with you in the
years ahead.
Sincerely yours,
/s/ Sophia Collier
Sophia Collier
President
August 28, 1998
2
<PAGE>
Citizens Funds
[photo: Edwin Ek]
1998 Annual Report
Managers' Comments
Annual Recap/Citizens Index Fund
Six months into 1998, the remarkable returns of the U. S. stock market
continue, and so does the bull market that began almost 16 years ago in August
1982. These last 3-1/2 years taken together, as well as the last 16, have no
precedent in our financial history. The S&P 500 Index, which is the benchmark
most widely used to assess performance, returned 17.74% for the first six months
of 1998, 30.21% for the last 12 months and 165.42% since 1995. Our own Citizens
Index(TM), made up of 300 socially screened large-capitalization companies,
returned 22.35% for the six months and 38.57% for the 12 months ended 6/30/98.
Since inception (12/31/94) it has returned 198.77%. Over the past three years,
the Citizens Index has outperformed the S&P 500 on an annualized basis by 4.13%.
[line chart]
Citizens Index Fund (Standard Shares)
Total return since inception
<TABLE>
<CAPTION>
Citizens Index Fund
Citizens Index(TM) S&P 500 (Standard Shares)
------------------ -------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
3-3-95 10,000 10,000 10,000
1995 9.40% 10,940 13.18% 11,318 14.69% 11,469
1996 23.41% 13,501 26.00% 14,260 26.23% 14,477
1997 35.89% 18,347 34.70% 19,209 38.69% 20,079
1998 36.50% 25,045 30.21% 14,935 38.57% 17,821
</TABLE>
Past performance is not indicative of future results. Total return for the
period ended 6/30/98: one year 36.50%; average annual since inception 31.76%.
Citizens Index Fund commenced operations 3-3-95.
[end line chart]
More significant for our investors have been the returns of the Citizens
Index Fund Standard shares. For the first six months of 1998 the Standard shares
had a return of 21.55%, and for the one year ended 6/30/98, they had a return of
36.50%.
What's behind the Citizen Index Fund's performance? Concentration in the
technology and banking sectors, which did very well, and avoidance of three
sectors that lagged: aerospace, oil and tobacco. For the year ended 6/30/98, 12
of the 300 companies are up more than 100%, and 73 are up more than 50%. Two
companies returned over 200%: America Online at
[sidebar text]
Edwin Ek, a member of the Citizens Index Fund management team since March 1995.
Objective:
Long-term capital appreciation
The Ground Rules:
Invests up to 100% of assets at all times in the 300 companies that comprise the
Citizens Index(TM), in a fixed proportion equal to the market weight of each
company.
The Results:
Total return for Standard shares for the six- and 12-month periods ended 6/30/98
were 21.55% and 36.50%, respectively. The average annual return since inception
(3/3/95) was 31.76%. The S&P 500 Index returned 17.74% for the six months and
30.21% for the 12 months ended 6/30/98.
[end sidebar text]
3
<PAGE>
1998 Annual Report
Managers' Comments
[photo: Richard Little]
[sidebar text]
Richard Little, a member of the Citizens Emerging Growth Fund management team
since February 1994.
Objective:
Aggressive growth
The Ground Rules:
During normal market conditions, invests at least 65% of the Fund in the common
stock or preferred stock of companies with an average capitalization of $2
billion.
The Results:
Total return for the six- and 12-month periods ended 6/30/98 were 19.39% and
33.05%, respectively. The average annual return since inception (2/8/94) was
22.21%. The Russell 2000 Index returned 4.93% for the six months and 16.51% for
the 12 months ended 6/30/98.
[end sidebar text]
[line chart]
Citizens Index Fund (Institutional Class Shares)
Total return since inception
Citizens Index(TM)
<TABLE>
<CAPTION>
Citizens
Index Fund
(Institutional Citizens
Class Shares) S&P 500 Index(TM)
--------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
1-25-96 10,000 10,000 10,000
1996 10.00% 11,000 8.98% 10,898 11.41% 11,141
1997 36.83% 15,051 34.70% 14,680 38.69% 15,451
1998 37.24% 20,671 30.21% 19.240 38.57% 21,411
</TABLE>
Past performance is not indicative of future results. Total return for the
period ended 6/30/98: one year 37.38%; average annual since inception 34.88%.
Citizens Index Fund Institutional Class commenced operations 1-25-96.
[end line chart]
278% and Dell Computer at 216%. Both are integral parts of the new information
age. Providian Financial, a credit card and consumer finance company, returned
146% as profits rose 30% on dramatic growth in lending.
A clear lesson of history is that timing the peaks and valleys of the
market is difficult, if not impossible. Much of the argument that the market is
too high, in terms of fundamentals, was true in 1995, 1996 and 1997. The returns
in the coming decade are almost sure to be lower than the returns of the last,
but the greatest risk comes in the form of opportunity cost -- of not investing
at all. Fluctuations are inevitable, and the best strategy is to develop a
long-term plan and follow it.
Annual Recap/Citizens Emerging Growth Fund
The Citizens Emerging Growth Fund returned 19.39% for the six months and
33.05% for the 12 months ended 6/30/98. This strong performance was a function
of our disciplined stock picking and continuous focus on companies with
accelerating earnings and strong underlying fundamentals. The first six months
of 1998 have continued to favor the equity markets. For the six months ended
6/30/98 large-cap stocks outperformed smaller-cap stocks with total returns of
17.74% for the S&P 500, 8.63% for the S&P 400 Midcap and 4.93% for the Russell
2000. The same was true for the 12 months ended 6/30/98. The S&P 500, the S&P
400 Midcap and the Russell 2000 were up 30.21%, 27.13% and 16.51%, respectively.
This performance gap had narrowed in the first quarter of the year but widened
in the second quarter as investors once again favored the liquidity of large-cap
stocks. The S&P 400 Midcap Index decreased 2.15% in the second quarter of 1998.
McKesson continued to be a strong performer for the Fund with returns of
51% year-to-date and 113.2% for the last 12 months. TJX Companies, an off-price
apparel retailer, returned 40.5% for the last six months and 83.5%
4
<PAGE>
Citizens Funds
[line chart]
Citizens Emerging Growth Fund
Total return since inception
<TABLE>
<CAPTION>
Citizens Emerging
Growth Fund Russell 2000
----------------- -------------------
<S> <C> <C> <C> <C>
2-8-94 10,000 10,000
1994 -0.70% 9,930 -8.77% 9,123
1995 23.24% 12,238 18.04% 10,768
1996 42.43% 17,430 24.00% 13,353
1997 4.03% 18,133 16.21% 15,517
1998 33.05% 24,127 16.44% 18,068
</TABLE>
Past performance is not indicative of future results. Total return for the
period ended 6/30/98: one year 33.05%, average annual since inception 22.21%.
Citizens Emerging Growth Fund commenced operations 2-8-94.
[end line chart]
for the year ended 6/30/98. Technology was a mixed bag as companies with Asian
exposure warned of weaker fundamentals. We were careful to select stocks that
had little direct Asian exposure, and we participated in a number of winners.
America Online, driven by strong subscriber and advertising revenue growth, was
a major contributor to the Fund's performance with a 132.3% return for the first
six months of 1998. Compuware rose 59.8% for the same time period, benefiting
from the continued demand for computer services.
We continue to believe that small- to mid-cap companies with domestic and
some international focus unrelated to Asia, will produce excess returns. We
always aim to own companies with strong current fundamentals and projected
earnings acceleration. We hope to continue to achieve above-average returns for
our investors through our careful management discipline.
Annual Recap/Citizens Global Equity Fund
The Citizens Global Equity Fund achieved a strong 21.75% return for the
12-month period ended June 30, 1998, its second consecutive year with returns
above 20%. The Fund once again outperformed its benchmark, the Financial Times
World Index, which gained 15.98% during the same period. Both returns include
net reinvested dividends. For the six-month period ended June 30, 1998, the
Citizens Global Equity Fund gained 19.45%, while its benchmark was up 15.74%.
The Fund's performance benefited from its strong exposure to European
markets, especially in Germany and the peripheral countries of Finland, Italy,
Portugal and Spain, and its limited exposure to Asia and emerging markets in
general.
[photo: Lilia Clemente]
[sidebar text]
Lilia Clemente, a member of the Citizens Global Equity Fund management team
since February 1994.
Objective:
Capital appreciation
The Ground Rules:
Can invest anywhere in the world, providing it holds at least 50% non-U.S.
companies and is invested in a minimum of three countries. To reduce risk, the
Fund cannot invest more than 25% in emerging markets.
The Results:
Total return for the six- and 12-month periods ended 6/30/98 were 19.45% and
21.75%, respectively. The average annual return since inception (2/8/94) was
14.23%. The Financial Times World Index returned 15.74% for the six months and
15.98% for the 12 months ended 6/30/98.
[end sidebar text]
5
<PAGE>
1998 Annual Report
Managers' Comments
[line chart]
Citizens Global Equity Fund
Total return since inception
<TABLE>
<CAPTION>
Citizens Global
Equity Fund FT World Index
----------------- ---------------
<S> <C> <C> <C> <C>
2-8-94 10,000 10,000
1994 -2.00% 9,800 -0.89% 9,911
1995 9.77% 10,757 6.84% 10,589
1996 12.52% 12,104 15.85% 12,267
1997 21.70% 14,731 19.38% 14,645
1998 21.75% 17,939 15.98% 16,985
</TABLE>
Past performance is not indicative of future results. Total return for the
period ended 6/30/98: one year 21.75%, average annual since inception 14.23%.
Citizens Global Equity Fund commenced operations 2-8-94.
[end line chart]
Our European holdings, which represent about 55% of the Fund, provided us
with the best returns. The pending European Monetary Union (EMU), ongoing
corporate restructuring, improving domestic economies and the convergence of
European interest rates all have contributed to the strong gains recorded by
European equities. Among the better-performing European stocks were several
technology and telecommunications stocks, as a result of increased computer
spending stimulated by the year 2000 and EMU conversions and the deregulation of
the telecommunications industry across Europe. Our best-performing stocks in
this sector were Orange PLC, a wireless telecommunications company in the U.K.,
which provided a one-year return of 219.9%; and Nokia, a telecommunications
equipment stock in Finland with a one-year return of 99.7%. U.S. technology and
telecommunications stocks were also among our best performing stocks; Cisco
Systems and Airtouch both provided us with one-year returns above 100%.
As a whole, we remain optimistic about global markets, and in particular
Europe, which we believe offers its greatest investment potential in a
generation. Deregulation, increasing competition, merger activity, emergence of
an equity culture among individual investors and commitment to enhancing
shareholder value should continue to support European market performance.
Continental European markets continue to offer the best prospects, especially in
Germany, France and the periphery. The European Monetary Union should reward
companies that have taken the crucial steps to be successful in the increasingly
competitive marketplace.
We will continue to monitor economic conditions and political initiatives
and their impact on financial markets as we remain committed to seeking
long-term capital appreciation and strong performance.
6
<PAGE>
Citizens Funds
Annual Recap/Citizens Income Fund
The bond market rally, which started in early 1997, continued through the
first six months of 1998. Though the Federal Reserve ("The Fed") held the Fed
Funds rate steady at 5.5%, longer maturities rallied sharply. By June 30, 1998,
U.S. Treasury bonds had reached a record low yield of just 5.63%. Excellent
inflation news and expectations that Asian turmoil will moderate U.S. economic
growth continue to pressure bond yields lower.
Citizens Income Fund investors earned an impressive return over the past 12
months of 10.49%. This beat both the Fund's Lipper peer group average
(intermediate investment-grade debt funds) of 9.42% and the Lehman Government
Corporate Intermediate Index of 8.54%. The Fund typically under-weights
government related securities and holds a higher proportion of corporates and
mortgages. We have not reacted to the Asian upset by rushing to government
related securities. Over time, fixed-income investors benefit primarily through
the income component of bond return, which is always higher in corporates and
mortgages than in government related securities. We will continue to invest in
well-selected corporate bonds for this added income potential. We expect to
maintain modest mortgage positions with an emphasis on individual securities
that are well protected from early prepayments.
While corporate bonds in general have lagged recently, the Fund held
several issues that performed exceptionally well. Corporate Express and Sullivan
Broadcasting both tendered for their bonds at premium prices during the first
half of the year. Jones Intercable and Time Warner bonds rose in price in
reaction to upgrades in their bond ratings.
[line chart]
Citizens Income Fund
Total return since inception
<TABLE>
<CAPTION>
Lehman Government/
Citizens Income Fund Corporate Intermediate
-------------------- ----------------------
<S> <C> <C> <C> <C>
6-10-92 10,000 10,000
1992 0.80% 10,080 1.24% 10,124
1993 10.08% 11,096 10.50% 11,187
1994 0.04% 11,101 -0.25% 11,159
1995 10.45% 12,261 10.37% 12,316
1996 5.48% 12,932 5.01% 12,933
1997 9.56% 14,169 7.22% 13,867
1998 10.49% 15,649 8.54% 15,051
</TABLE>
Past performance is not indicative of future results. Total return for the
period ended 6/30/98: one year 10.49%; five year 7.12%; average annual since
inception 7.67%. Citizens Income Fund commenced operations 6-10-92.
[end line chart]
While the economy remains strong, we believe the risk of a Federal Reserve
rate hike is minimal due to the current turmoil in Asia. Lower rates translate
into higher bond prices. Price gains plus ongoing high income should result in
another good year for bondholders with overall returns well above the inflation
rate. The Citizens Income Fund will continue to focus on providing above-market
returns through its disciplined, low-risk approach that has proven so beneficial
to our investors over time.
[photo: Gail Seneca]
[sidebar text]
Gail Seneca, a member of the Citizens Income Fund management team
since November 1993.
Objective:
Current income
The Ground Rules:
Invests at least 65% of the Fund in taxable bonds rated at least "investment
grade."
The Results:
Total return for the six- and 12- month periods ended 6/30/98 were 3.65% and
10.49%, respectively. The average annual return since inception (6/10/92) was
7.67%. The Lehman Government/Corporate Intermediate Index returned 3.47% for the
six months and 8.54% for the 12 months ended 6/30/98.
[end sidebar text]
7
<PAGE>
1998 Annual Report
Managers' Comments
[photo: Laura Provost]
[sidebar text]
Laura Provost, a member of the Working Assets Money Market Fund management team
since October 1997.
Objective:
Current income consistent with safety and liquidity
The Ground Rules:
Invests in liquid short-term money market instruments rated in the top two
rating categories, while maintaining an average maturity of 90 days or less.
The Results:
As of 6/30/98, the Working Assets Money Market Fund Standard shares had a 7-day
simple yield of 5.49%, and a 7-day effective yield of 5.64%. The Working Assets
Money Market Fund- Institutional Class shares had a 7-day simple yield of 5.85%
and a 7-day effective yield of 6.02%. The Fund had average days to maturity of
31.
[end sidebar text]
Annual Recap/Working Assets Money Market Fund
Over the past year, in the midst of a continued economic expansion, the Fed
has remained on the sidelines, leaving both the Federal Funds Target Rate and
the Discount Rate unchanged. Despite swings in sentiment, the short end of the
yield curve (maturities of one year and less) remained relatively flat, giving
little incentive to extend the maturity of the Fund. As a result, the Fund was
managed with a shorter maturity than average. At 6/30/98 the Working Assets
Money Market Fund had a weighted-average maturity of 31 days. The one-year total
return for the Fund's Standard shares was 4.54% and 5.23% for the Institutional
Class.
In the first quarter of 1998, the economy grew at an annualized rate of
5.4%, well above what had been anticipated and well above the traditional
comfort zone of the Fed. The year-over-year figure stands at 3.90%. Job growth
over the past year averaged a healthy 267,000 new jobs per month, bringing the
unemployment rate down to levels not seen in 28 years. Exuberant consumers have
continued to spend, and a robust housing market marches on, despite earlier
indications that it was a result of unusually warm winter weather. This snapshot
of a strong domestic economy has given the Fed ample justification for raising
rates. Yet, despite these strong figures, the Fed has not intervened since March
of 1997. What has kept the Fed out of the picture is the current benign state of
inflation coupled with anticipation of a future slowdown. Low current inflation
and strong productivity suggest that the past seven years of growth, together
with an unusually tight labor market, have not yet strained our economy. The
anticipation of the slowing of our economy as a result of the Asian financial
crisis diminishes the risk of future inflation. As a result the Fed is able to
maintain a wait-and-see approach.
Over the near term, the turmoil in Asia likely will keep the Fed out of the
market. Estimates of growth for the second quarter of 1998 indicate a
significant slowing, primarily as a result of trade. Although the initial impact
has already made its first appearance in our trade figures, it will take some
time to gauge its full impact. Of particular concern is its ability to reduce
pressure on our tight labor market. Going forward, we will continue to monitor
our domestic economy, as well as the Asian situation, for signs that would
prompt a change in Fed policy and will adjust our strategy accordingly.
8
<PAGE>
Citizens Funds
Statement of Investments - June 30, 1998
Working Assets Money Market Fund
<TABLE>
<CAPTION>
Par Amount Security Description Coupon/Yield Maturity Value (a)
($ Denominated) (unaudited) Date (Note 1)
<S> <C> <C> <C> <C>
Certificates of Deposit 1.07%
$1,000,000 Bayerische Vereinsbank AG 5.710% 10/06/98 $ 999,675
100,000 City National Bank of New Jersey 4.880% 03/18/99 100,000
100,000 Independence Federal Savings Bank 5.370% 03/31/99 100,000
100,000 Self Help Credit Union 5.500% 12/17/98 100,000
---------
Total Certificates of Deposit (Cost $1,299,675) 1,299,675
Corporate Notes 0.82%
1,000,000 Banc One Corporation 5.745% 05/17/99 999,451
---------
Total Corporate Notes (Cost $999,451) 999,451
Commercial Paper 92.59%
1,800,000 Abbey National North America 5.510% 07/17/98 1,795,592
1,073,000 Abbey National North America 5.500% 08/10/98 1,066,443
3,000,000 Abbey National North America 5.450% 08/24/98 2,975,475
2,000,000 Air Products and Chemicals Inc. 5.510% 07/31/98 1,990,817
4,648,000 American Express Credit Corporation 5.500% 07/29/98 4,628,117
1,123,000 American Express Credit Corporation 5.500% 07/31/98 1,117,853
2,585,000 American General Finance Corp. 5.620% 07/02/98 2,584,596
2,783,000 American General Finance Corp. 5.500% 08/26/98 2,759,190
1,566,000 Ameritech Capital Funding Corporation 5.480% 07/10/98 1,563,855
2,044,000 Aon Corporation 5.540% 08/06/98 2,032,676
1,000,000 Avnet Incorporated 5.500% 07/08/98 998,931
2,500,000 Avnet Incorporated 5.520% 07/17/98 2,493,867
1,262,000 Avnet Incorporated 5.580% 07/23/98 1,257,697
2,000,000 Banc One Corporation 5.510% 07/31/98 1,990,817
3,200,000 Bank of New York Company Incorporated 5.510% 07/27/98 3,187,266
2,000,000 Bellsouth Telecommunications Inc. 5.500% 08/21/98 1,984,417
1,718,000 Bellsouth Telecommunications Inc. 5.500% 09/11/98 1,699,102
993,000 Block Financial Corporation 5.510% 07/01/98 993,000
2,000,000 Block Financial Corporation 5.520% 08/10/98 1,987,733
1,650,000 Block Financial Corporation 5.520% 09/25/98 1,628,242
2,158,000 Campbell Soup Company 5.500% 07/29/98 2,148,769
3,000,000 Canadian Wheat Board 5.480% 10/29/98 2,945,200
3,000,000 Coca Cola Company 5.500% 07/14/98 2,994,042
1,000,000 Cooperative Association of
Tractor Dealers Incorporated 5.680% 07/09/98 998,738
1,000,000 Cooperative Association of
Tractor Dealers Incorporated 5.550% 07/10/98 998,613
634,000 Cooperative Association of
Tractor Dealers Incorporated 5.530% 07/17/98 632,442
615,000 Cooperative Association of
Tractor Dealers Incorporated 5.540% 07/17/98 613,486
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
1998 Annual Report
Statement of Investments - June 30, 1998
Working Assets Money Market Fund (cont'd.)
<TABLE>
<CAPTION>
Par Amount Security Description Coupon/Yield Maturity Value (a)
($ Denominated) (unaudited) Date (Note 1)
<S> <C> <C> <C> <C>
$1,209,000 Cooperative Association of
Tractor Dealers Incorporated 5.600% 07/20/98 $ 1,205,427
1,491,000 Cooperative Association of
Tractor Dealers Incorporated 5.540% 08/11/98 1,481,593
2,000,000 Countrywide Home Loans Incorporated 5.630% 07/02/98 1,999,687
2,031,000 Countrywide Home Loans Incorporated 5.600% 07/06/98 2,029,420
2,500,000 First Data Corporation 5.520% 07/21/98 2,492,333
3,000,000 H. J. Heinz Company 5.480% 07/08/98 2,996,803
1,265,000 Hasbro Incorporated 5.630% 07/07/98 1,263,813
1,931,000 Hasbro Incorporated 5.550% 08/03/98 1,921,176
1,315,000 Hershey Foods Corporation 5.500% 07/15/98 1,312,187
2,000,000 Hershey Foods Corporation 5.530% 07/20/98 1,994,163
1,200,000 Idaho Power Company 5.510% 07/10/98 1,198,347
1,500,000 Idaho Power Company 5.570% 07/16/98 1,496,519
969,000 John Hancock Capital Corporation 5.500% 07/02/98 968,852
1,349,000 Kellogg Company 5.510% 07/21/98 1,344,871
1,415,000 Kellogg Company 5.550% 07/28/98 1,409,110
2,000,000 Lehman Brothers Holdings Incorporated 5.540% 07/13/98 1,996,307
2,138,000 Lehman Brothers Incorporated 5.540% 07/28/98 2,129,117
500,000 Lehman Brothers Incorporated 7.625% 08/01/98 500,602
1,376,000 Lehman Brothers Incorporated 5.550% 07/13/98 1,373,454
4,131,000 Mid States Corporate Federal Credit Union 5.550% 07/13/98 4,123,358
2,463,000 Nationwide Building Society 5.500% 08/07/98 2,449,077
1,887,000 Nationwide Building Society 5.520% 08/07/98 1,876,294
1,650,000 Nationwide Building Society 5.510% 09/23/98 1,628,780
3,022,000 Sears Roebuck Acceptance Corporation 5.580% 07/06/98 3,019,658
2,500,000 Sears Roebuck Acceptance Corporation 5.500% 07/29/98 2,489,306
100,000 South Shore Bank of Chicago 5.550% 12/18/98 100,000
1,613,000 Southern California Gas Company 5.510% 08/25/98 1,599,422
3,668,000 Stanley Works 5.510% 07/28/98 3,652,842
1,064,000 Times Mirror Company 5.550% 07/16/98 1,061,540
5,081,000 US West Communications Incorporated 6.100% 07/01/98 5,081,000
2,494,000 Xerox Credit Corporation 5.520% 07/09/98 2,490,941
-----------
Total Commercial Paper (Cost $112,752,975) 112,752,975
U.S. GOVERNMENT AGENCIES 3.29%
Farmers Home Administration 0.12%
147,745 Variable Rate Notes 7.125% 08/01/26-
12/01/26 147,745(b)
-----------
147,745
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
Citizens Funds
Statement of Investments - June 30, 1998
Working Assets Money Market Fund (cont'd.)
<TABLE>
<CAPTION>
Par Amount Security Description Coupon/Yield Maturity Value (a)
($ Denominated) (unaudited) Date (Note 1)
<S> <C> <C> <C> <C>
Small Business Administration 3.17%
$ 103,677 Variable Rate Note 8.375% 11/25/04 $ 106,175(b)
2,686,665 Variable Rate Notes 7.000% 11/25/01-
12/15/15 2,688,852(b)
1,063,258 Variable Rate Note 6.875% 06/25/16 1,064,680(b)
------------
3,859,707
------------
Total U.S. Government Agencies (Cost $4,007,452) 4,007,452
------------
Total Investments (Cost $119,059,553) (c) 97.77% 119,059,553
Other assets, less liabilities 2.23% 2,716,032
------------
Net Assets 100.00% $121,775,585
============
</TABLE>
(a) Investments are valued using the amortized cost method.
(b) The coupon rate shown on floating rate notes represents the rate at period
end. Rates reset every seven to 90 days.
(c) Book cost and tax cost are equal.
<TABLE>
<CAPTION>
Citizens Income Fund
Par Amount Security Description Coupon Maturity Value
($ Denominated) Date (Note 1)
<S> <C> <C> <C> <C>
CORPORATE BONDS 72.68%
Commercial Services 5.57%
$1,000,000 CEX Holdings Incorporated 9.625% 06/01/08 $1,025,000
900,000 Federal Express Corporation 6.720% 01/15/22 900,000
900,000 United Rentals Incorporated 9.500% 06/01/08 938,250
----------
2,863,250
Finance & Insurance 22.84%
1,320,000 Abbey National PLC 7.350% 10/29/49 1,399,411
680,000 Abbey National PLC 6.700% 06/29/49 684,678
250,000 Countrywide Capital 8.000% 12/15/26 265,815
781,225 DLJ Mortgage Acceptance Corporation 6.620% 05/25/09 776,586
100,000 First Chicago NBD Bancorp 7.250% 08/15/04 105,689
1,250,000 First Republic Bancorp 7.750% 09/15/12 1,304,888
750,000 First Union Lehman Brothers
Mortgage Trust 6.650% 12/18/07 768,330
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
1998 Annual Report
Statement of Investments - June 30, 1998
Citizens Income Fund (cont'd.)
<TABLE>
<CAPTION>
Par Amount Security Description Coupon Maturity Value
($ Denominated) Date (Note 1)
<S> <C> <C> <C> <C>
$ 500,000 Keycorp Institutional Capital 7.826% 12/01/26 $ 544,075
650,000 Lehman Brothers Holdings 7.730% 10/15/23 714,045
700,000 Lehman Brothers Holdings 8.050% 01/15/19 800,233
800,000 Lehman Brothers Incorporated 7.360% 12/15/03 836,512
50,000 MBIA Incorporated 9.000% 02/15/01 53,505
1,500,000 Morgan Stanley Capital Incorporated 6.550% 12/15/07 1,542,570
1,000,000 Secured Finance Incorporated 9.050% 12/15/04 1,153,790
750,000 Williams Scotsman Incorporated 9.875% 06/01/07 781,874
----------
11,732,001
Health Care 7.65%
1,000,000 Healthsouth Corporation 6.875% 06/15/05 1,000,980
50,000 Kaiser Foundation Hospital 9.000% 11/01/01 54,400
1,000,000 Physician Sales & Service Incorporated 8.500% 10/01/07 1,027,500
250,000 Quorum Health Group Incorporated 8.750% 11/01/05 257,812
1,500,000 Universal Health Services 8.750% 08/15/05 1,586,250
----------
3,926,942
Hotels 3.04%
1,550,000 John Q. Hammons Hotels 8.875% 02/15/04 1,561,625
----------
1,561,625
Media 13.63%
1,000,000 Capstar Broadcasting 9.250% 07/01/07 1,045,000
1,000,000 Chancellor Media Corporation 8.750% 06/15/07 1,040,000
750,000 Jones Intercable Incorporated 7.625% 04/15/08 761,250
500,000 Jones Intercable Incorporated 9.625% 03/15/02 539,375
500,000 Rogers Communications 9.125% 01/15/06 507,500
750,000 Sullivan Broadcasting 10.250% 12/15/05 855,938
1,400,000 Time Warner Incorporated 9.125% 01/15/13 1,719,102
500,000 Turner Broadcasting 8.400% 02/01/24 534,845
----------
7,003,010
Real Estate 15.92%
1,000,000 EOP Operating Limited Partnership 6.750% 02/15/08 1,010,080
750,000 ERP Operating Limited Partnership 8.500% 05/15/99 763,685
1,300,000 ERP Operating Limited Partnership 7.570% 08/15/26 1,383,213
1,100,000 Felcor Suites Limited Partnership 7.625% 10/01/07 1,094,687
1,000,000 Property Trust Of America 6.875% 02/15/08 1,034,740
500,000 Security Capital Pacific Trust 7.900% 02/15/16 542,820
1,000,000 US Home Corporation 7.950% 03/01/01 1,002,500
1,300,000 Weingarten Realty Investors 6.880% 06/25/27 1,343,445
----------
8,175,170
Retail 1.54%
750,000 Fred Meyer Incorporated 8.640% 07/02/12 790,778
----------
790,778
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
Citizens Funds
Statement of Investments - June 30, 1998
Citizens Income Fund (cont'd.)
<TABLE>
<CAPTION>
Par Amount Security Description Coupon Maturity Value
($ Denominated) Date (Note 1)
<S> <C> <C> <C> <C>
Telecommunications Equipment & Services 2.49%
$1,200,000 Worldcom Incorporated 9.375% 01/15/04 $ 1,276,500
-----------
1,276,500
-----------
Total Corporate Bonds Cost ($36,990,291) 37,329,276
Number of Shares
CONVERTIBLE PREFERRED STOCK 3.65%
Computers & Software 2.78%
15,000 Microsoft Corporation-Convertible into common shares
or exchangeable into subordinated notes 1,426,875
-----------
1,426,875
Real Estate 0.87%
10,000 Equity Office Properties Trust-144A
Callable into common stock 446,250
-----------
446,250
-----------
Total Convertible Preferred Stock (Cost $1,786,250) 1,873,125
Number of Warrants
WARRANT 0.04%
750 MVE Holding Incorporated 2/15/02 22,500
-----------
Total Warrants (Cost $0) 22,500
</TABLE>
<TABLE>
<CAPTION>
Par Amount Security Description Coupon Maturity Value
($ Denominated) Date (Note 1)
U.S. GOVERNMENT AGENCIES 21.81%
<S> <C> <C> <C> <C>
Fannie Mae 14.40%
5,150,000 Fannie Mae 0.000% 10/09/19 1,467,390
1,000,000 Fannie Mae 5.375% 04/13/00 982,490
1,000,000 Fannie Mae 6.330% 10/02/02 1,010,720
600,000 Fannie Mae 5.830% 12/10/99 601,200
2,245,509 Fannie Mae - REMIC 8.000% 11/25/02- 2,293,826
07/25/06
600,000 Fannie Mae - REMIC 7.000% 04/25/21 607,865
429,174 Fannie Mae - REMIC 9.000% 02/25/20 432,470
-----------
7,395,961
Freddie Mac 4.74%
2,000,000 Freddie Mac 7.000% 09/04/07 2,001,840
298,827 Freddie Mac 8.750% 06/15/05 301,788
129,984 Freddie Mac 6.800% 04/15/18 129,817
-----------
2,433,445
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
1998 Annual Report
Statement of Investments - June 30, 1998
Citizens Income Fund (cont'd.)
<TABLE>
<CAPTION>
Par Amount Security Description Coupon Maturity Value
($ Denominated) Date (Note 1)
<S> <C> <C> <C> <C>
Government National Mortgage Association 2.67%
$ 629,650 Government National 7.000% 04/15/07- $ 640,045
Mortgage Association 06/15/23
136,543 Government National
Mortgage Association 6.000% 08/15/08 135,955
238,370 Government National 9.000% 05/15/09- 253,750
Mortgage Association 10/15/21
221,390 Government National 8.000% 12/15/21- 228,956
Mortgage Association 09/15/22
76,664 Government National 9.500% 03/15/17- 82,323
Mortgage Association 09/15/17
29,318 Government National 8.500% 03/15/21- 30,786
Mortgage Association 06/15/21
1,371,815
-----------
Total U.S. Government Agencies (Cost $9,708,362) 11,201,221
Short-Term Investments 4.66%
Repurchase Agreement with State
Street Bank & Trust Co. Dated 6/30/98
due 7/1/98 collateralized by $200,000
Federal Home Loan Bank, 5.860% due
11/07/00 (Market value of collateral
is $202,258) 5.080% 07/01/98 196,000
200,000 Federal Home Loan Bank Discount Note 5.500% 07/01/98 200,000
2,000,000 Freddie Mac 5.420% 07/01/98 2,000,000
-----------
Total Short-Term Investments (Cost $2,396,000) 2,396,000
-----------
Total Investments (Cost $50,880,903) (a) 102.84% 52,822,122
Liabilities in excess of other assets (2.84%) (1,456,513)
-----------
Net Assets 100.00% $51,365,609
===========
</TABLE>
(a) For Federal income tax purposes, cost is $50,882,761 and appreciation
(depreciation) is as follows:
Unrealized appreciation: $2,053,825
Unrealized depreciation: (114,464)
----------------------------------------------------------
Net unrealized appreciation: $1,939,361
See accompanying notes to financial statements.
14
<PAGE>
Citizens Funds
Statement of Investments - June 30, 1998
Citizens Index Fund
<TABLE>
<CAPTION>
Number of Shares Security Description Value (Note 1)
(% of net assets)
EQUITIES 99.49%
<S> <C> <C>
Apparel & Textiles 0.39%
5,600 Interface Incorporated $ 113,050
7,200 Liz Claiborne Incorporated 376,200
5,900 Reebok International Limited 163,356(b)
3,900 Russell Corporation 117,731
1,900 Springs Industries Incorporated 87,638
4,600 Stride Rite Corporation 69,288
4,000 Tommy Hilfiger Corporation 250,000(b)
6,300 Warnaco Group 267,356
---------
1,444,619
Auto Parts & Equipment 0.36%
2,000 Bandag Incorporated 78,000
8,400 Cooper Tire & Rubber 173,250
5,600 Federal Mogul Corporation 378,000
19,200 Genuine Parts Company 663,600
1,500 Standard Products Company 42,188
---------
1,335,038
Chemicals 0.78%
25,400 Air Products & Chemicals Incorporated 1,016,000
2,700 BetzDearborn Incorporated 111,713
15,750 Engelhard Corporation 318,938
6,600 Nalco Chemical Company 231,825
17,000 Praxair Incorporated 795,813
10,400 Sigma-Aldrich 365,300
3,000 Wellman Incorporated 68,061
---------
2,907,650
Commercial Services & Equipment 3.39%
12,100 AccuStaff Incorporated 378,125(b)
5,933 ACNielsen Corporation 149,808(b)
93,843 Cendant Corporation 1,958,973(b)
17,400 Cognizant Corporation 1,096,200(b)
8,200 Deluxe Corporation 293,663
18,300 Dun & Bradstreet Corporation 661,088(b)
15,800 Equifax Incorporated 573,738
17,680 FDX Corporation 1,109,420(b)
10,900 H & R Block Incorporated 459,163
9,600 Herman Miller Incorporated 233,400
31,200 Pitney Bowes Incorporated 1,501,500
4,500 Trigon Healthcare Incorporated 162,844(b)
10,400 Viad Corporation 288,600
37,100 Xerox Corporation 3,770,285
---------
12,636,807
</TABLE>
See accompanying notes to financial statements.
15
<PAGE>
1998 Annual Report
Statement of Investments - June 30, 1998
<TABLE>
<CAPTION>
Citizens Index Fund (cont'd.)
Number of Shares Security Description Value (Note 1)
(% of net assets)
<S> <C> <C>
Computers & Technology 21.71%
38,650 3Com Corporation $ 1,186,072(b)
7,300 Adobe Systems Incorporated 309,794
23,800 America Online Incorporated 2,522,800(b)
14,500 Apple Computer Incorporated 415,969(b)
20,600 Ascend Communications Incorporated 1,020,988(b)
4,800 Autodesk Incorporated 185,400
32,900 Automatic Data Processing 2,397,588
113,450 Cisco Systems Incorporated 10,444,491(b)
182,085 Compaq Computer Corporation 5,166,662
60,012 Computer Associates International Incorporated 3,334,417
73,200 Dell Computer Corporation 6,793,875(b)
1,500 Dialogic Corporation 44,625(b)
54,400 EMC Corporation 2,437,800(b)
49,200 First Data Corporation 1,638,975
16,700 Gateway 2000 Incorporated 845,438(b)
47,400 HBO & Company 1,670,850
114,900 Hewlett-Packard Company 6,879,638
271,900 Microsoft Corporation 29,467,163(b)
11,974 Network Associates Incorporated 573,255(b)
38,600 Novell Incorporated 492,150(b)
29,800 Parametric Technology Corporation 808,325(b)
2,900 Shared Medical Systems Corporation 212,969
20,100 Silicon Graphics Incorporated 243,713(b)
2,100 Stratus Computer Incorporated 53,153(b)
41,600 Sun Microsystems Incorporated 1,807,000(b)
8,600 Sybase Incorporated 59,930(b)
----------
81,013,040
Construction & Housing 0.56%
2,600 Apogee Enterprises Incorporated 39,813
4,100 Armstrong World Inds Incorporated 276,238
6,100 Centex Corporation 230,275
11,600 Fedders Corporation 77,575
3,500 Fleetwood Enterprises 140,000
18,800 Masco Corporation 1,137,400
4,200 Pulte Corporation 125,474
1,600 TJ International Incorporated 48,200
----------
2,074,975
Consumer Durables 0.31%
1,755 Harman International 67,568
9,900 Maytag Corporation 488,813
1,100 Toro Company 37,674
8,100 Whirlpool Corporation 556,875
----------
1,150,930
</TABLE>
See accompanying notes to financial statements.
16
<PAGE>
Citizens Funds
Statement of Investments - June 30, 1998
Citizens Index Fund (cont'd.)
<TABLE>
<CAPTION>
Number of Shares Security Description Value (Note 1)
(% of net assets)
<S> <C> <C>
Consumer Products-Miscellaneous 0.55%
7,800 American Greetings Corporation $ 397,313
12,900 Avery Dennison Corporation 693,375
2,800 John H. Harland Company 47,425
3,800 Jostens Incorporated 90,725
9,200 Moore Corporation Limited 121,900
300 Real Goods Trading Corporation 1,575(b)
16,100 Rubbermaid Incorporated 534,319
6,300 Tupperware Corporation 177,187
----------
2,063,819
Electronics 5.06%
15,500 Advanced Micro Devices 264,469(b)
9,600 Altera Corporation 283,800(b)
9,900 American Power Conversion 297,000(b)
23,700 AMP Incorporated 814,688
4,100 Avnet Incorporated 224,219
2,400 Belden Incorporated 73,500
2,600 BMC Industries Incorporated 22,750
3,900 C-Cube Microsystems Incorporated 72,394(b)
2,600 Cymer Incorporated 41,925(b)
2,200 Dionex Corporation 58,025(b)
3,475 General Semiconductor Incorporated 34,316(b)
5,300 General Signal Corporation 190,800
186,900 Intel Corporation 13,853,963
8,700 KLA-Tencor Corporation 240,881(b)
15,200 LSI Logic Corporation 350,550(b)
22,700 Micron Technology Incorporated 563,244(b)
4,700 Millipore Corporation 128,075
16,760 Molex Incorporated 419,000
4,900 Perkin-Elmer Corporation 304,719
2,000 Tecumseh Products Company 105,625
5,250 Tektronix Incorporated 185,719
5,500 Thomas & Betts Corporation 270,875
4,500 VLSI Technology Incorporated 75,513(b)
----------
18,876,050
Energy & Utilities 1.72%
19,200 AES Corporation 1,009,200(b)
8,500 American Water Works Incorporated 263,500
8,500 Calenergy Company Incorporated 255,531(b)
10,600 Consolidated Natural Gas Company 624,075
12,600 El Paso Natural Gas 481,950
71,429 Energia Global International Limited 405,002(b)(c)
3,500 Idaho Power Company 121,188
8,400 MCN Energy Group Incorporated 208,950
5,200 Nicor Incorporated 208,650
</TABLE>
See accompanying notes to financial statements.
17
<PAGE>
1998 Annual Report
Statement of Investments - June 30, 1998
Citizens Index Fund (cont'd.)
<TABLE>
<CAPTION>
Number of Shares Security Description Value (Note 1)
(% of net assets)
<S> <C> <C>
3,100 ONEOK Incorporated $ 123,613
3,300 Peoples Energy Corporation 127,463
2,400 Philadelphia Suburban Corporation 52,500
11,800 Sonat Incorporated 455,775
40,000 Vulcan Power Company 0(b)(c)
5,700 Western Atlas Incorporated 483,788(b)
46,700 Williams Companies Incorporated 1,576,125
1,000 Yankee Energy System Incorporated 24,624
----------
6,421,934
Environmental Control 0.02%
1,700 IMCO Recycling Incorporated 31,450
1,500 Ionics Incorporated 55,313(b)
----------
86,763
Finance & Insurance 19.04%
9,950 A.G. Edwards Incorporated 424,741
51,200 American Express Company 5,836,800
27,686 American General Corporation 1,970,897
18,300 Aon Corporation 1,285,575
41,100 Bank of New York Company Incorporated 2,494,256
32,400 BankBoston Corporation 1,802,250
10,700 Bankers Trust Corporation 1,241,869
15,400 BB&T Corporation 1,041,425
6,100 Beneficial Corporation 934,444
28,550 Charles Schwab Corporation 927,875
18,300 Chubb Corporation 1,470,863
16,950 Comerica Incorporated 1,122,938
12,000 Countrywide Credit Industries Incorporated 609,000
117,100 Fannie Mae 7,113,825
32,084 First Chicago NBD Corporation 2,843,445
76,700 Freddie Mac 3,609,694
8,500 General Re Corporation 2,154,750
6,200 Golden West Financial Corporation 659,138
14,600 Green Tree Financial Corporation 625,063
11,800 H.F. Ahmanson & Company 837,800
21,200 Huntington Bancshares 709,945
11,550 Jefferson-Pilot Corporation 669,178
48,300 KeyCorp 1,720,688
11,700 Marshall & Ilsley Corporation 625,300
10,600 MBIA Incorporated 793,675
54,875 MBNA Corporation 1,810,875
28,300 Mellon Bank Corporation 1,970,388
14,700 Mercantile Bancorporation 738,550
12,600 MGIC Investment Corporation 718,988
35,900 National City Corporation 2,548,900
</TABLE>
See accompanying notes to financial statements.
18
<PAGE>
Citizens Funds
Statement of Investments - June 30, 1998
Citizens Index Fund (cont'd.)
<TABLE>
<CAPTION>
Number of Shares Security Description Value (Note 1)
(% of net assets)
<S> <C> <C>
12,300 Northern Trust Corporation $ 936,414
83,200 Norwest Corporation 3,109,600
33,400 PNC Bank Corporation 1,797,338
8,000 Progressive Corporation 1,175,455
10,400 Providian Financial Corporation 817,050
10,000 Reliastar Financial Corporation 479,034
15,200 Safeco Corporation 690,650
25,844 St. Paul Companies 1,087,063
17,300 State Street Corporation 1,202,350
21,000 SunAmerica Incorporated 1,206,188
23,800 SunTrust Banks Incorporated 1,935,238
28,200 Synovus Financial Corporation 669,750
15,000 UNUM Corporation 832,500
23,200 Wachovia Corporation 1,960,400
42,510 Washington Mutual Incorporated 1,846,522
----------
71,058,687
Food & Beverages 10.69%
4,200 Ben & Jerry's Homemade 81,375(b)
31,800 Bestfoods 1,846,388
7,800 Bruno's Incorporated 8,166(b)
50,100 Campbell Soup Company 2,661,563
400 Celestial Seasonings Incorporated 19,800(b)
272,600 Coca Cola Company 23,307,300
3,500 Fleming Companies Incorporated 61,469
800 Gardenburger Incorporated 9,300(b)
17,000 General Mills Incorporated 1,162,375
6,200 Giant Foods Incorporated 265,534
3,600 Great Atlantic & Pacific Tea Company 119,025
40,300 H.J. Heinz Company 2,261,838
4,500 Hannaford Brothers Company 198,000
15,500 Hershey Foods Corporation 1,069,500
3,100 J.M. Smucker Company 76,919(b)
45,200 Kellogg Company 1,697,825
28,200 Kroger Company 1,209,075(b)
14,900 Quaker Oats Company 818,569
6,100 SUPERVALU Incorporated 270,688
37,400 Sysco Corporation 958,375
2,068 Tootsie Roll Industries 158,719
10,500 Whitman Corporation 240,844
2,300 Whole Foods Market Incorporated 139,150(b)
12,500 Wm. Wrigley Jr. Company 1,225,000
1,021 Worthington Foods Incorporated 21,374
----------
39,888,171
</TABLE>
See accompanying notes to financial statements.
19
<PAGE>
1998 Annual Report
Statement of Investments - June 30, 1998
Citizens Index Fund (cont'd.)
<TABLE>
Number of Shares Security Description Value (Note 1)
(% of net assets)
<S> <C> <C>
Forest Products & Paper 0.40%
7,200 Unisource Worldwide Incorporated $ 77,850
2,700 Caraustar Industries Incorporated 77,963
9,400 Consolidated Papers Incorporated 256,150
24,325 Fort James Corporation 1,082,462
----------
1,494,425
Health Care & Personal Care 2.39%
14,300 Avon Products Incorporated 1,108,250
12,000 Biomet Incorporated 396,750
16,300 Guidant Corporation 1,162,394
43,300 Healthsouth Corporation 1,155,569(b)
3,500 Idexx Laboratories Incorporated 87,063(b)
3,100 Invacare Corporation 79,438
52,400 Medtronic Incorporated 3,340,500
1,550 Natures Sunshine Products Incorporated 34,972
3,000 Owens & Minor Incorporated Holding Company 30,000
8,500 Oxford Health Plans 130,156(b)
3,100 Sofamor Danek Group Incorporated 268,344(b)
9,200 St Jude Medical Incorporated 338,675(b)
5,300 Sun Healthcare Group Incorporated 77,513(b)
3,000 Universal Health Services 175,123(b)
7,200 Wellpoint Health Networks 532,800(b)
----------
8,917,547
Machines & Tools 0.75%
8,100 Case Corporation 390,825
3,800 Cincinnati Milacron Incorporated 92,388
26,900 Deere & Company 1,422,338
2,700 IDEX Corporation 93,150
1,500 Nordson Corporation 70,500
6,100 Snap-On Incorporated 221,125
1,400 SPX Corporation 90,125(b)
9,300 Stanley Works 386,531
900 Tennant Company 39,824
----------
2,806,806
Media 4.24%
40,700 Comcast Corporation 1,652,166
10,400 Dow Jones & Co Incorporated 579,800
7,500 King World Productions Incorporated 191,250(b)
10,800 McGraw-Hill Companies Incorporated 880,875
67,300 MediaOne Group Incorporated 2,956,994(b)
5,500 Meredith Corporation 258,156
10,500 New York Times Company 832,125
65,450 Time Warner Incorporated 5,591,884
</TABLE>
See accompanying notes to financial statements.
20
<PAGE>
Citizens Funds
Statement of Investments - June 30, 1998
Citizens Index Fund (cont'd.)
<TABLE>
<CAPTION>
Number of Shares Security Description Value (Note 1)
(% of net assets)
<S> <C> <C>
9,400 Times Mirror Company $ 591,025
39,500 Viacom Incorporated 2,300,875(b)
----------
15,835,150
Miscellaneous Manufacturing 0.67%
27,900 Illinois Tool Works 1,860,581
4,200 National Service Industries Incorporated 213,675
4,800 Polaroid Corporation 170,700
8,600 Raychem Corporation 254,238
----------
2,499,194
Pharmaceuticals 3.24%
8,900 ALZA Corporation 384,925(b)
29,300 Amgen Incorporated 1,915,488(b)
5,225 Bergen Brunswig Corporation 242,309
7,700 Biogen Incorporated 377,300(b)
18,800 Chiron Corporation 294,925(b)
1,200 Cyanotech Corporation 3,750(b)
4,900 Dura Pharmaceuticals Incorporated 109,638(b)
13,100 Mylan Laboratories 393,819
3,000 Patterson Dental Company 109,875(b)
2,700 R.P. Scherer Corporation 239,288(b)
82,800 Schering-Plough Corporation 7,586,550
9,100 Watson Pharmaceuticals Incorporated 424,855(b)
----------
12,082,722
Producer Goods 0.31%
5,200 Inland Steel Industries Incorporated 146,575
8,500 Sealed Air Corporation 312,375(b)
10,901 Sonoco Products Company 329,755
6,800 Timken Company 209,525
10,000 Worthington Industries 150,625
----------
1,148,855
Real Estate Investment & Management 0.08%
6,000 Choice Hotels International Incorporated 81,375(b)
7,300 Rouse Company 229,494
----------
310,869
Recreation & Entertainment 0.76%
8,000 Callaway Golf Company 157,500
5,500 Coleman Company Incorporated 63,594(b)
16,400 Harley-Davidson Incorporated 635,500
14,100 Hasbro Incorporated 554,306
2,000 Huffy Corporation 36,250
32,375 Mattel Incorporated 1,369,867
----------
2,817,017
</TABLE>
See accompanying notes to financial statements.
21
<PAGE>
1998 Annual Report
Statement of Investments - June 30, 1998
Citizens Index Fund (cont'd.)
<TABLE>
<CAPTION>
Number of Shares Security Description Value (Note 1)
(% of net assets)
<S> <C> <C>
Retail 6.73%
400 Abercrombie & Fitch Company $ 17,600(b)
7,300 Barnes & Noble Incorporated 273,294(b)
11,800 Charming Shoppes 56,050(b)
23,800 Costco Companies Incorporated 1,500,888(b)
42,400 CVS Corporation 1,650,950
15,600 Darden Restaurants Incorporated 247,650
15,450 Dollar General 611,241
22,600 Federated Department Stores 1,216,163(b)
2,800 Footstar Incorporated 134,400(b)
43,550 Gap Incorporated 2,683,769
2,300 Gymboree Corporation 34,859(b)
7,600 Harcourt General Incorporated 452,200
14,700 Ikon Office Solutions Incorporated 214,069
27,900 J.C. Penney Company 2,017,519
17,000 Kohls Corporation 881,875(b)
29,300 Limited Incorporated 970,563
3,600 Longs Drug Stores Corporation 103,950
37,800 Lowe's Companies 1,533,263
25,500 May Department Stores Company 1,670,250
8,500 Nordstrom Incorporated 656,625
27,700 Rite Aid Corporation 1,040,481
43,500 Sears, Roebuck and Company 2,656,219
9,600 Starbucks Corporation 513,000(b)
11,200 Tandy Corporation 594,300
34,800 TJX Companies Incorporated 839,550
14,500 Venator Group Incorporated 277,313(b)
54,300 Walgreen Company 2,243,265
----------
25,091,306
Telecommunications Equipment & Services 15.14%
14,300 ADC Telecommunications Incorporated 522,397(b)
63,700 Airtouch Communications Incorporated 3,722,469(b)
19,800 Alltel Corporation 920,700
121,700 Ameritech Corporation 5,461,288
175,200 Bell Atlantic Corporation 7,993,500
109,700 Bellsouth Corporation 7,363,613
146,000 Lucent Technologies Incorporated 12,145,375
10,000 OneWorld Systems Incorporated 6,250(b)
7,400 Qualcomm Incorporated 415,788(b)
204,118 SBC Communications Incorporated 8,164,720
5,600 Skytel Communications Incorporated 131,075(b)
20,100 Tellabs Incorporated 1,439,663(b)
57,137 US West Incorporated 2,685,437
113,900 Worldcom Incorporated 5,517,031(b)
----------
56,489,306
</TABLE>
See accompanying notes to financial statements.
22
<PAGE>
Citizens Funds
Statement of Investments - June 30, 1998
Citizens Index Fund (cont'd.)
<TABLE>
<CAPTION>
Number of Shares Security Description Value (Note 1)
(% of net assets)
<S> <C> <C>
Transportation 0.20%
1,700 Roadway Express Incorporated $ 32,088
23,650 Southwest Airlines 700,630
-----------
732,718
-----------
Total Equities (Cost $215,523,989) 371,184,398
Short-Term Investments 0.54%
Repurchase Agreement with State Street Bank & Trust Co. 2,019,000
Dated 6/30/98 due 7/1/98 collateralized by $2,025,000
Federal Home Loan Bank, 5.700% due 02/18/00 (Market value
of collateral $2,063,993) (cost $2,019,000)
-----------
Total Investments (Cost $217,542,989) 100.03% (a) 373,203,398
Liabilities in excess of other assets (0.03%) (134,598)
-----------
Net Assets 100.00% $373,068,800
===========
</TABLE>
(a) Book cost and tax cost are equal.
(b) Non-income producing security.
(c) On June 30, 1998, the Fund owned the following restricted securities
constituting 0.11% of net assets which may not be publicly sold without
registration under the Securities Act of 1933. These securities are valued
at fair value as determined by the Board of Trustees. Additional
information on the securities is as follows:
<TABLE>
<CAPTION>
Description Acquisition Date Cost Value
----------- ---------------- ---- -----
<S> <C> <C> <C>
Energia Global Series A Conv. Pfd. April 1, 1993 $250,000 $405,002
Vulcan Power Co., Class A June 1, 1993 $300,000 $ -
</TABLE>
Citizens Emerging Growth Fund
<TABLE>
<CAPTION>
Number of Shares Security Description Value (Note 1)
(% of net assets)
EQUITIES 89.09%
Building Materials 1.79%
<S> <C>
160,000 Dal-Tile International Incorporated $1,570,000(b)
----------
1,570,000
</TABLE>
See accompanying notes to financial statements.
23
<PAGE>
1998 Annual Report
Statement of Investments - June 30, 1998
Citizens Emerging Growth Fund (cont'd.)
<TABLE>
<CAPTION>
Number of Shares Security Description Value (Note 1)
(% of net assets)
<S> <C> <C>
Computers & Software 33.17%
35,220 America Online Incorporated $3,733,320(b)
50,000 Ascend Communications Incorporated 2,478,125(b)
50,000 Avid Technology Incorporated 1,675,000(b)
56,280 Computer Horizons Corporation 2,085,878(b)
55,800 Compuware Corporation 2,852,775(b)
20,070 Dell Computer Corporation 1,862,747(b)
65,740 Documentum Incorporated 3,155,520(b)
48,880 EMC Corporation 2,190,435(b)
55,000 HNC Software 2,244,688(b)
41,910 Saville Systems PLC (ADR) 2,100,738(b)
48,430 Veritas Software Corporation 2,003,790(b)
58,000 Visio Corporation 2,769,500(b)
----------
29,152,516
Electronics 3.96%
55,000 Altera Corporation 1,625,937(b)
65,240 Micron Technology Incorporated 1,618,768(b)
5,060 PMC - Sierra Incorporated 237,188(b)
----------
3,481,893
Finance & Insurance 12.18%
50,000 Annuity and Life Re Holdings Limited 1,106,250(b)
36,015 Comerica Incorporated 2,385,994
30,000 Northern Trust Corporation 2,287,500
24,500 Providian Financial Corporation 1,924,781
52,300 SunAmerica Incorporated 3,003,981
----------
10,708,506
Forest Products & Paper 2.64%
52,120 Fort James Corporation 2,319,340
----------
2,319,340
Health Care 8.88%
25,000 Guidant Corporation 1,782,813
81,630 Ocular Sciences Incorporated 2,652,975(b)
25,000 Quorum Health Group Incorporated 662,500(b)
31,280 Sofamor Danek Group Incorporated 2,707,675(b)
----------
7,805,963
Home Furnishings 0.57%
10,000 Ethan Allen Interiors Incorporated 499,375
----------
499,375
Media 3.46%
61,180 Chancellor Media Corporation 3,037,969(b)
----------
3,037,969
Office Equipment & Services 2.75%
99,500 Miller (Herman) Incorporated 2,419,094
----------
2,419,094
</TABLE>
See accompanying notes to financial statements.
24
<PAGE>
Citizens Funds
Statement of Investments - June 30, 1998
Citizens Emerging Growth Fund (cont'd.)
<TABLE>
<CAPTION>
Number of Shares Security Description Value (Note 1)
(% of net assets)
<S> <C> <C>
Pharmaceuticals 7.47%
44,270 McKesson Corporation $3,596,937
98,860 Mylan Laboratories 2,971,979
-----------
6,568,916
Recreation & Entertainment 3.44%
45,400 Premier Parks Incorporated 3,024,775 (b)
-----------
3,024,775
Retail 3.79%
138,180 TJX Companies Incorporated 3,333,593
-----------
3,333,593
Telecommunications Equipment & Services 4.99%
33,500 Advanced Radio Telecom Corporation 330,813 (b)
117,200 Amdocs Limited 1,772,650 (b)
31,800 Tellabs Incorporated 2,277,675 (b)
-----------
4,381,138
-----------
Total Equities (Cost $64,254,574) 78,303,078
Short-Term Investments 7.98%
Repurchase Agreement with State Street Bank & Trust 7,012,000
Co. Dated 6/30/98 due 7/1/98 collateralized by $7,060,000
Federal Home Loan Bank, 5.705% due 3/23/00 (Market value
of collateral is $7,156,115) (cost $7,012,000)
-----------
Total Investments 97.07% (Cost $71,266,574) (a) 85,315,078
-----------
Other assets, less liabilities 2.93% 2,576,480
-----------
Net Assets 100.00% $87,891,558
===========
</TABLE>
(a) For Federal income tax purposes, cost is $71,294,203 and appreciation
(depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $15,561,146
Unrealized depreciation: (1,540,271)
-----------------------------------------------------------------
Net Unrealized appreciation: $14,020,875
</TABLE>
(b) Non-income producing security.
Abbreviations:
ADR - American Depository Receipt
See accompanying notes to financial statements.
25
<PAGE>
1998 Annual Report
Statement of Investments - June 30, 1998
Citizens Global Equity Fund
<TABLE>
<CAPTION>
Number of Shares Security Description Value (Note 1)
(% of net assets)
EQUITIES 87.85%
<S> <C> <C>
Belgium 1.46%
1,600 Real Software (Computers & Software) $ 718,086
---------
718,086
Brazil 2.57%
2,700,000 Telecomunicacoes de Sao Paulo S.A (Preferred)
(Telecommunications) 634,960
2,700,000 Telesp Celular S.A. (Preferred) (Telecommunications) 224,103
13,800 Unibanco (GDR) (Finance & Insurance) 407,100
---------
1,266,163
Finland 6.26%
85,000 Merita PLC (Finance & Insurance) 560,832
19,400 Nokia Corporation (ADR) (Telecommunications) 1,407,713
23,300 Sampo Insurance Company (Finance & Insurance) 1,104,168
---------
3,072,713
France 4.22%
6,600 Axa - UAP (Finance & Insurance) 742,306
4,000 Canal Plus (Media) 747,598
5,000 Omnicom (Telecommunications) 583,854 (b)
---------
2,073,758
Germany 7.23%
52 Allianz AG RT (Finance & Insurance) 17,184 (b)
1,800 Allianz AG REG 599,823
9,000 Deutsche Bank AG (Finance & Insurance) 760,872
15,000 Dresdner Bank AG (Finance & Insurance) 810,234
2,000 SAP AG (Preferred) (Computers & Software) 1,357,315
---------
3,545,428
Ireland 3.08%
46,775 Bank of Ireland (Finance & Insurance) 955,813
60,000 Irish Life PLC (Finance & Insurance) 552,354
---------
1,508,167
Italy 8.85%
25,520 Assicurazioni Generali (Finance & Insurance) 829,826
55,000 Istituto Bancario San Paolo di Torino (Finance & Insurance) 793,649
320,000 Istituto Nazionale delle Assicurazioni (Finance & Insurance) 909,116
480,000 Olivetti SpA (Telecommunications) 714,241 (b)
148,333 Telecom Italia SpA (Telecommunications) 1,091,917
---------
4,338,749
Japan 4.73%
16,000 Canon Incorporated (Office/Business Equipment) 363,152
620 Familymart Company Limited (Retail) 23,587
</TABLE>
See accompanying notes to financial statements.
26
<PAGE>
Citizens Funds
Statement of Investments - June 30, 1998
Citizens Global Equity Fund (cont'd.)
<TABLE>
<CAPTION>
Number of Shares Security Description Value (Note 1)
(% of net assets)
<S> <C> <C>
18,000 Fuji Photo Film Company (Miscellaneous
Manufacturing) $ 626,437
6,000 Ito-Yokado Company Limited (Retail) 282,307
46,000 NEC Corporation (Electronics) 428,562
4,400 Nichiei Company Limited (Finance & Insurance) 299,283
4,000 TDK Corporation (Computers & Software) 295,421
---------
2,318,749
Mexico 1.40%
112,000 Grupo Continental S.A (Food & Beverages) 373,913
280,000 Grupo Financiero Banorte (Finance & Insurance) 311,595(b)
---------
685,508
Netherlands 2.54%
8,065 Aegon N.V. (Finance & Insurance) 701,745
16,000 Unique International N.V. (Commercial Services) 542,714
---------
1,244,459
Norway 1.63%
90,000 Storebrand ASA (Finance & Insurance) 797,546(b)
---------
797,546
Portugal 1.43%
13,500 Banco Comercial Portugues (Finance & Insurance) 383,323
6,000 Portugal Telecom S.A (Telecommunications) 317,995
---------
701,318
Spain 4.79%
23,200 ACS Actividades (Engineering & Construction) 697,863
39,000 Banco Santander S.A. (Finance & Insurance) 999,902
30,000 Superdiplo S.A. (Retail) 650,598(b)
---------
2,348,363
Switzerland 4.95%
3,200 Credit Suisse Group (Finance & Insurance) 712,020
2,550 UBS AG (Finance & Insurance) 948,173
1,200 Zuerich Versicherungs (Finance & Insurance) 765,816
---------
2,426,009
United Kingdom 8.33%
57,745 Lloyds TSB Group PLC (Finance & Insurance) 807,874
120,000 Orange PLC (Telecommunications) 1,271,396(b)
49,000 United Utilities PLC (Energy & Utilities) 712,508
56,000 Vodafone Group PLC (Telecommunications) 710,580
89,000 WPP Group PLC (Advertising) 583,220
---------
4,085,578
United States 24.38%
12,600 Air Products & Chemicals Incorporated (Chemicals) 504,000
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
1998 Annual Report
Statement of Investments - June 30, 1998
Citizens Global Equity Fund (cont'd.)
<TABLE>
<CAPTION>
Number of Shares Security Description Value (Note 1)
(% of net assets)
<S> <C> <C>
28,000 AirTouch Communications Incorporated
(Telecommunications) $1,636,250(b)
16,000 Bank of New York Company Incorporated
(Finance & Insurance) 971,000
15,450 Cisco Systems Incorporated (Computers & Software) 1,422,366(b)
15,750 Home Depot Incorporated (Retail) 1,308,234
10,000 Illinois Tool Works (Miscellaneous Manufacturing) 666,875
12,000 Intel Corporation (Electronics) 889,500
12,000 Network Associates Incorporated (Computers & Software) 574,500(b)
15,300 O'Reilly Automotive Incorporated (Retail) 550,800(b)
14,800 Sun Microsystems Incorporated (Computers & Software) 642,875(b)
20,000 SunGard Data Systems Incorporated
(Computers & Software) 767,500(b)
10,000 SunTrust Banks Incorporated (Finance & Insurance) 813,125
25,000 WorldCom Incorporated (Telecommunications) 1,210,937(b)
----------
11,957,962
----------
Total Equities (Cost $31,074,117) 43,088,556
Short-Term Investments 11.20%
Repurchase Agreement with State Street Bank & Trust 5,493,000
Co. Dated 6/30/98 due 7/1/98 collateralized by
$5,545,000 Federal Home Loan Bank, 5.860% due
11/07/00 (Market value of collateral is $5,607,614)
(cost $5,493,000)
----------
Total Investments (Cost $36,567,117) 99.05% (a) 48,581,556
Other assets, less liabilities 0.95% 463,774
----------
----------
Net Assets 100.00% $49,045,330
==========
</TABLE>
(a) Book cost and tax cost are equal.
(b) Non-income producing security.
Abbreviations:
ADR - American Depository Receipt
GDR - Global Depository Receipt
See accompanying notes to financial statements.
28
<PAGE>
Citizens Funds
Statement of Investments - June 30, 1998
Citizens Global Equity Fund (cont'd.)
The Fund's Portfolio of Investments as of June 30, 1998, was concentrated in the
following industries:
<TABLE>
<CAPTION>
Percentage of Net Assets*
Short-term
Industry Equity & Other Total
<S> <C> <C> <C>
Advertising 1.2% 1.2%
Chemicals 1.0% 1.0%
Commercial Services 1.1% 1.1%
Computers & Software 11.8% 11.8%
Electronics 2.7% 2.7%
Energy & Utilities 1.5% 1.5%
Engineering & Construction 1.4% 1.4%
Finance & Insurance 35.8% 35.8%
Food & Beverages 0.8% 0.8%
Media 1.5% 1.5%
Miscellaneous Manufacturing 2.6% 2.6%
Office/Business Equipment 0.7% 0.7%
Retail 5.7% 5.7%
Telecommunications 20.1% 20.1%
Cash & Other 12.1% 12.1%
--------------------------------
87.9% 12.1% 100.0%
</TABLE>
*Percentages are based on net assets of $49,045,330
See accompanying notes to financial statements.
29
<PAGE>
1998 Annual Report
Statement of Assets and Liabilities - June 30, 1998
<TABLE>
<CAPTION>
Working Assets Citizens
Money Market Income
Fund Fund
<S> <C> <C>
ASSETS
Investments (See accompanying schedule):
Investments at cost $119,059,553 $50,684,903
Repurchase Agreements - 196,000
Net unrealized appreciation (depreciation) - 1,941,219
Total investments at value 119,059,553 52,822,122
----------- ----------
Cash 1,783,528 165
Foreign Currencies (cost $0, $0, $0, $0, $46,065) - -
Receivable for:
Interest 140,086 833,002
Dividends and witholding tax reclaims - -
Fund shares sold 1,206,780 153,987
Investment securities sold - 45,755
Due from Investment Adviser - 60,000
Unamortized organizational costs 24,592 21,111
Other receivables 4,403 -
----------- ----------
Total Assets 122,218,942 53,936,142
----------- ----------
LIABILITIES
Payables:
Investment securities purchased - 2,479,172
Fund shares repurchased 361,054 -
Option contracts written at value - -
Distributions payable - 27,361
Payable for investment management fees 4,883 4,558
Payable for administrative
and shareholder service fees 17,716 5,118
Payable for distribution expenses 3,258 2,118
Payable for trustees' fees and expenses 4,151 4,092
Other accrued expenses 52,295 48,114
----------- ----------
Total Liabilities 443,357 2,570,533
----------- ----------
NET ASSETS $121,775,585 $51,365,609
============ ===========
</TABLE>
30
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Citizens Citizens Citizens
Index Emerging Global
Fund Growth Fund Equity Fund
<S> <C> <C> <C>
ASSETS
Investments (See accompanying schedule):
Investments at cost $215,523,989 $64,254,574 $31,074,117
Repurchase Agreements 2,019,000 7,012,000 5,493,000
Net unrealized appreciation (depreciation) 155,660,409 14,048,504 12,014,439
Total investments at value 373,203,398 85,315,078 48,581,556
----------- ---------- ----------
Cash 627 598 567
Foreign Currencies (cost $0, $0, $0, $0, $46,065) - - 45,830
Receivable for:
Interest 285 989 775
Dividends and witholding tax reclaims 289,441 27,390 90,897
Fund shares sold 677,133 98,027 394,883
Investment securities sold 4,128,927 4,755,341 13,327
Due from Investment Adviser - - -
Unamortized organizational costs 34,047 2,042 2,928
Other receivables - 181 -
----------- ---------- ----------
Total Assets 378,333,858 90,199,646 49,130,763
----------- ---------- ----------
LIABILITIES
Payables:
Investment securities purchased 4,858,304 2,066,875 -
Fund shares repurchased 250,231 28,552 19,539
Option contracts written at value - 123,750 -
Distributions payable - - -
Payable for investment management fees 25,460 11,939 6,612
Payable for administrative
and shareholder service fees 44,264 11,456 5,355
Payable for distribution expenses 17,563 4,623 2,465
Payable for trustees' fees and expenses 4,092 4,092 4,092
----------- ---------- ----------
Total Liabilities 5,265,058 2,308,088 85,433
----------- ---------- ----------
NET ASSETS $373,068,800 $87,891,558 $49,045,330
============ =========== ===========
</TABLE>
31
See accompanying notes to financial statements.
<PAGE>
1998 Annual Report
Statement of Assets and Liabilities - June 30, 1998 (cont'd)
<TABLE>
<CAPTION>
Working Assets Citizens
Money Market Income
NET ASSETS Fund Fund
-------------- -----------
<S> <C> <C>
Standard Shares
Net assets $103,597,093 $51,365,609
Shares outstanding 103,720,315 4,657,040
Net asset value, offering
and redemption price per share $1.00 $11.03
------------ -----------
Institutional Shares
Net assets $18,178,492
Shares outstanding 18,178,492
Net asset value, offering
and redemption price per share $1.00
------------ -----------
Net assets consist of:
Paid-in capital $121,775,585 $49,453,609
Accumulated net investment income/(loss) - (27,361)
Accumulated net realized
gain/(loss) on investments and foreign - (1,858)
currency transactions
Net unrealized appreciation of investments,
foreign currencies and written options - 1,941,219
------------ -----------
$121,775,585 $51,365,609
============ ===========
</TABLE>
See accompanying notes to financial statements.
32
<PAGE>
Citizens Funds
<TABLE>
<CAPTION>
Citizens Citizens Citizens
Index Emerging Global
NET ASSETS Fund Growth Fund Equity Fund
------------ ----------- -----------
<S> <C> <C> <C>
Standard Shares
Net assets $341,395,423 $87,891,558 $49,045,330
Shares outstanding 14,555,329 5,008,373 2,894,252
Net asset value, offering
and redemption price per share $23.46 $17.55 $16.95
------------ ----------- -----------
Institutional Shares
Net assets $31,673,377
Shares outstanding 1,656,079
Net asset value, offering
and redemption price per share $19.13
------------ ----------- -----------
Net assets consist of:
Paid-in capital $213,103,487 $66,245,930 $35,580,293
Accumulated net investment income/(loss) - - -
Accumulated net realized
gain/(loss) on investments and foreign 4,304,904 7,610,628 1,452,664
currency transactions
Net unrealized appreciation of investments,
foreign currencies and written options 155,660,409 14,035,000 12,012,373
------------ ----------- -----------
$373,068,800 $87,891,558 $49,045,330
============ ============ ===========
</TABLE>
See accompanying notes to financial statements.
33
<PAGE>
1998 Annual Report
Statement of Operations - June 30, 1998 (cont'd)
<TABLE>
<CAPTION>
Working Assets Citizens
Money Market Income
Fund Fund
-------------- -----------
<S> <C> <C>
Investment Income
Interest $6,366,757 $3,256,720
Dividends - -
---------- ----------
Total investment income 6,366,757 3,256,720
---------- ----------
Expenses
Investment management fees 392,811 290,174
Transfer agent fees 185,208 84,435
Custody and accounting fees 54,197 52,741
Distribution expense 188,875 111,606
Administrative and shareholder
service fees 278,850 101,909
Legal and audit fees 31,630 53,136
Registration fees 35,869 23,297
TrusteesO fees and expenses 17,856 30,175
Printing and postage 20,119 13,775
Dues and insurance 11,639 10,004
Other expenses 36,995 41,541
Amortization of organization costs 3,855 18,447
---------- ----------
Total expenses 1,257,904 831,240
---------- ----------
Reimbursement by Adviser (15,872) (52,639)
---------- ----------
Net expenses 1,242,032 778,601
---------- ----------
Net investment income/(loss) $5,124,725 $2,478,119
---------- ----------
Realized and Unrealized Gain/(Loss)
on Investments
Realized gain/(loss) on investments - 323,133
Realized gain/(loss) on foreign
currency transactions - -
Increase in unrealized appreciation
and depreciation on investments
and written options - 1,575,754
Increase in unrealized depreciation
on foreign currencies - -
---------- ----------
Net realized and unrealized gain
on investments and foreign currencies - 1,898,887
---------- ----------
Net increase in net assets
resulting from operations $5,124,725 $4,377,006
========== ==========
</TABLE>
See accompanying notes to financial statements.
34
<PAGE>
Citizens Funds
<TABLE>
<CAPTION>
Citizens Citizens Citizens
Index Emerging Global
Fund Growth Fund Equity Fund
----------- ----------- -----------
<S> <C> <C> <C>
Investment Income
Interest $91,183 $243,916 $187,703
Dividends 3,291,529 192,416 344,500
----------- ----------- ---------
Total investment income 3,382,712 436,332 532,203
----------- ----------- ---------
Expenses
Investment management fees 1,439,749 741,296 372,017
Transfer agent fees 338,143 140,073 88,649
Custody and accounting fees 97,539 32,573 61,728
Distribution expense 672,052 185,324 92,998
Administrative and shareholder
service fees 1,635,911 193,896 86,805
Legal and audit fees 47,746 40,157 29,190
Registration fees 52,526 24,019 21,618
TrusteesO fees and expenses 23,025 21,582 21,853
Printing and postage 36,593 22,961 11,687
Dues and insurance 27,935 9,302 4,226
Other expenses 53,359 38,804 21,439
Amortization of organization costs 9,237 5,387 4,500
----------- ----------- ---------
Total expenses 4,433,815 1,455,374 816,710
----------- ----------- ---------
Reimbursement by Adviser (2,396) - -
----------- ----------- ---------
Net expenses 4,431,419 1,455,374 816,710
----------- ----------- ---------
Net investment income/(loss) $(1,048,707) $(1,019,042) $(284,507)
----------- ----------- ---------
Realized and Unrealized Gain/(Loss)
on Investments
Realized gain/(loss) on investments 10,984,389 14,909,699 2,902,993
Realized gain/(loss) on foreign
currency transactions - - (160,384)
Increase in unrealized appreciation
and depreciation on investments
and written options 79,818,754 7,492,711 5,267,063
Increase in unrealized depreciation
on foreign currencies - - (30)
----------- ----------- ---------
Net realized and unrealized gain
on investments and foreign currencies 90,803,143 22,402,410 8,009,642
----------- ----------- ---------
Net increase in net assets
resulting from operations $89,754,436 $21,383,368 $7,725,135
=========== =========== =========
</TABLE>
See accompanying notes to financial statements.
35
<PAGE>
1998 Annual Report
Statement of Changes in Net Assets - June 30, 1998
<TABLE>
<CAPTION>
Working Assets
Money Market Fund Citizens Income Fund Citizens Index Fund
------------------------ ----------------------- -------------------------
For the For the For the For the For the For the
year ended year ended year ended year ended year ended year ended
6/30/98 6/30/97 6/30/98 6/30/97 6/30/98 6/30/97
<S> <C> <C> <C> <C> <C> <C>
Operations
Net investment income/(loss) $5,124,725 $4,227,404 $2,478,119 $2,160,329 $(1,048,707) $106,984
Realized gain/(loss)
on investments and
foreign currencies - - 323,133 330,690 10,984,389 8,049,314
Net change in unrealized
appreciation/(depreciation)
of investments and
foreign currencies - - 1,575,754 503,520 79,818,754 47,548,634
------------ ------------ ----------- ----------- ------------ ------------
Net increase in net assets
resulting from operations 5,124,725 4,227,404 4,377,006 2,994,539 89,754,436 55,704,932
Distributions to shareholders:
From net investment
income-Standard (4,215,864) (3,426,811) (2,459,515) (2,160,329) (34,132) (633,846)
In excess of net investment
income-Standard - - (7,360) - - -
From net realized gain on
investments-Standard - - (74,371) - (11,994,100) (971,044)
From net investment income-
Institutional (908,861) (800,593) N/A N/A (79,294) (65,259)
From net realized gain on
investments-Institutional - - N/A N/A (996,483) (65,259)
------------ ------------ ----------- ----------- ------------ ------------
Total distributions (5,124,725) (4,227,404) (2,541,246) (2,160,329) (13,104,009) (1,735,408)
Increase in net assets resulting
from capital share
transactions 19,092,288 9,818,284 16,299,679 120,108 72,301,740 25,643,131
------------ ------------ ----------- ----------- ------------ ------------
Total increase in net assets 19,092,288 9,818,284 18,135,439 954,318 148,952,167 79,612,655
Net Assets
Beginning of year 102,683,297 92,865,013 33,230,170 32,275,852 224,116,633 144,503,978
------------ ------------ ----------- ----------- ------------ ------------
End of year $121,775,585 $102,683,297 $51,365,609 $33,230,170 $373,068,800 $224,116,633
------------ ------------ ----------- ----------- ------------ ------------
Undistributed net
investment income/
(accumulated net
investment loss) - - $(27,361) - - $97,952
------------ ------------ ----------- ----------- ------------ ------------
</TABLE>
See accompanying notes to financial statements.
36
Citizens Funds
Statement of Changes in Net Assets - June 30, 1998
<TABLE>
<CAPTION>
Citizens Emerging Citizens Global
Growth Fund Equity Fund
------------------------ ----------------------
For the For the For the For the
year ended year ended year ended year ended
6/30/98 6/30/97 6/30/98 6/30/97
<S> <C> <C> <C> <C>
Operations
Net investment income/(loss) $(1,019,042) $(665,517) $(284,507) $(143,194)
Realized gain/(loss)
on investments and
foreign currencies 14,909,699 (1,434,350) 2,742,609 393,718
Net change in unrealized
appreciation/(depreciation
of investments and
foreign currencies 7,492,711 4,711,273 5,267,033 4,332,342
----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations 21,383,368 2,611,406 7,725,135 4,582,866
Distributions to shareholders:
From net investment
income-Standard - - - -
In excess of net investment
income-Standard - - - -
From net realized gain on
investments-Standard (4,557,534) (4,391,320) (1,327,372) -
From net investment income-
Institutional N/A N/A N/A N/A
From net realized gain on
investments-Institutional N/A N/A N/A N/A
----------- ----------- ----------- -----------
Total distributions (4,557,534) (4,391,320) (1,327,372) -
Increase in net assets
resulting from capital
share transactions 10,724,793 25,711,568 13,074,611 9,394,757
----------- ----------- ----------- -----------
Total increase in net assets 27,550,627 23,931,654 19,472,374 13,977,623
Net Assets
Beginning of year 60,340,931 36,409,277 29,572,956 15,595,333
----------- ----------- ----------- -----------
End of year $87,891,558 $60,340,931 $49,045,330 $29,572,956
----------- ----------- ----------- -----------
Undistributed net
investment income/
(accumulated net
investment loss) - - - -
----------- ----------- ----------- -----------
</TABLE>
37
<PAGE>
1998 Annual Report
Financial Highlights - June 30, 1998
<TABLE>
<CAPTION>
Working Assets Money Market Fund - Standard Shares
--------------------------------------------------
For the For the For the For the For the
year year year year year
ended ended ended ended ended
6/30/98 6/30/97 6/30/96 6/30/95 6/30/94
<S> <C> <C> <C> <C> <C>
Selected Per-Share Data
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
-------- ------- ------- ------- --------
Income from investment operations
Net investment income 0.045 0.042 0.045 0.044 0.023
Less distributions
from net investment income (0.045) (0.042) (0.045) (0.044) (0.023)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
======== ======= ======= ======= ========
Total return 4.54% 4.30% 4.60% 4.51% 2.35%
Ratios and Supplemental Data
Net assets, end of period
(thousands) $103,597 $85,179 $78,326 $97,611 $103,766
Ratio of expenses to average
net assets
prior to reimbursement
and/or fee waivers 1.23% 1.39% 1.21% 1.16% 1.16%
Ratio of expenses to average
net assets net of reimbursement
and/or fee waivers 1.21% 1.25% 1.18% 1.16% 1.16%
Ratio of net income to
average net assets 4.46% 4.23% 4.56% 4.39% 2.31%
</TABLE>
* Annualized
** Not Annualized
*** Commencing February 1, 1996 the Fund began offering Institutional Class
shares.
See accompanying notes to financial statements.
38
<PAGE>
Citizens Funds
Financial Highlights - June 30, 1998
<TABLE>
<CAPTION>
Working Assets Money Market Fund -
Institutional Class Shares ***
-----------------------------------
For the For the From
year year 2/1/96
ended ended to
6/30/98 6/30/97 6/30/96
<S> <C> <C> <C>
Selected Per-Share Data
Net asset value, beginning of period $1.00 $1.00 $1.00
------- ------- -------
Income from investment operations
Net investment income 0.051 0.049 0.021
Less distributions
from net investment income (0.051) (0.049) (0.021)
Net asset value, end of period $1.00 $1.00 $1.00
======= ======= =======
Total return 5.23% 5.01% 2.09%**
Ratios and Supplemental Data
Net assets, end of period
(thousands) $18,178 $17,504 $14,539
Ratio of expenses to average
net assets
prior to reimbursement
and/or fee waivers 0.56% 0.60% 0.47%*
Ratio of expenses to average
net assets net of reimbursement
and/or fee waivers 0.56% 0.60% 0.47%*
Ratio of net income to
average net assets 5.11% 4.92% 5.16%*
</TABLE>
See accompanying notes to financial statements.
39
<PAGE>
1998 Annual Report
Financial Highlights - June 30, 1998
<TABLE>
<CAPTION>
Citizens Income Fund
--------------------------------------------
For the For the For the For the For the
year year year year year
ended ended ended ended ended
6/30/98 6/30/97 6/30/96 6/30/95 6/30/94
<S> <C> <C> <C> <C> <C>
Selected Per-Share Data
Net asset value, beginning
of period $10.56 $10.28 $10.38 $10.04 $10.60
------- ------- ------- ------- -------
Income/(loss) from investment
operations
Net investment income 0.60 0.67 0.66 0.65 0.55
Net gain/(loss) on securities
(both realized and
unrealized) 0.49 0.28 (0.10) 0.36 (0.54)
------- ------- ------- ------- -------
Total from investment
operations 1.09 0.95 0.56 1.01 0.01
Less distributions
from net investment income (0.60) (0.67) (0.66) (0.65) (0.55)
from net realized gains (0.02) - - (0.02) (0.02)
------- ------- ------- ------- -------
Total distributions (0.62) (0.67) (0.66) (0.67) (0.57)
Net asset value, end of period $11.03 $10.56 $10.28 $10.38 $10.04
======= ======= ======= ======= =======
Total return 10.49% 9.57% 5.48% 10.45% 0.04%
Ratios and Supplemental Data
Net assets, end of period
(thousands) $51,366 $33,230 $32,276 $30,122 $24,410
Ratio of expenses to average
net assets prior to
reimbursement and/or
fee waivers 1.86% 1.47% 1.48% 1.48% 2.01%
Ratio of expenses to average
net assets net of
reimbursement and/or
fee waivers 1.74% 1.41% 1.38% 1.35% 1.25%
Ratio of net income/(loss) to
average net assets 5.55% 6.44% 6.26% 6.47% 5.43%
Portfolio turnover rate 80.14% 64.56% 41.36% 46.03% 52.62%
</TABLE>
* Annualized
** Not Annualized
*** Commencing January 25, 1996 the Fund began offering Institutional Class
shares.
**** The Citizens Index Fund Standard shares commenced operations on
March 3, 1995.
See accompanying notes to financial statements.
40
<PAGE>
Citizens Funds
Financial Highlights - June 30, 1998
<TABLE>
<CAPTION>
Citizens Index Fund
Citizens Index Fund - Standard Shares**** Institutional Class Shares***
----------------------------------------- -----------------------------
For the For the For the From For the For the From
year year year 3/3/95 year year 1/25/96
ended ended ended to ended ended to
6/30/98 6/30/97 6/30/96 6/30/95 6/30/98 6/30/97 6/30/96
<S> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data
Net asset value, beginning
of period $18.04 $13.41 $10.94 $10.00 $14.84 $11.00 $10.00
-------- -------- -------- -------- ------- ------- ------
Income/(loss) from investment
operations
Net investment income (0.07) - 0.08 0.01 0.11 0.08 0.08
Net gain/(loss) on securities
(both realized and
unrealized) 6.44 4.78 2.47 0.93 5.21 3.94 0.92
-------- -------- -------- -------- ------- ------- ------
Total from investment
operations 6.37 4.78 2.55 0.94 5.32 4.02 1.00
Less distributions
from net investment income - (0.06) (0.03) - (0.08) (0.09) -
from net realized gains (0.95) (0.09) (0.05) - (0.95) (0.09) -
-------- -------- -------- -------- ------- ------- ------
Total distributions (0.95) (0.15) (0.08) - (1.03) (0.18) -
Net asset value, end of period $23.46 $18.04 $13.41 $10.94 $19.13 $14.84 $11.00
======== ======== ======== ======== ======= ======= ======
Total return 36.50% 35.88% 23.41% 9.40%** 37.38% 36.93% 10.00%**
Ratios and Supplemental Data
Net assets, end of period
(thousands) $341,395 $211,116 $136,980 $106,096 $31,673 $13,001 $7,524
Ratio of expenses to average
net assets prior to
reimbursement and/or
fee waivers 1.59% 1.59% 1.82% 1.75%* 0.88% 0.88% 1.01%*
Ratio of expenses to average
net assets net of
reimbursement and/or
fee waivers 1.59% 1.59% 1.79% 1.75%* 0.88% 0.88% 0.98%*
Ratio of net income/(loss) to
average net assets (0.39%) 0.02% 0.68% 0.98%* 0.28% 0.76% 2.37%*
Portfolio turnover rate 13.64% 18.64% 6.44% 64.95% 13.64% 18.64% 6.44%
</TABLE>
41
<PAGE>
1998 Annual Report
Financial Highlights - June 30, 1998
<TABLE>
<CAPTION>
Citizens Emerging Growth Fund ***
--------------------------------------------
For the For the For the For the From
year year year year 2/8/94
ended ended ended ended to
6/30/98 6/30/97 6/30/96 6/30/95 6/30/94
<S> <C> <C> <C> <C> <C>
Selected Per-Share Data
Net asset value, beginning
of period $14.14 $14.87 $11.87 $9.93 $10.00
------- ------- ------- ------- ------
Income/(loss) from
investment operations
Net investment income/(loss) (0.20) (0.16) (0.13) 0.07 0.01
Net gain/(loss) on securities
(both realized and unrealized) 4.61 0.68 4.72 2.18 (0.08)
------- ------- ------- ------- ------
Total from investment
operations 4.41 0.52 4.59 2.25 (0.07)
Less distributions
from net investment income - - - (0.09) -
from net realized gains (1.00) (1.25) (1.59) (0.22) -
------- ------- ------- ------- ------
Total distributions (1.00) (1.25) (1.59) (0.31) -
Net asset value, end of period $17.55 $14.14 $14.87 $11.87 $9.93
======= ======= ======= ======= ======
Total return 33.05% 4.03% 42.43% 23.24% (1.80%)**
Ratios and Supplemental Data
Net assets, end of period
(thousands) $87,892 $60,341 $36,409 $10,638 $3,754
Ratio of expenses to
average net assets
prior to reimbursement
and/or fee waivers 1.96% 2.01% 2.34% 2.93% 3.81%*
Ratio of expenses to
average net assets
net of reimbursement
and/or fee waivers 1.96% 1.99% 2.02% 1.90% 1.89%*
Ratio of net income/(loss) to
average net assets (1.37%) (1.32%) (1.64%) 0.53% 0.63%*
Portfolio turnover rate 245.30% 228.66% 337.41% 231.30% 33.35%
</TABLE>
* Annualized
** Not Annualized
*** The Citizens Emerging Growth Fund and the Citizens Global Equity Fund
commenced operations on February 8, 1994.
See accompanying notes to financial statements.
42
<PAGE>
Citizens Funds
Financial Highlights - June 30, 1998
<TABLE>
<CAPTION>
Citizens Global Equity Fund ***
--------------------------------------------
For the For the For the For the From
year year year year 2/8/94
ended ended ended ended to
6/30/98 6/30/97 6/30/96 6/30/95 6/30/94
<S> <C> <C> <C> <C> <C>
Selected Per-Share Data
Net asset value, beginning
of period $14.47 $11.89 $10.69 $9.80 $10.00
------- ------- ------- ------ ------
Income/(loss) from
investment operations
Net investment income/(loss) (0.20) (0.07) (0.10) (0.01) 0.01
Net gain/(loss) on securities
(both realized and unrealized) 3.24 2.65 1.43 0.96 (0.21)
------- ------- ------- ------ ------
Total from investment
operations 3.04 2.58 1.33 0.95 (0.20)
Less distributions
from net investment income - - - - -
from net realized gains (0.56) - (0.13) (0.06) -
------- ------- ------- ------ ------
Total distributions (0.56) - (0.13) (0.06) -
Net asset value, end of period $16.95 $14.47 $11.89 $10.69 $9.80
======= ======= ======= ====== ======
Total return 21.75% 21.70% 12.52% 9.77% (2.00%)**
Ratios and Supplemental Data
Net assets, end of period
(thousands) $49,045 $29,573 $15,595 $9,503 $5,639
Ratio of expenses to
average net assets
prior to reimbursement
and/or fee waivers 2.20% 2.33% 2.72% 2.99% 3.16%*
Ratio of expenses to
average net assets
net of reimbursement
and/or fee waivers 2.20% 2.10% 2.55% 2.50% 2.50%*
Ratio of net income/(loss) to
average net assets (0.76%) (0.70%) (1.01%) 0.00% 0.25%*
Portfolio turnover rate 72.33% 69.34% 85.92% 22.10% 0.00%
</TABLE>
See accompanying notes to financial statements.
43
<PAGE>
1998 Annual Report
Notes to Financial Statements -- June 30, 1998
NOTE 1 - Summary of Significant Accounting Policies
Organization
The Working Assets Money Market Fund, Citizens Income Fund, Citizens Index
Fund, Citizens Emerging Growth Fund and Citizens Global Equity Fund (the
"Funds") are each a series of shares of beneficial interest of Citizens Funds
(the "Trust"), formerly known as Citizens Investment Trust. Collectively, these
Funds are known as the "Citizens Funds." The Trust is organized as a
Massachusetts Business Trust and is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and is authorized to issue an unlimited number of no par value
shares in one or more series.
The Citizens Income Fund, Citizens Emerging Growth Fund and Citizens Global
Equity Fund offer one class of shares, known as Standard shares. The Working
Assets Money Market Fund and the Citizens Index Fund offer Standard as well as
Institutional Class shares. Shares of each class are entitled to vote as a class
or series only to the extent required by the 1940 Act, or as provided in the
Funds' Declaration of Trust or as permitted by the Board of Trustees. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Funds are allocated on a pro-rata basis to each class based on
the relative net assets or shareholder accounts of each class to the total net
assets or shareholder accounts of the Funds. Each class of shares differs in its
respective distribution, administration and shareholder servicing expenses and
may differ in certain other class-specific fees and expenses (see footnote 2).
In preparing financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements, as well as the reported amounts of income and expenses during the
period. Actual results may differ from these estimates. The following is a
summary of significant accounting policies followed by the Funds.
Portfolio Valuation
Equity securities are valued at the last sale price on the primary exchange
on which such securities are traded or on the principal over-the-counter market
on which such securities are traded, as of the close of business on the day the
securities are valued, or, lacking any sales, at the last available bid price
for domestic securities and mean price for international securities. Fixed
income investments are generally valued at the bid price for securities.
Short-term securities with a maturity of 60 days or less are valued at amortized
cost, adjusted for market fluctuation, if any. Investments for which market
quotations are not readily available (including restricted securities which are
subject to limitations on their sale) are valued at fair value as determined in
good faith by or under the direction of the Funds' Board of Trustees.
44
<PAGE>
Citizens Funds
Notes to Financial Statements -- June 30, 1998
Security Transactions, Related Investment Income and Other
Security transactions are accounted for on the trade date (date the order
to buy or sell is executed). The cost of securities sold is determined on the
identified cost basis, unless otherwise specified. Interest income is recorded
on the accrual basis. Dividend income is recorded on the ex-dividend date.
The Working Assets Money Market Fund seeks to maintain a continuous net
asset value per share of $1.00 and intends to comply with the maturity,
diversification and quality requirements of Rule 2a-7 under the 1940 Act in
order to be considered a money market fund. If net asset value per share, using
available market information, deviates from $1.00 by $.005 or more, the Board of
Trustees would consider what steps, if any, should be taken to restore net asset
value per share to $1.00.
Distributions to Shareholders
The Citizens Income Fund distributes net investment income to shareholders
monthly and net capital gains, if any, annually. With respect to the Citizens
Index Fund, Citizens Emerging Growth Fund and Citizens Global Equity Fund,
distributions to shareholders from net investment income and net capital gains,
if any, are distributed annually. With respect to the Working Assets Money
Market Fund, dividends from net investment income are accrued daily and are
reinvested in additional shares or paid in cash monthly. Distributions are
recorded by the Funds on the ex-dividend date. Income and capital gain
distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These differences are
primarily due to differing treatments of net operating losses and loss deferral
due to wash sales and excise tax regulations.
Federal Income Taxes
It is the policy of the Funds to meet the requirements for qualification as
a "regulated investment company" under the applicable Internal Revenue Code. It
is also the intention of the Funds to make distributions sufficient to avoid
imposition of any excise tax. Therefore, no provision has been made for Federal
taxes on income, capital gains or unrealized appreciation of securities held, or
excise tax on income and capital gains.
Foreign Currency Translation
The accounting records of the Funds are maintained in U.S. Dollars.
Investment securities and other assets and liabilities denominated in a foreign
currency are recorded on the books and records of the Funds after being
translated into U.S. Dollars at the prevailing rates of exchange on that day.
Purchases and sales of securities, income receipts and expense payments are
translated into U.S. Dollars at the prevailing exchange rate on the respective
dates of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of short-term securities, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Funds' books and the U.S. Dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes in the
value of assets and liabilities other than investments in securities at year end
resulting from changes in exchange rates. The effects of changes in foreign
currency exchange rates on investments in securities are included with the net
realized gain or loss on investment securities.
Repurchase Agreements
With respect to repurchase agreements entered into by the Funds, it is the
Funds' policy to receive collateral securities of which the value, including
accrued interest, is at least equal to the amount to be repaid to the Funds
under each agreement at its maturity.
45
<PAGE>
1998 Annual Report
Notes to Financial Statements -- June 30, 1998
Restricted Securities
The Funds are permitted to invest in privately placed securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult. At the end of the period, restricted
securities (excluding 144A issues) are shown at the end of the Funds' Statement
of Investments.
Options
The Citizens Emerging Growth Fund, Citizens Global Equity Fund and Citizens
Index Fund are permitted to write call or put options. When a Fund writes a call
or put option, an amount equal to the premium received is included in the Fund's
"Statement of Assets and Liabilities" as an asset and an equivalent liability.
The amount of the liability is subsequently "marked to market" to reflect the
current market value of the option. If the option expires on its stipulated
expiration date, or if the Fund enters into a closing purchase transaction, a
gain or loss is realized without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is extinguished.
If a written call option is exercised, a gain or loss is realized from the sale
of the underlying security, and the proceeds from the sale are increased by the
premium originally received. If a written put option is exercised, the cost of
the underlying security purchased would be decreased by the premium originally
received.
The premium paid by the Fund for the purchase of a call or put option is
recorded as an investment and subsequently "marked to market" to reflect the
current market value of the option. If an option which the Fund has purchased
expires on the stipulated expiration date, the Fund realizes a loss in the
amount of the cost of the option. If a Fund enters into a closing transaction,
the Fund realizes a gain or loss depending on whether the proceeds of the
closing sale transaction are greater or less than the cost of the option. If the
Fund exercises a call option, the cost of the securities acquired by exercising
the call is increased by the premium originally paid. If the Fund exercises a
put option, it realizes a gain or loss from the sale of the underlying security,
and the proceeds from such sale will be decreased by the premium originally
paid.
These option contracts may be listed for trading on a national securities
exchange or traded over-the-counter. Over-the-counter options are transacted
directly with dealers and not with a clearing corporation, and there is a risk
of nonperformance by the dealer. The Fund, as writer of a call option, loses the
potential for gain on the underlying security above the exercise price while the
option is outstanding. By writing a put option, the Fund might become obligated
to purchase the underlying security at an exercise price that exceeds the
then-current market price.
Deferred Organization Costs
All costs incurred in connection with the organization, registration and/or
reorganization of the Funds have been paid by the Funds. These costs are being
amortized on a straight-line basis over a period not to exceed 60 months.
NOTE 2 - Fees and Other Transactions with Affiliates
Management Fee - Citizens Advisers (the "Adviser") serves as Adviser to
each of the Funds. Under the terms of the management contract, the Adviser is
paid a monthly fee based on an annual rate of each Fund's average net assets.
Those rates are as follows: Working Assets Money Market Fund, 0.35%; Citizens
Income Fund, 0.65%; Citizens Index Fund, 0.50%; and Citizens Emerging Growth
Fund and Citizens Global Equity
46
<PAGE>
Citizens Funds
Notes to Financial Statements -- June 30, 1998
Fund, 1.00%. Seneca Capital Management LLC serves as the Sub-Adviser for
the Citizens Income Fund and the Citizens Emerging Growth Fund. RhumbLine
Advisers serves as the Sub-Adviser for the Citizens Index Fund. Clemente
Capital, Inc. serves as the Sub-Adviser for the Citizens Global Equity Fund. For
their services, the Sub-Advisers receive fees based on an annual rate of each
Fund's average net assets, paid by the Adviser as follows: Citizens Income Fund,
from July 1, 1997 to December 1, 1997, 0.165%, thereafter, 0.175%; Citizens
Index Fund, 0.10%; and Citizens Emerging Growth Fund and Citizens Global Equity
Fund, 0.35%. Seneca Capital Management served as Sub-Adviser to the Working
Assets Money Market Fund until October 1, 1997, receiving fees of 0.08% of
average net assets from the Adviser.
The Adviser has agreed to reduce or eliminate its fee to the extent that
the total expenses of a Fund for any fiscal year (exclusive of taxes, interest,
brokerage commissions and extraordinary expenses) exceed the following limits:
Working Assets Money Market Fund, 1.50% of the first $40 million of average net
assets and 1% thereafter; and Citizens Income Fund, 1.75% of the first $100
million of average net assets and 1.25% thereafter. The Adviser may also
voluntarily reduce its fee or waive reimbursement of distribution costs. Such
voluntary reimbursements may cease at any time.
Distribution Fee - Citizens Securities Inc. (the "Distributor") is a wholly
owned subsidiary of the Adviser and serves as the Funds' Distributor.
Pursuant to Rule 12b-1 under the 1940 Act, the Trust's Board of Trustees
has adopted a separate distribution plan with respect to the Funds' Standard
shares and Institutional Class shares pursuant to which the Funds reimburse the
Distributor for a portion of its distribution related expenses.
Distribution fees for the year ended June 30, 1998 were charged based on a
percentage of average daily net assets as follows:
<TABLE>
<S> <C>
Working Assets Money Market Fund Standard shares 0.20%
Working Assets Money Market Fund Institutional
Class shares 0.00%
Citizens Income Fund 0.25%
Citizens Index Fund Standard shares 0.25%
Citizens Index Fund Institutional Class shares * 0.00%
Citizens Emerging Growth Fund 0.25%
Citizens Global Equity Fund 0.25%
</TABLE>
* Under the terms of the Distribution agreement the Distributor may charge
up to 0.07% of average daily net assets for distribution related expenses. For
the year ended June 30, 1998 no such fees were charged.
Administrative and Shareholders Service Fees - Citizens Advisers also
performs a wide variety of administrative duties for the Trust under a separate
administrative contract which provides for reimbursement of out of pocket
expenses as well as fees for services rendered. These fees and expenses are
payable monthly and include fees based on the annual rate of the average daily
net assets in the following amounts: Working Assets Money Market Fund, Standard
shares - 0.15%; Citizens Income Fund, Citizens Emerging Growth Fund and Citizens
Global Equity Fund - 0.10%; Citizens Index Fund, Standard shares - 0.20%; and
Citizens Index Fund, Institutional Class Shares - 0.30%, (of which only 0.09%
was charged for the year ended June 30, 1998). In addition, Citizens Securities
provides a number of administrative services to the Trust relating primarily to
shareholder services and communications, and is reimbursed a flat rate
approximating the "market price" of such services. The Citizens Index Fund,
Standard shares also may be charged a
47
<PAGE>
1998 Annual Report
Notes to Financial Statements -- June 30, 1998
shareholder service fee of up to 0.45% based on the average daily net assets of
the class. For the year ended June 30, 1998, a fee of 0.31% was charged. For the
year ended June 30, 1998 the Trust paid administrative and shareholder service
fees as set forth below:
<TABLE>
<CAPTION>
Administrative Shareholder
Expenses Service Fees
-------------- ------------
<S> <C> <C>
Working Assets Money Market Fund, Standard Shares $186,996 $90,741
Working Assets Money Market Fund, Institutional Class Shares 505 608
Citizens Income Fund 65,056 36,853
Citizens Emerging Growth Fund 113,379 80,517
Citizens Global Equity Fund 54,370 32,435
Citizens Index Fund, Standard Shares 617,498 1,000,269
Citizens Index Fund, Institutional Class Shares 17,458 686
</TABLE>
Trustee Fees - Certain officers and trustees of the Trust are "affiliated
persons," as defined in the 1940 Act, of the Adviser. Currently, each Trustee
who is not an "affiliated person" receives an annual retainer of $6,000 and
$1,000 for each day's attendance at a Trustee meeting, except for the Chair, who
receives an annual retainer of $9,000 as well as $1,000 for each day's
attendance of a Trustee meeting.
Transfer Agent Fees - PFPC provides certain transfer agency services
pursuant to certain fee arrangements. Transfer agent fees also include the cost
of services rendered to provide sub-transfer agency services and shareholder
statements.
Class specific expenses - As described above there are certain fees and
expenses which vary by share class within the Working Assets Money Market Fund
and the Citizens Index Fund, as set forth below, for the year ended June 30,
1998:
<TABLE>
<CAPTION>
Working Assets Citizens
Working Assets Money Market Fund Citizens Index Fund
Money Market Fund Institutional Index Fund Institutional
Standard Shares Class Shares Standard Shares Class Shares
----------------- ----------------- --------------- ------------
<S> <C> <C> <C> <C>
Transfer agent expenses $173,876 $11,332 $318,763 $19,380
Distribution expenses 188,875 - 672,052 -
Administrative and
shareholder service fees 277,737 1,113 1,617,767 18,144
</TABLE>
NOTE 3 - Purchases and Sales of Investment Securities
The following summarizes purchases and sales of investment securities, other
than short-term investments, by each Fund for the year ended June 30, 1998:
<TABLE>
<CAPTION>
Purchases Sales
------------------------------------- -------------------------------------
U.S. Government Other U.S. Government Other
<S> <C> <C> <C> <C>
Citizens Income Fund $5,300,611 $49,061,905 $3,724,547 $ 32,506,947
Citizens Index Fund - 96,467,895 - 27,883,891
Citizens Emerging Growth Fund - 170,403,466 - 158,194,376
Citizens Global Equity Fund - 33,908,567 - 21,461,545
</TABLE>
48
<PAGE>
Citizens Funds
Notes to Financial Statements -- June 30, 1998
NOTE 4 - Options
The Citizens Emerging Growth Fund's written option contract activity for
the year ended June 30, 1998 was as follows:
<TABLE>
<CAPTION>
Number Premium
------ -------
<S> <C> <C>
Options outstanding at July 1, 1997 - -
Options written 1,100 $460,359
Options cancelled in closing
purchases transactions (600) (206,618)
Options expired prior to exercise (350) (143,495)
Options outstanding at June 30, 1998 150 110,246
</TABLE>
<TABLE>
<CAPTION>
Call options written at June 30, 1998:
Common Expiration Exercise Shares Subject Fair
Stock Date Price to Call Value
----- ---------- -------- -------------- ----
<S> <C> <C> <C> <C>
America-Online July 1998 $100 15,000 $123,750
(premium $110,246)
</TABLE>
NOTE 5 - Custody of Securities
State Street Bank & Trust Co. acts as custodian for the Funds. Under an
agreement with the custodian bank, custody fees are reduced by credits for cash
balances as set forth below for the year ended June 30, 1998:
<TABLE>
<S> <C>
Working Assets Money Market Fund $ 5,391
Citizens Income Fund 2,089
Citizens Emerging Growth Fund 3,455
Citizens Global Equity Fund 1,698
Citizens Index Fund 13,141
</TABLE>
NOTE 6 - Capital Shares
At June 30, 1998 there were an unlimited amount of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the
Funds were as follows:
Working Assets Money Market Fund, Standard Shares
<TABLE>
<CAPTION>
Year Ended June 30, 1998 Year Ended June 30, 1997
Shares Value Shares Value
------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Shares sold 225,185,324 $225,185,324 112,553,683 $112,553,683
Shares issued in connection
with the merger of the E[bullet]Fund
(note 7) 20,424,963 20,424,963 N/A N/A
Shares issued in reinvestment
of distributions 4,133,681 4,133,681 3,364,638 3,364,638
Shares redeemed (231,203,065) (231,203,065) (109,064,955) (109,064,955)
------------ ------------ ------------ ------------
Net increase 18,540,903 $ 18,540,903 6,853,366 $ 6,853,366
============ ============ ============ ============
</TABLE>
49
<PAGE>
1998 Annual Report
Notes to Financial Statements -- June 30, 1998
Working Assets Money Market Fund, Institutional Class Shares
<TABLE>
<CAPTION>
Year Ended June 30, 1998 Year Ended June 30, 1997
Shares Value Shares Value
------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Shares sold 12,205,583 $12,205,583 13,951,439 $13,951,439
Shares issued in reinvestment
of distributions 892,790 892,790 794,475 794,475
Shares redeemed (12,423,765) (12,423,765) (11,780,996) (11,780,996)
------------ ------------ ------------ ------------
Net increase 674,608 $ 674,608 2,964,918 $ 2,964,918
============ ============ ============ ============
</TABLE>
Citizens Index Fund, Standard Shares
<TABLE>
<CAPTION>
Year Ended June 30, 1998 Year Ended June 30, 1997
Shares Value Shares Value
------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Shares sold 4,470,158 $93,123,009 2,973,987 $45,828,710
Shares issued in reinvestment
of distributions 614,329 11,776,678 105,816 1,574,541
Shares redeemed (2,229,198) (46,242,696) (1,591,178) (24,219,385)
------------ ------------ ------------ ------------
Net increase 2,855,289 $58,656,991 1,488,625 $23,183,866
============ ============ ============ ============
</TABLE>
Citizens Index Fund, Institutional Class Shares
<TABLE>
<CAPTION>
Year Ended June 30, 1998 Year Ended June 30, 1997
Shares Value Shares Value
------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Shares sold 856,256 $14,991,105 291,398 $3,682,414
Shares issued in reinvestment
of distributions 66,804 1,040,809 10,317 125,759
Shares redeemed (143,279) (2,389,757) (109,750) (1,348,908)
------------ ------------ ------------ ------------
Net increase 779,781 $13,642,157 191,965 $2,459,265
============ ============ ============ ============
</TABLE>
Citizens Income Fund
<TABLE>
<CAPTION>
Year Ended June 30, 1998 Year Ended June 30, 1997
Shares Value Shares Value
------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,362,024 $14,876,174 838,253 $8,769,851
Shares issued in connection with
the merger of the Muir Portfolio
(note 7) 996,129 10,678,482 N/A N/A
Shares issued in reinvestment
of distributions 197,805 2,157,311 173,608 1,812,026
Shares redeemed (1,047,393) (11,419,649) (1,003,548) (10,461,769)
------------ ------------ ------------ ------------
Net increase 1,508,565 $16,292,318 8,313 $ 120,108
============ ============ ============ ============
</TABLE>
50
<PAGE>
Citizens Funds
Notes to Financial Statements -- June 30, 1998
Citizens Emerging Growth Fund
<TABLE>
<CAPTION>
Year Ended June 30, 1998 Year Ended June 30, 1997
Shares Value Shares Value
------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Shares sold 8,679,595 $136,411,777 5,552,259 $76,934,885
Shares issued in reinvestment
of distributions 315,387 4,383,874 319,747 4,249,436
Shares redeemed (8,255,328) (130,070,858) (4,052,228) (55,472,753)
------------ ------------ ------------ ------------
Net increase 739,654 $ 10,724,793 1,819,778 $25,711,568
============ ============ ============ ============
</TABLE>
Citizens Global Equity Fund
<TABLE>
<CAPTION>
Year Ended June 30, 1998 Year Ended June 30, 1997
Shares Value Shares Value
------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,279,900 $19,751,171 982,862 $12,555,317
Shares issued in reinvestment
of distributions 83,450 1,186,661 - -
Shares redeemed (513,508) (7,863,221) (249,910) (3,160,560)
------------ ------------ ------------ ------------
Net increase 849,842 $13,074,611 732,952 $ 9,394,757
============ ============ ============ ============
</TABLE>
NOTE 7 - Fund Reorganizations
Pursuant to a plan of reorganization approved by the Muir California
Tax-Free Income Portfolio ("Muir Portfolio") shareholders on September 12, 1997,
the Citizens Income Fund acquired all the net assets of the Muir Portfolio. The
Muir Portfolio was, at that time, a separate series of shares of beneficial
interest of Citizens Investment Trust. The acquisition was accomplished by
exchange of 996,127 shares of the Citizens Income Fund (valued at $10,678,482)
for the 655,524 shares of the Muir Portfolio outstanding on September 12, 1997.
The Muir Portfolio's net assets at that date ($10,678,433) were combined with
those of the Citizens Income Fund. The aggregate net assets of the Citizens
Income Fund and the Muir California Tax-Free Income Portfolio were $34,629,785
and $10,678,433, respectively, prior to the acquisition, and the combined net
assets were $45,308,268 immediately following the acquisition.
On December 5, 1997, pursuant to a plan of reorganization approved by the
E[bullet]Fund shareholders on December 1, 1997, the Working Assets Money Market
Fund Standard shares acquired all the net assets of the E[bullet]Fund. The
E[bullet]Fund was, at that time, a separate series of shares of beneficial
interest of Citizens Investment Trust. The acquisition was accomplished by a
tax-free exchange of 20,424,963 shares of the Working Assets Money Market Fund
Standard shares (valued at $20,424,963) for the 20,424,963 shares of the
E[bullet]Fund outstanding on December 5, 1997. The E[bullet]Fund's net assets at
that date ($20,424,963) were combined with those of the Working Asset Money
Market Standard shares. The aggregate net assets of the Working Assets Money
Market Fund Standard shares and the E[bullet]Fund were $85,009,370 and
$20,424,963, respectively, prior to the acquisition, and the combined net assets
were $105,434,333 immediately following the acquisition, including the write-off
of $123,223 of unamortized organizational expenses.
51
<PAGE>
1998 Annual Report
Federal Tax Information (unaudited)
Pursuant to Section 852 of the Internal Revenue Code, the Funds designate
the following amounts as capital gain dividends for the fiscal year ended June
30, 1998:
<TABLE>
<CAPTION>
28% 20%
------- ----------
<S> <C> <C>
Citizens Index Fund - 5,575,388
Citizens Emerging Growth Fund 140,496 690,839
Citizens Global Equity Fund - 1,327,374
Citizens Income Fund - 46,217
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of Citizens Funds:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Working Assets Money Market Fund,
Citizens Income Fund, Citizens Index Fund, Citizens Emerging Growth Fund and
Citizens Global Equity Fund at June 30, 1998, and the results of their
operations, the changes in their net assets and the financial highlights for the
year ended June 30, 1998, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audit. The statements of changes in net assets for the
year ended June 30, 1997, and financial highlights for each of the periods
ending on or before June 30, 1997, were audited by other auditors whose report
dated July 25, 1997 expressed an unqualified opinion. We conducted our audit of
these financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at June 30, 1998 by
correspondence with the custodian and brokers, provides a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 14,1998
52
<PAGE>
[inside back cover]
1998 Annual Report Service Providers:
Distributor
Citizens Securities
230 Commerce Way, Suite 300, Portsmouth, NH 03801
800-223-7010 [bullet] 603-436-5152
Manager
Citizens Advisers
230 Commerce Way, Suite 300, Portsmouth, NH 03801
800-223-7010 [bullet] 603-436-5152
Trustees
Azie Taylor Morton, Chair; Sophia Collier; Lokelani Devone; Juliana Eades;
William D. Glenn II; Mitchell Johnson; J.D. Nelson; Robert Reich; Ada Sanchez
Custodian
State Street Bank & Trust Company
Boston, MA
Transfer Agent & Dividend Disbursing Agent
PFPC Inc.
Wilmington, DE
Legal Counsel
Bingham Dana, LLP
Boston, MA
Independent Auditors
PricewaterhouseCoopers, LLP
Boston, MA
Website: www.citizensfunds.com
(C)1998 Citizens Advisers
Printed on recycled paper using soy-based inks.
<PAGE>
[back cover]
[logo: CITIZENS FUNDS] BULK RATE
230 Commerce Way US POSTAGE
Suite 300 PAID
Portsmouth, New Hampshire PERMIT #375
03801 NASHUA, NH
