SELIGMAN
- ---------------------
MUNICIPAL FUND
SERIES, INC.
[GRAPHIC]
MID-YEAR REPORT
MARCH 31, 1998
--------
PROVIDING
INCOME FREE
FROM REGULAR
INCOME
TAX
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
SELIGMAN -- TIMES CHANGE...VALUES ENDURE
J. & W. SELIGMAN & CO. INCORPORATED IS A FIRM WITH A LONG TRADITION OF
INVESTMENT EXPERTISE, OFFERING A BROAD ARRAY OF INVESTMENT CHOICES TO HELP
TODAY'S INVESTORS SEEK THEIR LONG-TERM FINANCIAL GOALS.
TIMES CHANGE...
Established in 1864, Seligman's history of providing financial
services has been marked not by fanfare, but rather by a quiet and
firm adherence to managing investments prudently. While the world has
changed dramatically in the 134 years since Seligman first opened its
doors, the firm has continued to offer its clients high-quality
investment solutions for these changing times.
In the late 19th century, as the country grew, Seligman helped finance
the westward expansion of the railroads, the construction of the
Panama Canal, and the launching of urban transit systems. In the first
part of the 20th century, as America became an industrial power, the
firm helped fund the growing capital needs of the nascent automobile
and steel industries.
[GRAPHIC]
JAMES, JESSE, AND JOSEPH SELIGMAN, 1870
With the formation of Tri-Continental Corporation in 1929 -- today, the nation's
largest, diversified, publicly-traded closed-end investment company -- Seligman
began shifting its emphasis from investment banking to investment management.
Despite the stock market crash and ensuing depression, Seligman was convinced of
the importance mutual funds could play in building wealth for individual
investors and launched its first open-end fund in 1930.
In the decades that followed, Seligman has continued to offer forward-looking
investment solutions, including funds that focus on technology stocks, municipal
bonds, and international securities.
...VALUES ENDURE
Seligman is proud of its distinctive past and of the traditional values that
continue to shape the firm's business decisions and investment judgment. While
much has changed over the years, the firm's commitment to providing prudent
investment management that seeks to build wealth for clients over time is an
enduring value that will guide Seligman into the new millennium.
TABLE OF CONTENTS
To the Shareholders ......................................1
Interview With Your Portfolio Manager ....................2
Performance Overview and
Portfolio Summary ......................................4
Portfolios of Investments ...............................12
Statements of Assets and Liabilities ....................32
Statements of Operations ................................34
Statements of Changes in Net Assets .....................36
Notes to Financial Statements ...........................40
Financial Highlights ....................................45
Report of Independent Auditors ..........................58
Board of Directors ......................................59
Executive Officers AND For More Information .............60
Glossary of Financial Terms .............................61
<PAGE>
TO THE SHAREHOLDERS
Seligman Municipal Fund Series posted solid investment results for the six
months ended March 31, 1998. Throughout the period, the US economy's expansion
continued unabated and inflation was virtually nonexistent, supporting the
lasting rally in the municipal bond market. As a result, the Series' investment
results improved as the portfolios' bond prices appreciated.
The municipal bond market has also benefited from favorable municipal tax
receipts and a reduced federal budget deficit. The Federal Reserve Board's
decision to maintain current short-term interest rate levels in the period also
helped maintain the optimism of municipal market participants. While greater
uncertainty regarding the sustainability of the rate of economic growth slightly
increased yields in the first calendar quarter of 1998, they remained in a
narrow range. Municipal bond issuers took advantage of the market environment
and issued a record number of bonds in the first three months of the year, which
historically is a slow period for new issuance. The yield on the Bond Buyer
20-Bond General Obligation Index, a benchmark for the municipal bond market,
stood at 5.20% on March 31, 1998, having declined from the 5.36% yield on
September 30, 1997.
Looking ahead, the ultimate effect of the Asian recession on the US economy
remains to be seen. Thus far, the primary effect has been a countering of US
inflationary pressures, with the reduced cost of imported goods offsetting the
increase in wages caused by the tight US labor market. However, we still
anticipate a net slowdown in the rate of economic expansion for the balance of
1998. Nonetheless, while the stock markets may become more volatile as corporate
earnings weaken, the outlook for the municipal bond market remains optimistic. A
continuation of the positive fundamentals, which characterized the municipal
market for the past six months, should support the municipal bond market for the
remainder of the year. Further, a decrease in US Treasury bond issuance will
likely benefit the municipal bond market, as a reduction in Treasury supply
would likely force Treasury yields lower relative to municipal yields.
We thank you for your continued interest in Seligman Municipal Fund Series, and
look forward to serving your investment needs in the many years to come. A
discussion with your Portfolio Manager and the Series' portfolios of investments
and financial statements follow this letter. The Series' investment results
appear on pages 4 to 10.
By order of the Board of Directors,
/s/ William Morris /s/ Brian T. Zino
- -------------------- ------------------
William C. Morris Brian T. Zino
Chairman President
May 1, 1998
1
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
THOMAS G. MOLES
Q. WHAT ECONOMIC AND MARKET FACTORS INFLUENCED SELIGMAN MUNICIPAL FUND SERIES IN
THE LAST SIX MONTHS?
A. Seligman Municipal Fund Series ended the first six months of fiscal-year 1998
on a positive note, as declining long-term municipal yields boosted the
Series' net asset values. The rally in the municipal bond market continued
throughout the past six months and by mid-January 1998, positive fundamentals
caused long-term municipal yields to fall to the lowest level in 26 years.
Soon after, though, the rally stalled due to signs of an increase in the pace
of economic growth. Yields rose modestly, but then settled into a narrow
trading range for the remainder of the first quarter of 1998. At March 31,
long-term municipal yields were a quarter point above the January-1998 lows,
but still remained at the lowest level in almost five years.
Further, in a widely anticipated move, the Federal Reserve Board voted on
March 31 to leave the fed funds rate unchanged. Additionally, the minutes of
the Fed's February meeting, released on April 2, revealed that the Fed
elected to maintain a neutral policy directive, rather than to reinstate a
tightening bias. This suggests that the Fed was not overly concerned that
economic growth was in imminent danger of exceeding its non-inflationary
potential. The Fed's "wait-and-see" posture in the face of robust economic
growth suggests that the Fed believes that the impact of the Asian financial
crisis could be sufficient to slow the economy and preclude any intervention.
Further, while inflation remains at such a favorable rate, the risk of
waiting is likely minimal.
Q. WHAT WAS YOUR INVESTMENT STRATEGY?
A. The positive interest rate environment prompteda sharp increase in municipal
bond issuance. For the first quarter of 1998, total volume rose 70% versus
the same period last year. More specifically, municipal bonds issued for
refunding purposes surged a dramatic 136%. (Refunding bonds are issued to
retire outstanding, higher-coupon debt. Proceeds from the refunding issue are
deposited in an escrow account, generally comprised of government
obligations, which provides debt service on the refunded bonds.) Seligman
Municipal Fund Series benefited from the supply situation in two ways: First,
municipal bond prices were temporarily
- --------------------------------------------------------------------------------
A TEAM APPROACH
Seligman Municipal Fund Series is
managed by the Seligman Municipals Team,
headed by Thomas G. Moles. Mr. Moles is
[PHOTO] assisted in the management of the Fund
by a group of seasoned professionals who
are responsible for research and trading
consistent with the Series' investment
objective.
SELIGMAN MUNICIPALS TEAM: (FROM LEFT)
AUDREY KUCHTYAK, THERESA BARION, DEBRA
MCGUINNESS, (SEATED) EILEEN COMERFORD,
THOMAS G. MOLES (PORTFOLIO MANAGER)
- --------------------------------------------------------------------------------
2
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
THOMAS G. MOLES
depressed by the heavy supply. This presented us with an opportunity to
purchase bonds at cheaper levels than would have existed during a period of
light supply. Second, as a direct result of the increase in refunding
activity, most of the Series' portfolios had bonds refunded. In general, when
a municipal bond is refunded, total return performance is improved, and the
bond's rating is often upgraded.
Finally, the current economic expansion, now in its eighth year, has
contributed to an improvement in the financial condition of the nation's
states, cities, and municipalities. Through in-depth credit analysis, we are
able to identify those credits most likely to be upgraded by one or more of
the nationally recognized rating agencies. We are, therefore, able to
purchase bonds prior to an upgrade when its yield reflects the lower rating.
Over the past six months, rating upgrades of portfolio holdings significantly
outnumbered rating downgrades.
Q. WHAT IS YOUR OUTLOOK?
A. We anticipate a continuation of the positive fundamentals that have
characterized the municipal market over the past six months. Going forward,
stable long-term interest rates, improving credit trends, and attractive real
rates of return bode well for the performance of the municipal bond market.
Consequently, we remain optimistic regarding the long-term prospects for
Seligman Municipal Fund Series.
3
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN NATIONAL MUNICIPAL SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended March 31, 1998
AVERAGE ANNUAL
------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
---------- ------ ----- ----- ---------------
CLASS A**
With Sales Charge (0.62)% 6.99% 5.25% 7.70% n/a
Without Sales Charge 4.34 12.32 6.27 8.23 n/a
CLASS D**
With 1% CDSL 2.74 10.33 n/a n/a n/a
Without CDSL 3.74 11.33 n/a n/a 4.18%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 3.89 10.72 6.83 8.34 5.91#
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 1998
3/31/98 9/30/97 3/31/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------ ------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.16 $8.01 $7.63 CLASS A $0.196 -- 4.13%
CLASS D 8.16 8.02 7.63 CLASS D 0.158 -- 3.38
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
Revenue Bonds 79% Aaa/AAA 34% A/A 20%
General Obligation Bonds 21 Aa/AA 38 Baa/BBB 8
WEIGHTED AVERAGE MATURITY 25.4 years
</TABLE>
SELIGMAN COLORADO MUNICIPAL SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended March 31, 1998
AVERAGE ANNUAL
------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
--------- ------ ------- ------- ---------------
CLASS A**
With Sales Charge (1.37)% 3.66% 4.48% 6.64% n/a
Without Sales Charge 3.55 8.81 5.49 7.16 n/a
CLASS D**
With 1% CDSL 2.09 6.99 n/a n/a n/a
Without CDSL 3.09 7.99 n/a n/a 3.46%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 3.89 10.72 6.83 8.34 5.91#
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 1998
3/31/98 9/30/97 3/31/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A $7.50 $7.42 $7.24 Class A $0.182 -- 3.95%
Class D 7.50 7.42 7.23 Class D 0.149 -- 3.24
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
Revenue Bonds 72% Aaa/AAA 60%
General Obligation Bonds 28 Aa/AA 23
A/A 12
WEIGHTED AVERAGE MATURITY 18.4 years Baa/BBB 5
</TABLE>
- -----------
See footnotes on page 10.
4
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN GEORGIA MUNICIPAL SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended March 31, 1998
<TABLE>
<CAPTION>
AVERAGE ANNUAL
----------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
---------- -------- -------- -------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (1.02)% 5.87% 5.53% 7.70% n/a
Without Sales Charge 3.85 11.18 6.56 8.23 n/a
CLASS D**
With 1% CDSL 2.51 9.17 n/a n/a n/a
Without CDSL 3.51 10.17 n/a n/a 4.61%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 3.89 10.72 6.83 8.34 5.91#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 1998
3/31/98 9/30/97 3/31/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.21 $8.12 $7.77 CLASS A $0.189 $0.032 3.99%
CLASS D 8.23 8.13 7.79 CLASS D 0.152 0.032 3.27
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
Revenue Bonds 66% Aaa/AAA 43%
General Obligation Bonds 34 Aa/AA 37
A/A 17
WEIGHTED AVERAGE MATURITY 20.2 years Baa/BBB 3
</TABLE>
SELIGMAN LOUISIANA MUNICIPAL SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended March 31, 1998
<TABLE>
<CAPTION>
AVERAGE ANNUAL
----------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
---------- -------- -------- -------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (1.26)% 4.53% 5.05% 7.30% n/a
Without Sales Charge 3.63 9.74 6.07 7.82 n/a
CLASS D**
With 1% CDSL 2.17 7.64 n/a n/a n/a
Without CDSL 3.17 8.64 n/a n/a 4.24%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 3.89 10.72 6.83 8.34 5.91#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 1998
3/31/98 9/30/97 3/31/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.36 $8.28 $8.02 CLASS A $0.204 $0.014 3.92%
CLASS D 8.35 8.27 8.02 CLASS D 0.167 0.014 3.22
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
Revenue Bonds 80% Aaa/AAA 78%
General Obligation Bonds 20 Aa/AA 13
A/A 6
WEIGHTED AVERAGE MATURITY 19.5 years Baa/BBB 3
</TABLE>
- -------------------------
See footnotes on page 10.
5
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN MARYLAND MUNICIPAL SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended March 31, 1998
<TABLE>
<CAPTION>
AVERAGE ANNUAL
---------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
---------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (1.27)% 4.91% 5.19% 7.31% n/a
Without Sales Charge 3.70 10.12 6.21 7.83 n/a
CLASS D**
With 1% CDSL 2.11 7.99 n/a n/a n/a
Without CDSL 3.11 8.99 n/a n/a 4.25%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 3.89 10.72 6.83 8.34 5.91#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 1998
3/31/98 9/30/97 3/31/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ---------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
CLASS A $8.19 $8.14 $7.86 CLASS A $0.201 $0.048 4.09%
CLASS D 8.19 8.15 7.87 CLASS D 0.164 0.048 3.39
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
Revenue Bonds 82% Aaa/AAA 40%
General Obligation Bonds 18 Aa/AA 40
A/A 18
WEIGHTED AVERAGE MATURITY 21.7 years Baa/BBB 2
</TABLE>
SELIGMAN MASSACHUSETTS MUNICIPAL SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended March 31, 1998
<TABLE>
<CAPTION>
AVERAGE ANNUAL
----------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
---------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (0.65)% 5.78% 5.30% 7.30% n/a
Without Sales Charge 4.32 11.00 6.33 7.83 n/a
CLASS D**
With 1% CDSL 2.72 8.88 n/a n/a n/a
Without CDSL 3.72 9.88 n/a n/a 4.44%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 3.89 10.72 6.83 8.34 5.91#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 1998
3/31/98 9/30/97 3/31/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.04 $7.99 $7.70 CLASS A $0.196 $0.094 4.11%
CLASS D 8.03 7.99 7.70 CLASS D 0.159 0.094 3.41
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
Revenue Bonds 87% Aaa/AAA 60% Baa/BBB 5%
General Obligation Bonds 13 Aa/AA 21 Non-Rated 3
A/A 11
WEIGHTED AVERAGE MATURITY 22.5 years
</TABLE>
- ---------------------
See footnotes on page 10.
6
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN MICHIGAN MUNICIPAL SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended March 31, 1998
<TABLE>
<CAPTION>
AVERAGE ANNUAL
----------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
---------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (1.15)% 5.24% 5.26% 7.59% n/a
Without Sales Charge 3.79 10.44 6.28 8.12 n/a
CLASS D**
With 1% CDSL 2.33 8.33 n/a n/a n/a
Without CDSL 3.33 9.33 n/a n/a 4.32%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 3.89 10.72 6.83 8.34 5.91#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 1998
3/31/98 9/30/97 3/31/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.64 $8.60 $8.29 CLASS A $0.208 $0.074 4.04%
CLASS D 8.63 8.59 8.29 CLASS D 0.169 0.074 3.33
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
Revenue Bonds 83% Aaa/AAA 51% Baa/BBB --
General Obligation Bonds 17 Aa/AA 34 Non-Rated 2%
A/A 13
WEIGHTED AVERAGE MATURITY 22.1 years
</TABLE>
SELIGMAN MINNESOTA MUNICIPAL SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended March 31, 1998
<TABLE>
<CAPTION>
AVERAGE ANNUAL
----------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
---------- -------- -------- -------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (1.92)% 2.93% 4.71% 6.74% n/a
Without Sales Charge 2.99 8.07 5.74 7.27 n/a
CLASS D**
With 1% CDSL 1.53 6.11 n/a n/a n/a
Without CDSL 2.53 7.11 n/a n/a 3.51%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 3.89 10.72 6.83 8.34 5.91#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 1998
3/31/98 9/30/97 3/31/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.82 $7.79 $7.62 CLASS A $0.192 $0.009 4.03%
CLASS D 7.82 7.79 7.62 CLASS D 0.157 0.009 3.32
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
Revenue Bonds 49% Aaa/AAA 36%
General Obligation Bonds 51 Aa/AA 41
A/A 23
WEIGHTED AVERAGE MATURITY 18.2 years
</TABLE>
- ------------------------
See footnotes on page 10.
7
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN MISSOURI MUNICIPAL SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended March 31, 1998
<TABLE>
<CAPTION>
AVERAGE ANNUAL
---------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
---------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (1.57)% 4.59% 4.91% 7.14% n/a
Without Sales Charge 3.34 9.86 5.94 7.67 n/a
CLASS D**
With 1% CDSL 1.88 7.87 n/a n/a n/a
Without CDSL 2.88 8.87 n/a n/a 3.96%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 3.89 10.72 6.83 8.34 5.91#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 1998
3/31/98 9/30/97 3/31/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.83 $7.82 $7.54 CLASS A $0.183 $0.065 3.99%
CLASS D 7.83 7.82 7.54 CLASS D 0.148 0.065 3.29
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
Revenue Bonds 87% Aaa/AAA 45%
General Obligation Bonds 13 Aa/AA 35
A/A 18
WEIGHTED AVERAGE MATURITY 20.5 years Baa/BBB 2
</TABLE>
SELIGMAN NEW YORK MUNICIPAL SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended March 31, 1998
<TABLE>
<CAPTION>
AVERAGE ANNUAL
---------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
---------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (0.71)% 7.03% 5.56% 7.72% n/a
Without Sales Charge 4.21 12.33 6.60 8.24 n/a
CLASS D**
With 1% CDSL 2.61 10.18 n/a n/a n/a
Without CDSL 3.61 11.18 n/a n/a 4.64%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 3.89 10.72 6.83 8.34 5.91#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 1998
3/31/98 9/30/97 3/31/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.34 $8.28 $7.88 CLASS A $0.201 $0.083 4.16%
CLASS D 8.34 8.29 7.89 CLASS D 0.163 0.083 3.45
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
Revenue Bonds 88% Aaa/AAA 55%
General Obligation Bonds 12 Aa/AA 6
A/A 29
WEIGHTED AVERAGE MATURITY 24.7 years Baa/BBB 10
</TABLE>
- ----------------------
See footnotes on page 10.
8
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN OHIO MUNICIPAL SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended March 31, 1998
<TABLE>
<CAPTION>
AVERAGE ANNUAL
----------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
----------- -------- -------- -------- ------------------
<S> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (1.22)% 4.54% 5.00% 7.29% n/a
Without Sales Charge 3.73 9.81 6.02 7.82 n/a
CLASS D**
With 1% CDSL 2.26 7.81 n/a n/a n/a
Without CDSL 3.26 8.81 n/a n/a 4.25%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 3.89 10.72 6.83 8.34 5.91#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 1998
3/31/98 9/30/97 3/31/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.18 $8.19 $7.94 CLASS A $0.203 $0.108 4.15%
CLASS D 8.22 8.23 7.98 CLASS D 0.167 0.108 3.45
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
Revenue Bonds 73% Aaa/AAA 75% Baa/BBB 3%
General Obligation Bonds 27 Aa/AA 16 Non-Rated 3
A/A 3
WEIGHTED AVERAGE MATURITY 20.0 years
</TABLE>
SELIGMAN OREGON MUNICIPAL SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended March 31, 1998
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-----------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
---------- -------- -------- -------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (1.11)% 5.28% 5.11% 7.43% n/a
Without Sales Charge 3.79 10.57 6.14 7.96 n/a
CLASS D**
With 1% CDSL 2.20 8.59 n/a n/a n/a
Without CDSL 3.20 9.59 n/a n/a 4.31%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 3.89 10.72 6.83 8.34 5.91#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 1998
3/31/98 9/30/97 3/31/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.88 $7.87 $7.57 CLASS A $0.184 $0.100 4.11%
CLASS D 7.87 7.87 7.56 CLASS D 0.148 0.100 3.41
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
Revenue Bonds 67% Aaa/AAA 46%
General Obligation Bonds 33 Aa/AA 24
A/A 21
WEIGHTED AVERAGE MATURITY 18.0 years Baa/BBB 9
</TABLE>
- -----------------------
See footnotes on page 10.
9
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN SOUTH CAROLINA MUNICIPAL SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
For Periods Ended March 31, 1998
<TABLE>
<CAPTION>
AVERAGE ANNUAL
----------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
---------- -------- -------- -------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (1.01)% 5.45% 5.22% 7.48% n/a
Without Sales Charge 3.96 10.69 6.26 8.00 n/a
CLASS D**
With 1% CDSL 2.50 8.69 n/a n/a n/a
Without CDSL 3.50 9.69 n/a n/a 4.35%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 3.89 10.72 6.83 8.34 5.91#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
For Periods Ended March 31, 1998
3/31/98 9/30/97 3/31/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.21 $8.16 $7.86 CLASS A $0.196 $0.074 4.00%
CLASS D 8.21 8.16 7.86 CLASS D 0.159 0.074 3.28
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
Revenue Bonds 87% Aaa/AAA 65%
General Obligation Bonds 13 Aa/AA 12
A/A 19
WEIGHTED AVERAGE MATURITY 19.5 years Baa/BBB 4
</TABLE>
- ------------------------------------------------------------------------------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price and assume all distributions
within the period are invested in additional shares. Returns for Class A
shares are calculated with and without the effect of the initial 4.75%
maximum sales charge. Returns for Class D shares are calculated with and
without the effect of the 1% contingent deferred sales load ("CDSL"),
charged on redemptions made within one year of the date after purchase. No
adjustment was made to the performance of Class A shares for periods prior
to January 1, 1993, the commencement date for the annual Administration,
Shareholder Services and Distribution Plan fee of up to 0.25% of average
daily net assets. The rates of return will vary and the principal value of
an investment will fluctuate. Shares, if redeemed, may be worth more or less
than their original cost. A portion of eachSeries' income may be subject to
applicable state and local taxes, and any amount may be subject to the
federal alternative minimum tax. Past performance is not indicative of
future investment results.
*** The Lehman Brothers Municipal Bond Index is an unmanaged index that does not
include any fees or sales charges, and does not reflect state-specific bond
market performance. Investors cannot invest directly in an index.
# From 1/31/94.
+ Represents per share amount paid or declared for the six months ended March
31, 1998.
++ Current yield, representing the annualized yield for the 30-day period ended
March 31, 1998, has been computed in accordance with SEC regulations and
will vary.
o Percentages based on market values of long-term holdings at
March 31, 1998.
10
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
11
<PAGE>
PORTFOLIOS OF INVESTMENTS
March 31, 1998
NATIONAL SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
STATE AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
----- ------ --------------- ----------- ---------
<S> <C> <C> <C> <C>
ALASKA--6.4% $1,500,000 Alaska Housing Finance Corporation Mortgage Rev., 5 3/4%
due 6/1/2024* ............................................................ Aaa/AAA $ 1,533,150
5,000,000 Valdez Marine Terminal Rev. (BP Pipeline Inc. Project),
5 1/2% due 10/1/2028 ..................................................... Aa2/AA 5,033,550
CALIFORNIA--2.8% 2,500,000 San Joaquin Hills Transportation Corridor Agency Rev.
(Orange County Senior Lien Toll Road), 6 3/4% due 1/1/2032 ............... Aaa/NR 2,824,350
FLORIDA--2.7% 2,750,000 Jacksonville Electric Authority (Electric System Rev.),
5 1/4% due 10/1/2028 ..................................................... Aa2/AA 2,733,445
ILLINOIS--6.9% 3,000,000 Chicago Water Rev., 5 1/2% due 11/1/2022 ................................... Aaa/AAA 3,087,960
1,250,000 Illinois Health Facilities Authority Rev. (Edward Hospital Project),
6% due 2/15/2019 ......................................................... A2/A+ 1,291,825
2,500,000 Illinois Health Facilities Authority Rev. (Northwestern Memorial
Hospital), 6% due 8/15/2024 .............................................. Aa2/AA 2,662,100
KENTUCKY--2.0% 1,880,000 Trimble County Pollution Control Rev. (Louisville
Gas & Electric Co. Project), 7 5/8% due 11/1/2020* ....................... Aa2/AA- 2,056,062
MASSA- 2,000,000 Massachusetts Health & Education Facilities Authority Rev.
CHUSETTS--2.1% (Amherst College), 6.80% due 11/1/2021 ................................... Aa1/AA+ 2,189,560
MICHIGAN--2.4% 2,250,000 Michigan State Strategic Fund Pollution Control Rev.
(General Motors Corp.), 6.20% due 9/1/2020 ............................... A3/A 2,433,555
MISSOURI--4.9% 4,750,000 St. Louis Industrial Development Authority Pollution Control Rev.
(Anheuser-Busch Companies, Inc. Project), 5 7/8% due 11/1/2026* .......... A1/A+ 5,011,345
NEVADA--5.0% 5,000,000 Clark County Industrial Development Rev. (Nevada
Power Company Project), 5.90% due 11/1/2032* ............................. NR/BBB- 5,101,200
NEW YORK--4.7% 2,485,000 New York City GOs, 7 1/4% due 8/15/2024 .................................... A3/BBB+ 2,688,348
1,015,000 New York City GOs, 7 1/4% due 8/15/2024 .................................... Aaa/BBB+ 1,115,678
1,000,000 Trust for Cultural Resources of the City of New York Rev.
(American Museum of Natural History), 5.65% due 4/1/2027 ................. Aaa/AAA 1,044,920
SOUTH 2,000,000 Oconee County Pollution Control Rev. (Duke Power Company
CAROLINA--2.1% Project), 7 1/2% due 2/1/2017 ............................................ Aa2/AA- 2,111,120
SOUTH 6,000,000 South Dakota Housing Development Authority Rev.
Dakota--6.1% (HOMEOWNERSHIP MORTGAGE), 6.15% DUE 5/1/2026* ............................ AA1/AAA 6,218,820
TEXAS--19.8% 3,700,000 Harris County Health Facilities Development Corp. Hospital Rev.
(St. Luke's Episcopal Hospital Project), 6 3/4% due 2/15/2021 ............ Aa3/AAA 4,061,601
2,000,000 Harris County Health Facilities Development Corp. SCH Health
Care System Rev. (Sisters of Charity of the Incarnate Word),
7.10% due 7/1/2021 ....................................................... Aa3/AA 2,213,140
2,000,000 Harris County Health Facilities Development Corp. SCH Health
Care System Rev. (Sisters of Charity of the Incarnate Word),
5 3/4% due 7/1/2027 ...................................................... Aa3/AA 2,115,340
4,750,000 Potter County Industrial Development Corp. Pollution
Control Rev. (Southwestern Public Service Company Project),
5 3/4% due 9/1/2016 ...................................................... Aaa/AAA 5,064,117
2,500,000 San Antonio Electric & Gas Rev., 5 1/2% due 2/1/2020 ....................... Aa1/AA 2,565,500
</TABLE>
- ---------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
12
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
NATIONAL SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
STATE AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
----- ------ --------------- ----------- ---------
<S> <C> <C> <C> <C>
TEXAS (CONTINUED) $2,605,000 Texas Veterans' Housing Assistance GOs, 6.80% due 12/1/2023* ............... Aa2/AA $ 2,800,740
1,340,000 Travis County Housing Finance Corporation (Single Family
Mortgage Rev.), 6.95% due 10/1/2027 ...................................... NR/AAA 1,444,265
VIRGINIA--5.2% 5,000,000 Fairfax County Industrial Development Authority Health Care
Rev. (Inova Health System Project), 6% due 8/15/2026 ..................... Aa2/AA 5,358,650
WASHINGTON--13.2% 4,325,000 King County GOs, 6 1/8% due 1/1/2033 ....................................... Aaa/AAA 4,669,746
3,000,000 Port Seattle Rev., 5 1/2% due 9/1/2021 ..................................... Aaa/AAA 3,072,930
5,520,000 Seattle Water System Rev., 5 5/8% due 8/1/2026 ............................. Aaa/AAA 5,757,029
WISCONSIN--6.4% 6,000,000 LaCrosse Resource Recovery Rev. (Northern States Power
Company Project), 6% due 11/1/2021* ...................................... A1/AA- 6,535,740
WYOMING--4.1% 4,000,000 Sweetwater County Pollution Control Rev. (Idaho Power
Company Project), 6.05% due 7/15/2026 .................................... A3/A 4,248,240
------------
TOTAL MUNICIPAL BONDS (Cost $92,754,689)--96.8% .................................................................. 99,044,026
VARIABLE RATE DEMAND NOTES (Cost $1,900,000)--1.9% ............................................................... 1,900,000
OTHER ASSETS LESS LIABILITIES--1.3% .............................................................................. 1,402,812
------------
NET ASSETS--100.0% ............................................................................................... $102,346,838
============
</TABLE>
COLORADO SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$3,000,000 Adams County, CO Pollution Control Rev. (Public Service Co. of Colorado Project),
5 7/8% due 4/1/2014 ...................................................................... Aaa/AAA $ 3,206,880
1,500,000 Colorado Association of School Boards Lease Purchase Finance Program Certificates
of Participation (Pueblo School District No. 60), 7 1/4% due 12/1/2009 ................... Aaa/AAA 1,599,225
2,000,000 Colorado Health Facilities Authority Rev. (Sisters of Charity Health Care Systems, Inc.),
6% due 5/15/2013 ......................................................................... Aaa/AAA 2,086,360
3,000,000 Colorado Health Facilities Authority Rev. (North Colorado Medical Center),
6% due 5/15/2020 ......................................................................... Aaa/AAA 3,227,100
2,000,000 Colorado Health Facilities Authority Rev. (Sisters of Charity of Leavenworth Health
Services Corporation), 5% due 12/1/2025 .................................................. Aaa/AAA 1,924,500
170,000 Colorado Housing Finance Authority (Single Family Residential Housing Rev.),
8% due 3/1/2017 .......................................................................... Aa1/NR 172,858
2,350,000 Colorado Springs, CO Utilities Rev., 5 3/8% due 11/15/2026 .................................. Aa2/AA 2,387,788
105,000 Colorado Water Resources & Power Development Authority (Clean Water Bonds Rev.),
6 7/8% due 9/1/2011 ...................................................................... Aa1/AAA 114,060
2,000,000 Colorado Water Resources & Power Development Authority (Clean Water Bonds Rev.),
6% due 9/1/2014 .......................................................................... Aa1/AAA 2,135,300
</TABLE>
- --------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
13
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
COLORADO SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$1,000,000 Colorado Water Resources & Power Development Authority (Clean Water Bonds Rev.),
6.30% due 9/1/2014 ....................................................................... Aa1/AAA $ 1,091,970
2,000,000 Denver, CO City & County (St. Anthony Hospital Systems Rev.), 7 3/4% due 5/1/2014 ........... Aaa/AAA 2,105,120
2,000,000 Denver, CO City County Department of Aviation Airport System Rev.,
5 1/2% due 11/15/2025 .................................................................... Aaa/AAA 2,067,600
1,985,000 Fort Collins, CO GOs Water Bonds, 6 3/8% due 12/1/2012 ...................................... Aa2/AA 2,170,101
2,500,000 Fort Collins Pollution Control Rev. (Anheuser-Busch Project), 6% due 9/1/2031 ............... A1/A+ 2,660,700
2,000,000 Fountain Valley Authority, CO Water Treatment Rev., 6.80% due 12/1/2019 ..................... Aa/AA 2,159,440
1,895,000 Northglenn, CO Joint Water & Wastewater Utility, 6.80% due 12/1/2008 ........................ Aaa/NR 2,132,633
2,500,000 Platte River Power Authority, CO Power Rev., 6 1/8% due 6/1/2014 ............................ Aa3/A+ 2,657,750
1,655,000 Pueblo County, CO Single Family Mortgage Rev., 7.05% due 11/1/2027 .......................... NR/AAA 1,780,052
2,000,000 Puerto Rico Highway & Transportation Authority Rev., 5 1/2% due 7/1/2036 .................... Baa1/A 2,089,260
2,000,000 University of Colorado Hospital Authority Rev., 5 1/4% due 11/15/2022 ....................... Aaa/NR 1,997,140
2,000,000 University of Colorado Hospital Authority Rev., 6.40% due 11/15/2022 ........................ Aaa/AAA 2,219,580
2,000,000 Westminster, CO (Adams & Jefferson Counties) Sales & Use Tax Rev., 7% due 12/1/2008 ......... Aaa/AAA 2,164,480
-----------
TOTAL MUNICIPAL BONDS (Cost $41,112,435)--95.3% ................................................................... 44,149,897
VARIABLE RATE DEMAND NOTES (Cost $1,400,000)--3.0% ................................................................ 1,400,000
OTHER ASSETS LESS LIABILITIES--1.7% ............................................................................... 775,044
-----------
NET ASSETS--100.0% ................................................................................................ $46,324,941
===========
</TABLE>
GEORGIA SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$2,500,000 Atlanta, GA Water & Sewer Rev., 5 1/4% due 1/1/2027 ......................................... Aaa/AAA $ 2,499,775
1,000,000 Cartersville, GA Development Authority Rev. Water & Wastewater Facilities
(Anheuser-Busch), 7.40% due 11/1/2010* ................................................... A1/A+ 1,231,830
2,000,000 Cartersville, GA Development Authority Rev. Water & Wastewater Facilities
(Anheuser-Busch), 6 3/4% due 2/1/2012* ................................................... A1/A+ 2,191,940
3,000,000 Chatham County, GA School District GOs, 5 1/2% due 8/1/2020 ................................. Aaa/AAA 3,070,590
2,000,000 Columbia County, GA School District GOs, 6 1/4% due 4/1/2013 ................................ Aaa/AAA 2,207,320
1,000,000 DeKalb County, GA GOs, 5 1/4% due 1/1/2020 .................................................. Aa1/AA+ 1,000,550
1,000,000 DeKalb County, GA Water & Sewerage Rev., 7% due 10/1/2014 ................................... Aaa/AA 1,089,940
2,000,000 DeKalb County, GA Water & Sewerage Rev., 5 1/4% due 10/1/2023 ............................... Aa/AA 2,007,380
700,000 DeKalb Private Hospital Authority, GA Rev. (Emory University Project),
6 3/4% due 4/1/2017 ...................................................................... Aa1/AA 764,883
300,000 DeKalb Private Hospital Authority, GA Rev. (Emory University Project), 7% due 4/1/2021 ...... Aa1/AA 329,727
1,000,000 Fayette County, GA School District GOs, 6 1/8% due 3/1/2015 ................................. Aa/A+ 1,083,140
1,000,000 Fulco Hospital Authority Health System Rev. (Catholic Health East), 5% due 11/15/2028 ....... Aaa/AAA 957,660
</TABLE>
- ---------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
14
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
GEORGIA SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$3,000,000 Fulton County, GA School District GOs, 5 5/8% due 1/1/2021 .................................. Aa3/AA $ 3,109,230
2,975,000 Georgia Housing & Finance Authority Rev. (Single Family Mortgage),
5 1/4% due 12/1/2020 ..................................................................... Aa2/AA+ 2,982,229
2,500,000 Georgia Municipal Gas Authority Rev. (Southern Storage Gas Project),
6.40% due 7/1/2014 ....................................................................... NR/A- 2,714,350
1,000,000 Georgia State GOs, 5 3/4% due 2/1/2011 ...................................................... Aaa/AAA 1,058,710
1,750,000 Glynn-Brunswick Memorial Hospital Authority Rev. (Southeast Georgia Health
Systems Project), 6% due 8/1/2016 ........................................................ Aaa/AAA 1,878,048
1,000,000 Gwinnett County, GA School District GOs, 6.40% due 2/1/2012 ................................. Aa1/AA+ 1,163,620
1,500,000 Henry County School District, GA GOs, 6.45% due 8/1/2011 .................................... A1/A+ 1,741,545
500,000 Metropolitan Atlanta Rapid Transit Authority, GA Sales Tax Rev., 6 1/4% due 7/1/2018 ........ A1/AA- 574,795
2,000,000 Monroe County, GA Development Authority Pollution Control Rev. (Georgia Power
Company Plant-- Scherer Project), 6% due 7/1/2025 ........................................ Aaa/AAA 2,109,260
2,500,000 Peachtree City, GA Water &Sewerage Authority Sewer System Rev., 5.60% due 3/1/2027 .......... Aa3/AA 2,618,475
2,000,000 Private Colleges & Universities Authority, GA (Spelman College Project),
6.20% due 6/1/2014 ....................................................................... Aaa/AAA 2,203,600
1,500,000 Private Colleges & Universities Authority, GA (Mercer University Project),
6 1/2% due 11/1/2015 ..................................................................... Aaa/AAA 1,776,690
3,000,000 Private Colleges & Universities Authority, GA (Agnes Scott College Project),
5 5/8% due 6/1/2023 ...................................................................... Aa3/AA- 3,118,860
1,500,000 Puerto Rico Highway & Transportation Authority Rev., 5 1/2% due 7/1/2026 .................... Baa1/A 1,534,080
2,000,000 Savannah, GA Airport Rev., 6 1/4% due 1/1/2015* ............................................. Aaa/AAA 2,146,760
-----------
TOTAL MUNICIPAL BONDS (Cost $45,609,684)--97.6% ................................................................... 49,164,987
VARIABLE RATE DEMAND NOTES (Cost $300,000)--0.6% .................................................................. 300,000
OTHER ASSETS LESS LIABILITIES--1.8% ............................................................................... 890,453
-----------
NET ASSETS--100.0% ................................................................................................ $50,355,440
===========
</TABLE>
- ---------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
15
<PAGE>
PORTFOLIOS OF INVESTMENTS
March 31, 1998
LOUISIANA SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$3,000,000 Bastrop, LA Industrial Development Board Pollution Control Rev. (International Paper
Company Project), 6.90% due 3/1/2007 ..................................................... A3/A- $ 3,303,330
2,500,000 Calcasieu Parish, LA Industrial Development Board (Conoco Inc. Project),
5 3/4% due 12/1/2026* .................................................................... Aa3/AA- 2,582,325
2,385,000 East Baton Rouge Parish, LA Mortgage Finance Authority (Single Family Mortgage Rev.),
5.40% due 10/1/2025 ...................................................................... Aaa/NR 2,390,819
1,000,000 East Baton Rouge Parish, LA Public Improvement Sales & Use Tax Rev.,
7 1/4% due 2/1/2009 ...................................................................... Aaa/AAA 1,044,010
3,000,000 East Baton Rouge Parish, LA Public Improvement Sales & Use Tax Rev.,
5.90% due 2/1/2018 ....................................................................... Aaa/AAA 3,192,990
2,000,000 Houma, LA Utilities Rev., 6 1/4% due 1/1/2012 ............................................... Aaa/AAA 2,160,440
2,000,000 Jefferson Parish, LA Home Mortgage Authority (Single Family Mortgage Rev.),
6% due 12/1/2024* ........................................................................ Aa/NR 2,052,880
2,495,000 Louisiana Housing Finance Agency Mortgage Rev. (Single Family), 6.45% due 6/1/2027* ......... Aaa/AAA 2,633,647
2,500,000 Louisiana Public Facilities Authority Hospital Rev. (Our Lady of Lourdes Regional
Medical Center Project), 6.45% due 2/1/2022 .............................................. Aaa/AAA 2,738,325
2,500,000 Louisiana Public Facilities Authority Rev. (Loyola University Project),
5 5/8% due 10/1/2016 ..................................................................... Aaa/AAA 2,639,900
2,500,000 Louisiana Public Facilities Authority Rev. (Sisters of Mercy Health System, St. Louis, Inc.),
7 3/8% due 6/1/2019 ...................................................................... Aaa/AA+ 2,651,575
3,000,000 Louisiana Public Facilities Authority Rev. (Tulane University), 5 3/4% due 2/15/2021 ........ Aaa/AAA 3,127,530
3,000,000 Louisiana State GOs, 6 1/2% due 5/1/2011 .................................................... Aaa/AAA 3,283,200
2,000,000 Louisiana State University & Agricultural & Mechanical College Auxiliary Rev.,
5 3/4% due 7/1/2014 ...................................................................... Aaa/AAA 2,096,080
2,500,000 Ouachita Parish, LA Hospital Service District Rev. (Glenwood Regional Medical Center),
5 3/4% due 5/15/2021 ..................................................................... Aaa/AAA 2,654,725
190,000 Ouachita Parish, LA Industrial Development Rev. (International Paper Company),
6 1/2% due 4/1/2006 ...................................................................... NR/NR 190,181
2,500,000 Saint Bernard Parish, LA Exempt Facility Rev. (Mobil Oil Corporation Project),
5.90% due 11/1/2026* ..................................................................... Aa2/AA 2,643,025
1,250,000 Saint Charles Parish, LA Environmental Improvement Rev. (Louisiana Power and Light
Company Project), 6.20% due 5/1/2023* .................................................... Baa2/BBB 1,309,788
2,960,000 Saint Charles Parish, LA Waterworks & Wastewater District Utility Rev.,
7.15% due 7/1/2016 ....................................................................... Aaa/AAA 3,255,112
2,500,000 Shreveport, LA Airport System Rev., 5 3/8% due 1/1/2024* .................................... Aaa/AAA 2,473,975
1,555,000 Shreveport, LA GOs, 7 1/2% due 4/1/2006 ..................................................... Aaa/AAA 1,695,416
</TABLE>
- ---------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
16
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
LOUISIANA SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$2,050,000 Sulphur, LA Housing & Mortgage Finance Trust (Residential Mortgage Rev.),
7 1/4% due 12/1/2010 ..................................................................... Aaa/AAA $ 2,414,695
2,500,000 Tangipahoa Parish, LA Hospital Service District No. 1 Rev. (Northoaks Medical Center),
6 1/4% due 2/1/2024 ...................................................................... Aaa/AAA 2,737,675
-----------
TOTAL MUNICIPAL BONDS (Cost $51,347,318)--97.7% ...................................................................... 55,271,643
VARIABLE RATE DEMAND NOTES (Cost $400,000)--0.7% ..................................................................... 400,000
OTHER ASSETS LESS LIABILITIES--1.6% .................................................................................. 893,619
-----------
NET ASSETS--100.0% ................................................................................................... $56,565,262
-----------
</TABLE>
MARYLAND SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$3,000,000 Anne Arundel County, MD Pollution Control Rev. (Baltimore Gas and Electric
Company Project), 6% due 4/1/2024 ........................................................ A2/A $ 3,171,510
2,000,000 Baltimore, MD Consolidated Public Improvement GOs, 6 3/8% due 10/15/2006 .................... Aaa/AAA 2,275,540
2,500,000 Baltimore, MD Port Facilities Rev. (Consolidated Coal Sales Co. Project),
6 1/2% due 10/1/2011 ..................................................................... Aa3/AA- 2,739,100
2,000,000 Baltimore, MD Project and Refunding Rev. (Water Projects), 5 1/2% due 7/1/2026 .............. Aaa/AAA 2,063,080
2,000,000 Howard County, MD Metropolitan District Project GOs, 5 1/2% due 8/15/2022 ................... Aaa/AAA 2,043,580
2,000,000 Maryland Community Development Administration Dept. of Housing & Community
Development (Multi-Family Housing), 7.70% due 5/15/2020* ................................. Aa/NR 2,133,860
2,465,000 Maryland Community Development Administration Dept. of Housing & Community
Development (Single Family Program), 6.80% due 4/1/2024* ................................. Aa/NR 2,635,430
2,500,000 Maryland Community Development Administration Dept. of Housing & Community
Development (Residential Rev.), 5 7/8% due 9/1/2025* ..................................... Aa2/NR 2,598,950
2,500,000 Maryland Community Development Administration Dept. of Housing & Community
Development (Multi-Family Housing), 6.70% due 5/15/2027 .................................. Aa/NR 2,676,850
2,710,000 Maryland Health & Higher Educational Facilities Authority Rev. (Good Samaritan
Hospital), 5 3/4% due 7/1/2019 ........................................................... A1/A 2,838,806
3,000,000 Maryland Health & Higher Educational Facilities Authority Rev. (Johns Hopkins
University), 7 1/2% due 7/1/2020 ......................................................... Aa2/AA- 3,084,450
2,000,000 Maryland Health & Higher Educational Facilities Authority Rev. (Suburban Hospital),
5 1/8% due 7/1/2021 ...................................................................... A1/A+ 1,953,360
2,750,000 Maryland Health & Higher Educational Facilities Authority Rev. (Ann Arundel Medical
Center), 5% due 7/1/2023 ................................................................. Aaa/AAA 2,676,713
2,500,000 Maryland Health & Higher Educational Facilities Authority Rev. (Francis Scott Key
Medical Center), 5% due 7/1/2023 ......................................................... Aaa/AAA 2,433,375
2,000,000 Maryland Health & Higher Educational Facilities Authority Rev. (Mercy Medical Center),
5 3/4% due 7/1/2026 ...................................................................... Aaa/AAA 2,107,500
</TABLE>
- ---------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
17
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
MARYLAND SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$1,000,000 Maryland National Capital Park & Planning Commission GOs (Prince George's County),
6.90% due 7/1/2010 ....................................................................... Aa2/AA $ 1,080,880
2,000,000 Maryland Transportation Authority Rev. (Baltimore/Washington International
Airport Project), 6 1/4% due 7/1/2014* ................................................... Aaa/AAA 2,167,580
2,000,000 Maryland Transportation Authority Rev. Transportation Facilities Projects,
5 3/4% due 7/1/2015 ...................................................................... A1/A+ 2,073,660
1,000,000 Maryland Water Quality Financing Administration Revolving Loan Fund Rev.,
6.70% due 9/1/2013 ....................................................................... Aaa/AAA 1,100,150
1,000,000 Maryland Water Quality Financing Administration Revolving Loan Fund Rev.,
7.10% due 9/1/2013 ....................................................................... Aaa/AAA 1,112,100
450,000 Montgomery County, MD Housing Opportunities Commission (Single Family
Mortgage Rev.), 7 3/8% due 7/1/2017 ...................................................... Aa2/NR 468,324
1,500,000 Montgomery County, MD Housing Opportunities Commission Rev., 6.20% due 7/1/2026* ............ Aa2/NR 1,580,085
2,000,000 Northeast Maryland Waste Disposal Authority Solid Waste Rev. (Montgomery County
Resource Recovery Project), 6.30% due 7/1/2016* .......................................... A/NR 2,137,920
1,000,000 Puerto Rico Highway & Transportation Authority Rev., 5 1/2% due 7/1/2036 .................... Baa1/A 1,044,630
35,000 Puerto Rico Housing Finance Corporation (Single Family Mortgage Rev. Portfolio 1),
7.80% due 10/15/2021 ..................................................................... Aaa/AAA 35,827
630,000 Puerto Rico Housing Finance Corporation (Single Family Mortgage Rev. Portfolio 1-C),
6.85% due 10/15/2023 ..................................................................... Aaa/AAA 668,562
2,000,000 Washington Suburban Sanitary District, MD, 6 1/2% due 1/1/2016 .............................. Aa1/AA 2,177,540
-----------
TOTAL MUNICIPAL BONDS (Cost $49,488,881)--97.2% .................................................................... 53,079,362
VARIABLE RATE DEMAND NOTES (Cost $700,000)--1.3% ................................................................... 700,000
OTHER ASSETS LESS LIABILITIES--1.5% ................................................................................ 833,250
-----------
NET ASSETS--100.0% ................................................................................................. $54,612,612
===========
</TABLE>
MASSACHUSETTS SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$5,000,000 Boston, MA Water & Sewer Commission General Rev., 5 1/4% due 11/1/2019 ...................... A1/A+ $ 5,084,100
3,000,000 Boston, MA Water & Sewer Commission General Rev., 7.10% due 11/1/2019 ....................... Aaa/AAA 3,211,140
5,000,000 Massachusetts Bay Transportation Authority General Transportation System,
5 5/8% due 3/1/2026 ...................................................................... A1/AA- 5,433,950
1,335,000 Massachusetts Education Loan Authority Education Loan Rev., 8% due 6/1/2002 ................. NR/AAA 1,350,299
3,000,000 Massachusetts Health & Educational Facilities Authority Rev. (Daughters of Charity
National Health Systems-- Carney Hospital), 6% due 7/1/2009 .............................. Aa2/AA+ 3,224,940
2,500,000 Massachusetts Health & Educational Facilities Authority Rev. (Daughters of Charity
National Health Systems-- Carney Hospital), 6.10% due 7/1/2014 ........................... Aa2/AA+ 2,692,350
5,000,000 Massachusetts Health & Educational Facilities Authority Rev. (Newton-Wellesley
Hospital), 6% due 7/1/2018 ............................................................... Aaa/AAA 5,331,900
</TABLE>
- ----------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
18
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
MASSACHUSETTS SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$ 705,000 Massachusetts Health & Educational Facilities Authority Rev. (Tufts University),
7.40% due 8/1/2018 ...................................................................... A1/AA- $ 727,631
3,500,000 Massachusetts Health & Educational Facilities Authority Rev. (Williams College),
5 3/4% due 7/1/2019 ..................................................................... Aa1/AA 3,679,270
2,500,000 Massachusetts Health & Educational Facilities Authority Rev. (Suffolk University),
8 1/8% due 7/1/2020 ..................................................................... NR/NR 2,752,725
5,100,000 Massachusetts Health & Educational Facilities Authority Rev. (Smith College),
5 3/4% due 7/1/2024 ..................................................................... Aa2/AA- 5,285,793
5,000,000 Massachusetts Health & Educational Facilities Authority Rev. (Partners Healthcare
System), 5 3/8% due 7/1/2024 ............................................................ Aaa/AAA 5,043,700
7,500,000 Massachusetts Health & Educational Facilities Authority Rev. (Harvard University),
5 5/8% due 11/1/2028 .................................................................... Aaa/AAA 7,905,675
5,000,000 Massachusetts Health & Educational Facilities Authority Rev. (Catholic Health East Health
System), 5% due 11/15/2028 .............................................................. Aaa/AAA 4,766,450
4,500,000 Massachusetts Housing Finance Agency Rev. (Single Family Housing), 5 1/2% due 12/1/2030* ... Aaa/AAA 4,499,640
3,500,000 Massachusetts Industrial Finance Agency Rev. (Phillips Academy), 5 3/8% due 9/1/2023 ....... Aa1/AA+ 3,536,190
3,000,000 Massachusetts Industrial Finance Agency Rev. (College of the Holy Cross),
5 5/8% due 3/1/2026 ..................................................................... Aaa/AAA 3,118,890
3,000,000 Massachusetts Industrial Finance Agency Rev. (Suffolk University), 5 1/4% due 7/1/2027 ..... Aaa/AAA 2,999,730
2,000,000 Massachusetts Industrial Finance Agency Electric Utility Rev. (Nantucket Electric
Company Project), 5 7/8% due 7/1/2017* .................................................. Aaa/AAA 2,118,260
3,000,000 Massachusetts Port Authority Special Facilities Rev. (BOSFUELProject),
5 3/4% due 7/1/2039* .................................................................... Aaa/AAA 3,118,170
1,500,000 Massachusetts Special Obligation Rev. (Highway Improvement Loan),
5.80% due 6/1/2014 ...................................................................... Aa3/AA 1,632,180
5,000,000 Massachusetts State Consolidated Loan GOs, 5 1/8% due 11/1/2013 ............................ Aaa/AAA 5,043,500
2,400,000 Massachusetts State Port Authority Rev., 5% due 7/1/2023 ................................... Aa3/AA- 2,313,144
5,000,000 Massachusetts Water Pollution Abatement Trust Pool Loan Program,
5 5/8% due 2/1/2016 ..................................................................... Aaa/AAA 5,263,900
5,500,000 Massachusetts Water Resources Authority General Rev., 5.60% due 11/1/2026 .................. Aaa/AAA 5,717,965
730,000 Puerto Rico Electric Power Authority Power Rev., 7 1/8% due 7/1/2014 ....................... Baa1/BBB+ 771,041
4,000,000 Puerto Rico Highway & Transportation Authority Rev., 5 1/2% due 7/1/2036 ................... Baa1/A 4,178,520
2,750,000 Puerto Rico Port Authority Rev., 6% due 7/1/2021* .......................................... Aaa/AAA 2,832,967
------------
TOTAL MUNICIPAL BONDS (Cost $97,478,308)--98.6% .................................................................... 103,634,020
VARIABLE RATE DEMAND NOTES (Cost $4,800,000)--4.5% ................................................................. 4,800,000
OTHER ASSETS LESS LIABILITIES--(3.1)% .............................................................................. (3,280,427)
------------
NET ASSETS--100.0% ................................................................................................. $105,153,593
============
</TABLE>
- ----------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
19
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
MICHIGAN SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$5,000,000 Capital Region Airport Authority, MI Airport Rev., 6.70% due 7/1/2021* ..................... Aaa/AAA $ 5,483,100
5,000,000 Detroit, MI GOs, 5 1/2% due 4/1/2016 ....................................................... Aaa/AAA 5,127,600
6,000,000 Detroit, MI Water Supply System Rev., 6 1/4% due 7/1/2012 .................................. Aaa/AAA 6,623,520
3,000,000 Grand Haven, MI Electric System Rev., 5 1/4% due 7/1/2013 .................................. Aaa/AAA 3,035,790
5,000,000 Grand Rapids, MI Water Supply System Rev., 5 3/4% due 1/1/2018 ............................. Aaa/AAA 5,092,250
1,000,000 Grand Traverse County, MI Hospital Finance Authority (Munson Healthcare
Obligated Group), 6 1/4% due 7/1/2012 ................................................... Aaa/AAA 1,081,460
1,500,000 Grand Traverse County, MI Hospital Finance Authority (Munson Healthcare
Obligated Group), 6 1/4% due 7/1/2022 ................................................... Aaa/AAA 1,624,005
3,000,000 Holland School District, MI GOs (School Building and Site Bonds), 7 3/8% due 5/1/2019 ...... NR/NR 3,039,030
5,000,000 Kent County, MI Airport Rev., 6.10% due 1/1/2025* .......................................... Aa/AAA 5,389,000
1,850,000 Kent County, MI Airport Rev., 5% due 1/1/2028* ............................................. Aaa/AAA 1,759,258
2,775,000 Kentwood, MI Public Schools Building & Site GOs, 6.40% due 5/1/2015 ........................ Aa2/A+ 3,050,807
3,000,000 Lansing, MI Building Authority Rev., 5.60% due 6/1/2019 .................................... A1/AA+ 3,117,120
3,250,000 Marquette, MI Hospital Finance Authority Rev. (Marquette General Hospital),
6.10% due 4/1/2019 ...................................................................... Aaa/AAA 3,554,232
3,000,000 Michigan Public Power Agency Rev. (Belle River Project), 5 1/4% due 1/1/2018 ............... A1/AA- 2,974,260
3,000,000 Michigan State Building Authority Rev., 6 1/4% due 10/1/2020 ............................... Aa3/AA 3,209,520
6,000,000 Michigan State GOs (Environmental Protection Program), 5.40% due 11/1/2019 ................. Aa1/AA+ 6,115,200
5,000,000 Michigan State Hospital Finance Authority Rev. (Henry Ford Health System),
5 1/4% due 11/15/2020 ................................................................... Aa2/AAA 4,941,000
5,000,000 Michigan State Hospital Finance Authority Rev. (Oakwood Obligated Group),
5 1/8% due 8/15/2025 .................................................................... Aaa/AAA 4,852,950
2,000,000 Michigan State Hospital Finance Authority Rev. (St. John Hospital),
5 1/4% due 5/15/2026 .................................................................... Aaa/AAA 1,985,340
5,000,000 Michigan State Hospital Finance Authority Rev. (Mercy Health Services
Obligated Group), 5 3/4% due 8/15/2026 .................................................. Aa3/AA- 5,240,100
5,000,000 Michigan State Hospital Finance Authority Rev. (Sparrow Obligated Group),
6% due 11/15/2036 ....................................................................... Aaa/AAA 5,373,700
2,500,000 Michigan State Housing Development Authority Rev. (Single Family Mortgage),
6.80% due 12/1/2016 ..................................................................... NR/AA+ 2,677,400
4,585,000 Michigan State Housing Development Authority Rev. (Rental Housing),
6.65% due 4/1/2023 ...................................................................... NR/AA- 4,923,419
4,000,000 Michigan State Housing Development Authority Rev. (Single Family Mortgage),
6.05% due 12/1/2027 ..................................................................... NR/AA+ 4,178,720
3,000,000 Michigan State Strategic Fund Pollution Control Rev. (Detroit Edison Company),
6 1/2% due 2/15/2016 .................................................................... Aaa/AAA 3,250,170
</TABLE>
- ---------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
20
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
MICHIGAN SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$6,000,000 Michigan State Strategic Fund Pollution Control Rev. (General Motors Corp.),
6.20% due 9/1/2020 ...................................................................... A3/A $ 6,489,480
7,500,000 Michigan State Trunk Line Rev., 5.80% due 11/15/2024 ....................................... Aaa/AAA 7,920,975
2,000,000 Midland, MI Water Supply System Rev., 7.20% due 4/1/2010 ................................... A/A 2,149,160
6,300,000 Oxford, MI Area Community Schools GOs, 5 1/2% due 5/1/2021 ................................. Aaa/AAA 6,486,417
5,000,000 Royal Oak, MI Hospital Finance Authority Rev. (William Beaumont Hospital),
5 1/4% due 1/1/2020 ..................................................................... Aa3/AA 4,942,100
5,000,000 University of Michigan Hospital Rev., 6 3/8% due 12/1/2024 ................................. Aa2/AA 5,225,050
5,000,000 Wayne, MI State University Rev., 5.65% due 11/15/2015 ...................................... Aaa/AAA 5,183,850
3,000,000 Wyandotte, MI Electric Rev., 6 1/4% due 10/1/2017 .......................................... Aaa/AAA 3,264,690
------------
TOTAL MUNICIPAL BONDS (Cost $130,609,356)--95.6% .................................................................. 139,360,673
------------
VARIABLE RATE DEMAND NOTES
--------------------------
2,200,000 Brazos River, TX Pollution Control Authority Rev. due 6/1/2030* ............................ VMIG-1/A-1+ 2,200,000
5,200,000 New York City, NY Municipal Water Finance Authority
Water & Sewer System Rev. due 6/15/2023 ................................................. VMIG-1/A-1+ 5,200,000
400,000 New York State Energy Research & Development Authority
Pollution Control Rev. due 7/1/2027* .................................................... NR/A-1+ 400,000
1,200,000 Sweetwater County, WY Pollution Control Rev. due 12/1/2014 ................................. P-1/A-1+ 1,200,000
-----------
TOTAL VARIABLE RATE DEMAND NOTES (Cost $9,000,000)--6.2% .......................................................... 9,000,000
-----------
OTHER ASSETS LESS LIABILITIES--(1.8)% ............................................................................. (2,601,664)
-----------
NET ASSETS--100.0% ................................................................................................ $145,759,009
============
</TABLE>
MINNESOTA SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$6,250,000 Becker, MN Pollution Control Rev. (Northern States Power Company), 6.80% due 4/1/2007 ...... A1/A+ $6,534,563
1,500,000 Buffalo, MN Independent School District GOs, 6.15% due 2/1/2022 ............................ Aaa/AAA 1,596,480
1,500,000 Cloquet, MN Pollution Control Rev. (Potlatch Corporation Projects), 5.90% due 10/1/2026 .... NR/A- 1,590,240
5,000,000 Edina, MN Housing Development Rev. (Edina Park Plaza Project), 7.70% due 12/1/2028 ......... Aa/NR 5,211,650
3,545,000 Fridley, MN Independent School District GOs, 5.35% due 2/1/2021 ............................ Aaa/AAA 3,577,011
1,200,000 Lakeville, MN Independent School District GOs, 6.70% due 2/1/2015 .......................... Aaa/AAA 1,229,748
1,400,000 Minneapolis-St. Paul Metropolitan Area (Metropolitan Council of the Twin Cities), MN,
5 1/2% due 12/1/2012 .................................................................... Aaa/AAA 1,461,320
5,000,000 Minneapolis-St. Paul, MN Housing & Redevelopment Authority Health Care Rev.
(Children's Health Care), 5 1/2% due 8/15/2025 .......................................... Aaa/AAA 5,121,000
1,500,000 Minneapolis, MN GOs, 6% due 3/1/2016 ....................................................... Aaa/AAA 1,588,530
</TABLE>
- ---------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
21
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
MINNESOTA SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$4,725,000 Minneapolis, MN Rev. (University Gateway Project), 5 1/4% due 12/1/2024 ................... Aa2/AA $ 4,717,913
4,300,000 Minneapolis, MN Special School District GOs, 5% due 2/1/2014 .............................. Aa1/AA+ 4,285,724
2,250,000 Minnesota Agricultural & Economic Development Board Rev.
(Evangelical Lutheran Good Samaritan Society Project), 5.15% due 12/1/2022 ............. Aaa/AAA 2,203,672
2,775,000 Minnesota Higher Education Facilities Authority Rev. (University of St. Thomas),
5.40% due 4/1/2022 ..................................................................... A2/NR 2,810,520
1,000,000 Minnesota Higher Education Facilities Authority Rev. (St. John's University),
5.40% due 10/1/2022 .................................................................... A3/NR 1,013,350
1,160,000 Minnesota Higher Education Facilities Authority Rev. (University of St. Thomas),
5.40% due 4/1/2023 ..................................................................... A2/NR 1,175,208
810,000 Minnesota Housing Finance Agency (Housing Development), 6 1/4% due 2/1/2020 ............... Aa2/AA 821,486
800,000 Minnesota Housing Finance Agency (Single Family Mortgage), 5.65% due 7/1/2022* ............ Aa2/AA 808,920
5,000,000 Minnesota Housing Finance Agency (Single Family Mortgage), 6.85% due 1/1/2024* ............ Aa2/AA 5,292,500
5,500,000 Minnesota Public Facilities Authority Water Pollution Control Rev., 7.10% due 3/1/2012 .... Aaa/AAA 5,926,470
5,000,000 Minnesota State GOs, 5.70% due 5/1/2016 ................................................... Aaa/AAA 5,291,450
5,000,000 North Saint Paul/Maplewood, MN Independent School District GOs, 5 1/8% due 2/1/2025 ....... Aa1/AA+ 4,960,000
5,000,000 Northern Municipal Power Agency, MN Electric System Rev., 7 1/4% due 1/1/2016 ............. A2/A 5,212,100
2,500,000 Northern Municipal Power Agency, MN Electric System Rev., 7.40% due 1/1/2018 .............. Aaa/AAA 2,618,125
2,500,000 Northfield, MN Independent School District GOs, 5 1/4% due 2/1/2017 ....................... Aa1/NR 2,532,725
2,000,000 Ramsey & Washington Counties, MN Resource Recovery Rev. (Northern States Power
Company Project), 6 3/4% due 12/1/2006 ................................................. A1/AA 2,067,260
4,000,000 Rochester, MN Health Care Facilities Rev. (Mayo Foundation/Mayo Medical Center),
7.45% due 11/15/2006 ................................................................... NR/AA+ 4,337,240
4,500,000 Rochester, MN Health Care Facilities Rev. (Mayo Foundation/Mayo Medical Center),
6 1/4% due 11/15/2014 .................................................................. NR/AA+ 4,916,115
1,000,000 Rochester, MN Health Care Facilities Rev. (Mayo Foundation/Mayo Medical Center),
6 1/4% due 11/15/2021 .................................................................. NR/AA+ 1,083,710
2,575,000 Rochester, MN Independent School District GOs, 5 5/8% due 2/1/2016 ........................ Aaa/AA+ 2,705,295
2,715,000 Rochester, MN Independent School District GOs, 5 5/8% due 2/1/2017 ........................ Aaa/AA+ 2,850,587
1,000,000 Saint Cloud, MN Hospital Facilities Rev. (Saint Cloud Hospital), 5% due 7/1/2020 .......... Aaa/AAA 971,160
45,000 Saint Paul Port Authority, MN Industrial Development Rev. Series E, 9 1/8% due 10/1/2000 .. NR/CCC 45,773
5,000 Saint Paul Port Authority, MN Industrial Development Rev. Series H, 9 1/8% due 12/1/2000 .. NR/CCC 5,090
55,000 Saint Paul Port Authority, MN Industrial Development Rev. Series I, 9 1/8% due 12/1/2000 .. NR/CCC 55,989
50,000 Saint Paul Port Authority, MN Industrial Development Rev. Series E, 9 1/8% due 10/1/2001 .. NR/CCC 51,080
10,000 Saint Paul Port Authority, MN Industrial Development Rev. Series H, 9 1/8% due 12/1/2001 .. NR/CCC 10,205
55,000 Saint Paul Port Authority, MN Industrial Development Rev. Series I, 9 1/8% due 12/1/2001 .. NR/CCC 56,127
5,000 Saint Paul Port Authority, MN Industrial Development Rev. Series L, 9 3/4% due 12/1/2001 .. NR/CCC 5,107
</TABLE>
- ---------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
22
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
MINNESOTA SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$ 50,000 Saint Paul Port Authority, MN Industrial Development Rev. Series E, 9 1/8% due 10/1/2002 .. NR/CCC $ 51,122
10,000 Saint Paul Port Authority, MN Industrial Development Rev. Series H, 9 1/8% due 12/1/2002 .. NR/CCC 10,204
60,000 Saint Paul Port Authority, MN Industrial Development Rev. Series I, 9 1/8% due 12/1/2002 .. NR/CCC 61,225
10,000 Saint Paul Port Authority, MN Industrial Development Rev. Series L, 9 3/4% due 12/1/2002 .. NR/CCC 10,214
1,500,000 Southern Minnesota Municipal Power Agency -- Power Supply System Rev.,
5 3/4% due 1/1/2018 .................................................................... A2/A+ 1,545,465
750,000 Southern Minnesota Municipal Power Agency-- Power Supply System Rev.,
5 3/4% due 1/1/2018 .................................................................... Aaa/AAA 779,617
1,500,000 Southern Minnesota Municipal Power Agency-- Power Supply System Rev.,
4 3/4% due 1/1/2016 .................................................................... A2/A+ 1,423,935
3,500,000 Washington County, MN GOs, 5.90% due 2/1/2010 ............................................. Aa2/AA- 3,684,730
3,090,000 Western Minnesota Municipal Power Agency-- Power Supply Rev., 5 1/2% due 1/1/2015 ......... A1/A 3,091,020
9,305,000 Western Minnesota Municipal Power Agency-- Power Supply Rev., 6 3/8% due 1/1/2016 ......... Aaa/AAA 10,409,317
------------
TOTAL MUNICIPAL BONDS (Cost $111,008,639)--95.6% .................................................................... 117,808,292
VARIABLE RATE DEMAND NOTES (Cost $5,700,000)--4.6% .................................................................. 5,700,000
OTHER ASSETS LESS LIABILITIES--(0.2)% ............................................................................... (251,819)
------------
NET ASSETS--100.0% .................................................................................................. $123,256,473
============
</TABLE>
MISSOURI SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$2,000,000 Columbia, MO Water and Electric System Improvement Rev., 6 1/8% due 10/1/2012 ........... A1/AA $ 2,192,140
2,500,000 Curators of the University of Missouri Health Facilities Rev. (University of Missouri
Health System), 5.60% due 11/1/2026 .................................................. Aaa/AAA 2,588,725
1,500,000 Hannibal, MO Industrial Development Authority Health Facilities Rev.
(Hannibal Regional Hospital), 5 3/4% due 3/1/2022 .................................... Aaa/AAA 1,578,660
1,000,000 Joplin, MO Industrial Development Authority Rev. (Catholic Health Initiatives),
5 1/8% due 12/1/2015 ................................................................. Aa2/AA 984,520
1,000,000 Liberty, MO Waterworks Improvement Rev., 6.30% due 10/1/2012 ............................ Aaa/AAA 1,088,290
2,000,000 Little Blue Valley, MO Sewer District Rev., 7 1/4% due 10/1/2007 ........................ Aaa/AAA 2,034,160
565,000 Missouri School Boards Pooled Financing Program Certificates of Participation,
7 3/8% due 3/1/2006 .................................................................. Aaa/AAA 578,865
1,270,000 Missouri School Boards Pooled Financing Program Certificates of Participation,
7% due 3/1/2006 ...................................................................... Aaa/AAA 1,299,223
1,000,000 Missouri State Environmental Improvement & Energy Resources Authority Rev.
(State Revolving Fund Program), 6.55% due 7/1/2014 ................................... Aa1/NR 1,094,560
2,500,000 Missouri State Environmental Improvement & Energy Resources Authority Rev.
(Union Electric Company Project), 5.45% due 10/1/2028* ............................... A1/AA- 2,555,300
</TABLE>
- ---------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
23
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
MISSOURI SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$2,500,000 Missouri State Environmental Improvement & Energy Resources Authority -- Water
Pollution Control Rev. (State Revolving Fund Program), 5.40% due 7/1/2015 ............... Aa1/NR $ 2,544,475
2,000,000 Missouri State GOs, 5 5/8% due 4/1/2017 .................................................... Aaa/AAA 2,086,760
2,500,000 Missouri State Health & Educational Facilities Authority Rev. (Lester E. Cox Medical
Centers Project), 5 1/4% due 6/1/2015 ................................................... Aaa/AAA 2,594,700
1,500,000 Missouri State Health & Educational Facilities Authority Rev. (Sisters of Mercy Health
System, St. Louis, Inc.), 6 1/4% due 6/1/2015 ........................................... Aa1/AA+ 1,600,470
3,500,000 Missouri State Health & Educational Facilities Authority Rev. (SSM Health Care),
6 1/4% due 6/1/2016 ..................................................................... Aaa/AAA 3,785,460
1,000,000 Missouri State Health & Educational Facilities Authority Rev. (Sisters of Mercy Health
System, St. Louis, Inc.), 7 1/4% due 6/1/2019 ........................................... Aaa/AA+ 1,058,910
1,000,000 Missouri State Health & Educational Facilities Authority Rev. (Sisters of Mercy Health
System, St. Louis, Inc.), 5% due 6/1/2019 ............................................... Aa1/AA+ 969,450
2,500,000 Missouri State Health & Educational Facilities Authority Rev. (Barnes-Jewish, Inc./Christian
Health Services), 5 1/4% due 5/15/2021 .................................................. Aa2/AA 2,499,850
2,500,000 Missouri State Health & Educational Facilities Authority Rev. (The Washington University),
5% due 11/15/2037 ....................................................................... Aa1/AA+ 2,396,075
860,000 Missouri State Housing Development Commission Housing Development Bonds
(Federally Insured Mortgage Loans), 6% due 10/15/2019 ................................... Aa2/AA+ 872,556
2,470,000 Missouri State Housing Development Commission Single Family Mortgage Rev.
(Homeownership Loan Program), 5.90% due 9/1/2028* ....................................... NR/AAA 2,552,251
1,000,000 Puerto Rico Highway & Transportation Authority Rev., 5 1/2% due 7/1/2026 ................... Baa1/A 1,022,720
1,500,000 St. Louis, MO Industrial Development Authority Pollution Control Rev. (Anheuser-Busch
Companies, Inc. Project), 6.65% due 5/1/2016 ............................................ A1/A+ 1,765,155
1,500,000 St. Louis, MO Municipal Finance Corporation City Justice Center Leasehold
Improvement Rev., 5.95% due 2/15/2016 ................................................... Aaa/AAA 1,618,110
2,400,000 Southeast Missouri Correctional Facility Lease Rev. (Missouri State Project),
5 3/4% due 10/15/2016 ................................................................... Aa/AA 2,485,032
2,500,000 Springfield, MO Waterworks Rev., 5.60% due 5/1/2023 ........................................ Aa/A+ 2,559,975
2,750,000 University of Missouri Systems Facilities Rev., 5 1/2% due 11/1/2023 ....................... Aa2/AA+ 2,799,307
-----------
TOTAL MUNICIPAL BONDS (Cost $48,479,435)--97.2% ...................................................................... 51,205,699
VARIABLE RATE DEMAND NOTES (Cost $500,000)--1.0% ..................................................................... 500,000
OTHER ASSETS LESS LIABILITIES--1.8% .................................................................................. 956,089
-----------
NET ASSETS--100.0% ................................................................................................... $52,661,788
===========
</TABLE>
- ----------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
24
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
NEW YORK SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$2,490,000 Buffalo Municipal Water Finance Authority, NY Water System Rev., 5% due 7/1/2026 ........... Aaa/AAA $ 2,402,203
3,900,000 Metropolitan Transportation Authority, NY (Transit Facilities Rev.), 6.10% due 7/1/2026 .... Aaa/AAA 4,272,021
4,000,000 New York City Municipal Water Finance Authority Water & Sewer System Rev.,
6 1/4% due 6/15/2020 .................................................................... A2/A- 4,547,560
4,250,000 New York City Municipal Water Finance Authority Water & Sewer System Rev.,
5 1/8% due 6/15/2021 .................................................................... A2/A- 4,151,018
1,775,000 New York City, NY GOs, 7 1/4% due 8/15/2024 ................................................ A3/BBB+ 1,920,248
660,000 New York City, NY GOs, 7 1/4% due 8/15/2024 ................................................ Aaa/BBB+ 725,465
1,500,000 New York City, NY GOs, 6% due 8/1/2026 ..................................................... A3/BBB+ 1,595,910
2,450,000 New York City, NY Industrial Development Agency Civic Facility Rev.
(The Nightingale-Bamford School Project), 5.85% due 1/15/2020 ........................... A3/A 2,544,154
4,000,000 New York City, NY Trust for Cultural Resources Rev. (American Museum of
Natural History), 5.65% due 4/1/2027 .................................................... Aaa/AAA 4,179,680
1,500,000 New York State Dormitory Authority Rev. (Rockefeller University), 7 3/8% due 7/1/2014 ...... Aaa/AAA 1,542,540
4,000,000 New York State Dormitory Authority Rev. (Fordham University), 5 3/4% due 7/1/2015 .......... Aaa/AAA 4,219,800
4,000,000 New York State Dormitory Authority Rev. (Rochester Institute of Technology),
5 1/2% due 7/1/2018 ..................................................................... Aaa/AAA 4,149,240
3,500,000 New York State Dormitory Authority Rev. (Mental Health Services Facilities
Improvement), 5 3/4% due 8/15/2022 ...................................................... A3/A- 3,664,010
4,000,000 New York State Dormitory Authority Rev. (Skidmore College), 5 3/8% due 7/1/2023 ............ Aaa/AAA 4,046,320
1,500,000 New York State Dormitory Authority Rev. (Vassar Brothers Hospital),
5 3/8% due 7/1/2025 ..................................................................... Aaa/AAA 1,514,850
2,000,000 New York State Dormitory Authority Rev. (Rockefeller University), 5% due 7/1/2028 .......... Aaa/AAA 1,951,100
4,000,000 New York State Energy Research & Development Authority Gas Facilities Rev.
(Brooklyn Union Gas), 5 1/2% due 1/1/2021 ............................................... Aaa/AAA 4,118,280
3,000,000 New York State Environmental Facilities Corporation Pollution Control Rev.
(State Water-- Revolving Fund), 6.90% due 11/15/2015 .................................... Aaa/AAA 3,443,550
3,000,000 New York State Housing Finance Agency Rev. (Phillips Village Project),
7 3/4% due 8/15/2017* ................................................................... A2/NR 3,335,370
3,000,000 New York State Local Government Assistance Corp., 6% due 4/1/2024 .......................... A3/A+ 3,245,610
2,000,000 New York State Medical Care Facilities Finance Agency Rev. (The Hospital for Special
Surgery), 6 3/8% due 8/15/2024 .......................................................... Aa2/AA 2,174,120
2,000,000 New York State Mortgage Agency Rev. (Homeowner Mortgage), 7 1/2% due 4/1/2016 .............. Aa2/NR 2,093,440
</TABLE>
- ----------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
25
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
NEW YORK SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$1,000,000 New York State Mortgage Agency Rev. (Homeowner Mortgage),
5 1/2% due 10/1/2028* .................................................................. Aa2/NR $ 1,004,290
1,055,000 New York State Power Authority General Purpose Rev., 6 1/2% due 1/1/2019 .................. Aaa/AAA 1,144,833
4,000,000 New York State Thruway Authority General Rev., 6% due 1/1/2025 ............................ Aaa/AAA 4,283,240
4,000,000 New York State Thruway Authority Service Contract Rev., 6 1/4% due 4/1/2014 ............... Baa1/BBB+ 4,383,760
4,000,000 Onondaga County, NY Industrial Development Agency Sewer Facilities Rev.
(Bristol-Myers Squibb Co. Project), 5 3/4% due 3/1/2024* ............................... Aaa/AAA 4,359,200
2,250,000 Port Authority of New York and New Jersey Consolidated Rev., 6 1/8% due 6/1/2094 .......... A1/AA- 2,591,685
-----------
TOTAL MUNICIPAL BONDS (Cost $78,235,332)--98.8% ...................................................................... 83,603,497
VARIABLE RATE DEMAND NOTES (Cost $1,900,000)--2.2% ................................................................... 1,900,000
OTHER ASSETS LESS LIABILITIES--(1.0)% ................................................................................ (847,229)
-----------
NET ASSETS--100.0% ................................................................................................... $84,656,268
===========
</TABLE>
OHIO SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$2,000,000 Barberton, OH Sewer System Mortgage Rev., 6 5/8% due 12/1/2006 ............................ Aaa/AAA $ 2,044,480
2,250,000 Beavercreek Local School District, OH GOs (School Improvement Bonds),
5.70% due 12/1/2020 .................................................................... Aaa/AAA 2,362,365
3,450,000 Big Walnut Local School District, OH School Building Construction & Improvement
GOs, 7.20% due 6/1/2007 ................................................................ Aaa/AAA 3,825,636
4,000,000 Butler County, OH Transportation Improvement District Highway Improvement Rev.,
5 1/8% due 4/1/2017 .................................................................... Aaa/AAA 3,983,640
4,000,000 Cleveland, OH Airport System Rev., 5 1/8% due 1/1/2027* ................................... Aaa/AAA 3,868,320
2,395,000 Cleveland, OH Airport System Rev., 5 1/8% due 1/1/2027 .................................... Aaa/AAA 2,357,614
5,000,000 Cleveland, OH Public Power System Rev., 5% due 11/15/2024 ................................. Aaa/AAA 4,870,500
5,000,000 Cleveland, OH Waterworks Improvement Rev., 5 3/4% due 1/1/2021 ............................ Aaa/AAA 5,258,550
4,500,000 Columbus, OH Municipal Airport Authority Rev. (Port Columbus International
Airport Project), 6% due 1/1/2020* ..................................................... Aaa/AAA 4,800,690
1,000,000 Columbus, OH Municipal Airport Authority Rev. (Port Columbus International
Airport Project), 5% due 1/1/2028 ...................................................... Aaa/AAA 966,870
3,000,000 Dayton, OH Water System Mortgage Rev., 6 3/4% due 12/1/2010 ............................... Aaa/AAA 3,066,690
7,000,000 Franklin County, OH GOs, 5 3/8% due 12/1/2020 ............................................. Aaa/AAA 7,118,580
7,500,000 Franklin County, OH Hospital Rev. (Riverside United Methodist Hospital),
5 3/4% due 5/15/2020 ................................................................... Aa3/NR 7,746,900
</TABLE>
- ----------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
26
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
OHIO SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$2,500,000 Hamilton County, OH Sewer System Rev., 5 1/2% due 12/1/2017 ............................... Aaa/AAA $ 2,572,200
5,000,000 Hamilton, OH Electric System Mortgage Rev., 6% due 10/15/2023 ............................. Aaa/AAA 5,384,250
4,000,000 Hudson Local School District, OH GOs, 7.10% due 12/15/2013 ................................ A1/NR 4,387,720
1,095,000 Lake County, OH Hospital Improvement Rev. (Lake Hospital System Inc.),
8% due 1/1/2013 ........................................................................ Aaa/AAA 1,114,951
6,425,000 Mahoning County, OH Hospital Rev. (Forum Health Obligated Group),
5% due 11/15/2025 ...................................................................... Aaa/AAA 6,219,079
2,000,000 Montgomery County, OH Catholic Health Initiatives Rev., 5 1/8% due 12/1/2017 .............. Aa2/AA 1,979,100
4,830,000 Mount Vernon, OH Hospital Rev. (Knox Community Hospital), 7 7/8% due 6/1/2012 ............. NR/NR 4,962,294
2,000,000 Ohio Air Quality Development Authority Rev. (Cincinnati Gas & Electric
Company Project), 5.45% due 1/1/2024 ................................................... Aaa/AAA 2,033,940
6,500,000 Ohio Air Quality Development Authority Rev. (JMG Project), 6 3/8% due 1/1/2029* ........... Aaa/AAA 7,100,275
4,415,000 Ohio Housing Finance Agency Residential Mortgage Rev. (Mortgage-Backed
Securities Program), 6.10% due 9/1/2028* ............................................... NR/AAA 4,641,136
3,000,000 Ohio State GOs Infrastructure Improvement, 6 1/2% due 8/1/2011 ............................ Aa1/AA+ 3,246,240
3,000,000 Ohio State Higher Educational Facilities Commission Rev. (Oberlin College Project),
5 3/8% due 10/1/2015 ................................................................... NR/AA 3,050,880
4,000,000 Ohio State Higher Educational Facilities Commission Rev. (University of Dayton Project),
5.40% due 12/1/2022 .................................................................... Aaa/AAA 4,071,120
2,000,000 Ohio State Liquor Profits Rev., 6.85% due 3/1/2000 ........................................ Aaa/AAA 2,109,180
6,000,000 Ohio State Public Facilities Commission Rev. (Higher Education Capital Facilities),
6.30% due 5/1/2006 ..................................................................... Aaa/AAA 6,492,300
2,330,000 Ohio State Water Development Authority Rev. (Safe Water), 9 3/8% due 12/1/2010 ............ Aaa/AAA 2,968,094
5,000,000 Ohio State Water Development Authority Rev. (Community Assistance),
5 3/8% due 12/1/2024 ................................................................... Aaa/AAA 5,084,200
5,000,000 Ohio State Water Development Authority Rev. (Dayton Power & Light Co. Project),
6.40% due 8/15/2027 .................................................................... Aa3/AA- 5,384,850
2,500,000 Ohio State Water Development Authority Solid Waste Disposal Rev. (North Star BHP
Steel, L.L.C. Project-- Cargill, Incorporated, Guarantor), 6.30% due 9/1/2020* ......... Aa3/AA- 2,692,925
3,000,000 Ohio Turnpike Commission, OH Turnpike Rev., 5.70% due 2/15/2017 ........................... Aaa/AAA 3,169,050
2,955,000 Pickerington Local School District, OH School Building Construction GOs,
8% due 12/1/2005 ....................................................................... Aaa/AAA 3,439,413
4,000,000 Puerto Rico Highway & Transportation Authority Rev., 5 1/2% due 7/1/2036 .................. Baa1/A 4,178,520
775,000 Toledo, OH Sewer System Rev., 7 3/4% due 11/15/2017 ....................................... Aaa/AAA 808,495
560,000 Toledo, OH Waterworks Rev., 7 3/4% due 11/15/2017 ......................................... Aaa/AAA 584,203
2,500,000 Twinsburg City School District, OH School Improvement GOs, 5.90% due 12/1/2021 ............ Aaa/AAA 2,679,800
</TABLE>
- ---------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
27
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
OHIO SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$3,000,000 University of Toledo, OH General Receipts Bonds, 7.10% due 6/1/2010 ....................... Aaa/AAA $ 3,250,350
2,000,000 Worthington City School District, OH School Building Construction & Improvement
GOs, 8 3/4% due 12/1/2002 .............................................................. Aaa/AAA 2,195,020
------------
TOTAL MUNICIPAL BONDS (Cost $139,597,238)--96.2% .................................................................... 148,070,420
VARIABLE RATE DEMAND NOTES (Cost $3,600,000)--2.3% .................................................................. 3,600,000
OTHER ASSETS LESS LIABILITIES--1.5% ................................................................................. 2,308,808
------------
NET ASSETS--100.0% .................................................................................................. $153,979,228
============
</TABLE>
OREGON SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$1,000,000 Albany, OR GOs Water Bonds, 6 5/8% due 11/1/2009 .......................................... Aaa/AAA $ 1,002,350
2,000,000 Chemeketa, OR Community College District GOs, 5.95% due 6/1/2016 .......................... Aaa/AAA 2,157,380
1,000,000 Clackamas & Washington Counties, OR GOs (West Linn-Wilsonville School District),
5% due 6/1/2017 ........................................................................ Aaa/AAA 986,590
2,000,000 Eugene, OR Electric Utility Rev., 5.80% due 8/1/2022 ...................................... Aaa/AAA 2,183,420
1,500,000 Eugene, OR Trojan Nuclear Project Rev., 5.90% due 9/1/2009 ................................ Aa1/AA- 1,502,010
2,500,000 Hillsboro, OR Hospital Facilities Authority Rev. (Tuality Healthcare),
5 3/4% due 10/1/2012 ................................................................... NR/BBB+ 2,565,875
1,250,000 Multnomah County, OR Education Facility Rev. (University of Portland),
5% due 4/1/2018 ........................................................................ Aaa/AAA 1,226,763
1,250,000 Multnomah County School District, OR GOs, 6.80% due 12/15/2004 ............................ Aa/A+ 1,257,550
1,750,000 Multnomah County School District, OR GOs, 5 1/2% due 6/1/2015 ............................. A1/A+ 1,811,513
2,000,000 North Clackamas Parks & Recreation District -- Clackamas County, OR Rev.
(Recreational Facilities), 5.70% due 4/1/2013 .......................................... NR/A- 2,072,280
2,000,000 North Wasco County People's Utility District-- Wasco County, OR Rev.
(Bonneville Power Administration), 5.20% due 12/1/2024 ................................. Aa1/AA- 1,994,120
750,000 Ontario, OR Hospital Facility Authority Health Facilities Rev. Catholic Health
Corporation (Dominican Sisters of Ontario Inc., d.b.a. Holy Rosary Medical
Center Project), 6.10% due 11/15/2017 .................................................. A1/AA- 792,510
2,500,000 Oregon Department of Administrative Services Certificates of Participation,
5.80% due 5/1/2024 ..................................................................... Aaa/AAA 2,642,575
1,000,000 Oregon Department of Transportation Regional Light Rail Extension Rev.,
6.20% due 6/1/2008 ..................................................................... Aaa/AAA 1,108,070
2,500,000 Oregon Health, Housing, Educational & Cultural Facilities Authority Rev.
(Reed College Project), 5 3/8% due 7/1/2025 ............................................ NR/A+ 2,540,175
1,250,000 Oregon Health Sciences University Rev., 5 1/4% due 7/1/2028 ............................... Aaa/AAA 1,249,888
</TABLE>
- ----------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
28
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
OREGON SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$2,000,000 Oregon Housing & Community Services Department Housing & Finance Rev.
(Assisted or Insured Multi-Unit Program), 5 3/4% due 7/1/2012 .......................... AA2/A+ $ 2,047,360
925,000 Oregon Housing & Community Services Department Mortgage Rev. (Single Family
Mortgage Program), 5.65% due 7/1/2019* ................................................. Aa2/NR 941,585
840,000 Oregon Housing & Community Services Department Mortgage Rev. (Single Family
Mortgage Program), 7% due 7/1/2022* .................................................... Aa2/NR 883,571
1,000,000 Oregon Housing & Community Services Department Mortgage Rev. (Single Family
Mortgage Program), 6% due 7/1/2027* .................................................... Aa2/NR 1,041,060
500,000 Oregon State GOs (Veterans' Welfare), 9% due 10/1/2006 .................................... Aa2/AA 660,805
1,460,000 Oregon State GOs (Veterans' Welfare), 5 7/8% due 10/1/2018 ................................ Aa2/AA 1,516,502
500,000 Oregon State GOs (Alternate Energy Project), 8.40% due 1/1/2008 ........................... Aa2/AA 528,025
250,000 Oregon State GOs (Elderly & Disabled Housing), 7.20% due 8/1/2021 ......................... Aa2/AA 270,440
1,000,000 Oregon State GOs (Elderly & Disabled Housing), 6.60% due 8/1/2022* ........................ Aa2/AA 1,094,110
950,000 Port of Portland, OR International Airport Rev., 7.10% due 7/1/2021* ...................... Aaa/AAA 1,157,860
50,000 Port of Portland, OR International Airport Rev., 7.10% due 7/1/2021* ...................... Aaa/AAA 54,081
500,000 Port of Portland, OR International Airport Rev., 5 3/4% due 7/1/2025* ..................... Aaa/AAA 521,680
1,500,000 Port of Portland, OR International Airport Rev., 5 5/8% due 7/1/2026* ..................... Aaa/AAA 1,548,825
2,000,000 Portland, OR GOs, 5.60% due 6/1/2014 ...................................................... Aa/NR 2,103,040
1,250,000 Portland, OR Hospital Facilities Authority Rev. (Legacy Health System),
6 5/8% due 5/1/2011 .................................................................... Aaa/AAA 1,349,287
2,500,000 Portland, OR Sewer System Rev., 5% due 6/1/2015 ........................................... Aaa/AAA 2,482,750
1,000,000 Puerto Rico Highway & Transportation Authority Rev., 5 1/2% due 7/1/2026 .................. Baa1/A 1,022,720
630,000 Puerto Rico Housing Finance Corp. (Single Family Mortgage Rev.),
6.85% due 10/15/2023 ................................................................... Aaa/AAA 668,562
1,000,000 Puerto Rico Ports Authority Rev., 7% due 7/1/2014* ........................................ Aaa/AAA 1,087,260
1,000,000 Puerto Rico Telephone Authority Rev., 5 1/2% due 1/1/2013 ................................. A/A+ 1,038,120
2,600,000 Salem, OR Pedestrian Safety Improvements GOs, 5 3/4% due 5/1/2011 ........................ Aaa/AAA 2,781,714
1,000,000 Tri-County Metropolitan Transportation District of Oregon GOs (Light Rail Extension),
6% due 7/1/2012 ........................................................................ Aa/AA+ 1,058,870
1,110,000 Tualatin Development Commission, OR (Urban Renewal & Redevelopment),
7 3/8% due 1/1/2007 .................................................................... Baa1/NR 1,118,369
1,500,000 Washington County, OR Unified Sewerage Agency Rev., 5 3/4% due 10/1/2011 .................. Aaa/AAA 1,654,545
-----------
TOTAL MUNICIPAL BONDS (Cost $52,462,207)--97.4% ..................................................................... 55,724,210
VARIABLE RATE DEMAND NOTES (Cost $400,000)--0.7% .................................................................... 400,000
OTHER ASSETS LESS LIABILITIES--1.9% ................................................................................. 1,063,795
-----------
NET ASSETS--100.0% .................................................................................................. $57,188,005
===========
</TABLE>
- ----------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
29
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
SOUTH CAROLINA SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$2,500,000 Anderson County, SC Hospital Rev. (Anderson Memorial Hospital), 5 1/4% due 2/1/2012 ....... Aaa/AAA $ 2,529,850
3,800,000 Berkeley County, SC Water & Sewer Rev., 5.55% due 6/1/2016 ................................ Aaa/AAA 3,918,750
745,000 Charleston County, SC Public Facilities Corp. Certificates of Participation,
7.15% due 2/1/2004 ..................................................................... A1/A 796,122
770,000 Charleston County, SC Public Facilities Corp. Certificates of Participation,
7.15% due 8/1/2004 ..................................................................... A1/A 822,838
800,000 Charleston County, SC Public Facilities Corp. Certificates of Participation,
7.20% due 2/1/2005 ..................................................................... A1/A 852,576
2,500,000 Charleston, SC Waterworks & Sewer System Rev., 6% due 1/1/2012 ............................ A1/AA- 2,676,475
1,500,000 Clemson University, SC Student & Faculty Housing Rev., 6.65% due 6/1/2011 ................. Aaa/AAA 1,614,060
1,000,000 Clinton, SC Utility System Rev., 7.20% due 6/1/2011 ....................................... Baa1/NR 1,086,380
6,000,000 Darlington County, SC Industrial Development Rev. (Nucor Corporation Project),
5 3/4% due 8/1/2023* ................................................................... A1/AA- 6,187,560
2,000,000 Darlington County, SC Industrial Development Rev. (Sonoco Products Company Project),
6% due 4/1/2026* ....................................................................... A2/A 2,123,540
2,500,000 Fairfield County, SC Pollution Control Rev. (South Carolina Electric & Gas Company),
6 1/2% due 9/1/2014 .................................................................... A1/A 2,738,575
1,000,000 Georgetown County, SC Pollution Control Facilities Rev. (International Paper Company),
7 3/8% due 6/15/2005 ................................................................... A3/A- 1,041,430
3,000,000 Greenville Hospital System, SC Hospital Facilities Rev., 5 1/2% due 5/1/2016 .............. NR/AA- 3,050,850
2,000,000 Greenville Hospital System, SC Hospital Facilities Rev., 5 1/4% due 5/1/2023 .............. Aa3/AA 1,980,640
3,000,000 Greenwood County, SC Hospital Facilities Rev. (Self Memorial Hospital),
5 7/8% due 10/1/2017 ................................................................... Aaa/AAA 3,140,550
2,425,000 Lancaster County, SC School District GOs, 6.60% due 7/1/2011 .............................. Aaa/AAA 2,696,867
2,600,000 Lancaster County, SC School District GOs, 6.60% due 7/1/2012 .............................. Aaa/AAA 2,891,486
2,000,000 Lancaster County, SC Waterworks & Sewer System Rev., 5 1/4% due 5/1/2021 .................. Aaa/AAA 1,997,240
2,720,000 Laurens County, SC Combined Utility System Rev., 5% due 1/1/2018 .......................... Aaa/AAA 2,656,406
5,000,000 Lexington County,SC Hospital Rev. (Health Services District, Inc.),
5 1/8% due 11/1/2026 ................................................................... Aaa/AAA 4,864,500
1,000,000 Lexington County School District, SC Certificates of Participation (Red Bank/White
Knoll Elementary Project), 7.10% due 9/1/2011 .......................................... Aaa/AAA 1,096,950
1,000,000 Medical University South Carolina Hospital Facilities Rev., 5.60% due 7/1/2011 ............ Aaa/AAA 1,084,850
3,000,000 Mount Pleasant, SC Water & Sewer Rev., 6% due 12/1/2020 ................................... Aaa/AAA 3,234,720
2,000,000 Myrtle Beach, SC Waterworks & Sewer System Rev., 5 1/4% due 3/1/2020 ...................... Aaa/AAA 1,997,320
1,500,000 North Charleston Sewer District, SC Rev., 6 3/8% due 7/1/2012 ............................. Aaa/AAA 1,743,375
1,500,000 North Charleston Sewer District, SC Rev., 7 3/4% due 8/1/2018 ............................. Aaa/AAA 1,549,920
5,000,000 Oconee County, SC Pollution Control Rev. (Duke Power Co. Project), 5.80% due 4/1/2014 ..... Aa2/AA- 5,242,850
1,250,000 Piedmont Municipal Power Agency, SC Electric Rev., 6 1/4% due 1/1/2021 .................... Aaa/AAA 1,448,975
</TABLE>
- ----------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
30
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1998
SOUTH CAROLINA SERIES (CONTINUED)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------ --------------- ----------- ---------
<S> <C> <C> <C>
$4,000,000 Piedmont Municipal Power Agency, SC Electric Rev., 6.30% due 1/1/2022 ..................... Aaa/AAA $ 4,427,320
1,000,000 Puerto Rico Highway & Transportation Authority Rev., 5 1/2%, due 7/1/2036 ................. Baa1/A 1,044,630
2,000,000 Puerto Rico Highway & Transportation Authority Rev., 5% due 7/1/2038 ...................... Baa1/A 1,897,240
2,500,000 Puerto Rico Industrial, Tourist, Educational,Medical & Environmental Control Facilities
Financing Authority Higher Education Rev. (Inter-American University of Puerto Rico
Project), 5% due 10/1/2022 ............................................................ Aaa/AAA 2,437,950
1,000,000 Puerto Rico Telephone Authority Rev., 5 1/2% due 1/1/2022 ................................. A/A+ 1,022,520
2,000,000 Richland County, SC Solid Waste Disposal Facilities Rev. (Union Camp Corp. Project),
7.45% due 4/1/2021* .................................................................... A1/A- 2,187,040
1,000,000 Richland County, SC Solid Waste Disposal Facilities Rev. (Union Camp Corp. Project),
7 1/8% due 9/1/2021* ................................................................... A1/A- 1,091,070
5,000,000 Rock Hill, SC Combined Utilities System Rev., 5% due 1/1/2020 ............................. Aaa/AAA 4,832,350
2,000,000 South Carolina Jobs--Economic Development Authority Hospital Rev.
(Georgetown Memorial Hospital), 5% due 11/1/2029 ....................................... Aaa/AAA 1,905,460
6,000,000 South Carolina Public Service Authority Rev., 5 7/8% due 1/1/2023 ......................... Aaa/AAA 6,391,200
1,740,000 South Carolina State Housing Authority (Single Family Mortgage Purchase),
6.70% due 7/1/2010 ..................................................................... Aaa/AAA 1,762,237
500,000 South Carolina State Housing Finance & Development Authority (Homeownership
Mortgage), 7.55% due 7/1/2011 .......................................................... Aa2/AA 525,435
2,180,000 South Carolina State Housing Finance & Development Authority Rental Housing Rev.
(North Bluff Project), 5.60% due 7/1/2016 .............................................. NR/AA 2,199,162
1,000,000 South Carolina State Housing Finance & Development Authority (Multi-Family
Development Rev.), 6 7/8% due 11/15/2023 ............................................... Aaa/NR 1,056,890
5,000,000 Spartanburg, SC Water System Rev., 5% due 6/1/2027 ........................................ Aaa/AAA 4,828,550
3,000,000 University of South Carolina Rev., 5 3/4% due 6/1/2026 .................................... Aaa/AAA 3,152,340
2,000,000 Western Carolina Regional Sewer Authority, SC Sewer System Rev., 5 1/2% due 3/1/2010 ...... Aaa/AAA 2,091,060
------------
TOTAL MUNICIPAL BONDS (Cost $103,041,267)--100.3% .................................................................. 109,918,109
VARIABLE RATE DEMAND NOTES (Cost $200,000)--0.2% ................................................................... 200,000
OTHER ASSETS LESS LIABILITIES--(0.5)% .............................................................................. (477,210)
------------
NET ASSETS--100.0% ................................................................................................. $109,640,899
============
</TABLE>
- ----------------------
+ Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject to the federal
alternative minimum tax.
See Notes to Financial Statements.
31
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
March 31, 1998
<TABLE>
<CAPTION>
NATIONAL COLORADO GEORGIA LOUISIANA MARYLAND
SERIES SERIES SERIES SERIES SERIES
------------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (see Portfolios
of Investments):
Long-term holdings ..................... $ 99,044,026 $ 44,149,897 $49,164,987 $55,271,643 $ 53,079,362
Short-term holdings .................... 1,900,000 1,400,000 300,000 400,000 700,000
------------ ------------ ----------- ----------- ------------
100,944,026 45,549,897 49,464,987 55,671,643 53,779,362
Cash ..................................... 104,017 110,241 261,542 100,284 113,815
Interest receivable ...................... 1,609,541 855,695 787,698 965,620 923,093
Receivable for Capital Stock sold ........ 16,462 -- 23,125 -- 9,607
Expenses prepaid to shareholder
service agent ............................ 12,572 6,477 6,477 6,096 7,238
Receivable for securities sold ........... -- -- -- 35,000 --
Other .................................... 6,077 6,349 5,901 6,436 8,955
------------ ------------ ----------- ----------- ------------
TOTAL ASSETS ............................. 102,692,695 46,528,659 50,549,730 56,785,079 54,842,070
------------ ------------ ----------- ----------- ------------
LIABILITIES:
Dividends payable ........................ 188,620 85,846 88,994 106,231 102,740
Payable for Capital Stock repurchased .... 21,187 34,799 25,597 24,711 40,011
Payable for securities purchased ......... -- -- -- -- --
Accrued expenses, taxes, and other ....... 136,050 83,073 79,699 88,875 86,707
------------ ------------ ----------- ----------- ------------
TOTAL LIABILITIES ........................ 345,857 203,718 194,290 219,817 229,458
------------ ------------ ----------- ----------- ------------
NET ASSETS ............................... $102,346,838 $ 46,324,941 $50,355,440 $56,565,262 $ 54,612,612
============ ============ =========== =========== ============
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A ................................ $ 11,846 $ 6,145 $ 5,781 $ 6,710 $ 6,392
Class D ................................ 700 29 350 60 278
Additional paid-in capital ............... 98,243,893 43,993,683 46,518,062 52,556,264 50,918,513
Undistributed/accumulated net realized
gain (loss) .............................. (2,198,938) (712,378) 275,944 77,903 96,948
Net unrealized appreciation of investments 6,289,337 3,037,462 3,555,303 3,924,325 3,590,481
------------- ------------ ----------- ----------- ------------
NET ASSETS ............................... $ 102,346,838 $ 46,324,941 $50,355,440 $56,565,262 $ 54,612,612
============= ============ =========== =========== ============
NET ASSETS:
Class A ................................ $ 96,633,486 $ 46,109,770 $47,476,331 $56,068,327 $ 52,330,229
Class D ................................ $ 5,713,352 $ 215,171 $ 2,879,109 $ 496,935 $ 2,282,383
SHARES OF CAPITAL STOCK OUTSTANDING
($.001 par value):
Class A ................................ 11,845,673 6,145,665 5,780,860 6,710,320 6,391,587
Class D ................................ 700,469 28,702 349,832 59,494 278,549
NET ASSET VALUE PER SHARE:
CLASS A ................................ $8.16 $7.50 $8.21 $8.36 $8.19
Class D ................................ $8.16 $7.50 $8.23 $8.35 $8.19
</TABLE>
- -------------
See Notes to Financial Statements.
32
<PAGE>
<TABLE>
<CAPTION>
MASSACHUSETTS MICHIGAN MINNESOTA MISSOURI NEW YORK
SERIES SERIES SERIES SERIES SERIES
------------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (see Portfolios
of Investments):
Long-term holdings ..................... $103,634,020 $139,360,673 $117,808,292 $51,205,699 $ 83,603,497
Short-term holdings .................... 4,800,000 9,000,000 5,700,000 500,000 1,900,000
------------ ------------ ------------ ----------- ------------
108,434,020 148,360,673 123,508,292 51,705,699 85,503,497
Cash ..................................... 150,049 147,068 121,226 157,075 144,978
Interest receivable ...................... 1,474,172 2,581,311 1,894,253 979,762 1,259,621
Receivable for Capital Stock sold ........ 8,068 62,424 98,684 7,157 12,337
Expenses prepaid to shareholder
service agent ............................ 13,715 17,906 17,144 6,476 9,905
Receivable for securities sold ........... -- -- -- 30,148 --
Other .................................... 5,250 7,832 7,916 6,253 8,873
------------ ------------ ------------ ----------- ------------
TOTAL ASSETS ............................. 110,085,274 151,177,214 125,647,515 52,892,570 86,939,211
------------ ------------ ------------ ----------- ------------
LIABILITIES:
Dividends payable ........................ 187,252 267,594 233,157 93,432 153,783
Payable for Capital Stock repurchased .... 95,036 105,579 319,649 50,500 53,513
Payable for securities purchased ......... 4,515,813 4,885,575 1,682,456 -- 1,964,378
Accrued expenses, taxes, and other ....... 133,580 159,457 155,780 86,850 111,269
----------- ------------ ------------ ----------- ------------
TOTAL LIABILITIES ........................ 4,931,681 5,418,205 2,391,042 230,782 2,282,943
------------ ------------ ------------ ----------- ------------
NET ASSETS ............................... $105,153,593 $145,759,009 $123,256,473 $52,661,788 $ 84,656,268
============ ============ ============ =========== ============
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A ................................ $ 12,906 $ 16,685 $ 15,529 $ 6,680 $ 9,953
Class D ................................ 181 190 231 43 203
Additional paid-in capital ............... 98,654,757 135,536,259 116,364,156 49,643,734 78,209,080
Undistributed/accumulated net realized
gain (loss) .............................. 330,037 1,454,558 76,904 285,067 1,068,867
Net unrealized appreciation of investments 6,155,712 8,751,317 6,799,653 2,726,264 5,368,165
------------ ------------ ------------ ----------- ------------
Net Assets ............................... $105,153,593 $145,759,009 $123,256,473 $52,661,788 $ 84,656,268
============ ============ ============ =========== ============
NET ASSETS:
Class A ................................ $103,703,612 $144,117,113 $121,449,363 $52,322,865 $ 82,964,697
Class D ................................ $ 1,449,981 $ 1,641,896 $ 1,807,110 $ 338,923 $ 1,691,571
SHARES OF CAPITAL STOCK OUTSTANDING
($.001 par value):
Class A ................................ 12,906,051 16,685,157 15,528,628 6,679,289 9,953,488
Class D ................................ 180,535 190,302 231,006 43,263 202,753
NET ASSET VALUE PER SHARE:
CLASS A ................................ $8.04 $8.64 $7.82 $7.83 $8.34
Class D ................................ $8.03 $8.63 $7.82 $7.83 $8.34
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OHIO OREGON SOUTH CAROLINA
SERIES SERIES SERIES
------------ ------------ --------------
<S> <C> <C> <C>
ASSETS:
Investments, at value (see Portfolios
of Investments):
Long-term holdings ..................... $148,070,420 $ 55,724,210 $109,918,109
Short-term holdings .................... 3,600,000 400,000 200,000
------------ ------------ ------------
151,670,420 56,124,210 110,118,109
Cash ..................................... 156,201 172,116 1,609,793
Interest receivable ...................... 2,652,825 1,038,172 1,725,573
Receivable for Capital Stock sold ........ 72,620 66,284 198,329
Expenses prepaid to shareholder
service agent ............................ 19,049 7,619 12,953
Receivable for securities sold ........... -- -- --
Other .................................... 7,929 5,612 7,145
------------ ------------ ------------
TOTAL ASSETS ............................. 154,579,044 57,414,013 113,671,902
------------ ------------ ------------
LIABILITIES:
Dividends payable ........................ 292,527 102,325 199,563
Payable for Capital Stock repurchased .... 128,494 35,937 273,452
Payable for securities purchased ......... -- -- 3,420,936
Accrued expenses, taxes, and other ....... 178,795 87,746 137,052
------------ ------------ ------------
Total Liabilities ........................ 599,816 226,008 4,031,003
------------ ------------ ------------
Net Assets ............................... $153,979,228 $ 57,188,005 $109,640,899
============ ============ ============
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A ................................ $ 18,665 $ 7,029 $ 12,812
Class D ................................ 152 231 537
Additional paid-in capital ............... 143,734,535 53,711,066 102,646,778
Undistributed/accumulated net realized
gain (loss) .............................. 1,752,694 207,676 103,930
Net unrealized appreciation of investments 8,473,182 3,262,003 6,876,842
------------ ------------ ------------
NET ASSETS ............................... $153,979,228 $ 57,188,005 $109,640,899
============ ============ ============
NET ASSETS:
Class A ................................ $152,729,886 $ 55,371,612 $105,236,627
Class D ................................ $ 1,249,342 $ 1,816,393 $ 4,404,272
SHARES OF CAPITAL STOCK OUTSTANDING
($.001 par value):
Class A ................................ 18,665,153 7,029,608 12,812,040
Class D ................................ 151,948 230,764 536,725
NET ASSET VALUE PER SHARE:
CLASS A ................................ $8.18 $7.88 $8.21
Class D ................................ $8.22 $7.87 $8.21
</TABLE>
33
<PAGE>
STATEMENTS OF OPERATIONS
For the Six Months ended March 31, 1998
<TABLE>
<CAPTION>
NATIONAL COLORADO GEORGIA LOUISIANA MARYLAND
SERIES SERIES SERIES SERIES SERIES
---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
INTEREST................................. $2,911,467 $1,404,833 $1,404,780 $1,640,627 $1,577,418
---------- ---------- ---------- ---------- ----------
EXPENSES:
Management fees ......................... 257,177 121,431 127,531 142,049 136,011
Distribution and service fees ........... 68,122 25,945 35,623 31,228 35,268
Shareholder account services ............ 63,616 33,224 34,489 32,806 37,828
Auditing and legal fees ................. 16,804 18,400 17,558 20,935 18,230
Registration ............................ 10,660 2,564 3,386 3,288 3,899
Custody and related services ............ 9,295 6,210 7,157 5,900 5,368
Shareholder reports and communications .. 7,275 5,938 5,502 5,543 6,116
Directors' fees and expenses ............ 3,888 3,308 3,306 3,397 3,410
Miscellaneous ........................... 2,927 1,860 1,926 1,970 1,967
---------- ---------- ---------- ---------- ----------
TOTAL EXPENSES .......................... 439,764 218,880 236,478 247,116 248,097
---------- ---------- ---------- ---------- ----------
NET INVESTMENT INCOME............. ...... 2,471,703 1,185,953 1,168,302 1,393,511 1,329,321
---------- ---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain on investments ........ 735,517 620,933 364,395 80,620 95,885
Net change in unrealized appreciation
of investments .......................... 1,095,389 (89,663) 438,961 560,127 508,989
---------- ---------- ---------- ---------- ----------
NET GAIN ON INVESTMENTS ................. 1,830,906 531,270 803,356 640,747 604,874
---------- ---------- ---------- ---------- ----------
INCREASE IN NET ASSETS FROM OPERATIONS .. $4,302,609 $1,717,223 $1,971,658 $2,034,258 $1,934,195
========== ========== ========== ========== ==========
- -------------
See Notes to Financial Statements.
</TABLE>
34
<PAGE>
STATEMENTS OF OPERATIONS
For the Six Months ended March 31, 1998
<TABLE>
<CAPTION>
MASSACHUSETTS MICHIGAN MINNESOTA MISSOURI NEW YORK
SERIES SERIES SERIES SERIES SERIES
------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
INTEREST................................. $3,130,385 $4,089,176 $3,539,334 $1,472,169 $2,405,250
---------- ---------- ---------- ---------- ----------
EXPENSES:
Management fees .......................... 274,725 363,836 307,691 132,213 213,407
Distribution and service fees ............ 58,048 75,130 66,920 28,171 44,844
Shareholder account services ............. 68,059 92,286 87,348 35,724 49,194
Auditing and legal fees .................. 18,077 17,192 19,017 18,831 16,804
Registration ............................. 4,336 3,715 4,690 3,895 3,844
Custody and related services ............. 12,290 9,441 9,787 5,719 8,576
Shareholder reports and communications 5,958 6,990 8,980 5,686 5,096
Directors' fees and expenses ............. 3,917 3,878 4,051 3,342 3,704
Miscellaneous ............................ 3,033 3,741 3,437 1,830 2,431
---------- ---------- ---------- ---------- ----------
Total Expenses ........................... 448,443 576,209 511,921 235,411 347,900
---------- ---------- ---------- ---------- ----------
NET INVESTMENT INCOME..................... 2,681,942 3,512,967 3,027,413 1,236,758 2,057,350
---------- ---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain on investments ......... 333,623 1,452,843 900,023 341,332 1,723,183
Net change in unrealized appreciation
of investments ........................... 1,592,486 515,989 (271,458) 205,704 (301,887)
---------- ---------- ---------- ---------- ----------
Net Gain on Investments .................. 1,926,109 1,968,832 628,565 547,036 1,421,296
---------- ---------- ---------- ---------- ----------
INCREASE IN NET ASSETS FROM OPERATIONS ... $4,608,051 $5,481,799 $3,655,978 $1,783,794 $3,478,646
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
OHIO OREGON SOUTH CAROLINA
SERIES SERIES SERIES
---------- ---------- --------------
<S> <C> <C> <C>
INVESTMENT INCOME:
INTEREST.......................... ....... $4,444,745 $1,581,724 $2,956,440
---------- ---------- ----------
EXPENSES:
Management fees .......................... 386,252 142,299 264,290
Distribution and service fees ............ 78,088 34,826 67,672
Shareholder account services ............. 97,129 38,405 66,424
Auditing and legal fees .................. 17,411 19,288 17,405
Registration ............................. 5,872 3,283 3,814
Custody and related services ............. 7,951 6,366 9,113
Shareholder reports and communications ... 8,861 5,070 5,292
Directors' fees and expenses ............. 4,320 3,368 3,773
Miscellaneous ............................ 4,008 1,949 2,937
---------- ---------- ----------
Total Expenses ........................... 609,892 254,854 440,720
---------- ---------- ----------
NET INVESTMENT INCOME............. ....... 3,834,853 1,326,870 2,515,720
---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain on investments ......... 2,743,883 211,815 593,739
Net change in unrealized appreciation
of investments ........................... (767,990) 544,241 994,042
---------- ---------- ----------
Net Gain on Investments .................. 1,975,893 756,056 1,587,781
---------- ---------- ----------
INCREASE IN NET ASSETS FROM OPERATIONS ... $5,810,746 $2,082,926 $4,103,501
========== ========== ==========
</TABLE>
35
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NATIONAL SERIES COLORADO SERIES GEORGIA SERIES
-------------------------- ------------------------ ------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
3/31/98 9/30/97 3/31/98 9/30/97 3/31/98 9/30/97
------------ ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income .................... $ 2,471,703 $ 5,074,538 $ 1,185,953 $ 2,552,660 $ 1,168,302 $ 2,496,948
Net realized gain (loss) on investments .. 735,517 278,366 620,933 (1,295,378) 364,395 117,571
Net change in unrealized
appreciation of investments .............. 1,095,389 3,753,003 (89,663) 2,352,484 438,961 1,648,469
------------ ------------ ----------- ----------- ----------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS ... 4,302,609 9,105,907 1,717,223 3,609,766 1,971,658 4,262,988
------------ ------------ ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ............................... (2,372,687) (4,906,738) (1,181,142) (2,542,330) (1,117,259) (2,406,265)
Class D ............................... (99,016) (167,800) (4,811) (10,330) (51,043) (90,683)
Net realized gain on investments:
Class A ............................... -- -- -- -- (187,062) (180,236)
Class D ............................... -- -- -- -- (10,787) (6,873)
------------ ------------ ----------- ----------- ----------- -----------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS ............................ (2,471,703) (5,074,538) (1,185,953) (2,552,660) (1,366,151) (2,684,057)
------------ ------------ ----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ............................... 1,534,093 3,114,125 617,847 1,076,262 885,296 4,134,682
Class D ............................... 399,993 475,323 42,426 32,754 516,933 1,056,744
Net asset value of shares issued in
payment of dividends:
Class A ............................... 1,292,458 2,676,250 651,724 1,383,913 719,364 1,593,994
Class D ............................... 64,971 108,599 3,109 6,306 43,802 74,720
Exchanged from associated funds:
Class A ............................... 3,675,276 5,221,126 1,504,576 2,519,749 70,243 220,471
Class D ............................... 15,454,816 35,760,206 -- 13,676 -- 46,374
Net asset value of shares issued in
payment of gain distribution:
Class A ............................... -- -- -- -- 145,261 140,329
Class D ............................... -- -- -- -- 9,588 6,295
------------ ------------ ----------- ----------- ----------- -----------
Total .................................... 22,421,607 47,355,629 2,819,682 5,032,660 2,390,487 7,273,609
------------ ------------ ----------- ----------- ----------- -----------
Cost of shares repurchased:
Class A ............................... (5,249,185) (10,801,204) (4,310,845) (6,020,226) (4,868,879) (6,985,116)
Class D ............................... (299,869) (585,245) (56,680) (45,914) (183,560) (749,883)
Exchanged into associated Funds:
Class A ............................... (3,882,143) (5,287,181) (2,661,843) (2,526,522) (662,534) (984,750)
Class D ............................... (12,234,748) (38,546,451) (14,735) (29,141) (179,595) (201,142)
------------ ------------ ----------- ----------- ----------- -----------
Total .................................... (21,665,945) (55,220,081) (7,044,103) (8,621,803) (5,894,568) (8,920,891)
------------ ------------ ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS .......... 755,662 (7,864,452) (4,224,421) (3,589,143) (3,504,081) (1,647,282)
------------ ------------ ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS ........ 2,586,568 (3,833,083) (3,693,151) (2,532,037) (2,898,574) (68,351)
NET ASSETS:
Beginning of period ...................... 99,760,270 103,593,353 50,018,092 52,550,129 53,254,014 53,322,365
------------ ------------ ----------- ----------- ----------- -----------
END OF PERIOD ............................ $102,346,838 $ 99,760,270 $46,324,941 $50,018,092 $50,355,440 $53,254,014
============ ============ =========== =========== =========== ===========
</TABLE>
- -------------
See Notes to Financial Statements.
36
<PAGE>
<TABLE>
<CAPTION>
LOUISIANA SERIES MARYLAND SERIES MASSACHUSETTS SERIES MICHIGAN SERIES
- ------------------------- ------------------------- ------------------------- --------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
3/31/98 9/30/97 3/31/98 9/30/97 3/31/98 9/30/97 3/31/98 9/30/97
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<C> <C> <C> <C> <C> <C> <C> <C>
$ 1,393,511 $ 2,882,172 $ 1,329,321 $ 2,728,689 $ 2,681,942 $ 5,574,868 $ 3,512,967 $ 7,494,605
80,620 96,176 95,885 383,873 333,623 1,304,763 1,452,843 1,259,022
560,127 1,423,177 508,989 952,592 1,592,486 1,867,804 515,989 2,653,074
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
2,034,258 4,401,525 1,934,195 4,065,154 4,608,051 8,747,435 5,481,799 11,406,701
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
(1,383,167) (2,865,407) (1,286,650) (2,647,830) (2,655,842) (5,516,992) (3,478,956) (7,427,374)
(10,344) (16,765) (42,671) (80,859) (26,100) (57,876) (34,011) (67,231)
(95,055) (753,044) (307,098) (281,130) (1,288,484) (1,068,791) (1,235,329) (1,581,301)
(862) (5,217) (11,949) (11,087) (14,760) (14,031) (15,651) (17,780)
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
(1,489,428) (3,640,433) (1,648,368) (3,020,906) (3,985,186) (6,657,690) (4,763,947) (9,093,686)
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
919,835 1,489,134 1,006,401 1,434,072 1,353,202 2,431,716 2,618,066 5,064,050
199 135,107 271,780 510,347 107,050 288,117 168,420 706,948
688,755 1,461,539 753,829 1,543,240 1,600,599 3,307,753 2,112,161 4,475,470
7,734 9,122 32,482 69,209 11,108 31,220 26,296 47,279
19,074 21,008 132,398 613,677 5,382,104 11,842,999 2,709,728 9,115,725
-- -- 7,321 -- 90,911 8,924 13,022 258,662
64,975 518,498 225,691 205,081 951,011 774,630 911,174 1,180,119
692 3,466 10,991 10,110 7,293 9,688 14,084 13,960
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
1,701,264 3,637,874 2,440,893 4,385,736 9,503,278 18,695,047 8,572,951 20,862,213
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
(2,159,271) (5,240,608) (2,410,444) (5,400,781) (4,903,168) (11,114,300) (5,529,277) (15,967,293)
(24,861) (34,626) (109,563) (509,633) (16,939) (510,040) (366,442) (552,079)
(204,311) (69,802) (202,195) (896,334) (11,308,098) (9,172,465) (2,784,885) (10,959,291)
-- -- (3,461) (99,960) -- (8,905) (66,539) (145,528)
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
(2,388,443) (5,345,036) (2,725,663) (6,906,708) (16,228,205) (20,805,710) (8,747,143) (27,624,191)
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
(687,179) (1,707,162) (284,770) (2,520,972) (6,724,927) (2,110,663) (174,192) (6,761,978)
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
(142,349) (946,070) 1,057 (1,476,724) (6,102,062) (20,918) 543,660 (4,448,963)
56,707,611 57,653,681 54,611,555 56,088,279 111,255,655 111,276,573 145,215,349 149,664,312
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
$56,565,262 $56,707,611 $54,612,612 $54,611,555 $105,153,593 $111,255,655 $145,759,009 $145,215,349
=========== =========== =========== =========== ============ ============ ============ ============
</TABLE>
37
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MINNESOTA SERIES MISSOURI SERIES NEW YORK SERIES
------------------------- ------------------------ ------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
3/31/98 9/30/97 3/31/98 9/30/97 3/31/98 9/30/97
----------- ----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income ..................... $ 3,027,413 $ 6,538,641 $ 1,236,758 $ 2,583,310 $ 2,057,350 $ 4,228,630
Net realized gain on investments .......... 900,023 757,947 341,332 389,565 1,723,183 200,181
Net change in unrealized
appreciation of investments ............... (271,458) 978,768 205,704 900,350 (301,887) 3,171,620
------------ ------------ ----------- ----------- ----------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS .... 3,655,978 8,275,356 1,783,794 3,873,225 3,478,646 7,600,431
------------ ------------ ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ................................ (2,991,412) (6,456,679) (1,229,255) (2,563,601) (2,025,456) (4,176,066)
Class D ................................ (36,001) (81,962) (7,503) (19,709) (31,894) (52,564)
Net realized gain on investments:
Class A ................................ (139,563) -- (437,159) (542,355) (837,486) (213,515)
Class D ................................ (2,075) -- (3,680) (5,999) (15,723) (3,062)
------------ ------------ ----------- ----------- ----------- -----------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS ............................. (3,169,051) (6,538,641) (1,677,597) (3,131,664) (2,910,559) (4,445,207)
------------ ------------ ----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ................................ 2,277,970 5,444,733 702,779 5,524,679 1,865,268 3,917,958
Class D ................................ 169,663 135,740 8,911 39,028 160,878 431,628
Net asset value of shares issued in
payment of dividends:
Class A ................................ 1,999,248 4,394,871 573,897 1,240,533 1,182,943 2,427,328
Class D ................................ 20,771 55,878 6,212 15,171 21,974 36,517
Exchanged from associated Funds:
Class A ................................ 297,802 356,606 170,723 243,591 1,488,635 4,314,919
Class D ................................ 22,637 90,000 -- 100 25,061 12,295
Net asset value of shares issued in
payment of gain distribution:
Class A ................................ 112,803 -- 281,752 354,701 666,270 166,872
Class D ................................ 1,581 -- 2,904 5,296 12,694 2,545
------------ ------------ ----------- ----------- ----------- -----------
Total ..................................... 4,902,475 10,477,828 1,747,178 7,423,099 5,423,723 11,310,062
------------ ------------ ----------- ----------- ----------- -----------
Cost of shares repurchased:
Class A ................................ (4,811,691) (14,412,829) (1,875,015) (4,255,392) (3,307,807) (9,574,807)
Class D ................................ (121,432) (503,408) (153,958) (114,612) (109,331) (68,104)
Exchanged into associated Funds:
Class A ................................ (580,742) (1,994,727) (402,340) (1,021,172) (3,015,829) (3,551,797)
Class D ................................ (92,363) (39,298) -- (40,189) (2,205) (42,506)
------------ ------------ ----------- ----------- ----------- -----------
Total ..................................... (5,606,228) (16,950,262) (2,431,313) (5,431,365) (6,435,172) (13,237,214)
------------ ------------ ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ........... (703,753) (6,472,434) (684,135) 1,991,734 (1,011,449) (1,927,152)
------------ ------------ ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS ......... (216,826) (4,735,719) (577,938) 2,733,295 (443,362) 1,228,072
NET ASSETS:
Beginning of period ....................... 123,473,299 128,209,018 53,239,726 50,506,431 85,099,630 83,871,558
------------ ------------ ----------- ----------- ----------- -----------
END OF PERIOD ............................. $123,256,473 $123,473,299 $52,661,788 $53,239,726 $84,656,268 $85,099,630
============ ============ =========== =========== =========== ===========
</TABLE>
- -------------
See Notes to Financial Statements.
38
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
OHIO SERIES OREGON SERIES SOUTH CAROLINA SERIES
-------------------------- ------------------------- -------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
3/31/98 9/30/97 3/31/98 9/30/97 3/31/98 9/30/97
------------ ------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income ..................... $ 3,834,853 $ 8,161,050 $ 1,326,870 $ 2,771,624 $ 2,515,720 $ 5,370,795
Net realized gain on investments .......... 2,743,883 1,052,154 211,815 747,838 593,739 452,558
Net change in unrealized
appreciation of investments ............... (767,990) 2,121,935 544,241 1,208,172 994,042 2,381,666
------------ ------------ ----------- ----------- ------------ ------------
INCREASE IN NET ASSETS FROM OPERATIONS .... 5,810,746 11,335,139 2,082,926 4,727,634 4,103,501 8,205,019
------------ ------------ ----------- ----------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ................................ (3,810,162) (8,118,451) (1,294,089) (2,712,769) (2,439,387) (5,239,991)
Class D ................................ (24,691) (42,599) (32,781) (58,855) (76,333) (130,804)
Net realized gain on investments:
Class A ................................ (2,017,799) (1,382,343) (700,268) (304,704) (905,320) (1,667,625)
Class D ................................ (15,589) (8,277) (21,792) (8,165) (34,538) (42,381)
------------ ------------ ----------- ----------- ------------ ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS ............................. (5,868,241) (9,551,670) (2,048,930) (3,084,493) (3,455,578) (7,080,801)
------------ ------------ ----------- ----------- ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ................................ 2,270,334 3,568,969 1,535,265 2,019,494 7,486,894 4,596,375
Class D ................................ 154,329 352,330 155,893 513,511 1,152,600 1,258,114
Net asset value of shares issued in
payment of dividends:
Class A ................................ 2,348,054 5,063,815 800,527 1,713,320 1,400,579 3,057,472
Class D ................................ 20,916 38,045 26,120 43,464 61,699 111,193
Exchanged from associated Funds:
Class A ................................ 101,977 858,387 12,000 59,994 290,001 385,497
Class D ................................ 70,396 15,368 -- 105,958 14,942 29,567
Net asset value of shares issued in
payment of gain distribution:
Class A ................................ 1,532,501 1,060,708 536,993 232,602 698,627 1,298,064
Class D ................................ 13,962 7,582 18,047 6,239 31,538 40,550
------------ ------------ ----------- ----------- ------------ ------------
Total ..................................... 6,512,469 10,965,204 3,084,845 4,694,582 11,136,880 10,776,832
------------ ------------ ----------- ----------- ------------ ------------
Cost of shares repurchased:
Class A ................................ (6,921,591) (18,663,417) (2,548,011) (6,926,397) (5,261,041) (16,191,089)
Class D ................................ (167,010) (216,985) (55,099) (525,899) (493,277) (432,224)
Exchanged into associated Funds:
Class A ................................ (963,249) (1,482,349) (237,825) (801,759) (1,024,535) (1,366,846)
Class D ................................ (3,090) (60,245) (7,198) (51,638) (46,212) (106,657)
------------ ------------ ----------- ----------- ------------ ------------
Total ..................................... (8,054,940) (20,422,996) (2,848,133) (8,305,693) (6,825,065) (18,096,816)
------------ ------------ ----------- ----------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ........... (1,542,471) (9,457,792) 236,712 (3,611,111) 4,311,815 (7,319,984)
------------ ------------ ----------- ----------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS ......... (1,599,966) (7,674,323) 270,708 (1,967,970) 4,959,738 (6,195,766)
NET ASSETS:
Beginning of period ....................... 155,579,194 163,253,517 56,917,297 58,885,267 104,681,161 110,876,927
------------ ------------ ----------- ----------- ------------ ------------
END OF PERIOD ............................. $153,979,228 $155,579,194 $57,188,005 $56,917,297 $109,640,899 $104,681,161
============ ============ =========== =========== ============ ============
</TABLE>
39
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- Seligman Municipal Fund Series, Inc. (the
"Fund") consists of 13 separate series: the "National Series," the "Colorado
Series," the "Georgia Series," the "Louisiana Series," the "Maryland Series,"
the "Massachusetts Series," the "Michigan Series," the "Minnesota Series," the
"Missouri Series," the "New York Series," the "Ohio Series," the "Oregon
Series," and the "South Carolina Series." Each Series of the Fund offers two
classes of shares. All shares existing prior to February 1, 1994, the
commencement date of Class D shares, were classified as Class A shares. Class A
shares are sold with an initial sales charge of up to 4.75% and a continuing
service fee of up to 0.25% on an annual basis. Class A shares purchased in an
amount of $1,000,000 or more are sold without an initial sales charge but are
subject to a contingent deferred sales load ("CDSL") of 1% on redemptions within
18 months of purchase. Class D shares are sold without an initial sales charge
but are subject to a distribution fee of up to 0.75% and a service fee of up to
0.25% on an annual basis, and a CDSL of 1% imposed on redemptions made within
one year of purchase. The two classes of shares for each Series represent
interests in the same portfolio of investments, have the same rights and are
generally identical in all respects except that each class bears its separate
distribution and certain other class expenses, and has exclusive voting rights
with respect to any matter on which a separate vote of any class is required.
2. SIGNIFICANT ACCOUNTING POLICIES -- The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Fund:
a. SECURITY VALUATION -- All municipal securities and other short-term holdings
maturing in more than 60 days are valued based upon quotations provided by
an independent pricing service or, in their absence, at fair value
determined in accordance with procedures approved by the Board of Directors.
Short-term holdings maturing in 60 days or less are generally valued at
amortized cost.
b. FEDERAL TAXES -- There is no provision for federal income tax. Each Series
has elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
c. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Investment
transactions are recorded on trade dates. Identified cost of investments
sold is used for both financial statement and federal income tax purposes.
Interest income is recorded on the accrual basis. The Fund amortizes
original issue discounts and premiums paid on purchases of portfolio
securities. Discounts other than original issue discounts are not amortized.
d. MULTIPLE CLASS ALLOCATIONS -- All income, expenses (other than
class-specific expenses), and realized and unrealized gains or losses are
allocated daily to each class of shares based upon the relative value of the
shares of each class. Class-specific expenses, which include distribution
and service fees and any other items that are specifically attributable to a
particular class, are charged directly to such class. For the six months
ended March 31, 1998, distribution and service fees were the only
class-specific expenses.
e. DISTRIBUTIONS TO SHAREHOLDERS -- Dividends are declared daily and paid
monthly. Other distributions paid by the Fund are recorded on the
ex-dividend date. The treatment for financial statement purposes of
distributions made to shareholders during the year from net investment
income or net realized gains may differ from their ultimate treatment for
federal income tax purposes. These differences are caused primarily by
differences in the timing of the recognition of certain components of
income, expense, or realized capital gain for federal income tax purposes.
Where such differences are permanent in nature, they are reclassified in the
components of net assets based on their ultimate characterization for
federal income tax purposes. Any such reclassification will have no effect
on net assets, results of operations, or net asset value per share of the
Fund.
3. PURCHASES AND SALES OF SECURITIES -- Purchases and sales of portfolio
securities, excluding short-term investments, for the six months ended March 31,
1998, were as follows:
SERIES PURCHASES SALES
- -------------- ----------- -----------
National $ 7,506,945 $ 8,229,075
Colorado 6,232,588 11,486,903
Georgia 1,442,325 4,489,485
Louisiana 2,480,875 2,904,508
Maryland -- 1,060,675
Massachusetts 11,602,064 18,028,173
Michigan 16,593,933 21,278,800
Minnesota 9,924,104 12,776,047
Missouri 6,954,210 7,360,343
New York 17,117,112 18,012,368
Ohio 29,909,343 36,547,387
Oregon 2,178,340 2,844,615
South Carolina 15,793,370 9,526,286
40
<PAGE>
NOTES TO FINANCIAL STATEMENTS
At March 31, 1998, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes, and the
tax basis gross unrealized appreciation and depreciation of portfolio securities
were as follows:
TOTAL TOTAL
UNREALIZED UNREALIZED
SERIES APPRECIATION DEPRECIATION
- ------------- ------------- ------------
National $6,289,337 $ --
Colorado 3,037,462 --
Georgia 3,555,303 --
Louisiana 3,931,225 6,900
Maryland 3,590,481 --
Massachusetts 6,178,541 22,829
Michigan 8,889,092 137,775
Minnesota 6,840,741 41,088
Missouri 2,764,133 37,869
New York 5,471,897 103,732
Ohio 8,522,938 49,756
Oregon 3,262,003 --
South Carolina 6,882,982 6,140
4. MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and
provides the necessary personnel and facilities. Compensation of all officers of
the Fund, all directors of the Fund who are employees or consultants of the
Manager, and all personnel of the Fund and the Manager is paid by the Manager.
The Manager's fee, calculated daily and payable monthly, is equal to 0.50% per
annum of each Series' average daily net assets.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of each Series' shares, and an affiliate of the Manager, received
the following concessions after commissions were paid to dealers for sales of
Class A shares:
DISTRIBUTOR DEALER
SERIES CONCESSIONS COMMISSIONS
- ------------- ----------- -----------
National $ 5,340 $ 37,747
Colorado 2,786 21,101
Georgia 3,806 27,443
Louisiana 3,519 27,657
Maryland 4,255 31,692
Massachusetts 3,893 29,213
Michigan 11,517 86,078
Minnesota 10,437 73,423
Missouri 3,493 23,000
New York 3,543 26,955
Ohio 10,372 75,726
Oregon 6,382 50,791
South Carolina 15,436 107,570
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to distribution of its shares. Under the Plan, with
respect to Class A shares, service organizations can enter into agreements with
the Distributor and receive continuing fees of up to 0.25% on an annual basis,
payable quarterly, of the average daily net assets of the Class A shares
attributable to the particular service organizations for providing personal
services and/or the maintenance of shareholder accounts. For the six months
ended March 31, 1998, the Distributor charged such fees to the Fund pursuant to
the Plan as follows:
ANNUALIZED
TOTAL FEES % OF AVERAGE
SERIES PAID NET ASSETS
- -------------- ---------- ------------
National $43,014 .09%
Colorado 24,738 .10
Georgia 21,877 .09
Louisiana 28,651 .10
Maryland 24,642 .10
Massachusetts 51,496 .09
Michigan 66,478 .09
Minnesota 57,980 .09
Missouri 26,192 .10
New York 36,714 .09
Ohio 72,009 .09
Oregon 26,161 .09
South Carolina 48,032 .09
Under the Plan, with respect to Class D shares, service organizations can
enter into agreements with the Distributor and receive continuing fees for
providing personal services and/or the maintenance of shareholder accounts of up
to 0.25% on an annual basis of the average daily net assets of the Class D
shares for which the organizations are responsible, and fees for providing other
distribution assistance of up to 0.75% on an annual basis of such average daily
net assets. Such fees are paid monthly by the Fund to the Distributor pursuant
to the Plan. For the six months ended March 31, 1998, fees incurred under the
Plan equivalent to 1% per annum of the average daily net assets of Class D
shares were as follows:
SERIES SERIES
- ------------- ------------
National $25,108 Minnesota $ 8,940
Colorado 1,207 Missouri 1,979
Georgia 13,746 New York 8,130
Louisiana 2,577 Ohio 6,079
Maryland 10,626 Oregon 8,665
Massachusetts 6,552 South Carolina 19,640
Michigan 8,652
The Distributor is entitled to retain any CDSL imposed on redemptions of
Class D shares occurring within one year after purchase and on certain
redemptions of Class A shares
41
<PAGE>
NOTES TO FINANCIAL STATEMENTS
occurring within 18 months of purchase. For the six months ended March 31, 1998,
such charges were as follows:
SERIES SERIES
- ------------- -------------
National $ 1,253 Missouri $ 35
Georgia 25,787 New York 998
Massachusetts 100 Ohio 768
Michigan 75 South Carolina 2,398
Minnesota 47
Seligman Services, Inc., an affiliate of the Manager, is eligible to receive
commissions from certain sales of shares of the Fund, as well as distribution
and service fees pursuant to the Plan. For the six months ended March 31, 1998,
Seligman Services, Inc. received commissions for sales of shares of each Series
and distribution and service fees pursuant to the Plan, as follows:
DISTRIBUTION AND
SERIES COMMISSIONS SERVICE FEES
- -------------- ------------- ----------------
National $ 166 $3,357
Colorado 255 1,281
Georgia 96 440
Louisiana 68 563
Maryland 112 757
Massachusetts 676 1,078
Michigan 90 1,410
Minnesota 541 1,162
Missouri 179 1,722
New York 1,955 6,488
Ohio 3,704 1,889
Oregon 7 856
South Carolina 19,322 1,621
Seligman Data Corp., which is owned by certain associated investment
companies, charged at cost for shareholder account services the following
amounts:
SERIES SERIES
- ------------- ------------
National $63,616 Minnesota $87,348
Colorado 33,224 Missouri 35,724
Georgia 34,489 New York 49,194
Louisiana 32,806 Ohio 97,129
Maryland 37,828 Oregon 38,405
Massachusetts 68,059 South Carolina 66,424
Michigan 92,286
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
The Fund has a compensation agreement under which directors who receive fees
may elect to defer receiving such fees. Directors may elect to have their
deferred fees accrue interest or earn a return based on the performance of the
Fund or other funds in the Seligman Group of Investment Companies. Deferred fees
and related accrued earnings are not deductible for federal income tax purposes
until such amounts are paid. The cost of such fees and earnings accrued thereon
is included in directors' fees and expenses, and the accumulated balances
thereof at March 31, 1998, are included in other liabilities as follows:
SERIES SERIES
- ------------ -------------
National $18,890 Minnesota $16,124
Colorado 11,881 Missouri 11,888
Georgia 11,152 New York 16,053
Louisiana 12,903 Ohio 16,176
Maryland 12,900 Oregon 11,696
Massachusetts 16,094 South Carolina 11,243
Michigan 15,617
5. LOSS CARRYFORWARD -- In accordance with current federal income tax law, each
of the Series' net realized capital gains and losses are considered separately
for purposes of determining taxable capital gains on an annual basis. At
September 30, 1997, the net loss carryforwards for the National, Colorado, and
Minnesota Series amounted to $2,934,455, $38,129, and $681,481, respectively,
which are available for offset against future taxable net gains, expiring in
various amounts through 2005. Accordingly, no capital gain distributions are
expected to be paid to shareholders of the National, Colorado, and Minnesota
Series until net capital gains have been realized in excess of the available
capital loss carryforwards.
42
<PAGE>
NOTES TO FINANCIAL STATEMENTS
6. CAPITAL STOCK TRANSACTIONS -- The Fund has 1,300,000,000 shares of Capital
Stock authorized. At March 31, 1998, 100,000,000 shares were authorized for each
Series of the Fund. Transactions in shares of Capital Stock were as follows:
<TABLE>
<CAPTION>
NATIONAL SERIES COLORADO SERIES GEORGIA SERIES LOUISIANA SERIES
----------------------- ---------------------- --------------------- ---------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
3/31/98 9/30/97 3/31/98 9/30/97 3/31/98 9/30/97 3/31/98 9/30/97
----------- --------- --------- --------- ---------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales of shares:
Class A ....................... 188,854 401,292 82,565 146,785 107,988 513,632 110,655 181,700
Class D ....................... 49,142 61,208 5,658 4,493 62,880 133,099 24 16,439
Shares issued in payment
of dividends:
Class A ....................... 159,136 343,369 86,984 188,633 87,904 200,681 82,511 179,244
Class D ....................... 7,986 13,912 415 860 5,341 9,380 927 1,120
Exchanged from associated Funds:
Class A ....................... 452,384 672,956 200,512 345,869 8,645 28,040 2,307 2,599
Class D ....................... 1,910,517 4,606,174 -- 1,897 -- 5,782 -- --
Shares issued in payment
of gain distributions:
Class A ....................... -- -- -- -- 17,956 17,674 7,857 63,776
Class D ....................... -- -- -- -- 1,182 792 84 426
--------- --------- --------- ---------- --------- --------- -------- --------
Total ........................... 2,768,019 6,098,911 376,134 688,537 291,896 909,080 204,365 445,304
--------- --------- --------- ---------- --------- --------- -------- --------
Shares repurchased:
Class A ....................... (645,739) (1,389,619) (576,491) (821,576) (596,196) (881,743) (258,729) (642,677)
Class D ....................... (36,934) (75,516) (7,509) (6,235) (22,343) (94,407) (2,978) (4,237)
Exchanged into associated Funds:
Class A ....................... (478,081) (679,856) (354,649) (345,924) (81,121) (123,961) (24,443) (8,595)
Class D .......................(1,514,594) (4,948,529) (1,960) (4,012) (21,825) (25,271) -- --
--------- --------- --------- ---------- --------- --------- -------- --------
Total ...........................(2,675,348) (7,093,520) (940,609) (1,177,747) (721,485) (1,125,382) (286,150) (655,509)
--------- --------- --------- ---------- --------- --------- -------- --------
Increase (decrease) in shares ... 92,671 (994,609) (564,475) (489,210) (429,589) (216,302) (81,785) (210,205)
========= ========= ========= ========== ========= ========= ======== ========
</TABLE>
<TABLE>
<CAPTION>
MARYLAND SERIES MASSACHUSETTS SERIES MICHIGAN SERIES MINNESOTA SERIES
---------------------- --------------------- ---------------------- ----------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
3/31/98 9/30/97 3/31/98 9/30/97 3/31/98 9/30/97 3/31/98 9/30/97
--------- --------- --------- --------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales of shares:
Class A ....................... 122,761 178,081 168,669 308,839 303,042 596,810 290,770 706,910
Class D ....................... 33,116 63,517 13,329 36,578 19,505 83,579 21,626 17,609
Shares issued in payment
of dividends:
Class A ....................... 92,152 192,610 199,670 420,799 244,752 529,332 255,527 569,754
Class D ....................... 3,966 8,633 1,386 3,981 3,051 5,592 2,654 7,244
Exchanged from associated Funds:
Class A ....................... 16,098 77,084 669,559 1,523,024 314,044 1,080,365 38,101 46,568
Class D ....................... 896 -- 11,196 1,134 1,516 30,637 2,880 11,509
Shares issued in payment
of gain distributions:
Class A ....................... 27,829 25,571 120,229 98,428 106,820 139,825 14,480 --
Class D ....................... 1,354 1,259 923 1,232 1,653 1,654 203 --
--------- --------- --------- --------- --------- --------- -------- ---------
Total ........................... 298,172 546,755 1,184,961 2,394,015 994,383 2,467,794 626,241 1,359,594
--------- --------- --------- --------- --------- --------- -------- ---------
Shares repurchased:
Class A ....................... (294,600) (674,114) (611,611) (1,413,634) (640,176)(1,886,059) (615,239) (1,868,498)
Class D ....................... (13,391) (63,960) (2,127) (65,121) (42,567) (65,355) (15,521) (65,288)
Exchanged into associated Funds:
Class A ....................... (24,696) (112,466) (1,405,992) (1,175,580) (323,377)(1,297,651) (74,237) (258,689)
Class D ....................... (423) (12,507) -- (1,133) (7,657) (17,125) (11,751) (5,099)
--------- --------- --------- --------- --------- --------- -------- ---------
Total ........................... (333,110) (863,047) (2,019,730) (2,655,468) (1,013,777)(3,266,190) (716,748) (2,197,574)
--------- --------- --------- --------- --------- --------- -------- ---------
Decrease in shares .............. (34,938) (316,292) (834,769) (261,453) (19,394) (798,396) (90,507) (837,980)
========= ========= ========= ========= ========= ========= ======== =========
</TABLE>
43
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
MISSOURI SERIES NEW YORK SERIES OHIO SERIES OREGON SERIES
--------------------- --------------------- -------------------- ---------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
3/31/98 9/30/97 3/31/98 9/30/97 3/31/98 9/30/97 3/31/98 9/30/97
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales of shares:
Class A ....................... 89,499 722,053 224,962 486,564 277,282 441,039 194,685 262,547
Class D ....................... 1,138 5,024 19,347 52,683 18,770 43,216 19,823 66,778
Shares issued in payment
of dividends:
Class A ....................... 73,284 161,292 142,187 300,867 286,635 626,911 101,711 222,418
Class D ....................... 794 1,973 2,640 4,524 2,541 4,687 3,322 5,646
Exchanged from associated Funds:
Class A ....................... 21,747 31,545 178,230 540,465 12,460 106,616 1,523 7,803
Class D ....................... -- 13 2,997 1,501 8,543 1,906 -- 13,881
Shares issued in payment
of gain distributions:
Class A ....................... 36,308 46,125 81,252 20,729 189,198 131,276 69,111 30,287
Class D ....................... 374 688 1,546 316 1,715 934 2,326 813
--------- --------- --------- -------- --------- --------- -------- ---------
TOTAL ........................... 223,144 968,713 653,161 1,407,649 797,144 1,356,585 392,501 610,173
--------- --------- --------- -------- --------- --------- -------- ---------
Shares repurchased:
Class A ....................... (239,466) (553,544) (397,473) (1,191,908) (844,891) (2,310,439) (323,591) (900,692)
Class D ....................... (19,708) (15,067) (13,075) (8,476) (20,246) (26,589) (7,038) (68,686)
Exchanged into associated Funds:
Class A ....................... (51,292) (131,979) (361,321) (442,854) (117,276) (184,026) (30,180) (104,744)
Class D ....................... -- (5,250) (265) (5,338) (376) (7,441) (916) (6,685)
--------- --------- --------- -------- --------- --------- -------- ---------
Total ........................... (310,466) (705,840) (772,134) (1,648,576) (982,789) (2,528,495) (361,725) (1,080,807)
--------- --------- --------- -------- --------- --------- -------- ---------
Increase (decrease) in shares ... (87,322) 262,873 (118,973) (240,927) (185,645) (1,171,910) 30,776 (470,634)
========= ========= ========= ========= ========= ========== ======== =========
</TABLE>
SOUTH CAROLINA SERIES
---------------------
SIX MONTHS YEAR
ENDED ENDED
3/31/98 9/30/97
---------- ---------
Sales of shares:
Class A ....................... 912,007 572,615
Class D ....................... 140,294 156,977
Shares issued in payment
of dividends:
Class A ....................... 170,740 380,701
Class D ....................... 7,529 13,850
Exchanged from associated Funds:
Class A ....................... 35,185 47,863
Class D ....................... 1,818 3,643
Shares issued in payment
of gain distributions:
Class A ....................... 86,250 161,652
Class D ....................... 3,898 5,056
---------- ----------
TOTAL ........................... 1,357,721 1,342,357
---------- ----------
Shares repurchased:
Class A ....................... (641,608) (2,018,325)
Class D ....................... (60,223) (53,697)
Exchanged into associated Funds:
Class A ....................... (125,465) (170,000)
Class D ....................... (5,669) (13,276)
---------- ----------
Total ........................... (832,965) (2,255,298)
---------- ----------
Increase (decrease) in shares ... 524,756 (912,941)
========== ==========
44
<PAGE>
FINANCIAL HIGHLIGHTS
The Fund's financial highlights are presented below. "Per share operating
performance" data is designed to allow investors to trace the operating
performance of each Class, on a per share basis, from the beginning net asset
value to the ending net asset value, so that investors can understand what
effect the individual items have on their investment, assuming it was held
throughout the period. Generally, per share amounts are derived by converting
the actual dollar amounts incurred for each item, as disclosed in the financial
statements, to their equivalent per share amounts, based on average shares
outstanding.
"Total return based on net asset value" measures each Class's performance
assuming that investors purchased shares at net asset value as of the beginning
of the period, invested dividends and capital gains paid at net asset value, and
then sold their shares at the net asset value on the last day of the period. The
total return computations do not reflect any sales charges investors may incur
in purchasing or selling shares of each Series. Total returns for periods of
less than one year are not annualized.
NATIONAL SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR ENDED SEPTEMBER 30,
ENDED ---------------------------------------------------
3/31/98 1997 1996 1995 1994 1993
---------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.01 $7.70 $7.58 $7.18 $8.72 $8.07
----- ----- ----- ----- ----- -----
Net investment income ................................ 0.20 0.39 0.40 0.40 0.41 0.45
Net realized and unrealized
investment gain (loss) ............................... 0.15 0.31 0.12 0.40 (1.04) 0.78
----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM
INVESTMENT OPERATIONS ................................ 0.35 0.70 0.52 0.80 (0.63) 1.23
Dividends paid or declared ........................... (0.20) (0.39) (0.40) (0.40) (0.41) (0.45)
Distributions from net gain realized ................. -- -- -- -- (0.50) (0.13)
----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.15 0.31 0.12 0.40 (1.54) 0.65
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.16 $8.01 $7.70 $7.58 $7.18 $8.72
===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 4.34% 9.40% 6.97% 11.48% (7.83)% 16.00%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 0.81%+ 0.84% 0.80% 0.86% 0.85% 0.86%
Net investment income to average net assets .......... 4.85%+ 5.05% 5.19% 5.46% 5.30% 5.49%
Portfolio turnover ................................... 7.56% 20.63% 33.99% 24.91% 24.86% 72.68%
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $96,634 $97,481 $98,767 $104,184 $111,374 $136,394
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------
YEAR ENDED
SIX MONTHS SEPTEMBER 30, 2/1/94**
ENDED --------------------------- TO
3/31/98 1997 1996 1995 9/30/94
---------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.02 $7.70 $7.57 $7.18 $8.20
----- ----- ----- ----- -----
NET INVESTMENT INCOME ............ ................... 0.16 0.32 0.33 0.32 0.22
Net realized and unrealized
investment gain (loss) ............................... 0.14 0.32 0.13 0.39 (1.02)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM
INVESTMENT OPERATIONS ................................ 0.30 0.64 0.46 0.71 (0.80)
Dividends paid or declared ........................... (0.16) (0.32) (0.33) (0.32) (0.22)
Distributions from net gain realized ................. -- -- -- -- --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.14 0.32 0.13 0.39 (1.02)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.16 $8.02 $7.70 $7.57 $7.18
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.74% 8.56% 6.13% 10.17% (9.96)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.... ................... 1.72%+ 1.75% 1.67% 1.95% 1.76%+
Net investment income to average net assets .......... 3.94%+ 4.15% 4.27% 4.40% 4.37%+
Portfolio turnover ................................... 7.56% 20.63% 33.99% 24.91% 24.86%++
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $5,713 $2,279 $4,826 $1,215 $446
</TABLE>
- -------------
See footnotes on page 57.
45
<PAGE>
FINANCIAL HIGHLIGHTS
COLORADO SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR ENDED SEPTEMBER 30,
ENDED ---------------------------------------------------
3/31/98 1997 1996 1995 1994 1993
---------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $7.42 $7.27 $7.30 $7.09 $7.76 $7.34
----- ----- ----- ----- ----- -----
Net investment income ................................ 0.18 0.37 0.37 0.38 0.37 0.39
Net realized and unrealized
investment gain (loss)................................ 0.08 0.15 (0.03) 0.21 (0.59) 0.49
----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.26 0.52 0.34 0.59 (0.22) 0.88
Dividends paid or declared ........................... (0.18) (0.37) (0.37) (0.38) (0.37) (0.39)
Distributions from net gain realized ................. -- -- -- -- (0.08) (0.07)
----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.08 0.15 (0.03) 0.21 (0.67) 0.42
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $7.50 $7.42 $7.27 $7.30 $7.09 $7.76
===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.55% 7.30% 4.76% 8.56% (2.92)% 12.54%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 0.90%+ 0.90% 0.85% 0.93% 0.86% 0.90%
Net investment income to average net assets .......... 4.89%+ 5.01% 5.07% 5.31% 5.06% 5.21%
Portfolio turnover ................................... 13.28% 3.99% 12.39% 14.70% 10.07% 14.09%
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $46,110 $49,780 $52,295 $54,858 $58,197 $67,912
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------
YEAR ENDED
SIX MONTHS SEPTEMBER 30, 2/1/94**
ENDED --------------------------- TO
3/31/98 1997 1996 1995 9/30/94
---------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $7.42 $7.27 $7.29 $7.09 $7.72
----- ----- ----- ----- -----
Net investment income ................................ 0.15 0.30 0.31 0.30 0.20
Net realized and unrealized
investment gain (loss) ............................... 0.08 0.15 (0.02) 0.20 (0.63)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.23 0.45 0.29 0.50 (0.43)
Dividends paid or declared ........................... (0.15) (0.30) (0.31) (0.30) (0.20)
Distributions from net gain realized ................. -- -- -- -- --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.08 0.15 (0.02) 0.20 (0.63)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $7.50 $7.42 $7.27 $7.29 $7.09
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.09% 6.34% 3.95% 7.26% (5.73)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 1.80%+ 1.81% 1.75% 2.02% 1.78%+
Net investment income to average net assets .......... 3.99%+ 4.10% 4.17% 4.23% 4.05%+
Portfolio turnover ................................... 13.28% 3.99% 12.39% 14.70% 10.07%++
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $215 $238 $255 $193 $96
</TABLE>
- -------------
See footnotes on page 57.
46
<PAGE>
FINANCIAL HIGHLIGHTS
GEORGIA SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR ENDED SEPTEMBER 30,
ENDED ---------------------------------------------------
3/31/98 1997 1996 1995 1994 1993
---------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.12 $7.87 $7.81 $7.48 $8.43 $7.85
----- ----- ----- ----- ----- -----
Net investment income ................................ 0.19 0.38 0.39 0.39 0.41 0.43
Net realized and unrealized investment
gain (loss) .......................................... 0.12 0.28 0.11 0.43 (0.86) 0.62
----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.31 0.66 0.50 0.82 (0.45) 1.05
Dividends paid or declared ........................... (0.19) (0.38) (0.39) (0.39) (0.41) (0.43)
Distributions from net gain realized ................. (0.03) (0.03) (0.05) (0.10) (0.09) (0.04)
----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.09 0.25 0.06 0.33 (0.95) 0.58
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.21 $8.12 $7.87 $7.81 $7.48 $8.43
===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.85% 8.65% 6.56% 11.66% (5.52)% 13.96%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 0.88%+ 0.89% 0.83% 0.91% 0.73% 0.63%
Net investment income to average net assets .......... 4.63%+ 4.82% 4.94% 5.26% 5.21% 5.34%
Portfolio turnover ................................... 2.89% 12.28% 16.24% 3.36% 19.34% 12.45%
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $47,476 $50,614 $50,995 $57,678 $61,466 $64,650
Without management fee waiver:*
Net investment income per share .................... $0.39 $0.40 $0.40
Ratios:
Expenses to average net assets ..................... 0.96% 0.93% 0.93%
Net investment income to average net assets ........ 5.21% 5.01% 5.04%
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------
YEAR ENDED
SIX MONTHS SEPTEMBER 30, 2/1/94**
ENDED --------------------------- TO
3/31/98 1997 1996 1995 9/30/94
---------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.13 $7.88 $7.82 $7.49 $8.33
----- ----- ----- ----- -----
Net investment income ................................ 0.15 0.31 0.32 0.32 0.22
Net realized and unrealized
investment gain (loss) ............................... 0.13 0.28 0.11 0.43 (0.84)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.28 0.59 0.43 0.75 (0.62)
Dividends paid or declared ........................... (0.15) (0.31) (0.32) (0.32) (0.22)
Distributions from net gain realized ................. (0.03) (0.03) (0.05) (0.10) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.10 0.25 0.06 0.33 (0.84)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.23 $8.13 $7.88 $7.82 $7.49
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.51% 7.67% 5.60% 10.58% (7.57)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 1.79%+ 1.79% 1.73% 1.90% 1.76%+
Net investment income to average net assets .......... 3.72%+ 3.92% 4.03% 4.28% 4.28%+
Portfolio turnover ................................... 2.89% 12.28% 16.24% 3.36% 19.34%++
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $2,879 $2,640 $2,327 $2,079 $849
Without management fee waiver:*
Net investment income per share .................... $0.31 $0.21
Ratios:
Expenses to average net assets ..................... 1.95% 1.90%+
Net investment income to average net assets ........ 4.23% 4.15%+
</TABLE>
- -------------
See footnotes on page 57.
47
<PAGE>
FINANCIAL HIGHLIGHTS
LOUISIANA SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR ENDED SEPTEMBER 30,
ENDED ---------------------------------------------------
3/31/98 1997 1996 1995 1994 1993
---------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.28 $8.16 $8.14 $7.94 $8.79 $8.38
----- ----- ----- ----- ----- -----
Net investment income ................................ 0.20 0.41 0.42 0.43 0.44 0.46
Net realized and unrealized
investment gain (loss) ............................... 0.09 0.23 0.08 0.34 (0.77) 0.51
----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.29 0.64 0.50 0.77 (0.33) 0.97
Dividends paid or declared ........................... (0.20) (0.41) (0.42) (0.43) (0.44) (0.46)
Distributions from net gain realized ................. (0.01) (0.11) (0.06) (0.14) (0.08) (0.10)
----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.08 0.12 0.02 0.20 (0.85) 0.41
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.36 $8.28 $8.16 $8.14 $7.94 $8.79
===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.63% 8.17% 6.32% 10.30% (3.83)% 12.10%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 0.86%+ 0.86% 0.82% 0.89% 0.87% 0.87%
Net investment income to average net assets .......... 4.91%+ 5.08% 5.15% 5.44% 5.31% 5.40%
Portfolio turnover ................................... 4.46% 16.08% 10.08% 4.82% 17.16% 9.21%
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $56,068 $56,199 $57,264 $61,988 $61,441 $67,529
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------
YEAR ENDED
SIX MONTHS SEPTEMBER 30, 2/1/94**
ENDED --------------------------- TO
3/31/98 1997 1996 1995 9/30/94
---------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.27 $8.16 $8.14 $7.94 $8.73
----- ----- ----- ----- -----
Net investment income ................................ 0.17 0.34 0.35 0.35 0.24
Net realized and unrealized
investment gain (loss) ............................... 0.09 0.22 0.08 0.34 (0.79)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.26 0.56 0.43 0.69 (0.55)
Dividends paid or declared ........................... (0.17) (0.34) (0.35) (0.35) (0.24)
Distributions from net gain realized ................. (0.01) (0.11) (0.06) (0.14) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.08 0.11 0.02 0.20 (0.79)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.35 $8.27 $8.16 $8.14 $7.94
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.17% 7.07% 5.37% 9.17% (6.45)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 1.76%+ 1.76% 1.72% 1.91% 1.78%+
Net investment income to average net assets .......... 4.01%+ 4.18% 4.25% 4.41% 4.33%+
Portfolio turnover ................................... 4.46% 16.08% 10.08% 4.82% 17.16%++
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $497 $509 $389 $465 $704
</TABLE>
- -------------
See footnotes on page 57.
48
<PAGE>
FINANCIAL HIGHLIGHTS
MARYLAND SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR ENDED SEPTEMBER 30,
ENDED ---------------------------------------------------
3/31/98 1997 1996 1995 1994 1993
---------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.14 $7.99 $7.96 $7.71 $8.64 $8.15
----- ----- ----- ----- ----- -----
Net investment income ................................ 0.20 0.40 0.40 0.41 0.42 0.44
Net realized and unrealized
investment gain (loss) ............................... 0.10 0.19 0.06 0.38 (0.76) 0.59
----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.30 0.59 0.46 0.79 (0.34) 1.03
Dividends paid or declared ........................... (0.20) (0.40) (0.40) (0.41) (0.42) (0.44)
Distributions from net gain realized ................. (0.05) (0.04) (0.03) (0.13) (0.17) (0.10)
----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.05 0.15 0.03 0.25 (0.93) 0.49
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.19 $8.14 $7.99 $7.96 $7.71 $8.64
===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.70% 7.64% 6.00% 10.90% (4.08)% 13.23%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 0.88%+ 0.90% 0.84% 0.96% 0.92% 0.97%
Net investment income to average net assets .......... 4.92%+ 4.99% 5.05% 5.31% 5.17% 5.28%
Portfolio turnover ................................... -- 14.79% 5.56% 3.63% 17.68% 14.10%
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $52,330 $52,549 $54,041 $56,290 $57,263 $64,472
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------
YEAR ENDED
SIX MONTHS SEPTEMBER 30, 2/1/94**
ENDED --------------------------- TO
3/31/98 1997 1996 1995 9/30/94
---------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.15 $7.99 $7.97 $7.72 $8.46
----- ----- ----- ----- -----
Net investment income ................................ 0.16 0.33 0.33 0.33 0.23
Net realized and unrealized
investment gain (loss) ............................... 0.09 0.20 0.05 0.38 (0.74)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.25 0.53 0.38 0.71 (0.51)
Dividends paid or declared ........................... (0.16) (0.33) (0.33) (0.33) (0.23)
Distributions from net gain realized ................. (0.05) (0.04) (0.03) (0.13) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.04 0.16 0.02 0.25 (0.74)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.19 $8.15 $7.99 $7.97 $7.72
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.11% 6.80% 4.91% 9.75% (6.21)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 1.78%+ 1.81% 1.72% 2.02% 1.80%+
Net investment income to average net assets .......... 4.02%+ 4.08% 4.14% 4.27% 4.26%+
Portfolio turnover ................................... -- 14.79% 5.56% 3.63% 17.68%++
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $2,283 $2,063 $2,047 $630 $424
</TABLE>
- -------------
See footnotes on page 57.
49
<PAGE>
FINANCIAL HIGHLIGHTS
MASSACHUSETTS SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR ENDED SEPTEMBER 30,
ENDED ---------------------------------------------------
3/31/98 1997 1996 1995 1994 1993
---------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $7.99 $7.85 $7.91 $7.66 $8.54 $8.06
----- ----- ----- ----- ----- -----
Net investment income ................................ 0.20 0.40 0.41 0.42 0.44 0.47
Net realized and unrealized
investment gain (loss) ............................... 0.14 0.22 0.05 0.28 (0.67) 0.55
----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.34 0.62 0.46 0.70 (0.23) 1.02
Dividends paid or declared ........................... (0.20) (0.40) (0.41) (0.42) (0.44) (0.47)
Distributions from net gain realized ................. (0.09) (0.08) (0.11) (0.03) (0.21) (0.07)
----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.05 0.14 (0.06) 0.25 (0.88) 0.48
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.04 $7.99 $7.85 $7.91 $7.66 $8.54
===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 4.32% 8.11% 5.97% 9.58% (2.94)% 13.18%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 0.80%+ 0.84% 0.80% 0.86% 0.85% 0.88%
Net investment income to average net assets .......... 4.89%+ 5.06% 5.24% 5.51% 5.46% 5.65%
Portfolio turnover ................................... 10.80% 29.26% 26.30% 16.68% 12.44% 20.66%
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $103,704 $110,011 $109,872 $115,711 $120,149 $139,504
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------
YEAR ENDED
SIX MONTHS SEPTEMBER 30, 2/1/94**
ENDED --------------------------- TO
3/31/98 1997 1996 1995 9/30/94
---------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $7.99 $7.84 $7.90 $7.66 $8.33
----- ----- ----- ----- -----
Net investment income ................................ 0.16 0.33 0.34 0.34 0.24
Net realized and unrealized
investment gain (loss) ............................... 0.13 0.23 0.05 0.27 (0.67)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.29 0.56 0.39 0.61 (0.43)
Dividends paid or declared ........................... (0.16) (0.33) (0.34) (0.34) (0.24)
Distributions from net gain realized ................. (0.09) (0.08) (0.11) (0.03) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.04 0.15 (0.06) 0.24 (0.67)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.03 $7.99 $7.84 $7.90 $7.66
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.72% 7.29% 5.01% 8.33% (5.34)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 1.71%+ 1.74% 1.70% 1.95% 1.78%+
Net investment income to average net assets .......... 3.98%+ 4.16% 4.32% 4.47% 4.52%+
Portfolio turnover ................................... 10.80% 29.26% 26.30% 16.68% 12.44%++
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $1,450 $1,245 $1,405 $809 $1,099
</TABLE>
- -------------
See footnotes on page 57.
50
<PAGE>
FINANCIAL HIGHLIGHTS
MICHIGAN SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR ENDED SEPTEMBER 30,
ENDED ---------------------------------------------------
3/31/98 1997 1996 1995 1994 1993
---------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.60 $8.46 $8.54 $8.28 $9.08 $8.68
----- ----- ----- ----- ----- -----
Net investment income ................................ 0.21 0.43 0.45 0.46 0.46 0.47
Net realized and unrealized
investment gain (loss) ............................... 0.11 0.23 0.06 0.30 (0.71) 0.59
----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.32 0.66 0.51 0.76 (0.25) 1.06
Dividends paid or declared ........................... (0.21) (0.43) (0.45) (0.46) (0.46) (0.47)
Distributions from net gain realized ................. (0.07) (0.09) (0.14) (0.04) (0.09) (0.19)
----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.04 0.14 (0.08) 0.26 (0.80) 0.40
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.64 $8.60 $8.46 $8.54 $8.28 $9.08
===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.79% 8.16% 6.16% 9.56% (2.90)% 12.97%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 0.78%+ 0.81% 0.78% 0.87% 0.84% 0.83%
Net investment income to average net assets .......... 4.84%+ 5.13% 5.29% 5.50% 5.32% 5.41%
Portfolio turnover ................................... 11.92% 10.98% 19.62% 20.48% 10.06% 6.33%
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $144,117 $143,370 $148,178 $151,589 $151,095 $164,638
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------
YEAR ENDED
SIX MONTHS SEPTEMBER 30, 2/1/94**
ENDED --------------------------- TO
3/31/98 1997 1996 1995 9/30/94
---------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.59 $8.45 $8.54 $8.28 $9.01
----- ----- ----- ----- -----
Net investment income ................................ 0.17 0.36 0.37 0.37 0.25
Net realized and unrealized
investment gain (loss) ............................... 0.11 0.23 0.05 0.30 (0.73)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.28 0.59 0.42 0.67 (0.48)
Dividends paid or declared ........................... (0.17) (0.36) (0.37) (0.37) (0.25)
Distributions from net gain realized ................. (0.07) (0.09) (0.14) (0.04) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.04 0.14 (0.09) 0.26 (0.73)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.63 $8.59 $8.45 $8.54 $8.28
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.33% 7.19% 5.09% 8.36% (5.47)%
RATIOS/SUPPLEMENTAL DATA:
EXPENSES TO AVERAGE NET ASSETS ....................... 1.69%+ 1.71% 1.68% 2.01% 1.75%+
Net investment income to average net assets .......... 3.93%+ 4.23% 4.39% 4.40% 4.40%+
Portfolio turnover ................................... 11.92% 10.98% 19.62% 20.48% 10.06%++
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $1,642 $1,845 $1,486 $1,172 $671
</TABLE>
- -------------
See footnotes on page 57.
51
<PAGE>
FINANCIAL HIGHLIGHTS
MINNESOTA SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR ENDED SEPTEMBER 30,
ENDED ---------------------------------------------------
3/31/98 1997 1996 1995 1994 1993
---------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $7.79 $7.68 $7.82 $7.72 $8.28 $7.89
----- ----- ----- ----- ----- -----
NET INVESTMENT INCOME ................................ 0.19 0.40 0.42 0.45 0.45 0.47
Net realized and unrealized
investment gain (loss) ............................... 0.04 0.11 (0.12) 0.11 (0.44) 0.51
----- ----- ----- ----- ----- -----
INCREASE FROM INVESTMENT
OPERATIONS ........................................... 0.23 0.51 0.30 0.56 0.01 0.98
Dividends paid or declared ........................... (0.19) (0.40) (0.42) (0.45) (0.45) (0.47)
Distributions from net gain realized ................. (0.01) -- (0.02) (0.01) (0.12) (0.12)
----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.03 0.11 (0.14) 0.10 (0.56) 0.39
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $7.82 $7.79 $7.68 $7.82 $7.72 $8.28
===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 2.99% 6.85% 3.99% 7.61% 0.12% 13.06%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 0.82%+ 0.85% 0.81% 0.87% 0.85% 0.90%
Net investment income to average net assets .......... 4.94%+ 5.21% 5.47% 5.89% 5.70% 5.89%
Portfolio turnover ................................... 8.48% 6.88% 26.89% 5.57% 3.30% 5.73%
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $121,449 $121,674 $126,173 $132,716 $134,990 $144,600
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------
YEAR ENDED
SIX MONTHS SEPTEMBER 30, 2/1/94**
ENDED --------------------------- TO
3/31/98 1997 1996 1995 9/30/94
---------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $7.79 $7.68 $7.82 $7.73 $8.22
----- ----- ----- ----- -----
NET INVESTMENT INCOME................................. 0.16 0.33 0.35 0.38 0.25
Net realized and unrealized
investment gain (loss) ............................... 0.04 0.11 (0.12) 0.10 (0.49)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.20 0.44 0.23 0.48 (0.24)
Dividends paid or declared ........................... (0.16) (0.33) (0.35) (0.38) (0.25)
Distributions from net gain realized ................. (0.01) -- (0.02) (0.01) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.03 0.11 (0.14) 0.09 (0.49)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $7.82 $7.79 $7.68 $7.82 $7.73
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 2.53% 5.89% 3.06% 6.45% (3.08)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 1.73%+ 1.75% 1.71% 1.85% 1.74%+
Net investment income to average net assets .......... 4.03%+ 4.31% 4.57% 4.92% 4.68%+
Portfolio turnover ................................... 8.48% 6.88% 26.89% 5.57% 3.30%++
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $1,807 $1,799 $2,036 $2,237 $1,649
</TABLE>
- -------------
See footnotes on page 57.
52
<PAGE>
FINANCIAL HIGHLIGHTS
MISSOURI SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR ENDED SEPTEMBER 30,
ENDED ---------------------------------------------------
3/31/98 1997 1996 1995 1994 1993
---------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $7.82 $7.71 $7.70 $7.41 $8.31 $7.80
----- ----- ----- ----- ----- -----
Net investment income ................................ 0.18 0.38 0.39 0.40 0.40 0.42
Net realized and unrealized
investment gain (loss) ............................... 0.08 0.19 0.08 0.36 (0.79) 0.57
----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.26 0.57 0.47 0.76 (0.39) 0.99
Dividends paid or declared ........................... (0.18) (0.38) (0.39) (0.40) (0.40) (0.42)
Distributions from net gain realized ................. (0.07) (0.08) (0.07) (0.07) (0.11) (0.06)
----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.01 0.11 0.01 0.29 (0.90) 0.51
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $7.83 $7.82 $7.71 $7.70 $7.41 $8.31
===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.34% 7.70% 6.27% 10.67% (4.85)% 13.17%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 0.89%+ 0.89% 0.86% 0.88% 0.74% 0.71%
Net investment income to average net assets .......... 4.69%+ 4.93% 5.03% 5.31% 5.18% 5.29%
Portfolio turnover ................................... 13.60% 6.47% 8.04% 3.88% 14.33% 17.03%
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $52,323 $52,766 $49,941 $51,169 $52,621 $56,861
Without management fee waiver:*
Net investment income per share .................... $0.39 $0.39 $0.41
Ratios:
Expenses to average net assets ..................... 0.93% 0.88% 0.91%
Net investment income to average net assets ........ 5.26% 5.04% 5.09%
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------
YEAR ENDED
SIX MONTHS SEPTEMBER 30, 2/1/94**
ENDED --------------------------- TO
3/31/98 1997 1996 1995 9/30/94
---------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $7.82 $7.72 $7.70 $7.41 $8.20
----- ----- ----- ----- -----
Net investment income ................................ 0.15 0.31 0.32 0.32 0.22
Net realized and unrealized
investment gain (loss) ............................... 0.08 0.18 0.09 0.36 (0.79)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.23 0.49 0.41 0.68 (0.57)
Dividends paid or declared ........................... (0.15) (0.31) (0.32) (0.32) (0.22)
Distributions from net gain realized ................. (0.07) (0.08) (0.07) (0.07) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.01 0.10 0.02 0.29 (0.79)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $7.83 $7.82 $7.72 $7.70 $7.41
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 2.88% 6.60% 5.46% 9.49% (7.16)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 1.79%+ 1.80% 1.76% 1.98% 1.70%+
Net investment income to average net assets .......... 3.79%+ 4.02% 4.13% 4.23% 4.27%+
Portfolio turnover ................................... 13.60% 6.47% 8.04% 3.88% 14.33%++
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $339 $474 $565 $515 $350
Without management fee waiver:*
Net investment income per share .................... $0.32 $0.22
Ratios:
Expenses to average net assets ..................... 2.03% 1.80%+
Net investment income to average net assets ........ 4.18% 4.17%+
</TABLE>
- -------------
See footnotes on page 57.
53
<PAGE>
FINANCIAL HIGHLIGHTS
NEW YORK SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR ENDED SEPTEMBER 30,
ENDED ---------------------------------------------------
3/31/98 1997 1996 1995 1994 1993
---------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.28 $7.98 $7.86 $7.67 $8.75 $8.13
----- ----- ----- ----- ----- -----
Net investment income ................................ 0.20 0.41 0.42 0.42 0.43 0.45
Net realized and unrealized
investment gain (loss) ............................... 0.14 0.32 0.12 0.36 (0.88) 0.74
----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.34 0.73 0.54 0.78 (0.45) 1.19
Dividends paid or declared ........................... (0.20) (0.41) (0.42) (0.42) (0.43) (0.45)
Distributions from net gain realized ................. (0.08) (0.02) -- (0.17) (0.20) (0.12)
----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.06 0.30 0.12 0.19 (1.08) 0.62
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.34 $8.28 $7.98 $7.86 $7.67 $8.75
===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 4.21% 9.45% 6.97% 10.93% (5.37)% 15.26%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 0.80%+ 0.82% 0.77% 0.88% 0.87% 0.94%
Net investment income to average net assets .......... 4.83%+ 5.09% 5.24% 5.52% 5.31% 5.37%
Portfolio turnover ................................... 20.49% 23.83% 25.88% 34.05% 28.19% 27.90%
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $82,965 $83,528 $82,719 $83,980 $90,914 $104,685
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------
YEAR ENDED
SIX MONTHS SEPTEMBER 30, 2/1/94**
ENDED --------------------------- TO
3/31/98 1997 1996 1995 9/30/94
---------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.29 $7.98 $7.87 $7.67 $8.55
----- ----- ----- ----- -----
Net investment income ................................ 0.16 0.34 0.34 0.34 0.23
Net realized and unrealized
investment gain (loss) ............................... 0.13 0.33 0.11 0.37 (0.88)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.29 0.67 0.45 0.71 (0.65)
Dividends paid or declared ........................... (0.16) (0.34) (0.34) (0.34) (0.23)
Distributions from net gain realized ................. (0.08) (0.02) -- (0.17) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.05 0.31 0.11 0.20 (0.88)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.34 $8.29 $7.98 $7.87 $7.67
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.61% 8.60% 5.86% 9.87% (7.73)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 1.71%+ 1.73% 1.68% 1.96% 1.81%+
Net investment income to average net assets .......... 3.92%+ 4.18% 4.33% 4.42% 4.39%+
Portfolio turnover ................................... 20.49% 23.83% 25.88% 34.05% 28.19%++
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $1,691 $1,572 $1,152 $885 $476
</TABLE>
- -------------
See footnotes on page 57.
54
<PAGE>
FINANCIAL HIGHLIGHTS
OHIO SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR ENDED SEPTEMBER 30,
ENDED ---------------------------------------------------
3/31/98 1997 1996 1995 1994 1993
---------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.19 $8.09 $8.11 $7.90 $8.77 $8.28
----- ----- ----- ----- ----- -----
Net investment income ................................ 0.20 0.42 0.43 0.44 0.44 0.46
Net realized and unrealized
investment gain (loss) ............................... 0.10 0.17 0.02 0.28 (0.70) 0.56
----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.30 0.59 0.45 0.72 (0.26) 1.02
Dividends paid or declared ........................... (0.20) (0.42) (0.43) (0.44) (0.44) (0.46)
Distributions from net gain realized ................. (0.11) (0.07) (0.04) (0.07) (0.17) (0.07)
----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... (0.01) 0.10 (0.02) 0.21 (0.87) 0.49
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.18 $8.19 $8.09 $8.11 $7.90 $8.77
===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.73% 7.54% 5.68% 9.59% (3.08)% 12.81%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 0.78%+ 0.81% 0.77% 0.84% 0.84% 0.85%
Net investment income to average net assets .......... 4.97%+ 5.19% 5.32% 5.56% 5.34% 5.44%
Portfolio turnover ................................... 19.77% 11.76% 12.90% 2.96% 9.37% 30.68%
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $152,730 $154,419 $162,243 $170,191 $171,469 $190,083
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------
YEAR ENDED
SIX MONTHS SEPTEMBER 30, 2/1/94**
ENDED --------------------------- TO
3/31/98 1997 1996 1995 9/30/94
---------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.23 $8.13 $8.15 $7.92 $8.61
----- ----- ----- ----- -----
Net investment income ................................ 0.17 0.35 0.36 0.36 0.24
Net realized and unrealized
investment gain (loss) ............................... 0.10 0.17 0.02 0.30 (0.69)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.27 0.52 0.38 0.66 (0.45)
Dividends paid or declared ........................... (0.17) (0.35) (0.36) (0.36) (0.24)
Distributions from net gain realized ................. (0.11) (0.07) (0.04) (0.07) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... (0.01) 0.10 (0.02) 0.23 (0.69)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.22 $8.23 $8.13 $8.15 $7.92
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.26% 6.57% 4.74% 8.67% (5.36)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 1.69%+ 1.71% 1.67% 1.93% 1.78%+
Net investment income to average net assets .......... 4.06%+ 4.29% 4.42% 4.48% 4.41%+
Portfolio turnover ................................... 19.77% 11.76% 12.90% 2.96% 9.37%++
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $1,249 $1,160 $1,011 $660 $324
</TABLE>
- -------------
See footnotes on page 57.
55
<PAGE>
FINANCIAL HIGHLIGHTS
OREGON SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR ENDED SEPTEMBER 30,
ENDED ---------------------------------------------------
3/31/98 1997 1996 1995 1994 1993
---------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $7.87 $7.65 $7.66 $7.43 $8.08 $7.60
----- ----- ----- ----- ----- -----
Net investment income ................................ 0.18 0.38 0.40 0.40 0.40 0.42
Net realized and unrealized
investment gain (loss) ............................... 0.11 0.26 -- 0.25 (0.59) 0.48
----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.29 0.64 0.40 0.65 (0.19) 0.90
Dividends paid or declared ........................... (0.18) (0.38) (0.40) (0.40) (0.40) (0.42)
Distributions from net gain realized ................. (0.10) (0.04) (0.01) (0.02) (0.06) --
----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.01 0.22 (0.01) 0.23 (0.65) 0.48
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $7.88 $7.87 $7.65 $7.66 $7.43 $8.08
===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.79% 8.60% 5.27% 9.05% (2.38)% 12.21%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 0.86%+ 0.90% 0.86% 0.86% 0.78% 0.78%
Net investment income to average net assets .......... 4.69%+ 4.88% 5.18% 5.40% 5.20% 5.35%
Portfolio turnover ................................... 3.89% 19.46% 28.65% 2.47% 9.43% 8.08%
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $55,372 $55,239 $57,345 $59,549 $59,884 $62,095
Without management fee waiver:*
Net investment income per share .................... $0.40 $0.39 $0.41
Ratios:
Expenses to average net assets ..................... 0.91% 0.89% 0.93%
Net investment income to average net assets ........ 5.35% 5.09% 5.20%
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------
YEAR ENDED
SIX MONTHS SEPTEMBER 30, 2/1/94**
ENDED --------------------------- TO
3/31/98 1997 1996 1995 9/30/94
---------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $7.87 $7.64 $7.65 $7.43 $8.02
----- ----- ----- ----- -----
Net investment income ................................ 0.15 0.31 0.33 0.33 0.22
Net realized and unrealized
investment gain (loss) ............................... 0.10 0.27 -- 0.24 (0.59)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.25 0.58 0.33 0.57 (0.37)
Dividends paid or declared ........................... (0.15) (0.31) (0.33) (0.33) (0.22)
Distributions from net gain realized ................. (0.10) (0.04) (0.01) (0.02) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... -- 0.23 (0.01) 0.22 (0.59)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $7.87 $7.87 $7.64 $7.65 $7.43
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.20% 7.77% 4.33% 7.86% (4.76)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 1.77%+ 1.80% 1.76% 1.83% 1.72%+
Net investment income to average net assets .......... 3.78%+ 3.98% 4.28% 4.41% 4.32%+
Portfolio turnover ................................... 3.89% 19.46% 28.65% 2.47% 9.43%++
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $1,816 $1,678 $1,540 $1,495 $843
Without management fee waiver:*
Net investment income per share .................... $0.33 $0.22
Ratios:
Expenses to average net assets ..................... 1.88% 1.82%+
Net investment income to average net assets ........ 4.36% 4.22%+
</TABLE>
- -------------
See footnotes on page 57.
56
<PAGE>
FINANCIAL HIGHLIGHTS
SOUTH CAROLINA SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR ENDED SEPTEMBER 30,
ENDED ---------------------------------------------------
3/31/98 1997 1996 1995 1994 1993
---------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.16 $8.07 $7.97 $7.61 $8.52 $8.00
----- ----- ----- ----- ----- -----
Net investment income ................................ 0.20 0.40 0.41 0.41 0.41 0.43
Net realized and unrealized
investment gain (loss) ............................... 0.12 0.22 0.12 0.37 (0.79) 0.54
----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.32 0.62 0.53 0.78 (0.38) 0.97
Dividends paid or declared ........................... (0.20) (0.40) (0.41) (0.41) (0.41) (0.43)
Distributions from net gain realized ................. (0.07) (0.13) (0.02) (0.01) (0.12) (0.02)
----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.05 0.09 0.10 0.36 (0.91) 0.52
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.21 $8.16 $8.07 $7.97 $7.61 $8.52
===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.96% 7.99% 6.82% 10.69% (4.61)% 12.52%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 0.80%+ 0.84% 0.80% 0.88% 0.83% 0.85%
Net investment income to average net assets .......... 4.80%+ 5.04% 5.15% 5.38% 5.12% 5.19%
Portfolio turnover ................................... 9.23% -- 20.66% 4.13% 1.81% 17.69%
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $105,237 $101,018 $108,163 $112,421 $115,133 $120,589
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------
YEAR ENDED
SIX MONTHS SEPTEMBER 30, 2/1/94**
ENDED --------------------------- TO
3/31/98 1997 1996 1995 9/30/94
---------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................. $8.16 $8.06 $7.97 $7.61 $8.42
----- ----- ----- ----- -----
Net investment income ................................ 0.16 0.33 0.34 0.34 0.22
Net realized and unrealized
investment gain (loss) ............................... 0.12 0.23 0.11 0.37 (0.81)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................................... 0.28 0.56 0.45 0.71 (0.59)
Dividends paid or declared ........................... (0.16) (0.33) (0.34) (0.34) (0.22)
Distributions from net gain realized ................. (0.07) (0.13) (0.02) (0.01) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ........... 0.05 0.10 0.09 0.36 (0.81)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ....................... $8.21 $8.16 $8.06 $7.97 $7.61
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ............... 3.50% 7.15% 5.73% 9.63% (7.14)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ....................... 1.71%+ 1.75% 1.70% 1.85% 1.74%+
Net investment income to average net assets .......... 3.89%+ 4.13% 4.25% 4.40% 4.29%+
Portfolio turnover ................................... 9.23% -- 20.66% 4.13% 1.81%++
NET ASSETS, END OF PERIOD
(000s omitted) ....................................... $4,404 $3,663 $2,714 $1,704 $1,478
</TABLE>
- -------------
* During the periods stated, the Manager, at its discretion, waived portions of
its fees for the Georgia, Missouri, and Oregon Series.
** Commencement of offering of Class D shares.
+ Annualized.
++ For the year ended September 30, 1994.
See Notes to Financial Statements.
57
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN MUNICIPAL FUND SERIES, INC.:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of the National, Colorado, Georgia, Louisiana,
Maryland, Massachusetts, Michigan, Minnesota, Missouri, New York, Ohio, Oregon,
and South Carolina Series of Seligman Municipal Fund Series, Inc. as of March
31, 1998, the related statements of operations for the six months then ended and
of changes in net assets for six months then ended and for the year ended
September 30, 1997, and the financial highlights for each of the periods
presented. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1998 by correspondence with the Fund's custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion. In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of each Series
of Seligman Municipal Fund Series, Inc. as of March 31, 1998, the results of
their operations, the changes in their net assets, and the financial highlights
for the respective stated periods, in conformity with generally accepted
accounting principles.
/s/ DELOITTE & TOUCHE LLP
New York, New York
May 1, 1998
- --------------------------------------------------------------------------------
58
<PAGE>
BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
JOHN R. GALVIN 2
DEAN, Fletcher School of Law and Diplomacy
at Tufts University
DIRECTOR, Raytheon Corporation
ALICE S. ILCHMAN 3
PRESIDENT, Sarah Lawrence College
TRUSTEE, Committee for Economic Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
JOHN E. MEROW
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Industries, Inc.
TRUSTEE, The New York and Presbyterian Hospital
BETSY S. MICHEL 2
TRUSTEE, The Geraldine R. Dodge Foundation
CHAIRMAN OF THE BOARD OF TRUSTEES, St. George's School
WILLIAM C. MORRIS 1
CHAIRMAN
CHAIRMAN OF THE BOARD, J. & W. Seligman & Co.
Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
JAMES C. PITNEY 3
RETIRED PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN 3
DIRECTOR, The Brooklyn Union Gas Company
TRUSTEE, Committee for Economic Development
DIRECTOR, Public Broadcasting Service
RICHARD R. SCHMALTZ 1
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER 3
RETIRED VICE PRESIDENT, Pfizer Inc.
JAMES N. WHITSON 2
DIRECTOR AND CONSULTANT, Sammons Enterprises, Inc.
DIRECTOR, CommScope, Inc.
DIRECTOR, C-SPAN
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
DIRECTOR EMERITUS
FRED E. BROWN
DIRECTOR AND CONSULTANT, J. & W. Seligman & Co.
Incorporated
- ----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
- --------------------------------------------------------------------------------
59
<PAGE>
EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
WILLIAM C. MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
THOMAS G. MOLES
VICE PRESIDENT
LAWRENCE P. VOGEL
VICE PRESIDENT
THOMAS G. ROSE
TREASURER
FRANK J. NASTA
SECRETARY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
MANAGER
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
GENERAL COUNSEL
Sullivan & Cromwell
INDEPENDENT AUDITORS
Deloitte & Touche LLP
GENERAL DISTRIBUTOR
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
IMPORTANT TELEPHONE NUMBERS
(800) 221-2450 Shareholder
Services
(212) 682-7600 Outside the
Continental
United States
(800) 622-4597 24-Hour Automated
Telephone Access
Service
- --------------------------------------------------------------------------------
60
<PAGE>
GLOSSARY OF FINANCIAL TERMS
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in a fund's portfolio. For tax purposes,
these profits may be taxed at different rates, primarily depending upon the
length of time the securities were owned by the fund.
CAPITAL APPRECIATION/DEPRECIATION -- An increase or decrease in the market value
of a mutual fund's portfolio securities, which is reflected in the net asset
value of the fund's shares. Capital appreciation/depreciation of an individual
security is in relation to the original purchase price.
COMPOUNDING -- The change in the value of an investment as shareholders receive
earnings on their investment's earnings. For example, if $1,000 is invested at a
fixed rate of 7% a year, the initial investment is worth $1,070 after one year.
If the return is compounded, second year earnings will not be based on the
original $1,000, but on the $1,070, which includes the first year's earnings.
CONTINGENT DEFERRED SALES LOAD (CDSL) -- Depending on the class of shares owned,
a fee charged by a mutual fund when shares are sold back to the fund (the CDSL
expires after a fixed time period).
DIVIDEND -- A payment by a mutual fund, usually derived from the fund's net
investment income (dividends and interest less expenses).
DIVIDEND YIELD -- A measurement of a fund's dividend as a percentage of the
maximum offering price.
EXPENSE RATIO -- The cost of doing business for a mutual fund, expressed as a
percent of the fund's net assets.
INVESTMENT OBJECTIVE -- The shared investment goal of a fund and its
shareholders.
MANAGEMENT FEE -- The amount paid by a mutual fund to its investment advisor(s).
MULTIPLE CLASSES OF SHARES -- Although an individual mutual fund invests in only
one portfolio of securities, it may offer investors several purchase options
which are "classes" of shares. Multiple classes permit shareholders to choose
the fee structure that best meets their needs and goals. Generally, each class
will differ in terms of how and when sales charges and certain fees are
assessed.
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD) -- A self-regulatory
body with authority over firms that distribute mutual funds.
NET ASSET VALUE (NAV) PER SHARE -- The market worth of one fund share, obtained
by adding a mutual fund's total assets (securities, cash, and any accrued
earnings), subtracting liabilities, and dividing the resulting net assets by the
number of shares outstanding.
OFFERING PRICE (OP) -- The price at which a mutual fund's share can be
purchased. The offering price per share is the current net asset value plus any
sales charge.
PORTFOLIO TURNOVER -- A measure of the trading activity in a mutual fund's
investment portfolio that reflects how often securities are bought and sold.
PROSPECTUS -- The legal document describing a mutual fund to all prospective
shareholders. It contains information required by the Securities and Exchange
Commission (SEC), such as a fund's investment objective and policies, services,
investment restrictions, officers and directors, how shares are bought and
redeemed, fund fees and other charges, and the fund's financial statements.
SEC YIELD -- SEC Yield refers to the net income earned by a fund during a recent
30-day period. This income is annualized and then divided by the maximum
offering price per share on the last day of the 30-day period. The SEC Yield
formula reflects semiannual compounding.
SECURITIES AND EXCHANGE COMMISSION -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- A document that contains updated or more
detailed information about a mutual fund and that supplements the prospectus. It
is available at no charge upon request.
TOTAL RETURN -- A measure of a fund's performance encompassing all elements of
return. Reflects the change in share price over a given period and assumes all
distributions are taken in additional fund shares. The Average Annual Total
Return represents the average annual compounded rate of return for the periods
presented.
YIELD ON SECURITIES -- For bonds, the current yield is the coupon rate of
interest, divided by the purchase price. For stocks, the yield is measured by
dividing dividends paid by the market price of the stock.
- -------------
Adapted from the Investment Company Institute's 1997 MUTUAL FUND FACT BOOK.
61
<PAGE>
THIS REPORT IS INTENDED ONLY FOR THE INFORMATION OF SHAREHOLDERS OR THOSE
WHO HAVE RECEIVED THE OFFERING PROSPECTUS COVERING SHARES OF CAPITAL STOCK OF
SELIGMAN MUNICIPAL FUND SERIES, INC., WHICH CONTAINS INFORMATION ABOUT THE SALES
CHARGES, MANAGEMENT FEE, AND OTHER COSTS. PLEASE READ THE PROSPECTUS CAREFULLY
BEFORE INVESTING OR SENDING MONEY.
SELIGMAN FINANCIAL SERVICES, INC.
an affiliate of
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
TEA3 3/98 [Logo] Printed on Recycled Paper
