SELIGMAN
- ----------------
MUNICIPAL FUND
SERIES, INC.
[GRAPHIC OMITTED]
MID-YEAR REPORT
MARCH 31, 1999
-------
PROVIDING
INCOME EXEMPT
FROM REGULAR
INCOME
TAX
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
[PICTURE OMITTED]
JAMES, JESSE, AND JOSEPH SELIGMAN, 1870
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 has a history of providing financial services
marked not by fanfare, but rather by a quiet and firm adherence to financial
prudence. While the world has changed dramatically in the 135 years since
Seligman first opened its doors, the firm has continued to offer its clients
high-quality investment solutions through 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.
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 that investment companies could have in building wealth for
individual investors and began managing its first mutual fund in 1930.
In the decades that followed, Seligman has continued to offer forward-looking
investment solutions, including equity funds that specialize in small companies,
technology, or international securities, and bond funds that focus on high-yield
issuers, US government bonds, or municipal 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
During Seligman Municipal Fund Series' six-month reporting period ended March
31, 1999, the US economy remained strong. In fact, the economy grew faster than
almost anyone had predicted.
At the Fund's fiscal year-end in September 1998, the consensus was that the US
economy would slow, possibly to recessionary levels, in the face of worldwide
financial disorder brought on by the Asian economic crisis. However, US consumer
strength was widely underestimated, and consumer confidence and the strong
consumer demand that accompanied it remained a powerful economic force. Not only
did the economy continue to surprise on the upside, it did so without signs of
rising inflation, a common side effect of prolonged and robust growth.
Despite evidence that inflation remained under control, the unexpected
acceleration in economic activity earlier this year caused bond-market
participants to worry that inflation posed a possible threat. This concern
pushed Treasury yields significantly higher. During these six months, Treasury
bond yields fluctuated within a wide range of 98 basis points. In contrast, the
municipal market remained relatively stable, with yields fluctuating within a
much narrower range of 32 basis points.
At the Fund's fiscal year-end in September 1998, the yield spread between
municipal bonds and Treasuries was unprecedentedly narrow. Recently, however, a
slowdown in the supply of new municipal bond issues and rising Treasury yields
caused the yield spread between municipal bonds and Treasury bonds to widen to a
more historically normal range. We believe that this trend will continue and, as
it does, the performance of the municipal market should improve relative to the
Treasury market.
The ongoing economic expansion in the US continued to benefit the municipal bond
market. Municipal bond issuers have been able to improve their financial
situations and, for the fourth year in a row, there were more credit-rating
upgrades than downgrades. We expect that this positive trend will continue.
The Fund's manager, J. & W. Seligman & Co. Incorporated, continues to work to
ensure that all of its operations are prepared for the challenges posed by the
Year 2000 (Y2K) computer issue. We are confident that there will be no
disruption in the investment and shareholder services provided by the Fund as a
result of Y2K. In addition, your portfolio management team considers the
potential ramifications of Y2K when making decisions on which securities should
be held by the Fund.
We appreciate your confidence in Seligman Municipal Fund Series and look forward
to serving your investment needs for many years to come. A discussion with your
Portfolio Manager and the Fund's portfolios of investments follow this letter.
By order of the Board of Directors,
/s/ William C. Morris
- ---------------------
William C. Morris
Chairman
/s/ Brian T. Zino
------------------
Brian T. Zino
President
April 30, 1999
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: During the past six months, the outlook for the US and global economies has
improved dramatically. At fiscal year-end in September 1998, economies
around the world were struggling with financial crises that threatened to
drag the US into recession. In response, the Federal Reserve Board took
immediate defensive action by lowering the federal funds rate three times
last fall.
However, the outlook for the US economy brightened as economies around the
world began to show signs of recovery and as strong US consumer demand
continued to drive economic growth.
While ending on a positive note, the last six months were nonetheless
volatile for equity markets, and thus for the US Treasury market, as
investors rushed to buy Treasury bonds during periods of market uncertainty.
This "flight to quality" was the primary cause of the sharp swings in
Treasury yields that were experienced during the period. The yield on the
30-year US Treasury bond fluctuated by more than 98 basis points during this
time.
In contrast to the volatility of the Treasury market, the municipal market
remained relatively stable throughout the period. Long-term municipal
interest rates fluctuated within a much narrower trading range of
approximately 32 basis points.
The historically low interest-rate environment led to a surge in municipal
new issue volume during 1998. The increase in municipal supply caused the
yield spread between municipal bonds and Treasury bonds to narrow, making
municipals particularly attractive. For a brief period in October, long-term
municipal yields actually exceeded long-term Treasury yields, an unusual
occurrence given the tax advantages of municipal ownership.
This situation has now begun to reverse itself. Year-to-date, new issue
volume has slowed from its robust pace, causing the yield spread between
municipal bonds and Treasury bonds to widen to a historically normal range.
[PICTURE OMITTED]
SELIGMAN MUNICIPALS TEAMS: (STANDING FROM LEFT) AUDREY KUCHTYAK, THERESA BARION,
DEBRA MCGUINNESS, (SEATED) EILEEN COMERFORD, THOMAS G. MOLES (PORTFOLIO MANAGER)
A TEAM APPROACH
Seligman Municipal Fund Series is managed by the Seligman Municipals Team,
headed by Thomas G. Moles. Mr. Moles is assisted in the management of the Fund
by a group of seasoned professionals who are responsible for research and
trading consistent with the Fund's investment objective.
2
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
THOMAS G. MOLES
The continued strength of the US economy, which is now in its ninth year of
economic expansion, has allowed the financial condition of the nation's
states, cities, and municipalities to steadily improve. For the fourth year
in a row, credit-rating upgrades exceeded downgrades. We expect that this
positive trend will continue with the possible exception of health care
bonds, whose issuers have been experiencing increased financial and
operating pressures.
Q: WHAT WAS YOUR INVESTMENT STRATEGY?
A: The relative lack of volatility in the municipal market limited our
opportunities to enhance total return through trading activity. Therefore,
we focused on improving the relative value of Seligman Municipal Fund
Series' portfolios. Through in-depth credit analysis and market research, we
have been able to identify municipal credits that we believe have been
undervalued by the market, and we have used this information in our security
selection process.
During the period, our investment strategy was consistent with our positive
outlook for the economy and long-term interest rates. We reduced portfolio
holdings with short durations, replacing them with longer-term bonds because
they offer the greatest opportunity for price appreciation during periods of
declining interest rates. (Conversely, during periods of rising interest
rates, long-term bonds will depreciate more than shorter-term bonds.)
Long-term bonds have also provided the highest yields historically. During
the past six months, long-term municipal yields rose slightly, resulting in
declines in Seligman Municipal Fund Series' net asset values.
We have concentrated new purchases in triple "A" rated insured bonds because
of the prevailing narrow yield spread between high-quality and lower-quality
bonds. At this time, lower-quality bonds do not offer enough additional
yield to compensate for the increased credit risk. For the six-month period,
high-quality insured bonds outperformed lower-quality bonds.
Q: WHAT IS YOUR OUTLOOK?
A: Recent economic reports have suggested that the economy may be strengthening
further, raising concerns about an acceleration in the rate of inflation. In
response, long-term municipal yields have increased modestly. However, we
believe that any increase in long-term yields will be temporary, and our
outlook for interest rates remains positive. We will continually monitor
market conditions and will adjust our investment strategy accordingly.
There are currently a number of factors that bode well for the municipal
market going forward. First, new issue supply has slowed, widening the yield
spread between municipals and Treasuries to a historically normal range. If
this trend continues, and we believe that it will, the performance of the
municipal market should improve relative to the Treasury market. In
addition, the municipal bond market has been the beneficiary of a healthy
economy and a stable rate of inflation, and we anticipate that these
favorable market conditions will continue for the balance of the year.
3
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
NATIONAL SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED MARCH 31, 1999
<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 (4.21)% (0.03)% 6.34% 7.03% n/a
Without Sales Charge 0.51 5.00 7.38 7.55 n/a
CLASS D**
With 1% CDSC (0.90) 2.95 n/a n/a n/a
Without CDSC 0.08 3.95 6.38 n/a 4.13%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 1.49 6.20 7.62 8.24 5.97++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED MARCH 31, 1999
3/31/99 9/30/98 3/31/98 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
--------- --------- --------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.17 $8.32 $8.16 CLASS A $0.193 -- 4.02%
CLASS D 8.16 8.31 8.16 CLASS D 0.157 -- 3.33
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
<S> <C> <C> <C>
Revenue Bonds 81% Aaa/AAA 42%
General Obligation Bonds 19 Aa/AA 29
A/A 20
WEIGHTED AVERAGE MATURITY 24.6 years Baa/BBB 9
</TABLE>
COLORADO SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED MARCH 31, 1999
<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 (4.11)% 0.07% 5.01% 6.16% n/a
Without Sales Charge 0.65 5.01 6.04 6.68 n/a
CLASS D**
With 1% CDSC (0.65) 3.04 n/a n/a n/a
Without CDSC 0.33 4.04 5.05 n/a 3.58%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 1.49 6.20 7.62 8.24 5.97++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED MARCH 31, 1999
3/31/99 9/30/98 3/31/98 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
--------- --------- --------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.52 $7.64 $7.50 CLASS A $0.171 -- 3.84%
CLASS D 7.52 7.63 7.50 CLASS D 0.136 -- 3.13
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGS0
<S> <C> <C> <C>
Revenue Bonds 78% Aaa/AAA 58%
General Obligation Bonds 22 Aa/AA 17
A/A 12
WEIGHTED AVERAGE MATURITY 20.5 years Baa/BBB 13
</TABLE>
- ---------------------------
See footnotes on page 10.
4
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
GEORGIA SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED MARCH 31, 1999
<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 (3.88)% 0.38% 6.31% 7.17% n/a
Without Sales Charge 0.94 5.40 7.35 7.70 n/a
CLASS D**
With 1% CDSC (0.49) 3.45 n/a n/a n/a
Without CDSC 0.50 4.45 6.41 n/a 4.52%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 1.49 6.20 7.62 8.24 5.97++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED MARCH 31, 1999
3/31/99 9/30/98 3/31/98 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
--------- --------- --------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.23 $8.38 $8.21 CLASS A $0.184 $0.045 3.71%
CLASS D 8.25 8.40 8.23 CLASS D 0.147 0.045 3.00
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR0 MOODY'S/S&P RATINGS0
<S> <C> <C> <C>
Revenue Bonds 65% Aaa/AAA 43%
General Obligation Bonds 35 Aa/AA 30
A/A 24
WEIGHTED AVERAGE MATURITY 17.7 years Baa/BBB 3
</TABLE>
LOUISIANA SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED MARCH 31, 1999
<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 (3.84)% 0.21% 5.80% 6.91% n/a
Without Sales Charge 0.91 5.24 6.82 7.44 n/a
CLASS D**
With 1% CDSC (0.40) 3.43 n/a n/a n/a
Without CDSC 0.58 4.42 5.83 n/a 4.28%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 1.49 6.20 7.62 8.24 5.97++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED MARCH 31, 1999
3/31/99 9/30/98 3/31/98 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
--------- --------- --------- ------------ ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.28 $8.51 $8.36 CLASS A $0.194 $0.112 3.90%
CLASS D 8.28 8.50 8.35 CLASS D 0.157 0.112 3.19
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
<S> <C> <C> <C>
Revenue Bonds 85% Aaa/AAA 79%
General Obligation Bonds 15 Aa/AA 13
Baa/BBB 8
WEIGHTED AVERAGE MATURITY 20.8 years
</TABLE>
- --------------------
See footnotes on page 10.
5
<PAGE>
MARYLAND SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED MARCH 31, 1999
<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 (3.45)% 0.38% 5.84% 6.91% n/a
Without Sales Charge 1.31 5.40 6.87 7.43 n/a
CLASS D**
With 1% CDSC (0.13) 3.58 n/a n/a n/a
Without CDSC 0.86 4.58 5.90 n/a 4.31%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 1.49 6.20 7.62 8.24 5.97++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED MARCH 31, 1999
3/31/99 9/30/98 3/31/98 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
--------- --------- --------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.21 $8.32 $8.19 CLASS A $0.191 $0.028 3.93%
CLASS D 8.22 8.33 8.19 CLASS D 0.154 0.028 3.23
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
<S> <C> <C> <C>
Revenue Bonds 72% Aaa/AAA 42%
General Obligation Bonds 28 Aa/AA 39
A/A 17
Weighted Average maturity 21.5 years Baa/BBB 2
</TABLE>
MASSACHUSETTS SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED MARCH 31, 1999
<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 (4.24)% 0.77% 5.94% 7.14% n/a
Without Sales Charge 0.51 5.79 6.98 7.66 n/a
CLASS D**
With 1% CDSC (0.82) 3.96 n/a n/a n/a
Without CDSC 0.18 4.97 5.99 n/a 4.54%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 1.49 6.20 7.62 8.24 5.97++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED MARCH 31, 1999
3/31/99 9/30/98 3/31/98 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
--------- --------- --------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.08 $8.27 $8.04 CLASS A $0.182 $0.050 3.79%
CLASS D 8.08 8.26 8.03 CLASS D 0.144 0.050 3.08
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
<S> <C> <C> <C>
Revenue Bonds 82% Aaa/AAA 62%
General Obligation Bonds 18 Aa/AA 26
A/A 5
WEIGHTED AVERAGE MATURITY 21.9 years Baa/BBB 5
Non-Rated 2
</TABLE>
- ------------------
See footnotes on page 10.
6
<PAGE>
MICHIGAN SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED MARCH 31, 1999
<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 (3.89)% 0.60% 5.81% 7.18% n/a
Without Sales Charge 0.90 5.60 6.84 7.71 n/a
CLASS D**
With 1% CDSC (0.52) 3.67 n/a n/a n/a
Without CDSC 0.45 4.66 5.82 n/a 4.38%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 1.49 6.20 7.62 8.24 5.97++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED MARCH 31, 1999
3/31/99 9/30/98 3/31/98 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
--------- --------- --------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.55 $8.83 $8.64 CLASS A $0.200 $0.158 3.79%
CLASS D 8.54 8.82 8.63 CLASS D 0.160 0.158 3.09
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
<S> <C> <C> <C>
Revenue Bonds 72% Aaa/AAA 60%
General Obligation Bonds 28 Aa/AA 32
A/A 8
WEIGHTED AVERAGE MATURITY 20.9 years
</TABLE>
MINNESOTA SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED MARCH 31, 1999
<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 (3.57)% 0.85% 4.79% 6.48% n/a
Without Sales Charge 1.27 5.88 5.82 6.99 n/a
CLASS D**
With 1% CDSC (0.16) 3.93 n/a n/a n/a
Without CDSC 0.82 4.93 4.86 n/a 3.78%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 1.49 6.20 7.62 8.24 5.97++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED MARCH 31, 1999
3/31/99 9/30/98 3/31/98 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
--------- --------- --------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.80 $7.98 $7.82 CLASS A $0.182 $0.098 4.01%
CLASS D 7.80 7.98 7.82 CLASS D 0.147 0.098 3.31
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
<S> <C> <C> <C>
Revenue Bonds 52% Aaa/AAA 41%
General Obligation Bonds 48 Aa/AA 36
A/A 18
Weighted Average maturity 18.6 years Baa/BBB 5
</TABLE>
- --------------------
See footnotes on page 10.
7
<PAGE>
MISSOURI SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED MARCH 31, 1999
<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 (4.38)% 0.31% 5.76% 6.77% n/a
Without Sales Charge 0.38 5.31 6.80 7.29 n/a
Class D**
With 1% CDSC (1.04) 3.38 n/a n/a n/a
Without CDSC (0.07) 4.37 5.80 n/a 4.04%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 1.49 6.20 7.62 8.24 5.97++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED MARCH 31, 1999
3/31/99 9/30/98 3/31/98 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
--------- --------- --------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.77 $8.03 $7.83 CLASS A $0.172 $0.118 3.80%
CLASS D 7.77 8.03 7.83 CLASS D 0.137 0.118 3.09
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
<S> <C> <C> <C>
Revenue Bonds 82% Aaa/AAA 36%
General Obligation Bonds 18 Aa/AA 53
A/A 9
WEIGHTED AVERAGE MATURITY 20.6 YEARS BAA/BBB 2
</TABLE>
NEW YORK SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED MARCH 31, 1999
<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 (4.37)% 0.93% 6.58% 7.43% n/a
Without Sales Charge 0.42 6.01 7.62 7.96 n/a
CLASS D**
With 1% CDSC (0.87) 4.19 n/a n/a n/a
Without CDSC 0.09 5.18 6.60 n/a 4.74%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 1.49 6.20 7.62 8.24 5.97++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED MARCH 31, 1999
3/31/99 9/30/98 3/31/98 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
--------- --------- --------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.24 $8.60 $8.34 CLASS A $0.188 $0.207 3.94%
CLASS D 8.25 8.60 8.34 CLASS D 0.149 0.207 3.24
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
<S> <C> <C> <C>
Revenue Bonds 82% Aaa/AAA 63%
General Obligation Bonds 18 Aa/AA 7
A/A 22
WEIGHTED AVERAGE MATURITY 23.1 YEARS BAA/BBB 8
</TABLE>
- --------------------------
See footnotes on page 10.
8
<PAGE>
OHIO SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED MARCH 31, 1999
<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 (4.01)% 0.66% 5.64% 6.92% n/a
Without Sales Charge 0.80 5.71 6.68 7.44 n/a
CLASS D**
With 1% CDSC (0.61) 3.77 n/a n/a n/a
Without CDSC 0.36 4.76 5.75 n/a 4.28%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 1.49 6.20 7.62 8.24 5.97++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED MARCH 31, 1999
3/31/99 9/30/98 3/31/98 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
--------- --------- --------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.11 $8.37 $8.18 CLASS A $0.193 $0.132 3.77%
CLASS D 8.15 8.41 8.22 CLASS D 0.157 0.132 3.06
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
<S> <C> <C> <C>
Revenue Bonds 67% Aaa/AAA 79%
General Obligation Bonds 33 Aa/AA 13
A/A 5
WEIGHTED AVERAGE MATURITY 19.3 years Baa/BBB 3
</TABLE>
OREGON SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED MARCH 31, 1999
<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 (3.61)% 0.77% 5.70% 6.91% n/a
Without Sales Charge 1.18 5.75 6.74 7.43 n/a
CLASS D**
WITH 1% CDSC (0.25) 3.80 n/a n/a
N/A
Without CDSC 0.73 4.80 5.74 n/a 4.41%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 1.49 6.20 7.62 8.24 5.97++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED MARCH 31, 1999
3/31/99 9/30/98 3/31/98 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
--------- --------- --------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.92 $8.05 $7.88 CLASS A $0.174 $0.050 3.88%
CLASS D 7.91 8.04 7.87 CLASS D 0.139 0.050 3.18
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
<S> <C> <C> <C>
Revenue Bonds 65% Aaa/AAA 42%
General Obligation Bonds 35 Aa/AA 31
A/A 19
WEIGHTED AVERAGE MATURITY 17.9 years Baa/BBB 8
</TABLE>
- -------------------
See footnotes on page 10.
9
<PAGE>
SOUTH CAROLINA SERIES
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED MARCH 31, 1999
<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 (4.18)% 0.17% 5.99% 7.05% n/a
Without Sales Charge 0.63 5.17 7.03 7.58 n/a
CLASS D**
With 1% CDSC (0.80) 3.23 n/a n/a n/a
Without CDSC 0.18 4.22 6.08 n/a 4.32%
LEHMAN BROTHERS
MUNICIPAL BOND INDEX*** 1.49 6.20 7.62 8.24 5.97++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED MARCH 31, 1999
3/31/99 9/30/98 3/31/98 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
--------- --------- --------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.18 $8.38 $8.21 CLASS A $0.186 $0.066 3.80%
CLASS D 8.18 8.38 8.21 CLASS D 0.149 0.066 3.10
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTORo MOODY'S/S&P RATINGSo
<S> <C> <C> <C>
Revenue Bonds 93% Aaa/AAA 64%
General Obligation Bonds 7 Aa/AA 12
A/A 20
WEIGHTED AVERAGE MATURITY 20.3 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 charge ("CDSC"),
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 each Series' 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. It is composed of approximately 60%
revenue bonds and 40% state government obligations. 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, 1999.
++ Current yield, representing the annualized yield for the 30-day period ended
March 31, 1999, has been computed in accordance with SEC regulations and
will vary.
0 Percentages based on market values of long-term holdings at March 31, 1999.
NATIONAL SERIES
10
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
11
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1999
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
STATE AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------- --------------- ----------- --------
<S> <C> <C> <C> <C>
ALABAMA -- 3.6% $4,000,000 Jefferson County Sewer Rev., 51/8% due 2/1/2039 .......... Aaa/AAA $ 3,916,560
Alaska-- 1.4% 1,500,000 Alaska Housing Finance Corporation Mortgage Rev.,
53/4% due 6/1/2024* .................................... Aaa/AAA 1,555,575
California -- 2.6% 2,500,000 San Joaquin Hills Transportation Corridor Agency Rev.
(Orange County Senior Lien Toll Road),
63/4% due 1/1/2032 .................................... Aaa/AAA 2,819,375
Florida-- 4.5% 5,000,000 Jacksonville Electric Authority (Electric System Rev.),
5.10% due 10/1/2032 ................................... Aa2/AA 4,928,900
Illinois-- 6.5% 3,000,000 Chicago Water Rev., 51/2% due 11/1/2022 .................. Aaa/AAA 3,111,990
1,250,000 Illinois Health Facilities Authority Rev. (Edward Hospital
Project), 6% due 2/15/2019 ............................ A2/A+ 1,307,813
2,500,000 Illinois Health Facilities Authority Rev. (Northwestern
Memorial Hospital), 6% due 8/15/2024 .................. Aa2/AA 2,681,650
Kentucky -- 1.9% 1,880,000 Trimble County Pollution Control Rev. (Louisville
Gas & Electric Co. Project), 75/8% due 11/1/2020* ........ Aa2/A+ 2,008,103
Michigan -- 2.2% 2,250,000 Michigan State Strategic Fund Pollution Control Rev.
(General Motors Corp.), 6.20% due 9/1/2020 ............ A2/A 2,421,585
Missouri -- 4.6% 4,750,000 St. Louis Industrial Development Authority Pollution
Control Rev. (Anheuser-Busch Companies, Inc. Project),
57/8% due 11/1/2026* .................................. A1/A+ 4,972,823
NEVADA-- 4.7% 5,000,000 Clark County Industrial Development Rev. (Nevada
Power Company Project), 5.90% due 11/1/2032* .......... NR/BBB- 5,089,950
New York-- 4.5% 3,500,000 New York City GOs, 71/4% due 8/15/2024 ................... Aaa/A- 3,791,515
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 1,058,660
South 2,000,000 Oconee County Pollution Control Rev. (Duke Power
Carolina-- 1.9% Company Project), 71/2% due 2/1/2017 .................. Aa2/AA- 2,066,480
South 6,000,000 South Dakota Housing Development Authority Rev.
Dakota-- 5.7% (Home ownership Mortgage), 6.15% due 5/1/2026* ......... Aa1/AAA 6,161,280
Texas-- 18.2% 3,700,000 Harris County Health Facilities Development Corp.
Hospital Rev. (St. Luke's Episcopal Hospital Project),
63/4% due 2/15/2021 ................................... Aa3/AAA 3,971,210
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 2,184,100
2,000,000 Harris County Health Facilities Development Corp. SCH
Health Care System Rev. (Sisters of Charity of the
Incarnate Word), 53/4% due 7/1/2027 ................... Aa3/AA 2,094,460
4,750,000 Potter County Industrial Development Corp. Pollution
Control Rev. (Southwestern Public Service Company
Project), 53/4% due 9/1/2016 .......................... Aaa/AAA 5,095,895
2,375,000 San Antonio Electric & Gas Rev., 51/2% due 2/1/2020 ..... Aa1/AA 2,454,990
125,000 San Antonio Electric & Gas Rev., 51/2% due 2/1/2020 ..... Aa1/AA 136,297
</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, 1999
NATIONAL SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
STATE AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------- --------------- ----------- --------
<S> <C> <C> <C> <C>
Texas (continued) $2,200,000 Texas Veterans Housing Assistance GOs, 6.80%
due 12/1/2023* ..................................... Aa2/AA $ 2,359,654
1,340,000 Travis County Housing Finance Corporation (Single
Family Mortgage Rev.), 6.95% due 10/1/2027 ......... NR/AAA 1,444,171
UTAH-- 3.6% 4,000,000 Intermountain Power Agency Power Supply Rev.,
5% due 7/1/2020 .................................... Aaa/AAA 3,902,520
VIRGINIA -- 9.5 5,000,000 Fairfax County Industrial Development Authority
Health Care Rev. (Inova Health System Project),
6% due 8/15/2026 ................................... Aa2/AA 5,413,000
5,000,000 Pocahont as Parkway Association Toll Road Bonds
(Route 895 Connector), 51/2% due 8/15/2028 ......... Baa3/BBB- 4,928,000
WASHINGTON-- 12.6% 4,325,000 King County Sewer GOs, 61/8% due 1/1/2033 ............. Aaa/AAA 4,747,466
3,000,000 Port Seattle Rev., 51/2% due 9/1/2021 ................. Aaa/AAA 3,093,570
5,520,000 Seattle Water System Rev., 55/8% due 8/1/2026 ......... Aaa/AAA 5,777,232
WISCONSIN -- 6.1% 6,000,000 LaCrosse Resource Recovery Rev. (Northern States
Power Company Project), 6% due 11/1/2021* ......... A1/AA- 6,565,680
WYOMING -- 3.9% 4,000,000 Sweet water County Pollution Control Rev. (Idaho Power
Company Project), 6.05% due 7/15/2026 .............. A3/A 4,241,560
------------
TOTAL MUNICIPAL BONDS (Cost $100,659,942)-- 98.0% ..................................................... 106,302,064
VARIABLE RATE DEMAND NOTES (Cost $1,000,000)-- 0.9% ................................................... 1,000,000
OTHER ASSETS LESS LIABILITIES-- 1.1% .................................................................. 1,222,826
------------
NET ASSETS-- 100.0% $108,524,890
============
</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 $ 3,209,820
1,000,000 Boulder, Larimer and Weld Counties, CO (Vrain Valley School District),
5% due 12/15/2022 .............................................................. Aaa/AAA 987,610
2,000,000 Colorado Health Facilities Authority Rev. (North Colorado Medical Center),
6% due 5/15/2020 ............................................................... Aaa/AAA 2,152,760
2,250,000 Colorado Health Facilities Authority Rev. (Sisters of Charity of Leavenworth
Health Services Corporation), 5% due 12/1/2025 ................................. Aaa/AAA 2,198,002
2,000,000 Colorado Health Facilities Authority Rev. (Catholic Health Initiatives),
5% due 12/1/2028 ............................................................... Aaa/AA 1,930,920
2,350,000 Colorado Springs, CO Utilities Rev., 53/8% due 11/15/2026 ......................... Aaa/AA 2,410,982
105,000 Colorado Water Resources & Power Development Authority
(Clean Water Rev.), 67/8% due 9/1/2011 ......................................... Aaa/AAA 113,166
2,000,000 Colorado Water Resources & Power Development Authority
(Clean Water Rev.), 6% due 9/1/2014 ............................................ Aaa/AAA 2,143,940
</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>
PORTFOLIO OF INVESTMENTS
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 Rev.), 6.30% due 9/1/2014 .................................... Aaa/AAA $ 1,089,190
2,000,000 Denver, CO City & County (St. Anthony Hospital Systems Rev.),
7-3/4% due 5/1/2014 ....................................................... Aaa/AAA 2,027,520
2,000,000 Denver, CO City &County Department of Aviation Airport System Rev.,
5-1/2% due 11/15/2025 ..................................................... Aaa/AAA 2,076,500
500,000 Denver, CO City & County School District GOs, 5% due 12/1/2019 ................ Aaa/AAA 495,515
2,200,000 Denver, CO City & County School District GOs, 5% due 12/1/2023 ............... Aaa/AAA 2,172,214
2,000,000 Denver, CO Health and Hospital Authority Healthcare Rev., 53/8% due 12/1/2028 . Baa2/BBB 1,943,540
1,985,000 Fort Collins, CO GOs Water Bonds, 6-3/8% due 12/1/2012 ....................... Aa1/AA 2,180,582
2,500,000 Fort Collins Pollution Control Rev. (Anheuser-Busch Project), 6% due 9/1/2031. A1/A+ 2,696,325
1,000,000 Fountain Valley Authority, CO Water Treatment Rev., 6.80% due 12/1/2019 ...... Aa/AA 1,066,710
1,895,000 Northglenn, CO GOs Joint Water & Wastewater Utility, 6.80% due 12/1/2008 ..... Aaa/NR 2,130,757
2,500,000 Platte River Power Authority, CO Power Rev., 61/8% due 6/1/2014 .............. Aa3/A+ 2,661,900
1,590,000 Pueblo County, CO Single Family Mortgage Rev., 7.05% due 11/1/2027 ........... NR/AAA 1,710,586
2,000,000 Puerto Rico Highway & Transportation Authority Rev., 51/2% due 7/1/2036 ...... Baa1/A 2,119,280
2,000,000 University of Colorado Hospital Authority Rev., 51/4% due 11/15/2022 ......... Aaa/NR 2,004,720
2,000,000 Virgin Islands Public Finance Authority Rev., 51/2% due 10/1/2022 ............ NR/BBB- 2,011,860
2,000,000 Westminster, CO (Adams & Jefferson Counties) Sales & Use Tax Rev.,
7% due 12/1/2008 .......................................................... Aaa/AAA 2,130,040
-------------
TOTAL MUNICIPAL BONDS (Cost $43,221,007)-- 95.6% .......................................................... 45,664,439
VARIABLE RATE DEMAND NOTES (Cost $1,300,000)-- 2.7% ....................................................... 1,300,000
OTHER ASSETS LESS LIABILITIES-- 1.7% ...................................................................... 815,634
-------------
NET ASSETS-- 100.0% ....................................................................................... $47,780,073
=============
</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., 51/4% due 1/1/2027 ........................... Aaa/AAA $ 2,537,925
1,000,000 Cartersville, GA Development Authority Rev. Water & Wastewater Facilities
(Anheuser-Busch), 7.40% due 11/1/2010* .................................... A1/A+ 1,220,120
2,000,000 Cartersville, GA Development Authority Rev. Water & Wastewater Facilities
(Anheuser-Busch), 63/4% due 2/1/2012* ..................................... A1/A+ 2,175,080
3,000,000 Chatham County, GA School District GOs, 51/2% due 8/1/2020 ................... Aaa/AAA 3,101,730
2,000,000 Columbia County, GA School District GOs, 61/4% due 4/1/2013 .................. Aaa/AAA 2,242,680
1,000,000 DEKALB COUNTY, GA GOS, 51/4% DUE 1/1/2020 .................................... AA1/AA+ 1,011,240
1,000,000 DeKalb County, GA Water & Sewerage Rev., 7% due 10/1/2014 .................... Aaa/AA 1,073,070
2,000,000 DeKalb County, GA Water & Sewerage Rev., 51/4% due 10/1/2023 ................. Aa/AA 2,023,040
700,000 DeKalb Private Hospital Authority, GA Rev. (Emory University Project),
63/4% due 4/1/2017 ........................................................ Aa1/AA 755,503
300,000 DeKalb Private Hospital Authority, GA Rev. (Emory University Project),
7% due 4/1/2021 ........................................................... Aa1/AA 325,224
</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>
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999
GEORGIA SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$ 1,000,000 Fayette County, GA School District GOs, 61/8% due 3/1/2015 .................... Aa/A+ $ 1,103,800
1,000,000 Fulco Hospital Authority Health System Rev. (Catholic Health East),
5% due 11/15/2028 .......................................................... Aaa/AAA 972,830
3,000,000 Fulton County, GA School District GOs, 55/8% due 1/1/2021 ..................... Aa2/AA 3,263,970
2,250,000 Georgia Housing & Finance Authority Rev. (Single Family Mortgage),
51/4% due 12/1/2020 ........................................................ Aa2/AAA 2,272,500
2,500,000 Georgia Municipal Gas Authority Rev. (Southern Storage Gas Project),
6.40% due 7/1/2014 ......................................................... NR/A- 2,683,200
1,000,000 Georgia State GOs, 53/4% due 2/1/2011* ........................................ Aaa/AAA 1,054,840
1,750,000 Glynn-Brunswick Memorial Hospital Authority Rev. (Southeast Georgia Health
Systems Project), 6% due 8/1/2016 .......................................... Aaa/AAA 1,894,060
1,000,000 Gwinnett County, GA School District GOs, 6.40% due 2/1/2012 ................... Aa1/AA+ 1,175,060
1,500,000 Henry County School District, GA GOs, 6.45% due 8/1/2011 ...................... A1/A+ 1,763,820
500,000 Metropolitan Atlanta Rapid Transit Authority, GA Sales Tax Rev.,
61/4% due 7/1/2018 ......................................................... A1/AA- 574,280
2,000,000 Monroe County, GA Development Authority Pollution Control Rev.
(Georgia Power Company Plant-- Scherer Project), 6% due 7/1/2025 ........... Aaa/AAA 2,093,460
2,500,000 Peach tree City, GA Water &Sewerage Authority Sewer System Rev.,
5.60% due 3/1/2027 ......................................................... Aa3/AA 2,644,100
2,000,000 Private Colleges & Universities Authority Rev., GA (Spelman College Project),
6.20% due 6/1/2014 ......................................................... Aaa/AAA 2,211,260
1,500,000 Private Colleges & Universities Authority Rev., GA (Mercer University Project),
61/2% due 11/1/2015 ........................................................ Aaa/AAA 1,789,245
3,000,000 Private Colleges & Universities Authority Rev., GA (Agnes Scott College Project),
55/8% due 6/1/2023 ......................................................... A1/AA 3,135,420
1,500,000 Puerto Rico Highway & Transportation Authority Rev., 51/2% due 7/1/2026 ....... Baa1/A 1,558,260
2,000,000 Savannah, GA Airport Rev., 61/4% due 1/1/2015* ................................ Aaa/AAA 2,142,580
-----------
Total Municipal Bonds (Cost $44,867,088)-- 98.1% ............................................................ 48,798,297
Variable Rate Demand Notes (Cost $1,000,000)-- 2.0% ......................................................... 1,000,000
Other Assets Less Liabilities-- (0.1)% ...................................................................... (77,188)
-----------
NET ASSETS-- 100.0% ......................................................................................... $49,721,109
===========
</TABLE>
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/BBB+ $ 3,237,870
2,500,000 Calcasieu Parish, LA Industrial Development Board (Conoco Inc. Project),
53/4% due 12/1/2026* ....................................................... Aa3/AA- 2,626,975
</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.
15
<PAGE>
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999
LOUISIANA SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$ 1,775,000 East Baton Rouge Parish, LA Mortgage Finance Authority (Single Family
Mortgage Rev.), 5.40% due 10/1/2025 ........................................ Aaa/NR $ 1,793,389
3,000,000 East Baton Rouge Parish, LA Public Improvement Sales & Use Tax Rev.,
5.90% due 2/1/2018 ......................................................... Aaa/AAA 3,191,850
2,000,000 Houma, LA Utilities Rev., 61/4% due 1/1/2012 .................................. Aaa/AAA 2,149,640
2,000,000 Jefferson Parish, LA Home Mortgage Authority (Single Family Mortgage Rev.),
6% due 12/1/2024* .......................................................... Aa/NR 2,065,140
2,000,000 Jefferson Parish, LA Hospital Service District Rev., 5% due 7/1/2028 .......... Aaa/AAA 1,922,620
2,500,000 Lafayette, LA Public Improvement Sales Tax, 5% due 5/1/2021 ................... Aaa/AAA 2,440,775
2,495,000 Louisiana Housing Finance Agency Mortgage Rev. (Single Family),
6.45% due 6/1/2027* ........................................................ Aaa/AAA 2,642,704
2,500,000 Louisiana Public Facilities Authority Hospital Rev. (Franciscan Missionaries
of Our Lady Health System Project), 5% due 7/1/2025 ........................ Aaa/AAA 2,411,300
2,500,000 Louisiana Public Facilities Authority Rev. (Loyola University Project),
55/8% due 10/1/2016 ........................................................ Aaa/AAA 2,657,950
3,000,000 Louisiana Public Facilities Authority Rev. (Tulane University),
53/4% due 2/15/2021 ........................................................ Aaa/AAA 3,137,910
1,500,000 Louisiana State GOs, 5% due 4/15/2018 ......................................... Aaa/AAA 1,483,635
2,000,000 Louisiana State University & Agricultural & Mechanical College Auxiliary Rev.,
53/4% due 7/1/2014 ......................................................... Aaa/AAA 2,151,160
2,500,000 Ouachita Parish, LA Hospital Service District Rev. (Glenwood Regional
Medical Center), 53/4% due 5/15/2021 ....................................... Aaa/AAA 2,640,825
190,000 Ouachita Parish, LA Industrial Development Rev. (International Paper Company),
61/2% due 4/1/2006 ......................................................... NR/NR 190,171
2,500,000 Saint Bernard Parish, LA Exempt Facility Rev. (Mobil Oil Corporation Project),
5.90% due 11/1/2026* ....................................................... Aa2/AA 2,689,250
1,250,000 Saint Charles Parish, LA Environmental Improvement Rev. (Louisiana Power
and Light Company Project), 6.20% due 5/1/2023* ............................ Baa2/BBB 1,293,137
2,960,000 Saint Charles Parish, LA Waterworks & Wastewater District Utility Rev.,
7.15% due 7/1/2016 ......................................................... Aaa/AAA 3,226,045
2,500,000 Shreveport, LA Airport System Rev., 53/8% due 1/1/2024* ....................... Aaa/AAA 2,521,125
1,555,000 Shreveport, LA GOs, 71/2% due 4/1/2006 ........................................ Aaa/AAA 1,848,911
2,750,000 Shreveport, LA GOs, 5% due 3/1/2019 ........................................... Aaa/AAA 2,725,910
2,050,000 Sulphur, LA Housing & Mortgage Finance Trust (Residential Mortgage Rev.),
71/4% due 12/1/2010 ........................................................ Aaa/AAA 2,409,980
2,500,000 Tangipahoa Parish, LA Hospital Service District No. 1 Rev. (Northoaks
Medical Center), 61/4% due 2/1/2024 ........................................ Aaa/AAA 2,745,475
-------------
Total Municipal Bonds (Cost $52,841,091)-- 101.5% ........................................................... 56,203,747
Variable Rate Demand Notes (Cost $1,000,000)-- 1.8% ......................................................... 1,000,000
Other Assets Less Liabilities-- (3.3)% ...................................................................... (1,854,303)
-------------
NET ASSETS-- 100.0% ......................................................................................... $55,349,444
=============
</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>
ORTFOLIO OF INVESTMENTS
MARCH 31, 1999
MARYLAND SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$1,340,000 Anne Arundel County, MD GOs, 51/8% due 2/1/2026 ............................... Aa2/AA+ $ 1,344,877
1,340,000 Anne Arundel County, MDGOs, 51/8% due 2/1/2027 ................................ Aa2/AA+ 1,344,877
3,000,000 Anne Arundel County, MD Pollution Control Rev. (Baltimore Gas and Electric
Company Project), 6% due 4/1/2024 .......................................... A2/A 3,225,120
2,000,000 Baltimore, MD Consolidated Public Improvement GOs, 63/8% due 10/15/2006 ....... Aaa/AAA 2,287,600
2,500,000 Baltimore, MD Port Facilities Rev. (Consolidated Coal Sales Co. Project),
61/2% due 10/1/2011 ........................................................ Aa3/AA- 2,730,425
2,000,000 Baltimore, MD Project and Refunding Rev. (Water Projects), 51/2% due 7/1/2026 . Aaa/AAA 2,087,640
2,000,000 Howard County, MD Metropolitan District Project GOs, 51/2% due 8/15/2022 ...... Aaa/AAA 2,061,560
2,000,000 Maryland Community Development Administration Dept. of Housing &
Community Development (Multi-Family Housing), 7.70% due 5/15/2020* ......... Aa/NR 2,117,100
2,465,000 Maryland Community Development Administration Dept. of Housing &
Community Development (Single Family Program), 6.80% due 4/1/2024* ......... Aa2/NR 2,626,581
2,500,000 Maryland Community Development Administration Dept. of Housing &
Community Development (Residential Rev.), 57/8% due 9/1/2025* .............. Aa2/NR 2,603,775
2,500,000 Maryland Community Development Administration Dept. of Housing &
Community Development (Multi-Family Housing), 6.70% due 5/15/2027 .......... Aa/NR 2,660,375
2,710,000 Maryland Health & Higher Educational Facilities Authority Rev. (Good Samaritan
Hospital), 53/4% due 7/1/2019 .............................................. A1/NR 2,933,738
2,000,000 Maryland Health & Higher Educational Facilities Authority Rev.
(Suburban Hospital), 51/8% due 7/1/2021 .................................... A1/A+ 1,939,180
2,750,000 Maryland Health & Higher Educational Facilities Authority Rev.
(Anne Arundel Medical Center), 5% due 7/1/2023 ............................. Aaa/AAA 2,711,775
2,500,000 Maryland Health & Higher Educational Facilities Authority Rev. (Francis Scott Key
Medical Center), 5% due 7/1/2023 ........................................... Aaa/AAA 2,465,250
2,000,000 Maryland Health &Higher Educational Facilities Authority Rev.
(Mercy Medical Center), 53/4% due 7/1/2026 ................................. Aaa/AAA 2,135,800
1,500,000 Maryland Health &Higher Educational Facilities Authority Rev. (Anne Arundel
Medical Center), 51/8% due 7/1/2028 ........................................ Aaa/AAA 1,506,885
1,000,000 Maryland Health & Higher Educational Facilities Authority Rev. (Charity
Obligated Group), 5% due 11/1/2029 ......................................... Aa2/AA+ 973,980
1,000,000 Maryland National Capital Park & Planning Commission GOs
(Prince George's County), 6.90% due 7/1/2010 ............................... Aa2/AA 1,062,990
2,000,000 Maryland Transportation Authority Rev. (Baltimore/Washington International
Airport Project), 61/4% due 7/1/2014* ...................................... Aaa/AAA 2,196,500
2,000,000 Maryland Transportation Authority Rev. Transportation Facilities Projects,
53/4% due 7/1/2015 ......................................................... A1/A+ 2,084,480
1,000,000 Maryland Water Quality Financing Administration Revolving Loan Fund Rev.,
6.70% due 9/1/2013 ......................................................... Aaa/AAA 1,090,740
1,000,000 Maryland Water Quality Financing Administration Revolving Loan Fund Rev.,
7.10% due 9/1/2013 ......................................................... Aaa/AAA 1,099,730
</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>
ORTFOLIO OF INVESTMENTS
MARCH 31, 1999
MARYLAND SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$ 440,000 Montgomery County, MD Housing Opportunities Commission (Single Family
Mortgage Rev.), 73/8% due 7/1/2017 ......................................... Aa2/NR $ 450,745
1,500,000 Montgomery County, MD Housing Opportunities Commission Rev.,
6.20% due 7/1/2026* ........................................................ Aa2/NR 1,589,685
2,000,000 Northeast Maryland Waste Disposal Authority Solid Waste Rev.
(Montgomery County Resource Recovery Project), 6.30% due 7/1/2016* ......... A2/NR 2,138,640
1,000,000 Puerto Rico Highway &Transportation Authority Rev., 51/2% due 7/1/2036 ........ Baa1/A 1,059,640
630,000 Puerto Rico Housing Finance Corporation (Single Family Mortgage Rev.
Portfolio 1-C), 6.85% due 10/15/2023 ....................................... Aaa/AAA 668,468
2,000,000 Washington Suburban Sanitary District, MD, 61/2% due 1/1/2016 ................. Aa1/AA 2,164,700
-------------
TOTAL MUNICIPAL BONDS (Cost $51,511,611)-- 97.9% ............................................................ 55,362,856
VARIABLE RATE DEMAND NOTES (Cost $500,000)-- 0.9% ........................................................... 500,000
OTHER ASSETS LESS LIABILITIES-- 1.2% ........................................................................ 679,297
-------------
NET ASSETS-- 100.0% ......................................................................................... $56,542,153
=============
MASSACHUSETTS SERIES
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., 51/4% due 11/1/2019 ......... A1/A+ $ 5,192,050
4,000,000 Massachusetts Bay Transportation Authority General Transportation System Rev.,
55/8% due 3/1/2026 ......................................................... Aa3/AA- 4,381,560
975,000 Massachusetts Education Loan Authority Education Loan Rev., 8% due 6/1/2002 ... NR/AAA 982,624
3,000,000 Massachusetts Health & Educational Facilities Authority Rev. (Daughters of
Charity National Health Systems-- Carney Hospital), 6% due 7/1/2009 ........ Aa2/AA+ 3,291,120
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+ 2,703,775
5,000,000 Massachusetts Health & Educational Facilities Authority Rev. (Newton-Wellesley
Hospital), 6% due 7/1/2018 ................................................. Aaa/AAA 5,403,050
3,500,000 Massachusetts Health &Educational Facilities Authority Rev. (Williams College),
53/4% due 7/1/2019 ......................................................... Aa1/AA+ 3,695,265
2,500,000 Massachusetts Health & Educational Facilities Authority Rev. (Suffolk University),
81/8% due 7/1/2020 ......................................................... NR/NR 2,678,750
5,100,000 Massachusetts Health & Educational Facilities Authority Rev. (Smith College),
53/4% due 7/1/2024 ......................................................... Aa2/AA- 5,374,125
5,000,000 Massachusetts Health & Educational Facilities Authority Rev. (Partners Healthcare
System), 53/8% due 7/1/2024 ................................................ Aaa/AAA 5,068,400
</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>
ORTFOLIO OF INVESTMENTS
MARCH 31, 1999
MASSACHUSETTS SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$ 7,500,000 Massachusetts Health & Educational Facilities Authority Rev. (Harvard University),
55/8% due 11/1/2028 ........................................................ Aaa/AAA $ 7,947,000
5,000,000 Massachusetts Health & Educational Facilities Authority Rev. (Catholic Health
East Health System), 5% due 11/15/2028 ..................................... Aaa/AAA 4,812,900
5,250,000 Massachusetts Housing Finance Agency Rev. (Single Family Housing),
51/2% due 12/1/2030* ....................................................... Aaa/AAA 5,327,070
2,000,000 Massachusetts Industrial Finance Agency Electric Utility Rev. (Nantucket Electric
Company Project), 57/8% due 7/1/2017* ...................................... Aaa/AAA 2,145,000
3,500,000 Massachusetts Industrial Finance Agency Rev. (Phillips Academy),
53/8% due 9/1/2023 ......................................................... Aa1/AA+ 3,616,060
3,000,000 Massachusetts Industrial Finance Agency Rev. (College of the Holy Cross),
55/8% due 3/1/2026 ......................................................... Aaa/AAA 3,151,050
3,000,000 Massachusetts Industrial Finance Agency Rev. (Suffolk University),
51/4% due 7/1/2027 ......................................................... Aaa/AAA 3,035,340
3,000,000 Massachusetts Port Authority Special Facilities Rev. (BOS FUEL Project),
53/4% due 7/1/2039* ........................................................ Aaa/AAA 3,161,250
5,000,000 Massachusetts State Consolidated Loan GOs, 51/8% due 11/1/2013 ................ Aaa/AAA 5,144,900
2,400,000 Massachusetts State Port Authority Rev., 5% due 7/1/2023 ...................... Aa3/AA- 2,347,032
2,000,000 Massachusetts State Port Authority Rev., 5% due 7/1/2028* ..................... Aa3/AA- 1,916,880
5,000,000 Massachusetts Water Pollution Abatement Trust Pool Loan Program,
55/8% due 2/1/2016 ......................................................... Aaa/AAA 5,304,200
5,000,000 Massachusetts Water Resources Authority General Rev., 5.60% due 11/1/2026 ..... Aaa/AAA 5,521,150
4,825,000 Plymouth County, MA Certificates of Participation (Plymouth County
Correctional Facility Project), 5% due 4/1/2022 ............................ Aaa/AAA 4,709,055
730,000 Puerto Rico Electric Power Authority Power Rev., 71/8% due 7/1/2014 ........... Baa1/BBB+ 747,907
4,000,000 Puerto Rico Highway & Transportation Authority Rev., 51/2% due 7/1/2036 ....... Baa1/A 4,238,560
2,750,000 Puerto Rico Port Authority Rev., 6% due 7/1/2021* ............................. Aaa/AAA 2,858,598
--------------
TOTAL MUNICIPAL BONDS (Cost $97,849,834)-- 99.0% 104,754,671
VARIABLE RATE DEMAND NOTES (Cost $200,000)-- 0.2% 200,000
OTHER ASSETS LESS LIABILITIES-- 0.8% 819,552
--------------
NET ASSETS-- 100.0% $105,774,223
==============
</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>
ORTFOLIO OF INVESTMENTS
MARCH 31, 1999
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 $ 5,455,000
5,000,000 Detroit, MI GOs, 51/2% due 4/1/2016 ........................................... Aaa/AAA 5,201,450
6,000,000 Detroit, MI Water Supply System Rev., 61/4% due 7/1/2012 ...................... Aaa/AAA 6,551,220
3,000,000 Grand Haven, MI Electric System Rev., 51/4% due 7/1/2013 ...................... Aaa/AAA 3,094,800
5,000,000 Grand Rapids, MI Water Supply System Rev., 53/4% due 1/1/2018 ................. Aaa/AAA 5,147,000
325,000 Grand Traverse County, MI Hospital Finance Authority (Munson Healthcare
Obligated Group), 61/4% due 7/1/2012 ....................................... Aaa/AAA 351,214
485,000 Grand Traverse County, MI Hospital Finance Authority (Munson Healthcare
Obligated Group), 61/4% due 7/1/2022 ....................................... Aaa/AAA 524,120
2,000,000 Grand Traverse County, MI Hospital Finance Authority (Munson Healthcare
Obligated Group), 5% due 7/1/2028 .......................................... Aaa/NR 1,922,620
2,500,000 Kalamazoo, MI Hospital Finance Authority Rev. (Bronson Methodist
Hospital), 51/2% due 5/15/2028 ............................................. Aaa/NR 2,596,850
5,000,000 Kent County, MI Airport Rev., 6.10% due 1/1/2025* ............................. Aa/AAA 5,611,100
1,850,000 Kent County, MI Airport Rev., 5% due 1/1/2028* ................................ Aaa/AAA 1,776,315
2,775,000 Kentwood, MI Public Schools Building & Site GOs, 6.40% due 5/1/2015 ........... Aa2/A+ 3,036,627
3,000,000 Lansing, MI Building Authority Rev., 5.60% due 6/1/2019 ....................... Aa3/AA+ 3,144,060
3,250,000 Marquette, MI Hospital Finance Authority Rev. (Marquette General Hospital),
6.10% due 4/1/2019 ......................................................... Aaa/AAA 3,555,500
3,000,000 Michigan Public Power Agency Rev. (Belle River Project), 51/4% due 1/1/2018 ... A1/AA- 3,014,520
3,000,000 Michigan State Building Authority Rev., 61/4% due 10/1/2020 ................... Aa2/AA 3,197,850
6,000,000 Michigan State GOs (Environmental Protection Program), 5.40% due 11/1/2019 .... Aa1/AA+ 6,218,580
5,000,000 Michigan State Hospital Finance Authority Rev. (Oakwood Obligated Group),
51/8% due 8/15/2025 ........................................................ Aaa/AAA 4,918,000
4,500,000 Michigan State Hospital Finance Authority Rev. (St. John Hospital),
51/4% due 5/15/2026 ........................................................ Aaa/AAA 4,473,945
5,250,000 Michigan State Hospital Finance Authority Rev. (Mercy Health Services
Obligated Group), 53/4% due 8/15/2026 ..................................... Aa3/AA- 5,554,763
5,000,000 Michigan State Hospital Finance Authority Rev. (Charity Obligated Group),
51/8% due 11/1/2029 ........................................................ Aa2/AA+ 4,795,050
5,000,000 Michigan State Hospital Finance Authority Rev. (Sparrow Obligated Group),
6% due 11/15/2036 .......................................................... Aaa/AAA 5,405,200
2,045,000 Michigan State Housing Development Authority Rev. (Single Family Mortgage),
6.80% due 12/1/2016 ........................................................ NR/AA+ 2,162,424
3,925,000 Michigan State Housing Development Authority Rev. (Rental Housing),
6.65% due 4/1/2023 ......................................................... NR/AA- 4,196,649
4,000,000 Michigan State Housing Development Authority Rev. (Single Family Mortgage),
6.05% due 12/1/2027 ........................................................ NR/AA+ 4,206,360
3,000,000 Michigan State Strategic Fund Pollution Control Rev. (Detroit Edison Company),
61/2% due 2/15/2016 ........................................................ Aaa/AAA 3,237,930
6,000,000 Michigan State Strategic Fund Pollution Control Rev. (General Motors Corp.),
6.20% due 9/1/2020 ......................................................... A2/A 6,457,560
</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>
ORTFOLIO OF INVESTMENTS
MARCH 31, 1999
MICHIGAN SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$2,500,000 Michigan State Trunk Line Rev., 5.80% due 11/15/2024 .......................... Aaa/AAA $ 2,775,175
5,000,000 Michigan State Trunk Line Rev., 5% due 11/1/2026 .............................. Aaa/AAA 4,882,750
2,000,000 Midland, MI Water Supply System Rev., 7.20% due 4/1/2010 ...................... A/A 2,107,880
6,300,000 Oxford, MI Area Community Schools GOs, 51/2% due 5/1/2021 ..................... Aaa/AAA 6,556,851
5,000,000 Royal Oak, MI Hospital Finance Authority Rev. (William Beaumont Hospital),
51/4% due 1/1/2020 ......................................................... Aa3/AA 4,937,350
3,000,000 UNIVERSITY OF MICHIGAN HOSPITAL REV., 63/8% DUE 12/1/2024 ...................... AA2/AA 3,144,390
5,000,000 Western Michigan State University Rev., 51/8% due 11/15/2022 .................. Aaa/AAA 4,979,350
3,000,000 Wyandotte, MI Electric Rev., 61/4% due 10/1/2017 .............................. Aaa/AAA 3,265,500
--------------
TOTAL MUNICIPAL BONDS (Cost $130,018,316)-- 98.1% ........................................................... 138,455,953
VARIABLE RATE DEMAND NOTES (Cost $600,000)-- 0.4% ........................................................... 600,000
OTHER ASSETS LESS LIABILITIES-- 1.5% ........................................................................ 2,143,674
--------------
NET ASSETS-- 100.0% ......................................................................................... $141,199,627
==============
</TABLE>
<TABLE>
<CAPTION>
MINNESOTA SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$5,000,000 Becker, MN Pollution Control Rev. (Northern States Power Company),
6.80% due 4/1/2007 ......................................................... A1/A+ $ 5,110,450
1,500,000 Buffalo, MN Independent School District GOs, 6.15% due 2/1/2022 ............... Aaa/AAA 1,625,670
2,250,000 Burnsville - Eagan - Savage, MN Independent School District GOs,
51/8% due 2/1/2016 ......................................................... Aa1/NR 2,285,955
2,350,000 Burnsville - Eagan - Savage, MN Independent School District GOs,
51/8% due 2/1/2017 ......................................................... Aa1/NR 2,380,996
1,500,000 Cloquet, MN Pollution Control Rev. (Potlatch Corporation Projects),
5.90% due 10/1/2026 ........................................................ NR/BBB+ 1,567,635
5,000,000 Edina, MN Housing Development Rev. (Edina Park Plaza Project),
7.70% due 12/1/2028 ........................................................ Aa/NR 5,158,550
3,545,000 Fridley, MN Independent School District GOs, 5.35% due 2/1/2021 ............... Aaa/AAA 3,608,633
1,500,000 Minneapolis, MNGOs, 6% due 3/1/2016 ........................................... Aaa/AAA 1,601,775
4,725,000 Minneapolis, MN Rev. (University Gateway Project), 51/4% due 12/1/2024 ........ Aa2/AA 4,783,732
4,300,000 Minneapolis, MN Special School District GOs, 5% due 2/1/2014 .................. Aa1/AA+ 4,351,815
1,400,000 Minneapolis - St. Paul Metropolitan Area (Metropolitan Council of the
Twin Cities), MN, 51/2% due 12/1/2012 ...................................... Aaa/AAA 1,490,062
5,000,000 Minneapolis - St. Paul, MN Housing & Redevelopment Authority Health Care
Rev. (Children's Health Care), 51/2% due 8/15/2025 ......................... Aaa/AAA 5,162,100
4,000,000 Minneapolis - St. Paul, MN Metropolitan Airport Commission Rev.,
5% due 1/1/2030 ............................................................ Aaa/AAA 3,931,840
2,250,000 Minnesota Agricultural & Economic Development Board Rev. (Evangelical
Lutheran Good Samaritan Society Project), 5.15% due 12/1/2022 .............. Aaa/AAA 2,231,595
</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, 1999
MINNESOTA SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$1,250,000 MINNESOTA AGRICULTURAL & ECONOMIC DEVELOPMENT BOARD REV. (EVANGELICAL
LUTHERAN GOOD SAMARITAN SOCIETY PROJECT), 5% DUE 12/1/2023 ................. AAA/AAA $ 1,220,475
2,775,000 Minnesota Higher Education Facilities Authority Rev. (University of St. Thomas),
5.40% due 4/1/2022 ......................................................... A2/NR 2,852,977
1,000,000 Minnesota Higher Education Facilities Authority Rev. (St. John's University),
5.40% due 10/1/2022 ........................................................ A3/NR 1,022,560
1,775,000 Minnesota Higher Education Facilities Authority Rev. (University of St. Thomas),
5.40% due 4/1/2023 ......................................................... A2/NR 1,809,630
2,500,000 Minnesota Higher Education Facilities Authority Rev. (St. Olaf College),
51/4% due 4/1/2029 ......................................................... A3/NR 2,481,325
790,000 Minnesota Housing Finance Agency (Housing Development), 61/4% due 2/1/2020 .... Aa2/AA 802,205
800,000 Minnesota Housing Finance Agency (Single Family Mortgage),
5.65% due 7/1/2022* ........................................................ Aa2/AA+ 810,208
5,000,000 Minnesota Housing Finance Agency (Single Family Mortgage),
6.85% due 1/1/2024* ........................................................ Aa2/AA+ 5,280,150
1,500,000 Minnesota Public Facilities Authority Water Pollution Control Rev.,
7.10% due 3/1/2012 ......................................................... Aaa/AAA 1,582,530
4,000,000 Minnesota Public Facilities Authority Water Pollution Control Rev.,
61/4% due 3/1/2015 ......................................................... Aaa/AAA 4,472,080
5,000,000 Minnesota State GOs, 5.70% due 5/1/2016 ....................................... Aaa/AAA 5,404,350
5,000,000 North Saint Paul - Maplewood, MN Independent School District GOs,
51/8% due 2/1/2025 ......................................................... Aa1/AA+ 4,974,800
2,500,000 Northfield, MNIndependent School District GOs, 51/4% due 2/1/2017 ............. Aa1/NR 2,546,300
2,000,000 Ramsey & Washington Counties, MN Resource Recovery Rev. (Northern States
Power Company Project), 63/4% due 12/1/2006 ................................ A1/AA 2,058,280
4,000,000 Rochester, MN Health Care Facilities Rev. (Mayo Foundation/Mayo
Medical Center), 7.45% due 11/15/2006 ...................................... NR/AA+ 4,254,360
4,500,000 Rochester, MN Health Care Facilities Rev. (Mayo Foundation/Mayo
Medical Center), 61/4% due 11/15/2014 ...................................... NR/AA+ 4,893,660
2,575,000 Rochester, MN Independent School District GOs, 55/8% due 2/1/2016 ............. Aaa/AA+ 2,808,398
2,715,000 Rochester, MN Independent School District GOs, 55/8% due 2/1/2017 ............. Aaa/AA+ 2,961,088
4,500,000 Saint Paul, MN Housing and Redevelopment Health Care Rev.,
(Regions Hospital Project), 5.30% due 5/15/2028 ............................ NR/BBB+ 4,282,110
45,000 Saint Paul Port Authority, MN Industrial Development Rev. Series E,
91/8% due 10/1/2000 ........................................................ NR/CCC 45,381
5,000 Saint Paul Port Authority, MN Industrial Development Rev. Series H,
91/8% due 12/1/2000 ........................................................ NR/CCC 5,041
55,000 Saint Paul Port Authority, MN Industrial Development Rev. Series I,
91/8% due 12/1/2000 ........................................................ NR/CCC 55,449
50,000 Saint Paul Port Authority, MN Industrial Development Rev. Series E,
91/8% due 10/1/2001 ........................................................ NR/CCC 50,635
10,000 Saint Paul Port Authority, MN Industrial Development Rev. Series H,
91/8% due 12/1/2001 ........................................................ NR/CCC 10,145
</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, 1999
MINNESOTA SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$ 55,000 Saint Paul Port Authority, MN Industrial Development Rev. Series I,
91/8% due 12/1/2001 ........................................................ NR/CCC $ 55,799
5,000 Saint Paul Port Authority, MN Industrial Development Rev. Series L,
93/4% due 12/1/2001 ........................................................ NR/CCC 5,084
50,000 Saint Paul Port Authority, MN Industrial Development Rev. Series E,
91/8% due 10/1/2002 ........................................................ NR/CCC 50,727
10,000 Saint Paul Port Authority, MN Industrial Development Rev. Series H,
91/8% due 12/1/2002 ........................................................ NR/CCC 10,141
60,000 Saint Paul Port Authority, MN Industrial Development Rev. Series I,
91/8% due 12/1/2002 ........................................................ NR/CCC 60,846
10,000 Saint Paul Port Authority, MN Industrial Development Rev. Series L,
93/4% due 12/1/2002 ........................................................ NR/CCC 10,167
1,500,000 Southern Minnesota Municipal Power Agency-- Power Supply System Rev.,
53/4% due 1/1/2018 ......................................................... A2/A+ 1,569,975
1,500,000 Southern Minnesota Municipal Power Agency-- Power Supply System Rev.,
43/4% due 1/1/2016 ......................................................... A2/A+ 1,436,340
3,090,000 Western Minnesota Municipal Power Agency-- Power Supply Rev.,
51/2% due 1/1/2015 ......................................................... A1/A 3,091,761
9,010,000 Western Minnesota Municipal Power Agency-- Power Supply Rev.,
63/8% due 1/1/2016 ......................................................... Aaa/AAA 10,176,164
------------
TOTAL MUNICIPAL BONDS (Cost $112,378,203)-- 98.0% ........................................................ 118,441,949
VARIABLE RATE DEMAND NOTES (Cost $800,000)-- 0.7% ........................................................ 800,000
OTHER ASSETS LESS LIABILITIES-- 1.3% ..................................................................... 1,613,956
------------
NET ASSETS-- 100.0% ...................................................................................... $120,855,905
============
</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., 61/8% due 10/1/2012 .. A1/AA $ 2,190,260
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 2,611,050
1,500,000 Hannibal, MO Industrial Development Authority Health Facilities Rev.
(Hannibal Regional Hospital), 53/4% due 3/1/2022 ........................... Aaa/AAA 1,581,165
1,000,000 Joplin, MO Industrial Development Authority Rev. (Catholic Health Initiatives),
5 1/8% due 12/1/2015 ....................................................... Aa2/AA 1,001,150
1,500,000 Joplin, MO Industrial Development Authority Rev. (Catholic Health Initiatives),
5% due 12/1/2028 ........................................................... Aa2/AA 1,432,980
1,000,000 Missouri Development Finance Board Solid Waste Disposal Rev. (The Procter &
Gamble Company Paper Products Project), 5.20% due 3/15/2029* ............... Aa2/AA 995,460
145,000 Missouri School Boards Pooled Financing Program Certificates of Participation,
7 3/8% due 3/1/2006 ........................................................ Aaa/AAA 147,436
</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, 1999
MISSOURI SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$ 525,000 Missouri School Boards Pooled Financing Program Certificates of Participation,
7% due 3/1/2006 ............................................................ Aaa/AAA $ 533,017
1,000,000 Missouri State Environmental Improvement & Energy Resources Authority Rev.
(State Revolving Fund Program), 6.55% due 7/1/2014 ......................... Aa1/NR 1,082,040
2,500,000 Missouri State Environmental Improvement & Energy Resources Authority Rev.
(Union Electric Company Project), 5.45% due 10/1/2028* ..................... A1/AA- 2,567,325
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 2,570,200
2,000,000 Missouri State GOs, 55/8% due 4/1/2017 ........................................ Aaa/AAA 2,122,180
2,500,000 Missouri State Health & Educational Facilities Authority Rev. (Lester E. Cox
Medical Centers Project), 51/4% due 6/1/2015 ............................... Aaa/AAA 2,599,600
1,500,000 Missouri State Health & Educational Facilities Authority Rev. (Sisters of Mercy
Health System, St. Louis, Inc.), 61/4% due 6/1/2015 ........................ Aa1/AA+ 1,607,220
1,000,000 Missouri State Health & Educational Facilities Authority Rev. (Sisters of Mercy
Health System, St. Louis, Inc.), 71/4% due 6/1/2019 ........................ Aaa/AA+ 1,026,580
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+ 977,570
2,500,000 Missouri State Health & Educational Facilities Authority Rev.
(Barnes-Jewish, Inc./Christian Health Services), 51/4% due 5/15/2021 ....... Aa2/AA 2,499,850
2,500,000 Missouri State Health & Educational Facilities Authority Rev. (SSM Health Care),
5% due 6/1/2022 ............................................................ Aaa/AAA 2,449,425
2,500,000 Missouri State Health Educational Facilities Authority Rev.
(The Washington University), 5% due 11/15/2037 ............................. Aa1/AA+ 2,408,875
820,000 Missouri State Housing Development Commission Housing Development Bonds
(Federally Insured Mortgage Loans), 6% due 10/15/2019 ...................... Aa2/AA+ 831,964
2,375,000 Missouri State Housing Development Commission Single Family Mortgage Rev.
(Homeownership Loan Program), 5.90% due 9/1/2028* .......................... NR/AAA 2,471,663
1,000,000 Puerto Rico Highway & Transportation Authority Rev., 51/2% due 7/1/2026 ....... Baa1/A 1,038,840
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+ 1,782,000
1,500,000 St. Louis, MO Municipal Finance Corporation City Justice Center Leasehold
Improvement Rev., 5.95% due 2/15/2016 ...................................... Aaa/AAA 1,628,340
2,400,000 Southeast Missouri Correctional Facility Lease Rev. (Missouri State Project),
53/4% due 10/15/2016 ....................................................... Aa/NR 2,509,056
2,500,000 Springfield, MO Waterworks Rev., 5.60% due 5/1/2023 ........................... Aa2/A+ 2,707,000
2,750,000 University of Missouri Systems Facilities Rev., 51/2% due 11/1/2023 ........... Aa2/AA+ 2,837,752
-----------
TOTAL MUNICIPAL BONDS (Cost $45,571,343)-- 97.3% ......................................................... 48,209,998
VARIABLE RATE DEMAND NOTES (Cost $500,000)-- 1.0% ........................................................ 500,000
OTHER ASSETS LESS LIABILITIES-- 1.7% ..................................................................... 860,163
-----------
NET ASSETS-- 100.0% ...................................................................................... $49,570,161
===========
</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, 1999
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 $ 2,439,005
2,500,000 Long Island Power Authority, NY Electric Systems General Rev.,
51/2% due 12/1/2029 ........................................................ Baa1/A- 2,568,550
4,000,000 Metropolitan Transportation Authority, NY (Dedicated Tax Fund),
5% due 4/1/2023 ............................................................ Aaa/AAA 3,934,120
4,000,000 New York City Municipal Water Finance Authority, NY Water & Sewer
System Rev., 61/4% due 6/15/2020 ........................................... Aaa/AAA 4,564,080
4,000,000 New York City Municipal Water Finance Authority, NY Water & Sewer
System Rev., 51/8% due 6/15/2030 ........................................... Aaa/AAA 3,984,240
1,340,000 New York City, NY GOs, 71/4% due 8/15/2024 .................................... Aaa/A- 1,451,609
5,000 New York City, NY GOs, 71/4% due 8/15/2024 .................................... A3/A- 5,368
1,380,000 New York City, NY GOs, 6% due 8/1/2026 ........................................ A3/A- 1,497,659
2,400,000 New York City, NY Industrial Development Agency Civic Facility Rev.
(The Nightingale - Bamford School Project), 5.85% due 1/15/2020 ............ A3/A 2,532,264
2,500,000 New York City, NY Transitional Finance Authority (Future Tax Secured Bonds),
5% due 5/1/2026 ............................................................ Aa3/AA 2,431,225
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 4,234,640
4,000,000 New York State Dormitory Authority Rev. (Fordham University),
53/4% due 7/1/2015 ......................................................... Aaa/AAA 4,250,160
4,000,000 New York State Dormitory Authority Rev. (Rochester Institute of Technology),
51/2% due 7/1/2018 ......................................................... Aaa/AAA 4,176,680
3,500,000 New York State Dormitory Authority Rev. (Mental Health Services Facilities
Improvement), 53/4% due 8/15/2022 .......................................... A3/A- 3,719,170
3,000,000 New York State Dormitory Authority Rev. (Skidmore College), 53/8% due 7/1/2023 Aaa/AAA 3,062,730
1,500,000 New York State Dormitory Authority Rev. (Vassar Brothers Hospital),
53/8% due 7/1/2025 ......................................................... Aaa/AAA 1,547,475
2,000,000 New York State Dormitory Authority Rev. (Hospital for Special Surgery),
5% due 2/1/2028 ............................................................ Aaa/AAA 1,958,000
2,000,000 New York State Dormitory Authority Rev. (Rockefeller University),
5% due 7/1/2028 ............................................................ Aaa/AAA 1,960,680
4,000,000 New York State Energy Research & Development Authority Gas Facilities Rev.
(Brooklyn Union Gas), 51/2% due 1/1/2021 ................................... Aaa/AAA 4,171,680
3,000,000 New York State Environmental Facilities Corporation Pollution Control Rev.
(State Water-- Revolving Fund), 6.90% due 11/15/2015 ....................... Aaa/AAA 3,445,920
3,000,000 New York State Housing Finance Agency Rev. (Phillips Village Project),
73/4% due 8/15/2017* ....................................................... A2/NR 3,325,470
3,000,000 New York State Local Government Assistance Corp., 6% due 4/1/2024 ............. A3/A+ 3,252,180
2,000,000 New York State Mortgage Agency Rev. (Homeowner Mortgage),
71/2% due 4/1/2016 ......................................................... Aa2/NR 2,058,260
1,000,000 New York State Mortgage Agency Rev. (Homeowner Mortgage),
51/2% due 10/1/2028* ....................................................... Aa2/NR 1,016,370
</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, 1999
NEW YORK SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$3,000,000 New York State Thruway Authority General Rev., 6% due 1/1/2025 ................ Aaa/AAA $ 3,351,390
2,000,000 New York State Thruway Authority (Highway and Bridge Trust Fund),
5% due 4/1/2018 ............................................................ A3/A- 1,949,720
4,000,000 New York State Thruway Authority Service Contract Rev., 61/4% due 4/1/2014 .... Baa1/BBB+ 4,513,760
4,000,000 Onondaga County, NY Industrial Development Agency Sewer Facilities Rev.
(Bristol-Myers Squibb Co. Project), 53/4% due 3/1/2024* .................... Aaa/AAA 4,352,320
2,250,000 Port Authority of New York and New Jersey Consolidated Rev., 61/8% due 6/1/2094 A1/AA- 2,581,695
-----------
TOTAL MUNICIPAL BONDS (Cost $78,914,488)-- 95.5% ......................................................... 84,336,420
VARIABLE RATE DEMAND NOTES (Cost $1,400,000)-- 1.6% ...................................................... 1,400,000
OTHER ASSETS LESS LIABILITIES-- 2.9% ..................................................................... 2,531,290
-----------
NET ASSETS-- 100.0% ...................................................................................... $88,267,710
===========
</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.
OHIO SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$2,250,000 Beavercreek Local School District, OH GOs (School Improvement Bonds),
5.70% due 12/1/2020 ........................................................ Aaa/AAA $ 2,385,810
3,450,000 Big Walnut Local School District, OH School Building Construction &
Improvement GOs, 7.20% due 6/1/2007 ........................................ Aaa/AAA 3,772,851
4,000,000 Butler County, OH Transportation Improvement District Highway
Improvement Rev., 51/8% due 4/1/2017 ....................................... Aaa/AAA 4,056,120
4,000,000 Cleveland, OH Airport System Rev., 51/8% due 1/1/2027* ........................ Aaa/AAA 3,927,040
2,395,000 Cleveland,OH Airport System Rev., 51/8% due 1/1/2027 .......................... Aaa/AAA 2,393,036
5,000,000 Cleveland, OH Public Power System Rev., 5% due 11/15/2024 ..................... Aaa/AAA 4,935,700
4,915,000 Cleveland, OH Waterworks Improvement First Mortgage Rev., 53/4% due 1/1/2021 .. Aaa/AAA 5,469,559
85,000 Cleveland, OH Waterworks Improvement First Mortgage Rev., 53/4% due 1/1/2021 .. Aaa/AAA 90,645
4,500,000 Columbus, OH Municipal Airport Authority Rev. (Port Columbus International
Airport Project), 6% due 1/1/2020* ......................................... Aaa/AAA 4,824,225
1,000,000 Columbus, OH Municipal Airport Authority Rev. (Port Columbus International
Airport Project), 5% due 1/1/2028 .......................................... Aaa/AAA 984,920
3,000,000 Dayton, OH Water System Mortgage Rev., 63/4% due 12/1/2010 .................... Aaa/AAA 3,004,200
7,000,000 Franklin County, OH GOs, 53/8% due 12/1/2020 .................................. Aaa/AAA 7,254,450
7,500,000 Franklin County, OH Hospital Rev. (Riverside United Methodist Hospital),
53/4% due 5/15/2020 ........................................................ Aa3/NR 7,769,025
2,500,000 Hamilton County, OH Sewer System Rev., 51/2% due 12/1/2017 .................... Aaa/AAA 2,591,450
5,000,000 Hamilton, OH Electric System Mortgage Rev., 6% due 10/15/2023 ................. Aaa/AAA 5,405,150
4,000,000 Hudson Local School District, OH GOs, 7.10% due 12/15/2013 .................... A1/NR 4,323,640
1,095,000 Lake County, OH Hospital Improvement Rev. (Lake Hospital System Inc.),
8% due 1/1/2013 ............................................................ Aaa/AAA 1,110,111
</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, 1999
OHIO SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$6,425,000 Mahoning County, OH Hospital Rev. (Forum Health Obligated Group),
5% due 11/15/2025 .......................................................... Aaa/AAA $ 6,276,711
2,000,000 Montgomery County, OH Catholic Health Initiatives Rev., 51/8% due 12/1/2017 ... Aa2/AA 1,986,800
2,000,000 Ohio Air Quality Development Authority Rev. (Cincinnati Gas & Electric
Company Project), 5.45% due 1/1/2024 ....................................... Aaa/AAA 2,055,460
6,500,000 Ohio Air Quality Development Authority Rev. (JMG Project), 63/8% due 1/1/2029* Aaa/AAA 7,216,690
4,415,000 Ohio Housing Finance Agency Residential Mortgage Rev. (Mortgage-Backed
Securities Program), 6.10% due 9/1/2028* ................................... NR/AAA 4,680,960
3,000,000 Ohio State Higher Educational Facilities Commission Rev. (Oberlin College
Project), 53/8% due 10/1/2015 .............................................. NR/AA 3,083,550
4,000,000 Ohio State Higher Educational Facilities Commission Rev. (University of
Dayton Project), 5.40% due 12/1/2022 ....................................... Aaa/AAA 4,118,080
2,000,000 Ohio State Liquor Profits Rev., 6.85% due 3/1/2000 ............................ Aaa/AAA 2,066,000
4,000,000 Ohio State Public Facilities Commission Rev. (Higher Education Capital Facilities),
6.30% due 5/1/2006 ......................................................... Aaa/AAA 4,293,240
2,190,000 Ohio State Water Development Authority Rev. (Safe Water), 93/8% due 12/1/2010 . Aaa/AAA 2,757,385
7,500,000 Ohio State Water Development Authority Rev. (Fresh Water), 51/8% due 12/1/2023 Aaa/AAA 7,515,300
5,000,000 Ohio State Water Development Authority Rev. (Community Assistance),
53/8% due 12/1/2024 ........................................................ Aaa/AAA 5,149,000
5,000,000 Ohio State Water Development Authority Rev. (Dayton Power & Light Co.
Project), 6.40% due 8/15/2027 .............................................. Aa3/AA- 5,420,900
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/A+ 2,717,125
3,000,000 Ohio Turnpike Commission, OH Turnpike Rev., 5.70% due 2/15/2017 ............... Aaa/AAA 3,333,990
2,955,000 Pickerington Local School District, OH School Building Construction GOs,
8% due 12/1/2005 ........................................................... Aaa/aaa 3,452,001
4,000,000 Puerto Rico Highway &Transportation Authority Rev., 51/2% due 7/1/2036 ........ Baa1/A 4,238,560
775,000 Toledo, OH Sewer System Rev., 73/4% due 11/15/2017 ............................ Aaa/AAA 793,368
560,000 Toledo, OH Waterworks Rev., 73/4% due 11/15/2017 .............................. Aaa/AAA 573,272
2,500,000 Twinsburg City School District, OH School Improvement GOs,
5.90% due 12/1/2021 ........................................................ Aaa/AAA 2,698,875
3,000,000 University of Toledo, OH General Receipts Bonds, 7.10% due 6/1/2010 ........... Aaa/AAA 3,189,420
2,000,000 Worthington City School District, OH School Building Construction &
Improvement GOs, 83/4% due 12/1/2002 ....................................... Aaa/AAA 2,110,500
------------
TOTAL MUNICIPAL BONDS (Cost $135,108,793)-- 95.5% ........................................................ 144,025,119
VARIABLE RATE DEMAND NOTES (Cost $5,000,000)-- 3.3% ...................................................... 5,000,000
OTHER ASSETS LESS LIABILITIES-- 1.2% ..................................................................... 1,821,123
------------
NET ASSETS-- 100.0% ...................................................................................... $150,846,242
============
</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, 1999
OREGON SERIES
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$2,000,000 Benton County, OR Hospital Facilities Authority Rev. (Samaritan Health
Services Project), 51/8% due 10/1/2028 ..................................... NR/A $ 1,948,080
2,000,000 Chemeketa, OR Community College District GOs, 5.95% due 6/1/2016 .............. Aaa/AAA 2,230,260
1,000,000 Clackamas & Washington Counties, OR GOs (West Linn-Wilsonville
School District), 5% due 6/1/2017 .......................................... Aaa/AAA 1,001,930
1,500,000 Eugene, OR Trojan Nuclear Project Rev., 5.90% due 9/1/2009 .................... Aa1/AA- 1,541,250
1,250,000 Multnomah County, OR Education Facility Rev. (University of Portland),
5% due 4/1/2018 ............................................................ Aaa/AAA 1,250,975
1,750,000 Multnomah County School District, OR GOs, 51/2% due 6/1/2015 .................. A1/A+ 1,825,583
2,000,000 North Clackamas Parks & Recreation District -- Clackamas County, OR Rev.
(Recreational Facilities), 5.70% due 4/1/2013 .............................. NR/A- 2,113,640
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- 2,003,200
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 ...................................... Aa2/AA 799,560
2,500,000 Oregon Department of Administrative Services Certificates of Participation,
5.80% due 5/1/2024 ......................................................... Aaa/AAA 2,795,000
2,250,000 Oregon Department of Administrative Services Certificates of Participation,
5% due 5/1/2024 ............................................................ Aaa/AAA 2,234,002
1,000,000 Oregon Department of Transportation Regional Light Rail Extension Rev.,
6.20% due 6/1/2008 ......................................................... Aaa/AAA 1,112,050
2,000,000 Oregon Health, Housing, Educational &Cultural Facilities Authority Rev.
(Linfield College Project), 51/4% due 10/1/2023 ............................ Baa1/NR 1,983,660
2,500,000 Oregon Health, Housing, Educational &Cultural Facilities Authority Rev.
(Reed College Project), 53/8% due 7/1/2025 ................................. NR/A+ 2,559,250
1,250,000 Oregon Health Sciences University Rev., 51/4% due 7/1/2028 .................... Aaa/AAA 1,259,000
2,000,000 Oregon Housing & Community Services Department Housing & Finance Rev.
(Assisted or Insured Multi-Unit Program), 53/4% due 7/1/2012 ............... Aa2/A+ 2,075,140
880,000 Oregon Housing & Community Services Department Mortgage Rev.
(Single Family Mortgage Program), 5.65% due 7/1/2019* ...................... Aa2/NR 897,046
300,000 Oregon Housing & Community Services Department Mortgage Rev.
(Single Family Mortgage Program), 7% due 7/1/2022* ......................... Aa2/NR 302,283
500,000 Oregon Housing & Community Services Department Mortgage Rev.
(Single Family Mortgage Program), 5.30% due 7/1/2024* ...................... Aa2/NR 502,060
1,000,000 Oregon Housing & Community Services Department Mortgage Rev.
(Single Family Mortgage Program), 6% due 7/1/2027* ......................... Aa2/NR 1,048,330
</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.
28
<PAGE>
PORTFOLIOS OF INVESTMENTS
MARCH 31, 1999
OREGON SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$ 500,000 Oregon State GOs (Veterans' Welfare), 9% due 10/1/2006 ........................ Aa2/AA $ 655,305
1,375,000 Oregon State GOs (Veterans' Welfare), 57/8% due 10/1/2018 ..................... Aa2/AA 1,437,150
250,000 Oregon State GOs (Elderly & Disabled Housing), 7.20% due 8/1/2021 ............. Aa2/AA 264,807
1,000,000 Oregon State GOs (Elderly & Disabled Housing), 6.60% due 8/1/2022* ............ Aa2/AA 1,092,250
950,000 Port of Portland, OR International Airport Rev., 7.10% due 7/1/2021* .......... Aaa/AAA 1,163,227
15,000 Port of Portland, OR International Airport Rev., 7.10% due 7/1/2021* .......... Aaa/AAA 16,273
35,000 Port of Portland, OR International Airport Rev., 7.10% due 7/1/2021* .......... Aaa/AAA 37,923
500,000 Port of Portland, OR International Airport Rev., 53/4% due 7/1/2025* .......... Aaa/AAA 523,270
1,500,000 Port of Portland, OR International Airport Rev., 55/8% due 7/1/2026* .......... Aaa/AAA 1,561,860
2,000,000 Portland, OR GOs, 5.60% due 6/1/2014 .......................................... Aa2/NR 2,131,480
1,250,000 Portland, OR Hospital Facilities Authority Rev. (Legacy Health System),
65/8% due 5/1/2011 ......................................................... Aaa/AAA 1,339,750
2,500,000 Portland, OR Sewer System Rev., 5% due 6/1/2015 ............................... Aaa/AAA 2,521,525
1,000,000 Puerto Rico Highway & Transportation Authority Rev., 51/2% due 7/1/2026 ....... Baa1/A 1,038,840
630,000 Puerto Rico Housing Finance Corp. (Single Family Mortgage Rev.),
6.85% due 10/15/2023 ....................................................... Aaa/AAA 668,468
1,000,000 Puerto Rico Ports Authority Rev., 7% due 7/1/2014* ............................ Aaa/AAA 1,082,150
1,000,000 Puerto Rico Telephone Authority Rev., 51/2% due 1/1/2013 ...................... A/A+ 1,041,140
2,000,000 Salem, OR Hospital Facility Authority Rev. (Salem Hospital), 5% due 8/15/2018 . NR/AA- 1,968,200
2,600,000 Salem, OR Pedestrian Safety Improvements GOs, 53/4% due 5/1/2011 ............. Aaa/AAA 2,826,356
1,000,000 Tri-County Metropolitan Transportation District of Oregon GOs
(Light Rail Extension), 6% due 7/1/2012 .................................... Aa2/AA+ 1,077,990
1,110,000 Tualatin Development Commission, OR (Urban Renewal & Redevelopment),
73/8% due 1/1/2007 ......................................................... Baa1/NR 1,119,857
500,000 Virgin Islands Public Finance Authority Rev., 51/2% due 10/1/2022 ............. NR/BBB- 502,965
2,500,000 Washington and Multnomah Counties, OR (Beaverton School District),
5% due 8/1/2017 ............................................................ Aa2/AA- 2,501,675
1,500,000 Washington County, OR Unified Sewerage Agency Rev., 53/4% due 10/1/2011 ....... Aaa/AAA 1,670,175
-----------
TOTAL MUNICIPAL BONDS (Cost $56,194,635)-- 98.3% ......................................................... 59,724,935
VARIABLE RATE DEMAND NOTES (Cost $300,000)-- 0.5% ........................................................ 300,000
OTHER ASSETS LESS LIABILITIES-- 1.2% ..................................................................... 710,377
-----------
NET ASSETS-- 100.0% ...................................................................................... $60,735,312
===========
</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, 1999
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),
51/4% due 2/1/2012 ......................................................... Aaa/AAA $ 2,561,600
3,800,000 Berkeley County, SC Water & Sewer Rev., 5.55% due 6/1/2016 .................... Aaa/AAA 3,935,964
745,000 Charleston County, SC Public Facilities Corp. Certificates of Participation,
7.15% due 2/1/2004 ......................................................... A1/A 781,438
770,000 Charleston County, SC Public Facilities Corp. Certificates of Participation,
7.15% due 8/1/2004 ......................................................... A1/A 807,661
800,000 Charleston County, SC Public Facilities Corp. Certificates of Participation,
7.20% due 2/1/2005 ......................................................... A1/A 839,112
2,500,000 Charleston, SC Waterworks & Sewer System Rev., 6% due 1/1/2012 ................ A1/AA- 2,663,500
6,000,000 Darlington County, SC Industrial Development Rev. (Nucor Corporation Project),
53/4% due 8/1/2023* ........................................................ A1/AA- 6,201,780
3,500,000 Darlington County, SC Industrial Development Rev. (Sonoco Products
Company Project), 6% due 4/1/2026* ......................................... A2/A 3,709,545
2,500,000 Fairfield County, SC Pollution Control Rev. (South Carolina Electric & Gas
Company), 61/2% due 9/1/2014 ............................................... A1/A+ 2,738,625
1,000,000 Georgetown County, SC Pollution Control Facilities Rev. (International Paper
Company), 73/8% due 6/15/2005 .............................................. A3/BBB+ 1,015,220
3,000,000 Greenville Hospital System, SC Hospital Facilities Rev., 51/2% due 5/1/2016 ... NR/AA 3,058,800
2,000,000 Greenville Hospital System, SC Hospital Facilities Rev., 51/4% due 5/1/2023 ... Aa3/AA 1,959,740
3,000,000 Greenwood County, SC Hospital Facilities Rev. (Self Memorial Hospital),
57/8% due 10/1/2017 ........................................................ Aaa/AAA 3,162,870
2,600,000 Lancaster County, SC School District GOs, 6.60% due 7/1/2012 .................. AAA/AAA 2,874,872
2,000,000 Lancaster County, SC Waterworks & Sewer System Rev., 51/4% due 5/1/2021 ....... Aaa/AAA 2,014,020
2,720,000 Laurens County, SC Combined Utility System Rev., 5% due 1/1/2018 .............. Aaa/AAA 2,690,434
5,000,000 Lexington County, SC Hospital Rev. (Health Services District, Inc.),
51/8% due 11/1/2026 ........................................................ Aaa/AAA 4,916,400
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 1,098,750
1,000,000 Medical University South Carolina Hospital Facilities Rev., 5.60% due 7/1/2011 Aaa/AAA 1,094,740
3,000,000 Mount Pleasant, SC Water & Sewer Rev., 6% due 12/1/2020 ....................... Aaa/AAA 3,249,090
2,000,000 Myrtle Beach, SC Waterworks & Sewer System Rev., 51/4% due 3/1/2020 ........... Aaa/AAA 2,012,020
1,500,000 North Charleston Sewer District, SC Rev., 63/8% due 7/1/2012 .................. Aaa/AAA 1,760,205
5,000,000 Oconee County, SC Pollution Control Rev. (Duke Power Co. Project),
5.80% due 4/1/2014 ......................................................... Aa2/AA- 5,264,900
1,250,000 Piedmont Municipal Power Agency, SC Electric Rev., 61/4% due 1/1/2021 ......... Aaa/AAA 1,448,337
3,000,000 Piedmont Municipal Power Agency, SC Electric Rev., 6.30% due 1/1/2022 ......... Aaa/AAA 3,313,950
1,000,000 Puerto Rico Highway &Transportation Authority Rev., 51/2% due 7/1/2036 ........ Baa1/A 1,059,640
2,000,000 Puerto Rico Highway &Transportation Authority Rev., 5% due 7/1/2038 ........... Baa1/A 1,946,220
</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, 1999
SOUTH CAROLINA SERIES (continued)
<TABLE>
<CAPTION>
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
------------ --------------- ------------ ----------
<S> <C> <C> <C>
$ 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 $ 2,493,150
1,000,000 Puerto Rico Telephone Authority Rev., 51/2% due 1/1/2022 ...................... A/A+ 1,028,160
2,000,000 Richland County, SC Solid Waste Disposal Facilities Rev. (Union Camp
Corp. Project), 7.45% due 4/1/2021* ........................................ A1/A- 2,163,280
1,000,000 Richland County, SC Solid Waste Disposal Facilities Rev. (Union Camp
Corp. Project), 71/8% due 9/1/2021* ........................................ A2/A- 1,080,570
5,000,000 Rock Hill, SC Combined Utilities System Rev., 5% due 1/1/2020 ................. Aaa/AAA 4,892,200
2,000,000 South Carolina Jobs--Economic Development Authority Hospital Rev.
(Georgetown Memorial Hospital), 5% due 11/1/2029 ........................... Aaa/NR 1,921,260
6,000,000 South Carolina Public Service Authority Rev., 57/8% due 1/1/2023 .............. Aaa/AAA 6,447,960
500,000 South Carolina State Housing Finance & Development Authority
(Homeownership Mortgage), 7.55% due 7/1/2011 ............................... Aa2/AA 516,225
2,095,000 South Carolina State Housing Finance & Development Authority Rental
Housing Rev. (North Bluff Project), 5.60% due 7/1/2016 ..................... NR/AA 2,126,760
1,000,000 South Carolina State Housing Finance & Development Authority (Multi-Family
Development Rev.), 67/8% due 11/15/2023 .................................... Aaa/NR 1,063,170
5,000,000 South Carolina State Ports Authority Rev., 5.30% due 7/1/2026* ................ Aaa/AAA 4,999,550
5,000,000 Spartanburg, SC Water System Rev., 5% due 6/1/2027 ............................ Aaa/AAA 4,881,550
3,000,000 University of South Carolina Rev., 53/4% due 6/1/2026 ......................... Aaa/AAA 3,190,890
2,000,000 Western Carolina Regional Sewer Authority, SC Sewer System Rev.
51/2% due 3/1/2010 ......................................................... Aaa/AAA 2,136,140
------------
TOTAL MUNICIPAL BONDS (Cost $100,549,652)-- 96.5% ........................................................ 107,120,298
VARIABLE RATE DEMAND NOTES (Cost $2,300,000)-- 2.1% ...................................................... 2,300,000
OTHER ASSETS LESS LIABILITIES-- 1.4% ..................................................................... 1,603,402
------------
NET ASSETS-- 100.0% ...................................................................................... $111,023,700
============
</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>
<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 ................................. $106,302,064 $45,664,439 $48,798,297 $56,203,747 $55,362,856
Short-term holdings ................................ 1,000,000 1,300,000 1,000,000 1,000,000 500,000
------------ ----------- ----------- ----------- -----------
107,302,064 46,964,439 49,798,297 57,203,747 55,862,856
Cash ................................................. 122,895 125,965 101,872 122,774 67,432
Interest receivable .................................. 1,553,190 847,717 782,863 941,171 914,343
Expenses prepaid to shareholder service agent ........ 13,846 5,769 6,154 6,154 7,692
Receivable for Capital Stock sold .................... -- 38,418 305 18,586 48,507
Receivable for securities sold ....................... -- -- -- 345,000 --
Other ................................................ 1,105 491 529 591 576
------------ ----------- ----------- ----------- -----------
TOTAL ASSETS ......................................... 108,993,100 47,982,799 50,690,020 58,638,023 56,901,406
------------ ----------- ----------- ----------- -----------
LIABILITIES:
Dividends payable .................................... 197,654 85,212 88,437 101,444 104,519
Payable for Capital Stock repurchased ................ 143,613 48,368 805,226 357,708 176,996
Payable for securities purchased ..................... -- -- -- 2,747,653 --
Accrued expenses and other ........................... 126,943 69,146 75,248 81,774 77,738
------------ ----------- ----------- ----------- -----------
TOTAL LIABILITIES .................................... 468,210 202,726 968,911 3,288,579 359,253
------------ ----------- ----------- ----------- -----------
NET ASSETS ........................................... $108,524,890 $47,780,073 $49,721,109 $55,349,444 $56,542,153
============ =========== =========== =========== ===========
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A ............................................ $ 12,313 $ 6,234 $ 5,717 $ 6,592 $ 6,516
Class D ............................................ 976 117 325 92 371
Additional paid-in capital ........................... 104,318,619 45,350,143 45,788,945 51,847,646 52,693,880
Undistributed/accumulated net realized gain (loss) ... (1,449,140) (19,853) (5,087) 132,458 (9,859)
Net unrealized appreciation of investments ........... 5,642,122 2,443,432 3,931,209 3,362,656 3,851,245
------------ ----------- ----------- ----------- -----------
NET ASSETS ........................................... $108,524,890 $47,780,073 $49,721,109 $55,349,444 $56,542,153
============ =========== =========== =========== ===========
NET ASSETS:
Class A ............................................ $100,556,597 $46,896,526 $47,043,361 $54,586,766 $53,490,344
Class D ............................................ $ 7,968,293 $ 883,547 $ 2,677,748 $ 762,678 $ 3,051,809
SHARES OF CAPITAL STOCK OUTSTANDING ($.001 par value):
Class A ............................................ 12,312,824 6,233,828 5,717,624 6,592,158 6,515,386
Class D ............................................ 976,129 117,562 324,753 92,140 371,425
NET ASSET VALUE PER SHARE:
CLASS A ............................................ $8.17 $7.52 $8.23 $8.28 $8.21
CLASS D ............................................ $8.16 $7.52 $8.25 $8.28 $8.22
</TABLE>
- ----------
See Notes to Financial Statements.
32
<PAGE>
<TABLE>
<CAPTION>
MASSACHUSETTS MICHIGAN MINNESOTA MISSOURI
SERIES SERIES SERIES SERIES
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (see Portfolios of Investments):
Long-term holdings ................................. $104,754,671 $138,455,953 $118,441,949 $48,209,998
Short-term holdings ................................ 200,000 600,000 800,000 500,000
------------ ------------ ------------ -----------
104,954,671 139,055,953 119,241,949 48,709,998
Cash ................................................. 142,097 62,937 81,499 89,748
Interest receivable .................................. 1,513,262 2,430,632 1,903,807 891,844
Expenses prepaid to shareholder service agent ........ 13,462 17,692 16,154 6,153
Receivable for Capital Stock sold .................... 2,001 119,297 40,766 --
Receivable for securities sold ....................... -- -- -- 40,500
Other ................................................ 1,141 1,519 1,282 537
------------ ------------ ------------ -----------
TOTAL ASSETS ......................................... 106,626,634 141,688,030 121,285,457 49,738,780
------------ ------------ ------------ -----------
LIABILITIES:
Dividends payable .................................... 182,939 251,707 215,118 84,846
Payable for Capital Stock repurchased ................ 547,546 86,000 71,775 10,270
Payable for securities purchased ..................... -- -- -- --
Accrued expenses and other ........................... 121,926 150,696 142,659 73,503
------------ ------------ ------------ -----------
TOTAL LIABILITIES .................................... 852,411 488,403 429,552 168,619
------------ ------------ ------------ -----------
NET ASSETS ........................................... $105,774,223 $141,199,627 $120,855,905 $49,570,161
============ ============ ============ ===========
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A ............................................ $ 12,794 $ 16,215 $ 15,230 $ 6,297
Class D ............................................ 294 310 271 81
Additional paid-in capital ........................... 98,611,717 132,470,882 114,329,810 46,922,780
Undistributed/accumulated net realized gain (loss) ... 244,581 274,583 446,848 2,348
Net unrealized appreciation of investments ........... 6,904,837 8,437,637 6,063,746 2,638,655
------------ ------------ ------------ -----------
NET ASSETS ........................................... $105,774,223 $141,199,627 $120,855,905 $49,570,161
============ ============ ============ ===========
NET ASSETS:
Class A ............................................ $103,399,661 $138,557,794 $118,743,178 $48,944,507
Class D ............................................ $ 2,374,562 $ 2,641,833 $ 2,112,727 $ 625,654
SHARES OF CAPITAL STOCK OUTSTANDING ($.001 par value):
Class A ............................................ 12,793,834 16,215,028 15,230,222 6,297,041
Class D ............................................ 293,833 309,505 270,946 80,497
NET ASSET VALUE PER SHARE:
CLASS A ............................................ $8.08 $8.55 $7.80 $7.77
CLASS D ............................................ $8.08 $8.54 $7.80 $7.77
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEW YORK OHIO OREGON SOUTH CAROLINA
SERIES SERIES SERIES SERIES
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (see Portfolios of Investments):
Long-term holdings ................................. $84,336,420 $144,025,119 $59,724,935 $107,120,298
Short-term holdings ................................ 1,400,000 5,000,000 300,000 2,300,000
----------- ------------ ----------- ------------
85,736,420 149,025,119 60,024,935 109,420,298
Cash ................................................. 150,477 151,513 -- 126,753
Interest receivable .................................. 1,409,724 2,499,062 1,031,075 1,775,886
Expenses prepaid to shareholder service agent ........ 10,769 18,462 8,077 13,846
Receivable for Capital Stock sold .................... 1,240,201 14,045 38,345 151,101
Receivable for securities sold ....................... -- -- -- --
Other ................................................ 890 1,600 3,738 1,144
----------- ------------ ----------- ------------
TOTAL ASSETS ......................................... 88,548,481 151,709,801 61,106,170 111,489,028
----------- ------------ ----------- ------------
LIABILITIES:
Dividends payable .................................... 152,675 270,287 105,372 192,273
Payable for Capital Stock repurchased ................ 21,809 428,277 92,253 143,955
Payable for securities purchased ..................... -- -- -- --
Accrued expenses and other ........................... 106,287 164,995 173,233 129,100
----------- ------------ ----------- ------------
TOTAL LIABILITIES .................................... 280,771 863,559 370,858 465,328
----------- ------------ ----------- ------------
NET ASSETS ........................................... $88,267,710 $150,846,242 $60,735,312 $111,023,700
=========== ============ =========== ============
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A ............................................ $ 10,311 $ 18,387 $ 7,320 $ 12,774
Class D ............................................ 400 202 351 793
Additional paid-in capital ........................... 82,788,641 141,866,755 56,969,827 104,449,328
Undistributed/accumulated net realized gain (loss) ... 46,426 44,572 227,514 (9,841)
Net unrealized appreciation of investments ........... 5,421,932 8,916,326 3,530,300 6,570,646
----------- ------------ ----------- ------------
NET ASSETS ........................................... $88,267,710 $150,846,242 $60,735,312 $111,023,700
=========== ============ =========== ============
NET ASSETS:
Class A ............................................ $84,970,666 $149,197,388 $57,957,413 $104,542,749
Class D ............................................ $ 3,297,044 $ 1,648,854 $ 2,777,899 $ 6,480,951
SHARES OF CAPITAL STOCK OUTSTANDING ($.001 par value):
Class A ............................................ 10,310,987 18,386,874 7,319,611 12,774,100
Class D ............................................ 399,764 202,193 351,116 792,640
NET ASSET VALUE PER SHARE:
CLASS A ............................................ $8.24 $8.11 $7.92 $8.18
CLASS D ............................................ $8.25 $8.15 $7.91 $8.18
</TABLE>
33
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
NATIONAL COLORADO GEORGIA LOUISIANA MARYLAND
SERIES SERIES SERIES SERIES SERIES
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest .............................................. $2,976,135 $1,281,721 $1,354,539 $1,561,672 $1,590,626
---------- ---------- ---------- ---------- ----------
EXPENSES:
Management fees ....................................... 268,589 118,094 126,769 140,962 143,774
Distribution and service fees ......................... 81,071 26,216 39,040 30,036 44,054
Shareholder account services .......................... 72,575 33,043 37,646 37,785 42,550
Auditing and legal fees ............................... 16,042 14,039 11,350 12,692 14,158
Registration .......................................... 12,975 5,896 6,297 5,712 7,385
Shareholder reports and communications ................ 7,443 5,256 8,711 8,018 6,545
Directors' fees and expenses .......................... 5,536 4,247 4,265 4,427 4,839
Custody and related services .......................... 4,890 8,136 3,483 7,035 4,687
Miscellaneous ......................................... 2,259 1,369 1,418 1,524 1,708
---------- ---------- ---------- ---------- ----------
TOTAL EXPENSES ........................................ 471,380 216,296 238,979 248,191 269,700
---------- ---------- ---------- ---------- ----------
NET INVESTMENT INCOME ................................. 2,504,755 1,065,425 1,115,560 1,313,481 1,320,926
---------- ---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments ...................... 110,075 95,990 -- 137,525 688
Net change in unrealized appreciation of investments .. (2,108,981) (817,397) (668,888) (906,312) (571,804)
---------- ---------- ---------- ---------- ----------
NET LOSS ON INVESTMENTS ............................... (1,998,906) (721,407) (668,888) (768,787) (571,116)
---------- ---------- ---------- ---------- ----------
INCREASE IN NET ASSETS FROM OPERATIONS ................ $ 505,849 $ 344,018 $ 446,672 $ 544,694 $ 749,810
========== ========== ========== ========== ==========
</TABLE>
- ----------
See Notes to Financial Statements.
34
<PAGE>
<TABLE>
<CAPTION>
MASSACHUSETTS MICHIGAN MINNESOTA MISSOURI
SERIES SERIES SERIES SERIES
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest .............................................. $2,867,511 $3,896,784 $3,335,485 $1,316,653
---------- ---------- ---------- ----------
EXPENSES:
Management fees ....................................... 270,389 356,548 304,418 124,194
Distribution and service fees ......................... 64,343 84,617 73,263 26,482
Shareholder account services .......................... 71,413 96,603 89,108 37,070
Auditing and legal fees ............................... 16,954 20,011 18,992 13,620
Registration .......................................... 3,828 4,352 5,909 5,591
Shareholder reports and communications ................ 6,639 9,086 9,764 7,983
Directors' fees and expenses .......................... 5,244 5,440 5,361 4,272
Custody and related services .......................... 15,212 10,875 13,392 6,609
Miscellaneous ......................................... 2,382 2,872 2,639 1,452
---------- ---------- ---------- ----------
TOTAL EXPENSES ........................................ 456,404 590,404 522,846 227,273
---------- ---------- ---------- ----------
NET INVESTMENT INCOME ................................. 2,411,107 3,306,380 2,812,639 1,089,380
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments ...................... 540,284 409,565 459,408 9,141
Net change in unrealized appreciation of investments .. (2,344,784) (2,439,155) (1,722,354) (866,824)
---------- ---------- ---------- ----------
NET LOSS ON INVESTMENTS ............................... (1,804,500) (2,029,590) (1,262,946) (857,683)
---------- ---------- ---------- ----------
INCREASE IN NET ASSETS FROM OPERATIONS ................ $ 606,607 $1,276,790 $1,549,693 $ 231,697
========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEW YORK OHIO OREGON SOUTH CAROLINA
SERIES SERIES SERIES SERIES
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest .............................................. $2,320,199 $4,210,238 $1,602,431 $2,967,557
---------- ---------- ---------- ----------
EXPENSES:
Management fees ....................................... 217,605 379,582 151,261 276,584
Distribution and service fees ......................... 57,067 83,683 43,455 83,452
Shareholder account services .......................... 55,672 100,456 43,375 76,525
Auditing and legal fees ............................... 13,994 20,675 15,121 16,823
Registration .......................................... 7,453 7,462 7,889 7,108
Shareholder reports and communications ................ 8,805 8,495 6,876 8,665
Directors' fees and expenses .......................... 5,037 5,635 3,044 4,686
Custody and related services .......................... 4,449 10,682 7,697 12,608
Miscellaneous ......................................... 1,948 3,062 1,582 2,325
---------- ---------- ---------- ----------
TOTAL EXPENSES ........................................ 372,030 619,732 280,300 488,776
---------- ---------- ---------- ----------
NET INVESTMENT INCOME ................................. 1,948,169 3,590,506 1,322,131 2,478,781
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments ...................... 54,413 68,278 231,647 145,532
Net change in unrealized appreciation of investments .. (1,598,135) (2,278,558) (824,508) (1,950,699)
---------- ---------- ---------- ----------
NET LOSS ON INVESTMENTS ............................... (1,543,722) (2,210,280) (592,861) (1,805,167)
---------- ---------- ---------- ----------
INCREASE IN NET ASSETS FROM OPERATIONS ................ $ 404,447 $1,380,226 $ 729,270 $ 673,614
========== ========== ========== ==========
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
NATIONAL SERIES COLORADO SERIES GEORGIA SERIES
---------------------------- -------------------------- -------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
3/31/99 9/30/98 3/31/99 9/30/98 3/31/99 9/30/98
------------ ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income .................... $ 2,504,755 $ 4,996,585 $ 1,065,425 $ 2,274,183 $ 1,115,560 $ 2,287,170
Net realized gain on investments ......... 110,075 1,375,240 95,990 1,217,468 -- 355,347
Net change in unrealized
appreciation of investments ............ (2,108,981) 2,557,155 (817,397) 133,704 (668,888) 1,483,755
------------ ------------ ----------- ----------- ----------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS ... 505,849 8,928,980 344,018 3,625,355 446,672 4,126,272
------------ ------------ ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ............................... (2,397,327) (4,774,389) (1,053,163) (2,263,810) (1,065,727) (2,185,497)
Class D ............................... (107,428) (222,196) (12,262) (10,373) (49,833) (101,673)
Net realized gain on investments:
Class A ............................... -- -- -- -- (256,931) (187,062)
Class D ............................... -- -- -- -- (15,052) (10,787)
------------ ------------ ----------- ----------- ----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS (2,504,755) (4,996,585) (1,065,425) (2,274,183) (1,387,543) (2,485,019)
------------ ------------ ----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ............................... 2,876,558 7,098,841 779,400 1,287,016 1,198,004 2,038,654
Class D ............................... 783,176 929,650 312,810 143,429 424,248 918,990
Net asset value of shares issued in
payment of dividends:
Class A ............................... 1,325,925 2,620,048 593,794 1,265,360 697,527 1,422,482
Class D ............................... 66,836 171,356 9,439 7,311 39,424 87,282
Exchanged from associated Funds:
Class A ............................... 7,207,504 7,059,979 4,243,293 2,208,315 743,185 260,904
Class D ............................... 4,203,451 16,952,120 318,471 40,000 38,798 53,323
Net asset value of shares issued in
payment of gain distribution:
Class A ............................... -- -- -- -- 200,164 145,261
Class D ............................... -- -- -- -- 12,933 9,588
------------ ------------ ----------- ----------- ----------- -----------
Total .................................... 16,463,450 34,831,994 6,257,207 4,951,431 3,354,283 4,936,484
------------ ------------ ----------- ----------- ----------- -----------
Cost of shares repurchased:
Class A ............................... (3,441,400) (9,998,684) (1,784,955) (7,569,275) (3,070,713) (6,905,867)
Class D ............................... (519,960) (631,664) -- (78,801) (523,538) (608,241)
Exchanged into associated Funds:
Class A ............................... (7,445,182) (6,101,457) (1,806,124) (2,730,725) (260,154) (703,073)
Class D ............................... (3,834,475) (12,491,491) (91,807) (14,735) (71,184) (381,284)
------------ ------------ ----------- ----------- ----------- -----------
Total .................................... (15,241,017) (29,223,296) (3,682,886) (10,393,536) (3,925,589) (8,598,465)
------------ ------------ ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ........ 1,222,433 5,608,698 2,574,321 (5,442,105) (571,306) (3,661,981)
------------ ------------ ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS ........ (776,473) 9,541,093 1,852,914 (4,090,933) (1,512,177) (2,020,728)
NET ASSETS:
Beginning of period ...................... 109,301,363 99,760,270 45,927,159 50,018,092 51,233,286 53,254,014
------------ ------------ ----------- ----------- ----------- -----------
END OF PERIOD ............................ $108,524,890 $109,301,363 $47,780,073 $45,927,159 $49,721,109 $51,233,286
============ ============ =========== =========== =========== ===========
</TABLE>
- ----------
See Notes to Financial Statements.
36
<PAGE>
<TABLE>
<CAPTION>
LOUISIANA SERIES MARYLAND SERIES
------------------------- --------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
3/31/99 9/30/98 3/31/99 9/30/98
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income .................... $ 1,313,481 $ 2,755,599 $ 1,320,926 $ 2,639,840
Net realized gain on investments ......... 137,525 750,930 688 183,975
Net change in unrealized
appreciation of investments ............ (906,312) 904,770 (571,804) 1,341,557
----------- ----------- ----------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS ... 544,694 4,411,299 749,810 4,165,372
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ............................... (1,298,732) (2,732,585) (1,260,790) (2,539,788)
Class D ............................... (14,749) (23,014) (60,136) (100,052)
Net realized gain on investments:
Class A ............................... (742,225) (95,055) (184,646) (307,098)
Class D ............................... (11,055) (862) (10,939) (11,949)
----------- ----------- ----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS (2,066,761) (2,851,516) (1,516,511) (2,958,887)
----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ............................... 787,748 1,593,079 1,042,860 3,716,423
Class D ............................... 49,990 275,183 312,781 1,423,657
Net asset value of shares issued in
payment of dividends:
Class A ............................... 643,637 1,366,881 750,294 1,496,930
Class D ............................... 10,353 16,878 52,344 78,222
Exchanged from associated Funds:
Class A ............................... 35,505 29,131 121,573 294,333
Class D ............................... 12,220 45,621 45,272 16,794
Net asset value of shares issued in
payment of gain distribution:
Class A ............................... 490,938 64,975 138,396 225,691
Class D ............................... 7,862 692 10,428 10,991
----------- ----------- ----------- -----------
Total .................................... 2,038,253 3,392,440 2,473,948 7,263,041
----------- ----------- ----------- -----------
Cost of shares repurchased:
Class A ............................... (2,135,385) (4,220,025) (2,629,218) (4,254,611)
Class D ............................... (133,532) (28,622) (432,474) (521,910)
Exchanged into associated Funds:
Class A ............................... (42,477) (266,535) (100,235) (282,486)
Class D ............................... -- -- (21,780) (3,461)
----------- ----------- ----------- -----------
Total .................................... (2,311,394) (4,515,182) (3,183,707) (5,062,468)
----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ........ (273,141) (1,122,742) (709,759) 2,200,573
----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS ........ (1,795,208) 437,041 (1,476,460) 3,407,058
NET ASSETS:
Beginning of period ...................... 57,144,652 56,707,611 58,018,613 54,611,555
----------- ----------- ----------- -----------
END OF PERIOD ............................ $55,349,444 $57,144,652 $56,542,153 $58,018,613
=========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MASSACHUSETTS SERIES MICHIGAN SERIES
--------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
3/31/99 9/30/98 3/31/99 9/30/98
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income .................... $ 2,411,107 $ 5,151,550 $ 3,306,380 $ 6,920,269
Net realized gain on investments ......... 540,284 360,413 409,565 2,466,720
Net change in unrealized
appreciation of investments ............ (2,344,784) 4,686,395 (2,439,155) 2,641,464
------------ ------------ ------------ ------------
INCREASE IN NET ASSETS FROM OPERATIONS ... 606,607 10,198,358 1,276,790 12,028,453
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ............................... (2,379,234) (5,099,272) (3,263,836) (6,853,272)
Class D ............................... (31,873) (52,278) (42,544) (66,997)
Net realized gain on investments:
Class A ............................... (643,189) (1,288,484) (2,565,404) (1,235,329)
Class D ............................... (9,341) (14,760) (38,013) (15,651)
------------ ------------ ------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS (3,063,637) (6,454,794) (5,909,797) (8,171,249)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ............................... 2,046,906 2,426,260 3,153,256 4,780,685
Class D ............................... 997,638 392,038 678,378 325,385
Net asset value of shares issued in
payment of dividends:
Class A ............................... 1,389,237 3,066,637 1,959,419 4,190,240
Class D ............................... 15,131 22,770 30,046 50,303
Exchanged from associated Funds:
Class A ............................... 9,593,018 10,859,223 298,172 2,928,969
Class D ............................... 158,159 116,384 298,535 106,164
Net asset value of shares issued in
payment of gain distribution:
Class A ............................... 460,197 951,011 1,897,325 911,174
Class D ............................... 5,256 7,293 32,823 14,084
------------ ------------ ------------ ------------
Total .................................... 14,665,542 17,841,616 8,347,954 13,307,004
------------ ------------ ------------ ------------
Cost of shares repurchased:
Class A ............................... (4,391,072) (9,987,117) (7,314,994) (12,531,450)
Class D ............................... (234,172) (361,116) (169,380) (479,641)
Exchanged into associated Funds:
Class A ............................... (12,605,161) (11,696,486) (1,033,263) (3,299,610)
Class D ............................... -- -- -- (66,539)
------------ ------------ ------------ ------------
Total .................................... (17,230,405) (22,044,719) (8,517,637) (16,377,240)
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ........ (2,564,863) (4,203,103) (169,683) (3,070,236)
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS ........ (5,021,893) (459,539) (4,802,690) 786,968
NET ASSETS:
Beginning of period ...................... 110,796,116 111,255,655 146,002,317 145,215,349
------------ ------------ ------------ ------------
END OF PERIOD ............................ $105,774,223 $110,796,116 $141,199,627 $146,002,317
============ ============ ============ ============
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
MINNESOTA SERIES MISSOURI SERIES NEW YORK SERIES
--------------------------- ------------------------- -------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
3/31/99 9/30/98 3/31/99 9/30/98 3/31/99 9/30/98
------------ ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income ..................... $ 2,812,639 $ 5,966,394 $ 1,089,380 $ 2,391,647 $ 1,948,169 $ 4,037,530
Net realized gain on investments .......... 459,408 2,326,890 9,141 792,748 54,413 2,733,067
Net change in unrealized
appreciation of investments ............. (1,722,354) 714,989 (866,824) 984,919 (1,598,135) 1,350,015
------------ ------------ ----------- ----------- ----------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS .... 1,549,693 9,008,273 231,697 4,169,314 404,447 8,120,612
------------ ------------ ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income:
Class A ................................ (2,772,106) (5,891,605) (1,081,205) (2,377,089) (1,901,114) (3,969,021)
Class D ................................ (40,533) (74,789) (8,175) (14,558) (47,055) (68,509)
Net realized gain on investments:
Class A ................................ (1,489,186) (139,563) (736,677) (437,159) (2,031,676) (837,486)
Class D ................................ (27,145) (2,075) (6,599) (3,680) (55,062) (15,723)
------------ ------------ ----------- ----------- ----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS . (4,328,970) (6,108,032) (1,832,656) (2,832,486) (4,034,907) (4,890,739)
------------ ------------ ----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ................................ 1,888,210 3,759,777 789,364 1,518,510 4,771,815 3,404,935
Class D ................................ 233,422 583,305 201,000 79,605 701,387 541,566
Net asset value of shares issued in
payment of dividends:
Class A ................................ 1,831,820 3,934,003 545,898 1,135,261 1,140,408 2,342,732
Class D ................................ 23,109 42,082 7,101 12,480 35,990 49,242
Exchanged from associated Funds:
Class A ................................ 516,786 373,852 302,917 223,404 2,415,310 3,247,626
Class D ................................ 192,572 132,637 23,606 -- 493,526 109,289
Net asset value of shares issued in
payment of gain distribution:
Class A ................................ 1,196,281 112,803 486,691 281,752 1,630,608 666,270
Class D ................................ 20,449 1,581 6,011 2,904 47,092 12,694
------------ ------------ ----------- ----------- ----------- -----------
Total ..................................... 5,902,649 8,940,040 2,362,588 3,253,916 11,236,136 10,374,354
------------ ------------ ----------- ----------- ----------- -----------
Cost of shares repurchased:
Class A ................................ (5,151,608) (10,246,157) (1,487,534) (6,778,544) (2,805,417) (8,149,245)
Class D ................................ (409,813) (199,128) (2,607) (162,241) (51,450) (152,914)
Exchanged into associated Funds:
Class A ................................ (182,556) (1,084,969) (56,301) (522,272) (3,477,641) (3,375,173)
Class D ................................ -- (306,816) (12,439) -- (7,041) (22,942)
------------ ------------ ----------- ----------- ----------- -----------
Total ..................................... (5,743,977) (11,837,070) (1,558,881) (7,463,057) (6,341,549) (11,700,274)
------------ ------------ ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ......... 158,672 (2,897,030) 803,707 (4,209,141) 4,894,587 (1,325,920)
------------ ------------ ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS ......... (2,620,605) 3,211 (797,252) (2,872,313) 1,264,127 1,903,953
NET ASSETS:
Beginning of period ....................... 123,476,510 123,473,299 50,367,413 53,239,726 87,003,583 85,099,630
------------ ------------ ----------- ----------- ----------- -----------
END OF PERIOD ............................. $120,855,905 $123,476,510 $49,570,161 $50,367,413 $88,267,710 $87,003,583
============ ============ =========== =========== =========== ===========
</TABLE>
- ----------
See Notes to Financial Statements.
38
<PAGE>
<TABLE>
<CAPTION>
OHIO SERIES OREGON SERIES SOUTH CAROLINA SERIES
--------------------------- ------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
3/31/99 9/30/98 3/31/99 9/30/98 3/31/99 9/30/98
------------ ------------ ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income ..................... $ 3,590,506 $ 7,551,775 $ 1,322,131 $ 2,628,729 $ 2,478,781 $ 5,074,598
Net realized gain on investments .......... 68,278 3,398,423 231,647 375,535 145,532 1,214,196
Net change in unrealized
appreciation of investments ............. (2,278,558) 1,953,712 (824,508) 1,637,046 (1,950,699) 2,638,545
------------ ------------ ----------- ----------- ------------ ------------
INCREASE IN NET ASSETS FROM OPERATIONS .... 1,380,226 12,903,910 729,270 4,641,310 673,614 8,927,339
------------ ------------ ----------- ----------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income:
Class A ................................ (3,565,746) (7,504,421) (1,275,324) (2,555,801) (2,374,477) (4,905,709)
Class D ................................ (24,760) (47,354) (46,807) (72,928) (104,304) (168,889)
Net realized gain on investments:
Class A ................................ (2,412,770) (2,017,799) (359,284) (700,268) (835,120) (905,320)
Class D ................................ (18,170) (15,589) (16,245) (21,792) (44,640) (34,538)
------------ ------------ ----------- ----------- ------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS . (6,021,446) (9,585,163) (1,697,660) (3,350,789) (3,358,541) (6,014,456)
------------ ------------ ----------- ----------- ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ................................ 1,542,015 3,716,543 3,434,589 4,579,085 3,856,980 10,736,862
Class D ................................ 596,196 208,265 243,306 912,518 1,195,316 2,250,161
Net asset value of shares issued in
payment of dividends:
Class A ................................ 2,171,848 4,618,664 797,476 1,588,261 1,337,509 2,804,800
Class D ................................ 19,705 40,700 31,349 56,847 73,618 133,057
Exchanged from associated Funds:
Class A ................................ 677,093 404,291 794,384 120,904 234,475 452,032
Class D ................................ 225,056 70,396 69,512 47,138 61,237 52,119
Net asset value of shares issued in
payment of gain distribution:
Class A ................................ 1,820,544 1,532,501 281,167 536,993 661,343 698,627
Class D ................................ 15,630 13,962 11,943 18,047 38,926 31,538
------------ ------------ ----------- ----------- ------------ ------------
Total ..................................... 7,068,087 10,605,322 5,663,726 7,859,793 7,459,404 17,159,196
------------ ------------ ----------- ----------- ------------ ------------
Cost of shares repurchased:
Class A ................................ (5,311,811) (13,102,427) (2,857,549) (5,263,365) (5,088,140) (10,837,647)
Class D ................................ (125,239) (395,804) (184,984) (103,120) (310,853) (605,605)
Exchanged into associated Funds:
Class A ................................ (223,276) (1,758,230) (1,168,327) (437,002) (240,671) (1,330,837)
Class D ................................ (149,792) (17,309) (690) (12,598) (33,134) (57,130)
------------ ------------ ----------- ----------- ------------ ------------
Total ..................................... (5,810,118) (15,273,770) (4,211,550) (5,816,085) (5,672,798) (12,831,219)
------------ ------------ ----------- ----------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ......... 1,257,969 (4,668,448) 1,452,176 2,043,708 1,786,606 4,327,977
------------ ------------ ----------- ----------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS ......... (3,383,251) (1,349,701) 483,786 3,334,229 (898,321) 7,240,860
NET ASSETS:
Beginning of period ....................... 154,229,493 155,579,194 60,251,526 56,917,297 111,922,021 104,681,161
------------ ------------ ----------- ----------- ------------ ------------
END OF PERIOD ............................. $150,846,242 $154,229,493 $60,735,312 $60,251,526 $111,023,700 $111,922,021
============ ============ =========== =========== ============ ============
</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. 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 charge ("CDSC") 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 CDSC 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, 1999,
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,
1999, were as follows:
SERIES PURCHASES SALES
- -------------- ------------- --------------
National $3,890,520 $2,879,200
Colorado 2,662,223 1,141,160
Georgia -- --
Louisiana 4,677,643 2,932,525
Maryland 975,380 35,600
Massachusetts 4,683,435 6,618,930
Michigan 5,130,253 8,498,693
Minnesota 5,571,758 7,152,638
Missouri 1,000,000 721,350
New York 4,021,920 3,884,200
Ohio 1,006,780 5,880,999
Oregon 6,191,915 3,999,491
South Carolina 1,598,265 1,787,700
40
<PAGE>
NOTES TO FINANCIAL STATEMENTS
At March 31, 1999, each Series' 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 $5,696,542 $ 54,420
Colorado 2,464,302 20,870
Georgia 3,931,209 --
Louisiana 3,391,796 29,140
Maryland 3,852,645 1,400
Massachusetts 6,904,837 --
Michigan 8,645,585 207,948
Minnesota 6,132,918 69,172
Missouri 2,650,470 11,815
New York 5,459,612 37,680
Ohio 8,927,750 11,424
Oregon 3,559,420 29,120
South Carolina 6,570,646 --
4. MANAGEMENT FEE, DISTRIBUTION 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 Advisors, 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 $ 4,492 $34,312
Colorado 4,002 29,104
Georgia 5,464 41,746
Louisiana 3,734 27,613
Maryland 5,187 39,854
Massachusetts 10,102 65,965
Michigan 8,845 65,656
Minnesota 8,678 62,576
Missouri 3,615 27,006
New York 5,485 40,673
Ohio 6,775 47,648
Oregon 10,173 76,014
South Carolina 11,800 85,735
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, 1999, the Distributor charged such fees to the Fund pursuant to
the Plan as follows:
TOTAL FEES % OF AVERAGE
SERIES PAID NET ASSETS
- -------------- ------------- ---------------
NATIONAL $52,918 .10%
Colorado 22,830 .10
Georgia 25,006 .10
Louisiana 26,115 .09
Maryland 27,997 .10
Massachusetts 55,441 .10
Michigan 73,290 .10
Minnesota 62,418 .10
Missouri 24,142 .10
New York 44,024 .10
Ohio 77,222 .10
Oregon 30,123 .10
South Carolina 54,735 .10
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, 1999, 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 $28,153 Minnesota $10,845
Colorado 3,386 Missouri 2,340
Georgia 14,034 New York 13,043
Louisiana 3,921 Ohio 6,461
Maryland 16,057 Oregon 13,332
Massachusetts 8,902 South Carolina 28,717
Michigan 11,327
41
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The Distributor is entitled to retain any CDSC imposed on redemptions of Class D
shares occurring within one year after purchase and on certain redemptions of
Class A shares occurring within 18 months of purchase. For the six months ended
March31, 1999, such charges were as follows:
SERIES SERIES
- ------------- -------------
National $ 804 Missouri $ 21
Georgia 1,271 New York 317
Maryland 635 Ohio 258
Massachusetts 192 Oregon 416
Michigan 54 South Carolina 331
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, 1999,
Seligman Services, Inc. received commissions from the sale of shares of each
Series and distribution and service fees pursuant to the Plan, as follows:
DISTRIBUTION AND
SERIES COMMISSIONS SERVICE FEES
- -------------- --------------- -------------------
National $ 320 $4,356
Colorado 571 1,357
Georgia 108 496
Louisiana 272 594
Maryland 404 758
Massachusetts 476 1,108
Michigan 962 1,587
Minnesota -- 1,273
Missouri -- 1,637
New York 405 7,069
Ohio 89 2,210
Oregon 177 883
South Carolina 1,960 3,174
Seligman Data Corp., which is owned by certain associated investment
companies, charged at cost for shareholder account services the following
amounts:
SERIES SERIES
- ------------- ------------
National $72,575 Minnesota $ 89,108
Colorado 33,043 Missouri 37,070
Georgia 37,646 New York 55,672
Louisiana 37,785 Ohio 100,456
Maryland 42,550 Oregon 43,375
Massachusetts 71,413 South Carolina 76,525
Michigan 96,603
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, 1999, are included in other liabilities as follows:
SERIES SERIES
- ------------ -------------
National $17,260 Minnesota $14,879
Colorado 11,052 Missouri 11,063
Georgia 10,420 New York 14,752
Louisiana 11,956 Ohio 14,980
Maryland 11,951 Oregon 10,906
Massachusetts 14,831 South Carolina 10,595
Michigan 14,476
5. COMMITTED LINE OF CREDIT -- Effective July 1, 1998, the Fund entered into a
joint $800 million committed line of credit that is shared by substantially all
funds in the Seligman Group of Investment Companies. Each Series' borrowings are
limited to 10% of its net assets. Borrowings pursuant to the credit facility are
subject to interest at a rate equal to the overnight federal funds rate plus
0.50%. Each Series incurs a commitment fee of 0.08% per annum on its share of
the unused portion of the credit facility. The credit facility may be drawn upon
only for temporary purposes and is subject to certain other customary
restrictions. The credit facility commitment expires one year from the date of
the agreement but is renewable with the consent of the participating banks. To
date, the Fund has not borrowed from the credit facility.
6. CAPITAL LOSS CARRYFORWARD -- At September 30, 1998, the National and Colorado
Series had net capital loss carryforwards for federal income tax purposes of
$1,559,215 and $115,843, respectively, which are available for offset against
future taxable net capital gains, expiring in various amounts through 2005.
Accordingly, no capital gain distributions are expected to be paid to
shareholders of the National and Colorado Series until net capital gains have
been realized in excess of the available capital loss carryforwards.
42
<PAGE>
NOTES TO FINANCIAL STATEMENTS
7. CAPITAL STOCK TRANSACTIONS -- The Fund has 1,300,000,000 shares of Capital
Stock authorized. At March 31, 1999, 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
3/31/99 9/30/98 3/31/99 9/30/98 3/31/99 9/30/98 3/31/99 9/30/98
------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales of shares:
Class A ...................... 348,974 873,287 102,918 171,756 144,600 248,416 94,118 191,119
Class D ...................... 95,186 114,176 41,316 19,107 51,067 111,889 6,000 32,909
Shares issued in payment
of dividends:
Class A ...................... 161,032 321,523 78,319 168,624 84,168 173,232 76,968 163,549
Class D ...................... 8,129 21,003 1,247 974 4,746 10,608 1,238 2,019
Exchanged from associated
Funds:
Class A ...................... 872,466 865,763 559,067 294,638 89,829 31,751 4,240 3,509
Class D ...................... 511,643 2,093,008 41,999 5,319 4,650 6,394 1,465 5,444
Shares issued in payment
of gain distributions:
Class A ...................... -- -- -- -- 24,233 17,956 58,865 7,857
Class D ...................... -- -- -- -- 1,562 1,182 944 84
--------- --------- --------- --------- --------- --------- -------- --------
Total .......................... 1,997,430 4,288,760 824,866 660,418 404,855 601,428 243,838 406,490
--------- --------- --------- --------- -------- --------- -------- --------
Shares repurchased:
Class A ...................... (418,672) (1,226,722) (235,921) (1,009,933) (370,619) (844,100) (256,140) (505,091)
Class D ...................... (63,192) (77,574) -- (10,459) (63,143) (73,925) (15,974) (3,426)
Exchanged into associated
Funds:
Class A ...................... (906,141) (747,805) (238,574) (363,810) (31,508) (86,018) (5,117) (31,881)
Class D ...................... (464,782) (1,545,820) (12,080) (1,959) (8,583) (46,291) -- --
--------- --------- --------- --------- -------- --------- -------- --------
Total .......................... (1,852,787) (3,597,921) (486,575) (1,386,161) (473,853) (1,050,334) (277,231) (540,398)
--------- --------- --------- --------- --------- --------- -------- --------
Increase (decrease) in shares .. 144,643 690,839 338,291 (725,743) (68,998) (448,906) (33,393) (133,908)
========= ========= ========= ========= ======== ========= ======== ========
</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
3/31/99 9/30/98 3/31/99 9/30/98 3/31/99 9/30/98 3/31/99 9/30/98
------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
Sales of shares:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A ...................... 126,186 452,967 251,371 301,803 367,020 552,545 240,449 480,210
Class D ...................... 37,910 173,585 123,019 48,564 78,956 37,739 29,799 74,514
Shares issued in payment
of dividends:
Class A ...................... 90,903 182,716 170,493 381,287 226,980 484,322 233,082 502,233
Class D ...................... 6,337 9,536 1,858 2,830 3,488 5,822 2,941 5,371
Exchanged from associated
Funds:
Class A ...................... 14,712 35,858 1,176,196 1,354,117 34,263 339,541 65,699 47,797
Class D ...................... 5,472 2,043 19,490 14,321 34,117 12,157 24,259 16,965
Shares issued in payment
of gain distributions:
Class A ...................... 16,816 27,829 56,744 120,229 221,133 106,820 153,173 14,480
Class D ...................... 1,266 1,354 648 923 3,830 1,653 2,614 203
--------- -------- --------- --------- -------- --------- -------- ---------
Total .......................... 299,602 885,888 1,799,819 2,224,074 969,787 1,540,599 752,016 1,141,773
-------- -------- --------- --------- -------- --------- -------- ---------
Shares repurchased:
Class A ...................... (318,699) (519,240) (539,123) (1,241,182) (848,134) (1,447,886) (655,459)(1,308,615)
Class D ...................... (52,509) (63,527) (28,832) (44,816) (19,765) (55,636) (52,235) (25,476)
Exchanged into associated
Funds:
Class A ...................... (12,187) (34,518) (1,549,374) (1,454,254) (118,976) (382,652) (23,311) (138,742)
Class D ...................... (2,650) (423) -- -- -- (7,657) -- (38,924)
-------- -------- --------- --------- -------- --------- -------- ---------
Total .......................... (386,045) (617,708) (2,117,329) (2,740,252) (986,875) (1,893,831) (731,005)(1,511,757)
--------- -------- --------- --------- -------- --------- -------- ---------
Increase (decrease) in shares .. (86,443) 268,180 (317,510) (516,178) (17,088) (353,232) 21,011 (369,984)
======== ======== ========= ========= ======== ========= ======== =========
</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
3/31/99 9/30/98 3/31/99 9/30/98 3/31/99 9/30/98 3/31/99 9/30/98
------------------------ ------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales of shares:
Class A ...................... 100,686 192,882 574,951 409,090 188,190 453,643 432,247 578,820
Class D ...................... 25,696 10,178 84,600 64,754 72,872 25,288 30,675 115,620
Shares issued in payment
of dividends:
Class A ...................... 69,523 144,574 136,720 280,689 265,323 563,375 100,210 201,391
Class D ...................... 905 1,589 4,314 5,891 2,396 4,941 3,942 7,211
Exchanged from associated
Funds:
Class A ...................... 38,285 28,380 290,682 389,085 82,467 49,472 100,018 15,314
Class D ...................... 2,979 -- 58,629 12,843 27,382 8,543 8,729 5,944
Shares issued in payment
of gain distributions:
Class A ...................... 62,316 36,308 196,696 81,252 223,380 189,198 35,501 69,111
Class D ...................... 770 374 5,681 1,546 1,911 1,715 1,508 2,326
-------- -------- --------- --------- -------- --------- -------- --------
Total .......................... 301,160 414,285 1,352,273 1,245,150 863,921 1,296,175 712,830 995,737
-------- -------- --------- --------- -------- --------- -------- --------
Shares repurchased:
Class A ...................... (189,592) (861,837) (337,306) (974,859) (649,067) (1,599,143) (359,864) (666,927)
Class D ...................... (329) (20,769) (6,170) (18,301) (15,249) (48,136) (23,271) (13,128)
Exchanged into associated
Funds:
Class A ...................... (7,174) (66,519) (417,437) (404,227) (27,329) (214,380) (147,191) (55,368)
Class D ...................... (1,561) -- (848) (2,738) (18,379) (2,092) (87) (1,600)
-------- -------- --------- --------- -------- --------- -------- --------
Total .......................... (198,656) (949,125) (761,761) (1,400,125) (710,024) (1,863,751) (530,413) (737,023)
-------- -------- --------- --------- -------- --------- -------- --------
Increase (decrease) in shares .. 102,504 (534,840) 590,512 (154,975) 153,897 (567,576) 182,417 258,714
======== ======== ========= ========= ======== ========= ======== ========
</TABLE>
SOUTH CAROLINA
-------------------------
SIX MONTHS YEAR
ENDED ENDED
3/31/99 9/30/98
------------ ------------
Sales of shares:
Class A 467,298 1,307,029
Class D 145,508 273,163
Shares issued in payment
of dividends:
Class A 161,946 341,280
Class D 8,923 16,202
Exchanged from associated
Funds:
Class A 28,320 54,738
Class D 7,434 6,370
Shares issued in payment
of gain distributions:
Class A 80,358 86,250
Class D 4,735 3,898
-------- ---------
Total 904,522 2,088,930
-------- ---------
Shares repurchased:
Class A (616,633) (1,319,559)
Class D (37,768) (73,888)
Exchanged into associated
Funds:
Class A (29,133) (162,725)
Class D (4,022) (6,993)
-------- ---------
Total (687,556) (1,563,165)
-------- ---------
Increase in shares 216,966 525,765
======== =========
44
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below are intended to help you understand the financial
performance of each Class of each Series for the past five and one-half years or
from its inception if less than five and one-half years. Certain information
reflects financial results for a single share of a Class that was held
throughout the periods shown. Per share amounts are calculated using average
shares outstanding. "Total return" shows the rate that you would have earned (or
lost) on an investment in each Class, assuming you reinvested all your dividend
and capital gain distributions. Total returns do not reflect any sales charges,
and are not annualized for periods of less than one year.
NATIONAL SERIES
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------
3/31/99 1998 1997 1996 1995 1994
--------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.32 $8.01 $7.70 $7.58 $7.18 $8.72
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.19 0.39 0.39 0.40 0.40 0.41
Net realized and unrealized gain (loss)
on investments .................................... (0.15) 0.31 0.31 0.12 0.40 (1.04)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.04 0.70 0.70 0.52 0.80 (0.63)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.19) (0.39) (0.39) (0.40) (0.40) (0.41)
Distributions from net realized capital gain ........ -- -- -- -- -- (0.50)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.19) (0.39) (0.39) (0.40) (0.40) (0.91)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.17 $8.32 $8.01 $7.70 $7.58 $7.18
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.51% 9.00% 9.40% 6.97% 11.48% (7.83)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $100,557 $101,909 $97,481 $98,767 $104,184 $111,374
Ratio of expenses to average net assets ............. 0.83%+ 0.80% 0.84% 0.80% 0.86% 0.85%
Ratio of net income to average net assets ........... 4.71%+ 4.82% 5.05% 5.19% 5.46% 5.30%
Portfolio turnover rate ............................. 2.76% 18.00% 20.63% 33.99% 24.91% 24.86%
CLASS D
---------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30, 2/1/94**
--------------------------------------- TO
3/31/99 1998 1997 1996 1995 9/30/94
--------- ---- ---- ---- ---- -------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.31 $8.02 $7.70 $7.57 $7.18 $8.20
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.16 0.32 0.32 0.33 0.32 0.22
Net realized and unrealized gain (loss)
on investments .................................... (0.15) 0.29 0.32 0.13 0.39 (1.02)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.01 0.61 0.64 0.46 0.71 (0.80)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.16) (0.32) (0.32) (0.33) (0.32) (0.22)
Distributions from net realized capital gain ........ -- -- -- -- -- --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.16) (0.32) (0.32) (0.33) (0.32) (0.22)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.16 $8.31 $8.02 $7.70 $7.57 $7.18
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.08% 7.76% 8.56% 6.13% 10.17% (9.96)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $7,968 $7,392 $2,279 $4,826 $1,215 $446
Ratio of expenses to average net assets ............. 1.73%+ 1.71% 1.75% 1.67% 1.95% 1.76%+
Ratio of net income to average net assets ........... 3.81%+ 3.91% 4.15% 4.27% 4.40% 4.37%+
Portfolio turnover rate ............................. 2.76% 18.00% 20.63% 33.99% 24.91% 24.86%++
</TABLE>
- -------------------------
See footnotes on page 57.
45
<PAGE>
FINANCIAL HIGHLIGHTS
COLORADO SERIES
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------
3/31/99 1998 1997 1996 1995 1994
--------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $7.64 $7.42 $7.27 $7.30 $7.09 $7.76
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.17 0.36 0.37 0.37 0.38 0.37
Net realized and unrealized gain (loss)
on investments .................................... (0.12) 0.22 0.15 (0.03) 0.21 (0.59)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.05 0.58 0.52 0.34 0.59 (0.22)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.17) (0.36) (0.37) (0.37) (0.38) (0.37)
Distributions from net realized capital gain ........ -- -- -- -- -- (0.08)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.17) (0.36) (0.37) (0.37) (0.38) (0.45)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $7.52 $7.64 $7.42 $7.27 $7.30 $7.09
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.65% 8.03% 7.30% 4.76% 8.56% (2.92)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $46,896 $45,583 $49,780 $52,295 $54,858 $58,197
Ratio of expenses to average net assets ............. 0.90%+ 0.90% 0.90% 0.85% 0.93% 0.86%
Ratio of net income to average net assets ........... 4.52%+ 4.80% 5.01% 5.07% 5.31% 5.06%
Portfolio turnover rate ............................. 2.55% 28.66% 3.99% 12.39% 14.70% 10.07%
</TABLE>
<TABLE>
<CAPTION>
CLASS D
--------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30, 2/1/94**
---------------------------------------- TO
3/31/99 1998 1997 1996 1995 9/30/94
--------- ----- ----- ----- ----- ----------
PER SHARE DATA:
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ................ $7.63 $7.42 $7.27 $7.29 $7.09 $7.72
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.14 0.29 0.30 0.31 0.30 0.20
Net realized and unrealized gain (loss)
on investments .................................... (0.11) 0.21 0.15 (0.02) 0.20 (0.63)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.03 0.50 0.45 0.29 0.50 (0.43)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.14) (0.29) (0.30) (0.31) (0.30) (0.20)
Distributions from net realized capital gain ........ -- -- -- -- -- --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.14) (0.29) (0.30) (0.31) (0.30) (0.20)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $7.52 $7.63 $7.42 $7.27 $7.29 $7.09
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.33% 6.90% 6.34% 3.95% 7.26% (5.73)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $884 $344 $238 $255 $193 $96
Ratio of expenses to average net assets ............. 1.80%+ 1.80% 1.81% 1.75% 2.02% 1.78%+
Ratio of net income to average net assets ........... 3.62%+ 3.90% 4.10% 4.17% 4.23% 4.05%+
Portfolio turnover rate ............................. 2.55% 28.66% 3.99% 12.39% 14.70% 10.07%++
</TABLE>
- -------------------------
See footnotes on page 57.
46
<PAGE>
FINANCIAL HIGHLIGHTS
GEORGIA SERIES
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------
3/31/99 1998 1997 1996 1995 1994
--------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.38 $8.12 $7.87 $7.81 $7.48 $8.43
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.18 0.38 0.38 0.39 0.39 0.41
Net realized and unrealized gain (loss)
on investments .................................... (0.10) 0.29 0.28 0.11 0.43 (0.86)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.08 0.67 0.66 0.50 0.82 (0.45)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.18) (0.38) (0.38) (0.39) (0.39) (0.41)
Distributions from net realized capital gain ........ (0.05) (0.03) (0.03) (0.05) (0.10) (0.09)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.23) (0.41) (0.41) (0.44) (0.49) (0.50)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.23 $8.38 $8.12 $7.87 $7.81 $7.48
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.94% 8.44% 8.65% 6.56% 11.66% (5.52)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ............ $47,043 $48,424 $50,614 $50,995 $57,678 $61,466
Ratio of expenses to average net assets ............. 0.89%+ 0.89% 0.89% 0.83% 0.91% 0.73%
Ratio of net income to average net assets ........... 4.45%+ 4.57% 4.82% 4.94% 5.26% 5.21%
Portfolio turnover rate ............................. -- 2.92% 12.28% 16.24% 3.36% 19.34%
Without management fee waiver:*
Ratio of expenses to average net assets ............. 0.96% 0.93%
Ratio of net income to average net assets ........... 5.21% 5.01%
CLASS D
--------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30, 2/1/94**
---------------------------------------- TO
3/31/99 1998 1997 1996 1995 9/30/94
--------- ----- ----- ----- ----- ----------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.40 $8.13 $7.88 $7.82 $7.49 $8.33
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.15 0.30 0.31 0.32 0.32 0.22
Net realized and unrealized gain (loss)
on investments .................................... (0.10) 0.30 0.28 0.11 0.43 (0.84)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.05 0.60 0.59 0.43 0.75 (0.62)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.15) (0.30) (0.31) (0.32) (0.32) (0.22)
Distributions from net realized capital gain ........ (0.05) (0.03) (0.03) (0.05) (0.10) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.20) (0.33) (0.34) (0.37) (0.42) (0.22)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.25 $8.40 $8.13 $7.88 $7.82 $7.49
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.50% 7.59% 7.67% 5.60% 10.58% (7.57)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $2,678 $2,809 $2,640 $2,327 $2,079 $849
Ratio of expenses to average net assets ............. 1.79%+ 1.80% 1.79% 1.73% 1.90% 1.76%+
Ratio of net income to average net assets ........... 3.55%+ 3.66% 3.92% 4.03% 4.28% 4.28%+
Portfolio turnover rate ............................. -- 2.92% 12.28% 16.24% 3.36% 19.34%++
Without management fee waiver:*
Ratio of expenses to average net assets ............. 1.95% 1.90%+
Ratio of net 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
ENDED YEAR ENDED SEPTEMBER 30,
------------------------------------------------------
3/31/99 1998 1997 1996 1995 1994
--------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.51 $8.28 $8.16 $8.14 $7.94 $8.79
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.19 0.41 0.41 0.42 0.43 0.44
Net realized and unrealized gain (loss)
on investments .................................... (0.12) 0.24 0.23 0.08 0.34 (0.77)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.07 0.65 0.64 0.50 0.77 (0.33)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.19) (0.41) (0.41) (0.42) (0.43) (0.44)
Distributions from net realized capital gain ........ (0.11) (0.01) (0.11) (0.06) (0.14) (0.08)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.30) (0.42) (0.52) (0.48) (0.57) (0.52)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.28 $8.51 $8.28 $8.16 $8.14 $7.94
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.91% 8.08% 8.17% 6.32% 10.30% (3.83)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ............ $54,587 $56,308 $56,199 $57,264 $61,988 $61,441
Ratio of expenses to average net assets ............. 0.87%+ 0.88% 0.86% 0.82% 0.89% 0.87%
Ratio of net income to average net assets ........... 4.67%+ 4.86% 5.08% 5.15% 5.44% 5.31%
Portfolio turnover rate ............................. 5.31% 15.72% 16.08% 10.08% 4.82% 17.16%
CLASS D
--------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30, 2/1/94**
---------------------------------------- TO
3/31/99 1998 1997 1996 1995 9/30/94
--------- ----- ----- ----- ----- --------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.50 $8.27 $8.16 $8.14 $7.94 $8.73
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.16 0.33 0.34 0.35 0.35 0.24
Net realized and unrealized gain (loss)
on investments .................................... (0.11) 0.24 0.22 0.08 0.34 (0.79)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.05 0.57 0.56 0.43 0.69 (0.55)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.16) (0.33) (0.34) (0.35) (0.35) (0.24)
Distributions from net realized capital gain ........ (0.11) (0.01) (0.11) (0.06) (0.14) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.27) (0.34) (0.45) (0.41) (0.49) (0.24)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.28 $8.50 $8.27 $8.16 $8.14 $7.94
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.58% 7.11% 7.07% 5.37% 9.17% (6.45)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $762 $837 $509 $389 $465 $704
Ratio of expenses to average net assets ............. 1.78%+ 1.78% 1.76% 1.72% 1.91% 1.78%+
Ratio of net income to average net assets ........... 3.76%+ 3.96% 4.18% 4.25% 4.41% 4.33%+
Portfolio turnover rate ............................. 5.31% 15.72% 16.08% 10.08% 4.82% 17.16%++
</TABLE>
- -------------------------
See footnotes on page 57.
48
<PAGE>
FINANCIAL HIGHLIGHTS
MARYLAND SERIES
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------
3/31/99 1998 1997 1996 1995 1994
--------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.32 $8.14 $7.99 $7.96 $7.71 $8.64
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.19 0.40 0.40 0.40 0.41 0.42
Net realized and unrealized gain (loss)
on investments .................................... (0.08) 0.23 0.19 0.06 0.38 (0.76)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.11 0.63 0.59 0.46 0.79 (0.34)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.19) (0.40) (0.40) (0.40) (0.41) (0.42)
Distributions from net realized capital gain ........ (0.03) (0.05) (0.04) (0.03) (0.13) (0.17)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.22) (0.45) (0.44) (0.43) (0.54) (0.59)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.21 $8.32 $8.14 $7.99 $7.96 $7.71
====== ====== ====== ====== ====== ======
TOTAL RETURN: 1.31% 7.89% 7.64% 6.00% 10.90% (4.08)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $53,490 $54,891 $52,549 $54,041 $56,290 $57,263
Ratio of expenses to average net assets ............. 0.89%+ 0.89% 0.90% 0.84% 0.96% 0.92%
Ratio of net income to average net assets ........... 4.64%+ 4.82% 4.99% 5.05% 5.31% 5.17%
Portfolio turnover rate ............................. 0.06% 7.59% 14.79% 5.56% 3.63% 17.68%
CLASS D
--------------------------------------------------------------------
SIX MONTHS **2/1/94**
ENDED YEAR ENDED SEPTEMBER 30, TO
-------------------------------------------------------
3/31/99 1998 1997 1996 1995 9/30/94
--------- ----- ----- ----- ----- ----------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.33 $8.15 $7.99 $7.97 $7.72 $8.46
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.15 0.32 0.33 0.33 0.33 0.23
Net realized and unrealized gain (loss)
on investments .................................... (0.08) 0.23 0.20 0.05 0.38 (0.74)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.07 0.55 0.53 0.38 0.71 (0.51)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.15) (0.32) (0.33) (0.33) (0.33) (0.23)
Distributions from net realized capital gain ........ (0.03) (0.05) (0.04) (0.03) (0.13) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.18) (0.37) (0.37) (0.36) (0.46) (0.23)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.22 $8.33 $8.15 $7.99 $7.97 $7.72
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.86% 6.91% 6.80% 4.91% 9.75% (6.21)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $3,052 $3,128 $2,063 $2,047 $630 $424
RATIO OF EXPENSES TO AVERAGE NET ASSETS ............. 1.79%+ 1.80% 1.81% 1.72% 2.02% 1.80%+
Ratio of net income to average net assets ........... 3.74%+ 3.91% 4.08% 4.14% 4.27% 4.26%+
Portfolio turnover rate ............................. 0.06% 7.59% 14.79% 5.56% 3.63% 17.68%++
</TABLE>
- -------------------------
See footnotes on page 57.
49
<PAGE>
FINANCIAL HIGHLIGHTS
MASSACHUSETTS SERIES
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
------------------------------------------------------
3/31/99 1998 1997 1996 1995 1994
--------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.27 $7.99 $7.85 $7.91 $7.66 $8.54
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.18 0.38 0.40 0.41 0.42 0.44
Net realized and unrealized gain (loss)
on investments .................................... (0.14) 0.37 0.22 0.05 0.28 (0.67)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.04 0.75 0.62 0.46 0.70 (0.23)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.18) (0.38) (0.40) (0.41) (0.42) (0.44)
Distributions from net realized capital gain ........ (0.05) (0.09) (0.08) (0.11) (0.03) (0.21)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.23) (0.47) (0.48) (0.52) (0.45) (0.65)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.08 $8.27 $7.99 $7.85 $7.91 $7.66
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.51% 9.80% 8.11% 5.97% 9.58% (2.94)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ............ $103,400 $109,328 $110,011 $109,872 $115,711 $120,149
Ratio of expenses to average net assets ............. 0.83%+ 0.80% 0.84% 0.80% 0.86% 0.85%
Ratio of net income to average net assets ........... 4.47%+ 4.72% 5.06% 5.24% 5.51% 5.46%
Portfolio turnover rate ............................. 4.45% 13.41% 29.26% 26.30% 16.68% 12.44%
CLASS D
--------------------------------------------------------------------
SIX MONTHS 2/1/94**
ENDED YEAR ENDED SEPTEMBER 30, TO
---------------------------------------- TO
3/31/99 1998 1997 1996 1995 9/30/94
--------- ----- ----- ----- ----- ----------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.26 $7.99 $7.84 $7.90 $7.66 $8.33
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.14 0.31 0.33 0.34 0.34 0.24
Net realized and unrealized gain (loss)
on investments .................................... (0.13) 0.36 0.23 0.05 0.27 (0.67)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.01 0.67 0.56 0.39 0.61 (0.43)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.14) (0.31) (0.33) (0.34) (0.34) (0.24)
Distributions from net realized capital gain ........ (0.05) (0.09) (0.08) (0.11) (0.03) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.19) (0.40) (0.41) (0.45) (0.37) (0.24)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.08 $8.26 $7.99 $7.84 $7.90 $7.66
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.18% 8.68% 7.29% 5.01% 8.33% (5.34)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $2,374 $1,468 $1,245 $1,405 $809 $1,099
Ratio of expenses to average net assets ............. 1.73%+ 1.71% 1.74% 1.70% 1.95% 1.78%+
Ratio of net income to average net assets ........... 3.57%+ 3.81% 4.16% 4.32% 4.47% 4.52%+
Portfolio turnover rate ............................. 4.45% 13.41% 29.26% 26.30% 16.68% 12.44%++
</TABLE>
- -------------------------
See footnotes on page 57.
50
<PAGE>
FINANCIAL HIGHLIGHTS
MICHIGAN SERIES
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------
3/31/99 1998 1997 1996 1995 1994
--------- ----- ----- ----- ----- -----
PER SHARE DATA:
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.83 $8.60 $8.46 $8.54 $8.28 $9.08
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.20 0.41 0.43 0.45 0.46 0.46
Net realized and unrealized gain (loss)
on investments .................................... (0.12) 0.30 0.23 0.06 0.30 (0.71)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.08 0.71 0.66 0.51 0.76 (0.25)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.20) (0.41) (0.43) (0.45) (0.46) (0.46)
Distributions from net realized capital gain ........ (0.16) (0.07) (0.09) (0.14) (0.04) (0.09)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.36) (0.48) (0.52) (0.59) (0.50) (0.55)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.55 $8.83 $8.60 $8.46 $8.54 $8.28
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.90% 8.63% 8.16% 6.16% 9.56% (2.90)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $138,558 $144,161 $143,370 $148,178 $151,589 $151,095
Ratio of expenses to average net assets ............. 0.81%+ 0.79% 0.81% 0.78% 0.87% 0.84%
Ratio of net income to average net assets ........... 4.65%+ 4.78% 5.13% 5.29% 5.50% 5.32%
Portfolio turnover rate ............................. 3.62% 23.60% 10.98% 19.62% 20.48% 10.06%
CLASS D
--------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30, 2/1/94**
---------------------------------------- TO
3/31/99 1998 1997 1996 1995 9/30/94
--------- ----- ----- ----- ----- ----------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.82 $8.59 $8.45 $8.54 $8.28 $9.01
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.16 0.33 0.36 0.37 0.37 0.25
Net realized and unrealized gain (loss)
on investments .................................... (0.12) 0.30 0.23 0.05 0.30 (0.73)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.04 0.63 0.59 0.42 0.67 (0.48)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.16) (0.33) (0.36) (0.37) (0.37) (0.25)
Distributions from net realized capital gain ........ (0.16) (0.07) (0.09) (0.14) (0.04) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.32) (0.40) (0.45) (0.51) (0.41) (0.25)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.54 $8.82 $8.59 $8.45 $8.54 $8.28
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.45% 7.66% 7.19% 5.09% 8.36% (5.47)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $2,642 $1,841 $1,845 $1,486 $1,172 $671
RATIO OF EXPENSES TO AVERAGE NET ASSETS ............. 1.71%+ 1.70% 1.71% 1.68% 2.01% 1.75%+
Ratio of net income to average net assets ........... 3.75%+ 3.87% 4.23% 4.39% 4.40% 4.40%+
Portfolio turnover rate ............................. 3.62% 23.60% 10.98% 19.62% 20.48% 10.06%++
</TABLE>
- -------------------------
See footnotes on page 57.
51
<PAGE>
FINANCIAL HIGHLIGHTS
MINNESOTA SERIES
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
------------------------------------------------------
3/31/99 1998 1997 1996 1995 1994
--------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $7.98 $7.79 $7.68 $7.82 $7.72 $8.28
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.18 0.38 0.40 0.42 0.45 0.45
Net realized and unrealized gain (loss)
on investments .................................... (0.08) 0.20 0.11 (0.12) 0.11 (0.44)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.10 0.58 0.51 0.30 0.56 0.01
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.18) (0.38) (0.40) (0.42) (0.45) (0.45)
Distributions from net realized capital gain ........ (0.10) (0.01) -- (0.02) (0.01) (0.12)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.28) (0.39) (0.40) (0.44) (0.46) (0.57)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $7.80 $7.98 $7.79 $7.68 $7.82 $7.72
====== ====== ====== ====== ====== ======
TOTAL RETURN: 1.27% 7.68% 6.85% 3.99% 7.61% 0.12%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $118,743 $121,374 $121,674 $126,173 $132,716 $134,990
Ratio of expenses to average net assets ............. 0.84%+ 0.81% 0.85% 0.81% 0.87% 0.85%
Ratio of net income to average net assets ........... 4.64%+ 4.87% 5.21% 5.47% 5.89% 5.70%
Portfolio turnover rate ............................. 4.65% 21.86% 6.88% 26.89% 5.57% 3.30%
CLASS D
--------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30, 2/1/94**
---------------------------------------- TO
3/31/99 1998 1997 1996 1995 9/30/94
--------- ----- ----- ----- ----- ----------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $7.98 $7.79 $7.68 $7.82 $7.73 $8.22
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.15 0.31 0.33 0.35 0.38 0.25
Net realized and unrealized gain (loss)
on investments .................................... (0.08) 0.20 0.11 (0.12) 0.10 (0.49)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.07 0.51 0.44 0.23 0.48 (0.24)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.15) (0.31) (0.33) (0.35) (0.38) (0.25)
Distributions from net realized capital gain ........ (0.10) (0.01) -- (0.02) (0.01) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.25) (0.32) (0.33) (0.37) (0.39) (0.25)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $7.80 $7.98 $7.79 $7.68 $7.82 $7.73
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.82% 6.71% 5.89% 3.06% 6.45% (3.08)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $2,113 $2,103 $1,799 $2,036 $2,237 $1,649
Ratio of expenses to average net assets ............. 1.74%+ 1.72% 1.75% 1.71% 1.85% 1.74%+
Ratio of net income to average net assets ........... 3.74%+ 3.96% 4.31% 4.57% 4.92% 4.68%+
Portfolio turnover rate ............................. 4.65% 21.86% 6.88% 26.89% 5.57% 3.30%++
</TABLE>
- -------------------------
See footnotes on page 57.
52
<PAGE>
FINANCIAL HIGHLIGHTS
MISSOURI SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
----------------------------------------------------
3/31/99 1998 1997 1996 1995 1994
--------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.03 $7.82 $7.71 $7.70 $7.41 $8.31
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.17 0.36 0.38 0.39 0.40 0.40
Net realized and unrealized gain (loss)
on investments .................................... (0.14) 0.28 0.19 0.08 0.36 (0.79)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.03 0.64 0.57 0.47 0.76 (0.39)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.17) (0.36) (0.38) (0.39) (0.40) (0.40)
Distributions from net realized capital gain ........ (0.12) (0.07) (0.08) (0.07) (0.07) (0.11)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.29) (0.43) (0.46) (0.46) (0.47) (0.51)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $7.77 $8.03 $7.82 $7.71 $7.70 $7.41
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.38% 8.41% 7.70% 6.27% 10.67% (4.85)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $48,944 $49,949 $52,766 $49,941 $51,169 $52,621
Ratio of expenses to average net assets ............. 0.90%+ 0.89% 0.89% 0.86% 0.88% 0.74%
Ratio of net income to average net assets ........... 4.39%+ 4.59% 4.93% 5.03% 5.31% 5.18%
Portfolio turnover rate ............................. 1.49% 21.26% 6.47% 8.04% 3.88% 14.33%
Without management fee waiver:*
Ratio of expenses to average net assets ............. 0.93% 0.88%
Ratio of net income to average net assets ........... 5.26% 5.04%
CLASS D
--------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30, 2/1/94*
---------------------------------------- TO
3/31/99 1998 1997 1996 1995 9/30/94
--------- ----- ----- ----- ----- ----------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.03 $7.82 $7.72 $7.70 $7.41 $8.20
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.14 0.29 0.31 0.32 0.32 0.22
Net realized and unrealized gain (loss)
on investments .................................... (0.14) 0.28 0.18 0.09 0.36 (0.79)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... -- 0.57 0.49 0.41 0.68 (0.57)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.14) (0.29) (0.31) (0.32) (0.32) (0.22)
Distributions from net realized capital gain ........ (0.12) (0.07) (0.08) (0.07) (0.07) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.26) (0.36) (0.39) (0.39) (0.39) (0.22)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $7.77 $8.03 $7.82 $7.72 $7.70 $7.41
====== ====== ====== ====== ====== ======
TOTAL RETURN: (0.07)% 7.45% 6.60% 5.46% 9.49% (7.16)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $626 $418 $474 $565 $515 $350
Ratio of expenses to average net assets ............. 1.80%+ 1.79% 1.80% 1.76% 1.98% 1.70%+
Ratio of net income to average net assets ........... 3.49%+ 3.69% 4.02% 4.13% 4.23% 4.27%+
Portfolio turnover rate ............................. 1.49% 21.26% 6.47% 8.04% 3.88% 14.33%++
Without management fee waiver:*
Ratio of expenses to average net assets ............. 2.03% 1.80%+
Ratio of net 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
ENDED YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------
3/31/99 1998 1997 1996 1995 1994
--------- ----- ----- ----- ----- -----
PER SHARE DATA:
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.60 $8.28 $7.98 $7.86 $7.67 $8.75
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.19 0.40 0.41 0.42 0.42 0.43
Net realized and unrealized gain (loss)
on investments .................................... (0.15) 0.40 0.32 0.12 0.36 (0.88)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.04 0.80 0.73 0.54 0.78 (0.45)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.19) (0.40) (0.41) (0.42) (0.42) (0.43)
Distributions from net realized capital gain ........ (0.21) (0.08) (0.02) -- (0.17) (0.20)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.40) (0.48) (0.43) (0.42) (0.59) (0.63)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.24 $8.60 $8.28 $7.98 $7.86 $7.67
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.42% 10.02% 9.45% 6.97% 10.93% (5.37)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $84,971 $84,822 $83,528 $82,719 $83,980 $90,914
Ratio of expenses to average net assets ............. 0.82%+ 0.81% 0.82% 0.77% 0.88% 0.87%
Ratio of net income to average net assets ........... 4.51%+ 4.74% 5.09% 5.24% 5.52% 5.31%
Portfolio turnover rate ............................. 4.57% 39.85% 23.83% 25.88% 34.05% 28.19%
CLASS D
-------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30, 2/1/94**
---------------------------------------- TO
3/31/99 1998 1997 1996 1995 9/30/94
--------- ----- ----- ----- ----- ----------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.60 $8.29 $7.98 $7.87 $7.67 $8.55
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.15 0.32 0.34 0.34 0.34 0.23
Net realized and unrealized gain (loss)
on investments .................................... (0.14) 0.39 0.33 0.11 0.37 (0.88)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.01 0.71 0.67 0.45 0.71 (0.65)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.15) (0.32) (0.34) (0.34) (0.34) (0.23)
Distributions from net realized capital gain ........ (0.21) (0.08) (0.02) -- (0.17) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.36) (0.40) (0.36) (0.34) (0.51) (0.23)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.25 $8.60 $8.29 $7.98 $7.87 $7.67
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.09% 8.88% 8.60% 5.86% 9.87% (7.73)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $3,297 $2,182 $1,572 $1,152 $885 $476
Ratio of expenses to average net assets ............. 1.72%+ 1.72% 1.73% 1.68% 1.96% 1.81%+
Ratio of net income to average net assets ........... 3.61%+ 3.83% 4.18% 4.33% 4.42% 4.39%+
Portfolio turnover rate ............................. 4.57% 39.85% 23.83% 25.88% 34.05% 28.19%++
</TABLE>
- -------------------------
See footnotes on page 57.
54
<PAGE>
FINANCIAL HIGHLIGHTS
OHIO SERIES
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
------------------------------------------------------
3/31/99 1998 1997 1996 1995 1994
--------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.37 $8.19 $8.09 $8.11 $7.90 $8.77
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.19 0.40 0.42 0.43 0.44 0.44
Net realized and unrealized gain (loss)
on investments .................................... (0.13) 0.29 0.17 0.02 0.28 (0.70)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.06 0.69 0.59 0.45 0.72 (0.26)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.19) (0.40) (0.42) (0.43) (0.44) (0.44)
Distributions from net realized capital gain ........ (0.13) (0.11) (0.07) (0.04) (0.07) (0.17)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.32) (0.51) (0.49) (0.47) (0.51) (0.61)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.11 $8.37 $8.19 $8.09 $8.11 $7.90
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.80% 8.77% 7.54% 5.68% 9.59% (3.08)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $149,197 $153,126 $154,419 $162,243 $170,191 $171,469
Ratio of expenses to average net assets ............. 0.81%+ 0.78% 0.81% 0.77% 0.84% 0.84%
Ratio of net income to average net assets ........... 4.73%+ 4.92% 5.19% 5.32% 5.56% 5.34%
Portfolio turnover rate ............................. 0.68% 24.74% 11.76% 12.90% 2.96% 9.37%
CLASS D
--------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30, 2/1/94**
---------------------------------------- TO
3/31/99 1998 1997 1996 1995 9/30/94
--------- ----- ----- ----- ----- ----------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.41 $8.23 $8.13 $8.15 $7.92 $8.61
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.16 0.33 0.35 0.36 0.36 0.24
Net realized and unrealized gain (loss)
on investments .................................... (0.13) 0.29 0.17 0.02 0.30 (0.69)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.03 0.62 0.52 0.38 0.66 (0.45)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.16) (0.33) (0.35) (0.36) (0.36) (0.24)
Distributions from net realized capital gain ........ (0.13) (0.11) (0.07) (0.04) (0.07) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.29) (0.44) (0.42) (0.40) (0.43) (0.24)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.15 $8.41 $8.23 $8.13 $8.15 $7.92
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.36% 7.78% 6.57% 4.74% 8.67% (5.36)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $1,649 $1,103 $1,160 $1,011 $660 $324
Ratio of expenses to average net assets ............. 1.71%+ 1.69% 1.71% 1.67% 1.93% 1.78%+
Ratio of net income to average net assets ........... 3.83%+ 4.01% 4.29% 4.42% 4.48% 4.41%+
Portfolio turnover rate ............................. 0.68% 24.74% 11.76% 12.90% 2.96% 9.37%++
</TABLE>
- -------------------------
See footnotes on page 57.
55
<PAGE>
FINANCIAL HIGHLIGHTS
OREGON SERIES
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
----------------------------------------------------
3/31/99 1998 1997 1996 1995 1994
--------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.05 $7.87 $7.65 $7.66 $7.43 $8.08
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.17 0.36 0.38 0.40 0.40 0.40
Net realized and unrealized gain (loss)
on investments .................................... (0.08) 0.28 0.26 -- 0.25 (0.59)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.09 0.64 0.64 0.40 0.65 (0.19)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.17) (0.36) (0.38) (0.40) (0.40) (0.40)
Distributions from net realized capital gain ........ (0.05) (0.10) (0.04) (0.01) (0.02) (0.06)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.22) (0.46) (0.42) (0.41) (0.42) (0.46)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $7.92 $8.05 $7.87 $7.65 $7.66 $7.43
====== ====== ====== ====== ====== ======
TOTAL RETURN: 1.18% 8.48% 8.60% 5.27% 9.05% (2.38)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $57,957 $57,601 $55,239 $57,345 $59,549 $59,884
Ratio of expenses to average net assets ............. 0.88%+ 0.88% 0.90% 0.86% 0.86% 0.78%
Ratio of net income to average net assets ........... 4.41%+ 4.60% 4.88% 5.18% 5.40% 5.20%
Portfolio turnover rate ............................. 6.76% 12.62% 19.46% 28.65% 2.47% 9.43%
Without management fee waiver:*
Ratio of expenses to average net assets ............. 0.91% 0.89%
Ratio of net income to average net assets ........... 5.35% 5.09%
CLASS D
------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30, 2/1/94**
---------------------------------------- TO
3/31/99 1998 1997 1996 1995 9/30/94
--------- ----- ----- ----- ----- ----------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.04 $7.87 $7.64 $7.65 $7.43 $8.02
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.14 0.29 0.31 0.33 0.33 0.22
Net realized and unrealized gain (loss)
on investments .................................... (0.08) 0.27 0.27 .-- 0.24 (0.59)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.06 0.56 0.58 0.33 0.57 (0.37)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.14) (0.29) (0.31) (0.33) (0.33) (0.22)
Distributions from net realized capital gain ........ (0.05) (0.10) (0.04) (0.01) (0.02) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.19) (0.39) (0.35) (0.34) (0.35) (0.22)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $7.91 $8.04 $7.87 $7.64 $7.65 $7.43
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.73% 7.37% 7.77% 4.33% 7.86% (4.76)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $2,778 $2,650 $1,678 $1,540 $1,495 $843
Ratio of expenses to average net assets ............. 1.78%+ 1.79% 1.80% 1.76% 1.83% 1.72%+
Ratio of net income to average net assets ........... 3.51%+ 3.69% 3.98% 4.28% 4.41% 4.32%+
Portfolio turnover rate ............................. 6.76% 12.62% 19.46% 28.65% 2.47% 9.43%++
Without management fee waiver:*
Ratio of expenses to average net assets ............. 1.88% 1.82%+
Ratio of net 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
ENDED YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------------
3/31/99 1998 1997 1996 1995 1994
--------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.38 $8.16 $8.07 $7.97 $7.61 $8.52
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.19 0.39 0.40 0.41 0.41 0.41
Net realized and unrealized gain (loss)
on investments .................................... (0.13) 0.29 0.22 0.12 0.37 (0.79)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.06 0.68 0.62 0.53 0.78 (0.38)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.19) (0.39) (0.40) (0.41) (0.41) (0.41)
Distributions from net realized capital gain ........ (0.07) (0.07) (0.13) (0.02) (0.01) (0.12)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.26) (0.46) (0.53) (0.43) (0.42) (0.53)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.18 $8.38 $8.16 $8.07 $7.97 $7.61
====== ====== ====== ====== ====== ======
TOTAL RETURN: 0.63% 8.66% 7.99% 6.82% 10.69% (4.61)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $104,543 $106,328 $101,018 $108,163 $112,421 $115,133
Ratio of expenses to average net assets ............. 0.83%+ 0.80% 0.84% 0.80% 0.88% 0.83%
Ratio of net income to average net assets ........... 4.53%+ 4.74% 5.04% 5.15% 5.38% 5.12%
Portfolio turnover rate ............................. 1.50% 16.63% -- 20.66% 4.13% 1.81%
CLASS D
---------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30, 2/1/94**
---------------------------------------- TO
3/31/99 1998 1997 1996 1995 9/30/94
--------- ----- ----- ----- ----- ----------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $8.38 $8.16 $8.06 $7.97 $7.61 $8.42
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................... 0.15 0.31 0.33 0.34 0.34 0.22
Net realized and unrealized gain (loss)
on investments .................................... (0.13) 0.29 0.23 0.11 0.37 (0.81)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 0.02 0.60 0.56 0.45 0.71 (0.59)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ (0.15) (0.31) (0.33) (0.34) (0.34) (0.22)
Distributions from net realized capital gain ........ (0.07) (0.07) (0.13) (0.02) (0.01) .--
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.22) (0.38) (0.46) (0.36) (0.35) (0.22)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $8.18 $8.38 $8.16 $8.06 $7.97 $7.61
====== ====== ====== ====== ===== ======
TOTAL RETURN: 0.18% 7.68% 7.15% 5.73% 9.63% (7.14)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s omitted) ............ $6,481 $5,594 $3,663 $2,714 $1,704 $1,478
Ratio of expenses to average net assets ............. 1.73%+ 1.71% 1.75% 1.70% 1.85% 1.74%+
Ratio of net income to average net assets ........... 3.63%+ 3.83% 4.13% 4.25% 4.40% 4.29%+
Portfolio turnover rate ............................. 1.50% 16.63% -- 20.66% 4.13% 1.81%++
</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 Seligman Municipal Fund Series, Inc.
(comprising, respectively, the National, Colorado, Georgia, Louisiana, Maryland,
Massachusetts, Michigan, Minnesota, Missouri, New York, Ohio, Oregon, and South
Carolina Series) as of March 31, 1999, the related statements of operations for
the six months then ended and of changes in net assets for the six months then
ended and for the year ended September 30, 1998, 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, 1999 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 referred to
above present fairly, in all material respects, the financial position of each
of the respective Series constituting the Seligman Municipal Fund Series, Inc.
as of March 31, 1999, the results of their operations, the changes in their net
assets, and their financial highlights for the respective stated periods, in
conformity with generally accepted accounting principles.
/s/Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
New York, New York
April 30, 1999
58
<PAGE>
BOARD OF DIRECTORS
JOHN R. GALVIN 2, 4
DEAN, Fletcher School of Law and Diplomacy
at Tufts University
DIRECTOR, Raytheon Company
ALICE S. ILCHMAN 3, 4
TRUSTEE, Committee for Economic Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2, 4
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
JOHN E. MEROW 2, 4
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Industries, Inc.
DIRECTOR, New York Presbyterian Hospital
BETSY S. MICHEL 2, 4
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, 4
RETIRED PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN 3, 4
Director, KEYSPAN ENERGY CORPORATION
TRUSTEE, Committee for Economic Development
DIRECTOR, Public Broadcasting Service
RICHARD R. SCHMALTZ 1
MANAGING DIRECTOR, DIRECTOR OF INVESTMENTS,
J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER 3, 4
RETIRED VICE PRESIDENT, Pfizer Inc.
JAMES N. WHITSON 2, 4
DIRECTOR AND CONSULTANT, Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, CommScope, Inc.
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
DIRECTOR, ICI Mutual Insurance Company
DIRECTOR EMERITUS
FRED E. BROWN
DIRECTOR AND CONSULTANT,
J. &W. Seligman &Co. Incorporated
- ----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
59
<PAGE>
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 Advisors, 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 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.
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 CHARGE (CDSC) -- Depending on the class of shares
owned, a fee charged by a mutual fund when shares are sold back to the fund (the
CDSC 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 or net asset value.
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 -- 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, how shares are bought and sold, fund fees and other
charges, and the fund's financial highlights.
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 more detailed
information about an investment company 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 1998 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 ADVISORS, INC.
AN AFFILIATE OF
[LOGO OMITTED]
J. & W. SELIGMAN & CO.
Incorporated
Established 1864
100 PARK AVENUE, NEW YORK, NY 10017
TEA3 3/99 [GRAPHIC OMITTED] Printed on Recycled Paper
