Lord Abbett
National Tax-Free Income Fund
New York Tax-Free Income Fund
Texas Tax-Free Income Fund
New Jersey Tax-Free Income Fund
Connecticut Tax-Free Income Fund
Missouri Tax-Free Income Fund
Hawaii Tax-Free Income Fund
Washington Tax-Free Income Fund
Minnesota Tax-Free Income Fund
California Tax-Free Income Fund
Semi-Annual Report For the Six Months Ended March 31, 1999
[GRAPHIC OMITTED]
Funds that seek to provide attractive
levels of tax-advantaged income
[LOGO](R)
<PAGE>
Report to Shareholders
For the Six Months Ended March 31,1999
[PHOTO OMITTED]
/s/ Robert S. Dow
- ----------------------------
Robert S. Dow
Chairman
April 16, 1999
Lord Abbett Tax-Free Income Fund's focus on high-quality municipal bonds helped
our individual portfolios to provide shareholders with important benefits during
the period.
The Lord Abbett Tax-Free Income Funds completed the first half of their fiscal
year on March 31, 1999 with aggregate net assets of $1.9 billion. During the
period, many municipal bonds provided yields close to those of taxable bonds --
making the tax advantages of municipal bonds a hard-to-resist bonus. Please see
the inside front cover of this report for net assets and performance of each
Fund portfolio.
What Happened in the Markets
The "flight to quality" that characterized the third quarter of 1998 subsided
during the fourth quarter and then reversed during the first three months of
1999. Consequently, municipal bonds outperformed Treasury bonds. The yield on
the 30-year Treasury bond advanced to 5.63% from 5.09% at the end of 1998, an
increase of 54 basis points. In contrast, the yield on the Bond Buyer 40 Muni
Bond Index* ended the first quarter of 1999 at 5.23%, versus 5.16% at the close
of 1998, an increase of only seven basis points. This means that the ratio of
long municipal yields compared to 30-year Treasury yields dropped from 105% at
the end of the year to 92% at the end of March.
The reasons for municipal outperformance were threefold. First, a drop of 30% in
municipal issuance versus 1998 served to create a beneficial supply/demand
dynamic. Second, as word of municipal bonds' cheapness spread, more and more
non-traditional buyers of municipal bonds appeared. Third, there has been some
asset reallocation from equities into bonds.
Key Fund Investment Strategies
Lord Abbett Tax-Free Income Fund's focus on high-quality municipal bonds helped
our individual portfolios to provide shareholders with important benefits during
the period. Specifically, high-quality municipal bonds held up better than
corporate bond yields during last autumn's "flight to quality" -- a trend which
translated into less volatility and downward price movement on a relative basis
for our municipal bond portfolios.
On a watchful note, we remain wary of BBB paper (the low end of the "Investment
Grade" spectrum) because of the still-low incremental yield that these bonds
offer over insured and other high-quality bonds. In fact, with bond insurers
exercising more scrutiny as to what they will insure, we expect BBB credits to
experience some pressure. In the healthcare sector, for example, the spreads
between highand low-quality investment-grade bonds have already begun to widen.
We believe that our strategy of closely monitoring BBB credits will enhance the
total return of the Fund over time.
What May Be Ahead for Municipals
Although energy prices rose during the first quarter of 1999, we believe that
powerful competitive forces in the economy will help to limit consumer price
inflation. Given this backdrop and the relative cheapness in municipal bonds, we
believe that high-quality municipal bonds offer a superior investment
alternative to taxable equivalents.
Thank you for including Lord Abbett Tax-Free Income Fund in your investment
portfolio. We look forward to helping you reach your financial goals in the
years to come.
* The Bond Buyer 40 Muni Bond Index is an index of 40 tax-exempt municipal
bonds. The index is unmanaged, does not reflect the deduction of fees or
expenses and is not available for direct investment. Unlike Treasury
securities, investments in municipal bonds are neither insured nor
guaranteed by the U.S. government.
<PAGE>
Fund Facts
All Funds managed by Lord Abbett emphasize high quality, call protection and
total return potential. Portfolio quality shown as of 3/31/99.
Lord Abbett's Focus on Quality
National Tax-Free Income Fund
[GRAPHIC OMITTED]
[The following table was depicted as a pie chart in the printed material.]
AAA 63.8%
AA 18.3%
A 13.7%
BBB(1) 4.2%
New York Tax-Free Income Fund
[GRAPHIC OMITTED]
[The following table was depicted as a pie chart in the printed material.]
AAA 63.0%
AA 8.5%
A 14.3%
BBB(1) 14.2%
Connecticut Tax-Free Income Fund
[GRAPHIC OMITTED]
[The following table was depicted as a pie chart in the printed material.]
AAA 52.3%
AA 17.9%
A 9.8%
BBB(1) 20.0%
Missouri Tax-Free Income Fund
[GRAPHIC OMITTED]
[The following table was depicted as a pie chart in the printed material.]
AAA 69.9%
AA 20.2%
A 2.3%
BBB(1) 7.6%
Hawaii Tax-Free Income Fund
[GRAPHIC OMITTED]
[The following table was depicted as a pie chart in the printed material.]
AAA 72.0%
AA 7.7%
A 15.1%
BBB(1) 5.2%
Texas Tax-Free Income Fund
[GRAPHIC OMITTED]
[The following table was depicted as a pie chart in the printed material.]
AAA 50.4%
AA 25.8%
A 18.0%
BBB(1) 5.8%
New Jersey Tax-Free Income Fund
[GRAPHIC OMITTED]
[The following table was depicted as a pie chart in the printed material.]
AAA 79.3%
AA 2.1%
A 14.6%
BBB(1) 4.0%
Washington Tax-Free Income Fund
[GRAPHIC OMITTED]
[The following table was depicted as a pie chart in the printed material.]
AAA 62.3%
AA 27.8%
A 9.2%
BBB(1) 0.7%
Minnesota Tax-Free Income Fund
[GRAPHIC OMITTED]
[The following table was depicted as a pie chart in the printed material.]
AAA 47.5%
AA 40.7%
A 9.2%
BBB(1) 2.6%
California Tax-Free Income Fund
[GRAPHIC OMITTED]
[The following table was depicted as a pie chart in the printed material.]
AAA 81.7%
AA 8.2%
A 8.3%
BBB(1) 1.8%
Lord Abbett's Tax-Free Record and SEC-Required Information as of 3/31/99 for
Class A Shares
<TABLE>
<CAPTION>
National New York Texas
Tax-Free Income Fund(2) Tax-Free Income Fund(2) Tax-Free Income Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Date of Inception 4/2/84 4/2/84 1/20/87
Net Assets (in millions) $ 598.8 $ 277.3 $ 91.7
Dividend Distribution Rate at Net Asset Value(5) 4.85% 5.01% 5.10%
- ------------------------------------------------------------------------------------------------------------------------------------
Average Annual Rate of Total Return(6) at Net Asset Value:
1 Year 6.34% 5.80% 5.87%
10 Years or Life of Series 7.92% 7.44% 8.17%
30-Day SEC Yield(8) 4.01% 4.45% 3.77%
- ------------------------------------------------------------------------------------------------------------------------------------
Average Annual Rate of Total Return(6) at the Class A
Share Maximum Offering Price:
1 Year 1.30% 0.70% 0.80%
5 Years 6.20% 5.09% 6.33%
10 Years or Life of Series 7.40% 6.92% 7.64%
<CAPTION>
New Jersey Connecticut Missouri
Tax-Free Income Fund Tax-Free Income Fund Tax-Free Income Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Date of Inception 1/2/91 4/1/91 5/31/91
Net Assets (in millions) $ 184.3 $ 120.5 $ 136.8
Dividend Distribution Rate at Net Asset Value(5) 4.93% 4.98% 4.76%
- ------------------------------------------------------------------------------------------------------------------------------------
Average Annual Rate of Total Return(6) at Net Asset Value:
1 Year 5.72% 6.01% 5.28%
10 Years or Life of Series 7.96%(7) 7.53%(7) 7.31%(7)
30-Day SEC Yield(8) 4.03% 4.40% 4.15%
- ------------------------------------------------------------------------------------------------------------------------------------
Average Annual Rate of Total Return(6) at the Class A
Share Maximum Offering Price:
1 Year 0.70% 1.00% 0.40%
5 Years 6.06% 5.82% 5.42%
10 Years or Life of Series 7.32%(7) 6.87%(7) 6.64%(7)
<CAPTION>
Hawaii Washington
Tax-Free Income Fund Tax-Free Income Fund
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Date of Inception 10/28/91 4/15/92
Net Assets (in millions) $ 77.0 $ 60.5
Dividend Distribution Rate at Net Asset Value(5) 4.64% 4.75%
- -------------------------------------------------------------------------------------------------------------
Average Annual Rate of Total Return(6) at Net Asset Value:
1 Year 5.36% 5.87%
10 Years or Life of Series 7.01%(7) 7.53%(7)
30-Day SEC Yield(8) 4.22% 3.99%
- -------------------------------------------------------------------------------------------------------------
Average Annual Rate of Total Return(6) at the Class A
Share Maximum Offering Price:
1 Year 0.20% 0.90%
5 Years 5.84% 6.53%
10 Years or Life of Series 6.31%(7) 6.77%(7)
<CAPTION>
Minnesota California
Tax-Free Income Fund(3) Tax-Free Income Fund(2)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Date of Inception 12/27/94 9/3/85(4)
Net Assets (in millions) $ 17.8 $ 238.8
Dividend Distribution Rate at Net Asset Value(5) 5.14% 4.71%
- --------------------------------------------------------------------------------------------------------------
Average Annual Rate of Total Return(6) at Net Asset Value:
1 Year 6.31% 5.99%
10 Years or Life of Series 7.86%(7)
7.62%
30-Day SEC Yield(8) 4.81% 4.18%
- --------------------------------------------------------------------------------------------------------------
Average Annual Rate of Total Return(6) at the Class A
Share Maximum Offering Price:
1 Year 1.40% 0.90%
5 Years -- 5.37%
10 Years or Life of Series 6.63%(7) 7.10%
</TABLE>
(1) Includes holdings which are not rated by independent ratings services but
are, in Lord Abbett's opinion, of comparable quality.
(2) For specific Class share performance, please see each Fund's Financial
Highlights (pages 30, 31, and 36).
(3) Returns and yield for Minnesota Tax-Free Income Fund reflect a voluntary
waiver of Lord, Abbett & Co.'s management fee. Absent of this waiver, the
Fund's returns and yield would have been lower. Lord, Abbett & Co. may
revise or terminate this decision at any time.
(4) Date shown is inception of a substantially similar predecessor fund that
became the Fund effective 7/15/96.
(5) Dividend Distribution Rate at Net Asset Value: The dividend distribution
rate is calculated by dividing the dividends of a class derived by net
investment income during a stated period by the net asset value on the
last day of the period.
(6) Total return is the percent change in value with dividends and capital
gains reinvested. In the event a portfolio invests in private activity
bonds, the interest income derived therefrom may increase the Alternative
Minimum Tax liability only for shareholders subject to that tax. In the
event a portfolio does not invest entirely in municipal bonds, federal,
state and/or local taxes (as applicable) may be applicable to interest
income of such Fund.
(7) Since inception.
(8) 30-Day SEC Yield: The 30-day SEC yield for each class of shares is
calculated by dividing annualized net investment income per share during a
recent 30-day period by the maximum offering price per share on the last
day of that period.
The results quoted in this summary represent Class A share past
performance, which is no indication of future results. The investment
return and principal value of an investment in the Series will fluctuate
so that shares, on any given day or when redeemed, may be worth more or
less than their original cost.
The respective SEC-required uniformly computed average annual rates of
total return are at the Class A share maximum sales charge of 4.75%.
Effective May 3, 1999, the maximum sales charge was reduced to 3.25%.
Lord Abbett's National, California and New York Tax-Free Income Funds also
offer other classes of shares having varying fees and expenses.
See Important Information on page 1.
<PAGE>
A Note About Year 2000 Matters
As you probably know, the Fund depends on the proper functioning of computer
systems for most, if not all, aspects of its operations. Many computer systems
now in use cannot distinguish between the year 2000 (Y2K) and the year 1900, an
inability that could disrupt the services provided to the Fund.
Lord Abbett, Lord Abbett Distributor LLC, the Fund's transfer agent, the Fund's
custodian and other providers of services critical to the Fund have advised the
Fund that they have been actively working on changes to their computer systems
to prepare for the Year 2000 and expect that their systems, and those of their
external service providers, will be adapted in time. Although the Y2K issue is
unprecedented and the process of Y2K preparedness evaluation and systems
remediation is an ongoing one, we presently believe that there will be no
material effect on the Fund and its financial statements.
Important Information
Each portfolio may invest up to 20% of its net assets in residual interest bonds
("RIBs"). ARIB, sometimes referred to as an inverse floater, is a debt
instrument with a floating or variable interest rate that moves in the opposite
direction of the interest rate on another security or the value of an index.
Changes in the interest rate on the other security or index inversely affect the
residual interest paid on the RIB, with the result that when interest rates
rise, RIBs make lower interest payments and their values fall faster than
fixed-rate bonds. But when interest rates fall, not only do RIBs give higher
interest payments, their values also rise faster than fixed-rate bonds. If used
as sales material after 6/30/99, this report must be accompanied by Lord
Abbett's Performance Quarterly for the most recently completed calendar quarter.
<TABLE>
<CAPTION>
Statement of Net Assets
NATIONAL TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Prerefunded 14.26% Amarillo TX Health Facs Corp RIBS FSA+ 9.544% 1/1/2022++ AAA $ 1,500 $ 1,777,500
Chattanooga-Hamilton Co TN Hosp Auth Rev Erlanger Ser B
RIBS FSA+ 10.23% 5/25/2021++ AAA 3,500 4,086,250
Clermont Co OH Hosp Facs Ser A AMBAC+ 7 1/2% 9/1/2019 AAA 285 310,650
Cumberland Co NC Ctf Ser A AMBAC+ 6.40% 12/1/2019 AAA 2,800 3,199,000
Cumberland Co NC Ctf Ser A AMBAC+ 6.40% 12/1/2024 AAA 500 571,250
Fulton Co GA Hosp Auth Rev Ser B MBIA+ 6.60% 10/1/2011 AAA 3,000 3,330,000
Glendale AZ Ind Dev Auth Ed Facs Rev CNLA+ 7 1/8% 7/1/2020 AAA 1,000 1,177,500
Hillsborough Co FL Aviation FGIC+ 6.90% 10/1/2011 AAA 170 176,483
Indiana St Ed Facs Auth Rev 6.65% 3/1/2019 AAA 860 977,175
Indiana Univ Bldg Auth Ser N 10 1/8% 7/1/2010 AAA 710 808,513
Kansas City MO Arpt Rev Ser B FSA+ 6 7/8% 9/1/2014 AAA 2,400 2,760,000
Metropolitan Govt Nashville RIBS AMBAC+ 9.356% 1/1/2022++ AAA 10,750 12,443,125
Michigan St Trunk Line Ser A MBIA+ 5 1/2% 10/1/2021 AAA 1,000 1,056,250
Minneapolis & St Paul MN Hsg Ser A MBIA+ 6 3/4% 8/15/2014 AAA 1,300 1,371,500
Montgomery AL Med Clinic Bd 7% 3/1/2015 AAA 445 472,813
New York St Med Care Facs Fin Ser A FHA+ 8% 2/15/2027 AAA 1,925 1,955,184
Ohio St 6.20% 8/1/2013 AAA 750 851,250
Puerto Rico Commonwealth Hwy Ser T 6 5/8% 7/1/2018 AAA 372 410,463
Puerto Rico Commonwealth Hwy 6 1/2% 7/1/2022 AAA 150 165,000
Puerto Rico Elec Pwr Auth RIBS FSA+ 9.347% 7/1/2023++ AAA 2,500 2,912,500
S E Wisconsin Baseball Rmkt MBIA+ 5.80% 12/15/2026 AAA 13,820 15,426,575
Spartanburg SC Wtr Wks Rev FGIC+ 6 1/8% 6/1/2026 AAA 5,000 5,668,750
St Louis MO Land Clearance Rev 7 3/4% 7/1/2021 AAA 7,045 7,661,438
Tacoma WA Elec Sys Rev Ser C RIBS AMBAC+ 9.347%
1/2/2015++ AAA 1,500 1,708,125
Uintah Co UT Poll Ctrl Rev 84-F-2 10 1/2% 6/15/2014 Aaa 1,000 1,142,500
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
NATIONAL TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
University NM Tech Dev Corp Ser A MBIA+ 6.55% 8/15/2025 AAA $ 1,410 $ 1,609,163
Vermont Ed & Health Bldgs Fin/St Michaels College 7.05%
10/1/2016 AAA 2,000 2,177,500
Wa Cnty PA Hosp Auth/Shadyside Hosp Proj AMBAC+
5 7/8% 12/15/2013 AAA 1,000 1,060,000
Weber Co UT Muni Bldg Auth Lease Rev 7 1/2% 12/15/2019 AAA 3,000 3,588,750
Wisconsin Ctr Dist Tax Rev RIBS 7.947% 12/15/2027++ AAA 10,500 12,915,000
Total 93,770,207
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation State .93% Georgia St Ser C 6 1/4% 8/1/2013 AAA 300 350,625
New York St Ser B 6% 8/15/2018 A 200 218,000
Oregon St Veterans Welfare Ser 76A 6.05% 10/1/2028 AA 1,100 1,222,375
Texas St Wtr Dev Bd 7.15% 8/1/2035 AA 1,915 2,166,344
Washington St Ser A 5 3/4% 9/1/2019 AA 2,000 2,137,500
Total 6,094,844
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation Local 6.86% Anne Arundel Co MD 6.30% 8/1/2014 AA 2,510 2,845,712
Anne Arundel Co MD 6.30% 8/1/2015 AA 2,510 2,845,712
Anne Arundel Co MD 6.30% 8/1/2023 AA 505 572,543
Atlanta GA Ser A 5.60% 12/1/2015 AA 1,330 1,401,488
ADA & Canyon ID Jt School 5 1/2% 7/30/2015 Aa 375 405,468
Anchor Bay Sch Dist MI FGIC+ 4 3/4% 5/1/2026 AAA 1,155 1,088,588
Chicago IL Bd Ed Ser B-1 FGIC+ Zero Coupon 12/1/2030 AAA 60,000 11,325,000
Colorado Sprngs School Dist. 11 MBIA+ 4 3/4% 12/15/2018 AAA 950 923,875
Columbia GA Courthouse/Detention 5 5/8% 2/1/2020 A 740 779,775
Dakota Cnty MNSer C 4 1/2% 2/1/2001 AA 1,000 1,016,250
Dakota Co MNSer C 4 1/2% 2/1/2002 AA 1,000 1,021,250
Dodge KS USD 443 FSA+ 4 3/8% 9/1/2018 AAA 2,325 2,188,406
Fayette Co GA Sch Dist 6 1/8% 3/1/2015 Aa 1,000 1,096,250
Glen Cove NY FGIC+ 5% 9/15/2014 AAA 705 719,981
Idaho Falls ID FGIC+ Zero Coupon 4/1/2013 AAA 1,500 776,250
Kilmarnock VA 6 1/4% 3/1/2027 BBB* 1,430 1,553,338
North Providence RI Ser A MBIA+ 6 1/8% 7/1/2016 AAA 1,410 1,580,963
Perrysburg OH 5.35% 12/1/2025 Aa 1,200 1,236,000
Riverside VA Regl Jail Auth MBIA+ 6% 7/1/2025 AAA 7,000 7,682,500
University City MO Sch Dist MBIA+ 10% 2/15/2008 AAA 2,250 3,186,563
Washington Multnomah & Yamhill OR 4.85% 6/1/2017 Aa 885 872,831
Total 45,118,743
- ----------------------------------------------------------------------------------------------------------------------============
Education 15.75% Allegheny Co PA Higher Ed Bldg ACA-CBI+ 6% 5/1/2028 A 2,755 3,116,593
Austin TX Higher Ed Auth/St Edwards Univ ACA-CBI+
5 1/4% 8/1/2023 A 1,395 1,390,577
California Ed Facs Auth ResidualCTFSSer 113 7.215% 12/1/2027 AAA 1,525 1,576,469
Connecticut St Health & Ed Facs/Quinnipiac College Ser E
ACA+ FSA+ 4 3/4% 7/1/2028 AAA 630 600,862
Connecticut St Higher Ed Ser A AMT+++ 7 3/8% 11/15/2005 A 65 66,539
Dinwiddie Co VA Indl Dev MBIA+ 6% 2/1/2018 AAA 650 706,063
District of Columbia Rev AMBAC+ 6% 4/1/2018 AAA 1,000 1,102,500
District of Columbia Rev AMBAC+ 4 3/4% 8/15/2018 Aaa 1,250 1,193,750
District of Columbia Rev MBIA+ 7.15% 4/1/2021 AAA 1,000 1,035,760
District of Columbia Rev LINK 9.22% 4/25/2022++ A 4,000 4,625,000
District of Columbia Rev CNLA+ 6.45% 10/1/2023 AAA 5,250 5,768,437
Illinois Ed Facs Auth Revs AMBAC+ 5.70% 7/1/2024 AAA 6,300 6,693,750
Indiana St Ed Facs Auth Rev 6.65% 3/1/2019 Aaa 10,740 12,109,350
Massachusetts St Dev Fin Agy Brooks Sch Ser B MBIA+
5% 7/1/2029 Aaa 750 730,313
Massachusetts St Health & Ed Facs Auth Rev CNLA+
6% 7/1/2023 AAA 1,175 1,255,781
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
NATIONAL TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Massachusetts St Health & Ed Wellesley College Ser F
5 1/8% 7/1/2039 AA $ 1,500 $ 1,496,250
Montgomery Co MD Economic Dev Rev 5.60% 11/1/2022 BBB 300 304,125
New Jersey Economic Dev Sch Rev 7% 5/1/2020 BBB* 1,000 1,080,000
New Jersey St Ed Facs Auth Ser E AMBAC+ 5.20% 7/1/2028 AAA 130 131,788
New Jersey St Ed Facs Auth/Princeton Univ Ser A 5% 7/1/2029 AAA 5,115 5,089,425
New York St Dorm Auth Rev/Upstate Cmnty Colleges Ser A
5% 7/1/2028 BBB 2,500 2,400,000
Northern IL Univ Rev FGIC+ 5 3/4% 4/1/2022 Aaa 4,000 4,290,000
Ohio St Higher Ed Fac Ser A AMBAC+ 5.40% 12/1/2022 AAA 250 257,500
Ohio St Higher Ed Fac Ser A 5% 10/1/2029 AA 3,325 3,254,344
Oregon Health Science Univ Rev Ser A MBIA+ Zero Coupon
7/1/2021 AAA 9,350 3,003,688
Ohio Univ Gen Receipts Athens FSA+ 5% 12/1/2024 AAA 1,000 983,750
Pennsylvania St Higher Ed Ser B RIBS AMBAC+ AMT+++
8.807% 3/1/2022++ AAA 4,500 5,349,375
Pennsylvania St Higher Ed RIBS AMBAC+ 8.797% 9/1/2026++ AAA 2,000 2,472,500
Pennsylvania St Higher Ed MBIA+ 5 5/8% 12/1/2027 AAA 1,000 1,051,250
Private Colleges & Univ Fac Auth GASer B AMT+++ 5% 11/1/2033 Aa 400 390,500
Private Colleges & Univ Facs Auth GA Ser A 6.40% 10/1/2023 Aa 310 334,025
Rhode Island St Health & Ed 6% 9/1/2025 AA 7,465 8,295,481
South Carolina Ed Facs Auth Furman Univ PJ AMBAC+ 5%
10/1/2019 Aaa 500 493,750
South Carolina Ed Facs Auth Furman Univ PJ AMBAC+ 5%
10/1/2029 Aaa 1,750 1,717,188
State Univ Iowa Univ Revs 4.85% 11/1/2016 Aa 500 501,875
Texas St Higher Ed Coord AMT+++ 7.70% 10/1/2025 A 460 483,575
University VA Ser A 5 1/8% 6/1/2013 AA 500 518,125
University Northn Co Rev MBIA+ 5.60% 6/1/2024 AAA 1,000 1,053,750
University NC Revs Zero Coupon 8/1/2019 AA 3,100 1,104,375
University NC Revs Zero Coupon 8/1/2021 AA 6,510 2,091,338
University NC Sys Pool Rev Ser B MBIA+ 4 1/2% 10/1/2023 AAA 730 667,950
University ID Univ Revs Std Fee-Recreation Proj FSA+
5% 4/1/2025 AAA 1,860 1,848,375
University OK Revs MBIA+ 4 5/8% 7/1/2024 AAA 2,530 2,425,638
Vermont Ed & Health Bldgs Fin Agy 6% 11/1/2013 AA 1,450 1,576,875
Virginia St Pub Sch Auth Ser A 6.20% 8/1/2014 AA 1,500 1,657,500
Wayne St Univ MI AMBAC+ 5.65% 11/15/2015 AAA 5,000 5,287,500
Total 103,583,559
- -----------------------------------------------------------------------------------------------------------------------===========
Finance 1.45% Delaware Valley PA Regl Fin Auth Ser C AMBAC+ 7 3/4%
7/1/2027 AAA 1,000 1,406,250
Indiana Bd Bk Rev Guarantee Ser A 6 3/4% 2/1/2017 AAA 500 568,125
Iowa St Fin Auth Rev 6 1/4% 5/1/2024 A 3,400 3,748,500
St Louis MO Fin Corp Leasehold Rev Ser A AMBAC+
6% 2/15/2021 AAA 3,500 3,819,375
Total 9,542,250
- -----------------------------------------------------------------------------------------------------------------------===========
Health and Hospital 15.84% Burleigh Co ND Health/Med Ctr MBIA+ 5 1/4% 5/1/2013 AAA 1,000 1,033,750
Cobb Co GA Hosp Auth Rev CTFSSer A AMBAC+ 4 3/4%
4/1/2026 AAA 500 469,375
Cobb Hosp GA Kennestone Hosp MBIA+ Zero Coupon 8/1/2015 AAA 1,000 412,500
Connecticut St Health & Ed FSA+ 7% 7/1/2020 AAA 1,000 1,056,250
Connecticut St Health & Ed 5 3/4% 7/1/2023 Baa 3,280 3,333,300
Connecticut St Health & Ed AMBAC+ 6% 11/1/2022 AAA 2,800 3,017,000
Connecticut St Health & Ed FHA+ 5.20% 8/1/2038 AAA 650 644,312
Cumberland Cnty PA Muni Auth 6.80% 11/15/2014 Baa 1,200 1,297,500
Delaware Co PA Auth Hosp Rev ACA-CBI+ 5 3/8% 12/1/2018 A 2,875 2,900,156
Fairfax Co VA Indl Dev Auth 5 7/8% 8/15/2016 AA 1,000 1,081,250
Glynn-Brunswick Mem Hosp Auth GA MBIA+ 6% 8/1/2016 AAA 500 551,250
Grand Forks ND Health Care MBIA+ 5.60% 8/15/2017 AAA 1,675 1,767,125
Illinois Health Facs Auth Rev MBIA+ 5 3/8% 3/1/2013 Aaa 2,405 2,495,187
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
NATIONAL TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Illinois Health Facs Auth Rev 6 3/4% 3/1/2024 Baa $ 2,000 $ 12,185,000
Indiana Co PA Hosp Auth Rev 7 1/8% 7/1/2023 A 1,500 1,633,125
Iowa St Fin Auth Rev Ser V 5 1/4% 8/15/2021 AA 1,510 508,113
Kansas St Dev Fin Auth Rev MBIA+ 5 1/8% 12/1/2018 AAA 710 710,000
Kentucky Economic Dev Fin Auth Rev MBIA+ 6% 1/1/2027 AAA 1,000 1,123,750
Kershaw Co SC Hosp Facs Rec 8% 9/15/2017 Baa 1,435 1,483,790
Maryland St Health & Higher Ed/Kaiser Permanente Ser A
5 3/8% 7/1/2015 A 5,000 5,212,500
Maryland St Health & Higher Ed/Upper Chesapeake Hosp Ser A
FSA+ 5 1/8% 1/1/2038 Aaa 1,000 1,001,250
Maryland St Health & Higher Ed FSA+ 7.097% 1/1/2038++ AAA 5,000 5,006,250
Maryland St Health & Higher Ed/Midlantic Helix Issue Ser B
AMBAC+ 5 1/4% 8/15/2038 AAA 15,000 15,712,500
Mckean Co PA/Bradford Hosp ACA+ 6% 10/1/2013 A 3,500 3,815,000
Minneapolis & St Paul MN Hsg & Redev Auth Health Care Sys
6.90% 10/15/2022 A 700 759,500
Montgomery AL Med Clinic Bd 7% 3/1/2015 A 1,305 1,358,831
New Hampshire Higher Ed &Health Facs/Androscoggin
5.80% 11/1/2027 A 1,000 1,048,750
New Jersey Health Care Facs Ser C MBIA+ 6 5/8% 7/1/2010 AAA 250 256,643
New Jersey Health Care Facs/St Peters Med Ctr MBIA+ 8.60%
7/1/2017 AAA 370 378,455
New Jersey Economic Dev Auth/United Methodist Homes
5 1/8% 7/1/2018 BBB 1,000 945,000
New York St Med Care Facs Ser A 8 7/8% 8/15/2007 A 1,105 1,129,641
Norfolk VA Ind Dev Auth Rev AMBAC+ 6 1/2% 6/1/2021 AAA 1,150 1,224,750
North Carolina Med Care Comm Pitt Co Mem Hosp Ser A
MBIA-IBC+ 4 3/4% 12/1/2028 AAA 10,050 9,409,313
Plymouth MN Health Facs Rev FSA+ 6 1/8% 6/1/2024 AAA 4,000 4,400,000
Pottsville Hosp PA ACA-CBI+ 5 5/8% 7/1/2024 A 250 256,563
Rhode Island St Health & Ed 6 1/4% 8/15/2022 BBB** 1,000 1,041,250
Rochester MN Health Care Ser H RIBS 8.118% 11/15/2015++ AA 9,000 10,417,500
Tampa FL Hosp Rev Ser A 5 3/4% 7/1/2029 A 1,000 1,067,500
Washington Co OH Hosp FSA+ 4 1/2% 9/1/2023 Aaa 4,415 4,039,725
Wisconsin Health & Ed Facs A MBIA+ 6 1/2% 8/15/2011 AAA 1,140 1,218,375
Wisconsin St Health & Ed Facs Auth Rev 7 7/8% 11/1/2022 A 3,275 3,889,063
Wisconsin St Health & Ed Facs Auth Rev MBIA+ 5 3/4% 3/1/2027 AAA 800 860,000
Wisconsin St Health & Ed Facs Auth Rev AMBAC+ 5 1/4%
12/15/2027 AAA 1,000 988,550
Total 104,139,642
- ----------------------------------------------------------------------------------------------------------------------============
Housing 10.69% Arlington Co VA Ind Dev Auth Multi-Fam Hsg Rev 8% 7/1/2015 BBB* 890 944,512
Arlington Co VA Ind Dev Auth Multi-Fam Hsg Rev 6.30% 7/1/2016 A 500 538,750
Atlanta GA Urban Residential FNMA+ AMT+++ 5.35% 10/1/2028 AAA 750 751,875
Bexar Co TX Hsg Fin Corp Ser A GNMA+ AMT+++ 8.20% 4/1/2022 AAA 655 676,287
Clayton Cnty GA Hsg Auth Multi-Fam Hsg Rev FSA+ AMT+++
5.70% 7/1/2023 AAA 1,000 1,036,250
Colorado Hsg & Fin Auth Ser A AMT+++ 6.65% 10/1/2028 AA 2,385 2,581,762
Colorado Hsg & Fin Auth Ser A AMT+++ 6.80% 10/1/2037 AA 2,360 2,572,400
Connecticut St Hsg Fin Auth Facs 6.20% 5/15/2017 AA 270 287,888
Fulton Co GA Hsg Auth Multi-Fam Hsg Rev Ser A AMT+ 6 3/8%
1/1/2027 A 2,900 3,088,500
Georgia St Hsg & Fin Auth Rev Sub Ser A-2 FHA+ AMT+++
6.40% 12/1/2015 AAA 2,000 2,122,500
Georgia St Hsg & Fin Auth Rev Sing Fam MtgSub Ser A-2
FHA+ AMT+++ 6.45% 12/1/2027 AAA 210 223,125
Georgia St Hsg & Fin Auth Rev Sing Fam Mtg Sub Ser B-2
FHA+ AMT+++ 6.55% 12/1/2027 AAA 2,000 2,127,500
Georgia St Hsg & Fin Auth Rev Sub Ser B-2 AMT+++ 5.85%
12/1/2028 AAA 495 512,943
Hawaii St Hsg Fin & Dev Corp Sing Fam Mtg Ser A
FNMA+ AMT+++ 5 3/4% 7/1/2030 Aa 1,000 1,038,750
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
NATIONAL TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Idaho Hsg Agy Ser F FHA+ AMT+++ 7.45% 7/1/2015 Aaa $ 1,020 $ 1,097,775
Illinois Hsg Dev Auth FHA+ AMT+++ 6.80% 12/1/2016 AAA 1,000 1,097,500
Illinois Hsg Dev Auth FHA+ AMT+++ 7.10% 12/1/2034 AAA 1,500 1,674,375
Indiana St Hsg Fin Auth Ser D GNMA+ 7.80% 1/1/2022 Aaa 610 631,350
Kentucky Hsg Corp Hsg Rev Ser B AMT+++ 6.10% 7/1/2016 AAA 1,205 1,269,769
Kentucky Hsg Corp Hsg Rev Ser D-1 FHA+ AMT+++ 6.80%
1/1/2024 AAA 85 89,781
Kentucky Hsg Corp Hsg Rev Ser B FHA/VA+ AMT+++ 5 1/4%
1/1/2028 AAA 2,875 2,875,000
Kentucky Hsg Corp Hsg Rev Ser D FHA+ AMT+++ 5 1/8%
7/1/2038 AAA 590 582,625
Lee Co FL Hsg Fin Auth Sing Fam Rev Ser A FNMA/GNMA/FHLMC+
AMT+++ 6 1/4% 9/1/2031 Aaa 1,000 1,096,250
Maine St Hsg Auth Mtge Ser A-2 AMT++ 6 3/4% 11/15/2035 AA 130 138,287
Maricopa AZ Multi-Fam Hsg Rev MBIA+ 5.15% 7/1/2029 AAA 1,600 1,604,000
Maryland St Comm Dev Admin Sing Fam 7th Ser AMT+++
7.30% 4/1/2025 Aa 495 529,650
Massachusetts St Hsg Fin Agy Ser 29 AMT+++ 6 3/4% 6/1/2026 Aa 1,525 1,629,843
Massachusetts St Hsg Fin Agy AMBAC/FHA+ AMT+++ 7.35%
1/1/2035 AAA 1,440 1,584,000
Minneapolis St Paul MN Hsg Fin Bd Rev FNMA+ AMT+++
6 1/4% 11/1/2030 AAA 1,000 1,080,000
Missouri St Hsg Dev Comm GNMA+ AMT+++ 7 3/8% 8/1/2023 AAA 530 556,500
Maine St Hsg Auth Mtg Pur Ser A-2 AMT+++ 5 1/4% 11/15/2032 AA 1,865 1,844,019
New Jersey St Hsg & Mtg Fin Agy Ser B MBIA+ AMT+++
7.90% 10/1/2022 AAA 4,200 4,336,500
New York St Mtg Agy Rev FHA+ Zero Coupon 10/1/2014 Aaa 945 217,246
North Carolina Hsg Fin Agy Sing Fam Rev Ser BB AMT+++
6 1/4% 3/1/2012 AA 1,275 1,349,906
North Dakota St Hsg Fin Agy Ser B AMT+++ 5.85% 7/1/2028 Aa 2,425 2,537,156
Ohio Hsg Fin Auth Ser C GNMA+ AMT+++ 7.85% 9/1/2021 AAA 330 346,500
Oklahoma Hsg Fin Agy Sing Fam Rev AMT+++ 5.20% 9/1/2021 Aaa 2,780 2,793,900
Oklahoma Hsg Fin Agy Sing Fam Rev Zero Coupon 3/1/2029 Aaa 2,500 506,250
Oklahoma Hsg Fin Agy Sing Fam Rev AMT+++ 5 1/4% 3/1/2030 Aaa 1,000 1,006,250
Oregon St Hsg & Comm Svcs Ser A AMT+++ 5.701% 7/1/2029 Aa 500 516,250
Prince William Co VA Multi-Fam Hsg/Melrose Apts Ser A
5.40% 1/1/2029 A 2,050 2,057,688
South Dakota Hsg Dev Auth Ser A 5 1/8% 5/1/2027 AAA 5,000 4,987,500
Tennessee Hsg Dev Agy Mtge Ser A AMT+++ 7 1/8% 7/1/2026 A 2,575 2,681,219
Utah St Hsg Fin Agy Sing Fam Ser A-2 FHA+ AMT+++
7 3/4% 1/1/2023 AAA 95 99,275
Virginia St Hsg Dev Auth Ser A 7.10% 1/1/2022 AA 7,600 7,980,000
Wyoming Comm Dev Auth Hsg Rev Ser 2 AMT+++ 6.35%
6/1/2029 AA 940 992,875
Total 70,292,281
- ----------------------------------------------------------------------------------------------------------------------============
Industrial Revenue Bonds 2.64% Albany Dougherty GA Payroll AMT+++ 5.20% 5/15/2028 AA 1,000 998,750
Butler AL Ind Dev Bd Solid Waste Rev/James River Corp
AMT+++ 8% 9/1/2028 BBB 1,500 1,708,125
Connecticut St Dev Auth Solid Waste Rev/Pfizer Inc Proj
AMT+++ 7% 7/1/2025 AAA 2,500 2,875,000
Henrico Co VA Ind Dev Auth 7 1/8% 8/1/2021 AA 3,095 3,559,250
Hillsborough Co FL Ind Dev Auth/Tampa Elec Proj 8% 5/1/2022 AA 2,955 3,379,781
Matagorda Co TX Nav Dist AMBAC+ AMT+++ 5 1/8% 11/1/2028 AAA 3,500 3,508,750
Missouri St Dev Fin Wst Disp 5.20% 3/15/2029 AA 500 499,375
Texas City TX Ind Dev Corp Marine Term Rev/ARCO 7 3/8%
10/1/2020 A 650 840,938
Total 17,369,969
- ----------------------------------------------------------------------------------------------------------------------============
Miscellaneous 4.81% Cobb-Marietta GA Coliseum & Exhibit Hall Auth Rev MBIA+
5 5/8% 10/1/2026 AAA 10,250 11,428,750
Harnett Co NC Ctfs Partn AMBAC+ 6.20% 12/1/2009 AAA 2,900 3,186,375
Harrisburg PA Auth Rev MBIA+ 5 5/8% 9/15/2017 AAA 1,000 1,063,750
Louisiana Stad & Expo Dist Ser B FGIC+ 5% 7/1/2026 AAA 3,580 3,508,400
Massachusetts St Ind Fin Agy/WGBH Ed Fndtn AMBAC+ 5%
3/1/2028 AAA 2,750 2,681,250
Norfolk VA Pkg Sys Rev MBIA+ 5.55% 2/1/2027 AAA 2,225 2,336,250
Pennsylvania Intergovernment FGIC+ 5% 6/15/2021 AAA 2,475 2,432,504
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
NATIONAL TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
St Clair MI Econ Ref Ser AA AMBAC+ 6.40% 8/1/2024 AAA $ 1,000 $ 1,141,250
St Louis Co MO Ind Dev Rev Arena Proj AMT+++ 7 7/8%
12/1/2024 BBB* 3,500 3,815,000
Total 31,593,529
- ----------------------------------------------------------------------------------------------------------------------============
Pollution Control Revenue 1.43% Burke Co GA Dev Auth Poll Ctrl Rev MBIA+ 6.60% 7/1/2024 AAA 450 461,592
Coconino Co AZ Poll Ctrl Rev Ser B AMT+++ 5.80% 11/1/2032 BBB 1,000 1,013,750
Missouri St Environmental Imp & Energy Wtr Poll Ctrl Rev
7.20% 7/1/2016 Aa 3,250 3,757,813
Monroe Co MI Econ Dev/Detroit Edison Co Ser AA FGIC+
6.95% 9/1/2022 AAA 1,000 1,278,750
New York St Energy Res & Dev MBIA+ AMT+++ 8.635%
9/1/2033++ Aaa 2,500 2,912,500
Total 9,424,405
- ----------------------------------------------------------------------------------------------------------------------============
Power 8.26% Chelan Co WA Pub Util MBIA+ Zero Coupon 6/1/2028 AAA 5,550 1,221,000
Chelan Co WA Pub Util Ser A FSA+ AMT+++ 5 1/4% 7/1/2033 AAA 2,175 2,180,437
Clark Co NV Ind Dev Rev Ser ACA+ AMT+++ 7.886% 10/1/2030++ A 12,500 12,781,250
Guam Pwr Auth Rev Ser A AMBAC+ 5 1/4% 10/1/2023 AAA 2,000 2,040,000
Grant CoWA Pub Util Dist MBIA+ AMT+++ 5 3/8% 1/1/2018 AAA 900 898,875
Hamilton City OH Elec Ser B FGIC+ 6.30% 10/15/2025 AAA 7,555 8,178,287
Hawaii St Dept Bdg & Fin/Citizen Util RIBS AMT+++
6.939% 12/15/2023++ AAA 2,000 2,082,500
Long Island Pwr Auth NY Elec Sys Rev Ser A 5 1/2% 12/1/2029 A 700 718,375
Milwaukee WI Loc Dist AMT+++ 6.85% 10/1/2021 AA 500 543,125
North Carolina Eastern Muni Pwr Ser G ACA+ 5 3/4% 12/1/2016 A 5,000 5,312,500
Oregon St Alternate Energy Proj Ser A AMT+++ 5% 1/1/2015 AA 1,915 1,943,725
Oregon St Alternate Energy Proj Ser A AMT+++ 5.05% 1/1/2016 AA 1,995 2,024,925
Oregon St Alternate Energy Proj Ser A AMT+++ 5.10% 1/1/2017 AA 1,130 1,146,950
Snohomish CoWA Pub Util RIBS MBIA+ 7.722% 1/1/2024++ AAA 5,000 5,425,000
St Petersburg FL Pub Util 5.60% 10/1/2015 AA 250 262,813
Washington St Pub Supply Ser 369 RIBS 7.087% 7/1/2017++ AA 4,500 4,584,375
Washington St Pub Supply Ser 369B RIBS 7.087% 7/1/2017++ AA 1,345 1,370,219
Western OR Generation Agy Ser B AMT+++ 7.40% 1/1/16 BBB* 1,500 1,616,250
Total 54,330,606
- ----------------------------------------------------------------------------------------------------------------------============
Solid Waste .37% Broward Co FL Wtr & Sewer 7.95% 12/1/2008 A 2 2,109
Cobb Co GA Solid Waste Mgmt AMT+++ 6.40% 1/1/2015 AAA 900 1,000,125
Tampa FL Solid Waste AMBAC+ AMT+++ 5% 10/1/2021 AAA 1,450 1,424,625
Total 2,426,859
- ----------------------------------------------------------------------------------------------------------------------============
Transportation 11.25% Albuquerque NM Arpt Rev AMBAC+ AMT+++ 6.60% 7/1/2016 AAA 2,400 2,586,000
Denver CO City & Co Arpt Rev Ser A FSA+ AMT+++ 5%
11/15/2025 AAA 2,500 2,418,750
Florida St Dept of Transp Ser A 4 3/4% 7/1/2024 AA 15,000 14,193,750
Hillsborough Co FL Port Dist MBIA+ AMT+++ 5% 6/1/2023 AAA 1,895 1,871,313
Hillsborough Co FL Aviation FGIC+ 6.90% 10/1/2011 AAA 330 342,091
Houston TX Arpt Sys Rev Sr Lien Ser C MBIA+ 5% 7/1/2025 AAA 1,470 1,431,412
Manchester NHGen Arpt Rev Ser A MBIA+ 4 1/2% 1/1/2028 AAA 15,000 13,612,500
Pensacola FL Arpt Rev MBIA+ AMT+++ 6 1/8% 10/1/2018 AAA 1,000 1,126,250
Pocahontas Pkwy Assoc VA Toll ACA+ Zero Coupon 8/15/2017 A 5,500 1,973,125
Port Auth NY & NJ Cons 70th Ser AMT+++ 7 1/4% 8/1/2025 AA 500 526,875
Port Auth NY & NJ Cons 106th Ser FGIC+ 4 1/4% 10/1/2026 AAA 2,100 1,850,625
Port Kalama WA Rev Ser B 5 5/8% 12/1/2015 Baa 1,025 1,060,875
Puerto Rico Commonwealth Hwy Ser A MBIA+ 4 3/4%
7/1/2038 AAA 4,500 4,336,875
San Joaquin Hills CA Transn Ser A MBIA+ Zero Coupon 1/15/2036 AAA 3,800 570,000
Santa Rosa Bay Brdg Auth FL 6 1/4% 7/1/2028 BBB 2,140 2,340,625
Santa Rosa Bay Brdg Auth FL ACA-CBI+ 6 1/4% 7/1/2028 A 11,500 12,736,250
Triborough Brdg & Tunl Auth Ser A 5 1/4% 1/1/2028 Aa 7,500 7,575,000
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
NATIONAL TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Virginia St Transn Brd US Route 58 Corridor Dev Ser B 5 1/2%
5/15/2018 AA $ 3,250 $ 3,400,313
Total 73,952,629
- ----------------------------------------------------------------------------------------------------------------------============
Water and Sewer 8.00% Albuquerque NM Jt Wtr &Swr Ser A AMBAC+ 5% 7/1/2004 AAA 2,880 2,944,800
Arkansas St Dev Fin AuthRevolving Fd Ser A 4 7/8% 6/1/2017 AA 1,000 991,250
Chicago IL Waste Wtr Trans MBIA+ Zero Coupon 1/1/2027 AAA 1,500 354,375
Douglasville Douglas Co GA FGIC+ 4 1/2% 6/1/2023 AAA 1,250 1,153,125
Hamilton OH Wtr Wks Rev Ser A MBIA+ 6.30% 10/15/2021 AAA 1,000 1,065,000
Henry Co KY Wtr Dist No 2 MBIA+ 4 3/4% 1/1/2028 AAA 1,035 981,956
Henrico Co VA Wtr & Swr Rev 5% 5/1/2022 Aa 1,000 995,000
Jefferson Co AL Swr Rev FGIC+ 5 3/4% 2/1/2038 AAA 5,000 5,356,250
Kansas St Dev Fin Auth Rev 5% 4/1/2021 A 3,135 3,080,138
Los Angeles CA Wastewtr Rev MBIA+ 4% 6/1/2019 AAA 4,500 3,926,250
Loudoun Co VA Santn Auth MBIA+ 4 3/4% 1/1/2030 AAA 1,450 1,370,250
Louisville & Jefferson Co KY Ser B MBIA+ 5.20% 5/15/2025 AAA 10,000 10,062,500
Macon GA Wtr Auth Wtr & Swr 4 1/2% 10/1/2018 AA 100 93,375
New York City Muni Wtr Fin Ser B MBIA+ 5 3/4% 6/15/2029 AAA 1,000 1,077,500
Orange Beach AL Wtr Swr FSA+ 5 1/8% 5/15/2028 AAA 1,620 1,609,875
Portland OR Swr Sys Rev FGIC+ 5% 6/1/2015 AAA 1,500 1,511,250
Pima Co AZ Met Domestic Wtr FGIC+ 4 7/8% 1/1/2019 Aaa 1,500 1,471,875
Salt River Proj AZ Agric Impt & Pwr Dist 5 1/2% 1/1/2019 AA 5,000 5,168,750
Spartanburg SC Sewer Dist MBIA+ 5 1/2% 6/1/2027 AAA 4,700 4,899,750
Texas Wtr Resource Fin Auth 7 5/8% 8/15/2008 A 1,700 1,721,267
Tucson AZ WtrRev Ser A FGIC+ 5% 7/1/2009 AAA 2,600 2,736,500
Total 52,571,036
- ----------------------------------------------------------------------------------------------------------------------============
Total Municipal Bonds 102.54% (Cost $653,965,668) 674,210,559
==================================================================================================================================
Other Assets, Less Liabilities (2.54)%
==================================================================================================================================
Cash 9,884,761
- ----------------------------------------------------------------------------------------------------------------------============
Receivable for: Securities sold 49,289,343
Interest 10,247,864
Capital stock sold 954,579
Other 4,673
Total Other Assets 70,381,220
------------------------------------------------------------------------------------============
Payable for: Securities purchased 83,695,010
Distributions 2,018,228
Capital stock reacquired 677,309
Other 720,502
Total Liabilities 87,111,049
==================================================================================================================================
Cash and Receivables, Net of Liabilities (16,729,829)
==================================================================================================================================
Net Assets 100.00% $657,480,730
==================================================================================================================================
Class A Shares-Net asset value ($598,808,836 / 51,441,454 shares outstanding) $11.64
Class A Shares-Maximum offering price $12.22
Class B Shares-Net asset value ($14,736,858 / 1,263,657 shares outstanding) $11.66
Class C Shares-Net asset value ($43,935,036 / 3,770,599 shares outstanding) $11.65
</TABLE>
* This investment has not been rated by an independent ratings service but
is, in Lord Abbett's opinion, of comparable quality.
** This investment has been rated by Fitch Investors Service only.
+ Insured or guaranteed by the indicated municipal bond insurance
corporation or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
March 31, 1999. See page 1 for additional information.
+++ Income from these investments may be subject to the Alternative Minimum
Tax.
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
NEW YORK TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Prerefunded 18.47% Metropolitan Transn Auth NY Commuter Facs Rev SerA
FGIC+ 6% 7/1/2021 AAA $ 4,000 $ 4,535,000
Metropolitan Transn Auth NY Commuter Facs Rev Ser A
FGIC+ 6.10% 7/1/2026 AAA 2,000 2,280,000
Metropolitan Transn Auth NY Trans Facs Ser A FSA+ 6.10%
7/1/2026 AAA 1,500 1,710,000
New York St Dorm Auth/City Univ 2nd Ser MBIA+ 6 7/8%
7/1/2014 AAA 5,650 6,525,750
New York St Dorm Auth/City Univ Ser C FGIC+ 7% 7/1/2014 AAA 3,240 3,426,300
New York St Environmental Facs Poll Ctrl Rev Ser E 6 7/8%
6/15/2014 AAA 2,795 3,203,769
New York St Loc Govt Assistance Corp Ser A 6 1/2% 4/1/2020 AAA 5,000 5,375,000
New York St Med Care Facs Fin Ser A 7 1/2% 2/15/2021 AAA 10,000 10,887,500
Puerto Rico Commonwealth Aqu & Sewer Auth Rev 10 1/4%
7/1/2009 AAA 1,000 1,345,000
Puerto Rico Elec Pwr Auth RIBS FSA+ 10.276% 7/1/2018++ AAA 3,500 4,445,000
Puerto Rico Tel Auth Rev RIBS MBIA+ 7.475% 1/16/2015++ AAA 700 766,500
United Nations Dev Corp Ser A 6% 7/1/2026 AAA 4,300 4,751,500
United Nations Dev Corp Ser B 6 1/4% 7/1/2026 AAA 3,000 3,341,250
Total 52,592,569
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation State 4.72% Puerto Rico Commonwealth RIBS FSA+ 8.482% 7/1/2020++ AAA 12,000 13,440,000
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation Local .72% Bethlehem New York Wtr Sys MBIA+ AMT+++ 7.20% 3/1/2022 AAA 1,080 1,251,450
Buffalo NYGen ImpSer A 4 3/4% 2/1/2019 AAA 325 313,625
Suffolk Co NY IDA/South Country Library Proj MBIA+ 4 3/4%
1/1/2019 Aaa 500 484,375
Total 2,049,450
- ----------------------------------------------------------------------------------------------------------------------============
Education 12.52% Hempstead Town NY Ind Dev Agy/Hofstra Univ MBIA+ 5.80%
7/1/2015 AAA 750 820,312
Nassau Co NYIDA/Hofstra Univ Proj MBIA+ 4 3/4% 7/1/2028 AAA 2,000 1,895,000
New York City Ind Dev Agy/New Sch Ser A MBIA+ 5 3/4%
9/1/2015 AAA 1,335 1,440,131
New York St Dorm Auth/City Univ Ser U MBIA-IBC+ 6.45%
7/1/2005 AAA 300 339,375
New York St Dorm Auth/Univ Rochester Ser A 6.40% 7/1/2013 A 2,030 2,250,763
New York St Dorm Auth/St Univ Ed Fac Ser A 5 1/4% 5/15/2021 A 1,025 1,042,938
New York St Dorm Auth Rev/Upstate Cmnty Colleges Ser A
6.20% 7/1/2015 BBB 1,000 1,095,000
New York St Dorm Auth Rev Sp Act Sch Dist MBIA+ 6%
7/1/2016 AAA 1,400 1,536,500
New York St Dorm Auth Rev/Colgate Univ MBIA+ 6%
7/1/2016 AAA 1,000 1,143,750
New York St Dorm Auth Rev/St Univ Ser A 5 1/2% 5/15/2026 A 75 77,250
New York St Dorm Auth Rev/Cornell UnivSer A 7 3/8%
7/1/2020 AA 5,075 5,398,531
New York St Dorm Auth Rev/St Univ Ed Facs Ser A 4 3/4%
5/15/2025 AAA 5,250 4,987,500
Niagara Falls City SD-NY 5 3/8% 6/15/2028 BBB 1,000 1,002,500
New York St Dorm Auth Rev/NYUSer A AMBAC+ 5 3/4%
7/1/2015 AAA 2,000 2,125,000
New York St Dorm Auth Rev/Mental Health Svcs Facs Ser C
4 3/4% 8/15/2022 AAA 5,000 4,743,750
New York St Dorm Auth Rev/Office GenSvcs 5% 4/1/2028 BBB 1,000 960,000
New York St Dorm Auth Rev/Upstate Cmnty Colleges Ser A
5% 7/1/2028 BBB 5,000 4,800,000
Total 35,658,300
- ----------------------------------------------------------------------------------------------------------------------============
Health and Hospital 9.11% New York City Health & Hosp RIBS AMBAC+ 7.71% 2/15/2023++ AAA 6,300 6,670,125
New York St Dorm Auth Rev Mental Health Svcs Facs Ser B 6%
8/15/2012 A 1,460 1,633,375
New York St Dorm Auth Rev Mental Health Svcs Facs Ser B
5 3/4% 2/15/2010 A 1,500 1,642,500
New York St Dorm Auth Rev Mental Health Svcs Facs Ser B
5 3/4% 2/15/2011 A 1,385 1,511,381
New York St Dorm Auth Rev Mental Health Svcs Facs Ser B
5 3/4% 2/15/2012 A 1,155 1,253,175
New York St Dorm Auth Rev Mental Health Svcs Facs Ser D 6%
8/15/2021 A 1,000 1,091,250
New York St Dorm Auth Rev/Manhattan Eye Ear and Throat
5 3/8% 7/1/2012 BBB 1,500 1,635,000
New York St Dorm Auth Rev/Rosalind & Joseph AMBAC+ 5.60%
2/1/2027 AAA 1,000 1,046,250
New York St Dorm Auth Rev/Sarah Neuman AMBAC+ 5.45%
8/1/2027 AAA 550 567,187
New York St Med Care Facs Fin/Montefiore Med Ctr
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
NEW YORK TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
AMBAC+ FHA+ 5 3/4% 2/15/2025 AAA $ 1,000 $ 1,067,500
New York St Med Care Facs Fin Mental Health Ser A
7.80% 2/15/2019 BBB 355 366,566
New York St Med Care Facs Fin Mental Health Ser A
7 1/2% 2/15/2021 A 3,955 4,251,625
New York St Dorm Auth Rev Mental Health Svcs Facs
AMBAC+ 4 1/2% 8/15/2028 AAA 3,520 3,198,800
Total 25,934,734
- ----------------------------------------------------------------------------------------------------------------------============
Housing 2.07% New York St Mtg Agy Rev Ser 70 5.40% 4/1/2022 Aa 520 529,750
New York St Mtg Agy Rev Ser 61 AMT+++ 5.80% 10/1/2028 AAa 500 514,375
New York St Mtg Agy Rev Ser 41 MBIA+ 6.45% 10/1/2014 AAA 2,000 2,155,000
New York St Mtg Agy Rev Ser 44 AMT+++ 7 1/2% 4/1/2026 Aa 2,495 2,691,481
Total 5,890,606
- ----------------------------------------------------------------------------------------------------------------------============
Industrial Revenue Bonds 4.95% New York City IDA/Lighthouse Intl Proj MBIA+ 4 1/2% 7/1/2023 AAA 950 872,812
New York City IDA/Lighthouse Intl Proj MBIA+ 4 1/2% 7/1/2033 AAA 5,575 5,038,406
New York City IDA/Brooklyn Navy Yard AMT+++ 6.20%
10/1/2022 BBB 1,000 1,125,000
New York City IDA/Brooklyn Navy Yard AMT+++ 5.65%
10/1/2028 BBB 2,000 2,047,500
New York City IDA/American Airlines Inc Proj AMT+++
5.40% 7/1/2020 Baa 5,000 5,031,250
Total 14,114,968
- ----------------------------------------------------------------------------------------------------------------------============
Miscellaneous 7.64% New York St Urban Dev Corp 5 1/4% 4/1/2012 BBB 1,765 1,806,919
New York St Urban Dev Corp 5.70% 4/1/2020 BBB 4,150 4,482,000
New York St Urban Dev Corp 5% 1/1/2028 BBB 3,200 3,072,000
New York St Dorm Auth LeaseRev Zero Coupon 8/1/2019 Aa 3,700 1,327,375
New York St Dorm Auth LeaseRev Zero Coupon 8/1/2021 Aa 4,000 1,290,000
New York St Dorm Auth LeaseRev Zero Coupon 8/1/2022 Aa 3,565 1,087,325
New York St Dorm Auth LeaseRev Ser 1 FSA+ 4 3/4% 1/15/2029 AAA 5,000 4,693,750
Virgin Islands Pub Fin Auth Ser E 6% 10/1/2022 BBB* 2,000 2,085,000
Virgin Islands Pub Fin Auth Ser E 5 7/8% 10/1/2018 BBB* 1,850 1,912,438
Total 21,756,807
- ----------------------------------------------------------------------------------------------------------------------============
Pollution Control Revenue 4.91% Essex Cnty NY Indl Dev Agy/Intl Paper Ser B 5.55% 1/1/2014 BBB 305 317,962
New York St Energy Res & Dev Ser 43 MBIA+ AMT+++ 8.635%
9/1/2033 Aaa 2,500 2,912,500
New York St Environmental Facs Poll Ctrl Rev Ser A 7 1/2%
6/15/2012 Aa 8,000 8,510,000
New York St Environmental Facs Poll Ctrl Rev Ser E 6 7/8%
6/15/2014 Aa 1,985 2,243,050
Total 13,983,512
- ----------------------------------------------------------------------------------------------------------------------============
Power 22.28% Long Island Pwr Auth NY Elec Sys Ser A 53/4% 12/1/2024 A 995 1,054,700
Long Island Pwr Auth NY Elec Sys Ser A 51/2% 12/1/2029 A 10,000 10,262,500
New York St Energy Res & Dev/Brooklyn Union Gas Ser A
MBIA+ AMT+++ 6 3/4% 2/1/2024 AAA 13,000 14,121,250
New York St Energy Res & Dev/Brooklyn Union Gas Ser B
RIBS AMT+++ 10.284% 7/1/2026++ A 4,000 5,225,000
New York St Energy Res & Dev/Niagara Mohawk Ser A
FGIC+ 7.20% 7/1/2029 AAA 11,750 13,541,875
New York St Energy Res & Dev MBIA+ AMT+++ 7 1/8%
12/1/2029 AAA 2,500 2,865,625
New York St Energy Res & Dev/Rochester Gas & Elec Ser A
MBIA+ AMT+++ 5.95% 9/1/2033 AAA 1,000 1,098,750
Port Auth NY & NJ Spl Oblig 6 3/4% 10/1/2019 BBB* 2,970 3,285,563
Puerto Rico Elec Pwr Auth Ser U 6% 7/1/2014 BBB 2,250 2,475,000
Puerto Rico Elec Pwr Auth Ser EE 4 3/4% 7/1/2024 BBB 10,000 9,525,000
Total 63,455,263
- ----------------------------------------------------------------------------------------------------------------------============
Solid Waste .81% Dutchess Co Resource Recovery Ser A FGIC+ 7 1/2% 1/1/2009 AAA 2,200 2,311,100
- ----------------------------------------------------------------------------------------------------------------------============
Transportation 11.76% Metropolitan Transn Auth NY Ser A MBIA+ 5 1/4% 4/1/2026 AAA 1,345 1,365,175
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
NEW YORK TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Metropolitan Transn Auth NY Svc Contract Trans Facs Ser O
5 3/4% 7/1/2008 BBB $ 1,000 $ 1,098,750
Metropolitan Transn Auth NY Commuter Facs Rev Ser A FGIC+
6% 7/1/2016 AAA 2,000 2,222,500
Metropolitan Transn Auth NY Ser R 5 1/2% 7/1/2017 BBB 1,000 1,042,500
New York City IDA/British Airways Plc Proj AMT+++
5 1/4% 12/1/2032 A 1,000 986,250
Port Auth NY & NJ Cons 106th Ser AMT+++ 6% 7/1/2015 AA 350 378,875
Port Auth NY & NJ Cons 67th Ser 6 7/8% 1/1/2025 AA 1,000 1,032,800
Port Auth NY & NJ Cons 106th Ser FGIC+ 4 1/4% 10/1/2026 AAA 10,350 9,120,938
Port Auth NY & NJ Spl Oblig Rev/JFK Intl Air Term
MBIA+ AMT+++ 5 3/4% 12/1/2025 AAA 14,345 15,187,769
Puerto Rico Commonwealth Hwy Ser Y 5 1/2% 7/1/2026 A 1,000 1,048,750
Total 33,484,307
- ----------------------------------------------------------------------------------------------------------------------============
Water and Sewer 1.47% Buffalo NY Muni Wtr Fin Auth FGIC+ 5 3/4% 7/1/2021 AAA 500 540,000
New York City Muni Wtr Fin Auth Ser A FGIC+ 6 1/4%
6/15/2021 AAA 3,500 3,657,500
Total 4,197,500
==================================================================================================================================
Total Municipal Bonds 101.43% (Cost $274,196,833) 288,869,116
==================================================================================================================================
Other Assets, Less Liabilities (1.43)%
==================================================================================================================================
Cash and Receivables, Net of Liabilities (4,059,808)
==================================================================================================================================
Net Assets 100.00% $284,809,308
==================================================================================================================================
Class A Shares-Net asset value ($277,337,659 / 24,656,862 shares outstanding) $11.25
Class A Shares-Maximum offering price $11.81
Class C Shares-Net asset value ($7,471,649 / 664,389 shares outstanding) $11.25
</TABLE>
* This investment has not been rated by an independent ratings service but
is, in Lord Abbett's opinion, of comparable quality.
+ Insured or guaranteed by the indicated municipal bond insurance
corporation or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
March 31, 1999. See page 1 for additional information.
+++ Income from these investments may be subject to the Alternative Minimum
Tax.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Statement of Net Assets
TEXAS TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Prerefunded 16.76% Amarillo TX Health Facs Corp RIBS FSA+ 9.19% 1/1/2022++ AAA $ 2,550 $ 3,021,750
Austin TX Util Sys 8% 11/15/2016 AAA 1,000 1,090,000
Dallas Co TX Flood Ctrl Dist No. 1 9 1/4% 4/1/2010 AAA 1,460 1,804,925
Harris Co TX Toll Rd Ser A 6.10% 8/15/2016 AA 2,640 2,956,800
Houston TX Wtr & Sewer Sys Rev MBIA+ 7.40% 12/1/2018 AAA 1,000 1,083,750
Houston TX Wtr & Sewer Sys Rev AMBAC+ 6 1/2% 12/1/2021 AAA 335 365,987
Houston TX Wtr & Sewer Sys Rev AMBAC+ 6 1/2% 12/1/2021 AAA 2,665 2,911,513
Puerto Rico Commonwealth 6 1/2% 7/1/2023 AAA 750 853,125
Texas Turnpike 12 5/8% 1/1/2020 AAA 1,000 1,282,500
Total 15,370,350
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation State 21.91% Puerto Rico Commonwealth 5 3/8% 7/1/2025 A 2,000 2,060,000
Texas St Wtr Dev Bd LINK 6.20% 9/30/2011++ AA 5,000 5,781,250
Texas St Wtr Dev Bd Ser B-1 & B-2 RIBS 8.516%
9/30/2011++ AA 3,000 3,918,750
Texas St Wtr Dev Bd Ser B-3 RIBS AMT+++ 7.17%
12/1/2023++ AA 6,000 6,525,000
Texas St Wtr Dev Bd 7.15% 8/1/2035 AA 1,600 1,810,000
Total 20,095,000
- ----------------------------------------------------------------------------------------------------------------------============
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
TEXAS TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
General Obligation Local 9.98% Azle TX Indpt Sch Dist Ser A 6% 2/15/2022 Aaa $ 250 $ 254,545
Cedar Park TX FSA+ 5% 8/15/2019 AAA 500 495,000
Houston TX Idpt Sch Dist Ser A 5% 2/15/2024 AAA 2,780 2,727,875
Keller TX Indpt Sch Dist 4 3/4% 8/15/2020 AAA 1,000 952,500
Keller TX Indpt Sch Dist 4 3/4% 8/15/2022 AAA 1,100 1,043,625
Sherman TX Indpt Sch Dist Zero Coupon 2/15/2023 AAA 3,530 1,019,288
Sherman TX Indpt Sch Dist Zero Coupon 2/15/2024 AAA 3,525 969,375
Socorro TX Idpt Sch Dist 5 1/4% 8/15/2026 AAA 1,000 1,010,000
Willis TX Indpt Sch Dist Zero Coupon 2/15/2021 Aaa 2,115 682,087
Total 9,154,295
- ----------------------------------------------------------------------------------------------------------------------============
Education 5.44% Austin TX Higher Ed Auth/St Edwards Univ Proj ACA-CBI+++
5 1/4% 8/1/2023 A 1,000 996,830
Fort Worth TX Higher Ed Fin/Texas Christian Univ Proj
5% 3/15/2027 AA 2,500 2,446,875
New York St Dorm Auth Rev/Upstate Cmnty Colleges Ser
` A 5% 7/1/2028 BBB 1,000 960,000
Texas St Higher Ed Coord AMT+++ 7.70% 10/1/2025 A 555 583,444
Total 4,987,149
- ----------------------------------------------------------------------------------------------------------------------============
Health and Hospital 4.28% Bexar Co TX Health Facs MBIA+ 7 1/2% 8/15/2010 AAA 750 805,312
Denton Co TX Health Facs 7 1/2% 8/15/2015 BBB** 1,000 1,116,250
Georgetwn TX Health Facs ACA+ 5 3/8% 8/15/2028 A 500 501,875
Texarkana TX Health Facs Ser B MBIA+ 6% 10/1/2019 AAA 1,335 1,501,875
Total 3,925,312
- ----------------------------------------------------------------------------------------------------------------------============
Housing .68% Dallas TX Hsg Corp/Estell Village Apts Ser A 7 7/8% 12/1/2009 BBB* 500 517,500
Texas Hsg Agy Ser D AMT+++ 8.40% 1/1/2021 AA 100 102,700
Total 620,200
- ----------------------------------------------------------------------------------------------------------------------============
Industrial Revenue Bonds 12.41% Harris Co TX Ind Dev Corp Marine Term & Wtr Poll Ctrl Rev
6 5/8% 2/1/2024 BBB 1,500 1,635,000
Orange Co TX Nav & Port Dist North Star Steel 6 3/8% 2/1/2017 A 2,400 2,634,000
Texas City TX Ind Dev Corp Marine Term Rev/ARCO 7 3/8%
10/1/2020 A 5,500 7,115,625
Total 11,384,625
- ----------------------------------------------------------------------------------------------------------------------============
Pollution Control Revenue 1.30% Trinity River Auth TX Poll Ctrl Rev Texas Instruments
- ----------------------------------------------------------------------------------------------------------------------============
AMT+++ 6.20% 3/1/2020 A 1,105 1,193,400
- ----------------------------------------------------------------------------------------------------------------------============
Power 3.69% Brazos River Auth TX Poll Ctrl Rev AMBAC+ AMT+++ 5.55%
5/1/2033 AAA 1,000 1,031,250
Gulf Coast Waste Disp Auth/Valero Energy Corp Proj
AMT+++ 5.70% 4/1/2032 BBB 1,000 1,001,250
Lubbock Tx Elec Lt & Pwr Sys AMBAC+ 4 1/4% 4/15/2018 AAA 460 411,125
Victoria TX Util Sys MBIA+ 4 3/4% 12/1/2022 AAA 1,000 945,000
Total 3,388,625
- ----------------------------------------------------------------------------------------------------------------------============
Transportation 9.04% Dallas-Fort Worth TX Regl Arpt MBIA+ AMT+++ 5 3/4%
11/1/2024 AAA 2,500 2,606,250
Port Beaumont TX Nav Dist Ser A FGIC+ 4 3/4% 3/1/2018 Aaa 500 481,875
Puerto Rico Commonwealth Hwy Ser Y 5 1/2% 7/1/2026 A 2,000 2,097,500
Puerto Rico Commonwealth Hwy Ser Y 5 1/2% 7/1/2036 A 1,075 1,151,594
Texas St Tnpk Auth Dallas North FGIC+ 5% 1/1/2025 AAA 2,000 1,952,500
Total 8,289,719
- ----------------------------------------------------------------------------------------------------------------------============
Water and Sewer 12.22% Dallas TX Wtrworks & Sewer Sys FSA+ 5% 10/1/2029 AAA 1,580 1,546,425
Jefferson Co AL Swr Rev Ser A FGIC+ 5 3/4% 2/1/2038 AAA 1,000 1,071,250
Nueces River Auth TX Wtr Supply FSA+ 5 1/2% 3/1/2027 AAA 7,500 7,865,625
Texas Wtr Resource Fin Auth 7 5/8% 8/15/2008 A 390 394,879
Texas Wtr Resource Fin Auth AMBAC+ 7 1/2% 8/15/2013 AAA 320 324,592
Total 11,202,771
- ----------------------------------------------------------------------------------------------------------------------============
Total Municipal Bonds 97.71% (Cost $84,898,384) 89,611,446
- ----------------------------------------------------------------------------------------------------------------------============
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
TEXAS TAX-FREE INCOME FUND March 31, 1999
==================================================================================================================================
<S> <C> <C>
Other Assets, Less Liabilities 2.29%
==================================================================================================================================
Cash $ 2,788,062
- ----------------------------------------------------------------------------------------------------------------------============
Receivable for: Securities sold 5,101,458
Interest 1,598,069
Capitalstock sold 17,547
Other 302
Total Other Assets 9,505,438
------------------------------------------------------------------------------------============
Payable for: Securities purchased 6,960,467
Distributions 276,477
Capital stock reacquired 14,662
Other 154,121
Total Liabilities 7,405,727
- ----------------------------------------------------------------------------------------------------------------------============
Cash and Receivables, Net of Liabilities 2,099,711
==================================================================================================================================
Net Assets 100.00% $ 91,711,157
==================================================================================================================================
Net asset value ($91,711,157 / 8,852,218 shares outstanding) $10.36
Maximum offering price $10.88
</TABLE>
* This investment has not been rated by an independent ratings service but
is, in Lord Abbett's opinion, of comparable quality.
** This investment has been rated by Fitch Investors Service only.
+ Insured or guaranteed by the indicated municipal bond insurance
corporation or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
March 31, 1999. See page 1 for additional information.
+++ Income from these investments may be subject to the Alternative Minimum
Tax.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Statement of Net Assets
NEW JERSEY TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Prerefunded 24.59% Essex Co NJ Impt Auth Rev Orange Muni Util & Lease
MBIA+ 6.80% 7/1/2014 AAA $ 1,710 $ 1,996,425
Hudson Co NJ Util Auth Util Sys Rev 10% 7/1/2011 AAA 1,000 1,187,500
New Jersey Economic Dev Auth Ser B MBIA+ 6 1/8% 5/15/2015 AAA 2,000 2,262,500
New Jersey Economic Dev Auth RIBS 9.314% 5/15/2025++ AAA 6,500 8,328,125
New Jersey Health Care Facs/Bayonne Hosp FSA+ 6 1/4%
7/1/2012 AAA 230 259,325
New Jersey Health Care Facs/Bayonne Hosp FSA+ 6 1/4%
7/1/2012 AAA 1,370 1,520,700
New Jersey Health Care Facs 8 1/4% 7/1/2020 AAA 2,570 2,769,175
New Jersey Health Care Facs/Cathedral Hlth Ser A FHA+ 7 1/4%
2/15/2021 AA 1,485 1,609,369
New Jersey Sports & Expo/Monmouth Pk Ser A 8% 1/1/2025 AAA 1,000 1,215,000
New Jersey St Ed Facs Auth MBIA+ 6.85% 7/1/2019 Aaa 540 555,466
North Brunswick Twp NJ Bd Ed 6.30% 2/1/2014 AA 1,000 1,116,250
Pohatcong Township NJ Sch Dist FSA+ 5.95% 7/15/2023 AAA 650 735,313
Pohatcong Township NJ Sch Dist FSA+ 5.95% 7/15/2026 AAA 250 282,813
Puerto Rico Commonwealth 6 1/2% 7/1/2023 AAA 1,000 1,137,500
Puerto Rico Commonwealth Hwy Ser T 6 5/8% 7/1/2018 Aaa 283 312,493
Puerto Rico Elec Pwr Auth RIBS FSA+ 10.276% 7/1/2018++ AAA 7,000 8,890,000
Puerto Rico Elec Pwr Auth RIBS FSA+ 8.328% 7/1/2023++ AAA 5,000 5,825,000
Puerto Rico Pub Bldg Auth Ser L 6 7/8% 7/1/2021 AAA 200 222,250
Puerto Rico Tel Auth Rev RIBS MBIA+ 7.475% 1/16/2015++ AAA 1,500 1,642,500
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
NEW JERSEY TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
South Brunswick Township NJ Bd Ed FGIC+ 6.40% 8/1/2024 AAA $ 1,600 $ 1,814,000
Stafford NJ Mun Util Auth Ser A FGIC+ 6 1/8% 12/1/2022 AAA 1,500 1,623,750
Total 45,305,454
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation State 3.68% New Jersey NJ 6.80% 9/15/2010 AA 1,000 1,088,750
Puerto Rico Commonwealth RIBS MBIA+ 8.194% 7/1/2008++ AAA 5,000 5,693,750
Total 6,782,500
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation Local 6.81% Keansburg NJ 6.80% 12/1/2010 Aa 1,000 1,106,250
Millburn Township NJ Bd Ed 5.35% 7/15/2018 Aaa 1,150 1,217,562
Millburn Township NJ Bd Ed 5.35% 7/15/2019 Aaa 1,100 1,157,750
Morristown NJ FSA+ 6 1/2% 8/1/2019 AAA 3,440 3,882,900
Paterson NJ FSA+ 9.30% 2/15/2004 AAA 4,200 5,176,500
Total 12,540,962
- ----------------------------------------------------------------------------------------------------------------------============
Education 5.22% New Jersey Economic Dev Sch Rev 7% 5/1/2020 BBB* 1,800 1,944,000
New Jersey St Ed Facs Auth 5% 7/1/2029 AAA 5,000 4,975,000
New Jersey St Ed Facs Auth AMBAC+ 6% 7/1/2019 AAA 1,190 1,276,275
New Jersey St Ed Facs Auth AMBAC+ 5% 7/1/2018 AAA 900 874,125
New Jersey Economic Dev Auth/The Rumson 4.65% 5/1/2010 BBB 550 541,750
Total 9,611,150
- ----------------------------------------------------------------------------------------------------------------------============
Finance .57% Hamilton Township NJ Bd Ed Ser B FSA+ 7% 12/15/2015 AAA 970 1,046,387
- ----------------------------------------------------------------------------------------------------------------------============
Health and Hospital 13.08% Camden Co NJ Impt Auth Rev ACA+ 6% 2/15/2027 A 8,750 9,515,625
New Jersey Health Care Facs/St Barnabas Ser C MBIA+ 5%
7/1/2008 AAA 500 500,625
New Jersey Health Care Facs/St Barnabas Ser C MBIA+ 5 1/4%
7/1/2018 AAA 2,000 1,952,500
New Jersey Health Care Facs/Med Ctr of Ocean Co SerC
FSA+ 6 3/4% 7/1/2020 AAA 2,755 2,954,738
New Jersey Health Care Facs/Hunterdon Med Ctr Ser A
AMBAC+ 7% 7/1/2020 AAA 5,000 5,268,750
New Jersey Health Care Facs/Spectrum Ser B FHA+ 6 1/2%
2/1/2022 AAA 895 955,413
New Jersey Health Care Facs/St Barnabas Ser B
MBIA+ Zero Coupon 7/1/2022 AAA 1,130 343,238
New Jersey Health Care Facs/St Barnabas Ser B MBIA+ 4 3/4%
7/1/2028 AAA 1,020 963,900
Puerto Rico Ind Tourist Ed Med & Environmental Ctrl Fac
MBIA+ 6 1/4% 7/1/2024 AAA 1,000 1,111,250
Puerto Rico Ind Tourist Ed Med & Environmental Ctrl Fac
FHA+ 6 1/4% 8/1/2032 AAA 500 540,000
Total 24,106,039
- ----------------------------------------------------------------------------------------------------------------------============
Housing 2.01% New Jersey St Hsg & Mtg Fin Agy MBIA+ AMT+++ 7.90%
10/1/2022 AAA 2,535 2,617,388
New Jersey St Hsg & Mtg Fin Agy Ser D MBIA+ AMT+++
7.70% 10/1/2029 AAA 595 611,672
Puerto Rico Hsg Fin Corp Sing Fam Mtg Ser B GNMA+ 7.65%
10/15/2022 AAA 205 214,481
Virgin Islands Hsg Fin Auth Sing Fam Mtg GNMA+ AMT+++
6 1/2% 3/1/2025 AAA 255 269,981
Total 3,713,522
- ----------------------------------------------------------------------------------------------------------------------============
Miscellaneous 6.87% East Orange NJ Brd Ed Ctfs FSA+ Zero Coupon 2/1/2026 AAA 750 189,375
Mercer Co NJ Impt Auth Rev 5 3/4% 11/1/2017 Aa 1,660 1,782,425
Monmouth Co NJ Imp Auth Rev MBIA+ 6.40% 12/1/2009 AAA 1,075 1,218,781
New Jersey Economic Dev Auth Ser A MBIA+ 6% 5/15/2025 AAA 4,250 4,775,938
NJ Sports & Expo Auth Ser A MBIA+ 4 1/2% 3/1/2024 AAA 2,400 2,214,000
Puerto Rico Muni Fin Agy FSA+ 5 1/2% 7/1/2021 AAA 1,150 1,211,813
Union Co Impt Auth Rev FGIC+ 6 1/4% 8/1/2013 AAA 1,100 1,266,375
Total 12,658,707
------------------------------------------------------------------------------------============
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
NEW JERSEY TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Pollution Control Revenue .31% Cape May Co NJ Ind Poll Ctrl Ser B MBIA+ 7% 11/1/2029 AAA $ 500 $ 576,250
- ----------------------------------------------------------------------------------------------------------------------============
Power 1.50% Guam Pwr Auth Rev Ser A AMBAC+ 5 1/4% 10/1/2023 AAA 2,000 2,040,000
Puerto Rico Elec Pwr Auth Ser N 7 1/8% 7/1/2014 BBB 715 732,467
Total 2,772,467
- ----------------------------------------------------------------------------------------------------------------------============
Transportation 29.25% Delaware River Port Auth PA RIBS FGIC+ 7.755 1/1/2026++ AAA 5,000 5,506,250
Delaware River Port Auth PA RIBS FGIC+ 7.814% 1/1/2026++ AAA 4,225 4,652,781
New Jersey Economic Dev Auth AMT+++ 7% 7/1/2016 BBB* 4,245 4,568,681
Port Auth NY & NJ Cons 106th Ser FGIC+ 4 1/4% 10/1/2026 AAA 16,025 14,122,031
Puerto Rico Commonwealth Hwy Ser Y 5 1/2% 7/1/2026 A 5,940 6,229,575
Puerto Rico Commonwealth Hwy Ser Y 5 1/2% 7/1/2036 A 9,600 10,284,000
Puerto Rico Commonwealth Hwy Ser A MBIA+ 4 3/4% 7/1/2038 AAA 7,830 7,546,162
Puerto Rico Commonwealth Hwy Ser A MBIA+ 5% 7/1/2038 AAA 1,000 990,000
Total 53,899,480
- ----------------------------------------------------------------------------------------------------------------------============
Water and Sewer 2.62% Middlesex Cnty NJ Impt Auth/Perth Amboy AMBAC+ Zero
Coupon 9/1/2023 AAA 4,350 1,256,062
Middlesex Cnty NJ Impt Auth/Perth Amboy AMBAC+ Zero
Coupon 9/1/2024 AAA 6,350 1,746,250
New Jersey Waste Water Treatment Trust MBIA+ 7% 5/15/2006 AAA 75 76,568
New Jersey Waste Water Treatment Trust 6 7/8% 6/15/2009 AA 155 163,138
Ocean Cnty NJ Util Auth Ser A 4 1/2% 1/1/2013 Aa 800 771,000
Washington Twp NJ Zero Coupon 12/15/2023 Aaa 1,055 296,718
Washington Twp NJ Zero Coupon 12/15/2024 Aaa 1,055 282,212
Washington Twp NJ Zero Coupon 12/15/2027 Aaa 1,055 241,331
Total 4,833,279
------------------------------------------------------------------------------------============
Total Municipal Bonds 96.51% (Cost $169,925,716) 177,846,197
==================================================================================================================================
Other Assets, Less Liabilities 3.49%
==================================================================================================================================
Cash 8,003,018
- ----------------------------------------------------------------------------------------------------------------------============
Receivable for: Securities sold 3,579,618
Interest 2,645,886
Capitalstock sold 117,684
Total Other Assets 14,346,206
------------------------------------------------------------------------------------============
Payable for: Securities purchased 6,924,181
Distributions 525,398
Capital stock reacquired 216,954
Other 249,277
Total Liabilities 7,915,810
- ----------------------------------------------------------------------------------------------------------------------============
Cash and Receivables, Net of Liabilities 6,430,396
==================================================================================================================================
Net Assets 100.00% $184,276,593
==================================================================================================================================
Net asset value ($184,276,593 / 34,452,339 shares outstanding) $5.35
Maximum offering price $5.62
</TABLE>
* This investment has not been rated by an independent ratings service but
is, in Lord Abbett's opinion, of comparable quality.
+ Insured or guaranteed by the indicated municipal bond insurance
corporation or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
March 31, 1999. See page 1 for additional information.
+++ Income from these investments may be subject to the Alternative Minimum
Tax.
See Notes to Financial Statements.
14
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
CONNECTICUT TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Prerefunded 9.43% Connecticut Middletown Courthouse MBIA+ 6 1/4% 12/15/2010 AAA $ 575 $ 626,031
Connecticut St Clean Wtr Fd 7% 1/1/2011 AAA 2,050 2,203,750
Puerto Rico Commonwealth 6.45% 7/1/2017 AAA 2,000 2,275,000
Puerto Rico Commonwealth 6 1/2% 7/1/2023 AAA 2,000 2,275,000
Puerto Rico Commonwealth 6% 7/1/2026 AAA 1,000 1,143,750
Puerto Rico Commonwealth Hwy Ser T 6 5/8% 7/1/2018 AAA 3 3,444
Puerto Rico Commonwealth Hwy Ser T 6 5/8% 7/1/2018 Aaa 67 73,819
Puerto Rico Elec Pwr Auth RIBS FSA+ 10.276% 7/1/2018++ AAA 1,500 1,905,000
Puerto Rico Elec Pwr Auth Ser X 6 1/8% 7/1/2021 AAA 750 852,188
Total 11,357,982
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation State 5.70% Connecticut St Ser C 4 1/2% 10/15/2015 AA 1,000 977,500
Connecticut St Ser C 4 1/2% 10/15/2016 AA 1,000 970,000
Puerto Rico Commonwealth Zero Coupon 7/1/2018 A 2,000 750,000
Puerto Rico Commonwealth MBIA+ 5 3/8% 7/1/2022 AAA 2,150 2,219,875
Puerto Rico Commonwealth 5 3/8% 7/1/2025 A 1,900 1,957,000
Total 6,874,375
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation Local 3.04% Darien CT 5 1/2% 10/15/2015 Aaa 500 546,875
Hartford CT 6 1/2% 12/15/2005 AA 730 834,025
Killingly CT 7 1/4% 12/15/2004 A 250 256,825
Monroe CT 6.60% 4/15/2005 Aa 100 113,750
Montville CT 6.70% 6/15/2009 Aa 550 660,688
Montville CT 6.70% 6/15/2010 Aa 575 691,438
Portland CT 7.10% 12/15/2000 A 100 106,250
Redding CT 6.60% 4/15/2010 Aa 100 119,125
Voluntown CT 6 3/4% 10/1/2002 A 100 109,875
Watertown CT 6 1/2% 6/15/2003 A 100 110,500
West Haven CT MBIA+ 6 1/2% 6/15/2006 AAA 100 114,625
Total 3,663,976
- ----------------------------------------------------------------------------------------------------------------------============
Education 20.39% Connecticut St Dev Auth Aqua Proj 7% 12/1/2027 BBB* 1,500 1,595,625
Connecticut St Health & Ed/Yale Univ RIBS 8.431% 6/10/2030++ AAA 6,800 7,726,500
Connecticut St Health & Ed/Loomis Chaffee Sch Proj Ser B
MBIA+ 6% 7/1/2015 AAA 715 775,775
Connecticut St Health & Ed F 6 1/2% 7/1/2016 BBB 725 840,094
Connecticut St Health & Ed F 6 1/2% 7/1/2016 BBB 275 303,875
Connecticut St Health & Ed/Suffield Academy Ser A MBIA+ 5.30%
7/1/2017 AAA 1,000 1,031,250
Connecticut St Health & Ed/Kent Sch Ser B MBIA+ 5.40% 7/1/2023 AAA 750 771,562
Connecticut St Health & Ed/Trinity CollegeSer E MBIA+ 5 7/8%
7/1/2026 AAA 1,000 1,085,000
Connecticut St Health & Ed/Trinity College Ser F MBIA+ 5% 7/1/2028 AAA 750 743,437
Connecticut St Health & Ed/Fairfield Univ Ser H 5% 7/1/2028 AAA 1,750 1,728,125
Connecticut St Health & Ed/New Haven SerD 6.70% 7/1/2026 BBB 1,000 1,076,250
Connecticut St Health & Ed/Conn College Ser C-1 MBIA+ 5 1/2%
7/1/2027 AAA 1,000 1,042,500
Connecticut St Health & Ed F ASSET GTY+ 4 3/4% 7/1/2028 AA 3,005 2,847,238
Connecticut St Health & Ed/Canterbury Sch Ser A MBIA+ 5% 7/1/2028 AAA 1,585 1,571,131
University Ct Rev Ser A MBIA+ 4 3/4% 11/15/2027 AAA 1,500 1,432,500
Total 24,570,862
- ----------------------------------------------------------------------------------------------------------------------============
Health and Hospital 10.92% Connecticut St Health & Ed/Bridgeport Hosp Ser A MBIA+ 6 5/8%
7/1/2018 AAA 1,250 1,365,625
Connecticut St Health & Ed/Waterbury Hosp Ser B FSA+ 7% 7/1/2020 AAA 100 105,625
Connecticut St Health & Ed/William Backus Hosp Ser C 6 3/8%
7/1/2022 A 850 932,875
Connecticut St Health & Ed/Windham Mem Hosp Ser A 5 3/4% 7/1/2011 BBB 1,900 1,959,375
Connecticut St Health & Ed/Greenwich Hosp Ser A MBIA+ 5 3/4%
7/1/2016 AAA 1,350 1,454,625
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
CONNECTICUT TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Connecticut St Health & Ed/Vet Mem Med Ctr Ser A MBIA+ 5 1/2%
7/1/2026 AAA $ 1,000 $ 1,040,000
Connecticut St Health & Ed/Greenwich Hosp MBIA+ 5.80% 7/1/2026 AAA 2,125 2,279,063
Connecticut St Health & Ed/Hosp for Sp Care 5 1/2% 7/1/2027 BBB 2,345 2,359,656
Connecticut St Health & Ed/William Backus Hosp Ser D
AMBAC+ 5 3/4% 7/1/2027 AAA 1,000 1,071,250
Puerto Rico Pub Bldg Auth Ser A AMBAC+ 5 1/2% 7/1/2021 AAA 565 589,013
Total 13,157,107
- ----------------------------------------------------------------------------------------------------------------------============
Housing 10.74% Connecticut St Health & Ed/Hebrew Home & Hosp Ser B
FHA+ 5.20% 8/1/2038 AAA 1,000 991,250
Connecticut St Hsg Fin Auth Sub Ser D-2 AMT+++ 5.60% 11/15/2021 AA 535 545,031
Connecticut St Hsg Fin Auth Sub Ser A-2 AMT+++ 6.45% 5/15/2022 AA 1,100 1,152,250
Connecticut St Hsg Fin Auth Ser B 6 3/4% 11/15/2023 Aa 1,605 1,743,431
Connecticut St Hsg Fin Auth AMBAC+ 5 5/8% 6/15/2027 AAA 500 519,375
Connecticut St Hsg Fin Auth Sub Ser F-2 AMT+++ 6% 11/15/2027 AA 1,500 1,582,500
Connecticut St Hsg Fin Auth Sub Ser D-2 AMT+++ 6.20% 11/15/2027 AA 1,740 1,818,300
Connecticut St Hsg Fin Auth Sub Ser D-1 5.55% 11/15/2028 AA 1,690 1,728,025
Connecticut St Hsg Fin Auth Sub Ser C-2 5.85% 11/15/2028 AA 995 1,037,287
Connecticut St Hsg Fin Auth Ser C AMT+++ 5 1/2% 11/15/2035 AA 1,775 1,819,375
Total 12,936,824
- ----------------------------------------------------------------------------------------------------------------------============
Industrial Revenue Bonds 7.94% Connecticut St Dev Auth/Pfizer Inc Proj 6.55% 2/15/2013 Aaa 3,570 3,909,150
Connecticut St Dev Auth/Watson Foods Inc AMT+++ 5.90% 6/1/2028 BBB* 1,000 982,500
Connecticut St Dev Auth/Pfizer Inc Proj AMT+++ 7% 7/1/2025 AAA 2,500 2,875,000
Puerto Rico Ind Med & Environmental/Warner Lambert 7.60% 5/1/2014 AA 1,750 1,807,155
Total 9,573,805
- ----------------------------------------------------------------------------------------------------------------------============
Miscellaneous 8.95% Connecticut St Dev Auth/Govt Lease Rev MBIA+ 6.60% 6/15/2014 AAA 500 562,500
New Haven CT Air Rights Pkg MBIA+ 6 1/2% 12/1/2015 AAA 9,475 10,221,156
Total 10,783,656
- ----------------------------------------------------------------------------------------------------------------------============
Power 10.26% Puerto Rico Elec Pwr Auth 4 1/2% 7/1/2019 AAA 2,000 1,892,500
Puerto Rico Elec Pwr Auth Ser EE 4 3/4% 7/1/2024 BBB 11,000 10,477,500
Total 12,370,000
- ----------------------------------------------------------------------------------------------------------------------============
Solid Waste 7.59% Connecticut St Resource Recovery/American Ref Fuel Ser A
AMT+++ 6.45% 11/15/2022 A 4,985 5,190,631
Eastern CT Resource Recovery/Wheelabrator Lisbon Proj
AMT+++ 5 1/2% 1/1/2020 BBB 4,000 3,955,000
Total 9,145,631
- ----------------------------------------------------------------------------------------------------------------------============
Transportation 2.11% Connecticut St Spcl Tax Obli FGIC+ 6.10% 10/1/2011 AAA 1,000 1,116,250
Puerto Rico Commonwealth Hwy SerW 5 1/2% 7/1/2015 A 600 645,750
Puerto Rico Commonwealth Hwy Ser Y 5 1/2% 7/1/2026 A 750 786,563
Total 2,548,563
- ----------------------------------------------------------------------------------------------------------------------============
Water and Sewer .66% Connecticut St Dev Auth Wtr Fac Rev SerA AMBAC+ AMT+++ 5 3/4%
7/1/2028 AAA 250 258,437
Connecticut St Dev Auth Wtr AMT+++ 6.15% 4/1/2035 AA 500 540,000
Total 798,437
------------------------------------------------------------------------------------============
Total Municipal Bonds 97.73% (Cost $112,064,124) 117,781,218
==================================================================================================================================
Other Assets, Less Liabilities 2.27%
==================================================================================================================================
Cash and Receivables, Net of Liabilities 2,733,831
==================================================================================================================================
Net Assets 100.00% $120,515,049
==================================================================================================================================
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
CONNECTICUT TAX-FREE INCOME FUND March 31, 1999
==================================================================================================================================
<S> <C> <C>
Net asset value ($120,515,049 / 11,364,862 shares outstanding) $10.60
Maximum offering price $11.13
</TABLE>
* This investment has not been rated by an independent ratings service but
is, in Lord Abbett's opinion, of comparable quality.
+ Insured or guaranteed by the indicated municipal bond insurance
corporation or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
March 31, 1999. See page 1 for additional information.
+++ Income from these investments may be subject to the Alternative Minimum
Tax.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Statement of Net Assets
MISSOURI TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Prerefunded 26.69% Cape Girardeau MO Wtrwks Sys Rev FGIC+ 6.40% 3/1/2012 AAA $ 1,150 $ 1,236,250
Central MO St Univ Rev MBIA+ 7% 7/1/2014 AAA 150 163,875
Clay Co MO Pub Bldg Auth Leasehold Rev FGIC+ 7% 5/15/2014 AAA 1,000 1,141,250
Kansas City MO Arpt Rev Ser B FSA+ 6 7/8% 9/1/2014 AAA 1,490 1,713,500
Kansas City MO Wtr Rev Ser D 6.65% 12/1/2013 AAA 2,800 3,174,500
Missouri St Regional Convention Ser A 6.90% 8/15/2021 AAA 5,000 5,606,250
Missouri St Health & Ed Facs Rev/St Lukes MBIA+ 7% 11/15/2013 AAA 1,030 1,136,863
Missouri St Health & Ed Facs Rev/St Louis Univ 6.35% 10/1/2014 AAA 2,000 2,252,500
Missouri St Health & Ed Facs Rev/SSM Hlth Care MBIA+ 6 1/4%
6/1/2016 AAA 345 377,775
Missouri St Health & Ed Facs Rev/BJC Hlth Ser A 6 1/2% 5/15/2020 AAA 4,900 5,543,125
Platte Co MO Reorg Sch Dist Ctfs 7 1/8% 1/1/2011 AAA 500 514,130
Puerto Rico Elec Pwr Auth RIBS FSA+ 8.328% 7/1/2023++ AAA 2,500 2,912,500
Puerto Rico Tel Auth Rev RIBS MBIA+ 7.475% 1/16/2015++ AAA 1,000 1,095,000
Springfield MO Sch Dist No 12 Ser A FGIC+ 6 3/4% 3/1/2011 AAA 1,225 1,296,969
St Louis MO Land Clearance Rev 7 3/4% 7/1/2021 AAA 2,165 2,354,437
St Louis MO Sch Dist FGIC+ 6% 4/1/2012 AAA 1,275 1,361,062
St Louis MO Wtr Rev FGIC+ 6% 7/1/2014 AAA 2,250 2,511,562
University of MO Rev Ser A AMBAC+ 6 1/2% 11/1/2011 AAA 2,000 2,132,500
Total 36,524,048
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation State 8.46% Missouri St 4th St Bldg Ser A 4 1/2% 6/1/2020 AAA 2,865 2,696,681
Missouri St Wtr Pollution Ctrl Ser A 4 1/2% 6/1/2020 AAA 2,005 1,887,206
Puerto Rico Commonwealth RIBS MBIA+ 8.194% 7/1/2008++ AAA 1,000 1,138,750
Puerto Rico Commonwealth RIBS FSA+ 8.482% 7/1/2020++ AAA 4,000 4,480,000
Puerto Rico Commonwealth 5 3/8% 7/1/2025 A 1,335 1,375,050
Total 11,577,687
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation Local 2.87% Columbia MO Spcl Oblig Cap Imp 5 1/2% 2/1/2016 A 500 516,875
Fort Zumwalt MO Sch Dist Imp Corp Leasehold Rev
AMBAC+ 5.60% 3/1/2017 Aaa 500 533,750
Greene Co MO Reorg Sch Dist 5 3/4% 3/1/2016 AA 1,785 1,905,487
Kansas City MO Sch Dist 4.85% 3/1/2018 AA 1,000 977,500
Total 3,933,612
- ----------------------------------------------------------------------------------------------------------------------============
Education 3.85% Missouri St Health & Ed Facs/Maryville Univ 5 3/4% 6/15/2017 Baa 400 411,000
University of MO Rev 5 1/2% 11/1/2017 AA 3,500 3,661,875
University MO Health Facs Rev SerA AMBAC+ 5.60% 11/1/2026 AAA 1,140 1,198,425
Total 5,271,300
------------------------------------------------------------------------------------============
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
MISSOURI TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Health and Hospital 17.14% Hannibal MO Ind Dev Auth Health Facs Rev Ser A FSA+ 5 5/8%
3/1/2012 AAA $ 2,170 $ 2,324,612
Hannibal MO Ind Dev Auth Health Facs Rev Ser A FSA+ 5 3/4%
3/1/2022 AAA 1,250 1,334,375
Jackson Co MO Ind Dev Rev/St Joseph Hlth Ctr 7% 7/1/2022 Baa 1,500 1,629,375
Missouri St Health & Ed Facs Rev/Heartland Hlth Sys
AMBAC+ 6.35% 11/15/2017 AAA 3,600 3,897,000
Missouri St Health & Ed Facs Rev/Hlth Midwest Ser B MBIA+ 6 1/4%
2/15/2022 AAA 2,175 2,321,813
Missouri St Health & Ed Facs/Lutheran Senior Svc 5 7/8% 2/1/2023 BBB* 500 516,250
North Kansas City Hosp Rev AMBAC+ 4 3/4% 11/15/2023 Aaa 6,420 6,099,000
Puerto Rico Ind Tourist Ed Ser A 5 5/8% 7/1/2017 BBB 375 382,031
University MO Health Facs Rev RIBS AMBAC+ 6.845% 11/1/2028++ Aaa 5,000 4,943,750
Total 23,448,206
- ----------------------------------------------------------------------------------------------------------------------============
Housing 9.77% Missouri St Hsg Dev Comm Mtg Rev Ser A GNMA+ AMT+++ 6 3/4%
6/1/2024 AAA 330 348,150
Missouri St Hsg Dev Comm Mtg Rev Ser B GNMA+ AMT+++ 6.40%
12/1/2024 AAA 2,075 2,168,375
Missouri St Hsg Dev Comm Mtg Rev Ser A GNMA+ AMT+++ 6.22% 3/1/2026 AAA 4,865 5,120,413
Missouri St Hsg Dev Comm Mtg RevSer B-2 GNMA+ AMT+++ 5 1/2%
3/1/2025 AAA 1,210 1,226,638
Missouri St Hsg Dev Comm Mtg Rev Ser E-1 GNMA+ FNMA+ AMT+++
Zero Coupon 3/1/2029 AAA 3,470 680,988
Missouri St Dev Fin Brd/Quality Hill Proj Ser A ASSET GTY+ 5.60%
9/15/2028 AA 3,730 3,781,288
Puerto Rico Hsg Fin Corp Mtg RevSer B GNMA+ 7.65% 10/15/2022 AAA 35 36,619
Total 13,362,471
- ----------------------------------------------------------------------------------------------------------------------============
Industrial Revenue Bonds 8.02% Missouri St Dev Fin Wst Disp/Procter & Gamble AMT+++ 5.20%
3/15/2029 AA 8,750 8,739,063
Puerto Rico Tel Auth Rev RIBS MBIA+ 7.184% 1/25/2007++ AAA 2,000 2,237,500
Total 10,976,563
- ----------------------------------------------------------------------------------------------------------------------============
Miscellaneous 2.93% St Louis Co MO Ind Dev Rev Arena Proj AMT+++ 7 7/8% 12/1/2024 BBB* 2,000 2,180,000
St Louis MO Land Clearance Redev Auth RevSer B MBIA+ 5.30%
7/1/2016 AAA 500 517,500
St Louis MO Land Clearance Redev Auth RevSer A MBIA+ 5 1/8%
7/1/2021 AAA 250 251,562
St Louis MO Pkg Facs Rev MBIA+ 5 3/8% 12/15/2021 AAA 10 10,287
Virgin Islands Pub Fin Auth SerE 6% 10/1/2022 BBB* 1,000 1,042,500
Total 4,001,849
- ----------------------------------------------------------------------------------------------------------------------============
Pollution Control Revenue 8.50% Missouri St Environmental Imp & Energy SerA 6.55% 7/1/2014 Aa 3,000 3,281,250
Missouri St Environmental Imp & Energy SerA 5 3/4% 1/1/2016 Aa 2,400 2,547,000
Missouri St Environmental Imp & Energy SerE 5 5/8% 7/1/2016 Aa 900 948,375
Missouri St Environmental Imp & Energy SerB FGIC+ 7.20% 7/1/2016 Aa 2,250 2,601,563
Missouri St Environmental Imp & Energy SerD 5.90% 1/1/2019 Aa 2,100 2,254,875
Total 11,633,063
- ----------------------------------------------------------------------------------------------------------------------============
Power 1.49% Guam Pwr Auth Rev Ser A AMBAC+ 5 1/4% 10/1/2023 AAA 2,000 2,040,000
- ----------------------------------------------------------------------------------------------------------------------============
Transportation 10.98% Lake Of The Ozarks Co Brdg Corp 5 1/4% 12/1/2020 BBB* 1,500 1,486,875
Lake Of The Ozarks Co Brdg Corp 5 1/4% 12/1/2026 BBB* 3,000 2,947,500
Puerto Rico Commonwealth Hwy Ser Y 5 1/2% 7/1/2036 A 1,250 1,339,062
Puerto Rico Commonwealth Hwy MBIA+ 4 3/4% 7/1/2038 AAA 7,500 7,228,125
St Louis MO Arpt Rev FGIC+ AMT+++ 5 1/4% 7/1/2022 AAA 2,000 2,015,000
Total 15,016,562
- ----------------------------------------------------------------------------------------------------------------------============
Water and Sewer 1.18% Missouri St Environmental Imp MBIA+ AMT+++ 5.95% 11/1/2019 AAA 1,500 1,616,250
Total Municipal Bonds 101.88% (Cost $132,271,537) 139,401,611
==================================================================================================================================
Other Assets, Less Liabilities (1.88)%
==================================================================================================================================
Cash 5,778,080
- ----------------------------------------------------------------------------------------------------------------------============
Receivable for: Securities sold 1,070,230
Interest 1,865,629
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
MISSOURI TAX-FREE INCOME FUND March 31, 1999
==================================================================================================================================
<S> <C> <C>
Capitalstock sold $ 59,492
Total Other Assets 8,773,431
- ----------------------------------------------------------------------------------------------------------------------============
Payable for: Securities purchased 10,619,198
Distributions 416,947
Capital stock reacquired 190,681
Other 113,065
Total Liabilities 11,339,891
- ----------------------------------------------------------------------------------------------------------------------============
Cash and Receivables, Net of Liabilities (2,566,460)
==================================================================================================================================
Net Assets 100.00% $136,835,151
==================================================================================================================================
Net asset value ($136,835,151 / 25,869,063 shares outstanding) $5.29
Maximum offering price $5.55
</TABLE>
* This investment has not been rated by an independent ratings service but
is, in Lord Abbett's opinion, of comparable quality.
+ Insured or guaranteed by the indicated municipal bond insurance
corporation or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
March 31, 1999. See page 1 for additional information.
+++ Income from these investments may be subject to the Alternative Minimum
Tax.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Statement of Net Assets
HAWAII TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Prerefunded 10.54% Puerto Rico Commonwealth 6.45% 7/1/2017 AAA $ 2,575 $ 2,929,063
Puerto Rico Commonwealth 6 1/2% 7/1/2023 AAA 1,250 1,421,875
Puerto Rico Commonwealth 6% 7/1/2026 AAA 1,000 1,143,750
Puerto Rico Elec Pwr Auth RIBS FSA+ 8.328% 7/1/2023++ AAA 1,500 1,747,500
Puerto Rico Tel Auth Rev RIBS MBIA+ 7.475% 1/16/2015++ AAA 800 876,000
Total 8,118,188
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation State 19.72% Hawaii St Ser CP FGIC+ 5% 10/1/2016 AAA 900 901,125
Hawaii St Ser CR 4 3/4% 4/1/2018 AAA 3,000 2,895,000
Hawaii St Ser BZ 6% 10/1/2010 A 500 561,875
Hawaii St Ser BZ 6% 10/1/2012 A 500 561,875
Hawaii St Ser CA FGIC+ 8% 1/1/2013 AAA 2,000 2,650,000
Puerto Rico Commonwealth 6.35% 7/1/2010 AAA 1,285 1,456,869
Puerto Rico Commonwealth RIBS FSA+ 8.482% 7/1/2020++ AAA 3,000 3,360,000
Puerto Rico Commonwealth 4 1/2% 7/1/2023 A 2,500 2,306,250
Puerto Rico Commonwealth 5% 7/1/2027 BBB 500 492,500
Total 15,185,494
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation Local 10.98% Hawaii Co HI Ser A FGIC+ 5.60% 5/1/2013 AAA 1,780 1,933,525
Honolulu HI City & Co Ser A MBIA+ 5% 11/1/2015 AAA 405 428,794
Honolulu HI City & Co Ser A MBIA+ 5% 11/1/2015 AAA 1,095 1,100,475
Honolulu HI City & Co FGIC+ 6% 12/1/2015 AAA 1,000 1,132,500
Honolulu HI City & Co Ser A FGIC+ 5 1/2% 9/1/2016 AAA 555 609,112
Honolulu HI City & Co Ser A FGIC+ 5 1/2% 9/1/2016 AAA 445 465,025
Honolulu HI City & Co Ser B FGIC+ 5% 11/1/2016 AAA 235 250,275
Honolulu HI City & Co Ser B FGIC+ 5% 11/1/2016 AAA 265 265,331
Honolulu HI City & Co Ser B 5% 7/1/2023 AAA 1,000 976,250
Kauai Co HI Ser B MBIA+ 5 1/4% 8/1/2017 AAA 195 198,169
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
HAWAII TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Maui Co HI Ser A MBIA+ 5 3/4% 6/1/2016 AAA $ 1,035 $ 1,095,806
Total 8,455,262
- ----------------------------------------------------------------------------------------------------------------------============
Education 2.12% Puerto Rico Indl Tourist Edl Med & Environmental Inter AM
Univ Ser A MBIA+ 5% 10/1/2022 AAA 1,350 1,344,937
University of HI Ser G AMBAC+ 5.45% 10/1/2006 AAA 275 291,500
Total 1,636,437
- ----------------------------------------------------------------------------------------------------------------------============
Finance 1.44% Hawaii St Dept Bdg & Fin/Pali Monn Med Ctr Proj 7.65% 7/1/2019 AAA 1,000 1,106,250
- ----------------------------------------------------------------------------------------------------------------------============
Health and Hospital 16.69% Hawaii St Dept Bdg & Fin/St Francis Med Ctrs FSA+ 6 1/2% 7/1/2022 AAA 1,200 1,303,500
Hawaii St Dept Bdg & Fin/Wilcox Mem Hosp 5 1/4% 7/1/2013 BBB 1,200 1,194,000
Hawaii St Dept Bdg & Fin/Kaiser Ser A 5.15% 3/1/2015 A 2,000 1,977,500
Hawaii St Dept Bdg & Fin/Spcl Purp Rev Kapi'olani Hlth Care
6.20% 7/1/2016 A 1,000 1,078,750
Hawaii St Dept Bdg & Fin/Spcl Purp Rev Kapi'olani Hlth Care
6 1/4% 7/1/2021 A 2,000 2,162,500
Hawaii St Dept Bdg & Fin/Queens HlthSys Ser B MBIA+ 5% 7/1/2028 AAA 2,250 2,193,750
Hawaii St Dept Bdg & Fin/Wilcox Mem Hosp 5 1/2% 7/1/2028 BBB 1,350 1,316,250
Puerto Rico Ind Med & Environmental/St Luke Hosp 6 1/4% 6/1/2010 BBB 1,390 1,464,712
Puerto Rico Ind Tourist Ed Med & Environmental Ctrl Fac Gr A
MBIA+ 6 1/4% 7/1/2024 AAA 150 166,687
Total 12,857,649
- ----------------------------------------------------------------------------------------------------------------------============
Housing 4.73% Hawaii St Hsg Fin & Dev Corp Univ of HIFaculty Hsg Prj
AMBAC+ 5.65% 10/1/2016 AAA 1,000 1,053,750
Hawaii St Hsg Fin & Dev Corp Ser A FNMA+ AMT+++ 7.10% 7/1/2024 Aa 960 1,015,200
Hawaii St Hsg Fin & Dev Corp Univ of HIFacs Hsg Proj
AMBAC+ 5.70% 10/1/2025 AAA 500 527,500
Hawaii St Hsg Fin & Dev Corp 5.30% 7/1/2028 Aa 1,000 1,007,500
Puerto Rico Hsg Fin Corp Mtg Rev Ser B GNMA+ 7.65% 10/15/2022 AAA 35 36,619
Total 3,640,569
- ----------------------------------------------------------------------------------------------------------------------============
Industrial Revenue Bonds 2.01% Puerto Rico Ind Med & Environmental Ctrl/Warner Lambert Co Proj
7.60% 5/1/2014 A 1,500 1,548,990
- ----------------------------------------------------------------------------------------------------------------------============
Miscellaneous .97% Hawaii St Kapolei St Off Bldg COP Ser A AMBAC+ 5% 5/1/2018 AAA 750 748,125
- ----------------------------------------------------------------------------------------------------------------------============
Power 19.01% Hawaii St Dept Bdg & Fin/HI Elec Ser C MBIA+ AMT+++ 7 3/8%
12/1/2020 AAA 2,500 2,678,125
Hawaii St Dept Bdg & Fin RIBS AMT++ 7.496% 12/15/2023 AA 5,000 5,206,250
Hawaii St Dept Bdg & Fin/HI Elec Ser A MBIA+ AMT+++ 6.60% 1/1/2025 AAA 2,795 3,095,463
Hawaii St Dept Bdg & Fin/HI Elec Ser A MBIA+ 4.95% 4/1/2012 AAA 1,000 1,031,250
Puerto Rico Elec Pwr Auth Ser U 6% 7/1/2014 BBB 750 825,000
Puerto Rico Elec Pwr Auth Ser N 7 1/8% 7/1/2014 BBB 365 373,917
Puerto Rico Elec Pwr Auth Ser EE 4 3/4% 7/1/2024 BBB 1,500 1,428,750
Total 14,638,755
- ----------------------------------------------------------------------------------------------------------------------============
Transportation 5.53% Hawaii St Arpt Sys Rev Ser M MBIA+ AMT+++ 7% 7/1/2018 AAA 2,000 2,160,000
Hawaii St Hbr Cap Imp Rev FGIC+ AMT+++ 6 1/4% 7/1/2015 AAA 500 545,625
Hawaii St Hbr Cap Imp Rev FGIC+ AMT+++ 6 3/8% 7/1/2024 AAA 500 548,750
Puerto Rico Commonwealth Hwy Ser V 6 5/8% 7/1/2012 A 500 544,375
Puerto Rico Commonwealth Hwy Ser A 5% 7/1/2022 A 465 458,025
Total 4,256,775
- ----------------------------------------------------------------------------------------------------------------------============
Water and Sewer 3.74% Honolulu HI City & Co Bd Wtr Supply Wtr SysRev 5.80% 7/1/2021 AA 1,000 1,065,000
Honolulu HI 2nd Bd Resolution-JrSer FGIC+ 4 1/2% 7/1/2028 AAA 2,000 1,812,500
Total 2,877,500
------------------------------------------------------------------------------------============
Total Municipal Bonds 97.48% (Cost $70,912,580) 75,069,994
------------------------------------------------------------------------------------============
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
HAWAII TAX-FREE INCOME FUND March 31, 1999
==================================================================================================================================
<S> <C> <C>
Other Assets, Less Liabilities 2.52%
==================================================================================================================================
Cash and Receivables, Net of Liabilities 1,943,232
==================================================================================================================================
Net Assets 100.00% $ 77,013,226
==================================================================================================================================
Net asset value ($77,013,226 / 14,907,576 shares outstanding) $5.17
Maximum offering price $5.43
</TABLE>
+ Insured or guaranteed by the indicated municipal bond insurance
corporation or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
March 31, 1999. See page 1 for additional information.
+++ Income from these investments may be subject to the Alternative Minimum
Tax.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Statement of Net Assets
WASHINGTON TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Prerefunded 22.97% Douglas Co WA Pub Util Dist No 1 Wells Hydroelec Ser A
8 3/4% 9/1/2018 A $ 150 $ 200,437
Mason Co WA Pub Util Dist No 3 6.35% 1/1/2013 A 1,040 1,131,000
Mount Vernon WA AMBAC+ 6.85% 12/1/2014 AAA 1,285 1,472,931
Pike Place Mkt Preservation Ser A 6.60% 12/1/2021 AA 1,000 1,075,000
Port Seattle WA Rev Ser B 7.60% 12/1/2009 AA 525 565,031
Puerto Rico Elec Pwr Auth RIBS FSA+ 8.328% 7/1/2023++ AAA 3,500 4,077,500
Puerto Rico Tel Auth Rev RIBS MBIA+ 7.475% 1/16/2015++ AAA 500 547,500
Renton WA Wtr & Sewer Rev 6.55% 11/1/2013 A 1,000 1,130,000
Tacoma WA Elec Sys Rev RIBS AMBAC+ 9.347% 1/2/2015++ AAA 3,000 3,416,250
Washington St Higher Ed Facs 7% 10/1/2015 AAA 250 287,500
Total 13,903,149
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation State 18.95% Puerto Rico Commonwealth 5 1/4% 7/1/2018 A 750 781,875
Puerto Rico Commonwealth 5 3/8% 7/1/2025 A 1,000 1,030,000
Washington St Ser B 5 3/4% 5/1/2016 AA 3,550 3,780,750
Washington St Ser A 5 3/4% 9/1/2019 AA 3,680 3,933,000
Washington St 5% 1/1/2024 AA 2,000 1,945,000
Total 11,470,625
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation Local 4.00% King Co WA Ser B 4 1/2% 1/1/2024 AA 320 294,400
Seattle WA Ser F 5 1/8% 12/15/2028 AA 2,000 2,002,500
Whatcom Co WA 5 3/4% 12/1/2012 A 115 122,188
Total 2,419,088
- ----------------------------------------------------------------------------------------------------------------------============
Education 1.82% Washington St Univ Rev AMBAC+ 5% 4/1/2032 AAA 1,135 1,098,113
- ----------------------------------------------------------------------------------------------------------------------============
Housing 6.99% Skagit Co WA Hsg Auth Low Income Hsg Assistance GNMA+ 7%
6/20/2035 AAA 750 825,000
Snohomish Co WA Hsg Auth Rev AMT+++ 6.40% 5/1/2027 A 500 534,375
Washington St Hsg Fin Comm Sing Fam Mtge Rev Ser A
GNMA+ AMT+++ 6.65% 7/1/2016 AAA 420 429,975
Washington St Hsg Fin Comm Sing Fam Mtge Rev Ser A
GNMA+ AMT+++ 7.05% 7/1/2022 AAA 1,345 1,439,150
Washington St Hsg Fin Comm Sing Fam Ser 2A
GNMA+ AMT+++ 6.30% 12/1/2027 Aaa 940 1,001,100
Total 4,229,600
------------------------------------------------------------------------------------============
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
WASHINGTON TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Miscellaneous 1.92% Bellevue WA Convention Ctr Auth Spl Oblig Rev
MBIA+ Zero Coupon 2/1/2024 AAA $ 1,400 $ 386,750
CDP-King Co III WA Lease Rev MBIA+ 5 1/4% 6/1/2026 AAA 500 505,000
Spokane WA Pub Facs Dist AMBAC+ 6 1/2% 1/1/2018 AAA 250 267,500
Total 1,159,250
- ----------------------------------------------------------------------------------------------------------------------============
Power 28.64% Chelan Cnty WA Pub Util Dist No 1 Wells MBIA+ Zero Coupon 6/1/2024 AAA 1,860 504,525
Chelan Cnty WA Pub Util Columbia Riv Rock MBIA+ Zero Coupon
6/1/2028 AAA 14,985 3,296,700
Chelan Cnty WA Pub Util Dist Ser A MBIA+ AMT+++ 6.40% 7/1/2017 AAA 1,000 1,136,250
Chelan Cnty WA Pub Util Dist Ser D MBIA+ AMT+++ 6.35% 7/1/2028 AAA 2,425 2,740,250
Douglas Cnty WA Pub Util Dist No 1 Wells Hydroelec Ser B
AMBAC+ 8 3/4% 9/1/2006 AAA 5,020 5,904,373
Douglas Cnty WA Pub Util Dist No 1 Wells Hydroelec Ser A 8 3/4%
9/1/2018 A 350 446,687
Grant Cnty Pub Util Dist No MBIA+ AMT+++ 5 3/8% 1/1/2018 AAA 1,000 998,750
Lewis Cnty Wash Pub Util Dist 5 1/2% 10/1/2022 AA 755 773,875
Washington St Pub Pwr Supply RIBS 7.087% 7/1/2017++ AA 1,500 1,528,125
Total 17,329,535
- ----------------------------------------------------------------------------------------------------------------------============
Transportation 10.35% Central Puget Sound WA FGIC+ 4 3/4% 2/1/2028 AAA 3,000 2,816,250
Port Kalama WA Rev Ser B 5 5/8% 12/1/2015 Baa 400 414,000
Port Seattle WA Rev Ser B AMT+++ 6.70% 11/1/2010 AA 20 22,150
Port Seattle WA Rev Ser B AMT+++ 6.70% 11/1/2010 AA 230 250,413
Puerto Rico Commonwealth Hwy 5 1/2% 7/1/2026 A 1,000 1,048,750
Puerto Rico Commonwealth Hwy Ser Y 5 1/2% 7/1/2036 A 1,600 1,714,000
Total 6,265,563
- ----------------------------------------------------------------------------------------------------------------------============
Water and Sewer 6.36% Pasco WA Wtr & Sewer Rev MBIA+ 6.40% 6/1/2014 AAA 865 963,394
Richland WA Wtr & Sewer Rev MBIA+ 6 1/4% 4/1/2012 AAA 250 264,375
Seattle WA Drain & Wtr 5 3/4% 12/1/2022 Aa 1,500 1,582,500
Seattle WA Wtr Sys Rev 5 1/4% 12/1/2023 AA 1,040 1,041,300
Total 3,851,569
Total Municipal Bonds 102.00% (Cost $58,634,019) 61,726,492
==================================================================================================================================
Other Assets, Less Liabilities (2.00)%
==================================================================================================================================
Cash 3,133,674
- ----------------------------------------------------------------------------------------------------------------------============
Receivable for: Securities sold 12,862,650
Interest 847,919
Capitalstock sold 69,760
Total Other Assets 16,914,003
------------------------------------------------------------------------------------============
Payable for: Securities purchased 17,808,693
Distributions 185,232
Capital stock reacquired 62,124
Other 67,480
Total Liabilities 18,123,529
- ----------------------------------------------------------------------------------------------------------------------============
Cash and Receivables, Net of Liabilities (1,209,526)
==================================================================================================================================
Net Assets 100.00% $ 60,516,966
==================================================================================================================================
Net asset value ($60,516,966 / 11,411,384 shares outstanding) $5.30
Maximum offering price $5.56
</TABLE>
+ Insured or guaranteed by the indicated municipal bond insurance
corporation or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
March 31, 1999. See page 1 for additional information.
+++ Income from these investments may be subject to the Alternative Minimum
Tax.
See Notes to Financial Statements.
22
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
MINNESOTA TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Prerefunded 15.02% Brainerd MN Health Care Facs Rev/Benedictine Hlth/Joseph Proj
8 3/8% 2/15/2020 AAA $ 775 $ 824,065
Minneapolis & St Paul MN Hsg & Redev Auth Health Care Sys Rev
Ser A MBIA+ 6 3/4% 8/15/2014 AAA 245 258,475
Minneapolis & St Paul MN Hsg & Redev Auth Health Care Sys Rev
Ser B 8% 8/15/2014 AAA 650 702,000
Minneapolis MN Hosp Rev MN Children's MedCtr Proj C 7.30% 12/1/2006 AAA 200 219,000
Minneapolis MN Hosp Rev MN Children's Med Ctr Proj C 7% 12/1/2020 AAA 200 218,000
Minnesota Pub Facs Auth Wtr/PollCtrl Rev Ser A 6 1/4% 3/1/2016 AAA 100 111,875
St Louis Park MN Health Care Facs Rev 9 1/4% 1/1/2020 AAA 100 106,312
Western MN Mun Pwr Agy MN 1977 Ser A 6 3/8% 1/1/2016 AAA 200 227,750
Total 2,667,477
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation State 1.54% Minnesota St 5 1/4% 8/1/2014 AAA 265 273,612
- ----------------------------------------------------------------------------------------------------------------------============
General Obligation Local 20.21% Champlin MN MBIA+ 5.60% 2/1/2021 AAA 250 260,313
Farmington MN Indpt Sch Dist 5.20% 2/1/2023 Aaa 500 508,125
Lakeville MN Indpt Sch Dist 5 1/8% 2/1/2022 Aa 500 505,000
Minneapolis MN 5 1/8% 10/1/2020 AAA 500 507,500
Minneapolis MN Special Sch Dist FGIC+ 5 3/8% 2/1/2014 AAA 250 257,188
Minneapolis MN SpecialSch Dist 5 1/8% 2/1/2018 AA 500 503,125
North St Paul Maplewood MN Indpt Sch Dist 5 1/8% 2/1/2020 AA 550 554,813
St Michael MN Indpt Sch Dist No. 885 5% 2/1/2025 Aa 250 249,688
Windom MNIndpt Sch Dist 4 3/4% 2/1/2019 Aa 250 243,750
Total 3,589,502
- ----------------------------------------------------------------------------------------------------------------------============
Education 5.94% Minnesota St Higher Ed Facs Auth Rev/Univ St Thomas Ser 4-A1
5 5/8% 10/1/2016 A 250 258,750
Minnesota St Higher Ed Facs Auth Rev/Macalister College 5.55%
3/1/2017 Aa 260 269,100
Minnesota St Higher Ed Facs Auth Rev/Univ of St Thomas 5.35%
4/1/2017 A 250 252,812
University of MN Ser A 5 3/4% 7/1/2018 AA 250 275,313
Total 1,055,975
- ----------------------------------------------------------------------------------------------------------------------============
Health and Hospital 22.56% Hastings MNHealth CareFacs Rev ACA+ 5.30% 9/15/2028 A 250 251,250
Minneapolis & St Paul MN Hsg & Redev Auth Health Care Sys Rev
Childrens Hlth SerA FSA+ 5.70% 8/15/2016 AAA 150 160,125
Minneapolis & St Paul MN Hsg & Redev Auth Health Care Sys
6.90% 10/15/2022 BBB 300 325,500
Minnesota Agric & Economic Dev Brd Rev 5% 12/1/2015 AAA 250 250,938
Minnesota Agric & Economic Dev Brd Rev Ser A MBIA+ 5 1/2%
11/15/2017 AAA 220 230,725
Minnesota Agric & Economic Dev Brd Rev AMBAC+ 5% 12/1/2023 AAA 350 347,375
Rochester MN Health Care Ser H RIBS 8.529% 11/15/2015++ AA 1,000 1,157,500
Rochester MN Health Care Facs Rev Ser A 5 1/2% 11/15/2027 AA 500 521,250
Rochester MN Health Care Facs Rev Ser A 5 1/2% 11/15/2027 AA 500 521,250
St Paul MN Hsg & Redev Auth Hosp RevSer A 5.70% 11/1/2015 BBB 250 241,563
Total 4,007,476
- ----------------------------------------------------------------------------------------------------------------------============
Housing 11.00% Fairbault Hsg & Redev Auth Ser A 5 1/4% 2/1/2028 A 500 499,375
Minnesota St Hsg Fin Agy Sing Fam Mtge Ser D AMT+++ 6.40% 7/1/2015 AA 250 263,750
Minnesota St Hsg Fin Agy Sing Fam Mtge Ser D AMT+++ 5.85% 7/1/2019 AA 210 217,350
Minnesota St Hsg Fin Agy Sing Fam Mtge Ser B AMT+++ 5.65% 7/1/2022 AA 250 255,937
Minnesota St Hsg Fin Agy Sing Fam Mtge Ser E RMK 5.90% 7/1/2025 AA 250 260,312
Minnesota St Hsg Fin Agy Sing Fam Mtge Ser B-1 RMK AMT+++ 6 3/4%
1/1/2026 AA 95 100,462
Minnesota St Hsg Fin Agy Sing Fam Mtge Ser G AMT+++ 6 1/4%
7/1/2026 AA 235 248,512
St Louis Park MN Multi-Fam Hsg FHA+ 6.15% 12/1/2016 Aa 100 107,375
Total 1,953,073
------------------------------------------------------------------------------------============
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
MINNESOTA TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Miscellaneous 3.87% St Cloud MN Ctfs Partn 5.90% 12/1/2017 BBB $ 200 $ 205,000
St Paul MN 4 3/4% 2/1/2019 AA 250 243,125
St Paul MN 4 3/4% 2/1/2025 AA 250 239,375
Total 687,500
- ----------------------------------------------------------------------------------------------------------------------============
Pollution Control Revenue 1.66% Minnesota Pub Facs Auth Wtr Poll Ctrl Rev Ser A 4 3/4% 3/1/2017 AAA 300 294,750
- ----------------------------------------------------------------------------------------------------------------------============
Power 7.35% Puerto Rico Elec Pwr Auth 4 1/2% 7/1/2019 AAA 500 473,125
Southern MN Mun Pwr Agy Pwr MBIA-IBC+ 5% 1/1/2016 AAA 500 499,970
Southern MN Mun Pwr Agy Pwr MBIA+ Zero Coupon 1/1/2021 AAA 1,000 332,500
Total 1,305,595
- ----------------------------------------------------------------------------------------------------------------------============
Transportation 6.96% Minneapolis Airports Ser A AMBAC+ 5% 1/1/2022 AAA 1,000 996,250
Minneapolis & St Paul MN Met AMT+++ 4 1/2% 1/1/2014 AAA 250 240,312
Total 1,236,562
- ----------------------------------------------------------------------------------------------------------------------============
Water and Sewer .92% Marshall MN Elec & Wtr Util FSA+ 6.45% 7/1/2011 AAA 150 163,875
Total Municipal Bonds 97.03% (Cost $16,898,289) 17,235,397
==================================================================================================================================
Other Assets, Less Liabilities 2.97%
==================================================================================================================================
Cash and Receivables, Net of Liabilities 526,988
==================================================================================================================================
Net Assets 100.00% $ 17,762,385
==================================================================================================================================
Net asset value ($17,762,385 / 3,457,765 shares outstanding) $5.14
Maximum offering price $5.40
</TABLE>
+ Insured or guaranteed by the indicated municipal bond insurance
corporation or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
March 31, 1999. See page 1 for additional information.
+++ Income from these investments may be subject to the Alternative Minimum
Tax.
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Statement of Net Assets
CALIFORNIA TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Prerefunded 18.42% California Ed Facs Auth Rev/Loyola Marymount Univ Ser B
6.60% 10/1/2022 AAA $ 1,400 $ 1,562,750
California Health Fac Fing Auth Rev/Cedar Knoll CA MTG+ 7 1/2%
8/1/2020 AAA 1,000 1,073,750
California Health Fac Fing Auth Rev/San Diego Hosp Assn Ser A
MBIA+ 6.95% 10/1/2021 AAA 1,600 1,766,000
East Bay CA Muni Util Dist Wtr Sys Rev AMBAC+ 6 1/2% 6/1/2017 AAA 7,935 9,085,575
East Bay CA Muni Util Dist Wtr Sys Rev MBIA+ 7 1/2% 6/1/2018 AAA 1,750 1,868,125
Metropolitan Wtr Dist So CA RIBS 8.843% 8/5/2022++ AAA 7,300 8,623,125
Northern CA Transmission Rev Proj Ser A MBIA+ 7% 5/1/2024 AAA 1,750 1,849,470
Puerto Rico Commonwealth 6% 7/1/2026 AAA 1,000 1,143,750
San Francisco CA Bay Area Rapid Trans Dist Sales Tax Rev
FGIC+ 6.60% 7/1/2012 AAA 1,540 1,674,750
San Francisco CA City & Co FGIC+ 6.10% 5/1/2025 AAA 2,000 2,237,500
San Francisco CA City & Co Pub Util Wtr Rev Ser A 6 1/2% 11/1/2017 AAA 5,000 5,475,000
Santa Clara CA Elec Rev Ser A MBIA+ 6 1/4% 7/1/2019 AAA 3,890 4,206,062
San Francisco Cnty Airports MBIA+ 6 3/4% 5/1/2020 AAA 770 873,950
Vallejo CA Rev Wtr Proj Imp Ser B FGIC+ 6 1/2% 11/1/2014 AAA 4,565 5,192,687
Total 46,632,494
------------------------------------------------------------------------------------============
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
CALIFORNIA TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
General Obligation Local 1.22% Chaffey CA Uni Sch Dist Ser A FGIC+ 5 1/2% 8/1/2023 AAA $ 2,900 $ 3,081,250
- ----------------------------------------------------------------------------------------------------------------------============
Education 19.96% California Cmnty College Fing Ser A MBIA+ 4 3/4% 10/1/2024 AAA 1,500 1,434,375
California Ed Facs Auth/Pooled College Proj 6 1/8% 4/1/2013 Baa 1,340 1,472,325
California Ed Facs Auth/Univ of San Francisco MBIA+ 6% 10/1/2016 AAA 1,500 1,676,250
California Ed Facs Auth/Pooled College Proj 6.30% 4/1/2021 Baa 1,000 1,085,000
California Ed Facs Auth AMBAC+ Zero Coupon 10/1/2022 Aaa 2,360 708,000
California Ed Facs Auth AMBAC+ Zero Coupon 10/1/2024 Aaa 1,330 359,100
California Ed Facs Auth/Univ of San Francisco MBIA+ 6% 10/1/2026 AAA 10,500 11,733,750
California Ed Facs Auth/California Institute of Technology 4 1/2%
10/1/2027 AAA 3,000 2,767,500
California Ed Facs Auth/California Institute of Technology 4 1/4%
10/1/2028 AAA 10,000 8,837,500
California St Univ Rev FGIC+ 5.90% 11/1/2021 AAA 5,200 5,674,500
California Ed Facs Auth Rev Residual CTFSSer 113 7.215%
12/1/2027++ AAA 6,000 6,202,500
San Francisco St Univ Fndtn ACA+ 5.20% 7/1/2019 A 1,000 998,750
University CA Rev AMBAC+ 6% 7/1/2026 AAA 6,825 7,575,750
Total 50,525,300
- ----------------------------------------------------------------------------------------------------------------------============
Finance 7.34% Orange Co CA Recovery CTFS Ser A MBIA+ 5 7/8% 7/1/2019 AAA 10,000 10,975,000
Orange Co CA Recovery CTFS Ser A MBIA+ 6% 7/1/2026 AAA 3,205 3,561,556
Riverside CoCAAsset Leasing Corp Lease Hold Rev MBIA+
Zero Coupon 6/1/2023 AAA 14,160 4,053,300
Total 18,589,856
- ----------------------------------------------------------------------------------------------------------------------============
Health and Hospital 3.74% Valley Hlth Sys CA ACA+ 6 1/2% 5/15/2025 A 8,575 9,464,656
- ----------------------------------------------------------------------------------------------------------------------============
Housing 5.69% California Hsg Fin Agy Rev Ser B MBIA+ AMT+++ Zero Coupon 2/1/2030 AAA 7,000 1,321,250
California Hsg Fin Agy Rev Ser A MBIA+ AMT+++ 5 1/2% 8/1/2039 AAA 250 254,063
California Hsg Fin Agy Rev Ser A FHA+ 7 3/8% 8/1/2017 Aa 5,640 5,865,600
California St Hsg Fin Agy Ser L MBIA+ AMT+++ 6.40% 8/1/2027 AAA 6,560 6,953,600
Total 14,394,513
- ----------------------------------------------------------------------------------------------------------------------============
Miscellaneous 12.33% Anaheim Pub Fing Auth Lease Rev FSA+ Zero Coupon 9/1/2033 AAA 22,070 3,696,725
Beverly Hills Fing Auth Lease Rev Ser A 5 1/4% 6/1/2028 AA 10,000 10,225,000
California St Pub Wks Bd Lease Rev PJ-B AMBAC+ 5 5/8% 3/1/2019 AAA 3,000 3,198,750
Chaffey Cmnty Clollege Dist MBIA+ 5.10% 9/1/2018 AAA 2,305 2,319,406
Concord CA Redev Agy 3rd Ser MBIA+ 8% 7/1/2018 AAA 35 35,717
Midpeninsula Regl Open Space AMBAC+ Zero Coupon 9/1/2030 AAA 2,020 381,275
Rohnert Park Cmnty Dev Agy MBIA+ Zero Coupon 8/1/2022 AAA 1,755 526,500
Rohnert Park Cmnty Dev Agy MBIA+ Zero Coupon 8/1/2024 AAA 1,755 473,850
Rohnert Park Cmnty Dev Agy MBIA+ Zero Coupon 8/1/2026 AAA 1,755 425,587
Rohnert Park Cmnty Dev Agy MBIA+ Zero Coupon 8/1/2028 AAA 1,755 383,906
Rohnert Park Cmnty Dev Agy MBIA+ Zero Coupon 8/1/2030 AAA 1,755 344,419
Rohnert Park Cmnty Dev Agy MBIA+ Zero Coupon 8/1/2032 AAA 1,755 309,319
Rohnert Park Cmnty Dev Agy MBIA+ Zero Coupon 8/1/2034 AAA 1,755 276,413
South San Francisco CA ACA+ 5% 9/1/2018 A 1,250 1,231,250
San Francisco CA St Bldg Auth RIBS AMBAC+ 7.472% 12/1/2021++ AAA 7,095 7,387,669
Total 31,215,786
- ----------------------------------------------------------------------------------------------------------------------============
Pollution Control Revenue 6.47% California Poll Ctrl Rev 5.90% 6/1/2014 AAA 5,000 5,637,500
California Poll Ctrl Rev/SoCA Edison AMBAC+ AMT+++ 6.40%
12/15/2024 AAA 9,810 10,741,950
Total 16,379,450
- ----------------------------------------------------------------------------------------------------------------------============
Power 9.89% Los Angeles CA Dept Wtr & Pwr 5 3/8% 9/1/2023 Aa 1,500 1,537,500
Los Angeles CA Dept Wtr & Pwr Elec Plt Rev FGIC+ 5.40% 11/15/2031 AAA 1,000 1,026,250
Northern CA Transmission Rev MBIA+ 6 1/2% 5/1/2016 AAA 4,250 4,643,125
Northern CA Transmission Rev RIBS MBIA+ 7.309% 4/29/2024++ AAA 8,500 8,956,875
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
CALIFORNIA TAX-FREE INCOME FUND March 31, 1999
Principal
Rating: S&P Amount
Investments or Moody's (000) Value
==================================================================================================================================
<S> <C> <C> <C> <C>
Palo Alto CA Util Rev Ser A 6 1/4% 6/1/2020 AA $ 1,610 $ 1,793,138
Sacramento CA Muni Util Dist RIBS FGIC+ 9.477% 8/15/2018++ AAA 6,000 7,080,000
Total 25,036,888
- ----------------------------------------------------------------------------------------------------------------------============
Solid Waste 1.09% California Poll Ctrl Fin Aut/Solid Waste Rev/Browning Ferris
AMT+++ 6 3/4% 9/1/2019 A 2,600 2,765,750
- ----------------------------------------------------------------------------------------------------------------------============
Transportation 6.39% Los Angeles CA Hbr Rev Ser B AMT+++ 6 5/8% 8/1/2025 AA 1,000 1,091,250
Los Angeles CA Dept Arpts Rev Ontario Intl Arpt Ser A
FGIC+ AMT+++ 6% 5/15/2026 AAA 2,750 2,994,063
Puerto Rico Commonwealth Hwy & Transn MBIA+ 4 3/4% 7/1/2038 AAA 3,000 2,891,250
San Francisco CA City & Co Arpt Comm Intl Arpt Rev Ser I Issue 6
AMBAC+ AMT+++ 6 1/2% 5/1/2018 AAA 4,500 5,034,375
San Joaquin Hills CA Transn Comdor Ser A MBIA+ Zero Coupon
1/15/2036 AAA 3,750 562,500
San Francisco CA City & Co Arpt Comm Intl Arpt Rev 2nd Ser
Issue 2 MBIA+ 6 3/4% 5/1/2020 AAA 3,230 3,609,525
Total 16,182,963
- ----------------------------------------------------------------------------------------------------------------------============
Water and Sewer 6.85% Big Bear Lake Ca Wtr Rev Ref MBIA+ 6% 4/1/2022 AAA 1,500 1,721,250
East Bay CA Muni Util Dist Wastewtr Treatment Sys Rev
RIBS AMBAC+ 7.27% 6/1/2020++ AAA 1,750 1,911,875
East Bay Muni Util Dist Wtr Sys Rev MBIA+ 4 3/4% 6/1/2034 AAA 5,000 4,725,000
Los Angeles CA Wastewtr Rev MBIA+ 4% 6/1/2019 AAA 4,000 3,490,000
Vallejo CA Rev Wtr Imp Proj Ser A FSA+ 5 7/8% 5/1/2026 AAA 5,000 5,493,750
Total 17,341,875
Total Municipal Bonds 99.39% (Cost $238,620,265) 251,610,781
==================================================================================================================================
Other Assets, Less Liabilities 0.61%
==================================================================================================================================
Cash and Receivables, Net of Liabilities 1,549,561
==================================================================================================================================
Net Assets 100.00% $253,160,342
==================================================================================================================================
Class A Shares-Net asset value ($238,751,078 / 21,789,540 shares
outstanding) $10.96
Class A Shares-Maximum offering price $11.51
Class C Shares-Net asset value ($14,409,264 / 1,315,264 shares
outstanding) $10.96
</TABLE>
+ Insured or guaranteed by the indicated municipal bond insurance
corporation or Federal agency.
++ The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
March 31, 1999. See page 1 for additional information.
+++ Income from these investments may be subject to the Alternative Minimum
Tax.
See Notes to Financial Statements.
26
<PAGE>
Statements of Operations
<TABLE>
<CAPTION>
Six Months Ended 3/31/99
----------------------------------------------------------------------------
National New York Texas New Jersey Connecticut
Investment Income Fund Fund Fund Fund Fund
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Income
Interest $ 20,679,752 $ 8,910,748 $ 2,936,078 $ 5,563,690 $ 3,828,038
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fee 1,628,688 717,139 229,133 456,569 303,692
12b-1 distribution plan 1,115,159 407,738 136,700 249,570 145,895
Shareholder servicing 221,780 73,176 33,980 56,548 28,080
Reports to shareholders 47,338 21,163 6,636 13,315 8,835
Professional 34,629 19,038 9,371 20,646 10,800
Registration 23,529 2,078 1,196 2,961 590
Directors' fees 8,814 4,103 1,246 3,637 1,602
Other 23,021 12,744 3,399 8,376 8,867
Total expenses 3,102,958 1,257,179 421,661 811,622 508,361
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 17,576,794 7,653,569 2,514,417 4,752,068 3,319,677
- -----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
===================================================================================================================================
Net realized gain from investment transactions 5,893,757 1,518,405 145,529 1,556,174 463,744
- -----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments (15,951,634) (6,560,652) (2,290,244) (4,741,107) (2,264,384)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments (10,057,877) (5,042,247) (2,144,715) (3,184,933) (1,800,640)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 7,518,917 $ 2,611,322 $ 369,702 $ 1,567,135 $ 1,519,037
===================================================================================================================================
<CAPTION>
Six Months Ended 3/31/99
----------------------------------------------------------------------------
Missouri Hawaii Washington Minnesota California
Investment Income Fund Fund Fund Fund Fund
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Income
Interest $ 4,130,317 $ 2,385,491 $ 1,949,716 $ 463,890 $ 7,456,503
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fee 354,956 197,183 154,556 39,994 649,209
Management fee waived -- -- -- (39,994) --
12b-1 distribution plan 222,666 123,541 -- -- 425,977
Shareholder servicing 60,875 23,374 30,359 8,702 54,543
Reports to shareholders 10,361 5,893 4,602 1,029 19,098
Professional 11,467 8,413 6,519 5,245 17,701
Registration 1,780 431 584 906 1,780
Directors' fees 1,875 1,053 913 147 3,715
Other 5,320 5,942 3,512 2,038 10,105
Total expenses 669,300 365,830 201,045 18,067 1,182,128
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 3,461,017 2,019,661 1,748,671 445,823 6,274,375
- -----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
===================================================================================================================================
Net realized gain (loss) from investment transactions 1,407,345 (66,599) 540,289 27,873 4,468,281
- -----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments (3,415,294) (1,451,058) (1,754,458) (212,845) (8,516,720)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments (2,007,949) (1,517,657) (1,214,169) (184,972) (4,048,439)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 1,453,068 $ 502,004 $ 534,502 $ 260,851 $ 2,225,936
===================================================================================================================================
</TABLE>
See Notes to Financial Statements
27
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended 3/31/99 Year Ended 9/30/98
------------------------------------------ ------------------------------------------
National New York Texas National New York Texas
Increase (Decrease) in Net Assets Fund Fund Fund Fund Fund Fund
==================================================================================== ==========================================
<S> <C> <C> <C> <C> <C> <C>
Operations
Net investment income $ 17,576,794 $ 7,653,569 $ 2,514,417 $ 33,238,902 $ 14,824,081 $ 4,398,309
Net realized gain from investment
transactions 5,893,757 1,518,405 145,529 16,842,543 2,831,621 972,620
Net change in unrealized appreciation
of investments (15,951,634) (6,560,652) (2,290,244) 9,010,370 7,560,811 2,583,620
Net increase in net assets resulting
from operations 7,518,917 2,611,322 369,702 59,091,815 25,216,513 7,954,549
- ------------------------------------------------------------------------------------ ------------------------------------------
Distributions to shareholders from
Net investment income (15,652,642) (7,154,076) (2,305,014) (31,523,634) (14,940,983) (4,665,612)
Net realized gain from investment
transactions (10,518,533) -- (962,025) -- -- (776,439)
Total distributions (26,171,175) (7,154,076) (3,267,039) (31,523,634) (14,940,983) (5,442,051)
- ------------------------------------------------------------------------------------ ------------------------------------------
Capital share transactions
Net proceeds from sales of shares 42,088,580 7,139,248 4,542,359 44,173,162 10,675,106 4,536,385
Net asset value of shares issued to
shareholders in reinvestment of net
investment income and realized gain
from investment transactions 17,996,214 4,160,978 2,250,258 17,571,273 8,689,637 3,071,896
Total 60,084,794 11,300,226 6,792,617 61,744,435 19,364,743 7,608,281
- ------------------------------------------------------------------------------------ ------------------------------------------
Cost of shares reacquired (42,261,977) (12,204,906) (4,791,393) (77,738,659) (39,873,429) (8,814,383)
- ------------------------------------------------------------------------------------ ------------------------------------------
Increase (decrease) in net assets
derived from capital share transactions 17,822,817 (904,680) 2,001,224 (15,994,224) (20,508,686) (1,206,102)
- ------------------------------------------------------------------------------------ ------------------------------------------
Increase (decrease) in net assets (829,441) (5,447,434) (896,113) 11,573,957 (10,233,156) 1,306,396
- ------------------------------------------------------------------------------------ ------------------------------------------
Net Assets
Beginning of period 658,310,171 290,256,742 92,607,270 646,736,214 300,489,898 91,300,874
- ------------------------------------------------------------------------------------ ------------------------------------------
End of period+ $657,480,730 $284,809,308 $ 91,711,157 $658,310,171 $290,256,742 $ 92,607,270
=================================================================================================================================
</TABLE>
+ Includes (overdistributed) net investment income of $1,340,585, $(566,978)
and $(76,002), respectively, at March 31, 1999 and (overdistributed) net
investment income of $(583,567), $(1,066,471) and $(285,405),
respectively, at September 30, 1998.
See Notes to Financial Statements.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended 3/31/99
-----------------------------------------------------------------------------------------------
New Jersey Connecticut Missouri Hawaii Washington Minnesota California
Increase (Decrease) in Net Assets Fund Fund Fund Fund Fund Fund Fund
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Operations
Net investment income $ 4,752,068 $ 3,319,677 $ 3,461,017 $ 2,019,661 $ 1,748,671 $ 445,823 $ 6,274,375
Net realized gain (loss) from
investment transactions 1,556,174 463,744 1,407,345 (66,599) 540,289 27,873 4,468,281
Net change in unrealized
appreciation of investments (4,741,107) (2,264,384) (3,415,294) (1,451,058) (1,754,458) (212,845) (8,516,720)
Net increase in net assets
resulting from operations 1,567,135 1,519,037 1,453,068 502,004 534,502 260,851 2,225,936
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders
from Net investment income (4,461,342) (2,968,645) (3,350,542) (1,808,750) (1,460,961) (394,938) (6,004,640)
Net realized gain from
investment transactions (3,695,316) -- -- -- -- -- --
Total Distributions (8,156,658) (2,968,645) (3,350,542) (1,808,750) (1,460,961) (394,938) (6,004,640)
- ---------------------------------------------------------------------------------------------------------------------------------
Capital share transactions
Net proceeds from sales of shares 8,384,548 8,745,515 7,279,279 1,978,202 1,435,432 4,478,272 8,982,970
Net asset value of shares issued
to shareholders in reinvestment
of net investment income and
realized gain from investment
transactions 5,080,292 1,375,767 2,330,845 787,797 971,277 297,249 2,832,441
Total 13,464,840 10,121,282 9,610,124 2,765,999 2,406,709 4,775,521 11,815,411
- ---------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (8,725,395) (9,139,270) (15,032,867) (5,416,456) (3,717,023) (1,278,263) (19,280,882)
- ---------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets derived from capital
share transactions 4,739,446 982,012 (5,422,743) (2,650,457) (1,310,314) 3,497,258 (7,465,471)
- ---------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (1,850,077) (467,596) (7,320,217) (3,957,203) (2,236,773) 3,363,171 (11,244,175)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of period 186,126,670 120,982,645 144,155,368 80,970,429 62,753,739 14,399,214 264,404,517
- ---------------------------------------------------------------------------------------------------------------------------------
End of period+ $184,276,593 $120,515,049 $136,835,151 $ 77,013,226 $ 60,516,966 $17,762,385 $253,160,342
=================================================================================================================================
</TABLE>
+ Includes (overdistributed) undistributed net investment income of
$(151,024), $238,100, $(449,495), $61,045, $235,243, $52,639 and
$(237,477), respectively, at March 31, 1999.
See Notes to Financial Statements.
28
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended 9/30/98
------------------------------------------------------------------------------------------------
New Jersey Connecticut Missouri Hawaii Washington Minnesota California
Increase (Decrease) in Net Assets Fund Fund Fund Fund Fund Fund Fund
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Operations
Net investment income $ 8,925,491 $ 5,942,699 $ 6,783,611 $ 3,819,314 $ 3,328,193 $ 667,751 $ 13,176,118
Net realized gain from investment
transactions 3,349,076 503,065 1,394,815 531,420 2,031,986 50,220 2,426,131
Net change in unrealized
appreciation of investments 4,328,361 3,153,894 2,519,866 2,286,184 497,515 286,094 6,911,727
Net increase in net assets
resulting from operations 16,602,928 9,599,658 10,698,292 6,636,918 5,857,694 1,004,065 22,513,976
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income (8,988,994) (6,083,771) (6,829,012) (3,809,143) (3,139,347) (675,087) (12,811,949)
- ----------------------------------------------------------------------------------------------------------------------------------
Capital share transactions
Net proceeds from sales of shares 16,357,474 9,080,419 13,109,806 6,212,354 2,936,679 4,660,360 17,098,182
Net asset value of shares issued
to shareholders in reinvestment
of net investment income and
realized gain from investment
transactions 4,921,185 2,905,858 3,869,083 1,666,332 1,897,157 433,426 5,714,052
Total 21,278,659 11,986,277 16,978,889 7,878,686 4,833,836 5,093,786 22,812,234
- ----------------------------------------------------------------------------------------------------------------------------------
Cost of shares reacquired (27,230,768) (14,428,322) (16,973,059) (8,815,520) (11,013,654) (1,533,977) (41,118,778)
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
derived from capital share
transactions (5,952,109) (2,442,045) 5,830 (936,834) (6,179,818) 3,559,809 (18,306,544)
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 1,661,825 1,073,842 3,875,110 1,890,941 (3,461,471) 3,888,787 (8,604,517)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of year 184,464,845 119,908,803 140,280,258 79,079,488 66,215,210 10,510,427 273,009,034
- ----------------------------------------------------------------------------------------------------------------------------------
End of year+ $186,126,670 $120,982,645 $144,155,368 $ 80,970,429 $ 62,753,739 $ 14,399,214 $264,404,517
==================================================================================================================================
</TABLE>
+ Includes (overdistributed) undistributed net investment income of
$(441,750), $(112,932), $(559,970), $(149,866), $(52,467), $1,754 and
$(507,212), respectively, at September 30, 1998.
See Notes to Financial Statements.
29
<PAGE>
Financial Highlights
NATIONAL TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
Class A Shares
-------------------------------------------------------------------------------
Six Months Year
Ended 3/31, Ended 9/30,
Per Share Operating Performance: 1999 1998 1997 1996 1995 1994
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.98 $11.48 $11.08 $11.00 $10.62 $12.37
Income (loss) from investment operations
Net investment income .32 .604 .587 .603 .626 .657
Net realized and unrealized gain (loss) on
investments (.19) .470 .415 .075 .382 (1.3124)
Total from investment operations .13 1.074 1.002 .678 1.008 (.6554)
----------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.28) (.574) (.602) (.598) (.628) (.6596)
Distributions from net realized gain (.19) -- -- -- -- (.435)
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.64 $11.98 $11.48 $11.08 $11.00 $10.62
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 1.13%(b) 9.60% 9.30% 6.31% 9.84% (5.64)%
===================================================================================================================================
Ratios to Average Net Assets:
Expenses 0.44%(b) 0.88% 0.87% 0.90% 0.82% 0.86%
Net investment income 2.71%(b) 5.18% 5.27% 5.63% 5.92% 5.76%
============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Class B Shares
-----------------------------------------------------
Six Months Year
Ended 3/31, Ended 9/30, 8/1/96(c)
Per Share Operating Performance: 1999 1998 1997 to 9/30/96
===========================================================================================
<S> <C> <C> <C> <C>
Net asset value, beginning of
period $11.98 $11.50 $11.08 $11.05
===========================================================================================
Income from investment
operations
Net investment income .28 .518 .553 .089
Net realized and unrealized
gain (loss) on investments (.16) .466 .413 .033
Total from investment
operations .12 .984 .966 .122
------------------------------------------------------------------------------------
Distributions
Dividends from net
investment income (.25) (.504) (.546) (.092)
Distributions from net
realized gain (.19) -- -- --
------------------------------------------------------------------------------------
Net asset value, end of period $11.66 $11.98 $11.50 $11.08
- -------------------------------------------------------------------------------------------
Total Return(a) .90%(b) 8.85% 8.95% 1.16%(b)
===========================================================================================
Ratios to Average Net Assets:
Expenses 0.72%(b) 1.47% 1.37% 0.20%(b)
Net investment income 2.37%(b) 4.49% 4.65% 0.68%(b)
====================================================================================
<CAPTION>
Class C Shares
-----------------------------------------------------
Six Months Year
Ended 3/31, Ended 9/30, 7/15/96(c)
Per Share Operating Performance: 1999 1998 1997 to 9/30/96
===========================================================================================
<S> <C> <C> <C> <C>
Net asset value, beginning of
period $11.99 $11.49 $11.08 $10.90
===========================================================================================
Income from investment
operations
Net investment income .27 .520 .507 .106
Net realized and unrealized
gain (loss) on investments (.18) .471 .423 .190
Total from investment
operations .09 .991 .930 .296
------------------------------------------------------------------------------------
Distributions
Dividends from net
investment income (.24) (.491) (.520) (.116)
Distributions from net
realized gain (.19) -- -- --
------------------------------------------------------------------------------------
Net asset value, end of period $11.65 $11.99 $11.49 $11.08
- -------------------------------------------------------------------------------------------
Total Return(a) .76%(b) 8.80% 8.61% 2.71%(b)
===========================================================================================
Ratios to Average Net Assets:
Expenses 0.80%(b) 1.61% 1.59% 0.34%(b)
Net investment income 2.33%(b) 4.44% 4.54% 0.96%(b)
====================================================================================
</TABLE>
<TABLE>
<CAPTION>
Six Months Year
Ended 3/31, Ended 9/30,
Supplemental Data for All Classes: 1999 1998 1997 1996 1995 1994
============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net assets, end of period (000) $657,481 $658,310 $646,736 $672,344 $650,699 $662,380
Portfolio turnover rate 136.10% 304.15% 232.64% 205.35% 225.39% 184.07%
=====================================================================================================
</TABLE>
(a) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(b) Not annualized.
(c) Commencement of offering class shares.
See Notes to Financial Statements.
30
<PAGE>
Financial Highlights
NEW YORK TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
Class A Shares
-------------------------------------------------------------------
Six Months Year
Ended 3/31, Ended 9/30,
Per Share Operating Performance: 1999 1998 1997 1996 1995 1994
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.43 $11.03 $10.78 $10.85 $10.54 $12.27
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .30 .562 .578 .597 .610 .649
Net realized and unrealized gain (loss)on investment s (.20) .408 .262 (.081) .316 (1.3665)
Total from investment operations .10 .970 .840 .516 .926 (.7175)
---------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.28) (.570) (.590) (.586) (.616) (.6475)
Distributions from net realized gain -- -- -- -- -- (.365)
---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.25 $11.43 $11.03 $10.78 $10.85 $10.54
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 0.92%(b) 9.03% 8.01% 4.87% 9.12% (6.21)%
==================================================================================================================================
Ratios to Average Net Assets:
Expenses 0.43%(b) 0.85% 0.85% 0.81% 0.82% 0.83%
Net investment income 2.67%(b) 5.06% 5.35% 5.54% 5.83% 5.72%
===========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Class C Shares
--------------------------------------------------------------------------
Six Months Year
Ended 3/31, Ended 9/30, 7/15/96(c)
Per Share Operating Performance: 1999 1998 1997 to 9/30/96
===========================================================================================================================
<S> <C> <C> <C> <C>
Net asset value, beginning of period $11.42 $11.02 $10.78 $10.63
- ---------------------------------------------------------------------------------------------------------------------------
Income from investment
operations
Net investment income .26 .485 .483 .111
Net realized and unrealized
gain (loss) on investments (.19) .402 .267 .152
Total from investment operations .07 .887 .750 .263
- ---------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.24) (.487) (.510) (.113)
--------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.25 $11.42 $11.02 $10.78
- ---------------------------------------------------------------------------------------------------------------------------
Total Return(a) 0.54%(b) 8.34% 7.13% 2.48%(b)
===========================================================================================================================
Ratios to Average Net Assets:
Expenses 0.79%(b) 1.57% 1.57% 0.34%(b)
Net investment income 2.29%(b) 4.32% 4.60% 1.04%(b)
====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Six Months Year
Ended 3/31, Ended 9/30,
Supplemental Data for All Classes: 1999 1998 1997 1996 1995 1994
===========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net assets, end of period (000) $284,809 $290,257 $300,490 $319,553 $331,618 $338,539
Portfolio turnover rate 34.46% 64.63% 110.28% 64.25% 105.62% 149.13%
====================================================================================================================
</TABLE>
(a) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(b) Not annualized.
(c) Commencement of offering class shares.
See Notes to Financial Statements.
31
<PAGE>
Financial Highlights
TEXAS TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
Six Months Year
Ended 3/31, Ended 9/30,
Per Share Operating Performance: 1999 1998 1997 1996 1995 1994
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.69 $10.40 $10.11 $10.05 $9.59 $10.82
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .29 .507 .548 .567 .571 .604
Net realized and unrealized gain (loss)
on investments (.25) .407 .367 .045 .452 (1.0802)
Total from investment operations .04 .914 .915 .612 1.023 (.4762)
-------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.26) (.534) (.555) (.552) (.563) (.6038)
Distributions from net realized gain (.11) (.09) (.07) -- -- (.15)
-------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.36 $10.69 $10.40 $10.11 $10.05 $9.59
- --------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 0.42%(b) 9.24% 9.25% 6.11% 11.14% (4.60)%
================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (000) $91,711 $92,607 $91,301 $94,414 $100,304 $103,836
-------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver 0.46%(b) 0.91% 0.88% 0.69% 0.62% 0.50%
Expenses, excluding waiver 0.46%(b) 0.91% 0.88% 0.87% 0.87% 0.87%
Net investment income 2.72%(b) 4.85% 5.38% 5.58% 5.90% 5.97%
Portfolio turnover rate 57.58% 143.78% 127.88% 112.34% 108.00% 96.79%
=========================================================================================================================
</TABLE>
(a) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(b) Not annualized.
See Notes to Financial Statements.
Financial Highlights
NEW JERSEY TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
Six Months Year
Ended 3/31, Ended 9/30,
Per Share Operating Performance: 1999 1998 1997 1996 1995 1994
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $5.54 $5.32 $5.18 $5.14 $4.95 $5.55
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations
Net investment income .14 .262 .272 .277 .287 .300
Net realized and unrealized gain (loss)
on investments (.09) .223 .144 .041 .192 (.507)
Total from investment operations .05 .485 .416 .318 .479 (.207)
-------------------------------------------------------------------------------------------------------------------------
Distributions
Dividends from net investment income (.13) (.265) (.276) (.278) (.289) (.303)
Distributions from net realized gain (.11) -- -- -- -- (.09)
-------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.35 $5.54 $5.32 $5.18 $5.14 $4.95
- --------------------------------------------------------------------------------------------------------------------------------
Total Return(a) 0.96%(b) 9.34% 8.25% 6.29% 9.98% (3.91)%
================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (000) $184,277 $186,127 $184,465 $186,402 $191,562 $184,230
-------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses, including waiver 0.44%(b) 0.86% 0.82%(b) 0.79% 0.72% 0.51%
Expenses, excluding waiver 0.44%(b) 0.86% 0.86%(b) 0.86% 0.87% 0.83%
Net investment income 2.57%(b) 4.85% 5.21%(b) 5.31% 5.73% 5.76%
Portfolio turnover rate 91.54% 118.38% 154.80% 171.63% 133.11% 75.62%
=========================================================================================================================
</TABLE>
(a) Total return does not consider the effects of sales loads and assumes the
reinvestment of all distributions.
(b) Not annualized.
See Notes to Financial Statements.
32
