<PAGE>
Semi-Annual Report
December 31, 1995
[ART]
[LOGO OF PILGRIM AMERICA FUNDS]
- -----------------------------------------------
Elite Series
- ------------
Pilgrim America MagnaCap Fund
Pilgrim America High Yield Fund
Pilgrim Government Securities Income Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DEAR SHAREHOLDER:
We are pleased to present the Semi-Annual Report for the Pilgrim America
Elite Series of Funds ("Elite Series") which consists of Pilgrim America
MagnaCap Fund, Pilgrim America High Yield Fund and Pilgrim Government
Securities Income Fund. In the following pages, the portfolio manager for
each Fund of the Elite Series discusses the results of operations for the
six month period ended December 31, 1995, as well as the markets and
factors which affected each of the Funds during this period.
As previously reported, on April 7, 1995, Express America Holdings
Corporation, a publicly traded financial services company (NASDAQ: EXAM),
acquired the rights to manage five investment companies (the "Funds") and
distribute the three which are open-ended and included herein. The Funds
were previously managed and distributed by the former Pilgrim Group, Inc.
(now known as Atlas Financial Group, Inc.). The Funds are now being managed
and distributed by Express America's subsidiary companies collectively
referred to as Pilgrim America.
Pilgrim America is dedicated to providing core investments for the serious
investor. We believe that the key to success is matching quality core
investments to the individual needs of investors. Core investments are the
foundation of every portfolio and the basis for other important investment
decisions. Pilgrim America prides itself on providing a high level of
quality core investments to help you reach your financial goals. Our goal
is for every investor to have a successful investment experience.
The Elite Series is designed to give investors access to seasoned
investment managers who bring a depth of experience and knowledge to their
specific investment discipline. Further, in order to increase distribution
of the Elite Series of Funds, we created additional classes of shares (B
and M shares), with different sales charges and distribution fees, allowing
you to choose the method of purchasing shares that best suits your
investment strategy.
Thank you for selecting the Pilgrim America Elite Series of Funds. We
appreciate the confidence you have placed with us in serving your
investment needs.
Sincerely,
/s/ ROBERT W. STALLINGS
Robert W. Stallings
Chairman and Chief Executive Officer
Pilgrim America Group, Inc.
February 26, 1996
1
<PAGE>
- --------------------------------------------------------------------------------
Portfolio Manager's Report
PILGRIM AMERICA MAGNACAP FUND
- --------------------------------------------------------------------------------
DEAR SHAREHOLDER:
We are very pleased to report that Pilgrim America MagnaCap Fund ("the
Fund") had an extremely good year in 1995. Seventeen years ago the Fund in-
itiated the "Rising Dividends" investment philosophy and 1995 marked the
16th year in the last 17 years that the Fund produced a positive return.
For the twelve months ended December 31, 1995, the Fund provided a total
return of 35.2%*, compared with the Standard & Poor's 500 Index ("S&P
500")--a common proxy for the US stock market, which gained 37.6% for the
same period. Over the last six months, the Fund was up 15.0%*, compared
with the S&P 500 which gained 14.4% for the same period. And for the fourth
quarter, the Fund was up 10.98%*, compared with the S&P 500 which gained
6.0% for the same period. This also compares with a 4.58% rise for the av-
erage growth and income fund and a 3.14% rise for general equity funds. The
Fund's average annual total return for the one, five, and ten year periods
ended December 31, 1995 after deduction of the Class A maximum 5.75% sales
charge and assuming the reinvestment of all dividends and distributions was
27.5%, 14.4%, and 12.2% respectively.** On December 28, 1995 the Fund de-
clared a dividend of $0.24 per share from capital gains to shareholders of
record as of December 29, 1995.
A $10,000 investment in the Fund on January 1, 1979, the year in which the
Fund adopted its "Rising Dividends" investment strategy, would have grown
to $115,248 as of December 31, 1995, after deduction of the 5.75% sales
charge, and assuming the reinvestment of all dividends and capital gains
distributions. The net asset value of the Fund was $16.07 on December 31,
1995, which represents a $4.07 increase, or 33.9% over the net asset value
of $12.00 on December 31, 1994.
General Economic and Equity Market Environment
1995 was the first year in which the Dow Jones Industrial Average breached two
millennium marks, crossing 4000 on February 23, and 5000 on November 21, less
than nine months later. It was also the first year since 1900 in which the Dow
corrected from peak to trough by no more than 3.3%. And it was the first time
in 20 years that the Dow gained more than 30%. Specifically, the Dow rallied
1283 points, or 33.5%, to 5117. That was its highest ever one year point gain
and its best percentage gain since 1975, when it climbed 38.3%. The Dow reached
a record high 5216 on December 13, 1995. The market was propelled by falling
interest rates amid mounting evidence that the Federal Reserve had engineered a
soft landing--a slowing economy with low inflation. Corporate profits expanded
beyond the expectations of most analysts, and provided stocks another reason to
rally. And the low inflation environment added to the overall positive climate.
Pilgrim America MagnaCap Fund
As a "Rising Dividends" fund, MagnaCap invests in a very select group of compa-
nies that have been able to sustain growth over a 10-year period. In selecting
portfolio securities, companies must generally meet the following criteria:
1. Consistent dividend increases in at least eight of the past ten years, with
no year showing a decrease.
2. The dividend rate must have increased by at least 100% over the past ten
years.
3. Dividend payout must be less than 65% of current earnings.
3. Long-term debt should be less than 25% of total capitalization.
4. The current price of the company's stock should be in the lower half of the
stock's price/earning ratio range for the past ten years.
2
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's strong 1995 performance (+35.2%)* can be attributed in part to the
decision to hold the stocks of cyclical and basic material industries, espe-
cially paper and chemicals, which make up 23% of the portfolio holdings.
While past performance is no guarantee of future results, a number of the
Fund's holdings performed very well during the year. In addition, the Fund's
total return for this year was enhanced by its position in Scott Paper which
was purchased by Kimberly Clark. When the company was acquired, the Fund real-
ized a 164% profit on its holdings. Shortly after the reporting period, it was
announced that Loral would be acquired by Lockheed Martin in a transaction val-
uing Loral at about $45/share. It should be noted that Loral represents the
fifth buyout of a portfolio holding in six years. In 1994, MagnaCap benefited
from American Home Products acquisition of American Cyanamid, in 1993 the Fund
held Paramount Communications which was acquired by Viacom, and in 1990 the
Fund held MCA when it was acquired by Matsushita Electric Industrial Company,
Ltd.
During 1995, the Fund liquidated its position in Keycorp, Louisiana Pacific,
and First of America, and reduced its positions in PPG Industries, Rubbermaid,
Automatic Data Processing, AFLAC, International Flavors and Fragrance,
McDonald's, Dupont, Wausau Paper, Comerica, and Scott Paper. New positions were
established or added to Brunswick, Diebold, and General Motors Class E. It
should also be noted that late in the second quarter of 1995, the leadership in
the S&P 500 shifted to high technology, airlines, and home building industries.
In general, companies in these industries do not qualify for inclusion in the
Fund since they do not meet the "Rising Dividends" criteria. However, the
fourth quarter of 1995 saw the high technology sector come under extreme sell-
ing pressure, resulting in a substantial decline for the sector. The Fund's
performance was not affected.
Going forward, we shall continue to employ a "bottom-up" approach to stock se-
lection, drawing from the pool of companies that meet the Fund's strict invest-
ment criteria. We continue to favor the paper and chemical industries because
many of these companies have undergone restructurings, and as a result are now
very efficient, low-cost producers and are benefiting from improving economies
around the world. We also like the energy sector, which accounts for 17% of the
Fund, because we continue to see an upward trend in oil prices. Many companies
in these industries also provide an above average dividend yield. We also are
carefully looking at some of the very high quality high-technology companies
and high quality retail companies that meet the Fund's investment requirements.
We believe that the Fund's success has been attributed to the Fund's very
strict "Rising Dividends" investment criteria which strictly limit the kinds of
companies that qualify for inclusion in the portfolio. Companies must have at
least a ten-year record of consistently rising dividends, as well as a strong
balance sheet and an attractive price. Out of a universe of approximately 4,000
publicly-traded companies, and based upon our in-house analysis and research,
we carefully select the 25 to 35 equities which we believe will be most likely
to exhibit superior performance.
We expect interest rates to trend down in a narrow range throughout the year,
inflation to be under control and for corporate profits to be good. In this en-
vironment, we would expect the equity markets to do well. The Fund will con-
tinue to evaluate stocks using the "Rising Dividends" investment criteria.
We wish to remind shareholders that the Fund offers an automatic dividend rein-
vestment plan, which provides an easy and cost-effective way to acquire addi-
tional shares in the Fund, without incurring a sales charge. Should you decide
to switch from cash dividends to automatic reinvestment, please notify your
broker or contact
3
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the Transfer Agent, c/o DST Systems Include., P.O. Box 419338, Kansas City, MO
64141-6338, or call (800) 992-0180.
We thank you for giving us this opportunity to help you work towards your in-
vestment needs. Please do not hesitate to contact us if you have any questions
or need additional information.
Sincerely,
/s/ HOWARD N. KORNBLUE
Howard N. Kornblue
Senior Vice President and
Senior Portfolio Manager
Pilgrim America Group, Inc.
* Calculated without deducting the Class A maximum 5.75% sales charge and as-
suming reinvestment of all dividends and distributions.
** Performance figures shown pertain only to Class A shares of the Fund. Class
B and M shares, which the fund began offering on July 17, 1995, are subject to
different fees and expenses, which will affect their performance.
Performance data represents past performance and is not indicative of future
results. Investment return and principal value of an investment in the Fund
will fluctuate. Shares, when redeemed, may be worth more or less than their
original cost.
4
<PAGE>
- --------------------------------------------------------------------------------
Portfolio Manager's Report
PILGRIM AMERICA HIGH YIELD FUND
- --------------------------------------------------------------------------------
DEAR SHAREHOLDER:
We are pleased to report the results of operations for the Pilgrim America
High Yield Fund for fiscal year ended December 31, 1995.
General Economic and Market Environment
During the last six months, the fixed income markets have witnessed the end of
tight Federal Reserve monetary policy. Easing began with a 25 basis point cut
in the targeted federal funds rate from 6.00% to 5.75% on July 6, 1995. This
rate was maintained until December 19, 1995, when the Fed cut another 25 basis
points to 5.50%. Market consensus at the time of this cut was for further eas-
ing in the early part of 1996. The Federal Reserve Board members recognized
that the economy was slowing and the threat of renewed inflationary pressure
was minimal. They also decided not to wait for Congress and the President to
resolve their budget dispute, feeling it was inappropriate to freeze monetary
policy while fiscal policy remained unresolved.
Long term interest rates responded positively to the Federal Reserve actions.
Thirty year treasury yields fell 67 basis points from 6.62% at the beginning of
the six month period to a low of 5.95% on December 29, 1995. Factors influenc-
ing the market include a lower index of leading economic indicators, disap-
pointing retail sales, slow orders at manufacturers, and government shutdowns
as a result of the budget impasse and bad weather. Interest rates fall as the
economy slows and the expectation is that the Federal Reserve will cut the in-
terest rate further.
High Yield Market
High yield issues performed well in the second half of 1995, with the First
Boston High Yield Index* returning +5.89% and the Lehman Brothers High Yield
Index* posting a 6.02% gain. Full year performance for the index was +17.38%,
lagging returns on ten year treasuries and the S&P 500, which returned +23.68%
and +37.57%, respectively. This underperformance resulted in a widening of high
yield spreads by 96 basis points versus treasuries for 1995. Most of the widen-
ing, however, occurred in the first half of the year with spreads widening 73
basis points versus a second half widening of 23 basis points. Spreads widened
as investors became increasingly concerned about corporate credit quality which
resulted from the perception that domestic economic growth was slowing.
There were 237 new issues priced in 1995 with an average issue size of $185
million. Issuance totaled $44.2 billion during the year, the second highest
level ever after the record $75.3 billion issued in 1993. Credit quality im-
proved dramatically in 1995 with 50% of new issues rated double-B or better
versus 36% in 1994. This occurred as investors increased their demand for bet-
ter credit quality as a result of their fear that the economy was slowing. New
issuance was also centered on less cyclical industries including cable, commu-
nications and energy, while plastics, restaurants and aerospace issued the
least amount in 1995.
The size of the high yield market grew $26.7 billion in 1995 to a total of
$326.5 billion, which is a new record high. This increase was driven by steady
demand from mutual funds, pension funds, and insurance companies and facili-
tated by the large new issue calendar. High yield mutual funds alone had large
net inflows of $8.4 billion in 1995 versus $0.8 billion in 1994, as individual
investors took advantage of falling interest rates and the relatively attrac-
tive yields available versus other fixed income alternatives.
Pilgrim America High Yield Fund
Pilgrim America High Yield Fund's management has taken a disciplined approach
to investing in the high yield market. Purchases are made only after a complete
credit review and screening process is completed. As part of this process the
Fund's management selects only those securities which meet the following re-
quirements:
5
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1. Must be cash pay. The Fund does not purchase zero coupon, payment in kind,
or deferred interest issues.
2. Have an issue size of at least $100 million. Smaller issues tend to be less
liquid and are not as well researched by buyers and sellers.
3. Rated primarily Single-B and Double-B by the major credit rating agencies.
The Fund does not purchase defaulted or distressed issues.
Additionally, the Fund does not purchase emerging market or foreign issues,
nor does it participate in highly leveraged derivatives, or the futures and
options markets.
These measures have helped the Fund perform well in 1995. Total return was
+17.71%**, 127 basis points above the Lipper High Current Yield category aver-
age of +16.44%. The Fund's management has continued to overweight portfolio
holdings in less cyclical industries. This has occurred as market participants
have continued to see signs of economic slowdown in the domestic economy. This
strategy has worked well as some of the best performing sectors of the high
yield market have also been the most heavily weighted sectors in the portfo-
lio. These include Media and Entertainment, at 22.4% of total holdings, and
Communications at 10.0% of holdings.
The Fund normally remained fully invested throughout the second half of 1995.
Cash levels were at 6.1% of total Fund assets at year end, however the Fund's
management has normally maintained a relatively low cash level of 1-3%
throughout the period. This has allowed the Fund to take advantage of the
falling interest rate environment. This strategy will continue in 1996 as the
market continues to expect further Federal Reserve easing, which will lower
interest rates at the short end of the yield curve. The Fund's management ex-
pects long term interest rates to fall with short term rates, but not to the
same magnitude.
Quality spreads widened 60 basis points during 1995, with the average Single-B
issue yielding 164 basis points more than the average Double-B issue at the
beginning of the year versus 224 basis points more at the end of the year, ac-
cording to the First Boston High Yield Index. This presents some interesting
investment opportunities for issues that are undervalued within the Single-B
sector. Generally, though, the Fund's management will continue to posture it-
self defensively. We believe, the outlook for low inflation, generally lower
interest rates, and slower economic growth are generally positive for the high
yield market, but caution is warranted as all sectors of the high yield market
will not participate equally in this environment.
We wish to remind shareholders that the fund offers an automatic dividend re-
investment plan, which provides an easy and cost effective way to acquire ad-
ditional shares in the Fund, without incurring a sales charge. Should you de-
cide to switch from cash dividends to automatic investment, please notify your
broker or contact the Transfer Agent, c/o DST Systems Inc., PO Box 419338,
Kansas City, Missouri 64141-6338 or call (800) 992-0180.
We thank you for giving us this opportunity to help you work towards your in-
vestment needs. Please do not hesitate to contact us if you have any questions
or need additional information.
Sincerely,
/s/ KEVIN G. MATHEWS
Kevin G. Mathews
Vice President and Senior Portfolio Manager
Pilgrim America Group, Inc.
6
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* The Lipper High Current Yield Fund returns are an average of the 139 funds in
that Lipper category as of December 31, 1995. The First Boston High Yield Index
and Lehman Brothers High Yield Index are broad measures of high yield market
performance. The average annual total return for the Lehman Brothers High Yield
Index for the one, five, and ten year periods ended December 31, 1995 was
19.17%, 18.51% and 11.45%, respectively.
The Fund earned income and realized capital gains as a result of entering into
reverse repurchase agreements during the six month period from July to Decem-
ber, 1992. Therefore, the Fund's performance was higher than it would have been
had the Fund adhered to its 10% borrowing investment restriction.
Performance data represents past performance and is not indicative of future
results. Investment return and principal value of an investment in the Fund
will fluctuate. Shares, when redeemed, may be worth more or less than their
original cost.
** Total return reflects partial waiver of expenses for the period stated. Per-
formance figures shown pertain only to Class A shares of the Fund without de-
ducting the maximum sales. Class B and M shares, which the fund began offering
on July 17, 1995, are subject to different fees and expenses, which will affect
their performance. The average annual total return for the one, five, and ten
year periods ended December 31, 1995 after deduction of the Class A maximum
sales charge of 4.75% was 12.13%, 14.48% and 8.77%, respectively.
7
<PAGE>
- -------------------------------------------------------------------------------
Portfolio Manager's Report
PILGRIM GOVERNMENT SECURITIES INCOME FUND
- -------------------------------------------------------------------------------
DEAR SHAREHOLDER:
We are very pleased to report the results of operations for the Pilgrim
Government Securities Income Fund ("the Fund") for the fiscal year ended
December 31, 1995. The Fund reported its highest annual total return since
inception as the 30 year treasury yield declined to 5.95%, a three year
low. As of December 31, 1995, the Fund's standardized 30 day SEC yield was
5.33%*. The average annual total return for the one, five, and ten year
periods ended December 31, 1995 after deduction of the Class A maximum sales
charge of 4.75% and assuming the reinvestment of all dividends and
distributions, was 9.11%, 5.77%, and 6.41%, respectively*.
General Economic and Market Environment
The six months ending December 31, 1995, saw positive developments for the
fixed income market. Moderate growth and low inflation fueled the drive to
lower rates.
While interest rates declined, the budget debate in Washington and related
events caused some volatility and uncertainty within the fixed income market
as well as a drag on the economy during the fourth quarter.
The period started and ended with the Federal Reserve dropping the Federal
Funds rate. The rate declined from 6.00% to 5.50% with the Federal Reserve
Board citing moderating inflation as the reason for decline.
Mortgage Securities Market in Particular
The mortgage market has underperformed the treasury market during the second
half of the year. This underperformance has been caused by prepayment concerns
attributable to declining mortgage loan rates. As of December 31, the market
has not yet experienced a strong increase in prepayments. The market, however,
anticipates prepayments to increase significantly during the first quarter of
1996.
Pilgrim Government Securities Income Fund
The Fund was positioned over the last six months to address the decline in in-
terest rates. First, in order to maximize total return, the fund maintained
approximately a third of the portfolio in longer duration treasuries. Second,
in order to protect the portfolio from prepayment risk, the fund repositioned
the mortgage portfolio to include a greater percentage in lower coupon and
seasoned mortgage securities. Seasoned mortgage securities historically have
experienced a lower level of prepayment risk than newly issued securities. Fi-
nally, in order to enhance yield, management consolidated or sold several
smaller mortgage positions while adding a small position to the portfolio in
an FHA insured project loan. In keeping with the prospectus objective of capi-
tal preservation, the Fund maintained a duration of 4.1 years as of December
31, 1995. The Fund continues its ongoing commitment to shareholders of avoid-
ing exotic derivatives, as well as leverage, futures and options.
For 1996, we believe that economic growth will remain in the moderate to slow
range and believe that the Federal Reserve will ease monetary policy further
as inflation remains benign. As a result, rates should remain stable or de-
cline. The yield curve should steepen during 1996 as short term rates decline
in response to Federal Reserve policy. Given this environment, fixed income
securities should perform well.
We wish to remind shareholders that the fund offers an automatic dividend re-
investment plan, which provides an easy and cost effective way to acquire ad-
ditional shares in the Fund, without incurring a sales charge. Should you
8
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
decide to switch from cash dividends to automatic investment, please notify
your broker or contact the Transfer Agent, c/o DST Systems Inc., PO Box 419338,
Kansas City, Missouri 64141-6338 or call (800) 992-0180.
We thank you for giving us this opportunity to help you work towards your in-
vestment needs. Please do not hesitate to contact us if you have any questions
or need additional information.
Sincerely,
/s/ KEVIN G. MATHEWS
Kevin G. Mathews
Vice President and Senior Portfolio Manager
Pilgrim America Group, Inc.
*Total return reflects partial waiver of expenses for the period stated. Per-
formance figures shown pertain only to Class A shares of the Fund. Class B and
M shares, which the fund began offering on July 17, 1995, are subject to dif-
ferent fees and expenses, which will affect their performance.
The Fund earned income and realized capital gains as a result of entering
into reverse repurchase agreements during the six month period from July to
December, 1992. Therefore, the Fund's performance was higher than it would have
been had the Fund adhered to its 10% borrowing investment restriction.
Performance data represents past performance and is not indicative of future
results. Investment return and principal value of an investment in the Fund
will fluctuate. Shares, when redeemed, may be worth more or less than their
original cost.
9
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1995 (Unaudited)
- ---------------------------
<TABLE>
<CAPTION>
High Government
MagnaCap Yield Securities
Fund Fund Income Fund
------------ ----------- -----------
<S> <C> <C> <C>
ASSETS:
Investments in securities at value
(Cost: $113,208,324, $13,952,795 and
$38,693,212, respectively)...................... $231,469,161 $14,710,765 $39,771,225
Short-term securities at amortized cost.......... 1,536,000 952,000 1,116,000
Cash............................................. 10,366 10,261 10,420
Receivables:
Dividends and interest................... 479,620 304,812 391,540
Fund shares sold......................... 238,552 162,393 25,559
Investment securities sold............... -- -- 1,597,773
Due from manager......................... -- 125,684 13,934
Other assets..................................... 32,290 2,410 16,215
------------ ----------- -----------
Total Assets..................... 233,765,989 16,268,325 42,942,666
------------ ----------- -----------
LIABILITIES:
Payable for fund shares redeemed................. 39,342 6,570 72,203
Payable to affiliates............................ 205,224 13,604 27,258
Other accrued expenses and liabilties............ 27,189 23,618 22,888
------------ ----------- -----------
Total Liabilities................ 271,755 43,792 122,349
------------ ----------- -----------
NET ASSETS....................................... $233,494,234 $16,224,533 $42,820,317
============ =========== ===========
Net Assets consist of:
Paid-in capital ......................... 110,546,496 27,251,984 78,294,262
Undistributed (overdistributed) net
investment income ..................... 672,503 91,119 (15,649)
Accumulated net realized gains (losses)
on investments ........................ 4,014,398 (11,876,540) (36,536,309)
Net unrealized appreciation of
investments............................ 118,260,837 757,970 1,078,013
------------ ----------- -----------
Net Assets ...................... $233,494,234 $16,224,533 $42,820,317
============ =========== ===========
CLASS A SHARES:
Net assets............................... $231,639,174 $15,754,845 $42,811,789
Shares outstanding....................... 14,418,871 2,497,660 3,243,527
Net asset value per share................ $ 16.07 $ 6.31 $ 13.20
Maximum offering price per share*........ $ 17.05 $ 6.62 $ 13.86
CLASS B SHARES:
Net assets............................... $ 1,625,795 $ 315,236 $ 8,307
Shares outstanding....................... 101,481 50,019 630
Net asset value per share, redemption
and offering price per share**......... $ 16.02 $ 6.30 $ 13.19
CLASS M SHARES:
Net assets................................ $ 229,265 $ 154,452 $ 221
Shares outstanding........................ 14,296 24,499 17
Net asset value per share................. $ 16.04 $ 6.30 $ 13.20
Maximum offering price per share***....... $ 16.62 $ 6.51 $ 13.64
</TABLE>
- --------------
* Maximum offering price is computed at 100/94.25 of net asset value for
MagnaCap Fund and 100/95.25 of net asset value for High Yield Fund and
Government Securities Income Fund. On purchases of $50,000 or more the
offering price is reduced.
** Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
*** Maximum offering price is computed at 100/96.50 of net asset value for
MagnaCap fund and 100/96.75 of net asset value for High Yield Fund and
Government Securities Income Fund.
See Notes to Financial Statements
10
<PAGE>
STATEMENTS OF OPERATIONS
For the Six Months Ended December 31, 1995 (Unaudited)
- ---------------------------------
<TABLE>
<CAPTION>
High Government
MagnaCap Yield Securities
Fund Fund Income Fund
----------- ---------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest..................................................... $ 30,929 $ 805,332 $1,688,047
Dividends
(net of foreign taxes withheld of $34,333, $0 and $0,
respectively)............................................ 2,390,839 --- ---
----------- ---------- ----------
Total investment income.............................. 2,421,768 805,332 1,688,047
----------- ---------- ----------
EXPENSES:
Investment management fees................................... 854,932 59,573 107,677
Distribution expenses
Class A Shares........................................... 325,774 19,795 53,838
Class B Shares........................................... 3,240 118 5
Class M Shares........................................... 341 101 1
Transfer agency fees......................................... 248,814 29,603 27,286
Recordkeeping and pricing fees............................... 91,316 17,651 20,644
Professional fees............................................ 77,003 37,364 59,838
Custodian fees............................................... 48,718 7,379 19,789
Reports to shareholders...................................... 41,397 9,305 11,014
Registration and filing fees................................. 29,615 2,638 14,815
Miscellaneous expenses....................................... 18,829 22,236 12,482
Directors' fees.............................................. 16,787 708 3,753
----------- ---------- ----------
Total expenses....................................... 1,756,766 206,471 331,142
----------- ---------- ----------
Less: Waived and reimbursed fees.......................... --- (125,684) (13,934)
Earnings credits.................................... (1,341) (714) (1,246)
----------- ---------- ----------
Net expenses........................................ 1,755,425 80,073 315,962
----------- ---------- ----------
Net investment income............................... 666,343 725,259 1,372,085
----------- ---------- ----------
NET REALIZED AND UNREALIZED GAINS FROM INVESTMENTS:
Net realized gains from investments......................... 4,115,683 222,841 699,683
Net change in unrealized appreciation of investments........ 25,992,176 83,334 61,645
----------- ---------- ----------
Net gains from investments.................................. 30,107,859 306,175 761,328
----------- ---------- ----------
Net increase in net assets resulting from
operations........................................ $30,774,202 $1,031,434 $2,133,413
=========== ========== ==========
</TABLE>
See Notes to Financial Statements
11
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<TABLE>
<CAPTION>
Government Securities
MagnaCap Fund High Yield Fund Income Fund
----------------------------- ----------------------------- ------------------------------
For The For The For The
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
December 31, June 30, December 31, June 30, December 31, June 30,
1995 1995 1995 1995 1995 1995
------------ ------------ ------------ ------------- ------------ ------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets from operations:
Net investment income........ $ 666,343 $ 1,934,978 $ 725,259 $ 928,406 $ 1,372,085 $ 3,346,676
Net realized gain (loss) on
investments................. 4,115,683 (100,779) 222,841 (674,487) 699,683 (1,413,077)
Net change in unrealized
appreciation of
investments................. 25,992,176 35,762,715 83,334 1,241,388 61,645 2,008,085
------------ ------------ ----------- ----------- ----------- ------------
Net increase in net
assets resulting from
operations.................. 30,774,202 37,596,914 1,031,434 1,495,307 2,133,413 3,941,684
------------ ------------ ----------- ----------- ----------- ------------
Undistributed net investment
income included in price of
shares sold and redeemed.... -- (7,733) -- 16 -- --
Distributions to shareholders:
Net investment income:
Class A.................... (913,058) (2,215,639) (633,448) (948,887) (1,387,673) (3,346,727)
Class B.................... (76) -- (428) -- (5) --
Class M.................... (11) -- (828) -- (5) --
Net realized gains:
Class A.................... -- (9,247,167) -- -- -- --
Class B.................... -- -- -- -- -- --
Class M.................... -- -- -- -- -- --
Capital share transactions(a):
Net proceeds from sale of
shares...................... 25,645,392 59,504,866 1,069,488 1,369,139 3,956,569 1,046,472
Shares resulting from
dividend reinvestment....... 705,020 8,917,296 264,213 412,294 501,711 1,097,278
Cost of shares redeemed...... (34,047,239) (73,653,833) (1,455,784) (2,423,514) (6,014,971) (20,207,240)
------------ ------------ ----------- ----------- ----------- ------------
Net decrease in net assets
resulting from capital share
transactions................ (7,696,827) (5,231,671) (122,083) (642,081) (1,556,691) (18,063,490)
------------ ------------ ----------- ----------- ----------- ------------
Net increase (decrease) in
net assets.................. 22,164,230 20,894,704 274,647 (95,645) (810,961) (17,468,533)
Net assets at the beginning
of the period............... 211,330,004 190,435,300 15,949,886 16,045,531 43,631,278 61,099,811
------------ ------------ ----------- ----------- ----------- ------------
Net assets at the end of the
period...................... $233,494,234 $211,330,004 $16,224,533 $15,949,886 $42,820,317 $ 43,631,278
============ ============ =========== =========== =========== ============
</TABLE>
(a) A summary of capital share transactions is as follows:
Shares issued and redeemed:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Shares sold.................. 1,754,100 4,719,181 168,156 232,390 307,172 83,488
Shares issued as reinvestment
of dividends................ 49,336 742,767 42,823 69,912 38,824 87,642
Shares redeemed.............. (2,335,202) (5,807,413) (234,774) (407,085) (465,522) (1,608,644)
------------ ------------ ----------- ----------- ----------- ------------
Net decrease in shares
outstanding................. (531,766) (345,465) (23,795) (104,783) (119,526) (1,437,514)
============ ============ =========== =========== =========== ============
</TABLE>
See Notes to Financial Statements
12
<PAGE>
MAGNACAP FUND
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout Each Period
- -----------------------------
<TABLE>
<CAPTION>
For the Six For the period
Months Ended July 17, 1995(c) to
Dec. 31, 1995 Dec. 31, 1995
(Unaudited) (Unaudited)
------------- ---------------------
Class A Class B Class M 1995(b) 1994 1993 1992
-------- ------- ------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning
of period.................... $ 14.03 $14.22 $14.22 $ 12.36 $ 12.05 $ 11.98 $ 10.93
-------- ------ ------ -------- ------- -------- --------
Income (loss) from
investment operations:
Net investment income........ 0.05 0.06 0.05 0.12 0.15 0.14 0.13
Net realized and
unrealized gain (loss)
on investment............... 2.05 1.80 1.83 2.29 0.89 0.82 1.16
-------- ------ ------ -------- -------- -------- --------
Total from investment
operations................. 2.10 1.86 1.88 2.41 1.04 0.96 1.29
-------- ------ ------ -------- -------- -------- --------
Less distributions:
Distributions from net
investment income........... 0.06 0.06 0.06 0.14 0.14 0.12 0.24
Distributions from realized
gains on investments........ -- -- -- 0.60 0.59 0.77 --
-------- ------ ------ -------- -------- -------- --------
Total distributions......... 0.06 0.06 0.06 0.74 0.73 0.89 0.24
-------- ------ ------ -------- -------- -------- --------
Net asset value,
end of period................ $ 16.07 $16.02 $16.04 $ 14.03 $ 12.36 $ 12.05 $ 11.98
======== ====== ====== ======== ======== ======== ========
Total Return(a)................ 15.03% 13.14% 13.28% 20.61% 9.13% 8.21% 11.93%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands)............... $231,639 $ 1,626 $ 229 $211,330 $190,435 $197,250 $196,861
Ratio to average net assets:
Expenses..................... 1.64%(d) 2.37%(d) 2.09%(d) 1.59% 1.53% 1.53% 1.60%
Net investment income........ 0.61%(d) 0.07%(d) 0.40%(d) 0.98% 1.16% 1.09% 1.20%
Portfolio turnover rate........ 0% 0% 0% 6% 7% 36% 49%
<CAPTION>
1991 1990 1989 1988 1987 1986
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning
of period.................... $ 10.74 $ 10.52 $ 9.12 $ 11.56 $ 10.66 $ 7.99
-------- -------- -------- -------- -------- --------
Income (loss) from
investment operations:
Net investment income........ 0.20 0.15 0.17 0.15 0.18 0.26
Net realized and
unrealized gain (loss)
on investment............... 0.33 1.24 1.39 (0.74) 1.21 2.69
-------- -------- -------- -------- -------- --------
Total from investment
operations................. 0.53 1.39 1.56 (0.59) 1.39 2.95
-------- -------- -------- -------- -------- --------
Less distributions:
Distributions from net
investment income........... 0.16 0.17 0.16 0.12 0.26 0.12
Distributions from realized
gains on investments........ 0.18 1.00 -- 1.73 0.23 0.16
-------- -------- -------- -------- -------- --------
Total distributions......... 0.34 1.17 0.16 1.85 0.49 0.28
-------- -------- -------- -------- -------- --------
Net asset value,
end of period................ $ 10.93 $ 10.74 $ 10.52 $ 9.12 $ 11.56 $ 10.66
======== ======== ======== ======== ======== ========
Total Return(a)................ 5.21% 13.84% 17.32% (6.64)% 13.72% 37.71%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands)............... $199,892 $224,059 $204,552 $211,064 $243,729 $188,093
Ratio to average net assets:
Expenses..................... 1.50% 1.50% 1.60% 1.50% 1.40% 1.40%
Net investment income........ 2.00% 1.40% 1.80% 1.60% 1.70% 2.80%
Portfolio turnover rate........ 182% 12% 129% 206% 127% 16%
</TABLE>
(a) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return information for less than one year is not
annualized.
(b) Pilgrim America Investments, Inc. the Fund's investment manager, acquired
assets of Pilgrim Management Corporation, the Fund's former investment
manager, in a transaction that closed on April 7, 1995.
(c) Commencement of offering of shares.
(d) Annualized.
See Notes to Financial Statements
13
<PAGE>
HIGH YIELD FUND
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout Each Period
- -----------------------------
<TABLE>
<CAPTION>
For the Six For the period
Months Ended July 17, 1995(a) to
Dec. 31, 1995 Dec. 31, 1995
(Unaudited) (Unaudited)
------------- ---------------------
Class A Class B Class M 1995(d) 1994 1993 1992
-------- ------- ------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning
of period.................... $ 6.15 $ 6.20 $ 6.20 $ 5.95 $ 6.47 $ 5.77 $ 5.70
-------- ------ ------ -------- ------- -------- --------
Income (loss) from
investment operations:
Net investment income........ 0.29 0.20 0.22 0.35 0.54 0.53 0.63
Net realized and
unrealized gain (loss)
on investments.............. 0.12 0.09 0.08 0.21 (0.51) 0.70 0.07
-------- ------ ------ -------- -------- -------- --------
Total from investment
operations................. 0.41 0.29 0.30 0.56 0.03 1.23 0.70
-------- ------ ------ -------- -------- -------- --------
Less distributions:
Distributions from net
investment income........... 0.25 0.19 0.20 0.36 0.55 0.53 0.63
Distributions from realized
gains on investments........ -- -- -- -- -- -- --
-------- ------ ------ -------- -------- -------- --------
Total distributions......... 0.25 0.19 0.20 0.36 0.55 0.53 0.63
-------- ------ ------ -------- -------- -------- --------
Net asset value,
end of period................ $ 6.31 $ 6.30 $ 6.30 $ 6.15 $ 5.95 $ 6.47 $ 5.77
======== ====== ====== ======== ======== ======== ========
Total Return(c)................ 6.81% 4.76% 4.92% 9.77% 0.47% 22.12% 12.65%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands)............... $ 15,755 $ 315 $ 154 $ 15,950 $ 16,046 $ 18,797 $ 17,034
Ratio to average net assets:
Expenses..................... 1.00%(b)(e) 1.75%(b)(e) 1.50%(b)(e) 2.25%(f) 2.00%(f) 2.02% 2.03%
Net investment income........ 9.13%(b)(e) 8.02%(b)(e) 8.63%(b)(e) 8.84%(g) 8.73%(g) 8.36% 10.93%
Portfolio turnover rate........ 77% 77% 77% 166% 192% 116% 193%
<CAPTION>
1991 1990 1989 1988 1987 1986
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning
of period.................... $ 5.03 $ 6.46 $ 7.29 $ 7.25 $ 8.15 $ 7.89
-------- -------- -------- -------- -------- --------
Income (loss) from
investment operations:
Net investment income........ 0.66 0.82 0.88 0.89 0.95 0.96
Net realized and
unrealized gain (loss)
on investments.............. 0.74 (1.40) (0.80) 0.03 (0.89) 0.26
-------- -------- -------- -------- -------- --------
Total from investment
operations................. 1.40 (0.58) 0.08 0.92 0.06 1.22
-------- -------- -------- -------- -------- --------
Less distributions:
Distributions from net
investment income........... 0.68 0.85 0.91 0.88 0.96 0.96
Distributions from realized
gains on investments........ 0.05 -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total distributions......... 0.73 0.85 0.91 0.88 0.96 0.96
-------- -------- -------- -------- -------- --------
Net asset value,
end of period................ $ 5.70 $ 5.03 $ 6.46 $ 7.29 $ 7.25 $ 8.15
======== ======== ======== ======== ======== ========
Total Return(c)................ 30.00% (10.08)% 0.94% 13.54% 0.36% 16.33%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands)............... $ 23,820 $ 21,598 $ 31,356 $ 41,910 $ 56,523 $ 22,807
Ratio to average net assets:
Expenses..................... 1.89% 1.75% 1.79% 1.46% 1.34% 1.50%(f)
Net investment income........ 12.40% 14.11% 12.61% 12.20% 11.68% 11.42%(g)
Portfolio turnover rate........ 173% 183% 210% 80% 114% 66%
</TABLE>
(a) Commencement of offering of shares.
(b) Annualized.
(c) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return information for less than one year is not
annualized.
(d) Pilgrim America Investments, Inc., the Fund's investment manager, acquired
assets of Pilgrim Management Corporation, the Fund's former investment
manager, in a transaction that closed on April 7, 1995.
(e) Prior to the waiver of expenses, the ratio of expenses to average net
assets was 2.58%, 4.51%, and 3.74% for Class A, B, and M respectively.
Prior to the waiver of expenses, the ratio of net investment income to
average net assets was 7.55%, 5.27% and 6.35% for Class A, B and M
respectively.
(f) Ratio of expenses to average net assets prior to expense waivers was 2.35%
in 1995, 2.07% in 1994, and 1.76% in 1986.
(g) Ratio of net investment income to average net assets prior to expense
waivers was 8.74% in 1995, 8.66% in 1994, and 11.16% in 1986.
See Notes to Financial Statements
14
<PAGE>
Government Securities Income Fund
Financial Highlights
For a Share Outstanding Throughout Each Period
- -----------------------------
<TABLE>
<CAPTION>
For the Six For the period
Months Ended July 17, 1995(f) to
Dec. 31, 1995 Dec. 31, 1995
(Unaudited) (Unaudited)
------------- -----------------------
Class A Class B Class M 1995(e) 1994 1993(a) 1992
------------- ----------------------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance
Net asset value, beginning
of period.................... $ 12.97 $12.95 $12.95 $ 12.73 $ 13.96 $ 13.76 $ 13.76
------- ------ ------ ------- ------- -------- --------
Income (loss) from
investment operations:
Net investment income........ 0.42 0.40 0.33 0.84 0.84 1.13 1.19
Net realized and
unrealized gain (loss)
on investment............... 0.23 0.16 0.25 0.24 (1.17) 0.18 --
------- ------ ------ ------- ------- -------- --------
Total from investment
operations................. 0.65 0.56 0.58 1.08 (0.33) 1.31 1.19
------- ------ ------ ------- ------- -------- --------
Less distributions:
Distributions from net
investment income........... 0.42 0.32 0.33 0.84 0.90 1.11 1.19
------- ------ ------ ------- ------- -------- --------
Total distributions......... 0.42 0.32 0.33 0.84 0.90 1.11 1.19
------- ------ ------ ------- ------- -------- --------
Net asset value,
end of period................ $ 13.20 $13.19 $13.20 $ 12.97 $ 12.73 $ 13.96 $ 13.76
======= ====== ====== ======= ======= ======== ========
Total Return(d)................ 5.13% 4.36% 4.53% 8.96% (2.50)% 9.82% 8.98%
Ratios/Supplemental Data
Net assets, end of period
(in thousands)............... $42,812 $ 8 $ -- $43,631 $61,100 $ 87,301 $96,390
Ratio to average net assets:
Expenses..................... 1.40%(g)(h) 2.15%(g)(h) 1.90%(g)(h) 1.40%(b) 1.21% 1.12% 1.10%
Net investment income
(exclusive of interest
expense).................... 6.36%(g)(h) 1.19%(g)(h) 5.97%(g)(h) 6.37%(c) 6.44% 8.06% 8.59%
Portfolio turnover rate........ 65% 65% 65% 299% 402% 466% 823%
<CAPTION>
1991 1990 1989 1988 1987 1986
-------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance
Net asset value, beginning
of period.................... $ 13.79 $ 14.23 $ 14.23 $ 14.51 $ 15.15 $ 15.94
------- ------- ------- ------- ------- --------
Income (loss) from
investment operations:
Net investment income........ 1.25 1.25 1.31 1.34 1.40 1.70
Net realized and
unrealized gain (loss)
on investment............... (0.03) (0.38) 0.02 (0.25) (0.62) (0.77)
------- ------- ------- ------- ------- --------
Total from investment
operations................. 1.22 0.87 1.33 1.09 0.78 0.93
------- ------- ------- ------- ------- --------
Less distributions:
Distributions from net
investment income........... 1.25 1.31 1.33 1.37 1.42 1.72
------- ------- ------- ------- ------- --------
Total distributions......... 1.25 1.31 1.33 1.37 1.42 1.72
------- ------- ------- ------- ------- --------
Net asset value,
end of period................ $ 13.76 $ 13.79 $ 14.23 $ 14.23 $ 14.51 $ 15.15
======== ======= ======= ======= ======= ========
Total Return(d)................ 9.27% 6.51% 10.10% 8.00% 5.24% 6.05%
Ratios/Supplemental Data
Net assets, end of period
(in thousands)............... $110,674 $122,212 $144,769 $183,979 $288,024 $218,258
Ratio to average net assets:
Expenses..................... 1.14% 1.14% 1.06% 0.98% 0.93% 1.00%(b)
Net investment income
(exclusive of interest
expense).................... 9.09% 9.02% 9.45% 9.50% 9.16% 8.53%(c)
Portfolio turnover rate........ 429% 448% 537% 360% 433% 75%
</TABLE>
(a) During this period, average daily borrowings were $11,038,044, average
monthly shares outstanding were 6,429,755 and average daily borrowings per
share were $1.72. The Fund earned income and realized capital gains as a
result of entering into reverse repurchase agreements during the six months
from July to December 1992. Such transactions constituted borrowing
transactions, and as a result, the Fund exceeded its 10% borrowing
limitations during that period. Therefore, the Fund's performance was
higher than it would have been had the Fund adhered to its investment
restriction. This borrowing technique was discontinued subsequent to
December 1992 until April 4, 1995, when shareholders approved a change in
the Fund's investment policies.
(b) Ratio of expenses to average net assets prior to reimbursement from Manager
was 1.54% in 1995 and 1.03% in 1986.
(c) Ratio of net investment income to average net assets prior to reimbursement
from Manager was 6.23% in 1995 and 8.50% in 1986.
(d) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return information for less than one year is not
annualized.
(e) Pilgrim America Investments, Inc., the Fund's investment manager, acquired
assets of Pilgrim Management Corporation, the Fund's former investment
manager, in a transaction that closed on April 7, 1995.
(f) Commencement of offering of shares.
(g) Annualized.
(h) Prior to the waiver of expenses, the ratio of expenses to average net
assets was 1.53%, 2.15%, and 1.99% Class A, B, and M respectively. Prior to
the waiver of expenses, the ratio of net investment income to average net
assets was 6.30%, 1.17%, and 5.88% for Class A, B, and M respectively.
See Notes to Financial Statements
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Organization - Pilgrim America Elite Series ("Elite Series") is an open-end
management investment company registered under the Investment Company Act of
1940, as amended. The Elite Series consists of three separate diversified
open-end investment company funds. Pilgrim America MagnaCap Fund ("MagnaCap
Fund"), Pilgrim America High Yield Fund ("High Yield Fund") and Pilgrim
Government Securities Income Fund "(Government Securities Income Fund"), are
collectively referred to as the "Funds" each with its own investment objective
and policies. MagnaCap Fund and High Yield Fund are a series of Pilgrim America
Investment Funds, Inc. which is a registered investment company that was
organized as a Maryland corporation in July 1969. Government Securities Income
Fund is the single series of Pilgrim Government Securities Income Fund, Inc.,
which is a registered investment company that was organized as a California
corporation in May 1984.
Prior to July 17, 1995, each Fund issued only Class A shares. Subsequent to
that date each Fund offers three classes of shares, Class A Class B and Class M.
Each class represents interests in the same assets of the applicable Fund and
the classes are identical except for differences in their sales charge structure
and ongoing distribution fees. In addition, Class B shares, along with their
prorata reinvested dividend shares, automatically convert to Class A shares
approximately eight years after purchase.
The following significant accounting policies are consistently followed by
the Funds in the preparation of their financial statements, and such policies
are in conformity with generally accepted accounting principles for investment
companies.
(a) Security Valuation
Investments in securities traded on a national securities exchange or
included on the NASDAQ National Market System are valued at the last reported
sale price. Securities traded on an exchange or NASDAQ for which there has been
no sale and securities traded in the over-the-counter market are valued at the
mean between the last reported bid and asked prices. U.S. government obligations
are valued by using market quotations or independent pricing services which use
prices provided by market-makers or estimates of market values obtained from
yield data relating to instruments or securities with similar characteristics.
Securities for which market quotations are not readily available are valued at
fair value as determined by policies set by the Board of Directors. Short term
investments are valued at cost which when combined with accrued interest,
approximates market value.
(b) Security Transactions and Revenue Recognition
Securities transactions are accounted for on the trade date. Realized gains
or losses are reported on the basis of identified cost of securities delivered.
Interest income is recorded on an accrual basis and dividend income is recorded
on the ex-dividend date.
(c) Distributions to Shareholders
The Funds record distributions to their shareholders on the ex-date. The
amount of distributions from net investment income, and net realized capital
gains are determined in accordance with federal income tax regulations, which
may differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. Key
differences are the treatment of short-term capital gains, organization costs
and other timing differences. To the extent that these differences are permanent
in nature, such amounts are reclassified within the capital accounts based on
their federal tax-basis treatment; temporary differences do not require
reclassifications. Distributions which exceed net investment income and net
realized capital gains for financial reporting purposes but not for tax purposes
are reported as distributions in excess of net investment income or net realized
capital gains. To the extent they exceed net investment income and net realized
capital gains for tax purposes, they are reported as distributions of paid-in
capital.
16
<PAGE>
(d) Federal Income Taxes
The Company's policy is to comply with the requirements of the Internal
Revenue Code that are applicable to regulated investment companies and to
distribute substantially all of its net investment income and any net realized
capital gain to its shareholders. Therefore, a federal income tax provision is
not required. In addition, by distributing during each calendar year
substantially all of its net investment income and net capital gains, each Fund
intends not to be subject to any federal excise tax.
Capital loss carryforwards were as follows at December 31, 1995:
Expiration
Amount Date
----------- ----------
MagnaCap Fund $ 100,779 2003
High Yield Fund $11,424,895 1996-2002
Government Securities
Income Fund $ 9,689,380 1996-2003
The Board of Directors intends to offset net capital gains with each capital
loss carryforward until each carryforward has been fully utilized or expires. In
addition, no capital gain distributions shall be made until the capital loss
carryforward has been fully utilized or expires.
(e) Use of Estimates
Management of the Funds has made certain estimates and assumptions relating
to the reporting of assets and liabilities to prepare these financial statements
in conformity with generally accepted accounting principles. Actual results
could differ from these estimates.
(f) Repurchase Agreements
Each Fund may invest any portion of its assets otherwise invested in money
market instruments in U.S. Government securities and concurrently enter into
repurchase agreements with respect to such securities. Such repurchase
agreements will be made only with government securities dealers recognized by
the Board of Governors of the Federal Reserve System or with member banks of the
Federal Reserve System. Under such agreements, the seller of the security agrees
to repurchase it at a mutually agreed upon time and price. The resale price is
in excess of the purchase price and reflects an agreed upon interest rate for
the period of time the agreement is outstanding. The period of these repurchase
agreements is usually short, from overnight to one week, while the underlying
securities generally have longer maturities. Each Fund will always receive as
collateral securities acceptable to it whose market value is equal to at least
100% of the amount invested by the Fund, and the Fund will make payment for such
securities only upon physical delivery or evidence of book entry transfer to the
account of its custodian. If the seller defaults, a Fund might incur a loss or
delay in the realization of proceeds if the value of the collateral securing the
repurchase agreement declines and it might incur disposition costs in
liquidating the collateral.
(g) Equalization
The Funds follow the accounting practice known as equalization whereby a
portion of the proceeds from sales and cost of redemptions of capital shares
equivalent to the amount of undistributed net investment income, on a per share
basis, on the date of the transaction, is credited or charged to undistributed
net income. As a result, undistributed net investment income per share is
unaffected by sales or redemptions of capital shares.
17
<PAGE>
(2) INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Each of the Funds has entered into an Investment Management Agreement with
Pilgrim America Investments, Inc. ("the Manager"), a wholly owned subsidiary of
Pilgrim America Group, Inc. The investment management agreements compensate the
Manager with a fee, computed daily and payable monthly, at the following annual
rates: MagnaCap Fund pays the Manager a fee at an annual rate of 1.00% of the
Fund's average daily net assets up to $30 million; 0.75% of the average daily
net assets above $30 million to $250 million; 0.625% of the average daily net
assets above $250 million to $500 million; and 0.50% of the average daily net
assets in excess of $500 million. At December 31, 1995, MagnaCap Fund owed the
Manager $151,568 in investment management fees. High Yield Fund pays the Manager
a fee at an annual rate of 0.75% of the Fund's average daily net assets on the
first $25 million of net assets; 0.625% of the average daily net assets over $25
million to $100 million; 0.50% of the average daily net assets over $100 million
to $500 million; and 0.40% of the average daily net assets in excess of $500
million. At December 31, 1995, High Yield Fund owed the Manager $10,117 in
investment management fees. Effective July 1, 1995, the Investment Manager has
voluntarily agreed to waive all or a portion of its fees and reimburse operating
expenses of the High Yield Fund, excluding distribution fees, interest, taxes,
brokerage and extraordinary expenses, so that total operating expenses do not
exceed 1.00% for Class A, 1.75% for Class B and 1.50% for Class M. This expense
limitation will apply until the earlier of December 31, 1996 or until High Yield
Fund reaches $50 million in net assets. At December 31, 1995, High Yield Fund
accrued $125,684 as a reimbursement due from the Manager for such excess
expenses. Government Securities Income Fund pays the Manager a fee at an annual
rate of 0.50% of the Fund's average daily net assets up to $500 million; 0.45%
of the average daily net assets above $500 million to $1 billion; and 0.40% of
the average daily net assets in excess $1 billion. At December 31, 1995,
Government Securities Income Fund owed the Manager $18,160 in investment
management fees. The Manager has agreed to reimburse the Government Securities
Income Fund for all gross operating costs and expenses of the Fund, excluding
any interest, taxes, brokerage commissions, amortization of organizational
expenses, extraordinary expenses, and distribution fees which exceed 1.50% of
the Fund's average daily net assets on the first $40 million of net assets and
1.00% of average daily net assets in excess of $40 million for any one fiscal
year. At December 31, 1995, the Government Securities Income Fund accrued
$13,934, as a reimbursement due from the Manager for such excess expenses.
Each of the Funds adopted a Plan pursuant to Rule 12b-1 under the 1940 Act
(the "12b-1 Plans"), whereby Pilgrim America Securities, Inc. (the
"Distributor") is reimbursed by the Funds for expenses incurred in the
distribution of each Funds' shares. Pursuant to the 12b-1 Plans, the Distributor
is entitled to reimbursement each month for actual expenses incurred in the
distribution and promotion of each Funds' shares, including the printing of
prospectuses and reports used for sales purposes, expenses of preparation and
printing of sales literature and other such distribution related expenses,
including any distribution or service fees paid to securities dealers who have
executed a distribution agreement with the Distributor.
Under separate plans of distribution pertaining to the Class A, Class B and
Class M shares, each class of shares of the Fund pay the Distributor at the
annual rate of 0.30% of the average daily net assets of Class A for MagnaCap
Fund and 0.25% of the average daily net assets of Class A for High Yield Fund,
and Government Securities Income Fund. MagnaCap Fund, High Yield Fund and
Government Securities Income Fund pay an annual rate of 1.00% and 0.75% of the
average daily net assets of Class B and Class M shares, respectively. At
December 31, 1995 MagnaCap Fund, High Yield Fund and Government Securities
Income Fund owed the Distributor $59,021, $3,499 and $9,084 respectively in
12b-1 Distribution Fees.
18
<PAGE>
(3) Investment Transactions
For the six months ended December 31, 1995, the cost of purchases and the
proceeds from the sales of securities were as follows:
<TABLE>
<CAPTION>
Government
MagnaCap High Yield Securities
Fund Fund Income Fund
------------ -------------- -----------
<S> <C> <C> <C>
U.S. Government
Obligations:
Purchases................. $ -- $ -- $4,804,277
Sales..................... $ -- $ -- $6,480,493
Other Securities:
Purchases................. $28,153,847 $1,544,680 $ --
Sales..................... $36,382,441 $1,690,558 $ --
</TABLE>
(4) Capital Shares
As of December 31, 1995, authorized capital consisted of 200 million shares
of $.10 par value capital stock each for MagnaCap Fund and High Yield Fund and 5
billion shares of common stock without par value for Government Securities
Income Fund.
(5) Custodial Agreement
Investors Fiduciary Trust Company (IFTC) serves as the Funds' custodian and
recordkeeper. Custody fees paid to IFTC are reduced by an earnings credit based
on the cash balances held by IFTC for each of the Funds. For the six months
ended December 31, 1995, MagnaCap Fund, High Yield Fund and Government
Securities Income Fund received earnings credits $1,341, $714, and $1,246,
respectively.
19
<PAGE>
MAGNACAP FUND
PORTFOLIO OF INVESTMENTS
AS OF DECEMBER 31, 1995 (UNAUDITED)
- ----------------------------------------------------
COMMON STOCKS: 99.1%
<TABLE>
<CAPTION>
Market
Shares Value
------ ------
<C> <S> <C>
Chemicals: 4.2%
140,000 E.I. du Pont de Nemours & Co. .................. $9,782,500
-------------
Chemicals-Diversified: 4.4%
226,600 PPG Industries, Inc. ........................... 10,366,950
-------------
Computer Software & Services: 8.1%
234,000 Automatic Data Processing, Inc. ................ 17,374,500
28,600 Diebold Inc. ................................... 1,583,725
------------
18,958,225
-------------
Computer Systems: 3.6%
160,000 General Motors Corp., Class E .................. 8,320,000
-------------
Cosmetics: 4.2%
205,400 International Flavors & Fragrances Inc. ........ 9,859,200
-------------
Electrical Equipment: 11.6%
240,000 General Electric Co. ........................... 17,280,000
149,100 Harvey Hubbell, Inc. Class B ................... 9,803,325
-------------
27,083,325
-------------
Electronics-Defense: 1.7%
110,000 Loral Corp. .................................... 3,891,250
-------------
Foods: 2.0%
150,000 Sara Lee Corp. ................................. 4,781,250
-------------
Housewares: 0.6%
60,000 Rubbermaid, Inc. ............................... 1,530,000
-------------
Leisure Time: 3.4%
330,900 Brunswick Corp. ................................ 7,941,600
-------------
Life Insurance: 7.5%
405,000 AFLAC, Inc. .................................... 17,566,875
-------------
Major Regional Banks: 4.1%
237,800 Comerica, Inc. ................................. 9,541,725
-------------
Oil-International Integrated: 11.9%
260,000 Chevron Corp. .................................. 13,650,000
100,000 Royal Dutch Petroleum Co. ...................... 14,112,500
-------------
27,762,500
-------------
</TABLE>
See Notes to Financial Statements
20
<PAGE>
MAGNACAP FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
AS OF DECEMBER 31, 1995 (UNAUDITED)
- ----------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
- ------- ------
<C> <S> <C>
Oil Well Equipment & Services: 5.2%
174,500 Schlumberger Ltd. .............................. $ 12,084,125
------------
Paper and Forest Products: 14.6%
258,024 Kimberly-Clark Corp. ........................... 21,351,486
75,900 Mead Corp. ..................................... 3,965,775
172,400 Potlatch Corp. ................................. 6,896,000
67,000 Wausau Paper Mills ............................. 1,825,750
------------
34,039,011
------------
Restaurants: 6.5%
335,000 McDonalds Corp. ................................ 15,116,875
------------
Retail Drug Stores: 5.5%
375,000 Rite Aid Corp. ................................. 12,843,750
------------
Total Common Stocks (Cost $113,208,324)... 231,469,161
------------
<CAPTION>
Principal
Amount Value
- --------- -----
SHORT-TERM INVESTMENTS: 0.7%
<C> <S> <C>
$1,536,000 Lehman Securities Repurchase Agreement,
5.700%, Due 01/02/96.......................... 1,536,000
------------
Total Short-Term Investments
(Cost $1,536,000)....................... 1,536,000
------------
Total Investments in Securities
(Cost $114,744,324)*.......................... 99.8% 233,005,161
Cash and Other Assets in Excess of
Liabilities - Net............................. 0.2% 489,073
----- ------------
Total Net Assets.............. 100.0% $233,494,234
===== ============
</TABLE>
- ------------------
* Cost for federal income tax purposes is the same as for financial
statement purposes. Net unrealized appreciation consists of:
<TABLE>
<S> <C>
Gross Unrealized Appreciation ....................................... $118,723,137
Gross Unrealized Depreciation ....................................... (462,300)
------------
Net Unrealized Appreciation ................................. $118,260,837
============
</TABLE>
See Notes to Financial Statements
21
<PAGE>
HIGH YIELD FUND
PORTFOLIO OF INVESTMENTS
AS OF DECEMBER 31, 1995 (Unaudited)
- -----------------------------------
<TABLE>
<CAPTION>
CORPORATE BONDS: 90.0%
Principal Market
Amount Value
---------- --------
<S> <C> <C>
Aerospace: 2.9%
$500,000 Sequa Corp., 9.375%, Note, 2003......................... $467,500
Broadcasting: 3.0%
500,000 Spanish Broadcasting System Inc., 7.500%, Sr. Note, 2002 488,750
--------------
Chemicals: 3.4%
500,000 Arcadian Partners LP, 10.750%, Ser. B Sr. Note, 2005.... 553,750
--------------
Communications: 10.1%
500,000 A+ Network Inc., 11.875%, Note, 2005.................... 507,500
547,000 Mobile Telecommunications Tech. Corp., 13.500%, Sr.
Sub. Note, 2002....................................... 612,640
500,000 Paging Network, 8.875%, Note, 2006...................... 513,750
--------------
1,633,890
--------------
Consumer Products: 6.4%
500,000 Coty Inc. 10.250%, Sr. Sub. Note, 2005.................. 532,500
500,000 Revlon Consumer Products Corp., 10.500%, Ser. B Sr.
Sub. Deb. Note, 2003.................................. 511,250
--------------
1,043,750
--------------
Entertainment: 2.8%
500,000 Plitt Theaters Inc., 10.875%, Note, 2004................ 455,000
--------------
Food Stores: 9.1%
500,000 Brunos Inc., 10.500%, Note, 2005........................ 496,250
500,000 Pathmark Stores Inc., 9.625%, Sr. Sub. Note, 2003....... 487,500
500,000 Ralphs Grocery Co., 11.000%, Note, 2005................. 497,500
--------------
1,481,250
--------------
Gaming: 3.0%
500,000 Station Casinos Inc., 9.625%, Sr. Sub. Note, 2003....... 493,750
--------------
Healthcare: 6.4%
500,000 Healthsouth Corp., 9.500%, Sr. Sub. Note, 2001.......... 535,625
500,000 Regency Health Services Inc., 9.875%, Note, 2002........ 496,250
--------------
1,031,875
--------------
Hotels: 1.5%
250,000 Red Roof Inns, 9.625%, Note, 2003....................... 245,000
--------------
Manufacturing: 3.1%
500,000 Talley Industries, 10.750%, Note, 2003.................. 503,750
--------------
</TABLE>
See Notes to Financial Statements
22
<PAGE>
HIGH YIELD FUND
PORTFOLIO OF INVESTMENTS (Continued)
AS OF DECEMBER 31, 1995 (Unaudited)
- -----------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value
---------- --------
<S> <C> <C>
Media & Entertainment: 22.4%
$500,000 Adelphia Communications, 12.500%, Note, 2002........... $491,250
250,000 CAI Wireless Systems Inc., 12.250%, Note, 2002......... 267,500
500,000 CF Cable TV Inc., 11.625%, Sr. Sec. 2nd Note, 2005..... 550,000
500,000 Cablevision Systems Corp., 9.250%, Note, 2005.......... 523,750
500,000 Century Communications, 9.750%, Note, 2005............. 523,750
250,000 Fundy Cable, 11.000%, Note, 2005....................... 261,250
500,000 Galaxy Telecom, 12.375%, Note, 2005.................... 500,625
500,000 Wireless One Inc., 13.000%, Note, 2003................. 519,375
--------------
3,637,500
--------------
Office Products & Services: 3.2%
500,000 Williamhouse Regency, 13.000%, Note, 2005.............. 521,250
--------------
Paper Products: 6.4%
500,000 Doman Industries Limited, 8.750%, Note, 2004........... 476,250
500,000 Malette Inc., 12.250%, Sr. Sec. Note, 2004............. 562,500
--------------
1,038,750
--------------
Pollution Control: 3.1%
500,000 Norcal Waste Systems, 12.500%, Note, 2005.............. 507,500
--------------
Retail: 3.2%
500,000 Hines Horticulture, 11.750%, Note, 2005................ 515,000
--------------
Total Corporate Bonds (Cost $13,913,938)............. 14,618,265
--------------
<CAPTION>
Shares Value
------ -----
WARRANTS: 0.6%
Broadcasting: 0.6%
500 @ Spanish Broadcasting System Inc., expiring 06/30/99.... 92,500
--------------
Total Warrants (Cost $38,857)........................ 92,500
--------------
</TABLE>
See Notes to Financial Statements
23
<PAGE>
HIGH YIELD FUND
PORTFOLIO OF INVESTMENTS (Continued)
AS OF DECEMBER 31, 1995 (Unaudited)
- -----------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
---------- -----------
<S> <C> <C>
SHORT-TERM INVESTMENTS: 5.9%
$952,000 Lehman Securities Repurchase Agreement, 5.700%,
Due 01/02/96..................................................... $952,000
-----------
Total Short-Term Investments (Cost $952,000).................... 952,000
-----------
Total Investments in Securities (Cost $14,904,795)*.... 96.5% 15,662,765
Cash and Other Assets in Excess of Liabilities - Net.... 3.5% 561,768
------ -----------
Total Net Assets............................ 100.0% $16,224,533
====== ===========
</TABLE>
-----------
@ Non-income producing security.
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<TABLE>
<S> <C>
Gross Unrealized Appreciation.............................. $782,970
Gross Unrealized Depreciation.............................. (25,000)
--------
Net Unrealized Appreciation............................ $757,970
========
</TABLE>
See Notes to Financial Statements
24
<PAGE>
GOVERNMENT SECURITIES INCOME FUND
PORTFOLIO OF INVESTMENTS
AS OF DECEMBER 31, 1995 (Unaudited)
- -------------------------------------------------------
U.S. GOVERNMENT SECURITIES: 92.9%
<TABLE>
<CAPTION>
Principal Market
Amount Rate Maturity Value
- --------- ---- -------- ---------
<C> <S> <C> <C> <C>
$3,918,886 Federal Home Loan Mortgage Corporation ........ 6.500% 2025 $3,877,307
1,702,940 Federal Housing Authority Project Loan ........ 7.625% 2029 1,715,713
3,543,763 Federal National Mortgage Association ......... 8.500% 2017 to 2021 3,735,800
2,176,301 Federal National Mortgage Association ......... 11.000% 2020 2,457,371
2,630,329 Government National Mortgage Association ...... 7.500% 2023 to 2024 2,708,188
4,026,468 Government National Mortgage Association ...... 8.000% 2023 to 2024 4,222,960
1,011,115 Government National Mortgage Association ...... 8.500% 2025 1,062,359
1,490,566 Government National Mortgage Association ...... 9.000% 2025 1,580,074
2,944,316 Government National Mortgage Association ...... 9.000% 2016 to 2017 3,161,607
1,763,270 Government National Mortgage Association ...... 11.500% 2010 to 2019 2,021,484
2,500,000 U.S. Treasury Notes ........................... 6.875% 2025 2,819,525
2,250,000 U.S. Treasury Notes ........................... 7.750% 1999 2,438,077
5,000,000 U.S. Treasury Notes ........................... 10.375% 2009 6,596,850
1,000,000 U.S. Treasury Notes ........................... 10.750% 2005 1,373,910
---------
Total U.S. Government Securities (Cost $38,693,212) ............... 39,771,225
----------
<CAPTION>
Principal
Amount Value
------ -----
<C> <S> <C>
SHORT-TERM INVESTMENTS: 2.6%
1,116,000 Lehman Securities Repurchase Agreement, 5.700%, Due 01/02/96 .......... 1,116,000
---------
Total Short-Term Investments (Cost $1,116,000) ........................ 1,116,000
---------
Total Investments (Cost $39,809,212)* ......... 95.5% 40,887,225
Cash and Other Assets in Excess of Liabilities-Net 4.5% 1,933,092
---- ----------
Total Net Assets .......................... 100.0% $42,820,317
===== ==========
</TABLE>
- ------------------
* Cost for federal income tax purposes is the same as for financial
statement purposes. Net unrealized appreciation consists of:
<TABLE>
<S> <C>
Gross Unrealized Appreciation ........................................................ $1,078,013
Gross Unrealized Depreciation ........................................................ --
---------
Net Unrealized Appreciation ....................................................... $1,078,013
=========
</TABLE>
See Notes to Financial Statements
25
<PAGE>
ELITE SERIES
- ------------
PILGRIM AMERICA MAGNACAP FUND [LOGO OF PILGRIM AMERICA FUNDS]
PILGRIM AMERICA HIGH YIELD FUND
PILGRIM GOVERNMENT SECURITIES
INCOME FUND
TWO RENAISSANCE SQUARE, 40 NORTH CENTRAL AVENUE,
SUITE 1200, PHOENIX, ARIZONA 85004
1-800-331-1080
TABLE OF CONTENTS
<TABLE>
<S> <C>
Chairman's Message.......................................................... 1
Portfolio Managers' Reports:
Pilgrim America MagnaCap Fund............................................. 2
Pilgrim America High Yield Fund........................................... 5
Pilgrim Government Securities Income Fund................................. 8
Statements of Assets and Liabilities........................................ 10
Statements of Operations.................................................... 11
Statements of Changes in Net Assets......................................... 12
Financial Highlights........................................................ 13
Notes to Financial Statements............................................... 16
Portfolios of Investments:
Pilgrim America MagnaCap Fund............................................. 20
Pilgrim America High Yield Fund........................................... 22
Pilgrim Government Securities Income Fund................................. 25
</TABLE>
This report and the financial statements contained herein are submitted for the
general information of the stockholders of the fund. This report is not
authorized for distribution to prospective investors in the fund unless
preceded or accompanied by an effective prospectus.
INVESTMENT MANAGER
Pilgrim America Investments, Inc.
Two Renaissance Square
40 North Central Avenue
Suite 1200
Phoenix, Arizona 85004
DISTRIBUTOR
Pilgrim America Securities, Inc.
Two Renaissance Square
40 North Central Avenue
Suite 1200
Phoenix, Arizona 85004
1-800-334-3444
SHAREHOLDER SERVICING AGENT
Pilgrim America Group, Inc.
Two Renaissance Square
40 North Central Avenue
Suite 1200
Phoenix, Arizona 85004
1-800-331-1080
TRANSFER AGENT
Investors Fiduciary Trust Company
c/o DST Systems, Inc.
P.O. Box 419368
Kansas City, Missouri 64141-6368
CUSTODIAN
Investors Fiduciary Trust Company
127 W. 10th Street/14th Floor
Kansas City, Missouri 64105
LEGAL COUNSEL
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
725 South Figueroa Street
Los Angeles, California 90017
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> MAGNA CAP FUND--CLASS A
</SERIES>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 114,744,324
<INVESTMENTS-AT-VALUE> 233,005,161
<RECEIVABLES> 718,172
<ASSETS-OTHER> 32,290
<OTHER-ITEMS-ASSETS> 10,366
<TOTAL-ASSETS> 233,765,989
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 271,755
<TOTAL-LIABILITIES> 271,755
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 110,546,496
<SHARES-COMMON-STOCK> 14,418,871
<SHARES-COMMON-PRIOR> 15,058,936
<ACCUMULATED-NII-CURRENT> 672,503
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,014,398
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 118,260,837
<NET-ASSETS> 233,494,234
<DIVIDEND-INCOME> 2,383,752
<INTEREST-INCOME> 28,952
<OTHER-INCOME> 0
<EXPENSES-NET> (1,746,760)
<NET-INVESTMENT-INCOME> 665,944
<REALIZED-GAINS-CURRENT> 4,115,683
<APPREC-INCREASE-CURRENT> 25,992,176
<NET-CHANGE-FROM-OPS> 30,774,202
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (913,058)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25,645,392
<NUMBER-OF-SHARES-REDEEMED> (34,047,239)
<SHARES-REINVESTED> 705,020
<NET-CHANGE-IN-ASSETS> 22,164,230
<ACCUMULATED-NII-PRIOR> 919,305
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (101,285)
<GROSS-ADVISORY-FEES> 854,932
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,747,207
<AVERAGE-NET-ASSETS> 216,068,142
<PER-SHARE-NAV-BEGIN> 14.03
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 2.05
<PER-SHARE-DIVIDEND> (0.06)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.07
<EXPENSE-RATIO> 1.64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 012
<NAME> MAGNA CAP FUND--CLASS B
</SERIES>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-17-1996
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 114,744,324
<INVESTMENTS-AT-VALUE> 233,005,161
<RECEIVABLES> 718,172
<ASSETS-OTHER> 32,290
<OTHER-ITEMS-ASSETS> 10,366
<TOTAL-ASSETS> 233,765,989
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 271,755
<TOTAL-LIABILITIES> 271,755
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 110,546,496
<SHARES-COMMON-STOCK> 101,481
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 672,503
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,014,398
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 118,260,837
<NET-ASSETS> 233,494,234
<DIVIDEND-INCOME> 95
<INTEREST-INCOME> 7,830
<OTHER-INCOME> 0
<EXPENSES-NET> (7,709)
<NET-INVESTMENT-INCOME> 216
<REALIZED-GAINS-CURRENT> 4,115,683
<APPREC-INCREASE-CURRENT> 25,992,176
<NET-CHANGE-FROM-OPS> 30,774,202
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (76)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25,645,392
<NUMBER-OF-SHARES-REDEEMED> (34,047,239)
<SHARES-REINVESTED> 705,020
<NET-CHANGE-IN-ASSETS> 22,164,230
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 854,932
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (8,156)
<AVERAGE-NET-ASSETS> 709,786
<PER-SHARE-NAV-BEGIN> 14.22
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> 1.80
<PER-SHARE-DIVIDEND> (0.06)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.02
<EXPENSE-RATIO> 2.37
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 013
<NAME> MAGNA CLASS FUND--CLASS M
</SERIES>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-17-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 114,744,324
<INVESTMENTS-AT-VALUE> 233,005,161
<RECEIVABLES> 718,172
<ASSETS-OTHER> 32,290
<OTHER-ITEMS-ASSETS> 10,366
<TOTAL-ASSETS> 233,765,989
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 271,755
<TOTAL-LIABILITIES> 271,755
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 110,546,496
<SHARES-COMMON-STOCK> 14,296
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 672,503
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,014,398
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 118,260,837
<NET-ASSETS> 233,494,234
<DIVIDEND-INCOME> 14
<INTEREST-INCOME> 1,125
<OTHER-INCOME> 0
<EXPENSES-NET> (956)
<NET-INVESTMENT-INCOME> 183
<REALIZED-GAINS-CURRENT> 4,115,683
<APPREC-INCREASE-CURRENT> 25,992,176
<NET-CHANGE-FROM-OPS> 30,774,202
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (11)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25,645,392
<NUMBER-OF-SHARES-REDEEMED> (34,037,239)
<SHARES-REINVESTED> 705,020
<NET-CHANGE-IN-ASSETS> 22,164,230
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 854,932
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (1,403)
<AVERAGE-NET-ASSETS> 99,611
<PER-SHARE-NAV-BEGIN> 14.22
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 1.83
<PER-SHARE-DIVIDEND> 0.06
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.04
<EXPENSE-RATIO> 2.09
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 021
<NAME> HIGH YIELD FUND--CLASS A
</SERIES>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 13,952,795
<INVESTMENTS-AT-VALUE> 15,662,765
<RECEIVABLES> 592,889
<ASSETS-OTHER> 2,410
<OTHER-ITEMS-ASSETS> 10,261
<TOTAL-ASSETS> 16,268,325
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 43,792
<TOTAL-LIABILITIES> 43,792
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 27,251,984
<SHARES-COMMON-STOCK> 2,497,660
<SHARES-COMMON-PRIOR> 2,592,716
<ACCUMULATED-NII-CURRENT> 91,119
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (11,876,540)
<ACCUM-APPREC-OR-DEPREC> 757,970
<NET-ASSETS> 16,224,533
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 802,631
<OTHER-INCOME> 0
<EXPENSES-NET> (79,638)
<NET-INVESTMENT-INCOME> 722,993
<REALIZED-GAINS-CURRENT> 222,841
<APPREC-INCREASE-CURRENT> 83,334
<NET-CHANGE-FROM-OPS> 1,031,434
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (633,448)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,069,488
<NUMBER-OF-SHARES-REDEEMED> (1,455,784)
<SHARES-REINVESTED> 264,213
<NET-CHANGE-IN-ASSETS> 274,647
<ACCUMULATED-NII-PRIOR> 564
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (12,099,381)
<GROSS-ADVISORY-FEES> 59,573
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 206,471
<AVERAGE-NET-ASSETS> 15,749,264
<PER-SHARE-NAV-BEGIN> 6.15
<PER-SHARE-NII> 0.29
<PER-SHARE-GAIN-APPREC> 0.12
<PER-SHARE-DIVIDEND> (0.25)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.31
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 022
<NAME> HIGH YIELD FUND--CLASS B
</SERIES>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 13,952,795
<INVESTMENTS-AT-VALUE> 15,662,765
<RECEIVABLES> 592,889
<ASSETS-OTHER> 2,410
<OTHER-ITEMS-ASSETS> 10,261
<TOTAL-ASSETS> 16,268,325
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 43,792
<TOTAL-LIABILITIES> 43,792
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 27,251,984
<SHARES-COMMON-STOCK> 2,497,660
<SHARES-COMMON-PRIOR> 2,592,716
<ACCUMULATED-NII-CURRENT> 91,119
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (11,876,540)
<ACCUM-APPREC-OR-DEPREC> 757,970
<NET-ASSETS> 16,224,533
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,287
<OTHER-INCOME> 0
<EXPENSES-NET> (231)
<NET-INVESTMENT-INCOME> 1,057
<REALIZED-GAINS-CURRENT> 222,841
<APPREC-INCREASE-CURRENT> 83,334
<NET-CHANGE-FROM-OPS> 1,031,434
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (428)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,069,488
<NUMBER-OF-SHARES-REDEEMED> (1,455,784)
<SHARES-REINVESTED> 264,213
<NET-CHANGE-IN-ASSETS> 274,647
<ACCUMULATED-NII-PRIOR> 564
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (12,099,381)
<GROSS-ADVISORY-FEES> 59,573
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 206,471
<AVERAGE-NET-ASSETS> 23,620
<PER-SHARE-NAV-BEGIN> 6.20
<PER-SHARE-NII> 0.20
<PER-SHARE-GAIN-APPREC> 0.09
<PER-SHARE-DIVIDEND> (0.19)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.30
<EXPENSE-RATIO> 1.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 023
<NAME> HIGH YIELD FUND--CLASS M
</SERIES>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 13,952,795
<INVESTMENTS-AT-VALUE> 15,662,765
<RECEIVABLES> 592,889
<ASSETS-OTHER> 2,410
<OTHER-ITEMS-ASSETS> 10,261
<TOTAL-ASSETS> 16,268,325
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 43,792
<TOTAL-LIABILITIES> 43,792
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 27,251,984
<SHARES-COMMON-STOCK> 2,497,660
<SHARES-COMMON-PRIOR> 2,592,716
<ACCUMULATED-NII-CURRENT> 91,119
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (11,876,540)
<ACCUM-APPREC-OR-DEPREC> 757,970
<NET-ASSETS> 16,224,533
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,412
<OTHER-INCOME> 0
<EXPENSES-NET> (204)
<NET-INVESTMENT-INCOME> 1,209
<REALIZED-GAINS-CURRENT> 222,841
<APPREC-INCREASE-CURRENT> 83,334
<NET-CHANGE-FROM-OPS> 1,031,434
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (828)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,069,488
<NUMBER-OF-SHARES-REDEEMED> (1,455,784)
<SHARES-REINVESTED> 264,213
<NET-CHANGE-IN-ASSETS> 274,647
<ACCUMULATED-NII-PRIOR> 564
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (12,099,381)
<GROSS-ADVISORY-FEES> 59,573
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 206,471
<AVERAGE-NET-ASSETS> 26,990
<PER-SHARE-NAV-BEGIN> 6.20
<PER-SHARE-NII> 0.22
<PER-SHARE-GAIN-APPREC> 0.08
<PER-SHARE-DIVIDEND> (0.20)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.30
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 01
<NAME> GOVERNMENT SECURITIES INCOME FUND--CLASS A
</SERIES>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 38,693,212
<INVESTMENTS-AT-VALUE> 40,887,225
<RECEIVABLES> 2,028,806
<ASSETS-OTHER> 16,215
<OTHER-ITEMS-ASSETS> 10,420
<TOTAL-ASSETS> 42,942,666
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 122,349
<TOTAL-LIABILITIES> 122,349
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 78,294,262
<SHARES-COMMON-STOCK> 3,243,527
<SHARES-COMMON-PRIOR> 3,363,701
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (15,649)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (36,536,309)
<ACCUM-APPREC-OR-DEPREC> 1,078,013
<NET-ASSETS> 42,820,317
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,688,000
<OTHER-INCOME> 0
<EXPENSES-NET> (315,947)
<NET-INVESTMENT-INCOME> 1,372,053
<REALIZED-GAINS-CURRENT> 699,683
<APPREC-INCREASE-CURRENT> 61,645
<NET-CHANGE-FROM-OPS> 2,133,413
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,387,673)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,956,569
<NUMBER-OF-SHARES-REDEEMED> 6,014,971
<SHARES-REINVESTED> 501,711
<NET-CHANGE-IN-ASSETS> (810,961)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (51)
<OVERDIST-NET-GAINS-PRIOR> (37,235,992)
<GROSS-ADVISORY-FEES> (107,677)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (331,142)
<AVERAGE-NET-ASSETS> 42,835,705
<PER-SHARE-NAV-BEGIN> 12.97
<PER-SHARE-NII> 0.42
<PER-SHARE-GAIN-APPREC> 0.23
<PER-SHARE-DIVIDEND> (0.42)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.20
<EXPENSE-RATIO> 1.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 02
<NAME> GOVERNMENT SECURITIES INCOME FUND--CLASS B
</SERIES>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-17-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 38,693,212
<INVESTMENTS-AT-VALUE> 40,887,225
<RECEIVABLES> 2,028,806
<ASSETS-OTHER> 16,215
<OTHER-ITEMS-ASSETS> 10,420
<TOTAL-ASSETS> 42,942,666
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 122,349
<TOTAL-LIABILITIES> 122,349
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 78,294,262
<SHARES-COMMON-STOCK> 630
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (15,649)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (36,536,309)
<ACCUM-APPREC-OR-DEPREC> 1,078,013
<NET-ASSETS> 42,820,317
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7
<OTHER-INCOME> 0
<EXPENSES-NET> (2)
<NET-INVESTMENT-INCOME> 5
<REALIZED-GAINS-CURRENT> 699,683
<APPREC-INCREASE-CURRENT> 61,645
<NET-CHANGE-FROM-OPS> 2,133,413
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,956,569
<NUMBER-OF-SHARES-REDEEMED> 6,014,971
<SHARES-REINVESTED> 501,711
<NET-CHANGE-IN-ASSETS> (810,961)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (51)
<OVERDIST-NET-GAINS-PRIOR> (37,235,992)
<GROSS-ADVISORY-FEES> (107,677)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (331,142)
<AVERAGE-NET-ASSETS> 212
<PER-SHARE-NAV-BEGIN> 12.95
<PER-SHARE-NII> 0.40
<PER-SHARE-GAIN-APPREC> 0.16
<PER-SHARE-DIVIDEND> (0.32)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.19
<EXPENSE-RATIO> 2.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 03
<NAME> GOVERNMENT SECURITIES INCOME FUND--CLASS M
</SERIES>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-17-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 38,693,212
<INVESTMENTS-AT-VALUE> 40,887,225
<RECEIVABLES> 2,028,806
<ASSETS-OTHER> 16,215
<OTHER-ITEMS-ASSETS> 10,420
<TOTAL-ASSETS> 42,942,666
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 122,349
<TOTAL-LIABILITIES> 122,349
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 78,294,262
<SHARES-COMMON-STOCK> 17
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (15,649)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (36,536,309)
<ACCUM-APPREC-OR-DEPREC> 1,078,013
<NET-ASSETS> 42,820,317
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 40
<OTHER-INCOME> 0
<EXPENSES-NET> (13)
<NET-INVESTMENT-INCOME> 27
<REALIZED-GAINS-CURRENT> 699,683
<APPREC-INCREASE-CURRENT> 61,645
<NET-CHANGE-FROM-OPS> 2,133,413
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,956,569
<NUMBER-OF-SHARES-REDEEMED> 6,014,971
<SHARES-REINVESTED> 501,711
<NET-CHANGE-IN-ASSETS> (810,961)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (107,677)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (331,142)
<AVERAGE-NET-ASSETS> 1,100
<PER-SHARE-NAV-BEGIN> 14.22
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 1.83
<PER-SHARE-DIVIDEND> (0.06)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.04
<EXPENSE-RATIO> 2.09
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
