<PAGE>
EVERGREEN ASSET MANAGEMENT
2500 WESTCHESTER AVENUE
PURCHASE, N.Y. 10577
July 12, 1996
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C.
Attention: File Room
Re: EVERGREEEN INVESTMENT TRUST
File No. 811-4154
EVERGREEN EQUITY TRUST
File No. 811-5684
Commissionioners:
Please be advised that the final Semi-Annual Reports for the above
referenced Trusts which include Evergreen Global Real Estate Equity Fund,
Evergreen Global Leaders Fund, Evergreen Emerging Markets Growth Fund, and
Evergreen International Equity Fund were submitted to your office on July 12,
1996, via electronic transmission (Edgar).
Any questions or comments about this documemt should be directed to the
undersigned at (914) 641-2206.
Very Truly Yours,
/s/ James P. Wallin
James P. Wallin
Vice President and
Assistant General Counsel
EVERGREEN INTERNATIONAL/GLOBAL GROWTH FUNDS
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
Economic Overview......................................................... 1
(Photo of money EMERGING MARKETS A Report From Your Portfolio Manager...................................... 3
appears here) GROWTH FUND Statement of Investments.................................................. 4
Industry Diversification.................................................. 6
Statement of Assets and Liabilities....................................... 7
Statement of Operations................................................... 8
Statement of Changes in Net Assets........................................ 9
Financial Highlights...................................................... 10
</TABLE>
<TABLE>
<C> <S> <C>
(Global Leaders Fund GLOBAL LEADERS A Report From Your Portfolio Managers..................................... 12
Logo appears here) FUND Statement of Investments.................................................. 15
Industry Diversification.................................................. 17
Statement of Assets and Liabilities....................................... 18
Statement of Operations................................................... 19
Statement of Changes in Net Assets........................................ 20
Financial Highlights...................................................... 21
</TABLE>
<TABLE>
<C> <S> <C>
(Photo of Globe GLOBAL REAL A Report From Your Portfolio Manager...................................... 22
appears here) ESTATE EQUITY Statement of Investments.................................................. 26
FUND Statement of Assets and Liabilities....................................... 28
Statement of Operations................................................... 29
Statement of Changes...................................................... 30
Financial Highlights...................................................... 31
</TABLE>
<TABLE>
<C> <S> <C>
(Photo of flags INTERNATIONAL A Report From Your Portfolio Manager...................................... 33
appears here) EQUITY FUND Statement of Investments.................................................. 36
Industry Diversification.................................................. 42
Statement of Assets and Liabilities....................................... 43
Statement of Operations................................................... 44
Statement of Changes in Net Assets........................................ 45
Financial Highlights...................................................... 46
</TABLE>
<TABLE>
<C> <S> <C>
Combined Notes to Financial Statements.................................... 48
Trustees and Officers...................................... Inside Back Cover
</TABLE>
<PAGE>
EVERGREEN INTERNATIONAL/GLOBAL GROWTH FUNDS
ECONOMIC OVERVIEW
BY EVERGREEN ASSET MANAGEMENT CHAIRMAN,
STEPHEN A. LIEBER
It is vital for investors to emphasize an (Photo of Stephen A.
international perspective in this ever broadening, Lieber appears here)
highly competitive world economy. Issues of currency
stability, and the United States export and import
positions, will be of
increased importance to investors this year. In contrast with 1995, this year
the dollar has risen in value, particularly against the Japanese yen. We believe
it is relevant that, in 1993 through 1995, Japan suffered through its deepest
recession of the post-war years, as its currency was appreciating versus the
dollar and other currencies. This yen rise limited Japanese exports, created
more pressure for imports, and brought considerable motivation for Japanese
companies to move their manufacturing to other Asian countries, particularly
China, with far lower labor costs. Japan's recession was aggravating a major
banking crisis, one which many saw as potentially threatening the Japanese
financial structure. We think it not unlikely that the Federal Reserve chose to
facilitate a rise in the dollar versus the yen by allowing interest rates in the
United States to rise and, therefore, allowed buying of the dollar by those in
the international market who wanted comparatively higher yields. This move took
pressure off the yen and currencies of other major trading nations which were
caught in a period of very slow growth or even decline, such as Germany and
France. We believe that the Federal Reserve recognizes an international
responsibility for coordination to sustain the values of currencies and the
liquidity of international markets. A rise in the dollar could be considered
acceptable provided that it does not slow the growth of the United States
economy.
During the second quarter, Japanese economic growth did again accelerate,
reflecting better export demand. European economies have yet to recover
momentum, despite lower interest rates, as corporate restructuring has sustained
double-digit unemployment levels in many countries.
There has been widespread expectation that U.S. exports would prove a
significant stimulus to economic growth in 1996. For this expectation to be
fulfilled, it is necessary that the dollar not move too high relative to other
currencies, and also that the dollar not rise so much as to significantly
stimulate imports because products originating in other currencies begin to look
like bargains to our buyers. The most recent trade deficit figures are not
encouraging, suggesting to us that any sustained trend to reduced exports and
increased imports may well cause the Federal Reserve to facilitate a decline of
the dollar through lower interest rates, if such a lowering is not considered
unduly stimulative. Further, reductions in European interest rates, in turn,
might energize those economies and increase demand for U.S. products. These
complex choices and underlying demand factors are not yet clear for the balance
of 1996. Our view of the economy and of the interest rate environment is that it
is likely to be steady, but sensitive. Order backlogs have shortened; production
must more accurately reflect current demand, and demand itself shows no very
strong trends in either direction.
Outside the United States and its major trading partners, there continue to
be developing nations with strongly growing demand. China is central in this
trend, as its industrialization moves ahead rapidly, its exports grow, and the
major industrial powers pour capital goods into its economy. The China trade is
booming as never before. It has positive impacts on the many large American
companies who are supplying it with equipment ranging from power plants and jet
engines to computer systems.
1
<PAGE>
EVERGREEN INTERNATIONAL/GLOBAL GROWTH FUNDS
ECONOMIC OVERVIEW -- (CONTINUED)
It provides commerce for Hong Kong and manufactures goods for Hong Kong, while
it also provides capital investment opportunities for Taiwan and Singapore, and
demand stimulus to raw material producers and intermediate products
manufacturers throughout Southeast Asia. China's trade surplus with the United
States is rapidly growing in importance. Because of these and other factors,
Asian markets outperformed those of the United States and Europe in recent
months, once again bringing investor attention to the so-called emerging markets
and heightening sensitivity to the opportunities in international investing.
Over the balance of 1996, great attention will be paid by investors to the
trends of the dollar, the impacts of international trade, and the consequences
of interest rate moves. Our nation must look abroad in establishing and
maintaining its economic policies. This perhaps will not be emphasized in the
rhetoric of an election year as Presidential and Congressional candidates try to
focus the public on what they can accomplish for the nation. For the investor,
however, the need to study international economic relationships will be
paramount in understanding the trends of financial liquidity and capital
markets.
2
<PAGE>
EVERGREEN EMERGING MARKETS GROWTH FUND
(Photo of money
appears here)
A REPORT FROM YOUR
PORTFOLIO MANAGER
RICHARD WAGONER
For the six-month period ended April 30, 1996, Evergreen (Photo of
Emerging Markets Growth Fund's total return (Class A shares at Richard Wagoner
NAV) was 16.8%*, as compared with 12.5% for the Morgan Stanley appears here)
Capital International (MSCI) Emerging Markets Index**, the
Fund's benchmark index. The six-month total returns for the
Fund's Class B shares at NAV, Class C shares at NAV, and Class
Y, no-load, shares, were 16.4%, 16.4%. and 16.9%,
respectively. Class A shares are subject to a maximum 4.75%
front end sales charge, Class B shares are subject to a
maximum 5% contingent deferred sales charge, and Class C
shares are subject to a 1% contingent deferred sales charge
within
the first year of purchase. Sales charges are not reflected in
figures above, and if reflected, performance would be lower.
Leading markets during the six months included Taiwan, Mexico and Argentina,
each of which posted total returns in excess of 30%, as measured by their
respective MSCI country sub-indexes***. Lagging markets were South Korea and
Chile, which declined 2% and 4%, respectively. The global investment environment
was extremely positive for the emerging markets during the six-month period.
Global financial liquidity was ample, as the developed nations pursued an
accommodative monetary policy in an attempt to energize their economies. An
environment of slow growth and low interest rates in the mature markets
stimulated interest in the higher growth emerging economies.
As compared with the MSCI Emerging Markets Index, our overweights in
Argentina, Indonesia and Peru, helped performance versus the Index, as did our
underweights of South Korea and Brazil. While we were underweighted in several
other countries that did post strong gains, particularly Taiwan and Mexico,
reasonable sector and stock selection helped to compensate. Our major industry
overweights were in the financial and services sectors.
As we look forward, the global backdrop for emerging markets appears to have
changed slightly. Stock markets have become concerned that growth and inflation
in the developed world might accelerate during the latter part of 1996. Bond
markets have reacted to this concern and long-term interest rates have risen 50
to 100 basis points in Europe, Japan and the United States. We remain convinced,
however, that growth and inflation will stay relatively subdued and that the
environment for emerging market equities will be generally positive. We continue
to emphasize the Pacific Rim and Latin American markets, and remain
substantially underweight in South Africa. In addition, our underweights in the
pro-cyclical markets of South Korea and Taiwan have been reduced.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
INTERNATIONAL INVESTING MAY INVOLVE CERTAIN ADDITIONAL RISKS SUCH AS CURRENCY
FLUCTUATIONS, ECONOMIC AND POLITICAL INSTABILITY, AND DIFFERENCES IN ACCOUNTING
STANDARDS.
* PERFORMANCE FIGURES INCLUDE REINVESTMENT OF INCOME DIVIDEND AND CAPITAL GAIN
DISTRIBUTIONS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE.
INVESTORS' SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. CURRENTLY, THE ADVISER IS WAIVING ITS ADVISORY FEE AND
ABSORBING A PORTION OF THE FUND'S OTHER EXPENSES. HAD FEE NOT BEEN WAIVED OR
EXPENSES ABSORBED, PERFORMANCE WOULD HAVE BEEN LOWER. FEE WAIVER AND EXPENSE
ABSORPTION MAY BE REVISED AT ANY TIME. FOR ADDITIONAL INFORMATION ABOUT FEE
WAIVER AND EXPENSE ABSORPTION, PLEASE SEE THE PROSPECTUS.
** SOURCE: MORGAN STANLEY CAPITAL INTERNATIONAL. THE MSCI EMERGING MARKETS
INDEX IS AN UNMANAGED INDEX OF SELECTED SECURITIES. AN INVESTMENT CAN NOT BE
MADE IN AN INDEX.
*** MSCI COUNTRY-SPECIFIC SUB INDEX WITHIN THE EMERGING MARKETS INDEX
3
<PAGE>
EVERGREEN EMERGING MARKETS GROWTH FUND
(Photo of money STATEMENT OF INVESTMENTS
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCKS -- 92.7%
ARGENTINA -- 9.1%
14,010 Banco de Galicia y Buenos Aires
SA de CV, ADR..................... $ 329,235
24,500 Banco Frances del Rio de la
Plata SA, ADR..................... 704,375
42,675 Cementera Argentina................. 187,789
58,100* Comercial del Plata SA.............. 173,736
8,509 IRSA Inversiones y
Representaciones SA, GDR.......... 255,270
50,000 Perez Companc SA.................... 311,031
6,000 YPF Sociedad Anonima, ADR........... 131,250
2,092,686
BRAZIL -- 3.5%
15,000* Telecomunicacoes Brasileiras, ADR... 811,875
CHILE -- 4.0%
3,600 Embotelladora Andina SA, ADR........ 126,000
2,500 Madeco SA........................... 62,500
7,500* Santa Isabel SA, ADR................ 216,562
10,000 Sociedad Quimica y Minera de Chile
SA, ADR........................... 535,000
940,062
CHINA -- 1.4%
12,000 China Steel Corp., ADR.............. 225,251
190,000 Shanghai Post & Telecom............. 101,840
327,091
CZECH REPUBLIC -- 2.0%
3,400 Komercni Banka, AS.................. 265,654
1,500 SPT Telekom, AS..................... 183,631
449,285
HONG KONG -- 11.6%
28,000 Cheung Kong Holdings Ltd............ 199,987
568,000 China Hong Kong Photo
Products.......................... 280,861
300,000 First Pacific Co.................... 399,457
210,000 Giordano International Ltd.......... 194,105
300,000 Goldlion Holdings Ltd............... 252,085
86,000 Hongkong Land Holdings Ltd.......... 184,040
45,000 Hutchison Whampoa Ltd............... 279,232
250,000 National Mutual Asia................ 211,686
414,000 Pokphand (CP) Co.................... 175,276
22,000 Sun Hung Kai Properties............. 209,747
50,000 Varitronix International Ltd........ 91,785
120,000 VTech Holdings Ltd.................. 206,322
2,684,583
<CAPTION>
SHARES VALUE
<C> <S> <C>
HUNGARY -- 1.6%
4,200 EGIS Gyogyszergyar.................. $ 182,095
5,200 Richter Gedeon GDR.................. 181,418
363,513
INDIA -- 8.1%
3,400 Bajaj Auto Ltd., GDR................ 85,321
15,500 East India Hotels Ltd., GDR......... 453,375
28,000 Indian Hotels Co. Ltd., GDR......... 624,478
12,000 Larson & Toubro Ltd., GDR........... 225,000
11,000 Mahindra & Mahindra Ltd., GDR....... 91,010
9,500 Ranbaxy Laboratories Ltd., GDR...... 180,437
12,200 Tata Engineering & Locomotive Ltd.,
GDR............................... 219,600
1,879,221
INDONESIA -- 4.4%
44,000 Astra International................. 65,052
35,000 Bank Bali........................... 89,994
100,000 Bank International Indonesia........ 491,751
28,000 HM Sampoerna........................ 308,978
32,000 Kawasan Industries.................. 64,452
1,020,227
ISLE OF MAN -- .2%
25,000 Genting International PLC........... 45,000
KOREA -- 3.1%
9,800 Korea Mobile Telecommunications,
GDR............................... 558,600
3,877* Samsung Electronics Ltd, GDR........ 161,946
720,546
LUXEMBOURG -- 1.1%
3,800 Millicom International Cellular
SA................................ 179,550
5,500 Quilmes Industrial Quinsa SA, ADR... 66,000
245,550
MALAYSIA -- 5.1%
20,000 AMMB Holdings, Berhad............... 302,812
28,000 Malayan Bank, Berhad................ 272,891
70,000 New Straits Times Press, Berhad..... 376,208
52,000* Technology Resources Industries,
Berhad............................ 177,275
4,000 Telekom Malaysia, Berhad............ 37,701
1,166,887
MEXICO -- 8.8%
87,600* Cifra SA de CV, ADR................. 120,100
12,000 Empresas ICA Sociedad Controladora
SA de CV, ADR..................... 166,500
8,000* Grupo Carso SA de CV, ADR........... 122,345
</TABLE>
4
<PAGE>
EVERGREEN EMERGING MARKETS GROWTH FUND
(Photo of money STATEMENT OF INVESTMENTS -- (CONTINUED)
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCK -- CONTINUED
MEXICO -- CONTINUED
232,780 Grupo Finance Banamex Accival, SA de
CV, Series B...................... $ 536,365
1,751 Grupo Finance Banamex Accival, SA de
CV, Series L...................... 3,596
61,000 Grupo Finance Imbursa............... 209,354
36,800 Grupo Modelo SA de CV............... 173,104
443,000 Grupo Posadas SA de CV.............. 199,737
90,000 Grupo Synkro, ADR................... 15,921
4,500 Grupo Televisa SA, ADR.............. 139,500
18,000 Kimberly Clark Corp. de Mexico...... 329,475
2,015,997
NETHERLANDS -- .4%
5,800* Advanced Semiconductor Materials
International NV, GDR............. 84,322
PERU -- 4.0%
86,000 CPT Telefonica del Peru............. 192,280
17,650 Credicorp Ltd....................... 300,050
15,359 Minas Buenaventura.................. 103,674
4,800 PT Indosat, ADR..................... 167,400
4,500 PT Telekomunikasi Indonesia, ADR.... 153,563
916,967
PHILIPPINES -- 3.3%
4,000 Philippine National Bank............ 59,610
350,000 Philipino Telephone Corp............ 514,903
56,700 San Miguel Corp..................... 177,661
752,174
PORTUGAL -- .5%
4,800 Portugal Telecom SA, ADR............ 103,800
SINGAPORE -- 2.9%
11,000 Cerebos Pacific Ltd................. 99,374
4,000 City Developments Ltd............... 34,998
10,000 Fraser & Neave Ltd.................. 110,969
12,000 Keppel Corp Ltd..................... 108,408
70,000 Public Bank, Berhad................. 199,175
5,600 Singapore Precision Industries
Ltd............................... 105,961
658,885
SOUTH AFRICA -- .9%
3,000 Anglo American Corp., Ltd.,
ADR............................... 202,500
SPAIN -- 1.6%
14,000 Compania Energetica de Minas, ADR... 363,332
<CAPTION>
SHARES VALUE
<C> <S> <C>
TAIWAN -- 3.1%
29,218 President Enterprises Corp., GDR.... $ 429,081
22,000 Siliconware Precision Industries
Co., GDR.......................... 291,502
720,583
THAILAND -- 9.2%
9,000 Advanced Information Services
Plc............................... 152,588
18,200 Balanced Information Services
Plc............................... 308,566
30,000 Bangkok Bank Public Co., Ltd........ 434,946
82,000 IND Finance Thailand................ 328,547
15,000 Siam Commercial Bank Co., Ltd....... 221,038
60,000 Total Access Communication
Public Co., Ltd................... 528,000
9,800 UTD Communications.................. 136,648
2,110,333
UNITED KINGDOM -- .2%
3,600 HSBC Holdings Plc................... 53,752
UNITED STATES -- 2.6%
22,500 ECI Telecommunications Ltd.
Designs........................... 587,813
TOTAL COMMON STOCKS
(COST $18,862,073).................. 21,316,984
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C>
REPURCHASE AGREEMENT -- 6.4%
$1,472,000 State Street Bank & Trust Co., 4.75%
dated 4/30/96, due
5/1/96 -- Collateralized by
$1,160,000 U.S. Treasury Bonds,
10.75%, due 8/15/05; value,
including accrued interest --
$1,532,905
(COST $1,472,000)................. 1,472,000
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS
(COST $20,334,073)...... 99.1% 22,788,984
OTHER ASSETS AND
LIABILITIES -- NET...... .9 214,871
NET ASSETS................. 100.0% $23,003,855
</TABLE>
* Non-income producing securities
ADR -- American Depositary Receipts
GDR -- Global Depositary Receipts
See accompanying notes to financial statements.
5
<PAGE>
EVERGREEN EMERGING MARKETS GROWTH FUND
(Photo of money INDUSTRY DIVERSIFICATION
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS
<S> <C>
Automotive Equipment & Manufacturing............................................................................... 0.4%
Banks.............................................................................................................. 13.3%
Building, Construction & Furnishings............................................................................... 2.3%
Business Equipment & Services...................................................................................... 1.9%
Chemical & Agricultural Products................................................................................... 2.3%
Electrical Equipment & Services.................................................................................... 4.5%
Energy............................................................................................................. 1.9%
Finance & Insurance................................................................................................ 8.5%
Food & Beverage Products........................................................................................... 5.3%
Food Retailing & Distribution...................................................................................... 1.9%
Health Care Products & Services.................................................................................... 3.8%
Holding Companies.................................................................................................. 0.5%
Information Services & Technology.................................................................................. 2.0%
Machinery -- Diversified........................................................................................... 0.5%
Manufacturing -- Distributing...................................................................................... 0.3%
Metal Products & Services.......................................................................................... 1.0%
Mining............................................................................................................. 3.9%
Multi-Industry..................................................................................................... 3.5%
Leisure & Tourism.................................................................................................. 0.9%
Publishing, Broadcasting & Entertainment........................................................................... 2.7%
Real Estate........................................................................................................ 8.9%
Retailing & Wholesale.............................................................................................. 2.4%
Telecommunication Services & Equipment............................................................................. 19.9%
Textile & Apparel.................................................................................................. 0.1%
Total Long-Term Investments.................................................................................. 92.7%
Short-Term Investment.............................................................................................. 6.4%
Other Assets and Liabilities -- net................................................................................ .9%
Net Assets................................................................................................... 100.0%
</TABLE>
6
<PAGE>
EVERGREEN EMERGING MARKETS GROWTH FUND
(Photo of money STATEMENT OF ASSETS AND LIABILITIES
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (identified cost $20,334,073)............................................................. $22,788,984
Foreign currencies at value (identified cost $15,995).......................................................... 16,048
Cash........................................................................................................... 395,879
Receivable for investments sold................................................................................ 173,651
Dividends and interest receivable.............................................................................. 66,835
Unamortized organization expenses and other assets............................................................. 41,086
Receivable for Fund shares sold................................................................................ 6,728
Total assets............................................................................................. 23,489,211
LIABILITIES:
Payable for investments purchased.............................................................................. 394,892
Accrued expenses............................................................................................... 81,369
Payable for Fund shares repurchased............................................................................ 6,578
Distribution fee payable....................................................................................... 2,517
Total liabilities........................................................................................ 485,356
NET ASSETS........................................................................................................ $23,003,855
NET ASSETS CONSIST OF:
Paid-in capital................................................................................................ $22,374,221
Undistributed net investment income............................................................................ 30,574
Accumulated net realized loss on investment and foreign currency transactions.................................. (1,856,082)
Net unrealized appreciation of investments and foreign currencies.............................................. 2,455,142
Net assets.................................................................................................. $23,003,855
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($1,783,021(division sign)194,358 shares of beneficial interest outstanding).................... $ 9.17
Sales charge -- 4.75% of offering price........................................................................ .46
Maximum offering price................................................................................... $9.63
Class B Shares ($2,708,012(division sign)296,311 shares of beneficial interest outstanding).................... $9.14
Class C Shares ($65,080(division sign)7,128 shares of beneficial interest outstanding)......................... $9.13
Class Y Shares ($18,447,742(division sign)2,008,844 shares of beneficial interest outstanding)................. $9.18
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
EVERGREEN EMERGING MARKETS GROWTH FUND
(Photo of money STATEMENT OF OPERATIONS
appears here) SIX MONTHS ENDED APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $12,003)........................................... $ 113,622
Interest.......................................................................................... 42,459
Total investment income........................................................................ 156,081
EXPENSES:
Advisory fee...................................................................................... $ 124,566
Administration personnel and services fees........................................................ 4,318
Distribution fee -- Class A Shares................................................................ 1,686
Distribution fee -- Class B Shares................................................................ 8,131
Distribution fee -- Class C Shares................................................................ 188
Shareholder services fee -- Class B Shares........................................................ 2,710
Shareholder services fee -- Class C Shares........................................................ 63
Custodian fee..................................................................................... 64,053
Transfer agent fee................................................................................ 34,850
Registration and filing fees...................................................................... 28,455
Reports and notices to shareholders............................................................... 28,038
Professional fees................................................................................. 12,707
Deferred organizational expense................................................................... 8,140
Trustees' fees and expenses....................................................................... 4,983
Insurance......................................................................................... 664
Miscellaneous..................................................................................... 2,326
Total expenses............................................................................... 325,878
Less: Fee waivers and expense reimbursments....................................................... (188,787)
Net expenses................................................................................ 137,091
Net investment income................................................................................ 18,990
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized loss on investment transactions...................................................... (75,322)
Net realized loss on foreign currency transactions................................................ (5,614)
Net change in unrealized appreciation of investments and foreign currencies....................... 2,453,461
Net gain on investments and foreign currencies....................................................... 2,372,525
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................................. $2,391,515
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
(Photo of money EVERGREEN EMERGING MARKETS GROWTH FUND
appears here) STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED TEN MONTHS
APRIL 30, 1996 ENDED
(UNAUDITED) OCTOBER 31, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................................................... $ 18,990 $ 67,179
Net realized loss on investment transactions................................................ (75,322) (1,677,645)
Net realized gain (loss) on foreign currency transactions................................... (5,614) 33,753
Net change in unrealized appreciation of investments and foreign currencies................. 2,453,461 1,470,045
Net increase (decrease) in net assets resulting from operations.......................... 2,391,515 (106,668)
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares.............................................................................. (6,742) --
Class Y Shares.............................................................................. (81,928) --
Total distributions to shareholders from net investment income........................ (88,670) --
FUND SHARE TRANSACTIONS:
Proceeds from shares sold................................................................... 9,957,564 5,594,810
Proceeds from reinvestment of distributions................................................. 22,693 --
Payment for shares redeemed................................................................. (1,746,522) (1,444,320)
Net increase resulting from Fund share transactions...................................... 8,233,735 4,150,490
Net increase in net assets............................................................... 10,536,580 4,043,822
NET ASSETS:
Beginning of period......................................................................... 12,467,275 8,423,453
End of period (including undistributed net investment income of $30,574 and $100,254,
respectively)............................................................................. $ 23,003,855 $ 12,467,275
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
(Photo of money EVERGREEN EMERGING MARKETS GROWTH FUND
appears here) FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SIX MONTHS SEPTEMBER 6, SIX MONTHS
ENDED TEN MONTHS 1994* ENDED TEN MONTHS
APRIL 30, ENDED THROUGH APRIL 30, ENDED
1996 OCTOBER 31, DECEMBER 31, 1996 OCTOBER 31,
(UNAUDITED)++ 1995# 1994 (UNAUDITED)++ 1995#
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period....................... $7.90 $8.17 $10.00 $7.85 $8.16
Income (loss) from investment operations:
Net investment income (loss)............................. -- .05 -- (.03) .01
Net realized and unrealized gain (loss) on investments
and foreign currency transactions...................... 1.32 (.32) (1.83) 1.32 (.32)
Total from investment operations....................... 1.32 (.27) (1.83) 1.29 (.31)
Less distributions to shareholders from net investment
income................................................... (.05) -- -- -- --
Net asset value, end of period............................. $9.17 $7.90 $8.17 $9.14 $7.85
TOTAL RETURN+.............................................. 16.8% (3.3%) (18.3%) 16.4% (3.8%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).................. $1,783 $1,117 $867 $2,708 $1,940
Ratios to average net assets:
Expenses++**............................................. 1.75% 1.73% 1.78% 2.50% 2.48%
Net investment income (loss)++**......................... .11% .76% (.12%) (.68%) .03%
Portfolio turnover rate.................................... 48% 65% 17% 48% 65%
Average commission rate paid............................... $.0147 N/A N/A $.0147 N/A
<CAPTION>
SEPTEMBER 6,
1994*
THROUGH
DECEMBER 31,
1994
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period....................... $10.00
Income (loss) from investment operations:
Net investment income (loss)............................. (.02)
Net realized and unrealized gain (loss) on investments
and foreign currency transactions...................... (1.82)
Total from investment operations....................... (1.84)
Less distributions to shareholders from net investment
income................................................... --
Net asset value, end of period............................. $8.16
TOTAL RETURN+.............................................. (18.4%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).................. $1,589
Ratios to average net assets:
Expenses++**............................................. 2.53%
Net investment income (loss)++**......................... (.84%)
Portfolio turnover rate.................................... 17%
Average commission rate paid............................... N/A
</TABLE>
++ Per share data is calculated based on average shares outstanding during the
period.
* Commencement of operations.
# The Fund changed its year end from December 31 to October 31.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sales charge or contingent deferred
sales charge is not reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were assumed or waived by the investment adviser, the annualized ratios
of expenses and net investment loss to average net assets, exclusive of any
applicable state expense limitations, would have been the following:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SIX MONTHS SEPTEMBER 6, SIX MONTHS
ENDED TEN MONTHS 1994* ENDED TEN MONTHS
APRIL 30, ENDED THROUGH APRIL 30, ENDED
1996 OCTOBER 31, DECEMBER 31, 1996 OCTOBER 31,
(UNAUDITED) 1995# 1994 (UNAUDITED) 1995#
<S> <C> <C> <C> <C> <C>
Expenses.................................................... 4.02% 3.97% 3.96% 4.77% 4.72%
Net investment loss......................................... (2.16%) (1.48%) (2.30%) (2.95%) (2.21%)
<CAPTION>
SEPTEMBER 6,
1994*
THROUGH
DECEMBER 31,
1994
<S> <C>
Expenses.................................................... 4.71%
Net investment loss......................................... (3.02%)
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
(Photo of money EVERGREEN EMERGING MARKETS GROWTH FUND
appears here) FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS C SHARES CLASS Y SHARES
SIX MONTHS SEPTEMBER 6, SIX MONTHS
ENDED TEN MONTHS 1994* ENDED TEN MONTHS
APRIL 30, ENDED THROUGH APRIL 30, ENDED
1996 OCTOBER 31, DECEMBER 31, 1996 OCTOBER 31,
(UNAUDITED)++ 1995# 1994 (UNAUDITED)++ 1995#
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period....................... $7.84 $8.16 $10.00 $7.92 $8.17
Income (loss) from investment operations:
Net investment income (loss)............................. (.03) .02 (.02) .02 .05
Net realized and unrealized gain (loss) on investments
and foreign currency transactions...................... 1.32 (.34) (1.82) 1.31 (.30)
Total from investment operations....................... 1.29 (.32) (1.84) 1.33 (.25)
Less distributions to shareholders from net investment
income................................................... -- -- -- (.07) --
Net asset value, end of period............................. $9.13 $7.84 $8.16 $9.18 $7.92
TOTAL RETURN+.............................................. 16.4% (3.9%) (18.4%) 16.9% (3.1%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).................. $65 $56 $89 $18,448 $9,355
Ratios to average net assets:
Expenses++**............................................. 2.50% 2.50% 2.53% 1.50% 1.48%
Net investment income (loss)++**......................... (.68%) .72% (.82%) .39% .94%
Portfolio turnover rate.................................... 48% 65% 17% 48% 65%
Average commission rate paid............................... $.0147 N/A N/A $.0147 N/A
<CAPTION>
SEPTEMBER 6,
1994*
THROUGH
DECEMBER 31,
1994
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period....................... $10.00
Income (loss) from investment operations:
Net investment income (loss)............................. .01
Net realized and unrealized gain (loss) on investments
and foreign currency transactions...................... (1.84)
Total from investment operations....................... (1.83)
Less distributions to shareholders from net investment
income................................................... --
Net asset value, end of period............................. $8.17
TOTAL RETURN+.............................................. (18.3%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).................. $5,878
Ratios to average net assets:
Expenses++**............................................. 1.53%
Net investment income (loss)++**......................... .43%
Portfolio turnover rate.................................... 17%
Average commission rate paid............................... N/A
</TABLE>
++ Per share data is calculated based on average shares outstanding during the
period.
* Commencement of operations.
# The Fund changed its year end from December 31 to October 31.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Contingent deferred sales charge is not
reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were assumed or waived by the investment adviser, the annualized ratios
of expenses and net investment loss to average net assets, exclusive of any
applicable state expense limitations, would have been the following:
<TABLE>
<CAPTION>
CLASS C SHARES CLASS Y SHARES
SIX MONTHS SEPTEMBER 6, SIX MONTHS
ENDED TEN MONTHS 1994* ENDED TEN MONTHS
APRIL 30, ENDED THROUGH APRIL 30, ENDED
1996 OCTOBER 31, DECEMBER 31, 1996 OCTOBER 31,
(UNAUDITED) 1995# 1994 (UNAUDITED) 1995#
<S> <C> <C> <C> <C> <C>
Expenses.................................................... 4.77% 4.74% 4.71% 3.77% 3.72%
Net investment loss......................................... (2.95%) (1.52%) (3.00%) (1.88%) (1.30%)
<CAPTION>
SEPTEMBER 6,
1994*
THROUGH
DECEMBER 31,
1994
<S> <C>
Expenses.................................................... 3.71%
Net investment loss......................................... (1.75%)
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
EVERGREEN GLOBAL LEADERS FUND
(Logo of Global Leaders
Fund appears here)
A REPORT FROM YOUR
PORTFOLIO MANAGERS
STEPHEN A. LIEBER
EDWIN D. MISKA
Evergreen Global Leaders Fund commenced operations on (Photo of
November 1, 1995. For the six months ended April 30, 1996, the Stephen A.
first half of its fiscal year, the Fund (Class Y, no-load Lieber
shares) provided an 11.7%* total return. While this has been a appears here)
period for building a fledgling fund, it has also been a time
for carrying out a very carefully formulated and tested plan (Photo of
to develop an investment vehicle that would seek to meet our Edwin D.
goal of holding what we believe to be the 100 best companies Miska
in the world. The definition of "the 100 best" is a appears here)
comparative one based on the Adviser's proprietary selection
of financial performance and investment characteristic
criteria. Within major
industrialized nations, we seek out companies that are among
the most highly profitable, have the highest returns on
shareholders equity, are most consistent in earnings, and that
combine a strong past record of earnings growth with an
outlook for continued success. The Fund's management actively
compares financial performance among companies in its selected
universe and omits those which fail to consistently meet its
criteria, while bringing in others which do. We continually
seek out investment opportunities that meet our standards and
we monitor macroeconomic and financial conditions to correct
the optimized country and currency exposures. Our aim is to
utilize this diligent, structured approach to achieve
maximized shareholder returns.
During the period under review, several issues registered outstanding
investment results. Across the globe, the Fund benefited from strong earnings
performance, and an equally strong outlook. From Canada, the Fund's most
significant overall performer was DuPont Canada, Inc. (Cl. A shares) which rose
30.9%. This company, which represents 2.8% of the Fund's net assets, had the
largest overall dollar gain in the portfolio. The company saw strong profit
growth from its diverse product offerings of specialty chemicals, plastics, and
films, and forecasts another equally strong year for 1996. From Belgium, grocery
store operator Colruyt SA was up 25.5%, after posting superb earnings growth and
enacting an expansion program which will elevate its presence throughout Europe.
From Hong Kong, real estate developer New Asia Realty Ltd. surged 77.1%, as the
company benefited from a restructuring and higher property prices.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
INTERNATIONAL INVESTING MAY INVOLVE CERTAIN ADDITIONAL RISKS SUCH AS CURRENCY
FLUCTUATIONS, ECONOMIC AND POLITICAL INSTABILITY, AND DIFFERENCES IN ACCOUNTING
STANDARDS.
* PERFORMANCE FIGURES INCLUDE REINVESTMENT OF INCOME DIVIDEND AND CAPITAL GAIN
DISTRIBUTIONS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE.
INVESTORS' SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. AS OF 4/30/96, THE FUND'S CLASS A SHARES (SUBJECT TO A MAXIMUM
4.75% FRONT END SALES CHARGE), CLASS B SHARES (SUBJECT TO A MAXIMUM 5%
CONTINGENT DEFERRED SALES CHARGE) AND CLASS C SHARES (SUBJECT TO A 1%
CONTINGENT DEFERRED SALES CHARGE WITHIN THE FIRST YEAR OF PURCHASE) HAD NOT
YET COMMENCED OPERATIONS. CURRENTLY, THE ADVISER IS WAIVING ITS ADVISORY FEE
AND ABSORBING A PORTION OF THE FUND'S OTHER EXPENSES. HAD FEE NOT BEEN WAIVED
OR EXPENSES ABSORBED, PERFORMANCE WOULD HAVE BEEN LOWER. FEE WAIVER AND
EXPENSE ABSORPTION MAY BE REVISED AT ANY TIME. FOR ADDITIONAL INFORMATION
ABOUT FEE WAIVER AND EXPENSE ABSORPTION, PLEASE SEE THE PROSPECTUS.
12
<PAGE>
EVERGREEN GLOBAL LEADERS FUND
(Logo of Global Leaders
Fund appears here)
A REPORT FROM YOUR
PORTFOLIO MANAGERS -- (CONTINUED)
In terms of country performance, Malaysia led the way with a return of 17.1%.
Strong sustainable profits growth among our diverse holdings and a surging
economy bolstered stock prices. Despite our small 1.9% allocation, there were
some notable standouts: Malaysian Oxygen Berhad, +48.5%, Land & General, which
was sold for a gain of 30.5%, a partial sale of Magnum Corp. Berhad, +25.9%, and
AMMB Holdings Berhad, +23.3%.
Of our most heavily-weighted country exposures, the United States at 33.6% of
net assets, registered the most impressive return as a whole, +12.5%. Some of
the best performing issues were: Gap, Inc., +32.6%, US Healthcare, Inc., which
received a takeover offer from Aetna Life & Casualty Co., +30.3%, Student Loan
Marketing Corp., +23.7%, Computer Associates International, Inc., +20.1%, and
Microsoft Corp., +14.8%. All of the above-mentioned companies were prime
examples of our investment strategy at work. Prices rose in response to the
continued recognition of these companies achievements in growth, profitability,
and enhancing shareholder value. These characteristics clearly distinguish them
as "Global Leaders".
Our most disappointing areas were in Japan and Germany, the portfolio's next
two largest allocations, at 11.0% and 8.4%, respectively. In both cases, some
solid performances were negated by the poor results of one holding. In Germany,
pharmaceutical and chemical firm ALTANA AG, and utility giant RWE AG rose 6.7%
and 6.5%, respectively, but the software development firm SAP AG fell 17.8%, as
the market was disappointed with its 40%+ growth for fiscal 1995. The company
has reiterated a positive outlook for 1996, and the stock has recovered somewhat
from its lows.
With Japan, solid results by chemical manufacturer Nippon Chemical, +17.2%,
and retailer Seven-Eleven Japan Co., Ltd., +11.3%, were offset by the poor
performance of Nintendo Co., Ltd., which is still in transition toward its new
game platform scheduled for launch later this year. Currency also played a
significant factor in the returns of the portfolio holdings of these nations as
the U.S. dollar appreciated some 3% versus the German Deutsche mark, and 7%
versus the Japanese Yen, negating a significant portion of our investment
returns.
The global markets continued their upward momentum during the first calendar
quarter. Despite increased volatility, as evidenced by the swift declines in the
world's equity markets in early March, all indicators continue to point toward
continued, yet perhaps sluggish growth. In Europe, interest rates are falling,
increasing the demand for credit, and fueling a renewed consumer confidence, as
evidenced by recent strong automobile sales. In France, the economic turbulence
caused by the massive strikes of last November seems to have abated, and the
economy is stabilizing under lower rates. In Italy and Spain, where political
uncertainty has masked what are otherwise healthy economies, lower inflation and
falling public deficits have led to a generally favorable economic outlook. With
the exception of Germany, where the economic climate is weakening, despite
increased efforts to focus on international competitiveness and shareholder
value, most European economies are stabilizing or even rebounding. In
anticipation and recognition of such, the European markets performed strongly in
the quarter. In the Far East, resurgence in Japan's corporate profit, aided by
the Bank of Japan's aggressive monetary policies and continued growth in Hong
Kong, Singapore, and Malaysia, drove equity prices higher. Only the tensions of
China's expansionary threats toward Taiwan impeded an otherwise strong quarter.
13
<PAGE>
EVERGREEN GLOBAL LEADERS FUND
(Logo of Global Leaders
Fund appears here)
A REPORT FROM YOUR
PORTFOLIO MANAGERS -- (CONTINUED)
As the year unfolds and the world's major central banks increase their
reflationary monetary policies and, in many cases, lower interest rates, it will
become increasingly likely that corporations will deliver strong bottom-line
performance. This should serve as the impetus for equity prices. We believe the
Fund's strategy will make it well positioned to benefit in the coming months.
Consistent with the objective of investing in the 100 leading companies of the
world, the Fund has sought out companies which are among the most likely
beneficiaries of this economic scenario: companies which are highly profitable,
with consistent earnings, and combine a prosperous current outlook with a past
record of achievement.
In the few months since its inception, the Fund is already demonstrating a
number of the favorable historical characteristics of the Evergreen group of
funds. One has been a long-term pattern of the acquisition or merger by other
companies of Fund holdings with attractive business franchises, usually at
substantial profits to the Fund. One such acquisition has been proposed in this
portfolio, US Healthcare, Inc., one of the initial purchases of the Fund,
received an acquisition offer from Aetna Life & Casualty Co. Since its purchase,
U.S. Healthcare has provided an unrealized gain to the Fund of 30.3% as of April
30, 1996. Another typical group is companies which have had outstanding
long-term records, have had some current difficulty in sustaining those records,
and are initiating re-structuring or re-engineering programs to increase
shareholder values. In the portfolio, companies with these characteristics were:
Legal & General Group PLC and Prudential Corp. PLC in the United Kingdom, and
Torchmark Corp. in the United States.
We will be diligent in our effort to not only maintain, but also accelerate
the historical asset value growth curve that the Fund established. The
resources, modeling, and testing we put in place prior to the Fund's inception
produced the results we seek, and we believe will help provide further growth of
the Fund. We thank the original investors for their confidence in our program,
and for their sharing our enthusiasm for what we believe is a truly exciting
investment concept.
14
<PAGE>
EVERGREEN GLOBAL LEADERS FUND
(Logo of Global Leaders STATEMENT OF INVESTMENTS
Fund appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCKS -- 97.9%
<C> <S> <C>
AUSTRALIA -- 1.9%
10,000 Arnotts Ltd............................ $ 66,614
14,700 Incitec Ltd............................ 75,059
141,673
BELGIUM -- .9%
200 Colruyt SA............................. 62,325
CANADA -- 2.8%
9,500 DuPont Canada, Inc..................... 209,328
FRANCE -- 7.7%
1,000 LAPEYRE SA............................. 55,133
600 Promodes, Inc.......................... 172,424
200 Sagem Co. SA........................... 124,819
800 SEB SA................................. 134,688
800 Television Francaise................... 86,696
573,760
GERMANY -- 8.4%
100 ALTANA AG.............................. 61,663
50 Hugo Boss AG........................... 49,971
50 Rheinelektra AG........................ 35,927
6,000 RWE AG................................. 233,588
1,500 SAP AG................................. 194,493
100 Sudzucker AG........................... 47,227
622,869
HONG KONG -- 3.9%
10,000 Cheung Kong Holdings Ltd............... 71,424
7,500 China Light & Power Co., Ltd........... 35,389
2,400 * Henderson China Holdings Ltd........... 6,655
8,000 Henderson Land Development Co Ltd...... 57,398
5,500 Hong Kong Telecommunication Sponsored
ADR.................................... 104,500
7,000 Kumagai Gumi Ltd....................... 6,470
2,000 New Asia Realty Ltd.................... 6,696
288,532
ITALY -- 6.5%
4,500 Benneton Group SpA ADS................. 108,562
1,300 Fila Holding SpA ADS................... 88,725
2,800 Industrie Natuzzi SpA ADS.............. 145,600
1,800 Luxottica Group SpA ADS................ 144,900
487,787
<CAPTION>
SHARES VALUE
<C> <S> <C>
JAPAN -- 11.0%
15,000 Mitsui Soko Co......................... $ 128,770
2,400 Nintendo Co., Ltd...................... 185,383
13,000 Nippon Chemical........................ 126,762
5,400 Seven-Eleven Japan Co., Ltd............ 382,525
823,440
MALAYSIA -- 1.9%
2,000 AMMB Holdings Berhad................... 30,281
3,000 Carlsberg Brewery Berhad............... 20,816
1,500 Magnum Corp. Berhad.................... 2,599
3,000 Malaysian Oxygen Berhad................ 16,003
2,000 Nestle Berhad.......................... 17,005
4,000 Resorts World Berhad................... 24,225
5,000 United Engineers Ltd. Berhad........... 34,292
145,221
NETHERLANDS -- 3.6%
4,000 Elsevier NV............................ 60,228
1,200 Elsevier NV ADS........................ 36,450
200 Getronics NV........................... 13,890
1,200 PolyGram NV ADS........................ 70,350
800 Wolters Kluwer NV...................... 87,447
268,365
NEW ZEALAND -- .6%
700 Telecom Corp. of New Zealand
Ltd. ADS............................... 47,250
NORWAY -- 1.1%
2,000 Kvaerner AS............................ 82,197
SINGAPORE -- .8%
3,000 Singapore Press Holdings Ltd........... 56,765
SPAIN -- 4.5%
2,000 Centros Comerciales Pryca, SA.......... 46,148
2,900 Empresa Nacional de Electridad ADS..... 181,612
3,000 Repsol, SA ADS......................... 111,000
338,760
SWEDEN -- 2.0%
2,600 Astra AB............................... 115,592
500 H&M Hennes & Mauritz AB................ 34,505
150,097
</TABLE>
15
<PAGE>
EVERGREEN GLOBAL LEADERS FUND
(Logo of Global STATEMENT OF INVESTMENTS -- (CONTINUED)
Leaders Fund APRIL 30, 1996
appears here) (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
COMMON STOCKS -- CONTINUED
<C> <S> <C>
UNITED KINGDOM -- 6.7%
5,000 Abbey National Plc..................... $ 42,752
600 Argos Plc.............................. 5,857
4,000 BAT Industries Plc ADS................. 61,750
9,400 BTR Plc................................ 45,281
800 Carlton Communications Plc ADS......... 28,300
500 Chubb Security Plc..................... 2,864
600 De la Rue Plc.......................... 6,706
900 Granada Group Plc...................... 11,157
600 Legal & General Group Plc.............. 6,467
300 Premier Farnell Plc.................... 3,324
142 * Premier Farnell Rights Plc............. 1,573
6,000 Prudential Corp. Plc................... 41,322
4,600 Rentokil Group Plc..................... 26,521
1,100 Reuters Holdings Plc ADS............... 74,388
1,600 Smithkline Beecham Plc ADS............. 86,400
700 United News & Media Plc................ 7,308
1,000 Vodafone Group Plc ADS................. 40,125
800 Wolseley Plc........................... 5,642
497,737
UNITED STATES -- 33.6%
4,400 AT&T Corp.............................. 269,500
1,000 Albertsons, Inc........................ 38,500
1,000 * Amgen, Inc............................. 57,500
250 Avon Products, Inc..................... 22,219
200 Briggs & Stratton Corp................. 9,075
1,500 * CUC International, Inc................. 49,312
2,500 Coca Cola Co. (The).................... 203,750
700 Computer Associates International,
Inc.................................... 51,362
1,000 Emerson Electric Co.................... 83,625
300 * FMC Corp............................... 20,812
2,600 Federal National Mortgage Association.. 79,625
1,000 Gap, Inc............................... 30,125
2,300 General Electric Co.................... 178,250
1,000 Gillette Co. (The)..................... 54,000
800 Goodyear Tire and Rubber Co. (The)..... 41,700
1,200 Home Depot, Inc. (The)................. 56,850
<CAPTION>
SHARES VALUE
<C> <S> <C>
UNITED STATES -- CONTINUED
2,100 Intel Corp............................. $ 142,275
600 Marsh & McLennan Co., Inc.............. 56,400
625 Mattel, Inc............................ 16,250
1,900 McDonalds Corp......................... 90,962
2,000 Merck & Co., Inc....................... 121,000
700 Merrill Lynch & Co., Inc............... 42,262
1,500 * Microsoft Corp......................... 169,875
500 Monsanto Co............................ 75,750
300 Nalco Chemical Co...................... 9,150
1,100 Norwest Corp........................... 39,738
600 Phelps Dodge Corp...................... 44,100
200 Pioneer Hi-Bred International, Inc..... 11,150
1,000 Quaker Oats Co. (The).................. 34,375
1,200 Schering-Plough Corp................... 68,850
200 Student Loan Marketing Corp............ 14,650
200 Torchmark Corp......................... 8,600
300 US Healthcare, Inc..................... 15,638
1,000 UST, Inc............................... 32,000
7,500 Wal-Mart Stores, Inc................... 179,063
1,400 Walt Disney Co. (The).................. 86,800
2,505,093
TOTAL COMMON STOCKS
(COST $6,827,810)...................... 7,301,199
<CAPTION>
PRINCIPAL
AMOUNT
SHORT TERM INVESTMENT -- 8.0%
<C> <S> <C>
$600,000 Federal Home Loan Mortgage,
5.18%, 5/28/96
(COST $597,669)........................ 597,669
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS
(COST $7,425,479)........... 105.9% 7,898,868
OTHER ASSETS AND
LIABILITIES -- NET.......... (5.9) (439,898)
NET ASSETS..................... 100.0% $7,458,970
</TABLE>
* Non-income producing securities
ADR -- American Depositary Receipts
ADS -- American Depositary Shares
See accompanying notes to financial statements.
16
<PAGE>
EVERGREEN GLOBAL LEADERS FUND
(Logo of Global INDUSTRY DIVERSIFICATION
Leaders Fund APRIL 30, 1996
appears here) (UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS
<S> <C>
Building, Construction & Furnishings............................................................................... 5.4%
Chemicals.......................................................................................................... 8.0%
Consumer Products & Services....................................................................................... 11.9%
Electrical Equipment & Electronics................................................................................. 18.8%
Energy............................................................................................................. 4.6%
Finance & Insurance................................................................................................ 4.9%
Food Products...................................................................................................... 4.7%
Health Care Products & Services.................................................................................... 8.2%
Publishing, Broadcasting & Entertainment........................................................................... 8.5%
Real Estate........................................................................................................ 1.9%
Retailing & Wholesale.............................................................................................. 14.8%
Telecommunication Services & Equipment............................................................................. 6.2%
Total Long-Term Investments.................................................................................. 97.9%
Short-Term Investment.............................................................................................. 8.0%
Other Assets and Liabilities -- net................................................................................ (5.9%)
Net Assets................................................................................................... 100.0%
</TABLE>
17
<PAGE>
EVERGREEN GLOBAL LEADERS FUND
(Logo of Global STATEMENT OF ASSETS AND LIABILITIES
Leaders Fund APRIL 30, 1996
appears here) (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (identified cost $7,425,479)................................................................ $7,898,868
Foreign currencies at value (identified cost $28,078)............................................................ 27,904
Cash............................................................................................................. 70,478
Prepaid expenses and other assets................................................................................ 43,794
Receivable for investments sold.................................................................................. 40,602
Unamortized organization expense................................................................................. 40,175
Receivable from Adviser.......................................................................................... 18,935
Dividends receivable............................................................................................. 15,347
Receivable for Fund shares sold.................................................................................. 425
Total assets............................................................................................... 8,156,528
LIABILITIES:
Payable for investments purchased................................................................................ 628,560
Accrued expenses................................................................................................. 68,998
Total liabilities.......................................................................................... 697,558
NET ASSETS.......................................................................................................... $7,458,970
NET ASSETS CONSIST OF:
Paid-in capital.................................................................................................. $6,891,929
Distributions in excess of net investment income................................................................. (3,638)
Net realized gain on investment and foreign currency transactions................................................ 98,285
Net unrealized appreciation of investments and foreign currencies................................................ 472,394
Net assets................................................................................................. $7,458,970
CALCULATION OF NET ASSET VALUE PER SHARE:
Class Y Shares ($7,458,970(division sign)669,972 shares of beneficial interest outstanding)...................... $11.13
</TABLE>
See accompanying notes to financial statements.
18
<PAGE>
EVERGREEN GLOBAL LEADERS FUND
(Logo of Global STATEMENT OF OPERATIONS
Leaders Fund SIX MONTHS ENDED APRIL 30, 1996
appears here) (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $4,033)................................................ $ 42,216
Interest.............................................................................................. 11,318
Total investment income............................................................................ 53,534
EXPENSES:
Advisory fee.......................................................................................... $ 25,368
Administration personnel and services fees............................................................ 1,350
Custodian fee......................................................................................... 24,607
Registration and filing fees.......................................................................... 15,137
Professional fees..................................................................................... 8,667
Reports and notices to shareholders................................................................... 6,603
Transfer agent fee.................................................................................... 6,231
Deferred organizational expense....................................................................... 4,340
Insurance expense..................................................................................... 1,287
Trustees' fees and expenses........................................................................... 712
Miscellaneous......................................................................................... 803
Total expenses..................................................................................... 95,105
Less: Fee waivers and expense reimbursements.......................................................... (57,523)
Net expenses....................................................................................... 37,582
Net investment income.................................................................................... 15,952
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN
CURRENCIES:
Net realized gain on investment transactions.......................................................... 94,369
Net realized gain on foreign currency transactions.................................................... 3,916
Net change in unrealized appreciation of investments and foreign currencies........................... 472,394
Net gain on investments and foreign currencies........................................................... 570,679
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................................................... $586,631
</TABLE>
See accompanying notes to financial statements.
19
<PAGE>
(Logo of Global EVERGREEN GLOBAL LEADERS FUND
Leaders Fund STATEMENT OF CHANGES IN NET ASSETS
appears here) (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS*
ENDED
APRIL 30, 1996
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income........................................................................................... $ 15,952
Net realized gain on investment transactions.................................................................... 94,369
Net realized gain on foreign currency transactions.............................................................. 3,916
Net change in unrealized appreciation of investments and foreign currencies..................................... 472,394
Net increase in net assets resulting from operations......................................................... 586,631
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income...................................................................................... (15,952)
In excess of net investment income.............................................................................. (3,638)
Total distributions to shareholders.......................................................................... (19,590)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold....................................................................................... 7,260,977
Proceeds from reinvestment of distributions..................................................................... 14,211
Payment for shares redeemed..................................................................................... (383,259)
Net increase from Fund share transactions.................................................................... 6,891,929
Net increase in net assets................................................................................... 7,458,970
NET ASSETS:
Beginning of period............................................................................................. --
End of period (including distributions in excess of net investment income of $3,638)............................ $7,458,970
</TABLE>
* The Fund commenced investment operations on November 1, 1995.
See accompanying notes to financial statements.
20
<PAGE>
(Logo of Global EVERGREEN GLOBAL LEADERS FUND
Leaders Fund FINANCIAL HIGHLIGHTS
appears here) (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS*
ENDED
APRIL 30, 1996
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period................................................................................ $10.00
Income from investment operations:
Net investment income............................................................................................ .04
Net realized and unrealized gain on investment and foreign currency transactions................................. 1.13
Total from investment operations................................................................................. 1.17
Less distributions to shareholders from net investment income....................................................... (.04)
Net asset value, end of period...................................................................................... $11.13
TOTAL RETURN**...................................................................................................... 11.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)........................................................................... $7,459
Ratios to average net assets:+#
Expenses......................................................................................................... 1.44%
Net investment income............................................................................................ .61%
Portfolio turnover rate............................................................................................. 28%
Average commission rate paid........................................................................................ $.0745
</TABLE>
* The Fund commenced investment operations on November 1, 1995.
** Total return is calculated on net asset value per share for the period
indicated and is not annualized.
+ Annualized.
# Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were assumed or waived by the investment adviser, the annualized ratios
of expenses and net investment income to average net assets, exclusive of any
applicable state expense limitations, would have been the following:
<TABLE>
<CAPTION>
SIX MONTHS*
ENDED
APRIL 30, 1996
<S> <C>
Expenses........................................................................................................... 3.65%
Net investment loss................................................................................................ (1.60%)
</TABLE>
See accompanying notes to financial statements.
21
<PAGE>
EVERGREEN GLOBAL REAL ESTATE EQUITY FUND
(Photo of Globe appears here)
A REPORT FROM YOUR
PORTFOLIO MANAGER
SAMUEL A. LIEBER
Evergreen Global Real Estate Equity Fund's total return (Photo of
(Class Y, no-load shares) for the six months ended April 30, Samuel A.
1996, the first half of its 1996 fiscal year, was 13.2%*. This Lieber
compares with the 10.4% total return for the 43 real estate appears here)
mutual funds tracked by Lipper Analytical Services** during
that time. The six-month total returns at NAV for the Fund's
Class A shares, Class B shares and Class C shares were 13.1%,
12.8%, and 12.8%, respectively. Class A shares are subject to
a maximum 4.75% front end sales charge, Class B shares are
subject to a maximum 5% contingent deferred sales charge, and
Class C shares are subject to a 1% contingent deferred sales
charge within
the first year of purchase. Sales charges are not reflected in
figures above, and if reflected, performance would be lower.
We anticipate that this is the beginning of a sustainable recovery after the
negative performance of most international property share indexes in 1994 and
much of 1995. International property shares significant returns in 1993 enabled
this Fund to produce exceptional returns that year before the ensuing price
correction during 1994 to 1995. This subsequent correction has set a realistic
base from which we are hopeful that renewed economic growth will provide an
environment in which real estate securities can again generate strong returns
over an extended period.
REAL ESTATE STOCK MARKETS REVIEW
During the six months under review, the performance of unmanaged property
share indexes in their local currencies was led by the Philippines, where the
Philippines Property Index+ rose by 33%. Close behind were Malaysia where the
Kuala Lumpur Property Index+ rose 31% and Singapore, where the Singapore SESALL-
Singapore Property Index+ rose 28%. In Japan, the TOPIX Real Estate Index+ rose
30%, although the Japanese gain was mitigated by a 3% decline in the value of
the Yen versus the dollar. Most other markets provided no more than single-digit
returns, and in fact a number of markets were decidedly negative. For this
six-month period, South African Property Trusts+ fell over 13%. The Toronto
Stock Exchange Real Estate Index+, was down 8%, the Thai Property Developers
Index+ fell 9%, and in Australia, the ASX Property Trusts Index+ fell 6%. While
German real estate stocks lost only 1%, as measured by the CDAX Construction
Index+, the U.S. dollar's 9% rise versus the Deutsche mark compounded that
decline and negatively impacted the returns of most European stock investments
when viewed in U.S. dollar terms. The Wilshire Real Estate Securities Index+, a
measure of U.S. real estate stocks in general, rose 6%.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
INTERNATIONAL INVESTING MAY INVOLVE CERTAIN ADDITIONAL RISKS SUCH AS CURRENCY
FLUCTUATIONS, ECONOMIC AND POLITICAL INSTABILITY, AND DIFFERENCES IN ACCOUNTING
STANDARDS. INVESTMENT CONCENTRATION IN REAL ESTATE SECURITIES INCREASES RISKS
THAT WOULD NOT BE AS GREAT IN MORE DIVERSE INVESTMENTS.
* PERFORMANCE FIGURES INCLUDE REINVESTMENT OF INCOME DIVIDEND AND CAPITAL GAIN
DISTRIBUTIONS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE. INVESTORS'
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
EFFECTIVE MARCH 1, 1996, THE ADVISER COMMENCED WAIVING A PORTION OF ITS ADVISORY
FEE AND CEASED ABSORBING OTHER OF THE FUND'S EXPENSES. HAD FEE NOT BEEN WAIVED
OR EXPENSES ABSORBED, PERFORMANCE WOULD HAVE BEEN LOWER. FEE WAIVER AND EXPENSE
ABSORPTION MAY BE REVISED AT ANY TIME. FOR ADDITIONAL INFORMATION ON FEE WAIVER
AND EXPENSE ABSORPTION, PLEASE SEE THE PROSPECTUS.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC., AND INDEPENDENT MUTUAL FUNDS
PERFORMANCE MONITOR.
+ UNMANAGED INDEXES OF SELECTED SECURITIES. AN INVESTMENT CAN NOT BE MADE IN AN
INDEX.
22
<PAGE>
EVERGREEN GLOBAL REAL ESTATE EQUITY FUND
(Photo of Globe appears here)
SELECTED INVESTMENT PERFORMANCE
The best performance for the period under review was in Asia and the biggest
underperformance was in Europe, compounded by the decline in European
currencies. This held true for the Fund's holdings as well.
The top gainers during the six months under review include current holdings in
the Philippines, such as Filinvest Land which led with a 92% return, while
Megaworld Properties, the Fund's second largest holding rose 53%, and Robinson's
Land Corp. rose 44%. Even though many European holdings were rather dull or even
slightly negative, the Fund's investment in Immeubles de France rose 50% as the
market concluded that the company's financially troubled parent, Fonciere de
France, would be forced to sell its majority stake in IDF in order to equitize
the underlying value of its real estate. Latin America also provided strong
returns as the Fund's only Mexican investment, Grupo Posados, a hotel company,
continued to recover from Mexico's financial crisis, rising over 40% during this
period. Similarly, the Fund's investment in Argentina's IRSA rose over 43% as
economic prospects continued to improve south of the border. The strength in
Japanese real estate stocks were particularly notable during this period, with
the Fund's holdings in Diamond City Company leading the way with a 50% return.
The Fund's largest Japanese investment, Kansei Sekiwa, rose only 6% during this
buoyant period before catching up to the performance of its peer group during
the month following the close of this fiscal period.
Thailand has proved to be something of an enigma, with the Thai Property
Developers Index+ trading at levels 65% below its market peak in January 1994,
while most of its Southeast Asian peers have seen their property shares indexes
rise above their recent two-year lows (most bottomed during November 1995). Of
the Fund's five investments in Thailand, 40% is in three homebuilders,
Sammakorn, M.K. Real Estate, and Property Perfect, which declined by 13%, 30%,
and 36%, respectively, as a combination of rising interest rates and rising
flood waters in Bangkok impacted sales during early 1996. However, the majority
of the Fund's current holdings in Thailand are in industrial property
developers, Hemaraj Land and Saha Pathana Interholding, which rose 61% and 28%,
respectively, during this period.
In the U.S., the Fund enjoyed appreciation in a diverse group of stocks
ranging from Studio Plus Hotels, +42%, to shopping center Real Estate Investment
Trust (REIT) Alexander's, the Fund's second largest holding, +18%. Continental
Homes, the Fund's largest holding, appreciated 12%, in sharp contrast to the
Standard and Poor's Homebuilding Index+ which declined by 10% during this period
and mirrored some of the Fund's other holdings, notably M.I. Schottenstein
Homes, Washington Homes, and U.S. Home Corp., which fell by 17%, 14%, and 8%,
respectively. Rising interest rates in the U.S. led to a broad sell-off of
homebuilder stocks during February and a rebound has yet to materialize despite
continued evidence of growing strength in the single-family home market for both
new and existing houses. New order backlogs are at or near record levels for
most builders. Ironically, inflation fears have been fueled in part by this
strength in housing demand.
PROPERTY MARKET REVIEW AND PROSPECTS
The most fundamental factor which has been driving property market performance
is the rate of economic expansion. With the U.S. recovery starting in 1991,
followed by the U.K. and Australia in late 1992 and the initial end of economic
decline apparent in both Continental Europe and Japan during 1993, we would
normally expect to see a stronger performance in the real estate markets today,
since they typically lag the economic cycle's recovery by a few years.
23
<PAGE>
EVERGREEN GLOBAL REAL ESTATE EQUITY FUND
(Photo of Globe appears here)
OFFICE SECTOR
Even in the economies which recovered earlier and saw their property markets
benefit from improved absorption of existing space, leading to lower vacancy
rates, the pace of economic growth has not led to a high level of sustained
demand. Absorption of vacant office space in Australia, England, and the U.S.
appears to have peaked in 1994. This amount was typically less than half the
peak level of the mid 1980s. Thus, while office vacancies have fallen to 13.8%
nationwide in the U.S., this has led only to a moderate firming of realizable
rent levels. In fact, there have been some signs of price sensitivity in the
marketplace which indicates that a reversal of the trend of prior years may be
occurring in which tenants upgraded from Class B space to Class A space at
little extra cost. Even in Sidney, Australia, where the Class A vacancy rate is
around 6% and available new construction is still three years in the future,
there has been some difficulty in achieving rapidly rising rent levels. In
general, economic growth has yet not been strong enough to produce rapid rental
growth.
In Continental Europe, office vacancy rates range from a low of 5% in
Copenhagen, to over 20% in Milan, while the key markets of Paris and Frankfurt
appear to have stabilized at about 10% to 12% vacancy rates. Rent levels appear
to have bottomed for much of Europe, but the weak economic recovery over the
past two years, combined with double-digit unemployment rates, suggests that
tenants still have an opportunity to make good deals. Strong economic growth in
much of Asia, in contrast, has fueled considerable demand for real estate which
has led to significant levels of new space under development. Nonetheless, for
much of Asia, office vacancy rates typically average between 7% to 10%, with
major exceptions such as Beijing and Shanghai, where vacancies are in the
mid-teens. With the prospect of a significant pipeline of new construction, some
markets equilibrium will be tested, notably Jakarta with almost 9 million square
feet due for completion over the next two years and Shanghai with 8 million
square feet in the wings and possibly more in later years for this already
somewhat saturated market. By comparison, all of the U.S. had just over 12
million square feet of new space under construction. Notably, some of this U.S.
new space was not the "build-to-suit" space prearranged for tenants. Speculative
development has returned to some of the country's stronger major markets, such
as Atlanta and Washington, D.C.
RETAIL AND INSTITUTIONAL SECTORS
The strongest institutional demand appears to be in the retail sector, as many
investors are betting that improving economic growth rates will lead to
increased levels of domestic consumption. In a number of countries this
expansion is prudent, but in the heavily saturated retail markets of the U.S.,
it is creating a competitive environment for retailers which itself is
increasing the risk of ownership for some shopping center properties. This is
less of a problem abroad, as most countries have considerably less retail real
estate per capita, and shopping center development is more constrained.
Industrial real estate has in fact been among the strongest performing sectors
in many countries benefiting from both the gradual economic expansion and the
changing needs of manufacturers and distributors who typically utilize such
space.
RESIDENTIAL SECTOR
Residential construction has been very strong in the U.S., with near record
levels of existing home sales and high levels of new construction due to the
combination of high employment levels and historically high affordability. Solid
apartment demand reflects moderate levels of new construction compared with peak
levels of the last decade. Housing demand also appears to be nearing peak levels
in Japan as low interest rates and a
24
<PAGE>
EVERGREEN GLOBAL REAL ESTATE EQUITY FUND
(Photo of Globe appears here)
desire for more modern earthquake proof construction has fueled demand there. In
Europe, the slow economic rebound is taking its toll on home construction which
is significantly below historic norms despite falling interest rates. Demand in
much of Southeast Asia remains very strong for housing, particularly in
Singapore, Malaysia, and the Philippines. The Hong Kong housing market has
recovered from its lows of 1994/1995, while the housing markets of Thailand,
Indonesia, and South Korea remain rather sluggish.
STRATEGY AND OPPORTUNITY
Underlying the investment strategy and direction of the Fund is our reading of
demographic and economic patterns and trends. Our investments in the U.S. are
based upon our perception that the Federal Reserve has achieved a slow growth,
low inflation environment in which meaningful capital appreciation of real
estate will be difficult to achieve over the near to intermediate term. Thus,
our focus continues to be on companies and sectors whose cashflow stability or
growth is not currently appreciated by the stock market. The economy and real
estate market in Canada are fairly anemic, so we have been cautious there,
although continued share price depreciation may create some interesting values.
Latin America has begun to rebound following the Mexican financial crisis in
late 1994, but investment opportunities are limited at the current time. Most
European economies and real estate markets have stabilized and begun to grow,
however there are questions as to the pace of recovery. Nevertheless, we believe
that low interest rates will prevail throughout Europe, which will make real
estate equities increasingly attractive. While the Japanese economy has finally
begun to rebound after two years of nominal growth, the real estate market has
shown only modest signs of improvement, as vacancy rates are falling, but rents
are not rising. Japanese land prices have not fully stabilized, and will
probably require a U.S. type RTC to inject liquidity into the property market.
We are concerned that such an RTC may not have the necessary powers to affect a
rapid turnaround in the market, and thus, we may reduce our exposure to Japan
over the coming months unless a substantive approach is undertaken. The Fund has
only nominal exposure in Hong Kong due to our concern over U.S.-China trade
talks and the potential for negative fall-out. However, we are positive on the
prospects for Hong Kong long-term, as it reverts to Chinese ownership next year.
While the economic prospects in the Philippines are still very strong, we will
be reducing our exposure there somewhat since our Fund has such a high weighting
in this relatively small stock market. Despite our current caution on the
prospects for certain sectors in Indonesia and Thailand, we believe that there
may be increasingly interesting investment opportunities in selected real estate
companies over the balance of the year. Both Singapore and Malaysian governments
have created regulations designed to slow or cap residential property prices and
in turn, this has impacted such shares in the stock markets and may yet create
additional investment opportunities for the Fund.
The Fund's overall approach continues to focus on buying real estate company
shares at a discount to their underlying property value and finding growth
situations which can take advantage of strong demographic and/or economic
trends. We believe that this economic cycle is very different from the boom/bust
pattern of the 1970s and 1980s and thus, the prospect for achieving 30% to 50%
annual growth rates in real estate values is not as likely. However, we believe
that the increase securitization of real estate, which started in the U.S. in
1993, is clearly spreading to other countries and will continue to provide new
and interesting investment opportunities as the global economic rebound gathers
steam. We appreciate your continued interest and support, and look forward to
updating you on our performance after the Fund's fiscal year-end in October.
25
<PAGE>
EVERGREEN GLOBAL REAL ESTATE EQUITY FUND
(Photo of Globe STATEMENT OF INVESTMENTS
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
EQUITY SECURITIES -- 97.8%
<C> <S> <C>
ARGENTINA -- 3.5%
281,313 Inversiones y Representaciones......... $ 849,650
40,868 Inversiones y Representaciones, GDS.... 1,226,040
2,075,690
BELGIUM -- 1.4%
7,342 Bernheim-Comofi........................ 419,809
6,000 Immobiliere de Belgique................ 419,314
839,123
CANADA -- .5%
70,000 Monarch Development Corp............... 334,190
DENMARK -- 4.0%
25,000* Nordicom AS............................ 372,755
34,325 Thorkild Kristensen.................... 2,018,091
2,390,846
FRANCE -- 10.5%
11,000 Simco Registered Shares................ 1,051,572
576* Simco Registered New Ordinary Shares... 49,602
20,000 Societe des Immeubles.................. 1,373,198
51,078 Societe du Louvre...................... 1,868,165
3,346 Societe Financiere Interbail........... 163,755
18,450 Unibail................................ 1,803,048
6,309,340
GERMANY -- 2.1%
35,897 Kampa-Haus AG.......................... 1,242,760
HONG KONG -- 1.0%
1,082,600 CDL Hotels International Ltd........... 615,790
INDONESIA -- .7%
300,000 P.T. Jakarta International
Hotels and Development................. 398,543
JAPAN -- 14.1%
24,200 Chubu Sekiwa Real Estate, Ltd.......... 402,543
117,000 Daibiru Corp........................... 1,577,076
190,000 Diamond City Co., Ltd.................. 1,703,743
133,100 Kansai Sekiwa Real Estate Co., Ltd..... 2,341,227
20,000 Sawako Corp............................ 630,945
47,000 Tachihi Enterprise Co., Ltd............ 1,797,237
8,452,771
<CAPTION>
SHARES VALUE
<C> <S> <C>
MALAYSIA -- 1.3%
161,000 Asiatic Development Berhad............. $ 178,867
168,300 IOI Properties Berhad.................. 556,882
39,200* IOI Properties Berhad
Warrants expiring 5/18/98
@ MR $2.75............................. 80,183
815,932
MEXICO -- 2.2%
930,000 Grupo Posadas, SA de CV, Class A
Shares................................. 419,314
1,930,000 Grupo Posadas, SA de CV, Class L
Shares................................. 883,176
1,302,490
NETHERLANDS -- 2.7%
110,500 German City Estates NV................. 1,612,197
NORWAY -- 1.2%
45,000 Steen & Strom.......................... 712,372
PHILIPPINES -- 14.6%
4,500,000* Belle Corp............................. 662,017
500,000* DMCI Holdings, Inc..................... 334,352
2,500,000* Filinvest Land, Inc.................... 1,289,645
1,500,000 Guoco Holdings......................... 355,369
4,199,590* Megaworld Properties and Holdings...... 3,008,877
5,961,000 Robinson's Land Corp. Class B.......... 1,389,457
1,712,000 SM Fund Inc............................ 215,880
5,127,750 SM Prime Holdings, Inc................. 1,489,144
8,744,741
SINGAPORE -- 1.1%
651,200 Hotel Grand Central Ltd................ 680,939
SOUTH KOREA -- .1%
620 Chosun Brewery Co...................... 21,350
SPAIN -- 4.6%
80,000 Inmobilaria Urbis SA................... 324,528
439,993* Sotogrande SA.......................... 968,538
80,000 Vallehermoso SA........................ 1,446,541
2,739,607
THAILAND -- 4.9%
123,700 Hemaraj Land and Development Public
Co., Ltd............................... 862,414
154,800 MK Real Estate Development Public Co.,
Ltd.................................... 355,657
68,100 Property Perfect Co., Ltd.............. 338,551
400,000 Saha Pathana Inter-Holdings Co......... 950,702
209,400 Sammakorn Co., Ltd..................... 431,334
2,938,658
</TABLE>
26
<PAGE>
EVERGREEN GLOBAL REAL ESTATE EQUITY FUND
(Photo of Globe STATEMENT OF INVESTMENTS -- (CONTINUED)
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
UNITED KINGDOM -- 3.5%
81,000 Capital and Regional Properties Plc.... $ 226,795
46,285* Capital and Regional Properties Rights
Plc.................................... 4,180
701,921* Clubhaus Plc........................... 73,964
701,921 Ex-Lands Properties Plc................ 126,796
500,000 Greycoat Plc........................... 1,204,275
1,000,000 Hemingway Properties Plc............... 436,550
100,000* Tops Estates Plc Warrants expiring
8/21/00 @ L240......................... 10,537
2,083,097
UNITED STATES -- 23.8%
36,900* Alexander's, Inc....................... 2,725,988
18,400 Bradley Real Estate, Inc............... 271,400
48,000 Chelsea GCA Realty, Inc................ 1,368,000
152,700 Continental Homes Holding Corp......... 3,493,013
85,816 HGI Realty, Inc........................ 1,759,228
32,100 Kranzco Realty Trust................... 501,563
85,500* M/I Schottenstein Homes, Inc........... 844,313
258,100* Presley Companies...................... 419,413
74,200 Standard Pacific Corp.................. 473,025
12,000 Starwood Lodging Trust................. 397,500
15,000* Studio Plus Hotels, Inc................ 416,250
13,800* U.S. Home Corp......................... 343,275
54,000* U.S. Home Corp.
Warrants expiring 6/22/98 @ $20........ 418,500
180,200 Washington Homes, Inc.................. 833,424
14,264,892
TOTAL COMMON STOCKS
(COST $54,493,036)..................... 58,575,328
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SHORT TERM INVESTMENTS -- .8%
<C> <S> <C>
$300,000 Federal Home Loan Mortgage,
5.17%, 5/16/96......................... $ 299,354
200,000 Federal Home Loan Mortgage,
5.20%, 6/4/96.......................... 199,018
TOTAL SHORT TERM INVESTMENTS
(COST $498,372)........................ 498,372
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS
(COST $54,991,408) 98.6% 59,073,700
OTHER ASSETS AND
LIABILITIES -- NET.......... 1.4 793,087
NET ASSETS.................... 100.0% $59,866,787
</TABLE>
* Non-income producing securities
ADS -- American Depositary Shares.
GDS -- Global Depositary Shares.
# Represents common stock investments unless otherwise indicated. The percentage
of net assets in each type of security is as follows:
<TABLE>
<S> <C>
Common Stock............................ 89.6%
Real Estate Investment Trusts........... 7.3
Warrants................................ .9
Total Equity Securities................. 97.8%
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
EVERGREEN GLOBAL REAL ESTATE EQUITY FUND
(Photo of Globe STATEMENT OF ASSETS AND LIABILITIES
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (identified cost $54,991,408)............................................................. $59,073,700
Foreign currencies at value (identified cost $107,243)......................................................... 109,441
Cash........................................................................................................... 118,224
Receivable for investments sold................................................................................ 1,216,160
Dividends receivable........................................................................................... 192,503
Prepaid expenses and other assets.............................................................................. 80,604
Receivable for Fund shares sold................................................................................ 35,534
Total assets............................................................................................. 60,826,166
LIABILITIES:
Payable for investments purchased.............................................................................. 756,360
Accrued expenses............................................................................................... 124,565
Accrued advisory fee........................................................................................... 44,037
Payable for Fund shares repurchased............................................................................ 34,417
Total liabilities........................................................................................ 959,379
NET ASSETS........................................................................................................ $59,866,787
NET ASSETS CONSIST OF:
Paid-in capital................................................................................................ $63,753,115
Accumulated net investment loss................................................................................ (77,107)
Accumulated net realized loss on investment and foreign currency transactions.................................. (7,892,595)
Net unrealized appreciation of investments and foreign currencies.............................................. 4,083,374
Net assets............................................................................................... $59,866,787
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($1,875,067(division sign)143,189 shares of beneficial interest outstanding).................... $ 13.10
Sales charge -- 4.75% of offering price........................................................................ .65
Maximum offering price................................................................................... $ 13.75
Class B Shares ($91,481(division sign)7,039 shares of beneficial interest outstanding)......................... $ 13.00
Class C Shares ($8,880(division sign)683 shares of beneficial interest outstanding)............................ $ 13.00
Class Y Shares ($57,891,359(division sign)4,413,988 shares of beneficial interest outstanding)................. $ 13.12
</TABLE>
See accompanying notes to financial statements.
28
<PAGE>
EVERGREEN GLOBAL REAL ESTATE EQUITY FUND
(Photo of Globe STATEMENT OF OPERATIONS
appears here) SIX MONTHS ENDED APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $26,105)............................................ $ 408,021
Interest........................................................................................... 15,850
Total investment income...................................................................... 423,871
EXPENSES:
Advisory fee....................................................................................... $298,439
Distribution fee -- Class A Shares................................................................. 1,109
Distribution fee -- Class B Shares................................................................. 360
Distribution fee -- Class C Shares................................................................. 25
Shareholder services fee -- Class B Shares......................................................... 120
Shareholder services fee -- Class C Shares......................................................... 8
Custodian fee...................................................................................... 65,641
Transfer agent fee................................................................................. 49,041
Registration and filing fees....................................................................... 40,334
Professional fees.................................................................................. 35,057
Reports and notices to shareholders................................................................ 13,675
Insurance.......................................................................................... 13,247
Trustees' fees and expenses........................................................................ 6,064
Miscellaneous...................................................................................... 897
Total operating expenses........................................................................ 524,017
Interest........................................................................................... 8,709
Less: Fee waivers and expense reimbursments........................................................ (45,582)
Net expenses................................................................................. 487,144
Net investment loss................................................................................... (63,273)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized loss on investment transactions....................................................... (380,241)
Net realized loss on foreign currency transactions................................................. (25,546)
Net change in unrealized appreciation (depreciation) of investments and foreign currencies......... 7,853,423
Net gain on investments and foreign currencies........................................................ 7,447,636
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................................. $7,384,363
</TABLE>
See accompanying notes to financial statements.
29
<PAGE>
(Photo of Globe EVERGREEN GLOBAL REAL ESTATE EQUITY FUND
appears here) STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED ONE MONTH
APRIL 30, 1996 ENDED
(UNAUDITED) OCTOBER 31, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss........................................................................ $ (63,273) $ (63,653)
Net realized loss on investment transactions............................................... (380,241) (28,407)
Net realized loss on foreign currency transactions......................................... (25,546) (1,146)
Net change in unrealized appreciation (depreciation) of investments and foreign
currencies............................................................................... 7,853,423 (2,841,208)
Net increase (decrease) in net assets resulting from operations......................... 7,384,363 (2,934,414)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold.................................................................. 10,557,459 640,465
Proceeds from reinvestment of distributions................................................ -- --
Payment for shares redeemed................................................................ (19,670,636) (3,957,113)
Net decrease resulting from Fund share transactions.................................. (9,113,177) (3,316,648)
Net decrease in net assets........................................................... (1,728,814) (6,251,062)
NET ASSETS:
Beginning of period........................................................................ 61,595,601 67,846,663
End of period (including net investment loss of $77,107 and $13,834, respectively)......... $ 59,866,787 $ 61,595,601
</TABLE>
See accompanying notes to financial statements.
30
<PAGE>
(Photo of Globe EVERGREEN GLOBAL REAL ESTATE EQUITY FUND
appears here) FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SIX MONTHS SIX MONTHS
ENDED ONE MONTH FEBRUARY 10, ENDED ONE MONTH
APRIL 30, ENDED 1995* THROUGH APRIL 30, ENDED
1996 OCTOBER 31, SEPTEMBER 30, 1996 OCTOBER 31,
(UNAUDITED) 1995# 1995 (UNAUDITED) 1995#
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period............................ $11.58 $12.12 $11.46 $11.53 $12.08
Income (loss) from investment operations:
Net investment income (loss).................................. (.15) (.01) .07 (.07) (.02)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions............... 1.67 (.53) .59 1.54 (.53)
Total from investment operations............................ 1.52 (.54) .66 1.47 (.55)
Net asset value, end of period.................................. $13.10 $11.58 $12.12 $13.00 $11.53
TOTAL RETURN+................................................... 13.1% (4.5%) 5.8% 12.8% (4.6%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)....................... $1,875 $74 $66 $91 $100
Ratios to average net assets:
Operating expenses++**........................................ 1.71% 1.73% 1.61% 2.46% 2.44%
Interest expense.............................................. .03% .03% .01% .03% .03%
Net investment income (loss)++**.............................. (.20%) (1.26%) .98% (1.14%) (1.98%)
Portfolio turnover rate......................................... 19% 1% 28% 19% 1%
Average commission rate paid.................................... $.0052 N/A N/A $.0052 N/A
<CAPTION>
FEBRUARY 8,
1995* THROUGH
SEPTEMBER 30,
1995
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period............................ $11.44
Income (loss) from investment operations:
Net investment income (loss).................................. .08
Net realized and unrealized gain (loss) on
investments and foreign currency transactions............... .56
Total from investment operations............................ .64
Net asset value, end of period.................................. $12.08
TOTAL RETURN+................................................... 5.6%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)....................... $128
Ratios to average net assets:
Operating expenses++**........................................ 2.42%
Interest expense.............................................. .03%
Net investment income (loss)++**.............................. 1.38%
Portfolio turnover rate......................................... 28%
Average commission rate paid.................................... N/A
</TABLE>
* Commencement of class operations.
# The Fund changed its year end from September 30 to October 31.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sales charge or contingent deferred
sales charge is not reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were assumed or waived by the investment adviser, the annualized ratios
of expenses and net investment loss to average net assets, exclusive of any
applicable state expense limitations, would have been the following:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SIX MONTHS FEBRUARY 10, SIX MONTHS
ENDED ONE MONTH 1995* ENDED ONE MONTH
APRIL 30, ENDED THROUGH APRIL 30, ENDED
1996 OCTOBER 31, SEPTEMBER 30, 1996 OCTOBER 31,
(UNAUDITED) 1995# 1995 (UNAUDITED) 1995#
<S> <C> <C> <C> <C> <C>
Operating expenses............................................. 4.58% 46.90% 21.59% 27.66% 31.39%
Net investment loss............................................ (3.07%) (46.44%) (19.00%) (26.34%) (30.94%)
<CAPTION>
FEBRUARY 8,
1995*
THROUGH
SEPTEMBER 30,
1995
<S> <C>
Operating expenses............................................. 82.74%
Net investment loss............................................ (79.94%)
</TABLE>
See accompanying notes to financial statements.
31
<PAGE>
(Photo of Globe EVERGREEN GLOBAL REAL ESTATE EQUITY FUND
appears here) FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS C SHARES CLASS Y SHARES
SIX MONTHS FEBRUARY 9, SIX MONTHS
ENDED ONE MONTH 1995* ENDED ONE MONTH NINE MONTHS
APRIL 30, ENDED THROUGH APRIL 30, ENDED YEAR ENDED ENDED
1996 OCTOBER 31, SEPTEMBER 30, 1996 OCTOBER 31, SEPTEMBER 30, SEPTEMBER 30,
(UNAUDITED) 1995# 1995 (UNAUDITED) 1995# 1995 1994##
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of
period........................... $11.53 $12.08 $11.43 $11.59 $12.13 $13.81 $14.75
Income (loss) from investment
operations:
Net investment income (loss)..... (.16) (.02) .06 (.01) (.01) .11 .07
Net realized and unrealized gain
(loss) on investments and
foreign currency
transactions................... 1.63 (.53) .59 1.54 (.53) (1.17) (1.01)
Total from investment
operations................... 1.47 (.55) .65 1.53 (.54) (1.06) (.94)
Less distributions to shareholders
from:
Net investment income............ -- -- -- -- -- (.10) --
Net realized gains............... -- -- -- -- -- (.52) --
Total distributions to
shareholders................. -- -- -- -- -- (.62) --
Net asset value, end of period..... $13.00 $11.53 $12.08 $13.12 $11.59 $12.13 $13.81
TOTAL RETURN+...................... 12.8% (4.6%) 5.7% 13.2% (4.5%) (7.7%) (6.4%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's
omitted)......................... $9 $4 $7 $57,891 $61,418 $67,645 $132,294
Ratios to average net assets:
Operating expenses............... 2.40%++** 2.37%++** 1.54%++** 1.60%++** 1.62%++ 1.54% 1.46%++
Interest expense................. .03%++ .02%++ .01%++ .03%++ .03%++ .05% .08%++
Net investment income (loss)..... (1.05%)++** (1.94%)++** .86%++** (.21%)++** (1.14%)++ .92% .56%++
Portfolio turnover rate............ 19% 1% 28% 19% 1% 28% 63%
Average commission rate paid....... $.0052 N/A N/A $.0052 N/A N/A N/A
<CAPTION>
YEAR ENDED
DECEMBER 31,
1993 1992
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of
period........................... $9.86 $9.16
Income (loss) from investment
operations:
Net investment income (loss)..... -- (.01)
Net realized and unrealized gain
(loss) on investments and
foreign currency
transactions................... 5.07 .94
Total from investment
operations................... 5.07 .93
Less distributions to shareholders
from:
Net investment income............ -- --
Net realized gains............... (.18) (.23)
Total distributions to
shareholders................. (.18) (.23)
Net asset value, end of period..... $14.75 $9.86
TOTAL RETURN+...................... 51.4% 10.2%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's
omitted)......................... $146,173 $8,618
Ratios to average net assets:
Operating expenses............... 1.56%** 2.00%**
Interest expense................. -- --
Net investment income (loss)..... .03%** (.10%)**
Portfolio turnover rate............ 88% 245%
Average commission rate paid....... N/A N/A
</TABLE>
* Commencement of class operations.
# The Fund changed its fiscal year end from September 30 to October 31.
## The Fund changed its fiscal year end from December 31 to September 30.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Contingent deferred sales charge is not
reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were assumed or waived by the investment adviser, the annualized ratios
of expenses and net investment loss to average net assets, exclusive of any
applicable state expense limitations, would have been the following:
<TABLE>
<CAPTION>
CLASS Y
CLASS C SHARES SHARES
SIX MONTHS FEBRUARY 9, SIX MONTHS
ENDED ONE MONTH 1995* ENDED
APRIL 30, ENDED THROUGH APRIL 30,
1996 OCTOBER 31, SEPTEMBER 30, 1996
(UNAUDITED) 1995# 1995 (UNAUDITED)
<S> <C> <C> <C> <C>
Operating expenses....................................................... 368.91% 570.26% 269.60% 1.63%
Net investment loss...................................................... (367.56%) (569.83%) (266.32%) (.24%)
<CAPTION>
YEAR ENDED
DECEMBER 31,
1993 1992
<S> <C> <C>
Operating expenses....................................................... 1.64% 3.72%
Net investment loss...................................................... (.05%) (1.82%)
</TABLE>
See accompanying notes to financial statements.
32
<PAGE>
(Photo of Flags EVERGREEN INTERNATIONAL EQUITY FUND
appears here)
A REPORT FROM YOUR
PORTFOLIO MANAGER
RICHARD WAGONER
Evergreen International Equity Fund completed the first (Photo of
half of its fiscal year on April 30, 1996, with a net asset Richard Wagoner
value per share (Class Y, no-load shares) of $10.84. The appears here)
Fund's 14.2%* total return for that time outperformed the
12.0% total return for the Lipper International Funds average
of the 323 international funds tracked by Lipper Analytical
Services during that time**. The Fund also outperformed the
13.3% total return for the MSCI EAFE Index***. The total
returns at NAV for the six months ended April 30, for the
Fund's Class A shares, Class B shares and Class C shares were
14.0%, 13.7%, and 13.8%, respectively. Class A shares are
subject to a maximum
4.75% front end sales charge, Class B shares are subject to a
maximum 5% contingent deferred sales charge, and Class C shares are subject to a
1% contingent deferred sales charge within the first year of purchase. Sales
charges are not reflected in figures above, and if reflected, performance would
be lower.
Most foreign markets have performed well during the past six months, and the
Fund, which owns stocks from over 400 companies in forty countries, was well
positioned to take advantage of this. Our largest country allocation, at just
under 23% of net assets, was Japan. The Japanese stock market rose 19%, as
measured MSCI EAFE/Japan Index+, for the six months ended April 30. The Fund
also benefited from its position in Malaysia, 6% of net assets at April 30,
which was up nearly 30%.
Among developed markets, which represent approximately 90% of net assets,
Finland was the only equity market with a negative return during the period
under review. The Finnish market has finally cooled off after a phenomenal run
which produced a return of 80% for calendar 1993, 50% for calendar 1994, and
47.6% through the third quarter of calendar 1995, as measured by the MSCI
EAFE/Finland Index+. During the last six months, the Finnish market declined
8.1% and the currency 12.5%.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
INTERNATIONAL INVESTING MAY INVOLVE CERTAIN ADDITIONAL RISKS SUCH AS CURRENCY
FLUCTUATIONS, ECONOMIC AND POLITICAL INSTABILITY, AND DIFFERENCES IN ACCOUNTING
STANDARDS.
* PERFORMANCE FIGURES INCLUDE REINVESTMENT OF INCOME DIVIDEND AND CAPITAL GAIN
DISTRIBUTIONS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE.
INVESTORS' SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. CURRENTLY, THE ADVISER IS WAIVING A PORTION OF ITS ADVISORY
FEE AND ABSORBING A PORTION OF THE FUND'S OTHER EXPENSES. HAD FEE NOT BEEN
WAIVED OR EXPENSES ABSORBED, PERFORMANCE WOULD HAVE BEEN LOWER. FEE WAIVER
AND EXPENSE ABSORPTION MAY BE REVISED AT ANY TIME. FOR ADDITIONAL
INFORMATION ON FEE WAIVER AND EXPENSE ABSORPTION, PLEASE SEE THE PROSPECTUS.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC., AND INDEPENDENT MUTUAL FUNDS
PERFORMANCE MONITOR.
*** THE MSCI EAFE INDEX IS A STANDARD UNMANAGED FOREIGN SECURITIES INDEX
REPRESENTING 1,112 SECURITIES FROM 20 DEVELOPED COUNTRIES IN EUROPE,
AUSTRALIA, AND THE FAR EAST AS MONITORED BY MORGAN STANLEY CAPITAL
INTERNATIONAL. ALL COUNTRY RETURNS, INCLUDING THAT OF THE U.S., DIFFER FROM
INDEX RETURNS BECAUSE THEY REPRESENT TOTAL STOCK MARKET RETURNS AS
CALCULATED BY MORGAN STANLEY CAPITAL INTERNATIONAL. AN INVESTMENT CAN NOT BE
MADE IN AN INDEX.
+ MSCI COUNTRY-SPECIFIC SUB INDEX WITHIN THE MSCI EAFE INDEX.
33
<PAGE>
(Photo of Flags EVERGREEN INTERNATIONAL EQUITY FUND
appears here)
A REPORT FROM YOUR
PORTFOLIO MANAGER -- (CONTINUED)
Most foreign currencies, in fact, have been weak. The Deutsche mark declined
about 8% and even the mighty yen declined about 2%. It looks as though the U.S.
dollar's long steady decline has finally hit bottom. The modest rebound of the
dollar has given a bit of breathing room to foreign firms that export products
to the U.S.
Most emerging markets, which in aggregate represent about 10% of the Fund,
were strong performers. The IFCI Index++ was up 15.3% for the six months ended
April 30. Some emerging market countries delivered absolutely outstanding
numbers. Argentina, as measured by the IFCI/Argentina Index+++, was up 39% in
U.S. dollar terms while Taiwan, Mexico and Hungary, as measured by their
respective IFCI Indexes, were each up over 25%.
We employ a highly systematic process in the management of our Fund. The
focus of this process is an effort to have the Fund outperform the MSCI EAFE
Index. This process employs a three-part strategy in relation to the EAFE: 1) a
more uniform country allocation within the EAFE markets, 2) a strong emphasis on
value stocks culled from our research universe of about 1,900 stocks within the
EAFE markets and, 3) diversified holdings in emerging markets. Our policy is to
invest 90% of the portfolio in the twenty developed markets represented by EAFE
Index and 10% in the twenty six emerging markets represented by the IFCI Index.
The Fund commenced operations on September 2, 1994. For its first full fiscal
year, which ended October 31, 1995, we underperformed the EAFE Index by 3.6
percentage points. The second and third elements of our strategy worked against
us during this period. The Fund is now half-way through its second full fiscal
year. Our value stocks and our emerging markets holdings have started to perform
and we have begun to close our performance gap relative to the EAFE Index.
Our value-oriented stock selections in Japan have worked particularly well
for us during the last six months. We have attempted to systematically select
low-priced stocks across all sectors of the market, and our holdings have
outperformed the Japanese market by over 20 percentage points.
Matsushita Electric is a good example. It is a mammoth manufacturing
operation that produces many well-known appliances, household durables, and
consumer electric products, for example, those under the Panasonic name. The
firm has a capitalization of about $35 billion with 1995 sales of 7 trillion
yen, approximately $74 billion. On April 30, Matsushita was selling at 1,850 yen
(approximately $17.66) which is up nearly 30% from six months earlier. But, it
remains one of the cheapest stocks in the Japanese market on a variety of
measures. It is selling a shade over book value, and is still nearly 40% below
its peak which was in 1988.
Toyota, our largest holding in Japan, is another good example. This stock is
up 26% for the six months through April 30, and still sells at only 1.8x book
value. which puts it at a 22% discount to the overall Japanese market. Nissan
and Mazda have also performed well and remained cheap.
Some of the securities in the financial sector have performed even better.
For example, Yamaichi Securities, one of the large Japanese brokers, is up 54%
for the last six months and was selling at 1.6 times book value at April 30.
++ THE INTERNATIONAL FINANCE CORPORATION INDEX OF 1,116 STOCKS FROM 26
DEVELOPING COUNTRIES FROM AROUND THE WORLD. THE IFCI INDEXES ARE UNMANAGED
INDEXES.
+++ AN IFCI COUNTRY-SPECIFIC SUB INDEX WITHIN THE IFCI INDEX.
34
<PAGE>
(Photo of Flags EVERGREEN INTERNATIONAL EQUITY FUND
appears here)
A REPORT FROM YOUR
PORTFOLIO MANAGER -- (CONTINUED)
As we look ahead to the second half of the fiscal year, we plan to make a
change to the strategic allocation of developed-markets portion of Fund. This
change will be effective on July 1. We are concerned with the course of events
in Hong Kong as that country approaches the transfer of power to China in June
of 1997. We are convinced that the uncertainty is now too great to warrant a 6%
allocation of net assets. Hong Kong was a strong performer last year and again
last quarter, but no one knows just how much economic freedom will remain in the
economy that has, for the last twenty years, been the most free-wheeling in the
world. There are numerous signs that there will be, at the very least, a
dramatic increase in bureaucracy. We will cut Hong Kong to 2% of net assets.
Secondly, we are very encouraged by the gradual improvement in the economic
environment in Japan. Valuations are attractive, analysts are increasing their
numbers and flows have started to come back into the market. The market, in
local currency terms. has been strong for the last year or so, but the
over-valued yen has declined and offset most of the equity gains. The yen is no
longer too far above its purchasing power parity and we thus feel that the time
is right to move Japan back up to a weight more reflective of the underlying
size of the market. We will therefore move Japan to a 34% weights, with
approximately four percentage points of the increase to come from Hong Kong, and
two each from Australia, Malaysia and Singapore.
We look forward to the second half of the year. International markets are
booming and we are well positioned to take advantage of opportunities all over
the globe.
35
<PAGE>
EVERGREEN INTERNATIONAL EQUITY FUND
(Photo of Flags STATEMENT OF INVESTMENTS
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCKS -- 95.4%
AFRICA -- .1%
12,200 Morgan Stanley Africa Investment
Fund............................. $ 154,025
ARGENTINA -- .8%
15,000 Astra Cia Argentina de Petro....... 31,878
8,838 Banco de Galicia Buenos Aires...... 52,856
5,300* Banco Frances del Rio de la Plata
SA............................... 50,726
600 Buenos Aires Embotelladora SA,
ADR.............................. 9,525
7,000 Cementera Argentina................ 30,803
5,900 Central Puerto SA.................. 21,242
10,000* Comercial del Plata SA............. 29,903
617* IRSA Inversiones y Representaciones
SA, GDR.......................... 18,510
3,500 Molinos Rio de la Plata SA......... 36,404
6,000 Perez Companc SA................... 37,324
12,237 Perez Companc SA, ADR.............. 153,832
42,000 Siderca SA......................... 48,725
15,000 Telecom Argentina.................. 67,807
5,100 Telefonica de Argentina, ADR....... 149,175
15,000 Transportadora de Gas Sur.......... 38,554
4,000 YPF SA............................. 88,009
6,200 YPF SA, ADR........................ 135,625
1,000,898
AUSTRALIA -- 4.7%
161,000 Adelaide Brighton Ltd.............. 159,356
1,300 AFP Providia SA, ADR............... 29,737
217,900* Ampolex Ltd........................ 744,592
60,800 Australian & New Zealand Banking
Group Ltd........................ 290,388
384,000 Australian National Industries..... 349,914
26,000 Boral Ltd.......................... 67,808
115,900 Caltex Australia Ltd............... 505,298
25,100 Commonwealth Bank of Australia..... 206,045
304,100 General Property Trust............. 525,546
346,500 Goodman Fielder Ltd................ 342,962
55,000 MIM Holdings Ltd................... 81,225
204,700 News Corp. Ltd..................... 1,199,577
304,800 Quantas Airways.................... 541,122
312,600 Westfield Trust.................... 535,324
106,300 Westpac Bank Corp. Ltd............. 516,052
6,094,946
AUSTRIA -- 1.5%
9,100 Creditanstalt-Bankverein Stamm..... 618,783
5,900 Oester Elektrizita................. 417,083
3,200 OMV AG............................. 318,068
8,100 Virginia Stahl AG.................. 267,868
10,050 Z Laenderbank Bank Austria AG...... 350,093
1,971,895
BELGIUM -- 1.3%
336 Banque National Belgique........... 457,357
61,433 Cockerill Sambre................... 333,705
3,915 Electrafina SA..................... 380,556
7,214 Societe Generale de Belgique....... 561,446
1,733,064
<CAPTION>
SHARES VALUE
<C> <S> <C>
BRAZIL -- .4%
14,226 Brazil Fund, Inc................... $ 307,637
4,706* Telecomunicacoes Brasileiras, ADR.. 254,712
562,349
CHILE -- .5%
1,400 Banco Osorno y La Union, ADR....... 21,175
1,000 Chilectra SA, ADR.................. 53,286
1,900 Chilgener SA, ADR.................. 42,512
2,400 Compania Cervecerias Unidas SA,
ADR.............................. 51,000
1,000 Compania de Telecomunicacione,
ADR.............................. 91,250
1,400 Cristalerias de Chile ADR.......... 33,250
1,100 Embotelladora Andina SA, ADR....... 38,500
600 Empresas Telex Chile SA, ADR....... 6,225
4,600 Enersis SA, ADR.................... 136,850
1,600 Laboratorio Chile SA, ADR.......... 21,600
1,600 Madeco SA, ADR..................... 40,000
1,700 Maderas y Sinteticos Sociedad,
ADR.............................. 26,988
500 Sociedad Quimica y Minera de Chile
SA, ADR.......................... 26,750
1,500 Vina Concha y Toro SA, ADR......... 25,125
614,511
COLOMBIA -- .4%
18,000 Banco Industrial Colombiano SA,
ADR.............................. 353,250
7,100 Cementos Diamante SA, ADR.......... 138,387
491,637
CZECH REPUBLIC -- .1%
1,700 Cez................................ 65,189
300 Skoda Koncern Plzen, AS............ 8,479
800 SPT Telecom, AS.................... 97,937
171,605
DENMARK -- 1.9%
11,680 Den Danske Bank AS................. 761,911
3,250 Jyske Bank AS...................... 200,441
1,100 Lauritzen J Holdings AS............ 130,269
5,400 NKT Holdings AS.................... 258,929
4,640 Tele Danmark AS.................... 233,494
2,850* Topdanmark AS...................... 289,732
11,450 Unidanmark AS...................... 510,225
2,385,001
FINLAND -- 1.4%
94,500 Enso-Gutzeit OY.................... 736,146
51,000 Kesko OY........................... 579,593
249,560* Merita Ltd......................... 536,289
1,852,028
</TABLE>
36
<PAGE>
EVERGREEN INTERNATIONAL EQUITY FUND
(Photo of Flags STATEMENT OF INVESTMENTS -- (CONTINUED)
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCKS -- CONTINUED
FRANCE -- 6.3%
7,150 Alcatel Alsthom (Cie Genel)........ $ 672,453
18,350 Assurances Generales de France..... 501,052
16,200 Banque Nationale de Paris.......... 676,528
9,100* Cerus Compagnies Europeenes Reunies
SA............................... 175,749
18,600 Cie de Suez........................ 770,636
11,750 Cie Fin de Paribas................. 755,820
2,626 Compagnie Bancaire SA.............. 290,169
4,200* Credit Lyonnais SA................. 140,203
5,300 Credit Nationale SA................ 414,769
955 EuraFrance......................... 367,400
10,450* Groupe des Assurances Nationales
(GAN)............................ 314,865
4,825 Peugeot SA......................... 674,146
14,000 Renault Regie Nationale............ 424,538
14,450 Rhone Poulenc SA................... 346,744
1,950 Societe Generale................... 226,415
5,200 Societe Elf Aquitaine.............. 386,717
7,250 Thomson-CSF SA..................... 193,053
4,760 TOTAL SA........................... 323,044
9,550 Uap Cie Uap........................ 206,801
5,550 Worms & Cie........................ 297,611
8,158,713
GERMANY -- 6.2%
2,140 Bankgesellschaft Berlin AG......... 439,630
3,570 BASF AG............................ 974,760
1,785 Bayer AG........................... 574,828
28,090 Bayerische Hypotheken- und
Wechsel-Bank AG.................. 698,718
24,950 Bayerische Vereinsbank AG.......... 733,392
1,920 Berl Kraft & Licht................. 525,495
18,690 BHF-Bank International AG.......... 458,674
2,510 Commerzbank AG..................... 543,514
430* Daimler-Benz AG.................... 235,518
29,300 Dresdner Bank AG................... 737,237
1,710 Ikb Dt Industriebk AG.............. 319,459
7 Muenchener Ruckvers AG............. 12,711
295 Siemens AG......................... 161,538
2,650* Varta AG........................... 502,858
9,940 Veba AG............................ 494,111
1,100 Volkswagen AG...................... 379,744
2,410* Zanders Feinpapiere AG............. 173,166
7,965,353
GREECE -- .3%
1,380 Aegek SA........................... 8,778
600 Aktor.............................. 7,867
1,066 Alpha Credit Bank.................. 53,346
420 Alpha Leasing SA................... 7,997
300 Aluminum Co. of Greece............. 13,542
1,040 Commercl Bank of Greece............ 34,120
840 Delta Dairy SA..................... 10,410
740 Elais Oleaginous SA................ 23,792
3,260 Epilektos Textile.................. 12,709
800 Ergo Bank SA....................... 40,248
1,560 Hellenic Bottling Co., SA.......... 56,014
<CAPTION>
SHARES VALUE
<C> <S> <C>
GREECE -- CONTINUED
1,420 Hellenic Sugar Industry, SA........ $ 13,315
2,700 Heracles General Cement, SA........ 30,912
700 Intracom SA........................ 16,976
1,100 Ionian Bank SA..................... 19,500
700 Michaniki SA....................... 8,014
740 National Bank Of Greece............ 35,802
600 National Mortgage Bank of Greece... 19,082
540 Titan Cement Co., SA............... 24,929
437,353
HONG KONG -- 6.4%
363,000 Amoy Properties Ltd................ 408,261
234,000 Chinese Estates Holdings Ltd....... 211,751
157,200 Great Eagle Holdings Ltd........... 451,146
160,000 Harbour Centre Development Ltd..... 217,180
218,000 Hongkong Land Holdings Ltd......... 466,520
154,000 Hongkong & Shanghai Hotels Ltd..... 265,775
196,000 Hong Kong Ferry Holdings........... 217,904
21,000 Hutchison Whampoa, Ltd............. 130,308
205,800 Hysan Development Co............... 629,643
146,000* Jardine Strategic Holdings Ltd..... 478,880
343,000 Mandarin Oriental International,
Ltd.............................. 487,060
58,000 New World Develelopment Co. Ltd.... 260,177
1,012,000 Regal Hotels International Holdings
Ltd.............................. 256,418
837,000 Sino Land Co....................... 827,749
614,000 Stelux Holdings International
Ltd.............................. 140,493
49,000 Sun Hung Kai Properties Ltd........ 467,164
76,500 Swire Pacific Ltd.................. 652,705
198,000 Wharf (Holdings) Ltd (The)......... 733,333
228,000 Wheelock & Co...................... 465,697
228,000 Wing on International Holdings..... 403,801
8,171,965
HUNGARY -- .3%
4,300 Danubius Hotel & Spa............... 58,260
4,200 Egis Gyogyszergyar................. 182,095
33,700 Fotex RT........................... 38,811
1,400 Pick Szeged Right, GDR............. 67,262
2,500 Skala-Coop. RT..................... 27,944
374,372
INDIA -- .3%
1,900 Bajaj Auto Ltd., GDR............... 66,500
750 East India Hotels, GDR............. 21,937
3,000 Grasim Industries Ltd.............. 58,500
150* Hindalco Industries Ltd, GDR....... 6,638
1,250 Indian Rayon & Industries, GDR..... 21,062
4,400 Larsen & Toubro Ltd., GDR.......... 82,500
2,900 Raymond Woolen Mil Ltd............. 44,950
1,700 Reliance Industries Ltd............ 28,050
1,500 Tata Engineering & Locomotion
Ltd.............................. 27,000
357,137
</TABLE>
37
<PAGE>
EVERGREEN INTERNATIONAL EQUITY FUND
(Photo of Flags STATEMENT OF INVESTMENTS -- (CONTINUED)
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCK -- CONTINUED
INDONESIA -- .5%
40,500 Astra International................ $ 59,878
26,500 Bank International Indonesia....... 130,314
8,000 Gudang Garam Perus................. 49,460
4,000 HM Sampoerna....................... 44,140
98,888 Indah Kiat Paper................... 102,765
12,000 Indofoods Suksesi.................. 56,182
23,500 PT Semen Gresek.................... 81,321
57,000 PT Telekomunikasi Ind.............. 94,654
618,714
IRELAND -- 1.8%
89,600 Allied Irish Bank Plc.............. 467,321
64,600 Bank of Ireland.................... 466,673
81,100 James Crean Plc.................... 292,303
349,600 Jefferson Smurfit Group Plc........ 944,350
105,000 Waterford Foods Plc................ 163,475
2,334,122
ITALY -- 2.1%
613,400* BCA Naz Agricolt................... 236,014
50,400 BCA Pop di Milano.................. 231,511
486,800* Banca di Roma...................... 486,800
445,100 CIR Compagnie Industriali Riunite
SpA.............................. 152,451
287,300 Credito Italiano SpA............... 366,574
22,000 Finanziaria Autogrill SpA.......... 23,380
325,700* Finmeccanica SpA................... 165,769
12,200 Grassetto SpA...................... 3,165
120,000 INA-Istituto Nazionale delle
Assicurazione SpA................ 184,379
153,200 Italcementi SpA.................... 422,722
13,100 Italmobiliare...................... 203,797
105,300 Telecom Italia SpA................. 214,712
2,691,274
JAPAN -- 22.7%
24,000 Aida Engineering................... 229,435
50,000 Amada Co........................... 583,146
6,500 Aoyama Trading Co.................. 204,436
28,000 Asahi Denka Kogyo.................. 247,598
14,000 Canon, Inc......................... 278,381
9,000 Chubu Electrical Power Co, Inc..... 228,001
25,000 Daicel Chemical Industries, Ltd.... 166,818
28,000 Daiwa Securities Co., Ltd.......... 430,955
23,000 Ezaki Glico Co..................... 239,663
25,000 Fuji Photo Film Co................. 779,121
46,000 Fujisawa Pharm Co.................. 514,507
30,000 Fujita Corp........................ 149,993
36,000 Fujitsu, Ltd....................... 371,684
38,000 Fukuoka City Bank, Ltd............. 304,421
22,000 Gunze, Ltd......................... 144,486
46,000 Haseko Corp........................ 211,959
94,000 Hitachi, Ltd....................... 1,015,439
56,000 Hokkaido Bank, Ltd................. 183,624
48,000 Hokkaido Takushoku Bank, Ltd....... 139,037
93,000 Hokuriku Bank, Ltd................. 626,786
19,000 Honda Motor Co., Ltd............... 434,109
39,000 Inax Corp.......................... 425,027
28,000 Itoham Foods, Inc.................. 227,790
51 Japan Tobacco, Inc................. 471,947
19,000 Kansai Electric Power Co., Inc..... 461,355
<CAPTION>
SHARES VALUE
<C> <S> <C>
JAPAN -- CONTINUED
15,000 Katokichi Co....................... $ 374,265
74,000 Komatsu, Ltd....................... 714,497
39,000 Kureha Chemical Industry Co.,
Ltd.............................. 238,239
27,000 Kyudenko Corpu..................... 397,495
26,000 Long-Term Credit Bank of Japan,
Ltd.............................. 225,439
30,000 Maeda Corp......................... 321,208
67,000 Marubeni Corp...................... 401,596
65,000 Marudai Food Co.................... 518,857
9,000 Maruichi Steel Tube................ 190,144
43,000 Matsushita Electric Works Ltd...... 489,174
59,000 Matsushita Electric Industrial Co.,
Ltd.............................. 1,043,449
81,000* Mazda Motor Corp................... 392,591
107,000 Mitsubishi Chemical Corp........... 587,142
34,000 Mitsubishi Electric Corp........... 267,827
17,000 Mitsubishi Heavy Industries........ 151,790
43,000 Mitsui Fudosan Co.................. 567,277
12,000 Nagase & Co........................ 119,306
46,000 Nippon Credit Bank Co.............. 187,773
103,000 Nippon Oil Co...................... 713,876
27,000 Nippon Sheet Glass Co.............. 138,865
23,000 Nippon Shinpan Co.................. 171,722
11,000 Nippondenso Co., Ltd............... 239,759
100,000 Nissan Motor Co., Ltd.............. 845,084
17,000 Nisshin Oil Mills, Ltd............. 137,326
32,000 Nisshinbo Industries, Inc.......... 354,859
38,000 Obayashi Corp...................... 353,463
13,000 Pioneer Electronic Co.............. 290,808
91,000 Sanyo Electric Co., Ltd............ 581,119
14,000 Seino Transportation Co, Ltd....... 246,260
51,000 Sekisui House, Ltd................. 633,813
49,000* Settsu Corp........................ 184,093
50,000 Shiseido Co., Ltd.................. 630,945
6,000 Sony Corp.......................... 390,039
21,000 Stanley Electric Co., Ltd.......... 155,184
60,000 Sumitomo Corp...................... 716,983
30,000 Sumitomo Metal Industries, Ltd..... 304,001
30,000 Sumitomo Realty & Development Co.,
Ltd.............................. 241,480
37,000 Sumitomo Trust & Banking Co.,
Ltd.............................. 541,179
26,000 Takeda Chemical Industries, Ltd.... 449,883
37,000 TEC Corp........................... 263,515
38,000 Tokyo Sowa Bank Ltd................ 204,159
19,600 Tokyo Steel Manufacturing.......... 395,354
12,000 Tokyo Style Co..................... 213,374
9,000 Toyo Seikan Kaisha Ltd............. 319,201
15,000 Toyo Trust & Banking Co., Ltd...... 163,472
67,000 Toyota Motor Corp.................. 1,530,806
13,000* Victor Co. of Japan................ 180,202
22,000 Yakult Honsha Co................... 323,885
70,000 Yamaichi Securities Co., Ltd....... 553,415
64,000 Yasuda Trust & Banking Co, Ltd..... 424,607
19,000 Yokogawa Electric Corp............. 221,596
29,372,114
</TABLE>
38
<PAGE>
EVERGREEN INTERNATIONAL EQUITY FUND
(Photo of Flags STATEMENT OF INVESTMENTS -- (CONTINUED)
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCK -- CONTINUED
KOREA -- .5%
28,000 Korea Fund, Inc.................... $ 672,000
840 Pohang Iron & Steel Ltd, ADR....... 23,100
695,100
LUXEMBOURG -- .2%
2,612 Arbed SA........................... 284,092
MALAYSIA -- 6.7%
5,000 Affin Holdings Berhad.............. 12,333
1,000 AMMB Industrial, SA................ 15,141
17,000 Amsteel Corp....................... 13,773
3,000 Commerce Asset-Holdings Berhad..... 20,455
5,000 DCB Holdings Berhad................ 18,249
16,000 Edaran Otomobil Nasional
Berhad........................... 136,686
49,400* Faber Group Berhad................. 49,533
3,000 Genting Berhad..................... 26,952
307,000 Golden Hope Plantations Berhad..... 549,160
6,000 Hicom Holdings Berhad.............. 17,687
9,000 Highlands & Lowlands Berhad........ 16,965
3,000 Hong Leong Credit Berhad........... 14,920
10,000 Hong Leong Properties Berhad....... 12,915
3,000 Hume Industries M Berhad........... 17,086
13,000 IOI Corp........................... 19,500
54,500 Kuala Lumpur Kepong Berhad,
A Shares......................... 139,895
109,000 Kuala Lumpur Kepong Berhad......... 279,790
8,000 Kumpulan Guthrie Berhad............ 12,706
5,000 Leader University Holdings
Berhad........................... 14,739
9,000 Magnum CP Berhad................... 15,594
266,000 Malaysia International Shipping
Corp. Berhad..................... 853,487
290,000 Malaysia Mining Corp. Berhad....... 569,927
198,000 Malaysian Airline System........... 655,156
34,000 Malayan Bank, Berhad............... 331,368
147,000 Malaysian Plantations Berhad....... 207,532
606,000 Malaysian United Industries
Berhad........................... 614,920
14,000 Metroplex Berhad................... 14,038
417,000 Pan Malaysia Cement Works Berhad... 518,469
112,000 Perlis Plantations Berhad.......... 471,664
3,000 Perusahaan Otomobile Nasional
Berhad-Proton.................... 14,800
9,000 Petronas Gas Berhad................ 39,706
156,000 Renong Berhad...................... 271,544
5,000 Resorts World Berhad............... 30,281
2,000 Rothmans of Pall Mall Berhad....... 20,455
63,000 Sarawak Enterprise................. 138,972
131,000 Sime Darby Berhad.................. 362,532
230,000 Tan Chong Motor Holdings Berhad.... 370,834
4,000* Technology Resources Industries,
Berhad........................... 13,637
19,000 Telekom Malaysia Berhad............ 179,080
305,000 Tenaga Nasional Berhad............. 1,296,675
34,122 United Engineers Berhad............ 234,022
3,000 YTL Corp........................... 15,040
8,628,218
<CAPTION>
SHARES VALUE
<C> <S> <C>
MEXICO -- .8%
4,000 Alfa SA............................ $ 58,412
8,000 Apasco SA de CV.................... 43,392
200 Banco O Higgins, ADR............... 4,900
23,000 Cemex SA........................... 97,974
66,900 Cifra SA de CV..................... 91,121
2,900 Empresas ICA Sociedad Controladora
SA de CV......................... 39,890
8,000 Empresas la Modern................. 36,931
15,000 Fomentos Economico Mexicano,
SA de CV......................... 45,222
7,000 Grupo Industrial Bimbo
SA de CV......................... 31,797
17,000 Grupo Carso SA de CV............... 129,273
26,265 Grupo Financiero Banamex Accival,
SA de CV, Series L............... 53,944
10,400 Grupo Mexica SA.................... 39,332
1,300 Grupo Televisa SA, ADR............. 40,300
6,000 Grupo Tribasa SA de CV............. 20,592
8,000 Hylsamex SA de CV.................. 31,763
7,000 Industrias Penoles SA de CV........ 29,489
3,800 Kimberly-Clark Corp. de Mexico SA
de CV............................ 69,556
5,900 Telefonos de Mexico SA, ADR........ 200,600
1,064,488
NETHERLANDS -- 2.1%
15,760 ABN-AMRO Holdings NV............... 815,823
3,950 DSM NV............................. 403,414
9,350 Internationale Nederlanden Groep
NV............................... 721,917
4,300 Kon Hoogovensnv.................... 161,862
40,900* Pirelli Tyre Holding NV............ 338,944
1,500 Royal Dutch Petroleum Co........... 213,685
2,655,645
NEW ZEALAND -- 1.8%
721,800 Brierley Invmt Ltd................. 679,306
345,350 Carter Holt Harvey Ltd............. 818,477
27,975* Fletcher Challenge, Building
Shares........................... 66,301
27,975* Fletcher Challenge, Energy
Shares........................... 59,959
55,950* Fletcher Challenge, Paper Shares... 115,305
242,400 Lion Nathan Ltd.................... 604,460
2,343,808
NORWAY -- 2.4%
26,600 Aker AS, Series A.................. 493,972
19,520 Aker AS, Series B.................. 323,867
141,230 Den Norske Bank AS................. 406,303
10,580 Kvaerner AS........................ 434,821
9,400 Kvaerner AS, Series B.............. 362,716
12,120 Norske Skogindustrier AS,
Class A.......................... 370,817
11,920 Norske Skogindustrier AS,
Class B.......................... 341,111
7,000 Orkla AS........................... 342,030
3,075,637
PAKISTAN -- .2%
41,500 Pakistan Investment Fund, Inc...... 274,937
</TABLE>
39
<PAGE>
EVERGREEN INTERNATIONAL EQUITY FUND
(Photo of Flags STATEMENT OF INVESTMENTS -- (CONTINUED)
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCK -- CONTINUED
PERU -- .4%
2,400 Backus & Johnston, Class C......... $ 33,208
12,200 Backus & Johnston, Class T......... 16,366
18,900 BCO Wiese Pesl..................... 41,460
1,931 Cementos Lima SA................... 22,727
1,460 Compania Nazional de Cerveza C..... 5,728
110,800 CPT Telefonica del Peru............ 247,728
4,578 Credicorp Ltd...................... 77,826
4,700 Enrique Ferreyros.................. 6,345
8,594 Minas Buenaventura................. 72,508
1,900 Minsur............................. 15,389
500 Pacifico Peru Suiz................. 10,304
1,800 Portucel Industria................. 10,901
560,490
PHILIPPINES -- .6%
25,000 Ayala Corp......................... 35,346
67,000 Ayala Land Inc..................... 103,687
50,000 C & P Homes Inc.................... 42,988
700 Far East Bank & Trust.............. 25,545
52,000 Filinvest Land..................... 26,825
85,000 JG Summit Holdings Inc............. 34,916
3,400 Manila Electric Co................. 31,700
21,500 Mega World Properties.............. 15,404
2,500 Metro Bank & Trust Co.............. 67,348
50,000 Metro Pacific Corp................. 11,846
110,500 Petron Corp........................ 47,502
2,900 Philippine Commerce International
Bank............................. 38,785
900 Philippine Long Distance Telephone
Co............................... 45,739
1,800 Philippine National Bank........... 26,825
19,300 Pilipino Telephone Corp............ 28,393
12,800 San Miguel Corp.................... 40,107
145,000 SM Prime Holdings.................. 42,109
97,000 Southeast Asia Cement Holdings,
Inc.............................. 14,270
9,700 Union Bank Philippines............. 11,861
31,700 Universal Robina Corp.............. 16,050
707,246
PORTUGAL -- .2%
300 Banif BCO Int Fchl................. 2,706
700 BCO Chemical Portugal.............. 7,408
3,200 BCO Commerce Portugal.............. 36,721
2,200 BCO Espir Santo.................... 33,787
1,400 BCO Totta E Acores................. 26,954
1,700 BPI Society Gestora................ 21,188
600 Cimpor Cimentos de Portugal SA..... 11,280
400 Jeronimo Martins Sgps.............. 32,156
1,100 Modelo Contin Sgps................. 28,050
1,200 Portugal Telecom, SA............... 26,102
500 Seguros Tranquilid................. 8,989
1,400 Sonae Investimentos, SA............ 32,372
1,000 Soporcel Sociedad Portegeesa de
Celulose, SA..................... 21,994
600 Unicer Uniao Cervejeira, SA........ 10,825
300,532
SINGAPORE -- 3.1%
83,000 Auric Pacific GP Ltd............... 128,710
429,000 Chuan Hup Holdings Ltd............. 344,836
<CAPTION>
SHARES VALUE
<C> <S> <C>
SINGAPORE -- CONTINUED
49,000 DBS Land........................... $ 198,677
30,000 Fraser & Neave Ltd................. 332,906
118,000 Metro Holdings Ltd................. 428,084
87,000 Prima Ltd.......................... 321,810
65,000 Singapore Land Ltd................. 462,370
75,000 Straits Steamship Land Ltd......... 261,417
54,000 Times Publishing................... 144,430
122,000 United Engineers................... 245,597
585,000 United Industrial Corp............. 595,070
258,000 United OverSeas Land Ltd........... 537,729
4,001,636
SOUTH AFRICA -- .2%
7,900 Amalgamated Banks of South Africa
Ltd.............................. 35,660
350 Anglo America Gold Investment Co.,
Ltd.............................. 36,377
3,250 Barlow Ltd......................... 37,428
1,400 De Beers Centenary................. 31,759
1,000 Liberty Life Assn. of Africa
Ltd.............................. 29,861
14,600 Norwich Holdings SA Ltd............ 23,826
6,200 Smith CG, Ltd...................... 31,574
830 South Africa Breweries Ltd......... 24,064
250,549
SPAIN -- 2.4%
25,900 Banco Central Hispan............... 542,638
6,200 Empresa Nacional de
Electricidad, ADR................ 120,900
32,200 Europistas, Concesionaria
Espanola, SA..................... 250,613
58,400 Fuerzas Electricia Catal........... 408,157
47,000 Iberdrola SA....................... 460,024
49,700 Sevillana de Electridad............ 416,120
24,000 Telefonica de Espana, SA........... 427,358
83,400 Union Electrica Fenosa, SA......... 498,958
3,124,768
SWEDEN -- 3.1%
3,850 Electrolux AB...................... 194,158
28,700 Skandinaviska Enskilda Banken...... 215,834
27,350 Sparbanken Sverige AB.............. 308,522
28,000 Stadshypotek AB.................... 611,065
36,500 Stora Kopparbergs Besgslogs,
Series A......................... 492,472
27,100 Stora Kopparbergs Besgslogs,
Series B......................... 363,646
33,300 Svenska Cellulosa AB-SCA........... 628,524
12,750 Svenska Handelsbanken, Series A.... 261,332
8,550 Svenska Handelsbanken, Series B.... 166,421
11,450 Sydkraft AB, Series A.............. 251,571
20,296 Sydkraft AB, Series C.............. 395,050
27,350 Tornet Fastighet................... 20,165
4,500 Volvo AB........................... 103,184
4,011,944
SWITZERLAND -- 2.5%
225 Baloise Holdings................... 482,945
1,930 Banque Cant Vaudoise............... 582,917
770 Saurer AG Arbon.................... 316,285
260 Schweizerischer Bankgesellsch...... 258,409
2,240 Schweizerischer Bankverein......... 624,984
</TABLE>
40
<PAGE>
EVERGREEN INTERNATIONAL EQUITY FUND
(Photo of Flags STATEMENT OF INVESTMENTS -- (CONTINUED)
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
COMMON STOCK -- CONTINUED
<C> <S> <C>
SWITZERLAND -- CONTINUED
440 Swissair AG........................ 434,826
1,890 Zurich Versicherun Bearer.......... 528,214
3,228,580
TAIWAN -- .2%
25,900 ROC Taiwan Fund.................... $ 278,425
THAILAND -- .7%
3,900 Advanced Information
Services Plc..................... 66,121
10,600 Bangkok Bank Public Co, Ltd........ 153,681
4,800 Dhana Siam Finance & Securities.... 29,662
3,200 Finance One Public Co Ltd.......... 18,254
23,800 IND Finance Thailand............... 94,278
1,900 Italian Thailand Development....... 20,405
3,300 Krung Thailand Bank Plc............ 16,210
4,600 National Finance & Secs............ 21,137
7,100 One Holding Co Ltd................. 19,939
2,000 PTT Explortn & Prd................. 27,570
800 Shinawatra Computer Co. Plc........ 19,141
700 Siam Cement Public Co. Ltd......... 32,886
9,100 Telecomasia........................ 25,053
19,800 Thailand Capital Fund, Inc......... 297,000
8,000 Thailand Farmers Bank Public Co.
Ltd.............................. 91,901
1,400 UTD Communications................. 19,521
952,759
TURKEY -- .4%
338,400 Adana Cimento...................... 57,314
384,100 Akal Tekstil....................... 39,288
543,000 Akbank Turk Anonim Sirket.......... 64,196
385,000 Arcelik AS......................... 44,494
154,000 Bagfas Bandirma Gubre Fabrikalari
AS............................... 43,983
176,000 Brisa Bridgestone Sabanci
Lastik San....................... 65,462
86,000 Erciyas Biracilik Ve Malt.......... 60,547
93,600 Migros Turk Tas.................... 106,929
187,000 Netas Northern Elektric
Telekomunikasyon, AS............. 48,439
530,652
UNITED KINGDOM -- 6.9%
87,200 3I Group........................... 605,136
32,500 Anglian Water Plc.................. 283,268
51,800 Arjo Wiggins Appleton Plc.......... 142,308
18,300 British Airport Authority Plc...... 150,411
13,800 Barclays Bank Plc.................. 153,103
15,400 Bass British Plc................... 181,633
155,800 British Gas........................ 553,497
46,560 British Land Co., Plc.............. 302,433
24,100 British Petroleum Co., Plc......... 217,491
131,200 British Steel Plc.................. 392,040
46,400 British Telecommunications Plc..... 254,596
21,300 Commercial Union Plc............... 184,848
23,386 Granada Group...................... 289,905
15,800 HSBC Holdings Plc.................. 233,920
127,100 Ladbroke Group Plc................. 374,049
61,900 Land Securities Plc................ 609,868
33,529 Lloyds TSB Group Plc............... 160,755
28,000 MEPC Plc........................... 180,611
<CAPTION>
SHARES VALUE
<C> <S> <C>
UNITED KINGDOM -- CONTINUED
59,875 Pilkington Plc..................... $ 191,982
27,500 Royal Insurance Holdings Plc....... 150,271
58,000 Severn Trent Water Plc............. 521,677
44,600 Shell Transportation & Trading Co.,
Plc.............................. 588,468
28,900 Southern Water Plc................. 331,286
69,500 Thames Water Plc................... 598,434
65,500 United Utilities Plc............... 585,684
23,700 Whitbread Plc...................... 267,932
36,700 Yorkshire Water Plc................ 370,702
8,876,308
UNITED STATES -- .0%
100 Cepap AS........................... 5,041
TOTAL COMMON STOCKS
(COST $112,623,533).............. 123,363,931
PREFERRED STOCKS -- 2.5%
AUSTRALIA -- .6%
145,950 News Corp. Ltd..................... 750,960
AUSTRIA -- .9%
3,800 Bank Austria AG.................... 300,046
10,650 Creditanstalt-Bankverein........... 594,580
7,250Z Laenderbank Bank Austria AG........ 305,086
1,199,712
GERMANY -- .8%
4,370 Rheinmetall Berlin................. 510,961
2,130 Volkswagen AG...................... 541,231
1,052,192
ITALY -- .2%
18,100 Ifi Istit Finance Ind.............. 188,822
TOTAL PREFERRED STOCKS
(COST $3,073,200)................ 3,191,686
TOTAL LONG-TERM INVESTMENTS
(COST $115,696,733).............. 126,555,617
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C>
REPURCHASE AGREEMENT -- 1.5%
$1,895,000 State Street Bank & Trust Co.,
4.75% dated 4/30/96, due
5/1/96 -- Collateralized by
$1,910,000 U.S. Treasury Notes,
5.50%, due 3/31/97; value,
including accrued
interest -- $1,947,504
(COST $1,895,000)................ 1,895,000
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS -- (COST
$117,591,733).......... 99.4% 128,450,617
OTHER ASSETS AND
LIABILITIES -- NET..... .6 762,763
NET ASSETS................ 100.0% $129,213,380
</TABLE>
* Non-income producing securities
ADR -- American Depositary Receipts
GDR -- Global Depositary Receipts
See accompanying notes to financial statements.
41
<PAGE>
EVERGREEN INTERNATIONAL EQUITY FUND
(Photo of Flags INDUSTRY DIVERSIFICATION
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PERCENTAGE OF
NET ASSETS
<S> <C>
Aerospace & Defense........................................................................ 0.5%
Automotive Equipment & Manufacturing....................................................... 4.5%
Banks...................................................................................... 19.1%
Building, Construction & Furnishings....................................................... 4.2%
Business Equipment & Services.............................................................. 1.1%
Chemical & Agricultural Products........................................................... 3.1%
Consumer Products and Services............................................................. 1.9%
Diversified Companies...................................................................... 0.7%
Electrical Equipment & Services............................................................ 3.1%
Energy..................................................................................... 3.9%
Finance & Insurance........................................................................ 6.5%
Food & Beverage Products................................................................... 3.1%
Food Retailing & Distribution.............................................................. 0.2%
Forest Products & Paper.................................................................... 4.1%
Health Care Products & Services............................................................ 1.5%
Holding Companies.......................................................................... 2.7%
Industrial Commercial Goods & Services..................................................... 1.6%
Industrial Specialty Products.............................................................. 0.6%
Information Services & Technology.......................................................... 0.1%
Machinery -- Diversified................................................................... 2.1%
Manufacturing -- Distributing.............................................................. 1.2%
Metal Products & Services.................................................................. 2.5%
Mining..................................................................................... 0.2%
Multi-Industry............................................................................. 3.4%
Mutual Funds............................................................................... 1.0%
Leisure & Tourism.......................................................................... 1.3%
Office Equipment & Supplies................................................................ 0.7%
Paper & Packaging.......................................................................... 0.4%
Publishing, Broadcasting & Entertainment................................................... 1.7%
Real Estate................................................................................ 6.4%
Retailing & Wholesale...................................................................... 2.0%
Telecommunication Services & Equipment..................................................... 2.2%
Textile & Apparel.......................................................................... 0.5%
Tobacco.................................................................................... 0.7%
Transportation............................................................................. 2.5%
Utilities.................................................................................. 6.6%
Total Long Term Investments.......................................................... 97.9%
Short Term Investment...................................................................... 1.5%
Other Assets and Liabilities -- net........................................................ .6%
Net Assets........................................................................... 100.0%
</TABLE>
42
<PAGE>
EVERGREEN INTERNATIONAL EQUITY FUND
(Photo of Flags STATEMENT OF ASSETS AND LIABILITIES
appears here) APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (identified cost $117,591,733)........................................................... $128,450,617
Foreign currency at value (identified cost $1,407,578)........................................................ 1,393,809
Cash.......................................................................................................... 2,810
Dividends and interest receivable............................................................................. 677,858
Receivable for Fund shares sold............................................................................... 326,542
Receivable for investments sold............................................................................... 78,544
Unamortized organization expense and other assets............................................................. 40,556
Total assets............................................................................................ 130,970,736
LIABILITIES:
Payable for investments purchased............................................................................. 1,428,702
Accrued expenses.............................................................................................. 210,818
Payable for Fund shares repurchased........................................................................... 113,499
Distribution fee payable...................................................................................... 4,337
Total liabilities....................................................................................... 1,757,356
NET ASSETS....................................................................................................... $129,213,380
NET ASSETS CONSIST OF:
Paid-in capital............................................................................................... $117,487,390
Undistributed net investment income........................................................................... 587,104
Undistributed net realized gain on investment transactions.................................................... 300,755
Net unrealized appreciation of investments and foreign currencies............................................. 10,838,131
Net assets................................................................................................. $129,213,380
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($6,153,050(division sign)568,877 shares of beneficial interest outstanding)................... $ 10.82
Sales charge -- 4.75% of offering price....................................................................... .54
Maximum offering price.................................................................................. $ 11.36
Class B Shares ($13,011,829(division sign)1,205,209 shares of beneficial interest outstanding)................ $ 10.80
Class C Shares ($260,287(division sign)24,022 shares of beneficial interest outstanding)...................... $ 10.84
Class Y Shares ($109,788,214(division sign)10,131,138 shares of beneficial interest outstanding).............. $ 10.84
</TABLE>
See accompanying notes to financial statements.
43
<PAGE>
EVERGREEN INTERNATIONAL EQUITY FUND
(Photo of Flags STATEMENT OF OPERATIONS
appears here) SIX MONTHS ENDED APRIL 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $150,899)........................................ $ 1,169,791
Interest........................................................................................ 18,623
Total investment income................................................................... 1,188,414
EXPENSES:
Advisory fee.................................................................................... $ 364,025
Administrative personnel and service fees....................................................... 23,322
Distribution fee -- Class A Shares.............................................................. 5,815
Distribution fee -- Class B Shares.............................................................. 34,794
Distribution fee -- Class C Shares.............................................................. 781
Shareholder services fee -- Class B Shares...................................................... 11,598
Shareholder services fee -- Class C Shares...................................................... 260
Custodian fee................................................................................... 108,527
Registration and filing fees.................................................................... 69,437
Transfer agent fee.............................................................................. 57,611
Reports and notices to shareholders............................................................. 27,100
Professional fees............................................................................... 18,447
Insurance....................................................................................... 5,497
Trustees' fees and expenses..................................................................... 1,418
Miscellaneous................................................................................... 14,374
Total expenses............................................................................ 743,006
Less: Fee waivers............................................................................... (233,594)
Net expenses.............................................................................. 509,412
Net investment income.............................................................................. 679,002
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain on investment transactions.................................................... 557,191
Net realized loss on foreign currency transactions.............................................. (443)
Net change in unrealized appreciation of investments and foreign currencies..................... 10,559,411
Net gain on investments and foreign currencies..................................................... 11,116,159
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................................... $11,795,161
</TABLE>
See accompanying notes to financial statements.
44
<PAGE>
(Photo of Flags EVERGREEN INTERNATIONAL EQUITY FUND
appears here) STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS
ENDED TEN MONTHS
APRIL 30, 1996 ENDED
(UNAUDITED) OCTOBER 31, 1995
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income.................................................................... $ 679,002 $ 524,164
Net realized gain (loss) on investment transactions...................................... 557,191 (255,993)
Net realized gain (loss) on foreign currency transactions................................ (443) 107,669
Net change in unrealized appreciation (depreciation) of investments and foreign
currencies............................................................................. 10,559,411 (462,577)
Net increase (decrease) in net assets resulting from operations....................... 11,795,161 (86,737)
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares........................................................................... (39,833) (3,090)
Class B Shares........................................................................... (23,525) --
Class C Shares........................................................................... (60) --
Class Y Shares........................................................................... (645,172) (30,566)
Total distributions to shareholders from net investment income........................ (708,590) (33,656)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold................................................................ 32,374,078 33,765,660
Proceeds from shares issued from acquisition of FFB Diversified International Growth
Fund................................................................................... 29,658,717 --
Proceeds from reinvestment of distributions.............................................. 365,799 19,562
Payment for shares redeemed.............................................................. (4,914,337) (5,161,804)
Net increase resulting from Fund share transactions................................... 57,484,257 28,623,418
Net increase in net assets............................................................ 68,570,828 28,503,025
NET ASSETS:
Beginning of period...................................................................... 60,642,552 32,139,527
End of period (including undistributed net investment income of $587,104 and $616,692,
respectively).......................................................................... $ 129,213,380 $ 60,642,552
</TABLE>
See accompanying notes to financial statements.
45
<PAGE>
(Photo of Flags EVERGREEN INTERNATIONAL EQUITY FUND
appears here) FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SEPTEMBER 2,
SIX MONTHS TEN MONTHS 1994* SIX MONTHS TEN MONTHS
ENDED ENDED THROUGH ENDED ENDED
APRIL 30, 1996 OCTOBER 31, DECEMBER 31, APRIL 30, 1996 OCTOBER 31,
(UNAUDITED) 1995# 1994 (UNAUDITED) 1995#
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period........ $9.58 $9.50 $10.00 $9.53 $9.50
Income (loss) from investment operations:
Net investment income..................... .04 .09 .02 .01 .06
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ 1.30 -- (.52 ) 1.29 (.03 )
Total from investment operations........ 1.34 .09 (.50 ) 1.30 .03
Less distributions to shareholders from
net investment income..................... (.10 ) (.01 ) -- (.03 ) --
Net asset value, end of period.............. $10.82 $9.58 $9.50 $10.80 $9.53
TOTAL RETURN+............................... 14.0% 1.1% (5.1% ) 13.7% .5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)... $6,153 $3,594 $2,545 $13,012 $7,278
Ratios to average net assets:
Expenses++**.............................. 1.24% 1.19% 1.26% 1.99% 1.94%
Net investment income++**................. 1.35% 1.38% .91% .61% .66%
Portfolio turnover rate..................... 33% 4% 1% 33% 4%
Average commission rate paid................ $ .0105 N/A N/A $.0105 N/A
<CAPTION>
SEPTEMBER 2,
1994*
THROUGH
DECEMBER 31,
1994
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period........ $10.00
Income (loss) from investment operations:
Net investment income..................... --
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ (.50 )
Total from investment operations........ (.50 )
Less distributions to shareholders from
net investment income..................... --
Net asset value, end of period.............. $9.50
TOTAL RETURN+............................... (5.2% )
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)... $5,602
Ratios to average net assets:
Expenses++**.............................. 2.02%
Net investment income++**................. .10%
Portfolio turnover rate..................... 1%
Average commission rate paid................ N/A
</TABLE>
* Commencement of operations.
# The Fund changed its year end from December 31 to October 31.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sales charge or contingent deferred
sales charge is not reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were assumed or waived by the investment adviser, the annualized ratios
of expenses and net investment income (loss) to average net assets, exclusive
of any applicable state expense limitations, would have been the following:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SEPTEMBER 2,
SIX MONTHS TEN MONTHS 1994* SIX MONTHS TEN MONTHS
ENDED ENDED THROUGH ENDED ENDED
APRIL 30, 1996 OCTOBER 31, DECEMBER 31, APRIL 30, 1996 OCTOBER 31,
(UNAUDITED) 1995# 1994 (UNAUDITED) 1995#
<S> <C> <C> <C> <C> <C>
Expenses................................... 1.74% 1.84% 2.09% 2.49% 2.59%
Net investment income (loss)............... .85% .73% .08% .11% .01%
<CAPTION>
SEPTEMBER 2,
1994*
THROUGH
DECEMBER 31,
1994
<S> <C>
Expenses................................... 2.85%
Net investment income (loss)............... (.73%)
</TABLE>
See accompanying notes to financial statements.
46
<PAGE>
(Photo of Flags EVERGREEN INTERNATIONAL EQUITY FUND
appears here) FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS C SHARES CLASS Y SHARES
SEPTEMBER 2,
SIX MONTHS TEN MONTHS 1994* SIX MONTHS TEN MONTHS
ENDED ENDED THROUGH ENDED ENDED
APRIL 30, 1996 OCTOBER 31, DECEMBER 31, APRIL 30, 1996 OCTOBER 31,
(UNAUDITED) 1995# 1994 (UNAUDITED) 1995#
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period........ $ 9.53 $ 9.49 $10.00 $ 9.60 $ 9.50
Income (loss) from investment operations:
Net investment income..................... .02 .08 .03 .06 .08
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ 1.29 (.04) (.54) 1.30 .03
Total from investment operations........ 1.31 .04 (.51) 1.36 .11
Less distributions to shareholders from
net investment income..................... .00++ -- -- (.12) (.01)
Net asset value, end of period.............. $10.84 $9.53 $9.49 $10.84 $9.60
TOTAL RETURN+............................... 13.8% .5% (5.2% ) 14.2% 1.3%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)... $260 $196 $163 $109,788 $49,575
Ratios to average net assets:
Expenses++**.............................. 1.99% 1.94% 2.01% .98% .94%
Net investment income++**................. .68% .79% .85% 1.57% 1.58%
Portfolio turnover rate..................... 33% 4% 1% 33% 4%
Average commission rate paid................ $ .0105 N/A N/A $.0105 N/A
<CAPTION>
SEPTEMBER 2,
1994*
THROUGH
DECEMBER 31,
1994
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period........ $ 10.00
Income (loss) from investment operations:
Net investment income..................... .02
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ (.51)
Total from investment operations........ (.49)
Less distributions to shareholders from
net investment income..................... (.01)
Net asset value, end of period.............. $9.50
TOTAL RETURN+............................... (5.0% )
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)... $23,830
Ratios to average net assets:
Expenses++**.............................. 1.06%
Net investment income++**................. 1.03%
Portfolio turnover rate..................... 1%
Average commission rate paid................ N/A
</TABLE>
* Commencement of operations.
# The Fund changed its year end from December 31 to October 31.
++ Less than one cent per share.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Contingent deferred sales charge is not
reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were assumed or waived by the investment adviser, the annualized ratios
of expenses and net investment income to average net assets, exclusive of any
applicable state expense limitations, would have been the following:
<TABLE>
<CAPTION>
CLASS C SHARES CLASS Y SHARES
SEPTEMBER 2,
SIX MONTHS TEN MONTHS 1994* SIX MONTHS TEN MONTHS
ENDED ENDED THROUGH ENDED ENDED
APRIL 30, 1996 OCTOBER 31, DECEMBER 31, APRIL 30, 1996 OCTOBER 31,
(UNAUDITED) 1995# 1994 (UNAUDITED) 1995#
<S> <C> <C> <C> <C> <C>
Expenses................................... 2.49% 2.59% 2.84% 1.48% 1.59%
Net investment income...................... .18% .14% .02% 1.07% .93%
<CAPTION>
SEPTEMBER 2,
1994*
THROUGH
DECEMBER 31,
1994
<S> <C>
Expenses................................... 1.89%
Net investment income...................... .20%
</TABLE>
47
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- ORGANIZATION AND NATURE OF OPERATIONS
The Evergreen International Global/Growth Funds (the "Funds") are separate
series of open-end management companies registered under the Investment Company
Act of 1940, as amended (the "Act"). The Funds consist of Evergreen Emerging
Markets Growth Fund ("Emerging Markets"), Evergreen Global Leaders Fund ("Global
Leaders"), Evergreen Global Real Estate Equity Fund ("Global Real Estate"), and
Evergreen International Equity Fund ("International"), collectively referred to
as the "Funds".
Emerging Market's investment objective is long-term appreciation through
investment in equity securities of issuers located in emerging markets. Global
Leaders' investment objective is to provide long-term capital growth by
investing in a diversified portfolio of U.S. and non-U.S. equity securities of
companies located in the world's major industrialized countries. Global Real
Estate's investment objective is long-term capital growth through investment
primarily in equity securities of domestic and foreign companies which are
principally engaged in the real estate industry or which own significant real
estate assets. International's investment objective is long-term capital
appreciation through investment in equity securities of non-U.S. issuers.
Effective January 1, 1996, First Fidelity Bancorporation ("First Fidelity")
merged with First Union National Bank of North Carolina ("First Union").
Effective at the close of business on January 19, 1996, International acquired
substantially all of the net assets of FFB Diversified International Growth
Fund, an open-end management company registered under the Act, valued at
$29,658,717. The net assets were exchanged through a non-taxable transaction for
2,898,154 Class Y shares of International valued at $10.23 per share. The
acquired net assets consisted primarily of portfolio securities with unrealized
appreciation of $1,835,426. The aggregate net assets of International after the
acquisition were $104,471,175.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements. These policies are
in conformity with generally accepted accounting principles.
SECURITY VALUATIONS -- Portfolio securities that are listed on a securities
exchange are valued at the last quoted sales price taken from the exchange where
the security is primarily traded. Securities listed on an exchange that are not
traded on the valuation date are valued at the mean between the bid and asked
price. Unlisted securities for which market quotations are readily available are
valued at a price quoted by one or more brokers. Other securities for which no
quotations are readily available are valued at fair value as determined in good
faith by the Trustees. Short-term obligations are stated at amortized cost which
approximates market value.
SECURITY TRANSACTIONS -- Security transactions are accounted for on the
date purchased or sold. Net realized gains or losses are determined on the
identified cost basis.
FOREIGN CURRENCY TRANSLATION -- The Funds' accounting records are
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies are translated daily into U.S. dollars at the prevailing exchange
rates. Purchases and sales of securities and income and expenses are translated
into U.S. dollars at the prevailing rates on the dates of such transactions. The
effect of changes in foreign exchange rates on realized and unrealized security
gains and losses are reflected as a component of such gains and losses.
FORWARD FOREIGN CURRENCY CONTRACTS -- The Funds may enter into forward
foreign currency contracts for the purchase or sale of a specific foreign
currency at a fixed price on a future date in order to hedge its exposure to
changes in foreign currency exchange rates. Forward currency contracts are
revalued daily at the prevailing rates of contracts of the same maturity. Gains
and losses on forward currency contracts are reported as realized or unrealized
losses on foreign currency transactions. Risks may arise upon entering into
these contracts from the potential inability of the counterparties to meet the
terms of their contracts and from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar.
48
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES -- continued
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the Federal Reserve Bank and are designated as being held
on the Funds' behalf by its custodian under a book-entry system. The Funds
monitor the adequacy of the collateral on a daily basis, and can require the
seller to provide additional collateral in the event the market value of the
securities pledged falls below the carrying value of the repurchase agreement,
including accrued interest. The Funds will only enter into repurchase agreements
with banks and other financial institutions which are deemed by the Funds'
investment adviser to be creditworthy pursuant to guidelines established by the
Trustees.
INVESTMENT INCOME AND EXPENSES -- Dividend income is recorded on the
ex-dividend date. Interest income and expenses are accrued daily.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income
and from net capital gains on investments for the Funds are declared and paid
annually or more frequently as required. Income distributions and capital gain
distributions are determined in accordance with income tax regulations, which
may differ from the amounts available under generally accepted accounting
principles. To the extent these differences are permanent in nature, such
amounts are reclassified within the components of net assets.
INCOME TAXES -- It is each Fund's policy to meet the requirements of the
Internal Revenue Code (the "Code") applicable to regulated investment companies
and to distribute substantially all of its taxable net income to its
shareholders. Accordingly, no provisions for federal income or excise taxes are
necessary. To the extent that realized capital gains can be offset by capital
loss carryforwards, it is the Funds' policy not to distribute such gains. As of
October 31, 1995, each fund's most recent fiscal year end, Emerging Markets,
Global Real Estate and International had capital loss carryforwards of
$1,695,776, $7,373,102 and $255,531, respectively. Pursuant to the Code, these
capital losses carryforwards will expire as follows:
<TABLE>
<CAPTION>
2002 2003
<S> <C> <C>
Emerging Markets $69,824 $1,625,952
Global Real Estate -- 7,373,102
International -- 255,531
</TABLE>
WHEN ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Funds record
when-issued or delayed delivery transactions on the trade date and maintain
security positions such that sufficient liquid assets will be available to make
payment for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are marked to market daily and begin earning interest on
the settlement date.
DEFERRED ORGANIZATIONAL EXPENSES -- The costs incurred by Emerging Markets,
Global Leaders and International with respect to their organization have been
deferred and are being amortized using the straight-line method not to exceed a
period of five years from each Fund's commencement.
ALLOCATION OF EXPENSES -- Expenses specifically identifiable to a class of
shares are charged to that class. Expenses common to the Trust as a whole are
allocated to the funds in that Trust. Investment income, net of expenses (other
than class specific expenses) and realized and unrealized gains and losses are
allocated daily to each class of shares based upon the relative proportion of
net assets of each class.
REAL ESTATE INVESTMENT TRUSTS -- Global Real Estate owns shares of real
estate investment trusts which report information on the source of their
distributions annually. A portion of their distributions received during the
year is estimated to be a return of capital and is recorded as a reduction of
their cost.
USE OF ESTIMATES -- The preparation of the financial statements is in
accordance with generally accepted accounting principles which requires
management to make estimates and assumptions that affect the reported amounts
and disclosures. Actual results could differ from those estimates.
49
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 3 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT -- First Union is Emerging Markets' and
International's investment adviser, and is entitled to a fee based on a
percentage of each Fund's average daily net assets as shown in the table below.
For Emerging Markets and International, First Union voluntary waived $124,566
and $229,311 respectively, of its advisory fee for the six-month period ended
April 30, 1996. In addition, First Union voluntarily reimbursed $60,630 in
operating expenses for Emerging Markets for the six-month period ended April 30,
1996. First Union can modify or terminate this voluntary waiver at any time.
<TABLE>
<CAPTION>
AVERAGE DAILY
ADVISORY FEE NET ASSETS
<S> <C> <C>
EMERGING MARKETS
1.50% on the first $100 million
1.45% on the next $100 million
1.40% on the next $100 million
1.35% in excess of $300 million
</TABLE>
<TABLE>
<CAPTION>
AVERAGE DAILY
ADVISORY FEE NET ASSETS
<S> <C> <C>
INTERNATIONAL
0.82% on the first $20 million
0.79% on the next $30 million
0.76% on the next $50 million
0.73% in excess of $100 million
</TABLE>
Under terms of a sub-advisory agreement between First Union and Marvin &
Palmer Associates, Inc., Marvin & Palmer Associates, Inc. is entitled to the
following annual fee from First Union based on Emerging Markets' average daily
net assets:
<TABLE>
<CAPTION>
AVERAGE DAILY
ADVISORY FEE NET ASSETS
<S> <C> <C>
1.00% on the first $100 million
0.95% on the next $100 million
0.90% on the next $100 million
0.85% in excess of $300 million
</TABLE>
Under terms of a sub-advisory agreement between First Union and Boston
International Advisors, Inc., Boston International Advisors, Inc. is entitled to
the following annual fee from First Union based on International's average daily
net assets:
<TABLE>
<CAPTION>
AVERAGE DAILY
SUB-ADVISORY FEE NET ASSETS
<S> <C>
0.32% on the first $20 million
0.29% on the next $30 million
0.26% on the next $50 million
0.23% in excess of $100 million
</TABLE>
Pursuant to an agreement with Global Leaders' and Global Real Estate's
investment adviser, Evergreen Asset Management Corp. ("Evergreen Asset"), a
wholly owned subsidiary of First Union, is entitled to an annual fee of .95% and
1% of Global Leaders' and Global Real Estate's average daily net assets,
respectively.
Evergreen Asset has agreed to reimburse Global Leaders to the extent that
the Fund's operating expenses (including the investment advisory fee and
amortization of organization expenses but excluding interest, taxes, brokerage
commissions, 12b-1 distribution and shareholder servicing fees and extraordinary
expense) exceed 1.50% of its average daily net assets for the forseeable future.
For the six-month period ended April 30, 1996, Evergreen Asset waived all of its
advisory fee and
50
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 3 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH
AFFILIATES -- continued
reimbursed $31,031 in expenses under this limitation. In addition, Evergreen
Asset voluntarily waived $9,154 of its advisory fee and reimbursed $36,428 in
expenses for Global Real Estate. Evergreen Asset may revise or cease these
voluntary expense waivers and expense reimbursements at any time.
Lieber & Company, an affiliate of First Union, is the investment
sub-adviser to Global Leaders and Global Real Estate and also provides brokerage
services with respect to substantially all security transactions executed on the
New York or American Stock Exchanges. For transactions executed during the
six-month period ended April 30, 1996, Global Leaders and Global Real Estate
incurred brokerage commissions of $6,990 and $21,971, respectively, with Lieber
& Company. Lieber & Company is reimbursed by Evergreen Asset at no additional
expense to the funds for its cost of providing investment advisory services.
ADMINISTRATIVE AGREEMENT -- Evergreen Asset furnishes Global Real Estate
with administrative services as part of its advisory agreement and accordingly,
Global Real Estate does not pay a separate administration fee. Furman Selz LLC
("Furman Selz") is the Fund's sub-administrator. As sub-administrator, Furman
Selz provides the officers of the Funds. For Global Real Estate, Furman Selz'
fee is paid by Evergreen Asset and is not a fund expense.
Evergreen Asset is also Emerging Markets', Global Leaders' and
International's administrator and Furman Selz is sub-administrator. Evergreen
Asset's and Furman Selz' fees for these funds are based on the average daily net
assets of all of the funds administered by Evergreen Asset for which either
First Union or Evergreen Asset is also the investment adviser. These fees are
calculated at the following annual rates:
<TABLE>
<CAPTION>
AVERAGE DAILY
ADMINISTRATION FEE NET ASSETS
<S> <C>
0.050% on the first $7 billion
0.035% on the next $3 billion
0.030% on the next $5 billion
0.020% on the next $10 billion
0.015% on the next $5 billion
0.010% in excess of $30 billion
</TABLE>
<TABLE>
<CAPTION>
AVERAGE DAILY
SUB-ADMINISTRATION FEE NET ASSETS
<S> <C>
0.0100% on the first $7 billion
0.0075% on the next $3 billion
0.0050% on the next $15 billion
0.0040% in excess of $25 billion
</TABLE>
At April 30, 1996, assets for which Evergreen Asset was the administrator
for which either Evergreen Asset or First Union was the investment adviser
totaled approximately $14.7 billion.
Evergreen Asset voluntarily waived $3,591, $1,122 and $4,283 in
administration fees for Emerging Markets, Global Leaders and International,
respectively.
PLAN OF DISTRIBUTION AND SHAREHOLDER SERVICING -- The Funds have adopted
for each of their Class A, Class B and Class C shares, Distribution Plans (the
"Plans") pursuant to Rule 12b-1 under the Act. Under the terms of the Plans, the
Funds may incur distribution-related and shareholder servicing expenses which
may not exceed and annual fee of .75 of 1% for Class A shares and annual fee of
1% for Class B and Class C shares. For each of these Funds, the payments for
Class A shares were voluntarily limited to .25 of 1% of average daily net
assets.
51
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 3 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH
AFFILIATES -- continued
In connection with its Plan, Global Real Estate has entered into a
distribution agreement with Evergreen Funds Distributor, Inc. ("EFD"), a
subsidiary of Furman Selz, whereby Global Real Estate will compensate EFD for
its services at a rate which may not exceed an annual fee of .25 of 1% of Class
A shares average daily net assets and annual fee of 1% of Class B and Class C
shares average daily net assets. A portion of the payments of Class B and Class
C shares, up to .25 of 1% may constitute a shareholder services fee. In
connection with their Plans, Emerging Markets and International have entered
into a distribution agreement with EFD they will compensate EFD for its services
at a rate which may not exceed an annual fee of .25 of 1% of Class A shares
average daily net assets and annual fee of .75 of 1% of Class B and Class C
shares average daily net assets. EFD has entered into a shareholder services
agreement with First Union Brokerage ("FUBS"), an affiliate of First Union,
whereby they will compensate FUBS for certain services provided to shareholders
and or maintenance of shareholder accounts relating to the Funds Class B and
Class C Shares. As of April 30, 1996, Global Leaders did not offer Class A,
Class B or Class C shares and therefore, did not participate in the Plans.
SALES CHARGES -- EFD has advised the Funds that it has retained the
following amounts from front-end sales charges resulting from sales of Class A
shares during the six-month period ended April 30, 1996:
<TABLE>
<S> <C>
Emerging Markets $ 800
Global Real Estate 547
International 4,961
</TABLE>
NOTE 4 -- INVESTMENT TRANSACTIONS
The cost of purchases and proceeds from sales of investments, excluding
short-term securities, for the six-month period ended April 30, 1996 were as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
<S> <C> <C>
Emerging Markets $15,145,373 $ 7,303,641
Global Leaders 8,276,727 1,544,029
Global Real Estate 11,153,960 21,610,802
International 60,998,776 31,020,305
</TABLE>
On April 30, 1996, the composition of unrealized appreciation and
depreciation of investment securities based on the aggregate cost of investments
for federal tax purposes was as follows:
<TABLE>
<CAPTION>
FEDERAL TAX
APPRECIATION DEPRECIATION NET COST
<S> <C> <C> <C> <C>
Emerging Markets $2,933,210 $ 507,716 $ 2,425,494 $20,363,490
Global Leaders 562,294 90,208 472,086 7,426,782
Global Real Estate 9,815,960 5,783,668 4,082,292 54,493,037
International 13,474,408 2,615,986 10,858,422 117,592,195
</TABLE>
NOTE 5 -- SHARES OF BENEFICIAL INTEREST
Emerging Markets and International have an unlimited number of $0.0001 par
value shares of beneficial interest authorized. Global Leaders and Global Real
Estate have an unlimited number of $0.001 par value shares authorized. The
shares of Emerging Markets, Global Real Estate and International are divided
into four classes which are designated Class A, Class B, Class C and Class Y
shares. Class A shares are offered with a front-end sales charge of up to 4.75%.
Class B shares are offered with a contingent deferred sales charge payable when
shares are redeemed which declines from 5% to zero depending on the period of
time the shares were held (after which they will convert to Class A shares).
Class C shares are offered with a 1% contingent deferred sales charge on shares
redeemed within the first year of purchase. Class Y shares are sold without a
sales charge and are available only to investment advisory clients of the
Adviser and its affiliates, institutional investors or
52
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 5 -- SHARES OF BENEFICIAL INTEREST -- continued
Class Y shareholders of record of certain other funds managed by the Adviser and
its affiliates as of December 30, 1994. All classes have identical voting,
dividend, liquidation and other rights, except that certain classes bear
different distribution expenses (see Note 3) and have exclusive voting rights
with respect to their distribution plan. As of April 30, 1995 Global Leaders
offered only Class Y shares, which were open to all shareholders (see Note 7).
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1996 TEN MONTHS ENDED
(UNAUDITED) OCTOBER 31, 1995
EMERGING MARKETS SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
CLASS A
Shares sold............................................................... 74,102 $ 650,480 64,702 $ 496,478
Shares issued on reinvestment of distributions............................ 817 6,713 -- --
Shares redeemed........................................................... (21,922) (186,203) (29,531) (228,199)
Net increase...................................................... 52,997 470,990 35,171 268,279
CLASS B
Shares sold............................................................... 68,532 600,952 95,843 737,910
Shares redeemed........................................................... (19,376) (160,829) (43,408) (335,151)
Net increase...................................................... 49,156 440,123 52,435 402,759
CLASS C
Shares sold............................................................... 2,082 18,532 5,116 41,284
Shares redeemed........................................................... (2,070) (16,637) (8,933) (64,678)
Net increase (decrease)........................................... 12 1,895 (3,817) (23,394)
CLASS Y
Shares sold............................................................... 984,033 8,687,600 566,623 4,319,138
Shares issued on reinvestment of distributions............................ 1,942 15,980 -- --
Shares redeemed........................................................... (158,472) (1,382,853) (105,109) (816,292)
Net increase...................................................... 827,503 7,320,727 461,514 3,502,846
Total net increase resulting from Fund share
transactions............................................................ 929,668 $8,233,735 545,303 $ 4,150,490
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1996
(UNAUDITED)
GLOBAL LEADERS SHARES AMOUNT
<S> <C> <C>
CLASS Y
Shares sold............................................................................................. 705,503 $7,260,977
Shares issued on reinvestment of distributions.......................................................... 1,378 14,211
Shares redeemed......................................................................................... (36,909) (383,259)
Net increase resulting from Fund share transactions............................................. 669,972 $6,891,929
</TABLE>
53
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 5 -- SHARES OF BENEFICIAL INTEREST -- continued
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1996 ONE MONTH ENDED
(UNAUDITED) OCTOBER 31, 1995
GLOBAL REAL ESTATE SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
CLASS A
Shares sold............................................................ 153,570 $ 1,928,949 956 $ 11,527
Shares redeemed........................................................ (16,804) (212,967) -- --
Net increase........................................................... 136,766 1,715,982 956 11,527
CLASS B
Shares sold............................................................ 2,596 32,269 197 2,360
Shares redeemed........................................................ (4,226) (51,194) (2,136) (25,616)
Net decrease........................................................... (1,630) (18,925) (1,939) (23,256)
CLASS C
Shares sold............................................................ 367 4,498 -- --
Shares redeemed........................................................ -- -- (248) (2,941)
Net increase (decrease)................................................ 367 4,498 (248) (2,941)
CLASS Y
Shares sold............................................................ 700,880 8,591,743 52,172 626,578
Shares redeemed........................................................ (1,586,829) (19,406,475) (329,743) (3,928,556)
Net decrease........................................................... (885,949) (10,814,732) (277,571) (3,301,978)
Total net decrease resulting from Fund share transactions.............. (750,446) $ (9,113,177) (278,802) $(3,316,648)
</TABLE>
54
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 5 -- SHARES OF BENEFICIAL INTEREST -- continued
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1996 TEN MONTHS ENDED
(UNAUDITED) OCTOBER 31, 1995
INTERNATIONAL SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
CLASS A
Shares sold............................................................ 240,234 $ 2,465,225 178,686 $ 1,741,458
Shares issued on reinvestment of distributions......................... 3,882 39,171 314 3,081
Shares redeemed........................................................ (50,336) (515,585) (71,833) (698,595)
Net increase........................................................... 193,780 1,988,811 107,167 1,045,944
CLASS B
Shares sold............................................................ 520,369 5,366,386 339,054 3,280,684
Shares issued on reinvestment of distributions......................... 2,297 23,175 180 1,652
Shares redeemed........................................................ (81,452) (829,048) (165,193) (1,606,194)
Net increase........................................................... 441,214 4,560,513 174,041 1,676,142
CLASS C
Shares sold............................................................ 7,554 78,107 12,504 116,208
Shares issued on reinvestment of distributions......................... 6 56 -- --
Shares redeemed........................................................ (4,072) (41,979) (9,102) (89,151)
Net increase........................................................... 3,488 36,184 3,402 27,057
CLASS Y
Shares sold............................................................ 2,380,468 24,464,360 2,935,478 28,627,310
Shares issued from acquisition of FFB Diversified International Growth
Fund................................................................. 2,898,154 29,658,717 -- --
Shares issued on reinvestment of distributions......................... 30,069 303,397 1,510 14,829
Shares redeemed........................................................ (341,200) (3,527,725) (282,738) (2,767,864)
Net increase........................................................... 4,967,491 50,898,749 2,654,250 25,874,275
Total net increase resulting from Fund share transactions.............. 5,605,973 $57,484,257 2,938,860 $28,623,418
</TABLE>
NOTE 6 -- FINANCING AGREEMENT
Global Real Estate has a financing agreement with its custodian, State
Street Bank and Trust Company (the "Bank"), which provides the Fund with a line
of credit, in the aggregate amount of the lesser of $5,000,000 or 5% of the
value of the Fund's net assets, to be accessed for temporary or emergency
purposes. Borrowings under the line of credit bear interest at 1% above the
Bank's cost of funds as set periodically by the Bank and are secured by
securities pledged by the Fund. During the period ended April 30, 1996, the Fund
had borrowings outstanding for 90 days under the line of credit and incurred
interest charges amounting to $8,709. The Funds average debt outstanding during
the period aggregated $536,111 at a weighted average interest rate of 6.50%. The
Fund had no outstanding borrowings at April 30, 1996.
NOTE 7 -- SUBSEQUENT EVENTS
On June 3, 1996, Class A, Class B and Class C of Global Leaders commenced
operations with a net asset value of $11.29 per share.
55
<PAGE>
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56
<PAGE>
TRUSTEES AND OFFICERS
TRUSTEES:
Laurence B. Ashkin*
Foster Bam*
James S. Howell, Chairman
Robert J. Jeffries*
Gerald M. McDonnell
Thomas L. McVerry
William W. Pettit
Russell A. Salton, III M.D.
Michael S. Scofield
OFFICERS:
John J. Pileggi
President and Treasurer
Joan V. Fiore
Secretary
Sheryl Hirschfeld
Assistant Secretary
Donald E. Brostrom
Assistant Treasurer
Stephen W. St. Clair
Assistant Treasurer
* These individuals are not Trustees for Emerging
Markets or International.
