<PAGE> 1
NATIONS
FUND
FIXED
INCOME
FUNDS
Semi-Annual Report For The Period Ended September 30, 1996
[NATIONS FUND LOGO]
<PAGE> 2
<TABLE>
<S> <C>
NOT MAY LOSE VALUE
FDIC-
INSURED NO BANK GUARANTEE
</TABLE>
NATIONS FUND DISTRIBUTOR: STEPHENS INC. STEPHENS, INC., WHICH IS NOT AFFILIATED
WITH NATIONSBANK, N.A., IS NOT A BANK AND SECURITIES OFFERED BY IT ARE NOT
GUARANTEED BY ANY BANK OR INSURED BY THE FDIC. STEPHENS INC., MEMBER NYSE-SIPC.
NATIONS FUND INVESTMENT ADVISER: NATIONSBANC ADVISORS, INC.
NATIONS FUND INVESTMENT SUB-ADVISERS: TRADESTREET INVESTMENT ASSOCIATES, INC.
AND GARTMORE GLOBAL PARTNERS.
<PAGE> 3
NATIONS FUND
DEAR SHAREHOLDER:
Financial assets, particularly U.S. equity securities, have continued to produce
solid returns through the first nine months of 1996. As we anticipated six
months ago, the returns have been less spectacular than in 1995 and have been
accompanied by greater volatility. After selling off sharply in the first part
of the year, taxable bonds have traded in a broad range for the past six months.
Meanwhile, municipal securities have enjoyed better total returns than their
taxable counterparts. International equity securities have produced positive
returns, although these equities have generally lagged their domestic
counterparts.
Throughout the current year, investors have had no lack of issues to worry about
- -- the level of economic activity, Federal Reserve Board (the "Fed") policies,
corporate profits, inflation and domestic politics. Despite the periodic
worries, none of these issues have manifested themselves into overwhelming
problems. The economy has neither accelerated at an unacceptable pace, nor
fallen into recession. The Fed's policies have been steady. Corporate profits
have not achieved 1995's strong gains, but have increased at a reasonable pace.
Inflation remains tame, despite strong job growth and low unemployment.
Moreover, the political season has done little to unsettle the markets. Despite
the election year, Congress produced a timely and sensible budget for fiscal
year 1997.
Outside the U.S. there is much less concern about economies overheating. In both
Europe and Japan, the focus has been on stimulating economic growth and, to this
end, governments have been following loose monetary policies. Provided earnings
continue their strong recovery in these regions, the environment for foreign
equity securities looks very encouraging. Pacific Rim economies have slowed this
year from the exceptionally strong growth over the past few years. Although the
region's slower growth in exports along with tighter monetary policies have had
a negative impact on certain markets, they also have reduced the overheating
inflationary problems which occurred across the region as a result of the
exceptional growth.
Looking ahead, there are strong prospects for a return to higher growth in Asia
next year as central banks begin to ease monetary policies and economic activity
picks up outside Asia, particularly in Europe and Japan. Unlike in the U.S.,
bond yields have actually fallen in many overseas markets and equity valuations
remain generally low in relation to bonds.
The final months of 1996 and the early part of 1997 are unlikely to bring
closure to any of the issues described above. Investors will continue to be edgy
about the prospects for the U.S. economy, inflation and profits. Moreover, we
will continue to hear strong opinions expressed on the future course of the Fed,
and the political landscape after the election. Despite all the worries and
rhetoric, we think the pattern of the last several years will continue to hold
true. Investor apprehension will, from time to time, lead to market volatility.
However, moderate economic growth, stable inflation and modest profits should,
in our view, produce a reasonable investment environment as we move into the new
year.
Sincerely,
/s/ A. MAX WALKER
- ----------------------
A. Max Walker
President and Chairman
of the Board
September 30, 1996
1
<PAGE> 4
THE NATIONS FUND ADVANTAGE
A family of mutual funds provides investors with a number of advantages,
including the ability to shift investment assets among funds as their financial
objectives change. The Nations Fund family of mutual funds includes a broad
array of professionally managed domestic and international stock, bond and money
market funds advised by NationsBanc Advisors, Inc. The family is designed to
accommodate a wide variety of investment objectives across the risk/reward
spectrum.
[CHART] Risk/Return Spectrum*
For specific information on developing an investment portfolio that will more
closely target your investment objectives, contact your investment
representative or Nations Fund for fund brochures and prospectuses at (800)
982-2271.
- ---------------
* The Nations Fund family includes Nations Equity Index Fund, which seeks
investment results that correspond, before fees and expenses, to the total
return of the S&P 500 Index, and Nations Managed Index Fund, which seeks, over
the long-term to provide a total return which (gross of fees and expenses)
exceeds the total return of the S&P 500.
2
<PAGE> 5
NATIONS FUND
Nations Short-Term Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
ASSET-BACKED SECURITIES -- 17.2%
$ 3,150,000 Banc One Credit Card Master
Trust, Series 1994-C, Class A,
7.800% 11/15/98................ $ 3,237,601
5,000,000 Discover Card Master Trust,
Series 1995-2, Class A,
6.550% 02/15/03................ 4,967,150
2,257,740 First Bank Automobile Receivables
Grantor Trust, Series 1995-A,
8.000% 01/15/00................ 2,285,256
1,568,996 Ford Credit Auto Lease Trust,
Series 1995-1, Class A2,
6.350% 10/15/98................ 1,571,931
Olympic Automobile Receivables
Trust:
3,536,315 Series 1995-B, Class A2,
7.350% 10/15/01................ 3,575,002
2,680,898 Series 1995-C, Class A2,
6.200% 06/15/14................ 2,678,385
Prime Credit Card Master Trust:
2,250,000 Series 1, Class B1,
7.550% 02/15/01................ 2,277,405
2,300,000 Series 1992-2, Class B2,
7.950% 11/15/02................ 2,358,213
6,000,000 Standard Credit Card Master
Trust, Series 1995-3, Class A,
7.850% 02/07/02................ 6,191,220
12,000,000 Time Warner Master Trust, 7.290%
06/22/98**+.................... 5,078,280
--------------
TOTAL ASSET-BACKED SECURITIES
(Cost $34,178,030)............. 34,220,443
==============
CORPORATE NOTES -- 61.6%
BANKING -- 11.6%
6,000,000 Advanta National Bank, MTN,
6.090% 11/10/97................ 5,960,880
4,000,000 Ahmanson (H.F.) & Company, Sub.
Notes,
9.875% 11/15/99................ 4,339,480
4,000,000 Capital One Bank, MTN,
6.875% 04/24/00................ 3,974,760
3,500,000 Chemical Bank (N.Y.) Corporation,
9.750% 06/15/99................ 3,754,905
5,000,000 First USA Bank, Bank Notes,
8.200% 02/15/98................ 5,103,550
--------------
23,133,575
--------------
BROKERAGE -- 2.5%
5,000,000 Paine Webber Group Inc., Sr.
Notes, 6.250% 06/15/98......... 4,963,800
==============
CAPTIVE FINANCE -- 10.1%
5,750,000 AT&T Capital Corporation, MTN,
5.650% 01/15/99................ 5,634,770
4,250,000 Ford Motor Credit Corporation,
MTN, 6.050% 03/31/98........... 4,238,440
7,000,000 General Motors Acceptance
Corporation, MTN,
7.500% 03/16/98................ 7,122,290
3,000,000 Textron Financial Corporation,
MTN, 7.380% 08/30/98**......... 3,043,590
--------------
20,039,090
==============
FINANCIAL -- 23.2%
$ 4,500,000 Associates Corporation N.A.,
Notes, 6.625% 05/15/98......... $ 4,513,005
5,100,000 Banponce Financial Corporation,
MTN,
6.560% 04/22/99................ 5,080,926
3,000,000 Chrysler Financial Corporation,
MTN,
5.990% 11/17/97................ 2,988,000
3,550,000 Finova Capital Corporation,
Notes, 6.380% 04/15/99......... 3,530,794
2,500,000 GATX Capital Corporation, Notes,
6.110% 05/07/98................ 2,491,350
3,150,000 Goldman Sachs Group, MTN, 9.140%
12/01/97**..................... 3,258,789
2,500,000 Heller Financial, Inc., Notes,
9.375% 03/15/98................ 2,598,200
Lehman Brother Holdings Inc.,
Notes:
1,000,000 5.750% 02/15/98.................. 989,640
4,000,000 6.625% 11/15/00.................. 3,937,120
5,000,000 Merrill Lynch & Company, MTN,
6.140% 03/29/99................ 4,952,900
2,000,000 Norwest Financial Inc., Sr.
Notes, 8.375% 01/15/00......... 2,073,920
3,000,000 NYNEX, MTN,
6.720% 06/15/98**.............. 3,016,740
4,500,000 Salomon Inc., MTN,
9.000% 02/15/99................ 4,720,050
2,000,000 Smith Barney Holdings, Inc.,
Notes, 5.625% 11/15/98......... 1,963,740
--------------
46,115,174
==============
INDEPENDENT FINANCE -- 1.2%
2,500,000 North American Mortgage Company,
MTN,
5.800% 11/02/98................ 2,451,600
--------------
INDUSTRIAL -- 10.8%
3,500,000 Comdisco, Inc., MTN,
6.120% 10/27/97................ 3,501,365
5,250,000 duPont (E.I.) de Nemours, Notes,
6.380% 11/13/97................ 5,268,900
4,100,000 McDonnell Douglas Corporation,
Notes,
6.550% 09/17/98................ 4,110,947
3,000,000 TCI Communications, Inc., Notes,
6.820% 09/15/10................ 2,990,310
1,500,000 Tele-Communications Inc., MTN,
6.430% 03/09/98................ 1,496,130
4,000,000 Unocal Corporation, MTN,
8.810% 05/18/98................ 4,135,200
--------------
21,502,852
--------------
RETAIL -- 2.1%
Sears, Roebuck & Company, MTN:
3,000,000 7.690% 02/27/98.................. 3,061,020
1,130,000 9.230% 08/06/98.................. 1,185,472
--------------
4,246,492
--------------
TELECOMMUNICATIONS -- 0.1%
250,000 Bell Atlantic Tricon Corporation,
8.000% 03/03/97................ 252,310
--------------
TOTAL CORPORATE NOTES
(Cost $122,706,859)............ 122,704,893
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 6
NATIONS FUND
Nations Short-Term Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
FOREIGN BONDS AND NOTES -- 9.1%
$ 3,000,000 Boral Limited, Note,
7.340% 06/20/97................ $ 3,025,740
6,000,000 Equitable-Lord Realty
Corporation, Euronote,
10.500% 12/30/97............... 6,183,420
1,950,000 Fletcher Challenge, Deb.,
9.800% 06/15/98................ 2,044,087
7,000,000 Skandia Capital AB, Guaranteed
Eurobonds,
6.000% 11/02/98................ 6,916,280
--------------
TOTAL FOREIGN BONDS
AND NOTES
(Cost $18,032,708)............. 18,169,527
==============
U.S. GOVERNMENT AGENCY SECURITY -- 3.7%
(Cost $7,555,001)
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA) CERTIFICATE -- 3.7%
7,475,649 6.000% 11/01/03.................. 7,337,817
==============
U.S. TREASURY NOTES -- 6.0%
10,550,000 7.250% 02/15/98.................. 10,721,438
1,225,000 6.150% 08/31/98.................. 1,225,380
--------------
TOTAL U.S. TREASURY NOTES
(Cost $11,925,656)............. 11,946,818
==============
TOTAL SECURITIES
(Cost $194,398,254)............ 194,379,498
==============
REPURCHASE AGREEMENT -- 1.2%
(Cost $2,365,000)
$ 2,365,000 Agreement with Smith Barney,
5.680% dated 09/30/96, to be
repurchased at $2,365,373 on 10/01/96,
collateralized by: $2,412,546 U.S.
Government Agency securities,
4.730% - 9.375% due 12/23/96 -
07/15/43...................... $ 2,365,000
=============
TOTAL INVESTMENTS
(Cost $196,763,254*)................. 98.8% 196,744,498
OTHER ASSETS AND
LIABILITIES (NET).................... 1.2 2,416,944
----- ------------
NET ASSETS............................. 100.0% $199,161,442
---- ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
** Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
+ Zero Coupon Security. The rate shown is the effective yield at date of
purchase.
ABBREVIATION:
MTN Medium Term Note
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 7
NATIONS FUND
Nations Short-Intermediate Government Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATION -- 0.1%
(Cost $559,904)
$ 528,081 Drexel Burnham Lambert,
Series S, Class 2,
9.000% 08/01/18.................. $ 535,009
============
GOVERNMENT GUARANTEED BONDS -- 0.6%
2,291,000 Second Attransco Tanker
Corporation, Series A,
8.500% 06/15/02.................. 2,350,612
454,000 Third Attransco Tanker Corporation,
8.200% 11/01/97.................. 462,576
TOTAL GOVERNMENT GUARANTEED BONDS
(Cost $2,768,723)................ 2,813,188
===========
MORTGAGE-BACKED SECURITIES -- 38.2%
FEDERAL HOME LOAN MORTGAGE CORPORATION
(FHLMC) CERTIFICATES -- 12.6%
62,540 6.500% 09/01/03.................... 62,281
612,412 8.500% 04/01/08.................... 631,226
6,598,283 8.500% 08/01/09.................... 6,851,855
1,552,900 7.170% 11/01/24+................... 1,602,158
2,778,668 6.240% 06/01/25+................... 2,834,686
4,002,691 5.493% 02/01/26+................... 4,063,972
1,938,761 5.100% 05/01/26+................... 1,937,850
3,081,391 7.460% 09/01/30+................... 3,167,577
REMIC:
269,425 Series 77, Class F,
8.500% 06/15/17.................. 268,665
933,039 Series 105, Class D,
6.000% 01/15/19.................. 928,075
30 Year Gold Pass Thru:
20,671,375 7.000% 12/01/25.................... 19,992,941
18,022,454 6.500% 04/01/26.................... 16,946,693
59,287,979
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA) CERTIFICATES -- 19.4%
1,700,000 8.150% 05/11/98.................... 1,749,674
15,000,000 7.900% 04/10/02.................... 15,077,400
13,739,403 7.500% 06/25/03.................... 13,881,056
8,000,000 7.550% 06/10/04.................... 7,993,760
4,000,000 8.550% 12/10/04.................... 4,066,880
11,006,187 8.500% 11/01/09.................... 11,429,154
2,968,109 10.000% 04/01/14................... 3,235,209
5,312,601 9.000% 04/01/16.................... 5,581,525
9,978,560 7.000% 12/01/25.................... 9,632,404
4,010,258 6.500% 04/01/26.................... 3,765,873
14,724,291 8.000% 07/01/26.................... 14,853,128
91,266,063
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(GNMA) CERTIFICATES -- 6.2%
4,641,249 8.500% 02/15/05 - 08/15/08
(27 Pools)..................... 4,835,710
3,114,953 9.000% 09/15/09.................... 3,252,198
8,235,628 8.000% 05/15/22.................... 8,351,421
8,645,922 7.500% 02/15/24.................... 8,575,717
4,040,000 7.500% 04/15/26.................... 3,994,550
29,009,596
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $179,842,105).............. 179,563,638
===========
U.S. GOVERNMENT AGENCY SECURITIES -- 0.3%
Student Loan Marketing Association:
$ 500,000 4.815% 06/01/98+................... $ 491,080
1,000,000 5.360% 08/02/99+................... 995,550
TOTAL U.S. GOVERNMENT AGENCY
SECURITIES
(Cost $1,499,112)................ 1,486,630
============
U.S. TREASURY OBLIGATIONS -- 54.4%
U.S. TREASURY BONDS -- 1.4%
74,000 7.250% 11/15/96.................... 74,173
6,000,000 8.875% 11/15/98.................... 6,319,680
6,393,853
U.S. TREASURY NOTES -- 53.0%
5,000,000 4.875% 04/30/98.................... 4,989,050
1,850,000 4.750% 09/30/98.................... 1,803,454
27,000,000 6.375% 05/15/99.................... 27,080,190
16,000,000 6.000% 08/15/99.................... 15,887,520
14,000,000 8.500% 02/15/00.................... 14,896,840
16,000,000 6.250% 08/31/00.................... 15,909,920
8,000,000 5.625% 11/30/00.................... 7,767,520
12,000,000 5.625% 02/28/01.................... 11,628,720
140,000,000 6.375% 03/31/01.................... 139,627,600
6,000,000 6.500% 08/31/01.................... 6,005,640
3,000,000 7.500% 02/15/05.................... 3,157,020
248,753,474
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $255,405,198).............. 255,147,327
===========
TOTAL SECURITIES
(Cost $440,075,042).............. 439,545,792
===========
REPURCHASE AGREEMENT -- 5.5%
(Cost $25,814,000)
25,814,000 Agreement with Smith Barney,
5.680% dated 09/30/96, to be
repurchased at $25,818,073 on
10/01/96, collateralized by: $26,332,970
U.S. Government Agency securities,
4.730% - 9.375% due 12/23/96 -
07/15/43........................... 25,814,000
===========
TOTAL INVESTMENTS
(Cost $465,889,042*)................. 99.1% 465,359,792
OTHER ASSETS AND
LIABILITIES (NET).................... 0.9 4,249,721
----- ------------
NET ASSETS............................. 100.0% $469,609,513
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Variable rate security. The interest rate shown reflects the rate in effect at
September 30, 1996.
ABBREVIATIONS:
<TABLE>
<S> <C>
Gold Payments are on accelerated 45 day payment cycle
instead of regular 75 day cycle
REMIC Real Estate Mortgage Investment Conduit
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 8
NATIONS FUND
Nations Strategic Fixed Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
ASSET-BACKED SECURITIES -- 9.6%
$15,000,000 American Express Company, Master
Trust, Series 1994-3, Class A,
7.850% 08/15/05................ $ 15,478,050
16,500,000 AT&T Universal Card, Master
Trust, Series 95-2A,
5.950% 10/17/02................ 16,066,875
3,097,395 Chase Manhattan, Grantor Trust,
Series 1996-A, Class A,
5.200% 04/15/02................ 3,052,855
5,000,000 Chase Manhattan Credit Card
Master Trust, Series 1996-4,
Class A,
6.730% 02/15/03................ 5,028,100
4,400,000 Discover Card Master Trust,
Series 1996-3, Class B,
6.250% 08/18/08................ 4,042,500
7,750,000 EQCC Home Equity Loan Trust,
Series 1996-2, Class A2,
6.700% 09/15/08................ 7,728,106
8,500,000 Ford Credit Auto Loan Master
Trust, Series 1996-1, Class A,
5.500% 02/15/01................ 8,101,520
Olympic Automobile Receivables
Trust:
11,000,000 Series 1996-A, Class A4,
5.850% 07/15/01................ 10,852,160
15,275,000 Series 1996-C, Class A4,
6.800% 03/15/02................ 15,365,734
4,060,000 Prime Credit Card Master Trust,
Series 1992-2, Class B2,
7.950% 11/15/02................ 4,202,100
6,100,000 Spiegel Master Trust, Series
1994-B, Class A,
8.150% 06/15/04................ 6,353,531
--------------
TOTAL ASSET-BACKED SECURITIES
(Cost $98,280,079)............. 96,271,531
==============
CORPORATE BONDS AND NOTES -- 25.8%
BANKING AND FINANCE -- 13.1%
8,000,000 ADVANTA Corporation, MTN,
7.075% 09/15/99................ 8,041,120
8,500,000 Ahmanson (H.F.) & Company, MTN,
6.530% 06/01/98................ 8,479,685
6,000,000 Banponce Financial Corporation,
MTN,
6.560% 04/22/99................ 5,977,560
7,500,000 Beneficial Corporation, MTN,
8.100% 11/23/98................ 7,723,125
7,500,000 Bladex,
7.000% 09/24/99................ 7,566,000
Capital One Bank, Notes:
5,750,000 6.610% 06/22/99.................. 5,708,255
9,000,000 7.200% 07/19/99.................. 9,045,900
7,500,000 7.150% 09/15/06.................. 7,453,125
8,075,000 First USA Bank, Notes,
5.850% 02/22/01................ 7,635,559
$ 8,000,000 Ford Motor Credit Corporation,
MTN,
6.060% 12/27/00................ $ 7,758,480
7,750,000 General Motors Acceptance
Corporation, MTN,
6.250% 10/18/99................ 7,650,567
4,000,000 Goldman Sachs Group, L.P., Notes,
6.200% 02/15/01**.............. 3,903,560
8,000,000 International Lease, MTN,
6.270% 02/10/99................ 7,961,680
Lehman Brothers Holdings, MTN:
4,925,000 7.190% 09/10/99.................. 4,927,463
4,300,000 9.000% 09/28/01.................. 4,580,962
6,000,000 MBIA, Inc.,
7.000% 12/15/25................ 5,560,560
Salomon Inc.:
6,000,000 MTN,
6.790% 02/27/98................ 6,034,260
4,175,000 Sr. Notes,
7.000% 06/15/03................ 4,042,986
2,100,000 Sun Canada Financial Company,
6.625% 12/15/07**.............. 1,968,561
10,000,000 U.S. Bancorp, Sub. Deb.,
7.500% 06/01/26................ 10,166,600
--------------
132,186,008
--------------
BEVERAGES -- 0.7%
7,500,000 Coca Cola Enterprises, Notes,
7.000% 10/01/26................ 7,490,625
--------------
ENTERTAINMENT -- 2.4%
Time Warner Inc., Notes:
14,550,000 7.450% 02/01/98.................. 14,706,995
5,000,000 8.110% 08/15/06.................. 4,973,400
5,000,000 8.180% 08/15/07.................. 5,039,500
--------------
24,719,895
--------------
INDUSTRIAL -- 6.0%
7,250,000 Auburn Hills Trust Certificates,
Deb.,
12.000% 05/01/20++............. 10,596,673
8,450,000 McDonnell Douglas Corporation,
Deb.,
9.750% 04/01/12................ 10,063,612
PDV America, Inc., Sr. Notes:
3,600,000 7.250% 08/01/98.................. 3,576,132
Gtd. Sr. Notes:
4,475,000 7.750% 08/01/00.................. 4,392,123
1,700,000 7.875% 08/01/03.................. 1,653,318
TCI Communications, Inc.:
5,000,000 7.250% 06/15/99.................. 5,011,600
12,600,000 7.875% 02/15/26.................. 10,971,198
6,980,000 Tennessee Valley Authority, Deb.,
5.980% 04/01/36................ 7,009,246
7,500,000 WMX Technologies Inc., Notes,
7.100% 08/01/26................ 7,599,075
--------------
60,872,977
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 9
NATIONS FUND
Nations Strategic Fixed Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
CORPORATE BONDS AND NOTES -- (CONTINUED)
PUBLISHING -- 1.2%
News America Holdings Inc., Sr. Notes:
$ 1,750,000 8.625% 02/01/03.................. $ 1,865,990
4,250,000 Gtd. Sr. Notes,
8.500% 02/15/05................ 4,497,775
6,000,000 Deb.,
7.600% 10/11/15................ 5,656,320
--------------
12,020,085
--------------
RETAIL -- 1.0%
9,500,000 Sears Roebuck Acceptance
Corporation, MTN,
5.600% 11/16/98................ 9,424,190
--------------
TELECOMMUNICATIONS -- 0.5%
5,700,000 US WEST Communications Group,
Deb.,
7.200% 11/10/26................ 5,231,517
--------------
TRANSPORTATION -- 0.9%
9,000,000 Qantas Airways Limited, Sr.
Notes,
6.625% 06/30/98**.............. 8,969,490
--------------
TOTAL CORPORATE BONDS AND NOTES
(Cost $261,204,576)............ 260,914,787
==============
FOREIGN BONDS -- 2.6%
12,500,000 Hydro-Quebec,
9.000% 03/07/01................ 13,394,625
8,500,000 Province of Quebec, Notes,
6.890% 04/15/26+++............. 8,282,995
4,680,000 Skandia Capital AB, Guaranteed
Eurobonds,
6.000% 11/02/08................ 4,624,027
--------------
TOTAL FOREIGN BONDS
(Cost $26,308,480)............. 26,301,647
==============
MORTGAGE-BACKED SECURITIES -- 29.9%
FEDERAL HOME LOAN MORTGAGE CORPORATION
(FHLMC) CERTIFICATES -- 6.0%
12,712,107 6.500% 08/01/10.................. 12,410,195
34,423,451 7.000% 08/01/11.................. 34,057,530
5,540,444 7.500% 07/01/26.................. 5,481,549
9,090,000 7.500% 09/12/26.................. 8,993,373
--------------
60,942,647
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA) CERTIFICATES -- 17.8%
22,000,000 7.180% 10/01/03.................. 22,000,000
8,471,760 7.000% 06/01/11.................. 8,373,742
5,445,000 7.000% 09/01/11.................. 5,382,001
11,436,579 9.000% 08/01/24.................. 11,933,384
16,069,977 7.500% 09/01/25.................. 15,911,849
$16,668,952 8.000% 09/15/25.................. $ 16,898,150
5,033,235 7.000% 12/01/25.................. 4,855,461
2,900,000 6.500% 03/01/26.................. 2,723,274
14,072,343 6.500% 04/01/26.................. 13,214,774
23,655,483 7.000% 04/01/26.................. 22,819,972
16,399,503 6.500% 05/01/26.................. 15,400,117
18,255,175 8.500% 06/01/26.................. 18,722,872
17,330,498 8.500% 07/01/26.................. 17,774,505
3,100,000 8.000% 09/01/26.................. 3,134,875
--------------
179,144,976
--------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(GNMA) CERTIFICATES -- 6.1%
57,065 9.000% 04/15/20.................. 60,222
5,211,960 8.000% 03/15/23.................. 5,285,240
833,950 9.500% 01/15/25.................. 894,711
11,601,975 9.500% 02/15/25.................. 12,435,809
15,473,917 8.000% 03/15/25.................. 15,667,340
4,856,809 8.000% 08/15/25.................. 4,906,105
4,356,004 7.000% 01/15/26.................. 4,192,654
3,069,000 8.500% 08/15/26.................. 3,156,252
2,970,000 9.000% 09/15/26.................. 3,097,116
11,761,331 8.500% 02/15/26, TBA+............ 12,095,706
--------------
61,791,155
--------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $301,228,242)............ 301,878,778
==============
U.S. TREASURY OBLIGATIONS -- 30.7%
U.S. TREASURY BONDS -- 9.1%
82,560,000 6.250% 08/15/23.................. 74,600,390
20,150,000 6.000% 02/15/26.................. 17,706,813
--------------
92,307,203
--------------
U.S. TREASURY NOTES -- 21.6%
47,915,000 6.000% 05/31/98.................. 47,869,960
12,910,000 6.875% 08/31/99.................. 13,107,652
33,990,000 6.875% 03/31/00.................. 34,526,362
13,350,000 6.625% 06/30/01.................. 13,431,302
48,375,000 6.250% 02/15/03.................. 47,603,903
28,550,000 5.875% 11/15/05.................. 26,970,900
33,530,000 7.000% 07/15/06.................. 34,226,753
--------------
217,736,832
--------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $308,712,117)............ 310,044,035
==============
TOTAL SECURITIES
(Cost $995,733,494)............ 995,410,778
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 10
NATIONS FUND
Nations Strategic Fixed Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.1%
(Cost $735,000)
$ 735,000 Agreement with Smith Barney,
5.680% dated 9/30/96, to be
repurchased at $735,116 on
10/01/96, collateralized by:
$749,777 U.S. Government Agency
securities, 4.730% - 9.375% due
12/23/96 - 07/15/43............ $ 735,000
==============
TOTAL INVESTMENTS
(Cost $996,468,494*)............... 98.7% $ 996,145,778
OTHER ASSETS AND
LIABILITIES (NET).................. 1.3 13,443,681
----- --------------
NET ASSETS........................... 100.0% $1,009,589,459
===== ==============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
** Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
+ Security purchased on a when-issued or delayed delivery basis (Note 1).
++ Step coupon bond. Effective yield was 12.39% at acquisition date.
+++ Step coupon bond. Effective yield was 7.50% at acquisition date.
ABBREVIATIONS:
MTN Medium Term Note
TBA To Be Announced
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 11
NATIONS FUND
Nations Government Securities Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATION -- 0.4%
(Cost $421,173)
$ 421,855 CS First Boston Mortgage
Securities, Series 1989-5, Class
A-1,
7.500% 12/25/19................. $ 420,998
============
MORTGAGE-BACKED SECURITIES -- 53.9%
FEDERAL HOME LOAN BANK (FHLB)
CERTIFICATE -- 1.7%
2,000,000 7.000% 02/03/11................... 1,893,740
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION
(FHLMC) CERTIFICATES -- 8.5%
3,150,000 6.280% 03/06/06................... 3,003,336
312,003 7.500% 08/01/08 - 06/01/09
(2 Pools)..................... 313,591
750,000 7.950% 07/28/04................... 753,750
909,842 8.000% 08/01/07 - 05/01/17
(4 Pools)..................... 932,459
2,000,000 8.375% 03/15/10................... 2,051,240
734,427 8.500% 02/01/08 - 06/01/17
(5 Pools)..................... 761,074
639,020 9.000% 05/01/09 - 12/01/16
(2 Pools)..................... 670,920
766,791 9.500% 04/01/18 - 06/01/21
(4 Pools)..................... 822,129
96,253 10.000% 07/01/01.................. 100,975
116,630 REMIC,
6.000% 01/15/19................. 116,009
------------
9,525,483
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION
(FNMA) CERTIFICATES -- 29.4%
11,856,762 6.500% 02/01/24 - 01/01/26
(19 Pools).................... 11,142,728
6,962,706 7.000% 06/01/03 - 05/11/11
(2 Pools)..................... 6,930,777
7,877,576 7.500% 06/25/23 - 05/01/26
(2 Pools)..................... 7,849,321
6,141,477 8.000% 04/01/06 - 05/01/26
(6 Pools)..................... 6,220,342
224,341 8.250% 04/01/09 (2 Pools)......... 230,835
764,118 8.500% 12/01/11 - 07/01/21
(3 Pools)..................... 790,414
------------
33,164,417
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA) CERTIFICATES -- 14.2%
4,100,114 7.000% 07/15/10 - 06/15/23
(4 Pools)..................... 4,035,033
841,827 7.500% 03/15/24................... 834,991
2,093,352 8.000% 09/15/06 - 07/15/22
(14 Pools).................... 2,137,604
5,061,795 8.500% 09/15/04 - 05/15/22
(40 Pools).................... 5,263,213
1,771,236 9.000% 11/15/08 - 08/15/20
(18 Pools).................... 1,875,752
395,654 9.500% 04/15/16 - 08/15/21
(5 Pools)..................... 426,680
904,867 10.000% 11/15/09 - 08/15/20
(13 Pools).................... 988,665
152,585 10.500% 12/15/20.................. 169,176
202,837 11.750% 09/15/00 - 12/15/00
(2 Pools)..................... 214,119
19,236 12.750% 12/15/97.................. 20,294
------------
15,965,527
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION II
(GNMA II) CERTIFICATE -- 0.1%
$ 146,507 11.000% 10/20/20.................. $ 164,749
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $61,335,405).............. 60,713,916
============
U.S. GOVERNMENT AGENCY SECURITIES -- 3.4%
2,000,000 Federal Agricultural Mortgage
Corporation,
9.400% 07/15/08................. 2,201,560
1,500,000 Federal Farm Credit Systems,
9.450% 11/21/03................. 1,583,205
------------
TOTAL U.S. GOVERNMENT AGENCY
SECURITIES
(Cost $4,049,871)............... 3,784,765
============
U.S. TREASURY SECURITIES -- 40.4%
U.S. TREASURY BONDS -- 15.6%
4,000,000 8.875% 02/15/19................... 4,808,120
7,000,000 6.250% 08/15/23................... 6,325,130
6,550,000 6.750% 08/15/26................... 6,401,577
------------
17,534,827
------------
U.S. TREASURY NOTES -- 24.8%
6,000,000 6.250% 07/31/98................... 6,015,960
7,000,000 6.500% 08/31/01................... 7,006,580
6,000,000 5.875% 02/15/04................... 5,740,320
4,800,000 7.875% 11/15/04................... 5,158,512
2,000,000 6.875% 05/15/06................... 2,023,440
2,000,000 7.000% 07/15/06................... 2,041,560
------------
27,986,372
------------
TOTAL U.S. TREASURY
SECURITIES
(Cost $45,294,245).............. 45,521,199
============
TOTAL SECURITIES
(Cost $111,100,694)............. 110,440,878
============
REPURCHASE AGREEMENT -- 1.4%
(Cost $1,578,000)
1,578,000 Agreement with Smith Barney,
5.680% dated 09/30/96, to be
repurchased at $1,578,249 on
10/01/96, collateralized by:
$1,609,724 U.S. Government
Agency securities, 4.730% -
9.375% due 12/23/96 -
07/15/43........................ 1,578,000
============
TOTAL INVESTMENTS
(Cost $112,678,694*)................. 99.5% 112,018,878
OTHER ASSETS AND
LIABILITIES (NET).................... 0.5 589,284
---- ------------
NET ASSETS............................. 100.0% $112,608,162
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
ABBREVIATION:
REMIC Real Estate Mortgage Investment Conduit
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 12
NATIONS FUND
Nations Diversified Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
CORPORATE BONDS AND NOTES -- 43.9%
BANKING AND FINANCE -- 13.4%
$ 2,000,000 Banponce Financial Corporation,
Sub. Notes,
6.750% 12/15/05................ $ 1,901,920
3,000,000 Conseco, Inc., Sr. Notes,
10.500% 12/15/04............... 3,464,520
2,000,000 Donaldson Lufkin & Jenrette, Sr.
Notes,
6.875% 11/01/05................ 1,911,640
1,452,124 G.P.A. Leasing USA, Series BN-5,
9.125% 12/02/96**.............. 1,454,186
2,500,000 Leucadia National Corporation,
Sr. Sub. Notes,
8.250% 06/15/05................ 2,498,725
3,000,000 Liberty Mutual, Notes,
8.500% 05/15/25**.............. 3,136,080
3,000,000 Paine Webber Group, Inc.,
Sr. Notes,
8.875% 03/15/05................ 3,224,460
2,000,000 Salomon Inc., Sr. Notes,
7.125% 08/01/99................ 2,005,600
2,500,000 Security Pacific Corporation,
Sub. Notes,
11.000% 03/01/01............... 2,883,275
2,000,000 TIG Holdings, Inc., Notes,
8.125% 04/15/05................ 2,039,240
2,150,000 Western Financial Savings Bank,
Sub. Deb.,
8.500% 07/01/03................ 2,152,215
------------
26,671,861
------------
COMPUTER -- 0.8%
1,500,000 Unisys Corporation, Sr. Notes,
10.625% 10/01/99............... 1,518,750
------------
ENERGY -- 3.3%
2,000,000 Cogentrix Energy, Inc., Sr.
Notes,
8.100% 03/15/04................ 1,960,940
2,000,000 Occidental Petroleum Corporation,
Sr. Deb.,
10.125% 09/15/09............... 2,415,620
2,000,000 USX-Marathon Group, Deb.,
9.800% 07/01/01................ 2,208,000
------------
6,584,560
------------
ENTERTAINMENT -- 0.8%
1,500,000 Time Warner Inc., Deb.,
9.150% 02/01/23................ 1,582,455
------------
GAS -- 0.8%
1,500,000 Louis Dreyfus Natural Gas
Corporation, Sr. Sub. Notes,
9.250% 06/15/04................ 1,559,700
------------
HEALTH CARE -- 1.1%
2,000,000 Tenet Healthcare Corporation, Sr.
Sub. Notes,
10.125% 03/01/05............... 2,170,000
------------
INDUSTRIAL -- 16.6%
2,000,000 Auburn Hills Trust Certificates,
Deb.,
12.000% 05/01/20+.............. 2,923,220
2,500,000 Fisher Scientific International,
Sr. Notes,
7.125% 12/15/05................ 2,389,450
3,000,000 Harris Corporation, Notes,
6.650% 08/01/06................ 2,980,140
$ 2,000,000 Maxus Energy Corporation, Notes,
9.375% 11/01/03................ $ 1,975,000
2,500,000 PDV America, Inc., Gtd. Sr.
Notes,
7.875% 08/01/03................ 2,431,350
2,000,000 Stone Container Corporation, Sr.
Notes,
11.875% 12/01/98............... 2,115,000
4,000,000 TCI Communications, Inc., Deb.,
7.875% 02/15/26................ 3,482,920
6,205,000 Tennessee Valley Authority, Deb.,
5.980% 04/01/36................ 6,227,710
1,500,000 United States Can Company,
Sr. Sub. Notes,
13.500% 01/15/02............... 1,620,000
2,775,000 Valassis Inserts Inc., Sr. Notes,
9.375% 03/15/99................ 2,820,316
2,000,000 Viacom Inc., Sr. Notes,
7.750% 06/01/05................ 1,932,040
2,000,000 Westpoint Stevens Inc., Sr.
Notes,
8.750% 12/15/01................ 2,025,000
------------
32,922,146
------------
PUBLISHING -- 1.1%
2,000,000 News America Holdings Inc.,
Gtd. Deb.,
10.125% 10/15/12............... 2,247,920
------------
RETAIL -- 1.2%
2,250,000 Federated Department Stores Inc.,
Sr. Notes,
8.500% 06/15/03................ 2,311,740
------------
TELECOMMUNICATIONS -- 2.9%
2,000,000 Jones Intercable, Inc., Sr.
Notes,
9.625% 03/15/02................ 2,080,000
2,000,000 Rogers Cablesystems Limited,
Deb.,
10.000% 12/01/07............... 1,980,000
1,500,000 TKR Cable 1, Inc., Sr. Deb.,
10.500% 10/30/07............... 1,634,850
------------
5,694,850
------------
TRANSPORTATION -- 0.9%
1,500,000 Federal Express Corporation,
Notes,
9.650% 06/15/12................ 1,741,020
------------
UTILITIES -- 1.0%
2,000,000 Edelnor, S.A.,
7.750% 03/15/06**.............. 1,965,640
------------
TOTAL CORPORATE BONDS
AND NOTES
(Cost $87,485,530)............. 86,970,642
============
FOREIGN BONDS AND NOTES -- 5.3%
3,000,000 Hydro-Quebec, Deb., Series H,
9.400% 02/01/21................ 3,475,980
5,000,000 Province of Quebec, Notes,
6.890% 04/15/26++.............. 4,872,350
2,000,000 United Mexican States, Notes,
9.750% 02/06/01................ 2,052,500
------------
TOTAL FOREIGN BONDS AND NOTES
(Cost $10,321,695)............. 10,400,830
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 13
NATIONS FUND
Nations Diversified Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
MORTGAGE-BACKED SECURITIES -- 35.5%
FEDERAL HOME LOAN
MORTGAGE CORPORATION (FHLMC)
CERTIFICATE -- 10.0%
$ 19,963,711 7.500% 06/01/26.................. $ 19,751,497
------------
FEDERAL NATIONAL
MORTGAGE ASSOCIATION (FNMA)
CERTIFICATES -- 17.3%
1,944,193 7.000% 05/01/11.................. 1,921,698
5,940,001 6.500% 07/01/11.................. 5,758,059
5,940,000 7.000% 09/01/11.................. 5,930,674
12,522,650 8.000% 07/01/25.................. 12,694,836
4,277,223 7.000% 08/01/25.................. 4,128,846
1,928,102 8.500% 12/01/25.................. 1,977,500
1,982,949 6.500% 05/01/26.................. 1,862,108
------------
34,273,721
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA)
CERTIFICATES -- 8.2%
3,932,840 7.500% 01/15/26.................. 3,883,679
5,940,000 9.000% 08/15/26.................. 6,223,991
5,940,001 8.500% 09/18/26.................. 6,108,875
------------
16,216,545
------------
TOTAL MORTGAGE-BACKED
SECURITIES
(Cost $70,367,855)............. 70,241,763
============
U.S. TREASURY BONDS -- 14.7%
13,750,000 7.875% 08/15/01.................. 10,068,163
5,660,000 12.000% 08/15/13................. 7,959,375
10,000,000 8.875% 02/15/19.................. 2,026,000
8,850,000 7.250% 08/15/22.................. 9,038,063
------------
TOTAL U.S. TREASURY BONDS
(Cost $28,994,359)............. 29,091,601
============
TOTAL SECURITIES
(Cost $197,169,439)............ 196,704,836
============
REPURCHASE AGREEMENT -- 0.7%
(Cost $1,360,000)
$ 1,360,000 Agreement with Smith Barney,
5.680% dated 09/30/96, to be
repurchased at $1,360,215 on
10/01/96, collateralized by:
$1,387,342 U.S. Government
Agency securities,
4.730% - 9.375% due
12/23/96 - 07/15/43............ $ 1,360,000
------------
TOTAL INVESTMENTS
(Cost $198,529,439*)................. 100.1% 198,064,836
OTHER ASSETS AND
LIABILITIES (NET).................... (0.1) (167,409)
----- -------------
NET ASSETS............................. 100.0% $197,897,427
---- ------------
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Aggregate cost for Federal tax purposes.
** Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to
qualified institutional buyers.
+ Step coupon bond. Effective yield was 12.39% at
acquisition date.
++ Step coupon bond. Effective yield was 7.24% at
acquisition date.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 14
NATIONS FUND
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
NATIONS NATIONS
NATIONS SHORT- STRATEGIC NATIONS NATIONS
SHORT-TERM INTERMEDIATE FIXED GOVERNMENT DIVERSIFIED
INCOME GOVERNMENT INCOME SECURITIES INCOME
FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------
ASSETS:
Investments, at value (Note 1)
See accompanying schedules:
Securities...................................... $194,379,498 $439,545,792 $ 995,410,778 $110,440,878 $196,704,836
Repurchase agreements........................... 2,365,000 25,814,000 735,000 1,578,000 1,360,000
------------ ------------ -------------- ------------ ------------
Total investments............................. 196,744,498 465,359,792 996,145,778 112,018,878 198,064,836
Cash.............................................. 696 157 -- -- 1,044,283
Interest receivable............................... 3,304,621 3,668,598 11,164,297 1,042,112 2,738,064
Receivable for investment securities sold......... -- 1,103,416 34,816,828 22,136 --
Receivable for Fund shares sold................... 353,243 4,454,471 14,831,453 94,684 884,167
Unamortized organization costs (Note 6)........... 4,033 -- 4,370 -- 4,370
Prepaid expenses and other assets................. -- 1,395 2,216 5,025 --
------------ ------------ -------------- ------------ ------------
Total Assets.................................. 200,407,091 474,587,829 1,056,964,942 113,182,835 202,735,720
------------ ------------ -------------- ------------ ------------
LIABILITIES:
Payable for Fund shares redeemed.................. 705,313 2,396,959 9,401,217 104,350 3,593,127
Payable for investment securities purchased....... -- -- 29,416,665 -- --
Investment advisory fee payable (Note 2).......... 49,649 153,878 385,027 46,187 82,211
Administration fee payable (Note 2)............... 16,550 38,469 77,005 9,237 16,442
Shareholder servicing and distribution fees
payable
(Note 3)........................................ 5,710 20,326 5,630 26,737 53,360
Transfer agent fees payable (Note 2).............. 14,143 32,487 64,749 6,575 14,382
Custodian fees payable (Note 2)................... 5,960 11,838 23,859 4,855 6,187
Dividends payable................................. 414,568 2,272,805 2,662,546 352,674 1,042,217
Accrued Trustees'/Directors' fees and expenses
(Note 2)........................................ 8,017 20,497 37,176 3,476 7,401
Due to custodian.................................. -- -- 5,255,333 11,504 --
Accrued expenses and other payables............... 25,739 31,057 46,276 9,078 22,966
------------ ------------ -------------- ------------ ------------
Total Liabilities............................. 1,245,649 4,978,316 47,375,483 574,673 4,838,293
------------ ------------ -------------- ------------ ------------
NET ASSETS........................................ $199,161,442 $469,609,513 $1,009,589,459 $112,608,162 $197,897,427
============ ============ ============== ============ ============
Investments, at cost.............................. $196,763,254 $465,889,042 $ 996,468,494 $112,678,694 $198,529,439
============ ============ ============== ============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 15
NATIONS FUND
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
NATIONS NATIONS
NATIONS SHORT- STRATEGIC NATIONS NATIONS
SHORT-TERM INTERMEDIATE FIXED GOVERNMENT DIVERSIFIED
INCOME GOVERNMENT INCOME SECURITIES INCOME
FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Distributions in excess of net investment
income........................................ $ (772,975) $ (2,116,748) $ (1,545,477) $ (604,959) $ (147,511)
Accumulated net realized loss on investments.... (7,512,115) (23,399,397) (13,690,593) (9,684,462) (1,272,690)
Net unrealized depreciation of investments...... (18,756) (529,250) (322,716) (659,816) (464,603)
Paid-in capital................................. 207,465,288 495,654,908 1,025,148,245 123,557,399 199,782,231
------------ ------------ -------------- ------------ ------------
$199,161,442 $469,609,513 $1,009,589,459 $112,608,162 $197,897,427
============ ============ ============== ============ ============
NET ASSETS:
Primary A Shares................................ $182,178,733 $393,234,020 $ 986,087,480 $ 53,571,264 $103,471,184
============ ============ ============== ============ ============
Primary B Shares................................ $ 454,436 $ 5,745,850 $ 13,284,564 $ 523,131 $ 34,625
============ ============ ============== ============ ============
Investor A Shares............................... $ 5,724,796 $ 47,842,743 $ 7,072,551 $ 10,758,012 $ 12,382,062
============ ============ ============== ============ ============
Investor C Shares............................... $ 4,631,404 $ 10,516,945 $ 792,876 $ 2,220,130 $ 3,766,798
============ ============ ============== ============ ============
Investor N Shares............................... $ 6,172,073 $ 12,269,955 $ 2,351,988 $ 45,535,625 $ 78,242,758
============ ============ ============== ============ ============
SHARES OUTSTANDING:
Primary A Shares................................ 18,737,449 97,574,983 100,526,295 5,628,673 10,034,237
============ ============ ============== ============ ============
Primary B Shares................................ 46,741 1,426,293 1,354,876 54,964 3,358
============ ============ ============== ============ ============
Investor A Shares............................... 588,800 11,872,151 720,953 1,130,330 1,200,802
============ ============ ============== ============ ============
Investor C Shares............................... 476,354 2,609,681 80,822 233,274 365,306
============ ============ ============== ============= ============
Investor N Shares............................... 634,808 3,044,817 239,763 4,784,450 7,587,917
============ ============ ============== ============ ============
PRIMARY A SHARES:
Net asset value, offering and redemption price
per share..................................... $9.72 $4.03 $9.81 $9.52 $10.31
===== ===== ===== ===== ======
PRIMARY B SHARES:
Net asset value, offering and redemption price
per share..................................... $9.72 $4.03 $9.81 $9.52 $10.31
===== ===== ===== ===== ======
INVESTOR A SHARES:
Net asset value, offering and redemption price
per share..................................... $9.72 $4.03 $9.81 $9.52 $10.31
===== ===== ===== ===== ======
INVESTOR C SHARES:
Net asset value and offering price per share*... $9.72 $4.03 $9.81 $9.52 $10.31
===== ===== ===== ===== ======
INVESTOR N SHARES:
Net asset value, offering and redemption price
per share..................................... $9.72 $4.03 $9.81 $9.52 $10.31
===== ===== ===== ===== ======
</TABLE>
- ---------------
* Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 16
NATIONS FUND
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
NATIONS NATIONS
NATIONS SHORT- STRATEGIC NATIONS NATIONS
SHORT-TERM INTERMEDIATE FIXED GOVERNMENT DIVERSIFIED
INCOME GOVERNMENT INCOME SECURITIES INCOME
FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------
INVESTMENT INCOME:
Interest.................................................... $6,531,915 $15,049,274 $ 28,953,242 $4,091,702 $ 7,206,200
---------- ----------- ------------ ----------- -----------
EXPENSES:
Investment advisory fee (Note 2)............................ 598,001 1,431,200 2,679,691 370,856 578,980
Administration fee (Note 2)................................. 99,585 238,533 446,615 58,313 96,497
Transfer agent fees (Note 2)................................ 61,577 144,200 265,808 35,453 61,599
Custodian fees (Note 2)..................................... 17,621 36,303 64,847 14,379 17,423
Legal and audit fees........................................ 21,461 55,843 55,714 27,152 20,181
Trustees'/Directors' fees and expenses (Note 2)............. 5,556 13,680 25,686 1,569 5,418
Amortization of organization costs (Note 6)................. 2,016 2,331 2,017 -- 2,017
Other....................................................... 39,851 94,334 75,607 35,468 45,826
---------- ----------- ------------ ----------- -----------
Subtotal................................................ 845,668 2,016,424 3,615,985 543,190 827,941
Shareholder servicing and distribution fees (Note 3):
Primary B Shares.......................................... 300 3,155 5,867 577 42
Investor A Shares......................................... 4,319 52,712 6,697 13,752 16,372
Investor C Shares......................................... 9,077 27,044 1,070 5,946 8,951
Investor N Shares......................................... 12,087 38,643 7,822 155,920 301,086
Fees waived by investment adviser (Note 2).................. (299,247) (477,066) (446,615) (79,293) (96,497)
---------- ----------- ------------ ----------- -----------
Total expenses.......................................... 572,204 1,660,912 3,190,826 640,092 1,057,895
---------- ----------- ------------ ----------- -----------
NET INVESTMENT INCOME....................................... 5,959,711 13,388,362 25,762,416 3,451,610 6,148,305
---------- ----------- ------------ ----------- -----------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
(NOTES 1 AND 4):
Net realized loss on investments during the period.......... (538,168) (8,420,962) (21,788,323) (2,801,929) (3,629,162)
Net unrealized appreciation/(depreciation) of investments
during the period......................................... (246,329) 3,686,013 12,972,343 845,892 2,179,240
---------- ----------- ------------ ----------- -----------
Net realized and unrealized loss on investments............. (784,497) (4,734,949) (8,815,980) (1,956,037) (1,449,922)
---------- ----------- ------------ ----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $5,175,214 $ 8,653,413 $ 16,946,436 $1,495,573 $ 4,698,383
========== =========== ============ ========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 17
NATIONS FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
NATIONS NATIONS
NATIONS SHORT- STRATEGIC NATIONS NATIONS
SHORT-TERM INTERMEDIATE FIXED GOVERNMENT DIVERSIFIED
INCOME GOVERNMENT INCOME SECURITIES INCOME
FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------
Net investment income......................... $ 5,959,711 $ 13,388,362 $ 25,762,416 $ 3,451,610 $ 6,148,305
Net realized loss on investments.............. (538,168) (8,420,962) (21,788,323) (2,801,929) (3,629,162)
Change in unrealized
appreciation/(depreciation)
of investments.............................. (246,329) 3,686,013 12,972,343 845,892 2,179,240
------------ ------------ -------------- ------------ ------------
Net increase in net assets resulting from
operations.................................. 5,175,214 8,653,413 16,946,436 1,495,573 4,698,383
Distributions to shareholders from net
investment income:
Primary A Shares............................ (5,485,138) (11,289,419) (25,435,169) (1,709,982) (3,200,415)
Primary B Shares............................ (4,819) (49,199) (64,504) (6,537) (528)
Investor A Shares........................... (124,742) (1,442,082) (189,699) (333,533) (430,631)
Investor C Shares........................... (149,107) (279,649) (11,434) (68,212) (111,501)
Investor N Shares........................... (195,905) (328,013) (61,610) (1,333,346) (2,405,230)
Net increase/(decrease) in net assets from
Fund share transactions:
Primary A Shares............................ 2,997,727 (2,786,698) 170,949,345 (1,483,496) 38,778,694
Primary B Shares............................ 404,269 5,731,994 13,250,383 522,159 34,518
Investor A Shares........................... 2,913,017 (8,941,778) 701,512 (718,961) (800,949)
Investor C Shares........................... (1,460,575) (1,178,605) 494,550 (295,771) 346,840
Investor N Shares........................... (1,135,256) (1,385,157) (115,400) (4,599,462) (5,570,744)
------------ ------------ -------------- ------------ ------------
Net increase/(decrease) in net assets......... 2,934,685 (13,295,193) 176,464,410 (8,531,568) 31,338,437
NET ASSETS:
Beginning of period........................... 196,226,757 482,904,706 833,125,049 121,139,730 166,558,990
------------ ------------ -------------- ------------ ------------
End of period................................. $199,161,442 $469,609,513 $1,009,589,459 $112,608,162 $197,897,427
============ ============ ============== ============ ============
Distributions in excess of net investment
income at end of period..................... $ (772,975) $ (2,116,748) $ (1,545,477) $ (604,959) $ (147,511)
============ ============ ============== ============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 18
NATIONS FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
NATIONS NATIONS
NATIONS SHORT- STRATEGIC NATIONS NATIONS
SHORT-TERM INTERMEDIATE FIXED GOVERNMENT DIVERSIFIED
INCOME GOVERNMENT INCOME SECURITIES INCOME
FUND(a) FUND(a) FUND(a) FUND(b) FUND(a)
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------
Net investment income.......................... $ 3,927,305 $ 8,813,266 $ 15,374,466 $ 5,824,459 $ 3,482,630
Net realized gain on investments............... 739,233 534,819 23,781,522 110,292 2,934,675
Change in unrealized depreciation of
investments.................................. (2,409,577) (9,128,807) (48,262,684) (2,382,181) (9,439,511)
------------ ------------ ------------ ------------ ------------
Net increase/(decrease) in net assets resulting
from operations.............................. 2,256,961 219,278 (9,106,696) 3,552,570 (3,022,206)
Distributions to shareholders from net
investment income:
Primary A Shares............................. (3,565,554) (7,220,634) (15,210,029) (2,364,638) (1,419,419)
Investor A Shares............................ (57,809) (1,030,983) (118,080) (531,600) (281,185)
Investor C Shares............................ (118,157) (199,970) (5,049) (125,779) (69,099)
Investor N Shares............................ (155,101) (224,691) (41,308) (2,513,856) (1,712,773)
Distributions to shareholders in excess of net
investment income:
Primary A Shares............................. -- (112,834) -- (116,271) --
Investor A Shares............................ -- (16,747) -- (27,280) --
Investor C Shares............................ -- (3,441) -- (6,931) --
Investor N Shares............................ -- (3,966) -- (138,103) --
Net increase/(decrease) in net assets from Fund
share transactions:
Primary A Shares............................. 12,171,837 (18,177,375) 24,995,290 17,057,546 2,798,971
Investor A Shares............................ (135,027) (6,438,309) (28,347) 992,151 700,759
Investor C Shares............................ 114,573 (1,176,183) 81,673 (340,453) 2,187
Investor N Shares............................ (1,474,499) (857,349) (6,901) (4,234,782) (2,857,371)
------------ ------------ ------------ ------------ ------------
Net increase/(decrease) in net assets.......... 9,037,224 (35,243,204) 560,553 11,202,574 (5,860,136)
------------ ------------ ------------ ------------ ------------
NET ASSETS:
Beginning of period............................ 187,189,533 518,147,910 832,564,496 109,937,156 172,419,126
------------ ------------ ------------ ------------ ------------
End of period.................................. $196,226,757 $482,904,706 $833,125,049 $121,139,730 $166,558,990
============ ============ ============ ============ ============
Distributions in excess of net investment
income at end of period...................... $ (772,975) $(2,116,748) $ (1,545,477) $ (604,959) $ (147,511)
=========== =========== ============ =========== ============
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30. The numbers reflected are for the period December 1, 1995
through March 31, 1996.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
May 31. The numbers reflected are for the period June 1, 1995 through March
31, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 19
NATIONS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY
<TABLE>
<CAPTION>
NATIONS SHORT-TERM INCOME FUND
PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, 1996(b)(c) MARCH 31, 1996(a)
-------------------------------- --------------------------------
SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold.............................................. 2,648,934 $ 25,778,367 3,296,223 $ 32,508,452
Issued as reinvestment of dividends............... 311,397 3,012,676 172,406 1,695,467
Redeemed.......................................... (2,658,802) (25,793,316) (2,236,024) (22,032,082)
----------- ------------ ----------- ------------
Net increase...................................... 301,529 $ 2,997,727 1,232,605 $ 12,171,837
=========== ============ =========== ============
PRIMARY B SHARES:
Sold.............................................. 48,361 $ 419,986
Issued as reinvestment of dividends............... 497 4,819
Redeemed.......................................... (2,117) (20,536)
----------- ------------
Net increase...................................... 46,741 $ 404,269
=========== ============
INVESTOR A SHARES:
Sold.............................................. 431,110 $ 4,176,161 42,961 $ 422,917
Issued as reinvestment of dividends............... 11,613 112,672 4,994 49,132
Redeemed.......................................... (141,764) (1,375,816) (61,870) (607,076)
----------- ------------ ----------- ------------
Net increase/(decrease)........................... 300,959 $ 2,913,017 (13,915) $ (135,027)
=========== ============ =========== ============
INVESTOR C SHARES:
Sold.............................................. 46,152 $ 448,047 109,316 $ 1,078,053
Issued as reinvestment of dividends............... 11,351 110,146 9,036 88,887
Redeemed.......................................... (208,226) (2,018,768) (106,715) (1,052,367)
=========== ============ =========== ============
Net increase/(decrease)........................... (150,723) $ (1,460,575) 11,637 $ 114,573
=========== ============ =========== ============
INVESTOR N SHARES
Sold.............................................. 30,448 $ 296,155 33,310 $ 328,462
Issued as reinvestment of dividends............... 17,376 168,614 13,560 133,432
Redeemed.......................................... (164,898) (1,600,025) (196,694) (1,936,393)
=========== ============ =========== ============
Net decrease...................................... (117,074) $ (1,135,256) (149,824) $ (1,474,499)
=========== ============ =========== ============
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Nations Short-Term Income Fund's Primary B Shares commenced operations on
June 28, 1996.
(c) Unaudited.
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 20
NATIONS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
NATIONS STRATEGIC FIXED
NATIONS SHORT-INTERMEDIATE GOVERNMENT FUND INCOME FUND
PERIOD ENDED PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, 1996(b)(c) MARCH 31, 1996(a) SEPTEMBER 30, 1996(b)(c)
---------------------------- ---------------------------- -----------------------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold................ 11,994,988 $ 48,346,207 8,023,715 $ 33,168,896 28,934,187 $ 282,251,087
Issued in exchange
for Shares of
Peachtree Bond Fund
(Note 9)........... -- -- -- -- 6,826,942 67,043,140
Issued as
reinvestment of
dividends.......... 1,078,430 4,333,382 504,483 2,082,733 1,322,393 12,921,832
Redeemed............ (13,772,755) (55,466,287) (12,928,325) (53,429,004) (19,552,469) (191,266,714)
----------- ------------ ----------- ------------ ----------- -------------
Net increase/
(decrease)......... (699,337) $ (2,786,698) (4,400,127) $(18,177,375) 17,531,053 $ 170,949,345
=========== ============ =========== ============ =========== =============
PRIMARY B SHARES:
Sold................ 1,457,682 $ 5,858,680 1,362,460 $ 13,324,428
Issued as
Reinvestment of
dividends.......... 8,860 35,578 1,970 19,232
Redeemed............ (40,249) (162,264) (9,554) (93,277)
----------- ------------ ----------- -------------
Net increase........ 1,426,293 $ 5,731,994 1,354,876 $ 13,250,383
=========== ============ =========== =============
INVESTOR A SHARES:
Sold................ 297,898 $ 1,201,278 192,318 $ 794,577 186,028 $ 1,814,693
Issued as
reinvestment of
dividends.......... 249,369 1,002,022 180,559 745,524 15,403 150,509
Redeemed............ (2,775,210) (11,145,078) (1,931,727) (7,978,410) (129,194) (1,263,690)
----------- ------------ ----------- ------------ ----------- -------------
Net increase/
(decrease)......... (2,227,943) $ (8,941,778) (1,558,850) $ (6,438,309) 72,237 $ 701,512
=========== ============ =========== ============ =========== =============
INVESTOR C SHARES:
Sold................ 152,094 $ 610,431 4,936 $ 20,431 62,950 $ 614,630
Issued as
reinvestment of
dividends.......... 47,503 190,896 34,127 140,922 1,070 10,461
Redeemed............ (494,392) (1,979,932) (323,540) (1,337,536) (13,363) (130,541)
----------- ------------ ----------- ------------ ----------- -------------
Net increase/
(decrease)......... (294,795) $ (1,178,605) (284,477) $ (1,176,183) 50,657 $ 494,550
=========== ============ =========== ============ =========== =============
INVESTOR N SHARES:
Sold................ 151,920 $ 609,228 91,903 $ 379,562 8,432 $ 81,060
Issued as
reinvestment of
dividends.......... 48,999 196,889 33,414 137,966 5,110 49,928
Redeemed............ (544,700) (2,191,274) (333,038) (1,374,877) (25,193) (246,388)
----------- ------------ ----------- ------------ ----------- -------------
Net decrease........ (343,781) $ (1,385,157) (207,721) $ (857,349) (11,651) $ (115,400)
=========== ============ ============ ============ =========== =============
<CAPTION>
PERIOD ENDED
MARCH 31, 1996(a)
---------------------------
SHARES DOLLARS
-----------------------------------------------------
<S> <C> <C>
PRIMARY A SHARES:
Sold................ 10,281,111 $104,671,102
Issued in exchange
for Shares of
Peachtree Bond Fund
(Note 9)........... -- --
Issued as
reinvestment of
dividends.......... 645,969 6,558,919
Redeemed............ (8,463,213) (86,234,731)
---------- ------------
Net increase/
(decrease)......... 2,463,867 $ 24,995,290
========== ============
PRIMARY B SHARES:
Sold................
Issued as
reinvestment of
dividends..........
Redeemed............
Net increase........
INVESTOR A SHARES:
Sold................ 55,747 $ 570,159
Issued as
reinvestment of
dividends.......... 8,723 88,613
Redeemed............ (67,518) (687,119)
---------- ------------
Net increase/
(decrease)......... (3,048) $ (28,347)
========== ============
INVESTOR C SHARES:
Sold................ 7,802 $ 79,891
Issued as
reinvestment of
dividends.......... 404 4,103
Redeemed............ (228) (2,321)
---------- ------------
Net increase/
(decrease)......... 7,978 $ 81,673
========== ============
INVESTOR N SHARES:
Sold................ 16,308 $ 166,977
Issued as
reinvestment of
dividends.......... 3,066 31,132
Redeemed............ (20,158) (205,010)
---------- ------------
Net decrease........ (784) $ (6,901)
========== ============
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Nations Short-Intermediate Government Fund's and Nations Strategic Fixed
Income Fund's Primary B Shares commenced operations on June 28, 1996.
(c) Unaudited.
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 21
NATIONS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
NATIONS DIVERSIFIED INCOME
NATIONS GOVERNMENT SECURITIES FUND FUND
PERIOD ENDED PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, 1996(c)(d) MARCH 31, 1996(b) SEPTEMBER 30, 1996(c)(d)
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................... 1,058,615 $ 10,046,147 1,429,108 $ 14,525,565 4,179,195 $42,824,047
Issued in exchange for
Trust A Shares of
Nations Mortgage-Backed
Securities
Fund (Note 9)........... -- -- 1,913,042 18,401,388 -- --
Issued as reinvestment
of dividends............ 19,432 184,213 24,136 238,465 262,874 2,693,473
Redeemed.................. (1,236,310) (11,713,856) (1,627,897) (16,107,872) (656,062) (6,738,826)
---------- ------------ ---------- ------------ -------- -----------
Net increase/(decrease)... (158,263) $ (1,483,496) 1,738,389 $ 17,057,546 3,786,007 $38,778,694
========== ============ ========== ============ ========= ===========
PRIMARY B SHARES:
Sold...................... 58,108 $ 551,880 3,307 $ 33,991
Issued as reinvestment
of dividends............ 105 990 51 527
Redeemed.................. (3,249) (30,711) -- --
---------- ------------ -------- -----------
Net increase.............. 54,964 $ 522,159 3,358 $ 34,518
========== ============ ========== ============ ========= ===========
INVESTOR A SHARES:
Sold...................... 18,724 $ 178,206 701,960 $ 7,015,566 198,504 $ 2,035,336
Issued as reinvestment
of dividends............ 21,411 202,961 28,709 283,397 24,933 255,505
Redeemed.................. (115,767) (1,100,128) (633,283) (6,306,812) (302,602) (3,091,790)
---------- ------------ ---------- ------------ -------- -----------
Net increase/(decrease)... (75,632) $ (718,961) 97,386 $ 992,151 (79,165) $ (800,949)
========== ============ ========== ============ ========= ===========
INVESTOR C SHARES:
Sold...................... 330 $ 3,130 36,493 $ 360,644 77,832 $ 800,585
Issued as reinvestment
of dividends............ 4,132 39,167 7,802 77,066 7,483 76,682
Redeemed.................. (35,702) (338,068) (78,586) (778,163) (51,585) (530,427)
---------- ------------ ---------- ------------ -------- -----------
Net increase/(decrease)... (31,240) $ (295,771) (34,291) $ (340,453) 33,730 $ 346,840
========== ============ ========== ============ ========= ===========
INVESTOR N SHARES:
Sold...................... 70,819 $ 672,727 528,231 $ 5,215,631 227,855 $ 2,381,881
Issued as reinvestment
of dividends............ 84,111 797,359 161,380 1,594,350 138,140 1,415,631
Redeemed.................. (639,996) (6,069,548) (1,116,861) (11,044,763) (909,214) (9,368,256)
---------- ------------ ---------- ------------ -------- -----------
Net decrease.............. (485,066) $ (4,599,462) (427,250) $ (4,234,782) (543,219) $(5,570,744)
========== ============ ========== ============ ========= ===========
<CAPTION>
PERIOD ENDED
MARCH 31, 1996(a)
---------------------------
SHARES DOLLARS
---------------------------
<S> <C> <C>
PRIMARY A SHARES:
Sold...................... 246,328 $ 2,659,348
Issued in exchange for
Trust A Shares of
Nations Mortgage-Backed
Securities
Fund (Note 9)........... -- --
Issued as reinvestment
of dividends............ 54,957 577,516
Redeemed.................. (41,015) (437,893)
---------- -----------
Net increase/(decrease)... 260,270 $ 2,798,971
========== ===========
PRIMARY B SHARES:
Sold......................
Issued as reinvestment
of dividends............
Redeemed..................
Net increase..............
INVESTOR A SHARES:
Sold...................... 150,996 $ 1,631,309
Issued as reinvestment
of dividends............ 14,397 154,212
Redeemed.................. (100,604) (1,084,762)
---------- -----------
Net increase/(decrease)... 64,789 $ 700,759
========== ===========
INVESTOR C SHARES:
Sold...................... 29,052 $ 309,150
Issued as reinvestment
of dividends............ 4,283 45,862
Redeemed.................. (32,809) (352,825)
---------- -----------
Net increase/(decrease)... 526 $ 2,187
========== ===========
INVESTOR N SHARES:
Sold...................... 243,789 $ 2,636,764
Issued as reinvestment
of dividends............ 92,508 991,836
Redeemed.................. (603,828) (6,485,971)
---------- -----------
Net decrease.............. (267,531) $(2,857,371)
========== ===========
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
May 31.
(c) Nations Government Securities Fund's and Nations Diversified Income Fund's
Primary B Shares commenced operations on June 28, 1996.
(d) Unaudited.
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE> 22
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET INCREASE/ DIVIDENDS DISTRIBUTIONS
NET ASSET NET REALIZED (DECREASE) FROM IN EXCESS
VALUE NET AND UNREALIZED IN NET NET OF NET
BEGINNING INVESTMENT GAIN/(LOSS) ASSET VALUE INVESTMENT INVESTMENT
OF PERIOD INCOME ON INVESTMENTS FROM OPERATIONS INCOME INCOME
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NATIONS SHORT-TERM
INCOME FUND
PRIMARY A
Six months ended 09/30/1996
(unaudited)........................ $ 9.76 $0.29 $ (0.04) $ 0.25 $ (0.29) --
Period ended 03/31/1996(a)#......... 9.84 0.20 (0.08) 0.12 (0.20) --
Year ended 11/30/1995#.............. 9.48 0.61 0.36 0.97 (0.61) --
Year ended 11/30/1994#.............. 10.01 0.50 (0.51) (0.01) (0.48) $(0.02)
Year ended 11/30/1993............... 9.75 0.53 0.26 0.79 (0.53) --
Period ended 11/30/1992*............ 10.00 0.09 (0.25) (0.16) (0.09) --
PRIMARY B
Period ended 09/30/1996*
(unaudited)........................ $ 9.71 $0.14 $ 0.01 $ 0.15 $ (0.14) --
INVESTOR A
Six months ended 09/30/1996
(unaudited)........................ $ 9.76 $0.28 $ (0.04) $ 0.24 $ (0.28) --
Period ended 03/31/1996(a)#......... 9.84 0.19 (0.08) 0.11 (0.19) --
Year ended 11/30/1995#.............. 9.48 0.59 0.36 0.95 (0.59) --
Year ended 11/30/1994#.............. 10.01 0.48 (0.51) (0.03) (0.46) $(0.02)
Year ended 11/30/1993............... 9.75 0.51 0.26 0.77 (0.51) --
Period ended 11/30/1992*............ 10.00 0.08 (0.26) (0.18) (0.07) --
INVESTOR C
Six months ended 09/30/1996
(unaudited)........................ $ 9.76 $0.28 $ (0.04) $ 0.24 $ (0.28) --
Period ended 03/31/1996(a)#......... 9.84 0.19 (0.08) 0.11 (0.19) --
Year ended 11/30/1995#.............. 9.48 0.57 0.36 0.93 (0.57) --
Year ended 11/30/1994#.............. 10.01 0.46 (0.51) (0.05) (0.44) $(0.02)
Year ended 11/30/1993............... 9.75 0.48 0.26 0.74 (0.48) --
Period ended 11/30/1992*............ 10.00 0.08 (0.26) (0.18) (0.07) --
INVESTOR N
Six months ended 09/30/1996
(unaudited)........................ $ 9.76 $0.28 $ (0.04) $ 0.24 $ (0.28) --
Period ended 03/31/1996(a)#......... 9.84 0.19 (0.08) 0.11 (0.19) --
Year ended 11/30/1995#.............. 9.48 0.57 0.36 0.93 (0.57) --
Year ended 11/30/1994#.............. 10.01 0.47 (0.51) (0.04) (0.45) $(0.02)
Period ended 11/30/1993*............ 9.94 0.22 0.07 0.29 (0.22) --
</TABLE>
- ---------------
* Nations Short-Term Income Fund's Primary A, Primary B, Investor A, Investor
C and Investor N Shares commenced operations on September 30, 1992, June 28,
1996, October 2, 1992, October 2, 1992 and June 7, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Per share numbers have been calculated using the monthly average share
method, which more appropriately represents the per share data for the
period since use of the undistributed income method did not accord with the
results of operations.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) The effect of interest expense on the operating expense ratio was less than
0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE> 23
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING NET INVESTMENT
DISTRIBUTIONS DIVIDENDS VALUE END OF EXPENSES INCOME PORTFOLIO
FROM AND END OF TOTAL PERIOD TO AVERAGE TO AVERAGE TURNOVER
CAPITAL DISTRIBUTIONS PERIOD RETURN++ (IN 000'S) NET ASSETS NET ASSETS RATE
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
-- $ (0.29) $ 9.72 2.63% $ 182,179 0.55%+(b) 6.01%+ 81%
-- (0.20) 9.76 1.19 179,957 0.55+(b) 6.07+ 73
-- (0.61) 9.84 10.48 169,291 0.56(b) 6.32 224
$ (0.02) (0.52) 9.48 (0.11) 176,712 0.50(b) 5.23 293
-- (0.53) 10.01 8.26 201,738 0.37 5.27 121
-- (0.09) 9.75 (1.58)+++ 190,680 0.30+ 5.54+ 45
-- $ (0.14) $ 9.72 1.53% $ 454 0.90%+(b) 5.66%+ 81%
-- $ (0.28) $ 9.72 2.53% $ 5,725 0.75%+(b) 5.81%+ 81%
-- (0.19) 9.76 1.13 2,810 0.75+(b) 5.87+ 73
-- (0.59) 9.84 10.29 2,969 0.76(b) 6.12 224
$ (0.02) (0.50) 9.48 (0.33) 2,490 0.71(b) 5.02 293
-- (0.51) 10.01 8.03 11,205 0.57 5.07 121
-- (0.07) 9.75 (1.81)+++ 254 0.45+ 5.39+ 45
-- $ (0.28) $ 9.72 2.45% $ 4,631 0.90%+(b) 5.66%+ 81%
-- (0.19) 9.76 1.07 6,121 0.90+(b) 5.72+ 73
-- (0.57) 9.84 10.08 6,056 0.91(b) 5.97 224
$ (0.02) (0.48) 9.48 (0.51) 8,102 0.89(b) 4.84 293
-- (0.48) 10.01 7.73 19,851 0.87 4.77 121
-- (0.07) 9.75 (1.82)+++ 6,747 0.80+ 5.04+ 45
-- $ (0.28) $ 9.72 2.45% $ 6,172 0.90%+(b) 5.66%+ 81%
-- (0.19) 9.76 1.08 7,339 0.90+(b) 5.72+ 73
-- (0.57) 9.84 10.10 8,873 0.91(b) 5.97 224
$ (0.02) (0.49) 9.48 (0.46) 16,550 0.85(b) 4.88 293
-- (0.22) 10.01 2.96 39,861 0.72+ 4.92+ 121
<CAPTION>
WITHOUT WAIVERS AND/OR
OPERATING NET
EXPENSES TO INVESTMENT
AVERAGE INCOME PER
NET ASSETS SHARE
<C> <C>
- ---------------------------------------------------------------------
0.85%+ $ 0.28
0.88+ 0.19
0.86 0.58
0.82 0.47
0.79 0.48
0.90+ 0.08
1.20%+ $ 0.13
1.05%+ $ 0.27
1.08+ 0.18
1.06 0.56
1.03 0.45
0.99 0.48
1.05+ 0.07
1.20%+ $ 0.27
1.23+ 0.18
1.21 0.54
1.21 0.43
1.29 0.45
1.40+ 0.07
1.20%+ $ 0.27
1.23+ 0.18
1.21 0.54
1.17 0.44
1.14+ 0.21
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE> 24
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET INCREASE/ DIVIDENDS
NET ASSET NET REALIZED (DECREASE) FROM
VALUE NET AND UNREALIZED IN NET NET
BEGINNING INVESTMENT GAIN/(LOSS) ASSET VALUE INVESTMENT
OF PERIOD INCOME ON INVESTMENTS FROM OPERATIONS INCOME
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS SHORT-INTERMEDIATE
GOVERNMENT FUND
PRIMARY A
Six months ended 09/30/1996 (unaudited)......... $ 4.07 $0.11 $ (0.04) $ 0.07 $ (0.11)
Period ended 03/31/1996(b)#..................... 4.14 0.07 (0.07) 0.00 (0.07)
Year ended 11/30/1995#.......................... 3.93 0.24 0.21 0.45 (0.24)
Year ended 11/30/1994........................... 4.28 0.23 (0.33) (0.10) (0.23)
Year ended 11/30/1993........................... 4.16 0.23 0.14 0.37 (0.23)
Year ended 11/30/1992........................... 4.17 0.28 (0.01) 0.27 (0.28)
Period ended 11/30/1991*........................ 4.00## 0.10 0.17 0.27 (0.10)
PRIMARY B
Period ended 09/30/1996* (unaudited)............ $ 4.02 $0.05 $ 0.01 $ 0.06 $ (0.05)
INVESTOR A
Six months ended 09/30/1996 (unaudited)......... $ 4.07 $0.11 $ (0.04) $ 0.07 $ (0.11)
Period ended 03/31/1996(b)#..................... 4.14 0.07 (0.07) 0.00 (0.07)
Year ended 11/30/1995#.......................... 3.93 0.23 0.21 0.44 (0.23)
Year ended 11/30/1994........................... 4.28 0.22 (0.33) (0.11) (0.22)
Year ended 11/30/1993........................... 4.16 0.22 0.14 0.36 (0.22)
Year ended 11/30/1992........................... 4.17 0.27 (0.01) 0.26 (0.27)
Period ended 11/30/1991*........................ 4.00## 0.10 0.17 0.27 (0.10)
INVESTOR C
Six months ended 09/30/1996 (unaudited)......... $ 4.07 $0.10 $ (0.04) $ 0.06 $ (0.10)
Period ended 03/31/1996(b)#..................... 4.14 0.07 (0.07) 0.00 (0.07)
Year ended 11/30/1995#.......................... 3.93 0.22 0.21 0.43 (0.22)
Year ended 11/30/1994........................... 4.28 0.20 (0.33) (0.13) (0.20)
Year ended 11/30/1993........................... 4.16 0.20 0.14 0.34 (0.20)
Period ended 11/30/1992*........................ 4.19 0.10 (0.03) 0.07 (0.10)
INVESTOR N
Six months ended 09/30/1996 (unaudited)......... $ 4.07 $0.10 $ (0.04) $ 0.06 $ (0.10)
Period ended 03/31/1996(b)#..................... 4.14 0.07 (0.07) 0.00 (0.07)
Year ended 11/30/1995#.......................... 3.93 0.21 0.21 0.42 (0.21)
Year ended 11/30/1994........................... 4.28 0.20 (0.33) (0.13) (0.20)
Period ended 11/30/1993*........................ 4.26 0.09 0.02 0.11 (0.09)
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
IN EXCESS FROM NET
OF NET REALIZED
INVESTMENT CAPITAL
INCOME GAINS
-----------------------------------------------
<S> <<C> <C>
NATIONS SHORT-INTERMEDIATE
GOVERNMENT FUND
PRIMARY A
Six months ended 09/30/1996 (unaudited)......... -- --
Period ended 03/31/1996(b)#..................... $(0.00)(a) --
Year ended 11/30/1995#.......................... (0.00)(a) --
Year ended 11/30/1994........................... (0.00)(a) $(0.02)
Year ended 11/30/1993........................... -- (0.02)
Year ended 11/30/1992........................... -- --
Period ended 11/30/1991*........................ -- --
PRIMARY B
Period ended 09/30/1996* (unaudited)............ -- --
INVESTOR A
Six months ended 09/30/1996 (unaudited)......... -- --
Period ended 03/31/1996(b)#..................... $(0.00)(a) --
Year ended 11/30/1995#.......................... (0.00)(a) --
Year ended 11/30/1994........................... (0.00)(a) $(0.02)
Year ended 11/30/1993........................... -- (0.02)
Year ended 11/30/1992........................... -- --
Period ended 11/30/1991*........................ -- --
INVESTOR C
Six months ended 09/30/1996 (unaudited)......... -- --
Period ended 03/31/1996(b)#..................... $(0.00)(a) --
Year ended 11/30/1995#.......................... (0.00)(a) --
Year ended 11/30/1994........................... (0.00)(a) $(0.02)
Year ended 11/30/1993........................... -- (0.02)
Period ended 11/30/1992*........................ -- --
INVESTOR N
Six months ended 09/30/1996 (unaudited)......... -- --
Period ended 03/31/1996(b)#..................... $(0.00)(a) --
Year ended 11/30/1995#.......................... (0.00)(a) --
Year ended 11/30/1994........................... (0.00)(a) $(0.02)
Period ended 11/30/1993*........................ -- --
</TABLE>
- ---------------
* Nations Short-Intermediate Government Fund's Primary A, Primary B, Investor
A, Investor C and Investor N Shares commenced operations on August 1, 1991,
June 28, 1996, August 5, 1991, June 17, 1992 and June 7, 1993,
respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Per share numbers have been calculated using the monthly average share
method, which more appropriately represents the per share data for the
period since use of the undistributed income method did not accord with the
results of operations.
## Nations Short-Intermediate Government Fund's net asset value upon
commencement of operations was $2.00 per share. Effective September 25, 1991,
the net asset value doubled as a result of the reclassification of each
outstanding share into half as many shares (reverse split).
### Amount represents less than 0.01%.
(a) Amount represents less than $0.01.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(c) The effect of interest expense on the operating expense ratio was less than
0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE> 25
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING NET INVESTMENT
DIVIDENDS VALUE END OF EXPENSES INCOME PORTFOLIO
AND END OF TOTAL PERIOD TO AVERAGE TO AVERAGE TURNOVER
DISTRIBUTIONS PERIOD RETURN++ (IN 000'S) NET ASSETS NET ASSETS RATE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ (0.11) $4.03 1.87% $ 393,234 0.65%+(c) 5.66%+ 228%
(0.07) 4.07 0.07 399,915 0.63+ 5.32+ 189
(0.24) 4.14 11.70 425,200 0.60(c) 5.88 328
(0.25) 3.93 (2.23) 433,278 0.59(c) 5.76 133
(0.25) 4.28 9.03 443,426 0.55 5.40 92
(0.28) 4.16 6.70+++ 360,497 0.37 6.48 25
(0.10) 4.17 6.81+++ 158,435 0.08+ 7.21+ 11
$ (0.05) $4.03 1.64% $ 5,746 1.00%+(c) 5.31%+ 228%
$ (0.11) $4.03 1.76% $ 47,843 0.85%+(c) 5.46%+ 228%
(0.07) 4.07 0.00### 57,381 0.83+ 5.12+ 189
(0.23) 4.14 11.48 64,848 0.80(c) 5.68 328
(0.24) 3.93 (2.41) 77,128 0.77(c) 5.58 133
(0.24) 4.28 8.85 173,449 0.70 5.25 92
(0.27) 4.16 6.61 188,624 0.48 6.34 25
(0.10) 4.17 6.81+++ 53,874 0.08+ 7.21+ 11
$ (0.10) $4.03 1.61% $ 10,517 1.15%+(c) 5.16%+ 228%
(0.07) 4.07 (0.10) 11,820 1.13+ 4.82+ 189
(0.22) 4.14 11.15 13,206 1.10(c) 5.38 328
(0.22) 3.93 (2.80) 16,725 1.17(c) 5.18 133
(0.22) 4.28 8.20 31,440 1.30 4.65 92
(0.10) 4.16 1.64+++ 24,352 1.18+ 4.80+ 25
$ (0.10) $4.03 1.56% $ 12,270 1.25%+(c) 5.06%+ 228%
(0.07) 4.07 (0.13) 13,789 1.23+ 4.72+ 189
(0.21) 4.14 11.02 14,893 1.20(c) 5.28 328
(0.22) 3.93 (2.81) 10,974 1.19(c) 5.16 133
(0.09) 4.28 2.65 8,847 1.15+ 4.80+ 92
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
- -----------------------------
RATIO OF
OPERATING NET
EXPENSES TO INVESTMENT
AVERAGE INCOME PER
NET ASSETS SHARE
- -----------------------------
<S> <C>
0.85%+ $ 0.11
0.86+ 0.06
0.80 0.23
0.80 0.22
0.79 0.22
0.77 0.26
0.82+ 0.00(a)
1.20%+ $ 0.05
1.05%+ $ 0.11
1.06+ 0.06
1.00 0.22
0.98 0.21
0.94 0.21
0.88 0.25
0.82+ 0.00(a)
1.35%+ $ 0.10
1.36+ 0.06
1.30 0.21
1.38 0.19
1.54 0.19
1.44+ 0.09
1.45%+ $ 0.10
1.46+ 0.06
1.40 0.20
1.40 0.19
1.39+ 0.09
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE> 26
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET INCREASE/ DIVIDENDS
NET ASSET NET REALIZED (DECREASE) FROM
VALUE NET AND UNREALIZED IN NET NET
BEGINNING INVESTMENT GAIN/(LOSS) ASSET VALUE INVESTMENT
OF PERIOD INCOME ON INVESTMENTS FROM OPERATIONS INCOME
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------
NATIONS STRATEGIC FIXED INCOME FUND
PRIMARY A
Six months ended 09/30/1996 (unaudited)........ $ 9.93 $ 0.28 $(0.12) $ 0.16 $(0.28)
Period ended 03/31/1996(a)..................... 10.22 0.19 (0.29) (0.10) (0.19)
Year ended 11/30/1995.......................... 9.32 0.59 0.90 1.49 (0.59)
Year ended 11/30/1994.......................... 10.55 0.53 (0.89) (0.36) (0.51)
Year ended 11/30/1993.......................... 9.94 0.56 0.62 1.18 (0.56)
Period ended 11/30/1992*....................... 10.00 0.05 (0.06) (0.01) (0.05)
PRIMARY B
Period ended 09/30/1996* (unaudited)........... $ 9.81 $ 0.13 $ 0.00 $ 0.13 $(0.13)
INVESTOR A
Six months ended 09/30/1996 (unaudited)........ $ 9.93 $ 0.27 $(0.12) $ 0.15 $(0.27)
Period ended 03/31/1996(a)..................... 10.22 0.18 (0.29) (0.11) (0.18)
Year ended 11/30/1995.......................... 9.32 0.57 0.90 1.47 (0.57)
Year ended 11/30/1994.......................... 10.55 0.51 (0.89) (0.38) (0.49)
Year ended 11/30/1993.......................... 9.94 0.54 0.62 1.16 (0.54)
Period ended 11/30/1992*....................... 9.99 0.01 (0.06) (0.05) --
INVESTOR C
Six months ended 09/30/1996 (unaudited)........ $ 9.93 $ 0.26 $(0.12) $ 0.14 $(0.26)
Period ended 03/31/1996(a)..................... 10.22 0.17 (0.29) (0.12) (0.17)
Year ended 11/30/1995.......................... 9.32 0.54 0.90 1.44 (0.54)
Year ended 11/30/1994.......................... 10.55 0.47 (0.89) (0.42) (0.45)
Year ended 11/30/1993.......................... 9.94 0.48 0.62 1.10 (0.48)
Period ended 11/30/1992*....................... 9.97 0.02 (0.04) (0.02) (0.01)
INVESTOR N
Six months ended 09/30/1996 (unaudited)........ $ 9.93 $ 0.25 $(0.12) $ 0.13 $(0.25)
Period ended 03/31/1996(a)..................... 10.22 0.16 (0.29) (0.13) (0.16)
Year ended 11/30/1995.......................... 9.32 0.53 0.90 1.43 (0.53)
Year ended 11/30/1994.......................... 10.55 0.47 (0.89) (0.42) (0.45)
Period ended 11/30/1993*....................... 10.39 0.21 0.17 0.38 (0.21)
<CAPTION>
IN EXCESS FROM NET
OF NET REALIZED
INVESTMENT CAPITAL
INCOME GAINS
<S> <<C> <C>
--------------------------------------------------------------------------
NATIONS STRATEGIC FIXED INCOME FUND
PRIMARY A
Six months ended 09/30/1996 (unaudited)........ -- --
Period ended 03/31/1996(a)..................... -- --
Year ended 11/30/1995.......................... -- --
Year ended 11/30/1994.......................... $ (0.02) $ (0.34)
Year ended 11/30/1993.......................... -- (0.01)
Period ended 11/30/1992*....................... -- --
PRIMARY B
Period ended 09/30/1996* (unaudited)........... -- --
INVESTOR A
Six months ended 09/30/1996 (unaudited)........ -- --
Period ended 03/31/1996(a)..................... -- --
Year ended 11/30/1995.......................... -- --
Year ended 11/30/1994.......................... $ (0.02) $ (0.34)
Year ended 11/30/1993.......................... -- (0.01)
Period ended 11/30/1992*....................... -- --
INVESTOR C
Six months ended 09/30/1996 (unaudited)........ -- --
Period ended 03/31/1996(a)..................... -- --
Year ended 11/30/1995.......................... -- --
Year ended 11/30/1994.......................... $ (0.02) $ (0.34)
Year ended 11/30/1993.......................... -- (0.01)
Period ended 11/30/1992*....................... -- --
INVESTOR N
Six months ended 09/30/1996 (unaudited)........ -- --
Period ended 03/31/1996(a)..................... -- --
Year ended 11/30/1995.......................... -- --
Year ended 11/30/1994.......................... $ (0.02) $ (0.34)
Period ended 11/30/1993*....................... -- (0.01)
</TABLE>
- ---------------
<TABLE>
<S> <C>
* Nations Strategic Fixed Income Fund's Primary A, Primary B, Investor A, Investor C and Investor N Shares commenced operations
on October 30, 1992, June 28, 1996, November 19, 1992, November 16, 1992 and June 7, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and does not reflect the deduction of any applicable
sales charges.
+++ Unaudited.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was November 30.
(b) The effect of interest expense on the operating expense ratio was less than 0.01%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE> 27
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
NET ASSET NET ASSETS OPERATING NET INVESTMENT
TOTAL VALUE END OF EXPENSES INCOME PORTFOLIO
DIVIDENDS AND END OF TOTAL PERIOD TO AVERAGE TO AVERAGE TURNOVER
DISTRIBUTIONS PERIOD RETURN++ (IN 000'S) NET ASSETS NET ASSETS RATE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ (0.28) $ 9.81 1.68% $ 986,087 0.71%+ 5.77%+ 210%
(0.19) 9.93 (1.04) 823,890 0.72+(b) 5.49+ 133
(0.59) 10.22 16.45 823,098 0.71 6.05 228
(0.87) 9.32 (3.58) 550,697 0.68 5.43 307
(0.57) 10.55 12.05 545,538 0.61 5.40 161
(0.05) 9.94 (0.11)+++ 581,329 0.26+ 6.15+ 12
$ (0.13) $ 9.81 1.39% $ 13,285 1.21%+ 5.27%+ 210%
$ (0.27) $ 9.81 1.58% $ 7,073 0.91%+ 5.57%+ 210%
(0.18) 9.93 (1.11) 6,440 0.92+(b) 5.29+ 133
(0.57) 10.22 16.22 6,662 0.91 5.85 228
(0.85) 9.32 (3.76) 967 0.86 5.25 307
(0.55) 10.55 11.88 1,138 0.76 5.25 161
-- 9.94 (0.49)+++ 113 0.40+ 6.00+ 12
$ (0.26) $ 9.81 1.43% $ 793 1.21%+ 5.27%+ 210%
(0.17) 9.93 (1.22) 299 1.22+(b) 4.99+ 133
(0.54) 10.22 15.87 227 1.21 5.55 228
(0.81) 9.32 (4.14) 41 1.43 4.68 307
(0.49) 10.55 11.20 65 1.36 4.65 161
(0.01) 9.94 (0.22)+++ 84 1.03+ 5.40+ 12
$ (0.25) $ 9.81 1.35% $ 2,352 1.36%+ 5.12%+ 210%
(0.16) 9.93 (1.26) 2,496 1.37+(b) 4.84+ 133
(0.53) 10.22 15.70 2,578 1.36 5.40 228
(0.81) 9.32 (4.21) 2,145 1.33 4.78 307
(0.22) 10.55 3.64 1,620 1.26+ 4.75+ 161
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
- ---------------------------
RATIO OF
OPERATING NET
EXPENSES TO INVESTMENT
AVERAGE INCOME PER
NET ASSETS SHARE
- ---------------------------
<S> <C>
0.81%+
0.83+ $ 0.28
0.81 0.19
0.76 0.58
0.77 0.52
0.86+ 0.55
1.31%+ 0.04
1.01%+ $ 0.13
1.03+ $ 0.27
1.01 0.18
0.94 0.56
0.92 0.50
1.00+ 0.53
1.31%+ 0.01
1.33+ $ 0.26
1.31 0.17
1.51 0.53
1.52 0.46
1.63+ 0.47
1.46%+ 0.02
1.48+ $ 0.25
1.46 0.16
1.41 0.52
1.42+ 0.46
0.21
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE> 28
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET INCREASE/ DIVIDENDS
NET ASSET NET REALIZED (DECREASE) FROM
VALUE NET AND UNREALIZED IN NET NET
BEGINNING INVESTMENT GAIN/(LOSS) ASSET VALUE INVESTMENT
OF PERIOD INCOME ON INVESTMENTS FROM OPERATIONS INCOME
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------
NATIONS GOVERNMENT SECURITIES FUND
PRIMARY A
Six months ended 09/30/1996 (unaudited)...... $ 9.67 $ 0.30 $(0.15) $ 0.15 $(0.30)
Period ended 03/31/1996(a)#.................. 9.86 0.52 (0.19) 0.33 (0.50)
Year ended 05/31/1995#....................... 9.80 0.64 0.06 0.70 (0.60)
Year ended 05/31/1994........................ 10.46 0.64 (0.61) 0.03 (0.58)
Year ended 05/31/1993#....................... 10.36 0.71 0.13 0.84 (0.70)
Year ended 05/31/1992........................ 10.05 0.74 0.37 1.11 (0.77)
Period ended 05/31/1991*..................... 10.00 0.10 0.02 0.12 (0.07)
PRIMARY B
Period ended 09/30/1996* (unaudited)......... $ 9.51 $ 0.14 $ 0.01 $ 0.15 $(0.14)
INVESTOR A
Six months ended 09/30/1996 (unaudited)...... $ 9.67 $ 0.28 $(0.15) $ 0.13 $(0.28)
Period ended 03/31/1996(a)#.................. 9.86 0.50 (0.19) 0.31 (0.48)
Year ended 05/31/1995#....................... 9.80 0.61 0.06 0.67 (0.57)
Year ended 05/31/1994........................ 10.46 0.62 (0.61) 0.01 (0.56)
Year ended 05/31/1993#....................... 10.36 0.66 0.16 0.82 (0.68)
Year ended 05/31/1992........................ 10.05 0.71 0.38 1.09 (0.75)
Period ended 05/31/1991*..................... 10.01 0.09 0.02 0.11 (0.07)
INVESTOR C
Six months ended 09/30/1996 (unaudited)...... $ 9.67 $ 0.27 $(0.15) $ 0.12 $(0.27)
Period ended 03/31/1996(a)#.................. 9.86 0.47 (0.19) 0.28 (0.45)
Year ended 05/31/1995#....................... 9.80 0.57 0.06 0.63 (0.53)
Year ended 05/31/1994........................ 10.46 0.55 (0.61) (0.06) (0.50)
Period ended 05/31/1993*#.................... 10.52 0.59 0.02 0.61 (0.63)
INVESTOR N
Six months ended 09/30/1996 (unaudited)...... $ 9.67 $ 0.27 $(0.15) $ 0.12 $(0.27)
Period ended 03/31/1996(a)#.................. 9.86 0.47 (0.19) 0.28 (0.45)
Year ended 05/31/1995#....................... 9.80 0.58 0.06 0.64 (0.54)
Period ended 05/31/1994*..................... 10.49 0.54 (0.64) (0.10) (0.49)
<CAPTION>
IN EXCESS IN EXCESS
OF NET OF NET REALIZED
INVESTMENT CAPITAL
INCOME GAINS
<S> <<C> <C>
---------------------------------------------------------------------------
NATIONS GOVERNMENT SECURITIES FUND
PRIMARY A
Six months ended 09/30/1996 (unaudited)...... -- --
Period ended 03/31/1996(a)#.................. $ (0.02) --
Year ended 05/31/1995#....................... -- --
Year ended 05/31/1994........................ (0.02) $ (0.05)
Year ended 05/31/1993#....................... -- (0.04)
Year ended 05/31/1992........................ -- (0.03)
Period ended 05/31/1991*..................... -- --
PRIMARY B
Period ended 09/30/1996* (unaudited)......... -- --
INVESTOR A
Six months ended 09/30/1996 (unaudited)...... -- --
Period ended 03/31/1996(a)#.................. $ (0.02) --
Year ended 05/31/1995#....................... -- --
Year ended 05/31/1994........................ (0.02) $ (0.05)
Year ended 05/31/1993#....................... -- (0.04)
Year ended 05/31/1992........................ -- (0.03)
Period ended 05/31/1991*..................... -- --
INVESTOR C
Six months ended 09/30/1996 (unaudited)...... -- --
Period ended 03/31/1996(a)#.................. $ (0.02) --
Year ended 05/31/1995#....................... -- --
Year ended 05/31/1994........................ (0.01) $ (0.05)
Period ended 05/31/1993*#.................... -- (0.04)
INVESTOR N
Six months ended 09/30/1996 (unaudited)...... -- --
Period ended 03/31/1996(a)#.................. $ (0.02) --
Year ended 05/31/1995#....................... -- --
Period ended 05/31/1994*..................... (0.01) $ (0.05)
</TABLE>
- ---------------
<TABLE>
<S> <C>
* Nations Government Securities Fund's Primary A, Primary B, Investor A, Investor C and Investor N Shares commenced operations
on April 11, 1991, June 28, 1996, April 17, 1991, July 6, 1992 and June 7, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and does not reflect the deduction of any applicable
sales charges.
+++ Unaudited.
# Per share numbers have been calculated using the monthly average share method, which more appropriately represents the per
share data for the period since use of the undistributed income method did not accord with the results of operations.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was May 31.
(b) The effect of interest expense on the operating expense ratio was less than 0.01%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE> 29
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
NET ASSET NET ASSETS OPERATING NET INVESTMENT
DISTRIBUTIONS TOTAL VALUE END OF EXPENSES INCOME PORTFOLIO
FROM DIVIDENDS AND END OF TOTAL PERIOD TO AVERAGE TO AVERAGE TURNOVER
CAPITAL DISTRIBUTIONS PERIOD RETURN++ (IN 000'S) NET ASSETS NET ASSETS RATE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
-- $ (0.30) $ 9.52 1.57% $53,571 0.80%+ 6.22%+ 196%
-- (0.52) 9.67 3.41 55,962 0.80+(b) 6.36+ 199
$ (0.04) (0.64) 9.86 7.55 39,909 0.76 6.69 413
(0.04) (0.69) 9.80 0.06 44,536 0.73 6.08 56
-- (0.74) 10.46 8.37 40,472 0.85 6.67 103
-- (0.80) 10.36 11.43+++ 42,256 1.06 7.15 130
-- (0.07) 10.05 1.19+++ 10,047 1.10+ 7.18+ 5
-- $ (0.14) $ 9.52 1.54% $ 523 1.30%+ 5.72%+ 196%
-- $ (0.28) $ 9.52 1.44% $10,758 1.05%+ 5.97%+ 196%
-- (0.50) 9.67 3.20 11,662 1.05+(b) 6.11+ 199
$ (0.04) (0.61) 9.86 7.29 10,928 1.01 6.44 413
(0.04) (0.67) 9.80 (0.11) 14,044 0.90 5.91 56
-- (0.72) 10.46 8.18 15,354 1.00 6.52 103
-- (0.78) 10.36 11.18+++ 3,326 1.31 6.90 130
-- (0.07) 10.05 1.07+++ 661 1.35+ 7.22+ 5
-- $ (0.27) $ 9.52 1.31% $ 2,220 1.30%+ 5.72%+ 196%
-- (0.47) 9.67 2.83 2,558 1.48+(b) 5.68+ 199
$ (0.04) (0.57) 9.86 6.76 2,945 1.51 5.94 413
(0.04) (0.60) 9.80 (0.69) 5,265 1.48 5.33 56
-- (0.67) 10.46 5.37 5,998 1.60+ 5.92+ 103
-- $ (0.27) $ 9.52 1.24% $45,536 1.45%+ 5.57%+ 196%
-- (0.47) 9.67 2.85 50,958 1.45+(b) 5.71+ 199
$ (0.04) (0.58) 9.86 6.86 56,155 1.41 6.04 413
(0.04) (0.59) 9.80 (1.09) 56,313 1.38+ 5.43+ 56
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
- ---------------------------
RATIO OF
OPERATING NET
EXPENSES TO INVESTMENT
AVERAGE INCOME PER
NET ASSETS SHARE
- ---------------------------
<S> <C>
0.93%+ $ 0.29
0.95+ 0.51
0.94 0.62
0.94 0.61
1.00 0.60
1.72 0.07
1.69+++ 0.09+++
1.43%+ $ 0.13
1.18%+ $ 0.27
1.20+ 0.49
1.19 0.59
1.11 0.59
1.15 0.55
1.97 0.07
1.94+++ 0.08+++
1.43%+ $ 0.26
1.63+ 0.46
1.69 0.55
1.69 0.53
1.75+ 0.42
1.58%+ $ 0.26
1.60+ 0.46
1.59 0.56
1.59+ 0.52
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE> 30
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET INCREASE/ DIVIDENDS
NET ASSET NET REALIZED (DECREASE) FROM
VALUE NET AND UNREALIZED IN NET NET
BEGINNING INVESTMENT GAIN/(LOSS) ASSET VALUE INVESTMENT
OF PERIOD INCOME ON INVESTMENTS FROM OPERATIONS INCOME
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS DIVERSIFIED
INCOME FUND
PRIMARY A
Six months ended 09/30/1996 (unaudited)......... $10.42 $0.35 $ (0.11) $ 0.24 $ (0.35)
Period ended 03/31/1996(b)...................... 10.82 0.23 (0.40) (0.17) (0.23)
Year ended 11/30/1995........................... 9.67 0.73 1.15 1.88 (0.73)
Year ended 11/30/1994#.......................... 10.88 0.74 (1.06) (0.32) (0.74)
Year ended 11/30/1993#.......................... 9.97 0.78 0.91 1.69 (0.78)
Period ended 11/30/1992*........................ 10.00 0.06 (0.03) 0.03 (0.06)
PRIMARY B
Period ended 09/30/1996* (unaudited)............ $10.28 $0.16 $ 0.03 $ 0.19 $ (0.16)
INVESTOR A
Six months ended 09/30/1996 (unaudited)......... $10.42 $0.33 $ (0.11) $ 0.22 $ (0.33)
Period ended 03/31/1996(b)...................... 10.82 0.22 (0.40) (0.18) (0.22)
Year ended 11/30/1995........................... 9.67 0.71 1.15 1.86 (0.71)
Year ended 11/30/1994#.......................... 10.88 0.72 (1.06) (0.34) (0.72)
Year ended 11/30/1993#.......................... 9.96 0.76 0.92 1.68 (0.76)
Period ended 11/30/1992*........................ 10.02 0.01 (0.06) (0.05) (0.01)
INVESTOR C
Six months ended 09/30/1996 (unaudited)......... $10.42 $0.32 $ (0.11) $ 0.21 $ (0.32)
Period ended 03/31/1996(b)...................... 10.82 0.21 (0.40) (0.19) (0.21)
Year ended 11/30/1995........................... 9.67 0.66 1.15 1.81 (0.66)
Year ended 11/30/1994#.......................... 10.88 0.67 (1.06) (0.39) (0.67)
Year ended 11/30/1993#.......................... 9.96 0.70 0.92 1.62 (0.70)
Period ended 11/30/1992*........................ 9.93 0.03 0.02 0.05 (0.02)
INVESTOR N
Six months ended 09/30/1996 (unaudited)......... $10.42 $0.31 $ (0.11) $ 0.20 $ (0.31)
Period ended 03/31/1996(b)...................... 10.82 0.21 (0.40) (0.19) (0.21)
Year ended 11/30/1995........................... 9.67 0.66 1.15 1.81 (0.66)
Year ended 11/30/1994#.......................... 10.88 0.67 (1.06) (0.39) (0.67)
Period ended 11/30/1993*#....................... 10.59 0.30 0.29 0.59 (0.30)
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
IN EXCESS FROM NET
OF NET REALIZED
INVESTMENT CAPITAL
INCOME GAINS
---------------------------------------------------------------------------
<S> <C> <C>
NATIONS DIVERSIFIED
INCOME FUND
PRIMARY A
Six months ended 09/30/1996 (unaudited)......... -- --
Period ended 03/31/1996(b)...................... -- --
Year ended 11/30/1995........................... -- --
Year ended 11/30/1994#.......................... $(0.00)(a) $(0.15)
Year ended 11/30/1993#.......................... -- --
Period ended 11/30/1992*........................ -- --
PRIMARY B
Period ended 09/30/1996* (unaudited)............ -- --
INVESTOR A
Six months ended 09/30/1996 (unaudited)......... -- --
Period ended 03/31/1996(b)...................... -- --
Year ended 11/30/1995........................... -- --
Year ended 11/30/1994#.......................... $(0.00)(a) $(0.15)
Year ended 11/30/1993#.......................... -- --
Period ended 11/30/1992*........................ -- --
INVESTOR C
Six months ended 09/30/1996 (unaudited)......... -- --
Period ended 03/31/1996(b)...................... -- --
Year ended 11/30/1995........................... -- --
Year ended 11/30/1994#.......................... $(0.00)(a) $(0.15)
Year ended 11/30/1993#.......................... -- --
Period ended 11/30/1992*........................ -- --
INVESTOR N
Six months ended 09/30/1996 (unaudited)......... -- --
Period ended 03/31/1996(b)...................... -- --
Year ended 11/30/1995........................... -- --
Year ended 11/30/1994#.......................... $(0.00)(a) $(0.15)
Period ended 11/30/1993*#....................... -- --
</TABLE>
- ---------------
* Nations Diversified Income Fund's Primary A, Primary B, Investor A, Investor
C and Investor N Shares commenced operations on October 30, 1992, June 28,
1996, November 25, 1992, November 9, 1992 and June 7, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Per share numbers have been calculated using the monthly average share
method, which more appropriately represents the per share data for the period
since use of the undistributed income method did not accord with the results
of operations.
(a) Amount represents less than $0.01.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE> 31
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING NET INVESTMENT
DIVIDENDS VALUE END OF EXPENSES INCOME PORTFOLIO
AND END OF TOTAL PERIOD TO AVERAGE TO AVERAGE TURNOVER
DISTRIBUTIONS PERIOD RETURN++ (IN 000'S) NET ASSETS NET ASSETS RATE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (0.35) $10.31 2.33% $103,471 0.76%+ 6.71%+ 156%
(0.23) 10.42 (1.59) 65,081 0.77+ 6.49+ 69
(0.73) 10.82 20.11 64,800 0.80 7.03 96
(0.89) 9.67 (3.05) 22,298 0.74 7.31 144
(0.78) 10.88 17.40 28,553 0.55 7.02 86
(0.06) 9.97 0.32+++ 23,962 0.25+ 7.76+ 46
$ (0.16) $10.31 1.85% $ 35 1.26%+ 6.21%+ 156%
$ (0.33) $10.31 2.20% $ 12,382 1.01%+ 6.46%+ 156%
(0.22) 10.42 (1.67) 13,332 1.02+ 6.24+ 69
(0.71) 10.82 19.82 13,150 1.05 6.78 96
(0.87) 9.67 (3.26) 10,819 0.96 7.09 144
(0.76) 10.88 17.32 13,291 0.70 6.87 86
(0.01) 9.96 (0.49)+++ 18 0.40+ 7.61+ 46
$ (0.32) $10.31 2.07% $ 3,767 1.26%+ 6.21%+ 156%
(0.21) 10.42 (1.77) 3,454 1.33+ 5.93+ 69
(0.66) 10.82 19.22 3,582 1.55 6.28 96
(0.82) 9.67 (3.77) 2,636 1.49 6.56 144
(0.70) 10.88 16.65 3,633 1.30 6.27 86
(0.02) 9.96 0.54+++ 149 1.00+ 7.01+ 46
$ (0.31) $10.31 1.94% $ 78,243 1.51%+ 5.96%+ 156%
(0.21) 10.42 (1.83) 84,692 1.52+ 5.74+ 69
(0.66) 10.82 19.22 90,887 1.55 6.28 96
(0.82) 9.67 (3.77) 55,058 1.49 6.56 144
(0.30) 10.88 5.58 24,630 1.30+ 6.27+ 86
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
- ---------------------------
RATIO OF
OPERATING NET
EXPENSES TO INVESTMENT
AVERAGE INCOME PER
NET ASSETS SHARE
- ---------------------------
<S> <C>
0.86%+ $ 0.35
0.87+ 0.23
0.93 0.72
0.95 0.72
0.95 0.70
0.85+ 0.05
1.36%+ $ 0.16
1.11%+ $ 0.33
1.12+ 0.22
1.18 0.70
1.17 0.70
1.10 0.70
1.00+ 0.01
1.36%+ $ 0.32
1.43+ 0.21
1.68 0.65
1.70 0.65
1.70 0.64
1.60+ 0.03
1.61%+ $ 0.31
1.62+ 0.21
1.68 0.65
1.70 0.65
1.70+ 0.27
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE> 32
NATIONS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
Nations Fund Trust (the "Trust") and Nations Fund, Inc. (the "Company") are
registered under the Investment Company Act of 1940, as amended, (the "1940
Act"), as open-end investment companies. As of the date of this report, the
Trust offers thirty-two separate portfolios and the Company offers five separate
portfolios. Information presented in these financial statements pertains only
to: Nations Short-Term Income Fund, Nations Short-Intermediate Government Fund,
Nations Strategic Fixed Income Fund, Nations Government Securities Fund and
Nations Diversified Income Fund, (each a "Fund" and collectively, the "Funds").
The financial statements for the remaining funds of the Trust and the Company
are presented under separate cover. The Funds currently offer five classes of
shares: Primary A Shares, Primary B Shares, Investor A Shares, Investor C Shares
and Investor N Shares. Shareholders of a Fund have equal voting rights on
matters affecting all shareholders of the Fund. In addition, each class of
shares of a Fund has exclusive voting rights on matters that relate solely to
its class and separate voting rights on matters in which the interests of one
class of shares differs from the interests of any other class. The preparation
of financial statements in accordance with generally accepted accounting
principles requires management to make estimates and assumptions that affect the
reported amounts and disclosures in the financial statements. Actual results
could differ from those estimates. The following is a summary of significant
accounting policies followed by the Funds in the preparation of their financial
statements.
Securities Valuation: The Funds' portfolio securities are valued using broker
quotations or prices provided by a pricing service. Certain securities are
valued using broker quotations that are based on a matrix pricing system which
considers such factors as security prices, yields and maturities. The value of
mortgage-backed securities can be significantly affected by changes in interest
rates. Certain securities may be valued by one or more principal market makers.
Restricted securities, securities for which market quotations are not readily
available, and other assets are valued at fair value under the supervision of
the Board of Trustees or the Board of Directors. Short-term investments that
mature in 60 days or less are valued at amortized cost.
Repurchase Agreements: Each Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
This arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The value of the collateral
securities is at least equal at all times to the total amount of the repurchase
obligations, including interest. Generally, in the event of counterparty
default, the Fund has the right to use the collateral to offset losses incurred.
There would be a potential loss to the Fund in the event the Fund is delayed or
prevented from exercising its rights to dispose of the collateral securities,
including the risk of a possible decline in the value of the underlying
securities during the period while the Fund seeks to assert its right. Unless
permitted by the Securities and Exchange Commission, the Fund will not enter
into repurchase agreements with its investment adviser, distributor or any of
their affiliates. The Funds' investment adviser, acting under the supervision of
the Board of Trustees and the Board of Directors, monitors the value of the
collateral received as well as the creditworthiness of those banks and dealers
with which the Funds enter into repurchase agreements to evaluate potential
risks.
Dollar Roll Transactions: Certain Funds may enter into dollar roll transactions
with financial institutions to take advantage of opportunities in the mortgage
market. Dollar roll transactions consist of the sale by the Fund of mortgage-
backed or other asset-backed securities, with a commitment to purchase similar,
but not identical, securities at a future date, at the same price. The Funds are
paid a fee as consideration for entering into a commitment to purchase the
securities. This fee accrues as income over the duration of the dollar roll
contract. If the broker/dealer to whom a Fund sells the security becomes
insolvent, the Fund's right to purchase or repurchase the security may be
restricted; the value of the security may change adversely over the term of the
dollar roll; the security that the Fund is required to repurchase may be worth
less than the security that the Fund originally held, and the return earned by
the Fund in addition to the proceeds of a dollar roll sale may not exceed
transaction costs.
Securities Transactions and Investment Income: Securities transactions are
accounted for on a trade date basis. Realized gains and losses are computed on
the specific identification of the securities sold. Interest income, adjusted
for amortization of market discounts and premiums on investments, is earned from
the settlement date and is recorded on the accrual basis. Amortization of
discounts and premiums on stripped mortgage-backed securities, zero-coupon
bonds, original issue discount bonds and step-up bonds is accounted for using
the effective yield method. Dividend income is
30
<PAGE> 33
NATIONS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
recorded on the ex-dividend date. Each Fund's investment income and realized and
unrealized gains and losses are allocated among its classes based upon the
relative net assets of each class of shares.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date; interest income is not accrued
until the settlement date. Each Fund instructs the custodian to segregate assets
with a current value at least equal to the amount of its when-issued purchase
commitments.
Stripped mortgage-backed securities are derivative multi-class mortgage
securities structured so that one class receives most, if not all, of the
principal from the mortgage assets, while the other class receives most, if not
all, of the interest and the remainder of the principal. If the underlying
mortgage assets experience greater than anticipated repayments of principal, a
Fund may fail to fully recoup its initial investment in an interest only
security. The fair market value of these securities is unusually volatile in
response to changes in interest rates.
Dividends and Distributions to Shareholders: It is the policy of each Fund to
declare dividends daily from net investment income and to pay such dividends
monthly. Each Fund will distribute net realized capital gains (including net
short-term capital gains), annually after the fiscal year in which earned unless
offset by any available capital loss carryforward. Additional distributions of
net investment income and capital gains may be made at the discretion of the
Board of Trustees or the Board of Directors in order to avoid application of the
4% non-deductible Federal excise tax. Income distributions and capital gain
distributions on a Fund level are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to timing differences and differing
characterization of distributions made by the Fund as a whole.
Federal Income Tax: Each Fund intends to qualify as a regulated investment
company by complying with the requirements of the Internal Revenue Code of 1986,
as amended, applicable to regulated investment companies and by distributing
substantially all of its earnings to its shareholders. Therefore, no Federal
income or excise tax provision is required.
Expenses: General expenses of the Trust or the Company are allocated to the
relevant Funds based upon their relative net assets. Operating expenses directly
attributable to a Fund or class of shares are charged to such Fund's or class's
operations. Expenses of each Fund not directly attributable to the operations of
any class of shares are prorated among the classes based on the relative average
net assets of each class of shares.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS.
The Trust and the Company each have, on behalf of its Funds, entered into an
investment advisory agreement ("Investment Advisory Agreement") with NationsBanc
Advisors, Inc. ("NBAI"), a wholly-owned subsidiary of NationsBank, N.A.
("NationsBank"), pursuant to which NBAI provides investment advisory services to
the Funds. Under the terms of these Investment Advisory Agreements, NBAI is
entitled to receive an advisory fee, at the annual rates of 0.60% of the average
daily net assets of Nations Short-Term Income Fund, Nations Short-Intermediate
Government Fund, Nations Strategic Fixed Income Fund and Nations Diversified
Income Fund; and 0.65% of the average daily net assets up to $100 million, 0.55%
of the average daily net assets between $100 million and $250 million, and 0.50%
of the average daily net assets exceeding $250 million for Nations Government
Securities Fund.
The Trust and the Company each have entered into sub-advisory agreements
("Sub-Advisory Agreements") with NBAI and TradeStreet Investment Associates,
Inc. ("TradeStreet"), a wholly-owned subsidiary of NationsBank. Under the terms
of these Sub-Advisory Agreements, TradeStreet is entitled to receive from NBAI a
sub-advisory fee for each Fund at the annual rate of 0.15% of each Fund's
average daily net assets.
Stephens Inc. ("Stephens") serves as the administrator of the Trust and the
Company pursuant to separate administration agreements ("Administration
Agreements"). First Data Investor Services Group, Inc. ("First Data"), a wholly-
owned subsidiary of First Data Corporation, serves as the co-administrator of
the Trust and the Company pursuant to separate co-administration agreements
("Co-Administration Agreements"). Pursuant to the Administration and Co-
Administration Agreements, the administrator and the co-administrator are
entitled to receive a combined fee, computed daily and paid monthly, at the
annual rate of 0.10% of the average daily net assets of the investment
portfolios of the Trust and the Company and the investment portfolios of Nations
Fund Portfolios, Inc. (another registered open-end investment company which is a
part of the Nations Fund Family) on a combined basis. NationsBank serves as the
sub-administrator
31
<PAGE> 34
NATIONS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
of the Trust and the Company pursuant to a sub-administration agreement
("Sub-Administration Agreement") with Stephens. For the six months ended
September 30, 1996, Stephens earned $558,004 from the Funds for its
administration services of which $93,954 was paid to NationsBank for it
sub-administration services.
The investment adviser, sub-adviser, administrator and co-administrator may,
from time to time, reduce their fees payable by each Fund (either voluntarily or
pursuant to applicable state limitations). For the six months ended September
30, 1996, the investment adviser voluntarily waived fees as follows:
<TABLE>
<CAPTION>
FEES WAIVED BY
ADVISER
-------------
<S> <C>
Nations Short-Term Income Fund....................................... $299,247
Nations Short-Intermediate Government Fund........................... 477,066
Nations Strategic Fixed Income Fund.................................. 446,615
Nations Government Securities Fund................................... 79,293
Nations Diversified Income Fund...................................... 96,497
</TABLE>
NationsBank of Texas, N.A. ("NationsBank of Texas"), acts as the custodian for
the Funds and, for the six months ended September 30, 1996, earned $150,573 for
providing such services. First Data also serves as the transfer agent for the
Funds' shares. NationsBank of Texas also acts as the sub-transfer agent for the
Primary A Shares and Primary B Shares of the Funds and, for the six months ended
September 30, 1996, earned approximately $14,483 for providing such services.
Stephens serves as distributor of the Funds' shares. For the six months ended
September 30, 1996, the Funds were informed that the distributor received
$286,548 in contingent deferred sales charges from Investor A, Investor C and
Investor N Shares of the Funds. A substantial portion of these fees are paid to
affiliates of NationsBank.
No officer, director or employee of NBAI, TradeStreet, Stephens, First Data, or
any affiliate thereof, receives any compensation from the Trust or the Company
for serving as a trustee, director or officer of the Trust or the Company
("Trustee or Director"). The Trust and the Company pay each Trustee or Director
an annual fee of $1,000 ($3,000 for the Chairman of the Board), plus $500 per
Fund and an additional $1,000 for each in-person board meeting, and $500 for
each telephonic board meeting attended. The Trust and the Company also reimburse
expenses incurred by each Trustee or Director in attending such meetings.
The Trust's and the Company's eligible Trustees or Directors, respectively, may
participate in a non-qualified deferred compensation plan and retirement plan
which may be terminated at any time. All benefits provided under these plans are
unfunded and any payments to plan participants are paid solely out of the Funds'
assets. Income earned on each plan participant's deferral account is tied to the
rate of return of the eligible mutual funds selected by the participants or, if
no funds are selected, to the rate of return of Nations Treasury Fund, another
fund of the Company. The expense for the deferred compensation plan is included
in the "Trustees'/Directors' Fees and Expenses" line of the Statements of
Operations.
3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS.
The Trust and the Company each have adopted shareholder administration plans
(each an "Administration Plan") for Primary B Shares of each Fund; shareholder
servicing and distribution plans pursuant to Rule 12b-1 under the 1940 Act for
Investor A Shares of each Fund ("Investor A Plan"); a shareholder servicing plan
("Servicing Plan") for Investor A Shares of Nations Short-Term Income Fund,
Investor C Shares and Investor N Shares of each Fund; and a distribution plan
("Distribution Plan") pursuant to Rule 12b-1 for Investor C Shares and Investor
N Shares of each Fund. The Administration Plan permits the Funds to compensate
institutions for shareholder administration services provided to their customers
that own Primary B Shares. The Investor A Plan permits the Funds to compensate
(i) servicing agents and selling agents that have entered into a servicing
agreement with the Funds for services provided to their customers that own
Investor A Shares and (ii) Stephens for distribution-related expenses incurred
in connection with Investor A Shares. The Servicing Plan permits the Funds to
compensate servicing agents for services provided to their customers that own
Investor A Shares of Nations Short-Term Income Fund, Investor C Shares and
Investor N Shares, respectively. The Distribution Plan permits the Funds to
compensate or reimburse Stephens for any activities or expenses primarily
intended to result in the sale of the Funds' Investor C Shares or Investor N
Shares, respectively. Payments under the
32
<PAGE> 35
NATIONS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
plans are accrued daily and paid monthly at a rate set from time to time by the
Funds. Fees paid pursuant to the plans are charged as expenses of each Fund as
accrued by Primary B Shares, Investor A Shares, Investor C Shares and Investor N
Shares, respectively.
For the six months ended September 30, 1996, the effective rates paid by the
Funds, as a percentage of average daily net assets, pursuant to the plans are as
follows:
<TABLE>
<CAPTION>
PRIMARY B INVESTOR C INVESTOR C INVESTOR N INVESTOR N
ADMINISTRATION INVESTOR A DISTRIBUTION SERVICING DISTRIBUTION SERVICING
FUND PLAN PLAN PLAN PLAN PLAN PLAN
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Nations Short-Term Income Fund............... 0.35% 0.20% 0.10% 0.25% 0.10% 0.25%
Nations Short-Intermediate Government Fund... 0.35% 0.20% 0.25% 0.25% 0.35% 0.25%
Nations Strategic Fixed Income Fund.......... 0.50% 0.20% 0.25% 0.25% 0.40% 0.25%
Nations Government Securities Fund........... 0.50% 0.25% 0.25% 0.25% 0.40% 0.25%
Nations Diversified Income Fund.............. 0.50% 0.25% 0.25% 0.25% 0.50% 0.25%
</TABLE>
A substantial portion of the fees paid pursuant to the plans described above are
paid to affiliates of NationsBank and NBAI.
4. PURCHASES AND SALES OF SECURITIES.
The aggregate cost of purchases and proceeds from sales of securities, excluding
U.S. government securities and short-term investments, for the six months ended
September 30, 1996 was as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-----------------------------
<S> <C> <C>
Nations Short-Term Income Fund.................................. $ 97,207,980 $ 74,716,258
Nations Strategic Fixed Income Fund............................. 341,752,425 189,334,159
Nations Diversified Income Fund................................. 55,565,473 56,724,459
</TABLE>
The aggregate cost of purchases and proceeds from sales of long-term U.S.
government securities for the six months ended September 30, 1996 was as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
--------------------------------
<S> <C> <C>
Nations Short-Term Income Fund................................ $ 62,348,977 $ 83,457,730
Nations Short-Intermediate Government Fund.................... 1,066,343,447 1,164,959,356
Nations Strategic Fixed Income Fund........................... 1,620,335,102 1,655,034,758
Nations Government Securities Fund............................ 223,189,596 230,591,148
Nations Diversified Income Fund............................... 266,103,073 229,898,522
</TABLE>
At September 30, 1996, aggregate gross unrealized appreciation and unrealized
depreciation for tax purposes was as follows:
<TABLE>
<CAPTION>
TAX BASIS TAX BASIS
UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION
---------------------------
<S> <C> <C>
Nations Short-Term Income Fund.................................... $ 722,123 $ 740,879
Nations Short-Intermediate Government Fund........................ 1,840,553 2,369,803
Nations Strategic Fixed Income Fund............................... 4,423,871 4,746,587
Nations Government Securities Fund................................ 462,178 1,121,994
Nations Diversified Income Fund................................... 1,268,517 1,733,120
</TABLE>
5. SHARES OF BENEFICIAL INTEREST/CAPITAL STOCK.
As of September 30, 1996, an unlimited number of shares without par value were
authorized for the Trust and 270,000,000,000 shares of $.001 par value capital
stock were authorized for the Company. The Trust's Declaration of Trust
authorizes the Board of Trustees to classify or reclassify any authorized, but
unissued shares into one or more additional classes or series of shares. See
Schedule of Capital Stock Activity.
33
<PAGE> 36
NATIONS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
6. ORGANIZATION COSTS.
The Funds bear all costs in connection with their organization, including the
fees and expenses of registering and qualifying their shares for distribution
under Federal and state securities regulations. All such costs are being
amortized on the straight-line method over a period of five years from
commencement of operations. In the event that any of the shares issued by the
Funds to their sponsor prior to the commencement of the Funds' public offering
("initial shares") are redeemed during such amortization period by any holder
thereof, the Funds will be reimbursed by the holder for any unamortized
organization costs in the same proportion as the number of initial shares
redeemed bears to the number of initial shares outstanding at the time of
redemption. All such costs for Nations Short-Intermediate Government Fund and
Nations Government Securities Fund have been fully amortized.
7. LINE OF CREDIT.
The Trust and the Company participate in a $25 million line of credit provided
by Mellon Bank, N.A. ("Mellon Bank") under a line of credit agreement (the
"Agreement") dated March 17, 1996. Advances under the Agreement are taken
primarily for temporary or emergency purposes, including the meeting of
redemption requests that otherwise might require the untimely disposition of
securities. Under the Agreement, each Fund may borrow up to the lesser of $10
million or 5% of its net assets. Interest on borrowings is payable either at the
higher of Mellon Bank's Money Market Rate or the London Interbank Offered Rate
(LIBOR) plus 0.25% on an annualized basis. The Funds and the other affiliated
entities which are parties to the Agreement are charged an aggregate commitment
fee of 0.25% per annum on the amount of the line of credit. Each Fund shall be
liable only for that portion of any commitment fee with respect to such Fund and
shall not be liable for the portion of the commitment fee of any other fund. The
Agreement requires, among other things, that each participating Fund maintain a
ratio of no less than 4 to 1 of net assets (not including funds borrowed
pursuant to the Agreement) to aggregate amount of indebtedness permitted
pursuant to the Agreement.
At September 30, 1996, there were no loans outstanding under this Agreement.
During the six months ended September 30, 1996, the following Funds borrowed
under this Agreement:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AVERAGE INTEREST
AMOUNT AMOUNT AVERAGE DEBT RATE INTEREST
FUND OUTSTANDING OUTSTANDING SHARES PER SHARE HIGH LOW EXPENSE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Nations Short-Term Income Fund........ $ 200,000 $ 1,093 20,394,500 $ 0.00(a) 6.00% 6.00% $33
Nations Short-Intermediate Government
Fund................................ 500,000 2,732 118,379,263 0.00(a) 5.50 5.50 77
</TABLE>
- ---------------
(a) Amount represents less than $0.01 per share.
The average amount outstanding was calculated by adding the borrowings at the
end of each day and dividing the sum by the number of days in the six month
period ended September 30, 1996.
8. CAPITAL LOSS CARRYFORWARD.
At March 31, 1996, the following Funds had available for Federal income tax
purposes the following unused capital losses:
<TABLE>
<CAPTION>
LOSSES DEFERRED LOSSES DEFERRED
FUND EXPIRING IN 2002 EXPIRING IN 2003
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Nations Short-Term Income Fund................................. $ 6,266,621 $ 650,652
Nations Short-Intermediate Government Fund..................... 15,004,550 --
Nations Government Securities Fund............................. 2,565,227 6,633,456
</TABLE>
34
<PAGE> 37
NATIONS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
9. REORGANIZATION.
The Acquiring Fund, as listed below, acquired the assets and certain liabilities
of the Acquired Fund, also listed below, in a tax-free exchange for shares of
the Acquiring Fund, pursuant to a plan of reorganization approved by the
Acquired Fund's shareholders. Total shares issued by the Acquiring Fund, the
value of the shares issued by the Acquiring Fund, the total net assets of the
Acquired Fund and the Acquiring Fund and any unrealized appreciation included in
the Acquired Fund's total net assets at the acquisition date are as follows:
<TABLE>
<CAPTION>
SHARES VALUE OF TOTAL NET TOTAL NET
ISSUED BY SHARES ISSUED ASSETS OF ASSETS OF
ACQUISITION ACQUIRING BY ACQUIRING ACQUIRED ACQUIRING
ACQUIRING FUND ACQUIRED FUND DATE FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Nations
Strategic Fixed Peachtree Bond
Income Fund Fund 09/27/96 6,826,942 $ 67,043,140 $67,043,140 $941,860,947
<CAPTION>
TOTAL NET
ACQUIRING FUND
FUND AFTER UNREALIZED
ACQUIRING FUND ACQUISITION APPRECIATION
- --------------------------------------------------------------
<S> <C> <C>
Nations
Strategic Fixed
Income Fund $1,008,904,087 $597,022
</TABLE>
35
<PAGE> 38
THE NATIONS FUND FAMILY
EQUITY FUNDS
GROWTH
Nations Capital Growth Fund
Nations Disciplined Equity Fund
Nations Emerging Growth Fund
Nations Emerging Markets Fund
Nations Equity Index Fund
Nations International Equity Fund
Nations Managed Index Fund
Nations Pacific Growth Fund
GROWTH AND INCOME
Nations Balanced Assets Fund
Nations Equity Income Fund
Nations Value Fund
BOND FUNDS
INCOME
Nations Diversified Income Fund
Nations Global Government Income Fund
Nations Government Securities Fund
Nations Short-Intermediate Government Fund
Nations Short-Term Income Fund
Nations Strategic Fixed Income Fund
TAX-EXEMPT INCOME
Nations Florida Municipal Bond Fund
Nations Florida Intermediate Municipal Bond Fund
Nations Georgia Municipal Bond Fund
Nations Georgia Intermediate Municipal Bond Fund
Nations Maryland Municipal Bond Fund
Nations Maryland Intermediate Municipal Bond Fund
Nations North Carolina Municipal Bond Fund
Nations North Carolina Intermediate Municipal Bond Fund
Nations South Carolina Municipal Bond Fund
Nations South Carolina Intermediate Municipal Bond Fund
Nations Tennessee Municipal Bond Fund
Nations Tennessee Intermediate Municipal Bond Fund
Nations Texas Municipal Bond Fund
Nations Texas Intermediate Municipal Bond Fund
Nations Virginia Municipal Bond Fund
Nations Virginia Intermediate Municipal Bond Fund
Nations Municipal Income Fund
Nations Intermediate Municipal Bond Fund
Nations Short-Term Municipal Income Fund
MONEY MARKET FUNDS
Nations Government Money Market Fund
Nations Prime Fund
Nations Tax Exempt Fund
Nations Treasury Fund
For more complete information, including charges and expenses, please contact
your investment representative or Nations Fund at (800) 982-2271 for a current
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE> 39
[NATIONS FUND LOGO] BULK RATE
U.S. POSTAGE PAID
BOSTON, MA
PERMIT NO.
P.O. Box 34602 54201
Charlotte, NC 28234-4602
Toll Free 1-800-982-2271
SARS IN-97819-996
