<PAGE> 1
NATIONS
FUNDS
INVESTMENTS FOR A LIFETIME(SM)
[GRAPHIC]
EQUITY
FUNDS
ANNUAL REPORT FOR THE YEAR ENDED MARCH 31, 1997
<PAGE> 2
<TABLE>
<S> <C>
NOT MAY LOSE VALUE
FDIC-
INSURED NO BANK GUARANTEE
</TABLE>
NATIONS FUNDS 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 FUNDS INVESTMENT ADVISER: NATIONSBANC ADVISORS, INC.
NATIONS FUNDS INVESTMENT SUB-ADVISERS: TRADESTREET INVESTMENT ASSOCIATES, INC.
AND GARTMORE GLOBAL PARTNERS.
<PAGE> 3
NATIONS FUNDS
DEAR SHAREHOLDER:
We are pleased to present the Nations Funds annual report for the fiscal year
ended March 31, 1997. Overall, domestic equity markets rewarded investors with
strong returns. In fact, during this period the U.S stock market reached record
levels. More recently, the markets have experienced increasing volatility as
concerns have surfaced about strong economic growth leading to inflation. When
markets experience fluctuations like this, it is often unsettling. Investors
should be cautioned, however, not to confuse short-term volatility with
long-term trends.
The last two years marked a period that most investors (particularly equity
investors) will look back upon with great satisfaction. Domestic equity returns
averaged better than 18% during 1996; and for the last two years, have exceeded
50%(1). Several factors contributed to 1996's favorable market results: 1) The
continued strength in the U.S. economy; 2) No real evidence of inflationary
pressures; 3) U.S. corporations experiencing continued profit growth; and 4)
Record cash inflow into equity mutual funds. Investors should note that returns
on stocks have been exceptional and well above the historical average of
10.7%.(2)
Looking out into 1997, the investment environment continues to read as if it
were being scripted to enhance financial assets -- moderate but persistent
economic growth, low inflation and strong earnings. Although the duration of
this economic expansion is six years and counting, there does not appear to be
anything on the horizon that would move the economy off its current track.
Importantly, after a long period of outperformance by stocks, investors should
pay particular attention to their current allocation relative to their
objectives and risk tolerance. We are expecting that future advances in the
markets will be accompanied by increased volatility and periodic corrections as
the market adjusts to factors such as recent changes in monetary policy. While
we believe that markets will reach significant new highs before the end of the
millennium, markets do not go straight up and there will be periods of decline
along the way.
Thank you for your continued confidence in the Nations Funds family of funds.
Sincerely,
/s/ A. Max Walker /s/ Mark H. Williamson
- ----------------------------------- -----------------------------------
A. Max Walker Mark H. Williamson
President and Chairman of the Board President, NationsBanc Advisors, Inc.
March 31, 1997
(1) AS MEASURED BY THE S&P 500 INDEX.
(2) IBBOTSON ASSOCIATES, STOCKS, BONDS, BILLS AND INFLATION 1997 YEARBOOK
1
<PAGE> 4
THE NATIONS FUNDS 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 or market conditions change. The Nations Funds 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 was designed to accommodate a wide variety of investment objectives
across the risk/reward spectrum.
POTENTIAL RETURN >
<TABLE>
<S> <C> <C> <C> <C> <C>
EQUITY
INCOME
FUNDS
LONGER TERM BALANCED --------------------
DOMESTIC FUNDS - Nations
AND GLOBAL ------------------ Equity Income
INTERMEDIATE BOND FUNDS - Nations Fund
MATURITY ------------------- Balanced
SHORTER BOND FUNDS - Nations Global Assets Fund
MATURITY ------------------- Government
MONEY BOND FUNDS - Nations Income Fund
MARKET ---------------- Strategic Fixed
FUNDS - Nations Short- Income Fund - Nations
- ------------- Intermediate Diversified
- Nations Government - Nations Income Fund
Prime Fund Fund Intermediate
Municipal - Nations
- Nations - Nations Bond Fund Government
Government Short-Term Securities Fund
Money Market Income Fund - Nations
Fund State-Specific - Nations
- Nations Short- Intermediate Municipal
- Nations Term Municipal Municipal Income Fund
Treasury Fund Income Fund Bond Funds
- Nations State-
- Nations Tax Specific Long-
Exempt Fund Term Municipal
Bond Funds ---------- GROWTH & INCOME --------->
-------------------------- CURRENT INCOME ------------------------------------------------------>
<---------- STABILITY --------- RISK (VARIABILITY) >
</TABLE>
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 Funds family also includes Nations Equity Index Fund, which
seeks to match the performance of the S&P 500 before fees and expenses.
2
<PAGE> 5
<TABLE>
<S> <C> <C> <C> <C>
REGION-SPECIFIC
INTERNATIONAL
FUNDS
INTERNATIONAL ------------------------
SMALLER EQUITY FUNDS - Nations
CAPITALIZATION ---------------------- Emerging
LARGE GROWTH FUNDS - Nations Markets Fund
CAPITALIZATION ------------------------ International
GROWTH GROWTH FUNDS - Nations Equity Fund - Nations
AND INCOME ------------------ Emerging Pacific Growth
FUNDS - Nations Growth Fund Fund
- ------------------- Disciplined
- Nations Equity Fund
Value Fund
- Nations Capital
Growth Fund
-------------------- AGGRESSIVE GROWTH ---------------------------------->
- ----------------- GROWTH -------------->
</TABLE>
----------------------------------------
SPECIALTY FUNDS
MANAGED INDEX FUNDS
Nations Managed SmallCap Index Fund
Nations Managed Index Fund
----------------------------------------
<PAGE> 6
TIME AND DIVERSIFICATION
CAN SMOOTH OUT
MARKET VOLATILITY
During the past two years, many investors have enjoyed some of the most
rewarding stock market gains in history. So if you're relatively new to the
financial markets, the market fluctuations over recent months may be an
unsettling experience.
We can't say with certainty when this period of market volatility may end. But
we can say that it's an entirely normal occurrence. In fact, the history of the
market shows both periods of growth and periods of downturns. The good news is
that downturns are often short-lived, and have historically been followed by
renewed growth.
So instead of focusing on the market's daily ups and downs, keep focused on your
long-term goals. By staying invested, you won't miss out on the potential for
later gains from a market rebound. You may also want to take advantage of these
helpful strategies:
- - PUT DIVERSIFICATION ON YOUR SIDE. You may lessen the effect of market
fluctuations when you maintain a diversified portfolio of stocks, bonds, and
cash investments such as money market funds. In addition, mutual funds make it
easy to diversify within each asset class. For example, you can add an
international fund if your portfolio is largely domestic equities. Or you can
spread your fixed-income component across multiple bond funds that emphasize
different maturities and credit qualities.
- - REBALANCE YOUR ASSETS. Your original investment allocation among stocks, bonds
and money market funds may have shifted over time -- for example, with recent
gains, you may have a larger percentage of your investments in stocks than you
expect. If needed, you should rebalance your allocations in line with your
long-term strategy.
- - CONSIDER DOWNTURNS A BUYING OPPORTUNITY. By investing regular amounts in a
Nations Funds account on a set interval, regardless of the market's direction,
you wind up purchasing more shares when the price is low and fewer when the
price is high. This strategy, called dollar-cost averaging, may help lessen
the impact of market swings by averaging the cost of your shares over time.
And, with a systematic investment plan (SIP), you can have a set amount
automatically withdrawn from your bank checking or savings account and
invested directly into your Nations Funds account on a monthly or quarterly
basis.
Please note that dollar-cost averaging does not assure a profit or protect
against loss in declining markets. Since such a plan involves continuous
investment in securities, regardless of fluctuating price levels, you should
carefully consider your financial ability to continue your purchases through
periods of fluctuating price levels.
So remember, if you have a sound long-term investment program, and your
short-term needs are being met, your original decisions should still serve you
well. Simply by staying patient, you may increase your likelihood of reaching
your investment goals. For more information, please call Nations Funds at
1-800-321-7854.
4
<PAGE> 7
NATIONS BALANCED ASSETS FUND
PERFORMANCE AND COMMENTARY
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER
Julie L. Hale, CFA, is Senior Portfolio Manager of Nations Balanced Assets
Fund and Senior Product Manager, Equity Management for TradeStreet Investment
Associates, Inc., investment sub-adviser to the Fund.
INVESTMENT OBJECTIVE
The Fund seeks total return by investing in equity and fixed income
securities.
- --------------------------------------------------------------------------------
PERFORMANCE REVIEW
For the one-year period ended March 31, 1997, Nations Balanced Assets Fund
Investor A Shares provided shareholders with a total return of 12.18%,
outperforming the Lipper Balanced Funds Average, which returned 10.74%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Ms. Hale shares her views on financial market
conditions and Fund performance for the one-year period ended March 31, 1997.
PLEASE DESCRIBE THE FUND'S INVESTMENT STYLE AND PHILOSOPHY.
The Fund's investment philosophy is based on the premise that a diversified
portfolio allocated among stocks, fixed income securities and money market
instruments, which have different return/risk characteristics, will reduce
overall portfolio risk relative to expected returns. The Fund invests primarily
in stocks of high-quality companies with favorable long-term fundamentals and
earnings-growth potential. Fixed income investments consist of investment grade,
intermediate-term securities.
BRIEFLY DESCRIBE THE MARKET CONDITIONS THAT PREVAILED OVER THE LAST TWELVE
MONTHS.
Over the past year, we experienced a strong equity market driven by
continued low inflation and healthy corporate profits. Bonds provided only a
modest positive return over the period as interest rates moved upward due to
investor fears about the impact of accelerating economic growth on inflation.
The Fund's bias toward equities had a significant positive impact on
performance.
ON THE EQUITY SIDE, WHAT DO YOU LOOK FOR WHEN YOU SELECT COMPANIES FOR THE FUND?
We seek out high-quality companies with strong, long-term fundamentals that
are trading at favorable prices relative to their total return potential.
WHERE DID YOU FIND STRONG EQUITY PERFORMANCE?*
The Fund benefited from holdings in the consumer cyclical, energy and
telecommunications sectors. Better performing stocks included Snap-On Inc.,
Exxon Corporation, Sprint Corporation and MCI Communications.
WHAT SHIFTS WERE MADE IN THE FUND'S OVERALL ASSET ALLOCATION OVER THE PAST
TWELVE MONTHS?
During the past twelve months, asset allocation was fairly steady with equities
making up approximately 60% to 65% and fixed income securities comprising 33% to
38% of the Fund. Although the equity weighting was fairly stable, we experienced
notable shifts in sector weightings as significant divergence in sector
performance occurred. The Fund moved to substantial underweight positions in
healthcare and finance, while increasing exposure to the basic materials and
capital goods sectors. There also were limited and moderate shifts in the
weighting across fixed income categories of the Fund.
- ---------------
* Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook. Also, the outlook of this Fund's portfolio manager may differ from
that of other Nations Funds' portfolio managers.
5
<PAGE> 8
WHAT AREAS OF THE MARKET WERE DISAPPOINTING?
Although finance and technology were among the better performing groups
this past year, the Fund lost relative performance in these areas. Within the
financial sector, the Fund had good stock selection but moved to an underweight
position in the group too early. Although the technology sector performed well
overall, stock selection was difficult as earnings shortfalls resulted in
significant stock price disappointments.
WHERE DID YOU FIND GOOD VALUE IN THE BOND MARKET?
Over the past year, the Fund benefited from an overweight position in
corporates, mortgages and asset-backed securities. All three sectors
outperformed comparable maturity U.S. Treasury bonds.
HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
At least for the short-term, we anticipate that the Fund's asset allocation
will continue to be within the ranges of 60%-65% equities and 33%-38% fixed
income securities, reflecting our long-term bias toward stocks. Recently, we
increased fixed income holdings slightly at the expense of stocks based on
weakness in the bond market and strength in the stock market. At current levels,
bonds look attractive compared to stocks. In the equity area, we continue to
find attractive values in the basic materials and energy groups, while the
finance and healthcare sectors appear to offer limited opportunities.
6
<PAGE> 9
NATIONS FUNDS
Nations Balanced Assets Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS OF 3/31/97
<TABLE>
<S> <C>
Common Stocks 59.0%
Mortgage-Backed Securities 14.2%
Corporate Bonds and Notes 12.1%
U.S. Treasury Securities 6.7%
Repurchase Agreement and
Other Assets and Liabilities (Net) 5.1%
Asset-Backed Securities 2.1%
Foreign Bond 0.5%
Government Agency 0.3%
</TABLE>
- -------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<C> <S> <C>
1. U.S. T-Bond, 6.250% 08/15/23 3.3%
2. FNMA, 6.500% 04/01/26 (2 Pools) 2.4
3. U.S. T-Note, 7.000% 07/15/06 2.1
4. GNMA, 9.000% 01/15/27 (1 Pool) 2.0
5. FNMA, 8.500% 06/01/26 - 07/01/26 (2 Pools) 1.5
6. GNMA, 8.000% 06/15/22 - 10/15/24 (2 Pools) 1.1
7. FNMA, 7.000% 04/01/26 (1 Pool) 1.1
8. FHLMC, Gold, 6.500% 08/01/10 1.0
9. Wellman Inc. 1.0
10. Ford Motor Company 1.0
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
INVESTOR A SHARES
- ---------------------------------
<S> <C>
Year Ended 03/31/97 12.18%
Since Inception (10/02/92)
through 03/31/97 11.13%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Balanced Assets Fund on October 2,
1992 (inception date). Figures for the Lehman Aggregate Bond Index, which is an
unmanaged index comprised of the Government Corporate Bond Index, the
Asset-Backed Securities Index and the Mortgage-Backed Securities Index and
includes U.S. Treasury issues, agency issues, corporate bond issues and
mortgage-backed issues, include reinvestment of dividends. Figures for the
Standard & Poor's 500 Composite Stock Price Index, an unmanaged index of 500
widely held common stocks, include reinvestment of dividends. Funds included in
the Lipper Balanced Funds Average have a primary objective of conserving
principal by maintaining at all times a balanced portfolio of both stocks and
bonds. Typically, the stock/bond ratio ranges around 60%/40%.
[LINE GRAPH]
<TABLE>
<CAPTION>
Growth of
Standard & Poor's Investment with
Measurement Period Lipper Balanced 500 Composite Stock Lehman Aggregate Distributions
(Quarterly) Funds Average Price Index Bond Index Reinvested
<S> <C> <C> <C> <C>
Oct. 2, 1992 10000 10000 10000 10000
Nov. 30, 1992 10401 10502 10027 10372
10839 10961 10441 10800
11016 11013 10718 11066
11419 11297 10999 11309
Nov. 30, 1993 11585 11559 11004 11379
11211 11121 10689 11013
11094 11167 10578 10661
11415 11712 10643 11076
Nov. 30, 1994 11292 11710 10683 11000
11995 12849 11222 11621
12869 14074 11906 12584
13582 15192 12140 13252
Nov. 30, 1995 14157 16106 12657 13866
Mar. 31, 1996 14512 16970 12432 14327
14834 17731 12503 14709
15212 18279 12734 15042
16074 19801 13116 15858
Mar. 31, 1997 16104 20333 13043 16072
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
7
<PAGE> 10
NATIONS FUNDS
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N, PRIMARY A AND PRIMARY B
SHARES AS OF MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 11.37%*
Year Ended 03/31/97 11.85%
Since Inception (10/02/92) through
03/31/97 10.43%
</TABLE>
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
<TABLE>
<CAPTION>
INVESTOR N SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 11.62%
Since Inception (06/07/93) through
03/31/97 10.54%
</TABLE>
<TABLE>
<CAPTION>
PRIMARY A SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 12.50%
Since Inception (09/30/92) through
03/31/97 11.39%
</TABLE>
AGGREGATE TOTAL RETURN
<TABLE>
<CAPTION>
PRIMARY B SHARES**
- ----------------------------------------------
<S> <C>
Since Inception (06/28/96) through
03/31/97 9.06%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N, Primary A and Primary B Shares of
Nations Balanced Assets Fund from the date each class of shares was first
offered. Figures for the Lehman Aggregate Bond Index, which is an
unmanaged index comprised of the Government Corporate Bond Index, the
Asset-Backed Securities Index and the Mortgage-Backed Securities Index and
includes U.S. Treasury issues, agency issues, corporate bond issues and
mortgage-backed issues, include reinvestment of dividends. Figures for the
Standard & Poor's 500 Composite Stock Price Index, an unmanaged index of
500 widely held common stocks, include reinvestment of dividends. Funds
included in the Lipper Balanced Funds Average have a primary objective of
conserving principal by maintaining at all times a balanced portfolio of
both stocks and bonds. Typically the stock/bond ratio ranges around
60%/40%.
Each chart assumes the reinvestments of all distributions.
** Please note that the performance shown for Primary B Shares includes
the performance for Primary A Shares from their date of inception
(9/30/92) through 6/28/96, plus the performance for Primary B Shares from
their date of inception (6/28/96) through 3/31/97. The expense structures
for Primary A and Primary B Shares are similar, except that Primary B
Shares are subject to a shareholder servicing fee of up to 60 basis
points. This will result in a slight variance in the performance of
Primary A and Primary B Shares.
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD &
POORS 500 GROWTH OF
COMPOSITE LEHMAN INVESTMENT
STOCK BROTHERS WITH
MEASUREMENT PERIOD PRICE AGGREGATE DISTRIBUTIONS
(QUARTERLY) INDEX BOND INDEX REINVESTED
<S> <C> <C> <C>
OCT. 2, 1992 10000 10000 10000
NOV. 30, 1992 10502 10027 10353
10961 10441 10758
11013 10718 11000
11297 10998 11218
NOV. 30, 1993 11559 11004 11268
11121 10689 10889
11167 10578 10519
11712 10643 10910
NOV. 30, 1994 11710 10683 10809
12849 11222 11400
14074 11906 12314
15192 12140 12947
NOV. 30, 1995 16106 12857 13523
MAR. 31, 1996 16970 12432 13967
17731 12503 14371
18279 12734 14208
19801 13116 15436
MAR. 31, 1997 20333 13043 15622
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD &
POORS 500 GROWTH OF
COMPOSITE LEHMAN INVESTMENT
STOCK BROTHERS WITH
MEASUREMENT PERIOD PRICE AGGREGATE DISTRIBUTIONS
(QUARTERLY) INDEX BOND INDEX REINVESTED
<S> <C> <C> <C>
JUNE 7, 1993 10000 10000 10000
10267 10447 10498
NOV. 30, 1993 10526 10453 10546
10127 10154 10198
10170 10049 9860
10666 10110 10231
NOV. 30, 1994 10664 10148 10147
11701 10660 10709
12817 11310 11573
13834 11532 12174
NOV. 30, 1995 14667 12023 12723
MAR. 31, 1996 15454 11810 13129
16146 11877 13463
16646 12097 13751
18032 12460 14476
MAR. 31, 1997 18516 12390 14654
</TABLE>
PRIMARY A AND PRIMARY B SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD &
POORS 500 GROWTH OF
COMPOSITE INVESTMENT
STOCK LEHMAN WITH
MEASUREMENT PERIOD PRICE AGGREGATE DISTRIBUTIONS
(QUARTERLY) INDEX BOND INDEX REINVESTED
<S> <C> <C> <C>
SEPT. 30, 1992 10000 10000 10000
NOV. 30, 1992 10502 10027 10384
10961 10441 10818
11013 10718 11089
11297 10998 11338
NOV. 30, 1993 11559 11004 11416
11121 10669 11052
11167 10578 10706
11712 10643 11128
NOV. 30, 1994 11710 10683 11059
12849 11222 11701
14074 11906 12665
15192 12140 13345
NOV. 30, 1995 16106 12657 13971
MAR. 31, 1996 16970 12432 14443
JUNE 28, 1996 17731 12503 14849
18279 12734 15193
19801 13116 16021
MAR. 31, 1997 20333 13043 16248
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual and aggregate total returns are historical in nature and measure
net investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends.
8
<PAGE> 11
NATIONS EQUITY INCOME FUND
PERFORMANCE AND COMMENTARY
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER
Eric Williams, CFA, is Senior Portfolio Manager of Nations Equity Income
Fund and a Director of Equity Management for TradeStreet Investment Associates,
Inc., investment sub-adviser to the Fund.
INVESTMENT OBJECTIVE
The Fund seeks current income and growth of capital by investing primarily
in companies with above-average dividend yields.
- --------------------------------------------------------------------------------
PERFORMANCE REVIEW
For the one-year period ended March 31, 1997, Nations Equity Income Fund
Investor A Shares provided a total return of 15.30% versus 15.59% for the Lipper
Equity Income Funds Average.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Williams shares his views on financial
market conditions and Fund performance for the one-year period ended March 31,
1997.
WHAT IS THE FUND'S INVESTMENT STYLE AND PHILOSOPHY?
Nations Equity Income Fund provides investors with a diversified portfolio
of equities, specializing in stocks that are undervalued relative to their
industry peers, as well as to the market as a whole. The portfolio is
constructed with the intent of producing a 50% yield premium over the Standard &
Poor's 500 Composite Stock Price Index (S&P 500 Index), with returns comparable
to the S&P 500 Index over time with less risk. This may be accomplished, in
part, by buying high quality companies with above-average dividends.
Additionally, the Fund uses convertible securities for extra income and
diversification. So, the Fund should be in a position to capture a large portion
of returns in rising markets, while avoiding the full impact of a falling
market.
HOW DID THE FUND PERFORM UNDER THE MARKET CONDITIONS THAT PREVAILED OVER THE
PAST TWELVE MONTHS?
With the economy enjoying low unemployment, steady growth and little
inflation, the stock market recorded another outstanding gain. Higher interest
rates blunted the performance of the slightly yield sensitive Nations Equity
Income Fund; however, the Fund was able to attain 75% of the S&P 500 Index
return with less volatility.
WHAT PARTICULAR SECTORS/STOCKS IMPACTED FUND PERFORMANCE?*
Strong stock selection in the technology and financial sectors contributed
heavily to the Fund's positive performance. On average, the financial stocks
owned by the Fund rose more than 40% while technology holdings gained over 35%,
outperforming the overall sectors. Stocks that performed especially well
included Fleet Financial Group Inc. and Harris Corporation. While increasing
interest rates and deregulation issues in the utility industry weighed on
returns, careful stock selection in this sector provided strong returns for the
Fund relative to the return for the sector as a whole.
Poor performance from several stocks in the capital goods and utilities
sectors held by the Fund throughout the year diluted Fund performance. For
example, Keystone International fell almost 20% in price. Management is moving
the company away from lower margin revenues, causing some sales and cost
absorption difficulties. Currently, we believe that the company will become a
good performer after it makes this transition. Shares of Raytheon Company
dropped 10% in the last year as the company faced delays in contract awards in
its Engineering and Construction division. However, the stock may well be an
outperformer should Raytheon receive approval to acquire units of Texas
Instruments and Hughes Electronics. Among the portfolio's utility holdings, PECO
Energy had the worst performance, declining more than 15% in value.
- ---------------
* Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook. Also, the outlook of this Fund's portfolio manager may differ from
that of other Nations Funds' portfolio managers.
9
<PAGE> 12
HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
The current environment favors the Equity Income style and the Fund's
positioning which avoids high volatility and favors a defensive posture. The
Fund is currently positioned for continued moderate increases in short-term
interest rates and an economy which we believe will slow but avoid recession.
Many stocks in economically sensitive sectors, such as basic materials and
capital goods, have already traded down to "recession" levels, anticipating a
correction in the economy. This pullback in stock price has given us an
opportunity to increase exposure to these sectors with little downside risk.
Likewise, we continue to underweight financials and pharmaceuticals due to their
high valuations.
10
<PAGE> 13
NATIONS FUNDS
Nations Equity Income Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS OF 3/31/97
<TABLE>
<S> <C>
Materials/Processing 21.0%
Convertible Bonds and Notes,
U.S. Treasury Securities,
Repurchase Agreement and
Other Assets and Liabilities (Net) 16.6%
Utilities 15.1%
Energy 8.1%
Consumer Staples 7.7%
Financial Services 6.5%
Auto and Transportation 5.3%
Other 4.9%
Healthcare 4.2%
Consumer Durables 3.7%
Producer Durables 3.6%
Technology 3.3%
</TABLE>
- -------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<C> <S> <C>
1. U.S. T-Bond, 5.625% 02/15/06 5.3%
2. Genuine Parts Company 1.6
3. Supervalu Inc. 1.6
4. Sonoco Products Company 1.6
5. Mallinckrodt Inc. 1.6
6. Imperial Chemical Industries Plc, ADR 1.5
7. Computer Associates International Inc. 1.5
8. Sun Company, Inc. 1.5
9. Nucor Corporation 1.5
10. Chiquita Brands International Inc., Series B
Conv., $3.750 1.5
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
INVESTOR A SHARES
- ----------------------------------
<S> <C>
Year Ended 03/31/97 15.30%
Five Years Ended 03/31/97 13.78%
Since Inception (04/16/91)
through 03/31/97 13.76%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Equity Income Fund on April 16, 1991
(inception date). Figures for the Standard & Poor's 500 Composite Stock Price
Index, an unmanaged index of 500 widely held common stocks, include reinvestment
of dividends. Funds included in the Lipper Equity Income Funds Average seek
relatively high current income and growth of income through investing 60% or
more of their portfolios in equities.
<TABLE>
<CAPTION>
Standard & Poor's 500 Growth of Investment
Measurement Period Composite Stock Price Lipper Equity Income with Distributions
(Quarterly) Index Funds Average Reinvested
<S> <C> <C> <C>
Apr. 16, 1991 10000 10000 10000
May 31, 1991 9952 10021 9890
10483 10669 10618
11361 11283 11395
11075 11296 11299
May 31, 1992 11285 11567 11593
11641 11873 12069
12226 12423 12509
12759 13246 13154
May 31, 1993 12821 13434 13248
13151 14027 13735
13455 14193 14068
12946 13659 13506
May 31, 1994 13000 13703 13752
13634 14245 14273
13632 13873 13886
14958 14899 15063
May 31, 1995 16384 15920 15970
17685 17084 16936
18749 18003 17685
Mar. 31, 1996 19755 18826 18688
20640 19379 19363
21279 19861 19889
23051 21339 21153
Mar. 31, 1997 23670 21681 21548
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
11
<PAGE> 14
NATIONS FUNDS
Nations Equity Income Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N, PRIMARY A AND PRIMARY B
SHARES AS OF MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 14.55%*
Year Ended 03/31/97 15.01%
Since Inception (06/17/92) through
03/31/97 13.51%
</TABLE>
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
<TABLE>
<CAPTION>
INVESTOR N SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 14.76%
Since Inception (06/07/93) through
03/31/97 13.26%
<CAPTION>
PRIMARY A SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 15.62%
Five Years Ended 03/31/97 14.10%
Since Inception (4/11/91) through
03/31/97 14.12%
</TABLE>
AGGREGATE TOTAL RETURN
<TABLE>
<CAPTION>
PRIMARY B SHARES**
- ----------------------------------------------
<S> <C>
Since Inception (06/28/96) through
03/31/97 11.17%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N, Primary A and Primary B Shares of
Nations Equity Income Fund from the date each class of shares was first
offered. Figures for the Standard & Poor's 500 Composite Stock Price
Index, an unmanaged index of 500 widely held common stocks, include
reinvestment of dividends.
Each chart assumes the reinvestment of all distributions.
** Please note that the performance shown for Primary B Shares includes
the performance for Primary A Shares from their date of inception
(4/11/91) through 6/28/96, plus the performance for Primary B Shares from
their date of inception (6/28/96) through 3/31/97. The expense structures
for Primary A and Primary B Shares are similar, except that Primary B
Shares are subject to a shareholder servicing fee of up to 60 basis
points. This will result in a slight variance in the performance of
Primary A and Primary B Shares.
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD &
POORS 500 GROWTH OF
COMPOSITE INVESTMENT
STOCK WITH
MEASUREMENT PERIOD PRICE DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
JUNE 17, 1992 10000 10000
10315 10522
10834 10932
11306 11473
MAY 31, 1993 11361 11536
11653 11938
11925 12195
11472 11694
MAY 31, 1994 11520 11883
12082 12309
12080 11953
13255 12937
MAY 31, 1995 14518 13687
15671 14494
16614 15090
MAR. 31, 1996 17506 15944
18290 16506
18855 16942
20426 18016
MAR. 31, 1997 20975 18338
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD &
POORS 500 GROWTH OF
COMPOSITE INVESTMENT
STOCK WITH
MEASUREMENT PERIOD PRICE DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
JUNE 7, 1993 10000 10000
10387 10429
10400 10670
10586 10236
MAY 31, 1994 10425 10411
10933 10784
10508 10480
11366 11356
MAY 31, 1995 12526 12016
13276 12740
14390 13276
MAR. 31, 1996 15454 14013
16148 14500
16646 14876
18032 15805
MAR. 31, 1997 18516 16081
</TABLE>
PRIMARY A AND PRIMARY B SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
STANDARD & INVESTMENT
POOR'S 500 WITH
COMPOSITE DISTRIBUTIONS
MEASUREMENT PERIOD STOCK PRICE REINVESTED
(QUARTERLY) INDEX PRIMARY
<S> <C> <C>
APR. 11, 1991 10000 10000
MAY 31, 1991 9976 9933
10508 10668
11388 11465
11101 11376
MAY 31, 1992 11312 11687
11669 12140
12255 12634
12790 13292
MAY 31, 1993 12851 13394
13182 13894
13487 14233
12977 13682
MAY 31, 1994 13031 13939
13667 14475
13665 14093
14994 15308
MAY 31, 1995 16423 16224
17727 17227
18793 17982
MAR. 31, 1996 19802 19027
JUN. 28, 1996 20689 19723
21329 20270
23105 21565
MAR. 31, 1997 23726 21998
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual and aggregate total returns are historical in nature and measure
net investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends.
12
<PAGE> 15
NATIONS VALUE FUND
PERFORMANCE AND COMMENTARY
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER
Sharon Herrmann, CFA, is Senior Portfolio Manager of Nations Value Fund and
a Director of Equity Management for TradeStreet Investment Associates, Inc.,
investment sub-adviser to the Fund.
INVESTMENT OBJECTIVE
The Fund seeks growth of capital by investing in companies that are
believed to be undervalued.
- --------------------------------------------------------------------------------
PERFORMANCE REVIEW
Nations Value Fund Investor A Shares produced another year of strong
returns for shareholders, generating a total return of 17.80% for the one-year
period ended March 31, 1997. The Fund outperformed its peer group, the Lipper
Growth and Income Funds Average, which returned 15.47%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Ms. Herrmann shares her views on financial
market conditions and Fund performance for the one-year period ended March 31,
1997.
PLEASE DESCRIBE THE FUND'S INVESTMENT STYLE AND PHILOSOPHY.
Nations Value Fund is based on the premise that a well-diversified
portfolio of undervalued companies with low prices relative to the earnings they
are expected to generate should, over time, outperform the overall market while
incurring lower than average market risk. The Fund's focus on owning stocks with
low price-to-earnings ratios should provide a cushion during periods of market
declines.
HOW DID THE FUND PERFORM UNDER THE MARKET CONDITIONS THAT PREVAILED OVER THE
LAST TWELVE MONTHS?
As investor anxiety climbed with each upward move in the market, companies
that carried a high level of predictability of positive earnings revisions were
rewarded by higher stock prices. Conversely, those that disappointed in terms of
earnings were severely damaged. Therefore, our strategy of owning companies with
relatively low price-to-earnings multiples and improving forward earnings was a
winning one. Fund performance was significantly enhanced by the ability to avoid
companies that experienced negative earnings surprises. The market also favored
large-capitalization companies, which make up the majority of the Fund's
portfolio.
WHAT PARTICULAR SECTORS/STOCKS IMPACTED FUND PERFORMANCE?*
Outperformance came from stocks in a variety of sectors, including consumer
staples, energy, finance, technology and healthcare. Our decision to overweight
the energy sector significantly boosted Fund performance, as companies such as
Amoco, British Petroleum and several natural gas companies benefited from an
increase in energy demand and low inventory levels. The Fund's overweight
position in financial stocks was also rewarding. Among the major winners for the
Fund were regional and money center banks, such as Bank of New York Inc., Chase
Manhattan Corporation, and Citicorp, as well as insurance companies ITT Hartford
Group Inc., and CIGNA Corporation, which are major restructuring stories. Other
strong performers included Intel Corporation, the market share leader in
semiconductors, whose share price increased a whopping 104.6% over the past year
ended March 31, 1997.
Slightly suppressing returns were companies in the utilities sector that
are held as a defensive hedge, should we have a major market decline, due to
their attractive dividend yields. Because of deregulation concerns, these stocks
possess some of the best valuations in our discipline and, we believe, represent
a timely buying opportunity.
- ---------------
* Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook. Also, the outlook of this Fund's portfolio manager may differ from
that of other Nations Funds' portfolio managers.
13
<PAGE> 16
HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
We believe Nations Value Fund will continue to deliver attractive total
return potential relative to the market over the coming year. The portfolio is
structured to continue to take advantage of companies trading at low prices
relative to the earnings they are expected to generate in a broad array of
sectors, including energy, finance, utilities and basic materials. Also, the
Fund is selectively buying technology stocks, as this sector is now selling at
attractive valuation levels given its recent downturn.
As of the fiscal year end, the Fund's valuation level is more attractive
than the overall stock market, selling at a modest price-to-earnings multiple of
just 14.9 times weighted average earnings for 1997. This compares favorably with
the multiple of the Standard & Poor's 500 Composite Stock Price Index which,
according to our estimates, is currently selling at approximately 19 times 1997
earnings.
As we move further into 1997, our focus for the Fund will be on avoiding
companies that experience major earnings disappointments. The Fund's broad
diversification should reduce the risk of heavy concentrations in any one
specific company or industry -- a prudent strategy as we enter a more volatile
market environment with historically high price levels.
14
<PAGE> 17
NATIONS FUNDS
Nations Value Fund
- ------------------------------------
PORTFOLIO BREAKDOWN AS OF 3/31/97
<TABLE>
<S> <C>
Consumer Staples 6.7%
Producer Durables 6.3%
Consumer Discretionary 4.8%
Other 4.8%
Repurchase Agreement and Other Assets and Liabilities (Net) 4.7%
Financial Services 15.2%
Materials/Processing 7.3%
Auto and Transportation 7.3%
Healthcare 9.6%
Energy 10.3%
Technology 10.5%
Utilities 12.5%
</TABLE>
- ----------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C> <C>
1. Intel Corporation 2.8%
2. Harris Corporation 2.4
3. Compaq Computer Corporation 2.3
4. General Re Corporation 2.3
5. Bristol-Myers Squibb Company 2.3
6. CIGNA Corporation 2.3
7. Xerox Corporation 2.2
8. Lockheed Martin Corporation 2.2
9. Mobil Corporation 2.2
10. Schering-Plough Corporation 2.1
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
INVESTOR A SHARES
- ---------------------------------
<S> <C>
Year Ended 03/31/97 17.80%
Five Years Ended 03/31/97 15.00%
Since Inception (12/06/89)
through 03/31/97 14.21%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Value Fund on December 6, 1989
(inception date). Figures for the Standard & Poor's 500 Composite Stock Price
Index, an unmanaged index of 500 widely held common stocks, include reinvestment
of dividends. Funds included in the Lipper Growth and Income Funds Average
combine a growth of earnings orientation and an income requirement for level
and/or rising dividends.
<TABLE>
<CAPTION>
STANDARD & POOR'S 500 GROWTH OF INVESTMENT
MEASUREMENT PERIOD COMPOSITE STOCK PRICE LIPPER GROWTH AND INCOME WITH DISTRIBUTIONS
(QUARTERLY) INDEX FUNDS AVERAGE REINVESTED
<S> <C> <C> <C>
DEC. 6, 1989 10000 10000 10000
9932 9879 10107
10555 10380 10634
9106 9010 9347
NOV. 30, 1990 9921 9676 10386
11360 11057 11780
11333 11036 11779
11938 11662 12296
NOV. 30, 1991 12938 12504 13073
12611 12518 13149
12851 12545 13219
13256 12861 13362
NOV. 30, 1992 13922 13654 14004
14530 14315 14672
14599 14476 15010
14975 15031 15671
NOV. 30, 1993 15322 15367 16254
14742 14911 15831
14804 14871 15703
15526 15515 15971
NOV. 30, 1994 15523 15244 15753
17033 16427 17216
18657 17758 18937
20138 19087 20450
NOV. 30, 1995 21350 19940 21388
22495 21018 22450
23504 21688 23326
24231 22339 23896
MAR. 31, 1996 26249 23981 25847
MAR. 31, 1997 26954 24279 26446
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
15
<PAGE> 18
NATIONS FUNDS
Nations Value Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N, PRIMARY A AND PRIMARY B
SHARES AS OF MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 17.01%*
Year Ended 03/31/97 17.51%
Since Inception (06/17/92) through
03/31/97 15.48%
</TABLE>
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
<TABLE>
<CAPTION>
INVESTOR N SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 17.21%
Since Inception (06/07/93) through
03/31/97 15.90%
</TABLE>
<TABLE>
<CAPTION>
PRIMARY A SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 18.07%
Five Years Ended 03/31/97 15.24%
Since Inception (09/19/89) through
03/31/97 14.00%
</TABLE>
AGGREGATE TOTAL RETURN
<TABLE>
<CAPTION>
PRIMARY B SHARES**
- ----------------------------------------------
<S> <C>
Since Inception (06/28/96) through
03/31/97 13.20%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N, Primary A and Primary B Shares of
Nations Value Fund from the date each class of shares was first offered.
Figures for the Standard & Poor's 500 Composite Stock Price Index, an
unmanaged index of 500 widely held common stocks, include reinvestment of
dividends.
Each chart assumes the reinvestment of all distributions.
** Please note that the performance shown for Primary B Shares includes
the performance for Primary A Shares from their date of inception
(9/19/89) through 6/28/96, plus the performance for Primary B Shares from
their date of inception (6/28/96) through 3/31/97. The expense structures
for Primary A and Primary B Shares are similar, except that Primary B
Shares are subject to a shareholder servicing fee of up to 60 basis
points. This will result in a slight variance in the performance of
Primary A and Primary B Shares.
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD & GROWTH OF
POORS 500 INVESTMENT
COMPOSITE WITH
MEASUREMENT PERIOD STOCK PRICE DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
JUNE 17, 1992 10000 10000
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) 10315 10361
NOV. 30, 1992 10834 10830
11306 11309
11361 11551
11653 12031
NOV. 30, 1993 11923 12460
11472 12116
11520 11995
12082 12171
NOV. 30, 1994 12080 11992
13255 13069
14518 14358
15671 15473
NOV. 30, 1995 16614 16147
MAR. 31, 1996 17505 16944
18290 17597
18855 18010
20426 19468
MAR. 31, 1997 20975 19911
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD & GROWTH OF
POORS 500 INVESTMENT
COMPOSITE WITH
MEASUREMENT PERIOD STOCK PRICE DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
JUNE 7, 1993 10000 10000
10287 10588
NOV. 30, 1993 10526 10967
10127 10665
10170 10577
10666 10735
NOV. 30, 1994 10664 10585
11701 11539
12617 12682
13834 13673
NOV. 30, 1995 14667 14286
MAR. 31, 1996 15454 14979
16146 15546
16646 15898
18032 17180
MAR. 31, 1997 18516 17557
</TABLE>
PRIMARY A AND PRIMARY B SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF STANDARD &
INVESTMENT POORS 500
WITH COMPOSITE
MEASUREMENT PERIOD DISTRIBUTIONS STOCK PRICE
(QUARTERLY) REINVESTED INDEX
<S> <C> <C>
SEPT. 19, 1989 10000 10000
NOV. 30, 1989 10073 10205
10148 9898
10676 10520
9384 9076
NOV. 30, 1990 10428 9888
11827 11322
11826 11295
12345 11696
NOV. 30, 1991 13125 12894
13201 12569
13273 12808
13417 13212
NOV. 30, 1992 14083 13875
14758 14481
15107 14550
15781 14925
NOV. 30, 1993 16388 15271
15959 14693
15828 14754
16096 15474
NOV. 30, 1994 15898 15471
17372 16976
19134 18594
20661 20071
NOV. 30, 1995 21636 21278
MAR. 31, 1996 22724 22420
JUN. 28, 1996 23624 23425
24201 24149
26206 26161
MAR. 31, 1997 26829 26863
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual and aggregate total returns are historical in nature and measure
net investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends.
16
<PAGE> 19
NATIONS MANAGED INDEX FUND
PERFORMANCE AND COMMENTARY
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER
Greg Golden is Portfolio Manager of Nations Managed Index Fund and
Structured Products Manager, Equity Management for TradeStreet Investment
Associates, Inc., investment sub-adviser to the Fund.
INVESTMENT OBJECTIVE
The Fund seeks, over the long-term, to provide a total return which (gross
of fees and expenses) exceeds the total return of the Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index").
- --------------------------------------------------------------------------------
PERFORMANCE REVIEW*
Nations Managed Index Fund commenced operations on July 31, 1996. From its
date of inception through March 31, 1997, the Investor A Shares of the Fund
returned 20.12% to investors versus 19.94% for the S&P 500 Index.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Golden shares his views on financial market
conditions and Fund performance for the period from July 31, 1996 through March
31, 1997.
PLEASE DESCRIBE THE FUND'S INVESTMENT STYLE AND PHILOSOPHY.
Unlike traditional index funds, Nations Managed Index Fund has an active
management overlay. We believe that by minimizing exposure to unattractive
securities and carefully controlling portfolio risk, while maintaining the
characteristics of the S&P 500 Index, we can provide investors with positive
incremental performance relative to the benchmark Index. We believe that our
carefully structured process also reduces the risk of underperforming the Index.
In addition, we employ various techniques, such as limiting portfolio turnover,
to try to manage capital gains distributions.
HOW HAS THE FUND PERFORMED UNDER THE MARKET CONDITIONS THAT HAVE PREVAILED SINCE
ITS INCEPTION?**
Since reaching a peak of 816.30 on February 18, 1997, the S&P 500 Index
has, as of March 31, 1997, given back over 7.25% as investors began to question
the longevity of the current bull market. Recently, many companies reporting
in-line or slightly below consensus earnings reports for the period suffered
crushing sell-offs as the market showed its disapproval. In this environment,
diversification has rewarded investors.
The Fund performed well in this volatile environment, due to good stock
selection and sector weightings. Stock and sector selection are driven by our
multi-factor valuation approach which considers earnings momentum, earnings
estimate revisions, earnings yield, price-to-book, price-to-earnings ratios and
cash flow. Over the reporting period, the most important individual factor in
identifying the relative attractiveness of companies was earnings momentum.
Companies such as Dell Computer Corporation, Coca-Cola Company and Intel
Corporation, which the Fund had overweighted relative to the Index, contributed
significantly to performance.
WHAT PARTICULAR SECTORS WERE FAVORABLE/UNFAVORABLE FOR THE FUND?
Strength during the year was found in finance, technology, and energy.
Areas of weakness included utilities, consumer durables, and materials &
services.
HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
Moving forward, at least in the short-term, we expect that the energy,
finance, and utility sectors will be emphasized in the Fund.
- ---------------
* The performance shown includes the effect of fee waivers and expense
reimbursements by the investment adviser. Such fee waivers and expense
reimbursements have the effect of increasing total return.
** Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics
and outlook. Also, the outlook of this Fund's portfolio manager may differ
from that of other Nations Funds' portfolio managers.
17
<PAGE> 20
NATIONS FUNDS
Nations Managed Index Fund
- -------------------------------------------
PORTFOLIO BREAKDOWN AS OF 3/31/97
<TABLE>
<S> <C>
U.S. Treasury Bill, Repurchase Agreement
and Other Assets and Liabilities (Net) 4.6%
Auto and Transportation 4.3%
Consumer Discretionary 10.1%
Consumer Staples 8.6%
Energy 11.2%
Financial Services 15.6%
Utilities 10.2%
Technology 9.3%
Producer Durables 6.0%
Other 4.3%
Materials/Processing 7.4%
Healthcare 8.4%
</TABLE>
- ---------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C> <C>
1. General Electric Company 2.6%
2. Exxon Corporation 2.3
3. Coca-Cola Company 2.2
4. Intel Corporation 2.0
5. Microsoft Corporation 1.8
6. Merck & Company, Inc. 1.7
7. Royal Dutch Petroleum Company, ADR 1.6
8. Philip Morris Companies Inc. 1.6
9. Procter & Gamble Company 1.2
10. International Business Machines Corporation 1.2
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AGGREGATE TOTAL RETURN
<TABLE>
INVESTOR A SHARES
- ---------------------------------
<S> <C>
Since Inception (07/31/96)
through 03/31/97 20.12%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Managed Index Fund on July 31, 1996
(inception date). Figures for the Standard & Poor's 500 Composite Stock Price
Index, an unmanaged index of 500 widely held common stocks, include reinvestment
of dividends. Funds included in the Lipper Growth and Income Funds Average
combine a growth of earnings orientation and an income requirement for level
and/or rising dividends.
<TABLE>
<CAPTION>
Standard & Poor's 500 Growth of Investment
Measurement Period Composite Stock Price Lipper Growth and Income with Distributions
(Quarterly) Index Funds Average Reinvested
<S> <C> <C> <C>
July 31, 1996 10000 10000 10000
Sept. 30, 1996 10785 10773 10744
Dec. 31, 1996 11684 11656 11695
Mar. 31, 1997 11998 11949 12012
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Aggregate total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
18
<PAGE> 21
NATIONS FUNDS
Nations Managed Index Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C AND PRIMARY A SHARES AS OF MARCH 31, 1997
AGGREGATE TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Since Inception (07/31/96) through
03/31/97 19.61%*
Since Inception (07/31/96) through
03/31/97 20.11%
</TABLE>
* adjusted for maximum contingent deferred sales charge of 0.50% when Investor C
Shares are redeemed within one year of purchase
<TABLE>
<CAPTION>
PRIMARY A SHARES
- ----------------------------------------------
<S> <C>
Since Inception (07/31/96) through
03/31/97 20.22%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C and Primary A Shares of Nations Managed Index
Fund from the date each class of shares was first offered. Figures for the
Standard & Poor's 500 Composite Stock Price Index, an unmanaged index of
500 widely held common stocks, includes reinvestment of dividends.
Each chart assumes the reinvestment of all distributions.
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD & GROWTH OF
POORS 500 INVESTMENT
COMPOSITE WITH
MEASUREMENT PERIOD STOCK PRICE DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
JULY 31, 1996 10000 10000
SEPT. 30, 1996 10785 10744
DEC. 31, 1996 11684 11688
MAR. 31, 1997 11998 11961
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD & GROWTH OF
POORS 500 INVESTMENT
COMPOSITE WITH
MEASUREMENT PERIOD STOCK PRICE DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
JULY 31, 1996 10000 10000
SEPT. 30, 1996 10785 10744
DEC. 31, 1996 11684 11700
MAR. 31, 1997 11998 12022
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Aggregate total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
19
<PAGE> 22
NATIONS EQUITY INDEX FUND
PERFORMANCE AND COMMENTARY
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER
Greg Golden is Portfolio Manager of Nations Equity Index Fund and
Structured Products Manager, Equity Management for TradeStreet Investment
Associates, Inc., investment sub-adviser to the Fund.
INVESTMENT OBJECTIVE
The Fund seeks investment results that correspond, before fees and
expenses, to the total return of the Standard & Poor's 500 Composite Stock Price
Index ("S&P 500 Index").
- --------------------------------------------------------------------------------
PERFORMANCE SUMMARY AND REVIEW*
For the one-year period ended March 31, 1997, Nations Equity Index Fund
Investor A Shares provided a total return of 19.06%, slightly lagging the 19.19%
return of the Lipper S&P 500 Index Objective Funds Average.
HOW DID THE FUND PERFORM UNDER THE MARKET CONDITIONS THAT PREVAILED OVER THE
PAST TWELVE MONTHS?
Nations Equity Index Fund tracked the S&P 500 Index for the twelve months
ending March 31, 1997, returning 19.06% versus 19.77% for the Index. Index funds
continue to do well compared to more actively managed strategies. In fact,
according to Lipper Analytical Services, Inc., the Growth & Income Funds Average
for the same period was only 15.47%.
Since reaching a peak of 816.30 on February 18, 1997, the S&P 500 Index, as
of the end of the reporting period, had given back over 7.25% as investors began
to question the longevity of the current bull market. Recently, companies
reporting in-line or slightly below consensus earnings reports for the period
suffered crushing sell-offs as the market showed its disapproval. In this
environment, diversification has rewarded investors.
WHAT PARTICULAR SECTORS WERE FAVORABLE/UNFAVORABLE FOR THE FUND?**
Strength during the year was found in semiconductors, oil & gas drilling,
and savings & loans. Areas of weakness included gold, machines, and
construction.
- ---------------
* The performance shown includes the effect of fee waivers by the investment
adviser. Such fee waivers have the effect of increasing total return.
** Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics
and outlook. Also, the outlook of this Fund's portfolio manager may differ
from that of other Nations Funds' portfolio managers.
20
<PAGE> 23
NATIONS FUNDS
Nations Equity Index Fund
- -------------------------------------------
PORTFOLIO BREAKDOWN AS OF 3/31/97
<TABLE>
<S> <C>
Other Common Stocks, U.S. Treasury Bills,
Repurchase Agreement and
Other Assets and Liabilities (Net) 4.6%
Utilities 9.6%
Auto and Transportation 4.0%
Technology 10.2%
Materials/Processing 7.6%
Energy 9.8%
Financial Services 15.1%
Healthcare 10.5%
Producer Durables 6.7%
Consumer Discretionary 11.6%
Consumer Staples 10.3%
</TABLE>
- ---------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C> <C>
1. General Electric Company 2.8%
2. Coca-Cola Company 2.4
3. Exxon Corporation 2.3
4. Intel Corporation 2.0
5. Microsoft Corporation 1.9
6. Merck & Company, Inc. 1.8
7. Royal Dutch Petroleum Company, ADR 1.6
8. Philip Morris Companies Inc. 1.6
9. Procter & Gamble Company 1.4
10. International Business Machines Corporation 1.3
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
INVESTOR A SHARES
- ---------------------------------
<S> <C>
Year Ended 03/31/97 19.06%
Since Inception (10/10/95)
through 03/31/97 22.06%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Equity Index Fund on October 10, 1995
(inception date). Figures for the Standard & Poor's 500 Composite Stock Price
Index, an unmanaged index of 500 widely held common stocks, include reinvestment
of dividends. Funds included in the Lipper S&P 500 Index Objective Funds Average
are passively managed, limited expense funds designed to replicate the
performance of the Standard & Poor's 500 Index on a reinvested basis.
<TABLE>
<CAPTION>
Standard & Poor's 500 Growth of Investment
Measurement Period Composite Stock Price Lipper S&P 500 Index with Distributions
(Fiscal Year Covered) Index Objective Funds Average Reinvested
<S> <C> <C> <C>
Oct. 10, 1995 10000 10000 10000
Nov. 30, 1995 10602 10590 10710
Mar. 31, 1996 11170 11145 11267
11671 11632 11755
12032 11977 12092
13034 12959 13090
Mar. 31, 1997 13384 13287 13414
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
21
<PAGE> 24
NATIONS FUNDS
Nations Equity Index Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - PRIMARY A AND PRIMARY B SHARES AS OF MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
PRIMARY A SHARES
- -----------------------------------------------
<S> <C>
Year Ended 03/31/97 19.41%
Since Inception (12/15/93) through
03/31/97 18.58%
</TABLE>
AGGREGATE TOTAL RETURN
<TABLE>
<CAPTION>
PRIMARY B SHARES**
- -----------------------------------------------
<S> <C>
Since Inception (06/28/96) through
03/31/97 13.93%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Primary A and Primary B Shares of Nations Equity Index Fund
from the date each class of shares was first offered. Figures for the
Standard & Poor's 500 Composite Stock Price Index, an unmanaged index of
500 widely held common stocks, include reinvestment of dividends.
Assumes the reinvestment of all distributions.
** Please note that the performance shown for Primary B Shares includes
the performance for Primary A Shares from their date of inception
(12/15/93) through 6/28/96, plus the performance for Primary B Shares from
their date of inception (6/28/96) through 3/31/97. The expense structures
for Primary A and Primary B Shares are similar, except that Primary B
Shares are subject to a shareholder servicing fee of up to 60 basis
points. This will result in a slight variance in the performance of
Primary A and Primary B Shares.
PERFORMANCE COMPARISONS
PRIMARY A AND PRIMARY B SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD & GROWTH OF
POOR'S 500 INVESTMENT
COMPOSITE WITH
MEASUREMENT PERIOD STOCK PRICE DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
DEC. 15, 1993 10000 10000
9738 9681
9778 9710
10256 10182
NOV. 30, 1994 10254 10172
11251 11151
12324 12208
13302 13166
NOV. 30, 1995 14103 13938
MAR. 31, 1996 14859 14677
JUN. 28, 1996 15525 15329
16005 15787
17336 17093
MAR. 31, 1997 17804 17526
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual and aggregate total returns are historical in nature and measure
net investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends.
22
<PAGE> 25
NATIONS DISCIPLINED EQUITY FUND
PERFORMANCE AND COMMENTARY
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER
Jeff Moser, CFA, is Senior Portfolio Manager of Nations Disciplined Equity
Fund and Senior Product Manager, Equity Management for TradeStreet Investment
Associates, Inc., investment sub-adviser to the Fund.
INVESTMENT OBJECTIVE
The Fund seeks growth of capital by investing in companies that are
expected to produce significant increases in earnings per share.
- --------------------------------------------------------------------------------
PERFORMANCE REVIEW
For the one-year period ended March 31, 1997, Nations Disciplined Equity
Fund Investor A Shares provided shareholders with a total return of 16.76%,
outperforming the Lipper Growth Funds Average, which returned 11.75%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Moser shares his views on financial market
conditions and Fund performance for the one-year period ended March 31, 1997.
PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE.
The core premise behind Nations Disciplined Equity Fund is that earnings
drive stock prices. We use quantitative techniques to construct an equally
weighted portfolio of undervalued companies most likely to report earnings that
exceed expectations.
To capture earnings momentum or earnings surprises, the Fund uses a
proprietary tracking system that follows a set of established rules for the buy,
sell and valuation process. Essentially, this proprietary model, called ALPHA,
does three key things: it identifies stock buying opportunities, evaluates the
reasonableness of the price of these opportunities and signals when to sell a
stock. Of course, we validate the entire process with in-depth research and
analysis of the companies identified by ALPHA.
WHAT PARTICULAR SECTORS/STOCKS IMPACTED FUND PERFORMANCE?*
Investments in financial stocks proved very rewarding over the past year.
This group scored very high within our quantitative model on both earnings
momentum and valuation. Therefore, the Fund was overweighted in the group most
of the year. Some of the best performers were Student Loan Marketing
Association, BankAmerica Corporation and Travelers Group Inc. Another standout
sector for the Fund was consumer stocks. The Fund was very successful with
investments in the retail group including NIKE, Inc., TJX Companies Inc. and
Dayton Hudson Corporation. Retail food was another spotlight within the consumer
group, with significant gains in Safeway Inc. and Vons Companies.
We lost ground to the market by being underweighted in the consumer staples
sector. Our valuation models indicated that household products and healthcare
companies were significantly overvalued so we avoided those stocks. However, the
market favored those types of large-capitalization, growth stocks for their
stability and consistency of earnings. The Fund did not own the blue-chip names
such as Coca-Cola Co., Proctor & Gamble, and Merck & Company, Inc. which
accounted for much of the market's advance. We were also negatively impacted by
surprise downturns in earnings momentum in names such as Digital Equipment, Bay
Networks (both affected by losing business to competitors) and WorldCom Inc.
(dilutive merger). Each of these stocks was subsequently sold by the Fund.
- ---------------
* Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook. Also, the outlook of this Fund's portfolio manager may differ from
that of other Nations Funds' portfolio managers.
23
<PAGE> 26
HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
The sector emphasis and portfolio characteristics of the Fund are driven by
our quantitative model, which, we believe, identifies the best combination of
earnings momentum and valuation among the stock universe. The narrow,
large-company focused market of the last few years has made those companies
relatively less attractive on a valuation basis. Therefore, we are finding the
best valuations among medium-sized companies and, thus, the Fund has an average
market capitalization significantly below that of the Standard & Poor's 500
Composite Stock Price Index. We continue to find the best earnings momentum in
financial and energy stocks and are emphasizing those sectors. Also, we are
emphasizing the capital goods sector based on positive business trends and
earnings from this group in the current economic environment. The Fund is
underrepresented in healthcare companies as our process shows the group to be
significantly overvalued.
24
<PAGE> 27
NATIONS FUNDS
Nations Disciplined Equity Fund
- ------------------------------------
PORTFOLIO BREAKDOWN AS OF 3/31/97
<TABLE>
<S> <C>
Repurchase Agreement and Other Assets and Liabilities (Net) 2.7%
Utilities 7.3%
Technology 7.8%
Producer Durables 7.4%
Other 3.7%
Materials/Processing 13.4%
Healthcare 3.6%
Auto and Transportation 5.8%
Consumer Discretionary 8.0%
Energy 12.2%
Financial Services 21.8%
</TABLE>
- -----------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
<TABLE>
<S> <C> <C>
1. United Technologies Corporation 2.3%
2. Dell Computer Corporation 2.2
3. Texaco Inc. 2.2
4. USX-Marathon Group (New) 2.2
5. Compuware Corporation 2.1
6. Baker Hughes Inc. 2.1
7. Guidant Corporation 2.1
8. Safeway Inc. 2.1
9. Fruit of the Loom Inc., Class A 2.1
10. Chase Manhattan Corporation 2.1
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
INVESTOR A SHARES
- ---------------------------------
<S> <C>
Year Ended 03/31/97 16.76%
Since Inception (07/26/93)
through 03/31/97 14.95%
</TABLE>
Inception is based on The Capitol Mutual Funds Special Equity Portfolio Class B
Shares, which were reorganized into Investor A Shares of Nations Disciplined
Equity Fund as of the close of business on April 29, 1994. The Capitol Mutual
Funds Special Equity Portfolio Class B Shares commenced operations on July 26,
1993. The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Disciplined Equity Fund on July 26,
1993 (inception date). Figures for the Standard & Poor's 500 Composite Stock
Price Index, an unmanaged index of 500 widely held common stocks, include
reinvestment of dividends. Funds included in the Lipper Growth Funds Average
normally invest in companies whose long-term earnings are expected to grow
significantly faster than the earnings of the stocks represented in the major
unmanaged stock indices.
<TABLE>
<CAPTION>
Standard & Poor's 500 Growth of Investment
Measurement Period Composite Stock Price Lipper Growth Funds with Distributions
(Quarterly) Index Average Reinvested
<S> <C> <C> <C>
July 26, 1993 10000 10000 10000
10299 10537 11894
Nov. 30, 1993 10538 10783 11506
10139 10432 10926
10181 10165 10188
10678 10711 11012
Nov. 30, 1994 10676 10577 10768
11714 11379 10938
12831 12510 12313
13850 13617 13562
Nov. 30, 1995 14683 13943 13707
Mar. 31, 1996 15471 14693 14300
16165 15334 14863
16664 15772 15354
18052 16617 16709
Mar. 31, 1997 18537 16454 16696
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
25
<PAGE> 28
NATIONS FUNDS
Nations Disciplined Equity Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N, PRIMARY A AND PRIMARY B
SHARES AS OF MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 15.95%*
Year Ended 03/31/97 16.45%
Since Inception (05/10/95) through
03/31/97 21.12%
</TABLE>
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
<TABLE>
<CAPTION>
INVESTOR N SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 15.86%
Since Inception (05/20/94) through
03/31/97 16.99%
</TABLE>
<TABLE>
<CAPTION>
PRIMARY A SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 17.00%
Since Inception (10/01/92) through
03/31/97 22.80%
</TABLE>
AGGREGATE TOTAL RETURN
<TABLE>
<CAPTION>
PRIMARY B SHARES**
- ----------------------------------------------
<S> <C>
Since Inception (06/28/96) through
03/31/97 12.13%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N, Primary A and Primary B Shares of
Nations Disciplined Equity Fund from the date each class of shares was
first offered. Figures for the Standard & Poor's 500 Composite Stock Price
Index, an unmanaged index of 500 widely held common stocks, include
reinvestment of dividends.
Each chart assumes the reinvestment of all distributions.
** Please note that the performance shown for Primary B Shares includes
the performance for Primary A Shares from their date of inception
(10/1/92) through 6/28/96, plus the performance for Primary B Shares from
their date of inception (6/28/96) through 3/31/97. The expense structures
for Primary A and Primary B Shares are similar, except that Primary B
Shares are subject to a shareholder servicing fee of up to 60 basis
points. This will result in a slight variance in the performance of
Primary A and Primary B Shares.
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD & GROWTH OF
POOR'S 500 INVESTMENT
COMPOSITE WITH
MEASUREMENT PERIOD STOCK PRICE DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
MAY 10, 1995 10000 10000
10640 10673
11485 11744
NOV. 30, 1995 12176 11845
MAR. 31, 1996 12829 12343
13404 12819
13819 13238
14970 14393
MAR. 31, 1997 15372 14373
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD & GROWTH OF
POORS 500 INVESTMENT
COMPOSITE WITH
MEASUREMENT PERIOD STOCK PRICE DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
MAY 20, 1994 10000 10000
9755 9779
10231 10555
NOV. 30, 1994 10230 10304
11224 10437
12294 11730
13271 12896
NOV. 30, 1995 14069 12999
MAR. 31, 1996 14824 13533
15489 14034
15967 14472
17297 15721
MAR. 31, 1997 17762 15678
</TABLE>
PRIMARY A AND PRIMARY B SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD & GROWTH OF
POORS 500 INVESTMENT
COMPOSITE WITH
MEASUREMENT PERIOD STOCK PRICE DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
OCT. 1, 1992 10000 10000
NOV. 30, 1992 10502 13311
10961 14105
11013 15100
11297 17923
NOV. 30, 1993 11559 17279
11121 16409
11167 15304
11712 16542
NOV. 30, 1994 11710 16181
12849 16441
14074 18521
15192 20413
NOV. 30, 1995 16106 20636
MAR. 31, 1996 16970 21529
JUN. 28, 1996 17731 22388
18279 23139
19801 25193
MAR. 31, 1997 20333 25188
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual and aggregate total returns are historical in nature and measure
net investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends.
26
<PAGE> 29
NATIONS CAPITAL GROWTH FUND
PERFORMANCE AND COMMENTARY
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER
Philip J. Sanders, CFA, is Senior Portfolio Manager of Nations Capital
Growth Fund and Senior Product Manager, Equity Management for TradeStreet
Investment Associates, Inc., investment sub-adviser to the Fund.
INVESTMENT OBJECTIVE
The Fund seeks growth of capital by investing in companies that are
believed to have superior earnings growth potential.
- --------------------------------------------------------------------------------
PERFORMANCE REVIEW
For the one-year period ended March 31, 1997, Nations Capital Growth Fund
Investor A Shares provided shareholders with a total return of 11.58%, slightly
underperforming the Lipper Growth Funds Average, which returned 11.75%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Sanders shares his views on financial
market conditions and Fund performance for the one-year period ended March 31,
1997.
PLEASE DESCRIBE THE FUND'S INVESTMENT STYLE AND PHILOSOPHY.
We believe that a stock portfolio of large-capitalization companies with
superior long-term growth prospects, selling at reasonable prices, will provide
superior returns over a market cycle. We look for companies that are well
positioned to generate sustainable earnings growth at a rate well above the
overall market. The companies in which the Fund invests are generally regarded
as industry leaders, have strong track records and possess key competitive
advantages that can be used to sustain their above-average growth rates and
potentially report earnings above consensus expectations. To augment our search
for superior growth companies, we particularly focus on those firms whose
prospects are leveraged to positive secular themes embedded in the marketplace.
These themes include demographics, emerging technologies, deregulation and
changes in consumer spending patterns, among others.
While the majority of the Fund's holdings are in large-capitalization
issues, we have the flexibility to selectively invest in some smaller company
issues that possess superior growth prospects.
WHAT WERE MARKET CONDITIONS OVER THE LAST TWELVE MONTHS?
Moderate economic growth and a relatively benign inflation environment
combined to provide a favorable backdrop for corporate earnings growth and the
overall equity market during the period. In turn, this presented a favorable
environment for investors in Nations Capital Growth Fund.
WHAT PARTICULAR SECTORS/STOCKS IMPACTED FUND PERFORMANCE?*
The sectors that stood out in terms of performance over the past year were
financials, technology and healthcare. Financial stocks benefited tremendously
from a combination of moderate economic growth and relatively low inflation.
While most financial stocks performed well over the past year, bank stocks, in
particular, did well. The Fund benefited from this trend through its positions
in Norwest Corporation, Bank of New York, Inc. and Chase Manhattan Corporation.
Technology continued to benefit from the ongoing trend toward
productivity-driven capital spending. The growth of the Internet, the computer
networking of corporate America, and the growing demand for advanced
telecommunication services, all combined to leave this sector with a compelling
secular growth profile. Despite the strong, positive fundamentals for the
sector, technology company stock price performance tended to favor established,
large-capitalization companies. Two portfolio holdings that performed
particularly well during this time period were Intel Corporation and
- ---------------
* Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook. Also, the outlook of this Fund's portfolio manager may differ from
that of other Nations Funds' portfolio managers.
27
<PAGE> 30
Microsoft Corporation. These leading companies continued to cement their
positions as dominant players in the semiconductor and software industries,
respectively.
Finally, the healthcare sector exhibited strong performance, led by major
pharmaceutical companies such as Merck & Company, Inc., Bristol-Myers Squibb
Companies and Schering-Plough Corporation. Fund performance benefited
significantly from these holdings. High quality earnings growth resulting from
new product approvals and strong unit demand trends were rewarded with higher
valuations in the marketplace. The Fund's exposure to this sector is broad-based
and also includes healthcare service providers, hospital supply companies and
medical device manufacturers.
Fund performance was negatively impacted by the consumer cyclical and
utilities sectors. Within the consumer cyclical sector, the Fund's emphasis on
certain fast growing retailers such as OfficeMax Inc., Lowe's Companies and Home
Depot was not rewarded as fears of slowing growth and increased competition
constrained the valuation of these stocks. Also, the Fund's focus on the
telecommunications portion of the utilities sector hampered performance as
several holdings, including Frontier Corporation and Century Telephone
Enterprises, experienced slower than expected growth. Even telecommunications
companies where earnings met expectations posted somewhat disappointing price
performance as ongoing regulatory reform in the sector fanned investor fears of
heightened competition.
The relatively narrow focus of the market's advance also hampered the
Fund's performance. Throughout the year, investor preference for the largest
capitalization issues remained prominent. This trend was especially evident in
the technology sector where the Fund maintained an overweighted posture
throughout the year. While the Fund benefited from its holdings in
large-capitalization issues such as Microsoft Corporation and Intel Corporation,
many smaller capitalization issues in the data networking and software
industries lagged the overall market despite strong fundamental outlooks. In
general, the market's preference for the largest capitalization stocks did not
play to the strengths of the Fund given that its emphasis on growth results in a
portfolio containing a higher proportion of smaller, faster growing companies
than the Standard & Poor's 500 Composite Stock Price Index.
HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
The ongoing trend toward productivity-driven capital spending continues to
provide a favorable investment backdrop for technology stocks. Within this
sector, our focus is likely to remain on software, networking, data services and
telecommunications equipment issues, where earnings growth prospects remain the
most sustainable. While technology sector returns have been driven in the most
recent time period by larger-capitalization, high-profile issues, we expect
performance to broaden out as valuation discrepancies between large and smaller
companies become increasingly compelling. Also, strong unit demand trends, an
increasingly responsive Federal Drug Administration and generally rising
estimates continue to provide support for our emphasis on healthcare stocks.
Finally, in keeping with the Fund's overall growth philosophy, the utility,
energy and most economically sensitive sectors are likely to remain
underweighted in the Fund given their uninspiring earnings outlooks and
below-average sustainable growth prospects.
28
<PAGE> 31
<TABLE>
<CAPTION>
NATIONS FUNDS
NATIONS CAPITAL GROWTH FUND
- ----------------------------------------
PORTFOLIO BREAKDOWN AS OF 3/31/97
<S> <C>
Healthcare 18.3%
Technology 16.4%
Financil Services 15.9%
Consumer Discretionary 11.7%
Consumer Staples 7.7%
Materials/Processing 6.3%
Producer Durables 5.2%
Telecommunications 4.7%
Other 4.7%
Utilities 4.5%
Energy 4.4%
Repurchase Agreement and Other
Assets and Liabilities (Net) 0.2%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C> <C>
1. Intel Corporation 2.8%
2. General Re Corporation 2.7
3. Abbott Laboratories 2.2
4. American International Group, Inc. 2.2
5. Microsoft Corporation 2.2
6. Emerson Electric Company 2.2
7. Merck & Company Inc. 2.1
8. HFS Inc. 2.0
9. PepsiCo Inc. 2.0
10. Schering-Plough Corporation 1.9
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<S> <C>
Year Ended 03/31/97 11.58%
Since Inception (10/02/92)
through 03/31/97 12.65%
</TABLE>
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor A
Shares of Nations Capital
Growth Fund on October 2, 1992
(inception date). Figures for
the Standard & Poor's 500
Composite Stock Price Index,
an unmanaged index of 500
widely held common stocks,
include reinvestment of
dividends. Funds included in
the Lipper Growth Funds
Average normally invest in
companies whose long-term
earnings are expected to grow
significantly faster than the
earnings of the stocks
represented in the major
unmanaged stock indices.
<TABLE>
<CAPTION>
Standard & Poor's 500 Growth of Investment
Measurement Period Composite Stock Price Lipper Growth Funds with Distributions
(Quarterly) Index Average Reinvested
<S> <C> <C> <C>
Oct. 2, 1992 10000 10000 10000
Nov. 30, 1992 10502 10909 10777
10961 11197 10964
11013 11290 10853
11297 11851 11217
Nov. 30, 1993 11559 12121 11588
11121 11729 11237
11167 11448 10897
11712 12052 11564
Nov. 30, 1994 11710 11896 11408
12849 12800 12128
14074 14048 13433
15192 15276 14612
Nov. 30, 1995 16106 15671 14666
Mar. 31, 1996 16970 16515 15312
17731 17218 15929
18279 17712 16506
19801 18728 17349
Mar. 31, 1997 20333 18596 17086
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
29
<PAGE> 32
NATIONS FUNDS
Nations Capital Growth Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N, PRIMARY A AND PRIMARY B
SHARES AS OF MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 10.96%*
Year Ended 03/31/97 11.39%
Since Inception (10/02/92) through
03/31/97 11.96%
</TABLE>
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
<TABLE>
<CAPTION>
INVESTOR N SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 10.68%
Since Inception (06/07/93) through
03/31/97 12.49%
<CAPTION>
PRIMARY A SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 11.88%
Since Inception (09/30/92) through
03/31/97 12.93%
</TABLE>
AGGREGATE TOTAL RETURN
<TABLE>
<CAPTION>
PRIMARY B SHARES**
- ----------------------------------------------
<S> <C>
Since Inception (06/28/96) through
03/31/97 7.07%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N, Primary A and Primary B Shares of
Nations Capital Growth Fund from the date each class of shares was first
offered. Figures for the Standard & Poor's 500 Composite Stock Price
Index, an unmanaged index of 500 widely held common stocks, include
reinvestment of dividends.
Each chart assumes the reinvestment of all distributions.
** Please note that the performance shown for Primary B Shares includes
the performance for Primary A Shares from their date of inception
(9/30/92) through 6/28/96, plus the performance for Primary B Shares from
their date of inception (6/28/96) through 3/31/97. The expense structures
for Primary A and Primary B Shares are similar, except that Primary B
Shares are subject to a shareholder servicing fee of up to 60 basis
points. This will result in a slight variance in the performance of
Primary A and Primary B Shares.
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD & GROWTH OF
POORS 500 INVESTMENT
COMPOSITE WITH
MEASUREMENT PERIOD STOCK PRICE DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
OCT. 2, 1992 10000 10000
NOV. 30, 1992 10502 10752
10961 10922
11013 10794
11297 11135
NOV. 30, 1993 11559 11481
11121 11109
11167 10758
11712 11390
NOV. 30, 1994 11710 11219
12849 11898
14074 13144
15192 14276
NOV. 30, 1995 16106 14298
16970 14917
17731 15513
18279 16075
MAR. 31, 1996 19801 16876
MAR. 31, 1997 20333 16616
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD & GROWTH OF
POORS 500 INVESTMENT
COMPOSITE WITH
MEASUREMENT PERIOD STOCK PRICE DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
JUNE 7, 1993 10000 10000
10029 10239
10287 10562
NOV. 30, 1993 10526 10889
10127 10537
10170 10205
10666 10813
NOV. 30, 1994 10664 10641
11701 11293
12817 12481
13834 13552
NOV. 30, 1995 14667 13582
MAR. 31, 1996 15454 14157
16146 14699
16646 15210
18032 15943
MAR. 31, 1997 18516 15669
</TABLE>
PRIMARY A AND PRIMARY B SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
STANDARD & GROWTH OF
POOR'S 500 INVESTMENT
COMPOSITE WITH
MEASUREMENT PERIOD STOCK PRICE DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
SEPT. 30, 1992 10000 10000
NOV. 30, 1992 10502 10780
10961 10982
11013 10877
11297 11248
NOV. 30, 1993 11559 11626
11121 11279
11167 10944
11712 11631
NOV. 30, 1994 11710 11481
12849 12212
14074 13520
15192 14726
NOV. 30, 1995 16106 14778
MAR. 31, 1996 16970 15449
JUNE 28, 1996 17731 16080
18279 16682
19801 17528
MAR. 31, 1997 20333 17284
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual and aggregate total returns are historical in nature and measure
net investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends.
30
<PAGE> 33
NATIONS EMERGING GROWTH FUND
PERFORMANCE AND COMMENTARY
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER
C. Thomas Clapp, CFA, is Senior Portfolio Manager of Nations Emerging
Growth Fund and Director of the Equity Management Group for TradeStreet
Investment Associates, Inc., investment sub-adviser to the Fund.
INVESTMENT OBJECTIVE
The Fund seeks capital appreciation by investing in emerging growth
companies that are believed to have superior long-term earnings growth
prospects.
- --------------------------------------------------------------------------------
PERFORMANCE REVIEW
For the one-year period ended March 31, 1997, Nations Emerging Growth Fund
Investor A Shares provided shareholders with a total return of 0.18%,
underperforming the Lipper MidCap Funds Average return of 4.95%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Clapp shares his views on financial market
conditions and Fund performance for the one-year period ended March 31, 1997.
PLEASE DESCRIBE THE FUND'S INVESTMENT STYLE AND PHILOSOPHY.
The Fund invests in high quality growth companies with average market
capitalizations of $2 billion. The earnings growth rates of these companies have
averaged over 30% per year for the previous three years. Operating margins and
return on equity are much higher than the average mid-capitalization size
company, often reflecting value-added product lines that serve niche markets
with significant barriers to entry. As a result of this discipline, most
companies selected for the portfolio have sales between $50 million and $1.5
billion.
HOW DID THE FUND PERFORM UNDER THE MARKET CONDITIONS THAT PREVAILED OVER THE
LAST TWELVE MONTHS?
During the course of the year, as investors became increasingly nervous
over the high level of the stock market, money flowed to the larger, more stable
blue chip stocks. This resulted in small- and mid-sized companies, such as those
in which the Fund invests, underperforming the S&P 500 Index (a broad market
index) for the year.
The Fund invests in companies with high earnings growth rates. Those high
growth rates are usually accompanied by high price-to-earnings ratios (p/e
ratios). Unfortunately, the market environment was one in which the threat of
rising interest rates compressed p/e ratios in all sectors and, as a result,
many portfolio holdings traded at substantial discounts to their growth rates.
To compound the difficult environment, the Fund was significantly overweighted
in the volatile technology sector, with these holdings averaging over 30% of the
portfolio for the year. Although the Fund's technology holdings have high growth
rates, the market penalized many of these stocks for their high p/e ratios.
WHAT PARTICULAR SECTORS/STOCKS IMPACTED FUND PERFORMANCE?*
Numerous companies included in the Fund had returns in excess of 50% for
the year. The best industries (and some portfolio holdings in those industries)
for the year included: financials (Franklin Resources Inc., Northern Trust
Company and First USA Paymentech Inc.), consumer cyclicals (Dollar General
Corporation, Lands' End Inc. and Promus Hotel) and healthcare (Acuson
Corporation, Genesis Health Ventures and Health Management Associates Inc.). For
the coming year, healthcare and retailers are expected to continue to offer some
of the best earnings growth.
Weaker industries for the period were networking and software stocks as
investors began to fear the market dominance of Intel Corporation and Microsoft
Corporation. As Intel cut prices on its networking products and Microsoft
announced new software products, investors became concerned that smaller
companies would not be able to compete against these industry giants.
Accordingly, we have chosen to focus on technology companies with proven
products, high barriers to entry and defensible market positions.
- ---------------
* Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook. Also, the outlook of this Fund's portfolio manager may differ from
that of other Nations Funds' portfolio managers.
31
<PAGE> 34
LARGE-CAPITALIZATION STOCKS OUTPERFORMED SMALLER-CAPITALIZATION STOCKS OVER THE
PAST YEAR.
WHAT SCENARIO DO YOU FORESEE OVER THE NEXT TWELVE MONTHS?
During the past year, large-capitalization stocks significantly
outperformed smaller-capitalization stocks. As the spread in performance
continued, the relative valuation of small-capitalization and mid-capitalization
stocks became much more attractive. Going forward, we believe the interest rate
environment will be benign, which should close the valuation gap and allow
mid-capitalization stocks to outperform over the coming year.
HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
The Fund will continue to focus on the strongest industries measured by our
monitor list of 300 eligible companies with expanding margins and positive
earnings revisions. Technology and energy sectors have come under pressure and
their respective weightings will be brought closer in line to those of the
Standard & Poor's Midcap 400 Index (an index of mid-capitalization companies).
We remain confident in the strength of the economy and therefore, expect to
maintain the Fund's positions in consumer cyclicals. Healthcare is expected to
enjoy superb growth and we will be looking for more opportunities in this
sector.
32
<PAGE> 35
NATIONS FUNDS
Nations Emerging Growth Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS OF 3/31/97
<TABLE>
<CAPTION>
<S> <C> <C>
1. Technology 20.4%
2. Consumer Discretionary 13.8%
3. Financial Services 11.0%
4. Healthcare 11.0%
5. Energy 10.5%
6. Other 9.8%
7. Repurchase Agreement and Other
Assets and Liabilities (Net) 8.5%
8. Producer Durables 5.9%
9. Telecommunications 3.4%
10. Consumber Staples 2.9%
11. Auto and Transportation 2.8%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C> <C>
1. BMC Software, Inc. 1.9%
2. Tellabs, Inc. 1.8
3. Papa John's International Inc. 1.8
4. Converse Technology Inc. 1.7
5. Bed Bath & Beyond Inc. 1.7
6. Parker & Parsley Petroleum Company 1.7
7. Northern Trust Company 1.7
8. SunGard Data Systems, Inc. 1.6
9. SunAmerica, Inc. 1.6
10. Parametric Technology Corporation 1.6
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
INVESTOR A SHARES
- ---------------------------------
<S> <C>
Year Ended 03/31/97 0.18%
Since Inception (12/10/92)
through 03/31/97 12.51%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Emerging Growth Fund on December 10,
1992 (inception date). Figures for the Standard & Poor's Smallcap 600 Index,
which is an unmanaged index which measures the performance of selected U.S.
stocks with a small market capitalization, include reinvestment of dividends.
Figures for the Standard & Poor's Midcap 400 Index consists of 400 domestic
stocks chosen for market size (median market capitalization of $676 million),
liquidity and industry group representation. It is an unmanaged, market-value
weighted index (stock price times shares outstanding), with each stock affecting
the index in proportion to its market value. The index is comprised of
industrials, utilities, financials and transportation, in size order. Funds
included in the Lipper MidCap Funds Average limit their investments to companies
with average market capitalizations and/or revenues between $800 million and the
average market capitalization of the Wilshire 4500 Index.
<TABLE>
<CAPTION>
Growth of
Investment with
Measurement Period Lipper MidCap Funds Standard & Poor's Standard & Poor's Distributions
(Quarterly) Average Midcap 400 Index Smallcap 600 Index Reinvested
<S> <C> <C> <C> <C>
Dec. 10, 1992 10000 10000 10000 10000
10352 10328 10685 10066
10629 10569 10889 10360
11999 11100 11974 11252
Nov. 30, 1993 11697 11395 12165 11699
11335 10963 11495 11073
10769 10563 10982 10345
11671 11278 11779 11740
Nov. 30, 1994 11573 10987 11456 11745
12408 11876 11964 12342
13505 12923 13068 13438
15054 14185 14703 14814
Nov. 30, 1995 15237 14387 14732 15234
Mar. 31, 1996 16167 15273 15535 16581
16904 15713 16305 17797
17467 16170 16786 18086
17809 17150 17698 18025
Mar. 31, 1997 16746 17462 16678 16611
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
33
<PAGE> 36
NATIONS FUNDS
Nations Emerging Growth Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N, PRIMARY A AND PRIMARY B
SHARES AS OF MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 (0.49)%*
Year Ended 03/31/97 (0.04)%
Since Inception (12/18/92) through
03/31/97 11.87%
</TABLE>
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
<TABLE>
<CAPTION>
INVESTOR N SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 (0.57)%
Since Inception (06/07/93) through
03/31/97 13.39%
</TABLE>
<TABLE>
<CAPTION>
PRIMARY A SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 0.48%
Since Inception (12/04/92) through
03/31/97 12.42%
</TABLE>
<TABLE>
<CAPTION>
AGGREGATE TOTAL RETURN
PRIMARY B SHARES**
- ----------------------------------------------
<S> <C>
Since Inception (06/28/96) through
03/31/97 (6.80)%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N, Primary A and Primary B Shares of
Nations Emerging Growth Fund from the date each class of shares was first
offered. Figures for the Standard & Poor's Smallcap 600 Index, which is an
unmanaged index which measures the performance of selected U.S. stocks
with a small market capitalization, include reinvestment of dividends.
Figures for the Standard & Poor's Midcap 400 Index consists of 400
domestic stocks chosen for market size (median market capitalization of
$676 million), liquidity and industry group representation. It is an
unmanaged, market-value weighted index (stock price times shares
outstanding), with each stock affecting the index in proportion to its
market value. The index is comprised of industrials, utilities, financials
and transportation, in size order.
Each chart assumes the reinvestment of all distributions.
** Please note that the performance shown for Primary B Shares includes
the performance for Primary A Shares from their date of inception
(12/4/92) through 6/28/96, plus the performance for Primary B Shares from
their date of inception (6/28/96) through 3/31/97. The expense structures
for Primary A and Primary B Shares are similar, except that Primary B
Shares are subject to a shareholder servicing fee of up to 60 basis
points. This will result in a slight variance in the performance of
Primary A and Primary B Shares.
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
STANDARD & STANDARD & INVESTMENT
POORS POOR'S WITH
MEASUREMENT PERIOD MIDCAP 400 SMALLCAP DISTRIBUTIONS
(QUARTERLY) INDEX 600 INDEX REINVESTED
<S> <C> <C> <C>
DEC. 18, 1992 10000 10000 10000
10328 10328 10030
10569 10526 10303
11100 11575 11173
NOV. 30, 1993 11395 11759 11589
10963 11111 10954
10563 10615 10207
11278 11385 11568
NOV. 30, 1994 10987 11074 11552
11876 11564 12115
12923 12632 13147
14185 14212 14488
NOV. 30, 1995 14387 14240 14875
MAR. 31, 1996 15273 15016 16176
15713 15761 17345
16170 16225 17621
17150 17107 17549
MAR. 31, 1997 16895 16121 16170
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH GROWTH
OF OF
INVESTMENT STANDARD STANDARD INVESTMENT
WITH & POOR'S & POOR'S WITH
MEASUREMENT DISTRIBUTIONS MIDCAP SMALLCAP DISTRIBUTIONS
PERIOD REINVESTED 400 600 REINVESTED
(QUARTERLY) B INDEX INDEX A
<S> <C> <C> <C> <C>
DEC. 4, 1992 10000 10000 10000 10000
9950 10675 10685 9950
10240 10923 10889 10240
11141 11472 11974 11141
NOV. 30, 1993 11583 11778 12165 11583
10975 11330 11495 10975
10256 10917 10982 10256
11644 11656 11779 11644
NOV. 30, 1994 11658 11356 11456 11658
12258 12274 11964 12258
13342 13357 13068 13342
14731 14661 14703 14731
NOV. 30, 1995 15156 14870 14732 15156
MAR. 31, 1996 16508 15785 15535 16508
JUN. 28, 1996 17731 16240 16305 17731
18004 16713 16786 18027
17932 17725 17698 17980
MAR. 31, 1997 16525 17462 16678 16574
</TABLE>
PRIMARY A AND PRIMARY B SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
STANDARD & STANDARD & INVESTMENT
MEASUREMENT POOR'S POOR'S WITH
PERIOD SMALLCAP MIDCAP 400 DISTRIBUTIONS
(QUARTERLY) 600 INDEX INDEX REINVESTED
<S> <C> <C> <C>
DEC. 4, 1992 10000 10000 10000
10685 10675 9950
10889 10923 10240
11974 11472 11141
NOV. 30, 1993 12165 11778 11583
11495 11330 10975
10982 10917 10256
11779 11656 11644
NOV. 30, 1994 11456 11356 11658
11964 12274 12258
13068 13357 13342
14703 14661 14731
NOV. 30, 1995 14732 14870 15156
MAR. 31, 1996 15535 15785 16508
JUN. 28, 1996 16305 16240 17731
16786 16713 18027
17698 17725 17980
MAR. 31, 1997 16678 17462 16574
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual and aggregate total returns are historical in nature and measure
net investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends.
34
<PAGE> 37
NATIONS MANAGED SMALLCAP INDEX FUND
PERFORMANCE AND COMMENTARY
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER
Greg Golden is Portfolio Manager of Nations Managed SmallCap Index Fund and
Structured Products Manager, Equity Management for TradeStreet Investment
Associates, Inc., investment sub-adviser to the Fund.
PORTFOLIO OBJECTIVE
The Fund seeks, over the long-term, to provide a total return which (gross
of fees and expenses) exceeds the total return of the Standard & Poor's SmallCap
600 Index ("S&P 600 Index").
- --------------------------------------------------------------------------------
PERFORMANCE REVIEW*
Nations Managed SmallCap Index Fund commenced operations on October 15,
1996. For the five months since its inception date to March 31, 1997, Nations
Managed SmallCap Index Fund Investor A Shares outpaced the S&P 600 Index,
returning (1.52%) versus (1.85%) for the Index. The Fund also outperformed the
Lipper Small Company Growth Funds Average, which returned (8.83%).
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Golden shares his views on financial market
conditions and Fund performance for the period from October 15, 1996 through
March 31, 1997.
PLEASE DESCRIBE THE FUND'S INVESTMENT STYLE AND PHILOSOPHY.
Unlike traditional index funds, Nations Managed SmallCap Index Fund has an
active management overlay. We believe that by minimizing exposure to
unattractive securities and carefully controlling portfolio risk, while
maintaining the characteristics of the S&P SmallCap 600 Index, we can provide
investors with positive incremental performance relative to the benchmark Index.
We believe that our carefully structured approach also reduces the risk of
underperforming the Index. In addition, we employ various techniques, such as
limiting portfolio turnover, to try to manage capital gains distributions.
HOW HAS THE FUND PERFORMED UNDER THE MARKET CONDITIONS THAT PREVAILED SINCE ITS
INCEPTION?
Volatility in the equity market spiked towards the end of the fiscal year,
leaving many mutual funds with sharp losses. Many companies reporting in-line or
slightly below consensus earnings reports for the period suffered crushing
sell-offs as the market showed its disapproval. In this environment,
diversification rewarded investors.
On a relative basis, the Fund performed well in this volatile environment,
due to good stock selection and sector weightings. Stock and sector selection
are driven by our multi-factor valuation approach which considers earnings
momentum, earnings estimate revisions, earnings yield, price-to-book,
price-to-earnings ratios and cash flow. Over the reporting period, the most
important individual factor in identifying the relative attractiveness of
companies was earnings momentum.
WHAT PARTICULAR SECTORS AFFECTED THE FUND'S PERFORMANCE?**
Strength during the year was found in finance, capital goods, and
transportation. Areas of weakness included technology, energy, materials &
services.
HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
Going forward, at least for the short-term, we expect to be focusing on
utilities, energy, and transportation. Less attractive groups, which are
underweighted in the Fund, appear to be consumer staples, capital goods, and
technology.
- ---------------
* The performance shown includes the effect of fee waivers and expense
reimbursements by the investment adviser. Such fee waivers and expense
reimbursements have the effect of increasing total return.
** Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics
and outlook. Also, the outlook of this Fund's portfolio manager may differ
from that of other Nations Funds' portfolio managers.
35
<PAGE> 38
NATIONS FUNDS
Nations Managed SmallCap Index Fund
- -------------------------------------
PORTFOLIO BREAKDOWN AS OF 3/31/97
<TABLE>
<S> <C>
U.S. Treasury Bill, Repurchase Agreement
and Other Assets and Liabilities (Net) 5.4%
Utilities 4.6%
Transportation 5.0%
Technology 9.0%
Producer Durables 4.6%
Other 8.7%
Materials/Processing 12.0%
Healthcare 7.2%
Financial Services 18.2%
Energy 6.3%
Consumer Staples 5.0%
Consumer Discretionary 14.0%
</TABLE>
- -----------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C> <C>
1. Union Planters Corporation 0.9%
2. Charter One Financial, Inc. 0.7
3. Noble Drilling Corporation 0.7
4. U.S. Filter Corporation 0.7
5. Zions Bancorporation 0.7
6. AGCO Corporation 0.6
7. SCI Systems, Inc. 0.6
8. Ross Stores, Inc. 0.5
9. Premark International, Inc. 0.5
10. Komag Inc. 0.5
</TABLE>
- -------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
<TABLE>
<CAPTION>
AGGREGATE TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<S> <C>
Since Inception (10/15/96)
through 03/31/97 (1.52)%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Managed SmallCap Index Fund on
October 15, 1996 (inception date). Figures for the Standard & Poor's Smallcap
600 Index, which is an unmanaged index which measures the performance of
selected U.S. stocks with a small market capitalization, include reinvestment of
dividends. Funds included in the Lipper Small Company Growth Funds Average limit
their investments to companies on the basis of the size of the company.
<TABLE>
<CAPTION>
Growth of Investment
Measurement Period Standard & Poors Lipper Small Company with Distributions
(Quarterly) Smallcap 600 Index Growth Funds Average Reinvested
<S> <C> <C> <C>
Oct. 15, 1996 10000 10000 10000
Dec. 31, 1996 10544 10232 10315
Mar. 31, 1997 9935 9534 9848
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Aggregate total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
36
<PAGE> 39
NATIONS FUNDS
Nations Managed SmallCap Index Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, PRIMARY A AND PRIMARY B SHARES AS OF
MARCH 31, 1997
AGGREGATE TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Since Inception (10/15/96) through
03/31/97 (1.95)%*
Since Inception (10/15/96) through
03/31/97 (1.46)%
</TABLE>
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
<TABLE>
<CAPTION>
PRIMARY A SHARES
- ----------------------------------------------
<S> <C>
Since Inception (10/15/96) through
03/31/97 (1.37)%
</TABLE>
<TABLE>
<CAPTION>
PRIMARY B SHARES**
- ----------------------------------------------
<S> <C>
Since Inception (10/15/96) through
03/31/97 (1.51)%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Primary A and Primary B Shares of Nations
Managed SmallCap Index Fund from the date each class of shares was first
offered. Figures for the Standard & Poor's Smallcap 600 Index, which is an
unmanaged index which measures the performance of selected U.S. stocks
with a small market capitalization, include reinvestment dividends.
Each chart assumes the reinvestment of all distributions.
** Please note that the performance shown for Primary B Shares includes
the performance for Primary A Shares from their date of inception
(10/15/96) through 6/28/96, plus the performance for Primary B Shares from
their date of inception (6/28/96) through 3/31/97. The expense structures
for Primary A and Primary B Shares are similar, except that Primary B
Shares are subject to a shareholder servicing fee of up to 60 basis
points. This will result in a slight variance in the performance of
Primary A and Primary B Shares.
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
STANDARD & INVESTMENT
POORS WITH
MEASUREMENT PERIOD SMALLCAP 600 DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
OCT. 15, 1996 10000 10000
DEC. 31, 1996 10544 10317
MAR. 31, 1997 9935 9805
</TABLE>
PRIMARY A AND PRIMARY B SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
STANDARD & INVESTMENT
POORS WITH
MEASUREMENT PERIOD SMALLCAP 600 DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
OCT. 15, 1996 10000 10000
DEC. 31, 1996 10544 10317
MAR. 31, 1997 9935 9863
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Aggregate total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
37
<PAGE> 40
NATIONS FUNDS
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 59.0%
<C> <S> <C>
AEROSPACE AND DEFENSE -- 2.5%
43,000 Litton Industries, Inc.+........ $ 1,730,750
20,100 Lockheed Martin Corporation..... 1,688,400
42,600 Raytheon Company................ 1,922,325
----------
5,341,475
----------
APPAREL AND TEXTILES -- 0.8%
24,500 V.F. Corporation................ 1,638,438
----------
AUTOMOBILE AND TRUCK
MANUFACTURERS -- 1.0%
68,700 Ford Motor Company.............. 2,155,463
----------
AUTOMOBILE PARTS
MANUFACTURERS -- 1.6%
48,700 Cooper Tire & Rubber Company.... 900,950
35,800 Dana Corporation................ 1,176,925
34,900 Snap-On Inc. ................... 1,352,375
----------
3,430,250
----------
BANKS -- 0.5%
13,900 Bankers Trust N.Y.
Corporation................... 1,139,800
----------
CHEMICALS -- BASIC -- 4.3%
69,200 Cabot Corporation............... 1,660,800
16,800 Dow Chemical Company............ 1,344,000
48,500 Georgia Gulf Corporation........ 1,224,625
35,600 Imperial Chemical Industries
Plc, ADR...................... 1,619,800
43,700 Mallinckrodt Inc. .............. 1,797,162
30,800 PPG Industries, Inc. ........... 1,663,200
----------
9,309,587
----------
CHEMICALS -- SPECIALTY -- 1.0%
125,400 Wellman Inc. ................... 2,194,500
----------
COAL, GAS AND PIPELINE -- 0.8%
133,100 Transportadora de Gas del Sur,
SA, ADR....................... 1,713,662
----------
COMPUTER RELATED -- 1.3%
52,300 Ceridian Corporation+........... 1,876,262
19,000 Hewlett-Packard Company......... 1,011,750
----------
2,888,012
----------
COMPUTER SERVICES -- 0.9%
49,500 Electronic Data Systems
Corporation................... 1,998,563
----------
COMPUTER SOFTWARE -- 2.3%
35,300 Cabletron Systems Inc.+......... 1,032,525
52,800 Computer Associates
International, Inc. .......... 2,052,600
57,900 3Com Corporation+............... 1,896,225
----------
4,981,350
----------
CONSTRUCTION -- 0.8%
31,200 Fluor Corporation............... 1,638,000
----------
DRUGS -- 1.7%
17,400 Glaxo Wellcome Plc.............. 615,525
31,900 Pharmacia & Upjohn Inc. ........ 1,168,338
26,500 Rhone-Poulenc Rorer, Inc. ...... 1,961,000
----------
3,744,863
----------
ELECTRIC POWER -- 4.4%
34,400 Baltimore Gas & Electric
Company....................... 920,200
39,100 Central & South West
Corporation................... 835,763
40,300 DTE Energy Company.............. 1,083,062
43,700 Duke Power Company.............. 1,928,263
29,400 Florida Progress Corporation.... 893,025
75,600 New York State Electric & Gas
Company....................... 1,634,850
50,100 PECO Energy Company............. 1,020,787
55,200 Unicom Corporation.............. 1,076,400
----------
9,392,350
----------
ELECTRICAL EQUIPMENT -- 0.7%
21,700 Grainger (W.W.) Inc. ........... 1,605,800
----------
ELECTRONICS -- 1.5%
48,600 AMP Inc. ....................... 1,670,625
26,300 Motorola, Inc. ................. 1,587,862
----------
3,258,487
----------
EXPLORATION AND DRILLING -- 0.8%
42,800 Burlington Resources Inc. ...... 1,829,700
----------
FOOD PRODUCERS -- 1.7%
55,100 IBP, Inc. ...................... 1,356,838
67,400 McCormick & Company............. 1,651,300
16,700 Sara Lee Corporation............ 676,350
----------
3,684,488
----------
FOOD RETAILERS -- 0.5%
44,300 Great Atlantic & Pacific Tea
Inc. ......................... 1,124,112
----------
FURNITURE AND APPLIANCES -- 1.9%
49,700 Black & Decker Corporation...... 1,596,613
55,700 Rubbermaid, Inc. ............... 1,385,538
23,700 Whirlpool Corporation........... 1,128,712
----------
4,110,863
----------
HOUSEHOLD PRODUCTS -- 0.8%
70,900 First Brands Corporation........ 1,737,050
----------
INSURANCE -- 0.7%
15,100 CNA Financial Corporation+...... 1,619,475
----------
MACHINERY AND EQUIPMENT -- 4.0%
35,100 Dover Corporation............... 1,842,750
51,400 Harsco Corporation.............. 1,869,675
48,900 Foster Wheeler Corporation...... 1,729,838
39,400 General Signal Corporation...... 1,541,525
53,500 Trinity Industries, Inc. ....... 1,625,062
----------
8,608,850
----------
MEDICAL PRODUCTS AND
SUPPLIES -- 1.4%
41,700 Bard (C.R.) Inc. ............... 1,188,450
28,300 Medtronic, Inc. ................ 1,761,675
----------
2,950,125
----------
MEDICAL SERVICES -- 0.6%
35,900 Columbia/HCA Healthcare
Corporation................... 1,207,137
----------
OIL -- DOMESTIC -- 5.8%
9,800 Amoco Corporation............... 848,925
44,000 Ashland Oil, Inc. .............. 1,771,000
13,900 Atlantic Richfield Company...... 1,843,487
33,800 Kerr-McGee Corporation.......... 2,091,375
52,100 Phillips Petroleum Company...... 2,129,587
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
38
<PAGE> 41
NATIONS FUNDS
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
OIL -- DOMESTIC -- (CONTINUED)
53,000 Ultramar Diamond Shamrock
Corporation................... $ 1,682,750
116,100 Union Texas Petroleum Holdings,
Inc. ......................... 2,133,338
----------
12,500,462
----------
OIL -- INTERNATIONAL -- 0.6%
9,500 Mobil Corporation............... 1,240,937
----------
PAPER AND FOREST PRODUCTS -- 3.5%
17,300 Georgia-Pacific Corporation..... 1,254,250
31,900 Mead Corporation................ 1,690,700
65,100 Sonoco Products Company......... 1,757,700
64,900 Westvaco Corporation............ 1,630,613
25,900 Weyerhaeuser Company............ 1,155,787
----------
7,489,050
----------
RECREATION -- 0.7%
54,100 Circus Circus Enterprises
Inc.+......................... 1,406,600
----------
RETAIL -- GENERAL -- 1.8%
40,000 Mercantile Stores Inc. ......... 1,855,000
40,500 Penney (J.C.) Company Inc. ..... 1,928,812
----------
3,783,812
----------
SEMICONDUCTORS -- 0.7%
66,900 Atmel Corporation+.............. 1,601,419
----------
STEEL -- 1.2%
20,500 British Steel Plc............... 545,812
43,700 Nucor Corporation............... 1,999,275
----------
2,545,087
----------
TELECOMMUNICATIONS -- 0.8%
46,200 Royal PTT Nederland NV, ADR..... 1,674,750
----------
TRANSPORTATION -- AIRLINES -- 1.2%
15,500 AMR Corporation+................ 1,278,750
61,500 Southwest Airlines Company...... 1,360,688
----------
2,639,438
----------
TRANSPORTATION -- RAILROADS -- 0.8%
22,600 Burlington Northern Santa Fe
Inc. ......................... 1,672,400
----------
UTILITIES -- NATURAL GAS -- 1.3%
62,000 Brooklyn Union Gas Company...... 1,751,500
32,000 Equitable Resources Inc. ....... 980,000
----------
2,731,500
----------
UTILITIES -- TELEPHONE -- 2.1%
17,000 Ameritech Corporation........... 1,045,500
15,800 Bell Atlantic Corporation....... 961,825
52,500 LCI International, Inc.+........ 879,375
32,900 SBC Communications Inc. ........ 1,731,362
----------
4,618,062
----------
TOTAL COMMON STOCKS
(Cost $129,911,108)........... 127,205,917
===========
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES -- 2.1%
<C> <S> <C>
$ 565,000 Chase Manhattan Credit Card,
Series 1996-4A, 6.730%
02/15/03........................ 566,057
1,000,000 Circuit City Credit Card Master
Trust, Series 1995-1, Class A,
6.375% 08/15/05................. 985,313
$ 1,150,000 CS First Boston Mortgage
Securities Corporation, 1996-2,
Class A4, 6.620% 09/25/09....... $ 1,118,375
1,000,000 EQCC, Home Equity Loan, Series
1996-2, 6.700% 09/15/08......... 996,880
825,000 Metris Master Trust, Series
1996-1, Class A, 6.450%
02/20/02........................ 821,642
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $4,533,209)............... 4,488,267
============
CORPORATE BONDS AND NOTES -- 12.1%
<S> <C> <C>
AUTOMOTIVE -- 2.0%
750,000 Ford Motor Credit Company, MTN,
6.060% 12/27/00................. 726,240
1,250,000 General Motors Acceptance
Corporation, MTN, 6.250%
10/18/99........................ 1,232,513
1,250,000 Olympic Auto Receivables, Series
1996-D, Class A4, 6.050%
08/15/02........................ 1,224,612
1,000,000 Olympic Auto Receivables Trust,
TBA, 6.800% 03/15/02............ 999,380
------------
4,182,745
------------
BANKING AND FINANCE -- 7.4%
1,000,000 ADVANTA Corporation, MTN, 6.540%
02/10/00........................ 968,460
1,250,000 Ahmanson (H.F.) & Company, MTN,
6.530% 06/01/98................. 1,251,325
1,300,000 BankAmerica Capital, 8.000%
12/15/26........................ 1,269,528
350,000 BanPonce Corporation, MTN, 6.550%
10/10/00........................ 343,231
900,000 Bear Stearns Company, Sr. Notes,
6.750% 05/01/01................. 887,355
1,250,000 Capital One Bank, Sr. Notes,
7.200% 07/19/99................. 1,255,225
1,125,000 Chrysler Financial Corporation,
Sub. Notes, 6.375% 01/28/00..... 1,111,039
400,000 Goldman Sachs, Grantor Notes,
6.200% 02/15/01++............... 388,284
1,000,000 International Lease Finance
Corporation, MTN, 6.270%
02/10/99........................ 993,250
1,250,000 Lehman Brothers Holdings, MTN,
6.850% 10/08/99................. 1,246,163
1,500,000 Morgan Stanley Group, Sr. Note,
MTN, 6.125% 01/05/99............ 1,486,920
Paine Webber Group:
800,000 7.700% 02/11/00................... 813,008
825,000 7.300% 10/15/03................... 813,656
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
39
<PAGE> 42
NATIONS FUNDS
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------------------------------------------------------------
CORPORATE)BONDS AND NOTES -- (CONTINUED)
<S> <C> <C>
BANKING AND FINANCE -- (CONTINUED)
Salomon Inc.:
$ 1,700,000 Sr. Note, 7.000% 05/15/99......... $ 1,703,349
500,000 MTN, 6.625% 11/30/00.............. 489,235
1,250,000 Union Planters Corporation, Sub.
Notes, 6.750% 11/01/05.......... 1,179,225
------------
16,199,253
------------
INDUSTRIAL -- 2.2%
575,000 Auburn Hills Trust, Deb., 12.000%
05/01/20........................ 832,157
1,500,000 Comdisco Inc., Sub. Note, 5.750%
02/15/01........................ 1,428,495
425,000 Lockheed Martin Corporation,
6.625% 06/15/98................. 425,820
1,000,000 Sears Roebuck Acceptance
Corporation, MTN, 6.690%
04/30/01........................ 986,340
1,050,000 Time Warner, Inc., 7.450%
02/01/98........................ 1,055,523
------------
4,728,335
------------
MEDICAL SERVICES -- 0.5%
1,000,000 Columbia/HCA Healthcare
Corporation, MTN, 8.700%
02/10/10........................ 1,090,570
------------
TOTAL CORPORATE BONDS AND NOTES
(Cost $26,588,960).............. 26,200,903
============
<CAPTION>
FOREIGN BOND -- 0.5%
(Cost $1,077,427)
<C> <S> <C>
1,000,000 Hydro-Quebec, 9.000% 03/07/01..... 1,056,490
============
<CAPTION>
GOVERNMENT AGENCY -- 0.3%
(Cost $600,431)
<C> <S> <C>
600,000 Tennessee Valley Authority, 5.980%
04/01/36........................ 600,216
============
<CAPTION>
MORTGAGE-BACKED SECURITIES -- 14.2%
<C> <S> <C>
FEDERAL HOME LOAN MORTGAGE
CORPORATION (FHLMC)
CERTIFICATES -- 1.0%
2,293,793 GOLD, 6.500% 08/01/10............. 2,223,236
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA) CERTIFICATES -- 8.1%
1,950,000 7.180% 10/01/03................... 1,926,542
869,124 7.000% 06/01/11 (1 Pool).......... 855,453
958,858 9.000% 08/01/24 (1 Pool).......... 1,005,900
1,582,159 7.500% 09/01/25 (1 Pool).......... 1,553,965
1,377,038 8.000% 09/15/25 (1 Pool).......... 1,392,089
5,553,539 6.500% 04/01/26 (2 Pools)......... 5,169,956
2,395,069 7.000% 04/01/26 (1 Pool).......... 2,294,021
3,175,396 8.500% 06/01/26 -- 07/01/26
(2 Pools) ..................... 3,250,812
------------
17,448,738
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(GNMA)
CERTIFICATES -- 5.1%
2,359,073 8.000% 06/15/22 -- 10/15/24
(2 Pools) ...................... 2,379,294
923,431 9.500% 02/15/25 (1 Pool).......... 992,106
2,093,507 8.500% 08/15/24 -- 02/15/26
(2 Pools) ...................... 2,148,844
4,218,949 9.000% 01/15/27 (1 Pool).......... 4,414,076
1,110,999 7.500% 02/15/27 (1 Pool).......... 1,088,424
------------
11,022,744
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $30,962,933).............. 30,694,718
============
<CAPTION>
U.S. TREASURY SECURITIES -- 6.7%
<C> <S> <C>
U.S. TREASURY BONDS -- 4.2%
$ 1,720,000 8.125% 08/15/19................... $ 1,886,827
8,090,000 6.250% 08/15/23................... 7,168,468
------------
9,055,295
------------
U.S. TREASURY NOTES -- 2.5%
900,000 5.625% 06/30/97................... 900,144
4,585,000 7.000% 07/15/06................... 4,596,462
------------
5,496,606
------------
TOTAL U.S. TREASURY
SECURITIES
(Cost $14,996,774).............. 14,551,901
============
TOTAL SECURITIES
(Cost $208,670,842)............. 204,798,412
============
<CAPTION>
REPURCHASE AGREEMENT -- 13.5%
(Cost $29,050,000)
<C> <S> <C>
29,050,000 Agreement with Smith Barney,
6.300% dated 03/31/97, to be
repurchased at $29,055,084 on
04/01/97, collateralized by:
$29,050,074 U.S. Government
Agency Securities,
5.125% -- 8.740% due
03/04/98 -- 12/15/43............ 29,050,000
============
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $237,720,842*)................. 108.4% 233,848,412
OTHER ASSETS AND
LIABILITIES (NET).................... (8.4) (18,051,554)
----- ------------
NET ASSETS............................. 100.0% $215,796,858
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes is $238,326,207.
+ Non-income producing security.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration to qualified institutional buyers.
ABBREVIATIONS:
<TABLE>
<S> <C>
ADR American Depositary Receipt
GOLD Payments are on an accelerated 45-day payment cycle
instead of 75-day cycle
MTN Medium Term Note
TBA To Be Announced
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
40
<PAGE> 43
NATIONS FUNDS
Nations Equity Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 80.7%
<S> <C> <C>
AEROSPACE AND DEFENSE -- 1.3%
106,300 Raytheon Company................. $ 4,796,787
-----------
APPAREL AND TEXTILES -- 0.2%
11,700 V.F. Corporation................. 782,438
-----------
AUTOMOBILE PARTS MANUFACTURERS -- 3.1%
290,700 Cooper Tire & Rubber Company..... 5,377,950
128,900 Genuine Parts Company............ 6,009,962
-----------
11,387,912
-----------
BANKS -- 2.7%
30,500 Chase Manhattan Corporation...... 2,855,562
56,600 CoreStates Financial
Corporation.................... 2,688,500
79,200 Fleet Financial Group Inc. ...... 4,534,200
-----------
10,078,262
-----------
BEVERAGES -- 1.4%
162,300 PepsiCo Inc. .................... 5,295,038
-----------
CHEMICALS -- BASIC -- 3.7%
125,300 Imperial Chemical Industries Plc
ADR............................ 5,701,150
94,800 Lubrizol Corporation............. 3,081,000
271,100 Wellman, Inc. ................... 4,744,250
-----------
13,526,400
-----------
CHEMICALS -- SPECIALTY -- 1.7%
46,500 Engelhard Corporation............ 976,500
315,700 RPM, Inc. ....................... 5,248,512
-----------
6,225,012
-----------
COAL, GAS AND PIPELINE -- 0.7%
57,800 PanEnergy Corporation............ 2,492,625
-----------
COMPUTER RELATED -- 1.8%
60,400 Hewlett-Packard Company.......... 3,216,300
25,500 International Business Machines
Corporation.................... 3,503,062
-----------
6,719,362
-----------
COMPUTER SERVICES -- 1.5%
144,200 Computer Associates
International, Inc. ........... 5,605,775
-----------
CONTAINERS -- 0.6%
44,900 Crown Cork & Seal Inc. .......... 2,317,962
-----------
DIVERSIFIED -- 3.7%
93,000 Cooper Industries Inc. .......... 4,033,875
91,000 Fluor Corporation................ 4,777,500
77,400 National Service Industries...... 3,028,275
34,900 PPG Industries, Inc. ............ 1,884,600
-----------
13,724,250
-----------
DRUGS -- 0.9%
93,600 Pharmacia & Upjohn Inc. ......... 3,428,100
-----------
ELECTRIC POWER -- 6.7%
64,800 American Electric Power.......... 2,673,000
101,400 Baltimore Gas & Electric
Company........................ 2,712,450
65,400 CINergy Corporation.............. 2,231,775
82,200 Duke Power Company............... 3,627,075
105,300 New York State Electric &
Gas Company.................... 2,277,113
160,600 PacifiCorp....................... 3,432,825
179,300 PECO Energy Company.............. 3,653,237
187,100 Southern Company................. 3,952,487
-----------
24,559,962
-----------
ELECTRONICS -- 2.3%
126,800 AMP Inc. ........................ 4,358,750
13,206 Avnet, Inc. ..................... 744,488
41,500 Harris Corporation............... 3,190,312
-----------
8,293,550
-----------
FOOD PRODUCERS -- 3.0%
80,300 Chiquita Brands International
Inc. .......................... 1,254,687
43,000 CPC International Inc. .......... 3,526,000
24,600 General Mills Inc. .............. 1,528,275
198,800 McCormick & Company.............. 4,870,600
-----------
11,179,562
-----------
FOOD RETAILERS -- 1.6%
199,800 Supervalu Inc. .................. 5,944,050
-----------
INSURANCE -- 2.7%
34,700 General Re Corporation........... 5,482,600
30,300 Lincoln National Corporation
Ltd. .......................... 1,621,050
40,500 St. Paul Companies Inc. ......... 2,627,438
-----------
9,731,088
-----------
MACHINERY AND EQUIPMENT -- 7.9%
107,300 Briggs & Stratton Corporation.... 4,815,088
56,300 Dover Corporation................ 2,955,750
146,200 Foster Wheeler Corporation....... 5,171,825
93,311 General Signal Corporation....... 3,650,793
239,000 Keystone International, Inc. .... 4,242,250
156,700 Pall Corporation................. 3,623,688
146,400 Trinity Industries, Inc. ........ 4,446,900
-----------
28,906,294
-----------
MEDICAL PRODUCTS AND SUPPLIES -- 3.3%
49,300 Baxter International Inc. ....... 2,126,063
93,800 Becton, Dickinson & Company...... 4,221,000
139,500 Mallinckrodt Inc. ............... 5,736,938
-----------
12,084,001
-----------
METALS AND MINING -- 1.1%
163,600 Cyprus Amax Minerals Company..... 3,885,500
-----------
OFFICE EQUIPMENT -- 0.4%
25,200 Pitney Bowes Inc. ............... 1,480,500
-----------
OIL -- DOMESTIC -- 4.5%
37,800 Ashland Oil, Inc. ............... 1,521,450
32,500 Atlantic Richfield Company....... 4,310,313
201,300 Occidental Petroleum
Corporation.................... 4,957,013
212,575 Sun Company, Inc. ............... 5,553,522
-----------
16,342,298
-----------
OIL -- INTERNATIONAL -- 1.7%
23,980 Exxon Corporation................ 2,583,845
28,500 Mobil Corporation................ 3,722,813
-----------
6,306,658
-----------
OIL SERVICES -- 1.3%
156,700 Dresser Industries, Inc. ........ 4,740,175
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
41
<PAGE> 44
NATIONS FUNDS
Nations Equity Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
PAPER AND FOREST PRODUCTS -- 4.5%
73,880 Potlatch Corporation............. $ 3,038,315
217,600 Sonoco Products Company.......... 5,875,200
70,000 Union Camp Corporation........... 3,298,750
67,900 Westvaco Corporation............. 1,705,988
62,600 Weyerhaeuser Company............. 2,793,525
------------
16,711,778
------------
PRINTING AND PUBLISHING -- 0.5%
56,600 Donnelley (R.R.) & Sons
Company........................ 1,973,925
------------
RETAIL -- GENERAL -- 3.3%
138,200 Dillard Department Stores, Inc.,
Class A........................ 4,353,300
85,000 May Department Stores Company.... 3,867,500
84,700 Penney (J.C.) Company, Inc. ..... 4,033,837
------------
12,254,637
------------
SERVICES -- 0.5%
92,900 Ogden Corporation................ 1,962,512
------------
STEEL -- 1.5%
120,600 Nucor Corporation................ 5,517,450
------------
TRANSPORTATION -- AIRLINES -- 0.5%
82,900 ASA Holdings, Inc. .............. 1,720,175
------------
TRANSPORTATION -- RAILROADS -- 1.7%
25,700 Burlington Northern Santa Fe..... 1,901,800
93,600 CSX Corporation.................. 4,352,400
------------
6,254,200
------------
UTILITIES -- NATURAL GAS -- 3.0%
110,400 Brooklyn Union Gas Company....... 3,118,800
88,900 Consolidated Natural Gas
Company........................ 4,478,337
112,300 Equitable Resources Inc. ........ 3,439,188
------------
11,036,325
------------
UTILITIES -- TELEPHONE -- 5.4%
52,700 Ameritech Corporation............ 3,241,050
35,300 Bell Atlantic Corporation........ 2,148,888
26,600 BellSouth Corporation............ 1,123,850
257,500 Frontier Corporation............. 4,602,812
41,300 GTE Corporation.................. 1,925,612
50,800 NYNEX Corporation................ 2,317,750
63,300 SBC Communications Inc. ......... 3,331,162
38,200 U.S. West Inc. .................. 1,298,800
------------
19,989,924
------------
TOTAL COMMON STOCKS
(Cost $280,952,175).......... 297,254,487
============
CONVERTIBLE PREFERRED STOCKS -- 2.7%
BANKS -- 1.2%
176,000 National Australia Bank, Conv.,
7.8750%........................ 4,400,000
------------
FOOD PRODUCERS -- 1.5%
90,700 Chiquita Brands International
Inc., Series B, Conv.,
$3.750......................... 5,487,350
------------
TOTAL CONVERTIBLE PREFERRED
STOCKS
(Cost $8,935,000).............. 9,887,350
============
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
CONVERTIBLE BONDS AND NOTES -- 5.7%
<C> <S> <C>
HEALTH CARE -- 0.7%
$ 3,100,000 Ivax Corporation, Conv. Note,
6.500% 11/15/11................ 2,573,000
------------
INSURANCE -- 1.1%
4,200,000 NAC Re Corporation,
Conv. Sub. Note,
5.250% 12/15/02................ 4,053,000
------------
RETAIL -- GENERAL -- 0.3%
1,341,000 Costco Wholesale Corporation,
Conv. Note,
5.750% 05/15/02................ 1,330,943
------------
RETAIL -- SPECIALTY -- 0.5%
1,800,000 Home Depot Inc., Conv. Sub. Note,
3.250% 10/01/01................ 1,800,000
------------
SEMICONDUCTORS -- 0.8%
3,000,000 Adaptec, Inc., Conv. Sub. Note,
4.750% 02/01/04++.............. 2,939,400
------------
OTHER -- 2.3%
2,300,000 Integrated Health Services,
Conv. Sub. Deb.,
5.750% 01/01/01................ 2,392,000
Unisys Corporation, Conv. Sub.
Note:
2,000,000 8.250% 08/01/00.................. 1,930,000
3,500,000 8.250% 03/15/06.................. 4,112,500
------------
8,434,500
------------
TOTAL CONVERTIBLE BONDS AND NOTES
(Cost $20,262,510)............. 21,130,843
============
<CAPTION>
U.S. TREASURY SECURITIES -- 7.8%
<C> <S> <C>
U.S. TREASURY BONDS -- 7.8%
21,550,000 5.625% 02/15/06.................. 19,684,632
4,800,000 6.500% 10/15/06.................. 4,650,768
4,500,000 6.625% 02/15/27.................. 4,234,231
------------
TOTAL U.S. TREASURY SECURITIES
(Cost $28,919,910)............. 28,569,631
============
TOTAL SECURITIES
(Cost $339,069,595)............ 356,842,311
============
<CAPTION>
REPURCHASE AGREEMENT -- 3.6%
(Cost $13,108,000)
<C> <S> <C>
13,108,000 Agreement with Smith Barney,
6.300% dated 03/31/97, to be
repurchased at $13,110,294 on
04/01/97, collateralized by:
$13,108,033 U.S. Government
Agency Securities,
5.125% -- 8.740% due
03/04/98 -- 12/15/43........... 13,108,000
============
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $352,177,595*)................... 100.5% 369,950,311
OTHER ASSETS AND
LIABILITIES (NET)...................... (0.5) (1,740,795)
----- ------------
NET ASSETS............................... 100.0% $368,209,516
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes is $352,811,599.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration
to qualified institutional buyers.
ABBREVIATION:
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
42
<PAGE> 45
NATIONS FUNDS
Nations Value Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 95.3%
<C> <S> <C>
AEROSPACE AND DEFENSE -- 2.7%
375,350 Lockheed Martin Corporation........ $ 31,529,400
151,300 Raytheon Company................... 6,827,413
--------------
38,356,813
--------------
APPAREL AND TEXTILES -- 0.2%
51,350 Liz Claiborne Inc. ................ 2,240,144
--------------
AUTOMOBILE AND TRUCK
MANUFACTURERS -- 2.8%
825,200 Ford Motor Company................. 25,890,650
584,500 ITT Industries Inc. ............... 13,078,188
--------------
38,968,838
--------------
AUTOMOBILE PARTS MANUFACTURERS -- 1.9%
306,800 Echlin Inc. ....................... 10,431,200
317,000 Goodyear Tire & Rubber Company..... 16,563,250
--------------
26,994,450
--------------
BANKS -- 6.9%
314,250 Banc One Corporation............... 12,491,437
238,450 BankBoston Corporation............. 15,976,150
399,200 Bank of New York Inc. ............. 14,670,600
286,400 Chase Manhattan Corporation........ 26,814,200
84,750 Citicorp........................... 9,174,187
251,000 Mellon Bank Corporation............ 18,260,250
--------------
97,386,824
--------------
BEVERAGES -- 1.2%
529,400 PepsiCo Inc. ...................... 17,271,675
--------------
CHEMICALS -- BASIC -- 3.4%
278,900 Hercules, Inc. .................... 11,783,525
209,800 IMC Global, Inc. .................. 7,579,025
339,000 Mallinckrodt Inc. ................. 13,941,375
291,700 Nalco Chemical Company............. 10,902,288
54,450 Rohm & Haas Company................ 4,076,944
--------------
48,283,157
--------------
CHEMICALS -- SPECIALTY -- 1.3%
35,357 Millennium Chemicals Inc. ......... 662,944
412,000 Morton International Inc........... 17,407,000
--------------
18,069,944
--------------
COAL, GAS AND PIPELINE -- 1.8%
532,400 Coastal Corporation................ 25,555,200
--------------
COMPUTER RELATED -- 3.9%
429,650 Compaq Computer Corporation+....... 32,921,931
761,650 Sun Microsystems Inc.+............. 21,992,644
--------------
54,914,575
--------------
CONSTRUCTION -- 1.1%
290,200 Fluor Corporation.................. 15,235,500
--------------
CONTAINERS -- 2.2%
400,000 Crown Cork & Seal Inc. ............ 20,650,000
314,900 Tupperware Corporation............. 10,549,150
--------------
31,199,150
--------------
DIVERSIFIED -- 2.3%
316,800 AlliedSignal Inc. ................. 22,572,000
150,000 Tenneco Inc. ...................... 5,850,000
207,621 Viad Corporation................... 3,321,936
--------------
31,743,936
--------------
DRUGS -- 4.4%
544,050 Bristol-Myers Squibb Company....... 32,098,950
398,000 Schering-Plough Corporation........ 28,954,500
--------------
61,053,450
--------------
ELECTRIC POWER -- 4.5%
370,000 Baltimore Gas & Electric Company... 9,897,500
555,061 CINergy Corporation................ 18,941,457
555,000 DPL Inc. .......................... 13,389,375
205,000 GPU, Inc. ......................... 6,585,625
667,000 New York State Electric & Gas
Company.......................... 14,423,875
--------------
63,237,832
--------------
ELECTRICAL EQUIPMENT -- 1.2%
164,100 General Electric Company........... 16,286,925
--------------
ELECTRONICS -- 2.4%
442,700 Harris Corporation................. 34,032,562
--------------
FINANCIAL SERVICES -- 0.5%
252,000 Paine Webber Group, Inc. .......... 7,119,000
--------------
FOOD PRODUCERS -- 1.9%
328,000 Nabisco Holdings Corporation,
Class A.......................... 13,366,000
376,400 Quaker Oats Company................ 13,738,600
--------------
27,104,600
--------------
FOOD RETAILERS -- 0.4%
115,438 Safeway Inc.+...................... 5,353,437
--------------
HOUSEHOLD PRODUCTS -- 0.6%
346,850 First Brands Corporation........... 8,497,825
--------------
INDUSTRIAL CONGLOMERATES -- 0.5%
350,000 Premark International Inc. ........ 6,956,250
--------------
INSURANCE -- 7.8%
217,900 CIGNA Corporation.................. 31,840,637
205,900 General Re Corporation............. 32,532,200
352,200 ITT Hartford Group Inc. ........... 25,402,425
374,700 Lincoln National Corporation
Ltd. ............................ 20,046,450
--------------
109,821,712
--------------
MEDICAL PRODUCTS AND SUPPLIES -- 1.5%
122,000 Baxter International Inc. ......... 5,261,250
358,200 Becton, Dickinson & Company........ 16,119,000
--------------
21,380,250
--------------
MEDICAL SERVICES -- 3.7%
1,000,300 Beverly Enterprises+............... 14,254,275
644,000 Humana Inc.+....................... 14,168,000
965,400 Tenet Healthcare Corporation+...... 23,772,975
--------------
52,195,250
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
43
<PAGE> 46
NATIONS FUNDS
Nations Value Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
METALS AND MINING -- 1.8%
456,600 ASARCO Inc. ....................... $ 12,841,875
204,400 Reynolds Metals Company............ 12,672,800
--------------
25,514,675
--------------
OFFICE EQUIPMENT -- 2.3%
554,400 Xerox Corporation.................. 31,531,500
--------------
OIL -- DOMESTIC -- 2.1%
86,100 Amoco Corporation.................. 7,458,412
526,400 Phillips Petroleum Company......... 21,516,600
--------------
28,975,012
--------------
OIL -- INTERNATIONAL -- 5.4%
154,000 British Petroleum Company Plc,
ADR.............................. 21,136,500
209,800 Exxon Corporation.................. 22,605,950
240,600 Mobil Corporation.................. 31,428,375
--------------
75,170,825
--------------
OIL SERVICES -- 1.1%
418,350 Valero Energy Corporation.......... 15,217,481
--------------
PAPER AND FOREST PRODUCTS -- 0.3%
88,500 Mead Corporation................... 4,690,500
--------------
PRINTING AND PUBLISHING -- 0.5%
147,650 Dun & Bradstreet Corporation....... 3,746,619
131,300 World Color Press, Inc.+........... 2,675,238
--------------
6,421,857
--------------
RECREATION -- 0.6%
328,125 Mattel, Inc. ...................... 7,875,000
--------------
RETAIL -- GENERAL -- 1.9%
421,700 Federated Department Stores
Inc.+............................ 13,863,388
292,000 May Department Stores Company...... 13,286,000
--------------
27,149,388
--------------
SEMICONDUCTORS -- 3.3%
284,850 Intel Corporation.................. 39,629,756
268,550 National Semiconductor
Corporation+..................... 7,385,125
--------------
47,014,881
--------------
TOBACCO -- 2.3%
212,150 Philip Morris Companies Inc. ...... 24,211,619
281,900 UST, Inc. ......................... 7,857,963
--------------
32,069,582
--------------
TRANSPORTATION -- AIRLINES -- 1.6%
257,700 Delta Air Lines, Inc. ............. 21,679,013
--------------
TRANSPORTATION -- RAILROADS -- 1.0%
194,000 Burlington Northern Santa Fe
Inc. ............................ 14,356,000
--------------
UTILITIES -- NATURAL GAS -- 2.9%
223,800 Columbia Gas System, Inc. ......... 12,952,425
174,750 Consolidated Natural Gas Company... 8,803,031
436,500 Williams Companies Inc. ........... 19,424,250
--------------
41,179,706
--------------
UTILITIES -- TELEPHONE -- 5.1%
629,250 BellSouth Corporation.............. 26,585,812
514,500 GTE Corporation.................... 23,988,562
411,700 SBC Communications Inc. ........... 21,665,712
--------------
72,240,086
--------------
OTHER -- 2.0%
432,100 Rockwell International
Corporation...................... 28,032,487
--------------
TOTAL COMMON STOCKS
(Cost $1,056,772,979)............ 1,338,377,292
==============
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ----------
REPURCHASE AGREEMENT -- 3.9%
(Cost $55,416,000)
<C> <S> <C>
$55,416,000 Agreement with Smith Barney,
6.300% dated 03/31/97, to be
repurchased at $55,425,698 on
04/01/97, collateralized by:
$55,416,141 U.S. Government
Agency Securities,
5.125% -- 8.740% due
03/04/98 -- 12/15/43........... 55,416,000
============
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $1,112,188,979*).............. 99.2% 1,393,793,292
OTHER ASSETS AND
LIABILITIES (NET)................... 0.8 11,469,163
----- --------------
NET ASSETS............................ 100.0% $1,405,262,455
===== ==============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes is $1,112,234,973.
+ Non-income producing security.
ABBREVIATION:
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
44
<PAGE> 47
NATIONS FUNDS
Nations Managed Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 95.4%
<C> <S> <C>
AEROSPACE AND DEFENSE -- 1.9%
2,700 Boeing Company....................... $ 266,288
900 EG&G Inc. ........................... 18,787
500 General Dynamics Corporation......... 33,688
1,500 Lockheed Martin Corporation.......... 126,000
1,600 McDonnell Douglas Corporation........ 97,600
500 Northrop Grumman Corporation......... 37,812
1,300 Raytheon Company..................... 58,663
1,300 TRW Inc. ............................ 67,275
1,800 United Technologies Corporation...... 135,450
----------
841,563
----------
APPAREL AND TEXTILES -- 0.8%
1,800 Fruit of the Loom Inc., Class A+..... 74,700
900 Liz Claiborne Inc. .................. 39,263
2,200 Nike Inc., Class B................... 136,400
1,800 Russell Corporation.................. 64,350
600 Springs Industries Inc. ............. 26,850
600 V.F. Corporation..................... 40,125
----------
381,688
----------
AUTOMOBILE AND TRUCK MANUFACTURERS -- 2.1%
7,300 Chrysler Corporation................. 219,000
10,300 Ford Motor Company................... 323,162
6,100 General Motors Corporation........... 337,788
900 ITT Industries....................... 20,137
600 PACCAR, Inc. ........................ 40,050
----------
940,137
----------
AUTOMOBILE PARTS
MANUFACTURERS -- 0.5%
1,100 Dana Corporation..................... 36,163
600 Eaton Corporation.................... 42,525
400 Echlin Inc. ......................... 13,600
1,600 Goodyear Tire & Rubber Company....... 83,600
1,300 Navistar International Corporation... 12,187
500 Snap-On Inc. ........................ 19,375
----------
207,450
----------
BANKS -- 7.5%
3,300 Banc One Corporation................. 131,175
3,200 BankAmerica Corporation.............. 322,400
1,500 BankBoston Corporation............... 100,500
3,500 Bank of New York Inc. ............... 128,625
600 Bankers Trust N.Y. Corporation....... 49,200
2,000 Barnett Banks Inc. .................. 93,000
3,700 Chase Manhattan Corporation.......... 346,413
3,700 Citicorp............................. 400,525
1,200 Comerica Inc. ....................... 67,650
900 CoreStates Financial Corporation..... 42,750
600 Fifth Third Bancorp.................. 46,500
1,200 First Bank System, Inc. ............. 87,600
3,200 First Chicago Corporation NBD........ 173,200
2,800 First Union Corporation.............. 227,150
1,500 Fleet Financial Group Inc............ 85,875
1,800 KeyCorp (New)........................ 87,750
1,300 Mellon Bank Corporation.............. 94,575
1,400 Morgan (J.P.) & Company Inc. ........ 137,550
1,600 National City Corporation............ 74,600
3,200 Norwest Corporation.................. 148,000
3,200 PNC Bank Corporation................. 128,000
900 Republic New York Corporation........ 79,312
1,500 SunTrust Banks Inc. ................. 69,562
1,200 U.S. Bancorp......................... 64,200
1,300 Wachovia Corporation................. 70,850
500 Wells Fargo & Company................ 142,062
----------
3,399,024
----------
BEVERAGES -- 3.2%
2,200 Anheuser-Busch Companies, Inc. ...... 92,675
17,500 Coca-Cola Company.................... 977,812
600 Coors (Adolph) Company, Class B...... 12,750
9,800 PepsiCo Inc. ........................ 319,725
1,600 Seagram Company, Ltd. ............... 61,200
----------
1,464,162
----------
BIO SPECIALTY PHARMACEUTICALS -- 0.2%
1,900 Amgen Inc.+.......................... 106,162
----------
CHEMICALS -- BASIC -- 2.3%
900 Air Products & Chemicals Inc......... 61,087
1,900 Dow Chemical Company................. 152,000
4,300 du Pont (E.I.) de Nemours &
Company............................ 455,800
600 Eastman Chemical Company............. 32,250
400 Ecolab Inc. ......................... 15,200
400 FMC Corporation+..................... 24,500
500 Goodrich (B.F.) Company.............. 18,312
600 Mallinckrodt Inc. ................... 24,675
400 Nalco Chemical Company............... 14,950
1,600 PPG Industries, Inc. ................ 86,400
1,300 Praxair Inc. ........................ 58,338
700 Rohm & Haas Company.................. 52,413
1,300 Union Carbide Corporation............ 57,525
----------
1,053,450
----------
CHEMICALS -- SPECIALTY -- 0.2%
900 Avery Dennison Corporation........... 34,650
1,300 Morton International Inc.,
Industries......................... 54,925
----------
89,575
----------
COAL, GAS AND PIPELINE -- 0.4%
1,600 Coastal Corporation.................. 76,800
600 Eastern Enterprises.................. 18,525
700 ENSERCH Corporation.................. 14,350
1,500 PanEnergy Corporation................ 64,688
1,600 Santa Fe Energy Resources............ 22,200
----------
196,563
----------
COMPUTER RELATED -- 4.6%
400 Ceridian Corporation+................ 14,350
4,900 Cisco Systems, Inc.+................. 235,812
2,700 Compaq Computer Corporation+......... 206,888
2,800 Data General Corporation+............ 47,600
2,100 Dell Computer Corporation+........... 142,013
1,500 Digital Equipment Corporation+....... 41,062
2,000 EMC Corporation+..................... 71,000
7,600 Hewlett-Packard Company.............. 404,700
1,200 Honeywell, Inc. ..................... 81,450
1,400 Intergraph Corporation+.............. 10,850
4,000 International Business Machines
Corporation........................ 549,500
2,200 Seagate Technology+.................. 98,725
3,300 Sun Microsystems Inc.+............... 95,287
3,200 Tandem Computers Inc.+............... 38,000
1,400 3Com Corporation+.................... 45,850
----------
2,083,087
----------
COMPUTER SERVICES -- 0.4%
1,100 Automatic Data Processing Inc........ 46,063
2,900 Computer Associates International
Inc. .............................. 112,737
500 Computer Sciences Corporation+....... 30,875
----------
189,675
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
45
<PAGE> 48
NATIONS FUNDS
Nations Managed Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
COMPUTER SOFTWARE -- 2.0%
8,800 Microsoft Corporation+............... $ 806,850
1,900 Novell Inc.+......................... 18,050
2,600 Oracle Systems Corporation+.......... 100,262
-----------
925,162
-----------
CONSTRUCTION -- 0.6%
1,500 Case Corporation..................... 76,125
1,500 Centex Corporation................... 52,875
1,400 Crane Company........................ 43,925
500 Fluor Corporation.................... 26,250
900 Masco Corporation.................... 32,175
400 Owens-Corning Fiberglass
Corporation........................ 16,100
1,000 Sherwin-Williams Company............. 27,000
-----------
274,450
-----------
CONTAINERS -- 0.1%
600 Crown Cork & Seal Inc. .............. 30,975
COSMETICS AND TOILETRY -- 1.8%
3,400 Gillette Company..................... 246,925
4,800 Procter & Gamble Company............. 552,000
-----------
798,925
-----------
DIVERSIFIED -- 1.6%
2,100 AlliedSignal Inc. ................... 149,625
1,200 Cognizant Corporation................ 34,950
1,800 Corning Inc. ........................ 79,875
1,600 Loews Corporation.................... 142,200
2,200 Minnesota Mining & Manufacturing
Company............................ 185,900
900 Tenneco Inc. ........................ 35,100
600 Textron, Inc. ....................... 63,000
900 Whitman Corporation.................. 22,050
-----------
712,700
-----------
DRUGS -- 5.3%
3,700 American Home Products Corporation... 222,000
7,500 Bristol-Myers Squibb Company......... 442,500
3,400 Lilly (Eli) & Company................ 279,650
9,000 Merck & Company Inc. ................ 758,250
3,700 Pfizer, Inc. ........................ 311,263
2,100 Pharmacia & Upjohn Inc. ............. 76,912
2,200 Schering-Plough Corporation.......... 160,050
1,600 Warner-Lambert Company............... 138,400
-----------
2,389,025
-----------
ELECTRIC POWER -- 3.3%
1,600 American Electric Power Inc. ........ 66,000
1,600 Baltimore Gas & Electric Company..... 42,800
1,400 Carolina Power & Light Company....... 50,750
1,600 Central & South West Corporation..... 34,200
1,200 CINergy Corporation.................. 40,950
2,300 Consolidated Edison Company New York
Inc. .............................. 69,000
1,400 Dominion Resources Inc. ............. 50,925
1,900 DTE Energy Company................... 51,062
1,900 Duke Power Company................... 83,838
4,700 Edison International................. 105,162
3,400 Entergy Corporation, New............. 83,300
1,600 FPL Group Inc. ...................... 70,600
1,500 GPU, Inc. ........................... 48,187
3,000 Houston Industries Inc. ............. 62,625
3,200 Niagara Mohawk Power Corporation+.... 27,200
1,500 Northern States Power Corporation.... 71,062
1,600 Ohio Edison Company.................. 33,800
2,200 PacifiCorp........................... 47,025
1,900 PECO Energy Company.................. 38,713
3,700 PG&E Corporation..................... 86,950
1,500 PP&L Resources Inc. ................. 30,375
2,700 Public Service Enterprise Group...... 70,875
5,100 Southern Company..................... 107,738
2,100 Texas Utilities Company.............. 71,925
2,000 Unicom Corporation................... 39,000
900 Union Electric Company............... 33,188
-----------
1,517,250
-----------
ELECTRICAL EQUIPMENT -- 2.9%
1,600 Emerson Electric Company............. 72,000
12,000 General Electric Company............. 1,191,000
500 Raychem Corporation.................. 41,188
400 Thomas & Betts Corporation........... 17,100
-----------
1,321,288
-----------
ELECTRONICS -- 1.0%
1,800 Applied Materials Inc.+.............. 83,475
600 Harris Corporation................... 46,125
4,400 Motorola, Inc. ...................... 265,650
1,200 National Semiconductor Corporation+.. 33,000
700 Tektronix Inc. ...................... 35,350
-----------
463,600
-----------
ENVIRONMENTAL -- 0.8%
1,900 Browning-Ferris Industries Inc. ..... 54,863
700 Johnson Controls Inc. ............... 56,350
1,800 Laidlaw Inc., Class B................ 24,750
500 Safety-Kleen Corporation............. 7,375
1,400 Tyco International Ltd. ............. 77,000
4,300 WMX Technologies Inc. ............... 131,688
-----------
352,026
-----------
EXPLORATION AND DRILLING -- 0.3%
2,000 Burlington Resources Inc. ........... 85,500
1,300 Helmerich & Payne, Inc. ............. 60,125
-----------
145,625
-----------
FINANCIAL SERVICES -- 3.9%
3,600 American Express Company............. 215,550
1,600 American General Corporation......... 65,200
500 Beneficial Corporation............... 32,313
3,300 Dean Witter, Discover & Company...... 115,088
5,300 Federal Home Loan Mortgage
Corporation........................ 144,425
8,200 Federal National Mortgage
Association........................ 296,225
1,300 Green Tree Financial Corporation..... 43,875
700 Household International Inc. ........ 60,112
500 Marsh & McLennan Companies Inc. ..... 56,625
2,600 MBNA Corporation..................... 72,475
1,800 Merrill Lynch & Company Inc. ........ 154,575
1,900 Morgan Stanley Group, Inc. .......... 111,625
1,600 Salomon Inc. ........................ 79,800
600 Transamerica Corporation............. 53,700
5,600 Travelers Group Inc. ................ 268,100
-----------
1,769,688
-----------
FOOD PRODUCERS -- 2.2%
4,800 Archer-Daniels-Midland Company....... 85,800
3,700 Campbell Soup Company................ 171,588
1,900 ConAgra Inc. ........................ 103,075
1,200 CPC International Inc. .............. 98,400
1,200 General Mills Inc. .................. 74,550
500 Hershey Foods Corporation............ 25,000
400 Pioneer Hi-Bred International........ 25,150
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
46
<PAGE> 49
NATIONS FUNDS
Nations Managed Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
FOOD PRODUCERS -- (CONTINUED)
700 Ralston-Purina Group................. $ 54,688
2,900 Sara Lee Corporation................. 117,450
1,200 Unilever N.V., ADR................... 223,500
-----------
979,201
-----------
FOOD RETAILERS -- 0.6%
1,600 American Stores Company.............. 71,200
2,800 Fleming Companies, Inc. ............. 49,000
500 Giant Food Inc., Class A............. 16,000
1,400 Great Atlantic & Pacific Tea Inc. ... 35,525
1,200 Kroger Company+...................... 60,900
2,000 Supervalu Inc. ...................... 59,500
-----------
292,125
-----------
FURNITURE AND APPLIANCES -- 0.3%
400 Armstrong World Industries Inc. ..... 25,900
700 Black & Decker Corporation........... 22,488
1,500 Maytag Corporation................... 30,938
1,100 Newell Company....................... 36,850
400 Whirlpool Corporation................ 19,050
-----------
135,226
-----------
INSURANCE -- 3.7%
800 Aetna Life & Casualty Company........ 68,700
3,400 Allstate Corporation................. 201,875
3,600 American International Group,
Inc. .............................. 422,550
1,600 Chubb Corporation.................... 86,200
900 CIGNA Corporation.................... 131,513
1,300 Conseco Inc. ........................ 46,312
700 General Re Corporation............... 110,600
1,300 ITT Hartford Group Inc. ............. 93,762
700 Jefferson-Pilot Corporation.......... 38,062
1,200 Lincoln National Corporation Ltd. ... 64,200
600 MBIA, Inc. .......................... 57,525
500 MGIC Investment Corporation.......... 35,375
1,500 Providian Corporation................ 80,250
900 SAFECO Corporation................... 36,000
700 St. Paul Companies Inc. ............. 45,413
1,200 Torchmark Corporation................ 66,450
500 UNUM Corporation..................... 36,500
1,900 USF&G Corporation.................... 40,850
700 USLIFE Corporation................... 32,725
-----------
1,694,862
-----------
MACHINERY AND EQUIPMENT -- 1.7%
1,900 Caterpillar Inc. .................... 152,475
1,200 Cooper Industries Inc. .............. 52,050
700 Cummins Engine Inc. ................. 35,875
2,600 Deere & Company...................... 113,100
900 Dover Corporation.................... 47,250
400 General Signal Corporation........... 15,650
600 Harnischfeger Industries Inc. ....... 27,900
1,100 Illinois Tool Works Inc. ............ 89,788
1,900 Ingersoll-Rand Company............... 82,888
600 Parker-Hannifin Corporation.......... 25,650
900 Thermo Electron Corporation+......... 27,788
1,300 Timken Company....................... 69,550
1,400 TRINOVA Corporation.................. 46,900
-----------
786,864
-----------
MEDICAL PRODUCTS AND SUPPLIES -- 2.1%
4,700 Abbott Laboratories.................. 263,787
1,800 Baxter International Inc. ........... 77,625
1,300 Becton, Dickinson & Company.......... 58,500
600 Guidant Corporation.................. 36,900
9,000 Johnson & Johnson.................... 475,875
900 United States Surgical Corporation... 27,450
-----------
940,137
-----------
MEDICAL SERVICES -- 0.8%
3,200 Beverly Enterprises+................. 45,600
5,100 Columbia/HCA Healthcare
Corporation........................ 171,488
2,300 HEALTHSOUTH Corporation+............. 43,987
2,600 Tenet Healthcare Corporation+........ 64,025
1,100 United Healthcare Corporation........ 52,388
-----------
377,488
-----------
METALS AND MINING -- 0.7%
1,900 Alcan Aluminum Ltd. ................. 64,362
1,300 Aluminum Company of America.......... 88,400
1,900 Cyprus Amax Minerals Company......... 45,125
1,300 Inco Ltd. ........................... 42,412
1,300 Phelps Dodge Corporation............. 95,062
-----------
335,361
-----------
OFFICE EQUIPMENT -- 0.5%
1,200 Moore Corporation Ltd. .............. 24,000
1,400 Pitney Bowes Inc. ................... 82,250
2,300 Xerox Corporation.................... 130,813
-----------
237,063
-----------
OIL -- DOMESTIC -- 3.1%
1,500 Amerada Hess Corporation............. 79,500
4,400 Amoco Corporation.................... 381,150
900 Ashland Oil, Inc. ................... 36,225
1,500 Atlantic Richfield Company........... 198,937
1,100 Kerr-McGee Corporation............... 68,063
700 Louisiana Land & Exploration
Company............................ 33,162
3,700 Occidental Petroleum Corporation..... 91,112
3,900 Oryx Energy Company+................. 75,075
1,200 Pennzoil Company..................... 62,100
3,400 Phillips Petroleum Company........... 138,975
500 Sun Company, Inc. ................... 13,062
2,900 Unocal Corporation................... 110,562
3,700 USX-Marathon Group................... 103,138
-----------
1,391,061
-----------
OIL -- INTERNATIONAL -- 6.3%
5,600 Chevron Corporation.................. 389,900
9,500 Exxon Corporation.................... 1,023,625
3,300 Mobil Corporation.................... 431,063
4,200 Royal Dutch Petroleum Company, ADR... 735,000
2,200 Texaco Inc. ......................... 240,900
2,100 Union Pacific Resources Group Inc. .. 56,175
-----------
2,876,663
-----------
OIL SERVICES -- 1.0%
1,600 Baker Hughes Inc. ................... 61,400
1,600 Dresser Industries, Inc. ............ 48,400
900 Halliburton Company.................. 60,975
1,400 Rowan Companies Inc.+................ 31,675
1,900 Schlumberger Ltd. ................... 203,775
500 Western Atlas, Inc.+................. 30,312
-----------
436,537
-----------
PAPER AND FOREST PRODUCTS -- 1.6%
500 Boise Cascade Corporation............ 15,250
900 Champion International Corporation... 40,950
700 Georgia-Pacific Corporation.......... 50,750
2,200 International Paper Company.......... 85,525
1,900 James River Corporation of
Virginia........................... 55,337
2,100 Kimberly-Clark Corporation........... 208,687
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
47
<PAGE> 50
NATIONS FUNDS
Nations Managed Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
PAPER AND FOREST PRODUCTS -- (CONTINUED)
500 Mead Corporation..................... $ 26,500
700 Potlatch Corporation................. 28,788
1,100 Stone Container Corporation.......... 12,238
500 Temple-Inland Inc. .................. 26,250
600 Union Camp Corporation............... 28,275
1,200 Westvaco Corporation................. 30,150
1,500 Weyerhaeuser Company................. 66,938
600 Willamette Industries Inc. .......... 37,500
-----------
713,138
-----------
PHOTO AND OPTICAL -- 0.4%
2,600 Eastman Kodak Company................ 197,275
-----------
PRINTING AND PUBLISHING -- 1.0%
1,800 American Greetings Corporation,
Class A............................ 57,488
500 Dow Jones & Company Inc. ............ 20,312
1,200 Dun & Bradstreet Corporation......... 30,450
1,200 Gannett Company, Inc. ............... 103,050
500 Harcourt General Inc. ............... 23,250
700 Knight-Ridder Inc. .................. 27,913
500 McGraw-Hill Companies, Inc. ......... 25,563
500 Meredith Corporation................. 11,563
1,300 New York Times Company, Class A...... 57,362
900 Times Mirror Company, Class A........ 49,162
900 Tribune Company...................... 36,450
-----------
442,563
-----------
PROFESSIONAL SERVICES -- 0.1%
500 Interpublic Group Companies Inc. .... 26,375
-----------
RECREATION -- 1.3%
1,200 Brunswick Corporation................ 32,250
5,100 Disney (Walt) Company................ 372,300
500 Fleetwood Enterprises, Inc. ......... 12,500
500 Harrah's Entertainment Inc.+......... 8,562
900 Hasbro Inc. ......................... 24,637
700 King World Productions Inc.+......... 25,550
1,400 Mattel, Inc. ........................ 33,600
2,700 Viacom Inc., Class B+................ 89,438
-----------
598,837
-----------
RESTAURANTS AND LODGING -- 1.0%
2,000 Darden Restaurants Inc. ............. 15,750
900 HFS Inc.+............................ 52,988
900 Hilton Hotels Corporation............ 21,825
1,200 ITT Corporation...................... 70,650
1,100 Marriot International Inc. .......... 54,725
4,800 McDonald's Corporation............... 226,800
1,200 Wendy's International Inc. .......... 24,750
-----------
467,488
-----------
RETAIL -- DISCOUNT -- 1.6%
5,100 Kmart Stores Corporation............. 61,838
1,300 Rite Aid Corporation................. 54,600
900 TJX Companies Inc. .................. 38,475
2,100 Toys R Us Inc.+...................... 58,800
15,400 Wal-Mart Stores Inc. ................ 429,275
2,900 Woolworth Corporation+............... 67,788
-----------
710,776
-----------
RETAIL -- GENERAL -- 1.4%
2,600 Costco Companies Inc.+............... 71,825
2,700 Dayton Hudson Corporation............ 112,725
1,200 Dillard Department Stores Inc.,
Class A ........................... 37,800
2,800 Federated Department Stores Inc.+.... 92,050
1,900 May Department Stores Company........ 86,450
500 Mercantile Stores Inc. .............. 23,187
1,500 Penney (J.C.) Company Inc. .......... 71,438
2,900 Sears, Roebuck & Company............. 145,725
-----------
641,200
-----------
RETAIL -- SPECIALTY -- 1.1%
1,800 CUC International, Inc.+............. 40,500
1,300 CVS Corporation...................... 59,962
2,600 Gap Inc. ............................ 87,100
3,600 Home Depot, Inc. .................... 192,600
1,600 Limited Inc. ........................ 29,400
1,400 Lowe's Companies, Inc. .............. 52,325
200 Nordstrom, Inc. ..................... 7,575
500 Tandy Corporation.................... 25,062
-----------
494,524
-----------
SAVINGS AND LOANS -- 0.5%
2,000 Ahmanson (H.F.) & Company............ 73,000
1,200 Golden West Financial Corporation.... 75,300
1,500 Great Western Financial
Corporation........................ 60,562
-----------
208,862
-----------
SEMICONDUCTORS -- 2.5%
1,200 Advanced Micro Devices Inc.+......... 49,800
6,400 Intel Corporation.................... 890,400
1,900 Micron Technology, Inc. ............. 76,950
1,400 Texas Instruments Inc. .............. 104,825
-----------
1,121,975
-----------
STEEL -- 0.2%
400 Inland Steel Industries, Inc. ....... 7,800
500 Nucor Corporation.................... 22,875
2,000 USX-U.S. Steel Group................. 53,250
-----------
83,925
-----------
TELECOMMUNICATIONS -- 1.0%
4,900 Lucent Technologies.................. 258,475
2,100 Northern Telecommunications, Ltd..... 137,288
1,600 Tellabs, Inc.+....................... 57,800
-----------
453,563
-----------
TOBACCO -- 1.8%
1,300 American Brands Inc. ................ 65,812
6,200 Philip Morris Companies Inc. ........ 707,575
1,300 UST Inc. ............................ 36,238
-----------
809,625
-----------
TRANSPORTATION -- AIRLINES -- 0.4%
1,300 AMR Corporation+..................... 107,250
700 Delta Air Lines, Inc. ............... 58,887
1,200 USAir Group Inc.+.................... 29,400
-----------
195,537
-----------
TRANSPORTATION -- RAILROADS -- 1.0%
1,400 Burlington Northern Santa Fe Inc. ... 103,600
700 Conrail Inc. ........................ 78,925
2,000 CSX Corporation...................... 93,000
900 Norfolk Southern Corporation......... 76,725
1,900 Union Pacific Corporation............ 107,825
-----------
460,075
-----------
TRUCKING AND SHIPPING -- 0.3%
1,400 Federal Express Corporation+......... 72,975
1,500 Ryder Systems Inc. .................. 43,875
-----------
116,850
-----------
UTILITIES -- NATURAL GAS -- 1.0%
1,200 Columbia Gas Systems Inc. ........... 69,450
1,200 Consolidated Natural Gas Company..... 60,450
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
48
<PAGE> 51
NATIONS FUNDS
Nations Managed Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
UTILITIES -- NATURAL GAS -- (CONTINUED)
1,100 NICOR Inc. .......................... $ 35,200
3,900 NorAm Energy Corporation............. 57,038
700 ONEOK Inc. .......................... 18,200
1,200 Pacific Enterprises.................. 36,300
1,500 People's Energy Corporation.......... 49,687
600 Sonat, Inc. ......................... 32,700
1,800 Williams Companies Inc. ............. 80,100
-----------
439,125
-----------
UTILITIES -- TELEPHONE -- 6.1%
1,600 ALLTEL Corporation................... 52,000
4,200 Ameritech Corporation................ 258,300
12,200 AT&T Corporation..................... 423,950
3,300 Bell Atlantic Corporation............ 200,887
8,200 BellSouth Corporation. .............. 346,450
7,400 GTE Corporation...................... 345,025
5,100 MCI Communications Corporation....... 181,687
3,900 NYNEX Corporation.................... 177,938
3,500 Pacific Telesis Group................ 132,125
4,600 SBC Communications Inc. ............. 242,075
3,300 Sprint Corporation................... 150,150
3,600 U.S. West Inc. ...................... 122,400
6,500 WorldCom Inc.+....................... 143,000
-----------
2,775,987
-----------
OTHER -- 0.4%
1,900 Allegheny Teledyne Inc. ............. 53,438
1,900 Rockwell International Corporation... 123,262
-----------
176,700
-----------
TOTAL COMMON STOCKS
(Cost $40,389,590)................. 43,270,238
===========
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------------------------------------------------------------
U.S. TREASURY BILL -- 0.2%
(Cost $99,257)
<C> <S> <C>
$ 100,000 4.980%** 05/22/1997................ $ 99,257
===========
TOTAL SECURITIES (Cost
$40,488,847)..................... 43,369,495
===========
<CAPTION>
REPURCHASE AGREEMENT -- 4.3% (Cost $1,923,000)
<C> <S> <C>
1,923,000 Agreement with Smith Barney, 6.300%
dated 03/31/97, to be repurchased
at $1,923,337 on 04/01/97,
collateralized by: $1,923,005
U.S. Government Agency
Securities, 5.125% -- 8.740% due
03/04/98 -- 12/15/43............. 1,923,000
============
TOTAL INVESTMENTS
(Cost $42,411,847*)................... 99.9% 45,292,495
OTHER ASSETS AND
LIABILITIES (NET)..................... 0.1 55,085
----- ------------
NET ASSETS.............................. 100.0% $ 45,347,580
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes is $42,418,345.
** Rate represents annualized yield at date of purchase.
+ Non-income producing security.
ABBREVIATION:
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
49
<PAGE> 52
NATIONS FUNDS
Nations Equity Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 100.8%
<C> <S> <C>
AEROSPACE AND DEFENSE -- 1.9%
35,123 Boeing Company.................... $ 3,464,006
4,500 EG&G Inc.......................... 93,937
6,200 General Dynamics Corporation...... 417,725
19,800 Lockheed Martin Corporation....... 1,663,200
21,700 McDonnell Douglas Corporation..... 1,323,700
5,600 Northrop Grumman Corporation...... 423,500
24,500 Raytheon Company.................. 1,105,563
13,100 TRW Inc........................... 677,925
24,600 United Technologies Corporation... 1,851,150
------------
11,020,706
------------
APPAREL AND TEXTILES -- 0.6%
7,800 Fruit of the Loom Inc.., Class
A+.............................. 323,700
8,100 Liz Claiborne Inc................. 353,363
5,000 National Service Industries
Inc. ........................... 195,625
28,900 Nike Inc., Class B................ 1,791,800
6,700 Reebok International, Ltd. ....... 300,663
3,700 Russell Corporation............... 132,275
1,600 Springs Industries Inc. .......... 71,600
4,700 Stride Rite Corporation........... 70,500
6,400 V.F. Corporation.................. 428,000
------------
3,667,526
------------
AUTOMOBILE AND TRUCK
MANUFACTURERS -- 1.9%
74,000 Chrysler Corporation.............. 2,220,000
117,400 Ford Motor Company................ 3,683,425
75,800 General Motors Corporation........ 4,197,425
11,700 ITT Industries Inc. .............. 261,788
7,500 Navistar International
Corporation+.................... 70,313
3,800 PACCAR, Inc. ..................... 253,650
------------
10,686,601
------------
AUTOMOBILE PARTS
MANUFACTURERS -- 0.6%
13,700 AutoZone, Inc.+................... 308,250
8,600 Cooper Tire & Rubber Company...... 159,100
10,300 Dana Corporation.................. 338,612
8,200 Eaton Corporation................. 581,175
6,100 Echlin Inc. ...................... 207,400
12,200 Genuine Parts Company............. 568,825
15,400 Goodyear Tire & Rubber Company.... 804,650
6,250 Snap-On Inc. ..................... 242,187
------------
3,210,199
------------
BANKS -- 7.9%
43,100 Banc One Corporation.............. 1,713,225
39,400 BankAmerica Corporation........... 3,969,550
17,800 BankBoston Corporation............ 1,192,600
40,900 Bank of New York Inc. ............ 1,503,075
11,200 Bankers Trust N.Y. Corporation.... 918,400
25,900 Barnett Banks Inc. ............... 1,204,350
50,000 Chase Manhattan Corporation....... 4,681,250
46,800 Citicorp.......................... 5,066,100
15,100 Comerica Inc. .................... 851,263
22,800 CoreStates Financial
Corporation..................... 1,083,000
10,400 Fifth Third Bancorp............... 806,000
12,800 First Bank System, Inc. .......... 934,400
37,100 First Chicago Corporation NBD..... 2,008,037
32,500 First Union Corporation........... 2,636,562
25,900 Fleet Financial Group Inc. ....... 1,482,775
23,600 KeyCorp (New)..................... 1,150,500
14,800 Mellon Bank Corporation........... 1,076,700
22,700 Morgan (J.P.) & Company Inc. ..... 2,230,275
25,100 National City Corporation......... 1,170,288
37,300 Norwest Corporation............... 1,725,125
34,600 PNC Bank Corporation.............. 1,384,000
12,300 Republic New York Corporation..... 1,083,937
22,400 SunTrust Banks Inc. .............. 1,038,800
16,200 U.S. Bancorp...................... 866,700
21,400 Wachovia Corporation.............. 1,166,300
9,300 Wells Fargo & Company............. 2,642,362
------------
45,585,574
------------
BEVERAGES -- 4.0%
51,000 Anheuser-Busch Companies, Inc. ... 2,148,375
6,700 Brown-Forman Corporation,
Class B......................... 319,925
247,700 Coca-Cola Company................. 13,840,238
3,800 Coors (Adolph) Company, Class B... 80,750
157,800 PepsiCo Inc. ..................... 5,148,225
37,700 Seagram Company, Ltd.............. 1,442,025
------------
22,979,538
------------
BIO SPECIALTY
PHARMACEUTICALS -- 0.2%
26,500 Amgen Inc.+....................... 1,480,687
------------
CHEMICALS -- BASIC -- 2.8%
10,300 Air Products & Chemicals Inc. .... 699,112
23,400 Dow Chemical Company.............. 1,872,000
55,900 du Pont (E.I.) de Nemours &
Company......................... 5,925,400
8,400 Eastman Chemical Company.......... 451,500
6,400 Ecolab Inc. ...................... 243,200
3,500 FMC Corporation+.................. 214,375
20,200 Freeport McMoran Copper and Gold,
Class B......................... 613,575
5,300 Goodrich (B.F.) Company........... 194,112
10,500 Hercules, Inc. ................... 443,625
7,900 Mallinckrodt Inc. ................ 324,887
58,500 Monsanto Company.................. 2,237,625
6,500 Nalco Chemical Company............ 242,938
19,200 PPG Industries, Inc. ............. 1,036,800
14,700 Praxair Inc. ..................... 659,663
6,700 Rohm & Haas Company............... 501,663
13,500 Union Carbide Corporation......... 597,375
------------
16,257,850
------------
CHEMICALS -- SPECIALTY -- 0.4%
11,200 Avery Dennison Corporation........ 431,200
12,900 Engelhard Corporation............. 270,900
8,300 Grace (W.R.) & Company............ 393,213
6,200 Great Lakes Chemical
Corporation..................... 285,200
14,500 Morton International Inc.,
Industries...................... 612,625
9,600 Sigma-Aldrich Corporation......... 296,400
------------
2,289,538
------------
COAL, GAS AND PIPELINE -- 0.4%
10,500 Coastal Corporation............... 504,000
1,700 Eastern Enterprises............... 52,487
25,100 Enron Corporation................. 953,800
7,200 ENSERCH Corporation............... 147,600
14,200 PanEnergy Corporation............. 612,375
9,000 Santa Fe Energy Resources......... 124,875
------------
2,395,137
------------
COMMUNICATION EQUIPMENT -- 0.1%
10,350 Andrew Corporation+............... 373,894
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
50
<PAGE> 53
NATIONS FUNDS
Nations Equity Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
COMPUTER RELATED -- 4.4%
13,600 Amdahl Corporation+............... $ 127,500
12,100 Apple Computer Inc. .............. 220,825
5,900 Ceridian Corporation+............. 211,662
64,700 Cisco Systems, Inc.+.............. 3,113,687
26,600 Compaq Computer Corporation+...... 2,038,225
6,600 Data General Corporation+......... 112,200
18,900 Dell Computer Corporation+........ 1,278,112
15,300 Digital Equipment Corporation+.... 418,838
22,800 EMC Corporation+.................. 809,400
102,300 Hewlett-Packard Company........... 5,447,475
12,900 Honeywell, Inc. .................. 875,587
52,400 International Business Machines
Corporation..................... 7,198,450
24,800 Seagate Technology+............... 1,112,900
15,900 Silicon Graphics Inc.+............ 310,050
36,200 Sun Microsystems Inc.+............ 1,045,275
13,600 Tandem Computers Inc.+............ 161,500
16,600 3Com Corporation+................. 543,650
16,700 Unisys Corporation+............... 106,463
------------
25,131,799
------------
COMPUTER SERVICES -- 0.5%
29,700 Automatic Data Processing Inc..... 1,243,687
36,900 Computer Associates
International Inc. ............. 1,434,487
7,800 Computer Sciences Corporation+.... 481,650
------------
3,159,824
------------
COMPUTER SOFTWARE -- 2.8%
4,900 Autodesk, Inc. ................... 151,900
18,200 Bay Networks Inc.+................ 325,325
15,200 Cabletron Systems Inc.+........... 444,600
44,500 First Data Corporation............ 1,507,437
119,200 Microsoft Corporation+............ 10,929,150
36,300 Novell Inc.+...................... 344,850
65,900 Oracle Systems Corporation+....... 2,541,269
2,200 Shared Medical Systems
Corporation..................... 102,300
------------
16,346,831
------------
CONSTRUCTION -- 0.4%
6,800 Case Corporation.................. 345,100
2,700 Centex Corporation................ 95,175
4,150 Crane Company..................... 130,206
8,700 Fluor Corporation................. 456,750
3,400 Kaufman & Broad Home
Corporation..................... 45,050
15,800 Masco Corporation................. 564,850
4,900 Owens-Corning Fiberglass
Corporation..................... 197,225
2,200 Pulte Corporation................. 64,350
17,800 Sherwin-Williams Company.......... 480,600
------------
2,379,306
------------
CONTAINERS -- 0.2%
2,700 Ball Corporation.................. 71,550
5,200 Bemis Inc. ....................... 207,350
12,500 Crown Cork & Seal Inc. ........... 645,312
6,500 Tupperware Corporation............ 217,750
------------
1,141,962
------------
COSMETICS AND TOILETRY -- 2.6%
4,800 Alberto-Culver Company, Class B... 125,400
13,200 Avon Products Inc. ............... 693,000
5,400 Clorox Company.................... 605,475
14,700 Colgate-Palmolive Company......... 1,464,487
53,600 Gillette Company.................. 3,892,700
11,100 International Flavors &
Fragrances Inc. ................ 485,625
68,700 Procter & Gamble Company.......... 7,900,500
------------
15,167,187
------------
DIVERSIFIED -- 1.8%
28,500 AlliedSignal Inc. ................ 2,030,625
16,700 Cognizant Corporation............. 486,387
22,500 Corning Inc. ..................... 998,437
15,800 Frontier Corporation.............. 282,425
12,000 Loews Corporation................. 1,066,500
42,100 Minnesota Mining & Manufacturing
Company......................... 3,557,450
17,500 Tenneco Inc. ..................... 682,500
8,700 Textron, Inc. .................... 913,500
10,500 Whitman Corporation............... 257,250
------------
10,275,074
------------
DRUGS -- 6.4%
7,800 ALZA Corporation+................. 214,500
62,800 American Home Products
Corporation..................... 3,768,000
101,100 Bristol-Myers Squibb Company...... 5,964,900
54,600 Lilly (Eli) & Company............. 4,490,850
120,000 Merck & Company Inc. ............. 10,110,000
63,800 Pfizer, Inc. ..................... 5,367,175
50,600 Pharmacia & Upjohn Inc. .......... 1,853,225
37,100 Schering-Plough Corporation....... 2,699,025
26,600 Warner-Lambert Company............ 2,300,900
------------
36,768,575
------------
ELECTRIC POWER -- 2.7%
18,400 American Electric Power Inc. ..... 759,000
14,500 Baltimore Gas & Electric
Company......................... 387,875
15,500 Carolina Power & Light Company.... 561,875
19,900 Central & South West
Corporation..................... 425,362
15,600 CINergy Corporation............... 532,350
24,100 Consolidated Edison Company New
York Inc. ...................... 723,000
17,000 Dominion Resources Inc. .......... 618,375
14,800 DTE Energy Company................ 397,750
20,700 Duke Power Company................ 913,387
44,600 Edison International.............. 997,925
23,800 Entergy Corporation, New.......... 583,100
18,000 FPL Group Inc. ................... 794,250
12,000 GPU, Inc. ........................ 385,500
25,600 Houston Industries Inc. .......... 534,400
15,000 Niagara Mohawk Power
Corporation+.................... 127,500
6,700 Northern States Power
Corporation..................... 317,413
15,600 Ohio Edison Company............... 329,550
29,000 PacifiCorp........................ 619,875
22,600 PECO Energy Company............... 460,475
42,900 PG&E Corporation.................. 1,008,150
16,300 PP&L Resources Inc. .............. 330,075
24,800 Public Service Enterprise Group... 651,000
66,700 Southern Company.................. 1,409,037
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
51
<PAGE> 54
NATIONS FUNDS
Nations Equity Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
ELECTRIC POWER -- (CONTINUED)
23,400 Texas Utilities Company........... $ 801,450
22,000 Unicom Corporation................ 429,000
9,700 Union Electric Company............ 357,687
------------
15,455,361
------------
ELECTRICAL EQUIPMENT -- 3.6%
44,900 Emerson Electric Company.......... 2,020,500
164,000 General Electric Company.......... 16,277,000
12,600 General Instrument Corporation+... 288,225
4,900 Grainger (W.W.) Inc. ............. 362,600
4,500 Raychem Corporation............... 370,688
7,200 Scientific-Atlanta Inc. .......... 109,800
5,200 Thomas & Betts Corporation........ 222,300
62,600 Westinghouse Electric
Corporation..................... 1,111,150
------------
20,762,263
------------
ELECTRONICS -- 1.2%
21,700 AMP Inc. ......................... 745,937
17,700 Applied Materials Inc.+........... 820,837
3,900 Harris Corporation................ 299,812
4,100 Intergraph Corporation+........... 31,775
12,400 LSI Logic Corporation+............ 430,900
58,900 Motorola, Inc. ................... 3,556,088
13,000 National Semiconductor
Corporation+.................... 357,500
4,300 Perkin-Elmer Corporation.......... 276,812
3,600 Tektronix Inc. ................... 181,800
------------
6,701,461
------------
ENVIRONMENTAL -- 0.7%
21,300 Browning-Ferris Industries Inc.... 615,038
3,800 Johnson Controls Inc. ............ 305,900
28,600 Laidlaw Inc., Class B............. 393,250
4,600 Millipore Corporation............. 194,925
5,800 Safety-Kleen Corporation.......... 85,550
15,900 Tyco International Ltd. .......... 874,500
49,700 WMX Technologies Inc. ............ 1,522,063
------------
3,991,226
------------
EXPLORATION AND DRILLING -- 0.1%
12,700 Burlington Resources Inc.......... 542,925
2,200 Helmerich & Payne Inc. ........... 101,750
5,400 McDermott International Inc. ..... 115,425
------------
760,100
------------
FINANCIAL SERVICES -- 3.6%
47,400 American Express Company.......... 2,838,075
20,600 American General Corporation...... 839,450
5,600 Beneficial Corporation............ 361,900
33,200 Dean Witter, Discover & Company... 1,157,850
71,800 Federal Home Loan Mortgage
Corporation..................... 1,956,550
108,900 Federal National Mortgage
Association..................... 3,934,013
14,100 Green Tree Financial
Corporation..................... 475,875
9,100 Household International Inc. ..... 781,462
7,000 Marsh & McLennan Companies
Inc. ........................... 792,750
32,800 MBNA Corporation.................. 914,300
17,600 Merrill Lynch & Company Inc. ..... 1,511,400
15,600 Morgan Stanley Group, Inc. ....... 916,500
10,400 Salomon Inc. ..................... 518,700
6,800 Transamerica Corporation.......... 608,600
63,666 Travelers Group Inc. ............. 3,048,010
------------
20,655,435
------------
FOOD PRODUCERS -- 3.1%
55,720 Archer-Daniels-Midland Company.... 995,995
46,900 Campbell Soup Company............. 2,174,988
24,800 ConAgra Inc. ..................... 1,345,400
14,400 CPC International Inc. ........... 1,180,800
15,900 General Mills Inc. ............... 987,787
35,900 Heinz (H.J.) Company.............. 1,418,050
15,600 Hershey Foods Corporation......... 780,000
20,700 Kellogg Company................... 1,392,075
8,100 Pioneer Hi-Bred International..... 509,287
13,300 Quaker Oats Company............... 485,450
10,400 Ralston-Purina Group.............. 812,500
48,300 Sara Lee Corporation.............. 1,956,150
15,800 Unilever N.V., ADR................ 2,942,750
11,900 Wrigley (Wm.) Jr. Company......... 694,662
------------
17,675,894
------------
FOOD RETAILERS -- 0.7%
26,000 Albertson's, Inc. ................ 884,000
14,400 American Stores Company........... 640,800
3,300 Fleming Companies Inc. ........... 57,750
6,100 Giant Food Inc., Class A.......... 195,200
3,700 Great Atlantic & Pacific Tea
Inc............................. 93,888
11,700 Kroger Company+................... 593,775
6,800 Supervalu Inc. ................... 202,300
18,300 Sysco Corporation................. 624,487
15,300 Winn-Dixie Stores Inc. ........... 504,900
------------
3,797,100
------------
FURNITURE AND APPLIANCES -- 0.4%
3,400 Armstrong World Industries Inc.... 220,150
8,900 Black & Decker Corporation........ 285,912
10,500 Maytag Corporation................ 216,563
15,200 Newell Company.................... 509,200
15,900 Rubbermaid, Inc. ................. 395,512
9,000 Stanley Works..................... 340,875
7,800 Whirlpool Corporation............. 371,475
------------
2,339,687
------------
INSURANCE -- 3.4%
15,000 Aetna Life & Casualty Company..... 1,288,125
45,600 Allstate Corporation.............. 2,707,500
47,300 American International Group,
Inc. ........................... 5,551,838
10,700 Aon Corporation................... 655,375
18,300 Chubb Corporation................. 985,912
7,600 CIGNA Corporation................. 1,110,550
14,800 Conseco Inc. ..................... 527,250
8,200 General Re Corporation............ 1,295,600
11,700 ITT Hartford Group Inc. .......... 843,863
7,100 Jefferson-Pilot Corporation....... 386,063
10,200 Lincoln National Corporation
Ltd. ........................... 545,700
4,300 MBIA, Inc. ....................... 412,262
5,800 MGIC Investment Corporation....... 410,350
9,900 Providian Corporation............. 529,650
12,400 SAFECO Corporation................ 496,000
8,100 St. Paul Companies Inc. .......... 525,487
6,900 Torchmark Corporation............. 382,087
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
52
<PAGE> 55
NATIONS FUNDS
Nations Equity Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
INSURANCE -- (CONTINUED)
7,700 UNUM Corporation.................. $ 562,100
9,900 USF&G Corporation................. 212,850
3,600 USLIFE Corporation................ 168,300
------------
19,596,862
------------
MACHINERY AND EQUIPMENT -- 1.3%
2,600 Briggs & Stratton Corporation..... 116,675
19,700 Caterpillar Inc. ................. 1,580,925
3,400 Cincinnati Milacron Inc. ......... 63,750
11,000 Cooper Industries Inc. ........... 477,125
4,800 Cummins Engine Inc. .............. 246,000
26,400 Deere & Company................... 1,148,400
11,800 Dover Corporation................. 619,500
3,500 Foster Wheeler Corporation........ 123,813
4,500 General Signal Corporation........ 176,063
3,600 Giddings & Lewis Inc. ............ 53,550
3,700 Harnischfeger Industries Inc. .... 172,050
11,700 Illinois Tool Works Inc. ......... 955,013
10,600 Ingersoll-Rand Company............ 462,425
700 NACCO Industries Inc., Class A.... 34,475
11,600 Pall Corporation.................. 268,250
8,000 Parker-Hannifin Corporation....... 342,000
14,400 Thermo Electron Corporation+...... 444,600
3,200 Timken Company.................... 171,200
2,800 TRINOVA Corporation............... 93,800
------------
7,549,614
------------
MEDIA -- 0.8%
31,900 Comcast Corporation, Class A...... 538,313
65,600 Tele-Communications Inc.,
Class A......................... 787,200
57,600 Time Warner Inc. ................. 2,491,200
57,000 U.S. West Media Group, Inc.+...... 1,061,625
------------
4,878,338
------------
MEDICAL PRODUCTS AND
SUPPLIES -- 3.0%
78,900 Abbott Laboratories............... 4,428,262
6,700 Allergan, Inc. ................... 195,138
5,700 Bard (C.R.) Inc. ................. 162,450
6,000 Bausch & Lomb Inc. ............... 237,000
27,800 Baxter International Inc. ........ 1,198,875
13,300 Becton, Dickinson & Company....... 598,500
11,000 Biomet, Inc. ..................... 185,625
17,000 Boston Scientific Corporation+.... 1,049,750
7,100 Guidant Corporation............... 436,650
133,500 Johnson & Johnson................. 7,058,813
23,300 Medtronic, Inc. .................. 1,450,425
7,600 St. Jude Medical Inc.+............ 253,650
6,200 United States Surgical
Corporation..................... 189,100
------------
17,444,238
------------
MEDICAL SERVICES -- 0.9%
9,600 Beverly Enterprises Inc.+......... 136,800
66,700 Columbia/HCA Healthcare
Corporation..................... 2,242,788
31,200 HEALTHSOUTH Corporation+.......... 596,700
15,800 Humana Inc.+...................... 347,600
6,500 Manor Care Inc. .................. 158,437
29,000 Tenet Healthcare Corporation+..... 714,125
18,000 United Healthcare Corporation..... 857,250
------------
5,053,700
------------
METALS AND MINING -- 1.1%
22,600 Alcan Aluminum Ltd. .............. 765,575
18,000 Aluminum Company of America....... 1,224,000
4,000 ASARCO Inc. ...................... 112,500
35,400 Barrick Gold Corporation.......... 840,750
23,300 Battle Mountain Gold Company...... 154,362
9,700 Cyprus Amax Minerals Company...... 230,375
11,800 Echo Bay Mines Ltd. .............. 78,175
14,300 Homestake Mining Company.......... 216,288
17,000 Inco Ltd. ........................ 554,625
10,000 Newmont Mining Corporation........ 387,500
6,800 Phelps Dodge Corporation.......... 497,250
24,200 Placer Dome Inc., ADR............. 438,625
6,300 Reynolds Metals Company........... 390,600
13,400 Santa Fe Pacific Gold
Corporation..................... 221,100
------------
6,111,725
------------
OFFICE EQUIPMENT -- 0.6%
11,700 Ikon Office Solutions............. 391,950
9,700 Moore Corporation Ltd. ........... 194,000
15,200 Pitney Bowes Inc. ................ 893,000
33,200 Xerox Corporation................. 1,888,250
------------
3,367,200
------------
OIL -- DOMESTIC -- 2.1%
9,700 Amerada Hess Corporation.......... 514,100
49,900 Amoco Corporation................. 4,322,587
6,500 Ashland Oil, Inc. ................ 261,625
16,000 Atlantic Richfield Company........ 2,122,000
4,800 Kerr-McGee Corporation............ 297,000
3,400 Louisana Land & Exploration
Company......................... 161,075
32,700 Occidental Petroleum
Corporation..................... 805,238
10,100 Oryx Energy Company+.............. 194,425
4,300 Pennzoil Company.................. 222,525
26,500 Phillips Petroleum Company........ 1,083,188
8,700 Sun Company, Inc. ................ 227,288
24,700 Unocal Corporation................ 941,688
29,800 USX-Marathon Group (New).......... 830,675
------------
11,983,414
------------
OIL -- INTERNATIONAL -- 6.3%
65,600 Chevron Corporation............... 4,567,400
124,400 Exxon Corporation................. 13,404,100
39,600 Mobil Corporation................. 5,172,750
53,900 Royal Dutch Petroleum
Company, ADR.................... 9,432,500
26,000 Texaco Inc. ...................... 2,847,000
24,398 Union Pacific Resources Group
Inc. ........................... 652,647
------------
36,076,397
------------
OIL SERVICES -- 0.9%
14,200 Baker Hughes Inc. ................ 544,925
17,000 Dresser Industries, Inc. ......... 514,250
11,500 Halliburton Company............... 779,125
8,400 Rowan Companies Inc.+............. 190,050
24,400 Schlumberger Ltd. ................ 2,616,900
5,400 Western Atlas, Inc.+.............. 327,375
------------
4,972,625
------------
PAPER AND FOREST PRODUCTS -- 1.4%
5,200 Boise Cascade Corporation......... 158,600
9,900 Champion International
Corporation..................... 450,450
9,400 Georgia-Pacific Corporation....... 681,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
53
<PAGE> 56
NATIONS FUNDS
Nations Equity Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
PAPER AND FOREST
PRODUCTS -- (CONTINUED)
29,900 International Paper Company....... $ 1,162,363
8,600 James River Corporation........... 250,475
28,300 Kimberly-Clark Corporation........ 2,812,313
11,000 Louisiana Pacific Corporation..... 228,250
5,500 Mead Corporation.................. 291,500
2,500 Potlatch Corporation.............. 102,812
8,700 Stone Container Corporation....... 96,787
5,700 Temple-Inland Inc. ............... 299,250
6,900 Union Camp Corporation............ 325,162
10,100 Westvaco Corporation.............. 253,762
20,200 Weyerhaeuser Company.............. 901,425
5,700 Willamette Industries Inc. ....... 356,250
------------
8,370,899
------------
PHOTO AND OPTICAL -- 0.5%
34,000 Eastman Kodak Company............. 2,579,750
4,400 Polaroid Corporation.............. 174,900
------------
2,754,650
------------
PRINTING AND PUBLISHING -- 1.1%
7,700 American Greetings
Corporation, Class A............ 245,919
8,200 Deluxe Corporation................ 265,475
15,800 Donnelley (R.R.) & Sons Company... 551,025
10,100 Dow Jones & Company Inc. ......... 410,312
16,700 Dun & Bradstreet Corporation...... 423,763
14,200 Gannett Company, Inc. ............ 1,219,425
8,000 Harcourt General Inc. ............ 372,000
3,300 Harland (John H.) Company......... 78,375
4,000 Jostens Inc. ..................... 90,500
9,100 Knight- Ridder Inc. .............. 362,863
9,800 McGraw-Hill Companies, Inc. ...... 501,025
4,400 Meredith Corporation.............. 101,750
9,800 New York Times Company, Class A... 432,425
10,100 Times Mirror Company, Class A..... 551,713
12,600 Tribune Company................... 510,300
------------
6,116,870
------------
PROFESSIONAL SERVICES -- 0.2%
9,600 Block (H&R) Inc. ................. 282,000
7,800 Interpublic Group Companies
Inc. ........................... 411,450
23,700 Service Corporation
International................... 705,075
------------
1,398,525
------------
RECREATION -- 1.4%
10,000 Brunswick Corporation............. 268,750
67,800 Disney (Walt) Company............. 4,949,400
4,100 Fleetwood Enterprises Inc. ....... 102,500
10,000 Harrah's Entertainment Inc.+...... 171,250
13,050 Hasbro Inc. ...................... 357,244
5,500 King World Productions Inc.+...... 200,750
27,900 Mattel, Inc. ..................... 669,600
36,300 Viacom Inc., Class B+............. 1,202,438
------------
7,921,932
------------
RESTAURANTS AND LODGING -- 1.1%
15,900 Darden Restaurants Inc............ 125,212
11,900 HFS Inc.+......................... 700,613
25,400 Hilton Hotels Corporation......... 615,950
12,100 ITT Corporation................... 712,388
11,900 Marriot International Inc. ....... 592,025
70,100 McDonald's Corporation............ 3,312,225
11,800 Wendy's International Inc. ....... 243,375
------------
6,301,788
------------
RETAIL -- DISCOUNT -- 1.6%
58,700 Kmart Stores Corporation.......... 711,738
11,900 Rite Aid Corporation.............. 499,800
7,800 TJX Companies Inc. ............... 333,450
28,500 Toys R Us Inc.+................... 798,000
229,500 Wal-Mart Stores Inc. ............. 6,397,312
13,300 Woolworth Corporation+............ 310,888
------------
9,051,188
------------
RETAIL -- GENERAL -- 1.2%
20,200 Costco Companies Inc.+............ 558,025
22,100 Dayton Hudson Corporation......... 922,675
11,400 Dillard Department
Stores Inc., Class A............ 359,100
19,400 Federated Department
Stores Inc.+.................... 637,775
25,200 May Department Stores Company..... 1,146,600
3,400 Mercantile Stores Inc. ........... 157,675
23,100 Penney (J.C.) Company Inc. ....... 1,100,138
39,300 Sears, Roebuck & Company.......... 1,974,825
------------
6,856,813
------------
RETAIL -- SPECIALTY -- 1.4%
10,100 Charming Shoppes Inc.+............ 54,288
10,100 Circuit City Stores Inc. ......... 337,087
37,250 CUC International Inc.+........... 838,125
10,100 CVS Corporation................... 465,862
29,700 Gap Inc. ......................... 994,950
47,200 Home Depot Inc. .................. 2,525,200
27,700 Limited Inc. ..................... 508,988
3,100 Longs Drug Stores Corporation..... 72,850
16,300 Lowe's Companies Inc. ............ 609,213
8,100 Nordstrom, Inc. .................. 306,788
6,100 Pep Boys -- Manny, Moe & Jack..... 183,000
6,300 Tandy Corporation................. 315,787
24,700 Walgreen Company.................. 1,034,312
------------
8,246,450
------------
SAVINGS AND LOANS -- 0.2%
11,500 Ahmanson (H.F.) & Company......... 419,750
6,000 Golden West Financial
Corporation..................... 376,500
13,700 Great Western Financial
Corporation..................... 553,138
------------
1,349,388
------------
SEMICONDUCTORS -- 2.5%
13,800 Advanced Micro Devices Inc.+...... 572,700
81,900 Intel Corporation................. 11,394,338
20,600 Micron Technology, Inc. .......... 834,300
18,800 Texas Instruments Inc. ........... 1,407,650
------------
14,208,988
------------
STEEL -- 0.2%
9,700 Armco Inc.+....................... 38,800
11,000 Bethlehem Steel Corporation+...... 90,750
4,500 Inland Steel Industries Inc. ..... 87,750
8,600 Nucor Corporation................. 393,450
8,200 USX-U.S. Steel Group.............. 218,325
8,800 Worthington Industries Inc. ...... 168,300
------------
997,375
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
54
<PAGE> 57
NATIONS FUNDS
Nations Equity Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
TELECOMMUNICATIONS -- 1.0%
11,200 DSC Communications Corporation+... $ 234,500
62,258 Lucent Technologies............... 3,284,110
25,800 Northern Telecommunications,
Ltd. ........................... 1,686,675
17,900 Tellabs, Inc.+.................... 646,638
------------
5,851,923
------------
TOBACCO -- 1.9%
16,900 American Brands Inc............... 855,562
81,800 Philip Morris Companies Inc. ..... 9,335,425
18,600 UST Inc. ......................... 518,475
------------
10,709,462
------------
TRANSPORTATION -- AIRLINES -- 0.3%
8,900 AMR Corporation+.................. 734,250
7,600 Delta Air Lines, Inc. ............ 639,350
13,900 Southwest Airlines Company........ 307,537
6,000 USAir Group Inc.+................. 147,000
------------
1,828,137
------------
TRANSPORTATION -- RAILROADS -- 1.0%
15,200 Burlington Northern Santa Fe
Inc............................. 1,124,800
7,900 Conrail Inc. ..................... 890,725
22,300 CSX Corporation................... 1,036,950
12,500 Norfolk Southern Corporation...... 1,065,625
24,500 Union Pacific Corporation......... 1,390,375
------------
5,508,475
------------
TRUCKING AND SHIPPING -- 0.2%
3,700 Caliber Systems Inc............... 98,050
11,600 Federal Express Corporation+...... 604,650
9,400 Ryder Systems Inc. ............... 274,950
------------
977,650
------------
UTILITIES -- NATURAL GAS -- 0.5%
5,400 Columbia Gas Systems Inc.......... 312,525
9,500 Consolidated Natural Gas
Company......................... 478,563
4,900 NICOR Inc. ....................... 156,800
13,100 NorAm Energy Corporation.......... 191,588
2,400 ONEOK Inc. ....................... 62,400
8,300 Pacific Enterprises............... 251,075
3,400 Peoples Energy Corporation........ 112,625
8,800 Sonat, Inc. ...................... 479,600
14,950 Williams Companies Inc. .......... 665,275
------------
2,710,451
------------
UTILITIES -- TELEPHONE -- 6.4%
49,500 AirTouch Communications, Inc.+.... 1,138,500
19,000 ALLTEL Corporation................ 617,500
55,300 Ameritech Corporation............. 3,400,950
161,100 AT&T Corporation.................. 5,598,225
43,800 Bell Atlantic Corporation......... 2,666,325
99,300 BellSouth Corporation............. 4,195,425
97,800 GTE Corporation................... 4,559,925
69,200 MCI Communications Corporation.... 2,465,250
43,200 NYNEX Corporation................. 1,971,000
42,500 Pacific Telesis Group............. 1,604,375
60,200 SBC Communications Inc. .......... 3,168,025
43,900 Sprint Corporation................ 1,997,450
47,500 U.S. West Inc. ................... 1,615,000
87,900 WorldCom Inc.+.................... 1,933,800
------------
36,931,750
------------
OTHER -- 0.3%
17,100 Allegheny Teledyne Inc. .......... 480,937
22,200 Rockwell International
Corporation..................... 1,440,225
------------
1,921,162
------------
TOTAL COMMON STOCKS
(Cost $473,681,159)............... 579,504,324
============
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
-------- --------
U.S. TREASURY BILLS -- 0.2%
<C> <S> <C>
$ 100,000 5.110%** 04/24/1997++.............. 99,679
100,000 5.090%** 05/08/1997++.............. 99,488
100,000 5.090%** 05/15/1997++.............. 99,390
200,000 5.110%** 05/22/1997++.............. 198,596
200,000 5.130%** 06/05/1997++.............. 198,180
300,000 5.130%** 06/12/1997++.............. 296,973
------------
TOTAL U.S. TREASURY BILLS
(Cost $992,306).................... 992,306
============
TOTAL SECURITIES
(Cost $474,673,465)................ 580,496,630
============
<CAPTION>
REPURCHASE AGREEMENT -- 1.1%
(Cost $6,492,000)
<C> <S> <C>
6,492,000 Agreement with Smith Barney, 6.300%
dated 03/31/97, to be repurchased
at $6,493,136 on 04/01/97,
collateralized by: $6,492,017
U.S. Government Agency
Securities,
5.125% -- 8.740% due
03/04/98 -- 12/15/43............. 6,492,000
----------
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $481,165,465*).................. 102.1% 586,988,630
OTHER ASSETS AND
LIABILITIES (NET)..................... (2.1) (11,870,837)
------ -------------
NET ASSETS.............................. 100.0% $ 575,117,793
===== =============
</TABLE>
<TABLE>
<CAPTION>
NET
NUMBER OF UNREALIZED
CONTRACTS DEPRECIATION
-------------------------------------------------------------
FUTURES CONTRACTS -- LONG POSITION
<C> <S> <C>
17 S&P 500 Index Futures, June
1997.......................... $ (260,600)
===========
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Aggregate cost for Federal tax purposes is $482,990,866.
** Rate represents annualized yield at date of purchase.
+ Non-income producing security.
++ Security segregated as collateral for futures contracts.
</TABLE>
ABBREVIATION:
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
55
<PAGE> 58
NATIONS FUNDS
Nations Disciplined Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 97.3%
<C> <S> <C>
AEROSPACE AND DEFENSE -- 2.3%
38,700 United Technologies
Corporation.................... $ 2,912,175
------------
APPAREL AND TEXTILES -- 4.2%
65,700 Fruit of the Loom Inc., Class
A+............................. 2,726,550
61,300 Liz Claiborne Inc. .............. 2,674,212
------------
5,400,762
------------
AUTOMOTIVE AND TRUCK
MANUFACTURERS -- 1.7%
73,600 Chrysler Corporation............. 2,208,000
------------
BANKS -- 8.1%
71,400 Ahmanson (H.F.) & Company........ 2,606,100
25,400 BankAmerica Corporation.......... 2,559,050
29,000 Chase Manhattan Corporation...... 2,715,125
71,700 Southtrust Corporation........... 2,590,162
------------
10,470,437
------------
CHEMICALS -- BASIC -- 3.6%
66,400 Cytec Industries Inc.+........... 2,514,900
27,600 Rohm & Haas Company.............. 2,066,550
------------
4,581,450
------------
COMPUTER RELATED -- 5.7%
31,800 Compaq Computer Corporation+..... 2,436,675
42,000 Dell Computer Corporation+....... 2,840,250
54,100 Storage Technology
Corporation+................... 2,123,425
------------
7,400,350
------------
COMPUTER SOFTWARE -- 2.1%
44,100 Compuware Corporation+........... 2,767,275
------------
DIVERSIFIED -- 1.6%
23,600 Loews Corporation................ 2,097,450
------------
ELECTRIC POWER -- 1.6%
59,100 Texas Utilities Company.......... 2,024,175
------------
ELECTRONICS -- 1.9%
89,800 National Semiconductor
Corporation+................... 2,469,500
------------
ENVIRONMENTAL -- 1.9%
30,450 Johnson Controls Inc. ........... 2,451,225
------------
FINANCIAL SERVICES -- 7.9%
50,900 GreenPoint Financial
Corporation.................... 2,621,350
86,350 Paine Webber Group, Inc. ........ 2,439,387
26,600 Student Loan Marketing
Association.................... 2,533,650
54,900 Travelers Group Inc. ............ 2,628,338
------------
10,222,725
------------
FOOD RETAILERS -- 2.1%
58,994 Safeway Inc.+.................... 2,735,847
------------
INSURANCE -- 5.8%
17,500 CIGNA Corporation................ 2,557,188
87,400 Equitable Companies, Inc. ....... 2,381,650
35,500 MGIC Investment Corporation...... 2,511,625
------------
7,450,463
------------
MACHINERY AND EQUIPMENT -- 7.8%
33,100 Caterpillar Inc. ................ 2,656,275
46,400 Cummins Engine Inc. ............. 2,378,000
57,850 Harnischfeger Industries Inc. ... 2,690,025
53,800 Ingersoll-Rand Company........... 2,347,025
------------
10,071,325
------------
MEDICAL PRODUCTS AND
SUPPLIES -- 3.6%
44,700 Guidant Corporation.............. 2,749,050
63,300 United States Surgical
Corporation.................... 1,930,650
------------
4,679,700
------------
METALS AND MINING -- 2.0%
108,900 Cyprus Amax Minerals Company..... 2,586,375
------------
OIL -- DOMESTIC -- 5.8%
45,000 Pennzoil Company................. 2,328,750
57,500 Phillips Petroleum Company....... 2,350,313
99,800 USX-Marathon Group (New)......... 2,781,925
------------
7,460,988
------------
OIL -- INTERNATIONAL -- 4.2%
18,900 British Petroleum Company Plc,
ADR............................ 2,594,025
25,600 Texaco Inc. ..................... 2,803,200
------------
5,397,225
------------
OIL SERVICES -- 2.2%
72,000 Baker Hughes Inc. ............... 2,763,000
------------
PHOTO AND OPTICAL -- 1.8%
30,900 Eastman Kodak Company............ 2,344,537
------------
RETAIL -- DISCOUNT -- 3.9%
56,100 TJX Companies Inc. .............. 2,398,275
110,600 Woolworth Corporation+........... 2,585,275
------------
4,983,550
------------
RETAIL -- GENERAL -- 4.1%
94,500 Costco Companies Inc.+........... 2,610,563
63,200 Dayton Hudson Corporation........ 2,638,600
------------
5,249,163
------------
TRANSPORTATION -- AIRLINES -- 2.1%
41,400 UAL Corporation+................. 2,680,650
------------
TRUCKING AND SHIPPING -- 2.0%
49,300 Federal Express Corporation+..... 2,569,762
------------
UTILITIES -- NATURAL GAS -- 3.5%
44,900 Consolidated Natural Gas
Company........................ 2,261,837
72,000 NICOR Inc. ...................... 2,304,000
------------
4,565,837
------------
UTILITIES -- TELEPHONE -- 3.8%
43,000 Cincinnati Bell Inc. ............ 2,429,500
66,700 Pacific Telesis Group............ 2,517,925
------------
4,947,425
------------
TOTAL COMMON STOCKS
(Cost $111,968,412)............ 125,491,371
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
56
<PAGE> 59
NATIONS FUNDS
Nations Disciplined Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.1%
(Cost $2,679,000)
<C> <S> <C>
$2,679,000 Agreement with Smith Barney,
6.300% dated 03/31/97, to be
repurchased
at $2,679,469 on 04/01/97,
collateralized by: $2,679,007
U.S. Government Agency
Securities, 5.125% -- 8.740% due
03/04/98 -- 12/15/43............ $ 2,679,000
============
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $114,647,412*)................... 99.4% 128,170,371
OTHER ASSETS AND
LIABILITIES (NET)...................... 0.6 750,756
----- ------------
NET ASSETS............................... 100.0% $128,921,127
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes is $114,680,588.
+ Non-income producing security.
ABBREVIATION:
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
57
<PAGE> 60
NATIONS FUNDS
Nations Capital Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 99.8%
<C> <S> <C>
AEROSPACE AND DEFENSE -- 0.0%#
1 Boeing Company....................... $ 99
------------
APPAREL AND TEXTILES -- 1.5%
150,100 Nike Inc., Class B................... 9,306,200
------------
BANKS -- 3.0%
141,900 Bank of New York Inc. ............... 5,214,825
70,800 Chase Manhattan Corporation.......... 6,628,650
136,300 Norwest Corporation.................. 6,303,875
------------
18,147,350
------------
BEVERAGES -- 2.8%
88,200 Coca-Cola Company.................... 4,928,175
374,100 PepsiCo Inc. ........................ 12,205,012
------------
17,133,187
------------
CHEMICALS -- BASIC -- 0.6%
94,700 Monsanto Company..................... 3,622,275
------------
CHEMICALS -- SPECIALTY -- 2.3%
55,350 Raychem Corporation.................. 4,559,456
316,100 Sigma-Aldrich Corporation............ 9,759,587
------------
14,319,043
------------
COMMUNICATION EQUIPMENT -- 1.1%
84,000 Andrew Corporation+.................. 3,034,500
102,100 Ericsson (L.M.) Telecommunications
Company, Class B, ADR.............. 3,452,256
------------
6,486,756
------------
COMPUTER RELATED -- 2.9%
66,600 Cisco Systems, Inc.+................. 3,205,125
60,300 Compaq Computer Corporation+......... 4,620,488
146,925 FORE Systems, Inc.+.................. 2,203,875
81,100 Hewlett-Packard Company.............. 4,318,575
118,300 Sun Microsystems, Inc.+.............. 3,415,913
------------
17,763,976
------------
COMPUTER SERVICES -- 2.1%
230,050 Computer Associates International
Inc. .............................. 8,943,194
182,600 Gartner Group, Inc., Class A+........ 3,948,725
------------
12,891,919
------------
COMPUTER SOFTWARE -- 6.6%
107,850 BMC Software, Inc.+.................. 4,974,581
220,600 Cadence Design Systems, Inc.+........ 7,583,125
195,200 First Data Corporation............... 6,612,400
145,900 Microsoft Corporation+............... 13,377,206
105,100 Parametric Technology Corporation+... 4,742,637
149,600 Rational Software Corporation+....... 3,085,500
------------
40,375,449
------------
CONSTRUCTION -- 0.9%
98,900 Fluor Corporation.................... 5,192,250
------------
CONTAINERS -- 0.8%
94,400 Crown Cork & Seal Inc. .............. 4,873,400
------------
COSMETICS AND TOILETRY -- 1.7%
34,400 Colgate-Palmolive Company............ 3,427,100
97,000 Gillette Company..................... 7,044,625
------------
10,471,725
------------
DIVERSIFIED -- 1.4%
121,300 AlliedSignal Inc. ................... 8,642,625
------------
DRUGS -- 7.3%
100,900 Amgen, Inc.+......................... 5,637,788
104,200 Biogen, Inc.+........................ 3,894,475
169,800 Bristol-Myers Squibb Company......... 10,018,200
155,700 Merck & Company Inc. ................ 13,117,725
164,300 Schering-Plough Corporation.......... 11,952,825
------------
44,621,013
------------
ELECTRIC POWER -- 0.4%
47,500 AES Corporation+..................... 2,660,000
------------
ELECTRICAL EQUIPMENT -- 3.3%
295,800 Emerson Electric Company............. 13,311,000
68,200 General Electric Company............. 6,768,850
------------
20,079,850
------------
ELECTRONICS -- 1.9%
81,100 Motorola, Inc. ...................... 4,896,412
243,200 Teradyne, Inc.+...................... 7,022,400
------------
11,918,812
------------
FINANCIAL SERVICES -- 5.7%
206,200 Dean Witter, Discover & Company...... 7,191,225
247,850 Equifax Inc. ........................ 6,753,913
169,100 Federal Home Loan Mortgage
Corporation........................ 4,607,975
132,400 Federal National Mortgage
Association........................ 4,782,950
71,100 First USA Inc. ...................... 3,012,863
94,800 Green Tree Financial Corporation..... 3,199,500
60,700 Transamerica Corporation............. 5,432,650
------------
34,981,076
------------
FOOD PRODUCERS -- 2.2%
133,900 Hershey Foods Corporation............ 6,695,000
85,000 Ralston-Purina Group................. 6,640,625
------------
13,335,625
------------
FOOD RETAILERS -- 1.2%
212,550 Sysco Corporation.................... 7,253,269
------------
INSURANCE -- 7.2%
116,400 American International Group,
Inc. .............................. 13,662,450
103,000 General Re Corporation............... 16,274,000
107,300 MGIC Investment Corporation.......... 7,591,475
92,500 UNUM Corporation..................... 6,752,500
------------
44,280,425
------------
MACHINERY AND EQUIPMENT -- 1.4%
90,450 Dover Corporation.................... 4,748,625
50,100 Illinois Tool Works, Inc. ........... 4,089,412
------------
8,838,037
------------
MEDIA -- 2.0%
85,900 Reuters Holdings Plc, ADR............ 4,998,306
167,300 Time Warner Inc. .................... 7,235,725
------------
12,234,031
------------
MEDICAL PRODUCTS AND SUPPLIES -- 9.5%
245,750 Abbott Laboratories.................. 13,792,719
259,900 Baxter International Inc. ........... 11,208,188
199,500 Becton, Dickinson & Company.......... 8,977,500
92,050 Boston Scientific Corporation+....... 5,684,088
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
58
<PAGE> 61
NATIONS FUNDS
Nations Capital Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
MEDICAL PRODUCTS AND
SUPPLIES -- (CONTINUED)
106,750 Guidant Corporation.................. $ 6,565,125
101,100 Johnson & Johnson.................... 5,345,663
109,300 Medtronic, Inc. ..................... 6,803,925
------------
58,377,208
------------
MEDICAL SERVICES -- 1.5%
136,600 Columbia/HCA Healthcare
Corporation........................ 4,593,175
99,400 HBO & Company........................ 4,721,500
------------
9,314,675
------------
OFFICE SUPPLIES -- 1.1%
191,500 Newell Company....................... 6,415,250
------------
OIL -- DOMESTIC -- 1.1%
111,100 Kerr-McGee Corporation............... 6,874,312
------------
OIL -- INTERNATIONAL -- 1.4%
66,400 Mobil Corporation.................... 8,673,500
------------
OIL SERVICES -- 1.9%
94,900 Halliburton Company.................. 6,429,475
84,550 Western Atlas, Inc.+................. 5,125,844
------------
11,555,319
------------
PAPER AND FOREST PRODUCTS -- 1.1%
68,550 Kimberly-Clark Corporation........... 6,812,156
------------
PRINTING AND PUBLISHING -- 1.1%
76,350 Gannett Company, Inc. ............... 6,556,556
------------
RECREATION -- 2.2%
204,900 Carnival Corporation................. 7,581,300
79,500 Disney (Walt) Company................ 5,803,500
------------
13,384,800
------------
RESTAURANTS AND LODGING -- 2.0%
210,600 HFS Inc.+............................ 12,399,075
------------
RETAIL -- SPECIALTY -- 1.9%
61,700 Home Depot Inc. ..................... 3,300,950
223,700 Lowe's Companies Inc. ............... 8,360,787
------------
11,661,737
------------
SEMICONDUCTORS -- 4.8%
192,600 Adaptec, Inc.+....................... 6,885,450
127,900 Altera Corporation+.................. 5,499,700
124,425 Intel Corporation.................... 17,310,628
------------
29,695,778
------------
TELECOMMUNICATIONS -- 3.6%
188,750 Ascend Communications Inc.+.......... 7,691,563
66,800 Oy Nokia AB, ADR..................... 3,891,100
148,100 Tellabs, Inc.+....................... 5,350,112
114,100 Vodafone Group Plc, ADR.............. 5,034,663
------------
21,967,438
------------
UTILITIES -- TELEPHONE -- 4.1%
313,400 AirTouch Communications, Inc.+..... 7,208,200
234,000 BellSouth Corporation.............. 9,886,500
177,250 GTE Corporation.................... 8,264,281
------------
25,358,981
------------
OTHER -- 2.2%
158,400 CUC International, Inc.+........... 3,564,000
156,800 Rockwell International
Corporation...................... 10,172,400
------------
13,736,400
------------
TOTAL COMMON STOCKS
(Cost $520,386,730).............. 612,211,577
============
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ---------
REPURCHASE AGREEMENT -- 4.6%
Cost $28,278,000)
<C> <S> <C>
$28,278,000 Agreement with Smith Barney, 6.300%
dated 03/31/97, to be repurchased
at $28,282,949 on 04/01/97,
collateralized by: $28,278,072
U.S. Government Agency
Securities, 5.125% - 8.740% due
03/04/98 -- 12/15/43............. 28,278,000
============
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $548,664,730*).................. 104.4% 640,489,577
OTHER ASSETS AND LIABILITIES (NET)...... (4.4) (26,803,966)
----- ------------
NET ASSETS.............................. 100.0% $613,685,611
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes is $549,511,778.
+ Non-income producing security.
# Amount represents less than 0.1% of net assets.
ABBREVIATION:
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
59
<PAGE> 62
NATIONS FUNDS
NATIONS EMERGING GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 91.5%
<C> <S> <C>
APPAREL AND TEXTILES -- 2.9%
61,600 Jones Apparel Group, Inc.+.......... $ 2,286,900
61,800 Lands End Inc.+..................... 1,637,700
56,400 Stage Stores, Inc.+................. 1,240,800
146,100 The Men's Wearhouse, Inc.+.......... 4,017,750
------------
9,183,150
------------
AUTOMOBILE PARTS MANUFACTURERS -- 1.0%
141,900 Superior Industries
International Inc. ............... 3,210,487
------------
BANKS -- 2.5%
192,700 Hibernia Corporation, Class A....... 2,529,188
140,000 Northern Trust Company.............. 5,250,000
------------
7,779,188
------------
BIO SPECIALTY PHARMACEUTICALS -- 1.4%
117,200 Biogen, Inc.+....................... 4,380,350
------------
CHEMICALS -- SPECIALTY -- 1.5%
126,000 Cytec Industries Inc.+.............. 4,772,250
------------
COAL, GAS AND PIPELINE -- 1.3%
74,500 Anadarko Petroleum Company.......... 4,181,312
------------
COMPUTER RELATED -- 2.9%
68,400 Cambridge Technology Partners
Inc.+............................. 1,581,750
136,300 Comverse Technology Inc.+........... 5,383,850
58,200 Diebold, Inc. ...................... 2,189,775
------------
9,155,375
------------
COMPUTER SERVICES -- 1.0%
37,100 Paychex, Inc. ...................... 1,525,738
52,200 Wallace Computer Services, Inc. .... 1,729,125
------------
3,254,863
------------
COMPUTER SOFTWARE -- 14.3%
60,200 Aspect Development, Inc.+........... 1,384,600
128,800 Aspen Technologies, Inc.+........... 3,509,800
100,000 Bell & Howell Holdings Company+..... 2,087,500
128,000 BMC Software, Inc.+................. 5,904,000
65,000 Cabletron Systems Inc.+............. 1,901,250
51,400 Compuware Corporation+.............. 3,225,350
115,200 Harbinger Corporation+.............. 2,534,400
65,400 McAfee Associates, Inc.+............ 2,893,950
110,300 Parametric Technology
Corporation+...................... 4,977,288
100,000 PeopleSoft Inc.+.................... 4,000,000
74,000 Remedy Corporation.................. 2,830,500
103,100 Reynolds & Reynolds Company......... 2,461,513
117,300 SunGard Data Systems, Inc.+......... 5,102,550
93,300 Techforce Corporation+.............. 553,969
51,700 Visio Corporation+.................. 2,016,300
------------
45,382,970
------------
ELECTRIC POWER -- 1.7%
38,000 AES Corporation+.................... 2,128,000
100,000 CMS Energy Corporation.............. 3,287,500
------------
5,415,500
------------
ELECTRICAL EQUIPMENT -- 1.6%
110,000 Jabil Circuit, Inc.+................ 4,956,875
------------
ELECTRONICS -- 4.3%
164,000 ADC Telecommunications Inc.+........ 4,407,500
116,500 Analog Devices, Inc.+............... 2,621,250
68,500 Hadco Corporation+.................. 2,654,375
120,150 Rational Software Corporation+...... 2,478,094
33,000 Symbol Technologies Inc. ........... 1,592,250
------------
13,753,469
------------
ENVIRONMENTAL -- 2.2%
75,000 Millipore Corporation............... 3,178,125
107,600 USA Waste Service Inc.+............. 3,819,800
------------
6,997,925
------------
EXPLORATION AND DRILLING -- 3.0%
103,500 BJ Services Inc.+................... 4,942,125
98,100 Smith International Inc.+........... 4,475,813
------------
9,417,938
------------
FINANCIAL SERVICES -- 5.6%
114,100 First USA Inc. ..................... 4,834,987
97,500 First USA Paymentech Inc.+.......... 2,547,187
56,500 FIRSTPLUS Financial Group, Inc.+.... 1,702,063
82,500 Franklin Resources Inc. ............ 4,207,500
136,500 Green Tree Financial Corporation.... 4,606,875
------------
17,898,612
------------
INSURANCE -- 2.9%
77,900 Penncorp Financial Group, Inc. ..... 2,492,800
134,400 SunAmerica, Inc. ................... 5,056,800
43,100 Vesta Insurance Group............... 1,535,437
------------
9,085,037
------------
MEDICAL PRODUCTS AND SUPPLIES -- 4.0%
116,000 Acuson Corporation+................. 2,711,500
118,000 Advanced Technology Laboratories
Inc.+............................. 3,495,750
188,700 DePuy, Inc.+........................ 4,127,813
48,500 HBO & Company....................... 2,303,750
------------
12,638,813
------------
MEDICAL SERVICES -- 5.6%
87,500 CRA Managed Care Inc.+.............. 3,281,250
90,000 Genesis Health Ventures+............ 2,812,500
201,700 Health Management Associates Inc.,
Class A+.......................... 4,790,375
53,700 National Surgery Centers, Inc.+..... 1,557,300
51,300 Pediatrix Medical Group Inc.+....... 1,686,488
59,000 PhyCor Inc.+........................ 1,607,750
65,400 Quorum Health Group, Inc.+.......... 2,019,225
------------
17,754,888
------------
OIL -- DOMESTIC -- 3.8%
160,000 Chesapeake Energy Corporation+...... 3,340,000
163,900 Global Marine, Inc.+................ 3,523,850
178,000 Parker & Parsley Petroleum
Company........................... 5,251,000
------------
12,114,850
------------
OIL SERVICES -- 2.4%
104,100 Camco International Companies
Inc. ............................. 4,580,400
68,000 Tidewater, Inc. .................... 3,128,000
------------
7,708,400
------------
PAPER AND FOREST PRODUCTS -- 1.1%
137,000 Caraustar Industries, Inc. ......... 3,407,875
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
60
<PAGE> 63
NATIONS FUNDS
NATIONS EMERGING GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
PRINTING AND PUBLISHING -- 2.2%
119,400 Belo (A.H.) Corporation, Class A.... $ 4,417,800
66,100 Catalina Marketing Corporation+..... 2,685,312
------------
7,103,112
------------
PROFESSIONAL SERVICES -- 1.2%
190,000 Personnel Group of America, Inc.+... 3,728,750
------------
RECREATION -- 3.0%
106,400 International Speedway
Corporation+...................... 2,048,200
46,200 Penske Motorsports Inc.+............ 1,293,600
111,900 Speedway Motorsports, Inc.+......... 2,657,625
417,700 Station Casinos Inc.+............... 3,393,812
------------
9,393,237
------------
RESTAURANTS AND LODGING -- 6.0%
30,000 HFS Inc.+........................... 1,766,250
188,700 La Quinta Inns Inc. ................ 3,868,350
127,000 Lone Star Steakhouse & Saloon+...... 2,905,125
212,300 Papa John's International Inc.+..... 5,599,413
105,000 Promus Hotel Corporation+........... 3,491,250
112,000 Sonic Corporation+.................. 1,526,000
------------
19,156,388
------------
RETAIL -- DISCOUNT -- 0.9%
89,062 Dollar General Corporation.......... 2,783,187
------------
RETAIL -- SPECIALTY -- 2.8%
220,700 Bed Bath & Beyond Inc.+............. 5,338,181
68,800 Circuit City Stores Inc. ........... 1,032,000
46,800 Tiffany & Company................... 1,778,400
33,000 U.S. Rentals, Inc.+................. 598,125
------------
8,746,706
------------
SEMICONDUCTORS -- 2.2%
106,100 Altera Corporation+................. 4,562,300
89,250 Vitesse Semiconductor
Corporation+...................... 2,465,531
------------
7,027,831
------------
TELECOMMUNICATIONS -- 3.4%
54,000 Ascend Communications Inc.+......... 2,200,500
220,000 NEXTEL Communications Inc., Class
A+................................ 2,942,500
155,600 Tellabs, Inc.+...................... 5,621,050
------------
10,764,050
------------
TRANSPORTATION -- AIRLINES -- 1.4%
211,500 Comair Holdings Inc. ............... 4,600,125
------------
TRANSPORTATION -- RAILROADS -- 0.4%
75,000 Railtex, Inc. ...................... 1,246,875
------------
OTHER -- 1.0%
139,200 USA Detergents Inc.+................ 3,201,600
------------
TOTAL COMMON STOCKS (Cost
$261,876,601)..................... 290,201,988
============
<CAPTION>
PRINCIPAL
AMOUNT
----------
REPURCHASE AGREEMENT -- 8.5%
(Cost $26,988,000)
<C> <S> <C>
$26,988,000 Agreement with Smith Barney,
6.300% dated 03/31/97, to be
repurchased at $26,992,723 on
04/01/97, collateralized by:
$26,988,069 U.S. Government
Agency Securities,
5.125% -- 8.740% due 03/04/98 --
12/15/43........................ 26,988,000
============
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $288,864,601*).................. 100.0%. 317,189,988
OTHER ASSETS AND LIABILITIES (NET)...... (0.0) (70,094)
----- ------------
NET ASSETS.............................. 100.0% $317,119,894
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes is $289,656,921.
+ Non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS.
61
<PAGE> 64
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NATIONS MANAGED SMALLCAP INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 94.6%
<C> <S> <C>
AEROSPACE AND DEFENSE -- 0.6%
1,900 AAR Corporation...................... $ 57,000
2,800 BE Aerospace, Inc.+.................. 68,600
4,700 Orbital Sciences Corporation+........ 64,772
4,600 UNC Inc.+............................ 65,550
1,100 Whittaker Corporation+............... 11,138
------------
267,060
------------
AMMUNITION -- 0.2%
2,300 Alliant Techsystems, Inc.+........... 96,888
------------
APPAREL AND TEXTILES -- 3.0%
1,900 Brown Group Inc. .................... 31,588
3,700 Cone Mills Corporation+.............. 27,288
10,200 Delta Woodside Industries, Inc. ..... 67,575
7,500 Dixie Yarns, Inc.+................... 47,813
2,700 G & K Services Inc. ................. 81,000
4,200 Galey & Lord Inc.+................... 66,675
3,300 Guilford Mills Inc. ................. 99,413
1,100 Haggar Co. .......................... 15,469
5,500 Hartmarx Corporation+................ 31,625
6,600 Johnston Industries Inc. ............ 50,325
6,600 Mohawk Industries Inc.+.............. 137,775
5,300 Nautica Enterprises Inc.+............ 133,163
3,800 Osh Kosh B'Gosh, Class A............. 63,175
1,100 Oxford Industries Inc. .............. 29,288
3,400 Phillips-Van Heusen Corporation...... 40,375
3,400 Pillowtex Corporation................ 60,350
2,300 St. John Knits Inc. ................. 99,475
1,600 Timberland Company, Class A+......... 70,200
9,500 Tultex Corporation+.................. 73,625
------------
1,226,197
------------
AUTOMOBILE AND TRUCK
MANUFACTURERS -- 0.2%
2,300 Spartan Motors, Inc. ................ 15,813
3,200 Walbro Corporation................... 56,400
------------
72,213
------------
AUTOMOBILE PARTS MANUFACTURERS -- 1.8%
3,800 Breed Technologies Inc. ............. 74,100
500 Custom Chrome, Inc.+................. 6,875
3,400 Gentex Corporation+.................. 67,150
4,800 Intermet Corporation................. 63,000
3,500 Myers Industries Inc. ............... 58,188
2,400 Simpson Industries................... 23,700
2,300 SPX Corporation...................... 104,363
2,700 Standard Motor Products.............. 35,438
3,800 Standard Products Company............ 88,350
8,900 TBC Corporation+..................... 83,438
3,200 Titan Wheel International Inc. ...... 47,200
3,250 Wynn's International, Inc. .......... 75,156
------------
726,958
------------
BANKS -- 4.3%
2,300 CCB Financial Corporation............ 147,775
3,200 Cullen Frost Bankers Inc. ........... 114,000
5,600 Deposit Guaranty Corporation......... 168,000
3,200 FirstBank of Puerto Rico............. 81,200
4,775 First Financial Corporation
(Wisconsin)........................ 124,747
4,700 FirstMerit Corporation............... 195,638
3,800 Magna Group, Inc. ................... 108,300
3,500 RCSB Financial Inc. ................. 105,000
8,900 Union Planters Corporation........... 361,563
2,500 U.S. Trust Corporation............... 105,000
2,300 Zions Bancorporation................. 273,125
------------
1,784,348
------------
BASIC INDUSTRIES -- 0.6%
3,200 Commercial Metals.................... 91,600
2,700 Dravo Corporation+................... 29,700
3,300 Greenfield Industries................ 72,188
2,000 Shorewood Packaging Corporation+..... 37,250
------------
230,738
------------
BEVERAGES -- 0.1%
1,400 Coca-Cola Bottling Consolidated...... 60,900
BROADCASTING/ADVERTISING -- 0.5%
6,600 International Family Entertainment
Inc., Class B+..................... 134,475
3,200 True North Communications............ 60,000
------------
194,475
------------
BUILDING MATERIALS -- 2.3%
1,900 BMC West Corporation+................ 21,850
2,200 Butler Manufacturing Co. ............ 78,100
7,000 Champion Enterprises Inc.+........... 104,125
2,700 Fibreboard Corporation+.............. 93,488
2,300 Hughes Supply, Inc. ................. 75,038
2,700 Lone Star Industries................. 104,625
3,400 Medusa Corporation................... 127,500
3,400 PlyGem Industries Inc. (Delaware).... 45,900
3,750 Republic Group Inc. ................. 57,188
2,000 Skyline Corporation.................. 43,750
4,100 Texas Industries Inc. ............... 112,750
5,600 Universal Forest Products............ 68,600
------------
932,914
------------
CHEMICALS -- BASIC -- 0.6%
2,700 Cambrex Corporation.................. 90,450
2,400 The Scotts Company, Class A +........ 55,200
2,900 Tredegar Industries, Inc. ........... 117,088
------------
262,738
------------
CHEMICALS -- SPECIALTY -- 0.9%
1,400 Chemed Corporation................... 50,575
2,300 ChemFirst Inc.+...................... 48,875
3,400 Geon Company......................... 79,050
3,200 Lilly Industries, Inc., Class A...... 58,800
2,700 McWhorter Technologies, Inc.+........ 56,363
1,900 OM Group, Inc. ...................... 53,438
2,000 Quaker Chemical Corporation.......... 32,000
------------
379,101
------------
COMMERCIAL SERVICES -- 0.4%
2,700 Insurance Auto Auctions, Inc.+....... 17,888
2,900 Interim Services+.................... 112,738
1,100 NFO Research Inc.+................... 19,113
------------
149,739
------------
COMPUTER RELATED -- 3.5%
5,300 American Management Systems, Inc.+... 116,600
5,100 BancTec, Inc.+....................... 130,050
2,700 BISYS Group, Inc.+................... 85,050
3,200 BW/IP Inc. .......................... 48,400
3,200 Chips and Technologies, Inc.+........ 33,200
2,900 Comverse Technology, Inc.+........... 114,550
1,600 Henry Jack & Associates.............. 35,600
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
62
<PAGE> 65
NATIONS FUNDS
NATIONS MANAGED SMALLCAP INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ---------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
COMPUTER RELATED -- (CONTINUED)
4,700 Keane Inc.+.......................... $ 154,513
1,100 Kronos, Inc.+........................ 19,250
2,000 National Computer Systems Inc. ...... 50,500
6,600 Read-Rite Corporation+............... 166,650
4,700 SCI Systems, Inc.+................... 237,938
2,000 Standard Microsystems Corporation+... 20,750
5,600 Tech Data Corporation+............... 135,100
2,400 Wall Data Inc.+...................... 38,400
2,700 Xircom, Inc.+........................ 40,838
------------
1,427,389
------------
COMPUTER SERVICES -- 1.0%
3,200 Acxiom Corporation+.................. 46,000
2,300 Control Data Systems, Inc.+.......... 34,788
1,600 Gerber Scientific, Inc. ............. 24,800
5,300 Primark Corporation+................. 125,875
3,800 SunGard Data Systems, Inc.+.......... 165,300
------------
396,763
------------
COMPUTER SOFTWARE -- 0.8%
3,400 Auspex Systems Inc.+................. 39,313
2,300 Hyperion Software Corporation+....... 37,950
6,200 Network General Corporation+......... 133,300
7,700 PLATINUM Technology, Inc.+........... 91,438
1,900 Viewlogic Systems, Inc.+............. 26,481
------------
328,482
------------
CONSTRUCTION -- 1.4%
1,800 Apogee Enterprises Inc. ............. 35,550
2,300 Continental Homes Holding
Corporation........................ 38,238
6,700 M.D.C. Holdings, Inc. ............... 61,975
7,100 Morrison Knudsen Corporation+........ 74,550
2,900 Ryland Group Inc. ................... 34,075
5,300 Southern Energy Homes+............... 54,988
3,700 Standard Pacific Corporation......... 23,125
2,000 Stone & Webster, Inc. ............... 73,500
2,300 TJ International Inc. ............... 43,700
4,700 Toll Brothers, Inc.+................. 85,775
2,700 U.S. Home Corporation+............... 68,513
------------
593,989
------------
CONSUMER GOODS -- DURABLE -- 1.8%
1,900 Boole & Babbage Inc.+................ 45,125
6,600 Fedders Corporation.................. 38,775
4,200 Kaman Corporation, Class A........... 56,700
3,200 La-Z Boy Inc. ....................... 109,600
6,400 Oakwood Homes Corporation............ 112,800
3,300 Royal Appliance Manufacturing
Company+........................... 18,975
4,800 Russ Berrie & Co., Inc. ............. 112,200
2,700 Smithfield Foods, Inc.+.............. 114,075
3,400 Sturm Ruger & Co., Inc. ............. 53,975
3,200 Thomas Industries Inc. .............. 75,200
------------
737,425
------------
CONSUMER GOODS -- NON-DURABLE -- 1.8%
2,300 ABM Industries Inc. ................. 42,838
2,700 ADVO Inc. ........................... 31,388
3,800 Air and Water Technologies
Corporation+....................... 19,000
1,100 Angelica Corporation................. 20,213
1,300 Fieldcrest Cannon Inc.+.............. 20,638
1,300 GoodMark Foods Inc. ................. 17,063
3,200 Interstate Bakeries Corporation...... 151,200
3,800 Kellwood Company..................... 95,000
3,200 Paragon Trade Brands, Inc+........... 53,600
1,300 Plenum Publishing Corporation........ 45,825
6,200 Richfood Holdings Inc. .............. 116,250
3,800 Wolverine World Wide Inc. ........... 138,700
------------
751,715
------------
CONTAINERS/PACKAGING -- 0.3%
2,700 AptarGroup, Inc. .................... 103,275
------------
CONVENIENCE STORE -- 0.2%
5,300 Casey's General Stores Inc. ......... 102,025
------------
COSMETICS AND TOILETRY -- 0.2%
2,300 Nature's Sunshine Products Inc. ..... 33,350
3,200 NBTY, Inc.+.......................... 48,400
------------
81,750
------------
DIVERSIFIED -- 1.5%
2,300 CLARCOR, Inc. ....................... 53,188
3,800 Core Industries, Inc. ............... 55,100
4,200 Figgie International, Inc.,
Class A+........................... 50,925
4,800 Justin Industries Inc. .............. 53,400
5,500 Sierra Pacific Resources............. 161,563
1,300 SPS Technologies, Inc.+.............. 87,750
1,900 Standex International Corporation.... 49,638
3,400 Triarc Companies, Inc.+.............. 59,500
1,900 Zero Corporation..................... 35,625
------------
606,689
------------
DRUGS -- 0.1%
2,700 U.S. Bioscience, Inc.+............... 31,388
1,104 Vitalink Pharmacy Services, Inc.+.... 22,214
------------
53,602
------------
ELECTRIC POWER -- 1.1%
2,300 Bangor HydroElectric Company......... 13,800
2,700 Central Vermont Public Service....... 29,025
2,000 CILCORP, Inc. ....................... 76,000
3,800 Commonwealth Energy System
Companies.......................... 79,325
2,300 Eastern Utilities Association........ 41,400
1,900 Green Mountain Power Corporation..... 44,175
2,034 Puget Sound Energy, Inc. ............ 51,359
3,400 TNP Enterprises, Inc. ............... 72,675
1,900 United Illuminating Company.......... 49,638
------------
457,397
------------
ELECTRICAL EQUIPMENT -- 1.8%
2,000 Fluke Corporation.................... 88,750
5,500 KEMET Corporation+................... 103,125
2,300 Kent Electronics Corporation+........ 52,900
4,750 Microchip Technology Inc.+........... 142,500
1,800 Pacific Scientific Co. .............. 22,275
2,300 Park Electrochemical Corporation..... 52,613
5,600 Rexel, Inc.+......................... 101,500
4,600 Tencor Instruments+.................. 166,175
------------
729,838
------------
ELECTRONICS -- 2.2%
3,200 Bell Industries Inc.+................ 57,600
1,600 Benchmark Electronics, Inc.+......... 46,800
3,800 Dallas Semiconductor Corporation..... 100,700
2,700 Dynatech Corporation+................ 81,000
2,000 Harmon Industries, Inc. ............. 34,125
1,100 InterVoice, Inc.+.................... 11,825
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
63
<PAGE> 66
NATIONS FUNDS
NATIONS MANAGED SMALLCAP INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
ELECTRONICS -- (CONTINUED)
2,000 Logicon, Inc. ....................... $ 70,750
5,000 Methode Electronics, Inc. ........... 70,000
2,300 Oak Industries, Inc.+................ 45,425
4,700 PictureTel Corporation+.............. 55,813
3,400 Pioneer Standard Electronics......... 43,350
2,300 Sanmina Corporation+................. 102,925
3,900 Vitesse Semiconductor Corporation+... 107,738
2,000 Wyle Electronics..................... 67,250
------------
895,301
------------
ENERGY -- 1.4%
4,600 Barrett Resources Corporation+....... 137,425
2,900 Box Energy Corporation, Class B
(non-voting)+...................... 19,938
3,500 Camco International Inc. ............ 154,000
6,000 Dames & Moore Inc. .................. 78,000
7,500 Tuboscope Vetco International
Corporation+....................... 102,188
1,800 United Cities Gas Company............ 41,400
3,300 Wiser Oil Company.................... 58,163
------------
591,114
------------
ENVIRONMENTAL -- 1.1%
1,100 IMCO Recycling, Inc. ................ 16,088
2,300 Ionics, Inc.+........................ 106,663
1,900 TETRA Technologies, Inc.+............ 41,800
9,500 U.S. Filter Corporation+............. 293,313
------------
457,864
------------
FINANCIAL SERVICES -- 9.1%
3,650 Alex Brown Inc. ..................... 155,125
3,800 AMRESCO Inc.+........................ 63,650
3,800 Astoria Financial Corporation........ 136,800
3,400 Centura Banks Inc. .................. 132,600
7,000 Charter One Financial, Inc. ......... 307,125
3,700 CMAC Investment Corporation.......... 123,488
3,300 Collective Bancorp, Inc. ............ 127,463
2,900 Commercial Federal Corporation....... 97,875
1,900 Eaton Vance Corporation
(non-voting)....................... 84,075
3,300 Enhance Financial Services Group..... 130,350
3,800 First Commercial Corporation......... 145,825
3,700 First Michigan Bank Corporation...... 111,925
2,700 Gallagher (Arthur J.) & Co. ......... 88,763
2,200 Interra Financial, Inc. ............. 76,450
1,400 JSB Financial Inc. .................. 59,500
3,800 Keystone Financial Inc. ............. 95,950
3,200 Legg Mason Inc. ..................... 135,200
1,100 Liberty Bancorp Inc. (Oklahoma)...... 51,150
2,700 Mark Twain Bancshares Inc. .......... 136,350
2,800 Mutual Risk Management............... 101,500
5,600 National Auto Credit Inc.+........... 51,800
3,500 North American Mortgage Company...... 71,313
1,900 Onbancorp Inc. ...................... 88,825
2,300 Piper Jaffray Companies Inc. ........ 31,912
5,600 Provident Bancorp.................... 197,400
7,200 Quick & Reilly Group, Inc. .......... 149,400
3,800 Raymond James Financial Inc. ........ 120,175
4,700 Riggs National Corporation........... 94,587
5,600 Roosevelt Financial Group Inc. ...... 121,800
1,900 SEI Corporation...................... 39,900
4,825 St. Paul Bancorp Inc. ............... 132,084
4,700 TCF Financial Corporation............ 186,237
2,700 Whitney Holding Corporation.......... 105,131
------------
3,751,728
------------
FOOD PRODUCERS -- 0.8%
8,900 Chiquita Brands International
Inc. .............................. 139,062
2,300 DEKALB Genetics Corporation,
Class B............................ 122,475
4,800 J&J Snack Foods Corporation+......... 61,200
------------
322,737
------------
FOOD RETAILERS -- 0.8%
1,400 Earthgrains Company.................. 70,000
3,300 Nash Finch Corporation............... 63,112
3,800 Rykoff-Sexton, Inc. ................. 66,975
3,400 Smith's Food & Drug Centers, Inc.,
Class B+........................... 116,450
1,400 Whole Foods Market, Inc.+............ 29,050
------------
345,587
------------
FURNITURE AND APPLIANCES -- 0.9%
2,000 Bassett Furniture.................... 48,000
3,200 Ethan Allen Interiors Inc. .......... 139,200
5,300 Interface Inc. ...................... 132,831
2,700 Juno Lighting Inc. .................. 42,862
1,100 Rival Company........................ 23,650
------------
386,543
------------
GAS AND ELECTRIC -- 0.7%
3,500 Central Hudson Gas & Electric........ 115,062
2,000 Interstate Power Company............. 58,250
3,300 Orange and Rockland Utilities,
Inc. .............................. 116,737
------------
290,049
------------
HEALTH CARE SERVICES -- 1.1%
3,400 Ballard Medical Products............. 70,975
1,900 Coherent, Inc.+...................... 90,844
4,400 Coventry Corporation+................ 50,050
2,000 Envoy Corporation+................... 46,750
3,200 GranCare Inc.+....................... 27,200
7,700 Omnicare, Inc. ...................... 180,950
------------
466,769
------------
INSURANCE -- 4.0%
2,750 ALLIED Group Inc. ................... 94,875
3,300 American Bankers Insurance Group
Inc. .............................. 160,875
3,200 Capital Re Corporation............... 136,400
1,960 Fidelity National Financial Inc. .... 23,520
2,900 First American Financial
Corporation........................ 108,025
5,500 Fremont General Corporation.......... 154,687
2,800 Frontier Insurance Group Inc. ....... 121,800
2,700 Life Re Corporation.................. 110,025
2,900 Orion Capital Corporation............ 179,075
4,700 Protective Life Corporation.......... 197,400
2,700 Selective Insurance Group............ 112,050
2,400 Sierra Health Services+.............. 60,900
1,100 Trenwick Group Inc. ................. 54,450
3,300 Washington National Corporation...... 91,987
2,300 Zenith National Insurance............ 61,812
------------
1,667,881
------------
IRON/STEEL -- 0.3%
2,000 Acme Metals, Inc.+................... 31,250
3,200 Birmingham Steel Corporation......... 56,000
3,200 Northwestern Steel & Wire Company+... 12,200
3,400 WHX Corporation+..................... 22,950
------------
122,400
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
64
<PAGE> 67
NATIONS FUNDS
NATIONS MANAGED SMALLCAP INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
MACHINERY AND EQUIPMENT -- 2.0%
8,800 AGCO Corporation..................... $ 243,100
3,500 Baldor Electric Company.............. 87,937
1,900 Flow International Corporation+...... 18,287
4,700 Global Industrial Technologies
Inc.+.............................. 81,075
2,900 Kuhlman Corporation.................. 67,425
3,500 Lindsay Manufacturing Co. ........... 114,625
2,000 Manitowic Inc. ...................... 72,250
3,400 Paxar Corporation+................... 65,875
3,200 Regal Beloit......................... 78,400
------------
828,974
------------
MANUFACTURING -- 0.4%
7,000 Griffon Corporation+................. 84,000
3,200 Insteel Industries, Inc. ............ 26,000
4,400 O'Sullivan Corporation............... 36,850
------------
146,850
------------
MEDICAL PRODUCTS AND SUPPLIES -- 2.1%
3,400 Collagen Corporation................. 67,150
3,300 IDEXX Laboratories Inc.+............. 46,200
2,000 Owens & Minor Inc. (New)............. 22,750
3,300 Patterson Dental Company+............ 112,200
2,800 Respironics, Inc.+................... 59,500
1,800 Safeskin Corporation+................ 32,625
3,300 Sola International, Inc.+............ 76,312
1,100 SpaceLabs Medical, Inc.+............. 22,137
4,800 STERIS Corporation+.................. 117,000
1,900 Sunrise Medical, Inc.+............... 24,700
6,600 Sybron International Corporation
(Wisconsin)+....................... 183,150
2,900 Tecnol Medical Products, Inc.+....... 45,675
1,900 Vital Signs, Inc. ................... 42,750
300 Zoll Medical Corporation+............ 2,812
------------
854,961
------------
MEDICAL SERVICES -- 3.2%
2,300 Express Scripts, Inc., Class A+...... 82,225
5,300 Genesis Health Ventures+............. 165,625
4,700 Integrated Health Services Inc. ..... 137,475
3,800 Invacare Corporation................. 89,300
3,800 Lincare Holdings Inc.+............... 156,750
3,300 Living Centers of America, Inc.+..... 113,850
1,900 Magellan Health Services Inc.+....... 46,787
4,200 Mariner Health Group, Inc.+.......... 37,012
6,600 PhyCor Inc.+......................... 179,850
5,300 Universal Health Services, Inc.,
Class B+........................... 174,237
5,600 Vivra Inc.+.......................... 151,200
------------
1,334,311
------------
METALS AND MINING -- 1.2%
5,300 AMCOL International Corporation...... 96,062
1,900 Castle (A.M.) & Company.............. 33,012
4,200 Commonwealth Aluminum Corporation.... 71,925
3,200 Couer D'Alene Mines Corporation
(Idaho)............................ 52,000
1,100 Getchell Gold Corporation+........... 44,687
3,400 Glamis Gold Ltd. .................... 26,775
2,000 Handy & Harman....................... 30,000
8,400 Hecla Mining Company+................ 49,350
2,300 Material Sciences Corporation+....... 38,812
3,200 Steel Technologies Inc. ............. 36,000
------------
478,623
------------
METAL PROCESSORS & FABRICATES -- 0.9%
2,900 Amcast Industrial Corporation........ 67,787
3,300 Mueller Industries, Inc.+............ 129,112
3,800 Quanex Corporation................... 95,475
3,200 Wolverine Tube, Inc.+................ 83,200
------------
375,574
------------
OFFICE EQUIPMENT AND SUPPLIES -- 0.1%
1,100 New England Business Service,
Inc. .............................. 28,325
------------
OIL AND GAS -- 1.5%
5,600 Cabot Oil & Gas Corporation.......... 98,000
5,100 Cross Timbers Oil Co. ............... 82,237
4,600 Devon Energy Corporation............. 138,000
1,100 St. Mary Land & Exploration.......... 28,325
4,600 United Meridian Corporation+......... 138,575
4,700 Vintage Petroleum Inc. .............. 141,000
------------
626,137
------------
OIL AND GAS -- EQUIPMENT AND
SERVICES -- 0.7%
4,800 Pool Energy Services Co.+............ 70,800
4,200 Pride Petroleum Services, Inc.+...... 87,150
1,600 Production Operators Corporation..... 90,600
1,600 Seitel, Inc.+........................ 56,600
------------
305,150
------------
OIL AND GAS -- EXPLORATION -- 1.6%
3,800 Benton Oil & Gas Company+............ 58,900
3,300 Energen Corporation.................. 98,175
4,700 HS Resources, Inc.+.................. 54,050
2,000 KCS Energy Inc. ..................... 65,750
12,800 Mesa Inc.+........................... 76,800
4,700 Pogo Producing Co. .................. 169,200
4,700 Snyder Oil Corporation............... 75,787
3,200 Southwestern Energy Company.......... 42,800
------------
641,462
------------
OIL AND GAS -- EXTRACTION -- 0.5%
5,800 New Field Exploration Company+....... 110,200
3,200 Oceaneering International, Inc.+..... 50,000
4,700 Plains Resources, Inc.+.............. 62,275
------------
222,475
------------
OIL -- DOMESTIC -- 0.7%
17,500 Noble Drilling Corporation+.......... 301,875
------------
PAPER AND FOREST PRODUCTS -- 0.5%
3,700 Caraustar Industries, Inc. .......... 92,037
2,700 Mosinee Paper Corporation............ 92,475
2,900 Pope & Talbot Inc. .................. 39,875
------------
224,387
------------
PHARMACEUTICALS -- 0.7%
4,600 ALPHARMA Inc., Class A............... 63,250
1,100 Cor Therapeutics, Inc.+.............. 10,450
3,800 North American Vaccine Inc.+......... 76,475
2,300 Noven Pharmaceuticals Inc.+.......... 20,700
3,200 Regeneron Pharmaceuticals, Inc.+..... 25,600
3,400 Syncor International Corporation+.... 31,025
1,900 Vertex Pharmaceuticals, Inc.+........ 76,475
------------
303,975
------------
PRINTING AND PUBLISHING -- 0.8%
3,800 Bowne & Co., Inc. ................... 103,075
2,900 Merrill Corporation.................. 69,600
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
65
<PAGE> 68
NATIONS FUNDS
NATIONS MANAGED SMALLCAP INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
PRINTING AND PUBLISHING -- (CONTINUED)
2,700 Thomas Nelson Publisher.............. $ 28,350
5,600 Valassis Communications, Inc.+....... 125,300
------------
326,325
------------
PROFESSIONAL SERVICES -- 1.3%
2,700 Catalina Marketing Corporation+...... 109,687
2,300 CDI Corporation+..................... 85,387
3,800 DeVRY, Inc.+......................... 83,600
3,800 Franklin Quest Company+.............. 80,275
3,300 National Data Corporation............ 116,737
3,200 Norrell Corporation.................. 78,800
------------
554,486
------------
RECREATION -- 2.2%
4,800 Arctic Cat Inc. ..................... 47,400
4,200 Aztar Corporation+................... 29,925
2,900 Bell Sports Corporation+............. 15,587
2,000 Carmike Cinemas, Inc., Class A+...... 57,250
1,900 GC Companies+........................ 74,575
5,500 Grand Casinos, Inc.+................. 51,562
5,600 Hollywood Park, Inc.+................ 72,100
4,700 Huffy Corporation.................... 64,625
1,900 K2 Inc. ............................. 47,262
3,421 Mattel, Inc. ........................ 82,112
2,300 Outboard Marine Inc. ................ 29,037
3,200 Players International Inc.+.......... 15,600
4,600 Regal Cinemas Inc.+.................. 124,200
2,000 Showboat, Inc. ...................... 39,500
2,900 Thor Industries, Inc. ............... 67,787
3,400 Winnebago Industries................. 23,375
3,300 WMS Industries, Inc.+................ 61,875
------------
903,772
------------
RESTAURANTS AND LODGING -- 2.0%
3,800 Applebee's International, Inc. ...... 91,675
4,600 CKE Restaurants Inc. ................ 101,775
7,500 Foodmaker, Inc.+..................... 75,937
1,900 IHOP Corporation+.................... 47,975
3,500 Luby's Cafeterias Inc. .............. 65,187
2,300 Marcus Corporation................... 50,312
5,600 Prime Hospitality Corporation+....... 87,500
4,700 Ruby Tuesday Inc. ................... 81,662
10,000 Ryan's Family Steak Houses, Inc.+.... 78,125
4,800 ShowBiz Pizza Time, Inc.+............ 84,000
2,000 Sonic Corporation+................... 27,250
2,900 Taco Cabana, Class A+................ 13,412
3,300 TCBY Enterprises, Inc. .............. 17,737
------------
822,547
------------
RETAIL -- DISCOUNT -- 0.9%
4,600 Filene's Basement Corporation+....... 31,050
8,800 Ross Stores, Inc. ................... 223,300
6,700 Shopko Stores, Inc. ................. 100,500
------------
354,850
------------
RETAIL -- GENERAL -- 1.1%
1,800 Arbor Drugs Inc. .................... 31,500
3,400 Carson Pirie Scott & Company+........ 104,975
8,400 Cash America International Inc. ..... 81,900
2,000 Damark International, Inc.,
Class A+........................... 21,000
3,700 MicroAge Inc.+....................... 49,950
4,600 Proffitt's, Inc.+.................... 173,650
------------
462,975
------------
RETAIL -- SPECIALTY -- 3.3%
5,600 Cato Corporation, Class A............ 32,200
10,000 CompUSA, Inc.+....................... 157,500
3,300 Designs, Inc.+....................... 18,562
3,300 Discount Auto Parts, Inc.+........... 52,800
5,500 Dress Barn, Inc.+.................... 92,812
3,800 Eagle Hardware & Garden, Inc.+....... 68,400
4,700 Fabri-Centers of America, Class A+... 87,537
2,000 Galoob Toys, Inc.+................... 37,000
2,300 Jumbosports, Inc.+................... 12,650
1,900 Mail Boxes Etc.+..................... 39,544
1,400 O'Reilly Automotive+................. 51,450
6,000 Pier 1 Imports, Inc. ................ 105,750
10,200 Premark International, Inc. ......... 202,725
2,300 Regis Corporation.................... 40,250
3,200 Stein Mart, Inc+..................... 91,200
1,300 Swiss Army Brands, Inc.+............. 16,250
5,800 The Sports Authority, Inc+........... 108,025
1,800 Toro Company......................... 61,200
3,300 Williams-Sonoma, Inc+................ 94,875
------------
1,370,730
------------
SAVINGS AND LOANS -- 0.8%
2,700 Coast Savings Financial Inc.+........ 106,987
5,300 Downey Financial Corporation......... 107,325
7,980 Sovereign Bancorp Inc. .............. 95,760
------------
310,072
------------
SEMICONDUCTORS -- 1.9%
2,800 Etec Systems, Inc.+.................. 88,550
7,000 International Rectifier
Corporation+....................... 83,125
2,300 Lattice Semiconductor Corporation+... 105,225
2,700 Novellus Systems, Inc.+.............. 186,300
1,600 Photronics, Inc.+.................... 47,000
1,100 Plexus Corporation+.................. 32,450
6,600 VLSI Technology Inc.+................ 114,262
2,000 Watkins-Johnson Company.............. 45,750
3,200 Zilog Inc.+.......................... 67,200
------------
769,862
------------
TECHNOLOGY -- 1.8%
4,200 Advanced Tissue Sciences, Inc.+...... 44,100
2,000 Amtech Corporation+.................. 12,500
3,300 BMC Industries....................... 93,225
2,000 Digital Microwave Corporation+....... 38,500
6,600 Komag Inc.+.......................... 200,475
2,700 Marshall Industries+................. 85,387
6,600 S3 Incorporated+..................... 85,800
5,300 Sterling Software Inc.+.............. 146,412
2,300 Telxon Corporation................... 35,075
2,900 Valence Technology, Inc+............. 18,306
------------
759,780
------------
TELECOMMUNICATIONS -- 0.7%
3,600 Allen Group, Inc.+................... 63,000
4,200 Aspect Telecommunications+........... 81,900
2,800 Centigram Communications
Corporation+....................... 28,175
2,000 CommNet Cellular, Inc.+.............. 51,000
3,400 Network Equipment Technologies,
Inc.+.............................. 45,900
------------
269,975
------------
TOBACCO -- 0.3%
5,600 DiMon Inc. .......................... 128,800
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
66
<PAGE> 69
NATIONS FUNDS
NATIONS MANAGED SMALLCAP INDEX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
<C> <S> <C>
TRANSPORTATION -- AIRLINES -- 1.4%
3,200 Air Express International
Corporation........................ $ 101,600
4,200 American Freightways Inc.+........... 58,537
6,200 Comair Holdings, Inc. ............... 134,850
4,200 Expeditors International of
Washington, Inc. .................. 100,800
5,500 Mesa Air Group, Inc.+................ 33,601
3,500 Offshore Logistics, Inc.+............ 56,000
3,500 Pittston Burlington Group............ 73,500
1,400 Skywest Inc. ........................ 18,200
------------
577,088
------------
TRANSPORTATION -- MARINE -- 0.2%
4,700 Kirby Corporation+................... 79,900
------------
TRANSPORTATION -- RAILROADS -- 0.2%
1,100 Railtex, Inc.+....................... 18,287
3,200 U.S. Freightways Corporation......... 82,800
------------
101,087
------------
TRUCKING AND SHIPPING -- 1.2%
2,000 Frozen Foods Express Industries...... 18,750
1,900 Heartland Express Inc.+.............. 36,100
1,800 Landstar System Inc.+................ 42,750
2,700 M.S. Carriers, Inc.+................. 45,731
8,300 Rollins Truck Leasing Corporation ... 109,975
7,100 Werner Enterprises Inc. ............. 133,125
6,600 Yellow Corporation+.................. 122,925
------------
509,356
------------
UTILITIES -- NATURAL GAS -- 2.4%
1,900 Atmos Energy Corporation............. 48,212
3,800 Cascade Natural Gas Corporation...... 59,850
3,400 Connecticut Energy Corporation....... 76,075
4,700 KN Energy, Inc. ..................... 185,650
2,300 New Jersey Resources Corporation..... 65,550
4,700 Northwest Natural Gas Company........ 115,150
300 Pennsylvania Enterprises, Inc. ...... 13,462
5,300 Piedmont Natural Gas Company, Inc. .. 121,900
3,200 Public Service Company of North
Carolina, Inc. .................... 57,200
3,700 Southwest Gas Corporation............ 64,287
2,000 Valmont Industries Inc. ............. 78,000
2,700 WICOR, Inc. ......................... 91,800
------------
977,136
------------
UTILITIES -- WATER -- 0.4%
1,900 Aquarion Company..................... 51,775
1,100 Consumers Water Company.............. 18,425
2,300 Philadelphia Suburban Corporation.... 35,937
1,900 Southern California Water Company.... 41,800
------------
147,937
------------
WIRE AND CABLE PRODUCTS -- 0.2%
6,700 Anixter International Inc.+.......... 82,912
------------
OTHER -- 2.0%
6,600 Allwaste Inc.+....................... 54,450
8,100 Corrections Corporation of
America+........................... 196,425
2,000 Dionex Corporation+.................. 91,000
2,700 Fisher Scientific International...... 119,137
2,300 Lydall, Inc.+........................ 46,575
4,800 Mississippi Chemical Corporation..... 114,600
3,400 OHM Corporation+..................... 26,775
4,600 Smith Corporation.................... 160,425
------------
809,387
------------
TOTAL COMMON STOCKS
(Cost $41,002,916)............... 39,044,637
============
<CAPTION>
PRINCIPAL
AMOUNT
-------
U.S. TREASURY BILL -- 0.1%
(Cost $49,545)
<C> <S> <C>
$ 50,000 5.400%** 06/05/1997.................. 49,545
============
TOTAL SECURITIES
(Cost $41,052,461)............... 39,094,182
============
REPURCHASE AGREEMENT -- 2.3%
(Cost $971,000)
971,000 Agreement with Smith Barney, 6.300%
dated 03/31/97, to be repurchased
at $971,170 on 04/01/97,
collateralized by: $971,002 U.S.
Government Agency Securities,
5.125% -- 8.740% due
03/04/98 -- 12/15/43............... 971,000
============
TOTAL INVESTMENTS
(Cost $42,023,461*)................... 97.0% 40,065,182
OTHER ASSETS AND LIABILITIES (NET)...... 3.0 1,224,681
----- ------------
NET ASSETS.............................. 100.0% $ 41,289,863
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes is $42,049,007.
** Rate represents annualized yield at date of purchase.
+ Non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS.
67
<PAGE> 70
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS
BALANCED EQUITY NATIONS MANAGED EQUITY
ASSETS INCOME VALUE INDEX INDEX
FUND FUND FUND FUND FUND
------------- -------------- --------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Note 1). See
accompanying schedules:
Securities............. $204,798,412 $356,842,311 $1,338,377,292 $43,369,495 $580,496,630
Repurchase
agreements........... 29,050,000 13,108,000 55,416,000 1,923,000 6,492,000
------------ ------------ --------------- ----------- ------------
Total investments...... 233,848,412 369,950,311 1,393,793,292 45,292,495 586,988,630
Cash.................... 255 1,331,967 256 648 756
Dividends receivable.... 261,736 717,476 2,402,519 64,005 919,217
Interest receivable..... 910,068 629,708 9,698 336 1,137
Receivable for Fund
shares sold............ 423,744 954,639 5,928,206 13,939 1,526,739
Receivable for
investment securities
sold................... 13,511,981 13,619,455 12,730,554 -- --
Unamortized
organization costs
(Note 6)............... 2,016 -- -- 8,289 2,500
Prepaid expenses and
other assets........... 2,560 4,809 3,060 74,747 4,650
------------ ------------ -------------- ----------- ------------
Total Assets........... 248,960,772 387,208,365 1,414,867,585 45,454,459 589,443,629
------------ ------------ -------------- ----------- ------------
LIABILITIES:
Variation margin/due to
broker (Note 1)........ -- -- -- -- 125,500
Payable for Fund
shares redeemed........ 26,462,637 11,055,829 7,033,953 82,153 13,887,810
Payable for investment
securities purchased... 6,449,229 7,515,261 1,046,271 -- --
Investment advisory fee
payable (Note 2)....... 156,780 224,351 929,229 -- 99,896
Administration fee
payable (Note 2)....... 20,904 33,145 123,897 3,771 51,931
Shareholder servicing
and distribution fees
payable (Note 3)....... 45,557 81,297 93,206 1,670 3,251
Transfer agent fees
payable (Note 2)....... -- -- 129,053 1,541 --
Custodian fees payable
(Note 2)............... 10,232 13,755 36,890 9,155 11,629
Accrued Trustees'/
Directors' fees
and expenses
(Note 2)............... 12,752 17,605 71,887 1,118 25,569
Accrued expenses and
other payables......... 5,823 57,606 140,744 7,471 120,250
------------ ------------ --------------- ----------- ------------
Total Liabilities...... 33,163,914 18,998,849 9,605,130 106,879 14,325,836
------------ ------------ -------------- ----------- ------------
NET ASSETS.............. $215,796,858 $368,209,516 $1,405,262,455 $45,347,580 $575,117,793
============ ============ ============== =========== ============
Investments, at cost.... $237,720,842 $352,177,595 $1,112,188,979 $42,411,847 $481,165,465
============ ============ ============== =========== ============
<CAPTION>
NATIONS
NATIONS NATIONS NATIONS MANAGED
DISCIPLINED CAPITAL EMERGING SMALLCAP
EQUITY GROWTH GROWTH INDEX
FUND FUND FUND FUND
-------------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Note 1). See
accompanying schedules:
Securities............. $125,491,371 $612,211,577 $290,201,988 $39,094,182
Repurchase
agreements........... 2,679,000 28,278,000 26,988,000 971,000
------------ ------------ ------------ ----------
Total investments...... 128,170,371 640,489,577 317,189,988 40,065,182
Cash.................... 150,376 751 729 546
Dividends receivable.... 210,466 636,876 70,278 26,039
Interest receivable..... 469 4,949 4,723 170
Receivable for Fund
shares sold............ 798,629 1,572,499 603,128 1,078,833
Receivable for
investment securities
sold................... -- 22,996,669 6,556,178 96,000
Unamortized
organization costs
(Note 6)............... -- 2,018 3,039 8,338
Prepaid expenses and
other assets........... 4,150 4,900 5,555 56,414
------------ ------------ ------------ -----------
Total Assets........... 129,334,461 665,708,239 324,433,618 41,331,522
------------ ------------ ------------ -----------
LIABILITIES:
Variation margin/due to
broker (Note 1)........ -- -- -- --
Payable for Fund
shares redeemed........ 227,230 46,133,092 1,480,815 8,372
Payable for investment
securities purchased... -- 5,278,816 5,475,810 --
Investment advisory fee
payable (Note 2)....... 88,517 445,228 216,117 --
Administration fee
payable (Note 2)....... 11,803 59,520 28,816 3,462
Shareholder servicing
and distribution fees
payable (Note 3)....... 20,307 49,719 34,514 112
Transfer agent fees
payable (Note 2)....... 8,660 -- 3,715 1,260
Custodian fees payable
(Note 2)............... 8,010 14,765 15,844 2,657
Accrued Trustees'/
Directors' fees
and expenses
(Note 2)............... 7,116 40,260 16,970 772
Accrued expenses and
other payables......... 41,691 1,228 41,123 25,024
----------- ----------- ------------ -----------
Total Liabilities...... 413,334 52,022,628 7,313,724 41,659
----------- ----------- ------------ -----------
NET ASSETS.............. $128,921,127 $613,685,611 $317,119,894 $41,289,863
=========== ============ ============ ===========
Investments, at cost.... $114,647,412 $548,664,730 $288,864,601 $42,023,461
============ ============ ============ ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
68
<PAGE> 71
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS S
BALANCED EQUITY NATIONS MANAGED EQUITY
ASSETS INCOME VALUE INDEX INDEX
FUND FUND FUND FUND FUND
----------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> < C>
NET ASSETS
CONSIST OF:
Undistributed net
investment income... $ 63,372 $ 146,073 $ 271,371 $ 59,744 $ --
Accumulated net
realized gain on
investments and
futures contracts... 19,990,411 29,953,178 70,649,301 660,404 222,159
Net unrealized
appreciation/
(depreciation) of
investments, futures
contracts and
foreign currency
transactions........ (3,872,430) 17,772,716 281,604,313 2,880,648 105,562,565
Paid-in capital...... 199,615,505 320,337,549 1,052,737,470 41,746,784 469,333,069
------------ ------------ -------------- ------------ ------------
$215,796,858 $368,209,516 $1,405,262,455 $45,347,580 $575,117,793
============ ============ ============== ============ ============
NET ASSETS:
Primary A Shares..... $135,730,709 $200,772,010 $1,200,852,871 $42,226,415 $567,038,603
============ ============ ============== ============ = ===========
Primary B Shares..... $ 5,537,396 $ 6,484,285 $ 27,585,954 $ -- $ 5,505,053
============ ============ ============== ============ ============
Investor A Shares.... $ 9,075,008 $ 47,890,884 $ 70,305,390 $ 3,038,053 $ 2,574,137
============ ============ ============== ============ ============
Investor C Shares.... $ 1,396,034 $ 5,007,205 $ 6,519,285 $ 83,112 $ --
============ ============ ============== ============ = ===========
Investor N Shares.... $ 64,057,711 $108,055,132 $ 99,998,955 $ -- $ --
============ ============ ============== ============ ============
SHARES OUTSTANDING:
Primary A Shares..... 12,173,156 16,319,824 67,201,871 3,551,012 35,678,412
============ ============ ============== ============ ============
Primary B Shares..... 497,230 527,388 1,543,745 -- 346,549
============ ============ ============== ============ ============
Investor A Shares... 815,367 3,906,169 3,934,764 255,406 162,252
============ ============ ============== ============ ============
Investor C Shares.... 125,997 405,405 367,293 6,987 --
============ ============ ============== ============ ============
Investor N Shares.... 5,764,977 8,821,776 5,615,167 -- --
============ ============ ============== ============ ============
PRIMARY A SHARES:
Net asset value,
offering and
redemption price
per share.......... $11.15 $12.30 $17.87 $11.89 $15.89
============ ============ ============== ============ ============
PRIMARY B
SHARES:
Net asset value,
offering and
redemption price
per share......... $11.14 $12.30 $17.87 N/A $15.89
============ ============ ============== ============ ============
INVESTOR A
SHARES:
Net asset value,
offering and
redemption price
per share......... $11.13 $12.26 $17.87 $11.89 $15.87
============ ============ ============== ============ ============
INVESTOR C
SHARES:
Net asset value
and offering
price per
share*............ $11.08 $12.35 $17.75 $11.90 N/A
============ ============ ============== ============ ============
INVESTOR N SHARES:
Net asset value,
offering and
redemption price
per share......... $11.11 $12.25 $17.81 N/A N/A
============ ============ ============== ============ ============
<CAPTION>
NATIONS
NATIONS NATION NATIONS MANAGED
DISCIPLINED CAPITAL EMERGING SMALLCA
EQUITY GROWTH GROWTH INDEX
FUND FUND FUND FUND
-------------- ------------ --------------- -----------
<S> <C> <C> <C> <C>
NET ASSETS
CONSIST OF:
Undistributed net
investment income... $ -- $ 99,716 $ -- $ 10,679
Accumulated net
realized gain on
investments and
futures contracts... 13,684,856 74,203,477 15,462,907 221,580
Net unrealized
appreciation/
(depreciation) of
investments, futures
contracts and
foreign currency
transactions........ 13,522,959 91,824,847 28,325,387 (1,958,279
Paid-in capital...... 101,713,312 447,557,571 273,331,600 43,015,883
------------ ------------ ------------ -----------
$128,921,127 $613,685,611 $317,119,894 $41,289,863
============ ============ ============ ===========
NET ASSETS:
Primary A Shares..... $100,259,674 $533,168,362 $267,318,717 $40,851,037
============ ============ ============ ===========
Primary B Shares..... $ 1,121,234 $ 12,367,439 $ 2,897,101 $ 86,386
============ ============ ============ ===========
Investor A Shares.... $ 6,836,963 $ 20,465,493 $ 12,125,648 $ 333,576
============ ============ ============ ===========
Investor C Shares.... $ 445,878 $ 5,751,615 $ 1,436,718 $ 18,864
============ ============ ============ ===========
Investor N Shares.... $ 20,257,378 $ 41,932,702 $ 33,341,710 $ --
============ ============ ============ ===========
SHARES OUTSTANDING:
Primary A Shares..... 5,427,263 45,564,624 20,794,029 4,156,769
============ ============ ============ ===========
Primary B Shares..... 60,699 1,058,403 226,103 8,788
============ ============ ============ ===========
Investor A Shares... 370,732 1,753,308 955,235 33,969
============ ============ ============ ===========
Investor C Shares.... 24,219 500,163 116,676 1,919
============ ============ ============ ===========
Investor N Shares.... 1,112,889 3,654,266 2,711,964 --
============ ============ ============ ===========
PRIMARY A SHARES:
Net asset value,
offering and
redemption price
per share.......... $18.47 $11.70 $12.86 $9.83
============ ============ ============ ===========
PRIMARY B
SHARES:
Net asset value,
offering and
redemption price
per share......... $18.47 $11.68 $12.81 $9.83
============ ============ ============ ===========
INVESTOR A
SHARES:
Net asset value,
offering and
redemption price
per share......... $18.44 $11.67 $12.69 $9.82
============ ============ ============ ===========
INVESTOR C
SHARES:
Net asset value
and offering
price per
share*............ $18.41 $11.50 $12.31 $9.83
============ ============ ============ ===========
INVESTOR N SHARES:
Net asset value,
offering and
redemption price
per share......... $18.20 $11.47 $12.29 N/A
============ ============ ============ ===========
</TABLE>
- --------------
*Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred ales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
69
<PAGE> 72
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS
BALANCED EQUITY NATIONS MANAGED EQUITY
ASSETS INCOME VALUE INDEX INDEX
FUND FUND FUND FUND(a) FUND
------------- ------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (Net of foreign
withholding taxes of $10,164,
$45,397, $16,406, $1,961, $46,515,
$5,681, $8,922, $0, and $18,
respectively)..................... $ 3,889,693 $ 9,968,866 $ 29,609,913 $ 393,817 $ 8,891,560
Interest........................... 6,464,206 5,581,414 2,871,749 83,454 878,545
------------ ------------ ------------ ---------- -----------
Total investment income........ 10,353,899 15,550,280 32,481,662 477,271 9,770,105
------------ ------------ ------------ ---------- -----------
EXPENSES:
Investment advisory
fee (Note 2)...................... 1,798,693 2,632,510 9,794,835 98,583 2,212,696
Administration fee (Note 2)........ 239,826 388,686 1,305,977 19,717 442,539
Transfer agent fees (Note 2)....... 171,473 268,162 981,631 3,886 5,837
Custodian fees (Note 2)............ 53,804 65,800 151,458 21,731 152,312
Legal and audit fees............... 40,403 56,379 164,032 12,313 62,675
Registration and filing fees....... 63,284 79,501 116,902 46,562 136,954
Trustees'/Directors' fees and
expenses (Note 2)................. 10,883 12,132 64,500 1,307 27,035
Amortization of organization
costs (Note 6).................... 4,033 1,581 -- 921 1,500
Interest expense (Note 7).......... -- -- -- -- --
Other.............................. 28,736 35,554 119,319 2,723 41,494
------------ ------------ ------------ ---------- -----------
Subtotal........................ 2,411,135 3,540,305 12,698,654 207,743 3,083,042
Shareholder servicing and
distribution fees (Note 3):
Primary B Shares.................. 11,195 12,732 68,981 -- 11,257
Investor A Shares................. 18,910 110,224 156,086 1,928 1,758
Investor C Shares................. 6,359 23,987 27,161 75 --
Investor N Shares................. 491,843 804,639 719,462 -- --
Fees waived and expenses reimbursed
by investment adviser (Note 2).... -- -- -- (109,134) (1,534,132)
------------ ------------ ------------ ---------- -----------
Total Expenses................. 2,939,442 4,491,887 13,670,344 100,612 1,561,925
Fees reduced by credits allowed
by the custodian (Note 2)......... (2,869) (3,340) (1,886) (100) (709)
------------ ------------ ------------ ---------- -----------
Net expenses.................. 2,936,573 4,488,547 13,668,458 100,512 1,561,216
------------ ------------ ------------ ---------- -----------
NET
INVESTMENT
INCOME/(LOSS)..................... 7,417,326 11,061,733 18,813,204 376,759 8,208,889
------------ ------------ ------------ ---------- -----------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS
(NOTES 1 AND 4):
Net realized gain/(loss)
from: Security transactions....... 35,946,666 74,322,566 146,169,597 507,289 (775,329)
Forward foreign currency
contracts and foreign currency
transactions...................... -- 191 -- 3 (13)
Futures contracts................. -- -- -- 153,115 2,884,440
------------ ------------ ------------ ---------- -----------
Net realized gain on investments
during the period................. 35,946,666 74,322,757 146,169,597 660,407 2,109,098
------------ ------------ ------------ ---------- -----------
Change in unrealized appreciation/
(depreciation) of: Securities..... (15,894,144) (29,303,625) 51,368,916 2,880,648 65,320,579
Futures contracts................. -- -- -- -- (255,075)
Foreign currency and other assets
and liabilities................. -- (81) -- -- --
------------ ------------ ------------ ---------- -----------
Net unrealized appreciation/
(depreciation) of investments
during the period................. (15,894,144) (29,303,706) 51,368,916 2,880,648 65,065,504
------------ ------------ ------------ ---------- -----------
Net realized and unrealized
gain/(loss) on investments........ 20,052,522 45,019,051 197,538,513 3,541,055 67,174,602
------------ ------------ ------------ ---------- -----------
NET INCREASE/(DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS................... $ 27,469,848 $ 56,080,784 $216,351,717 $3,917,814 $75,383,491
============ ============ ============ ========== ===========
<CAPTION>
NATIONS
NATIONS NATIONS NATIONS MANAGED
DISCIPLINED CAPITAL EMERGING SMALLCAP
EQUITY GROWTH GROWTH INDEX
FUND FUND FUND FUND(b)
------------- -------------- --------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (Net of foreign
withholding taxes of $10,164,
$45,397, $16,406, $1,961, $46,515,
$5,681, $8,922, $0, and $18,
respectively)..................... $ 2,273,710 $ 9,236,507 $ 964,738 $ 93,675
Interest........................... 177,873 1,073,253 1,603,874 46,267
----------- ------------ ------------ -----------
Total investment income........ 2,451,583 10,309,760 2,568,612 139,942
----------- ------------ ------------ -----------
EXPENSES:
Investment advisory
fee (Note 2)...................... 1,064,026 5,714,094 2,666,535 45,003
Administration fee (Note 2)........ 141,870 761,879 355,538 9,001
Transfer agent fees (Note 2)....... 108,628 530,689 250,485 2,655
Custodian fees (Note 2)............ 30,111 100,329 63,759 8,357
Legal and audit fees............... 24,728 98,752 51,189 8,276
Registration and filing fees....... 80,985 36,607 63,490 31,733
Trustees'/Directors' fees and
expenses (Note 2)................. 6,144 30,986 15,001 820
Amortization of organization
costs (Note 6).................... -- 4,035 4,559 926
Interest expense (Note 7).......... 5,587 2,100 -- --
Other.............................. 16,517 43,438 31,370 1,876
----------- ------------ ------------ -----------
Subtotal........................ 1,478,596 7,322,909 3,501,926 108,647
Shareholder servicing and
distribution fees (Note 3):
Primary B Shares.................. 3,398 31,200 4,813 118
Investor A Shares................. 16,233 51,581 27,530 128
Investor C Shares................. 1,819 23,295 5,557 16
Investor N Shares................. 195,401 432,285 364,059 --
Fees waived and expenses reimbursed
by investment adviser (Note 2).... -- -- -- (63,609)
----------- ------------ ------------ -----------
Total Expenses................. 1,695,447 7,861,270 3,903,885 45,300
Fees reduced by credits allowed
by the custodian (Note 2)......... -- -- (5,686) --
----------- ------------ ------------ -----------
Net expenses.................. 1,695,447 7,861,270 3,898,199 45,300
----------- ------------ ------------ -----------
NET
INVESTMENT
INCOME/(LOSS)..................... 756,136 2,448,490 (1,329,587) 94,642
----------- ------------ ------------ -----------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS
(NOTES 1 AND 4):
Net realized gain/(loss)
from: Security transactions....... 25,522,798 186,162,170 34,454,446 232,675
Forward foreign currency
contracts and foreign currency
transactions...................... -- -- -- --
Futures contracts................. -- -- -- (11,095)
----------- ------------ ------------ -----------
Net realized gain on investments
during the period................. 25,522,798 186,162,170 34,454,446 221,580
----------- ------------ ------------ -----------
Change in unrealized appreciation/
(depreciation) of: Securities..... (3,229,620) (73,539,048) (30,383,696) (1,958,279)
Futures contracts................. -- -- -- --
Foreign currency and other assets
and liabilities................. -- -- -- --
----------- ------------ ------------ -----------
Net unrealized appreciation/
(depreciation) of investments
during the period................. (3,229,620) (73,539,048) (30,383,696) (1,958,279)
----------- ------------ ------------ -----------
Net realized and unrealized
gain/(loss) on investments........ 22,293,178 112,623,122 4,070,750 (1,736,699)
----------- ------------ ------------ -----------
NET INCREASE/(DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS................... $23,049,314 $115,071,612 $ 2,741,163 $(1,642,057)
=========== ============ ============ ===========
</TABLE>
- ------------
(a) The Nations Managed Index Fund commenced operations on July 31, 1996.
(b) The Nations Managed SmallCap Index Fund commenced operations on October 15,
1996.
SEE NOTES TO FINANCIAL STATEMENTS.
70
<PAGE> 73
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS NATIONS NATIONS
BALANCED EQUITY NATIONS MANAGED EQUITY DISCIPLINED CAPITAL
ASSETS INCOME VALUE INDEX INDEX EQUITY GROWTH
FUND FUND FUND FUND(a) FUND FUND FUND
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net investment income/
(loss).................. $ 7,417,326 $ 11,061,733 $ 18,813,204 $ 376,759 $ 8,208,889 $ 756,136 $ 2,448,490
Net realized gain on
investments............. 35,946,666 74,322,757 146,169,597 660,407 2,109,098 25,522,798 186,162,170
Change in unrealized
appreciation/(depreciation)
of investments.......... (15,894,144) (29,303,706) 51,368,916 2,880,648 65,065,504 (3,229,620) (73,539,048)
------------ ------------ -------------- ----------- ------------ ------------ -------------
Net increase/(decrease)
in net assets resulting
from operations......... 27,469,848 56,080,784 216,351,717 3,917,814 75,383,491 23,049,314 115,071,612
Distributions to
shareholders from net
investment income:
Primary A Shares........ (5,399,863) (6,913,427) (17,054,950) (346,136) (8,239,169) (812,678) (2,456,103)
Primary B Shares........ (79,708) (64,743) (141,517) -- (25,680) (1,649) --
Investor A Shares....... (248,137) (1,325,087) (810,737) (14,348) (12,723) (32,042) (32,258)
Investor C Shares....... (36,108) (129,443) (58,256) (235) -- (61) --
Investor N Shares....... (1,668,470) (2,623,184) (736,681) -- -- -- --
Distributions to
shareholders in excess
of net investment
income:
Primary A Shares........ -- -- -- -- -- -- --
Primary B Shares........ -- -- -- -- -- -- --
Investor A Shares....... -- -- -- -- -- -- --
Investor C Shares....... -- -- -- -- -- -- --
Investor N Shares....... -- -- -- -- -- -- --
Distributions to
shareholders from net
realized gain on
investments:
Primary A Shares........ (20,247,211) (37,718,705) (90,693,794) -- (1,840,430) (9,585,919) (157,141,909)
Primary B Shares........ (349,059) (364,882) (1,455,500) -- (5,984) (91,846) (1,860,901)
Investor A Shares....... (913,264) (7,574,248) (5,016,860) -- (859) (528,226) (5,044,758)
Investor C Shares....... (164,110) (811,608) (428,414) -- -- (30,729) (1,078,436)
Investor N Shares....... (8,113,431) (18,346,111) (7,458,038) -- -- (1,571,314) (10,035,157)
Net increase/(decrease)
in net assets from Fund
share transactions:
Primary A Shares........ (21,867,306) (71,958,670) 121,967,391 38,677,375 309,726,636 (24,812,393) (253,994,363)
Primary B Shares........ 5,736,112 6,594,237 26,709,258 -- 5,186,022 1,089,022 13,807,295
Investor A Shares....... 3,120,407 7,946,497 11,536,708 3,027,866 2,463,849 1,668,358 4,824,423
Investor C Shares....... 262,475 673,023 1,479,950 85,234 -- 142,101 2,759,406
Investor N Shares....... 867,166 10,359,559 4,280,295 -- -- 552,434 6,554,887
------------ ------------ -------------- ----------- ------------ ------------ -------------
Net increase/(decrease)
in net assets........... (21,630,659) (66,176,008) 258,470,572 45,347,570 382,635,153 (10,965,628) (288,626,262)
NET ASSETS:
Beginning of period...... 237,427,517 434,385,524 1,146,791,883 10 192,482,640 139,886,755 902,311,873
------------ ------------ -------------- ----------- ------------ ------------ -------------
End of period............ $215,796,858 $368,209,516 $1,405,262,455 $45,347,580 $575,117,793 $128,921,127 $ 613,685,611
============ ============ ============== =========== ============ ============ =============
Undistributed net
investment income at end
of period............... $ 63,372 $ 146,073 $ 271,371 $ 59,744 $ -- $ -- $ 99,716
============ ============ ============== =========== ============ ============ =============
<CAPTION>
NATIONS
EMERGING SMALLCAP
GROWTH INDEX
FUND FUND(b)
----------------------------
<S> <C> <C>
Net investment income/
(loss).................. $ (1,329,587) $ 94,642
Net realized gain on
investments............. 34,454,446 221,580
Change in unrealized
appreciation/(depreciati
of investments.......... (30,383,696) (1,958,279)
------------ -----------
Net increase/(decrease)
in net assets resulting
from operations......... 2,741,163 (1,642,057)
Distributions to
shareholders from net
investment income:
Primary A Shares........ -- (94,006)
Primary B Shares........ -- (116)
Investor A Shares....... -- (505)
Investor C Shares....... -- (15)
Investor N Shares....... -- --
Distributions to
shareholders in excess
of net investment
income:
Primary A Shares........ -- (1,585)
Primary B Shares........ -- (5)
Investor A Shares....... -- (9)
Investor C Shares....... -- --
Investor N Shares....... -- --
Distributions to
shareholders from net
realized gain on
investments:
Primary A Shares........ (27,305,634) --
Primary B Shares........ (59,072) --
Investor A Shares....... (1,061,416) --
Investor C Shares....... (97,646) --
Investor N Shares....... (3,332,013) --
Net increase/(decrease)
in net assets from Fund
share transactions:
Primary A Shares........ (4,477,335) 42,567,497
Primary B Shares........ 3,259,671 91,010
Investor A Shares....... 5,544,043 349,649
Investor C Shares....... 635,028 19,995
Investor N Shares....... 1,782,278 --
------------ -----------
Net increase/(decrease)
in net assets........... (22,370,933) 41,289,853
NET ASSETS:
Beginning of period...... 339,490,827 10
------------ -----------
End of period............ $317,119,894 $41,289,863
------------ -----------
Undistributed net
investment income at end
of period............... $ -- $ 10,679
============ ===========
</TABLE>
- ---------------
(a) The Nations Managed Index Fund commenced operations on July 31, 1996.
(b) The Nations Managed SmallCap Index Fund commenced operations on October 15,
1996.
SEE NOTES TO FINANCIAL STATEMENTS.
71
<PAGE> 74
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS NATIONS NATIONS
BALANCED EQUITY NATIONS EQUITY DISCIPLINED CAPITAL EMERGING
ASSETS INCOME VALUE INDEX EQUITY GROWTH GROWTH
FUND(a) FUND(b) FUND(a) FUND(a) FUND(a) FUND(a) FUND(a)
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net investment
income/(loss)............... $ 2,118,467 $ 9,147,500 $ 4,594,009 $ 1,072,075 $ 310,095 $ 981,527 $ (182,595)
Net realized gain on
investments................. 14,455,458 30,003,301 29,675,624 834,284 48,753 47,329,423 15,075,593
Change in unrealized
appreciation/(depreciation)
of investments.............. (5,436,802) 29,185,348 42,735,333 8,778,670 3,017,862 (21,206,435) 15,018,790
------------ ------------ ------------- ----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations... 11,137,123 68,336,149 77,004,966 10,685,029 3,376,710 27,104,515 29,911,788
Distributions to shareholders
from net investment income:
Primary A Shares............ (2,467,317) (8,311,787) (7,025,227) (1,562,737) (296,322) (1,419,446) --
Investor A Shares........... (80,162) (1,066,734) (305,858) (409) (8,626) (8,022) --
Investor C Shares........... (12,721) (92,984) (15,847) -- -- -- --
Investor N Shares........... (748,956) (2,055,224) (311,522) -- -- -- --
Distributions to shareholders
from net realized gain on
investments:
Primary A Shares............ (18,117,978) (7,936,013) (36,610,566) (1,570,449) (1,539,467) (71,272,931) (28,361,668)
Investor A Shares........... (595,662) (1,171,580) (1,870,135) (121) (47,181) (1,406,184) (619,620)
Investor C Shares........... (111,125) (131,358) (161,172) -- (4,072) (279,954) (87,424)
Investor N Shares........... (7,278,939) (2,870,773) (3,233,929) -- (232,704) (3,421,039) (3,491,112)
Net increase/(decrease) in net
assets from Fund share
transactions:
Primary A Shares............ 13,795,014 (29,783,390) 18,468,272 39,816,491 5,483,120 19,219,932 28,496,495
Investor A Shares........... 1,387,867 2,761,972 4,616,735 82,377 1,442,029 2,447,353 2,020,515
Investor C Shares........... 272,530 (156,882) 331,035 -- (41,211) 515,851 137,265
Investor N Shares........... 5,507,130 18,595,995 2,911,585 -- 1,386,136 2,510,778 3,081,992
------------ ------------ ------------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net
assets...................... 2,686,804 36,117,391 53,798,337 47,450,181 9,518,412 (26,009,147) 31,088,231
NET ASSETS:
Beginning of period........... 234,740,713 398,268,133 1,092,993,546 145,032,459 130,368,343 928,321,020 308,402,596
------------ ------------ ------------- ----------- ----------- ----------- -----------
End of period................. $237,427,517 $434,385,524 $1,146,791,883 $192,482,640 $139,886,755 $902,311,873 $339,490,827
============ ============ ============== ============ ============ ============ ============
Undistributed net investment
income at end of period..... $ 133,734 $ 163,990 $ 260,308 $ 68,696 $ 90,294 $ 139,587 $ --
============ ============ ============== ============ ============ ============ ============
</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.
72
<PAGE> 75
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY
<TABLE>
<CAPTION>
NATIONS BALANCED ASSETS FUND NATIONS EQUITY INCOME FUND
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
MARCH 31, 1997(c) MARCH 31, 1996(a) MARCH 31, 1997(c) MARCH 31, 1996(b)
------------------------- ------------------------- --------------------------- -------------------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
===============================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRIMARY A
SHARES:
Sold.......... 3,829,498 $ 44,702,059 1,627,504 $19,005,092 5,493,997 $ 70,367,708 3,718,032 $ 46,321,022
Issued as
reinvestment
of
dividends... 2,138,736 24,087,846 1,460,066 16,518,081 1,788,758 22,091,931 496,722 6,174,413
Redeemed...... (7,888,635) (90,657,211) (1,866,524) (21,728,159) (12,511,675) (164,418,309) (6,643,314) (82,278,825)
---------- ------------ ---------- ----------- ----------- ------------ ---------- -----------
Net
increase/
(decrease).. (1,920,401) $(21,867,306) 1,221,046 $13,795,014 (5,228,920) $(71,958,670) (2,428,560) $(29,783,390)
========== ============ ========== =========== =========== ============ ========== ===========
PRIMARY B
SHARES:
Sold.......... 547,555 $ 6,317,399 581,119 $ 7,285,073
Issued as
reinvestment
of
dividends... 4,338 48,794 10,429 127,760
Redeemed...... (54,663) (630,081) (64,160) (818,596)
---------- ------------ ---------- ------------
Net
increase.... 497,230 $ 5,736,112 527,388 $ 6,594,237
========== ============ ========== ============
INVESTOR A
SHARES:
Sold.......... 319,807 $ 3,637,712 79,026 $ 917,766 681,422 $ 8,856,816 563,095 $ 6,929,846
Issued as
reinvestment
of
dividends... 101,995 1,144,997 59,206 669,237 682,371 8,392,448 172,862 2,135,967
Redeemed...... (144,535) (1,662,302) (16,962) (199,136) (707,574) (9,302,767) (503,098) (6,303,841)
---------- ----------- ---------- ----------- ---------- ------------ ---------- -----------
Net
increase.... 277,267 $ 3,120,407 121,270 $ 1,387,867 656,219 $ 7,946,497 232,859 $ 2,761,972
========== ============ ========== ============ ========== ============= ========== ============
INVESTOR C
SHARES:
Sold.......... 32,683 $ 379,832 17,356 $ 204,071 81,457 $ 1,089,046 51,611 $ 639,206
Issued as
reinvestment
of
dividends... 17,917 200,277 10,995 123,846 75,113 929,638 16,403 204,720
Redeemed...... (26,954) (317,634) (4,725) (55,387) (100,800) (1,345,661) (79,843) (1,000,808)
---------- ----------- ---------- ----------- ---------- ------------ ---------- -----------
Net
increase/
(decrease).. 23,646 $ 262,475 23,626 $ 272,530 55,770 $ 673,023 (11,829) $ (156,882)
========== ============ ========== ============ ========== ============= ========== ============
INVESTOR N
SHARES:
Sold.......... 132,981 $ 1,549,286 82,001 $ 983,660 347,847 $ 4,549,473 1,897,032 $ 23,134,481
Issued as
reinvestment
of
dividends... 852,851 9,553,149 690,732 7,789,521 1,645,356 20,181,935 377,701 4,668,166
Redeemed...... (881,717) (10,235,269) (280,373) (3,266,051) (1,111,287) (14,371,849) (740,696) (9,206,652)
---------- ----------- ---------- ----------- ---------- ------------ ---------- -----------
Net
increase.... 104,115 $ 867,166 492,360 $ 5,507,130 881,916 $ 10,359,559 1,534,037 $ 18,595,995
========== ============ ========== ============ ========== ============= ========== ============
</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 Balanced Assets Fund's and Nations Equity Income Fund's Primary B
Shares commenced operations on June 28, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
73
<PAGE> 76
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
NATIONS MANAGED
NATIONS VALUE FUND INDEX FUND
YEAR ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 1997(b) MARCH 31, 1996(a) MARCH 31, 1997(c)
------------------------------ ---------------------------- --------------------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................... 29,322,532 $ 511,605,757 5,163,241 $ 83,903,398 3,689,780 $40,404,536
Issued as reinvestment of
dividends............... 3,289,592 58,525,164 772,660 12,302,609 26,353 308,705
Redeemed.................. (25,604,738) (448,163,530) (4,762,096) (77,737,735) (165,121) (2,035,866)
----------- ------------- ---------- ------------ --------- -----------
Net increase.............. 7,007,386 $ 121,967,391 1,173,805 $ 18,468,272 3,551,012 $38,677,375
=========== ============= ========== ============ ========= ===========
PRIMARY B SHARES:
Sold...................... 1,816,714 $ 31,661,762
Issued as reinvestment of
dividends............... 43,152 768,906
Redeemed.................. (316,121) (5,721,410)
----------- -------------
Net increase.............. 1,543,745 $ 26,709,258
=========== =============
INVESTOR A SHARES:
Sold...................... 1,008,873 $ 17,617,492 319,822 $ 5,256,765 262,757 $ 3,116,171
Issued as reinvestment of
dividends............... 313,372 5,573,438 132,526 2,100,814 1,165 14,151
Redeemed.................. (661,226) (11,654,222) (167,588) (2,740,844) (8,516) (102,456)
----------- ------------- ---------- ------------ --------- -----------
Net increase.............. 661,019 $ 11,536,708 284,760 $ 4,616,735 255,406 $ 3,027,866
=========== ============= ========== ============ ========= ===========
INVESTOR C SHARES:
Sold...................... 175,986 $ 3,020,176 11,386 $ 184,896 7,424 $ 90,744
Issued as reinvestment of
dividends............... 27,497 485,883 11,236 176,989 33 392
Redeemed.................. (116,991) (2,026,109) (1,872) (30,850) (470) (5,902)
----------- ------------- ---------- ------------ --------- -----------
Net increase.............. 86,492 $ 1,479,950 20,750 $ 331,035 6,987 $ 85,234
=========== ============= ========== ============ ========= ===========
INVESTOR N SHARES:
Sold...................... 487,075 $ 8,412,470 158,863 $ 2,584,045
Issued as reinvestment of
dividends............... 455,824 8,073,126 220,922 3,487,288
Redeemed.................. (697,591) (12,205,301) (193,665) (3,159,748)
----------- ------------- ---------- ------------
Net increase.............. 245,308 $ 4,280,295 186,120 $ 2,911,585
=========== ============= ========== ============
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Nations Value Fund's Primary B Shares commenced operations on June 28, 1996.
(c) Nations Managed Index Fund commenced operations on July 31, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
74
<PAGE> 77
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
NATIONS EQUITY INDEX FUND NATIONS DISCIPLINED EQUITY FUND
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
MARCH 31, 1997(b) MARCH 31, 1996(a) MARCH 31, 1997(b) MARCH 31, 1996(a)
--------------------------- ------------------------- ------------------------- -----------------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
=============================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............ 40,225,078 $ 580,368,542 3,799,411 $ 51,306,974 1,043,144 $ 19,363,107 911,868 $ 15,134,115
Issued as
reinvestment
of
dividends..... 517,996 7,964,898 149,543 1,957,962 269,533 5,025,966 28,609 471,692
Redeemed........ (19,227,462) (278,606,804) (1,015,063) (13,448,445) (2,662,039) (49,201,466) (606,825) (10,122,687)
----------- ------------ --------- ------------ --------- ------------ -------- ------------
Net
increase/
(decrease)... 21,515,612 $309,726,636 2,933,891 $39,816,491 (1,349,362) $(24,812,393) 333,652 $ 5,483,120
=========== ============ ========= ============ ========== ============ ======== ============
PRIMARY B SHARES:
Sold............ 663,406 $ 10,427,520 72,997 $ 1,321,229
Issued as
reinvestment
of
dividends..... 1,599 25,530 1,078 20,122
Redeemed........ (318,456) (5,267,028) (13,376) (252,329)
----------- ------------ --------- ------------
Net increase.... 346,549 $ 5,186,022 60,699 $ 1,089,022
=========== ============ ========= ============
INVESTOR A SHARES:
Sold............ 333,277 $ 5,286,564 6,381 $ 85,961 193,255 $ 3,454,199 100,461 $ 1,696,841
Issued as
reinvestment
of
dividends..... 866 13,492 40 530 29,576 548,264 3,205 52,884
Redeemed........ (178,866) (2,836,207) (311) (4,114) (127,280) (2,334,105) (18,305) (307,696)
----------- ------------ --------- ------------ --------- ------------ -------- ------------
Net increase.... 155,277 $ 2,463,849 6,110 $ 82,377 95,551 $ 1,668,358 85,361 $ 1,442,029
=========== ============ ========= ============ ========= ============ ======== ============
INVESTOR C SHARES:
Sold............ 8,434 $ 156,195 5,687 $ 97,764
Issued as
reinvestment
of
dividends..... 1,658 30,790 249 4,072
Redeemed........ (2,437) (44,884) (8,353) (143,047)
--------- ------------ -------- ------------
Net
increase/
(decrease)... 7,655 $ 142,101 (2,417) $ (41,211)
========= ============ ======== ============
INVESTOR N SHARES:
Sold............ 152,010 $ 2,744,026 125,083 $ 2,067,580
Issued as
reinvestment
of
dividends..... 83,821 1,541,463 14,132 230,061
Redeemed........ (206,188) (3,733,055) (54,982) (911,505)
--------- ------------ -------- ------------
Net increase.... 29,643 $ 552,434 84,233 $ 1,386,136
========= ============ ======== ============
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Nations Equity Index Fund's and Nations Disciplined Equity Fund's Primary B
Shares commenced operations on June 28, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
75
<PAGE> 78
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
NATIONS CAPITAL GROWTH FUND NATIONS EMERGING GROWTH FUND
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
MARCH 31, 1997(b) MARCH 31, 1996(a) MARCH 31, 1997(b) MARCH 31, 1996(a)
--------------------------- ------------------------- -------------------------- -------------------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRIMARY A
SHARES:
Sold......... 15,753,137 $ 192,039,483 6,424,814 $ 84,086,502 6,690,635 $ 96,565,776 2,658,154 $ 34,716,876
Issued in
exchange
for Primary
A Shares of
the
Peachtree
Equity Fund
(Note 9)... 6,613,086 95,758,235 -- -- -- -- -- --
Issued as
reinvestment
of
dividends... 2,411,051 13,926,195 2,017,491 26,088,676 1,250,998 17,241,100 325,489 4,156,484
Redeemed..... (41,713,535) (555,718,276) (6,830,234) (90,955,246) (8,214,473) (118,284,211) (792,108) (10,376,865)
----------- ------------- ---------- ------------ ---------- ------------- --------- -----------
Net
increase/
(decrease).. (16,936,261) $(253,994,363) 1,612,071 $19,219,932 (272,840) $ (4,477,335) 2,191,535 $ 28,496,495
=========== ============= ========= =========== ======== ============ ========= ============
PRIMARY B
SHARES:
Sold......... 1,263,951 $ 16,621,006 245,436 $ 3,520,560
Issued as
reinvestment
of
dividends... 107,692 1,306,298 3,291 45,259
Redeemed..... (313,240) (4,120,009) (22,624) (306,148)
----------- ------------- ---------- -------------
Net
increase... 1,058,403 $ 13,807,295 226,103 $ 3,259,671
=========== ============= ========== =============
INVESTOR A
SHARES:
Sold......... 530,791 $ 7,132,768 172,211 $ 2,283,677 546,489 $ 7,824,718 140,607 $ 1,866,999
Issued as
reinvestment
of
dividends... 374,048 4,532,192 96,898 1,250,258 77,403 1,054,366 43,193 546,812
Redeemed..... (517,176) (6,840,537) (82,799) (1,086,582) (229,441) (3,335,041) (29,783) (393,296)
----------- ------------- ---------- ------------ ---------- ------------- --------- -----------
Net
increase... 387,663 $ 4,824,423 186,310 $ 2,447,353 394,451 $ 5,544,043 154,017 $ 2,020,515
=========== ============= ========== ============ ========== ============= ========== ============
INVESTOR C
SHARES:
Sold......... 267,345 $ 3,391,862 27,178 $ 357,906 68,305 $ 936,567 4,050 $ 52,274
Issued as
reinvestment
of
dividends... 90,327 1,077,600 21,940 279,954 7,368 97,347 7,063 87,224
Redeemed..... (133,084) (1,710,056) (9,283) (122,009) (27,993) (398,886) (191) (2,233)
----------- ------------- ---------- ------------ ---------- ------------- --------- -----------
Net
increase... 224,588 $ 2,759,406 39,835 $ 515,851 47,680 $ 635,028 10,922 $ 137,265
=========== ============= ========== ============ ========== ============= ========= ============
INVESTOR N
SHARES:
Sold......... 170,735 $ 2,258,704 77,138 $ 996,095 269,650 $ 3,748,488 73,737 $ 949,462
Issued as
reinvestment
of
dividends... 829,556 9,896,604 259,521 3,353,011 247,739 3,275,603 275,050 3,410,621
Redeemed..... (430,513) (5,600,421) (140,659) (1,838,328) (376,980) (5,241,813) (100,262) (1,278,091)
----------- ------------- ---------- ------------ ---------- ------------- --------- -----------
Net
increase... 569,778 $ 6,554,887 196,000 $ 2,510,778 140,409 $ 1,782,278 248,525 $ 3,081,992
=========== ============= ========== ============ ========== ============= ========= ============
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Nations Capital Growth Fund's and Nations Emerging Growth Fund's Primary B
Shares commenced operations on June 28, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
76
<PAGE> 79
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
NATIONS MANAGED SMALLCAP
INDEX FUND
PERIOD ENDED
MARCH 31, 1997(a)
--------------------------
SHARES DOLLARS
==========================
<S> <C> <C>
PRIMARY A SHARES:
Sold............................................................................................ 4,852,113 $49,652,580
Issued as reinvestment of dividends............................................................. 2,903 28,920
Redeemed........................................................................................ (698,247) (7,114,003)
--------- ----------
Net increase.................................................................................... 4,156,769 $42,567,497
========= ===========
PRIMARY B SHARES:
Sold............................................................................................ 8,788 $ 91,010
Issued as reinvestment of dividends............................................................. -- --
Redeemed........................................................................................ -- --
--------- ----------
Net increase.................................................................................... 8,788 $ 91,010
========= ===========
INVESTOR A SHARES:
Sold............................................................................................ 34,925 $ 359,548
Issued as reinvestment of dividends............................................................. 51 513
Redeemed........................................................................................ (1,007) (10,412)
--------- ----------
Net increase.................................................................................... 33,969 $ 349,649
========= ===========
INVESTOR C SHARES:
Sold............................................................................................ 1,917 $ 19,980
Issued as reinvestment of dividends............................................................. 2 15
Redeemed........................................................................................ -- --
--------- ----------
Net increase.................................................................................... 1,919 $ 19,995
========= ===========
</TABLE>
- ---------------
(a) Nations Managed SmallCap Index Fund commenced operations on October
15,1996.
SEE NOTES TO FINANCIAL STATEMENTS.
77
<PAGE> 80
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT
OF YEAR INCOME INVESTMENTS FROM OPERATIONS INCOME
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS BALANCED ASSETS FUND
PRIMARY A
Year ended 03/31/1997........................ $ 11.65 $ 0.39 $ 1.03 $ 1.42 $(0.38)
Period ended 03/31/1996(a)................... 12.68 0.11 0.45 0.56 (0.18)
Year ended 11/30/1995........................ 10.44 0.38 2.21 2.59 (0.33)
Year ended 11/30/1994........................ 10.87 0.25 (0.43) (0.18) (0.25)
Year ended 11/30/1993........................ 10.24 0.29 0.64 0.93 (0.30)
Period ended 11/30/1992*..................... 10.00 0.06 0.18# 0.24 --
PRIMARY B
Period ended 03/31/1997*..................... $ 11.87 $ 0.21 $ 0.85 $ 1.06 $(0.25)
INVESTOR A
Year ended 03/31/1997........................ $ 11.64 $ 0.34 $ 1.05 $ 1.39 $(0.36)
Period ended 03/31/1996(a)................... 12.66 0.11 0.45 0.56 (0.17)
Year ended 11/30/1995........................ 10.42 0.34 2.23 2.57 (0.31)
Year ended 11/30/1994........................ 10.86 0.22 (0.44) (0.22) (0.22)
Year ended 11/30/1993........................ 10.24 0.29 0.62 0.91 (0.29)
Period ended 11/30/1992*..................... 10.00 0.01 0.23# 0.24 --
INVESTOR C
Year ended 03/31/1997........................ $ 11.60 $ 0.33 $ 1.02 $ 1.35 $(0.33)
Period ended 03/31/1996(a)................... 12.61 0.09 0.45 0.54 (0.14)
Year ended 11/30/1995........................ 10.38 0.26 2.21 2.47 (0.22)
Year ended 11/30/1994........................ 10.82 0.14 (0.43) (0.29) (0.15)
Year ended 11/30/1993........................ 10.23 0.23 0.59 0.82 (0.23)
Period ended 11/30/1992*..................... 10.00 0.01 0.22# 0.23 --
INVESTOR N
Year ended 03/31/1997........................ $ 11.62 $ 0.29 $ 1.04 $ 1.33 $(0.30)
Period ended 03/31/1996(a)................... 12.63 0.09 0.45 0.54 (0.14)
Year ended 11/30/1995........................ 10.40 0.28 2.22 2.50 (0.25)
Year ended 11/30/1994........................ 10.85 0.17 (0.44) (0.27) (0.18)
Period ended 11/30/1993*..................... 10.61 0.14 0.23 0.37 (0.13)
<CAPTION>
DISTRIBUTIONS TOTAL NET ASSET
FROM NET DIVIDENDS VALUE
REALIZED AND END OF
CAPITAL GAINS DISTRIBUTIONS YEAR
----------------------------------------------------
<S> <C> <C> <C>
NATIONS BALANCED ASSETS FUND
PRIMARY A
Year ended 03/31/1997........................ $ (1.54) $ (1.92) $ 11.15
Period ended 03/31/1996(a)................... (1.41) (1.59) 11.65
Year ended 11/30/1995........................ (0.02) (0.35) 12.68
Year ended 11/30/1994........................ -- (0.25) 10.44
Year ended 11/30/1993........................ -- (0.30) 10.87
Period ended 11/30/1992*..................... -- -- 10.24
PRIMARY B
Period ended 03/31/1997*..................... $ (1.54) $ (1.79) $ 11.14
INVESTOR A
Year ended 03/31/1997........................ $ (1.54) $ (1.90) $ 11.13
Period ended 03/31/1996(a)................... (1.41) (1.58) 11.64
Year ended 11/30/1995........................ (0.02) (0.33) 12.66
Year ended 11/30/1994........................ -- (0.22) 10.42
Year ended 11/30/1993........................ -- (0.29) 10.86
Period ended 11/30/1992*..................... -- -- 10.24
INVESTOR C
Year ended 03/31/1997........................ $ (1.54) $ (1.87) $ 11.08
Period ended 03/31/1996(a)................... (1.41) (1.55) 11.60
Year ended 11/30/1995........................ (0.02) (0.24) 12.61
Year ended 11/30/1994........................ -- (0.15) 10.38
Year ended 11/30/1993........................ -- (0.23) 10.82
Period ended 11/30/1992*..................... -- -- 10.23
INVESTOR N
Year ended 03/31/1997........................ $ (1.54) $ (1.84) $ 11.11
Period ended 03/31/1996(a)................... (1.41) (1.55) 11.62
Year ended 11/30/1995........................ (0.02) (0.27) 12.63
Year ended 11/30/1994........................ -- (0.18) 10.40
Period ended 11/30/1993*..................... -- (0.13) 10.85
</TABLE>
- ---------------
* Nations Balanced Assets 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.
# The amount shown at this caption for each share outstanding throughout the
period may not accord with the change in the aggregate gains and losses in
the portfolio securities for the period because of the timing of purchases
and withdrawals of shares in relation to the fluctuating market value of the
portfolio.
(a) Fiscal year changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Average commission rate paid per share of securities purchased and sold by
the Fund.
(c) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements and net investment income per share was less than 0.01% and
$0.01, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
78
<PAGE> 81
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
NET ASSETS OPERATING NET INVESTMENT
END OF EXPENSES TO INCOME TO PORTFOLIO
TOTAL YEAR AVERAGE AVERAGE TURNOVER
RETURN++ (IN 000'S) NET ASSETS NET ASSETS RATE
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS BALANCED ASSETS FUND
PRIMARY A
Year ended 03/31/1997........................ 12.50% $ 135,731 1.00%(c) 3.31% 264%
Period ended 03/31/1996(a)................... 4.90 164,215 1.00+ 2.91+ 83
Year ended 11/30/1995........................ 25.27 163,198 0.99 3.25 174
Year ended 11/30/1994........................ (1.73) 162,215 0.98 2.31 156
Year ended 11/30/1993........................ 9.22 178,270 0.90 2.82 50
Period ended 11/30/1992*..................... 2.40+++ 111,953 0.30+ 3.85+ 79
PRIMARY B
Period ended 03/31/1997*..................... 9.06% $ 5,537 1.50%+(c) 2.81%+ 264%
INVESTOR A
Year ended 03/31/1997........................ 12.18% $ 9,075 1.25%(c) 3.06% 264%
Period ended 03/31/1996(a)................... 4.86 6,261 1.25+ 2.66+ 83
Year ended 11/30/1995........................ 25.01 5,276 1.24 3.00 174
Year ended 11/30/1994........................ (2.02) 4,881 1.23 2.06 156
Year ended 11/30/1993........................ 8.93 5,191 1.15 2.57 50
Period ended 11/30/1992*..................... 2.40+++ 547 0.55+ 3.60+ 79
INVESTOR C
Year ended 03/31/1997........................ 11.85% $ 1,396 1.50%(c) 2.81% 264%
Period ended 03/31/1996(a)................... 4.71 1,187 1.62+ 2.29+ 83
Year ended 11/30/1995........................ 24.03 992 1.99 2.25 174
Year ended 11/30/1994........................ (2.72) 951 1.98 1.31 156
Year ended 11/30/1993........................ 8.06 1,196 1.90 1.82 50
Period ended 11/30/1992*..................... 2.30+++ 156 1.30+ 2.85+ 79
INVESTOR N
Year ended 03/31/1997........................ 11.62% $ 64,058 1.75%(c) 2.56% 264%
Period ended 03/31/1996(a)................... 4.69 65,764 1.75+ 2.16+ 83
Year ended 11/30/1995........................ 24.35 65,275 1.74 2.50 174
Year ended 11/30/1994........................ (2.51) 52,905 1.73 1.56 156
Period ended 11/30/1993*..................... 3.45 27,982 1.65+ 2.07+ 50
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
---------------------------------
RATIO OF
OPERATING
EXPENSES TO NET INVESTMENT AVERAGE
AVERAGE INCOME COMMISSION RATE
NET ASSETS PER SHARE PAID(b)
---------------------------------------------------------------------
<S> <C> <C> <C>
NATIONS BALANCED ASSETS FUND
PRIMARY A
Year ended 03/31/1997........................ 1.00%(c) $ 0.39(c) $0.0563
Period ended 03/31/1996(a)................... 1.00+ 0.11 0.0598
Year ended 11/30/1995........................ 0.99 0.38 N/A
Year ended 11/30/1994........................ 0.99 0.25 N/A
Year ended 11/30/1993........................ 0.97 0.29 N/A
Period ended 11/30/1992*..................... 1.05+ 0.05 N/A
PRIMARY B
Period ended 03/31/1997*..................... 1.50%+(c) $ 0.21(c) $0.0563
INVESTOR A
Year ended 03/31/1997........................ 1.25%(c) $ 0.34(c) $0.0563
Period ended 03/31/1996(a)................... 1.25+ 0.11 0.0598
Year ended 11/30/1995........................ 1.24 0.34 N/A
Year ended 11/30/1994........................ 1.24 0.22 N/A
Year ended 11/30/1993........................ 1.22 0.28 N/A
Period ended 11/30/1992*..................... 1.30+ 0.01 N/A
INVESTOR C
Year ended 03/31/1997........................ 1.50%(c) $ 0.33(c) $0.0563
Period ended 03/31/1996(a)................... 1.62+ 0.09 0.0598
Year ended 11/30/1995........................ 1.99 0.26 N/A
Year ended 11/30/1994........................ 1.99 0.14 N/A
Year ended 11/30/1993........................ 1.97 0.22 N/A
Period ended 11/30/1992*..................... 2.05+ 0.01 N/A
INVESTOR N
Year ended 03/31/1997........................ 1.75%(c) $ 0.29(c) $0.0563
Period ended 03/31/1996(a)................... 1.75+ 0.09 0.0598
Year ended 11/30/1995........................ 1.74 0.28 N/A
Year ended 11/30/1994........................ 1.74 0.17 N/A
Period ended 11/30/1993*..................... 1.72+ 0.14 N/A
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
79
<PAGE> 82
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS
VALUE NET AND UNREALIZED IN FROM NET
BEGINNING INVESTMENT GAIN ON NET ASSET VALUE INVESTMENT
OF YEAR INCOME INVESTMENTS FROM OPERATIONS INCOME
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS EQUITY INCOME FUND
PRIMARY A
Year ended 03/31/1997........................ $ 13.14 $ 0.43 $ 1.55 $ 1.98 $(0.41)
Period ended 03/31/1996(a)................... 11.81 0.30 1.77 2.07 (0.37)
Year ended 05/31/1995........................ 11.43 0.42 1.11 1.53 (0.42)
Year ended 05/31/1994........................ 12.06 0.38 0.22 0.60 (0.42)
Year ended 05/31/1993........................ 11.41 0.37 1.08 1.45 (0.35)
Year ended 05/31/1992........................ 10.19 0.34 1.25 1.59 (0.30)
Period ended 05/31/1991*..................... 10.00 0.05 0.14 0.19 --
PRIMARY B
Period ended 03/31/1997*..................... $ 13.50 $ 0.25 $ 1.21 $ 1.46 $(0.25)
INVESTOR A
Year ended 03/31/1997........................ $ 13.11 $ 0.36 $ 1.58 $ 1.94 $(0.38)
Period ended 03/31/1996(a)................... 11.78 0.27 1.77 2.04 (0.34)
Year ended 05/31/1995........................ 11.41 0.40 1.10 1.50 (0.40)
Year ended 05/31/1994........................ 12.02 0.37 0.21 0.58 (0.38)
Year ended 05/31/1993........................ 11.40 0.34 1.05 1.39 (0.32)
Year ended 05/31/1992........................ 10.19 0.29 1.27 1.56 (0.28)
Period ended 05/31/1991*..................... 10.04 0.05 0.10 0.15 --
INVESTOR C
Year ended 03/31/1997........................ $ 13.19 $ 0.33 $ 1.59 $ 1.92 $(0.35)
Period ended 03/31/1996(a)................... 11.83 0.21 1.78 1.99 (0.26)
Year ended 05/31/1995........................ 11.47 0.32 1.08 1.40 (0.31)
Year ended 05/31/1994........................ 12.04 0.28 0.21 0.49 (0.25)
Period ended 05/31/1993*..................... 11.13 0.32 1.32 1.64 (0.28)
INVESTOR N
Year ended 03/31/1997........................ $ 13.10 $ 0.31 $ 1.57 $ 1.88 $(0.32)
Period ended 03/31/1996(a)................... 11.77 0.22 1.76 1.98 (0.28)
Year ended 05/31/1995........................ 11.40 0.34 1.11 1.45 (0.35)
Period ended 05/31/1994*..................... 11.98 0.37 0.22 0.59 (0.36)
<CAPTION>
DISRIBUTIONS TOTAL NET ASSET
FROM NET DIVIDENDS VALUE
REALIZED AND END OF
CAPITAL GAINS DISTRIBUTIONS YEAR
----------------------------------------------------
<S> <C> <C> <C>
NATIONS EQUITY INCOME FUND
PRIMARY A
Year ended 03/31/1997........................ $ (2.41) $ (2.82) $ 12.30
Period ended 03/31/1996(a)................... (0.37) (0.74) 13.14
Year ended 05/31/1995........................ (0.73) (1.15) 11.81
Year ended 05/31/1994........................ (0.81) (1.23) 11.43
Year ended 05/31/1993........................ (0.45) (0.80) 12.06
Year ended 05/31/1992........................ (0.07) (0.37) 11.41
Period ended 05/31/1991*..................... -- -- 10.19
PRIMARY B
Period ended 03/31/1997*..................... $ (2.41) $ (2.66) $ 12.30
INVESTOR A
Year ended 03/31/1997........................ $ (2.41) $ (2.79) $ 12.26
Period ended 03/31/1996(a)................... (0.37) (0.71) 13.11
Year ended 05/31/1995........................ (0.73) (1.13) 11.78
Year ended 05/31/1994........................ (0.81) (1.19) 11.41
Year ended 05/31/1993........................ (0.45) (0.77) 12.02
Year ended 05/31/1992........................ (0.07) (0.35) 11.40
Period ended 05/31/1991*..................... -- -- 10.19
INVESTOR C
Year ended 03/31/1997........................ $ (2.41) $ (2.76) $ 12.35
Period ended 03/31/1996(a)................... (0.37) (0.63) 13.19
Year ended 05/31/1995........................ (0.73) (1.04) 11.83
Year ended 05/31/1994........................ (0.81) (1.06) 11.47
Period ended 05/31/1993*..................... (0.45) (0.73) 12.04
INVESTOR N
Year ended 03/31/1997........................ $ (2.41) $ (2.73) $ 12.25
Period ended 03/31/1996(a)................... (0.37) (0.65) 13.10
Year ended 05/31/1995........................ (0.73) (1.08) 11.77
Period ended 05/31/1994*..................... (0.81) (1.17) 11.40
</TABLE>
- ---------------
* Nations Equity Income Fund's Primary A, Primary B, Investor A, Investor C
and Investor N Shares commenced operations on April 11, 1991, June 28,
1996, April 16, 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.
(a) Fiscal year changed to March 31. Prior to this, the fiscal year end was May
31.
(b) Average commission rate paid per share of securities purchased and sold by
the Fund.
(c) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements and net investment income per share was less than 0.01% and
$0.01, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
80
<PAGE> 83
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
NET ASSETS OPERATING NET INVESTMENT
END OF EXPENSES TO INCOME TO PORTFOLIO
TOTAL YEAR AVERAGE AVERAGE TURNOVER
RETURN++ (IN 000'S) NET ASSETS NET ASSETS RATE
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS EQUITY INCOME FUND
PRIMARY A
Year ended 03/31/1997........................ 15.62% $ 200,772 0.91%(c) 3.09% 102%
Period ended 03/31/1996(a)................... 17.98 283,142 0.90+ 2.84+ 59
Year ended 05/31/1995........................ 14.79 283,082 0.92 3.75 158
Year ended 05/31/1994........................ 5.00 225,740 0.94 3.41 116
Year ended 05/31/1993........................ 13.30 175,949 0.92 3.37 55
Year ended 05/31/1992........................ 15.91+++ 18,104 1.10 3.15 84
Period ended 05/31/1991*..................... 1.90+++ 10,194 1.12+ 3.66+ 9
PRIMARY B
Period ended 03/31/1997*..................... 11.17% $ 6,484 1.41%+(c) 2.59%+ 102%
INVESTOR A
Year ended 03/31/1997........................ 15.30% $ 47,891 1.16%(c) 2.84% 102%
Period ended 03/31/1996(a)................... 17.75 42,606 1.15+ 2.59+ 59
Year ended 05/31/1995........................ 14.53 35,538 1.17 3.50 158
Year ended 05/31/1994........................ 4.74 33,691 1.19 3.16 116
Year ended 05/31/1993........................ 12.78 32,760 1.17 3.12 55
Year ended 05/31/1992........................ 15.59+++ 3,418 1.35 2.90 84
Period ended 05/31/1991*..................... 1.49+++ 497 1.37+ 3.40+ 9
INVESTOR C
Year ended 03/31/1997........................ 15.01% $ 5,007 1.41%(c) 2.59% 102%
Period ended 03/31/1996(a)................... 17.20 4,612 1.75+ 1.99+ 59
Year ended 05/31/1995........................ 13.49 4,278 1.92 2.75 158
Year ended 05/31/1994........................ 3.96 4,221 1.94 2.41 116
Period ended 05/31/1993*..................... 15.31 4,377 1.92+ 2.37+ 55
INVESTOR N
Year ended 03/31/1997........................ 14.76% $ 108,055 1.66%(c) 2.34% 102%
Period ended 03/31/1996(a)................... 17.21 104,026 1.65+ 2.09+ 59
Year ended 05/31/1995........................ 14.03 75,371 1.67 3.00 158
Period ended 05/31/1994*..................... 4.84 46,043 1.69+ 2.66+ 116
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
-------------------------------
RATIO OF
OPERATING
EXPENSES TO NET INVESTMENT AVERAGE
AVERAGE INCOME/(LOSS) COMMISSION RATE
NET ASSETS PER SHARE PAID(b)
---------------------------------------------------------------------
<S> <C> <C> <C>
NATIONS EQUITY INCOME FUND
PRIMARY A
Year ended 03/31/1997........................ 0.91%(c) $ 0.43(c) $0.0609
Period ended 03/31/1996(a)................... 0.90+ 0.30 0.0287
Year ended 05/31/1995........................ 0.93 0.42 N/A
Year ended 05/31/1994........................ 0.95 0.38 N/A
Year ended 05/31/1993........................ 1.04 0.36 N/A
Year ended 05/31/1992........................ 2.21 0.22 N/A
Period ended 05/31/1991*..................... 1.80+ (0.06) N/A
PRIMARY B
Period ended 03/31/1997*..................... 1.41%+(c) $ 0.25(c) $0.0609
INVESTOR A
Year ended 03/31/1997........................ 1.16%(c) $ 0.36(c) $0.0609
Period ended 03/31/1996(a)................... 1.15+ 0.27 0.0287
Year ended 05/31/1995........................ 1.18 0.40 N/A
Year ended 05/31/1994........................ 1.20 0.37 N/A
Year ended 05/31/1993........................ 1.29 0.33 N/A
Year ended 05/31/1992........................ 2.46 0.18 N/A
Period ended 05/31/1991*..................... 15.09+ (1.30) N/A
INVESTOR C
Year ended 03/31/1997........................ 1.41%(c) $ 0.33(c) $0.0609
Period ended 03/31/1996(a)................... 1.75+ 0.21 0.0287
Year ended 05/31/1995........................ 1.93 0.32 N/A
Year ended 05/31/1994........................ 1.95 0.28 N/A
Period ended 05/31/1993*..................... 2.04+ 0.31 N/A
INVESTOR N
Year ended 03/31/1997........................ 1.66%(c) $ 0.31(c) $0.0609
Period ended 03/31/1996(a)................... 1.65+ 0.22 0.0287
Year ended 05/31/1995........................ 1.68 0.34 N/A
Period ended 05/31/1994*..................... 1.70+ 0.37 N/A
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
81
<PAGE> 84
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET REALIZED
AND
NET ASSET UNREALIZED NET INCREASE/ DIVIDENDS
VALUE NET GAIN/(LOSS) (DECREASE) IN FROM NET
BEGINNING INVESTMENT ON NET ASSET VALUE INVESTMENT
OF YEAR INCOME INVESTMENTS FROM OPERATIONS INCOME
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS VALUE FUND
PRIMARY A
Year ended 03/31/1997........................ $ 16.60 $0.26 $ 2.69 $ 2.95 $(0.26)
Period ended 03/31/1996(a)................... 16.21 0.07 1.06 1.13 (0.12)
Year ended 11/30/1995........................ 12.98 0.27 3.91 4.18 (0.28)
Year ended 11/30/1994........................ 13.74 0.24 (0.23) 0.01 (0.23)
Year ended 11/30/1993........................ 12.45 0.24 1.38 1.62 (0.24)
Year ended 11/30/1992........................ 11.16 0.28 1.57 1.85 (0.27)
Year ended 11/30/1991........................ 9.71 0.34 1.47 1.81 (0.36)
Year ended 11/30/1990........................ 10.04 0.35 (0.36) (0.01) (0.32)
Period ended 11/30/1989*#.................... 10.00 0.08 (0.04) 0.04 --
PRIMARY B
Period ended 03/31/1997*..................... $ 17.19 $0.14 $ 2.10 $ 2.24 $(0.14)
INVESTOR A
Year ended 03/31/1997........................ $ 16.60 $0.21 $ 2.70 $ 2.91 $(0.22)
Period ended 03/31/1996(a)................... 16.21 0.05 1.06 1.11 (0.10)
Year ended 11/30/1995........................ 12.98 0.23 3.92 4.15 (0.25)
Year ended 11/30/1994........................ 13.72 0.20 (0.20) 0.00 (0.20)
Year ended 11/30/1993........................ 12.45 0.22 1.35 1.57 (0.21)
Year ended 11/30/1992........................ 11.16 0.26 1.59 1.85 (0.27)
Year ended 11/30/1991........................ 9.71 0.34 1.47 1.81 (0.36)
Period ended 11/30/1990*..................... 10.04 0.35 (0.36) (0.01) (0.32)
INVESTOR C
Year ended 03/31/1997........................ $ 16.50 $0.17 $ 2.68 $ 2.85 $(0.18)
Period ended 03/31/1996(a)................... 16.09 0.04 1.05 1.09 (0.06)
Year ended 11/30/1995........................ 12.90 0.13 3.88 4.01 (0.15)
Year ended 11/30/1994........................ 13.64 0.12 (0.22) (0.10) (0.10)
Year ended 11/30/1993........................ 12.41 0.13 1.32 1.45 (0.13)
Period ended 11/30/1992*..................... 11.63 0.07 0.78 0.85 (0.07)
INVESTOR N
Year ended 03/31/1997........................ $ 16.55 $0.14 $ 2.68 $ 2.82 $(0.14)
Period ended 03/31/1996(a)................... 16.15 0.03 1.05 1.08 (0.06)
Year ended 11/30/1995........................ 12.94 0.17 3.89 4.06 (0.18)
Year ended 11/30/1994........................ 13.71 0.15 (0.22) (0.07) (0.16)
Period ended 11/30/1993*..................... 13.08 0.11 0.63 0.74 (0.11)
<CAPTION>
DISTRIBUTIONS TOTAL NET ASSET
FROM NET DIVIDENDS VALUE
REALIZED AND END OF
CAPITAL GAINS DISTRIBUTIONS YEAR
----------------------------------------------------
<S> <C> <C> <C>
NATIONS VALUE FUND
PRIMARY A
Year ended 03/31/1997........................ $ (1.42) $ (1.68) $ 17.87
Period ended 03/31/1996(a)................... (0.62) (0.74) 16.60
Year ended 11/30/1995........................ (0.67) (0.95) 16.21
Year ended 11/30/1994........................ (0.54) (0.77) 12.98
Year ended 11/30/1993........................ (0.09) (0.33) 13.74
Year ended 11/30/1992........................ (0.29) (0.56) 12.45
Year ended 11/30/1991........................ -- (0.36) 11.16
Year ended 11/30/1990........................ -- (0.32) 9.71
Period ended 11/30/1989*#.................... -- -- 10.04
PRIMARY B
Period ended 03/31/1997*..................... $ (1.42) $ (1.56) $ 17.87
INVESTOR A
Year ended 03/31/1997........................ $ (1.42) $ (1.64) $ 17.87
Period ended 03/31/1996(a)................... (0.62) (0.72) 16.60
Year ended 11/30/1995........................ (0.67) (0.92) 16.21
Year ended 11/30/1994........................ (0.54) (0.74) 12.98
Year ended 11/30/1993........................ (0.09) (0.30) 13.72
Year ended 11/30/1992........................ (0.29) (0.56) 12.45
Year ended 11/30/1991........................ -- (0.36) 11.16
Period ended 11/30/1990*..................... -- (0.32) 9.71
INVESTOR C
Year ended 03/31/1997........................ $ (1.42) $ (1.60) $ 17.75
Period ended 03/31/1996(a)................... (0.62) (0.68) 16.50
Year ended 11/30/1995........................ (0.67) (0.82) 16.09
Year ended 11/30/1994........................ (0.54) (0.64) 12.90
Year ended 11/30/1993........................ (0.09) (0.22) 13.64
Period ended 11/30/1992*..................... -- (0.07) 12.41
INVESTOR N
Year ended 03/31/1997........................ $ (1.42) $ (1.56) $ 17.81
Period ended 03/31/1996(a)................... (0.62) (0.68) 16.55
Year ended 11/30/1995........................ (0.67) (0.85) 16.15
Year ended 11/30/1994........................ (0.54) (0.70) 12.94
Period ended 11/30/1993*..................... -- (0.11) 13.71
</TABLE>
- ---------------
* Nations Value Fund's Primary A, Primary B, Investor A, Investor C and
Investor N Shares commenced operations on September 19, 1989, June 28, 1996,
December 6, 1989, 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.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Average commission rate paid per share of securities purchased and sold by
the Fund.
(c) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements and net investment income per share was less than 0.01% and
$0.01, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
82
<PAGE> 85
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
NET ASSETS OPERATING NET INVESTMENT
END OF EXPENSES TO INCOME TO PORTFOLIO
TOTAL YEAR AVERAGE NET AVERAGE NET TURNOVER
RETURN++ (IN 000'S) ASSETS ASSETS RATE
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS VALUE FUND
PRIMARY A
Year ended 03/31/1997........................ 18.07% $1,200,853 0.97%(c) 1.51% 47%
Period ended 03/31/1996(a)................... 7.20 998,957 0.96+ 1.30+ 12
Year ended 11/30/1995........................ 34.53 956,669 0.94 1.90 63
Year ended 11/30/1994........................ (0.08) 799,743 0.93 1.85 75
Year ended 11/30/1993........................ 13.19 707,185 0.96 1.98 64
Year ended 11/30/1992........................ 17.00+++ 282,138 0.90 2.31 60
Year ended 11/30/1991........................ 18.79+++ 82,360 0.53 3.33 51
Year ended 11/30/1990........................ (0.16)+++ 19,769 0.21 4.19 24
Period ended 11/30/1989*#.................... 0.40+++ 5,161 0.49+ 4.41+ --
PRIMARY B
Period ended 03/31/1997*..................... 13.20% $ 27,586 1.47%+(c) 1.01%+ 47%
INVESTOR A
Year ended 03/31/1997........................ 17.80% $ 70,305 1.22%(c) 1.26% 47%
Period ended 03/31/1996(a)................... 7.07 54,341 1.21+ 1.05+ 12
Year ended 11/30/1995........................ 34.22 48,440 1.19 1.65 63
Year ended 11/30/1994........................ (0.17) 35,445 1.18 1.60 75
Year ended 11/30/1993........................ 12.80 32,607 1.21 1.73 64
Year ended 11/30/1992........................ 16.96+++ 24,536 1.06 2.15 60
Year ended 11/30/1991........................ 18.79+++ 13,514 0.53 3.33 51
Period ended 11/30/1990*..................... (0.16)+++ 7,020 0.21+ 4.19+ 24
INVESTOR C
Year ended 03/31/1997........................ 17.51% $ 6,519 1.47%(c) 1.01% 47%
Period ended 03/31/1996(a)................... 6.99 4,633 1.58+ 0.68+ 12
Year ended 11/30/1995........................ 33.15 4,185 1.94 0.90 63
Year ended 11/30/1994........................ (0.92) 2,983 1.93 0.85 75
Year ended 11/30/1993........................ 11.85 2,997 1.96 0.98 64
Period ended 11/30/1992*..................... 7.33+++ 1,286 1.98+ 1.22+ 60
INVESTOR N
Year ended 03/31/1997........................ 17.21% $ 99,999 1.72%(c) 0.76% 47%
Period ended 03/31/1996(a)................... 6.90 88,861 1.71+ 0.55+ 12
Year ended 11/30/1995........................ 33.55 83,699 1.69 1.15 63
Year ended 11/30/1994........................ (0.69) 42,530 1.68 1.10 75
Period ended 11/30/1993*..................... 5.65 10,449 1.71+ 1.23+ 64
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
---------------------------------
RATIO OF
OPERATING
EXPENSES TO NET INVESTMENT AVERAGE
AVERAGE NET INCOME COMMISSION RATE
ASSETS PER SHARE PAID(B)
---------------------------------------------------------------------
<S> <C> <C> <C>
NATIONS VALUE FUND
PRIMARY A
Year ended 03/31/1997........................ 0.97%(c) $ 0.26(c) $0.0649
Period ended 03/31/1996(a)................... 0.96+ 0.07 0.0648
Year ended 11/30/1995........................ 0.94 0.27 N/A
Year ended 11/30/1994........................ 0.93 0.24 N/A
Year ended 11/30/1993........................ 0.97 0.24 N/A
Year ended 11/30/1992........................ 0.97 0.27 N/A
Year ended 11/30/1991........................ 0.99 0.30 N/A
Year ended 11/30/1990........................ 1.11 0.26 N/A
Period ended 11/30/1989*#.................... 1.41+ 0.06 N/A
PRIMARY B
Period ended 03/31/1997*..................... 1.47%+(c) $ 0.14(c) $0.0649
INVESTOR A
Year ended 03/31/1997........................ 1.22%(c) $ 0.21(c) $0.0649
Period ended 03/31/1996(a)................... 1.21+ 0.05 0.0648
Year ended 11/30/1995........................ 1.19 0.23 N/A
Year ended 11/30/1994........................ 1.18 0.21 N/A
Year ended 11/30/1993........................ 1.22 0.22 N/A
Year ended 11/30/1992........................ 1.15 0.25 N/A
Year ended 11/30/1991........................ 0.99 0.30 N/A
Period ended 11/30/1990*..................... 1.11+ 0.26 N/A
INVESTOR C
Year ended 03/31/1997........................ 1.47%(c) $ 0.17(c) $0.0649
Period ended 03/31/1996(a)................... 1.58+ 0.04 0.0648
Year ended 11/30/1995........................ 1.94 0.13 N/A
Year ended 11/30/1994........................ 1.93 0.12 N/A
Year ended 11/30/1993........................ 1.97 0.13 N/A
Period ended 11/30/1992*..................... 1.98+ 0.07 N/A
INVESTOR N
Year ended 03/31/1997........................ 1.72%(c) $ 0.14(c) $0.0649
Period ended 03/31/1996(a)................... 1.71+ 0.03 0.0648
Year ended 11/30/1995........................ 1.69 0.17 N/A
Year ended 11/30/1994........................ 1.68 0.15 N/A
Period ended 11/30/1993*..................... 1.72+ 0.11 N/A
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
83
<PAGE> 86
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET REALIZED
NET ASSET AND DIVIDENDS
VALUE NET UNREALIZED NET INCREASE IN FROM NET
BEGINNING INVESTMENT GAIN ON NET ASSET VALUE INVESTMENT
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS MANAGED INDEX FUND
PRIMARY A
Period ended 03/31/1997*..................... $ 10.00 $0.15 $ 1.87 $ 2.02 $(0.13)
INVESTOR A
Period ended 03/31/1997*..................... $ 10.00 $0.12 $ 1.89 $ 2.01 $(0.12)
INVESTOR C
Period ended 03/31/1997*..................... $ 10.00 $0.11 $ 1.90 $ 2.01 $(0.11)
<CAPTION>
TOTAL NET ASSET
DIVIDENDS VALUE
AND END OF
DISTRIBUTIONS PERIOD
------------------------------------
<S> <<C> <C>
NATIONS MANAGED INDEX FUND
PRIMARY A
Period ended 03/31/1997*..................... $ (0.13) $ 11.89
INVESTOR A
Period ended 03/31/1997*..................... $ (0.12) $ 11.89
INVESTOR C
Period ended 03/31/1997*..................... $ (0.11) $ 11.90
</TABLE>
- ---------------
* Nations Managed Index Fund's Primary A, Investor A and Investor C Shares
commenced operations on July 31, 1996.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
(a) Average commission rate paid per share of securities purchased and sold by
the Fund.
(b) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements and net investment income per share was less than 0.01% and
$0.01, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
84
<PAGE> 87
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
NET ASSETS OPERATING NET INVESTMENT
END OF EXPENSES TO INCOME PORTFOLIO
TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER
RETURN++ (IN 000'S) ASSETS NET ASSETS RATE
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS MANAGED INDEX FUND
PRIMARY A
Period ended 03/31/1997*..................... 20.22% $42,226 0.50%+(b) 1.92%+ 17%
INVESTOR A
Period ended 03/31/1997*..................... 20.12% $ 3,038 0.75%+(b) 1.67%+ 17%
INVESTOR C
Period ended 03/31/1997*..................... 20.11% $ 83 1.00%+(b) 1.42%+ 17%
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
---------------------------------
RATIO OF
OPERATING
EXPENSES TO NET INVESTMENT AVERAGE
AVERAGE NET INCOME COMMISSION RATE
ASSETS PER SHARE PAID(a)
---------------------------------------------------------------------
<S> <C> <C> <C>
NATIONS MANAGED INDEX FUND
PRIMARY A
Period ended 03/31/1997*..................... 1.05%+(b) $ 0.12(b) $0.0259
INVESTOR A
Period ended 03/31/1997*..................... 1.30%+(b) $ 0.09(b) $0.0259
INVESTOR C
Period ended 03/31/1997*..................... 1.55%+(b) $ 0.08(b) $0.0259
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
85
<PAGE> 88
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET REALIZED
NET ASSET AND DIVIDENDS
VALUE NET UNREALIZED NET INCREASE IN FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE INVESTMENT
OF YEAR INCOME ON INVESTMENTS FROM OPERATIONS INCOME
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS EQUITY INDEX FUND
PRIMARY A
Year ended 03/31/1997........................ $13.58 $ 0.26 $ 2.36 $2.62 $(0.26)
Period ended 03/31/1996(a)................... 12.91 0.08 0.86 0.94 (0.13)
Year ended 11/30/1995........................ 9.84 0.28 3.20 3.48 (0.28)
Period ended 11/30/1994*..................... 10.00 0.24 (0.21) 0.03 (0.19)
PRIMARY B
Period ended 03/31/1997*..................... $14.13 $ 0.16 $ 1.80 $1.96 $(0.15)
INVESTOR A
Year ended 03/31/1997........................ $13.58 $ 0.25 $ 2.32 $2.57 $(0.23)
Period ended 03/31/1996(a)................... 12.91 0.06 0.87 0.93 (0.12)
Period ended 11/30/1995*..................... 12.29 0.03 0.59 0.62 --
<CAPTION>
DISTRIBUTIONS TOTAL
FROM NET DIVIDENDS
REALIZED AND
CAPITAL GAINS DISTRIBUTIONS
--------------------------------------------
<S> <C> <C>
NATIONS EQUITY INDEX FUND
PRIMARY A
Year ended 03/31/1997........................ $ (0.05) $ (0.31)
Period ended 03/31/1996(a)................... (0.14) (0.27)
Year ended 11/30/1995........................ (0.13) (0.41)
Period ended 11/30/1994*..................... -- (0.19)
PRIMARY B
Period ended 03/31/1997*..................... $ (0.05) $ (0.20)
INVESTOR A
Year ended 03/31/1997........................ $ (0.05) $ (0.28)
Period ended 03/31/1996(a)................... (0.14) (0.26)
Period ended 11/30/1995*..................... -- --
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Nations Equity Index Fund's Primary A, Primary B and Investor A Shares commenced operations on December 15, 1993, June 28,
1996 and October 10, 1995, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and does not reflect the deduction of any
applicable sales charges.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was November 30.
(b) Average commission rate paid per share of securities purchased and sold by the Fund.
(c) The effect of the fees reduced by credits allowed by the custodian on the operating expense ratio, with and without
waivers and/or expense reimbursements and net investment income per share was less than 0.01% and $0.01, respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
86
<PAGE> 89
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF
RATIO OF OPERATING
NET ASSET NET ASSETS OPERATING EXPENSES TO
VALUE END OF EXPENSES TO AVERAGE NET
END OF TOTAL YEAR AVERAGE ASSETS INCLUDING
YEAR RETURN++ (IN 000'S) NET ASSETS INTEREST EXPENSE
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS EQUITY INDEX FUND
PRIMARY A
Year ended 03/31/1997........................ $ 15.89 19.41% $567,039 0.35%(c) N/A
Period ended 03/31/1996(a)................... 13.58 7.33 192,388 0.35+ 0.35%+
Year ended 11/30/1995........................ 12.91 36.35 145,021 0.37 0.38
Period ended 11/30/1994*..................... 9.84 0.29 123,147 0.35+ N/A
PRIMARY B
Period ended 03/31/1997*..................... $ 15.89 13.93% $ 5,505 0.85%+(c) N/A
INVESTOR A
Year ended 03/31/1997........................ $ 15.87 19.06% $ 2,574 0.60%(c) N/A
Period ended 03/31/1996(a)................... 13.58 7.26 95 0.35+ 0.35%+
Period ended 11/30/1995*..................... 12.91 5.04 11 0.62+ 0.63+
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
-------------------------------
RATIO OF NET RATIO OF
INVESTMENT OPERATING AVERAGE
INCOME PORTFOLIO EXPENSES TO NET INVESTMENT COMMISSION
TO AVERAGE TURNOVER AVERAGE INCOME RATE
NET ASSETS RATE NET ASSETS PER SHARE PAID(b)
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS EQUITY INDEX FUND
PRIMARY A
Year ended 03/31/1997........................ 1.91% 5% 0.70%(c) $ 0.21(c) $ 0.0173
Period ended 03/31/1996(a)................... 1.99+ 2 0.73+ 0.07 0.0291
Year ended 11/30/1995........................ 2.44 18 0.78 0.23 N/A
Period ended 11/30/1994*..................... 2.64+ 14 0.79+ 0.20 N/A
PRIMARY B
Period ended 03/31/1997*..................... 1.41%+ 5% 1.20%+(c) $ 0.11(c) $ 0.0173
INVESTOR A
Year ended 03/31/1997........................ 1.66% 5% 0.95%(c) $ 0.20(c) $ 0.0173
Period ended 03/31/1996(a)................... 1.99+ 2 0.73+ 0.05 0.0291
Period ended 11/30/1995*..................... 2.19+ 18 1.03+ 0.02 N/A
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
87
<PAGE> 90
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET REALIZED
NET ASSET AND NET INCREASE/ DIVIDENDS
VALUE NET UNREALIZED (DECREASE) IN FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE INVESTMENT
OF YEAR INCOME/(LOSS) ON INVESTMENTS FROM OPERATIONS INCOME
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS DISCIPLINED EQUITY FUND
PRIMARY A
Year ended 03/31/1997........................ $ 17.19 $ 0.14 $ 2.79 $2.93 $(0.14)
Period ended 03/31/1996(a)................... 17.06 0.05 0.35 0.40 (0.04)
Year ended 11/30/1995........................ 13.08 0.10 3.96 4.06 (0.08)
Period ended 11/30/1994*..................... 13.31 0.01 (0.23)# (0.22) (0.01)
Period ended 04/29/1994*..................... 13.65 (0.05) 2.66 2.61 --
Period ended 04/30/1993*..................... 10.00 (0.03) 3.74 3.71 --
PRIMARY B
Period ended 03/31/1997***................... $ 17.84 $ 0.03 $ 2.15 $2.18 $(0.04)
INVESTOR A
Year ended 03/31/1997........................ $ 17.16 $ 0.08 $ 2.80 $2.88 $(0.09)
Period ended 03/31/1996(a)................... 17.04 0.04 0.35 0.39 (0.04)
Year ended 11/30/1995........................ 13.06 0.09 3.96 4.05 (0.07)
Period ended 11/30/1994**.................... 13.30 0.00(b) (0.23)# (0.23) (0.01)
Period ended 04/30/1994**.................... 14.94 (0.04) 1.35 1.31 --
INVESTOR C
Year ended 03/31/1997........................ $ 17.10 $ 0.04 $ 2.79 $2.83 $(0.01)
Period ended 03/31/1996(a)................... 16.97 0.01 0.35 0.36 --
Period ended 11/30/1995***................... 14.08 (0.00)(b) 2.92 2.92 (0.03)
INVESTOR N
Year ended 03/31/1997........................ $ 17.00 $ (0.05) $ 2.76 $2.71 --
Period ended 03/31/1996(a)................... 16.89 (0.01) 0.35 0.34 --
Year ended 11/30/1995........................ 13.02 0.03 3.87 3.90 $(0.03)
Period ended 11/30/1994***................... 12.77 (0.02) 0.28 0.26 (0.01)
<CAPTION>
DISTRIBUTIONS TOTAL
FROM NET RETURN DIVIDENDS
REALIZED OF AND
CAPITAL GAINS CAPITAL DISTRIBUTIONS
--------------------------------------------------------
<S> <C<C> <C> <C>
NATIONS DISCIPLINED EQUITY FUND
PRIMARY A
Year ended 03/31/1997........................ $ (1.51) -- $ (1.65)
Period ended 03/31/1996(a)................... (0.23) -- (0.27)
Year ended 11/30/1995........................ -- -- (0.08)
Period ended 11/30/1994*..................... -- $(0.00) (b) (0.01)
Period ended 04/29/1994*..................... (2.95) -- (2.95)
Period ended 04/30/1993*..................... (0.06) -- (0.06)
PRIMARY B
Period ended 03/31/1997***................... $ (1.51) -- $ (1.55)
INVESTOR A
Year ended 03/31/1997........................ $ (1.51) -- $ (1.60)
Period ended 03/31/1996(a)................... (0.23) -- (0.27)
Year ended 11/30/1995........................ -- -- (0.07)
Period ended 11/30/1994**.................... -- $(0.00) (b) (0.01)
Period ended 04/30/1994**.................... (2.95) -- (2.95)
INVESTOR C
Year ended 03/31/1997........................ $ (1.51) -- $ (1.52)
Period ended 03/31/1996(a)................... (0.23) -- (0.23)
Period ended 11/30/1995***................... -- -- (0.03)
INVESTOR N
Year ended 03/31/1997........................ $ (1.51) -- $ (1.51)
Period ended 03/31/1996(a)................... (0.23) -- (0.23)
Year ended 11/30/1995........................ -- -- (0.03)
Period ended 11/30/1994***................... -- $(0.00) (b) (0.01)
</TABLE>
- ---------------
* The period for the Nations Disciplined Equity Fund's Primary A Shares
reflects operations from April 30, 1994 through November 30, 1994. The
financial information for the fiscal periods through April 29, 1994 is based
on the financial information for The Capitol Mutual Funds Special Equity
Portfolio Class A Shares, which were reorganized into Primary A Shares of
Nations Disciplined Equity Fund (then named Nations Special Equity Fund) as
of the close of business on April 29, 1994. The Capitol Mutual Funds'
Special Equity Portfolio Class A Shares commenced operations on October 1,
1992.
** The period for the Nations Disciplined Equity Fund's Investor A Shares
reflects operations from April 30, 1994 through November 30, 1994. The
financial information for the fiscal periods through April 29, 1994 is based
on the financial information for The Capitol Mutual Funds Special Equity
Portfolio Class B Shares, which were reorganized into Investor A Shares of
Nations Disciplined Equity Fund (then named Nations Special Equity Fund) as
of the close of business on April 29, 1994. The Capitol Mutual Funds Special
Equity Portfolio Class B Shares commenced operations on July 26, 1993.
*** The Nations Disciplined Equity Fund's Primary B, Investor C and Investor N
Shares commenced operations on June 28, 1996, May 10. 1995 and May 20, 1994,
respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# The amount shown at this caption for each share outstanding throughout the
period may not accord with the change in the aggregate gains and losses in
the portfolio securities for the period because of the timing of purchases
and withdrawals of shares in relation to the fluctuating market value of the
portfolio.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Amount represents less than $0.01 per share.
(c) Average commission rate paid per share of securities purchased and sold by
the Fund.
(d) The effect of interest expense on the operating expense ratio was less than
0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
88
<PAGE> 91
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
NET ASSET NET ASSETS OPERATING NET INVESTMENT
VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO
END OF TOTAL YEAR AVERAGE NET TO AVERAGE TURNOVER
YEAR RETURN++ (IN 000'S) ASSETS NET ASSETS RATE
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NATIONS DISCIPLINED EQUITY FUND
PRIMARY A
Year ended 03/31/1997........................ $ 18.47 17.00% $100,260 1.04%(d) 0.70% 120%
Period ended 03/31/1996(a)................... 17.19 2.44 116,469 1.02+ 0.82+ 47
Year ended 11/30/1995........................ 17.06 31.13 109,939 1.30 0.85 124
Period ended 11/30/1994*..................... 13.08 (1.62) 9,947 1.13+ 0.12+ 177
Period ended 04/29/1994*..................... 13.31 18.79 8,079 1.20+ (0.60)+ 475
Period ended 04/30/1993*..................... 13.65 37.13 4,638 1.20+ (0.58)+ 203
PRIMARY B
Period ended 03/31/1997***................... $ 18.47 12.13% $ 1,121 1.54%+(d) 0.20%+ 120%
INVESTOR A
Year ended 03/31/1997........................ $ 18.44 16.76% $ 6,837 1.29%(d) 0.45% 120%
Period ended 03/31/1996(a)................... 17.16 2.35 4,722 1.12+ 0.72+ 47
Year ended 11/30/1995........................ 17.04 31.05 3,234 1.40 0.75 124
Period ended 11/30/1994**.................... 13.06 (1.71) 252 1.23+ 0.02+ 177
Period ended 04/30/1994**.................... 13.30 8.31 165 1.30+ (0.62)+ 475
INVESTOR C
Year ended 03/31/1997........................ $ 18.41 16.45% $ 446 1.54%(d) 0.20% 120%
Period ended 03/31/1996(a)................... 17.10 2.19 283 1.65+ 0.19+ 47
Period ended 11/30/1995***................... 16.97 20.78 322 2.30+ (0.15)+ 124
INVESTOR N
Year ended 03/31/1997........................ $ 18.20 15.86% $ 20,257 2.04%(d) (0.30)% 120%
Period ended 03/31/1996(a)................... 17.00 2.08 18,412 2.02+ (0.18)+ 47
Year ended 11/30/1995........................ 16.89 29.94 16,874 2.30 (0.15) 124
Period ended 11/30/1994***................... 13.02 2.02 177 2.09+ (0.84)+ 177
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
-------------------------------
RATIO OF
OPERATING
EXPENSES TO NET INVESTMENT AVERAGE
AVERAGE NET INCOME/(LOSS) COMMISSION RATE
ASSETS PER SHARE PAID(c)
--------------------------------------------------
<S> <C> <C> <C>
NATIONS DISCIPLINED EQUITY FUND
PRIMARY A
Year ended 03/31/1997........................ 1.04% $ 0.14 $0.0377
Period ended 03/31/1996(a)................... 1.02+ 0.05 0.0627
Year ended 11/30/1995........................ 1.30 0.10 N/A
Period ended 11/30/1994*..................... 1.56+ (0.03) N/A
Period ended 04/29/1994*..................... 1.53+ (0.08) N/A
Period ended 04/30/1993*.....................
PRIMARY B 1.31+ (0.03) N/A
Period ended 03/31/1997***...................
INVESTOR A 1.54%+ $ 0.03 $0.0377
Year ended 03/31/1997........................ 1.29% $ 0.08 $0.0377
Period ended 03/31/1996(a)................... 1.12+ 0.04 0.0627
Year ended 11/30/1995........................ 1.40 0.09 N/A
Period ended 11/30/1994**.................... 1.66+ (0.07) N/A
Period ended 04/30/1994**....................
INVESTOR C 1.74+ (0.07) N/A
Year ended 03/31/1997........................ 1.54% $ 0.04 $0.0377
Period ended 03/31/1996(a)................... 1.65+ 0.01 0.0627
Period ended 11/30/1995***...................
INVESTOR N 2.30+ (0.00)(b) N/A
Year ended 03/31/1997........................ 2.04% $(0.05) $0.0377
Period ended 03/31/1996(a)................... 2.02+ (0.01) 0.0627
Year ended 11/30/1995........................ 2.30 0.03 N/A
Period ended 11/30/1994***................... 2.52+ (0.03) N/A
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
89
<PAGE> 92
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET REALIZED
NET ASSET AND DIVIDENDS
VALUE NET UNREALIZED NET INCREASE IN FROM NET
BEGINNING INVESTMENT GAIN ON NET ASSET VALUE INVESTMENT
OF YEAR INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS CAPITAL GROWTH FUND
PRIMARY A
Year ended 03/31/1997##...................... $13.43 $ 0.05 $ 1.66 $ 1.71 $(0.05)
Period ended 03/31/1996(a)................... 14.24 0.02 0.38 0.40 (0.02)
Year ended 11/30/1995........................ 11.23 0.09 3.28 3.37 (0.10)
Year ended 11/30/1994........................ 11.08 0.09 0.14 0.23 (0.08)
Year ended 11/30/1993........................ 10.68 0.09 0.42 0.51 (0.10)
Period ended 11/30/1992*..................... 10.00 0.02 0.66# 0.68 --
PRIMARY B
Period ended 03/31/1997*##................... $13.96 $ (0.01) $ 1.12 $ 1.11 --
INVESTOR A
Year ended 03/31/1997##...................... $13.41 $ 0.02 $ 1.65 $ 1.67 $(0.02)
Period ended 03/31/1996(a)................... 14.22 0.01 0.38 0.39 (0.01)
Year ended 11/30/1995........................ 11.21 0.06 3.28 3.34 (0.07)
Year ended 11/30/1994........................ 11.06 0.07 0.14 0.21 (0.06)
Year ended 11/30/1993........................ 10.67 0.07 0.41 0.48 (0.08)
Period ended 11/30/1992*..................... 10.00 0.01 0.66# 0.67 --
INVESTOR C
Year ended 03/31/1997##...................... $13.26 $ (0.01) $ 1.64 $ 1.63 --
Period ended 03/31/1996(a)................... 14.09 0.00(b) 0.36 0.36 --
Year ended 11/30/1995........................ 11.14 (0.03) 3.24 3.21 --
Year ended 11/30/1994........................ 11.01 (0.02) 0.15 0.13 --
Year ended 11/30/1993........................ 10.67 (0.00)(b) 0.38 0.38 $(0.03)
Period ended 11/30/1992*..................... 10.00 (0.00)(b) 0.67# 0.67 --
INVESTOR N
Year ended 03/31/1997##...................... $13.31 $ (0.08) $ 1.63 $ 1.55 --
Period ended 03/31/1996(a)................... 14.15 (0.02) 0.37 0.35 --
Year ended 11/30/1995........................ 11.17 (0.03) 3.27 3.24 --
Year ended 11/30/1994........................ 11.05 (0.01) 0.13 0.12 --
Period ended 11/30/1993*..................... 10.55 (0.01) 0.53 0.52 $(0.02)
<CAPTION>
DISTRIBUTIONS TOTAL
FROM NET DIVIDENDS
REALIZED AND
CAPITAL GAINS DISTRIBUTIONS
--------------------------------------------
<S> <C> <C>
NATIONS CAPITAL GROWTH FUND
PRIMARY A
Year ended 03/31/1997##...................... $ (3.39) $ (3.44)
Period ended 03/31/1996(a)................... (1.19) (1.21)
Year ended 11/30/1995........................ (0.26) (0.36)
Year ended 11/30/1994........................ (0.00)(b) (0.08)
Year ended 11/30/1993........................ (0.01) (0.11)
Period ended 11/30/1992*..................... -- --
PRIMARY B
Period ended 03/31/1997*##................... $ (3.39) $ (3.39)
INVESTOR A
Year ended 03/31/1997##...................... $ (3.39) $ (3.41)
Period ended 03/31/1996(a)................... (1.19) (1.20)
Year ended 11/30/1995........................ (0.26) (0.33)
Year ended 11/30/1994........................ (0.00)(b) (0.06)
Year ended 11/30/1993........................ (0.01) (0.09)
Period ended 11/30/1992*..................... -- --
INVESTOR C
Year ended 03/31/1997##...................... $ (3.39) $ (3.39)
Period ended 03/31/1996(a)................... (1.19) (1.19)
Year ended 11/30/1995........................ (0.26) (0.26)
Year ended 11/30/1994........................ (0.00)(b) (0.00)(b)
Year ended 11/30/1993........................ (0.01) (0.04)
Period ended 11/30/1992*..................... -- (0.00)(b)
INVESTOR N
Year ended 03/31/1997##...................... $ (3.39) $ (3.39)
Period ended 03/31/1996(a)................... (1.19) (1.19)
Year ended 11/30/1995........................ (0.26) (0.26)
Year ended 11/30/1994........................ (0.00)(b) (0.00)(b)
Period ended 11/30/1993*..................... -- (0.02)
</TABLE>
- ---------------
<TABLE>
<C> <S>
* The Nations Capital Growth 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.
# The amount shown at this caption for each share outstanding throughout the period may not accord with the change in the
aggregate gains and losses in the portfolio securities for the period because of the timing of purchases and withdrawals
of shares in relation to the fluctuating market value of the portfolio.
## 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) Amount represents less than $0.01 per share.
(c) Average commission rate paid per share of securities purchased and sold by the Fund.
(d) The effect of interest expense on the operating expense ratio was less than 0.01%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
90
<PAGE> 93
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
NET ASSET NET ASSETS OPERATING NET INVESTMENT
VALUE END OF EXPENSES TO INCOME/(LOSS)
END OF TOTAL YEAR AVERAGE TO AVERAGE
YEAR RETURN++ (IN 000'S) NET ASSETS NET ASSETS
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS CAPITAL GROWTH FUND
PRIMARY A
Year ended 03/31/1997##...................... $ 11.70 11.88% $533,168 0.96%(d) 0.39%
Period ended 03/31/1996(a)................... 13.43 3.14 839,300 0.96+ 0.38+
Year ended 11/30/1995........................ 14.24 30.96 867,361 0.98 0.71
Year ended 11/30/1994........................ 11.23 2.14 717,914 0.90 0.85
Year ended 11/30/1993........................ 11.08 4.84 646,661 0.80 0.84
Period ended 11/30/1992*..................... 10.68 6.80+++ 728,629 0.30+ 1.33+
PRIMARY B
Period ended 03/31/1997*##................... $ 11.68 7.07% $ 12,367 1.46%+(d) (0.11)%+
INVESTOR A
Year ended 03/31/1997##...................... $ 11.67 11.58% $ 20,465 1.21%(d) 0.14%
Period ended 03/31/1996(a)................... 13.41 3.02 18,311 1.21+ 0.13+
Year ended 11/30/1995........................ 14.22 30.70 16,770 1.23 0.46
Year ended 11/30/1994........................ 11.21 1.93 11,038 1.15 0.60
Year ended 11/30/1993........................ 11.06 4.56 11,182 1.05 0.59
Period ended 11/30/1992*..................... 10.67 6.70+++ 1,225 0.55+ 1.08+
INVESTOR C
Year ended 03/31/1997##...................... $ 11.50 11.39% $ 5,752 1.46%(d) (0.11)%
Period ended 03/31/1996(a)................... 13.26 2.86 3,655 1.58+ (0.24)+
Year ended 11/30/1995........................ 14.09 29.61 3,322 1.98 (0.29)
Year ended 11/30/1994........................ 11.14 1.22 2,394 1.90 (0.15)
Year ended 11/30/1993........................ 11.01 3.61 2,919 1.80 (0.16)
Period ended 11/30/1992*..................... 10.67 6.70+++ 406 1.30+ 0.33+
INVESTOR N
Year ended 03/31/1997##...................... $ 11.47 10.68% $ 41,933 1.96%(d) (0.61)%
Period ended 03/31/1996(a)................... 13.31 2.77 41,045 1.96+ (0.62)+
Year ended 11/30/1995........................ 14.15 29.80 40,868 1.98 (0.29)
Year ended 11/30/1994........................ 11.17 1.12 23,591 1.90 (0.15)
Period ended 11/30/1993*..................... 11.05 4.95 9,511 1.80+ (0.16)+
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
--------------------------------
RATIO OF
OPERATING
PORTFOLIO EXPENSES TO NET INVESTMENT AVERAGE
TURNOVER AVERAGE INCOME/(LOSS) COMMISSION RATE
RATE NET ASSETS PER SHARE PAID(c)
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NATIONS CAPITAL GROWTH FUND
PRIMARY A
Year ended 03/31/1997##...................... 75% 0.96% $ 0.05 $ 0.0604
Period ended 03/31/1996(a)................... 25 0.96%+ 0.02 0.0632
Year ended 11/30/1995........................ 80 0.98 0.09 N/A
Year ended 11/30/1994........................ 56 0.91 0.09 N/A
Year ended 11/30/1993........................ 81 0.89 0.08 N/A
Period ended 11/30/1992*..................... 7 1.05+ 0.01 N/A
PRIMARY B
Period ended 03/31/1997*##................... 75% 1.46%+ $ (0.01) $ 0.0604
INVESTOR A
Year ended 03/31/1997##...................... 75% 1.21% $ 0.02 $ 0.0604
Period ended 03/31/1996(a)................... 25 1.21+ 0.01 0.0632
Year ended 11/30/1995........................ 80 1.23 0.06 N/A
Year ended 11/30/1994........................ 56 1.16 0.07 N/A
Year ended 11/30/1993........................ 81 1.14 0.06 N/A
Period ended 11/30/1992*..................... 7 1.30+ 0.00(b) N/A
INVESTOR C
Year ended 03/31/1997##...................... 75% 1.46% $ (0.01) $ 0.0604
Period ended 03/31/1996(a)................... 25 1.58+ 0.00(b) 0.0632
Year ended 11/30/1995........................ 80 1.98 (0.03) N/A
Year ended 11/30/1994........................ 56 1.91 (0.02) N/A
Year ended 11/30/1993........................ 81 1.89 0.00(b) N/A
Period ended 11/30/1992*..................... 7 2.05+ 0.00(b) N/A
INVESTOR N
Year ended 03/31/1997##...................... 75% 1.96% $ (0.08) $ 0.0604
Period ended 03/31/1996(a)................... 25 1.96+ (0.02) 0.0632
Year ended 11/30/1995........................ 80 1.98 (0.03) N/A
Year ended 11/30/1994........................ 56 1.91 (0.01) N/A
Period ended 11/30/1993*..................... 81 1.89+ (0.02) N/A
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
91
<PAGE> 94
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET REALIZED
NET ASSET AND NET INCREASE/ DISTRIBUTIONS
VALUE NET UNREALIZED (DECREASE) IN FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE REALIZED
OF YEAR INCOME/(LOSS) ON INVESTMENTS FROM OPERATIONS CAPITAL GAINS
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS EMERGING GROWTH FUND
PRIMARY A
Year ended 03/31/1997#....................... $14.04 $ (0.04) $ 0.20 $ 0.16 $ (1.34)
Period ended 03/31/1996#(a).................. 14.28 (0.00)(b) 1.26 1.26 (1.50)
Year ended 11/30/1995........................ 11.41 0.01 3.26 3.27 (0.40)
Year ended 11/30/1994#....................... 10.87 (0.03) 0.71 0.68 (0.14)
Period ended 11/30/1993*..................... 10.00 (0.01) 0.89 0.88 (0.01)
PRIMARY B
Period ended 03/31/1997#*.................... $15.08 $ (0.08) $(0.85) $ (0.93) $ (1.34)
INVESTOR A
Year ended 03/31/1997#....................... $13.91 $ (0.07) $ 0.19 $ 0.12 $ (1.34)
Period ended 03/31/1996#(a).................. 14.17 (0.01) 1.25 1.24 (1.50)
Year ended 11/30/1995........................ 11.35 (0.01) 3.23 3.22 (0.40)
Year ended 11/30/1994#....................... 10.85 (0.06) 0.70 0.64 (0.14)
Period ended 11/30/1993*..................... 9.87 (0.03) 1.02 0.99 (0.01)
INVESTOR C
Year ended 03/31/1997#....................... $13.56 $ (0.10) $ 0.19 $ 0.09 $ (1.34)
Period ended 03/31/1996#(a).................. 13.87 (0.03) 1.22 1.19 (1.50)
Year ended 11/30/1995........................ 11.20 (0.08) 3.15 3.07 (0.40)
Year ended 11/30/1994#....................... 10.78 (0.14) 0.70 0.56 (0.14)
Period ended 11/30/1993*..................... 9.89 (0.09) 0.98 0.89 --
INVESTOR N
Year ended 03/31/1997#....................... $13.61 $ (0.18) $ 0.20 $ 0.02 $ (1.34)
Period ended 03/31/1996#(a).................. 13.93 (0.05) 1.23 1.18 (1.50)
Year ended 11/30/1995........................ 11.24 (0.07) 3.16 3.09 (0.40)
Year ended 11/30/1994#....................... 10.82 (0.14) 0.70 0.56 (0.14)
Period ended 11/30/1993*..................... 9.88 (0.02) 0.96 0.94 --
<CAPTION>
TOTAL NET ASSET
DIVIDENDS VALUE
AND END OF
DISTRIBUTIONS PERIOD
-------------------------------------
<S> <C> <C>
NATIONS EMERGING GROWTH FUND
PRIMARY A
Year ended 03/31/1997#....................... $ (1.34) $ 12.86
Period ended 03/31/1996#(a).................. (1.50) 14.04
Year ended 11/30/1995........................ (0.40) 14.28
Year ended 11/30/1994#....................... (0.14) 11.41
Period ended 11/30/1993*..................... (0.01) 10.87
PRIMARY B
Period ended 03/31/1997#*.................... $ (1.34) $ 12.81
INVESTOR A
Year ended 03/31/1997#....................... $ (1.34) $ 12.69
Period ended 03/31/1996#(a).................. (1.50) 13.91
Year ended 11/30/1995........................ (0.40) 14.17
Year ended 11/30/1994#....................... (0.14) 11.35
Period ended 11/30/1993*..................... (0.01) 10.85
INVESTOR C
Year ended 03/31/1997#....................... $ (1.34) $ 12.31
Period ended 03/31/1996#(a).................. (1.50) 13.56
Year ended 11/30/1995........................ (0.40) 13.87
Year ended 11/30/1994#....................... (0.14) 11.20
Period ended 11/30/1993*..................... -- 10.78
INVESTOR N
Year ended 03/31/1997#....................... $ (1.34) $ 12.29
Period ended 03/31/1996#(a).................. (1.50) 13.61
Year ended 11/30/1995........................ (0.40) 13.93
Year ended 11/30/1994#....................... (0.14) 11.24
Period ended 11/30/1993*..................... -- 10.82
</TABLE>
- ---------------
* Nations Emerging Growth Fund's Primary A, Primary B, Investor A, Investor C
and Investor N Shares commenced operations on December 4, 1992, June 28,
1996, December 10, 1992, December 18, 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.
# 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) Amount represents less than $0.01 per share.
(c) Average commission rate paid per share of securities purchased and sold by
the Fund.
(d) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements and net investment income per share was less than 0.01% and
$0.01, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
92
<PAGE> 95
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
NET ASSETS OPERATING NET INVESTMENT
END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO
TOTAL PERIOD AVERAGE TO AVERAGE TURNOVER
RETURN++ (IN 000'S) NET ASSETS NET ASSETS RATE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS EMERGING GROWTH FUND
PRIMARY A
Year ended 03/31/1997#....................... 0.48% $267,319 0.98%(d) (0.26)% 93%
Period ended 03/31/1996#(a).................. 9.87 295,764 0.99+ (0.06)+ 39
Year ended 11/30/1995........................ 29.95 269,484 0.98 0.08 139
Year ended 11/30/1994#....................... 6.26 182,459 1.01 (0.29) 129
Period ended 11/30/1993*..................... 8.81 121,281 0.80+ (0.15)+ 159
PRIMARY B
Period ended 03/31/1997#*.................... (6.80)% $ 2,897 1.48%+(d) (0.76)%+ 93%
INVESTOR A
Year ended 03/31/1997#....................... 0.18% $ 12,126 1.23%(d) (0.51)% 93%
Period ended 03/31/1996#(a).................. 9.80 7,802 1.24+ (0.31)+ 39
Year ended 11/30/1995........................ 29.65 5,765 1.23 (0.17) 139
Year ended 11/30/1994#....................... 5.90 3,234 1.26 (0.54) 129
Period ended 11/30/1993*..................... 9.99 2,095 1.05+ (0.40)+ 159
INVESTOR C
Year ended 03/31/1997#....................... (0.04)% $ 1,437 1.48%(d) (0.76)% 93%
Period ended 03/31/1996#(a).................. 9.64 936 1.61+ (0.68)+ 39
Year ended 11/30/1995........................ 28.67 805 1.98 (0.92) 139
Year ended 11/30/1994#....................... 5.19 542 2.01 (1.29) 129
Period ended 11/30/1993*..................... 9.00 469 1.80+ (1.15)+ 159
INVESTOR N
Year ended 03/31/1997#....................... (0.57)% $ 33,342 1.98%(d) (1.26)% 93%
Period ended 03/31/1996#(a).................. 9.52 34,989 1.99+ (1.06)+ 39
Year ended 11/30/1995........................ 28.75 32,349 1.98 (0.92) 139
Year ended 11/30/1994#....................... 5.17 15,909 2.01 (1.29) 129
Period ended 11/30/1993*..................... 9.51 3,594 1.80+ (1.15)+ 159
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
------------------------------
RATIO OF
OPERATING
EXPENSES TO NET INVESTMENT AVERAGE
AVERAGE INCOME/(LOSS) COMMISSION RATE
NET ASSETS PER SHARE PAID(c)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NATIONS EMERGING GROWTH FUND
PRIMARY A
Year ended 03/31/1997#....................... 0.98%(d) $(0.04)(d) $0.0562
Period ended 03/31/1996#(a).................. 0.99%+ (0.00)(b) 0.0599
Year ended 11/30/1995........................ 0.98 0.01 N/A
Year ended 11/30/1994#....................... 1.01 (0.03) N/A
Period ended 11/30/1993*..................... 1.01+ (0.03) N/A
PRIMARY B
Period ended 03/31/1997#*.................... 1.48%+(d) $(0.08)(d) $0.0562
INVESTOR A
Year ended 03/31/1997#....................... 1.23%(d) $(0.07)(d) $0.0562
Period ended 03/31/1996#(a).................. 1.24+ (0.01) 0.0599
Year ended 11/30/1995........................ 1.23 (0.01) N/A
Year ended 11/30/1994#....................... 1.26 (0.05) N/A
Period ended 11/30/1993*..................... 1.26+ (0.04) N/A
INVESTOR C
Year ended 03/31/1997#....................... 1.48%(d) $(0.10)(d) $0.0562
Period ended 03/31/1996#(a).................. 1.61+ (0.03) 0.0599
Year ended 11/30/1995........................ 1.98 (0.08) N/A
Year ended 11/30/1994#....................... 2.01 (0.12) N/A
Period ended 11/30/1993*..................... 2.01+ (0.11) N/A
INVESTOR N
Year ended 03/31/1997#....................... 1.98%(d) $(0.18)(d) $0.0562
Period ended 03/31/1996#(a).................. 1.99+ (0.05) 0.0599
Year ended 11/30/1995........................ 1.98 (0.07) N/A
Year ended 11/30/1994#....................... 2.01 (0.09) N/A
Period ended 11/30/1993*..................... 2.01+ (0.03) N/A
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
93
<PAGE> 96
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET
NET REALIZED DECREASE
NET ASSET AND IN NET DIVIDENDS
VALUE NET UNREALIZED ASSET VALUE FROM NET
BEGINNING INVESTMENT LOSS FROM INVESTMENT
OF PERIOD INCOME ON INVESTMENTS OPERATIONS INCOME
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS MANAGED SMALLCAP INDEX FUND
PRIMARY A
Period ended 03/31/1997*..................... $10.00 $ 0.03 $(0.17) $ (0.14) $ (0.03)
PRIMARY B
Period ended 03/31/1997*..................... $10.00 $ 0.02 $(0.17) $ (0.15) $ (0.02)
INVESTOR A
Period ended 03/31/1997*..................... $10.00 $ 0.03 $(0.18) $ (0.15) $ (0.03)
INVESTOR C
Period ended 03/31/1997*..................... $10.00 $ 0.03 $(0.17) $ (0.14) $ (0.03)
<CAPTION>
DISTRIBUTIONS
IN EXCESS
OF NET
INVESTMENT
INCOME
-----------------------------
<S> <C><C>
NATIONS MANAGED SMALLCAP INDEX FUND
PRIMARY A
Period ended 03/31/1997*..................... $ (0.00)(b)
PRIMARY B
Period ended 03/31/1997*..................... $ (0.00)(b)
INVESTOR A
Period ended 03/31/1997*..................... $ (0.00)(b)
INVESTOR C
Period ended 03/31/1997*..................... $ (0.00)(b)
</TABLE>
- ---------------
* Nations Managed SmallCap Index Fund's Primary A, Primary B, Investor A and
Investor C Shares commenced operations on October 15, 1996.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
(a) Average commission rate paid per share of securities purchased and sold by
the Fund.
(b) Amount represents less than $0.01 per share.
SEE NOTES TO FINANCIAL STATEMENTS.
94
<PAGE> 97
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING
DIVIDENDS VALUE END OF EXPENSES TO
AND END OF TOTAL PERIOD AVERAGE
DISTRIBUTIONS PERIOD RETURN++ (IN 000'S) NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS MANAGED SMALLCAP INDEX FUND
PRIMARY A
Period ended 03/31/1997*..................... $ (0.03) $9.83 (1.37)% $ 40,851 0.50%+
PRIMARY B
Period ended 03/31/1997*..................... $ (0.02) $9.83 (1.51)% $ 86 1.00%+
INVESTOR A
Period ended 03/31/1997*..................... $ (0.03) $9.82 (1.52)% $ 334 0.75%+
INVESTOR C
Period ended 03/31/1997*..................... $ (0.03) $9.83 (1.46)% $ 19 1.00%+
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
------------------------------
RATIO OF RATIO OF
NET INVESTMENT OPERATING
INCOME PORTFOLIO EXPENSES TO NET INVESTMENT AVERAGE
TO AVERAGE TURNOVER AVERAGE INCOME/(LOSS) COMMISSION RATE
NET ASSETS RATE NET ASSETS PER SHARE PAID(a)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS MANAGED SMALLCAP INDEX FUND
PRIMARY A
Period ended 03/31/1997*..................... 1.05%+ 18% 1.21%+ $ 0.01 $0.0279
PRIMARY B
Period ended 03/31/1997*..................... 0.55%+ 18% 1.71%+ $ 0.00(b) $0.0279
INVESTOR A
Period ended 03/31/1997*..................... 0.80%+ 18% 1.46%+ $ 0.01 $0.0279
INVESTOR C
Period ended 03/31/1997*..................... 0.55%+ 18% 1.71%+ $ 0.01 $0.0279
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
95
<PAGE> 98
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
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-three separate portfolios and the Company offers five
separate portfolios. Information presented in these financial statements
pertains only to: Nations Balanced Assets Fund, Nations Equity Income Fund,
Nations Value Fund, Nations Managed Index Fund, Nations Equity Index Fund,
Nations Disciplined Equity Fund, Nations Capital Growth Fund, Nations Emerging
Growth Fund and Nations Managed SmallCap Index 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 (except
Nations Managed Index Fund, Nations Equity Index Fund and Nations Managed
SmallCap Index Fund) currently offer five classes of shares: Primary A Shares,
Primary B Shares, Investor A Shares, Investor C Shares and Investor N Shares.
Nations Managed Index Fund currently offers Primary A Shares, Investor A Shares
and Investor C Shares. Nations Equity Index Fund currently offers Primary A
Shares, Primary B Shares and Investor A Shares. Nations Managed SmallCap Index
Fund currently offers Primary A Shares, Primary B Shares, Investor A Shares and
Investor C 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
differ from the interests of any other class.
1. SIGNIFICANT ACCOUNTING POLICIES.
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 which are traded on a
recognized stock exchange are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sale price
on a national securities market. Securities traded only on over-the-counter
markets are valued on the basis of the closing over-the-counter bid prices or,
if no sale occurred on such day, at the mean of the current bid and asked
prices. 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 by the investment adviser 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, including joint repurchase agreement transactions in which the
company along with other registered investment companies advised by NationsBanc
Advisors, Inc. ("NBAI"), a wholly-owned subsidiary of NationsBank, N.A.
("NationsBank"), invest their aggregate cash balances in one or more large
repurchase agreements. 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 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 right 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 the investment adviser, distributor or
any of their affiliates. The Funds' investment adviser, acting under the
supervision of the Board of Trustees or the Board of Directors, monitors the
value of collateral received as well as the creditworthiness of those banks and
dealers with which the Funds enter into repurchase agreements to evaluate
potential risks.
Futures Contracts: Nations Managed Index Fund, Nations Equity Index Fund and
Nations Managed SmallCap Index Fund may invest in futures contracts for the
purpose of hedging against changes in values of the Fund's securities or changes
in the prevailing levels of interest rates or currency exchange rates or for
gaining exposure to the equity market. Upon entering into a futures contract,
the Fund is required to deposit with the broker an amount of cash or cash
96
<PAGE> 99
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
equivalents equal to a certain percentage of the contract amount. This is known
as the "initial margin." Subsequent payments ("variation margin") are made or
received by the Fund each day, depending on the daily fluctuation of the value
of the contract.
During the period the futures contract is open, changes in the value of the
contract are recognized as unrealized gains or losses by "marking-to-market" on
a daily basis to reflect the market value of the contract at the end of each
day. The Fund recognizes a realized gain or loss, when the contract is closed,
equal to the difference between the proceeds from (or cost of) the closing
transaction and the Fund's basis in the contract.
Risks arise in the possible movement of the securities or indices underlying
those investments. Risks also include the possibility that there may not be a
liquid secondary market for these contracts, that a change in the value of the
contract may not correlate with changes in the value of the underlying
securities or that the counterparty to a contract may default on its obligation
to perform.
Securities Transactions and Investment Income: Securities transactions are
accounted for on trade date. Realized gains and losses are computed based on the
specific identification of the securities sold. Interest income, adjusted for
accretion of discounts and amortization of premiums calculated ratably, is
earned from settlement date and is recorded on an accrual basis. Dividend income
is 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.
Dividends and Distributions to Shareholders: It is the policy of each Fund to
declare and pay dividends from net investment income each calendar quarter. Each
Fund will distribute net realized capital gains (including net short-term
capital gains), annually after the fiscal year in which the income is 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 differing
treatments of income and gains on various investment securities held by the
Fund, timing differences and differing characterization of distributions made by
the Fund as a whole.
Reclassifications are made to each Fund's capital accounts to reflect income and
gains available for distribution (or available capital loss carryforwards) under
Federal income tax regulations. Certain reclassification adjustments are made
among undistributed net investment income, realized gain and loss and paid in
capital due to different book and tax accounting for organization costs,
paydowns, net operating loss, currency gains and losses and distributions from
investments in REITS.
Reclassifications for the period ended March 31, 1997 were as follows:
<TABLE>
<CAPTION>
INCREASE/(DECREASE)
INCREASE/(DECREASE) INCREASE/ ACCUMULATED NET
UNDISTRIBUTED NET (DECREASE) REALIZED
INVESTMENT INCOME PAID-IN CAPITAL GAIN/(LOSS)
----------------------------------------------------------
<S> <C> <C> <C>
Nations Balanced Assets Fund................. $ (55,402) -- $ 55,402
Nations Equity Income Fund................... (23,766) $ 2 23,764
Nations Managed Index Fund................... 43,704 (43,701) (3)
Nations Equity Index Fund.................... (13) -- 13
Nations Emerging Growth Fund................. 1,329,587 (1) (1,329,586)
Nations Managed SmallCap Index Fund.......... 12,278 (12,278) --
</TABLE>
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 relative net assets. Operating expenses directly
attributable to a Fund or class of shares are charged to such Fund's or class's
97
<PAGE> 100
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 net
assets of each class of shares.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS.
Each of the Trust and the Company has, on behalf of its Funds, entered into an
investment advisory agreement (the "Investment Advisory Agreements") with NBAI
pursuant to which NBAI provides investment advisory services to the Funds. Under
the terms of this Investment Advisory Agreement, NBAI is entitled to receive an
advisory fee calculated daily and payable monthly based on the following annual
rates multiplied by the daily net assets of each Fund:
<TABLE>
<CAPTION>
ANNUAL RATE
----------
<S> <C>
Nations Balanced Assets Fund, Nations Value Fund, Nations Disciplined Equity
Fund, Nations Capital Growth Fund and Nations Emerging Growth Fund............. 0.75%
Nations Managed Index Fund, Nations Equity Index Fund and Nations Managed
SmallCap Index Fund............................................................ 0.50%
</TABLE>
<TABLE>
<CAPTION>
FEES ON ASSETS FEES ON ASSETS FEES ON ASSETS
UP TO BETWEEN $100 EXCEEDING
$100 MILLION AND $250 MILLION $250 MILLION
-------------------------------------------------
<S> <C> <C> <C>
Nations Equity Income Fund........................ 0.75% 0.70% 0.60%
</TABLE>
Each of the Trust and the Company has, on behalf of its Funds, entered into a
sub-advisory agreement (the "Sub-Advisory Agreements") with NBAI and TradeStreet
Investment Associates, Inc. ("TradeStreet"), a wholly-owned subsidiary of
NationsBank. Under the terms of the Sub-Advisory Agreements, TradeStreet is
entitled to receive a sub-advisory fee from NBAI for each Fund at the following
annual rates of each Fund's average daily net assets:
<TABLE>
<CAPTION>
ANNUAL RATE
----------
<S> <C>
Nations Balanced Assets Fund..................................................... 0.25%
Nations Equity Income Fund....................................................... 0.20%
Nations Value Fund............................................................... 0.25%
Nations Managed Index Fund....................................................... 0.10%
Nations Equity Index Fund........................................................ 0.10%
Nations Disciplined Equity Fund.................................................. 0.25%
Nations Capital Growth Fund...................................................... 0.25%
Nations Emerging Growth Fund..................................................... 0.25%
Nations Managed SmallCap Index Fund.............................................. 0.10%
</TABLE>
Stephens Inc. ("Stephens") serves as the administrator of the Trust and the
Company pursuant to separate administration agreements (the "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 co-administration
agreements (the "Co-Administration Agreements"). Pursuant to the Administration
and Co-Administration Agreements, Stephens and First Data 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
Funds Family) on a combined basis. NationsBank serves as the sub-administrator
of the Trust and the Company pursuant to a sub-administration agreement (the
"Sub-Administration Agreement") with Stephens. For the year ended March 31,
1997, Stephens earned $2,211,897 from the Funds for its administration services,
of which $366,503 was paid to NationsBank for its services as sub-administrator.
98
<PAGE> 101
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The investment adviser, sub-adviser, administrator and co-administrator may,
from time to time, voluntarily reduce their fees payable by each Fund. For the
year ended March 31, 1997, the investment adviser voluntarily waived fees and
reimbursed expenses as follows:
<TABLE>
<CAPTION>
FEES WAIVED BY EXPENSES REIMBURSED
ADVISER BY ADVISER
-------------------------------------
<S> <C> <C>
Nations Managed Index Fund.................................. $ 86,414 $22,720
Nations Equity Index Fund................................... 1,534,132 --
Nations Managed SmallCap Index Fund......................... 44,990 18,619
</TABLE>
NationsBank of Texas, N.A.("NationsBank of Texas") acts as the custodian for the
Funds and, for the year ended March 31, 1997, earned $462,587 for providing such
services. On October 18, 1996, The Bank of New York ("BONY") was appointed
sub-custodian for the Funds. BONY serves as custodian of the Trust's and
Company's assets. The Trust and the Company accrue a credit on daily cash
balances held at BONY. The earnings credit is applied to the monthly custody
fee. For the year ended March 31, 1997, the earnings credit was $14,590.
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 Shares of the Funds
and, for the year ended March 31, 1997, earned approximately $46,326 for
providing such services.
Stephens also serves as distributor of the Funds' shares. For the year ended
March 31, 1997, the Funds were informed that the distributor received $686,326
in contingent deferred sales charges from shares which were subject to such
charges. A substantial portion of these fees are paid to affiliates of
NationsBank and NBAI.
No officer, director or employee of NationsBank, 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. The Trust and the Company pay each unaffiliated 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 unaffiliated Trustee or Director in attending such
meetings.
The Trust's and the Company's eligible Trustees or Directors, respectively, may
participate in a nonqualified deferred compensation 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, a fund of
the Company. The expense for the deferred compensation plan is included in
"Trustees'/Directors' fees and expenses" in 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 C Shares and Investor N Shares of each Fund
(except Nations Equity Index Fund); and a distribution plan ("Distribution
Plan") pursuant to Rule 12b-1 for Investor C Shares and Investor N Shares of
each Fund (collectively, the "Plans") (except Nations Equity Index 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 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 Plans are accrued daily and paid monthly at a rate set, from
time to time, by the Funds. Fees incurred pursuant to the Plans are charged as
expenses of each Fund directly to the Primary B Shares, Investor A Shares,
Investor C Shares and Investor N Shares, respectively.
99
<PAGE> 102
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the year ended March 31, 1997, the effective rates incurred by the Funds, as
a percentage of average daily net assets, pursuant to the Plans were 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 Balanced Assets Fund ............ 0.50% 0.25% 0.25% 0.25% 0.50% 0.25%
Nations Equity Income Fund............... 0.50 0.25 0.25 0.25 0.50 0.25
Nations Value Fund....................... 0.50 0.25 0.25 0.25 0.50 0.25
Nations Managed Index Fund............... -- 0.25 0.25 0.25 N/A N/A
Nations Equity Index Fund................ 0.50 0.25 N/A N/A N/A N/A
Nations Disciplined Equity Fund.......... 0.50 0.25 0.25 0.25 0.75 0.25
Nations Capital Growth Fund.............. 0.50 0.25 0.25 0.25 0.75 0.25
Nations Emerging Growth Fund ............ 0.50 0.25 0.25 0.25 0.75 0.25
Nations Managed SmallCap Index Fund...... 0.50 0.25 0.25 0.25 N/A N/A
</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 year ended March
31, 1997 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-----------------------------
<S> <C> <C>
Nations Balanced Assets Fund...................................... $381,145,196 $398,290,792
Nations Equity Income Fund........................................ 349,270,978 438,589,158
Nations Value Fund................................................ 649,596,017 589,987,083
Nations Managed Index Fund........................................ 44,544,234 4,661,648
Nations Equity Index Fund......................................... 349,785,526 19,245,075
Nations Disciplined Equity Fund................................... 165,155,983 196,216,213
Nations Capital Growth Fund....................................... 538,096,705 959,554,839
Nations Emerging Growth Fund...................................... 300,176,999 317,296,274
Nations Managed SmallCap Index Fund............................... 43,745,456 2,975,215
</TABLE>
The aggregate cost of purchases and proceeds from sales of long-term U.S.
government securities for the year ended March 31, 1997 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-----------------------------
<S> <C> <C>
Nations Balanced Assets Fund...................................... $209,769,589 $224,302,917
Nations Equity Income Fund........................................ 31,775,721 43,630,299
Nations Capital Growth Fund....................................... 14,065,649 8,421,174
</TABLE>
100
<PAGE> 103
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At March 31, 1997, aggregate gross unrealized appreciation and unrealized
depreciation for tax purposes were as follows:
<TABLE>
<CAPTION>
TAX BASIS TAX BASIS
UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION
-----------------------------
<S> <C> <C>
Nations Balanced Assets Fund...................................... $ 3,393,295 $ 7,871,090
Nations Equity Income Fund........................................ 27,112,105 9,973,393
Nations Value Fund................................................ 296,057,542 14,499,223
Nations Managed Index Fund........................................ 3,453,835 579,685
Nations Equity Index Fund......................................... 113,354,766 9,357,002
Nations Disciplined Equity Fund................................... 17,281,266 3,791,483
Nations Capital Growth Fund....................................... 113,163,505 22,185,706
Nations Emerging Growth Fund...................................... 46,783,600 19,250,533
Nations Managed SmallCap Index Fund............................... 980,834 2,964,659
</TABLE>
5. SHARES OF BENEFICIAL INTEREST/CAPITAL STOCK.
As of March 31, 1997, an unlimited number of shares without par value were
authorized for the Trust and 420,000,000,000 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.
6. ORGANIZATION COSTS.
The Funds bear all costs in connection with its 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
a straight-line basis 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 Equity Income Fund, Nations Value Fund and Nations Disciplined Equity
Fund have been fully amortized.
7. LINE OF CREDIT.
The Trust and the Company participate in an uncommitted line of credit provided
by BONY under a line of credit agreement dated February 28, 1997 (the
"Agreement"). 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 $25 million or 25% of its net assets.
Interest on borrowings is payable at the Federal Funds Rate plus 0.50% on an
annualized basis. The Agreement requires, among other things, that each
participating Fund maintain a ratio of no less than 4 to 1 net assets (not
including funds borrowed pursuant to the Agreement) to aggregate amount of
indebtedness pursuant to the Agreement. Prior to executing the Agreement with
BONY, the Trust and the Company participated in a line of credit agreement with
Mellon Bank N.A.
101
<PAGE> 104
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Borrowings for the year ended March 31, 1997 by the Funds under the agreements
are disclosed below:
<TABLE>
<CAPTION>
AVERAGE
MAXIMUM AVERAGE DEBT INTEREST RATE
AMOUNT AMOUNT AVERAGE PER -------------- INTEREST
FUND OUTSTANDING OUTSTANDING SHARES SHARE HIGH LOW EXPENSE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Nations Disciplined
Equity Fund....................................... $6,700,000 $96,164 7,743,441 $0.01 5.82% 5.60% $5,587
Nations Capital
Growth Fund....................................... 9,400,000 36,986 57,344,163 0.00(a) 5.90 5.50 2,100
</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 year ended
March 31, 1997.
8. REORGANIZATION.
Nations Capital Growth Fund ("Acquiring Fund") acquired the assets and certain
liabilities of the Peachtree Equity Fund ("Acquired Fund") 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
depreciation included in the Acquired Fund's total net assets at the acquisition
date are as follows:
<TABLE>
<CAPTION>
VALUE OF TOTAL NET
SHARES SHARES TOTAL NET TOTAL NET ASSETS OF ACQUIRED
ISSUED BY ISSUED BY ASSETS OF ASSETS OF ACQUIRING FUND
ACQUIRING ACQUIRED ACQUISITION ACQUIRING ACQUIRING ACQUIRED ACQUIRING FUND AFTER UNREALIZED
FUND FUND DATE FUND FUND FUND FUND ACQUISITION APPRECIATION
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nations
Capital Peachtree
Growth Equity
Fund... Fund 09/27/96 6,613,086 $95,758,235 $95,758,235 $697,812,337 $793,570,572 $24,195,257
</TABLE>
9. SIGNIFICANT CONCENTRATIONS.
On February 26, 1997, NationsBank Corporation's (the "Corporation") Asset
Management Group announced plans to sell its Institutional Trust, Retirement
Services and Corporate Trust businesses (collectively, the "Businesses"). The
Businesses make significant use of the Nations Family of Funds (the "Nations
Funds") to satisfy their clients' investment needs. It is uncertain at this
point what impact, if any, the sale of these Businesses will have on the Nations
Funds and its shareholders. Currently, however, the investment adviser does not
believe that a significant impact to the overall financial condition and
operating performance of the Funds will occur.
10. SUBSEQUENT EVENT.
Each of the Trust and the Company, is a party to an Agreement and Plan of
Reorganization with The Pilot Funds (which are advised by Boatmen's Trust
Company, an affiliate of NationsBank Corporation since January 7, 1997) pursuant
to which certain Nations Funds portfolios will acquire the assets of The Pilot
Funds portfolios. The shareholders of The Pilot Funds voted to approve the
proposed reorganizations on or before May 14, 1997. As of March 31, 1997, net
assets of the fourteen funds comprising The Pilot Funds were approximately $6.5
billion. The reorganization involves the following Funds:
<TABLE>
<CAPTION>
NATIONS FUNDS PILOT FUNDS
- ------------------------------------------------------------------------------------------------------
<S> <C>
Equity Income Fund Equity Income Fund
Value Fund Growth and Income Fund
Disciplined Equity Fund Growth Fund
</TABLE>
102
<PAGE> 105
NATIONS FUNDS
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS, DIRECTORS AND TRUSTEES OF NATIONS FUNDS
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Nations Balanced Assets Fund,
Nations Equity Income Fund, Nations Value Fund, Nations Managed Index Fund,
Nations Equity Index Fund, Nations Disciplined Equity Fund, Nations Capital
Growth Fund, Nations Emerging Growth Fund, and Nations Managed SmallCap Index
Fund (collectively referred to as the "Funds") at March 31, 1997 and the results
of each of their operations, the changes in each of their net assets and their
financial highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at March 31, 1997 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
May 15, 1997
103
<PAGE> 106
NATIONS FUNDS
- --------------------------------------------------------------------------------
TAX INFORMATION (UNAUDITED)
For the year ended March 31, 1997, the amount of long term capital gain
distributed to shareholders by the Trust and the Company was as follows:
<TABLE>
<S> <C>
Nations Balanced Assets Fund............................................ $ 12,534,401
Nations Equity Income Fund.............................................. 35,829,047
Nations Value Fund...................................................... 87,246,189
Nations Equity Index Fund............................................... 1,614,296
Nations Disciplined Equity Fund......................................... 9,235,154
Nations Capital Growth Fund............................................. 170,280,102
Nations Emerging Growth Fund............................................ 25,629,103
</TABLE>
Of the ordinary income (including short-term capital gain) distributions
made by the Trust and the Company during the fiscal year ended March 31, 1997,
the following percentages qualify for the dividend received deduction available
to corporate shareholders:
<TABLE>
<S> <C>
Nations Balanced Assets Fund.................................................. 14.61%
Nations Equity Income Fund.................................................... 23.23%
Nations Value Fund............................................................ 78.40%
Nations Managed Index Fund.................................................... 91.88%
Nations Equity Index Fund..................................................... 100.00%
Nations Disciplined Equity Fund............................................... 65.19%
Nations Capital Growth Fund................................................... 100.00%
Nations Managed SmallCap Index Fund........................................... 87.12%
</TABLE>
Under current tax law, net capital and currency losses realized after
October 31 may be deferred and treated as occurring on the first day of the
following fiscal year. In the fiscal year ended March 31, 1997, Nations Managed
SmallCap Index Fund elected to defer a capital loss of $6,657 occurring between
November 1, 1996 and March 31, 1997 under these rules.
104
<PAGE> 107
THE NATIONS FUNDS FAMILY
EQUITY FUNDS
GROWTH
Nations Emerging Markets Fund
Nations Pacific Growth Fund
Nations International Equity Fund
Nations Managed Smallcap Index Fund
Nations Emerging Growth Fund
Nations Disciplined Equity Fund
Nations Capital Growth Fund
GROWTH AND INCOME
Nations Value Fund
Nations Managed Index Fund
Nations Equity Index Fund
Nations Equity Income Fund
Nations Balanced Assets Fund
LIFEGOAL PORTFOLIOS
LifeGoal Growth Portfolio
LifeGoal Balanced Growth Portfolio
LifeGoal Income and Growth Portfolio
BOND FUNDS
INCOME
Nations Global Government Income Fund
Nations Diversified Income Fund
Nations Strategic Fixed Income Fund
Nations Government Securities Fund
Nations Short-Intermediate Government Fund
Nations Short-Term Income Fund
TAX-EXEMPT INCOME
Nations Municipal Income Fund
Nations Intermediate Municipal Bond Fund
Nations Short-Term Municipal Income Fund
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
MONEY MARKET FUNDS
Nations Prime Fund
Nations Government Money Market Fund
Nations Treasury Fund
Nations Tax Exempt Fund
For more complete information on Nations Funds mutual funds, including
charges and expenses, please contact Nations Funds or your Investment
Representative for a current prospectus. Please read the prospectus carefully
before you invest or send money.
<PAGE> 108
This report is submitted for the general information of shareholders of Nations
Funds. This material must be preceded or accompanied by a current Nations Funds
prospectus.
<PAGE> 109
NATIONS ---------------
FUNDS BULK RATE
U.S. POSTAGE
P.O. Box 34602 PAID
Charlotte, NC 28234-4602 N. READING, MA
Toll Free 1-800-982-2271 PERMIT NO.
105
---------------
AR1 IN-96116-397
