<PAGE>
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[LOGO OF NATIONS FUNDS APPEARS HERE]
[PICTURE OF TREE APPEARS HERE]
Investments For A Lifetime(SM)
Managed
Index(SM)
Funds
Nations
Managed Value
Index Fund
Nations
Managed Index
Fund
Nations
Managed SmallCap
Value Index Fund
Nations
Managed SmallCap
Index Fund
Semi-Annual Report For The Period
Ended September 30, 1998
- -------------------------------------------------
<PAGE>
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.
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.
[SEAL APPEARS HERE]
<PAGE>
NATIONS FUNDS
DEAR SHAREHOLDER:
Thus far in 1998, equity investors have experienced a "roller-coaster" ride that
has been both dramatic and ugly. Stock mutual funds of almost every stripe and
color fell sharply during the third quarter. According to Lipper Analytical
Services, Inc., the average diversified U.S. stock fund posted a negative 15%
return during the quarter, with small company funds losing over 21%.
International equity funds also experienced downturns over the last three
months, with diversified international funds losing 16% on average and emerging
markets funds sliding a steep 23%.*
The three months ending September 30 represented the worst quarter for U.S.
stock funds since the third quarter of 1990. At that time, we were in a heated
showdown with Saddam Hussein and Iraq. The obvious question on everyone's mind
today is: what are the drivers causing the extreme volatility being experienced
in the markets ? We think that the answer may be as simple as a shift in
psychology by investors. From January 1997 through July 1998, investors were
comfortable with assuming risk - almost too comfortable. Equity valuations
reflected a close to perfect environment. Bond yield comparisons to U.S.
Treasuries also reflected a comfort with credit risk. However, Russia's debt
default in August 1998 was the last in a combination of bad news and
uncertainties that changed the prevailing mind set and compelled investors to
run for cover. Global anxieties were sufficient over-all to push investors in
one direction: "risk avoidance."
As we look forward, several thoughts come to mind that lead us to remain
optimistic: 1) interest rates have dropped to thirty-year lows and the U.S.
economy is very rate sensitive; 2) inflation remains in check; 3) corporate
profits, while slowing, should pick up if our economy avoids recession; 4)
Japan's government is attacking its banking crisis with an approach similar to
that used in the U.S. savings and loan crisis in the 1980s, and 5) the Federal
Reserve Board has twice moved in the last month to lower the target on the
Federal Funds rate in an effort to fend off any "credit crunch."
While the risk for recession in 1999 is growing, we believe that conditions in
the U.S. will remain sound and that next year will be another year of positive
economic activity. Consistent monetary policy, a solid fiscal condition, low
inflation, and high employment are important ingredients for our economic
picture. Investors need to remain alert and appreciate the fact that changing
conditions may translate into further market volatility. On behalf of our
shareholders, we will stay vigilant in our work as we pursue the Funds'
objectives.
Sincerely,
/s/ A. Max Walker /s/ Robert H. Gordon
A. Max Walker Robert H. Gordon
President and Chairman of the Board President, NationsBanc Advisors, Inc.
September 30, 1998
Source for all statistical data: TradeStreet Investment Associates, Inc.
* Lipper Analytical Services, Inc. is an independent fund performance monitor.
Past performance is no guarantee of future results.
<PAGE>
[This page intentionally left blank.]
<PAGE>
Table
Of
Contents
Financial Statements
Statements of Net Assets 1
Statements of Operations 25
Statements of Changes in Net Assets 26
Schedules of Capital Stock Activity 28
Financial Highlights 31
Notes to Financial Statements 39
<PAGE>
NATIONS FUNDS
Nations Managed Value Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- ---------------------------------------------------------------
Common Stocks - 99.1%
Aerospace and Defense - 2.4%
2,800 Boeing Company ....................$ 97
250 General Dynamics Corporation....... 13
350 Honeywell Inc...................... 22
650 Lockheed Martin Corporation........ 66
550 Northrop Grumman Corporation....... 40
700 Raytheon Company, Class B.......... 38
----------
276
----------
Apparel and Textiles - 0.5%
500 Nike Inc., Class B ................ 18
500 Russell Corporation ............... 13
200 Springs Industries Inc ............ 7
650 V.F. Corporation .................. 24
----------
62
----------
Automobile and Truck Manufacturers - 4.1%
2,700 Chrysler Corporation .............. 129
4,500 Ford Motor Company ................ 211
1,850 General Motors Corporation ........ 101
200 ITT Industries .................... 7
900 PACCAR Inc ........................ 37
----------
485
----------
Automobile Parts Manufacturers - 0.8%
700 Cooper Tire & Rubber .............. 13
550 Dana Corporation .................. 21
350 Eaton Corporation ................. 22
450 Goodyear Tire & Rubber Company .... 23
700 Navistar International Corporation. 16
----------
95
----------
Banks - 9.8%
600 BB&T Corporation .................. 18
1,950 Banc One Corporation .............. 83
1,550 BankBoston Corporation ............ 51
3,150 Bank of New York Inc .............. 86
650 Bankers Trust N.Y. Corporation .... 38
1,300 Citicorp .......................... 121
350 Comerica Inc ...................... 19
750 First Chicago Corporation NBD ..... 51
2,800 First Union Corporation ........... 143
700 Fleet Financial Group Inc ......... 51
900 KeyCorp ........................... 26
550 Mellon Bank Corporation ........... 30
300 Mercantile Bancorporation Inc ..... 15
400 Morgan (J.P.) & Company Inc ....... 34
250 Northern Trust Corporation ........ 17
2,050 Norwest Corporation ............... 73
600 PNC Bank Corporation .............. 27
1,350 Regions Financial Corporation ..... 49
600 Republic New York Corporation ..... 24
350 Summit Bankcorp ................... 13
1,050 SunTrust Banks Inc. ............... 65
400 Wachovia Corporation .............. 34
250 Wells Fargo ....................... 89
----------
1,157
----------
Beverages - 0.3%
600 Coors (Adolph) Company, Class B ... 28
300 Seagram Company Ltd ............... 9
----------
37
----------
Cable - 0.6%
1,650 MediaOne Group Inc.+ .............. 73
----------
Chemicals - Basic - 1.5%
1,100 Air Products & Chemicals Inc. ..... 33
850 Dow Chemical Company .............. 73
300 FMC Corporation + ................. 15
600 Goodrich (B.F.) Company ........... 20
400 PPG Industries Inc ................ 22
250 Union Carbide Corporation ......... 11
----------
174
----------
Chemicals - Specialty - 0.4%
400 Engelhard Corporation ............. 7
950 Morton International Inc.,
Industries ....................... 21
650 Praxair Inc. ...................... 21
----------
49
----------
Coal, Gas and Pipeline - 0.5%
1,800 Coastal Corporation ............... 61
----------
Computer Related - 3.5%
4,800 Compaq Computer Corporation ....... 152
500 Data General Corporation + ........ 5
1,000 Electronic Data Systems Corporation 33
3,000 Hewlett-Packard Company ........... 159
1,050 Seagate Technology + .............. 26
400 Silicon Graphics + ................ 4
750 Sun Microsystems Inc.+ ............ 37
----------
416
----------
Computer Software - 0.3%
900 Apple Computer Inc.+ .............. 34
----------
Construction - 1.0%
500 Case Corporation .................. 11
1,150 Centex Corporation ................ 40
800 Fluor Corporation ................. 33
200 Kaufman & Broad Home Corporation .. 5
1,250 Pulte Corporation ................. 31
----------
120
----------
Containers - 0.1%
400 Crown Cork & Seal Inc ............. 11
----------
Diversified - 1.8%
1,400 AlliedSignal Inc .................. 50
1 See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
Nations Managed Value Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------
Diversified - (continued)
900 Fortune Brands Inc. ...............$ 27
650 Loews Corporation ................. 55
1,200 RJR Nabisco Holdings Corporation .. 30
900 Tenneco Inc ....................... 30
350 Textron Inc. ...................... 21
----------
213
----------
Drugs - 0.6%
1,350 Pharmacia & Upjohn Inc. ........... 68
----------
Electric Power - 8.7%
300 American Electric Power Inc ....... 15
700 Apache Corp ....................... 19
900 Baltimore Gas & Electric Company .. 29
450 Carolina Power & Light Company .... 21
1,550 Central & South West Corporation .. 44
1,000 Consolidated Edison Company
New York Inc ...................... 52
1,300 DTE Energy Company ................ 59
650 Dominion Resources Inc. ........... 30
850 Duke Energy Corporation ........... 56
2,000 Edison International .............. 51
450 Entergy Corporation ............... 14
750 FPL Group Inc. .................... 52
1,550 FirstEnergy Corporation ........... 48
500 GPU Inc ........................... 21
1,750 Houston Industries Inc. ........... 54
2,900 Niagara Mohawk Power Corporation+ . 45
750 Northern States Power Corporation . 21
1,100 PECO Energy Company ............... 40
2,300 PG&E Corporation .................. 73
1,100 PP&L Resources Inc ................ 28
1,450 PacifiCorp ........................ 28
1,650 Public Service Enterprise Group ... 65
2,600 Southern Company .................. 77
550 Texas Utilities Company ........... 26
1,350 Unicom Corporation ................ 50
----------
1,018
----------
Electronics - 1.2%
400 AMP Inc ........................... 14
500 Harris Corporation ................ 16
700 LSI Logic Corporation + .......... 9
1,600 Motorola Inc ...................... 68
850 Rockwell International Corporation. 31
300 Tektronix Inc. .................... 5
----------
143
----------
Environmental - 0.5%
1,250 Browning-Ferris Industries Inc .... 38
450 Johnson Controls Inc .............. 21
----------
59
----------
Exploration and Drilling - 0.3%
400 Burlington Resources Inc. ......... 15
750 Helmerich & Payne Inc. ............ 16
----------
31
----------
Financial Services - 7.1%
1,150 American General Corporation ...... 73
850 Associates First Capital
Corporation ....................... 55
1,000 Bear Stearns Companies Inc ........ 31
350 Cincinnati Financial Corp ......... 11
900 Countrywide Credit Industries Inc . 37
3,050 Federal National Mortgage
Association ....................... 196
1,500 First Data Corporation ............ 35
1,200 Household International Inc ....... 45
1,000 Lehman Brothers Holdings Inc. ..... 28
500 Marsh & McLennan Companies Inc. ... 25
850 Merrill Lynch & Company Inc. ...... 40
2,250 Morgan Stanley Dean Witter &
Company ........................... 97
400 Transamerica Corporation .......... 42
3,300 Travelers Group Inc ............... 124
----------
839
----------
Food Producers - 0.5%
3,350 Archer-Daniels-Midland Company .... 56
----------
Food Retailers - 0.8%
350 Albertson's Company ............... 19
550 American Stores Company ........... 18
750 Great Atlantic & Pacific Tea Inc .. 18
1,450 SuperValu Inc ..................... 34
----------
89
----------
Furniture and Appliances - 0.4%
200 Black & Decker Corporation ........ 8
750 Whirlpool Corporation ............. 35
----------
43
----------
Insurance - 5.4%
450 Aetna Inc. ........................ 31
3,100 Allstate Corporation .............. 129
400 Aon Corporation ................... 26
350 Chubb Corporation ................. 22
1,000 CIGNA Corporation ................. 66
1,700 Conseco Inc ....................... 52
150 General Re Corporation ............ 30
450 Hartford Financial Services Group
Inc. .............................. 21
450 Jefferson-Pilot Corporation ....... 27
600 Lincoln National Corporation Ltd .. 49
700 MBIA Inc .......................... 38
600 MGIC Investment Corporation ....... 22
150 Progressive Corporation ........... 17
1,100 Provident Companies Inc. .......... 37
320 St. Paul Companies Inc. ........... 10
450 SunAmerica Inc. ................... 27
350 Torchmark Corporation ............. 13
300 UNUM Corporation .................. 15
----------
632
----------
See Notes to Financial Statements. 2
<PAGE>
NATIONS FUNDS
Nations Managed Value Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------------------------
Machinery and Equipment - 2.6%
1,050 Ball Corp ...................................... $ 37
1,350 Caterpillar Inc. . ............................. 60
750 Cincinnati Milacron ............................ 12
350 Cooper Industries Inc. ......................... 14
400 Cummins Engine Inc. ............................ 12
1,150 Deere & Company ................................ 35
1,400 Ingersoll-Rand Company ......................... 53
900 McDermott International Inc. ................... 24
150 NACCO Industries Inc., Class A ................. 15
700 Parker-Hannifin Corporation .................... 21
900 Thermo Electron Corporation .................... 14
500 Timken Company ................................. 8
----------
305
----------
Media - 2.3%
1,450 CBS Corporation ................................ 35
500 Clear Channel Communications + ................. 24
1,750 Time Warner Inc. ............................... 153
950 Viacom Inc., (non-voting), Class B + ........... 55
----------
267
----------
Medical Products and Supplies - 0.4%
400 Allergan Inc. .................................. 23
350 Mallinckrodt Inc. .............................. 7
400 United States Surgical Corporation ............. 17
----------
47
----------
Medical Services - 1.3%
1,300 Columbia/HCA Healthcare Corporation ............ 26
250 HCR Manor Care Inc.+ ........................... 7
1,800 HEALTHSOUTH Corporation + ...................... 19
950 Humana Inc.+ ................................... 16
1,750 Tenet Healthcare Corporation + ................. 50
950 United Healthcare Corporation .................. 33
----------
151
----------
Metals and Mining - 1.1%
1,700 Alcan Aluminum Ltd. ............................ 40
400 Aluminum Company of America .................... 28
1,600 Barrick Gold Corp. ............................. 32
550 Reynolds Metals Company ........................ 28
----------
128
----------
Networking Products - 0.3%
1,500 Novell Inc.+ ................................... 18
750 3 Com Corporation + ............................ 23
----------
41
----------
Oil - Domestic - 3.0%
200 Amerada Hess Corporation ....................... 12
2,750 Amoco Corporation .............................. 148
1,000 Ashland Inc. ................................... 46
800 Atlantic Richfield Company ..................... 57
150 Columbia Energy Group .......................... 8
100 Pennzoil Company ............................... 4
500 Phillips Petroleum Company ..................... 23
200 Sun Company Inc. ............................... 6
1,050 USX-Marathon Group ............................. 37
300 Unocal Corporation ............................. 11
----------
352
----------
Oil - International - 10.7%
1,900 Chevron Corporation ............................ 160
7,400 Exxon Corporation .............................. 519
2,300 Mobil Corporation .............................. 175
6,450 Royal Dutch Petroleum Company ADR .............. 307
1,500 Texaco Inc. .................................... 94
----------
1,255
----------
Oil Services - 0.8%
1,700 Baker Hughes Inc. .............................. 36
650 Enron Corporation .............................. 34
350 Halliburton Company ............................ 10
900 Rowan Companies Inc.+ .......................... 10
----------
90
----------
Paper and Forest Products - 1.8%
450 Boise Cascade Corporation ...................... 11
550 Champion International Corporation ............. 17
400 Georgia-Pacific Corporation .................... 18
1,250 International Paper Company .................... 58
200 Louisiana-Pacific Corporation .................. 4
700 Mead corporation ............................... 21
750 Potlatch Corporation ........................... 26
300 Temple-Inland Inc .............................. 14
400 Union Camp Corporation ......................... 16
200 Westvaco Corporation ........................... 5
450 Weyerhaeuser Company ........................... 19
----------
209
----------
Photo Equipment and Supplies - 0.5%
800 Eastman Kodak Company .......................... 62
----------
Printing and Publishing - 0.6%
450 American Greetings Corporation, Class A ........ 18
700 Donnelley (R.R.) & Sons ...................... 25
700 Ikon Office Solutions Inc. ..................... 5
450 Knight-Ridder Inc. ............................. 20
----------
68
----------
Professional Services - 0.2%
1,750 Cendant Corporation + .......................... 20
----------
Recreation - 1.7%
1,300 Brunswick Corporation .......................... 17
5,900 Disney (Walt) Company .......................... 149
400 Fleetwood Enterprises Inc ...................... 12
850 Harrah's Entertainment Inc.+ ................... 11
300 Hasbro Inc. .................................... 9
----------
198
----------
3 See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
Nations Managed Value Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------------------------
Restaurants and Lodging - 1.3%
2,550 Darden Restaurants Inc. ........................ $ 41
1,900 McDonald's Corporation ......................... 113
----------
154
----------
Retail - Discount - 0.7%
3,500 Kmart Stores Corporation+ ...................... 42
500 Rite Aid Corporation ........................... 18
1,450 Toys R Us Inc.+ ................................ 23
----------
83
----------
Retail - General - 1.7%
400 Costco Companies Inc.+ ......................... 19
1,250 Dillards Inc. Class A .......................... 35
1,400 Federated Department Stores Inc.+ .............. 51
350 Longs Drug Stores Corporation .................. 14
350 May Department Stores Company .................. 18
600 Nordstrom Inc. ................................. 15
400 Penney (J.C.) Company Inc ...................... 18
800 Sears, Roebuck & Company ....................... 35
----------
205
----------
Retail - Specialty - 0.6%
150 Circuit City Stores Inc. ....................... 5
550 Limited Inc. ................................... 12
1,250 Lowe's Companies Inc. .......................... 40
150 Tandy Corporation .............................. 8
800 Venator Group Inc.+ ............................ 7
----------
72
----------
Savings and Loans - 0.9%
700 Ahmanson (H.F.) & Company ...................... 39
450 Golden West Financial Corporation .............. 37
800 Washington Mutual Inc. ......................... 27
----------
103
----------
Semiconductors - 0.7%
250 Advanced Micro Devices Inc.+ ................... 5
750 Applied Materials Inc.+ ........................ 19
450 Micron Technology Inc.+ ........................ 14
950 Texas Instruments Inc. ......................... 50
----------
88
----------
Steel - 0.3%
1,500 Bethlehem Steel Corporation+ ................... 12
1,200 USX-U.S. Steel Group ........................... 29
----------
41
----------
Telecommunications Equipment & Services - 0.1%
600 Nextel Communications Inc.+ .................... 12
----------
Transportation - Airlines - 0.9%
1,050 AMR Corporation+ ............................... 58
500 Delta Air Lines Inc. ........................... 49
----------
107
----------
Transportation - Railroads - 1.2%
2,700 Burlington Northern Santa Fe Inc. .............. 86
300 CSX Corporation ................................ 13
1,200 Norfolk Southern Corporation ................... 35
550 Union Pacific Corporation ...................... 7
----------
141
----------
Trucking and Shipping - 0.7%
1,100 FDX Corporation+ ............................... 50
1,450 Ryder Systems Inc. ............................. 36
----------
86
----------
Utilities - Natural Gas - 0.4%
250 Consolidated Natural Gas Company ............... 14
200 Sonat Inc ...................................... 6
850 Williams Companies Inc. ........................ 24
----------
44
----------
Utilities - Telephone - 9.2%
550 ALLTEL Corporation ............................. 26
6,050 AT&T Corporation ............................... 354
3,400 BellSouth Corporation .......................... 2560
5,300 MCI Worldcom Inc. .............................. 259
1,200 Sprint Corporation ............................. 86
1,900 U.S. West Inc. ................................. 100
----------
1,081
----------
Total Common Stocks (Cost $12,474) ............. 11,651
----------
Investment Company - 0.3% (Cost $34)
34,000 Nations Cash Reserves (a) ...................... 34
----------
Total Investments (Cost $12,508*)............99.4% 11,685
----------
Other Assets and Liabilities (Net) ...........0.6%
Receivable for Fund shares sold ................ 4
Dividends receivable ........................... 16
Receivable from investment advisor ............. 22
Prepaid expenses and other assets .............. 54
Payable for Fund shares redeemed ............... (1)
Administration fee payable ..................... (1)
Shareholder servicing and
distribution fees payable ................... (3)
Transfer agent fees payable .................... (4)
Custodian fees payable ......................... (11)
Accrued expenses and other liabilities ......... (13)
----------
Total Other Assets and Liabilities (Net)........ 63
----------
Net Assets.............................100.0% $ 11,748
==========
See Notes to Financial Statements. 4
<PAGE>
NATIONS FUNDS
Nations Managed Value Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
(000)
- --------------------------------------------------------------------------------
Net Asset Value, Offering and Redemption Price per
Share
Primary A Shares:
($8,940,000/904,263 shares outstanding) $ 9.88
Investor A Shares:
($2,799,000/283,128 shares outstanding) $ 9.88
Investor C Shares:
($9,000/901 shares outstanding) $ 9.88
At September 30, 1998, Net Assets Consist Of:
Paid-in capital ................................ $ 12,471
Undistributed net investment income ............ 47
Accumulated net realized gain on
investments sold ............................... 53
Net unrealized depreciation of investments ..... (823)
------
Net Assets ..................................... $ 11,748
======
- ------------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $632,000 and gross
depreciation of $1,455,000 for federal income tax purposes. At September
30, 1998, the aggregate cost of securities for federal income tax purposes
was $12,508,000.
+ Non-income producing security.
(a) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates,
Inc.
5 See Notes to Financial Statements
<PAGE>
NATIONS FUNDS
Nations Managed Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------------------------
Common Stocks - 98.1%
Aerospace and Defense - 1.3%
43,700 Boeing Company ............................................$ 1,500
15,000 General Dynamics Corporation .............................. 753
13,600 Lockheed Martin Corporation ............................... 1,371
8,500 Northrop Grumman Corporation .............................. 621
23,600 Raytheon Company, Class B ................................. 1,273
8,400 TRW Inc. .................................................. 373
18,900 United Technologies Corporation ........................... 1,445
--------
7,336
--------
Apparel and Textiles - 0.3%
23,000 Fruit of the Loom Inc., Class A+ .......................... 346
8,700 Liz Claiborne Inc. ........................................ 227
1,700 Russell Corporation ....................................... 45
6,000 Springs Industries Inc. ................................... 209
17,800 V.F. Corporation .......................................... 661
--------
1,488
--------
Automobile and Truck Manufacturers - 2.33333333333333333333%
68,200 Chrysler Corporation ...................................... 3,265
121,400 Ford Motor Company ........................................ 5,698
48,600 General Motors Corporation ................................ 2,658
16,800 ITT Industries ............................................ 569
18,700 PACCAR Inc. ............................................... 770
--------
12,960
--------
Automobile Parts Manufacturers - 0.4%
1,500 Autozone, Inc.+ ........................................... 36
20,800 Cooper Tire & Rubber ...................................... 374
17,000 Dana Corporation .......................................... 634
4,800 Eaton Corporation ......................................... 301
11,200 Goodyear Tire & Rubber Company ............................ 575
26,600 Navistar International Corporation+ ....................... 602
--------
2,522
--------
Banks - 5.6%
45,100 Banc One Corporation ...................................... 1,922
20,400 BankBoston Corporation .................................... 673
11,400 Bankers Trust N.Y. Corporation ............................ 673
42,000 Bank of New York Inc. ..................................... 1,150
89,000 Chase Manhattan Corporation ............................... 3,849
32,600 Citicorp .................................................. 3,030
15,400 Comerica Inc. ............................................. 844
16,500 Fifth Third Bancorp ....................................... 949
20,500 First Chicago Corporation NBD ............................. 1,404
64,200 First Union Corporation ................................... 3,286
19,700 Fleet Financial Group Inc. ................................ 1,447
32,500 KeyCorp ................................................... 938
22,000 Mellon Bank Corporation ................................... 1,211
10,600 Mercantile Bancorporation Inc. ............................ 513
12,100 Morgan (J.P.) & Company Inc. .............................. 1,024
22,700 National City Corporation ................................. 1,497
42,600 Norwest Corporation ....................................... 1,525
26,100 PNC Bank Corporation ...................................... 1,175
300 Regions Financial Corporation ............................. 11
12,400 Republic New York Corporation ............................. 490
12,700 Summit Bancorp ............................................ 476
14,200 SunTrust Banks Inc. ....................................... 880
33,000 U.S. Bancorp .............................................. 1,174
14,300 Wachovia Corporation ...................................... 1,219
--------
31,360
--------
Beverages - 2.6%
33,500 Anheuser-Busch Companies Inc. ............................. 1,809
156,500 Coca-Cola Company ......................................... 9,018
32,800 Coors (Adolph) Company, Class B ........................... 1,507
78,500 PepsiCo Inc. .............................................. 2,311
--------
14,645
--------
Bio Specialty Pharmaceuticals - 0.3%
21,700 Amgen Inc.+ ............................................... 1,639
--------
Cable - 0.2%
27,800 MediaOne Group Inc.+ ...................................... 1,235
--------
Chemicals - Basic - 1.9%
16,000 Air Products & Chemicals Inc. ............................. 476
15,600 Dow Chemical Company ...................................... 1,333
62,600 du Pont (E.I.) de Nemours & Company ....................... 3,513
6,000 Eastman Chemical Company .................................. 303
27,600 FMC Corporation+ .......................................... 1,423
26,700 Goodrich (B.F.) Company ................................... 873
10,200 Great Lakes Chemical Corporation .......................... 397
5,600 Mallinckrodt Inc. ......................................... 114
23,900 Monsanto Company .......................................... 1,347
12,900 Rohm & Haas Company ....................................... 359
13,600 Union Carbide Corporation ................................. 587
--------
10,725
--------
Chemicals - Specialty - 0.3%
8,000 Avery Dennison Corporation ................................ 350
23,000 Engelhard Corporation ..................................... 407
21,200 Grace (W.R.) & Company .................................... 264
7,600 Morton International Inc., Industries ..................... 166
11,700 Praxair Inc. .............................................. 382
--------
1,569
--------
Coal, Gas and Pipeline - 0.4%
74,600 Coastal Corporation ....................................... 2,518
--------
Computer Related - 5.4%
4,200 Ceridian Corporation+ ..................................... 241
90,100 Cisco Systems Inc.+ ....................................... 5,569
87,200 Compaq Computer Corporation ............................... 2,758
89,700 Dell Computer Corporation+ ................................ 5,898
26,300 EMC Corporation+ .......................................... 1,504
6,300 Gateway 2000 Inc.+ ........................................ 328
53,800 Hewlett-Packard Company ................................... 2,848
11,000 Honeywell Inc. ............................................ 705
See Notes to Financial Statements. 6
<PAGE>
NATIONS FUNDS
Nations Managed Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------
Computer Related - (continued)
66,100 International Business Machines
Corporation ......................... $ 8,461
17,900 Seagate Technology Inc.+ ............... 449
28,700 Sun Microsystems Inc.+ ................. 1,430
--------
30,191
--------
Computer Services - 0.7%
9,000 Automatic Data Processing Inc. ......... 673
40,500 Computer Associates International Inc. . 1,498
10,400 Computer Sciences Corporation+ ......... 556
64,400 Unisys Corporation+ .................... 1,465
--------
4,192
--------
Computer Software - 3.8%
36,900 Apple Computer Inc.+ ................... 1,407
11,800 Autodesk Inc. .......................... 310
167,400 Microsoft Corporation+ ................. 18,424
42,600 Oracle Systems Corporation+ ............ 1,241
--------
21,382
--------
Construction - 0.9%
14,200 Case Corporation ....................... 309
31,400 Centex Corporation ..................... 1,083
22,250 Crane Company .......................... 523
12,800 Fluor Corporation ...................... 526
31,800 Kaufman & Broad Home Corporation ....... 745
23,900 Masco Corporation ...................... 589
3,300 Owens Corning .......................... 107
40,100 Pulte Corporation ...................... 985
9,600 Sherwin-Williams Company ............... 208
--------
5,075
--------
Consumer Products - 0.0% #
100 Clorox Company ......................... 8
--------
Containers - 0.1%
9,100 Crown Cork & Seal Inc. ................. 243
9,900 Owens-Illinois Inc.+ ................... 248
--------
491
--------
Cosmetics and Toiletry - 1.5%
10,100 Colgate-Palmolive Company .............. 692
59,100 Gillette Company ....................... 2,261
79,900 Proctor & Gamble Company ............... 5,668
--------
8,621
--------
Diversified - 1.4%
21,200 Aeroquip-Vickers Inc. .................. 609
39,100 AlliedSignal Inc. ...................... 1,383
62,900 Fortune Brands Inc. .................... 1,863
11,300 Loews Corporation ...................... 953
12,000 Tenneco Inc. ........................... 395
11,700 Textron Inc. ........................... 709
39,900 Tyco International Ltd. ................ 2,204
--------
8,116
--------
Drugs - 7.6%
72,000 American Home Products Corporation ..... 3,771
59,300 Bristol-Myers Squibb Company ........... 6,160
62,200 Lilly (Eli) & Company .................. 4,871
77,500 Merck & Company Inc. ................... 10,041
87,000 Pfizer Inc. ............................ 9,217
41,200 Schering-Plough Corporation ............ 4,267
57,100 Warner-Lambert Company ................. 4,311
--------
42,638
--------
Electric Power - 5.7%
8,700 Ameren Corporation ..................... 365
13,800 American Electric Power Inc. ........... 674
100 Apache Corporation ..................... 3
29,400 Baltimore Gas & Electric Company ....... 981
10,300 Carolina Power & Light Company ......... 475
69,200 Central & South West Corporation ....... 1,977
23,000 Consolidated Edison Inc. ............... 1,199
49,500 DTE Energy Company ..................... 2,237
52,500 Dominion Resources Inc. ................ 2,343
19,400 Duke Energy Corporation ................ 1,284
6,100 Eastern Enterprises .................... 257
88,000 Edison International ................... 2,261
16,200 Entergy Corporation .................... 498
32,900 FPL Group Inc. ......................... 2,293
19,300 FirstEnergy Corporation ................ 600
8,700 GPU Inc ................................ 370
29,700 Houston Industries Inc. ................ 924
59,400 Niagara Mohawk Power Corporation+ ...... 913
10,000 Northern States Power Corporation ...... 281
63,600 PECO Energy Company .................... 2,325
84,400 PG&E Corporation ....................... 2,696
11,500 PP&L Resources Inc. .................... 298
51,900 Public Service Enterprise Group ........ 2,040
67,400 Southern Company ....................... 1,984
200 Texas Utilities Company ................ 9
67,300 Unicom Corporation ..................... 2,515
--------
31,802
--------
Electrical Equipment - 3.2%
200 Emerson Electric Company ............... 12
216,000 General Electric Company ............... 17,186
9,200 Raychem Corporation .................... 224
10,900 Thomas & Betts Corporation ............. 415
--------
17,837
--------
Electronics - 0.4%
16,300 Applied Materials Inc.+ ................ 411
5,900 Harris Corporation ..................... 188
15,600 Motorola Inc. .......................... 666
10,200 National Semiconductor Corporation+ .... 99
14,700 Rockwell International Corporation ..... 531
17,000 Tektronix Inc. ......................... 264
--------
2,159
--------
7 See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
Nations Managed Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- -------------------------------------------------------------------------------
Environmental - 0.3%
21,000 Browning-Ferris Industries Inc. ......................... $ 635
11,200 Johnson Controls Inc. ................................... 521
5,700 LSI Logic Corporation+ .................................. 72
32,700 Laidlaw Inc., Class B ................................... 309
9,300 Pioneer Hi Bred International ........................... 244
--------
1,781
--------
Exploration and Drilling - 0.0% #
4,800 Helmerich & Payne Inc. .................................. 101
--------
Financial Services - 5.2%
33,200 American Express Company ................................ 2,577
43,500 American General Corporation ............................ 2,779
25,300 Associates First Capital Corporation .................... 1,651
32,200 Bear Stearns Companies .................................. 996
4,500 Capital One Financial Corporation ....................... 466
20,500 Countrywide Credit Industries Inc. ...................... 853
49,400 Federal Home Loan Mortgage Corporation .................. 2,442
72,600 Federal National Mortgage Association ................... 4,665
24,400 First Data Corporation .................................. 573
20,400 Lehman Brothers Holdings Inc. ........................... 576
17,500 Marsh & McLennan Companies Inc. ......................... 871
17,700 MBNA Corporation ........................................ 507
26,700 Merrill Lynch & Company Inc. ............................ 1,265
73,800 Morgan Stanley Dean Witter & Company .................... 3,178
11,600 SLM Holding Corporation ................................. 376
6,700 Transamerica Corporation ................................ 710
78,600 Travelers Group Inc. .................................... 2,948
5,700 Wells Fargo & Company ................................... 2,024
--------
29,457
--------
Food Distributors - 0.1%
14,900 Sysco Corporation ....................................... 351
--------
Food Producers - 1.1%
41,535 Archer-Daniels-Midland Company .......................... 696
8,100 Campbell Soup Company ................................... 407
5,500 General Mills Inc. ...................................... 385
16,400 Heinz (H.J.) Company .................................... 838
7,700 Quaker Oats Company ..................................... 454
28,100 Sara Lee Corporation .................................... 1,517
28,300 Unilever NV ADR ......................................... 1,733
--------
6,030
--------
Food Retailers - 0.7%
17,500 Albertson's Inc. ........................................ 947
17,200 American Stores Company ................................. 554
4,600 Giant Food Inc., Class A ................................ 199
12,400 Great Atlantic & Pacific Tea Inc. ....................... 301
22,100 Kroger Company+ ......................................... 1,105
37,400 SuperValu Inc. .......................................... 872
--------
3,978
--------
Furniture and Appliances - 0.5%
3,000 Armstrong World Industries Inc. ......................... 160
12,000 Black & Decker Corporation .............................. 499
21,200 Maytag Corporation ...................................... 1,012
6,300 Newell Company .......................................... 290
12,800 Whirlpool Corporation ................................... 602
--------
2,563
--------
Insurance - 4.3%
10,700 Aetna Inc. .............................................. 744
98,700 Allstate Corporation .................................... 4,115
72,901 American International Group Inc. ....................... 5,613
11,800 Aon Corporation ......................................... 761
34,100 CIGNA Corporation ....................................... 2,255
57,400 Conseco Inc. ............................................ 1,754
5,800 General Re Corporation .................................. 1,177
16,900 Hartford Financial Services Group Inc. .................. 802
8,100 Jefferson- Pilot Corporation ............................ 490
24,900 Lincoln National Corporation Ltd. ....................... 2,048
9,200 MBIA Inc. ............................................... 494
8,400 MGIC Investment Corporation ............................. 309
5,200 Progressive Corporation ................................. 586
17,500 Provident Companies Inc. ................................ 591
6,400 Providian Corporation ................................... 543
14,100 SunAmerica Inc. ......................................... 860
11,300 Torchmark Corporation ................................... 406
10,300 UNUM Corporation ........................................ 512
--------
24,060
--------
Machinery and Equipment - 1.9%
19,900 Ball Corporation ........................................ 701
15,000 Briggs & Stratton Corporation ........................... 617
31,000 Caterpillar Inc. ........................................ 1,381
17,600 Cincinnati Milacron Inc. ................................ 272
10,700 Cooper Industries Inc. .................................. 436
7,900 Cummins Engine Inc. ..................................... 235
25,200 Deere & Company ......................................... 762
17,400 Dover Corporation ....................................... 537
4,200 Grainger (W.W.) Inc. .................................... 177
19,400 Illinois Tool Works Inc. ................................ 1,057
49,200 Ingersoll-Rand Company .................................. 1,867
21,000 McDermott International Inc. ............................ 566
9,800 NACCO Industries Inc., Class A .......................... 980
15,900 Parker-Hannifin Corporation ............................. 472
8,100 Thermo Electron Corporation+ ............................ 122
17,700 Timken Company .......................................... 268
--------
10,450
--------
Media - 1.6%
32,200 CBS Corporation ......................................... 781
10,600 Clear Channel Communications+ ........................... 504
16,400 Comcast Corporation, Class A ............................ 770
29,600 HBO & Company ........................................... 855
15,600 King World Productions Inc.+ ............................ 408
11,600 Omnicom Group Inc. ...................................... 522
40,000 Time Warner Inc. ........................................ 3,503
See Notes to Financial Statements. 8
<PAGE>
NATIONS FUNDS
Nations Managed Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- -------------------------------------------------------------------------------
Media -(continued)
24,900 Viacom Inc., Class B+ ...................................$ 1,444
-------
8,787
-------
Medical Products and Supplies - 2.6%
82,900 Abbott Laboratories ..................................... 3,601
30,800 Allergan Inc. ........................................... 1,798
3,700 Bausch & Lomb Inc. ...................................... 146
12,600 Baxter International Inc. ............................... 750
16,800 Becton, Dickinson & Company ............................. 691
8,900 Biomet Inc. ............................................. 309
14,600 Guidant Corporation ..................................... 1,084
76,900 Johnson & Johnson ....................................... 6,017
5,300 St. Jude Medical Inc.+ .................................. 122
5,300 United States Surgical Corporation ...................... 221
-------
14,739
-------
Medical Services - 0.7%
28,500 Columbia/HCA Healthcare Corporation ..................... 572
4,900 HCR Manor Care Inc.+ .................................... 143
31,000 HEALTHSOUTH Corporation+ ................................ 327
62,700 Humana Inc.+ ............................................ 1,027
10,000 IMS Health Inc. ......................................... 619
23,900 Tenet Healthcare Corporation+ ........................... 687
15,600 United Healthcare Corporation ........................... 546
-------
3,921
-------
Metals and Mining - 0.5%
18,000 Alcan Aluminum Ltd. ..................................... 422
12,000 Aluminum Company of America ............................. 852
2,100 ASARCO Inc. ............................................. 40
24,500 Barrick Gold Corporation ................................ 490
3,700 Cyprus Amax Minerals Company ............................ 49
4,200 Phelps Dodge Corporation ................................ 219
13,700 Placer Dome Inc., ADR ................................... 189
10,200 Reynolds Metals Company ................................. 518
-------
2,779
-------
Networking Equipment and Products - 0.1%
800 Ascend Communications Inc.+ ............................. 36
24,800 Novell Inc.+ ............................................ 304
-------
340
-------
Office Equipment - 0.5%
20,500 Pitney Bowes Inc. ....................................... 1,118
22,800 Xerox Corporation ....................................... 1,933
-------
3,051
-------
Oil - Domestic - 1.6%
6,800 Amerada Hess Corporation ................................ 392
55,200 Amoco Corporation ....................................... 2,974
31,600 Ashland Oil Inc. ........................................ 1,462
13,900 Atlantic Richfield Company .............................. 986
5,500 Columbia Energy Group ................................... 322
3,100 Kerr-McGee Corporation .................................. 141
10,000 Pennzoil Company ........................................ 351
18,000 Phillips Petroleum Company .............................. 818
14,600 Sun Company Inc. ........................................ 467
30,700 USX-Marathon Group ...................................... 1,088
-------
9,001
-------
Oil - International - 4.5%
31,700 Chevron Corporation ..................................... 2,665
158,600 Exxon Corporation ....................................... 11,132
43,400 Mobil Corporation ....................................... 3,296
136,600 Royal Dutch Petroleum Company, ADR ...................... 6,506
24,700 Texaco Inc. ............................................. 1,548
-------
25,147
-------
Oil Services - 0.8%
34,100 Baker Hughes Inc. ....................................... 714
23,100 Enron Corporation ....................................... 1,220
34,400 Halliburton Company ..................................... 983
13,100 Rowan Companies Inc.+ ................................... 147
22,300 Schlumberger Ltd. ....................................... 1,122
13,500 Sempra Energy ........................................... 352
-------
4,538
-------
Paper and Forest Products - 0.8%
4,900 Boise Cascade Corporation ............................... 124
9,900 Champion International Corporation ...................... 310
17,100 Fort James Corporation .................................. 561
11,600 Georgia-Pacific Corporation ............................. 529
21,100 International Paper Company ............................. 984
41,200 Louisiana-Pacific Corporation ........................... 839
17,900 Mead Corporation ........................................ 527
2,300 Potlatch Corporation .................................... 78
2,700 Temple-Inland Inc. ...................................... 129
4,500 Union Camp Corporation .................................. 177
10,000 Westvaco Corporation .................................... 240
-------
4,498
-------
Photo Equipment and Supplies - 0.5%
39,600 Eastman Kodak Company ................................... 3,062
-------
Printing and Publishing - 0.9%
9,700 American Greetings Corporation, Class A.................. 384
10,300 Donnelley (RR) & Sons ................................... 362
6,900 Dow Jones & Company Inc. ................................ 321
5,000 Dun & Bradstreet Corporation ............................ 135
21,500 Gannett Company Inc. .................................... 1,152
9,700 Ikon Office Solutions, Inc .............................. 70
24,500 Knight-Ridder Inc. ...................................... 1,090
6,900 McGraw-Hill Companies Inc. .............................. 547
4,900 Meredith Corporation .................................... 157
22,200 New York Times Company, Class A ......................... 611
8,000 Times Mirror Company, Class A ........................... 425
100 Tribune Company ......................................... 5
-------
5,259
-------
9 See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
Nations Managed Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- ----------------------------------------------------------------------------
Professional Services - 0.3%
53,500 Cendant Corporation+ ..................................$ 622
7,400 Deluxe Corporation .................................... 210
8,400 Interpublic Group of Companies Inc. ................... 453
17,700 Service Corporation International ..................... 564
--------
1,849
--------
Recreation - 0.9%
22,600 Brunswick Corporation ................................. 292
112,900 Disney (Walt) Company ................................. 2,858
30,700 Fleetwood Enterprises Inc. ............................ 927
20,400 Harrah's Entertainment Inc.+ .......................... 272
12,000 Hasbro Inc. ........................................... 354
13,400 Mattel Inc. ........................................... 375
--------
5,078
--------
Restaurants and Lodging - 0.9%
97,200 Darden Restaurants Inc. ............................... 1,555
17,000 Hilton Hotels Corporation ............................. 290
16,800 Marriot International Inc. Class A .................... 401
41,300 McDonald's Corporation ................................ 2,465
8,400 Tricon Global Restaurants Inc.+ ....................... 328
10,700 Wendy's International Inc. ............................ 237
--------
5,276
--------
Retail - Discount - 1.8%
60,900 Kmart Stores Corporation+ ............................. 727
22,800 Rite Aid Corporation .................................. 809
34,300 TJX Companies, Inc. ................................... 611
20,300 Toys R Us Inc.+ ....................................... 329
138,200 Wal-Mart Stores Inc. .................................. 7,549
--------
10,025
--------
Retail - General - 1.5%
14,300 Costco Companies Inc.+ ................................ 677
35,400 Dayton Hudson Corporation ............................. 1,266
23,800 Dillard Department Stores Inc., Class A ............... 674
52,400 Federated Department Stores Inc.+ ..................... 1,906
12,500 Longs Drug Stores Corporation ......................... 502
15,700 May Department Stores Company ......................... 809
31,000 Nordstrom Inc. ........................................ 767
10,600 Penney (J.C.) Company Inc. ............................ 476
27,200 Sears, Roebuck & Company .............................. 1,202
--------
8,279
--------
Retail - Specialty - 1.6%
7,100 Circuit City Stores Inc. .............................. 237
16,800 CVS Corporation ....................................... 736
29,100 Gap Inc. .............................................. 1,535
80,500 Home Depot Inc. ....................................... 3,180
22,400 Limited Inc. .......................................... 491
26,200 Lowe's Companies Inc. ................................. 833
2,700 Pep Boys-Manny, Moe & Jack ............................ 36
8,400 Tandy Corporation ..................................... 449
29,100 Venator Group Inc.+ ................................... 253
22,200 Walgreen Company ...................................... 978
--------
8,728
--------
Savings and Loans - 0.5%
19,400 Ahmanson (H.F.) & Company ............................. 1,076
10,300 Golden West Financial Corporation ..................... 843
21,300 Washington Mutual Inc. ................................ 719
--------
2,638
--------
Semiconductors - 1.8%
108,800 Intel Corporation ..................................... 9,330
17,000 Texas Instruments Inc. ................................ 897
--------
10,227
--------
Steel - 0.3%
65,700 Armco Inc.+ ........................................... 329
69,400 Bethlehem Steel Corporation+ .......................... 573
6,800 Nucor Corporation ..................................... 276
17,700 USX-U.S. Steel Group .................................. 423
--------
1,601
--------
Technology - 0.0% #
1,700 EG&G Inc. ............................................. 38
2,400 General Signal Corporation ............................ 81
--------
119
--------
Telecommunications - 1.7%
23,900 AirTouch Communications Inc.+ ......................... 1,362
5,800 Andrew Corporation+ ................................... 77
91,200 Lucent Technologies ................................... 6,299
35,700 Northern Telecommunications Ltd. ...................... 1,142
12,700 Tellabs Inc.+ ......................................... 506
--------
9,386
--------
Telecommunications Equipment - 0.0% #
8,400 General Instrument Corporation+ ....................... 182
--------
Tobacco - 1.1%
132,600 Philip Morris Companies Inc. .......................... 6,108
--------
Transportation - Airlines - 0.9%
25,400 AMR Corporation+ ...................................... 1,408
14,800 Delta Air Lines Inc. .................................. 1,439
64,400 Southwest Airlines Company ............................ 1,288
16,700 US Airways Group Inc.+ ................................ 845
--------
4,980
--------
Transportation - Railroads - 0.5%
87,300 Burlington Northern Santa Fe Inc. ..................... 2,794
6,100 CSX Corporation ....................................... 257
200 Norfolk Southern Corporation .......................... 6
--------
3,057
--------
Trucking and Shipping - 0.4%
35,600 FDX Corporation+ ...................................... 1,606
19,400 Ryder Systems Inc. .................................... 482
--------
2,088
--------
See Notes to Financial Statements. 10
<PAGE>
NATIONS FUNDS
Nations Managed Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------------------------
Utilities - Natural Gas - 0.2%
6,700 Consolidated Natural Gas Company ................. 365
9,000 NICOR Inc. ....................................... 373
1,500 ONEOK Inc. ....................................... 51
6,700 Sonat Inc. ....................................... 200
--------
989
--------
Utilities - Telephone - 8.1%
19,400 ALLTEL Corporation ............................... 919
78,100 Ameritech Corporation ............................ 3,700
153,400 AT&T Corporation ................................. 8,964
108,000 Bell Atlantic Corporation ........................ 5,231
86,900 BellSouth Corporation ............................ 6,539
69,100 GTE Corporation .................................. 3,801
129,963 MCI Worldcom Inc. ................................ 6,352
110,900 SBC Communications Inc. .......................... 4,928
29,400 Sprint Corporation ............................... 2,117
23,500 Tele Communication, Class A+ ..................... 919
35,300 U.S. West Inc. ................................... 1,851
--------
45,321
--------
Waste Disposal - 0.1%
17,300 Waste Management Inc. ............................ 831
--------
Total Common Stocks (Cost $460,694) ......... .... 551,164
--------
Investment Company - 4.0%(Cost $22,577)
22,577,000 Nations Cash Reserves (a) ........................ 22,577
--------
Principal
Amount
(000)
- ----------
U.S. Treasury Obligations - 0.1%(Cost $697)
$700,000 US Treasury Bill Discount Note
4.150%** 010/29/1998 ............................. 697
--------
Total Investments
(Cost $483,968*) .......................... 102.2% 574,438
--------
Other Assets and Liabilities (Net) ........ (2.2)%
Cash.............................................. 1
Receivable from investment securities
sold .......................................... 3,283
Receivable for Fund shares sold .................. 2,900
Dividends and interest receivable ................ 790
Unamortized organization costs ................... 6
Other assets ..................................... 1
Collateral on securities loaned .................. (18,070)
Payable for Fund shares redeemed ................. (917)
Investment advisory fee payable .................. (124)
Variation margin on future contracts
due to broker ................................. (79)
Administration fee payable ....................... (45)
Shareholder servicing and
distribution fees payable ..................... (28)
Transfer agent fees payable ...................... (30)
Custodian fees payable ........................... (3)
Accrued Trustees' fees and expenses .............. (10)
Accrued expenses and other liabilities ........... (9)
--------
Total Other Assets
and Liabilities (Net) ......................... (12,334)
--------
Net Assets ................................ 100.0% $562,104
========
Net Asset Value, Offering and Redemption Price per
Share
Primary A Shares:
($528,014,000/33,893,817 shares outstanding) $ 15.58
Primary B Shares:
($3,000/190 shares outstanding) $ 15.55
Investor A Shares:
($30,058,000/1,929,207 shares outstanding) $ 15.58
Investor C Shares:
($4,029,000/258,691 shares outstanding) $ 15.58
At September 30, 1998, Net Assets Consist Of:
Paid-in capital...........................................$ 475,606
Undistributed net investment income ....................... 205
Accumulated net realized loss on
investments sold and futures contracts ................. (4,141)
Net unrealized appreciation of investments
and futures contracts .................................. 90,434
--------
Net Assets ...............................................$ 562,104
========
- --------------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $115,141,000 and gross
depreciation of $24,671,000 for federal income tax purposes. At September
30, 1998, the aggregate cost of securities for federal income tax purposes
was $465,898,000.
** Rate represents annualized yield at date of purchase.
+ Non-income producing security.
# Amount represents less than 0.1%.
(a) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates,
Inc.
11 See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
Nations Managed SmallCap Value Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------------------------
Common Stocks - 97.8%
Apparel and Textiles - 2.5%
200 Authentic Fitness Corporation .................$ 3
850 Baker J. Inc. .................................. 4
950 Brown Group Inc. ............................... 15
1,750 Cone Mills Corporation+ ........................ 9
2,000 Delta Woodside Industries Inc. ................. 8
650 Galey & Lord Inc.+ ............................. 8
1,250 Guilford Mills Inc. ............................ 19
300 Haggar Company ................................. 3
1,750 Hartmarx Corporation+ .......................... 11
400 K-Swiss Inc., Class A .......................... 9
200 Osh Kosh B'Gosh, Class A ....................... 4
300 Oxford Industries Inc. ......................... 9
1,250 Phillips-Van Heusen Corporation ................ 12
1,150 Stride Rite Corporation ........................ 9
----------
123
----------
Automobile Parts Manufacturers -2.6%
1,250 Intermet Corporation ........................... 16
1,150 Myers Industries Inc. .......................... 27
1,450 Simpson Industries ............................. 15
650 Standard Motor Products+ ....................... 16
1,050 Standard Products Company ...................... 18
950 TBC Corporation+ ............................... 6
1,150 Titan Wheel International Inc. ................. 13
1,150 Wynn's International Inc. ...................... 20
----------
131
----------
Banks - 1.0%
300 Cullen Frost Bankers Inc. ...................... 14
400 First Midwest Bancorp Inc. ..................... 16
300 Silicon Valley Bancshares ...................... 5
650 Susquehanna Bancshares Inc. .................... 12
----------
47
----------
Basic Industries - 0.8%
1,150 Commercial Metals ............................. 26
1,150 Dravo Corporation ............................. 15
----------
41
----------
Beverages - 0.8%
1,050 Canadaiagua Brands Inc., Class A+ ............. 41
----------
Building Materials - 1.7%
1,050 Building Materials Holding Corporation ......... 14
850 Hughes Supply Inc. ............................. 24
300 Lone Star Industries ........................... 18
1,050 Texas Industries Inc. .......................... 26
----------
82
----------
Chemicals - Basic - 0.3%
400 Cambrex Corporation ............................ 9
200 Scotts Company (The), Class A+ ................. 6
----------
15
----------
Chemicals - Specialty - 1.5%
1,050 Geon Company ................................... 19
1,300 Hauser Inc. .................................... 5
850 McWhorter Technologies Inc.+ ................... 17
300 OM Group Inc. .................................. 8
200 Penford Corporation ............................ 3
950 Quaker Chemical Corporation .................... 15
400 TETRA Technologies Inc.+ ....................... 5
----------
72
----------
Commercial Services - 0.8%
950 Insurance Auto Auctions Inc.+ .................. 12
950 Interim Services+ ............................. 28
----------
40
----------
Computer Related - 1.9%
650 Applied Magnetics Corporation+ ................ 3
1,350 BancTec Inc.+ .................................. 19
1,550 CustomTracks Corporation+ ...................... 8
1,750 Exabyte Corporation+ ........................... 11
400 HADCO Corporation+ ............................. 10
300 Hutchinson Technology Inc.+ .................... 5
320 Learning Company Inc.+ ......................... 6
1,150 Read-Rire Corporation+ ......................... 12
1,350 Standard Microsystems Corporation+ ............. 10
1,000 System Software Associates Inc.+ ............... 5
300 Wall Data Inc.+ ................................ 5
----------
94
----------
Computer Services - 1.3%
1,150 Gerber Scientific Inc. ......................... 31
1,050 Primark Corporation+ ........................... 32
----------
63
----------
Construction - 4.4%
2,200 D.R. Horton Inc. ............................... 35
1,550 Insituform Technologies Inc., Class A+ ......... 21
1,050 MDC Holdings Inc. .............................. 19
2,200 Morrison Knudsen Corporation+ .................. 24
950 Ryland Group Inc. .............................. 23
1,250 Standard Pacific Corporation ................... 18
650 Stone & Webster Inc. ........................... 21
850 TJ International Inc. .......................... 16
1,050 Toll Brothers Inc.+ ............................ 24
650 U.S. Home Corporation+ ......................... 19
----------
220
----------
Consumer Goods - Durable - 4.4%
2,500 Fedders Corporation ............................ 13
950 Harman International Industries ................ 35
1,750 Kaman Corporation, Class A ..................... 30
2,850 La-Z Boy Inc. .................................. 56
1,450 Oakwood Homes Corporation ...................... 19
1,450 Russ Berrie & Company Inc. ..................... 28
1,050 Smithfield Foods Inc.+ ......................... 19
See Notes to Financial Statements.
12
<PAGE>
NATIONS FUNDS
Nations Managed SmallCap Value Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------------------------
Consumer Goods - Durable -(continued)
850 Thomas Industries Inc. ........................$ 18
---------
218
---------
Consumer Goods - Non-Durable - 0.8%
400 ABM Industries Inc. ............................ 12
300 Angelica Corporation. .......................... 5
650 Gibson Greetings Inc.+ ......................... 13
400 Kellwood Company ............................... 11
---------
41
---------
Convenience Stores - 0.4%
1,150 Casey's General Stores Inc. .................... 17
---------
Diversified - 1.5%
1,550 Justin Industries Inc. ......................... 24
1,250 Sierra Pacific Resources ....................... 49
---------
73
---------
Electric Power - 3.8%
650 CILCORP Inc. ................................... 34
1,250 Commonwealth Energy System Companies ........... 45
1,350 Eastern Utilities Association .................. 35
1,050 TNP Enterprises Inc. ........................... 37
750 United Illuminating Company .................... 39
---------
190
---------
Electrical Equipment - 0.5%
1,070 Intermagnetics General Corporation+ ............ 8
1,250 KEMET Corporation+ ............................. 14
200 Park Electrochemical Corporation ............... 3
---------
25
---------
Electronics - 3.3%
300 Analogic Corporation ........................... 10
200 Benchmark Electronics Inc.+ .................... 5
950 CTS Corporation ................................ 28
1,050 Checkpoint Systems Inc.+ ....................... 9
650 Dallas Semiconductor Corporation ............... 18
650 Electro Scientific Industries Inc.+ ............ 10
400 InterVoice Inc.+ ............................... 9
400 Itron Inc.+ .................................... 3
950 Kent Electronics Corporation+ .................. 10
850 Kulicke & Soffa Industries Inc.+ ............... 12
850 Methode Electronics Inc. ....................... 13
850 Pioneer Standard Electronics ................... 5
200 Speedfam International Inc.+ ................... 2
300 Ultratech Stepper Inc.+ ........................ 5
1,050 Unitrode Corporation+ .......................... 11
1,750 VLSI Technology Inc.+ .......................... 13
---------
163
---------
Energy - 0.5%
400 Barrett Resources Corporation+ ................. 8
1,750 Dames & Moore Inc. ............................. 18
---------
26
---------
Environmental - 0.5%
1,350 IMCO Recycling Inc. ............................ 19
300 Ionics Inc.+ ................................... 8
---------
27
---------
Financial Services - 5.3%
1,850 AMRESCO Inc.+ .................................. 14
1,050 Astoria Financial Corporation .................. 44
1,250 Commercial Federal Corporation ................. 29
200 Dain Rauscher Corporation ...................... 6
950 E* TRADE Group Inc.+ ........................... 18
1,750 Enhance Financial Services Group ............... 52
2,200 Interface Inc. ................................. 26
950 Keystone Financial Inc. ........................ 28
950 Riggs National Corporation ..................... 23
1,050 St. Paul Bancorp Inc. .......................... 23
---------
263
---------
Food Producers - 0.9%
1,150 Chiquita Brands International Inc. ............. 12
650 Corn Products International Corporation+ ....... 16
950 J&J Snack Foods Corporation+ ................... 18
---------
46
---------
Food Retailers - 1.8%
1,500 Earthgrains Company ............................ 47
2,300 Fleming Companies .............................. 28
950 Nash Finch Corporation ......................... 14
---------
89
---------
Furniture and Appliances - 1.2%
950 Bassett Furniture .............................. 28
1,050 Juno Lighting Inc. ............................. 24
1,050 Rival Company .................................. 8
---------
60
---------
Gas and Electric - 1.1%
300 Central Hudson Gas & Electric .................. 13
750 Orange and Rockland Utilities Inc. ............. 41
---------
54
Health Care Services - 0.2%
950 Coherent Inc.+ ................................. 9
---------
Information Services - 0.2%
1,250 Fritz Companies Inc.+ .......................... 9
---------
Insurance - 7.8%
750 ALLIED Group Inc. .............................. 36
1,250 Capital Re Corporation ......................... 34
1,050 Delphi Financial Group Inc., Class A+ .......... 41
100 Executive Risk Inc. ............................ 5
1,450 Fremont General Corporation .................... 70
1,450 Frontier Insurance Group Inc. .................. 19
650 Life Re Corporation ........................... 60
850 NAC Re Corporation ............................. 42
13
See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
Nations Managed SmallCap Value Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------------------------
Insurance -(continued)
1,050 Orion Capital Corporation ...............................$ 37
950 Selective Insurance Group ............................... 18
1,050 Sierra Health Services+ ................................. 21
100 Trenwick Group Inc. ..................................... 3
--------
386
--------
Iron/Steel - 0.1%
2,200 Northwestern Steel & Wire Company+ ...................... 4
--------
Machinery and Equipment - 1.6%
1,050 Applied Industrial Technologies Inc. .................... 17
340 Applied Power Inc., Class A ............................. 9
300 Astec Industries ........................................ 13
850 CPI Corporation ......................................... 20
1,050 Flow International Corporation+ ......................... 10
1,150 Paxar Corporation+ ...................................... 10
--------
79
--------
Manufacturing - 1.7%
180 Danaher Corporation ..................................... 5
950 Griffon Corporation+ .................................... 8
650 Integrated Circuit Systems Inc.+ ........................ 7
2,500 O'Sullivan Corporation+ ................................. 21
1,400 Smith (A.O.) Corporation ................................ 27
400 Trimble Navigation Limited Designs+ ..................... 4
1,150 Vicor Corporation+ ...................................... 9
--------
81
--------
Media - 0.1%
200 Xircom Inc.+ ............................................ 5
--------
Medical Products and Supplies - 1.6%
950 Circon Corporation+ ..................................... 9
400 Cohesion Technologies+ .................................. 1
400 Collagen Aesthetics Inc. ................................ 3
300 Datascope Corp.+ ........................................ 7
1,050 IDEXX Laboratories Inc.+ ................................ 25
1,300 Summit Technology Inc.+ ................................. 5
1,550 Sunrise Medical Inc.+ ................................... 16
650 Vertex Pharmaceuticals Inc.+ ............................ 15
--------
81
--------
Medical Services - 3.2%
1,050 ADAC Laboratories Designs ............................... 25
850 American Oncology Resources+ ............................ 9
1,550 Genesis Health Ventures+ ................................ 19
2,000 Integrated Health Services Inc. ......................... 34
1,450 Mariner Post-Acute Network Inc.+ ........................ 7
300 NCS Healthcare Inc., Class A+ ........................... 5
2,600 PhyCor Inc.+ ............................................ 13
300 Protein Design Labs Inc.+ ............................... 7
950 Universal Health Services Inc., Class B+ ................ 40
--------
159
--------
Metals and Mining - 1.2%
1,450 AMCOL International Corporation ......................... 16
400 Getchell Gold Corporation+ .............................. 8
5,200 Hecla Mining Company+ ................................... 26
1,250 Steel Technologies Inc. ................................. 9
--------
59
--------
Metal Processors & Fabricates - 0.6%
950 Amcast Industrial Corporation ........................... 14
850 Wolverine Tube Inc.+ .................................... 18
--------
32
--------
Office Supplies - 0.3%
1,050 Nashua Corporation. ..................................... 16
--------
Oil and Gas - 1.3%
1,150 Devon Energy Corporation ................................ 38
1,750 Input/Output, Inc+ ...................................... 14
1,150 Vintage Petroleum Inc. .................................. 13
--------
65
--------
Oil and Gas - Equipment and Services - 1.0%
1,250 Pool Energy Services Company+ ........................... 11
1,450 Seitel Inc.+ ............................................ 16
850 Wicor Inc. .............................................. 20
--------
47
--------
Oil and Gas - Exploration - 2.3%
1,850 Energen Corporation ..................................... 35
1,050 HS Resources Inc.+ ...................................... 12
400 KCS Energy Inc. ......................................... 2
950 Plains Resources Inc.+ .................................. 16
2,400 Santa Fe Energy Resources+ .............................. 23
200 Snyder Oil Corporation .................................. 3
2,600 Southwestern Energy Company ............................. 22
--------
113
--------
Oil and Gas - Extraction - 1.2%
850 New Field Exploration Company+ .......................... 19
1,450 Oceaneering International Inc.+ ......................... 21
2,500 Pride International Inc.+ ............................... 20
--------
60
--------
Paper and Forest Products - 0.1%
300 Schweitzer-Maudit International Inc. .................... 7
--------
Pharmaceuticals - 1.5%
1,350 ALPHARMA Inc., Class A .................................. 35
950 Regeneron Pharmaceuticals Inc.+ ......................... 7
950 Roberts Pharmaceutical Corporation+ ..................... 18
950 Syncor International Corporation+ ....................... 16
--------
76
--------
See Notes to Financial Statements. 14
<PAGE>
NATIONS FUNDS
Nations Managed SmallCap Value Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------------------------
Printing and Publishing - 1.9%
1,850 Bowne & Co. Inc. ....................................$ 31
1,050 Thomas Nelson Publisher ............................. 13
1,550 World Color Press Inc.+ ............................. 48
---------
92
---------
Professional Services - 1.1%
950 Franklin Covey Company+ ............................. 19
950 Norrell Corporation ................................. 14
1,450 Offshore Logistics Inc.+ ............................ 18
300 Volt Information Sciences Inc.+ ..................... 6
---------
57
---------
Protection and Safety Services - 0.1%
850 Rural/Metro Corporation+ ............................ 7
---------
Recreation - 2.4%
1,350 Arctic Cat Inc. ..................................... 12
2,900 Aztar Corporation+ .................................. 11
400 Carmike Cinemas Inc., Class A+ ...................... 7
2,000 Grand Casinos Inc.+ ................................. 16
300 Global Motorsport Group Inc.+ ....................... 5
1,350 Hollywood Park Inc.+ ................................ 14
1,050 Huffy Corporation ................................... 15
650 K2 Inc. ............................................. 12
2,200 Players International Inc.+ ......................... 10
200 Thor Industries Inc. ................................ 4
1,350 Winnebago Industries ................................ 15
---------
121
---------
Restaurants and Lodging - 3.6%
1,250 Applebee's International Inc. ....................... 26
850 Au Bon Pain Company, Inc+ ........................... 5
1,350 Landry's Seafood Restaurants Inc.+ .................. 9
1,350 Marcus Corporation .................................. 21
900 MeriStar Hospitality Corporation+ ................... 15
900 MeriStar Hotels & Resorts Inc.+ ..................... 2
2,300 Prime Hospitality Corporation+ ...................... 16
2,000 Ruby Tuesday Inc. ................................... 30
2,200 Ryan's Family Steak Houses Inc.+ .................... 26
950 Sonic Corporation+ .................................. 17
1,500 Taco Cabana, Class A+ ............................... 9
400 TCBY Enterprises Inc. ............................... 2
---------
178
---------
Retail - Discount - 0.4%
650 Shopko Stores Inc.+ ................................. 21
---------
Retail - General - 0.3%
1,050 Cash America International Inc. ..................... 12
400 Damark International Inc., Class A+ ................. 3
---------
15
---------
Retail - Specialty - 4.6%
1,150 AnnTaylor Stores Corporation+ ....................... 23
2,300 Bombay (The) Company, Inc.+ ........................ 12
1,050 Cato Corporation, Class A. .......................... 12
1,050 Discount Auto Parts Inc.+ ........................... 25
1,150 Dress Barn Inc.+ .................................... 14
1,250 Eagle Hardware & Garden Inc.+ ....................... 27
300 Gottschalks, Inc.+ .................................. 2
1,550 Jan Bel Marketing, Inc.+ ............................ 10
850 Jo-Ann Stores, Inc.+ ................................ 19
1,050 Just For Feet, Inc.+ ................................ 13
1,400 Lechters Inc.+ ...................................... 5
200 Lillian Vernon Corporation .......................... 3
1,050 Michaels Stores Inc.+ ............................... 27
1,450 Zale Corporation+ ................................... 37
---------
229
---------
Savings and Loans - 0.7%
1,450 Downey Financial Corporation ........................ 35
---------
Semiconductors - 0.7%
1,800 International Rectifier Corporation+ ................ 9
1,050 Lattice Semiconductor Corporation+ .................. 26
216 Zilog Inc.+ ......................................... 2
---------
37
---------
Technology - 0.4%
1,400 Digital Microwave Corporation+ ...................... 4
1,200 Komag Inc.+ ......................................... 4
300 Marshall Industries+ ................................ 7
300 Penwest Pharmaceuticals Co.+ ........................ 2
1,200 S3 Incorporated+ .................................... 3
---------
20
---------
Telecommunications - 0.8%
1,150 Allen Telecom Inc.+ ................................. 8
950 California Microwave Inc.+ .......................... 8
300 Digi International Inc.+ ............................ 4
950 Network Equipment Technologies Inc.+ ................ 10
650 Picturetel Corporation+ ............................. 4
1,150 SymmetriCom Inc.+ ................................... 6
---------
40
---------
Transportation - Airlines - 0.9%
650 Air Express International Corporation ............... 10
1,550 American Freightways Inc.+ .......................... 12
300 Pittston BAX Group .................................. 2
950 Skywest Inc. ........................................ 18
---------
42
---------
Transportation - Marine - 0.6%
1,350 Kirby Corporation+ .................................. 28
---------
Transportation - Railroads - 0.8%
1,150 Railtex Inc.+ ....................................... 14
1,350 U.S. Freightways Corporation ........................ 27
---------
41
---------
15 See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
Nations Managed SmallCap Value Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------------------------
Trucking and Shipping - 2.7%
1,150 Arkansas Best Corporation+ .....................$ 7
650 Landstar Systems Inc.+ ......................... 18
650 M.S. Carriers Inc.+ ............................ 13
3,550 Rollins Truck Leasing Corporation .............. 40
850 Wabash National Corporation .................... 13
2,400 Werner Enterprises Inc. ........................ 38
300 Yellow Corporation+ ............................ 4
---------
133
---------
Utilities - Natural Gas - 1.9%
650 Atmos Energy Corporation ....................... 19
1,050 Piedmont Natural Gas Company Inc. .............. 36
1,750 Southwest Gas Corporation ...................... 36
300 Valmont Industries Inc. ........................ 4
---------
95
---------
Utilities - Water - 0.7%
400 Philadelphia Suburban Corporation .............. 11
1,550 United Water Resources Inc. .................... 26
---------
37
---------
Waste Management - 0.2%
400 Superior Services Inc.+ ........................ 11
---------
Wire and Cable Products - 1.6%
2,400 Anixter International Inc.+ .................... 37
1,050 Barnes Group Inc. .............................. 30
1,050 Cable Design Technologies+ ..................... 13
---------
80
---------
Total Common Stocks (Cost $5,930) .............. 4,868
---------
Investment Company - 1.3% (Cost $64)
64,000 Nations Cash Reserves (a) ...................... 64
---------
Total Investments
(Cost $5,994*).............................99.1% 4,932
---------
Other Assets and Liabilities (Net) ..........0.9%
Receivable for Fund shares sold ................. 4
Dividends receivable ............................ 3
Receivable from investment advisor .............. 25
Other assets .................................... 49
Payable for Fund shares redeemed ................ (8)
Shareholder servicing and distribution
fees payable ................................ (2)
Transfer agent fees payable ..................... (2)
Custodian fees payable .......................... (9)
Accrued expenses and other liabilities .......... (15)
---------
Total Other Assets
and Liabilities (Net) ......................... 45
---------
Net Assets.................................100.0% $4,977
=========
Net Asset Value, Offering and Redemption Price per
Share
Primary A Shares:
($2,510,000/283,551 shares outstanding) $ 8.85
Investor A Shares:
($2,382,000/269,156 shares outstanding) $ 8.85
Investor C Shares:
($83,000/9,463 shares outstanding) $ 8.85
At September 30, 1998, Net Assets Consist Of:
Paid-in capital .................................$ 5,795
Distributions in excess of net
investment income ........................... (2)
Accumulated net realized gain on
investments sold ............................ 246
Net unrealized depreciation of investments ...... (1,062)
---------
Net Assets ...................................... $4,977
=========
- -------------------------
* Federal Income Tax Information: Net unrealized depreciation on investment
securities was comprised of gross appreciation of $173,000 and gross
depreciation of $1,235,000 for federal income tax purposes. At September
30, 1998 the aggregate cost of securities for federal income tax purposes
was $5,994,000.
+ Non-income producing security.
(a) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates,
Inc.
See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
Nations Managed SmallCap Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares ( 000 )
- --------------------------------------------------------------
Common Stocks - 97.7%
Advertising - 0.8%
11,500 Catalina Marketing Corporation+ ........$ 541
12,900 HA-LO Industries Inc.+ ................. 377
28,400 True North Communications .............. 630
--------
1,548
--------
Aerospace and Defense - 0.8%
20,700 AAR Corporation ........................ 406
32,200 BE Aerospace Inc.+ ..................... 708
17,500 Orbital Sciences Corporation+ .......... 491
--------
1,605
--------
Agriculture - 1.0%
15,400 DEKALB Genetics Corporation, Class B ... 1,417
11,000 Delta & Pine Land Company .............. 484
--------
1,901
--------
Ammunition - 0.3%
9,800 Alliant Techsystems Inc.+ .............. 649
Apparel and Textiles - 4.3%
22,900 Ashworth Inc.+ ......................... 155
24,200 Authentic Fitness Corporation .......... 369
50,200 Baker J. Inc. .......................... 226
18,000 Brown Group Inc. ....................... 277
16,700 Cone Mills Corporation+ ................ 84
19,500 Delta Woodside Industries Inc. ......... 77
25,600 Footstar, Inc.+ ........................ 581
5,300 G & K Services Inc. .................... 248
11,000 Galey & Lord Inc.+ ..................... 131
22,700 Guilford Mills Inc. .................... 338
5,500 Haggar Corporation ..................... 61
37,100 Hartmarx Corporation+ .................. 243
18,900 K-Swiss Inc., Class A .................. 439
24,300 Linens `N Things, Class A+ ............. 668
42,800 Mohawk Industries Inc.+ ................ 1,172
21,100 Nautica Enterprises Inc.+ .............. 394
34,400 Osh Kosh B'Gosh, Class A ............... 714
12,600 Oxford Industries Inc. ................. 387
38,900 Phillips-Van Heusen Corporation ........ 370
18,900 Pillowtex Corporation .................. 555
8,900 St. John Knits Inc. .................... 144
30,800 Stride Rite Corporation ................ 252
9,000 Timberland Company, Class A+ ........... 328
--------
8,213
--------
Automobile and Truck Manufacturers - 0.0% #
3,400 Walbro Corporation+ .................... 27
--------
Automobile Parts Manufacturers - 1.5%
7,000 Breed Technologies Inc. ................ 43
18,200 Intermet Corporation ................... 231
28,100 Myers Industries Inc. .................. 646
29,400 Simpson Industries ..................... 296
8,400 SPX Corporation ........................ 347
9,900 Standard Motor Products ................ 241
19,100 Standard Products Company .............. 334
34,800 TBC Corporation+ ....................... 209
18,800 Titan Wheel International Inc. ......... 209
15,900 Wynn's International Inc. .............. 297
--------
2,853
--------
Banks - 4.4%
10,400 BankNorth Group Inc. ................... 304
12,400 CCB Financial Corporation .............. 1,249
9,500 Carolina First Corporation ............. 210
12,600 Commerce Bancorp Inc. .................. 498
13,500 Cullen Frost Bankers Inc. .............. 651
22,200 FirstBank of Puerto Rico ............... 563
41,400 FirstMerit Corporation ................. 970
18,900 First Midwest Bancorp Inc. ............. 748
28,500 HUBCO Inc. ............................. 723
8,700 Silicon Valley Bancshares Inc.+ ........ 139
21,400 Susquehanna Bancshares Inc. ............ 404
33,200 UST Corporation ........................ 701
24,600 United Bankshares Inc. ................. 635
11,000 U.S. Trust Corporation ................. 730
--------
8,525
--------
Basic Industries - 0.2%
12,700 Commercial Metals ...................... 292
11,700 Shorewood Packaging Corporation+ ....... 158
--------
450
--------
Beverages - 0.6%
23,300 Canandaigua Brands Inc. Class A+ ....... 920
4,000 Coca-Cola Bottling Company ............. 240
--------
1,160
--------
Broadcasting/Advertising - 0.0% #
5,300 Westwood One Inc.+ ..................... 95
--------
Building Materials -- 1.8%
7,400 Building Materials Holding
Corporation ........................... 97
4,500 Butler Manufacturing Company ........... 104
28,000 Champion Enterprises Inc.+ ............. 651
15,500 Hughes Supply Inc. ..................... 442
11,000 Lone Star Industries ................... 657
12,400 Republic Group Inc. .................... 165
7,800 Skyline Corporation .................... 226
19,200 Texas Industries Inc. .................. 482
19,600 Universal Forest Products .............. 311
15,400 Watsco Inc., Class A ................... 231
--------
3,366
--------
17 See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
Nations Managed SmallCap Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares ( 000 )
- --------------------------------------------------------------
Business Services - 0.2%
6,900 Fair, Issac and Company Inc. ..........$ 230
7,800 New England Business Service Inc. ...... 241
-------
471
-------
Chemicals - Basic - 1.0%
18,300 Cambrex Corporation .................... 431
18,200 Mississippi Chemical Corporation ....... 221
24,100 Scotts Company (The), Class A+ ......... 738
26,000 Tredegar Industries Inc. ............... 476
-------
1,866
-------
Chemicals - Specialty - 1.0%
4,500 Chemed Corporation ..................... 126
8,900 ChemFirst Inc.+ ........................ 157
20,400 Geon Company ........................... 362
17,400 Hauser Inc. ............................ 70
16,900 Lilly Industries Inc., Class A ......... 298
9,900 McWhorter Technologies Inc.+ ........... 200
12,700 OM Group Inc. .......................... 358
18,500 Quaker Chemical Corporation ............ 289
1,700 TETRA Technologies Inc. ................ 20
-------
1,880
-------
Commercial Services - 1.2%
15,900 Billing Information Concepts
Corporation+ .......................... 223
14,300 Central Parking Corporation ............ 720
13,700 Insurance Auto Auctions Inc.+ .......... 171
29,600 Interim Services+ ...................... 609
16,803 NOVA Corporation+ ...................... 516
-------
2,239
-------
Computer Related - 1.8%
24,800 American Management Systems Inc.+ ...... 679
19,900 BancTec Inc.+ .......................... 284
9,900 BISYS Group Inc.+ ...................... 437
7,800 HADCO Corporation+ ..................... 189
9,700 Henry Jack & Associates ................ 463
8,100 Kronos Inc.+ ........................... 300
3,280 Learning Company Inc.+ ................. 65
22,900 National Computer Systems Inc. ......... 676
2,500 Read-Rite Corporation+ ................. 20
20,800 Standard Microsystems Corporation+ ..... 148
9,200 Wall Data Inc.+ ........................ 140
-------
3,401
-------
Computer Services - 1.9%
21,300 Acxiom Corporation+ .................... 529
10,500 Analysts International Corporation ..... 315
30,300 Ciber Inc.+ ............................ 612
12,900 Computer Task Group Inc. ............... 378
18,800 Filenet Corporation+ ................... 263
24,000 Gerber Scientific Inc. ................. 648
18,000 Primark Corporation+ ................... 549
26,600 Vanstar Corporation+ ................... 263
-------
3,557
-------
Computer Software - 0.6%
9,400 Avid Technology Inc.+ .................. 224
8,175 Hyperion Solutions Corporation+ ........ 177
15,400 Macromedia Inc.+ ....................... 250
9,000 Mercury Interactive Corporation+ ....... 357
18,000 Platinum Software Corporation+ ......... 185
-------
1,193
-------
Construction - 3.3%
12,900 Apogee Enterprises Inc. ................ 158
63,600 D.R. Horton Inc ........................ 1,018
22,500 Halter Marine Group, Inc+ .............. 256
48,200 Insituform Technologies Inc., Class A+ . 639
44,800 MDC Holdings Inc. ...................... 826
44,300 Morrison Knudsen Corporation+ .......... 476
18,700 Ryland Group Inc. ...................... 456
19,600 Southern Energy Homes+ ................. 137
38,600 Standard Pacific Corporation ........... 545
8,800 Stone & Webster Inc. ................... 279
19,500 TJ International Inc. .................. 366
23,700 Toll Brothers Inc.+ .................... 544
22,000 U.S. Home Corporation+ ................. 645
-------
6,345
-------
Consumer Goods - Durable - 2.1%
13,700 Boole & Babbage Inc.+ .................. 319
26,600 Fedders Corporation .................... 136
13,500 Harman International Industries Inc. ... 495
27,900 Kaman Corporation, Class A ............. 478
56,100 La-Z Boy Inc. .......................... 1,101
29,300 Oakwood Homes Corporation .............. 385
22,200 Royal Appliance Manufacturing Company+ . 86
20,000 Russ Berrie & Company Inc. ............. 381
26,600 Thomas Industries Inc. ................. 570
-------
3,951
-------
Consumer Goods - Non-Durable - 1.2%
8,900 ABM Industries Inc. .................... 260
17,500 ADVO Inc.+ ............................. 428
10,200 Angelica Corporation ................... 164
15,400 Gibson Greetings Inc.+ ................. 313
16,300 Kellwood Company ....................... 438
29,600 Richfood Holdings Inc. ................. 455
28,900 Wolverine World Wide Inc. .............. 314
-------
2,372
-------
Containers/Packaging - 0.3%
25,500 AptarGroup Inc. ........................ 580
-------
See Notes to Financial Statements. 18
<PAGE>
NATIONS FUNDS
Nations Managed SmallCap Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------------------------
Convenience Stores - 0.3%
38,300 Casey's General Stores Inc. ..............................$ 575
-------
Cosmetics and Toiletry - 0.2%
40,400 NBTY Inc.+ ............................................... 318
8,900 Nature's Sunshine Products Inc. .......................... 142
-------
460
-------
Diversified - 1.2%
18,200 Justin Industries Inc. ................................... 280
14,600 SPS Technologies Inc.+ ................................... 680
22,500 Sierra Pacific Resources ................................. 873
7,400 Standex International Corporation ........................ 177
21,300 Triarc Companies Inc.+ ................................... 331
-------
2,341
-------
Drugs - 1.0%
19,600 Bindley Western Industries Inc. .......................... 647
8,500 Immune Response Corporation+ ............................. 98
13,600 Incyte Pharmaceuticals Inc.+ ............................. 289
12,200 Medimmune Inc.+ .......................................... 790
-------
1,824
-------
Electric Power - 2.0%
15,200 Central Vermont Public Services .......................... 164
10,400 CILCORP Inc. ............................................. 545
13,800 Commonwealth Energy System Companies ..................... 502
34,800 Eastern Utilities Association ............................ 909
18,800 TNP Enterprises Inc. ..................................... 657
20,500 United Illuminating Company .............................. 1,071
-------
3,848
-------
Electrical Equipment - 0.5%
19,600 C-COR Electronics Inc.+ .................................. 252
12,536 Intermagnetics General Corporation+ ...................... 88
8,400 KEMET Corporation+ ....................................... 93
8,900 Kent Electronics Corporation+ ............................ 89
13,000 Kulicke & Soffa Industries Inc.+ ......................... 177
12,500 Park Electrochemical Corporation ......................... 170
-------
869
-------
Electronics - 3.9%
4,400 Analogic Corporation ..................................... 152
16,200 BMC Industries Inc. ...................................... 97
13,300 Bell Industries Inc.+ .................................... 159
11,000 Benchmark Electronics Inc.+ .............................. 251
21,700 Burr-Brown Corporation+ .................................. 369
22,300 C-Cube Microsystems Inc.+ ................................ 390
18,200 CTS Corporation .......................................... 537
17,000 Checkpoint Systems Inc.+ ................................. 148
16,500 Dallas Semiconductor Corporation ......................... 446
9,200 Electro Scientific Industries, Inc+ ...................... 146
40,600 Gentex Corporation+ ...................................... 609
26,700 Harmon Industries Inc. ................................... 587
10,700 InterVoice Inc.+ ......................................... 245
19,700 Methode Electronics Inc. ................................. 296
10,300 Oak Industries Inc.+ ..................................... 278
22,000 Pioneer Standard Electronics ............................. 139
27,500 Sanmina Corporation+ ..................................... 773
15,900 Technitrol Inc. .......................................... 318
14,600 Unitrode Corporation+ .................................... 155
31,500 VLSI Technology Inc.+ .................................... 240
46,500 Vitesse Semiconductor Corporation+ ....................... 1,098
-------
7,433
-------
Energy - 0.5%
15,700 Barrett Resources Corporation+ ........................... 317
22,300 Dames & Moore Inc. ....................................... 234
29,100 Tuboscope Vetco International
Corporation+ .......................................... 338
-------
889
-------
Environmental - 0.4%
7,400 American States Water Company ............................ 196
13,300 Clarcor Inc .............................................. 204
9,800 IMCO Recycling Inc. ...................................... 139
7,400 Ionics Inc.+ ............................................. 196
-------
735
-------
Financial Services - 6.5%
16,600 Americredit Corp.+ ....................................... 404
33,400 AMRESCO Inc.+ ............................................ 251
17,500 Astoria Financial Corporation ............................ 737
15,700 CMAC Investment Corporation .............................. 682
15,600 Centura Banks Inc. ....................................... 981
38,800 Commercial Federal Corporation ........................... 914
9,400 Dain Rauscher Corp. ...................................... 296
28,100 Eaton Vance Corporation (non-voting) ..................... 648
27,000 Enhance Financial Services Group ......................... 798
9,900 Gallagher (Arthur J.) & Company .......................... 408
6,400 JSB Financial Inc. ....................................... 328
34,000 Keystone Financial Inc. .................................. 1,007
36,400 Legg Mason Inc. .......................................... 958
22,000 Mutual Risk Management ................................... 778
38,700 Raymond James Financial Inc. ............................. 813
22,900 Riggs National Corporation ............................... 561
11,400 SEI Investment Company ................................... 792
25,300 St. Paul Bancorp Inc. .................................... 552
12,300 Whitney Holding Corporation .............................. 513
-------
12,422
-------
Food Producers - 1.2%
44,800 Chiquita Brands International Inc. ....................... 473
18,200 Corn Products International Inc.+ ........................ 460
28,000 J&J Snack Foods Corporation+ ............................. 518
25,900 Ralcorp Holdings Inc.+ ................................... 363
28,700 Smithfield Foods Inc.+ ................................... 508
-------
2,322
-------
19 See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
Nations Managed SmallCap Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------
Food Retailers - 1.4%
43,500 Earthgrains Company ....................$ 1,346
30,600 Fleming Companies ...................... 375
20,000 Nash Finch Corporation ................. 294
16,300 Whole Foods Market Inc.+ ............... 687
-------
2,702
-------
Furniture and Appliances - 1.0%
8,700 Bassett Furniture ...................... 254
18,700 Ethan Allen Interiors Inc. ............. 678
35,000 Interface Inc. ......................... 420
21,500 Juno Lighting Inc. ..................... 481
-------
1,833
-------
Gas and Electric - 0.6%
13,100 Central Hudson Gas & Electric .......... 549
12,600 Orange and Rockland Utilities Inc. ..... 691
-------
1,240
-------
Health Care Management - 0.3%
17,800 Orthodontic Centers of America+ ........ 297
7,500 Pediatrix Medical Group Inc.+ .......... 337
-------
634
-------
Health Care Services - 0.6%
8,300 Access Health Inc.+ .................... 306
13,000 Ballard Medical Products ............... 261
15,600 Coherent Inc.+ ......................... 146
27,000 Coventry Health Care Inc.+ ............. 179
9,500 Envoy Corporation+ ..................... 208
-------
1,100
-------
Information Services - 0.1%
21,300 Fritz Companies Inc.+ .................. 145
-------
Insurance - 5.8%
13,600 ALLIED Group Inc. ...................... 654
22,800 American Bankers Insurance Group Inc. .. 969
22,100 Capital Re Corporation ................. 605
2,100 CompDent Corporation+ .................. 29
16,000 Delphi Financial Group Inc.+ ........... 630
6,600 Executive Risk Inc ..................... 297
28,400 Fidelity National Financial Inc. ....... 960
50,700 First American Financial Corporation ... 1,622
26,100 Fremont General Corporation ............ 1,253
23,300 Frontier Insurance Group Inc. .......... 309
7,400 Hilb, Rogal and Hamilton Company ....... 140
14,200 Life Re Corporation .................... 1,306
13,700 NAC Re Corp ............................ 675
22,100 Orion Capital Corporation .............. 789
21,600 Selective Insurance Group .............. 413
17,200 Sierra Health Services+ ................ 339
7,100 Trenwick Group Inc. .................... 207
-------
11,197
-------
Iron/Steel - 0.1%
16,900 Birmingham Steel Corporation ........... 134
20,100 Northwestern Steel & Wire Company+ ..... 40
-------
174
-------
Machinery and Equipment - 2.8%
17,100 Applied Industrial Technologies Inc. ... 278
32,550 Applied Power Inc., Class A ............ 889
25,400 Astec Industries+ ...................... 1,083
17,900 Baldor Electric Company ................ 392
21,300 Blount International Corporation,
Class A ............................. 506
15,800 CPI Corporation ........................ 374
20,000 Flow International Corporation+ ........ 185
17,500 Global Industrial Technologies Inc.+ ... 123
12,700 Kuhlman Corporation .................... 412
4,100 Lindsay Manufacturing Company .......... 61
12,100 Manitowoc Inc. ......................... 365
21,200 Paxar Corporation+ ..................... 188
12,700 Regal Beloit ........................... 283
10,900 Robbins & Meyers Inc. .................. 231
-------
5,370
-------
Manufacturing - 1.1%
15,800 Belden Inc. ............................ 212
11,100 Cognex Corporation+ .................... 129
19,300 Dixie Group Inc. ....................... 125
16,900 Griffon Corporation+ ................... 148
8,800 Innovex Inc. ........................... 107
14,400 Integrated Circuit Systems Inc.+ ....... 144
28,200 JLG Industries Inc. .................... 449
16,900 O'Sullivan Corporation+ ................ 144
6,900 Roper Industries Inc. .................. 120
9,200 Scott Technologies Inc., Class A+ ...... 102
24,650 Smith (A.O.) Corporation ............... 484
-------
2,164
-------
Media - 0.2%
14,800 Xircom Inc.+ .......................... 363
-------
Medical Products and Supplies - 2.3%
25,300 Cephalon Inc.+ ......................... 185
9,600 Circon Corporation+ .................... 94
6,000 Collagen Corporation ................... 51
17,000 Cooper Companies Inc. (The)+ ........... 300
1,400 Datascope Corporation+ ................. 31
21,200 IDEXX Laboratories Inc.+ ............... 506
9,400 Liposome Company Inc.+ ................. 53
11,000 Marquette Medical Systems Inc.+ ........ 478
17,000 Owens & Minor Inc. (New) ............... 198
18,800 Patterson Dental Company+ .............. 696
25,600 ReSound Corporation+ ................... 109
10,100 Respironics Inc.+ ...................... 114
34,700 Safeskin Corporation+ .................. 1,095
14,600 Sola International Inc.+ ............... 262
8,500 SpaceLabs Medical Inc.+ ................ 132
See Notes to Financial Statements. 20
<PAGE>
NATIONS FUNDS
Nations Managed SmallCap Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------
Medical Products and Supplies - (continued)
7,400 Sunrise Medical Inc.+ ..................$ 74
6,800 Vital Signs Inc. ....................... 113
-------
4,491
-------
Medical Services - 2.8%
17,100 ADAC Laboratories Designs .............. 410
11,000 American Oncology Resources+ ........... 111
17,600 Cerner Corporation+ .................... 472
5,300 Curative Health Services Inc.+ ......... 162
8,900 Express Scripts Inc., Class A+ ......... 732
26,700 Genesis Health Ventures+ ............... 327
37,200 Integrated Health Services Inc. ........ 625
14,400 Invacare Corporation ................... 338
14,200 Magellan Health Services Inc.+ ......... 154
52,300 Mariner Post-Acute Network Inc.+ ....... 268
53,200 PhyCor Inc.+ ........................... 266
12,100 Protein Design Labs Inc.+ .............. 290
15,500 Renal Care Group Inc.+ ................. 397
21,300 Universal Health Services Inc.,
Class B+ ............................... 889
-------
5,441
-------
Metals and Mining - 0.7%
29,900 AMCOL International Corporation ........ 340
7,400 Castle (A.M.) & Company ................ 111
30,900 Hecla Mining Company+ .................. 156
26,900 Steel Technologies Inc. ................ 195
9,700 Stillwater Mining Company+ ............. 306
16,500 WHX Corporation+ ....................... 212
-------
1,320
-------
Metal Processors & Fabricates - 0.7%
10,700 Amcast Industrial Corporation .......... 157
25,200 Mueller Industries Inc.+ ............... 641
12,100 Quanex Corporation ..................... 240
11,000 Wolverine Tube Inc.+ ................... 232
-------
1,270
-------
Networking Products - 0.2%
24,800 Xylan Corporation + .................... 329
-------
Office Supplies - 0.3%
8,800 Brady Corporation, Class A ............. 183
16,200 Harland (John H.) Company .............. 220
10,700 Nashua Corporation ..................... 158
-------
561
-------
Oil and Gas - 1.0%
15,900 Cabot Oil & Gas Corporation ............ 242
8,400 Cross Timbers Oil Company .............. 127
22,500 Devon Energy Corporation ............... 741
37,800 Input/Output, Inc+ ..................... 300
4,600 St. Mary Land & Exploration ............ 110
38,100 Vintage Petroleum Inc. ................. 438
-------
1,958
-------
Oil and Gas - Equipment and Services - 1.0%
22,300 Daniel Industries Inc. ................. 305
22,300 Graco Inc. ............................. 518
9,800 New Jersey Resources Corporation ....... 349
23,800 Pool Energy Services Company+ .......... 217
13,000 Seitel Inc.+ ........................... 141
19,600 Wicor Inc. ............................. 468
-------
1,998
-------
Oil and Gas - Exploration - 1.3%
29,300 Energen Corporation .................... 557
17,500 HS Resources Inc.+ ..................... 200
17,500 Northwest Natural Gas Company .......... 484
15,800 Plains Resources Inc.+ ................. 267
6,500 Pogo Producing Company ................. 97
50,900 Santa Fe Energy Resources Inc.+ ........ 480
15,200 Snyder Oil Corporation ................. 242
20,000 Southwestern Energy Company ............ 170
-------
2,497
-------
Oil and Gas - Extraction - 0.5%
22,000 New Field Exploration Company+ ......... 495
19,700 Oceaneering International Inc.+ ........ 281
33,500 Pride International Inc.+ .............. 268
-------
1,044
-------
Paper and Forest Products - 0.3%
8,700 Buckeye Technologies Inc.+ ............. 157
8,400 Caraustar Industries Inc. .............. 191
15,900 Pope & Talbot Inc. ..................... 155
6,400 Schweitzer-Maudit International Inc .... 139
-------
642
-------
Pharmaceuticals - 1.0%
16,600 ALPHARMA Inc., Class A ................. 436
10,300 Cor Therapeutics Inc.+ ................. 80
15,200 Pharmaceutical Marketing Services+ ..... 137
23,700 Regeneron Pharmaceuticals Inc.+ ........ 182
23,500 Roberts Pharmaceutical Corporation+ .... 449
30,200 SEQUUS Pharmaceuticals Inc.+ ........... 292
25,800 Syncor International Corporation+ ...... 427
-------
2,003
-------
Printing and Publishing - 1.8%
41,000 Bowne & Co. Inc. ....................... 694
4,000 Consolidated Graphics Inc.+ ............ 152
22,700 Merrill Corporation .................... 356
21,200 Thomas Nelson Publisher ................ 270
27,500 Valassis Communications Inc.+ .......... 1,100
29,800 World Color Press Inc.+ ................ 924
-------
3,496
-------
Producer Goods - 0.4%
6,800 Dionex Corporation+ .................... 158
8,900 Lydall Inc.+ ........................... 91
21 See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
Nations Managed SmallCap Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- -------------------------------------------------------------
Producer Goods -(continued)
13,500 Zebra Technologies Corporation,
Class A+ ............................$ 452
-------
701
-------
Professional Services - 1.4%
52,400 Brightpoint Inc.+ ...................... 403
12,100 CDI Corporation+ ....................... 275
23,500 Franklin Covey Company+ ................ 460
6,000 NFO Worldwide Inc.+ .................... 60
20,800 National Data Corporation .............. 642
22,100 Norrell Corporation .................... 332
26,600 Offshore Logistics Inc.+ ............... 336
8,900 Volt Information Sciences Inc.+ ........ 177
-------
2,685
-------
Protection and Safety Services - 0.1%
15,300 Rural/Metro Corporation+ ............... 122
-------
Recreation - 1.8%
18,200 Arctic Cat Inc. ........................ 163
48,567 Aztar Corporation+ ..................... 188
8,600 Carmike Cinemas Inc., Class A+ ......... 158
3,400 GC Companies+ .......................... 131
2,900 Global Motorsport Group Inc.+ .......... 44
60,600 Grand Casinos Inc.+ .................... 481
34,700 Hollywood Park Inc.+ ................... 360
32,500 Huffy Corporation ...................... 459
9,400 K2 Inc. ................................ 166
25,300 Midway Games Inc.+ ..................... 296
41,000 Players International Inc.+ ............ 195
13,100 Polaris Industries Inc. ................ 406
16,900 Thor Industries Inc. ................... 359
13,000 Winnebago Industries ................... 146
-------
3,552
-------
Restaurants and Lodging - 3.0%
24,900 Applebee's International Inc. .......... 520
14,300 CEC Entertainment Inc.+ ................ 290
25,600 CKE Restaurants Inc. ................... 762
12,100 Cheesecake Factory (The)+ .............. 188
12,600 Consolidated Products Inc.+ ............ 221
47,600 Foodmaker Inc.+ ........................ 747
8,400 IHOP Corporation+ ...................... 310
24,500 Landry's Seafood Restaurants Inc.+ ..... 165
13,500 Luby's Cafeterias Inc. ................. 218
22,100 Marcus Corporation ..................... 343
33,600 Prime Hospitality Corporation+ ......... 235
53,600 Ruby Tuesday Inc. ...................... 811
41,700 Ryan's Family Steak Houses Inc.+ ....... 498
16,300 Sonic Corporation+ ..................... 285
29,800 TCBY Enterprises Inc. .................. 182
7,700 Taco Cabana, Class A+ .................. 47
-------
5,822
-------
Retail - Discount - 0.3%
3,300 Filene's Basement Corporation+ ......... 6
19,300 Shopko Stores Inc. ..................... 627
-------
633
-------
Retail - General - 0.5%
20,800 Cash America International Inc. ........ 231
12,000 Damark International Inc., Class A+ .... 87
12,900 Hancock Fabrics Inc. ................... 124
8,700 MicroAge Inc.+ ......................... 96
14,600 Regis Corporation ...................... 460
-------
998
-------
Retail - Specialty - 3.9%
27,500 AnnTaylor Stores Corporation+ .......... 559
6,400 Bombay (The) Company Inc.+ ............. 34
48,500 Cato Corporation, Class A .............. 564
12,900 Discount Auto Parts Inc.+ .............. 310
28,600 Dress Barn Inc.+ ....................... 347
25,500 Eagle Hardware & Garden Inc.+ .......... 553
13,400 Goody's Family Clothing Inc.+ .......... 161
8,100 Gottschalks Inc.+ ...................... 59
8,300 Gymboree Corporation+ .................. 62
23,300 Jan Bel Marketing Inc.+ ................ 151
21,000 Jo-Ann Stores Inc., Class A+ ........... 467
18,300 Just For Feet Inc.+ .................... 233
6,400 Lechters Inc.+ ......................... 22
12,700 Lillian Vernon Corporation ............. 172
18,300 Men's Warehouse Inc. The,+ ............. 316
26,200 Michaels Stores Inc.+ .................. 668
12,700 O'Reilly Automotive+ ................... 460
57,200 Pier 1 Imports Inc. .................... 429
22,000 Sports Authority, Inc (The)+ ........... 168
24,800 Stein Mart Inc+ ........................ 198
7,100 Toro Company ........................... 147
36,100 Williams-Sonoma Inc.+ .................. 769
26,800 Zale Corporation+ ...................... 687
-------
7,536
-------
Savings and Loans - 0.3%
24,800 Downey Financial Corporation ........... 591
-------
Semiconductors - 0.7%
2,400 Etec Systems Inc.+ ..................... 63
30,200 International Rectifier Corporation+ ... 155
9,400 Lattice Semiconductor Corporation+ ..... 233
17,000 Novellus Systems Inc.+ ................. 446
13,000 Photronics Inc.+ ....................... 166
11,500 Plexus Corporation+ .................... 223
-------
1,286
-------
Technology - 1.2%
28,400 Digital Microwave Corporation+ ......... 87
14,900 Macdermid Inc. ......................... 451
See Notes to Financial Statements. 22
<PAGE>
NATIONS FUNDS
Nations Managed SmallCap Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------
Technology - (continued)
9,900 Marshall Industries+ ...................$ 218
21,300 Progress Software Inc.+ ................ 551
14,000 Telxon Corporation ..................... 285
6,300 TheraTech Inc.+ ........................ 57
9,900 VISX Inc.+ ............................. 663
-------
2,312
-------
Telecommunications - 1.1%
13,700 Allen Telecom Inc.+ .................... 92
33,400 Aspect Telecommunications+ ............. 802
15,300 California Microwave, Inc+ ............. 126
7,800 Dialogic Corporations+ ................. 217
19,600 Digi International Inc.+ ............... 240
19,000 Inter-Tel Inc. ......................... 246
18,300 Network Equipment Technologies Inc.+ ... 183
14,400 Picturetel Corporation+ ................ 93
1,000 TCSI Corporation+ ...................... 3
11,100 Tel-Save Holdings Inc.+ ................ 124
-------
2,126
-------
Tobacco - 0.2%
33,600 DiMon Inc. ............................. 355
-------
Transportation - Airlines - 1.6%
18,700 Air Express International Corporation .. 299
33,800 American Freightways Inc.+ ............. 254
45,100 Comair Holdings Inc. ................... 1,297
14,400 Expeditors International of
Washington Inc. ..................... 400
12,700 Mesa Air Group Inc.+ ................... 64
13,500 Pittston BAX Group ..................... 100
37,700 Skywest Inc. ........................... 721
-------
3,135
-------
Transportation - Marine - 0.2%
20,800 Kirby Corporation+ ..................... 437
-------
Transportation - Railroads - 0.3%
13,000 Railtex Inc.+ .......................... 153
20,800 U.S. Freightways Corporation ........... 413
-------
566
-------
Trucking and Shipping - 1.6%
34,700 Arkansas Best Corporation+ ............. 200
16,900 Heartland Express Inc.+ ................ 279
14,700 Landstar System Inc.+ .................. 414
18,200 M.S. Carriers Inc.+ .................... 362
56,400 Rollins Truck Leasing Corporation ...... 631
20,600 Wabash National Corporation ............ 304
34,400 Werner Enterprises Inc. ................ 542
24,700 Yellow Corporation+ .................... 333
-------
3,065
-------
Utilities - Natural Gas - 1.4%
22,700 Atmos Energy Corporation ............... 648
6,700 Cascade Natural Gas Corporation ........ 111
7,800 Connecticut Energy Corporation ......... 211
21,700 Piedmont Natural Gas Company Inc. ...... 735
12,700 Public Service Company of
North Carolina Inc. ................. 294
28,300 Southwest Gas Corporation .............. 578
15,900 Valmont Industries Inc. ................ 195
-------
2,772
-------
Utilities - Water - 0.6%
7,400 Aquarion Company ....................... 249
19,600 Philadelphia Suburban Corporation ...... 526
20,000 United Water Resources Inc. ............ 340
-------
1,115
-------
Waste Management - 0.2%
13,100 Superior Services Inc.+ ................ 369
-------
Wire and Cable Products - 0.9%
45,200 Anixter International Inc.+ ............ 703
22,800 Barnes Group Inc. ...................... 647
25,000 Cable Design Techonlogies+ ............. 319
-------
1,669
-------
Wireless Equipment - 0.1%
24,800 P-Com Inc.+ ............................ 97
-------
Total Common Stocks (Cost $217,131) .... 187,881
-------
Investment Company - 6.4% (Cost $12,282)
12,282,000 Nations Cash Reserves (a). ............. 12,282
-------
Total Investments (Cost $229,413) 104.1% 200,163
-------
Other Assets and Liabilities (Net).(4.1)%
Cash ................................... 1
Receivable for Fund shares sold ........ 1,590
Dividends receivable ................... 134
Unamortized organization costs ......... 6
Collateral on securities loaned ........ (8,949)
Payable for Fund shares redeemed ....... (450)
Investment advisory fee payable ........ (19)
Administration fee payable ............. (15)
Shareholder servicing and
distribution fees payable ........... (8)
Transfer agent fees payable ............ (20)
Custodian fees payable ................. (23)
Accrued Trustees' fees and expenses .... (3)
Accrued expenses and other liabilities . (83)
-------
Total Other Assets
and Liabilities (Net) ... (7,839)
-------
Net Assets .................... 100.0% $ 192,324
=======
23 See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
Nations Managed SmallCap Index Fund
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
Value
(000)
- --------------------------------------------------------------------
Net Asset Value, Offering and Redemption Price per
Share
Primary A Shares:
($182,202,000/17,113,779 shares outstanding) $ 10.65
Primary B Shares:
($154,000/14,518 shares outstanding) $ 10.64
Investor A Shares:
($9,147,000/860,024 shares outstanding) $ 10.64
Investor C Shares:
($821,000/77,192 shares outstanding) $ 10.64
At September 30, 1998, Net Assets Consist Of:
Paid-in capital ...............................$ 224,236
Undistributed net investment income ........... 86
Accumulated net realized gain on
investments sold .............................. (2,748)
Net unrealized depreciation of investments .... (29,250)
--------
Net Assets ....................................$ 192,324
========
- -----------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $11,197,000 and gross
depreciation of $40,447,000 for federal income tax purposes. At September
30, 1998, the aggregate cost of securities for federal income tax purposes
was $229,413,000.
+ Non-income producing security.
# Amount represents less than 0.1%.
(a) Money market mutual fund registered under the InvestmentCompany Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates,
Inc.
Comprehensive Abbreviation listing for all September 30, 1998 Nations Managed
Index Funds:
ABBREVIATIONS:
ADR American Depository Receipt.
See Notes to Financial Statements. 24
<PAGE>
NATIONS FUNDS
- --------------------------------------------------------------------------------
Statements of Operations (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended September 30, 1998
<TABLE>
<CAPTION>
Managed
Managed SmallCap Managed
Value Managed Value SmallCap
Index Index Index Index
------------------------------------------------------------
<S> <C> <C> <C> <C>
(In thousands)
Investment Income
Dividends ...................................................... $ 113 $ 4,224 $ 25 $ 903
Interest ....................................................... 8 360 4 158
Securities lending ............................................. -- 3 -- 31
-------- -------- -------- --------
Total investment income .................................... 121 4,587 29 1,092
-------- -------- -------- --------
Expenses:
Investment advisory fee ........................................ 29 1,377 23 491
Administration fee ............................................. 6 275 2 98
Transfer agent fees ............................................ 6 117 3 43
Custodian fees ................................................. 20 48 19 54
Legal and audit fees ........................................... 7 20 7 12
Registration and filing fees ................................... 39 100 42 70
Trustees' fees and expenses .................................... -- 6 -- 2
Amortization of organization costs ............................. -- 1 -- 1
Interest expense ............................................... -- -- 1 5
Other .......................................................... 2 46 1 14
-------- -------- -------- --------
Subtotal .................................................... 109 1,990 98 790
Shareholder servicing and distribution fees
Primary B Shares ............................................ -- -- -- --
Investor A Shares ........................................... 4 35 3 14
Investor C Shares ........................................... -- 20 -- 4
Fees waived and expenses reimbursed by investment advisor and/or
distributor .................................................... (80) (617) (85) (296)
-------- -------- -------- --------
Total expenses ............................................ 33 1,428 16 512
-------- -------- -------- --------
Fees reduced by credits allowed by the custodian ............... -- (1) -- (1)
-------- -------- -------- --------
Net expenses .............................................. 33 1,427 16 511
-------- -------- -------- --------
Net Investment Income .......................................... 88 3,160 13 581
-------- -------- -------- --------
Net Realized and Unrealized Gain/
(Loss) On Investments:
Net realized gain/ (loss) from:
Security transactions ....................................... 54 (1,964) 251 (1,480)
Futures contracts ........................................... -- (1,005) -- --
-------- -------- -------- --------
Net realized gain/ (loss) on investments .................... 54 (2,969) 251 (1,480)
-------- -------- -------- --------
Change in unrealized appreciation/ (depreciation) of:
Securities .................................................. (1,818) (49,754) (1,542) (54,385)
Futures contracts ........................................... -- (40) -- --
-------- -------- -------- --------
Net change in unrealized appreciation/ (depreciation) ....... (1,818) (49,794) (1,542) (54,385)
-------- -------- -------- --------
Net realized and unrealized loss on investments ............. (1,764) (52,763) (1,291) (55,865)
-------- -------- -------- --------
Net Decrease In Net Assets
Resulting From Operations: ..................................... $ (1,676) $(49,603) $ (1,278) $(55,284)
======== ======== ======== ========
</TABLE>
25 See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Managed Managed
Value Value Managed Managed
Index Index Index Index
---------- --------- ---------- ---------
Six Months Six Months
Ended Year Ended Year
9/30/98 Ended 9/30/98 Ended
(unaudited) 3/31/98(a) (unaudited) 3/31/98
----------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
(In thousands)
Net investment income .................................................. $ 88 $ 38 $ 3,160 $ 2,004
Net realized gain/ (loss) on investments ............................... 54 (1) (2,969) 2,300
Net change in unrealized appreciation / (depreciation) of investments .. (1,818) 995 (49,794) 64,010
--------- --------- --------- ---------
Net increase / (decrease) in net assets resulting from operations ...... (1,676) 1,032 (49,603) 68,314
Distributions to shareholders from net investment income:
Primary A Shares .................................................... (33) (29) (2,843) (1,917)
Primary B Shares .................................................... -- -- -- --
Investor A Shares ................................................... (9) (8) (117) (117)
Investor C Shares ................................................... -- -- (12) (14)
Distributions to shareholders from net realized gain on investments:
Primary A Shares .................................................... -- -- (3,205) (603)
Primary B Shares .................................................... -- -- -- --
Investor A Shares ................................................... -- -- (221) (48)
Investor C Shares ................................................... -- -- (38) (18)
Net increase in net assets from Fund share transactions ................ 3,762 8,709 213,906 293,292
--------- --------- --------- ---------
Net increase in net assets ............................................. 2,044 9,704 157,867 358,889
--------- --------- --------- ---------
Net Assets:
Beginning of period .................................................... 9,704 -- 404,237 45,348
--------- --------- --------- ---------
End of period .......................................................... $ 1,748 $ 9,704 $ 562,104 $ 404,237
========= ========= ========= =========
Undistributed net investment income at end of period ................... $ 47 $ 1 $ 205 $ 17
========= ========= ========= =========
</TABLE>
- --------------
(a) Managed Value Index commenced operations on November 24, 1997.
See Notes to Financial Statements. 26
<PAGE>
NATIONS FUNDS
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Managed Managed
SmallCap SmallCap Managed Managed
Value Value SmallCap SmallCap
Index Index Index Index
------- ------- -------- -------
Six Months Six Months
Ended Year Ended Year
9/30/98 Ended 9/30/98 Ended
(unaudited) 3/31/98(a) (unaudited) 3/31/98
----------------------------------------------------
<S> <C> <C> <C> <C>
(In thousands)
Net investment income ........................................................ $ 13 $ 8 $ 581 $ 412
Net realized gain/(loss) on investments ...................................... 251 29 (1,480) 2,071
Net change in unrealized appreciation / (depreciation) of investments ........ (1,542) 480 (54,385) 27,093
--------- --------- --------- ---------
Net increase / (decrease) in net assets resulting from operations ............ (1,278) 517 (55,284) 29,576
Distributions to shareholders from net investment income:
Primary A Shares .......................................................... (9) (5) (495) (392)
Primary B Shares .......................................................... -- -- -- --
Investor A Shares ......................................................... (7) (2) (11) (21)
Investor C Shares ......................................................... -- -- -- --
Distributions to shareholders from net realized gain on investments:
Primary A Shares .......................................................... (14) -- (1,102) (2,070)
Primary B Shares .......................................................... -- -- (2) (5)
Investor A Shares ......................................................... (20) -- (139) (227)
Investor C Shares ......................................................... -- -- (11) (4)
Net increase in net assets from Fund share transactions ...................... 2,323 3,471 132,479 48,742
--------- --------- --------- ---------
Net increase in net assets ................................................... 996 3,981 75,435 75,599
--------- --------- --------- ---------
Net Assets:
Beginning of period ....................................................... 3,981 -- 116,889 41,290
--------- --------- --------- ---------
End of period ............................................................. $ 4,977 $ 3,981 $ 192,324 $ 116,889
========= ========= ========= =========
Undistributed net investment income/(distributions in excess of net investment
income) at end of period ................................................. $ (2) $ 1 $ 86 $ 11
========= ========= ========= =========
</TABLE>
- -----------------------
(a) Managed SmallCap Value Index commenced operations on November 24, 1997.
27 See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
- --------------------------------------------------------------------------------
Schedules of Capital Stock Activity
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Managed Value Index Managed Index
Six Months Ended Six Months Ended
September 30, 1998 Period Ended September 30, 1998 Period Ended
(unaudited) March 31, 1998 (a) (unaudited) March 31, 1998 (b)
------------------ ------------------ ------------------- ------------------
Shares Dollars Shares Dollars Shares Dollars Shares Dollars
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(In thousands)
Primary A Shares:
Sold ......................................... 313 $ 3,498 863 $ 8,875 13,061 $ 223,655 11,838 $ 183,806
Issued in exchange for assets of Common Equity
Index/ Enhanced Market Fund ................ -- -- -- -- 9,700 137,455
Issued as reinvestment of dividends .......... 3 29 3 28 183 2,727 82 1,156
Redeemed ..................................... (59) (587) (218) (2,247) (1,205) (20,267) (3,316) (50,451)
------- --------- ------- --------- ------- --------- ------- ---------
Net increase ................................. 257 2,940 648 $ 6,656 12,039 $ 206,115 18,304 $ 271,966
======= ========= ======= ========= ======= ========= ======= =========
Primary B Shares:
Sold ......................................... -- $ -- -- $ -- -- $ -- (c) $ 3
Issued as reinvestment of dividends .......... -- -- -- -- -- -- -- --
Redeemed ..................................... -- -- -- -- -- -- -- --
------- --------- ------- --------- ------- --------- ------- ---------
Net Increase ................................. -- $ -- -- $ -- -- $ -- (c) $ 3
======= ========= ======= ========= ======= ========= ======= =========
Investor A Shares:
Sold ......................................... 98 $ 1,084 438 $ 4,411 971 $ 16,415 1,473 $ 21,672
Issued as reinvestment of dividends .......... 1 9 1 8 18 305 10 145
Redeemed ..................................... (25) (277) (229) (2,370) (545) (9,071) (254) (3,882)
------- --------- ------- --------- ------- --------- ------- ---------
Net Increase ................................. 74 $ 816 210 $ 2,049 444 $ 7,649 1,229 $ 17,935
======= ========= ======= ========= ======= ========= ======= =========
Investor C Shares:
Sold ......................................... (c) $ 6 (c) $ 4 139 $ 2,348 299 $ 4,214
Issued as reinvestment of dividends .......... -- -- -- -- 3 49 2 32
Redeemed ..................................... -- -- -- -- (133) (2,255) (58) (858)
------- --------- ------- --------- ------- --------- ------- ---------
Net Increase ................................. (c) $ 6 (c) $ 4 9 $ 142 243 $ 3,388
======= ========= ======= ========= ======= ========= ======= =========
Total net increase ........................... 331 $ 3,762 858 $ 8,709 12,492 $ 213,906 19,776 $ 293,292
======= ========= ======= ========= ======= ========= ======= =========
</TABLE>
- ---------------
(a) Managed Value Index commenced operations on November 24, 1997.
(b) Managed Index Primary B Shares commenced operations on September 4, 1997.
(c) Less than 500 shares.
See Notes to Financial Statements. 28
<PAGE>
NATIONS FUNDS
- --------------------------------------------------------------------------------
Schedules of Capital Stock Activity (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Managed SmallCap Value Index Managed SmallCap Index
Six Months Ended Six Months Ended
September 30, 1998 Period Ended September 30, 1998 Year Ended
(unaudited) March 31, 1998 (a) (unaudited) March 31, 1998
----------------- ------------------ ------------------- -----------------
Shares Dollars Shares Dollars Shares Dollars Shares Dollars
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(In thousands)
Primary A Shares:
Sold ........................................... 214 $2,260 284 $ 2,883 13,385 $ 179,748 7,842 $95,131
Issued as reinvestment of dividends ............ 2 16 (c) 5 20 251 73 918
Redeemed ....................................... (116) (1208) (101) (1,075) (3,558) (46,236) (4,806) (59,103)
------ ------ ------ ------- ------ --------- ------ -------
Net increase ................................... 100 $1,068 183 $ 1,813 9,847 $ 133,763 3,109 $36,946
====== ====== ====== ======= ====== ========= ====== =======
Primary B Shares:
Sold ........................................... -- $ -- -- $ -- 6 $ 82 17 $ 197
Issued as reinvestment of dividends ............ -- -- -- -- -- -- -- 1
Redeemed ....................................... -- -- -- -- (3) (41) (15) 189)
------ ------ ------ ------- ------ --------- ------ -------
Net increase ................................... -- $ -- -- $ -- 3 $ 41 2 $ 9
====== ====== ====== ======= ====== ========= ====== =======
Investor A Shares:
Sold ........................................... 127 $1,381 387 $ 3,912 487 $ 6,113 1,260 $15,372
Issued as reinvestment of dividends ............ 2 24 (c) 2 1 11 19 243
Redeemed ....................................... (22) (243) (225) (2,270) (606) (8,016) (336) (4,256)
------ ------ ------ ------- ------ --------- ------ -------
Net Increase ................................... 107 $1,162 162 $ 1,644 (118) $ (1,892) 943 $11,359
====== ====== ====== ======= ====== ========= ====== =======
Investor C Shares:
Sold ........................................... 10 $ 114 1 $ 15 67 $ 911 39 $ 474
Issued as reinvestment of dividends ............ -- -- (c) (b) -- -- 326 4
Redeemed ....................................... (2) (21) (c) (1) (27) (344) (4) (50)
------ ------ ------ ------- ------ --------- ------ -------
Net Increase ................................... 8 $ 93 1 $ 14 40 $ 567 361 $ 428
====== ====== ====== ======= ====== ========= ====== =======
Total net increase in shares and net
assets from Capital Stock Activity .............. 215 $2,323 346 $ 3,471 9,772 $ 132,479 4,415 $48,742
====== ====== ====== ======= ====== ========= ====== =======
</TABLE>
- ---------------------
(a) Managed SmallCap Value Index commenced operations on November 24, 1997.
(b) Less than $500.
(c) Less than 500 shares.
29
See Notes to Financial Statements.
<PAGE>
[This page intentionally left blank.]
30
<PAGE>
NATIONS FUNDS
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Net Realized Net Increase/
Net Asset and (Decrease) in Dividends Total
Value Net Unrealized Net Asset from Net Dividends
Beginning Investment Gain/(Loss) on Value from Investment and
of Period Income Investments Operations Income Distributions
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Managed Value Index:
Primary A
Six months ended 09/30/1998(unaudited) $11.32 $0.08 $(1.47) $(1.39) $(0.04) $(0.04)
Period ended 03/31/1998*# ............ 10.00 0.07 1.31 1.38 (0.06) (0.06)
Investor A
Six months ended 09/30/1998(unaudited) $11.32 $0.07 $(1.46) $(1.39) $(0.04) $(0.04)
Period ended 03/31/1998*# ............ 10.00 0.05 1.32 1.37 (0.05) (0.05)
Investor C
Six months ended 09/30/1998(unaudited) $11.32 $0.05 $(1.46) $(1.41) $(0.03) $(0.03)
Period ended 03/31/1998*# ............ 10.00 0.04 1.33 1.37 (0.05) (0.05)
</TABLE>
- ---------------------
* Managed Value Index Primary A, Investor A and Investor C Shares commenced
operations on November 24, 1997.
+ Annualized.
++ Total return represents aggregate total return for the period indicated
and does not reflect the deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average share method.
(a) 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, was less than 0.01%.
(b) The effect of interest expense on the operating expense ratio was less
than 0.01%..
See Notes to Financial Statements.
31
<PAGE>
NATIONS FUNDS
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Ratios to Average Net Assets / Supplemental Data
-----------------------------------------------------
Operating
Expenses
Net Asset Net Assets Without
Value End of Waivers Portfolio
End of Total period Operating Net Investment and/or Turnover
Period Return++ ( 000 ) Expenses Income reimbursements Rate
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Managed Value Index:
Primary A
Six months ended 09/30/1998(unaudited) $ 9.88 (12.31)% $ 8,940 0.50%+(a)(b) 1.58%+ 1.88%+(a) 43%
Period ended 03/31/1998*# ............ 11.32 13.78 7,330 0.50+(a)(b) 1.72+ 1.57+(a) 3
Investor A
Six months ended 09/30/1998(unaudited) $ 9.88 (12.35)% $ 2,799 0.75%+(a)(b) 1.33%+ 2.13%+(a) 43%
Period ended 03/31/1998*# ............ 11.32 13.68 2,370 0.75+(a)(b) 1.47+ 1.82+(a) 3
Investor C
Six months ended 09/30/1998(unaudited) $ 9.88 (12.38)% $ 9 1.00%+(a)(b) 1.08%+ 2.38%+(a) 43%
Period ended 03/31/1998*# ............ 11.32 13.69 4 1.00+(a)(b) 1.22+ 2.07+(a) 3
</TABLE>
- ---------------------
* Managed Value Index Primary A, Investor A and Investor C Shares commenced
operations on November 24, 1997.
+ Annualized.
++ Total return represents aggregate total return for the period indicated
and does not reflect the deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average share method.
(a) 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, was less than 0.01%.
(b) The effect of interest expense on the operating expense ratio was less
than 0.01%..
See Notes to Financial Statements.
32
<PAGE>
NATIONS FUNDS
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Net Realized
Net Assets and Net Increase/ Dividends Distributions Total
Value Net Unrealized (Decrease) in from Net from Net Dividends
Beginning Investment Gain/(Loss) Net Asset Value Investment Realized and
of Period Income on Investments from Operations Income Capital Gains Distributions
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Managed Index:
Primary A
Six months ended 09/30/1998(unaudited) $17.14 $ 0.09 $ (1.41) $ (1.32) $ (0.09) $ (0.15) $ (0.24)
Year ended 03/31/98 .................. 11.89 0.15 5.42 5.57 (0.17) (0.15) (0.32)
Period ended 03/31/97* ............... 10.00 0.15 1.87 2.02 (0.13) -- (0.13)
Primary B
Six months ended 09/30/1998(unaudited) $17.11 $ 0.06 $ (1.42) $ (1.36) $ (0.05) $ (0.15) $ (0.20)
Period ended 03/31/98** .............. 14.52 0.14 2.73 2.87 (0.13) (0.15) (0.28)
Investor A
Six months ended 09/30/1998(unaudited) $17.14 $ 0.07 $ (1.41) $ (1.34) $ (0.07) $ (0.15) $ (0.22)
Year ended 03/31/98 .................. 11.89 0.14 5.40 5.54 (0.14) (0.15) (0.29)
Period ended 03/31/97* ............... 10.00 0.12 1.89 2.01 (0.12) -- (0.12)
Investor C
Six months ended 09/30/1998(unaudited) $17.14 $ 0.05 $ (1.41) $ (1.36) $ (0.05) $ (0.15) $ (0.20)
Year ended 03/31/98 .................. 11.90 0.10 5.39 5.49 (0.10) (0.15) (0.25)
Period ended 03/31/97* ............... 10.00 0.11 1.90 2.01 (0.11) -- (0.11)
</TABLE>
- ---------------------
* Managed Index Primary A, Investor A and Investor C Shares commenced
operations on July 31, 1996.
** Managed Index Primary B Shares commenced operations on September 4, 1997
+ Annualized.
++ Total return represents aggregate total return for the period indicated
and does not reflect the deduction of any applicable sales charges.
(a) 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, was less than 0.01%.
(b) The effect of interest expense on the operating expense ratio was less
than 0.01%.
33 See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Ratios to Average Net Assets / Supplemental Data
-------------------------------------------------------
Operating
Expenses
Net Asset Net Assets Without
Value End of Waivers Portfolio
End of Total period Operating Net Investment and /or Turnover
Period Return++ ( 000 ) Expenses Income reimbursements Rate
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Managed Index:
Primary A
Six months ended 09/30/1998(unaudited) $15.58 (7.86)% $528,014 0.50%+(a)(b) 1.17%+ 0.72%+(a) 16%
Year ended 03/31/98 .................. 17.14 47.54 374,504 0.50%(a)(b) 1.26 0.80%(a) 30
Period ended 03/31/97* ............... 11.89 20.22 42,226 0.50%+(a) 1.92+ 1.05%+(a) 17
Primary B
Six months ended 09/30/1998(unaudited) $15.55 (8.08)% $3 1.00%+(a) 0.67%+ 1.32%+(a) 16%
Period ended 03/31/98** ............. 17.11 18.24 3 1.00%+(a)(b) 0.76%+ 1.30%+(a) 30
Investor A
Six months ended 09/30/1998(unaudited) $15.58 (7.96)% $30,058 0.75%+(a)(b) 0.92%+ 0.97%+(a) 16%
Year ended 03/31/98 .................. 17.14 47.21 25,447 0.75%(a)(b) 1.01% 1.05%(a) 30
Period ended 03/31/97* ............... 11.89 20.12 3,038 0.75%+(a) 1.67+ 1.30%+(a) 17
Investor C
Six months ended 09/30/1998(unaudited) $15.58 (8.07)% $4,029 1.00%+(a)(b) 0.67%+ 1.22%+(a) 16%
Year ended 03/31/98 .................. 17.14 46.71 4,284 1.00%(a)(b) 0.76% 1.30%(a) 30%
Period ended 03/31/97* ............... 11.90 20.11 83 1.00%+(a) 1.42+ 1.55%+(a) 17
</TABLE>
- ------------------------------
* Managed Index Primary A, Investor A and Investor C Shares commenced
operations on July 31, 1996.
** Managed Index Primary B Shares commenced operations on September 4, 1997
+ Annualized.
++ Total return represents aggregate total return for the period indicated
and does not reflect the deduction of any applicable sales charges.
(a) 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, was less than 0.01%.
(b) The effect of interest expense on the operating expense ratio was less
than 0.01%..
See Notes to Financial Statements. 34
<PAGE>
NATIONS FUNDS
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Net Realized
Net Assets and Net Increase/ Dividends Distributions
Value Net Unrealized (Decrease) in from Net from Net
Beginning Investment Gain/(Loss) Net Asset Value Investment Realized
of Period Income on Investments from Operations Income Capital Gains
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Managed SmallCap Value Index:
Primary A
Six months ended 09/30/1998(unaudited) $11.46 $0.03 $(2.48) $(2.45) $(0.04) $(0.12)
Period ended 03/31/1998* ............. 10.00 0.03 1.46 1.49 (0.03) --
Investor A
Six months ended 09/30/1998(unaudited) $11.46 $0.02 $(2.48) $(2.46) $(0.03) $(0.12)
Period ended 03/31/1998* ............. 10.00 0.02 1.46 1.48 (0.02) --
Investor C
Six months ended 09/30/1998(unaudited) $11.46 $0.01 $(2.48) $(2.47) $(0.02) $(0.12)
Period ended 03/31/1998* ............. 10.00 0.01 1.46 1.47 (0.01) --
</TABLE>
Total
Dividends
and
Distributions
-------------
Managed SmallCap Value Index:
Primary A
Six months ended 09/30/1998(unaudited) $(0.16)
Period ended 03/31/1998* ............. (0.03)
Investor A
Six months ended 09/30/1998(unaudited) $(0.15)
Period ended 03/31/1998* ............. (0.02)
Investor C
Six months ended 09/30/1998(unaudited) $(0.14)
Period ended 03/31/1998* ............. (0.01)
- ------------------------
* Managed SmallCap Value Primary A, Investor A and Investor C Shares
commenced operations on November 24, 1997.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
(a) 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, was less than 0.01%.
(b) The effect of interest expense on the operating expense ratio was less than
0.01%.
See Notes to Financial Statements.
35
<PAGE>
NATIONS FUNDS
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios to Average Net Assets/Supplemental Data
---------------------------------------------------------
Operating
Expenses
Net Asset Net Assets Without
Value End of Waivers Portfolio
End of Total period Operating Net Investment and/or Turnover
Period Return++ (000) Expenses Income reimbursements Rate
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Managed SmallCap Value Index:
Primary A
Six months ended 09/30/1998(unaudited) $ 8.85 (21.66)% $2,510 0.50%+(a)(b) 0.74%+ 4.33%+(a) 81%
Period ended 03/31/1998* ............. 11.46 14.88 2,106 0.50+(a)(b) 0.78+ 2.17+(a) 30%
Investor A
Six months ended 09/30/1998(unaudited) $ 8.85 (21.75)% $2,382 0.75%+(a)(b) 0.49%+ 4.58%+(a) 81%
Period ended 03/31/1998* ............. 11.46 14.79 1,859 0.75+(a)(b) 0.53+ 2.42+(a) 30%
Investor C
Six months ended 09/30/1998(unaudited)
Period ended 03/31/1998* ............. $ 8.85 (21.82)% $83 1.00%+(a)(b) 0.24%+ 4.83%+(a) 81%
11.46 14.71 16 1.00+(a)(b) 0.28+ 2.67+(a) 30%
</TABLE>
See Notes to Financial Statements.
36
<PAGE>
NATIONS FUNDS
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Net Realized Net Increase/
Net Asset and (Decrease) in Dividends Distributions Total
Value Net Unrealized Net Asset from Net from Net Dividends
Beginning Investment Gain/(Loss) Value from Investment Realized and
of Period Income Investments Operations Income Capital Gains Distributions
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Managed SmallCap Index:
Primary A
Six months ended 09/30/1998(unaudited) $14.10 $0.03 $(3.31) $(3.28) $(0.03) $(0.14) $(0.17)
Year ended 03/31/1998................. 9.83 0.06 4.58 4.64 (0.06) (0.31) (0.37)
Period ended 03/31/1997*.............. 10.00 0.03 (0.17) (0.14) (0.03) -- (0.03)
Primary B
Six months ended 09/30/1998(unaudited) $14.09 $0.03 $(3.34) $(3.31) -- $(0.14) $(0.14)
Year ended 03/31/1998................. 9.83 0.00 4.58 4.58 $(0.01) (0.31) (0.32)
Period ended 03/31/1997*.............. 10.00 0.02 (0.17) (0.15) (0.02) -- (0.02)
Investor A
Six months ended 09/30/1998(unaudited) $14.08 $0.04 $(3.33) $(3.29) $(0.01) $(0.14) $(0.15)
Year ended 03/31/1998................. 9.82 0.03 4.57 4.60 (0.03) (0.31) (0.34)
Period ended 03/31/1997*.............. 10.00 0.03 (0.18) (0.15) (0.03) -- (0.03)
Investor C
Six months ended 09/30/1998(unaudited) $14.09 $0.01 $(3.32) $(3.31) -- $(0.14) $(0.14)
Year ended 03/31/1998................. 9.83 0.01 4.58 4.59 $(0.02) (0.31) (0.33)
Period ended 03/31/1997*.............. 10.00 0.03 (0.17) (0.14) (0.03) -- (0.03)
</TABLE>
- ----------------------
* Managed SmallCap Index 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) 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, was less than 0.01%.
(b) The effect of interest expense on the operating expense ratio was less than
0.01%.
37 See Notes to Financial Statements.
<PAGE>
NATIONS FUNDS
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios to Average Net Assets/Supplemental Data
-----------------------------------------------------
Operating
Expenses
Net Asset Net Assets Without
Value End of Waivers Portfolio
End of Total period Operating Net Investment and/or Turnover
Period Return++ (000) Expenses Income reimbursements Rate
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Managed SmallCap Index:
Primary A
Six months ended 09/30/1998(unaudited) $10.65 (23.51)% $ 182,202 0.50%+(a)(b) 0.61%+ 0.81%+(a) 31%
Year ended 03/31/1998................. 14.10 47.71 102,437 0.50(a)(b) 0.52 1.02(a) 62
Period ended 03/31/1997*.............. 9.83 (1.37) 40,851 0.50+ 1.05+ 1.21+ 18
Primary B
Six months ended 09/30/1998(unaudited) $10.64 (23.70)% $ 154 1.00%+(a)(b) 0.11%+ 1.41%+(a) 31%
Year ended 03/31/1998................. 14.09 47.04 160 1.00(a)(b) 0.02 1.52(a) 62
Period ended 03/31/1997*.............. 9.83 (1.51) 86 1.00+ 0.55+ 1.71+ 18
Investor A
Six months ended 09/30/1998(unaudited) $10.64 (23.57)% $ 9,147 0.75%+(a)(b) 0.36%+ 1.06%+(a) 31%
Year ended 03/31/1998................. 14.08 47.35 13,768 0.75(a)(b) 0.27 1.27(a) 62
Period ended 03/31/1997*.............. 9.82 (1.52) 334 0.75+ 0.80+ 1.46+ 18
Investor C
Six months ended 09/30/1998(unaudited) $10.64 (23.72)% $ 821 1.00%+(a)(b) 0.11%+ 1.31%+(a) 31%
Year ended 03/31/1998................. 14.09 47.10 524 1.00(a)(b) 0.02 1.52(a) 62
Period ended 03/31/1997*.............. 9.83 (1.46) 19 1.00+ 0.55+ 1.71+ 18
</TABLE>
See Notes to Financial Statements.
38
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NATIONS FUNDS
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Notes to Financial Statements (unaudited)
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Nations Fund Trust (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end investment company. At
September 30, 1998, the Trust offered thirty-seven separate portfolios. These
financial statements pertain only to the four managed index portfolios of the
Trust (each a "Fund" and collectively, the "Funds"). Financial statements for
the other portfolios of the Trust are presented under separate cover. Managed
Index and Managed SmallCap Index currently offer four classes of shares: Primary
A Shares, Primary B Shares, Investor A Shares and Investor C Shares. Managed
SmallCap Value Index and Managed Value Index offer three classes of shares:
Primary A 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: Securities which are traded on a recognized exchange or on
NASDAQ are valued at the last sales price on the exchange or market on which
such securities are primarily traded. Securities traded only over-the-counter
are valued at the closing bid prices or, if no sale occurred on such day, at the
mean of the current bid and asked prices. Restricted securities, securities for
which market quotations are not readily available, and certain other assets are
valued by the investment advisor under the supervision of the Board of Trustees.
Short-term investments that mature in 60 days or less are valued at amortized
cost.
Futures Contracts: Each Fund may invest in futures contracts. Upon entering into
a futures contract, the Fund is required to deposit with the broker an amount of
cash or cash 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. 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 securities sold. Interest income, adjusted for
accretion of discounts and amortization of premiums, is earned from settlement
date and recorded on an accrual basis. Dividend income is recorded on
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: Distributions from net investment
income are declared and paid each month by the Managed Index Fund; all other
Funds declare and pay distributions each calander quarter.
Each Fund will distribute net realized capital gains (including net short-term
capital gains), annually after the fiscal year in which the capital gains were
earned, unless offset by any available capital loss carryforward. 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.
Federal Income Tax: Each Fund intends to continue to qualify as a regulated
investment company by complying with the applicable requirements of the Internal
Revenue Code of 1986, as amended, and by distributing substantially all of its
earnings to its shareholders. Therefore, no provision is made for Federal income
or excise taxes.
Expenses: General expenses of the Trust are allocated to the
39
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NATIONS FUNDS
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Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
Funds based upon relative net assets. Expenses directly attributable to a Fund
or class of shares are charged to such Fund or class. Expenses not directly
attributable to the operations of any class of shares are prorated based on the
relative net assets of each class. The Funds bear all costs in connection with
their organization, including the fees and expenses of registering and
qualifying their shares for distribution under Federal and state securities
regulations. All such costs are being amortized on a straight-line basis over a
period of five years from commencement of operations.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS
The Trust has entered into an investment advisory agreement (the "Investment
Advisory Agreement") with NationsBanc Advisors, Inc. ("NBAI") pursuant to which
NBAI provides investment advisory services to the Funds. Under this Investment
Advisory Agreement, NBAI is entitled to receive a fee, calculated daily and
payable monthly, at the annual rate of 0.50% of each Fund's average daily net
assets.
The Trust has entered into a sub-advisory agreement with NBAI and TradeStreet
Investment Associates, Inc. ("TradeStreet"), a wholly-owned subsidiary of
NationsBank, N.A. ("NationsBank"), pursuant to which TradeStreet is entitled to
receive a fee from NBAI at the annual rate of 0.10% of each Fund's average daily
net assets.
Stephens, Inc. ("Stephens") serves as the administrator of the Trust. First Data
Investor Services Group, Inc. ("First Data"), a wholly-owned subsidiary of First
Data Corporation, serves as co-administrator. Stephens and First Data are
entitled to receive a combined fee, computed daily and paid monthly, at the
annual rate of 0.10% of average daily net assets of each Fund. NBAI is the
sub-administrator of the Trust pursuant to an agreement with Stephens. For the
six months ended September 30, 1998, Stephens earned $272,000 from the Funds for
its administration services, of which $38,000 was paid to NBAI for its services
as sub-administrator.
The investment advisor, sub-advisor and administrator may, from time to time,
voluntarily reduce their fees payable by each Fund. For the six months ended
September 30, 1998, the fee waivers and reimbursements were as follows:
Fees Waived Expenses Reimbursed
by Advisor by Advisor
(000) (000)
---------------------------------------
Managed Value Index .. $ 29 $ 51
Managed Index ........ 617 --
Managed SmallCap
Value Index ....... 63 22
Managed SmallCap Index 282 14
NationsBank of Texas, N.A. ("NationsBank of Texas") served as the custodian of
the Trust's assets until it merged with NationsBank on May 6, 1998. NationsBank
began serving as custodian for the Trust's assets on that date and provided the
same services as were previously provided by NationsBank of Texas. For the six
months ended September 30, 1998, NationsBank of Texas and NationsBank earned
$2,000 and $10,000 respectively, for providing such services. The Bank of New
York ("BNY") has entered into agreements with each of the Funds and NationsBank,
whereby BNY serves as sub-custodian for the Funds. For the six months ended
September 30, 1998, expenses of the Funds were reduced by $2,000 under expense
offset arrangements with BNY. The Funds could have invested a portion of the
assets utilized in connection with the expense offset arrangements in an income
producing asset if they had not entered into such arrangements.
First Data also serves as the transfer agent for the Funds' shares. NationsBank
of Texas served as the sub-transfer agent for the Primary Shares of the Funds
until it merged with NationsBank on May 6, 1998. NationsBank began serving as
the sub-transfer agent for the Primary Shares of the Funds on that date and is
providing the same services as were previously provided by NationsBank of Texas.
For the six months ended September 30, 1998, NationsBank of Texas and
NationsBank earned approximately $2,000 and $8,000 respectively, for providing
such services.
Stephens also serves as distributor of the Funds' shares. For the six months
ended September 30, 1998, the Funds were informed that the distributor received
less than $500 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.
40
<PAGE>
NATIONS FUNDS
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Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
The Trust pays each unaffiliated Trustee 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 also reimburses expenses incurred by each unaffiliated Trustee in
attending such meetings.
The Trust's eligible Trustees may participate in non-qualified deferred
compensation and retirement plans 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 portfolio of Nations Fund,
Inc. The expense for the deferred compensation and retirement plans is included
in "Trustees' fees and expenses" in the Statements of Operations.
Certain of the Funds have made daily investments of cash balances in Nations
Cash Reserves, a portfolio of Nations Institutional Reserves, pursuant to an
exemptive order received from the Securities and Exchange Commission. For the
six months ended September 30, 1998, the Funds earned $350,000 in the aggregate
from such investments.
A significant portion of each Fund's Primary A Shares represent investments by
fiduciary accounts over which NationsBank has either sole or joint investment
discretion.
On September 30, 1998, NationsBank Corporation, the parent company of
NationsBank, merged into BankAmerica Corporation.
3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS
The Trust has adopted a shareholder administration plan for Primary B Shares of
each Fund and shareholder servicing and distribution plans for the Investor A
and Investor C Shares of each Fund. The administration plan permits the Funds to
compensate institutions for shareholder administration services provided to
their customers that own Primary B Shares. The distribution plans, adopted
pursuant to Rule 12b-1 under the 1940 Act, permit the Funds to compensate or
reimburse the distributor (and for Investor A Shares, the distributor and/or
selling agents) for activities or expenses primarily intended to result in the
sale of the classes' shares. Payments are made at an annual rate, as a
percentage of average daily net assets set from time to time by the Board of
Trustees, and are charged as expenses of each Fund directly to the applicable
class. A substantial portion of the expenses pursuant to these plans is paid to
affiliates of NationsBank and NBAI.
At September 30, 1998, the current rates and plan limits in effect, as a
percentage of average daily net assets, were as follows:
Plan
Current Rate Limit
-------------------------------
Primary B Administrator Plan ....... 0.50% 0.60%
Investor A Sharehoder Servicing and
Distribution Plan ................ 0.25% 0.25%
Investor C Sharehoder Servicing Plan 0.25% 0.25%
Investor C Distribution Plan ....... 0.25% 0.25%
4. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, excluding
long-term U.S. government securities and short-term investments, for the six
months ended September 30, 1998, were as follows:
Purchases Sales
(000) (000)
-------------------------------
Managed Value Index ....... $ 8,802 $ 4,734
Managed Index ............. 287,290 84,710
Managed SmallCapValue Index 5,860 3,529
Managed SmallCap Index .... 182,350 54,922
There were no purchases or sales of long-term U.S. government securities for the
six months ended September 30, 1998.
5. FUTURES CONTRACTS
At September 30, 1998, the following Fund had futures contracts open:
Aggregate Unrealized
Number of Face Value Expiration (depreciation)
Portfolio Purchases Contracts (000) Date (000)
- -------------------------------------------------------------------------------
Managed Index 10 2,601 December 1998 (36)
6. SHARES OF BENEFICIAL INTEREST
As of September 30, 1998, an unlimited number of shares of beneficial interest
without par value were authorized for the Trust. 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.
41
<PAGE>
NATIONS FUNDS
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Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
7. LINE OF CREDIT
The Trust participates in an uncommitted line of credit provided by BNY under an
agreement (the "Agreement") dated July 10, 1998. 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. Interest on borrowings is payable at the Federal funds rate plus
0.50% on an annualized basis. Each participating Fund maintains a ratio of no
less than 4 to 1 net assets (not including funds borrowed pursuant to the
Agreement) to the aggregate amount of indebtedness pursuant to the Agreement.
For the six months ended September 30, 1998, borrowing by the Funds, under the
Agreements, was as follows:
Average Average Average
Amount Average Debt Interest
Outstanding Shares Per Share Rate
Fund (000) (000) (000) (000)
- --------------------------------------------------------------------------------
Managed SmallCap
Value Index ... $ 24 443 0.06 6.04%
Managed SmallCap
Index .......... 130 15,580 0.01 6.02%
The average amount outstanding was calculated based on daily balances in the
period.
8. SECURITIES LENDING
Under an agreement with BNY, the Funds can lend their securities to approved
brokers, dealers and other financial institutions. Loans are collateralized by
cash, in an amount at least equal to the market value of the securities. The
cash collateral received is invested in Nations Cash Reserves, a portfolio of
Nations Institutional Reserves. A portion of the income generated by the
investment of the collateral, net of any rebates paid by BNY to borrowers, is
remitted to BNY as lending agent, and the remainder is paid to the Fund.
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. The Fund bears the risk of loss with respect to the
investment of collateral.
At September 30, 1998, the following Funds had securities on loan:
Market Value of Market Value
Loaned Securities of Collateral
Fund (000) (000)
- -------------------------------------------------------------------
Managed Index .............. $16,869 $18,070
Managed SmallCap Index ..... 8,555 8,949
9. REORGANIZATIONS
On November 12, 1997, Managed Index ("Acquiring Fund"), acquired the assets of
Equity Index/Enhanced Market Fund, a common trust fund managed by NationsBank
("Acquired Fund") in a tax-free reorganization in exchange for shares of the
Acquiring Fund. The number and value of shares issued by the Acquiring Fund are
presented in the Schedule of Capital Stock Activity. Net assets and unrealized
appreciation as of the conversion date were as follows:
Total Net Assets Acquired Fund
Total Net Assets Total Net Assets Of Aquiring Fund Unrealized
of Aquired Fund of Aquiring Fund After Aquisition Appreciation
- --------------------------------------------------------------------------------
$ 137,455 $ 111,269 $ 248,724 $ 73,337
10. SUBSEQUENT EVENTS
Effective October 19, 1998, BNY began serving as the custodian for the Trust's
assets and is providing the same services as were previously provided by
NationsBank. There no longer is a sub-custodian for the Trust.
On November 5, 1998, the Trust's Board of Trustees approved changes in the
Trust's administration arrangements whereby NBAI and Stephens Inc. will each
serve as co-administrators of the Trust, and BNY will serve as the
sub-administrator of the Trust under an agreement with the Trust and NBAI. These
changes, which will become effective for the Funds in the first quarter of 1999,
will reflect an increase in the overall administration fees paid by the Funds.
42
<PAGE>
[GRAPHIC APPEARS HERE]
<PAGE>
[LOGO OF NATIONS FUNDS APPEARS HERE] BULK RATE
U.S. POSTAGE
P.O. Box 32602 PAID
Charlotte, NC 28234-4602 N READING, MA
Toll Free 1-800-982-2271 PERMIT NO.
105
