<PAGE> 1
EATON VANCE MUNICIPALS TRUST
FOR THE FUNDS:
* EV Marathon Arizona Tax Free Fund
* EV Marathon Colorado Tax Free Fund
* EV Marathon Connecticut Tax Free Fund
* EV Marathon Michigan Tax Free Fund
* EV Marathon Minnesota Tax Free Fund
* EV Marathon New Jersey Tax Free Fund
* EV Marathon Pennsylvania Tax Free Fund
* EV Marathon Texas Tax Free Fund
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[LOGO]
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SEMI-ANNUAL SHAREHOLDER REPORT
JANUARY 31, 1995
<PAGE> 2
TO SHAREHOLDERS:
To say that 1994 was a difficult time for fixed-income markets would be an
understatement. According to several reports, 1994 was the worst single year
for bond markets since at least 1927.
Put simply, the troubles experienced by fixed-income markets were the result
of an economy that remained stronger than most observers had anticipated at
the start of the year. In response to this persistent economic strength and
in an attempt to keep inflation in check, the Federal Reserve raised
short-term interest rates a total of six times during the year, thereby
depressing bond prices.
Since the end of the year, the Fed already has raised interest rates once
again. It's expected that economists and market observers alike will continue
to watch closely both the Fed's actions and the economic indicators, to
ensure that inflation is in check.
But the market slide was not the only investment news during 1994. Many
shareholders also may have heard about the problems affecting the investments
of Orange County, CA., and may have wondered whether those problems have in
any way affected other municipal investments. While Orange County bonds were
affected, the market realized that this was an isolated situation and other
bonds have not been affected.
Despite the difficulties that beset the market in 1994, we feel optimistic
about prospects for 1995. The market now appears convinced that the Federal
Reserve is, in fact, keeping a tight watch on inflation. Core inflation was
2.7 percent for 1994.
Also, the changes in Washington that resulted from the November elections
could be positive for financial markets. While it is impossible to predict
the outcomes of government initiatives, it appears that proposals already put
forth to cut spending and taxes could have a positive effect if they are
enacted.
For this most recent report, please note that we have made some changes in
the way we describe the individual Funds and their Portfolios. For the first
time, we also are including a profile of a specific bond held in the
Portfolio. This information will help you understand the kinds of investments
that we make with your money.
I hope that you find this additional information useful.
Sincerely,
/s/ Thomas J. Fetter
[Photo of Thomas J. Fetter]
Thomas J. Fetter
President
March 20, 1995
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<TABLE>
<CAPTION>
DIVIDENDS NAV FUND'S If Your You Would
PAID Per Share DISTRIBU- Combined Need An
FUND RESULTS FOR THE SIX MONTHS BY FUND at TION Federal After-Tax
ENDED JANUARY 31, 1995 (DURING 1/31/95 RATE and Equivalent
SIX MONTHS AT State Tax Yield Of...
ENDED 1/31) 1/31/95 Rate Is...
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<S> <C> <C> <C> <C> <C>
EV Marathon Arizona Tax Free Fund $0.274 $10.07 4.92% 40.42% 8.26%
[Graphic of AZ State]
EV Marathon Colorado Tax Free Fund $0.275 $9.68 5.14% 39.20% 8.45%
[Graphic of CO State]
EV Marathon Connecticut Tax Free Fund $0.270 $9.61 5.08% 38.88% 8.31%
[Graphic of CT State]
EV Marathon Michigan Tax Free Fund $0.266 $9.91 4.89% 41.74% 8.39%
[Graphic of MI State]
EV Marathon Minnesota Tax Free Fund $0.270 $9.64 5.05% 41.44% 8.62%
[Graphic of MN State]
EV Marathon New Jersey Tax Free Fund $0.287 $10.07 5.16% 40.26% 8.64%
[Graphic of NJ State]
EV Marathon Pennsylvania Tax Free Fund $0.282 $9.91 5.15% 42.76% 9.00%
[Graphic of PA State]
EV Marathon Texas Tax Free Fund $0.290 $9.94 5.29% 36.00% 8.27%
[Graphic of TX State]
</TABLE>
1
<PAGE> 3
EV MARATHON ARIZONA TAX FREE FUND
Arizona continues to diversify its economy beyond an overdependence on the
state's traditional mainstays of mining, livestock and agriculture. The
state's rapid job growth has been concentrated primarily in the construction,
manufacturing, trade and services sectors. Construction industry employment
has been especially robust with housing permits and commercial construction
awards each posting strong, double-digit growth, according to the Federal
Reserve Bank of San Francisco. Service jobs represent 25 percent of total
employment, while trade comprises 21 percent, and government another 16
percent. Population growth exceeds the national average as Arizona continues
to attract retirees from the wintry climes of the East and Midwest. With the
population surge has come a growing urbanization and increased social
spending.
Having met the fiscal pressures of the 1980s through budget cuts, borrowings,
and tax adjustments, Arizona now appears to have created more breathing room
through significant cuts in expenditures. Moreover, in the recent fiscal
year, the state's finances have benefited from an accelerating economy as
sales, corporate income
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<TABLE>
[Graphic of AZ State]
PORTFOLIO OVERVIEW
Based on market value as of January 31, 1995
<S> <C>
Number of issues................................... 55
Average quality.................................... Aa-
Investment grade................................... 99.0%
Effective maturity................................. 19.4 yrs.
Largest sectors:
Utilities...................................... 19.6%
Insured - hospitals............................ 13.1*
General obligations............................ 10.2
Transportation................................. 6.9
Insured-utilities.............................. 6.1*
<FN>
* Private insurance does not remove the market risk associated with this investment.
</TABLE>
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and individual income tax revenues have each improved significantly. As a
result, the state has managed to boost its general fund balance to a more
comfortable level of 2 percent of expenditures, providing a more stable outlook
for the state's finances.
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"Entering 1994, the Portfolio was defensively positioned, but the market
decline was so sharp that even defensive bonds underperformed. In a
deteriorating market environment, I sold lower-yielding bonds to establish
capital losses that can be used to offset future capital gain distributions and
generate higher income levels.
"Recent strategies have included the sale of current coupon bonds and the
purchase of discount bonds, which has increased the Portfolio's exposure to the
market rally of the past two months. Finally, from a sector standpoint, I've
continued to add to the Portfolio's weighting of state-backed nursing home
bonds. Oddly, the market seems to have overlooked state-backing even though
the story remains strong. Because they represent unusual value, I've added
further to the Portfolio's holdings."
Nicole Anderes - Portfolio Manager [Photo of Nicole Anderes]
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[Graphic of Utility Pole]
YOUR INVESTMENT AT WORK:
Salt River Project
Electric Revenue Bonds
Salt River Project is the largest electric utility in Arizona and the third
largest public power utility in the U.S. Rated Aa/AA by Moody's and S&P, the
bonds are backed by revenues of the utility's electric system. Bond proceeds
are intended to fund the utility's construction projects and the purchase of
equipment to upgrade facilities. Unlike the majority of utilities, the Salt
River Project has an unusually high degree of flexibility in setting rates.
Since rates are determined by the local city council, no outside regulatory
approval vote is required.
Salt River continues to maintain a stable financial operation, a low cost
structure, and comfortable interest coverage. The bonds are among the most
actively traded bonds in the Arizona market, providing the Portfolio a high
quality bond and a cash surrogate. As deep discount bonds, these bonds offer
more potential for capital appreciation in the event of a continued market
rally.
2
<PAGE> 4
EV MARATHON COLORADO TAX FREE FUND
Colorado's economy continued to outpace the U.S. economy in 1994, although
with somewhat less gusto than previous years. Strong population growth and
in-migration have produced a surge in per-capita income, housing starts, and
job creation. Around 150,000 new jobs have been created since 1990,
predominantly in services, trade, and government. Unemployment hovered in
the 4 percent range, well below the national rate.
Having diversified beyond the energy concentration that plagued the state in
the 1980s, Colorado is now registering manufacturing gains due to the growth
of aerospace, telecommunications, computer, medical and environmental
facilities within the state. Now, with the recent passage of the General
Agreement on Tariffs and Trade, Colorado is poised to become a major
beneficiary of increased global trade. Meanwhile, Colorado's fiscal profile
is a healthy one, with tax revenues generally exceeding expectations. While
the state will need to meet supplemental appropriations for correctional
facilities and additional educational outlays tied to school funding reform,
the state continues to enjoy strong
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<TABLE>
[Graphic of CO State]
PORTFOLIO OVERVIEW
Based on market value as of January 31, 1995
<S> <C>
Number of issues.............................................. 130
Average quality............................................... Aa+
Investment grade.............................................. 99.1%
Effective maturity............................................ 7.01 yrs.
Largest sectors:
Insured - hospitals.................................... 16.3%*
General obligation (GOs)............................... 11.3
Electric Utilities..................................... 10.2
Transportation......................................... 10.0
Insured GOs - school districts......................... 9.8*
<FN>
* Private insurance does not remove the market risk associated with this investment.
</TABLE>
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growth in sales, business, and individual income tax revenues. The state's
general fund reserves are expected to remain in the 7-to-8 percent range, well
above the required statutory level of 4 percent of appropriated expenditures.
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"The Colorado market continued to be characterized by tight supply, due to
the ongoing limitations on issuance imposed by Amendment One. After lengthy
and very costly delays, the much-anticipated Denver Airport (DIA) opened to
highly favorable reviews. Interestingly, DIA bonds have been among the Colorado
market's strongest performers in recent months.
"From a strategic standpoint, I have emphasized quality in the Portfolio due
to continuing narrow quality spreads. Also, in the aftermath of a difficult
market in 1994, I've replaced lower-yielding bonds with higher-yielding
issues which created capital losses that will help offset future capital
gains and reduce future capital gain tax liabilities for shareholders."
Cynthia J. Clemson - Portfolio Manager [Photo of Cynthia J. Clemson]
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[Graphic of Utility Pole]
YOUR INVESTMENT AT WORK
Colorado Springs, CO
Utilities System
Revenue Bonds
These bonds are rated Aa/AA by Moody's and S&P, respectively, and are secured
by a lien on the net revenues of the combined utilities system of the City
of Colorado Springs. The proceeds provide funding for improvements to a
combined system that includes electricity generation and transmission, gas
distribution, water supply treatment and distribution, and wastewater
collection and treatment.
The combined utility has an unusually high degree of flexibility in setting
rates since rates are determined by the local city council. Unlike the
majority of utilities, no outside regulatory approval vote is required. This
purchase added value to the Portfolio because the bonds are actively traded,
highly liquid, highly rated, and as discount bonds, offer significantly more
upside potential in the event of a continued market rally.
3
<PAGE> 5
EV MARATHON CONNECTICUT TAX FREE FUND
While significantly improved in the past year, Connecticut's economy
continued to lag national and regional trends. The state's deep recession,
which was felt across a broad range of industries, exacted a heavy job toll
in key industries such as finance, real estate, insurance and defense. Those
sectors were hard-hit by industry restructurings, and, in the case of defense
manufacturing, by shrinking government appropriations. Together, those
setbacks eroded the state's economic base. However, while the employment
outlook for those industries remains relatively weak, job gains in
construction, service, trade, health care and tourism have partially offset
those losses and helped pace the Connecticut recovery.
The state's fiscal picture has brightened significantly with an improved
economy. Having encountered massive deficits earlier in the decade,
Connecticut pursued a series of fiscal and budgetary reforms, including
instituting a 4 percent income tax, lowering the state sales tax, eliminating
taxes on capital gains, dividends and interest, and instituting a
constitutional expenditure cap. While those actions were politically
controversial at first,
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<TABLE>
[Graphic of CT State]
PORTFOLIO OVERVIEW
Based on market value as of January 31, 1995
<S> <C>
Number of issues........................................ 104
Average quality......................................... AA-
Investment grade........................................ 97.5%
Effective maturity...................................... 18.9 yrs.
Largest sectors:
Healthcare (non hospital)........................... 14.3%
Insured hospitals................................... 11.4*
Education........................................... 9.1
Housing............................................. 7.8
Solid waste......................................... 7.6
<FN>
* Private insurance does not remove the market risk associated with
this investment.
</TABLE>
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they have resulted in a more stable tax revenue base. Moreover, having recorded
operating surpluses in each of the past three fiscal years, Connecticut's
headaches have lessened. With a more vibrant economic outlook, the state should
look forward to continued fiscal stability and an improving financial future.
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"Entering 1994, the Portfolio was defensively positioned, but the market
decline was so sharp that even defensive bonds underperformed. In a
deteriorating market environment, I sold some lower-yielding bonds to establish
capital losses that can be used to offset future capital gain distributions and
generate higher income levels.
"Recent strategies have included the sale of current coupon bonds and the
purchase of discount bonds, which strengthened the Portfolio's performance
during the market rally of the past two months. Finally, from a sector
standpoint, I've continued to add to the Portfolio's weighting of
state-backed nursing home bonds. Oddly, the market seems to have overlooked
the state-backing even though the story remains strong. Because they
represent unusual value, I consider the bonds a good opportunity to enhance
yield while preserving credit quality."
Nicole Anderes - Portfolio Manager [Photo of Nicole Anderes]
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[Graphic of State House]
YOUR INVESTMENT AT WORK
City of
Danbury, CT.
General Obligations
This Danbury general obligation is an example of an out-of-favor, deep
discount bond that offered good value for the Portfolio. As interest rates
edged higher through-out 1994, investors generally avoided discount bonds -
those with coupons below current coupon levels - as they offer less desirable
characteristics in a rising rate environment.
The Danbury bonds - which are rated AA/Aa by S&P and Moody's, respectively,
were similarly overlooked and undervalued. The Portfolio purchased the bonds
in December at a level that represented a 35 basis point yield advantage
relative to comparable current coupon bonds. In the subsequent market rally,
investors recognized the value of the Danbury bonds, which outperformed the
broad market.
4
<PAGE> 6
EV MARATHON MICHIGAN TAX FREE FUND
A strong surge in the cyclical economy and in domestic auto sales boosted
Michigan's economic output in 1994. Nearly 40 percent of the job growth has
been attributable to growth in the manufacturing sector, primarily autos. Car
and truck production exceeded 14 million units in 1994, with early estimates
that 1995 sales could reach 15 million.
With its large reliance on national economic trends, particularly on
manufacturing, Michigan's economic fluctuations tend to be somewhat more
volatile than many other regions. That can be especially difficult during
periods when the manufacturing sector feels pressures for cost containment.
Yet the state has also seen growth in the service and trade sectors. Michigan
continues to benefit from increasing demand from the ongoing recovery in
Europe and should be a major beneficiary from the anticipated expansion in
international trade.
On the fiscal front, Michigan has largely stabilized its finances in recent
years. Operating deficits have been eliminated through spending cuts, reduced
social
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<TABLE>
[Graphic of MI State]
PORTFOLIO OVERVIEW
Based on market value as of January 31, 1995
<S> <C>
Number of issues.............................................. 111
Average quality............................................... Aa-
Investment grade.............................................. 98.6%
Effective maturity............................................ 17.9 yrs.
Largest sectors:
Hospitals.............................................. 13.8%
Insured-general obligations............................ 11.8*
Insured-hospitals...................................... 10.6*
General obligations.................................... 8.9
Insured-water & sewer.................................. 8.0*
<FN>
* Private insurance does not remove the market risk associated with this investment.
</TABLE>
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spending, and the selective use of reserves. Michigan's efforts at property tax
reform to deal with public school funding have been applauded nationally.
More-over, with a surge in the local economy, corporate and income tax revenues
have increased, restoring reserves and putting the state's finances on a firmer
footing.
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"The bond market was unforgiving in 1994, especially of bonds with a long
duration. Oddly enough, inflation remained relatively modest, and well within
our target zones for the entire year. In the wake of the market pullback, I
have made efforts to upgrade the quality of the Portfolio, while selling
lower-yielding bonds in favor of higher-yielding issues. By increasing the
average coupon, we should improve the income potential of the Portfolio. With a
healthier market outlook, I have maintained a relatively aggressive duration.
"I continue to look for special situations that may provide good yield
situations for the Portfolio, including smaller non-rated bonds.
Paradoxically, in addition to providing a boost in yields, these non-rated
bonds often tend to be more stable than lower-rated bonds."
Timothy T. Browse - Portfolio Manager [Photo of Timothy T. Browse]
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[Graphic of State House]
YOUR INVESTMENT AT WORK
Grand Ledge, MI
General Obligations
Michigan School District
This issue is dedicated to public school funding in this small community west
of Lansing, and is representative of the Portfolio's adjustments in the wake
of last year's market decline. Rated Aaa/AAA by Moody's and S&P, the bond
came to market at a significant premium. It is unusual for a bond to come to
market at a high premium, which demonstrated the extent to which it had
become a buyer's market.
The bond was especially attractive to investors for two major reasons. First,
as noted above, Grand Ledge represents a sound credit and is accorded top
credit ratings by the major ratings agencies. Second, at its purchase price
of 110, the issue yielded an attractive 6.824 percent. However, because the
bond already trades to its call price, it is likely to maintain low
volatility, a strong asset in an uncertain market.
5
<PAGE> 7
EV MARATHON MINNESOTA TAX FREE FUND
Minnesota's economic recovery has outpaced the nation as a whole, with
unemployment remaining well below the national average. Unlike most states,
Minnesota has managed to add manufacturing jobs in recent years. Job growth
has been especially strong in nondurable manufacturing, including natural
resources, mining, and food processing, while the trade, service and
government sectors are registering gains as well. Meanwhile, in the durable
goods area, Minnesota's burgeoning computer industry accounts for roughly
one-third of the state's durable manufacturing jobs. With growth centered in
relatively well-paying jobs, Minnesota continues to maintain income levels
above the national average.
Minnesota met the challenges of budgetary shortfalls in the early 1990s by
initiating a series of fiscal reform measures aimed at slowing the growth of
program expenditures. The measures included a reduction in spending, a hike
in the state sales tax, and use of the state's budget stabilization fund.
That reliance initially sorely depleted the state's general fund reserves.
Since then, however, the state has pursued more rigorous financial management
and implemented regular reviews
--------------------------------------------------------------------------------
<TABLE>
[Graphic of MN State]
PORTFOLIO OVERVIEW
Based on market value as of January 31, 1995
<S> <C>
Number of issues............................................... 82
Average quality................................................ Aa
Investment grade............................................... 98.8%
Effective maturity............................................. 18.4 yrs.
Largest sectors:
Housing................................................ 18.8%
Insured-hospitals...................................... 18.1*
Hospitals.............................................. 12.8
General obligations.................................... 6.3
Utilities.............................................. 6.3
<FN>
* Private insurance does not remove the market risk associated with this investment.
</TABLE>
--------------------------------------------------------------------------------
of program funding. And, consistent with its fiscal reform measures, the state
has restored its reserve funds. Aided by a stronger national and regional
economy, Minnesota has seen a healthy rise in tax revenues. With a favorable
economic outlook, those trends are expected to continue in the year ahead.
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"The past year was challenging for most bond investors, as the bond market
declined in the face of continued modest inflation figures. To make things
worse, due to the violent nature of the correction, high quality bonds
underperformed lower quality bonds. That created a most unusual environment for
the municipal bond marketplace.
"The Portfolio has sought to take advantage of the correction in several
ways. First, I have sold bonds with relatively low yields, realizing capital
losses that will help offset future capital gains and reduce future capital
gain tax liabilities for shareholders. Second, I've focused on adding some
high quality names that may have been beaten down during the market decline.
Finally, I sought opportunities to add deep discount bonds. In a stronger
bond environment, these bonds would likely have superior upside potential."
Robert B. MacIntosh - Portfolio Manager [Photo of Robert B. MacIntosh]
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[Graphic of Hat]
YOUR INVESTMENT AT WORK
Minnesota Higher
Education Facilities
St. Mary's College
These bonds are obligations of the Minnesota Higher Education Facilities
Authority. A portion of the bond proceeds is being used to finance the
acquisition and construction of a campus recreational facility. The bonds are
payable by loan repayments to the Authority by St. Mary's College, a
four-year liberal arts college located in Winona.
Because the supply of Minnesota bonds has remained characteristically sparse,
the Portfolio continues to search for special situations. The St. Mary's
College bonds represented an investment opportunity in a small bond from a
high-regarded local issuer. In addition, the bond - with a coupon of 6.15
percent - affords the Portfolio a good opportunity to add to its discount
bond weighting. That remains a key part of the Portfolio's strategy following
the market setbacks of 1994.
6
<PAGE> 8
EV MARATHON NEW JERSEY TAX FREE FUND
New Jersey continued along the road to recovery in 1994 with strong gains
across a wide range of industry sectors. According to the New Jersey
Department of Labor, net job gains since the bottom of the recession in March
1992 have surpassed 100,000, with jobs added in contruction, trade, business
services, transportation, finance, and health care. Mirroring trends at the
national level, the service sectors accounted for the majority of employment
gains, including health care transportation, financial services, and
temporary business service agencies. Construction activity rebounded as well
on the strength of rising housing starts, non-residential building, and
public works such as water, sewer, roads, and communications systems.
The financial condition of New Jersey deteriorated throughout the first half
of the 1990s due to declining revenues and sharply rising social costs. To
balance the budget during that period, the state was heavily reliant on
one-time revenue sources such as asset sales and stop-gap measures such as
accounting changes. Since it took office, the Whitman administration has made
lowering state taxes a major goal. In the short term, balancing
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<TABLE>
[Graphic of NJ State]
PORTFOLIO OVERVIEW
Based on market value as of January 31, 1995
<S> <C>
Number of issues..........................................137
Average quality...........................................A+
Investment grade..........................................86.1%
Effective maturity........................................16.3 yrs.
Largest sectors:
Transportation........................................13.3%
Insured-transportation................................10.1*
General obligation.................................... 8.8
Hospitals............................................. 7.4
Solid waste........................................... 7.1
<FN>
* Private insurance does not remove the market risk associated with this investment.
</TABLE>
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those revenue losses with spending cuts will prove challenging. However, in the
long run, these actions should lead to a better fiscal balance. In an improved
economic environment, that should lead to a better fiscal balance for the
state's finances.
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"The past year saw a debacle in the bond market, as investors were overly
concerned by inflation fears and the Fed's actions. The market decline was so
swift and so severe, that high quality bonds actually underperfomed lower
quality issues in a falling market, contrary to conventional wisdom.
"In the wake of the market decline I have made a number of adjustments to the
Portfolio. First, I sold bonds with relatively low yields, realizing capital
losses which can be used against any future capital gains. Next, because a
large number of high quality issues reached undervalued levels, I redoubled
my efforts to find undervalued high quality bonds. Finally, I sought
opportunities to add deep discount bonds. In a stronger bond environment,
these bonds would likely have superior upside potential."
Robert B. MacIntosh - Portfolio Manager [Photo of Robert B. MacIntosh]
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[Graphic of Building]
YOUR INVESTMENT AT WORK
New Jersey Economic
Development Bonds
The Seeing Eye Inc.
These bonds are obligations of the New Jersey Economic Development Authority.
Interest and principal payments represent the loan payments to the Authority
by The Seeing Eye, Inc., a non-profit corporation located in Morris County,
that breeds, raises, and trains dog guides, and trains qualified blind
citizens in their use. The Seeing Eye has received wide acclaim for its
training techniques and singular accomplishments in aiding the unsighted.
The proceeds of the bonds were devoted to upgrading existing buildings and
sewer lines, as well as constructing new kennel facilities. Although
non-rated, the bond represents a highly-regarded issuer. And, with an
above-average coupon - 7.3 percent - this issue affords an opportunity to add
incrementally to the Portfolio's yield.
7
<PAGE> 9
EV MARATHON PENNSYLVANIA TAX FREE FUND
Pennsylvania's total non-farm jobs surpassed 5.2 million in November, the
highest total on record, according to the Pennsylvania Department of Labor
and Industry, and a further sign of the Commonwealth's strong economic
performance. Growth has been especially robust in the service, retail and
government sectors, which added around 80,000 jobs above the 1993 level. In
the goods-producing sectors, construction and durable goods manufacturers
also managed gains, while mining remained an area of weakness.
Pennsylvania weathered the recession of the early 1990s better than its
neighbors in the Northeast because of a smaller dependence on the financial
services, real estate, and defense industries. Elsewhere, because the state's
manufacturers have focused on restructuring and modernizing industrial
plants, the manufacturing sector is now well-positioned to compete in an
increasingly global marketplace. Having suffered through operating deficits
during the recession, Pennsylvania made difficult budget decisions that paid
dividends in the past year in the form of larger-than-expected surpluses.
Recent tax cuts will provide a revenue challenge if the economy
-----------------------------------------------------------------------------
<TABLE>
[Graphic of PA State]
PORTFOLIO OVERVIEW
Based on market value as of January 31, 1995
<S> <C>
Number of issues.................................. 127
Average quality................................... Aa-
Investment grade.................................. 95.9%
Effective maturity................................ 17.7 yrs.
Largest sectors:
Hospitals..................................... 24.8%
Housing....................................... 10.2
Insured-hospital.............................. 10.2*
Insured-water & sewer......................... 9.1*
Industrial development........................ 8.4
<FN>
* Private insurance does not remove the market risk associated with
this investment.
</TABLE>
------------------------------------------------------------------------------
weakens. And, like other states, the Commonwealth still faces rising mandated
social and medical spending. But having instituted more effective spending
controls, Pennsylvania has significantly improved its budgetary disciplines and
should enjoy a much improved financial outlook.
-------------------------------------------------------------------------------
"Following a difficult market in 1994, I've extended several major themes in
the Portfolio. I've continued to upgrade the hospital sector holdings by
moving out of the over-bedded Philadelphia market, while diversifying into
high quality providers in smaller cities and rural areas elsewhere in
the state.
"Other efforts in the wake of the market downturn have included seeking
opportunities to increase the Portfolio's yield. The Portfolio has
accomplished that in several ways: through private placements in non-rated
bonds, selective purchases of lower investment grade bonds, and replacing
lower-yielding issues with higher-yielding bonds. Capital losses realized
from the sale of such bonds will be used to offset future capital gains and
thus further lower shareholders future tax liabilities.
David C. Reilly - Portfolio Manager [Photo of David C. Reilly]
------------------------------------------------------------------------------
[Graphic of Building]
YOUR INVESTMENT AT WORK
PENNSYLVANIA EDA
NORTHAMPTON, PA
GENERATING PROJECT
------------------------------------------------------------------------------
This bond, an issue of the Pennsylvania Economic Development Authority,
provides funding for the Northampton Generating Project, an energy
cogenera-tion facility. The Northampton Project takes waste coal and turns it
into electricity and steam to be used for industrial purposes. The project is
popular with industry because it is a cost-effective way to produce energy,
and popular with environmentalists because it averts possible environmental
contamination by this by-product of the coal mining industry.
While non-rated, the bond was favorably structured for the Portfolio and is
the result of an extensive internal research effort at Eaton Vance. The bonds
have a 6 1/2 percent coupon, but the Portfolio purchased them at a modest
discount for a yield above 7 percent. This bond purchase is characteristic of
the our recent efforts to increase the yield of the Portfolio.
8
<PAGE> 10
EV MARATHON TEXAS TAX FREE FUND
With statewide non-farm employment at a record level of 7.8 million jobs, the
Texas economy continues to grow faster than the U.S. as a whole. In fact, in
the past year, Texas has added more than 250,000 new jobs, more than any
other state, according to the Blue Chip Job Growth Update. The state economy
continues its diversification, moving away from its traditional depend-ence
on energy-related industry. As a consequence, the state is now more
susceptible to changing economic trends at the national level. Service and
trade accounted for the lion's share of new jobs, with the finance, retail,
insurance, communications, and transportation sectors all providing strong
momentum.
The construction and housing industries also received a major boost from the
large in-migration of new residents from other parts of the nation, providing
a strong demand for new housing. Meanwhile depressed energy prices
discouraged new oil and gas exploration while the state suffered additional
shrinkage of its defense industry. Sales tax revenues jumped 7.6 percent in
fiscal 1994, and, combined with strong vehicle tax and lottery revenues,
helped improve the state's cash flow and
-----------------------------------------------------------------------------
<TABLE>
[Graphic of TX State]
PORTFOLIO OVERVIEW
Based on market value as of January 31, 1995
<S> <S>
Number of issues................................... 63
Average quality.................................... Aa-
Investment grade................................... 96.3%
Effective maturity................................. 21.6 yrs.
Largest sectors:
General obligation............................. 14.9%
Hospitals...................................... 11.4
Insured-electric utilities..................... 9.0*
Insured-transportation......................... 8.4*
Insured-hospital............................... 8.2*
<FN>
* Private insurance does not remove the market risk associated with
this investment.
</TABLE>
------------------------------------------------------------------------------
boost the state's fund balances significantly. Fiscal year-end reserves stood
at 7.2 percent of expenditures, more than twice the national average, placing
Texas in a favorable financial position from which to meet economic challenges
in the years ahead.
------------------------------------------------------------------------------
"In 1994, investors largely ignored the relatively benign inflation reports.
In that climate, the market underwent a violent correction. In the aftermath
of the market carnage, I have focused on increasing the income of the
Portfolio and upgrading quality, but have maintained a relatively aggressive
duration.
"The Portfolio had some of its hospital bonds redeemed during the period at a
significant premium as a result of mergers with other institutions.
Elsewhere, I continue to look for special situations that may provide good
yield situations for the Portfolio, including smaller non-rated bonds.
Interestingly, contrary to conventional wisdom, some smaller issues may
actually be less volatile than their larger counterparts because they are
less actively traded. Thus, in addition to a yield advantage, they may
provide a measure of stability."
Timothy T. Browse - Portfolio Manager [Photo of Timothy T. Browse]
-----------------------------------------------------------------------------
YOUR INVESTMENT AT WORK
PORT OF CORPUS CHRISTI TX
HOECHST CELANESE
IDB REVENUE BOND
-----------------------------------------------------------------------------
The Hoechst Celanese/Port of Corpus Christi revenue bond is a good example of
the type of bond we sought to add to the Portfolio in the tumultuous market
environment of 1994. Hoechst Celanese is one of Europe's largest drug and
chemical companies. The industrial development revenue bond is rated AA/A2 by
S&P and Moody's and provides funding for the Hoechst Celanese facility in the
Port of Corpus Christi.
In the midst of the sharp market decline, the dealer community found itself
with large inventories of bonds and relatively light demand. The Hoechst bond
was an example of an over-inventoried bond that gave investors with ample
cash reserves, like the Portfolio, the advantage of more favorable purchase
terms. With its attractive coupon, this purchase represented an opportunity
to add yield to the Portfolio.
9
<PAGE> 11
FUND PERFORMANCE TO COME
<PAGE> 12
FUND PERFORMANCE TO COME
<PAGE> 13
FUND PERFORMANCE TO COME
<PAGE> 14
FUND PERFORMANCE TO COME
<PAGE> 15
FUND PERFORMANCE TO COME
<PAGE> 16
FUND PERFORMANCE TO COME
<PAGE> 17
FUND PERFORMANCE TO COME
<PAGE> 18
FUND PERFORMANCE TO COME
<PAGE> 19
FUND PERFORMANCE TO COME
<PAGE> 20
<TABLE>
EV Marathon Tax Free Funds
Financial Statements
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
------------------------------------------------------------------------------------------------------------------------------------
January 31, 1995 (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
MARATHON MARATHON MARATHON MARATHON
ARIZONA COLORADO CONNECTICUT MICHIGAN
FUND FUND FUND FUND
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in Portfolio --
Identified cost $146,519,959 $46,085,369 $194,208,585 $189,701,946
Unrealized depreciation (4,109,909) (1,403,514) (11,161,708) (4,166,622)
------------ ----------- ------------ ------------
Total investment in Portfolio, at value (Note 1A) $142,410,050 $44,681,855 $183,046,877 $185,535,324
Receivable for Fund shares sold 352,018 228,065 307,410 139,360
Deferred organization expenses (Note 1D) 7,819 7,673 7,445 9,780
------------ ----------- ------------ ------------
Total assets $142,769,887 $44,917,593 $183,361,732 $185,684,464
------------ ----------- ------------ ------------
LIABILITIES:
Dividends payable $ 286,880 $ 94,091 $ 380,248 $ 372,568
Payable for Fund shares redeemed 182,290 59,658 346,275 376,158
Payable to affiliates --
Trustees' fees 276 13 265 276
Custodian fee 529 172 648 --
Accrued expenses 34,504 11,967 41,383 49,413
------------ ----------- ------------ ------------
Total liabilities $ 504,479 $ 165,901 $ 768,819 $ 798,415
------------ ----------- ------------ ------------
NET ASSETS $142,265,408 $44,751,692 $182,592,913 $184,886,049
============ =========== ============ ============
SOURCES OF NET ASSETS:
Paid-in capital $151,107,320 $47,872,714 $196,991,648 $193,574,413
Accumulated net realized loss on investment and
financial futures transactions (computed on the
basis of identified cost) (4,422,929) (1,672,557) (2,626,393) (4,297,743)
Accumulated distributions in excess of net investment
income (309,074) (44,951) (610,634) (223,999)
Unrealized depreciation of investments and financial
futures contracts from Portfolio (computed on the
basis of
identified cost) (4,109,909) (1,403,514) (11,161,708) (4,166,622)
------------ ----------- ------------ ------------
Total $142,265,408 $44,751,692 $182,592,913 $184,886,049
============ =========== ============ ============
SHARES OF BENEFICIAL INTEREST OUTSTANDING 14,123,130 4,622,114 19,000,493 18,665,722
============ =========== ============ ============
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE
(NOTE 6) PER SHARE (net assets / shares of beneficial
interest) $10.07 $9.68 $9.61 $9.91
====== ===== ===== =====
</TABLE>
See notes to financial statements
10
<PAGE> 21
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
------------------------------------------------------------------------------------------------------------------------------------
January 31, 1995 (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
MARATHON MARATHON MARATHON MARATHON
MINNESOTA NEW JERSEY PENNSYLVANIA TEXAS
FUND FUND FUND FUND
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
ASSETS:
Investment in Portfolio --
Identified cost $78,864,633 $406,800,123 $508,184,898 $27,495,271
Unrealized depreciation (2,041,035) (4,005,161) (15,426,384 ) (830,200)
----------- ------------ ------------ -----------
Total investment in Portfolio, at value (Note 1A) $76,823,598 $402,794,962 $492,758,514 $26,665,071
Receivable for Fund shares sold 89,332 376,694 501,135 9,855
Receivable from the Administrator (Note 4) -- -- -- 37,233
Deferred organization expenses (Note 1D) 9,569 9,488 8,451 11,930
----------- ------------ ------------ -----------
Total assets $76,922,499 $403,181,144 $493,268,100 $26,724,089
----------- ------------ ------------ -----------
LIABILITIES:
Dividends payable $ 158,830 $ 852,970 $ 1,039,504 $ 57,914
Payable for Fund shares redeemed 2,287 696,834 1,286,165 28,738
Payable to affiliates --
Trustees' fees 133 265 276 14
Custodian fee 308 1,121 -- 62
Accrued expenses 21,619 85,209 122,129 10,045
----------- ------------ ------------ -----------
Total liabilities $ 183,177 $ 1,636,399 $ 2,448,074 $ 96,773
----------- ------------ ------------ ----------
NET ASSETS $76,739,322 $401,544,745 $490,820,026 $26,627,316
=========== ============ ============ ===========
SOURCES OF NET ASSETS:
Paid-in capital $81,905,172 $417,526,930 $520,240,587 $28,236,354
Accumulated net realized loss on investment and
financial futures transactions (computed on the
basis of identified cost) (2,855,751) (10,726,271) (12,953,166) (766,520)
Accumulated distributions in excess of net investment
income (269,064) (1,250,753) (1,041,011) (12,318)
Unrealized depreciation of investments and financial
futures contracts from Portfolio (computed on the
basis of
identified cost) (2,041,035) (4,005,161) (15,426,384) (830,200)
----------- ------------ ------------ -----------
Total $76,739,322 $401,544,745 $490,820,026 $26,627,316
=========== ============= ============ ===========
SHARES OF BENEFICIAL INTEREST OUTSTANDING 7,958,926 39,879,002 49,504,553 2,678,477
=========== ============= ============ ===========
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE
(NOTE 6) PER SHARE (net assets / shares of beneficial
interest) $9.64 $10.07 $9.91 $9.94
===== ====== ===== =====
</TABLE>
See notes to financial statements
11
<PAGE> 22
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
------------------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended January 31, 1995 (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
MARATHON MARATHON MARATHON MARATHON
ARIZONA COLORADO CONNECTICUT MICHIGAN
FUND FUND FUND FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE 1B):
Interest income allocated from Portfolio $ 4,666,523 $ 1,366,907 $ 5,920,630 $ 6,073,064
Expenses allocated from Portfolio (390,779) (61,823) (504,953) (466,822)
----------- ----------- ----------- -----------
Net investment income from Portfolio $ 4,275,744 $ 1,305,084 $ 5,415,677 5,606,242
----------- ----------- ----------- -----------
Expenses --
Compensation of Trustees not members of the
Administrator's organization $ 1,789 $ 51 $ 1,110 $ 1,614
Distribution costs (Note 5) 630,641 180,295 807,199 842,238
Custodian fee (Note 4) 5,529 4,508 12,478 --
Transfer and dividend disbursing agent fees 46,910 12,510 56,772 62,733
Printing and postage 28,796 13,132 23,043 32,962
Legal and accounting services 14,304 10,303 13,054 13,373
Amortization of organization expense (Note 1D) 2,672 1,875 1,717 4,086
Registration costs -- 1,485 478 --
Miscellaneous 1,680 1,958 6,102 --
----------- ----------- ----------- -----------
Total expenses $ 732,321 $ 226,117 $ 921,953 $ 957,006
----------- ----------- ----------- -----------
Net investment income $ 3,543,423 $ 1,078,967 $ 4,493,724 $ 4,649,236
----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from Portfolio --
Investment transactions (identified cost basis) $(4,417,952) $(1,442,835) $(2,457,414) $(4,271,096)
Financial futures contracts 126,196 30,491 (230,176) 587,021
----------- ----------- ----------- -----------
Net realized loss on investments $(4,291,756) $(1,412,344) $(2,687,590) $(3,684,075)
Change in unrealized appreciation (depreciation) of
investments (279,058) 144,054 (5,288,827) (2,116,738)
----------- ----------- ----------- -----------
Net realized and unrealized loss $(4,570,814) $(1,268,290) $(7,976,417) $(5,800,813)
----------- ----------- ----------- -----------
Net decrease in net assets from operations $(1,027,391) $ (189,323) $(3,482,693) $(1,151,577)
=========== =========== =========== ===========
</TABLE>
See notes to financial statements
12
<PAGE> 23
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
------------------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended January 31, 1995 (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
MARATHON MARATHON MARATHON MARATHON
MINNESOTA NEW JERSEY PENNSYLVANIA TEXAS
FUND FUND FUND FUND
----------- ------------ ------------ ---------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE 1B):
Interest income allocated from Portfolio $ 2,480,577 $ 13,352,305 $ 16,787,096 $ 814,795
Expenses allocated from Portfolio (201,105) (1,088,963) (1,279,519) (13,790)
----------- ------------ ------------ ---------
Net investment income from Portfolio $ 2,279,472 $ 12,263,342 $ 15,507,577 $ 801,005
----------- ------------ ------------ ---------
Expenses --
Compensation of Trustees not members of the
Administrator's organization $ 515 $ 1,030 $ 1,614 $ 81
Distribution costs (Note 5) 341,916 1,813,067 2,284,461 110,156
Custodian fee (Note 4) 2,179 10,198 -- 1,627
Transfer and dividend disbursing agent fees 20,706 115,672 136,336 7,433
Printing and postage 19,219 61,344 74,931 10,363
Legal and accounting services 10,239 11,642 14,935 7,866
Amortization of organization expense (Note 1D) 3,251 5,270 4,574 2,819
Registration costs 5,865 6,968 -- 252
Miscellaneous 1,924 13,524 -- 1,657
----------- ------------ ------------ ---------
Total expenses $ 405,814 $ 2,038,715 $ 2,516,851 $ 142,254
Deduct preliminary allocation of expenses to the
Administrator (Note 4) -- -- -- 37,233
----------- ------------ ------------ ---------
Net expenses $ 405,814 $ 2,038,715 $ 2,516,851 $ 105,021
----------- ------------ ------------ ---------
Net investment income $ 1,873,658 $ 10,224,627 $ 12,990,726 $ 695,984
----------- ------------ ------------ ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from Portfolio --
Investment transactions (identified cost basis) $(2,837,435) $(11,621,717) $ (9,897,369) $(583,216)
Financial futures contracts (47,121) (337,663) (665,878) 67,118
----------- ------------ ------------ ---------
Net realized loss on investments $(2,884,556) $(11,959,380) $(10,563,247) $(516,098)
Change in unrealized depreciation of investments (104,434) (1,221,266) (10,712,001) (110,311)
----------- ------------ ------------ ---------
Net realized and unrealized loss $(2,988,990) $(13,180,646) $(21,275,248) $(626,409)
----------- ------------ ------------ ---------
Net increase (decrease) in net assets from
operations $(1,115,332) $ (2,956,019) $ (8,284,522) $ 69,575
=========== ============= ============ =========
</TABLE>
See notes to financial statements
13
<PAGE> 24
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended January 31, 1995 (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
MARATHON MARATHON MARATHON MARATHON
ARIZONA COLORADO CONNECTICUT MICHIGAN
FUND FUND FUND FUND
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 3,543,423 $ 1,078,967 $ 4,493,724 $ 4,649,236
Net realized loss on investments (4,291,756) (1,412,344) (2,687,590) (3,684,075)
Change in unrealized appreciation (depreciation)
of investments (279,058) 144,054 (5,288,827) (2,116,738)
------------ ----------- ------------ ------------
Net decrease in net assets from operations $ (1,027,391) $ (189,323) $ (3,482,693) $ (1,151,577)
------------ ----------- ------------ ------------
Distributions to shareholders (Note 2) --
From net investment income $ (3,543,423) $(1,078,967) $ (4,493,724) $ (4,649,236)
In excess of net investment income (359,631) (123,365) (568,639) (327,308)
------------ ----------- ------------ ------------
Total distributions to shareholders $ (3,903,054) $(1,202,332) $ (5,062,363) $ (4,976,544)
------------ ----------- ------------ ------------
Transactions in shares of beneficial interest
(Note 3) --
Proceeds from sales of shares $ 11,825,009 $ 6,793,484 $ 13,703,216 $ 7,313,280
Net asset value of shares issued to shareholders
in payment of distributions declared 1,576,754 612,082 2,925,102 2,640,003
Cost of shares redeemed (17,084,477) (3,347,416) (13,943,206) (16,021,111)
------------ ----------- ------------ ------------
Increase (decrease) in net assets from Fund
share transactions $ (3,682,714) $ 4,058,150 $ 2,685,112 $ (6,067,828)
------------ ----------- ------------ ------------
Net increase (decrease) in net assets $ (8,613,159) $ 2,666,495 $ (5,859,944) $(12,195,949)
NET ASSETS:
At beginning of period 150,878,567 42,085,197 188,452,857 197,081,998
------------ ----------- ------------ ------------
At end of period $142,265,408 $44,751,692 $182,592,913 $184,886,049
============ =========== ============ ============
ACCUMULATED DISTRIBUTIONS IN EXCESS OF NET INVESTMENT
INCOME INCLUDED IN NET ASSETS AT END OF PERIOD $ (309,074) $ (44,951) $ (610,634) $ (223,999)
============ =========== ============ ============
</TABLE>
See notes to financial statements
14
<PAGE> 25
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended January 31, 1995 (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
MARATHON MARATHON MARATHON MARATHON
MINNESOTA NEW JERSEY PENNSYLVANIA TEXAS
FUND FUND FUND FUND
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 1,873,658 $ 10,224,627 $ 12,990,726 $ 695,984
Net realized loss on investments (2,884,556) (11,959,380) (10,563,247) (516,098)
Change in unrealized depreciation of investments (104,434) (1,221,266) (10,712,001) (110,311)
----------- ------------ ------------ -----------
Net increase (decrease) in net assets from
operations $(1,115,332) $ (2,956,019) $ (8,284,522) $ 69,575
----------- ------------ ------------ -----------
Distributions to shareholders (Note 2) --
From net investment income $(1,873,658) $(10,224,627) $(12,990,726) $ (695,984)
In excess of net investment income (249,819) (1,209,934) (1,116,759) (45,550)
----------- ------------ ------------ -----------
Total distributions to shareholders $(2,123,477) $(11,434,561) $(14,107,485) $ (741,534)
----------- ------------ ------------ -----------
Transactions in shares of beneficial interest (Note 3)
--
Proceeds from sales of shares $ 5,615,851 $ 21,688,589 $ 20,966,538 $ 3,153,722
Net asset value of shares issued to shareholders in
payment of distributions declared 1,187,020 6,049,376 6,761,601 273,134
Cost of shares redeemed (6,047,672) (31,919,312) (44,630,811 ) (2,804,310)
----------- ------------ ------------ -----------
Increase (decrease) in net assets from Fund share
transactions $ 755,199 $ (4,181,347) $(16,902,672) $ 622,546
----------- ------------ ------------ -----------
Net decrease in net assets $(2,483,610) $(18,571,927) $(39,294,679) $ (49,413)
NET ASSETS:
At beginning of period 79,222,932 420,116,672 530,114,705 26,676,729
----------- ------------ ------------ -----------
At end of period $76,739,322 $401,544,745 $490,820,026 $26,627,316
=========== ============ ============ ===========
ACCUMULATED DISTRIBUTIONS IN EXCESS OF NET INVESTMENT
INCOME INCLUDED IN NET ASSETS AT END OF PERIOD $ (269,064) $ (1,250,753) $ (1,041,011) $ (12,318)
=========== ============ ============= ===========
</TABLE>
See notes to financial statements
15
<PAGE> 26
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------------------------------------------------------------
Year Ended July 31, 1994*
------------------------------------------------------------------------------------------------------------------------------------
MARATHON MARATHON MARATHON MARATHON
ARIZONA COLORADO CONNECTICUT MICHIGAN
FUND FUND FUND FUND
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 5,414,072 $ 1,319,691 $ 6,595,409 $ 7,351,726
Net realized gain on investments (58,305) (218,607) 610,264 573,735
Change in unrealized appreciation of investments (11,757,120) (2,745,461) (15,782,341) (15,592,944)
------------ ----------- ------------ ------------
Net decrease in net assets from operations $ (6,401,353) $(1,644,377) $ (8,576,668) $ (7,667,483)
------------ ----------- ------------ ------------
Distributions to shareholders (Note 2) --
From net investment income $ (5,414,072) $(1,319,691) $ (6,595,409) $ (7,351,726)
In excess of net investment income (947,130) (230,642) (1,342,272) (1,152,241)
From net realized gain on investment transactions (2,924,958) -- (286,794) (502,258)
In excess of net realized gain on investments (131,173) -- -- (279,409)
------------ ----------- ------------ ------------
Total distributions to shareholders $ (9,417,333) $(1,550,333) $ (8,224,475) $ (9,285,634)
------------ ----------- ------------ ------------
Transactions in shares of beneficial interest
(Note 3) --
Proceeds from sales of shares $ 42,179,243 $21,335,847 $ 49,324,695 $ 33,887,806
Net asset value of shares issued to shareholders
in payment of distributions declared 4,225,584 802,023 4,806,513 4,945,770
Cost of shares redeemed (15,231,944) (1,705,163) (9,666,939) (13,088,366)
------------ ----------- ------------ ------------
Increase in net assets from Fund share
transactions $ 31,172,883 $20,432,707 $ 44,464,269 $ 25,745,210
------------ ----------- ------------ ------------
Net increase in net assets $ 15,354,197 $17,237,997 $ 27,663,126 $ 8,792,093
NET ASSETS:
At beginning of year 135,524,370 24,847,200 160,789,731 188,289,905
------------ ----------- ------------ ------------
At end of year $150,878,567 $42,085,197 $188,452,857 $197,081,998
============ =========== ============ ============
ACCUMULATED DISTRIBUTIONS IN EXCESS OF NET INVESTMENT
INCOME INCLUDED IN NET ASSETS AT END OF YEAR $ (274,433) $ (15,438) $ (450,353) $ (318,743)
============ =========== ============ =============
<FN>
* For the ten months ended July 31, 1994.
</TABLE>
See notes to financial statements
16
<PAGE> 27
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------------------------------------------------------------
Year Ended July 31, 1994*
------------------------------------------------------------------------------------------------------------------------------------
MARATHON MARATHON MARATHON MARATHON
MINNESOTA NEW JERSEY PENNSYLVANIA TEXAS
FUND FUND FUND FUND
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 2,726,368 $ 16,118,616 $ 20,587,267 $ 849,335
Net realized gain on investments 376,789 1,945,284 (1,551,449) (180,468)
Change in unrealized appreciation of investments (6,068,338) (34,469,067) (40,787,897) (1,446,955)
----------- ------------ ------------ -----------
Net decrease in net assets from operations $(2,965,181) $(16,405,167) $(21,752,079) $ (778,088)
----------- ------------ ------------ -----------
Distributions to shareholders (Note 2) --
From net investment income $(2,726,368) $(16,118,616) $(20,587,267) $ (849,335)
In excess of net investment income (514,703) (2,879,872) (3,363,289) (149,130)
From net realized gain on investment transactions (66,779) (1,071,457) (1,976,886) --
In excess of net realized gain on investments -- -- (838,470) --
----------- ------------ ------------ -----------
Total distributions to shareholders $(3,307,850) $(20,069,945) $(26,765,912) $ (998,465)
----------- ------------ ------------ -----------
Transactions in shares of beneficial interest (Note 3)
--
Proceeds from sales of shares $21,406,266 $ 88,640,764 $101,917,886 $12,783,796
Net asset value of shares issued to shareholders in
payment of distributions declared 1,813,238 10,655,530 13,060,476 408,280
Cost of shares redeemed (5,727,063) (38,125,816) (35,946,725) (1,076,938)
----------- ------------ ------------ -----------
Increase in net assets from Fund share
transactions $17,492,441 $ 61,170,478 $ 79,031,637 $12,115,138
----------- ------------ ------------ -----------
Net increase in net assets $11,219,410 $ 24,695,366 $ 30,513,646 $10,338,585
NET ASSETS:
At beginning of year 68,003,522 395,421,306 499,601,059 16,338,144
----------- ------------ ------------ -----------
At end of year $79,222,932 $420,116,672 $530,114,705 $26,676,729
=========== ============ ============ ===========
ACCUMULATED DISTRIBUTIONS IN EXCESS OF NET INVESTMENT
INCOME INCLUDED IN NET ASSETS AT END OF YEAR $ (191,248) $ (948,423) $ (1,060,829) $ (23,101)
=========== ============ ============ ===========
<FN>
* For the ten months ended July 31, 1994.
</TABLE>
See notes to financial statements.
17
<PAGE> 28
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
------------------------------------------------------------------------------------------------------------------------------------
MARATHON ARIZONA FUND MARATHON COLORADO FUND
----------------------------------------------------- ------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR YEAR ENDED
JANUARY 31, ENDED YEAR ENDED SEPTEMBER 30, JANUARY 31, ENDED SEPTEMBER 30,
1995 JULY 31, ---------------------------- 1995 JULY 31, -----------------
(UNAUDITED) 1994*** 1993 1992 1991** (UNAUDITED) 1994*** 1993 1992++
----------- -------- -------- ------- ------- ----------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning
of year $ 10.390 $ 11.570 $ 10.700 $10.320 $10.000 $ 10.010 $ 10.960 $10.060 $10.000
-------- -------- -------- ------- ------- -------- -------- ------- -------
INCOME (LOSS) FROM
OPERATIONS:
Net investment income $ 0.245 $ 0.404 $ 0.496 $ 0.526 $ 0.088 $ 0.242 $ 0.403 $ 0.484 $ 0.026
Net realized and
unrealized gain (loss)
on investments (0.295) (0.862) 1.076 0.520 0.339+++ (0.302) (0.880) 0.996 0.082+++
-------- -------- -------- ------- ------- -------- -------- ------- -------
Total income (loss)
from operations $ (0.050) $ (0.458) $ 1.572 $ 1.046 $ 0.427 $ (0.060) $ (0.477) $ 1.480 $ 0.108
----------- -------- -------- ------- ------- -------- -------- ------- -------
LESS DISTRIBUTIONS:
From net investment income $ (0.245) $ (0.404) $ (0.496) $(0.526) $(0.088) $ (0.242) $ (0.403) $(0.484) $(0.026)
In excess of net
investment income (0.025) (0.074) (0.127) (0.120) (0.019) (0.028) (0.070) (0.096) (0.022)
From net realized gain on
investment transactions -- (0.233) (0.079) (0.020) -- -- -- -- --
In excess of net realized
gain on investment
transactions -- (0.011) -- -- -- -- -- -- --
----------- -------- -------- ------- ------- -------- -------- ------- -------
Total distributions $ (0.270) $ (0.722) $ (0.702) $(0.666) $(0.107) $ (0.270) $ (0.473) $(0.580) $(0.048)
----------- -------- -------- ------- ------- -------- -------- ------- -------
NET ASSET VALUE, end of year $ 10.070 $ 10.390 $ 11.570 $10.700 $10.320 $ 9.680 $ 10.010 $10.960 $10.060
=========== ======== ======== ======= ======= ======== ======== ======= =======
TOTAL RETURN (3) (0.37)% (4.16)% 15.29% 10.43% 4.03% (0.49)% (4.46)% 15.52% 0.60%
RATIOS/SUPPLEMENTAL DATA*:
Net assets, end of year
(000 omitted) $142,265 $150,879 $135,524 $62,498 $11,501 $ 44,752 $ 42,085 $24,847 $ 2,464
Ratio of net expenses to
average daily net assets
(1) 1.55%+ 1.46%+ 1.53% 1.52% 1.37%+ 1.34%+ 1.09%+ 1.00% 1.00%+
Ratio of net investment
income to average daily
net assets 4.89%+ 4.47%+ 4.42% 4.83% 4.33%+ 5.03%+ 4.59%+ 4.49% 2.26%+
PORTFOLIO TURNOVER (2) -- -- 39% 133% 8% -- -- 3% --
<FN>
* For the period from the start of business, July 25, 1991, to September 30, 1991, and for the year ended September 30, 1992 (for
Marathon Arizona Fund) and for the period from the start of business, August 25, 1992, to September 30, 1992, for the year ended
September 30, 1993, for the ten months ended July 31, 1994, and for the six months ended January 31, 1995 (for Marathon Colorado
Fund), the operating expenses of the Funds and the Portfolios may reflect a reduction of the investment adviser fee, an
allocation of expenses to the Investment Adviser, or both. Had such actions not been taken, the ratios would have been as
follows:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME PER SHARE $0.513 $0.082 $0.234 $0.373 $0.387 $0.011
====== ====== ====== ====== ====== ======
RATIOS (As a percentage of average daily net
assets):
Expenses(1) 1.64% 1.65%+ 1.50% 1.42%+ 1.90% 2.34%+
Net investment income 4.71% 4.05%+ 4.87% 4.26%+ 3.60% 0.92%+
<FN>
** For the period from the start of business, July 25, 1991, to September 30, 1991.
*** For the ten months ended July 31, 1994.
+ Computed on an annualized basis.
++ For the period from the start of business, August 25, 1992, to September 30, 1992.
+++ The per share amount is not in accord with the net realized and unrealized gain for the period because of the timing of sales
of Fund shares and the amount of the per share realized and unrealized gains and losses at such time.
(1) Includes each Fund's share of its corresponding Portfolio's allocated expenses.
(2) Portfolio Turnover represents the rate of portfolio activity for the period while the Funds were making investments
directly in securities. The portfolio turnover rate for the period since the Funds transferred substantially all of their
investable assets to their respective Portfolios is shown in the Portfolios' financial statements which are included elsewhere
in this report.
(3) Total investment return is calculated assuming purchase at the net asset value on the first day and a sale at the net asset
value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net
asset value on the payable date.
</TABLE>
See notes to financial statements
18
<PAGE> 29
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
------------------------------------------------------------------------------------------------------------------------------------
MARATHON CONNECTICUT FUND MARATHON MICHIGAN FUND
------------------------------------------- ------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR YEAR ENDED ENDED YEAR
JANUARY 31, ENDED SEPTEMBER 30, JANUARY 31, ENDED YEAR ENDED SEPTEMBER 30,
1995 JULY 31, ------------------ 1995 JULY 31, -----------------------------
(UNAUDITED) 1994*** 1993 1992++ (UNAUDITED) 1994*** 1993 1992 1991**
----------- -------- -------- ------- ----------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning
of year $ 10.050 $ 11.030 $ 10.270 $10.000 $ 10.210 $ 11.110 $ 10.570 $ 10.220 $10.000
-------- -------- -------- ------- -------- -------- -------- -------- -------
INCOME (LOSS) FROM
OPERATIONS:
Net investment income $ 0.236 $ 0.388 $ 0.471 $ 0.192 $ 0.245 $ 0.398 $ 0.480 $ 0.499 $ 0.247
Net realized and
unrealized gain (loss)
on investments (0.410) (0.883) 0.885 0.331+++ (0.283) (0.794) 0.745 0.507 0.267+++
-------- -------- -------- ------- -------- -------- -------- -------- -------
Total income (loss)
from operations $ (0.174) $ (0.495) $ 1.356 $ 0.523 $ (0.038) $ (0.396) $ 1.225 $ 1.006 $ 0.514
-------- -------- -------- ------- -------- -------- -------- -------- -------
LESS DISTRIBUTIONS:
From net investment
income $ (0.236) $ (0.388) $ (0.471) $(0.192) $ (0.245) $ (0.398) $ (0.480) $ (0.499) $(0.247)
In excess of net
investment income (0.029) (0.079) (0.120) (0.061) (0.017) (0.062) (0.114) (0.144) (0.047)
From net realized gain
on investment
transactions -- (0.018) (0.005) -- -- (0.028) (0.058) (0.013) --
In excess of net
realized gain on
investment
transactions -- -- -- -- -- (0.016) (0.033) -- --
-------- --------- -------- ------- -------- -------- -------- -------- -------
Total distributions $ (0.265) $ (0.485) $ (0.596) $(0.253) $ (0.262) $ (0.504) $ (0.685) $ (0.656) $(0.294)
-------- --------- -------- ------- -------- -------- -------- -------- -------
NET ASSET VALUE, end of
year $ 9.610 $ 10.050 $ 11.030 $10.270 $ 9.910 $ 10.210 $ 11.110 $ 10.570 $10.220
======== ======== ======== ======= ======== ======== ======== ======== =======
TOTAL RETURN (3) (1.65)% (4.61)% 13.62% 5.00% (0.28)% (3.66)% 12.06% 10.13% 4.98%
RATIOS/SUPPLEMENTAL DATA*:
Net assets, end of year
(000 omitted) $182,593 $188,453 $160,790 $50,031 $184,886 $197,082 $188,290 $107,034 $31,222
Ratio of net expenses to
average daily net
assets (1) 1.56%+ 1.43%+ 1.56% 1.35%+ 1.51%+ 1.49%+ 1.54% 1.61% 1.29%+
Ratio of net investment
income to average
daily net assets 4.90%+ 4.42%+ 4.33% 4.13%+ 4.93%+ 4.49%+ 4.40% 4.65% 5.12%+
PORTFOLIO TURNOVER (2) -- -- 14% 16% -- -- 28% 72% 5%
<FN>
* For the period from the start of business, May 1, 1992, to September 30, 1992, (for Marathon Connecticut Fund) and for the period
from the start of business, April 19, 1991, to September 30, 1991, (for Marathon Michigan Fund), the operating expenses of the
Funds and the Portfolios may reflect a reduction of the investment adviser fee, an allocation of expenses to the Investment
Adviser, or both. Had such actions not been taken, the ratios would have been as follows:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
NET INVESTMENT INCOME PER SHARE $0.184 $0.229
====== ======
RATIOS (As a percentage of average
daily net assets):
Expenses(1) 1.52%+ 1.66%+
Net investmentincome 3.96%+ 4.75%+
<FN>
** For the period from the start of business, April 19, 1991, to September 30, 1991.
*** For the ten month period ended July 31, 1994.
+ Computed on an annualized basis.
++ For the period from the start of business, May 1, 1992, to September 30, 1992.
+++ The per share amount is not in accord with the net realized and unrealized gain for the period because of the timing of
sales of Fund shares and the amount of the per share realized and unrealized gains and losses at such time.
(1) Includes each Fund's share of its corresponding Portfolio's allocated expenses.
(2) Portfolio Turnover represents the rate of portfolio activity for the period while the Funds were making investments
directly in securities. The portfolio turnover rate for the period since the Funds transferred substantially all of their
investable assets to their respective Portfolios is shown in the Portfolios' financial statements which are included elsewhere
in this report.
(3) Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net
asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the
net asset value on the payable date.
</TABLE>
See notes to financial statements
19
<PAGE> 30
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
------------------------------------------------------------------------------------------------------------------------------------
MARATHON MINNESOTA FUND MARATHON NEW JERSEY FUND
--------------------------------------------------- -----------------------------------------------------
SIX MONTHS YEAR SIX MONTHS
ENDED ENDED YEAR ENDED SEPTEMBER 30, ENDED YEAR
JANUARY 31, JULY JANUARY 31, ENDED YEAR ENDED SEPTEMBER 30,
1995 31, --------------------------- 1995 JULY 31, ----------------------------
(UNAUDITED) 1994*** 1993 1992 1991** (UNAUDITED) 1994*** 1993 1992 1991++
----------- ------- ------- ------- ------- ----------- -------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
beginning of
year $10.040 $10.910 $10.310 $10.080 $10.000 $ 10.410 $ 11.350 $ 10.680 $ 10.380 $10.000
------- ------- ------- ------- ------- -------- -------- -------- -------- -------
INCOME (LOSS) FROM
OPERATIONS:
Net investment
income $ 0.234 $ 0.383 $ 0.473 $ 0.505 $ 0.051 $ 0.253 $ 0.421 $ 0.514 $ 0.516 $ 0.363
Net realized and
unrealized
gain (loss) on
investments (0.369) (0.788) 0.749 0.361 0.129+++ (0.310) (0.836) 0.841 0.452 0.487+++
----------- ------- ------- ------- ------- -------- -------- -------- -------- -------
Total income
(loss)
from
operations $(0.135) $(0.405) $ 1.222 $ 0.866 $ 0.180 $ (0.057) $ (0.415) $ 1.355 $ 0.968 $ 0.850
----------- ------- ------- ------- ------- -------- -------- -------- -------- -------
LESS
DISTRIBUTIONS:
From net
investment
income $(0.234) $(0.383) $(0.473) $(0.506) $(0.051) $ (0.253) $ (0.421) $ (0.514) $ (0.516) $(0.363)
In excess of net
investment
income (0.031) (0.073) (0.125) (0.131) (0.049) (0.030) (0.075) (0.112) (0.124) (0.107)
From net
realized gain
on investment
transactions -- (0.009) -- -- -- -- (0.029) (0.059) (0.028) --
In excess of net
realized gain
on investment
transactions -- -- (0.024) -- -- -- -- -- -- --
------- ------- ------- ------- ------- -------- -------- -------- -------- -------
Total
distributions $(0.265) $(0.465) $(0.622) $(0.636) $(0.100) $ (0.283) $ (0.525) $ (0.685) $ (0.668) $(0.470)
------- ------- ------- ------- ------- -------- -------- -------- -------- -------
NET ASSET VALUE,
end
of year $ 9.640 $10.040 $10.910 $10.310 $10.080 $ 10.070 $ 10.410 $ 11.350 $ 10.680 $10.380
======= ======= ======= ======= ======= ======== ======== ======== ======== =======
TOTAL RETURN (3) (1.26)% (3.81)% 12.28% 8.82% 1.56% (0.46)% (3.77)% 13.15% 9.64% 8.47%
RATIOS/SUPPLEMENTAL
DATA*:
Net assets, end
of year (000
omitted) $76,739 $79,223 $68,004 $26,670 $ 2,467 $401,545 $420,117 $395,421 $235,324 $99,590
Ratio of net
expenses
to average
daily net
assets (1) 1.57% 1.54%+ 1.59% 1.42% 1.71%+ 1.54%+ 1.48%+ 1.56% 1.63% 1.78%+
Ratio of net
investment
income to
average daily
net assets 4.85% 4.38%+ 4.38% 4.74% 2.59%+ 5.02%+ 4.64%+ 4.66% 4.83% 4.82%+
PORTFOLIO TURNOVER
(2) -- -- 16% 25% 3% -- -- 20% 74% 68%
<FN>
* For the period from the start of business, July 29, 1991 to September 30,
1991, and for the years ended September 30, 1992 and 1993, (for Marathon
Minnesota Fund), the operating expenses of the Fund and the Portfolio may
reflect a reduction of the investment adviser fee, an allocation of expenses
to the Investment Adviser, or both. Had such actions not been taken, the
ratios would have been as follows:
</TABLE>
<TABLE>
<S> <C> <C> <C>
NET INVESTMENT INCOME PER SHARE $0.472 $ 0.438 $ 0.031
====== ======= =======
RATIOS (As a percentage of average
daily net assets):
Expenses(1)
1.61% 2.05% 2.72%+
Net investment income 4.32% 4.11% 1.58%+
<FN>
** For the period from the start of business, July 29, 1991, to September 30, 1991.
*** For the ten months ended July 31, 1994.
+ Computed on an annualized basis.
++ For the period from the start of business, January 8, 1992, to September 30, 1991.
+++ The per share amount is not in accord with the net realized and unrealized gain for the period because of the timing of
sales of Fund shares and the amount of the per share realized and unrealized gains and losses at such time.
(1) Includes each Fund's share of its corresponding Portfolio's allocated expenses.
(2) Portfolio Turnover represents the rate of portfolio activity for the period while the Funds were making investments directly in
securities. The portfolio turnover rate for the period since the Funds transferred substantially all of their investable
assets to their respective Portfolios is shown in the Portfolios' financial statements which are included elsewhere in this
report.
(3) Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net
asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the
net asset value on the payable date.
</TABLE>
See notes to financial statements
20
<PAGE> 31
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
------------------------------------------------------------------------------------------------------------------------------------
MARATHON PENNSYLVANIA FUND MARATHON TEXAS FUND
------------------------------------------------------- -----------------------------------------
SIX MONTHS SIX MONTHS YEAR
ENDED YEAR ENDED ENDED YEAR ENDED
JANUARY 31, ENDED YEAR ENDED SEPTEMBER 30, JANUARY 31, JULY SEPTEMBER 30,
1995 JULY 31, ------------------------------ 1995 31, -----------------
(UNAUDITED) 1994*** 1993 1992 1991** (UNAUDITED) 1994*** 1993 1992++
----------- -------- -------- -------- -------- ----------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning
of year $ 10.340 $ 11.310 $ 10.650 $ 10.350 $ 10.000 $10.210 $11.110 $10.450 $10.000
-------- -------- -------- -------- -------- --------- ------- ------- -------
INCOME (LOSS) FROM
OPERATIONS:
Net investment income $ 0.256 $ 0.422 $ 0.520 $ 0.531 $ 0.378 $ 0.268 $ 0.436 $ 0.515 $ 0.255
Net realized and
unrealized gain (loss)
on investments (0.408) (0.841) 0.794 0.430 0.466+++ (0.252) (0.824) 0.787 0.516
-------- -------- -------- -------- -------- --------- ------- ------- -------
Total income (loss)
from operations $ (0.152) $ (0.419) $ 1.314 $ 0.961 $ 0.844 $ 0.016 $(0.388) $ 1.302 $ 0.771
-------- -------- -------- -------- -------- --------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment
income $ (0.256) $ (0.422) $ (0.520) $ (0.531) $ (0.378) $(0.268) $(0.436) $(0.515) $(0.255)
In excess of net
investment income (0.022) (0.069) (0.115) (0.130) (0.116) (0.017) (0.076) (0.106) (0.066)
From net realized gain on
investment transactions -- (0.042) (0.019) -- -- -- -- -- --
In excess of net realized
gain on investment
transactions -- (0.018) -- -- -- -- -- (0.021) --
-------- -------- -------- -------- -------- ------- ------- ------- -------
Total distributions $ (0.278) $ (0.551) $ (0.654) $ (0.661) $ (0.494) $(0.285) $(0.512) $(0.642) $(0.321)
-------- -------- -------- -------- -------- ------- ------- ------- -------
NET ASSET VALUE, end of
year $ 9.910 $ 10.340 $ 11.310 $ 10.650 $ 10.350 $ 9.940 $10.210 $11.110 $10.450
======== ======== ======== ======== ======== ======= ======= ======= =======
TOTAL RETURN (3) (1.40)% (3.84)% 12.76% 9.56% 8.37% 0.28% (3.65)% 12.90% 7.51%
RATIOS/SUPPLEMENTAL DATA*:
Net assets, end of year
(000 omitted) $490,820 $530,115 $499,601 $280,193 $100,211 $26,627 $26,677 $16,338 $ 4,020
Ratio of net expenses to
average daily net
assets (1) 1.50%+ 1.46%+ 1.56% 1.64% 1.56+ 0.93%+ 0.82%+ 1.06% 1.00%+
Ratio of net investment
income to average daily
net assets 5.14%+ 4.68%+ 4.70% 4.92% 4.93%+ 5.44%+ 4.81%+ 4.67% 4.61%+
PORTFOLIO TURNOVER (2) -- -- 6% 15% 2% -- -- 7% 11%
<FN>
* For the period from the start of business, January 8, 1991, to September 30, 1991, (for Marathon Pennsylvania Fund), and for the
period from the start of business, March 24, 1992, to September 30, 1992, for the year ended September 30, 1993, for the ten
months ended July 31, 1994, and for the six months ended January 31, 1995 (for Marathon Texas Fund), the operating expenses of the
Funds and the Portfolios may reflect a reduction of expenses by the Administrator or Investment Adviser. Had such actions not been
taken, net investment income per share and the ratios would have been as follows:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME PER SHARE $0.375 $0.235 $0.359 $0.350 $0.180
====== ====== ====== ====== ======
RATIOS (As a percentage of average
daily net assets)
Expenses (1) 1.60%+ 1.59%+ 1.67%+ 2.55% 2.35%+
Net investment income 4.89%+ 4.78%+ 3.96%+ 3.18% 3.26%+
<FN>
** For the period from the start of business, January 8, 1991, to September 30, 1991.
*** For the ten months ended July 31, 1994.
+ Computed on an annualized basis.
++ For the period from the start of business, March 24, 1992, to September 30, 1992.
+++ The per share amount is not in accord with the net realized and unrealized gain for the period because of the timing
of sales of the Fund shares and the amount of per share realized and unrealized gains and losses at such time.
(1) Includes each Fund's share of its corresponding Portfolio's allocated expenses.
(2) Portfolio Turnover represents the rate of portfolio activity for the period while the Funds were making investments
directly in securities. The portfolio turnover rate for the period since the Funds transferred substantially all of their
investable assets to their respective Portfolios is shown in the Portfolios' financial statements which are included elsewhere
in this report.
(3) Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net
asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the
net asset value on the payable date.
</TABLE>
See notes to financial statements
21
<PAGE> 32
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
--------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Eaton Vance Municipals Trust (the Trust) is an entity of the type commonly known
as a Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The Trust
presently consists of sixty-three Funds, eight of which are included in these
financial statements. They include EV Marathon Arizona Tax Free Fund ("Marathon
Arizona Fund"), EV Marathon Colorado Tax Free Fund ("Marathon Colorado Fund"),
EV Marathon Connecticut Tax Free Fund ("Marathon Connecticut Fund"), EV Marathon
Michigan Tax Free Fund ("Marathon Michigan Fund"), EV Marathon Minnesota Tax
Free Fund ("Marathon Minnesota Fund"), EV Marathon New Jersey Tax Free Fund
("Marathon New Jersey Fund"), EV Marathon Pennsylvania Tax Free Fund ("Marathon
Pennsylvania Fund"), and EV Marathon Texas Tax Free Fund ("Marathon Texas
Fund"). Each Fund invests all of its investable assets in interests in a
separate corresponding open-end management investment company (a Portfolio), a
New York Trust, having the same investment objective as its corresponding Fund.
The Marathon Arizona Fund invests its assets in the Arizona Tax Free Portfolio,
the Marathon Colorado Fund invests its assets in the Colorado Tax Free
Portfolio, the Marathon Connecticut Fund invests its assets in the Connecticut
Tax Free Portfolio, the Marathon Michigan Fund invests its assets in the
Michigan Tax Free Portfolio, the Marathon Minnesota Fund invests its assets in
the Minnesota Tax Free Portfolio, the Marathon New Jersey Fund invests its
assets in the New Jersey Tax Free Portfolio, the Marathon Pennsylvania Fund
invests its assets in the Pennsylvania Tax Free Portfolio, and the Marathon
Texas Fund invests its assets in the Texas Tax Free Portfolio. The value of each
Fund's investment in its corresponding Portfolio reflects the Fund's
proportionate interest in the net assets of that Portfolio (97.9%, 95.6%, 97.7%,
97.1%, 93.7%, 98.9%, 99.3%, and 97.7% at January 31, 1995 for the Marathon
Arizona Fund, Marathon Colorado Fund, Marathon Connecticut Fund, Marathon
Michigan Fund, Marathon Minnesota Fund, Marathon New Jersey Fund, Marathon
Pennsylvania Fund, and Marathon Texas Fund, respectively). The performance of
each Fund is directly affected by the performance of its corresponding
Portfolio. The financial statements of each Portfolio, including the portfolio
of investments, are included elsewhere in this report and should be read in
conjunction with each Fund's financial statements. The following is a summary of
significant accounting policies consistently followed by the Trust in the
preparation of its financial statements. The policies are in conformity with
generally accepted accounting principles.
A. INVESTMENT VALUATION--Valuation of securities by the Portfolios is discussed
in Note 1 of the Portfolios' Notes to Financial Statements which are included
elsewhere in this report.
B. INCOME--Each Fund's net investment income consists of the Fund's pro rata
share of the net investment income of its corresponding Portfolio, less all
actual and accrued expenses of each Fund determined in accordance with generally
accepted accounting principles.
C. FEDERAL TAXES--Each Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable and tax-exempt income,
including any net realized gain on investments. Accordingly, no provision for
federal income or excise tax is necessary. At July 31, 1994, the Marathon
Arizona Fund, Marathon Colorado Fund, Marathon Michigan Fund, Marathon Minnesota
Fund, Marathon Pennsylvania Fund and Marathon Texas Fund for federal income tax
purposes had capital loss carryovers of $2,053, $32,307, $662,307, $11,959,
$439,422 and $68,395, respectively, which will reduce the amount of the
distributions to shareholders which would otherwise be necessary to relieve the
Funds of any liability for federal income or excise tax. Such capital loss
carryovers will expire on July 31, 2002. Additionally, at July 31, 1994, net
capital losses of $173,149, $297,123, $353,274, $3,574,180, and $198,578 for the
Marathon Arizona Fund, Marathon Colorado Fund, Marathon Connecticut Fund,
Marathon Pennsylvania Fund, and Marathon Texas Fund, respectively, attributable
to security transactions incurred after October 31, 1993, are treated as arising
on the first day of the Fund's current taxable year. Dividends paid by each Fund
from net interest on tax-exempt municipal bonds allocated from its corresponding
Portfolio are not includable by shareholders as gross income for federal income
tax purposes because each Fund and Portfolio intend to meet certain requirements
of the Internal Revenue Code applicable to regulated investment companies which
will enable the Funds to pay exempt-interest dividends. The portion of such
interest, if any, earned on private activity bonds issued after August 7, 1986,
may be considered a tax preference item to shareholders.
D. DEFERRED ORGANIZATION EXPENSES--Cost incurred by each Fund in connection with
its organization, including registration costs, are being amortized on the
straight-line basis over five years beginning on the date each Fund commenced
operations.
E. DISTRIBUTION COSTS--For book purposes, commissions paid on the sale of Fund
shares and other distribution costs are charged to operations. For tax purposes,
commissions paid were charged to paid-in capital prior to November 16, 1994 and
subsequently charged to operations. The change in the tax accounting practice
was prompted by a recent Internal Revenue ruling and has no effect on either the
Funds current yield or total return (Notes 2 and 5).
F. OTHER--Investment transactions are accounted for on a trade date basis.
22
<PAGE> 33
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
G. RECLASSIFICATION--Certain prior year amounts have been reclassified to
conform to the current year presentation.
H. INTERIM FINANCIAL INFORMATION--The interim financial statements relating to
January 31, 1995 and for the period then ended have not been audited by
independent certified public accountants, but in the opinion of the Fund's
management, reflect all adjustments consisting only of normal recurring
adjustments necessary for the fair presentation of the financial statements.
--------------------------------------------------------------------------------
(2) DISTRIBUTIONS TO SHAREHOLDERS
The net income of each Fund is determined daily and substantially all of the net
income so determined is declared as a dividend to shareholders of record at the
time of declaration. Distributions are paid monthly. Distributions of allocated
realized capital gains, if any, are made at least annually. Shareholders may
reinvest capital gain distributions in additional shares of a Fund at the net
asset value as of the ex-dividend date. Distributions are paid in the form of
additional shares or, at the election of the shareholders, in cash. The Funds
distinguish between distributions on a tax basis and a financial reporting
basis. Generally accepted accounting principles require that only distributions
in excess of tax basis earnings and profits be reported in the financial
statements as a return of capital. Differences in the recognition or
classification of income between the financial statements and tax earnings and
profits which result in temporary over distributions for financial statements
purposes are classified as distributions in excess of net investment income or
accumulated net realized gains. Permanent differences between book and tax
accounting are reclassified to paid-in capital. During the period from August 1,
1994 to November 15, 1994, $324,990, $93,852, $408,358, $422,052, $172,003,
$907,604, $1,136,577, and $56,333, was reclassified from distributions in excess
of net investment income to paid in capital, due to permanent differences
between book and tax accounting for distribution costs for the Marathon Arizona
Fund, Marathon Colorado Fund, Marathon Connecticut Fund, Marathon Michigan Fund,
Marathon Minnesota Fund, Marathon New Jersey Fund, Marathon Pennsylvania Fund
and Marathon Texas Fund, respectively. Net investment income, net realized gains
and net assets were not affected by these reclassifications.
23
<PAGE> 34
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Funds' Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial
interest (without par value). Transactions in Fund shares were as follows:
MARATHON ARIZONA MARATHON COLORADO
FUND FUND
----------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED ENDED
JANUARY 31, YEAR ENDED JANUARY 31, YEAR ENDED
1995 JULY 31, 1995 JULY 31,
(UNAUDITED) 1994* (UNAUDITED) 1994*
------------ ----------- ------------- ----------
<S> <C> <C> <C> <C>
Sales 1,193,396 3,822,299 709,130 2,022,340
Issued to shareholders electing to receive
payments of distributions in Fund shares 158,568 383,042 63,947 77,286
Redemptions (1,753,090) (1,396,565) (353,473) (163,785)
---------- ---------- -------- ---------
Net increase (decrease) (401,126) 2,808,776 419,604 1,935,841
========== ========== ======== =========
</TABLE>
<TABLE>
<CAPTION>
MARATHON CONNECTICUT MARATHON MICHIGAN
FUND FUND
----------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED ENDED
JANUARY 31, YEAR ENDED JANUARY 31, YEAR ENDED
1995 JULY 31, 1995 JULY 31,
(UNAUDITED) 1994* (UNAUDITED) 1994*
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Sales 1,433,964 4,636,572 745,585 3,144,803
Issued to shareholders electing to receive
payments of distributions in Fund shares 305,968 457,760 269,029 463,590
Redemptions (1,486,843) (927,753) (1,660,024) (1,243,377)
---------- --------- ----------- ---------
Net increase (decrease) 253,089 4,166,579 (645,410) 2,365,016
========== ========= ========== ==========
<FN>
* For the ten months ended July 31, 1994.
</TABLE>
24
<PAGE> 35
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
MARATHON MINNESOTA MARATHON NEW JERSEY
FUND FUND
----------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED ENDED
JANUARY 31, YEAR ENDED JANUARY 31, YEAR ENDED
1995 JULY 31, 1995 JULY 31,
(UNAUDITED) 1994* (UNAUDITED) 1994*
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Sales 585,201 2,031,340 2,158,115 8,068,513
Issued to shareholders electing to receive
payments of distributions in Fund shares 123,622 173,859 604,157 978,660
Redemptions (642,320) (548,193) (3,230,073) (3,546,588)
-------- --------- ---------- ----------
Net increase (decrease) (66,503) 1,657,006 (467,801) 5,500,585
======== ========= ========== ==========
</TABLE>
<TABLE>
<CAPTION>
MARATHON PENNSYLVANIA MARATHON TEXAS
FUND FUND
----------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED ENDED
JANUARY 31, YEAR ENDED JANUARY 31, YEAR ENDED
1995 JULY 31, 1995 JULY 31,
(UNAUDITED) 1994* (UNAUDITED) 1994*
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Sales 2,116,739 9,286,690 325,471 1,206,045
Issued to shareholders electing to receive
payments of distributions in Fund shares 682,283 1,202,782 27,907 38,689
Redemptions (4,586,171) (3,368,657) (288,645) (101,806)
---------- ---------- ---------- ---------
Net increase (decrease) (1,787,149) 7,120,815 64,733 1,142,928
========== ========== ========== =========
<FN>
* For the ten months ended July 31, 1994.
</TABLE>
--------------------------------------------------------------------------------
(4) TRANSACTIONS WITH AFFILIATES
Eaton Vance Management (EVM) serves as the administrator of each Fund, but
receives no compensation. The portfolios have engaged Boston Management and
Research (BMR), a subsidiary of EVM, to render investment advisory services. See
Note 2 of the Portfolios' Notes to Financial Statements which are included
elsewhere in this report. To enhance the net income of the Marathon Texas Fund,
$37,233 of expenses related to the operation of the Marathon Texas Fund was
allocated, on a preliminary basis, to EVM. Except as to Trustees of the Funds
and the Portfolios who are not members of EVM's or BMR's organization, officers
and Trustees receive remuneration for their services to each Fund out of such
investment adviser fee. Investors Bank & Trust Company (IBT), an affiliate of
EVM, serves as custodian to the Funds and the Portfolios. Pursuant to the
respective custodian agreements, IBT receives a fee reduced by credits which are
determined based on the average cash balances the Funds or the Portfolios
maintain with IBT. Certain of the officers and Trustees of the Funds and
Portfolios are officers and directors/trustees of the above organizations (Note
5).
--------------------------------------------------------------------------------
(5) DISTRIBUTION PLAN
Each Fund has adopted a distribution plan (the Plans) pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Plans require the Funds to pay the
principal underwriter, Eaton Vance Distributors, Inc. (EVD), amounts equal to
1/365 of 0.75% of each Fund's daily net assets, for providing ongoing
distribution services and facilities to the respective Fund. A Fund will
automatically discontinue payments to EVD during any period in which there are
no outstanding Uncovered Distribution Charges, which are equivalent to the sum
of (i) 5% of the aggregate amount received by the Fund for shares sold plus (ii)
distribution fees calculated by applying the rate of 1% over the prevailing
prime rate to the outstanding balance of Uncovered Distribution Charges of EVD
reduced by the aggregate amount of contingent deferred sales charges (Note 6)
and amounts theretofore paid to EVD. The amount payable to EVD with respect to
each day is accrued on such day as a liability of each Fund and, accordingly,
reduces the Fund's
25
<PAGE> 36
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
net assets. For the six months ended January 31, 1995, Marathon Arizona Fund,
Marathon Colorado Fund, Marathon Connecticut Fund, Marathon Michigan Fund,
Marathon Minnesota Fund, Marathon New Jersey Fund, Marathon Pennsylvania Fund,
and Marathon Texas Fund, paid or accrued $543,770, $160,950, $687,446, $706,753,
$289,745, $1,526,940, $1,896,388, and $96,022, respectively, to or payable to
EVD, representing 0.75% of average daily net assets. At January 31, 1995, the
amount of Uncovered Distribution Charges of EVD calculated under the Plans for
Marathon Arizona Fund, Marathon Colorado Fund, Marathon Connecticut Fund,
Marathon Michigan Fund, Marathon Minnesota Fund, Marathon New Jersey Fund,
Marathon Pennsylvania Fund, and Marathon Texas Fund were approximately
$5,746,000, $2,081,000, $7,920,000, $6,938,000, $3,190,000, $14,775,000,
$18,701,000 and $1,078,000, respectively.
In addition, the Plans authorize the Funds to make payments of service fees to
the Principal Underwriter, Authorized Firms and other persons in amounts not
exceeding 0.25% of each Fund's average daily net assets for any fiscal year. The
Trustees have initially implemented the Plans by authorizing the Funds to make
quarterly service fee payments to the Principal Underwriter and Authorized Firms
in amounts not expected to exceed 0.20% per annum of each Fund's average daily
net assets based on the value of Fund shares sold by such persons and remaining
outstanding for at least one year. For the six months ended January 31, 1995,
Marathon Arizona Fund, Marathon Colorado Fund, Marathon Connecticut Fund,
Marathon Michigan Fund, Marathon Minnesota Fund, Marathon New Jersey Fund,
Marathon Pennsylvania Fund, and Marathon Texas Fund paid or accrued service fees
to or payable to EVD in the amount of $86,871, $19,345, $119,753, $135,485,
$52,171, $286,127, $388,073 and $14,134, respectively. Service fee payments are
made for personal services and/or maintenance of shareholder accounts. Service
fees are separate and distinct from the sales commissions and distribution fees
payable by each Fund to EVD, and as such are not subject to automatic
discontinuance when there are no outstanding Uncovered Distribution Charges of
EVD.
Certain officers and Trustees of the Fund are officers or directors of EVD.
--------------------------------------------------------------------------------
(6) CONTINGENT DEFERRED SALES CHARGE
A contingent deferred sales charge (CDSC) is imposed on any redemption of Fund
shares made within six years of purchase. Generally the CDSC is based upon the
lower of the net asset value at date of redemption or date of purchase. No
charge is levied on shares acquired by reinvestment of dividends or capital
gains distributions. The CDSC is imposed at declining rates that begin at 5% in
the case of redemptions in the first and second year after purchase (6% and 5%,
respectively, for shares purchased prior to August 1, 1994) declining one
percentage point each subsequent year. No CDSC is levied on shares which have
been sold to EVD or its affiliates or to their respective employees or clients.
CDSC charges are paid to EVD to reduce the amount of Uncovered Distribution
Charges calculated under the Fund's Distribution Plan. CDSC charges received
when no Uncovered Distribution Charges exist will be credited to the Fund. EVD
received approximately $495,000, $97,000, $307,000, $418,000, $176,000,
$957,000, $1,151,000 and $25,000, respectively, of CDSC paid by shareholders of
Marathon Arizona Fund, Marathon Colorado Fund, Marathon Connecticut Fund,
Marathon Michigan Fund, Marathon Minnesota Fund, Marathon New Jersey Fund,
Marathon Pennsylvania Fund, and Marathon Texas Fund, respectively, for the six
months ended January 31, 1995.
--------------------------------------------------------------------------------
(7) INVESTMENT TRANSACTIONS
<TABLE>
<CAPTION>
Increases and decreases in each Fund's investment in its corresponding Portfolio for the six months ended January 31, 1995 were as
follows:
MARATHON MARATHON MARATHON MARATHON
ARIZONA COLORADO CONNECTICUT MICHIGAN
FUND FUND FUND FUND
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Increases $12,111,757 $6,786,096 $14,340,728 $ 8,168,587
Decreases $20,341,741 $4,239,247 $17,420,917 $20,079,848
</TABLE>
<TABLE>
<CAPTION>
MARATHON MARATHON MARATHON MARATHON
MINNESOTA NEW JERSEY PENNSYLVANIA TEXAS
FUND FUND FUND FUND
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Increases $ 5,700,692 $23,455,735 $21,473,225 $ 3,451,403
Decreases $ 7,504,551 $39,809,990 $54,878,793 $ 3,422,878
</TABLE>
26
<PAGE> 37
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
ARIZONA TAX FREE PORTFOLIO
PORTFOLIO OF INVESTMENTS - JANUARY 31, 1995
(UNAUDITED)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
--------------------------------------------------------------------------------
RATINGS (UNAUDITED)
-------------------
PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 4.5%
A1 AA $1,000 Arizona Board of Regents,
Arizona State University,
5.90%, 7/1/09 $ 981,880
A1 AA 1,250 Arizona Board of Regents,
University of Arizona,
6.25%, 6/1/11 1,254,225
NR NR 1,500 Student Loan Acquisition
Authority of Arizona,
7.625%, 5/1/10 1,589,820
NR NR 1,700 Arizona Educational Loan
Marketing Corporation,
6.30%, 12/1/08 1,578,450
NR AAA 1,000 City of Glendale,
Thunderbird Graduate
School, (Conniela) 7.125%,
7/1/20 1,051,330
------------
$ 6,455,705
------------
ESCROWED - 5.7%
NR AA $2,500 City of Phoenix, Street &
Highway, 6.25%, 7/1/11 $ 2,499,800
Aaa AAA 7,500 Maricopa County, Single
Family Mortgage, 0%,
2/1/16 1,806,600
NR NR 500 City of Scottsdale,
Westminster Village,
Multifamily Housing,
10.00%, 6/1/17 563,815
Aaa AA 2,500 State of Arizona, Arizona
Transportation Board,
6.50%, 7/1/11 2,667,350
Baa1 AAA 630 Puerto Rico Electric Power
Authority, 7.125%, 7/1/14 682,056
------------
$ 8,219,621
------------
GENERAL OBLIGATION - 10.2%
Aa AA+ $1,500 City of Phoenix, General
Obligation, 6.375%, 7/1/13 $ 1,499,070
Aa AA+ 1,000 City of Phoenix, General
Obligation, 5.55%, 7/1/09 935,900
Aa AA+ 3,000 City of Phoenix, General
Obligation, 5.10%, 7/1/13 2,572,920
Aa1 AA+ 1000 City of Scottsdale,
General Obligation, 5.50%,
7/1/12 911,180
NR A 2,000 Tatum Ranch Community
Facilities District of
Phoenix, General
Obligation, 6.875%, 7/1/16 2,054,780
Aa AA+ 1,315 City of Tempe, General
Obligation, 5.35%, 7/1/10 1,195,308
Aa AA+ 1,000 City of Tempe, General
Obligation, 5.25%, 7/1/15 872,000
Aa AA- 2,000 Scottsdale Unified School
District No. 48 of
Maricopa County, 5.00%,
7/1/09 1,776,960
Aa AA- 1,300 Scottsdale Unified School
District No. 48 of
Maricopa County, 4.60%,
7/1/11 1,078,298
Baa1 A 1,000 Puerto Rico, General
Obligation, 5.50%, 7/1/21 866,620
Baa1 A 1000 Puerto Rico, General
Obligation, 5.75%, 7/1/16 906,400
------------
$ 14,669,436
------------
HOSPITALS - 3.1%
NR BBB $1,130 Arizona Health Facilities
Authority, Phoenix
Memorial Hospital, 8.125%,
6/1/12 $ 1,157,549
NR BBB 1,250 Arizona Health Facilities
Authority, Phoenix
Memorial Hospital, 8.20%,
6/1/21 1,282,137
Baa BB+ 1,000 Maricopa County, Sun
Health Corporation,
8.125%, 4/1/12 1,024,090
NR NR 915 City of Winslow, Winslow
Memorial Hospital Project,
9.50%, 6/1/22 980,724
------------
$ 4,444,500
------------
HOUSING - 5.5%
NR AA $1,000 City of Phoenix, Woodstone
and Silver Springs
Apartments, Multifamily
Housing, (Asset Guaranty),
6.25%, 4/1/23 $ 954,160
NR AAA 1,000 City of Tempe, Multifamily
Housing, Quadrangle
Village Apartments, FHA,
6.25%, 6/1/26 947,480
NR AAA 2,775 City of Phoenix, Chris
Ridge Village Project,
FHA, 6.80%, 11/1/25 2,746,362
Aaa NR 1,500 City of Phoenix, Meadow
Glen Apartments,
Multifamily Housing, (GNMA
Collateralized) 5.80%,
8/20/28 1,302,780
NR A 2,000 Maricopa County, Laguna
Point Apartments,
Multifamily Housing,
6.75%, 7/1/09 1,925,900
------------
$ 7,876,682
------------
INDUSTRIAL DEVELOPMENT
REVENUE - 3.5%
A3 A $4,000 Greenlee County, Pollution
Control, Phelps Dodge
Corporation, 5.45%, 6/1/09 $ 4,048,020
A1 NR 1,000 City of Casa Grande,
Pollution Control,
Frito-Lay Inc., 6.60%,
12/1/10 1,009,880
------------
$ 5,057,900
------------
INSURED GENERAL OBLIGATIONS - SCHOOL
DISTRICTS - 5.9%
Aaa AAA $1,000 Peoria Unified School
District No. 11 of
Maricopa County, (MBIA)
6.40%, 7/1/10 $ 1,024,030
Aaa AAA 1,300 Alhambra Elementary School
District No. 68 of
Maricopa County, (AMBAC)
5.50%, 7/1/07 1,241,435
</TABLE>
27
<PAGE> 38
--------------------------------------------------------------------------------
ARIZONA TAX FREE PORTFOLIO (CONTINUED)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED GENERAL
OBLIGATIONS - SCHOOL
DISTRICTS - (CONTINUED)
Aaa AAA 1,000 Alhambra Elementary School
District No. 68 of
Maricopa County, (AMBAC)
5.125%, 7/1/13 867,110
Aaa AAA 1,000 Alhambra Elementary School
District No. 68 of
Maricopa County, (AMBAC)
5.625% 7/1/13 901,840
Aaa AAA 1,000 Paradise Valley Unified
School District No. 69 of
Maricopa County, (MBIA),
5.0%, 7/1/09 877,190
Aaa AAA 1,000 Chandler Unified School
District No. 80 of
Maricopa County, (FGIC)
6.40%, 7/1/10 1,022,050
Aaa AAA 1,000 Pima County, School
District No. 1, Tucson
Project, (FGIC) 5.40%,
7/1/13 906,740
Aaa AAA 1,750 Pima County, School
District No. 1, Tucson
Project, (FGIC) 5.875%,
7/1/14 1,665,370
------------
$ 8,505,765
------------
INSURED GENERAL OBLIGATIONS - 2.2%
Aaa AAA $1,000 Puerto Rico General
Obligation, (FSA) 7/1/20
(1) $ 903,690
Aaa AAA 1,500 Puerto Rico, General
Obligation, (AMBAC)
7/1/15 (1) 1,372,170
Aaa AAA 1,000 Puerto Rico, General
Obligation, (FSA) 7/1/22
(1) 934,360
------------
3,210,220
------------
INSURED HOSPITALS - 13.1%
Aaa AAA $2,000 Maricopa County, Hospital
District No. 1, (FGIC)
6.125%, 6/1/15 $ 1,922,360
Aaa AAA 3,500 Maricopa County, Catholic
Healthcare West, (MBIA)
5.625%, 7/1/23 3,113,425
Aaa AAA 2,000 Maricopa County, Samaritan
Health, (MBIA) 7.0%,
12/1/16 2,164,540
Aaa AAA 2,000 Mohave County, Hospital
District No. 1, Kingman
Regional Medical Center,
(FGIC) 6.50%, 6/1/15 2,024,820
Aaa AAA 1,500 Pima County, Tucson
Medical Center, (MBIA)
6.375%, 4/1/12 1,499,055
Aaa AAA 3,500 Pima County, Tucson
Medical Center, (MBIA)
5.0%, 4/1/15 2,956,205
Aaa AAA 1,000 Pima County, Carondelet
Health Care Corporation,
(MBIA) 5.25%, 7/1/11 895,410
Aaa AAA 2,000 Pima County, Carondelet
Health Care Corporation,
(MBIA) 5.25%, 7/1/12 1,783,680
Aaa AAA 2,000 City of Tucson, University
Medical Center
Corporation, (MBIA) 5.0%,
7/1/13 1,707,340
Aaa AAA 1,000 City of Tucson, University
Medical Center
Corporation, (MBIA) 5.0%,
7/1/21 810,730
------------
$ 18,877,565
------------
INSURED HOUSING - 1.2%
Aaa AAA $1,975 City of Sierra Vista,
Mountain View Apartments,
FHA, (MBIA), 5.75%, 1/1/24 $ 1,764,070
------------
INSURED UTILITIES - 6.1%
Aaa AAA $5,000 Navajo County, Pollution
Control, Arizona Public
Service Co., (AMBAC)
5.50%, 8/15/28 $ 4,332,850
Aaa AAA 1,000 Arizona State Power
Authority, Hoover
Upgrating Project, (MBIA)
5.25%, 10/1/17 863,360
Aaa AAA 3,500 Pima County, Irvington
Power Project, (FSA)
7.25%, 7/15/10 3,722,005
------------
$ 8,918,215
------------
INSURED MISCELLANEOUS - 3.2%
Aaa AAA $1,000 Certificates of
Participation, Arizona
Municipal Financing
Program, (FGIC) 5.50%,
8/1/19 $ 893,960
Aaa AAA 1,000 Maricopa County Stadium
District, (MBIA) 5.50%,
7/1/13 913,500
Aaa AAA 1,750 City of Phoenix, Civic
Improvement Excise Tax,
(MBIA) 6.60%, 7/1/08 1,818,075
Aaa AAA 1,000 City of Tucson, Junior
Lien Street and Highway,
(MBIA) 5.50%, 7/1/12 906,290
------------
$ 4,531,825
------------
INSURED WATER & SEWER - 1.4%
Aaa AAA $1,000 City of Chandler, Water
and Sewer, (FGIC) 6.25%,
7/1/13 989,150
Aaa AAA 1,200 City of Phoenix, Civic
Improvement Wastewater
Systems, (MBIA) 5.0%,
7/1/18 987,468
------------
$ 1,976,618
------------
</TABLE>
28
<PAGE> 39
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRANSPORTATION - 6.9%
Aa AA $1,000 State of Arizona,
Transportation Board &
Highway, 5.0%, 7/1/10 $ 878,360
Aa AA 2,000 State of Arizona,
Transportation Board &
Highway, 5.10%, 7/1/11 1,749,240
Baa1 A 1,000 Puerto Rico Highway and
Transportation Authority,
5.25%, 7/1/20 830,430
Baa1 A 1,000 Puerto Rico Highway and
Transportation Authority,
5.25%, 7/1/21 827,910
A1 A+ 3,000 City of Tucson, Arizona,
Senior Lien Street and
Highway, 5.50%, 7/1/09 2,793,570
NR BBB 3,000 Guam Airport Authority,
(AMT) 6.70%, 10/1/23 2,885,370
------------
$ 9,964,880
------------
UTILITIES - 19.6%
Baa2 BBB $1,500 Coconino County, Pollution
Control, Nevada Power Co.,
7.125%, 10/1/06 $ 1,500,975
Ba2 BB 2,500 Maricopa County, Pollution
Control, Public Service
Company of New Mexico,
Palo Verde Project,
6.375%, 8/15/23 2,155,250
Baa2 BBB 5,300 Navajo County, Pollution
Control, Arizona Public
Service Co., 5.875%,
8/15/28 4,491,273
NR AAA 1,000 Mohave County, Citizens
Utilities Company Project,
5.80%, 11/15/28 870,540
A A+ 1,000 Puerto Rico Telephone
Authority, 1/1/20 (1) 940,170
NR BBB 1,200 Guam Power Authority,
6.30%, 10/1/12 1,145,832
NR BBB 1,750 Guam Power Authority,
6.30%, 10/1/22 1,633,152
Baa1 A- 1,500 Puerto Rico Electric Power
Authority, 7.0%, 7/1/07 1,561,485
Baa1 A- 5,000 Puerto Rico Electric Power
Authority, 5.0%, 7/1/12 4,215,700
Baa1 A- 370 Puerto Rico Electric Power
Authority, 7.125%, 7/1/14 384,030
Aa AA 1,190 Salt River Project
Agricultural Improvement
and Power District, Salt
River Project Electric
System, 5.50%, 1/1/28 1,036,347
Aa AA 3,500 Salt River Project
Agricultural Improvement
and Power District, Salt
River Project Electric
System, 5.50%, 1/1/25 3,082,380
Aa AA 1,000 Salt River Project
Agricultural Improvement
and Power District, Salt
River Project Electric
System, 6.25%, 1/1/27 986,310
Aa AA 1,000 Salt River Project
Agricultural Improvement
and Power District, Salt
River Project Electric
System, 1/1/28 (1) 714,870
Aa AA 1,000 Salt River Project
Agricultural Improvement
and Power District, Salt
River Project Electric
System, 5.25%, 1/1/13 883,280
Aa AA 2,000 Salt River Project
Agricultural Improvement
and Power District, Salt
River Project Electric
System, 5.25%, 1/1/19 1,720,220
A1 AA- 1,000 Central Arizona Water
Conservation District,
Central Arizona Project,
5.50%, 11/1/09 941,931
------------
$ 28,263,745
------------
WATER & SEWER - 7.9%
Aa AA+ $2,000 Wastewater Management
Authority of Arizona,
6.80%, 7/1/11 $ 2,097,420
A1 AA- 1,750 City of Phoenix, Water
System, 5.40%, 7/1/14 1,547,770
A1 A+ 1,000 City of Tucson, Water
System, 6.50%, 7/1/16 1,013,910
A1 A+ 1,000 City of Tucson, Water
System, 5.50%, 7/1/08 953,450
A1 A+ 1,000 City of Tucson, Water
System, 5.50%, 7/1/09 955,690
A1 A+ 1,000 City of Tucson, Water
System, 5.50%, 7/1/10 944,180
A1 A 5,000 City of Phoenix, Water
System, 4.75%, 7/1/23 3,788,803
------------
$ 11,301,223
------------
TOTAL TAX-EXEMPT
INVESTMENTS (IDENTIFIED
COST, $148,292,359) $144,037,970
============
<FN>
(1) The above designated securities have been issued as inverse floater bonds.
The Portfolio primarily invests in debt securities issued by Arizona
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1995, 33.1% of the securities in the portfolio of
investments are backed by bond insurance of various institutions and financial
guaranty assurance agencies. The aggregate percentage by financial institutions
ranged from 6.5% to 15.4% of total investments.
</TABLE>
See notes to financial statements
29
<PAGE> 40
--------------------------------------------------------------------------------
Colorado Tax Free Portfolio
Portfolio of Investments - January 31, 1995
(Unaudited)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 1.8%
A1 A+ $1,000 City of Colorado Springs,
Colorado College Project,
5.125%, 6/1/16 $ 853,730
------------
ESCROWED - 1.4%
Aaa AAA $4,000 Colorado Health Facilities
Authority, Liberty Heights
Project, (FSA) 0%, 7/15/24 $ 491,520
NR AAA 150 Puerto Rico Highway and
Transportation Authority,
6.50%, 7/1/22 160,988
------------
$ 652,508
------------
GENERAL OBLIGATION - 11.3%
A NR $ 500 City of Aspen, General
Obligation, 5.625%, 4/15/14 $ 448,830
Aa AA 1,500 City and County of Denver,
General Obligation, 5.10%,
9/1/09 901,650
Aa AA- 500 Poudre Valley Hospital
District of Larimer County,
5.375%, 11/15/09 461,320
Aa AA 1,000 Boulder and Gilpin
Counties, Boulder Valley
School District, 6.30%,
12/1/13 1,000,710
A A+ 500 City and County of Denver,
School District No. 1,
5.125%, 12/1/12 429,435
NR A 750 Larimer, Weld & Boulder
Counties, Thompson School
District, 6.05%, 12/15/08 738,203
NR BBB 475 Guam General Obligation,
5.40%, 11/15/18 386,587
Baa1 A 1,000 Puerto Rico General
Obligation, 5.75%, 7/1/15 911,630
------------
$ 5,278,365
------------
HOSPITAL - 9.5%
Baa1 BBB+ $1,250 Boulder County, Longmont
United Hospital, 5.875%,
12/1/20 $ 1,081,625
Baa BBB 2,050 Colorado Health Facilities
Authority, Rocky Mountain
Adventist Healthcare,
6.625%, 2/1/13 1,855,722
A NR 250 Colorado Health Facilities
Authority, Craig Hospital,
5.375%, 12/1/13 213,650
A NR 500 Colorado Health Facilities
Authority, Craig Hospital,
5.50%, 12/1/21 417,590
Baa1 BBB+ 250 Colorado Health Facilities
Authority, Swedish Medical
Center, 6.80%, 1/1/23 236,870
NR BBB- 650 Colorado Health Facilities
Authority, National Jewish
Center for Immunology and
Respiratory Medicine,
6.875%, 2/15/12 602,478
------------
$ 4,407,935
------------
HOUSING - 8.9%
Aa AA $ 600 Colorado Housing and
Finance Authority,
Multi-Family Housing,
5.90%, 10/1/29 $ 547,536
NR NR 350 Lake Creek Affordable
Housing Corporation,
Multifamily Housing, 8.0%,
12/1/23 345,667
Aa NR 2,000 Colorado Housing and
Finance Authority, Single
Family Access Program,
7.90%, 12/1/24 2,152,320
Aa NR 1,000 Colorado Housing and
Finance Authority, Single
Family Access Program 8.0%,
12/1/24 1,085,350
------------
$ 4,130,873
------------
INDUSTRIAL DEVELOPMENT
REVENUE - 2.9%
A2 NR $1,650 Puerto Rico Pollution
Control, American Home
Products Corporation,
5.10%, 12/1/18 $ 1,337,820
------------
INSURED EDUCATION - 4.9%
Aaa AAA $ 500 Board of Trustees of the
Colorado School of Mines
Auxiliary Facilities,
(MBIA) 5.0%, 12/1/13 $ 435,860
Aaa AAA 1,000 Board of Trustees of the
State Colleges in Colorado,
Adams State College of
Colorado, (MBIA) 5.70%,
5/15/14 940,890
Aaa AAA 1,000 Board of Trustees of the
State Colleges in Colorado,
Western State College of
Colorado, (MBIA) 5.625%,
5/15/15 925,370
------------
$ 2,302,120
------------
INSURED GENERAL OBLIGATIONS - SCHOOL
DISTRICTS - 9.8%
Aaa AAA $1,000 Douglas and Elbert
Counties, Douglas County
School District, (MBIA)
6.40%, 12/15/11 $ 1,011,590
Aaa AAA 1,750 Eagle, Garfield & Routt
Counties, School District
No. RE 50J, (MBIA) 6.30%,
12/1/12 1,755,583
Aaa AAA 1,000 Poudre School District R-1
of Larimer County, (MBIA)
6.50%, 12/15/11 1,029,930
Aaa AAA 750 Pueblo County School
District No. 70, Pueblo
Rural, (AMBAC) 6.40%,
12/1/14 757,523
------------
$ 4,554,626
------------
INSURED HOSPITALS - 16.3%
Aaa AAA $ 700 Colorado Health Facilities
Authority, Rose Medical
Center, (MBIA) 5.125%,
8/15/21 $ 582,120
</TABLE>
30
<PAGE> 41
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED HOSPITALS - (CONTINUED)
Aaa AAA 2,500 Colorado Health Facilities
Authority, Sisters of
Charity, (MBIA) 5.25%,
5/15/24 2,176,425
Aaa AAA 2,000 Colorado Health Facilities
Authority, Boulder
Community Hospital, (MBIA)
5.875%, 10/1/23 1,872,640
Aaa AAA 500 City and County of Denver,
Childrens Hospital, (FGIC)
6.0%, 10/1/15 481,080
Aaa AAA 1,000 Logan County, Western
Health Network, (MBIA)
5.90%, 1/1/19 947,310
Aaa AAA 500 Larimer County, Poudre
Valley Hospital District,
(AMBAC) 5.20%, 12/1/11 451,575
Aaa AAA 1,000 Pueblo County, Parkview
Episcopal Medical Center,
(MBIA) 7.0%, 9/1/09 1,055,070
------------
$ 7,566,220
------------
INSURED HOUSING - 2.2%
Aaa AAA $1,000 City of Thornton, SCA
Realty MFMR, (FSA) (2)
7.10%, 1/1/23 $ 1,007,880
------------
INSURED MISCELLANEOUS -
2.6%
Aaa AAA $1,000 Morgan County, Pollution
Control, (MBIA) 5.50%,
6/1/12 $ 923,220
Aaa AAA 300 Puerto Rico Electric Power
Authority, Variable (FSA)
7/1/03 (1) 304,509
------------
$ 1,227,729
------------
INSURED SPECIAL TAX - 4.3%
Aaa AAA $2,000 City of Broomfield Sales
and User Tax, (AMBAC)
6.30%, 12/1/24 $ 2,008,320
------------
INSURED WATER AND
SEWER - 3.7%
Aaa AAA $1,000 Municipal Subdistrict,
Northern Colorado Water
Conservancy District,
(AMBAC) 5.0%, 12/1/07 $ 829,990
Aaa AAA 430 Montrose, Delta, and Ouray
Counties, Project Seven
Water Authority, (FGIC)
5.45%, 12/1/08 402,970
Aaa AAA 500 Montrose, Delta, and Ouray
Counties, Project Seven
Water Authority, (FGIC)
5.70%, 12/1/12 473,724
------------
$ 1,706,684
------------
SPECIAL TAX REVENUE - 0.2%
NR NR $ 100 Virgin Islands Public
Finance Authority, 7.25%,
10/1/18 $ 100,813
------------
TRANSPORTATION - 10.0%
Baa3 BB $1,500 City and County of Denver,
Colorado Special Facilities
Airport System, United
Airlines, (AMT) 6.875%,
10/1/32 $ 1,348,425
Baa BB 500 City and County of Denver,
Colorado Airport System,
(AMT) 6.75%, 11/15/22 451,045
Baa BB 500 City and County of Denver,
Colorado Airport System,
(AMT) 7.50%, 11/15/23 494,100
NR BBB 100 Guam Airport Authority,
(AMT) 6.70%, 10/1/23 96,179
Baa1 A 2,750 Puerto Rico Highway and
Transportation Authority,
5.25%, 7/1/20 2,283,683
------------
$ 4,673,432
------------
UTILITIES - 10.2%
Aa AA $2,500 City of Colorado Springs,
Utilities System, 5.125%,
11/15/23 $ 2,054,850
NR BBB 200 Guam Power Authority,
6.30%, 10/1/22 186,646
NR BBB 350 Guam Power Authority,
5.25%, 10/1/13 289,888
NR BBB 500 Guam Power Authority,
6.625%, 10/1/14 492,660
Aa A+ 200 Platte River Power
Authority, 5.75%, 6/1/18 182,988
Aa A+ 1,750 Platte River Power
Authority, 5.50%, 6/1/18 1,548,802
------------
$ 4,755,834
------------
TOTAL TAX-EXEMPT
INVESTMENTS (IDENTIFIED
COST, $48,064,873) $ 46,564,889
=============
<FN>
(1) The above designated have been issued as inverse floater bonds.
The Portfolio invests primarily in debt securities issued by Colorado
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1995, 43.8% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 6.7% to 25.6% of total investments.
</TABLE>
See notes to financial statements
31
<PAGE> 42
--------------------------------------------------------------------------------
Connecticut Tax Free Portfolio
Portfolio of Investments - January 31, 1995
(Unaudited)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
STANDARD PAR
MOODY'S & POOR'S VALUE SECURITY VALUE
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 9.1%
Baa1 A $ 625 Connecticut HEFA,
Fairfield University
Issue, 6.90%,
7/1/14 $ 633,950
Aaa AAA 3,000 Connecticut HEFA, Yale
University, Residual
Interest Bond, Variable
Rate, 6/10/30 (1) 2,661,900
Baa BBB 1,000 Connecticut HEFA,
University of Hartford,
6.75%, 7/1/12 922,210
Baa BBB 5,500 Connecticut HEFA,
University of Hartford,
6.80%, 7/1/22 4,960,670
NR BBB- 6,175 Connecticut HEFA,
Quinnipiac College, 6.00%,
7/1/23 5,135,686
NR BBB- 1,000 Connecticut HEFA, Sacred
Heart University, 6.80%,
7/1/12 970,200
NR A- 1,000 Connecticut HEFA, Sacred
Heart University, 5.80%,
7/1/23 836,780
NR A- 1,125 Connecticut HEFA, Taft
School, 5.40%, 7/1/20 948,757
-------------
$ 17,070,153
-------------
ESCROWED TO MATURITY - 2.3%
NR AA- $ 650 State of Connecticut G.O.
Bonds, 6.875%, 7/15/10 $ 699,576
NR AAA 800 Connecticut Special Tax
Obligation Bonds,
Transportation
Infrastructure Purposes,
6.75%, 6/1/11 860,416
NR AAA 645 Connecticut Special Tax
Obligation Bonds,
Transportation
Infrastructure Purposes,
6.50%, 7/1/09 682,616
A1 AA 300 Amity RSD No. 5 Bonds,
6.80%, 6/15/08 317,721
NR NR 1,630 City of Stratford,
Connecticut G.O. Bonds,
7.30%, 3/1/12 1,794,092
-------------
$ 4,354,421
-------------
GENERAL OBLIGATION - 6.6%
Aa NR $ 525 Town of Guilford,
Connecticut Bonds, 4.75%,
11/15/10 $ 455,721
Aa NR 525 Town of Guilford,
Connecticut Bonds, 4.75%,
11/15/11 450,681
Aa AA 225 Town of Windsor,
Connecticut Bonds, 5.75%,
1/15/13 212,263
Aa AA 190 Town of Windsor,
Connecticut Bonds, 5.75%,
1/15/14 178,927
A AA- 2,000 City of Bridgeport,
Connecticut Bonds, 6.125%,
3/1/05 1,999,140
Aa AA- 1,750 State of Connecticut,
Capital Appreciation
Bonds, 0%, 11/1/09 717,903
AA AA- 1,000 State of Connecticut
Bonds, 5.50%, 3/15/10 936,570
AA AA- 500 State of Connecticut
Bonds, 5.50%, 3/15/11 467,040
Aa AA 1,270 City of Danbury,
Connecticut Bonds, 4.50%,
2/1/14 1,011,720
Aa1 NR 650 City of Farmington,
Connecticut Bonds, 5.70%,
1/15/11 631,430
NR BBB 500 Government of Guam Bonds,
5.40%, 11/15/18 406,935
Aa1 AA+ 925 City of Norwalk Maritime
Center Project Bonds,
6.05%, 2/1/09 921,531
Baa1 A 2,620 Puerto Rico Public
Improvement Bonds, 5.25%,
7/1/18 2,268,212
Baa1 A 2,000 Puerto Rico PBA Bonds,
5.50%, 7/1/21 1,733,240
-------------
$ 12,391,313
-------------
HEALTH CARE (NON-HOSPITAL) - 14.3%
A1 AA- $ 600 Connecticut HEFA, Nursing
Home Program (Noble
Horizons), 6.00%, 11/1/22 $ 536,286
A1 AA- 1,045 Connecticut HEFA, Nursing
Home Program (Cherry
Brook), 5.875%, 11/1/12 943,154
A1 AA- 720 Connecticut HEFA, Nursing
Home Program (Highland
View), 7.00%, 11/1/07 750,996
A1 AA- 1,000 Connecticut HEFA, Nursing
Home Program (Jewish Home-
Fairfield), 6.25%, 11/1/20 940,370
A1 AA- 515 Connecticut HEFA, Nursing
Home Program (Mansfield),
5.875%, 11/1/12 464,808
A1 AA- 655 Connecticut HEFA, Nursing
Home Program (St.
Camillus), 6.25%, 11/1/18 619,388
A1 AA- 3,250 Connecticut HEFA, Nursing
Home Program (St. Joseph's
Manor), 6.25%, 11/1/16 3,048,143
A1 AA- 1,030 Connecticut HEFA, Nursing
Home Program (St. Joseph's
Learning Center), 5.00%,
11/1/09 864,963
A1 AA- 2,235 Connecticut HEFA, Nursing
Home Program (St. Joseph's
Living Center), 5.00%,
11/1/09 1,732,259
A1 AA- 1,365 Connecticut HEFA, Nursing
Home Program (Sharon
Health Care), 6.25%,
11/1/14 1,306,742
A1 AA- 335 Connecticut HEFA, Nursing
Home Program (Wadsworth
Glen), 7.00%, 11/1/07 349,421
</TABLE>
32
<PAGE> 43
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
STANDARD PAR
MOODY'S & POOR'S VALUE SECURITY VALUE
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
HEALTH CARE (NON-HOSPITAL) - (CONTINUED)
A1 AA- 2,000 Connecticut HEFA, Nursing
Home Program (Wadsworth
Glen), 7.50%, 11/1/16 2,090,220
A1 AA- 3,000 Connecticut HEFA, Nursing
Home Program (Windsor),
7.125%, 11/1/14 3,102,030
Aa3 NR 9,000 Connecticut Development
Authority Health Care
Bonds (Duncaster), 6.75%,
9/1/15 (2) 8,930,250
NR A- 1,000 Puerto Rico I. M. E. (Dr.
Pila Hospital), 7.85%,
8/1/28 1,050,440
-------------
$ 26,729,470
-------------
HOSPITALS - 5.9%
NR A- $3,770 Connecticut HEFA, William
W. Backus Hospital,
6.375%, 7/1/22 $ 3,505,723
Baa1 NR 9,150 Connecticut HEFA, Griffin
Hospital, 5.75%, 7/1/23 7,469,237
-------------
$ 10,974,960
-------------
HOUSING - 7.8%
Aa AA $ 100 Connecticut HFA Mortgage
Revenue Bonds, 7.40%,
11/15/99 $ 102,354
Aa AA 1,400 Connecticut HFA Mortgage
Revenue Bonds, 7.20%,
11/15/01 1,468,978
Aa AA 5,000 Connecticut HFA Mortgage
Revenue Bonds, 6.70%,
11/15/12 5,103,400
Aa AA 235 Connecticut HFA Mortgage
Revenue Bonds, 6.55%,
11/15/13 237,331
Aa AA 3,250 Connecticut HFA Mortgage
Revenue Bonds, 6.20%,
5/15/14 3,132,935
Aa AA 1,000 Connecticut HFA Mortgage
Revenue Bonds, 5.85%,
11/15/16 916,030
Aa AA 1,700 Connecticut HFA Mortgage
Revenue Bonds, 6.35%,
5/15/17 1,654,406
Aa AA 2,000 Connecticut HFA Mortgage
Revenue Bonds, 6.60%,
11/15/23 2,002,580
-------------
$ 14,618,014
-------------
INDUSTRIAL DEVELOPMENT/POLLUTION
CONTROL REVENUES - 1.6%
Aaa AAA $1,000 Connecticut Development
Authority PCR (Pfizer
Inc.), 6.55% 2/15/13 $ 1,025,540
Aa AA- 2,000 Connecticut Development
Authority (Economic
Development Projects),
Revenue Bonds, 6.00%,
11/15/08 1,975,820
-------------
$ 3,001,360
-------------
INSURED AIRPORTS - 4.8%
Aaa AAA $8,200 State of Connecticut
Airport Revenue Bonds,
Bradley International
Airport, (FGIC), 7.65%,
10/1/12 $ 9,065,346
-------------
INSURED COLLEGE AND UNIVERSITY - 2.9%
Aaa AAA $ 725 Connecticut HEFA,
Fairfield University
(MBIA), 5.00%, 7/1/18 $ 600,380
Aaa AAA 1,200 Connecticut HEFA,
Connecticut College
(MBIA), 6.625%, 7/1/11 1,239,240
Aaa AAA 2,000 Connecticut HEFA, Trinity
College (MBIA), 6.00%,
7/1/22 1,889,700
Aaa AAA 1,555 Connecticut HEFA, Choate
Rosemary College (MBIA),
6.80%, 7/1/15 1,635,020
-------------
$ 5,364,340
-------------
INSURED GENERAL OBLIGATIONS - 3.9%
Aaa AAA $1,750 Connecticut Municipal
Electric Energy
Cooperative Bonds (MBIA),
5.00%, 1/1/18 $ 1,470,438
Aaa AAA 1,000 Connecticut Development
Authority Water Facilities
Bonds, Bridgeport
Hydraulic Company (MBIA),
6.05%, 3/1/29 952,970
Aaa AAA 3,710 South Central Connecticut,
Regional Water Authority
Bonds (MBIA), 5.75%,
8/1/12 3,503,056
Aaa AAA 1,500 State of Connecticut
Special Tax Obligation
Bonds (FGIC), 5.00%,
10/1/13 1,280,355
-------------
$ 7,206,819
-------------
</TABLE>
33
<PAGE> 44
--------------------------------------------------------------------------------
CONNECTICUT TAX FREE PORTFOLIO (CONTINUED)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
STANDARD PAR
MOODY'S & POOR'S VALUE SECURITY VALUE
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED GENERAL
OBLIGATIONS - LOCAL - 3.2%
Aaa AAA $1,220 Town of Bethel,
Connecticut Bonds (MBIA),
6.50%, 2/15/09 $ 1,293,932
Aaa AAA 2,000 City of Waterbury
Connecticut, Tax Revenue
Bonds (FGIC), 5.375%,
4/15/08 1,893,980
Aaa AAA 740 Town of Stratford,
Connecticut, Bonds (MBIA),
6.60%, 3/1/11 770,562
Aaa AAA 1,000 City of New Britain,
Connecticut, Bonds (MBIA),
6.00%, 3/1/12 984,230
Aaa AAA 1,000 Town of Plainfield,
Connecticut, Bonds (MBIA),
6.375%, 8/1/11 1,013,390
-------------
$ 5,956,094
-------------
INSURED HOSPITALS - 11.4%
Aaa AAA $1,000 Connecticut HEFA,
Bridgeport Hospital
(MBIA), 6.625%, 7/1/18 $ 1,020,570
Aaa AAA 5,750 Connecticut HEFA, St.
Francis Hospital (FGIC),
5.00%, 7/1/23 4,619,608
Aaa AAA 1,500 Connecticut HEFA, Lawrence
and Memorial Hospital
(MBIA), 5.00%, 7/1/13 1,277,610
Aaa AAA 5,750 Connecticut HEFA, Lawrence
and Memorial Hospital
(MBIA), 5.00%, 7/1/22 4,633,983
Aaa AAA 1,000 Connecticut HEFA,
Middlesex Hospital (MBIA),
6.25%, 7/1/22 976,870
Aaa AAA 1,000 Connecticut HEFA, New
Britain General Hospital
(MBIA), 6.25%, 7/1/24 947,230
Aaa AAA 1,000 Connecticut HEFA,
Newington Hospital (MBIA),
6.30%, 7/1/21 989,770
Aaa AAA 1,000 Connecticut HEFA, Norwalk
Hospital (MBIA), 6.25%,
7/1/22 976,870
Aaa AAA 1,000 Connecticut HEFA, Hospital
of St. Raphael (AMBAC),
6.50%, 7/1/11 1,032,610
Aaa AAA 1,500 Connecticut HEFA, Hospital
of St. Raphael (AMBAC),
6.625%, 7/1/14 1,533,255
Aaa AAA 2,000 Connecticut HEFA, Yale-New
Haven Hospital (MBIA),
6.50%, 7/1/12 2,030,720
Aaa AAA 1,200 Connecticut HEFA, Yale-New
Haven Hospital (MBIA),
7.10%, 7/1/25 1,248,791
-------------
$ 21,287,887
-------------
INSURED SOLID WASTE - 0.7%
Aaa AAA $1,275 Connecticut Resources
Recovery Authority Mid-
Connecticut System Bonds
(MBIA), 7.30%, 10/15/12 $ 1,343,825
-------------
INSURED WATER AND SEWER - 1.4%
Aaa AAA $1,750 Connecticut Development
Authority Water Facilities
Bonds, Connecticut Water
Company (AMBAC), (AMT),
5.875%, 9/1/22 $ 1,589,753
Aaa AAA 1,150 Connecticut Development
Authority Water Facilities
Bonds, Connecticut Water
Company (MBIA), (AMT),
5.75%, 7/1/28 1,018,727
-------------
$ 2,608,480
-------------
SOLID WASTE - 7.6%
A NR $2,500 Bristol Resource Recovery
Facility Operating
Committee, (Ogden Martin
Systems), 6.50%, 7/1/14 $ 2,291,550
A2 A+ 1,000 Connecticut Resources
Recovery Authority
(American REF-FUEL
Company), (AMT), 8.10%,
11/15/15 1,085,300
A2 A+ 450 Connecticut Resources
Recovery Authority
(American REF-FUEL
Company), (AMT), 8.00%,
11/15/15 486,896
A2 A+ 4,250 Connecticut Resources
Recovery Authority
(American REF-FUEL
Company), (AMT), 6.45%,
11/15/22 3,940,473
NR A 7,970 Eastern Connecticut
Resource Recovery
Authority, (Wheelabrator
Lisbon), 5.50%, 1/1/20 6,349,060
-------------
$ 14,153,279
-------------
SPECIAL TAX - 4.0%
A1 AA- $2,750 State of Connecticut
Special Tax Obligation
Bonds, 4.40%, 10/1/04 $ 2,385,268
</TABLE>
34
<PAGE> 45
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-----------------
STANDARD PAR
MOODY'S & POOR'S VALUE SECURITY VALUE
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
SPECIAL TAX - (CONTINUED)
A1 AA- 1,000 State of Connecticut
Special Tax Obligation
Bonds, 5.40%, 9/1/10 911,480
A1 AA- 3,180 State of Connecticut
Special Tax Obligation
Bonds, 6.125%, 9/1/12 3,141,108
NR BR 1,000 Virgin Islands PFA Revenue
Bonds, 7.25%, 10/1/18 (2) 1,008,130
-------------
$ 7,445,986
-------------
STUDENT LOANS - 1.2%
A1 NR $1,370 Connecticut Higher
Education Supplemental
Loan Authority Revenue
Bonds (AMT), 6.20%,
11/15/09 $ 1,328,653
A1 NR 925 Connecticut Higher
Education Supplemental
Loan Authority Revenue
Bonds (AMT), 7.50%,
11/15/10 954,896
-------------
$ 2,283,549
-------------
TRANSPORTATION - 2.2%
Baa1 A $4,250 Puerto Rico Highway and
Transportation Authority
Bonds, 5.50%, 7/1/15 $ 3,734,008
Baa1 A 440 Puerto Rico Highway and
Transportation Authority
Bonds, 5.00%, 7/1/22 349,443
-------------
$ 4,083,451
-------------
UTILITY - 5.9%
A1 A+ $2,000 Connecticut Development
Authority, New England
Power Company Project,
7.25%, 10/15/15 $ 2,099,080
NR BBB 1,100 Guam Power Authority
Revenue Bonds, 6.625%,
10/1/14 1,083,852
NR BBB 4,625 Guam Power Authority
Revenue Bonds, 6.30%,
10/1/22 4,316,189
NR NR 3,500 Virgin Islands Water and
Power Authority, Electric
Revenue System Bonds,
7.40%, 7/1/11 3,611,370
-------------
$ 11,110,491
-------------
WATER & SEWER REVENUE - 3.2%
Aa AA $1,950 State of Connecticut Clean
Water Fund Revenue Bonds,
6.125%, 2/1/12 $ 1,932,723
Aa AA 1,250 State of Connecticut Clean
Water Fund Revenue Bonds,
6.00%, 10/1/12 1,221,963
Aa AA 1,000 State of Connecticut Clean
Water Fund Revenue Bonds,
5.80%, 6/1/16 940,560
NR A+ 2,225 Connecticut Development
Authority Water
Facilities, Stamford Water
Company, 5.30%, 9/1/28 1,888,068
-------------
$ 5,983,314
-------------
TOTAL TAX-EXEMPT
INVESTMENTS (IDENTIFIED
COST, $198,211,032) $ 187,032,552
=============
<FN>
(1) The above designated securities have been issued as inverse floater bonds.
(2) At January 31, 1995, the market value of securities segregated to cover
margin requirements on open financial futures contracts amounted to
$9,938,380.
The Portfolio primarily invests in debt securities issued by Connecticut
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1995, 28.3% of the securities in the portfolio of
investments are backed by bond insurance of various institutions and financial
guaranty assurance agencies. The aggregate percentage by financial institutions
ranged from 3.3% to 15.3% of total investments.
</TABLE>
See notes to financial statements
35
<PAGE> 46
--------------------------------------------------------------------------------
Michigan Tax Free Portfolio
Portfolio of Investments - January 31, 1995
(Unaudited)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 1.0%
NR BBB- $2,000 Puerto Rico Polytechnic
University, 6.50%, 8/1/24 $ 1,875,880
-------------
ELECTRIC UTILITIES - 2.5%
NR BBB $1,000 Guam Power Authority,
6.625%, 10/1/14 $ 985,320
Baa1 BBB+ 500 Michigan South Central
Power Agency Supply
System, 6.75%, 11/1/10 505,180
Baa1 BBB 1,790 Monroe County, Michigan
PCR Detroit Edison
Project, 7.75%, 12/1/19 1,906,010
Baa1 A- 1,000 Puerto Rico Electric Power
Authority, 5.0%, 7/1/12 843,140
Baa1 A- 365 Puerto Rico Electric Power
Authority, 7.125%, 7/1/14 378,841
-------------
$ 4,618,491
-------------
ESCROWED - 5.6%
NR AA $ 940 Detroit City School
District, Michigan School
Building and Site, 7.15%,
5/1/11 $ 1,028,980
AAA NR 425 Michigan HFA, McLaren
Obligated Group, 7.50%,
9/15/21 477,454
Aaa AAA 750 Michigan HFA, Oakwood
Hospital, 7.20%, 11/1/15 822,653
Aaa AAA 3,500 Monroe County, Michigan
EDC Mercy Memorial
Hospital, 7.0%, 9/1/21 3,834,915
NR AA 955 Okemos Public Schools,
Michigan School Building
and Site, 6.90%, 5/1/11 1,032,995
Baa1 AAA 635 Puerto Rico Electric Power
Authority, 7.125%, 7/1/14 687,470
NR NR 2,400 Wyandotte School District,
Michigan School Building
and Site, 6.90%, 5/1/16 2,596,007
-------------
$ 10,480,474
-------------
GENERAL OBLIGATIONS - 8.9%
A1 AA $ 500 Avondale School District,
Michigan School Building
and Site, 6.75%, 5/1/14 $ 514,860
A1 AA 2,550 Clintondale Community
Schools, Michigan 6.75%,
5/1/24 2,595,849
Ba1 BBB 500 Detroit City, Michigan
G.O., 8.0%, 4/1/11 530,900
Ba1 BBB 3,000 Detroit City, Michigan
U.T.G.O, 6.35%, 4/1/14 2,783,760
A1 AA 2,500 Detroit School District,
Michigan School Building
and Site U.T.G.O, 6.25%,
5/1/12 2,427,900
A AA 500 East Lancing Building
Authority, Michigan, 7.0%,
10/1/16 520,740
A1 AA 1,350 Martin Public Schools,
Michigan School Building
and Site, 6.60%, 5/1/20 1,365,620
A1 AA 1,500 Mattawan Consolidated
Schools, Michigan, 6.40%,
5/1/09 1,495,650
A1 AA 2,000 Rockford Public Schools,
Michigan, 5.875%, 5/1/19 1,852,840
Baa1 A 1,000 Puerto Rico, 5.25%, 7/1/18 842,230
Baa1 A 1,000 Puerto Rico Public
Buildings Authority,
5.75%, 7/1/15 911,630
A1 AA 1,000 White Cloud Public
Schools, Michigan
U.T.G.O., 5.50%, 5/1/20 873,320
-------------
$ 16,715,299
-------------
HOSPITALS - 13.8%
A A- $ 450 Michigan HFA Detroit
Medical Center Obligated
Group, 7.50%, 8/15/11 $ 473,076
A A- 4,550 Michigan HFA Detroit
Medical Center Obligated
Group, 5.50%, 8/15/23 3,674,080
A A- 5,500 Michigan HFA Detroit
Medical Center Obligated
Group, 6.25%, 8/15/13 (2) 5,140,080
A A- 1,000 Michigan HFA Detroit
Medical Center Obligated
Group, 6.50%, 8/15/18 950,420
Aa AA 250 Michigan HFA Henry Ford
Continuing Care
Corporation, 6.75%, 7/1/11 255,595
A1 NR 2,970 Michigan HFA McLaren
Obligated Group, 5.375%,
10/15/13 2,489,781
A1 NR 6,000 Michigan HFA McLaren
Obligated Group, 4.50%,
10/15/21 (2) 4,127,400
A A 4,130 Michigan HFA MidMichigan
Obligated Group, 6.625%,
6/1/10 4,100,058
Aa AA- 1,000 University of Michigan
Medical Service Plan,
6.50%, 12/1/21 986,140
Aa AA 4,365 Royal Oak HFA William
Beaumont Hospital,
Michigan, 5.25%, 11/15/19 3,613,564
-------------
$ 25,810,194
-------------
HOUSING - 2.3%
NR A+ $1,500 Michigan HDA Rental
Housing (AMT), 7.15%,
4/1/10 $ 1,567,020
NR AA 895 Michigan HDA Single
Family, 6.95%, 12/1/20 907,807
NR A+ 1,000 Michigan HDA Rental
Housing, 7.10%, 4/1/21 1,024,380
</TABLE>
36
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--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING - (CONTINUED)
Aaa AAA 400 Puerto Rico HFC Single
Family, BULL Floaters
("BULLS"), Variable,
8/1/16 (1) 400,736
Aaa AAA 400 Puerto Rico HFC Single
Family, BEAR Floaters
("BEARS") (AMT), Variable,
8/1/14 (1) 393,996
-------------
$ 4,293,939
-------------
INDUSTRIAL DEVELOPMENT REVENUE/
POLLUTION CONTROL REVENUE - 4.1%
Baa1 BBB $3,100 Dickinson County, Michigan
EDC Champion International
Corporation, 6.55%, 3/1/07 $ 3,066,768
Baa1 BBB+ 4,000 Michigan PCR, General
Motors Corporation, 5.55%,
4/1/09 3,536,480
NR BBB+ 500 Michigan Strategic Fund,
KMart Corporation, 6.80%,
6/15/07 493,380
NR BBB 530 Richmond, Michigan EDC
KMart Corporation, 6.625%,
1/1/07 510,358
-------------
$ 7,606,986
-------------
INSURED EDUCATION - 1.6%
Aaa AAA $ 500 Michigan Higher Education
Student Loan (AMBAC)
(AMT), 6.875%, 10/1/07 $ 517,795
Aaa AAA 2,000 Northern Michigan
University, Michigan
General Revenue (AMBAC),
6.55%, 12/1/14 2,033,180
Aaa AAA 500 Western Michigan
University, Michigan
General Revenue (FGIC),
6.125%, 11/15/22 504,490
-------------
$ 3,055,465
-------------
INSURED ELECTRIC UTILITIES - 7.4%
Aaa AAA $1,510 Grand Haven City, Michigan
Electric System (MBIA),
5.25%, 7/1/13 $ 1,319,272
Aaa AAA 300 Michigan Strategic Fund,
Detroit Edison Company
(FGIC), 6.95%, 5/1/11 321,504
Aaa AAA 4,000 Michigan Strategic Fund,
Detroit Edison Company
(FGIC), 6.95%, 9/1/21 4,154,360
Aaa AAA 550 Monroe County, Michigan
PCR Detroit Edison Company
(FGIC) (AMT), 7.65%,
9/1/20 598,928
Aaa AAA 7,580 Monroe County, Michigan
PCR Detroit Edison Company
(MBIA) (AMT), 6.55%,
9/1/24 7,491,617
-------------
$ 13,885,681
-------------
INSURED GENERAL - 2.0%
Aaa AAA $4,500 Livonia, Michigan School
District U.T.G.O. (FGIC),
5.125%, 5/1/22 $ 3,744,180
-------------
INSURED GENERAL OBLIGATION - 11.8%
Aaa AAA $3,000 Anchor Bay School
District, Michigan School
Building and Site U.T.G.O.
(FGIC), 5.25%, 5/1/14 $ 2,603,190
Aaa AAA 1,000 Caledonia Community
Schools, Michigan School
Building Site U.T.G.O.
(AMBAC), 6.625%, 5/1/14 1,018,160
Aaa AAA 1,500 Dearborn School District,
Michigan U.T.G.O. (MBIA),
5.0%, 5/1/10 1,315,995
Aaa AAA 2,000 Grand Ledge, Michigan
School District U.T.G.O.
(MBIA), 7.875%, 5/1/11 2,295,020
Aaa AAA 2,000 Holland City, Michigan
School District U.T.G.O.
(AMBAC), 5.25%, 7/1/13 472,100
Aaa AAA 1,000 Lake Orion, Michigan
School District U.T.G.O.
(AMBAC), 7.0%, 5/1/20 1,044,960
Aaa AAA 2,295 Lincoln School District,
Michigan School Building
and Site U.T.G.O. (FGIC),
5.85%, 5/1/21 2,092,007
Aaa AAA 2,000 Lowell Schools, Michigan
U.T.G.O. (FGIC), 0.0%,
5/1/16 505,840
Aaa AAA 2,610 Okemos Public Schools,
Michigan U.T.G.O. (MBIA),
0%, 5/1/16 666,933
Aaa AAA 500 Pellston Public Schools,
Michigan U.T.G.O. (MBIA),
0%, 5/1/12 516,125
Aaa AAA 4,000 Puerto Rico (FSA), 6.0%,
7/1/22 3,814,000
Aaa AAA 4,000 Riverview Community School
District, Michigan
U.T.G.O. (AMBAC), 5.25%,
5/1/21 3,378,400
Aaa AAA 2,000 Riverview Community School
District, Michigan
U.T.G.O. (AMBAC), 5.25%,
5/1/14 1,739,420
Aaa AAA 1,400 Vicksburg Community
Schools, Michigan U.T.G.O.
(MBIA), 0%, 5/1/16 350,462
Aaa AAA 1,000 Vicksburg Community
Schools, Michigan U.T.G.O.
(MBIA), 0%, 5/1/17 234,531
-------------
$ 22,047,143
-------------
</TABLE>
37
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--------------------------------------------------------------------------------
MICHIGAN TAX FREE PORTFOLIO (CONTINUED)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED HOSPITAL - 10.6%
Aaa AAA $3,000 Dearborn City, Michigan
EDC Oakwood Obligated
Group (MBIA), 5.25%,
8/15/14 $ 2,579,610
Aaa AAA 1,000 Dearborn City, Michigan
EDC Oakwood Obligated
Group (MBIA), 5.25%,
8/15/21 834,150
Aaa AAA 3,500 Jackson County, Michigan
HFA W.A. Foote Memorial
(FGIC), 4.75%, 6/1/15 2,821,035
Aaa AAA 1,500 Jackson County, Michigan
HFA W.A. Foote Memorial
(FGIC), 5.25%, 6/1/23 1,253,475
Aaa AAA 5,000 Kalamazoo City, Michigan
HFA Borgess Medical Center
(FGIC), 5.25%, 6/1/17 4,227,150
Aaa AAA 500 Kent City, Michigan HFA
Pine Rest Christian
Hospital (FGIC), 6.50%,
11/1/10 510,610
Aaa AAA 1,750 Kent City, Michigan HFA
Butterworth Hospital
(MBIA), 5.375%, 1/15/19 1,531,670
Aaa AAA 1,015 Michigan HFA Mercy
Memorial Hospital (MBIA),
5.25%, 6/1/13 882,147
Aaa AAA 2,715 Michigan HFA Mercy
Memorial Hospital (MBIA),
5.25%, 6/1/21 2,289,586
Aaa AAA 1,000 Michigan HFA Oakwood
Hospital Obligated Group
(FGIC), 5.625%, 11/1/18 894,760
Aaa AAA 1,500 Michigan HFA Sisters of
Mercy Health Corporation
(MBIA), 5.25%, 8/15/21 1,264,380
Aaa AAA 1,000 St. Joseph City, Michigan
HFA Mercy Memorial Medical
Center (AMBAC), 5.25%,
1/1/16 867,370
-------------
$ 19,955,943
-------------
INSURED HOUSING - 1.6%
Aaa AAA $ 500 Michigan HDA Parkway
Meadows Projects (FSA),
6.85%, 10/15/18 $ 508,260
Aaa AAA 2,780 Michigan HDA Mercy
Bellbrook Project (MBIA),
5.375%, 4/1/10 2,498,469
-------------
$ 3,006,729
-------------
INSURED SPECIAL TAX - 0.2%
Aaa AAA $ 400 Grand Rapids, Michigan
Downtown Development
Authority Tax Increment
(MBIA), 6.875%, 6/1/24 $ 410,868
-------------
INSURED TRANSPORTATION - 1.3%
Aaa AAA $1,000 Wayne County, Michigan
Airport (MBIA), 5.25%,
12/1/13 $ 871,180
Aaa AAA 2,000 Wayne County, Michigan
Airport (MBIA), 5.25%,
12/1/21 1,675,540
-------------
$ 2,546,720
-------------
INSURED WATER & SEWER - 8.0%
Aaa AAA $ 300 Clinton Township, Michigan
Water and Sewage System
(AMBAC), 4.75%, 7/1/09 $ 261,276
Aaa AAA 400 Clinton Township, Michigan
Water and Sewage System
(AMBAC), 4.75%, 7/1/10 344,384
Aaa AAA 400 Clinton Township, Michigan
Water and Sewage System
(AMBAC), 4.75%, 7/1/11 342,268
Aaa AAA 400 Clinton Township, Michigan
Water and Sewage System
(AMBAC), 4.75%, 7/1/12 340,276
Aaa AAA 1,500 Detroit City, Michigan
Sewer Disposal Inflos
(FGIC), Variable, 7/1/23
(1) 1,209,690
Aaa AAA 4,425 Detroit City, Michigan
Water Supply System
(FGIC), 6.25%, 7/1/12 4,401,459
Aaa AAA 6,050 Detroit City, Michigan
Water Supply System
(FGIC), 4.75%, 7/1/19 4,701,516
Aaa AAA 4,350 Detroit City, Michigan
Water Supply System
(FGIC), 5.0%, 5/1/10 3,485,394
-------------
$ 15,086,263
-------------
LEASE/COP - 1.1%
NR A- $2,000 Michigan Strategic Fund
Environmental Institution
Research, 6.375%, 8/15/12 $ 1,969,920
-------------
MISCELLANEOUS - 2.2%
A1 AA $ 590 Michigan Municipal Bond
Authority Local Government
Loan, 6.90%, 5/1/21 $ 623,966
A1 AA 2,550 Michigan Municipal Bond
Authority Local Government
Loan-Qualified School,
6.50%, 5/1/07 2,633,156
A1 AA 760 Michigan Municipal Bond
Authority Local Government
Loan, 6.50%, 5/1/08 781,972
-------------
$ 4,039,094
-------------
SOLID WASTE - 4.5%
NR BBB- $4,220 Greater Detroit, Michigan
Resource Recovery
Authority, 9.25%, 12/13/08 $ 4,410,364
</TABLE>
38
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--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
SOLID WASTE - (CONTINUED)
NR BBB- 1,000 Greater Detroit, Michigan
Resource Recovery
Authority, 9.25%, 12/13/08 1,045,110
NR BBB- 1,915 Greater Detroit, Michigan
Resource Recovery
Authority, 9.25%, 12/13/08 2,001,386
NR BBB- 1,000 Greater Detroit, Michigan
Resource Recovery
Authority, 9.25%, 12/13/08 1,045,110
-------------
$ 8,501,970
-------------
SPECIAL TAX REVENUE - 5.3%
NR A $ 250 Battle Creek, Michigan
Downtown Development
Authority Tax Increment,
7.60%, 5/1/16 $ 256,990
NR A 1,315 Battle Creek, Michigan
Downtown Development
Authority Tax Increment,
7.65%, 5/1/22 1,351,675
NR BBB+ 7,650 Detroit City Convention
Facility, Michigan Cobo
Hall Expansion Project,
5.25%, 9/30/12 (2) 6,518,183
NR BBB+ 1,825 Michigan Muni Bond
Authority Local Government
Loan Project, 6.75%,
5/1/12 1,887,853
-------------
$ 10,014,701
-------------
TRANSPORTATION - 3.3%
NR BBB $1,000 Guam Airport Authority,
6.70%, 10/1/23 $ 961,790
Baa1 A 2,175 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/19 1,877,263
Baa1 A 1,000 Puerto Rico Highway and
Transportation Authority,
5.25%, 7/1/20 830,430
Baa1 A 3,000 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/19 2,483,730
-------------
$ 6,153,213
-------------
WATER & SEWER - 0.9%
Aa AA $1,895 Lansing City, Michigan
Water and Electric Utility
System, 4.90%, 7/1/10 $ 1,617,420
-------------
TOTAL TAX-EXEMPT
INVESTMENTS (IDENTIFIED
COST, $191,744,708) $ 187,436,573
=============
<FN>
(1) The above designated securities have been issued as inverse floater bonds.
(2) At January 31, 1995, the market value of securities segregated to cover
margin requirements on open financial futures contracts amounted to
$15,785,663.
The Portfolio invests primarily in debt securities issued by Michigan
municipalities. The ability of the issuers of the debt securities to meet
their obligations may be affected by economic developments in a specific
industry or municipality. In order to reduce the risk associated with such
economic developments, at January 31, 1995, 44.8% of the securities in the
portfolio of investments are backed by bond insurance of various financial
institutions and financial guaranty assurance agencies. The aggregate
percentage by financial institution ranged from 5.9% to 20.0% of total
investments.
</TABLE>
See notes to financial statements
39
<PAGE> 50
--------------------------------------------------------------------------------
Minnesota Tax Free Portfolio
Portfolio of Investments - January 31, 1995
(Unaudited)
--------------------------------------------------------------------------------
TAX EXEMPT INVESTMENTS - 100%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 1.2%
A1 NR $ 100 Minnesota Higher Education
Facilities Authority, St.
Olaf College, 6.25%, 4/1/10 $ 99,025
Baa NR 1,000 Minnesota Higher Education
Facilities Authority, St.
Mary's College, 6.15%,
10/1/23 906,750
------------
$ 1,005,775
------------
ESCROWED - 5.2%
Aa AA+ $1,700 State of Minnesota "RIBS",
Variable, 8/1/11 (1) $ 1,874,352
A1 AAA 400 Southern Minnesota
Municipal Power Agency,
7.00%, 1/1/16 414,760
Aaa AAA 1,840 Western Minnesota Municipal
Power Agency, 6.375%,
1/1/16 1,866,478
------------
$ 4,155,590
------------
GENERAL OBLIGATIONS - 6.3%
Aaa AAA $ 500 Hennepin County, Minnesota,
5.75%, 10/1/10 $ 481,005
Aaa AAA 700 City of Minneapolis,
Minnesota, 6.25%, 4/1/12 707,693
Aa AA 1,250 State of Minnesota, 5.40%,
8/1/13 1,821,280
Aa AA 1,250 Regents of the University
of Minnesota, General
Obligation, "INFLOS",
Variable, 8/15/03 (1) 1,073,725
A AA- 200 City of Saint Cloud,
Minnesota, "Inverse
Floaters", Variable, 8/1/13
(1) 191,532
Aa AA+ 1,000 Port Authority of the City
of St. Paul, Minnesota,
General Obligation, 5.125%,
3/1/24 840,700
------------
$ 5,115,935
------------
HEALTH CARE (NON-HOSPITAL) - 5.4%
A A- $1,250 Minneapolis and St. Paul
Housing and Redevelopment
Authority, Group Health
Plan, Inc., 6.75%, 12/1/13 $ 1,245,875
A A- 250 Minneapolis and St. Paul
Housing and Redevelopment
Authority, Group Health
Plan, Inc., 6.90%, 10/15/22 252,983
NR NR 1,000 St. Paul Housing and
Redevelopment Authority,
Highland Park, 8.75%,
11/1/24 961,060
NR BBB+ 2,120 City of Red Wing, Minnesota
Health Care Facilities
Revenue, River Region
Obligated Group, 6.50%,
9/1/22 (2) 1,917,391
------------
$ 4,377,309
------------
HOSPITALS - 12.8%
NR A $ 150 City of Bemidji, Minnesota
Hospital Facilities, North
Country Health Services,
7.00%, 9/1/21 $ 152,574
A1 A+ 1,250 City of Breckenridge,
Minnesota Health
Facilities, Catholic Health
Corporation, 5.25%,
11/15/13 1,062,587
A1 A 2,780 City of Edina, Minnesota
Hospital Systems, Fairview
Hospital, 7.125%, 7/1/19
(2) 2,856,394
NR A 1,745 City of Mankato, Minnesota
Hospital Facilities,
Immanuel-Saint Joseph's
Hospital, 7.30%, 8/1/18 1,778,224
NR A- 820 City of Mankato, Minnesota
Hospital Facilities,
Immanuel-Saint Joseph's
Hospital, 6.30%, 8/1/22 740,255
NR AA+ 1,400 City of Rochester,
Minnesota Health Care
Facilities, Mayo
Foundation/Medical Center,
6.026%, 11/15/15 1,356,040
NR AA+ 500 City of Rochester,
Minnesota Health Care
Facilities, Mayo
Foundation/Medical Center,
"Inverse Floaters",
Variable 11/15/15 (1) 463,125
Baa BBB- 1,000 St. Paul Housing and
Redevelopment Authority,
Healtheast Project, 6.625%,
11/1/17 884,320
A A+ 1,000 St. Paul Housing and
Redevelopment Authority,
Healtheast Project, 7.00%,
12/1/19 1,019,892
------------
$ 10,313,411
------------
HOUSING - 18.8%
NR AAA $1,250 City of Burnsville,
Minnesota Multifamily
Housing, Summit Park
Apartments, (FHA), 6.00%,
7/1/33 $ 1,118,750
NR AAA 300 City of Coon Rapids,
Minnesota Multi-Family
Housing, Browns Meadow
Manor, (FHA), (AMT), 6.85%,
8/1/33 290,151
NR AAA 1,395 County of Dakota, Minnesota
Housing and Redevelopment
Authority, (GNMA), 7.375%,
12/1/29 1,448,889
NR AAA 900 City of Eagan, Minnesota
Multi-Family Housing,
Surrey Garden Apartments,
(FHA), 5.55%, 7/1/25 754,155
NR A 100 City of Eden Prairie,
Minnesota Multi-Family
Housing, Windslope
Apartments, 7.10%, 11/1/17 101,818
NR A 1,200 City of Maplewood,
Minnesota Multi-Family
Housing, Beaver Creek
Apartments, 6.50%, 9/1/24 1,141,164
</TABLE>
40
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--------------------------------------------------------------------------------
MINNESOTA TAX FREE PORTFOLIO (CONTINUED)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING - (CONTINUED)
NR AAA 90 Minneapolis and St. Paul
Housing Finance Board,
(GNMA), (AMT), 7.30%,
8/1/31 92,921
NR A+ 1,000 Minnesota Housing Finance
Agency, Rental Housing,
6.00%, 2/1/14 924,400
Aa AA 420 Minnesota Housing Finance
Agency, Single-Family
Mortgage, 7.70%, 7/1/1 447,560
Aa AA 380 Minnesota Housing Finance
Agency, Single-Family
Mortgage, 7.05%, 7/1/2 385,233
Aa AA 2,250 Minnesota Housing Finance
Agency, Single-Family
Mortgage, (AMT), 5.80%,
7/1/25 1,988,348
A1 A+ 550 Minnesota Housing Finance
Agency, Housing
Development, 6.85%, 2/1/07 570,136
Aa AA+ 465 Minnesota Housing Finance
Agency, Single-Family
Mortgage, 6.95%, 7/1/1 474,212
Aa AA+ 1,000 Minnesota Housing Finance
Agency, Single-Family
Mortgage, (AMT), 6.75%,
7/1/12 1,003,350
Aa AA+ 1,235 Minnesota Housing Finance
Agency, Single-Family
Mortgage, (AMT), 6.85%,
1/1/24 1,234,877
Aa AA+ 1,000 Minnesota Housing Finance
Agency, Single-Family
Mortgage, (AMT), 6.50%,
1/1/26 955,190
Aa AA+ 1,500 Minnesota Housing Finance
Agency, Single-Family
Mortgage, (AMT), 5.65%,
7/1/22 1,278,615
Aa AA+ 430 Minnesota Housing Finance
Agency, Single-Family
Mortgage, (AMT), 6.15%,
1/1/26 391,502
NR AAA 240 St. Paul, Minnesota Housing
and Redevelopment
Authority, (FNMA), 6.95%,
12/1/31 242,959
NR AAA 375 St. Paul, Minnesota Housing
and Redevelopment
Authority, (FNMA), 6.90%,
12/1/21 379,630
------------
$ 15,223,860
------------
INDUSTRIAL DEVELOPMENT/POLLUTION
CONTROL - 5.8%
NR BBB+ $ 350 City of Apple Valley,
Minnesota Industrial
Development Revenue, Kmart
Corporation Project, 6.50%,
10/1/08 $ 329,753
NR AA- 300 City of Minneapolis,
Minnesota Community
Development Agency, 6.40%,
12/1/04 306,228
NR BBB+ 100 City of Minneapolis,
Minnesota Community
Development Agency, 7.35%,
12/1/09 102,854
Aa3 AA- 3,000 Seaway Port Authority of
Duluth, Minnesota, Cargill,
Inc., 6.80%, 5/1/12 3,071,790
Aa3 NR 1,000 Seaway Port Authority of
Duluth, Minnesota, Cargill,
Inc., 5.75%, 12/1/16 883,440
------------
$ 4,694,065
------------
INSURED GENERAL OBLIGATION - 3.4%
Aaa AAA $1,000 Anoka-Hennepin Independent
School District No. 11,
Coon Rapids, Minnesota,
(FGIC), 5.00%, 2/1/10 $ 883,070
Aaa AAA 500 Cass Lake, Minnesota
Independent School
District, (AMBAC), 6.625%,
2/1/12 518,550
Aaa AAA 1,330 St. Francis, Minnesota
Independent School District
No. 15, (FGIC), 6.35%,
2/1/12 1,349,923
------------
$ 2,751,543
------------
INSURED HOSPITALS - 18.1%
Aaa AAA $ 750 Duluth Economic Development
Authority, The Duluth
Clinic, (AMBAC), 6.20%,
11/1/12 $ 748,313
Aaa AAA 100 Minneapolis and St. Paul
Health Care Systems, Health
One Obligated Group,
(MBIA), 7.40%, 8/15/11 107,304
Aaa AAA 6,095 Minneapolis and St. Paul
Health Care Systems,
Healthspan, (AMBAC), 4.75%,
11/15/18 4,799,752
Aaa AAA 250 City of Minneapolis,
Minnesota Hospital Revenue,
Fairview Hospital and
Healthcare, (MBIA), 6.50%,
1/1/11 255,050
Aaa AAA 1,000 City of Saint Cloud,
Minnesota Hospital
Facilities, The Saint Cloud
Hospital, (AMBAC), 6.75%,
7/1/15 1,030,230
Aaa AAA 3,650 City of St. Louis Park,
Minnesota, Health Care
Facilities HealthSystem
Minnesota Obligated Group,
(AMBAC), 5.20%, 7/1/23 3,050,706
</TABLE>
41
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MINNESOTA TAX FREE PORTFOLIO (CONTINUED)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED HOSPITALS - (CONTINUED)
Aaa AAA 5,250 St. Paul Housing and
Redevelopment Authority,
St. Paul-Ramsey Medical
Center Project, (AMBAC),
5.55%, 5/15/23 4,632,390
------------
$ 14,623,745
------------
INSURED HOUSING - 1.9%
Aaa AAA $1,500 SCA Tax Exempt Trust,
Burnsville, Minnesota
Multi-Family Housing,
(FSA), 7.10%, 1/1/30 $ 1,511,820
------------
INSURED SPECIAL TAX - 2.2%
Aaa AAA $2,000 St. Paul Housing and
Redevelopment Authority,
Civic Center Project,
(MBIA), 5.45%, 11/1/13 $ 1,768,240
------------
INSURED TAX ALLOCATION - 1.4%
Aaa AAA $1,275 St. Paul Housing and
Redevelopment Authority,
Downtown and Seventh Place
Project, (AMBAC), 5.40%,
9/1/08 $ 1,157,241
------------
INSURED UTILITIES - 3.7%
Aaa AAA $ 300 Northern Municipal Power
Agency, (AMBAC), 6.00%,
1/1/19 $ 287,508
Aaa AAA 750 Southern Minnesota
Municipal Power Agency,
(MBIA), 5.00%, 1/1/12 647,333
Aaa AAA 300 Southern Minnesota
Municipal Power Agency,
"Yield Curve Notes",
(MBIA), Variable, 1/1/18(1) 258,930
Aaa AAA 6,950 Southern Minnesota
Municipal Power Agency,
(MBIA), 0%, 1/1/21 1,332,454
Aaa AAA 510 Western Minnesota Municipal
Power Agency, (MBIA),
5.50%, 1/1/15 466,746
------------
$ 2,992,971
------------
LEASE/CERTIFICATE OF
PARTICIPATION - 2.7%
Baa1 NR $ 350 City of Cambridge,
Minnesota Economic
Development Authority,
6.25%, 2/1/14 $ 331,062
Aa AA 1,770 Hennepin County, Minnesota
Lease Revenue Certificates
of Participation, 6.80%,
5/15/17 1,816,958
------------
$ 2,148,020
------------
MISCELLANEOUS - 0.9%
A A $ 750 Metropolitan Council,
Minneapolis-St. Paul
Metropolitan Area Sports
Facilities, Hubert H.
Humphrey Metrodome, 6.00%,
10/1/09 $ 728,603
------------
SPECIAL TAX - 1.6%
A A $1,500 St. Paul Housing and
Redevelopment Authority,
Civic Center Project,
5.55%, 11/1/23 $ 1,303,290
------------
TRANSPORTATION - 0.6%
Aaa AAA $ 200 Minneapolis and St. Paul,
Minnesota Metropolitan
Airports Commission, (AMT),
6.60%, 1/1/09 $ 206,796
Aaa AAA 300 Minneapolis and St. Paul,
Minnesota Metropolitan
Airports Commission, (AMT),
6.60%, 1/1/10 310,194
------------
$ 516,990
------------
UTILITY - 6.3%
Aa3 A+ $ 500 City of Becker, Minnesota
Pollution Control Revenue,
Northern States Power
Company, 6.80%, 4/1/07 $ 517,670
A A 1,500 Northern Minnesota
Municipal Power Agency,
7.25%, 1/1/16 1,589,640
A1 A+ 2,115 Southern Minnesota
Municipal Power Agency,
4.75%, 1/1/16 1,676,645
A1 A+ 1,000 Southern Minnesota
Municipal Power Agency,
5.00%, 1/1/12 850,190
A A 450 Western Minnesota Municipal
Power Agency, 7.00%, 1/1/13 460,393
------------
$ 5,094,538
------------
WATER & SEWER - 1.7%
Aa3 A $ 450 Anoka County, Minnesota
Solid Waste Disposal
Revenue Natural Rural
Utilities, 6.95%, 12/1/08 $ 471,119
Aa AAA 100 Minnesota Public Facilities
Authority Water Pollution
Control, 7.00%, 3/1/09 105,276
</TABLE>
42
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--------------------------------------------------------------------------------
MINNESOTA TAX FREE PORTFOLIO (CONTINUED)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WATER & SEWER - (CONTINUED)
Aa AAA 150 Minnesota Public Facilities
Authority Water Pollution
Control, 6.70%, 3/1/13 156,041
Aa AAA 650 Minnesota Public Facilities
Authority Water Pollution
Control, 6.50%, 3/1/14 662,876
------------
$ 1,395,312
------------
TOTAL TAX-EXEMPT
INVESTMENTS (IDENTIFIED
COST $83,080,772) $ 80,878,258
============
<FN>
(1) The above designated securities have been issued as inverse floater bonds.
(2) At January 31, 1995, the market value of securities segregated to cover
margin requirements on open financial futures contracts amounted to
$4,773,785.
The Portfolio primarily invests in debt securities issued by Minnesota
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1995, 30.7% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 1.1% to 20.1% of total investments.
</TABLE>
See notes to financial statements
43
<PAGE> 54
--------------------------------------------------------------------------------
NEW JERSEY TAX FREE PORTFOLIO
PORTFOLIO OF INVESTMENTS - JANUARY 31, 1995
(UNAUDITED)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
COGENERATION - 4.0%
NR NR $15,600 New Jersey Economic
Development Authority,
Vineland Cogeneration
Limited Partnership,
(AMT), 7.875%, 6/1/19 (2) $ 15,878,928
-------------
EDUCATION - 3.3%
Baa1 BBB $ 2,480 New Jersey Educational
Facilities Authority,
Seton Hall University,
7.00%, 7/1/21 $ 2,552,614
Aa1 AA+ 1,000 New Jersey Educational
Facilities Authority,
Princeton Theological
Seminary, 6.375%, 7/1/22 1,004,470
NR NR 8,800 New Jersey State Higher
Education Assistance
Authority, (AMT), 0%,
7/1/20 2,781,680
NR BBB- 1,760 Puerto Rico Industrial,
Tourist, Educational,
Medical and Environmental
Authority, Polytechnic
University, 5.70%, 8/1/13 1,519,848
NR BBB- 675 Puerto Rico Industrial,
Tourist, Educational,
Medical and Environmental
Authority, Polytechnic
University, 5.50%, 8/1/24 547,236
NR BBB- 1,000 Puerto Rico Industrial,
Tourist, Educational,
Medical and Environmental
Authority, Polytechnic
University, 6.50%, 8/1/24 937,940
A1 AA 2,500 Rutgers, The State
University of New Jersey,
6.85%, 5/1/21 2,617,975
A AA 1,000 University of Medicine and
Dentistry of New Jersey,
7.20%, 12/1/19 1,060,160
-------------
$ 13,021,923
-------------
ESCROWED - 0.8%
Aaa AAA $ 870 The City of Newark, New
Jersey, (AMBAC), 7.375%,
10/1/07 $ 953,320
NR NR 2,000 County of Passaic, New
Jersey, 6.70%, 9/1/13 2,126,880
-------------
$ 3,080,200
-------------
GENERAL OBLIGATIONS - 8.8%
NR BBB $ 9,745 Government of Guam, 5.40%,
11/15/18 $ 7,931,163
NR A+ 5,000 The Hudson County
Improvement Authority,
6.625%, 8/1/25 5,103,850
Aa1 NR 3,000 Mercer County Improvement
Authority Solid Waste, 0%,
4/1/10 1,148,340
Aa1 AAA 3,500 New Jersey Economic
Development Authority,
Public Schools, 5.40%,
8/15/11 3,176,005
Aa1 AAA 1,440 New Jersey Economic
Development Authority
Public Schools, 5.40%,
8/15/13 1,308,240
Baa1 A 3,000 Commonwealth of Puerto
Rico, 5.50%, 7/1/13 2,686,410
Baa BBB 5,645 The Commonwealth of Puerto
Rico Aqueduct and Sewer
Authority, 7.875%, 7/1/17 6,099,647
Baa1 A 3,250 Puerto Rico Public
Buildings Authority,
Public Education and
Health Facilities, 5.75%,
7/1/15 2,962,798
Baa1 A 3,125 Puerto Rico Public
Buildings Authority,
Public Education and
Health Facilities, 5.50%,
7/1/21 2,708,188
Baa1 A 2,075 Puerto Rico Public
Buildings Authority,
Public Education and
Health Facilities, 5.75%,
7/1/16 1,880,780
-------------
$ 35,005,421
-------------
HEALTH CARE (NON-HOSPITAL) - 2.1%
NR BBB $ 615 New Jersey Economic
Development Authority
Cadbury Corporation,
7.50%, 7/1/21 $ 529,533
NR BBB 300 New Jersey Economic
Development Authority
Cadbury Corporation,
8.70%, 7/1/07 296,163
NR NR 1,400 New Jersey Economic
Development Authority,
Claremont Health System,
9.10%, 9/1/22 1,418,102
</TABLE>
44
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--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
HEALTH CARE (NON-HOSPITAL) - (CONTINUED)
NR NR 2,500 New Jersey Economic
Development Authority,
Victoria Health
Corporation, 7.65%, 1/1/14 2,267,050
NR NR 4,000 New Jersey Economic
Development Authority,
Keswick Pines Project,
8.75%, 1/1/24 3,845,480
-------------
$ 8,356,328
-------------
HOSPITALS - 7.4%
Aa AA- $ 500 New Jersey Health Care
Facilities Financing
Authority, Cathedral
Health Services, (FHA),
7.25%, 2/15/10 $ 525,370
Aa AA- 1,330 New Jersey Health Care
Facilities Financing
Authority, Cathedral
Health Services, (FHA),
7.25%, 2/15/21 1,394,093
Aa AAA 10,790 New Jersey Health Care
Facilities Financing
Authority, Barnert
Hospital, (FHA), 6.80%,
8/1/19 11,049,500
A A- 2,300 New Jersey Health Care
Facilities Financing
Authority, Atlantic City
Medical Center, 6.80%,
7/1/11 2,326,818
Baa1 NR 2,100 New Jersey Health Care
Facilities Financing
Authority, Deborah Heart
and Lung Center, 6.30%,
7/1/23 1,914,780
Baa NR 2,200 New Jersey Health Care
Facilities Financing
Authority, Southern Ocean
County Hospital, 5.75%,
7/1/01 2,109,008
Baa NR 2,000 New Jersey Health Care
Facilities Financing
Authority, Southern Ocean
County Hospital, 6.25%,
7/1/23 1,739,020
A A- 10,150 New Jersey Health Care
Facilities Financing
Authority, Chilton
Memorial Hospital, 5.00%,
7/1/13 8,321,274
-------------
$ 29,379,863
-------------
HOUSING - 4.8%
Aa AA $ 1,250 New Jersey Building
Authority, 7.20%, 6/15/13 $ 1,339,850
Aa AA- 750 New Jersey Building
Authority, Garden State
Savings, 0%, 6/15/09 318,758
Aa AA- 2,591 New Jersey Building
Authority, Garden State
Savings, 0%, 6/15/10 1,022,124
NR AAA 3,700 New Jersey Housing and
Mortgage Finance Agency,
Presidential Plaza, (FHA),
7.00%, 5/1/30 3,769,486
NR AAA 2,000 New Jersey Housing and
Mortgage Finance Agency,
Presidential Plaza, (FHA),
6.95%, 5/1/13 2,050,940
NR AA+ 1,000 New Jersey Housing and
Mortgage Finance Agency,
Section 8, 7.10%, 11/1/12 1,038,690
NR AA+ 1,975 New Jersey Housing and
Mortgage Finance Agency,
Section 8, 7.10%, 11/1/11 2,058,088
NR AA+ 1,250 New Jersey Housing and
Mortgage Finance Agency,
Rental Housing, (AMT),
7.25%, 11/1/22 1,284,037
NR A+ 1,000 New Jersey Housing and
Mortgage Finance Agency,
Rental Housing, (AMT),
7.10%, 5/1/22 1,019,480
NR A+ 3,965 New Jersey Housing and
Mortgage Finance Agency,
6.60%, 11/1/14 3,975,745
Aaa AAA 300 Puerto Rico Housing
Finance Corporation
Mortgage Revenue (GNMA),
6.85%, 10/15/23 305,058
Aaa AAA 1,000 Puerto Rico Housing
Finance Corporation
Mortgage Revenue "BULL"
Floaters (GNMA), (AMT),
Variable, 8/1/16 (1) 1,001,840
-------------
$ 19,184,096
-------------
INDUSTRIAL DEVELOPMENT/
POLLUTION CONTROL - 6.6%
NR NR $ 2,000 Middlesex County Pollution
Control Financing
Authority, Amerada Hess
Corporation, 7.875%,
6/1/22 $ 2,139,760
NR NR 4,000 Middlesex County Pollution
Control Financing
Authority, Amerada Hess
Corporation, 6.875%,
12/1/22 3,953,040
Baa1 BBB+ 1,500 New Jersey Economic
Development Authority,
General Motors
Corporation, 5.35%, 4/1/09 1,339,260
Aa1 NR 3,000 New Jersey Economic
Development Authority,
Garden State Paper
Company, (AMT), 7.125%,
4/1/22 3,061,140
</TABLE>
45
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NEW JERSEY TAX FREE PORTFOLIO (CONTINUED)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
INDUSTRIAL DEVELOPMENT/
POLLUTION CONTROL - (CONTINUED)
NR NR 2,000 New Jersey Economic
Development Authority, The
Seeing Eye, Inc., 7.30%,
4/1/11 2,040,240
NR BBB 1,160 New Jersey Economic
Development Authority,
National Association of
Accountants, Inc. 7.65%,
7/1/09 1,191,238
NR AA- 3,300 New Jersey Economic
Development Authority, Oak
Grove Associates, 6.125%,
12/1/06 3,246,606
NR BBB- 3,370 New Jersey Economic
Development Authority,
Trigen-Trenton Project,
(AMT), 6.10%, 12/1/04 3,218,856
A1 A+ 5,500 New Jersey Economic
Development Authority,
Economic Recovery Fund,
0%, 3/15/13 1,700,325
A1 A+ 1,650 New Jersey Economic
Development Authority,
Economic Recovery Fund,
0%, 9/15/09 649,160
Baa1 A- 2,135 New Jersey Economic
Development Authority,
GATX Terminals
Corporation, 7.30%, 9/1/19 2,252,617
Aa3 AA- 1,300 Puerto Rico Industrial,
Medical and Environmental
Pollution Control
Authority, Motorola, Inc.,
6.75%, 1/1/14 1,356,875
-------------
$ 26,149,117
-------------
INSURED EDUCATION - 0.5%
Aaa AAA $ 2,000 New Jersey State
Educational Facilities
Authority, Seton Hall
University, (BIGI), 6.85%,
7/1/19 $ 2,064,460
-------------
INSURED GENERAL OBLIGATION - 0.3%
Aaa AAA $ 1,000 Jackson Township Board of
Education, (FGIC), 6.60%,
6/1/09 $ 1,046,200
-------------
INSURED HOSPITAL - 0.5%
Aaa AAA $ 2,000 New Jersey Health Care
Facilities Financing
Authority, Hackensack
Medical Center, (FGIC),
6.25%, 7/1/21 $ 1,969,360
-------------
INSURED HOUSING - 2.0%
Aaa AAA $ 3,090 New Jersey Housing and
Mortgage Finance Agency,
(AMT), (MBIA), 5.50%,
10/1/26 $ 2,622,730
Aaa AAA 1,410 New Jersey Housing and
Mortgage Finance Agency,
(MBIA), 7.375%, 10/1/17 1,454,880
Aaa AAA 1,765 New Jersey Housing and
Mortgage Finance Agency,
(AMT), (MBIA), 7.70%,
10/1/29 1,837,136
Aaa AAA 1,795 Pennsauken Township
Housing Finance
Corporation, (MBIA),
8.00%, 4/1/11 1,888,304
-------------
$ 7,803,050
-------------
INSURED LEASE REVENUE - 4.6%
Aaa AAA $ 3,900 County of Atlantic, New
Jersey, Public Facilities
Lease Agreement, (FGIC),
6.00%, 3/1/13 $ 3,815,721
Aaa AAA 1,750 County of Hudson, New
Jersey Correctional
Facility, (MBIA), 6.50%,
12/1/11 1,790,705
Aaa AAA 6,240 County of Hudson, New
Jersey Correctional
Facility, (MBIA), 6.60%,
12/1/21 6,341,837
Aaa AAA 2,500 County of Hudson, New
Jersey Improvement
Authority, Secondary Yield
Curve Notes, (FGIC),
Variable, 12/1/25 (1) 2,289,475
Aaa AAA 1,800 County of Middlesex, New
Jersey Certificates of
Participation, (MBIA),
6.125%, 2/15/19 1,754,712
Aaa AAA 2,225 University of Medicine and
Dentistry Certificates of
Participation, (MBIA),
6.75%, 12/1/09 2,313,199
-------------
$ 18,305,649
-------------
INSURED SOLID WASTE - 0.5%
Aaa AAA $ 2,000 The Mercer County
Improvement Authority,
Solid Waste Revenue,
(AMT), (FGIC), 6.70%,
4/1/13 $ 2,068,820
-------------
INSURED SPECIAL TAX - 0.8%
Aaa AAA $ 3,375 New Jersey Economic
Development Authority,
Market Transition
Facility, (MBIA), 5.875%,
7/1/11 $ 3,279,724
-------------
</TABLE>
46
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--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED TRANSPORTATION - 10.1%
Aaa AAA $ 2,250 The Delaware River and Bay
Authority, (MBIA), 5.00%,
1/1/17 $ 1,874,588
Aaa AAA 16,010 The Delaware River and Bay
Authority, (MBIA), 4.75%,
1/1/24 12,497,566
Aaa AAA 10,000 New Jersey Transportation
Trust Fund Authority,
Linked RITES, (FSA),
4.75%, 6/15/03 9,255,400
Aaa AAA 5,000 New Jersey Turnpike
Authority "RITES", (MBIA),
Variable, 1/1/16 (1) 5,354,150
A A 10,450 New Jersey Turnpike
Authority, 6.50%, 1/1/16 10,801,224
-------------
$ 39,782,928
-------------
INSURED UTILITIES - 1.6%
Aaa AAA $ 6,250 New Jersey Economic
Development Authority, New
Jersey American Water Co.,
(AMT), (FGIC), 6.875%,
11/1/34 $ 6,337,000
-------------
INSURED WATER & SEWER - 4.6%
Aaa AAA $ 6,500 Landis New Jersey Sewerage
Authority, Linked "CARS",
5.65% , 9/19/19 $ 6,024,525
Aaa AAA 2,500 Middlesex County Utilities
Authority, Sewer Revenue
(MBIA), Variable, 8/15/10
(1) 2,496,475
Aaa AAA 2,590 Township of Monroe, New
Jersey Municipal Utilities
Authority, (MBIA), 5.50%,
2/1/17 2,319,708
Aaa AAA 3,150 New Jersey Economic
Development Authority,
Hackensack Water Company,
(MBIA), 5.80%, 3/1/24 2,878,690
Aaa AAA 850 Passaic Valley Water
Commissioners, (FGIC),
5.00%, 12/15/22 693,320
Aaa AAA 4,500 West New York, New Jersey
Municipal Utilities
Authority, (FGIC), 5.125%,
12/15/17 3,787,110
-------------
$ 18,199,828
-------------
LEASE/CERTIFICATE OF
PARTICIPATION - 4.6%
Baa1 A- $ 720 County of Atlantic, New
Jersey Public Facilities
Lease Agreement, 8.875%,
1/15/14 $ 891,057
Baa1 A- 785 County of Atlantic, New
Jersey Public Facilities
Lease Agreement, 8.875%,
1/15/15 971,281
A1 NR 1,000 Township of Bedminster,
New Jersey Board of
Education, 7.125%, 9/1/10 1,074,120
Aa AA- 1,000 Mercer County Improvement
Authority, Richard J.
Hughes Justice Complex,
6.05%, 1/1/14 962,920
Aa AA- 2,000 Mercer County Improvement
Authority, Richard J.
Hughes Justice Complex,
6.05%, 1/1/15 1,923,860
Aa AA- 1,500 Mercer County Improvement
Authority, Richard J.
Hughes Justice Complex,
6.05%, 1/1/16 1,441,500
Aa AA- 1,500 Mercer County Improvement
Authority, Richard J.
Hughes Justice Complex,
6.05%, 1/1/17 1,440,195
Aa AA- 5,000 New Jersey Building
Authority, 5.00%, 6/15/13 4,259,550
Aa AA- 2,095 New Jersey Building
Authority, 5.00%, 6/15/16 1,749,493
NR A+ 1,000 New Jersey Economic
Development Authority,
Performing Arts Center
Site Acquisition, 6.75%,
6/15/12 1,022,270
Baa BBB 3,000 Puerto Rico Housing Bank
and Finance Agency, 5.25%,
12/1/06 2,650,680
-------------
$ 18,386,926
-------------
MISCELLANEOUS - 2.3%
NR NR $ 6,000 New Jersey Sports and
Exposition Authority,
Monmouth Park, 8.00%,
1/1/25 $ 6,086,520
Aa A+ 3,500 New Jersey Sports and
Exposition Authority,
5.20%, 1/1/20 3,003,455
-------------
$ 9,089,975
-------------
SOLID WASTE - 7.1%
Baa NR $ 3,655 The Atlantic County
Utilities Authority, Solid
Waste Revenue, 7.125%,
3/1/16 $ 3,625,212
Baa1 BBB+ 6,125 Pollution Control
Financing Authority of
Camden County, (AMT),
7.50%, 12/1/09 5,922,569
Baa1 NR 5,975 Mercer County Improvement
Authority, Solid Waste
System Revenue (AMT), 0%,
4/1/14 1,308,465
Baa1 NR 6,000 Mercer County Improvement
Authority, Solid Waste
System Revenue (AMT), 0%,
4/1/15 1,213,740
</TABLE>
47
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NEW JERSEY TAX FREE PORTFOLIO (CONTINUED)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
SOLID WASTE - (CONTINUED)
Baa1 NR 3,000 Mercer County Improvement
Authority, Solid Waste
System Revenue (AMT), 0%,
4/1/16 560,610
Baa1 NR 1,500 Passaic County Utilities
Authority Solid Waste
System Revenue, 7.00%,
11/15/07 1,537,635
NR A- 13,930 Union County, New Jersey
Utilities Authority, Solid
Waste Revenue, (AMT),
7.20%, 6/15/14 14,041,161
-------------
$ 28,209,392
-------------
SPECIAL TAX - 3.0%
Baa1 BBB+ $ 550 Puerto Rico Infrastructure
Financing Authority,
7.90%, 7/1/07 $ 592,774
NR NR 11,350 Virgin Islands Public
Finance Authority, 7.25%,
10/1/18 11,442,275
-------------
$ 12,035,049
-------------
TRANSPORTATION - 13.3%
NR BBB $ 1,400 Guam Airport Authority,
6.50%, 10/1/23 $ 1,337,000
NR BBB 2,000 Guam Airport Authority,
(AMT), 6.70%, 10/1/23 1,923,580
A1 AA- 4,400 The Port Authority of New
York and New Jersey,
6.875%, 1/1/25 4,522,100
A1 AA- 9,500 The Port Authority of New
York and New Jersey,
7.35%, 10/1/27 (2) 10,120,445
A1 AA- 2,645 The Port Authority of New
York and New Jersey,
6.75%, 8/1/26 2,699,619
A1 AA- 5,000 The Port Authority of New
York and New Jersey,
(AMT), 6.25%, 1/15/27 4,793,500
A1 AA- 5,000 The Port Authority of New
York and New Jersey,
6.125%, 6/1/2094 4,740,600
A1 AA- 5,000 The Port Authority of New
York and New Jersey,
5.375%, 3/1/28 4,304,750
Baa1 BB 4,500 The Port Authority of New
York and New Jersey, Delta
Air Lines Inc., 6.95%,
6/1/08 4,457,070
A1 AA- 1,000 New Jersey State Highway
Authority, Garden State
Parkway, 5.75%, 1/1/19 924,340
Baa1 A 3,000 Puerto Rico Highway and
Transportation Authority,
5.00%, 7/1/22 2,382,570
Baa1 A 1,500 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/13 1,327,035
Baa3 BB+ 1,700 Puerto Rico Port
Authority, American
Airlines, (AMT), 6.30%,
6/1/23 1,499,297
NR A+ 1,115 South Jersey Port
Corporation, New Jersey
Marine Terminal, 6.875%,
1/1/20 1,139,497
NR AA 2,450 South Jersey Port
Corporation, New Jersey
Marine Terminal, (AMT),
5.75%, 1/1/13 2,284,013
NR AA 4,270 South Jersey Port
Corporation, New Jersey
Marine Terminal, 5.60%,
1/1/23 3,807,730
-------------
$ 52,263,146
-------------
UTILITY - 4.2%
NR BBB $ 3,925 Guam Power Authority,
6.30%, 10/1/22 $ 3,662,928
NR BBB 100 Guam Power Authority,
5.25%, 10/1/13 82,825
NR BBB 2,000 Guam Power Authority,
6.75%, 10/1/24 1,972,020
A3 BBB+ 625 New Jersey Economic
Development Authority,
Elizabethtown Gas Co.,
(AMT), 6.75%, 10/1/21 609,850
A2 A 1,455 New Jersey Economic
Development Authority,
Natural Gas Facilities,
(AMT), 7.05%, 3/1/16 1,525,989
Baa1 A- 3,000 Puerto Rico Electric Power
Authority, 7.00%, 7/1/07 3,122,970
Baa1 A- 460 Puerto Rico Electric Power
Authority, 7.125%, 7/1/14 477,444
NR NR 5,105 Virgin Islands Water and
Power Authority, Electric
System Revenue, 7.40%,
7/1/11 5,267,441
-------------
$ 16,721,467
-------------
WATER & SEWER - 2.2%
A1 AA- $ 2,000 Gloucester County
Utilities Authority,
6.50%, 1/1/21 $ 2,007,160
A3 A 3,250 New Jersey Economic
Development Authority,
Elizabethtown Water
Revenue, (AMT), 6.70%,
8/1/21 3,268,688
Aa AA 1,400 New Jersey Wastewater
Treatment Trust, 7.25%,
5/15/08 1,497,034
Aa AA 1,000 New Jersey Wastewater
Treatment Trust, 6.875%,
6/15/09 1,052,160
Aa AA 250 New Jersey Wastewater
Treatment Trust, 7.00%,
6/15/10 263,862
</TABLE>
48
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--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
WATER & SEWER - (CONTINUED)
A1 AA 500 The Somerset Raritan
Valley Sewerage Authority
6.75%, 7/1/10 519,685
-------------
$ 8,608,589
-------------
TOTAL TAX-EXEMPT
INVESTMENTS (IDENTIFIED
COST, $400,119,549) $ 396,227,439
=============
<FN>
(1) The above designated securities have been issued as inverse floater bonds.
(2) At January 31, 1995, the market value of securities segregated to cover
margin requirements on open financial futures contracts amounted to
$25,999,373.
The Portfolio primarily invests in debt securities issued by New Jersey
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1995, 25.5% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 0.2% to 15.5% of total investments.
</TABLE>
See notes to financial statements.
49
<PAGE> 60
--------------------------------------------------------------------------------
Pennsylvania Tax Free Portfolio
Portfolio of Investments - January 31, 1995
(Unaudited)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
COGENERATION - 4.0%
NR NR $12,000 Pennsylvania Economic
Development Authority,
Northampton Generating
Project, 6.50%, 1/1/13 $ 10,708,200
NR BBB- 9,000 Pennsylvania Economic
Development Authority,
Colver Project, 7.125%,
12/1/16 8,636,670
-------------
$ 19,344,870
-------------
EDUCATION - 5.1%
NR BBB $ 4,865 Erie Higher Education
Building Authority,
Mercyhurst College, 5.75%,
3/15/20 $ 4,185,992
Baa1 NR 1,500 Latrobe, Saint Vincent
College, 6.75%, 5/1/24 1,475,355
NR AAA 2,000 Lehigh County, Allentown
College of St. Francis,
6.75%, 12/15/12 2,081,920
Aa AA 3,700 Pennsylvania, University
of Pennsylvania, 6.625%,
1/1/17 3,719,572
NR A- 4,225 Scranton-Lackawanna,
Pennsylvania University,
University of Scranton,
6.40%, 3/1/07 4,193,228
NR AA 9,700 Swarthmore Borough,
Swarthmore College, 6.00%,
9/15/20 9,121,007
-------------
$ 24,777,074
-------------
ESCROWED - 4.0%
Aaa AAA $ 5,600 Berks County, GO, (FGIC),
Variable, 11/15/20 (1) $ 5,973,464
NR A- 1,750 Chester County, HEFA, Bryn
Mar Hospitals, 6.75%,
7/1/14 1,899,240
Aaa AAA 5,195 Derry Township School
District, GO, (AMBAC),
6.20%, 9/1/08 5,353,655
Aaa AAA 2,000 Doylestown Hospital
Authority, Doylestown
Hospital, (AMBAC), 6.90%,
7/1/19 2,147,600
Aaa AAA 1,405 County of Lycoming, GO,
(FGIC), 6.40%, 8/15/11 1,473,494
Aaa AAA 945 County of Lycoming, GO,
(FGIC), 6.40%, 8/15/11 991,069
NR A- 1,000 Pennsylvania, HEFA,
Elizabeth College, 7.25%,
6/15/11 1,101,190
Aaa AAA 500 York County Hospital
Authority, York Hospital,
(AMBAC), 7.00%, 7/1/21 544,575
-------------
$ 19,484,287
-------------
GENERAL OBLIGATIONS - 4.8%
NR A $ 4,725 Chester Upland School
District, 6.375%, 9/1/12 $ 4,692,681
NR A 3,000 Chester Upland School
District, 6.375%, 9/1/21 2,915,760
A1 AA- 465 Commonwealth of
Pennsylvania, 6.75%,
1/1/07 487,469
A1 AA- 500 Commonwealth of
Pennsylvania, 6.75%,
1/1/08 522,890
A1 AA- 5,435 Commonwealth of
Pennsylvania, 6.50%,
11/1/09 5,572,071
A1 AA- 2,000 Commonwealth of
Pennsylvania, 6.375%,
9/15/12 2,010,920
NR A 3,000 Dauphin County, 6.90%,
6/2/26 3,095,010
A1 A+ 2,050 Lower Providence Township
Sewer Authority
Guaranteed, 6.75%, 5/1/22 2,088,376
NR A 1,950 McKeesport Area School
District, 5.00%, 4/1/13 1,662,960
-------------
$ 23,048,137
-------------
HOSPITALS - 24.8%
NR AAA $ 2,500 Allegheny County, IDA,
Presbyterian Medical
Center, 6.75%, 2/1/26 $ 2,474,325
NR A- 4,000 Butler County IDA,
Sherwood Oaks, 5.75%,
6/1/16 3,311,960
NR AA- 12,000 Chester County, HEFA,
(Main Line Health System),
5.50%, 5/15/15(4) 10,295,880
Baa1 BBB 2,000 Dauphin County Hospital
Authority, Community
General Osteopathic
Hospital, 7.375%, 6/1/16 2,012,380
NR A- 10,250 Delaware County, Riddle
Memorial Hospital, 6.50%,
1/1/22 9,168,010
NR NR 4,880 Hazelton Luzerne County,
Saint Joseph Medical
Center, 8.375%, 7/1/12 4,868,239
Baa1 NR 2,670 Indiana County Hospital
Authority, Indiana
Hospital, 7.125%, 7/1/23 2,531,774
NR BBB+ 3,500 Lebanon County, Good
Samaritan Hospital, 6.00%,
11/15/18 2,944,795
Baa1 A 3,250 Lehigh County, Muhlenberg
Hospital, 6.60%, 7/15/22 3,017,820
NR BBB- 5,405 McKean County Hospital
Authority, Bradford
Hospital, 6.10%, 10/1/20 4,341,566
NR BBB+ 2,615 Montgomery County,
Pottstown Medical Center,
6.875%, 11/15/20 2,432,133
</TABLE>
50
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--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOSPITALS - (CONTINUED)
Aa AA- 500 Pennsylvania HEFA,
Allegheny General
Hospital, 7.25%, 9/1/17 519,980
A BBB+ 8,500 Philadelphia Hospital and
Higher Education
Facilities Authority,
Albert Einstein Medical
Center, 7.625%, 4/1/11 8,898,565
Baa1 BBB+ 1,500 Philadelphia Hospitals and
Higher Education
Facilities, Graduate
Health System, 6.625%,
7/1/21 1,349,895
Baa1 BBB+ 11,000 Philadelphia, Hospitals
and Higher Education
Facility Authority,
Graduate Hospital, 7.25%,
7/1/18 10,721,260
Aa AA 4,500 Philadelphia, Hospitals
and Higher Education
Facility Authority,
Children's Hospital,
5.50%, 2/15/22 3,819,870
NR A- 5,155 The Hospitals and Higher
Education Facilities
Authority of Philadelphia,
Presbyterian Medical
Center, 6.50%, 12/1/11 4,853,433
Baa1 BBB+ 4,500 Philadelphia, Hospitals
and Higher Education
Facility Authority, Temple
Hospital, 6.50%, 11/15/08 4,344,840
Baa1 BBB+ 15,515 The Hospitals and Higher
Education Facilities
Authority of Philadelphia,
Temple University
Hospital, 6.625%, 11/15/23 14,156,817
Aa AA 16,200 Philadelphia, Hospitals
and Higher Education
Facility Authority,
Children's Hospital,
5.00%, 2/15/21 12,713,112
Baa NR 4,115 Somerset County, Hospital
Authority, Somerset
County, Sommerset
Community Hospital
Project, 6.75%, 3/1/11 3,722,758
A NR 7,000 Washington County Hospital
Authority, Monongahela
Valley Hospital, 6.75%,
12/1/08 7,089,180
-------------
$ 119,588,592
-------------
HOUSING - 10.2%
NR AAA $ 1,000 Bucks County, Mortgage
Revenue Bonds, Warminster
Heights Project, Section
8-A, 6.80%, 8/1/12 $ 1,015,490
NR NR 2,680 Chester County, IDA,
8.50%, 1/1/24 2,436,656
A1 A+ 3,000 Pennsylvania HFA MFMRB,
7.60%, 7/1/13 3,174,390
Aaa NR 3,000 Philadelphia Redevelopment
Authority, MFMRB, 6.95%,
5/15/24 3,050,700
Aaa NR 2,175 Allegheny County
Residential Finance
Authority, SMFR, (GNMA),
7.15%, 6/1/17 2,177,371
Aa AA 5,700 Pennsylvania HFA SFM,
(AMT), 6.75%, 4/1/16 5,654,970
Aa AA 3,730 Pennsylvania HFA SFMR,
6.90%, 4/1/17 3,787,591
Aa AA 4,000 Pennsylvania HFA SFMR,
6.85%, 4/1/16 4,048,240
Aa AA 300 Pennsylvania HFA SFMR,
7.40%, 10/1/09 313,530
Aa AA 770 Pennsylvania HFA SFMR,
7.20%, 10/1/11 801,123
Aa AA 695 Pennsylvania HFA SFMR,
7.375%, 10/1/16 720,534
Aa AA 1,000 Pennsylvania HFA SFMR,
Variable, 10/1/23 (1) 1,047,290
Aa AA 5,500 Pennsylvania HFA SFMR,
6.85%, 4/1/25 5,485,370
Aa AA 8,350 Pennsylvania HFA SFMR,
7.50%, 10/1/25 8,745,456
A1 A 4,235 Urban Redevelopment
Authority of Pittsburgh
Mortgage Revenue Bonds,
(AMT), 7.10%, 4/1/24 4,157,796
A1 A 265 Urban Redevelopment
Authority of Pittsburgh,
7.45%, 4/1/10 275,608
A1 A 1,000 Urban Redevelopment
Authority of Pittsburgh
Mortgage Revenue Bonds,
7.125%, 4/1/15 1,028,130
A1 A 1,090 Urban Redevelopment
Authority of Pittsburgh
Mortgage Revenue Bonds,
(AMT), 7.40%, 4/1/24 1,119,986
-------------
$ 49,040,231
-------------
INDUSTRIAL DEVELOPMENT
AUTHORITY - 8.4%
A3 A $ 4,950 Butler County IDA, Witco
Corporation Project,
5.85%, 12/1/23 $ 4,302,788
NR BBB+ 1,005 Clearfield County IDA,
KMART Corporation, 6.80%,
5/15/07 980,418
NR A+ 4,000 Franklin County IDA,
Corning Incorporated,
6.25%, 8/1/05 3,999,920
</TABLE>
51
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PENNSYLVANIA TAX FREE PORTFOLIO (CONTINUED)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
--------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
INDUSTRIAL DEVELOPMENT AUTHORITY -
(CONTINUED)
NR AAA 9,160 Mercer County IDA,
Hillcrest Nursing Center,
0%, 1/15/13 2,509,198
A2 A 12,000 New Morgan IDA, New Morgan
Landfill, 6.50%, 4/1/19 11,370,840
Baa2 BBB- 5,000 Pennsylvania, IDA,
Macmilliam Project, 7.60%,
12/1/20 5,117,650
Baa1 BBB+ 4,450 Pennsylvania, IDA, Sun
Company Project, 7.60%,
12/1/24 4,571,485
A A- 6,900 Pennsylvania IDA, Economic
Development, 7.00%, 1/1/11 7,509,960
-------------
$ 40,362,259
-------------
INSURED EDUCATION - 1.1%
Aaa AAA $ 2,500 Pennsylvania Higher
Education Assistance
Agency Student Loan
Revenue Bonds, (AMBAC),
AMT, 7.15%, 9/1/21 $ 2,583,750
Aaa AAA 1,500 Pennsylvania Higher
Education Assistance
Agency Student Loan
Revenue Bonds, (AMBAC),
Variable, 3/1/22 (1) 1,242,345
Aaa AAA 700 Pennsylvania Higher
Education Assistance
Agency Student Loan
Revenue Bonds, (AMBAC),
Variable, 9/1/26 (1) 697,081
Aaa AAA 800 Pennsylvania Higher
Education Assistance
Agency Student Loan
Revenue Bonds, (AMBAC),
AMT, 6.40%, 3/1/22 772,080
-------------
$ 5,295,256
-------------
INSURED GENERAL OBLIGATION
(SCHOOLS) - 0.8%
Aaa AAA $ 4,500 Keystone Oaks School
District Bonds, (AMBAC),
Variable, 9/1/16 (1) $ 3,923,505
-------------
INSURED GENERAL
OBLIGATIONS - 2.3%
Aaa AAA $ 5,500 Commonwealth of
Pennsylvania, (MBIA),
Variable, 6/15/04 (1) $ 5,091,350
Aaa AAA 1,460 Haverford School District,
(FGIC), 6.25%, 6/1/14 1,423,558
Aaa AAA 1,430 Mars Area School District,
(MBIA), 0%, 3/1/14 427,827
Aaa AAA 655 Rochester Area School
District, (AMBAC), 0%,
5/1/10 255,365
Aaa AAA 2,795 County of Venango,
(AMBAC), 6.30%, 12/1/19 2,773,870
Aaa AAA 1,000 West Allegheny County
School District, (AMBAC),
6.60%, 2/1/09 1,025,930
-------------
$ 10,997,900
-------------
INSURED HOSPITAL - 10.2%
Aaa AAA $ 1,170 Allegheny County,
Children's Hospital of
Pittsburgh, (MBIA), 6.75%,
7/1/08 $ 1,207,674
Aaa AAA 4,000 Allegheny County, Magee-
Womens Hospital, (FGIC),
0%, 10/1/15 1,071,840
Aaa AAA 9,000 Allegheny County, Magee-
Womens Hospital, (FGIC),
5.625%, 10/1/20 8,073,900
Aaa AAA 1,400 Armstrong County Saint
Francis Health Care,
(AMBAC), 6.25%, 6/1/13 1,387,792
Aaa AAA 2,500 Armstrong County Saint
Francis Health Care,
(AMBAC), 6.00%, 8/15/08 2,456,850
Aaa AAA 4,400 Bucks County, IDA, Grand
View Hospital, (AMBAC),
5.25%, 7/1/21 3,705,020
Aaa AAA 775 Carbon County, Gnaden
Memorial Hospital,
(AMBAC), 7.00%, 11/15/94 804,458
Aaa AAA 10,000 Doylestown Hospital
Authority, Doylestown
Hospital, (AMBAC), 5.00%,
7/1/23 (3) 7,947,800
Aaa AAA 750 Erie County Hospital
Authority, Harlot Medical
Center, (AMBAC), 7.10%,
2/15/10 796,028
Aaa AAA 230 Lehigh County Health East,
Incorporated, (MBIA),
7.00%, 7/1/15 239,662
Aaa AAA 5,000 Lehigh County, St. Luke's
Hospital, (AMBAC), 6.25%,
7/1/22 4,822,050
Aaa AAA 1,000 Montgomery County,
Abington Memorial
Hospital, (AMBAC),
Variable, 6/1/11 (1) 1,061,550
Aaa AAA 5,000 Philadelphia Hospital and
Higher Education,
Pennsylvania Hospital,
(FGIC), Variable, 2/15/12
(1) 3,853,700
</TABLE>
52
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--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED HOSPITAL - (CONTINUED)
Aaa AAA 3,500 Sayre Health Care
Facilities Authority,
Guthrie Healthcare System,
(AMBAC), 6.00%, 3/1/21 3,293,885
Aaa AAA 1,500 Scranton-Lackawanna, Mercy
Health Systems, (MBIA),
6.90%, 1/1/23 1,543,695
Aaa AAA 7,500 Washington County,
Shadyside Hospital,
(AMBAC), 5.75%, 12/15/14 6,900,375
-------------
$ 49,166,279
-------------
INSURED LEASE - 2.2%
Aaa AAA $ 4,595 Harrisburg Authority,
Dauphin County, Lease
Revenue, (CGIC), 6.25%,
6/1/10 $ 4,714,975
Aaa AAA 3,000 Northumberland County,
Lease Revenue, (MBIA), 0%,
10/15/12 981,000
Aaa AAA 5,600 Philadelphia Muni
Authority, Lease Revenue,
5.625%, 11/15/18 5,010,264
-------------
$ 10,706,239
-------------
INSURED UTILITIES - 5.3%
Aaa AAA $ 8,200 Beaver County IDA, Ohio
Edison County, (AMBAC),
5.45%. 9/15/33 $ 7,068,482
Aaa AAA 4,000 Beaver County IDA, Ohio
Edison Company, (FGIC),
7.00%, 6/1/21 4,193,360
Aaa AAA 10,000 Beaver County IDA, Ohio
Edison Company, (FGIC),
7.050%, 10/1/20 10,251,200
Aaa AAA 3,800 Puerto Rico Electric Power
Authority, Variable,
7/1/02 (1) 3,847,006
-------------
$ 25,360,048
-------------
INSURED WATER & SEWER - 9.1%
Aaa AAA $ 2,750 Allegheny County, Sewer
Revenue, (FGIC), 0%,
12/1/08 $ 1,171,858
Aaa AAA 9,000 Bethlehem Authority,
Northampton and Lehigh
Counties, Water Revenue
Bonds, (MBIA), 4.875%,
11/15/14 7,427,790
Aaa AAA 2,500 City of Philadelphia,
Water and Wastewater,
(FGIC), Variable, 6/15/12
(1) 2,096,225
Aaa AAA 15,000 City of Philadelphia,
Water and Wastewater,
(FGIC), 5.65%, 6/15/12 13,815,000
Aaa AAA 10,000 City of Philadelphia,
Water and Wastewater,
(FGIC), Variable, 6/15/04
(1) 9,553,700
Aaa AAA 9,000 City of Philadelphia,
Water and Wastewater,
(FGIC), 5.50%, 6/15/15 7,991,100
Aaa AAA 2,460 City of Philadelphia,
Water and Wastewater,
(FGIC), 5.00%, 6/15/16 2,030,779
-------------
$ 44,086,452
-------------
MISCELLANEOUS - 3.7%
NR AA $ 870 Pennsylvania
Infrastructure Investment
Authority, Pennvest,
6.80%, 9/1/10 $ 895,804
NR A 16,950 Pennsylvania Finance
Authority, Beaver County,
6.60%, 11/1/09 16,821,689
-------------
$ 17,717,493
-------------
NURSING HOMES - 1.2%
NR NR $ 3,500 Montgomery County IDA,
Geriatric Health Care
Institute, 8.375%, 7/1/23 $ 3,313,870
NR NR 1,460 Westmoreland County IDA,
Highland Health System,
9.250%, 6/1/22 1,470,220
NR NR 1,190 Philadelphia Hospital and
Higher Education
Facilities Authority,
Philadelphia Protestant,
8.625%, 7/1/21 1,152,051
-------------
$ 5,936,141
-------------
SPECIAL TAX REVENUE - 0.1%
Baa1 BBB+ $ 500 Puerto Rico Special Tax
Revenue, 7.50%, 7/1/09 $ 531,370
-------------
TRANSPORTATION - 0.3%
Baa1 A $ 1,500 Puerto Rico Commonwealth
Highway, 5.50%, 7/1/13 $ 1,327,035
-------------
UTILITIES - 2.2%
Baa1 A- $ 3,370 Puerto Rico Electric Power
Authority Power Revenue,
0%, 7/1/17 $ 766,709
NR NR 1,500 Virgin Islands Water and
Power Authority, 7.40%,
7/1/11 1,547,730
Baa3 BB+ 500 Beaver County, IDA, Ohio
Edison Company, 7.75%,
9/1/24 505,060
Baa1 BBB+ 3,250 Delaware County, IDA,
Philadelphia Electric
Company, 7.375%, 4/1/21 3,344,575
</TABLE>
53
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PENNSYLVANIA TAX FREE PORTFOLIO (CONTINUED)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
------------------
STANDARD PAR MARKET
MOODY'S & POOR'S VALUE SECURITY VALUE
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
UTILITIES - (CONTINUED)
Baa1 BBB+ 4,070 Montgomery County, IDA,
Philadelphia Electric
Company, (AMT), 7.60%,
4/1/21 4,191,188
-------------
$ 10,355,262
-------------
WATER & SEWER REVENUE - 0.2%
Ba BBB $ 1,000 Puerto Rico Aqueduct and
Sewer Authority, 7.90%,
7/1/07 $ 1,089,400
-------------
TOTAL TAX-EXEMPT
INVESTMENTS (IDENTIFIED
COST, $497,750,345) $ 482,137,830
=============
<FN>
(1) The above designated have been issued as inverse floater bonds.
(2) When-issued security.
(3) At January 31, 1995, the market value of securities segregated to cover
margin requirements on open financial futures contracts amounted to
$7,947,800.
(4) At January 31, 1995, the market value of securities segregated to cover
when-issued securities amounted to $10,295,880.
The Portfolio primarily invests in debt securities issued by Pennsylvania
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1995, 28.7% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
guaranty assurance agencies. The aggregate percentage by financial institution
ranged from 3.5% to 14.9% of total investments.
</TABLE>
See notes to financial statements
54
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TEXAS TAX FREE PORTFOLIO
PORTFOLIO OF INVESTMENTS - JANUARY 31, 1995
(UNAUDITED)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 3.6%
A NR $ 700 Brazos Higher Education
Authority, Texas Student
Loan Subordinate, 6.50%,
6/1/04 $ 710,164
Aa1 AA 250 University of Texas, 6.75%,
8/15/13 256,993
------------
$ 967,157
------------
ELECTRIC UTILITIES - 5.0%
A A $1,000 Austin City, Texas Combined
Utility Systems, 6.00%,
11/15/13 $ 936,850
NR BBB 500 Guam Power Authority,
5.25%, 10/1/23 392,360
------------
$ 1,329,210
------------
ESCROWED - 2.0%
Aaa NR $1,000 Central Texas Housing
Corporation Single Family,
0%, 9/1/16 $ 222,080
Aaa AAA 85 Harris County Texas Toll
Road Unlimited Tax and
Subordinate Lien, 6.625%,
8/15/17 89,321
Aaa AAA 200 Montgomery County, Texas
Hospital District (FSA),
6.625%, 4/1/17 214,618
------------
$ 526,019
------------
GENERAL OBLIGATIONS - 14.9%
Aaa AAA $1,000 Bastrop, Texas Independent
School District U.T.G.O.
(PSF), 0%, 2/15/13 $ 314,090
Aaa AAA 1,000 Clear Creek, Texas
Independent School District
U.T.G.O. (PSF), 5.5%,
2/1/11 923,900
Aaa NR 500 Crandall, Texas Independent
School District U.T.G.O.
(PSF), 6.00%, 2/15/24 473,130
Aaa AAA 1,000 Cypress-Fairbanks, Texas
Independent School District
U.T.G.O. (PSF), 5.25%,
2/15/19 (1) 858,760
Aaa AAA 550 Grand Prairie, Texas
Independent School District
U.T.G.O. (PSF), 0%, 2/15/12 184,217
Aaa AAA 350 Irving, Texas L.T.G.O.
4.875%, 9/15/14 293,234
Aa AA 250 Texas Veterans' Housing
Assistance U.T.G.O. (AMT),
6.45%, 6/1/23 238,735
NR BBB 690 Texas Veterans' Housing
Assistance U.T.G.O. (AMT),
6.70%, 12/1/24 680,278
------------
$ 3,966,344
------------
HEALTH CARE - 1.9%
NR NR $ 500 Bell County, Texas HFC
Elder Care Facilities,
9.00%, 11/1/24 $ 510,130
------------
HOSPITALS - 11.4%
Baa1 BBB $ 200 Bexar County, Texas, St.
Luke's Lutheran Hospital,
7.00%, 5/1/21 $ 208,604
NR BBB 500 Denison, Texas, Texoma
Medical Center, 7.10%,
8/15/24 470,725
A BBB 100 Ector County, Texas
Hospital District, 7.30%,
4/15/12 101,385
A A- 100 Harris County, Texas
Hospital District, 7.125%,
6/1/15 101,035
A A- 1,100 Harris County, Texas
Hospital District, Memorial
Hospital System, 6.625%,
6/1/24 1,055,351
Aa AA 250 McAllen Health Facilities,
Texas, Sisters of Mercy,
5.00%, 6/1/15 205,573
Aa NR 1,000 Tarrant County, Texas,
Methodist Health System,
6.00%, 9/1/24 902,080
------------
$ 3,044,753
------------
HOUSING - 5.9%
Aa NR $ 925 Kaufman, Texas HDC
Multifamily (FHA) Section
8, 6.00%, 2/1/22 $ 840,400
Aa NR 750 Travis County, Texas HFC
Multifamily Travis Station
Apartments, 6.75%, 4/1/19 741,112
------------
$ 1,581,512
------------
INDUSTRIAL DEVELOPMENT REVENUE/
POLLUTION CONTROL REVENUE - 6.8%
Baa1 BBB $ 450 Gulf Coast, Texas Waste
Disposal Authority,
Champion International
(AMT), 7.25%, 4/1/17 $ 459,245
A2 AA- 1,000 Port Corpus Christi, Texas,
Hoechst Celanese
Corporation, 6.875%, 4/1/17 1,007,630
Baa2 BBB 400 West Side Calhoun County
Navigation District, Texas,
Union Carbide (AMT), 6.40%,
5/1/23 353,260
------------
$ 1,820,135
------------
</TABLE>
55
<PAGE> 66
--------------------------------------------------------------------------------
TEXAS TAX FREE PORTFOLIO (CONTINUED)
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED EDUCATION - 2.2%
Aaa AAA $ 100 Southwest, Texas, Southern
Methodist University
(FGIC), 6.375%, 10/1/13 $ 101,174
Aaa AAA 500 Tyler Junior College
District, Texas (MBIA),
5.75%, 8/15/10 471,590
------------
$ 572,764
------------
INSURED ELECTRIC UTILITIES - 9.0%
Aaa AAA $1,000 Austin, Texas Utility
System (FGIC), 6.25%,
5/15/16 $ 987,140
250 Brazos River Authority,
Texas, Houston Lighting and
Power Company (FGIC),
7.20%, 12/1/18 263,128
75 Brazos River Authority,
Texas, Houston Light and
Power (AMBAC), 6.70%,
3/1/17 76,062
Aaa AAA 500 Lower Colorado River
Authority Junior Lien,
Texas (FGIC), 0%, 1/1/12 169,345
605 Montgomery County, Texas
MUD #47 Water & Sewer
(AMBAC), 6.125%, 10/1/20 574,629
100 Sabine River Authority,
Texas, Utilities Electric
Company (FGIC), 6.55%,
10/1/22 99,988
Aaa AAA 1,000 Texas Municipal Power
Agency (MBIA), 0%, 9/1/17 230,490
------------
$ 2,400,782
------------
INSURED GENERAL OBLIGATION - 3.7%
Aaa AAA $ 100 Brownsville, Texas
Navigation District
(AMBAC), 6.70%, 3/1/17 $ 99,334
Aaa AAA 500 Cedar Park, Texas
Certificates of Obligation
(FGIC), 5.80%, 8/15/12 468,655
Aaa AAA 500 Ector County, Texas
(AMBAC), 4.25%, 2/15/10 407,275
------------
$ 975,264
------------
INSURED HOSPITAL - 8.2%
Aaa AAA $ 400 Brazoria County, Texas,
Brazosport Memorial
Hospital (FSA), 5.50%,
7/1/13 $ 359,772
Aaa AAA 250 Coastal Bend, Texas HFC
Incarnate Word Health
Services (AMBAC), 6.30%,
1/1/17 243,330
Aaa AAA 1,500 Harris County, Texas HFC
Hermann Hospital (MBIA),
6.375%, 10/1/24 1,475,310
Aaa AAA 100 Tarrant County, Texas HFC
Harris Methodist Health
System, 6.00%, 9/1/24 100,549
------------
$ 2,178,961
------------
INSURED LEASE/CERTIFICATES
OF PARTICIPATION - 1.6%
Aaa AAA $ 500 East Texas Jails, Angelina
County Project (MBIA),
5.25%, 5/1/14 $ 438,355
------------
INSURED TRANSPORTATION - 8.4%
Aaa AAA $ 500 Dallas-Fort Worth
International Airport,
Texas (MBIA), 6.00%,
11/1/12 $ 479,935
Aaa AAA 500 Harris County, Texas Toll
Road Senior Lien (AMBAC),
5.30%, 8/15/13 441,795
Aaa AAA 1,500 Harris County, Texas Toll
Road Subordinate Lien
(FGIC), 5.375%, 8/15/20 (1) 1,294,410
Aaa AAA 15 Harris County, Texas Toll
Road Subordinate Lien
(AMBAC), 6.625%, 8/15/17 15,218
------------
$ 2,231,358
------------
INSURED WATER & SEWER - 1.6%
Aaa AAA $ 520 Tarrant County, Texas Water
and Improvement District
Number One (AMBAC), 4.75%,
3/1/12 $ 430,243
------------
LEASE/CERTIFICATES OF
PARTICIPATION - 0.6%
A A- $ 150 Texas National Research Lab
Super Collider, 6.95%,
12/1/12 $ 151,679
------------
MISCELLANEOUS - 6.8%
Baa2 NR $ 505 Alliance Airport Authority,
Texas, American Airlines,
7.50%, 12/1/29 $ 496,945
Aaa AAA 1,000 Austin, Texas Hotel
Occupancy Tax Revenue,
5.125%, 11/15/19 829,590
NR NR 250 Harris County, Texas Space
Center Project, 9.25%,
8/15/15 225,000
NR NR 250 Retama Development, Texas,
Retama Racetrack, 8.75%,
12/15/18 247,973
------------
$ 1,799,508
------------
TRANSPORTATION - 5.6%
Ba1 BB $ 235 Dallas-Fort Worth Texas
Airport, Delta Airlines
(AMT), 7.125%, 11/1/26 $ 219,530
Baa2 BB+ 225 Dallas-Fort Worth Texas
Airport, Delta Airlines
(AMT), 7.50%, 11/1/25 221,510
</TABLE>
56
<PAGE> 67
--------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED)
-------------------
PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRANSPORTATION -
(CONTINUED)
Aa AA+ 400 Harris County, Texas Toll
Road, Subordinate Lien,
6.125%, 8/15/20 392,652
Aa AA+ 25 Harris County, Texas Toll
Road, Subordinate Lien,
6.75%, 8/1/14 (1) 25,863
Baa1 A 500 Puerto Rico Highway and
Transportation Authority,
5.00%, 7/1/22 397,095
Baa3 BB+ 250 Puerto Rico Ports
Authority, American
Airlines (AMT), 6.30%,
6/1/23 220,485
------------
$ 1,477,135
------------
WATER & SEWER REVENUE - 0.8%
Aa AA $ 250 Dallas, Texas Water and
Sewer, 5.00%, 4/1/09 $ 218,774
------------
TOTAL TAX-EXEMPT
INVESTMENTS (IDENTIFIED
COST, $27,503,310) $ 26,620,083
=============
<FN>
(1) At January 31, 1995, the market value of securities segregated to cover
margin requirements for open financial futures contracts amounted to
$2,179,033.
The Portfolio invests primarily in debt securities issued by Texas
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1995, 34.7% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 11.6% to 13.1% of total investments.
</TABLE>
See notes to financial statements
57
<PAGE> 68
<TABLE>
<CAPTION>
TAX FREE PORTFOLIOS
FINANCIAL STATEMENTS
STATEMENTS OF ASSETS AND LIABILITIES
------------------------------------------------------------------------------------------------------------------------------------
January 31, 1995 (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA COLORADO CONNECTICUT MICHIGAN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments --
Identified cost $148,292,359 $48,064,873 $198,211,032 $191,744,708
Unrealized depreciation (4,254,389) (1,499,984) (11,178,480) (4,308,135)
------------ ----------- ------------ ------------
Total investments, at value (Note 1A) $144,037,970 $46,564,889 $187,032,552 $187,436,573
Cash 43 94,617 98,385 615
Receivable for investments sold -- 422,054 -- 2,259,275
Interest receivable 1,516,028 677,375 2,718,570 2,954,090
Deferred organization expenses (Note 1D) 5,365 1,770 8,122 7,737
------------ ----------- ------------ ------------
Total assets $145,559,406 $47,760,705 $189,857,629 $192,658,290
------------ ----------- ------------ ------------
LIABILITIES:
Demand note payable (Note 5) -- -- -- $ 1,478,000
Due to bank $ 86,000 -- -- --
Payable for investments purchased -- $ 1,000,000 $ 2,513,542 --
Payable for daily variation margin on open
financial futures contracts (Note 1E) -- -- 44,532 66,094
Payable to affiliates --
Trustees' fee 672 133 890 1,058
Custodian fees 3,000 909 4,002 --
Accrued expenses 11,407 2,033 1,166 2,443
------------ ----------- ------------ ------------
Total liabilities $ 101,079 $ 1,003,075 $ 2,564,132 $ 1,547,595
------------ ----------- ------------ ------------
Net assets applicable to investors' interest in
Portfolio $145,458,327 $46,757,630 $187,293,497 $191,110,695
============ =========== ============ ============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $149,712,716 $48,257,614 $198,646,453 $195,654,133
Unrealized depreciation of investments and financial
futures contracts (computed on the basis of
identified cost) (4,254,389) (1,499,984) (11,352,956) (4,543,438)
------------ ----------- ------------ ------------
Total $145,458,327 $46,757,630 $187,293,497 $191,110,695
============ =========== ============ ============
</TABLE>
See notes to financial statements
58
<PAGE> 69
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
------------------------------------------------------------------------------------------------------------------------------------
January 31, 1995 (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA NEW JERSEY PENNSYLVANIA TEXAS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments --
Identified cost $83,080,772 $400,119,549 $497,750,345 $27,503,310
Unrealized depreciation (2,202,514) (3,892,110) (15,612,515) (883,227)
----------- ------------ ------------ -----------
Total investments, at value (Note 1A) $80,878,258 $396,227,439 $482,137,830 $26,620,083
Cash 2,538,932 2,375,957 16,638,071 345,587
Receivable for investments sold 5,132,210 18,617,054 2,426,752 --
Interest receivable 1,205,806 5,534,362 7,026,823 590,485
Receivable from the Investment Adviser (Note 2) -- -- -- 18,600
Deferred organization expenses (Note 1D) 3,013 13,484 16,176 1,713
----------- ------------ ------------ -----------
Total assets $89,758,219 $422,768,296 $508,245,652 $27,576,468
----------- ------------ ------------ -----------
LIABILITIES:
Payable for investments purchased $ 7,709,680 $ 15,546,639 $ 2,048,546 $ 256,392
Payable for when-issued securities (Note 1F) -- -- 10,000,000 --
Payable for daily variation margin on open
financial futures contracts (Note 1E) 22,969 75,469 48,375 9,844
Payable to affiliates --
Trustees' fee 519 1,528 1,720 138
Custodian fees 1,805 7,500 -- 400
Accrued expenses 6,287 4,015 4,465 6,206
----------- ------------ ------------ -----------
Total liabilities $ 7,741,260 $ 15,635,151 $ 12,103,106 $ 272,980
----------- ------------ ------------ -----------
Net assets applicable to investors' interest in
Portfolio $82,016,959 $407,133,145 $496,142,546 $27,303,488
=========== ============ ============ ===========
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $84,302,245 $411,309,185 $511,970,830 $28,221,760
Unrealized depreciation of investments and
financial futures (computed on the basis of
identified cost) (2,285,286) (4,176,040) (15,828,284) (918,272)
----------- ------------ ------------ -----------
Total $82,016,959 $407,133,145 $496,142,546 $27,303,488
=========== ============ ============ ===========
</TABLE>
See notes to financial statements
59
<PAGE> 70
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
------------------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended January 31, 1995 (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA COLORADO CONNECTICUT MICHIGAN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE 1B):
Interest income $ 4,770,819 $ 1,443,507 $ 6,047,761 $ 6,261,162
----------- ----------- ----------- -----------
Expenses --
Investment adviser fee (Note 2) $ 315,658 $ 61,356 $ 410,999 $ 429,564
Compensation of Trustees not members of the
Investment Adviser's organization 5,072 515 3,495 5,998
Custodian fees (Note 2) 25,666 8,216 19,579 139
Legal and accounting fees 25,793 20,817 27,646 28,948
Interest expense (Note 5) 12,691 -- 40,737 3,391
Bond pricing 4,243 5,063 7,585 8,899
Printing 2,900 1,344 2,238 2,700
Amortization of organization expenses (Note 1D) 903 311 1,321 1,257
Miscellaneous 6,695 3,213 2,276 387
----------- ----------- ----------- -----------
Total expenses $ 399,621 $ 100,835 $ 515,876 $ 481,283
Deduct preliminary reduction of investment adviser fee
(Note 2) -- 35,493 -- --
----------- ----------- ----------- -----------
Net expenses $ 399,621 $ 65,342 $ 515,876 $ 481,283
----------- ----------- ----------- -----------
Net investment income $ 4,371,198 $ 1,378,165 $ 5,531,885 $ 5,779,879
----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) --
Investment transactions (identified cost basis) $(4,530,816) $(1,519,963) $(2,513,959) $(4,402,245)
Financial futures contracts 128,684 32,289 (234,381) 605,340
----------- ----------- ----------- -----------
Net realized loss on investments $(4,402,132) $(1,487,674) $(2,748,340) $(3,796,905)
----------- ----------- ----------- -----------
Change in unrealized appreciation (depreciation) --
Investments $ (391,581) $ 66,077 $(5,628,237) $(2,101,280)
Financial futures contracts 117,601 68,086 251,782 (90,995)
----------- ----------- ----------- -----------
Net unrealized appreciation (depreciation) $ (273,980) $ 134,163 $(5,376,455) $(2,192,275)
----------- ----------- ----------- -----------
Net realized and unrealized loss on
investments $(4,676,112) $(1,353,511) $(8,124,795) $(5,989,180)
----------- ----------- ----------- -----------
Net increase (decrease) in net assets from
operations $ (304,914) $ 24,654 $(2,592,910) $ (209,301)
=========== =========== =========== ===========
</TABLE>
See notes to financial statements
60
<PAGE> 71
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
------------------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended January 31, 1995 (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA NEW JERSEY PENNSYLVANIA TEXAS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ------------ ---------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE 1B):
Interest income $ 2,639,979 $ 13,496,090 $ 16,922,653 $ 843,254
----------- ------------ ------------ ---------
Expenses --
Investment adviser fee (Note 2) $ 152,358 $ 969,866 $ 1,216,350 $ 26,769
Compensation of Trustees not members of the
Investment Adviser's organization 2,084 5,997 10,174 946
Custodian fees (Note 2) 16,560 47,234 -- 5,206
Legal and accounting fees 21,125 35,192 36,213 19,513
Interest expense (Note 5) 11,883 25,292 3,973 --
Bond pricing 6,999 10,788 10,867 5,296
Printing 2,500 2,500 2,700 --
Amortization of organization expenses (Note 1D) 513 2,250 2,661 307
Miscellaneous 60 1,589 6,935 1,403
----------- ------------ ------------ ---------
Total expenses $ 214,082 $ 1,100,708 $ 1,289,873 $ 59,440
----------- ------------ ------------ ---------
Deduct preliminary reduction of investment adviser
fee (Note 2) -- -- -- $ 26,769
Deduct preliminary allocation of expenses to the
Investment Adviser (Note 2) -- -- -- 18,600
----------- ------------ ------------ ---------
Total -- -- -- $ 45,369
----------- ------------ ------------ ---------
Net expenses $ 214,082 $ 1,100,708 $ 1,289,873 $ 14,071
----------- ------------ ------------ ---------
Net investment income $ 2,425,897 $ 12,395,382 $ 15,632,780 $ 829,183
----------- ------------ ------------ ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) --
Investment transactions (identified cost basis) $(3,028,199) $(11,750,539) $ (9,978,715) $(601,944)
Financial futures contracts (48,561) (340,422) (670,296) 70,162
----------- ------------ ------------ ---------
Net realized loss on investments $(3,076,760) $(12,090,961) $(10,649,011) $(531,782)
----------- ------------ ------------ ---------
Change in unrealized appreciation (depreciation) --
Investments $ (199,574) $ (1,964,448) $(12,915,434) $(135,091)
Financial futures contracts 98,400 732,401 2,108,172 (18,394)
----------- ------------ ------------ ---------
Net unrealized depreciation $ (101,174) $ (1,232,047) $(10,807,262) $(153,485)
----------- ------------ ------------ ---------
Net realized and unrealized loss on
investments $(3,177,934) $(13,323,008) $(21,456,273) $(685,267)
----------- ------------ ------------ ---------
Net increase (decrease) in net assets
from operations $ (752,037) $ (927,626) $ (5,823,493) $ 143,916
=========== ============ ============ =========
</TABLE>
See notes to financial statements
61
<PAGE> 72
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended January 31, 1995 (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA COLORADO CONNECTICUT MICHIGAN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 4,371,198 $ 1,378,165 $ 5,531,885 $ 5,779,879
Net realized gain (loss) on investment
transactions (4,402,132) (1,487,674) (2,748,340) (3,796,905)
Change in unrealized appreciation (depreciation)
of investments (273,980) 134,163 (5,376,455) (2,192,275)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from
operations $ (304,914) $ 24,654 $ (2,592,910) $ (209,301)
------------ ------------ ------------ ------------
Capital transactions --
Contributions $ 14,530,978 $ 7,854,315 $ 15,954,472 $ 8,950,374
Withdrawals (22,836,097) (5,520,298) (18,106,030) (21,662,041)
------------ ------------ ------------ ------------
Increase (Decrease) in net assets resulting
from capital transactions $ (8,305,119) $ 2,334,017 $ (2,151,558) $(12,711,667)
------------ ------------ ------------ ------------
Total increase (decrease) in net assets $ (8,610,033) $ 2,358,671 $ (4,744,468) $(12,920,968)
NET ASSETS:
At beginning of period $154,068,360 $ 44,398,959 $192,037,965 204,031,663
------------ ------------ ------------ ------------
At end of period $145,458,327 $ 46,757,630 $187,293,497 $191,110,695
============ ============ ============ ============
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MINNESOTA NEW JERSEY PENNSYLVANIA TEXAS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 2,425,897 $ 12,395,382 $ 15,632,780 $ 829,183
Net realized gain (loss) on investment
transactions (3,076,760) (12,090,961) (10,649,011) (531,782)
Change in unrealized appreciation
(depreciation) of investments (101,174) (1,232,047) (10,807,262) (153,485)
----------- ------------ ------------ -----------
Net increase (decrease) in net assets from
operations $ (752,037) $ (927,626) $ (5,823,493) $ 143,916
----------- ------------ ------------ -----------
Capital transactions --
Contributions $ 7,303,356 $ 24,902,148 $ 22,148,338 $ 3,567,653
Withdrawals (8,539,730) (40,695,393) (56,968,438) (3,997,088)
----------- ------------ ------------ -----------
Decrease in net assets resulting from capital
transactions (1,236,374) $(15,793,245) $(34,820,100) $ (429,435)
----------- ------------ ------------ -----------
Total decrease in net assets $(1,988,411) $(16,720,871) $(40,643,593) $ (285,519)
NET ASSETS:
At beginning of period $84,005,370 $423,854,016 $536,786,139 $27,589,007
----------- ------------ ------------ -----------
At end of period $82,016,959 $407,133,145 $496,142,546 $27,303,488
=========== ============ ============ ===========
</TABLE>
See notes to financial statements
62
<PAGE> 73
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------------------------------------------------------------
Year Ended July 31, 1994*
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA COLORADO CONNECTICUT MICHIGAN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 6,694,909 $ 1,681,554 $ 8,098,918 $ 9,191,618
Net realized gain (loss) on investment
transactions (79,923) (238,197) 610,531 459,500
Change in unrealized appreciation (depreciation)
of investments (11,906,679) (2,832,041) (15,885,963) (15,894,224)
------------ ------------ ------------ ------------
Net decrease in net assets from operations $ (5,291,693) $ (1,388,684) $ (7,176,514) $ (6,243,106)
------------ ------------ ------------ ------------
Capital transactions --
Contributions $ 49,588,327 $ 25,061,524 $ 55,286,988 $ 43,549,085
Withdrawals (23,767,597) (3,620,273) (15,920,869) (20,939,507)
------------ ------------ ------------ ------------
Increase in net assets resulting from capital
transactions $ 25,820,730 $ 21,441,251 $ 39,366,119 $ 22,609,578
------------ ------------ ------------ ------------
Total increase in net assets $ 20,529,037 $ 20,052,567 $ 32,189,605 $ 16,366,472
NET ASSETS:
At beginning of period 133,539,324 24,346,392 159,848,360 187,665,191
------------ ------------ ------------ ------------
At end of period $154,068,361 $ 44,398,959 $192,037,965 $204,031,663
============ ============ ============ ============
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MINNESOTA NEW JERSEY PENNSYLVANIA TEXAS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 3,534,268 $ 19,598,942 $ 25,052,308 $ 1,024,502
Net realized gain (loss) on investment
transactions 361,104 1,931,832 (1,606,336) (193,762)
Change in unrealized appreciation (depreciation)
of investments (6,315,849) (34,629,145) (41,094,537) (1,491,855)
------------ ------------ ------------ ------------
Net decrease in net assets from operations $ (2,420,477) $(13,098,371) $(17,648,565) $ (661,115)
------------ ------------ ------------ ------------
Capital transactions --
Contributions $ 28,250,170 $ 95,610,275 $113,666,177 $ 14,312,064
Withdrawals (8,843,182) (52,334,675) (56,232,111) (2,091,308)
------------ ------------ ------------ ------------
Increase in net assets resulting from capital
transactions $ 19,406,988 $ 43,275,600 $ 57,434,066 $ 12,220,756
------------ ------------ ------------ ------------
Total increase in net assets $ 16,986,511 $ 30,177,229 $ 39,785,501 $ 11,559,641
NET ASSETS:
At beginning of period 67,018,859 393,676,787 497,000,638 16,029,366
------------ ------------ ------------ ------------
At end of period $ 84,005,370 $423,854,016 $536,786,139 $ 27,589,007
============ ============ ============ ============
<FN>
* For the ten months ended July 31, 1994.
</TABLE>
See notes to financial statements
63
<PAGE> 74
<TABLE>
<CAPTION>
SUPPLEMENTARY DATA
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA PORTFOLIO COLORADO PORTFOLIO
---------------------------------- ----------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JANUARY 31, -------------------- JANUARY 31, --------------------
1995 JULY 31, SEPT. 30, 1995 JULY 31, SEPT. 30,
(UNAUDITED) 1994* 1993** (UNAUDITED) 1994* 1993**
----------- -------- --------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
RATIOS (AS A PERCENTAGE OF AVERAGE
DAILY NET ASSETS)++:
Net expenses 0.54%+ 0.46%+ 0.42%+ 0.29%+ 0.02%+ 0.06%+
Net investment income 5.88%+ 5.43%+ 5.46%+ 6.06%+ 5.73%+ 5.60%+
PORTFOLIO TURNOVER 19% 23% 107% 36% 23% 10%
<FN>
++The operating expenses of the Portfolios may reflect a reduction of the
investment adviser fee and an allocation of expenses to the Investment
Adviser. Had such actions not been taken, the ratios would have been as
follows:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
RATIOS (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS):
Expenses 0.44%+ 0.35%+ 0.35%+
Net investment income 5.91%+ 5.40%+ 5.31%+
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT PORTFOLIO MICHIGAN PORTFOLIO
---------------------------------- ----------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JANUARY 31, -------------------- JANUARY 31, --------------------
1995 JULY 31, SEPT. 30, 1995 JULY 31, SEPT. 30,
(UNAUDITED) 1994* 1993** (UNAUDITED) 1994* 1993**
----------- -------- --------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
RATIOS (AS A PERCENTAGE OF AVERAGE
DAILY NET ASSETS):
Net expenses 0.55%+ 0.47%+ 0.46%+ 0.49%+ 0.47%+ 0.44%+
Net investment income 5.92%+ 5.40%+ 5.45%+ 5.87%+ 5.48%+ 5.46%+
PORTFOLIO TURNOVER 17% 10% 10% 28% 45% 20%
<FN>
+ Computed on an annualized basis.
* For the ten months ended July 31, 1994.
** For the period from the start of business, February 1, 1993, to September 30,
1993.
</TABLE>
See notes to financial statements
64
<PAGE> 75
<TABLE>
<CAPTION>
SUPPLEMENTARY DATA
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA PORTFOLIO NEW JERSEY PORTFOLIO
---------------------------------- ----------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JANUARY 31, -------------------- JANUARY 31, --------------------
1995 JULY 31, SEPT. 30, 1995 JULY 31, SEPT. 30,
(UNAUDITED) 1994* 1993** (UNAUDITED) 1994* 1993**
----------- -------- --------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
RATIOS (AS A PERCENTAGE OF AVERAGE
DAILY NET ASSETS):
Net expenses 0.52%+ 0.45%+ 0.40%+ 0.53% 0.50%+ 0.50%+
Net investment income 5.89%+ 5.50%+ 5.58%+ 6.01% 5.62%+ 5.67%+
PORTFOLIO TURNOVER 37% 20% 10% 34% 25% 12%
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA PORTFOLIO TEXAS PORTFOLIO
---------------------------------- ----------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JANUARY 31, -------------------- JANUARY 31, --------------------
1995 JULY 31, SEPT. 30, 1995 JULY 31, SEPT. 30,
(UNAUDITED) 1994* 1993** (UNAUDITED) 1994* 1993**
----------- -------- --------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
RATIOS (AS A PERCENTAGE OF AVERAGE
DAILY NET ASSETS)++:
Net expenses 0.51%+ 0.48%+ 0.50%+ 0.11%+ 0.00%+ 0.03%+
Net investment income 6.17%+ 5.66%+ 5.71%+ 6.20%+ 5.69%+ 5.82%+
PORTFOLIO TURNOVER 26% 21% 17% 25% 27% 8%
<FN>
++The operating expenses of the Portfolios may reflect a reduction of the
investment adviser fee and an allocation of expenses to the Investment
Adviser. Had such actions not been taken, the ratios would have been as
follows:
</TABLE>
<TABLE>
<S> <C> <C> <C>
RATIOS (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS):
Expenses 0.44%+ 0.37%+ 0.42%+
Net investment income 5.87%+ 5.32%+ 5.43%+
<FN>
+ Computed on an annualized basis.
* For the ten months ended July 31, 1994.
** For the period from the start of business, February 1, 1993, to September 30, 1993.
</TABLE>
See notes to financial statements
65
<PAGE> 76
--------------------------------------------------------------------------------
Notes to Financial Statements
(Unaudited)
--------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Arizona Tax Free Portfolio (Arizona Portfolio), Colorado Tax Free Portfolio
(Colorado Portfolio), Connecticut Tax Free Portfolio (Connecticut Portfolio),
Michigan Tax Free Portfolio (Michigan Portfolio), Minnesota Tax Free Portfolio
(Minnesota Portfolio), New Jersey Tax Free Portfolio (New Jersey Portfolio),
Pennsylvania Tax Free Portfolio (Pennsylvania Portfolio) and Texas Tax Free
Portfolio (Texas Portfolio), collectively the Portfolios, are registered under
the Investment Company Act of 1940 as non-diversified open-end investment
companies which were organized as trusts under the laws of the State of New York
on May 1, 1992. The Declarations of Trust permit the Trustees to issue interests
in the Portfolios. The following is a summary of significant accounting policies
of the Portfolios. The policies are in conformity with generally accepted
accounting principles.
A. INVESTMENT VALUATIONS - Municipal bonds are normally valued on the basis of
valuations furnished by a pricing service. Taxable obligations, if any, for
which price quotations are readily available are normally valued at the mean
between the latest bid and asked prices. Futures contracts listed on commodity
exchanges are valued at closing settlement prices. Short-term obligations,
maturing in sixty days or less, are valued at amortized cost, which approximates
value. Investments for which valuations or market quotations are unavailable are
valued at fair value using methods determined in good faith by or at the
direction of the Trustees.
B. INCOME - Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for federal
income tax purposes.
C. INCOME TAXES - The Portfolios are treated as partnerships for Federal tax
purposes. No provision is made by the Portfolios for federal or state taxes on
any taxable income of the Portfolios because each investor in the Portfolios are
ultimately responsible for the payment of any taxes. Since some of the
Portfolios' investors are regulated investment companies that invest all or
substantially all of their assets in the Portfolios, the Portfolios normally
must satisfy the applicable source of income and diversification requirements
(under the Internal Revenue Code) in order for their respective investors to
satisfy them. The Portfolios will allocate at least annually among their
respective investors each investor's distributive share of the Portfolios' net
taxable (if any) and tax-exempt investment income, net realized capital gains,
and any other items of income, gain, loss, deductions or credit. Interest
income received by the Portfolios on investments in municipal bonds, which is
excludable from gross income under the Internal Revenue Code, will retain its
status as income exempt from federal income tax when allocated to each
Portfolio's investors. The portion of such interest, if any, earned on private
activity bonds issued after August 7, 1986, may be considered a tax preference
item for investors.
D. DEFERRED ORGANIZATION EXPENSES - Costs incurred by a Portfolio in connection
with its organization are being amortized on the straight-line basis over five
years beginning on the date each Portfolio commenced operations.
E. FINANCIAL FUTURES CONTRACTS - Upon the entering of a financial futures
contract, a Portfolio is required to deposit ("initial margin") either in cash
or securities an amount equal to a certain percentage of the purchase price
indicated in the financial futures contract. Subsequent payments are made or
received by a Portfolio ("margin maintenance") each day, dependent on the daily
fluctuations in the value of the underlying security, and are recorded for book
purposes as unrealized gains or losses by a Portfolio. A Portfolio's investment
in financial futures contracts is designed only to hedge against anticipated
future changes in interest rates. Should interest rates move unexpectedly, the
Portfolio may not achieve the anticipated benefits of the financial futures
contractions and may realize a loss.
F. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS - The Portfolios may engage in
when-issued and delayed delivery transactions. The Portfolio records when-issued
securities on trade date and maintains security positions such that sufficient
liquid assets will be available to make payment for the securities purchased.
Securities purchased on a when-issued or delayed delivery basis are marked to
market daily and begin accruing interest on settlement date.
G. OTHER - Investment transactions are accounted for on a trade date basis.
H. INTERIM FINANCIAL INFORMATION - The interim financial statements relating to
January 31, 1995 and for the period then ended have not been audited by
independent certified public accountants, but in the opinion of the Portfolio's
management, reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
66
<PAGE> 77
--------------------------------------------------------------------------------
(2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser fee is earned by Boston Management and Research (BMR), a
wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation for
management and investment advisory services rendered to each Portfolio.
The fee is based upon a percentage of average daily net assets plus a percentage
of gross income (i.e., income other than gains from the sale of securities).
For the six months ended January 31, 1995, each Portfolio paid advisory fees as
follows:
<TABLE>
<CAPTION>
AMOUNT EFFECTIVE RATE**
---------- ----------------
<S> <C> <C>
Arizona $ 315,658 0.42%
Colorado 61,356 0.27%
Connecticut 410,999 0.44%
Michigan 429,564 0.44%
Minnesota 152,358 0.37%
New Jersey 969,866 0.47%
Pennsylvania 1,216,350 0.48%
Texas 26,769 0.20%
<FN>
** Advisory fees paid as a percentage of average daily net assets (annualized).
</TABLE>
To enhance the net income of the Colorado Portfolio and the Texas Portfolio, BMR
made a preliminary reduction in its fee in the amount of $35,493 and $26,769,
respectively, and $18,600 of expenses related to the operation of the Texas
Portfolio were allocated, on a preliminary basis, to BMR.
Except as to Trustees of the Portfolios who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their services to
the Portfolios out of such investment adviser fee. Investors Bank & Trust
Company (IBT), an affiliate of EVM and BMR, serves as custodian of the
Portfolios. Pursuant to the custodian agreements, IBT receives a fee reduced by
credits which are determined based on the average daily cash balances each
Portfolio maintains with IBT. Certain of the officers and Trustees of the
Portfolios are officers and directors/trustees of the above organizations.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
(3) INVESTMENTS
Purchases and sales of investments, other than U.S. Government securities and short-term obligations, for the six months ended
January 31, 1995 were as follows:
ARIZONA PORTFOLIO COLORADO PORTFOLIO CONNECTICUT PORTFOLIO MICHIGAN PORTFOLIO
------------------- -------------------- ---------------------- ------------------
<S> <C> <C> <C> <C>
Purchases $27,553,527 $ 18,524,608 $ 33,837,755 $ 53,013,568
Sales 30,919,582 16,284,906 31,294,325 56,958,256
</TABLE>
<TABLE>
<CAPTION>
MINNESOTA PORTFOLIO NEW JERSEY PORTFOLIO PENNSYLVANIA PORTFOLIO TEXAS PORTFOLIO
------------------- -------------------- ---------------------- ------------------
<S> <C> <C> <C> <C>
Purchases $33,954,813 $135,559,066 $134,372,094 $ 6,675,079
Sales 29,908,250 143,934,719 161,178,172 6,521,347
</TABLE>
67
<PAGE> 78
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
(4) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized depreciation/appreciation in value of the investments
owned by each Portfolio at January 31, 1995, as computed on a federal income tax
basis, were as follows:
ARIZONA COLORADO CONNECTICUT MICHIGAN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Aggregate Cost $148,292,359 $ 48,064,873 $198,211,032 $191,744,708
------------ ------------ ------------ ------------
Gross unrealized depreciation $ 6,619,302 $ 1,964,752 $12,280,662 $ 7,189,017
Gross unrealized appreciation 2,364,913 464,768 1,102,182 2,880,882
------------ ------------ ------------ ------------
Net unrealized depreciation $ 4,254,389 $ 1,499,984 $11,178,480 $ 4,308,135
============ ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
MINNESOTA NEW JERSEY PENNSYLVANIA TEXAS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Aggregate Cost $ 83,080,772 $400,119,549 $497,750,345 $ 27,503,310
------------ ------------ ------------ ------------
Gross unrealized depreciation $ 2,992,871 $ 9,698,548 $21,989,852 $ 1,181,520
Gross unrealized appreciation 790,357 5,806,438 6,377,337 298,293
------------ ------------ ------------ ------------
Net unrealized depreciation $ 2,202,514 $ 3,892,110 $15,612,515 $ 883,227
============ ============ =========== ============
<FN>
--------------------------------------------------------------------------------------------------------------------
(5) LINE OF CREDIT
The Portfolios participate with other portfolios and funds managed by BMR and
EVM in a $120 million unsecured line of credit agreement with a bank. The line
of credit consists of a $20 million committed facility and a $100 million
discretionary facility. Borrowings will be made by the Portfolios solely to
facilitate the handling of unusual and/or unanticipated short-term cash
requirements. Interest is charged to each portfolio or fund based on its
borrowings at an amount above either the bank's adjusted certificate of deposit
rate, a variable adjusted certificate of deposit rate, or a federal funds
effective rate. In addition, a fee computed at an annual rate of 1/4 of 1% on
the $20 million committed facility and on the daily unused portion of the $100
million discretionary facility is allocated among the participating funds and
portfolios at the end of each quarter. The Portfolios did not have any
significant borrowings or allocated fees during the period. As of January 31,
1995, the Michigan Portfolio had a balance outstanding of $1,478,000 pursuant to
this line of credit.
--------------------------------------------------------------------------------------------------------------------
(6) FINANCIAL INSTRUMENTS
The Portfolios regularly trade in financial instruments with off-balance sheet
risk in the normal course of their investing activities to assist in managing
exposure to various market risks. These financial instruments include written
options and futures contracts and may involve, to a varying degree, elements of
risk in excess of the amounts recognized for financial statement purposes.
The notional or contractual amounts of these instruments represent the
investment a Portfolio has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
</TABLE>
A summary of obligations under these financial instruments at January 31, 1995
is as follows:
<TABLE>
<CAPTION>
FUTURES
CONTRACTS NET UNREALIZED
PORTFOLIO EXPIRATION DATE CONTRACTS POSITION DEPRECIATION
-------------- ---------------- ------------------------- -------- --------------
<S> <C> <C> <C> <C>
Arizona -- -- -- --
Colorado -- -- -- --
Connecticut 3/95 95 U.S. Treasury Futures Short $174,476
Michigan 3/95 141 U.S. Treasury Bonds Short 235,303
Minnesota 3/95 49 U.S. Treasury Bonds Short 82,772
New Jersey 3/95 161 U.S. Treasury Bonds Short 283,930
Pennsylvania 3/95 86 Municipal Bonds Short 215,769
Texas 3/95 21 U.S. Treasury Bonds Short 35,045
<FN>
At January 31, 1995 each Portfolio had sufficient cash and/or securities to cover margin requirements on open
futures contracts.
</TABLE>
68
<PAGE> 79
<TABLE>
<CAPTION>
Investment Management
----------------------------------------------------------------------------------------------------------
<S> <C> <C>
FUNDS OFFICERS INDEPENDENT TRUSTEES
THOMAS J. FETTER DONALD R. DWIGHT
President President, Dwight Partners, Inc.
Chairman, Newspaper of New England, Inc.
JAMES B. HAWKES
Vice President, Trustee SAMUEL L. HAYES, III
Jacob H. Schiff Professor of Investment
ROBERT MACINTOSH Banking, Harvard University Graduate
Vice President School of Business Administration
JAMES L. O'CONNOR NORTON H. REAMER
Treasurer President and Director,
United Asset Management Corporation
BARBARA E. CAMPBELL
Assistant Treasurer JOHN L. THORNDIKE
Director, Fiduciary Trust Company
DOUGLAS C. MILLER
Assistant Treasurer JACK L. TREYNOR
Investment Adviser and Consultant
THOMAS OTIS
Secretary
JANET E. SANDERS
Assistant Treasurer and
Assistant Secretary
----------------------------------------------------------------------------------------------------------
PORTFOLIOS OFFICERS TIMOTHY T. BROWSE -- Michigan & Texas
THOMAS J. FETTER TAX FREE Portfolio
President
CYNTHIA J. CLEMSON -- Arizona &
JAMES B. HAWKES Colorado TAX FREE Portfolio
Vice President, Trustee
DAVID C. REILLY -- Pennsylvania Tax Free
ROBERT MACINTOSH Portfolio
Vice President and Portfolio
Manager of Minnesota and New Jersey INDEPENDENT TRUSTEES
Tax Free Portfolios
DONALD R. DWIGHT
JAMES L. O'CONNOR President, Dwight Partners, Inc.
Treasurer Chairman, Newspaper of New England, Inc.
BARBARA E. CAMPBELL SAMUEL L. HAYES, III
Assistant Treasurer Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate
DOUGLAS C. MILLER School of Business Administration
Assistant Treasurer
NORTON H. REAMER
THOMAS OTIS President and Director,
Secretary United Asset Management Corporation
JANET E. SANDERS JOHN L. THORNDIKE
Assistant Treasurer and Assistant Secretary Director, Fiduciary Trust Company
PORTFOLIO MANAGERS JACK L. TREYNOR
Investment Adviser and Consultant
NICOLE ANDERES -- Connecticut Tax
Free Portfolio
</TABLE>
69
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--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PORTFOLIO INVESTMENT ADVISER
Boston Management and Research
24 Federal Street
Boston, MA 02110
FUND ADMINISTRATOR
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
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--------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Funds, including its distribution
plan, sales charges and expenses. Please read the prospectus carefully before
you invest or send money.
EATON VANCE
MUNICIPALS TRUST
24 FEDERAL STREET
BOSTON, MA 02110
M-TFCSRC
