<PAGE> 1
EATON VANCE MUNICIPALS TRUST
FOR THE FUNDS:
- EV Traditional Alabama Municipals Fund
- EV Traditional Arkansas Municipals Fund
- EV Traditional Georgia Municipals Fund
- EV Traditional Kentucky Municipals Fund
- EV Traditional Louisiana Municipals Fund
- EV Traditional Maryland Municipals Fund
- EV Traditional Missouri Municipals Fund
- EV Traditional North Carolina Municipals Fund
- EV Traditional Oregon Municipals Fund
- EV Traditional South Carolina Municipals Fund
- EV Traditional Tennessee Municipals Fund
- EV Traditional Virginia Municipals Fund
[LOGO]
SEMI-ANNUAL SHAREHOLDER REPORT
FEBRUARY 29, 1996
<PAGE> 2
Table of Contents
<TABLE>
<CAPTION>
ITEM PAGE
<S> <C>
President's letter to shareholders ................................... 3
Six-month results, listed by state ................................... 4
Management Reports:
EV Traditional Alabama Municipals Fund ....................... 5
EV Traditional Arkansas Municipals Fund ...................... 6
EV Traditional Georgia Municipals Fund ....................... 7
EV Traditional Kentucky Municipals Fund ...................... 8
EV Traditional Louisiana Municipals Fund ..................... 9
EV Traditional Maryland Municipals Fund ...................... 10
EV Traditional Missouri Municipals Fund ...................... 11
EV Traditional North Carolina Municipals Fund ................ 12
EV Traditional Oregon Municipals Fund ....................... 13
EV Traditional South Carolina Municipals Fund ................ 14
EV Traditional Tennessee Municipals Fund ..................... 15
EV Traditional Virginia Municipals Fund ...................... 16
Financial Results ............................................ 17
</TABLE>
2
<PAGE> 3
To Shareholders:
The municipal bond market rallied strongly throughout 1995, gaining back most of
the losses of the previous year. Twice during the year, the Federal Reserve
lowered short-term interest rates, further buoying the market.
Realistically, it may be difficult for the market to match last year's gains.
Still, there are many reasons to be optimistic about the municipal bond market
in 1996 and to believe that an investment in municipal bonds represents very
good value and should be a part of a wise investor's fixed-income portfolio.
The U.S. economy continues in its favorable pattern of slow growth and low
inflation, which is a good environment for the municipal bond market.Another
plus is that if the Fed decides to make further moves during 1996, it is more
likely to lower rates than raise them.
During 1995 the municipal market underperformed the taxable market because of
concern about the possible passage of major tax reform legislation. While such
concerns are likely to persist this year, we at Eaton Vance continue to believe
there is little chance that significant reform, in the form of a flat tax,
consumption tax or value-added tax, will be enacted in the foreseeable future.
While flat tax and other reform proposals will be debated, especially during the
Presidential campaigns, they are so controversial and sweeping that we believe
the process needed to secure agreement and subsequent passage of a plan is, at
best, years away.
TAX-EXEMPT BONDS YIELD 85% OF TREASURY YIELDS
<TABLE>
<C> <C>
30-YR AAA GENERAL OBLIGATION (GO) BONDS* 5.45%
TAXABLE EQUIVALENT YIELD OF INVESTMENT FOR COUPLE IN 36% TAX BRACKET 8.52%
30-YEAR TREASURY BONDS 6.41%
</TABLE>
Principal and interest payments of Treasury securities are guaranteed by the
U.S. government.
* GO yield is a compilation of a representative variety of general obligation
bonds and is not necessarily represented by the Fund's yield. Statistics as
of 2/29/96.
Past performance is no guarantee of future results.
Source: Bloomberg, L.P.
At the same time, the Presidential campaigns could provide impetus to proposals
that should prove favorable to the bond market. Any positive result in this area
is likely to provide additional momentum to the bond market through fiscal
restraint and, therefore, lower yields.
These factors have combined to produce a significant opportunity for municipal
bond investors. To the extent that fears about tax reform depress prices,
investors can enter the market at a discount. To the extent that budget reform
measures lessen the Federal government's borrowing needs, investors may be
expected to reap the rewards through a strengthening bond market. As always,
achieving investment rewards depends on an investor's willingness to adopt a
long-term investment horizon. That's why we at Eaton Vance believe patience is a
key to successful investing.+
[PHOTO]
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter
President,
April 9, 1996
+ A portion of the Portfolios' income could be subject to Federal alternative
minimum tax.
3
<PAGE> 4
INFORMATION ABOUT YOUR MUTUAL FUND INVESTMENT
<TABLE>
<CAPTION>
FINANCIAL DATA:
RESULTS FOR THE SIX MONTHS Dividends paid by Fund's NAV per Fund's distribution
ENDING FEBRUARY 29, 1996 Fund during period share at 2/29/96 rate at 2/29/96
<S> <C> <C> <C> <C>
EV Traditional ALABAMA $0.226 $9.74 5.07% [GRAPHIC - ALABAMA]
Municipals Fund
EV Traditional ARKANSAS $0.231 $9.79 5.15% [GRAPHIC - ARKANSAS]
Municipals Fund
EV Traditional GEORGIA $0.225 $9.43 5.21% [GRAPHIC - GEORGIA]
Municipals Fund
EV Traditional KENTUCKY $0.231 $9.53 5.27% [GRAPHIC - KENTUCKY]
Municipals Fund
EV Traditional LOUISIANA $0.246 $9.58 5.57% [GRAPHIC - LOUISIANA]
Municipals Fund
EV Traditional MARYLAND $0.228 $9.69 5.14% [GRAPHIC - MARYLAND]
Municipals Fund
EV Traditional MISSOURI $0.227 $9.75 5.10% [GRAPHIC - MISSOURI]
Municipals Fund
EV Traditional NORTH CAROLINA $0.230 $9.53 5.27% [GRAPHIC - NORTH CAROLINA]
Municipals Fund
EV Traditional OREGON $0.223 $9.64 5.06% [GRAPHIC - OREGON]
Municipals Fund
EV Traditional SOUTH CAROLINA $0.225 $9.66 5.10% [GRAPHIC - SOUTH CAROLINA]
Municipals Fund
EV Traditional TENNESSEE $0.233 $9.59 5.30% [GRAPHIC - TENNESSEE]
Municipals Fund
EV Traditional VIRGINIA $0.235 $9.57 5.33% [GRAPHIC - VIRGINIA]
Municipals Fund
<CAPTION>
TAX DATA:
If your combined Federal The after-tax equivalent
& state tax rate is... yield you would need is...
<S> <C> <C>
EV Traditional ALABAMA 39.20% 8.32%
Municipals Fund
EV Traditional ARKANSAS 40.48% 8.63%
Municipals Fund
EV Traditional GEORGIA 39.84% 8.63%
Municipals Fund
EV Traditional KENTUCKY 42.88% 9.20%
Municipals Fund
EV Traditional LOUISIANA 39.84% 9.25%
Municipals Fund
EV Traditional MARYLAND 41.12% 8.69%
Municipals Fund
EV Traditional MISSOURI 39.84% 8.43%
Municipals Fund
EV Traditional NORTH CAROLINA 40.96% 8.87%
Municipals Fund
EV Traditional OREGON 41.76% 8.67%
Municipals Fund
EV Traditional SOUTH CAROLINA 40.48% 8.54%
Municipals Fund
EV Traditional TENNESSEE 39.84% 8.78%
Municipals Fund
EV Traditional VIRGINIA 39.68% 8.79%
Municipals Fund
</TABLE>
4
<PAGE> 5
EV Traditional Alabama Municipals Fund
THE STATE OF THE STATE: Alabama
The Alabama economy still relies mostly on manufacturing, though it has
diversified somewhat in recent years. Much of the state's economic growth
recently has been in the service sector, with high technology also contributing
to the state's economic growth.
The state weathered the recession of the early 1990s in relatively good shape,
and has demonstrated steady gains in several economic indicators during the
mid-1990s.
Alabama has put much effort into attracting new businesses, particularly those
that will allow its economy to diversify. An economic development plan that
began in 1993 has brought the state significant levels of new business
investment. The largest new facility announced to date is the Mercedes Benz
sport utility vehicle manufacturing plant in Vance. It is estimated that this
plant, which is expected to be in operation in 1997, will add 1,500 direct and
2,800 indirect jobs to the state's economy by the year 2000.
[GRAPHIC]
PORTFOLIO OVERVIEW
Based on market value as of February 29, 1996
<TABLE>
<S> <C>
Number of issues....................................... 68
Average quality........................................ AA-
Investment grade....................................... 97.6%
Effective maturity..................................... 12.35 yrs.
Largest sectors:
Insured water & sewer............................... 15.2%*
Insured education................................... 13.5*
Hospitals........................................... 11.1
Industrial development revenue...................... 11.0
Insured utilities................................... 6.4*
General obligations................................. 5.8
</TABLE>
* Private insurance does not remove the market risks that are associated with
these investments.
Unemployment rates in Alabama have been at approximately the national average.
The state has moderate debt levels that benefit from a rapid amortization
schedule.
YOUR INVESTMENT AT WORK
Alabama State University
Tuition and Fee Revenue Bonds
The proceeds of this 1995 bond issue were used to finance capital improvements
to the University's facilities in Montgomery. The improvements included the
acquisition of land adjacent to its campus and demolition of existing buildings,
site preparation, landscaping and infrastructure improvements.
Alabama State University was founded in 1866 and in 1995 it had an enrollment of
4,967, more than 1,800 of them from out-of-state. The University provides degree
programs in 39 undergraduate and 19 graduate fields of study in its Colleges of
Music, Business Administration, Education and Arts and Sciences.
The bond issue totaled nearly $7.7 million.
FROM THE PORTFOLIO MANAGER:
[PHOTO]
"We are always sensitive to the call protection features of the Portfolio. As a
result, during this six-month period, when the market's interest in call
protection has been heightened, our sensitivity has been rewarded. We've
continued to look to improve the Portfolio's call protection features. In a
number of cases, we've moved out of bonds with 7 or 8 years of call protection
remaining and moved into those offering 10 years of protection.
"When appropriate, we've purchased some lower-rated coupons for the Portfolio.
We are paying close attention to the Portfolio's coupon structure because we
want to ensure performance going forward.
"We continue to be optimistic about municipal bonds because we believe that the
current economic environment, with diminished fears of passage of a flat tax and
no significant expectation of inflation, favors municipal bonds as an
investment."
- Timothy T. Browse
5
<PAGE> 6
EV Traditional Arkansas Municipals Fund
THE STATE OF THE STATE: Arkansas
The Arkansas economy continues to grow slowly but steadily. Its economy is
diversified, and its growth levels are expected to exceed the national average
by a small amount over the next few years.
Manufacturing, including the state's large food processing industry, electrical
and wood products, remains the state's largest sector in terms of employment,
with the combined employment levels of the wholesale and retail sectors close
behind. The food processing industry, in particular, has caused the state's
economy to grow.
In the near future, the construction industry is expected to grow, and increases
in the number of people employed in service industries should offset any losses
in manufacturing jobs. The overall economy is expected to show slow, steady
growth.
State finances are helped by the state's low level of revenue-supported public
debt and consistently conservative fiscal operations. An additional positive
feature is the fact that all new general obligation debt must be authorized by
voters, further limiting future issuance.
[GRAPHIC]
PORTFOLIO OVERVIEW
Based on market value as of February 29, 1996
<TABLE>
<S> <C>
Number of issues....................................... 67
Average quality........................................ A+
Investment grade....................................... 94.2%
Effective maturity..................................... 13.21 yrs.
Largest sectors:
Hospitals........................................... 14.8%
Industrial development/pollution
control revenue..................................... 14.4
Housing............................................. 11.3
Electric utilities.................................. 9.7
Water & sewer....................................... 9.1
</TABLE>
YOUR INVESTMENT AT WORK
City of Blytheville
Nucor Corporation Project
Proceeds of this 1993 bond issue were used to finance construction of a steel
mill in the Town of Hickman, leased and operated by Nucor Corporation.
The plant was designed to manufacture sheet steel out of scrap steel. The scrap
steel first is melted in electric arc furnaces. It is then cast into thin slabs
and rolled into coils. Nucor Corporation is a well-known steel manufacturer.
The proceeds also financed construction of the plant's solid waste recycling
facilities. The total amount of the bond issue was $16 million.
FROM THE PORTFOLIO MANAGER
[PHOTO]
"Because there is a limited supply of Arkansas bonds and because new issuance is
low, the state's bonds tend to trade at high prices. However, when the right
opportunities present themselves, we move into bonds that afford the Portfolio
an even greater amount of call protection.
"We always look for opportunities to diversify the Portfolio and to add value to
it. This diversification gives the Portfolio the flexibility to buy what is
attractive without concern for sector overweightings that might otherwise occur.
"We continue to be optimistic about the prospects for municipal bond
performance.As fears about the possibility of a flat tax dissipate, we expect
that municipal bonds will outperform."
- Timothy T. Browse
6
<PAGE> 7
EV Traditional Georgia Municipals Fund
THE STATE OF THE STATE: Georgia
Georgia continues to lead its region in economic strength, with much of the
activity centered in the Atlanta area. Its position is being helped by the
extraordinary amount of economic activity connected with the 1996 Olympic Games,
which will be held in the Atlanta area.
Short-term economic activity generated by the Olympics is estimated at more than
$5 billion, split roughly equally between spending by the Atlanta Committee for
the Olympic Games and by out- of-staters.
While much of the construction is being done without new bond issuance, the
project will have a dramatic effect on the region's economy. Hosting the Games
is expected to add $1.9 billion in earnings to the state's economy and more than
77,000 jobs, according to the University of Georgia's Selig Center for Economic
Growth. Many of these jobs will be in the food, lodging and amusement
industries.
[GRAPHIC]
PORTFOLIO OVERVIEW
Based on market value as of February 29, 1996
<TABLE>
<S> <C>
Number of issues...................................... 70
Average quality....................................... AA-
Investment grade...................................... 96.3%
Effective maturity.................................... 13.64 yrs.
Largest sectors:
General obligations................................ 16.1%
Utilities.......................................... 15.8
Insured hospitals.................................. 13.6*
Hospitals.......................................... 11.6
Housing............................................ 10.8
</TABLE>
* Private insurance does not remove the market risks that are associated with
these investments.
An added benefit is the infrastructure that will be left behind, including
significant improvements at local colleges and universities, an olympic stadium,
a tennis facility and a horse park.
YOUR INVESTMENT AT WORK
Savannah Economic Development Authority Intercat Project
These bonds were issued to finance the expansion of a manufacturing facility in
Savannah. The proceeds were used to build facilities for Intercat, a producer of
specialized catalysts for the petroleum refining industry.
Intercat is a strong company serving a niche market, and the new facilities
allow the company to help meet rising demand for its products. Tougher
environmental standards have combined with thin operating margins for petroleum
refiners to drive the demand for Intercat's products, which improve the
efficiency of the oil refining process while reducing air pollution.
FROM THE PORTFOLIO MANAGER
[PHOTO]
"The Georgia bond market continues to be characterized by low issuance. However,
when opportunities do present themselves, we have attempted to improve the call
protection of the Fund, as well as to take advantage of relatively narrow
quality spreads between A-rated and insured bonds to upgrade the Portfolio.
"When possible, we also are trying to add some slightly lower-rated bonds,
particularly industrial development bonds, that increase the Portfolio's yield.
We believe this `barbell' structure, emphasizing both high-quality and
high-yielding bonds, provides the best value to the Portfolio at this time.
"We remain optimistic about the future performance of the municipal bond market,
in part because of the diminished prospects for tax reform that would include a
flat tax or similar proposal."
- Cynthia J.Clemson
7
<PAGE> 8
EV Traditional Kentucky Municipals Fund
THE STATE OF THE STATE: Kentucky
The commonwealth's employment has traditionally focused on natural resources,
with tobacco farming, mining and manufacturing playing dominant roles. However,
like many other states that have seen significant growth recently, the service
sector is becoming more important.
Kentucky has aggressively sought new business in recent years, a strategy that
has paid off with significant economic development and a number of substantial
commitments to future expansion of facilities. In economic terms, the results of
these developments have been predictable: Personal income levels among
Kentucky's residents has improved at a rate exceeding the national average,
while unemployment has declined to about the national average.
The commonwealth's financial outlook continues to be generally positive.
Although its level of growth through the rest of the decade may not match levels
achieved in the last few years, continued strong efforts to attract business and
efforts to improve the state's schools are expected to continue to be beneficial
to Kentucky's economy.
[GRAPHIC]
PORTFOLIO OVERVIEW
Based on market value as of February 29, 1996
<TABLE>
<S> <C>
Number of issues....................................... 91
Average quality........................................ AA-
Investment grade....................................... 94.1%
Effective maturity..................................... 13.23 yrs.
Largest sectors:
Lease revenue/certificate of participation.......... 21.7%
Industrial development/pollution
control revenue..................................... 12.6
Insured hospitals................................... 11.3*
Insured water and sewer............................. 8.7*
Utilities........................................... 6.5
</TABLE>
* Private insurance does not remove the market risks that are associated with
these investments.
YOUR INVESTMENT AT WORK
Henderson County
MacMillan Bloedel Project
This 1995 bond issue provides benefits in two ways: It allows a company to
complete its manufacturing facility, resulting in jobs, and it helps the company
keep the environment clean.
The proceeds are being used to finance construction of a sewage and solid waste
disposal and recycling facility at the MacMillan Bloedel Ltd. plant in Henderson
County. MacMillan Bloedel is a large paper manufacturer based in British
Columbia, Canada. It will manufacture containerboard products at its new
facility.
A total of $34.2 million in bonds were issued for the project.
FROM THE PORTFOLIO MANAGER
[PHOTO]
"I have been looking to upgrade the Portfolio's overall call protection when we
find good opportunities to do so.
"When the Portfolio experienced a great deal of growth in 1992 and 1993, we
purchased a number of new issues with 10 years of call protection. With two
years having passed and with those bonds now having just 8 years of call
protection, we're swapping into bonds that give us two or more additional years
of protection. In addition, we're always on the lookout for noncallable bonds
when their prices are reasonable."
- David C. Reilly
8
<PAGE> 9
EV Traditional Louisiana Municipals Fund
THE STATE OF THE STATE: Louisiana
The Louisiana economy continues to be hindered by serious problems within the
state's revenue-raising structure. Specifically, its homestead exemption,
removing taxes on the first $75,000 of a resident's home, has caused a
continuing constraint on revenues and has forced the state to use a variety of
other taxes to try to raise enough revenues to finance its operations.
Louisiana depends on the oil industry for much of its revenues. However, because
the markets for petrochemical products has remained relatively flat, the state
has not been able to rely on increases in tax revenues from petroleum
production. The weak oil market has had another serious effect: Energy sector
employment levels have decreased since the mid-1980s.
As a result of this weakness, the service sector has surpassed the energy
industry as a major source of employment. While Louisiana has seen a modest
recovery in the mid 1990s, prospects for a dramatic economic upturn are slim.
[GRAPHIC]
PORTFOLIO OVERVIEW
Based on market value as of February 29, 1996
<TABLE>
<S> <C>
Number of issues....................................... 49
Average quality........................................ AA-
Investment grade....................................... 97.2%
Effective maturity..................................... 18.50 yrs.
Largest sectors:
Housing............................................. 31.9%
Industrial development revenue ..................... 16.1
Insured special tax................................. 12.4*
Healthcare (non-hospital) .......................... 8.0
Hospitals........................................... 6.0
</TABLE>
* Private insurance does not remove the market risks that are associated with
these investments.
The state tried to diversify revenue sources by introducing gambling, with mixed
results. It helped increase employment somewhat, but gambling in New Orleans has
dropped below initial projections. The state will continue to seek other ways to
diversify.
YOUR INVESTMENT AT WORK
Mississippi River Bridge Authority Bridge Revenue Bonds
These bonds, issued in 1992, were used to finance improvements to two bridges
across the Mississippi at New Orleans. The bond issue raised approximately $27
million.
Among the projects receiving funds were reconstruction of an expressway from
Simon Bolivar Street to Annunciation Street; redecking and strengthening of the
Authority's Bridge No. 1; and completion of the west approach to Bridge No. 1.
Bridge No. 1 was built in 1958. The second bridge was built nearby and opened to
traffic in 1989.The funds also were used for reconstruction of Victory
Park Drive, landscaping and beautification.
The Authority operates the two bridges as well as three ferries that carry
vehicles and pedestrians across the Mississippi.
FROM THE PORTFOLIO MANAGER
[PHOTO]
"When credit quality spreads are as tight as they are now, we try to purchase
bonds that will upgrade the overall quality of the Portfolio. At times, this
goal is difficult to achieve in Louisiana because of the prevalence of bonds
rated Baa or BBB.
"However, Louisiana's quality profile does give us an opportunity to use the
skills of our Research Department to ferret out bonds that provide especially
good investment opportunities but that are overlooked by other investors.
"We have reduced our dependence on bonds in the housing sector, choosing instead
to move into more liquid credits. We also are monitoring the Portfolio's
exposure to the many industrial development bonds that have been used to finance
projects for paper companies."
- Robert B. MacIntosh
9
<PAGE> 10
EV Traditional Maryland Municipals Fund
THE STATE OF THE STATE: Maryland
The economic base in Maryland is well diversified, though the state depends on
the Federal government as the source of a significant proportion of its
employment. The state's economy is also helped by a high per- capita income.
The recession of the early 1990s hurt the state's economy.As a result,
Maryland's employment growth has lagged the nation's during the 1990s.Despite
these factors, Maryland's high per-capita income, strong diverse economic base
and strong state finances give it a considerable advantage.
Much of the state's growth in the near future will come from the service sector.
It is likely that the state will face some Federal job cuts, but should be able
to count on gains in other areas to make up the difference during the remainder
of the decade.
Maryland's government is managed conservatively, with a goal of maintaining the
state's coveted AAA credit rating. While it cannot be called a low-debt state,
its levels of debt are reasonable, because the state constitution requires that
all general obligation debt be retired within 15 years of issuance.
[GRAPHIC]
PORTFOLIO OVERVIEW
Based on market value as of February 29, 1996
<TABLE>
<S> <C>
Number of issues....................................... 70
Average quality........................................ AA-
Investment grade....................................... 96.5%
Effective maturity..................................... 16.43 yrs.
Largest sectors:
Hospitals........................................... 23.0%
Insured hospitals................................... 12.5*
Industrial development revenue...................... 11.8
General obligations................................. 8.9
Housing............................................. 7.3
</TABLE>
* Private insurance does not remove the market risks that are associated with
these investments.
YOUR INVESTMENT AT WORK
Energy Financing Administration AES Warrior Run Project
This bond issue is being used to finance some of the costs of a coal-burning,
electricity-generating project near the City of Cumberland. When completed, the
facility is expected to generate electricity for sale to the Potomac Edison
Company under a 30-year agreement with the utility. It also will produce carbon
dioxide for sale to the merchant gas market.
The facility will include a 180-megawatt coal-fired steam electric cogeneration
facility, an electric transmission line and a carbon dioxide production plant.
The 1995 bond issue totals more than $73 million, which is financing only a
portion of the project's total cost. The remainder of the money will come from
loans and contributions by AES WR Limited Partnership, the entity that is
constructing the facility.
FROM THE PORTFOLIO MANAGER
[PHOTO]
"The bond market in recent months has paid unusual attention to the call
features of bonds. Because we are always sensitive to call protection when
adding to the Portfolio, this market focus gives the Portfolio an advantage.
Still, when possible, we've sought to improve the Portfolio's call protection
features.
"The Portfolio is fairly well-balanced in terms of the sectors represented.
Because Maryland hospitals in general have better financial structures than
those in many other states, we are comfortable holding a slightly greater
proportion of hospitals than we do elsewhere. We continue to look for
opportunities to diversify so the Portfolio can move into and out of sectors in
the future without worries about overweighting."
- Timothy T. Browse
10
<PAGE> 11
EV Traditional Missouri Municipals Fund
THE STATE OF THE STATE: Missouri
Missouri's economy continues to be strong, helped by a well diversified mix of
industries. Job growth in 1995 was above-average, primarily because of an
increase in service sector jobs.
The state continues to rely on motor vehicle manufacturing and defense-related
industries as its primary employers within the manufacturing sector. However,
those have been joined by publishing, health care and food processing as
contributors to the state's economic strength.
Tourism continues to grow in Missouri, with Branson, once a small town, now a
major resort destination, and St. Louis winning convention visits from large
organizations.
State finances have benefited from conservative management as well as a growing
economy. The overall debt burden is relatively light. It is expected that the
state will be able to maintain this favorable financial position. The state's
economy is expected to continue to grow at a rate exceeding the national
average. Unemployment is expected to remain steady in the near future.
[GRAPHIC]
PORTFOLIO OVERVIEW
Based on market value as of February 29, 1996
<TABLE>
<S> <C>
Number of issues....................................... 75
Average quality........................................ AA
Investment grade....................................... 93.8%
Effective maturity..................................... 14.58 yrs.
Largest sectors:
Insured hospitals................................... 16.7%*
Lease/certificate of participation.................. 9.3
Hospitals........................................... 8.4
Insured utilities................................... 7.1*
Water & sewer....................................... 6.2
</TABLE>
* Private insurance does not remove the market risks that are associated with
these investments.
YOUR INVESTMENT AT WORK
Kansas City International Airport AFCO Cargo Project
These bonds financed the purchase and rehabilitation of an aircraft parking ramp
at the airport.
The project takes advantage of the huge increase in cargo being sent by air.
This industry has doubled in the past 10 years because of an increase in the
amount of value-added goods produced in the U.S. and an increase in just-in-time
inventory management.
Kansas City International Airport is strategically located at the intersection
of two major interstate expressways, I-35 and I-70, and is within 600 miles of
half of the nation's manufacturing firms. The project's revenues come from lease
agreements with major express shippers, including Airborne Express, DHL and
Burlington Air Express.
FROM THE PORTFOLIO MANAGER:
[PHOTO]
"We have recently added several new industrial revenue bonds to the Portfolio.
Bonds such as the Kansas City International Airport bonds provide the Portfolio
with good income as well as diversification.
"Healthcare also continues to be an interesting sector in the Missouri market,
as hospitals continue to provide opportunity despite ongoing uncertainties in
the U.S. healthcare market. Our research staff provides us with the tools
necessary to discern which hospitals will ultimately survive and thrive.
"During this six-month period, the Missouri market continued to see low bond
issuance. However, we continue to look for opportunities to increase call
protection."
- Cynthia J. Clemson
11
<PAGE> 12
EV Traditional North Carolina Municipals Fund
THE STATE OF THE STATE: North Carolina
The North Carolina economy continues to be strong. The state is continuing its
move from a manufacturing economy, dominated by textiles and tobacco, to a more
diversified economic base, though it still is heavily influenced by
manufacturing and ranks eighth among the states in terms of manufacturing
employment.
Growth has been particularly strong in the state's three major metropolitan
areas -- Charlotte, the Research Triangle Park area and Winston-Salem. These
areas have seen considerable new business growth and, with it, increases in
construction activity, housing starts and infrastructure development. The state
economy is not expected to perform as well in the 1990s as it did in the
previous decade. However, North Carolina, led by increases in nonmanufacturing
jobs, still is expected to grow at a pace that will place it among the leaders
throughout the country.
In terms of state finances, North Carolina remains one of the strongest states
in the nation. Its finances have traditionally benefited from its conservative
fiscal management policies and low levels of debt. Even though debt issuance has
increased in recent years, its debt levels still remain low.
[GRAPHIC]
PORTFOLIO OVERVIEW
Based on market value as of February 29, 1996
<TABLE>
<S> <C>
Number of issues...................................... 89
Average quality....................................... AA-
Investment grade...................................... 98.6%
Effective maturity.................................... 14.10 yrs.
Largest sectors:
Hospitals.......................................... 17.2%
Housing............................................ 10.8
Industrial development revenue..................... 10.1
Insured hospitals.................................. 9.7*
Insured lease/certificates of
participation revenues............................. 9.0*
</TABLE>
* Private insurance does not remove the market risks that are associated with
these investments.
YOUR INVESTMENT AT WORK
Medical Care Commission Rex Hospital Project
This 1993 bond issue provides funds for a major capital expenditure project at
Rex Hospital in Raleigh involving a variety of improvements.
Among the uses for the $71 million are construction of ambulatory care and
cancer care centers, additions to the hospital's information system,
construction of new critical care units, construction of two parking decks, and
renovations.
The ambulatory care center, the largest of these expenditures, includes
construction of a 150,000 square foot building. The center will offer radiology,
laboratory, diagnostic and home health services for outpatients who do not
require surgery.
FROM THE PORTFOLIO MANAGER
[PHOTO]
"North Carolina offers a credit rating that is exceptionally high. Because its
state and local general obligation bonds carry high credit ratings, we have no
qualms about including a significant number of them in the Portfolio. We also
hold a significant proportion of electric power issues, which we view as having
good value.
"New bond issuance remains low, which means that North Carolina bonds, in
general, are expected to hold their relative value.
"During this period, our strategy in managing the Portfolio has focused on
improving its overall call protection features wherever possible. In addition,
we've focused on maintaining the Portfolio's high quality at a time of tight
interest rate spreads."
12
<PAGE> 13
EV Traditional Oregon Municipals Fund
THE STATE OF THE STATE: Oregon
Oregon is enjoying a particularly strong period of economic growth, fueled by
the state's growing economic base and strong finances.
Employment increased at a rate of more than 3.8% during 1995, with nearly half
the gain in the service sector. Interestingly, most of the growth also has
resulted from in-migration. Employers are finding Oregon an attractive place to
locate because of its skilled workers and relatively low real estate prices. The
number of high technology manufacturing companies locating in Oregon in recent
years is quite large and includes Intel Corp. and Hewlett-Packard Co.
Fueled by growth in high technology industries and continued population
increases, the construction sector continued to expand solidly. In contrast,
employment in the lumber and wood products industries continued to decline, with
a 6% drop in employment in 1995 alone. During the next few years, the state is
expected to continue to attract new residents, particularly from California.
[GRAPHIC]
PORTFOLIO OVERVIEW
Based on market value as of February 29, 1996
<TABLE>
<S> <C>
Number of issues....................................... 80
Average quality........................................ AA-
Investment grade....................................... 96.8%
Effective maturity..................................... 13.62 yrs.
Largest sectors:
General obligations................................. 15.8%
Utilities........................................... 12.6
Housing............................................. 10.6
Industrial development/pollution
control revenue..................................... 7.4
Special tax revenue................................. 7.3
</TABLE>
YOUR INVESTMENT AT WORK
Port of Astoria Pollution Control Refunding Bonds
The proceeds of this 1993 bond issue were used to refund 1975 bonds that were
used to build pollution control facilities for the Wauna paper mill in
Clatskanie.
At the time, the mill was owned by Crown Zellerbach Corp. In 1993 it was
operated by James River Corp. The pollution control project included secondary
treatment facilities, a lime kiln scrubber, an auxiliary incinerator for
noncondensible gases, a brown stock washer hood vent scrubber and vents for the
digester feeder and foam tank to collect and feed gases to the lime kiln or
auxiliary incinerator. All this equipment contributed to the mill's effort to
protect the environment.
The bond proceeds totaled $10 million.
FROM THE PORTFOLIO MANAGER
[PHOTO]
"During this six-month period, we have focused our efforts on improving the
Portfolio's call protection features. We believe interest rates are still on
their way down and that another bond market rally could occur. This makes the
call protection of bonds very important, because we want to maintain our ability
to fully participate in any rally that occurs.
"We are trying to establish and maintain a favorable distributable yield
advantage for the Fund over its competitors. As a result, whenever we are
considering bond trades, we take into account the effect the move would have on
the distributable yield."
13
<PAGE> 14
EV Traditional South Carolina Municipals Fund
THE STATE OF THE STATE: South Carolina
South Carolina's state finances continue to improve after some difficult years
in the late 1980s and early 1990s. The state has put into effect a number of
reforms to ensure its fiscal stability.
The state's economy has been strong. It continues to reduce its traditional
reliance on agriculture and textiles. In terms of contributions to the state's
employment levels, these sectors have been joined by services, trade and
government. Employment growth has helped offset layoffs from U.S. Navy
facilities in the Charlestown area. These layoffs amounted to some 31,000
military and civilian jobs, as well as indirect employment created by the Navy.
Employers have found South Carolina's economic climate favorable, citing its low
cost of living and nonunion work force. The Bavarian Motor Works plant in
Spartanburg County is now running and is expected to add approximately 4,000
direct and indirect jobs. South Carolina is known as a conservatively run state
with relatively little debt burden. The state also is benefiting from changes in
its budget process that generally are making budgeting more predictable.
[GRAPHIC]
PORTFOLIO OVERVIEW
Based on market value as of February 29, 1996
<TABLE>
<S> <C>
Number of issues...................................... 62
Average quality....................................... AA-
Investment grade...................................... 97.2%
Effective maturity.................................... 14.21 yrs.
Largest sectors:
Industrial development revenue..................... 18.6%
Utilities.......................................... 12.2
Insured utilities.................................. 12.0*
Housing............................................ 11.7
Insured hospitals.................................. 8.5*
</TABLE>
* Private insurance does not remove the market risks that are associated with
these investments.
YOUR INVESTMENT AT WORK
Aiken County Beloit Corp. Project
The proceeds of these 1993 bonds were used to refund existing debt that was used
to finance improvements to a manufacturing facility in Aiken County.
Beloit Corp. is a top manufacturer of paper machines and has established itself
as a leading supplier of equipment for paper de-inking and recycling, a segment
of the market that has shown dramatic growth over the past 5 years. Beloit is a
wholly owned subsidiary of Harnischfeger Industries, a $1 billion company that
manufactures paper machines and mining equipment.
FROM THE PORTFOLIO MANAGER:
[PHOTO]
"During this six-month period, there continued to be low bond issuance in South
Carolina. Because of this and narrow quality spreads, we continued to upgrade
the quality of the Portfolio when possible. We're also paying close attention to
improving call protection in the Portfolio.
"We are optimistic about the future of municipal bond investing for a number of
reasons, not the least of which is the diminished fear that tax reform in the
form of a flat tax will occur. In South Carolina, that optimism is further
buoyed by the scarcity of new bond issuance.We believe that decreasing supply
and a steady or increasing demand should only bode well for the performance of
South Carolina debt."
- Thomas J. Fetter
14
<PAGE> 15
EV Traditional Tennessee Municipals Fund
THE STATE OF THE STATE: Tennessee
Tennessee's economy relies heavily on the employment contributions of the
manufacturing sector, though the service sector has expanded in recent years.
Its growth, slowed by the recession of the early 1990s, has been steady, with
personal income growth greater than that of the nation as a whole. Unemployment
levels remain low.
The state continues to put a great deal of effort into attracting new industry.
Tennessee is now expecting to average more than $2 billion a year in new
construction and expansion of existing facilities, investments that should
contribute to increases in the state's employment levels in future years. Jobs
attributable to the automobile manufacturing industry have shown significant
gains in recent years, while the proportion of jobs in the food and textile
industries have declined. However, apparel manufacturing remains a major
industry in Tennessee.
Tennessee's TennCare comprehensive health plan is expected to strongly benefit
the state in the future. In the short term, it may contribute to some budgetary
uncertainties. State finances continue to be managed conservatively and debt
levels remain low.
[GRAPHIC]
PORTFOLIO OVERVIEW
Based on market value as of February 29, 1996
<TABLE>
<S> <C>
Number of issues...................................... 59
Average quality....................................... AA-
Investment grade...................................... 99.3%
Effective maturity.................................... 13.09 yrs.
Largest sectors:
Industrial development revenue..................... 21.3%
Insured hospitals.................................. 16.8*
Housing............................................ 16.6
Education.......................................... 6.1
Insured water & sewer.............................. 5.0*
</TABLE>
* Private insurance does not remove the market risks that are associated with
these investments.
YOUR INVESTMENT AT WORK
Jackson, TN Health, Education and Housing Facilities Board Lambuth University
The proceeds of these bonds were used for a variety of projects on the campus of
this private, co-educational institution located in Jackson. Founded in 1848,
the university, which is affiliated with the United Methodist Church, offers
programs in liberal arts and sciences.
Since 1990, enrollment has grown significantly, reaching 1,153 in 1995, with
approximately 85% of the undergraduates from the State of Tennessee. The
administration's goal is to have enrollment of 1,350.
The renovation and construction projects financed by the 1995 bond issue will
allow the university to meet its enrollment goals. It financed such capital
projects as upgrading facilities to improve access for handicapped students,
renovating student housing, improving ventilation and air conditioning systems,
remodeling the library and repairing the roofs on the student union and
cafeteria.
The bonds are secured by the general obligation pledge of the university.
FROM THE PORTFOLIO MANAGER
[PHOTO]
"One technique that we use to manage the Portfolio is to employ a 'barbell'-type
strategy that we believe provides the best value. In implementing this strategy,
we try to add both higher quality bonds and those of slightly lower quality that
provide higher yields.
"In particular, we've sought out industrial development bonds because they offer
a combination of yield and security that makes them an attractive addition to
the Portfolio.
"In addition, during this six-month period we have increasingly focused on
improving the Portfolio's overall call protection."
- Cynthia J.Clemson
15
<PAGE> 16
EV Traditional Virginia Municipals Fund
THE STATE OF THE STATE: Virginia
Virginia has conservative fiscal policies and a strong economy, two factors that
have added up to a very high credit rating for its debt. Its economy is in a
period of slow growth, benefiting from diversity that should help the state
through any difficult economic times that might occur.
The strongest areas of growth in 1995 tended to be in the areas of
Charlottesville, Richmond-Petersburg, Roanoke and Northern Virginia, all of
which have significant professional service sectors.
The state's prospects were boosted by the announcement that Motorola Inc. will
build a $1 billion semiconductor manufacturing plant near Richmond. This
facility could employ more than 5,000 after its completion in 1998.
It is expected that during the rest of the decade, the economy will be led by
gains in services, trade and construction. In 1995, Virginia had one of the
lowest unemployment rates in the nation, and it is expected that its
unemployment will remain relatively low in the near future.The state is known
for its strong financial management and low level of debt.
[GRAPHIC]
PORTFOLIO OVERVIEW
Based on market value as of February 29, 1996
<TABLE>
<S> <C>
Number of issues....................................... 93
Average quality........................................ AA-
Investment grade....................................... 95.4%
Effective maturity..................................... 14.45 yrs.
Largest sectors:
Hospitals........................................... 16.7%
Housing............................................. 11.6
Industrial development revenue...................... 10.2
Insured hospitals................................... 8.7*
Lease/certificate of participation.................. 7.5
</TABLE>
* Private insurance does not remove the market risks that are associated with
these investments.
YOUR INVESTMENT AT WORK
Chesapeake Industrial Development Authority Cargill, Inc. Project
These bonds, issued in 1993, were used by the City of Chesapeake's Industrial
Development Authority to finance the refunding of 1978 bonds. The previous issue
was used to finance the costs of building a grain handling facility, which the
Authority then sold to Cargill, Inc.
Cargill, headquartered in Minnetonka, MN, is a multinational corporation that
describes itself as one of the world's largest privately-held companies. Its
primary businesses are the procuring, processing, storing, transporting and
reselling of agricultural and other bulk commodities.
FROM THE PORTFOLIO MANAGER
[PHOTO]
"We believe it's important to maintain the Portfolio's ability to fully
participate in any bond market rally that might occur, so the Portfolio's
overall call protection remains a very important factor. We look for
opportunities to improve the call protection when they present themselves. We've
also been trying to establish and maintain a distributable yield advantage for
the Fund over its competitors.
"Because we believe interest rates still are moving downward and because there
appears to be no substantial threat of inflation, we remain optimistic about
investing in municipal bonds."
- David C. Reilly
16
<PAGE> 17
- ------------
EV Traditional Municipals Funds
Financial Statements
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
ALABAMA ARKANSAS GEORGIA KENTUCKY
FUND FUND FUND FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments --
Identified cost $7,045,414 $ 524,430 $2,182,427 $1,568,222
Unrealized appreciation (depreciation) 285,361 9,531 26,497 (85,690 )
---------- -------- ---------- ----------
Total investment in Portfolio, at value (Note 1A) $7,330,775 $ 533,961 $2,208,924 $1,482,532
Receivable for Fund shares sold 4,117 -- -- --
Receivable from the Administrator (Note 5) 13,749 8,873 11,053 9,534
Deferred organization expenses (Note 1D) 7,518 5,665 6,801 6,960
---------- -------- ---------- ----------
Total assets $7,356,159 $ 548,499 $2,226,778 $1,499,026
---------- -------- ---------- ----------
LIABILITIES:
Dividends payable $ 40,160 $ 1,069 $ 8,691 $ 3,367
Payable for Fund shares redeemed 33,596 -- -- 99,645
Payable to affiliate --
Trustees' fees 25 -- -- --
Accrued expenses 4,203 2,402 2,312 2,727
---------- -------- ---------- ----------
Total liabilities $ 77,984 $ 3,471 $ 11,003 $ 105,739
---------- -------- ---------- ----------
NET ASSETS $7,278,175 $ 545,028 $2,215,775 $1,393,287
========== ======== ========== ==========
SOURCES OF NET ASSETS:
Paid-in capital $7,445,705 $ 556,084 $2,416,560 $1,580,522
Accumulated net realized loss on investment and
financial futures transactions (computed on the basis
of identified cost) (479,049 ) (21,288) (233,530 ) (101,921 )
Accumulated undistributed net investment income 26,158 701 6,248 376
Unrealized appreciation (depreciation) of investments
and financial futures contracts from Portfolio
(computed on the basis of identified cost) 285,361 9,531 26,497 (85,690 )
---------- -------- ---------- ----------
Total $7,278,175 $ 545,028 $2,215,775 $1,393,287
========== ======== ========== ==========
SHARES OF BENEFICIAL INTEREST OUTSTANDING 747,075 55,664 234,922 146,158
========== ======== ========== ==========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets / shares of beneficial interest outstanding) $9.74 $9.79 $9.43 $9.53
------ ------ ------ ------
------ ------ ------ ------
COMPUTATION OF OFFERING PRICE PER SHARE
(100/96.25 of net asset value per share) $10.12 $10.17 $9.80 $9.90
------- ------- ------ ------
------- ------- ------ ------
</TABLE>
On sales of $50,000 or more, the offering price is reduced.
See notes to financial statements
17
<PAGE> 18
- ------------
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
FUND FUND FUND FUND
----------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments --
Identified cost $2,050,152 $ 931,391 $2,847,700 $6,880,165
Unrealized appreciation (depreciation) 55,900 (5,947 ) 36,220 184,772
---------- ---------- ---------- ----------
Total investment in Portfolio, at value (Note
1A) $2,106,052 $ 925,444 $2,883,920 $7,064,937
Receivable for Fund shares sold -- -- -- 68,082
Receivable from the Administrator (Note 5) 8,010 9,082 10,663 12,591
Deferred organization expenses (Note 1D) 6,538 5,625 5,243 4,967
---------- ---------- ---------- ----------
Total assets $2,120,600 $ 940,151 $2,899,826 $7,150,577
---------- ---------- ---------- ----------
LIABILITIES:
Dividends payable $ 6,231 $ 1,698 $ 5,070 $ 21,250
Payable for Fund shares redeemed -- -- -- 1,645
Payable to affiliate --
Trustees' fees -- -- -- 25
Accrued expenses 1,204 3,342 1,446 4,958
---------- ---------- ---------- ----------
Total liabilities $ 7,435 $ 5,040 $ 6,516 $ 27,878
---------- ---------- ---------- ----------
NET ASSETS $2,113,165 $ 935,111 $2,893,310 $7,122,699
========== ========== ========== ==========
SOURCES OF NET ASSETS:
Paid-in capital $2,197,653 $ 975,147 $2,960,839 $7,316,874
Accumulated net realized loss on investment and
financial futures transactions (computed on the
basis of identified cost) (147,722 ) (34,674 ) (110,534 ) (393,527)
Accumulated undistributed net investment income 7,334 585 6,785 14,580
Unrealized appreciation (depreciation) of
investments and financial futures contracts from
Portfolio (computed on the basis of identified
cost) 55,900 (5,947 ) 36,220 184,772
---------- ---------- ---------- ----------
Total $2,113,165 $ 935,111 $2,893,310 $7,122,699
========== ========== ========== ==========
SHARES OF BENEFICIAL INTEREST OUTSTANDING 220,489 96,552 296,718 747,244
========== ========== ========== ==========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets / shares of beneficial interest
outstanding) $9.58 $9.69 $9.75 $9.53
------ ------ ------ -------
------ ------ ------ -------
COMPUTATION OF OFFERING PRICE PER SHARE
(100/96.25 of net asset value per share) $9.95 $10.07 $10.13 $9.90
------ ------- ------- -------
------ ------- ------- -------
</TABLE>
On sales of $50,000 or more, the offering price is reduced.
See notes to financial statements
18
<PAGE> 19
- ------------
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
FUND FUND FUND FUND
----------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments --
Identified cost $ 884,315 $ 896,588 $ 991,240 $1,080,940
Unrealized appreciation (depreciation) (60,892) 30,835 13,288 76,486
---------- ---------- ---------- ----------
Total investment in Portfolio, at value
(Note 1A) $ 823,423 $ 927,423 $1,004,528 $1,157,426
Receivable for Fund shares sold -- -- 38,517 124,258
Receivable from the Administrator (Note 5) 6,817 7,063 8,310 9,159
Deferred organization expenses (Note 1D) 5,837 5,057 4,161 5,137
---------- ---------- ---------- ----------
Total assets $ 836,077 $ 939,543 $1,055,516 $1,295,980
---------- ---------- ---------- ----------
LIABILITIES:
Dividends payable $ 1,097 $ 3,191 $ 488 $ 4,081
Payable for Fund shares redeemed 499 -- -- 6,551
Accrued expenses 1,448 2,177 1,055 2,541
---------- ---------- ---------- ----------
Total liabilities $ 3,044 $ 5,368 $ 1,543 $ 13,173
---------- ---------- ---------- ----------
NET ASSETS $ 833,033 $ 934,175 $1,053,973 $1,282,807
========== ========== ========== ==========
SOURCES OF NET ASSETS:
Paid-in capital $ 962,626 $1,073,729 $1,089,955 $1,342,941
Accumulated net realized loss on investment and
financial futures transactions (computed on
the basis of identified cost) (69,823) (173,881) (49,355 ) (137,121 )
Accumulated undistributed net investment income 1,122 3,492 85 501
Unrealized appreciation (depreciation) of
investments and financial futures contracts
from Portfolio (computed on the basis of
identified cost) (60,892) 30,835 13,288 76,486
---------- ---------- ---------- ----------
Total $ 833,033 $ 934,175 $1,053,973 $1,282,807
========== ========== ========== ==========
SHARES OF BENEFICIAL INTEREST OUTSTANDING 86,384 96,742 109,915 133,997
========== ========== ========== ==========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets / shares of beneficial interest
outstanding) $9.64 $9.66 $9.59 $9.57
------ ------- ------ ------
------ ------- ------ ------
COMPUTATION OF OFFERING PRICE PER SHARE
(100/96.25 of net asset value per share) $10.02 $10.04 $9.96 $9.94
------- -------- ------ ------
------- -------- ------ ------
</TABLE>
On sales of $50,000 or more, the offering price is reduced.
See notes to financial statements
19
<PAGE> 20
- ------------
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
Six Months Ended February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
ALABAMA ARKANSAS GEORGIA KENTUCKY
FUND FUND FUND FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE 1B):
Interest income allocated from Portfolio $ 260,928 $14,893 $ 68,188 $51,677
Expenses allocated from Portfolio (21,034) (1,243) (5,186) (4,272)
----------- ----------- ----------- -----------
Net investment income from Portfolio $ 239,894 $13,650 $ 63,002 $47,405
----------- ----------- ----------- -----------
Expenses --
Compensation of Trustees not members of the
Administrator's organization (Note 5) $ 79 $ -- $ -- $ --
Distribution costs (Notes 6 and 7) 37,442 2,185 9,528 7,476
Custodian fee (Note 5) 1,069 1,500 1,305 1,479
Transfer and dividend disbursing agent fees 3,537 188 966 825
Printing and postage 3,905 2,257 2,963 2,622
Legal and accounting services 7,497 3,371 5,785 4,511
Registration costs 300 1,000 -- --
Amortization of organization expenses (Note 1D) 1,354 965 1,225 1,254
Miscellaneous 1,095 233 267 509
----------- ----------- ----------- -----------
Total expenses $ 56,278 $11,699 $ 22,039 $18,676
----------- ----------- ----------- -----------
Deduct --
Preliminary allocation of expenses to the
Administrator (Note 5) $ 13,749 $ 8,873 $ 11,053 $ 9,534
Reduction of Custodian fee (Note 5) -- -- 1,305 --
----------- ----------- ----------- -----------
Total $ 13,749 $ 8,873 $ 12,358 $ 9,534
----------- ----------- ----------- -----------
Net expenses $ 42,529 $ 2,826 $ 9,681 $ 9,142
----------- ----------- ----------- -----------
Net investment income $ 197,365 $10,824 $ 53,321 $38,263
----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from Portfolio --
Investment transactions (identified cost basis) $ 100,712 $ 2,548 $ 11,604 $ 367
Financial futures contracts (8,262) (415) 2,624 (2,088)
----------- ----------- ----------- -----------
Net realized gain (loss) on investments $ 92,450 $ 2,133 $ 14,228 $(1,721)
Change in unrealized appreciation of investments 152,415 9,734 48,846 49,715
----------- ----------- ----------- -----------
Net realized and unrealized gain $ 244,865 $11,867 $ 63,074 $47,994
----------- ----------- ----------- -----------
Net increase in net assets from operations $ 442,230 $22,691 $ 116,395 $86,257
============= ============= ============= =============
</TABLE>
See notes to financial statements
20
<PAGE> 21
- ------------
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
Six Months Ended February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
FUND FUND FUND FUND
----------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE 1B):
Interest income allocated from Portfolio $ 73,289 $28,127 $ 91,624 $190,338
Expenses allocated from Portfolio (3,436) (2,302) (7,751) (15,482)
----------- ----------- ----------- --------------
Net investment income from Portfolio $ 69,853 $25,825 $ 83,873 $174,856
----------- ----------- ----------- --------------
Expenses --
Compensation of Trustees not members of the
Administrator's organization (Note 5) $ -- $ -- $ -- $ 79
Distribution costs (Notes 6 and 7) 10,264 4,005 12,981 26,219
Custodian fee (Note 5) 1,916 1,458 2,000 1,565
Transfer and dividend disbursing agent fees 1,006 462 1,145 2,467
Printing and postage 1,367 3,339 2,021 3,347
Legal and accounting services 4,043 3,609 5,014 6,045
Registration costs 2,500 -- -- --
Amortization of organization expenses (Note 1D) 1,115 1,014 952 893
Miscellaneous 275 732 287 784
----------- ----------- ----------- --------------
Total expenses $ 22,486 $14,619 $ 24,400 $ 41,399
----------- ----------- ----------- --------------
Deduct --
Preliminary allocation of expenses to the
Administrator (Note 5) $ 8,010 $ 9,082 $ 10,663 $ 12,591
Reduction of Custodian fee (Note 5) 1,177 -- -- 567
----------- ----------- ----------- --------------
Total $ 9,187 $ 9,082 $ 10,663 $ 13,158
----------- ----------- ----------- --------------
Net expenses $ 13,299 $ 5,537 $ 13,737 $ 28,241
----------- ----------- ----------- --------------
Net investment income $ 56,554 $20,288 $ 70,136 $146,615
----------- ----------- ----------- --------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from Portfolio --
Investment transactions (identified cost basis) $ 22,481 $11,160 $ 27,401 $ 38,196
Financial futures contracts (19,116) (747) 2,777 2,630
----------- ----------- ----------- --------------
Net realized gain on investments $ 3,365 $10,413 $ 30,178 $ 40,826
Change in unrealized appreciation of investments 44,174 21,324 58,733 125,108
----------- ----------- ----------- --------------
Net realized and unrealized gain $ 47,539 $31,737 $ 88,911 $165,934
----------- ----------- ----------- --------------
Net increase in net assets from operations $ 104,093 $52,025 $ 159,047 $312,549
============= ============= ============= =================
</TABLE>
See notes to financial statements
21
<PAGE> 22
- ------------
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
Six Months Ended February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
FUND FUND FUND FUND
----------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE 1B):
Interest income allocated from Portfolio $26,275 $ 37,338 $31,313 $44,921
Expenses allocated from Portfolio (2,242) (3,135) (2,463) (3,739)
----------- -------------- ----------- -----------
Net investment income from Portfolio $24,033 $ 34,203 $28,850 $41,182
----------- -------------- ----------- -----------
Expenses --
Distribution costs (Notes 6 and 7) $ 3,877 $ 5,349 $ 4,492 $ 6,330
Custodian fee (Note 5) 1,999 956 2,061 1,512
Transfer and dividend disbursing agent fees 396 519 448 649
Printing and postage 1,188 2,393 1,019 2,393
Legal and accounting services 2,732 2,938 4,148 4,035
Registration costs -- -- -- --
Amortization of organization expenses (Note 1D) 1,050 861 1,254 924
Miscellaneous 148 763 451 537
----------- -------------- ----------- -----------
Total expenses $11,390 $ 13,779 $13,873 $16,380
Deduct preliminary allocation of expenses to the
Administrator (Note 5) 6,817 7,063 8,310 9,159
----------- -------------- ----------- -----------
Net expenses $ 4,573 $ 6,716 $ 5,563 $ 7,221
----------- -------------- ----------- -----------
Net investment income $19,460 $ 27,487 $23,287 $33,961
----------- -------------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from Portfolio --
Investment transactions (identified cost basis) $ (199) $ 6,682 $ 574 $ 3,463
Financial futures contracts (645) 997 (973) 1,211
----------- -------------- ----------- -----------
Net realized gain (loss) on investments $ (844) $ 7,679 $ (399) $ 4,674
Change in unrealized appreciation of investments 22,742 30,616 32,941 39,816
----------- -------------- ----------- -----------
Net realized and unrealized gain $21,898 $ 38,295 $32,542 $44,490
----------- -------------- ----------- -----------
Net increase in net assets from operations $41,358 $ 65,782 $55,829 $78,451
============= ================= ============= =============
</TABLE>
See notes to financial statements
22
<PAGE> 23
- ------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Six Months Ended February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
ALABAMA ARKANSAS GEORGIA KENTUCKY
FUND FUND FUND FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 197,365 $ 10,824 $ 53,321 $ 38,263
Net realized gain (loss) on investments 92,450 2,133 14,228 (1,721 )
Change in unrealized appreciation of investments 152,415 9,734 48,846 49,715
----------- -------- ---------- ----------
Net increase in net assets from operations $ 442,230 $ 22,691 $ 116,395 $ 86,257
----------- -------- ---------- ----------
Distributions to shareholders (Note 3) --
From net investment income $ (196,769 ) $ (10,824) $ (52,367 ) $ (38,263 )
In excess of net investment income -- (1,095) -- (2,763 )
----------- -------- ---------- ----------
Total distributions to shareholders $ (196,769 ) $ (11,919) $ (52,367 ) $ (41,026 )
----------- -------- ---------- ----------
Transactions in shares of beneficial interest (Note 4)
--
Proceeds from sales of shares $ 219,541 $ 24,652 $ 230,407 $ 193,011
Net asset value of shares issued to shareholders in
payment of distributions declared 82,865 7,568 31,079 29,256
Cost of shares redeemed (2,696,590 ) (31,357) (596,736 ) (697,292 )
----------- -------- ---------- ----------
Increase (decrease) in net assets from Fund share
transactions $(2,394,184) $ 863 $ (335,250 ) $ (475,025 )
----------- -------- ---------- ----------
Net increase (decrease) in net assets $(2,148,723) $ 11,635 $ (271,222 ) $ (429,794 )
NET ASSETS:
At beginning of period 9,426,898 533,393 2,486,997 1,823,081
----------- -------- ---------- ----------
At end of period $7,278,175 $ 545,028 $2,215,775 $1,393,287
=========== ======== ========== ==========
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME
INCLUDED IN NET ASSETS AT END OF PERIOD $ 26,158 $ 701 $ 6,248 $ 376
=========== ======== ========== ==========
</TABLE>
See notes to financial statements
23
<PAGE> 24
- ------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Six Months Ended February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
FUND FUND FUND FUND
----------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 56,554 $ 20,288 $ 70,136 $ 146,615
Net realized gain on investments 3,365 10,413 30,178 40,826
Change in unrealized appreciation of investments 44,174 21,324 58,733 125,108
---------- --------- ---------- ----------
Net increase in net assets from operations $ 104,093 $ 52,025 $ 159,047 $ 312,549
---------- --------- ---------- ----------
Distributions to shareholders (Note 3) --
From net investment income $ (56,554 ) $ (20,288) $ (69,344 ) $ (146,615)
In excess of net investment income (3,019 ) (1,394) -- (2,645)
---------- --------- ---------- ----------
Total distributions to shareholders $ (59,573 ) $ (21,682) $ (69,344 ) $ (149,260)
---------- --------- ---------- ----------
Transactions in shares of beneficial interest (Note
4) --
Proceeds from sales of shares $ 97,807 $ 113,901 $ 114,811 $1,683,849
Net asset value of shares issued to shareholders
in payment of distributions declared 41,473 14,599 58,137 71,835
Cost of shares redeemed (455,016 ) (162,710) (532,639 ) (911,045)
---------- --------- ---------- ----------
Increase (decrease) in net assets from Fund
share transactions $ (315,736 ) $ (34,210) $ (359,691 ) $ 844,639
---------- --------- ---------- ----------
Net increase (decrease) in net assets $ (271,216 ) $ (3,867) $ (269,988 ) $1,007,928
NET ASSETS:
At beginning of period 2,384,381 938,978 3,163,298 6,114,771
---------- --------- ---------- ----------
At end of period $2,113,165 $ 935,111 $2,893,310 $7,122,699
========== ========= ========== ==========
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME
INCLUDED IN NET ASSETS AT END OF PERIOD $ 7,334 $ 585 $ 6,785 $ 14,580
========== ========= ========== ==========
</TABLE>
See notes to financial statements
24
<PAGE> 25
- ------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Six Months Ended February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
FUND FUND FUND FUND
----------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 19,460 $ 27,487 $ 23,287 $ 33,961
Net realized gain (loss) on investments (844) 7,679 (399 ) 4,674
Change in unrealized appreciation of investments 22,742 30,616 32,941 39,816
--------- ---------- ---------- ----------
Net increase in net assets from operations $ 41,358 $ 65,782 $ 55,829 $ 78,451
--------- ---------- ---------- ----------
Distributions to shareholders (Note 3) --
From net investment income $ (19,460) $ (27,487) $ (23,287 ) $ (33,961 )
In excess of net investment income (991) (101) (1,783 ) (1,671 )
--------- ---------- ---------- ----------
Total distributions to shareholders $ (20,451) $ (27,588) $ (25,070 ) $ (35,632 )
--------- ---------- ---------- ----------
Transactions in shares of beneficial interest (Note
4) --
Proceeds from sales of shares $ 82,259 $ 429,977 $ 98,280 $ 201,103
Net asset value of shares issued to shareholders
in payment of distributions declared 16,678 18,138 23,357 26,171
Cost of shares redeemed (285,296) (797,522) (182,685 ) (475,246 )
--------- ---------- ---------- ----------
Decrease in net assets from Fund share
transactions $(186,359) $ (349,407) $ (61,048 ) $ (247,972 )
--------- ---------- ---------- ----------
Net decrease in net assets $(165,452) $ (311,213) $ (30,289 ) $ (205,153 )
NET ASSETS:
At beginning of period 998,485 1,245,388 1,084,262 1,487,960
--------- ---------- ---------- ----------
At end of period $ 833,033 $ 934,175 $1,053,973 $1,282,807
========= ========== ========== ==========
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME
INCLUDED IN NET ASSETS AT END OF PERIOD $ 1,122 $ 3,492 $ 85 $ 501
========= ========== ========== ==========
</TABLE>
See notes to financial statements
25
<PAGE> 26
- ------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended August 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
ALABAMA ARKANSAS GEORGIA KENTUCKY
FUND FUND FUND FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 469,398 $ 25,852 $ 117,349 $ 95,368
Net realized loss on investments (432,334 ) (19,396) (170,159 ) (81,998 )
Change in unrealized appreciation of investments 565,868 19,959 136,523 32,478
----------- --------- ----------- -----------
Net increase in net assets from operations $ 602,932 $ 26,415 $ 83,713 $ 45,848
----------- --------- ----------- -----------
Distributions to shareholders (Note 3) --
From net investment income $ (469,398 ) $ (25,852) $ (117,349 ) $ (95,368 )
In excess of net investment income (19,415 ) (908) (5,530 ) (4,011 )
----------- --------- ----------- -----------
Total distributions to shareholders $ (488,813 ) $ (26,760) $ (122,879 ) $ (99,379 )
----------- --------- ----------- -----------
Transactions in shares of beneficial interest (Note 4)
--
Proceeds from sales of shares $1,410,677 $ 483,477 $ 678,731 $ 393,541
Net asset value of shares issued to shareholders in
payment of distributions declared 227,751 13,686 83,789 71,981
Cost of shares redeemed (4,057,732 ) (590,275) (1,225,047 ) (1,653,843 )
----------- --------- ----------- -----------
Decrease in net assets from Fund share transactions $(2,419,304) $ (93,112) $ (462,527 ) $(1,188,321)
----------- --------- ----------- -----------
Net decrease in net assets $(2,305,185) $ (93,457) $ (501,693 ) $(1,241,852)
NET ASSETS:
At beginning of year 11,732,083 626,850 2,988,690 3,064,933
----------- --------- ----------- -----------
At end of year $9,426,898 $ 533,393 $2,486,997 $1,823,081
=========== ========= =========== ===========
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME
INCLUDED IN NET ASSETS AT END OF YEAR $ 25,562 $ 1,796 $ 5,294 $ 3,139
=========== ========= =========== ===========
</TABLE>
See notes to financial statements
26
<PAGE> 27
- ------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended August 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
FUND FUND FUND FUND
----------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 128,682 $ 44,161 $ 153,631 $ 311,138
Net realized loss on investments (133,470 ) (32,458 ) (117,279 ) (328,338)
Change in unrealized appreciation of investments 93,765 14,214 147,556 292,395
----------- ---------- ----------- -----------
Net increase in net assets from operations $ 88,977 $ 25,917 $ 183,908 $ 275,195
----------- ---------- ----------- -----------
Distributions to shareholders (Note 3) --
From net investment income $ (128,682 ) $ (44,161 ) $ (153,631 ) $ (311,138)
In excess of net investment income (5,452 ) (1,699 ) (6,545 ) (11,754)
----------- ---------- ----------- -----------
Total distributions to shareholders $ (134,134 ) $ (45,860 ) $ (160,176 ) $ (322,892)
----------- ---------- ----------- -----------
Transactions in shares of beneficial interest (Note
4) --
Proceeds from sales of shares $ 522,545 $ 357,842 $ 986,779 $ 1,049,995
Net asset value of shares issued to shareholders
in payment of distributions declared 91,373 26,884 138,957 172,455
Cost of shares redeemed (1,325,169 ) (614,046 ) (1,845,598 ) (2,470,737)
----------- ---------- ----------- -----------
Decrease in net assets from Fund share
transactions $ (711,251 ) $ (229,320 ) $ (719,862 ) $ (1,248,287)
----------- ---------- ----------- -----------
Net decrease in net assets $ (756,408 ) $ (249,263 ) $ (696,130 ) $ (1,295,984)
NET ASSETS:
At beginning of year 3,140,789 1,188,241 3,859,428 7,410,755
----------- ---------- ----------- -----------
At end of year $2,384,381 $ 938,978 $3,163,298 $ 6,114,771
=========== ========== =========== ===========
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME
INCLUDED IN NET ASSETS AT END OF YEAR $ 10,353 $ 1,979 $ 5,993 $ 17,225
=========== ========== =========== ===========
</TABLE>
See notes to financial statements
27
<PAGE> 28
- ------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended August 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
FUND FUND FUND FUND
----------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 57,645 $ 68,890 $ 53,767 $ 66,252
Net realized loss on investments (62,359 ) (146,016) (43,844 ) (97,070 )
Change in unrealized appreciation of investments 44,395 69,094 56,979 117,210
----------- ----------- ---------- ----------
Net increase (decrease) in net assets from
operations $ 39,681 $ (8,032) $ 66,902 $ 86,392
----------- ----------- ---------- ----------
Distributions to shareholders (Note 3) --
From net investment income $ (57,645 ) $ (68,890) $ (53,767 ) $ (66,252 )
In excess of net investment income (2,990 ) (2,876) (2,616 ) (2,716 )
----------- ----------- ---------- ----------
Total distributions to shareholders $ (60,635 ) $ (71,766) $ (56,383 ) $ (68,968 )
----------- ----------- ---------- ----------
Transactions in shares of beneficial interest (Note
4) --
Proceeds from sales of shares $ 447,667 $ 715,884 $ 254,527 $ 436,659
Net asset value of shares issued to shareholders
in payment of distributions declared 45,657 54,145 50,580 54,590
Cost of shares redeemed (1,351,747 ) (1,753,784) (363,364 ) (335,327 )
----------- ----------- ---------- ----------
Increase (decrease) in net assets from Fund
share transactions $ (858,423 ) $ (983,755) $ (58,257 ) $ 155,922
----------- ----------- ---------- ----------
Net increase (decrease) in net assets $ (879,377 ) $ (1,063,553) $ (47,738 ) $ 173,346
NET ASSETS:
At beginning of year 1,877,862 2,308,941 1,132,000 1,314,614
----------- ----------- ---------- ----------
At end of year $ 998,485 $ 1,245,388 $1,084,262 $1,487,960
=========== =========== ========== ==========
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME
INCLUDED IN NET ASSETS AT END OF YEAR $ 2,113 $ 3,593 $ 1,868 $ 2,172
=========== =========== ========== ==========
</TABLE>
See notes to financial statements
28
<PAGE> 29
- ------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL
ALABAMA FUND ARKANSAS FUND
------------------------------------ -------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31,
1996 ----------------- 1996 ------------------
(UNAUDITED) 1995 1994* (UNAUDITED) 1995 1994*
---------------- ------- ------- ---------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning of year $ 9.510 $ 9.320 $10.000 $ 9.590 $ 9.530 $10.000
------- ------- ------- ------- ------- -------
INCOME (LOSS) FROM OPERATIONS:
Net investment income $ 0.225 $ 0.418 $ 0.296 $ 0.200 $ 0.424 $ 0.214
Net realized and unrealized gain
(loss) on investments 0.220 0.207 (0.628) 0.220 0.075 (0.430)
------- ------- ------- ------- ------- -------
Total income (loss) from
operations $ 0.445 $ 0.625 $(0.332) $ 0.420 $ 0.499 $(0.216)
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income $ (0.215) $(0.418) $(0.296) $ (0.200) $(0.424) $(0.214)
In excess of net investment income -- (0.017) (0.052) (0.020) (0.015) (0.040)
------- ------- ------- ------- ------- -------
Total distributions $ (0.215) $(0.435) $(0.348) $ (0.220) $(0.439) $(0.254)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, end of year $ 9.740 $ 9.510 $ 9.320 $ 9.790 $ 9.590 $ 9.530
======= ======= ======= ======= ======= =======
TOTAL RETURN (2) 4.94% 6.90% (3.44)% 4.52% 5.52% (2.25)%
RATIOS/SUPPLEMENTAL DATA**:
Net assets, end of year (000
omitted) $ 7,278 $ 9,427 $11,732 $ 545 $ 533 $ 627
Ratio of net expenses to average
daily net assets (1)(3) 1.47%+ 1.68% 1.49%+ 1.55%+ 1.42% 1.59%+
Ratio of net investment income to
average daily net assets 4.47%+ 4.59% 4.23%+ 4.10%+ 4.56% 3.97%+
</TABLE>
** For the six months ended February 29, 1996, for the year ended August 31,
1995 and for the period from the start of business, December 7, 1993 and
February 9, 1994, respectively to August 31, 1994, 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 (loss) per share and the ratios
would have been as follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS) PER SHARE $ 0.209 $ 0.408 $ 0.280 $ 0.036 $ 0.175 $(0.005)
===== ===== ===== ===== ===== =====
RATIO (As a percentage of average
daily net assets):
Expenses (1)(3) 1.78%+ 1.80% 1.71%+ 4.92%+ 4.09% 5.66%+
Net investment income (loss) 4.16%+ 4.47% 4.01%+ 0.73%+ 1.89% (0.10)%+
</TABLE>
+ Computed on an annualized basis.
(1) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(2) Total 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. Total return is
computed on a non-annualized basis.
(3) The annualized expense ratios for the six months ended February 29, 1996
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Fund to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the periods ended on or before August 31,
1995 have not been adjusted to reflect this change.
* For the Traditional Alabama and Traditional Arkansas Funds, the Financial
Highlights are for the period from the start of business, December 7, 1993
and February 9, 1994 respectively, to August 31, 1994.
See notes to financial statements
29
<PAGE> 30
- ------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL
GEORGIA FUND KENTUCKY FUND
------------------------------------ -------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31,
1996 ----------------- 1996 ------------------
(UNAUDITED) 1995 1994* (UNAUDITED) 1995 1994*
---------------- ------- ------- ---------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning of year $ 9.190 $ 9.220 $10.000 $ 9.320 $ 9.210 $10.000
------- ------- ------- ------- ------- -------
INCOME (LOSS) FROM OPERATIONS:
Net investment income $ 0.222 $ 0.412 $ 0.294 $ 0.205 $ 0.423 $ 0.285
Net realized and unrealized gain
(loss) on investments 0.233 (0.011) (0.726) 0.225 0.128++ (0.730)
------- ------- ------- ------- ------- -------
Total income (loss) from
operations $ 0.455 $ 0.401 $(0.432) $ 0.430 $ 0.551 $(0.445)
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income $ (0.222) $(0.412) $(0.294) $ (0.205) $(0.423) $(0.285)
In excess of net investment income -- (0.019) (0.054) (0.015) (0.018) (0.060)
------- ------- ------- ------- ------- -------
Total distributions $ (0.222) $(0.431) $(0.348) $ (0.220) $(0.441) $(0.345)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, end of year $ 9.423 $ 9.190 $ 9.220 $ 9.530 $ 9.320 $ 9.210
======= ======= ======= ======= ======= =======
TOTAL RETURN (2) 5.10% 4.60% (4.56)% 4.76% 6.29% (4.60)%
RATIOS/SUPPLEMENTAL DATA**:
Net assets, end of year (000
omitted) $ 2,216 $ 2,487 $ 2,989 $ 1,393 $ 1,823 $ 3,065
Ratio of net expenses to average
daily net assets (1)(3) 1.46%+ 1.55% 1.64%+ 1.54%+ 1.46% 1.69%+
Ratio of net investment income to
average daily net assets 4.68%+ 4.62% 4.09%+ 4.34%+ 4.81% 4.12%+
</TABLE>
** For the six months ended February 29, 1996, for the year ended August 31,
1995 and for the period from the start of business, December 7, 1993
to August 31, 1994, 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>
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME PER SHARE $ 0.176 $ 0.353 $ 0.253 $ 0.154 $ 0.303 $ 0.253
===== ===== ===== ===== ===== =====
RATIO (As a percentage of average
daily net assets):
Expenses (1)(3) 2.43%+ 2.21% 2.20%+ 2.62%+ 2.82% 2.26%+
Net investment income 3.71%+ 3.96% 3.53%+ 3.26%+ 3.45% 3.56%+
</TABLE>
+ Computed on an annualized basis.
++ The per share amount is not in accord with the net realized and unrealized
gain (loss) 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 the Fund's share of its corresponding Portfolio's allocated
expenses.
(2) Total 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. Total return is
computed on a non-annualized basis.
(3) The annualized expense ratios for the six months ended February 29, 1996
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Fund to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the periods ended on or before August 31,
1995 have not been adjusted to reflect this change.
* For the Traditional Georgia and Traditional Kentucky Funds, the Financial
Highlights are for the period from the start of business, December 7,
1993, to August 31, 1994.
See notes to financial statements
30
<PAGE> 31
- ------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL
LOUISIANA FUND MARYLAND FUND
------------------------------------ -------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31,
1996 ----------------- 1996 ------------------
(UNAUDITED) 1995 1994* (UNAUDITED) 1995 1994*
---------------- ------- ------- ---------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning of year $ 9.440 $ 9.470 $10.000 $ 9.380 $ 9.210 $10.000
------- ------- ------- ------- ------- -------
INCOME (LOSS) FROM OPERATIONS:
Net investment income $ 0.223 $ 0.449 $ 0.223 $ 0.204 $ 0.421 $ 0.277
Net realized and unrealized gain
(loss) on investments 0.152 (0.011) (0.486) 0.324 0.187++ (0.731)
------- ------- ------- ------- ------- -------
Total income (loss) from
operations $ 0.375 $ 0.438 $(0.263) $ 0.528 $ 0.608 $(0.454)
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income $ (0.223) $(0.449) $(0.223) $ (0.204) $(0.421) $(0.277)
In excess of net investment income (0.012) (0.019) (0.044) (0.014) (0.017) (0.059)
------- ------- ------- ------- ------- -------
Total distributions $ (0.235) $(0.468) $(0.267) $ (0.218) $(0.438) $(0.336)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, end of year $ 9.580 $ 9.440 $ 9.470 $ 9.690 $ 9.380 $ 9.210
======= ======= ======= ======= ======= =======
TOTAL RETURN (2) 4.13% 4.88% (2.72)% 5.67% 6.91% (4.68)%
RATIOS/SUPPLEMENTAL DATA**:
Net assets, end of year (000
omitted) $ 2,113 $ 2,384 $ 3,141 $ 935 $ 939 $ 1,188
Ratio of net expenses to average
daily net assets (1)(3) 1.53%+ 1.41% 1.57%+ 1.65%+ 1.50% 1.64%+
Ratio of net investment income to
average daily net assets 4.65%+ 4.90% 4.16%+ 4.21%+ 4.71% 4.07%+
</TABLE>
** For the six months ended February 29, 1996, for the year ended August 31,
1995 and for the period from the start of business, February 14, 1994
and December 10, 1993, respectively to August 31, 1994, 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>
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME PER SHARE $ 0.177 $ 0.401 $ 0.169 $ 0.113 $ 0.238 $ 0.046
===== ===== ===== ===== ===== =====
RATIO(As a percentage of average daily
net assets):
Expenses (1)(3) 2.30%+ 1.93% 2.77%+ 3.53%+ 3.56% 5.07%+
Net investment income 3.88%+ 4.38% 2.96%+ 2.33%+ 2.65% 0.64%+
</TABLE>
+ Computed on an annualized basis.
++ The per share amount is not in accord with the net realized and unrealized
gain (loss) for the period because of the timing of sales of Fund shares
and the amount of per share realized and unrealized gains and losses at
such time.
(1) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(2) Total 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. Total return is
computed on a non-annualized basis.
(3) The annualized expense ratios for the six months ended February 29, 1996
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Fund to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the periods ended on or before August 31,
1995 have not been adjusted to reflect this change.
* For the Traditional Louisiana and Traditional Maryland Funds, the
Financial Highlights are for the period from the start of business,
February 14, 1994 and December 10, 1993, respectively, to August 31, 1994.
See notes to financial statements
31
<PAGE> 32
- ------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL
MISSOURI FUND NORTH CAROLINA FUND
------------------------------------ -------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31,
1996 ----------------- 1996 ------------------
(UNAUDITED) 1995 1994* (UNAUDITED) 1995 1994*
---------------- ------- ------- ---------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning of year $ 9.480 $ 9.290 $10.000 $ 9.280 $ 9.280 $10.000
------- ------- ------- ------- ------- -------
INCOME (LOSS) FROM OPERATIONS:
Net investment income $ 0.222 $ 0.419 $ 0.289 $ 0.216 $ 0.427 $ 0.295
Net realized and unrealized gain
(loss) on investments 0.265 0.208 (0.651) 0.254 0.016++ (0.666)
------- ------- ------- ------- ------- -------
Total income (loss) from
operations $ 0.487 $ 0.627 $(0.362) $ 0.470 $ 0.443 $(0.371)
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income $ (0.217) $(0.419) $(0.289) $ (0.216) $(0.427) $(0.295)
In excess of net investment income -- (0.018) (0.059) (0.004) (0.016) (0.054)
------- ------- ------- ------- ------- -------
Total distributions $ (0.217) $(0.437) $(0.348) $ (0.220) $(0.443) $(0.349)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, end of year $ 9.750 $ 9.480 $ 9.290 $ 9.530 $ 9.280 $ 9.280
======= ======= ======= ======= ======= =======
TOTAL RETURN (2) 5.28% 7.08% (3.76)% 5.21% 5.02% (3.85)%
RATIOS/SUPPLEMENTAL DATA**:
Net assets, end of year (000
omitted) $ 2,893 $ 3,163 $ 3,859 $ 7,123 $ 6,115 $ 7,411
Ratio of net expenses to average
daily net assets (1)(3) 1.40%+ 1.61% 1.61%+ 1.43%+ 1.55% 1.56%+
Ratio of net investment income to
average daily net assets 4.53%+ 4.62% 4.20%+ 4.56%+ 4.72% 4.19%+
</TABLE>
** For the six months ended February 29, 1996, for the year ended August 31,
1995 and for the period from the start of business, December 7, 1993 to
August 31, 1994, 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>
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME PER SHARE $ 0.188 $ 0.363 $ 0.255 $ 0.162 $ 0.403 $ 0.263
===== ===== ===== ===== ===== =====
RATIO (As a percentage of average
daily net assets):
Expenses (1)(3) 2.09%+ 2.23% 2.19%+ 1.82%+ 1.82% 2.01%+
Net investment income 3.84%+ 4.00% 3.62%+ 4.15%+ 4.45% 3.74%+
</TABLE>
+ Computed on an annualized basis.
++ The per share amount is not in accord with the net realized gain for the
period because of the timing of sales of Fund shares and the amount of
per share realized and unrealized gains and losses at such time.
(1) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(2) Total 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. Total return is
computed on a non-annualized basis.
(3) The annualized expense ratios for the six months ended February 29, 1996
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Fund to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the periods ended on or before August 31,
1995 have not been adjusted to reflect this change.
* For the Traditional Missouri and Traditional North Carolina Funds, the
Financial Highlights are for the period from the start of business,
December 7, 1993, to August 31, 1994.
See notes to financial statements
32
<PAGE> 33
- ------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL
OREGON FUND SOUTH CAROLINA FUND
-------------------------------------- --------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31,
1996 ------------------- 1996 -------------------
(UNAUDITED) 1995 1994* (UNAUDITED) 1995 1994*
---------------- ------- ------- ---------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning of year $ 9.440 $ 9.240 $10.000 $ 9.420 $ 9.370 $10.000
------- ------- ------- ------- ------- -------
INCOME (LOSS) FROM OPERATIONS:
Net investment income $ 0.212 $ 0.406 $ 0.263 $ 0.214 $ 0.413 $ 0.205
Net realized and unrealized gain
(loss) on investments 0.200 0.221++ (0.703) 0.241 0.067++ (0.587)
------- ------- ------- ------- ------- -------
Total income (loss) from
operations $ 0.412 $ 0.627 $(0.440) $ 0.455 $ 0.480 $(0.382)
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income $ (0.202) $(0.406) $(0.263) $ (0.214) $(0.413) $(0.205)
In excess of net investment
income (0.010) (0.021) (0.057) (0.001) (0.017) (0.043)
------- ------- ------- ------- ------- -------
Total distributions $ (0.212) $(0.427) $(0.320) $ (0.215) $(0.430) $(0.248)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, end of year $ 9.640 $ 9.440 $ 9.240 $ 9.660 $ 9.420 $ 9.370
======= ======= ======= ======= ======= =======
TOTAL RETURN (2) 4.51% 7.11% (4.54)% 4.97% 5.38% (3.92)%
RATIOS/SUPPLEMENTAL DATA**:
Net assets, end of year (000
omitted) $ 833 $ 998 $ 1,878 $ 934 $ 1,245 $ 2,309
Ratio of net expenses to average
daily net assets (1)(3) 1.50%+ 1.51% 1.65%+ 1.62%+ 1.61% 1.76%+
Ratio of net investment income to
average daily net assets 4.22%+ 4.61% 3.99%+ 4.42%+ 4.61% 4.06%+
</TABLE>
** For the six months ended February 29, 1996, for the year ended August 31,
1995 and for the period from the start of business, December 28, 1993 and
February 14, 1994, respectively to August 31, 1994, 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>
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME PER SHARE $ 0.138 $ 0.261 $ 0.153 $ 0.159 $ 0.326 $ 0.161
===== ===== ===== ===== ===== =====
RATIO (As a percentage of average
daily net assets):
Expenses (1)(3) 2.98%+ 3.16% 3.33%+ 2.76%+ 2.58% 2.62%+
Net investment income 2.74%+ 2.96% 2.31%+ 3.28%+ 3.64% 3.19%+
</TABLE>
+ Computed on an annualized basis.
++ The per share amount is not in accord with the net realized and unrealized
gain (loss) 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 the Fund's share of its corresponding Portfolio's allocated
expenses.
(2) Total 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. Total return is
computed on a non-annualized basis.
(3) The annualized expense ratios for the six months ended February 29, 1996
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Fund to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the periods ended on or before August 31,
1995 have not been adjusted to reflect this change.
* For the Traditional Oregon and Traditional South Carolina Funds, the
Financial Highlights are for the period from the start of business,
December 28, 1993 and February 14, 1994, respectively, to August 31, 1994.
See notes to financial statements
33
<PAGE> 34
- ------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL
TENNESSEE FUND VIRGINIA FUND
------------------------------------- -------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31,
1996 ------------------ 1996 ------------------
(UNAUDITED) 1995 1994* (UNAUDITED) 1995 1994*
---------------- ------- ------- ---------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning of year $ 9.330 $ 9.220 $10.000 $ 9.330 $ 9.210 $10.000
------- ------- ------- ------- ------- -------
INCOME (LOSS) FROM OPERATIONS:
Net investment income $ 0.207 $ 0.425 $ 0.285 $ 0.213 $ 0.434 $ 0.296
Net realized and unrealized gain
(loss) on investments 0.276 0.131 (0.724) 0.251 0.138 (0.732)
------- ------- ------- ------- ------- -------
Total income (loss) from
operations $ 0.483 $ 0.556 $(0.439) $ 0.464 $ 0.572 $(0.436)
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income $ (0.207) $(0.425) $(0.285) $ (0.213) $(0.434) $(0.296)
In excess of net investment income (0.016) (0.021) (0.056) (0.011) (0.018) (0.058)
------- ------- ------- ------- ------- -------
Total distributions $ (0.223) $(0.446) $(0.341) $ (0.224) $(0.452) $(0.354)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, end of year $ 9.590 $ 9.330 $ 9.220 $ 9.570 $ 9.330 $ 9.210
======= ======= ======= ======= ======= =======
TOTAL RETURN (2) 5.32% 6.32% (4.54)% 5.12% 6.51% (4.51)%
RATIOS/SUPPLEMENTAL DATA**:
Net assets, end of year (000
omitted) $ 1,054 $ 1,084 $ 1,132 $ 1,283 $ 1,488 $ 1,315
Ratio of net expenses to average
daily net assets (1)(3) 1.50%+ 1.45% 1.59%+ 1.48%+ 1.42% 1.54%+
Ratio of net investment income to
average daily net assets 4.34%+ 4.71% 4.15%+ 4.49%+ 4.79% 4.31%+
</TABLE>
** For the six months ended February 29, 1996, for the year ended August 31,
1995 and for the period from the start of business, December 9, 1993, and
December 17, 1993, respectively to August 31, 1994, 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>
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME PER SHARE $ 0.134 $ 0.292 $ 0.158 $ 0.156 $ 0.306 $ 0.190
===== ===== ===== ===== ===== =====
RATIO (As a percentage of average
daily net assets):
Expenses (1)(3) 3.04%+ 2.92% 3.50%+ 2.69%+ 2.83% 3.08%+
Net investment income 2.80%+ 3.24% 2.24%+ 3.28%+ 3.38% 2.77%+
</TABLE>
+ Computed on an annualized basis.
++ The per share amount is not in accord with the net realized and unrealized
gain (loss) 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 the Fund's share of its corresponding Portfolio's allocated
expenses.
(2) Total 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. Total return is
computed on a non-annualized basis.
(3) The annualized expense ratios for the six months ended February 29, 1996
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Fund to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the periods ended on or before August 31,
1995 have not been adjusted to reflect this change.
* For the Traditional Tennessee and Traditional Virginia Funds, the
Financial Highlights are for the period from the start of business,
December 9, 1993, and December 17, 1993, respectively, to August 31, 1994.
See notes to financial statements
34
<PAGE> 35
- ------------
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 investment management company. The Trust
presently consists of sixty-three Funds, twelve of the non-diversified funds are
included in these financial statements. They include EV Traditional Alabama
Municipals Fund ("Traditional Alabama Fund"), EV Traditional Arkansas Municipals
Fund ("Traditional Arkansas Fund"), EV Traditional Georgia Municipals Fund
("Traditional Georgia Fund"), EV Traditional Kentucky Municipals Fund
("Traditional Kentucky Fund"), EV Traditional Louisiana Municipals Fund
("Traditional Louisiana Fund"), EV Traditional Maryland Municipals Fund
("Traditional Maryland Fund"), EV Traditional Missouri Municipals Fund
("Traditional Missouri Fund"), EV Traditional North Carolina Municipals Fund
("Traditional North Carolina Fund"), EV Traditional Oregon Municipals Fund
("Traditional Oregon Fund"), EV Traditional South Carolina Municipals Fund
("Traditional South Carolina Fund"), EV Traditional Tennessee Municipals Fund
("Traditional Tennessee Fund"), and EV Traditional Virginia Municipals Fund
("Traditional Virginia 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 Traditional Alabama Fund invests its assets in the
Alabama Municipals Portfolio, the Traditional Arkansas Fund invests its assets
in the Arkansas Municipals Portfolio, the Traditional Georgia Fund invests its
assets in the Georgia Municipals Portfolio, the Traditional Kentucky Fund
invests its assets in the Kentucky Municipals Portfolio, the Traditional
Louisiana Fund invests its assets in the Louisiana Municipals Portfolio, the
Traditional Maryland Fund invests its assets in the Maryland Municipals
Portfolio, the Traditional Missouri Fund invests its assets in the Missouri
Municipals Portfolio, the Traditional North Carolina Fund invests its assets in
the North Carolina Municipals Portfolio, the Traditional Oregon Fund invests its
assets in the Oregon Municipals Portfolio, the Traditional South Carolina Fund
invests its assets in the South Carolina Municipals Portfolio, the Traditional
Tennessee Fund invests its assets in the Tennessee Municipals Portfolio, and the
Traditional Virginia Fund invests its assets in the Virginia Municipals
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
(6.3%, 0.7%, 1.8%, 1.1%, 5.9%, 0.8%, 3.1%, 3.7%, 0.6%, 1.5%, 1.7% and 0.6% at
February 29, 1996) for the Traditional Alabama Fund, Traditional Arkansas Fund,
Traditional Georgia Fund, Traditional Kentucky Fund, Traditional Louisiana Fund,
Traditional Maryland Fund, Traditional Missouri Fund, Traditional North Carolina
Fund, Traditional Oregon Fund, Traditional South Carolina Fund, Traditional
Tennessee Fund and Traditional Virginia 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 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 August 31, 1995, the Funds, for
federal income tax purposes, had capital loss carryovers, which will reduce
taxable income arising from future net realized gain on investments, if any, to
the extent permitted by the Internal Revenue Code, and thus 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.
35
<PAGE> 36
- ------------
- --------------------------------------------------------------------------------
The amounts and expiration dates of the capital loss carryovers are as follows:
<TABLE>
<CAPTION>
FUND AMOUNT EXPIRES
- --------------------------------- --------- ----------------
<S> <C> <C>
Traditional Alabama Fund $ 82,635 August 31, 2003
132,241 August 31, 2002
Traditional Arkansas Fund 1,121 August 31, 2003
4,856 August 31, 2002
Traditional Georgia Fund 57,929 August 31, 2002
Traditional Kentucky Fund 247 August 31, 2003
15,369 August 31, 2002
Traditional Louisiana Fund 19,017 August 31, 2002
Traditional Maryland Fund 2,744 August 31, 2003
11,063 August 31, 2002
Traditional Missouri Fund 533 August 31, 2003
21,383 August 31, 2002
Traditional North Carolina Fund 34,428 August 31, 2003
106,971 August 31, 2002
Traditional Oregon Fund 7,233 August 31, 2003
7,028 August 31, 2002
Traditional South Carolina Fund 10,887 August 31, 2003
35,320 August 31, 2002
Traditional Tennessee Fund 941 August 31, 2003
5,333 August 31, 2002
Traditional Virginia Fund 39,429 August 31, 2002
</TABLE>
Additionally, at August 31, 1995, net capital losses of $294,422, $16,756,
$177,148, $68,271, $129,577, $26,844, $115,735, $283,346, $51,243, $126,176,
$42,939 and $92,608 for the Traditional Alabama Fund, Traditional Arkansas Fund,
Traditional Georgia Fund, Traditional Kentucky Fund, Traditional Louisiana Fund,
Traditional Maryland Fund, Traditional Missouri Fund, Traditional North Carolina
Fund, Traditional Oregon Fund, Traditional South Carolina Fund, Traditional
Tennessee Fund and Traditional Virginia Fund, respectively, attributable to
security transactions incurred after October 31, 1994, 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--Costs incurred by a Fund in connection with
its organization, including registration costs, are being amortized on the
straight-line basis over five years.
E. USE OF ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expense during the reporting period. Actual results could differ from those
estimates.
F. OTHER--Investment transactions are accounted for on a trade date basis.
G. INTERIM FINANCIAL INFORMATION--The interim financial statements relating to
February 29, 1996 and for the six month 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) FUND NAME CHANGES
Effective February 1, 1996, the EV Classic Alabama Municipals Fund, EV Classic
Arkansas Municipals Fund, EV Classic Georgia Municipals Fund, EV Classic
Kentucky Municipals Fund, EV Classic Louisiana Municipals Fund, EV Classic
Maryland Municipals Fund, EV Classic Missouri Municipals Fund, EV Classic North
Carolina Municipals Fund, EV Classic Oregon Municipals Fund, EV Classic South
Carolina Municipals Fund, EV Classic Tennessee Municipals Fund and EV Classic
Virginia Municipals Fund changed their respective names to EV Traditional
Alabama Municipals Fund, EV Traditional Arkansas Municipals Fund, EV Traditional
Georgia Municipals Fund, EV Traditional Kentucky Municipals Fund, EV Traditional
Louisiana Municipals Fund, EV Traditional Maryland Municipals Fund, EV
Traditional Missouri Municipals Fund, EV Traditional
36
<PAGE> 37
- ------------
- --------------------------------------------------------------------------------
North Carolina Municipals Fund, EV Traditional Oregon Municipals Fund, EV
Traditional South Carolina Municipals Fund, EV Traditional Tennessee Municipals
Fund and EV Traditional Virginia Municipals Fund. In addition, each Fund
discontinued the payment of sales commissions and distribution fees to the
Principal underwriter pursuant to their respective Distribution Plan (see Note
6). The Funds have adopted new service plans (see Note 7) which allow for the
quarterly payment of service fees to the Principal Underwriter and authorized
firms. Purchases of Fund shares on or after February 1, 1996 will be subject to
a Maximum Initial Sales Charge of 3.75% on amounts up to $50,000 and at
declining rates on purchases in excess of such amount.
- --------------------------------------------------------------------------------
(3) DISTRIBUTIONS TO SHAREHOLDERS
The net income of a 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 shareholder, 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 relating to distributions are reclassified to paid-in capital. The
tax treatment of distributions for the calendar year will be reported to
shareholders prior to February 1, 1997 and will be based on tax accounting
methods which may differ from amounts determined for financial statement
purposes.
- --------------------------------------------------------------------------------
(4) 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:
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
ALABAMA FUND ARKANSAS FUND GEORGIA FUND KENTUCKY FUND
------------------------ ------------------------ ------------------------ ------------------------
SIX MONTHS SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31,
1996 1995 1996 1995 1996 1995 1996 1995
------------ ---------- ------------ ---------- ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales 22,607 153,312 2,483 51,939 24,255 76,660 20,035 44,029
Issued to shareholders
electing to receive
payments of
distributions in Fund
shares 8,565 24,926 775 1,472 3,310 9,363 3,079 8,023
Redemptions (275,817) (445,597) (3,216) (63,594) (63,389) (139,520) (72,581) (189,080)
------------ ---------- ------------ ---------- ------------ ---------- ------------ ----------
Net increase
(decrease) (244,645) (267,359) 42 (10,183) (35,824) (53,497) (49,467) (137,028)
============ =========== ============ =========== ============ =========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
LOUISIANA FUND MARYLAND FUND MISSOURI FUND NORTH CAROLINA FUND
------------------------ ------------------------ ------------------------ ------------------------
SIX MONTHS SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31,
1996 1995 1996 1995 1996 1995 1996 1995
------------ ---------- ------------ ---------- ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales 10,260 57,113 11,726 39,462 11,752 108,433 176,077 117,585
Issued to shareholders
electing to receive
payments of
distributions in Fund
shares 4,313 9,932 1,518 2,992 6,000 15,293 7,551 19,110
Redemptions (46,557) (146,149) (16,813) (71,369) (54,546) (205,875) (95,637) (275,818)
------------ ---------- ------------ ---------- ------------ ---------- ------------ ----------
Net increase
(decrease) (31,984) (79,104) (3,569) (28,915) (36,794) (82,149) 87,991 (139,123)
============ =========== ============ =========== ============ =========== ============ ===========
</TABLE>
37
<PAGE> 38
- ------------
- --------------------------------------------------------------------------------
(4) SHARES OF BENEFICIAL INTEREST (CONTINUED)
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
OREGON FUND SOUTH CAROLINA FUND TENNESSEE FUND VIRGINIA FUND
------------------------ ------------------------ ------------------------ ------------------------
SIX MONTHS SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31, FEBRUARY 29, AUGUST 31,
1996 1995 1996 1995 1996 1995 1996 1995
------------ ---------- ------------ ---------- ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales 8,546 49,605 43,971 78,633 10,185 28,310 20,996 47,563
Issued to shareholders
electing to receive
payments of
distributions in Fund
shares 1,735 5,073 1,883 6,010 2,447 5,622 2,743 6,044
Redemptions (29,626) (152,245) (81,351) (198,740) (18,949) (40,430) (49,299) (36,854)
------------ ---------- ------------ ---------- ------------ ---------- ------------ ----------
Net decrease (19,345) (97,567) (35,497) (114,097) (6,317) (6,498) (25,560) 16,753
============ =========== ============ =========== ============ =========== ============ ===========
</TABLE>
- --------------------------------------------------------------------------------
(5) 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 Funds, $13,749,
$8,873, $11,053, $9,534, $8,010, $9,082, $10,663, $12,591, $6,817, $7,063,
$8,310 and $9,159 of expenses related to the operation of the Traditional
Alabama Fund, Traditional Arkansas Fund, Traditional Georgia Fund, Traditional
Kentucky Fund, Traditional Louisiana Fund, Traditional Maryland Fund,
Traditional Missouri Fund, Traditional North Carolina Fund, Traditional Oregon
Fund, Traditional South Carolina Fund, Traditional Tennessee Fund and
Traditional Virginia Fund, respectively, were 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), serves as custodian to the Funds and the
Portfolios. Prior to November 10, 1995 IBT was an affiliate of EVM. 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. All significant credit balances used to reduce the Fund's
custody fees are reported as a reduction of expenses in the Statement of
Operations. Certain of the officers and Trustees of the Funds and Portfolios are
officers and directors/trustees of the above organizations (Note 6).
- --------------------------------------------------------------------------------
(6) DISTRIBUTION PLAN
Prior to February 1, 1996, each Fund had adopted a distribution plan (the Plan)
pursuant to Rule 12b-1 under the Investment Company Act of 1940. The Plans
required the Funds to pay the principal underwriter, Eaton Vance Distributors,
Inc. (EVD), amounts equal to 1/365 of 0.75% of each Funds daily net assets, for
providing ongoing distribution services and facilities to the respective Fund. A
Fund would automatically discontinue payments to EVD during any period in which
there are no outstanding Uncovered Distribution Charges, which were equivalent
to the sum of (i) 6.25% 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 (see Note 6) and amounts theretofore paid to EVD. The amount payable to
EVD with respect to each day was accrued on such day as a liability of each Fund
and, accordingly, reduces the Fund's net assets. For the period from September
1, 1995 to January 31, 1996, Traditional Alabama Fund, Traditional Arkansas
Fund, Traditional Georgia Fund, Traditional Kentucky Fund, Traditional Louisiana
Fund, Traditional Maryland Fund, Traditional Missouri Fund, Traditional North
Carolina Fund, Traditional Oregon Fund, Traditional South Carolina Fund,
Traditional Tennessee Fund and Traditional Virginia Fund, paid $28,584, $1,657,
$7,243, $5,706, $7,826, $3,039, $9,879, $19,780, $2,952, $4,102, $3,416 and
$4,813, respectively to EVD representing 0.75% (annualized) of average daily net
assets. At February 29, 1996, the amount of Uncovered Distribution Charges of
EVD calculated under the Plans for Traditional Alabama Fund, Traditional
Arkansas Fund, Traditional Georgia Fund, Traditional Kentucky Fund, Traditional
Louisiana Fund, Traditional Maryland Fund, Traditional Missouri Fund,
Traditional North Carolina Fund, Traditional Oregon Fund, Traditional South
Carolina Fund, Traditional Tennessee Fund and Traditional Virginia Fund were
approximately $890,000, $53,000, $419,000, $319,000, $261,000, $100,000,
$346,000, $761,000, $235,000, $229,000, $120,000 and $169,000, respectively.
In addition, the Plans permitted the Funds to make monthly payments of service
fees to the Principal Underwriter, in amounts not expected to exceed 0.25% of
each Fund's average daily net assets for any fiscal year. The Trustees had
initially implemented the Plans by authorizing the Funds to make monthly service
fee payments to the Principal Underwriter in amounts not exceeding 0.20% of each
Fund's average daily net
38
<PAGE> 39
- ------------
- --------------------------------------------------------------------------------
assets for any fiscal year. For the period from September 1, 1995 to January 31,
1996, Traditional Alabama Fund, Traditional Arkansas Fund, Traditional Georgia
Fund, Traditional Kentucky Fund, Traditional Louisiana Fund, Traditional
Maryland Fund, Traditional Missouri Fund, Traditional North Carolina Fund,
Traditional Oregon Fund, Traditional South Carolina Fund, Traditional Tennessee
Fund and Traditional Virginia Fund paid service fees to EVD in the amount of
$7,622, $442, $1,931, $1,522, $2,087, $810, $2,634, $5,275, $787, $1,094, $911
and $1,284, respectively. Pursuant to the Distribution Plan, on sales made prior
to January 30, 1995, EVD made monthly service fee payments to Authorized Firms
in amounts equivalent to 0.20%, annualized, of the assets maintained in each
Fund by their customers. On sales of shares made between January 30, 1995 and
February 1, 1996, EVD paid an Authorized Firm a service fee at the time of sale
equal to 0.20% of the purchase price of the shares sold by such Firm and monthly
payments of service fees in amounts not exceeding 0.20% per annum of the Funds'
average daily net assets based on the value of Fund shares sold by such Firm and
remaining outstanding for at least one year. During the first year after a
purchase of Fund shares, EVD retained the service fee as reimbursement for the
service fee payment made to the Authorized Firm at the time of sale. Service fee
payments were made for personal services and/or maintenance of shareholder
accounts. Service fees paid to EVD and Authorized Firms were separate and
distinct from the sales commissions and distribution fees payable by a Fund to
EVD, and as such were not subject to automatic discontinuance when there are no
outstanding Uncovered Distribution Charges of EVD.
Certain of the officers and Trustees of the Funds are officers or directors of
EVD.
- --------------------------------------------------------------------------------
(7) SERVICE PLAN
Effective February 1, 1996 each Fund revised its distribution plan to become a
service plan designed to meet the service fee requirements of the sales charge
rule of The National Association of Securities Dealers, Inc. The Service Plans
provide that each Fund may make service fee payments to EVD, Authorized Firms or
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 each Plan by
authorizing the Fund to make quarterly service fee payments to the Principal
Underwriter and Authorized Firms in amounts not exceeding 0.20% of each Fund's
average daily net assets for any fiscal year which is attributable to shares of
a Fund sold by such persons and remaining outstanding for at least one year.
Service fee payments are made for personal services and/or the maintenance of
shareholder accounts. For the period from February 1, 1996 to February 29, 1996,
Traditional Alabama Fund, Traditional Arkansas Fund, Traditional Georgia Fund,
Traditional Kentucky Fund, Traditional Louisiana Fund, Traditional Maryland
Fund, Traditional Missouri Fund, Traditional North Carolina Fund, Traditional
Oregon Fund, Traditional South Carolina Fund, Traditional Tennessee Fund and
Traditional Virginia Fund paid or accrued service fees of $1,236, $86, $354,
$248, $351, $156, $468, $1,164, $138, $153, $165 and $233, respectively.
Certain of the officers and Trustees of the Funds are officers or directors of
EVD.
- --------------------------------------------------------------------------------
(8) CONTINGENT DEFERRED SALES CHARGES
For shares purchased between January 30, 1995 and January 31, 1996, a contingent
deferred sales charge (CDSC) of 1% is imposed on any redemption of Fund shares
made within one year of purchase. 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. 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 Funds'
Distribution Plans. CDSC received when no Uncovered Distribution Charges exist
will be credited to the Funds. For the six months ended February 29, 1996, EVD
received approximately $20, $55, $100, $250, $1,000, $2,100, $55, $300, $30 and
$100 of CDSC paid by shareholders of Traditional Alabama Fund, Traditional
Georgia Fund, Traditional Kentucky Fund, Traditional Louisiana Fund, Traditional
Maryland Fund, Traditional Missouri Fund, Traditional North Carolina Fund,
Traditional Oregon Fund, Traditional South Carolina Fund and Traditional
Tennessee Fund, respectively. EVD did not receive any CDSC from Traditional
Arkansas Fund or Traditional Virginia Fund during the period ended February 29,
1996.
- --------------------------------------------------------------------------------
39
<PAGE> 40
- ------------
- --------------------------------------------------------------------------------
(9) INVESTMENT TRANSACTIONS
Increases and decreases in each Fund's investment in its corresponding Portfolio
for the six months ended February 29, 1996 were as follows:
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
ALABAMA ARKANSAS GEORGIA KENTUCKY
FUND FUND FUND FUND
----------- -------------- ------------ --------------
<S> <C> <C> <C> <C>
Increases $ 291,828 $ 39,816 $268,525 $231,811
Decreases 2,942,670 44,428 653,778 635,817
</TABLE>
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
FUND FUND FUND FUND
----------- -------------- ------------ --------------
<S> <C> <C> <C> <C>
Increases $ 120,718 $133,691 $162,590 $1,637,612
Decreases 552,382 180,807 580,060 1,019,465
</TABLE>
<TABLE>
<CAPTION>
TRADITIONAL TRADITIONAL TRADITIONAL TRADITIONAL
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
FUND FUND FUND FUND
----------- -------------- ------------ --------------
<S> <C> <C> <C> <C>
Increases $ 104,593 $453,906 $ 88,544 $ 104,529
Decreases 300,450 821,308 209,399 498,022
</TABLE>
- --------------------------------------------------------------------------------
(10) SPECIAL MEETINGS OF SHAREHOLDERS
On December 15, 1995, special meetings of the shareholders of each of the Funds
were held for the purpose of voting on the matters listed below. On October 23,
1995, the record date of the meetings, each of the Funds had the following
number of shares outstanding and each Fund had the following number of shares
represented at the December 15, 1995 meetings:
<TABLE>
<CAPTION>
SHARES OUTSTANDING SHARES REPRESENTED
FUND AT 10/23/95 AT 12/15/95 MEETINGS
- --------------------------------- ------------------ --------------------
<S> <C> <C>
Traditional Alabama 947,190 490,295
Traditional Arkansas 54,680 28,208
Traditional Georgia 245,251 124,032
Traditional Kentucky 193,544 99,840
Traditional Louisiana 262,598 145,963
Traditional Maryland 103,906 53,759
Traditional Missouri 331,447 169,537
Traditional North Carolina 658,379 478,756
Traditional Oregon 96,667 48,785
Traditional South Carolina 130,971 103,596
Traditional Tennessee 115,923 60,326
Traditional Virginia 162,484 97,956
</TABLE>
ITEM 1. To consider and act on a proposal to amend each Fund's investment
policy to provide that the Fund may invest without limit in municipal
obligations, the interest on which is exempt from regular federal income tax
(but which may be a tax preference item for purposes of alternative minimum tax)
and from the State taxes that, in accordance with each Fund's investment
objective, the Fund seeks to avoid.
40
<PAGE> 41
- ------------
- --------------------------------------------------------------------------------
(10) SPECIAL MEETINGS OF SHAREHOLDERS (CONTINUED)
ITEM 2. To approve the revision of certain of each Fund's fundamental
investment restrictions as follows:
<TABLE>
<S> <C>
2A. Eliminate the restriction concerning transactions with affiliates.
2B. Eliminate the restriction concerning investing for control.
2C. Eliminate the restriction concerning joint transactions.
2D. Reclassify the restriction concerning short sales.
2E. Reclassify the restriction concerning investment in affiliated issuers.
2F. Reclassify the restriction concerning investment in exploration companies.
2G. Eliminate the restriction concerning diversification of assets.
2H. Amend the restriction concerning underwriting.
2I. Amend the restriction concerning investing in futures transactions.
2J. Amend the restriction concerning lending.
2K. Amend the restriction concerning borrowing, pledging and senior securities.
2L. Clarify the restrictions concerning investing in another investment company.
</TABLE>
The following are the results of the voting on each proposal:
<TABLE>
<CAPTION>
FOR THE TRADITIONAL ALABAMA FUND:
PROPOSAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 2A 2B 2C 2D 2E 2F
FOR 444,906 469,856 473,864 473,864 449,895 444,170 449,699
AGAINST 14,654 4,543 2,529 2,529 4,025 11,568 6,039
ABSTAIN 30,736 15,896 13,902 13,902 36,375 34,557 34,557
PROPOSAL
2G 2H 2I 2J 2K 2L
FOR 451,022 444,521 438,942 439,054 440,838 450,458
AGAINST 4,716 11,741 15,858 15,746 13,928 3,617
ABSTAIN 34,557 34,033 35,495 35,495 35,529 36,220
<CAPTION>
FOR THE TRADITIONAL ARKANSAS FUND:
PROPOSAL
1 2A 2B 2C 2D 2E 2F
FOR 27,666 28,208 28,208 28,208 28,208 28,208 28,208
AGAINST 0 0 0 0 0 0 0
ABSTAIN 542 0 0 0 0 0 0
PROPOSAL
2G 2H 2I 2J 2K 2L
FOR 28,208 28,208 28,208 28,208 28,208 28,208
AGAINST 0 0 0 0 0 0
ABSTAIN 0 0 0 0 0 0
</TABLE>
41
<PAGE> 42
- ------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(10) SPECIAL MEETINGS OF SHAREHOLDERS (CONTINUED)
FOR THE TRADITIONAL GEORGIA FUND:
PROPOSAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 2A 2B 2C 2D 2E 2F
FOR 111,040 110,685 108,480 110,685 107,110 110,927 104,905
AGAINST 0 355 2,560 355 539 539 6,561
ABSTAIN 12,992 12,992 12,992 12,992 16,383 12,556 12,556
PROPOSAL
2G 2H 2I 2J 2K 2L
FOR 104,905 110,927 104,905 107,110 110,927 110,685
AGAINST 2,744 539 6,561 4,356 539 781
ABSTAIN 16,383 12,566 12,566 12,566 12,566 12,566
<CAPTION>
FOR THE TRADITIONAL KENTUCKY FUND:
PROPOSAL
1 2A 2B 2C 2D 2E 2F
FOR 87,749 76,601 81,371 81,589 71,313 71,531 81,589
AGAINST 12,091 23,239 18,469 17,161 27,437 27,219 18,251
ABSTAIN 0 0 0 1,090 1,090 1,090 0
PROPOSAL
2G 2H 2I 2J 2K 2L
FOR 81,589 72,403 77,691 76,601 86,441 81,589
AGAINST 18,251 17,161 22,149 23,239 13,399 18,251
ABSTAIN 0 10,276 0 0 0 0
<CAPTION>
FOR THE TRADITIONAL LOUISIANA FUND:
PROPOSAL
1 2A 2B 2C 2D 2E 2F
FOR 145,963 145,963 145,963 145,963 145,963 145,963 145,963
AGAINST 0 0 0 0 0 0 0
ABSTAIN 0 0 0 0 0 0 0
PROPOSAL
2G 2H 2I 2J 2K 2L
FOR 145,963 145,963 145,963 145,963 145,963 145,963 145,963
AGAINST 0 0 0 0 0 0 0
ABSTAIN 0 0 0 0 0 0 0
<CAPTION>
FOR THE TRADITIONAL MARYLAND FUND:
PROPOSAL
1 2A 2B 2C 2D 2E 2F
FOR 46,666 47,838 47,893 47,893 47,893 47,893 47,838
AGAINST 0 55 0 0 0 0 55
ABSTAIN 7,093 5,865 5,865 5,865 5,865 5,865 5,865
PROPOSAL
2G 2H 2I 2J 2K 2L
FOR 47,838 47,893 47,838 47,838 47,838 47,893
AGAINST 55 0 55 55 55 0
ABSTAIN 5,865 5,865 5,865 5,865 5,865 5,865
</TABLE>
42
<PAGE> 43
- ------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(10) SPECIAL MEETINGS OF SHAREHOLDERS (CONTINUED)
FOR THE TRADITIONAL MISSOURI FUND:
PROPOSAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 2A 2B 2C 2D 2E 2F
FOR 138,685 122,194 131,164 130,657 128,065 128,065 127,558
AGAINST 706 9,881 910 1,417 4,009 4,009 4,009
ABSTAIN 30,146 37,462 37,462 37,462 37,462 37,462 37,969
PROPOSAL
2G 2H 2I 2J 2K 2L
FOR 127,860 131,369 122,398 134,716 131,369 131,369
AGAINST 4,214 706 9,676 706 706 706
ABSTAIN 37,462 37,462 37,462 34,115 37,462 37,462
<CAPTION>
FOR THE TRADITIONAL NORTH CAROLINA FUND:
PROPOSAL
1 2A 2B 2C 2D 2E 2F
FOR 449,310 446,274 454,277 462,466 461,323 445,131 445,131
AGAINST 19,695 28,428 20,426 12,236 13,379 21,328 20,239
ABSTAIN 9,751 4,054 4,054 4,054 4,054 12,243 13,386
PROPOSAL
2G 2H 2I 2J 2K 2L
FOR 453,134 462,466 446,274 445,131 446,274 453,134
AGAINST 12,236 12,236 20,239 20,239 20,239 12,236
ABSTAIN 13,386 4,054 12,243 13,386 12,243 13,386
<CAPTION>
FOR THE TRADITIONAL OREGON FUND:
PROPOSAL
1 2A 2B 2C 2D 2E 2F
FOR 42,481 43,716 40,379 42,552 42,552 43,644 41,019
AGAINST 1,807 670 615 615 615 1,862 3,366
ABSTAIN 4,498 4,400 7,792 5,618 5,618 3,280 4,400
PROPOSAL
2G 2H 2I 2J 2K 2L
FOR 41,360 43,716 42,579 43,644 42,524 44,313
AGAINST 1,807 670 1,807 1,807 1,807 1,192
ABSTAIN 5,618 4,400 4,400 3,335 4,455 3,280
<CAPTION>
FOR THE TRADITIONAL SOUTH CAROLINA FUND:
PROPOSAL
1 2A 2B 2C 2D 2E 2F
FOR 103,596 103,134 103,134 103,134 103,134 103,134 103,134
AGAINST 0 0 0 0 0 0 0
ABSTAIN 0 462 462 462 462 462 462
PROPOSAL
2G 2H 2I 2J 2K 2L
FOR 103,134 101,227 101,227 101,227 101,227 101,227
AGAINST 0 0 0 0 0 0
ABSTAIN 462 2,369 2,369 2,369 2,369 2,369
</TABLE>
43
<PAGE> 44
- ------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(10) SPECIAL MEETINGS OF SHAREHOLDERS (CONTINUED)
FOR THE TRADITIONAL TENNESSEE FUND:
PROPOSAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 2A 2B 2C 2D 2E 2F
FOR 58,170 58,170 58,170 58,170 58,170 58,170 58,170
AGAINST 2,156 2,156 2,156 2,156 2,156 2,156 2,156
ABSTAIN 0 0 0 0 0 0 0
PROPOSAL
2G 2H 2I 2J 2K 2L
FOR 58,170 58,170 58,170 58,170 58,170 58,170
AGAINST 2,156 2,156 2,156 2,156 2,156 2,156
ABSTAIN 0 0 0 0 0 0
<CAPTION>
FOR THE TRADITIONAL VIRGINIA FUND:
PROPOSAL
1 2A 2B 2C 2D 2E 2F
FOR 97,956 86,662 86,662 86,662 94,830 97,544 94,830
AGAINST 0 11,294 11,294 11,294 412 412 412
ABSTAIN 0 0 0 0 2,714 0 2,714
PROPOSAL
2G 2H 2I 2J 2K 2L
FOR 94,830 94,830 94,830 94,830 94,830 97,544
AGAINST 3,126 412 412 412 412 412
ABSTAIN 0 2,714 2,714 2,714 2,714 0
</TABLE>
44
<PAGE> 45
- ------------
Alabama Municipals Portfolio
Portfolio of Investments - February 29, 1996
(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>
ELECTRIC UTILITIES - 3.7%
NR BBB $ 500 Guam Power Authority,
6.625%, 10/1/14 $ 514,705
Baa1 A- 180 Puerto Rico Electric Power
Authority, 7.00%, 7/1/07 194,432
Baa1 A- 500 Puerto Rico Electric Power
Authority, 6.375%, 7/1/24 520,465
Baa1 A- 935 Puerto Rico Electric Power
Authority, 6.00%, 7/1/16 944,210
Baa1 A- 1,000 Puerto Rico Electric Power
Authority, 6.00%, 7/1/10 1,012,780
Baa1 A- 1,000 Puerto Rico Electric Power
Authority, 5.50%, 7/1/20 958,540
------------
$ 4,145,132
------------
ESCROWED - 5.1%
NR AA $ 500 Birmingham, Alabama
Improvement Warrants,
6.60%, 7/1/17 $ 560,930
NR BBB 2,000 Gadsen, Alabama Medical
Clinic Board (Baptist
Hospital), 7.80%, 11/1/21 2,368,280
NR BBB 350 Gadsen, Alabama Medical
Clinic Board (Baptist
Hospital), 7.60%, 11/1/08 410,981
Baa1 A- 320 Puerto Rico Electric
Power, 7.00%, 7/1/07 355,357
Aaa AAA 250 Tuscaloosa, Alabama
Limited Obligation-Capital
Outlay Warrants (AMBAC),
6.50%, 2/1/15 270,032
Aa NR 1,600 University of Alabama-
Birmingham Medical &
Educational Foundation
Housing, 7.00%, 12/1/19 1,780,768
------------
$ 5,746,348
------------
GENERAL OBLIGATIONS - 5.8%
A1 AA $1,000 Birmingham, Alabama
U.T.G.O., 5.75%, 6/1/16 $ 1,012,280
Baa1 A 1,000 Puerto Rico, 5.40%, 7/1/25 946,530
Baa1 A 4,000 Puerto Rico U.T.G.O.,
6.50%, 7/1/23 4,296,480
NR NR 250 Virgin Islands, 7.25%,
10/1/18 264,850
------------
$ 6,520,140
------------
HEALTH CARE - 1.8%
Baa BBB $2,000 Marshall, AL
Boaz-Albertville Medical
Center, 7.00%, 1/1/20 $ 2,060,920
------------
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
HOSPITALS - 11.1%
Aa AA $2,250 Alabama Special Care
(Daughters of Charity),
5.00%, 11/1/25 $ 2,008,058
NR BBB 3,000 Alexander, Alabama Special
Care (Russell Hospital),
6.00%, 12/1/22 (2) 2,782,020
Baa NR 1,000 Cullman, Alabama Medical
Clinic Board (Cullman
Regional Medical Center),
6.50%, 2/15/23 993,650
Baa1 NR 2,000 Jasper, Alabama Medical
Clinic Board (Walker
Regional Medical Center),
6.40%, 7/1/11 2,003,600
Baa1 NR 3,550 Jasper, Alabama Medical
Clinic Board (Walker
Regional Medical Center),
6.375%, 7/1/18 (4) 3,501,791
A A 1,000 Montgomery, Alabama
Medical Clinic Board
(Jackson Hospital), 7.00%,
3/1/15 1,052,650
------------
$ 12,341,769
------------
INDUSTRIAL DEVELOPMENT
REVENUE/POLLUTION CONTROL
REVENUE - 11.0%
Baa1 BBB $1,200 Courtland, Alabama
(Champion International
Corporation), 7.20%,
12/1/13 $ 1,308,492
Baa1 BBB 800 Courtland, Alabama
(Champion International
Corporation), 7.00%,
6/1/22 842,280
Baa1 BBB 2,000 Courtland, Alabama
(Champion International
Corporation), 6.50%,
9/1/25 2,020,920
Baa3 BBB- 2,000 Mobile County, Alabama
(Mobile Energy), 6.95%,
1/1/20 2,099,040
Aa2 AA 3,000 Mobile County, Alabama
(Mobil Oil), 6.00%,
12/1/14 3,106,740
A2 NR 1,000 PR IM&E (American Home
Products), 5.10%, 12/1/18 927,570
Baa3 BB+ 1,000 Puerto Rico Port Authority
(American Airlines),
6.30%, 6/1/23 1,008,930
A3 A- 1,000 Selma, Alabama
(International Paper Oil),
6.00%, 12/1/17 992,690
------------
$ 12,306,662
------------
</TABLE>
45
<PAGE> 46
- ------------
- --------------------------------------------------------------------------------
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 - 13.5%
Aaa AAA $1,000 Alabama A&M University
(MBIA), 6.375%, 11/1/09 $ 1,072,490
Aaa AAA 1,770 Alabama A&M University
(MBIA), 5.75%, 11/1/14 1,807,559
Aaa Aaa 3,750 Alabama A&M University
(MBIA), 5.50%, 11/1/20 3,714,713
Aaa Aaa 3,755 Alabama State University
Tuition & Fee (MBIA),
5.80%, 12/1/20 3,780,046
Aaa AAA 4,000 University of Alabama
Student Housing (MBIA),
5.00%, 6/1/16 3,748,000
Aaa AAA 1,000 University of South
Alabama Tuition (AMBAC),
5.00%, 11/15/15 943,680
------------
$ 15,066,488
------------
INSURED ELECTRIC
UTILITIES - 6.4%
Aaa AAA $1,500 Athens, Alabama Electric
(MBIA), 6.00%, 6/1/25 $ 1,540,560
Aaa AAA 3,000 Columbia, Alabama IDB (AL
Power) (AMBAC), 6.50%,
9/1/23 3,150,510
Aaa AAA 250 Puerto Rico Electric Power
Authority (STRIPES) (FSA),
Variable, 7/1/03 (1) 289,423
Aaa AAA 2,000 Wilsonville, Alabama PCR
(MBIA), 6.75%, 2/1/15 2,148,360
------------
$ 7,128,853
------------
INSURED GENERAL
OBLIGATIONS - 5.7%
Aaa AAA $ 500 Fairfield City, Alabama
U.T.G.O. (AMBAC), 6.30%,
6/1/22 $ 527,855
Aaa AAA 2,065 Hoover Alabama Warrants
(AMBAC), 5.00%, 3/1/20 1,910,228
Aaa AAA 3,250 Madison Alabama School
Warrants (MBIA), 6.00%,
2/1/24 3,365,083
Aaa AAA 500 Troy City, Alabama (CAPG),
6.60%, 6/1/12 542,680
------------
$ 6,345,846
------------
INSURED HEALTH CARE - 1.9%
Aaa AAA $2,000 Huntsville, Alabama Health
Care Facilities (MBIA),
6.50%, 6/1/13 $ 2,149,900
------------
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED HOSPITAL - 5.4%
Aaa AAA $2,500 Birmingham, Alabama
Baptist Medical Center
(MBIA), 5.875%, 11/15/20 $ 2,529,400
Aaa AAA 2,500 Birmingham, Alabama
Baptist Medical Center
(MBIA), 6.00%, 11/15/24 2,544,600
Aaa AAA 1,000 Houston County, Southeast
Alabama Medical Center
(MBIA), 5.75%, 10/1/22 1,002,500
------------
$ 6,076,500
------------
INSURED LEASE/CERTIFICATES
OF PARTICIPATION - 3.3%
Aaa AAA $3,700 Montgomery, Alabama
Downtown Redevelopment
Authority Mortgage (MBIA),
5.50%, 10/1/13 $ 3,699,815
------------
INSURED
MISCELLANEOUS - 0.5%
Aaa AAA $1,950 Jefferson County, Alabama
Birmingham-Jefferson Civic
Center (MBIA), 0%, 9/1/18 $ 537,849
------------
INSURED SOLID WASTE - 4.2%
Aaa AAA $4,000 Huntsville, Alabama Solid
Waste Disposal (FGIC)
(AMT), 7.00%, 10/1/14 $ 4,313,640
Aaa AAA 350 Huntsville, Alabama Solid
Waste Disposal (FGIC)
(AMT), 7.00%, 10/1/08 383,411
------------
$ 4,697,051
------------
INSURED WATER
& SEWER - 15.2%
Aaa AAA $2,500 Alabama Water Pollution
Control Authority (AMBAC),
5.00%, 8/15/15 $ 2,346,100
Aaa AAA 1,100 Gulf Shores, Alabama Water
and Sewer (AMBAC), 6.50%,
2/1/15 1,181,763
Aaa AAA 500 Northeast, Alabama Water,
Sewer and Fire Protection
(AMBAC), 5.70%, 5/1/23 503,520
Aaa AAA 3,075 Prichard, Alabama Water
and Sewer (AMBAC), 6.125%,
11/15/14 3,220,909
Aaa AAA 1,400 Satsuma Alabama Waterworks
and Sewer (MBIA), 6.00%,
7/1/25 1,438,080
</TABLE>
46
<PAGE> 47
- ------------
- --------------------------------------------------------------------------------
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 WATER & SEWER - (CONTINUED)
Aaa AAA 6,000 Scottsboro, Alabama Water,
Sewer and Gas (AMBAC),
6.50%, 12/1/14 (3) 6,493,620
Aaa AAA 750 West Morgan-East Lawrence,
Alabama Water Authority
(FGIC), 6.00%, 5/1/22 765,555
Aaa AAA 1,000 West Morgan-East Lawrence,
Alabama Water Authority
(FSA), 6.85%, 8/15/25 1,097,110
------------
$ 17,046,657
------------
LEASE - 0.4%
NR BBB $500 PR ITEM Guaynabo Lease,
5.625%, 7/1/22 $ 474,030
------------
MISCELLANEOUS - 0.1%
A A $100 Tennessee Valley, Alabama
Exhibit Commission, 6.70%,
6/1/10 $ 109,234
------------
NURSING HOMES - 0.9%
NR NR $325 Fairhope Alabama Midtown
Medical Clinic Board
(Beverly Enterprises),
6.375%, 6/1/09 $ 311,111
NR NR 670 Mobile Alabama Midtown
Medical Clinic Board
(Beverly Enterprises),
7.00%, 4/1/07 670,650
------------
$ 981,761
------------
SPECIAL TAX REVENUE - 1.8%
Baa1 A $1,800 Puerto Rico Highway and
Transportation, 6.625%,
7/1/18 $ 1,964,178
------------
TRANSPORTATION - 0.9%
NR BBB $1,000 Guam Airport Authority,
6.70%, 10/1/23 $ 1,010,470
------------
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WATER & SEWER - 1.3%
NR NR $1,500 Moulton City, Alabama
Water, 6.30%, 1/1/18 $ 1,485,960
------------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$106,424,866) $111,895,563
============
</TABLE>
(1) Security has been issued as an inverse floater bond.
(2) When-issued security.
(3) Security has been segregated to cover when-issued securities.
(4) Security has been segregated to cover margin requirements on open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Alabama
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 February 29, 1996, 56.1% 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 0.5% to 31.1% of total investments.
See notes to financial statements
47
<PAGE> 48
- ------------
Arkansas Municipals Portfolio
Portfolio of Investments - February 29, 1996
(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 - 3.5%
A1 NR $1,750 University of Arkansas
Board of Trustees, 7.20%,
12/1/10 $ 1,993,932
A NR 610 Arkansas State Student Loan
Authority, 7.25%, 6/1/09 678,308
------------
$ 2,672,240
------------
ELECTRIC UTILITIES - 9.7%
A NR $1,750 Conway, Arkansas Electric,
5.70%, 8/1/09 $ 1,798,598
NR BBB 1,250 Guam Power Authority,
5.25%, 10/1/13 1,125,137
NR BBB 1,250 Guam Power Authority,
5.25%, 10/1/23 1,088,050
Baa2 BBB 1,500 Independence, Arkansas PCR
(AR P & L), 6.25%, 1/1/21 1,518,840
Baa2 BBB- 750 Jefferson, Arkansas PCR (AR
P & L), 6.125%, 10/1/07 750,300
Baa2 BBB 550 Jefferson, Arkansas PCR (AR
P & L), 6.30%, 6/1/18 568,370
Baa2 BBB 500 Pope, Arkansas PCR (AR
P & L), 6.30%, 12/1/16 510,140
Baa1 A- 500 Puerto Rico Electric Power
Authority, 0%, 7/1/17 141,165
------------
$ 7,500,600
------------
ESCROWED - 3.5%
Aaa AAA $ 500 Arkansas DFA Wastewater
System (MBIA), 7.00%,
6/1/14 $ 566,680
Aaa AAA 650 Arkansas State Waste
Disposal and Pollution
Abatement U.T.G.O., 6.25 %,
7/1/22 715,689
Aaa AAA 500 Harrison, Arkansas Single
Family Mortgage (FGIC),
7.40%, 9/1/11 592,390
Aaa AAA 750 Puerto Rico Public
Buildings Authority 6.875%,
7/1/21 866,708
------------
$ 2,741,467
------------
GENERAL OBLIGATIONS - 4.4%
Aa AA $ 750 Arkansas State College
Savings, 0%, 6/1/13 $ 290,415
Aa AA 2,750 Arkansas State College
Savings, 0%, 6/1/14 990,110
Aa AA 1,000 Arkansas State College
Savings, 0%, 6/1/14 360,040
Baa1 A 1,000 Puerto Rico Public
Improvement, 5.25%, 7/1/18 937,490
NR NR 750 Virgin Island, 7.25%,
10/1/18 794,550
------------
$ 3,372,605
------------
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
HOSPITALS - 14.8%
Aa AA $2,750 Arkansas DFA (Sisters of
Mercy), 5.00%, 6/1/19 $ 2,533,383
Baa NR 700 Baxter, Arkansas Hospital
Improvement, 7.25%, 9/1/07 752,857
Baa NR 750 Baxter, Arkansas Hospital
Improvement, 7.50%, 9/1/21 810,690
NR A+ 1,125 Little Rock, Arkansas
(Baptist Medical Center),
6.80%, 11/1/05 1,272,048
NR A+ 1,750 Little Rock, Arkansas
(Baptist Medical Center),
5.50%,
9/1/15 (2) 1,717,170
NR A 1,000 Little Rock, Arkansas
(Baptist Medical
Center-Parkway Village),
7.00%, 10/1/17 1,075,820
NR A- 2,250 Pulaski, Arkansas
(Children's Hospital),
6.20%, 3/1/22 2,294,978
A1 AA 1,000 Sebastian, Arkansas (Sparks
Regional Medical Center),
5.60%, 4/1/06 1,041,810
------------
$11,498,756
------------
HOUSING - 11.3%
NR AAA $1,855 Arkansas DFA Single Family
Mortgage (GNMA, AMT),
5.80%, 6/1/25 $ 1,847,024
NR AAA 750 Arkansas DFA Single Family
Mortgage (GNMA, AMT),
7.85%, 12/1/21 793,800
NR AAA 1,000 Arkansas DFA Single Family
Mortgage (GNMA/FNMA, AMT),
6.35%, 7/1/22 1,018,690
NR AAA 860 Arkansas DFA Single Family
Mortgage (GNMA/FNMA),
6.60%, 7/1/17 904,032
NR AAA 1,295 Arkansas DFA Single Family
Mortgage (GNMA/FNMA, AMT),
6.80%, 1/1/22 1,360,618
NR AAA 740 Arkansas DFA Single Family
Mortgage (GNMA/FNMA),
6.70%, 7/1/27 760,593
NR AAA 1,000 Arkansas DFA Single Family
Mortgage (GNMA, AMT),
7.45%, 1/1/27 1,087,540
A NR 3,000 Arkansas DFA Compound
Accretion, 0%, 12/1/11 1,008,150
------------
$ 8,780,447
------------
</TABLE>
48
<PAGE> 49
- ------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
INDUSTRIAL DEVELOPMENT
REVENUE/POLLUTION CONTROL
REVENUE - 14.4%
Baa2 BBB $2,350 Baxter, Arkansas (Aeroquip
Corporation), 5.80%,
10/1/13 (2) $ 2,337,075
A1 AA- 2,500 Blytheville, Arkansas
(Nucor Corporation), 6.90%,
12/1/21 2,673,650
A1 AA- 300 Blytheville, Arkansas
(Nucor Corporation),
6.375%, 1/1/23 310,284
A3 A- 745 Gurdon, Arkansas
(International Paper),
5.75%, 2/1/08 746,274
A1 AA- 1,000 Jonesboro, Arkansas
(Anheuser-Busch), 6.50%,
11/15/12 1,093,330
NR A- 550 Pine Bluff, Arkansas
(International Paper),
5.55%, 10/1/17 533,830
A2 NR 750 Puerto Rico IM&E (American
Home Products), 5.10%,
12/1/18 695,678
Baa3 BB+ 2,740 Puerto Rico Ports Authority
(American Airlines) (AMT),
6.30%, 6/1/23 2,764,468
------------
$11,154,589
------------
INSURED ELECTRIC
UTILITIES - 7.4%
Aaa AAA $ 250 North Little Rock, Arkansas
Electric System (MBIA),
6.50%, 7/1/10 $ 276,895
Aaa AAA 3,390 North Little Rock, Arkansas
Electric System (MBIA),
6.50%, 7/1/15 3,846,769
Aaa AAA 450 Puerto Rico Electric Power
Authority (STRIPES) (FSA),
Variable, 7/1/03 (1) 520,960
Aaa AAA 1,000 West Memphis, Arkansas
Public Utilities (MBIA),
6.60%, 1/1/09 1,082,190
------------
$ 5,726,814
------------
INSURED GENERAL
OBLIGATIONS - 5.8%
Aaa AAA $1,610 Jonesboro, Arkansas School
District (AMBAC), 6.125%,
2/1/15 $ 1,643,698
Aaa AAA 1,090 Lincoln, Arkansas School
District #48 (MBIA),
5.00%, 2/1/18 1,037,015
Aaa AAA 500 Springdale, Arkansas School
District (AMBAC), 5.125%,
6/1/16 483,155
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaa AAA 680 White Hall, Arkansas School
District (AMBAC), 4.75%,
4/1/12 648,339
Aaa AAA 710 White Hall, Arkansas School
District (AMBAC), 4.75%,
4/1/13 671,795
------------
$ 4,484,002
------------
INSURED HEALTH CARE - 1.2%
Aaa AAA $ 400 Saline, Arkansas Healthcare
(Evan Lutheran Good
Samaritan) (AMBAC), 5.80%,
6/1/11 $ 408,908
Aaa AAA 500 Saline, Arkansas Healthcare
(Evan Lutheran Good
Samaritan) (AMBAC), 6.00%,
6/1/16 526,005
------------
$ 934,913
------------
INSURED
TRANSPORTATION - 0.7%
Aaa AAA $ 500 Little Rock, Arkansas
Airport (MBIA), 6.00%,
11/1/14 $ 517,670
------------
INSURED WATER & SEWER -
7.3%
Aaa AAA $1,250 Arkansas DFA Wastewater
System (MBIA), 5.40%,
12/1/15 $ 1,254,063
Aaa AAA 1,680 Arkansas DFA Wastewater
System (MBIA), 5.00%,
12/1/08 1,656,530
Aaa AAA 2,000 Arkansas DFA Wastewater
System (MBIA), 5.00%,
6/1/15 1,914,040
Aaa AAA 300 Beaver, Arkansas Water
District (MBIA), 5.85%,
11/15/08 316,911
Aaa AAA 500 Jonesboro, Arkansas Water
and Light (AMBAC), 5.25%,
12/1/13 494,835
------------
$ 5,636,379
------------
LEASE/CERTIFICATE OF
PARTICIPATION - 0.3%
NR BBB $ 250 Puerto Rico IM&E Guaynabo
Lease, 5.625%, 7/1/22 $ 237,015
------------
MISCELLANEOUS - 3.1%
A NR $2,000 Little Rock, Arkansas Hotel
and Restaurant Gross
Receipts Tax, 7.375%,
8/1/15 $ 2,427,480
------------
SPECIAL TAX REVENUE - 3.5%
Baa1 A $3,000 Puerto Rico Highway and
Transportation, 5.00%,
7/1/22 $ 2,674,110
------------
</TABLE>
49
<PAGE> 50
- ------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
WATER & SEWER REVENUE -
9.1%
NR NR $ 800 Conway, Arkansas Water,
5.40%, 5/1/11 $ 804,720
NR NR 1,250 Cross, Arkansas Rural
Water, 5.75%, 4/1/18 1,293,938
A1 NR 3,390 Little Rock, Arkansas
Sewer, 5.50%, 8/1/14 3,401,355
NR NR 1,500 South Sebastian, Arkansas
Water, 6.15%, 6/1/23 1,580,100
------------
$ 7,080,113
------------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$74,234,823) $77,439,200
============
</TABLE>
(1) The above security has been issued as an inverse floater bond.
(2) Security has been segregated to cover margin requirements on open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Arkansas
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 February 29, 1996, 22.3% 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 0.7% to 16.1% of total investments.
See notes to financial statements
50
<PAGE> 51
- ------------
Georgia Municipals Portfolio
Portfolio of Investments - February 29, 1996
(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>
ASSISTED LIVING - 1.3%
NR NR $1,500 De Kalb County Private
Hospital Authority,
Atlanta Inc., 8.50%,
3/1/25 $ 1,525,890
-----------
EDUCATION - 5.9%
Aa1 AA $3,000 De Kalb County, Emory
University, 6.00%, 10/1/14 $ 3,126,210
Aa1 AA 310 Private Colleges and
Universities Authority,
Emory University, 6.40%,
10/1/23 331,030
Aa AA- 3,425 Private Colleges and
Universities Authority,
Agnes Scott College,
5.625%, 6/1/23 3,452,880
-----------
$ 6,910,120
-----------
GENERAL
OBLIGATIONS - 16.1%
Aa AA- $ 300 City of Alpharetta, 6.50%,
5/1/10 (2) $ 342,279
Aa AA 3,350 City of Atlanta, 6.10%,
12/1/19 3,519,343
Aa AA 2,000 City of Atlanta, 6.125%,
12/1/23 2,096,840
Aa AA 1,650 City of Atlanta, Downtown
Development Authority,
Underground Project,
6.25%, 10/1/16 1,747,466
Aa1 AA+ 1,480 Gwinnett County, Water &
Sewer, 6.50%, 8/1/06 1,494,252
Aa AA 1,000 Fulton County School
District, 5.60%, 1/1/13 1,018,820
A A 450 Paulding County School
District, 6.625%, 2/1/08 522,459
Aaa AA+ 500 State of Georgia, 6.30%,
3/1/08 (2) 564,835
Baa1 A 2,500 Commonwealth of Puerto
Rico, 5.40%, 7/1/25 2,366,325
Baa1 A 1,000 Commonwealth of Puerto
Rico, Aqueduct & Sewer
Authority, 6.25%, 7/1/12 1,084,530
Baa1 A 1,875 Commonwealth of Puerto
Rico, Aqueduct & Sewer
Authority, 5.00%, 7/1/19 1,711,162
Baa1 A 1,000 Commonwealth of Puerto
Rico, Public Building
Authority, 5.75%, 7/1/15 994,140
NR NR 1,400 Virgin Islands, 7.25%,
10/1/18 1,483,160
-----------
$ 18,945,611
-----------
HOSPITALS - 11.6%
Baa1 NR $4,250 Fulco County, Georgia
Baptist Health, 6.375%,
9/1/22 $ 4,141,370
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
A NR 5,040 City of Savannah, St.
Joseph's Hospital Project,
6.20%, 7/1/23 5,046,502
NR BBB 1,785 Toombs County, Dr. John M.
Meadows Memorial, 7.00%,
12/1/17 1,831,588
NR BBB+ 2,750 Tri City Hospital
Authority, 6.375%, 7/1/16 2,648,278
-----------
$ 13,667,738
-----------
HOUSING - 10.8%
Aa NR $1,450 Georgia Housing Finance
Authority, (AMT), 6.875%,
12/1/20 $ 1,516,019
Aa AA 2,500 Georgia Housing Finance
Authority, SFMR, (FHA),
(AMT), 6.70%, 12/1/25 2,603,125
Aa AA+ 1,500 Georgia Housing Finance
Authority, SFMR, (FHA),
(AMT), 7.05%, 12/1/20 1,599,900
Aa AA+ 2,380 Georgia Housing Finance
Authority, SFMR, (FHA),
(AMT), 7.125%, 12/1/26 2,542,720
Aa AA+ 4,000 Georgia Housing Finance
Authority, SFMR, (AMT),
6.55%, 12/1/27 4,081,560
Aa AA+ 395 Georgia Residential
Finance Authority, Home
Ownership, (FHA), 7.50%,
6/1/17 421,382
-----------
$ 12,764,706
-----------
INDUSTRIAL DEVELOPMENT
REVENUE - 5.9%
A1 AA- $1,000 Cartersville Development
Authority, Anheuser-Busch,
(AMT), 7.375%, 5/1/09 $ 1,195,720
A2 NR 1,100 Commonwealth of Puerto
Rico, American Home
Product, 5.10%, 12/1/18 1,020,327
NR AA- 500 Savannah Economic
Development Authority,
Hershey Foods, 6.60%,
6/1/12 539,645
NR NR 1,250 Savannah Economic
Development Authority,
Savannah Inc., (AMT),
9.00%, 1/1/15 1,354,150
</TABLE>
51
<PAGE> 52
- ------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
INDUSTRIAL DEVELOPMENT
REVENUE - (CONTINUED)
A1 A- 750 Savannah Economic
Development Authority,
Union Camp Corp., 6.80%,
2/1/12 816,968
NR AA- 2,000 Vienna Water & Sewer,
Cargill Project, (AMT),
6.00%, 9/1/14 2,056,760
-----------
$ 6,983,570
-----------
INSURED GENERAL
OBLIGATIONS - 4.2%
Aaa AAA $2,990 Houston County School
District, (MBIA), 5.375%,
3/1/11 $ 2,982,346
Aaa AAA 1,350 Jackson County School
District, (MBIA), 6.00%,
7/1/14 1,399,261
Aaa AAA 500 Commonwealth of Puerto
Rico, (AMBAC), Variable
7/1/15 (1) 524,495
-----------
$ 4,906,102
-----------
INSURED HOSPITALS - 13.6%
Aaa AAA $ 675 Chatham County, Memorial
Medical Center, (MBIA),
7.00%, 1/1/21 $ 730,985
Aaa AAA 305 Chatham County, Memorial
Medical Center, (MBIA),
6.85%, 1/1/21 329,458
Aaa AAA 1,300 Cobb County, Kennestone
Hospital, (MBIA), 5.00%,
4/1/24 1,188,485
Aaa AAA 2,500 Fulco County, Northside,
(MBIA), 5.125%, 10/1/16 2,370,525
Aaa AAA 2,225 Gainsville and Hall
County, NE Healthcare,
(MBIA), 6.00%, 10/1/25 2,280,870
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaa AAA 1,500 Gwinnett County, Gwinnett
Hospital, (AMBAC), 5.00%,
9/1/13 1,403,610
Aaa AAA 2,500 Macon-Bibb County, The
Medical Center of Central
Georgia, (FGIC), 5.00%,
8/1/14 2,353,550
Aaa AAA 2,000 Medical Center, Columbus
Regional Healthcare,
(MBIA), 6.40%, 8/1/06 2,186,660
Aaa AAA 1,500 Medical Center, Columbus
Regional Healthcare,
(MBIA), Variable 8/1/10
(1) 1,736,085
Aaa AAA 1,375 Walker, Dade and Catoosa
Counties Hospital, (FGIC),
7.00%, 10/1/10 1,538,818
-----------
$ 16,119,046
-----------
INSURED LEASE/CERTIFICATE
OF PARTICIPATION - 0.9%
Aaa AAA $1,000 East Point Building
Authority, (FGIC), 6.00%,
2/1/10 $ 1,059,670
-----------
INSURED SPECIAL TAX - 3.3%
Aaa AAA $1,000 Metropolitan Atlanta Rapid
Transit Authority,
(AMBAC), 6.25%, 7/1/11 $ 1,107,630
Aaa AAA 1,000 Metropolitan Atlanta Rapid
Transit Authority,
(AMBAC), 6.25%, 7/1/20 1,115,690
Aaa AAA 1,750 Metropolitan Atlanta Rapid
Transit Authority,
(AMBAC), 5.125%, 7/1/19 1,642,358
-----------
$ 3,865,678
-----------
</TABLE>
52
<PAGE> 53
- ------------
- --------------------------------------------------------------------------------
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 UTILITIES - 3.5%
Aaa AAA $1,480 Cordele Public Utility
Authority, (MBIA), 6.50%,
11/1/19 $ 1,588,114
Aaa AAA 750 Municipal Electric
Authority of Georgia,
(MBIA), 0%, 1/1/07 433,043
Aaa AAA 1,000 Municipal Electric
Authority of Georgia,
(FGIC), 5.50%, 1/1/12 1,005,170
Aaa AAA 900 Commonwealth of Puerto
Rico, Electric Power
Authority, (FSA), Variable
7/1/03 (1) 1,041,921
-----------
$ 4,068,248
-----------
INSURED WATER & SEWER -
4.0%
Aaa AAA $2,700 City of Atlanta, (FGIC),
5.00%, 1/1/15 $ 2,515,752
Aaa AAA 1,975 Cherokee County, (MBIA),
6.875%, 8/1/13 2,163,850
-----------
$ 4,679,602
-----------
LEASE/CERTIFICATE OF
PARTICIPATION - 0.9%
Aa AA $2,300 Fulton County Building
Authority, Judicial
Center, 0%, 1/1/10 $ 1,102,689
-----------
SOLID WASTE - 0.9%
A1 A+ $1,000 Savannah Resource
Recovery, Savannah Energy
Systems Co., 6.30%,
12/1/06 $ 1,062,860
-----------
SPECIAL TAX - 0.4%
Baa1 A $ 500 Commonwealth of Puerto
Rico, Highway and
Transportation Authority,
5.50%, 7/1/17 $ 478,200
-----------
UTILITIES - 15.8%
A1 A $2,000 Burke County Pollution
Control, Georgia Power,
6.375%, 8/1/24 $ 2,037,720
A1 A+ 1,000 Monroe County Pollution
Control, Gulf Power
Scherer, 6.30%, 9/1/24 1,028,870
A A 3,000 Georgia Municipal Electric
Power Authority, 5.70%,
1/1/23 2,919,390
A A 2,000 Georgia Municipal Electric
Power Authority, 8.25%,
1/1/11 2,503,200
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
A A 1,000 Georgia Municipal Electric
Power Authority, 0%,
1/1/12 398,510
A A 3,000 Georgia Municipal Electric
Power Authority, 5.50%,
1/1/20 2,884,290
A3 A+ 4,000 Monroe County Pollution
Control, Ogelthorpe Power,
6.55%, 1/1/06 4,423,840
A3 A+ 2,000 Monroe County Pollution
Control, Ogelthorpe Power,
6.70%, 1/1/09 2,226,340
Baa1 A- 665 Commonwealth of Puerto
Rico, Electrical Power
Authority, 0%, 7/1/17 187,747
Baa1 A- 90 Commonwealth of Puerto
Rico, Electrical Power
Authority, 7.00%, 7/1/07 97,216
-----------
$ 18,707,123
-----------
WATER & SEWER - 0.9%
A A+ $1,000 City of Columbus, 5.70%,
5/1/20 $ 1,018,490
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$111,816,704) $117,865,343
===========
</TABLE>
(1) The above security has been issued as inverse floater bond.
(2) Security has been segregated to cover margin requirements on open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Georgia
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 February 29, 1996, 29.4% 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 0.9% to 16.4% of total investments.
See notes to financial statements
53
<PAGE> 54
- ------------
Kentucky Municipals Portfolio
Portfolio of Investments - February 29, 1996
(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 - 6.0%
Aa1 NR $2,460 City of Berea, Kentucky
Educational Development,
5.45%, 3/1/14 $ 2,483,714
A1 AA- 500 University of Kentucky
Consolidated Educational
Buildings, 6.40%, 5/1/09 539,575
A1 AA- 785 University of Kentucky
Consolidated Educational
Buildings, 6.40%, 5/1/11 841,520
A1 AA- 1,295 University of Louisville
Consolidated Educational
Buildings, 5.875%, 5/1/11 1,355,127
A1 AA- 1,000 University of Louisville
Consolidated Educational
Buildings, 5.40%, 5/1/08 1,029,020
A1 AA- 2,000 University of Louisville
Consolidated Educational
Buildings, 5.40%, 5/1/11 2,027,240
-----------
$ 8,276,196
-----------
ESCROWED - 1.3%
NR NR $ 190 KY DFA St. Claire Medical
Center, 7.125%, 9/1/21 $ 216,496
Aaa NR 510 Lexington-Fayette County,
Kentucky Government Public
Facilities, 6.40%, 4/1/12 570,195
Aaa A 1,000 University of Puerto Rico,
6.50%, 6/1/13 1,060,660
-----------
$ 1,847,351
-----------
GENERAL OBLIGATIONS - 3.6%
NR A+ $1,030 KY League of Cities
Funding Trust Floating
Indebtedness Certificates
of Participation, 6.15%,
8/1/13 $ 1,076,906
NR A 1,415 KY League of Cities
Funding Trust Floating
Indebtedness Certificates
of Participation, 5.90%,
8/1/16 1,436,890
Baa1 A 2,000 Commonwealth of Puerto
Rico, 5.40%, 7/1/25 1,893,060
NR NR 500 Virgin Islands, 7.25%,
10/1/18 529,700
-----------
$ 4,936,556
-----------
HOSPITALS - 0.8%
Baa1 BBB $ 975 Russell County, Kentucky
Franciscan Sisters of the
Poor Health System, 8.10%,
7/1/15 $ 1,120,080
-----------
HOUSING - 1.7%
NR AAA $1,490 Boone County, Kentucky
Multi-Family, Walnut Creek
Apartments, (FHA), 7.00%,
1/1/27 $ 1,554,383
Aaa AAA 795 KY Housing, Single Family
Mortgage Revenue, (FHA),
(AMT), 7.45%, 1/1/23 816,934
-----------
$ 2,371,317
-----------
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
INDUSTRIAL DEVELOPMENT/
POLLUTION CONTROL
REVENUE - 12.6%
Baa1 BBB $2,355 Ashland County, Solid
Waste, Ashland Oil, (AMT),
7.20%, 10/1/20 $ 2,505,673
Baa1 NR 2,425 Ashland County, Solid
Waste, Ashland Oil, (AMT),
7.125%, 2/1/22 2,604,668
NR NR 1,000 City of Elsmere, Kentucky,
Courtaulds Package
Corporation, 6.75%, 4/1/10 1,039,460
NR NR 3,075 Fulton County, Kentucky,
H.I.S.-Chic Jeans, (AMT),
7.50%, 2/1/10 3,270,908
Baa2 BBB- 3,000 Henderson County, Kentucky
Solid Waste Disposal,
MacMilan Bloedel, (AMT),
7.00%, 3/1/25 3,164,670
Aa3 AA 1,000 Jefferson County,
Kentucky, E.I. du Pont de
Nemours, 6.30%, 7/1/12 1,088,710
NR BB 985 Owensboro County,
Kentucky, KMART
Corporation, 6.80%,
12/1/07 817,245
NR BB 915 Powderly, Kentucky, KMART
Corporation, 6.90%, 3/1/07 771,364
A2 NR 1,190 Commonwealth of Puerto
Rico IM&E, American Home
Products, 5.10%, 12/1/18 1,103,808
Baa3 BB+ 500 Commonwealth of Puerto
Rico Port Authority,
American Airlines, (AMT),
6.30%, 6/1/23 504,465
Ba2 NR 500 Winchester County,
Kentucky, Kroger
Corporation, 6.90%, 7/1/99 526,355
-----------
$ 17,397,326
-----------
INSURED EDUCATION - 0.5%
Aaa AAA $ 700 Northern KY University
Educational Buildings
(AMBAC), 6.25%, 5/1/12 $ 745,766
-----------
</TABLE>
54
<PAGE> 55
- ------------
- --------------------------------------------------------------------------------
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 - 1.7%
Aaa AAA $1,000 Jefferson County, Kentucky
School District U.T.G.O.
(MBIA), 4.875%, 1/1/13 $ 932,940
Aaa AAA 1500 Commonwealth of Puero Rico
Building Authority,
(AMBAC), 5.50%, 7/1/21 1,475,700
-----------
$ 2,408,640
-----------
INSURED HOSPITAL - 11.3%
Aaa AAA $2,500 Daviess County, ODCH Inc.,
(MBIA), 6.25%, 8/1/22 $ 2,611,000
Aaa AAA 2,000 Hopkins County, Trover
Clinic Foundation, (MBIA),
6.625%, 11/15/11 (1) 2,177,880
Aaa AAA 2,500 Jefferson County, Jewish
Hospital (AMBAC), 6.50%,
5/1/15 2,663,975
Aaa AAA 1,750 Jefferson County, Jewish
Hospital (AMBAC), 6.55%,
5/1/22 1,870,470
Aaa AAA 4,000 KY EDA St. Luke's Hospital
(MBIA), 7.00%, 10/1/21 4,375,800
Aaa AAA 2,000 KY EDA Baptist Healthcare
(MBIA), 5.00%, 8/15/24 1,814,380
-----------
$ 15,513,505
-----------
INSURED LEASE/CERTIFICATE
OF PARTICIPATION - 1.8%
Aaa AAA $2,000 City of Danville,
Multi-City Lease,
Madisonville Project,
(MBIA), 5.875%, 9/1/10 $ 2,076,920
Aaa AAA 400 Lexington-Fayette County
Government Public
Facilities (FSA), 4.50%,
2/1/10 350,808
-----------
$ 2,427,728
-----------
INSURED TRANSPORTATION -
4.7%
Aaa AAA $1,000 Kenton County,
Cincinnati/Northern
Kentucky Airport, (FSA)
(AMT), 6.30%, 3/1/15 $ 1,039,790
Aaa AAA 1,000 KY EDA Turnpike,
Revitalization Project,
(FGIC), 0%, 1/1/10 472,380
Aaa AAA 1,000 KY EDA Turnpike,
Revitalization Project,
(AMBAC), 5.50%, 7/1/11 1,015,210
Aaa AAA 1,170 Louisville and Jefferson
County, Kyregl Airport
(MBIA), 5.30%, 7/1/23 1,111,676
Aaa AAA 2,000 Louisville and Jefferson
County, Kyregl Airport
(MBIA) (AMT), 5.50%,
7/1/23 1,915,420
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaa AAA 1,000 Louisville and Jefferson
County, Kyregl Airport
(MBIA) (AMT), 5.625%,
7/1/25 967,170
-----------
$ 6,521,646
-----------
INSURED UTILITIES - 4.1%
Aaa AAA $5,780 Boone County, Kentucky
Collateralized PCR,
(MBIA), 5.50%, 1/1/24 (1) $ 5,580,070
-----------
INSURED WATER AND SEWER -
8.7%
Aaa AAA $1,000 Hardin County Water
System, (MBIA), 5.90%,
1/1/25 $ 1,026,670
Aaa AAA 800 Kenton County Water
District (FGIC), 6.375%,
2/1/17 853,096
Aaa AAA 2,000 Kenton County Water
District (FGIC), 6.00%,
2/1/17 2,092,300
Aaa AAA 500 Lexington-Fayette County
Government Sewer (MBIA),
6.375%, 7/1/12 535,970
Aaa AAA 1,000 Louisville and Jefferson
County Sewer District
(MBIA), 5.25%, 5/15/14 965,820
Aaa AAA 2,840 Louisville and Jefferson
County Sewer District
(MBIA), 5.40%, 5/15/19 2,730,859
Aaa AAA 500 Louisville and Jefferson
County Sewer District
(MBIA), 5.50%, 5/15/23 482,865
Aaa AAA 1,000 Louisville and Jefferson
County Sewer District
(AMBAC), 6.75%, 5/15/19 1,099,300
Aaa AAA 2,000 Louisville and Jefferson
County Sewer District
(AMBAC), 6.75%, 5/15/25 2,191,300
-----------
$ 11,978,180
-----------
LEASE REVENUE BONDS -
21.7%
A A $1,300 Boone County School
District, 6.75%, 9/1/11 $ 1,416,051
A NR 3,000 Boone County School
District, 5.70%, 5/1/18 3,061,020
A NR 1,670 Campbell County School
District, 5.10%, 2/1/12 1,597,990
A NR 700 Campbell County School
District, 4.80%, 2/1/11 645,190
A NR 790 Campbell County School
District, 4.875%, 2/1/14 718,236
A NR 820 Covington County
Independent School
District, 5.20%, 6/1/13 790,095
A1 A+ 905 Jefferson County School
District, 4.875%, 1/1/11 855,116
A1 A+ 1,250 Jefferson County School
District, 4.875%, 1/1/12 1,174,338
</TABLE>
55
<PAGE> 56
- ------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
LEASE REVENUE BONDS -
(CONTINUED)
A1 A 4,990 Jefferson County Capital
Projects Corporation
Lease, 0%, 8/15/15 1,635,423
A NR 2,500 Jessamine County School
District, 5.375%, 1/1/17 2,407,350
A NR 260 Johnson County School
District, 5.00%, 6/1/11 249,790
A NR 300 Johnson County School
District, 5.00%, 6/1/13 283,404
A A+ 3,825 KY State Property and
Buildings, 5.00%, 9/1/13 3,583,260
A A+ 2,500 KY State Property and
Buildings, 6.00%, 9/1/14 2,574,475
A A- 1,000 City of Louisville, Public
Properties Corporation,
6.80%, 12/1/22 1,080,840
Aa NR 4,500 City of Mount Sterling,
League of Cities Trust
Lease Program, 6.20%,
3/1/18 4,567,995
A NR 2,000 Owensboro County, Airport
Lease, 5.875%, 6/1/15 1,978,220
A NR 615 Pulaski County, School
District, 5.75%, 2/1/10 636,119
A NR 595 Pulaski County, School
District, 5.80%, 2/1/11 612,903
-----------
$ 29,867,815
-----------
SPECIAL TAX REVENUE - 6.1%
Baa1 A $2,370 Puerto Rico Highway and
Transportation Authority,
5.25%, 7/1/21 $ 2,189,026
Baa1 A 5,655 Puerto Rico Highway and
Transportation Authority,
6.625%, 7/1/18 6,170,793
-----------
$ 8,359,819
-----------
TRANSPORTATION - 4.5%
NR BBB $2,000 Guam Airport Authority
(AMT), 6.70%, 10/1/23 $ 2,020,940
Ba1 BB 1,000 Kenton County Airport,
Delta Airlines, (AMT),
6.75%, 2/1/02 1,060,680
Ba1 BB 250 Kenton County Airport,
Delta Airlines, (AMT),
7.50%, 2/1/12 269,720
Ba1 BB 500 Kenton County Airport,
Delta Airlines, (AMT),
7.50%, 2/1/20 538,150
Ba1 BB 2,400 Kenton County Airport,
Delta Airlines, (AMT),
6.125%, 2/1/22 2,308,056
-----------
$ 6,197,546
-----------
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
UTILITIES - 6.5%
Aa2 AA- $2,000 Carroll County, Kentucky
PCR, KY Utilities Company,
6.25%, 2/1/18 $ 2,104,140
Aa2 AA- 1,150 Carroll County, Kentucky
PCR, KY Utilities Company,
5.75%, 5/1/18 1,121,871
NR BBB 400 Guam Power Authority,
5.25%, 10/1/23 348,176
Aa2 AA 1,000 Jefferson County, Kentucky
PCR, Louisville G& E
Company, 5.625%, 8/15/19 991,600
Aa2 AA- 1,000 Muhlenburg County,
Kentucky PCR, KY Utilities
Company, 6.25%, 2/1/18 1,052,730
Baa1 A- 3,500 Puerto Rico Electric Power
Authority, 0%, 7/1/17 988,155
Baa1 A- 2,250 Puerto Rico Electric Power
Authority, 6.375%, 7/1/24 2,342,093
-----------
$ 8,948,765
-----------
WATER AND SEWER REVENUE -
2.4%
A A- $1,000 Boone County Sewer
Systems. 5.15%, 12/1/15 $ 958,080
NR A 1,500 Cambell County Water
District, 6.60%, 12/1/11 1,615,140
A NR 650 Harden County Water
District, 6.50%, 9/1/12 696,577
-----------
$ 3,269,797
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$132,011,225) $137,768,103
===========
</TABLE>
(1) Security has been segregated to cover margin requirements on open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Kentucky
municipals. 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 February 29, 1996, 32.8% 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 1.0% to 21.3% of total investments.
See notes to financial statements
56
<PAGE> 57
- ------------
Louisiana Municipals Portfolio
Portfolio of Investments - February 29, 1996
(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>
ASSISTED LIVING - 1.5%
NR NR $ 500 Louisiana Housing Finance
Agency, HCC Assisted
Living Group, 9.00% 3/1/25 $ 523,800
-----------
EDUCATION - 0.8%
Aaa NR $ 150 Louisiana PFA, Guaranteed
Student Loan Revenue
Bonds, (AMT), 6.75%,
9/1/06 $ 159,755
A NR 100 Louisiana PFA, Student
Loan Revenue Bonds, (AMT),
7.00%, 9/1/06 106,370
-----------
$ 266,125
-----------
GENERAL OBLIGATION - 0.5%
Baa1 A $ 200 Puerto Rico, 5.40%, 7/1/25 $ 189,306
-----------
HEALTH CARE - 8.0%
NR AAA $2,000 Louisiana HFA, Mortgage
Revenue Bonds, St. Joseph
Manor Retirement Center,
(GNMA), 7.80%, 12/1/35 $ 2,247,420
NR AAA 500 Louisiana HFA, St. Dominic
Assisted Care Facility,
(GNMA), 6.85%, 9/1/25 528,850
-----------
$ 2,776,270
-----------
HOUSING - 31.9%
Aaa NR $ 885 East Baton Rouge Mortgage
Finance Authority, Single
Family, (GNMA/FNMA),
7.00%, 4/1/32 $ 927,091
Aaa NR 235 East Baton Rouge Mortgage
Finance Authority Single
Family, (AMT),
(GNMA/FNMA), 7.10%,
10/1/24 250,096
Aaa AAA 95 East Baton Rouge Mortgage
Finance Authority Single
Family, (AMT), (GNMA),
7.875%, 12/1/21 101,619
Aaa NR 600 East Baton Rouge Mortgage
Finance Authority Single
Family, (GNMA/FNMA),
6.10%, 10/1/15 609,924
NR AAA 1,850 Parish of Jefferson, Home
Mortgage Authority, (AMT),
(GNMA/FNMA), 7.35%,
12/1/16 2,107,927
NR AAA 620 Louisiana HFA, Multi
Family, (FHA), 6.95%,
7/1/16 642,295
Aaa NR 1,240 Louisiana HFA, Single
Family, (GNMA), 8.00%,
3/1/25 1,379,190
Aaa NR 1,535 Louisiana HFA, Single
Family, (AMT),
(GNMA/FNMA), 6.55%,
12/1/26 1,564,134
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
NR AAA 150 Louisiana HFA,
(Multifamily
Housing-Westview Apartment
II), (AMT), (FHA), 7.95%,
1/1/32 159,525
NR A 1,000 Louisiana Public
Facilities Authority,
(Multifamily
Housing-Windsor Housing,
6.25%, 1/1/26 986,580
Aaa NR 1,300 New Orleans Home Mortgage
Authority, (AMT),
(GNMA/FNMA), 6.30%, 6/1/28 1,310,244
A NR 350 Shreveport, Louisiana HFA,
(Multifamily-U.S. Foodman
Plaza-Section 8 Assisted),
6.10%, 8/1/19 341,884
NR AAA 750 Shreveport, Louisiana Home
Mortgage Authority, (AMT),
(GNMA/FNMA), 6.00%, 8/1/28 733,192
-----------
$ 11,113,701
-----------
HOSPITALS - 6.0%
Baa1 NR $1,000 Lafourche Parish Hospital
Service District No. 3,
6.00%, 10/1/23 $ 938,630
Aa AA 1,000 Louisiana Public Health
Facilities Bonds, (Sisters
of Mercy Health System),
5.00%, 6/1/19 (2) 900,860
NR A- 250 St. Tammany Parish
Hospital Service District
No. 1, 6.50%, 7/1/22 254,465
-----------
$ 2,093,955
-----------
INDUSTRIAL DEVELOPMENT
REVENUE - 16.1%
A3 A- $1,750 City of Bastrop,
International Paper
Company, 6.60%, 3/1/19 $ 1,815,048
Baa3 NR 1,000 Beauregard Parish, Boise
Cascade Corporation
Project, 6.125%, 3/1/23 978,680
Baa3 NR 2,000 Beauregard Parish, Boise
Cascade Corporation
Project, (AMT), 6.30%,
8/1/23 1,946,460
NR A 750 Natchitoches Parish,
Willamette Industries
Project, (AMT), 5.875%,
12/1/23 719,737
</TABLE>
57
<PAGE> 58
- ------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
INDUSTRIAL DEVELOPMENT
REVENUE - (CONTINUED)
Baa1 BBB+ 150 South Louisiana Port
Commission, GATX Terminals
Corporation, 7.00%, 3/1/23 159,020
-----------
$ 5,618,945
-----------
INSURED EDUCATION - 3.2%
Aaa AAA $1,100 Louisiana State University
and Agricultural and
Mechanical College (FGIC),
5.75%, 7/1/14 $ 1,112,694
-----------
INSURED GENERAL
OBLIGATIONS - 5.9%
Aaa AAA $ 500 Parish of East Baton
Rouge, Public Improvement
Sales Tax Bonds (FGIC),
5.90%, 2/1/17 $ 512,450
Aaa AAA 1,000 Orleans Parish School
District, (FGIC), 5.30%,
9/1/13 974,700
Aaa AAA 300 State of Louisiana,
(MBIA), 5.625%, 8/1/11 314,031
Aaa AAA 250 Commonwealth of Puerto
Rico, Public Improvement
Bonds Residual Interest
Bonds (AMBAC), Variable,
7/1/15 (1) 262,248
-----------
$ 2,063,429
-----------
INSURED HOSPITAL - 0.3%
Aaa AAA $ 100 Louisiana PFA Hospital
Revenue Bonds, (Our Lady
of the Lake Regional
Medical Center), Residual
Interest Bonds (MBIA),
Variable, 12/1/24 (1) $ 112,165
-----------
INSURED HOUSING - 1.5%
Aaa AAA $ 500 Louisiana Housing Finance
Agency, (AMT), (MBIA),
6.45%, 6/1/27 $ 511,155
-----------
INSURED SPECIAL
TAX - 12.4%
Aaa AAA $ 400 Lafayette Parish, Sales
Tax Revenue Bonds, (FGIC),
5.00%, 4/1/13 $ 375,908
Aaa AAA 645 Lafayette Parish, Sales
Tax Revenue Bonds, (FGIC),
5.00%, 4/1/14 601,334
Aaa AAA 500 New Orleans Exhibit Hall,
(MBIA), 5.50%, 7/15/18 484,340
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaa AAA 1,000 New Orleans Exhibit Hall,
(MBIA), 5.60%, 7/15/25 971,870
Aaa AAA 500 Louisiana Stadium and
Exposition District, Hotel
Occupancy Tax and Stadium
Revenue, (FGIC), 5.25%,
7/1/15 476,620
Aaa AAA 500 Louisiana Stadium and
Exposition District, Hotel
Occupancy Tax and Stadium
Revenue, (FGIC), 5.25%,
7/1/20 473,685
Aaa AAA 1,000 Louisiana Stadium and
Exposition District, Hotel
Occupancy Tax and Stadium
Revenue, (FGIC), 5.25%,
7/1/21 946,380
-----------
$ 4,330,137
-----------
INSURED UTILITIES - 0.5%
Aaa AAA $ 150 City of Alexandria,
Utilities Bonds (FGIC),
6.00%, 5/1/06 $ 160,560
-----------
LEASE/CERTIFICATE OF
PARTICIPATION - 1.0%
NR BBB $ 400 Puerto Rico Industrial,
Tourist, Environmental,
Medical and Educational
Authority, Guaynabo Lease,
5.625%, 7/1/22 $ 379,224
-----------
LIFE CARE - 4.1%
NR BBB $1,150 Louisiana PFA, Glen
Retirement System, 6.70%,
12/1/25 $ 1,116,696
NR NR 300 St. Tammany PFA,
Christwood Project, 9.00%,
11/15/25 298,389
-----------
$ 1,415,085
-----------
SPECIAL TAX - 3.8%
Baa1 A $1,500 Puerto Rico Highway and
Transportation Authority,
Highway Revenue Refunding
Bonds, 5.00%, 7/1/22 $ 1,337,054
-----------
TRANSPORTATION - 1.6%
A A- $ 500 Mississippi River Bridge
Authority, Bridge Revenue
Bonds, Series 1992, 6.75%,
11/1/12 (2) $ 545,430
-----------
</TABLE>
58
<PAGE> 59
- ------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
UTILITIES - 0.9%
Aa3 NR $ 150 De Soto Parish,
Southwestern Electric
Power Company, 7.60%,
1/1/19 $ 173,868
Ba1 BB+ 150 Parish of Pointe Coupe,
Gulf States Utilities Co.,
6.70%, 3/1/13 153,586
-----------
$ 327,454
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$34,129,415) $ 34,876,489
===========
</TABLE>
(1) The above designated securities have been issued as inverse floater bonds.
(2) Security has been segregated to cover margin requirements for open financial
futures contracts.
The Portfolio primarily invests in debt securities issued by Louisiana
municipalities. The ability 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 February
29, 1996, 23.8% 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 0.7% to 16.1% of total investments.
See notes to financial statements
59
<PAGE> 60
- ------------
Maryland Municipals Portfolio
Portfolio of Investments - February 29, 1996
(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>
COGENERATION - 1.1%
NR NR $1,250 Maryland Energy
Cogeneration (AES Warrior
Run Project) (AMT), 7.40%,
9/1/19 $ 1,311,150
-----------
EDUCATION - 0.9%
Aa AA+ $1,000 University of Maryland
Auxiliary Facilities &
Tuition, 6.30%, 2/1/10 $ 1,076,580
-----------
ELECTRIC UTILITIES - 7.3%
A2 A $2,000 Calvert, Maryland PCR
(Baltimore Gas & Electric
Company), 5.55%, 7/15/14 $ 2,010,800
NR BBB 2,500 Guam Power Authority,
5.25%, 10/1/13 2,250,275
NR BBB 500 Guam Power Authority,
5.25%, 10/1/23 435,220
NR BBB 750 Guam Power Authority,
6.625%, 10/1/14 772,058
A1 A 500 Montgomery, Maryland PCR
(Potomac Electric Power
Company), 5.375%, 2/15/24 477,400
A1 A 2,225 Prince Georges, Maryland
PCR (Potomac Electric),
6.375%, 1/15/23 2,374,386
-----------
$ 8,320,139
-----------
ESCROWED - 5.5%
Aaa NR $1,125 Baltimore, Maryland Single
Family Mortgage (Inner
Harbor), 8.00%, 12/1/10 $ 1,399,215
Aaa AAA 500 Maryland Health & Higher
Educational (University of
Maryland) (FGIC), 6.50%,
7/1/21 551,790
NR AAA 1,000 Commonwealth of Puerto
Rico Public Improvement,
6.80%, 7/1/21 1,151,490
Baa1 AAA 100 Puerto Rico Aqueduct &
Sewer, 7.875%, 7/1/17 111,158
Aaa AAA 1,500 Puerto Rico Public
Buildings Authority,
6.875%, 7/1/21 1,733,415
NR AAA 1,000 University of Maryland
System Auxiliary Facility
and Tuition, 6.50%, 4/1/11 1,102,110
NR AAA 175 University of Maryland
System Auxiliary Facility
and Tuition, 6.50%, 4/1/2 198,398
-----------
$ 6,247,576
-----------
GENERAL OBLIGATIONS - 8.9%
Aa AA+ $1,000 Anne Arundel, Maryland,
5.30%, 4/15/16 $ 973,410
Aa AA- 1,000 Hartford, Maryland, 4.90%,
12/1/10 972,300
A AA- 230 Prince Georges, Maryland,
5.00%, 1/15/11 223,871
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Baa1 A 3,625 Puerto Rico, 5.40%, 7/1/25 3,431,171
Baa1 A 2,000 Puerto Rico, 6.50%, 7/1/23 2,148,240
NR NR 750 Virgin Islands Public
Finance Authority, 7.25%,
10/1/18 794,550
Aa1 AA 500 Washington, Maryland
Suburban Sanitary
District, 6.20%, 6/1/11 532,420
Aaa1 AA 600 Washington, Maryland
Suburban Sanitary
District, 5.00%, 6/1/10 590,946
Aa NR 500 Worcester, Maryland
Sanitary District, 6.55%,
8/15/17 552,715
-----------
$ 10,219,623
-----------
HOSPITALS - 23.0%
NR NR $ 490 Berlin, Maryland (Atlantic
General Hospital), 8.375%,
6/1/22 $ 522,095
A A 4,000 MD Health & Higher
Educational (Good
Samaritan Hospital),
5.75%, 7/1/19 3,939,040
A A 1,500 MD Health & Higher
Educational (Memorial
Hospital of Cumberland),
6.50%, 7/1/17 1,572,405
A1 A 4,050 MD Health & Higher
Educational (Suburban
Hospital), 5.125%, 7/1/21 3,699,108
Baa1 NR 2,500 MD Health & Higher
Educational (Union
Hospital of Cecil), 6.70%,
7/1/22 2,550,725
A A 1,200 MD Health & Higher
Educational (Peninsula
Regional Medical Center),
5.00%, 7/1/23 1,055,688
Baa1 BBB 1,250 MD Health & Higher
Educational (Howard County
General Hospital), 5.50%,
7/1/25 1,106,300
Baa NR 1,355 Prince Georges, Maryland
(Greater SouthEast
Healthcare System),
6.375%, 1/1/13 1,305,515
Baa NR 4,500 Prince Georges, Maryland
(Greater SouthEast
Healthcare System),
6.375%, 1/1/23 4,243,860
A NR 7,000 Prince Georges, Maryland
(Dimensions Health),
5.30%, 7/1/24 6,326,950
-----------
$ 26,321,686
-----------
HOUSING - 7.3%
Aa NR $3,000 Maryland CDA Single Family
(AMT), 6.75%, 4/1/26 $ 3,112,950
Aa NR 250 Maryland CDA Single
Family. 6.85%, 4/1/11 263,703
Aa NR 985 Maryland CDA Single Family
(AMT), 6.80%, 4/1/22 996,546
</TABLE>
60
<PAGE> 61
- ------------
- --------------------------------------------------------------------------------
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)
Aa NR 750 Maryland CDA Single Family
(AMT), 6.80%, 4/1/24 774,518
Aa NR 1,810 Maryland CDA Multi Family
(FHA), 6.70%, 5/15/27 1,870,762
Aa NR 1,000 Maryland CDA Multi Family
(FHA) (AMT), 6.70%,
5/15/36 1,030,040
NR AAA 300 Prince Georges, Maryland
(Antoinette Gardens
Apartments) (FHA), 7.00%,
3/1/28 317,258
-----------
$ 8,365,777
-----------
INDUSTRIAL DEVELOPMENT/
POLLUTION CONTROL
REVENUE - 11.8%
A1 A $1,350 Allegany County, Maryland
(Westvaco Corporation
Project), 6.20%, 1/1/08 $ 1,464,440
A2 A 750 Anne Arundel, Maryland
(Beth Steel), 6.00%,
4/1/24 772,230
NR NR 1,350 Baltimore, Maryland
(Bethlehem Steel
Corporation Project),
7.50%, 6/1/15 1,419,687
Aa2 AA- 2,000 Baltimore, Maryland
(Consolidated Coal Sales
Company-E.I. Dupont),
6.50%, 12/1/10 2,181,480
Aa3 AA 2,000 Baltimore, Maryland
(Consolidated Coal Sales
Company-E.I. Dupont),
6.50%, 12/1/11 2,181,020
NR AA- 1,425 Frederick, Maryland EDA
(Cargill, Inc. Project),
6.30%, 11/1/09 (2) 1,547,379
A2 NR 2,600 Puerto Rico IM&E (American
Home), 5.10%, 12/1/18 2,411,682
Baa3 BB+ 1,500 Puerto Rico Port Authority
(American Airlines) (AMT),
6.30%, 6/1/23 1,513,395
-----------
$ 13,491,313
-----------
INSURED EDUCATION - 1.2%
Aaa AAA $1,200 Morgan State University,
Maryland Academic and
Facilities (MBIA), 6.10%,
7/1/20 $ 1,321,524
-----------
INSURED ELECTRIC
UTILITIES - 0.3%
Aaa AAA $ 250 Puerto Rico Electric Power
Authority (STRIPES) (FSA),
Variable, 7/1/03 (1) $ 289,423
-----------
INSURED HOSPITALS - 12.5%
Aaa AAA $1,365 MD Health & Higher
Educational (Washington
Community Hospital)
(AMBAC), 6.375%, 7/1/22 $ 1,472,385
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaa AAA 3,500 MD Health & Higher
Educational (Anne Arundel
Hospital) (AMBAC), 5.00%,
7/1/23 3,212,195
Aaa AAA 3,350 MD Health & Higher
Educational (Francis Scott
Key Hospital) (FGIC),
5.00%, 7/1/23 3,074,530
Aaa AAA 4,000 MD Health & Higher
Educational (Greater
Baltimore Medical Center)
(FGIC), 5.00%, 7/1/19 3,694,200
Aaa AAA 500 MD Health & Higher
Educational (General
Hospital) (MBIA), 6.20%,
7/1/24 525,230
Aaa AAA 2,150 Puerto Rico IM&E Hospital
(MBIA), 6.25%, 7/1/24 2,260,273
-----------
$ 14,238,813
-----------
INSURED HOUSING - 0.7%
Aaa AAA $ 235 MD CDA Housing and
Community Development
(AMBAC), 6.625%, 6/1/12 $ 257,485
Aaa AAA 500 Prince Georges, Maryland
(Keystone Apartments)
(FHA) (MBIA), 6.80%,
7/1/25 518,315
-----------
$ 775,800
-----------
INSURED TRANSPORTATION -
5.9%
Aaa AAA $2,000 Baltimore, Maryland
International Airport
(AMT) (FGIC), 6.25%,
7/1/14 $ 2,123,220
Aaa AAA 4,750 Washington, D.C. Metro
Area Transportation
(FGIC), 5.25%, 7/1/14 4,640,370
-----------
$ 6,763,590
-----------
INSURED WATER & SEWER -
3.9%
Aaa AAA $2,000 Baltimore, Maryland
Wastewater (MBIA), 5.65%,
7/1/20 $ 2,039,520
Aaa AAA 2,550 Baltimore, Maryland
Wastewater (FGIC), 5.00%,
7/1/22 2,366,859
-----------
$ 4,406,379
-----------
LEASE/CERTIFICATE OF
PARTICIPATION - 1.0%
NR BBB $1,250 PR IM&E Guaynabo Lease,
5.625%, 7/1/22 $ 1,185,075
-----------
</TABLE>
61
<PAGE> 62
- ------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
MISCELLANEOUS - 0.8%
A NR $1,000 Baltimore, Maryland
Revenue Authority, 5.375%,
7/1/18 $ 968,970
-----------
SOLID WASTE - 5.4%
A NR $6,000 North East Maryland Solid
Waste Disposal (AMT),
6.30%, 7/1/16 $ 6,217,440
-----------
SPECIAL TAX REVENUE - 0.4%
Baa1 A $ 500 Puerto Rico Highway and
Transportation Authority,
5.25%, 7/1/21 $ 461,821
-----------
TRANSPORTATION - 0.6%
NR BBB $ 700 Guam Airport Authority
(AMT), 6.70%, 10/1/23 $ 707,306
-----------
WATER & SEWER - 1.5%
Aa AA $1,000 Maryland Water Quality
Financing Administration
Revolving Loan Fund, 0%,
9/1/07 $ 561,310
Aa AA 1,000 Maryland Water Quality
Financing Administration
Revolving Loan Fund,
6.55%, 9/1/14 1,095,730
-----------
$ 1,657,040
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$109,820,786) $114,347,025
===========
</TABLE>
(1) The above security has been issued as an inverse floater bond.
(2) Security has been segregated to cover margin requirements on open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Maryland
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 February 29, 1996, 24.3% 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 0.3% to 14.3% of total investments.
See notes to financial statements
62
<PAGE> 63
- ------------
Missouri Municipals Portfolio
Portfolio of Investments - February 29, 1996
(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 - 2.8%
A NR $2,750 Missouri Higher Education
Loan Authority, Student
Loan, (AMT), 5.45%,
2/15/09 $ 2,572,790
-----------
ESCROWED - 4.8%
Aaa AAA $ 240 Missouri Health &
Education Authority, St.
Louis Children's, (MBIA)
6.25%, 5/15/12 $ 268,075
Aaa AAA 350 State of Missouri,
Regional Convention &
Sports Complex Authority,
6.80%, 8/15/11 401,625
Aaa AAA 425 Missouri Health &
Education Authority,
Christian Health, (FGIC)
6.875%, 2/15/21 481,168
Aaa AAA 250 St. Louis County, Regional
Convention & Sports
Complex Authority, 7.00%,
8/15/11 290,013
Aaa AAA 600 St. Louis County,
Pattonville School
District, (FGIC) 6.25%,
2/1/10 658,776
Aaa AAA 2,000 City of Sikeston, Electric
System, (MBIA) 6.25%,
6/1/22 (2) 2,241,940
-----------
$ 4,341,597
-----------
GENERAL OBLIGATIONS - 4.4%
Baa1 A $1,750 Commonwealth of Puerto
Rico, 5.40%, 7/1/25 $ 1,656,428
Baa1 A 700 Commonwealth of Puerto
Rico, 5.00%, 7/1/21 630,364
Baa1 A 1,250 Commonwealth of Puerto
Rico, Public Building
Authority, 5.75%, 7/1/15 1,242,675
NR NR 450 Virgin Islands Public
Finance Authority, 7.25%,
10/1/18 476,730
-----------
$ 4,006,197
-----------
HEALTH CARE - 0.4%
Baa1 NR $ 300 Cass County, Fox Springs
Living Center, 7.375%,
10/1/22 $ 323,124
-----------
HOSPITALS - 8.4%
Baa NR $2,000 Missouri Health &
Education Authority,
Jefferson Memorial, 6.00%,
8/15/23 $ 1,802,140
Aa AA 1,000 Missouri Health &
Education Authority,
Barnes Jewish Christian,
5.10%, 5/15/09 972,780
Aa AA 2,000 Missouri Health &
Education Authority,
Barnes Jewish Christian,
5.25%, 5/15/14 1,918,380
Baa NR 1,900 Missouri Health &
Education Authority,
Jefferson Memorial, 6.80%,
5/15/25 1,905,643
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Aa AA 1,000 Missouri Health &
Education Authority,
Sisters of Mercy, 6.25%,
6/1/15 1,055,140
-----------
$ 7,654,083
-----------
HOUSING - 1.8%
NR AAA $1,000 Missouri Housing
Development Authority
SFMR, (AMT), (GNMA) 7.25%,
9/1/26 $ 1,086,180
NR AAA 535 Missouri Housing
Development Authority
SFMR, (AMT), (GNMA) 6.75%,
6/1/24 558,599
-----------
$ 1,644,779
-----------
INDUSTRIAL DEVELOPMENT
REVENUE - 4.8%
NR BB $1,065 Jefferson County, Kmart
Corporation, 6.40%, 8/1/08 $ 846,941
NR NR 1,300 Kansas City, AFCO CARGO
MCI, (AMT), 8.50%, 1/1/17 1,309,191
A3 NR 1,200 Missouri Environmental
Improvement & Energy
Resources Authority,
American Cyanamid Company,
5.80%, 9/1/09 1,254,924
A2 NR 1,000 Commonwealth of Puerto
Rico, American Home
Products, 5.10%, 12/1/18 927,570
-----------
$ 4,338,626
-----------
INSURED TRANSPORTATION
- 1.7%
Aaa AAA $1,000 City of St. Louis, St.
Louis-Lambert
International Airport,
(AMT), (FGIC) 6.125%,
7/1/12 $ 1,046,630
Aaa AAA 500 City of St. Louis, St.
Louis-Lambert
International Airport,
(AMT), (FGIC) 6.125%,
7/1/15 521,610
-----------
$ 1,568,240
-----------
INSURED EDUCATION - 1.1%
Aaa AAA $1,000 Southeast Missouri State
University Housing System,
(MBIA) 5.70%, 4/1/14 $ 1,024,850
-----------
INSURED GENERAL
OBLIGATIONS - 5.8%
Aaa AAA $1,250 Kansas City School
District, (FGIC) 5.00%,
2/1/14 $ 1,187,500
Aaa AAA 1,450 St. Louis County,
Mehlville School District,
(MBIA) 6.00%, 2/15/13 1,513,104
Aaa AAA 1,500 City of St. Louis School
District, (FGIC) 5.75%,
4/1/12 1,532,475
</TABLE>
63
<PAGE> 64
- ------------
- --------------------------------------------------------------------------------
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 -
(CONTINUED)
Aaa AAA 500 Commonwealth of Puerto
Rico, (AMBAC), Variable
7/1/15 (1) 524,495
Aaa AAA 500 Commonwealth of Puerto
Rico, (FSA), Variable
7/1/22 (1) 537,945
-----------
$ 5,295,519
-----------
INSURED HOSPITALS - 16.7%
Aaa AAA $1,000 Jackson County, Carondelet
Health System, St. Mary's,
(MBIA) 5.75%, 7/1/24 $ 1,013,110
Aaa AAA 800 Jackson County, St.
Joseph's Health System,
(MBIA) 6.50%, 7/1/19 853,864
Aaa AAA 1,000 Jackson County, St.
Joseph's Health System,
(MBIA) 6.50%, 7/1/12 1,073,550
Aaa AAA 1,500 Missouri Health &
Education Authority,
Health Midwest, (MBIA)
6.25%, 2/15/22 1,609,680
Aaa AAA 500 Missouri Health &
Education Authority,
Sisters of St. Mary,
(MBIA) 6.25%, 6/1/07 543,255
Aaa AAA 1,000 Missouri Health &
Education Authority,
Sisters of St. Mary,
(MBIA) 6.25%, 6/1/16 1,075,300
Aaa AAA 1,500 Missouri Health &
Education Authority,
Heartland Health System,
(AMBAC) 6.35%, 11/15/17 1,626,480
Aaa AAA 2,900 Missouri Health &
Education Authority,
Lester Cox Medical Center,
(MBIA) 5.35%, 6/1/10 2,940,194
Aaa AAA 2,000 Missouri Health &
Education Authority, St.
Luke's Health System,
(MBIA) 5.125%, 11/15/19 1,871,040
Aaa AAA 575 Missouri Health &
Education Authority, St.
Louis Children's, (MBIA)
0%, 5/15/08 309,293
Aaa AAA 9,500 Missouri Health &
Education Authority,
Lester Cox Medical Center,
(MBIA) 0%, 9/1/20 2,331,110
-----------
$ 15,246,876
-----------
INSURED HOUSING - 1.8%
Aaa AAA $1,500 City of Springfield, SCA
Realty Multifamily
Mortgage Receipts, (FSA)
7.10%, 1/1/30 $ 1,638,030
-----------
INSURED LEASE/CERTIFICATE
OF PARTICIPATION - 5.9%
Aaa AAA $1,500 Kansas City Municipal
Assistance Corp., Bartle
Hall Convention, (AMBAC),
5.60%, 4/15/16 $ 1,499,895
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaa AAA 1,750 Kansas City Municipal
Assistance Corp., Bartle
Hall Convention, (AMBAC),
5.00%, 4/15/20 1,620,605
Aaa AAA 600 Kansas City School
District, Building
Corporation, (FGIC) 6.50%,
2/1/08 646,200
Aaa AAA 500 St. Charles County, Public
Facilities Authority,
(FGIC) 6.375%, 3/15/07 540,640
Aaa AAA 1,000 St. Louis County Municipal
Finance Corp., Civil
Courts Building, (FGIC)
5.75%, 8/1/13 1,025,920
-----------
$ 5,333,260
-----------
INSURED UTILITIES - 7.1%
Aaa AAA $5,000 Missouri Environmental
Improvement & Energy
Resources Authority, Union
Electric Project, (AMT),
(AMBAC), 5.45%, 10/1/28 $ 4,751,850
Aaa AAA 700 Commonwealth of Puerto
Rico, Electric Power
Authority, (FSA), Variable
7/1/03 (1) 810,383
Aaa AAA 1,000 City of Sikeston, Electric
System, (MBIA) 5.00%,
6/1/22 918,080
-----------
$ 6,480,313
-----------
INSURED WATER & SEWER -
1.7%
Aaa AAA $1,500 City of St. Louis, (FGIC)
6.00%, 7/1/14 $ 1,573,995
-----------
LEASE/CERTIFICATE OF
PARTICIPATION - 9.3%
A1 A+ $2,000 State of Missouri,
Regional Convention &
Sports Complex Authority,
5.50%, 8/15/21 $ 1,900,240
A BBB+ 3,000 St. Louis County, Regional
Convention & Sports
Complex Authority, 5.50%,
8/15/13 2,892,360
A BBB+ 1,000 St. Louis County, Regional
Convention & Sports
Complex Authority, 5.75%,
8/15/21 973,900
NR NR 1,500 City of St. Louis,
Regional Convention &
Sports Complex Authority,
7.90%, 8/15/21 1,680,480
Aa AA 1,000 Southeast Missouri
Correctional Facility,
5.75%, 10/15/16 1,019,170
-----------
$ 8,466,150
-----------
</TABLE>
64
<PAGE> 65
- ------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
LIFE CARE - 1.1%
NR NR $ 950 Kansas City, Retirement
Facilities, Kingswood
United Methodist, 9.00%,
11/15/13 $ 1,032,384
-----------
NURSING HOMES - 2.9%
NR NR $1,000 Kansas City, Encore
Nursing Center, Beverly
Enterprises, 8.00%,
12/1/02 $ 1,049,000
NR NR 500 Missouri Health &
Education Authority,
Bethesda Health Group,
6.625%, 8/15/05 506,440
NR NR 1,000 Missouri Health &
Education Authority,
Bethesda Health Group,
7.50%, 8/15/12 1,041,050
-----------
$ 2,596,490
-----------
SOLID WASTE - 4.1%
A1 AA- $3,750 City of St. Louis,
Anheuser-Busch Company,
(AMT), 5.875%, 11/1/26 $ 3,751,200
-----------
SPECIAL TAX REVENUE - 2.2%
Baa1 A $1,000 Commonwealth of Puerto
Rico, Highway &
Transportation Authority,
6.625%, 7/1/12 $ 1,091,210
Baa1 A 1,000 Commonwealth of Puerto
Rico, Highway &
Transportation Authority,
5.50%, 7/1/17 956,400
-----------
$ 2,047,610
-----------
TRANSPORTATION - 1.1%
NR NR $1,000 Lake of the Ozarks
Community Board, Missouri
Bridge System, 6.40%,
12/1/25 $ 984,190
-----------
UTILITIES - 3.9%
NR BBB $1,010 Guam Power Authority,
6.30%, 10/1/22 $ 1,013,909
Baa1 A- 1,000 Commonwealth of Puerto
Rico, Electric Power
Authority, 5.00%, 7/1/12 920,190
Baa1 A- 1,500 Commonwealth of Puerto
Rico, Electric Power
Authority, 6.375%, 7/1/24 1,561,395
-----------
$ 3,495,494
-----------
WATER & SEWER - 6.2%
A1 AA- $ 760 City of Columbia, Sewerage
System, 6.25%, 10/1/15 $ 809,058
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Aa NR 800 Missouri Environmental
Improvement & Energy
Resources Authority,
6.875%, 6/1/14 883,464
Aa NR 475 Missouri Environmental
Improvement & Energy
Resources Authority,
6.45%, 7/1/08 524,847
Aa NR 500 Missouri Environmental
Improvement & Energy
Resources Authority,
6.55%, 7/1/14 539,780
Aa NR 1,000 Missouri Environmental
Improvement & Energy
Resources Authority,
6.05%, 7/1/15 1,050,830
Aa NR 1,250 Missouri Environmental
Improvement & Energy
Resources Authority,
7.20%, 7/1/16 1,456,461
Aa NR 1,000 Missouri Environmental
Improvement & Energy
Resources Authority, 0%,
1/1/14 367,260
-----------
$ 5,631,700
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$86,186,683) $ 91,047,497
===========
</TABLE>
(1) The above designated securities have been issued as inverse floater bonds.
(2) Security has been segregated to cover margin requirements on open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Missouri
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 February 29, 1996, 41.8% 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 3.3% to 24.9% of total investments.
See notes to financial statements
65
<PAGE> 66
- ------------
North Carolina Municipals Portfolio
Portfolio of Investments - February 29, 1996
(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 - 1.2%
Aa1 AA+ $1,000 North Carolina Educational
Facilities Finance Agency,
Duke University, 6.75%,
10/1/21 $ 1,109,140
NR AAA 1,000 North Carolina Educational
Facilities Finance Agency,
Elon College, CLEE,
6.375%, 1/1/07 1,076,250
-----------
$ 2,185,390
-----------
ESCROWED - 3.8%
Aaa A $ 655 North Carolina Municipal
Power, Catawba Electric,
Escrowed to Maturity,
5.00%, 1/1/20 $ 632,834
Aaa AA- 2,450 Pitt County Memorial
Hospital, Prerefunded to
12/1/01, 6.90%, 12/1/21 2,795,597
NR AAA 150 Puerto Rico General
Obligation, Prerefunded to
7/1/02, 7.30%, 7/1/20 171,662
Aaa AAA 1,500 Puerto Rico Public
Building Authority,
Prerefunded to 7/1/02,
6.875%, 7/1/12 1,733,415
Aaa A- 1,000 Puerto Rico Electric Power
Authority, Prerefunded to
7/1/01, 7.00%, 7/1/21 1,150,840
Baa1 AAA 635 Puerto Rico Electric Power
Authority, Prerefunded to
7/1/99, 7.125%, 7/1/14 707,612
-----------
$ 7,191,960
-----------
GENERAL OBLIGATIONS - 6.5%
A A- $ 175 Eden, Water and Sewer
Bonds, (AMT), 6.75%,
6/1/08 $ 191,326
NR BBB 970 Guam, 5.40%, 11/15/18 871,700
Aaa AAA 3,550 North Carolina Capital
Improvements, 4.75%,
2/1/12 3,367,317
Baa1 A 2,500 Puerto Rico Aqueduct and
Sewer Authority, 5.00%,
7/1/15 2,310,175
Baa1 A 3,000 Puerto Rico, 5.40%, 7/1/25 2,839,590
NR NR 2,550 Virgin Island, 7.25%,
10/1/18 2,701,470
-----------
$ 12,281,578
-----------
HEALTH CARE - 0.9%
Aa AA $1,700 North Carolina Medical
Care Commission, Carolina
Medicorp, 6.00%, 5/1/21 $ 1,708,789
-----------
HOSPITALS - 17.2%
Aa AA $2,090 Charlotte-Mecklenberg
Hospital, 0%, 1/1/06 $ 1,263,489
Aa AA 2,345 Charlotte-Mecklenberg
Hospital, 6.25%, 1/1/20 2,417,789
A A+ 2,410 North Carolina Medical
Care Commission, Gaston
Memorial Hospital, 5.50%,
2/15/15 2,346,328
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
A A+ 1,000 North Carolina Medical
Care Commission, Gaston
Memorial Hospital, 5.50%,
2/15/19 964,620
NR A 5,500 North Carolina Medical
Care Commission, Mercy
Hospital, 6.50%, 8/1/08 5,801,510
Aa AA- 3,000 North Carolina Medical
Care Commission, North
Carolina Baptist Hospital,
6.00%, 6/1/22 3,024,840
Aa AA 3,700 North Carolina Medical
Care Commission,
Presbyterian Health
Services, 6.00%, 10/1/24 3,721,941
A1 A+ 5,000 North Carolina Medical
Care Commission, Rex
Hospital, 6.125%, 6/1/10 5,110,800
NR BBB+ 2,500 North Carolina Medical
Care Commission, Roanoke-
Chowan Hospital, 7.75%,
10/1/19 2,650,925
NR AA 950 North Carolina Medical
Care Commission, Scotland
Memorial Hospital, 5.375%,
10/1/11 (2) 918,355
Aa AA- 2,000 Pitt County, Pitt Memorial
Hospital, 5.50%, 12/1/15 1,950,460
Aa AA- 2,380 University of North
Carolina at Chapel Hill,
6.00%, 2/15/24 2,415,890
-----------
$ 32,586,947
-----------
HOUSING -- 10.8%
NR AAA $1,900 Charlotte Housing, Double
Oaks, (FHA), (FNMA),
7.35%, 5/15/26 $ 2,076,282
Aa AA 2,250 North Carolina HFA, MFMR,
6.70%, 1/1/27 2,360,813
Aa AA 4,395 North Carolina HFA, MFMR,
6.85%, 7/1/13 4,680,807
Aa A+ 870 North Carolina HFA, SFMR,
6.95%, 3/1/17 921,835
Aa A+ 890 North Carolina HFA, SFMR,
(AMT), 7.05%, 9/1/20 939,947
Aa A+ 3,880 North Carolina HFA, SFMR,
(AMT), 6.70%, 9/1/26 4,037,450
Aa A+ 2,120 North Carolina HFA, SFMR,
(AMT), 6.60%, 9/1/26 2,192,907
Aa A+ 3,000 North Carolina HFA, SFMR,
(AMT), 6.20%, 9/1/27 3,026,100
Aaa AAA 200 Puerto Rico HFC, SFMR,
(GNMA), 6.85%, 10/15/23 136,580
-----------
$ 20,372,721
-----------
</TABLE>
66
<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>
INDUSTRIAL DEVELOPMENT
REVENUE -- 10.1%
Baa1 BBB $1,500 Haywood County, Champion
International Corporation,
(AMT), 5.75%, 12/1/25 $ 1,406,745
Baa1 BBB 3,200 Haywood County, Champion
International Corporation,
(AMT), 5.50%, 10/1/18 2,973,536
Baa1 NR 1,350 Haywood County, Champion
International Corporation,
(AMT), 6.25%, 9/1/25 1,351,080
A2 A 1,000 Martin County,
Weyerhaeuser Company
Project, (AMT), 5.65%,
12/1/23 952,870
A2 A 4,250 Martin County,
Weyerhaeuser Company
Project, (AMT), 6.80%,
5/1/24 4,505,298
A2 A 2,500 Martin County,
Weyerhaeuser Company
Project, (AMT), 6.00%,
11/1/25 2,489,450
Baa2 BBB 2,500 New Hanover County,
Occidental Petroleum
Corporation, 6.70%, 7/1/19 2,665,275
NR AA 850 Robeson County, Campbell
Soup Company, 6.40%,
12/1/06 942,650
Baa3 BB+ 1,500 Raleigh-Durham Airport
Authority, American
Airlines Inc., 9.40%,
11/1/00 1,719,990
-----------
$ 19,006,894
-----------
INSURED GENERAL
OBLIGATIONS -- 2.5%
Aaa AAA $1,000 Puerto Rico, (AMBAC),
Variable, 7/1/15 (1) $ 1,048,990
Aaa AAA 3,500 Puerto Rico, (FSA),
Variable, 7/1/22 (1) 3,765,615
-----------
$ 4,814,605
-----------
INSURED HOSPITALS -- 9.7%
Aaa AAA $2,000 Catawba County, Catawba
Memorial Hospital,
(AMBAC), 6.20%, 10/1/09 $ 2,091,780
Aaa AAA 500 Cumberland County
Hospital, (MBIA), 0%,
10/1/09 239,415
Aaa AAA 3,750 North Carolina Medical
Care Commission, Moore
Regional Hospital, (FGIC),
5.00%, 10/1/18 3,477,113
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaa AAA 1,750 North Carolina Medical
Care Commission, Moore
Regional Hospital, (FGIC),
5.20%, 10/1/13 1,674,155
Aaa AAA 2,500 North Carolina Medical
Care Commission,
Wesley-Long Community
Hospital, (AMBAC), 5.25%,
10/1/17 2,376,100
Aaa AAA 935 North Carolina Medical
Care Commission, Memorial
Mission Hospital, (FSA),
0%, 10/1/06 541,140
Aaa AAA 5,000 North Carolina Medical
Care Commission, St.
Joseph's Medical Center,
(AMBAC), 5.10%, 10/1/14 4,729,950
Aaa AAA 4,430 Wake County, North
Carolina Hospital System,
(MBIA), 0%, 10/1/09 2,129,634
Aaa AAA 2,230 Wake County, North
Carolina Hospital System,
(MBIA), 0%, 10/1/10 988,715
-----------
$ 18,248,002
-----------
INSURED LEASE/CERTIFICATES
OF PARTICIPATION - 9.0%
Aaa AAA $4,500 Charlotte, Convention
Facility, (AMBAC), 5.25%,
12/1/13 $ 4,383,090
Aaa AAA 1,750 Duplin County, (FGIC),
5.25%, 8/1/14 1,682,030
Aaa AAA 1,575 Franklin, (FGIC), 6.625%,
6/1/14 1,707,804
Aaa AAA 5,000 Iredell County, Iredell-
Statesville Schools,
(FGIC), 6.125%, 6/1/07 5,351,150
Aaa AAA 1,000 Mooresville School
District, (AMBAC), 6.35%,
10/1/14 1,057,420
Aaa AAA 1,770 Pasquotank County School
District, (MBIA), 5.00%,
6/1/20 1,634,330
Aaa AAA 1,000 Rutherford County, (FGIC),
6.25%, 6/1/23 1,045,260
Aaa AAA 200 Scotland County, (CGIC),
6.75%, 3/1/11 216,104
-----------
$ 17,077,188
-----------
INSURED TRANSPORTATION - 1.7%
Aaa AAA $3,300 Piedmont Triad Airport
Authority, (MBIA), 5.125%,
7/1/12 $ 3,174,402
-----------
</TABLE>
67
<PAGE> 68
- ------------
- --------------------------------------------------------------------------------
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 UTILITIES - 9.0%
Aaa AAA $5,500 North Carolina Municipal
Power Authority, Catawba
Electric, (AMBAC), 5.75%,
1/1/15 $ 5,493,180
Aaa AAA 4,650 North Carolina Municipal
Power Authority, Catawba
Electric, (AMBAC), 5.375%,
1/1/20 4,477,392
Aaa AAA 4,000 North Carolina Municipal
Power Authority, Catawba
Electric, (MBIA),
Variable, 1/1/12 (1) 3,975,240
Aaa AAA 1,500 North Carolina Eastern
Municipal Power Authority,
(FSA), Variable, 1/1/19
(1) 1,519,680
Aaa AAA 1,400 Puerto Rico Electric Power
Authority, Stripes, (FSA),
Variable, 7/1/02 (1) 1,595,076
-----------
$ 17,060,568
-----------
LEASE/CERTIFICATES OF
PARTICIPATION - 3.7%
A1 A- $2,065 Buncombe County, 6.625%,
12/1/10 $ 2,257,025
NR AA 825 Durham County, 6.10%,
7/15/07 892,493
Aa AA 985 Durham County, 6.75%,
12/1/11 1,079,629
A1 AA 2,400 Greensboro, Greensboro
Coliseum Arena, 6.75%,
12/1/09 2,685,360
-----------
$ 6,914,507
-----------
SPECIAL TAX REVENUE - 4.0%
A1 AA- $2,200 Greensboro, North
Carolina, Enterprise
System, 5.375%, 6/1/19 $ 2,135,892
Baa1 BBB+ 200 Puerto Rico Finance
Authority, 7.90%, 7/1/07 216,986
Baa1 A 4,000 Puerto Rico Highway and
Transportation Authority,
5.25%, 7/1/20 3,714,760
Baa1 A 1,490 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/15 1,453,525
-----------
$ 7,521,163
-----------
UTILITIES - 8.9%
A2 A $1,015 Chatham County Industrial
Facilities and Pollution,
Carolina Power & Light,
6.30%, 6/1/14 $ 1,117,545
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
A A- 550 North Carolina Municipal
Power, Catawba Electric,
7.00%, 1/1/16 570,620
A BBB+ 5,000 North Carolina Municipal
Power, Eastern Power,
6.125%, 1/1/09 5,190,950
A BBB+ 1,500 North Carolina Municipal
Power, Eastern Power,
6.40%, 1/1/21 1,530,180
A BBB+ 3,200 North Carolina Municipal
Power, Eastern Power,
6.00%, 1/1/26 3,226,335
A BBB+ 1,750 North Carolina Municipal
Power, Eastern Power,
7.00%, 1/1/13 1,951,390
Baa1 A- 2,000 Puerto Rico Electric Power
Authority, 6.00%, 7/1/16 564,660
Baa1 A- 2,000 Puerto Rico Electric Power
Authority, 0%, 7/1/17 2,019,700
Baa1 A- 365 Puerto Rico Electric Power
Authority, 7.125%, 7/1/14 396,941
NR NR 250 Virgin Islands Water and
Power Authority, 7.40%,
7/1/11 265,450
-----------
$ 16,833,771
-----------
WATER & SEWER - 1.0%
Aa AA $2,000 Orange County, Water &
Sewer, 5.20%, 7/1/16 $ 1,941,240
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$177,222,075) $188,919,725
===========
</TABLE>
(1) The above security has been issued as an inverse floater bond.
(2) Security has been segregated to cover margin requirements on open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by North Carolina
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 February 29, 1996, 32.0% 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 0.1% to 13.6% of total investments.
See notes to financial statements
68
<PAGE> 69
- ------------
Oregon Municipals Portfolio
Portfolio of Investments - February 29, 1996
(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>
COGENERATION - 1.5%
NR NR $2,000 Western Generation Agency,
Wauna Cogeneration
Project, (AMT), 7.40%,
1/1/16 $ 2,153,820
-----------
EDUCATION - 2.6%
NR A+ $2,750 State of Oregon Health,
Housing, Educational and
Cultural Facilities
Authority, Reed College
Project, 5.375%, 7/1/25 $ 2,623,115
A NR 1,000 City of Salem, Educational
Facilities, Willamette
University Project, 6.10%,
4/1/14 1,047,750
-----------
$ 3,670,865
-----------
ESCROWED - 2.8%
A1 AAA $2,000 City of Medford, Rogue
Valley Memorial Hospital,
6.25%, 12/1/07 $ 2,252,020
NR AAA 200 Puerto Rico Highway &
Transportation Authority,
6.625%, 7/1/08 228,376
NR A+ 1,250 State of Oregon Health,
Housing, Educational and
Cultural Facilities
Authority, Reed College
Project, 6.75%, 7/1/21 1,414,138
-----------
$ 3,894,534
-----------
GENERAL
OBLIGATIONS - 15.8%
Aa AA+ $1,000 Tri County Metropolitan
Transportation District,
Light Rail Extension,
6.00%, 7/1/12 $ 1,047,490
Aa NR 1,000 Clackamas & Multnomah
Counties, Lake Oswego
School District, 5.70%,
6/15/10 1,033,870
Aa NR 2,000 Lane County, City of
Eugene, School District,
5.375%, 7/1/13 2,011,240
Aa AA- 1,000 State of Oregon, Oregon
Veterans' Welfare Bonds,
9.00%, 4/1/04 1,297,770
Aa AA- 1,500 State of Oregon, Oregon
Veterans' Welfare Bonds,
5.875%, 10/1/18 1,532,145
Aa AA- 1,000 State of Oregon, Board of
Higher Education, 6.00%,
10/15/18 1,049,900
Aa AA- 1,250 State of Oregon, Elderly
and Disabled Housing,
6.375%, 8/1/24 1,343,513
Aa AA- 1,000 State of Oregon, Elderly
and Disabled Housing,
(AMT), 5.625%, 8/1/18 1,011,950
Aa AA- 6,110 State of Oregon, Elderly
and Disabled Housing,
(AMT), 5.65%, 8/1/26 6,149,471
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Baa1 A 1,675 Commonwealth of Puerto
Rico, 5.40%, 7/1/25 1,585,437
Baa1 A 1,000 Commonwealth of Puerto
Rico Aqueduct and Sewer
Authority, 6.25%, 7/1/12 1,084,530
Baa1 A 2,000 Commonwealth of Puerto
Rico Public Building
Authority, 5.75%, 7/1/15 1,988,280
Baa1 A 1,000 Commonwealth of Puerto
Rico Public Building
Authority, 5.50%, 7/1/21 953,970
-----------
$ 22,089,566
-----------
HOSPITALS - 1.5%
NR A $1,000 Benton County, Good
Samaritan Hospital
Corvallis, 6.25%, 10/1/09 $ 1,021,880
Aa3 AA 1,000 Clackamas County, Kaiser
Permanente, 6.25%, 4/1/21 1,059,600
-----------
$ 2,081,480
-----------
HOUSING - 10.6%
NR A $1,750 City of Portland Housing
Authority, Multi-Family
Mortgage Revenue,
Riverwood Project, 6.00%,
1/1/19 $ 1,743,350
Aa NR 2,500 State of Oregon Housing
and Community Services
Department, Multi-Family
Mortgage Revenue, 6.875%,
7/1/28 2,651,450
Aa NR 1,055 State of Oregon Housing
and Community Services
Department, Single Family
Mortgage Revenue, (AMT),
6.80%, 7/1/27 1,108,320
Aa1 NR 1,500 State of Oregon Housing
and Community Services
Department, Single Family
Mortgage Revenue, 5.375%,
7/1/17 1,440,135
Aa NR 3,500 State of Oregon, Housing
and Community Services
Department, Single Family
Mortgage Revenue, 5.45%,
7/1/24 3,325,630
Aa NR 2,500 State of Oregon, Housing
and Community Services
Department, Single Family
Mortgage Revenue, (AMT),
6.45%, 7/1/26 2,537,825
</TABLE>
69
<PAGE> 70
- ------------
- --------------------------------------------------------------------------------
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)
Aa NR 2,000 State of Oregon, Housing
and Community Services
Department, Single Family
Mortgage Revenue, (AMT),
6.40%, 7/1/26 2,022,240
-----------
$ 14,828,950
-----------
INDUSTRIAL
DEVELOPMENT/POLLUTION
CONTROL REVENUE - 7.4%
Baa2 BBB- $3,500 Oregon Economic
Development Authority,
Georgia Pacific, 6.35%,
8/1/25 $ 3,435,740
NR BBB- 5,000 Port of Astoria, James
River Project, 6.55%,
2/1/15 (2) 5,111,100
NR NR 750 Port of Portland, Ash
Grove Cement Co., 7.25%,
10/1/09 827,318
Baa1 A 1,000 Port of Portland, North
Portland Crown Zellerbach
Corporation, 6.125%,
5/15/08 1,000,060
-----------
$ 10,374,218
-----------
INSURED TRANSPORTATION -
4.9%
Aaa AAA $1,000 Port of Portland, Portland
International Airport,
(AMT), (AMBAC), 6.25%,
7/1/18 $ 1,071,120
Aaa AAA 2,750 Port of Portland, Portland
International Airport,
(AMT), (FGIC), 6.00%,
7/1/23 2,892,560
Aaa AAA 1,250 Port of Portland, Portland
International Airport,
(AMT), (FGIC), 5.75%,
7/1/25 1,264,400
Aaa AAA 1,500 Oregon Department of
Transportation, Westside
Light Rail, (MBIA), 6.25%,
6/1/09 1,635,585
-----------
$ 6,863,665
-----------
INSURED EDUCATION - 1.9%
Aaa AAA $1,000 State of Oregon Health,
Housing, Educational and
Cultural Facilities
Authority, Lewis and Clark
College, (MBIA), 6.00%,
10/1/13 $ 1,044,520
Aaa AAA 1,500 State of Oregon Health,
Housing, Educational and
Cultural Facilities
Authority, Lewis and Clark
College, (MBIA), 6.125%,
10/1/24 1,570,650
-----------
$ 2,615,170
-----------
INSURED GENERAL
OBLIGATIONS - 3.7%
Aaa AAA $1,000 Multnomah County, Parkrose
School District, (FGIC),
5.70%, 12/1/09 $ 1,054,910
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaa AAA 1,000 Multnomah County, Parkrose
School District, (FGIC),
5.50%, 12/1/10 1,033,350
Aaa AAA 1,000 Yamhill, Clackamas &
Washington Counties,
Newberg School Dist.,
(FSA), 5.50%, 6/1/10 1,025,190
Aaa AAA 2,000 Puerto Rico, (AMBAC),
Variable, 7/1/15 (1) 2,097,980
-----------
$ 5,211,430
-----------
INSURED HOSPITALS - 4.6%
Aaa AAA $3,630 Oregon Health Science
University, Capital
Appreciation, (MBIA), 0%,
7/1/21 $ 859,693
Aaa AAA 2,500 Oregon Health Science
University, Capital
Appreciation, (MBIA),
5.25%, 7/1/28 2,369,750
Aaa AAA 2,000 City of Portland, Hospital
Facilities Authority,
Legacy Health System,
(AMBAC), 6.70%, 5/1/21 2,186,540
Aaa AAA 1,000 Western Lane Hospital
District Authority,
Sisters of St. Joseph of
Peace, (MBIA), 5.75%,
8/1/19 1,011,640
-----------
$ 6,427,623
-----------
INSURED LEASE/CERTIFICATES
OF PARTICIPATIONS - 4.9%
Aaa AAA $1,250 State of Oregon,
Department of General
Services, Certificates of
Participation, Real
Property Financing
Program, (AMBAC), 6.25%,
9/1/15 $ 1,317,750
Aaa AAA 1,500 State of Oregon,
Department of General
Services, Certificates of
Participation, Real
Property Financing
Program, (MBIA), 6.25%,
11/1/19 (2) 1,581,735
Aaa AAA 2,775 State of Oregon,
Department of
Administration,
Certificate of
Participation, (MBIA),
5.375%, 11/1/16 2,712,174
Aaa AAA 1,200 State of Oregon,
Department of
Administration,
Certificate of
Participation, (MBIA),
5.50%, 11/1/20 1,182,384
-----------
$ 6,794,043
-----------
INSURED UTILITIES - 2.6%
Aaa AAA $1,000 Lane County, Emerald
People's Utility District,
Electric System, (AMBAC),
5.75%, 11/1/16 $ 1,021,090
</TABLE>
70
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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>
INSURED UTILITIES - (CONTINUED)
Aaa AAA 1,000 City of Eugene, Electric
Utility Revenue, (MBIA),
5.80%, 8/1/22 1,034,680
Aaa AAA 1,000 Northern Wasco County,
Peoples Utility District,
(FGIC), 5.625%, 12/1/22 1,005,910
Aaa AAA 500 Puerto Rico Electric Power
Authority, (FSA),
Variable, 7/1/03 (1) 578,845
-----------
$ 3,640,525
-----------
INSURED WATER & SEWER - 4.8%
Aaa AAA $1,000 City of Beaverton,
Washington County, Water
Revenue, (FSA), 6.125%,
6/1/14 $ 1,048,600
Aaa AAA 1,500 City of Portland, Sewer
System, (FGIC), 6.00%,
10/1/12 1,585,260
Aaa AAA 1,000 South Fork Water Board,
First Lien Water Revenue,
(FSA), 6.00%, 2/1/14 1,045,350
Aaa AAA 1,375 Washington County, Unified
Sewerage Agency, Senior
Lien, (AMBAC), 6.125%,
10/1/12 1,454,214
Aaa AAA 1,500 Washington County, Unified
Sewerage Agency, (AMBAC),
6.125%, 10/1/12 1,586,415
-----------
$ 6,719,839
-----------
LEASE/CERTIFICATE OF
PARTICIPATION - 3.2%
A A $3,000 State of Oregon,
Certificates of
Participation, Metro
Regional Center Project,
5.25%, 8/1/22 $ 2,832,270
Aa A 1,500 Multnomah County,
Certificates of
Participation, Juvenile
Justice Complex, 6.00%,
8/1/12 1,555,170
-----------
$ 4,387,440
-----------
MISCELLANEOUS - 1.1%
A1 NR $1,500 State of Oregon Health,
Housing, Educational and
Cultural Facilities
Authority, Oregon Coast
Aquarium, 5.25%, 10/1/13 $ 1,491,420
-----------
SPECIAL TAX REVENUE - 7.3%
A NR $1,000 City of Portland, Urban
Renewal and Redevelopment
Bonds, Downtown Waterfront
Project, 6.40%, 6/1/08 $ 1,085,290
Baa1 A 1,500 Puerto Rico Highway and
Transportation Authority,
6.375%, 7/1/08 1,616,790
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Baa1 A 1,720 Puerto Rico Highway and
Transportation Authority,
5.25%, 7/1/20 1,597,347
Baa1 A 2,000 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/17 1,912,800
Baa1 A 800 Puerto Rico Highway and
Transportation Authority,
6.625%, 7/1/18 872,968
A1 AA 3,000 Tri-County Metropolitan
Transportation District,
Limited Tax Pledge, 5.70%,
8/1/13 3,048,660
----------
$ 10,133,855
-----------
TRANSPORTATION - 3.6%
Ba1 BB $1,500 Port of Portland, Special
Obligation Revenue Bonds,
Delta Airlines Inc.
Project, (AMT), 6.20%,
9/1/22 $ 1,500,960
NR BBB 2,000 Guam Airport Authority,
6.50%, 10/1/23 2,006,920
NR BBB 1,500 Guam Airport Authority,
(AMT), 6.70%, 10/1/23 1,515,705
-----------
$ 5,023,585
-----------
UTILITIES - 12.6%
A1 AA $1,500 City of Eugene, Electric
Utility System, 6.00%,
8/1/11 $ 1,555,485
A1 AA 4,055 City of Eugene, Electric
Utility System, 5.75%,
8/1/16 4,124,624
Aa AA 4,000 City of Eugene, Trojan
Nuclear Power Project,
5.90%, 9/1/09 (2) 4,005,040
Aa AA 4,000 Northern Wasco County,
People's Utility District,
McNary Dam Fishway
Hydroelectric Project,
Bonneville Power
Administration, 5.20%,
12/1/24 3,718,520
Baa1 A- 4,000 Puerto Rico Electric Power
Authority, 5.00%, 7/1/12 3,680,760
A A+ 500 Puerto Rico Telephone
Authority, Variable,
1/1/20 (1) 532,635
-----------
$ 17,617,064
-----------
WATER & SEWER - 2.6%
NR A+ $2,000 Clackamus County, Water
Revenue, 6.375%, 10/1/14 $ 2,175,580
A A+ 1,500 City of Gresham, Water
Revenue, 5.20%, 11/1/10 1,493,803
-----------
$ 3,669,383
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$133,580,135) $139,688,475
===========
</TABLE>
71
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- ------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
(1) The above designated securities have been issued as inverse floater bonds.
(2) Security has been segregated to cover margin requirements on open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Oregon
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 February 29, 1996, 26.7% 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 2.6% to 10.8% of total investments.
See notes to financial statements
72
<PAGE> 73
- ------------
South Carolina Municipals Portfolio
Portfolio of Investments - February 29, 1996
(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 - 2.3%
NR A $1,500 SC Education Authority,
Student Loan, (AMT), 6.30%,
9/1/08 $ 1,540,905
-----------
GENERAL OBLIGATIONS - 4.8%
NR BBB $1,025 Guam, 5.40%, 11/15/18 $ 921,127
Baa1 A 1,000 Puerto Rico Public
Building, 5.75%, 7/1/16 991,620
Baa1 A 1,000 Puerto Rico, 6.50%, 7/1/23 1,074,120
NR NR 200 Virgin Islands, 7.25%,
10/1/18 211,880
-----------
$ 3,198,747
-----------
HOSPITALS - 5.7%
NR AA- $ 725 Greenville Hospital System
Board of Trustees, 7.00%,
5/1/17 $ 766,695
Baa1 NR 1,500 Horry County, Conway
Hospital, 6.75%, 7/1/12 (3) 1,552,830
NR AAA 1,500 SC Jobs Economic
Developement, Oconee
Memorial Hospital, 6.15%,
3/1/25 1,536,075
-----------
$ 3,855,600
-----------
HOUSING - 11.7%
NR AA $ 990 South Carolina HFA, MFMR,
Westbury Place, 6.05%,
7/1/27 $ 985,753
NR BBB+ 1,000 South Carolina HFA, MFMR,
Hunting Ridge, (AMT),
6.75%, 6/1/25 1,008,470
NR AA- 1,780 South Carolina HFA, MFMR,
Runaway Bay Apt. Project,
6.20%, 12/1/20 1,766,436
Aa AA 1,500 South Carolina HFA, SFMR,
6.375%, 7/1/16 1,528,785
Aa NR 1,500 South Carolina HFA, SFMR,
6.45%, 7/1/17 1,547,715
Aa NR 1,000 South Carolina HFA, SFMR,
(AMT), 6.75%, 7/1/26 1,031,350
-----------
$ 7,868,509
-----------
INDUSTRIAL DEVELOPMENT -
18.6%
Baa2 BBB $1,890 Aiken County, IDA, Beloit
Corporation, 6.00%, 12/1/11 $ 1,918,690
NR BBB+ 1,500 Chester County, IDA, 7.35%,
2/1/14 1,633,005
A1 AA- 1,500 Darlington County, IDA,
Nucor Corporation, (AMT),
5.75%, 8/1/23 (3) 1,473,510
A2 A+ 500 Darlington County, IDB,
Sonoco Products, (AMT),
6.125%, 6/1/25 512,810
Aa3 AA 500 Florence County, IDA,
Pollution Control, E.I. du
Pont de Nemours & Co.,
6.35%, 7/1/22 533,170
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
A1 A- 2,665 Richland County, IDA,
Pollution Control, Union
Camp Corporation, (AMT),
6.75%, 11/1/22 2,848,805
NR NR 1,500 Spartanburg County, IDA,
Solid Waste, Bavarian Motor
Works Corp., (AMT), 7.55%,
11/1/24 1,640,985
A2 A+ 2,000 York County, IDA, Hoechst
Celanese Corporation,
(AMT), 5.70%, 1/1/24 1,958,820
-----------
$12,519,795
-----------
INSURED EDUCATION - 0.4%
Aaa AAA $ 250 College of Charleston,
Housing and Auxiliary
Facilities, (MBIA), 6.00%,
10/1/07 $ 260,438
-----------
INSURED GENERAL
OBLIGATION - 1.6%
Aaa AAA $1,000 Berkeley County School
District, (AMBAC), 6.30%,
2/1/16 $ 1,061,190
-----------
INSURED HEALTHCARE - 6.9%
Aaa AAA $2,000 South Carolina Jobs-EDA,
Anderson Area Med. Center,
(MBIA), 5.25%, 2/1/15 $ 1,896,540
Aaa AAA 3,000 South Carolina Jobs-EDA,
Anderson Area Med. Center,
(MBIA), 5.25%, 2/1/15 2,766,780
-----------
$ 4,663,320
-----------
INSURED HOSPITALS - 8.5%
Aaa AAA $1,000 Florence County, McLeod
Medical Center, (FGIC),
5.25%, 11/1/09 $ 967,740
Aaa AAA 1,500 Greenwood County, Self
Memorial Hospital, (FGIC),
5.875%, 10/1/17 (4) 1,529,055
Aaa AAA 300 Lexington County Health
Services District, Inc.,
(FSA), 6.75%, 10/1/18 322,506
Aaa AAA 1,000 South Carolina Jobs-EDA,
Baptist Hospital, (AMBAC),
5.45%, 8/1/15 987,560
Aaa AAA 1,000 South Carolina Jobs-EDA,
Baptist Hospital, (AMBAC),
Variable, 8/1/15 (1) 947,860
Aaa AAA 1,000 South Carolina Jobs-EDA,
Baptist Hospital, (AMBAC),
Variable, 8/1/15 (1) 1,000,000
-----------
$ 5,754,721
-----------
INSURED LEASE/CERTIFICATE
OF PARTICIPATION -- 6.9%
Aaa AAA $ 500 Charleston County, (MBIA),
6.10%, 6/1/11 $ 532,875
</TABLE>
73
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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>
INSURED LEASE/CERTIFICATE OF
PARTICIPATION - (CONTINUED)
Aaa AAA 1,000 Charleston County, (MBIA),
7.00%, 6/1/19 1,098,380
Aaa AAA 1,060 Chesterfield County School
District, (MBIA), 6.00%,
7/1/15 1,084,380
Aaa AAA 1,000 Florence County, Law
Center, (AMBAC), 6.00%,
3/1/14 1,027,940
Aaa AAA 900 North Charleston, Coliseum
Capital Improvements,
(FGIC), 6.00%, 1/1/11 931,032
-----------
$ 4,674,607
-----------
INSURED SOLID WASTE -- 0.8%
Aaa AAA $ 500 Charleston County, (FGIC),
6.00%, 1/1/14 $ 520,965
-----------
INSURED UTILITIES -- 12.0%
Aaa AAA $ 300 Piedmont Municipal Power
Agency, (MBIA), 6.25%,
1/1/09 $ 332,154
Aaa AAA 1,000 Piedmont Municipal Power
Agency, (MBIA), 6.30%,
1/1/14 1,045,270
Aaa AAA 400 Puerto Rico Electric Power
Authority, (STRIPES),
(FSA), Variable, 7/1/02 (1) 455,736
Aaa AAA 150 Rock Hill, Downtown
Redevelopment, (AMBAC),
5.375%, 1/1/14 146,378
Aaa AAA 1,000 South Carolina Public
Service Authority, Santee
Cooper, (AMBAC), 5.00%,
1/1/14 945,750
Aaa AAA 1,000 South Carolina Public
Service Authority, Santee
Cooper, (MBIA), 5.125%,
1/1/32 915,340
Aaa AAA 1,500 South Carolina Public
Service Authority, (MBIA),
5.75%, 1/1/10 (2) 1,508,805
Aaa AAA 1,500 South Carolina Public
Service Authority, (MBIA),
5.75%, 1/1/22 (2) 1,447,110
Aaa AAA 1,250 South Carolina Public
Service Authority, (AMBAC),
6.375%, 7/1/21 1,309,375
-----------
$ 8,105,918
-----------
INSURED WATER & SEWER --
2.2%
Aaa AAA $1,000 Berkeley County, South
Carolina Water and Sewer
System, (MBIA), 5.55%,
6/1/15 $ 989,410
Aaa AAA 500 Mount Pleasant, Waterworks
and Sewer System, (AMBAC),
6.00%, 12/1/20 517,810
-----------
$ 1,507,220
-----------
LEASE/CERTIFICATE OF
PARTICIPATION -- 3.9%
Baa NR $ 750 Lexington School District,
6.90%, 7/1/08 $ 807,278
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Baa1 BBB+ 1,750 Myrtle Beach Convention
Center, 6.875%, 7/1/17 1,845,445
-----------
$ 2,652,723
-----------
MISCELLANEOUS -- 0.5%
NR A+ $ 300 South Carolina Resource
Authority, 7.00%, 4/1/13 $ 313,404
-----------
UTILITIES -- 12.2%
A2 A- $1,650 Berkeley County, South
Carolina Electric & Gas
Company, 6.50%, 10/1/14 $ 1,777,397
A2 A 1,500 Darlington County, Carolina
Power & Light Company,
6.60%, 11/1/10 1,625,205
Aa2 AA- 1,000 Oconee County PCR, Duke
Power Co. Project 5.80%,
4/1/14 1,018,290
A BBB 500 Piedmont Municipal Power
Agency, 5.75%, 1/1/24 476,010
Baa1 A- 1,400 Puerto Rico Electric Power
Authority, 6.25%, 7/1/17 1,439,116
Baa1 A- 500 Puerto Rico Electric Power
Authority, 6.375%, 7/1/24 520,465
A1 A+ 500 South Carolina Public
Service Authority, Santee
Cooper, 6.00%, 7/1/31 502,430
A1 A+ 1,000 South Carolina Public
Service Authority, 5.125%,
1/1/32 884,920
-----------
$ 8,243,833
-----------
WATER & SEWER REVENUE --
1.0%
Aa AA $ 500 Columbia, Waterworks and
Sewer System, 5.375%,
2/1/12 $ 510,450
A1 AA- 150 Spartanburg, Water System,
6.25%, 6/1/12 159,128
-----------
$ 669,578
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$63,721,739) $67,411,470
===========
</TABLE>
(1) The above security has been issued as an inverse floater bond.
(2) When-Issued Security.
(3) Security has been segregated to cover when-issued securities.
(4) Security has been segregated to cover margin requirements on open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by South Carolina
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
74
<PAGE> 75
- ------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
developments, at February 29, 1996, 39.4% 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 1.2% to 23.6% of total investments.
See notes to financial statements
75
<PAGE> 76
- ------------
Tennessee Municipals Portfolio
Portfolio of Investments - February 29, 1996
(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 -- 6.1%
NR AA $1,500 Jackson Health, Education,
& Housing, Lambuth
University, 5.90%, 9/1/20 $ 1,518,705
Aa AA 1,000 Nashville and Davidson
County, Vanderbilt
University, 5.20%, 7/1/08 964,100
Baa NR 1,000 Nashville and Davidson
County, Belmont
University, 6.40%, 12/1/19 1,038,430
-----------
$ 3,521,235
-----------
ESCROWED -- 2.7%
Aaa AAA $1,500 Shelby County, Lebonheur
Children's Hospital,
(MBIA) 5.50%, 8/15/12 $ 1,532,595
-----------
GENERAL
OBLIGATIONS -- 3.5%
Aa AA+ $1,000 Shelby County, 5.625%,
4/1/14 (2) $ 1,019,590
Aa AA+ 1,000 Shelby County, 5.125%,
3/1/16 964,250
-----------
$ 1,983,840
-----------
HOSPITALS -- 4.1%
Baa1 NR $ 500 City of Clarksville,
Clarksville Memorial,
6.25%, 7/1/08 $ 506,280
Baa1 NR 500 City of Clarksville,
Clarksville Memorial,
6.375%, 7/1/18 502,205
Baa1 BBB+ 250 Knox County, East
Tennessee Children's,
6.50%, 10/1/12 254,248
NR A- 1,000 Sumner County, Sumner
Regional Health Systems,
7.50%, 11/1/14 1,101,280
-----------
$ 2,364,013
-----------
HOUSING -- 16.6%
NR AAA $ 500 Knoxville Community
Development Corporation,
MFMR, Morningside Gardens,
(GNMA) 6.10%, 7/20/20 $ 502,790
NR A 750 Knoxville Community
Development Corporation,
MFMR, Clinton Towers,
6.65%, 10/15/10 771,683
NR A 1,645 Nashville and Davidson
County, MFMR, The Park at
Hermitage, 5.90%, 2/1/09 1,548,603
NR A 800 Murfreesboro Housing
Authority, MFMR,
Westbrooks Towers Project,
5.875%, 1/15/10 776,704
Aa A+ 465 TN HDA, Homeownership
Program, 6.80%, 7/1/17 481,647
A1 A+ 2,000 TN HDA, Mortgage Finance
Program, 5.85%, 7/1/13 2,024,140
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
A1 A+ 2,000 TN HDA, Mortgage Finance
Program, 5.95%, 7/1/28 2,009,740
Aa AA 1,500 TN HDA, Homeownership
Program, (AMT) 5.75%,
7/1/24 1,451,040
-----------
$ 9,566,347
-----------
INDUSTRIAL DEVELOPMENT
REVENUE -- 21.3%
Aa3 AA $1,000 City of Chattanooga, E.I.
du Pont de Nemours and
Company, 6.35%, 7/1/22 $ 1,070,100
Aa2 AA- 1,000 Humphreys County, E.I. du
Pont de Nemours and
Company, (AMT) 6.70%,
5/1/24 1,081,000
Aa2 AA 2,000 Loudon County, Kimberly-
Clark Corporation, (AMT)
6.20%, 2/1/23 (2) 2,059,100
NR A- 2,500 Maury County, Saturn
Corporation, 6.50%, 9/1/24 2,604,125
Baa1 BBB 1,000 McMinn County, Calhoun
Newsprint Company, Bowater
Incorporated Obligor,
(AMT) 7.625%, 3/1/16 1,076,420
Baa1 BBB 250 McMinn County, Calhoun
Newsprint Company, Bowater
Incorporated Obligor,
(AMT) 7.40%, 12/1/22 269,455
Baa2 BBB 1,500 Memphis-Shelby County
Airport Authority, Federal
Express Corporation,
6.75%, 9/1/12 1,586,220
Baa2 BBB 1,000 Memphis-Shelby County
Airport Authority, Federal
Express Corporation, (AMT)
6.20%, 7/1/14 998,800
NR BBB+ 500 Nashville and Davidson
County, Osco Treatment
Systems, (AMT) 6.00%,
5/1/03 509,840
A3 NR 1,000 South Fulton County, Tyson
Foods Company, 6.40%,
10/1/20 1,022,910
-----------
$ 12,277,970
-----------
INSURED GENERAL
OBLIGATION -- 0.6%
Aaa AAA $ 300 Commonwealth of Puerto
Rico, (AMBAC) Variable
7/1/15, (1) $ 314,697
-----------
INSURED HOUSING -- 1.9%
Aaa AAA $1,000 Knox County, SCA Realty
Multifamily Mortgage
Receipts, (FSA) 7.125%,
1/1/30 $ 1,090,110
-----------
</TABLE>
76
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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>
INSURED HOSPITALS -- 16.8%
Aaa AAA $ 500 City of Bristol, Bristol
Memorial, (FGIC) 6.75%,
9/1/10 $ 575,980
Aaa AAA 1,000 City of Bristol, Bristol
Memorial, (FGIC) 5.125%,
9/1/13 952,810
Aaa AAA 500 Chattanooga-Hamilton
County, Erlanger Medical
Center, (FSA) 5.625%,
10/1/08 (2) 492,125
Aaa AAA 250 City of Chattanooga,
Memorial Hospital Project,
(MBIA) 6.625%, 9/1/09 286,590
Aaa AAA 2,500 City of Jackson, Jackson-
Madison County General
Hospital, (AMBAC) 5.625%,
4/1/15 2,498,425
Aaa AAA 1,000 City of Johnson, Johnson
City Medical Center,
(MBIA) 5.00%, 7/1/13 938,150
Aaa AAA 1,000 Knox County, Mercy Health
System, (AMBAC) 6.00%,
9/1/19 (2) 1,032,090
Aaa AAA 2,000 Knox County, Fort Sanders
Alliance Obligated Group,
(MBIA) 5.25%, 1/1/23 1,887,360
Aaa AAA 1,000 Sullivan County, Holston
Valley Health Care Inc.,
(MBIA) 5.75%, 2/15/13 (2) 1,013,200
-----------
$ 9,676,730
-----------
INSURED SPECIAL
TAX -- 1.9%
Aaa AAA $1,000 City of Johnson, School
District Sales Tax,
(AMBAC) 6.70%, 5/1/21 $ 1,099,690
-----------
INSURED TRANSPORTATION -- 3.7%
Aaa AAA $1,000 Memphis-Shelby County
Airport Authority, (MBIA),
5.65%, 9/1/15 $ 1,008,750
Aaa AAA 1,000 Memphis-Shelby County
Airport Authority, (MBIA),
(AMT) 6.50%, 2/15/09 1,096,560
-----------
$ 2,105,310
-----------
INSURED UTILITIES -- 2.4%
Aaa AAA $1,000 Madison County Suburban
Utility District, (MBIA)
5.00%, 2/1/19 $ 937,740
Aaa AAA 400 Commonwealth of Puerto
Rico, Electric Power
Authority, (FSA) Variable
7/1/03 (1) 463,076
-----------
$ 1,400,816
-----------
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSURED WATER & SEWER -- 5.0%
Aaa AAA $ 500 Roane and Morgan Counties,
Cumberland Utility
District, (MBIA) 5.90%,
1/1/23 $ 511,165
Aaa AAA 1,000 Nashville and Davidson
Counties, Water System,
(AMBAC) 5.75%, 1/1/12 1,010,560
Aaa AAA 350 Nashville and Davidson
Counties, Water System,
(AMBAC) Variable 1/1/22,
(1) 374,171
Aaa AAA 1,000 Nashville and Davidson
Counties, Water System,
(FGIC) 5.20%, 1/1/13 988,880
-----------
$ 2,884,776
-----------
LEASE/CERTIFICATE OF
PARTICIPATION -- 0.9%
A NR $ 500 Wilson County Educational
Facilities Corporation,
6.125%, 6/30/10 $ 525,515
-----------
POOLED LOANS -- 3.4%
A AA- $ 700 Tennessee Local
Development Authority,
State Loan Program, 5.00%,
3/1/15 $ 671,804
NR A- 1,200 Tennessee Local
Development Authority,
Community Provider, 6.55%,
10/1/23 1,263,528
-----------
$ 1,935,332
-----------
NURSING HOMES -- 1.8%
NR A+ $1,000 Tennessee State Veterans'
Homes Board, Humboldt
Project, 6.65%, 2/1/14 $ 1,047,720
-----------
TRANSPORTATION -- 1.8%
NR BBB $1,000 Guam Airport Authority,
(AMT) 6.70%, 10/1/23 $ 1,010,470
-----------
UTILITIES -- 3.3%
NR NR $ 400 Scott and Morgan Counties,
Citizens Gas Utility
District, 6.00%, 1/1/13 $ 398,700
Aa AA 1,000 Nashville and Davidson
Counties, Electric System,
6.00%, 5/15/17 1,034,530
Baa1 A- 500 Commonwealth of Puerto
Rico, Electric Power
Authority, 5.00%, 7/1/12 460,095
-----------
$ 1,893,325
-----------
</TABLE>
77
<PAGE> 78
- ------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
WATER & SEWER -- 2.2%
NR BBB+ $ 250 Hamilton County, Eastside
Utility District, 6.50%,
11/1/05 $ 268,955
NR BBB+ 250 Hamilton County, Eastside
Utility District, 6.75%,
11/1/11 266,778
A1 A 750 Davidson and Williamson
Counties, Harpeth Valley
Utility District, 6.75%,
11/1/11 744,591
-----------
$ 1,280,324
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST
$55,218,447) $ 57,510,815
===========
</TABLE>
(1) The above designated securities have been issued as inverse floater bonds.
(2) Security has been segregated to cover margin requirements on open financial
futures contracts.
The Portfolio invests primarily in debt securities issued by Tennessee
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 February 29, 1996, 32.3% 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 3.6% to 16.0% of total investments.
See notes to financial statements
78
<PAGE> 79
- ------------
Virginia Municipals Portfolio
Portfolio of Investments - February 29, 1996
(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 -- 6.7%
NR A- $2,000 Lynchburgh, IDA, Randolph-
Macon Woman's College,
5.875%, 9/1/23 $ 2,042,980
Baa NR 2,220 Rockingham County, IDA,
Bridgewater College,
5.95%, 10/1/13 2,231,122
NR A- 1,570 Virginia College Building
Authority, Hampden-Sydney
College, 6.60%, 9/1/16 1,675,708
NR A+ 400 Virginia College Building
Authority, Hampton
University, 6.50%, 4/1/08 430,880
NR A+ 1,000 Virginia College Building
Authority, Hampton
University, 5.75%, 4/1/14 1,011,210
NR BBB- 1,150 Virginia College Building
Authority, Marymount
University, 7.00%, 7/1/12 1,236,791
NR BBB- 2,200 Virginia College Building
Authority, Marymount
University, 7.00%, 7/1/22 2,356,376
Aa AA 1,500 Virginia College Building
Authority, Washington and
Lee University, 5.80%,
1/1/24 1,513,260
-----------
$ 12,498,327
-----------
ESCROWED -- 5.9%
Aaa NR $1,000 Arlington, IDA, Arlington
Hospital, 7.125%, 9/1/21 $ 1,152,640
A NR 500 Augusta, IDA, Augusta
Hospital, 7.00%, 9/1/21 571,970
NR NR 600 Prince William County,
IDA, Virginia Commuter
Parking Facilities Lease,
7.25%, 3/1/11 675,546
NR A+ 1,700 Virginia Beach, Virginia
Water and Sewer System,
6.625%, 2/1/17 1,916,291
A NR 1,055 Virginia Education Loan
Authority, (AMT), 6.15%,
9/1/09 1,149,939
Aaa NR 5,500 Virginia Education Loan
Authority, (AMT), 5.55%,
9/1/10 (2) 5,665,715
-----------
$ 11,132,101
-----------
GENERAL
OBLIGATIONS -- 4.7%
Aaa AAA $1,000 Fairfax County, 5.625%,
6/1/14 $ 1,011,390
Baa1 A 2,000 Commonwealth of Puerto
Rico, 5.40%, 7/1/25 1,893,060
Baa1 A 350 Commonwealth of Puerto
Rico, 0%, 7/1/04 230,542
A1 AA 500 City of Richmond, 6.25%,
1/5/18 519,125
Aa AA 1,000 Roanoke County, 5.00%,
6/1/21 925,700
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
NR NR 4,000 Virgin Island, 7.25%,
10/1/18 4,237,600
-----------
$ 8,817,417
-----------
HEALTHCARE -- 0.2%
NR NR $ 365 Covington-Allegheny
County, IDA, Beverly
Enterprises, 9.375%,
9/1/01 $ 413,333
-----------
HOSPITALS -- 16.7%
A NR $3,800 Albermarle County, IDA,
Martha Jefferson Hospital,
5.50%, 10/1/20 $ 3,637,094
A NR 380 Chesapeake Hospital
Authority, Chesapeake
General Hospital, 7.60%,
7/1/00 417,164
Aa AA- 2,910 Fairfax County, IDA, Inova
Health System Hospitals,
5.00%, 8/15/14 2,694,893
Aa AA- 2,000 Fairfax County, IDA, Inova
Health System Hospitals,
5.00%, 8/15/15 1,836,660
A A 1,250 City of Martinsville, IDA,
Memorial Hospital of
Martinsville and Henry
County, 7.00%, 7/1/06 1,324,000
NR A- 2,000 Medical College of Hampton
Roads, 6.875%, 11/15/11 2,154,900
Aa AA 1,000 Norfolk County, IDA,
Sentara Health System,
5.50%, 11/1/17 974,000
Aa AA 3,000 Norfolk County, IDA,
Sentara Health System,
5.00%, 11/1/20 2,712,480
Aa AA- 3,500 Peninsula Ports Authority
of Virginia, Riverside
Health System, 6.625%,
7/1/10 3,747,485
A NR 2,400 Prince William County,
IDA, Potomac Hospital,
6.85%, 10/1/25 2,562,096
Aa AA 4,000 Virginia Beach Development
Authority, Sentara Bayside
Hospital, 6.60%, 11/1/09 4,253,560
A NR 1,060 Washington County, IDA,
Johnston Memorial
Hospital, 7.00%, 7/1/22 1,137,666
A NR 1,000 Washington County, IDA,
Johnston Memorial
Hospital, 6.25%, 7/1/06 1,054,340
A NR 2,000 Washington County, IDA,
Johnston Memorial
Hospital, 6.00%, 7/1/14 2,006,300
-----------
$ 30,512,638
-----------
HOUSING -- 11.6%
NR AAA $1,250 Fairfax County
Redevelopment and Housing
Authority, Multi Family
Mortgage Revenue, (FHA),
7.00%, 5/1/26 $ 1,327,238
</TABLE>
79
<PAGE> 80
- ------------
- --------------------------------------------------------------------------------
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)
NR AAA 1,000 Hampton Redevelopment and
Housing Authority, Senior
Living, (GNMA), 6.00%,
1/20/26 1,000,800
NR AAA 200 Harrisonburg Redevelopment
and Housing Authority,
Multi Family Mortgage
Revenue, Loan-Battery
Heights, (GNMA), 7.375%,
11/20/28 211,138
Aa1 AA 5,000 Virginia HDA, Multi Family
Mortgage Revenue, 6.75%,
7/1/21 5,136,650
Aa AA 3,500 Virginia HDA, Multi Family
Mortgage Revenue, 7.05%,
5/1/18 3,722,285
Aa1 A 2,350 Virginia HDA, Single
Family Mortgage Revenue,
7.10%, 1/1/17 2,501,693
Aa1 NR 2,500 Virginia HDA, Single
Family Mortgage Revenue,
6.85%, 1/1/15 2,630,825
Aa1 A 3,000 Virginia HDA, Single
Family Mortgage Revenue,
7.10%, 1/1/22 3,184,050
Aa NR 1,900 Virginia HDA, Single
Family Mortgage Revenue,
Variable, 7/1/04 (1) 1,947,385
-----------
$ 21,662,064
-----------
INDUSTRIAL DEVELOPMENT
REVENUE -- 10.2%
Aa NR $2,190 City of Chesapeake,
Cargill Inc., 5.875%,
3/1/13 $ 2,220,967
A2 A+ 3,000 City of Giles, Hoechst
Celanese Corporation,
(AMT), 5.95%, 12/1/25 2,970,750
A2 A+ 1,000 City of Giles, Hoechst
Celanese Corporation,
(AMT), 6.625%, 12/1/22 1,058,620
A2 A 2,000 Henrico County, Browining
Ferris Inc., 5.45%,
10/1/14 1,961,840
A1 A- 4,000 Isle of Wright County,
Union Camp Corporation,
(AMT), 6.55%, 4/1/24 4,204,400
Baa3 BBB 5,520 West Point, Chesapeake
Corporation, (AMT),
6.375%, 3/1/19 5,665,452
Baa3 BBB 980 West Point, Chesapeake
Corporation, 6.25%, 3/1/19 1,007,832
-----------
$ 19,089,861
-----------
INSURED GENERAL
OBLIGATION -- 1.0%
Aaa AAA $2,000 Loudon County, (MBIA),
5.25%, 1/1/30 $ 1,879,740
-----------
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- --------------------------------------------------------- -------
<S> <C> <C> <C> <C>
INSURED HOSPITALS -- 8.7%
Aaa AAA $1,665 City of Arlington, IDA,
The Arlington Hospital,
(AMBAC), 5.00% , 9/1/21 $ 1,505,177
Aaa AAA 5,000 Augusta County, IDA,
Augusta Hospital
Corporation, (AMBAC),
5.125%, 9/1/21 4,711,900
Aaa AAA 2,500 Chesapeake Hospital
Authority, Chesapeake
General Hospital, (MBIA),
5.25%, 7/1/18 2,379,900
Aaa AAA 2,000 Hanover County, Bonsecour
Health System, (MBIA),
5.50%, 8/15/25 1,929,340
Aaa AAA 1,000 Norfolk County, IDA,
Children's Hospital of the
King's Daughters Obligated
Group, (AMBAC), 5.50%,
6/1/20 967,420
Aaa AAA 1,000 City of Roanoke, IDA,
Franklin Memorial Hospital
and St. Albans Psychiatric
Hospital, (MBIA), 5.25%,
7/1/25 942,930
Aaa AAA 2,250 Virginia Beach, IDA,
Virginia Beach Memorial
Hospital, (AMBAC), 5.125%,
2/15/18 2,137,657
Aaa AAA 1,700 Winchester, IDA,
Winchester Medical Center,
(AMBAC), Variable, 1/1/08
(1) 1,722,678
-----------
$ 16,297,002
-----------
INSURED LEASE -- 0.5%
Aaa AAA $1,000 Riverside Regional Jail
Authority, (MBIA), 6.00%,
7/1/25 $ 1,028,880
-----------
INSURED TRANSPORTATION -- 5.6%
Aaa AAA $6,500 Metropolitan Washington
Airports Authority,
(MBIA), (AMT), 5.75%,
10/1/20 $ 6,474,195
Aaa AAA 3,000 Northern Virginia
Transportation District
Commission, (CGIC), 5.25%,
7/1/10 2,955,270
Aaa AAA 1,000 Richmond Metropolitan
Authority Expressway,
(FGIC), 6.375%, 7/15/16 1,057,240
-----------
$ 10,486,705
-----------
INSURED WATER & SEWER -- 4.9%
Aaa AAA $4,000 Hanover County Water and
Sewer Authority, (MBIA),
5.25%, 2/1/26 (2) $ 3,770,080
Aaa AAA 2,000 Loudon County Sanitation
Authority, (MBIA), 5.25%,
1/1/25 1,900,260
</TABLE>
80
<PAGE> 81
- ------------
- --------------------------------------------------------------------------------
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 WATER & SEWER
- (CONTINUED)
Aaa AAA 1,000 Norfolk County Water and
Sewer Authority, (AMBAC),
5.25%, 11/1/13 967,520
Aaa AAA 1,000 Roanoke County Water and
Sewer Authority, (FGIC),
5.00%, 7/1/21 915,450
Aaa AAA 1,750 Upper Occoquan Sewage
Authority, (FGIC), 5.00%,
7/1/15 1,642,568
-----------
$ 9,195,878
-----------
LEASE/CERTIFICATE OF
PARTICIPATION - 7.5%
Aa AA $1,750 Fairfax County Economic
Development Authority,
Lease, Government Center
Properties, 5.25%,
11/15/18 $ 1,635,498
Aa AA 3,200 Fairfax County Economic
Development Authority,
Lease, Government Center
Properties, 5.50%, 5/15/14 3,138,432
A NR 3,000 Rockingham and
Harrisonburg Counties,
Harrisonburg Redevelopment
and Housing Authority,
Lease, 6.50%, 9/1/14 3,138,990
Aa AA 2,000 Henrico County, IDA,
Lease, 7.00%, 8/1/13 2,294,520
Aa AA 2,250 Henrico County, IDA,
Lease, 7.125%, 8/1/21 2,583,855
NR NR 1,250 King George County, Lease,
7.00%, 12/15/12 1,317,612
-----------
$ 14,108,907
-----------
LIFE CARE - 1.1%
NR NR $2,000 Loudon County, IDA,
Falcons Landing, 8.75%,
11/1/24 $ 2,061,500
-----------
SOLID WASTE - 1.7%
A1 A+ $ 915 Fairfax County Economic
Development Authority,
Ogden Martin Systems of
Fairfax Incorporated,
(AMT), 7.75%, 2/1/11 $ 1,002,840
Baa1 A- 2,250 Southeastern Public
Service Authority, Solid
Waste Systems, (AMT),
6.00%, 7/1/13 2,181,488
-----------
$ 3,184,328
-----------
SPECIAL TAX REVENUE
- 6.3%
Baa1 A $1,375 Commonwealth of Puerto
Rico Highway &
Transportation Authority,
5.50%, 7/1/19 $ 1,312,355
Baa1 A 2,200 Commonwealth of Puerto
Rico Highway &
Transportation Authority,
5.25%, 7/1/20 2,043,118
<CAPTION>
RATINGS
(UNAUDITED)
- ----------------- PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Baa1 A 500 Commonwealth of Puerto
Rico Highway &
Transportation Authority,
5.00%, 7/1/22 445,685
Aa AA 1,000 Virginia State
Transportation Board
Revenue, US Route 28,
Variable, 4/1/18 (1) 1,161,620
Aa AA 2,800 Virginia State
Transportation Board
Revenue, US Route 28,
5.25%, 5/15/19 2,659,412
Aa AA 4,000 Virginia State
Transportation Board
Revenue, US Route 28,
6.50%, 4/1/18 4,239,000
-----------
$ 11,861,190
-----------
TRANSPORTATION - 0.2%
NR BBB $ 400 Charlotesville-Albermarle
VA Airport Authority,
(AMT), 6.125%, 12/1/13 $ 399,308
-----------
UTILITIES - 1.0%
Baa1 A- $3,000 Commonwealth of Puerto
Rico Electric Authority
Power, 0%, 7/1/17 $ 846,990
NR NR 1,000 Virgin Islands Water and
Power Authority, 7.40%,
7/1/11 1,061,800
-----------
$ 1,908,790
-----------
WATER & SEWER REVENUE
- 5.6%
Aa AA- $2,250 Fairfax County Virginia
Water Authority, 5.75%,
4/1/29 $ 2,251,013
Aa AA- 1,000 Fairfax County Virginia
Water Authority, Variable,
4/1/29 (1) 1,008,130
Aa AA- 4,095 Fairfax County Virginia
Water Authority, 5.00%,
4/1/16 3,828,948
NR AA 1,655 Virginia Resource
Authority, Hopewell Waste
Water, (AMT), 6.00%,
10/1/25 1,705,047
NR AA 1,880 Virginia Resource
Authority, Campbell
Utilities, 5.125%,
10/1/19 1,770,846
-----------
$ 10,563,984
-----------
TOTAL TAX-EXEMPT
INVESTMENTS
(IDENTIFIED COST,
$174,878,592) $187,101,953
===========
</TABLE>
(1) The above security has been issued as an inverse floater bond.
(2) Security segregated to cover margin requirements on open financial futures
contracts.
81
<PAGE> 82
- ------------
- --------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
The Portfolio invests primarily in debt securities issued by Virginia
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 February 29, 1996, 20.8% 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 1.6% to 10.9% of total investments.
See notes to financial statements
82
<PAGE> 83
- ------------
Municipals Portfolios
Financial Statements
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALABAMA ARKANSAS GEORGIA KENTUCKY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments --
Identified cost $106,424,866 $74,234,823 $111,816,704 $132,011,225
Unrealized appreciation 5,470,697 3,204,377 6,048,639 5,756,878
------------ ----------- ------------ ------------
Total investments, at value (Note 1A) $111,895,563 $77,439,200 $117,865,343 $137,768,103
Cash 3,775,216 502 728,744 356
Receivable for daily variation margin on open
financial futures contracts (Note 1E) 14,429 9,619 11,056 --
Receivable for investments sold 3,274,546 1,332,514 -- 1,826,684
Interest receivable 1,747,318 1,117,095 1,774,984 2,103,721
Deferred organization expenses (Note 1D) 2,976 4,427 4,418 2,498
------------ ----------- ------------ ------------
Total assets $120,710,048 $79,903,357 $120,384,545 $141,701,362
------------ ----------- ------------ ------------
LIABILITIES:
Demand note payable (Note 5) $ -- $ 446,000 $ -- $ 805,000
Payable for when-issued securities (Note 1F) 3,807,358 -- -- --
Payable for daily variation margin on open financial
futures contracts (Note 1E) -- -- -- 2,250
Payable to affiliate --
Trustees' fees 1,344 1,038 1,344 1,344
Accrued expenses 6,038 5,267 3,909 6,198
------------ ----------- ------------ ------------
Total liabilities $ 3,814,740 $ 452,305 $ 5,253 $ 814,792
------------ ----------- ------------ ------------
NET ASSETS applicable to investors' interest in
Portfolio $116,895,308 $79,451,052 $120,379,292 $140,886,570
============== ============ ============== ==============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $111,427,800 $76,248,802 $114,333,843 $135,130,145
Unrealized appreciation of investments and financial
futures contracts (computed on the basis of
identified cost) 5,467,508 3,202,250 6,045,449 5,756,425
------------ ----------- ------------ ------------
Total $116,895,308 $79,451,052 $120,379,292 $140,886,570
============== ============ ============== ==============
</TABLE>
See notes to financial statements
83
<PAGE> 84
- ------------
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ----------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments --
Identified cost $34,129,415 $109,820,786 $86,186,683 $177,222,075
Unrealized appreciation 747,074 4,526,239 4,860,814 11,697,650
----------- ------------ ----------- --------------
Total investments, at value (Note 1A) $34,876,489 $114,347,025 $91,047,497 $188,919,725
Cash 629 660,973 259,339 886,858
Receivable for daily variation margin on open
financial futures contracts (Note 1E) -- 14,429 9,214 --
Receivable for investments sold 729,029 623,137 2,325,006 3,010,676
Interest receivable 632,342 1,511,986 1,115,082 2,814,993
Deferred organization expenses (Note 1D) 4,022 3,108 2,663 6,645
----------- ------------ ----------- --------------
Total assets $36,242,511 $117,160,658 $94,758,801 $195,638,897
----------- ------------ ----------- --------------
LIABILITIES:
Demand note payable (Note 5) $ 671,000 $ -- $ -- $ --
Payable for investments purchased -- 795,923 2,619,433 2,355,275
Payable for daily variation margin on open
financial futures contracts (Note 1E) 1,625 -- -- 11,625
Payable to affiliate --
Trustees' fees 255 1,344 1,038 1,751
Accrued expenses 4,654 6,518 6,307 4,772
----------- ------------ ----------- --------------
Total liabilities $ 677,534 $ 803,785 $ 2,626,778 $ 2,373,423
----------- ------------ ----------- --------------
NET ASSETS applicable to investors' interest in
Portfolio $35,564,977 $116,356,873 $92,132,023 $193,265,474
============ ============== ============ ==================
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $34,800,598 $111,833,824 $87,250,124 $181,454,400
Unrealized appreciation of investments and
financial futures contracts (computed on the
basis of identified cost) 764,379 4,523,049 4,881,899 11,811,074
----------- ------------ ----------- --------------
Total $35,564,977 $116,356,873 $92,132,023 $193,265,474
============ ============== ============ ==================
</TABLE>
See notes to financial statements
84
<PAGE> 85
- ------------
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ -------------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments --
Identified cost $133,580,135 $ 63,721,739 $55,218,447 $174,878,592
Unrealized appreciation 6,108,340 3,689,731 2,292,368 12,223,361
------------ -------------- ----------- ------------
Total investments, at value (Note 1A) $139,688,475 $ 67,411,470 $57,510,815 $187,101,953
Cash 843,197 411 441 657
Receivable for daily variation margin on open
financial futures contracts (Note 1E) -- -- 5,528 --
Receivable for investments sold 1,228,248 -- 15,224 1,082,087
Interest receivable 1,901,206 920,435 963,338 3,338,993
Deferred organization expenses (Note 1D) 3,994 4,259 4,631 5,414
------------ -------------- ----------- ------------
Total assets $143,665,120 $ 68,336,575 $58,499,977 $191,529,104
------------ -------------- ----------- ------------
LIABILITIES:
Demand note payable (Note 5) $ -- $ 3,007,000 $ 86,000 $ 39,000
Payable for investments purchased 1,246,342 -- -- --
Payable for when-issued securities (Note 1F) -- 2,872,768 -- --
Payable for daily variation margin on open
financial futures contracts (Note 1E) 2,313 4,265 -- 3,062
Payable to affiliate --
Trustees' fees 1,344 1,038 1,038 1,752
Accrued expenses 7,232 6,686 5,882 7,676
------------ -------------- ----------- ------------
Total liabilities $ 1,257,231 $ 5,891,757 $ 92,920 $ 51,490
------------ -------------- ----------- ------------
NET ASSETS applicable to investors' interest in
Portfolio $142,407,889 $ 62,444,818 $58,407,057 $191,477,614
============== ================== ============ ==============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $136,300,014 $ 58,759,352 $56,116,284 $179,254,870
Unrealized appreciation of investments and
financial futures contracts (computed on
the basis of identified cost) 6,107,875 3,685,466 2,290,773 12,222,744
------------ -------------- ----------- ------------
Total $142,407,889 $ 62,444,818 $58,407,057 $191,477,614
============== ================== ============ ==============
</TABLE>
See notes to financial statements
85
<PAGE> 86
- ------------
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
Six Months Ended February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALABAMA ARKANSAS GEORGIA KENTUCKY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income (Note 1B) $ 3,499,416 $ 2,354,496 $ 3,667,739 $ 4,257,937
----------- ----------- ----------- -----------
Expenses --
Investment adviser fee (Note 2) $ 235,755 $ 144,914 $ 246,008 $ 296,998
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 3,929 2,982 3,929 3,929
Custodian fee (Note 2) 29,520 21,798 33,164 37,636
Legal and accounting services 24,042 21,442 24,025 24,042
Amortization of organization expenses (Note 1D) 783 750 1,093 659
Miscellaneous 5,882 10,772 3,873 7,909
----------- ----------- ----------- -----------
Total expenses $ 299,911 $ 202,658 $ 312,092 $ 371,173
Deduct reduction of custodian fee (Note 2) 20,598 6,022 33,164 21,191
----------- ----------- ----------- -----------
Net expenses $ 279,313 $ 196,636 $ 278,928 $ 349,982
----------- ----------- ----------- -----------
Net investment income $ 3,220,103 $ 2,157,860 $ 3,388,811 $ 3,907,955
----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 1,384,817 $ 399,919 $ 618,593 $ 17,989
Financial futures contracts (92,720) (69,573) 141,995 (164,116)
----------- ----------- ----------- -----------
Net realized gain (loss) on investments $ 1,292,097 $ 330,346 $ 760,588 $ (146,127)
----------- ----------- ----------- -----------
Change in unrealized appreciation (depreciation) --
Investments $ 1,601,256 $ 1,659,720 $ 2,619,264 $ 3,749,161
Financial futures contracts 59,845 42,896 (3,190) 78,338
----------- ----------- ----------- -----------
Net unrealized appreciation $ 1,661,101 $ 1,702,616 $ 2,616,074 $ 3,827,499
----------- ----------- ----------- -----------
Net realized and unrealized gain on investments $ 2,953,198 $ 2,032,962 $ 3,376,662 $ 3,681,372
----------- ----------- ----------- -----------
Net increase in net assets from operations $ 6,173,301 $ 4,190,822 $ 6,765,473 $ 7,589,327
============ ============ ============ ============
</TABLE>
See notes to financial statements
86
<PAGE> 87
- ------------
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
Six Months Ended February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income (Note 1B) $ 1,067,090 $ 3,456,399 $ 2,767,249 $ 5,814,376
----------- ----------- ----------- --------------
Expenses --
Investment adviser fee (Note 2) $ 40,694 $ 230,735 $ 175,384 $ 421,159
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 789 3,929 2,982 5,190
Custodian fee (Note 2) 13,110 32,294 26,614 51,006
Legal and accounting services 21,342 21,242 21,942 28,642
Amortization of organization expenses (Note 1D) 675 757 701 1,678
Miscellaneous 6,854 8,709 13,137 13,903
----------- ----------- ----------- --------------
Total expenses $ 83,464 $ 297,666 $ 240,760 $ 521,578
----------- ----------- ----------- --------------
Deduct --
Preliminary reduction of investment adviser fee
(Note 2) $ 20,233 $ -- $ -- $ --
Reduction of custodian fee (Note 2) 12,110 14,973 6,284 47,892
----------- ----------- ----------- --------------
Total $ 32,343 $ 14,973 $ 6,284 $ 47,892
----------- ----------- ----------- --------------
Net expenses $ 51,121 $ 282,693 $ 234,476 $ 473,686
----------- ----------- ----------- --------------
Net investment income $ 1,015,969 $ 3,173,706 $ 2,532,773 $ 5,340,690
----------- ----------- ----------- --------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 322,880 $ 1,365,190 $ 866,948 $ 1,150,992
Financial futures contracts (269,296) (92,720) 85,046 82,628
----------- ----------- ----------- --------------
Net realized gain on investments $ 53,584 $ 1,272,470 $ 951,994 $ 1,233,620
----------- ----------- ----------- --------------
Change in unrealized appreciation --
Investments $ 486,163 $ 2,553,341 $ 1,585,354 $ 4,416,493
Financial futures contracts 32,556 59,843 21,085 113,424
----------- ----------- ----------- --------------
Net unrealized appreciation $ 518,719 $ 2,613,184 $ 1,606,439 $ 4,529,917
----------- ----------- ----------- --------------
Net realized and unrealized gain on
investments $ 572,303 $ 3,885,654 $ 2,558,433 $ 5,763,537
----------- ----------- ----------- --------------
Net increase in net assets from
operations $ 1,588,272 $ 7,059,360 $ 5,091,206 $ 11,104,227
============ ============ ============ ==================
</TABLE>
See notes to financial statements
87
<PAGE> 88
- ------------
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
Six Months Ended February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income (Note 1B) $ 4,221,056 $ 1,908,397 $ 1,742,068 $ 5,788,249
----------- -------------- ----------- -----------
Expenses --
Investment adviser fee (Note 2) $ 298,353 $ 103,031 $ 93,209 $ 415,579
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 3,929 2,982 2,982 5,191
Custodian fee (Note 2) 39,584 18,425 13,308 52,462
Interest expense (Note 5) -- 26,653 -- --
Legal and accounting services 23,942 21,442 21,342 28,142
Amortization of organization expenses (Note
1D) 1,043 719 1,176 1,377
Miscellaneous 10,603 3,604 5,544 10,658
----------- -------------- ----------- -----------
Total expenses $ 377,454 $ 176,856 $ 137,561 $ 513,409
Deduct reduction of custodian fee (Note 2) 17,373 12,773 -- 34,811
----------- -------------- ----------- -----------
Net expenses $ 360,081 $ 164,083 $ 137,561 $ 478,598
----------- -------------- ----------- -----------
Net investment income $ 3,860,975 $ 1,744,314 $ 1,604,507 $ 5,309,651
----------- -------------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) --
Investment transactions (identified cost
basis) $ (16,998) $ 276,104 $ 32,732 $ 449,257
Financial futures contracts (93,012) 53,208 (51,558) 156,136
----------- -------------- ----------- -----------
Net realized gain (loss) on investments $ (110,010) $ 329,312 $ (18,826) $ 605,393
----------- -------------- ----------- -----------
Change in unrealized appreciation
(depreciation) --
Investments $ 3,458,971 $ 1,345,620 $ 1,763,380 $ 4,829,199
Financial futures contracts 38,392 (4,265) 32,944 (617)
----------- -------------- ----------- -----------
Net unrealized appreciation $ 3,497,363 $ 1,341,355 $ 1,796,324 $ 4,828,582
----------- -------------- ----------- -----------
Net realized and unrealized gain on
investments $ 3,387,353 $ 1,670,667 $ 1,777,498 $ 5,433,975
----------- -------------- ----------- -----------
Net increase in net assets from
operations $ 7,248,328 $ 3,414,981 $ 3,382,005 $10,743,626
============ ================== ============ ============
</TABLE>
See notes to financial statements
88
<PAGE> 89
- ------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Six Months Ended February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALABAMA ARKANSAS GEORGIA KENTUCKY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 3,220,103 $ 2,157,860 $ 3,388,811 $ 3,907,955
Net realized gain (loss) on investment
transactions 1,292,097 330,346 760,588 (146,127)
Change in unrealized appreciation of
investments 1,661,101 1,702,616 2,616,074 3,827,499
------------ ----------- ------------ ------------
Net increase in net assets from operations $ 6,173,301 $ 4,190,822 $ 6,765,473 $ 7,589,327
------------ ----------- ------------ ------------
Capital transactions --
Contributions $ 3,505,238 $ 1,732,586 $ 2,339,719 $ 3,649,943
Withdrawals (11,269,284) (8,007,358) (11,674,567) (15,621,326)
------------ ----------- ------------ ------------
Decrease in net assets resulting from
capital transactions $ (7,764,046) (6,274,772) $ (9,334,848) $(11,971,383)
------------ ----------- ------------ ------------
Net decrease in net assets $ (1,590,745) $(2,083,950) $ (2,569,375) $ (4,382,056)
NET ASSETS:
At beginning of period 118,486,053 81,535,002 122,948,667 145,268,626
------------ ----------- ------------ ------------
At end of period $116,895,308 $79,451,052 $120,379,292 $140,886,570
============ =========== ============ ============
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ----------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 1,015,969 $ 3,173,706 $ 2,532,773 $ 5,340,690
Net realized gain on investment transactions 53,584 1,272,470 951,994 1,233,620
Change in unrealized appreciation of
investments 518,719 2,613,184 1,606,439 4,529,917
----------- ------------ ----------- ------------
Net increase in net assets from operations $ 1,588,272 $ 7,059,360 $ 5,091,206 $ 11,104,227
----------- ------------ ----------- ------------
Capital transactions --
Contributions $ 2,204,992 $ 4,557,915 $ 2,640,896 $ 6,719,329
Withdrawals (2,536,966) (10,264,578) (8,762,182) (19,736,806)
----------- ------------ ----------- ------------
Decrease in net assets resulting from
capital transactions $ (331,974) $ (5,706,663) $(6,121,286) $(13,017,477)
----------- ------------ ----------- ------------
Net increase (decrease) in net assets $ 1,256,298 $ 1,352,697 $(1,030,080) $ (1,913,250)
NET ASSETS:
At beginning of period 34,308,679 115,004,176 93,162,103 195,178,724
----------- ------------ ----------- ------------
At end of period $35,564,977 $116,356,873 $92,132,023 $193,265,474
=========== ============ =========== ============
</TABLE>
See notes to financial statements
89
<PAGE> 90
- ------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Six Months Ended February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ -------------- ----------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 3,860,975 $ 1,744,314 $ 1,604,507 $ 5,309,651
Net realized gain (loss) on investment
transactions (110,010) 329,312 (18,826) 605,393
Change in unrealized appreciation of
investments 3,497,363 1,341,355 1,796,324 4,828,582
------------ ----------- ----------- ------------
Net increase in net assets from operations $ 7,248,328 $ 3,414,981 $ 3,382,005 $ 10,743,626
------------ ----------- ----------- ------------
Capital transactions --
Contributions $ 3,445,068 $ 3,171,856 $ 2,016,075 $ 5,864,266
Withdrawals (14,676,428) (5,553,687) (5,664,326) (16,878,200)
------------ ----------- ----------- ------------
Decrease in net assets resulting from
capital transactions $(11,231,360) (2,381,831) $(3,648,251) $(11,013,934)
------------ ----------- ----------- ------------
Net increase (decrease) in net assets $ (3,983,032) $ 1,033,150 $ (266,246) $ (270,308)
NET ASSETS:
At beginning of period 146,390,921 61,411,668 58,673,303 191,747,922
------------ ----------- ----------- ------------
At end of period $142,407,889 $ 62,444,818 $58,407,057 $191,477,614
============ =========== =========== ============
</TABLE>
See notes to financial statements
90
<PAGE> 91
- ------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended August 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALABAMA ARKANSAS GEORGIA KENTUCKY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 6,676,427 $ 4,614,351 $ 7,291,242 $ 8,179,915
Net realized loss on investment transactions (3,373,448) (2,517,820) (7,312,379) (2,715,132)
Change in unrealized appreciation of
investments 5,884,230 3,464,139 6,679,653 4,942,400
------------ ------------ ------------ ------------
Net increase in net assets from operations $ 9,187,209 $ 5,560,670 $ 6,658,516 $ 10,407,183
------------ ------------ ------------ ------------
Capital transactions --
Contributions $ 15,271,028 $ 7,773,910 $ 12,224,959 $ 13,579,954
Withdrawals (23,135,575) (14,716,313) (33,658,605) (23,928,447)
------------ ------------ ------------ ------------
Decrease in net assets resulting from
capital transactions $ (7,864,547) (6,942,403) $(21,433,646) $(10,348,493)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets $ 1,322,662 $ (1,381,733) $(14,775,130) $ 58,690
NET ASSETS:
At beginning of year 117,163,391 82,916,735 137,723,797 145,209,936
------------ ------------ ------------ ------------
At end of year $118,486,053 $ 81,535,002 $122,948,667 $145,268,626
============== ============= ============== ==============
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ----------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 1,975,712 $ 6,659,328 $ 5,326,719 $ 11,250,399
Net realized loss on investment transactions (1,669,621) (3,315,017) (3,038,940) (9,105,062)
Change in unrealized appreciation of
investments 1,664,246 4,913,566 5,471,264 9,060,016
----------- ------------ ----------- --------------
Net increase in net assets from operations $ 1,970,337 $ 8,257,877 $ 7,759,043 $ 11,205,353
----------- ------------ ----------- --------------
Capital transactions --
Contributions $ 6,817,148 $ 14,770,279 $ 8,450,749 $ 18,834,488
Withdrawals (5,902,141) (25,879,697) (18,215,122) (34,633,470)
----------- ------------ ----------- --------------
Increase (decrease) in net assets resulting
from capital transactions $ 915,007 $(11,109,418) $(9,764,373) $(15,798,982)
----------- ------------ ----------- --------------
Net increase (decrease) in net assets $ 2,885,344 $ (2,851,541) $(2,005,330) $ (4,593,629)
NET ASSETS:
At beginning of year 31,423,335 117,855,717 95,167,433 199,772,353
----------- ------------ ----------- --------------
At end of year $34,308,679 $115,004,176 $93,162,103 $195,178,724
============ ============== ============ ==================
</TABLE>
See notes to financial statements
91
<PAGE> 92
- ------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended August 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ -------------- ----------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 8,186,774 $ 3,526,297 $ 3,284,148 $ 11,081,732
Net realized loss on investment transactions (4,370,692) (4,027,763) (1,911,797) (7,610,652)
Change in unrealized appreciation of
investments 7,371,961 4,266,658 2,627,149 10,279,680
------------ -------------- ----------- ------------
Net increase in net assets from operations $ 11,188,043 $ 3,765,192 $ 3,999,500 $ 13,750,760
------------ -------------- ----------- ------------
Capital transactions --
Contributions $ 12,298,876 $ 9,608,721 $ 7,946,656 $ 24,173,920
Withdrawals (30,215,219) (14,226,934) (9,768,536) (40,695,946)
------------ -------------- ----------- ------------
Decrease in net assets resulting from
capital transactions $(17,916,343) $ (4,618,213) $(1,821,880) $(16,522,026)
------------ -------------- ----------- ------------
Net increase (decrease) in net assets $ (6,728,300) $ (853,021) $ 2,177,620 $ (2,771,266)
NET ASSETS:
At beginning of year 153,119,221 62,264,689 56,495,683 194,519,188
------------ -------------- ----------- ------------
At end of year $146,390,921 $ 61,411,668 $58,673,303 $191,747,922
============== ================= ============ ==============
</TABLE>
See notes to financial statements
92
<PAGE> 93
- ------------
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALABAMA PORTFOLIO ARKANSAS PORTFOLIO
-------------------------------------------------------- -----------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, ------------------------------------- FEBRUARY 29, --------------------------
1996 AUGUST 31, AUGUST 31, SEPT. 30, 1996 AUGUST 31, AUGUST 31,
(UNAUDITED) 1995 1994* 1993** (UNAUDITED) 1995 1994***
---------------- ---------- ---------- ----------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
RATIOS (As a
percentage of
average
daily net
assets)++:
Net expenses (1) 0.50%+ 0.47% 0.44%+ 0.25%+ 0.50%+ 0.46% 0.24%+
Net investment
income 5.42%+ 5.77% 5.37%+ 5.52%+ 5.33%+ 5.69% 5.60%+
Portfolio Turnover 24% 51% 26% 10% 5% 23% 16%
NET ASSETS, end of
year (000 omitted) $116,895 $118,486 $117,163 $83,628 $ 79,451 $81,535 $ 82,917
</TABLE>
++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>
<S> <C> <C>
RATIOS (As a percentage of average daily net assets):
Expenses (1) 0.35%+ 0.43%+
Net investment
income 5.42%+ 5.41%+
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
-------------------------------------------------------- -------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, ------------------------------------- FEBRUARY 29, ----------------------------------------
1996 AUGUST 31, AUGUST 31, SEPT. 30, 1996 AUGUST 31, AUGUST 31, SEPT. 30,
(UNAUDITED) 1995 1994* 1993** (UNAUDITED) 1995 1994* 1993**
---------------- ---------- ---------- ----------- ---------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RATIOS
(As a
percentage
of
average
daily
net
assets):
Net
expenses
(1) 0.51%+ 0.46% 0.44%+ 0.40%+ 0.51%+ 0.49% 0.46%+ 0.40%+
Net
investment
income 5.53%+ 5.73% 5.37%+ 5.37%+ 5.41%+ 5.75% 5.39%+ 5.40%+
Portfolio
Turnover 11% 48% 45% 35% 10% 30% 21% 11%
NET
ASSETS,
end
of
year
(000
omitted) $116,895 $122,949 $137,724 $ 119,311 $140,887 $ 145,269 $145,210 $ 117,936
</TABLE>
(1) The annualized expense ratios for the six months ended February 29, 1996
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the three periods ended August
31, 1995 and 1994 and September 30, 1993 have not been adjusted to reflect
this change.
+ Annualized.
* For the eleven months ended August 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
*** For the seven months ended August 31, 1994.
See notes to financial statements
93
<PAGE> 94
- ------------
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOUISIANA PORTFOLIO MARYLAND PORTFOLIO
------------------------------------------ -------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, ----------------------- FEBRUARY 29, ----------------------------------------
1996 AUGUST 31, AUGUST 31, 1996 AUGUST 31, AUGUST 31, SEPT. 30,
(UNAUDITED) 1995 1994*** (UNAUDITED) 1995 1994* 1993**
---------------- ---------- ---------- ---------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
RATIOS (As a
percentage of
average
daily net
assets)++:
Net expenses (1) 0.36%+ 0.22% 0.14%+ 0.51%+ 0.47% 0.44%+ 0.36%+
Net investment
income 5.75%+ 6.06% 5.86%+ 5.45%+ 5.79% 5.44%+ 5.41%+
Portfolio Turnover 56% 46% 21% 12% 30% 41% 34%
NET ASSETS, end of
year (000 omitted) $ 35,565 $ 34,309 $ 31,423 $116,357 $ 115,004 $117,856 $94,213
</TABLE>
++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>
<S> <C> <C> <C> <C>
RATIOS (As a
percentage of
average daily net
assets):
Expenses (1) 0.47%+ 0.33% 0.33%+ 0.38%+
Net investment
income 5.64%+ 5.95% 5.67%+ 5.39%+
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MISSOURI PORTFOLIO NORTH CAROLINA
-------------------------------------------------------- -------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, ------------------------------------- FEBRUARY 29, ----------------------------------------
1996 AUGUST 31, AUGUST 31, SEPT. 30, 1996 AUGUST 31, AUGUST 31, SEPT. 30,
(UNAUDITED) 1995 1994* 1993** (UNAUDITED) 1995 1994* 1993**
---------------- ---------- ---------- ----------- ---------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RATIOS
(As a
percentage
of
average
daily
net
assets):
Net
expenses
(1) 0.52%+ 0.48% 0.45%+ 0.40%+ 0.53%+ 0.48% 0.46%+ 0.43%+
Net
investment
income 5.43%+ 5.76% 5.36%+ 5.36%+ 5.44%+ 5.78% 5.40%+ 5.43%+
Portfolio
Turnover 24% 24% 28% 6% 24% 33% 37% 21%
NET
ASSETS,
end
of
year
(000
omitted) $ 92,132 $ 93,162 $ 95,167 $75,273 $193,265 $ 195,179 $199,772 $ 172,534
</TABLE>
(1) The annualized expense ratios for the six months ended February 29, 1996
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the three periods ended August
31, 1995 and 1994 and September 30, 1993 have not been adjusted to reflect
this change.
+ Annualized.
* For the eleven months ended August 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
*** For the seven months ended August 31, 1994.
See notes to financial statements
94
<PAGE> 95
- ------------
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO
-------------------------------------------------------- -----------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, ------------------------------------- FEBRUARY 29, --------------------------
1996 AUGUST 31, AUGUST 31, SEPT. 30, 1996 AUGUST 31, AUGUST 31,
(UNAUDITED) 1995 1994* 1993** (UNAUDITED) 1995 1994***
---------------- ---------- ---------- ----------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
RATIOS (As a
percentage of
average
daily net assets):
Net expenses (1) 0.52%+ 0.50% 0.46%+ 0.43%+ 0.56%+ 0.44% 0.37%+
Net investment
income 5.29%+ 5.60% 5.26%+ 5.30%+ 5.57%+ 5.81% 5.47%+
Portfolio Turnover 16% 22% 15% 32% 15% 75% 23%
NET ASSETS, end of
year (000 omitted) $142,408 $146,391 $153,119 $ 127,497 $ 62,445 $61,412 $ 62,265
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
-------------------------------------------------------- -------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, ------------------------------------- FEBRUARY 29, ----------------------------------------
1996 AUGUST 31, AUGUST 31, SEPT. 30, 1996 AUGUST 31, AUGUST 31, SEPT. 30,
(UNAUDITED) 1995 1994* 1993** (UNAUDITED) 1995 1994* 1993**
---------------- ---------- ---------- ----------- ---------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RATIOS
(As a
percentage
of
average
daily
net
assets)++:
Net
expenses
(1) 0.47%+ 0.41% 0.36%+ 0.08%+ 0.53%+ 0.48% 0.46%+ 0.43%+
Net
investment
income 5.44%+ 5.81% 5.49%+ 5.60%+ 5.50%+ 5.81% 5.49%+ 5.49%+
Portfolio
Turnover 12% 20% 10% 69% 13% 38% 48% 29%
NET
ASSETS,
end
of
year
(000
omitted) $ 58,407 $ 58,673 $ 56,496 $ 39,266 $191,478 $ 191,748 $194,519 $ 174,260
</TABLE>
++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>
<S> <C>
RATIOS (As a percentage of average daily net assets):
Expenses
(1) 0.31%+
Net
investment
income 5.37%+
</TABLE>
(1) The annualized expense ratios for the six months ended February 29, 1996
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the three periods ended August
31, 1995 and 1994 and September 30, 1993 have not been adjusted to reflect
this change.
+ Annualized.
* For the eleven months ended August 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
*** For the seven months ended August 31, 1994.
See notes to financial statements
95
<PAGE> 96
- ------------
Notes to Financial Statements
(Unaudited)
- --------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Alabama Municipals Portfolio (Alabama Portfolio), Arkansas Municipals Portfolio
(Arkansas Portfolio), Georgia Municipals Portfolio (Georgia Portfolio), Kentucky
Municipals Portfolio (Kentucky Portfolio), Louisiana Municipals Portfolio
(Louisiana Portfolio), Maryland Municipals Portfolio (Maryland Portfolio),
Missouri Municipals Portfolio (Missouri Portfolio), North Carolina Municipals
Portfolio (North Carolina Portfolio), Oregon Municipals Portfolio (Oregon
Portfolio), South Carolina Municipals Portfolio (South Carolina Portfolio),
Tennessee Municipals Portfolio (Tennessee Portfolio) and Virginia Municipals
Portfolio (Virginia Portfolio), collectively the Portfolios, are registered
under the Investment Company Act of 1940 as non-diversified open-end management
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 Portfolio is
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.
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, a
Portfolio may not achieve the anticipated benefits of the financial futures
contract and may realize a loss.
F. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Portfolios may engage in
when-issued or delayed delivery transactions. The Portfolios record when-issued
securities on trade date and maintain security positions such that sufficient
liquid assets will be available to make payment for the securities purchased.
Securities purchased on a when-issued or delayed delivery basis are
marked-to-market daily and begin accruing interest on settlement date.
G. USE OF ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expense during the reporting period. Actual results could differ from those
estimates.
H. OTHER--Investment transactions are accounted for on a trade date basis.
I. INTERIM FINANCIAL INFORMATION--The interim financial statements relating to
February 29, 1996 and for the six month period then ended have not been audited
by independent certified public accountants, but in the opinion of the
Portfolios' management, reflect all adjustments necessary for the fair
presentation of the financial statements.
96
<PAGE> 97
- ------------
- --------------------------------------------------------------------------------
(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 February 29, 1996, each Portfolio paid advisory fees as
follows:
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT EFFECTIVE RATE*
--------------------------------- -------- ---------------
<S> <C> <C>
Alabama $235,755 0.40%
Arkansas 144,914 0.36%
Georgia 246,008 0.40%
Kentucky 296,998 0.41%
Louisiana 40,694 0.23%
Maryland 230,735 0.39%
Missouri 175,384 0.38%
North Carolina 421,159 0.43%
Oregon 298,353 0.41%
South Carolina 103,031 0.33%
Tennessee 93,209 0.32%
Virginia 415,579 0.43%
</TABLE>
* Advisory fees paid as a percentage of average daily net assets (annualized).
To enhance the net income of the Louisiana Portfolio, BMR made a preliminary
reduction in its fee in the amount of $20,233 for the six months ended February
29, 1996. 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) serves as custodian of the Portfolios.
Prior to November 10, 1995, IBT was an affiliate of EVM and BMR. 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. All
significant credit balances used to reduce the Portfolio's custody fees are
reported as a reduction of expenses in the Statements of Operations. Certain of
the officers and Trustees of the Portfolios are officers and directors/trustees
of the above organizations.
Trustees of the Portfolios that are not affiliated with the Investment Adviser
may elect to defer receipt of all or a percentage of their annual fees in
accordance with the terms of the Trustees Deferred Compensation Plan. For the
six months ended February 29, 1996, no significant amounts have been deferred.
- --------------------------------------------------------------------------------
(3) INVESTMENTS
Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, for the six months ended February 29, 1996 were as
follows:
<TABLE>
<CAPTION>
ALABAMA PORTFOLIO ARKANSAS PORTFOLIO GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
------------------- ------------------------ ------------------- ------------------------
<S> <C> <C> <C> <C>
Purchases $27,670,858 $ 3,927,474 $13,027,865 $ 14,575,121
Sales 35,272,238 9,444,548 17,817,486 23,881,130
</TABLE>
<TABLE>
<CAPTION>
LOUISIANA PORTFOLIO MARYLAND PORTFOLIO MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
------------------- ------------------------ ------------------- ------------------------
<S> <C> <C> <C> <C>
Purchases $19,864,205 $ 13,188,699 $21,927,678 $ 46,771,780
Sales 19,414,807 16,974,262 25,077,331 54,251,103
</TABLE>
<TABLE>
<CAPTION>
OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
------------------- ------------------------ ------------------- ------------------------
<S> <C> <C> <C> <C>
Purchases $23,681,196 $ 12,627,560 $ 6,731,260 $ 24,192,170
Sales 33,494,840 9,810,662 8,679,936 29,261,305
</TABLE>
97
<PAGE> 98
- ------------
- --------------------------------------------------------------------------------
(4) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation (depreciation) in value of the investments
owned by each Portfolio at February 29, 1996, as computed on a federal income
tax basis, are as follows:
<TABLE>
<CAPTION>
ALABAMA ARKANSAS GEORGIA KENTUCKY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Aggregate Cost $106,424,866 $ 74,234,823 $111,816,704 $132,011,225
------------ -------------- ------------ --------------
Gross unrealized
appreciation $ 5,762,960 $ 3,370,569 $ 6,367,562 $ 6,591,130
Gross unrealized
depreciation 292,263 166,192 318,923 834,252
------------ -------------- ------------ --------------
Net unrealized
appreciation $ 5,470,697 $ 3,204,377 $ 6,048,639 $ 5,756,878
============== ================= ============== ==================
</TABLE>
<TABLE>
<CAPTION>
LOUISIANA MARYLAND MISSOURI NORTH CAROLINA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Aggregate Cost $ 34,129,415 $109,820,786 $ 88,186,683 $177,222,075
------------ -------------- ------------ --------------
Gross unrealized
appreciation $ 1,035,743 $ 5,214,566 $ 5,272,757 $ 12,222,862
Gross unrealized
depreciation 288,669 688,327 411,943 525,212
------------ -------------- ------------ --------------
Net unrealized
appreciation $ 747,074 $ 4,526,239 $ 4,860,814 $ 11,697,650
============== ================= ============== ==================
</TABLE>
<TABLE>
<CAPTION>
OREGON SOUTH CAROLINA TENNESSEE VIRGINIA
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Aggregate Cost $133,580,135 $ 63,721,739 $ 55,218,447 $174,878,592
------------ -------------- ------------ --------------
Gross unrealized
appreciation $ 6,683,073 $ 3,770,741 $ 2,529,175 $ 12,379,727
Gross unrealized
depreciation 574,733 81,010 236,807 156,366
------------ -------------- ------------ --------------
Net unrealized
appreciation $ 6,108,340 $ 3,689,731 $ 2,292,368 $ 12,223,361
============== ================= ============== ==================
</TABLE>
98
<PAGE> 99
- ------------
- --------------------------------------------------------------------------------
(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. Each Portfolio may temporarily borrow up to 5% of its
total assets to satisfy redemption requests or settle transactions. 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. At February 29, 1996, the Arkansas Portfolio, Kentucky Portfolio,
Louisiana Portfolio, South Carolina Portfolio, Tennessee Portfolio and Virginia
Portfolio had a balance outstanding pursuant to this line of credit of $446,000,
$805,000, $671,000, $3,007,000, $86,000 and $39,000, respectively. For the South
Carolina Portfolio the average daily loan balance for the six months ended
February 29, 1996 was $2,378,831 and the average daily interest rate was 6.95%.
The maximum borrowings during the six months ended February 29, 1996 was
$5,391,000. The Portfolios, exclusive of the South Carolina Portfolio, did not
have any significant borrowings or allocated fees during the six months ended
February 29, 1996.
- --------------------------------------------------------------------------------
(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.
A summary of obligations under these financial instruments at February 29, 1996
is as follows:
<TABLE>
<CAPTION>
NET UNREALIZED
FUTURES CONTRACTS APPRECIATION
PORTFOLIO EXPIRATION DATE CONTRACTS POSITION (DEPRECIATION)
- ---------------- ----------------- ------------------------ -------- --------------
<S> <C> <C> <C> <C>
Alabama 6/96 20 U.S. Treasury Bonds Short $ (3,189)
Arkansas 6/96 20 U.S. Treasury Bonds Short 2,127
Georgia 6/96 30 U.S. Treasury Bonds Short (3,190)
Kentucky 6/96 36 U.S. Treasury Bonds Short (453)
Louisiana 6/96 13 U.S. Treasury Bonds Short 17,305
Maryland 6/96 30 U.S. Treasury Bonds Short (3,190)
Missouri 6/96 25 U.S. Treasury Bonds Short 21,085
North Carolina 6/96 93 U.S. Treasury Bonds Short 113,424
Oregon 6/96 37 U.S. Treasury Bonds Short (465)
South Carolina 6/96 31 U.S. Treasury Bonds Short (4,265)
Tennessee 6/96 15 U.S. Treasury Bonds Short (1,595)
Virginia 6/96 49 U.S. Treasury Bonds Short (617)
</TABLE>
At February 29, 1996 each Portfolio had sufficient cash and/or securities to
cover margin requirements on open futures contracts.
99
<PAGE> 100
- ------------
Investment Management
- --------------------------------------------------------------------------------
FUNDS OFFICERS INDEPENDENT TRUSTEES
THOMAS J. FETTER DONALD R. DWIGHT
President President, Dwight Partners, Inc.
Chairman, Newspapers of New
JAMES B. HAWKES England, Inc.
Vice President, Trustee
SAMUEL L. HAYES, III
ROBERT B. MACINTOSH Jacob H. Schiff Professor of
Vice President Investment Banking, Harvard
University Graduate School of
JAMES L. O'CONNOR Business Administration
Treasurer
NORTON H. REAMER
THOMAS OTIS President and Director, United
Secretary Asset Management Corporation
JOHN L. THORNDIKE
Director, Fiduciary Company
Incorporated
JACK L. TREYNOR
Investment Adviser and Consultant
- --------------------------------------------------------------------------------
PORTFOLIOS OFFICERS INDEPENDENT TRUSTEES
THOMAS J. FETTER DONALD R. DWIGHT
President President, Dwight Partners, Inc.
Portfolio Manager of Chairman, Newspapers of New
South Carolina England, Inc.
Municipals Portfolio
SAMUEL L. HAYES, III
JAMES B. HAWKES Jacob H. Schiff Professor of
Vice President, Trustee Investment Banking, Harvard
University Graduate
ROBERT B. MACINTOSH School of Business Administration
Vice President
Portfolio Manager of NORTON H. REAMER
North Carolina and President and Director, United
Louisiana Municipals Asset Management Corporation
Portfolios
JOHN L. THORNDIKE
TIMOTHY T. BROWSE Director, Fiduciary Company
Vice President and Portfolio Incorporated
Manager of Alabama, Arkansas
and Maryland Municipals JACK L. TREYNOR
Portfolios Investment Adviser and Consultant
CYNTHIA J. CLEMSON
Vice President and Portfolio
Manager of Georgia, Missouri,
Oregon and Tennessee
Municipals Portfolios
DAVID C. REILLY
Vice President and Portfolio
Manager of Virginia and
Kentucky Municipals
Portfolios
100
<PAGE> 101
- ------------
- --------------------------------------------------------------------------------
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
89 South Street
Boston, MA 02205-1537
TRANSFER AGENT
First Data Investor Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
101
